Tag: industry

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Tariffs trumped

Economists are used to differentiate between micro-and macro-level effects of tariffs. For each buyer of a car, import tariffs raise expectations about prices for a product. Many consumers will then decide to buy lower quality at the same price or postpone buying a new or replacement product for some time. For cars it might mean that many people will then decide to buy rather later than sooner. If thousands of people do so, the market will fall into recession overall and it will take months or years to come back to the same or a higher level. A political economy perspective has taught us that eager politicians are in favor of a short recession immediately after an election which increases the chances of re-election once the economy gets back to normal or catches up on lost growth. 

The US under Trump apparently gambles with such an economic rationale. Short term inflation is already rising, interest rates stay high before the upheaval caused by tariffs starts to settle. 

There is, however, another alternative mechanism at work as well. Thorstein Veblen long ago hinted towards what is not called in economics the Veblen effect. Some fancy cars for example can raise prices well above others because of their cleaving image. Just because they get even more expensive the buyers of such products gain additional attention as part of a social class which does not have to care much about their additional spending. The consequences of tariffs will most likely widen the gap between those saving dearly and those able to splash out cash despite increased tariffs. The most felt consequences, therefore, will be on social inequality within the US (compare WSJ 2025-4-24 A2 by Juliet Chung, “Richest of Rich Gain §1 Trillion”).

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Sport Fashion

Sport is fashion and fashion is sport. Not only in the Euro 2024 the teams make a big fuzz about the design of their sportswear, but certainly the Olympic games in Paris 2024 will demonstrate the close links between the 2 worlds. We might say playing football is a bit like a fashion catwalk. Keep going right on target, despite obstacles, when thousands of people are watching your performance and potential failures very closely. Making a “bella figura” is a must in both spheres. There is also a strong tendency for “the winner takes all”, that s/he takes the trophy and the jackpot.
Both worlds are also big business in their own right. It is at least 100 years old that sport and fashion got married. The “Musée des arts décoratifs” in Paris had an excellent exhibition on the combination of sport and fashion (booklet link). According to the curators both spheres have always been interlaced. High-level performance and specialized fashion just made for a splendid combination. As the rich and wealthy had more than a penny or two to spend on their leisure activities the combination of sport and fashion soon became itself a big business, beside the visible beauty of the bodies, movements and dresses. Just watch the breakdance fashion as the latest addition to the repertoire of olympic disciplines. In a recent article in “Le Monde” (2024-7-11) the value of the market of sports including its fashionable merchandising is estimated to reach a turnover of € 500 billion in 2022.
The competition of sports has been turned into a competition of the best images and videos. Fashionable as well as functional clothing can assist in climbing the podium. In the Euro 2024 Football Final the teams equipped with Adidas (Spain) and with Nike (England) compete for the trophy. Changing equipment sponsorship from one to the other can raise substantial amounts for a team (€ 100 million/year for the German national team). Big business seems to take over sports and fashion after the century-old marriage of sport and fashion. Since then, they have jointly been on an extended honeymoon. (Image from www.emptyspacetm.com 2024-7)

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Beggar thy neighbour

Modern economics has developed the concept of so-called external effects. The oldest version of it might also be referred to as “beggar thy neighbour”, as it was coined by Adam Smith the founder of classical economics. This describes an economic policy which does not care to make your neighbours worse off by enriching yourself. Applied to environmental economics or to regions, cantons or neighboring countries, this means a ruthless pursuing of investments, which are known to shuffle a large part of the costs onto other regions through damages, might be pursued nevertheless. This might be a valid hypothesis to test how the investment in skiing at high altitudes, increases the risks of flooding at the lower altitudes of rivers or valleys. There is scope for a redistribution of wealth from one region to another. The poor neighbor, however, is in a rather weak position to claim compensation as the link between the 2 events is hard to establish scientifically and mediated by an abstract form of overall climate change. The recent example from Switzerland adds to an increasing number of natural disasters, which are in fact man-made following a beggar thy neighbor rationale. (Image newspaper reading room in Stabi Berlin with NZZ from 2024-6-24).

