Democracy and Human rights -Slogans or reality in times of financial crisis and international terror?

Chinese Culture University/Assistant Professor/Assistant Professor
Germany /Dr. Claudius Petzold

In the view of some International Organizations and scholars the world is undergoing a quiet democratic revolution (Decentralization and local democracy in the world : first global report by United Cities and Local Governments, 2008). More and more countries have signed Human rights treaties (as Taiwan the International Covenant on Civil and Political Rights/ICCPR and International Covenant on Economic, Social and Cultural Rights/ICESCR); democracy seems to be the system of the future.

The author believes that the world’s current situation, the financial crisis and the fight against terrorism threaten the establishment and existence of real democracies in the world. Fighting the consequences of two financial crisis, the governments in Europe are forcing the parliaments to pass law with financial bailouts which threatens the national budgets for the next decade. Protecting the people against terrorism and human rights against terrorist’s threat, the former US government has created a new non-human species – the terrorist combatants who don’t enjoy all human rights (extrajudicial killings, water boarding as interrogation not as torture). Politicians who restrict personal freedoms to a greater extend (while showing reluctance in regulating hazardous financial transaction) gain the positive attention as law-and-order persons.

1. Human right treaties in quantity or in quality or do we need more written rights?

The UN Website (UNTS) shows 72 Signatories and 165 Parties for the ICCPR. Even China which isn’t really known for press freedom and democratic structures has signed the ICCPR on 5 Oct 1998. UNTS lists 16 Human rights treaties and more optional protocols regarding human rights (http://treaties.un.org/Pages/Treaties.aspx?id=4&subid=A&lang=en). The European Union and the USA policies are aimed to promote human rights and democracy worldwide (Art. 3 V, 21 I and II (b) of the Treaty on European Union). Declarations, explanations, emotional self-commitments in favor of human rights and democracy by eloquent leaders are countless. Contrary to the reality of political leaders, the annual report by Amnesty International seems to be from another world, written by a person having psychopathic dreams. Which of the parallel worlds are true?

The Human Right treaties and the International Law contain a plenty of non-binding commitments. The International System and legal principles in International Law hinder the Human Rights enforcement (sovereignty of states, overlapping principles, the possibility to express reservations to unwanted treaty clauses). The relationship between the principles is not clear. Governments acting against the wishes and interests of their peoples can still invoke the principle of sovereignty in order to refuse international critics and interference. Indefinite legal terms (democracy or freedom) allow the state actors to find an interpretation which fits the ideology of the leading elite. The terms communist democracy and managed democracy point up that problem of indefinite terms. Although the principles of sovereignty and prohibition of intervention have been weakened somewhat, they still protect dictators worldwide. President W. Bush who has started an unjustified war in Iraq won’t face charges by the International Criminal Court. The former dictator Pinochet enjoyed the support of well-known democrats as Thatcher and Bush senior.

As another example: the ICESCR provides in Art. 6 I that the States Parties recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right. A person without any knowledge about International Law may now conclude that every country with a higher unemployment jobless rate violates International Law. Unfortunately for the unemployed persons and luckily for the governments, the ICESCR mostly doesn’t establish binding commitments for the states. The unemployed person has a right to work but the government no obligation to provide work. Established double standards by developed countries are countless. In the international consent, the word “human right violations” shall not exist to close to the word “Tibet”, on the other hand, responsible politicians are robbed of their sleep because of human rights violations in Cuba or Iran. International law and Treaties as the Treaty on the Non-Proliferation of Nuclear Weapons are unequal enforced, the Security Council condemns Iran and North Korea for the procession of Nuclear Weapons but remains silent to the question why other states as US doesn’t comply with their (disputed) duty to disarm their Nuclear Weapons or remain more silent on Israel’s Nuclear Weapons.

Even the international level is mostly undemocratic structured. The Charter of the United Nations drafted after the Second World War provides unjustified power to some states. Only five states – some of them only former world powers – are the so called permanent members of the Security Council with special veto rights. Although the veto rights are often abused for state interest or even for ideological aims of their leaders, no powerful state aims to abolish that antique right. Of course, some states are criticizing the current structure – in order to get a permanent membership. Some scholars may see a democratic direction of the world order but the International Law as Law of the states with governments as main actors still remains as a undemocratic legal system.

2. The new threat – from invasion by communists to the threat from terrorists

No one should deny the threat by the terrorist. However, the justified efforts have become a war which allows limiting civil rights. The states are abusing the threat as a justification for every infringement of human rights.

