Capitalism versus capitalism

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Capitalism versus capitalism is the title of a specialist book by the French economist Michel Albert , published in 1991 . Albert defines the term Rhenish capitalism as a general type of capitalism derived primarily from the German economic and social system and contrasts this system with a neo-liberal model derived from the economy of the USA. Albert puts forward the theses that Rhenish capitalism is more efficient and fairer than Anglo-American capitalism , but that the latter will prevail because it appears more attractive and has advantages for influential social classes. In his 1991 book, he recommended the implementation of Rhenish capitalism to European countries, especially France .

Origin of the book

The book was originally intended to influence the political debate in Albert's home country of France at the time. While Germany at the time seemed to be able to cope with the costs of German unity itself , France under Prime Minister Edith Cresson was struggling with economic problems, strikes and inefficient statism . Albert wanted to show France the advantages of a variant of the German system.

The original title is Capitalisme contre capitalisme , the German translation was published in 1992.

The term Rhenish capitalism

The term Rhenish capitalism coined by Albert in this book as an ideal-typical, generalized term for an economic and social order based essentially on the German model has not caught on internationally. The terms used by Peter A. Hall and David Soskice in their book Varieties of Capitalism are being used internationally and increasingly also in German research

LME liberal market economies ("Liberal Economies")

and

CME coordinated market economies ("coordinated economies")

used. The term coordinated economy is not a synonym for Rhenish capitalism , but largely congruent and not sharply differentiated from it. Rhenish capitalism in the narrower sense of the German model is a special form of a coordinated economy.

content of the book

The book is divided into ten chapters in addition to the introduction and a closing word :

  1. America is back
  2. America backwards
  3. Finance and fame
  4. The Anglo-Saxon insurance system against the Alpine insurance system
  5. The other capitalism
  6. The economic superiority of the Rhenish model
  7. The social superiority of the Rhenish model
  8. The reverse development of the Rhenish model
  9. Why does the less powerful win?
  10. The second lesson from Germany

introduction

The introduction differs significantly from the usual introductions. She already outlines the entire line of argument and shapes the term Rhenish capitalism.

First, Albert noted three victories for capitalism. The first is the tax cut race in the primeval capitalist countries of England and the USA, i.e. its unleashing, the second the surrender of communism without a fight and the resulting economic exhaustion of the Eastern bloc, and the third the second Gulf War and thus the victory of capitalism over dictatorships. Since then, the term “ Third World ” has been meaningless. Supposedly, the world is now divided quite simply into capitalist countries, countries on the way there and countries that will sooner or later also embark on this path. In fact, however, such a view reveals that there is no one type of capitalism, but some. Two very contrary models could be worked out. He picks out 10 examples:

