Becoming an open democratic capitalist society: a two-century historical perspective on Germany’s evolving political economy

Abstract

How do countries become open capitalist democracies? Why do they often fail? What can be the violent consequences of such failures? Douglass North, John Wallis, Barry Weingast, and Webb have proposed a framework for addressing these questions, as described in the first part of this article. It recognizes that the politics and economics of this process are jointly determined—the control of violence capacity in society and the distribution of economic benefits depend on each other. The second part of the article sketches out what this framework implies for interpreting the evolution of Germany’s politics and economics from the early nineteenth century through the mid twentieth century. This overview introduces five subsequent articles that discuss the framework in relation to specific historic sub-periods: 1814–1870 when the separate states of Germany competed economically and politically; 1871–1914 when a unified Germany made impressive progress on many dimensions but without making a transition to full democracy and civilian control of the military; the Weimar period when it consciously attempted such a transition and perhaps succeeded for a few years; the Nazi period of severe regression; and the post World War time when Germany did make the transition to full democratic capitalism.