The state has to balance the rights of one person and the rights of other and the interest of the society. Finding a balance depends on social expectations, social background of the politicians and judges etc. There are different ways to balance a threat, for instance do we require a concrete danger or abstract threat in order to restrict fundamental rights?Politicians cite even threats on an abstract level as a justification for limitations of fundamental rights. When do actions by citizen as demonstrations or critical reports harm the social security? Is the security harmed when some demonstrators call the state for more human rights or active measures against state corruption – as some communist system claims? Is there a possible danger when the former President Bush came to Germany’s Heiligendamm for the G8 summit and some protestors are expected? In the latter case, protestors are allowed to come not closer than a few km to the meeting place. Was that restriction justified because of terrorist threat and social unrest or were our international leaders afraid of (not interested in) public opinion?

Again, which kind of danger is required to infringe Human Rights. Is every possible abstract danger suitable to restrict personal freedoms? The pendulum between freedom of the person and so called security now swings back in favor of so called protection for terrorists. That perception is not only my personal opinion. Thomas Buergenthal, former judge at the International Court of Justice, sees a temptation to take chance of terrorist attacks and terror threat in order to water the Rule of Law (Thomas Buergenthal/Daniel Thuerer, Menschenrechte, 2010, p. 413). Or, using the former UN-Secretary-General Kofi Annan’s words:

“Internationally, we are beginning to see the increasing use of what I call the "T-word" - terrorism - to demonise political opponents, to throttle freedom of speech and the press, and to delegitimize legitimate political grievances. We are seeing too many cases where States living in tension with their neighbours make opportunistic use of the fight against terrorism to threaten or justify new military action on long-running disputes.” (http://www.tilburguniversity. nl/university/doctorates/2002/annan/speech.html)

The term collateral damage shall cover a terrible ideology, it describes the unintended or incidentally killing or injuring of civilian or non-combatant persons by military action. In other words, killing of an innocent is assumed as justified if the governments pursue a higher purpose. Beginning with the war on terrorism, this outcome is now considered as an acceptable and legal outcome of military action. The word “collateral” means something like “beside, parallel, unintended”, often the killed terrorists are outnumbered by the “collateral killed” children and woman. Military actions are often started when the leaders knows that “collateral damage” will happen. In criminal law, that is assumed as gross negligence. Those civil causalities of people in Third World countries are classified as “second degree persons”, their live can be sacrificed for higher aims. Legal or not, that ideology definitely contradicts Human Rights.

3. Alienation from the voters

Western states often proud of their culture of human rights and democracy face developments which contradicts democratic structure as declining voter participation, disempowerment of parliaments, alienation from the voters, creation of dynasties of politicians, unjustified influence of lobby groups and advisers, disrespect of the voter’s wishes, gap between rich and poor.

Starting with the declining voter participation, a democracy’s base is the acceptance by voters, a democracy without voters is a meaningless and empty shell. The voter turnout at the German Bundestagswahl 2009 has been 70,8 % (http://www.bundeswahlleiter.de/de/ bundestagswahlen /), at the EU elections 2009 43 % (http://www.europarl.europa.eu/ parliament/archive/ elections2009/de/turnout_de_txt.htm), and at the last US elections between 60 and 70 %. As result, even a leader who has gained a majority at elections can’t claim the support of the majority of the people. All decisions are made by a minority. The assertion that absence from elections is only based on laziness and lack of knowledge hasn’t been proved and shows disrespect for many voters.

The parliament and the government should be the servants of the whole people in a society, responsible for them and mandated to fulfill their wishes. It doesn’t mean the obligation to comply with every short time wish or every new poll’s outcome. Of course, politicians shall be bound by their conscience. However, a political elite class which makes policies against the longterm voters’ wishes can’t claim to be representative. Referdendums might be a tool but are not really welcome by most of the politicians. Every political system which asserts to be democratic should reflect voters' wishes reasonably accurately. The daily news shows more signs that parliaments and governments are driven by other than voters’ wishes. Only a few examples:

- The concept of the European Union, the Euro etc.: When the Irish has voted against Lisbon Treaty in a referendum by 53.4 % to 46.6 %, EU politicians made a real democratic decision – they let the Irish vote again until they accepted the treaty (for more information: http://www.europesaysno.org/why_we_say_no.html#2).

- Despite the participation in the US led wars against terrorism was questioned by the majority in most of the European countries (http://www.usatoday.com/news/world/2003-02-14-eu-survey.htm), political leaders in Spain, Germany (Angela Merkel) and Great Britain supported the invasion of Iraq.

- The author doesn’t know every poll about the aid package in the financial crisis but he believes that not every aid package for mismanagement in the financial industry before the subprime mortgage crisis has gained the majority’s support.