  1. The immigration : Here is oriented Albert implicitly Frenchman Emmanuel Todd , by stating that the Anglo-Saxon countries are prepared much more to integrate their immigrants than was the case in the "German-Japanese model."
  2. The poverty : In the US and Japan there is a tendency unemployed slacker than to despise. Hence, these countries would have social systems which could in no way be compared with the highly developed European countries, which see the unemployed as victims. Europeans would have already afforded such systems when they had a significantly lower per capita income than Japan and America. However, Europe is also beginning to make savings.
  3. Effect of social security on economic development: While in the USA and England social security is seen as an advantage of laziness, in the Alpine countries, Benelux countries and the Scandinavian countries it is seen as a consequence of economic progress. There you can also see the risks inherent in the marginalization of the poor. However, a development from the extreme poles can also be observed.
  4. The hierarchy of wages and salaries: A tradition of capitalism par excellence is an individual cost-benefit assessment of each employee and a determination of the remuneration based on it. This favored very large income disparities, and indeed the gap would widen rapidly in England and the United States since the Anglo-Saxon conservative revolution. In the Alpine countries and Japan, on the other hand, attempts are made to “keep the hierarchy of wages and salaries within narrow limits” (p. 16).
  5. Does the tax system have to favor saving or debt? In France, Germany, and Japan saving would be favored, that is where the ants would be at home. Crickets would be at home in the USA, where success is expressed through external symbols of wealth, and debt is favored by the tax system. "For many years the United States and the United Kingdom have been funded by Japan and Germany" (p. 17). This is the cause of a profound conflict between the models.
  6. Which is better: more regulations and officials to apply, or fewer regulations and more lawyers to litigate? After the neoconservative creed was deregulation , it was noticed in these countries that the main winners of deregulation were the "lawyers", whose number in the USA already exceeded that of the farmers. Nonetheless, EC law is also moving in this direction.
  7. Bank or stock exchange: According to the liberal theory, only a completely free capital movement open to competition guarantees the optimal supply of money to companies. Accordingly, the proportion of corporate financing through banks in the USA fell from 80% to 20% between 1970 and 1990. In the Alpine countries and Japan, too, the “young wolves and the old shareholders” had come to terms with the Anglo-Saxon party. Economies that the banks preferred to the stock exchanges would offer fewer opportunities to make wealth. The banking system is under pressure everywhere.
  8. How does power in a company have to be distributed between the shareholders on the one hand and the managers and staff on the other? On this question, there is “war” in the company management and the Anglo-Saxon model, which sees a company as a commodity, and the German-Japanese model, which sees it as a kind of complex community, are in opposition.
  9. What is the role of the company in education and training? According to Anglo-Saxon tradition, it is the company's job to make a profit. Training and investment in staff are long-term, uncertain and hinder profit making. In Japan and Germany, where the company has a more extensive function, they see things differently.
  10. A classic area of ​​the debate: the insurance system: the task of insurance companies is to enhance the future. For the Anglo-Saxon countries this is a pure market activity. The other view, on the other hand, attaches importance to an institutional framework that guarantees the security of companies and individuals.

Apparently there is no “one-best-way” of capitalism. It is as complex as life, but a polarization is emerging. The USA is the only model of the pure teaching of the liberal variant. At first glance, a German-Japanese variant suggests itself as the opposite, but on closer inspection there are clearly too few similarities between the two. A European economic model cannot be identified with a view to Great Britain, Italy, and Spain. So the Alpine countries would offer themselves, but - to include the Netherlands - even more the word Rhenish . In doing so, one must mentally include Scandinavia and with a cultural shift and look at the social then also Japan.

One finds such a contrast between two value systems of one and “the same capitalism, in the midst of the same liberalism” (p. 26).

America is back

Since the Gulf War and the collapse of communism, the zeitgeist has been downright “immensely liberal”, this also applies in Europe, whose common market , which started in 1993, still surpasses America in its absence of regulatory mechanisms. This is a "triumph of absurdity". Just as Europe was not in a position to first recognize the weakness behind the scenes of the Soviet system, it is now not in a position to identify the economic and social weaknesses of the US behind its military power.

How could it happen that a recently modern and permissive society like the American one developed a will for revenge and power so quickly? America suffered too many foreign policy defeats prior to the Reagan presidency and viewed it as humiliation. Domestically, there was also the fact that in the 1970s the “ American dream was replaced by the American evil ” (p. 31). "The famous silent majority felt painfully the disintegration of the social network and the political system" (p. 33). Reagan raised hopes with the motto “America is coming back!”. With rearmament and SDI he was now pursuing a foreign policy of strength that was successful in the media and internally the “renewal of American capitalism in its daring version” (p. 35) and at the end of the 1980s America had regained its leading role.

In fact, this success is the result of some "tangible privileges" of the USA:

  • "An incomparable, economic, financial and technological hereditary substance" (p. 39) and
  • cultural dominance based on language (English), universities and the media.

America was not gone at all, had only experienced a temporary relative decline in which Reagan kindled a flash in the pan that squandered part of the American heritage. In fact, the lights were already going out again in 1990.

America backwards

America shows signs of decay - not only in social terms, also in substance - and is affected by ghettoization, impoverishment, exclusion, crime, and decayed infrastructure. It is being sold out to foreign investors. Whether it is already a country in decline is difficult to answer, but one would get worrying impressions of disorientation. In any case, a rapid increase in the Gini coefficient can be observed, which is now described as "dualism" and which could lead to serious unrest. The dualism expresses itself in the meantime in society worryingly:

  • Low voter turnout,
  • Inability to count the population,
  • Excellent educational achievements in certain areas are paired with an illiteracy rate, which is higher than, for example, in Poland
  • child mortality is twice as high as in Japan.

