mittelstand

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pages: 669 words: 150,886

Behind the Berlin Wall: East Germany and the Frontiers of Power by Patrick Major

anti-communist, Berlin Wall, centre right, falling living standards, land reform, Mikhail Gorbachev, mittelstand, open borders, Panopticon Jeremy Bentham, post-materialism, refrigerator car, rising living standards, Ronald Reagan, Sinatra Doctrine

According to the Volkspolizei, the number of Großbauern leaving in February 1953 was ten times that of the previous September. Yet significant numbers of smallholding ‘new farmers’, beneficiaries of the 1945 land reform, were also heading west.⁴⁴ The Mittelstand felt next in line. Artisans, businessmen, and factory owners left in massive numbers in 1953, following the introduction of Manual Production Collectives. Significantly, neither farmers nor the Mittelstand were natural candidates for flight. Farmers were tied to the land, and the commercial sector to its businesses.⁴⁵ Members of the ‘old’ Mittelstand of artisans and shopkeepers knew there was little call for them in the West, so it was all the more remarkable when these groups departed. When they did, there were sometimes symbolic burnings of bridges, such as the smashing of glasshouses by market gardeners.⁴⁶ Overall, 1953 witnessed massive losses across the board and was a truly exceptional year.

This would support Hirschman’s thesis that areas with greatest potential to exit the GDR were least likely to voice complaint. Yet, as the GDR aged and the outlet to the West was closed, this pattern switched. By 1970 Berlin had reached pole position, at 0.66 per cent, followed by Potsdam at 0.41 per cent, a pattern repeated with minor changes ten years later in 1980. BAB, DA-5/5999. 20 Behind the Berlin Wall intelligentsia, the Mittelstand , and women of all classes, than it was for other groups.¹⁰⁴ Furthermore, the special status of travel petitions is revealed by the fact that from the 1970s the security section of the SED’s Central Committee, in conjunction with the MfS, became the arbiter on travel and emigration. Indeed, the vast majority of its surviving files consist of alphabetized special pleading by citizens to travel west.

Since the abandonment of reunification in favour of ‘peaceful coexistence’ in 1955, however, the communists felt more vulnerable, especially when the Adenauer government paid its own lip service to reunification efforts after 1958. As long as the German question remained open, uncommitted East Germans might harbour hopes that the socioeconomic clock could be turned back. The SED’s Party Information labelled this the ‘it-could-turn-out-different’ attitude, a form of domestic Hallstein doctrine ascribed to wide sections of the rural population, the Mittelstand and intelligentsia. Pre-emptively, therefore, the party would follow each diplomatic initiative with a barrage of media coverage, and its agitators engaged the population in ‘discussions’, at the workplace or on the doorstep, often based on readings of the current diplomatic notes. Invariably, a party spokesperson was on hand to give the official view. The archives are full of foreign policy opinion reports.


pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

Affordable Care Act / Obamacare, asset-backed security, bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, buy and hold, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, corporate governance, Credit Default Swap, cross-subsidies, dematerialisation, disruptive innovation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial innovation, financial intermediation, financial thriller, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, income inequality, index fund, inflation targeting, information asymmetry, intangible asset, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, John Meriwether, light touch regulation, London Whale, Long Term Capital Management, loose coupling, low cost airline, low cost carrier, M-Pesa, market design, millennium bug, mittelstand, money market fund, moral hazard, mortgage debt, Myron Scholes, NetJets, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, Paul Samuelson, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, regulatory arbitrage, Renaissance Technologies, rent control, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, Schrödinger's Cat, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, Washington Consensus, We are the 99%, Yom Kippur War

These firms generally operate in sectors where customers attach much greater significance to quality than to price. Although there are niche producers such as these in the USA, Italy and Japan, two-thirds of the ‘hidden champions’ come from Germany and the German-speaking areas of Switzerland and Austria. These ‘hidden champions’ are the stars of the Mittelstand, the small and medium-size companies that are the basis of Germany’s extraordinary strength in manufacturing exports. German exports per head are four times those of the USA and more than ten times those of China. The businesses of the Mittelstand are predominantly family-owned. ‘Hidden champions’ have little need of external capital – like quoted companies, they typically generate more than sufficient cash for their investment needs from their internal resources. But all businesses were once start-ups, and in need of early-stage finance.

Oliver Samwer, CEO of Berlin-based Rocket Internet, which both incubates and funds emerging-market technology start-ups, identifies the essential difference between SME activity in the USA and Germany: ‘there are pioneering entrepreneurs and execution entrepreneurs, and maybe we belong more to the execution entrepreneurs’.15 The Mittelstand has shown little interest in being brought to public markets. The normal pattern has been one of continued family ownership, with founders and their families being succeeded by professional management, a structure that fits with the German division between supervisory and executive board. This pattern extends even to larger companies. BMW exists today because Herbert Quandt, a major hereditary shareholder, decided in 1959 to reject the absorption of the failing business into Mercedes and give new management authority to revamp its product range. The reclusive family, and their Quandt Foundation, profited by billions of euros. As noted in Chapter 1, a consequence of this concentrated ownership and governance structure, and of the success of family-controlled Mittelstand companies, is that Germany has a less egalitarian income and wealth distribution than other continental European countries.

As Fig. 2 shows, by 1970 the share of the top 1 per cent had fallen by around half, and the share of the top 0.1 per cent had diminished even more sharply. Since these figures relate to gross income, and benefits and top rates of taxation increased everywhere, the equalising effect was even greater than these figures suggest. Many people may be surprised that Germany in 1970 was significantly less equal than Britain, France or the USA. The main explanation is the success of that country’s largely family-owned Mittelstand, or medium-size business sector, which I will discuss further in Chapter 5. The egalitarian trends did not continue. In France and Germany they simply came to an end; these measures of income inequality have not changed since 1970. In Britain and the USA incomes of the top 1 per cent and 0.1 per cent have increased sharply. The reversal is particularly marked in the USA. The share of ‘the 1 per cent’ there is now greater than it was a century ago, and US income distribution is now by some margin the most unequal of the four countries.


pages: 550 words: 124,073

Democracy and Prosperity: Reinventing Capitalism Through a Turbulent Century by Torben Iversen, David Soskice

Andrei Shleifer, assortative mating, augmented reality, barriers to entry, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, centre right, cleantech, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, deskilling, Donald Trump, first-past-the-post, full employment, Gini coefficient, hiring and firing, implied volatility, income inequality, industrial cluster, inflation targeting, invisible hand, knowledge economy, labor-force participation, liberal capitalism, low skilled workers, low-wage service sector, means of production, mittelstand, Network effects, New Economic Geography, new economy, New Urbanism, non-tariff barriers, Occupy movement, offshore financial centre, open borders, open economy, passive investing, precariat, race to the bottom, rent-seeking, RFID, road to serfdom, Robert Bork, Robert Gordon, Silicon Valley, smart cities, speech recognition, The Future of Employment, The Great Moderation, The Rise and Fall of American Growth, too big to fail, trade liberalization, union organizing, urban decay, Washington Consensus, winner-take-all economy, working-age population, World Values Survey, young professional, zero-sum game

This is the exact opposite of the almost century-long agreement in the Labour Party that the party did not concern itself with so-called “industrial questions,” notably about skills and vocational training; the whole issue of apprenticeships belonged to the craft unions, preeminently the engineers. This argument is reinforced by the fact that other social groups—for example, the Catholics, as well as the Protestant farmers, the Mittelstand, and so on—were already organized in their own parties; in general, representative parties can best expand support intensively within the broad social groups they represent. A similar argument applies to other protocorporatist countries, since they were characterized by representative parties linked to broad social groups. At the same time, the German Social Democratic Party was commonly taken as a model by socialist parties in these economies.

As regulatory politics and economic networks moved to the national level, parties in protocorporatist societies thus became increasingly professionally organized to represent local, regional, and increasingly national interests. They were “representative” parties of economic interests. Confessional parties were no exception: while Christian Democratic parties defended (within limits) the interests of the Church (though by no means always Rome) they were also, in the words of Manow and Van Kersbergen (2009), “negotiating communities” for the many different economic groups—handwork and the Mittelstand, smallholding peasants, larger peasants, Catholic unions, as well as landlords and sometimes business (see also Kalyvas 1996 and Blackbourn 1980). This reflected the fact that economic life was partially organized on confessional lines in the relevant countries. The adoption of PR in this setting did not require exceptionally rational forecasting: once the move to the national level of industry and politics made it apparent that the preexisting majoritarian institutions of representation were producing stark disproportionalities, PR was the natural choice to restore representivity.

