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POLITICAL ECONOMY
Walker's World: Europe's prosperity envy
by Martin Walker
Frankfurt, Germany (UPI) May 28, 2013


disclaimer: image is for illustration purposes only

There is a strange thread that connects the Swedish riots, the European soccer final, Britain's planned industrial reforms, the French decision to start teaching university courses in English and the euro crisis.

We might call it prosperity envy, since the common thread is the way that individual European countries seek to emulate the apparent success of their partners by borrowing their institutions. Long-established and prosperous states like those in Europe tend to cling to their various national traditions unless a crisis inspires them to change their ways.

The euro crisis is such an event. It has cast grave doubt on the self-confidence of European society and of the complacent assurance of Europeans that they can forever maintain a civilized and democratic prosperity. They therefore cast around for solutions, and not surprisingly many of them are looking at today's Germany, which appears to be the last man standing in the European economic swamp.

The British are trying to develop their own version of Germany's Mittelstand, the massed ranks of medium-sized engineering firms with world-beating technical skills and enviable exports. At the same time, the British and French and Spaniards are trying to cobble together their own versions of the German industrial apprenticeships, which provide the widespread technical expertise on which the Mittelstand is built.

German school-leavers who aren't going on to university are steered into apprenticeship programs, in which they spend 5-7 years with a company, working for 2-4 days a week while spending the rest of the time studying in a specially tailored vocational training school. They emerge from this process highly skilled and qualified with the promise of a well-paid and prestigious job. The British tend to sneer at blue-collar jobs or shop-floor workers; Germans value their technicians.

The problem is that the Mittelstand is the unique product of German history. Its strength is rooted in the regional economies of the many small German statelets and dukedoms and principalities that were building their own economies until Bismarck united the country in 1870.

So while old-established nation states like Britain and France are dominated by London and Paris, Germany has Munich and Cologne and Hamburg, Frankfurt and Stuttgart and Dusseldorf, Leipzig and Dresden. Each city has its own industrial base, its own educational and vocational training establishment and above all its own local banks and bankers, who know their local businesses and back them for the long term.

To emulate such a system in centralized Britain or France would require a stupendous amount of social re-engineering. And without such a widespread and regionally based Mittelstand with a healthy need for skilled employees a German-style apprentice system isn't easily built.

At the same time Britain has been importing large parts of the Swedish school system, with self-administered private academies funded by the state, curbs on the traditional power of the teachers' labor unions and clear national standards for reading and math. The result is that in the most recent PISA assessments, under which student achievements in various countries are measured and compared, Swedish scores have been falling markedly, and falling behind those in Britain.

And now last week's riots by young immigrants in Sweden are casting doubt on the success of the so-called Swedish model of tolerance and integration and a modernized welfare state that outsources social work to private firms. The riots, which appear similar to those in France in 2005, which saw tens of thousands of cars set on fire and burned-out schools, with subsequent attacks on firemen and police, are discrediting the Swedish system.

The decision by the French government to promote the teaching of entire university courses in English reflects the French envy of Britain's vigorous immersion in the global economy, plus the implications of the way 300,000 hard-working and ambitious French citizens are living and working and setting up companies in London. The French also want to make their own universities more attractive to foreigners. They have noted that under Europe's Erasmus program, which encourages students to spend at least a year studying abroad, the vast majority seek to study in Britain.

Unlike the hopes of copying the Mittelstand or the German apprenticeship system, this isn't an over-ambitious project so it may succeed. After all, we have one shining example of a copy-cat exercise which worked very well. A decade ago, the Bundesliga, Germany's soccer league, was dismayed at its inability to match the wealth and global TV audience of Britain's Premier League, so they determined to copy it.

But they did so with German characteristics. Instead of encouraging their teams to buy foreign talent for vast sums, the Germans set up a system of training academies for young players. Rather like their apprenticeship program but with the added twist of boarding schools for talented teenage players, it combined schoolwork with practical training.

The result has been an invigorated and largely home-grown Bundesliga, and over the weekend the European championship, played in London's iconic Wembley Stadium, saw two German teams, Bayern-Munchen and Dortmund-Borussia, compete in the final. And as a symbol of German dominance in the eurozone, the Germans teams got to the all-German final by beating Spain's two great teams, Barcelona and Real Madrid.

Looking on the bright side, it is a hopeful sign for Europe's integration that countries are becoming more open to borrowing ideas and institutions from their neighbors.

But taking it too far, like trying to transplant the Mittelstand to Manchester and Marseilles, is probably doomed to disappointment. Not only does it tend to throw out the baby with the bathwater, it runs the risk of copying the wrong thing, like the way Sweden's young immigrants are re-enacting France's riots.

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