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The German Mittelstand

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Re: The German Mittelstand

#31

Post by biowaffeln »

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…

don’t be too quick to judge, putting the text through pangram indicates it’s 100% human written. It didn’t strike me as too AI because it wasn’t superfluous; it literally was what happened. AI is using this phrase more as a stylistic device than an a factual statement

Re: The German Mittelstand

#32

Post by lz400 »

Incipient wrote: post #3
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

I don't think the fundamental premise is much of an issue - it's what a (mostly) free market is meant to do. Someone sells a chair for $100, someone else believes they can sell it for $80, so they do. There are two main complicating factors (outside of brand reputation and possibly some others?) 1) quality - someone accepts the $80 chair which is a little bit more wonky 2) the $100 company spent a few years developin…

Agreed, it's that the free market _allows_ you to do. What's concerning is that we're used to the "semi-benevolent" image of the free market where a company succeeds and then returns value to stock holders, and the employees and the investors and the country all share of the riches. Of course the executives and main shareholders get outsized returns, inequality might raise, but many people see a bit, and capitalism works, kind of.

This new Chinese "involutioned" capitalism is much more scary and robotic. The companies never really make money, becoming just an operation that maintains itself on minimum wage workers, all to the service of reducing prices. Shareholders don't make money, employees are semi-poor, nobody sees any returns.

But the customers see cheaper prices! you say. Sure, yes, the products get cheaper, but now think of yourself as an employee not a customer. Imagine the involutioned companies triumph. Your previous company, where you had a good salary goes bust. You find a job in an involutioned company where everyone is almost poor and worked to death just to reduce prices. Your portfolio goes to shit because companies don't make money anymore.... Sure, everything's cheaper now but I'm not sure that makes it better.

Re: The German Mittelstand

#33

Post by vladvasiliu »

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.

I think GP was talking about the phrasing itself, not the dash. I actually didn't notice the em dash itself when reading it and agreeing.

Re: The German Mittelstand

#34

Post by sassbadger »

avhception wrote: post #22
clarionbell wrote: post #15

Earlier quoted context omitted.

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 operat…

Honestly, in my view it's not an issue of overregulation but a malfunctioning administrative apparatus. Too much power is concentrated in the hands of few administrators who can interpret the law according to their own vibes, leaving businesses with few options of recourse without resorting to spending money on lawyers. It's the mideval mindset in the local administration that makes it so difficult, not the regulations per se.

The is a really eye opening interview with Marco Scheel from the small German company Nordwolle, where he describes the daily struggle with German administratives: https://dts.podtrac.com/redirect.mp3/files.lagedernation.org...

Re: The German Mittelstand

#35

Post by RandomLensman »

gyulai wrote: post #30
RandomLensman wrote: post #26

Earlier quoted context omitted.

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…

Societies get to decide on their "traditions" and they need not be efficient - the "new world" has oddities there, too. (Not sure how guilds in cities relate to kings if we are talking about Handwerk, though.) If people were dead set against things like Meisterzwang in some areas it would not exist (and it has indeed been removed in some areas).

It isn't regulatory capture of local government: local governments want business to stick around and having demonstrated sticking around is a signal there. What you don't want is someone coming in, collecting subsidies in varies ways to then leave quickly again.

Re: The German Mittelstand

#36

Post by pingou »

lz400 wrote: post #32
Incipient wrote: post #3

Earlier quoted context omitted.

I don't think the fundamental premise is much of an issue - it's what a (mostly) free market is meant to do. Someone sells a chair for $100, someone else believes they can sell it for $80, so they do. There are two main complicating factors (outside of brand reputation and possibly some others?) 1) quality - someone accepts the $80 chair which is a little bit more wonky 2) the $100 company spent a few years developin…

Agreed, it's that the free market _allows_ you to do. What's concerning is that we're used to the "semi-benevolent" image of the free market where a company succeeds and then returns value to stock holders, and the employees and the investors and the country all share of the riches. Of course the executives and main shareholders get outsized returns, inequality might raise, but many people see a bit, and capitalism w…

But if everything is cheaper, isn't it exactly the same as if everybody is richer? Except that it could incentive people to put their money into rent seeking businesses and increase the real estate prices for example.

Re: The German Mittelstand

#37

Post by close04 »

sassbadger wrote: post #34
avhception wrote: post #22

Earlier quoted context omitted.

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 operat…

Honestly, in my view it's not an issue of overregulation but a malfunctioning administrative apparatus. Too much power is concentrated in the hands of few administrators who can interpret the law according to their own vibes, leaving businesses with few options of recourse without resorting to spending money on lawyers. It's the mideval mindset in the local administration that makes it so difficult, not the regulatio…

Sadly even eliminating all bureaucracy isn't the Holy Grail of saving the local workshop. The company has to pay German level taxes, the workers have to pay German cost of living, and most business owners also want to enjoy the fruit of their labor and that fruit in Germany usually wears a Porsche badge. These are the obvious and "easy" ones but probably not the most important ones.