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Betting vice

Betting is considered a vice. The industry has moved from the local bookmakers to the internet and is spread across countries and continents. Some legal advisers have classified betting as the fastest growing vice industry and it is about time to launch a wake up call for more oversight of what is going on in the sector. As betting like gambling seems to be working in conjunction with other addictions the potential of cumulative risks is quite high. Our brains tend to wire things together which frequently occur jointly. It is difficult to disentangle these co-occurrences later again. The major angle of attack is prevention.
Health journals start warnings of the detrimental effects persons and observe that the industry follows similar strategies as the tobacco industry to address as many people as possible. And this is very successful and profitable for them. Hence, prevention strategies should also follow what has been applied to smoking like the ban from restaurants and bars as well as the restrictions on advertising. We will have to accept that betting and gambling should not be as easily accessible as it is currently. Age restrictions have to be applied stringently. I bet this will take quite a long time until Europe and elsewhere the regulations will change. Some of the young get interested in even more stimulating activities like exploring arts (image below class at Neue Nationalgalerie Berlin 2024-6) rather than betting on who is going to win the Euro 2024 football matches.

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Hannover Fair

The annual science fair at Hannover is a kind of a show of things to touch and of those things that come to the public market in the near future. Most of the annual hype is about potentials of production. Rationalization, using few resources or innovative solutions of digitization are high on the agenda. Create your digital twin, save energy, make production more safe or cyber secured.
Robotics is another reason to visit the fair. Some 7 years ago I had my Sputnik experience there. The robotics company KUKA had demonstrated live the that assembling a car from pre-manufactured components takes just 10 minutes for the robots. Shortly afterwards the whole company was bought by Chinese investors. Roughly 5 years later we are swamped by cars from China. It was not that difficult to predict this at that time. Okay, we need to focus on more value added production and take our workforces (not only) in Europe along on the way. Reclaiming well-paid, unionized jobs in manufacturing, as Joe Biden does, will not be an easy task. Robots and their programming is expensive, but skilled workers, too. Hence, the solution is likely to be robot-assisted manufacturing as a kind of hybrid solution for cost-effective production systems.
Following the proceedings of the 2024 fair we are astonished to realize that visiting the fair is still a rather “physical exercise” walking through the halls. After the Covid-19 shock we expected a lot more “online content”. Instead we keep referring to webpages and newletters rather than virtual visits and tours. The preparation of the visit in advance remains a laborious adventure. However, the in-person networking activities in the industry are largely advanced by ease of exchanging virtual business cards and the “FEMWORX” activities.
This year’s Sputnik moment at Hannover is probably most likely related to the pervasive applications of AI across all areas of the industry and along the whole supply chain. Repairing and recycling have become mainstream activities (www.festo.com). Robotics for learning purposes can also be found to get you started with automating boring household tasks (www.igus.eu).
Visiting Hannover in person still involves lengthy road travel or expensive public transport (DB with ICE). Autonomous driving and ride sharing solutions might be a worthwhile topic for next year’s fair. Last year I thought we would meet in the “metaverse fair” rather than in Hannover 2024. Be prepared for another Sputnik moment next year, maybe.
(Image: Consumer’s Rest by Stiletto, Frank Schreiner, 1983)

