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Change and internationalization in industry: toward a sectoral interpretation of West German Politics

Published online by Cambridge University Press:  22 May 2009

Christain Deubner
Christain Deubner
Affiliation:
is Research Associate at the Stiftung Wissenschaft und Politik, Ebenhausen bei Miinchen, and teaches international relations at the Maximilians University, Munich, West Germany.
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Abstract

Sectoral growth and change in the postwar West German economy have been affected both by the specialization inherited from prewar times and by the general Western evolution of demand and production along “Neo-Fordist” lines. These two factors have also shaped West Germany's politics, particularly the organization of labor and bourgeoisie, and their alliances with each other and with the state apparatus. The three most important economic crisis situations since 1945 were turning points in the political articulation of socioeconomic interests. The crisis of the immediate postwar period resulted in a politics determined by the conflict of interests between owners of capital and the rest of the population, especially labor from 1947 onward. The Social Democratic party (SPD) was outside the government. A temporary interruption of sustained and highly differentiated sectoral growth in 1966 led to greater political attention to sectoral problems and less attention to class conflict. The SPD entered, indeed led, the government. Since the mid 1970s, the economy's structural crisis, compounded by growing foreign competition, has reaccentuated class conflict in political life. The SPD lost power in 1982.

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Articles
Information
International Organization , Volume 38 , Issue 3 , Summer 1984 , pp. 501 - 535
Copyright
Copyright © The IO Foundation 1984

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References

1. On the state, see Deubner, Christian, ‘The Expansion of West German Capital and the Founding of Euratom,’ International Organization 33 (Spring 1979), pp. 224–26CrossRefGoogle Scholar. Cf. also Poulantzas, Nicos, ‘Internationalization of Capitalist Relations and the Nation-State,’ Economy and Society 3 (1974)CrossRefGoogle Scholar.

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14. Aglietta, Michel gives the most coherent model of Neo-Fordist growth in A Theory of Capitalist Regulation: The US Experience (London: New Left Books, 1979)Google Scholar. This is certainly not the only model, but it does combine important variables that only appear separately elsewhere. For another combined model, see Altvater, Hoffmann, and Semmler, Vom Wirtschaftswunder, esp. chap. 2.

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16. Many statistics on West German sociological and economic development demonstrate this far-reaching change. For data on the expanding production and consumption of consumer durables, see Grünig, Ferdinand and Krengel, Rolf, Die Expansion der westdeutschen Industrie 1948–1954 (West Berlin: Duncker & Humblot, 1955), pp. 26–28Google Scholar.

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18. See 1981–82 reporting in the business press, for instance Handelsblatt.

19. More details are to be found in Deubner, Christian, “Internationalisierung als Problem alternativer Wirtschaftspolitik,” Leviathan 7, 1 (1979), pp. 97–116Google Scholar.

20. Data adapted from Maizels, A., Industrial Growth and World Trade (Cambridge: Cambridge University Press, 1971)Google Scholar, and from United Nations, Economic Commission for Europe, Le róle et la place des industries mécaniques et électriques dans les économies nationales et dans l'iconomie mondiale (Geneva: 1974)Google Scholar. See also Glastetter, , Die wirschaftliche Entwicklung, p. 210Google Scholar.

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22. In 1975: chemical industry 26.7%, electrical industry 27.3%, mechanical engineering and transport 23.3%. See OECD Science Resources Newsletter 3 (Winter 1977–1978), Table 1Google Scholar.

23. We may speculate from fragmentary evidence that a great deal of these imports are captive, carried out by domestic mechanical engineering firms to cheapen their total line. For data, see Deutsches Institut für Wirtschaftsforschung, Wochenbericht 40/1981.

24. Cf. Dresdner Bank, Wirtschaftsberichte, 03 1983Google Scholar, and Goybet, P. and Zangl, P., “Der Auβenhandel der Gemeinschaft: Bedrohung fur die Investitionsgiiterindustrie (1973–1981),’ Europäische Wirtschaft 16 (07 1983), pp. 93–133Google Scholar.

25. On the general problem of NIC competition on West German markets, seeSimonis, Georg, “Die Bundesrepublik und die neue international Arbeitsteilung,” Leviathan 7, 1 (1979), pp. 36–56Google Scholar. For 1970 and 1979, cf. Aussenhandelsbl/tter der Commerzbank 7–8‘1980, p. 2Google Scholar.

26. For the following, see for instance Sheperd, Geoffrey, Public and Private Strategies for Survival in the Textile and Clothing Industries of Western Europe and the United States, working paper IAP/80/56 (Brighton: Sussex European Research Centre, 1980)Google Scholar. Also Deubner, Christian, “Zur lnternationalisierung der westdeutschen Bekleidungsindustrie,” WSI-Mitteilungen 1 (1979)Google Scholar.

