INTERVIEW
Branko Milanović: Cold War economics was an attempt to deny the existence of social classes
Published
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After the 2008 crisis, studies on income inequality gained momentum. Especially with Thomas Piketty’s Capital in the 21st Century, the concept of inequality, which has become popular both in academia and in the general public, seems to be a consequence of the disappearance of ‘middle class prosperity’ with the financial crisis and the austerity policies that followed.
Branko Milanović, for many years chief economist in the research department of the World Bank, now a research professor at the City University of New York, is known for his research on inequality. In his latest book, Visions of Inequality, Milanović takes the thinking on income inequality of six great economists (François Quesnay, Adam Smith, David Ricardo, Karl Marx, Wilfredo Pareto, Simon Kuznets) and examines how ideas on inequality have changed from the birth of capitalism to the Cold War and the present. Milanović believes that both the disappearance of the Soviet Union and the 2008 crisis have profoundly changed our understanding of inequality.
We talked to Milanović about his latest book, how the Cold War made the views of classical economists, also known as liberals, one-sided, and inequality research after the 2008 crisis.
You do mention in your book the lack of income inequality studies in both socialist and capitalist countries, and you mark this approach as ‘Cold War economics.’ I recently read a book from Samuel Moyne and he also called Cold War liberalism during the Cold War era. And he claims that the liberals themselves cut their past, their progressive past during the Cold War. So how did Adam Smith become a champion of free markets in the 20th century, even if he thought that the state administration is never given to the capitalists due to their narrow interest against the public?
I can split this into two questions. So let me do that chronologically. I’ll start with Adam Smith question and then I’ll talk about the lack of work on inequality studies during what they call the Cold War economics, because to some extent actually one really has to look at it chronologically.
My book, just to mention for those who don’t know, deals with the sort of top most important economists and looks at how they have actually looked at inequality. It starts with François Quesnay before the French Revolution, then goes to Adam Smith, David Ricardo, Karl Marx, Wilfredo Pareto and Simon Kuznets. And then in the last chapter, which covers the period that you actually alluded to, from 1960 to 1990, the book ends at the end of the Cold War.
I think what is quite clear if one reads especially The Wealth of Nations is that it is a book written clearly based on the idea of self-interest, whereas the Theory of Moral Sentiments is based on the idea of empathy. People believe that the Theory of Moral Sentiments is pro-left, in the sense because it’s sort of softer.
But in reality, actually when you read the two of them, it is the opposite. It’s actually The Wealth of Nations is an extremely tough book regarding capitalists. It is a tough book regarding any type of organization. And the government is an organization. So obviously Adam Smith, as we all know because that part of another Smith has been propagated, is very hard on government regulation and on government trying to impose the rules that they themselves, people of the government don’t observe like for example corruption. They could be corrupt themselves, but they impose the rules on others that they should not be corrupt. Then it’s very tough on all as a set of associations, including organized religion. And it’s somewhat tough, but not too much, all labor unions, and I will explain later why not so much. But it’s extremely critical of any organized capitalist associations.
And that part of The Wealth of Nations is hardly ever mentioned because it is not something that the Chicago School and then the Wall Street Journal or others want to hear, but it is extremely tough and the reason is the following: He believes that of course capitalists are few in numbers, so they can coordinate much more easily than workers. Workers, thousands of them, millions, are dispersed.
But capitalists of course, are actually very few in numbers. They can coordinate better and they can have much greater influence on government policy because, as he says, they are sophisticated, and whereas workers of course are less educated, and they don’t have that access to power. So specifically, for example, he mentions that there should not be government facilitation of capitalist meetings. And this is so bizarre when you read that during Davos because it is a total reversal of the situation which existed even like 50 years ago that the government would not ostensibly go and show itself having a meeting of capitalist leaders. You know, the government had in those days to keep itself at least formally separate. But nowadays, as you can see, they actually are keen to go there.
So that’s what Adam Smith views in The Wealth of Nations and I would actually really urge people to read The Wealth of Nations, the entire book. It’s a long book, but it’s not a boring book and doesn’t actually go with interpretation, which is based on really selective excerpts from The Wealth of Nations.
But I think it is an important contribution, I believe, with the book to bring Adam Smith in a more truthful way, not only to go with the selected paragraphs.
Then the second question I will brief on that relates to the absence of the studies during the Cold War economics. Now I have to say something that was very interesting that you mention, is that I came up with the name, you know Cold War economics. I had no idea that Samuel Moyn at the same time totally unrelatedly came up with Cold War liberals. And actually I’ve read and learned about the book and I bought the book only after I finished my book. You know, my book I think was already published and I said wow, this is very interesting that we came up with a fairly similar, you know, title for either liberals or the economist.
For economics, my rationale was the following. To say that was only, neoclassical economics, which it was, is to some extent accurate, but it had something else. That’s something else was really a politically motivated attempt to deny the existence of social class. And that goes back to similar denial which existed in socialist countries, because of course they claim to have eliminated the capitalist class and then to have a classless society.
The US as we know was in an ideological and with other competitions; there was an ideological competition with the Soviet Union and also between capitalist and communist countries. So the US essentially claimed, which doesn’t come strangely because the US always claims to some extent to be classless society. But then the economics or the economists started claiming the same because the point was, ‘OK, neoclassical economics says to us that everybody has some type of assets.’ And then of course as you know they started using subscripts. For us, if there is no more capital and labor, they were all hundreds of assets, and they were subscripted.
And thereby the main dividing line, which is a very strong line because obviously to get income from one asset like capital you don’t need to work and to get income from another asset like you do have to work, this is a very strong line. And on top of that because the influence of the two are not the same politically, was that submerged, erased, ignored. So that’s why I believe to call it only neoclassical economics was not sufficient. We have to really put that prefix of neoclassical and Cold War economics. So that was my rationale for the name.
‘ANYONE WITH COMMON SENSE KNOWS THAT THERE IS A DIFFERENCE BETWEEN BILL GATES AND A BEGGAR’
In your opinion, best income distribution studies combine three elements: narrative, theory, and empirics. Your book follows a chronological order and I cannot but think that economics as a scientific discipline in general, and income distribution studies in particular, went through a regression, after Quesnay, Ricardo, Smith and Marx. For instance, mystification of economics was one of the main boarding points of Pareto, and it seems to me that this was coherent with growing nihilistic tendencies in other areas such as philosophy and sociology. Do you agree with that?
That’s an interesting point. Indeed Pareto is very often criticized because of his theory of the elites. As you said, for nihilistic tendencies and even he’s criticized for being at some point close to an ideological supporter or rather ideological progenitor of fascism.
But I have to say that I’m less critical to some extent ideologically of Pareto then on what happened during Cold War economics. Because for Pareto, inequality still was based on a prior distinction between what you call the elite, which nowadays is basically what we call the top 1%, and everybody else. What neoclassical or Cold War economics did was totally obliterate any difference. So the claim is actually more extravagant in the case of neoclassical economics, the claim is that actually we are all the same. The claim is that Bill Gates or Jeff Bezos or Elon Musk and a beggar are technically the same. They are both individuals who are under the conditions of uncertainty, and given the constraints that they have and the endowment they have, they maximize.
Anybody with common sense would say, well, they are not the same. Not only that, their incomes are different and their wealth is different. Time horizons are different, ability to withstand, lack of income is different, ability to influence political decisions is different, perception of them is different from the people, so everything is different.
And of course Pareto would agree with that because he would place one of them in the elite and the other one into the people.
It is true that Pareto by his writings was like philosophers of his time. And actually I am not that familiar with that. But for example, one can maybe take Nietzsche, as that was in some sense very dismissive of any form of democratic organization, believing that all of them are essentially fake. There he says every elite has to justify through.
There are elites who are like lions who justify the rule by force and there are elites which are more sophisticated; they’re like foxes. They justify the rule through creating an ideology.
So yes, I would agree with you, actually an interesting topic may be to study from a more philosophical angle, because Pareto, similar to Marx, has a political side, philosophical side, historical side and economic side. So you can actually study Pareto from different angles, which I think can also be done on Smith by the way.
