From In These Times :
German worker control contributes to a group interaction that over time not only builds up but also protects a certain amount of human capital, especially in engineering and quality control. This kind of knowledge is not just individual but group knowledge. It's the kind of group knowledge that our efficient, "flexible" labor markets so readily break up and disperse. It's our flexible labor markets that make it so hard for the United States and the UK to compete. We spend vastly more on basic research than the Germans do -- U.S. companies are unrivaled. We spend far more on higher education. But with our flexible labor markets, we're unable to capitalize on this research and education. Sometimes we try the Japanese model of work, but we never try the German, because we don't want to cede any real control to workers. Supposedly it's a great mystery why Germans keep investing in manufacturing and even prospering, despite the claims that the German education system is broken (OK, it needs help) and they aren't spending enough on research (OK, they aren't). But they're doing something right. What is distinctive about Germany is the privileged position the worker has within the firm. And we must look to that privileged position of the worker to explain how our own middle-class way of life can survive. Putting more money into education is a waste of effort. Putting more money into basic research is a waste of effort. We already spend enough. In fact, we have every factor of production going for us: We have more land, more labor, more capital and higher levels of formal education. But with our flexible labor markets, we cannot develop the human capital or knowledge needed to wean ourselves away from turning out crap. In global competition, the United States has almost every comparative advantage over Germany, but the one great comparative advantage Germany still has over us is that it is a social democracy. Yes, I admit Germany has its problems. But we're losing our middle class, and our problems are even worse.
(Link to Complete Article Here)