Archive for category Germany

The dawn of totalitarianism

German politicians – especially female politicians – rally to increase the share of women in corporate boards. However, this does not mean that they put forward an initiative or some kind of incentives for women to get themselves more prepared and more willing to reach top-level jobs. No. German politicians do what they think they do best, they regulate, they tell others how to behave and especially how not to behave. And with every regulation, German politicians strangle individual freedom a bit more. Mind, all this is done for equality’s sake (not equity)- at least this is what they tell you.

The German minister for quite a lot of things actually, that is for women, youth, family and elderly (maybe I got the wrong order), Ms. Schroeder, plans to tell corporations how to man their boards, i.e. how to woman their boards: Mrs Schroeder wants to see more women in corporate boards – regardless of past merits. (I would like to see myself in more boards, maybe I should apply for a quote?) Accordingly, German corporations will be subjected to a law: If they fail to meet a certain share of women in their board a fee of 25.000 Euros will be due. In other words, state regulation, not shareholders will have a say on board composition. Shareholders simply get stripped of one of their rights, namely to determine board composition.

Forget about effort and performance, forget about all the tons of papers written about the best way to recruit skillful CEOs or skillful board members (and about how to overcome problems like moral hazard, once they are installed in their position). That’s history. From now on, biology will do the trick. Get women in the board and all is fine. This mantra rules the campaign for more women in corporate boards or in leading positions as the EU dubs it. Biology, or the biological imperative that a sizeable share of women in corporate boards improve profits is the new racism of our times (- and it violates individual rights, the rights of men, because they can try as hard as they like, they won’t climb the ladder because they have the wrong gender, the rights of women because once they form a part of corporate boards, nobody will attribute this “success” to effort, performance, knowledge or any other individual feature) .

The campaign to bring more women with their snout in the corporate trough is a religious crusade. There is not a single reason given as to why more women in corporate boards is an improvement. There is not a single shred of evidence that boards with a considerable share of women make higher profits nor is any other reason than “equality” given. Equality is a religious dogma and anyone who dares to question the dogma, asking for reasons and benefits, will be treated as a heretic. Accordingly, another German minister, Mrs von der Leyen, threatens to publicly denounce corporations that do not fill their boards with numbers of women deemed suitable by the very minister. So we’re back to the dark ages and it won’t take long before to criticize German politicians and question their approach will end with the critic being burned at the stake. Whether the burning at the stake is literally or metaphorically, time will tell, history, however, suggests the former.

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The tale of the Gender pay gap: can the EU put anything over on you?

I bet, you heard something about the Gender pay gap recently. The Gender pay gap is what keeps EU do-gooders busy . It “reflects ongoing discrimination and inequalities in the labour market, which, in practice, mainly affect women”. You can read this sermon on the internet, on a page devoted entirely to the Gender pay gap. The Gender pay gap, the same site informs you is either caused by direct discrimination, by an under-evaluation of women’s work, by traditions and stereotypes or by women’s difficulties when it comes to balancing work and private life. The Gender pay gap is measurable, it is measured as the relative difference in the gross hourly earnings of women an men within the economy as a whole. EUROSTAT, the statistical agency of the European Union devotes five bullet points to the different versions of the Gender pay gap. Here you can learn that the Gender pay gap in the UK is 21.4%, while in Germany it is 23.2%.

So let’s digest this for a while.

To get things straight, what the Gender pay gap says is that male workers across the UK (or Germany, for that instance) have on average 21.4% (23.2% in Germany) higher hourly wages than female workers. This is the Gender pay gap. Doesn’t that strike you odd? Certainly there is an education pay gap as well because across the UK well educated workers earn more than less educated workers. Ever seen an EU official fight for unskilled workers being paid the same wages than skilled workers are paid? Certainly not, would affect themselves so they shy away from it. However, the logic is the same.

So for the records: They declare a Gender pay gap without any reference to differences in skill, occupation, education, human capital and so forth and, they not even control for working time. So let’s do just that and use data collected by EUROSTAT.

The same agency that spreads the fairy tale of the Gender pay gap, hosts data for average working hours per week. Extract the data and you find that men in the UK work on average 42 hours a week, while women work 31.2 hours a week. The working time gap between male and female workers is 34.6%, i.e. it is even greater than the Gender pay gap. In other words, though men in the UK work on average 34.6% more than women, they are only paid 21.4% more. If there is discrimination in the labour market, discrimination works against men, because on average they have to work longer hours to get the same wages. Another nail in the coffin of the Gender pay gap myth is provided by overtime work. 16.2% of the UK’s male workers are required to work overtime, while only 9% of female workers are. Again you would expect that to find expression in the average pay men get and you would expect the longer hours, men work overtime to increase their wages relative to womens’.

Two simple scraps of data suffice to unveil the entire Gender pay gap saga as nonsense. Nevertheless, the EU (and not only the EU) employes a number of mountebanks who make a living by spreading claims proven to be wrong. So either those who staff the EU’s Gender pay gap lobby are dumb, unwilling or incapable to make the easiest of connections between data or they are on a crusade and want others to believe in a lie, because they profit from others believing the lie (through their wages). Though I have my suspicion I leave it to you to decide.

P.S.

Figures for Germany are comparable to the UK. German men work 38.7 hours on a weekly average, while women work on average 30.4 hours per week. The working time gap between German men and women amounts to men working 27.6% longer than women. On average 5.2% or German men are required to work overtime, while this accounts only for 2.4 of the female labour force.

