95 Theses Against the Rule of the Financial Markets
by Perestroika.de[These theses posted in 2017 were translated from the German by Marc Batko on the Internet, https://marcbatko.medium.com/we-live-in-a-radical-counterenlightenment-efd2bc4da619.]
By Michael Brie, Peter Wahl, Rudolf Hickel, Ulrich Duchrow, Gregor Gysi, Ingrid Mattern and Andre Brie at PERESTROIKA.comTIME FOR A NEW REFORMATION
Theses 1–15
1. What began in Luther’s time has reached a new climax today: the monopoly of money. Democracy is in danger. Internal and external peace are threatened. Social cohesion is disturbed. The domination of a neoliberal mainstream has made politics worldwide align itself with the dictates of the financial markets and the interests of the top, rich one percent of the population. The 8 richest men on earth own as much as the 3.6 billion of the poor half of humanity. A reversal, a reformation is necessary.
2. If 500 years ago it was the venality of the salvation of believers through the sale of indulgences that was the expression of a great crisis, today it is the subordination of politics to the dictates of the financial markets. God or Mammon — you cannot serve both, it was said in the time of Jesus and 500 years ago. Democracy or financial market capitalism — this is the question of our time.
3. Ongoing underdevelopment, 800 million people suffering from hunger, hundreds of thousands of deaths in wars, millions of refugees and internally displaced persons, and dramatic climate change have become fatally intertwined. Their flip side is exorbitant wealth and luxury. That the EU Commission has instead changed Parliament’s financial market directive, of all things, which was intended to stop excessive speculation in food, in such a way as to render it virtually ineffective, can only outrage. The austerity policy pushed through by the ECB, the IMF,
Angela Merkel and Wolfgang Schäuble has also led to youth unemployment and poverty in the south of the European Union taking on dramatic dimensions.
4. If the indulgence trade financed the global empires of Charles V and Pope Leo X as well as the usury system of the Peruzzi and Bardi, the Fugger and Welser and their system of colonialism, destruction of peoples and slave trade, today it is global financial market capitalism and its accumulation of wealth claims that must be financed from the production of the global gross national product.
5. U.S. economist Michael Hudson rightly summarizes that one percent of the population, with their financial assets and other wealth, “keep the remaining 99 percent, as well as corporations and entire states, in permanent debt …” This makes a democratic policy of solidarity, conservation of nature and peace impossible.
6. 500 years ago, the system of global capitalism came into being. Today, we must finally put reins on it again. Last but not least, the crisis since 2008 is another warning shot.
7. It is a system that destroys society and nature. Pope Francis puts it succinctly, “Just as the commandment ‘thou shalt not kill’ sets a clear limit to safeguard the value of human life, so today we must say ‘no to an economy and disparity of income.’ This economy kills.”
8. The financial system is out of control. Its crash has wreaked havoc not only in the financial sector itself. It is also dragging down the real economy, ecology, development of the South and peace.
9. Mountains of debt continue to grow unabated. In 2015, they reached a record $152 trillion globally. That is 225 percent of global gross national product. One third of this is public debt. Solidarity-based development is being sacrificed to debt servicing.
10.Particularly threatened are not only the crisis countries of the euro zone, but above all the developing countries. Between 2009 and 2014, the annual issuance of government bonds in low-income countries rose from $2 billion to $18 billion.
11.Many countries in the South are facing the debt trap and national bankruptcy.
12.The poor are paying for the enrichment of the rich. The crisis has exacerbated social problems.
13.Growing inequality has several causes, but financial market dynamics became the strongest driver of social polarization — long before the crisis.
14.The privatization of services of general interest — pensions and health — offers finance capital new and highly attractive opportunities for exploitation — at the expense of the security of these systems and the people who depend on them.
15.There is no end to the tunnel in sight. More and more economists are warning of the consequences of neoliberal financial and economic policies, which are fostering the emergence of further crises.
FINANCIAL CAPITALISM TAKES OVER
Theses 16–49
16.In the beginning, governments made political decisions. They handed over control of key economic decisions to financial markets.
