Kaput |
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23 February 2025 - Adetswil
Yesterday I had some hours on trains getting to and from the Bremgarter Reusslauf, so I read Wolfgang Münchau's book outlining Deutschland's economic development over the past couple decades. From the title Kaput one can guess that he doesn't have an entirely positive take on it. This was an appropriate read too, because today in Deutschland is a federal election which will likely see a new chancellor and perhaps the first time the AfD will be included in government. The English-speaking media generally pans the AfD as "far right", but they keep winning elections and Elon Musk spoke at their party conference last month. Münchau's book goes a long way to explaining how Deutschland got here. He dubs the German economy as neo-mercantilist and demonstrates with copious examples how there is a revolving door between elected government officials and industry lobbyists. In particular, I did not know the Gehard Schröder spent the past two decades after his chancellorship hanging out with Vladimir Putin and lobbying for Russian gas.
Which bringing me to Münchau's next point: that Deutschland shot itself in the foot by getting rid of nuclear power and becoming dependent on Russian gas. It led them to turn a blind eye to much of what Russia was doing restricting human rights at home and invading their neighbors. All because Deutschland was dependent on Russian gas. When that was cut off during the Ukraine war, they were left unable to power heavy industry at affordable rates. Menawhile German industry builds some of the best nuclear power plants in the world ... for other countries.
Likewise, German industry grew exports to China to the point where now they are dependent on that market. The government has been complicit and ignored China's human rights violations (e.g. the Uyghur genocide) and encroachments on their neighbors in the South China Sea and the Himalayas. Additionally, the Chinese required knowledge transfer when setting up factories, so that the Chinese were then able to set up competing factories with that know how. And so China has eclipsed Deutschland as the leading car exporter and the German chancellor Scholz goes kow-towing to Beijing.
Internally, in addition to government supported corruption in large companies, German industry has a problem in that it often focuses on the creating best engineering solution to yesterday's problems. Which is why the car industry in Deutschland was still focused on improving internal combustion engines while in America and China new car companies popped up to build electric cars. Deutschland protects its large industry to the point the Volkswagon thought that engineering their cars to cheat on emissions tests was a better idea than developing electric engines.
Yes, Münchau's Kaput is polemic. For the wealth of informtion contained within it's definitely worth a read though.
