Quarterly_3-2012_komplett.qxd 22.02.201309:37Seite1 [Limberg BoxPatch :TrimBox [0] BleedBox [3] MediaBox [10] Patch : Page 1] Multilevel Network Dynamic, a Statehood Today: A conversation withStephanLeibfried Talking about Taxes isnolonger Taboo Erhard Eppler »There arenohalfmeasureshere« A conversationwithSergeiStanishev foreign policyideas Searching forMittRomney’s Niels Annen a GuideforthePerplexed Campaign Financein America: Lewis Hinchman Journal ofSocialDemocracy Quarterly_3-2012_komplett.pdf 32012 € 3,80 INTERNATIONAL QUARTERLY EDITION Quarterly_3-2012_komplett.qxd 22.02.2013 09:37 Seite 2

INHALT

1 Editorial Roland Benedikter 2 Eurozilla? Europe Casting its Shadow over the U.S. Presidential Elections Lewis Hinchman 5 Campaign Finance in America: a Guide for the Perplexed Niels Annen 8 Reset the Reset: Searching for Mitt Romney’s foreign policy ideas Axel Striebeck 10 America’s Pacific Century? Rebalancing U.S. foreign policy in the Asia-Pacific region A conversation with Sergei Stanishev 13 »There are no half measures here« Klaus Hänsch 15 The Crooked and the Straight: A look at Jürgen Habermas’ Essay on the European constitution Erhard Eppler 17 Talking about Taxes is no longer Taboo Jennifer Gronau/Henning Schmidtke 22 Democracy in the Age of Global Governance A conversation with Stephan Leibfried 24 Statehood Today: a Dynamic, Multilevel Network Thomas Meyer 29 State, Market, and Civil Society

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EDITORIAL

he most recent disasters precipitated by self-regulating Tfinancial markets should have taught us some long over- due lessons – lessons which are in fact applicable all across the globe. There needs to be a renaissance of the state and a rehabilitation of the taxes without which the state cannot carry out its public responsibilities. It is not easy to put this teaching into practice, however, as long as the economic interests that precipitated the crisis in the first place keep making the decisions about what is going to be discussed and practiced.We are experiencing this in especially drastic fashion in the American elections. The Republicans are acting as if the drama of the global financial crisis had never happened, and as if the state – which after all bailed out the banks with taxpayers’ money – were the true villain of the piece. But what else besides a competent state would ever be able to defend the interests not just of this or that particular society but of global society as a whole by reining in the out-of-control poker game run by the financial markets? Who could offer any plausible counterarguments against the points made by Sigmar Gabriel, chairman of the German Social Democratic Party, when he said of the current banking system: »Banks are blackmailing the state.« »Banks pay outlandish salaries.« »Banks dictate to politics.« Societies now stuck with the bills for the hybris of financial markets are beginning to understand all this more and more clearly. One of the crucial topics of this volume concerns the state and its respon- sibility to influence markets in the interest of society as a whole.What can and must the state do, assuming that the general welfare, justice, and human well- being are supposed to take priority over his majesty, the market? The state’s priorities in such cases are just as they should be in a democracy and certainly one wedded to a self-styled social welfare state.We live in an age marked by the transformation of the state. In our post-national arrangements, the functions traditionally associated with statehood are being redistributed among the national, regional, and global levels. But, as the great European crisis reveals, these functions do not need to be abandoned completely or even watered down. If the political elites really wanted to, they could re-focus such functions in the state and make them effective once more.Rarely has the wisdom of the left been more obviously confirmed than in the last few years. The market makes a good servant but a poor master. Only competent statehood can make sure that this insight is taken to heart in actual practice. The world is now a fascinated spec- tator, waiting to see whether American voters also take it to heart in the up- coming November elections.

Thomas Meyer Editor-in-Chief and Co-Publisher

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Roland Benedikter Eurozilla? Europe Casting its Shadow over the U.S. Presidential Elections

Roland Benedikter to work well even with some Democrats. (*1965) is European Foundation Professor of Europe has always been accused of what Political Sociology in residence at the Orfalea Center for Global and International Studies seems now to have become a reality, as of the University of California at Santa Barbara allegedly shown by the debt and euro crisis, and at the Europe Center of Stanford University. the crisis of the welfare state and of the Homepage: http://europe.stanford.edu/people/ European health care system, the crisis of rolandbenedikter. European institutions and politics, and not contact: [email protected] least the deep rifts between the U.K. and Continental Europe, exemplified and broad- ccording to the rhetoric of the Repub- ened by the debt crisis. Last but not least, Alican candidates – both those who there has been the failure of Continental have given up in the meantime and those European leaders, mainly Angela Merkel who remain –, contemporary Europe is and Nikolas Sarkozy, to implement their on the wrong path in every sense: eco- envisaged transnational financial trans- nomically, politically and culturally, not action tax and a globally harmonized tax to speak of technology and demography. system,as well as to internationalize aspects And Barack Obama is depicted as Europe’s of the reforms of the banking system in (willing or unwilling) agent in America, February and March 2012. All that contri- trying to import the failures of the Old buted to further discrediting European World into the New. policies in the view of many U.S. voters. Indeed, in their desperate fight against In the view of the current Republican a foe superior in basically everything that presidential candidates, Europe (or better: American voters usually reward: achieve- the European spirit, and accordingly the ment, leadership, youth, rhetoric, image, »party of Europe«) must – and should – be education, intellect, fluency, family and blamed for all the failures that led to the wit, the Republican candidates are trying present crises, and also for potential ones in to play what they consider one of their few a possible future.Europe,being the colonial potentially winning – and at the same time predecessor of America, must have laid the quite easy and cheap – rhetorical cards: foundations of everything that eventually anti-Europeanism. They are trying every- went wrong in current America. Given that thing to create a new popular myth based America in its core represents the invin- on a simple identification: Obama is Eu- cible spirit of the future,there must be some rope, not America. And Europe is doom. kind of a hidden inbuilt mechanism that is Equals: Obama is doom, of course. subverting it from its inside, and you call it This extremely reductive caricature, or, »the old European fault mechanism.« euphemistically speaking, rough outline of This is it at least what the Republican a negative comic-strip about Europe for use candidates want to make the American in U.S.popular culture (and propaganda),is public believe these days, thus subtly re- not really new. Even during the last presi- viving old anti-colonial feelings, and play- dential elections in 2008,a spectre was made ing on the still deeply inbuilt spirit of of the »old world« primarily by the Repub- »revenge« in parts of the American public licans,although the ghost of Europe seemed against the old continent.

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Four paradoxes ally on the »classical« ties between the U.S. and Europe, the new »Asia First«-strategy But already at first glance, there are – at of President Obama is much more orien- least – four paradoxes, if not clear contra- ted towards the Pacific, openly down- dictions inbuilt in this (old and new) grading (and downplaying) the impor- Republican view of Europe. tance of Europe on many occasions – to First, the Republicans claim to be the the point that the »loss of importance of experts on the economy, deriding Europe Europe« has become kind of a mantra in for its behaviour in the financial and debt Obama’s government and its public echoes. crises since 2007, and Obama for his pur- Given this background, it is just an- ported incompetence in economic and fi- other paradox that Bush was the most nancial issues in general. But they them- derided and despised U.S. president in selves apparently don’t know that be- Europe since WW II, while Obama is the hind their backs their own major political most beloved by Europeans, who indeed and lobbying clients, i.e. the U.S. Money often seem to mirror or even recognize Market Mutual Funds (MMMF’s), have themselves in him quite unreservedly, and started to massively re-invest in European obviously without knowledge about his governmental debt obligations as early as administration’s conviction that the future February, 2012. They obviously believe of the U.S. lies in the Pacific, not in the strongly in Europe’s medium- and long- Atlantic anymore. It is an open secret that term soundness, infrastructure, safety, Obama believes he can’t invest much time stability, growth, and future, just without in consultations with European leaders, telling it to their Republican represen- because in the era of the new multi-polar tatives on Capitol Hill. world characterized by the rise of China, Second, Romney seems to favour very India and the rapid development of similar, if not identical, austerity politics new »large« geopolitical spaces like South for the U.S. that European countries are America and Africa, they rapidly lose im- currently undertaking – i.e. less govern- portance and because they don’t speak ment, spending reviews, budget cuts, re- with one voice. It is no accident that Oba- duction of the federal deficits. How come ma is snubbing Europeans in ostentatious they blame Europe for doing everything ways, for example by breaking with tradi- wrong to master the debt crisis? In the end tion and not attending the EU-U.S. summit they are criticizing core issues of their own in Spain in May, 2010, asserting that he austerity strategy. Or, as the even the con- would »have no time« for »leaderless« and servative U.S. Christian Science Monitor »decision-weak« consultations with Euro- asks: »Is Mitt Romney’s Europe-bashing pean officials, the latter only finding out well placed?« about Obama’s last-minute snub through Third, the probably most accentuated press reports. In this view, the Republicans paradox is that, while the Republicans are who on the one hand propagate an openly tirelessly »bashing« everything they can cultural Anti-Europeanism, on the other find about Europe, in the end their party is hand seem to follow much more tradi- in many ways closer to future Atlantic lines tional power strategies in cooperation with and strategies than the current Obama Europe than large contingents of the administration and its counsellors. While current Washington Democrats. George W.Bush was probably the last tradi- These three paradoxes are eventually tional »Atlanticist«, basing his foreign and embedded in a fourth, overarching one global policy strategy and the respective which is not strictly Republican anymore: vision of democratization very tradition- Obama’s need to react repeatedly to the

