German Hartz reforms used state payments to convert unemployed people into entrepreneurs

Evidence

Following the Hartz reforms of social security and unemployment insurance, long-term unemployed people in Germany are offered monthly payments to start their own business for up to three years. Hundreds of thousands of new small businesses dubbed Ich-AG (I-corporation) have been funded, albeit with mixed success. In any case it is clear that entrepreneurship and entrepreneurial behavior is not left to natural development or chance. There is a common and clear understanding across the mainstream political parties now to transform public and private institutions in support of entrepreneurship. Only a lack of political initiative and stamina gives reason for pessimism, pace Schumpeter. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 310

Categorization

• SHARE: The Ich-AG program — paying the long-term unemployed to start businesses with mixed success — is a precise, surprising policy detail worth sending to anyone working on labor policy or the Hartz reforms.