Author | Editor: Kuznar, E. (NSI, Inc.)
Two datasets on wealth and status distribution in Germany were analyzed: 2015 World Bank quintile and decile estimates of income, and 2014 International Labor Organization (ILO) data on income by occupation.
Income data provided by the World Bank and occupational data provided by the ILO show similar patterns of a risk acceptant population with both the individuals or occupations earning the highest incomes being the most risk acceptant. Germany’s mean Arrow-Pratt measure is a modest -3.97.
Significance for Risk Taking and Stability
The risk acceptant nature of the German population shows some potential for generating instability in both its civil society and political institutions. However, Germany’s risk averse population may be its greatest liability for state stability. Risk aversion changes to risk acceptance by Germans in occupations where people fear loss in income and status. Russian propaganda and the surge of refugees have combined to create a perception of threat and loss in many working-class Germans, which appears to be fueling the rise of more authoritarian right-wing groups (Shuller, 2018 & Koehler, 2018); this extremism is represented by the white nationalist Alternative for Germany (AFD) which has gained seats in the German Bundestag and now possesses political power (Deutscher Bundestag, 2019). Germany also has an ongoing economic issue with its bottom 20% of society owning little to no assets (WSI, 2019). This gives people in this category very little chance to improve their quality of life.
Implications for US Interests
The US and Germany continue to maintain a strong alliance. Germany is often the most economically capable to aid the US in its Eastern European interests (Janning & Möller, 2016). Despite their close alliance, the two countries have some policy differences in the manner in which they deal with China and Russia (Sharma, 2018). The risk acceptance of Germany’s population has allowed Russia to encourage far right-wing organizations that challenge the German political status quo. This risk acceptance has culminated in the insertion of Russian influence into German political institutions, which threatens US interests in Germany (Shuller, 2018; Applebaum, 2018).
Implications for China’s Interests
China’s interests in Germany are coming under suspicion by the German economic and political organizations it relies upon to continue its advancements (Düben, 2019). This is due to slowing economic reformation that is supposed to ease access to Chinese markets and is potentially a growing hurdle for China to overcome, as it has in the past had a warmer relationship with Germany than many of the other European Union member states (Kakissis, 2019). Even with the current shift toward Chinese skepticism, Germany’s risk acceptant population is partially fueling grassroots movements by far right-wing organizations that favor autocratic governance presents China with an opportunity (Shuller, 2018).
Implications for Russia’s Interests
Russia has both strong opportunities in Germany and major obstacles to overcome. It shares strong trade with Germany (OEC, 2017), however it has at the same time both inserted political influence and alienated itself from the German government (Applebaum, 2018; Stelzenmuller, 2017). It has ridden a wave of right- wing populism, giving media aid to members of the AFD in order to gain political influence in Germany (Applebaum, 2018). However, its success has put the rest of Germany’s government, which make up the vast majority of its political offices, on high alert and helped highlight the saliency of keeping Russian influence out of Western democracies (Stelzenmuller, 2017).