The political domination of Social Democrats in Denmark and Sweden beginning in the 1930s was stabilized by the absence of intense opposition by capital to reformist programs aggressively opposed by business and the Right elsewhere in the world. This quiescence was not a symptom of weakness or dependency; rather, it was a product of a class-intersecting, cross-class alliance behind institutions of centralized industrial relations that served mutual interests of sectoral groupings dominating both union and employer confederations. Well-organized and militant, and backed by Social Democrats, employers in the two countries used offensive multi-industry lockouts to force centralization on reluctant unions. Analysis of these cross-class alliances and their pay-distributional objectives is used to challenge a widely held view that centralization and Social Democratic electoral strength are sources of power against capital. It also occasions a reassessment of conventional understandings of farmer-labor coalitions and the decline of industrial conflict in Scandinavia in the 1930s. According to the alternative view presented here, capital was included rather than excluded from these cross-class alliances, and industrial conflict subsided dramatically in part because employers achieved politically what they had previously tried to achieve with the lockout.
Transformed patterns of labor market governance occupy a central place in the study of contemporary West European political economies. Here, detailed analysis of the dramatic decentralization of wage bargaining in Sweden identifies organized employers, especially engineering employers, as the decisive agents of institutional change. We argue that the employer offensive should be understood as a response to a shift in power within old wage-bargaining institutions, introducing invasive regulation of firm-level pay practices and, at the same time, as a consequence of new flexibility-centered production strategies, giving rise to demands for more firm-level autonomy in wage bargaining. The exceptional features of the old Swedish bargaining and the particular needs of different sectors come into play as we seek to explain the mixed pattern of wage-bargaining changes across Western Europe.
Challenges the conventional wisdom that welfare state builders take their cues solely from labor and other progressive interests. It argues instead that pragmatic social reformers in the U.S. and Sweden looked for support from above as well as below, taking into account capitalists’ interests and preferences in the political process. Legislation associated with the American New Deal and Swedish social democracy was built, consequently, on cross‐class alliances of interest. Capitalists in both countries appreciated the regulatory impact of reformist social and labor legislation. Their interests in such legislation derived from their distinct systems of labor market governance. Thus, new theory and historical evidence in this book illuminate the political conditions for greater equality and security in capitalist societies.
Current wisdom about the American welfare state's laggard status among advanced industrial societies, by attributing it to the weakness of the Left and organized labor, poses a historical puzzle. In the 1930s, the United States experienced a dramatically progressive turn in social policy-making. New Deal Democrats, dependent on financing from capitalists, passed landmark social insurance reforms without backing from a well-organized and electorally successful labor movement like those in Europe, especially Scandinavia. Sweden, by contrast, with the world's strongest Social Democratic labor movement, did not pass important social insurance legislation until the following two decades.
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