A couple of months ago, I wrote about how bad Germans are at investing. One piece of evidence was that German business owners are bad at directing foreign direct investments (FDI) to high return places. Instead, they prefer to invest in regions that are safer and geographically closer to home. Now, a new study on the impact of the Trump Presidency, the pandemic, and the Ukraine war looks at how German FDI has changed in the last six years…
I recently did an article for a US magazine on how Germany's socio-economic system based on cooperation, consensus and social justice to serve the interests of multiple stakeholders - Rhineland Capitalism - e.g. Co-determination ‘Mitbestimmung’ approximated what Adam Smith originally wrote was a functional economy than US turbo charged shareholder capitalism. I shared it with a few of my German friends and they all commented how screwed the German system has become. Some suggested its corporate governance had lapsed, others suggested leadership...I was surprised because as an American Rhineland capitalism seems far superior and light years ahead in terms of a socio-economic model and an export juggernaut and Hidden champions are world beating. Has there been any systemic analysis on what's happened to the Rhineland model? My eldest daughter was born and raised in Berlin which is an amazing city full of start ups, edgy, ect and they are streets ahead of us on so many fronts, e.g. recycling and technical prowess. And their education system is awesome, and their vocational training seems second to none. So what's happened? This may not be the best forum as I'm sure it's a long and complicated story...
I remember realizing only a few years ago that, defying conventional wisdom that the German economy has *always* been disproportionately export-dependent, from the '70s through 2000, it was more like 15-25% exports, not the 45-50% reached 2010-present https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?locations=DE .
This chiefly Chinese export market dependence has clearly resulted in some perverse outcomes: Merkel oversaw both the loss of solar cell leadership and the sale of Kuka to the Chinese. Now Scholz is against the EU placing tariffs on Chinese EVs https://www.reuters.com/business/autos-transportation/germany-vote-against-eu-tariffs-chinese-electric-vehicles-sources-say-2024-10-03/ . I can only imagine that this sort of light-touch approach to protectionism is related to not wanting things to spiral into an all-out trade war that could exacerbate a flat-lining economy already reeling from high energy costs, amongst other challenges.
I recently did an article for a US magazine on how Germany's socio-economic system based on cooperation, consensus and social justice to serve the interests of multiple stakeholders - Rhineland Capitalism - e.g. Co-determination ‘Mitbestimmung’ approximated what Adam Smith originally wrote was a functional economy than US turbo charged shareholder capitalism. I shared it with a few of my German friends and they all commented how screwed the German system has become. Some suggested its corporate governance had lapsed, others suggested leadership...I was surprised because as an American Rhineland capitalism seems far superior and light years ahead in terms of a socio-economic model and an export juggernaut and Hidden champions are world beating. Has there been any systemic analysis on what's happened to the Rhineland model? My eldest daughter was born and raised in Berlin which is an amazing city full of start ups, edgy, ect and they are streets ahead of us on so many fronts, e.g. recycling and technical prowess. And their education system is awesome, and their vocational training seems second to none. So what's happened? This may not be the best forum as I'm sure it's a long and complicated story...
I remember realizing only a few years ago that, defying conventional wisdom that the German economy has *always* been disproportionately export-dependent, from the '70s through 2000, it was more like 15-25% exports, not the 45-50% reached 2010-present https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?locations=DE .
This chiefly Chinese export market dependence has clearly resulted in some perverse outcomes: Merkel oversaw both the loss of solar cell leadership and the sale of Kuka to the Chinese. Now Scholz is against the EU placing tariffs on Chinese EVs https://www.reuters.com/business/autos-transportation/germany-vote-against-eu-tariffs-chinese-electric-vehicles-sources-say-2024-10-03/ . I can only imagine that this sort of light-touch approach to protectionism is related to not wanting things to spiral into an all-out trade war that could exacerbate a flat-lining economy already reeling from high energy costs, amongst other challenges.