Economy: Get out of the dogma booth – economy

Sometimes it’s coincidences that speed up the course of history. Earlier this year, the former federal government failed to agree on the fifth position on the expert council. This is why the so-called economic wise men only submit their annual report to four people on Wednesday. And what happens in the process is what is numerically possible with four economists: There is a deadlock on key issues such as debt and investments. But this is not an industrial accident. The Council of Economic Experts is thus presenting itself more openly than before – finally.

For decades, the committee was firmly in the hands of scientists who argued without a market. This is justified in certain questions. Without competition, businesses collapse. And if the state intervenes too much in the economy, it slows down innovation and growth. Last but not least, the 2008 financial crisis proved what market liberalism can do when it gets stuck in the neoliberal dogma: banks (and other industries) need legal control, otherwise they will maximize profits. profits at the expense of society and let the world economy collapse. .

The introduction of the minimum wage in 2015 showed how much the Council of Economic Experts had so far supported dogmatism: researchers believed that wages should evolve in the market. They ignored how the balance of power changed. Today, only half of employers pay collectively agreed wages from the 1990s. A minimum wage prevents the exploitation of millions of workers. Economics were not impressed. Some have gone too far to predict that the statutory minimum wage will cost hundreds of thousands of jobs. Reality has impressively demonstrated their error.

It is therefore a good sign that the Council is not content to just publish the old files in its new report on the policy of the possible new federal government. In the trio of traffic lights, the SPD and the Greens in particular are looking for investment opportunities for the future. You can now choose from two different recommendations.

Fiscal policy becomes questionable when it turns into dogma

Economic sages Veronika Grimm and Volker Wieland call for spending discipline and stress that private investment is a priority. This position has something for itself. Because German governments traditionally limit debts, they were able to weather the financial and corona crisis without outside help. However, budgetary discipline becomes questionable when it becomes frozen in dogma.

Just like under Chancellor Angela Merkel, who made the black zero budget balance the heart of her (modest) economic and political record. Merkel saved the country from ruin. Schools and means of transport are in a deplorable state. With its under-digitization, Germany has exposed itself to ridicule at the latest in the pandemic.

It would be nice if the traffic light did differently. Coalition partners find out how it could work from the other two economists, Monika Schnitzer and Achim Truger. They point out that the state should invest more in education, digitization and climate protection – and that it may make economic sense to go into debt for this. And they describe how it’s possible with investment firms outside of the debt brake, if it can’t be reformed that quickly.

It is good that the plurality is reflected in the report

But doesn’t it seem strange that the pundits don’t vote unanimously like they did before? No. Many German economists are currently considering how to resolve the investment delay. The boss of Ifo, Clemens Fuest, also a lawyer for budgetary discipline, is exploring financial leeway. Opposing researchers like market liberal Lars Feld and progressive Marcel Fratzscher jointly present proposals. It is good that this plurality is reflected in the new report.

The central consultative body of the government thus shows only a necessary openness for a long time. Anglo-Saxon economists do not care about the German fixation on austerity rules for Europe too, which incidentally did not prevent the euro crisis. With its new report, the Expert Council has become more relevant than before as a stand for dogmas.

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