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The German Mittelstand

kieranvelasquez.substack.com

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Re: The German Mittelstand

#21

Post by rbinv »

jonstewart wrote: post #4

> Advancing the precedent set by Alfred, generations of Krupps would continue to develop the region through various private and public works, for almost a century into the 1920s. > > With their basic needs addressed and the workforce inculcated with the “Kruppianer spirit,” the firm crossed the fifth ring. They forged an empire that, by the late 1950s, “What did Krupp make in the 1930s?” This was kind of an interesti…

Thanks for the meme chuckle. For the uninitiated: https://i.imgflip.com/ayibmd.jpg

Re: The German Mittelstand

#22

Post by avhception »

clarionbell wrote: post #15
avhception wrote: post #6

Earlier quoted context omitted.

I guess it depends on where you would draw the line with respect to what still constitutes "Mittelstand", but in the small-town circles where my family operated our company, outsourcing wasn't really a thing. Most of the companies were around 30 to 3000 employees, and mostly operated B2B for the automotive industry. There was exactly one company which got overly ambitious and started to emit shares. It was a big deal…

This seriously needs to be repeated again and again. It's not that Mittelstand got greedy. Neither did most other small and medium companies in Europe and US. They gradually became less competitive by overregulation, high input costs, and complete lack of state support. The last sometimes bordering on hostility.

Anecdote time re: Over-regulation: We had a side-hustle, automatic sorting machines. Mostly nuts and bolts, but other stuff, too. About 10 employees. By some miracle, it managed to survive the loss of it's biggest customer (the aforementioned electroplating company). But we had to move shop. After we got a place, the city terminated the operating permit for the building. Why? Because, you see, the company that operated the building before had it filed as "metal working", so that is what the permit said. But _sorting_ metal doesn't alter it, so the permit doesn't hold! And they wouldn't issue a new one. Fun times.

Re: The German Mittelstand

#23

Post by izacus »

crote wrote: post #12
lz400 wrote: post #2

re: the crisis of the Mittelstand in competing VS China, I'm reminded of this tweet. It's a fictitious illustrative case not a serious study but I think it describes some of the root challenges of western industrial culture when it comes to competing against China https://x.com/AngelicaOung/status/1921364873444986888

This is why the West is getting its ass kicked in non-legacy industries. Our MBAs have internalized the idea that you "win at capitalism" by buying out your competitors, making products shitty and expensive, and making shareholders filthy rich. Their MBAs believe that it means selling the best product possible at razor-thin margins, killing your competitors by being the better choice . Everyone is always complaining…

Somehow MBAs, our champions of capitalism, completely forgot that capitalism only really works for society when free market competition takes place.

This is what's attractive about the "Mittlestand" - having a wide variety of companies competing in the same market so they push each other to improve services.

21st century consolidation is a direct opposite of that.

Re: The German Mittelstand

#24

Post by vrganj »

izacus wrote: post #23
crote wrote: post #12

Earlier quoted context omitted.

This is why the West is getting its ass kicked in non-legacy industries. Our MBAs have internalized the idea that you "win at capitalism" by buying out your competitors, making products shitty and expensive, and making shareholders filthy rich. Their MBAs believe that it means selling the best product possible at razor-thin margins, killing your competitors by being the better choice . Everyone is always complaining…

Somehow MBAs, our champions of capitalism, completely forgot that capitalism only really works for society when free market competition takes place. This is what's attractive about the "Mittlestand" - having a wide variety of companies competing in the same market so they push each other to improve services. 21st century consolidation is a direct opposite of that.

But consolidation is the inherent end game of capitalism.

It's almost as if it was full of contradictions that will always result in crises and a bad way to organize a society...

Re: The German Mittelstand

#25

Post by gyulai »

RandomLensman wrote: post #18
gyulai wrote: post #14

Earlier quoted context omitted.

It was providing context which some people may find useful. The article, rather than being a strictly historical treatise, is taking the bait to propagate some narratives about the motivations behind why these companies do business the way they do. Reframe "family values" as "paying less" and see where you land on a critical appraisal. Reframe "rooted in a region" as follows: Being a relatively large fish in a relati…

Well, people could move to places with higher wages (e.g., cities), no? Being in a place where you could help shape local politics seems like a good move, no? What is the issue with "excellence in craft" as keeping "out the competion"? Why would anyone not want to beat the competion?

> people could move to places with higher wages (e.g., cities), no?

...well, often times, when you have a family and real estate in a region, it might be inopportune to do that, and my contention is that some employers capitalize on that immobility by offering worse terms.

> Being in a place where you could help shape local politics seems like a good move, no?

Sure. If you want to buy a forest, have your buddy the mayor re-zone it as industrial, and build a logistics hub there, it's a good move. Not so good, if you're the company from out of town that wants to move in and do the same thing, to compete with the incumbent (and you aren't friends with the mayor). Not so good, if you kind of liked the forest.

> What is the issue with "excellence in craft" as keeping "out the competion"? Why would anyone not want to beat the competion?

You can beat the competition by being a plumber who offers better plumbing at lower prices. Or the better plumbing and lower prices might be from the plumber who just moved here from Turkey. And then you can beat that would-be competition through regulatory capture by having your buddies in politics pass a law to assert that the craftsmanship of the Turkish feller is somehow inferior to yours and they aren't allowed to work as a plumber.

