OBSERVERS of European politics hold these truths to be self-evident. Social democracy is in inexorable decline. Angela Merkel is immune to defeat. Globalisation is in tension with mainstream politics. The rise of populism is a cultural phenomenon more than it is an economic one.

It was not the most prominent election today—that trophy goes to Austria—but the election in Lower Saxony, the northwestern corner of Germany with a population of 8m, defied every one of them.

When the election was called in August the script seemed already-written. The vote had been triggered by the defection of a Green MP to Mrs Merkel’s CDU, bringing down the Social Democratic (SPD)-Green government. Initially it seemed the chancellor’s party would easily win control of the state, the Social Democrats (SPD) would slump and the populist Alternative for Germany (AfD) would surge. There was also the emissions-fixing scandal of Volkswagen, Lower Saxony’s largest employer and a major player in its politics. The conditions, in other words, were ripe for an upset.

But the state defied expectations. According to the latest projections the CDU dropped 2.4 points. That is a blow for Mrs Merkel at a sensitive time (negotiations for a “Jamaica” coalition combining her CDU with the free-market FDP and the Greens begin on Wednesday). After a run of election defeats the beleaguered SPD gained 4.4 points in Lower Saxony, strengthening Martin Schulz, the party’s leader and unsuccessful chancellor candidate (pictured). Meanwhile the AfD obtained just 6.2%, enough to enter the state parliament but far below target. In a leaked text message Alice Weidel, one of the AfD’s two lead candidates in September’s federal election, described the mediocre result as a “catastrophe” for the party.

What happened? How did Lower Saxony buck the trend? How did that “catastrophe” for the far-right arise? For one thing, the SPD-Green government has stood firmly by VW workers throughout the company’s crisis, insisting that they should not pay the price for transgressions by bosses. That has bought it credibility. But deeper, structural factors are probably more important. I consulted Alexander Clarkson of Kings College London, an expert on Germany who grew up in the state, about the result there.

He pointed to several factors. “Lower Saxony is a Bundesland where the 1950s social contract between capital, labour and farmers still works”, he noted: “It’s a industrial and agrarian world of work that has remained stable and enables young and old to plan long-term.”

To visit Wolfsburg, in Lower Saxony, is to see his point. VW’s company town is a social democratic utopia: kilometres of red-brick factory stretching along the beautifully landscaped banks of the River Aller, mingling with chrome-and-steel shopping arcades, lakes and modern apartment blocks.

But what about the rest of the state? Mr Clarkson points out that the same ethos marks other sectors in Lower Saxony: “industrial farming, steel, machine tools, insurance, services, the full whack”. “Most importantly”, he adds: “the trade unions still have enormous power in patronage… not just in the cities but even in the middle towns.”

In fact, the closer you look, the more compelling the “Lower Saxony model” becomes. Stretching from the Netherlands to Hamburg, from Westphalia to Mecklenburg, this state was the political homeland of Gerhard Schröder, who ran it from 1990 to 1998. During that time he steered it out of economic crisis by bringing its firms and unions together to cut deals and get demand flowing again. As chancellor he applied this pragmatic approach, balancing unions and management, to the ailing German economy. The resulting Hartz IV reforms (devised by the former HR boss of—guess it—Volkswagen) are one of the main foundations of Germany’s current economic boom. They have made labour newly competitive and have kept productivity high.

To be sure: many populist complaints are about more than money. They concern immigration and what is often euphemistically referred to as “culture”. But here too Lower Saxony has been sensible. “Immigrants from the guest-worker and 1990s waves are fully integrated in the trade union and business association power structures of the region,” points out Mr Clarkson: “They’re not outsiders.”

Obviously, Lower Saxony is far from perfect. And one cannot just conjure up a well-paying automotive giant like Volkswagen. But the state’s embrace of sensible, pro-business social democracy and relative indifference towards populism shows how contingent some of the truths of our age are. Across the continent, politicians, commentators and academics are scratching their heads and trying to devise clever answers to populism. Lower Saxony, where the AfD has performed worse than in any other large German state, suggests three simple ones: make the economy productive, give workers security and a voice, integrate immigrants. These are not a panacea. But they are something.