Can Germany Be Saved?
What has happened to the German economic miracle? Rebuilding from the rubble and ruin of two world wars, Germany in the second half of the twentieth century recaptured its economic strength. High-quality German-made products ranging from precision tools to automobiles again conquered world markets, and the country experienced stratospheric growth and virtually full employment. Germany (or West Germany, until 1989) returned to its position as the economic powerhouse of Europe and became the world's third-largest economy after the United States and Japan. But in recent years growth has slowed, unemployment has soared, and the economic unification of eastern and western Germany has been mishandled. Europe's largest economy is now outperformed by many of its European neighbors in per capita terms. In Can Germany Be Saved?, Hans-Werner Sinn, one of Germany's leading economists, takes a frank look at his country’s economic problems and proposes welfare- and tax-reform measures aimed at returning Germany to its former vigor and vitality.
Germany invented the welfare state in the 1880s when Bismarck introduced government-funded health insurance, disability insurance, and pensions; the German system became a model for other industrialized countries. But, Sinn argues, today's German welfare state has incurred immense fiscal costs and destroyed economic incentives. Unemployment has become so lucrative that the private sector, already under pressure from international low-wage competitors, has increasing difficulties in paying sufficiently attractive wages.
Sinn traces many of his country's economic problems to an increasingly intractable conflict between Germany’s welfare state and the forces of globalization. Can Germany Be Saved? (an updated English-language version of a German bestseller) asks the hard questions—about unions, welfare payments, tax rates, the aging population, and immigration—that all advanced economies need to ask. Its answers, and its call for a radical rethinking of the welfare state, should stir debate and discussion everywhere.
About the Author
Hans-Werner Sinn is Professor of Economics and Public Finance at the University of Munich and President of the CESIfo Group. Author of Can Germany Be Saved? The Malaise of the World’s First Welfare State (MIT Press) and other books, he is former president of the International Institute of Public Finance, and former chairman of the German Economic Association.
—Edmund S. Phelps, McVickar Professor of Political Economy and Director, Center on Capitalism and Society, Columbia University, and Nobel Laureate in Economic Sciences (2006)
—Hans-Olaf Henkel, Bank of America (former President of the Leibniz Association and former President of the Federation of German Industries)
—Henrich von Pierer, former Chairman of the Supervisory Board, Siemens AG
—Dieter Rampl, Chairman of the Board of Directors, UniCredit Group
Winner of the 2003 getAbstract/Financial Times Germany Business Book Award.
Winner of the 2003 Financial Times Deutschland Award for the best economics book dealing with reforms.