The Red-Green Paint Comes Off

[John Mage’s Note: A version of the following article appeared in German in the weekly Freitag on July 8, 2005. On July 21, the German president agreed to the call for new elections in the fall. The latest polls indicate that support for the new Left Party continues to rise and is now at twelve percent. Of particular interest, these polls show a majority for neither of the two wings of what Dr. Altvater refers to (in literal translation) as the German “Neoliberal Unity Party” (a mocking reference to the name of the governing party of East Germany — the Socialist Unity Party), a phrase translated below as “the neoliberal one-party-state.” That is to say, if the election results track this poll then neither the current governing coalition of the Social Democrats and Greens nor the current parliamentary opposition of the Christian Democrats and Free Democrats would be able to form a majority government. The likely result would be a “grand coalition” of the two wings of the “Neoliberal Unity Party,” making what Dr. Altvater describes as the disguised underlying state of affairs into an official reality! We hope to follow closely these very positive developments in this space.]

One year after the Red [Social Democratic]-Green victory in the 1998 German election, the Prokla Magazine for Critical Social Science published a booklet on the theme of the collapse of the Red-Green coalition. This was not an attempt to create a self-fulfilling prophecy. Rather, the articles analyzed Red-Green domestic and economic policy. Conclusion: failure was unavoidable, the goals of job creation could not be met with the measures planned — instead the measures would cause many human beings to fall into poverty. That was in 1999, and is still relevant to the year 2005.

The chronicle of the long-expected fall of the Red-Green government begins with the breach of their election promises immediately after the 1998 election victory. At that time, Oscar Lafontaine [then a leading Social Democrat, and finance minister in the coalition government] criticized this breach fiercely. Possibly he was not critical enough. His surprising and spectacular resignation on March 11, 1999 from all his posts underlined the pressures which the Red-Green government had caved to from the very beginning. The programmatic agenda approved by the voters in 1998 and 2002, whose realization would have meant a Red-Green project of some duration, was reworked into a contract of adjustment to the inherent pressures — above all economic — of globalization.

This was served up at first with nebulous talk of “governance in the 21st century” in a “Third Way,” and was advanced by a new crew of politicians. This “Third Way” was not formally decided [at party conventions], but was entirely informal. In typical Red-Green governing fashion, this was outfitted with commissions and advisory boards in all the formally responsible institutions, though primarily fashioned in Parliament. Most important of all, the “Alliance for Jobs” which appeared at that time, made no lasting impression — it clearly failed to meet its own stated goals and was thus replaced by the [neoliberal] Hartz Commission. This preference for informal politics weakened the parties of the coalition, but conversely did not strengthen the Chancellor and head of the party, Schröder. The seething dissatisfaction in Parliament became louder and louder over the years, and Schröder has now fallen back on this dissatisfaction to justify the arranged failed vote of confidence [and call for elections in the fall].

But it’s not a question of style and form alone. Red-Green politics has diverted the income-stream of the citizenry to the benefit of entrepreneurs and the well-to-do, as well as at the expense of those who depend on earned incomes and transfers from the state. Certainly it was clear to everyone in 1998 that there was no going back to the social democratic welfare state of the 1970s. But there was also a consensus that a neoliberal-oriented demolition of the welfare state was out of the question.

This was approximately the line of “Superminister” Lafontaine, who wanted higher taxes on the rich and consumption-oriented job creation in order to reduce unemployment. On the international level, Lafontaine strove for a reduction of real interest rates and managed exchange rates, in order to reign in the market volatility responsible for financial crises.

These intentions were, as we know, not well received. Lafontaine had underestimated the sheer weight of globalization, the bitter resistance of “the markets,” and the witch-hunts of the mass media (he was called “the most dangerous man in Europe”). He clearly had no chance against their power — and no support from Schröder. For the Chancellor, with full support from his Green coalition partners, had already decided on an alliance with “the markets.” He proved to be the “modern” neoliberal buddy of the bosses.

These latter didn’t even think of investing their huge profits, served up to them by the Red-Green government on a platter, in jobs. The returns in global financial markets looked more promising than the profits which could be harvested by investments in jobs.

Since the Red-Green government had by its gifts to the corporations and the rich permanently ensured a deep financial crisis (and violated the Maastricht requirements), there was no chance of pursuing a jobs policy by investing in the public sector. The labor market reforms from Hartz I to IV had no effect, because — leaving aside their monstrously bureaucratic implementation — the supply of jobs was left up to the profit-calculations of the private sector. The most which the Red-Green coalition hoped for were voluntary additions, for example in the creation of internships. But the bosses knew already that they could run rings around this government and nothing would happen to them if they didn’t keep their promises. The last great Red-Green coup was the legalization of hedge funds and private equity funds in 2004. These promptly began to bash Germany’s competitiveness [“Standort Germany”], and threatened to ravage even large, traditional firms or — as they say — to restructure them. It didn’t matter how many jobs were destroyed in the process.

Then finally it dawned on the Social Democratic leadership that they could not burden the social democratic soul forever, that the limits of faith in free markets, the benevolence of capital and of the sacrifice being demanded of the lower strata had been reached — as Lafontaine said, not without justice — in an “indecent manner.” Canny election strategists must have advised Müntefering [head of the SPD parliamentary faction] to cry “Stop thief” and to furiously scold the capitalists who rake off their profits but don’t want to invest anything. All of a sudden, everyone in Germany is talking about “capitalism,” and in polls nearly 70% now have something critical to say about capitalism, as we know.

The Greens have pursued this verbal scolding of capital with especial outrage. But they are so deeply rooted in the urban middle of society that they have little to fear from cuts in the welfare net — this, too, is a reason for the crumbling of the Red-Green project. The neoliberal quick-step has led to the fact that the electoral basis of the Greens has, to a great extent, shifted over to the “postmodern” existence of an urban middle class. But the traditional base of the SPD has to bleed. The victims are already being written off — though the promised [but so far nonexistent] successes of the so-called reforms aren’t supposed to be an issue.

The tragedy of the end of the Red-Green government is that there is a high probability that a Black-Yellow coalition [i.e. between the conservative CDU/CSU and the liberal FDP] will now continue all the “reforms” which the Red-Greens began, only with more force. The probable change of government is a fitting expression of continuity. Neither the SPD nor the Greens can really form a credible opposition to this. It is after all their own neoliberal project that is being perpetuated. It was always black [i.e. the color of the conservative CDU/CSU] and only had a coat of Red-Green paint.

That is why it is so important for the democratic development of this country that the new Left Party be represented as strongly as possible in Parliament. The opposition against the “pensée unique” [French: mandatory thought, i.e. neoliberalism], against consensus-thinking, and also against the neoliberal one-party-state in yellow, black, red, and green, is more important than ever before in recent German history.

Translated by Dennis Redmond

[“Wenn der Lack ab ist,” the original article in German, is available at <>.]

Elmar Altvater
is Professor of Political Science at the Free University of Berlin.