Germany’s new right: Trading on nostalgia for past prosperity in an age of uncertainty
Ingo Schmidt on how the triumph of liberal democracy and neoliberal globalization became the ideological seed for the AfD

Co-leader of the far-right Alternative for Germany (AfD) party and the party’s candidate for chancellor, Alice Weidel, features on the cover of a 2023 edition of Stern magazine. Photo by conceptphoto.info/Flickr.
On November 6, 2024 German Chancellor Olaf Scholz fired Finance Minister Christian Lindner. Notwithstanding the broad agreement on policy goals, striking a balance between deficit reduction, support for renewable energy and increased arms spending turned out to be impossible. Lindner, a liberal, opted for social cuts; Scholz, a social democrat, wants to avoid them. They had to part ways. After Scholz lost a no-confidence vote, federal elections were scheduled for February 23, 2025. The question that worries everyone from old-school conservatives to new millennium lefties is: How many votes will go to the hard right (if not neo-Nazi) party Alternative for Germany (Alternative für Deutschland or AfD). In the last federal elections in 2021, the AfD got 10.4 percent of the total vote. Current polls put them at 20 percent, but nobody knows what will happen on election day. In this new age of uncertainty, polls don’t predict election results as reliably as in the past.
Elections in the East German provinces Brandenburg, Saxony and Thuringia have already shown what hard-right success looks like. They also reveal the inability of the political centre to understand how much it contributed to the rise of a new right. Refashioning totalitarianism theory in the New Cold War climate, centrist politicians and pundits typically portray the success of the new right as the outgrowth of the Nazi and Communist dictatorships that ruled East Germany from 1933 to 1990. West Germany, which was spared Communist rule and, allegedly, shook off the burden of its Nazi past, appears as a role model in this democracy-versus-dictatorship story. Totalitarianism theory could possibly explain why the AfD is more successful, so far at least, in East than in West Germany. But it can’t explain right-wing success in other countries, like France, that were never under Communist rule and know Nazi rule only from occupation, which strengthened anti-fascist traditions in those countries. But even these traditions couldn’t stop the rise of the new right there.
This article offers a different explanation for the hard-right surge in Germany. It shows that German unification in 1990, signalling the triumph of liberal democracy and the onset of neoliberal globalization, unleashed a new form of nationalism—Deutschmark nationalism—which, after mutating into export nationalism for a while, became the ideological seed for the AfD. West Germany, or, more precisely, the economic miracle that was West Germany in the post-war era, served as a role model during German unification. Promoted by West German elites and eagerly embraced by people in East Germany, it raised the expectation of a new economic miracle materializing in the West and extending to the East. However, these hopes were soon disappointed as political unification caused socioeconomic divisions between East and West Germany and, in the early 2000s, a turn to austerity policies that were highly unpopular in the East and the West. Just when it seemed that Germany would weather the world economic crisis of 2008-9 better than other Western countries, and maybe even become the European hegemon, things started falling apart. The Euro-crisis made clear that it was not only politically united Germany that was plagued by massive socioeconomic and geographical divisions but the European Union, too. Continued economic weakness combined with New Cold War marching orders from Washington fed a nostalgia for a supposedly great past—symbolized by the Deutschmark. This nostalgia, I argue, would not have taken root if the left had been able to channel growing discontent into mobilization for a more equitable and less insecure future.
State elections in Brandenburg, Saxony, and Thuringia
State elections don’t typically get international media attention. The September 1, 2024, elections in Thuringia and Saxony did. After all, it was the first time since the downfall of the Nazi-regime that a hard-right party, the AfD, pulled the majority of votes in a German election. It proved a bitter coincidence: The AfD celebrated their victory in Thuringia, obtaining 32.8 percent of the total vote, on the 85th anniversary of the Nazi-invasion of Poland that marked the beginning of the Second World War.
The Conservative Christian Democrats (the Christlich-Demokratische Union or CDU) came in second with 23.6 percent. The parties of the federal government coalition, Social Democrats (Sozialdemokratische Partei Deutschlands or SPD), Greens (Bündnis 90/Die Grünen) and Liberals (Freie Demokratische Partei or FDP) ended up with single-digit results, the FDP reduced to a mere 1.1 percent. At the time of the election, this was the party of the federal minister of finance. The Left Party (Die Linke), which in the previous election had become the strongest party for the first time in any German state, lost almost 18 percent and came in fourth, even trailing the Sahra Wagenknecht Alliance (Bündnis Sahra Wagenknecht or BSW), a breakaway group from the Left Party.
In Saxony, the AfD won 30.6 percent of the votes, just behind the CDU’s 31.9 percent. As in Thuringia, none of the parties of the federal government coalition achieved double-digit results. The Left Party lost more than half of its vote and ended up with a devastating 4.5 percent. The BSW came in a distant third with 11.8 percent.
Just three weeks after their election victories in Thuringia and Saxony, the AfD scored another success in Brandenburg. Narrowly beaten by the SPD that got 30.9 percent of the total vote, the AfD came in second with 29.2 percent, way ahead of the BSW’s 13.1 percent and the CDU’s 12.1 percent. The Left Party and the Greens obtained less than five percent of the vote, which is the minimum threshold for holding seats in provincial or federal parliament under the mixed-member proportional electoral system. The FDP pulled less than one percent.
Mainstream media fails to explain right-wing success
Barely beaten by the Conservatives in Saxony and the Social Democrats in Brandenburg, the AfD was elected by roughly a third of the electorate in three East German states, becoming the strongest party only in Thuringia. If ever there was a right-wing surge, this was it. Most media reports attributed the phenomenon to widespread dissatisfaction with the federal government, particularly regarding migration, climate policies and the war in Ukraine. Accounts of why the AfD is more popular in the East (approval ratings in the west of Germany range from 8.5 percent in Hamburg and the Saarland to 21 percent in Lower Saxony) focus mostly on disappointments caused by German unification, continuing socioeconomic disparities and a widespread feeling among erstwhile East Germans of being second class citizens. Other explanations invoke the authoritarian heritage of communist rule in East Germany, which is often presented as an extension of the Nazi-regime. Against the two dictatorships in the East, West Germany is presented as a role model of liberal democracy. This as if there hadn’t been considerable continuity between Third Reich and West German elites; as if East Germany’s ruling bureaucracy, despite all its dictatorial wrongs, wasn’t established by antifascists who had been exiled or jailed during the Nazi reign; as if the nationalization of the means of production, despite the wrongs of bureaucratic rule, had not marked a break from the West German capitalism that made West Germany a junior partner in the American Empire; as if West German capitalism had not dictated the terms of unification at the very time that a grassroots movement for democracy unsettled bureaucratic rule in East Germany. The destruction of the East German economy and the integration of the East into existing West German institutions left no room for the aspirations of East Germany’s civil rights movement. Rather than explaining growing support for the new right, media talk about the “peculiarities of the East” reinforces existing frustrations there—frustrations that help shed light on the relative strength, so far at least, of the right-wing surge in the East.
