Heiner Flassbeck

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Heiner Flassbeck 2011

Heiner Flassbeck (born December 12, 1950 in Birkenfeld ) is a German economist. From 1998 to 1999 he was State Secretary in the Federal Ministry of Finance and from January 2003 to the end of 2012 Chief Economics and Development at the UN Organization for World Trade and Development ( UNCTAD ) in Geneva . Alongside Paul Steinhardt, he was editor of the online journal Makoskop until November 2019 and, like him, is on the board of the Georg Friedrich Knapp Society for Political Economy (GFKG)

Life

Heiner Flassbeck studied economics at the Saarland University from 1971 to 1976 . During this time he was assistant at Wolfgang Stützel's chair with a focus on currency issues. He then worked until 1980 in the assistant staff of the Advisory Council to assess macroeconomic developments . He obtained his doctorate in 1987. rer. pole. at the Free University of Berlin with the topic: Prices, Interest and Exchange Rate. On the theory of the open economy with flexible exchange rates .

After having worked for the Federal Ministry of Economics in Bonn since 1980 , he switched to the German Institute for Economic Research (DIW) in Berlin in 1986 , where he worked on labor market and business cycle analyzes and on economic policy concepts. In 1990 he took over the management of the business cycle department at DIW .

After the change of government in October 1998, he was appointed State Secretary in the Federal Ministry of Finance ( Schröder I cabinet ). He advised the then Federal Finance Minister Oskar Lafontaine on his plans to establish a Keynesian financial and currency policy at the European level together with the French Finance Minister Dominique Strauss-Kahn and to reform the world currency system. After Oskar Lafontaine resigned as Federal Minister of Finance in March 1999 because of irreconcilable differences with Federal Chancellor Gerhard Schröder, Flassbeck was dismissed as State Secretary by Hans Eichel in April 1999 .

He then worked as a freelance economics researcher and journalist. From November 2000 to December 2002 he worked as a senior economist at the United Nations Organization for World Trade and Development UNCTAD . From January 2003 until his retirement he was Chief of Macroeconomics and Development at UNCTAD, and since August 2003 Director of the Division on Globalization and Development Strategies .

The Hamburg University of Economics and Politics appointed Flassbeck an honorary professor in March 2005 .

Economic policy positions

In his early academic career, in the 1980s, Flassbeck dealt in particular with questions of foreign trade theory and monetary policy. In his 1985 work Free Trade, GATT and the International Monetary System , he submitted an attempt to redefine the advantages of free trade on the basis of a new theory of trade. In the framework of a system of flexible currencies, a decision between protectionism and free trade cannot be made, and the desired national autonomy of monetary policy cannot be achieved. In his dissertation from 1988, Prices, Interest and Exchange Rate , he finally advocated “absolutely fixed exchange rates” as the only solution that would guarantee an efficient and constant adjustment of the world economy and external price stability. According to Flassbeck, the effects of revaluations and devaluations in the case of flexible exchange rates are similar to discretionary state intervention and are just as exogenous as changes in exchange rates that are not determined by the market.

Heiner Flassbeck presented his economic policy positions in the book The End of Mass Unemployment (2007), which he wrote together with economist Friederike Spiecker . He does not see the reasons for the long-term growth weakness and high unemployment in Germany as a result of technical progress , globalization or excessive wages, but rather a policy that is not oriented towards demand. Instead, Flassbeck pleads for an economic policy that follows Keynesian basic ideas and calls for a “reform of thought”. After the financial crisis first came to a head , he published his book Failed in March 2009 . Why politics surrenders to the economy . There he sheds particular light on the failures of German economic policy in reunification and their repetition in the European Monetary Union . He attributes the economic crisis to a structurally conservative policy that is oriented towards individual economic interests, which would ultimately call the market economy into question.

In September 2010, Flassbeck's book was published: The market economy of the 21st century . Shocks and crises are the norm in a market economy system, phases of stability are the exception. What is needed is an international monetary order such as that which existed in the early post-war period with Bretton Woods . In the new market economy of the 21st century, open-ended solutions must be sought for every problem that can be borne either by the market or by the state. The prices clearly to be determined by the state at the international level include interest, exchange rates and environmentally relevant raw materials. Even in a system of deregulated financial markets like the one that has existed since the early 1980s, price formation based on supply and demand is no longer in force - so there is no market in the true sense of the word.

Another publication by Flassbeck, the Ten Myths of the Crisis , which appeared for the first time in January 2012 , contains a predominantly political assessment of the financial and euro crisis as well as the expectation that the economic " enlightenment " can only be achieved through a new crisis expected in the future.

