Hot off the Presses!

The Crisis Explained

By Tomasz Konicz
http://portland.indymedia.org/en/2012/01/413591.shtml

So much crisis was never analyzed with a crisis-conditioned satisfaction guarantee! Instead of seeking culprits, we must seek the systemic causes of the indebtedness dynamic.

These gigantic debt mountains were necessary to keep capitalism functioning. Fewer and fewer workers can producer more and more goods in an ever-shorter time.

The Crisis Explained

What you need to know about the crisis but never dared ask.
Different FAQ on the permanent capitalist crisis
By Tomasz Konicz
[This article published 12/23/2011 on the German-English cyber journal Telepolis is translated from the German on the Internethttp://www.heise.de/tp/druck/mb/artikel/36/36123/1.html

Have you made yourself at home in the permanent crisis? Do you have an overview on all the huge debt mountains collapsing over us? A very special service is now offered for all who want to see through the crisis thicket. Do you want to become a crisis expert in a few minutes with the great FAQ on the crisis? The causes of the crisis will be named and the most frequent crisis myths unmasked. As the main attraction, links to texts offering more information and background on the complex themes can be found at the end of each answer. So much crisis was never analyzed with a crisis-conditioned satisfaction guarantee!

Gigantic debt mountains pile Up everywhere. Who is now responsible for the present debt crisis? The lazy Southern Europeans or our Greedy Bankers?

Instead of seeking "culprits." We must seek the systemic causes of the indebtedness dynamic. In the past decades, these gigantic debt mountains arose because they were necessary to keep capitalism functioning. Without contracting debts, the system would break apart in itself. Increasingly private and/or state indebtedness is a system prerequisite without which capitalism cannot reproduce any more.

We need only call to mind that borrowing really represents a turn to the future where financial resources are made available here and now that must be gained later from borrowing and paid back. These credits are expended for investments, building activity or consumption. As a result, debt overload creates an additional credit-financed demand that has a stimulating effect on the economy.

In the final analysis, it does not matter whether the state, the private economy or consumers become indebted. This credit-generated demand stimulates the economy and leads to further economic growth. Whether the American state orders new cruise missiles, builds new vacation homes in Spain for speculative purposes or consumer credits are awarded in Eastern Europe, all these actions generate demand, create jobs and animate the corresponding industrial branches. A so-called deficit economy arises if the indebtedness dynamic is strong enough. This economic upswing is based on the accumulation of debts or deficits.

These deficit economies acted as the crucial motor of the world economy in the epoch before the outbreak of the world economic crisis in 2008. This was a long term process that started with the realization of neoliberalism and the rise of the financial sector in the 1980s and gradually intensified. This indebtedness dynamic that went along with the expansion of the financial markets was supported by gigantic speculative bubbles in the financial sector that stimulated the economy up to their collapse. The real estate bubbles that burst between 2007 and 2008 with their enlivening effe3cts on industry should be named here since they occurred with the real building activity.

Not all countries became indebted equally. By a great distance the US was the strongest deficit economy - together with its huge debt mountains - followed by Southern Europe,

Eastern Europe, Ireland and Great Britain. These countries and regions showed rising balance of payments- and/or trade deficits while experiencing a continuing de-industrialization.

A series of countries with enormous trade surpluses and significant industrial sectors engaged in a sharp predatory competition. China, Germany, Japan and South Korea can be named here. These countries could profit by means of their trade surpluses from the indebtedness processes in the US and Southern Europe without having to become encumbered themselves. The vast global European "imbalances" in their trade balance sheets can be explained by this development.

Capitalism as a world system cannot function anymore without these deficit economies and their imbalances. As soon as the private or state credit-generated demand collapses, a self-intensifying downward spiral starts in which over-production leads to mass dismissals, demand falls again and more waves of dismissals result.

More information:
[1]“The End of the `Golden Age’ of Capitalism and the Rise of Neoliberalism”
[2]“Explosive Expansion of Financial Markets in the Clinton Era”
[3]“From Real Estate Speculation to Collapse of the Global Deficit Economy”

Why cannot capitalism regarded as the most efficient economic mode function any more without contracting debts? What is the reason for this dependence of the capitalist world system on credit?

Its increasing operational efficiency in the last years drives capitalism in an indebtedness pressure. The system is too productive to maintain its reproduction within its productive conditions without deficits.

Summarizing according to Marx, the productive forces break the chains of productive conditions. Thus this capitalist system crisis is actually a crisis of capital. The businessman invests his money as capital in machines, labor power and raw materials to produce new goods in factories that are profitably sold on the market. The expanded capital is reinvested in this boundless exploitation process of capital to produce even more goods. This process of the accumulation or exploitation of capital cannot function any longer without contracting debts.

To make this diagnosis completely understandable, the famous contradictions inherent in the capitalist production mode must be briefly explained. Besides the well-known contradiction between capital and labor, another fundamental incongruity marks the system resulting in a permanent structural change.

Even though paid labor is the substance of capital, capital strives to banish paid labor as much as possible through rationalization (out of the production process). A kind of race with the machines occurs. Market competition forces entrepreneurs in all industrial branches to continuously rationalize their production with technical-scientific
innovations. Employment in long-established economic branches continuously falls.

The same technical progress that leads to job cuts in established industrial branches also encourages the rise of new industrial branches. In the history of capitalism, there was always a structural change in which old industries disappeared and new industries were added. Fields for investment and paid labor are opened up. Therefore the history of capitalism is marked by a succession of key sectors of the economy that act as accumulation-, business cycle- and employment centers: the textile industry, heavy industry, chemicals, electronic industry and auto manufacturing.

However this structural change does not function any more with the rise of the third industrial revolution of micro-electronics and information technology. While the IT industry creates jobs, its technologies and products are applied across the economy and far more jobs disappear than are created in the course of globalization measures. A process of the melting away of paid labor is carried out within goods production. Fewer and fewer workers can produce more and more goods in an ever-shorter time.

As a result, the advanced capitalist countries fell into the crisis of the work society with increasing unemployment, general precariousness and/or stagnating wage levels. At the same time, spending for infrastructure and production investments increases with the technical level of production. This again strains mass demand and/or business profits. The necessary aggregate social investments to maintain the accumulation of capital always continue growing. The relation between profitable capital exploitation and the necessary expenditures for that exploitation shifts in favor of the latter.

Thus the true causes of the crisis are contrary to the populist slogans according to which the populations of threshold countries, Europe or the US lived “above their means.”

The exact opposite occurs. Capitalism has reached such a high production level that it could only lead a kind of zombie life for a long while by contracting debts – up to the great crash.

More information:
[6]“The Crisis Myth: Greece”
[7]“Robots instead of Workers”
[8]“The Race with Machines”
[9]“A Corpse Governs Society”
[10]“Perhaps We Are All Inmates in an Insane Asylum”
[11]“On Debts and Jobs”

What role do the financial markets play? The evil “banksters” have got us into a real fix with their boundless greed, it is said everywhere.

Since the financial crash preceded the economic collapse, the impression arises that the financial markets cast the real economy into the abyss. However the financial markets by awarding credits kept the real economy going by producing credit-financed mass demand. The financial markets made possible the deficit economies since credit is generally the most important “asset” of financial management.

The collapse of the real estate bubble in 2008 and the “credit crunch” led to the collapse of demand and the economic crisis of 2009. The growth of the financial markets for decades was itself a result of the above-described crisis of the work society resulting from continuous rationalization. Capital streams where the highest profits are expected.

Criticizing bankers for excessive greed is absurd since “greed” – as the highest possible capital expansion – is the nature of capital.

This is also true for goods production as well as for the financial branch. When the utilization of capital in the goods-producing economy comes to a standstill and increasing predatory competition lowers profits, investment-eager capital now streams into the financial markets. In general, financial excesses result from a crisis in goods-production.

The rapidly expanding financial markets seem to play the role of the key sector of the economy since the structural change in the real economy did not function any more. The financial explosion from the 1980s and 1990s was unstable and not lasting for the long run even though many jobs were created in the financial sector. This explosive growth of financial management was built on sand. Capitalist wealth expressed in the abundance of goods must be deconstructed in the framework of capitalist exploitation. The financial markets can contribute to this process by granting businesses credits that are used to modernize, for productive investments and/or expand quantities of production.

On account of the systemic over-production crisis in the real economy, the expansion of the financial markets actually ran in another direction – in pure speculation that always leads ultimately to bubbles. For two decades, we witnessed a kind of financial bubble capitalism characterized by the rise of ever-greater speculative bubbles that in their initial phase functioned as stable economic motors and upon bursting leave behind ever-greater devastations.

