THE GERMAN ECONOMY Q1 2023, IN RECESSION OR NOT?
June 3, 2023 4 Comments
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June 3, 2023 4 Comments
THEPLANNINGMOTIVE.COM 
Excellent article. The main question to answer is why the German political class is pursuing policies which run contrary to the concrete interests of their own bourgeoise?
Hi David, I will reply to both your comments here. In recessionary conditions, capitalists seek to reduce their cost price. They have to if they are to restore the rate of profit. This toll is exacted by market prices being set by the most efficient producers. Currently this would be the case were it not for the US embargoing China. Instead the opposite will be the case because of multi-shoring, near shoring and reshoring which prevents best-cost solutions, undermines standardization and curtails economies of scale. In other words these are costly solutions. How costly I cannot say, I have heard the figure of $300 billion p.a. bandied about but have not come across worthwhile research. I suspect history will view this fragmentation of global supply chains in the same way it views what happened in the 1930s when import controls were implemented which delayed the return of profitability.
Turning to Germany. I suspect Chancellor Scholz and his party would prefer a more pro-business approach but having to keep his coalition intact especially the Greens who are more voluble over human rights and gungho, this is proving difficult. However in the end, I am sure that the German bourgeoisie will prevail.
Thank you for your response. On reflection the situation in Germany dears some resemblance to what happened to Japan in the mid-80″s. At the time the US imposed the Plaza Accord as well as semiconductor legislation both of which were extremely unfavourable to the Japanese bourgeoise yet there was no political force that emerged to challenge these American economic attacks. As a result Japan lost its economic preeminence and entered a period of economic stagnation from which it has yet to emerge from. I see the same process occurring in Germany and will be very surprised if a political alternative emerges from within bourgeoise political circles.I think that the fact that both countries are in effect militarily occupied by the US goes some ways in explaining this situation.
I agree with your analysis. Apple would not Apple today had Trump and Biden not temporarily crushed Huawei.