Economist Moritz Schularick sees a lot of room for improvement in the Corona policy. The state showed great weaknesses during the corona pandemic and was organizationally and intellectually overwhelmed. A change in mentality is necessary, he says in the podcast “The Zero Hour”.
Horst von Buttlar: The role of the state has been discussed intensively since the pandemic. In your new book you did not give the German state a good report card. How come?
Moritz Schularick: Because he revealed major weaknesses in the pandemic. It wasn’t just about individual wrong decisions, but about patterns: the state was organizationally and intellectually overwhelmed.
The US political scientist Francis Fukuyama also speaks of “state capacity” here.
I find the term very apt. It is about the state’s ability to provide resources, invest, and respond to disasters. We need a proactive state, as we can see especially in the flood disaster – a state that not only reacts to crises, but also plans with foresight and is an important player.
In other words, a state that does not act instead of the market or against it, but instead acts together?
Moritz Schularick is Professor of Macroeconomics and Director of the Macrofinance Lab at the University of Bonn.
Take climate protection, for example: ideas such as CO2 prices or emissions trading are, of course, market instruments that have a major impact on ecological restructuring. But we need a competent state that drives the whole thing forward with intelligent transport concepts or the restructuring of the energy supply. Not parallel, but complementary: One has to mesh with the other, seamlessly, with each other, not against each other – by the way, that was also the case in the first industrial revolution.
And this state – whose mascot was the fax machine at times – we don’t have?
In this pandemic, the state has disenchanted itself. He urgently needs an upgrade.
In the book you ask quite provocatively: How should a state that does not manage to install fans in the classrooms of its schools control the complex ecological restructuring of the economy? Well that is the question …
It is precisely in crises that it shows how a state can deal with shocks. This is a stress test; in such crises the state becomes a risk manager who has to constantly make decisions under uncertainty. And the German state did not fill this role. It was too bureaucratic, too rigid, there was a lack of technology, there was a lack of data, and those involved were often simply intellectually overwhelmed.
But it won’t be easy to change that.
There is this Irish joke from the tourist in Ireland who asks a local how to get to London. And the local says: “It would be better if you didn’t start from here.” The way is long and arduous, but we have to go it.
What do we have to do specifically?
Three areas are central: First, it is actually simply about equipment. Computers, software, staff in authorities, we have to network health authorities – we have to invest a lot of money there. These are all very specific tasks. Second, I am interested in better networking science and politics. There were forms of exchange and committees in the pandemic. Nevertheless, I had the impression that decisions were made about talk shows – or Karl Lauterbach’s Twitter account. Why didn’t Jens Spahn always bring together the best minds in his ministry?
In your book you speak of an “outdated concept of independent expertise”. What do you mean by that?
In the pandemic, advice was given ad hoc, selectively and improvised, just as Christian Drosten acted as a consultant. It was about individual virologists, but not about involvement in the political process. I think we should ritualize it – as it is lived in the USA, where the brightest minds and strategists from universities sometimes switch to the White House and advise the president. The doors have to become more open for politics to be better.
You sat on a committee that only became known through the pandemic, in the National Academy of Sciences Leopoldina. Didn’t you feel like you were making a difference there?
I learned a lot there. But it is a body of the classic kind, like the Advisory Council. You discuss and then hand over a report, all from a safe distance from politics. I hope that the networking will become deeper, that we will leave the ivory tower and venture more into the battlefield of politics.
And what is your third point besides the hardware and this networking?
I’m talking about a change in mentality: The state and society as a whole are too despondent when it comes to taking risks, being pragmatic, sometimes going unconventional and breaking rules when it’s important. Let’s take the question of whether we vaccinate adolescents from the age of twelve. There are arguments for and some for against. Discussions have been going on for months. Why does nobody weigh up and decide? There’s a pattern: we’re too risk averse …
We are even afraid …
Yes, we shy away from change. In the spring our state lay on its back like a big bug and kicked: We had a state with a lot of limbs and legs, but we didn’t get ahead because we lacked the courage. One of the hallmarks of many crises is that the rules to which we cling are not in our manuals.
In the Anglo-Saxon tradition, the pragmatic decision applies: experiment, try – and even break rules without abolishing them immediately.
We need more of that. More self-confidence. In crises, we stand in our own way, and we noticed that when the vaccination campaign started, for example, when it came to who to vaccinate, in what order and whether family doctors should vaccinate – and above all, what you can do to get more quickly Produce vaccine. Much more was possible. Once we have made decisions, our country can develop great powers.
I have to say that in defense: Germany did not do that badly in the pandemic in comparison …
At first glance, that’s true, but the weaknesses and limits have nonetheless come to light.
What does this mean for the major challenges, such as the fight against climate change? There are suggestions, including for huge investments.
On the one hand, it’s about the money. But we also have to be braver. We have to think in terms of bigger projects. The Italian economist Mariana Mazzucato aptly speaks of “moonshots”, ie missions landing on the moon again – we have to learn to think in terms of such missions.
What could such a mission be today?
We could say: in five years we want to have a real high-speed network that connects all major cities and makes domestic flights superfluous. Then you have to mobilize all your strength and commit yourself to one goal – and in the end you have to hold the responsible people accountable if it doesn’t work out.
But is money really our problem? Most of the pots, be they for broadband or daycare centers, are often still full …
Sure, we often lack the capacity to spend this money. I can see that at my university too, there is often too little staff. But the cause lies deeper; there was also a phase in the past 20 years in which there was a prevailing mentality to save on every nook and cranny. Nobody came up with the idea of adding staff to a building authority. That was a mistake.
The question remains about the money: where will it come from after the pandemic? New debts or higher taxes?
We should stop the culture wars on how we finance future investments. The important thing now, to say it with Helmut Kohl, is what comes out in the end – we have to invest more. Whether we do this with secondary budgets or suspend the debt brake is of secondary importance. If investments benefit the next generations, the money is well spent. From an economic point of view, raising taxes would be nonsense. So much money is being saved in the world that many investors would like to give it to the German state for free. We just have to tap into the global piggy bank.
When the new Chancellor invites you and asks: What should I do first? What would you advise?
I would advise him or her that he or she exemplifies the change in mentality with all our might, that one seizes opportunities and does not always only see risks, that we become courageous. I would learn a little from Joe Biden. He has a mission, he really wants to change the country.
You can hear the entire conversation with Moritz Schularick here.
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