A portion of this essay appeared in A. Markovits, ed., The Political Economy of West Germany (Praeger, 1982). I thank Praeger for permission to use it here.

1. Although this school of analysis reaches at least as far back as Thorstein Veblen's work on Imperial Germany, probably the two most influential works to appear in English stressing Germany's divergence have been Krieger, LeonardThe German Idea of Freedom (Boston, 1957)Google Scholar and Dahrendorf, RalfSociety and Democracy in Germany (Garden City, N.Y., 1967).Google Scholar The “Bielefeld school,” which has represented and furthered this position, is now on the defensive; see, for example, the work of Geoff Eley and especially Eley, Geoff and Blackbourn, DavidThe Peculiarities of German History (New York, 1984).Google Scholar

2. “Corporatism” has become a diversified growth industry in the social sciences. For asampling of the literature, especially as it pertains to West Germany and its utility for other countries, see Aleman, Ulrich V. ed., Neokorporatismus (Frankfurt, 1981)Google Scholar; Prokla 38 (1980)Google Scholar; Schmitter, Phillipe and Lehmbruch, Gerhard eds., Trends toward Corporatist Intermediation (London, 1979)Google Scholar; Panitch, Leo“The Development of Corporatism in Liberal Democracies”, Comparative Political Studies 10 (1977):61–90.CrossRefGoogle Scholar For Weimar Germany in particular, see Maier, CharlesRecasting Bourgeois Europe (Princeton, N.J., 1975)Google Scholar and Zunkel, FreidrichIndustrie und Staatssozialismus (Düsseldorf, 1974).Google Scholar

3. See for example, the essays in Mommsen, Hans ed., Sozialdemokratie zwischen Klassenbewegung und Volkspartei (Frankfurt, 1974).Google Scholar

4. For an updated version of these debates, see Wright, Eric O.Class, Crisis and the State (London, 1978), 30–110Google Scholar, and Poulantzas, NicosClasses in Contemporary Capitalism (London, 1975), 191–336.Google Scholar

5. It might well be argued, and indeed it was, that workers were the only group in Germany better off in 1928 or 1930 than in 1913. The Labor portfolio through 1928 was in the hands of a representative of the labor wing of the Center party, Heinrich Brauns, and then to mid-1930 in those of a Socialist, Rudolf Wissell. Between 1926 and 1932 industrial and manufacturing capital's annual share of the national income fell from 20.4 to 12.4 percent while labor's rose from 57.3 to 60.6 percent (other scholars, R. J. Overy, for example, calculate this last figure as high as 64 percent!). The employment-unemployment insurance law of 1927 (AVAVG) covered 16.5 million workers, including the 12.5 million covered by collective wage agreements. One-third of these agreements, covering about 8 million workers, were reached by state-supervised compulsory binding arbitration (obviously both a strength and a weakness). Whereas in 1920 there were 11 thousand collective agreements covering 272 thousand production units and about 6 million workers, by 1930 the number of agreements had been reduced to 9 thousand (an advantage for labor), and they covered well over 1 million production units employing nearly 12 million workers—in other words, 4.5 times as many units (in a period of industrial concentration) and nearly 3 times as many workers. Between 1924 and 1929 the average work week was reduced by two hours (from 50.4 to 48.6), though obviously the 40-hour week remained a principle rather than becoming a reality. From the end of the inflation to 1930, the cost of living rose only 15 percent while nominal wages increased by 60 percent, as did real hourly earnings. The latter rose until 1931, and the price to wage ratio moved in labor's favor until 1932. Between 1925 and 1929 employer contributions to health and social insurance increased 60 percent, and state spending rose 25 percent between 1925 and 1928 alone. Amongst all these gains there were two very critical weaknesses, one well-known and obvious even at the time—high unemployment and stagnation in the size of the labor force-and the other less obvious but, in the long-run perhaps even more disabling-the systematic demobilization, economic and political, of labor's own rank and file! On the basic outlines and consequences of German labor's policies from 1925–33, seeAbraham, DavidThe Collapse of the Weimar Republic: Political Economy and Cris (Princeton, N.J., 1981)Google Scholar, especially chapter 5, and Sturmthal, AdolfThe Tragedy of European Labor (New York, 1943)Google Scholar,

