The impact of market manipulation on social capital in Germany

Resumen

The accumulated capital of all charitable foundations existing in a country is the financial social capital of this nation. In Germany, the stock of charitable foundations which supports e. g. poor, disabled, ill, the elderly and helpless people have grown to around 100,000 until the beginning of the 20th century. The currency reform in 1923 devaluated most of the social capital. More than 90 % of the charitable foundations were destroyed, caused by an intervention spiral of the state and the central bank. Since 2008 the state and the central bank (ECB) have been fighting the consequences of the financial and sovereign debt crisis with interventions. This again has an impact on social capital in Germany. In order to analyze the already noticeable effects of these interventions on the foundation capital a large-scale survey among foundations in Germany was implemented. The PhD thesis describes the economic impact of the interventions that have affected the foundations since then, but also the legal and tax consequences. Since foundations are also market participants, the interventions have also changed the market environment for foundations. The focus is on concentration processes and changes in the competitive situation as well as the emergence of new business areas. The interventions have also changed the composition of the foundation's capital and income so that the performance of the foundations is significantly affected. Since the income of the foundations in Germany has already fallen so sharply in the 11 years analyzed that the distributions had to be reduced by 1/3 for purposes of the statutes, this also has an impact on society. The analysis shows a decline in the quality of education and an increase in the share of German population living below the poverty line, to name just a few of the fields of activity of charitable foundations in Germany. Social and political impacts also come into focus. The parallels between the intervention spiral in the previous century and the current one can be clearly seen from individual developments and results.