The far-right AfD (Alternativ für Deutschland) won a sweeping election victory in the German state of Saxony-Anhalt last Sunday. I addressed the implications and motivations for the far-right AfD’s economic program.
In the interview, we spoke mostly about macroeconomic policy issues of the AfD, and its anti-immigrant social policies. However, the AfD seems to not have a fundamentally different economic orientation than other German parties of the past one or two decades. It too is backward looking, full of nostalgia for “what worked” previously in the post-War German economic model. But, unlike other parties, it adds the desire to go back to a time before there were fewer foreign immigrants in Germany.
However, my work on the German economic model, especially my teaching and talks, has focused on the failure of the country to embrace especially the tech, social-cultural, and research imperatives of the Third Industrial Revolution – that is, the Information Age.
Germany, and the EU as well, have long failed to catch up with the USA, or for that matter Asian allies Japan and South Korea in modern information technologies and work organization/culture within production, communication, commerce, research, education and business. This would have required reforms fostering a risk-tolerant culture of innovation, personal initiative, flexibility and entrepreneurialism. Especially in Germany, this would have required far more sweeping transformations away from the old, mid-20th-Century Fordist model “with German characteristics,” so to speak.
Instead, as an alternative to these and other aspects of the Information Revolution, one side of Germany’s strategy has been to bank on development of “green” or, more recently, “clean” technologies. It was widely claimed, for about 20 years, that Europe could “spark a Fourth Industrial Revolution” by carrying out a “green energy transition” based on developing and deploying a totally new energy system based on using only renewable sources such as windmills and solar panels and all their required grid and energy storage technologies.
This strategy was both a theoretical and practical mistake – not because it addressed global warming, which indeed is a significant problem though, in my view, not the predominant global problem it is made to be in the last 15 years of German policy – but because it was offered as an alternative model of economic development to Europe embracing mastering the “American” Information Revolution. In reality, Europe had no option but to wholly embrace what it terms “digital technologies” and catch up. In addition to embracing its “green”, “clean” energy path to reindustrialization, the other German strategy, in parallel, was to double down on improving its renowned 1960-1980’s electro-mechanical technologies typical of the previous Second Industrial Revolution, and massively exporting these into the Chinese market.
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