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Pragmatic Measures: The Imperial German Welfare State

Charles W. King

Today the depiction of Germany as a country and a people is inherently conservative. German restraint in foreign policy and the insistence on austerity in the wake of sovereign debt crises in Ireland, Spain, Italy, and Greece have bolstered this reputation, but it goes back much further, before Germany was a unified state. The revolutions of 1848 reached Germany last, the counter-revolutionary push back began in Germany first, and in between the character of the revolutions of 1848 in Germany were never as radical as those in Hungary, Italy, or France. Germany, the United States, and United Kingdom are the three poster children for Max Weber’s Protestant Ethic and the Spirit of Capitalism. How does this square with Germany as one of the standard bearers for the modern welfare state?

While not providing as extensive safety net as the Scandinavian countries, the welfare state in Germany is extensive. While many would be inclined to chalk this up to the prevalence of post-World War Two Social Democratic parties, similar to Sweden, Denmark, Norway, and Finland, this is incorrect. While the revolutions of 1848 may not have been as radical in pre-unification Germany, they did leave their mark. By the time of unification in the wake of the Franco-Prussian War in 1870 industrial capitalism had spread throughout Germany, and support for socialism and anarchism had increased, as had anti-clericalism among the Protestant majority. Similar to the food protests in England in the 1700s described by E. P. Thompson in The Moral Economy of the English Crowd, social unrest increased in Germany as urbanization and industrialization increased, egged on by socialists and anarchists.

Otto von Bismarck was the architect of German unification, an arch-conservative he was concerned with the increasing support for the left and the level of social upheaval in Germany in the wake of the Franco-Prussian War. He correctly discerned that the majority of the popular support for the German left was not because the general population supported or even understood the political objectives of the Communists, Socialists, or Anarchists, but these groups advocated programs like state provided medical care that directly addressed the needs of working and middle class Germans whose economic situations were precarious in the new industrial capitalist economy. Bismarck concluded that if economic precariousness was a source of political instability it was in the interest of the state to provide an economic safety net. This is why the arch-conservative German Empire was the first state to implement what we would recognize as a modern welfare state.

Part of the reason for the political instability that Bismarck and other political leaders across Europe and the United States needed to address during this period is a result of what is known as the “Paradox of Rising Expectations”. As people’s economic situations got better over the course of the 1800s they expected them to continue increasing, as wealth concentrated at the end of the century and growth slowed the increase over time in the standard of living began to slow political unrest increased. However, as Imperial Germany and other European nations demonstrate this does not always lead to revolution or democratization. Policy-makers expecting to see increasing democratization in the People’s Republic of China have recently been surprised by a reassertion of control by Xi Jingping. They would to well to remember that the paradox of rising expectations can be weathered not only with economic growth, but also with the pragmatic implementation of government programs.

The Closing Window: Lessons of Germany & Korean Unification

Charles W. King

In addition to fewer and fewer South Koreans with direct connections to the North another major reason exists for the low support for reunification among younger South Koreans: the lesson of German reunification. Officially reunified in 1990, the Federal Republic of Germany is a major driver of economic and political progress in the European Union, and possesses increasing influence on the world stage. That Germany was unified at all can be considered a great success. In the early 1990s there was resistance to German reunification in the United Kingdom, France, and Russia for precisely the same reason as why Germany was divided and occupied in 1945. European leaders were concerned that a unified Germany would once again attempt to dominate Europe. It was at American insistence that Germany was reunified and remained a member of N.A.T.O.. Since then Germany has proved to be a staunch proponent of the European project.

The significant success of German reunification—particularly on the international stage—does not mean that it has been without its issues. There remain significant differences between East and West Germany within the unified German state. In 2009 German Chancellor Angela Merkel declared that, “The process of German unity has not ended yet.” This is due in large part to the continuing economic discrepancies between the East and West. According to a report by the Berlin Institute for Population and Development in 2015, twenty one of the five hundred richest Germans live in the East, and only one of the twenty most prosperous cities is located in the former East Germany. None of the thirty largest firms on the German stock exchange are located in the East. Productivity, wages and savings are lower and fewer goods from the East are nationally or internationally significant brands. Perhaps most telling: the only two teams in the top tier of German football located in the former East Germany are Hertha BSC Berlin and RB Leipzig. The former was located in West Berlin during division, and the latter was founded in 2009 and was promoted to the Bundesliga in 2016.

