The capitalist social formation finds itself in one of its major crises. The economic and financial crisis has primarily struck the centres of capitalism.
Yet, the current great crisis not only shows all the signs of an economic crisis, but is over-determined by further crisis dynamics such as those of raw-material supplies, climate, environment, of education, gender relations and food. This justifies our speaking of a multiple crisis of global dimensions. One of the features of this multiple crisis is that it is also a crisis of politics: that is, of the class compromise, of democracy and the state (see Poulantzas 1976; Demirović 2011).
According to a bourgeois self-conception, the market and democracy are not only interconnected historically but also logically. In this case a crisis of market processes would have to go hand in hand with a crisis of democracy. However, this poses the question of the cause and effect. From a liberal point of view the market is seriously disturbed by political intrusion into the self-regulatory economic laws of supply and demand. The competences of democratic institutions are then said to be overstretched. In order to comply with the electorate or their own interests, politicians would tend to transcend the logic of political institutions, which had originally served to guarantee the general framework for the smooth functioning of economic processes.
From a social-democratic left perspective such state intervention is considered both necessary and desirable – necessary because, internally, economic reproduction itself leads to crises. Thus, correction by state regulation is required. To achieve this, there is a comprehensive set of political instruments which function through state revenue derived from taxes, public-sector borrowing and state-owned companies – and through regulation and money spent in the labour market, education and training, infrastructure or research, in foreign trade or currency. Such intervention is considered desirable, because it is in keeping with the interests of voters, that is, it secures a broad, democratic basis for the state. Market and democracy allegedly involve different logics of action: in the case of the market the logic is that of money, the stability of its value and the capacity to create demand associated with this stability.
This logic also includes the logic of poor and rich. The rich are able to exert influence on the media and politics by sending representatives of their interests into the parliamentary lobbies or the ministries, buying politicians or becoming actively involved in politics themselves and so appropriating the state like their own private company. The logic of democracy not only comprises equality before the law but also equality of votes. Parliamentary majorities can thus be created which override the interests of the few wealthy people. This would work the better, the less the state is merely a public security force guaranteeing the external legal framework, and the more it is a welfare state intervening in the economic cycles. In this way it is possible also to integrate the interests of broad groups of the population in the actions of the state and to create a broad, democratic consensus supported by a broad alliance of antagonistic classes (cf. Streeck 2011).
On the other hand, based on the Marxist theory and critique of the state I would like to argue here that the state and representative democracy are autonomous and that therefore political action in the area of the state actually follows a different logic. Yet, this logic does not fundamentally stand in contradiction to capitalist conditions. The basis for this assertion is that the capitalist mode of production is in part defined by the separation of relations of production from state authority. Authority assumes the political form of the state. This turns the feudal conditions upside down: under the latter, the aristocratic owners acknowledged that they had been given the property rights and the rights of use of land, peasants and serfs by the feudal overlord. Authority was a personal relationship and directly political. Under capitalist conditions the appropriation of social wealth occurs in the form of private legal relations between formally equal and free participants in the markets.
Under “normal” conditions, the tasks of general importance are delegated to the state by property owners pursuing their private interests, with the state protecting these owners, but not itself possessing power or itself becoming a super-owner. Political authority is to guarantee the cohesion of the owners of capital who are privately competing against each other (but who are very few in numbers and moreover do not bear arms) vis-à-vis the social classes they exploit and to guarantee protection from external dangers. The state has three tasks in particular: a) to guarantee the general conditions of reproduction: money, measures, taxes, the law, education, traffic; b) to organise the control over, and consensus among, the ruled classes and c) foreign trade and military protection. Yet, this transferral of power does not just relieve the owners of the responsibility of ruling; from now on they also have to be on their guard that the general interest of the state is not determined by particular interest groups in such a way that they are themselves put into a disadvantaged position.
Inevitably there will be conflicts over the definition of the common good, since the interests of the individual owners of capital in relation to each other and also in relation to those ruled are different. Some of them require a well-trained work force, seek defence contracts with the state or extensive infrastructure measures, others consider these to be unnecessary burdens and a competitive disadvantage. To prevent the definition of the common good from being arbitrarily taken over by the state administration or particular forces among the bourgeoisie, parliament was developed as a political organ. It makes the formation of political will and decision-making transparent; in shaping the future, negotiations between the different and partly very contradictory interests of the bourgeois class can produce an equilibrium; decisions once made can be revised; elections and party coalitions make it possible to give a temporary position of predominance to other interest constellations in an orderly way. Through parties, a politically calculable, identifiable and accountable political personnel is established whose task is to assert the will of parliament vis-à-vis the administration, so that compromises once arrived at and mediated by the public administration and the national media and public spaces, can be implemented over the entire territory of the state as the collective will. This is by no means to be taken for granted, because the unification of administration is in itself a political activity; and in several spaces particular constellations of power and compromise can develop, which can fragment the administration.
