Review and outlook for 2022

Dear friends and colleagues,

One of the basic assumptions underlying what we do as Forum New Economy is that the mantra of the power of markets to change things for the better, which has prevailed for decades, will not solve either the climate crisis, nor the wealth gap, living conditions that have drifted apart, financial markets that are out of touch with reality, or doubts about globalization. This realization also resonates somewhat through the coalition agreement that the traffic light partners ended the Merkel era and the year 2021 with. It is less prevalent in some recent personnel decisions – and how they are commented on in Germany. Keyword: Bundesbank. Praise for someone who is good because he upholds the “old stability-oriented” tradition does not yet sound quite convinced of the need for innovation – although a redefinition of the role of central banks in times of climate change and inequality is obvious, as Adam Tooze and Moritz Schularick argue in their studies. After all, central bankers always have an impact on climate and inequality with their actions – contrary to what the old mantra posited.

In our second year, we have tried to absorb such new economic ideas, accelerate them, and translate them into practice – whether in workshops where Harvard economist Dani Rodrikdiscussed a redefinition of globalization with Siemens manager Joe Kaeser; or in seminars on how to finance the new government’s necessary major investments without breaking the debt brake. We’ve had Mariana Mazzucato talk to Wolfgang Schmidt (now head of the Chancellor’s Office) about mission-oriented policies; Barry Eichengreen about Bidenomics; Minouche Shafik, head of the London School of Economics, about a new social contract – and Stormy-Annika Mildner about the Cornwall Consensus, which could replace the Washington Consensus. We commissioned studies on how best to reduce the inequality of income and wealth in Germany – or on how a new paradigm could protect against financial scandals.

In addition, symposia were held to find a clever answer to the emotional question of whether the economy should grow or shrink – an idle dispute over principles. The study on this very question is forthcoming. And we discussed all about the cornerstones of a possible new grand paradigm, apt to replace its market-liberal predecessor. Finally, we tried to find out which new narratives are already circulating by conducting surveys on key maxims of the parties that participated in the federal election campaign – with the evidence indicating that new narratives already exist, and are in fact well received.