Monday, January 16, 2012

What makes Angela Merkel tick? (1 of 6) Angie and ordoliberalism

"Was man wann riskiert, kann man erst sagen, wenn eine solche Situation eingetreten ist." ("What one will risk and when, one can only say when such a situation presents itself.") - Angela Merkel, Mein Weg.Angela Merkel im Gespräch mit Hugo Müller-Vogg (2004)

German Chancellor Angela Merkel is clearly deeply committed to her conservative, at-least-semi-authoritarian version of economics. Bloomberg Businessweek's Peter Coy was perceptive in his article , Will Angela Merkel Act, or Won't She? 11/30/2011 in noting Angie's strong identification with "ordoliberalism", also known as "Ordnungsökonomik". Coy noted that it was "a conceptual blend of free markets and strong government." And, "Sound money is the polestar of the ordoliberal tradition."

That's a good summary of Angie's position. And she was willing to risk the break with Britain that occurred at the December EU summit in order to impose it on all the countires of the eurozone and as much of the rest of the EU as possible.

The serious authoritarian trend in EU member Hungary, which has put them in a situation that they wouldn't qualify for EU membership if they were applying today, doesn't much seem to bother her. She's much more interested in seeing Hungary join the permanent austerity club by approving constitutional changes via treaty obligation that would effectively give Angie the final say on their budget, along with every other EU country except Britain, which already refused to play ball. (Prime Minister David Cameron handled that situation as recklessly as Angie has been acting, but that's another story.)

Angie's 2004 book Mein Weg, structured as a set of interviews with an obviously very sympathetic interviewer, is a major source of biographical information on her. Though obviously no good biographer is going to simply take her word on all the factual claims. Even honest memory can be a tricky thing.

In it, she makes very clear her commitment to her ordoliberal economic conceptions, which mostly sound like a dreary list of the items in the neoliberal/Washington Consensus/globalization/one-percenter recipe: lower pensions, later retirement, lower wages, weaken unions, less adequate unemployment insurance, more expensive and lower quality health care. All this for das Volk, of course, but certainly not for the one-percenters, which she at least doesn't call "job creators" there.

But she might as well have, because she justifies it all on the grounds of globalization, competitiveness, faster growth, technological change, etc., etc. Nothing terribly original there. But it is interesting to see how in her career since she's been so committed to that perspective, mostly drasticly in driving the EU toward the cliff with the pedal to the medal.

This, however, is quite revealing:

Hier konnen wir von den Amerikanern lernen. Der Amerikaner sagt: »Ich muss mir das Prinzip anschauen. Ich habe ganz offensichtlich neue Verhältnisse und brauche neue Spielregeln.« Was macht der Deutsche? Der ist erst einmal deprimiert und denkt, vielleicht ist der Staat doch der sichere Hafen - wie ein Kleinkind, das bei den ersten Gehversuchen fällt und dann lieber liegen bleibt, als sich nochmals weh zu tun. Völlig falsch! Wenn man Alan Greenspan und anderen amerikanischen Vordenkern zuhört, dann beschreiben sie einem mit leuchtenden Augen, wie sie aus diesen Fehlern gelernt haben und dass ihnen so ein Debakel wie bei den Technologie-Aktien nie wieder passieren wird. So muss die Antwort ausfallen. Deshalb ist jetzt auch die Diskussion um »corporate governance« so wichtig: Wie sorgen wir fur Transparenz an den Aktienmärkten, wie ist die Beziehung yon Aufsichtsraten zu Vorständen? In der Informationsgesellschaft kann nicht mehr nach den Regeln der alten Industriegesellschaft gespielt werden. Aber deshalb auf das Spiel zu verzichten ware die völlig falsche Schlussfolgerung.

[Here we can learn from the Americans. The American says: "I must look at the principle. I very clearly have a new situation and I need new rules of the game." What does the German do? First he gets depressed and thinks, may the state is a more secure harbor - like a little child who falls down on his first attempt to walk and then would rather just lie there than to hurt himself again. Completely wrong! If one listens to Alan Greenspan and other leading American thinkers, they describe with clear eyes how that have learned from these mistakes and that such a debacle as with the technology stocks [the 1990s tech boom] will never happen again. That how the answer has to be. That's why the current discussion about "corporate governance" is so important: how do we take care for the transparency of the stock market, what is the relationship of the boards of directors to the CEOs? One can't play in the information society with the rules of the old industrial society. But to refuse to play the game because of that is completely wrong conclusion.] [my emphasis]

I'll unpack this statement further in the next post.

Sources on Angie's life and career:
  • Gerd Langguth, Angela Merkel.Aufstieg zur Macht - Biographie(DTV; München) 2007 edition
  • Michael Lümann, Der Osten im Westen - oder: Wie viel DDR steckt in Angela Merkel, Matthias Platzeck und Wolfgang Thierse? Versuch einer Kollektivbiographie (ibidem-Verlag; Stuttgart) 2010
  • Angela Merkel, Mein Weg.Angela Merkel im Gespräch mit Hug Müller-Vogg (Hoffmann und Campe; Hamburg) 2004
  • Volker Resing, Angela Merkel.Die Protestantin - Ein Portrait (St. Benno-Verlag; Leipzig) 2009


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