What I was trying to say is that Pareto mentions the power of myth. This is like, you alluded to fascism, we have fascism to exploit myths and lies. And Pareto also mentions if you have the power you have even if you know you are lying, you have to lie to balance the society. Also he is always dismissive about the so-called proletarian interests as you mentioned in your book. So Wilfred Pareto is a representative of this regression during the 19th, the second part of the 19th century in western world.
Yeah, I agree with that. As I said, I think actually this is something that should be done by others, not by me because of the philosophical topic.
I of course study Pareto much more as an economist and what he says about income distribution. As you know we’re still using the Pareto coefficient and he was the father of the first power law which we still use.
But it is true you mentioned that his view of the world is very much a reaction against Marx and the large workers movement which in his opinion is actually similar to Schumpeter in that he’s very much against it but he thinks that they would win.
So he sees actually the proletarian movement, well organized with people who are actually willing to sacrifice themselves and he makes the analogy between that movement and Christianity because Christianity won eventually because people were ready to be sent to the lions and to be killed and to actually sacrifice a lot.
He thought that bourgeois liberals were lazy persons.
Yes. Bourgeois liberals want to keep the society as it is, but they’re not going to go out in the street demonstrating and fighting the workers. And he saw workers and of course the organized proletariat which actually comes.
These are interesting links which are not explored in the book, but which also comes with Lenin’s idea that you have to have an organized and professional party which basically dedicates itself to the political movement and taking power.
So Pareto sees all of them as basically much stronger in their beliefs and consequently likely to win, but while accepting that he doesn’t like the fact that they would be. In that sense, he’s similar to Schumpeter. If you read Capitalism, Socialism and Democracy, he saw the power of socialism and Schumpeter was of course always an opponent to socialism. In 1942 he essentially says, I think even in the first sentence of the book, socialism has won.
And of course Pareto also likes to shock very much. Maybe that’s another similarity with nihilistic thinkers of the time and maybe with Nietzsche, is that he definitely likes to shock bourgeoisie by making statements like that, that virtually every society in order to survive has to believe in a in a lie, in a big lie. That obviously included religion there as well. He saw religion is essentially a myth which is being created in order to maintain society.
Can we periodize the income inequality studies of economists you mention according to certain stages of capitalist development? I mean, physiocrats broke with tradition and regarded the wealth of the poor classes as the best indicator of wealth, the focus on class differences marked the classical economics, and with neoclassical and marginal revolution period inter-personal income studies arose.
You have summarized it, but let me just repeat that.
When I was writing the book because the choice of people that I took is basically based on my own writing over 40 years. I didn’t have any doubts except for one person and I’ll come to that in a minute. But as I was writing, I saw very clearly how the focus of inequality and actually I have to say that it is to some extent I am imposing sort of a view in the sense that people like Quesnay or even Smith, they didn’t use the word inequality, but I studied, like implicitly, how they view it, because they talk basically about factorial incomes, meaning, income from wages, labor income from interest and profits from capital and rent from landlord.
But the evolution is as follows. You start with Quesnay before the French Revolution, he introduces the idea of class. The classes are basically like the French classes before the Revolution. They were legal estates. So there were close like classes appropriate there which are composed of the clergy, aristocracy and government officials and they are the ones who received the surplus. So that was a totally new approach as if you see it’s very class based but it’s a legally defined class.
Then, as you mentioned, you have this sort of trilogy or three big authors Smith, Ricardo, and Marx that very clearly follow the definition of class which is based on economic ownership of different assets and of course legal equality, because legally of course capitalists have the same legal rights as workers and landlords.
Then we come to Pareto with this distinction between the elite and everybody else.
And of course we follow the development of capitalism because what the big three offers are actually at the time of classical capitalism. Pareto is already at the time, as we were saying before, overreaction to that and the sort of more evolved capitalism.
And then we come to Kuznets in the US, where capitalism is sort of ignored this class aspect. He brings in the distinction between agricultural and manufacturing workers and rural and urban areas. So it’s an entirely different distinction.
Then we finally come to no distinction at all. So this is really the evolution. We really go from legally defined classes to economically defined classes, to the elite to the classes defined by essentially the type of work they perform and the place where they perform it.
I think that the last one of the evolution was really politically motivated for the reasons that I mentioned before. But they do correspond to the movement of capitalism.
SAMIR AMIN AND THE CONTRIBUTION OF NEOMARXISTS
I will mention only one person about whom I had doubts. I wanted to include him and I included him a little bit but not as a full profile, he was Samir Amin.
The reason was that neo-Marxists and Samir Amin brought a new look at inequality domestically as being influenced by external forces. And nobody that I mentioned before had this view until neo-Marxist economists because inequality is the result of internal forces.
But then, with Samir Amin, inequality, for example, in Egypt is the result of foreign forces favoring a given type of inequality domestically and that type is then maintained because it is actually good for whatever the capitalist global order. So that was an entirely new view that Samir Amin brought. I was considering having this number seven, but for many reasons, actually I did not. But he’s still in the book.
What can those six economists say about today’s inequality studies? For example, is Adam Smith the moralist, who denounces and reprimands the moral deficiencies of the rich but never questions their right to be on top, or Adam Smith the scientist, who openly criticizes the rich and how they acquire their wealth, suitable for post-neoliberal inequality studies? Recently, I read an article about the resurrection of elites against elites, rich anti-woke figures against rich woke figures in New Yorker (which also mentions your book). Does that mean Pareto is more relevant than the others? Or let’s talk about Kuznets and his thesis about the rapid increase in inequalities with industrialization and today’s ‘re-industrialization’ or ‘green transformation’ debates.
Well, that’s a very good question. I actually think all of them are relevant in some way.
Let me start with Kuznets. When Kuznets defined his famous inverted U-shaped curve, he obviously knew only the situation up to 1955, or actually 1960s, because he still continued writing. But you can apply the same logic of the industrial revolution or technological revolution to the later revolutions, including today’s. You could actually argue that we are now going through the upward cycle of the new Kuznets wave, which is not dissimilar from the upward cycle of the previous Kuznets wave.
But clearly Kuznets, having seen only one revolution, did not expand that to two or three or five. But we have seen two or three. So I think we can use Kuznets to actually claim that similar developments can be seen in the future as well. What I want to say simply is that if you see one phenomenon once, it’s very, very difficult to generalize that. But if you see the same phenomenon twice, from number 2 to number 3 is not a big jump. So I think he’s also relevant.
I believe as you mentioned Pareto as well, because of the book that you alluded to. I think it’s the End Times by Peter Turchin, which actually talks about the conflict of the elites within the elites. Pareto has actually two different elites. Turchin also has two, but it’s a little bit different.
It’s an interesting comparison, but let me go back to Adam Smith because I’m giving the Adam Smith lecture pretty soon and I really would like to emphasize this. Very important points from Adam Smith are: number 1 is that the welfare of the largest group is the objective economic policy and that was new at that time. Secondly, all organized associations have to be looked at with a skeptical eye. And third, capitalists should not rule economic policy because their interests very often go against the public. I think these are really very important messages from The Wealth of Nations.
And when you speak of Adam Smith the Moralist, I really have come to think of all the Theory of Moral Sentiments as a job market paper that Adam Smith did. Because it actually pushes all the right tones for somebody who is a professor of basically jurisprudence and who actually himself is divided on the organized. He’s against organized religion, but his religious feelings can not be fully expressed. As we know, he really remained very ambivalent, at least in public. And so it is a book, a paper that shows him as a theistic philosopher who is actually a moral philosopher, and does all the things that are expected from him to defend in a very sophisticated way. But in The Wealth of Nations, he doesn’t. He’s no longer writing a job market paper. He’s writing really what he believes and what is actually the result of having observed the world for you know, at that time he was more than 50. And so I think it is a very different view of the world.
