Session 5: Reforming Capital-Labor Relations in Germany

I. The Post-WWII German Political Economy

A. Conservative Monetary Policy

1) Ludwig Erhard (graphic)

2) The Independence of the Bundesbank (graphic)

3) Contractionary Fiscal Policy

B. The Social Market Economy (Sozialmarktwirtschaft) (graphic)

C. The Policymaking System (graphic)

D. The Political Party System (graphic)

II. German Industrial Relations

A. Origins of the Dual System

1) Definition and Central Purposes (graphic)

2) Chronology (graphic)

B. Functions of the Dual System

1) Two Integrated Systems

2) Major Characteristics (graphic) (graphic)

Handouts:

Simulation #1: German Industrial Relations

Key Concepts: independence of the Bundesbank, the responsibilities of the Länder, high reserve requirements, contractionary fiscal policy, Sozialmarktwirtschaft, framework regulation, the Basic Law, overlapping federalism, mixed-member districts, the constructive vote of no confidence, the dual system, Allied Law No. 22, parity and non-parity codetermination (Mitbestimmung), Montanmitbestimmung, the German miracle (Wirtschaftswunderland), Works Constitution Act (1952), the Grand Coalition and Concerted Action (Konzertierte Aktion), revised Works Constitution Act (1972), Codetermination Act (1976), voluntary unionism vs. codetermination, wage drift, plant/factory egoism, non-wage gains.

Key Individuals: Ludwig Erhard, Konrad Adenaur, Wolfgang Streeck, Kathleen Thelen.

Study Questions:

(May 5, Wednesday)

What are the main institutions of the German post-war political economy? How have they been challenged by globalization and reunification?

Compare the concessions that labor and business have been required to make by the industrial relations system in Germany during the post-war period. Be sure to be able to list these concessions and explain how they evolved during the 1950s-1980s.

(May 7, Friday)

Compare Streeck's and Turner's perspectives of the challenges facing the German industrial relations system. To what extent does Turner convince you that German labor unions have been able to overcome all (or perhaps just some) of the "cleavages" that Streeck outlines?

Floating Comprehensive Exam Questions: Answer One (Due May 17, Monday)

(A) Lowell Turner argues that the resilience of the German industrial relations system of “social partnership” “suggests that a ‘softer’ (and less centralized) version of social democracy may be more compatible than a ‘harder’ version with contemporary globalization and dynamic market change.” Assess Turner’s evidence in light of your own knowledge about the democratic corporatist cases. Be sure to select at least one other case (e.g., Sweden, the Netherlands, Austria). Is German labor’s experience in the post-unification period substantially more “successful” than that of other European cases? Does the comparative evidence justify Turner’s position?

(B) Lowell Turner concludes in Fighting For Partnership: “Institutions are important, but they can be changed - as a result of both external and internal pressure.” How does his study of German labor illustrate this principle? Evaluate to what extent German labor has been able to change institutions in ways that improve workers’ political influence. Is Germany a case of industrial relations reform "success"? Be sure to compare the German case to at least one other case (e.g., Sweden, the Netherlands, Austria).

Note: If you choose not to answer one of these questions, you will have one more set of exam questions to satisfy the two question requirement. Difficulty level increases with each set.