Ordo- v Neoliberal: Why Germany Clobbers England

♠ Posted by Emmanuel in ,, at 6/27/2010 04:38:00 PM
We hoped for the best, but things turned out like they always do - Viktor Chernomyrdin

And so England's overtattooed players from overindebted teams are going home early, joining their equally underwhelming fellow Anglo-Saxons the Americans after a 4-1 drubbing at the hands of Germany. (Heck, the English didn't even play body art poster boy David Beckham due to injury.) Not that this result is of any surprise to me as I've intoned before, but the magnitude of the defeat is especially disheartening for those who thought England would've been less embarrassing.

Where does this chronic performance deficit come from? Most visibly, it is illustrated in the first divisions of the respective countries. The UK's higher propensity to pay massive, financially unsustainable wage bills on experienced (especially foreign) players tends to crowd out national player development. By contrast, German leagues have not been as marked by as much overspending, Certainly, German teams do not win as many Champions League or UEFA Cup titles as their free-spending English brethren, but when the world's biggest tournament comes around when you can't throw as much good money after bad, the country whose league nurtures home players fares better.

The rot in the English system starts early. To set the stage for today's thrashing, recall the 2009 U-21 event in which Germany beat England 4-0 featuring prominently, like today, the menacing Mesut Ozil. As you know, many other young'uns from that German side played today:
This victory, so deserved the rather ugly trophy could almost have been handed over by Uefa president Michel Platini at half-time, leaves the Germans as European champions at Under-17, Under-19 and now Under-21 level, reminding the Football Association of the importance of cranking up the production line of young talent...

England need to nurture such match-winners, players who are about more than athleticism and hard work. “He’s an outstanding player, who takes up intelligent positions,’’ [England U-21 Coach Stuart] Pearce said of Ozil. Germany’s coach, Horst Hrubesch, said: “This win shows that the great cooperation between the German FA and the smaller federations, and the clubs and the Bundesliga, is being repaid right now with the tremendous young players we have.’’
So yes, they have a system of player development which works well in Germany, with a long line of promising players at every single age level and just entering the Bundesliga. By contrast the UK World Cup team is pretty much geezerized, with several "golden generation" individuals representing the oldest England team ever and the most senior in the competition even without Beckham. Why is this so? First, there is a tendency to give megabucks to those who've done their best in other leagues like Michael Ballack. He was already fairly advanced in age when Chelsea picked him up. Next, these aging stars block the career progression of younger players. Not only have England's younger players been beaten already by Germany's during youth competition, but their disadvantage is further widened since the English don't get as much experience as Deutschland's kids playing first division football.

And here's the coup de grace: the Bundesliga is better attended and more profitable than the no-holds-barred spending competition in the Premier League featuring, among others, oligarch Roman Abramovich (Chelsea) and the Emiratis (Manchester City). Cost control in the Premier League? To hell with that German idea; it's the "sugar daddy" model in excelsis:
The Bundesliga recorded a £146m profit as revenue increased by £116m and wages went up by just £68m, according to Deloitte’s Annual Review of Football Finance. The German first division also recorded the highest attendances in Europe for the seventh successive season – attracting 8,000 more people per game than the Premier League.

The Premier League remains by far the biggest division in terms of generating revenue, which actually increased by £49m, but this was swallowed up by a £132m increase in wages. English top flight clubs spent in excess of £1.32billion on employee salaries – more than Italy’s Serie A (£0.93bn), Spain’s La Liga (£800m), the Bundesliga (£684m) and France’s Lique 1 (£615m).

The average Premier League footballer earned an estimated £21,600 a week or £1.1m a year in 2008-09 as top flight clubs each spent an average of £41m on player wages.
Germany wins over and over and over: (1) The fans get to see games at reasonable prices and can take their families along; hence the better attendance. (2) Exciting young players who come up through the system face top-level league competition early and thus sharpen their skills when representing their country. (3) More balanced competition due to the absence of megaspending foreign owners results in greater parity among teams. It's not "what the market will bear." Fans shouldn't be ripped off so horribly that Manchester United and Liverpool fans are massively annoyed at their helplessly debt-addled American owners. Definitely, English fans should press for changes in governance in the Premier League to make it, ah, more Bundesliga-like lest even worse performances materialize.

There are indeed strong parallels between what's going on in German versus English leagues that reflect political-economic governance. While neoliberalism is an orgy of liberalization, privatization and deregulation reminiscent of today's Premier League, the Bundesliga is very much in the ordoliberal vein, preferring stability, sustainability, and development. There is much you can gather on the Internet about it, but here is a brief snippet from the NYT Economix blog on ordoliberalism in today's context:
But take careful note of the name Walter Eucken, whom [Hans-Werner] Sinn references with a reverential tone that could be found only in Germany. Mr. Eucken, who died in 1950, is closely associated with a school of economics known as ordoliberalism, which teaches that state regulations can help the free market produce results close to its theoretical potential.

After World War II, ordoliberals (also known, confusingly given the argot of today’s anti-globalization protesters, as neoliberals) defended capitalism but said the state needed to play a strong role in regulating what did not come naturally. That meant ensuring stable prices, protecting property rights and – oh, how prescient this sounds today! – ensuring unlimited liability for those daring capitalists so that they bear the rewards, but also the risks, of their behavior.
Just as you would much rather have a reliable, residual value-retaining Volkswagen than a Yankee crapmobile like a Chevrolet or its (somewhat better) GM Europe equivalent Vauxhall, it would be utterly senseless to put money on the UK or US over Germany in football time and again. World Cup 2010 only validates this assertion, as if you needed any more proof.

While I don't see Germany winning the entire event--and I would honestly rather see a first-time winner as I always do--their time will come whether in Euro or World Cup tournaments. The German team is the second youngest in the tournament, so it will mature nicely before becoming England-style geezerized. Over the long term, the evidence shows ordoliberalism beats neoliberalism whether in industry or sport. If things are unsettled at home, it reflects abroad--especially on the world's biggest stage. Neoliberalism promotes boom and bust, while ordoliberalism promotes consistency. Germany always comes to play as the record shows: three World Cups victories (1954, 1974, 1990); four times runners-up (1966, 1982, 1986, 2002); thrice third place (1934, 1970, 2006); once fourth place (1958). If that weren't enough, they've won the regional Euro competition thrice (1972, 1980, 1996) as well as being runners-up thrice (1976, 1992, 2008).

It's utterly hilarious how debt-loving American and English neoliberals keep telling Germans how to run their affairs when they are so far behind in understanding how the game is played, be it the political economy of industry or football. As the saying goes, Germany plans ahead to stay ahead in whichever domain you choose. To be Deutschland uber alles, you have to work at it and have the proper attitude and determination at all levels of society. If it's any consolation, at least a 4-1 defeat at the senior level is an improvement over a 4-0 defeat at U-21, eh?

UPDATE 1: The Scotsman has more on Ozil and the multicultural German squad.

UPDATE 2: I scoop an honest-to goodness football site Goal.com in describing how the rot has set into the English Daddy Warbucks system.