24.8.16

SOCIALISM IS THE LONGEST ROAD FROM EMERGENT ORDER TO EMERGENT ORDER.

Twenty-six years after reunification, eastern Germany remains economically anaemic with little prospect of catching up with the rest of the country by 2030.  The Iron Curtain that kept people in prior to 1989 didn't reflect only economic failure, perhaps it reflected the attitudes of the masses.
The former GDR has seen a decades-long emigration of the young, exacerbating the ageing population problem due to low birth rates that affect all of Germany.

"Exactly the people with a high level of qualification who could push increased productivity and innovation are lacking," [policy analyst Ifo] Ragnitz wrote.

As well as sapping the supply side of the economy with a brain drain, demographic weakness also undermines demand, as fewer people are around to spend in the local economy.

Meanwhile, Ragnitz noted that "large, structurally defining firms are largely lacking", apart from subsidiaries of foreign firms, meaning "higher-value business functions are lacking and strategic decisions taken without taking east German interests into account."

Most firms in eastern Germany remain small, concentrating on market niches - and are therefore "by definition notable for their limited opportunity to expand".
"Structurally defining firms" might be as obsolete in the old People's Republic of Prussia as they became in the Rust Belt. The flight of the ambitious people, another parallel to the Rust Belt. Those startup businesses? As the vanguard of the gig economy or rapid prototyping, perhaps that's something better emerging. As the German equivalent of resale shops, tattoo parlors, and nail salons?  All that's missing are the meth labs.  The parallels to fifty years of the Great Society depress.

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