Hostname: page-component-76fb5796d-skm99 Total loading time: 0 Render date: 2024-04-26T22:06:57.162Z Has data issue: false hasContentIssue false
  • English
  • Français

Ideas, Institutions and the Exhaustion of Modell Deutschland?

Published online by Cambridge University Press:  06 March 2019

Christopher S. Allen

Extract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

[Editors’ Note: This is the fourth consecutive article published in German Law Journal since July 2004 that is dedicated to the ongoing debate over the fate and prospects of the German model of Capitalism, welfare policy and corporate governance. The 22 July 2004 acquittals of all six defendants in the criminal proceedings against former Mannesmann CEO, Klaus Esser; Deutsche Bank's CEO (Vorstandssprecher) and then Member of Mannesmann's supervisory board, Josef Ackermann, and other members of Mannesmann's Supervisory Board have, once more, highlighted to German, European and International observers the particular features of law and politics in “Germany Inc.”, “Rhenish Capitalism”, or “Rhineland Capitalism”. As begun in the aftermath of Josef Ackermann's inthronization at the head of Deutsche Bank in May 2002 (exactly two years and two months before his acquittal before the Landgericht Düsseldorf) and Ackermann's subsequent transformation of the Board's control structure, German Law Journal has published several contributions to the ongoing changes in German corporate governance and its embeddedness within the specific German economic and legal system (see http://www.germanlawjournal.com/article.php?id=156). In the Journals July issue, Peter Kolla, a law student of Osgoode Hall Law School of York University in Toronto, meticulously traced the background debates to the closely observed criminal proceedings in the Mannesmann aftermath (http://www.germanlawjournal.com/article.php?id=460), and in our August issue, Jürgen Hoffmann, Professor of Sociology in Hamburg, surveyed the current interdisciplinary debate over the future fate of so-called Rhineland Capitalism and reconstructed Germany's recent history in an international context of globalization and privatisation (http://www.germanlawjournal.com/article.php?id=485). Also in the August issue, Max Rolshoven, writing his Ph.D. in law at the University of Münster, offered a first assessment of the acquittals in the Mannesmann case (http://www.germanlawjournal.com/article.php?id=480). In the article, published here, Professor Christopher Allen of the University of Georgia further deepens this inquiry from an economic point of view, while placing the contemporary debate over the possible end of Rhineland capitalism in the historical context of Germany's development in the 20th Century. The Editors of German Law Journal are very pleased and honored to be able to provide for a further forum for this important debate, bringing together lawyers, economists, political scientists and sociologists, for a much needed exploration of the historical and political origins as well as of the legal framework of Germany's much critizised and, at the same time, ardently praised system of corporate governance and industrial relations. We invite our readers to contribute to this debate, which has so far found too little resonance in Germany itself. The Editors.]

Type
Legal Culture
Information
German Law Journal , Volume 5 , Issue 9 , 01 September 2004 , pp. 1133 - 1154
Copyright
Copyright © 2004 by German Law Journal GbR 

References

1 Varieties of Capitalism (Peter A. Hall & David Soskice eds., 2001).Google Scholar

2 Christopher S. Allen, The Underdevelopment of Keynesianism in the Federal Republic of Germany, in The Political Power of Economic Ideas: Keynesianism Across Nations 263-289 (Peter A. Hall ed., 1989).Google Scholar

3 Wolfgang Streeck, German Capitalism: Does it Exist? Can it Survive?, in Political Economy of Modern Capitalism (Colin Crouch & Wolfgang Streeck ed., 1997).Google Scholar

4 For a compelling example of such change, see the analysis of the Mannesmann trial which seems to codify a departure from decades-long German corporate practice: Peter Kolla, The Mannesmann Trial and the Role of the Courts, 5 German L.J. No 7 (1 July 2004), at http://www.germanlawjournal.com/article.php?id=460; and Max Phillip Rolshoven, The Last Word? The July 22, 2004 Acquittals in the Mannesmann Trial, 5 German L.J. No. 8 (1 August 2004), at http://www.germanlawjournal.com/article.php?id=480.Google Scholar

5 Portions of the following section are based on: Kirsten S. Wever and Christopher S. Allen, Is Germany a Model for Managers?, in Harvard Business Review, September-October 1992, at 36; and Kirsten S. Wever and Christopher S. Allen, The Financial System and Corporate Governance in Germany: Institutions and the Diffusion of Innovations, 13 Journal of Public Policy, 2, 1993, at 183.Google Scholar

6 Mancur Olson, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities (1982).Google Scholar

7 Stephen Wilkes, The Practice and Theory of Industrial Adaptation in Britain and West Germany, 19 Government and Opposition, 4 1984, at 451.Google Scholar

8 Michael Piore and Charles Sabel, The Second Industrial Divide (1984).Google Scholar

9 Albert O. Hirschman, Exit, Voice, and Loyalty (1970).Google Scholar

10 Wilhelm Röpke, The Guiding Principles of the Liberal Programme, in Standard Texts on the Social Market Economy 188 (Horst Friedrich Wünche ed, 1982).Google Scholar

11 Kirsten S, Wever & Christopher S. Allen, The Financial System and Corporate Governance in Germany: Institutions and the Diffusion of Innovations, 13 Journal of Public Policy, 2, 1993, at 183.Google Scholar