The ‘two-dictatorships’ thesis that pits the East against the liberal democratic West revives the totalitarianism theory that was an integral part of the anti-communist, anti-Soviet consensus during the Cold War. It is now part of the New Cold War ideology that counterposes democracy and authoritarianism. As in the old Cold War, charges of totalitarianism serve to short circuit thinking about alternative economic and political systems, reinforcing the neoliberal creed that there is no alternative to capitalism. The lack of actually existing alternatives is, of course, also one of the reasons for the rise of the new right. Emerging out of an ailing neoliberalism, this right-wing force presents itself as an alternative to the status quo but actually just recasts neoliberalism in a nationalist and racist mould. Replacing neoliberalism’s earlier commitment to corporate globalization in Germany, as elsewhere, neoliberalism is haunted by the spectre of fascism, which, to centrist neoliberals, has everything to do with misled masses unable to understand the virtues of capitalist liberal democracy and nothing to do with capitalist crises that undermine the legitimacy of liberal democracy. Neoliberalism is also haunted by the spectre of communism as ruling classes worry that crisis of legitimacy could extend to capitalism itself. As the neoliberal centre denies the possibility of alternatives and the left generally (not only the Left Party in Germany) appears unable to advance real world alternatives, the growing appetite for change, spurred by recurrent crises wrought by capitalism, settles for right-wing fantasies of a harmonious life in a nation that competes successfully with other countries economically and is freed from job- and welfare-stealing migrants.
The impact of German unification and the rise and decline of neoliberal globalization
Capitalist crises and their exploitation by the right are common phenomena, certainly in the imperialist centres of the world system, but also in the peripheries. But they play out differently in different national contexts. Behind the AfD’s electoral successes in Thuringia and Saxony as well as its broader surge in popularity lie the combined histories of German unification and the rise and decline of neoliberal globalization. The upsurge of the new right is just one of the outcomes of these combined histories. Equally important is the defeat of the federal government coalition and the rout of the FDP, whose leader, former federal Minister of Finance Christian Lindner, promotes austerity policies that stymie government plans to subsidize the transition to non-fossil energies. These policies also lead to a creeping roll-back of social spending—except when it comes to arms spending. Little wonder a government that took office on the promise of something like a Green New Deal lost its credibility almost entirely and called for a federal election scheduled for February 23 of this year.
And then there is the defeat of the Left Party that, despite programmatic commitments to progressive alternatives, is widely seen as the appendage of a lame-duck government in Berlin. At the other end of the political spectrum, the AfD is widely perceived as an oppositional force, even though its program blends austerity, nationalism and militarism in ways that are more extreme but qualitatively not much different from policies advanced by the CDU and the FDP.
In the face of electoral defeat, the federal government, which embraced the US’s New Cold War policies a few weeks after the Russian invasion of Ukraine, also introduced dramatically tougher migration policies. Rather than representing any kind of alternative, as its name purports, the AfD is the black sheep of the establishment family, expressing racist views more radically and bluntly than even the Conservatives. While the Social Democrats, Liberals and Greens are intent on denying such views, they reveal themselves as Western supremacists when it comes to fending off so-called authoritarian threats arising from Russia and China, stirring up longstanding fears in the West that ‘the Russians are coming’ or that ‘Asian hordes’ augur “the decline of the West,” in the words of right-wing intellectual Oswald Spengler.
The hypocrisy of the Greens, who advocate a green transition while supporting the purchase of dirty oil and gas (wherever they can get it ever since the Russian invasion of Ukraine ended Russian gas-flows to Germany), make them a prime target of AfD agitation. But in reality the AfD and the Greens share the fear of Western decline. The AfD engage in fearmongering around the replacement of white people by non-white immigrants and accuse the Greens and their coalition partners in the federal government of accelerating Western decline. But while the Greens may be the prime target of the AfD’s culture war, the truth is that despite significant differences in tone, the Greens and the AfD share a basic consensus on the decline of the West.
AfD success in the east: history holds the key
Encouraged by Glasnost in the Soviet Union, many East Germans took to the streets in the fall of 1989. Under the banner “We Are the People” they demanded democratic reforms of East Germany. Neither unification with West Germany nor a return to a capitalist economy was on their agenda—at least not initially. As protests grew, and especially after the ruling Socialist Unity Party (SED) had opened the border to the West, “We Are the People” was replaced by “We Are One People” more and more often. It was supplemented by the slogan “Germany, United Fatherland,” which is actually a quote from East Germany’s national anthem, written by the communist poet Johannes R. Becher in 1949, at a time when the leaders of the SED still thought a united Germany could be achieved—not necessarily socialist but not aligned on either the US or the Soviet Union. Such hopes were buried by the Cold War, for which the Berlin Wall became a symbol, casting a dark shadow over communist East Germany and allowing capitalist West Germany to present itself as a beacon of freedom. It was in a matter of weeks in the winter of 1989-90 that the abstract possibility became a demand, massively fanned by West German politicians—notably then chancellor Helmut Kohl—and mainstream media, which hinted at the possibility of East Germany adopting the West German Deutschmark. Many East Germans seized on such hints as an irresistible offer. “If the D-Mark comes, we’ll stay here; if it doesn’t come, we’ll go to it” became the next popular protest slogan. Since the opening of the border, thousands of East Germans had gone to the West, creating conditions reminiscent of the times before the wall was built in 1961. Back then, the East German economy lost so many people, most of them young and well-trained, that a collapse of social reproduction became a real threat. The wall stopped the bleeding of the East German economy but inflicted irreparable damage on the legitimacy of the political system.
Almost 30 years later, the opening of the border by the SED-leadership came as a bit of a surprise to West German elites. Yet, they were quick to grasp the possibilities it created. To them, this meant the integration of East Germany into the West German political and economic system, not coexistence with a somehow reformed but still politically independent East Germany. The ‘take over the East’ goal of West German elites and the Deutschmark rush of East German masses fed each other. The civil rights movement that wanted to democratize East Germany was sidelined. Some of the groups active in that movement adjusted to the new zeitgeist quickly, some even entered into an electoral alliance with the East German conservative party, despite their having criticized it as a small but integral part of the SED-regime. Angela Merkel, who would later become chancellor, belonged to one of these East German groups that allied with other conservative-turned-civil-rights groups and the East German CDU. This Alliance for Germany easily won the last East German elections and negotiated the integration of East Germany into West Germany’s institutional structures. On July 1, 1990, the Deutschmark came to the East, three months later the independent state of East Germany vanished into an enlarged West Germany. Most of the Alliance for Germany dissolved into the West German CDU immediately after unification. In December this enlarged CDU won federal elections.