17.The financial sector grew to absurd proportions. Between 1980 and 2007, foreign exchange turnover increased 30-fold. In the crisis year 2008, the volume of credit derivatives alone was ten times greater than the gross national product (GDP) of all the countries on earth. Deutsche Bank’s derivatives portfolio still amounted to 46 trillion euros in 2016 — more than fifteen times Germany’s GDP.
18.The dynamics of the financial markets became the engine of a globalization in which the weights were shifted massively to the disadvantage of democracy toward the market.
19.The financial markets escaped the regulatory grasp of the nation states. From their role as service providers for the real economy and society, they became their masters.
20.The profit interests of finance capital were transfigured into a set of constraints with no alternative.
21.The socially and democratically contained capitalism of the postwar era was sacrificed on the altar of the financial markets.
22.The globalization of financial markets is leading to the erosion of democracy. “Investors no longer have to be guided by the investment opportunities granted to them by their government; rather,
governments have to be guided by the wishes of investors,” wrote RolfErnst Breuer, then head of Deutsche Bank, proudly in 2000.
23.This is market-compliant democracy as it lives and breathes — long before the chancellor declared her support for it.
24.Over three decades, a monster has grown up. Some speak of financialization, others of casinos, and others again of financial capitalism. Whatever you call it, we are confronted with a new, an extremely dangerous type of financial system.
25.From the very beginning, the history of crisis management has been one of half-measures, dead ends and ineffectiveness.
26.Yet, at the beginning, it had looked as if policymakers had understood something under the shock of the crisis. “Excessive capitalism, as we have experienced here with all its greed, eats itself up in the end,” said then Finance Minister Peer Steinbrück. The 2009 G20 summits in London and Pittsburgh seemed to be on the right track when they announced their intention to rein in the unleashed financial markets.
27.Then governments bailed out the banks with gigantic sums of taxpayers’ money. The rich were protected.
28.As a result, the financial market crisis turned into a sovereign debt crisis. Public debt skyrocketed. It was a socialization of private losses on a dramatic scale.
29.In contrast, the people of Europe’s crisis countries have to pay the price in the form of the austerity policies of conservative governments.
30.Democracy was eroded in the course of crisis management and European nationalism was promoted. Far-reaching decisions were rushed through by the executive at a pace that sometimes did not even give representatives of the people time to read the draft laws.
31.For years, the driving force behind the socially and economically destructive austerity policy has been the conservative governments in Europe — and not least the German Chancellor and her Finance Minister Schäuble, who carry the dictates of austerity before them like a mantra.
32.If there has nevertheless not yet been a big bang, it is only because of the zero-interest rate policy of the European Central Bank (ECB) and the aid packages of the International Monetary Fund.
33.But the ECB can do no more than buy time. The longer this lasts, the more it will find itself in the position of a fire department that is running out of firefighting water.
34.It is therefore more important than ever to strengthen the savings banks and cooperative banks. They, too, have come under pressure in the current situation.
35.The privatization of services of general interest that has been preached for years is now also taking its toll. Under zero-interest conditions, private old-age, life and health insurance can no longer generate the necessary minimum returns. This is where the fact that old-age pension systems have been partially transferred to funded systems is taking its toll.
36.The ECB is printing cheap money, but the European Union has no meaningful investment strategy for it. And so the favorable interest rates trickle away, without economic sense or reason.
37.Yes, there have been reforms.
38.Capital requirements have been tightened. In the U.S., steps were also taken to separate traditional business from investment banking. The business of non-exchange-traded derivatives, known as over-thecounter trading, is to be made more transparent through clearinghouses. Short selling, i.e. speculation on falling prices, was restricted.
39.There were minor corrections in the supervision of banks, rating agencies, hedge funds, investor protection and particularly risky products such as credit default swaps.
40.In the meantime, the reform momentum has slackened. What’s more, a roll-back began in the EU under the Juncker Commission. With the Capital Markets Union project, deregulation is again being sought. And in the U.S., President Trump is now rolling back banking reforms.
