The next elections to the German Bundestag have been moved up to autumn 2021. At that moment, Angela Merkel will have served as chancellor for 16 years. As opposed to Helmut Kohl in the 1990s, she does not seek re-election. Nevertheless, her tenure – which has been extraordinarily long for a head of government in a Western democracy – justifies some thoughts about the pros and cons of changing political leaders at regular intervals.
N26, Celonis and Biontech are the most recent success stories of the German start-up scene. All three enterprises have collected higher sums of venture capital in the past year. As good as this news may be, however, the overall picture of the German venture capital scene is rather problematic. Young German enterprises receive comparatively little risk capital.
Climate scientists warn against the possible consequences of anthropogenic climate change. Rising average temperatures make extreme weather, including draughts and floods, more likely; rising sea levels threaten populations in coastal regions. An international political agreement was to limit global warming to an average of 2°C until 2100; this was tightened to 1.5°C at the Climate Change Conference in Paris. It is questionable, however, whether the climate targets will be met. Considering today’s prospects, it is about time to not only cut emissions but to also discuss ways of dealing with the consequences of climate change.
Beyond emissions trading systems, markets play an important role in this regard: they can make it significantly easier to adapt to climate change. Price signals hint at necessary adjustments, international trade opportunities make changes in production structures less painful, developed financial markets help handling risk. Moreover, market economies promote prosperity, which facilitates the use of resources and technology in an effort to cope with the effects of climate change.
The recently updated European Markets in Financial Instruments Directive, commonly abbreviated as MiFID II, is supposed to enhance consumers’ protection. Adjustments of regulatory background questions aside, the EU aims to improve “protection of investors by prohibiting the acceptance of commissions, protecting independent consulting, introducing new regulations regarding product monitoring”. This intention seems laudable, especially given the presence of some black sheep among investment advisors. However, a well-meaning policy is not necessarily also good for consumers. While the providers of financial services now legally safeguard themselves using elaborate documentation, clients do not necessarily receive better guidance. In fact, extensive documentation could possibly scare customers off.
In the 2000s, a short book by philosopher Harry Frankfurt made the term ‘bullshit’ socially acceptable. In 2018, anthropologist David Graeber published his bestseller, in which he argued that roughly half of the employment relations in the Western economies are ‘bullshit jobs’: they provide no benefits to society and their purpose remains unclear even to those employed. Graeber’s hypothesis received much praise. After all, it addresses widely spread stereotypes about the alleged uselessness of well-payed jobs in the service sector, for example in marketing, management or consulting.
Summer is not only the season of swimming trunks and barbecues, but also of vociferous politicians. One of the warhorses of this year’s silly season are bans. Whether it is plastic cutlery, oil heating or domestic flights, calls for bans are becoming louder across the political spectrum. Bans, however, are usually not the best way to deal with negative externalities. Politicians can find calling for bans attractive regardless, provided the requested prohibitions match the preferences of their voters, or signal serious engagement. Moreover, by resorting to extreme positions policymakers try to expand their power and authority. Yet, although the demand for bans is frequently used as an instrument to gain votes, we maintain that the state should actually use them only on rare occasions.
Germany’s labour market is buzzing. The unemployment rate is currently close to 5%. Although the business cycle could cool down in the near future, the trend is not expected to reverse course in the coming years. In the long run, however, pessimism dominates. As automation intensifies, many observers expect an era of mass unemployment in which only highly-qualified skilled workers will have a regular employment contract. At the same time, baby boomers will retire, and the decreasing labour force might lead to a skilled labour shortage, lower growth rates and an overburdened welfare state.
Yet, empirical findings and theoretical arguments suggest that there will be neither mass unemployment, nor a dramatic skilled labour shortage. Moreover, these two problems will certainly not emerge together. Rather, the decrease in labour demand due to automation will be manageable, and partly absorbed by the simultaneously drop in the labour force. By contrast, increasing income inequality is more likely to become a key isuue.
Over the last few decades, our living standards have improved significantly. Today, cars are technologically sophisticated, apartments are comfortable, and pharmaceuticals are safer. The working of the markets has enhanced…
German chancellor Angela Merkel recently expressed concerns over Germany’s and Europe’s technological competitiveness. Others voiced doubts about Germany’s tech future, too. One of the reasons mentioned more frequently to justify…
CO2 emission limits and targets are currently all over the news. For example, the European Union is gradually strengthening the environmental standards for new vehicles, with a view to reducing…