# Is the German model a better form of capitalsim? **URL:** \ **Category:** Great Debates\ **Created:** [March 20, 2010, 12:46pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126 "2010-03-20T12:46:58Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Superfluous\_Parentheses](https://avatars.discourse-cdn.com/v4/letter/s/8edcca/32.png) [@Superfluous\_Parentheses](https://boards.straightdope.com/u/Superfluous_Parentheses)\ **Post date:** [March 21, 2010, 11:25pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/21 "2010-03-21T23:25:14Z")
> [@bump](#): > > In my experience at least, the folks who would make up the “Works Council” at places I’ve worked were real dipshits- generally speaking, they were bread & circuses types who ignorantly wouldn’t have hesitated to screw “the company” for their own short-term benefit. They were the same types who stole anything dinky that wasn’t nailed down on the logic that “a few pencils won’t make any difference to a big company like ours, but I don’t have the cash to buy pencils for my kids’ school supplies” Well, in Germany it’s not unheard of to get fired on the spot for that kind of thing. ---
**Author:** ![Brandus](https://avatars.discourse-cdn.com/v4/letter/b/898d66/32.png) [@Brandus](https://boards.straightdope.com/u/Brandus)\ **Post date:** [March 22, 2010, 1:44pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/22 "2010-03-22T13:44:03Z")
The article is correct that Germany’s model of capitalism certainly serves Germany much better than an American model would. They get better wages, better benefits, longer vacations, yet are still very competitive. Germany appears to be one of the few countries not exposed as weak by the financial crisis. Nevertheless, I agree with other posters that we simply can’t graft ideas like a works-council directly onto American companies. I would rather we take inspiration from the German model that values quality of life and long-term sustainability. ---
**Author:** ![Sateryn76](https://avatars.discourse-cdn.com/v4/letter/s/a88e4f/32.png) [@Sateryn76](https://boards.straightdope.com/u/Sateryn76)\ **Post date:** [March 22, 2010, 3:11pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/23 "2010-03-22T15:11:09Z")
[QUOTE=Article Say you work at the Barnes and Noble at [such and such location] … you could be elected to a works council at the store. That means you help manage the place. You help decide when to open and close the store. You help decide who gets what shift. On layoffs and other issues, the employer must reach an agreement with the works council. The result is that there are thousands of clerks and engineers in Germany who now are (or a few years ago were) elected officials, with real power over other people. They are responsible for running the firm. They make up a powerful leadership class- low-income, **low-education** - who don’t have much of a voice in the affairs of other industrialized countries.] [/QUOTE] Bolding mine… Do we really want low-education people making these kinds of decisions? Serious question… ---
**Author:** ![tagos](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@tagos](https://boards.straightdope.com/u/tagos)\ **Post date:** [March 22, 2010, 4:04pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/24 "2010-03-22T16:04:31Z")
> [@Sateryn76](#): > > Bolding mine… > > Do we really want low-education people making these kinds of decisions? > > Serious question… Given the world-wide financial and economic catastrophe caused by US free market capitalism’s best and brightest I’m going to say ‘yes.’ ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [March 22, 2010, 4:12pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/25 "2010-03-22T16:12:31Z")
The GDP per capita in the US is around $46,000 and in Germany around $34,500. Over the past 20 years German unemployment has hovered around 8.0%. The German economy has not dipped as much during the latest recession as the US economy, but one year of good results does not mean they have suddenly figured everything out. A trade deficit or surplus means almost nothing to the health of an economy. It could mean that a country is a bad place for foreign investment or that it has high tarrifs. The purpose of an economy is consumption not production. ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [March 22, 2010, 4:45pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/26 "2010-03-22T16:45:23Z")
> [@DanBlather](#): > > What worries me is that we have already lost some of the industries that you think would be difficult for other countries to pursue; e.g., paying the freight for shipping us steel and cars. Next we exported knowledge-based jobs like reading CAT scans and MRIs which can be done more cheaply in India. Boy are those Wall Street guys going to be in for a surprise when they find out that you can move money around anywhere. There are millions of bright college grads in India and China that would be happy to do that for a fraction of what Wall Street pays. Securities research and analyst work has been being sourced to India for years. If they’re not aware of it yet they’re not paying attention. ---