All of this shows the expansion of poverty, and the worst deficit in the US, despite all its debts, is social.

In addition to the importance of multinational corporations abroad, American industry is in a phase of decline. Jobs were only created in the service sector, the “Big Three” car manufacturers are presented as losing money, and American industry has had to cede its former supremacy in many areas to Japanese and Europeans. “Generally speaking, the fascination for the stock market, economic speculation and the miracle profits that determined the 80s have damaged industry […] The distorted image of capitalism offered by the stock exchange has thus turned against capitalism itself. And while the whole world is only concerned with money, industry is heading towards its end ”(p. 60 f.).

The US budget and balance of payments deficits and corporate and household debt are even more threatening. America is now forced to have its investments financed from abroad. The ratio of debt to equity in American companies has deteriorated dangerously, 10% - it is estimated - of the largest American companies would be threatened with bankruptcy in the event of an economic crisis. This unprecedented weakness in the American economy and finances posed a threat to the rest of the world. “The major American banks are threatened by the collapse of the housing market and the numerous weaknesses of some of their creditors. […] Too big to fail : Beyond a certain size, every bank can be sure of the support of the public authorities, because the bankruptcy of one of these large institutions could quickly spread to the whole world. [...] Therefore, after ten years of ultra-liberalism, the whole future of the American financial system depends on the help of the federal government. A piquant but dangerous irony of history ”(p. 66).

Finance and fame

America is considered the country in which you can make a real fortune as a financier in a short time . What is special about the financier is that he generates a surplus through resale without any changes to the goods. In order to be able to buy first, there are only three financing options, which Albert explains: 1. Self-financing, 2. Bonds and 3. Increase in capital .

In the course of this, the terms junk bonds , leverage effect , leveraged buyouts and asset stripping are explained. The mostly young people who shine in the context of loan transactions and who prove their talent with borrowed money have meanwhile also received a lot of attention in the media, and even ended in a spiral of bragging about what an additional incentive for such an activity was. The successful financial brokers succeed in using their capital as pure “reputation capital” (the capital is the good reputation, the credit that one enjoys) and without any other equivalent value and to collect money for it.

Mergers and acquisitions are neither new nor particularly common in recent times (1990). What is new is the size of the stores and the lack of interest among the buyers to do something with the acquired companies other than to sell them again in whole or in part at a profit. The industry in the business resembles "the cousin from the provinces, whose old-fashioned clothes make you smile" (p. 77). The companies would be forced to drive up share prices as a shield against takeovers, to pay unjustifiably high dividends that sometimes diminish substance and to submit to the "tyranny of quarterly reports" (p. 78). They are forced to achieve short-term returns, even though their business requires long-term investments, including periods of initial losses, and excessive energy from their executives, as well as fees for lawyers and advisers on defense strategies against a "wholly unproductive (n) Stock market guerrilla ”(p. 79). You see yourself at the mercy of a new type of owner, who sells the company like a work of art and for whom the employees are only a kind of commodity.

In the financial markets it is no longer the market that rules, but the “monarchy of money”, which has gradually shed every form of morality . The morality of business is not just ornamentation, but is technically necessary for the proper functioning of capitalism. In view of the excesses, America is already reacting, according to the saying: “ Never sell America short ” (p. 88).

The Anglo-Saxon insurance system against the Alpine insurance system

The insurance systems that exist in the world have two different roots. The first, oldest, alpine is a community based on solidarity, which distributes individual risks to a community. The other, maritime, resulting from insurance for shipments, is a speculative management of risk. The alpine insurance system is characterized by, for example, uniform mandatory tariffs for car liability insurance. The maritime has completely free individual tariffs.

The insurance companies based on the Alpine model are indeed extremely powerful and solid, but are "being called into doubt by a fashion trend towards the maritime model and increasingly by the neo-American wave" (p. 92).

If you take a closer look, you can see the flaws of the maritime model. On the one hand, it prevents innovations, since it lives from the comparability of the content of the tariffs of different companies; on the other hand, it creates a group of people who can no longer afford the necessary insurance because of the premiums resulting from their risk profile. In California, of all places, the most liberal country to date in the USA, the pendulum is swinging back, an indignant population in a referendum, ignorant of the Alpine model, forced an "absurd form of dirigism " in the insurance industry. And: The Californian example is catching on, spreading to other states, such as New York.

