“Social capital can be defined simply as the existence of a certain set of informal values or norms shared among members of a group that permit cooperation among them."
Francis Fukuyama
"When economic and political negotiation is embedded in dense networks of social interaction, incentives for opportunism are reduced. Dense networks of interaction probably broaden the participants' sense of self, developing the "I" into the "we"."
Robert D. Putnam
When we talk about the idea of European local productions systems that exist, the differences in social cohesion and cooperation among European regions might be interesting. This idea has been examined by scientists for a couple of years, now. Trust and the development of cooperation have been studied by behavioural as well as social and political scientists.
In 1993, after the Communist Block in Eastern Europe collapsed, Francis Fukuyama published his book “Trust” where he examines trust and social capital as an economic factor in the industrialized and industrializing nations.
A large part of his book is dedicated to the success of Germany’s economy. Fukuyama refers to the successful cooperation of horizontally (e.g. inter-capitalistic) and vertically interdependent agents (e.g. shop-owners and their employees). Indeed, the cooperation of business owners, or their managers, with their employees can be described as unique among large industrialized nations. Nevertheless, the “Mitbestimmung”-legislation (codetermination) and the “Deutschland AG” (Germany Inc.) conglomerate have been the object of severe criticism during the last decade. Attempts were made in order to cut back inter-firm dependencies and union-involvement in the German industry. With the latest scandal in the Volkswagen AG the “German Trust Model” seems to become a “lame duck”.
In this essay it will be focused on the interdependencies of firms and investors, and the role trust and social cohesion play in today’s German economy. Fukuyama’s thesis will be compared to the reality of German or Rhenish capitalism. Financial interdependencies and cooperation among Germany’s companies will be examined and it will be asked if they have changed during the last decades.
Inhaltsverzeichnis (Table of Contents)
- Preface
- Trust and Cooperation
- Germany's economy
- Germany's socio-economic conditions
- Inside Deutschland AG
- Changes in economy and policy
- A model challenged
- East and West
- Globalization
- Conclusion and Outlook
- References
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This essay examines the role of trust and social cohesion in Germany's economy, focusing on the interdependencies between firms and investors. It analyzes how these factors have influenced Germany's economic success and whether they have changed in recent decades. The essay compares Fukuyama's theory of trust as an economic factor to the reality of German capitalism, specifically the "Mitbestimmung" legislation (codetermination) and the "Deutschland AG" conglomerate.
- The concept of trust as a key factor in economic development
- The role of social capital in fostering cooperation and economic performance
- The impact of German specific institutions, such as "Mitbestimmung" and "Deutschland AG", on trust and economic success
- The challenges posed by globalization and changes in the German economic model
- The evolution of trust and cooperation within the German economy.
Zusammenfassung der Kapitel (Chapter Summaries)
- Preface: This chapter introduces the concept of trust and social capital as economic factors, drawing on the works of Fukuyama and Putnam. It highlights the importance of cooperation and trust in the context of European local production systems and examines the role of these elements in Germany's economic success.
- Trust and Cooperation: This chapter delves into Fukuyama's theory of trust, exploring its significance in fostering prosperity and economic growth. It examines the advantages of high-trust societies and the disadvantages of low-trust societies, highlighting the importance of shared values and social cohesion.
- Germany's economy: This chapter provides an overview of Germany's socio-economic conditions, including its unique model of "Mitbestimmung" (codetermination) and the "Deutschland AG" conglomerate. It explores the characteristics of Germany's economy and its success factors, examining the specific role of trust and cooperation within this context.
Schlüsselwörter (Keywords)
This essay focuses on the key concepts of trust, social capital, cooperation, and economic development in the context of Germany's economy. It examines the impact of "Mitbestimmung" (codetermination), "Deutschland AG", and globalization on the German economic model, analyzing the evolving role of trust and cooperation within the German business landscape.
- Quote paper
- Christoph Rieder (Author), 2005, Trust and Germany's Economy, Munich, GRIN Verlag, https://www.grin.com/document/49361
