Centrist Populism: Favoring State over Economy

the world would be a better place if only Karl Marx were right in this one regard:

What he meant: The structure of production governs the political landscape. For him, it was clear that politicians would not pursue anything that would risk the economic foundation or disrupt the capitalistic order.

But it is not like that. Consciousness has risen above being. Politicians speak of the "primacy of politics," which can be interpreted as a challenge to the private sector.

Politicians prefer threatening and punishing other nations, whereas businesses want to advertise and sell.

To governments, other nations are rivals. For businesses, these same states are potential customers. Political leadership seeks to tame and constrain other nations in the geopolitical power struggle.

Conversely, economic leadership wants to turn people into workers and workers into customers, true to Henry Ford's old motto:

The truth is: Wealth creation and politics, or in Karl Marx's terms, the base and the superstructure, represent two opposing concepts. Henry Kissinger described this notion of hostility in his book “World Order”:

The same goes for the voting population. It's a paradox that millions of people, who benefit from the globalized economy, reject the very system they profit from. Their homes are filled with Chinese exports, and still, they cast their vote for right-wing populists.

Novelist Jenny Erpenbeck notes that:

Political parties channel nationalist sentiments in their slogans: "Prima gli Italiani," "Make America Great Again," "Take back control," "Hungary belongs to the Hungarians," "Australia first," and "Alles für Thüringen."

Suddenly, it’s all about power, not prosperity. Political primacy prevails – and not just in right-wing politics. We witness a Zeitgeist defined by protectionism, as political leadership wants to prove its authority vis-à-vis the economy and the electorate.

• The US government refuses to supply the Chinese tech sector. It wants to dominate, even at the cost of higher import prices.

• The Corporate Sustainability Due Diligence Directive (CSDDD) in the European Union compels companies to export not only products but also virtues and values.

• With its extraterritorial sanctions, the US penalizes all companies that trade with systemic enemies like Iran or North Korea.

• Germany’s economic strategy prioritizes transformation over advancement: The goal is to reshape the economy based on political ideals. According to the consulting company Ernst & Young, the transformation to meet emission targets will cost about €1.2 trillion by 2035.

In other words, politics attempts to confine the nation-state within geographical and authoritative boundaries that the economy has already surpassed.

Proof: The US Treasury has issued over 70 different sanction initiatives targeting 9,000 individuals, states and entities. In her book “Backfire,” Agathe Demarais calls this “sanction overkill.”

Both large corporations and mid-sized family businesses rely on global sales, supply chains, and the skilled immigration of labor. Jenoptik AG in Thuringia has launched a campaign called #weltoffen (open to the world), with which CEO Stefan Traeger wants to combat xenophobia.

In today’s Pioneer Podcast, he talks about Jenoptik’s latest campaign, “#BleibOffen,” – which translates to ‘#BeOpen.’ The campaign was started in light of the growing support for the extremist nationalist party AfD (Alternative for Germany). Specifically in Thuringia, where Jenoptik is headquartered, and xenophobia is as strong as ever.

Traeger and Jenoptik, like many modern companies, need workers from around the globe and, above all, rules for a level playing field in the world economy – not their own front yard. Mercedes wants to sell cars to the world, not just to Thuringia.

The corporate world is full of opportunities. You do not want to decouple and detach in this world — you want to connect. All efforts are aimed at opening up additional markets. It is imperative to constantly avert cultural and consumer tensions.

However, whoever enters the realm of politics enters the realm of fears – those that are founded and those that are conjured and cultivated by campaign managers and spin doctors.

Step 1: Scare the electorate.

Step 2: Step up as their savior.

A pattern unfolds: Frightened animals refuse to eat and procreate. Frightened consumers are feeling no different: They become stingy, lose their appetite to consume – and even their desire to procreate has evidently faded. The modern individual spawns new phobias, not offspring.

Conclusion: Political primacy puts the nation first, not its economy. The current economic policies in Washington, London, Brussels and Berlin have more in common with the right-wing populism they are fighting than they would like to admit. May these new protectionists have the capacity for self-awareness, or – to say it in the words of political scientist Stanley Hoffmann:

• After negotiations led by Egyptian mediators between representatives from Israel and Hamas, a ceasefire is still not on the table.

• We review the most recent quarterly figures from Novo Nordisk, Shell and Linde.

• Today is International Press Freedom Day.

For the Pioneer Podcast, I spoke with the CEO of Jenoptik AG, Stefan Traeger. He has launched a testimonial campaign featuring his employees on large billboards in Jena to advocate for openness. He uses “#BleibOffen” to spread his message, which translates to ‘#BeOpen.’