I want to be very clear: my thesis is not that democratic politics is functionally subordinated to the imperatives of capital valorisation. In fact, it is the other way round: the state is that political form in which the bourgeois class organises itself as the ruling class. Politics is autonomous, because only by this autonomy is it possible for bourgeois forces to strike a balance between their own divergent interests without undermining their common foundations of appropriating the living labour power of wage dependents, of the valorising and exploiting of nature and of the sexist and racist control over human beings.
Representative democracy should not be understood from the perspective of formal, equal and general suffrage. It is the form in which the fundamental bourgeois conflict between the general and the specific is fought out. In this conflict there have always been attempts to appropriate power of the state in favour of the conception of the interest held by particular groups and in that way to bring the democratic process to a halt. Therefore the bourgeoisie has created a number of civil society forums for discussion, committees, organisations and networks which closely monitor the state and civil society itself. They are to guarantee that society is not disturbed in its reproduction, the state is not weakened and their respective interests not ignored. In cases of crisis, through civil society processes of reaching consensus, agreements can be reached to disempower parliaments and transfer their power to special state apparatuses (such as the military, the police) or to an authoritarian party (fascism) which penetrates the state with forms of civil-society power.
Such consensus-finding processes also include the interests of segments of the lower classes in order to form respective alliances with them. Such alliances can be very comprehensive and can affect labour relations, wages and social transfers, consumption, education, opportunities for upward mobility or the right to participate. Even the number of jobs made available in the public sector is a means of such a class compromise. Nevertheless, the concept of democracy should not be abandoned by the left simply due to this historical constellation – because in the future even if the bourgeois class no longer defines what is considered the common good, even if democracy no longer means the negotiation between different fractions of the ruling classes with the partial taking into account of the interests of subalterns, there will still be conflicts between the general and the particular for a long time. Therefore it was one of Marx’s aims to promote general and equal suffrage in all social spheres. The understanding of democracy should no longer be reduced to the subalterns’ right to have a say in the decisions made by the rulers but should be transformed to mean the self-government of freely associated people.
Parliamentary representative democracy is never completely secure. It repeatedly comes under pressure because individual groups of the bourgeoisie and their spokespersons ask themselves if the complicated processes of negotiation are not too restrictive and do not hamper their future freedom of decision too much. In the young history of parliamentary democracy – which in the OECD states was more or less fully established only after the First and more completely after the Second World War – there have been recurrent crises of democracy. Major crises occurred such as the exceptional form of fascist state or military dictatorships. On a less existential level, democratic mechanisms are hollowed out or threatened by emergency laws or the temporary suspension of civil rights, by employment bans, secret service operations (dossiers, blackmailing, the committing of crimes even including murder, secret prisons), police provocations, measures of surveillance of party members or publications as well as police measures (prohibited zones for demonstrations, requiring demonstrators to register with the police), the surveillance of public space, and through corruption and informal power networks as well as secret networks (the P-2 Lodge in Italy or the “deep state” in Turkey). On the civil-society level anti-democratic forces such as right-wing or right-populist parties, magazines, publishing houses, music bands or groups and gangs prone to violence represent a permanent menace. Thus there are always crises of democracy; it is the forms that vary.
At any rate, there is a kind of pacification or reassurance discourse that also belongs to parliamentary democracy, in which the bourgeoisie convinces itself, or lets itself be convinced, that although there may be bourgeois-authoritarian alternatives to parliamentary democracy, the latter is still the best of all bad political forms. Each faction knows that it cannot permanently assert its power if it attempts a permanent occupation of the political institutions of the state in its own interest. Pacification consists in the self-assurance that decisions made in parliament take different interests into account, that is that they are based on compromises and a wide range of information, that in case of doubt these decisions can be taken back, thus avoiding obstacles and counter-mobilisations that could impede their implementation (for example, in Germany the turnaround in nuclear policy after the Fukushima accident). In fact, the complexity of the decision-making process helps make the decisions last longer, makes them more efficient and generates less resistance. This also holds true as regards the lower classes. They are included, their representatives are involved in a broad network of participatory bodies (parliament, broadcasting corporations, social security agencies, unemployment administration and the co-determination committees of companies; citizens’ initiatives, NGOs), and their interests are taken into account (working hours, protection from firing, training, declaration of the general application of collective agreements).
