Wolfgang Reitzle is one of Germany’s premiere business executives, and Klaus Boldt, part of the editorial leadership of Die Welt, one of the foremost business journalists. The wide-ranging interview here points to the multiple dimensions of the problems facing Germany at the end of the Angela Merkel era. The general elections in late September are sure to lead to a new coalition government in Berlin—and a new chancellor—who will face all the problems that Reitzle diagnoses, with the possible exception of the pandemic, hopefully over by the fall, even in Europe. While the coronavirus’s economic, social, and political consequences are however sure to linger on, it figures here primarily as an example of massive government failure and the toxic mixture of bureaucracy, ideology, and incompetence that Reitzle denounces and that leads him to call Berlin “a failed state.”
Those are harsh words from a prominent leader of the German business community, especially when one recalls how in the U.S. political discussion in recent years Germany has been repeatedly held up as the better alternative to the Trump administration. Not long ago the myth of Angela Merkel as the new leader of the free world circulated through the press. That once-glowing imagery has now vanished in the face of the catastrophes of the German and the EU corona response, and the prospect of continued slow economic growth, fraying infrastructure, and insufficient support for technological innovation in the country where one would least expect it. Reitzle helps us understand why.
Reitzle’s primary diagnosis involves the inadequacies of governance, the structural inability of the German political system to respond effectively to the needs of society. His remarks point to two different aspects. On the one hand, he gestures toward a problem of persistent underperformance; he refers directly to the city of Berlin, but his remarks have nationwide import with regard to topics such as slow digitalization, bureaucratic lethargy, and the “overregulated normalcy.” The implied solution would involve what has been labeled in the United States as a deconstruction of the administrative state. On the other hand, the particular situation of the pandemic demands, so he argues, a reduction of the diffusion of power inherent in the German federal model and therefore, by implication, a centralization of authority. That line of argument is congruent with the approach treated here previously by Thomas Brussig and discussed here. The same debate has played out in the United States, although it has been (not surprisingly) refracted through partisan loyalties: how much authority belongs to the states, how much should be mandated by Washington. Reitzle in any case does not synthesize the two sides of the problem, but his discussion suggests a model of achieving more effective governance via a smaller and therefore more efficient state apparatus. A state that does less might do it better, while the expansive state can undermine its own legitimacy.
Beyond this first raising the question of the structure of governance, Reitzle’s remarks also flag the challenge of ideology: less in the sense of a battle between competing ideologies than in the complaint that ideological commitments get in the way of appropriate policies and rational decisions. Hence his call for a “nonpartisan consensus for a nonideological new beginning” and, again, an appeal for “nonideological policies for energy and transportation.” The phrasing echoes programs for governments of technocrats or experts, such as in Mario Draghi’s Italy. Yet is a post-ideological solution plausible? Those who claim that “everything is political” would surely answer negatively. Would a nonideological government by experts even be desirable? The recent experience during the pandemic with the treatment of science as infallible has raised important questions about democracy and liberty, addressed by Ottfried Höffe and discussed here.
Yet even if one cannot embrace the program of a fully value-free, technocratic government by experts, Reitzle’s complaint still stands that excessive ideology has hindered the execution of a successful pandemic strategy and is also similarly distorting German energy and automobile policies. One example among the several he cites: reducing reliance on nonrenewable energy production in Germany is all well and good, but it is hypocritical if it depends on importing nonrenewable energy from other countries. The Nord Stream 2 pipeline from Russia comes to mind, which has been embraced by Chancellor Merkel but opposed by the German Greens, for human rights reasons as well environmentalist ones. Yet it is precisely in the Greens and the orbit around them that Reitzle takes note of an irrational lack of openness toward technological solutions in the context of ideological biases that limit political choices, e.g., their goal of banning the internal combustion engine and their hostility toward nuclear energy.
Beyond Reitzle’s criticism of bureaucracy and ideology, he reveals, not surprisingly, the perspective of a business leader. Bureaucracy and ideology are negatives because they limit the capacity to succeed in a world defined inexorably in terms of competition on multiple levels: between German car companies, between different nations within the EU, and globally, especially with the United States. His example of how France could instrumentalize EU emissions legislation to advantage its own car industry over German competitors points to intra-European conflicts (and to how material interests operate behind environmental ideology) too little understood in the United States. He also notes wistfully how Europe has simply and irreversibly failed to keep up with American big tech; maybe it can carve out some small niche in the “Internet of Things.”
It is ultimately this question of global competition that lends an interlinear urgency to Reitzle’s remarks, which have significance far beyond his pre-election political critique of Merkel or the Greens (who are sure to play a role in the next government coalition). German backwardness, compounded by the twin problems of bureaucracy and ideology, means an impaired ability to compete in an ever-tougher world driven more by software and data collection than by traditional manufacturing. “The future of the car industry will be decided in the next two or three years, as well as the question as to who loses out and turns into a box builder for software firms.” That is a threatening vision of a global division of labor: whoever leads in software will dominate whoever builds boxes, who turns into the subaltern Kistenbauer. Reitzle appears to suggest that an uncompetitive Germany may be falling into the latter role, left with the job of mounting fenders on wheels, while someone else harvests the data. Caught between the tensions of transatlantic trade, raised by Trump and sure to return under Biden, and a China ambitious to force technology transfer in order to take the global lead, Germany and Europe seem adrift. Yet the American reader should also draw the lesson from Reitzle’s comments that it can happen here too: the bureaucratic state reducing competitiveness and our cultural institutions promoting debilitating ideology.
Speaking bureaucratically, my sense (and experience) is that there is no reward within existing models of governance to improve efficiency, quality, or customer satisfaction. These objectives affect, or govern, the private sector that competes to achieve, and maintain profitability.
There is a way to change this model, I believe, which is to actually reward public service for achieving these objectives. Presently, the incentive is to grow in size, or add new programs, largely monopolies, funded by the command economics of governance, independent of competition. Rewards for improved public management, funded through savings, would, in effect, redirect public performance to seek efficiencies.
The same applies to political representatives, whose major interest is to assure that their constituents get their share of public services, even at the expense of managerial, and operational, inefficiencies. Politicians could be incentivized to seek savings as a reward for their efforts. The savings could be shared with their constituents, be it by expanding existing programs, releasing funds to pursue new social programs, even the reduction of taxes.