Published online by Cambridge University Press: 02 April 2002
The failure of the socialization of heavy industry in West Germany following the Second World War has often been ascribed to American reluctance to allow meaningful social reform in the face of an intensifying Cold War. But a closer look at the socialization issue during the latter half of the 1940s demonstrates the enormous complexity of transforming Germany's heavy industry. First, the British, who originally advocated socialization, i.e. the public ownership of heavy industry, had done so on security grounds. But when trying to reach out to ‘democratic’ Germans, such as social democrats and left wing members of the Christian democratic union, the British realized the difficulty of cultivating a meaningful consensus within western Germany concerning the fate of heavy industry. In the end, they therefore acceded to American arguments that socialization of such important industries should wait until the creation of a central German government. But once a central German government existed from 1949, socialization did not take place. The chief reason for this was that West German social democrats had already concluded in 1947 that American ‘domination’ of western Germany meant the stifling of social reform. They therefore ceded leadership over German affairs to a Christian democratic union decidedly more favourable to free enterprise. Instead, the social democrats and their trade union allies concentrated their efforts at social reform in the introduction and institutionalization of management–labour co-determination.