Head to Head: A Meeting of Inspired Minds

Manufacturing Declines, Populism Rises: The Politics of the New Economy

The rise of monopolies via intellectual-property rights has shifted profits out of manufacturing and depressed wages in many countries. Is this shift linked to the rise of populist and anti-establishment parties? If so, how? In this talk, American Academy in Berlin fellow Herman Mark Schwarz (University of Virginia), in conversation with Klaus Prettner (Universität Hohenheim), will discuss three different mechanisms in play: 1) the fragmentation of supply chains, which pushes low-skill work out of profitable companies 2) the geographic dispersion of low- and medium-skill work to low-wage and rural areas domestically and overseas 3) the rise of monopolies hiring in specific labor-markets in the face of buyer demands for lower prices. All three of these depress wages and short-circuit pathways for upward mobility inside high-profit, high-wage firms. Seen in this light, rising wage and regional inequality—which dash expectations and spurn feelings of neglect—are the economic fuel for today’s populist and anti-establishment parties.

In cooperation with the Evangelisches Bildungszentrum Hospitalhof Stuttgart and the Deutsch-Amerikanisches Zentrum Stuttgart. Generously supported by Robert Bosch Stiftung GmbH, Holtzbrinck Publishing Group, and Berthold Leibinger Stiftung GmbH