Thanks for the information, fellas. Very informative. Here's the obvious question...
Why on earth are we not modeling our economies after the Germans' system?!!
Take the best of opposite arguments to form a pragmatic system that benefits the majority the most, rather than socio-economic systems that favour a minority at the expense of the many and not maximising the total potential?... Seems kinda obvious to me....:-k
Too late to do so, for a majority of countries. Take us, for example. To implement the German system, we'll firstly need to strengthen our labor unions again. Can you imagine companies agreeing to give up some of their excessive labor powers (zero hours contracts et al) without threatening to move abroad? Equally, can you imagine the unions agreeing to meet companies half-way (i.e, the German way) after experiencing the trauma Thatcher inflicted on them? They'd probably be even more determined to seize political power to prevent anything of the kind occurring ever again, which means more Scargills.
Secondly, Germany has an abundance of heavy industries that still make up something like 27-30 percent of its economy. Ours make up around 20 percent, and that percentage has been falling for a fair few years now as we become ever more service-oriented. A lot of our unemployment issues stem from the fact that an economy predominantly based around one sector cannot employ as many people as a diversified economy, due to simple education and specialization issues. Our dependence on the services sector precludes a Germany-style attempt to ensure maximum employment and subsequently business-labor equality.
Thirdly, Germany's regulatory system is robust mainly due to the accountability between government and the public. West Germany, and then united Germany, has had it ingrained into them that the social market economy is the best system for the nation. When combined with Germany's historically stable economy, this means the public don't want to listen to alternatives (i.e unshackling of companies, reduction of social spending, etcetera) because they have no need for them at present. In the UK, our economy has undergone a seismic shift from Thatcher onwards, and a generation of people made rich through Thatcher's deregulation and privatization programs now support further deregulation, whereas the people whose lives were destroyed by deregulation support stricter regulations. There's a divide that isn't universally present in Germany, which precludes regulation efforts because the richer people support deregulation, thus giving them greater clout with the politicians and leading to this feeling that politicians don't represent the majority of the UK's society. That accountability is gone.
It's easy to implement Germany's economic framework when the nation is united, and when it is just starting out on its economic road (i.e Germany post WWII). It is infinitely harder to do so once divides have set into society, and no one (companies, unions, the government, the people, etcetera) trusts each other any more. Because there is no trust, there is no willingness to compromise, which is vital when you want to create the sort of system Germany has. How do you regain that trust? Well, not holding public tossfests for one of the most divisive politicians in British history would be a start. Corporations and rich folks paying taxes would be another. Companies and unions sitting down and negotiating an end to labor exploitation (and, equally, union political ambitions) would be another.
But to do this, we need a united society, which is not the case. Is it too late to unify it? That's the question. It's one of the reasons I deeply dislike Thatcher: she helped create a divided society where today nothing is being achieved but the concentration of wealth in the hands of an ever decreasing minority.
