Anglo-American “Hard Capitalism” Throws Down the Gauntlet to German Capitalism: conform or else….

© Terry Boardman

This article first appeared in the German magazine Info3 (Feb. 2000 issue) under the title “Für eine “biodynamische” Ökonomie”  (For a Biodynamic Economy)




An interesting article appeared in “The Independent” of 6th December, written by Andreas Whittam-Smith. He was the first editor of the paper when it first came out in the 80s. The article was titled: “Mr Schroder [sic], it’s not the British, but you who has let the euro down.” Under the picture of Whittam-Smith was a quote from the article: ‘What’s under threat is Germany’s softer, kinder form of capitalism – consensus capitalism.’ Accompanying the article was a large photo of  Gerhard Schroeder’s head as he was  making a speech, his head framed not by a halo but by the German iron cross (attributed to Christof Stache/AP).

The article starts by saying why the Germans had been reluctant to abandon the D-mark – memories of the hyperinflation of the 1920s and went on to describe how Germany had insisted that other EU members tighten up their fiscal situation to guard against inflation. It then says that in fact inflation hasn’t been a problem in the 90s, and suddenly introduces the following sentence: “What’s under threat is a very German form of capitalism. It is a  softer, kinder, less demanding and more protective  form of capitalism than the Anglo-saxon version. Under its rules, it is difficult to declare workers redundant. And the Germans don’t wish to give it up.” Whittam-Smith goes on  about the  Vodafone hostile takeover bid for Mannesmann which was criticised by the German Chancellor, and says: “But foreign investors saw the matter differently. They perceived the Chancellor as disapproving of  an attempt to consolidate and strengthen the European mobile phone market at a moment when the old Continent has a world lead in the use of such technology, which in turn is at the centre of the industrial revolution through which we are now passing. They saw this as a crippling lack of enthusiasn for open markets.” [which foreign investors, we can ask ourselves?]. He goes on to mention the criticisms of the German position made by Wim Duisenberg, Dutch president of the European Central Bank, who said that the German action rejecting and criticising Vodafone’s bid  “… does not enhance the image we want to have of being an increasingly market-driven economy across the euro-area.” [who is "we"? the reader may ask]. Whittam-Smith then referred to an ambiguous remark allegedly made by Herr Schroeder to the effect that, in view of  Britain’s “intransigence” over the European withholding tax which the British government rejects: “if all else fails, one may have to resort to national solutions.” Scornfully, Whittam-Smith points out that Germany, the country that  sought to impose Europe-wide limits on national governments’ abilities to tax and spend is now considering “going it alone”. “One analyst”, he writes, “said: ‘This isn’t so much Fortress Europe as Schloss Deutschland.”[which analyst? One Andreas Whittam-Smith perhaps? Unattributed comments are so useful in journalism; you can pad out any number of articles with them].

Then, as the British say, he gets to the beef, what he really wants to say: “The problem for the 11 countries comprising the euro-zone, of  which Germany is the largest, is that the Anglo-saxon business model is not simply a theoretical concept that individual nations can choose to disregard. It is the ruling ideology of money managers around the world, who control and direct capital flows. The expected behaviour of interest rates and stockmarkets are naturally major influences on the way international funds are invested, but countries and currency zones are also rated on their adherence to the principles of hard capitalism. On this last criterion the euro-zone gets an increasingly poor mark [note the schoolmasterly turn of phrase]. The result is that since 1 January $480bn of capital has been withdrawn from Europe while only $230bn has gone in, leaving a huge net deficit. This is the technical reason why the euro has been weak.” To put the final intellectual boot in, while acknowledging that there have been some better economic statistics in continental Europe recently, Whittam-Smith argues that unemployment there is likely to remain high and cites President Clinton’s recent “boastfulness” about American economic statistics and low unemployment.