I would actually really tend to see The Wealth of Nations as a significant, much more superior book to than to the Theory of Moral Sentiments. Because I think just the last point, he was young, rapidly young and he needed to show that he would actually follow the conventions. Young people when they write the job market paper they don’t go into the area which is really going to shock somebody. They used methodology and the topics that are very standard.
‘WITH THE 2008 CRISIS, THE MIDDLE CLASSES REALIZED THEIR ILLUSIONS’
One of the most interesting parts of your book is that when you mention geopolitics of the Cold War era, the turn taken in economics towards obstruction and the funding of research by the rich. It is a little bit surprising when one reads that the idol of liberalism, Adam Smith, thought that the rich people come together from time to time to force their interest over the society. You write that the right-wing financial operatives have established an ‘integrated system of knowledge creation’ during the Cold War. What about now? In ‘Epilogue’, you imply that the rearise of inequality studies is related to the middle classes’ dire situation after the financial crisis. What are real economical and political motives behind this phenomena?
I actually think that the current situation is quite different from this Cold War economics. And I think it’s different for two reasons.
First of all, the end of communism in the Soviet Union. There was no longer the need on the capitalist or the US side to insist so much on the classless aspect of their society because the other side simply disappeared. So that gives you much greater freedom politically to actually go in the directions that politically were difficult before.
Secondly, I think that as always they are important political or economic turning points that make a difference. The 2008 crisis was important for the study of inequality because it brought realization to the mass of people, to the middle class people, that what they believed, increasing standard of living, was to some extent an illusion built particularly in the United States, on the ability to borrow.
As you know, the household loans were actually more than 100% of the GDP and people could borrow very easily. George W. Bush actually started saying that everybody should borrow to have a house. And people who had no jobs or kind of random jobs and no incomes were actually also able to borrow, which of course was also propagated by the rich people and the banking system. Practically everybody participated in that.
As we actually know that quite well, the banks were interested in packaging the loans and getting the fees and the rich people had access to monetary balances which they had to pay somewhere. But then the whole thing crashed in 2008, and it could be much worse, obviously, were it not for the ability of the government to print money and to basically bail the banks out.
But for the middle class, it was a big awakening because the top 1% actually did pretty well. And then came also the issue of China outsourcing of jobs and so forth. So, that economic shock was something that opened the gates to the study of income distribution.
And of course [Thomas] Piketty’s book was a big contributor. But one should not forget this: Like everything, every time in history, a certain ideological trend is successful when it comes on the terrain, which is ready for it.
If Piketty’s book was written in 2005, the terrain was not ready, it would be there and maybe some people would read it, some people would not. But there would be nothing similar to what’s happening in 2013.
And the third one is the ideological, new ideological view of income distribution.
You did your Ph.D. at the University of Belgrade in 1987 on economic inequality in Yugoslavia. According to your own experience, do you think that Marx or Pareto was right regarding socialist countries?
The question is very difficult. To some extent socialist countries did replicate two things that Marx did not believe they would actually have.
The first one, they did create a new, different but new class society where it was not access to capital which mattered because the capital was nationalized, but access to the bureaucratic hierarchy that was to some extent like a new class.
Secondly, but on that I’m less convinced, there was of course income inequality in socialist countries. But it is true that that inequality was less than in the equivalent capitalist countries. So yes, they have reduced inequality, they have not reduced it to a minimum.
But on that part, I think it’s difficult to say, because Marx believed that once the underlying institutions are right, which means the underlying institutions do not have private ownership of capital, that income distribution would become an important topic. But that inherently it could not be high because you don’t have private capital, because everybody has access to schooling, because manual labour would be sort of more valued relative to the intellectual labour. In some sense he was right there.
But I think Pareto was right that there was a new class being created.
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INTERVIEW
“If Europe remains an appendage of the US, it will become an insignificant part of the world”
Published
6 days agoon
18/11/2024With the Ukraine war, anti-Russian sanctions, the economic downturn and US-China tensions, Europe seems to be once again engulfed in a major crisis. The level of integration that the Old Continent has reached once again calls for a pan-European rather than a “national” way out.
German researcher, writer and publisher Hauke Ritz has been analyzing Germany, Russia and West-Russia relations for more than 15 years. Ritz says that this work dates back to 2007, when he began to realize that in the future there would be a strong geopolitical confrontation, if not war, between the US and Russia. “And once you understand that,” he says, ”it’s hard to find a more important topic.”
This issue, the German author says, has “to some extent taken over” his life. In order to grasp the “deeper causes” of this tension, he says, he began learning the Russian language and visiting Russia.
One of Ritz’s most striking theses is that the concept of “the West” and “Europe” do not coincide. For him, “the West” refers to the post-World War II order and is clearly the name of US hegemony over Europe. “Europe”, on the other hand, is a continent that dates back thousands of years, a continent of both peace and war, a continent of Enlightenment, revolutions and Reformation, but never ruled by the hegemony of a single power, an oasis of multipolarity, culturally united but politically separate, a place of balance of power…
Hence, when Europe finds itself again, free from the “Western” hegemony of the last 75 years, it will not only become one of the poles in a “multipolar world”, but will also enter a “multipolar” era within itself. How will this happen and through whom? Whether Rtiz has an answer to this is up to the reader.
Let’s start with the first part of the title of your book. The “decline of the West” is a recurrent theme in European history. In what sense do you use this term popularized by Spengler and his followers? Do you agree with the idea that the West is in decline? Or to put it another way, how many collapses of the West is this?
First of all, I didn’t refer to Oswald Spengler in the book because I think the decline we see today is a very different kind of decline. At that time, the West as we know it today didn’t really exist. We will come back to this fact later. I just want to point out that today we are seeing the collapse of the West at a tremendous pace in many areas, and we get the impression that it is really accelerating year by year, month by month, and it is becoming very visible.
Compare the current situation with 1989, when the Berlin Wall came down. At that time, most of Eastern Europe and even the Soviet republics were influenced by the West, its products, its music, its way of life, its model of civilization. The same was true for many countries in the south, in the Global South and in the east. At that time, the West was the only manifestation of modernity in the world.
After the Soviet Union collapsed and the system of socialist states dissolved, the West had a kind of monopoly on modernity, on the interpretation of the modern world. And everyone wanted to be connected to this world, whether it was through movies, through products, or by emigrating to a Western country. The West also had the image of democracy, of a just, rich and prosperous society, of innovation.
Now look at what the West stands for today. For sanctions, for war, for strange ideologies like the LGBT movement… which is causing heads to shake not only in the Global South and the East, but also in the West itself. So the Western world has lost not only its moral superiority, but also its soft power, its charm.
And not only that. We no longer see the interpretation of modernity in modern China, we started to see modern India, and Russia has also come back as a great civilization. So the West is in a very different situation now, and the loss of the appeal of its status as a model of civilization is something that I think is too serious to be repaired in a short period of time.
That’s what I always use: Western world. Of course, the opposite term that should be used in this context is Europe. And Europe is something quite different from the West.
We will come to that in a moment. I think you see Europeans and westerners as separate identities and civilizations. Do you think that the US is what we should understand by the West at the moment? And what is the difference between the US vision of the world and the European world?
There are so many differences. I really think that western civilization and European civilization are quite different concepts in many ways.
First of all, the West is something quite new. How long has the West really been around? The West as we know it today first appeared after the Second World War, and at that time it was basically the American sphere of influence that was created by military expansion during the Second World War, and where the soldiers stopped, the West stopped.
North Korea was not part of the West, but South Korea was. The same is true for Germany. East Germany was not part of the West, but West Germany was. So the accidental movements during the war created a sphere of influence and it was called the West.
Of course, you can make an argument, “No, the West is older.” There were revolutions in Western European states. The French Revolution, the English Revolution, the Dutch and others. Yes, but these were also countries that not only made revolutions, but also established colonies in overseas empires. Maybe this is also connected. If you have a big trade over the seas, you have a lot of merchants who start competing with the aristocracy and then you are more likely to have revolutions.