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portrait of him drawn by the Republicans way Europe is currently perceived in the as the »Europeanizer of America« by USA is that, while the Obama adminis- distancing himself from Europe, and thus tration in power doesn’t lose any oppor- sometimes by harshly criticizing, if not tunities to demonstrate its new »Pacific« humiliating, Europe in his public state- orientation at the expense of Europe in ments on the state of the world. terms of political and strategic anticipa- tion, the Republicans are using what they depict as a caricature of »Europe« as a ne- The Costs of Downgrading gative cultural spectre in order to scare Relations with Europe U.S. voters and to profile themselves in front of a negative mirror. In a nutshell, there might be some truth in Tragically, both are contributing to the noting the growing differences between the loss of importance of Europe in the U.S. by U.S. and Europe that have surfaced during pursuing different,even opposed goals.But the recent crises. Germany’s »ordolibe- both could be on a track where they don’t ralism« is indeed the contrary of the anti- know what they are doing.Both Democrats cipative use of money by the U.S. economic and Republicans could be wrong in down- and financial culture; and France’s new, grading Europe, because the resulting loss increasingly restrictive immigration poli- of influence ultimately could come at tics could not be farther away from the America’s expense. Given that the U.S. essentially unbroken,open-minded Ameri- future in the medium and long term is can thinking (against the grain of Arizona most probably not in using Europe as a laws and similar).It is also the case that,due dead pledge for strategic interests on the to the new economic, political and demo- one hand and (simultaneously) for day-to- graphic shifts, America is drifting towards day gains in domestic politics on the other, the Pacific, and that Europe is becoming but in keeping and strengthening the smaller in a rapidly multi-polar world. connections with its most important de- Additionally, despite the continued success mocratic ally, the Republicans would have of U.S. popular culture in Europe, there the opportunity to gain in profile exactly by might be a sense of a growing cultural di- going for Europe, not against it. When will vide particularly in the dimensions of civil the Republican Party, driven by Tea Party religion, social psychology and general bias as it is, understand this (if at all)? perception of the greater societal good. If the Republicans continue with their But let us not forget: Atlanticism de- – on many occasions – irresponsible and cisively co-created the most open and flat-rate rhetorical campaign against Eu- individualistic society in the world – not rope, their largely artificially propagated the Pacific inclination. Who says that the cultural rift, and socio-political polariza- U.S. as we know it might not be risking tion within the West, that campaign could something important by tilting too far turn from electoral propaganda to self- toward the Pacific – for example to lose fulfilling prophecy. That is something aspects of its roots in Western culture, nobody on either side of the Atlantic can mind-set,history,political system and insti- want to occur. After this in many ways tutions? At the present moment, »Pacific« disastrous U.S. presidential campaign of has become a cliché synonymous with 2012, a better balanced mutual image of »positive« and »future«; »Atlantic« with Europe and the U.S. will have to be re- »negative« and »regressive.« But who says established, or better: newly established that this is the whole simple truth? between the Atlantic partners to meet the The real paradox with regard to the common future challenges. „

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Lewis Hinchman Campaign Finance in America: a Guide for the Perplexed

n 1974 the U.S. Congress passed the most Lewis Hinchman Ifar-reaching legislation on campaign (*1946) is Professor of Political Science (emeritus) at Clarkson University in finance in American history. These reforms Potsdam,New York and the English-language amended – and strengthened – an earlier editor for NG-FH.He also frequently law, the Federal Election Campaign Act teaches classes for Semester at Sea on its of 1971 (FECA) in the aftermath of re- round-the-world voyages. velations about illegal contributions and [email protected] »slush funds« offered by wealthy indi- viduals and corporations to the Nixon campaign in 1972 («Watergate«). In 2002 Koch, has spent $ 7 million so far on anti- the FECA was supplemented by the Bi- Obama media advertising. Big money is partisan Campaign Reform Act (called also pouring into campaigns for the House »McCain-Feingold«) to close loopholes in of Representatives and the Senate. For the earlier legislation. In short, lawmakers example, outside groups have already spent in the United States have made serious over $ 12 million to defeat Missouri’s De- efforts to reform an undemocratic and mocratic Senator, Claire McKaskill, most corrupt system. But today the entire edifice from Crossroads GPS and Americans for of campaign legislation lies in ruins, as Prosperity. During the 2008 election cycle, wealthy donors and big corporations total spending amounted to $ 5 billion. dominate American elections once again. Estimates are that this year it will exceed This essay explains how and why the $ 6 billion and conceivably reach $ 10 reforms failed. billion. Consider first some examples of big- What explains the enormous increase money campaign contributions in recent in large, often anonymous campaign contri- years. The far-right American Action Net- butions? And why are so many donations work received an anonymous donation of given to groups apparently unconnected $ 7 million to help defeat Democratic to the parties’ and candidates’ campaign candidates in the 2010 elections. The Ne- organizations? The story is complicated, vada casino king, Sheldon Adelson, has but three factors stand out: decisions by reportedly donated $ 25 million over the the Supreme Court that ruled key portions past two years, much of it going first to the of campaign finance laws unconstitutio- unsuccessful primary election campaign nal; the failure of the Federal Election of Republican Newt Gingrich, and now to Commission, the agency that is supposed Mitt Romney’s campaign. Crossroads GPS, to enforce campaign finance laws, to do its another conservative group headed by job; and the decision of one political party, Bush crony Karl Rove, raised nearly $ 40 the Republicans,to oppose most campaign million in the first 3 months of 2012, all finance reform. from anonymous donors. During 2011 The Federal Election Campaign Act,as Crossroads GPS raised $ 76 million, in- amended in 1974, attempted to control cluding two donations of $ 10 million each campaign costs by limiting both campaign from anonymous wealthy individuals. contributions and expenditures, insuring Americans for Prosperity, a group tied to that they would be disclosed fully to the oil industry billionaires David and Charles public, and instituting a system of (volun-

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tary) public financing for Presidential exemption applied to political committees elections. Corporations and labor unions that operated independently of the candi- were allowed to contribute to campaigns, dates and parties. They could spend as but only via registered Political Action much as they pleased. Thus, freedom of Committees (PAC’s), which would collect speech was protected, but not necessarily the funds, while keeping records of all equality of speech. Congress had passed donations.Corporations and unions could the FECA in part to establish greater not divert funds from their general treas- equality of political influence among citi- uries into political campaigns, but could zens, regardless of their wealth, hoping solicit contributions. Individuals were limi- that many small contributions would ba- ted both in how much they could give to lance off a few big ones. But the Court, in any one candidate and to all candidates or its decision, observed: »The concept that parties in the aggregate. However, Congress government may restrict the speech of later rewrote that rule, decreeing that un- some elements of our society in order to limited »soft money« could be contributed enhance the relative voice of others is to political parties for broad »party-build- wholly foreign to the First Amendment.« ing« purposes such as registering voters. In other words, the Court implied, the Stringent limits were also placed on total United States was never intended to be a spending by candidates for the all of the democracy in which all citizens would federal offices as well as how much of their have roughly equal influence on political own money they could put into their cam- outcomes; if wealthy citizens or groups paigns. All these rules would be overseen had a greater voice, then so be it! by the Federal Election Commission (FEC), The Supreme Court had created some whose six members were chosen by the gaping loopholes that would eventually be President, with no more than three from exploited by those who wanted to sluice one political party. large sums into American elections. By The constitutionality of the new regu- 2000 rich individuals and groups were lations was soon tested in the courts in a pouring »soft money« into party coffers, case called Buckley v. Valeo (1976). The with the tacit understanding that it would Court upheld virtually all the limits on be used to help elect specific candidates, contributions, but invalidated most of those thus circumventing the FECA contribu- concerning expenditures. Notably, the tion limits. And »issue advocacy« ads, justices ruled that candidates could spend which were little more than disguised as much of their own money as they campaign ads, proliferated. The Republi- pleased on their own campaigns.They also can members of the Federal Election held that the First Amendment, which Commission blocked all serious attempts grants freedom of speech to all citizens, to change those practices. They claimed does not permit restrictions on total ex- that every ad was mere issue advocacy penditures in a campaign or on spending unless it used the »magic words,« »elect by citizens to publicize their views on X!« or »vote for Y!« And they narrowed the certain issues (»issue advocacy«). That is, meaning of »corruption« to cover only I might not be able to contribute more those cases in which specific campaign than $ 1000 to the campaign of Senator X, expenditures had »paid for« later favors but I could spend unlimited funds on TV by a politician: a so-called quid pro quo ads to attack or support positions that arrangement. Senator X had taken, as long as I did not In response, Congress passed the Bi- explicitly say: »vote for – or against – partisan Campaign Reform Act of 2002, Senator X.« The same First Amendment which banned soft money contributions to

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national party committees and tightened individuals or corporations making such rules governing all »electioneering com- independent expenditures did not have munications« just prior to elections that to do so themselves; they could give the were not subject to the FECA contribution money to a new breed of political commit- limits noted above. tees which would actually spend it. Thus However, wealthy Americans, groups were created the 500 or so Super-PAC’s, and corporations, had been dreaming up such as Romney’s Restore our Future, that new ways to avoid campaign contribution have been so prominent in the 2012 elec- limits. They created a variety of organi- tions thus far. They are allowed to accept zations they believed would avoid FEC and spend unlimited funds, including scrutiny by registering them as non-profits from corporations, as long as they remain under various sections of the American »independent«, i.e., do not »coordinate« tax code: some, like Crossroads GPS their spending with the candidate or his mentioned earlier, were supposed to be staff. But the FEC has a very narrow crite- »social welfare organizations« and did not rion for coordination: it means that the even have to disclose the names of their candidate and his Super-PAC must actu- donors (the 501(c)(4) groups); others, the ally confer about strategy and select the once-notorious 527 organizations, were content of advertisements. As long as they blatantly political bodies that nonetheless do not do that, they can work together: did not have to register as Political Action the candidate can appear at fund-raising Committees, but which could accept un- rallies of his Super-PAC and ask sup- limited contributions (while disclosing the porters to contribute money to it. names of donors), and make unlimited ex- In effect Super PAC’s have taken over penditures. They were accountable only to many of the functions of political parties the U.S. tax authorities, not the FEC. 527 in running campaigns, but with few of the groups are losing favor now as the big funding/disclosure restrictions that Con- money is flowing into the 501(c)’s which gress has imposed on the latter. Together do not have to disclose the sources of their with the almost unregulated 527 and contributions. 501(c)(4) groups described already, they But then the Supreme Court knocked constitute a shadow world of political another large hole in the campaign finance fund-raising and spending that has allo- system approved by Congress in a case wed wealthy individuals and corporations called Citizens United v. Federal Election to dominate the campaign of 2012. The Commission (2010). In its decision, the Supreme Court achieved what it (or at Court’s Republican justices decided by a least its ultra-conservative Republican 5-4 majority that the BPCA had violated justices) wanted: a system in which ordi- the First Amendment by prohibiting cor- nary people, even if they made many small porations and unions from spending contributions, could never hope to equal money on »electioneering communica- the influence of the country’s billionaires tions« prior to elections. The Court de- and corporations. They have protected cided that, if individuals were entitled to freedom of speech at the cost of allowing make unrestricted »independent« expen- American democracy to be auctioned off ditures during political campaigns, then to the highest bidders. „ corporations should enjoy the same rights, since they were merely associations of individuals acting jointly. A later decision by a lower court expanded the new post- Citizens United regime by adding that

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Niels Annen Reset the Reset Searching for Mitt Romney’s foreign policy ideas

How does Mitt Romney see America’s future role in the world? His previous decla- rations on foreign policy have been stereotypical and simplistic. So far the GOP presidential candidate has not articulated any foreign policy vision at all. Never- theless, the pressure on him to take clear positions is only going to intensify.

