Contestants, Profiteers, and the Political Dynamics of Marketization by Helen Callaghan

Author:Helen Callaghan
Language: eng
Format: epub
ISBN: 9780192548030
Publisher: OUP Oxford
Published: 2017-11-15T16:00:00+00:00

4.3 Summary

Two questions structured the narrative of this chapter: First, what explains the delay of market-enabling reforms? Second, why did they eventually succeed? Regarding the first question, the chapter showed that German incumbents succeeded in maintaining formidable defenses against challengers, because they nurtured symbionts who benefited from these market restraints for reasons of their own. In addition, their liberal and leftist critics, who had long lacked political power, failed to agree on a joint course of action. Regarding the second question, I argued that reforms became possible because the opposition to market restraints grew stronger rather than weaker over time. Instead of giving up, succumbing to bribes, or hoping that incumbents would dig their own grave, reformists unified while waiting for a political constellation to arise that would allow them to pass legislation. In addition, it probably helped that incumbents’ symbionts switched sides. German universal bankers remained loyal to their clients for a much longer time than their British counterparts did, but eventually they too succumbed to the temptation of becoming profiteers.

The German case thus highlights a key difference in the feedback effects triggered by market-enabling and market-restraining rules. Like Britain’s market-enabling takeover regime, Germany’s market-restraining regime enabled its beneficiaries to accumulate power resources, which they successfully employed during subsequent rounds of rule negotiation. However, in contrast to the growing political acquiescence observed in relation to Britain’s market-enabling regime, the chorus of dissenting voices against Germany’s market-restraining arrangements did not diminish over time. On the contrary, if party positions prior to World War II are included in the analysis, opposing voices have grown louder.

It would be rash to dismiss the German case as unique, even though, as elaborated by Callaghan and Höpner, changes in attitudes among German left-wing parties—from supporting to rejecting many market-restraining arrangements that characterized Germany’s “organized capitalism”—cannot be explained without reference to the historical lessons drawn by Social Democrats from the collapse of the Weimar Republic and the horrors that ensued.169 Concern with the political consequences of organized capitalism might well have grown even if these consequences had been less extreme.

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