Kalyvas (1996) makes the compelling case that by the turn of the twentieth century the different Christian democratic parties were organizing themselves independently from the Church as representative parties with committees for different economic interests—as indeed they are still organized. The reason that Catholics with different economic interests remained with a party that is Catholic largely only in name is explained, we submit, by the interdependencies of these economic interests. The rural-urban, peasant-artisan-small employer-merchant cospecific asset network acted, if our hypothesis is correct, to create a peasant-Mittelstand constituency that had an incentive to remain within the Catholic party. Another way of putting this is to use Manow and van Kersbergen’s (2009) notion of Christian democratic parties as negotiating communities with a range of different economic interests in terms of income levels and hence redistribution, but also with a common interest in sharing and managing cospecific assets. The incentive structures for unions and business in Scandinavia developed in a similar way to those in the continental economies, but a major difference with the continental economies lay in the nature of the agricultural sector.


pages: 586 words: 160,321

The Euro and the Battle of Ideas by Markus K. Brunnermeier, Harold James, Jean-Pierre Landau

Affordable Care Act / Obamacare, asset-backed security, bank run, banking crisis, battle of ideas, Ben Bernanke: helicopter money, Berlin Wall, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, collective bargaining, credit crunch, Credit Default Swap, currency peg, debt deflation, Deng Xiaoping, different worldview, diversification, Donald Trump, Edward Snowden, en.wikipedia.org, Fall of the Berlin Wall, financial deregulation, financial repression, fixed income, Flash crash, floating exchange rates, full employment, German hyperinflation, global reserve currency, income inequality, inflation targeting, information asymmetry, Irish property bubble, Jean Tirole, Kenneth Rogoff, Martin Wolf, mittelstand, money market fund, Mont Pelerin Society, moral hazard, negative equity, Neil Kinnock, new economy, Northern Rock, obamacare, offshore financial centre, open economy, paradox of thrift, pension reform, price stability, principal–agent problem, quantitative easing, race to the bottom, random walk, regulatory arbitrage, rent-seeking, reserve currency, road to serfdom, secular stagnation, short selling, Silicon Valley, South China Sea, special drawing rights, the payments system, too big to fail, union organizing, unorthodox policies, Washington Consensus, WikiLeaks, yield curve

In the United States, between 1980 and 2005, all net new private sector jobs were in companies less than five years old. By contrast, most large companies have tried to rationalize or downsize employment. German statistics also show small and medium enterprises as net creators of jobs in 2000–2005 (with a million new jobs) and large enterprises as losers (a loss of 800,000 jobs). German Mittelstand The German Mittelstand is geographically concentrated, above all in the south of the country, in the states of Bavaria and Baden-Württemberg (as well as to some extent in the southern states of former East Germany, Saxony and Thuringia). The historical heart of the German economy in the nineteenth and early twentieth centuries, the Rhine-Ruhr basin, was just as dominated by large companies as France. There thus ensured what the sociologist Gary Herrigel calls “contrasting industrial landscapes.”11 Federalism, however, meant that the small businesses had political champions in the state as well as local governments.

The fallout generated a push to privatize the public sector banks and subject them to market discipline, but this did not remove the implicit guarantee. In the 2000s, Landesbanken had engaged heavily via offshore vehicles (mostly in Ireland) in the US subprime market. The Sachsen LB and the LB Rheinland-Pfalz needed to be rescued with public money and were then consolidated with the more solid LB Baden-Württemberg (where the traditional Mittelstand orientation was much greater). Another Landesbank, West LB, required €8 billion of assistance. IKB bank, a German institution that had its roots in the public sector encouragement of Mittelstand finance, was bailed out in 2007 and then sold to a private equity firm. One of the few bankers worldwide to be jailed as a consequence of the crisis was Gerhard Gribkowsky, head of risk management at Bayern LB. An estimated 70 percent of the losses borne by the German state resulted from public sector banks and another 20 percent from the Munich Hypo Real Estate Holding AG.

Printed in the United States of America 13579108642 Contents 1 Introduction 1 PART I: POWER SHIFTS AND GERMAN-FRENCH DIFFERENCES 2 Power Shifts 17 Lethargy of European Institutions 18 The First Power Shift: From Brussels to National Capitals 20 The Second Power Shift: To Berlin-Paris and Ultimately to Berlin 27 After the Power Shift 33 3 Historical Roots of German-French Differences 40 Cultural Differences 41 Federalism versus Centralism 43 Mittelstand versus National Champions 48 Collaborative versus Confrontational Labor Unions 51 Historical Inflation Experiences 54 4 German-French Differences in Economic Philosophies 56 Fluid Traditions: Switch to Opposites 56 German Economic Tradition 59 French Economic Tradition 67 International Economics 74 PART II: MONETARY AND FISCAL STABILITY: THE GHOST OF MAASTRICHT 5 Rules, Flexibility, Credibility, and Commitment 85 Time-Inconsistency: Ex Ante versus Ex Post 86 External Commitments: Currency Pegs, Unions, and the Gold Standard 89 Internal Commitments: Reputation and Institutional Design 91 Managing Current versus Avoiding Future Crisis 94 6 Liability versus Solidarity: No-Bailout Clause and Fiscal Union 97 The No-Bailout Clause 98 Fiscal Unions 100 Eurobonds 111 Policy Recommendations 115 7 Solvency versus Liquidity 116 Buildup of Imbalances and the Naked Swimmer 117 Solvency 118 Liquidity 119 Crossing the Rubicon via Default 125 Sovereign-Debt Restructuring and Insolvency Mechanism 126 Fiscal Push: Increasing Scale and Scope of EFSF and ESM 127 Monetary Push 131 Policy Recommendations 133 8 Austerity versus Stimulus 135 The Fiscal Multiplier Debate 137 The Output Gap versus Unsustainable Booms Debate 143 Politics Connects Structural Reforms and Austerity 145 The European Policy Debate on Austerity versus Stimulus 148 Lessons and Policy Recommendations 153 PART III: FINANCIAL STABILITY: MAASTRICHT’S STEPCHILD 9 The Role of the Financial Sector 157 Traditional Banking 159 Modern Banking and Capital Markets 162 Cross-Border Capital Flows and the Interbank Market 166 10 Financial Crises: Mechanisms and Management 173 Financial Crisis Mechanisms 175 Crisis Management: Monetary Policy 185 Crisis Management: Fiscal Policy and Regulatory Measures 194 Ex Ante Policy: Preventing a Crisis 206 11 Banking Union, European Safe Bonds, and Exit Risk 210 Banking in a Currency Union 211 Safe Assets: Flight-to-Safety Cross-Border Capital Flows 222 Redenomination and Exit Risks 226 Policy Recommendations 233 PART IV: OTHERS’ PERSPECTIVES 12 Italy 237 Battling Economic Philosophies within Italy 237 Mezzogiorno: Convergence or Divergence within a Transfer Union 239 Italy’s Economic Challenges 242 Politics and Decline 245 13 Anglo-American Economics and Global Perspectives 249 Diverging Traditions 251 The United States: The Politics of Looking for Recovery 261 The United Kingdom: Brexit and the Politics of Thinking Outside Europe 267 China and Russia 279 Conclusion 286 14 The International Monetary Fund (IMF) 287 The IMF’s Philosophy and Crisis Management 289 The IMF’s Initial Involvement in the Euro Crisis 295 The IMF and the Troika 300 A Change in the IMF’s Leadership 304 Loss of Credibility: Muddling Through, Delayed Greek PSI 306 15 European Central Bank (ECB) 313 The ECB before the Crisis: Institutional Design and Philosophy 315 The ECB’s Early Successes and Defeats 325 The ECB and Conditionality 331 Lending and Asset Purchase Programs 343 Single Supervisory Mechanism (SSM) for European Banks 368 Taking Stock: Where Does the ECB Stand?


pages: 255 words: 92,719

All Day Long: A Portrait of Britain at Work by Joanna Biggs

Anton Chekhov, bank run, banking crisis, call centre, Chelsea Manning, credit crunch, David Graeber, Desert Island Discs, Downton Abbey, Erik Brynjolfsson, financial independence, future of work, G4S, glass ceiling, industrial robot, job automation, land reform, low skilled workers, mittelstand, Northern Rock, payday loans, Right to Buy, Second Machine Age, six sigma, Steve Jobs, trickle-down economics, unpaid internship, wages for housework, Wall-E

Despite this, Britain is still the eleventh largest manufacturer in the world, after India, largely because planes, cars and drugs are still made here by high-tech robots in co-operation with precision engineers. Our MPs have jealously looked to Germany’s Mittelstand, the substantial but unsexy ‘middle group’ of businesses that accounted for 52 per cent of the country’s output in 2011. Mittelstand businesses have fewer than 500 employees and a turnover below €50 million; they make unrivalled glass eyes or movie cameras or fish feed and then export them to the world. Freed of London, a family-founded business that makes specialised shoes needed in great quantities, is what a British Mittelstand firm would look like. There have been advances in pointe-shoemaking since 1929: US-based Gaynor Minden produces shoes with an ‘elastomeric’ toe of urethane foam which is supposed to never soften and St Petersburg’s Grishko adds silver to their shoes for its antibacterial properties.

