Social Market Economy

The Dark Side of Capitalism

Demonstranten protestieren am Sonntag (16.10.2011) vor dem Reichstagsgebäude in Berlin. Nach einer Demonstration gegen das globale Finanzsystem blieben viele Menschen am Vortag vor dem Bundestag. Die Polizei räumte den Platz in der Nacht. Foto: Hannibal dpa/lbn [ Rechtehinweis: Verwendung weltweit, usage worldwide ]
Protestors in front of the Reichstag in Berlin.
  • Why it matters

    Why it matters

    Capitalism faces a fundamental dilemma: the unethical practices of those who have risen to the top of the market economy are inflicting more damage on the system than the biggest anti-capitalists ever could have imagined.

  • Facts


    • The Panama Papers leak, and soaring executive pay at companies where ordinary workers are losing their jobs, are convincing the public that capitalism is broken.
    • The bosses of blue-chip DAX-listed companies today earn, on average, 54-times more than their employees.
    • According to a survey by public broadcaster ARD, 77 percent of Germans believe the social market model has been corrupted to the extent that it now makes “the rich richer and the poor poorer.”
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On the eve of the Detroit Auto Show in January, Volkswagen’s new chief executive, Matthias Müller, appeared to embody all that is wrong with capitalism today.

It was Mr. Müller’s first trip in the United States since U.S. environmental watchdogs accused the carmaker of cheating emissions standards with sophisticated software installed in around half-a-million diesel vehicles.

Americans felt deeply betrayed. They expected the head of Volkswagen to show humility, shame and regret for the carmaker’s transgressions.

But such expectations were soon quashed. Addressing several hundred journalists at Fishbone’s restaurant, Mr. Müller, the 62-year-old chief executive delivered a long, dispassionate, detached statement in choppy English. Although the word “sorry” was uttered, this was anything but a sincere apology.

Read stoically from a piece of paper, while tenaciously avoiding eye contact, Mr. Müller’s monologue seemed more like a lecture from some tired pedant.

Surrounded by reporters after his prepared remarks, the boss of Europe’s mightiest industrial company then really put his foot in his mouth.

Responding to a question from a correspondent at U.S. broadcaster National Pubic Radio about how the carmaker could change the perception that VW had “an ethical problem that’s deep inside the company,” a visibly irritated Mr. Müller countered, “I cannot understand why you say that.”

Rather than conceding Volkswagen’s deception, the chief executive claimed, “We didn’t lie.”

As surprising as it was, Mr. Müller’s performance apparently was no aberration from VW’s code of ethics for executives. Just the opposite: It appears to have been a reflection of their ongoing audacity.

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