“Crazy Rich Germans”? … it doesn’t ring quite right, does it. Surely, Germany is a well-groomed social market economy? No badly behaved, high-spending crazy-rich people there. You can make entire movies driven by clichés about the Asian nouveau riche. The wealth of Arab sheikhs is legendary. Europe has dined out for more than a century on gossip about the antics of America’s billionaires. Piketty’s famous inequality studies updated that trans-Atlantic trope for the 21st century. But what about Europe’s own ultra wealthy?
And they are going for the sky: they want to skim as much as possible for Russia and China, and hate those polities where plutocrats are under tight control by what we call in the west autocrats...
As someone living in Germany, this makes for particularly fascinating reading.
Slightly different topic but I'd be curious to know what research there is on social mobility within German society. How does it compare to other countries? My hunch is that socioeconomic mobility is actually higher here compared with the US, for instance, despite the 'American Dream'.
Adam: I am a fan of your authorship. Just finishing The Deluge. Exhaustively well researched. Thank you. I will RE-enlist as a paid reader to your sub stack too, btw. But I disagree with your take on German wealth inequity. Capitalism has done more to lift more people out of poverty than any other economic system. These “Rich” families don’t have their wealth under their respective beds. 99% of it is in the economy, paying salaries, paying taxes, funding research, etc. If you exchange those wealth repositories for increased bureaucracies, subsidized living standards, and entitlement benefits you will most assuredly increase the number of people who live in poverty. The wealth tax we need is one which directly spends the money on increased defense. You see the writing on the wall better than me: Europe’s lack of military spend relative to China and Russia is reminiscent of the prelude to world war conflicts. That’s the “inequity” which we should fix because it will save lives.
Yes, in China, under a Chinese leadership. Or in Russia, under Russian leadership. This is why the US wants to destroy them both and skim everything that was provided as public goods and/or benefiting the population at large for themselves. And this is why Germany has so adamant to toss its future in the US boat in the war against Russia. Furetherance of putocracy.
And those rich pay as little taxes as they can and if they could, they would pay nothing and get state subsidies. Not unheard of. This is how the Byzantine empire fell, when the rich landlords stopped supporting with taxes the imperial coffers, who spent them on the military for defensive purposes (Perisans, Turks, Arabs, Crusaders, etc...)
This is obviously slander based on lots of lies. Look at how the infrastructure in Russia, China is being built and look at the US. Railways, for instance...
Just repeat "Capitalism has done more to lift more people out of poverty than any other economic system" twenty times every night before you go to bed, and then you'll stop asking pesky questions about why the rich have all the money.
"If you exchange those wealth repositories for increased bureaucracies, subsidized living standards, and entitlement benefits you will most assuredly increase the number of people who live in poverty."
What percent of Germany's GDP is government spending? Do you know? Would you say Germany is a poor country? Last time I checked, Austria had the highest percentage of GDP take up by government spending - nearly 50%, I believe - is Austria a poor country?
These things you're claiming, they have no basis in reality.
This is probably the dumbest and most cynical argument about poverty and wealth I ever came across - more just distribution would lead to more poverty. Combine that with the next sentence about the need of more taxes to be spent on armaments and you got the classic recipe for fascist rule of the wealthy elites, who - quite contrary according to the post - make up the altruistic strata of society that is ensuring society’s smooth economic functioning. It is reflecting the perverted mindset of the liberal upperclass establishment and the wealthy oligarchy which at all times has been fighting democracy and social justice tooth and nail throughout history from ancient Rome to the US driven neoliberal capitalist assault. It is based on several unalterable idelogical principles:
The oligarchic clique represents its own privileged special interests as tantamount to the general interest of society.
Ruling-class protagonists warn that subsidies, rent caps, and debt cancellations and the welfare state undermine the moral of society at the expense of the more responsible and stable elements of society.
The ruling elites maintain that redistributive social programs deliver ruinous costs upon the entire society. There is not enough land for smallholders, not enough funds for or public projects or medical care, no caps on rent. No notice is taken that there is always enough money for war and massive public subsidies to the wealthiest stratum and that the oligarchy is raking in massive economic rent, which is unearned income - something all classic political economists - Adam Smith, John Stuart Mill, Ricardo and Marx strongly agreed upon.
