Tuesday, March 5, 2013



The Germans hide their expertise in plain sight, yet for some reason we seem incapable of learning from it.

Decades pass, the evidence piles up, and still we seem incapable of learning from what—based on the evidence—is self evident. Their economic system works better than ours. If you don’t accept that argument, let me compromise: Aspects of their economic system deliver measurably superior results.

When I worked in the UK, I couldn’t understand why the British were so reluctant to copy the German economic system, and now it seems that the U.S. has similar reservations.

It is quite baffling because the German business model—which is not that complicated—is quite remarkably successful—and has been so since the end of WW II (and it did rather well before that). In addition, the Germans absorbed East Germany which was, for many years, a huge economic burden in its own right.

Dan Rather has written an excellent piece which appears in the Huffington Post of March 4 2013. The following is an extract from it.

We had just returned from our own tour of Germany's schools and factories and can report that the German model does in fact provide a viable and popular pathway to get young people employed immediately after high school in good paying jobs. Jobs that can turn into careers.

We found a culture where "vocational training" is not a taboo word, where companies invest billions of dollars annually in training young people who have completed tenth grade for apprenticeships in healthcare, information technology, and above all, manufacturing.

The results are hard to dispute: Germany's high school drop-out rate is around 7 percent (compared to the U.S.' dismal 23 percent.) And while 8 percent of Germany's youth population (ages 16-24) is unemployed, our youth unemployment is at 16 percent (for African-American youth, it's a bleaker 38 percent, according to the Department of Labor.)

Germany's highly-skilled workforce helps it create high-end products that the world is hungry for. As a result, Germany exports more products than anywhere else except China, and the country has been a lone beacon of good news while the rest of Europe has been laid low by the financial crisis.

Well, it is not true the rest of Europe has been “laid low” but the countries which are doing well—or well enough—are all really following variations of the German economic model, and are mainly clustered in Northern Europe. Of course, it can be argued that what works in relatively small countries like Sweden cannot work in the U.S., but if you add up the populations and GDPs of Germany, Austria, Switzerland and Scandinavia—all high wage, high added-value economies--the total adds up to a significant percentage of the size of the U.S. economy—and is doing vastly better in terms of the wellbeing of the average citizen.

It would seem no more than good sense to take a closer look.


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