Analytical Perspectives in the Corona Crisis - Sabine Riedel
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7 / 2021
&
Sabine Riedel
Analytical Perspectives in the Corona Crisis
"Conspiracy Theories", Maoism, Structural Analysis, Modern Money Theory, Bio-Power and
(Trans-)Humanism 1
“Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the
human family is the foundation of freedom, justice and peace in the world, Whereas disregard and contempt
for human rights have resulted in barbarous acts which have outraged the conscience of mankind, […], The
General Assembly, Proclaims this Universal Declaration of Human Rights […].“ (UN, 10.12.1948)
In the Corona crisis, the voices of experts in social or political science are hardly heard. Many are
concerned with the deficits and conflicts of other countries, but there seems to be little interest in
the preservation of our own democratic culture. However, it needs to be explained why fundamental
rights have to be restricted in order to manage the dangers of a pandemic. Why is Europe going the
Chinese way with lockdowns and de facto forced vaccinations instead of trusting the expertise, cre-
ativity and self-regulation of open societies? This article shows why this can only lead to a dead end,
in mass surveillance and drug dependency that reduces people to the intellectual level of machines.
This study is intended as a plea for a revival of humanistic values and is based on a meta-theoretical
analysis of Corona politics with five approaches. First, the catchword conspiracy theory is taken up,
which does not exist in any research discipline, but serves to control public discourses. This can be
used to denounce any political scientist who studies open and hidden stakeholder interests. In free
societies, such defamations contradict the press code; in authoritarian regimes like China, they are
a tool for ostracising government critics. Beijing's current Corona policy is not only rooted in Mao-
ism, it also rhetorically harks back to the Cultural Revolution that victimised millions.
Currently, Modern Monetary Theory (MMT) is on everyone's lips because it gives politicians the
green light to print money in the Corona crisis. In combination with structural analysis, the risks
become visible: A second "level of instrumental measures" has been established in the European
Union (EU), which controls finances outside the EU treaties and national law. This loss of control
also affects health policy. The approach of bio-power shows that its dissolution leads to a "seizure
of power over the humans as living beings". Transhumanism glosses this over with the promise of
an evolutionary leap forward. Humanists, on the other hand, rely on a future in which people can
preserve and develop their self-determined, creative nature.
Despite a year full of setbacks and ever new to reflect and examine what information is offered.
cases of corruption in the health sector, critics of Today the media no longer seem to trust this
the current Corona measures are defamed as mechanism of self-regulation in complex infor-
conspiracy theorists. But it is precisely this taboo mation societies, so that they intervene to regu-
that prepares the ground for more and more spec- late. Therefore, the present analysis begins with
ulation. Because the citizens of free societies go the term "conspiracy theory". It should be
through an education system that enables them shown by way of example that it is a creation of
1
This article is a translation: Sabine Riedel, Analytische Perspektiven in der Corona-Krise. „Verschwörungstheorien“,
Maoismus, Strukturanalyse, Moderne Geldtheorie, Bio-Macht und (Trans-)Humanismus, in: Forschungshorizonte Po-
litik und Kultur (FPK), Vol. 5, No. 6 (2021 May 10), 30 pages.
2021 May 24
Prof. Dr. Sabine Riedel, associated Professor of Political Science, University of Magdeburg,
Senior Researcher, Stiftung Wissenschaft und Politik, Berlin, kontakt@sabineriedel.de
Sabine Riedel: Analytical Perspectives in the Corona Crisis
media language to steer public discourses and the dangers of establishing authoritarian govern-
prevent scientific debate. ment structures at an early stage.
If one looks for theoretical models to explain Since the Corona measures essentially con-
the global anti-Corona policy(ies), the social con- cern health policy, the approach of bio-power by
cept of Maoism and China‘s Cultural Revolution the French philosopher Michel Foucault should
are at the top of the list. After all, the corona pan- not be missing. As early as the 1970s, he coined
demic first spread in the Chinese metropolis of the term bio-politics to initiate discourses on the
Wuhan, even if the origin of the Covid-19 virus opportunities and risks of medical-technical pro-
has not yet been clarified. Since there are tangi- gress. Why hardly anyone remembers his valua-
ble economic interests behind this rather cultural- ble analyses today, although they could not be
theoretical approach, a search for current eco- more relevant? His theses contrast in particular
nomic or financial theories is obvious. This leads the statements of the transhumanism move-
to the concept of Modern Monetary Theory ment founded in 1990. The name hides a political-
(MMT). Its interesting feature is the oscillating ideological worldview that remains contradictory
character between (social) liberal and etatist in- in itself: It promises humans ("homo") the over-
struments of fiscal policy, which challenge market coming ("trans-") of their biological limitations
economies based on the rule of law. Less topical, through technical-medical aids. On the other
on the other hand, is the structural analyse from hand, there is talk of replacing them by cyborgs
the time of the Nazi regime. However, it is worth (cybernetic organisms). This contrasts to human-
taking a look at the work of the founder of German ism as an intellectual current that focuses on the
political science, Ernst Fraenkel. His main work, human being as a self-determined individual. Like
the "Dual State", not only offers an explanatory liberalism, it belongs to the cultural and historical
model for the seizure of power by a totalitarian re- heritage of Europe and paved the way for demo-
gime before the beginning of the Second World cratic, social and humane concepts in the first
War. His approach can be generalised to identify place.
Figure 1
Source: Own compilation.
This MT approach grid pro-
vides an overview of selected
theoretical approaches in the
social sciences and shows
their interactions. Complex
approaches that take into ac-
count economic, political as
well as cultural or societal fac-
tors, have been placed in the
centre of the chart, while
more technically differentiated
theories have been placed in
the margins.
At the end of the article, see a
conclusion on the colour-
coded theoretical approa-
ches as applied to this
topic. Further examples of
application in:
culture-politics.international
2 FORSCHUNGSHORIZONTE
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7 / 2021Sabine Riedel: Analytical Perspectives in the Corona Crisis
1. The „conspiracy theory“ is an external make them accessible to knowledge. This con-
attribution intended for manipulation cern is entirely in the service of democratic sys-
tems, whereas the catchword "conspiracy theory"
Since the beginning of the Corona crisis, media renders relevant questions about actors and their
newsrooms have been dealing with so-called hidden intentions implausible and ridiculous.
