The failure of German reunification

Plus: Why a Trump-Vance presidency would be good for Europe

Hi all. I’ve written for Compact about how the rise of the AfD in East Germany is rooted in the ruinous effects of economic reunification, which amounted to the colonisation, dispossession and deindustrialisation of the East German economy by West German capital. This resulted in an economic, social, and political trauma for East Germans whose effects are still felt to this day:

The transplantation of the FRG’s economic order into the former GDR was the most brutal neoliberal shock therapy ever implemented in a European country.

The first instrument of this shock therapy was monetary integration, which involved the former GDR’s adoption of the West-German mark, which was highly overvalued relative to the fundamentals of the East-German economy. This shattered the profitability of East-German firms, which quickly became insolvent, resulting in the immediate collapse of GDP and a sharp rise in unemployment. Most ominously, it kicked off what one study described as a “dramatic process of de-industrialization”.  

The second instrument was the mass privatization of state-owned firms, houses, and land by the infamous Treuhandanstalt, a West-German government-controlled trust agency that took control of almost all the assets of the former GDR with the aim of privatizing them as quickly as possible. By 1992, more than 80 percent of firms had already been privatized or closed. The overwhelming majority of the firms were sold to West German investors and companies—at bargain prices, of course. 

In other words, virtually the entire economy of the former socialist state passed into the hands of West-German capitalists.

Read the article here.

I’ve also written a short piece for UnHerd on why a Trump-Vance presidency would not be a “disaster” for Europe, as European elites are claiming, but rather an opportunity — not just to end the proxy war in Ukraine, but also to end Europe’s decades-long vassalage to the US. But, alas, that would require actual leaders in Europe:

[Vance], like Trump, is no peacenik, of course. Neither is he a non-interventionist, having espoused a hawkish approach vis-à-vis countries such as China and Iran — just like Trump. But they both adhere to a much more realist worldview than Biden’s liberal globalism, which justifies American interventionism in every corner of the planet in the name of upholding US hegemony. Trump’s vision “recognises that we are in an era of rising multipolarity, and you can’t fight against that — you have to deal with it”, Vance told the writer Sohrab Ahmari earlier this year. Thus, in choosing Vance as his vice-presidential candidate, Trump is signalling that he is serious about disengaging from Europe, bringing the war in Ukraine to a close, and pursuing a (slightly) less reckless foreign policy in general.

Read the article here.

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Thomas Fazi

Website: thomasfazi.net

Twitter: @battleforeurope 

Latest book: The Covid Consensus: The Global Assault on Democracy and the Poor—A Critique from the Left (co-authored with Toby Green)