6. The literature for each of these countries has become quite substantial. For a current overview, see the various numbers of the journal Economic and Industrial Democracy. On Scandinavia, see Esping-Anderson, Gösta“From the Welfare State to Democratic Socialism”, Political Power and Social Theory 2 (1981): 11–40Google Scholar, and Meidner, RudolfEmployee Investment Funds (London, 1978)Google Scholar; on German-speaking Europe, see the essays in Albers, Detlev, ed., Otto Bauer und der ‘dritte’ Weg (Frankfurt, 1978)Google Scholar and Weinzen, Hans-WilliWirtschaftsdemokratie Heute? (Berlin, 1980)Google Scholar; on Mediterranean Europe, see Napolitano, GeorgioThe Italian Road to Socialism (West-port, Conn., 1978)Google Scholar and, somewhat indirectly, Poulantzas, Nicos, State, Power, Socialism (London, 1978)Google Scholar; on the United States, see Carnoy, MartinShearer, DerekEconomic Democracy (White Plains, N.Y., 1980).Google Scholar

7. The now-classic discussion of the fiscal crisis mechanism is O'Connor, JamesThe Fiscal Crisis of the State (New York, 1973)CrossRefGoogle Scholar; see also Przeworski, Adam“Material Bases of Consent”, Political Power and Social Theory 28 (1980): 21–66.Google Scholar For a detailed analysis of how German capitalists withdrew from tacit cooperation with labor after 1929 and how the end of that cooperation reverberated through the political system, see Abraham, Collapse, 261-91. On the asymmetries involved in these kinds of compacts and this kind of participation, see Offe, Claus and Wiesenthal, Helmut, “Two Logics of Collective Action: On Social Class and Organizational Form”, Political Power and Social Theory 28 (1980):67–115.Google Scholar

8. These are matters that cannot be accorded due attention here; for a fuller discussion, see Abraham, Collapse, 229-61 and the figures reported by Bry, GerhardWages in Germany, 1871–1945 (Princeton, N.J., 1960), 32, 75, 331, 362, 398–400, 473.Google Scholar Suffice it here to note that after 1924, real wages, real earning, social expenditures, and labor's share of the national income all continued to rise through 1931, all to the displeasure of most of Germany's entrepreneurs and some of her neighbors. As late as 1931, Fritz Tarnow could caution his fellow ADGB leaders that, especially as seen from abroad, the standard of living of German workers was rather respectable and, beyond that, they had the best Sozialpolitik.

9. On the problem of the Mittelstand in Weimar Germany, see the work of Winkler, H. A., e.g., “From Social Protectionism to National Socialism”, Journal of Modern History 48 (1976): 1–18CrossRefGoogle Scholar, and Winkler, H. A.Mittelstand, Demokratie und Nationalsozialismus (Cologne, 1972).Google Scholar Electoral figures for the Weimar years, especially after 1924, pointedly indicate how weak the drawing power of the various bourgeois-popular parties was: Excluding the Catholic Center Party and the conservative, largely rural German Nationals, these parties fell from a total of 16 percent of the vote in 1924 to a mere 3 percent in 1932. By contrast, the SPD and Communists (KPD) together regularly obtained from 34 percent to 42 percent of the vote. Obviously there was yet nothing like popular “Christian Democracy” during the interwar period.

10. Habermas, JürgenLegitimation Crisis (Boston, 1975), 57.Google Scholar The more detailed analysis is provided by Offe, ClausStrukturprobleme des kapitalistischen Staates (Frankfurt, 1972).Google Scholar

11. Perhaps the most telling example of this tension within the SPD emerged in the conflict between Labor Minister Rudolf Wissell who, from 1928–30, used the means and institutions at his disposal (especially binding arbitration) to support worker demands, while Finance Minister Rudolf Hilferding, who had always been associated with the left wing of the party, begged and borrowed internationally to keep the exchequer afloat while urging complete self-restraint on Wissell and the rank and file. Finally, its bourgeois partners abandoned the SPD, and the unemployment insurance fund went bankrupt; for details, see Timm, HelgaDie Deutsche Sozialpolitik und der Bruch der Grossen Koalition in März 1930 (Düsseldorf, 1952).Google Scholar On the SPD's dilemma, see Sturmthal, 34, and Laclau, ErnestoPolitics and Ideology in Marxist Theory (London, 1977), 124–42.Google Scholar

12. On the details of the WTB program and the party and trade union responses to it, see Schneider, Michael, Das Arbeitsbeschaffungsprogramm des ADGB (Bonn-Bad Godesberg, 1975)Google Scholar. On changes in the economic thinking of German capitalists and their relationship to various emergency Keynesian programs, see Abraham, Collapse, 173–79, 274.

