German Business Responses to the New Nationalism and Populism

In the course of 2016, the nationalist wave sweeping the OECD countries crested in the vote for Brexit and the election of Trump. These developments demolished a consensus about global free trade and threaten the interests of international business. How have German firms responded to the rise of nationalism? This article focuses on employer associations in the EU’s most export-oriented political economy to identify how these geopolitical developments have affected firms’ preferences regarding the social market economy. The rise of nationalism presents a critical juncture where political actors openly discuss altering the rules of the game. I rely on >20 interviews with officials at multiple employer associations in Germany to investigate how growing anti-market sentiments at the transnational level have affected firms’ orientations to the social question at the domestic level, as well as the discursive strategies firms use to defend their political positions. Uncertainty and redistributive pressures have increased across the board: my interviewees are in universal agreement that nothing can be taken for granted anymore. Nevertheless, responses diverge among different segments of the German business class. More liberal segments of German business see the need for increased redistribution to facilitate a new social compromise and take the wind out of populism. More conservative elements dispute the validity of claims that inequality in Germany is increasing or is fueling the winds of populism. My paper attempts to explain these divergent responses. While my structural explanation highlights political economy considerations, I also investigate how values and ideology shape these responses.