Pressure from without, Subversion from within: The Two-Pronged German Employer Offensive

Abstract

This article takes issue with ‘Varieties of Capitalism's’ portrayal of German employer preferences as structurally conservative. Since the mid-1990s, German employers have overcome their internal disunity and have been subverting existing institutions from without (politically) and from within (in the industrial relations realm). Scholars of German political economy have focused on continuity of structure and, having established this, have inferred continuity of content. Focusing on continuity in formal structures is misleading because this blinds analysts to important changes in content/practices; we see this most clearly in new management strategies, which alter the very essence of workplace labor relations. In addition to new management practices, this paper examines a large-scale public relations initiative founded and funded by German employers — the ‘New Social Market Initiative.’ Programmatically, the New Social Market shows that many German employers desire deregulation and liberalization — a move towards a Liberal Market Economy. The German employer offensive is a result of severe competitive pressures, the failure of the traditional institutions of the German model to satisfy employers' needs, and a set of circumstances that enable employers to transform the existing system from within while leaving many of its formal structures intact.