Georg Altmann. Aktive Arbeitsmarktpolitik: Entstehung und Wirkung eines Reformkonzepts in der Bundesrepublik Deutschland. Stuttgart: Franz Steiner Verlag, 2004. 289 S. EUR 60.00 (paper), ISBN 978-3-515-08606-6.

Reviewed by Georg Menz (Goldsmiths College, University of London)
Published on H-German (March, 2007)

West Germany's Brief Flirt with Keynesianism

Keynesianism was never particularly popular in West Germany, at least in comparison with the rest of continental Europe. Classic neocorporatist institutional arrangements that facilitated the often heavily Keynesian-inspired economic planning of the postwar decades found a very weak equivalent in the ultimately short-lived Konzertierte Aktion, which emerged in 1967 and disintegrated ten years later. Nevertheless, active labor market policy was indeed pursued during this period and is highlighted in this detailed study of the 1969 Arbeitsförderungsgesetz. Such approaches, recently re-discovered in the more contemporary cloak of supply-side manipulation during the Gerhard Schröder years, attempt to address the challenges imposed by structural changes to the labor market and describe the profile of expectations regarding new entrants into the labor market by pro-active state interventionism.

The late 1960s anxieties regarding the implications of rapid technological progress, which Altmann chronicles here, have a surprisingly contemporary ring. But in comparison to contemporary approaches to the labor market, the late 1960s witnessed a brief period of interest in Keynesian notions of demand management; for example, through raising levels of unemployment compensation. This was also the time during which the Swedish Rehn-Meidner model of full employment by means of sector-specific retraining and reskilling measures enjoyed considerable popularity both among relevant international organizations, such as the International Labour Organisation (ILO) and various other European governments, though, as the author suggests, its influence on the West German Ministry of Labor remained extremely limited. While the 1967 unemployment level of 2 percent may seem trivial by contemporary standards, at the time it represented a near doubling of the previous rate, and triggered worries over the end of the economic miracle, providing fertile ground for the re-appearance of the Far Right. The legislative measures of 1967, which improved retraining and qualification measures, raised the levels of unemployment compensation and other auxiliary support schemes, and created a research institute for labor market and employment affairs (the Institut für Arbeitsmarkt-und Berufsforschung), need to be understood as pre-emptive measures at least partially influenced by Keynesian-inspired notions.

History was not kind to this brief embrace of active labor market policy. The Richard Nixon shocks destroyed the fixed but adjustable system of exchange rates, with serious consequences for West Germany, which had benefited from the undervaluation of its currency vis-à-vis the U.S. dollar, despite several adjustments throughout the 1960s. The OPEC decision to quadruple the price of oil had serious repercussions for West German rates of inflation, economic growth and unemployment, though it is worth noting that "stagflation" was much less severe in West Germany than in the United States or indeed in a number of other West European countries, notably the United Kingdom. Altmann argues that the 1969 law was very modest and not linked as strongly or clearly to Keynesian planning ideals as various government ministers claimed rhetorically. When compared to other West European countries' strategies in economic management, West Germany's very brief flirt with Keynesianism appears almost insignificant. Nevertheless, Altmann's study is a very thorough, at times almost forensic, look at the genesis, context, and implementation of the 1969 turn to active labor market policy.

The volume is based on a doctoral dissertation and shows all the trademarks of its origins. That said, it is an excellent in-depth analysis of this legislative act and an impressive piece of scholarship. Still, one might have hoped for a more explicit embedding into broader paradigmatic trends in macroeconomic steering and possibly a brief comparison with the experiences of other West European governments, along the lines of the magnus opus of Fritz Scharpf.[1] A recent study of my own likewise compares the experiences of single market effects in several European countries and thus moves beyond the obvious confines of a single country study.[2] Both of these paths would have led to a monograph that might have appealed to a wider audience.

Notes

[1]. Fritz Scharpf, Sozialdemokratische Krisenpolitik in Europa (Frankfurt: Campus, 1987).

[2]. Georg Menz, Varieties of Capitalism and Europeanization: National Response Strategies to the Single European Market (Oxford: Oxford University Press, 2005).

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Citation: Georg Menz. Review of Altmann, Georg, Aktive Arbeitsmarktpolitik: Entstehung und Wirkung eines Reformkonzepts in der Bundesrepublik Deutschland. H-German, H-Net Reviews. March, 2007.
URL: http://www.h-net.org/reviews/showrev.php?id=12993

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