In less than a year the Cold War had come to an end and an entire state had disappeared. However, the hopes pinned on unification, notably the introduction of the Deutschmark, were soon dashed. A year after unification, unemployment, which had existed in communist East Germany primarily in a hidden form, stood at 10.2 percent and rose to over 20 percent in the early 2000s. It didn’t fall below 10 percent until 2014, a quarter of a century after the Berlin Wall fell. Moreover, mass migration from East to West Germany, which the introduction of the Deutschmark was meant to curb, actually accelerated after the arrival of the Deutschmark. From 1990 to 2015, East Germany lost significantly more than one million people, the vast majority during the first two years after unification, and almost all of them of working age. Were it not for this emigration as well as early retirement schemes and retraining schemes for thousands of workers, unemployment in the East would have been even higher than it actually was. Introducing a new form of hidden unemployment, many of the participants in retraining were enrolled in one course after another, often in different fields, until they were old enough for early retirement.
One of the main, if not the main, reasons for the collapse of the East German economy was the Deutschmark. Introduced at a rate of one Mark West for one Mark East, while average productivity of East Germany was estimated to be about a quarter that of West Germany, German monetary union gave private households the boost in purchasing power they so desired. But it made East German firms uncompetitive. Lower wages could not compensate productivity differentials between firms in East Germany and Western countries. The privatization of East Germany’s state-owned firms facilitated the downfall of the East German economy even further. In some cases, Western companies bought East German firms just to shut them down so that they would not become competitors in the future. In other cases, they wanted patents or certain segments of production that they could integrate into their own supply-chains, leaving everything else to be shut down. The closures and cherry-picking of some more desirable segments destroyed the reproduction process of the East German economy even beyond the damage done by rendering it uncompetitive through monetary union.
The result was that bits and pieces of the East German economy became a periphery of production networks controlled by West German corporations. Ironically, the neoliberal restructuring of production processes went hand in hand with massive fiscal transfers from West to East Germany. A price that had to be paid to sustain some level of social cohesion while disappointment that political unification was followed by economic decline and continued social divisions between East and West instead of an Eastern economic miracle following the example of West Germany from the late 1950s to the early 1970s. At some point, a third of East German incomes came from fiscal transfers. As a result, government debt as a share of gross domestic product (GDP) rose from 41.8 percent in 1989 to 61.2 percent in 1999, which is nothing compared to today’s numbers. Yet, back then the lesson that had yet to be learned is that neoliberalism, despite its balanced-budget rhetoric, really is a mix of austerity and tax cuts for the rich that produces increasing debt levels at every slowdown or downturn of the economy. In the 1990s, government debt over 60 percent of GDP was a scandal. Not least because, at the urging of the conservative German government, 60 percent had become the benchmark for membership in the European monetary union, for which the roadmap had been laid out in the 1992 Maastricht Treaty.
Budget deficits, accumulating into government debt, weren’t the only deficit scandal in 1990s Germany. The other was in the current account. From a surplus of 4.6 percent in 1989, the current account dropped to a –1.9 percent deficit in 1991 and remained in deficit territory until 2001. In most other countries, deficits between negative one and negative two percent wouldn’t be a matter of concern. In Germany they were. After all, West German prosperity—the very model East Germans admired so much—had been reliant on export-driven growth, which was always understood as export surpluses. As it turned out, unification in the early 1990s, led to a boom in West Germany as East Germans spent many of their newly acquired Deutschmarks on consumer goods ‘Made in (West) Germany’—despite massive job losses. This boom drove prices up and made German exports less competitive on the world market. At the same time, some of the money from the East German spending spree went to foreign companies. As exports took a hit and imports got a boost, the current account went from positive to negative.
The East was integrated into the West German political system as it existed prior to unification. The Kohl government didn’t agree to any changes suggested by the East German government that formally negotiated unification but really rubberstamped the subordination of East German society to West German institutions. Economic integration was different though. The collapse of the East German economy, triggered by the design of monetary union and privatizations, had a lasting impact on the West German economic model that East Germans had been eager to embrace. The first decade after unification was marked by a twin deficit in government budgets and current accounts. During the unification boom from 1990 to 1993, inflation went up to levels not seen since the oil-price hikes and inflationary struggles between capital and labour from the 1970s to the early 1980s. At that time, however, the West German inflation rate was still below that of other Western countries, whereas in the early 1990s it was amongst the highest.
Germany’s continued economic weakness, combined with New Cold War marching orders from Washington, fed a nostalgia for a supposedly great past—symbolized by the Deutschmark.
West Germany as a role model
Running continued deficits—let alone a twin deficit—was unthinkable in a country that rebuilt its economy after the Second World War through integration into a world market with rules established and enforced by the US. In this American Empire, West Germany played the role of bulwark against Soviet Communism, including East Germany, and as a showcase of Western capitalism. To succeed in this role, foreign debt, accumulated by the Nazis and inherited by West Germany as legal successor of the Third Reich, was forgiven through the 1953 London Debt Agreement. West Germany also inherited low wages, industrial capacity and new technologies from the Nazi economy that, contrary to widespread assumptions, survived the war largely intact. This gave West German industries a competitive advantage that was further buttressed by favourable exchange rates on which basis West Germany was admitted to the Bretton Woods system of fixed exchange rates in 1952. Reintegration into the world market also allowed West Germany to transition from a coal-based to an oil-based economy. Oil was cheaper than coal but its supplies were controlled by US companies and the American state.
However, being a junior partner in the American Empire turned out to be a much better deal for the German bourgeoisie than its earlier quests for world power. The territory under its direct control was much smaller after two failed power grabs but profits were stellar. Driven by exports, or export surpluses more precisely, the West German economy didn’t require fiscal stimulus and kept growing until the US turned to floating exchange rates, which led to a significant appreciation of the Deutschmark. Further, oil prices exploded in the 1970s. But it was during these turbulences that West Germany consolidated its reputation as a beacon of economic stability. Political management of the crisis, notably codetermination (German lingo for the institutionalized cooperation between unions and employer association), kept wages and inflation lower than in most other Western countries. This helped to sustain export surpluses for much of the 1970s. In turn, export surpluses allowed the government to keep fiscal stimulus and unemployment rates low. Again, this is compared to other Western countries, not compared to the post-war boom.
