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Recasting Welfare Capitalism

Recasting Welfare Capitalism: Economic Adjustment in Contemporary France and Germany

Mark I. Vail
Copyright Date: 2010
Published by: Temple University Press
Pages: 248
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  • Book Info
    Recasting Welfare Capitalism
    Book Description:

    In Recasting Welfare Capitalism, Mark Vail employs a sophisticated and original theoretical approach to compare welfare states and political-economic adjustment in Germany and France. He examines how and why institutional change takes place and what factors characterize economic evolution when moving from times of prosperity to more austere periods and back again. Covering the 1970s to the present, Vail analyzes social and economic reforms, including labor policy, social-insurance, and anti-poverty programs. He focuses on the tactics and actions of key political players, and demolishes the stagnation argument that suggests that France and Germany have largely frozen political economies, incapable of reform.Vail finds that these respective evolutions involve interrelated changes in social and economic policies and are characterized by political relationships that are continuously renegotiated-often in unpredictable ways. In the process, he presents a compelling reconceptualization of change in both the welfare state and the broader political economy during an age of globalization.

    eISBN: 978-1-59213-969-9
    Subjects: Political Science, Economics

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Tables
    (pp. ix-x)
  4. Preface
    (pp. xi-xvi)
  5. Abbreviations
    (pp. xvii-xx)
  6. Introduction: Recasting Welfare Capitalism in an Age of Austerity
    (pp. 1-15)

    This book examines how national models of welfare capitalism evolve when they move from prosperous times to periods of economic austerity. The end of the postwar boom has presented policymakers in Western Europe and the United States with unprecedented challenges, including rising rates of unemployment, sluggish economic growth, declining rates of productivity, and growing fiscal and demographic pressures on the welfare state. Faced with the unenviable task of presiding over a period of economic austerity while struggling to hold on to power and preserve social peace, public officials across the advanced industrial world have cast about for ways to preserve...

  7. 1 The Politics of Austerity in Advanced Industrial Democracies
    (pp. 16-32)

    Economic prosperity and political stability in postwar Western Europe developed in parallel with novel scholarly interpretations of the continent’s success. In France and Germany, as elsewhere in Western Europe, rebuilding ravaged economies, beginning to heal deeply divided societies, and reconstructing discredited political systems required fundamental innovations across the full range of national political and economic institutions. This process of self-reinvention gave rise to what Andrew Shonfield called “Modern Capitalism,” whose hallmarks were an enhanced role for public policy and nationally distinct constellations of public authority responsible for promoting economic development. During the heyday of the postwar golden age, national elites...

  8. 2 The Rise and Fall of the Postwar Golden Age and the Development of French and German Welfare Capitalism
    (pp. 33-49)

    In 1945, France and Germany were unlikely candidates for the political and economic successes that would mark their next three decades. The events of the interwar period and the war itself had left a legacy of completely discredited political elites and institutions, shattered economies, fractured societies, and, particularly in Germany, an unprecedented scale of physical destruction, even for a country well familiar with the ravages of war. In France, the disgrace of Vichy collaboration had seemingly furnished a negative answer to the old question, born during the Revolution, whether a stable democracy could ever firmly take root there. With the...

  9. 3 Recasting France’s Political-Economic Order: The Demise of Dirigisme and the Turn to the Market
    (pp. 50-65)

    On 10 May 1981, François Mitterrand became the first Socialist president to come to power in France since the advent of the Fifth Republic in 1958. This electoral revolution marked the end of the conservative Gaullist hegemony that had governed France during the previous two decades. It also embodied hopes for a new economic order in which the working class would be able to share more equitably in the fruits of economic growth. In the late 1970s, the industrial layoffs that had begun tentatively in the middle of that decade had accelerated dramatically, resulting in a jump in the unemployment...

  10. 4 German Reunification and the Economic and Social Incorporation of Eastern Germany
    (pp. 66-81)

    Less than a decade after the Socialist “U-turn” that marked the beginning of the end for French dirigisme, the reunification of the Federal Republic of Germany with the German Democratic Republic (GDR) utterly transformed the economic, social, and political life of the German people. The opening of the Berlin Wall on 9 November 1989 set off a year-long process of negotiations among East and West German elites and the four post-World War II occupying powers (France, Britain, the United States, and the Soviet Union), culminating in the formal reunification of the two countries on 3 October 1990.¹ On that November...

  11. 5 Modernizing the French and German Labor Markets in an Age of Austerity
    (pp. 82-114)

    In the three decades following World War II, vibrant economic growth and expanding employment throughout Western Europe were sustained by an enhanced role for public policy. The shared European hope was to guide and regulate the power of capitalist accumulation to rebuild the continent’s devastated economies and conquer mass unemployment, fear of which had been branded into the collective consciousness by the Great Depression. Like many of their neighbors, France and Germany devised novel institutional arrangements involving “a variety of independent forces combin[ing] to increase the available powers of control over the economic system and at the same time to...

  12. 6 The Shifting Politics of French and German Social-Insurance Reform
    (pp. 115-143)

    The French and German social-insurance systems were essential components of the two countries’ postwar settlements. Revamped after World War II, pensions and health care were expanded over the following three decades and provided essential support for rapid economic growth by facilitating workers’ adjustment to new economic circumstances and providing them with a politically salient stake in economic performance. The restructured systems were designed to plug gaps in income streams for workers, who generally enjoyed job stability and rising wages. By compensating workers for medical costs and ensuring income for the aged, these two keystones of the postwar French and German...

  13. 7 New Social Rights in France and Germany
    (pp. 144-160)

    As we have seen, the past two decades have witnessed a series of important adjustments in French and German social and labor-market policy. Successive governments have reformed the two countries’ pension and health-care systems, working to preserve the core of their welfare states while reconciling benefits with strained economic circumstances. Benefits have been trimmed; eligibility rules have been tightened; and dysfunctional arrangements, such as the traditional reliance on early retirement, have been scaled back, all with a view to reducing unemployment and aligning expenditures with social contributions. In labor-market policy, the degree of change has been no less significant, as...

  14. Conclusion: French and German Welfare-Capitalist Adjustment in Historical and Comparative Perspective
    (pp. 161-172)

    This book’s account of political and economic change in France and Germany sheds light on the much broader question of the dynamics of welfare capitalism in advanced industrial countries. Since the late 1940s, as one phase of adjustment has given way to another, new economic challenges have reshaped the political relationships through which adjustment has been negotiated. From the postwar period of rapid economic growth supported by expanded welfare states to dramatic processes of liberalization and marketization supported by further welfare-state expansion during the 1980s and early 1990s and the contemporary period of social-protection reform and labormarket activation, France and...

  15. Notes
    (pp. 173-220)
  16. Index
    (pp. 221-228)