Any agitation against social and economic justice is not seen as a righteous resistance to economic injustice but denounced as class war.
As Michael Parenti put it - More for the many meant less to the few
That's just darn nice of those rich folks to own and invest all that money for the good of the economy and all the jobs it creates, if they ever get tired of performing this useful service, I'd be willing to step in and help out if I can.
As a German CEO once told me, "It's my social responsibility to pay tax for the social programs of others. I gladly pay 50%. But not 1 penny more." He was honest and I agree with him. At some point too much is too much and government needs to be more effective and efficient with tax payers money. In general , Germans seem to be the most unflashy types around. Ask luxury brand boutique owners in France and Italy and they will tell you the Germans don't come around much. Too practical and too fault finding in the offerings.
The post says Germany eliminated its wealth tax. So the tax on wealth is ZERO. Even if you didn't increase overall government spending by a dime, the super-wealthy could be paying more, which, incidentally, would free up the less-rich to pay less.
Only envy can explain this post. Shouldn't you give a little of your intelligence to those of us who have less, Adam? Where do we stop? Should we prohibit people from becoming wealthy so we don't have to take their wealth later? Don't you already pay taxes when you acquire that wealth?
If there's nothing wrong with two families owning as much wealth as half the country, why be so shy about publicizing that fact?
The whole post is basically an argument in favor of having more data, and having that data more widely distributed. Wonder why the wealthy are so dead-set on us NOT knowing how well they're all doing?
Anyway, the post is an argument that we should have the facts, and the facts should be more readily available and widely publicized. Is your argument that the public can't be trusted to know these things because they'll riot?
You don't need to hate or envy the rich to want them to pay more in taxes. See, there's stuff we need to pay for, and we tried taxing poor people, but it turns out they don't have any money.
Also, interesting that your idea of poverty isn't just being homeless, you've got to be gnawed on by rats too. I guess the merely-homeless aren't poor enough, gotta have the rats.
And I if I had time to rehash the last century could review the results. You do realize most of the money gets eaten up by bureaucrats and in the last 30 years contractors right?
Most of the budget goes to social services. Most of it doesn’t get to the truly needy.
Most of social programs are a middle class income for the Administrative and Managerial Class.
Her name is Karen, and she can go to Hell.
Why should we get robbed again?
No.
And if you’re not German, this isn’t our business, and we should understand that we don’t and can’t understand other cultures or countries.
How 'bout we eliminate taxes completely on anyone who isn't a multi-millionaire, keep the level of social services exactly the same, but just fund it by taxing the super-rich? Would that still be envy?
Got it, you're against a tax CUT for millions of middle-class people because it would mean raising taxes on the super-rich.
Also, the median income in the US last year was about $70,000. Most economists define middle class as up to twice the median, or $140,000 (see how I did the math for you?) But I'm pretty sure facts won't have much effect on you, please just keep reiterating points from Reagan speeches from forty years ago.
A rather interesting corollary study would be the effect of nearly 80 years of peace in Europe (or the North Atlantic region) on capital accumulation.
The hypothesis being that with no humongous capital destruction events like wars – let’s ignore the few hiccups such as the oil shock and the debt crisis for a moment – the likelihood of immense capital accumulation is very large, including the capacity to leverage existing wealth through investments to even greater wealth.
So, what we should be looking at is the wealth distribution indicators – imperfect as they may be – over the long period. Might be a good doctoral topic for an aspiring Economics PhD candidate with no ideological baggage im Schlepptau.
Been a while since I read it, but I think this was one of Piketty's main points in "Capital", that the natural tendency under capitalism is always towards greater and greater concentration of wealth, only catastrophic wars seem to disrupt the process (not an argument for catastrophic wars, of course, just an argument for finding some less destructive way to stop ever-concentrating wealth.)
This is a fascinating article. I guess the questions for recent history that spring to mind are two:
1. How did this wealth accumulate post 1945?
2. What contribution has building this wealth and allocating it to investment made to the post war economic success of Germany? Positive or a drag on potential?
