TheEconomistFebruary 1st 2020 531O
ne hundredyears ago, on January 13th
1920, thousands took to the streets of
Berlin, waving red flags and chanting slo-
gans demanding more power for workers
as lawmakers in the Reichstag debated a
bill on works councils. Placards called, in
Gothic script, for volle Mitbestimmung. The
“full co-determination” the protesters de-
sired amounted to nothing short of an
equal say for workers and bosses in com-
pany management. The security police
killed 42 and injured more than 100 in the
young Weimar Republic’s bloodiest epi-
sode to date. Friedrich Ebert, the president,
declared a state of emergency.
In the past century German bosses, long
opposed to the idea, have made their peace
with it. Co-determination has become a de-
fining feature of German capitalism. And
an appealing one, across the West’s politi-
cal spectrum. France’s centrist president,
Emmanuel Macron, mutters about want-
ing more of it. Theresa May set up a com-
mission to look into how it might work inBritain while she was the Conservative
prime minister. Most volubly, Elizabeth
Warren, a progressive senator from Massa-
chusetts vying for the Democratic presi-
dential nomination, has a bill that would,
among other things, reserve 40% of board
seats of companies with revenues over
$1bn for workers’ representatives. Many
Americans wouldn’t mind; Civic Analytics,
a data firm, finds majorities of both Demo-
cratic and Republican voters in favour of al-
lowing employees at big firms to elect rep-
resentatives to the board of directors.
As other advanced economies toy with
the notion, however, parts of Deutschland
ag are asking whether it is fit for the times.
To some captains of German industry, the
answer is no longer a docile natürlich.
German co-determination comes in
two varieties, enshrined in a law from 1976
passed after relations between labour and
bosses soured in the wake of that decade’s
oil crisis. Workers in any firm with more
than five employees can by law form aworks council that co-decides some issues,
like working hours or maternity leave, with
management and co-operates with trade
unions in industry-wide collective bar-
gaining. At firms with 500-2,000 employ-
ees, worker and union representatives get a
third of seats on the supervisory board,
which in Germany’s two-tier board struc-
ture oversees the management board. (In
those with more than 2,000 workers em-
ployees can nominate half of supervisory-
board members.)
These days only around 10% of firms
with more than five employees have a
works council, chiefly because nine in ten
German companies have one to 20 employ-
ees, who can talk to the boss directly. But
the biggest 28,000 firms still have one. In
2016, the latest year for which figures are
available, 641 German firms had superviso-
ry boards with equal worker representa-
tion, down from 767 in 2002.Boon or boondoggle?
Defenders of co-determination argue that
it underpins many of German business’s
virtues. Its globally admired apprentice-
ship system “would not exist without co-
determination”, says Anke Hassel of the
Hertie School of Governance; the works
councils sustain it because they see it as an
investment in the workforce and push
companies to hire apprentices. More im-
portantly, co-determination soothes in-Labour in Deutschland AGUnseating an old idea
BERLIN
As giving workers a role in management gains fans elsewhere, the birthplace of
the notion is having second thoughtsBusiness
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