Economic Weekly

Statesmen, Demagogues and Incumbents

  • Why it matters

    Why it matters

    The weekly column offers a rundown of the most important economic and political news in Germany and beyond.

  • Facts

    Facts

    • Last week, U.S. Treasury Secretary Steve Mnuchin torpedoed a statement in which the G20 members would have vowed to oppose all forms of protectionism.
    • The western German state of Saarland will hold elections on Sunday. This will be seen as a litmus test for upcoming federal elections in September.
    • The firey politics of chancellor candidate Martin Schulz, leader of the Social Democrats and former chair of the European Parliament, has boosted the SPD in recent polls, putting the party ahead of Ms. Merkel’s Christian Democratic Union.
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    Audio

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G20 Finanzministertreffen
U.S. Treasury Secretary Steven Mnuchin at the G20 meeting in Baden-Baden. Photo: Uwe Anspach/DPA [M]

During the G20 summit last weekend in Baden-Baden, U.S. Treasury Secretary Steven Mnuchin prevented the traditional statement of commitment to regulated free trade from being included in the final communiqué of the group’s finance ministers and federal bank chiefs.

But aside from this rather irritating tidbit, the rest of the week was relatively quiet in terms of business news – though it was packed with political headlines. Angela Merkel’s inaugural visit to Washington one week ago reconfirmed widespread suspicions of U.S. President Donald Trump’s general ignorance and rudeness, as well as his particular inexperience regarding foreign and economic policy. What was new, however, was the president’s apparent deafness, revealed to the world after he claimed not have heard Ms. Merkel’s offer to shake hands during the photo op. This left the German chancellor looking somewhat perplexed. But the world continued to turn.

Back across the pond, Martin Schulz continued his meteoric political rise after receiving 100 percent of delegate votes to become the leader and chancellor candidate of Germany’s Social Democratic Party, the SPD. It appears that the popularity of social democracy, known slangily as the “comrade trend” during the explosion of its popularity in Germany between the 50s and the 70s, is back. Big time.

Indeed, Mr. Schulz is the SPD’s first real chance in 10 years of regaining control of the chancellery. Of course, this doesn’t change the fact that the SPD is still part of the incumbent ruling coalition together with the Christian Democrats, or CDU, and its Bavarian sister party the Christian Social Union (CSU). Which makes the announcement that Mr. Schulz won’t be attending the next committee meeting of the coalition on March 29 understandable, but still an odd move. Instead, he has made public his plans to attend a party thrown by the SPD’s parliamentary faction. Which is a strange excuse, considering Mr. Schulz isn’t even a member of the German parliament.

On account of Mr. Schulz’s candidacy and the resulting surge in the SPD’s poll numbers, regional elections in Germany’s smallest state, Saarland, have now become relevant on the national stage. Until recently, it appeared all but a done deal that the smooth operating CDU governor of Saarland, Annegret Kramp-Karrenbauer – aka AKK – would win. Now things aren’t so clear. This is why the vote in Saarland is widely viewed as a litmus test for the upcoming federal elections in September, and the power of the “Schulz Effect”.  A loss in Saarland could surely take some of the wind out of the SPD’s sails.

A loss in Saarland could surely take some of the wind out of the SPD’s sails.

As the American author and journalist Margaret Mitchell once said, “Until you’ve lost your reputation, you never realize what a burden it was – or what freedom really is.” Donald Trump must have had similar thoughts on Monday when FBI chief James Comey, speaking at a hearing of the House intelligence committee, said there was no indication that former U.S. president Barack Obama had ever wiretapped Mr. Trump during the 2016 election. Mr. Comey also emphasized that no U.S. president would have even had the power to wiretap a candidate’s phone.

Accordingly, Thursday’s announcement by House Intelligence Committee Chairman Devin Nunes that communications by Mr. Trump and associates may have been picked up after the election by intelligence agencies conducting surveillance of foreign targets in no way contradicted Mr. Comey’s statement. And Mr. Comey’s announcement regarding the FBI’s ongoing investigation into possible contact between Russia and the members of the Trump campaign proved no less damaging to Mr. Trump’s already-tarnished reputation.

And finally, news from the world of business: Since 1986, the annual Hannover-based computer expo has been the world’s largest trade fair of its kind, though in the past few years, interest has been waning. This year however, following the opening by Chancellor Merkel and Japanese Prime Minister Shinzo Abe, the fair took on a different focus – and with it, a new energy.

Move over A.I., Big Data, the Internet of Things and Cloud Computing: this year’s CeBIT was all about the myriad examples of how digital technology has already made our lives easier and better. Accordingly, it was fitting that Prime Minister Abe’s address delved into his “Society 5.0” plan to preemptively confront the problems posed by Japan’s rapidly-aging society.

Speaking of growing old: 30 years ago, the Cologne-based economists, Guy Kirsch und Klaus Mackscheidt published their seminal work “Statesman, Demagogue, Incumbent: A Psychological Addition to the Economic Theory of Politics.” In it, they establish a series of political types according to characteristic strategies of gaining power. In a slight modification to their approach, I recognize a fourth category of power-seeker on top of the demagogue, statesman, incumbent: the charismatic leader.

Of course, no politician fits perfectly into any single category. But every man, woman or child who has ever fought to win votes in a democracy has applied these strategies. I have been applying this theory to both charismatic Social Democratic chancellor candidate Martin Schulz and incumbent Angela Merkel in an attempt to figure out who has the better chances of winning the upcoming federal election in September.

In our in-depth analysis pick for this week, we offer an exclusive essay penned by none other than Telekom CEO Timotheus Höttges. In “Digitization, a Matter of the Heart”, Mr. Höttges makes the case for taking a more optimistic approach to digital technology. Digitization should not be seen as a threat but rather an opportunity to improve our approach to dealing with old problems, he argues.

Surely, readers won’t agree with every point or follow every line of reasoning, But the essay successfully distinguishes itself from the everyday screeds of praise for technological progress or prognoses of digital downfall. Instead, it offers a new and important perspective.

 

To contact the author: ruerup@handelsblatt.com 

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