The financial crisis is an example for undemocratic developments in most of the countries. During the financial crisis as the time for leaders with a preference for ASAP-decisions, the minimum currency for bail outs has become “billion” (USD or Euro, whatever, not important at all). Political leaders, normally reluctant to raise social budgets for a few million, are pushing regulations with threaten the annual budgets of many states for the next decades. The German parliament has passed billion aid packages for financial institutions and Greece, some member of the parliament criticized that government is forcing and overburden them with emergency acts (SZ 21.05.2010). Governments and financial institutions (as the main cause and the main beneficiary) have discussed the aid package during the subprime mortgage crisis, the parliament has had the power to agree, tax payers have to burden the risks.

The new system has provided a new class – elites in politics and business. As example, in France is discussed why graduates of the École nationale are every time involved in scandals. Many states have dynasties of politicians as the Kennedy or the Bush, relationship or better genes as a possible explanation? Some interesting researches in Germany show that elite circles are closed for persons from the lower class in social selection (Handelsblatt, 30.03.08 16:45).

At last, governments use worldwide so called expertise from known companies, the names are every time the same, Mc Kinsey, Roland Berger etc, law firms to draft laws. Their politics are often based on that expertise not on the wishes of their voters. Finally, the “stupid folks” are declared as unable to understand the difficult financial system in a new world. Bank bailouts are discussed with the banks and their experts which has created the crash. In a world outside the parallel level of the bankers and politicians, no one will ask the person who has created insolvency as the expert to overcome that insolvency. A further example for simplifying respect of external expertise is the former German Minister for Economic Affairs von Guttenberg who has requested an office of a British law firm which advises banks to draft the German banking (insolvency) law. His respect has gone so far that he has sent the draft unchanged with firm logo to the parliament. With other words: Law isn’t drafted by the parliament with the support of the government experts but by law firms which represent the involved interests.

4. Is our political system corrupt, uniformed or influenced by lobby groups?

In an interview, Nobel laureate Joseph Stiglitz raised the question for which reason the governments doesn’t solve problems in the financial sector even though those problems are known since the insolvency of Lehman Brothers two years ago or even longer. For Mr. Stiglitz, the corruption of the political system is a possible explanation for the phenomenon. (http://www.zdf.de/ZDFmediathek/beitrag/video/1052856/Korruption-des-politischen-Systems-#/beitrag/video/1052856/Korruption-des-politischen-Systems-).

Indeed, the subprime mortgage crises hasn’t been an unpredictable tsunami for well-intended and Havard-graduate bankers and politicians. Many economists have warned the governments about the inherent risks of subprime mortgage, low interest rates and weak regulation a few years before the crisis. However, the states have neglected those problems. The same problem happened with the Madoff-scandal, although the SEC was informed in 1999 about the possibility of any possible fraud, the SEC ignored the information – for what reason? At last, even the EU offices have known about the Greek failure to report reliable budgetary statistics a few years before, it hasn’t taken appropriate measures until 2010. No one is able to provide an explanation for those failures.

The financial crisis has shown winners and losers, the banks as source of the financial crisis are now nearly as strong as before while some industries and workers are still suffering, the unborn will be glad to burden the imposed higher taxes for bailouts. The world richest persons are “regaining lost ground” (Global Wealth 2010, BCG), but not the poorer persons.

5. The raising power of private players

Human rights in their traditional meaning compel the state to refrain from unlawful restrictions of any kind, they are further elements of an objective legal order which determine the Private Law (through the interpretation). In developed states as in Taiwan or member states of the EU, a citizen shouldn’t be afraid of state intervention but of private intervention. It doesn’t mean a state is allowed to let strong actors pursuing their private interests without any limit. A government is obliged to keep the balance between the interest groups, if private actors begin gaining to much influence over other groups, the state has to act in order to remain the balance. At last, the state has to be alert if private actors decide about politics.

The Rating agencies are a good example: The worldwide operating agencies are Standard & Poor’s, Moody’s and Fitch which rate all kinds of credit debts. Although the value of such ratings (and their competencies) has been widely questioned after the 2008 financial crisis (http://en.wikipedia.org/wiki/Credit_rating_agency with many references), those “big three” belongs now to the powerful forces in the current Euro crisis. Every rating lowering of the score for Greece and Spain creates a vicious cycle (or self-fulfilling prophecy), as interest rates for the states go up and cause an increase in expenses and ensue a decrease in credit worthiness. The downgrading has been a main contributing factor to current problems. The representatives acting in response to the decision made by the CRA, are painfully looking with one eye at them. Some regulations have passed to the CRA even quasi-regulatory power (explanation by the German Bundesbank, http://www.bundesbank.de/bankenaufsicht /bankenaufsicht_basel_kreditrisiko.en.php).

