German industry is set to pay about 40% more for energy in 2023 than in 2021, before the energy crisis triggered by Russia's invasion of Ukraine, a study by Allianz Trade said on Monday, citing contract expiries and delayed wholesale pricing effects.
It’s not like Germany has a competitive advantage in terms of labour costs either though, nor is there any benefit in terms of exchange rate. Net costs of doing manufacturing in Germany are higher.
And given that capitalism is a system of competition this creates a selection pressure for companies to cut costs. If a company is doing manufacturing in Germany while their competitors are doing manufacturing in the US, then their competitors end up making more profit. As we all know investors and shareholders demand that companies maximize profit above all else, and would push the company to do what their competitors are doing.
If Germany chose to nationalize industry and operate it at reduced profit then it could certainly do that. However, I hardly see it happening under the capitalist system which Germany embraces.
It’s not like Germany has a competitive advantage in terms of labour costs either though, nor is there any benefit in terms of exchange rate. Net costs of doing manufacturing in Germany are higher.
And given that capitalism is a system of competition this creates a selection pressure for companies to cut costs. If a company is doing manufacturing in Germany while their competitors are doing manufacturing in the US, then their competitors end up making more profit. As we all know investors and shareholders demand that companies maximize profit above all else, and would push the company to do what their competitors are doing.
If Germany chose to nationalize industry and operate it at reduced profit then it could certainly do that. However, I hardly see it happening under the capitalist system which Germany embraces.