At the train station near where I stay in Berlin, there’s a snack vending machine, one that I can only imagine here in Germany. In among the colorfully-packaged chocolates and chips waiting in neat lines, there’s a row of thin, yellow booklets, each one different, that you can buy for one euro. Press the button, and out comes literature—stories and poems, mainly by little-known authors, published by SuKultur, a small Berlin publishing house. Some of them are quite good. That’s commuting in Berlin: You can buy a snack, or literature.
Reading material was pretty important on the train this past week, because the S-Bahn (Berlin’s overground city train, a part of the German national railway system that also receives subsidies from the city government) was unusually crowded and uncomfortable—a result of an inspection that found many of the cars’ wheels in urgent need of repair and immediately took hundreds of them out of commission. They had been neglected, it seems, due to cost-cutting measures: a reduction in personnel and equipment aimed primarily at increasing the railway’s profitability. This time it wasn’t Berlin’s fault, but the city is chronically short of money and is also saving where it can.
Before the fall of the Berlin Wall, West Berlin was a paradox—a heavily subsidized showcase for capitalism—and it’s never quite seemed to get the hang of frugality since the subsidies ended. As the S-Bahn’s top managers were being fired, the papers were reporting that Berlin was about to increase its outlays for culture by 16 million euros (certainly a lovely commentary on priorities).
I can’t speak for Frankfurt, where the stock market is, or for the industrial centers of western Germany, where plants are closing or going to government-subsidized, part-time work, but in the capital of Berlin, which has little industry to speak of and has been claiming bankruptcy for years, no one’s really talking about the economy. (A friend who has recently traveled in western Germany assures me that the situation is no different in cities like Hamburg and Munich.)
There are various theories about this, but to me, it’s not too hard to explain. As we’ve all heard by now, Germany actually has a social safety net. Despite reductions in recent years, it’s still the case that no German has to go without health insurance after losing a job, people’s pensions are not privatized, and since Germans tend to rent rather than own—a result of tenant-friendly laws and good public housing—there isn’t much danger of losing your home. People are not suffering personally any more than usual, unlike Americans. The social welfare system works, so far.
A little over ten years ago, when I spent some time researching the situation in Berlin, things were quite different. About to become the nation’s capital, the city was undergoing wrenching changes. The economic costs of German unification were making themselves felt. Services were being cut, and politicians were talking seriously about streamlining the generous welfare system. On top of that, Berlin had recently faced its own crisis—a scandal involving banks and post-unification housing speculation that continues to resonate to this day. The economy was the major topic, and many were predicting dire consequences; I was told time and again that things would end with the “Americanization” of the economy.
In fact, Germans have been in almost constant economic crisis since unification, and life has certainly gotten more difficult. High unemployment has been common for years—it’s around 8 percent now for Germany as a whole, but has topped 11 percent in past years. Some eastern German states (including Berlin) regularly exceed 15 percent unemployment. In the last few years, Germany has seen a major overhaul of the unemployment insurance system, usually referred to as “Hartz IV,” after the head of the commission that recommended the changes. Changes in the health insurance system have led to more visible inequalities in treatment. Prices rose with the introduction of the euro.
There’s no question that Germans’ standard of living is lower than it was when I first arrived in the 1980s. But it was extraordinarily high at the time. And despite the reforms, the much-feared “Americanization” never happened. Germans across the ideological spectrum continue to support the “social” part of the “social market economy,” and a broad-based consensus on the right to a minimum acceptable standard of living informs Germany’s political decision-making.
East Germans, meanwhile, have their own take on Germany’s economic problems. They have not forgotten—or perhaps this year, the twentieth anniversary of the fall of the Berlin Wall, with its numerous commemorative events, has reminded them once again—how their economy was dismantled, piece by piece, after unification. Nearly everyone has a story to tell about a viable local business or industry that was closed down, often in order to eliminate a threat to West German competitors. Instead of the “blooming landscapes” former Chancellor Helmut Kohl promised East Germans in his 1990 election campaign, eastern Germany has become (at least in part) something of a depopulating wasteland, with talented young people leaving in droves for better opportunities in the West.
True, there have been positive economic developments; writer Monica Maron recently published a book on the city of Bitterfeld, which she first wrote about in the 1980s when its chemical industry had polluted it to almost horror-movie proportions. Today, the city is a modern, clean, industrial complex, an economic as well as environmental success story. But Bitterfeld is more the exception than the rule. For many eastern Germans, even if the financial crisis should hit Germany with greater force, it is merely a reflection, on the national level, of their own ongoing experience.
In any case, whatever the actual economic outlook, the consensus seems to be that none of the German parties is currently interested in passing along any bad economic news, let alone cutting spending, since they are up for national elections in September. Instead, they are passing out favors, like an increase in pensions slated to begin this summer. If serious measures become necessary, they will likely have to wait until after the elections. It is likely, though, that the social net will continue to protect Germans from the worst aspects of the economic catastrophe.
Belinda Cooper, a senior fellow at the World Policy Institute and co-founder of its Citizenship and Security Program, is an adjunct professor at New York University’s Center for Global Affairs. Cooper, the editor of War Crimes: The Legacy of Nuremberg, teaches and lectures on human rights, international law, and the “war on terror.”