Another problem with insurance companies based on the maritime model is that they are increasingly beginning to invest their assets in risk investments. American insurance companies in particular have signed “ junk bonds and billions in mortgage loans of dubious quality” (p. 102).

Regardless of this, the only current (1990) topic in Brussels is deregulation. This is "a special confirmation of the general tendency that the less efficient model wins in people's minds" (p. 102).

The other capitalism

The inhabitants of the former communist states, inspired by American television series, dreamed of capitalism, meant the American and would be very surprised to learn that there is a variant of the system in which prosperity coexists with relative social security. Albert points out that the Germans managed to “work less than the French but be just as efficient as the Japanese” (p. 104).

The Rhenish model has a different vision of economic organization, different financial structures and a different form of social balance. Above all, however, it has different ideas about which goods and services can be traded like goods.

In both models there is the same idea (with the exception of religions) about which goods are not tradable. However, there are considerable differences in the assessment of tradable and mixed (conditionally tradable) goods.

  1. In the Rhenish model, religions are not tradable institutions, while in the USA they are increasingly being run like mixed institutions.
  2. In the neo-American model, companies are a commodity like any other, while in the Rhenish model they are sometimes viewed as joint property.
  3. Wages , which in the neo-American model strongly depend on market fluctuations, in the Rhenish model relate less to the productivity of the recipient than to criteria such as qualifications or tariffs.
  4. Apartments are neo-American commercial goods, mixed with the Rhine, which are subsidized by social housing.
  5. Public transport is indeed regulated in the USA, but is more a free than a mixed good.
  6. Media are traditionally commercial in the USA. While there is a movement towards a free good in the Rhenish region, an exactly opposite tendency can be observed in the USA.
  7. The education system in neo-American is clearly subject to the laws of the market.
  8. Health and legal services : Here in the Rhineland the liberal professions (especially doctors and lawyers) are designed to protect their members from need so that they can freely and unselfishly devote themselves to the service of the community. The service is more an honor , the fee therefore has the character of an honorary salary and not a remuneration .

For Rhineland capitalism belongs also that more banks and less the stock exchanges dominated the financial affairs. Further characteristics are the traditionally close economic ties between banks and companies, a balanced power balance between shareholders and management, the social partnership between trade unions and employers , well-trained and loyal workforces thanks to dual vocational training and strong state regulation of economic activity ( market regulation ). There is a consensus among the population about values ​​for an egalitarian society and for the perception of community interests.

The economic superiority of the Rhenish model

While Japan and Germany were still completely in ruins after the Second World War , the FED should have discreetly asked the central banks of Japan and Germany for permission to open the dollar tap when it was planning the stock market crash in October 1987 . In 1990, against the opposition of the two countries, 20% of the central banks' foreign currency balances would be held in yen and DM . In the EMS, the stability policy of the Deutsche Bundesbank also forces the other countries to exercise discipline, and Germany benefits from this in two ways: 1. Germany determines the interest rate policy and 2. it could be kept relatively low. A strong currency enables inexpensive investments abroad, which the Rhenish states pursued in an inconspicuous but sustainable manner, which, unlike speculative takeovers, means that the target market is permanently fought for and the company is protected against protectionist measures because of the delocation that has taken place.

Albert doubts the validity of the J-curve . Empirically speaking, however, is that of all countries with strong currencies such as Japan, Switzerland and Germany constantly accumulating trade balance surpluses, and in theory that the postulated mechanisms of action cannot realistically be assumed without a time delay or in full implementation. As a result, none of the countries that had devalued their currencies by relying on the theorem would not have succeeded. A hard currency, on the other hand, forces companies to constantly increase productivity and to decide the competition on "quality, innovation and [...] customer service" (p. 137, see also: Hidden Champions ). France had long denied this consequence of a strong currency and the change in France on this point was "certainly the most beautiful gift that the Rhenish model has given the French" (p. 138).

