Abstract
How do countries become open capitalist democracies? Why do they often fail? What can be the violent consequences of such failures? Douglass North, John Wallis, Barry Weingast, and Webb have proposed a framework for addressing these questions, as described in the first part of this article. It recognizes that the politics and economics of this process are jointly determined—the control of violence capacity in society and the distribution of economic benefits depend on each other. The second part of the article sketches out what this framework implies for interpreting the evolution of Germany’s politics and economics from the early nineteenth century through the mid twentieth century. This overview introduces five subsequent articles that discuss the framework in relation to specific historic sub-periods: 1814–1870 when the separate states of Germany competed economically and politically; 1871–1914 when a unified Germany made impressive progress on many dimensions but without making a transition to full democracy and civilian control of the military; the Weimar period when it consciously attempted such a transition and perhaps succeeded for a few years; the Nazi period of severe regression; and the post World War time when Germany did make the transition to full democratic capitalism.
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Notes
Political theorists see various ways that societies might strive for, but fall short of, ideal democratic representation of citizens’ wishes (Blankart and Mueller 2014). Our approach emphasizes the practicalities of how political organizations interact with economic interests and violence potential.
North et al. (2009) uses the term natural state to mean the same as LAO.
Studying the German case is a step toward applying the LAO/OAO framework to the rest of Europe.
I follow the convention that “organizations” are the players in the game and that “institutions” are the rules by which they play. See (North 1991).
Wehler discusses the origin and significance of the term Sonderweg (2000, pp. 84–89).
The representation in Prussian lower house was according to how much property tax a man paid. Most democracies, including the US, Britain and other German states, had unequal representation per capita, typically based on historical geography and biased in favor of rural over urban areas. Property requirements for suffrage and class-based eligibility for the upper house, as in Britain and Sweden, were also common (Congleton 2011).
The Bundesrat held the power to initiate and veto all legislation, including constitutional changes Congleton (2011, p. 471).
Congleton (2011, chapter 6), analyses the possibilities and limits for legislatures to use the power of the purse to increase their authority.
The U.S. also has separation of executive and legislative powers, but there the president is elected and his cabinet and other high-level appointments require legislative approval.
Craig (1955) documents the ability of the army repeatedly to survive as a state within a state and to resist tendencies toward open access.
Lowe (2012) provides lurid details.
This is not arguing that U.S. military presence is automatically or even typically a factor that promotes maturation of LAOs and eventual transition to open access. This might have been the case in post-war Japan and South Korea (pending further investigation), but in places like the Philippines, Haiti, the Dominican Republic, and Central America the US military intervention probably disrupted the maturation of those LAOs.
The Commonwealth agreements providing for home rule in Canada, Australia and New Zealand may have been analogous precursors. Other parts of the Commonwealth, in the Caribbean, Africa and Asia, have not made a transition to open access, however; some have become fragile LAOs (North et al. 2013).
Of course the Nazi Party was also dismantled and banned, as the immediate instigator of the holocaust and other horrors of the 1930s and 1940s. It was, as argued above, the result not the cause of the breakdown of the mature LAO from pre-1914,
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Acknowledgments
For their valuable suggestions, the author thanks the editors, an anonymous referee, and the participants at the 2013 and 2014 seminars at the Walter Eucken Institute, including the other authors in this special edition.
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Webb, S.B. Becoming an open democratic capitalist society: a two-century historical perspective on Germany’s evolving political economy. Const Polit Econ 26, 19–37 (2015). https://doi.org/10.1007/s10602-014-9179-6
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DOI: https://doi.org/10.1007/s10602-014-9179-6