Book Review: “Why the Germans Do it Better, Notes from a Grown-Up Country”

As Liberal Democrats know only all too well, democracy comes in many versions as does totalitarianism. One of the paradoxes of history is the way in which a country which caused so much harm in its first fifty-five years grew up into what John Kampfner describes as “a bulwark for decency, competence and stability.” For two decades after 1945 West Germany struggled to come to terms with what happened in the Nazi period. Then over the next half century Germans engaged in a process of atonement which has affected every aspect of the nation’s life. Kampfner sees overcoming the threat to democracy presented by the spirit of 1968 being perverted by terrorism and the Baader-Meinhof Group as a key staging post.

However the strength of contemporary German democracy has its roots in the constitutional settlement forged in 1949, which Britain helped to create. The “Basic Law” (Grundgesetz) has been amended dozens of times (by two-thirds majorities in Parliament) but its fundamental strength is unquestionably robust. A commitment to a democracy which is almost existential is the backdrop to Kampfer’s “notes” on foreign policy, immigration, the economy, housing, social cohesion and environmentalism. Inevitably Angela Merkel is a recurring presence, unheard of as the Berlin Wall came down but a huge figure in ensuring the steady embedding of unification.

Kampfner is not a political scientist or conventional historian but an impressive journalist who can marshal evidence with integrity and offer fresh insights into modern Germany and a wider Europe, inevitably provoking reflection on our domestic British politics, industry and culture. There are two particular strengths of this book which make individual chapters worth reading more than once. He is skilled at helping us see the interdependence of different aspects of life in today’s Germany. But the other crucial skill in seeing things whole is his refusal to let his admiration for the country blind him to the negative elements. He suggests that the biggest error in the reunification process was (and remains) the failure to identify more people from the East to serve in senior posts and provide broader role models in politics, the courts, the military and business. Meanwhile the taxation system, school hours and very limited childcare ensure that Germany has a poorer record than most equivalent countries in supporting working mothers.

It is a social and political balance sheet but the bottom line is firmly in credit. We should not expect one country to provide a blueprint for others, but some clues about doing things better are to be cherished!

My father spent the first five years of the 1940s in a Nazi POW camp. Then after a brief period of of recuperation he became a popular member of the Tyneside Anglo-German Friendship Society, having discovered in prison camp that his Geordie accent made it possible for him to speak German “like a Prussian”. In due course my parents enjoyed two holidays visiting a family who had returned to Bavaria after some years in Gateshead. I watched my father’s respect for Germans and Germany grow as he struggled to understand why that country had been totally corrupted by Hitler’s regime. He died nine years after the Wall came down. He was no great reader (apart from sharing my love of newspapers) but he would have warmly welcomed discussion of the issues highlighted by John Kampfner’s book – and would not have been surprised by the title.

* Geoff Reid is a Bradford City Councillor and a retired Methodist Minister.

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20 Comments

  • Little Jackie Paper 1st Mar '21 - 1:16pm

    Surely the ordoliberal consensus is a very big factor domestically for Germany.

    Whether exporting ordoliberalism via the single currency was a good idea…I’m not convinced.

  • John Marriott 1st Mar '21 - 5:07pm

    I have spent a good deal of my life dealing with Germany, particularly first trying to learn and then trying (I emphasise ‘trying’) to teach its language and literature. I’ve holidayed, studied and worked and lived there (for work read a summer in 1965 before embarking on a Teaching Certificate working as a member of an international team in the yard of a wholesale plumbing firm in Cologne and from 1973 to 1974 as a teacher of English and French at Gymnasium near Oldenburg). I think I know a bit about Germany and the Germans.

    I’ll just give you one illustration of HOW the Germans ‘do it better’. Perhaps some of you are old enough to remember those bubble gum machines that often stood outside sweatshops and newsagents in the 1950s. You out a penny in the slop, turned the handle and got something to eat or chew in return. The only problem was that, back home, they rarely had anything in them to dispense and so stood largely gathering dust. Not, from my experience on my first trip to Germany on a school exchange back in 1958. Then you could get something like 11 Deutschmarks to the pound so that would have meant a lot of bubble gum.

    Times have changed. Germany is now one nation again, although that was never the case before 1871. However, its streets are no longer as clean as they were back then. The ‘Economic Miracle’, fuelled largely by the mighty dollar, the industry of its people, mainly fully trained refugees from the East, as well as ‘guest workers’ from the south, has given Germany a sound base upon which it is still building today. However, the East/West divide, despite the billions of marks/euros spent on raising up the former communist provinces, still exists and has contributed to a resurgence of right wing populism that, while still there, dared not raise its head a generation or so ago.

