Conclusion: Uncertain Outcomes of Conflict and Negotiation

Abstract

[Excerpt] To elaborate on each of these points, the findings presented in this book can be summarized as follows. First of all, the German model, that is, a social partnership approach to the negotiation of terms and conditions for the organization of an advanced market economy has worked in the past. We believe, on the basis of extensive collective research on different aspects of the political economy of the Federal Republic, both before and after unification, that the preservation of a reformed social partnership in Germany is highly desirable as an alternative to less regulated forms of capitalism in the contemporary world economy. Thus we disagree rather sharply with both conservative and liberal analysts who see the social market economy as an expensive and outdated relic of a welfare-state past. The evidence presented in this book also shows not only that social partnership is desirable but that it remains relatively intact. We have identified problems that must be solved for this to continue to be the case, but whatever the future holds, the basic institutions and practices of social partnership have been transferred into eastern Germany and continue to characterize political-economic relations in unified Germany. This remains true even in the face of major challenges presented by European integration, intensified global competition, a rapidly appreciating deutschmark, market imperatives for production reorganization (driven by Japanese-style lean production), and escalating collective bargaining conflict. Both employer associations and unions continue to play pattern-setting roles in wage negotiations, to set the framework for firm-level codetermination, and to engage in national, regional, and local negotiations over important aspects of economic and labor-market policy.