Ali’s blog

Mostly quant stuff with occasional digressions

Destitution in Germany

Posted by alifinmath on April 22, 2008

In The Local:

One in four German families live below poverty line

The number of German families facing destitution is rising, as one out of every four households live below the poverty line, according to a new survey.

At least 26 percent of Germans do not earn enough money to sufficiently support themselves, a significant rise from 13.5 percent in 2003, German magazine Der Spiegel reports in its latest issue.

I haven’t been able to find the original article in the online version of Der Spiegel, so I suppose I’ll have to look at the print copy. These kind of figures spell the end of bourgoisie politics-as-usual: the Great Depression provided a boost to both the Communists and the Nazis in Germany, as Germans came to feel that the usual parties had nothing to offer. I daresay the same will occur eventually in the USA, despite the incessant barrage of mind-deadening propaganda  which we are mercilessly exposed to around the clock. I’m not saying radical movements will have any real panacea to deep-seated and intractable problems; merely that people (even sheeple!) will get fed up to the back teeth with puerile debates on why a contender for office doesn’t wear an American flag lapel pin. Nero fiddles while Rome burns.



2 Responses to “Destitution in Germany”

  1. Chris Prouty said

    Bash capitalism all you want, but empirical data shows time and again that it is simply the best system in providing as many people as possible with a high standard of living. Germany is certainly in the top two or three biggest economic players in Europe, yet it is still a highly socialist state. Even the U.S., with all our problems, doesn’t come close to 1/4 citizens below the poverty line. France is in even worse shape, with perpetual unemployment, which is now accepted as standard, at levels only seen in America during the Great Depression. Supporters of Marxist ideals love to point to oil-rich northern European countries as a model for modern-day communism, but the only socialist utopia that exists is the one heavily subsidized by natural resources, which, by definition, is doomed to expire.

    I pity European citizens. At least when the government confiscates our assets we can use capital markets to bet on which firm can grease the government contract wheels best. Europe uses the money to cripple its population with the scourge of entitlement.

  2. alifinmath said

    Opinions vary. Also, I’m not aware of any “Marxist ideals”: Marx didn’t have that much to say about the shape of any future society (except incidentally): most of his work analysed the capitalism of his period.

    US poverty rates are *consistently higher* than those of Western Europe. Part of the problem in discussion is that like isn’t being compared with like: official measures of US poverty are not the kind of measures used in Europe. There’s more discussion here in a well-written Wikipedia article:

    QUOTE In the EU, “relative poverty” is defined as an income below 60% of the national median equalized disposable income after social transfers for a comparable household. In Germany, for example, the official relative poverty line for a single adult person in 2003 was 938 euros per month (11,256 euros/year, $12,382 PPP. West Germany 974 euros/month, 11,688 euros/year, $12,857 PPP). For a family of four with two children below 14 years the poverty line was 1969.8 euros per month ($2,167 PPP) or 23,640 euros ($26,004 PPP) per year. According to Eurostat the percentage of people in Germany living at risk of poverty (relative poverty) in 2004 was 16% (official national rate 13.5% in 2003). Additional definitions for poverty in Germany are “poverty” (50% median) and “strict poverty” (40% median, national rate 1.9% in 2003). Generally the percentage for “relative poverty” is much higher than the quota for “strict poverty”. The U.S concept is best comparable to “strict poverty”. By European standards the official (relative) poverty rate in the United States would be significantly higher than it is by the U.S. measure. A research paper from the OECD calculates the relative poverty rate for the United States at 16% for 50% median of disposable income and nearly 24% for 60% of median disposable income[14] (OECD average: 11% for 50% median, 16% for 60% median).UNQUOTE

    Incidentally, one can also argue that it’s the resource-rich USA that has allowed such high standards of living (the USA sits on 1/3 of the world’s natural resources). An argument for the success of capitalism might be more plausible with regard to Japan, Singapore, and Switzerland. I’ve yet to come across a credible argument on how American capitalism has been so very successful — except for the minority of winners.

    And en passant, I’m not aware that Sweden, Denmark, and Finland are oil-rich.

    US capitalism will continue to undergo change. The root of the present financial crisis is probably that working people, ordinary Americans, haven’t had enough purchasing power: too much has been siphoned by way of the profits of monopoly and financial capital; it’s been one of the contradictions that these super-profits have hinged on the continued purchasing of underpaid workers; the (temporary) way out of this contradiction has been the ballooning of household debt: a problem which is now coming home to roost.

    Finally, when people say “capitalism,” what exactly do they mean? Without operational definitions, discussion is impossible. There are strengths and weakness to every economic system. Unless, that is, people idealise some (imaginary and non-existent) system and raise this idealisation to the level of theological dogma.

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