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No progress through government planning

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No progress through government planning

The below-average growth of the German economy of 2.7 percent in the past year in a European comparison can certainly be explained at least in part with the pandemic. An internationally closely networked economy that is still heavily influenced by industry is suffering particularly badly from the disruptions in global supply chains. Far more worrying are the long-term prospects for the German economy. After all, according to all forecasts, demographic change in particular will noticeably reduce the supply of work in the coming years. This threatens to reduce the potential for economic growth, which in theory could be compensated for by replacing human labor with robots and other machines and by increasing productivity. In practice this is not so simple. Many branches of the manufacturing industry know how human labor can be substituted by the change referred to as Industry 4.0. But the numerous planned construction and infrastructure projects, whether bridges, apartments or towers for wind turbines, will not be easy to create with robots. Qualified labor will become increasingly scarce in the coming years. Will strong advances in productivity become a motor for dynamic economic growth? There is no lack of patent applications in Germany, and progress in cooperation between business and science is unmistakable. But in important future industries, Germany’s future, like that of other European countries, does not look brilliant.

A liberal economic order would create an innovation-friendly framework for companies. However, especially in the SPD, the Greens and economists close to them, there are too many voices that promise progress that combines economic prosperity with sustainability from stronger state control. These illusions are misleading.



#progress #government #planning

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