TL:DR: now that communism is no longer a threat, the ruling classes in Europe no longer see any reason to toss a few crumbs to the masses.
And they are going for the sky: they want to skim as much as possible for Russia and China, and hate those polities where plutocrats are under tight control by what we call in the west autocrats...
"hate those polities where plutocrats are under tight control"
A little hard to understand what your getting at, but would you say Russia is a place "where plutocrats are under tight control"?
Yes, they are. Check the former boss of Yukos for instance. They are toeing the line.
Yes, under Putin, EVERYBODY "toes the line" or they end up in prison.
You mean everybody respects the law? Is that a baad thing now?
Thanks, you've now completely outed yourself as a Putin-loving fascist. No need to continue this discussion, my work here is done.
I am sorry for your loss.
As someone living in Germany, this makes for particularly fascinating reading.
Slightly different topic but I'd be curious to know what research there is on social mobility within German society. How does it compare to other countries? My hunch is that socioeconomic mobility is actually higher here compared with the US, for instance, despite the 'American Dream'.
Adam: I am a fan of your authorship. Just finishing The Deluge. Exhaustively well researched. Thank you. I will RE-enlist as a paid reader to your sub stack too, btw. But I disagree with your take on German wealth inequity. Capitalism has done more to lift more people out of poverty than any other economic system. These “Rich” families don’t have their wealth under their respective beds. 99% of it is in the economy, paying salaries, paying taxes, funding research, etc. If you exchange those wealth repositories for increased bureaucracies, subsidized living standards, and entitlement benefits you will most assuredly increase the number of people who live in poverty. The wealth tax we need is one which directly spends the money on increased defense. You see the writing on the wall better than me: Europe’s lack of military spend relative to China and Russia is reminiscent of the prelude to world war conflicts. That’s the “inequity” which we should fix because it will save lives.
Yes, in China, under a Chinese leadership. Or in Russia, under Russian leadership. This is why the US wants to destroy them both and skim everything that was provided as public goods and/or benefiting the population at large for themselves. And this is why Germany has so adamant to toss its future in the US boat in the war against Russia. Furetherance of putocracy.
And those rich pay as little taxes as they can and if they could, they would pay nothing and get state subsidies. Not unheard of. This is how the Byzantine empire fell, when the rich landlords stopped supporting with taxes the imperial coffers, who spent them on the military for defensive purposes (Perisans, Turks, Arabs, Crusaders, etc...)
"skim everything that was provided as public goods and/or benefiting the population at large for themselves"
Pretty sure Putin and his oligarch buddies have already done quite a bit of that, probably not much left to pick over.
This is obviously slander based on lots of lies. Look at how the infrastructure in Russia, China is being built and look at the US. Railways, for instance...
This is hilariously bad, somehow managing to combine retrograde socioeconomic views with warmongering. Impressive.
Just repeat "Capitalism has done more to lift more people out of poverty than any other economic system" twenty times every night before you go to bed, and then you'll stop asking pesky questions about why the rich have all the money.
"If you exchange those wealth repositories for increased bureaucracies, subsidized living standards, and entitlement benefits you will most assuredly increase the number of people who live in poverty."
What percent of Germany's GDP is government spending? Do you know? Would you say Germany is a poor country? Last time I checked, Austria had the highest percentage of GDP take up by government spending - nearly 50%, I believe - is Austria a poor country?
These things you're claiming, they have no basis in reality.
This is probably the dumbest and most cynical argument about poverty and wealth I ever came across - more just distribution would lead to more poverty. Combine that with the next sentence about the need of more taxes to be spent on armaments and you got the classic recipe for fascist rule of the wealthy elites, who - quite contrary according to the post - make up the altruistic strata of society that is ensuring society’s smooth economic functioning. It is reflecting the perverted mindset of the liberal upperclass establishment and the wealthy oligarchy which at all times has been fighting democracy and social justice tooth and nail throughout history from ancient Rome to the US driven neoliberal capitalist assault. It is based on several unalterable idelogical principles:
The oligarchic clique represents its own privileged special interests as tantamount to the general interest of society.
