compulsory reading

Stuck in the middle.

It’s a shame so few people outside the busines community have heard of Michael Porter and his concept of strategic analysis of business environments.

Last year, around this time, Germany was in shock. Not because of some strange election outcome or because I had moved back here but because of the poor results German students had obtained in the OECD Programme for International Student Assessment. After the initial shock had faded a little, the results again surged to public prominence as one of the crucial issues in the elections last September. So after the elections are finally over, one would hope some people would start to concentrate on facts rather than on words. But the OECD is reckless.

Today it published yet another report thus time bashing the German educational landscape for its alleged financial inadequacy and inefficiency. Browsing through the executive summary of the results (in German), I had to realise that the report appears to based to a large extent on the older PISA data. The information concerning the comparatively small amount of money spent on tertiary education is also hardly new.

So why this entry? And why would I mention a professor of business strategy while talking about educational policy, a field in which, certainly in the German case, decision making can, if at all, be described as a garbage can process.

Well, it’s because this new report compelled me to share my understanding of the PISA results and because Prof. Porter has come up the concept of U-curve rentabiliy on investment. He is, of course, referring to a U-shaped relation between two generic business strategies that could lead to a favorable strategic position in the competitive environment and their return on investment – leadership in either cost and volume or in quality and price. Companies which are not successful in pursuing either of these strategies are, according to M. Porter, stuck in the middle and will have to accept a lower return on investment.

Now I know that it might seem a little far-fetched to some, but I contend that Germany is currently stuck in the middle. Not because the German polity can not decide between mass market or quality production, of course. But I believe firmly that many of the current problems in Germany have arisen because of a failure two choose between two, equally successful, but socially opposed ways of organising the educational environment. I will describe those two alternatives as “Scandinavian” on the one hand, and “Japanese” on the other, the first being extremelly socially open, market oriented (please note that I use the term market here to denote the inclusion of transactions in the social division of labour) and one rather closed, hierarchical, family oriented. Again, both models seem to be successful. But those who can’t decide between them aren’t.

Now, looking at Germany, we see a somewhat divided country. The more “Scandinavian” oriented Northern regions and the more “Japanese”-style educational (and social) systems of the South. But in fact, both are in-between.

Well, as the divison of labour is increasing the I believe that this country’s long term shift to the Scandinavian model will continue. That theory however, does not bode well for Bavaria, which features the most Japanese-style educational system in Germany and is still the national number one. But it offers a ray of hope for those regions which currently fare less well but are already somewhat further “North”.

We’ll see.

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German Politics, Germany, Iraq, Political Theory, US Politics, USA

A deeper rift? Some context…

Firstly, a noteworthy article by Robert Kagan concerning the fundamental policy-style differences between Europe and the US, published in May in the Washington Post.

Secondly, The Economist’s analysis of these differences. Thirdly, a paper called “Mutual Perceptions” by Peter Rudolf of the German Institute for Foreign and Strategic Policy (Stiftung Wissenschaft und Politik (SWP), Berlin), presented at a conference of the American Institute for Contemporary German Studies on Sept. 10, 2002.

Some key quotes from the latter :

“The American and the European publics, including the German public are also not so far apart in their view of the world. They do not live on different planets, the one on Mars, the other on Venus, as Robert Kagan`s now famous dictum says. Looking at the collective preferences on both sides of the Atlantic, we are no way drifting apart. In their majority, Americans and Europeans do share a positive view of international institutions, Americans are more multilateral than unilateral oriented; Europeans, even Germans, are by far less opposed to the use of military force, although they are inclined to support it for humanitarian purpose and for upholding international law. Although the use of military means for combating terrorism finds support among a majority of people across Europe, the preferred measures to combat terrorism lie – to a greater extent than among Americans – in the economic realm: in helping poor countries to develop their economies. Thus, Americans and Germans do not live on different planets but those neoconservatives do, those – to quote former President Carter – “belligerent and divisive voices” now seemingly dominant in Washington, those whose vision of America`s role in the world implies a basic strategic reorientation of American foreign policy. Using the dramatically increased perception of vulnerability to asymmetric threats and instrumentalizing the “war on terror” as the legitimizing principle, the hegemonic – or better: the imperial – wing of the conservative foreign policy elite effectively dominated the political discourse and left its imprint on a series of decisions..” (p. 2)

“Should the neoconservatives succeed in turning the United States into a crusader state waging so-called preventive wars, German-American relations will head to further estrangement. If the current debate on Iraq is indicative of things to come, the expectation of American neoconservatives that their European allies will in the end jump on the bandwagon might be disappointed, at least in the German case. In their despise of their irrelevant amoral European allies and in their overconfidence in American hard power resources, they simply ignore the value dimension of the current transatlantic conflicts. It is a conflict about different visions of world order.” (p. 6)

Lastly, for those who can read German, another SWP study – “Preventive war as solution? The USA and Iraq.” For those who don’t read German, the footnotes are a remarkable collection of mostly English language documents concerning the intra-US-administrative discussion as well as the international one. I’ll probably post some key references later.

