ABSTRACT
A common narrative about German reforms of industrial relations is that labour and capital ‘settled’ – i.e., compromised. But an alternative and more plausible narrative is that state initiatives tamed labour. This narrative recognises the various ways state initiatives reframed German social expectations throughout the 1950s. Responding to the labour movement’s historical demand for participation in business management, the government enacted a codetermination law in 1952 mandating that workers’ representatives must be elected to company boards, rather than appointed by the unions. This led the main labour group, the Deutscher Gewerkschaftsbund to root its organisation in the shopfloor, while pushing for centralised wage negotiations. Consequently, the labour group’s centre of gravity shifted away from activists like Viktor Agartz, and towards pragmatists from the IG Metall union, which led the confederation to officially subscribe to the social market economy in its 1963 congress. That ideological pivot was underpinned by a new federal labour tribunal serving to discipline industrial action, and by the public’s acquiescence to the state’s relentless promotion of the social market. In a symmetric display of state leadership, right-wing constituencies that included refugees and small investors were compelled to sign up to the social market project in the Lastenausgleich.