The history of Freed can be read on the Freed of London website. PricewaterhouseCoopers estimated that manufacturing jobs in the UK have diminished from 1 in 4 to 1 in 10 in a report of April 2009 called ‘The Future of UK Manufacturing: Reports of its Death are Greatly Exaggerated’. The Manufacturer magazine classes the UK as the eleventh biggest manufacturer in the world using figures from the World Bank and Wikipedia, and my definition of the Mittelstand is borrowed from the Financial Times lexicon. Details about Gaynor Minden and Grishko’s shoes can be found on their websites. The myth of Pygmalion first appeared in Book Ten of Ovid’s Metamorphoses and the quotes from Capek’s play Rossum’s Universal Robots come from Acts One and Three of the Dover eBook edition. Details about the Unimate can be found in the New York Times’s obituary of its inventor, George Devol, and about the magnetic drum that was its first memory in Popular Science of 1962, searchable on Google Books.


pages: 831 words: 98,409

SUPERHUBS: How the Financial Elite and Their Networks Rule Our World by Sandra Navidi

activist fund / activist shareholder / activist investor, assortative mating, bank run, barriers to entry, Bernie Sanders, Black Swan, Blythe Masters, Bretton Woods, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, commoditize, conceptual framework, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, diversification, East Village, Elon Musk, eurozone crisis, family office, financial repression, Gini coefficient, glass ceiling, Goldman Sachs: Vampire Squid, Google bus, Gordon Gekko, haute cuisine, high net worth, hindsight bias, income inequality, index fund, intangible asset, Jaron Lanier, John Meriwether, Kenneth Arrow, Kenneth Rogoff, knowledge economy, London Whale, Long Term Capital Management, longitudinal study, Mark Zuckerberg, mass immigration, McMansion, mittelstand, money market fund, Myron Scholes, NetJets, Network effects, offshore financial centre, old-boy network, Parag Khanna, Paul Samuelson, peer-to-peer, performance metric, Peter Thiel, plutocrats, Plutocrats, Ponzi scheme, quantitative easing, Renaissance Technologies, rent-seeking, reserve currency, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, rolodex, Satyajit Das, shareholder value, Silicon Valley, social intelligence, sovereign wealth fund, Stephen Hawking, Steve Jobs, The Future of Employment, The Predators' Ball, The Rise and Fall of American Growth, too big to fail, women in the workforce, young professional

Whenever we invited public officials to a family office gathering, they would happily attend. A family office platform facilitates networking so that families can benefit from each other’s experiences, coinvest, and leverage buying power. A Saudi Arabian family in the oil business might share insights on commodity prices, while a German industrialist provides intelligence on potential acquisition targets in the highly coveted German Mittelstand companies. A British billionaire can invite other families to participate in his socially responsible infrastructure investments, while an Indian entrepreneur might look for coinvestors in the telecom sector. The point is to obtain original information directly from the source rather than secondary, diluted information from a third party with incongruent interests. Family offices are another example of how people with similar characteristics flock to each other and maximize their power.

., 209 McKinsey, 87, 115, 152 Meade, Michael, 201 Media scrutiny, 136–137 Meditation, 62, 70 Medley, Richard, 43 Mentoring gap, 154–155 Meritocracy, 71, 80, 83, 213 Meriwether, John, 207–209 Merkel, Chancellor Angela banker interactions with, 174 at Davos, 114 in Euro crisis, 177 general references to, 39, 61, 193 Josef Ackermann and, 142–144 Merrill Lynch, 56, 179, 183 Merton, Robert, 52, 208 Metropolitan Museum of Art’s Costume Institute Benefit, 76 Metzler, Jakob von, 136 Microsoft, 153 Middle East, 171 Milgram, Stanley, 18 Miliband, Ed, 137 Milken, Lowell, 191 Milken, Mike, 63–64, 129, 190–193 Milken Institute, 190, 192 Min Zhu, 27 Mindich, Eric, 109, 170 “Mind-reading,” 149 Minimum wage, 211 Minorities discrimination against, 148 integration of, 226 old boys’ network exclusion of, 82 Misinformation, 41 MIT. See Massachusetts Institute of Technology Mitchell, David, 87 Mittelstand, 123 Money. See also Wealth creation of, 32 network power of, 31 status associated with, 22 Mongolia, 171 Monness Crespi Hardt & Co., 110 Monoculture, 227 “Monopoly power,” 224 Monti, Mario, 84 Moore Capital, 109 Morgan Stanley, 89, 139 Moyers, Bill, 164 Moynihan, Brian, 115 Mozambique, 171 Murdoch, Elizabeth, 115 Musk, Elon, 69 Musk, Justine, 69 Myspace, 100 N Nadella, Satya, 153 National Bureau of Economic Research, 86 National Economic Council, 39, 165–166, 168, 184, 186 Nazarbayev, Nursultan, 171 Nazre, Ajit, 201 Negotiation, 153 Netherlands, 120 Netscape, 199 Network(s).


pages: 116 words: 31,356

Platform Capitalism by Nick Srnicek

3D printing, additive manufacturing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, collaborative economy, collective bargaining, deindustrialization, deskilling, disintermediation, future of work, gig economy, Infrastructure as a Service, Internet of things, Jean Tirole, Jeff Bezos, knowledge economy, knowledge worker, liquidity trap, low skilled workers, Lyft, Mark Zuckerberg, means of production, mittelstand, multi-sided market, natural language processing, Network effects, new economy, Oculus Rift, offshore financial centre, pattern recognition, platform as a service, quantitative easing, RFID, ride hailing / ride sharing, Robert Gordon, self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, software as a service, TaskRabbit, the built environment, total factor productivity, two-sided market, Uber and Lyft, Uber for X, uber lyft, unconventional monetary instruments, unorthodox policies, Zipcar

Cambridge, MA: Harvard University Press. Waters, Richard. 2016. ‘Microsoft’s Nadella Taps Potential of Industrial Internet of Things’. Financial Times, 22 April. http://www.ft.com/cms/s/0/c8e2e1d0-0861-11e6-a623-b84d06a39ec2.html (accessed 30 June 2016). Webb, Alex. 2015. ‘Can Germany Beat the US to the Industrial Internet?’ Bloomberg Businessweek, 18 September. http://www.bloomberg.com/news/articles/2015-09-18/can-the-mittelstand-fend-off-u-s-software-giants- (accessed 29 May 2016). Wheelock, Jane. 1983. ‘Competition in the Marxist Tradition’. Capital & Class, 7 (3): 18–47. Wile, Rob. 2016. ‘There Are Probably Way More People in the “Gig Economy” Than We Realize’. Fusion. Accessed 24 March. http://fusion.net/story/173244/there-are-probably-way-more-people-in-the-gig-economy-than-we-realize (accessed 29 May 2016). Wittel, Andreas. 2016.


pages: 473 words: 132,344

The Downfall of Money: Germany's Hyperinflation and the Destruction of the Middle Class by Frederick Taylor

Albert Einstein, anti-communist, banking crisis, Berlin Wall, British Empire, central bank independence, centre right, collective bargaining, falling living standards, fiat currency, fixed income, full employment, German hyperinflation, housing crisis, Internet Archive, Johann Wolfgang von Goethe, mittelstand, offshore financial centre, plutocrats, Plutocrats, quantitative easing, rent control, risk/return, strikebreaker, trade route, zero-sum game

The state and the communities must guard against letting the officials feel that they are being given up to the storms of economic developments without protection. The same went for white-collar staff in industry, who, unlike their manual co-workers, were unwilling to compromise their hard-won and precious social standing by going on strike for higher wages. As for small businessmen and craftsmen, the backbone of the much-admired German Mittelstand, many found their businesses shut down as inessential to the war effort, starved of raw materials diverted to more vital sectors or simply bereft of customers.22 They represented millions more Germans subjected to dramatically reduced incomes and loss of status – and accordingly ripe to blame those seen as profiteering. Again, the one thing that could be seen by such victims of the war economy as providing possible recompense for their suffering – and even enabling restoration of their previous way of life – was the promise of victory.

A sample of working-class families’ living costs, for instance, reveals that rent made up 19.7 per cent of expenditure in 1907, 8 per cent in 1917, 7.3 per cent in 1919, and, at the climax of the inflation, a mere 0.3 per cent!22 This was, of course, bad news for landlords. While it might be that they were able to pay off mortgages quickly because of the inflation, the financial return on their properties was miserable. Landlords, often not wealthy people but simply once-prosperous members of the Mittelstand – skilled artisans, shopkeepers, small tradesmen – who had invested in rental property as a form of saving and supplementary income, made up yet another aggrieved class in Weimar Germany. Given the virtual cessation of residential construction during the war, and the lack of incentive to build for rent after peace came, the housing shortages, particularly in the big cities, became even more chronic.


pages: 166 words: 49,639

Start It Up: Why Running Your Own Business Is Easier Than You Think by Luke Johnson

Albert Einstein, barriers to entry, Bernie Madoff, business cycle, collapse of Lehman Brothers, corporate governance, corporate social responsibility, creative destruction, credit crunch, Grace Hopper, happiness index / gross national happiness, high net worth, James Dyson, Jarndyce and Jarndyce, Jarndyce and Jarndyce, Kickstarter, mass immigration, mittelstand, Network effects, North Sea oil, Northern Rock, patent troll, plutocrats, Plutocrats, Ponzi scheme, profit motive, Ralph Waldo Emerson, Silicon Valley, software patent, stealth mode startup, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, traveling salesman, tulip mania, Vilfredo Pareto, wealth creators

I was told of the chief executive of a large publisher who, when the fire alarm went off accidentally, would summon his chauffeur to pick him up so he could circle the building ensconced in his limousine rather than stand on the pavement and mingle with the troops. Not surprisingly, the business underperformed and he was replaced. Another characteristic of top managers is that they manage for the long term. Sudden strategic moves to suit quarterly targets or shorter-term bonus measures are damaging. Family stewardship often beats publicly traded or private equity as a form of ownership for this reason. Germany’s Mittelstand companies, which are principally family owned, are the backbone of their economy: often world-class operations that adopt prudent financing, and invest in capital expenditure and research and development. Incentives at all levels tend to be long term. The best managers have real domain knowledge. This means they understand their industry and are experts in their field. It allows them to command the respect of their colleagues, and means they have genuine insight into the vital economics of their profession or niche.


