The End of the German Economic Miracle | Wolfgang Münchau

In Episode 391 of Hidden Forces, Demetri Kofinas speaks with Wolfgang Münchau, the director and co-founder of Eurointelligence and the author of a phenomenal new book about post-WWII Germany, the rise and fall of the German industrial sector, and the end of what he dubs “The German Miracle.”

Wolfgang and Demetri spend the first hour of this episode laying the foundation to help listeners understand how Germany became the economic and financial juggernaut that we have known it to be throughout the 1990s and most of the 21st century. They discuss the two pillars of the German economic miracle, the supercharging of its industrial growth model during the period of globalization and unipolarity, and the cultural, technological, and geopolitical sources of its economic decline.

In the second hour, Kofinas and Münchau zero in on the ten structural sources of German weakness, including the German capital model and banking system, a corporatism that misaligns incentives between the interests of politicians and those of the economy, the fiscal doomsday machine in the form of Germany’s debt brake, a radicalizing electorate, and a political mindset among German elite that treats geopolitical risk as an economic externality to be safely discounted or ignored entirely.

00:00 Introduction
03:08 Historical Context of Germany's Economy
06:58 The Rise of German Entrepreneurialism
15:27 Technological Shifts and Missed Opportunities
23:00 The Dot-Com Bubble
26:15 Germany's Unique Economic System
27:03 Neo-mercantilism Explained
27:33 Germany's Export Surplus Strategy
28:45 Political Support for the German Model
31:38 Geopolitical Missteps and Energy Dependence
34:16 The Impact of the Eurozone Crisis
36:34 China's Role in Germany's Economy
41:42 Reversals in Global Trends
42:20 Challenges in Wage and Labor Dynamics
49:18 Topics for the Second Hour

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Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Follow Demetri on Twitter at @Kofinas

Episode Recorded on 11/19/2024

[lewreed]

This was great up to the point where your guest couldn't bring himself to state that the US blew up the Nord Stream. It's long past time Europe recognised the weight of its standing with the US, which might be on a par with helium.

[tkcannon]

A very interesting interview. I'm going to buy Wolfgang Münchau's book.

[yexela]

Well, most if not all German export products are now being replaced by Chinese products. Here in Russia we no longer have new German cars — they all are replaced by Chineese cars.

[MrHansBattle]

great conversation, really appreciate it, thanks guys

[chaimnisan]

Thank you for this elucidating presentation Wolfgang!

[davechapman]

Several years ago, I talked to Sebastian and Christian, who ran the famous Stanford Robot Car Team.
Both of them said that they would never have been able to build a self-driving car if they had stayed in Germany: They had to come to California to be taken seriously.
Ironically, they both said that Volkswagen was willing to give them money (and an SUV) because VW wanted to support a couple of German guys in Silicon Valley, and that there was NO WAY they would have been funded if they were still in Europe.

[yosifmetodiev]

If someone would have thought that people in Asia can also make machines... There goes your "unique" economic model.

[Slavik]

Consensus — this is exactly what describes German weaknesses

[drscopeify]

One more note, Germany has much of its capital locked away in large corporation like VW and Bosch but these large companies growth is limited, the weakening of large companies in Germany will release CAPITAL and manpower to innovate. Large old companies stifle innovation they choke the capital market, they choke the population by offering easy path in life. People will take the easiest path, you need pain for gain. The USA suffered badly in 1970s-80s was massive de-industrialization only to emerge with capital diverted to the booming tech industry and media and finance in the 1990s and until today. Germany has to transition, VW weakening is GOOD for Germany in the long run. People from around the glove are NOT buying German stocks and assets and investing in Germany because it lacks the higher growth young companies and innovators which are LOCKED AWAY in the large companies in Germany. Weakening the large German companies is the best thing that can happen to Germany for the long term.

[PT]

Very good insight into Germany mindset

[robertseaborne]

This is what can happen when you get duped by a whippersnapper US empire. 😢

[TheIntelligentVehicle]

Don't know how often others have commented on this, but I find the incessant "voice waveform" animation at the bottom of the screen abominable on youtube podcasts like this. Sometimes I just like to put the CCs on, but trying to read those with those lines bouncing up an down right behind the captions is a nauseating experience. Just an FYI

[robertYoutub]

As German I can only full agree to everything said. Just adding that German Zeis invented the computer. His company was later bought by Siemens and named Zeis-Nixdorf but never founded enough to grow.

[mr.mcginnis]

Why is the government controlling what technologies companies are developing?

[nancyparker]

I would say rigid mindset, rigid system and problems with education among other things....

[diegomargozzini]

Finally, energy theme minute 32. So politics fucked up germany. Funny how similar to the 30s, an alliance between russia and germany....

[Guangrui]

German cars still sell well in China, for the moment

[gaseousclay]

You didn’t mention the worldwide boycott against germany for supporting war on palestine

[RS-tnfs]

Hidden Forces is a copycat of Sam Harriss podcasts.
Wolfgang Münchau has no idea what he is talking about. I am surprised why people like him write books.

[Alexey-eb]

EU "is in tatters 🤡 tatters I say"