Save and invest

Flassbeck attaches a significant role to the insight that an economy cannot save. The general opinion that an economy can save net, that is to say that it can save money overall over a certain period of time in order to finance investments with the money saved only in a future period , is wrong. Saving for one economic entity currently necessarily leads to a loss of income for another economic entity. In the present, someone in economics is left with his offer. Expenditures that were not made were eliminated in the same amount. Since the sum of the receipts and thus the incomes of all economic agents are equal to the sum of the expenditures and thus the demand of all economic agents, the incomes decrease as a result. The income generated within a period must always be used. In analogy to time savings that cannot be saved , there cannot be saving in the sense of not being used in an economy. Today's investments are the prerequisite for the formation of savings, not the other way around. Both sizes are only the same from an ex-post perspective.

Due to the lack of knowledge among citizens and economic politicians about the difference between macroeconomic and individual economic perspectives, according to Flassbeck, many errors in today's economic policy can be analyzed. The national debt is mistakenly viewed as a debt to future generations. Instead, the prosperity of a country is determined solely by its future capital stock , i.e. above all by the existing machines and systems as well as the qualification level of its population and social capital (which includes the stability of the basic social order). Debt at the national level is problematic only if it exists net abroad.

Monetary, fiscal and wage policy

Heiner Flassbeck at a lecture in Bremen 2015

Flassbeck sees the need to coordinate monetary policy , wage policy and fiscal policy . Flassbeck considers monetary policy to be of paramount importance for growth and employment and rejects reducing it to preserving price stability . He declares monetarism as the control of the inflation rate via the money supply to have failed. It was practiced by some central banks in the 1980s as a reaction to the oil crises and the associated stagflation of the 1970s, but led to a slump in investment and high unemployment and was therefore given up again by the 1990s at the latest. Flassbeck emphasizes the peculiarities of German and European monetary policy, which, in contrast to the majority of central banks, have remained with a monetarist stance.

Flassbeck argues that the monetary policy of the Bundesbank and the ECB has always been based on the production potential of the past when managing the money supply . If the growth of the money supply or the gross domestic product exceeds the estimated production potential, the ECB, like the Bundesbank in the past, would switch to a restrictive course in advance without there being any significant threat to price stability in the form of exceeding the target inflation rate . You can never determine a production potential in advance.

According to Flassbeck, wage policy is intended to ensure that overall economic wage adjustments are “ neutral in distribution ”. The optimal wage increase rate results from the addition of the inflation rate and the increase in labor productivity . The nationwide agreement holds Flassbeck here for the best with the market economy to be agreed solution. This mechanism enforces the law of one price , the law of the same price for the same goods, against the imperfections and information asymmetries of the labor market.

Monetary union

Flassbeck sees a currency union primarily as an "inflation community". This means that all member states of a currency union must have the same rate of price change. This can only be achieved by aligning the growth in unit labor costs with the aim of ensuring the price competitiveness of all countries and avoiding high current account surpluses and deficits. As a consequence for the euro zone , he demands that all euro countries must comply with the target inflation rate of the European Central Bank. Since Germany, through its concept of “wage restraint”, has fallen significantly below this target inflation rate since the introduction of monetary union, while it was maintained or slightly exceeded by other countries, German industry has gained market share on a large scale at the expense of other countries in the euro zone.

As a solution to this problem, which he sees as the fundamental cause of the euro crisis , Flassbeck proposes a coordination of wage policy in the European monetary union. Against the background that the possibility of revaluations and devaluations by the elimination of the national currencies is no longer given, the only alternative is a real devaluation of the countries with high current account deficits like Spain , Portugal , Greece and Italy as well as a real revaluation of Germany - causes permanent higher wage increases in Germany than in the rest of the euro zone.

Economic miracle

Flassbeck does not attribute the “economic miracle” of the 1950s and 1960s to Ludwig Erhard's economic policy and his only partially implemented concept of an ordoliberal “social market economy”, but to American monetary policy, which was implemented during the Bretton Woods system ( until about 1973) had a decisive influence on the German interest rate level. The stable exchange rates, which were reflected in an often undervalued D-Mark , would have helped the European economies to catch up. Furthermore, Flassbeck compares the German economic growth of the " economic boom " with that of other national economies and comes to the conclusion that Germany only had slightly higher growth rates than France and Italy in the 1950s , but fell below the average of these countries as early as the 1960s be. Compared with the growth of the Japanese economy, which is much less market-oriented and competitive, the economic miracle seems “like a walk”. Only the United Kingdom could not keep up with this continental European and Japanese development.