13. This term was initially applied to Austro-Marxism, especially that of the interwar period, but it emerged in the analyses and proposals put forward in most of the literature, including that cited in note 6 above. See also Novy, KlausStrategien der Sozialisierung: Die Diskussion der Wirtschaftsreform in der Weimarer Republik (Frankfurt, 1978), 35–63Google Scholar

14. On Hilferding's view of the content and possibilities of pluralist democracy, seeGottschalch, WilfriedStrukturveränderungen der Gesellschaft und politisches Handeln in der Lehre von Rudolf Hilferding (Berlin, 1962)189–218, 242–61Google Scholar Hilferding repeated this theme in nearly everything he wrote during the 1920s, particularly in Die Gesellschaft, which he edited.

15. The ADGB program for economic democracy was published under the lead authorship of Naphtali, FritzWirtschaftsdemokratie: Ihr Wesen, Weg und Ziel (Berlin, 1928).Google Scholar Naphtali was a lawyer-economist and, like those who assisted him in drafting the program, a full-time trade union intellectual. Naphtali also headed the Social Democratic Economic Research Unit. Unfortunately, all of the unit's archives were destroyed, some in anticipation of seizure by the Nazis and others in various fires. In one of those numerous ironies of realization/transformation characteristic of the period, Naphtali wisely fled to Palestine after 1933, where he became head of the Workers' Bank in Haifa, a member of the left (but anti-Soviet) wing of the Labor Party and Trade Union Federation, and later an Israeli Minister of Economics. Yehuda Riemer's biography is forthcoming.

16. For a representative, though far from complete, sampling of the debates that led to Naphtali's definitive program, see Protokoll des Kongresses des ADGB in Breslau 1925 (Berlin 1926), 186–265Google Scholar; Leipart, TheodorAuf dem Wege zur Wirtschaftsdemokratie (Berlin, 1928), 3–19Google Scholar; virtually every issue of Die Gesellschaft and Die Arbeit during these years; the Protokoll des Kongresses des ADGB in Hamburg 1928 (Berlin, 1929), 170–224Google Scholar; the Jahrbuch des ADGB 1928 (Berlin, 1929), 54–58Google Scholar; and the very useful volume by Schwarz, SalomanHandbuch der Gewerkschaftskongresse (Berlin, 1930), 120–32, 183–96, 406–32.Google Scholar For more recent views, see Kuda, Rudolf “Das Konzept der Wirtschaftsdemokratie”, in Vom Sozialistengesetz zur Mitbestimmung, ed. Vetter, H. O., (Cologne, 1975), 253–74Google Scholar, where all this is unproblematic, and Ulrich, Hans“Die Einschätzung von kapitalistischer Entwicklung und Rolle des Staates durch den ADGB”, Prokla 6 (1973): l–70Google Scholar, where it, along with Hilferding's concept of organized capitalism, is only problematic. On how economic democracy was perceived by German entrepreneurs, see Winkler, H. A., “Unternehmer und Wirtschaftsdemokratie,” Politische Vierteljahrsschrift 11, Sonderheft 2/1970 (1971):308–22.Google Scholar See also Mommsen, Hans, Klassenkampf oder Mitbestimmung (Cologne, 1978), 26–28.Google Scholar

17. For some of the most interesting attempts during Weimar, see NovyStrategien der Sozialisierung, 221–66, and the Protocols of the 1928 ADGB Congress. By the mid-1920s already, Vienna had become something of an exemplar of this, particularly at the level of neighborhood organization, cooperative housing, and youth and sports organizations. See Rabinbach, AnsonThe Crisis of Austrian Socialism: From Red Vienna to Civil War, 1927–34 (Chicago, 1983), 60 ff.Google Scholar, and Tafuri, ManfredoVienna Rosa: La Politica Residentilla nella Vienna Socialistica (Milan, 1980).Google Scholar