This taking into account of the interests of the lower classes requires concessions on the part of the bourgeois class and not only restricts the room for manoeuvre in political decisions but also the power of control over societal wealth. Neoliberalism can be understood as a strategy to dissolve the compromise established through and embodied by parliamentary and democratic institutions and to abandon any concessions to the subaltern social classes – or to adopt them only in a very flexible and temporary way. This practice was first made possible in the 1970s and has increasingly been implemented since the 1990s by outsourcing production to Eastern and Southern Europe as well as to Eastern and South-Eastern Asia and by access to a highly qualified workforce as a consequence of immigration and high unemployment. This permitted enormous pressure to be put on social standards and on the wages for which wage earners have to sell their labour. The Fordist class compromise was attacked with varying degrees of ferocity and dissolved, and with it the welfare-state democracy of the post-war era which was based on it. To describe this phenomenon, Colin Crouch (2008) has developed the much-discussed concept of “post-democracy”. Although it accurately captures certain phenomena, it does not completely fit the situation. With it, Crouch denotes the fact that elections are still held, yet the majority of citizens play only a passive role with real politics being made by the elected governments and elites behind closed doors and in favour of the economy. Boredom, frustration and disillusionment are described as spreading. This critique, correct as it is, hardly describes something new, as such trends have been continually observable for many decades. To be sure, these phenomena are not benign, but at the same time they reveal little of what is particular to the current situation. In addition, Crouch’s critique tends to make us passive. If in the 1960s – as with Johannes Agnoli or Jürgen Habermas – there was an impulse to revitalise democracy, Crouch’s theses are problematic in that he derives a sort of inevitable decline of democracy from this development: we are said to have arrived at the end of the parable of democracy as a political system (ibid., 30) – the arrival of post-democracy cannot be reversed. In this Crouch is not pleading for a comprehensive new version of the project of democracy which could go beyond a mere reform of political democracy and comprise our entire social co-existence and relationship to nature. At best he sees a possibility of delaying the current negative development somewhat.
There is no more secular trend toward crisis than there is toward democracy. Rather, there are cycles of democratisation and crisis. These crises of democracy take specific forms and are closely linked to the forms of concrete capitalist socialisation and the compromises between the different social groups and classes. What is specific about the current crisis of democracy is its relation to the dissolution of the Fordist class compromise and the development of a finance-dominated accumulation regime. It arose as an answer to the crisis of over-accumulation which had become increasingly apparent since the 1970s: surplus capacities and the increasing difficulty of profitably investing the huge masses of surplus money capital, whose value had at the same time to be protected from inflationary trends (which were the consequence of struggles for higher wages). The finance-dominated accumulation regime emerging in the 1990s is characterised by the increase of the financial industry’s share in added value and profits, by shareholder-value, i.e., the control of companies by institutional investors, the capitalisation of public agencies, by the increase of profits which also industrial enterprises reaped from financial transactions. This was made possible by a wave of deregulation, in particular affecting the financial markets and opening new business models to investors, and by privatisation of public property.
In 2008 and 2009 this accumulation regime led to a dramatic crisis of the capitalist mode of production and the bourgeois social formation. Since then we have been witnessing the implementation of a dense chain of emergency measures and exceptional state practices. In 2008, David Harvey spoke of a financial coup d’état that had taken place in the USA after Secretary of the Treasury Henry Paulson encouraged mobilising public resources of several hundred millions of US Dollars to purchase toxic papers and thus maintain the liquidity of banks. Similar measures were adopted in Germany. After only a few days of parliamentary deliberation, the Special Fund for Financial Market Stabilisation was established in October 2008. This gave a very small number of people the right to decide over public resources in the volume of 500 billion Euros to be used for protecting the banks. This so-called advisory board was not responsible to parliament; in fact, the parliament’s budgetary rights were restricted and a kind of emergency government created (see Demirović 2009).