  • John Marriott 1st Mar '21 - 5:23pm

    Despite the undoubted high standard of living, a federal system that I personally envy and could easily be a blueprint for a Federal U.K., not all Germans are blissfully happy. While their success in purely economic terms is partly down to their own endeavours, they have relied greatly on the NATO umbrella for their defence, for which they have hardly paid their fair share. The late writer Heinrich Böll used to refer to his fellow countrymen’s lack of roots (Bodenlosigkeit), almost a feeling of a lack of belonging, almost a denial of any form of patriotism, except perhaps when winning the FIFA World Cup, which the Germans have done on several occasions. As least here the Germans do appear to do it better or, as Gary Lineker famously said, when it comes to contests with us, to be able to win on penalties!

  • Peter Martin 1st Mar '21 - 10:29pm

    What’s “it” ?

  • John Marriott 2nd Mar '21 - 8:34am

    @Peter Martin
    If you are referring to the opening sentence in Cllr Reid’s fourth paragraph, I think he may be alluding to Kampfner’s book in general. As I have written in my two connected posts, there are things we could learn from Germany, for example, how it organises itself geopolitically, how its Trades Unions operate in consort with employers (largely thanks to the work of our TUC after WW2) ‘Mitbestimmung’ and the Social Market Economy (the SPD had its Clause 4 moment in Bad Godesberg in 1959). Our Labour Party had to wait for Blair to have its own. On a lighter night, I wouldn’t mind knowing how its national soccer team generally manages to do so well in World Cups.

    Is it a paradise? Clearly not. Behind the scenes many Germans of my generation still exhibit prejudice towards those whose ethnicity is different from their own. The attitude of many Germans initially towards the Turks was a bit like our attitude to the ‘Windrush’ generation in that we welcomed their labour, without which large sectors of both our and their economy would not have functioned, but not their presence. Merkel’s almost unilateral decision to let in all those refugees had repercussions that are still resonating today. Also, if you have ever actually lived there and needed to earn a lively you would have come up against of leviathan of a bureaucracy which makes ours look more like a version of ‘laissez-faire’.

    We Brits have a ‘love- hate’ relationship with the Germans, probably a more balanced view than we have of the French, whose politicians at least are generally mistrusted, and often with good reason. Although a good part of our language comes from Norman French, a good slice originates further back to Anglo Saxon, which is where German comes from. Also, let’s not forget that our own rulers’ family name is really Saxe Coburg Gotha! It’s clearly slightly more nuanced than who gets first dibs at the loungers around the swimming pool at the Mediterranean holiday resort!

  • I look forward to reading Kampfner’s book. John Marriott suggests that the German Federal system might be a blueprint for a Federal UK. I largely agree with him although blueprint might be too strong a word. We can certainly learn a lot from the German system. In Germany 50% of public expenditure is spent by regional and local government. The equivalent in the UK is a mere 25% – one of the lowest in the OECD!

    The “Basic Law” in Germany enshrines the rights of the different levels of government in the constitution. So it is ordained that local government has the right to carry out matters within its level of authority without interference. Public administration is generally carried out by or under the oversight of the regional (Land) governments with minimal involvement or interference at the national level.

    Perhaps one of the best things in their constitution is the “Bundesrat” or second chamber which represents the regions and effectively gives them a collective veto on legislation. PR is also embedded in German elections and this ensures that a much higher degree of consensus is required in governance than in the UK.

  • Paul Barker 2nd Mar '21 - 11:08am

    I have Family in Germany & one of the big things I have noticed is that their Health system is obviously better funded than ours. The reason for this is that Health spending is determined by an Independent body, that is something we could imitate while still keeping the structure of The NHS.
    Of course that means Government & Parliament giving away some of its Power.

  • Peter Hirst 2nd Mar '21 - 1:42pm

    Perhaps we can learn from Germany’s recent history while not copying its earlier atrocities. Human rights and the protection of minorities is the cornerstone of a liberal democracy. This includes developing a multi-Party democracy that encourages collaboration and respect for everyone.

  • Joseph Bourke 2nd Mar '21 - 2:05pm

    It has always been something of a puzzle that British civil servants have been able to establish practical governance and institutional arrangements in places like post-war Germany and Hong Kong that have not been taken up back home.
    Professor John Muellbauer wrote a paper in 2018 “HOUSING, DEBT AND THE ECONOMY: A TALE OF TWO COUNTRIES” constrasting the situation of the UK with Germany https://journals.sagepub.com/doi/abs/10.1177/002795011824500112?journalCode=nera
    “In housing affordability levels and volatility, there could hardly be a greater contrast than between the UK and Germany. Differences in history, institutions and policies are explored in this paper. Residential housing supply has been far more expansionary in Germany and mortgage credit more tightly regulated. A sensibly regulated rental market and stable German house prices have combined to leave the rental sector with over half of tenures. Policy failures in the UK have resulted in widening intergenerational inequality, increased social exclusion, adversely affected productivity and growth and raised the risk of financial instability. Policy lessons are drawn for the UK, which go far beyond the remit of the immediately responsible Ministry of Housing, Communities and Local Government,”

  • Peter Martin 2nd Mar '21 - 2:37pm

    @ Joe B,

    “Policy failures (in housing and debt) in the UK have resulted in widening intergenerational inequality…..”

