Openness! In all respects, this principle is crucial to the development of a worthy social market economy. And in all respects: with regard to a range of products that contribute to added value; looking at the technologies used; and looking at the profits achieved by companies looking for market opportunities. Of course, there are framework conditions that the state sets in advance, for example in terms of the environmental compatibility of products and technologies and the taxation of profits. But these conditions must allow open development and must not be arbitrary. Otherwise, it is a state-controlled economy, polemically speaking: a planned economy.
This week, there were two political demands in Germany that would point directly to a state-controlled economy if they were actually implemented: first, a ban on the internal combustion engine from 2035 demanded by the European Parliament, and second, the introduction of the “Tax on excess profits” ”Demanded by the Greens and supported by the SPD in the traffic light coalition.
A complete ban on internal combustion engines deals with a fundamental regulatory question: Should the state cut off the entire branch of research and development in one of the most important sectors of our private economy through a legal order and ensure that the automotive industry and its suppliers only further develop electric motors and produce? And this despite the fact that today it is not clear at all, could the alternative of synthetic fuels for individual and heavy transport not become technologically, ecologically and economically interesting at some point? As a market economist, you ask yourself: why would a ban make this branch of research totally unattractive? One thing is clear: large corporations such as Mercedes and VW, which are already heavily committed to the electric motor field, support the ban as it gives them the prospect of an abundant harvest of government subsidies over the next 13 years of research and production. There are no regulatory politicians at the executive levels in Stuttgart and Wolfsburg, but profit-oriented managers who are committed to their shareholders – not the taxpayers. Even the Association of the German Automotive Industry (VDA), as a broader interest group that also represents many medium-sized automotive suppliers, takes a much more critical view of the ban.
The discussion about introducing an “excess profit tax” is basically similar. The regulatory fact is this: the amount of profit is a very important market control parameter, especially in the area of incentives for market innovation. The pharmaceutical companies’ race to develop a new vaccine proved this convincingly: a whole series of consortia of companies from around the world started almost simultaneously, several were successful and many others were not. The former were rewarded with high profits, the latter “punished” with losses. This is how the market economy works. The successful ones – most notably Biontech in Mainz – reorganized the Mainz city budget in one fell swoop with trade tax revenues and contributed to the community by paying high income taxes. Punishing them later with the prospect of an “excess profit tax” is absurd. It would only drive pioneering companies of this type abroad. Attempting to apply the surplus tax only to specific sectors (e.g. oil companies) is of course extremely questionable from a legal and regulatory point of view: What are the selection criteria? What counts as normal profit and what as immoral “excess gain”? Which body determines all of this?
In short: Germany is a democratic constitutional state and a social market economy. The future must remain open – with technology and profit in mind. There is no room for bureaucratic arbitrariness.