While the former East Germany has grown economically since reunification in 1990, it has not yet reached the prosperity of the West. As a consequence of this the federal government of Germany continues to subsidize the east in many ways. Peer Stienbrück, the German Finance Minister from 2005 to 2009, was quoted in a 2011 interview saying, "Over a period of 20 years, German reunification has cost 2 trillion euros, or an average of 100 billion euros a year.” In the past decade is has become clear that this largess has been at the cost of other federal spending; Germany desperately needs infrastructure spending and the German military is woefully under-trained, under-equipped, and under-staffed.

The benefits and costs of German reunification are increasingly clear as we reach its thirtieth anniversary. Historians, economists, social scientists, and political scientists are producing academic studies of the project. These studies and examinations provide a glimpse into what the problems and costs of Korean reunification might look like, and every indication is that Korean reunification would be significantly more complex and costly. For this reason as well, young South Koreans are increasingly skeptical of their elders’ desire for unification with the North. As older South Koreans pass and younger ones gain political power it will become increasingly more difficult to turn armistice into unity.

Friends Like These: American Allies in Europe

Charles W. King

The United States has an extensive history of intervening in allied nations who’s democratic institutions who appear precarious, not only during the Cold War but before World War One as well. Throughout the Cold War the U.S. prized regional stability, continuity, and anti-communism over democracy and liberty throughout the Third World. In the First World it did not resort to the military or covert interventions. However, Operation Gladio trained European right-wings in Italy, France, and others in the tactics of terrorism and resistance in the event Communists won elections in Western Europe. The twentieth century demonstrates how nations have a vested interested in the tenor of the domestic politics of other nations.

An increasingly unstable European political scene is raising the question of how and if the United States should attempt to influence the domestic politics of its allies. Europe in general is turning rightward. Poland, Hungary, and other European countries are increasingly illiberal and eschewing institutions considered to be essential to healthy democracies. The rule of Law and Justice (PiS) in Poland and Viktor Orban’s Fidesz in Hungary are not the only domestic situations which American and European leaders have to consider when deciding how and where to exert influence on their neighbors. The disregard of Mariano Rajoy’s central government in Spain to Catalonia’s grievances led Catalan politicians to believe that their only resort was an unsanctioned independence referendum. The subsequent response by the Spanish government has been roundly criticized as downright fascist, drawing directly historical analogies to Franco’s dictatorship. Unlike Iran, Guatemala, Chile, or Vietnam the United States is not in a position to invade or even arrange a coup in Poland, Hungary, Spain, or any other European ally. This however does not mean that the United States cannot exert influence and should not, either overtly by explicit endorsement and critiques or through subtler measures like trade and foreign aid.

However, these center-right and right-wing governments in Europe are not the only reasons for concern for European stability. The election of President Emanuel Macron has not been the dramatic break with previous French administrations that many had hoped for, but Macron’s France is actively taking on leadership in Europe that had atrophied. However, Macron was counting on a strong ally in Angela Merkel’s Germany, and Merkel and her Christian Democrats (CDU) are currently in the midst of a flailing attempt to form a coalition government after the Social Democratic Party (SPD) their allies of the last eight years left chose not to renew their coalition after a disastrous showing in recent elections. This leaves Merkel with a raft of options that range from unlikely to unthinkable.

The expected ‘Jamaica Coalition’ of the CDU, Greens, and Free Democrats (FDP) fell apart when the FDP abruptly walked away. The parliamentary math says that the CDU could form a majority with the right-wing Alternative for Germany (AfD), but the two parties ran on diametrically opposed platforms. A new election could give AfD even more seats in the Bundestag, a first for a far right party. Europe faces a number of important issues in the coming months, issues like immigration and central banking which Germany has been an important voice in. The world can afford if the likes of Belgium or the Netherlands take months or even years to form coalition governments, it cannot afford Germany to be without a government. The United States invested considerable capital, political, military, and financial, ensuring that Germany would be a member of N.A.T.O., the European Coal and Steel Community, and eventually be reunited, and a strong and stable Germany is key to American interests in Europe. The United States can and should consider how its diplomatic and trade relationship with Germany has led to the current political climate and what it can do to ensure that Germany is the partner in Europe it needs.

A More Defensible Union: European Common Security and Defense Policy

Charles W. King

The European Union recently announced that its member states have decided to utilize Permanent Structured Cooperation (PESCO) for the first time. A feature of the Treaty of Lisbon, the founding document of the European Union, PESCO will enable greater cooperation on security and defense issues. It does not represent a wholesale conglomeration of European militaries, or even the establishment of a rapid response force under a European flag as has been repeated mooted in recent decades. It is an evolution of the existing military-to-military cooperation that has been undertaken by European defense ministries, and important innovations in their future cooperation. The integration of Dutch, Czech, and Romanian battalions into the German Army’s (Deutsches Heer) force structure will only increase, as will bilateral command sharing between Germany, the Netherlands, France, and others. The implementation of PESCO and a Coordinated Annual Review on Defense (CARD) are the most significant steps towards European collective security since the failure of the European Defense Community (EDC) in 1954.