But these early stages of the West were not united. There was a lot of competition between them. But in the late 19th and early 20th century, we see that this rivalry started to turn into a kind of alliance. For example, the Entente Cordiale between Great Britain and France, then the alliance between Great Britain and the United States. This could be a kind of embryo of the West as we know it today.
But the West in general is not more than 100 years old. So it’s a very young entity and it includes North America on the one side and the Europe of the European Union today, which includes the Slavic states like Poland on the other side. And then you have South Korea, Taiwan and Japan. So culturally speaking, these are very different countries, very different parts of the world, influenced by different religions, and all united by one factor: American domination, American hegemony.
So in the end, you come to the conclusion that the West is basically this American hegemony. There is a lack of a cultural base, there is a lack of history.
Europe, on the contrary, is something quite different. Europe is 2500 years old. Europe started with the model of democracy in ancient Greece and democracy came back to Europe in modern times with the French revolution and other revolutions.
But there is a long period in between when Europe had quite different models of government and a different way of organizing its society.
So Europe is an entity that has a vast history of quite different periods and epochs, but there is still something that can define the whole of this time, which is more than 2000 years. So the concept of Europe is much more complex and much deeper than the concept of the West.
Do you think Europeans have some antidote to the West?
Europe, of course, belongs to Western Europe and Western Europe is that part of Europe that started to have colonies expanding overseas and then it became the west. So maybe some Western elements also belong to Europe.
But Europe is more the center of Europe. Germany, Italy are not usually seen as part of the West. They didn’t have big empires overseas for centuries. They were organized in a decentralized way. Then you have the Slavic peoples in the east. So Europe is all of that.
And the term Western suggests that there is a single model for this whole area and the whole history of Europe. Europe is also defined by its achievements in art, literature, music and philosophy. It is also defined by Christianity and Christian history. It is also defined by references to antiquity. That is, by the memory of the ancient Greek culture in ancient Rome, which was common to all European states and created a kind of unified field of knowledge and reference for all European states, for example through Latin and the ancient Greek language. So there is much more to Europe than the West.
There is also a big difference in terms of the concept of world order. The US is protected by two oceans. Nobody can harm them. If they wage a war on another shore, they can be sure that there will be no repercussions for them, that nothing will come back to them.
This was not the case in Europe. Europe has had enormous wars for as long as it has existed. One of the most brutal periods in European history was the Thirty Years’ War in Germany in the 17th century. But there were also civil wars in other European states.
What Europe learned from this war was that you cannot wage war and foreign policy on values. If you start making the issue of Catholicism and Protestantism part of your foreign policy, part of your national expansion, then you will have never-ending wars.
You are pointing to the Westphalian system.
Yes, it is. So after this war, the Westphalian system was created, where these young nation states learned to respect their differences, that each state has the right to manage its own internal affairs and that there should be no outside influence.
Every state, despite its population size and power, was equally a subject of international law, and this was a great civilizational achievement, which of course was lost again and again in the centuries that followed. But this was a very different concept of world order. A world order that accepted multipolarity, that did not interfere with each other, that started to think about each other’s otherness, that accepted the simultaneous existence of various powers.
The US has a completely different conception of world order. First of all, they think that they are somehow chosen by God, that they have a manifest destiny given to them by God. The concept of a sacred mission means that they think they can only get stronger, stronger and stronger. Therefore, the task of ruling the world belongs to them. And they are an indispensable nation. American exceptionalism. That’s why the whole history of American foreign policy is defined by the fact that they cannot be partners. They cannot partner with anyone else because they always think they are superior to others. They always think they have a better system than others.
And that’s why the Americans have so far found it difficult to make a treaty with, for example, Russia or China that they can really stick to because they always think that other nations, other states don’t have the kind of democracy that we have, that the people there are oppressed.
So the contract that we have now is only for a while, because the state that we have this contract with is not as developed as we are. It is not elected in the same way as we are.
This is basically a tragedy because the United States has not been able to create partnerships because of this notion of sacred mission, exceptionalism, indispensable nation. Instead of creating partnerships with Europe, with Germany, with France, with Italy, it has slowly but surely transformed Europe into a kind of colonial status. This is also a tragedy for America itself, because if Europe was a partner for the United States, it could have influenced it in a positive way. For example, we could have avoided many of the mistakes that American foreign policy has made in the Middle East or with Russia.
But because America does not see Europe as a partner, it has learned nothing from us. They always acted as if they already knew everything. This has led to a foreign policy that has antagonized much of the world.
The US now has a contradictory relationship not only with Russia, which is at war, but also with China, with Iran, increasingly with Turkey, with the Arab world, with Africa and Latin America, where they have waged enormous wars and destruction. So there is no area of civilization left in the world where the US has a normal relationship, not even with India.
And this is very destructive for the US because the US has basically created a kind of counter-alliance by antagonizing all the other major nations or civilizations in the world.
BRICS was created by the US, the US created BRICS, even though they were not intended to do that, but BRICS is basically the child of US foreign policy.
So you talked about two very, very different mindsets. On one side you have the manifest destiny, American exceptionalism, and on the other side you have the Westphalian system of Europe. After the Second World War, the unity of Europe was against the Soviet Union and communism, but at the same time it was doing it in conjunction with the hegemony of the United States on the continent. How did they achieve this hegemony over the continent? Or in other words, why did the Europeans allow the Americans to lead them against the Soviet Union?
Europe, as I mentioned earlier, had been organized for centuries as a kind of balance of power. After the Second World War it was difficult to go back to this system. I think the Soviet Union would have wanted to go back to that system because the Soviet Union was already a very large country and it was a burden to control more states outside of itself, especially if you think of the huge destruction that the Second World War caused in the most populated areas of the Soviet Union.
So the Soviet Union had no interest in controlling a large part of Europe and it certainly had no interest in controlling all of Europe. This may explain why, for example, in 1952, the Soviet Union made the offer that it would withdraw its forces from Germany for neutrality, that Germany could be reunified if it became neutral like Austria. But this offer was rejected by the West German government and by the United States, which wanted to keep the Americans in, the Russians out and the Germans down.
Now the Americans were there and they started. For them Europe was a kind of gegenko, as we say in German, the opposite shore. So for the US, as a naval power, it was very important for them to control the opposite shore of the ocean and that was Europe and they wanted to stay there.
In their mentality, they saw their presence in Europe as a kind of trophy or a victory because they had the impression that they had a better system. And the US was populated by people who fled Europe because of political oppression or religious oppression. That is why to this day many Americans have a negative impression of Europe. For them Europe is a place that is not as free and democratic as they are. Returning to Europe after the Second World War meant for them that now they had to fix Europe.
They didn’t really do that. Of course there are some Americans who admire European art, literature and philosophy, but on the whole they look down on Europe more than they respect it. For them it was not a problem to reshape, to reorganize European culture. They also wanted to unify it, to create a kind of alliance against the Soviet Union. Because the United States saw itself as an exceptional nation with a sacred mission, they could not accept that there was another nation like the Soviet Union that had a project of socialism and an idea for humanity. So they wanted to dominate, I think.
For the Soviet Union, of course, the American presence on the European continent was a danger because Russia had experienced for several centuries that it could live in peace with Europe as long as there was a balance of power. But every once in a while Europe unites, for example under Napoleon, and then attacks Russia. Or Europe united under Hitler and the conquest of Nazi Germany and then attacked Russia. Now the American presence on the European continent means that Europe is once again united under American rule. For Moscow, this meant the danger of being attacked once again. That’s why they were in Eastern Europe.
Even so, they didn’t really want that.
Which brings us to Russia, to the question of Russia’s relationship with the West. Do you think it is possible to have, for example, a European security architecture that includes Russia again? Or will the Kantian idea of “perpetual peace” prevail? Or will post-EU Europe be a continent of wars? Because even if Europe, even if the European Union disintegrates, it is possible that the axis of Germany and France or only the axis of Germany will prevail. A post-EU Europe because Germany is still the biggest economy in Europe. It has a lot of opportunities to steer other countries.
No, no. It is not possible for the reason I just mentioned. I just said that Europe has always been organized as a balance of power, which means that if there is only one power ruling Europe, it means that Europe is destabilized. This is not good for Europe.
