Book review: Cowboy capitalism, has it delivered?

For the European nations under Gersemann’s microscope, the wish list of higher productivity growth, a more flexible labour force and increased investment in research and development is unlikely to come true without major economic and legal reforms. Unfortunately, economic reform has become a dirty word; the reforms needed to respond to globalisation are criticised as “Americanisation”. 

One would not have thought it would happen anytime soon, but incentives to remain unemployed have recently been cut back in Germany. During December last year, the first steps toward ending government dependency were approved through the cutting of welfare payments for a million jobless and making qualifying for welfare payments harder. The changes, if properly implemented, are intended to help halve unemployment by 2010.

As has been the case so many times before, the usual street protests accompanied this decision to reform the system of unaffordable social benefits. Calls for increased welfare arise regularly in America too, usually from a fear of income inequality. That the poor are getting poorer is in itself a myth and Gersemann argues that what inequality there is should not be construed as arising from unrestrained capitalism.

For example, while it is true that American workers can be fired more easily than their European counterparts, they usually find new work in less than six months, whereas European workers tend to remain out of work for a year or more. Such considered analysis is hard to refute, and as a result this is a valuable resource that will no doubt serve as useful material for intellectual debate in the future.