pages: 170 words: 49,193

The People vs Tech: How the Internet Is Killing Democracy (And How We Save It) by Jamie Bartlett

Ada Lovelace, Airbnb, Amazon Mechanical Turk, Andrew Keen, autonomous vehicles, barriers to entry, basic income, Bernie Sanders, bitcoin, blockchain, Boris Johnson, central bank independence, Chelsea Manning, cloud computing, computer vision, creative destruction, cryptocurrency, Daniel Kahneman / Amos Tversky, Dominic Cummings, Donald Trump, Edward Snowden, Elon Musk, Filter Bubble, future of work, gig economy, global village, Google bus, hive mind, Howard Rheingold, information retrieval, Internet of things, Jeff Bezos, job automation, John Maynard Keynes: technological unemployment, Julian Assange, manufacturing employment, Mark Zuckerberg, Marshall McLuhan, Menlo Park, meta analysis, meta-analysis, mittelstand, move fast and break things, move fast and break things, Network effects, Nicholas Carr, off grid, Panopticon Jeremy Bentham, payday loans, Peter Thiel, prediction markets, QR code, ransomware, Ray Kurzweil, recommendation engine, Renaissance Technologies, ride hailing / ride sharing, Robert Mercer, Ross Ulbricht, Sam Altman, Satoshi Nakamoto, Second Machine Age, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, smart cities, smart contracts, smart meter, Snapchat, Stanford prison experiment, Steve Jobs, Steven Levy, strong AI, TaskRabbit, technological singularity, technoutopianism, Ted Kaczynski, the medium is the message, the scientific method, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, too big to fail, ultimatum game, universal basic income, WikiLeaks, World Values Survey, Y Combinator

In the US, productivity has been rising, shiny new buildings are being built and corporate profits are increasing, but average salaries are falling. In a similar fashion, productivity in the UK increased by 80 per cent between 1973 and 2011 (although it is still low by the standards of the Organisation for Economic Co-operation and Development) but the hourly compensation of the median worker went up by only 10 per cent in real terms. All over the world – including in socialist Sweden and Mittelstand Germany – top earners and top jobs have been doing just fine, while for a lot of people in the middle and bottom, earnings and wealth haven’t increased at all in real terms since the 1970s. There are other forms of inequality that no one is thinking about at play here too. As a general rule, technology empowers those who have either the money or the skills to take advantage of it. The more powerful the tech, the more powerful the tendency.


America Right or Wrong: An Anatomy of American Nationalism by Anatol Lieven

American ideology, British Empire, centre right, cognitive dissonance, colonial rule, cuban missile crisis, desegregation, European colonialism, failed state, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, illegal immigration, income inequality, laissez-faire capitalism, mass immigration, Mikhail Gorbachev, millennium bug, mittelstand, Monroe Doctrine, moral hazard, moral panic, new economy, Norman Mailer, oil shock, Ralph Waldo Emerson, Robert Bork, Ronald Reagan, Thomas L Friedman, World Values Survey, Y2K

The American middle classes may not have suffered so badly economically— although that situation may be changing as the economy ceases to generate adequate numbers of "middle-class" jobs—but the nation's openness to immigration means that the middle classes have suffered even more from demographic pressure and the cultural tension and change that immigration has encouraged. This clash has generated much of the electricity which drives the turbines of nationalism and other radical political tendencies across the world. A classic example is the role of the endangered and declining nobility, peasantry and traditional middle class (Mittelstand) of Germany in generating German "radical conservatism," and the new nationalism which was its intimate partner, in the later nineteenth century.14 These social strata generated movements which often combined radical economic protest against the new capitalism with intense nationalism and cultural conservatism.15 And as the example of the Prussian nobility shows, absolute decline does not necessarily have to occur to drive an old elite in a radical direction—the threat can be enough.

For the immense importance of ethnic and regional origins in shaping different strands of American political culture, see Kevin Phillips, The Cousins' Wars: Religion, Politics and the Triumph of Anglo-America (New York: Basic Books, 1999), pp. 117 ff. 12. Cf. Bennett, Party of Fear, pp. 27-182; Hofstadter, Paranoid Style, pp. 19-23. 13. Hardisty, Mobilizing Resentment, p. 32. 14. See John Weiss, Conservatism in Europe, 1770-1945: Tradition, Reaction and CounterRevolution (London: Thames and Hudson, 1977), pp. 71-89. For the role of the small town Mittelstand and the effects on later German nationalism of the destruction of 239 N O T E S TO P A G E S 93-96 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. their ancient social and political order by the modern state, see Mack Walker, German Home Towns: Community, State and General Estate, 1648-1817 (Ithaca, NY: Cornell University Press, 1998), especially pp. 405-431. Cf. Geoff Eley, "The Wilhelmine Right: How It Changed," in Society and Politics in Wilhelmine Germany, ed.


pages: 475 words: 155,554

The Default Line: The Inside Story of People, Banks and Entire Nations on the Edge by Faisal Islam

Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, Basel III, Ben Bernanke: helicopter money, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, British Empire, capital controls, carbon footprint, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, credit crunch, Credit Default Swap, crony capitalism, dark matter, deindustrialization, Deng Xiaoping, disintermediation, energy security, Eugene Fama: efficient market hypothesis, eurozone crisis, financial deregulation, financial innovation, financial repression, floating exchange rates, forensic accounting, forward guidance, full employment, G4S, ghettoisation, global rebalancing, global reserve currency, hiring and firing, inflation targeting, Irish property bubble, Just-in-time delivery, labour market flexibility, light touch regulation, London Whale, Long Term Capital Management, margin call, market clearing, megacity, Mikhail Gorbachev, mini-job, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, negative equity, North Sea oil, Northern Rock, offshore financial centre, open economy, paradox of thrift, Pearl River Delta, pension reform, price mechanism, price stability, profit motive, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, reshoring, Right to Buy, rising living standards, Ronald Reagan, savings glut, shareholder value, sovereign wealth fund, The Chicago School, the payments system, too big to fail, trade route, transaction costs, two tier labour market, unorthodox policies, uranium enrichment, urban planning, value at risk, WikiLeaks, working-age population, zero-sum game

And with the world economy coming back now, the dividends of all this effort are paying out.’ The success in forklift trucks was replicated in other industries and across their supply chains. Germany has been brilliant at identifying and exploiting specialist high-quality export niches with a global market, and has spawned a range of medium-sized companies, the so-called Mittelstand, to supply these markets with items ranging from conveyor belts to industrial springs. One company has cornered the world market in antennae for skyscrapers. The top Mittelstand companies adhere to the ‘80 per cent model’ – an 80 per cent global market share, and 80 per cent of production exported. Such products are rarely glamorous, but all, in retrospect, are rather obvious commercial bets as emerging economies develop. Rather brilliantly, whether China or India wins the global industrial race for cars, or motorbikes or missiles, German companies will be on hand to equip the factories.


pages: 196 words: 57,974

Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge

affirmative action, barriers to entry, Bonfire of the Vanities, borderless world, business process, Charles Lindbergh, Corn Laws, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, double entry bookkeeping, Etonian, hiring and firing, industrial cluster, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, mittelstand, new economy, North Sea oil, race to the bottom, railway mania, Ronald Coase, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, tulip mania, wage slave, William Shockley: the traitorous eight

The biggest were the “universal banks” that managed to be commercial banks, investment banks, and investment trusts all rolled into one. (J. P. Morgan achieved something similar, but only by getting around state laws, rather than being encouraged by them.) Deutsche Bank (formed in 1870) and Dresdner Bank (1872) concentrated on financing large-scale industry, leaving smaller banks to concentrate on the Mittelstand of medium-sized family firms that also powered the country’s success. In 1913, seventeen of the biggest twenty-five joint-stock companies were banks. Universal banks financed almost half of the country’s net investment. Bankers also sat on the supervisory boards of all Germany’s great industrial companies, providing advice and contacts as well as capital (it was the bankers that organized Siemens’s merger with German Edison in 1883).


pages: 164 words: 57,068

The Second Curve: Thoughts on Reinventing Society by Charles Handy

"Robert Solow", Airbnb, basic income, Bernie Madoff, bitcoin, bonus culture, British Empire, call centre, Clayton Christensen, corporate governance, delayed gratification, Diane Coyle, disruptive innovation, Edward Snowden, falling living standards, future of work, G4S, greed is good, informal economy, Internet of things, invisible hand, joint-stock company, joint-stock limited liability company, Kickstarter, Kodak vs Instagram, late capitalism, mass immigration, megacity, mittelstand, Occupy movement, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, Ronald Coase, shareholder value, sharing economy, Skype, Social Responsibility of Business Is to Increase Its Profits, Stanford marshmallow experiment, Steve Jobs, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Veblen good, Walter Mischel

The list includes schools, hospitals, sports teams, clubs, even families; once these had reached what seemed to be the optimum size any further addition would be pointless, might even be damaging. For these organisations the key question was not bigger but better, which, of course, begged the question, better in what way? We are back to those unanswered questions, why? what? and for whom? Better not bigger is also the watchword of many of Germany’s Mittelstand family businesses. These medium-sized businesses, mostly family-owned and mostly in manufacturing, are the mainstay of the German economy. They treat debt with suspicion, invest for the long term and shun the stock market. The market leaders in many niche products, their aim is to do one thing really well. They have, therefore, to invest in quality workmanship and research in order to survive.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, Commodity Super-Cycle, corporate governance, creative destruction, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, hiring and firing, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Jeff Bezos, job automation, John Markoff, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, lateral thinking, liberal capitalism, Malacca Straits, Mark Zuckerberg, market bubble, mass immigration, megacity, Mexican peso crisis / tequila crisis, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, pattern recognition, Paul Samuelson, Peter Thiel, pets.com, plutocrats, Plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, The Future of Employment, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, working-age population

In these cases, blood ties may not be the enemy of clean and open corporate governance, particularly in cases where the family has stepped back to play an ownership and oversight role in a publicly traded company, leaving the management of the company in professional hands. This can be a strong combination because the family keeps the company focused on the long term, and the market keeps it open to scrutiny. This, for example, is the model in Germany, were billionaire families control some of the world’s most productive companies, including many of the Mittelstand companies that drive the flourishing manufactured export sector and are more a source of pride than resentment. This also seems to be the case in Italy and France, which have seen quite a few new names appearing on recent billionaire lists. Many of these new entrants derive their wealth from old family companies and have risen slowly from the multimillionaire ranks to the billionaire lists. Since 2010, twenty-eight new billionaires have emerged in Italy, with more than half coming from the fashion and luxury goods industries.