**Author:** ![Sateryn76](https://avatars.discourse-cdn.com/v4/letter/s/a88e4f/32.png) [@Sateryn76](https://boards.straightdope.com/u/Sateryn76)\ **Post date:** [March 22, 2010, 4:55pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/27 "2010-03-22T16:55:53Z")
> [@tagos](#): > > Given the world-wide financial and economic catastrophe caused by US free market capitalism’s best and brightest I’m going to say ‘yes.’ No, seriously - is it a good idea to turn decision making over to people who may never have gotten Econ in school? ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [March 22, 2010, 4:59pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/28 "2010-03-22T16:59:21Z")
> [@Try2B\_Comprehensive](#): > > [Quote=Thomas Geoghehan] > because German workers are at the table when the big decisions are made, and elect people who still watch and sometimes check the businessmen, they have been able to hang on to their manufacturing sector. **They have kept a tool-making, engineering culture, which our own entrepreneurs, dreamily buried in their Ayn Rand novels, have gutted.** And now, thanks in large part to these smart structural decisions, Germany is not only competitive, it’s rich. [/QUOTE] It’s always interesting to me, as a small business owner and dare I say entrepreneur to read these articles that clearly have bigger companies in mind. We have highly paid design and support engineers, marketing people, sales people. We also have not so highly paid customer support people and administrative staff. One thing we really don’t want to do is manufacture, because it’s not our business and it’s so capital intensive. So in our case, it’s always a choice between some other companies making our stuff, never our own employees who arguably do or don’t deserve a say in the process. It would cost 10 times as much to have our tooling done domestically rather than in Asia. Individual pieces are closer in cost but still vastly cheaper in Asia. So I can’t see us paying 10 times as much to some outside company just because it’s domestic, and I don’t see why a larger company that has that has manufacturing as a core function should behave differently. ---
**Author:** ![Dumbguy](https://avatars.discourse-cdn.com/v4/letter/d/2bfe46/32.png) [@Dumbguy](https://boards.straightdope.com/u/Dumbguy)\ **Post date:** [March 22, 2010, 5:47pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/29 "2010-03-22T17:47:36Z")
As an American living in Germany for the last few years, I’d say their form of capitalism is better, although I think the reasons are a lot more complicated than that article indicates. The downside is that to enjoy these economic benefits, you have to live in Germany. Even if things keep trending the way they are, I expect I’ll still end up choosing to spend my old age living on cat food in the crater of the once great American economy, so that I can at least enjoy a good laugh every now and again. ---
**Author:** ![Kobal2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kobal2/32/20_2.png) [@Kobal2](https://boards.straightdope.com/u/Kobal2)\ **Post date:** [March 22, 2010, 5:56pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/30 "2010-03-22T17:56:29Z")
> [@DanBlather](#): > > I think Germany has seen the results of blindly following right wing ideology. In the US we are just starting to see it. Maybe after the next two or three times the economy tanks under the conservatives we’ll start to see a pattern. Hopefully before we invade Poland. Planned slogan for the invasion : “Thought we’d forgotten about you ?” > [@Sateryn76](#): > > No, seriously - is it a good idea to turn decision making over to people who may never have gotten Econ in school? Considering that 70% of mutual fund managers perform [worse than indexes](http://www.marketwatch.com/story/indexes-beat-most-actively-managed) (which is to say, the market’s average), and that portfolio-makers \*barely \*outperform [Wall Street Journal staffers throwing darts at a stock chart](http://www.automaticfinances.com/monkey-stock-picking/), I’d say there’s really not much risk in leaving economic decisions in the hands of the utterly untrained. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [March 23, 2010, 5:35am UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/31 "2010-03-23T05:35:20Z")
> [@Sateryn76](#): > > Bolding mine… > > Do we really want low-education people making these kinds of decisions? > > Serious question… Sure. Regular guy in regular job. Only… it’s a foreign country! Organized with his co-workers he can exert some influence on the way the business is run! The most basic observations of ordinary uneducated workers get noted and implemented, and the geniuses take the credit for the increased profits! Beats the heck out of a stupid management relentlessly implementing stupid decisions. From the workers’ point of view, mind. ---
**Author:** ![Icarus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/icarus/32/72_2.png) [@Icarus](https://boards.straightdope.com/u/Icarus)\ **Post date:** [March 23, 2010, 12:46pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/32 "2010-03-23T12:46:09Z")
> [@Sateryn76](#): > > Bolding mine… > > Do we really want low-education people making these kinds of decisions? > > Serious question… Sateryn76 - serious questions, not intended to be snarky: Do you think you should be able to make decisions that affect your livelyhood? I suspect the answer is an unequivocal yes. Do you think other people should be able to make decisions that affect their livelyhood? ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [March 23, 2010, 1:58pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/33 "2010-03-23T13:58:50Z")