The industry in the Rhineland is the "best in the world". That is a fact. In some future industries, the US is still a leader, but is about to lose this role. The extraordinary dynamism of the Rhenish industries is a special focus on production and intelligent production methods ( quality circles , just-in-time production , group work ), investments in the qualification and further training of their employees as well as a high level in research and development, which is state strongly supported, owed.

The Rhenish states have their own economic culture, which is first expressed in the propensity to save. In the opinion of the great authors of liberal thought, such as Irving Fisher , the rhythm of progress is linked to this. Characteristic is “thinking about the children” as opposed to “after us the flood”. In addition, the population in the Rhineland states better understands the importance of the economy, which is therefore mobilized in a completely different way and enables politics to have a stringent economic policy that is largely independent of elections.

The social superiority of the Rhenish model

Albert defines three criteria for making social superiority measurable:

  1. Degree of security for the citizen against risks such as illness, unemployment, etc.,
  2. Reducing social inequality as well
  3. Openness of social stratification.

It is obvious that the Rhenish model prevails over the neo-American model in the first two criteria. For example, the UK's tax-financed healthcare system has a bad reputation but is unprecedented in efficiency. At 7% of GDP , the UK has the cheapest health system and, paradoxically, the US at 11% is the most expensive in the industrialized countries, although a significant part of the population there has no health protection at all.

In Germany, however, one would find a social security system similar to that of Bismarck , which has its weaknesses due to the limitation of the solidarity principle to the income recipients. These are currently (1990) offset by the fact that social welfare abuse has hardly taken place and is socially outlawed. A prerequisite for such a culture is, however, an egalitarian society that does not allow excessive income differences between the classes and actively combats poverty and exclusion. In the USA there is a lack of both. Above all, the Reagan administration has declared the fight against poverty a private task.

In contrast, the Rhenish model is more rigid than the neo-American model with regard to social mobility. In the USA, social mobility is part of the founding myth, a dream fueled by the real possibility of getting rich quickly. On the other hand, the Rhenish states run the risk of reverting back to a corporate state because of their social immobility, which is also evident in their inability to integrate immigrants that are inevitable in view of demographic developments . Albert lets the two arguments stand against each other, asks the reader to decide where his preferences are.

In the diction of the neo-American model, fixed levies (taxes, fees, social contributions, etc.) are a “path into servitude”, suitable to hinder national competitiveness, “to punish companies, to take the momentum away from individual efforts” (p 162). With reference to the Laffer curve , all Rhenish states are on the way to lowering their taxes and, as a result, inevitably reducing social benefits. Criticisms of the excessively high taxes were also justified, but had already gone too far in implementation. In any case, there is no correlation between the tax burden and the performance of an economy, a simple comparison of GDP and tax burden of the most important industrialized countries shows that.

The reverse development of the Rhenish model

In view of the proven economic and social superiority of the Rhenish model, it is surprising that not only the countries developing capitalism, but the Rhenish countries themselves “succumb to American charm and fall victim to its illusions” (p. 165). In Japan, for example, in recent years some speculatively acquired wealth has arisen in a short period of time, which is also lived out through excessive consumption. In contrast to the slowly acquired wealth in the years of reconstruction, this blatant variant would destroy the previous social consensus and would also result in an excessive propensity to consume among the middle class and thus a departure from the previous culture of savings. In the other Rhenish countries, too, the primacy of the community would be called into question and the interests of the individual would be valued. "The decline in civic sentiments has the effect that the employees abuse the generosity of the social system more and more" (p. 169).

The advancement of individualism is also expressed in the demographic decline of the Rhenish countries. The consequences for the economy are fatal in every respect and destroy the basis of a solidarity social community. A vigorous child-friendly policy is needed. However, governments hesitated for fear of being misunderstood and the uncertain effectiveness of the measures in question. However, increased immigration from the east would provide relief.

Along with individualization, there was a loss of influence on the part of the trade unions and collective bargaining, if traditional (and advantageous) career plans in favor of clearly success-oriented advancement opportunities based on the American model were increasingly successfully demanded by young university graduates.

Furthermore, the rise in power of the financial markets can be noted. Previous barriers, which hitherto prevented or hindered speculative takeovers of companies in the Rhenish region, would be dismantled in every possible way. Although the disadvantages of the "casino economy" in the form of increasing misappropriation of assets and breaches of trust would already be visible everywhere, the globalization of the financial sector would have the character of a fundamental sea , which would inevitably lead to "innovation" and "liberalization".

