Germany's New Old Problem: The Rise of Neo-Nazi Violence

The factors that can lead to the rise of far-right movements appear increasingly common in Germany today, where residents worry about immigration and eurozone crises

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Police officers clash with a far-right demonstration in Frankfurt in 2007 / AP

When German authorities last week connected neo-Nazis to several murders of foreigners in Germany between 2000 and 2007, it shocked the country and its leaders. Chancellor Angela Merkel struck early and hard, calling the attacks "shameful" for Germany, pledging action. Meanwhile, of course, the European debt crisis isn't going away, and Merkel has fought to stay on-message, encouraging Germans to stick with other European countries on the bailouts.

It's possible, though, that these two topics might not be as separate as they seem.

The link is explored most forcefully in a 2005 book, The Moral Consequences of Economic Growth, by Harvard economist Benjamin Friedman. At the time, he wanted to explain why caring about the economy isn't just a matter of neo-mercantilist greed. "Are we right to care so much about economic growth as we clearly do?" he asked in the book's opening. Economic growth doesn't just make us richer, he argued, it also makes our societies more tolerant. But what about the converse?

In that book as well as lectures taking off from it, Friedman reviewed the histories of the United States, Britain, France, and Germany, arguing, among other things, that there is a strong association of liberal democratic advances -- think civil rights legislation, for example -- with periods of economic growth. Similarly, there is a strong association of racial, ethnic, or religious tension and violence -- or anti-immigrant sentiment and legislation -- with periods of economic stagnation.

People evaluate their standard of living in two ways, according to Friedman: whether they are living better than they previously have and whether they are living better than others around them. But, as Friedman explained in a 2006 lecture to the American Economic Association, these two types of evaluation function as substitutes for one another. "Getting ahead by either benchmark strictly diminishes the urgency that people attach to getting ahead by the other one," he said. When people's living standards rise (due to economic growth, for example), they stop caring so much about being ahead of their neighbors, making them less suspicious and more tolerant of those around them. This is the mechanism by which Friedman believes tolerance, and other values of a liberal democracy, are encouraged.

But there's a flip side. If, argues Friedman, large swathes of society believe their progress is the "circumstance under which the society also moves forward in the political, social, and ultimately moral dimensions" mentioned above, "then no society -- no matter how rich it becomes or how well formed its institutions may be -- is immune from seeing its basic values at risk whenever the majority of its citizens lose their sense of forward economic progress."

In other words, if Europe's about to plunge back into recession, or even continue with the current stagnation and instability, then Germany really should be worried about these anti-immigrant attacks -- the sentiment that fueled them is at risk of growing, according to this theory, not shrinking.

Though Friedman's work received largely quite positive reviews in academic journals, it has its critics as well. The neo-Nazi attacks in Germany happened between 2000 and 2007, a time in which Germany's GDP trended healthily upwards. That's actually not the sort of objection Friedman's fellow academics seem to raise. For starters, Friedman doesn't suggest that individual upticks or dips in tolerance can always be explained by economic indicators, or that it's always easy to perceive the relationship between the two. His argument, rather, is that when one reviews the history, there does seem to be a correlation. At the time of his lecture to the American Economic Association, for example, he pointed out that in the preceding five years, "real U.S. GDP advanced on average at 2.6 percent per annum." In each of those years, median income "failed to keep pace with inflation." Therefore "the fruits of that increased production have been sufficiently skewed that more than half of all Americans nonetheless saw their incomes decline."

What critics have taken issue with is more the implications of Friedman's argument: is growth really a cure-all? Avner Offer of All Souls College at Oxford, reviewing Friedman's book for the Economic History Review, didn't think Friedman "engaged" enough "with the disorders of growth," suggesting that in as rich a country as the U.S., "redistribution" might be a better focus. Amitai Etzioni for the Sociological Forum pointed out the "very likely possibility that as people gain more, their aspirations will grow in turn, and that under these conditions they will compare themselves to still richer people and hence become less content and less liberal, not more so." He pointed out that "high economic growth, especially in developed nations," can come with its own sacrifices. Joseph Stiglitz, Columbia University economist and former Chair of the President's Council of Economic Advisers and Chief Economist of the World Bank, offers a particularly clear articulation of this theme: though economists have often suggested growth brings more social justice, "even if it has been true in the past, it may not be in the future." The environment starts to become an issue, for one thing. And Stiglitz doesn't seem 100 percent convinced that the U.S.'s increased wealth is currently resulting in increased tolerance.

But for such a bold argument as Friedman's, that's actually not a whole lot of criticism. And even these reviewers think Friedman has gotten a lot right. Furthermore, there's already some evidence to support Friedman's theory as it would apply, say, to Germany, depending on how you read the numbers. Though right-wing politically motivated crime dropped from 2009 to 2010 in Germany, according to Germany's Federal Ministry of the Interior, neo-Nazis in Germany actually been picking up members and set a new record for demonstrations over the same period. As I pointed out in an earlier post, it was only last year that then-director of Germany's central bank, Thilo Sarrazin, made a splash by authoring a book arguing that unintegrated, uneducated immigrants posed an existential threat to Germany, and that educated Germans needed to out-breed them.

Economically, the danger right now is that even if Germany's growth so far has remained strong, Europe as a whole may be sliding into recession. Austerity measures to address the debt crisis take money out of national economies, making lower growth more likely. Already in France -- one of the stronger countries, economically -- growth predictions for next year have been revised down from 1.75 percent to 1 percent, and that was before France's latest round of austerity measures were announced.

As in most countries, there are plenty of preexisting resentments that this sort of economic stagnation could inflame. Though Turkish immigrants were targeted in the string of murders, represent the largest and most prominent population that Germans might consider un-intregrated, and are viewed with particular suspicion, Germany also hosts plenty of immigrants from southern and eastern Europe. German fears of Muslim extremists among the Turkish population haven't helped integration, and while changes in the highly old-fashioned German blood-based citizenship law took effect back in 2000, many immigrants still feel themselves facing an unfair battle when it comes to finding jobs and working their way up.

They're not imagining it, either: a study in 2010 found firms overall 14 percent more likely, and small firms 24 percent more likely, to follow up with an applicant with a German-sounding name than with one with a Turkish-sounding name. With German neighbors confronted with statistically confirmable higher crime rates in the immigrant populations, both sides have things to complain about. It's possible that natural stores of goodwill and generosity are rapidly being depleted as well, as all residents deal with belt tightening in order for Germany to bail out its more profligate southern European neighbors. Despite Germany's best and most generous efforts, Reuters reported Wednesday that "bond market contagion is spreading across Europe."

Who knows to what extent Germany will see more of the kind of tension on display in the past few years, most disgustingly in the string of neo-Nazi-perpetrated murders. One thing's for sure, though: Germany's doing very well economically right now compared to the rest of Europe, and arguably even compared to the U.S. So if Germany should be worried about the social effects of economic stagnation, a whole lot of other countries probably should be worried too -- perhaps even more so.