Global control

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Global control is an expression coined by Karl Schiller for an economic policy concept that was primarily inspired by the theoretical ideas of the economist John Maynard Keynes . In 1967 it was enshrined in law with the Stability and Growth Act.

The economic policy concept

Global control represents a permanent process of state influence on the course of economic development without fundamentally affecting the market economy order. According to Karl Schiller , Federal Minister of Economics from 1966 to 1972 and also Federal Minister of Finance from 1971 to 1972, “an enlightened and persistent economic and social policy should channel market forces so that they retain their kinetic energy without getting out of hand”. The means of global control primarily affect the demand side of the market. In doing so, macroeconomic demand is to be adjusted to the development of production potential by taking economic policy measures from the areas of fiscal , monetary , income and foreign trade policy that are considered suitable . The economic policy goals pursued are represented as a magic square . Last but not least, this includes a high level of employment . The specific goals were a real growth rate of the national product of 4%, an unemployment rate of less than 0.8% and an inflation rate of less than 1%.

An essential element of this is concerted action . The state "in a permanent dialogue with associations of entrepreneurs, workers and the world of finance in order to meet about them and with their help his duties." Occurs here adding a coming national accounts and refined prognostic tools (quantitative target forecast). With the law on the formation of a council of experts to assess macroeconomic development of August 14, 1963, already passed under the Adenauer / Erhard government , scientific advice on national economic policy was institutionalized; stated objectives of economic policy.

evaluation

The economic crisis since the summer of 2008 led to a discussion in Germany about the meaning and necessity of economic policy. An information letter for the German Bundestag from January 22, 2009 examines the German experiences with regard to economic policy under the aspect of today's economic doctrines, which have changed from Keynesianism to monetarism and new macroeconomics. Only "discretionary, one-off or multiple measures" are treated as an economic stimulus program. Claus-Martin Gaul , the author of this information letter, regards the policy of global control in the years from 1967 to 1982 as a total failure. Last but not least, the failure to limit public debts and to improve the flexibility and supply conditions of the German economy, in addition to providing economic stimuli. The stabilization of the gross domestic product and employment were only partially successful; they were bought at the price of high inflation rates and rising national debt. What emerged from this was the realization that problems that tend to affect the supply side cannot be solved by demand-side stimulus measures. The subsequent analysis of economic policy is, however, generally associated with the difficulty that it cannot be carried out using clear reference scenarios. Even sophisticated macroeconomic model analyzes can only inadequately depict how the economic development of the Federal Republic of Germany would have proceeded without the application of demand-side economic stimulus programs. In contrast to the Keynesianism of the 1960s and 1970s and the monetarism of the 1980s and 1990s, however, no clear recommendations for action for economic policy have so far emerged on the basis of the more recent theoretical findings of economic theory. From the failure of global control, however, knowledge was gained when and with which measures economic policy can be helpful, said Gaul.

Keynesians explained the failure of global control with various factors:

  • The lack of coordination between an expansive fiscal policy and an opposing monetary policy of the Bundesbank (In an empirical comparative study in 1982 Fritz Scharpf examined the causes of the different performance of Sweden, Austria, Great Britain and the Federal Republic, all of which had pursued a similar economic policy. Scharpf sees The decisive difference in the respective institutional environment of the individual national economies. In the Federal Republic of Germany the independent position of the Bundesbank led to a conflict between employment policy and the fight against inflation . This ultimately depressed the growth rate and produced persistent unemployment, according to Scharpf's conclusion.)
  • Loss of efficiency due to federal coordination problems
  • Government spending was increased during the recession, but not reduced as planned in the boom phase
  • Global control generated inflation through a wage-price spiral.

Another problem is the delay effects between the prediction or detection of an economic situation and the use of the economic policy mean. A countercyclical measure can thus lead to a procyclical amplification of an economic fluctuation.

Individual evidence

  1. ^ Karl Schiller: Future tasks of the industrial society. In: Andrew Shonfield: Planned Capitalism. Economic Policy in Western Europe and the USA. With a foreword by Karl Schiller. Kiepenheuer & Witsch: Cologne, Berlin 1968. S. XVIf.
  2. ↑ Scientific Service of the German Bundestag By Dr. Claus-Martin Gaul: Economic stimulus programs in the history of the Federal Republic of Germany. Classification and evaluation of the global control 1967 to 1982 ( memento of the original from March 6, 2009 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 253 kB) German Bundestag 2008 @1@ 2Template: Webachiv / IABot / www.bundestag.de
  3. ^ Karl Schiller: Future tasks of the industrial society. In: Andrew Shonfield: Planned Capitalism. Economic Policy in Western Europe and the USA. With a foreword by Karl Schiller. Kiepenheuer & Witsch: Cologne, Berlin 1968. S. XX.
  4. ^ Karl-Heinz Dignas: Problems of scientific advice to politics. Shown using the example of the Advisory Council for assessing macroeconomic development. From politics and contemporary history . Supplement to the weekly newspaper Parliament. B 43/75. October 25, 1975. p. 4.
  5. ↑ FELDERER, Bernhard / HOMBURG, Stefan (2003): Macroeconomics and new macroeconomics. 8th edition. Berlin.
  6. ↑ Claus-Martin Gaul: Archive link ( Memento of the original from March 6, 2009 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 253 kB) Economic stimulus programs in the history of the Federal Republic of Germany. Classification and evaluation of global management 1967 to 1982. German Bundestag Scientific Services, 2008. @1@ 2Template: Webachiv / IABot / www.bundestag.de
  7. ↑ Gaul, p. 16.
  8. ↑ p. 8.
  9. ↑ p. 21.
  10. ^ Fritz W. Scharpf: Social Democratic Crisis Policy in Europe. Campus 2nd ed. 1987. ISBN 3-593-33791-6 . P. 165 ff.
  11. ^ Klaus Schaper: Macroeconomics . Campus Verlag, 2001. ISBN 3593367335 . P. 84.
  12. ↑ Federal Agency for Civic Education: Lexicon entry global control

literature

  • Herbert Giersch : Episodes and lessons of global control. In: Heiko Körner et al .: Economic Policy - Science and Political Tasks. Bern 1976, pp. 277-296.
  • Jürgen Kromphardt : The Future of Global Control - Theoretical Perspectives. In: Körner, Uhlig, (ed.): The future of global control. Bern 1986.
  • Carl Christian von Weizsäcker : Limits of Traditional Global Control. Yearbooks for Economics and Statistics, 1975, 189, pp. 1–41.
  • Johann Welsch: Global Control in the Federal Republic. Bund Published by Köln 1980.

Web links