A Royal Conversation

A royal conversation

Intimate discussion at the Bavarian Court Roland Berger, Stefan Schmortte, Ingo Wilhelm, and Prince Luitpold (from left to right)

Prince Luitpold, you’re the entrepreneur in the House of Wittelsbach …

Prinz Luitpold: ... Only a very small entrepreneur...

… but even so, you’re the head of the Nymphenburg Porcelain Manufactory and owner of the Kaltenberg Castle Brewery. What do you think? Does everyone in Germany have equal opportunities today?

Prinz Luitpold: Among lawyers, the principle of equality is described as follows: Everyone is equally unequal. In other words, everyone has great opportunities, perhaps even more than ever before, but not everyone has the same talents.

Roland Berger: And, unfortunately, they don’t all have the same opportunities. Every OECD and Pisa study tells us that there is no country in the world in which children’s futures are so influenced by their social background as here in Germany. This is why my foundation supports talented and motivated children who are disadvantaged by their home situation. These children can really suffer. It’s fantastic if a child does well despite these complications. When you provide these kids with the proper support, they feel like they’re being taken seriously for the very first time. We currently have around 700 scholarship holders in Germany. Three hundred have already passed their high school diplomas, with an excellent average grade of 1.6. I think the German average last year was 2.6.

Prince Luitpold, you’ve basically been treated with respect since the day you were born. So, let me ask you the opposite question. Have you sometimes found your social background to be a burden?

Prinz Luitpold: Many, many times. During the student riots, if you had a name like mine and ran into a communist teacher, one of those guys with a green sweater and a red scarf, the Royal Highness thing wasn’t so great any more. Or at the East German border, the border guard would look at my passport and say: Pull over to the side. I always had to pull over and wait for hours on end. You just have to live with that, and I’m not complaining. A name like mine can work both ways: you get both respect and contempt.

Roland Berger: I experienced that, too, later on, when my name was better known. Some people think you’re a monster.

Prinz Luitpold: In my family, we were told: Always treat people politely and decently, and never be arrogant. We never had the feeling that we were something special. We believe our role is to serve the people, not the other way around.

The principle of noblesse oblige. Is that just an empty phrase these days?

Prinz Luitpold: No, it’s more than just an empty phrase. And I also believe that true nobility differs from adopted nobility. From people who conduct themselves badly. Nobility defines a tradition, a commitment as it were, and also a strong emotional bond with a country or region. The main thing is to have a certain amount of humility.

It’s not just nobility that brings certain obligations, but also entrepreneurship. In what way?

Roland Berger: It is the job of an entrepreneur to offer good products or services on the best possible terms and to run a profitable company. Entrepreneurs generate wealth for society by creating jobs. They have to ensure their investors are adequately remunerated, otherwise they won’t find any more. They also have to abide by our value system: they must always act with decency and integrity, and be loyal to their employees, business partners, and stakeholders.

This image has been tarnished over recent years thanks to the financial crisis, the diesel scandal, and so on. What’s going on at the top of the pile?

Prinz Luitpold: These scandals are deplorable, but they are not representative of our economy as a whole. By establishing a social market economy in Germany, we have laid down the marker for the world, and there is still no English translation. It is a uniquely German achievement. Responsibility for other people is implicit in the idea of a social market economy. It is a key element of German business, and particularly our family businesses.

They account for 75 percent of the jobs in our country and don’t tend to think in terms of shareholder value and short-term profit. If this kind of company gets into trouble and asks the bank for a loan, the company CEO puts his own house up as security. It would be a shame if these small and medium-sized enterprises were to fall into the hands of hedge fund managers because of some ill-thought-out inheritance tax on company assets. Different rules would then come into play very quickly, to the detriment of all employees.

Roland Berger: The whole diesel affair was really stupid, no two ways about it. The idea that you could get away with defrauding the American state was just idiotic. And let’s not forget that the diesel scandal was caused by a company that is more than 20 percent owned by the state of Lower Saxony. I’m not trying to apportion blame, but the greatest threat to integrity and risk of descent into corruption always seems to come from organizations that operate on the borderline between state benefaction and private efficiency.