The German Tradition of Organized Capitalism: Self-Government in the Coal Industry

The German Tradition of Organized Capitalism: Self-Government in the Coal Industry

The German Tradition of Organized Capitalism: Self-Government in the Coal Industry

The German Tradition of Organized Capitalism: Self-Government in the Coal Industry

Synopsis

Through a detailed examination of the German coal industry, Martin Parnell illustrates the historical evolution of the practice of industrial self-government and argues that historical continuities lie at the root of a full understanding of German capitalism. His study, which takes us from the eighteenth century to the present day, examines how intensive cooperation between state, management, private sector, and unions has shaped the industry both in growth and decline. He argues that it is Germany's strong tradition of industrial self-government that is the key institution characterizing the organization and functioning of the German political economy, uniting the politics of the dominant state role and the economics of industrial production. Parnell uses and develops the ideas of German economic historians, especially Abelshauser, whose influential work on the nineteenth-century origins of capitalist organization have recently begun to have a wide impact in translation. His work is a valuable contribution to the debate about the origins, forms, and future of German neo-corporatism.

Excerpt

In May 1987 the last coal-producing pit in Dortmund, traditionally a core area of the Ruhr coalfield, closed down with the loss of over 2,000 jobs. Ten months later, in January 1988, the West German coal producers agreed in Bonn to a major pit closure programme that would cut production by approximately 18-20 per cent over an eight-year period, with redundancies totalling 30,000. The primary objective was to reduce output, by 1995, from the 1986 level of 83 million tonnes by between 13-15 million tonnes.

Had the West German coal industry suddenly been confronted with a dramatic reversal, or did this new arrangement represent just the latest stage in a long-standing, ongoing retrenchment? Such a question had become all the more topical and urgent within a problematic environment exacerbated by the sharply contested redundancies in the West German steel industry whose own crisis appeared to be deepening. These developments appeared to confirm the apparently irreversible demise of those two traditional industries which had been the twin pillars of the industrial revolution and which had contributed so profoundly to Germany's industrial pre-eminence not just on the European scene but, indeed, on the world stage.

In the case of coal, subsidies amounting to 24 billion DM since 1980 had failed to compensate for the coal industry's exchange rate vulnerability in the face of the strengthening DM. International coal prices are calculated on a dollar basis and foreign coal was available at prices of less than 100 DM per tonne, compared to West German production costs of approximately 260-90 DM per tonne. Government disinclination to continue subsidies at such a level, along with its intention to lower the 'coal penny' (a charge on electricity bills to make it possible for power producers to buy exclusively from German mines) contributed towards making the situation all the more critical. With annual subsidies having reached 10 billion DM in 1987, something drastic had to be contemplated.

Output had been steadily declining, at the very least since 1970 when total German output had stood at 111 million tonnes. Twelve years later the Statistical Office of the European Community in Brussels was still . . .

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