Hertie School President discusses political economy, the common good and the future of the School with our student magazine.
The Governance Post: What motivated you to study political economy as an undergraduate and then to pursue a PhD researching the impact of economic and monetary union on fiscal and wage-setting institutions in EU countries.?
Enderlein: As a teenager, I discovered economic questions. I spent my time trying to understand economic news, growth, and recessions. Economics is not covered well at schools in Germany. When I went to study at Sciences Po, I realised that my favourite course was economic history, which was taught at 9 o’clock in the morning in this huge auditorium with very few students. I discovered how much I enjoyed the relationship between politics and economics. During my PhD, my focus was initially not so much on Europe, but on international economic and monetary cooperation. But the key area in which international economic cooperation materialises is the EU because it is the deepest connection of countries possible. My question for the PhD became more about: “How can we make this cooperation live? Is it possible to share a currency between initially 11 and now 19 separate countries under a common monetary policy?” I got drawn into these questions and went to the European Central Bank.
TGP: What were your experiences working as an economist at the ECB and your motivation for teaching economics in higher education afterwards?
Enderlein: I joined the ECB because I wanted to discover the other side: the day-to-day work of a civil servant. I was very lucky because this was at the time that the Convention on the Future of Europe was convened to write a constitution for the EU. I became the ECB’s representative in this Convention. The ECB normally should have sent someone very senior, but they were afraid that the Convention would re-negotiate the ECB’s position and mandate, as they were only three years old at the time. The ECB did not want to even open the possibility of a negotiation, so they decided to send the most naïve, inexperienced and youngest member of staff, which turned out to be me! Participating in the Convention was a truly formative experience. I travelled to Brussels every week and was in the room when the delegates and foreign ministers negotiated. The Convention eventually produced a draft treaty for the Constitution of Europe, which never saw the light of day because it was rejected by France and the Netherlands. It turned into the Lisbon Treaty eventually. I learned a lot about the EU during these two years. And I realised that EU integration was truly unfinished business. I reflected quite a bit on how I could contribute further to the completion of this endeavour and quite quickly realised that I didn’t want to stay a civil servant, but needed freedom of thought. I applied to an assistantship professorship at Freie Universität Berlin. At that time I was already aware that the Hertie School project was in the making. This also pulled me to Berlin.
TGP: How was your transition to teaching at the FU? How has your experience as a professor shaped your understanding of “political economy” today?
Enderlein: I began teaching in a niche institute at the John F. Kennedy Institute for North American Studies, which was shielded from the very large Freie Universität. All of my classes had a maximum of 30 students, which allowed me to do the applied type of teaching that I like: the connection between applied questions and research of the highest standard. I then joined the Hertie School as a member of the founding faculty. Very soon after the start at Hertie, the global financial crisis of 2008 hit and I started to adopt a “research-live” perspective, mixing academic work with political advice and outreach. It was funny to see how my research trajectory had prepared me for this in an unintentional way. Every academic needs a second big research topic in addition to their PhD work. I had worked on the euro in my PhD, but then started to research sovereign defaults, which was at the time largely a topic related to Argentina, Uruguay, Brazil, and to non-European countries. But when the financial crisis took place in the euro area, these two topics suddenly converged. The biggest debt restructuring in history turned out to be in Europe – in Greece in 2012. I realised my main comparative advantage was to translate academic research into policy action by giving advice and helping the public understand these “once in a lifetime” economic crisis events.
TGP: You also worked on a 2014 report on inequality with Jean Pisani- Ferry for German Economics and Finance Minister Sigmar Gabriel and French President Emmanuel Macron. The report recommended converging strategies for higher education among EU countries. It referenced Jan Tinbergen’s “race between education and technology” – to what extent is this a common EU policy issue? Can technology help address inequalities in higher education?
Enderlein: I think we need to ask whether we have really understood how rapidly the world is changing in terms of technology, production capacities, value addition, and the geographical scope of markets. We all know the buzzwords: digitalisation, globalisation, and climate change. But do we know how profoundly these phenomena will impact the way our economies work? A related question is then: What is the skill set young people need today so they can be successful in the next five decades? If we are honest, we do not have the answer to this. Some education systems are developing massive large-scale programs to teach math, physics, computer science, or engineering. Think about China or India. Europe still needs to find its position. We used to be the frontrunner in educating talent for centuries – now we no longer are. You mentioned some of the work I did on France and Germany. Yes, this is an example of how a European position could emerge. Both countries have strengths and weaknesses in their respective systems. And both should learn from each other. France can learn from Germany’s “vocational training”, which, if applied in the right way, can lead to successful on the job training in a company with higher-level education in parallel. And Germany can learn from the centralised French education system, which, if applied in the right way, can improve equal opportunity.
TGP: How do you define the digitalisation of higher education? What are the opportunities and challenges for the Hertie School’s five new centres of competence and for dialogue with other such institutions in Berlin and internationally?