In a protracted process, the dependence of the whole system on the indebtedness dynamic increased successively: beginning with the Asian crisis at the end of the 1990s, the high tech bubble of 2000, the real estate speculation that burst in 2008 to the liquidity bubble that is presently bursting. In the past, the disastrous consequences of this collapsing speculative dynamic could only be delayed through new bubbles – through a blind “flight” into more speculative excesses.

We must make clear that the current state debt crisis can be referred back in large part to the bursting of the speculative bubbles in the real estate sector. Before the eruption of the crisis in 2008, Spain and Ireland had lower state indebtedness than Germany. State indebtedness exploded in many countries through “relief measures” in the billions for the staggering financial markets and “socialization” of the crisis losses. It seems paradoxical but the states have actually stabilized the financial markets through further indebtedness on the financial markets. But the European state debt crisis will not automatically become a financial market crisis since state bankruptcies would immediately drive the banks into bankruptcy that bought up government bonds.

Thus both poles of capital socialization – the state and capital – are chained together in a chain symbiosis. It is important to remember that state and private debts had the same aggregate social effect as stimulation of the economy. Therefore the debt mountains now piled up also represent an aggregate social burden. The debt crisis is a crisis of the whole system and is not only a crisis of the states or the banks.

In summary, an expanded financial sector can be interpreted as an undisputed crisis phenomenon – but not as the cause of the crisis. The advance of productive forces driven tempestuously by capitalism undermines the foundations of the capitalist production mode. The crisis has its causer in the contradictions of the goods-producing industry, not in the financial sector. The excessive proliferation of the financial markets keeps the real economy suffering under latent over-production alive through debt-generated demand.

More information:
[12]“From Real Estate Speculation to Collapse of the Global Deficit Economy”
[13]“The Miracle on Wall Street”
[14]“Hurrah, the (Pseudo-) Upswing is Here!”

What can the financially strapped states do now? What options remain for politics?

Politics with its instruments cannot solve the present crisis. But it can delay the serious economic collapse that is threatening.

Crisis policy finds itself in a philosophical paradox, in an insoluble self-contradiction in which it can only choose between two different paths into crisis. On one hand, politics can drive the state indebtedness higher and higher to prevent economic collapse. This approach which mostly goes along with an expansive monetary policy leads at the end to inflation or state bankruptcy – since ultimately the printing press must be turned on to maintain the indebtedness dynamic. On the other hand, governments could try to reduce their huge debt mountains through draconian cuts. However this would cause an immediate economic breakdown that would lead to considerable impoverishment in the impacted societies. Most governments decided first for contracting debts. After the outbreak of the crisis, the states maintained the indebtedness dynamic on the financial markets from 2008 on through credit-financed economic programs. The deficit economy formerly organized by the financial markets in which accumulation of debts stimulated the economy was nationalized after the crisis eruption – until the states hit the limits of their financial burden. With the increasing crisis intensity, the arguing over crisis policy escalated. The German government can now obligate the European Union to strict austerity programs while the US persists on continuing indebtedness and taking out loans.

The conflicts over the concrete organization of capitalist crisis policy become more ferocious because both fractions in this dispute fear the disastrous consequences of the policy of the other side. Several countries can no longer refinance their budget deficits on the financial markets because of excessive state indebtedness and must flee under the “Euro bailout umbrella.” Discontinuance of the debt-financed economic programs leads to an economic slack period, stagnation and recession.

In their diagnosis, both sides are actually right in the financial policy conflict around the organization of future crisis policy. More state indebtedness will inevitably lead to state bankruptcy or hyper-inflation; ending state indebtedness will lead to recession. But both sides are also on the wrong way when they assume that their “therapies” and policy concepts could solve the fundamental crisis of the world economy that was only extended after 2008 through escalating state indebtedness.

The irrational reflexes tending to the chauvinistic that spread in politics and the mass media and among those who raise capitalist ideologies to the extreme result from the impossibility of mastering this system crisis with the instruments of crisis policy.

More information:
[15]“Politics in the Crisis Trap”
[16]“Crisis and Mania”

Why is Europe now the global crisis center although other Staters – like the US – are similarly heavily indebted?

The huge debt mountains of the US and Europe grew in similarly gigantic dimensions. On both sides of the Atlantic, the causes of indebtedness can be referred back to the unsuccessful structural change and the crisis of the work society. Confronted with the crisis traps, policy in the US takes another course than in the Euro zone.

The difference between the US and the EU lies in the readiness of the US to maintain the indebtedness dynamic of the US state by buying up government bonds – and accepting excessive inflation in the medium term. Since the US Federal Reserve bought up US government bonds on a large scale, the interest-burden of the US was kept low and a catastrophic economic collapse prevented since the state indebtedness dynamic – and the credit-financed state demand – can be maintained.

In the EU, Germany prevailed with the demand for immediate budget revitalization while the European Central Bank’s buying up of government bonds was vigorously rejected by Berlin. Without the European Central Bank’s buying up government bonds, the interest burden of the Southern European debt states will soon be intolerable. A breakdown of the Euro zone will be very likely. Without continuing indebtedness, the Euro zone will sink into a gr4ave recession that is already announced with falling industrial production across Europe.

More information:
[17]“Greece as Crisis Myth”
[18]“Will Europe Break Down in the Crisis?”
[19]“A Comparison of the Transatlantic Debt Towers”
[20]“The Worldwide Economic Crisis as a Debt Crisis”

How terrible will the crisis be? Where must we adjust?

In the short-term, the system will certainly sink in a serious economic crisis as soon as the indebtedness dynamic breaks down that still keeps capitalism going. The looming global depression could reach the intensity and drama of the worldwide economic crisis of the 1930s with grave social and political dislocations and upheavals. The economic collapse in Southern Europe will not be superseded by a later upswing. Instead a permanent economic descent occurs in the periphery of the EU that will drive back the affected countries in their civilization development. It is like the “third world” spreading from North Africa and the Mediterranean to Southern Europe. A process of the “melting away” of the island of prosperity of the “first world” is now underway on a global scale.

The coming global depression is only the latest stage of a long-term world-historic al process in which the capitalist world system hits the internal limit of its development capacity and collapses in its escalating contradictions. The system enters a phase of chaotic upheaval while the direction and ending of this process cannot be predicted. The American sociologist Immanuel Wallerstein described this period of systemic upheaval as follows:

“We live in a phase of transition from our existing world system and capitalist economy to another system or other systems. We do not know whether this will be a change for the better or for the worse. We will first know this when we arrive there. This could take another 50 years. We know the period of transition will be very hard for everyone living in it… It will be a time of conflicts and considerable unrest and a time in which the factor of free will is raised to the maximum. This is not paradoxical. Every individual and collective act will have a greater effect in building the future than in normal times during the survival of an historical system.” Immanuel Wallerstein, Utopistik, Vienna 2002, p.43

In a certain sense, the conflicts and dislocations that are escalating globally can be understood as part of this struggle over the formation of the future world system even if this is mostly not clear to the actors in these struggles. The enormous intensification of the upheavals and conflicts result from the fact that the present system becomes insufferable to more and more people since it strikes its limits of development.

More and more people fall out of the process of capital accumulation. They become “superfluous” – while the pressure on wage-earners grows. The lack of perspectives of youth in the Arabian region was an important driving force of the upheavals in this area. Germany can be described as a burnout-republic while double-digit rates of unemployment are reached in Southern Europe.

These contradictions will intensify with the increasing intensity of the crisis. The outcome of this chaotic transformation process is completely unclear, as Wallerstein says, since he starts from the infinitely complex and interwoven actions of the dependent actors. The coming world system can be much worse (more hierarchical and more dictatorial) than the present system – or better (more egalitarian and more democratic). The society emerging from this transformation will certainly not be a capitalist society since it is the capital relation itself that strikes its internal limits and is the deeper cause of the current crisis.

In the end, this crisis could also be seen as a chance to build a better, more democratic and more egalitarian social system. In abstracting from the concrete forms of capitalist socialization, the crisis assumes an absolutely absurd character. Society suffocates in its surplus.

Capitalism in the end loses its endless “race with the machines.” Since too many goods can be produced with fewer and fewer workers, more and more population sectors and world regions sink in marginalization and impoverishment. Still the technical and material prerequisites for building a society that satisfies the basic needs of all people worldwide exists.

