Vol. 20 · No. 4 · Issue 65 · Winter 2002

Hyeong-ki Kwon
Political Science, University of Chicago

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Abstract

The German model of political economy that had been an enviable alternative to the liberal market until the late 1980s in the literature of political economy was under serious structural crisis throughout the 1990s, causing serious doubts about its viability. Many neoliberals and industrial experts in Germany began to doubt whether Germany was an attractive place for business activity, initiating the Standort Deutschland debate. Even German Chancellor Gerhard Schröder conceded "the end of German model." Many political economists and journalists expected and recommended imitating the American model of a liberal market. Prominent German newspapers and magazines such as the Frankfurter Allgemeine Zeitung, Der Spiegel, and Die Woche ran articles titled "The Discovery of America" and "Jobwunder in Amerika." Wolfgang Streeck, one of the main proponents of the German model, expected the convergence of the German economy toward an American-led liberal market economy under globalization because of "a secular exhaustion of the German model." Streeck believed that the postwar German model was based on the politics between labor and capital within a national boundary, but globaliza-tion represents a fluidity of financial and labor markets that extricates whatever coordination has been nationally accomplished.