Mainstream Economy: Cancel Culture in Economic Policy

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Due to the circumstances, there was very little culture this summer. Instead, there is a lot of excitement about this "cancel culture", whatever the term means - that someone shouldn't appear (sometimes they don't want to anymore) because of something they've said, at least not with people who disagree are. Cancellation. Which is of course not good in a democracy, even if it is good to demonstrate against nonsense.

The only difference is that the excitement about canceling has something, shall we say, curious about it, measured by how silently in much more serious cases unpleasant opinions have been downgraded as "not helpful" in a more gallant way. And still will. Without an outcry. And without any newfangled cancel culture.

Thomas Fricke, arrow to the right

Born in 1965, has been running the WirtschaftsWunder internet portal since 2007. From 2002 to 2012 he was chief economist of the "Financial Times Deutschland". He is co-founder of the "Forum New Economy", in which experts have come together to create a new economic leitmotif.

For example, when over a few decades it was declared the only true economics theory that economy somehow always consists of renunciation (except for managers and top earners), reduction of securities, lower top taxes and more market, i.e. power for people with money. This continued to have an impact well into the 2000s - and it worked fine if you take as an indication that we have the lowest top tax rates, the largest wealth gap and the largest low-wage sector in decades.

We can learn from this - including how dangerous a kind of cancel culture can be.

If you want to get this far with what is actually a rather shaky business theory, you don't need too much arguing. That could explain why the economists and political professionals involved often spoke so emphatically of "economic" reason "when it came to their own ideas about economic policy and interests. What then became commonplace - and has an impact in some circles to this day, when it is said, for example, that the CDU needs an "economic expert" again in the current economic crisis, i.e. someone with "economic expertise", i.e. Friedrich Merz. No point in arguing. Then there is talk of truth and practical constraints that dictate this or that. The significance of other assessments then arises by itself.

Spiritual relatives are pushed

Such semantics in turn help to close the circles, which could explain how many a career came about in the heyday of market liberalism: For example, if someone from the ordoliberal council of experts to the ordoliberal Bundesbank, then as a top employee in the Chancellery and finally as head back to the Bundesbank changes, while the previous one left out only the Chancellor in a similar round.

Or when in Germany honorary prizes for business are awarded for loyalty to the line - i.e. regulatory conscience - than for gaining knowledge. And chairholders push chairholders who are spiritually related. Which also protects against too much new things. All of this accompanied in a very friendly manner by a large newspaper from Frankfurt.

Disagreements? Rare. Why also? Reason is reason. And it is not for nothing that the experts are called "Wirtschaftweise".

The good thing for the relevant following is that at an advanced stage of such mainstream waves there is no longer a need for a big cancel culture. It's very quiet. Who wants to deal with people who are unreasonable? At some point even Social Chancellors and the Greens were proud that they, shall we say, lowered the top tax rate. Crazy.

And what if someone contradicts? Is it somehow misguided and in case of doubt "Keynesian" - so unsuitable. Because somehow they just want to get into debt. Cancel Keynes. Continue in a circle.

False thinkers are checked to the point and comma - while friends sometimes become, let's say, chief economist of the European Central Bank without any particular academic achievement. Anglo-American economists who were once adored are suddenly no longer to be taken seriously because they are Anglo-Americans. And the International Monetary Fund, because it is run by the French. Basta.

In particularly explosive cases, you can even go one step further, for example with troublemakers like the head of the German Institute for Economic Research, which the big newspaper from Frankfurt sometimes finds basically not qualified and politically controlled at all. The man did not call for communism, but found the greatest conceivable impossibility years ago that there is a lack of public infrastructure in Germany and that income and assets have drifted dangerously apart. Which, according to Orthodox opinion, should not have happened. Treason. As a finding today, however, internationally standard - which even conservative economists and the FDP have recently shared.

Which brings us to the drama. Nowhere else has the tendency to declare a very special orthodox understanding of economics to be the only correct one to have worked so successfully as it does here. Which would have been okay if it were the right thing to do. Of course it isn't. And then, based on a great thinker, if (almost) everyone thinks (almost) the same for so long, at some point nobody will think anymore. At least since the great financial crisis, Germans have been increasingly criticized internationally for how much they are still clinging to old economic beliefs - in a world in which, in view of ever new crises and shocks, it has become necessary for central banks and governments to intervene much more. And where it doesn't help to lower top tax rates, dismantle social rules and pay homage to the market.

If so many people are still working at low wages in Germany, even after many years of economic growth, it is also due to the fact that we introduced a minimum wage far too late due to the sheer compliance with regulatory principles - which even the British and Americans introduced or raised earlier.

The fact that there could and should not be any alternative to the holy doctrine should also explain why some previous governments reacted much too late to acute economic crises. Or we realized so late that the European Central Bank - like all major central banks - has to intervene much more strongly in crises and, if in doubt, buy bonds. And that there is a lack of infrastructure. And much earlier, much more should have been invested in order to build a more climate-friendly economy.

Liberal market dominance of thought

Of course, all of this does not mean that all economists who think strongly about regulatory policy are therefore so crude with other opinions. Only: it is hard to deny that leading crises for decades were not about open-ended disputes for the progress of knowledge. With dubious consequences - even if the wedding itself in Germany is now over, as can be seen from the much more active politics in Corona times.

There is something irritating when, even in such an enlightened democracy, it has been possible for so long to declare economy and prosperity to be something for which there is only one sensibly true wise doctrine. Whereby we should state that this is about a lot more than what some right-wing extremists lament these days as a terrible red-green mainstream and (ouch!) Dictation of opinion. At least no one is impoverished by the gender star.

Worse still: The impressive history of liberal market dominance shows how quickly something like this can lead to real problems being overlooked - and then causing more damage than economic progress. As is the case in Germany today. With less orthodoxy we might have been spared both the escalation of the euro crisis and decaying schools, overloaded rail networks and the ongoing social division.

Isn't it really helpful if there is an occasional quarrel in a democracy in order to find the best answers.