In preparation for the upcoming state elections, where the AfD and its top candidate Björn Höcke are predicted to do well, Jenoptik and Traeger want to send a clear message. He explains their goal as follows:

What does ‘being open’ mean to him? His response:

Where did the idea for this campaign come from? Was it created in light of Thuringian politics, considering that the state holds about eleven percent of Jenoptik AG’s shares? I asked Traeger. His response:

In the Pioneer Podcast this morning, you can hear our entire conversation in German.

Hamas Leader in Gaza Doesn’t Trust Negotiation Offer

After negotiations led by Egyptian mediators between representatives from Israel and Hamas, a ceasefire is still not on the table. Hamas leader Jahia Sinwar sees the Israeli offer as an offer "in American garb" that offers no prospect of ending the war.

Israel had offered to guarantee a ceasefire in exchange for the release of hostages. Hamas is demanding an end to the war — Israel refused. Should no agreement be reached, Israel announced that it would launch the long-announced offensive in Rafah.

Provisional Port Almost Ready

Due to the humanitarian situation, the US army has built a temporary platform several kilometers off the coast of Gaza in record time. From there, people are to be supplied with food, clean water and medicines via a footbridge. US soldiers will not have to set foot on the mainland.

Joe Biden announced the project at the beginning of March, and construction is almost complete. The Israeli army announced that it supported the American initiative and wanted to take appropriate security precautions.

It is important to know: Food, drinking water and medication were only arriving sporadically and in insufficient quantities to the Gaza Strip via land routes. The Israeli army had sealed off the combat zone.

Growth Continues: The Danish pharmaceutical company Novo Nordisk reported revenue of 65.3 billion Danish kroner (€8.76 billion) for the first quarter of 2024, a 24 percent increase from the previous year. Net profit rose 28 percent to 25 billion kroner (€4.26 billion).

Weight Loss Shot Remains a Bestseller: In the USA, the weight loss drug "Wegovy" is now prescribed to 25,000 new patients per week, compared with 5,000 in December 2023.

Competition Never Sleeps: Nevertheless, growing competition in the market for weight loss injections from the US company Eli Lilly has forced Novo Nordisk to lower the price of Wegovy. CFO Karsten Munk Knudsen told the Financial Times:

Disappointment: The figures were not well-received on the stock market: the stock lost around 2.6 percent. This may be due to the already high valuation of the company and related profit-taking by investors. With a market capitalization of around $420 billion, Novo Nordisk is Europe's most valuable publicly traded company. Last year, the stock gained over 50 percent.

Booming Business: Higher oil prices resulted in a net profit of $7.4 billion for Shell in the first quarter. Although this is 20 percent less than the previous year, it exceeded market expectations, which had anticipated only $6.25 billion.

Investors put pressure on management: With a new share buyback program worth $3.5 billion, Shell's board, led by Wael Sawan, aims to keep investors happy. However, they are applying pressure: Institutional investors like Axa and Amundi believe the oil giant should be more proactive in reducing CO2 emissions. According to them, emissions should be cut by nearly 50 percent by 2030. This issue will be debated at the annual general meeting on May 21st.

Unimpressed: Yesterday's solid financial results and the share buyback program were insufficient for investors. The stock barely moved, reflecting investors' expectations for more motivated plans.

The industrial gas specialist Linde fell short of market expectations in the first quarter. Revenue decreased by one percent compared to the previous year, totaling $8.1 billion. Forecasts had anticipated an increase to $8.4 billion. However, net income rose from $1.5 billion to $1.6 billion.

Adjusted Outlook: The forecast for the full year has been slightly lowered in light of the tense economic situation. Linde now expects earnings per share of between $15.30 and $15.60 for 2024. Previously, the range was $15.25 to $15.65.

The stock market did not take kindly to these figures. Linde's stock fell by nearly five percent over the day.

Today is International Press Freedom Day.

The origins of journalism date back to the first century BC. In Ancient Rome, Consul Gaius Julius Caesar introduced a daily news sheet called the Acta Diurna (eng. Daily Events), distributed on papyrus.

Throughout history, journalists who observe and analyze politics and current affairs have frequently found themselves at odds with the powerful, often becoming targets.

The story of journalism is also the story of censorship. Napoleon Bonaparte declared:

In 1695, under the influence of humanists John Locke and John Milton, England introduced the first law to abolish censorship. Towards the end of the 18th century, modern constitutions started incorporating press freedom mandates.

Today, democracies are in retreat. In 2022, for the first time since 2004, the Bertelsmann Foundation recorded more autocratic than democratic states. Accordingly, press freedom is increasingly at risk.

According to a report by the Committee to Protect Journalists, at the end of 2023, around 320 journalists were imprisoned worldwide, and the actual number is likely much higher.

Stewart Alsop, an American newspaper columnist, succinctly captured the importance of a free press:

Wishing you a wonderful start to your weekend. Stay informed. Stay with me.

Best wishes,