Niels Annen fense ever since the 1950s. Yet President (*1973) was a member of the German Obama has proved almost invulnerable on Parliament and its Foreign Relations Committee until 2009,following which the security policy front. From Guantána- he spent time as Senior Resident Fellow with mo to the deployment of drones, Obama the German Marshall Fund in Washington. has continued the policies of the Bush He now contributes to international political analysis for the Friedrich Ebert Foundation. administration and even authorized the [email protected] killing of an American citizen who had been planning attacks against Americans. At least since the spectacular assassination ong before Mitt Romney managed to of Osama bin Laden, Republican criticisms Lsecure the presidential nomination of of the President have had a hollow ring to the Republican Party in an exhausting them, so the GOP has shifted its attacks to campaign,he tried to polish his credentials the domestic policy field. as a spokesman for American power poli- The epic battle for the Republican no- tics. Romney found his opening in the mination did not generate much enlight- initiatives undertaken by the newly elected enment about foreign policy. The candi- president to repair America’s standing in dates tried to outdo one another in taking the world, so badly tarnished by the pre- hardline positions, with the exception of vious administration. According to Rom- the libertarian Ron Paul, whose isolationist ney, America has no reason to apologize. stance remained clearly in the minority. The president, he said, was being naive if No serious foreign policy debate ever he thought that anyone could put Ame- emerged during the primaries. rica’s enemies in a more conciliatory mood The few comments Romney has made by offering them concessions. The reverse about the principles of America’s role in was true: the more concessions you offered the world have stuck to the usual clichés America’s adversaries, the more you en- (»the United States is good«). Commit- couraged them to keep up their struggle. ment to American »exceptionalism« is Those statements offered a preview of the central to his policy views, but then that is line of argument that the candidate would a theme which has been standard fare in follow from then on. both parties’ repertoire since the founding In this vein Romney called for the of the republic. But there are deeper rea- renunciation of the new START treaty and sons for his pointed emphasis on America’s published a special guest editorial (full of exceptional position.There has been much errors) to that effect in the Washington Post. discussion of late about »American de- His tactics were hardly surprising, since, cline,« especially since new books by Tom after all, Republicans have been accusing Friedman and Michael Mandelbaum have Democrats of being weak on national de- given it unprecedented exposure. Rom-

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ney’s advisors recognized early in the game UN ambassador. As David Sanger cor- that the GOP had an opportunity to link rectly observed in the New York Times, Barack Obama to the discourse of decline. prominent representatives of the realist The idea was to present every conciliatory wing of the Republican elite, e.g., Henry gesture he made – for example the olive Kissinger or Brent Scowcroft, are conspic- branch offered to Iran early in his presi- uously absent. What remains murky is dency – as a proof of weakness. Robert whether Romney’s »white paper« really Kagan, who has meanwhile become one of represents his own convictions,or whether Romney’s most prominent foreign-policy it merely reflects compromises reached by advisors, provides clues to this strategy. In his advisors on the appropriate formulas his polemic The World America Made he for public consumption (the advisors, as vehemently rejects the hypothesis of de- rumor has it, are not advocating any clear cline, while again dredging up all the old foreign policy line). arguments in favor of America’s special As far as Romney is concerned,Europe mission (incidentally, Barack Obama’s ad- does not even merit a footnote; the old visors have spread the word that their boss continent is almost entirely missing from enjoyed the book). the Public statements of the Romney cam- paign. On the other hand, the candidate has been far more candid about Russia Formulaic compromise than one might prefer. Evidently, his ad- or personal conviction? visors have not informed him about the premature demise of the Soviet Union 21 Romney’s previous statements have been years ago.He wants to put a stop to Russia’s remarkably simplistic. He promises to end imperial ambitions and reverse the so- both Iran’s nuclear program and China’s called »reset«, the symbolic new begin- currency manipulations. He wants to de- ning, in U.S.-Russian relations (»reset the feat the Taliban and disarm North Korea. reset«). Moreover, Romney considers the Furthermore, Romney wants to make his modifications in missile defense policy Middle East policy dependent on Israel’s wrought by Obama to have been a mis- consent (Netanyahu has been one of his take.Indeed,for Romney,Russia remains friends for many years). In the sole speech America’s number one geopolitical foe. of foreign policy that he has delivered since Remains the question of what sort of for- winning the primary elections, he has eign policy Europe really might expect played variations on the theme of Ameri- from a president Romney. So far there has can greatness and has criticized planned been the familiar blend of naivety and cuts in the defense budget,which he would ignorance, coupled with reports issued by like to fix permanently at 4 % of GDP.Even an experienced staff of advisors. None of a so-called »white paper« prepared by the this enables us to draw any conclusions Romney campaign has shed little light on about the true convictions of a candidate his intentions. To be sure, the language of who has already taken just about every the white paper is more diplomatic on imaginable position in just about every some issues than it has been in Romney’s field ofpolicy.However,for most observers previous statements, but it has not brought this is no reason for concern. David Miller, any further clarity to the course he intends in his article Foreign Policy, was ultimately to follow. However, his personnel choices unable to discern any fundamental differ- are more illuminating. Most of them are ences between Romney and Obama. essentially hardliners from the Bush ad- Since Romney has so far not been able ministration such as John Bolton, former to score any points against Obama in for-

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eign policy, his reticence is understand- allies do not at all feel abandoned by able. Nevertheless, now that he has the the Obama administration; instead, they nomination in the bag, the candidate will are more likely to be irked by Romney’s come under increasing pressure to state his grandiose pronouncements. Still, one views more concretely. Moreover, Romney of Romney’s positions could find a recep- will soon have to make up his mind tive audience in Europe:his commit- whether to take a high-profile trip before ment to maintain defense expenditures the election to strengthen his foreign poli- at current levels for the foreseeable future. cy credentials. A trip of that kind could Quite a few European countries may hear clear away some irritations, since it is so this as an invitation to make even deeper far not clear what precise position Romney cuts in their own defense budgets. But might take,e.g.,toward Afghanistan.Cont- it is not likely that such a move would rary to his campaign rhetoric, Governor really be in the best interests of Governor Romney will quickly realize that America’s Romney. „

Axel Striebeck America’s Pacific Century? Rebalancing U.S. foreign policy in the Asia-Pacific region

In November of 2011 U.S. Secretary of State Hilary Clinton published an article entitled »America’s Pacific Century« in the journal Foreign Policy. Ever since then – and in some cases even earlier – Europeans have been discussing how much importance to attribute to the rebalancing of U.S. foreign policy. What, exactly, will it look like? What are its causes and what are the intentions behind it? What are the consequences likely to be for the Asia-Pacific region and for Europeans?

Axel Striebeck Pacific will occupy a more significant place (*1982) is studying East Asian politics in U.S. foreign policy. Accordingly, Hilary at the Ruhr University in Bochum. Clinton’s first official foreign trip took her to Japan, Indonesia, South Korea, and Chi- na. Members of the administration keep emphasizing the United States’ willingness [email protected] and ability to become the leading power in the Asia-Pacific region, and to maintain that pre-eminence for the long haul. he United States’ pivot toward the Asia- However, besides these declarations TPacific is not a revolutionary idea and symbolic acts, there have also been originating in the Obama administration; some tangible new steps: in 2011 the Uni- rather, it is a long-term adjustment of ex- ted States and Australia concluded a pact isting strategies and capacities in light of that would allow up to 2,500 U.S. Marines the current situation in the region. Presi- to be stationed in Darwin.In addition,be- dent Obama and his foreign policy team ginning in 2012 four U.S. littoral combat have been signaling ever since the begin- ships will be stationed in Singapore, and ning of his term in office that Asia and the the harbor in that city-state will be expan-

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ded to accommodate aircraft carriers.Also to limit Chinese influence on the region’s planned are joint exercises with the navies governments without getting into a direct of several countries in the region, agree- confrontation with China. ments with the Philippines to train their While the above-described strategic special forces, and a reorganization of ex- situation in the Asia-Pacific accounts for isting troop contingents in South Korea America’s policy adjustments, the United and Japan. States’ budget woes set severe limits to the The United States now has a multi- leeway Washington has in making new faceted military presence in the area, if plans for its role in the region. Over the we tally together the U.S. reconnaissance long term, military expenditures must be planes that take off from the Philippines, trimmed so the U.S. can get a handle on its the Marines who were shifted from Japan debt problem. The end of the war in Iraq to Guam, as well as the armed forces sta- and the impending withdrawal from Af- tioned in Japan and South Korea. The goal ghanistan even provide an opportunity for of this military presence is to have suffi- the Pentagon to cut costs as well as ini- cient deterrence potential available at any tiate the long-term redeployment of troops time against any possible adversary, and, whom it had previously planned to send to in case a crisis should arise, to intervene Europe. Experts are now assuming that quickly and effectively. there will be no radical withdrawal of troops from Europe; however, troops stationed abroad will, in the future, be distributed What has caused differently, with some 60 % going to Asia the adjustment? and 40 % to Europe.Only by redistributing available troop resources in this way can The most important reason for the re- the U.S. assure a greater troop presence balancing envisaged by the United States in Europe while simultaneously cutting in Asia is the growing economic, political, expenses. and military strength of the People’s Repub- lic of China. Many countries in the region are skeptical about this new great power. Impact of the adjustments Japan, South Korea, and Taiwan are asking themselves whether, and to what extent, It remains to be seen whether the strategy the Unites States will be prepared to guar- that the Obama administration has selec- antee their security in the future. At the ted will actually produce greater stability same time, there are numerous border in the Asia-Pacific region. On one hand, disputes between China and its neighbors, the beefed-up presence of U.S. troops especially in the South China Sea,that har- might guarantee greater security for Ame- bor considerable potential for escalation. rica’s partners and in that respect help to Against this backdrop an arms race has restrain the arms race among nations in already been set in motion which could the region. On the other hand, fear of U.S. further destabilize the region as a whole. containment may increase even more in However,instability and the risk of military China, which in turn might provoke an hostilities run counter to the U.S. interest accelerated and more aggressive arms in security for the important sea lanes. build-up in the People’s Republic. Hence, the United States has attempted to Still,with an eye to its economic growth maintain its longstanding security guaran- potential, China is mainly interested in the tees in order to put a damper on the arms stability and security of sea lanes in the race.The U.S.government is likewise trying region. For that reason it will prefer not to