Exports have expanded to 46 percent of GDP from 26 percent in 1995, driven in part by the well-known Hartz reforms, which have gutted the power of unions and restrained labor costs. This move has been attacked as a “beggar thy neighbor policy” by fellow members of the Eurozone, who now share a continental currency with Germany and can no longer respond to falling German labor costs by allowing their own national currencies to fall. But Germany has also pushed reform in many other ways: It has a core of medium-size industrial companies known as the Mittelstand, whose family owners are known for thinking in the long term, and they have made smart strategic use of the abundant supply of cheap, well-educated labor that opened up to them after the fall of the Berlin Wall. Many have invested in new factories in Poland and the Czech Republic, as well as in the United States and China, effectively exporting the German industrial model. 2010 was the first year in which German car companies made more cars abroad than at home, helping to forge what is arguably the leading global industrial power.


pages: 254 words: 69,276

The Metric Society: On the Quantification of the Social by Steffen Mau

Airbnb, cognitive bias, collaborative consumption, connected car, crowdsourcing, double entry bookkeeping, future of work, income inequality, informal economy, invisible hand, knowledge economy, labour market flexibility, lifelogging, Mark Zuckerberg, mittelstand, moral hazard, personalized medicine, positional goods, principal–agent problem, profit motive, QR code, reserve currency, school choice, selection bias, sharing economy, smart cities, the scientific method, Uber for X, web of trust, Wolfgang Streeck

https://www.researchgate.net/publication/255699242_Why_Do_Credit_Rating_Agencies_Issue_Unsolicited_Ratings_And_Why_Do_Issuers_Solicit_Ratings_If_They_Can_Get_Them_For_Free. Gantz, John, and David Reinsel (2012) ‘The digital universe in 2020: big data, bigger digital shadows, and biggest growth in the Far East’, https://www.emc.com/collateral/analyst-reports/idc-the-digital-universe-in-2020.pdf. Geiger, Theodor (1930) ‘Panik im Mittelstand’, Die Arbeit. Zeitschrift für Gewerkschaftspolitik und Wirtschaftskunde 7/10 (pp. 637-54). Gilbert, Paul (2000) ‘The relationship of shame, social anxiety and depression: the role of the evaluation of social rank’, Clinical Psychology & Psychotherapy 7/3 (pp. 174-89). Gillespie, Tarleton (2012) ‘Can an algorithm be wrong?’ Limn 1/2, https://limn.it/articles/can-an-algorithm-be-wrong. Gillespie, Tarleton (2014) ‘The relevance of algorithms’ in Media Technologies: Essays on Communication, Materiality, and Society, ed.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"Robert Solow", banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market bubble, Martin Wolf, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

In the UK, and to a lesser extent the US, the investment process was much more dominated by impersonal institutions obsessed with short-term returns and with little interest in the individual companies in which they invest.328 In continental Europe, in contrast, companies have been under less pressure for short-term performance from their shareholders and the banks that have supported them. A large chunk of Germany’s banking system consists of a network of regional banks aimed at supporting the Mittelstand, local small and medium-sized businesses. In the UK, small firms have suffered from the increasing concentration of financial power in the large London-based boardrooms. An empirical study of the United States found, for the period from 1973 to 2003, a negative relationship between the growth of ‘financialisation’—the growing importance of financial markets—and the real economy, leading to a decline in real investment at the firm level.


pages: 372 words: 92,477

The Fourth Revolution: The Global Race to Reinvent the State by John Micklethwait, Adrian Wooldridge

Admiral Zheng, affirmative action, Affordable Care Act / Obamacare, Asian financial crisis, assortative mating, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bernie Madoff, Boris Johnson, Bretton Woods, British Empire, cashless society, central bank independence, Chelsea Manning, circulation of elites, Clayton Christensen, Corn Laws, corporate governance, credit crunch, crony capitalism, Deng Xiaoping, Detroit bankruptcy, disintermediation, Edward Snowden, Etonian, failed state, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, income inequality, Khan Academy, Kickstarter, knowledge economy, Kodak vs Instagram, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, Martin Wolf, means of production, minimum wage unemployment, mittelstand, mobile money, Mont Pelerin Society, Nelson Mandela, night-watchman state, Norman Macrae, obamacare, oil shale / tar sands, old age dependency ratio, open economy, Parag Khanna, Peace of Westphalia, pension reform, pensions crisis, personalized medicine, Peter Thiel, plutocrats, Plutocrats, popular capitalism, profit maximization, rent control, rent-seeking, ride hailing / ride sharing, road to serfdom, Ronald Coase, Ronald Reagan, school choice, school vouchers, Silicon Valley, Skype, special economic zone, too big to fail, total factor productivity, War on Poverty, Washington Consensus, Winter of Discontent, working-age population, zero-sum game

Famous for its budget wrangles, its extremes of partisanship, gerrymandering, and money politics, its pathetic levels of voter participation, its ruinous ballot ­initiatives, its absurdly complicated structure, and its crumbling infrastructure, California government has been big, broke, and inefficient. The gap between Palo Alto and Sacramento is repeated all across the West: Wall Street operates in a different time zone from Washington, D.C.; Bavaria’s Mittelstanders, Milan’s fashion moguls, and Soho’s multimedia entrepreneurs work to different rules (and hours and pay) from the politicians in Berlin, Rome, and Whitehall. But there is no political distemper that cannot be found in its most extreme form in California. It is hard to think of anywhere else where the rhetoric of small government and the reality of big government have collided so spectacularly—and where the failures of Milton Friedman’s half revolution have been demonstrated so clearly.


pages: 312 words: 91,835

Global Inequality: A New Approach for the Age of Globalization by Branko Milanovic

"Robert Solow", Asian financial crisis, assortative mating, Berlin Wall, bitcoin, Black Swan, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial exploitation, colonial rule, David Ricardo: comparative advantage, deglobalization, demographic transition, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, invisible hand, labor-force participation, liberal capitalism, low skilled workers, Martin Wolf, means of production, mittelstand, moral hazard, Nash equilibrium, offshore financial centre, oil shock, open borders, Paul Samuelson, place-making, plutocrats, Plutocrats, post scarcity, post-industrial society, profit motive, purchasing power parity, Ralph Nader, Second Machine Age, seigniorage, Silicon Valley, Simon Kuznets, special economic zone, stakhanovite, trade route, transfer pricing, very high income, Vilfredo Pareto, Washington Consensus, women in the workforce

., was one of the most famous books of that time).3 A period of slower, almost zero, economic growth in the West suggested a much less optimistic view of the future.4 Endless growth driven by technology was no longer envisaged. Unlike the preceding period, it was a time when people contended that “small is beautiful” (to quote the title of another influential book, by Ernest F. Schumacher, published in 1973). The future no longer seemed to belong to industrial giants like IBM, Boeing, Ford, and Westinghouse. It was a time to celebrate the flexibility and small scale of the German Mittelstand (mid-sized manufacturers) and the family enterprises in Emilia-Romagna, Italy. Japan’s rise began to look unstoppable. No one took notice of China yet. And of course the end of communism was not foreseen at all. A final wave of literature that I want to mention here is from the 1990s. It was dominated by the Washington Consensus (a set of policy prescriptions that emphasized deregulation and privatization) and the forecasting of the “end of history” (the title of an influential 1989 article by Francis Fukuyama, leading to the book The End of History and the Last Man [1992]).


pages: 337 words: 101,440

Revolution Française: Emmanuel Macron and the Quest to Reinvent a Nation by Sophie Pedder

Airbnb, Berlin Wall, Bernie Sanders, bike sharing scheme, centre right, disruptive innovation, Donald Trump, Downton Abbey, Erik Brynjolfsson, eurozone crisis, failed state, Fall of the Berlin Wall, ghettoisation, haute couture, Jean Tirole, knowledge economy, liberal capitalism, mass immigration, mittelstand, new economy, post-industrial society, rent-seeking, ride hailing / ride sharing, Second Machine Age, sharing economy, Silicon Valley, Travis Kalanick, urban planning, éminence grise

