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Pseudo Market Economy
Labour, Land, Capital and the Globalisation of the Economy

Udo Herrmannstorfer



Pseudo Market EconomyPreface to the Internet Publication in the English language, 2009

The book presented here was published originally in 1991 immediately after the breakdown of state socialism. An extended version was then published in 1997, as the neoliberally powered form of globalisation began to dominate development. Distribution was limited to the German speaking public; despite the fact that the publisher believes that it is one of the most important publications in the last decades to tackle the root causes of social crises and questions of social renewal; so it only enjoyed limited availability for the beginning of the global civil society’s’ discussion on alternatives, which began in 1999.

The translation into the English language has been long overdue. Efforts to undertake this since 1999 continually met with obstacles. All the more gratitude to all those who have been involved, that it has at last become possible. What was written by the author about the relationship between the 3rd revised edition from 1997 and the original 1991 version, is perhaps more pertinent for the present English edition to the original: “[...] In this respect, the remarks of this book are even more up-to-date than at the time of its initial appearance, even if the conditions are constantly changing.“[1] This applies to such themes as unemployment, social security, the development of the European Union, and much more besides.

The accurateness of Herrmannstorfer’s analysis is shown most clearly in the present global finance crisis, which has begun to expand to a crisis of the whole economy. “To keep intact the illusion of monetary proliferation without social responsibility, new forms of capital investment are continuously being developed and offered, ‘slammed into the market’...[2] At the time this sentence was written few contemporaries even knew the term “derivates”, let alone imagine the extent to which the derivate-market would expand and the resulting catastrophes. The connections between the financial crisis and the mortgage crisis can also become better understood through this text.

Later generations will find it difficult to understand that critical texts such as this, containing constructive suggestions as to how to create dynamically sustained monetary stability could have been so widely ignored. They will also be astonished that, at least temporarily, the disillusionment that occurred after the debacle did not lead to the taking up of such suggestions. At present it unfortunately looks rather as if attempts are being made to rectify the mistakes of the past with the mistakes of the long-past mistakes that were also analysed in this book.

Where the market failed, the state should attempt to rectify things, but please, without a thoroughly new legal framework for the economy, through for instance new forms of ownership. The economy itself should remain on a pure free-market track. The anthropological paradigm behind the concept of the free-market, the image of “homo economicus” as an egoist who is only seeking to maximize his advantage is hardly questioned at all, as is the contradiction of the image to the "objective altruism" in the division of labour.

This book proposes rather the necessity of a thorough renewal of the economy, a shaping of the markets through associative settlements between the business partners, without turning into a state-directed economy and thus shows a way out of the previous circuit of state failure and market failure. According to the author, in order that mature citizens worldwide take hold of the responsibility of shaping their social relationships, it is not continuing oscillation between neoliberalism and statism that is needed, rather the need to form relationships anew between the economic-, stateand cultural sectors.

To smother reality with pre-fixed programmes is the last thing the author wants. His concern are the living versatile ideas, with the help of which the reader can gather answers and find creative approaches that the author does not wish to presuppose or dictate. Through illustrating examples and giving specific suggestions, the author wishes only to show that it is possible to find concrete sustainable solutions for the problems if one really wants to find them.

Herrmannstorfer follows the approach of Rudolf Steiner, to whom he often refers, and who thought it important to emphasise that pre-packaged social solutions are no longer relevant for our time. What is far more needed is an understanding of the structures that allow people, in each specific case, to find solutions by working together. These solutions will naturally vary, according to the land or continent in which they are decided upon. The solution of the land question would have to be different in a land where most of the land belongs to a small group of large-scale landowners, from a land where there is a wider scattering of landownership. Establishing new monetary structures could vary considerably between countries with hard currency and those with galloping inflation.

We would ask the reader to take into consideration the fact that the suggestions in the book as far as the legal details are concerned, for instance in connection with the question of land, were tailored mainly to the conditions in Germany and Switzerland.

It would surely be desirable to extend the presentation with regard to the developments since 1997, including new numerical data. This is unfortunately not possible due to the workloads of those involved. Nonetheless readers can find numerical data themselves today, with the help of the internet, or through newer books on the global financial and economic crisis, etc.

In the English version an addendum is given, in an effort to at least indicate directions in which the suggestions given in the book could be varied to meet the specific situations outside of Europe, and be made fruitful for countries, for instance in the Southern Hemisphere. Included are Herrmannstorfer’s theses developed for a conference at the University of Trier in 2002 on „Conceptual Building Blocks for a Human and Just Globalisation“, which were translated into English some time ago. They deal with the land question, our use of resources, and the theme of „donations and development“.

In the area of agriculture, the authors‘ approach has also shown its value in global civil society’s alternative discussion. Herrmannstorfer had already, in 1994, written a paper „Wie weiter mit der Landwirtschaft?“ (Whats the next step in Agriculture?), showing the way towards an associative economy and warning about the WTO agreements. Nicanor Perlas and Christoph Strawe took up this approach in 2003 and on the basis of the failed WTO conference in Cancun presented a set of suggestions under the title: „Farming after Cancun“ that are still important for the situation today.[3]

The very demanding translation work, with only minimal funding available, was selflessly undertaken by a team of friends: Carol Bergin, Julia Kramer, Prof. Dr. Hellmut Fischmeister, Johannes Lauterbach and Ulrich Morgenthaler. Responsible for the editing work were: Carol Bergin, Hellmut Fischmeister and Christoph Strawe.

The German language often allows terms that partially lose their meaning when translated in a literal manner. When in doubt whether to take the more literal version or try to maintain the sense of the text, we have chosen the latter. The text remains the same apart from a few minor changes where the meaning was no longer understandable or had become irrelevant. (Figures given in German Marks have been transferred into Euro) Publisher’s notes are identified as such.

Due to the complexity of the text and the fact that there was only one „native speaker“ involved, we are only too aware of the remaining imperfections, and that the quality of the translation is not always at the same standard. We therefore consider this effort to be a „work in progress“ and would be grateful for any editing suggestions that readers may send.

We wish to express our gratitude to the Verlag Freies Geistesleben in Stuttgart for their willingness to allow the internet publication. At the same time we would like to point out that the full copyright lies with the publishing company. It is necessary to obtain a license from the publisher in the event of commercial use of the translation; e.g. an English printed version which would be highly welcomed. We hope that the internet-publication can support the spreading of the text in the English speaking world and thus strengthen the movement for solidarity economies and support the shaping of a more humane globalisation.

Stuttgart, February 2009 Christoph Strawe

Pseudo Market Economy Udo Herrmanstorfer
Pseudo Market Economy -
Labour, Land, Capital and the Globalisation of the Economy

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  • [1] See preface fort the third edition.
  • [2] See chapter on money.
  • [3]