More information:
[21]Immanuel Wallerstein on the End of Capitalism
[22]“In 30 years there will be no capitalism any more”
[23]“Reducing the Over-Capacities”
[24]“Second wave of global economic crisis in the next years”

LINKS:

[1] http://www.heise.de/tp/artikel/29/29184/1.html
[2] http://www.heise.de/tp/artikel/29/29235/1.html
[3] http://www.heise.de/tp/artikel/29/29356/1.html
[4] http://www.heise.de/tr/artikel/Der-Wettlauf-mit-den-Maschinen-1370433.html
[5] www.heise.de
[6] http://www.heise.de/tp/artikel/32/32551/1.html
[7] http://www.heise.de/tp/artikel/35/35245/1.html
[8] http://www.heise.de/tr/artikel/Der-Wettlauf-mit-den-Maschinen-1370433.html
[9] http://www.heise.de/tp/artikel/5/5659/1.html
[10] http://www.heise.de/tp/artikel/13/13628/1.html
[11] http://www.heise.de/tp/artikel/35/35138/1.html
[12] http://www.heise.de/tp/artikel/29/29356/1.html
[13] http://www.heise.de/tp/artikel/31/31777/1.html
[14] http://www.heise.de/tp/artikel/31/31137/1.html
[15] http://www.heise.de/tp/artikel/35/35303/1.html
[16] http://www.heise.de/tp/artikel/35/35813/1.html
[17] http://www.heise.de/tp/artikel/32/32551/1.html
[18] http://www.heise.de/tp/artikel/35/35514/1.html
[19] http://www.heise.de/tp/artikel/35/35052/1.html
[20] http://www.heise.de/tp/artikel/30/30415/1.html
[21] http://www.youtube.com/watch?v=nLvszWBf6BQ
[22] http://www.heise.de/tp/artikel/29/29687/1.html
[23] http://www.heise.de/tp/artikel/32/32931/1.html
[24] http://www.heise.de/tp/artikel/32/32932/1.html

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Buzzflash

Our Beautiful New Clothes
By Ingo Schutze
[This essay is translated abridged from the German on the Internet.]

You all know the fairy-tale “The Emperor’s New Clothes” by Hans Christian Andersen. This fairy-tale can easily be retold because it emphasizes a point that one knows – or thinks one knows – and is part of our everyday consciousness. Through the child’s cry “the emperor has nothing on!,” the whole fraud blows up and the people finally cry out:

“But he has nothing on!”

In my opinion, Hans Christian Andersen could have ended his story better. He ended it ambiguously…

The Emperor’s New Suit
by
Hans Christian Andersen
(1837)
Emperor

Many, many years ago lived an emperor, who thought so much of new clothes that he spent all his money in order to obtain them; his only ambition was to be always well dressed. He did not care for his soldiers, and the theatre did not amuse him; the only thing, in fact, he thought anything of was to drive out and show a new suit of clothes. He had a coat for every hour of the day; and as one would say of a king “He is in his cabinet,” so one could say of him, “The emperor is in his dressing-room.”

The great city where he resided was very gay; every day many strangers from all parts of the globe arrived. One day two swindlers came to this city; they made people believe that they were weavers, and declared they could manufacture the finest cloth to be imagined. Their colours and patterns, they said, were not only exceptionally beautiful, but the clothes made of their material possessed the wonderful quality of being invisible to any man who was unfit for his office or unpardonably stupid.

“That must be wonderful cloth,” thought the emperor. “If I were to be dressed in a suit made of this cloth I should be able to find out which men in my empire were unfit for their places, and I could distinguish the clever from the stupid. I must have this cloth woven for me without delay.” And he gave a large sum of money to the swindlers, in advance, that they should set to work without any loss of time. They set up two looms, and pretended to be very hard at work, but they did nothing whatever on the looms. They asked for the finest silk and the most precious gold-cloth; all they got they did away with, and worked at the empty looms till late at night.

“I should very much like to know how they are getting on with the cloth,” thought the emperor. But he felt rather uneasy when he remembered that he who was not fit for his office could not see it. Personally, he was of opinion that he had nothing to fear, yet he thought it advisable to send somebody else first to see how matters stood. Everybody in the town knew what a remarkable quality the stuff possessed, and all were anxious to see how bad or stupid their neighbours were.

“I shall send my honest old minister to the weavers,” thought the emperor. “He can judge best how the stuff looks, for he is intelligent, and nobody understands his office better than he.”

The good old minister went into the room where the swindlers sat before the empty looms. “Heaven preserve us!” he thought, and opened his eyes wide, “I cannot see anything at all,” but he did not say so. Both swindlers requested him to come near, and asked him if he did not admire the exquisite pattern and the beautiful colours, pointing to the empty looms. The poor old minister tried his very best, but he could see nothing, for there was nothing to be seen. “Oh dear,” he thought, “can I be so stupid? I should never have thought so, and nobody must know it! Is it possible that I am not fit for my office? No, no, I cannot say that I was unable to see the cloth.”

“Now, have you got nothing to say?” said one of the swindlers, while he pretended to be busily weaving.

“Oh, it is very pretty, exceedingly beautiful,” replied the old minister looking through his glasses. “What a beautiful pattern, what brilliant colours! I shall tell the emperor that I like the cloth very much.”

“We are pleased to hear that,” said the two weavers, and described to him the colours and explained the curious pattern. The old minister listened attentively, that he might relate to the emperor what they said; and so he did.

Now the swindlers asked for more money, silk and gold-cloth, which they required for weaving. They kept everything for themselves, and not a thread came near the loom, but they continued, as hitherto, to work at the empty looms.

Soon afterwards the emperor sent another honest courtier to the weavers to see how they were getting on, and if the cloth was nearly finished. Like the old minister, he looked and looked but could see nothing, as there was nothing to be seen.

“Is it not a beautiful piece of cloth?” asked the two swindlers, showing and explaining the magnificent pattern, which, however, did not exist.

“I am not stupid,” said the man. “It is therefore my good appointment for which I am not fit. It is very strange, but I must not let any one know it;” and he praised the cloth, which he did not see, and expressed his joy at the beautiful colours and the fine pattern. “It is very excellent,” he said to the emperor.

Everybody in the whole town talked about the precious cloth. At last the emperor wished to see it himself, while it was still on the loom. With a number of courtiers, including the two who had already been there, he went to the two clever swindlers, who now worked as hard as they could, but without using any thread.

“Is it not magnificent?” said the two old statesmen who had been there before. “Your Majesty must admire the colours and the pattern.” And then they pointed to the empty looms, for they imagined the others could see the cloth.

“What is this?” thought the emperor, “I do not see anything at all. That is terrible! Am I stupid? Am I unfit to be emperor? That would indeed be the most dreadful thing that could happen to me.”

“Really,” he said, turning to the weavers, “your cloth has our most gracious approval;” and nodding contentedly he looked at the empty loom, for he did not like to say that he saw nothing. All his attendants, who were with him, looked and looked, and although they could not see anything more than the others, they said, like the emperor, “It is very

beautiful.” And all advised him to wear the new magnificent clothes at a great procession which was soon to take place. “It is magnificent, beautiful, excellent,” one heard them say; everybody seemed to be delighted, and the emperor appointed the two swindlers “Imperial Court weavers.”

The whole night previous to the day on which the procession was to take place, the swindlers pretended to work, and burned more than sixteen candles. People should see that they were busy to finish the emperor’s new suit. They pretended to take the cloth from the loom, and worked about in the air with big scissors, and sewed with needles without thread, and said at last: “The emperor’s new suit is ready now.”

The emperor and all his barons then came to the hall; the swindlers held their arms up as if they held something in their hands and said: “These are the trousers!” “This is the coat!” and “Here is the cloak!” and so on. “They are all as light as a cobweb, and one must feel as if one had nothing at all upon the body; but that is just the beauty of them.”

“Indeed!” said all the courtiers; but they could not see anything, for there was nothing to be seen.

“Does it please your Majesty now to graciously undress,” said the swindlers, “that we may assist your Majesty in putting on the new suit before the large looking-glass?”

The emperor undressed, and the swindlers pretended to put the new suit upon him, one piece after another; and the emperor looked at himself in the glass from every side.

“How well they look! How well they fit!” said all. “What a beautiful pattern! What fine colours! That is a magnificent suit of clothes!”

The master of the ceremonies announced that the bearers of the canopy, which was to be carried in the procession, were ready.

“I am ready,” said the emperor. “Does not my suit fit me marvellously?” Then he turned once more to the looking-glass, that people should think he admired his garments.

The chamberlains, who were to carry the train, stretched their hands to the ground as if they lifted up a train, and pretended to hold something in their hands; they did not like people to know that they could not see anything.