Critics about CRA (interest conflicts, many errors in judgment, lack of real competition, even incompetence, Stiglitz, TAZ 20.5.2010; European Commission, 12.11.2008, http://europa.eu/ rapid/pressReleasesAction.do?reference=MEMO/08/691&format=HTML&aged=0&language= EN&guiLanguage=fr) are not really new, after every failure (Enron, subprime mortgages) of those CRA, European governments made movements toward some regulations – without success.

There are other signs that the governments are giving up the power and authority. Formerly traditional public properties are sold out, primary state authority was transferred to private companies as prisons etc, law is drafted by law firms which represents the involved interest groups.

6. The free market approach – a new religion and the only principle for politics? Are we a scoiety of free persons or fee consumers and investors?

The world has accepted a new religion or as one commentator in Germany means a „säkularisierte Heilslehre“ (possible translation: non-religious doctrine of salvation, Heribert Prantl SZ 27.12.2008). The free market theory has altered is character from a theory to a solution for all problems as like as a „manual“ for all problems. I don’t want to speak in favor of state controll but in favor of a market with some smart regulations. Studying law with some focus on business, we have learnt that even a correct theory needs adaptions to the practice. That might be a platitude - but a forgotten one. The critic against some regulations that they will create obstacles to the free market has become a “Totschlagsargument” (killer argument) which can end every discussion. Deregulation and privatization are healed as solution for every case despite failure in many cases (critical: Broß, judge at the German Constitutional court, 22.th of January 2007, Stuttgart).

Even the media has lost the distance to the “Heilslehre”. The terminology is a symbol, the market is now ascended to living entity with supernatural abilities – “the market”. Decisions by some institutions are described as decision of “the market”, as: "The financial markets simply no longer have faith that Europe will be able to get its debt crisis under control," says Manfred Jäger, a financial market expert at the German Economic Institute in Cologne (Spiegel online 05/06/2010). A new phenomenon has arisen: Every measure by the government isn’t tested by the people perception but by the reaction of the Stock Exchange Market. We are all represented by the Stock Market, there aren’t SME or employees. The litmus test or unquestionable evidence compares the stock exchange prices before and after the government’s decision. A rising Stock Exchange Market is a sign for good politics. As example the following video transcript:

“As the Stock Exchange shows, the proposals for the reform of the financial markets by the government aren’t well-received by the economy. The Euro Exchange course noch weiter nach unten und dotierte bei...“( SZ v. 19.05.2010, http://www.sueddeutsche.de/,tt2m1/politik/ 440/511545/text/)

7. Declaring Lobby-interests as people’s interests

Interest of lobby groups are equated with the interest of the general public. Bailouts are not only a cheap support for banks but a protection for the latter „John Doe”. As the German chancellor has explained the state measure during the first crisis: „The state has been the only institution able to restore the public confidence. (The state package) passed as a protection of the commoners but not as a protection of the bank’s interests". Otherwise, the stock market meltdown may draw healthy banks down". At the time, the chancellor pronounced, the German government will impose strict regulation for the banks as return for the bailout (Tagesschau, 15.10.2008). Unfortunately, the last pronouncement sinks a little bit into oblivion. For instance, the German bank HRE led by megalomaniac managers to insolvency got more than 100 billion Euro guarantee (nearly of the one third of the annual Germans government’s budget), Germany provides ca. 146 billion guarantees and 28 billion bailout for all banks), but the whole industry will have to pay 1 billion annually in a fund for future insolvency but no other return (FAZNet, 11.th June 2010). I am still researching why it is in favor of the citizen to pay 28 billion Euro for mismanaged banks and take a risk of 146 billion Euro while banks don’t need to return.

The subprime mortgage crisis is only a strange example for the “principle of socializing costs and privatization of benefits” but not the only one. Every mismanaged concern (Opel, GM, AIG) now declares it’s existence as fundamental for the society (to provide financial service for every person, employment, being a national treasury, national interest etc). Some politicians even claims that a financial transaction tax of 0, 5 % or below for speculative transaction (Tobin tax) will hurt “John Doe” as “John Doe’s main business’ life consist of speculative transaction.

8. Summary

I admits that some views in this article are somewhat simplifying, every problem is more a topic for a PhD than for an article. However, the developments in the last years have shown that our world is at the crossroad. Simple theories as the “market solves everything” or “privatization leads to efficiency in all cases” will fail in the future and might cause social unrest. Bailouts for mismanaged firms won’t be a solution for every crisis.

Scholars and people should keep alert, emotional self-commitments and the signature of some human rights treaties aren’t a proof of a democratic development. Political leaders shall do more than signing some human right treaties and following the advices of strong interest groups. After some overreaction in the past, we need a return to moral values in politics and some industries.

At last, the media should accept that freedom of the press is a right and a duty. Some media have forgotten that they are watchdogs in a free society not well-earning assistants to the elite.