Anti-Capitalism Debate Marx or Markets: German Politicians Debate the Dangers of Capitalism

In the run-up to pivotal regional elections in the German state of North Rhine-Westphalia, the country's most populace state, the national leader of the Social Democratic Party has unleashed a firestorm of criticism with his attacks on big business.

Franz Muentefering has had it with corporate CEOs and foreign companies that put profits before people and enjoy fat-cat salaries.

Two weeks ago, the head of Germany's ruling Social Democratic Party (SPD) compared private equity firms to a "swarm of locusts" that "graze" on under-priced businesses, lay off employees and then proceed to resell the firm for a sweet profit. Executives of these companies, he said, are "extremists with no sense of responsibility." And this weekend, Muentefering upped the ante by circulating a so-called "locust list" within his party, linking company names and faces to the crop-destroying insects, which are used to symbolize destruction in the Bible.

Critics say that Muentefering's words are aimed at disenchanted voters in North-Rhine Westphalia, which is due to have elections in just a few weeks. The area is a traditional labor-stronghold with high unemployment which has suffered from the negative effects of globalization: manufacturing jobs have moved to Eastern Europe and Asia while wages have fallen under pressure from cheaper foreign competition.

Muentefering is however trying to prove to skeptics that his words are more than simply pre-electoral posturing: He has called for a raft of laws that would better protect the German market from wage dumping by introducing tighter controls on foreign companies, particularly those from Eastern Europe. He also wants business taxes to be standardized across the European Union in order to eliminate the competitive advantage enjoyed by countries with low corporate tax rates. Not surprisingly, Müntefering's campaign has riled investors here. The government's strategy, said Markus Reinwand, a market strategist at Frankfurt's Helaba Trust, sends out the wrong message. "The capitalism debate certainly isn't beneficial to foreign investors," he warns. After all, the government has recently implemented reforms intended to strengthen the economy. Now, he says, the debate could raise fears among foreign investors that the government may roll some of them back.

Bavarian Governor Edmund Stoiber, who heads the conservative Christian Social Union party, told SPIEGEL ONLINE the SPD was contradicting itself with the campaign. "The SPD can't liberalize the market while simultaneously describing foreign investors as locusts," he said. "That is downright counterproductive and damaging."

But Muentefering has defended his comments, saying he isn't attacking business in general -- just its excesses. The power of business and the state, he has warned, has "fallen a little out of balance." Muentefering's bogeymen are managers like Josef Ackermann of Deutsche Bank, whose behavior he has described as "disastrous to the image of democracy." Deutsche Bank recently laid off thousands of employees while at the same time posting record profits.

Still, Müntefering's strategy has also put members of the Green Party, the Social Democrats' junior-coalition partner, on the defensive. Known for their critical positions on globalization and commerce, some of the party's heaviest hitters have come out swinging at the Social Democratic leader. "Companies have to be able to make profits, otherwise there wouldn't be any jobs," Katrin Göring-Eckardt, head of the Greens' parliamentary group, told the Berliner Zeitung newspaper this week.

Was it anti-Semitic or just a poor choice of words?

The most controversial critique, however, came from Michael Wolffsohn, a Jewish professor of contemporary history at the Bundeswehr University in Munich. He said that Müntefering's locust comparison was no better than Nazi rhetoric. "People are again being equated to animals," he wrote in the Rheinische Post newspaper. The only thing missing from Muentefering's remarks, he added, was the Nazi description of a "plague" which must be exterminated. "Today people call this 'plague' 'locusts', and back then, they called it a pack of 'rats' or 'Jewish swine'," he wrote. His words hit like a bomb, showing just how carefully public figures need to choose their words, even 60 years after the war.

An editorial in the Financial Times Deutschland on Wednesday picked up the same analogy and even called for Muentefering's resignation. "One should assume that modern German politicians have learned two things from history: you should never compare humans with insects and that you should never create a black list of opponents."

Despite all this high-ranking SPD members are standing behind their man, calling Wolffsohn's remarks "ridiculous" and "incomprehensible." And Paul Spiegel, the head of the Council of Jews in Germany, said it was "absurd" to "insinuate that Muentefering and the SPD are anti-Semitic."

Beyond the semantic squabbling, political analysts in Germany are looking for deeper meaning in Muentefering's anti-capitalist push. Is this a calculated political strategy, a desperate last-ditch effort to turn around the polls in North-Rhine Westphalia? Or does it mark the slow re-emergence of the left-wing of a party that has for decades struggled to find the appropriate balance between Marx and the markets? The party's left has shown a vitality recently that hasn't been seen in years. And it makes no secret of the fact it would like to raise taxes to fill empty public coffers, even though the official SPD party line calls for a reduction of corporate taxes from 25 percent to 19 percent. Just how much does the anti-capitalist rhetoric bear the stamp of German Chancellor Gerhard Schroeder?

One ear to business, the other to the anti-capitalists

In public, Schroeder has carefully fostered two personas. The first supports Muentefering by peppering speeches with pledges to fight "wage dumping and exploitation." He's also said that "responsible businesses don't seek short-term maximization of profits at any price" and he's warned against the emergence of an "unfettered neoliberal system."

The second Schoeder has one ear constantly turned to Germany's important top businessmen, including consultant Roland Berger, who has warned the chancellor that his statements are "not a game, but rather irresponsible and cheap propaganda."

The role Schroeder is playing here might best be described as that of a "participating observer" -- he's a proven tactician and expert in difficult situations like this. He's constantly assessing the opportunities and risks posed by Müntefering's capitalism critique.

And unlike previous recent regional elections, where Schröder's structural reforms were directly to blame for party losses, this time he's got Muentefering as a scapegoat should things go awry. If the party loses on May 22, he can blame his party boss.

According to Spiegel reporters, Schroeder and his chief of staff have been a lot clearer in their positions within their own inner circle. Both have repeatedly emphasized that the chancellor is not bound to any anti-capitalist strategy. And at a meeting held between Schroeder, Muentefering, Economics Minister Wolfgang Clement and Finance Minister Hans Eichel, all agreed the government had to continue with the structural reforms laid out in the Agenda 2010 package, which among other things has reduced benefits to unemployed people.

But so far, at least, the double-pronged strategy hasn't boosted Schröder's party in the polls, which indicate that the Social Democrats face almost certain defeat in North-Rhine Westphalia. A survey taken by pollster Infratest Dimap shows the conservative Christian Democratic Union leading in the state, with 45 percent of voters, whilst the SPD are lagging way behind with 35 percent. Whoever wins, one thing is sure: to change that sort of lead before voters go to the polls on May 22, will certainly take more than populist catchphrases on the iniquities of big business.

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