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Interesting exchanges underneath this Tweet. For what it's worth, the current success of AfD in East Germany and arguably right wing populism in USA and UK is a result of those shake ups. /1 https://twitter.com/APHClarkson/status/1324284472309723137
If you look for concrete examples have a look on manufacturing in East Germany. It was highly unproductive, often several people did what one person with the right equipment could have done in half the time. /2
Have a look on the downfall of whole industries in Scotland or North England. Arguably, those shakeups don't necessarily cause an economic shake up. /3
Shake up as in turmoil. Those industries are quickly replaced and other sectors expand, especially in East Germany you can see that the overall living standard is much higher - even among the people worst affected. /4
However, those industries were and are often a source or reference point of identity. Look e.g. at the fishing industry or on former factory or shipyard workers. /5
When their industries go down, it hits them hard. Not necessarily financially but also socially. For example, they may even find a new job with similar pay as before, but losing a workplace which was source of your identity is very painful. /6
And it's a major source of resentment. To provide a small anecdote: I remember the father of my first girlfriend who was working in LPG (a cooperative in agriculture) which went bust after reunification. /7
He found a new job close by in a juice factory, the pay was better, more time for the family but a high degree of resentment towards the new system and nostalgia over his lost job he worked in for almost two decades. /8
Interestingly, you could found a similar sentiment in his son who didn't really experienced GDR and worked in a well paid job which he actually liked and was interested in. /9
In other words, the resentment and/or nostalgia itself became somewhat a source of identity. I think policy makers ignored this point to date. /10
Very often in the policy making process the focus is solely on investment, new jobs but with explicit reference to economic prosperity. The social component is ignored, social welfare just seen as a consequence of economic or financial prosperity. /11
This makes it at times very difficult to actually understand resentments of people who are objectively better of now than they were on the past. Another point is the poverty and loss is too often seen in absolute instead of relative terms. /12
For example, my grandma was a supporter of the socialist regime in East Germany. And one of her arguments was that everything is now more expensive and live generally more difficult. /13
Frankly, that didn't hold up for scrutiny. Her pension (plus her pension as a widow) was plenty, she could even effort to support her kids. If you talked with her however it got clear that her reference point is relative. /14
She didn't compare herself and what she has now with what she had in the past. She compared her status compared to others (in the region and country) now with her status compared to others (in the region and the country) in the past. /15
Increased welfare in absolute terms becomes meaningless for people if they feel that other people (and sectors) profited so much more. What I want to say is, it's not just about throwing money at affected communities but also stabilising them socially. /16
Plainly speaking: You need to revitalise their lost sense of purpose and identity or replace it with something equivalent and constructive. This has been ignored to often, and with its contribution to the Brexit vote arguably also have had an impact economically for all. /17
Policy makers will need to consider that, and I think, just pulling new vocational training schemes put of your head won't do the trick (which seems to be part of the leveling up agenda by HMG). /18
Sure enough, in Germany it works but those are also embedded in a very specific cultural and social context - this context is missing in UK. So it may be economically a good idea, but may not address the social shortcomings I outlined. /19
Besides, if there is a lack of continuity in those policies, the problem may be amplified. In other words: If those policies which may be long term economically and socially successful are not consensual, they vanish with change of government. /20
And with that, people who are in those schemes will not just be financially affected but also their social status (and the qualification and position they obtained through those schemes). Resentments may even increase. /21
So yes, the state should brace itself for new developments and by any means embrace them. But they should equally be aware that those shake ups don't just have economic dimension but an equally complex socio-cultural one. 22/22