41.The drying up of off-shore centers and tax swamps has made little progress, as Luxembourg Leaks and Panama Papers show us.
42.Concentration has also increased. The big banks today move even larger sums than before the crisis. In the shadow banking sector, individual players, such as the pension fund Blackrock, are getting bigger and more powerful.
43.At best, the reforms have made the casino a little safer — especially for the players. But, “Nothing short of closing the big casino will lead to a lasting solution,” as UNCTAD notes.
44.The problem-solving capacity of politicians also seems overwhelmed. Instead, location egoism, nationalism, competitive behavior and compartmentalization are on the rise. Multilateralism is in crisis. Global governance no longer seems to work. Everyone acts on their own account.
45.The chances of making global trade fair have unfortunately declined in the era of Trump. This president puts national interests at the center of his actions.
46.The financial sector, once the vanguard of globalization, is increasingly producing characteristics of selective de-globalization. The chances of shaping the financial system as a global public good are diminishing.
47.In the European Union (EU), the problem-solving deficits are even more pronounced. What sounds so beautifully realpolitik and down-to-earth, Angela Merkel’s “driving on sight” amounts to not dealing with the problems.
48.In their current state, the EU heads of government and the Commission no longer seem capable of a liberating blow. Muddling through is the only strategy. As long as the ECB, with its zero-interest rate and quantitative easing, keeps the leaking barge from completely sinking, people will live in the illusion that nothing will happen. But the situation continues to worsen from year to year.
49.The financial markets continue to fuel global warming. Hundreds of billions of euros a year are still being spent on fossil fuels instead of on renewable energies and the ecological modernization of our economy.
BRINGING THE FINANCIAL SYSTEM UNDER DEMOCRATIC CONTROL.
PRINCIPLES OF REORGANIZATION
Theses 50–72
50.Central to the defense of democratic governance of society as well as to a different economic policy today is a substantial reform of the financial
system. But such a project will only have a lasting impact if it gets to the root of the problems.
51.Stable and functioning financial markets are a public good. Luther demanded almost 500 years ago, “A bridle should be put in the mouth of the Fugger and the like company.” This has lost none of its validity for the Ackermanns and the like and must be renewed.
52.The financial system should serve the real economy and society.
53.Financial markets must be empowered to finance ecological restructuring, a solidarity-based development policy, a social perspective for the European Union and the social modernization of society.
54.Democratic politics regains control over markets and actors.
55.The economically useless casino business will be stopped.
56.The financial markets must shrink back to a level useful for the real economy.
57.The entire system must be de-accelerated.
58.The complexity of the system must be reduced.
59.The public banking sector must be strengthened and expanded, including by giving it privileges over the private sector. This takes precedence over EU competition law.
60.Instead of geopolitically motivated trade wars, we need a culture of cooperation and consideration in shaping the global economy.
In addition, the following key reforms should be sought:
61.Much stricter rules are needed for shadow banks.
62.We want to make large and complex banks easier to wind down in a crisis. At a minimum, banks should separate their deposit-taking and trading businesses and run them independently under one roof and provide them with capital.
63.We set effective limits on hedge funds, private equity funds and other speculators.
64.Derivatives generally require a harmlessness test by the financial supervisory authority. The burden of proof lies with the issuers of the products.
65.We are introducing electronic central bank money for payment transactions. This would be a firewall for this central element of the
financial system in the event of financial crises. In the digital age, such a system is largely automated and possible with little effort.
66.Offshore centers and tax swamps will be dried up. As long as this cannot be done in an internationally coordinated manner, unilateral measures are also possible, such as levying punitive taxes.
67.High-speed trade is slowed down. This eliminates the systemic risks of high-speed trade and removes the competitive distortions it creates.
68.We impose a simple and tough debt brake on banks.
69.Capital controls are legitimate instruments of capital market regulation. Their application in the event of a crisis takes precedence over the free movement of capital.
70.Pensions, health care and other services of general interest will be organized as public tasks.
71.Rating agencies receive performance-based premiums, also from public sources. So far, the rated party pays for the rating regardless of how accurate the rating was. In particular, the procyclical effect of ratings must be stopped. Social and environmental criteria must be integrated into the rating.
