Yet experience in this case speaks quite clearly against the idea that “painful” reforms help. As our Reality Check shows on the basis of the current state of research, people are more likely to vote for populists whenever they are affected by cuts and restrictions that are more or less poorly justified—especially if they are already suffering from the consequences of economic ruptures. That was the case with Brexit. And the combination maps the situation in Saxony-Anhalt quite clearly: no other federal state is so deeply marked by upheaval. Add to that the incessant drumbeat of cutting and restricting for more than a year now. Not everyone understands why they are supposed to tighten their belts (even further) now. No wonder, really, that this is precisely where the AfD is seeing the biggest gains.
What to do? That does not mean calling for an immediate halt to all reforms. It is just reckless, on the basis of what we know, to blithely demand still more reform now—as Deutsche Bank CEO Christian Sewing does—when some reforms quite obviously contribute to destabilising the republic even further in the end. Then it is essential to factor in such a socio-political risk, instead of arguing in a more or less shaky, narrowly economic way. It is then worth taking a much closer look at what a reform actually delivers and how urgent it really is right now.
In short: every reform should be checked in advance to see whether it contributes (even more) to the politically dangerous, escalating public resentment—and whether that is proportionate to the potentially hoped-for positive effects.
It created enormous resentment among enormous numbers of Merz-style hard-working people to want sick notes from day one—without even remotely promising a fraction of a percentage point of economic growth. Something similar applies to pensions. Sure, adjustments are needed here. But: is it ultimately helpful to want to abolish the pension at 63—which tends to have a negative effect and angers many who have worked for a long time—instead of creating positive incentives for people to work longer voluntarily, if they can?
Systematically checking everything the government is planning for its anger-amplifying potential could help avoid further fuelling the populists’ upward trend. So could a much more forceful push against inflation spikes, which also clearly increase resentment—even if that does not align, in terms of regulatory policy, with the pure doctrine. Here, too, trade-offs are required.
That still is not the full answer. The phenomenon of populists and authoritarians runs too deep—for beyond Germany’s borders. But it would be a start.
About all of this—the consequences of inflation—and the search that has begun for the deeper causesand answers, Martin Kaelble and I talk in the second episode of our new podcast, New Economy Sounds. Available now on the usual channels—for example here.
Picture credit: (c) Niklas Treppner/dpa