Germany's shift from the Alliance for Jobs to Agenda 2010: the role of transnationalizing German capital

This article seeks to go beyond the explanations offered thus far for Germany's dramatic shift from the Alliance for Jobs process to the Agenda 2010 reforms. The literature oscillates, and vacillates, between structural ("economic") and agential ("political") explanations, which is the consequence of the separation of institutions from the society they are part of. In contrast, Antonio Gramsci's writings on "common sense" provide us with the conceptual tools necessary for studying how the relationship between state and society evolved in the 1990s and 2000s. I argue that the increasing transnationalization of German capital in the 1990s modified its worldview-its version of common sense-and these twin, inextricably related, changes created the conditions for the potential detachment of a portion of social democracy from a traditional interpretation of the "social market economy". Particularly important in this process was the New Social Market Economy Initiative, which saturated public debate after 2000 with a liberal, market-oriented version of common sense.