Great fortunes are being made on shrinking the economy rather than growing it.

Instagram got sold for a great fortune not because it only had 13 employees but because it’s value comes from the millions of users who contribute to the network for no return.



The situation reminds me a little bit of something that is deeply connected, which is the way that computer networks transformed finance. You have more and more complex financial instruments, derivatives and so forth, and high frequency trading, all these extraordinary constructions that would be inconceivable without computation and networking technology.

At the start, the idea was, “Well, this is all in the service of the greater good because we'll manage risk so much better, and we'll increase the intelligence with which we collectively make decisions.” Yet if you look at what happened, risk was increased instead of decreased.



So what are we doing about it?

If you’re 28 years old, with two university degrees, and your parents have invested all their money in your education, and you’ve done everything that was expected of you: if society then tells you, ‘sorry, we don’t have a job for you’, then it’s easy to understand why people revolt. We have to give young people hope.  In Europe, the world’s richest continent, there has to be a place for young people, damn it!

With these words Martin Schulz President of the European Parliament, describes the heart of the problem.

How Germany beats the youth unemployment trap

The "dual" vocational training system used to be derided as limiting university degrees. Now it is being lauded in the U.S., and exported to struggling southern European countries. 

BERLIN - Over five and a half million young Europeans are without jobs. In the crisis countries in southern Europe, a generation is coming of age with few prospects: one in two Spaniards and Greeks under 25 are unemployed, and it's one in three in Italy and Portugal. To them, Germany must look like an island of the blessed: youth unemployment here is below 8 per cent.



In no other of the 27 EU member states is it this low. Only Austria is anywhere close (8.9 per cent).

How do they do it, their European neighbors ask – and even make pilgrimages to Germany to research the phenomenon. What they discover is dual vocational training system – going to school (theory) and working (practice) simultaneously rather than consecutively. For most Europeans, that’s new: learning and working, instead of learning then working.

The European Commission has praised the German model as a "guarantee against youth unemployment and shortage of skilled labor." Even U. S. President Barack Obama praised the German model in his 2013 State of the Union address: “Right now, countries like Germany focus on graduating their high school students with the equivalent of a technical degree from one of our community colleges, so that they're ready for a job.”



For a long time, other countries criticized Germany for this approach – in fact, the OECD regularly upbraided us for having too few university graduates. For many international education experts, a university education -- bachelor or master’s degree, doctorate -- is the measure of all things. German “Meister” (master) certification is seen as rather exotic.

Practical training is considered to be notches below academic training. Equating an apprenticeship diploma with a high school degree, considering master certification to be on a par with a bachelor’s degree, is inconceivable for many Europeans. But slowly, word is getting around that German industry’s ability to innovate -- and indeed its success as measured by the success of its products worldwide -- might have something to do with the sound training German workers receive.