Research shows that Germany is far more similar to the US in economic terms than most people might imagine. Germany’s so-called Gini coefficient, a measure of income disparity, is 76 -- closer to the 80 in the United States than the 69 across the euro zone. In a Morgan Stanley ranking of 20 industrialised countries, Germany came in as the sixth most unequal, right after the US, preceded by Spain, Greece, Italy, and Portugal.Marcel Fratzscher, head of the German Institute for Economic Research, isn’t only concerned about income inequality in Germany; he also worries about systemic barriers to social mobility. “I don’t have a problem with the top 10%,” Fratzscher told Die Zeit. “I have a problem that the bottom 40% are being left behind.” Robust economic indicators and government transfers to the working poor mask the dire state of affairs, according to Fratzscher. Germany’s political class prefers to spend an extra 10 billion Euro on social benefits to paper over disparities than to invest in education and infrastructure, he said. “We’ve long become a society of classes, if not castes.” Germany’s socio-economic polarisation is finding political expression. In the autumn of 2014, a full year before the refugee crisis swept Germany, a group calling itself Pegida, or Patriotic Europeans Against the Islamisation of the Occident, began holding rallies in the eastern city of Dresden. The protests, which kept growing in size, were directed at Merkel’s government, “the lying press,” and foreigners seeking shelter and opportunity in Europe. The Alternative for Germany, or AfD, a eurosceptic party founded in the middle of the Greek debt crisis, seized on Pegida’s message of discontent and re-purposed itself to fight the establishment on the back of anti-immigrant sentiment. In 2014, the upstart party was voted into three state assemblies in eastern Germany. Since regional elections last months, the AfD is represented in half the country’s state legislatures and aims to enter parliament in next year’s national vote. “The conventions governing Germany’s political interactions are changing with incredible speed,” Dirk Kurbjuweit, deputy editor of Der Spiegel, wrote in a recent essay. The two-party dominance by the centre-right Christian Democrats and centre-left Social Democrats is under threat. A poll by the magazine found that 57% of Germans agreed with the statement: “Those guys up there will do whatever they want anyway, and my opinion doesn’t count.” Among AfD supporters, 88% agreed. With more than 255,000 “likes,” the AfD has more Facebook followers than the Christian Democrats and Social Democrats combined. Facebook has become a popular forum for people who feel their opinions are ignored by traditional media. The similarities between supporters of the AfD and the insurrection led by Donald Trump inside the Republican Party are hard to ignore. Both movements are a visceral reaction to voters’ fears about immigration, terrorism, and the arrogance of the powers-that-be. Both gain strength in the electronic echo chambers afforded by social media. Railing against political correctness is a substitute for policy-making. In Germany, as in the United States, bashing migrants -- particularly Muslims -- is most popular where there are relatively few of them. The reaction of German and US elites is also similar: Disregard, disavowal, disbelief. When The New York Times columnist David Brooks confessed last month that he was “not socially intermingled” with Trump supporters and “did not listen carefully enough,” he could have been speaking about the attitude toward the AfD taken by the editorial boards of Germany’s leading news organisations. Liberal societies are at risk in times of economic uncertainty. The political centre is stable when the middle class is strong. But if enough people feel they’re losing out, social conflict becomes inevitable. Populists feed on and drive polarisation. The kind of illiberal paradise that the likes of the AfD or Trump espouse already exists. Russia today offers a dystopian vision of a country run by an omnipotent leader where urban liberals have been shut up, the middle class is a demographic sliver between the super-rich and a vast underclass, and “patriotic” media spew fear and hate around the clock. Incidentally, when Russian President Vladimir Putin ran for his third term, one of his slogans was “Together to a great Russia.”
If a Der Spiegel cover is any indication of the mood in Germany, then Europe’s largest country is on the verge of an explosion. Two weeks ago, the news magazine highlighted the country’s growing income inequality in a cover story on “the divided nation.” The cover photo showed a couple in a gilded room with a dozen other people stooped in a claustrophobic cellar below them.
Last week, the magazine featured the “uprising of the Wutbuerger” -- a new German term combining the words for “rage” and “citizen” -- to describe people mad as hell about the political status quo. The headline screamed: “You guys up there are just lying to us all” over a paint-spattered image of German Chancellor Angela Merkel.
A yawning wealth gap and a voter rebellion nobody wanted to admit existed -- aren’t unique to the United States. Across the industrialised world, the middle class is finding it increasingly difficult to make ends meet, while the losers of globalisation are channelling their aggression into fringe politicians who know who’s to blame. Modern Germany, a paragon of social peace and political moderation, is no exception.
“We have reached a tipping point,” the Organisation for Economic Co-operation and Development warned last year. Income inequality in the 34 member countries is at its highest level in the past half century, the OECD said in a report. The average income of the richest 10% of the population is nine times that of the poorest 10% across the OECD, up from seven times 25 years earlier.
There is a time-tested European tradition of sneering at the crassness of American capitalism and the blowhards it produces. But Germans in particular are discovering that their society is not as equitable as they once believed, nor immune to the blather of populists. In the decades following World War II, West Germany built up its fabled social welfare system in part to compete with communist East Germany and in part to form a bulwark against the type of extremism that had given rise to Adolf Hitler. Consensus became a byword for the German way of doing politics.
After the collapse of communism in Eastern Europe and German reunification in 1990, the assumption was that the successful West German model would simply be transferred to the eastern half of the country. But as Germany struggled in an increasingly global economy, Merkel’s predecessor, Gerhard Schroeder, slashed social benefits as part of a sweeping reform to make the country more competitive.
Unemployment dropped, and the working poor emerged. Large parts of the former East Germany failed to catch up with the West, and an angry underclass that felt cheated by the promises of democracy was created.
