Friday, July 1, 2011

So why are they so angry again?

The article linked to a few days ago arguing that Germans were very angry is worth thinking about, but ultimately has to be clarified a bit. Here’s the basic thesis:
Germany's western flank has become the greatest exporter in the Western world, second only to China and far ahead of the United States. The container ports along the Rhine are working day and night to deliver record orders of German products to southern and western Europe, the U.S. and especially to China. Shops are busy. Home sales are rocking. Unemployment hasn't been so low since the eighties. In terms of growth, profits and productivity, the current German economic boom has surpassed even the “wonder years” of the 1950s. These are, by several measures, the most successful people in the world.

Yet it is very hard to find anyone here who is happy about this state of affairs. Unlike the great Rhineland industrial booms of the 1950s and 1970s, this one is provoking Germans to turn against their government, against Europe, against technology and growth, against outsiders. It is an inward-looking, self-questioning moment in a country that the rest of Europe very badly needs to be involved in affairs outside its borders.

OK, so there are a few ways to resolve this paradox: either Germans aren’t as successful as they really are, or they are ungrateful twits. Not knowing enough Germans, I decline to speculate on the latter (though all the Germans I’ve met have been fun, worthwhile people, so….). I think it’s the former.

Let’s take the opportunity to demarcate two distinct entities: Germany is doing great; the Germans may not be. While recent times have seen a great boom in the official, top-line statistics, it’s generally ignored—in the telling of the German story—that German wages have actually declined over the previous decade, by 4% in real terms. This may seem strange, as German unemployment is quite low and its productivity fairly high. These are conditions that should, in isolation, demand wage hikes rather than stagnancy in nominal terms. If your wages had declined over the previous decade, despite making more and better stuff than ever before, while everyone told you how super awesome you were…you might get angry! So ze Germans are angry.

Now, as most countries do when they get collectively angry, they are getting angry at the wrong people—typically it’s the immigrants and other minority groups that receive the venting—but when the facts justify anger, it shouldn’t be particularly surprising when people decide to get angry.

For those who aren’t inclined to get angry because of other people’s misfortune, it nevertheless raises some uncomfortable questions: that is, the Germans are a productive people who are employed, and yet they cannot get wage raises. What more could you really ask from them? It implies disturbing things about the economy that this is true, though I’m unsure what the exact implications are besides something’s gone wrong.

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