The difficult problems are the entire ecosystems, supply chains, and tight integration that are just on very different levels between Germany and China. Every part of the supply chain has to be optimized or else it eats into the margins. China is a beast at "extreme supply chain micro-optimization". It would take decades to build equivalent ecosystems elsewhere, and in the meantime implement artificial barriers to keep China less competitive on Western markets.

This is true for all of Europe and the Western world at least.

This video [1] highlights just how big a gap there is between China and everyone else.

[1] https://www.youtube.com/shorts/h7McXnWRCQY

Re: The German Mittelstand

#38

Post by ahartmetz »

vrganj wrote: post #24
izacus wrote: post #23

Earlier quoted context omitted.

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...

Some of these contradictions can be fixed well enough by government intervention to make capitalism the best known system. It used to work pretty well for several decades.

Re: The German Mittelstand

#39

Post by gyulai »

RandomLensman wrote: post #35
gyulai wrote: post #30

Earlier quoted context omitted.

> 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…

Societies get to decide on their "traditions" and they need not be efficient - the "new world" has oddities there, too. (Not sure how guilds in cities relate to kings if we are talking about Handwerk, though.) If people were dead set against things like Meisterzwang in some areas it would not exist (and it has indeed been removed in some areas). It isn't regulatory capture of local government: local governments want…

> If people were dead set against things like Meisterzwang in some areas it would not exist

I'll give you an example: When I went to a copy shop in Austria to have my thesis bound, the attendant said they were only allowed to do it up to 200 pages. Since my thesis had 210 pages it didn't fall under some exemption, and I had to go to a master bookbinder. The result is: Disgruntled consumer forced by law to pay more.

Your "in a democratic society, if it wasn't wanted, it wouldn't exist" is a bit reductionist. It's a very technical / niche kind of law making and is rarely the subject of public debate or decisive in an election. So it's easier for the CDU (in Germany) or the ÖVP (in Austria), to just give these people what they ask for and collect donations from them, than to stop and think about what's good for the economy and for consumers.

All the while these same sectors that enjoy Meisterzwang (the need to be a master craftsman, to practice self-employed) are the ones shouting Fachkräftemangel, Fachkräftemangel (labour shortage, labour shortage) into every microphone that anyone ever puts in their face. And that's another attempt to co-opt the government for their cause, which is to bend the supply-demand balance in their favour, specifically as it regards to the job market for people who will accept low wages, while keeping out anyone who might compete with them on a self-employed basis thus safeguarding their respective local monopoly/oligopoly/cartel. The net result is: no plumber, when you need one.

I'm a mid-career professional, researching opportunities to make a career change right now, in my forties. In Germany, bookbinding is one of the very few things I might actually be allowed to do. In Austria, it would mean I'd have to apprentice for next-to-no salary for 3 years with a master bookbinder, before I get to set up shop, which, at age 42 and with a family to take care of, I'm just not going to do. Anyone who actually cares about preserving bookbinding as a craft in Austria should be opposed to this nonsense, because it's making it impossible/uneconomical for most people who might like to practice the craft to actually do so. The net result is: the craft of bookbinding dies.

...and yet the spin in PBS or ARTE style romanticized documentaries is: "look at these people and their proud traditions! ...shouldn't that be the envy of all of us office dwellers."

> collecting subsidies

In Germany, except for the very largest cities, municipalities don't do subsidies. Their political currency is not money but re-zoning, parking spots, favourable placements of kids in those public schools which happen to be marginally better than the other ones, that kind of thing. It's precisely the kind of currency that doesn't allow for the kind of opportunism you suggest.

Re: The German Mittelstand

#40

Post by RandomLensman »

gyulai wrote: post #39
RandomLensman wrote: post #35

Earlier quoted context omitted.

Societies get to decide on their "traditions" and they need not be efficient - the "new world" has oddities there, too. (Not sure how guilds in cities relate to kings if we are talking about Handwerk, though.) If people were dead set against things like Meisterzwang in some areas it would not exist (and it has indeed been removed in some areas). It isn't regulatory capture of local government: local governments want…

> If people were dead set against things like Meisterzwang in some areas it would not exist I'll give you an example: When I went to a copy shop in Austria to have my thesis bound, the attendant said they were only allowed to do it up to 200 pages. Since my thesis had 210 pages it didn't fall under some exemption, and I had to go to a master bookbinder. The result is: Disgruntled consumer forced by law to pay more. Y…

Can't speak to your issue in Austria with over 200 pages. Never encountered that in Germany. Germany has removed Meisterzwang for some areas - so there is that. If people want to regulate certain things they can, even if you don't like it - welcome to society.

When you look at some old craft products (like an old cathedral, for example) do you think it wrong to admire the craft, skill, and learning that went into it?

I meant subsidies in the broadest way,which for me includes re-zoning. Don't understand why that doesn't allow for what I wrote.

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