The emperor marched in the procession under the beautiful canopy, and all who saw him in the street and out of the windows exclaimed: “Indeed, the emperor’s new suit is incomparable! What a long train he has! How well it fits him!” Nobody wished to let others know he saw nothing, for then he would have been unfit for his office or too stupid.

Never emperor’s clothes were more admired.

“But he has nothing on at all,” said a little child at last. “Good heavens! listen to the voice of an innocent child,” said the father, and one whispered to the other what the child had said. “But he has nothing on at all,” cried at last the whole people. That made a deep impression upon the emperor, for it seemed to him that they were right; but he

thought to himself, “Now I must bear up to the end.” And the chamberlains walked with still greater dignity, as if they carried the train which did not exist.

The Emperor’s New Clothes
A translation of Hans Christian Andersen’s “Keiserens nye Klæder”
By Jean Hersholt.

Info & links

Many years ago there was an Emperor so exceedingly fond of new clothes that he spent all his money on being well dressed. He cared nothing about reviewing his soldiers, going to the theatre, or going for a ride in his carriage, except to show off his new clothes. He had a coat for every hour of the day, and instead of saying, as one might, about any other ruler, “The King’s in council,” here they always said. “The Emperor’s in his dressing room.”

In the great city where he lived, life was always gay. Every day many strangers came to town, and among them one day came two swindlers. They let it be known they were weavers, and they said they could weave the most magnificent fabrics imaginable. Not only were their colors and patterns uncommonly fine, but clothes made of this cloth had a wonderful way of becoming invisible to anyone who was unfit for his office, or who was unusually stupid.

“Those would be just the clothes for me,” thought the Emperor. “If I wore them I would be able to discover which men in my empire are unfit for their posts. And I could tell the wise men from the fools. Yes, I certainly must get some of the stuff woven for me right away.” He paid the two swindlers a large sum of money to start work at once.

They set up two looms and pretended to weave, though there was nothing on the looms. All the finest silk and the purest old thread which they demanded went into their traveling bags, while they worked the empty looms far into the night.

“I’d like to know how those weavers are getting on with the cloth,” the Emperor thought, but he felt slightly uncomfortable when he remembered that those who were unfit for their position would not be able to see the fabric. It couldn’t have been that he doubted himself, yet he thought he’d rather send someone else to see how things were going. The whole town knew about the cloth’s peculiar power, and all were impatient to find out how stupid their neighbors were.

“I’ll send my honest old minister to the weavers,” the Emperor decided. “He’ll be the best one to tell me how the material looks, for he’s a sensible man and no one does his duty better.”

So the honest old minister went to the room where the two swindlers sat working away at their empty looms.

“Heaven help me,” he thought as his eyes flew wide open, “I can’t see anything at all”. But he did not say so.

Both the swindlers begged him to be so kind as to come near to approve the excellent pattern, the beautiful colors. They pointed to the empty looms, and the poor old minister stared as hard as he dared. He couldn’t see anything, because there was nothing to see. “Heaven have mercy,” he thought. “Can it be that I’m a fool? I’d have never guessed it,

and not a soul must know. Am I unfit to be the minister? It would never do to let on that I can’t see the cloth.”

“Don’t hesitate to tell us what you think of it,” said one of the weavers.

“Oh, it’s beautiful -it’s enchanting.” The old minister peered through his spectacles. “Such a pattern, what colors!” I’ll be sure to tell the Emperor how delighted I am with it.”

“We’re pleased to hear that,” the swindlers said. They proceeded to name all the colors and to explain the intricate pattern. The old minister paid the closest attention, so that he could tell it all to the Emperor. And so he did.

The swindlers at once asked for more money, more silk and gold thread, to get on with the weaving. But it all went into their pockets. Not a thread went into the looms, though they worked at their weaving as hard as ever.

The Emperor presently sent another trustworthy official to see how the work progressed and how soon it would be ready. The same thing happened to him that had happened to the minister. He looked and he looked, but as there was nothing to see in the looms he couldn’t see anything.

“Isn’t it a beautiful piece of goods?” the swindlers asked him, as they displayed and described their imaginary pattern.

“I know I’m not stupid,” the man thought, “so it must be that I’m unworthy of my good office. That’s strange. I mustn’t let anyone find it out, though.” So he praised the material he did not see. He declared he was delighted with the beautiful colors and the exquisite pattern. To the Emperor he said, “It held me spellbound.”

All the town was talking of this splendid cloth, and the Emperor wanted to see it for himself while it was still in the looms. Attended by a band of chosen men, among whom were his two old trusted officials-the ones who had been to the weavers-he set out to see the two swindlers. He found them weaving with might and main, but without a thread in their looms.

“Magnificent,” said the two officials already duped. “Just look, Your Majesty, what colors! What a design!” They pointed to the empty looms, each supposing that the others could see the stuff.

“What’s this?” thought the Emperor. “I can’t see anything. This is terrible!

Am I a fool? Am I unfit to be the Emperor? What a thing to happen to me of all people! – Oh! It’s very pretty,” he said. “It has my highest approval.” And he nodded approbation at the empty loom. Nothing could make him say that he couldn’t see anything.

His whole retinue stared and stared. One saw no more than another, but they all joined the Emperor in exclaiming, “Oh! It’s very pretty,” and they advised him to wear clothes made of this wonderful cloth especially for the great procession he was soon to lead. “Magnificent! Excellent! Unsurpassed!” were bandied from mouth to mouth, and everyone did his best to seem well pleased. The Emperor gave each of the swindlers a cross to wear in his buttonhole, and the title of “Sir Weaver.”

Before the procession the swindlers sat up all night and burned more than six candles, to show how busy they were finishing the Emperor’s new clothes. They pretended to take the cloth off the loom. They made cuts in the air with huge scissors. And at last they said, “Now the Emperor’s new clothes are ready for him.”

Then the Emperor himself came with his noblest noblemen, and the swindlers each raised an arm as if they were holding something. They said, “These are the trousers, here’s the coat, and this is the mantle,” naming each garment. “All of them are as light as a spider web. One would almost think he had nothing on, but that’s what makes them so fine.”
“Exactly,” all the noblemen agreed, though they could see nothing, for there was nothing to see.

“If Your Imperial Majesty will condescend to take your clothes off,” said the swindlers, “we will help you on with your new ones here in front of the long mirror.” The Emperor undressed, and the swindlers pretended to put his new clothes on him, one garment after another. They took him around the waist and seemed to be fastening something – that was his train-as the Emperor turned round and round before the looking glass.

“How well Your Majesty’s new clothes look. Aren’t they becoming!” He heard on all sides, “That pattern, so perfect! Those colors, so suitable! It is a magnificent outfit.” Then the minister of public processions announced: “Your Majesty’s canopy is waiting outside.”

“Well, I’m supposed to be ready,” the Emperor said, and turned again for one last look in the mirror. “It is a remarkable fit, isn’t it?” He seemed to regard his costume with the greatest interest.

The noblemen who were to carry his train stooped low and reached for the floor as if they were picking up his mantle. Then they pretended to lift and hold it high. They didn’t dare admit they had nothing to hold.

So off went the Emperor in procession under his splendid canopy. Everyone in the streets and the windows said, “Oh, how fine are the Emperor’s new clothes! Don’t they fit him to perfection? And see his long train!” Nobody would confess that he couldn’t see anything, for that would prove him either unfit for his position, or a fool. No costume the

Emperor had worn before was ever such a complete success.

“But he hasn’t got anything on,” a little child said.

“Did you ever hear such innocent prattle?” said its father. And one person whispered to another what the child had said, “He hasn’t anything on. A child says he hasn’t anything on.”

“But he hasn’t got anything on!” the whole town cried out at last.

The Emperor shivered, for he suspected they were right. But he thought, “This procession has got to go on.” So he walked more proudly than ever, as his noblemen held high the train that wasn’t there at all.

The Emperor’s New Clothes
by Hans Christian Anderson

Once upon a time there lived a vain Emperor whose only worry in life was to dress in elegant clothes. He changed clothes almost every hour and loved to show them off to his people.

Word of the Emperor’s refined habits spread over his kingdom and beyond. Two scoundrels who had heard of the Emperor’s vanity decided to take advantage of it. They introduced themselves at the gates of the palace with a scheme in mind.

“We are two very good tailors and after many years of research we have invented an extraordinary method to weave a cloth so light and fine that it looks invisible. As a matter of fact it is invisible to anyone who is too stupid and incompetent to appreciate its quality.”

The chief of the guards heard the scoundrel’s strange story and sent for the court chamberlain. The chamberlain notified the prime minister, who ran to the Emperor and disclosed the incredible news. The Emperor’s curiosity got the better of him and he decided to see the two scoundrels.