> [@tagos](#): > > Given the world-wide financial and economic catastrophe caused by US free market capitalism’s best and brightest I’m going to say ‘yes.’ I would say the problem isn’t so much the level of intelligence and education, but the level relative to the influence their decisions have on the economy. I trust a bunch of high school dropouts to work out a shift schedule at Barnes & Noble. I’m not sure if I trust any single person enough to run a 4 trillion dollar economy, regardless of how smart and educated they are. ---
**Author:** ![tagos](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@tagos](https://boards.straightdope.com/u/tagos)\ **Post date:** [March 23, 2010, 2:22pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/34 "2010-03-23T14:22:24Z")
> [@Sateryn76](#): > > No, seriously - is it a good idea to turn decision making over to people who may never have gotten Econ in school? Yes. Besides - it is giving workers a say, not handing over all decisions to them. I’d rather trust decisions made by those with a long term stake in a business than a tiny handful whose interests are short term profits/stock price rises for themselves. We’ve seen the American model and it ended in the collapse, fraud and catastrophe of private gain and public risk. GDP per capita is irrelevant. Less income inequality, more public goods and services and good infrastructure tops a few earning a lot and the rest struggling. I often think the American middle/working classes have no idea how much of a screwing they are taking. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [March 23, 2010, 3:01pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/35 "2010-03-23T15:01:22Z")
Pretty much what Blake said. Just to add some food for thought though, let’s suppose that the US DOES manage to fundamentally change itself and conform to the German model. That we keep manufacturing here in the US and keep wages high based on the perceived quality of our new manufactured goods as opposed to quantity. IOW, we manufacture mainly high end goods for a vertical premium market. Ok…who do we sell them too? We would need a huge market to sell too in order to keep wages high if we go the German route. And what do you suppose the effect would be if the US DID go this route for German manufacturing? Assuming we could compete with them in their specialty, what would happen to their exports? The vertical market of the high end is limited, after all…there are only so many people or companies who are going to buy top of the line equipment, or top of the line cars or other premium manufactured goods. Remember…only 80 million people live in Germany. We have over 300 million. And remember…WE are Germany’s main market for all those nice exports. To a certain extent, WE are the cause of Germany’s current prosperity…as WE were the cause of the prosperity of the Asian Tigers and of China today. Also, we were the cause of the prosperity of Japan. There seems to be a common element here… -XT ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [March 23, 2010, 3:38pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/36 "2010-03-23T15:38:56Z")
> [@xtisme](#): > > Pretty much what Blake said. Just to add some food for thought though, let’s suppose that the US DOES manage to fundamentally change itself and conform to the German model. That we keep manufacturing here in the US and keep wages high based on the perceived quality of our new manufactured goods as opposed to quantity. IOW, we manufacture mainly high end goods for a vertical premium market. > > Ok…who do we sell them too? We would need a huge market to sell too in order to keep wages high if we go the German route. And what do you suppose the effect would be if the US DID go this route for German manufacturing? Assuming we could compete with them in their specialty, what would happen to their exports? The vertical market of the high end is limited, after all…there are only so many people or companies who are going to buy top of the line equipment, or top of the line cars or other premium manufactured goods. > > Remember…only 80 million people live in Germany. We have over 300 million. And remember…WE are Germany’s main market for all those nice exports. To a certain extent, WE are the cause of Germany’s current prosperity…as WE were the cause of the prosperity of the Asian Tigers and of China today. Also, we were the cause of the prosperity of Japan. There seems to be a common element here… > > -XT How about…to ourselves! The U.S. supplies itself with quite a bit of goods and services, and could stand to supply more. The only reason we don’t is because of the various trade and economic issues we’ve all been complaining about here, the main consequence of which is an incentive to outsource to areas of lower labor cost. I think we could stand to be more competitive with Germany in engineering and heavy industry; nobody is saying we HAVE to compete in the production of truly cheap goods that Asia has a real advantage in producing. What I can’t tolerate is throwing up our hands and pretending the current paradigm is working great for America, because it isn’t. Also, I believe France is Germany’s largest trading partner. ---
