Don't Underestimate The German Economy | Economics Explained REACTION

Don't Underestimate The German Economy | Economics Explained REACTION

This is my reaction to Don't Underestimate The German Economy from Economics Explained

In this video I react to a video detailing the success of the economy of Germany.

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[nordwestbeiwest]

My dear Scottish friend, Germany's success does not lie in the large companies such as VW, Siemens, Bayer, Bosch or Porsche, but in the medium-sized companies that specialize in high-quality products on the world market without competition and that achieve the quality with very well-trained specialists in all sectors of Germany, even in the craft! Many thousands of medium-sized companies are the foundation of the German economy, those companies that are small but represent a very large role and importance in the world of specialists in their production, guild and quality. "Made in Germany" is a commitment to the product to be better than its competitors which was once intended to be other than a hallmark of the inferior choice of an effectively manufactured product that was cheaper than the UK. After World War II, the Germans were smarter with the money they got from the Marshall Plan. They formed a low-interest "reconstruction" bank. Due to this fact, companies were able to emerge which also boosted the economy.

[RustyDust]

The small and medium companies in Germany focus on making one type of product really well.
It often revolves around either components or semi-final products, as well as the machinery for such products.
It is very likely you walk on soles on your shoes that were made by a machine from Germany. No, not the shoes themselves, just the soles. Even the lowest price Chinese products often use these German made machines. These machines are made to such incredibly tight specifications, yet supply outstanding results, that it becomes a high value investment ONCE but after that the production costs drop thanks to the longevity and quality of those machines.

Anothet speciality are highly specific components.
The sensor chip in your smart phone that detects the orientation of the phone in 3D has an incredibly high chance to be produced by Bosch sensortech. They hold the patent for it, and allow licensed production if it throughout the world.

Another German product that you are probably unaware of but that you come into daily indirect contact are ball bearings. Specifically the extremely tough and tightly machined metallic spheres in the bearing cases themselves. These bearings are again produced in Germany to the specifications of producers the world over. A vast majority of any kind of axle bearing used these spheres. Virtually any car axle, tool with spinning parts, etc has an incredibly high chance to use one these metallic spheres. Yes, it's not an exciting product, but still essential for many final producs around the world.

Those are just a handful of German products. Or like somebody once said:"Germans build the things that go into the things that go into the things that you want to build". Yepp, two steps down from the final product.
But when these pre-product's components are so essential to be EXACTLY as specified at a consistent quality, at a consistent price. Once you have companies that have specilized to such a degree that others may compete in one or maybe even two of these factors, but not all of them, then you have attained a very comfortable position in the market. When many of these companies are also public Limited, thus not subject to share fluctuations, as well as safety from aggressive buyouts, then you become a long term trading partner.
When the government then regulates the laws that protect such business models and keeps it slowly but steadily growing there's a sense of being able to rely on them.

[maholics]

„Lack of corruption in Germanys government…“? THIS joke was really good! 🤣🤣

[DaFreak]

Economics Explained is not a source I recommend you trust, they are infamous for being highly biased and subjective in their content, with a strong conservative american worldview, which had lead them to be called out by other creators in the economics sphere for bending facts and situations to suit the narrative that the US reigns at the peak, so do take their stuff with a whole lot of salt.

[june]

Germany has taken some hard hits during the last few years, as has everybody else. But our way of handling workers, especially the Workers' Councils, make sure the people know WHAT sucks in the company, and can negotiate about what they can do and what the company can do to save the day. We're a pretty conservative people (in an economical sense). We strongly favour safe jobs, safe circumstances, safe social networks. "Oh, I'll just quit if I don't like it" is rarely found here, and many people would prefer a slightly less paying indefinite contract to a higher paying timed one.

[DaFreak]

germany has a very hard stance on accountability, it is something we adopted for the purpose of not repeating the faults that contributed in causing WW2, and consequently germany is extremely insistent on transparency and accountability, making doing business in germany easier then nowhere else. There is still corruption in politics and industry, but it is incomparable to other economies.

[lbergen]

The fundamentals of the German society/economically structure are good. Therefore the economy if very strong. The growing curve over the last years shows it too. So no worries...

[markusgramenz]

Germany is mostly so rich because it is one of the most competitive markets in the world, for the german market it means to addapt and be innovative or you die as a company, also there is kinda a lack of big companies and thats because of the german middle class companies there are between 30k to 45k of VERY specialized companies that often gets given from father to son or today to daughter and that is giving them an always high incentive to stay the leading goods producers in there branch, so they can givethere children a healthy and efficent running company that will stay competitive, the best example for that is the company called DESMA they have just 200 employees but all shoe soles in this world got crafted with one of there machines cause they make the best and efficent machinery for that. PS. I hope you are ableto Understand my German English Gramatic

[stirbjoernwesterhever]

Yes, Germany is pretty young if you look at the current constitution. But even after founding the first Germany Empire 1871 a lot of the things the video you're watching were implemented during the time of the empire and so even when there was no cold war, Germany had the first social welfare laws of the world. And even as Germany was a monarchy, the election laws were much more democratic an equal than in the UK or even the Netherlands. Germany did pretty well till WW1 had was economical more successful than the UK in a lot regards.
The reason for this is for example the long divide of Germany before creating the Empire in 1871. There had been a lot political and economic centers in Germany because of splitting up in so many small and bigger German states. Germany did benefit from this after WW2. Other than the UK where in the 80s the most modern economy did grow around London, in Germany economic wealth was geopraphical more diverse.

