Equal measures

Germany, a global leader in addressing inequality

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But some are always more equal than others. Source: Imago

This year’s Oxfam listing of 157 countries in terms of reducing inequality put Germany almost at the top, second only to Denmark.

The ranking doesn’t measure inequality, but what governments do to address it. It lists countries by the level of minimum wage and how this affects income equality. Western European countries fill the top 10 spots thanks to their high welfare standards and efficient tax systems. These, along with Berlin’s expenditure on health and education, and progressive taxation, and rights for workers, boosted Germany right to the top, matched only by Austria and the Danish.

The fact that internationally, Germany is viewed as a paragon in terms of addressing inequality may surprise many at home. There is great and growing concern in the country about the state of democracy, the inequality of opportunity between the former East and West Germany, and about the poorer areas of the west.

The Alternative for Germany, a party of the populist far right, is building a following based on such perceptions and misperceptions. The party, which morphed from a clutch of business professors to a self-proclaimed populist group, is trying to strengthen its appeal with notions of “social justice” and an ethno-socialism based on the idea that migrants and refugees are taking opportunities from Germans. Politicians repudiate these claims, but the AfD’s growing strength ahead of this month’s regional elections in Hesse and Bavaria suggests those ideas have gained traction.

Fear and loathing on the right

Most recently, the justice minister, Katarina Barley, expressed concern about the state of democracy in the country, saying talk of asylum tourists was irresponsible and unthinkable a few years ago. She said the AfD lived from anger, fear and resentment, and that the AfD’s social model was based on irresponsibility. “The party doesn’t want people to be happy.”

Her statements follow renewed reflection on the difficulties of reunification and the persistence of an east-west divide. There is also continuing debate about whether or not to ditch the “soli,” the solidarity tax introduced after reunification to cover infrastructural deficits in the former east.

German media noted that Oxfam, and Development Finance International, also identified room where Germany could do better, for instance, by addressing bracket creep in taxation and inequality of wealth. Ellen Ehmke, an analyst at Oxfam, said Germany could improve the way it finances education.

But definitions of equality differ, from equality of opportunity to the possibility of economic growth and success. Nissam Taleb, a scholar and former risk analyst, said that many assessments of inequality compare people at different life stages, which is a mistake. “True equality is equality in probability,” he argued, favoring a more dynamic equality. Further, he noted that much of the cause of inequality is randomness and that such inequality is inevitable.

Another approach to assessing Berlin’s equality efforts came from a Germany-based expat artist from the UK, who commented Germany is much more equal compared to Scandinavian countries. “Think of the refugees and how open they are here. The Danes only care about you if you’re Danish.”

Albert Funk covers economics for Tagesspiegel, a Handelsblatt sister publication. Allison Williams is deputy editor of Handelsblatt Global. To contact the authors: williams@handelsblatt.com

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