This Is One To Watch

Jumping in feet first ahead of AFOE’s more knowledgeable German-based members (of course fools always rush in where…..), I can’t help but be concerned by reading this about the annual “Pressefest” of the National Democratic Party of Germany:

what struck the German intelligence officers who observed last month’s gathering in M?ckay, Saxony, was less the diversity than the scale of the attendance: 4,000 sympathisers had come from all over Germany and Austria, more than twice the expected number.

It had been assumed the neo-Nazi party was going through a rough patch. The 40-year-old party’s finances are depleted, it barely survived the government’s attempts to outlaw it last year, and its membership has been falling continuously since the mid-1990s.

Having altered its tactics and polished its image, however, the NPD, which has been active in east Germany since reunification, is attempting a rebirth on the back of mounting discontent and political cynicism in the economically deprived and unemployment-ridden region.
Source: Financial Times

I’ve been blogging and posting for some time now about Germany’s deep-seated economic problems and the growing political tensions inside Germany that these are producing. Clearly the NPD is very much a minority phenomenon, but it does seem incredibly important that these kinds of political entity are not allowed to quietly take root in Germany the way LePenism has in France. In an ageing society if the political and economic dynamics do get out of hand the ‘authoritarian temptation’ could be real enough, however remote such a possibility might seem right now.

Recent success in the European and some state elections seems to have animated them, and the process of growth here is certainly ‘non-linear’. As the FT puts it: “Instead of “fighting in the streets”, the party now wants to “fight in parliament”, as the German intelligence services put it. One reason for the new approach is financial – electoral success brings with it state funding.” That is once you pass a certain threshold your possibilities of growth increase disproportionately.

This having been said, I can’t resist one other after-thought (which probably shouldn’t just be included as an add-on, but still): isn’t the danger of extreme authoritarian nationalism in fact one of the big issues now on the agenda in Russia? Despite all the talk of Putin as a ‘strong man’ (and his gymnastic efforts to convince is that he is), it seems evident that this is exactly what – and especially in the eyes of the Russian people themselves – he isn’t. Any really strong ‘strong man’ would have sufficient control over the military arm of the state to impose his ‘order’, which is what the feeble Putin manifestly can’t do. I don’t know enough about present day conditions in Russia but I am extremely nervous about the possible arrival of someone like Vladimir Zhirinovsky, using the undoubtedly extensive funding that can come from Russia’s rich endowment of natural resources to build a military elite. If so, watch out Latvia!

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

8 thoughts on “This Is One To Watch

  1. As an Estonian that last sentese doesn’t even seem half as unreal as it would have a year ago.

  2. Edward, thanks for the post on important topics. Structurally, I’m not too worried about the NPD. Throughout postwar German democracy, far-right parties have given politics an occasional head cold, but never pneumonia. The body politic’s got a pretty good immune system. The trajectory is usually like you describe: unexpected support at rallies or other events, success in at least one state election (up to 15 percent or so), sometimes success in a second state election. (I’d have to trawl for facts longer than I want to for a comment to confirm this, but I think that the far right was even represented in Bonn once or twice in the 1950s and 1960s.) Then the immune system kicks in. The CDU-CSU, or sometimes the FDP (which had some surprisingly brown tinges in its early history), swipes the less odious parts of the rightist platform. (And as the fracas over the MP from Fulda last year showed, some parts of the conservatives are perfectly capable of swiping the odious parts too, as long as it stays below the national radar.) Infighting hurts the new party; a state leader doesn’t translate well to a new region, or the overall leader can’t tolerate any other vote-getters in the party, or rivals can’t agree on who is top dog. Incompetence and/or corruption emerge. The new party fails to do much in the next state or federal elections, and the fever in the media coverage breaks. From there, it’s only a matter of time until the “Whatever happened to” stories begin. For examples over the last 15 years, see the Schill party in the early 2000s, the NPD in the mid- to late-90s, or the Republikaner in the late-80s to early-90s

    Of course, the parties never completely go away. Extremism is a chronic condition, and it flares up from time to time. That’s a structural problem of proportional representation. If a tenth of the population is comprised of whack jobs, they’ll have their MPs as well.

    On the other hand, the Federal Republic is far and away the longest-lived unified German state. It’s lasted more than four times as long as the Third Reich, more than three times as long as Weimar, and it passed Bismarckian Germany back in 1996. All of Germany’s significant institutions are committed to democracy. The cancers that ate away at Weimar are not present today.

    The east is a problem, but speaking somewhat cynically, the east’s current problems and history since unification show that it doesn’t matter very much. Disgruntled pensioners don’t make revolutions. There’s stuff here for plenty of posts, and plenty of improvements to be made, but NPD is a marginal phenomenon and will stay that way.