"conspiracy theories". This is understood in the Such an approach is not common in an open re-
popular sense to mean assumptions or hypothe- search culture; ideally, scientific doubt comes
ses that attempt "to explain a situation, an event first. Moreover, theories are not either "true or
or a development by means of a conspiracy" false". This binary logic is considered outdated
(wikipedia.de, 10.5.2021). From this definition of even in today's age of quantum computers (zeit.
the term of a widely read internet platform it fol- de, 2.5.2014). Rather, science is always con-
lows: The authors of such assumptions mostly do cerned with the question of whether and to what
not refer themselves to a “theory” in the sense of extent theoretical models can explain reality.
a more complex set of ideas. They often just want Some theories have a wide range, others are only
withheld information on a particular issue to be valid under certain conditions, still others prove to
disclosed or verified. They usually want to initiate be outdated, which does not make them "wrong"
a public discourse in which they can be heard. either. Finally, there are such complex hypothe-
The term "conspiracy theory" is at first the for- ses that their verification requires a lot of money
eign description of another, outside person. How- and a whole team of experts (cf. the topic of vac-
ever, the latter does not adopt the role of a medi- cine approval), so that results are even longer in
ator to take up the desire for a fair exchange of coming. The most important thing, however, is
information and arguments. Rather, the use of that a free research culture is always character-
this scientific-sounding term aims to cast doubt ised by a pluralism of theories: "Not the sequence
even before the assumptions made, whether pre- and replacement of one paradigm by another [...],
sented by laypersons or experts, are examined
and, in a second step, to push the author in ques-
tion out of the discourse. This often happens by Figure 2
discrediting his professional reputation or expos-
ing his personal weaknesses.
Dealing with public criticism in this way not The Ministry for State Security (MfS) of the
only contradicts the press code, with which jour- GDR and the Strategy of Decomposition:
nalists have committed themselves to truth and "’Decomposition' as a method of dealing with politi-
the preservation of human dignity (Pressekodex, cally undesirable citizens emerged as an alternative
11.9.2019). It is above all an instrument of author- strategy to avoid overt, legal prosecution. […]
itarian systems to silence unpleasant critics. As In the run-up to a planned 'decomposition', the Stasi
looked for a person's weak points in order to take ac-
reported by victims of the authoritarian socialist tion precisely there. These were explicitly aimed at
state of the GDR, the then former Ministry for destroying individual dignity. Depending on their ef-
State Security (MfS) regarded "politically undesir- fectiveness, the Stasi spread slanderous rumours, in-
timidated, interfered in the professional environment
able citizens" as "opponents" or "enemies" whose and private life, criminalised the actions of those af-
individual dignity was to be destroyed. The Stasi fected and organised massive interference in every-
worked not only with slander, rumours and intim- day life. […]
idation. Fear, panic and confusion" as well as the The writer and former political prisoner Jürgen Fuchs
described the strategy of 'decomposition' as an 'at-
destruction of personal relationships were also tack on the soul of that person'. The 'target person',
part of their arsenal (cf. Figure 2, demokratie- the 'opponent' or the 'enemy', as the Stasi referred to
statt-diktatur.de, 10.5.2021). people in the files, was to be unsettled by the Stasi's
measures. They shouldn't be able to do anything
However, the term "conspiracy theory" is not other than deal with their collapsed lives. […]
only used to discredit individuals. A second func- The aim of "decomposition" was to destroy self-confi-
tion affects research itself, especially the eco- dence. The Stasi wanted to create fear, panic and
nomic and social sciences, and especially politi- confusion, deprive its targets of the love and security
of friends and family, provoke disappointment and
cal science. Because the subject of study are dissatisfaction or achieve public stigmatisation. They
usually actors and their interests. Assumptions wanted to destroy the constants of a human life step
about needs and hierarchies of needs" are a pre- by step. […]”
requisite for researching them (Nohlen 1998: 280
Source: Die Strategie der Zersetzung, in: Demokratie
f.). The scientific analysis clearly distinguishes statt Diktatur, Stasi und die Menschenrechte, demokratie-
between "manifest and latent interests" (loc. cit.), statt-diktatur.de, 10.5.2021 [Translation and highlighting
blue: S.R.].
i.e. it also wants to expose hidden levels and
3 FORSCHUNGSHORIZONTE
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7 / 2021Sabine Riedel: Analytical Perspectives in the Corona Crisis
but the plurality and competition of political-theo- For this reason, the accusation of belonging to
retical designs are the hallmark and stimulating a "conspiracy theory" is rarely made by scientists.
element in the research process of political sci- It is always journalists who want to give their
ence" (Nohlen 1995: 656). doubts a scientific aura. Most of the time, the
knowledge they have acquired is juxtaposed with
the professional experience of skilled scientists.
The mere attempt to assess a research topic that
Figure 3
has been analytically conceived and worked on
over months by means of a "fact check" carried
Interview with Roland Wiesendanger on out in a few hours or days shows incompetence
his study on the laboratory hypothesis: and ignorance of scientific achievements. A clear,
Question: […] What evidence have you collected and
current example of this is the study by the physi-
analysed that you have now come to this conclusion? cist Roland Wiesendanger on the origin of the
Yes, on the one hand, these corona viruses that are
Covid-19 virus, which is discussed here as an ex-
triggering the current pandemic have special proper- ample.
ties. They can dock particularly easily onto human On the very same day that the University of
cells and then penetrate them, so that very easy
transmission from person to person can occur. And
Hamburg announced the Wiesendanger study
this is actually a characteristic that previous corona (uni-hamburg.de, 18.2.2021), the Second Ger-
viruses did not yet have, i.e. corona viruses have trig- man Television presented a "fact check" on this
gered pandemics or epidemics before, such as SARS
and MERS. But in none of the cases has there been
at 21:01. Two journalists headlined "Hamburg
a global pandemic. These are indeed new properties university spreads questionable theory" (zdf.de,
that we have not previously seen in corona viruses. 18.3.2021) and accused the author of technical
And the interesting thing is that there have been sci- deficiencies already in the subtitle: "The sources:
entific publications in the specialist literature describ-
ing, how a group of researchers from the Wuhan In-
among others 'Focus', Twitter and Youtube." Ap-
stitute of Virology have carried out precisely such ex- parently, they hadn't read the foreword of the
periments to make corona viruses more infectious, study, which had been uploaded to the network
more dangerous and, unfortunately, as we have to
see, also more deadly for humans. For ten years
researchgate.net four days earlier. In it, the au-
now, this so-called gain-of-gunction research has thor reveals the concept, methods and objectives
been the subject of criticism at the international level of his project: "The study is based on an interdis-
by many scientists, but also by politicians. Such re-
search was banned during the Barack Obama admin-
ciplinary scientific approach, i.e. not on an exclu-
istration in the USA between 2014 and 2017 and was sively subject-specific view, as well as on exten-
discussed by the German Bundestag and the Ger- sive research using all conceivable sources of in-
man Ethics Council as early as 2014 […]
formation." (14.2.2021, vgl. Wiesendanger 2021:
In this context, it is important to emphasise that scien-
tists already estimated in 2012 that there is an 80%
3) For this purpose, he lists six different types, sci-
risk of a global pandemic in the next 10 years, i.e. by entific literature in first place, print, online and so-
2022, based on this dangerous gain-of-function re- cial media in second last place. The author adds:
search. And we absolutely must prevent further pan-
demics from occurring in the future. This means that
"The references to this study have been struc-
every scientist is in fact asked to contribute his tured accordingly in order to achieve a clear dis-
knowledge and his possibilities to ensure that this tinction between primary scientific literature (with
topic is now really taken seriously from all sides and
that, in the end, there is also public pressure. […]
and without peer review) and published expres-
It is also extremely important for policy makers to
sions of opinion". (op. cit.) The journalists obvi-
know, was it a laboratory accident or was it a natural ously picked out the opinions, so that the reader
zoonosis [transmission from animal to human, S.R.]. should doubt the seriousness of the study right at
Because the consequences and ultimately the deci-
sions that would have to be made would be com-
the beginning of the "fact check".
