German 'grand strategy' and the rise of neoliberalism

This article examines the central role of the West German state in the transition from the golden to the global age of capitalism in the crisis decade of the 1970s. I argue that in order to keep the world economy open for its exports and shore up its competitive position, German crisis managers pursued a grand economic strategy that sought to defeat the interventionist and expansionary responses of the European left and to commit the United States to monetary discipline. The success of this strategy had contradictory consequences: It stabilized the social consensus inside Germany but undermined it in states whose economies did not stand to benefit from austerity measures. Germany's particularistic way of coping with the crisis thus contributed decisively, though not deliberately, to the “disembedding” of the liberal international economic order. This argument challenges existing explanations of neoliberalism as an Anglo-American imposition on a passive Western Europe and Japan or as an ideological conversion of policymakers. I conclude with an alternative interpretation that highlights the interplay of divergent and opposing strategies of crisis management as the principal driver of social and world order change in the 1970s and potentially today