**Author:** ![Fuji](https://avatars.discourse-cdn.com/v4/letter/f/a9a28c/32.png) [@Fuji](https://boards.straightdope.com/u/Fuji)\ **Post date:** [March 23, 2010, 4:36pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/37 "2010-03-23T16:36:26Z")
> [@puddleglum](#): > > The GDP per capita in the US is around $46,000 and in Germany around $34,500. Over the past 20 years German unemployment has hovered around 8.0%. The German economy has not dipped as much during the latest recession as the US economy, but one year of good results does not mean they have suddenly figured everything out. What about if the comparison was between total average compensation? For example, Germany has UHC and free higher education - both healthcare and education are major expenses that Americans have to bear themselves, for the most part. I am thinking that in terms of total compensation the disparity is much less (though I have no figures on hand at the moment). Furthermore, Americans on average work _much_ longer hours than their German counterparts. As noted in the article, German employees are entitled to _six weeks_ of paid vacation every year. It should also be noted that during those same 20 years, Germany has had to bear the massive social costs of absorbing the obligations to its relatively indigent 16 million former residents of the DDR. That makes its performance all the more impressive over that timespan. > [@](#): > > A trade deficit or surplus means almost nothing to the health of an economy. It could mean that a country is a bad place for foreign investment or that it has high tarrifs. The purpose of an economy is consumption not production. Perhaps for a few years here and there a trade deficit is not a bad thing, but I’m having a hard time believing that the long-term trade deficits the USA has been running (and the overall [trend](http://recession.org/library/graphs/us-trade-deficit-history) for the past 20 years has been worsening) are in fact good for the USA economy as a whole. > [@xtisme](#): > > Remember…only 80 million people live in Germany. We have over 300 million. And remember… **WE are Germany’s main market for all those nice exports.** To a certain extent, WE are the cause of Germany’s current prosperity…as WE were the cause of the prosperity of the Asian Tigers and of China today. Also, we were the cause of the prosperity of Japan. There seems to be a common element here… > -XT I wouldn’t be so sure about that. [These figures](http://internationaltrade.suite101.com/article.cfm/germany_s_trade_buddies) are from 2005, but they indicate that Germany’s largest export partner (by a considerable margin) was actually France, with the USA at #2. Of course, Germany’s exports to the EU as whole dwarf its exports to the USA, so at least in Germany’s case, I think there’s one “common element” we can rule out. 😉 ETA: **MOIDALIZE** beat me with the France reference. ---
**Author:** ![Doughbag](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Doughbag](https://boards.straightdope.com/u/Doughbag)\ **Post date:** [March 23, 2010, 5:27pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/38 "2010-03-23T17:27:33Z")
> [@Fuji](#): > > It should also be noted that during those same 20 years, Germany has had to bear the massive social costs of absorbing the obligations to its relatively indigent 16 million former residents of the DDR. That makes its performance all the more impressive over that timespan. You are also forgetting, that Germany is one of the biggest money source for the development of the EU as such. Germany has been a world player for a very long time, not just the past 3 months. They achieved lots for such a small country. The system in place in Germany is much more stable, then the system used in the US, but it is far from perfect. During the current recession, Germany was and still is holding up pretty well, the cracks are showing, but still holding. Making it a role-model for the US might be a good idea, if you would be able to change the US as a whole, but most people in the US are even afraid of UHC and prefer the corporate money machine. As a whole copying the German system into the US right now, would not be possible. However, what is working for Germany, most likely won’t work for another country for various reasons like history, culture, resources, logistics and even ridicules things like the weather play a role. Some people in Germany might also argue, to copy some of the US stuff over to Germany… go figure ---
**Author:** ![PSXer](https://avatars.discourse-cdn.com/v4/letter/p/48db29/32.png) [@PSXer](https://boards.straightdope.com/u/PSXer)\ **Post date:** [March 23, 2010, 7:17pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/39 "2010-03-23T19:17:32Z")
I am confused because I thought this topic was gonna be about how all the nouns in German are capitalized. I think it is useful, because it is easy to tell what words are nouns. ---
**Author:** ![Revtim](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/revtim/32/1042_2.png) [@Revtim](https://boards.straightdope.com/u/Revtim)\ **Post date:** [March 23, 2010, 7:57pm UTC](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126/40 "2010-03-23T19:57:38Z")
I’m less inclined to believe that the Germans’ success is a result of their model of capitalism, and more so inlined to ponder that it’s the result of their deep cultural love of David Hasselhoff. [Previous page](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126.md?page=1) [Next page](https://boards.straightdope.com/t/is-the-german-model-a-better-form-of-capitalsim/533126.md?page=3)