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Recasting Welfare Capitalism: Economic Adjustment in Contemporary France and Germany

Mark Vail

Publication Year: 2009

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.

Published by: Temple University Press


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p. vi-vi

List of Tables

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p. viii-viii

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pp. xii-xv

How and why capitalism changes is among the most important and most difficult questions in comparative politics. As the Heisenberg uncertainty principle teaches us in the study of particle physics, it is often difficult to measure the position and momentum of particles with equal precision. Similarly, in comparative political economy, many have chosen to emphasize either the “position” or the “momentum” of advanced ...


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pp. xvi-xix

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Introduction: Recasting Welfare Capitalism in an Age of Austerity

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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 ...

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1 The Politics of Austerity in Advanced Industrial Democracies

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pp. 16-33

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 Capital-...

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2 The Rise and Fall of the Postwar Golden Age and the Development of French and German Welfare Capitalism

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pp. 34-49

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 ...

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3 Recasting France’s Political-Economic Order:The Demise of Dirigisme and the Turn to the Market

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pp. 50-65

On 10 May 1981, Fran

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4 German Reunification and the Economic and Social Incorporation of Eastern Germany

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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 trans-formed 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 ...

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5 Modernizing the French and German Labor Markets in an Age of Austerity

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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 ...

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6 The Shifting Politics of French and German Social-Insurance Reform

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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 ...

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7 New Social Rights in France and Germany

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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 ...

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Conclusion: French and German Welfare-Capitalist Adjustment in Historical and Comparative Perspective

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pp. 161-172

This book’s account of political and economic change in France and Ger-many 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 ...


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pp. 173-220


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pp. 221-228

E-ISBN-13: 9781592139699

Publication Year: 2009