Germany may be the most powerful country in Europe, but it is not strong enough to rule Europe on its own. That’s the beauty of Europe, there are so many states in Europe and some of them are equally powerful: France and Germany, Britain, Italy, Spain, they are all similar, they are the biggest and they balance each other. I think that Europe can only be governed in such a balance, and the countries between which this balance is realized may differ from century to century.
In the era of the European Union, there was the German-French axis, which was a way of rebuilding or replicating this balance. Also, Germany is not very popular in the rest of Europe because of the legacy of the Second World War. Germany has friends. In China, in Japan, in Russia, Germany is highly respected. If you are far away from Germany, Germany is respected. But if you are close to Germany, in Poland, in France, in Great Britain, Germany is not so respected. For all these reasons Germany cannot unite Europe, it cannot and must not lead Europe. Europe has to organize itself in this similar balance of powerful forces.
Then you mentioned the issue of Russia. As soon as the European states or Europe as a whole understands its interest, it will very quickly start organizing a peace with Russia, if peace is possible. Because it is in Europe’s interest.
If you look at European history, you will see that Europe has been strong in times of peace and weak in times of war. In the United States it is the opposite. The US is strong in times of war and weak in times of peace. That’s why Europe needs peace.
Moreover, Russia is part of Europe. So when we talk about Europe, we are automatically talking about Russia and if we exclude Russia from Europe, it is like excluding a large region from China or an important province from India.
So in addition to the integrity of the continent, which can be shown geographically on a map, to exclude Russia from Europe culturally would be to exclude, for example, a great achievement of classical music from Europe. Tchaikovsky, Rahmaninov or the legacy of literature, philosophy or socialism is also part of Europe. The whole history of Eastern Europe during the Cold War is linked to Russia.
So Europe can only be healthy and have a future if it includes all of Europe. A Europe that excludes Russia will be badly divided and will probably have no sovereignty over its own cultural development.
Then we are once again in this distinction between the concept of the West and the concept of Europe. For the first time in history Europe is ruled by an outside power, a power that is located in a completely different geography, on a completely different continent, and it is called the West. You have pushed Russia and Russian culture out of Europe in order to maintain this artificial entity called the West. You have removed the memory that Russian culture and Russian influence is a natural part of Europe, like Italian culture and Italian influence or Spanish culture and Spanish influence. If you have the concept of the West, you will always have borders in the East.
But if we look at the concept of Europe, there is no need for a border in the east. Because Europe has been organized for centuries in a kind of balance of power, it can extend this concept even beyond the borders of Europe. And to some extent, the idea that Europe is organized in a balance of similar powerful states is a concept that very well represents the idea of BRICS, the concept of bricks of a multipolar world made up of similar powerful states like China, India, Russia, which are completely different from each other, but which accept certain ideas about the organization of the world order.
So we can say that we need to cut Russia off from Europe in order to have a US hegemony on the continent, in Europe.
Yes, this is in the interest of the United States. They want to sanctify this European interpretation of the West. So what we call the West today is basically the American interpretation of European culture.
The Americans themselves came from Europe, so they carry the heritage of European culture with them. But for a long time they lived on a different continent, in a different climate, in a different geographical situation. They are also a melting pot of nations. They have a completely different life experience and a completely different space than you have in Europe. Under these conditions, this European culture changed, which became the United States. Now American culture still has European roots, but it has become something different.
This half European, half non-European culture of the United States came back to Europe after the Second World War and started transforming Europe, reshaping Europe in the image of the United States and the EU. The European Union was an attempt to create a kind of copy of the United States in Europe.
And this is also the mistake of the European Union. The mistake of the European Union is that the European Union is not European. It has no connection with the history of European ideas. It does not refer to the 19th century. It does not refer to the 18th century, to the 17th century. It does not even refer to ancient times.
More than 20 years ago, when the European constitution was being planned, some people wanted to write a quote from the famous ancient Greek politician Pericles. Later this quote was removed because it was not politically correct. Pericles might have said something wrong about some minorities. They could not accept Pericles any more and so the quote was removed. This shows you the relationship of the European Union to European history.
Or look at the banknotes of Europe. Maybe I have one in my pocket. This is very meaningful. Here it is. This is a five euro note. Here you see a kind of building. This building is not real. It’s artificial. Fantasy. This bridge isn’t real either. It’s just an artificial bridge imagined by a painter.
So Europe has a very negative relationship with its own history and culture. So much so that we cannot even represent our own architecture on our banknotes.
So you think that in order to become more European, you need to get rid of the European Union as an institution?
This is of course dangerous. We have to look at the reality we have now. Right now we have the euro. There is a huge interconnection between different economies. We have a lot of interdependence within the European Union. The dissolution of the European Union would be catastrophic. Just like the dissolution of the Soviet Union, which created a lot of poverty and civil war. So nobody wants that.
So I think this is a very complex question and I don’t have a final answer to this question. Of course the EU needs at least some kind of restructuring. It needs to be fundamentally reformed. I don’t know whether it is possible or not. Maybe history will show how it will happen, what will happen. Maybe some states will start to leave the EU. Because history shows very clearly that a state that has no real identity of its own, that is built only on the basis of dependencies and laws, is a very weak entity and can disintegrate. And this could also happen to the EU.
Of course, if the European Union really disintegrates, it could be a very ugly process because the economic consequences would be enormous.
But one way or the other, do you think we are heading towards a post-EU era?
You see, there is the emergence of BRICS in the world right now. I just mentioned that BRICS is basically built by the shortcomings of American foreign policy, by its arrogance and selfish behavior.
What is interesting about the BRICS concept is that it includes very different civilizations and some of these civilizations are also states. For example, China is a state but it is also a civilization. India is a state but it is also a civilization. The same can be said about Iran.
In the case of Russia it is more complicated because Russia is also part of the European civilization. Some Russians deny it and say no, we are Eurasian in a similar way to Europe. But if you are in Russia, you see and feel European culture in every corner. So it is really difficult to separate Russia from Europe.
But the concept of civilization state is a very interesting concept or a very interesting term. The question is: Can Europe be a civilization state? The answer is both yes and no.
Yes, it can be, because for the whole history of Europe, after the fall of the Roman Empire, Europe was somehow united. Europe was politically divided but culturally united through the church and the Christian faith and also through the monasteries that were established in many different parts of Europe, all trying to remember the old history, the old literature and writings.
And this went on for 1500 years, Europe was united either through Christianity, through religion, through the church, or later on through the philosophy of humanism, the Enlightenment and the exchange of literature.
For example, different European writers wrote in different languages, but they were always reading each other. In the 18th and 19th centuries, it sometimes took only months for the first translation. All important authors caused a reaction in other countries where they were introduced in translation. German philosophy influenced not only Germany but the whole of Europe. The same is true for the French Revolution.
So Europe is a kind of, in Germany we call it a resonance chamber, a resonance chamber where cultural styles, architectural and painting styles ripple across the continent.
At the same time, we have political fragmentation. This is unique in the world because all other parts of the world are organized differently. If you look at China, for example, China was politically united even though it had many different languages and peoples. The same is true for India. I think the same is true for the Arab world and Russia. So in most parts of the world, at some point you have some kind of political unity.
In Europe, it never happened. It never really happened. There were attempts, for example Napoleon tried, Hitler tried with his strange and brutal ideas, but it always failed.
In the end, we have again political fragmentation with a kind of cultural unity. I think this is a model for the future. If Europe can represent this model, it will also be a mirror of the multipolar world, because in the multipolar world there are different centers of power that are in some kind of balance with each other.
Europe can become a pole of the multipolar world and at the same time represent multipolarity in itself.
This brings us to the second and last part of the title of your book, which is the reinvention of Europe. How can Europe reinvent itself and what elements in Europe have that energy?
First of all, we need to understand the difference between Europe and the West. We need to understand that we have lost a lot in the last 80 years because Europe has tried to make itself more like the West, or because the European Union has tried to reconstruct Europe as a mirror, a kind of copy of the U.S. We need to recognize these differences and then we need to start reclaiming what we really are.
