Money cannot buy everything. The most significant lesson economists have learned since the fall of the Berlin Wall, a remarkable triumph of human freedom, is the importance of noneconomic dimensions in the transformation to a free market economy. Berlin became Berlin again, and no force in the world could have altered the dynamic of changing times. But the learning curve of how to do things right was not that smooth. The integration of former socialist communities with the West is not fiscal alone and does not succeed by pouring in dollars and waiting for markets to take care of the rest.
If any politician in Europe can speak on the subject with the authority of someone who has made the journey, it is Kurt H. Biedenkopf, the minister president of the eastern German state of Saxony. His credentials are extraordinary, and not only because he is an economist and lawyer with a distinguished career in politics and academia. At the end of 1989, when everyone in Germany was moving from east to west, Biedenkopf took the road less traveled. He went in the opposite direction by accepting a professorship in economics at Leipzig University.
He was offered the job after giving a lecture and asking how he could help. "Then you are one of us," Biedenkopf said he was told, recounting the story at a dinner forum Monday organized by the Konrad Adenauer Foundation. Biedenkopf became so involved in becoming one of them that he ran for office and was elected, and then reelected three times, as president of Saxony.
Biedenkopf, who will turn 70 in January, described this period, which began when he was 60, as "one of the most exciting times of my life." Until then he had served as a state legislator in North Rhine-Westphalia in what was then West Germany; as a member of the Bundestag, the German Parliament; and as state chairman of the Christian Democratic Union. He was a political rival of former chancellor Helmut Kohl and a casualty of his management of the CDU, German experts say. In addition to holding a top management position in the private sector, he also set up a think tank in Bonn devoted to free-market economics. Biedenkopf said the expectation by Kohl and some of his learned advisers that there would be a flowering in the east, comparing it to the relatively fast growth and quick adjustment that took place in West Germany after 1949, proved to be a mistake. The legal framework and sociocultural conditions that were needed to form the basis for a market economy were not there.
The knowledge accumulated about the importance of noneconomic factors and the pitfalls of the transformation process is going to be very useful when the European Union adds Poland, Hungary, the Czech Republic and the Baltic states. "Money is a necessary, but not a sufficient condition for building an industrial base," Biedenkopf said.
In creating the right conditions, it has to be recognized that the population involved in integration has had different life experiences. "You have to be very careful not to take their pride away from them--something we only found out during this process," he said. "It was significant in terms of feeling and not feeling as second-rate citizens."
The assumptions or attitude that East Germans had lived in a vacuum were very dangerous, Biedenkopf warned. "You really touch on the identity of these individuals, even if they lived in the lack of freedom. They also had human lives, they had developed, raised families and they had worked and felt their work was important. Until we understood it, a lot of damage had been done and we are just getting over it."
Biedenkopf said that the most important change in Germany over the next 10 years will be demographic, noting that a lot of planning is going into how to cope with the reality of an aging population. In 1950, one-third of the population was under 20 and one-sixth was over 60. In the year 2050, only one-sixth will be under 20 and one-third will be over 60. Other challenges lie in the labor market, with increased standards of living for less work, and in the educational sector and European integration. Because of the pluralism in Europe and Germany, planners and politicians must make sure integration does not lead to heightened nationalism, and they must anticipate how redesigned European institutions will affect governmental structures in Germany.
A Case for Agent 007?
Chinese Ambassador Li Zhao Xing walked out after half an hour of the screening last Wednesday of the latest James Bond film, "The World Is Not Enough," according to diplomats who attended the Motion Picture Association premiere.
The movie features an international power struggle against the backdrop of an oil crisis.
Although Li has instructed Chinese diplomats not to refuse media requests to talk to him "off the cuff," as one of them said yesterday, he was too busy to respond to questions about his departure from the movie. With China becoming a bigger player in world trade, he may have had more pressing business, perhaps?