Category Archives: Politics

The State is not a Business – Der Staat ist kein Unternehmen

Deutsche Version
Uli Hoeneß, the current president of Germany’s premier football club FC Bayern München, and himself the co-owner of a Bavarian sausage factory, likes to be lauded as a straight-talker. Hence, he frequently proclaims apparent truths in the public arena, and he can usually be certain that the tabloids and a large faction of socio-political commentators will commend him for his straight-talking.

So, in yesterday’s prime political talk show “Günther Jauch”, he said something that many straight-talkers before him have said, namely, that the state is a beast that ought to be starved and that the government should reduce public spending and borrowing. Quote:

“[…] The state and the economy have to learn to operate like a business – and to reduce spending. It mustn’t be the case that we still and continuously increase our [public] debt. Spending must be cut.“

Hoeneß surely isn’t the first person to suggest that the state ought to be run like a business; but given the positive feedback in parts of the German media, he is among the more influential people to make this argument in more recent times, at least in Germany.

The question I always have is why people who are capable to think for two seconds actually buy this argument, that is, that a state run like a business would be more prudent with public finances and that this would lead to balanced budgets. The argument is so ridiculous, I almost wonder why this even requires any discussing at all. But here we are – and I’m just briefly going to outline why this argument is entirely self-defeating.

My rebuttal consists of two simple arguments:

  1. The state is not a business
  2. Even if it were (or if it were run like one), it should run large deficits (probably higher than is currently the case in most countries)

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