18. The tasks were summarized under the heading “Current Demands for the Democratization of the Economy on the Way to Socialism” (Die Gegenwartsforderungen zur Demokratisierung der Wirtschaft auf dem Wege zum Sozialismus), Naphtali, Wirtschaftsdemokratie, 175–82.Google Scholar

19. In this regard there is a good bit of corporatism in the economic democracy strategy, even if of a different sort from that involved in the growth strategy. See Panitch, Leo“Trade Unions and the Capitalist State”, New Left Review 125 (01 1981):21–46.Google Scholar

20. Adler, MaxPolitische oder Soziale Demokratie (Berlin, 1926)Google Scholar seems to have provided some of the inspiration for this perspective.

21. The dangers of “buying into” such measures was already noted at the time by both foreign observers and Germans. See Brady, RobertThe Rationalization Movement in Germany (Berkeley, 1933)Google Scholar for an extremely keen appreciation of how these measures were made to rebound to the benefit of capitalists; and, for a more agnostic view, see Schalldach, ElisabethRationalisier-ungsmassnahmen der Nachinflationszeit im Urteil der freien Gewerkschaften (Jena, 1930) 94, 164ff.Google Scholar By and large, the European left in the 1920s, including Lenin, Gramsci, Bauer, and nearly all social democrats, displayed a near-reverence for technological advance, factory reorganization, efficiency, etc. Today we have come full circle with most of the left in Western Europe and North America championing “small is beautiful,” artisanal craftsmanship, and the William Morris mentality, though rank-and-file unionists seem less vulnerable than intellectuals.

22. The mechanism of compulsory binding arbitration by the Labor Ministry, which had consistently worked to labor';s advantage, under the pressure of a deteriorating economy suddenly turned against labor in 1930; see Abraham, , Collapse, 240–46, 255–57.Google Scholar This larger dilemma may also explain why the PCI lately has been less eager to join the Italian government.

23. Tarnow's comments appeared in Die Stellungnahme der freien Gewerkschaften zur Wirtschaftsdemokratie (Jena, 1929), 18.Google Scholar On this question of capital formation the Meidner Plan marks a real qualitative advance over other economic democracy programs precisely because it plans to take over control of capital rather than simply raising its own.

24. The lessons the SPD and unions learned or did not learn from the Nazi period are not at issue here. Whatever they may or may not have been, it appears that the period immediately after the war offered some possibility for real economic transformation. How much possibility is not at all clear. What is clear is that two very different schools of interpretation have emerged. One speaks of either a blocked, new (presumably socialist) order or a (re-) imposed conservative, capitalist democracy, while the second warns against illusions as to what “the base” really wanted right after the war. See Winkler, H. A. ed., Politische Weichenstellungen in Nachkriegsdeutschland (Geschichte und Gesellschaft, Sonderheft 5, 1979)Google Scholar, especially the very informative and persuasive essay by Lutz Niethammer.

25. See, most recently, Klotzbach, KurtDer Weg zur Staatspartei: Programmatik, Politik und Organisation der deutschen Sozialdemokratie 1945 bis 1965 (Bonn/Berlin, 1982).Google Scholar

26. Przeworski, Adam, “Social Democracy as an Historical Phenomenon”, New Left Review 122 (1980): 27.Google Scholar See also, Sabel, Charles and Nolan, Mary“The Social Democratic Reform Cycle”, Political Power and Social Theory 3 (1982): 145–73.Google Scholar

27. Przeworski, “Social Democracy,” 52.

28. See Minnerup, Günther“West Germany since the War”, New Left Review 99 (1978)Google Scholar; Altvater, Elmar, Hoffmann, Jürgen and Semmler, WilliVon Wirtschaftswunder zur Wirtschaftskrise (Berlin, 1979)Google Scholar; Abelshauser, Werner, Wirtschaft in Westdeutschland, 1945–48 (Stuttgart, 1976).Google Scholar

29. Perhaps the best discussion of how this accord worked is in Offe, ClausContradictions of the Welfare State (Cambridge, 1984), especially 193–203Google Scholar, summarizing the work of Sam Bowles and others.

30. See, for example, Löwenthal's 1982 defense of the Social Democratic consensus, “The Future of the ‘Social Democratic Consensus,’”Dissent (Winter 1982): 93–101.Google Scholar