    OK but what are these policy failures? They arise from a reluctance of governments in the UK to shoulder what might be termed their fair share of debt. It’s a matter of simple accounting that if the UK as whole runs a deficit in trade that someone in the UK has also to borrow the same amount, ie on a penny for penny basis. Governments haven’t wanted to borrow

  • Peter Martin 2nd Mar '21 - 2:43pm

    (cont)
    …..Governments haven’t wanted to borrow, or the EU has set limits on Govt borrowing, which has meant that the borrowing has been pushed on to the private domestic sector. The value of property and land has been used as collateral for that borrowing with the end result has been a combination of ultra low interest rates and very expensive property.

    Because Germany runs a large surplus in its trade there is no similar need there. Hence the housing market looks quite different.

    But, obviously, we can’t all be like Germany and run large trade surpluses.

  • John Marriott 2nd Mar '21 - 2:49pm

    @John Kelly
    Your mentioning of the Bundesrat reminds me that this revising chamber dates back to Bismarck. Unlike the members of the Bundestag, around half of whom are directly elected and half by PR from Party regional lists, Bundesrat members are nominated (‘entsandt’) by the 16 regional parliaments, something else we might want to consider if we ever get round to reforming our Upper Chamber and introducing Regional Government in England as part of a four nation Federal U.K.

    It’s surprising how much of the ‘Second Reich’ (1871-1918) has managed, despite the disruption of the ‘Third Reich’ and the postwar division of Germany, to survive into the modern era. If you want to read a bit more about the period, I could recommend a recently published book by U.K. based writer, Katja Hoyer, entitled ‘Blood and Iron’. It’s quite short and a relatively easy read and, of course, it’s in English.

  • Joseph Bourke 2nd Mar '21 - 3:17pm

    Muellbaeur writes in his introduction;
    “Among the G7 countries, the UK has had the largest rise in house prices relative to average disposable income since 1970, and particularly pronounced since 1997. Dramatic falls have occurred in the rates of owner-occupation, particularly for younger households. The IFS estimates that 65 per cent of those aged 25–34 years, and with incomes in the middle quintile for their age, owned their own homes in 1995–6; and that figure fell to just 27 per cent by 2015–16. The result is increased pressure in the rental sector. These housing pressures have had huge consequences for both tenants and the public purse. The Housing Benefit bill rose in real terms between 1997–8 and 2011–12 by 67 per cent in London, by 61 per cent in the rest of the South East, and by 51 per cent in Great Britain as a whole. Since then, severe cuts in the generosity of Housing Benefit (HB), as documented by the Resolution Foundation Intergenerational Commission (2018b),3 have reduced the expense to the taxpayer but at the cost of increased financial stress for many tenants.
    Comparisons of the UK’s housing market with those of other countries shows that the UK’s experience is far from inevitable, but is the self-inflicted consequence of several policy failings. The Anglo-German comparison has been of long-standing interest, and the contrast is a particularly stark one. For instance, the ratio of German house prices to average disposable household income was on a declining trend between 1970 and 2010; even after the recent boom, this ratio is close to its levels in the mid-1990s, and well below its 1980 levels. What was true in 1992, remains true, and sets the agenda for this paper: “Factors which account for the different behaviour of Anglo and German housing markets are economic growth, demography, inflation, real interest rates, structural differences in the provision of mortgage credit, the financial liberalisation which occurred in Britain, and the differences in tax regimes, in the provision and regulation of rented housing and in the system of land use planning. A comparative analysis of these factors “helps to explain substantial parts of the differences in macro-economic behaviour between Britain and Germany”

  • @Joseph Bourke “It has always been something of a puzzle that British civil servants have been able to establish practical governance and institutional arrangements in places like post-war Germany”
    I thought British civil servants weren’t really involved in the post-war reconstruction of Germany, they simply left the job to the army.

    As for Hong Kong, I wonder how much was down to it being a long way from Westminster and Whitehall and so largely out-of-sight and out-of-mind…

  • Peter Martin 2nd Mar '21 - 5:13pm

    “Among the G7 countries, the UK has had the largest rise in house prices relative to average disposable income since 1970, and particularly pronounced since 1997. Dramatic falls have occurred in the rates of owner-occupation, particularly for younger households”

    This statement would not be true if the term G7 was replaced by G12. This would then include Australia. House prices in Australia are even more unaffordable than the UK.

