The Political Economy of German Unification

By Thomas Lange; J. R. Shackleton | Go to book overview

Chapter Six
THE ROLE OF SMALL AND
MEDIUM-SIZED ENTERPRISES IN THE
NEW FEDERAL STATES

Wolfgang Nicolai


Importance of the Mittelstand for a
Market Economy

Few doubts exist about the importance of small and medium- sized enterprises, or in a broader sense of the middle class, for a national economy subject to market rules. It is possible to say, without exaggeration, that a prosperous market economy cannot exist without a healthy Mittelstand.

In spite of fears about concentration and centralisation in the economies of highly industrialised states, the Mittelstand has held its own. In the 'old' Federal Republic of Germany (FRG), its share of most important economic aggregates has remained relatively constant. However there have been considerable structural changes and, at times, some set-backs. For example, one indicator is the average number of self-employed people. For West Germany the number fell from 4.42 million in 1970 to 3.03 million in 1990 before recovering to 3.06 million in 1992. The lowest level was reached at the beginning of the 1980s: since that time we have observed a gradual upward trend. In this connection we should, however, also remember that the total number of potentially employed people in West Germany increased by 15 per cent from 1970 to 1992.

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