But, he said, he had lost clients ‘because I couldn’t increase production at the site’. Instead of hiring, he let the orders go. Such experiences were repeated in different corners across the country. France launched plenty of small firms, especially after it simplified the registration of new companies under Nicolas Sarkozy, when the country introduced the ‘auto-entrepreneur’ regime for new microbusinesses. But it singularly failed to develop a French version of the German ‘Mittelstand’, those mid-sized, export-oriented, mostly family-run industrial firms. The competitiveness of French industry, and with it economic growth, seemed to be on a path of inexorable decline. Between 2005 and 2010 France’s share of world exports shrank by almost 20 per cent, a decline exceeded within the eurozone only by Greece. France’s current account deteriorated. From a surplus at the start of the 2000s, it ran the biggest deficit (in cash terms) of any eurozone country by 2012.


pages: 382 words: 100,127

The Road to Somewhere: The Populist Revolt and the Future of Politics by David Goodhart

Affordable Care Act / Obamacare, agricultural Revolution, assortative mating, Big bang: deregulation of the City of London, borderless world, Boris Johnson, Branko Milanovic, Bretton Woods, British Empire, call centre, capital controls, carbon footprint, central bank independence, centre right, coherent worldview, corporate governance, credit crunch, deglobalization, deindustrialization, Donald Trump, Downton Abbey, Edward Glaeser, en.wikipedia.org, Etonian, European colonialism, eurozone crisis, falling living standards, first-past-the-post, gender pay gap, gig economy, glass ceiling, global supply chain, global village, illegal immigration, income inequality, informal economy, job satisfaction, knowledge economy, labour market flexibility, low skilled workers, market friction, mass immigration, mittelstand, Neil Kinnock, New Urbanism, non-tariff barriers, North Sea oil, obamacare, old-boy network, open borders, Peter Singer: altruism, post-industrial society, post-materialism, postnationalism / post nation state, race to the bottom, Richard Florida, Ronald Reagan, selection bias, shareholder value, Skype, Sloane Ranger, stem cell, Thomas L Friedman, transaction costs, trickle-down economics, ultimatum game, upwardly mobile, wages for housework, white flight, women in the workforce, working poor, working-age population, World Values Survey

In any case, if the exceptional openness of the British economy to foreign ownership has contributed to the decline story the bigger share of blame must lie with that familiar bogeyman of short-termism: the narrow focus on shareholder returns and the active market in corporate control stimulated by investment banks in the City of London that often creates a disincentive to plan and invest long. The Anglo-Saxon corporate governance model puts British businesses at a disadvantage compared with their competitors in Europe and Asia. German companies, particularly the Mittelstand of medium-sized family businesses, tend not to be quoted on the stock market. Managers can plan ahead—in developing new export markets, for example—without fear of a takeover, losing their job, or losing out on bonuses. The greater weight that shareholders, and stock market sentiment, have in big British businesses means managers are often on a treadmill of maximising short-term earnings. As Bob Bischof, head of the German-British Forum, points out: ‘Many of the best British companies sit on large cash piles.


pages: 330 words: 99,044

Reimagining Capitalism in a World on Fire by Rebecca Henderson

Airbnb, asset allocation, Berlin Wall, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, collaborative economy, collective bargaining, commoditize, corporate governance, corporate social responsibility, crony capitalism, dark matter, decarbonisation, disruptive innovation, double entry bookkeeping, Elon Musk, Erik Brynjolfsson, Exxon Valdez, Fall of the Berlin Wall, family office, fixed income, George Akerlof, Gini coefficient, global supply chain, greed is good, Hans Rosling, Howard Zinn, Hyman Minsky, income inequality, index fund, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Kickstarter, Lyft, Mark Zuckerberg, means of production, meta analysis, meta-analysis, microcredit, mittelstand, Mont Pelerin Society, Nelson Mandela, passive investing, Paul Samuelson, Philip Mirowski, profit maximization, race to the bottom, ride hailing / ride sharing, Ronald Reagan, Rosa Parks, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, sovereign wealth fund, Steven Pinker, stocks for the long run, Tim Cook: Apple, total factor productivity, Toyota Production System, uber lyft, urban planning, Washington Consensus, working-age population, Zipcar

By some measures it is ranked as the world’s most innovative economy.70 Nearly 25 percent of German GDP is in manufacturing (in the United States, for comparison, manufacturing makes up only about 15 percent of output). The World Bank’s 2016 Logistics Performance Index ranks Germany’s logistics performance and infrastructure as the best in the world.71 Eight of the world’s one hundred largest companies are German, and the country also boasts a highly successful Mittelstand, or group of globally successful small and middle-sized firms. Of the world’s roughly 2,700 “hidden champions”—firms that are in the top three in their industry and first on their continent and have less than €5 billion in sales—almost half are in Germany. By one estimate these relatively small firms have created 1.5 million new jobs, grown by 10 percent per year, and registered five times as many patents per employee as large corporations.


pages: 364 words: 104,697

Were You Born on the Wrong Continent? by Thomas Geoghegan

Albert Einstein, American Society of Civil Engineers: Report Card, banking crisis, Berlin Wall, Bob Geldof, collective bargaining, corporate governance, cross-subsidies, dark matter, David Brooks, declining real wages, deindustrialization, ending welfare as we know it, facts on the ground, Gini coefficient, haute cuisine, income inequality, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, laissez-faire capitalism, low skilled workers, Martin Wolf, McJob, minimum wage unemployment, mittelstand, offshore financial centre, Paul Samuelson, payday loans, pensions crisis, plutocrats, Plutocrats, purchasing power parity, Ralph Waldo Emerson, Robert Gordon, Ronald Reagan: Tear down this wall, Saturday Night Live, Silicon Valley, The Wealth of Nations by Adam Smith, Thorstein Veblen, union organizing, Wolfgang Streeck, women in the workforce

It’s not that it’s impossible for these subjects to come up in the U.S. in a political context—they do—but if it happens, it’s usually smothered in People magazine chatter or nasty talk-radio attacks. Here, it’s whether Obama or Pelosi or Reid is “winning” or “losing,” without all that much interest as to what exactly is being won or lost. Here I could talk politics with H. and S. and many others without anyone ever mentioning the name of “Schroeder” or “Kohl.” Ah, I wish I could explain it. Well, let me try an example from that first night. We were talking about the Mittelstand, the middle-sized manufacturers. “They’re being cut out by the government,” S. said. “Cut out of what?” I said. “Research. Basic research. Now the global companies get it all.” “Do the two of you—do you really think this will affect your lives?” “Of course,” S. said, and looked annoyed. “The problem is, Germany is not interested in research—” “Who is?” “The French are; they’re more interested in basic research—” S. said.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low-wage service sector, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

As a condition of public assistance, though, Schumpeter argued that they must adopt innovative practices. Despite these challenging times, Schumpeter witnessed the impressive wholesale reinvention of business, which fed into his theory of ‘creative destruction’ where the innovators flourish. Small and medium-sized German businesses, mostly family owned, upgraded their operations and became known globally for their quality. Many of these Mittelstand companies are still around today, for example Hohner harmonicas, Krones labelling machines and the Jil Sander fashion label. Big businesses also reinvented themselves. Five of Germany’s ten largest firms manufactured steel at the time of his move to Bonn. By the time he left, several had merged to become Vereinigte Stahlwerke (United Steelworks), which was the biggest steel and mining company in Europe.


pages: 374 words: 113,126

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

"Robert Solow", 3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, Fall of the Berlin Wall, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, Gini coefficient, global supply chain, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, manufacturing employment, market bubble, means of production, mittelstand, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

As a condition of public assistance, though, Schumpeter argued that they must adopt innovative practices. Despite these challenging times, Schumpeter witnessed the impressive wholesale reinvention of business, which fed into his theory of ‘creative destruction’ where the innovators flourish. Small and medium-sized German businesses, mostly family owned, upgraded their operations and became known globally for their quality. Many of these Mittelstand companies are still around today, for example Hohner harmonicas, Krones labelling machines and the Jil Sander fashion label. Big businesses also reinvented themselves. Five of Germany’s ten largest firms manufactured steel at the time of his move to Bonn. By the time he left, several had merged to become Vereinigte Stahlwerke (United Steelworks), which was the biggest steel and mining company in Europe.