Ruling-class protagonists warn that subsidies, rent caps, and debt cancellations and the welfare state undermine the moral of society at the expense of the more responsible and stable elements of society.
The ruling elites maintain that redistributive social programs deliver ruinous costs upon the entire society. There is not enough land for smallholders, not enough funds for or public projects or medical care, no caps on rent. No notice is taken that there is always enough money for war and massive public subsidies to the wealthiest stratum and that the oligarchy is raking in massive economic rent, which is unearned income - something all classic political economists - Adam Smith, John Stuart Mill, Ricardo and Marx strongly agreed upon.
Any agitation against social and economic justice is not seen as a righteous resistance to economic injustice but denounced as class war.
As Michael Parenti put it - More for the many meant less to the few
That's just darn nice of those rich folks to own and invest all that money for the good of the economy and all the jobs it creates, if they ever get tired of performing this useful service, I'd be willing to step in and help out if I can.
Fascinating. Has anyone looked into the effect the Hartz Reforms had (or didn’t) on wealth inequality?
As a German CEO once told me, "It's my social responsibility to pay tax for the social programs of others. I gladly pay 50%. But not 1 penny more." He was honest and I agree with him. At some point too much is too much and government needs to be more effective and efficient with tax payers money. In general , Germans seem to be the most unflashy types around. Ask luxury brand boutique owners in France and Italy and they will tell you the Germans don't come around much. Too practical and too fault finding in the offerings.
The post says Germany eliminated its wealth tax. So the tax on wealth is ZERO. Even if you didn't increase overall government spending by a dime, the super-wealthy could be paying more, which, incidentally, would free up the less-rich to pay less.
Ping me when capital gains tax reaches 50% here in Germany!
Only envy can explain this post. Shouldn't you give a little of your intelligence to those of us who have less, Adam? Where do we stop? Should we prohibit people from becoming wealthy so we don't have to take their wealth later? Don't you already pay taxes when you acquire that wealth?
If there's nothing wrong with two families owning as much wealth as half the country, why be so shy about publicizing that fact?
The whole post is basically an argument in favor of having more data, and having that data more widely distributed. Wonder why the wealthy are so dead-set on us NOT knowing how well they're all doing?
Let’s be honest; the people will be happy to take it all, then riot when it runs out.
Anyway, the post is an argument that we should have the facts, and the facts should be more readily available and widely publicized. Is your argument that the public can't be trusted to know these things because they'll riot?
Let's be honest, that's just your paranoid fantasy.
I'd recommend you read Piketty's "Capital and Ideology" if your post didn't demonstrate your incapacity to benefit from it.
This is true and Envy is the most useless sin.
You don't need to hate or envy the rich to want them to pay more in taxes. See, there's stuff we need to pay for, and we tried taxing poor people, but it turns out they don't have any money.
And yet Envy remains...
... for example Inequality.
That’s not - I’m homeless being knawed on by rats.
That’s- you have more, and I want more.
What is it in Germany the poor lack? Very well how much?
That is tending to basic needs.
Inequality says you have more, I want more. Envy, not Charity.
Also, interesting that your idea of poverty isn't just being homeless, you've got to be gnawed on by rats too. I guess the merely-homeless aren't poor enough, gotta have the rats.
Rats gotta eat too.
Steve, have a nice life.
Eh, fuck off, you're a monster.
And if we were talking about the U.S. and not Germany, I could provide you with a LONG list of basic needs in need of tending.
And I if I had time to rehash the last century could review the results. You do realize most of the money gets eaten up by bureaucrats and in the last 30 years contractors right?
Most of the budget goes to social services. Most of it doesn’t get to the truly needy.
Most of social programs are a middle class income for the Administrative and Managerial Class.
Her name is Karen, and she can go to Hell.
Why should we get robbed again?
No.
And if you’re not German, this isn’t our business, and we should understand that we don’t and can’t understand other cultures or countries.
How 'bout we eliminate taxes completely on anyone who isn't a multi-millionaire, keep the level of social services exactly the same, but just fund it by taxing the super-rich? Would that still be envy?
