Beyond ‘geo-economics’: Advanced unevenness and the anatomy of German austerity

Abstract:

This article aims to shed new light on Germany’s domineering role in the eurocrisis. I argue that the realist-inspired depiction of Germany as a ‘geo-economic power’, locked into zero-sum competition with its European partners, is built around an empty core: unable to theorise how anarchy shapes the calculus of states where security competition has receded, it cannot explain why German state managers have insisted on an austerity response to the crisis despite its significant risks and costs even for Germany itself.

To unlock this puzzle, this article outlines a version of uneven and combined development that is better able to capture the international pressures and opportunities faced by policy elites in advanced capitalist states that no longer encounter one another as direct security rivals. Applied to Germany, this lens reveals a twofold unevenness in the historical structures and growth cycles of capitalist economies that shape its contradictory choice for austerity.

In the long run, the reorientation of the export-dependent German economy from Europe towards Asian and Latin American late industrialisers renders the structural adjustment of the eurozone an opportunity — from the cost-saving view of German manufacturers producing in the European home market for export abroad, as well as for German state officials keen to sustain a crumbling class compromise centred on Germany’s world market success.

In the short term, however, its exposed position between the divergent post-crisis trajectories of the US and Europe accelerates pressures for austerity beyond what German state and corporate elites would otherwise consider feasible.