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attack the United States directly, but will future they will have to assume more of the instead choose to reap the benefits of responsibility and costs of defense and keeping America engaged as an enforcer stability in neighboring regions. Within of order. Thus, in the foreseeable future NATO there seems to be a clear under- there appears to be little danger of a mili- standing of and unanimity about what tary confrontation. Nevertheless, when one needs to be done. Intensive discussions considers Korea and the territorial dis- about the ways and means to meet this putes in the South China Sea, one can challenge are already being conducted. At certainly appreciate the potential for unex- the same time, Europeans realize that it pected and unintended escalation. With is in their interest for the U.S. to play a that in mind, it seems that the American stabilizing role in the Asia-Pacific, since effort to launch military confidence-build- their own trade is jeopardized by the same ing measures in the region is not only the risks that America faces. right thing to do; it is essential. Having answered some of our original questions about the prospects for stability An opportunity for Europe? in the Asia-Pacific, we may now turn our attention to another issue. Will Obama’s The adjustments being made in U.S. for- strategy lead to more institutionalized, eign policy to the changes and challenges multilateral cooperation, or will bilateral in the Asia-Pacific do not signify a sudden agreements and partnerships continue to abandonment of Europe; instead,they em- set the tone? Critics of multilateral solu- body a robust shift of attention and mili- tions in the United States object that tary presence based on long-term plan- this form of cooperation makes Washing- ning. This rebalancing will serve not only ton too dependent on its partners, need- American interests but also those of Ger- lessly reduces its room for maneuver, and many. Europeans should not interpret gets the United States entangled in con- these adjustments as implying that they flicts that do not touch vital American have become less important. Rather, they interests. should seize the opportunity to advance On a less pessimistic interpretation, their own growing interests in the region. multilateral institutions provide for fuller In the Asia-Pacific they could do their part, engagement of America’s partners. Over mainly through diplomacy, to enable the the long haul that should enable the United adjustments to succeed as well as back up States to redistribute the burden of security their ally by taking upon themselves some costs in the region onto more shoulders, of the burdens the U.S. has borne in other without reducing Washington’s influence regions and on other issues. in the Asia-Pacific. Considering how severe It is still too early to say how success- the budget crisis is in the U.S., this second ful American foreign policy will be in this argument seems for now to be the more region. However, one can cite some of the persuasive,and that is reflected in the rhet- important factors that will influence its oric and initiatives taken by the Obama likelihood of success: a China policy that administration.Building on the previously acknowledges that country’s sensitivities; existing network of bilateral alliances, responsiveness to partners in the region; as small »minilateral frameworks« are now well as continuity and stability in the im- taking shape around concrete issues that plementation of the strategy. Only under will be mutually complementary. For the these conditions will »America’s Pacific European partners of the United States, Century« turn out to be a successful and the rebalancing strategy means that in the peaceful one. „

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A conversation with Sergei Stanishev »There are no half measures here«

NG/FH: What is the Vision of your Party Sergei Stanishev for the European Union? (*1966) was Prime Minister of Bulgaria from 2005 to 2009.He is Chairman of the Bulgarian Socialist Party and President Sergei Stanishev: Our vision is to build of the PES (Party of European Socialists). progressive societies based on universal values and strong democracy. I am talking about values like freedom,equity,solidarity and justice – values that, now more than ever, are being deeply challenged. Market forces are currently concentrating more creating a rhetorical smokescreen of ›eco- and more power into a few rich hands and nomy versus democracy‹. The brutal aus- away from democratic control. Conserva- terity-only measures imposed by the Troika tives and neo-liberals, far from battling in Greece are a good example of uncon- economic excesses, merely toe the line of trolled, unelected power that is affecting this deregulated globalization. This has led people’s lives in a dramatic way. us to the worst economic crisis in modern As I see it, there has been a growing times. resentment by the ordinary citizens, and In short, we can say that the current rightly so – no one wants to pay twice for a political and economic travails have been crisis they didn’t cause. But fortunately, fueled by greed and short-term gain. The Hollande’s victory in France is a game- Party of European Socialists articulates a changer. It not only gives voice at last to new and better way.During the last century, the people but it says in these times of Socialism and Social Democracy achieved crisis: »Europe can be part of the solution the welfare state, universal access to educa- again«. Logically, there is no way that the tion and to health care, and secured funda- EU can provide a solution to the crisis mental rights for all. Now, in the new mil- without a sound compromise that truly lennium, our movement continues to de- engages the citizens in the decision-ma- fend our past achievements while striving king process. for progressive societies and further social This is why the PES is committed to rights. Our goals: strong democracy, true cultivating democratic accountability at freedom, decent work and values-driven European level. For example, in our last growth. That means lasting justice and Council we defined the process that will solidarity between states and generations. lead to a democratically mandated candi- That means a better future for all. date for European Commission President. This transparency, this accountability, is NG/FH: Do you think that a truly Political pivotal if we want to gain the citizen’s trust. Union is feasible in the near future, is it After all, we are talking about the very desirable? essence of democracy.

Stanishev: What we need, what European NG/FH: What is the shape of an Economic citizens demand, is an accountable union. and Social Union your party is aiming at? The problem is that, for the last two years, Conservatives have systematically eroded Stanishev: The Party of European Social- the democratic legitimacy of the EU by ists will always defend an economy that

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fosters social progress and raises living spending at EU and national level, issuing standards, secures homes and creates jobs. Eurobonds tied to investment, implemen- This is not only a fundamental and un- ting a fair European carbon tax and a Euro- shakable principle of ours; it is also our pean tax on financial transactions, as well way out of the crisis. Some people define as unused EU funds. None of these meas- the current crisis with a certain English ures imply cuts in spending, and they are saying: ›feast today, fast tomorrow‹. We all pivotal resources in order to promote know the results of austerity-only meas- growth, jobs and solidarity across the EU. ures in Greece, and further tax increases After all,this is not about escaping from the for the ordinary citizens and spending cuts crisis: it is about Europe emerging stronger on education and health care are con- from it. stantly worsening the situation across Eu- rope. They are just not the right solution NG/FH: Can the European Social Demo- to the crisis. crats act as a unified force in that sense or The PES has insisted for years that the what hinders them to do so? way out of the crisis must be more jobs and more growth, and the fruits of our labour Stanishev: In my opinion, we are already begin to emerge.With Denmark, Belgium, unified in policy. You only have to take a and now France going left, 2012 is indeed look at our common positions on the becoming a year of progress for Europe. Financial Transaction Tax or the European We have to focus on public and private Youth Guarantee. In fact, before officially investment, on financial regulation and launching in May our campaign »Your tools like the Eurobonds and a Financial Future is My Future – A European Youth Transaction Tax. If we continue fighting Guarantee Now!«, we already had the sup- and defending our proposals, I strongly port of our parties in Luxembourg, the believe that the ›Eurostarvation‹ will be United Kingdom and Romania, where they over soon. announced a youth guarantee as part of their policy platform. I think that this is a NG/FH: Which are the necessary and clear triumph of our European Social- possible next steps towards this aim? Democratic family as a whole. Another example is the conference in Stanishev: One of the preconditions to find Tunis that gathered together European the way out of the crisis is »producing« our socialists and progressives from the Arab way out. We need to improve Europe’s world. Since the beginning of the Arab competitiveness by boosting innovation, Spring, we have openly supported all the developing education and strengthening inspiring men and women who peacefully infrastructure – all this while ensuring fight for democracy in countries like Tu- decent working conditions. This means nisia and Egypt. I was in that conference that, by no means, economic freedoms and I must say that I am very proud that we can be prioritised over fundamental social are building a common progressive agenda rights. Creating sustainable jobs and brid- across the Mediterranean region. ging the social divide must be a top priority Lastly, the rise of the far-right in Eu- for the European Union. rope has become a cause of big concern Of course, these steps need not be over the last years. From the totalitarian done at the expense of the long-term sus- measures taken by the governments of tainability of public finances. That is why Hungary and Bulgaria, to the worrying we have defined a wide set of policies to results of the last elections in Greece, it provide more revenue: maximizing public looks like some political groups close to

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the far-right are having a hard time using we will always reject any language of hate, Europe and democracy in the same sen- pessimism and despotism. There are no tence. In the Social Democratic family we half measures here: the unified goal of all are committed to defend our democratic Social Democrats is and will always be a values inside and outside our borders and better future for all. „

Klaus Hänsch The Crooked and the Straight A look at Jürgen Habermas’ essay on the European constitution

o things like this are still going on? Klaus Hänsch SPeople like Jürgen Habermas dare to (*1938) was president of the European Parliament from 1994-1997 and member of look at European unification as the pre- the Presidium of the European Constitutional lude to a world society complete with its Convention in 2002/2003.In 2003/2004 own political constitution. And the Euro- he represented the European Parliament in the conference of governments held to pean Union is supposed to take its proper consider the proposed Treaty to Establish place smoothly in this new world order a Constitution for Europe (TECE). without asserting its own economic and political interests in the process. A world parliament will then impose a democrati- concentrated form – at just the right time. cally legitimated orientation on the global Habermas extracts the brilliant, shim- »powers«: financial markets, the internet, mering essence from a not-especially- climate change, and the distribution of narrow range of thought derived from so- resources. It will impose rules and limits ciology,jurisprudence,and political science. on the latter while »paying attention to the These sources are all »post-classical« in time factor, which is relevant in matters of going beyond traditional constitutional justice.« One does not have to reach the and international law doctrines con- North Star to take one’s bearings from it cerning the legitimate ways in which here on earth. Habermas deserves a vote of sovereign power can be exercised and the thanks for having recalled to mind an old normative foundations laid for democracy and very European utopia. in the European Union. I have picked out I am reminded of the intense debates two especially noteworthy proposals from we held in 2002/2003 on the Presidium of among the many concrete suggestions he the European Constitutional Convention makes: the Union as a transnational demo- when I read what Habermas has to say on cracy and the crisis as a caesura which a variety of topics: the structural defects of makes a new treaty assigning greater powers monetary union without political union; to the Union both possible and necessary. ways to establish some democratic balance to offset the institutions and procedures of Brussels; the need to create economic The E.U. and democracy governance,etc.None ofthis is new,but neither is it passé.For practical politics it is The European Union has no future with- an encouraging essay, because it repeats out democracy. But one could just as well themes – albeit in updated and highly turn that statement on its head. Demo-

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cracy in Europe has no future without the Habermas presents a wealth of chal- European Union. Faced with new global lenging analytical arguments to show that challenges, nation-states are trying to make Union democracy still lags far behind up for the substantial loss of their prob- what it could and should have achieved: lem-solving capabilities by shifting econo- the division of sovereignty between citi- mically and socially important decisions zens and the body politic rather than bet- onto international organizations. Among ween member states and the European the latter, the E.U. is the only one that: Union; a new role for nation-states as the offers its citizens the chance to participate guarantors of liberty; the »correct« ratio in decision-making and puts checks on between intergovernmental elements and power via a directly elected parliament; those to be »communalized,«( i.e., those calibrates the influence of its member in which certain policymaking areas are states in accordance with their respective transferred from the member states to the populations, and involves national parlia- European community). ments in the making of Union policy. So The clarity of ideas and principles here far it is the world’s only experiment in a can at times be so dazzling that it blinds us form of democracy that transcends nation- to certain circumstances. The history of states. democracy has always featured distinct Habermas’ essay finds the Union on combinations of principles and proce- course toward an »arrangement for the dures that were long held to be incompat- exercise of post-democratic/bureaucratic ible: democracy and monarchy, represen- authority.« Although it was actually sup- tative and direct democracy, freedom and posed to represent an extension of democ- equality,the division and fusion of powers, racy as practiced within nation-states, it popular sovereignty and protection of has in fact featured »increasing inter- minorities,just to name a few.It has always governmentalism and declining levels of been the refractions of light, the nuances democratic legitimation.« The first charge and shadings, which have lent color and is correct, but the second one isn’t entirely depth to the image of nation-state democ- so. The institutions in Brussels and Stras- racy in Europe.It cannot be otherwise with bourg are not the only foci of Union de- the image of transnational democracy. mocracy. The member states also play If the Union is going to take over new their part with elections and plebiscites. areas of responsibility, then, so Habermas, The fiscal pact strengthens the inter- solidarity among its citizens must also governmental elements of the Union. That increase. It is supposed to grow, of course, is something we should regret, accept due to »communications that span many temporarily, and change later. I prefer to countries.« The »cunning of economic rea- allow governments that have been legit- son« is supposed to bring about a mutual imized democratically to decide about the opening of national public spheres »for Union’s welfare and its woes rather than one another.« Unfortunately, dull, un- leave it to a hundred or so insolent, face- glamorous reality shows just how the Ger- less, and un-legitimated financial wheeler- man and the Greek public spheres open dealers who play monopoly with the fates up to each other. of entire nations. When we endeavor to save Union democracy from national go- vernments, we should not be too over- Time to roll up our sleeves! zealous lest we hand it over to the new »world powers« such as the financial mar- Habermas calls for a more down-to-earth kets, climate change, etc. approach in the public discourse about