pletely different in both cases. [...] What is crucial for The ZDF editorial staff used such dishonest
the future of our children and grandchildren is methods not only to question the study itself but
whether such pandemics will recur at regular inter-
vals, because the danger has not been averted. […]
also the credibility of Roland Wiesendanger as a
And in the end, one can still argue that it was a zoon- person. They claimed that they had conducted an
osis. But the fact is that this high-risk gain-of-function interview with him in which he admitted not want-
research has done nothing at all to help us be better
prepared for this global pandemic, that has become a
ing to publish a scientific study: "His paper was
reality. That means that we have to work towards 'not intended for the scientific community, but for
banning this kind of research globally, as the US gov- the public', he told ZDF heute." (zdf.de, 18.3.2021)
ernment has already done from 2014 to 2017."
However, these and other words have been put
Source: Hamburger Professor sicher. „Corona kam doch into his mouth and twisted with manipulative in-
aus einem Labor in Wuhan!“ in: bild.de, 18.2.2021 [Trans- tent, as reported by the author in the following
lation and highlighting blue: S.R.].
words on the ZDF "fact check": "I was blown away
4 FORSCHUNGSHORIZONTE
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7 / 2021Sabine Riedel: Analytical Perspectives in the Corona Crisis
because it contained nothing at all of what we had explosive contents, it is disconcerting. For before
mainly talked about." (achgut.com, 16.3.2021) and after the Wiesendanger study, there is en-
Moreover, he was not asked by the editors to re- couragement from experts. Worth mentioning is
lease his quotes, as is otherwise customary in the the assessment of the French Luc Montagnier,
media business. Thus, the accusation of technical winner of the Nobel Prize for Medicine in 2008
deficiencies falls back on the two journalists and discoverer of the HI virus of the immunodefi-
themselves. ciency disease AIDS. In an interview a year ago,
Journalists who immediately jumped on the he already expressed the view that Covid-19 was
bandwagon are also partly responsible for this artificially produced in a laboratory because tra-
misconduct of the media. These include well- ces of the HI virus can be detected in it (timesof-
known media companies such as Die Zeit (zeit. india.indiatimes.com, 19.4.2020, cf. also: You-
de, 19.2.2021), Stern (stern.de, 20.2.2021) or Ta- tube, 5.1.2021). "Fact checkers" have again
gesspiegel (tagesspiegel. de, 20.2.2021). The found its arguments to be "false" (correctiv. org,
news magazine Der Spiegel even adopts un- 20.5.2020). The fact is, however, that the origin of
checked the invented quotes of the ZDF journal- Covid-19 has yet not been clarified. Only recently,
ists and concludes that "here someone wants to the World Health Organisation (WHO) confirmed
provide a pseudo-scientific basis for conspiracy that there is no evidence for the favoured zoono-
storytellers" (spiegel.de, 19.2.2021). Apparently, sis theory (who.int, 26.3.2021). Therefore, 14
they are not aware that they are describing their states demanded independent investigations
own approach. But not only Der Spiegel calls from China, taking into account all origin hypoth-
Wiesendanger's publication "scientific non- eses (zeit.de, 30.3.2021). In addition to the USA,
sense". Deutsche Welle's fact checkers also ex- Israel, Canada, Australia, Great Britain and Nor-
plain to their readers "Why the term 'study' does way, this initiative is supported by six EU member
not fit here" (dw.com, 20.2.2021). They cite sci- states, Estonia, Latvia, Lithuania, Denmark, the
ence journalists as key witnesses. In other words, Czech Republic and Slovenia (state.gov,
they use exactly the same kind of publication 30.3.2021).
sources for which they dismiss Wiesendanger's
study as non-scientific. 2. China‘s Covid-19 Policy in the Context
Nevertheless, in this case there were journal- of Maoism und Cultural Revolution
ists who adhered to the press code, in addition to The recent call by 14 countries for further inde-
internet media (cf. achgut.com, 19.3.2021, tichys- pendent research to test the four hypotheses of
einblick.de, 19.3.2021) as well as the Bild-Zei- origin is supported even by the Director-General
tung. There Roland Wiesendanger had his say in of the WHO. Tedros Adhanom Ghebreyesus re-
detail in an interview (bild.de, 18.2.2021, cf. Fig- marked on the findings of the investigation team’s
ure 3). This gives the impression that the labora- report (WHO-China Study, 30.3.2021: 9) stating
tory thesis on the origin of Covid-19 is being scan- “that there was widespread contamination with
dalised because it affects sensitive security inter- SARS-CoV-2 in the Huanan market in Wuhan”
ests that also involve a lot of money: Chemical la- (WHO DG, 30.3.2021). However, the role of ani-
boratories around the world are conducting gain- mal markets is still unclear and the laboratory hy-
of-function (GoF) research, producing new, ge- pothesis cannot be ruled out: „Let me say clearly
netically engineered vaccines that could be used that as far as WHO is concerned all hypotheses
as dangerous biological weapons in other con- remain on the table.“ (op. cit.) He also confirmed
texts. For years, there has been the danger of a that the team “expressed the difficulties they en-
"possible pandemic, caused by the accidental re- countered in accessing raw data” and added: “I
lease of artificially created viruses from genetic expect future collaborative studies to include
engineering laboratories, with incalculable dan- more timely and comprehensive data sharing.”
ger potential for mankind" (Wiesendanger 2021: (op. cit.)