After World War II, Western Europe had to primary defense questions; the Soviet Union and Germany. Initially, the North Atlantic Treaty Organization did not address the German Question. West Germany was not a founding member of NATO, and what a re-armed West Germany would do was an open question. The proposed solution was the European Defense Community, which would integrate the defense policies and militaries of Western Europe, a radical move towards European Federalism decades ahead of the economic union that had just been founded as the European Coal and Steel Community. Ultimately the French legislature, led by Gaullists in the Assembly, balked at ceding so much sovereignty, despite the potential resolution to the German Question. Ultimately it was West German membership in NATO that resolved the German Question and permitted both the establishment of a West German military and the continued presence in West Germany of American, French, and British forces.

While some of the individual measures of the European Union’s PESCO and Common Security and Defense Policy (CSDP) may seem trivial, they represent an effort by defense policy experts to resolve some of the major deficiencies that make it impossible for NATO to function without the United States. The 2011 intervention in Libya demonstrated that even when other nations, in this case France, were the primary conductor of air strikes they could not do so without American logistical support. The United States is the logistical backbone of NATO. It possesses the airlift and sealift capacity, the tanker and AWACS aircraft, and logistical capability and expertise not necessary or present in smaller European militaries. The creation of standardized medical training, a common Staff Officer School for the officers of European militaries, and the integration of European airlift and sealift commands under CSDP are the logistical and institutional foundation upon which future military cooperation, coordination, and integration will be built. These areas represent some of the most serious stumbling blocks to both a European defense policy that credibly projects power without American support and to an effective integrated European military. While the Presidents and Prime Ministers of Europe are a long way from announcing the total integration of European defense policy and military forces, the generals, admirals, and policy officials of Europe’s armed forces have realized their greatest shortcomings and are moving to resolve these deficiencies as effectively as they can in the current political climate.

Iberian Divorce: The Catalonian Independence Referendum

Charles W. King

Independence is in the news once again as both Catalonia and the Kurdish region of Iraq have held referendums on the subject. The prospect of an independent Kurdistan is unacceptable to the governments of Iraq, Iran, and Turkey, and already there are rumblings of a new outbreak of violence in the region if the Kurds follow through with the independence that many of them voted for. The referendum in Catalonia has already broken out in violence, as the Spanish government deployed militarized police to attempt to prevent Catalans from voting in a referendum that the Spanish Government and Supreme Court deemed illegal.

The Catalonian push for independence from Spain raises the question of why in the 21st century a relatively autonomous region of a reasonably well off and advanced economy would seek independence. Both Catalonia and Scotland, despite possessing autonomous rule, have legitimate grievances with their respective central governments in Madrid and Westminster. They contribute significantly more to the national budget than they receive in national disbursements. Despite being profitable engines of growth for their respective economies they receive little in the way of reinvestment to ensure that they remain healthy and growing. Along with the fact that they feel like their cultural differences are ignored or suppressed by central governments, it is understandable the politicians and citizens of Catalonia, like the Scotts before them, feel like they are being exploited.

Like the legal Scottish independence referendum of 2014, the prospect of Catalonian independence would grant increased political autonomy, but an uncertain future. There exists no precedent for a member of the European Union to split, and it is unclear which, if any, European institutions an independent Catalonia would be a member of, or eligible to join. If not a member of the Euro Zone, would a Catalonian state be able to issue a currency? On what terms would it trade with the European Union? The sovereign debt crises in the wake of 2008 have empowered the European Central Bank and made European finance ministers wary. It is now common knowledge that Greece cooked their books to join the Euro, and Spain may have as well. It is unlikely that a new Catalonia would be immediately allowed join all of the European institutions that Spain is party to. The effect on the Catalonian economy while the European Union investigates the new country’s books could be devastating, even more so if the result is rejection from one or more institutions.

Prosperity in the 21st century is inextricably linked to the ability to conduct international trade. Catalonian independence from Spain could scuttle the economies of both countries. The tactics deployed by the Spanish government to repress the Catalonian referendum, in the wake of years of ignoring Catalan concerns, are heavy handed but they demonstrate the concern that the Spanish government has for the consequences of losing one of its most prosperous regions.