Objections to Baerbock: On the way to a planned economy?


As at: 06/28/2021 15:28

Germany is “on the way to becoming a green, forbidden state with a planned economy,” says the AfD. “Bild TV” also talks about a planned economy in the context of a candidate for Chancellor Baerbock. What is behind this term?

Patrick Gensing, ARD fact-finding editors

“Impoverishment, planned economy, conformism, dictatorship, danger of war: a new republic will emerge with Baerbock as chancellor,” strikes the right-wing Compact magazine in a highly alarmist tone. The AfD district association writes on Facebook: “We are on the way to a green forbidden state, including a planned economy, the undermining of fundamental rights and the gradual abolition of our freedom.” And the Bild TV reporter believes Chancellor Annalena Baerbock would be a direct route to a planned economy.

FDP leader Christian Lindner said in 2019 that the Greens wanted to use climate change to “rebuild an industry with a planned economy and re-educate people.”

Central control

But what exactly is a planned economy? This term usually describes the economy of central government. According to Brockhaus, it is “an economic order in which economic processes (production, investment activity and consumption of goods) are controlled by a central government in accordance with the overall objectives of the state leadership by means of macroeconomic plans.”

Characteristically, the market mechanism as the central instrument for controlling the market economy has largely been replaced by a hierarchically organized, bureaucratic control apparatus that enforces its decisions by means of binding directives. A planned economy requires far-reaching state interference in the production process and extensive restrictions on private property rights. The historical prototype since 1917 is the socialist planned economy.

“Socio-ecological transformation”

To what extent are there elements of the planned economy in the Greens’ election program? Nowhere is there any mention of nationalization or central control of the economy. The Greens want to distribute the money differently, promising billions of investments in “socio-ecological transformation”, which should ensure safe jobs.

The party wants to put the Paris climate agreement at the center of government policy. The party tries to deny the accusation of wanting to educate the people: “We believe our job is to create better rules, not better people. Such clear political regulatory framework also takes the strain off us as people in our daily life and creates freedom. ‘

The economy must be climate neutral, she continues. This requires “socio-ecological restoration of our market economy”, “ambitious limit values, CO2 reduction targets and product standards of the German and European economy” and “incentives for new investments”.

No central control or nationalization

Asked André Steiner from the Center for Contemporary History Leibniz said that “it is certain that the Greens want more targeted state influence than, for example, the FDP.” But what determines “the ecological-social nature of the market economy is that the state framework pushes the activities of – mostly – private firms in certain socially desirable directions – but does not force them,” says Steiner.

Nevertheless, it will remain a market economy – emphasizes Steiner, who studies, inter alia, the economic history of post-war Germany. Referring to the Greens’ election manifesto, he says:

Even the expansion targets for renewable energy, regulatory limit value requirements, CO2 reduction targets and product standards or the centralization of the power grid have nothing to do with the planned economy of the GDR. There is no expropriation or central binding production targets etc., rather, renewable energy expansion targets should be achieved through market incentives – if at all specified.

the charges against Biden

The allegations are similar to statements made in the recent US election campaign. Then-President Donald Trump has repeatedly argued that Democrat candidate Joe Biden was a socialist. This was especially true of topics such as minimum wages, health insurance and environmental protection. Fact-checking projects such as Politifact classified these claims as false.

Antony Davies of Duquesne University said the real problem is “thinking in binary terms: socialism versus capitalism.” In an interview with Politifact, he stressed that “there is no example of a purely socialist or purely capitalist economy. All economies are on a continuum somewhere between the two extremes.”

“Campaign rhetoric”

There is therefore no evidence that Baerbock and the Greens wanted to build a planned economy. Historian Steiner believes that anyone who makes such claims is likely to be insufficiently informed about the planned economies à la East Germany. In this respect, they should be seen more as campaign rhetoric.

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