“Besides being invisible, your Highness, this cloth will be woven in colors and patterns created especially for you.” The emperor gave the two men a bag of gold coins in exchange for their promise to begin working on the fabric immediately.

“Just tell us what you need to get started and we’ll give it to you.” The two scoundrels asked for a loom, silk, gold thread and then pretended to begin working. The Emperor thought he had spent his money quite well: in addition to getting a new extraordinary suit, he would discover which of his subjects were ignorant and incompetent. A few days later, he called the old and wise prime minister, who was considered by everyone as a man with common sense.

“Go and see how the work is proceeding,” the Emperor told him, “and come back to let me know.”

The prime minister was welcomed by the two scoundrels.

“We’re almost finished, but we need a lot more gold thread. Here, Excellency! Admire the colors, feel the softness!” The old man bent over the loom and tried to see the fabric that was not there. He felt cold sweat on his forehead.

“I can’t see anything,” he thought. “If I see nothing, that means I’m stupid! Or, worse, incompetent!” If the prime minister admitted that he didn’t see anything, he would be discharged from his office.

“What a marvelous fabric, he said then. “I’ll certainly tell the Emperor.” The two scoundrels rubbed their hands gleefully. They had almost made it. More thread was requested to finish the work.

Finally, the Emperor received the announcement that the two tailors had come to take all the measurements needed to sew his new suit.

“Come in,” the Emperor ordered. Even as they bowed, the two scoundrels pretended to be holding large roll of fabric.

“Here it is your Highness, the result of our labour,” the scoundrels said. “We have worked night and day but, at last, the most beautiful fabric in the world is ready for you.

Look at the colors and feel how fine it is.” Of course the Emperor did not see any colors and could not feel any cloth between his fingers. He panicked and felt like fainting.

But luckily the throne was right behind him and he sat down. But when he realized that no one could know that he did not see the fabric, he felt better. Nobody could find out he was stupid and incompetent. And the Emperor didn’t know that everybody else around him thought and did the very same thing.

The farce continued as the two scoundrels had foreseen it. Once they had taken the measurements, the two began cutting the air with scissors while sewing with their needles an invisible cloth.

“Your Highness, you’ll have to take off your clothes to try on your new ones.” The two scoundrels draped the new clothes on him and then held up a mirror. The Emperor was embarrassed but since none of his bystanders were, he felt relieved.

“Yes, this is a beautiful suit and it looks very good on me,” the Emperor said trying to look comfortable. “You’ve done a fine job.”

“Your Majesty,” the prime minister said, “we have a request for you. The people have found out about this extraordinary fabric and they are anxious to see you in your new suit.”

The Emperor was doubtful showing himself naked to the people, but then he abandoned his fears. After all, no one would know about it except the ignorant and the incompetent.

“All right,” he said. “I will grant the people this privilege.” He summoned his carriage and the ceremonial parade was formed. A group of dignitaries walked at the very front of the procession and anxiously scrutinized the faces of the people in the street. All the people had gathered in the main square, pushing and shoving to get a better look. An

applause welcomed the regal procession. Everyone wanted to know how stupid or incompetent his or her neighbor was but, as the Emperor passed, a strange murmur rose from the crowd.

Everyone said, loud enough for the others to hear: “Look at the Emperor’s new clothes. They’re beautiful!”

“What a marvellous train!”

“And the colors! The colors of that beautiful fabric! I have never seen anything like it in my life!” They all tried to conceal their disappointment at not being able to see the clothes, and since nobody was willing to admit his own stupidity and incompetence, they all behaved as the two scoundrels had predicted.

A child, however, who had no important job and could only see things as his eyes showed them to him, went up to the carriage.

“The Emperor is naked,” he said.

“Fool!” his father reprimanded, running after him. “Don’t talk nonsense!” He grabbed his child and took him away. But the boy’s remark, which had been heard by the bystanders,

was repeated over and over again until everyone cried:

“The boy is right! The Emperor is naked! It’s true!”

The Emperor realized that the people were right but could not admit to that. He though it better to continue the procession under the illusion that anyone who couldn’t see his clothes was either stupid or incompetent. And he stood stiffly on his carriage, while behind him a page held his imaginary mantle.

What should have happened after the cry of the child and after the cry of the whole people? Should the emperor and his royal household have blushed, taken flight and admitted they had swallowed a swindle? Should the simple truth have changed the world? Whoever experienced the fall of 1989 is open for such an expectation.

Everything is really obvious in our world as in the fairy-tale: the constant weakening of democracy, the increasing social and economic polarization in poor and rich, the ruin of the social state, the privatization and economization of all areas of life (education, public health system, public transportation system and so forth), the blindness for rightwing extremism, the open and hidden censorship (one time as direct rejection and another time as quotas or format) and on and on…

But look what happens or doesn’t happen! If you ask me why I come to you with this fairy-tale you must ask why I stand here at all. I don’t read to you today from my latest book. In my last visit in this house a year ago, there were counter demonstrations to the neo-Nazi marches. The response of city officials was hardly worthy of democracy…

When a bank gains something, it keeps the profit. When it speculates, the losses are taken over by the community. None of the actors are punished or called to account. The only banker who appeared in court was the head of Hypo Real Estate as a petitioner and not as a defendant because several millions were due him.

Can it not be I’d like to ask the experts, that there are different interests, the interest of those who earn a living and those who pay? Couldn’t it all be that we don’t all sit in the same boat and that we all haven’t lived above our means?!

In the last ten years, real wages have fallen two percent. Ten percent of the German population possess two-thirds of the total assets. On the other hand, the poorer half of the German population (35 million people) only possessed 1.4 percent of the total assets in 2007, 103 billion Euros, less than the ten richest Germans in the same year, namely

113.7 billion Euros. This development is continuing. According to UNICEF, every sixth child in Germany lives in poverty. German Children’s Aid estimates the number of children living in poverty at six million.

We have accustomed ourselves that budgets are cut year after year in nearly all public areas, whether the Federal German government, the territories or the community. Less and less money exists for the public interests – even though our gross domestic product grew continuously for decades – except for a few years. While many calculate every cent, billions are pulled out of a sleeve at lightning speed on the other side for which the community has to answer.

What are the new assumptions? What are the new clothes? How were they made, shown to the people and admired for a long time?

In the DDR (East German time), I experienced the explosiveness of The Emperor’s New Clothes while reading an essay by Franz Fuhmann. He made fun of the nature of criticism in the country. A dirt- or grease mark on the emperor’s robe is criticized instead of people saying he has nothing on.

Criticism of the alleged grease mark only feigns criticism. It simulates opposition and is more state-affirming than any praise or justification of the status quo. Pseudo-criticism recognizes what doesn’t even exist…

Born in 1962, I witnessed in the eighties how the rulers fell more to the defensive from year to year. Free space for speaking, arguing and acting was enlarged little by little, book by book and article by article as with all free space gained by fighting in the daily routine. Although I couldn’t imagine the changes that came in the fall of 1989, I was certain transformation was on the horizon. I felt I was at the right place. I claimed for myself the role of the child who saw through the play. That wasn’t hard because most of those with whom I interacted saw similar things. Therefore we could make many jokes about the emperor’s wet underwear and his wrinkled pants in which he strolled about…

Then everything was fulfilled as in the fairy-tale. We cried: the wall must go! And the wall disappeared. We cried: allow the new forum! And the new forum was allowed. We

cried: democracy now or never! And democracy happened. We cried: the Stasi (secret police) must go! And the Stasi vanished – at least from the surface. We cried: free elections! And there were free elections. The cry that the emperor has no clothes on actually led to shocking him and his royal court. On their flight, they lost the insignia of power. This was interpreted as writing on the wall, that this state could not be helped any more and therefore had to join another.

Two aspects of the princely DDR state interest me above all. One is positive. The way the DDR ended is rare in history. That a heavily armed machine seemingly ready for all eventualities was ultimately pushed aside without wildly firing shots is a reason for joy…

No argument was a match against the promise “Prosperity overnight!” This trick worked. Power slipped from their hands. The time of a democracy when money and assets hardly played a role and it was possible to choose the new bosses in enterprises , schools, universities and theaters was over.

Instead of a unification of the two German states, there was an annexation of the East to the West. That means: forget everything that was. Learn everything that is. A whole national economy was thrown on the market. A region seventy to eighty percent de-industrialized remained. We are still paying for that today.