Statements on current economic policy

Heiner Flassbeck takes a diverse stance on economic policy issues in the media, for example in the print media Handelsblatt , Zeit , Frankfurter Rundschau , Junge Welt or taz .

He represents his positions, which are in part committed to Keynesianism and especially Joseph Schumpeter and Wilhelm Lautenbach , in economic theory and economic policy frequently in the media. In April 2010, in view of the beginning currency crisis , often referred to as the euro crisis in Germany, he demanded that banks should separate “the business of gamblers and normal market activities”. The function of the rating agencies should no longer be left to private individuals. The austerity policy demanded by Greece is unrealistic; the basic problem is not Greece, but the economic imbalance in the economic area of ​​Europe, especially with regard to the competitiveness of the southern European member states.

A functioning market economy in the 21st century has the following requirements: “Global governance is necessary. Globalization needs worldwide rules. The G-20 countries are a step there, if not the best. The UN would be better, but things take a long time there. In addition, the monetary union must be saved, otherwise the EU will fall apart. Thirdly, the participation of all people must be ensured at home. Wages must rise - as must productivity growth . In terms of climate protection , the oil price must no longer be determined by speculation - it belongs out of the market system and then controlled supranationally. "

In May 2013, Flassbeck wrote that it was irresponsible to suppress the possibility of an exit from the euro from the political discussion and that Germany would undoubtedly be hit hard in an exit scenario. As a possible solution to the crisis in the euro area, he demanded that Germany must radically change its position in order to reduce the competitive gap in the euro area through appropriate wage increases in Germany. In an interview with n-tv, Flassbeck commented on whether the federal government was behaving successfully during the euro crisis: “Nothing has happened in the domestic economy. We hit the other countries on the wall, our customers are on the way to bankruptcy ... I don't know if you can call that successful. "

Publications (chronological)

Web links

Commons : Heiner Flassbeck  - Collection of images, videos and audio files

Interviews and lectures

Individual evidence

  1. ↑ On our own behalf
  2. ↑ macroscope. Critical analyzes of politics and economics. In: makoskop.eu. Prof. Dr. Heiner Flassbeck, Dr. Paul Steinhardt;
  3. ↑ Georg Friedrich Knapp Society for Political Economy eV In: makroscope.eu. Prof. Dr. Heiner Flassbeck, Dr. Paul Steinhardt;
  4. ↑ "Schröder liked to be among the top ten thousand"
  5. ^ The exit of Lafontaine and Flassbeck from the Schröder government: Dissent over financial and wage policy
  6. ↑ Personal data on Heiner Flassbeck at the University of Hamburg ( Memento from March 17, 2013 in the Internet Archive )
  7. ↑ https://www.pressreader.com/austria/salzburger-nachrichten/20110617/284945311641983 , Salzburger Nachrichten, June 17, 2011
  8. ↑ Heiner Flassbeck, Friederike Spiecker: The German wage policy breaks the European monetary union (PDF) .
  9. ↑ Heiner Flassbeck, Friederike Spieker: The Euro - a Story of Misunderstanding (PDF; 130 kB), Intereconomics 4/2011, pp. 180–187
  10. ↑ Heiner Flassbeck: The end of mass unemployment , p. 149
  11. ↑ Simone von Stosch : Put a stop to the madness. In: tagesschau.de . April 28, 2010, accessed June 1, 2014 .
  12. ↑ Marcus Pindur: “One could also do away with the rating agencies completely”. In: dradio.de. Deutschlandradio, April 30, 2010, accessed on May 3, 2010 .
  13. ↑ Philip Stotter: “The next crash is sure to come”. In: kleinezeitung.at. Kleine Zeitung Digital, November 2, 2010, archived from the original on January 12, 2012 .;
  14. ↑ Norbert Häring: "Snatch raw materials from speculators". In: Handelsblatt.com. February 11, 2010, accessed July 7, 2013 .
  15. ↑ Heiner Flassbeck: Don't get the euro at any price. In: zeit.de. Zeit Online GmbH, May 27, 2013, accessed on May 28, 2013 .
  16. ↑ Hubertus Volmer: “There is no debt crisis at all”. Interview with Heiner Flassbeck. In: n-tv.de. July 5, 2013, accessed July 5, 2013 .
personal data
SURNAME Flassbeck, Heiner
BRIEF DESCRIPTION German economist
DATE OF BIRTH December 12, 1950
PLACE OF BIRTH Birkenfeld (Nahe)