52). Under international pressure, Barack Obama While Western countries base their Corona
had banned this research in the United States. As policy on the two zoonosis hypotheses (with and
a result, it was outsourced to the Wuhan Institute without an intermediate host), China assumes
of Virology in China (p. 63), despite the known se- that Covid-19 was transmitted through the "(cold)
curity deficiencies (p. 77). chain products", i.e. through frozen products. Be-
To support these claims, Wiesendanger has cause this last of the four hypotheses cannot be
peppered his study with documents. When jour- ruled out, Chinese health authorities claim on this
nalists make this formality the standard of their basis that Covid-19 was imported from abroad
judgement instead of taking up and examining the (scmp.com, 10.2.2021). In this way, Beijing wants
5 FORSCHUNGSHORIZONTE
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to get Wuhan out of the headlines as the place of shops and stopped all air and train connections
origin of the pandemic and divert attention from (n-tv.de, 24.1.2020). This extent of mass quaran-
its own responsibility. The EU representation in tine was unprecedented in human history. There-
China has already bowed to a corresponding cen- fore, foreign observers initially doubted that the
sorship by the China Daily (sueddeutsche. de, population would be sufficiently supplied with
6.5.2020), probably in order not to put any addi- food and medicine under these circumstances.
tional obstacles in the way of the investment Panic reactions for fear of infection were to be
agreement. But their " hasty obedience " is likely feared (sciencemediacenter.de, 24.1.2020).
to have damaged the work of the international ex- After a good 12 weeks, the Chinese govern-
perts of the WHO Commission. Relevant data will ment lifted the quarantine over Hubei and an-
only be accessible, however, if Chinese " mask nounced the end of the pandemic in China a fur-
diplomacy" (zeit.de, 20.3.2020) is confronted with ther six months later (welt.de, 17.10.2020). At the
critical questions. same time, EU member states were preparing for
However, there is no reason to relativise hu- a second wave and a further nationwide lock-
man rights violations in consideration of economic down, which has already lasted six months. Jour-
interests (wiwo.de, 1.2.2021). On the one hand, nalists from Western democracies explained this
the EU member states have their own liberal eco- discrepancy in different ways. On-site correspon-
nomic and social systems at stake. On the other dents attributed the supposed success with an
hand, with the outbreak of the Corona crisis, the undertone of admiration to the rapid reaction of
Chinese government's repressive rule techniques the authorities with lockdowns and mass tests:
have tightened drastically. On 23 January 2020, "Test immediately, don't wait for people to de-
Beijing reacted overnight by locking off approxi- velop symptoms." (tagesschau.de, 12.10.2020)
mately 43 million people in the Hubei region. Be- The reader gets the impression that the authori-
cause of the official 876 people infected with Co- tarian system has advantages because it does
rona and 26 deaths, the authorities closed all not have to take into account "personal liberties
or data protection" (op. cit.). From a distance,
journalists paint a different picture: "The coura-
Figure 4 geous Chinese citizen reporters who showed the
chaos, suffering and desperation of the people at
The State Council of the People’s Repub- the beginning have long since been arrested or
lic of China on the Social Credit System disappeared". (zdf.de, 22.11.2020) They report
that the Chinese government is instrumentalising
“[…] State Council Notice concerning Issuance of the
Planning Outline for the Construction of a Social its hypothesis of an imported pandemic to stylise
Credit System (2014-2020), 14.6.2015: the fight against Corona into a competition of sys-
[…] A social credit system is an important component tems.
part of the Socialist market economy system and the Indeed, the positive reports about China make
social governance system. It is founded on laws, reg-
ulations, standards and charters, it is based on a us forget the inhumane instruments the elites
complete network covering the credit records of mem- there use to keep themselves in power. For this
bers of society and credit infrastructure, it is sup- reason, other regimes are covered with sanctions
ported by the lawful application of credit information
and a credit services system, its inherent require- and wars by Western states, such as Iran, Rus-
ments are establishing the idea of an sincerity culture, sia, Libya and Syria. In the EU, 40 different sanc-
and carrying forward sincerity and traditional virtues, tion regimes are currently in force (dw.com,
[…].
9.2.2021), including against Belarus "In response
Our country is currently in the assault phase of deep-
ening economic structural reform and perfecting the to the brutality of the Belarusian authorities and in
Socialist market economy system. The modern mar- support of the democratic rights of the Belarusian
ket economy is a credit economy, establishing and people” (europa.eu, 17.12.2020). This deeply in-
completing an social credit system is an important
step in rectifying and standardizing the market econ- consistent behaviour of the EU's and many mem-
omy order, improving the market’s credit environ- ber states' foreign (trade) policy relations be-
ment, […]. comes all the greater when one considers China's
Budget controls must be strengthened in government ruling ideology. Despite various reforms in the
revenues and expenses, and transparency raised.
Strengthen and perfect mass supervision and public past decades, it has remained socialism. Article 1
opinion supervision mechanisms. […] of the Constitution (1982) defines it as a "demo-
Source: State Council Notice concerning Issuance of the cratic dictatorship of the people" based "on the al-
Planning Outline for the Construction of a Social Credit liance of the workers and peasants" (Constitution
System (2014-2020), State Council, 14 June 2014
[Translation and highlighting blue: S.R.]. 1982, Art. 1 and Preambel). The other citizens of
the state, such as the unemployed, the socially
6 FORSCHUNGSHORIZONTE
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weak, providers of knowledge ("intellectuals") or lise the masses to use open violence against re-
artists, are disadvantaged according to this prin- gime critics, rather it uses structural violence: In
ciple or must subordinate themselves to it. In ad- June 2014, the State Council decided to introduce
dition, there is the "principle of democratic cen- a social credit system by 2020. Officially, it serves
tralism" (Art. 3) " under the leadership of the Com- to "establish the idea of a sincerity culture" with
munist Party of China and the guidance of Marx- the aim of fighting corruption in the country and
ism-Leninism and Mao Zedong Thought" (Pream- building a "harmonious socialist society" (State
ble). Article 28 is also worth mentioning: anyone Council, 14.6.2014, cf. Figure 4). But after only
who questions the dominant role of the socialist five years, it has turned into a system of social
economy will be punished and re-educated. control under state supervision that electronically
China's socialist system is thus still in the tra- monitors the population across the board.
dition of Maoist ideology, which is comparable to As the Chinese State Council documents
Soviet-style Stalinism. That is why the process of clearly show, this concept is built on two basic as-
de-Stalinisation in the former Eastern Bloc from sumptions: Firstly, the modern market economy
1956 onwards led to a break with China, which is a credit economy and secondly, politics can
had remained Maoist. Doch die Reformversuche correct and unify this market economy order by
in Osteuropa bedrohten allmählich auch Maos transferring this economic principle to the entire
Führungsrolle. But the reform attempts in Eastern socialist society. This is exactly the self-image of
Europe gradually threatened Mao's leadership the Chinese type of "socialist market economy".
role. In reaction to his marginalisation, he sparked This distinguishes it from similar models in the for-
a cultural revolution from 1966 onwards (Erler, mer Yugoslavia or the states of the former East-
Kernig 1969), which was to end only with his ern Bloc in one important point: While reformers
death ten years later. Even though there is still no like the Czechoslovakian Ota Šik combined the
reliable data because this historical period is ta- socialist market economy with a democratisation
booed by Chinese historiography, Western sour-
ces estimate the death toll at 1.7 million and the
number of political persecutees in the tens of mil-
Figure 5
lions (Leese, 6.6.2016: 7).