The drivers for this are global trade imbalances, which expose foreign investments to incalculable risks in the long term. "This created enormous financial masses that revolve around the world on completely immaterial products and are supposed to cover risks that no one can see through, but which everyone has to endure" (p. 181). The development of information technology has reduced transaction costs in the financial markets by 98%. This is the first innovation. The second are the products of the financial industry itself. There are exotic names such as NIF , TRUF , MOFF , all Anglo-Saxon products, all suitable for escaping the strictly regulated world of banks and always on the move, around the world. They downgraded the individual stock exchanges to “little boats that are completely exposed to the injustice of capital fluctuation” (p. 183).

After England had lured capital to London through deregulation, America followed suit. In order to stay in the race, the other stock exchanges are forced to follow suit. The deregulated financial markets thus developed as the main and overpowering vehicle for the expansion of the ultra-liberal model. In addition to the marketing of the neo-American model in the media, this represents the Trojan horse in the middle of the Rhenish model.

Why does the less powerful win?

The ideal homo oeconomicus does not exist. Albert states: "... it is a fact that in the eyes of the world virtuous, equitable, cautious and discreet capitalism in the Rhineland has no attraction" (p. 186). In terms of media policy, it is a zero. American capitalism, on the other hand, is in the truest sense of the word like Hollywood with the language of adventure and cartoon films. Some honest managers feel the desire to draw a lot on the racetrack, see the model as a recipe against the boredom of a life without mysteries.

In spite of its weaknesses, American capitalism is a media star with an effect that economists cannot neglect and which now also forces honest European bankers to present themselves in the media.

It is now taken for granted that a capitalist's goal in life is to make a fortune. It would be forgotten that, in the recent past, industrialists in Europe were so busy building their companies that they forgot to do so. According to the motto “cheaper to buy than to build”, the casino industry is gaining more and more followers and in this a successful media presence is suitable for significantly increasing personal creditworthiness. Conversely, the system itself would come under the influence of the media. In doing so, however, it can be observed that the media are in turn more and more at the mercy of the rules of the game of this type of capitalism, the professional honor and independence of journalists are lost, indeed they are corrupted, as corruption is revealed as a general component of the neo-American model. The meaning of the whole is profit and to ask about the meaning of profit is heretical.

The peculiarities of the Rhenish model, on the other hand, do not correspond to the zeitgeist at all. He wasn't sexy. The decline of communism also discredited many good ideas of the Rhenish model. Many of his words were burned for a long time in the countries of the former Eastern Bloc. American capitalism meets cultural roots in Europe, which lack many of the countless brakes that the system is subject to in American culture and which therefore makes it even more dangerous here.

The large multinational corporations were a specialty. At first glance, America’s flagships are atypical for two main points: They emerged over a long period of time and had to develop an international, multicultural structure that also forced investments to be made in employees. In addition, they are only partially dependent on the whims of the financial market in view of the diversified shareholdings and enormous financial potential of their own. In doing so, they would offer a model for the symbiosis of the two capitalist systems.

The second lesson from Germany

The first is that - as characterized in Chapters 5 and 6 - performance and solidarity have entered into a successful characteristic alliance, which paradoxically is hardly understood and certainly not taught. On the contrary, in the epochs of Thatcher and Reagan, Germany was accused that its traditionalism was a punishment for its European partners. First, that in view of a stagnating population and solid reserves, it was satisfied with contemplative growth of 2% and one Hard currency operations. However, this accusation is already weakening as far as the other countries experience how monetary stability in the EMS itself is helping them. Secondly, that the limited financial market is holding industrial groups locked in immobility and that this anachronism is de-industrializing Germany.

Against the background of such views, all partners were completely surprised at how boldly Germany approached the reunification project. In view of the multitude of problems to be solved and the enormous costs as well as the enormous pressure to act, only a few countries would have had the courage to accept this challenge. All areas of Germany showed an admirable solidarity, cooperation and willingness to make sacrifices. What is striking is the extremely high priority to rapidly reduce the newly created inequalities.