[ollihro]

14:07 ... that is what is taught in school but not what happened in real life. when uniting east and west they put a contract in place named "2+4 vertrag" which basically balanced out ecomics of east and west. but what also happened is that strong eastern germany factories got shot down to prevent west german companies from loosing money or even being put out of business. for example east germany had the biggest and most innovative factory for youth clothing (my grandfather was on of the leaders of that company) ... this company was forced to stop all work with that said contract. just to name one example... its the same with the ship building industiry which was super strong and built ships for the whole soviet union and asia. as a result of this economic shutdown the unemloyment rate skyrocketed. another big thing was western companies scammed a lot of easy believing people out of their earned money cause for 40 years people didnt experienced a situation where another dude would go with u into business just to cheat u out of your money. that didnt happen in eastern germany. so alot of factors caused big issues in the 90s for east germany... cheers

[ColdRoland]

That guy sounded like Plague of Gripes.

Didn‘t know he made videos without drawing big furry asses. :P

[MichaEl-rhkv]

In Germany it is not called Rhine Capitalism, but Social Market Economy, a term christened by the first Minister of Economics Ludwig Erhard and his closest advisers; this system was based on Ordoliberalism and originally also called competition-oriented market economy (partly in distinction to capitalism, which tends to become less and less competition-oriented if not regulated). And it favors not more interventions (like stated in 10:38), but rather steady regulations which make punctual interventions superfluous.
10:50 Not fully correct . At the time as the Social Market Economy was introduced most bigger (West) European economies had some kind of centrally planned or at least controlled economy, even if most corporations were still private enterprises (sometimes called war economy, which was very similar to the Nazi economy - and German economists had already learned about the weaknesses of such systems as well as of the free market economy of the 1900s and 1920s). Ordoliberalists had also their doubts about Keynesianism, which they thought be too interventionist - Keynesianism was however adopted then by most Western economies.
12:25 The big brands could never become so big without the infrastructure consisting of a network of very competitive small and medium companies - they do not postpone innovations to get the last bit of milk out of their old cash cows (like some big corporations tend to do).
15:30 Germany became the sick man of Europe after 16 years of conservative-liberal coalitions under chancellor Helmut Kohl (mostly due to ideological neoliberal politics, while at the same time protecting outdated industries and forgetting the virtues of a real Social Market Economy) and has become again a (but not the most) sick man of Europe after 16 years of conservative-socialdemocratic, conservative-liberal and again conservative-socialdemocratic governments under chancellor Angela Merkel (mostly due to procrastination and thwarting energy transition, climate protection, innovation and economic change, protecting outdated industries, buying Russian natural gas instead of building a modern energy infrastructure and generally incompetent Ministers of Economy)

[connectingthedots]

I would say Germans are despite alp their rules astonishingly flexible and change relatively compared to other countries, if something doesn't work out. They can decide on change and then push it through by means of sticking to the rules.

[walkir]

I mean, "avoiding stupid ideas like taking over the means of production" isn't *totally* wrong, but actual communism kind of was too new when Bismarck created the early welfare state.^ Admittedly, it already existed, but Prussia allowiung the creationof healthcare providers for workers 1845 didn't have that issue.
It certianly wasn't created for fear of Stalin - if anything, you could argue the history behind it was founded by fear of the French Revolution back when Prussia reformed its way out of that danger in 1806.
We have a history of solving issues politically and in dialogue.

[maho]

it's time for you to visit my country😉

[KeesBoons]

Mert, I don't know what background the creator of this video has, but there was a lot wrong with it.

[Guanaalex]

Since we Germans lost all El cheapo gas from Russia, all craftsmanship experts have jobs for at least a full decade to come to replace all fossile fuel heaters with heat pumps.

[sakurayuki]

Germany doesnt treat mental and physical health as good as the system is set up for. Many Education facilities suffer under the low money they receive from the government so they turnd privatized. Transport is still good, but there is a long culture debate about internal transportation. Politics in Germany tend to go to progression, on general but the leading partys get accused of fails or mistakes of their predecessors. This country is just about to recover humane values that got under the car of capitalism.

[Schwitzmaul]

Korruption less Gouvernment? hahaha
Korruption in Germany i forced by law to be named Lobbyissm. And then some Korruption even worther then that

[embreis]

1:01 'and if current trends continue, it will be the 3rd largest by the end of the decade.' it was the 3rd largest for a time around 20yrs ago before China overtook it but it is highly unlikely it will surpass Japan any time soon (certainly not within a decade and probably never).
Japan currently has a population of almost 125m - over 40m more than Germany. it suffers from shrinking population since 2015 or so and will probably continue to shrink but Germany will shrink too - unless it goes on to accept large numbers of refugees for years to come. these refugees are no substitute in economic terms for the people they are replacing and future GDP numbers will show this.