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Beer Temple

Brussels has recently opened a new attraction. A splendid temple-like building devoted to the unnamed God of beer-drinking. The renovation over several years of the centrally located “Bourse” has created a new popular attraction right in the centre of Brussels. From the outside the building reflects the classical temple architecture from Greek and Roman times. Although the building was for a long time the trading place of shares, obligation and currencies and thereby very closely linked to a country’s wealth and economic fate, it has found a new destination to represent the diverse and spirited culture of the people or peoples of Belgium through the lens of a beer glass. Of course, this is surrealism à la Magritte et al. (Museum and galleries within walking distance). The shifting fate after a financial crash to transform the “Stock Exchange” into a temple of surrealistic experiences is great idea and its realisation as popular move to transform the stock market into a temple to worship beer, beer drinking and conviviality a great idea. Without joking, the restaurant in the temple proposes good food that can be matched with a selection of 30+ kinds of Belgian beer (including 4 non-alcohol-containing beers).
Framing beer drinking culture differently from the image of beer and football hooligans is hard to achieve. Public images of beer drinking on television are all around us, anew every weekend. The Brussels stock exchange is a great place to reflect on shareholder versus stakeholder issues. Brussels has opted for a popular conversion of the building. Paris has gone for the upmarket more exclusive transformation of the previous stock exchange (Bourse commerciale) into a gallery of modern art from the private Pinault foundation.
The museum of beer in the upper ranks of the building in Brussels offers even tastings we were told. Well, beer drinking and stock trading (gambling) have both addictive potentials. Ruining yourself, the one or the other way, is equally disastrous not only for yourself but potentially others.
Know your limits is easier said than done. It is a behavioural phenomenon for individuals as well as regions or whole countries. With the apparent “Limits to Growth” for our planet or our ways to trade, even praying in the renewed beer temple is unlikely to solve the bitter-sweet issue. Perhaps discussions in the new Brussels temple will spur new coalitions and stimulate new ideas to overcome the locked-in political trading positions.  Maybe the European Parliament should have a futuristic surreal session in the historic site. The only problem is, they would no longer want to return to their usual forum for debates.

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Sonnendank

Jeder kennt den Sonnengruß aus dem Yoga. Jetzt gibt es eine neue Variante des Sonnengrußes. Nach vielen anderen Bundesländern hat sich Berlin an seine Mieterinnen, Pächterinnen und Eigentümerinnen gewandt, damit sie sich an der Ernte der Sonnenenergie beteiligen. Mit € 500 wurden kleine Steckersolarkraftwerke gefördert, die jede/jeder beantragen konnte der den Hauptwohnsitz in Berlin hat. Interessant war die erweiterte Interpretation des Balkons. Es wurden Kleinanlagen für Balkon, Terrasse, Gartenzaun oder auch für die Gartenlaube in die Förderung einbezogen. Alles digital zu erledigen, bitte.
Die öffentliche Förderung wird wohl die 2-3 fache Summe an privaten Investitionen anreizen. Das kann dann schon ein Anfang sein. Die Aussicht auf mehr Balkon- und Laubenpieper, die Strom für den Eigenbedarf erzeugen, kann hoffentlich mehr Personen bewegen, derartige Investitionen rasch umzusetzen. Viele Beispiele zeigen die Wirtschaftlichkeit solcher kleiner Investitionen, aber einige Jahre des Betriebs sollten schon einkalkuliert werden. Viel hängt dabei von dem allgemeinen Strompreis ab. Seit der Aggression Russlands in der Ukraine wissen wir, dass es noch viele weitere Gründe für die Beteiligung an der Energiewende gibt. Mehr Energiesouveränität fängt im Kleinen an, eine dezentrale Erzeugung und Verbrauch vor Ort kann sogar eine Netzausfall oder Notfallreserve darstellen.
Zu dem morgendlichen Sonnengruß reiht sich dann bald der tägliche Sonnendank ein. Mit dem entsprechenden Messgerät lässt sich die Sonnenernte leicht in Zahlen fassen und wir hören es buchstäblich im Geldbeutel klingeln. So werden gleichzeitig Steuergelder mit einer Hebelwirkung durch zusätzliche private Investitionen sinnvoll eingesetzt. Ein Digitalisierungsschub der privaten Antragsstellenden, Betreibende der Anlagen und öffentlichen Stellen ist ein zusätzlich sinnvolles Nebenprodukt. Papierlose Verwaltung ist ein Megaprojekt. Jetzt danken wir aber erst einmal der Sonne als großzügigem, selbstlosen Energielieferanten. (Image: IBB Webseite 2023).

