Does democracy still matter? (1)

Does democracy still matter? (1) 

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Does democracy still matter nowadays? Not only as a slogan, idea or goal, but as a system that alongside with capitalism is believed to be the best and most efficient from ones that are known to human kind. Since the end of I World War, democracy combined with a free market economy have been advertised as the only successful way of modern governing. Today, with globalisation on scale unseen before aiming mostly in economic development, does the system in which the free market exists is still equally important? Sadly, there are proofs that on the path to global wealth democracy fell behind and lost its meaning. 

 What are those proofs you may ask? One of the most profound is taken from times of Cold War, when the rapid ‘capitalisation’ of south America in 1960-70 took place. The ideas of neoliberalism ideology of Milton Friedman were implemented with brutal force, coups and military rule. Countries like Chile, Argentina or Venezuela experienced downfall which combined authoritarian rule with strict capitalist ideas. Rationalization for this process at that time was the belief that countries must have at least free market economies, not to be seen as supporting communism, even by the price of overthrowing democratically elected governments. The burden of tortured, kidnapped or killed people is still present today, whenever we hear about economic shock therapy. (a)

A more modern example is the case of Cyprus’s default, and the latter process of bailing it out by EU and organisations like IMF or WB. Pressure from markets, lenders or even countries like Germany was so strong that it was able to dismantle the elected government and parliament in order to put in power people seen as technocrats. The consequence of that was an acceptance of any conditions imposed by countries bailing out Cyprus, which even included a taxation of savings stored in banks. Something that many people would consider unthinkable became true and was executed without any concern of what people think and how that might affect them. In the end, it was their private money that was taken, just because of the outside pressure from markets and involved countries. (b)

Recent decision of Swiss voters to put quotas on EU immigration encountered a swift backslash from EU officials, stating that such a decision could face a retortion in bilateral relations, especially in the economic dimension. That shows how much respect there is for what people think and democratically decide about their own country. Such behaviour amongst the most developed EU countries is not rare. When Hungarian government under PM Victor Orban decided gain more control over Hungary central bank and not to use IMF lending, voices about undemocratic behaviour appeared. In the light of bailing out private companies with public money during the financial crisis, such voices are very hollow.  (c)

The point to prove here is not only that democracy itself became less important and valuable but also that what matters now most is the economy, free market, its global dimensions or in the end money itself. The connection that free market should enhance democracy and provide people with equivalents of its values in economic reality by equality, justice and prospects has been broken. This relationship was visible before II World War and few years after until the point when, after spread of neolberalism, money became the true power, and capitalism became the system which should be pursued first, making democracy a cosy addition but not a necessity. For centuries, the struggle of people has been to not have their lives in the hands of autocratic rulers but in representatives of them. And when that appeared to come true, it turned out that actually their lives might be now in the hands of a nameless banker in the city, who just by clicking on the computer has the power to put them into a misery in a fraction of time. An example of such a situation is the Asian crisis in the end of the 20th century, which made famous at that time the Asian Tiger who found themselves on the edge of default in less than a few months. And what is most striking: there were no wars, no coups, no natural disasters. What happened there was an amalgam of bad publicity, capital outflows, interference of IMF and WB and latter hostile takeover of whatever those countries had to sell to pay for the help of those organisations. In less than a year, millions of people lost their jobs, fell in poverty and big national companies were bought by foreign competitors, which closed or re-branded them to fit their own profile. In the end everything was for sale. Public services like canalisation services, water or electricity were given into private ownership. (d) The process of fixing that damage is not done even today.  

The problem that lies ahead of us now is that everything seems to be dependent on the powerful markets. Austerity measures? Markets have to see you cut public spending. Subsidies for less developed parts of economies? Forbidden, as the global trade has to be fair and open to ruthless competition –which makes Third World countries suffer the most, because of the situation when their money deals with IMF or WB does not allow them to do it, while even EU countries or USA subsidise its less competitive parts of economy). Whatever present governments cannot do is often justified by fears of markets, rating agencies or foreign investors. In some point it might seem that democracy today is more about vox pecunia rather than vox populi.  

 

a) Klein, N. (2008), The Shock Doctrine, Penguin Group, London

b) http://www.reuters.com/article/2014/02/09/us-swiss-vote-immigration-idUSBREA180H220140209

c) http://online.wsj.com/news/articles/SB10001424052702303496804579368754164417452 ; http://news.yahoo.com/hungary-aims-close-imf-office-repay-loan-early-123404737.html

d) Klein, N. (2008), The Shock Doctrine, Penguin Group, London, pp. 263-280

 

By Kamil Czarnecki

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