Nevertheless the hope for a better world was great and justified. After the end of bloc confrontation, the end of the Cold War and the arms race, money and power would now be available for the real problems of this world, for clean water, combating hunger, sicknesses and destruction of the environment. There wouldn’t be any proxy wars any more. Prosperity and education would gradually spread all over the world. What could now oppose this? Wasn’t this more than a hope? Wasn’t this absolutely necessary? Or did I succumb to a self-deception? Andersen’s fairy-tale deals with self-deception.

The king who worried about his wardrobe and not about the soldiers, theater or government affairs at least didn’t stand in the way of the well-being of the city. Many foreigners came to the city every day including two deceivers. The real story begins with them.

Andersen gives the two deceivers a clear role. They deceive and we don’t learn anything about the reasons. Perhaps they wanted to earn more than they could ever earn with normal weaving. Pe3rhaps they only wanted a little fun. As a reader, one doesn’t desire them on the gallows. They are smart types who studied the emperor, the royal household and the people. Their knowledge was their capital. They speculated on the weaknesses of society.

(From the start, Andersen makes us accomplices. As readers, we never fall into the temptation of asking whether the deceivers are really deceivers. So we can enjoy what happens as a spectacle – like the deceivers. We may strike our breasts and say that would never happen. We would never fall for that.) That the two are immediately granted a hearing with the king is not surprising. Their performance would have ended quickly if they had only pretended to weave the most incredible clothes. They invent a narrative for their product. Their clothes are woven to an image that promises something that had never been and actually can never be. A king in a fairy-tale can and should be astonished about that. The clothes are not only very beautiful. They possess the wondrous quality “of being invisible for those persons not fit for his office or are inexcusably dumb.”

This invention is cunning and clever. If one accepts this story, one knows what is right, what is wrong and how the world really is. Therefore viewing the world is unimportant. Only observing and judging the observers of the world is crucial. Under these presuppositions, what the observer says only explains something about the observer and nothing about reality. Thus if I cannot see that our society is just, I will not be questioned about my arguments. Why I find our society unjust will not be discussed. Rather I expose myself because it is established that reality is just. I was only asked because one wanted to know what I was fit for. Now everyone knows I am not fit for any office, am inexcusably dumb and wish to be back in the DDR.

“Those would be glorious clothes,” the emperor thought, “if I had them I could discover which men in my kingdom are unfit for the office which they have. I could separate the wise from the dumb! Yes, the robe must be woven for me at once!”

The emperor did not want the clothes because they would be very magnificent, as people could expect. The clothes did not interest him, only their power. This power would put him above all others – as long as only he knew it.

That no one was surprised about this offer of the deceivers is surprising. No one asked the foreigners to explain their standards for wise and dumb or with what technology they would bring about the wonder. It was made easy for both. They didn’t need start-up capital. They received that from the emperor.

Still the emperor had some anxiety… “All people in the whole city knew the special power of the clothes and were curious to see how bad or dumb their neighbor was.”

Whoever saw the television pictures of the fall of the wall or those scenes where DDR citizens climbed the fence of the German embassy in Prague, whoever heard the cry of the refugees persevering in the garden did not ask which system was better. That was obvious and seemed a self-evident truth, a voting with the feet.

What happened in Eastern Europe, particularly in Germany, had a symbolic effect for the whole world. Germany was and is the example in which the end of the Cold War was carried out. In the eastern European context, the picture of the wall’s fall relativized or trivialized everything else, whether Gorbachev, the Polish round table, the Hungarian reforms or the obscure pictures from the early Monday demonstrations.

The political implosion of the eastern bloc, the end of the Cold War and the end of that bipolar world order had consequences for all countries.

A widespread and officially revered mood at that time was expressed in two book titles at the beginning of the nineties. One was for Francis Fukuyama who revived the term “end of history” in 1992 and adopted it for the present (Francis Fukuyama, The End of History, 1992). If Hegel saw the end of history with the triumph of the ideas of the French Revolution in the battle of Jena, Fukuyama interpreted the Hegelian idea with Marx, Kojove and Marcuse against Marx as a kind of final synthesis in which the liberal Christian middle class, the West, became the determining authority after the fall of the Berlin Wall and the disintegration of the Soviet Union. In this worldview, the idea of socialism and communism – structurally brothers and sisters to Fukuyama’s strategic salvation expectation in an ironic way – became a kind of accident or sickness now to be remedied and awaiting its repair. Humanity comes to rest in a kind of natural state. Paradise is concretely near.

Samuel Huntington argues in a seemingly opposite way with his “Clash of Civilizations” (The Clash of Civilizations and the Remaking of World Order, New York 1993)./ After the end of the Second World War, he did not see western hegemony but the age in which the West would necessarily fall into conflict with Islamic countries and China. Both books have one thing in common. They see the West as a unity without contradiction. The West is the West. Adversaries have disappeared.

As someone from the East, I actually had the feeling of returning from the future (Boris Groys). Now there was only the present. When the future was previously filled by the official side, I had social expectations for the future and hopes for improvement. In 1990, this future was lost to us. We could only conceive the future as a possibly better today and no longer as something different. We had already arrived at the best of all worlds. Suddenly there was a victor of history. What the West had done was right and what the East had done was wrong. That would be decisive for the future.

What was already in an upwind under Reagan and Thatcher, the privatizations and economizing of all areas of life and a foreign policy that included the excessive use of the military encountered opposition and resistance and struck its limits. With the fall of the wall and the collapse of the Soviet Union, these limits disappeared and the resistance in western countries dwindled in an incredible way. The goal in which all political decisions were oriented was economic growth. As soon as a proposal or idea was suspected of hampering growth, it was dismissed both in the political arena and in most discussions. Politics existed to promote growth. Every problem had to first pass throu9gh the eye of the needle of growth if it wanted to be solved. The best means for creating growth should be an all-pervasive privatization, less state and more market. This meant, the more freedom, the more prosperity. Hardly anyone asked: freedom for whom? Freedom from what? Prosperity for whom? Words like capitalism, class struggle or profit maximization were avoided in conversation. Who earns from whom, who benefits and who is disadvantaged are regarded as crude and proof of vulgar thinking. Words and questions disappeared from the daily routine though they were more necessary than ever to describe the new reality.

Ideology regards facts as given like natural laws so we come to terms and arrange ourselves. This usage diverts from the political, social, economic and historical connections and questions and leads into fields where there is no questioning of the status quo, where all pressures are practical constraints and opposing interests only exist on the surface. This language makes nature out of history, a nature not in our power to change, with which we come to an arrangement and accustom ourselves.

The new rules of the game were assumed to be the only desirable rules and absolutized. Whoever does not accept these rules puts himself outside the discourse. Those who call profit “shareholder value,” those who sell their labor power “employees” and those who buy labor “employers” can join in the discourse. Tax cuts for businesses and entrepreneurs are called “relief of investors.” Reducing social security is stylized as “reduced benefits for those unwilling to work.” Burdening the poor is called “personal responsibility.” Cutting unemployment benefits becomes an “incentive for growth.” Lowering meager income is described as “global competitiveness” or “jobs policy in line with market requirements. Unions that urge industry-wide agreements become “wage cartels” and “brakes” and so on (Ivan Nagel, “Falschworterbuch,” Berlin 2004). “Language also guides my feelings and governs my whole mental being. The more self-evident, the more unconsciously I abandon myself to them.”

Preliminary decisions in my feeling, thinking and acting are made with the words I use, the language that I write and speak. The picture that I make of myself and the world depend s on the words I choose, the significance I give these words as an individual and the importance society as a whole gives them.

Whoever doesn’t see the new clothes is regarded as inexcusably dumb. Dumb wouldn’t be so bad. But inexcusably dumb means: you only make this mistake once and afterwards you are finished…

Above all we don’t need to speak of an unjust state. Everything done or attempted there is discredited and the matter is considered closed. The life work of eastern sisters and brothers is acknowledged but was really a vain labor of love. Some things were simply better and more meaningful than they are today. In the past, there was a uniform labor law, the right to work, a modern family law, a free public health system, exemplary cancer statistics, child- and youth care and administrative costs of the uniform social security at 0.35 percent. Today these costs are at seven percent.

According to its own official self-understanding, the West in its concrete form did not face any counter-veiling design any more. We arrived at a world without alternatives. Democracy, freedom, social justice and prosperity only seem able to exist in a market economy with private ownership of the means of production. “Therefore there is no reason for the old-new attempt to bring a new variant of anti-capitalism into the debate.” So Joachim Gauck summarizes his understanding of freedom today.

