This is no longer a market economy

There have always been two opposing economic principles: The principle of the market economy with entrepreneurial freedom and a guarantee for property which should enable and reward decentralised, self-responsible economic activity and, on the other hand, the centralised administrative economy which centrally directs production and distribution, dictating the economic participants when, what and how much they may produce or consume.
  The author had the most dramatic conversation on this topic with the head of China’s central planning. After presenting to officials on privatisation and its benefits, he received an invitation to the Central Planning Bureau to discuss the issue. While the starting point for the Chinese was the Party’s rule over the economy as well, the author’s approach was about economic profitability.

Experiences in China

On the first day, the author was able to convince the Chinese with hundreds of privatisation calculations by the Mittelstandsinstitut Hannover that in principle decentralised production by free entrepreneurs was cheaper by an average of 30 to 40 % – but often more than 100 % – and therefore the population would be better supplied than by a state production by amateur entrepreneurs. The Chinese conceded that private enterprises are generally more cost-oriented, more responsive to the market and more variable in serving consumers than public providers. The author was able to prove to them with international examples that more entrepreneurs meant more and better supply to the population at cheaper costs and prices, while fewer entrepreneurs – i.e., more state supply – meant more expensive, poorer and less demand-responsive supply to consumers.
  However, the Chinese economy at that time was mainly determined by large state-owned enterprises, which in turn – as in the GDR – had not only one main production unit, but many small sub-units, up to and including supplying their own employees. The Chinese feared that releasing these large corporations into free-market entrepreneurial freedom would risk a takeover and domination by international capital. This would reduce the Party’s power to issue directives, and the Chinese economy would lose its collective planned economy goals.

Economic growth and state control

The Chinese had apparently continued their discussions during the night, so that on the second day it was no longer a question of whether free private entrepreneurs in the lower levels (mid-tier) were better than the Party’s amateur entrepreneurs, but only of the degree of decentralised entrepreneurial freedom and central control that would achieve the highest economic growth and at the same time still be controllable by the Party.
  At breakfast, the author asked the top central planning secretary what decision he had come to during the night. The answer: “The party will not give up the power to steer the economy.”
  Such discussions also took place after reunification in the former GDR, but against the background that the GDR’s administrative-economic system had failed. There were only 180,000 entrepreneurs there, where before communism more than 3 million entrepreneurs and their businesses had created more social product than the Ruhr region. It was therefore indisputable that a market economy system should be re-established in the new federal states as in West Germany:

• with freedom of trade for self-responsible entrepreneurs
• who were to determine their own production or service in terms of type, quantity, and price,
• were allowed to work at their own risk, but also for their own profit.
• and whose private economic success was secured by the property guarantee of the Basic Law.

Treuhand* prevented
market economy in East Germany

At the time, the author had proposed that half of the “state-owned” enterprises be reserved for their own employees (employee participation) instead of breaking them up, giving them away to international corporations or selling them off in some other way. This might have become the most modern market economy in the world, a development that was prevented by a Treuhand president controlled by international high finance. Thus, although the new German states have some corporate branches, they have an entrepreneurial deficit and therefore a growth deficit, a deficit of decentralised production and thus jobs and taxes, while the profits of the corporate branches flow westwards all the way across the Atlantic.
  However, the fact that the reconstruction in the new federal states has succeeded despite these restrictions is thanks to the 100,000 local and immigrant entrepreneurs who, based on the new freedom of trade and the guarantee of ownership, have created new businesses, productions and goods in the new federal states.
  Meanwhile, the difference between the Chinese and the GDR economic development is that in the GDR the administrative economy and thus the state control was enforced to the lowest level and failed. The Chinese leadership, on the other hand, has freed up the lower economic levels by developing a broad middle class and has wisely concentrated on directing large enterprises and central planning. They have been successful with this so far.

New forced regulation and the “Great Reset”

Until the turn of the millennium, it was scientifically and politically undisputed that, due to the strong middle class developing in it, the market economy was the more efficient economic system compared to an administrative economy. Now the billionaires of the international financial industry, with the help of Klaus Schwab in Davos (World Economic Forum) and hundreds of NGOs, have not only brought about globalisation but, with the help of financial and political crises as well as panic theories of mass extinction (Corona), extinction of species, climate catastrophe and doomsday scenarios, they have been able to reassert their demand for compulsory state regulation and – as Schwab openly wrote in his book “The Great Reset” – they want to reduce the human population (world epidemics such as Corona), reduce the production of industries they do not control (such as the automobile industry) by forcibly curbing consumption, thus reducing demand, revolutionising our dealing of nature and dictating the supply of consumers according to quantity and type.
  For far too long the middle classes have dismissed this ideology of a cultural, civilisational, economic and social revolution, pursued by a global upper class, as “environmental nonsense” and have not taken its missionaries seriously. But since they have now come to power in the USA, Canada, Australia, and Germany and have been able to take over the political switching stations, the green revolution is suddenly becoming reality through forced regulation of our culture (gender), our civilisation (cars, heating), our society (lockdown) and our economy (ecology instead of economy).

Collective goals and purposes

Internationally – and now, unfortunately, also in Germany – it is no longer about individual freedom, justice, property and prosperity, but about collective goals and purposes such as climate correction, multi-cultural society, species extinction and even the end of the world, which – since they are not in the interest of individual citizens – have to be formulated, regulated and dictated by the central state.
  In the past, only those who were professionally trained and knew how to convince could become civil servants or ministers. Since 2021, 10,000 poorly educated people without specialist knowledge have already become civil servants and even educational dropouts have become ministers, because it is about the implementation of an ideology and no longer about the economic well-being, freedom, and justice for the individual citizen.
  Economically, the market economy with individual freedom, self-responsibility, self-reliance, and ownership provided us with 70 years of the highest prosperity ever seen in Germany. Now our government is switching from a market economy back to a central administrative economy, trying to regulate production down to the individual entrepreneurs, to ban production or consumption, to restrict the freedom of our entrepreneurs through more and more specific laws, so that in the meantime bureaucracy is the biggest problem of our small and medium-sized entrepreneurs, the legal property guarantee of the German Basic Law (Art. 14 GG) through economic expropriation (heating dictates, restrictions on the use of agriculture, technical strangulation of the car, energy arbitrariness, etc.).

What the state does
also affects the middle class

For the first time, small and medium-sized businesses are now realising how much of their individual success – which they usually attribute only to themselves – is due to public data (production conditions) promoting or not promoting the economy. Under the favourable economic conditions of the past decades, even moderate entrepreneurs could be successful. With the new economy-damaging green economic conditions, more than a million even capable entrepreneurs will perish in the mid-term. Even the best entrepreneur has no chance of survival against compulsory regulations, bans and bureaucratic restrictions. Without entrepreneurial freedom of action, without a guarantee of ownership of a profit and under pressure of increasing regulations of conditions foreign to the economy and economic expropriations, economic activities in Germany are not only increasingly unprofitable, but increasingly impossible. The mood in the small and medium size sector has never been as bad as it is at present.  •

* The Treuhandanstalt (“Trust agency”), colloquially referred to as Treuhand, was an agency established by the government of the German Democratic Republic to reprivatise/privatise East German enterprises, Volkseigene Betriebe (VEBs), prior to German reunification.

(Translation Current Concerns)