Martin Wolf has received a reply from a German official to his column from last week. Read the reply and Martin Wolf’s reply here (kudos to Pablo Bortz). I think I agree with most (all?) of what Martin Wolf says. I must say that as a German all of this does not surprise me. Neo-classical economics has taken over almost all of German academia, and the intellectual climate at most universities I would describe as barren. As a result, even large parts of the Greens and Social-Democrats have taken onboard the neo-classical mind-set, embracing debt brakes and austerity and giving up expensive social policies. This has happened elsewhere, too, like in Spain, Greece or Ireland. Both the right and the left did not oppose austerity programs and the unacceptable degradation of democracy they include.
Now the European policy elite defends the status quo and progressive thinkers are forced to abandon the shipwreck instead of being allowed to fix it – the fantastic object is shattered, as George Soros put it. Here is a different paragraph of his recent speech at the Trento Festival of Economics:
While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo. This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been.