Le Monde has a slightly more interesting comment in their week-end edition, pointing out, in the same line, that Germany is doing the reforms that France is not, but also underlining that Germany's specialisation in high-end, technology rich, less price sensitive puts it in a much better position to face world competition.
what I would like to flag is the point that "labor is a small part of costs", which is an important insight, which means that if we do transport or organisation or distribution or marketing better than the Chinese, we will still be competitive because labor costs are only a small part of competitivity, and thus cheaper labor changes little in the overall cost of complex products. The lesson: focus on complex products that require more than just cheap labor, and then you WILL be competitive, and you CAN pay people well.
Why on earth would we want to keep the back breaking jobs in textile if we can have people do much more interesting and rewarding things. What we need most of all are social policies to accompany, help, and if appropriate retrain the people that did these jobs in our countries so that they do not may alone the price of technical evolution and globalisation. They are freed to do something else, and we must help them to do so. In the long run, we're all dead. John Maynard Keynes
I agree. Germany, and for that matter any future oriented nation, should focus at high-end technology rich enterprises. The future is in genetic engineering, molecular biology, biotech, space exploration, internet, information technologies, etc., not in cattle, textile, construction.
We are in an information age, not in the industrial or agricultural age.
2. we do transport or organisation or distribution or marketing better than the Chinese, we will still be competitive
I disagree, in part. The operative word is "we." Chinese can always hire or partner with "us" or a German company to do the marketing, transport, organization, distribution.
Yet, you are right, because all of the above deals with information.
3. Germany is # 19 in the latest Economic Freedom Rating by Cato Institute (for the year 2003).
And must move up, if it intends to be competitive in the future.
4. Sadly, nobody in Germany (and only a few in the USA) is talking about abolishing the income tax .
You can't punish success and expect more success.
