THIS review by Steve Sailer is several months old but it’s well worth reading. Sailer looks at Thomas Geoghan’s recent book about the German economy. Sailer writes: 

For decades, American economic sages such as Larry Summers, Tom Friedman, and Alan Greenspan have implied that manufacturing stuff was more or less obsolete—that the building blocks of the economy of the future would be cheap labor and expensive finance. The Chinese will make everything, while Americans will get rich selling each other ever more sophisticated financial instruments.

You might ask: What about the 98 percent of Americans who aren’t cut out for working for Goldman Sachs?

Well, you see, all we have to do is fix the schools. Then everybody will work for Goldman!

The Germans, however, never got this memo. All those speeches at Davos and articles in The Economist about how expensive skilled labor is the road to ruin might have worried them, but didn’t convince them. Thomas Geoghegan’s entertaining new book about the triumph of the German economy, Were You Born on the Wrong Continent? How the European Model Can Help You Get a Life, explains why.

Ignoring the anti-manufacturing bias of Anglo-American economists, the Germans have kept their files to the grindstone. Germany exports more each year than America, despite having only 27 percent as many people. German machinery is more than competitive on the world market, even with Germany’s high wages, six-week vacations, strong unions, and workers getting half the seats on many corporate boards.

                                      — Comments —

Buck O. writes: 

A must-see video about the new VW factory in Dresden, Germany. It’s a marvel of advanced manufacturing. 

There must be something very different about their unions, or the mentality of their union members.

Christine from Germany writes:

The video about the VW car factory was very interesting. (The German accent of the official in pin stripe suit was terrible and funny all at once.) I find it funny that the people who commented on this article by Sailer were so positive about German unions, the health care system and so on. I would say that this factory is just for “show.” They might actually build cars there, but in the first place it is just a marketing device. Well, I guess that most German car factories are very modern and feature similar technology, yet they have to. As one of the commentators stated, Germany depends on its exports and car manufacturing is one of Germany’s most important economic branches. Just think of Volkswagen, Porsche, Opel and BMW.

The German unions are much more powerful than those in the USA. However, during the last years the numbers of their members declined. Powerful unions are of advantage sometimes and of disadvantage in other cases. The German system is estimated to be a very flexible one, which is unusual for union systems in constitutional states with established unions.

I would not say that Germany strongly supports manual labour. To the contrary, at least ideologically higher education and white collar jobs are much more preferred and supported. Assembly-line workers show a high percentage of immigrants like Turks or Russians. It is not very prestigeious.

I do not quite understand why Germany’s health care system is still held for gold standard. It is actually bound to collapse. Both, the pension system as well as the health care system depend on a high birth rate, which Germany doesn’t have anymore. The German birth rates are among the lowest in Europe. Germany does have immigration, but the welfare state attracts particularly those immigrants which Germany actually cannot afford – people who are poorly educated and whose children usually do poorly in our educational system, people who seek comfort or who know that they will be better off for less work here. And Germany’s administration is unable and unwilling to do anything against it. Just a little example: If a Muslim man manages to get a visa and work in Germany and takes his family to Germany, the German health care system provides health care for him and all his wives and children (although just one wife is legally acknowledged), however he just has to pay fees for himself. (If you have work in Germany, the fees for health care and social security are subtracted from your earnings automatically. The money never gets in your hands or even on your bank account.) Yet, your dependents also have insurance. For example, if a man is employed his housewife and children have insurance coverage without extra fees (there might be charged fees for wives by some insurances, but children are always for free). If his wife is employed, too, she has to pay her own fees – they are automatically subtracted from her wage as stated before. The way it is it cannot work any longer. The system is bound to collapse, because the German government is unwilling to reform the system or to do anything against immigration. At the same time, they force women to work insted of staying at home which causes them to have even less children. All this is not very opportune in Germany. You cannot even express such thoughts aloud or publicly in print and press.

However, the German economy is not running as smoothly as Sailer’s commentators seem to think. It has huge problems. The financial crisis hit very hard. In addition, Germany was compelled to pay huge sums to other European countries like Greece, although this is actually against the European contracts and the German constitution. These are the shadows of Germany’s past. There is still a fear of a strong Germany. However, I think that flushing and exploiting Germany like that is more dangerous. A major factor for Hitler’s rise was Germany’s destitute situation after WWI due to the contracts of Versaille. And, anyway it is a great injustice.

Please follow and like us: