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Trade unions as political actors

Streeck, Wolfgang; Hassel, Anke
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Streeck, W., & Hassel, A. (2003). Trade unions as political actors. In J. T. Addison, & C. Schnabel (Eds.), International
handbook of trade unions (pp. 335-365). Cheltenham et al.: Elgar. https://nbn-resolving.org/urn:nbn:de:0168-
ssoar-195102
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334 in te rn a tio n a l handbook o f trade unions
B ar g a i n in g : E v idenc e from British C o m p a n i e s a n d E s t a b l i s h m e n t ’, In d u s tr ia l a n d L a b o r

R e la tio n s R eview , 52 (1), 45 63.
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U n i o n s a n d the E c o n o m i c P e r f o r m a n c e o f B ra zili an E s t a b l i s h m e n t s ’, m i m e o , U n iv e rs ity o f
S a o Paulo.
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In d u s tr ia l R e la tio n s in T ra n sitio n , A l d e r s h o t : D a r t m o u t h P u b li s h in g C o m p a n y .
M o d i g l i a n i , F r a n k a n d M a r c u s M il le r (1958), ‘T h e C o s t o f C a p i t a l , C o r p o r a t i o n F in a n ce a n d
th e T h e o r y o f In v estm en t’, A m e r ic a n E c o n o m ic R eview , 48 (3), 261 297.
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o f N C M a c h i n e T o o l s ’, B ritish J o u rn a l o f In d u s tr ia l R e la tio n s, 29 (2), 305 .312.
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a n d In te r n a tio n a l E c o n o m ic s, 3 (3), 40 3 423.
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E uropea n E c o n o m ic R eview , 38 (3 5), 195 210.
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195 226.
10 Trade unions as political actors
Wolfgang Streeck and Anke Hasset
1. Introduction
M o d e rn tr a d e u n io n s act in two arenas: the state an d politics on the one
h an d , an d the la b o u r m a rk e t an d collective b arg a in in g on the other. T h e
relative im p o r ta n c e o f their ec o n o m ic an d political activities differs
between co u n tries a n d world regions, as well as historically a n d between
types o f unions. So d o the way an d the extent to w hich union action in the
two are n a s is c o o rdina ted.
T h e d o m in a n t kind o f tr a d e union as it em erged from the second po stw a r
settlement after 1945 recognizes the prim acy o f the liberal-dem ocratic state
and o f p a rlia m e n ta ry dem ocracy, ju st as it accepts private pro p erty an d the
principal rules o f a socially e m bedde d a n d regulated m a rk e t economy.
M o st u nions after 1945 no longer claim ed a right o r reserved the o p tio n to
overthrow the govern m e n t o f the slate thro ugh a political strike. In this they
paid tribute to the su pe rior legitimacy o f free elections, as c o m p a r e d to
‘direct a c tio n ’ o f the organized w orking class. T oday m o re o r less explicit
c o n stitutional law m akes it illegal for unions in m ost liberal dem ocracies to
call a strike in o rd e r to put pressure on the elected p arliam ent, an d m ost
trad e un ions have accepted this as legitimate. In return liberal d em ocratic
states allow unions within the limits o f usually com plex legal rules to
strike in the context o f disputes with em ployers and in pursu it o f collective
agreem ents on wages and w orking conditions.
In the n in eteenth century, syndicalist tra d itio n s o f the trad e u n io n m o v e
m e n t aim ed at replacing the em erging n atio n al state with directly elected
councils o f workers, called sovjels in Russian an d R a le in G e r m a n .
A n archo-syn dic alist unions, which in c ou ntries like Spain survived into the
tw entieth century, p u rsu ed direct d e m o c ra c y o f p ro d u ce rs as an alternative
to b o th the b u rea u cratic territorial state a n d the capitalist m a rk e t economy.
Such projects, however, c a m e to n a u g h t an d were eventually a b a n d o n e d in
exchange for the legal a n d co n s titu tio n a l recognition o f collective b a r g a in
ing an d rights for u n io n s to a c t as o rganized interest g ro u p s within liberal
dem ocracy. W hile m a n y u n io n s still keep a distanc e from ‘bourgeois
d e m o c r a c y ’ an d claim for themselves a special political status above that o f
a m ere lobbying g roup, this m ainly rcllects the m e m o r y o f the class society
o f the past in which the d o m i n a n t political cleavage was that between
capital an d labour.
335
336 International handbook o f trade unions
Well into the 1980s a n d 1990s, E u r o p e a n u n io n s in p a r ti c u la r la u n c h e d

or were involved in political c a m p a ig n s o n a varie ty o f m a tte r s n o t
directly related to their m e m b e r s ’ e c o n o m ic interests, such as in te r n a
tional pea ce o r free a b o r tio n . In this th e y drew o n a b r o a d c o n c e p t o f
w o rk e r interests in f o rm e d by tr a d i tio n a l visions o f class conflict a n d by a
syndicalist sense o f rivalry w ith th e state over th e legitim ate r e p r e s e n ta
tion o f w orkers, n o t ju s t as w orkers but also as citizens. Especially in
Europe, u n io n s c o n tin u e d for a long tim e to be ex pected by th e ir m e m b e r s
a n d officials, a n d also by intellectuals a n d pub lic o p in io n , to be le ad e rs in
a gen e ral m o v e m e n t for social progress, far bey o n d e c o n o m ic m a tte rs in
a n a r r o w sense. To a n ex ten t this is still th e ease a n d u n io n s often find it
difficult to reject e x p e c ta tio n s o f this sort. N evertheless, m o s t u n io n s have
in recent d ec ad e s increasingly c o n c e n t ra te d th e ir political activities on
objectives related to th o se p u r s u e d in collective b arg a in in g , such as
general e c o n o m ic policy, in d u s tria l a n d la b o u r m a r k e t policy, the public
pro v isio n o f e c o n o m ic in f ra stru c tu re , inc lu d in g tr a in in g a n d e d u c a tio n ,
social w elfare policy a n d the ‘social w a g e ’, a n d n o t least the legal f r a m e
w o rk for collective b arg a in in g , w o rk p la c e re p re s e n ta tio n , a n d tr a d e
un io n is m in general.
A s political ac to rs w ithin the co n s titu tio n a l fram ew ork o f liberal d e m o c
racy trad e u nio ns can use various ch a n n els o f influence. T h e m o s t i m p o r
ta n t o f these are still u n io n s ’ tra d itio n a l relations to political parties. In all
d em o cratic c oun tries u nions are in so m e form o f alliance with a m a jo r
p a rty o f the Left o r the Centre-L eft, such as the S P D in G erm a n y , the
L a b o u r P a rty in B ritain, o r the D e m o c r a tic Party in the U nited States.
O ften such relations go b ack to c o m m o n origins in the nin e tee n th or tw e n
tieth centuries, in the co ntext o f a l a b o u r m o v e m e n t’ organized in a p o lit
ical an d a n e c o n o m ic wing. Similar relations so m etim es exist w ith C a tholic
parties o f the C e n tre-R ig h t. In co u n tries w here collective b arg a in in g is less
firmly established, o r a purely ec o n o m ic p u r s u it o f m e m b e r interests is for
o th e r reasons less prom ising, u n io n s m ay be d o m in a te d by allied parties,
like in Italy o r France. Mostly, however, the relationship is m o re b alanced
a n d u nions m ay exercise consid erable influence over their political allies,
serving as a recruiting g r o u n d for p a rty officials, c o n trib u tin g m o n e y to
fund election c a m p a ig n s or cover the c u r r e n t costs o f p a rty o rg anization,
a n d m obilizing their m e m b ers to vote for the p a r ty in general elections.
U n io n s m a y increase their political clo u t if they can credibly threa ten to
shift their s u p p o r t to a c o m p e tin g party, for exam p le from a social-
de m o c ra tic to a centre-right party. This, however, requires n o t ju s t a high
degree o f political an d ideological in d e p en d e n ce b u t also a suitable politi
cal o p p o r tu n ity structure. While the G e r m a n D G B m ay som etim es ally
itself with the C h ristia n - D e m o c ra tic P arty if the Social D e m o c r a ts disre
Trade unions as p o litica l actors 337
g a rd its d e m a n d s, the British T U C has no o th e r p a r ty th a n L a b o u r to turn

to as the British Conservatives will n o t deal w ith them .
I m p o r t a n t sources o f political stren gth o f u n io n s are p a r a s ta te public
in stitutions o f fu nctional rep resentation th a t include u nions in their
g o vern a nce structures. E xam ples are social security o r la b o u r m a rk e t policy
funds u n d e r the shared con tro l o f unions, em p loyers an d , in s om e cases, the
state. Even w here such funds are governed by law, they enable unions to
influence the im p le m e n ta tio n o f public policies. T h e y also olfer e m p lo y
m e n t o p p o r tu n itie s for u n io n activists a n d o p p o r tu n itie s for m e m b e r sh ip
recruitm ent. G o v e r n m e n ts try ing to control the political po w er o f u n ions
o r to retaliate for u nions not s u p p o r tin g their policy m ay som e tim es u n d e r
ta ke to elim inate functional representation a n d replace it w ith state control.
M o st ec o n o m ists regard u n ions as e c o n o m ic actors, especially as la b o u r
m a rk e t m onopolists. Political scientists, by c o m p a r is o n , treat u n io n s as
interest groups, em ph asizin g their political activities an d their relations to
political parties. For in dustrial relations scholars, the political activities o f
u nions are an aspect, o f different i m p o r ta n c e in different countries, o f their
p a rticip a tio n in trip a rtite industrial rule m a kin g. H isto ric al-institutionalist
a p p ro a c h e s loo k at th e ways in which u n io n s evolved in o p p o sitio n to the
m o d e r n state a n d in alliance with political parties o f the w o rking class or
o f religious m inorities; p a s t origins are draw n u p o n to explain presen t
differences in u n io n s ’ political status an d political strategies. S tu d e n ts o f
n e o -c o rp o ra tism co n s id e r u n io n s as institutionalized interest g ro u p s with
m o r e o r less c o rp o ra tist org an iz atio n al ch aracteristics a n d acting m o r e or
less in c o n c ert with the gov ern m e n t; to th e m industrial relations is one
are n a a m o n g o th e rs w here selected interest org an iz atio n s are in s titu tio n a l
ized a n d en d o w e d w ith special rights a n d obligations by the state. T heorists
o f collective action m a k e little difference between political a n d ec o n o m ic
activities as in either case, org an iz atio n s m u s t llnd ways o f offering outside
in d u c e m e n ts to rational individuals to overcom e inherent free-rider p r o b
lems.
2. H istorical origins o f union political behaviour

U nion political b e ha viour to d a y is sh a p ed by th e econom ic, political and
legal c o n d itio n s in w hich u n io n s first organized (Streeck, 1993a). W h e th e r
unions bec am e reform ist o r radical d ep e n d e d on two factors: ‘first the
n a tu re o f the social class system before ind ustrialization ; second the way
e c o n o m ic a n d political elites resp o n d e d to the d e m a n d s o f w orkers for the
right to p articipa te in the polity an d e c o n o m y ’ (Lipset, 1982, p. 1). M o d e r n
unions evolved in sym biosis with th e nation-state, which first co n tested an d
later pro tected their right to organize. Liberal an d in te rv entionist state t r a
ditions, c o n d itio n e d in p a r t by the time a n d pace o f in du strialization,
shaped the organ iz atio n al I'orm o f trad e u nions as well as their relationship
to political parties. Early p attern s o f u nion involvem ent in politics, as dis
tinguished from collective barg a in in g with employers, n o t only affected the
extent to which natio n al u n io n s achieved con trol over their local an d sec
toral con stituents, b u t also prefigured the eventual relation ship between
industrial relations an d state social policy in th e c o n s titu tio n o f m a tu re
nation-states.
M o re specifically, in liberal enviro n m en ts where the general extension o f
the right to vote preceded o r coincided with the onset o f industrializatio n,
u nions rem ained in d e p e n d e n t from political parties a n d hostile to political
ideologies. T his w ent to g e th er with organ iz atio n al f ra g m e n ta tio n an d an
overw helm ing preference for in dustrial over political action. O ver tim e in
such countries, u nio n political ind ep en d e n ce evolved in to a p a tte rn o f pri
m arily v o lu n ta r y an d particularistic, as o p p o se d to sta tu to r y an d universa-
listic, regulation o f e m p lo y m e n t cond itio ns, ac c o m p a n ie d by a pattern o f
state absten tio n from social policy o r interven tion in la b o u r law. By c o m
parison, in states th a t too k an active an d , usually, a u th o r i ta r ia n role in the
industrialization o f their societies, u n io n s typically h a d to struggle for u n i
versal suffrage as a p r e c o n d itio n for the ac h ievem ent o f effective o rg an iz
ing rights; this often resulted in their s u b o rd in a tio n to a n allied political
party, as well as in their politicization an d centralization. W ith im proved
ec o n o m ic an d legal o p p o r tu n itie s for collective b argaining, political unions
o f this sort m o re o r less m a n ag e d to escape from p a rty tutelage while n o t
losing their capacities for political action an d centralized c o o rd in a tio n .
W hen u n ion-frien dly political parties were voted into gov ern m e n t, such
u nions h a d the o p p o r tu n ity to c o m b in e e n c o m p a ssin g collective b a r g a in
ing with a political quest for a universalistic social policy, engaging in
industrial an d political action sim ultan eously a n d deploy ing o n e in s u p p o r t
of the other. For example, ju st as u n io n s could use their influence on social
policy to im prove their positio n in relation to em ployers in collective b a r
gaining, they could draw on their role in collective b arg a in in g to defend
their in d epen dence from allied parties an d , by extension, the state. In p a r
ticular, j o i n t u n d e rsta n d in g s with em p loyers o n the ran g e o f issues to be
regulated ‘v o lu n ta rily ’ by collective ag re em e n t ra th e r th a n by g o v ern m e n t
statute, c o n s titu ted an im p o r ta n t resource for political u nions d efending
their ju risd ic tio n against state intervention.
In early industrializing c o untries w ith a relatively liberal political system,
repression o f unionism was weak a n d u n io n o rgan izing rights were c o m
paratively easily gained (Bartolini, 2000, p. 244ff; C ro u ch , 1993). T h e first
British u n io n s were occ u p atio n al associations o f a highly skilled la bour
aristo crac y (‘craft u n io n s ’). Being able to achieve their ec o n o m ic objectives
on their ow n by relying o n their s tro n g position in the m arket, u nions o f
this sort had no d e m a n d s on the state a p a r t from n o n -inle rferenc c in their

o rganizing activities, which were typically based on the closed s h o p and
included control over skill fo rm ation. In particular, they had little need for
g o v e rn m e n t social policy as they preferred to negotiate their wages an d
benefits directly with their em p loyers an d were p ro sp e ro u s e n o u g h to build
their ow n social in surance funds on a v o lu n ta ry basis. G en e ra l u n io n s o f
unskilled ‘m ass w o rk e rs’ em erged m uch later an d a lth o u g h they c o m
m a n d e d considerably less m a rk e t power, they h ad to o rganize an d act u nder
political, institu tio n al a n d ideological c o n d itio n s that for a long time c o n
tinued to be con tro lled by their predecessors.