    Australia has the third most expensive housing market in the world. Sydney’s housing is 12.2 times the median income and Melbourne’s is 9.5 times the median income. Adelaide, Brisbane, and Perth are also ranked “severely unaffordable,” coming in at 6.6, 6.2, and 6.1 times the median income respectively.

    This might, at first look, seem surprising. Australia is a large continent with a low population. There shouldn’t be, and obviously isn’t, a land constraint problem. What they do have is a neoliberally inclined government problem. They don’t want to assume their fair share of debt so they pump up the debt of the private sector, using the value of real estate as collateral, to compensate.

    It does seem rather odd that those of a very neoliberally inclined mentality should be complaining about the effect of those neoliberal policies. It’s not just a UK or Australian problem. The EU has no rules at all on allowable debt levels in the private sector but the tightest rules possible on public debt. But it was private debt levels that caused all the problems in the peripheral countries like Italy, Spain, Ireland and Greece after the 2008 GFC. Go figure!

    The evidence is clear. Neoliberals don’t care about levels of private debt which in turn means they don’t care that housing becomes unaffordable for the young.

  • @Peter Martin – Re: Neoliberals don’t care about levels of private debt
    Given we often disagree, a point well made. I hadn’t thought about it in those terms before, but it does make sense given what we know about (the economics of) Government debt and money supply.

  • Joseph Bourke 3rd Mar '21 - 1:33pm

    Peter Martin,

    house prices in Australia and the UK have continued to rise during the pandemic despite a massive increase in government borrowing and an equally large increase in private debt repayment and personal savings.
    When viewing house price inflation through the prism of the quantity of money theory it is important to remember that velocity of money is part of the assumptions underlying these arithmetic equations. As spending slows and savings accumulate in bank deposit accounts, so too does the velocity of money fall and an increase in the money supply simply offsets this decease in velocity.
    These Australian housing analysts ask the question “Why are home prices still rising when there is a recession, when wages are not growing and unemployment is still high? They offer some perspectives https://www.smh.com.au/business/the-economy/why-are-australian-home-prices-rising-again-and-can-it-last-20210126-p56wte.html and https://propertyupdate.com.au/why-are-house-prices-rising-at-a-time-when-wages-are-not-growing-and-unemployment-is-still-high/
    Germany is not immune from these trends, but its institutional and macro-prudential arrangements have generally worked to maintain housing affordability in general, although there are certainly growing pressures in certain cities like Munich and Berlin.

  • John Marriott 3rd Mar '21 - 2:08pm

    “Wir bauen “ (we are building) used to be a sign of achievement and pride in German families. One of the favourite songs in the East German Communist song book had as its chorus the refrain “Bau’ auf!” There’s a clip of Honecker and his gang joining in at one of the last Youth Rallies staged in the GDR before it all collapsed.

    Unlike the Brits, Germans still tend to prefer living in apartments, either purchased or rented often from local firms by employees. When they do buy a house, they quite often acquire the land and then pay to have a house designed and built, which they may well occupy for a lifetime, before passing it on to their descendants. In same ways, that’s how it often was here until the 1960s, when homeowners were encouraged to treat bricks and mortar as a means of making money, although we have tended to buy houses on estates from developers, something that has also made an appearance in modern Germany, although old habits die hard.

  • Peter Martin 5th Mar '21 - 1:20am

    @ Joe,

    “……house prices in Australia and the UK have continued to rise during the pandemic despite a massive increase in government borrowing and an equally large increase in private debt repayment and personal savings.”

    Despite?

    Sure, the word applies to a reduction in the willingness of the private sector to borrow to fund house purchases, which has been the driving force behind house price rises in the past. But an increase in government borrowing corresponds to an increase in the spending power of everyone else too. It’s money being spent into the economy which isn’t coming back as taxes. So the increase in government borrowing will have an upwards effect on house prices.

    In addition the Government has acted to keep the housing market afloat by offering a stamp duty holiday which has just been extended until June. So what will happen after that if the government’s deficit starts to fall and the private sector is still unwilling to borrow? They can’t very well reduce interest rates any further to encourage more private sector borrowing.

    The previous argument was that Governments allowed private debt levels to get out of control because they were trying to reduce their own borrowing levels at the same time as running a large trade deficit. So they had to encourage the private sector to do the extra borrowing to fund that. They did this by creating a boom in house prices.

    But saying that the Government should have aimed for a deficit of 5-6% of GDP, or enough to cover the trade deficit without the need for too much private borrowing , isn’t quite what we have now! Their deficit is currently running at around 18% of GDP. So, yes, that. together with the stamp duty holiday, will likely show up as temporary house price inflation.

  • John Marriott 5th Mar '21 - 8:43am

    Messrs Bourke and Martin are at it again, all the while all those poor Germans, many of whom choose not to buy houses enjoy their second homes in the sun, a higher standard of living than ours, while waiting for their recently rehabilitated Oxford AstraZeneca vaccines.

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