At the CPEII , two scenarios have been worked out, in which one, the “fifth dragon”, envisages a wage adjustment in the new federal states to 75% by 1995 and nevertheless prevents depopulation of the countries through increased solidarity by the public authorities and another, a scenario the impatience, in which the solidarity performance would remain lower and the wages were already adjusted to 90% in 1995, called " Mezzogiorno " after a region in the south of Italy . The first scenario would have very favorable consequences for growth and inflation throughout the OECD after the bridging period, while the other would result in high unemployment and industrial devastation in the area of ​​the former GDR. Albert observes with concern that there are many indications as if one were slipping into the “Mezzogiorno” solution.

In addition, the example of the “monetary union” in Germany shows that such a union is also possible for Europe without prior convergence of politics and economy, and the existence of which leads to the lack of convergence. One can also learn from this how quickly and how sustainably an increase in the relevant European funds can build up the new free countries of Europe and candidate countries. It is not necessary to practice Germany's solidarity with its East right away; the dimensions of a Marshall Plan , from which the USA itself would have benefited greatly, would already be sufficient.

Closing word

Capitalism has its undeniable successes, but is currently subject to the risk of drifting into a non-transitory form, which is the aim of the book to be shown. So far, three phases of capitalism can be distinguished:

  1. 1791: capitalism against the state, which pushes the state back on a task of the law enforcement officer against the "dangerous classes" ( night watchman state ) and brings about the hardships of the industrial revolution;
  2. 1891: capitalism flanked by the state, which corrects its excesses. A time that was marked by a steady rise in power of the state, which even the USA joined after the great crisis of 1930 ;
  3. 1991: The state has expanded too much, is experienced as a parasite and gives rise to a new ideology of "the market is good, the state is bad". An idea that America and the whole of the former Eastern Bloc believe in and according to which the common market of the EC will be organized, according to which the young executives are trained at the universities and which enrich the rich in an international tax cut competition so that even with simultaneous tax cuts Tax increases for the less mobile poor will impoverish the state overall and thus limit its options for action. The paradox is that one can have the impression that everyone agrees to these social setbacks.

It is this paradox that specifically annoys Albert, and to illustrate the consequences, he designs a scenario in which France decides to organize itself on the American model. Four major changes can be identified as early as 1990:

  1. Liberation of money from (Catholic) guilt,
  2. Triumph of individualism,
  3. social hardening and
  4. Leveling the behavior between Paris and the province.

If one thinks this through to the end for the economy as well, one would reduce the tax burden in France from 44.6% (1990) to the American one from a little under 30%. For the average French household, this means an increase of around DM 20,000 per year, a sum higher than the minimum wage, which the latter would certainly welcome at first. However, social benefits would then probably also fall to the American level. Health insurance, supplementary pensions, school, training and much more, he could pay for all of this 20,000 DM himself. Subsidized housing and urban transport, well-maintained public facilities are a thing of the past. Reintegration assistance for the unemployed is no longer available, new poverty is spreading, petty crime, drugs, poorly paid jobs as security guards and private police are on the rise. Further examples are hardly necessary to show that neo-American capitalism voluntarily sacrifices the future to the present. Rhenish capitalism is the real productive detour, the first source of wealth, perhaps even the new way of wisdom.

Either Europe now dare to take the step to the United States of Europe or the single market will soon begin to crumble again and in the not too distant future we could welcome a new Third World in migrant settlements on our outskirts, as is already the case in the USA (1990) is the case.

"For each of us today tomorrow is decided" (p. 235).

reception

The collapse of most communist systems as well as globalization led to a strong interest in comparing the efficiency of the capitalist systems of the various countries, which were in greater competition with one another after 1990. Numerous subsequent scientific studies on economic efficiency, environmental efficiency, social issues and ethical issues in comparison of the variants of capitalist systems have roots in this book and the comparable basic books on the subject mentioned below. Many specialist articles and books from the field of comparative political economy that were published later refer to the book Capitalism contra Capitalism .

In the political debate in the Federal Republic of Germany in connection with reforms of the social system and the economic order, arguments from the book Capitalism contra Capitalism are often quoted.

In university education, the book is used in various areas, for example in political economy.

