Our Studio Guest this Week: Niko Paech

Chair for Strategic and Environmental Management, Oldenburg University who will talk about how long economic growth is likely to continue. Part 1: DW-TV: I'm joined now by Niko Paech, an economist at the University of Oldenburg. How do you discuss business insolvency with your students? Niko Paech: Yes, I tell the students that larger companies are not able to cope with financial and economic crises because they are not flexible enough. Furthermore, they critically depend on the stability of the world economy. DW-TV: So the larger the size, the more doomed to failure. Is that plausible? Niko Paech: Yes, it is. And we see that all the companies that are breaking down at the moment, not only in Germany but also other industrial countries, are very large. DW-TV: What was your take on the Opel story, for example? I mean our economics minister, Karl Theodor zu Guttenberg, pleaded for insolvency. Do you think that would have been the right step to take? Niko Paech: Absolutely. What Minister zu Guttenberg stated was that we have a serious excess capacity in the auto industry, and therefore it's best not to have as many large companies. And the market told us that Opel is the one that should not exist any more. That's the point. DW-TV: OK. So you plead for smaller companies. Well, obviously the current crisis is causing many economies already to slow or even produce negative growth. Part 2: DW-TV: We asked some people on the street how they deal with the situation, and they had a rather reasonable point of view. Niko Paech, do you share their view? Niko Paech: Absolutely. Nowadays even traditional economists argue that after reaching a certain level of financial income and material wealth, further growth does not induce an increase in subjective well-being. DW-TV: OK, well, we can check that here in Germany because obviously Germans are used to a healthy growth rate. The country's GDP has tripled over the last thirty years, enabling people to consume more and improve their standard of living. Now growth has started to slow down. How will that affect us? Niko Paech: I think we do not use so many cars, so many flights. I do think that we consume less, but at the same time we will be happier because nowadays we are in danger of drowning in an avalanche of material goods that we have to compare, to select and then to use. So time is getting the bottleneck factor of well-being, therefore there's no contradiction between feeling well and having no growth at all in the economy. DW-TV: Right, but isn't that a bit idealistic? I mean we've learned from socialist economies that little or no growth eventually brings a country to its knees. Niko Paech: I do not think there is a matter of willingness or consciousness, because the price of oil is going to increase so much that it is not possible any more to stabilize a kind of growth development. DW-TV: So basically we have no alternative. Niko Paech, thank you very much for joining us. (Interview: Monika Jones)

DW-World | June 16, 2009

Tags:. .germans. .healthy. .factor. .check. .basically