Enderlein: The Hertie School is small. For us, large-scale digitalisation of education, which generally implies long-term standardisation of teaching content, would be the wrong approach. Our learning approach is focused on interaction. On the other hand, this does not at all imply that we don’t study digitalisation or the implications of it. Quite the contrary: with the creation of the new Data Science Lab, directed by Slava Jankin, we can focus on machine learning, artificial intelligence, and big data. The creation of the Centre for Digital Governance, directed by Gerhard Hammerschmid, is another step in the same direction. We will focus on the “governance of digital”, i.e. the regulatory side, but also on the “digital of governance”, i.e. the use of digitalisation for governance purposes, such as in the e-government discussion. These issues are difficult and raise a number of challenges for societies, not least with regard to values and norms. We will soon be hiring a professor of ethics and technology to address such issues. You also asked the broader question about the Centres. In general, these Centres are meant to bring together specialised communities of expertise around the areas of research, teaching, and outreach. The topics are International Security, Europe, Fundamental Rights, and Sustainability – and I already mentioned Digital Governance and the Data Science Lab. As you can see from these topics, we don’t talk about a department structure – only around half of the faculty will be affiliated with these Centres. Many other faculty members will continue to do their own interdisciplinary research as in the past. One important aspect in the Centre creation is the benefit for students: Centres will run seminar series, facilitate master’s thesis supervision in their topic areas, and allow students to connect to a specialised community in areas where they might want to look for jobs. We could even think about degree programs that are closely linked to Centres.
TGP: As a political economist, what are your personal values and motivation for being actively engaged for the common good?
Enderlein: In contrast to what many people believe, economics has a strongly normative and political dimension. We study allocation mechanisms under the condition of scarcity. But allocation is inherently political and related to the common good. Adam Smith focused on the baker who bakes bread for self-interest, but then generates the positive externality of producing food for the community. Economists focus a lot on markets as the most efficient and effective allocation mechanisms. There are good reasons for this. At the same time, the past decades have shown that we might have pushed this idea of markets almost to the extremes. If you want to reduce the climate change challenge to one sentence, you can say that we haven’t managed to internalise the externalities of our economic growth in the right way. This points to a malfunctioning of markets. By the way, a similar challenge arose before the 2008 financial crisis, when the negative external effects of excessive financialisation were not taken into account. Smart economists will constantly review the way they look at markets, societies, economies. This challenge drives me. I grew up in a political family. My father was a politician. One moment that has shaped me was the fall of the Berlin Wall, which fell squarely in my youth. I was 15 years old and had grown up with the belief that the iron curtain would stay for eternity. And then, suddenly, everything collapses. We sometimes need to be reminded that change is not only possible, but often much closer than we believe. Once you realise this, then you can think about how to trigger change in a positive way. As you grow up, you realise more and more that it is actually possible to improve the world.
TGP: On Sept. 4, you signed the Diversity Charter (Charta der Vielfalt e.V.), which defines the value of demographic diversity in terms of economic growth for participant institutions in Germany - including gender, nationality, ethnic background, religion or worldview, disability, age, sexual orientation, and identity. How does this apply to an institution of higher education? What measures will you take in the upcoming year to assess and overcome barriers?
Enderlein: This broad definition and the commitment to it is very important to us – which is the reason I signed the Diversity Charter. The charter was drafted for German companies and institutions, including many institutions of higher education. All the signatories share a common belief in supporting diversity and inclusion through the workplace or the institution. I want to send a very clear signal to new students: “come as you are.” We look for a large variety of profiles, backgrounds, personal experiences, and lifestyles. But our approach will only work if we live diversity and inclusion as core values. Throughout the past academic year we had a task force working on our Diversity and Inclusion approach. We have adopted 82 individual measures that we will implement to make the Hertie School a more diverse and inclusive place. I will present the 82 measures at the All School Meeting in November.
TGP: What does “sustainability” mean in the political economy context? What does it mean for your vision and leadership for the Hertie School in its current transition to the new campus in 2022 and its presence in the international academic and professional spaces in the upcoming three years?
Enderlein: We need to live what we preach. I mentioned the difficulties in internalising negative externalities a few minutes ago when we spoke about economics. The Hertie School needs to be aware of its own strategy in this respect. So we have decided to do the same exercise for sustainability this year that we did for diversity and inclusion last year. There will be a task force that will review all dimensions from our paper and office supplies to our carbon footprint. In the same vein as the 82 diversity and inclusion measures, we will adopt several measures for sustainability in the next year. The motto of the Hertie School, “understand today, shape tomorrow,” also applies to ourselves: We need to evolve steadily to be one of the most attractive places for young talented individuals who are actively engaged for the common good.
TGP: Thank you very much for your time
Originally published in The Governance Post.