One could marvel why the implosion of the East could have banished any alternative to the status quo from the social consciousness. Command socialism in its congealed form was never understood as an alternative – at least not by the majority of people who had to live in it. This was an underage state, not a democracy. Freedom and democracy were the demands of the fall 1989. There were no signs, slogans or megaphones for privatization. There was no demand to abolish the right to work. Why shouldn’t freedom and democracy be possible with social ownership of the means of production? At that time, this question was raised by a few but was hardly heard in the liberal democratic machine. In the German basic law, there isn’t one paragraph that speaks of the private ownership of the means of production. In 1947, the newly founded CDU party (middle class Christian-Democratic party) saw a threat to freedom and democracy in big industry and corporations. In its 1947 Ahlener party program, the CDU formulated: “The capitalist economic system has not done justice to the political and social life interests of the German people. Only a reform as a result of a criminal power politics is possible after the dreadful political, economic and social collapse. The substance and goal of this social and economic reform can only be the well-being of our people and no longer the capitalist striving for profit and power.” Holding such ideas after the fall of the wall was unpardonably dumb.

We left the fairy-tale when everyone in the city knew about the new clothes. The story ran in the sense of the deceivers. Their version has conquered the interpretation horizon. Can one expect anyone, even the best man in the whole state, to speak against public opinion? Wouldn’t he expose himself to the suspicion of being unsuited for his office and of being inexcusably dumb?… “All people in the city spoke of the glorious clothes.”

The non-existent clothes are given the “highest applause”! The princely state is enraptured. Andersen describes how a calculus – threaded skillfully and self-confidently – can take possession of a society against all experience and probability, even against all appearance and verifiability.

“The goal of capitalist production is production of the highest possible surplus value or profit through intensified exploitation. “ “Appropriated profit” appears in a little box from which there are arrows left and right. Left is “for personal goals/ luxurious life” and right is “capital for the purchase of new machines so more surplus value can be constantly gained.” “On punishment of his own destruction, every capitalist is forced to modernize production and fight other capitalists. This competition brings about a constant intensification of exploitation. (!) That is the “wolf law of capitalism,” Dr. Bartmann explained. Under the wolf law, the “battle over sales markets and raw materials, wars and neocolonialism is waged.

The discovery that profits are privatized and losses socialized could be a heading for the last twenty years. Private wealth was never so great and public indebtedness was never so high. Today we are indebted with 2.03 trillion, 24,700 Euros per capita according to the League of Taxpayers. (The indebt5edness of the DDR in 1999 amounted to 20 billion D-marks according to the German Central Bank, 1,200 D-marks per capita.)… We need a few hundred billion to bailout the banks. Why not ask whether the lacking revenues of the state drive it into indebtedness and crisis?

Our community was and is driven systematically against the wall by democratically elected representatives of the people since it is robbed of its revenues. The top tax rate in Germany was lowered by the Schroeder government from 53 to 42 percent. The corporation tax was cut nearly in half between 1997 and 2009 from 57.5 percent to 29.4 percent. The tax on capital gains was reduced to 25 percent. The inheritance tax was also partly cut…

When the treasuries are empty, even more assets must be privatized. Jobs must be cut, services privatized, sponsors found, swimming pools and libraries closed, fees in the music school raised etc. etc. Those who must watch every euro are affected.

The call for a sleek state is another variant of weakening the community. Who wouldn’t want a de-bureaucratized state, a trim and beautiful state? The neoliberal propaganda divisions – the Initiative for a Social Market Economy should be called the Initiative for New Clothes – successfully passed off this ideal of beauty to the public because like every half-truth it includes legitimate criticism. Bureaucracy can block democracy. But what is not said is that the weakening of the state leads to a loss of competence. The administration of the community loses experts or cannot pay them any more. Still in a marvelous way, assistance stands impatiently at the door…

Lobbyists work in the ministries in the function of officials. They collaborate on laws – that should actually regulate their businesses. If you searched “lobbyists in ministries” on the Internet or read the book “The Purchased State.” You could discover which businesses put their people in which ministries. When a lobby association pays money to an official so he accomplishes something in their interest, that could be punished as corruption. When a lobbyist is sent to a ministry and given the status of an official, that is described officially as “changing sides” and is an element of the Red-Green government strategy “Modern State and Modern Administration.” But that cannot be called exchange. While “more than 100 corporate representatives sit for years at desks in Federal German ministries, twelve officials are granted a short education trip in the free economy” (Sasha Adamek and Kim Otto, The Purchased State Der gekaufte Staat. How corporate representatives write their laws in German ministries, Koln 2009, p.15)…

Leased or contracted officials receive their salary. If officials pocket money, that would be corruption. But a corporation disguises this under the mask of a government ministry. Independent control by independent officials was long a guarantor for the functioning of a democratic administration oriented in the common good. That doesn’t seem true any more…

Perhaps an explanation can be found that the noise protection of the country is subject to the transportation- and economics ministry, not to the environmental ministry. Some approvals of night flights were not legal. For a fundamental change, the contracted officials must be sued. The community is in checkmate in this case…Whoever describes this as democratic really admires the new clothes of the emperor…

Examples for the new clothes of our community can be found in every area of our life. There is hardly an area that can be protected from privatization, commercialization or striving for profit. This is especially bitter in the public health system and education.

The new assumptions that gained hegemony at the beginning of the nineties are in force today unchanged. A politics that may propagate the logical nonsense of “decisions without alternative” is derived from a world without alternative.

As absurd as it seems to us that everyone in the fairy-tale admired the new clothes, we accept the daily news that governments must “soothe the markets” and “regain the trust of the markets.” In this case, markets mean the stock exchanges and financial markets, those actors who speculate in their own interest or in the commission of others to make the most possible profit. Are they the actors that relieved the community of untold billions? Should the highest representatives of the people wrestle for their trust?

We must be thankful to Angela Merkel for the term “market-conforming democracy.” Our democratic constitutional order is the reference point. The analogy to Putin’s “guided democracy” is obvious. If the big media had been more attentive, they could have asked the German chancellor to clarify this term. But that was not demanded of her. Market-conforming democracy is the most beautiful of our new democratic clothes in which no one takes offense.

Democracy is turned upside down. This is regarded as a foregone conclusion. Must not the actors on the stock exchange try to regain the trust of the community? Aren’t democracy-conforming markets crucial rather than market-conforming democracy? Democracy-conforming markets would be markets on which everything that brings money from dubious financial products to speculation with food is not allowed.

Championing this unmasks me as inexcusably dumb and unfit for an office.

But demanding democracy-conforming markets is also a question of life and death. Our daily routine is marked by a murderous ambiguity. What leads to impoverishment, un-freedom, sickness, discrimination and exclusion costs human lives elsewhere.

After the heads of government of Euro states met in October 2008 and earmarked 1.7 trillion euro to revive credit transactions among the banks, the same countries as a resu9lt massively cut their allocations to relief organizations and credits for the poorest countries. The World Food program of the UN entrusted with emergency food relief had a budget of six billion dollars. In 2011 the World Food Program was cut to only three billion dollars. This meant: the school lunch program of a million malnourished children in Bangladesh had to be cancelled. The 300,000 Somalian refugees only receive a daily ration of 1500 calories instead of the subsistence level of 2200 calories.

If $13 to $18 billion had been invested in so-called renewable raw materials before the housing crisis, they would have become $600 billion in 2011. Speculation with food in which all big German banks including savings banks participated ensured and ensures drastically higher food prices. Here and there the prices doubled within a year. On the Frontal broadcast (8/24/2010), a German representative of the UN relief program said the number of starving persons rose by 100 million in 2009. But the agricultural subsidies of industrial states are also among the main causes of hunger in Africa. The agricultural subsidies of the EU in 2008 amounted to 55 billion and had the result that vegetables and meat from Europe could underbid local producers by a quarter to a third of the price. This leads to the ruin of local agriculture with the well-known consequences.

While one hand spends and provides economic aid to developing countries, the other hand increases its own profit. Despite all protests, two kinds of measurements are used, a schizophrenia that has tradition. Benjamin Franklin and Thomas Jefferson were authors of the Declaration of Independence of the United States of America of July 4, 1776 in which universal human rights were laid down. When Jefferson died in 1826, he left to his heirs full rights to more than 200 slaves along with great estates in Virginia. The Declaration of Independence begins with the famous sentence: “We hold these truths to be self-evident that all persons are created equal, that they are endowed by their Creator with certain inalienable rights including the right to life, liberty and pursuit of happiness’

Jean Ziegler, the Swiss journalist who was the special UN ambassador for the right to food, emphasizes the so-called millennium goals set by the member countries of the UN in 2000: cutting in half the number of starving persons, ensuring elementary education, strengthening the rights of women, reducing child mortality, improving the health care of mothers, combating HIV/Aids, protection of the climate and global development and partnership between West and South. The balance turns out pitiful. The number of hungry persons is rising according to UN statistics from 785 seriously and permanently malnourished persons in 2000 to 854 million in 2008. Afterwards the crisis and speculation with food aggravated the situation so that a billion were counted in 2009.

