Institute of European Studies

"...It is impossible for any community to have very full employment and completely free collective bargaining and stable prices. Either one of the three will be completely sacrificed, or else all three will have to be modified."

"...In the last resort the answer will be given not by economists or by administrators but by the public opinion. At each corner of the triangle, the limiting factor is what public opinion will stand, and the degree of comprehension that public opinion will show for an economic policy that tries to preserve balance between competing objectives."

(The Economist, August-October, 1952: 376, 435)

Can Germany in the 1990s provide a contemporary example of the “uneasy triangle” posited by The Economist in the early 1950s? As the millennium approached, Germany’s inflation rate was very low; its unemployment rate unacceptably high; and its system of collective bargaining arguably the strongest to be found in any major industrial country. Public opinion appears to have played a more limiting role in the first of these corners of Germany’s triangles than in the other two.