October 30, 2012

German Economic Imperialism - The Social Market


Fiscal Kommisar

More and more statements are coming from Germany, regarding the need for European states to give up sovereignty to a Fiscal Kommisar. What is this really about?

It is rooted in German theory of the Social Market Economy, and Ordoliberalism.

German economist Alfred Müller-Armack coined the term 'Social Market Economy' in 1946.
Müller-Armack was an influential economist and member of the NSDAP (Nazi) party from 1933-1945, and was known to be uncompromising of Nazi philosphy in his book "idea of ​​the state and economic order in the New Kingdom". With direct reference to Hitler's "Mein Kampf", Mueller Armack wrote of Nazi ideology that the German nation is "unified in feeling and thinking, by blood and by soil".

In 1932 Müller-Armack had called for a "clean separation" between industry and government, while a year later expressed pleasure in the fact that, in the idea of ​​the state and economic order of the new empire, "state power had finally become limitless". Müller-Armack and his colleagues certainly had an authoritarian understanding of the state.
In a direct reference to his views on democracy, he wrote in 1933; "It is probably correct to say the parliamentary regime in all countries, has failed... authoritarian rule today wants to form in it's system, the collective will of the people in ultimate confirmation of their rights."
Even Leipzig Professor of Economics Friedrun Quaas, has said Müller-Armack was "also expertokratisch and maybe a little bit dictatorial". ExpertoKratisch of course, is exactly what EU technocrats are. 

His economic theory was largely based on the philosophy of Hegel. Hegel's system formed a thinly veiled justification for the absolute rule of Frederick William III, believed the ultimate goal of history was to reach a state approximating that of 1830s Prussia. Hegel's philosophy served not only as an inspiration for communist and fascist totalitarian governments of the 20th century, but is the very thinking behind German state-worship. Hegel's philosophy, combined with Clausewitz total war theory, made Germany one of the most aggressive states in history, with a population totally subserviant to the state.
Müller-Armack was particularly in loving awe of Fascist philosophy in 1926, when Fascist Italy planned socialised debts of troubled Italian banks.
In 1940 he became a full professor and executive director of the Institute of Economic and Social Sciences of the Westfälische Wilhelms-Universität Münster , where he was consulting on tasks for the Nazi regime and the armed forces. Part of his task was the allocation, and economic basis of, housing and labour in occupied territories.
As the war passed, Müller-Armack saw that 100% state control of the German economy was damaging, and would not work long term. His theory of Social Market Economy came about as the system for Germany to use post-war. It took the lessons learned during the Fascist and National Socialist experiments, whilst still holding on to Technocratic and State control of markets.
It was a free market that was to be held back and castrated by elements of Socialism. A 'Socialism Lite'. It united in theory, any political ideologist who was inherently anti-free-market-capitalist. It was even termed a "Third Way".
The idea was that a Social Market Economy would heavily regulate the markets, but only where it deemed it neccessary, rather than outwardly control everything. The remains of the market that were not heavily regulated would be 'free'.
However, in the way that you can't be a little bit pregnant, you cannot have a market a little bit controlled by State Technocrats. Open the door to that intrusion, and every element of a market will be deemed necessary for State interference.
Why is this relevant today? 
Post-war Germany has essentially run as the only Social Market Economy. In 1990 when Germany reunified, the treaty between the FRG and GDR made the Social Market Economy the basis of their economic union.
According to the Konrad Adenuaer Stiftung, a German foundation linked to the German government and highly influential in the EU, The Social Market Economy is a "distinctively German model of economic and social policy".
And therein lies the truth. 
As part of the Lisbon Treaty (which was partly written by both the Konrad Adenuaer Stiftung, and the Bertelsmann Stiftung), member countries agreed to form a German economic system throughout Europe. They agreed to turn Europe into a German Social Market Economy.
Some EUrosceptics have noticed German hegemonic motives, but many don't see the link between all of the rules and regulations the EU forces on member states, and the German Social Market Economy. They are one and the same.
The latest of these to hit the headlines, is the push for a Fiscal Kommisar to run the budgets of member states. This is not due to the financial crisis, it is part of the German economic system. If member states are Free Market, a Fiscal Kommisar can only control budgets and Fiscal policy - the economic system is still free. However, if a country has a Social Market Economy allowing the input of State Technocrats and an abundance of regulations, the Fiscal Kommisar can effectively control everything in the country. This is an extremely dangerous situation, and the precedent has already been set.
It is fair to say there is much arrogance coming from German economists, regarding the Social Market Economy and German Fiscal superiority. Indeed, there is almost a religious fervour in the commitment by Germans to install this system throughout Europe. That in itself is worrying situation for a country that has a history of forcing it's superior ideas on other people, via both invasion and economic pressure.
According to the European Council on Foreign Relations;
"At the end of January, European leaders agreed the wording of the new treaty aimed primarily at tightening fiscal policy in the euro area, that was agreed in principle by 26 EU heads of government at last December’s European summit. The treaty reflects German positions rather than collective compromise. Much to the frustration of many other eurozone countries, Germany has imposed its own approach – centred on austerity and price stability at the expense of economic growth. There is more to Germany’s distinctive approach to the euro crisis than the much-discussed historical experience of the hyperinflation in the Weimar Republic. Rather, there is an ideological edifice behind German economic orthodoxy with which Germany’s partners must engage."
That economic orthodoxy of course, is the Social Market Economy. By its nature, it is opposed to Free Market Capitalism.
Germany is forcing its economic system on other countries. Much like the last war, this is about competing ideologies.
This should not be taken lightly. It is nothing short of German aggression of economic 'Kultur'. It really is a German economic invasion, in which the EU is complicit.
Despite the general playing down of the seriousness of this situation, the regulataory intrusion of this German system combined with calls for a Fiscal Kommisar, are very alarming and shine a light on German hegemonic ambition for Europe. It is Anathema to Anglo Free Market Capitalism.
According to Chancellor Merkel this week (in her weekly podcast) "In my opinion, we're not yet where we should be. We had planned to regulate every financial centre, every financial actor, every financial product."
This woman is dangerous, and will likely go to extreme lengths to impose what Germans believe is the superior system, and to control others via that system.
The EU has been hijacked and become a Trojan Horse for a German economic system.
EUrosceptics must grasp this properly to be able to provide an effective counter. The rules and regulations coming from Brussels are part of the German economic system.