Globalization and the German Social Transfer State

Abstract

After briefly characterising the normative foundation of the German social transfer state, the article analyses if and how far the process of globalisation was linked to social policy changes within the political discourse over the last 25 years. It is argued that social policy in general is traditionally considered to be a precondition for successful globalisation through its pacifying potential. However, ever since the first oil crisis in the 1970s and increasingly in the 1990s the political elite identified the German social transfer state, especially the high social security contributions, as limiting the competitiveness of German industry in the global economy. This dominant political discourse was causal for numerous changes at the policy level, which eventually led to a significant change of the normative foundation of the social transfer state.