Bismarck or Chaos

By: Peter van Dijk

Microfinance Focus, July 4, 2012: Otto von Bismarck was an ultra-conservative East German (Prussian) nobleman who helped the unification of his country (in 1871), managed stable relations with neighbouring powers (Austria-Hungary, France, Great Britain and Russia), religious tolerance (Catholics, Protestants) and avoided a popular revolt against capitalist industrialism. As Emperor Wilhelm’s chancellor, Bismarck invented the term “Realpolitik”. Out of Realpolitik, keeping power in unsecure times with many opposing factions, he initiated laws on universal (male only) suffrage, limited working hours, universal health insurance and old age social security. Staving off accusations in parliament of being sympathetic with communism, he replied: “Call it socialism or whatever you like. It is the same to me.” Bismarck understood the sign of times and acted.

People will do everything if they are desperate to obtain things they absolutely need. What do all humans in society need? Food, hygienic water, healthcare, housing, education, and money to pay for it all. If they don’t have sustained access to these goods and services, citizens will become desperate and will be prepared to do anything. Charity will not ensure sustained access to these basic needs, only integration into a regulatory framework will. And for regulation to protect people and the stable exchange of goods and services a stable government helping all citizens is needed.

Coming back to Bismarck’s wild times in Europe. The French revolution had past, wars ravaged all over Europe, as well as massive poverty, in rural areas because of industrialization and in overcrowded urban areas. The German nobleman was, against his nature, forced to start building an inclusive social democracy, the “welfare state” that Western Europe is now known for. His work spread, crossed the Atlantic Ocean to the United States of America and to Australia, together with Western Europe 3 regions that until now attract immigration from masses of people who hunger for stability, democracy and the ensured access to income and social security providing them food, water, houses, healthcare and education. Most refugees don’t come from Africa as some may think but from Asia: Afghanistan, Iran, Iraq, Myanmar (Burma), Pakistan, Sri Lanka. And, as you know, they don’t go to their neighbours, their “brother nations”, the “Asian tiger economies”. The refugees don’t want to go there, to countries such as China, India, Malaysia and Indonesia; and these countries don’t allow them even to enter. Conscious that many refugees will die on their dangerous travels, they prohibit entry and send the desperate people on to Australia or to Europe. And we are talking about tens of thousands of people. And this happens whilst the above-mentioned countries are among the biggest economies, with the highest number of billionaires, millionaires, palaces, servants and luxury cars.

As their relatives who so far stayed home, emigrants would love to live in the countries where they were born and grew up. It is thus understandable that after decades of disappointment, socio-democratic revolutions started in North African and Middle Eastern countries. In Tunisia, Libya and Egypt the people removed their dictators during the “Arab Spring” demonstrations. But also in Bahrain, Morocco, Yemen and Syria people went to the streets in masses, and in the last country an awful civil war has started. As these peoples don’t have any history in politics, where dictatorship followed colonialism and feudalism before that, the only thing they share is religion, which provokes a lot of violence, even into Sub-Saharan Africa such as now in Nigeria. Such religiously motivated slaughters are now happening in Christian, Islamic, Hindu and Buddhist communities.

Will inclusive social democracy in Asia evolve differently, peacefully, respectful of stability? I think that depends on the answer to some other questions: will fathers continue to watch their children die of easily avoided diseases while an increasing amount of luxury cars slowly proceed in the increasingly jammed streets in the mega-cities? Will youngsters patiently wait for a chance to study for a decent job whilst their parents don’t have money for it now? Will they hope for a job at wages which allow them to live a life that can be considered “full” at a time that there are no wage rules that really allow a minimum dignified existence; when international labour laws have been signed by their governments’ ages ago and are since long waiting to be implemented? Will sweatshops, huge squatted urban slum areas, forced prostitution, child abuse, domestic violence, no access to any public support be accepted facts of life and is it better to consider misery a deserved punishment?

Microfinance was believed to stand for improving the lives of many Asian people, for empowering them; such belief dates back three decades. Studies can still not demonstrate clear and sustainable improvements. Studies also provided evidence that people prefer “informal settlements” of conflicts or in situations where the most opportunistic individuals stole money, defrauded or otherwise did not comply with the rules of micro-lending programs. Voluntary rules of charities, of NGOs and foreign donors are preferred as the latter refuse any need for transparency and accountability for weaknesses or failures. The poor recipients should be glad with what they receive; complaining is ungrateful and disrespectful. What micro-debt did at least was to create a huge business on which many depend now for jobs, even in government.

Today is different from three decades ago; modern media and communication technology provided universal access to expressing one’s opinion and enables individuals to instantly organise cooperation. The work of the International Criminal Court added physical value to the promotion of human rights and true democracy. The Arab Spring shows that poor, desperate masses will stand up. The frustration about micro-credit in Andhra Pradesh caused a big crisis that resulted in a draft Microfinance Law now being discussed in India’s parliament. But a “good” microfinance law will not be sufficient. People are becoming ever more rapidly aware of their inherent rights as humans and that getting their rights reinforced starts with the registration of their identity and by building a regulatory framework on that basis, which ensures them of government assistance in getting access to basic goods and services and sufficient income to purchase them if and when they need it. The masses of poor people now know and they talk to each other and can organise themselves. It might be high time for local authorities and enlightened business leaders to accept Bismarck’s recommendations and act.

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