The logic of the emergency scenario also determined the further course of action of the German government, the Euro Group as well as the EU Commission. A variety of mechanisms were developed which are not provided for in the treaties and procedures of the EU. Austerity politics vis-à-vis Greece is implemented by the so-called Troika: EU, ECB and IMF. In Greece and Italy, so-called governments of experts, headed by Loukas Papademos and Mario Monti respectively, were installed to provisionally replace the elected governments. In his function as president of the Greek Central Bank, the new Greek prime minister was responsible for Greece being allowed into the Eurozone with manipulated statistics; Italian prime minister Monti was an advisor for Goldman Sachs after stepping down from his post as European Commissioner for Competition. Mario Draghi, President of the ECB, was head of the European branch of Goldman Sachs. Jörg Asmussen, now responsible for crisis management in the ECB’s board of directors, was state secretary in Germany’s Ministry of Finance and a member of the steering and advisory board of the Bank Rescue Fund; he was heavily involved in the development of a particular finance-market friendly legislation (the allowing of hedge funds) and active for a lobbying organisation. As in the USA, crisis management also in the EU is conducted by persons with close ties to the financial industry who obviously guarantee that regulations remain weak and suit the interests of the owners of wealth – and thus that their assets and the value stability of their assets are secured or, put another way, that the crisis dynamic is not overcome through appropriate measures but that the social state is further dismantled for purposes of these unrealistic goals while the degree of exploitation of wage workers is increased. The attempt of former Greek Prime Minister Papadopoulos to submit the austerity policy agreed on with the Troika to a referendum at the end of 2011 was considered entirely inacceptable by the forces in power. Germany requested the appointment of a commissioner to watch over the implementation of the austerity measures; in addition, rumours were heard that within the ranks of the EU bureaucrats and the German federal government a military dictatorship was seen as an option. The authorisation of a 130 billion Euro loan was tied to the condition that a frozen account would be established, which was not to be controlled by the Greek state. Parliaments and populations are thus largely excluded from the political decision-making processes. In late 2012, the decisions of the Budgetary Pact (introduction of the “debt brake”, debt reduction, automatic sanctions, a structural adjustment programme, mainly directed against the social rights of wage earners) were laid down in an inter-governmental treaty outside the EU’s legal framework and relevant procedures. This means that treaty negotiations, decisions and implementation largely occur outside the framework of democratic procedures and publicly controlled responsibilities. Crisis management is thus tightly controlled by representatives of the asset owners who pursue their measures in a series of emergency operations. The formal, democratic-parliamentary state is not eliminated or replaced as is the case in forms of emergency state but is rather complemented by a kind of emergency regime operating in parallel with it. Even in bourgeois circles this development is clearly encountering increasing uneasiness. “At a European level ad hoc-agencies and opaque institutions which can disappear tomorrow decide over billion-Euro sums in late-night meetings. In Italy and Greece, expert cabinets of questionable political legitimacy have been put into office for this purpose. Elections or referenda are nowhere welcome, because democracy takes time and time is money and of that there is never enough” (Frankfurter Allgemeine Zeitung, March 5, 2012).
However, such emergency-state practices which undermine democracy are rooted in a context characterised by further anti-democratic dynamics. In the everyday culture of many people the Catholic Church plays an important and problematic part: it fights abortion rights and gay marriage; in Spain it is closely linked to the PP which is opposed to coming to terms with the past. In a similar way this is also true for Hungary, where in the name of the struggle against totalitarianism, the memory of the fascist tradition is largely blotted out. Even if they do not take place in Europe, the authoritarian practices widespread in the USA are by no means unimportant, among them the struggle of the Republicans against abortion rights, the social welfare state and public health and pension insurance. But also the fact that Guantanamo still exists, that its inmates, being so-called “enemy combatants”, have no rights at all, is as serious as the “National Defense Act” signed by President Obama in December 2011, which allows the army to imprison any US citizen suspected of terrorism for an unlimited time and without judicial control.
The protests organised in some countries have so far had little effect. The participants – Greeks, Italians, Spaniards and Portuguese – are protesting by themselves and with a view to their own governments. The danger of a relapse into a new nationalism is real. Instead, Europe-wide forms of political discussion are necessary, for example, within the context of Attac, the joint protest of the social movements (such as in Frankfurt in May) or the European trade unions. Those among the working or petit bourgeois classes are blind if they believe they will be spared the austerity measures. Moreover, these measures will contribute to the deterioration of the economic situation, because the German model (focus on exports, low wages, debt brake, government cutbacks) cannot be generalised. To preserve and strengthen democracy it is necessary to demand, to strengthen and to advocate democratic rights not only on a national, but also at a European level. Democratisation of the European Union is long overdue. This process of democratisation must not restrict itself to strengthening parliament and creating a European public. Rather, it has to envisage, alongside the democratisation of all areas of everyday life, a democratisation of the economy, that is, of labour relations, the investment function of companies as well as the democratisation of credit. Such democratisation can only be realised in the form of a democratic socialism.
Demirović, Alex (2009): “Kehrt der Staat zurück? Wirtschaftskrise und Demokratie” [Is the State Coming Back? Economic Crisis and Democracy], in: Prokla 157, No. 4, December 2009.
Demirović, Alex (2011): “Ökonomische Krise – Krise der Politik?” [Economic Crisis – Crisis of Politics?], in: Alex Demirović, Julia Dück, Florian Becker, Pauline Bader): VielfachKrise. Im finanzmarktdominierten Kapitalismus [Multiple Crisis. Inside Financial-Market Dominated Capitalism], Hamburg 2011.
Poulantzas, Nicos (1976): “Les transformations actuelles de l’État” [The Current Transformations of the State], in: idem (ed.): La crise de l’État [The Crisis of the State], Paris.
Streeck, Wolfgang (2011): “Die Krisen des demokratischen Kapitalismus” [The Crises of Democratic Capitalism], in: Lettre internationale 95, Winter 2011.