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European policy. In that case the crucial the present crisis is a turning-point that issues would then be less about neo- Habermas wants to use to transfer more liberalism or the parceling-out of areas of policy areas to Brussels and to garner sup- responsibility. We would have to raise the port for a new treaty. But all that belongs more basic question – at last – of whether to the finer points of tomorrow’s nego- to stay in the Union or leave it. The out- tiations.Nobody should imagine that Euro- come could spell the end of the entire peans are pining away waiting for Europe European project and, along with it, the to launch a new treaty debate. demise of transnational democracy. Might Up until now all of the crises that have it not be the case after all that the elites accompanied European unification have whom Habermas disdains will have to been handled by shifting the problems rescue democracy from the people ... for and their solutions to the institutions of the people? Yes, sleeves should be rolled Brussels. Citizens did not need to be both- up, but only to complete the appropriate ered much. For the first time a crisis de- outfit, not as a substitute for steadfastness mands effort and sacrifice from the citi- of purpose. zens themselves. If they are ready for Habermas refers to his own position both,they will certify Europe’s future more as a »constructivist viewpoint«; from that fully than any discourse about treaty angle the post-crisis Union is basically the constructions. Perhaps it would not be same old one: it would continue to use incompatible with reason, enlightenment, treaty constructions to codify its regula- and citizen sovereignty if »more Europe« tions in a democratic manner. We Ger- were to happen before it got construc- mans love straightforward ideas like this. ted. In that regard Habermas really is one of us. Jürgen Habermas: On the Constitution But Europe is crooked wood, and we are of Europe: an Essay.Suhrkamp,Berlin 2011, only a part of the whole.No doubt about it: 140 pages. 14.00 Euros. „

Erhard Eppler Talking about Taxes is no longer Taboo

very budget consists of both revenues Erhard Eppler Eand expenditures. So why then have (*1926) former Federal Minister for Economic Cooperation; from 1970 to 1991 he was we put up with the European Union’s a member of the Social Democratic Party’s decades-long practice of being supremely Federal Steering Committee,and from interested in budgets, but saying no- 1973 to 1992 he chaired the SPD’s Committee thing – absolutely nothing at all – about on Fundamental Values. taxes?

Within the EU even today a single picture-alliance/dpa country, however small it may be, can pre- vent any decision from being made about has not succeeded in ending the scramble, taxes. For that reason all efforts to harmo- even in its own backyard of Europe, to see nize taxes in the EU have been stopped in who can set the lowest business tax rates. their tracks before they could even get Indeed, this has never even been at- going, even those that intended merely to tempted. Market radicals actually wanted establish upper and lower limits. The EU to maintain this competition, since – ac-

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cording to one of their dogmas – the eco- fruition. The lower taxes are, the more the nomy will grow faster the lower business economy will grow. Hence, we can only cut taxes are. taxes,not raise them.And if one cuts taxes, Even when Ireland was forced to ask then GDP will grow at such a rapid clip for help from the European bailout fund, it that the state will end up with more money was impossible to increase the ridiculously in its treasury. Of course, this has never low business taxes there. Solidarity is all been true – not even close. In spite of that well and good, but it seems to have been there has been and still is one party in more important to make sure that this small Germany that demands massive tax cuts country would continue to have the right during every expansionary phase of the to lure away investments from those who economy. If the expansionary phase is have helped it. lagging, we have to cut taxes in order to In order for a country to avoid in- make it boom. If it is going well, the state curring new debts that exceed 3 % of its will have enough cash to reduce taxes. GDP,it will just have to »save,« i.e., reduce And if ever a government not run by this its expenditures and therefore also the particular party did in fact cut taxes, it did scope of its responsibilities.To raise taxes – not reduce them enough. unless it is the value added tax – is now For market radicals every euro that thought to be old-fashioned and counter- somehow mistakenly ends up in the public productive. True, Europe does not have a coffers is »dead,« because it has been with- Grover Norquist, who has cajoled mainly drawn from circulation. But market radi- Republican Representatives and Senators cals simply suppress the evidence that the in the U.S.to sign a pledge never to vote for very same euro will soon be spent by a a tax increase. Norquist even keeps a list in public employee or perhaps paid out to an his briefcase of those few recalcitrant law- electrician who is equipping a school with makers who have not yet taken the oath. new wiring. In short, what is ignored here But up until today the rule has been: any is the fact that the state’s finances are part party that wants to raise taxes will be of the macro-economy. For market radi- branded immediately as the »party of tax cals the »state« is an insatiable Moloch that increases.« Even one of our major parties takes away what honest citizens have wor- accused the other of exactly that, even ked so hard to acquire. If a minister of though both of them certainly knew that finance should be so bold as to suggest raising taxes was really the responsible that parliament enact a tax increase, we thing to do, much more so than just to will hear and read everywhere that he keep on »racking up debts.« Even the »Mer- is reaching his hand into the taxpayers’ kozys« fiscal pact does not include any pockets. That is of course something that binding commitments on taxes. As far in ordinary circumstances only pick- as budgets are concerned, national par- pockets do. The verbal association bet- liaments are supposed to cede at least part ween the two is exactly what was intended of their budget-making authority to the by those who circulated it. In fact, the Union, but the Union is in no position to slogan »Let’s keep more net pay from our exert any influence on taxes, even assu- gross pay« is supposed to divert the atten- ming that Merkel, Sarkozy, and Barroso tion of those who have only their labor ever really wanted to do so. to sell from fair wages to the supposedly Historians looking back on all this will high taxes that the greedy state is squeezing not fail to recognize that such bizarre out of them. And so for many people tax illogic had a lot to do with the epoch of avoidance or tax evasion seem to be market-radicalism in which it came to reasonable responses.

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The steering function bute to social equalization. Indeed, it may of taxes even have been the most effective means to accomplish that goal. But, according to Up until the seventies there was a political market radicals, taxes should not steer us consensus that, as a matter of fact, taxes in the direction of social justice,because in could, must, and should be used to steer that case they would be falsifying market the entire economy. That was one of the outcomes. That is the reason why they few opportunities one had in a market preach the »flat tax,« i.e.,one single tax rate economy, to use the means furnished by for everyone, regardless of whether their that same market economy to achieve incomes are just a few euros above the what was deemed politically necessary or basic exempt amount, or whether they are desirable. However, market radicals do not in the eight-figure range. want to steer, since they imagine that the Of all places it was in the countries market is always wiser than politics. where communism had imploded that But in fact taxes always steer whether governments let the Chicago boys talk we like it or not. The only question is: what them into adopting the flat tax. Of course are they steering toward? This is not al- that was one way of steering – in favor of ways as obvious as it is in the case of to- the rich. But it was always accompanied bacco taxes, which physicians perennially by assurances that no one wanted to steer insist should be raised. Eco-taxes are or should try to, and that a tax of this intended to put a tax on things that are kind would allegedly achieve the goal of ecologically harmful, thus making other equality in any case. things relatively cheaper that are un- In Germany too, one goal of the mar- problematic or even valuable from an eco- ket radicals has been to abolish the pro- logical standpoint. Ferdinand LaSalle was gressive income tax.It was in fact the right- quite right when he argued that direct wing liberal Prussian finance minister, taxes, especially on the well-to-do, were Johannes von Miquel,who introduced it in more socially just than indirect consump- Germany during the last decade of the tion taxes, which had to be shelled out by nineteenth century (the German Empire those who were less well-off anyhow. That still lived off of tariffs and indirect taxes). is still true today, by the way, even though In the 20th century the progressive income the proportion of a worker’s total income tax was enacted almost everywhere in paid for life’s absolute necessities such as Europe. In the Federal Republic of Ger- food and drink has noticeably diminished many it was considered self-evident. The compared to other spending. Of course we only thing that needed to be discussed can promote – or neglect – greater social was how steep the progression should be, equality by adjusting income tax rates. especially since the computer made such And in all this it really does not matter calculations easier.Those who earned more what the government claims to be accom- should also be subject to a higher tax rate. plishing with its tax rates. Every tax rate While market radicals in the United and every tax has a steering function. In States were openly attacking progressive this respect the market-radical claim that taxes, in Germany their abolition has been we should not use taxes to steer is not only sold as a great simplification, and this at a reflection of their special interests, it just the time when the gap between in- is also false, or more precisely,it is dis- comes has been increasing. Now, the ave- honest. rage board member of a big company may Of course the progressive income tax earn 200 times as much as a worker, rather was intended from the very start to contri- than 20 times as much, the previous norm.

