Session 6: Reforming Capital-Labor Relations in Germany

I. The Post-WWII German Political Economy

A. Conservative Monetary Policy

1) Ludwig Erhard (graphic)

2) The Independence of the Bundesbank (graphic)

3) Contractionary Fiscal Policy

B. The Social Market Economy (Sozialmarktwirtschaft) (graphic)

C. The Policymaking and Political Party System (graphic)

D. Macroeconomic Performance (graphic) (graphic) (graphic) (graphic) (graphic)

II. German Industrial Relations

A. Origins of the Dual System

1) Definition and Central Purposes (graphic)

2) Chronology (graphic)

B. Functions of the Dual System

1) Two Integrated Systems

2) Major Characteristics (graphic) (graphic)

Handouts:

Simulation #1: German Industrial Relations

Key Concepts: independence of the Bundesbank, the responsibilities of the Länder, high reserve requirements, contractionary fiscal policy, Sozialmarktwirtschaft, framework regulation, the Basic Law, overlapping federalism, mixed-member districts, the constructive vote of no confidence, the dual system, Allied Law No. 22, parity and non-parity codetermination (Mitbestimmung), Montanmitbestimmung, the German miracle (Wirtschaftswunderland), Works Constitution Act (1952), the Grand Coalition and Concerted Action (Konzertierte Aktion), revised Works Constitution Act (1972), Codetermination Act (1976), voluntary unionism vs. codetermination, wage drift, plant/factory egoism, non-wage gains.

Key Individuals: Ludwig Erhard, Konrad Adenaur, Wolfgang Streeck, Kathleen Thelen.