    Your after-thought is delicious, and I’ll see if I can add some spice. (I know I previewed more on Beslan today, but work has intervened.) If the Yeltsin era was Weimar Russia, then we are now several years into post-Weimar Russia, a phrase I’ve tossed out a few times but no one really wants to think about. You don’t need a nut case like Zhirinovsky when V.V. Putin will do just as well. The conflicting streams in the Russian state do not contradict this thesis in the least. There is a substantial scholarly literature on competing centers of power in NS Germany; it’s generally thought that totalitarian states are not as unitary as sometimes appeared. (See also Stalin’s USSR.) What elements of authoritarian nationalism are missing in today’s Russia? See if actions in Georgia don’t look a lot like subversion and intimidation. (What’s the Georgian word for Sudetenland anyway?) Post-Weimar didn’t start with the biggest targets, it started with the weakest and most legitimate (Rhineland), and it found sympathy in the outside world all too often. I’m not making predictions here, but post-Weimar Russia is a conceptual framework worth trying on, just to be able to think seriously about today’s policy options.

  3. “post-Weimar Russia is a conceptual framework worth trying on, just to be able to think seriously about today’s policy options.”

    I agree completely.

  4. In addition to completely agreeing with Doug about the structural non-relevance of this development (as opposed to PR relevance) I would like to add that something like “Le Penism” clearly doesn’t work without some kind of Le Pen. The closest thing the German right ever had to LePen was a disgruntled Bavarian journalist and former CSU member who got sacked by the Bavarian radio for his views and then decided to market himself to the right. The other longer-lived persona of the far right is Dr. Gerhard Frey, who sort of owns the DVU, a fringe party that gained 12% in an East German state election in 1998. Their deputies largely discredited themselves not only due to their lack of skill but in addition by some criminal investigations (not the usual white collar crimes committed by politicians, one charge was, I think, cruelty against animals). The far right simply has no human capital to speak of. The old far right is dying, and mostly dead, the new far right is usually brainless.

  5. “The far right simply has no human capital to speak of. The old far right is dying, and mostly dead, the new far right is usually brainless.”

    Thanks both Tobias and Doug for putting all this in context. My worry was not of the importance of these phenomena now, but that they could get more parliamentary representation and hence funding, with the possibility of growth in the longer term. This fear is enhanced by the feeling that neither of the two main parties has a realistic grasp on the extent of Germany’s problems (I know you are more optimistic on this front Tobias :)) and therefore I am trying to see what kind of scenarios might emerge if we have another four or five years of continuing stagnation and frustration. This needs to be thought about. I am reassured that these people are completely marginalised, and I think it is important that it continues to remain that way. I have seen a number of game theoretic studies by responsible economists and political scientists which tend to suggest that as the average age of voters creeps up a critical point might be reached beyond which things like health and pension reform could become virtually impossible due to the interested nature of the voting. If this position was reached, and state finances continued to deteriorate it is not clear what could then break the logjam. I really wouldn’t want to dwell on this too much since I would risk sounding alarmist, but I do think that we should be aware that the greatest threat to our democratic systems would be presented by a combination of public insolvency, unresolved reform questions and halfway-credible lunatics like the ones we are talking about.

    “”Le Penism” clearly doesn’t work without some kind of Le Pen”

    I wholeheartedly agree, which is why the crazed but charismatic Zhirinovsky comes to mind in the Russian context.

  6. >I have seen a number of game theoretic studies >by responsible economists and political >scientists which tend to suggest that as the >average age of voters creeps up a critical >point might be reached beyond which things like >health and pension reform could become >virtually impossible due to the interested >nature of the voting. If this position was >reached, and state finances continued to >deteriorate it is not clear what could then >break the logjam.

    Sure, there is an ageing problem. Actually, I wanted to write something about the German government’s recent Sweden-inspired proposals for a child-care salary to deal with this. Edward, I don’t want to be seen as naively optimistic. There are problems, although it is important to put them in perspective, which despite all the efforts is usually not sufficiently done by the authors of the FT or the Economist, or most German newspapers, for that matter.

    Remember the alarmist studies about the decline of the European car industry in the early nineties? How the Japanese mode of production was the way to go? Now it’s all about America and the American model. Let’s wait 15 years and decide then about the “real” nature of the problems and the approach to deal with them.

    Fundamentally, my understanding is that the German society is trying to shed the last remnants of etatism and “the guilded age” in the west, which, of course, leads to some culture clashes with a lot of people in the east. It’s a bit Californa vs. Alabama, except for the prayers and the flags.

    I am still relatively young and I simply don’t want to become another German drama queen wallowing in self pity. Somehow we Germans as a group do tend to become a bit mentally volatile: all or nothing, economic miracle or bankcruptcy. Usually, when put in perspective, things don’t look as good or are as bleak as imagined. Hartz IV will be the next example of this rule.