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German Tax Stalkers

In the early 1970s the Laffer-curve emerged as a new form to describe the relationship between a tax rate on the one hand and tax revenues generated by government on the other. Arthur Laffer argued that in some cases, a reduction in tax rate can trigger an increase in tax revenue, while an increase can trigger a reduction in tax revenue. Individuals’ effort, Laffer argued, will be affected by the tax rate. The less of their profits remain, the less effort individuals will put into work leading to an overall decrease in tax revenues. Other researchers assembled a number of factors that influence people’s willingness to pay taxes or their inclination to evade taxes. Attitudes towards the government, perceived fairness of taxes and attitudes towards basic religious and cultural development are amongst these variables (Frey, 1989; Sandmo, 1976).

As usual, when it comes to scientific results, German authorities seem bare of any kind of knowledge. It’s because they don’t need this knowledge! Take members of German tax authorities, to these people talking of people’s willingness to pay taxes is preposterous. German people are obliged to pay taxes. It’s their lifelong duty. That’s what they are here for. It is not that people give some of their individual rights to authorities and allow them to act on their behalf, it is German authorities who allow German people to feel free in certain areas as a concession to what is deemed democratic rights in other countries.

However, individual freedom ends where authorities’ deem necessary. Therefore, it is quite suitable that Germans are seen as property by their authorities. As such they do not require respect, they do not require politeness, all that’s needed is for German citizens to comply to §§88, 90 Abgabenordnung or some other code of law. The funny thing is, that German authorities are staffed with “real” German people so you would think they will act as citizens in the first and as representatives of the authorities in the second place. But it’s the opposite. When employed by a German authority, German’s transform from being citizens to government rubber stamps and they take pride in that. Hans Ordinary becomes Hans the sleuth who detects a tax evasion in every tax return that crosses his desk. And he is quite eager to do so.

Build on a vast number of Hanses and the fact that German authorities think they have “their” citizens at lifelong disposal, interactions between tax authorities and tax payers deteriorate. Tax payer and taxman confront each other like soldiers in the Great War, in entrenched positions. The rude tone present in tax authority letters as well as the huge number of people bringing their funds to Switzerland and other save heavens give ample evidence of this. Not at any single point in time, German tax authorities let alone German Ministers of Finance got the idea that people’s obvious unwillingness to pay taxes might be a function of the way they are treated or of the amount of money they are left with after Government’s taxation hit them. It’s, as I said, your legal duty to pay taxes, you cannot escape this duty nor can you at any point in your life escape the ever-present suspicion that you evade taxes.

And so it comes that after living for 5 years in Britain, after paying taxes in Britain for the same period your German tax authority will remember you as one who has been squeezed in the past and one who should be targeted again. The result is the usual rude letter send to a (still) German citizen (German property that is) by the very same tax authority that in ancient times fought with the respective tax payer over such interesting questions as: Is the office in his house to be accessed only by a separate door or is there a chance to leave the sitting room via its window, move along a balcony and enter the very office by its French door, which would result in the office-expenses not to be considered as deductible expenses? The result is a certain feeling of being targeted by tax stalkers on my side and I start to wonder, whether the European Court of Human Rights should not rather sooner than later look into the way, German authorities think they can treat their citizens.

References:

  1. Frey, Bruno S. (1989). How Large (or Small) Should the Underground Economy Be? In: Feige, Edgar L. (ed.). Underground Economies. Tax Evasion and Information Distortion. Cambridge: Cambridge University Press, pp.111-128.
  2. Sandmo, Agnar (1976). Optimal Taxation. An Introduction to the Literature. Journal of Public Economics 6(1): 37-54.

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The good German citizen is deaf

The German government stands-up to revolutionize perception and human psychology – by law.

The law that aims to alter the way Germans perceive is called “Gesetz zur Privilegierung von Kinderlärm” a bill to privilege noise made by children. It is quite striking that the law speaks about “noise”. Thus, while it is not to be contested that children do make noise, the law prohibits people from doing something against it, it simply orders them either to stand it or to not hearing it. So if – by any bad luck – you happen to live close to a Kindergarden, you can’t do anything against the noise coming from the Kindergarden. Just imagine, you cannot hear it, or better still if you cannot convince yourself that actually there is no noise, move to another place. By law, the German government declares that though children’s noise is still noise, it is not to be considered harmful any more. Society, the same government declares, owes tolerance to children, and because of that, German citizens have to stand the noise.

This law provides the German government with a powerful tool. For everything that does not fit into what the German government defines as being the correct way of life there is a simple way to handle it: prohibition, prohibition to perceive that is. However, children’s noise is an externality and the problem with externalities is that others do perceive them (that’s why they are called externalities). A government denying its citizens the right to defend themselves against externalities caused by others is either close to becoming a totalitarian government or already crossed the demarcation-line.

Besides, there is not a single word as to why society owes tolerance to children, and why elderly people, working people and all those who do not want to be disturbed by children’s noise do not have the same claim for tolerance. Why don’t parents and wardens in a Kindergarden owe it to society to raise children in the awareness that others do not want to hear their noise and that there are more sensible things to do than just running around and shout like mad?

Because the “Gesetz zur Privilegierung von Kinderlärm” legitimizes noise made by children at the expense of all those who don’t produce externalities for others, it reveals itself exactly as the piece of dictatorship it is meant to be.

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