As master strategist Otto Von Bismarck was well known for his brilliant manoeuvres in politics and military matters. To my mind, the Iron chancellor’s forgotten other side was his ability to foresee the role of geoeconomics in building the German super state.
Ushering in the first ever welfare state in Germany
after unifying the German states by 1871, the Iron Chancellor had carefully crafted his
geoeconomics strategy to build a strong economic power house in Germany.
He had a multi-faceted approach to get the people ready for the major take-off.
Firstly he introduced universal suffrage so that the voice of the people can be
echoed in the halls of power
Following up this remarkable transformation he made education compulsory along with state sponsored health care system that ensured healthy educated labour force skilled in many fields knocking the doors of nascent industrialists. Besides he also set in motion effective and efficient banking system though owned and operated by private sector was under surveillance of the state to implement macro policy instruments of geoeconomics.
These far reaching reforms cannot come without heavy cost on the treasury. As the main income of the treasury was levying tariff & taxes he played one party against the other in harnessing the cost benefit analysis. During 1866–78 he allied with Liberals who supported free trade and low tariff regime, to give additional incentives to industrial development that started in 1850 go full steam.
At the core of his thinking, he identified that policy parameters must weigh in the proportion that could boost both industrial production and state revenue. When depression struck Germany in 1873, he has to change course. By 1878 he dumped the Liberals and moved to the Conservatives camp by imposing tariffs on importation of steel and grains. First measure propelled the optimum use of steel mills domestically and the second gave required a shot in the arm for agricultural producers.
Consolidation was next item in his agenda. Running roughshod with small sized farmers and industrialists and also earning bit of displeasure from the Monarch he encouraged the formation of conglomerates in the industrial area and cartels in agriculture. The magnitude of this matter was seen only in the beginning of 20th century ten years after the Iron Chancellor resigned in 1890. Germany was not only the number one industrial power in Europe but the number one steel manufacturer in the Globe.
Let this sink in: Bismarck is the master strategist Germany ever had in politics, military and geoeconomics!
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
No comments:
Post a Comment