    Given the context of this article, I’d like to point out that, at least ideologically, extremes have been thoroughly discredited…

  7. “you asume that politicans do what voters want them to do.”

    Sorry if I give that impression, I think politicians try to shape the outlook and expectations of voters, that is their role. Of course they are not always successful in that, anymore than large corporations are with their latest advertising campaign, or the Hollywood studios are inevitably triumphant in deciding which films cinema-goers may want to see. The factors influencing such processes are indeed interesting and hard to get to grips with. They lie, however, far beyond the scope of this post.

    “I am still relatively young and I simply don’t want to become another German drama queen wallowing in self pity.”

    Tobias, I hear what you are saying, and understand the feelings which must lie behind this. I am not advocating self pity, rather looking at a hard reality square-on.

    “Now it’s all about America and the American model.”

    This, as you have probably noticed, isn’t my take. Indeed I am offering no panacea.

    “Let’s wait 15 years and decide then about the “real” nature of the problems and the approach to deal with them.”

    This is a luxury I think you can’t afford. My rough guesstimate is that the critical years will be around 2008 – 2015.

    “Sure, there is an ageing problem. Actually, I wanted to write something about the German government’s recent Sweden-inspired proposals for a child-care salary to deal with this.”

    My point here Tobias isn’t to pour cold water on what you are saying, but simply to ask you to consider that things may be other than they seem. My feeling is that the German ‘malady’ is being seen inside Germany as some sort of combination of a badly digested incorporation of the East and an overly regulated labour market coupled with overly generous benefits. I imagine all the later explanations have some validity – if they didn’t it would be hard to understand why you have an obstinately high unemployment rate at around 10% – but they may not be the whole picture.

    Obviously analysing any situation presents immediate methodological difficulties, especially in the social sciences where decisive tests are hard to come by.

    But I am struck by the similarity between the problems a number of rapidly ageing societies are having across the globe. To take a case in point: Switzerland (where I link to a relevant article in my deficit post yesterday). There seem to be some really relevant similarities between the economic malaise in Japan, Germany, and Switzerland, and there is also some correlation between their rankings in the ageing process. So I think, prima facie, this route is worth investigating.

    Of course, I may be wrong, and time will show, but if I am not then all these sacrifices will not produce the intended results, and my fear is that it is this realisation which may provoke a feeling of despair. Remember, you are talking about Hartz IV. There will undoubtedly be Hartz V, Hartz VI, Hartz VII etc, following on behind. It is the cumulative effect of all this, and the surgery being carried out based on a wrong diagnosis that worries me.

    To give an example: it is almost a commonplace in the specialist literature that one of the difficulties, looking forwards, in systematically reducing state funded pension benefit entitlements is the floor provided by the means tested social security minimum. You simply cannot justify having people paying all their lives to ultimately receive the same as those who have never paid, hence: social security mimimums will have to be systematically reduced in line with pensions.

    Oh, and don’t miss the fact that while core inflation, even in these ‘inflationary’ times is running almost everywhere at between 1 and 2%, health care costs are normally rising in double digit percentages.

    Just one last detail. Sweden’s fertility rate is currently also well below the 2.1 replacement rate (2003: 1.71). What difference there is between Germany and Sweden may well in fact be due to the slightly higher rates of immigration Sweden has enjoyed in recent years.

    This ‘demographic transition’ isn’t just some passing fad, it is a process which has been going on since a near homeostatic equilibrium (which lasted about 10,000 years from the time of the agricultural revolution) was broken starting in the UK in the last years of the 17th century, as part of the initiation of a process which later became known as the industrial revolution.

    This transition (or demographic shock if you prefer) is still continuing, and will only start to settle down after global population peaks (probably at the back end of this century). So this is a ‘passing phenomenon’ of several hundred years duration: a mere instant in evolutionary time, but of course totally over the radar in terms of our instant-recipe political systems which are just not equipped to deal with problems at this level of complexity.

    In fact the more I think about it the more the global resource, global climate, and global population problems have in common: they have a temporality element which is outside our normal frames of consciousness, and in political system terms they are simply ‘beyond our ken’.

    Just one last detail – which again is pretty generally accepted in the literature – even were the increase in parental support have any significant impact on fertility (which I strongly doubt), this would have no impact on the labour force for a minimum of 20 years. In fact mid term it would only be a fiscal negative, increasing the dependent population. The only real option open is to introduce people of working age, ie immigration. But this is only going to be politically possible when that 10% unemployment rate has been significantly reduced: I just think that this should be made an explicit objective as part of the ‘reform programme’.

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