27. Deutsches Institut für Wirtschaftsforschung, Wochenbericht 13‘ 13/ 1979.

28. Fröbel, Folker, Heinrichs, Jörgen, and Kreye, Otto, Die neue Internationale Arbeitsteilung (Hamburg Reinbek: Rowohlt, 1977), pp. 67–208Google Scholar; cf. also fn. 21 above.

29. Among many analyses of the steel issue, see Palloix, Christian, L'internationalisation du capital: Elements critiques (Paris: Masp/ro, 1975), pp. 111–26 and 138–41Google Scholar.

30. Ibid.

31. The most notorious and successful West German firm starting on this special line of business was a rather small outsider, Korf Stahl AG of Baden-Baden.

32. See data of the Federal Agency for Employment, September 1983, reported in Handelsblatt, 6 September 1983.

33. See Handelsblatt, 20 September 1983, and Jones, Daniel T., Maturity and Crisis in the European Car Industry (Brighton: Sussex European Papers, 1981), table 2Google Scholar.

34. A recent report of the Munich Institute for Economic Research discusses this problem. See Gerstenberger, Wolfgang et al. in Ifo Institut fur Wirtschaftsforschung, Analyse der strukiurellen Entwicklung der deutschen Winschaft. Strukturberichterstattung 1980, Schriftenreihe des Ifo Instituts no. 107, 2 vols. (West Berlin: Duncker & Humblot, 1981), chap. 5Google Scholar.

35. Braunthal, Gerhard, The Federation of German Industry in Politics (Ithaca: Cornell University Press, 1965)Google Scholar; see also Buchholz, Edwin, Interessen, Gruppen, Interessentengruppen (Tubingen: Mohr, 1970)Google Scholar.

36. See Lankowski, , “Germany and the European Communities,” p. 153Google Scholar.

37. In nuclear politics, for instance–see Deubner, “Expansion of West German Capital.”

38. For the intense relations between different parties, including the SPD, and economic interest associations, see Meer, Horst van der, Politische Rolle und Funktion der Monopolverbande inder BRD (East Berlin: Institut für international Politik und Wirtschaft, 1983)Google Scholar. For a journalistic account of the (by then well-established) relations between SPD leaders and top managers from banking and industry, see “Main Freund Zahn’ [“My Friend Zahn,” referring to the then top executive of Daimler Benz AG], Spiegel, 17 March 1980.

39. Contrast the view taken by Katzenstein, Peter, “West Germany as Number Two: Reflections on the German Model,” in Markovits, Andrei, ed., The Political Economy of West Germany (New York: Praeger, 1982)Google Scholar.

40. There was intense newspaper reporting on these developments in the years 1954–56, especially by the liberal-minded Handelsblatt, on which this brief account is based. On the anticartel legislation, see Tuchtfeldt, Eugen, “Kartelle,” in Albers, Willi et al. , eds., Handwörterbuch der Wirtschaftswissenschaft, vol. 4 (Stuttgart: Fischer, 1978), pp. 445–62Google Scholar.

41. See, for instance, Handelsblatt, 15 September 1955 and 20 June 1956. Braunthal writes about the pro-Erhard wing in the BDI in his The Federation of German Industry, p. 205. Kreile, has shown in “West Germany: The Dynamics,” p. 214Google Scholar, that the SPD and organized labor were also supporting a policy combining import barrier reduction with revaluation at the time of the 1960–61 revaluation debate. On the continuity of cartelization, see Petzina, Dietmar, “The Origins of the European Coal and Steel Community: Economic Forces and Political Interests,” Zeitschrift fur die Gesamte Staatswissenschaft 137 (09 1981), pp. 450–68Google Scholar.

42. See, for instance, the protocol of the DGB executive meeting on 1 January 1956, in the DGB archive, Dusseldorf.

43. For this and the following, see Deubner, , “Expansion of West German Capital,” pp. 220–21Google Scholar; for more detail, see Deubner, , Die Atompolitik der westdeulschen Industrie und die Gründung von Euratom (Frankfurt: Campus, 1977), pp. 34–40Google Scholar.

44. Cf. the nuclear program of the SPD, in Deutschlands, Sozialdemokratische Partei, Atomplander SPD (1956)Google Scholar.

45. See, for instance, Hoffmann, Walther G., “Die industriellen Lohnrelationen,” in König, Heinz, ed., Wandlungen der Wirtschaftsstruktur in der Bundesrepublik Deutschland (West Berlin: Duncker & Humblot, 1962), p. 60Google Scholar.

46. Wallich (Mainsprings) mentions the extremely low early levels. Even in 1982, wage differentials remained at about 37% between the highest- and lowest-paying sectors of industry. See Welzmiiller, Rudi, “Daten zur Einkommensentwicklung,” in WSI-Mitteilungen no. 6 (1983), pp. 361–70Google Scholar.

