ABSTRACT
Free collective bargaining and an active government labour market policy have a decisive influence on the German labour market. These two phrases stand for a set of rules and regulations by which the “free play of forces” in the labour market is rendered largely ineffective. The justification given for this is that, as there is a fundamental imbalance between supply and demand in this market, precautions need to be taken to protect the individual supplier of labour.26 In addition, the German labour market has been influenced-to a greater extent than all other commodity and factor markets-by historical developments that foiled unrestricted liberalism in labour relations. The main factors to be borne in mind in this context are the German workers’ movement, the Catholic social doctrine, the inflation and world economic crisis of the 1920s and 1930s and the competition from the planned economy systems in the post-war period.
