The German miracle?

Mixing social democratic values with Jimmy Stewart localism, Germany’s economy is running rings around America’s. “What we have here is stakeholder capitalism, not shareholder capitalism,” says Hubner. And like most mittelstand [i.e., a family-owned small and mid-size manufacturing firm] owners, he adds: “I live where my company is located. I want a good image in the town I live in.”

Read more here.

I’ve long been intrigued by the “social market” model that prevails in Germany, which seems to provide a genuine third way between socialism and American-style devil-take-the-hindmost capitalism–one that prizes solidarity and stability over “creative destruction.” It also seems to be different in important ways from the much-touted “Nordic” model, which combines relatively light market regulation with a generous welfare state and a strong commitment to individual autonomy. U.S. conservatives and libertarians have a habit of yelling “Socialism!” at any departure, no matter how minor, from laissez-faire purism. But the fact is, there are many different models of workable mixed economies, some of which seem to outperform the U.S. model when it comes to equity and well-being. This isn’t to deny that there are trade-offs and that these models also have their problems, but if Americans were more informed about these other models, we might make better political choices.

One thought on “The German miracle?

  1. Great find, Lee. I’ve been reading a fair amount lately about various different democratic and socialist experiments, and one thing that has been made very clear to me is that any movement beyond capitalism is going to have to be a hybrid one. Germany’s social market approach is a valuable hybrid, one definitely ought to be learned from (the role of locally restricted municipal banks strike me as particularly important).

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