47. For the change to the Great Coalition and the related economic problems, see Zeuner, Bodo, “Das Parteiensystem in der Graven Koalition,” in Staritz, Dietrich, ed., Das Parteiensystem der Bundesrepublik, 2d ed. (Opladen: Leske & Budrich, 1980), pp. 174–93CrossRefGoogle Scholar. The political debate is recounted in Knorr, Heribert, “Die groβe Koalition in der parlamentarischen Diskussion der Bundesrepublik 1949–1965,” in Aus Politik und Zeitgeschichte: Beilage zum Parlament, 17 08 1974, pp. 24–47Google Scholar.

48. See, for instance, Spiegel no. 42 (1966), p. 32Google Scholar.

49. Spiegel no. 45 (1966), p. 31, my translationGoogle Scholar.

50. No. 44 (4 November 1966), p. 2143, my translation.

51. Cf. Rolf Zundel in ibid., 16 and 23 December 1966.

52. For this see among others Zeuner, , “Das Parteiensystem,” pp. 175–77Google Scholar, or Altvater, Hoffmann, and Semmler, Vom Wirtschaftswunder.

53. Schatz, Karl Werner, Wachstum und Strukturwandel der westdeutschen Wirtschaft im internationalen Verbund (Tubingen: Mohr, 1974)Google Scholar.

54. Employment in the textile and clothing industry, as one example, decreased by about 32,000 from 1960 to 1965, and by a further 46,000 by 1969. Between 1969 and 1976, it diminished by about 290,000. See the data in Fröbel, , Heinrichs, , and Kreye, , Die neue intemationale Arbeitsteilung, table 1–5, p. 222Google Scholar. In the same period the socialist countries’ share of quickly expanding West German clothing imports climbed from about 8% in 1962 to 22% in 1972. It then stagnated around this level, while developing countries held about 40%. Most firms suffered, but the very biggest engaged in subcontracting to and reimporting from East Europe. One indicator of problems was the occasionally violent complaints about alleged CMEA dumping on the West German market, concentrated in the clothing and wooden products sectors; see Stahnke, Arthur, “The West German System of Protection against Dumping by Centrally Planned Economies,” ACES Bulletin 23 (Spring 1981), pp. 1–24Google Scholar. But evidently Eastern trade had industrial support in the context of the new Ostpolitik, with its import barrier reductions after 1966; see Wolf, T. A., “The Impact of Elimination of West German Quantitative Restrictions on Imports from Centrally Planned Economies,” Weltwirtschaftliches Archiv 112, 2 (1976), pp. 338–58CrossRefGoogle Scholar. As early as the 1950s, a strong coalition of mechanical engineering and steel processors, increasingly joined by process plant suppliers and by certain groups of consumer goods producers, clamored for trade agreements with the Eastern bloc. To a large extent, they were satisfied by new Ostpolitik, which provided the treaty foundations for export expansion to the East. Of total exports of machine-tool and rolling-mill equipment exports about 13%, of steel-tubes exports about 11 %, and of semifinished chemical goods and of iron products around 9% went to the CMEA countries (including the Soviet Union) in 1981. See Bethkenhagen, Jochen in Deutsches Institut für Wirtschaftsforschung, Wochenbericht 10/1982, pp. 146–47Google Scholar.

55. Meyer, W. R., “Strukturpolitische KrisenbewSltigung im Ruhrgebiet,” in Ellwein, Theodor, ed., PolitikfeldAnalysen 1979Google Scholar. Tagungsbericht des wissenschaftlichen Kongresses der Deutschen Vereinigung für Politische Wissenschaft vom 1.–5.10.1979 (Hamburg: DVPW, 1980)Google Scholar. He also refers to the ‘Ruhrkonferenz’ of May 1979, convened by the state government of North Rhine Westphalia to discuss the pressing structural problems of Ruhr industry. Cited in Esser, Josef, Gewerkschaften in der Krise—Die Anpassung der deutschen Gewerkschaften an neue Wellmarktbedingungen (Frankfurt: Suhrkamp, 1982), pp. 186–87Google Scholar.

56. This is explicitly stressed not only by the steel-producers’ association but also by steelconsuming firms. Spethmann, Cf. Dieter, “Nur höhere Preise konnen vor neuen Verlusten schützen,” Handelsblatt, 31 12 1981, p. 26Google Scholar. Spethmann is president of the steel-producers’ association.

57. Esser, , Gewerkschaften in der Krise, p. 19Google Scholar, my translation: ‘The stage of repoliticization [of collective bargaining] was reached in the Federal Republic in 1967, when the state … took over political responsibility for the balanced development of price, stability, full employment, economic growth, and foreign-exchange equilibrium.’ Cf. also Weitbrecht, H., Effektivität und Legitimität der Tarifautonomie (West Berlin: Duncker & Humblot, 1969)Google Scholar.

