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German publishers warring with Google — and the link and the internet — have now completed their humiliation at their own hands, capitulating to Google and allowing it to continue quoting and linking to them. How big of them.

The pathetic sequence of their fight:

1. German publishers under the banner of a so-called trade group called VG Media and led by conservative publisher Axel Springer called in who knows what political chits to get legislators to create a new, ancillary copyright law — the Leistungsschutzrecht — to forbid Google et al from quoting even snippets to link to them.

2. In negotiations in the legislature, snippets were then allowed.

3. The publishers went after Google anyway, contending that Google should pay them 11 percent of revenue over the use of snippets.

4. Google, being sued over the use of the snippets, said it would take down the snippets from those publishers this week.

5. The publishers said that for Google to take down the snippets they were using to blackmail Google amounted to Google blackmailing the publishers. And you thought Germans were logical.

6. The publishers went to the government cartel office to complain that Google was using its market power against them.

7. Officials laughed the publishers out of the cartel office.

8. Now the publishers have said that Google can use its snippets for free while this legal matter is being ironed out.

Of course, the publishers never wanted the snippets taken down because they depend on those snippets and links for the audience Google sends to them … for free. It is all their cynical game to try to disadvantage their new and smarter competitor. Those who can, compete. Those who can’t, use their political clout.

Enough. Genug.

I have written a much longer essay about the damage these German publishers are doing to Germany’s standing that I am trying to place in a print publication — so I can speak to the print people. I’ll link to it when that happens. Here’s the lede:

I worry about Germany and technology. I fear that protectionism from institutions that have been threatened by the internet — mainly media giants and government — and the perception of a rising tide of technopanic in the culture will lead to bad law, unnecessary regulation, dangerous precedents, and a hostile environment that will make technologists, investors, and partners wary of investing and working in Germany.

LATER: Ah, there’s another chapter already.

9. Like Japanese soldiers stuck on an island thinking the war continues, Axel Springer has declared that Google must take down snippets from four of its brands: Die Welt, and the auto, sport, and computer subbrands of Bild. Note well that they didn’t do that with superbrand Bild, their largest newspaper and the largest in Germany. They need the eggs. So as it loses its argument that Google is a cartel, the German publishers’ cartel crumbles.

Germany, I fear, is not the land of innovation. It is a land of institutions.

This week the German Bundestag passed a law created by publishers — primarily Axel Springer and Burda — to force internet companies — read: Google — to pay for quoting — and thus promoting and linking to — their content. The legislation, the Leistungsschutzrecht, was known as the Google tax.

In the end, compromise legislation exempts precisely what the publishers had been going after: snippets of text of the sort that search engines quote. The bill now generously says that single words or very few words — it is not precise in its definition — remain free. But of course that exception only proves the absurdity of the effort: Who could ever own a word or a phrase? Or a thought?

So now, if the bill passes the next house of the legislature, lawyers will make a fortune debating how short is too long. No matter the length, speech suffers. Don’t the publishers see that they live by the quote? Their content is made up of what other people say. Their content gains influence when other people quote it.

But that is beside their point. They want to tax Google. They say it is not fair — imagine a kindergartener stomping his little feet — that Google makes money as they lose money. They think they deserve a share, though the truth is that their content makes up very little of what people search for. And, besides, every time Google links to them it is up to the publishers to establish a relationship with that user and find value in it. That publishers have failed to do this almost two decades into the web era is not Google’s fault; it is their fault. Rather than innovating and finding the necessary opportunity in their disruption, these publishers — conservatives who otherwise would diminish government — go running to the Chancellor and her party to pass their Leistungsschutzrecht.

To be fair, this is not purely a German disease. It is a European ailment as well. In France publishers hide behind government’s skirt to blackmail Google into paying into a fund to support innovation by publishers who’ve not innovated. The French government is also looking at taxing the gathering of big data — a tax, then, on knowledge. Belgian publishers rejected Google’s links and then thought better of it and finally extorted Google into advertising in their publications to avoid that nation’s version of a Leistungsschutzrecht. The internet causes a certain insanity the world around. In the U.S., we had SOPA and PIPA, laws like the Leistungsschutzrecht meant to protect ailing industries — though they were defeated. Then there is ACTA, an international attempt to protect the copyright industry.

But there are more issues in Germany. It is leading the privacy technopanic in Europe. Government leaders have urged citizens to have pictures taken from public places of public views of the facades of buildings blurred in Google Street View; they label this their Verpixelungsrecht. A privacy extremist in one state in Germany has tried to outlaw Facebook’s “like” button. That same state tried to overrule Facebook’s requirement to use real names.

And another: In entrepreneurial circles, Germany is known as the land of internet copycats. Again and again, German entrepreneurs have copied American services and business models, though their real business model is to get bought by the American originals.

Mind you, I love Germany (though to many Americans, that seems like an odd statement). There’s nowhere I’d rather visit. I have many friends there. I have met many talented technologists there. I marvel at its book culture and at its lively — if also suffering — market for serious journalism.

But today I worry about Germany. It is an industrial wonder in a postindustrial age. Government and media are embracing each other to defend their old institutions against disruption and the opportunity that can come with it. As I wrote in my book Public Parts, I’m concerned that Germans’ will to be private, not to fail, and especially not to fail publicly put them at a disadvantage in an entrepreneurial age when failure is a necessary product of experimentation. I fear that entrepreneurs, investors, and internet companies will shy away from Germany’s borders given the hostility that is shown especially to American internet companies.

I am disappointed that the land of Gutenberg, the land that invented the ability to share knowledge and ideas at a mass scale and to empower speech is now haggling over the control and ownership of a few words. As they say in German, schade. What a shame.

[This post has been translated into German and adapted as an op-ed at Zeit Online here.]

Related: I respond to Albert Wenger, a wise and German VC, regarding the #LSR here: http://disq.us/8cfp8h