Some parallels to today's Chinese Corona pol-
icy are thought-provoking. Even then, Wuhan Kai Schrittmatter:
played an important role as an industrial metrop- Die Neuerfindung der Diktatur. Wie China den digita-
olis. In the early phase of the Cultural Revolution len Überwachungsstaat aufbaut und uns damit her-
ausfordert [The Reinvention of Dictatorship. How
(bpb.de, 6.6.2016), there was a showdown be-
China is building the digital surveillance state and
tween two rival camps of the CCP, so that Mao challenging us with it], Munich 2018, quote, p. 184:
had to fear a loss of control. Today, historians
Huang Chunhui, Director of the Office
state: "The Wuhan Incident ushered in the final
for Creditworthiness on the pilot project
period of the Cultural Revolution that can be de-
in Rongcheng, in northeast China:
scribed as 'radical'." (Leese 2016: 66) Long years
"Director Huang takes a sheet, draws an egg, quickly
of state repression followed (op. cit.: 76f.). Mao's
cuts the top and then the bottom of the egg. ‘This is
role is also comparable to that of Xi Jingping, the society, he says: At the top, the model citizens. And
current Chairman of the CCP (since 2012) and at the bottom, those we have to educate.’
President of China (2013). While he shares the Then he explains the system. Every company and
every citizen in China takes part. Everyone is rated.
title of "supreme leader" with some predecessors,
At any time. In Rongcheng, every citizen receives a
he secured the privilege of an unlimited time in points account and starts with 1000 points. Then he
office at the People's Congress in 2018, just like can improve. Or worsen. He can be upgraded or
downgraded. You can be a AAA citizen (a 'model of
Mao (sueddeutsche. de, 11.3.2018).
honesty', for which you need more than 1050 points).
Similar to the goals of the Chinese Cultural Or an AA ('Excellent Honesty', with 1030 to 1049
Revolution, Xi Jingping also relies on a perma- points). You can also slip to a C with less than 849
points, 'warning level'. Or even a D with less than 599
nent "improvement" of the socialist system
points, then the system has identified you as 'dishon-
through a mobilisation of the masses. He himself est'. If so, your name is blacklisted, the public is in-
had been socialised at that time, i.e. he was one formed about you, and you become an 'object of sig-
nificant surveillance'. This is what it says in the man-
of the young people who were first incited against
ual of 'Administrative Measures on the Trustworthi-
supposedly corrupt party cadres and then sent by ness of Natural Persons' of Rongcheng Municipal
the regime to the countryside for re-education Government."
(focus.de, 19.6.2016, bpb.de, 7.8.2008, zeit.de, Note: [Highlighting blue: S.R.].
11.5.2016). But today's party elite does not mobi-
7 FORSCHUNGSHORIZONTE
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of state and economy in the Prague Spring (cf. voluntariness was probably not observed, the re-
Figure 1), the Chinese model aims to improve and search question of this screening program is ad-
complete the existing authoritarianism. With tech- mittedly of great importance – to this day. It was
nological help, the ruling elite is even reaching for to examine the risk of infection posed by people
totalitarian power over the entire country for this who tested positive for covid-19 but showed no
purpose (cf. also chapter 4). What else can the symptoms. The research results were probably
goal of "perfect mass supervision and public opin- already known to the Chinese authorities in the
ion supervision" (cf. Figure 4) mean? early summer of 2020, but they were not pub-
Covid-19 played into the government's hands lished until the end of 2020 (Cao, Gan, Wang,
in setting up such a social credit system. Accord- 20.11.2020). Thereafter, patients without symp-
ing to recent research, it has proved to be "a very toms of disease would hardly transmit the virus
flexible tool" to implement the new "pandemic-re- Esanum.de, 16.12.2020). Despite this crucial in-
lated regulations", especially in the current crisis sight - which China has apparently accepted and
(merics.org, 3.3.2021: 1). Citizens were black- stopped further lockdowns – the hypothesis re-
listed for not wearing a mask or for causing panic mains in the Western media that people tested
by filming an emergency operation (op. cit., p. positive without symptoms pose a great danger
16). However, this publication by a China Institute (DAZ, 26.2.2021).
in Germany is less interested in the social conse- Social science research cannot answer this
quences, but on the contrary recommends im- technical question, but it can point to the need for
provements to the social credit system. The pri- a discourse between experts. In mid-2020, the
vate technology sector, for example, is not yet in- WHO already reported on the Wuhan tests. Jour-
cluded, but has its own programmes, such as nalists from major media houses, however, took
Alibaba, to determine the trustworthiness of its over the discourse (spiegel.de, 9.6.2020). They
customers (p. 1). It is unclear whether the Chi- cast doubt on the expertise of Maria van Ker-
nese government has taken any notice of this. In khove, head of the WHO's emergency pro-
fact, Jack Ma, the founder of Alibaba and one of gramme, so that the opinion persisted that those
China's richest entrepreneurs, has recently fallen tested positively without symptoms "may have a
out of favour, so that his disappearance over sev- significant influence on the occurrence of infec-
eral months has triggered much speculation tion of the Corona pandemic" (aerztezeitung.de,
(manager-magazin.de, 15.3.2021). 11.6.2020). The research network Correktiv also
Amnesty International has documented in described the WHO expert's statement as a "mis-
more detail what really happened in China at the understanding". At the end of the newspaper re-
beginning of the lockdown in early 2020. The gov- port is it stated "that transmission by asymptomat-
ernment's plans proved to be inconsistent and ically infected persons is rare but possible" and "it
created new problems. Thus, the stop of all traffic is difficult to investigate further transmission of the
obstructed the access to hospitals. Censorship virus by infected persons without symptoms"
and control of important information further unset- (correctiv.org, 17.7.2020). This journalistic re-
tled people and made necessary corrective search leads to the question of who is allowed to
measures more difficult. The disclosure of per- label a person without symptoms as "sick" or as a
sonal data increased the fear of persecution and possible virus carrier, the doctor or the state bu-
discrimination and triggered panic reactions reaucracy? Chapter 5 returns to this socio-politi-
(Amnesty.ch, 7.2.2020). They were justified, as cally relevant topic.