Here are two more numbers. In 2008, 500,000 women died in sub-Saharan Africa in their delivery. In 2003 twelve million children were orphaned because the effective Aids medicines were unaffordable for Africa. In 2010 they were 18 million.

Ziegler’s examples could be continued. I will add one more. The computer on which I write these lines is the handy that I carry in my pocket equipped with that rare metal tantalum (mined in the east of the People’s Republic of Congo under the most horrifying conditions. That is so cheap that it knocks off all competition. These devices were assembled by people who can only dream of a 60-hour week.

Ziegler asks: “What is the reason for this blindness? Why this indifferent arrogance while hundreds of millions of people are indignant about the double standards and deny the West’s right to moral hegemony?

He answered cautiously – as though he was scared of his conclusion: “I formulate a hypothesis,” Ziegler wrote, “the collapse of the Soviet Union, the discredit in which the communist idea fell, created a black hole. The (obviously necessary) fall of the Berlin Wall buried all emancipation perspectives and even driven out all ideas of protest. (…) Since the fall of the wall, the idea of another world order, another memory and another will is discredited.”

Some may call this paradoxical and others logical or a foregone conclusion. The self-liberation of the East , the adoption of capitalist production methods and the possible globalization of the economy have unleashed a striving for profit that up to now had no proper political countervailing power. Proper means firstly internationalized at least as much as the corporation and secondly at least as self-confident and decisive as the corporation. Given the plundering of whole states, one could refer to the well-known footnote from Kapital: “Capital has an anxious nature and flees tumult and conflict. That is true but is not the whole truth. Capital has a horror of the absence of profit or very meager profit as nature abhors emptiness. Capital is bold and daring with corresponding profit. At ten percent, capital is confident and applied everywhere, at 20 percent it is lively, at 50 percent daredevil, at 100 percent it tramples all human laws under foot and at 300 percent no crime exists that it doesn’t risk, even the danger of the gallows. When tumult and conflict bring profit, it will encourage both.”

Two surprising conclusions resulted from a study of ETH Zurich that investigated the linkage of corporations with one another through partnerships. 1318 corporations exercise control over all 43,060 international firms… As the second surprise, banks and insurances occupied places 1 to 49. One doesn’t need to apply conspiracy theories…

Andersen’s story capsizes at the peak of approval. The emperor strolls around in the splendor of his new clothes. Then it says: “No clothes of the emperor had brought such happiness. `But he has nothing on,’ a little child said at last.”

But how can one be happy when one cannot trust one’s own eyes any more?!! A little child trusts his eyes uninhibitedly. The child wasn’t infected by the adult’s way of looking at things… The father’s sentence “Hear the voice of innocence!” follows the cry of the child. This father-figure only has this one sentence. But he is the hero of the fairy-tale. This fairy-tale father does something great. He testifies for the witness. He is the one who really risks something. The child would have been laughed at or insulted. But the father who takes up the cry of his child risks his middle class existence. If he had an office, he would now prove unfit for it. His fellow-citizens could call him inexcusably dumb and outlaw him. However what distinguishes the little child and his father from the others? They trust their five senses. This is not surprising with the little child. It is not self-evident with the father. He shows courage. More importantly, he takes himself seriously. That seems to be the hardest thing. The other adults remain in denial and diversion. They continue prattling and whispering among themselves. Later they first become articulate as a choir in which the voice of individuals cannot be heard any more. The whole people cried: “But he has nothing on!”

A third discourse could be written about the following two sentences of the fairy-tale, the final sentences. The emperor is seized by what his people say… This emperor understands that he must now hold out with his whole royal court. The emperor could emerge as a broken man. But he could also rise to a despot, an Orwellian figure who insists on the reality of his new clothes against his better knowledge and ready to enforce his truth with all means… The final sentences of the fairy-tale formally provoke a continuance. Therefore it is a very good ending.

It is not the cry of the child alone that ends the apparition. Think of the framing narrative “A Thousand and One Nights.” It wasn’t Scheheras alone who saves herself from death by telling stories. Rather she was only able to do this because her sister Dinarased encouraged her to tell stories, praised her for the stories and said she knows how to tell precious things.

It seems obvious to me that at least two persons are needed to oppose what everyone knows and where everyone is convinced. The father didn’t open his mouth by himself and the little child would presumably have been laughed at.

As readers, we are for the child. “Finally someone says the truth!” Who wouldn’t accept for himself the role of one who says what is? Ultimately asserting the truth convinces the deceivers.

But isn’t it a presumption to want to own the truth for oneself? Andersen may have been sure that the emperor had no clothes on. But who ensures us that our eyes do not deceive us? We have never seen Einstein’s curved space which is obviously not less real that what we believe we see.

In everyday life as in writing novels, making clear one’s presuppositions is always vital. I have certain needs, interests and rights that make my life worth-living and that entirely or partly agree, collide or don’t touch the needs, interests and claims of others. If Andersen’s two deceivers had been forced to formulate their interests, they would probably have lied and said: we want to sell the emperor clothes so he could see who was fit for his office and who was inexcusably dumb. One could have said what use are these clothes if no distinctions can be made through them, if everyone would be suited for the office and if no one were dumb. Or don’t they function?

Asked about my interests, I would say: as a citizen of this country, I depend on democracy to lead a self-determined life. But democracy means above all a community able to do justice to its responsibility. If the financial means or the proper personnel are lacking, democracy puts itself in question. Therefore representatives must be elected who see the interests of the community and protect it from plundering. Representatives are needed who are willing and able to prevent a market-conforming democracy and create democracy-conforming markets. Representatives are necessary for whom freedom and social justice are inseparable – not only on the national plane. A majority is needed who want and demand this.

A year ago there was a popular initiative that represented the first step to a re-communalization of the Berlin waterworks. In 1999 the red-black German senate sold the waterworks to RWE and Veolia. The non-public contracts provided profit guarantees for the private parties. Beside other fatal consequences, the Berlin water prices rose on average 30 to 35 percent. The popular initiative had to be carried out against the resistance of the red-black German senate. The miracle happened despite the political headwind of a frighteningly disinterested media. A people’s decision was finally won after several interim stages although the activists’ budget was 25,000 euro. What is shattering is that this initiative had to be put through by a dozen vigilant democrats against the whole democratic machine. Resolutions of democratically elected representatives had to be cancelled. The cartel office had power to lower Berlin water prices 19 percent. The community, in this case the Berlin senate, could have simply said: Clean water is a human right that we will not hand over to the private zeal for profit. I experienced another example here in Dresden two years ago when the neo-Nazi march was successfully prevented for the first time. Two years ago the official idea was to set a sign with the human chain. Discrimination against others made me skeptical against this action at that time. As one read in the local press, the new city was abandoned to the right, the left and the police so they could clobber one another. That the neo-Nazis were blocked from marching made us happy despite non-approval of these counter-demonstrations and despite the confiscation of computers and materials of the organization. How long it took the police and city administration who should have been observing and controlling to see made us unhappy. However the main thing was that the blockades held and now obviously have become a tradition to prevent neo-Nazi marches.

I am at the end of my address. As you see, I had nothing new to say. Taking ourselves seriously again, formulating and demanding the interests of our community and seeking like-minded activists were central. What we call the general public begins with our language. We must demonstrate our will through gestures and symbolic acts on the streets of Dresden and in the popular initiative in Berlin even against the resistance of democratically elected representatives when necessary. We should not have a low opinion about the influence of gestures and speeches on the state of the general public. Producing pressure beyond the symbolic is ultimately crucial. We need to liberate the cry “We are the people!” from the museum. We are the sovereign. In the fairy-tale, the emperor was so naïve, light-minded and vain that he gave money, silk and decorations to the deceivers but couldn’t be happy in his new clothes.

The shock of self-knowledge could lead the sovereign to become more critical in the future in choosing his clothes and paying more attention to his real clothes. Perhaps the shock would be so deep that he would also be concerned about his soldiers and the theater and think things over. Much depends on becoming the god-uncle of the little child and becoming his advisor. The two deceivers were arrested and brought back to the city where a triumphal reception met them. The emperor who appeared one last time in his underwear and the obsequious that bent down a last time congratulated the deceivers on their trick…

My dear ladies and gentlemen, I have taken myself so seriously that I entrust you with this speech. I thank you for your time, your attention and your patience.

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