Fear and blackmailing always belong together – Published on Current Concerns no. 20, by Frank Schäffler and Norbert Tofall, October 2011.
The present attempt to create a European super-state by stirring up the fear of a collapse of the financial system and by collective breaches of law with respect to the European contracts will have the same disastrous consequences as those produced by Bismarck’s blood and iron politics win the establishment of the German Reich. Bismarck’s pre-modern policies were, at short notice, successful in certain respects, they contradicted however the requirements of a modern society and a civil culture, which was to secure the “freedom, equality and independence” (Immanuel Kant) of the citizens.
Unfortunately today, we are observing again the same formal error of political methods. Due to their “excessive demand on open stage” (Peter Sloterdijk) our European governments drop back into pre-modern political methods when fighting the insolvency crisis of states and banks. We believed to have overcome these methods since long by our liberal foreign policy. We have a liberal Minister of Foreign Affairs in Germany, but liberal European politics, which meets today’s requirements and demands of modern society and civil culture, cannot be recognized anywhere. The following article it is not about Angela Merkel’s fear of freedom (since spring 2010, she has pursued a European policy which destroys freedom and civil rights.) What is of concern to us at the moment, is rather the fear which is presently being spread all over Europe while fighting against the insolvency crisis of states and banks by pursuing a policy which is hostile to freedom.
Fear has always been a bad advisor, but politics have always been made with fear, as well. Those who are unscrupulous enough to use the fears of his fellow men and who have the possibility to influence the mass media can enforce their special interests at the expense of the public, especially in situations in which people are afraid.. And for this reason the largest obstacle in fighting the insolvency crisis of states and banks and in securing a market-economic monetary order is the fear of an entire collapse of our financial system.
Especially in autumn 2008, most people in Europe have been very afraid of this and all decisions concerning the fight against the financial crisis have been influenced by this fear. And therefore it is also this fear which endangers the free-market economy and the rule of law in Europe considerably more than a real collapse of our financial system would do, for he who is afraid can be more easily blackmailed. Fear and blackmaili always go together … //
… The reason why the fearful western societies equate a collapse of our insolvent bank system with a break-down of all transactions is the fact that we stopped to think systematically. If we follow the claim of Walter Eucken to regard the equalisation of interests in the private and public sector as a regulatory task of politics then this ordo-liberal aspect leads us up to separate the single interest of the banks to be protected from insolvency and thus to be privileged from the common public interest to maintain financial transactions. The analytic distinction between bank insolvencies and the maintenance of transactions and the consequent orientation at the common interest, which is the maintenance of transactions enables us to recognize how the blackmailing potential of the banks can be invalidated by a simple scenario.
- First of all: The resolution of the G20 to prevent insolvencies of system-relevant banks must be revised.
- Second: The governments’ answer to the banks’ blackmail is to tell them to submit an insolvency request to the court: Yes, please! Go ahead!! A free-market economy without insolvency judges is not a free-market economy.
The same law is valid for banks as for other enterprises.
- Third: The state provides a warranty for the private savings deposits at the insolvent bank and for the credits lent to enterprises by the insolvent bank. However, a warranty is not provided for the insolvent bank’s liabilities to other banks which do not concern accounts of private customers but concern other banks directly.
- Fourth: An insolvency administrator takes over the responsibility for the insolvent bank and ensures that all payments, for which a national warranty is provided will be duly accomplished. The refinancing of these payments are being made as at present by the Zentralbank. The transactions will be maintained with attention to these four basic elements of a scenario for bank termination, because: by an insolvency request the computers in this bank are not turned off at the same time and the staff is not dismissed. The legal termination of this bank is determined by an insolvency request of a bank. The transactions do not break down immediately in case of an insolvency request of a bank even if the domino effect might cause the termination of other banks. It will not cause a run to the banks if the state provides a warranty for certain payments and if the described scenario is understandably communicated to the public by the mass media so that citizens do not have to be afraid of the termination of the Deutsche Bank and the Hypo-Real-Estate. In this scenario it is impossible that the state provides a warranty for all liabilities of the insolvent bank however not for liabilities, which exist directly towards other banks, by which naturally we do not mean the accounts of customers of these other banks.
… (full long texts).