The Dynamics of German Industry: Germany's Path toward the New Economy and the American Challenge

The Dynamics of German Industry: Germany's Path toward the New Economy and the American Challenge. By Werner Abelshauser, translated by David R. Antal. New York: Berghahn Books, 2005. vii + 168 pp. Tables, bibliography, notes, index. Cloth, $45.00. ISBN: 1-845-45072-8.

Reviewed by Gary Herrigel

Germans are worried that globalization and the international power of neoliberal ideas will undermine their highly cooperative domestic institutions of economic governance. Realms of economic life that have long been sheltered from the market and subject to negotiated governance among stakeholders, they fear, will give way to American-style hire-and-fire, shareholder-value, survival-of-the-fittest market rules. Werner Abelshauser, in The Dynamics of German Industry, attempts to bring a historical perspective to this problem in order to allay some of his compatriots' worst fears. In his view, Germany has the resources to resist liberal market transformation. He bases this claim on the fact that the corporatist institutional infrastructure that currently governs the economy originally emerged in response to precisely the kinds of globalized, knowledge-based industrial problems that characterize present-day competitive conditions in the "New Economy.

An older literature on Germany often labeled the corporate forms of organization in the economy as "premodern" hangers-on that stunted the character of German industrial development (and also prevented the success of liberalism in politics). Abelshauser disputes this characterization. He points out that, far from having preindustrial provenance, efforts to establish group-based corporatist governance of economic process began at the end of the nineteenth century in response to the global trade and knowledge challenges confronting the emerging industries of chemicals, electromechanical production, and advanced machine building. In...