arrests of government critics show. In mid-2020,
Xu Zhangrun, a professor of law at Peking Uni- 3. Modern Monetary Theory (MMT) advi-
versity, was arrested after he challenged the Co- ses money printing in the Corona crisis
rona measures (handelsblatt.com, 6.7.2020). On the surface, the pandemic has nothing to do
This includes the approval of insufficiently tested with Modern Monetary Theory (MMT), but it is
vaccines. In view of the great social and ideolog- crucial to understanding economic policy mea-
ical pressure, it can be assumed that mass vac- sures in the current Corona crisis. The following
cination will hardly be based on the principle of is not an economic assessment of the central hy-
voluntariness (newsweek.com, 31.3.2021). pothesis of the theory. Rather, its socio-political
The free will of citizens apparently plays little relevance is to be discussed, from which several
role even in the conduct of scientific studies. A fundamental research questions arise. Such an
few weeks after the lockdown in Hubei ended, al- analysis seems necessary because economists
most all 10 million inhabitants of the regional cap- use their expertise to comment on social issues
ital Wuhan were tested. Even if the principle of without taking due account of the experience of
8 FORSCHUNGSHORIZONTE
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7 / 2021Sabine Riedel: Analytical Perspectives in the Corona Crisis
the social sciences. There is often a lack of will to Figure 6
distinguish between politics and political science.
Conversely, one can agree with the criticism that
many social scientists neglect economic interre- The US Federal Debt at the End of Year
(1940–2025) in Million US Dollars
lationships. This deficit applies all the more to Eu-
ropean studies, which in recent years has be-
30,000,000
come a discipline of administrative science and
25,000,000
evades controversial topics of economists and
political scientists. This chapter aims to show that 20,000,000
such interdisciplinary cooperation is necessary to 15,000,000
tackle the Corona crisis. 10,000,000
For about a quarter of a century ago, American
5,000,000
economists developed the so-called Modern
Monetary Theory (MMT), which aims to solve the
1940
1944
1948
1952
1956
1960
1964
1968
1972
1976
1979
1983
1987
1991
1995
1999
2003
2007
2011
2015
2019
geschätzt
problem of excessive government debt. Accord-
ing to this approach, one could abandon the high Source: Own compilation,
trumpwhitehouse.archives.gov, 22.4.2021
economic principle that a balanced state budget
is the guarantor of price stability. Even high bor-
rowing would not automatically create the risk of
Stephanie Kelton on Modern Monetary
inflation. Provided that a state has its own cur-
Theory. Money is there to be created
rency and interest rates are below the percentage
growth of its annual economic growth, it can use US economist Stephanie Kelton is convinced that a
state can spend as much money as it wants if it has
money creation as an instrument of economic and its own currency. A conversation about mistakes
fiscal policy. By losing its function as a main made by politicians and the real meaning of taxes.
source of revenue, taxation becomes an instru- Interview by Claus Hulverscheidt, in:
sueddeutsche.de, 16.12.2018
ment of wealth redistribution. This would limit the
money supply in the real economy and prevent […] I beg your pardon? The state cannot simply raise
price increases (handelsblatt.com, 16.3.2021). pensions because fewer and fewer employees have
to finance more and more retirees. The treasury is
Until the outbreak of the Corona crisis, this the- empty, so the pension level is falling in many places.
ory led a marginal existence. Only in the current And that is exactly nonsense. In countries with their
situation, in which the governments' money short- own currency, the government can pay pensioners as
age is worsening, that is getting more attention. much as it wants, because it has a monopoly on cre-
ating money. It can also renovate as many roads,
This is due to the fact that their representatives build as many kindergartens and order as many air-
are politically engaged or seek proximity to deci- craft carriers as it wants. Inflation only occurs when
sion-makers in their governments. This raises all the economy is not innovative and productive enough
to fulfil all the wishes. […]
the more questions about the quality of this theory
What about the principle that the state can only spend
and makes publications on it vulnerable to inter- as much as it receives through taxes and loans?
est-driven exploitation. For example, the well- Wrong again. That may be how it works with private
known US representative of MMT, Stephanie Kel- individuals, but not with a state. The US government
ton, belonged since 2016 to the team of advisors doesn't need tax revenues to buy an aircraft carrier. It
simply seeks approval from Congress and then in-
of Senator Bernie Sanders, who had repeatedly structs the Fed to push a button and change a few
applied for the presidential candidacy of the Dem- numbers on an armaments company's account. End.
ocrats. The fact that he was not able to succeed […]
was due, among other things, to the still limited Wait, this is confusing: if taxes aren't used to fund the
state, what are they used for?
acceptance of this new theory at that time (wat-
The state uses taxes to withdraw part of the money
son.ch, 5.3.2019). that it feeds into the economy through its monopoly.
Republicans, in contrast, largely reject it. The In this way, he prevents too many dollars from being
national debt exceeded the 20 trillion US dollar in circulation and causing inflation.
mark in Donald Trump's first year in office. How- Taxes are not a financial instrument, but an instru-
ment to combat inflation?
ever, the US government was able to curb the in-
Exactly. They first give the money a value and then
crease in the following two years. It was not until secure it. They are also suitable for redistributing as-
the onset of the Corona crisis from March 2020 sets and providing incentives for people to stop smok-
that the fiscal deficit jumped by about 5 trillion in ing, for example. But all this has nothing to do with
generating income. […]
2019 to currently 28.1 trillion US dollars (statista.
com, 7.4.2021 and trumpwhitehouse.archives. [Italics: SZ questions, highlighting blue: S.R.].
