German crises before the crisis

Abstract

The article reviews recent writing on the political economy of Germany. Even before the global economic crisis of 2008–2010, scholars of German politics had identified deep fissures in the German model of capitalism and in the policies that sustained this system. Neither Social Democrats nor Christian Democrats seemed capable of initiating and executing the reforms that would tackle the fiscal dilemmas of the state. Though these recent accounts of German troubles agree in their diagnosis of severe strains and inadequate political response, they diverge in their analysis of the source of these problems. Are they endogenous to capitalist societies that try to reconcile free market economics with social welfare policies? Or were they Induced by the disruptive shocks of globalization and European integration? Whether the origins of the crises before the big crisis were exogenous or endogenous, there remains the further question of the national state's capacity to provide solutions. This article considers the German state's responses to the 2008–2010 financial and economic breakdown and concludes that there may be greater resilience and capabilities in national politics than those that the recent literature has identified.