Yes, it’s Envy. Also it’s already been tried and failed. Do have a look at what taxes used to be in America...
and it’s not enough.
You are looking at the world you want that doesn’t exist, but yes it was tried FDR to Reagan.
What happened?
Also you’re not looking at who pays now - the bottom half in America don’t pay income tax... the top pay most now.
Go and look at the tax code, payments now. Then go back and look at what happened with 91% and 70% brackets.
Truly Progressive Income Taxes?
Why it’s never been tried!
YES, actually it was... it ended in the 1970s and 1980s. Even JFK cut the rates.
And what is this millionaire business? That’s middle class now.
Got it, you're against a tax CUT for millions of middle-class people because it would mean raising taxes on the super-rich.
Also, the median income in the US last year was about $70,000. Most economists define middle class as up to twice the median, or $140,000 (see how I did the math for you?) But I'm pretty sure facts won't have much effect on you, please just keep reiterating points from Reagan speeches from forty years ago.
It is false. The purpose of taxing the wealthy is to prevent the damage plutocracy can cause to democracy.
That’s the first and best case I’ve ever heard for the steep progression of taxes.
Limit the Plutocracy.
Who limits Democracy? 🤔
Now the progressive tax IRL doesn’t, didn’t and won’t work in America because we’re a Federation by nature.
What can be done at the Federal level fairly and competently is small and must be simple.
In implementation the tax code favors the no taxes poor and the very rich with the middle up and down as they increase income.
It’s a mess.
So the mischief in democracy can quite come from the masses, see Athens, or HITLER 😱
I’d answer with a flat tax so;
1. It would actually be paid.
2. No free riders.
3. No exceptions. All pay.
4. Less mischief, at least for politicians.
I think one needs to stay away from models and look what happened, what is happening, *who would do the implementation*...
And yes why the fence was there before you tear it down.
If there is to be a flat tax, it has to be on real estate, and real estate only.
See Henry George for the details ...
No, everyone gets taxed at the same rate and same things.
Consumption or income, No carve outs for love or hate.
AND YES that is ...
How TF do people think we got in this mess of all against all, divided by every conceivable taxonomy and classification ?
Tell Henry George to _____ and ____ but good and then he can____
Enough. Learn, or don't.
Frankly I think we need dictatorships across the West, to cure us of democracy and in particular democracy by division.
Dictator long warred won't tax him he won't tax thee, he'll hang both from the Tree... and ask if anyone else wants to point fingers?
Ask me anything. the answer is NO.
We all get F--- d or none of us do,
and we all get F---d with the same size D-ck.
Because I believe in FAIR.
A rather interesting corollary study would be the effect of nearly 80 years of peace in Europe (or the North Atlantic region) on capital accumulation.
The hypothesis being that with no humongous capital destruction events like wars – let’s ignore the few hiccups such as the oil shock and the debt crisis for a moment – the likelihood of immense capital accumulation is very large, including the capacity to leverage existing wealth through investments to even greater wealth.
So, what we should be looking at is the wealth distribution indicators – imperfect as they may be – over the long period. Might be a good doctoral topic for an aspiring Economics PhD candidate with no ideological baggage im Schlepptau.
Been a while since I read it, but I think this was one of Piketty's main points in "Capital", that the natural tendency under capitalism is always towards greater and greater concentration of wealth, only catastrophic wars seem to disrupt the process (not an argument for catastrophic wars, of course, just an argument for finding some less destructive way to stop ever-concentrating wealth.)
problem is Piety is an ideologue
auto correct :-(
PIKETTY
This is a fascinating article. I guess the questions for recent history that spring to mind are two:
1. How did this wealth accumulate post 1945?
2. What contribution has building this wealth and allocating it to investment made to the post war economic success of Germany? Positive or a drag on potential?
“Capitalism and democracy make for a tense pairing.”
Rather like a Deathtrap Drama, it’s a question to see who ruins the other first before they burn down the haunted mansion.
On the other hand, to be upbeat, the Hate Sex would be spectacular. In fact this kind of explains the 20th century... certainly that was spectacular!
Very interesting content. Thank you.
Didn't Germany recently cut their social security payouts?