Super Continent: The Logic of Eurasian Integration by Kent E. Calder

3D printing, air freight, Asian financial crisis, Berlin Wall, blockchain, Bretton Woods, business intelligence, capital controls, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, colonial rule, Credit Default Swap, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, disruptive innovation, Doha Development Round, Donald Trump, energy transition, European colonialism, failed state, Fall of the Berlin Wall, Gini coefficient, housing crisis, income inequality, industrial cluster, industrial robot, interest rate swap, intermodal, Internet of things, invention of movable type, inventory management, John Markoff, liberal world order, Malacca Straits, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, new economy, oil shale / tar sands, oil shock, purchasing power parity, quantitative easing, reserve currency, Ronald Reagan, seigniorage, smart cities, smart grid, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, supply-chain management, Thomas L Friedman, trade liberalization, trade route, transcontinental railway, UNCLOS, UNCLOS, union organizing, Washington Consensus, working-age population, zero-sum game

This dynamic Central European industrial complex is becoming a key global manufacturing base, focusing on precision machinery and chemicals as well as autos and electronics, that generates 42 percent of the European Union’s entire manufacturing value-added exports.60 This competitive cluster, drawing investment from throughout the world, is sourcing increasing quantities of components in China, while Chinese firms move up the value chain into Central Europe by acquiring German Mittelstand (small and medium-sized) manufacturers and robotics firms as well.61 German logistics firms like DHL and DB Schenker Logistics, as well as massive Chinese intermodal transport conglomerates like COSCO and China Railway Corporation, compete to control railways and ports, with the BRI conferring major strategic advantages on the Chinese.62 Arctic Transit Routes There are, finally, also the transit routes from Northeast Asia to Europe across the Arctic seas, recently termed the “Polar Silk Road” by the Chinese government.63 These routes are also shorter than the traditional maritime routes around the southern rim of Eurasia, and could be efficient if only frigid conditions did not block the way.


pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

3D printing, Airbnb, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, cleantech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, disruptive innovation, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, first-past-the-post, forward guidance, full employment, Gini coefficient, global supply chain, Growth in a Time of Debt, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, liquidity trap, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, peer-to-peer rental, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, working-age population, Zipcar

That said, many German giants are big because their home market is Europe’s largest, rather than because they are particularly successful. Lufthansa is Europe’s biggest airline by passengers, but lags far behind Easyjet by profits.469 Majority-state-owned Deutsche Bahn, which owns Arriva in Britain, is Europe’s biggest railway operator, but far from its best. While Germany has plenty of big companies, it is perhaps best known for its mid-sized ones, the Mittelstand. These are mostly manufacturers which focus on machinery, auto parts, chemicals and electrical equipment. Many have carved out specialised niches so narrow that they face little global competition. Their perceived virtues – notably the patient, long-term view that these often family-owned firms can take – contrast with the adrenaline-rush, rollercoaster ride of Anglo-American financial capitalism.


pages: 538 words: 145,243

Behemoth: A History of the Factory and the Making of the Modern World by Joshua B. Freeman

anti-communist, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, Corn Laws, corporate raider, deindustrialization, Deng Xiaoping, disruptive innovation, en.wikipedia.org, factory automation, Ford paid five dollars a day, Frederick Winslow Taylor, global supply chain, indoor plumbing, interchangeable parts, invisible hand, James Hargreaves, joint-stock company, knowledge worker, mass immigration, means of production, mittelstand, Naomi Klein, new economy, On the Economy of Machinery and Manufactures, Panopticon Jeremy Bentham, Pearl River Delta, post-industrial society, Ralph Waldo Emerson, rising living standards, Ronald Reagan, Silicon Valley, special economic zone, spinning jenny, Steve Jobs, strikebreaker, technoutopianism, the built environment, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tim Cook: Apple, transaction costs, union organizing, Upton Sinclair, urban planning, Vanguard fund, women in the workforce, working poor, Works Progress Administration, zero-sum game

The German model of codetermination, which gave an extensive role to unions in corporate management, and high wages and generous social benefits (including large profit-sharing payments) helped ensure peaceful labor relations. Unlike contemporary American manufacturers, Volkswagen did not fear that workers might take advantage of concentration to disrupt production and force their will on the company.58 Though the Mittelstand of small and medium-sized enterprises continued to dominate the West German and later unified German economy, there were, besides Volkswagen, some manufacturers with very large plants. The chemical giant BASF, once part of IG Farben but reformed as a separate entity after World War II, concentrated production at its long-established complex along the Rhine in Ludwigsafen. In 1963, its managing board acknowledged “that a company whose production volume is concentrated in one geographical spot is especially vulnerable in many respects (e.g. to strikes, earthquakes, and other forces beyond one’s control).”


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

"Robert Solow", 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, disruptive innovation, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, Ethereum, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, LNG terminal, low cost airline, low cost carrier, low earth orbit, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, plutocrats, Plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

According to the WTO, 80 percent of global trade is supported by financial institutions, but postcrisis regulations (such as Basel III, which requires banks to hold more capital onshore) inadvertently choked this crucial conduit between the financial sector and the real economy that helps companies produce exportable goods and has proven to be a reliable investment given its low default rate. Funds such as the European Investment Bank and the Abraaj Group have stepped in to back region-wide funding exchanges for the Middle East and Africa so that SMEs can more easily raise capital. Germany has five times more such Mittelstand companies than the entire United States (which has four times as many people), indicating a much greater emphasis on rooted entrepreneurs such as toolmakers who can benefit from trade finance to expand to growth markets in Asia. The spread of European SMEs into Asia and ASEAN SMEs into the rest of Asia, Africa, and back to Europe is a testament to how channeling global capital to local companies creates real and productive new flows.


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

"Robert Solow", accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Andrei Shleifer, anti-communist, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Berlin Wall, Bob Noyce, Branko Milanovic, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, credit crunch, Credit Default Swap, crony capitalism, currency peg, debt deflation, Deng Xiaoping, discovery of the americas, Donald Trump, Erik Brynjolfsson, European colonialism, eurozone crisis, falling living standards, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, Frederick Winslow Taylor, full employment, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, global supply chain, global value chain, Gordon Gekko, greed is good, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, TaskRabbit, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, Yom Kippur War, zero-sum game

As the European economies gathered speed in the 1950s, they were able to make enormous productivity gains as they caught up with American technology and methods; West Germany averaged 6.4% per year in the decade, Italy 5.9%, and France 4.3%.13 So many resources had been devoted to defence spending that European consumers had not been able to buy the goods, such as cars, that a great many Americans enjoyed; indeed, in 1950, a large number of European homes lacked even indoor plumbing. So there was plenty of pent-up demand waiting to be satisfied. West Germans owned just 200,000 cars in 1948 but 9 million by 1965.14 The West German economy became an export machine, driven by the production of capital goods. An enduring aspect of the German system was that the big manufacturers had a strong relationship with a group of smaller suppliers, known as the Mittelstand. The French economy laid a greater emphasis on planning than did the German, and had particular success in car manufacturing, thanks to Citroën, Peugeot and Renault. Italy had its strengths in Fiat, the car manufacturer, chemicals companies like Edison, and the fashion industry. The Netherlands had Philips, the electronics group, a successful chemicals industry, and, from the late 1950s onwards, enjoyed a gas boom.


pages: 585 words: 165,304

Trust: The Social Virtue and the Creation of Prosperity by Francis Fukuyama

barriers to entry, Berlin Wall, blue-collar work, business climate, business cycle, capital controls, collective bargaining, corporate governance, corporate raider, creative destruction, deindustrialization, Deng Xiaoping, deskilling, double entry bookkeeping, equal pay for equal work, European colonialism, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, global village, Gunnar Myrdal, hiring and firing, industrial robot, Jane Jacobs, job satisfaction, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, land reform, liberal capitalism, liberation theology, low skilled workers, manufacturing employment, mittelstand, price mechanism, profit maximization, RAND corporation, rent-seeking, Ronald Coase, Silicon Valley, Steve Jobs, Steve Wozniak, The Death and Life of Great American Cities, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, transfer pricing, traveling salesman, union organizing

Unlike American firms, whose competitive world often began and ended completely inside the United States, German companies had a much stronger sense of national identity in a world of strong international competitors. Because they were export oriented, the potential inefficiencies of domestic monopoly were minimized; large German firms were kept honest by large firms in other countries rather than by each other. Although the German economy is dominated by large firms, it (like Japan) also has a large and dynamic small-firm sector, the so-called Mittelstand. Family businesses are as prevalent and important in Germany as anywhere else; indeed, there are more cases of families’ retaining management control of large businesses in Germany than in the United States.12 But the family has never constrained the creation of large, professionally managed firms to the degree it has in China, Italy, France, or even Britain. Although large, formal industrial combines like cartels or IGs were broken up during the Allied occupation after the war, their place has been taken in a more informal way by the powerful German trade associations, or Verbände.


pages: 533

Future Politics: Living Together in a World Transformed by Tech by Jamie Susskind

3D printing, additive manufacturing, affirmative action, agricultural Revolution, Airbnb, airport security, Andrew Keen, artificial general intelligence, augmented reality, automated trading system, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, bitcoin, blockchain, brain emulation, British Empire, business process, Capital in the Twenty-First Century by Thomas Piketty, cashless society, Cass Sunstein, cellular automata, cloud computing, computer age, computer vision, continuation of politics by other means, correlation does not imply causation, crowdsourcing, cryptocurrency, digital map, distributed ledger, Donald Trump, easy for humans, difficult for computers, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Ethereum, ethereum blockchain, Filter Bubble, future of work, Google bus, Google X / Alphabet X, Googley, industrial robot, informal economy, intangible asset, Internet of things, invention of the printing press, invention of writing, Isaac Newton, Jaron Lanier, John Markoff, Joseph Schumpeter, Kevin Kelly, knowledge economy, lifelogging, Metcalfe’s law, mittelstand, more computing power than Apollo, move fast and break things, move fast and break things, natural language processing, Network effects, new economy, night-watchman state, Oculus Rift, Panopticon Jeremy Bentham, pattern recognition, payday loans, price discrimination, price mechanism, RAND corporation, ransomware, Ray Kurzweil, Richard Stallman, ride hailing / ride sharing, road to serfdom, Robert Mercer, Satoshi Nakamoto, Second Machine Age, selection bias, self-driving car, sexual politics, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, smart contracts, Snapchat, speech recognition, Steve Jobs, Steve Wozniak, Steven Levy, technological singularity, the built environment, The Structural Transformation of the Public Sphere, The Wisdom of Crowds, Thomas L Friedman, universal basic income, urban planning, Watson beat the top human players on Jeopardy!, working-age population

MIT Technology Review, 21 Mar. 2016 <https://www. technologyreview.com/s/601081/the-rise-of-data-capital/> (accessed 8 Dec. 2017). Mitchell, William J. City of Bits: Space, Place, and the Infobahn. Cambridge, Mass: MIT Press, 1998. Mitchell, William J. E-topia. Cambridge, Mass: MIT Press, 2000. Mitchell, William J. Me ++: The Cyborg Self and the Networked City. Cambridge, Mass: MIT Press, 2003. Mittelstand, Brent Daniel, Patrick Allo, Mariarosaria Taddeo, Sandra Wachter, and Luciano Floridi. ‘The Ethics of Algorithms: Mapping the Debate’. Big Data & Society 3, no. 2 (2016): 1–21. OUP CORRECTED PROOF – FINAL, 28/05/18, SPi РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS 470 Bibliography Mizokami, Kyle. ‘The Pentagon Wants to Use Bitcoin Technology to Protect Nuclear Weapons’. Popular Mechanics, 11 Oct. 2016 <http:// www.popularmechanics.com/military/research/a23336/the-pentagonwants-to-use-bitcoin-technology-to-guard-nuclearweapons/?