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almost a diary

Off the phone. Off the market.

I just talked to a friend who is also suffering from the current anemia of the labour market.

These days, the streets are plastered with highly qualified graduates and post-graduates from the world’s best universities. As the Frankfurter Allgemeine Sonntagszeitung remarked two weeks ago the European elite is currently given the boot by the very same companies that bid up starting salaries to unprecedented amounts during the talent wars of the late nineties. So what goes up must come down? Maybe. Maybe it all does make sense. But we don’t care at the moment.

Isn’t it plainly unfair to have people spend years on their building outstanding CVs and then release them into a sluggish economy? Yes it is. But there you go. I know that markets are marvel and we all benefit from the way they work. They are not supposed to be fair to do their job. But that’s precisely why they do need a bashing from time to time, however unjustified it may be.

And if not now, when? I think I am going to help my fellow victims and go back to do my phd now. Hopefully I’ll finish it right on time for the next talent war…

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Economics, German Politics

Do it the German way, if you have to. But do it.

Gerhard SchröderThe Social Democrats (SPD) seem somewhat desperate these days. With the general elections looming in only 48 days and the SPD still trailing the Christian Democrats (CDU) by about five cruicial points, Chancellor Schroeder kicked off the ‘official’ SPD campaign in Hannover saying that his government would contine to conduct business, that is economic policy, “the German way” – as opposed to the American way of social security, of course.

While campaigns are not usually a good opportunity for serious policy analysis, this statement is actually interesting, because it demonstrates to which extent this government is at loss about its economic policy. A few weeks ago, the chancellor tried to gain points among the reformist voters who helped him into office back in 1998 by proposing to pursue the implementation of the proposals of a working group (the “Hartz-commission”) under the direction of a member of the VW-board.

These proposals include serious supply side changes to the incentive structure of the German labour market regulations. The deal he tried to cut was – back me again and I’ll be in a better position to keep the Unions in check than a conservative-liberal coalition so I could actually implement the plan.

While this calculation may be right if – and it certainly looks as if – Schroeder himself is the only argument that could keep the SPD in office, many voters seem to have lost their faith in his ability to deliver. After all, they signed precisely that deal in 1998 and the only changes the SPD made to labour market regulation, even after the departure of my-heart-beats-on-the-left finance minister Oskar Lafontaine, made it even more rigid than before.

So it seems the SPD campaigners now believe that they will have to rely more on the votes of the traditional social democratic core than they thought and thus start a campaign to defend “the German way” – the corporatist rhenish capitalism – of organising the economy. Not helpful, you might say and you could be right.

But I still believe in Schroeders deal. Especially if the SPD has to cut a deal with the Liberals after the election instead of the Greens whose very knowledgeable spokesperson for budgetary and economic matters, Oswald Metzger, will not return to the Bundestag due to plainly stupid electoral regulations, once conceived to promote the role of women in the Green party.

So I fear in a coalition with a technically neoliberal chancellor they might try to appeal to leftist tradiationalists and slow down necessary reforms. I would certainly miss Joschka Fischer and will dearly deplore the lack of social progressiveness in the FDP but as things stand today I figure a coalition of SPD and FDP will be the best deal this country can get.

So if Schroeder has to praise “the German way” to be reelected, be it. In any case, I would advise you not to listen too closely to any politician over the next 48 days, it’s campaign time. If you’re campaigning yourself, you’re a journalist or you’re into advertising, you might have have fun.

All others – try to spend the rest of the summer abroad.

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Sport

I really hope she has not taken anything.

About an hour ago I watched the sports news. “Franzi is dead, long live Franziska” was today’s leitmotif. “Franzi”, or Franziska van Almsick, is a German heroine – hailing from east Berlin, she became the first common wunderkind after Germany’s reunification when she, then just fourteen years old, won four medals in the 1992 Olympic swimming competition.

She rose to the stars too quickly, far too early. And so she fell fast and deeply a few years later when she tried to cash in her early fame. Those were the days when she was seen on magazine covers and at fancy parties more often than in the swimming pool. Sydney 2000 therefor became the opposite of Barcelona ’92.

Most people thought her career was over. Another wunderkind who wasn’t able to keep up with the pressures of early success. But the humiliations of losing, ridicule and the subsequent media massacre apparently awakened the Phoenix in herself. And so she spread her wings, jumped back into the poola and began to swim. And now, after two years and a few million lanes she is back where she was once before – today she beat her own world record from 8 years ago.

But with the wisdom of years she had to pay for so dearly today’s success must have been much sweeter. And judging from the pictures of her tears after the race she must have felt the same way.

I really hope she hasn’t taken anything. If she has, her downfall will be faster and deeper than the first – and it will be permanent. If not, she will become a national icon for good. Let’s hope she’s our Lance.

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