In the context of globalization and European integration, judgments about Germany’s standing – whether positive or negative – proceed on the basis of international comparison. Success is measured according to how well Germany’s economic and social system fares in comparisons on the international level and how compatible competitive principles are with social justice on the national level. In international comparisons, the comparative data that one chooses to employ plays a very significant role: for instance, if one wants to emphasize that the German economy can meet the challenges of globalization, then one should stress Germany's role as a world leader in exports or its high level of foreign investment. If, however, one believes that Germany is still not competitive on the world market, then one can support that argument by producing numbers reflecting the high cost of employee benefits, the inflexibility of the labor market, and the slow rate of economic growth. As helpful as comparative data can be in determining Germany's international standing with respect to economic productivity and competitiveness, such data allow for little consideration of national characteristics, which, in the case of Germany – with its exceptional situation (resulting from unification) and its strongly developed principles of social justice – must be taken into account. If we can escape the fixation on economic data for a moment, and add reforms in defense, education, and social welfare into the mix, then the picture becomes much more multifaceted than the public often perceives it to be.
No one disputes the fact that the zeal for reform has been repeatedly blocked and undermined; nonetheless, one can certainly say that the political system has made progress over the years in tackling various tasks (31). Reform in Germany is usually a cautious process of adjustment that seeks to modify old structures in order to make them more effective. Radical breaks, on the other hand, are rare. Still, we must not overlook the fact that many small steps toward reform can also yield change that is both far-reaching and structural. The wheels of the political mill turn slowly, yet a number of changes – tax and pension reform, the restructuring of capital and labor markets and higher education, and, not least, a series of laws that promoted a rethinking of social attitudes toward foreigners and gender roles within society – have altered the republic in lasting ways (32).
(31) The literature on this topic has grown so extensive that only a few recent publications will be mentioned here: Klaus F. Zimmermann, ed., Deutschland was nun? Reformen für Wirtschaft und Gesellschaft (Munich, 2006); Peter Bofinger, Wir sind besser als wir glauben. Wohlstand für alle (Reinbek bei Hamburg, 2006); Franz Walter, “Die ungleichzeitige Wirklichkeit. Eine Besichtigung der deutschen Gesellschaft im Jahr 2005”, Internationale Politik, 60 (October 2005), pp. 6-13. On the reform debate, see the essays in Simon Green and William E. Paterson, eds., Governance in Contemporary Germany. The Semisovereign State Revisited (Cambridge, UK, 2005) and Jürgen Kocka, ed., Zukunftsfähigkeit Deutschlands. Sozialwissenschaftliche Essays. WZB Jahrbuch 2006 (Berlin, 2007).
(32) See, for example, Perry Anderson, “A New Germany?”, New Left Review, 57 (May/June, 2009), pp. 5-40.