West Germany’s relative success in managing the economic crises of the 1970s raised some concerns among its allies, who considered this success a case of beggar-thy-neighbour policies. The US pressured the West German government to increase public spending in order to stimulate the world economy. The West German government couldn’t shrug off these US demands entirely. The social democratic party was led by Helmut Schmidt at the time, and some extra spending also appeased the left wing in his own party as well as some unionists. However, calls for a Keynesian fix of the economic crises never overcame the general preference for fiscal prudence and low inflation that marked West German society after two lost wars, each followed by the introduction of a new currency, one of them also by unprecedented hyperinflation. Not entirely without reason, export success after the Second World War was widely attributed to liberal economic principles, conveniently ignoring the fact that this ‘liberalism in one country’ could only work because other economies placed growing demand on the world market.
Export success also created an ersatz-identity that allowed West Germans to repress the horrors of the Nazi regime and the roles most of them had played in these horrors, as perpetrators or bystanders. Social democrats never really fit into this picture. Willy Brandt, who spent the Nazi reign in underground resistance circles and exile and would later become West Germany’s first social democratic chancellor, was seen by many as a traitor. His successor Helmut Schmidt, who had served in the Nazi air force, opposed many of Brandt’s plans for social reform and applied Keynesian policies only in homeopathic doses. He was successfully branded as the one responsible for rising unemployment and inflation by the Conservatives and Liberals. Crossing the floor from SPD to CDU, the Liberals made Helmut Kohl chancellor. Kohl won two elections before unification on the promise of bringing post-war prosperity back. He won another two after unification on the promise of bringing the prosperity to East Germany.
For a long time, Kohl presented himself successfully as the defender of the West German export model and guarantor of the collective identity tied to that model, despite the fact that 1980s West Germany never saw a return to postwar prosperity. Disappointment with his broken promises for a West German economic miracle 2.0 began spreading towards the end of the 1980s. Yet, the disintegration of the SED regime allowed him to renew and extend his promises to the East. The national euphoria that secured his 1990 election victory also saw a transformation of collective identity. West German pride in being export world champion turned into Deutschmark nationalism. Widely shared in the East, where people were happy to get the Deutschmark, and the West, where people saw it as symbol of their postwar achievements, this was not the pure money, or currency, fetishism Karl Marx wrote about in Capital. It had a distinctive nationalist character that was subdued in West Germany’s pre-unification export-identity. With unification, the nationalist seed blossomed. Not only did this help Kohl become the ‘chancellor of unity,’ but it also gave cover to a burst of neo-Nazi attacks on immigrants, leftists and queer people, culminating in arson attacks in Rostock, Mölln and Solingen. The latter two killed eight people, while the attack in Rostock laid a four-day siege on an apartment block inhabited by foreign workers who had been employed in East Germany’s now defunct state-owned economy. The openly neo-Nazi attacks of the early 1990s, later dubbed “baseball bat years,” were followed by a series of murders committed by the National Socialist Underground (NSU) that cost nine immigrants and one cop their lives from 2000 to 2007. The role of the German secret service in covering up, or even facilitating, these murders has never been investigated as key documents remain classified until this day. Hans-Georg Maaßen, head of the secret service from 2012 to 2018, was one of the individuals responsible for blocking investigations of the NSU-murders. He also heads up an ultra-conservative circle, initially inside the CDU and now operating in the right-wing space between the CDU und the AfD.
Exports über alles: Eastern peripheries boost corporate profits
During unification and in the first few years afterwards, nationalism was a mass ideology. It rallied flag-waving masses in the streets, it dominated German politics and inspired Nazi-skinheads to chase people they considered enemies. As it became clear that the hopes for an economic miracle 2.0 would not be realized, street protests receded, most skinheads scaled down their activism and just a few turned to clandestine terrorist attacks. It seemed that nationalism had lost the force it had just recently. However, the entanglements between Nazis and parts of the state apparatuses indicate that while nationalism wasn’t as visible as before, it had not disappeared.
As it turned out, the opening of the Berlin Wall was a key step towards what would later be called neoliberal globalization. As the German bourgeoisie sought its place in a world seemingly governed by the invisible hand of the market—not Soviet planners or the milder version of Western government intervention—nationalism also found a new role as mass ideology. The ideological wind blowing from the ‘real West,’ that is, the United States, rebranded free trade theory going back to the days of David Ricardo as globalization. Sticking closely to Ricardo’s principles, academic globalists argued that firms, if left alone by the state, would specialize in the production of those goods they can produce more cheaply than firms in another country either because they possess more productive technologies or use input factors more plentiful and cheap than in another country. All countries will be better off if firms in each country specialize according to their comparative advantages.
Globalization practitioners talked about entire countries as if they were firms competing against each other. Competitiveness of nation-states became the lodestar of capitalists, and their political executors, who used it to justify the roll-back of wages and social standards in all countries. Their run-the-country-like-a-business propaganda was so persuasive that even working class people whose wages, pensions and public services were cut fell for it in large numbers, electing and re-electing neoliberal globalizers over and over again. At the same time, fear that the policies just voted for would cause a race to the bottom spread in the rich countries that saw parts of their production outsourced to poor countries, where labour was really cheap, while immigrants from such countries would take on jobs in the burgeoning low-wage sectors of the rich countries. Migration, segmented labour markets and a global reserve army of labour, enabling capitalists to engage in global labour arbitrage, were neither part of academic globalization theory nor did they feature in politicians’ globalization propaganda. Absent from public debate, these real-life factors created fears that a new right could build on by portraying economic problems as questions of national identity. Translated into policy terms, that meant a program of keeping immigrants out and capital in. This protectionist backlash against neoliberal globalization, coupled with the rise of a new right ranging from populist to neo-Nazi formations, occurred all over the Global North. It began slowly in the late 1990s and early 2000s while globalization was still expanding, and then gathered steam in the wake of the 2008-9 world financial crisis that marked the end of accumulation driven by globalization. It has accelerated again since the COVID-19 recession as well as the escalating great power politics vis-à-vis Russia and China, which have led to openly imperialist policies couched in the same nationalist ideology which the new right thrives on. The competitive nation-as-corporation ideology and the policies that marked actually unfolding globalization was the breeding ground for today’s strange bedfellowship of globalizers-turned-great-power-warriors and national supremacists of the new right. Theories of unregulated free trade opening the path towards global prosperity were just an ideological tool that was useful as long the integration of more and more countries into the US-dominated world market fuelled capitalist accumulation, and thereby hopes for the eventual trickle-down. It was replaced with the rhetoric of concern for national security and democracy as accumulation ended in a new phase of stagnation.
The German bourgeoisie had already adopted the logic of the state as business competitor after the Second World War when it traded world power ambitions for a junior partner role in the American Empire. Balanced budgets and tight money formed the core of its policies. That, along with competitive advantages inherited from the Nazis or granted by the US, enabled export-driven growth and, ultimately, export surpluses. Despite verbal commitments to liberalism, these policies were mercantilist in substance. Shattered but not derailed by the crises of the 1970s, West Germany’s mercantilist regime of accumulation survived until unification led to a twin deficit, slow growth and socioeconomic divisions between East and West. Unified Germany’s economy stumbled along while the US enjoyed its New Economy boom, even though that turned out to be short-lived, and China attained unprecedented levels of economic growth.