58. This special meaning of export competitiveness for Social Democrat legitimacy is hinted at by Schmidt, Manfred, Die Regulierung des Kapitalismus unter bürgerlichen und sozialdemokratischen Regierungen (Constance: University of Constance, 1979)Google Scholar.

59. Cf. the long intraparty debate about Orientierungsrahmen 85, a voluminous, programmatic document. It did in the end contain some initiatives for a basically reformed economic order but was quickly laid aside and “forgotten” by the party leadership.

60. In fact, the Bundesbank had by its management of this floating gained a degree of exchangerate parity control that it had not possessed before. By law, the government was responsible for fixing official exchange rates; this now remains the case only within the European Monetary System; Kreile, , “West Germany: The Dynamics,” p. 209Google Scholar.

61. Still the most comprehensive outline of this SPD strategy is Hauff and Scharpf, Modernisierung der Volkswirtschaft. Mention must be made as well of the so-called Strukturberichterstattung (reporting on structural development). Initiated by the SPD in the new federal government, in the context of heightened interest in information and state activity concerning sectoral growth, and based on identical contracts between the federal Economics Ministry and five economic research institutes in January 1978, it produced five intermediate and five competing main reports in 1979 and in December 1980. The latter are Lamberts, Willi et al. , of the Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Analyse der strukturellen Entwicklung der deutschen Wirtschaft. Strukturberichterstattung 1980, Gutachten im Auftrage des Bundesministers fur Wirtschaft, 2 vols. (Essen: RWI, 1980)Google Scholar; Görzig, Bernd et al. , of the Deutsches Institut für Wirtschaftsforschung, Abschwächung der Wachstumsimpulse. Analyse … (West Berlin: DIW, 1980)Google Scholar; Danckwerts, Rudolf-Ferdinand et al. , of the HWWA Institut für Wirtschaftsforschung, Analyse …, 3 vols. (Hamburg: HWWA, 1980)Google Scholar; Fels, Gerhard, Schmidt, Klaus-Dieter et al. , of the Institut fur Weltwirtschaft an der Universität Kiel, Die deutsche Wirtschaft im Strukturwandel, Kieler Studien no. 166 (Tubingen: Mohr, 1980Google Scholar. Gerstenberger etal., Analyse.

62. The Free Democrats present themselves as representatives of these industrial interests in the coalition. The so-called Operation’ 82, cutting the 1982 federal budget to reduce publicdeficit increases, which the opposition made a major issue in previous years, took very sensitive coalition negotiations in the fall of 1981. An equally critical negotiation of the coming budget in early summer 1982 moved this issue into the foreground again.

63. “Employment policy is hurt by its fixation on the state,” Deutsche Bank Chairman of the Board Wilhelm Christians wrote in the year-end edition of Handelsblatt, 31 December 1981, p. 4, clearly alluding to the opinion of trade unions–but also of other labor–oriented political groupings–that government has the ability and the duty to promote economic activity and employment. “They have to recognize again that employment depends on the wage level.” (My translations.) Christians admonished everybody that collective bargaining and not the government is responsible for wage levels. Bankers and industrial interest representatives from all of industry increasingly propose a “reindustrialization” –that is, expanded investment in the productive sector and a turning away from the service-sector growth illusions–to cure crisis and unemployment. They demand a structural increase of profits via cost and especially laborcost reduction. Such a reindustrialization, built on a pessimistic assessment of the absorptive potential of the domestic market, would have to increase foreign-market dependence even further.

64. The differences between trade and international investment create problems for state policies. Direct investment is often made because it offers easier access to foreign markets, and frequently as an express instrument to overcome trade barriers. Capital investments abroad thus make capital owners a little less sensitive than exporters to trade restrictions. But because of continuing limits on the domestic market, the concern with free trade must survive.

65. Since 1974, Chancellor Helmut Schmidt continuously propagandized this need for the industrialized countries: to keep in touch and to coordinate policies so as to avoid the dangers of the interwar breakup of the world economy. “The industrialized nations [must] recognize the necessity of an internationally agreed policy for stability, realized under international moralpolitical pressure. Only the preservation of world peace is a more to be desired goal.” Schmidt, , “Der Politiker als ökonom,” in his Kontinuität und Konzentration (Bonn: Neue Gesellschaft, 1975), p. 134Google Scholar, my translation.

66. One result is the necessity for intra-EC currency reserve credit facilities, which exist today in different forms. West Germany, being the main creditor under these schemes, has the greatest clout in setting guidelines for borrowers. This is bound to create political problems at some future date.

67. Kaiser, Karl, Lord, Winston, Montbrial, Thierry de, and Watt, David, Western Security: What Has Changed? What Should Be Done? (New York: Council on Foreign Relations, 1981), especially chaps. 1 and 2Google Scholar.