I think these processes are going on in a different way in every European country. I think once we understand once again what Europe really is, what Europe can offer to the world and what has been done to us in the last 80 years, I think we can start to build a kind of European union that will once again be built on culture, history and a complex understanding of culture, which will once again have a kind of utopia in terms of education and civilization.
In the 21st century we are facing great challenges. For example artificial intelligence, genetic engineering. Europe has something to offer in this regard. We have the heritage of humanism and Enlightenment. So we can start with a kind of intellectual discourse, if we really need to do everything we can, because in other parts of the world, especially in the United States, there is a tendency to do everything possible in the field of technology.
Europe can make a different proposal to the world. Let’s try to control technology. Let’s try to put the human being first so that technology adapts to the human being and not vice versa. Europe can also become a neutral part of the world, like a global Switzerland, where intellectual discussions can take place on artificial intelligence, genetic engineering, but also on the preservation of culture.
Europe has a special opportunity to play this role in the 21st century. This is because Europe has influenced the rest of the world for the last 500 years. Since the rise of the Spanish and Portuguese empires, world culture has gradually become Europeanized. If we are in Latin America today and there are political debates, people use terms from European political philosophy to discuss their internal differences. The same is true for other parts of the world.
There is only one world culture in the world, and it has been largely shaped by Europe for several centuries. That is why Europe is now in a very good position to offer a place for discussion, meeting and exchange of ideas on civilizational issues in the 21st century, which will perhaps also be accepted by other civilizations, although they are interested in developing their own traditions.
Maybe in the future we will see a Chinese world culture or an Indian world culture, an Islamic world culture. I don’t exclude it, I welcome it, but it will take time, because if you want to transform your regional culture into a world culture, you have to create art, you have to create, you have to create, you have to write books, you have to create a philosophy, you have to create music that can be attractive to other people in other parts of the world, and this cannot be done in one generation. It cannot be done even in two generations. It needs time.
Europe has already done it for the last 300, 400 years. This is a kind of heritage not only for Europe but for the world and it has to be preserved. That’s why Europe has to be sovereign, it has to be independent, it has to be an independent pole in a multipolar world, not some kind of appendage of the United States, not some kind of American colony that sees itself through American glasses and unfortunately has a kind of colonial consciousness as it is today.
So we have to overcome the colonial consciousness that we have today and start to see what we really are, what we are with our good sides, what we are with our bad sides.
Of course a lot of bad things have happened in Europe. You mentioned colonialism, especially from the Western European states. Yes, there is a bad legacy, but at the same time Europe has given something to the world and we have to see both, the bad and the good. It is not very healthy to see only one side.
So do you think Germany can play a special role in this process? I mean, when you talk about Germany and its special role, it’s a bit terrifying because Germany has historical burdens. But is it still possible for Germany to play a leading role in what you call multipolarity in Europe, as a pole in a multipolar world?
Yes, Germany can be a pole in a multipolar Europe. Of course, like France, like Italy, like other important states and regions, there should be such a pole.
Of course, at the moment Germany is most affected by the current crisis, by the war in Ukraine, for example, the high energy prices have led to a kind of deindustrialization in Germany. So we are starting to feel it.
Usually Germany is not a place where active revolutions take place. Our revolutions, the German Peasants’ War or the Revolution of 1918, of Rosa Luxemburg and Karl Liebknecht, all failed.
If there was a revolution in Germany, it was a political revolution. Of course you can say that fascism was a kind of political revolution, which was quite ugly and of course not something we want to point out.
But if you look at history, there were spiritual or intellectual revolutions that came out of Germany. Martin Luther, for example, came up with the idea of Protestantism, which was a reform of the church, which was also a kind of revolution. But it was more of a mental thing, it was not an active political revolution.
The same was true of the idea of socialism, which was rooted in the history of German thought. Marx was, after all, a German philosopher. So maybe in this sense something can come out of Europe, maybe out of Germany. Maybe some Germans can offer an idea.
But I think other European countries are also important. France is important, with its legacy of revolution and activism. Italy is important, Eastern European countries are important.
I think in the end we will see something coming from various corners of Europe. From one side comes an idea, from another side comes political turmoil. And from another corner of Europe a reasonable reform can be realized. In the end they will contribute and help each other.
But right now we are at a crossroads. What if Europe remains as it is now, it will become an insignificant part of the world; it will not be able to play a role as an appendage of the United States; its wealth will decline, its population will probably decline; European societies will lose their coherence and identity and Europe will become an insignificant and poor part of the world.
Nowadays we are beginning to see the situation and we are beginning to come back to ourselves. I think there are forces in Europe that are interested in this. Not only the normal population, but also what we have in Europe, in Germany, what we call Mittelstand in Germany, which are small-scale factories with a hundred or 800 employees, but big businesses that are very specialized in a certain product.
So there is still a lot of wealth in Europe. So there are forces that can do something. I think these processes are already going on.
I can’t see what will happen in the future. I can’t describe to you how this change will happen. Maybe it will come in a surprising way. Just like the change in 1989 happened in a surprising way. Many people thought that the wall would be there for the next 20 years and suddenly, overnight, it disappeared.
So history is completely unpredictable. History is always a surprise. If we have a vision of the future, we can be sure that this vision will not manifest itself 100%. History is always different from what we think.
But I am sure that there is a lot at stake right now. 2500 years of history, 2500 years of emerging cultural complexity, emerging civilization. All this should not be for nothing. Europe is important not only for Europe but for the world.
And I think a Europe that is once again faithful to its tradition of history, literature, philosophy will be respected in the world. Still, we have the legacy of colonial atrocities. But there are always two sides. So I see a future for a cultural and intellectual consciousness for Europe. Maybe this is possible.
INTERVIEW
“The current interests of German capital coincide with the CDU-SPD coalition”
Published
1 week agoon
14/11/2024Germany’s long-swinging SPD-Greens-FDP coalition government (“traffic light”) has collapsed. The collapse seems to have started when the FDP raised the flag to its coalition partners over the budget and the constitutional debt brake. But the German economy’s problems, which began before the Ukraine war and the anti-Russian sanctions, combined with high inflation, energy costs and a declining export market in China, have once again led to Europe’s largest economy being labeled a “sick man”.
Arnold Schölzel, a member of the editorial board of Junge Welt, Germany’s daily left-wing newspaper, argues that Germany’s growth, the war in Ukraine and the simultaneous financing of social expenditures have come to an end and that the FDP’s demand for sharp social cuts is in fact the program of the next federal government.
Schölzel points out that the CDU/CSU, which seems to be opposed to loosening the constitutional debt brake, is preparing to back down in a new government. Schölzel believes that there are still nuances between the parties and that this will be one of the issues of the upcoming election campaign.
Noting that German capital has interests in Eastern Europe and Ukraine, the journalist reminds that Eastern Europe in particular is a “reserve of cheap labor” for German industry and underlines that capital supports pro-war policies. Therefore, it is highly likely that the German economy will go along with the militarization of society from now on.
Schölzel sees the Alternative for Germany (AfD) as a “continuation of the CDU/CSU” and believes that the interests of German capital lie in a CDU-SPD coalition.
‘FDP ANNOUNCES PROGRAM FOR THE NEXT GOVERNMENT’
As it turns out, the collapse of the traffic light coalition in Germany was in fact long overdue. An economic crisis “invented” by the Ukraine war and anti-Russian sanctions, and defeats in this year’s European Parliament and East German state elections, had shown that the government’s time had come. Does the collapse lie simply in the difference in economic programs between the FDP and the SPD-Greens? How far do the parliamentary parties differ in their proposed solutions to the economic and political crisis in Germany?