The Kohl government didn’t respond to the bourgeoisie’s growing concerns about economic stagnation in Germany. Neither did it respond to growing dissatisfaction with social conditions among the popular classes. After uniting Germany, Kohl turned to further uniting Europe. Partly, he wanted to demonstrate Germany’s continued commitment to cooperation in the European Union as some European leaders—notably British Prime Minister Thatcher and French President François Mitterrand—had expressed reservations about German unification and worried about a return of German great power ambitions. European monetary union became Kohl’s preferred route to an “ever closer union,” as EU-parlance had it at the time. However, regarding other countries, notably in the Mediterranean, Kohl successfully pushed for tight fiscal and monetary rules—the same kind of rules West German policy makers followed in the postwar period. Under the favourable conditions granted by the US to integrate into the world market, this led to export-driven prosperity. However, other countries didn’t enjoy the same favourable conditions. What would upset governments and people in such countries even more was the fact that Kohl had abandoned the rules he was preaching to other European countries in his very own united Germany.
Helmut Kohl at the CDU national party convention in Hamburg, 1973. Photo from Wikimedia Commons.
There, European monetary union was widely seen as a top-down capitalist elite project, part of corporate globalization or as a handing over of the beloved Deutschmark to irresponsible Eurocrats and the Club Med, a derogatory term often used in public debates to denounce people in the Mediterranean countries as lazy, spend-thrifty and, worst of all, happily having a good time at the expense of others. Euro-scepticism added to disappointment with the collapse of East Germany’s economy after unification, growing income polarization and fears of job loss all over Germany and a sense of losing national sovereignty to global capital. Unresponsive to any of these concerns, Kohl and his coalition of Conservatives and Liberals eventually lost the 1998 election to the Social Democrats and Greens who formed a coalition government offering a blend of light Keynesianism, green transition and control of financial markets. This is where the German—and international—bourgeoisies got really concerned.
The opening ideological salvos to derail the newly elected government’s plans came from the British tabloid The Sun, calling Oskar Lafontaine, the new finance minister who proposed the introduction of a Tobin tax, “Europe’s most dangerous man.” Next came Madeleine Albright, then US secretary of state, who gave Germany’s Green Foreign Minister Joschka Fischer the choice of joining the bombing campaign against Yugoslavia or having his country isolated from Western allies. Fischer, and the new Chancellor Gerhard Schröder, chose war. Seeing that his opposition to the war wasn’t supported by anyone else in the cabinet, Lafontaine resigned before the bombing began.
A few months later, The Economist called Germany the “Sick man of the Euro.” Coming from the central organ of global capitalism and unrepentant advocate of liberalism since the days when England, not China, was the workshop of the world, this was not just another opinion piece. It was a warning that the international investment community—exactly the CEOs, bankers, brokers and financiers targeted by the then-emerging movement against corporate globalization—lost confidence in the German market and expected pro-business measures to boost their propensity to invest.
After a few months in office, Schröder had to choose between meeting voters’ expectations (job creation, reduction of job insecurities and income inequality) and capitalists’ cost-reduction demands. He chose the capitalists’ side, earning him the nickname Genosse der Bosse (Comrade of the Bosses). In the absence of a social movement from below that could have pushed him to deliver on the election platforms of the SPD and the Greens, this choice might actually better be called caving to capitalist threats of an investment strike. From 2000 to 2005, the Schröder government axed corporate tax rates, exempted capital gains from taxation and lowered equity requirements for credits. The other side of the class divide saw drastic reductions in unemployment benefits, essentially slashing them to the level of welfare payment rates after one year of benefits. At the same time, legal obstacles to employing temporary workers were greatly reduced. Capitalists were thrilled. Profits and asset prices shot up, but capital formation declined during the years pro-business laws were passed.
Reorganizing existing production capacities was more important to corporate executives than creating new capacities. This was not surprising as capacity utilization dropped when the New Economy bubble burst, triggering a downturn of the world economy that kept even booming China below double-digit growth. As it turned out, united Germany did not inherit the export successes of pre-unification West Germany, but was certainly heir to its export dependence.
In the early 2000s, Germany’s current account turned positive again—not because exports grew so strongly (they actually stagnated due to the world economic downturn), but because imports declined owing to weak domestic demand associated with the Schröder government’s neoliberal policies. However, as the world economy bounced back (China saw growth rates of 10-14 percent from 2003 to 2006), German exports grew again. Eventually the reorganization of production processes in the aftermath of German unification paid off. West German corporations now controlled production networks linking corporate headquarters controlling finance, research and development, and capital-intensive parts of actual assembly in the centres with labour intensive production in low-wage areas in the peripheries from Eastern Germany all the way to China. In these networks, East Germany occupied the position of a semi-periphery. On the supply side, German export success in the early 2000s relied on continued wage inequality between centres and peripheries, which doesn’t mean that all workers in the centres earned high wages. The threat to relocate production to the East or the South put the brakes on all wages. The lowering of social standards propelled the growth of low-wage employment, notably in the service sector. Well-paying, permanent jobs began to decrease as a share of total employment even in West Germany. As a result, discontent that was widespread in the East since political unification was followed by economic collapse, and social downgrading began to creep into the West.
2010s: Exporting the Euro-crisis
The export surpluses of the early 2000s relied on the same mercantilism that had generated such surpluses during the postwar prosperity. However, during the postwar period, unprecedented growth rates across the Western, and parts of the non-Western, world made it possible to superimpose a welfare state on a mercantilist economy that didn’t squeeze profit rates but operated with capital’s consent in a way that seemed unthinkable during the age of catastrophe from 1914 to 1945. In the early 2000s, by contrast, successful mercantilism demanded the roll-back of the welfare state. Tragically, the extension of West Germany’s welfare state institutions to East Germany, where they were superimposed on a collapsing economy, created the profit squeeze that was needed to curtail the material protections granted by the welfare state. To sustain competitive advantages gained by scaling back the welfare state, it was imperative to keep wage-growth low even after surging exports pulled the economy out of the slump. Unlike during the period of postwar prosperity, export surpluses didn’t stimulate domestic demand very much. In fact, current account surpluses in the early 2000s, which surged from -1.8 percent in 2000 to 6.7 percent in 2007, were as much driven by rising exports as by weak growth of imports, a clear indicator of the overall sluggishness of domestic demand. Unemployment rates rose from 9.3 percent in 2000 to 12.1 percent in 2005. After that, unemployment went into long-term decline, briefly interrupted by the 2008/9 Great Recession and slowed down by the 2009/15 Euro-crisis, eventually reaching five percent before the 2020 COVID-19 Recession. However, this job growth occurred almost entirely in low wage occupations.