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The idea was to move ahead in two stages. to ask itself prior to every decision what First, progression was to be replaced by a neighboring countries or even far-away tax with three – and later five – brackets. tax havens might think of their plans. Then an epiphanous moment would arrive When a finance minister today talks about when it became obvious that one bracket »competitive business taxes,« s/he means would be simpler still. The attempt failed those that, in comparison to other coun- in 2005, when too many voters smelled a tries’ tax levels, are more likely to attract rat. Since then only the FDP has used this investment than to discourage it. Globe- sort of tax policy to keep its clientele in line spanning corporations can take their time – and has even failed in that. and figure out whether they would realize So the progressive tax is here to stay. higher profits by investing in Brazil, Ma- Today, the top tax bracket is too low, but it laysia, South Africa, or Germany. Business takes effect too soon, i.e., at too low an taxes will only constitute one item among income level. It would make sense, there- many that enter into their calculations, fore,to leave the top tax bracket where it is, albeit not a trivial one. at 42 %, while perhaps raising the basic A country offering ultra-modern infra- exemption or allowance (the amount below structure, highly trained personnel, high the threshold at which taxation begins). levels of labor discipline, and a functional One could then allow the curve to contin- administration can more easily afford ue upward toward a notably higher top tax to impose higher business taxes than a bracket for incomes in the millions. country lacking in all these assets. That is If what we are trying to do is pay down evident,for example,in Scandinavia.Never- debt without neglecting important state theless, no parliament today can be truly responsibilities and choking off economic sovereign,i.e.,make its decisions exclusively expansion through rigorous »saving,« then with an eye to justice within the nation- it makes sense also to consider a tax on state. financial transactions. Naturally, it would It is therefore all the more important be ideal if the United States and Great Bri- for the European Union to agree on a tain went along with this proposal. But common taxation policy, and not just for even if one group of countries should forge the Eurozone. During a long transitional ahead,their decision would not fail to affect period, it would be sufficient to establish public opinion in the rest. upper and lower limits for a range of levies, Because taxes always steer, they always including the value-added tax, business become questions of power as well. That is and income taxes, wealth taxes, and espe- certainly true of the financial transaction cially the capital gains tax. tax. We should not imagine that a country That could put an end to the ruinous dominated by market fundamentalists competition among EU-states which has would ever enact such a tax. It is not likely contributed more to over-indebtedness that countries attempting to at least put a than have excessively generous social po- damper on speculation and hoping to clean licies. Doing so would also pose a thorny up their balance sheets by introducing this dilemma for globe-spanning capital. tax would, for that reason alone, become Can investors really afford passing less attractive to global capital. up the opportunity to make profits in a When an SPD party caucus back in huge market with great purchasing power, 1970 set up a tax reform commission to just because they don’t like its taxes? work out a comprehensive scheme for the Still, we can only maintain the primacy of Federal Republic (which it did in fact ac- politics over economics at the European complish), the commission did not have level.

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Taxes enhance everyone’s the care-givers and teachers whom we could quality of life never afford to hire on our own. And we are also paying for a form of insurance, the Many of us want to achieve certain public security that, if everything fell apart in our goals such as alleviating the financial crisis private lives, this state would not let us of local governments, creating a society starve.« that rewards everyone’s best efforts but We could also ask our fellow citizens to does not cold-heartedly worship success, consider whether the things we cannot buy treating solidarity as something more than from our own personal resources alone the sentimental cant of do-gooders, and might not sometimes be more important maintaining Germany as the lauded »repub- and necessary than what we load into our lic of education.« In order to do all that we shopping carts at the supermarket. will have to have a tax rate that is about two 34 years have passed since the Ame- percentage points higher than the present rican, Fred Hirsch, pointed out back in one. 1978 that there are social limits to private All this must be justified and can be affluence. He argued that few people in tackled head on by deliberately opposing suburbia can enjoy both the advantages of the demands issued over the last few de- city and of country living. Millions of cades, more or less seriously, by interest people cannot. So when suburbs expand groups claiming to represent the taxpayers. farther and farther out, commuting via Taxpayers are also the parents of children road into the city center becomes a longer who sometimes have to sit in classrooms and more arduous task. Forests and mead- where plaster rains down on their heads, ows are ever more remote. Hirsch reached or of university students who are happy if the plausible conclusion that, »if everyone they can squeeze into the lecture hall and stands on tiptoes, no one sees better.« One find a place to sit on the floor. And tax- might add that, »if everyone chips in to payers are also the drivers of cars driving build a stadium,all will see better.« We will on streets that are getting bumpier every never all be able to afford our own private year, especially in municipalities. swimming pools; besides, we don’t have We must say to these taxpayers, who enough water or space for that. But to- are of course also citizens to whom the gether, acting as a community, we can common good means something: »taxes build and maintain a nice swimming pool. are not a form of bullying dreamed up by The things we cannot buy on the market bureaucrats. With our taxes we purchase are not those with less value, but rather together what we could never buy indi- those with more. Therefore, taxes never vidually, by relying only on our own funds. become superfluous in a relatively wealthy These include well-maintained streets and society. They become more important for sidewalks, a justice system that prevents a our quality of life. „ war of all against all by adjudicating laws that apply impartially to every person, police who are well trained and usually very polite, but who do enforce the law when necessary. With our taxes we also help build the schools – sometimes even attractive, bright, homey ones – that our children and grandchildren attend, as well as the kindergartens and day-care centers where our kids are well cared for. We pay

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Jennifer Gronau/Henning Schmidtke Democracy in the Age of Global Governance

Today, decision-makers at the transnational level frequently act independently, without securing the support of member states through a vote. They do this in order to enable their global organizations to act more effectively, and that often means intervening in policy areas that had previously been handled at the level of the nation-state. Indeed they now sometimes act directly upon individual persons without having to take a detour through the nation-state. Is this trend likely to jeopardize democracy?

Jennifer Gronau decisions with direct consequences for all is a political scientist in Bremen currently citizens are now partly made by actors doing her PhD dissertation on the legitimation policies of international institutions,using whose democratic legitimacy is shaky at the examples of the G8 and G20. best. This situation is increasingly being challenged: mass protests, reform debates, and critical media reports bear witness to [email protected] an intensive contestation of politics going on outside of the state. Citizens appear to have become aware that they are losing Henning Schmidtke democratic control of politics. Can de- is a political scientist in Bremen currently mocracy survive over the long run if this working on his PhD dissertation about public perceptions of international tax policy. state of affairs continues? Let us first take a look at the challenges facing democracy in the age of global governance. We shall then examine some current approaches to [email protected] democratization by reference to examples from the EU. Ideally, a global democracy should uring the previous century the state both advance the common good of all ci- Ddominated politics; by contrast, today tizens and enable them to participate in we will have to come to terms with an decision-making processes. In line with entirely new set of circumstances. The po- Abraham Lincoln’s democratic triad, glo- litical system of the 21st century is a multi- bal governance should be of the people, by level system characterized by the plurality the people, and for the people. of global and regional organizations (e.g., The answer to the question as to the U.N., the European Union), bilateral whether this can be achieved turns out cooperation, and the prominence of pri- to have two components.On one hand,the vate or joint state and private decision- new power-wielders are indeed doing their making. Although this network may be of part to overcome problems that exceed the some help in solving global problems such reach of individual states. Even if we as climate change or the current crisis of assumed that the United States-still the the financial system, it does call into ques- great power of our time – had the will to do tion the quality of democracy. To be effec- something about climate change, it would tive, many policymakers of the new power not be able to accomplish much on its elite act independently of their member own. Political challenges do not stop at states.As a result of this tendency, political territorial boundaries, and democratic

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self-determination therefore requires the of the Parliament every five years in free cooperation of many different actors. On European elections featuring the secret the other hand, the chain of democratic ballot. Since then the EU Parliament has legitimation by means of which political begun to assume many functions that na- power is transferred from the citizen body tional parliaments also perform. In addition to the political elite has grown rather long to this link between populace and the EU, under the new order of things. And in another has emerged. Starting in early 2012 places it has become quite fragile.The two- Europe-wide citizens’initiatives will be per- stage mechanism in which citizens elect mitted. By availing themselves of this tool, national governments which in turn med- citizens will be able to direct the European ate between them and international poli- Commission to propose a certain legal act. tics is no longer working. The trouble is This form of participation seems more sui- that national parliaments are no longer in ted to projects of regional integration than any position to get a clear picture of what to other contexts.Applied at the global level is happening in this complex multilevel it would produce parliaments with unwieldy system. On the whole, the growing de- numbers of deputies, and it would also be mands for political problem-solving capa- difficult to manage citizens’ initiatives. bility on one side coupled with democratic Another way to encourage direct control on the other have created tensions participation in the EU is to involve the that lead directly into the crucial, but un- organizations of civil society. However, in welcome question: how do we arrange this case it is far less easy to formalize the matters so that we get effective actions at frequency and type of participation than the level of international politics con- it is when one is simply electing a parlia- sistent with the principles of democracy? ment. It is certainly true that the European To strengthen the chain of legitimation Commission has come up with minimal and insert new links into it, the crucial standards for cooperation with actors from move will be to give the appropriate design civil society. Still, most of the participation to international organizations such as the happens on an informal basis. But in spite European Union (EU). Since the 70’s the of that fact,this avenue of democratization European Commission has been devoting has been followed by many other actors considerable attention to the issue of how and could succeed at the global level. For the process of European unification could that to happen,however,much will depend be given more robust democratic legiti- on how the participation of civil society is mation. To be sure, up until now this pro- implemented in day-to-day practice. cess has not succeeded all along the line, It is going to take a well-informed and nor can we consider it concluded. Never- critical public for all these mechanisms to theless, the efforts of the EU can serve as take full effect. Only when citizens are guideposts for other organizations. Two informed about global and regional prob- aspects of the process deserve special men- lems will they be able to develop well- tion. First, institutional rules for demo- considered opinions and take part in de- cratic participation have to be worked out. mocratic processes. Europe has already Second,there must be a transparent,public made some strides in this area, too. Votes debate on international politics that does in the European Parliament are public, and not avoid controversial topics. all important committees of it are held The most obvious channel for demo- accountable for their actions and must cratic participation in the EU is through the provide full reporting. Furthermore, the European Parliament. Ever since 1979, the EU offers quite a bit of information about citizens of the EU have voted for members its activities and has gotten involved in the

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process of political education. European cipation, as well as public debates – are all topics are being mentioned more fre- still linked to the framework of the nation- quently in the media now. And ever since state.In light of the changes taking place in the financial crisis political parties have the everyday lives and environments of not been able to avoid taking clear posi- citizens all over the world, it is not clear tions on the EU. Although much remains that this linkage is going to be completely to be done in this area (e.g., in regard to sustainable. It is no longer possible to public votes on the Council), these ap- claim that political decisions concern only proaches may be transferable to the global those who belong in a specific territory; level. Transparency and public debates on that is only one of several criteria for controversial issues are possible even in determining who is affected by such deci- global organizations given sufficient po- sions. Therefore, the discussion of global litical will. they would signify a big step in politics can only succeed if we disentangle the right direction. democracy from the nation-state and re- These approaches could also contrib- main attentive to subnational and global ute to improving the democratic quality forms of organization. Democracy in the of global governance. Yet they conceal a twenty-first century requires something problem that of course cannot be resolved more than just state-organized forms of in this essay, but which should never- participation. It also needs direct rights of theless be given its due. All these kinds of co-determination that operate independ- participation, regardless of the form they ently of territorial borders and makes it take – the establishment of supranational possible for mobile people to participate parliaments, other types of direct parti- wherever they happen to be. „

A conversation with Stephan Leibfried Statehood Today: a Dynamic, Multilevel Network

