Seven - German Angst in a liberalised world of welfare capitalism: the hidden problem with post-conservative welfare policies

Summary

Introduction

According to a widespread reading, Germany, subsequent to the financial crisis of the late 2000s, has seen a stunning comeback as a social model allowing for both a booming economy and generous welfare provision. Compared to other Western European countries, economic growth appears robust, job prospects seem to be good especially for the young, and major public institutions continue to ensure a certain level of social redistribution. In the hegemonic European discourse, this (alleged) success is due to reforms accommodating the population to what globalised markets and financial capitalism (allegedly) require. Indeed, while major institutions of the ‘Bismarckian’ era (collective bargaining; social insurance; pay-as-you go benefits related to achieved social statuses) persist, scholars studying developments in Germany find evidence for the end of what is often referred to as a conservative welfare state regime (Bosch, 2015; Seeleib-Kaiser, 2016). The post-conservative arrangement is located between the traditional legacy and the liberal welfare regime embodied by Anglo-Saxon countries – and, from a distance, it seems that this intermediary position is the ‘silver bullet’ for reorganising current welfare states.

However, in the recent past Germany has been facing a social crisis that is poorly understood in both the public debate and major contributions to welfare policy analysis. Its epiphenomenon is the hostile reaction of parts of the population to the massive immigration of refugees starting in 2015. Similar to other European countries (albeit belatedly), the related tensions have entailed a formidable electoral success of a xenophobic right-wing party, alongside growing violence against ethnic minorities. Comments in the press as well as in some quarters of academia state that people are ‘worried’ by the influx of strangers, anticipating pressures on the welfare state or threats to their jobs. As far as we can see, this is a general pattern in the wider Europe and also in the UK – but in the light of the German ‘success story’, it may come as a surprise to those who believe in the narrative of post-conservative welfare policies being a ‘silver bullet’.

In what follows, we will argue that there should be no surprise here as this narrative is flawed and the aforementioned crisis is indicative of a more deep-seated transformation of Germany's social model, namely its creeping liberalisation (see Bridgen and Meyer, 2014).