gov, 22.4.2021, cf. Figure 6). Since the change of
9 FORSCHUNGSHORIZONTE
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7 / 2021Sabine Riedel: Analytical Perspectives in the Corona Crisis
government in early 2021, the republicans' criti- This leads to the exciting question of the con-
cism of MMT has been directed at the new presi- nection between the outbreak of the Corona crisis
dent, Joe Biden. On 25 March 2021, Republican and the rising popularity of MMT. For it needs to
MP Kevin Hern introduced a resolution in the be explained why the governments of the world's
House of Representatives condemning MMT as a strongest economies shut down their economies
"recipe for hyper-inflation, higher deficits, and overnight. There were neither risk analyses nor
higher taxes" (hern.house.gov, 25.3.2021). How- hearings of experts in advance, let alone public
ever, it can be assumed that the USA will remain debates on the goals, instruments and duration of
on the debt course. Shortly after taking office, such a lockdown. There was a time window for
Biden launched a new USD 1.9 trillion aid pro- necessary preparations between mid-January
gramme, which the Federal Reserve Bank (Fed) and mid-March 2020, i.e. between the start of the
will largely realise through the purchase of US pandemic in China and the WHO decision to clas-
bonds (flossbachvonstorch.de, 9.2.2021, die- sify Covid-19 as a global threat. Would the EU
stadtredaktion.de, 10.4.2021). member states have sought alternatives to the
MMT representatives realise the current Co- lockdown if there had been no MMT that allowed
rona crisis as an opportunity for their approach. them to take such high economic and financial
They offer policy-makers the scientific legitimacy risks?
to keep printing new money without an upper Here, too, Stephanie Kelton wants to enlighten
limit. They literally take the burden off their shoul- the public. In an interview she explains that the
ders of constantly having to justify themselves to euro was born with a birth defect because the
a critical public. In the last financial crisis in 2008, Maastricht Treaty (1992) stipulates a separation
a broad audience had to learn that since the gold between monetary and budgetary policy. Accord-
standard was dissolved on 15.8.1971 (welt.de, ing to this, the finances of the member states are
15.8.2011, Figure 6), there is no longer any colla- a national responsibility, while the supranational
teral behind our monetary system and the banks EU level watches over monetary policy. This con-
create money by granting loans, inter alia (Weik, struction is criticised by many experts today (fo-
Friedrich 2012, stuttgarter-zeitung.de, 13.5.2016). cus.de, 4.1.2019), but they are making various re-
MMT has pulled the teeth out of these analyses, form proposals. Kelton believes that the presi-
including many reform proposals and alternatives dents of the European Central Bank (ECB), Mario
to the existing system (vollgeld-initiative.ch). Ac- Draghi (2011-19) and Christine Lagarde (from
cordingly there is nothing to criticise because the 2019) have already reacted correctly: "The emer-
creation of money is not a curse but a blessing for gency purchase programme for bonds of public
today's economies (zeit.de, 15.4.2019). and private borrowers, which the ECB decided at
Many media contribute to the popularisation of the end of March 2020 to cushion the conse-
MMT by transporting the complex scientific appa- quences of the pandemic for the economy, links
ratus underlaid with mathematical formulas into monetary and fiscal policy" zeit.de, 11.12.2020. In
simple messages. These simultaneously appeal doing so, however, it justifies the breach of the EU
to different groups of voters, conservative as well treaties.
as progressive, and right-wing as well as left- Even if a year later the ECB's bond purchase
wing. This is a temptation for politicians, espe- programme is described and justified as a "Co-
cially before elections, which they can hardly re- rona reconstruction fund" (faz.net, 26.3.2021), it
sist, especially since the argumentation is made remains a violation of the current legal situation.
to suit them. Stephanie Kelton, the symbolic fig- This is documented in detail by the constitutional
ure of MMT in the USA, gave astonishingly simple complaint of over 2800 citizens (buendnis-buer-
answers to difficult questions in the run-up to the gerwille.de). Besides these legal details, contra-
presidential elections: If the US government dictions in the sequence of important decisions in
needs money for an aircraft carrier, it's no prob- March 2020 are also interesting: The ECB al-
lem: "It simply seeks approval from Congress and ready officially announced on 4.3.2020 that it had
then instructs the Fed to push a button" (sued- taken first "precautionary operational measures
deutsche.de, 16.12.2018, cf. Figure 6). If seniors to mitigate the potential risks associated with the
complain about too low pension incomes or par- spread of the coronavirus, COVID-19" (ECB,
ents about too few kindergartens, she recom- 13.3.2020). On 12.3.2020, the ECB Governing
mends the same formula: The government " can Council then decided on the aforementioned
also renovate as many roads, build as many kin- "comprehensive package of monetary policy
dergartens and order as many aircraft carriers as measures" (ECB, 12.2.2020), which the Euro-
it wants". (op. cit.) pean Commission announced one day later as a
10 FORSCHUNGSHORIZONTE
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"coordinated economic response to the COVID Figure 7
19 Outbreak" (EU-Commission, 13.3.2020). By
then, only four EU members had decided on a
Dept Level of the Eurozone / EU19
lockdown, namely Italy and Austria (9 and 10
(2000–2020) in Million Euros
March 2020) and the two countries outside the
euro area Poland and Hungary (11 March 2020).
12,000,000.
Apparently, only the announcement of Corona aid
10,000,000.
could convince the other states of such drastic
8,000,000.
measures (Riedel 6/2020: 16).
Sweden, which has so far waived a lockdown, 6,000,000.
EU19 (Euro area)
remained an exception. It may have resisted the 4,000,000.
temptation of money printing by the ECB because 2,000,000.
Germany
it is not part of the euro area. This aspect is sig- 0.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
nificant, after all, MMT representatives in the USA
as well as in Germany point out that only states
Source: Own compilation, Eurostat, 22.4.2021
with their own currency can get into such debt
(Ehnts/Paetz 2021: 200): As a currency monopo-
list, the state can withdraw the money put into cir- Thomas Mayer:
culation again via taxes and thus prevent inflation
MMT as the new monetary policy. The
(sueddeutsche.de, 16.12.2018). At this point, one ECB has voluntarily submitted to politics
waits in vain for the decisive hint that the euro
area can actually only apply MMT once it has first „[…] Of course, those responsible would reject it, but
in fact the ECB and other large central banks have
communitarised fiscal policy. At present, how-
switched their monetary policy strategy to the "Mod-
ever, there is rather a tendency towards tax ern Monetary Theory" (MMT) that has become fash-
dumping: "Countries like Ireland, Luxembourg or ionable in the USA.
the Netherlands have attracted international cor- The name of this concept is misleading, because it is
neither "modern" nor a "monetary theory". What is
porations with lucrative tax models." (die presse.
meant is the old-fashioned practice of financing the
com, 17.7.2020) And according to the ruling of the state with the printing press. According to MMT's
European Court of Justice of 15.7.2020, this is ideas, the central bank should create money for the
state, which then circulates it through its spending.
also completely legal (dejure.org). The danger of
The ECB has already taken the first step by buying
inflation of the euro is therefore not over. There is
bonds from euro states worth around 2.7 trillion eu-
a threat of tax increases or spending cuts ros. According to the wishes of Lagarde and Schna-
(welt.de, 6.10.2020, Figure 7). bel, the states should distribute the money to the peo-
ple in a second step.