Now what is the context for these remarks? At the end of the last century in November 1999 we witnessed a major international protest against neoliberal, that is, predominantly “Anglo-saxon”, economics in Seattle which has resulted in the collapse of the WTO talks. Even Clinton felt it necessary to make remarks in acknowledgement of the protesters’ demands. It is this very “Anglo-saxon” model that is driving the kind of hard-edged globalisation which the protesters in Seattle and their sympathisers throughout the world opposed. The Independent’s line on foreign policy – and this issue is by no means only an economic one; it goes to the heart of the question of control over the destiny of Europe – echoes that of “The Economist”, the proud herald of what is called the “Anglo-saxon” neoliberal model of capitalism. Both newspapers’ views on foreign policy in turn echo those of the Royal Institute of International House (Chatham House), which has for decades been the principle source of ideas for  the British foreign policy elite. Journalists, particularly from “The Economist”, circulate around the British broadsheet media which are read by so-called ‘opinion-formers’. Hamish Macrae of “The Economist” regularly writes on economic matters for “The Independent”, for example. At the height of the Gulf Crisis in early 1991 “The Economist” used to refer to  George Bush as ‘our friend’. Bush, you may remember, was the President who promised in his inaugural speech in January 1989 to work for “a kinder, gentler America”. Just two years later he was leading a massive crusade against Saddam Hussein and proclaiming the arrival of the New World Order. In the 1990s millions all over the world have experienced at first hand the economic dimension of that New World Order, and it  was precisely this model of economic behaviour  which was being objected to at Seattle. It is a model that puts the self-centred desires of shareholders before the interests of consumers, workers, and the society at large. It is a model that is based on the desire of the individual (manager or shareholder) for self-aggrandisement. If I wish to take over a company in order to make my company more successful, I simply gather the requisite amount of funds with which to tempt the shareholders of my intended victim and announce to that company’s management that I intend to take their company over whether they like it or not.

In the 1990s we have seen the end of the Cold War and the triumph of what are called by newspapers like “The Independent” and “The Economist” ‘Anglo-saxon’ values of  ‘freedom’, ‘choice’, ‘diversity’ etc. Yet here in Andreas Whittam-Smith we have a representative of what one might call a propaganda organ – “The Independent” -  of the New World Order speaking insidiously about “the ruling ideology of money managers around the world” and countries being “rated on their adherence to the principles of hard capitalism.” This is enough to make every decent conspiracy theorist cheer: “you see, there IS no difference between Marxists and capitalists, just as we’ve always said!!” Just as citizens of communist countries were required to toe the Party’s ideological line, capitalist countries today are called on to demonstrate the required degree of obedience to the principles of Anglo-saxon economic ideology. If they do not, their economies are blown off course into the Bermuda Triangle or else suddenly find themselves becalmed in some economic Sargasso Sea as happened to the Asian economies in 1997.

And who does the blowing and becalming? According to “The Economist” and friends, the “democratic market-driven” Anglo-saxon model means that it is “the blind hand of the market” that determines investment decisions – the sum total of millions of decisions made by millions of investors. Well, yes and no. There are millions of investors, yes, but most of them act like seagulls following big ships; they make their decisions by shadowing the actions of the big institutional investors. Occasionally, economics and business correspondents in the “Anglo-saxon” media even admit as much. Those big institutional investors are headed by how many individuals? – Not many. Several hundred at the most perhaps – the same sort of number that congregates at  meetings of the secretive Bilderberg Group that is widely recognised as having paved the way for the Single Market and the Single Currency. These are the same  group meetings to which the only members of the media allowed to attend  – as rapporteurs – are  staff of “The Economist”. In other words, significant movements of “the market”, such as the sharp decline in inward investment into “Euroland” this year or the drastic withdrawals from Asian stocks in 1997-8 may in fact well be orchestrated by elitist groups that are far from ‘democratic’ as “The Economist” and “The Independent” would have us believe. There is then no alternative allowed to the hard capitalism of the Anglo-saxon model – no freedom, no choice, no diversity. No country or group is to be allowed to operate any other form of capitalism, least of all a “softer, kinder, more consensual” form.

