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April 3, 2004
Is Germany Awakening From Its Socialist Coma?

The London Telegraph profiles a new German book that is flying off the shelves in Berlin and around the country, arguing that Germany may be in a fatal economic decline. The book, Germany: Decline of a Superstar, points out the crippling effect the nanny state has had not only on German productivity but also on its inventiveness and its self-sufficiency:

The book argues with a brutal frankness that Germany needs to be completely restructured and that it has been poorly run since 1945.

The result, according to Mr Steingart, is a country where industry is on its knees, where the welfare state is deep in debt, whose inventive minds have been forced into exile, and whose citizens largely hate work. ... "It is simply not profitable or viable to have German workers, who cost considerably more than they produce," Mr Steingart says.

"Our productive core is melting away and Germany is going downhill," he says, drawing on a cigar and leaning back in a leather armchair in his glass-panelled office in central Berlin. "The GDP of both the British and French is higher than the Germans' and this is a shocking discovery for us. In the 1970s, Britain's GDP was only half of ours."

By way of example, the book discusses the Adlon Hotel, a five-star establishment in the heart of Berlin, which was rebuilt almost from scratch after World War II. The Adlon receives foreign dignitaries and the wealthy and powerful from all over the world, and one would suppose that spending a night would cost more than most of us take home in a week. For all of that, the Adlon is still forced to outsource its laundry service by trucking the linens 80 miles to Poland every night. Why? Because the overnight service, transportation costs, and the sheer inconvenience are all outweighed by German labor costs, where the employer has to pay 42% of all social entitlement taxes on each worker.

Germany has been paralyzed on the issue of economic reform, which has undermined Gerhard Schroeder's government in much the same way that the Socialists have challenged the cutbacks proposed by Chirac's so-called conservative government in France. Once the masses have sipped the nanny-state Kool-Aid, you find that their addiction to government stipends resists most efforts at detoxification. In that way, creeping socialism isn't so much of a cycle as it is a steady march towards bankruptcy. The popularity of this book indicates that all hope isn't lost, but it will take a lot more than 50,000 copies to reverse the decline.

One of my first posts on this blog related a story that perfectly captures the problems that Germany will face in trying to recast itself as an economic power. The first step will be to convince Germans like this that they aren't entitled to a comfortable lifestyle without working for it. While that's hardly a revealed wisdom in the US, in much of Europe it would be anathema to suggest that people who don't produce don't have the right to share in the spoils.

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Posted by Ed Morrissey at April 3, 2004 6:39 AM

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