Re: The German Mittelstand

#26

Post by RandomLensman »

gyulai wrote: post #25
RandomLensman wrote: post #18

Earlier quoted context omitted.

Well, people could move to places with higher wages (e.g., cities), no? Being in a place where you could help shape local politics seems like a good move, no? What is the issue with "excellence in craft" as keeping "out the competion"? Why would anyone not want to beat the competion?

> people could move to places with higher wages (e.g., cities), no? ...well, often times, when you have a family and real estate in a region, it might be inopportune to do that, and my contention is that some employers capitalize on that immobility by offering worse terms. > Being in a place where you could help shape local politics seems like a good move, no? Sure. If you want to buy a forest, have your buddy the ma…

Not wanting to move might have costs.

Yes, local integration has value, but also means you had to stick around to get there - comes with a cost. And local people show plenty ability to protect things/stop building etc.

The regulations on Handwerk are so old, not sure how you could put that on the Mittelstand.

Re: The German Mittelstand

#27

Post by barrenko »

Post WW1, the US was a world hegemon, lent money and set low interest rates and for the past 100 years the countries of the Western EU, fattened from their ancient trade and slavery profits were engaged in a lot of delulu thinking (we could even note franco-prussian war for this).

Effectively there is no job / value creation since at least the 90s, coupled with uncontrolled mass immigration, and what is going on is stagnation and eventually fall. Lento, then adagio, then allegro, then presto as nn taleb says.

We can see this mindset in this summers AC discourse, doing less than Pakistan on the Hormuz situation et c., et c.

Re: The German Mittelstand

#28

Post by AdamN »

HawtAds wrote: post #19
camillomiller wrote: post #10

I was enjoying this until this signature sentence by Claude: >>Slowly but surely, it did, once again becoming a world-renowned brand, now separate from that of Thonet. The same town, the same factory, the same people—just a different name The moment I see this, the piece loses all of its credibility. I cannot take any of the factual informations I was enjoying as implicitly correct now, I just can’t. Authors should e…

You do know em dashes are a normal part of formal prose right? If you go through pre GPT New Yorker and the Atlantic articles, there are plenty of em dashes too.

The New Yorker has a whole style guide. Most people aren't writing "née" or "reëlected" very often but the New Yorker keeps those formats and even has a custom typeface.

Yes em-dashes are real but aside from a few NY-based magazines with real editors, writers aren't actually using them very much. I'm a bit sad because I like using them and now I think twice before doing so in case it is misinterpreted as an AI signature.

Re: The German Mittelstand

#29

Post by camillomiller »

HawtAds wrote: post #19
camillomiller wrote: post #10

I was enjoying this until this signature sentence by Claude: >>Slowly but surely, it did, once again becoming a world-renowned brand, now separate from that of Thonet. The same town, the same factory, the same people—just a different name The moment I see this, the piece loses all of its credibility. I cannot take any of the factual informations I was enjoying as implicitly correct now, I just can’t. Authors should e…

You do know em dashes are a normal part of formal prose right? If you go through pre GPT New Yorker and the Atlantic articles, there are plenty of em dashes too.

It has nothing to do with the em dash, you AI-dweeb. The entire construction is pure LLM slop. Go touch some AI-generated grass.

Re: The German Mittelstand

#30

Post by gyulai »

RandomLensman wrote: post #26
gyulai wrote: post #25

Earlier quoted context omitted.

> people could move to places with higher wages (e.g., cities), no? ...well, often times, when you have a family and real estate in a region, it might be inopportune to do that, and my contention is that some employers capitalize on that immobility by offering worse terms. > Being in a place where you could help shape local politics seems like a good move, no? Sure. If you want to buy a forest, have your buddy the ma…

Not wanting to move might have costs. Yes, local integration has value, but also means you had to stick around to get there - comes with a cost. And local people show plenty ability to protect things/stop building etc. The regulations on Handwerk are so old, not sure how you could put that on the Mittelstand.

> The regulations on Handwerk are so old, not sure how you could put that on the Mittelstand.

Exactly. These regulations stem from the same chapter of history as when kings used to grant monopolies (to the East India company, and similar) in their respective industries. It didn't cost the king anything and it did a political favour to those companies, which might then reciprocate. Or the monopoly might have been the king's quid-pro-quo for some favour that the company had done him.

Monopolies are now widely recognized as bad. The monopoly didn't cost the king anything, but the cost was born by all consumers.

In the centuries that passed, some countries with a more libertarian bend got rid of the guilds and their privileges, or never started them in the first place. In other countries (notably the "old world"), these constituencies have remained politically strong enough over all those centuries to still be around now.

So, this romanticizing about the "proud old tradition" is completely the wrong reaction. There are many things with an "old tradition" where it would seem quite odd if a given country hadn't gotten rid of it (like collective punishment, or whatever; the examples are easy to think of). So something being old is neither here nor there.

> Yes, local integration has value, but also means you had to stick around to get there - comes with a cost.

Not sure if you're implying that regulatory capture of local government is some kind of just reward for "sticking around." If so, I disagree.

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