Codetermination and Industrial Adjustment in the German Steel Industry: A Comparative Interpretation

by Kathleen Thelen



Industrial adjustment can ultimately be evaluated only in comparative perspective. This article argues that the German steel industry is a case of relatively successful adjustment compared with the other major steel-producing countries. First, the German steel industry as a whole is faring better in the market than most other comparable steel industries, and German firms have adjusted with substantially less support from the government than their European and American counterparts. Second, adjustment in the German steel industry has been relatively more consensual and less disruptive than in most other advanced countries. Third, far from inhibiting adjustment, codetermination has contributed to Germany's relative success because it has allowed for positive economic adaptation while at the same time providing a forum for resolving the political conflicts that accompany economic change. It is this combination of technically effective and politically smooth adjustment that makes the German steel industry a successful and instructive example of economic change.

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