Almost unnoticed by the media, an important part of the medieval remnants of German corporatism was silently buried by the Federal cabinet today.

The ‘Meisterprivileg’ – master privilege – effectively keeping people from opening businesses in a lot of markets – mostly those with medieval guild-predecessors – by handing over the right to grant the permission to do so to the “guilds” of those who already own one. It certainly kept the returns high for those who were in the business and thus it was not too surprising to hear them scream today that increased competition will cost employment.

In the short run, this is a possible scenario. In the medium run, this reform is a major step to help create the sort of entrepreneurial environment this country needs so badly, especially in conjunction with the small business tax simplifications about to be implemented. Go Gerhard, go!