Germany Is the silicon valley of political innovation

Interesting piece by Prof Tyler Cowen. Never thought Germany as an engine of political innovation:

One of the more significant quotations of last week came from President Donald Trump, when he reportedly described the Germans as “bad, very bad,” referring to their automobile exports. ….

Another take on Germany, articulated by many economists and technology observers, is that the country has quality manufacturing but hasn’t been very innovative in other sectors, and is thus a disappointment.

I’d like to suggest a third view: When it comes to politics and political institutions, Germany’s record since the end of World War II as an innovator is virtually without parallel, akin to the role of Silicon Valley in tech.

After the war, Germany undertook an extensive and largely successful campaign of denazification. Other defeated nations, such as Austria or Japan, didn’t attempt anything comparable, much less succeed. In a relatively short period of time, Germany really did turn into a largely tolerant, peace-loving nation, acutely aware of the extreme nature of its previous wrongdoing. For all the imperfections in this process along the way, it is difficult in world history to find a comparable switch in attitudes.

Or take German unification. It was hardly obvious this project to bring together East Germany and West after the fall of communism would succeed or even come to fruition, as there was plenty of talk at the time of a binational federation or perhaps a slowly phased evolution toward unity. Yet Chancellor Helmut Kohl and other German leaders, supposedly staid figures, had the vision to see unification could be achieved rapidly and relatively smoothly. They just went ahead and did it, even though many of the world’s leaders, such as U.K. Prime Minister Margaret Thatcher, were squeamish about the idea.


….Increasingly, the handling of the euro crisis of 2008-2012 appears to be another example of German political wisdom. Merkel’s decisions to limit bailouts, push for relatively tight monetary policy and eschew a banking union have been pilloried by many of my fellow economists. Yet in this age of post-Brexit, post-Trump backlash voting, her decisions look pretty savvy, even though they were far from economically ideal.

Something worth debating. Not sure about other political innovations, but the euro crisis handling is seen as a political disaster by many.

In economics, we are often told ultimately it is politics that matters. May be the way Germany has handled its political relations, it is the main reason behind its other successes as well..

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