Stephan Leibfried Stephan Leibfried: That depends on how (*1944) directs a 2003-2014 Bremen you look at it. In disciplines that directly Collaborative Research Center on Transformations of the State (Sonder- involve the state, such as jurisprudence, forschungsbereich TranState) and co-directs there has been a shift in the way the con- a research center at Bremen University, cept of the state is defined in Continental the Centre for Social Policy Research (CeS). Europe. The state’s power to influence so- cial conditions has remained pretty much constant: as before, the typical OECD state still absorbs about 40 % of the gross NG/FH: A great many crucial political de- domestic product and invests around half bates continue to revolve around the con- of that in the social welfare state. But the cept and role of the state. Considering the way in which the state operates, whether results of the research you have been doing on its own, as part of the European flotilla, for so many years, do you think we can or in global markets, differs quite a bit still use the notion of the state unselfcon- from the way it used to behave in the 50’s, sciously, when issues of the social welfare 60’s and 70’s. state, economic steering, democratization The scholarly debate reflects this in the and political sovereignty are at stake? phrase, »the state as...«; the state is defined

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as »the institution that offers guarantees« have been transferred to the global or Euro- or as »the manager of political power« and pean level. Many others, especially those so on. Its power of decision-making has involving social welfare, have reverted to been intensely supra-nationalized or inter- society itself. What are the implications of nationalized, whereas its power to execute these changes for the way state functions or implement has been delegated down- are managed and carried out, especially ward, in some instances to private parties. when it comes to such crucial areas as wel- Yet it continues to hold onto ultimate re- fare and economic development? sponsibility; no one wants to deprive it of that distinction. From the perspective of Leibfried: In our analyses we first describe the scholarly disciplines, the frame of re- the emergence of the cohesive nation- ference has again become more statist and state, which dominated the post-WW II more similar since 2008, because now so scene for two or three decades. It is impor- much does depend on ultimate responsib- tant to recognize that the »rope of state« lity, and because the power of decision- does not fray symmetrically.Instead,many making has been de facto re-nationalized of the »functional strands« such as law here and there, as the Euro crisis shows. have become badly frayed, whereas others, for example welfare, have not. Law, in the NG/FH: Does it make sense to continue form of global trade, European or inter- having our traditional debates using the national law, transcends the nation-state notion of the »state« with the usual attrib- and creates a framework for it, although of utes attached to it, or won’t that take us in course nation-states collectively still enact quite the wrong direction? the law. However, in respect to democratic legitimation the nation-state still pretty Leibfried: In terms of ultimate respon- much retains its old, compact form. It con- sibility, the social scientific view comes tinues to be a braided rope. It is mainly closer to your second alternative. How- still the nation-state, and not trans-na- ever, in ordinary language the traditional tional units, that is asked to provide the concept continues to influence the way legitimation for the political arrangements these matters are viewed, i.e., the notion that have been made. that the state bears ultimate responsiblity for decision-making and implementation. NG/FH: In short, the state is getting frayed, Voting behavior confirms that again and and some of its functions, such as the again.Voters have so far been unwilling to creation of a legal framework, are being relieve the state of this responsibility. handled at an international level and other ones at the subnational level, e.g., NG/FH: Since we are talking about the the marketization of social security. So functions of the state, we should note that we need to ask: when areas of account- your research group often pictures them in ability are so diffuse, can there still be de- the image of a braided rope. The various mocratic legitimation and control by the functional strands – law, legitimation, wel- citizens? fare,resources,and taxes – are intertwined. For some time now and as a result of Leibfried: That pattern has worked pretty various influences, the once densely inter- well in Europe for decades. Many of the woven, compact unity of state functions items that have been frayed away, to con- has been dissolved, and responsibility has tinue the metaphor, are still hanging by been devolved to other levels. A few func- a rubber band and can be retrieved by tions once exercised by the nation-state the nation-state in a crisis. Even the Euro-

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pean crisis confirms this. In light of the investment just because of the other ad- current theories of integration, one would vantages to be gained by standardization. have expected that the crisis would have been addressed and ultimately contained NG/FH: So the earlier elements of state- principally by European institutions. But, hood such as the ability to impose or im- besides the European Central Bank, of plement rules are not lost; they are simply course, it has been primarily the re- being parceled out to different levels – invigorated nation-states such as France, regional, global, or transnational. What Germany, and other northern European does that imply for the idea of democratic countries that have taken the lead in crisis control over the state’s powers? management. Conversely, the question is now being asked: do we need to strengthen Leibfried: To be sure, the state’s spheres of Europe again – i.e., have greater »political authority are still almost all intact, some of union« – so we can handle such problems them actually in a variety of forms. There better? The point is, functional strands are only a few areas in which authority has that have frayed badly can be restored and been completely shifted. In most cases in part recaptured by the nation-state. partial authority or framework-setting authority is reorganized. It is always open NG/FH: So the state is being de-concen- to interpretation to say how much of a trated and disentwined. What does that given sphere of authority has been dele- mean in terms of its key functions such as gated away or what happens when such a the ability to implement policy, authority delegation does not work out well (as in to issue rules, power to intervene in social the case of the European crisis). What a and economic processes, and the capacity state is or is not authorized to do is less to maintain its primacy in setting policy? straightforward in such cases than in clas- Is that primacy being vitiated or poten- sical federalism. The only thing is, there is tially even abrogated, or is it in some sense no functional equivalent for nation-state being reinforced? democracy at the global or European level. There, we will have to reinvent or invent it Leibfried: In Germany and the Euro-zone ex post facto. There have been a few initi- the primacy of the political is being weak- atives in that direction: the European ened in certain spheres. Certain mecha- Parliament, the European Commission’s nisms for regulating social conflicts, ad- decision to systematically consult NGOs justing exchange rates and the like are no and seek outside expertise. But, unlike in longer available to nation-states. From the the 19th century, there is no uniform, fully- point of view of sovereignty, nation-states elaborated notion of what constitutes de- have been weakened, since authority in mocracy – we lack a precision instrument. some fields has been transferred to the level of joint EU regulation. If that were NG/FH: Therefore, democracy has to be not the case, some states would not have reinvented because so much of the state’s the opportunity to extend their governing authority has been disentwined or de-con- powers so strongly into other states’ do- centrated. In what direction should we go main. You win some and you lose some. to accomplish this? States have suffered total losses only in fields such as currency policy, which have Leibfried: The challenge here is twofold. been completely outsourced. But in light Transnational state-subsystems have to of the political calculations that prompted be reconnected to national democracies, it, that decision was a sensible long-term while democracy must first be introduced

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into freestanding transnational systems. by their religious traditions. Likewise, most This is especially true of the world’s of them share common welfare-state tradi- regions for several reasons. First, it is to be tions: on average each EU country invests expected that things can be done more nearly a quarter of its GDP in the welfare easily there. Also, especially in the EU, re- state. Consequently, it is easier within the gional institutional fulcrums have al- EU to transfer what they have in common ready been created that do not yet exist to a new,higher level of state functions and globally. administer it there. Without these shared traditions it is considerably more difficult NG/FH: It is surely still true that the power on the global level to internationalize legal of the state offers the only guarantee for standards. basic rights. Now that statehood has been de-concentrated and dispersed, it is get- NG/FH: do you think, then, that that the ting increasingly difficult to talk about concept of the state continues to be a the »sovereign state.« As a result the no- meaningful category for analysis? tion of »governance« is playing a more prominent role. Given the »transforma- Leibfried: As long as we – along with the tion of the state,« can we still distinguish majority of the electorate – continue to clearly between the state and state action abide by the principle of public respon- on one hand, and governance on the other, sibility for the common good and ascribe i.e., the more general processes that regu- it to a particular institution, then yes. late society? NG/FH: What do the transformations of Leibfried: In our special research field we statehood imply for the role of democracy have investigated »fraying« on four levels: in the EU? the rule of law in the state; democracy; welfare, and resources. We wanted to find Leibfried: We did not have much trouble out whether internationalization preserves Europeanizing the rule of law. Everything the substance of these institutions; that is, involving mobility, as of capital and labor, whether the law-governed state at the EU has been arranged in far-reaching ways. A level really constitutes a functional equi- fiscal and economic union would necessi- valent for the legal protections formerly tate a social union. Otherwise, since the provided by the nation-state, and whether former would be a purely technocratic it guarantees the same things. In most bailout for one currency, it would lack cases it can be observed that the forms of legitimacy and be untenable. In the final the rule of law are preserved more emphat- analysis what is at stake here is human ically and across a broader range now, security, not security for banks. What we especially where they had previously not are having trouble doing is Europeanizing been so broadly ensured. The reason for legitimation and democracy. For an EU this is that when some countries had al- democracy a European public sphere is ready adopted clear standards on a given indispensable, but it is still in its infancy. matter, their standards are often the ones A European welfare state in the traditio- to be internationalized. From a com- nal sense is still not in place, but we do parative point of view, we in the EU have have an EU state that insists on equal treat- the easiest path to internationalization, ment. since the great majority of EU states can refer to a common tradition of Roman law NG/FH: The American political scientist and a notion of the legal subject supported Vivien A. Schmidt says that the EU is »a

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regional state.« This claim has provoked or about their distribution, we never see lively debate. The antithesis between EU who is financing whom: roundabout fi- statehood and national statehood does nancing leads to roundabout politics. If we seem to be blurring. Will an entirely new find the strength to furnish Europe with its network of state functions finally emerge own resource base and to formulate clear at the European and national levels? principles of solidarity according to region and class – and stay the course with all of Leibfried: Let’s take the United States for that – then Europe can develop solidarity contrast, a country with the distinct ad- among its citizens that transcends nation- vantage of being more linguistically and alities. It will not work if it is just going to culturally homogeneous. To be sure, the rely on deceptive packaging. national bureaucratic elites of Europe are closely affiliated with one another and NG/FH: Is there any particular message constitute the dawning of a kind of Euro- that emerges from the results of your pean political class. But it lacks deep roots research? in the whole internal environment of Eu- rope. The great linguistic and cultural Leibfried: The Treaty of Lisbon conveys differences among its members and lack of the impression to many people that we are pressure from below are two reasons for going to cooperate in a few »reserved this. Today it is no longer so urgently ne- areas« such as agricultural policy, but that cessary to cooperate as it was in the imme- in other matters nation-states will conti- diate postwar years or during the Cold nue to be sovereign.The reality looks quite War. Looked at historically, Europe was different: de facto we are much more founded as a means to counter the Soviet deeply interdependent than ideological Empire. But now that it no longer has an considerations would allow us to admit. It adversary, it is beginning to encounter would be a much more obvious step to problems with its structural integrity. At move toward greater integration of eco- this time the factors mobilizing the EU are nomic and social policy, which is now more economic and technocratic than pending due to the crisis of the monetary social and moral.Europe can only be a true union, than to dissolve the ties we already regional state when it stands on both legs. have, a vastly more troublesome and ex- pensive operation. The countries presently NG/FH: Is an entity that intertwines crucial in crisis in the south of the EU put the state functions in such a diffuse manner spotlight on four functional characteristics on the national and international levels of the state which, more than any other, still capable of generating solidarity among suddenly seem significant for Europe. its citizens? These include: sensible budget manage- ment by nation-states, which would tole- Leibfried: Solidarity is also a matter of rate indebtedness only to a limited extent; having an opposite number with well-de- a rational, Europe-based economic and fined characteristics. Europe is a bit re- investment policy; a social security policy miniscent of the unstable German Empire to be re-insured by Europe; and a generally of 1871 and its financial system. The indi- high level of capabilities on the part of vidual German states diverted funds to the national state-apparatuses. To help the Federation according to some code or countries in crisis get back on their feet, other, but the latter had no taxing power of the EU needs to pursue a broad, multi- its own. Regardless of whether we are tal- level therapy. A hit-or-miss policy will no king about the mobilization of resources longer be enough. „

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Thomas Meyer State, Market, and Civil Society

The state, markets, and civil society form a kind of ideological troika, but one whose members are often irreconcilably hostile to one another. Although all three of them have their own justifications and strong points, none can be truly satis- factory all by itself. Social progress entails an ever-shifting, ever-renewed balance among all three of them.