Paradoxically, it was during the Euro-crisis that a wave of “export nationalism” covered up the discontent that was growing, at variable speeds, across Germany. The Deutschmark nationalism that emerged during German unification had taken a hit with the introduction of the Euro. However, when it turned out that the Euro was basically the old Deutschmark under a new name and export surplus levels were reaching unprecedented heights, it almost seemed that the long-awaited return of prosperity was about to materialize. But of course, it wasn’t the same as the postwar prosperity that saw strong growth almost everywhere. The 2010s, by contrast, were a time of stagnation. The rebound after the 2008/9 recession was stronger in Germany than in other countries, but then growth rates fell in line with the one-to-two percent range of other Western countries.
It was during this time of recurrent crises and long-term stagnation that the German government, led by Angela Merkel with the Social Democrats as junior partner, felt compelled to lecture other governments on economic policy. Completely blind to the fact that beggar-thy-neighbour policies are a zero-sum game, the Merkel-government told Southern European countries to impose austerity despite the fact that they were suffering from a sovereign debt crisis due to the end of cheap credit that became available after the creation of the European monetary union, helping to pay for imports from Germany. Merkel also told them that, after a painful but unavoidable period of belt-tightening, they would eventually succeed as export countries like Germany.
The European monetary union’s contradictory character torn between further integrating Europe and spreading German mercantilism shifted entirely to the latter. Southern Europeans, governments and ordinary people, understood that austerity would further subordinate their economies to Germany’s economic dominance. The Brits, like the Germans and the “Frugal Four” (Austria, Denmark, the Netherlands and Sweden), although not warm to the idea of bailing out crisis-ridden Southern Europeans, were suspicious that Germany’s leading role in handling the crisis would turn the country’s economic dominance into fully-fledged hegemony. Brexit has its origin here. Eastern Europe’s post-communist comprador governments had imposed austerity on their countries in acts of pre-emptive obedience and now felt betrayed as they thought the bailout packages the Merkel government used as a means to impose austerity on the South were actually some sort of welfare package.
Centrifugal forces in the EU were further fuelled when, in face of civil war and foreign interventions in Syria, Merkel unilaterally declared open borders for Syrian refuges and then told EU member states they all had to take their share of refugees. European governments already concerned over Germany’s domineering role in managing the Euro-crisis were dismayed. Public debate within Germany was sharply divided between liberals and leftists applauding Merkel’s humanist stance and right-wingers, including in her own party, warning of an uncontrolled flow of immigrants. Largely unnoticed was the fact that Merkel’s decision to open borders for Syrian refugees was tied to the anti-Russian turn in German foreign policy following the sharp polarization between pro- and anti-Russian forces in Ukraine during and after the Maidan protests in 2014. Most of the Syrian refugees were fleeing the Russian-backed Assad-regime, which was considered an adversary. Opening borders for these refugees set a precedent for the surge of Ukrainian refugees following Russia’s invasion of Eastern Ukraine in 2022. At that point, Merkel, who had already retired, told the media that her government saw the Minsk accords, officially meant to reach a settlement between contending political and military forces within Ukraine, as a means of buying time to arm the Zelensky government.
2020s: Sick man of Europe 2.0
As Ukraine, already torn by civil war, became the scene for a proxy war between NATO-countries and Russia, Germany was firmly subordinated to US foreign policy. Post-communist governments in Germany had, more or less enthusiastically, supported deepening trade relations with Russia. Oil and gas imports might have been the most significant part of German-Russian trade but were certainly not the only one. Torn between allegiance to the US and lucrative business deals with Russia, the German government, now headed by Social Democrat Olaf Scholz, cut its economic ties with Russia after the latter’s invasion of Ukraine. The price to be paid was a further spike in energy prices, on top of the increases attendant on the economic recovery from the COVID-19-recession.
As part of current US efforts to contain China, the German government has been pressured to scale down its trade with China—Germany’s largest trading partner and also a prime outlet for German foreign direct investments. Since Germany’s economy is as much export-driven as export-dependent, the US turn from neoliberal globalization to escalating sanctions and protectionism in the name of national security has caused high levels of uncertainty within the German bourgeoisie. In addition to the return of secular stagnation after the very short post-COVID recovery in the West and the petering out of the China boom, this uncertainty is driving low levels of investment. Inflation, fuelled by post-COVID recovery and rising energy prices, and lower real incomes leading directly to less consumer spending, but also indirectly, as households build up their savings in anticipation of more economic shocks in the future. Meanwhile the Scholz government boosted arms spending while otherwise imposing austerity.
After two years of recession, Germany is again being branded the “sick man of Europe” by The Economist. The last time Germany earned this title the neoliberal turn against the welfare state produced massive current account surpluses, meagre general growth rates and massive social and regional inequalities. The export nationalism that concealed the mounting discontent with neoliberalism was shaken by the US turn from neoliberal globalization to protectionism and militarism. Given its high level of export dependence, Germany was ill prepared for the turn against it, which unleashed pent-up disappointments and anxieties into the political sphere. This happened all over Germany but more so in the East than in the West as regional differences in income, wealth and representation in leadership positions had created widespread feelings of being second class citizens in a politically united Germany.
In the absence of socialist imagination, German politics are haunted by the spectres of the past. An insurgent hard-right pins the labels of communism or Marxism on everything that ever came from the left, Social Democrats, the Greens and, of course, the Left Party, no matter how members, activists and supporters of these parties position themselves on the political spectrum. At the same time, the hard-right wants Germany to leave its Nazi past behind. Downplaying Nazi atrocities, accusing liberals and leftists of burdening Germans with a cult of guilt, they propagate the reclaiming of German national pride and sovereignty from allegedly cosmopolitan elites. Between the very real and growing right and a weak and largely imaginary left, centrist parties that proclaimed the end of history in the heyday of neoliberalism are also shifting to the right. The decline of the Left Party is a mirror image of the rise of the AfD.
Alternative für Deutschland: A child of Deutschmark nationalism
Mainstream media and centrist parties view the new right as if it were some external force inexplicably appearing on the political scene and threatening the liberal order. But this is empirically wrong. Almost all leading figures of the AfD come from conservative West German milieus where they previously held positions in public administration or private businesses. Although they present themselves as anti-establishment rebels, they are establishment people who turned from the centre-right to the hard-right. The AfD also includes party activists who come from militant neo-Nazi groups that have existed on the fringes of West German society since the CDU gave many old Nazis a political home after the downfall of the Third Reich. Making small advances into electoral politics in the late 1960s and again in the 1980s, the neo-Nazis remained marginal until they found common ground with disgruntled conservatives. Deutschmark nationalism served as the ideological bonding material for neo-Nazis and right-of-centre conservatives, and became a rallying point for growing numbers of people dissatisfied with the policies of neoliberal globalization advanced by the centrist parties. It emerged in the tumultuous days after the fall of the Berlin wall as a mass ideology that shaped East and West German politics in the direction of unification. After that, it became an ideological point of reference that allowed for the integration of different political ideas and currents into a new right political project, the AfD.