12 Kathleen Thelen, A Union of Parts (1992).Google Scholar

13 The receipt of this early information made it possible for works councils to develop proactive strategies that attempted to shape organizational change before it occurred, rather than simply reacting to management change initiatives.Google Scholar

14 Turner Lowell, Fighting for Partnership: Labor and Politics in Unified Germany (1998).Google Scholar

15 Gerard Braunthal, The Federation of German Industry in Politics (1965).Google Scholar

16 Peter J. Katzenstein, Politics and Policy in West Germany: The Growth of a Semi-Sovereign State (1987).Google Scholar

17 Thomas O. Hueglin, Regionalism in Western Europe: Conceptual Problems of a New Political Perspective, 18 Comparative Politics, 4 July 1986, at 439.Google Scholar

18 Olsen (note 6).Google Scholar

19 Andrew Shonfield, Modern Capitalism (1965).Google Scholar

20 See: Herbert Oberbeck & Martin Baethge, Computers and Pin-stripes: German Financial Institutions between Dominant Market Control and Conservative Business Policy, in Industry and Political Change: Toward the Third West German Republic 275-303 (Peter J. Katzenstein ed., 1989); and Esser, Josef, Bank Power in West Germany Revisited, 13 West European Politics, 1990, at 17.Google Scholar

21 Richard Deeg, Finance Capital Unveiled: Banks and Economic Adjustment in Germany (1998).Google Scholar

22 For an excellent example of how the large banks are being pulled away from the German model, see: Peer Zumbansen, Germany Inc. Eroding? Board Structure, CEO and Rhenish Capitalism, 3 German L.J. No. 6 (1 June 2002), at http://www.germanlawjournal.com/article.php?id=156.Google Scholar

23 The contrast to the U.S. and British equities trading systems was particularly sharp. For instance, in 1987 shareholders’ equity as a percentage of total equity in manufacturing companies was 43% in the U.S., 46% in Britain and 27% in Germany. Source: O.E.C.D., National Accounts, Various Years.Google Scholar

24 For an excellent theoretical treatment of dynamic institutions, see: Sven Steinmo et al., Structuring Politics: Historical Institutionalism in Comparative Perspective (1992).Google Scholar

25 Peter Neckermann, What Went Wrong in Germany after the Unification?, 26 East European Quarterly, 4 1992, at 447.Google Scholar

26 Geoffrey K. Roberts, Right-wing Radicalism in the New Germany, 45 Parliamentary Affairs. 45 3, 1992, pp. 327–345.Google Scholar

27 Edgar Grande, Neoconservatism and Conservative-Liberal Economic Policy in West Germany, European Journal of Political Research. 15, 1987, pp. 281–296.Google Scholar

28 Henry C. Wallich, Mainsprings of the German Revival (1955); and Erhard, Ludwig, Deutsche Wirtschaftspolitik: der Weg der sozialen Marktwirtschaft (1962).Google Scholar

29 Neckerman (note 25).Google Scholar

30 Stephen J. Silvia, German Unification and Emerging Divisions within German Employers’ Associations, 29 Comparative Politics, 2 January 1997, at 194.Google Scholar

31 Horst Kern & Charles F. Sabel, Trade Unions and Decentralized Production: A Sketch of Strategic Problems in the West German Labor Movement, 19 Politics and Society, 4 December 1991, at 373.Google Scholar

32 For a recent overview of the variety of capitalism school of thought, see: The End of Diversity? Prospects for German and Japanese Capitalism (Kozo Yamamura & Wolfgang Streeck eds., 2003).Google Scholar

33 Negotiating the New Germany: Can Social Partnership Survive? (Lowell Turner ed., 1997).Google Scholar

34 William Lazonick, Business Organization and the Myth of the Market Economy (1991).Google Scholar

35 Silvia (note 30), 194.Google Scholar

36 Wade Jacoby, Imitation and Politics: Redesigning Germany (2000).Google Scholar

37 Richard Deeg, Institutional Transfer, Social Learning and Economic Policy in Eastern Germany, Unpublished ms“ 1994.Google Scholar

38 I would like to thank Peter Katzenstein for helpful suggestions that have helped refine the exposition of this concept.Google Scholar

39 Thelen (note 12).Google Scholar

40 David Soskice, The Institutional Infrastructure for International Competitiveness: A Comparative Analysis of the UK and Germany, in The Economics of the New Europe (A.B. Atkinson & R. Brunetta eds., 1991).Google Scholar

41 Wolfgang Streeck & Philippe C. Schmitter, From National Corporatism to Transnational Pluralism: Organized Interests in the Single European Market, 19 Politics and Society. 2, 1991, at 133.Google Scholar

42 Steinmo et al. (note 14).Google Scholar

43 For a cogent interpretation of both Liberal Market Economies (LME) and Coordinated (or organized) Market Economies (CME) and the institutional response to pressures of globalization, sometimes in hybrid forms, see Jürgen Hoffman, Co-ordinated Continental European Market Economies Under Pressure From Globalisation: Germany's “Rhineland capitalism,” 5 German L.J. No. 8 (1 August 2004), at http://www.germanlawjournal.com/article.php?id=485.Google Scholar