A review of Oliver Nachtwey, Germany’s Hidden Crisis: Social Decline in the Heart of Europe (Verso, 2018), £16.99
Oliver Nachtwey’s book sets out to examine the truth of the central ideological myths of the German economy. First, that Germany is still able to prosper, and secondly, that it does this by involving all sections of German society in the national economic effort. Nachtwey demolishes both these propositions; that he does so is important for workers’ movements here and in other countries because the German model is presented, in the words of sociologist Wolfgang Streeck, as “a paragon of economic success and political stability”.
In the UK we often hear of the good wages and conditions of German workers and how they are involved though works committees, etc, in the decisions necessary for prosperity. But a growing feeling of precarity has crept upon German workers, perhaps evidenced by young people opting for stable jobs in government service. This is despite more people being in employment since the two Germanies were reunited in 1990 and despite the German government not feeling it was able to push through internally the worst of the austerity programmes seen elsewhere in Europe.
Since the end of the Second World War, Germany has been seen as something of a miracle economy. Rising from the devastation of the war, West Germany established itself at the heart of capitalist development in Europe, creating alongside France the Common Market and the European Union. It was seen by many as what sociologist Ulrich Beck in his book Risk Society called the elevator society. In this concept all the various strata of German society were seen to be getting better off, all were going up the elevator—perhaps at slightly different speeds but nevertheless, all ascending.
Nachtwey calls this period “social modernity”, characterised by the growth of the welfare state, the removal of class barriers and an increase in educational opportunities for all.
The oil crisis of the early 1970s marked a change. It was a harbinger of the collapse of growth in the system as a whole and the beginning of a long period of crisis, for which the system has yet to provide an answer. Nachtwey, following Beck, posits this as the period of “regressive modernity”. The institutions of the social state were subject to competitive market mechanisms as, “the long-term weakness of the economy dissolved both the resources necessary for social integration and the will to pursue it” (p4). The period marked by this economic deregulation meant increased economic or “vertical” inequality. But it nevertheless contained elements of so called “horizontal” equality, with legislation on equal rights for women, on sexual orientation and so on.
Consequently, Nachtwey argues, the picture of German society is now one in which several of the key elevators, those containing working people, are now going down. Until the 1980s, real incomes were rising and the wage share, the percentage of national income allocated to wages, was rising. However, since the 1990s real wages have been falling despite increasing productivity.
This has resulted in fear of downward mobility spreading in German society. A measure of this is the Hartz IV legislation, introduced by the Red-Green government in 2005, which created different statutory employment types, including the “minijob” which removes much of the protection afforded to workers in regular employment.
This fear of downward mobility and social exclusion affects the shrinking middle classes as well as workers, and has resulted in the growth of xenophobic and nationalist solutions to the crisis. We have seen the rise of the islamophobic Pegida-type street movements and the right-wing party, the Alternative für Deutschland.
Nachtwey sets out the changes in German society well. He is less sure-footed when it comes to proposing a solution. He remarks that, often in cases of downward mobility: “A new kind of revolt breaks out, a democratic class conflict essentially driven by the struggle for political and social rights” (p6).
It should be said that Nachtwey identifies the working class historically as the key agent of change. He shows that its struggle for rights, in what he calls “early modernity”—roughly concurrent with the Weimar period—established civic freedoms on a more equal basis, laying the ground for a democratic society. However, the very success of these struggles undermined the basis on which they were waged, class cohesion and identity were lessened and individualism increased. Nachtwey does not go all the way with Beck, who argues that therefore class itself was disappearing. Instead he cites the liberal sociologist Ralf Dahrendorf in support of the idea that class antagonism in Germany had become institutionalised by the processes of collective bargaining, co-determination and trade union participation in enterprise. This “consensus orientated procedure” brought everyone around the negotiating table and meant that, for instance, trades unions were willing to moderate wage claims on the basis of an expansion of the welfare state. This corporatist approach weakened democracy in society; deals replaced debates. However, all of it was possible on the basis of economic growth. The collapse of that growth has lead to the situation today.
Centrally therefore, Nachtwey sees the present period not simply in terms of the growth of economic inequality, but also in terms of the decline of democracy where collective social rights are replaced by market citizenship rights. We all have the same rights in Lidl.
It is this struggle for democracy in conditions of downward mobility that Nachtwey puts centre stage in his hope for change. He foregrounds the struggles of the Occupy movement and the indignados and similar social movements as they are focused on democratic demands for control. He critiques them, however, because he considers them to have no real vision of a future society. He also devotes considerable attention to the rise in workers’ struggles in Germany, from hospital workers in Berlin to teachers across the whole country.
One feels, however, that his approach is guided by pessimism. He sees on the one hand the rise of the right and new anti-democratic forces, but on the other that the left, at least in the form of the SPD, has embraced neoliberalism. He does, however, recognise that what is needed is what he calls Solidarity Modernity, even though he might not be sure as to how to achieve that.
This is a rich and valuable book that raises many debates and that is usually on the right side of them. It does us all a favour in exposing the dynamic of the German economy and slaying the idea that at the heart of the EU is an economically vigorous and democratic state pushing us all forward.
Dave Gilchrist is the manager of Bookmarks, the socialist bookshop.