Is it not interesting that of the developed countries, it should be Germany that offers resistance to this Anglo-saxon model? Despite the fact that there is indeed a strongly communitarian strain in British society, a strain that has fed the development of the Labour Party in the 20th century and to which even “One Nation” conservatives like Edward Heath and Tony Blair appeal, the strain of self-centred individualism in British culture is, if anything, a good deal stronger and more tenacious. At the end of the 20th century, the atomism inherent in this strain is indeed threatening to rip the fabric of  British society apart slowly, seam by seam, as adherence to traditional Christian morality has declined. Let us look at a couple of remarks Rudolf Steiner made on this question of Germany and Britain. Because of the dominant strain of individualism in their culture, the “Anglo-saxons” have not been able to do  otherwise than develop the kind of economic ideology they have. Rudolf Steiner said as much when he urged his listeners not to condemn the British for the Opium Trade:

“…just as it would be nonsense to underestimate English life or English culture – English civilisation – so it would be nonsense to believe that something of this sort (the Opium Trade) could have been avoided in the overall context of  English evolution. It belongs to it.” “What was won at that time (of the Opium Wars 1839-42, 1860-62) belongs now to the whole configuration of the British Empire….if you want to judge the yield of the Opium War you must look at it as a whole. Then you will see that what has grown out of those millions – after all this has been going on for a century – is something which is preparing to rule the world, to overrun the world; that is what may be found in what was won at that time!”

The Opium Trade and subsequent interventions in China were the first occasions of significant Anglo-American collaboration in overseas economic issues. Hard-edged laissez-faire capitalism, “red in tooth and claw”, was the dominant economic ideology in Britain at the time. This kind of thinking that led the British and the American opium merchants to demand their rights at the expense of anyone else’s is what Whittam-Smith calls “the ruling ideology of money managers around the world”. Nothing has essentially changed in Anglo-American economic thinking since the 1840s. Socialism arose as a reaction against the injustices and immorality produced by just this kind of economic ideology, but socialism was taken too far and out of it came the monster of communism. The 20th century was dominated by the struggle between the Anglo-American-led capitalist bloc and the Russian-led communist bloc, and now that that struggle has ended with the demise of the communist bloc, we are back to where we started – and it would seem, in the Anglo-American countries, little the wiser, judging by the likes of “The Independent” and “The Economist.” Even the foreign policy paradigm has returned to the multipolar realpolitik of the age of Metternich, Henry Kissinger’s idol.

One can sense in Whittam-Smith’s words a kind of suppressed gloating – the intimation that it is pointless for Mannesmann, for Schröder, for Germany to resist the inexorable march of the Anglo-saxon economic legions. If they do, well, it’s off to the Bermuda Triangle or the Sargasso Sea with them – they will only ruin their own economies. But Whittam-Smith and those who think like him may find their prognostications dashed in the long run. 80 years ago Rudolf Steiner pointed to the historical fact that action in the material world is dominated by the principle of dualism. When a domineering principle arises, it cannot but call forth its opposite. He described how three major cultural impulses have arisen in Europe that mirror the thinking of three distinct historical epochs, namely, what he called “the hierarchical theocratic cultic” element, which stemmed ultimately from Egypt and recreated itself in the Roman Catholic hierarchy in the Middle Ages. This was followed by “the  diplomatic,.political, and military element”, a continuation of the impulse of the Roman Empire, which came to expression in the efforts of France to dominate Europe under Louis XIV and Napoleon, and then finally “the commerical economic element”, which is truly of the modern age, and stems from Britain. Each of these three elements has sought in its time to dominate Central Europe; each has succeeded for a time, but each has ultimately failed. The Egyptian-Papal spiritual element was pushed back first by the Minnesänger, by Walther von der Vogelweide, by the German kings and then by Huss, Luther and the Reformation. One can see how an important stream in British life – that of  Wyclif and the British Protestants – helped in this; Henry VIII could not have separated England from Rome if there had not already been a substantial anti-Papal tradition in English spiritual life. Protestant England, a major power, became a source of inspiration for Continental reformers and protestants. Secondly, the Roman-French military impulse was repulsed first by the Swiss and then by the Germans, assisted again of course by the British; Austria, Prussia and  Britain provided most of the opposition to Napoleon, even though it may have been Russia that broke his back. The Anglo-American commercial economic element that now seeks world domination will in its turn inevitably be resisted by Central Europe as the other two domineering principles have been. German resistance to that domination played a significant part in the process that led to World War One, as it had become clear to the rulers of the British Empire that their global hegemony in industrial and commercial terms was being threatened.