The heritage of ideal types Thomas Meyer (*1943) is Professor emeritus of Political Science at the University of Dortmund For quite some time, the state, markets, and editor-in-chief of the journal Neue Gesell- and civil society offered ideal models for schaft/Frankfurter Hefte. His most recent organizing and steering society. Each of books,published by VS Press,include: Social Democracy: an Introduction and them offered enticing prospects, but they What is Fundamentalism? were always at loggerheads with one an- other.And so they have remained for many people in the sciences, journalism, and politics, in spite of the sobering historical other. That was all the more likely to hap- experiences we have assembled about each pen when the dominant social and eco- of them. Classical liberalism regarded the nomic interests behind these ideal models market as the ideal foundation for a free emerged into the clear light of history. society,one which could therefore lay claim What became apparent to all was the to nearly unlimited supremacy over the dominance of capitalist markets and the other two. By contrast, traditional social powerlessness of even democratically or- democracy considered the democratized ganized states to oppose them in the course state as the sole guarantor of the common of capitalist development. good.Hence,as compared to the economy, The hallmark of libertarian theories the state counted as the higher-ranking of the state – and of their core element, institution, since it could set standards for neo-liberalism – has been their complete the latter,create an orderly framework,and unwillingness to learn from experience, exert control over economic processes and especially the enormous weight of evi- outcomes. Although they have been weak dence that self-regulating markets are in practice, cooperative organizations and prone to crises. Unimpressed by even the syndicalist movements have been ever- gravest of crises and sustained by powerful present in theory and people’s hopes over economic interests, libertarian theory still the past two centuries or so.Understood as sees the market as the supreme organi- the antipode of both the state and the mar- zational form of liberty. And, as such, it is ket,a horizontally cooperating civil society supposedly entitled to claim the same sort of equals could claim to have the final say of absolute pre-eminence in the economy about what should happen in economic as democracy does in the state. From life. Friedrich von Hayek to Robert Nozick,not The concrete interests which find ex- to mention the journalistic and academic pression in this ideological troika have at legions of their acolytes, the belief has all times been concealed by fierce aca- persisted that the market is alone able demic and ideological debates, frequently to reconcile apparently opposed aims. It inextricably intermingled with one an- supposedly guarantees the harmony among

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three elements: the unrestricted economic the will to believe in it flows from hard- exercise of citizens’individual liberties, boiled interests that are immune to both.It the greatest possible increase in prosperity has gotten easier to maintain faith in mar- for all, and the distribution of the fruits of ket fundamentalism because one can al- affluence according to merit. That belief ways point to the collapse of its putative entails the conclusion that intervention by alternative, a planned, state-directed eco- the state is always synonymous with an nomy, and conclude that this unique – and attack on civil liberty,no matter what crisis notorious – oppositional scheme has van- situations may be present. In this way, an ished from history without a trace. In light ideology favored by those in power is able of its disappearance, every attempt to pro- to immunize itself perfectly against all mote the state’s capacity to accomplish what experience. Even when the market fails the market cannot is brushed aside as miserably and does grievous damage to not worthy of serious debate. That verdict some societal interests, it remains reliably is confirmed – albeit with somewhat bet- protected by this formula of liberty, which ter reasoning – in the case of the timid is now granted the status of an absolute. proposals tabled every now and then to It is also sustained by the unshakeable dethrone king market by means of some conviction that, even when it fails to live up sort of direct economic democracy com- to expectations,the market must have been plete with cooperative associations,a com- the victim of others’ misbehavior. Water- munal economy, and worker self-manage- tight imperviousness to criticism such as ment. we see here certainly deserves the label of In order to avoid slipping back into market fundamentalism. old, cherished illusions, we need to remind ourselves of the fact that, even into the 1980’s,elements of European social democ- Market, State, and Civil society: racy clung to their own brand of funda- the Pluses and Minuses mentalism. It was a fundamentalism of the state, though one hedged in by democracy. The fact that the market regularly suffers It was an illusion that blithely survives in recurrent crises that bring about devas- the Party of the Left and on the left fringe tating social and political consequences generally. Originally it consisted in the demonstrates impressively that it will extravagant hope that a democratically neither automatically operate in a harmo- legitimated state, continuously supervised nious fashion, nor produce miracles of by society and emancipated from all pri- perpetually successful self-regulation, as vate interests, could not be anything but liberal theory promised it would. The the embodiment of the common good, scholar of culture, Joseph Vogl, has recent- even in its role as director of the economy. ly made a persuasive case (in Das Gespenst Consequently,planning,public ownership, des Kapitals) that those powerful promises and public economy were seen as panaceas of liberal theory have never been anything without any injurious side-effects upon but the hybris of teleological transcen- sick markets. dence derived from doctrines of religious The actors of social democracy paid a justification,now decked out in the garb of high price for the historical experiences a supposedly precise science of national and their implicit theoretical lessons,which economy. taught them to know better. Step by step Of course neither experience nor ar- they cashed in their sanguine statism in guments will serve to refute market funda- favor of the recognition that each of the mentalism as a public ideology, because three available economic steering mecha-

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nisms – state, market, and civil society – ring the economic crisis that began in the had its own potential advantages as well twenties of the previous century. Of course, as unavoidable drawbacks. Hence, an un- it remains true that markets are far supe- dogmatic economic policy consistently rior to either the state or civil society as attuned to the general welfare should offer institutions for satisfying private consumer a prudent combination of all three,open to preferences (at least ones generated auto- revision through experience. In that way nomously) and ensuring the productive the deficiencies of each mechanism could allocation of resources. But this is only be minimized and the socially desirable the case as long as they remain imbedded steering outcomes could be optimized. in a dense matrix of social, cultural, and Markets have powerful functional ad- political correctives. vantages, but serious drawbacks as well. This story has been told many times, but it keeps being forgotten. In light of their The State as Surety own functional logic, markets can only deliver what demand,i.e.,effective purcha- We regularly underestimate how much of sing power, asks them to. They are there- a contribution civil society makes to the fore blind to justice, the public goods that optimal mix of economic steering mecha- sustain the life of society, and the chal- nisms. Among the common misunder- lenges of the future. And as long as they standings here is the notion that the state can rake in profits without being called has to be made responsible for everything to account, they are likewise deaf to their and must arrange it all in accord with its own externalities, especially the destruc- own peculiar logic of action. In that case tion of the ecological and social fabric the state would act as a kind of surety or that supports them. The logic of the mar- guarantor and be ultimately accountable ket inevitably moves in destructive cycles, for everything. However, when it comes lurching from boom to bust.Left to its own to public goods, what really matters is self-regulation, the logic of the market whether they are actually available to all tends to undermine the very principles citizens or not.In fact,many of these goods upon which it is supposedly built: markets can be provided by the activities of civil give way to monopolies and the accu- society or by a co-production between it mulation of market power by oligopoly. and the state, especially in the social field. In this way they overrule their own func- Empirical studies have shown that the tional logic in the sectors where this oc- cooperation of state, market, and civil so- curs, either totally or partially. To this list ciety elements in social service provision, of market failures, modern financial mar- e.g., for schools, culture, and elder care, has kets have added their own Dr. Caligari’s by now begun to play a significant role. cabinet of clever speculative instruments The steering services of civil society be- that have been unmasked as weapons of come especially crucial in times of growing mass destruction by experts on financial threats to our social and ecological life- markets. worlds, where they can help make eco- Thus,self-regulating markets,the dream nomic activity more sustainable. That can of neo-liberalism and its beneficiaries, be accomplished in a several ways. Civil turn out to be explosive charges laid at the society can sound an early warning when foundations of civilization, at least if mar- market effects threaten to damage the life- kets are left to their own devices. This is world; it can provide lobbying power exactly how Karl Polanyi described them against both the state and the market in as he witnessed their historic failure du- favor of more effective controls on harm-

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ful market forces; and it can act as a watch- that would spur its actors to economize dog demanding that existing rules actually and invest in innovative ways. Finally, the be followed and enforced. These are all state tends to pursue its own self-interest. services that can be provided in coopera- The market and civil society can and must tion with the state and market rather than correct these deficiencies. Market coordi- against them. Besides, civil society’s agents nation or solidarity-based civic action are not omnipresent, nor can they always sometimes offers a better way to generate claim democratic legitimation.And we are social, individual, or public goods. The op- here quite overlooking their »dark side« timal mix may indeed shift along with the (the particular interests lurking behind times and the contexts. When this is the them). case the state’s mandate from society actu- Only the democratic, law-governed ally requires it to step back and limit itself state has a mandate from society to safe- to creating frameworks and checking up guard the common good as well as the on outcomes. These things it can do all the obligation to secure the rights of all more effectively just because it has been citizens. And it does have the means at conscientious about setting limits for itself. hand to guarantee both. However, the state What we need, then, is not more naive too has its own special functional draw- statism directed against markets. Instead backs, and these set limits to what it can we ought to favor a resourceful state able accomplish. These deficiencies lead to the to carry out its ultimate surety function in recognition that even the state is not the favor of justice, social security, and eco- best producer of everything that it has to logical sustainability in cooperation with guarantee. markets and civil society. This is the most Among its built-in defects we would effective alternative, not only to market have to include at least three. The state fundamentalism, but also to the anarchists’ lacks the intrinsic complexity it would dream of letting civil society seize power, need to be able to steer a highly diversified although it is really the former that has economy and society in all its concrete spawned the latter all across the globe particulars. Incentive structures are lacking today. „

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PUBLISHER’S INFORMATION

Editorial Department of NG/FH Released for the Friedrich Ebert Stiftung by Friedrich Ebert Stiftung Sigmar Gabriel, Klaus Harpprecht, Jürgen Kocka, Hiroshimastrasse 17 Thomas Meyer, Bascha Mika and Peter Struck D-10785 Berlin Tel: 0049 30 26935 7151, -52, -53 Editorial Staff Fax: 0049 30 26935 9238 Thomas Meyer (editor-in-chief and responsible), www.ng-fh.de Lewis Hinchman (English language editor), [email protected] Dirk Kohn, Klaus-Jürgen Scherer, Johanna Kuchling

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