A selection of reviews:

“Albert's book reads like the script of a fairly understandable university lecture, from which many a German professor could take an example. [...] Europe in particular is about to succumb to the temptations: If the community does not create political union soon , it will inevitably slip into the neo-American model, with all its catastrophic social consequences. If one can still agree to the statement, Albert's explanation for the phenomenon falls short: capitalism with a human face is simply not sexy enough to assert itself against the spectacular and speculative casino capitalism. While the neo-American model with its charms is more reminiscent of Venus, the Rhenish model is more associated with the usual virtue of Juno. Who knows Juno? '"

- Ludwig Siegele : in time.

“The most important representatives of the geoeconomics thesis include Jeffrey E. Garten, Lester Thurow , Edward Luttwak and, in Europe, Michel Albert. In their publications they superficially describe the competition between different economic cultures, such as B. Anglo-American vs. communitarian capitalism with Thurow or neo-American vs. Rhenish capitalism with Albert. The authors are not concerned with unchangeable cultural differences, but rather with the choice between different economics. They criticize the laissez-faire capitalism, which they ascribe to the Anglo-American region - especially in the form of Reaganomics - and stress the need for state economic policy. They demand that economic globalization should not be passively accepted, but that it should be actively shaped politically. "

- Hartwig Hummel : The New West

“And almost at the same time the permanent attack on the European social and economic constitution begins. It is different from the Anglo-Saxon one - I always like to refer to the book by Michel Albert, which is, I think, still the best: 'Capitalism versus capitalism', an excellent, very knowledgeable account of this contrast. They are different cultures, Europe-USA. Hence this attack is understandable. It was European or Rhenish, as Albert says, capitalism that most seriously questioned Anglo-Saxon capitalism in terms of the real economy. "

- Edelbert Richter : From unemployment to suicide. About the end of social democracy. (Speech for the Willy-Brandt-Kreis )

Comparable works

  • Peter A. Hall, David Soskice: Varieties of capitalism: the institutional foundations of comparative advantage . University Press, Oxford 2001, ISBN 978-0-19-924775-2 .
  • , Gøsta Esping-Andersen: The Three Worlds of Welfare Capitalism . Princeton Univ. Press, Princeton NJ 1990, ISBN 0-691-09457-8 .

literature

  • Michel Albert: Capitalism versus Capitalism . Campus, Frankfurt am Main 1992, ISBN 3-593-34703-2 (published in French, English and German).
  • Michel Albert, Rauf Gonenc: The Future of Rhenish Capitalism . In: Political Quarterly , 67 (1996) 3, pp. 184-193.

Individual evidence

  1. ^ Ludwig Siegele: France à la Federal Republic. In: Die Zeit , No. 49/1991.
  2. ↑ Claudia Bogedan : The dead live longer: On the relationship between social democracy and the welfare state. ( Memento from January 31, 2012 in the Internet Archive ) (PDF) Friedrich-Ebert-Stiftung ; Retrieved March 6, 2009.
  3. ^ Manfred G. Schmidt: The political system of Germany: institutions, decision-making and policy fields . CH Beck, 2011, ISBN 978-3-406-62243-4 , p. 373
  4. ↑ References and quotations are from the German edition: Campus, Frankfurt am Main 1992.
  5. ^ Allusion to Taylorism .
  6. ↑ Quotes in this sentence are attributed to Irving Fischer.
  7. ↑ Marked as a quote from Friedrich Hayek .
  8. ↑ Albert proves in a small study of his own that at least small shareholders indulge in the illusion that they can earn money from such mergers. Your investment results would have been better on the Rhenish stock exchanges in recent years than on American ones.
  9. ↑ See for example Political Economy, TU Braunschweig
  10. ↑ Ludwig Siegele: Worse, but sexy. In: Die Zeit , No. 36/1992.
  11. ↑ Hartwig Hummel: The new west: The trade conflict between the USA and Japan and the integration of the western community . Agenda-Verlag, Münster 2000, ISBN 3-89688-078-0 , p. 111 (Agenda Politik; 22 Zugl .: Braunschweig, Techn. Univ., Habil-Schr., 1999).
  12. ↑ Edelbert Richter: From unemployment to suicide: About the end of social democracy. , Willy-Brandt-Kreis e. V .; Retrieved March 6, 2009.