While Britons and Americans are gloomy about deficits and possible recession, for Germans it is as if 2008 never happened.

Germany has just reported the highest export figures since records began. While there are worries about the euro, this is only because other eurozone members are so weak. Germans predict a “golden decade” ahead for their own country.

That may be hyperbole, but there is no denying that Germany is now in a relatively strong position. There is no mystery to that success. Successful nations, businesses, and entrepreneurs all follow a very simple formula: provide others with the goods and services they want, but keep a firm grip on the finances.

The firm grip on the finances has been the Merkel government’s great contribution. Even left-leaning German ministers were scornful of the British – and, by implication, American – government attempts to borrow their way out of the 2008 crisis. The results of the differing approaches are plain to see: Germany came out of the crisis quicker and stronger.

As for providing the goods and services people want, the German way has always been to compete on the basis of quality rather than price. If you want something done cheaply, go to China; if you want it done to perfection, go to Germany.

This gives the lie to the accusation that business favours globalisation because it relies on “cheap labour”. German labour costs are high, but the business community – unlike its critics – has always understood that quality has a price, and has never objected to paying that price so long as it gets value for money. It objects to high labour costs only when there are no viable products or services in return for its investment.

Germany’s high labour costs are – usually – justified by the high quality of both the labour and its end product. This quality in turn owes much to the superiority of the German secondary, tertiary, and technical education systems. When American and British entrepreneurs are asked why they no longer locate their factories in their home countries, they usually cite the high labour costs – but they are just as likely to mention how the state schools there are not providing them with workers fit for employment. Indeed, many of them would rather employ a German who has been taught excellent English than a native English-speaker. Germany has itself become a successful brand name again.

There are people – and a disproportionate number are found in academia and the media – who were secretly devastated when the Berlin Wall fell and free markets were seen as triumphant. These people could barely disguise their glee at the 2008 bank crash: they dusted off their old predictions of the inevitable end of capitalism and spread over the airwaves like a rash.

They have been proved wrong – again. The global economy did not collapse and is now recovering, albeit slowly. The recovery is strongest where free market policies are being followed; the remaining basket cases, like Greece, are the countries where state regulation continues to restrict growth.

This has been reflected in the way elections since 2008 all over the world have tended to favour parties that are seen as more committed to free markets policies than their rivals. The strength of democracy lies in the fact that “ordinary” voters often have a reserve of common sense that is lacking in self-styled “experts”.

The strength of the free market system is clear not only in the resilience of existing capitalist economies but in the way capitalism is making progress even in countries with anti-capitalist ideology at the very time it was supposed to be in meltdown.

Most nominally anti-capitalist states adopted free-market reforms long ago, like China and Vietnam. Only two unreconstructed Marxist economies remain, largely cut off from the rest of the world: North Korea and Cuba.

Those two may soon be reduced to one. Cuba’s regime is granting a quarter of a million of its subjects licences to set up their own businesses.  The idea that a citizen even needs a licence to exercise economic freedom is itself obnoxious – and the Cuban government is acting less out of kindness than desperation, since the Cuban state has just been forced to confront reality to the extent of laying off a million public sector workers.

Nevertheless it is still a move in the right direction – and it could be towards something spectacular. Before the Castro regime came to power, Cuba was “America’s Playground”. A corrupt and incompetent government deprived the Cuban people of the benefits of that huge source of income – which was why Castro was able to seize power – but it demonstrates how Cuba has a huge economic potential that has been left untapped for more than half a century. That potential could be unlocked if strong, honest government could be combined with real free market reforms. If that in turn encouraged entrepreneurial Cuban exiles to return, Cuba’s future could be very bright indeed.