Riding on the wave of Euro-scepticism that accompanied the Euro crisis, the AfD, founded in 2013, promoted a German exit from the EU, which would also have meant exit from the Euro. However, boosting the Deutschmark nostalgia associated with German-style Euro-scepticism got the newly minted party only so far. What really fuelled the AfD’s take-off was the wave of Syrian refugees coming to Germany (and other EU-countries) in 2015. The party’s approval ratings rose from roughly five percent in its first two years to around 12 percent in the next two years. With the surge in voter approval came a programmatic shift from ‘neoliberalism in one country’ to neoliberalism hidden behind ethnonationalist hate propaganda. Despite advocating for a strong state, the AfD also presents itself as a rebellious party of freedom. This paradox is resolved by portraying cosmopolitan elites, represented most notably by the Greens, as a force dominating state apparatuses and misusing them to bring excessive numbers of foreigners into the country with their cultures that allegedly threaten German people, suppress German heritage and push the economy into decay. Therefore a strong state is needed to defend Germany against foreign incursion and revive its inherent strength.
Election poster of the AfD in Thuringia supporting remigration. Photo from Wikimedia Commoms.
This wasn’t always the case. Something like a left renewal had once seemed to be in the offing in the most unlikely place: East Germany during the transition from state socialism to a peripheral position in an enlarged capitalist Germany. In West Germany, the nationalist wave that came with unification swept away much of the activist left that had rallied thousands—sometimes tens or even hundreds of thousands— of people in the 1980s against the stationing of US nuclear missiles, nuclear power plants, Nazis, and South Africa’s apartheid regime, among other causes. Left circles within the SPD, the Greens and the labour movement weathered the nationalist storm without leaving a mark on German politics. In this political climate, the Party of Democratic Socialism (Partei des Demokratischen Sozialismus or PDS) stood out as a beacon of the left.
Emerging from East Germany’s ruling Socialist Unity Party (SED), the PDS became the political home of many East Germans who lost their jobs, social status and cultural identity during the transition to capitalism. Quickly establishing a presence in East Germany’s provincial and municipal parliaments, the party expressed the discomfort of many East Germans who felt like second class citizens under the domination of West German institutions, politicians, corporations and culture. It highlighted East Germany’s socialist heritage, which encompassed commitments to anti-fascism, peace and international solidarity as much as the dictatorship of the politburo, Stasi-surveillance and an overbearing bureaucracy. The party hung itself up in endless debates between those who downplayed or justified East German communism’s dark sides and others who sought to disown that history by embracing liberal principles. Practically, these disputes didn’t make much difference. Upholding socialist principles didn’t stop the party from pragmatically working within the political and economic confines created by unification. At times, this included voting for privatization of public housing and infrastructure. For decades since the party was founded, the contradiction between socialist principles and the subordination to neoliberal policies imposed by the West German bourgeoisie didn’t stop the PDS or its successor organization Die Linke (the Left Party), from becoming something like a catch-all or people’s party in East Germany, a role long held by the CDU und the SPD in West Germany. For years, the PDS/Left Party achieved election results in the mid-20 percent range, peaking at 28 percent in Brandenburg in 2004 and 32 percent in Thuringia in 2019. It was also, and still is, part of various coalition governments in East German states. Until the September 2024 election, the Thuringian government was led by the Left Party’s Bodo Ramelow.
Despite this overall success and despite the party’s fidelity to socialist principles, the social group that wasn’t interested in voting PDS consisted of workers, who still voted CDU in large numbers despite g the CDU’s failed to deliver on its big promises of post-unification prosperity. More recently they shifted to the AfD. Meanwhile, in West Germany, the PDS remained marginal throughout its existence, only attracting activists from various left grouplets. What little remained of left protest milieus after unification was still dominated by a mix of environmentalists, antifas and international solidarity activists who might vote Green, or maybe even SPD, but hardly ever PDS. The old working class milieus that were shrinking with the decline of smokestack industries were still dominated by unionists closer to the SPD than the PDS. This started to change when, under chancellor Schröder, the SPD implemented neoliberal counter-reforms on a scale his conservative predecessor Kohl had avoided throughout his 16-year tenure, despite his supposed commitment to unleashing market forces. Growing frustrations among left social democrats and unionists fed mass demonstrations against Schröder’s SPD and created a social and organizational base (including, most prominently, Schröder’s short-time finance minister Lafontaine) that merged with the PDS into the Left Party in 2007. In the federal elections two years later, the Left Party won 11.9 percent of the vote, then 9.2 percent in the 2017 elections, but fell to 4.9 percent in the 2021 elections. This was a worse result than the 5.1 percent the PDS obtained in 1998, an election that also saw an increased vote for the SPD, which allowed Schröder to succeed Kohl. It is worth noting that the PDS vote came almost entirely from East Germany, which represents less than a quarter of Germany’s total population.
While the PDS mostly maintained peaceful coexistence between socialist theory and market-conforming practice, the Left Party continuously debated whether or not it should join centre-left governments, if given the chance. The bitterness with which party activists argued over this question stood in stark contrast to its actual relevance. In states where the party was relegated to opposition status by poor election results, this status didn’t attract additional voters keen on seeing a principled opposition in parliament. In states where the party joined governments, the results were mixed: sometimes it maintained its vote share in the subsequent election; sometimes it suffered losses. A paradoxical result came about in the Thuringian elections in September 2024: The Left Party lost massively, although, had there been direct elections for the minister-president (a position equivalent to provincial premier in Canada), the Left Party’s Bodo Ramelow would have won the election. This fits into a trend that became visible over the last few years in a number of state elections in East and West Germany. Party loyalties based on shared worldviews wear thin. Elections are often decided based on the media appeal of top politicians, regardless of party affiliation. Remarkably enough, Ramelow, just like Dietmar Woidke, the SPD’s lead candidate in the Brandenburg elections, dropped the name of his party on campaign posters, presenting himself as more of a provincial father figure than a man of the party.
However, rather than signalling the end of ideology, as centrist politicians and postmodern philosophers might have argued before the rise of a very explicitly ideologically committed new right, the focus on limelight politicians pushes democratic debates into the shadows. In the case of the Left Party, it might also have been an attempt to distract from its own image as an organization mired in endless debates not producing any coherent, let alone persuasive, policies. The reasons for permanent internal discord are sociological and ideological. The Left Party was strongest in its early days, when the PDS’s social base still comprised a cross-section of the East German population, although workers remained underrepresented. It also attracted dissident social democrats and unionists from West Germany. To a limited extent, therefore the Left Party had the working class base the PDS never had.
