The Initiative for a New Social- Market Economy and the Transformation of the German Welfare Regime after Unification

This paper focuses on how business interests and neoliberal ideas have come together in Germany during the past two decades. It is based on a detailed analysis of the INSM, a large-scale campaign founded and funded by the metal industry employers’ association Gesamtmetall in 2000 to shape public opinion. Since its origination, the INSM has launched a systematic attack on the German welfare state. As a business-led public relations campaign, the purpose of the INSM is to propagate market-oriented reforms and influence public opinion and policymaking rather than to develop new economic ideas. Nevertheless, a group of economists associated the Mont Pèlerin Society (MPS) have actively supported and campaigned for the INSM. The INSM exposes a serious problem with the academic literature that characterizes Germany as an exemplar of ‘non-liberal’ capitalism: the positions of leading German business officials and economists are fundamentally and unmistakably liberal