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Weinpropaganda

Staatspropaganda kann viele Wege gehen. Die von Christof Krieger ausführlich beschriebene Propaganda mittels Wein, für das nationalsozialistische Regime Werbung zu betreiben, ist ein gelungenes Beispiel für eine bisher wenig beleuchtete Propaganda. Im Sinne einer populären Strategie, Wein für die Massen zu produzieren, konnte die günstigem Wetter geschuldete Überproduktion bei Abnahmegarantie zu Festpreisen in den ersten Jahren der Nazidiktatur dem Volk, das als Luxus geltende Weinsaufen, nahegebracht werden. Ansonsten wäre eben Industriealkohol entstanden. Wir kennen die Thematik aus der EU-Agrarpolitik. Die von den Nazis organisierten Weinpatenschaften bestehen vielfach als „Städtepartnerschaften“ fort. So war beispielsweise das reiche Düsseldorf mit dem kleinen Winzerdorf Graach bei Bernkastel-Kues verbunden. In Berlin finden sich eine ganze Reihe von Plätzen und Straßen, die nach kleinen Weinorten benannt sind inklusive der alljährlichen stattfindenden Weinfeste.
Die Veröffentlichung der Dissertation im Rhein-Mosel-Verlag ist vorerst vergriffen, aber sicherlich bald wieder erhältlich. Das Interesse an diesen Verbindungen ist groß, da damit viele Familiengeschichten eventuell neu aufgearbeitet werden müssen. Plötzliche große Nachfrage schaffte Begünstigte und neue Abhängigkeiten. Wie sich später herausstellen sollte, führte das politische Eingreifen in den Markt zu erheblichen Verstrickungen. Also einfach nur Saufen ist auch nicht mehr wie früher, war es eigentlich nie. Bier saufen für die lokale Landwirtschaft ist ja auch nicht wirklich nachhaltig.

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Too big

Too big to fail. We all thought that after the financial crisis some fifteen years ago, we would not deal with the same kind of problems again. The banking sector in Switzerland has proven us wrong. One of the 2 big banks Credit Suisse in Switzerland was about to default and asked for 170 billion state guarantee middle of March 2023. Only after a forced merger with the other big bank UBS (which was rescued in 2008 already) and the huge state guarantee the solvency of the even bigger bank was re-established. Tax payers were expected to foot the bill. Less than 6 months later the Finance Minister Karin Keller-Sutter announced that there is no longer a risk for tax payers to pay for the mismanagement of the bankers involved. This is a relief for the political system which is going to the polls next year.

Many unresolved questions remain. Financial market supervision is faulty to say the least. Banking left to bankers as controllers is risky. Apparently fines do not work only prohibition to exercise similar functions (internationally) again is likely to be effective (NZZ 2023-8-9 S.19). Other remedies lie in a complete overhaul of the governance system of banks and beyond. Supervisory boards should in theory be able to assess the risks incurred by the management board. Failure to do so has no consequences for them either. Representatives of the employees in the board is likely to introduce more longer term concerns into decision-making. Saving jobs is a valuable goal not necessarily in the interest of investment bankers. Capitalism is at high risk of survival and with it our democratic systems. It was not a bank in Niger that got into trouble, but at a major European financial center. Too big to fail in a tiny country still sends shivers throughout Europe. And the other big bank is growing even bigger now, probably un-savable now. If I had a bucket of Swiss Franks, I would rather sell them.

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Roby übernehmen sie

Fachkräfte- und Arbeitskräftemangel spielen zurzeit bei großen Wachstumsphasen nach tiefem Wirtschaftseinbruch eine bedeutendere Rolle. Abgesehen von hausgemachten Problemen wie dem Brexit kämpfen immer mehr Wirtschaftssektoren mit dem Füllen von offenen Stellen. Lassen wir uns nicht blenden von den Heilsversprechen der Techgurus. Roboter in der Pflege sind in experimentalem Stadium. Automatische Kassensysteme in Supermärkten nur langsam bei der Einführung. Autonome Autos weit weg von einer größeren Markteinführung. Riesige Investitionen in Technik und parallele Verwendung von analogen und digitalen Systemen für eine längere Zeit erhöhen zunächst die Kosten. Selbstverständlich müssen wir die disruptiven Techniken und Marktentwicklungen mitgehen und uns oft an die Spitze der Bewegung setzen, aber der mittelfristige Übergang ist gestaltbar. Eine breite Basis an Grundkompetenzen ist die beste Beschäftigungsversicherung. Kurz- bis mittelfristig lässt sich auch in einfacheren Dienstleistungen bei entsprechender Erhöhung des Mindestlohns mehr als ein Grundeinkommen verdienen. Bis wir sagen werden: Roby übernehmen sie, läuft noch viel Wasser die Ahr hinunter. Mehr als viele Techniker, Raumplanende und Prognostiker für möglich hielten. Zusammen mit dem Trend, dass noch lange hybride Techniken Verwendung finden, wie in der Mobilitätsbranche, brauchen wir breite Kompetenzspektren.

