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German capitalism: Does it exist? Can it survive?

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  • Streeck, Wolfgang

Abstract

Drawing on extensive comparison with the United States, Japan and Britain, the paper describes the "German model" of advanced capitalism as an institutionalized high-wage economy combining high competitiveness in world markets with strong social cohesion and, in particular, low levels of inequality along a variety of dimensions. This combination is explained by a unique set of socio-economic institutions, in particular socially instituted and circumscribed markets, negotiated firms commanding long-term attachment of both labor and capital, a facilitating state relying mainly on indirect means of intervention, widespread associational self-governance by organized groups in civil society, and institutionalized cultural patterns that promote long-term commitments and continuity. These institutions are shown to call forth and support a particular pattern of production, sometimes referred to as diversified quality production, that has in the 1970s and 1980s made possible both high wages and a low dispersion of wages and incomes. In its second part, the paper proceeds to analyze in detail the performance problems of an institutionalized high-wage economy of the German kind, and specifies a set of conditions that must be met for such an economy to remain simultaneously competitive and socially cohesive. The present crisis of the German "social market economy" is discussed in terms of a coincidence of three factors: a possible secular exhaustion of the model as such, the shock of unification, and the constraints imposed by growing globalization of the capitalist economy on national economic governance.

Suggested Citation

  • Streeck, Wolfgang, 1995. "German capitalism: Does it exist? Can it survive?," MPIfG Discussion Paper 95/5, Max Planck Institute for the Study of Societies.
  • Handle: RePEc:zbw:mpifgd:p0034
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    Cited by:

    1. Kalinowski, Thomas, 2011. "Regulating international finance and the evolving imbalance of capitalisms since the 1970s," MPIfG Discussion Paper 11/10, Max Planck Institute for the Study of Societies.
    2. Dörrenbächer, Christoph, 2002. "National business systems and the international transfer of industrial models in multinational corporations: Some remarks on heterogeneity," Discussion Papers, Research Unit: Organization and Employment FS I 02-102, WZB Berlin Social Science Center.
    3. Höpner, Martin, 2019. "The German undervaluation regime under Bretton Woods: How Germany became the nightmare of the world economy," MPIfG Discussion Paper 19/1, Max Planck Institute for the Study of Societies.
    4. Lücke, Matthias, 1997. "European trade with lower-income countries and the relative wages of the unskilled: an exploratory analysis for West Germany and the UK," Kiel Working Papers 819, Kiel Institute for the World Economy (IfW Kiel).
    5. Michael Whittall & Stefan Lücking & Rainer Trinczek, 2008. "Understanding the European Works Council deficit in German multinationals," Transfer: European Review of Labour and Research, , vol. 14(3), pages 453-467, August.
    6. Christoph Dörrenbächer & Michael Fichter & László Neumann & András Tóth & Michael Wortmann, 2000. "Transformation and foreign direct investment: Observations on path dependency, hybridisation, and model transfer at the enterprise level," Transfer: European Review of Labour and Research, , vol. 6(3), pages 434-449, August.
    7. Bruce Kogut & Gordon Walker, 2003. "Restructuring or Disintegration of the German Corporate Network: Globalization as a Fifth Column," William Davidson Institute Working Papers Series 2003-591, William Davidson Institute at the University of Michigan.
    8. Joachim Möller, 2015. "Did the German Model Survive the Labor Market Reforms? [Hat das Modell Deutschland die Arbeitsmarktreformen überlebt?]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 48(2), pages 151-168, August.
    9. Agnès Labrousse & Sandrine Michel, 2017. "Accumulation regimes," Post-Print hal-01719977, HAL.
    10. Robert Boyer, 2005. "What future for codetermination and corporate governance in Germany?," PSE Working Papers halshs-00590710, HAL.
    11. Lücke, Matthias, 1996. "Die Auswirkungen des Handels mit Mittel- und Osteuropa auf den deutschen Arbeitsmarkt," Open Access Publications from Kiel Institute for the World Economy 1676, Kiel Institute for the World Economy (IfW Kiel).
    12. Baethge, Martin & Baethge-Kinsky, Volker, 1998. "Jenseits von Beruf und Beruflichkeit? : neue Formen von Arbeitsorganisation und Beschäftigung und ihre Bedeutung für eine zentrale Kategorie gesellschaftlicher Integration (Beyond occupation and profe," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(3), pages 461-472.
    13. Wagner, Karin, 1998. "The German apprenticeship system after unification," Discussion Papers, Research Unit: Economic Change and Employment FS I 98-301, WZB Berlin Social Science Center.
    14. Baethge, Martin & Baethge-Kinsky, Volker, 1998. "Jenseits von Beruf und Beruflichkeit? : neue Formen von Arbeitsorganisation und Beschäftigung und ihre Bedeutung für eine zentrale Kategorie gesellschaftlicher Integration (Beyond occupation and profe," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(3), pages 461-472.

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