Posted 2 years ago on Feb. 21, 2012, 1:40 p.m. EST by francismjenkins
This content is user submitted and not an official statement
Employees' representation in Germany has a binary structure: trade unions that set the framework for working conditions, such as collective wage agreements, for whole sectors or single companies, defining wage levels and working time on the one hand - and works councils ("Betriebsräte") that are elected by employees and represent their interests on company level. They shape and supervise the execution of the frameworks set by trade unions and laws in the company. German industrial relations are characterized by a high degree of employee participation up to co-determination in companies' boards ("Aufsichtsrat"), where trade unionists and works councils elected by employees have full voting rights. Local trade union representants are democratically elected by union members and formally largely autonomous. Central boards of directors ("Vorstand") are elected by delegatees.
That has to do with the commitment of executives to keeping jobs in Germany. Sure, German companies have opened factories in China and outsourced to Eastern Europe. Yet many German firms are stubbornly maintaining a certain amount of production within Germany as well. Part of the reason is skills. Germany has a lot of very talented engineers and assembly-line workers who are crucial to making those high-quality products that sell for so much money. But I’m going to speculate that part of the reason can be found in Germany’s corporate structure. The backbone of German manufacturing is small to mid-sized firms that are often family-owned. These families are in many cases committed to keeping factories at home. Though they want, of course, to make as much money as possible, they’re not under the same pressure from shareholders to show bigger and bigger profits each quarter. That allows them to take a long-term view.
There's also the fact that the Euro is probably undervalued by about 20% compared to where a "German only" currency would be valued. So what basic lessons can we learn?
1) currency devaluation can be a good thing (this gives us considerable flexibility in formulating a robust "Keynesian" stimulus).
2) stock holders can be a bad thing (while we want to expand ownership of companies, or production more generally, to as many people as possible, with most of our productive assets controlled by public companies, all the incentives are geared towards "short term" profits, which does not align with our national interests).
3) investing in science & engineering education is critical.
4) labor unions and worker participation in decisions, are good things.
The question is, how do we achieve these things? Nationalizing industry has been a problematic strategy when applied (the problem with "transitional" strategies has been, the state often won't cede control over productive resources once it accumulates it). Another option would be "subsidizing" alternative types of organizations, like employee owned companies, nonprofits, co-ops, etc. Inducing growth in labor unions is a pretty straightforward exercise. Pass laws expanding protections for labor unions. The one problem with anarcho-syndicalism, as applied (in Spain), was high unemployment. However, I think the same goals can be achieved, through a slightly different implementation model (and one which is supported by evidence); that allows us to reap the benefits and avoid the pitfalls. Call it, Anarcho-Syndicalism II.