This government was a wartime government from the start. It entered the USA’s proxy war in Ukraine with considerable financial resources and waged an economic war against Russia – with devastating consequences not for Russia, but for German industry. She accepted the blowing up of the Nord Stream 2 Baltic Sea pipeline, presumably by the US-government. As a result, the German economy has been in recession for two years and is at the bottom of the list in terms of growth among the industrialized countries. This pushed the state budget to its limits. The simultaneous financing of growth impulses, war and social benefits is no longer possible. The FDP wanted sharp social cuts. In doing so, it announces the policies of the next federal government.
‘EASTERN EUROPEAN COUNTRIES A RESERVE OF CHEAP LABOR FOR GERMAN INDUSTRY’
The reactions to Chancellor Scholz and his government from the German business community are also striking. All the spokespeople of capital, especially the industrialists, align themselves with the CDU/CSU and demand immediate elections, citing the return of Donald Trump and the Ukrainian War as justification. But when it comes to the debate on the constitutional debt brake, there seems to be no unity. Is the debt brake really that important? Is it possible to support Ukraine, fight against Trump’s potential tariffs and at the same time reduce the German national debt?
The German capital was and is in agreement with Scholz’s war course. It has sharply reduced economic ties with Russia and also supports a hostile policy towards China, albeit more cautiously. Both industry and the CDU/CSU have now declared their willingness to reform the debt brake. They demand subsidies for industry and arms deliveries to Ukraine. The German economy has long-term interests there – as in all of Eastern Europe. The Eastern European countries serve as a workbench for German industry and as a reservoir for cheap labor. German industry sees it as Germany’s backyard. There are still differences on the question of how deep the social cuts should be. This will probably be the focus of the election campaign.
Does the German state see the economic restructuring program and the militarization of the state, the economy and society as one and the same? The new conscription law, the debate on conscription and the modernization of the Bundeswehr seem to be propagandized as a way out of the crisis. Parliamentary Commissioner for the Armed Forces Eva Högl said last summer that young people learn “structure, comradeship, a sense of duty” in the Bundeswehr, “all qualities from which the economy also benefits”. Are we facing a plan to militarize the economy?
Yes, those in power are concerned with the militarization of society as a whole. They say this quite openly: The Bundeswehr should advertise in schools – there is a new law for this in Bavaria. The healthcare system is gearing up to treat large numbers of injured people. The German War Minister Boris Pistorius (SPD) summarized this in the term “war capability”. It would have to be produced in four to five years because Russia would then probably attack NATO. Overall, it is a reactionary-militaristic restructuring of the state in which, above all, civil rights are restricted.
‘FASCISM IN GERMANY WAS REHABILITATED BY THE UKRAINE WAR’
When it comes to the Israeli aggression in Gaza, the AfD and the Greens support the same parliamentary bill. Similarly, when it comes to the “fight against irregular migration”, the CDU/CSU almost matches the AfD. Although all parties refuse to cooperate with the AfD, is it possible to say that AfD policies have already become “mainstream” in German politics? In any case, the AfD is likely to play a role in Germany’s future.
The AfD is a continuation of the politics of the CDU/CSU. The difference: It allows open fascists in the party. The CDU and CSU have been fighting racist incitement against migrants and asylum seekers for 40 years. The AfD has taken this over and expanded it: it has increased racism and consciously encourages violence. The AfD has always been on Israel’s side because of the oppression and murder of Muslims. This has increased further with the current genocide in Gaza. The Greens are the most bellicose German party today. They use racist clichés against Russia in the Ukraine war and completely agree with the racist position of the Netanyahu government. The Greens denounce any criticism of Israel’s policies as anti-Semitism and are successful in doing so. Because of the fascists in the AfD, there are still reservations among other parties at the federal level about working with the AfD. Things are different at the state level; cooperation works in the municipalities. Since fascism there was rehabilitated in Germany, particularly with the war in Ukraine, it may well be that the AfD will also be accepted at the federal level in a few years. As long as it still pretends to strive for peace with Russia, this is unlikely.
‘CONDITIONS ARE BEING CREATED FOR GREATER INDEPENDENCE FOR GERMAN IMPERIALISM’
It can also be linked to the question above: The cry for a “strong and decisive government” has an important place among the voices rising from within the ruling class. The polls indicate that the CDU/CSU would be the winning party in a possible federal snap election. Can the CDU/CSU alone meet this demand for a “strong and stable government”? Will German politics be forced to turn to “non-political” actors or institutions?
The date of the next federal election was negotiated between the CDU/CSU and SPD. This is symptomatic: they communicate despite all the rhetoric. As things currently stand, only a coalition of both parties can form the next government. In my opinion, this also corresponds to the current interests of the German capital. The ruling class is not yet committed to an authoritarian regime domestically, but is preparing the conditions for it. In terms of foreign policy, it cannot yet break away from the USA, but is striving for a stronger leadership role in the EU and perhaps in NATO. This also creates the conditions for greater independence for German imperialism in the future.
The Turkic Investment Fund, the first international financial institution of the Turkic world, is preparing to announce its policy document on January 1, 2025. Ambassador Baghdad Amreyev, President of the Turkic Investment Fund answered our questions.
You are quite new to the financial international cooperation institution. And you had your first Board of Directors meeting in May. Could you tell us what the outcomes of that meeting were, and what is the roadmap for implementing the strategies and resolutions that were discussed there?
As you know, the decision to establish the Turkic Investment Fund was made by the leaders of the Turkic world at their summit in Samarkand in 2022. In November 2022, they signed a special agreement for the establishment of the Turkic Investment Fund, which is the first financial mechanism and institution of the Turkic world. I was appointed as the founding president there.
We then began preparing the establishment agreement, and in a very short period of time, we finalized the agreement. On March 16, 2023, during an extraordinary summit of Turkic leaders in Ankara, the finance and economy ministers of our countries signed this establishment agreement in the presence of our leaders. It was a truly historic moment.
By the end of 2023, the ratification process was completed in our parliament, and as per the agreement, the Fund officially came into force on February 24, 2024. This is what we consider the “birthday” of the Fund.
A lot of organizational work has been completed since then. On May 18, as the President of the Turkic Investment Fund, I convened the inaugural meeting of the Board of Governors, which is the highest governing body of the Fund.
Cevdet Yılmaz, The Vice President of Türkiye also participated in that meeting, right?
Yes, The Vice President of Türkiye, His Excellency Mr. Cevdet Yılmaz, also participated in and chaired this meeting. It was a great honor for us.
The meeting was highly successful, and the Governors made several key decisions, including the completion of the institutionalization of the Fund. They also established the Board of Directors and gave them instructions to prepare key procedural documents and other necessary actions.
Since then, in June and August, I convened two meetings with the Board of Directors, during which we made crucial decisions for the commencement of the Fund’s operational activities. Establishing the operational structure and preparing the investment policy are ongoing tasks.
Our investment policy, in particular, is still being drafted.
The investment policy is still underway, then.
Yes, it is still underway. This is an essential document, as it will outline the priorities of the Fund, specify which projects we will focus on, and what our role will be.
During the first meeting of the Board of Governors, Mr. Ramil Babayev from Azerbaijan was appointed as Director General of the Turkic Investment Fund, responsible for managing the Fund’s operations.
Once the investment policy is finalized and the management structure is fully in place, we will be ready to commence operational activities.
I understand that your policy preparations are still in progress, but can you give us a sense of which key sectors or industries the Turkic Investment Fund will support?
Yes, our priorities are quite clear, and I have spoken about them on many occasions. First of all, it’s important to note that the Turkic Investment Fund serves multiple purposes. If we only needed to finance projects within our own countries, there would have been no need to establish a new fund. We already have numerous funds and banks for that.
However, the Turkic Investment Fund was established not only for financing projects within our countries but also to contribute to the economic integration of our nations. The Fund’s main focus will be to finance joint projects that promote integration and cooperation among our countries. This is vital for the unity and economic strength of the Turkic world.
Could you elaborate on the concept of economic integration for the Turkic world?
Any political or economic block has its final causes. Our goal is to bring together our economies to unite the potential to serve the Turkic world. Economic integration means working together to strengthen our economies and unite our economic potential. We are seven countries. By encouraging trade, facilitating investments, and supporting joint ventures in areas such as infrastructure, energy, and transportation, we aim to build a stronger and more united Turkic world.