FT 4.10.21
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Sozial-liberale Ökologie

Anregung zum Denken über Solidarität. In „Le Monde“ vom 8.10.21 (S.31) Patrick Vieu beschreibt treffend die Notwendigkeit für den Sozialismus und die Sozialdemokratie, einige Grundüberzeugungen zu hinterfragen. Dabei verträgt sich der Humanismus nicht unmittelbar mit einem ökologischen Grundgedanken. Ökologische Basis ist der Respekt der Natur und der Biodiversität, die mit dem verteilungspolitischen Grundgedanken des Sozialismus nicht unmittelbar kompatibel ist. Die Verantwortung gegenüber der Natur berücksichtigt insbesondere den Erhalt der Lebensgrundlagen für nachkommende Generationen und damit ein Hintenanstellen der Ausbeutung der derzeitig möglichen und zugänglichen Ressourcen. Zukünftige Generationen haben ein Anrecht auf gleiche Chancen, Biodiversität zur Verfügung zu haben. Dieser Gedanke schließt Implikationen für die Gestaltung des Rentensystems mit ein. Landverbrauch, Versiegelung von Flächen für Wohnungsbau lediglich aus sozialem Fortschrittsglauben alleine ist nicht verträglich, weil nicht nachhaltig, auf mittelfristige Sicht. Herausforderungen für eine sozial-ökologische liberale Koalition in Deutschland sind daher in den unterschiedlichen Ausgangspunkten des politischen und philosophischen Grundverständnisses angelegt. Die Balance von Freiheit und Solidarität muss bereits zwischen Sozialdemokraten und Ökologen neu gefunden werden, das liberale Element gestärkt durch freie Demokraten in einer möglichen Regierungskoalition intensiviert das Spannungsverhältnis. Eine Modernisierung der sozialdemokratischen Grundgedanken kann dadurch gelingen und die Sozialdemokratie auf einen sozial-ökologischen Weg leiten. Umgekehrt kann Ökologie und Liberalismus vom ureigenen Verständnis und Leitmotiv des Sozialismus dem Wert der Solidarität, gedacht über die menschliche Spezies hinaus, Werte in die Koalition einbringen, die uns im 21.-ten Jahrhundert mit seinem krisenbehaftetem Anfang noch viele Dienste erweisen wird.

Échange franco-allemand sur l’avenir de l’Europe
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Industrial Policy

Industrial Pioneers Summit: At the Hannover Messe on 2nd April 2019 Professor Detlef Zühlke, Executive Chairman, smartfactory-KL e.V. – Industrie 4.0 & Smart Factory talked about his baby: Industry 4.0, a word like a “cloud in the sky”. According to him the 4th industrial revolution with the smart factory, just like the smart home developments, is the current stage of development of industry. After the previous phase of the 3rd industrial revolution “automization”, which we also know from the home with our washing and coffee machines, we govern our factories and homes more and more from smart connected devices.

With artificial intelligence around the corner, the usual cooperation of users and machines or robots as standard, we need to make careful choices for the “User Interface Design” to develop it into a “User Experience Design”. Well put. The user wants green industries and products. Hence get your CO² footprint right as well. 

Lots of sociology at the fair. Instead of individualization from the 80s and 90s the pioneers of industry now talk about “the segment of one” in production. It just means a specific product for each customer to make the person believe s/he is really individually served.

The nexus of global and local (glocal) politics and consumerism is adapted to production. Glocalization (definition here) in industrial strategy has a different meaning: bring your production very near the consumer or directly to customers, this also beats the mass production advantage of low wage cost countries. With big data from local customers you can tailor-make the product at the edge of your market (sneakers for example). Hannover Messe always worth a visit for sociologist, too. Greening of production not yet really a mainstream trend, but several “Leuchttürme” at places.