Today is Germany Unity Day, a public holiday. An occasion to ponder political developments in the country.
German Christian Democrats, the CDU, and their sister party in Bavaria, CSU, have followed a policy since the 1960s which left no room for a sizeable political movement to their right. This worked well with only negligible groups of no consequence emerging. But German Chancellor Angela Merkel seems to have changed this strategy, writes Prince Michael of Liechtenstein.
A new party, the AfD (Alternative for Germany), emerged in 2013, first with just an economic programme, promoted in principle by some well-recognised economists. The party’s main issue was criticism of the euro. Although it was not a populist or extreme party, the political establishment, including Chancellor Merkel, labelled it right wing and towards the extremist corner.
Propaganda against the AfD by government, the established parties and large parts of the media, was enormous. However their programme was defendable and certainly not radical. Realising the deficiencies of the euro and questioning transfer payments is part of normal political debate.
The new party took almost five per cent of the vote in Germany’s last national elections, despite the hostile propaganda. This was a real success, but just missed the five per cent threshold for a seat in the German Federal Parliament.
The party reached some seven per cent in the European Elections in May 2014 and is now represented in the European Parliament in Strasbourg.
The big leap came when the party topped some 10 per cent in elections for three German lander or states. AfD is a political factor now. Its members are fierce free market supporters who promote entrepreneurship. But analysis shows gains from the centre – their base – and from the left.
Now the CDU has a real competitor in the centre right. Chancellor Merkel’s election tactics have been to destroy opposition campaigns by taking over their issues. Her decision to phase out nuclear energy left the Green Party without a popular cause. The introduction of minimum wages damaged the Social Democrats.
This short-term tactic was successful for Mrs Merkel’s CDU, but may have alienated supporters on the centre right. The classic economic party, the liberal FDP, was Mrs Merkel’s coalition partner until the last elections and was almost annihilated by following her policies.
So will Mrs Merkel continue to pursue her old tactics and adopt the AfD’s cause? Will she become less supportive of the euro and reduce or stop transfer payments to fiscally shaky eurozone countries?
The AfD’s success in local elections could have European implications.
My point here does not concern the rate of actual abuse - though I tend to believe that by and large there is a reasonable correlation between top management pay and performance -, it concerns the question of who should be in charge of payment decisions.
It really shouldn’t surprise that an awful lot of people are remarkably ignorant about the world that they inhabit ...
... erroneously thinking they are competent and entitled to call the tune on executive pay.
The error though is in what is then assumed should be done about it. For of course you can already hear the screams (from people like the High Pay Commission) insisting that as the average voter doesn’t want there to be this income disparity therefore there should not be this income disparity. The error being that what the CEO of a large company gets paid is none of the damn business of the average voter.
It’s the business of those doing the paying: and if the shareholders in a company wish to pay the person managing their business handsomely then that’s entirely up to them. Nothing to do with the jealousy of the mob at all.
There is a small coda: some argue that it’s the same old interlocking boards that keep raising the CEO’s pay, knowing that their own will get raised in turn. The theory that the managerial class is ripping off the owners, the shareholders. It’s true that this could happen, principal/agent theory is true. However, if this were true then private equity would be paying their managers considerably less than public companies do as they would not be subject to this rip off. Given that in reality, out here in the world, private equity pays very much better than public companies do then this isn’t true either.
The intellectual standards of academics nowadays! Fred Block refers to capitalistic freedom as the "the Robinson Caruso [!!!] freedom", at time mark 09:43, if you care to watch this not-a-must-see-interview, and immediately goes on to explicate:
The freedom of some people to make a lot of money has a lot of consequences for the lack of freedom for other people who then have to work in Wal-Mart at low wages or whatever ...
I quote this excerpt not because I am particularly eager to point you to the interview. For the purpose of this post, I am solely concerned with a widely held attitude resonating in Block's pronouncement, which is congeneric with a rather popular argument that never fails to annoy me for being immensely absurd and hypocritical.
What I have in mind is the subliminal idea that there is a special class of people with a duty, call it the E-duty, as basic as the most elemental personal rights, to create opportunities for safe, durable and satisfying employment for another class consisting of people that are either not willing to or not capable of providing employment to anyone, while at the same time being fully exempt from the E-duty.
When people attack, say, "capitalist swine X" for laying off employees or not paying wages deemed sufficient by their recipients, I ask the accusers why it is that they do not provide these workers with employment at agreeable wages? In not even trying to provide jobs, are the accusers not being even more egotistical than "capitalist swine X"?
Apparently, it is perfectly virtuous for employees not to even begin to create employment and a flow of income to the employed, while the same inability or unwillingness in employers is being considered a moral failing of the severest kind.
If the accusers thought matters through, they would find that the non-employing employee would by definition have to be regarded as being morally more base than the employing employer, who at least provides some employment and some income for others.
Foie Gras, a speciality of my Alsatian neighbours, is among the top ten of my favourite dishes. An hors d'oeuvre to be accompanied by a glass of Muscat d'Alsace, a delicious apperitive wine, best cherished in a cosy automnal or winter environment.
"Ukelele Serenade" by Aron Copland is a truly remarkable piece of music; it has a pantomimic quality to it, if I may use this oxymoronic phrase, conjuring funny characters before my eyes. I am not sure I have ever been amused by music before I heard "Ukelele Serenade".