M-TH: Re: German crash landing..

1999-11-24 Thread Hinrich Kuhls

Whats "Rhenish Capitalism"? 


The following definition sounds a rather good explanation of the term,
which is quite common over here in the political discourse when
distinguishing German society in juxtaposition to the Anglo-American model:

"The region of "Rhenish capitalism" (West Germany, the Benelux countries,
parts of France and northern Italy) ...  can be characterized by a highly
productive, export-oriented and (previously) successful Fordist production
model ("high-quality, high-skill, high-wage production"), whose regulatory
system, especially in the German area, is characterized by corporatist
association structure, a functional connection of industrial and bank
capital, high labor standards, and a high share in the social product of
the welfare state and social security."

There are slightly different definitions, mostly in the "broad" sense of
naming the combination of social market economy and capitalism specific to
(West) Germany within the last five decades [Fn.1]. The above "narrow"
definition is provided by social scientists Juergen Hoffmann and Reiner
Hoffmann in their article "Globalization - risks and opportunities for
labor policy in Europe" [Fn.2]. Supposedly the term was first used by
Michel Albert in 1992, but I couldn't retrieve that specific source [Fn.3].


*** Fn.1:
See for example 

*** Fn.2:
For those interested in this stuff: The full article by Hoffmann  Hoffmann
is at http://www.mars.dti.ne.jp/~soken/report/no8/r5.htm as part of the 
Rengo Research Institute Report No. 8 (1997)

Some more paragraphs referring to "Rhenish Capitalism" from that article:


Behind these challenges lies not only the European single market, but also,
and increasingly, the dominance of international financial markets, which
are forcing companies to utilize short-term, efficiency-oriented reasoning
and arguments in their business policy - and this, in turn, is defining the
social discourse and challenging the traditional, received forms of
regulation. Today's business culture in Western Europe means not only the
traditional "Fordist" approach as a potential model of productivity, but
also - as Michel Albert termed it - "Rhenish capitalism" (Albert 1992),
designed as a cooperative, social system to function in the long term. And
unions are finding themselves in the curious - and to them surely sometimes
uneasy - situation of having to defend this form of capitalism, while at
the same time being obliged to contain it as well as develop it further in
social and environmental terms - in the face of Anglo-American deregulation
which is geared towards a radical form of market-oriented capitalism, which
in the short run is apparently more successful on the world market. It is a
form radical market-oriented capitalism that has gained an increasingly
higher profile as a social prospect for the future, both through the
collapse of "real forms of previously existing socialism" and as a result
of the pressure exerted by the labor markets in the East. Moreover, in its
present form it leaves the trade unions little room for manoeuvre.


A decisive factor for the emerging dramatic changes in the business culture
in the countries of "Rhenish capitalism" in Europe is the trend for a
growing number of companies, instead of taking out capital loans and using
interest rates, to acquire the capital they need via the stock exchange,
where they are increasingly confronted in their business policy with the
short-term interests and calculations of shareholders.

What is more, this is above all an international, global process, as
reflected in the fact that the ratio to GDP to cross-border trade using
shares and loans to GDP rose from 5.1% in 1975 to 169.6% in 1993. The
rapidly growing, so-called "securitization of debt process" (cf. Guttman,
loc cit, Heine/Herr 1996, p.208 ff.), which from 1980 to 1993 led to a
six-fold increase in lending and is accompanied by the growing importance
of investment funds for the economy, as well as increasingly intense
competition on commodity markets through the deregulation of international
markets, is thus responsible for the transformation of social relations in
companies into a "business management issue" as well as for the dominance
of the short-term approach and variable costs - of which the most variable
are wage costs. In the countries practicing "Rhenish capitalism," this has
led to a - sometimes dramatic - change in corporate cultures, which are
increasingly geared towards the short-term dividend interests of
shareholders - "shareholder-value capitalism" - and which therefore like to
reduce workers (who in the period of postwar prosperity were raised to the
level of "co" -workers) to the level of "production factor costs" that are
to be eliminated as far as possible.


Trade unions are challenged in national labor markets 

M-TH: Re: German crash landing..

1999-11-23 Thread Hinrich Kuhls

Hi Bob,

you asked:

Heard on the tele tonight that one of the biggest 
construction outfits in Germany is on the brink of 
economic ruin. Over 50,000 jobs appear to be at 
stake. Now why in Germany with reunification and 
a huge building program does this kind of stuff drop 
down like a bomb all of a sudden?

It's *because of* the hostile takeover of the GDR and it's *because of* the
huge investments in buildings accompanied by high property speculation and
speculation in dwellings and office buildings. Holzmann AG - second biggest
German construction concern - went bust with 30.000 jobs. Another 40.000
jobs at enterprises dependent on Holzmann AG are hardly to be saved.

But what is at stake is not only this joint-stock company and the jobs of
all the colleagues. Both the bankruptcy of Holzmann AG (and it's handling
by the German banks) and the so-called unfriendly bid by Britain based
Vodafone AirTouch to buy Mannesmann AG for DM,-- [that's
more than,-- svenska kronor or about Euro,--] mark another turning point in the specific history of
German capitalism also known as Rhenish Capitalism.

Mannesmann AG is based in Duesseldorf, and as it happens to be the town
where I am living I can assure you that this town and all of the Rhine and
Ruhr region is in a specific mood of turmoil.

Now Deutschland AG definitely entered the era of shareholder capitalism.
The socialdemoratic-green government - trapped by it's "politics of
globalization" - is condemned to excute this epochal change. And the labour
and trade union movement is still in the defensive. 

Add to this 
- unemployment figures of more than four million (i.e. a quote of nearly 10
per cent in the western parts and nearly 20 per cent in the East o Germany)
- the constant deterioration of welfare state institutions and payments
- the increasing spendings for new armaments and the reorganisation of the
WEU with ex-NATO-secretary Solana as its latest acquisition
- the xenophobic hostility in large sections of both the population and the
political class
then you have the not at all boringly ordinary European normality of 1999.

Not the best prospects at the eve of entering a new century of capitalism.

Hinrich Kuhls
Duesseldorf, Germany.

 --- from list [EMAIL PROTECTED] ---