The blend of Keynesian and Marxist ideas around which social democratic dissidents and union leftists organized had been defeated as a significant political current during the crises of the 1970s by the Social Democratic right and corporatist union leaders who put competitiveness of the West German economy over income distribution from profits to wages. In the new millennium, when these currents joined forces with the PDS, they were still sizeable enough to give the newly founded Left Party a boost. But not for long. The smokestack industries around which these left currents were organizing were in continued decline, which made strategies based on that moribund reality obsolete. Moreover, these strategies often stood in the way of mobilizing and organizing the new working classes that emerged in the service sector and, on a much smaller scale, IT, bio tech, and green energy.
As the ranks of the Left Party thinned out with the loss of members coming out of communist East Germany or from West German union and social democratic circles, the party was able to attract new blood mainly in the form of highly educated, often precariously employed, urban dwellers. The shift in membership from old left offspring to the children of neoliberal globalization was paralleled by a geographical shift in electoral support. In urban centres, losses among the party’s old left supporters could be partially compensated; in rural areas, however, where the PDS and the Left Party had always been weak, the party disappeared almost entirely. Often, there isn’t even anyone to put up election campaign posters.
Anti-AfD protest in Germany. Photo by strassenstriche.net/Flickr.
Unlike the original base of both the PDS and the Left Party, the urban hipsters who joined the Left Party had no old left reference points. Even when they talked about Marx and class they did so with postmodern accents. However, this did not help them to gain sizeable support among the working classes—sometimes lumped together as the “precariat”—that developed in expanding economic sectors. The political offerings of the Left Party seemed to exercise little appeal for both old and potentially new constituencies. The party’s founding basis of unity was opposition to neoliberalism. In the early days this left room for East German concerns about the outcomes of unification—arguably a kind of neoliberal restructuring—with opposition to the neoliberal turn of the Schröder-government in East and West Germany. It also left plenty of room for a variety of goals, from resurrecting the Keynesian welfare state to a multitude of vaguely defined socialisms for the future to opposition without a vision for the future. However, what sufficed to form the Left Party wasn’t enough to sustain and grow it, especially not as it became harder to label government policies neoliberal.
The Great Recession, the COVID-19 pandemic, and commitments to ongoing arms production brought state intervention back to the centre of politics, contrary to the 1990s and early 2000s when politics was dominated by advancing capital mobility and free trade. Back then, ruling elites organized consent of the popular classes, more or less successfully, under the banner of “international competitiveness.” The new watchword “national security” is better at rallying the new right than building support for centrist parties. Left Party intellectuals debated the new political conjuncture under the label “post-neoliberalism,” a word-monster that hints, perhaps unwittingly, at the party’s inability to develop a strategy beyond rejecting neoliberalism. In reaction to the imposition of a party line by its predecessor organization, the PDS and the Left Party allowed a wide range of views. However, members of various organized currents, ranging from social-liberal to communist, tended to talk more about each other than with each other.
Postmodernist philosophers’ contention that the days of master narratives are over was wrong with respect to neoliberalism—if there ever was a master narrative, it was neoliberalism—but it does apply to the Left Party, which could not synthesize different ideas into compelling left policies that could rally growing discontent. Instead, internal debates turned into factional turf wars in a party that resembled an appendix of the Scholz government, costing the Left Party more and more support.
After years of bitter infighting, discontent with declining voter approval and accommodation of government policies led to the split of the federal party caucus and the formation of the Sahra Wagenknecht Alliance (BSW) in January 2024. As its name indicates, the party is entirely built around its frontwoman, who represented the Left Party in the Bundestag from 2009 to 2023. In the BSW, the cacophony that destructively marks the Left Party is replaced by closed-door debates. As in the Communist party of old, membership isn’t open to everyone; applications to join must be approved. Wagenknecht, originally a member of the Communist Platform (one of the organized currents inside the PDS), had shifted to left-Keynesian, pro-welfare state positions. But, years before her split from the Left Party, she began advocating ordoliberal positions—a branch of neoliberal thinking that stresses the role of the state in allowing businesses to compete without being bogged down by monopolies. This German version of neoliberalism has been the hallmark of economic policy and ideology since the early years of West German world market integration. In Wagenknecht’s current adaptation of ordoliberalism, the state guarantees competition, which, in turn, creates a strong economy capable of providing stable employment, social security and a fairer distribution of incomes. She combines this embrace of free markets plus the welfare state with a critique of the European Union as an institution operating in the interest of big corporations and a critique of NATO and US hegemony. Her condemnation of American hegemony appealed to some members of the Left Party, as did her critique of the EU, although her more recent favourable references to ordoliberalism and policies aiming at stricter migration controls were less popular.
The BSW’s outlook is very much shaped by positive memories of West German postwar prosperity. Yet, the party’s advocacy of international cooperation, a position going back to 1970s detente policies, contrasts sharply with orientations of the centrist parties and some currents within her own former party. Demand for a negotiated settlement of the Ukraine war overlaps with AfD positions. However, the AfD considers this a matter of Germany’s national interest that doesn’t preclude support for rearmament and war in other regions, like Gaza most recently. The BSW, on the other hand, sees militarism largely as the US’s last recourse for defending its ailing empire. It remains to be seen how the BSW’s principled opposition to militarism and war can mesh with current negotiations for a coalition government with the CDU and the SPD, both committed to military support for Zelensky in Ukraine and Netanyahu in Israel. Polls suggest that electoral support for the BSW was largely driven by the desire for an anti-war voice in parliament. At the same time, there is considerable support for efforts to keep the AfD out of government, despite all the support the AfD garnered in the fall state elections in East Germany. If this means compromising its anti-militarism, the BSW may, like the Left Party before it, soon be seen as a superfluous appendix of unpopular centrist parties.
After weeks of negotiations, the BSW entered into a coalition government with the SPD in Brandenburg as well as with the CDU and SPD in Thuringia. It also supports a minority government made up of the CDU and the SPD in Saxony. It did all this to keep the AfD out of government positions. Understandable as such efforts are, they have already cost the BSW in the polls. Hovering just above five percent, the BSW may not reach the five-percent threshold for obtaining seats in the upcoming federal elections. The Left Party, standing at 3.5 percent in the polls, will probably fall short. Founded as a project to unify left forces from East and West Germany, its split early last year already signalled the failure of that project. The next election may reduce it to insignificance, leaving lots of room for the AfD.
Ingo Schmidt is an economist and works as the coordinator of the Labour Studies Program at Athabasca University.