What do you mean by “economic integration”? Are you talking about a common Turkic currency or infrastructure as part of this integration?
Economic integration doesn’t necessarily mean having a single currency or unified infrastructure, at least not initially. It’s more about deeper engagement in each other’s economies through joint projects, especially in key sectors such as energy, transportation, and small and medium-sized enterprises (SMEs).
Our goal is to create an economic and political bloc that can work towards common objectives, much like the European Union or other regional groups. We need to support each other’s economies and collaborate on joint projects that benefit all our countries. This is a key condition for the unity of the Turkic world.
I understand the Fund was the missing part in the Turkic world. Now, you believe that you filled this gap.
The Turkic unity has been very fresh. The Organization of Turkic States and other related cooperation organizations were established 10-15 years ago only. It is very short period. Of course, we need time. I am sure the Turkic Investment Fund will accelerate this process.
We need to work together to make our economies more competitive and resilient. Over time, the Turkic Investment Fund aims to become the primary financial tool for promoting economic integration within the Turkic world.
One of the Fund’s key priorities is to attract foreign investments into our countries. There are two ways to do this: First, by supporting national projects and encouraging foreign partners to participate, and second, by collaborating with other international financial institutions, such as the European Bank for Reconstruction and Development, Asian Development Bank, and Islamic Development Bank, among others.
Of course, we are not able to finance ourselves for huge projects but those financial institutions are so eager to contribute to our projects.
Well, Ambassador Amreyev, I understand that you have a positive cooperative perspective regarding other powers in Asia in terms of both institutions and countries. But at the same time, they bring some kind of geopolitical challenges. China, Russia, some other neighbouring European countries… How would Turkic Investment Fund navigate these geopolitical challenges? Following this, another question could be that: If the Turkic block rising as a global power and Turkic Investment Fund wants to be an active player in finance sector, how would you sustain your strategies given those facts?
The investment fund is a financial institution, not a political organization. This is why the Turkic Investment Fund is not involved in the geopolitical competition or challenges of today’s troubled world. Yes, we recognize the dramatic challenges facing the global community, but addressing those is the job of politicians. As financiers, our role is to contribute to cooperation rather than competition. By focusing on cooperation, we can help mitigate some of these global challenges and reduce the intensity of international competition.
Our role, therefore, is a positive one, working with other economic and financial institutions. Through constructive cooperation and joint projects, we aim to support and promote collaborative efforts in our complex world.
On the other hand, we also recognize that globalization has significantly increased competition worldwide. Consequently, our countries face challenges in attracting investments. This competition is real, and our goal is to help our countries navigate these challenges and become more competitive. By successfully supporting the growth of our economies, we can play a crucial role in enhancing the competitiveness of our nations.
Currently, six countries are full members of the Turkic Investment Fund—Türkiye, Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan, and Hungary. We also expect that Turkmenistan will join as the seventh full member soon. Additionally, the Turkic Investment Fund is open to cooperation with non-member institutions. Our establishment agreement allows other countries to join if they meet the required conditions and agree to the terms. This allows for constructive cooperation with external partners as well.
Regarding international financial institutions, we are open to working with all of them. We are already in negotiations and have observed a growing interest from various financial institutions in collaborating with us. By working with large financial funds, banks, and institutions, we can participate in significant development and infrastructure projects within our member countries.
These large financial institutions recognize the need for cooperation, and this implies substantial investments in major infrastructure projects. For example, there is growing interest in expanding energy infrastructure in Kazakhstan and Turkmenistan, particularly in light of the Russia-Ukraine war, which has increased the importance of the Turkic world for Europe. We know that the European Union plans to invest billions of euros in energy projects within the Turkic region. Can you give more information about the projects?
Large infrastructure projects are costly and require the participation of multiple financial institutions. As I mentioned, the European Bank for Reconstruction and Development, as well as several Asian banks, are keen on establishing such cooperation. We already have several projects in the pipeline, particularly in the energy sector to be financed. While Kazakhstan, Turkmenistan, and Azerbaijan are oil and gas producers, what we need now is more cross-border energy infrastructure such as pipelines and powerlines to transport these resources efficiently.
Building the transportation network is important, not just for production but also for consumers. That’s why we see growing interest from other international financial institutions. Our national governments have plans, and I know Kazakhstan, Turkmenistan, and Azerbaijan are involved in initiatives to build gas pipelines from Turkmenistan to Azerbaijan, Türkiye, and Europe. Our countries and our European partners are paying great attention to these projects.
There are also other energy projects in the Turkic world. For example, there are major plans to build an energy plant in Kyrgyzstan that will serve Uzbekistan and Kazakhstan. These huge infrastructure projects are already being studied by various financial institutions, and there are numerous areas for cooperation. Of course, we are closely working with our governments, monitoring their priorities, plans, and programs. We also consider the decisions made by national governments and at our summits and intergovernmental commissions, ensuring that we align with the priorities of our member states, which are our shareholders.
We know that Hungary, for example, has been highly appreciated by the Organization of Turkic States (OTS) for its contributions, especially during its EU presidency. Hungary’s role in connecting Europe and the Turkic world is considered very important. At the same time, Hungary has officially stated that it is contributing a significant amount of money to the Turkic Investment Fund. Can you give more information on this?
Yes, this is not a secret. The fund was initially established by five member states, and then Hungary joined with an equal share. Each country contributed $100 million, making the initial capital of the fund $600 million. As I’ve mentioned, this starting capital will be significantly increased in the coming years to make the fund more competitive and attractive for cooperation with other international financial institutions.
Will the shares always remain equal?
Not necessarily. The initial capital was contributed in equal shares, but additional capital may be decided later and won’t necessarily follow the same distribution. As for Hungary, it has joined as a full member with the same share as other members. I must say that Hungary has played a very constructive role in Turkic cooperation since they joined the Organization of Turkic States in 2018. Hungary actively participates in all cooperation mechanisms alongside other OTS member states. Recently, I was in Budapest, where we finalized Hungary’s accession to the fund, making them a full member. Hungary truly plays an indispensable role in connecting the Turkic world to Europe, and between the European Union and the Organization of Turkic States. We appreciate Hungary’s role, and I believe it will continue to grow in the future, contributing not only to the integration of the Turkic world but also to its global integration into the world economy through closer cooperation with the EU.
Just to clarify about the contributions to the fund—how much will be each country paying? For instance, in Türkiye, there is discussion about whether Türkiye is contributing state funds for projects like energy infrastructure and pipelines in Kazakhstan and Turkmenistan. People are curious about the exact figures to be transferred from treasury to the investments in other countries.
As with any international financial institution, all decisions regarding project financing and prioritization will be made by the Board of Directors. The interests and contributions of each country will be considered, and there won’t be any “losers”—only winners.
Thank you very much for this great interview, Ambassador. It sounds like many things are still in progress, but can you give us one headline for now? Which region of the world is most likely to cooperate with you on large-scale projects in the near future? Will it be Europe, Asia, Russia, or the Gulf countries? What will be the biggest surprise regarding Turkic Investment Fund cooperation?
First of all, the Turkic Investment Fund is a newly established financial institution, and we will commence our operational activities on January 1, 2025. We are in close contact and negotiations with financial institutions in Europe, Asia, the Islamic world, and the Arab world. We see strong interest from their side, and we are equally eager to develop relationships with them.
I think the biggest surprise will be our success in the Turkic region, within our member states. We are seriously committed to contributing to the economic development of our countries and supporting entrepreneurs who are working together on joint projects. We are here to support them and encourage more joint ventures among the Turkic countries and their companies.
As I mentioned, the ultimate goal is to contribute to greater economic integration among the Turkic countries, which will serve as the foundation for a more united Turkic world. This is our main purpose.
Thank you, Ambassador Baghdad Amreyev, for this diplomatic interview. We look forward to hearing more after January 1, when the policies, investments, and projects of the Turkic Investment Fund are officially launched.
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