For this reason, it remains necessary to exam-
Since the distribution of money is not so easy without
ine opposing measures in order to minimise the
effective organisation, it sometimes does not flow as
risks of this historical experiment. The argument quickly as desired. But supplies from the central bank
that the US experience in dealing with high public are provided for, and in the end there will be no short-
age of willing borrowers.
debt cannot simply be transferred to other coun-
In contrast to old-style monetary state financing, in
tries gives rise to thought. The US dollar enjoys a
MMT the state is supposed to prevent an inflationary
privileged position because, despite competition expansion of the money supply by reducing spending
from the euro and the yuan, it is still the world's or raising taxes after the inflation target has been
reached.
most important reserve currency, and many coun-
Then less fresh money would come into circulation.
tries have aligned themselves with it (Huber
That is the theory. But politicians have hardly ever
5/2019). Because they either have their own cur- been capable of such discipline – which is why they
rency pegged to the US dollar or are indebted in have removed the central banks from their access in
order to commit themselves. If the central bankers
a foreign currency, MMT is out of the question for
lure the politicians back onto the path of monetary
them. On the contrary, it is precisely in times of state financing, they destroy this self-binding.
crisis like today in the Corona Crisis that this great The architects of the monetary union have set up
financial dependence takes its revenge. Worries strong firewalls between politics and the ECB. They
did not expect the ECB to submit to politics of its own
about payment defaults have caused "almost 30
free will.
per cent of capital to flow out of emerging econo-
Thomas Mayer is Founding Director of the Flossbach
mies worldwide since the beginning of the year
von Storch Research Institute and Professor at the
[2020]" (dw.com, 23.10.2020). This has triggered University of Witten/Herdecke
a currency collapse in Turkey, Brazil and South Source: welt.de, 6.10.2020
Africa that is affecting the very existence of these [Translation and highlighting blue: S.R.].
countries.
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MMT is proving to be an approach that has be- Walter Eucken, the mastermind of the suc-
come popular worldwide with the Corona crisis, cessful model of the social market economy after
but cannot fulfil the expectations that have been the Second World War, coined the term "sup-
raised. After all, the decisive prerequisite for un- pressed inflation" for this. (Eucken 1951: 53 f). It
limited national debt is a sovereign state with its arises when prices are fixed politically at the
own monetary and financial policy without being same time as the money supply is expanded. Ac-
dependent on foreign currencies. This condition cording to Eucken, this leads to an "economic or-
is only met by the USA, if one ignores the many der of central planning" which favours the for-
critical objections (bloomberg.com, 21.3.2019). mation of monopolies to the detriment of the mar-
The EU members of the euro area and many ket order (p. 55). For this reason, he sees struc-
emerging countries, on the other hand, are taking tural similarities between the centrally adminis-
incalculable risks with MMT. Why don't the Euro- tered economy of Soviet-type socialism and the
pean countries draw on their own historical expe- Nazi regime (Eucken 1959: 140). Both had de-
rience? Already 100 years ago, the Austrian stroyed the market-based monetary system, even
School of National Economics analysed the finan- if they differed fundamentally on the question of
cial policy background of the First World War. Its property.
prominent representative, Ludwig von Mises, saw In contrast to the German Empire, Russia or
a direct connection between the policy of "cheap the later Soviet Union was faced with the task of
money" and militarism (Mises 1919: 5). Because industrialising an agricultural country at the end of
without financial supplies, the population would the First World War. This partly explains the Bol-
have felt the effects of the war on their prosperity sheviks' approach to economic policy, "to organ-
much more quickly (op. cit., 133). However, the ise the whole national economy along the lines of
theory of "inflationism" threw sand in their eyes. the post office" (quoted from: op. cit.). The Wei-
Von Mises understands this to be a " theory of mar Republic, on the other hand, was a highly de-
money that aims to increase the money supply" veloped industrial country that was able to bring
(Mises 1924: 203). It was founded at that time by its production level back to pre-war levels by
the German national economist Georg Friedrich 1927. (dhm.de, 27.4.2021). However, the new
Knapp (Knapp 1905, Knapp 1924). If today's MMT democratic system showed weaknesses because
refers to Knapp as its predecessor (faz.net, a parliamentary majority of communists and na-
18.1.2012), a discussion about this is urgently tional socialists rejected the austerity policy of the
needed. Brüning government. The dispute over the pay-
ment of foreign debts and measures against infla-
4. Structural analysis reveals parallel tion led to a political crisis and shortly afterwards
structures of the authoritarian dual state to dictatorship.
Germany financed the First World War with the From a research perspective, the interesting
policy of "cheap money" and accumulated debts question is how the National Socialist German
with foreign bonds, the last instalment of which Workers' Party (NSDAP) established its new re-
was only repaid in 2010 (welt.de, 30.12.2009). gime from 1933 onwards. For this purpose, Ernst
Another important source of income for the Ger- Fraenkel uses the analytical concept of the dual
man Empire was domestic debt, i.e. from its own state. He does not assume a linear process of
population, through war bonds, which the Weimar change, but describes the establishment of a sec-
Republic got rid of after the end of the war through ond, parallel structure of rule (Fraenkel: 1940, cf.
inflation (tagesspiegel.de, 16.11.2008). That is Figure 8). The old legal order initially persisted,
why the National Socialists (1933-1945) took deceiving a broad public, especially at the begin-
other paths for their rearmament. They inflated ning of the seizure of power (in 1933). Fraenkel
the money supply through government bonds, called it the normative state, defining it as "the
which savings banks, banks and insurance com- system of government endowed with extensive
panies were forced to take up. To do this, they powers of rule for the purpose of maintaining the
had to eliminate the Reichsbank, which had the legal order, as expressed in laws, court decisions
legal mandate to prevent renewed national debt. and administrative acts of the executive" (quoted
Step by step, they subordinated the financial and from: Fraenkel 1940: 49). In addition, the state of
economic system to their control and were thus instrumental measures emerged as an "organ of
able to conceal the inflationary consequences: dictatorship" with the NSDAP at its head. It was a
"Rationing, price and wage freezes ensured that "system of rule of unrestricted arbitrariness and
inflation and price increases remained hidden violence, unrestricted by any legal guarantees"
well into the war." (Prollius, 18.6.2014) (op. cit.).
12 FORSCHUNGSHORIZONTE
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7 / 2021You can also read