72.Supervision is given greater resources — financial, human, legal, technical.
A NEW REFORMATION AND A DIFFERENT WORLD ARE POSSIBLE
Theses 73–95
The financial markets and the accumulated, productively idle, even counterproductive for society and its cohesion, wealth must be able to be used by these changes for the solution of the great global, European and social challenges.
73.The goal is sustainable prosperity and quality of life through, for example, the expansion of the infrastructure for education, health care, nursing care, and public transportation as basic goods of a good life for all, for everyone.
74.The treasure of the church is the poor, Luther quotes St. Laurentius in his theses. So, the treasure of a good society today is the degree of justice it offers to all.
75.A just policy is measured by the fact that it works to ensure that everyone, including the most socially disadvantaged among us, has access to the goods of a free life.
76.After decades, the redistribution from the bottom to the top, from production and nature to financial markets, from women to men and from South to North must finally be reversed.
77.The extensive privatization of social wealth must give way to socialization in favor of investments in social cohesion, basic insurance for the poorest, and ecological restructuring through fair taxation of large property, high incomes, and wealth. The weaker countries must be supported by debt relief.
78.Germany still lacks a fair, socially and economically productive inheritance and wealth tax.
79.An economy based on solidarity and a life based on solidarity must be promoted. Enforcing the ban on arms exports to crisis regions and dictatorships, as well as global disarmament, will not only contribute to greater security and the limitation of threatening wars, but will itself free up financial and political resources, especially for people in the South.
80.If we want people to no longer have to flee, then the only way is to reduce the causes of flight must be dismantled and wars, misery, poverty and ecological decline overcome. This includes resistance against anti-Semitism, racism and xenophobia.
81.Enforcing the prohibition on armament exports to crisis regions and dictatorships and global disarmament contribute to more security and limiting aggressive wars. This also could release financial and political resources for people in the South.
82. What is needed is a global Marshall Plan with development-friendly changes in world economic structures in favor of fair trade, investment in poverty reduction, and ecological transformation here and in the South, which is already dramatically affected by climate change.
83. The austerity policy that Angela Merkel and Wolfgang Schäuble have whipped through in the EU must be ended.
84. Instead, the EU needs a comprehensive investment initiative for the transition to renewable energy, sustainable inclusive systems of housing, transport, education and culture, health and care.
85. Germany’s export surplus, which is destructive to many other European countries and to European integration, can be redirected through stronger domestic investment. At the same time, German budget surpluses could be used on a one-time basis to establish a European investment fund.
86. Critics had long pointed out that the economic and social upheavals could sooner or later lead to political catastrophes; Alain Badious, for example, warned of a “democratic fascism.” The world economic crisis of 1929 was already one of the causes of the rise of fascism.
87. The spirit of neoliberalism, which came across as the factual constraint of a globalized economic order, produced economic insecurity and generated fear of decline. The effect of austerity policies then came on top.
88. Disconnected, degraded, bitter and angry, some people are now turning to a right that promises them security, respect and participation. In the process, they succumb to the illusion that nationalism and xenophobia can solve their problems.
89. The further rise of the populist right can also be stopped by a different economic, social and peace policy.
90. Just as Luther encouraged believers in his Theses 94 and 95, people in Germany, Europe and the world need their own realistic confidence that the concentrated and difficult challenges to their social situation, as well as from wars, hardship and climate change, can be solved.
91. Without hope, Salomon said, people become desolate and wild. However, people who merely wait for solutions from above or outside will not get them.
92. There they will find only the domination of the financial markets and their interests.
93. What is at stake is nothing less than the supremacy of democracy and human rights, the inviolability of the dignity of every human being through action in solidarity, even against the financial markets.
94. But other than self-confident and self-responsible, such a reformation of society will not be achieved by the people.
95. Only through pressure from society and civic engagement will it be possible to overcome the reform blockade in the political and social system.
This is where we stand. We cannot do otherwise. We are for a different world and cannot turn back.
August 25, 2023
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