Today Germany is again the main economic force in Central Europe and cannot but become the focus of attempts to resist Anglo-American dominance. Steiner went on to say that in each case the resistance to the dominant principle took on the nature of  that principle. The Papacy was resisted spiritually. The French were defeated militarily. Likewise the Anglo-Americans will be resisted economically. Germany’s catastrophic error in 1914 was to resist British economic imperialism by recourse to war – the means of the previous age. On the contrary, the resistance of Central Europe ought to be based on new economic ideas, and these ideas need to be drawn from the spiritual life of modern humanity. At present, this is not the case. The “softer, kinder, consensual” German capitalism referred to by Whittam-Smith is based not so much on modern spiritual impulses as on social elements within German history, some of which – the strong craft tradition, the feeling for heimat and  locale, the respect for bureaucracy -  go  back to the Middle Ages or the 18th century. If Germany is to lead Central European resistance to Anglo-American “hard capitalism” – and it is clear that this is what the Anglo-American elite and their representatives expect – it is vital that the approach to economic life contained in the idea of social threefolding which has been nurtured within the anthroposophical movement should no longer be discussed only within anthroposophical circles but should come to the forefront of  debate in wider society. It is surely Central Europe – with its patchwork quilt of nations, regions, and communities – that has the task of integrating the principle of fraternity into the world’s economic system which until now has been dominated by the principles of  liberty and equality so strongly espoused by the Anglo-Americans. Their self-centred approach to economic thinking has been determined by the natural insularity of the British (and also, arguably, of the Americans) and hence the atomistic idea of individual self-interest: everyone should have an equal right to exploit everyone else.

If Central Europe is able to integrate fraternity into economics without recourse to state intervention as in the discredited socialist model, it will find that, as in the past, it will receive a great measure of support from a substantial stream, even if not the majority, within Anglo-American culture itself. At the end of the twentieth century, as the representatives of Anglo-American “hard capitalism” met in triumphalist mood in Seattle, the city of Microsoft and Boeing, to map out the next phase of  their global domination, they were brought up sharp by the resistance of this underground “protestant” stream from within their own culture. Yet just as the really new ideas that challenged the Papacy came from Central Europe, and just as the really new ideas that challenged French cultural domination came, not from Britain, but from Central Europe (from Goethe, Schiller, Fichte and others), so the new ideas today will also have to come from Central Europe and be taken up by those outside it. To be an organic farmer is to say “No” to chemicals and fertilisers; it is a good but essentially negative stance. A more creative step is to be  a biodynamic farmer and  to farm on the basis of spiritual knowledge and insight, on the basis of the fraternity of the spiritual and earthly worlds and their mutual interaction. We need “biodynamic thinking” in economics today – indeed a “softer, kinder, more consensual” economics that serves society as a whole, and that puts  customers and workers at least on a par with shareholders, if not above them. The main impulse for this kind of economics is to be expected, not from the Anglo-American world, but from Central Europe.

If, in the 21st century, Central Europe is not to repeat its errors of the 19th century -  when it abandoned its own spiritual culture and, mesmerised by the economic and military power of the West, embraced the  the Social Darwinist ideology of ‘dog eat dog’ which led to the catastrophe of 1914-45 -  it will need to put into practice the kind of economic thinking that Rudolf Steiner brought forward in Central Europe in response to that catastrophe, and which is still  waiting to be applied. Germany neglected to apply it between 1919 and 1929, and the result was Hitler. It neglected to apply it after 1945 and after 1989, and the result has been the steady Americanisation of Europe and the globalisation of the world according to the principles of neoliberal hard capitalism. As the new millennium dawns, is it not finally time for Europe to look to its own spiritual sources for economic thinking instead of  to Chicago and New York?

© Terry Boardman Dec 1999

This page was uploaded Feb.2000  Last updated 21.7.2012