UdZ 01.21

UdZ 1-2021 / 2 The way out of the coronavirus crisis is to innovate. But this requires a new understanding of the state: the state as a non-profit capitalist. The Sparkof Progress First, there was the ‘kaboom’. This is how Germany’s Finance Minister Olaf Scholz referred to the record sum of 130 billion euros with which the German government has sought to pull the German economy out of the COVID-19 crisis. This was followed by warnings that by providing the stimulus package, the state ran into danger of turning over-indebted companies into aimless, endlessly wandering zombies. The longer the COVID-19 virus stays in charge, the greater will be the debate about the role of the state. Is the state the better entrepreneur after all, buying into companies like vaccine developer Curevac and keeping corporations like TUI and Lufthansa alive, instead of letting the shareholders decide? Or is it high time for the market to determine which companies will have a successful future? Those who stylize the state as a super-entrepreneur or call on it to withdraw across the board are overlooking two essential aspects: First, we will only come out of this crisis in one piece with the help of innovations. Second, the stateplays an indispensable role inall phases of successfulinnovation,whichtheAustrianeconomistJosephSchumpeter aptly described as creative destruction – as an enabler of the market, a catalyst of innovation, a venture capitalist, and a technology selector. It is not enough to demand that a state that assumes responsibility for life and health must in future also secure stocks, warehouse inventories, and supply chains, and ensure that protective and medical items are available, even if this contradicts key economics principles and market rules. What is needed instead is that the states assumes the role of the innovator. >