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Basel III, Black Swan, blood diamonds, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Gordon Gekko, hiring and firing, income inequality, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, pension reform, performance metric, pirate software, plutocrats, Plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sand Hill Road, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

The affected plant got other models to work on and other jobs—so no one was losing.”22 Motivated by an eagerness to strengthen the domestic employment base, enterprises in northern Europe do not offshore with the same vigor as American firms. Journalists at the Economist examined offshoring in some detail in January 2013, concluding that “European firms had been off-shoring less in the first place,” than American firms in recent decades: “Cultural factors are partly responsible; Germany’s mittelstand or mid-sized family firms, for instance, sell their products globally but are more inclined to make things in their own backyards.”23 Perhaps the most thorough studies of offshoring in the family capitalism countries and Reagan-era America have been done by Bronfenbrenner and Luce. Drawing on their data, Jacob Funk Kirkegaard with the Washington-based Institute for International Economics determined that offshoring is considerably less prevalent among European firms than American ones.


pages: 1,088 words: 228,743

Expected Returns: An Investor's Guide to Harvesting Market Rewards by Antti Ilmanen

Andrei Shleifer, asset allocation, asset-backed security, availability heuristic, backtesting, balance sheet recession, bank run, banking crisis, barriers to entry, Bernie Madoff, Black Swan, Bretton Woods, business cycle, buy and hold, buy low sell high, capital asset pricing model, capital controls, Carmen Reinhart, central bank independence, collateralized debt obligation, commoditize, commodity trading advisor, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, debt deflation, deglobalization, delta neutral, demand response, discounted cash flows, disintermediation, diversification, diversified portfolio, dividend-yielding stocks, equity premium, Eugene Fama: efficient market hypothesis, fiat currency, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, framing effect, frictionless, frictionless market, G4S, George Akerlof, global reserve currency, Google Earth, high net worth, hindsight bias, Hyman Minsky, implied volatility, income inequality, incomplete markets, index fund, inflation targeting, information asymmetry, interest rate swap, invisible hand, Kenneth Rogoff, laissez-faire capitalism, law of one price, London Interbank Offered Rate, Long Term Capital Management, loss aversion, margin call, market bubble, market clearing, market friction, market fundamentalism, market microstructure, mental accounting, merger arbitrage, mittelstand, moral hazard, Myron Scholes, negative equity, New Journalism, oil shock, p-value, passive investing, Paul Samuelson, performance metric, Ponzi scheme, prediction markets, price anchoring, price stability, principal–agent problem, private sector deleveraging, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, riskless arbitrage, Robert Shiller, Robert Shiller, savings glut, selection bias, Sharpe ratio, short selling, sovereign wealth fund, statistical arbitrage, statistical model, stochastic volatility, stocks for the long run, survivorship bias, systematic trading, The Great Moderation, The Myth of the Rational Market, too big to fail, transaction costs, tulip mania, value at risk, volatility arbitrage, volatility smile, working-age population, Y2K, yield curve, zero-coupon bond, zero-sum game

This share excluded many emerging market stocks that remain inaccessible to global investors and remains well below the 30% share of emerging countries in global GDP. • Privately held enterprises may, on aggregate, be as valuable as publicly traded stocks. Vissing-Jorgensen–Moskowitz (2002) estimate that in the 1990s nonpublicly held equity by U.S. entrepreneurs was similar in size to the public equity market. Asian family enterprises, German “Mittelstand”, and sovereign assets are global examples of wealth not captured in listed equities, but I have not seen good estimates. The values could be very high, but in any case these are not investable. • Combining major fixed income market indices, the global bond markets amounted to $40.3 trillion in December 2009. Over half was government or government-related debt; this share will likely increase in coming years.


pages: 1,066 words: 273,703

Crashed: How a Decade of Financial Crises Changed the World by Adam Tooze

Affordable Care Act / Obamacare, Apple's 1984 Super Bowl advert, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, Boris Johnson, break the buck, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, dark matter, deindustrialization, desegregation, Detroit bankruptcy, Dissolution of the Soviet Union, diversification, Doha Development Round, Donald Trump, Edward Glaeser, Edward Snowden, en.wikipedia.org, energy security, eurozone crisis, Fall of the Berlin Wall, family office, financial intermediation, fixed income, Flash crash, forward guidance, friendly fire, full employment, global reserve currency, global supply chain, global value chain, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, Hyman Minsky, illegal immigration, immigration reform, income inequality, interest rate derivative, interest rate swap, Kenneth Rogoff, large denomination, light touch regulation, Long Term Capital Management, margin call, Martin Wolf, McMansion, Mexican peso crisis / tequila crisis, mittelstand, money market fund, moral hazard, mortgage debt, mutually assured destruction, negative equity, new economy, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shale / tar sands, old-boy network, open economy, paradox of thrift, Peter Thiel, Ponzi scheme, predatory finance, price stability, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, reserve currency, risk tolerance, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, structural adjustment programs, The Great Moderation, Tim Cook: Apple, too big to fail, trade liberalization, upwardly mobile, Washington Consensus, We are the 99%, white flight, WikiLeaks, women in the workforce, Works Progress Administration, yield curve, éminence grise

It is the decline of Europe.40 This might ring oddly to Europeans used to hearing boasts of Germany’s trade surplus. But as Germany’s own most perceptive economists point out, those surpluses are as much the result of repressed imports as of roaring export success.41 The inexorable slide of corporate Europe down the global rankings is clear for all to see. Though we might wish otherwise, the world economy is not run by medium-sized “Mittelstand” entrepreneurs but by a few thousand massive corporations, with interlocking shareholdings controlled by a tiny group of asset managers. In that battlefield of corporate competition, the crises of 2008–2013 brought European capital a historic defeat. No doubt there are many factors contributing to this, but a crucial one is the condition of Europe’s own economy. Exports matter, but, as both China and the United States demonstrate, there is no substitute for a profitable home market.


EuroTragedy: A Drama in Nine Acts by Ashoka Mody

"Robert Solow", Andrei Shleifer, asset-backed security, availability heuristic, bank run, banking crisis, Basel III, Berlin Wall, book scanning, Bretton Woods, call centre, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, credit crunch, Daniel Kahneman / Amos Tversky, debt deflation, Donald Trump, eurozone crisis, Fall of the Berlin Wall, financial intermediation, floating exchange rates, forward guidance, George Akerlof, German hyperinflation, global supply chain, global value chain, hiring and firing, Home mortgage interest deduction, income inequality, inflation targeting, Irish property bubble, Isaac Newton, job automation, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, Kickstarter, liberal capitalism, light touch regulation, liquidity trap, loadsamoney, London Interbank Offered Rate, Long Term Capital Management, low-wage service sector, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, mortgage tax deduction, neoliberal agenda, offshore financial centre, oil shock, open borders, pension reform, premature optimization, price stability, purchasing power parity, quantitative easing, rent-seeking, Republic of Letters, Robert Gordon, Robert Shiller, Robert Shiller, short selling, Silicon Valley, The Great Moderation, The Rise and Fall of American Growth, too big to fail, total factor productivity, trade liberalization, transaction costs, urban renewal, working-age population, Yogi Berra

On July 30, IKB Deutsche Industriebank AG (IKB), a small German bank, announced that it expected to suffer large losses on its subprime investments.2 The Düsseldorf-​based IKB was a strange presence in the US subprime business. Owned principally by the government’s development bank, Kreditanstalt für Wiederaufbau (KfW), IKB was set up to lend to Germany’s small and medium-​sized companies, the fabled Mittelstand. But intense competition from other German banks had curtailed profitable lending opportunities at home, and the US subprime market was irresistible.3 To make its subprime investments, IKB had borrowed from the so-​called asset-​backed commercial paper (ABCP) market. In the ABCP market, “conduits” run by asset managers connected borrowers such as IKB to major “real money” investors, including insurance companies and pension funds.4 When IKB announced its large losses, the real money investors became worried that other borrowers might harbor similar problems.5 The investors instructed the conduits to pull back, and the $1.2 trillion ABCP market began to collapse (figure 5.1).6 The consequences were far-​reaching.