Tagesarchiv: März 2, 2009

Capitalism formerly known as the German Model and its Re-Formation. Part 1

Re-Forming Capitalism

Re-Forming Capitalism

Thinking about Germany, what are the first people or things that come to your mind? Friedrich Schiller? Heinrich Heine? Oktoberfest? Abwrackprämie? Coordinated capitalism? Hm, Schiller’s spirit of freedom is unequalled, but Heinrich Heine chose to leave the country, and German capitalism is no longer what it used to be. In the distinction of the ‘Varieties of Capitalism’ introduced by Peter Hall and David Soskice (2001), the German model has been discussed as a paradigmatic example of a coordinated market economy in Europe, Japan as a paradigmatic example for a coordinated economy in Asia. ‘Varieties of Capitalism’ (Hall/Soskice) holds that liberal economies and coordinated economies both have their characteristic set of institutions playing together in such a manner that liberal economies offer ideal structural conditions for radical innovation within companies and their interorganizational networks, and coordinated market economies offer ideal structural conditions for incremental innovation.

Wolfgang Streeck in his new book “Re-Forming Capitalism” – a must read – offers a dynamic version of political economy and shows the German economy has undergone such tremendous change in the areas of wage structure and wage-setting, business organizations and trade unions, social policy, public finance and corporate governance in recent decades, that the term no longer applies. It must be rather discussed about the general political and institutional of capitalism than the idea of varieties of capitalism suggests. The keywords of structural change Streeck identifies are ‘flexibilization’ and ‘liberalization’ rather than ‘globalization’ that forces a shift in the relationship between market, state and civil society. (Streeck 2009: 25). In this and the next blog post, I’ll discuss the transformation of the German model based on Streecks‘ inspiring new book, some old material from my dissertation and a bit of illustrative material I found online. Weiterlesen