C ra ft u n io n s originally had no need for political ac tio n as liberal s u p p o r t
for u n io n organizing rights was all they required from the state. W h e n later,
a fter long hesitation, British u n io n s did resolve to engage in c o n tin u o u s
political activity, they set u p the L a b o u r P arty as their extended a r m fun ded
an d formally controlled by the T rades U nio n C ong ress (von Beyme, 1977).
As predicted by the o p p o n e n t s o f direct u nio n en g a g em en t with polities,
u n io n s often tu rn e d o u t unable to m a k e the p a r lia m e n ta r y L a b o u r Party
follow its directions. G iven th a t British u n io n s never developed a co h e ren t
socialist ideology, however, this did n o t m a tte r m u c h as long as L a b o u r
r em a ined c o m m itte d to free collective b arg a in in g an d did not stray from a
core w elfare-state agenda. M oreover, their low degree o f politicization p r o
tected British u n io n s from the political divisions that tore a p a r t u nion
m ov e m ents on the E u ro p e a n C o n tin en t.
In the U S A , by c o m p a r is o n , cra ft u n io n s were even m o re conservative
an d m a in ta in e d their d o m in a n c e over the union m o v e m e n t even longer
th a n in Britain (Lipset and M arks, 2000; F rie d m a n n , 1998; K atz nelson an d
Z olberg, 1986). Well into the 1920s the m a in str e a m o f A m eric an trad e
unio nism rem ained hostile to state in terventio n in the economy, n o t to
m e n tio n a sta tu to r y social policy securing benefits for w orkers th a t well-
o rganized c r a ft u n io n s were able to secure on their own th ro u g h collective
bargaining . T h e unskilled u n io n s o f the C I O th a t grew in strength only
u n d e r the N ew D eal in the 1930s soon turn ed into business u nions a n d after
the S econd World W ar at the latest, also relied on non-political collective
b arg a in in g as their principal m o d e o f action. A slightly different ap p ro a c h
was taken only by the u n io n o f a u to m o b ile w orkers (UAW ) which, with
little success, held o n to its d e m a n d for a universalistic social policy o f the
federal g o vernm ent, in p a r tic u la r w ith respect to the provision o f health
insurance. T h e only lasting result o f the N ew Deal was the close rela tio n
ship it established between A m e ric a n trad e u nions a n d the D e m o c ra tic
P arty o f the then President, F ra n k lin D. Roosevelt.
In C o n tin e n ta l E u ro p e the re la tion ship between u n io n s a n d political
parties, an d su bse quen tly between collective b arg a in in g an d social policy,
was q uite different from the A n g lo -A m e ric a n world (K endall, 1975).

Sweden is the m a in ex am ple o f a c o u n try w here delayed industrial devel
o p m e n t, with the associated lack o f o p p o r tu n itie s for a successful pu rsu it
o f w orker interest th ro u g h the m arket, resulted in u n io n s being f o u n d ed by
a political p a rty o f the Left rath e r th a n , like in Britain, th e o th e r way
a ro u n d . W hile in Sweden ju s t as in Britain, u nions were c o r p o r a te m e m b ers
o f the political p a r ty o f the w o rking class, in sta rk c o n tra s t to Britain this
m e a n t su b o r d in a tio n o f th e fo rm e r to the latter. It was only after collective
b a rga inin g had becom e firmly established in the late 1930s, u n d e r the
S a lts jo b a d e n n a tio n al agreem ent w ith the employers, th a t Swedish u n io n s
gained a u t o n o m y from the p rim a cy o f the p a r ty inside the la b o u r m ove
ment. T h is in tu rn c am e afte r the Socialist P arty h ad becom e the hegem onic
force o f Swedish politics w hen in the early 1930s it b roke a wildcat strike o f
co n s tru c tio n w orkers th a t th reatened to u n d e r m in e the g o v e r n m e n t’s refla
tion p rogra m m e . C o n tin u in g Socialist d o m in a n c e w ithin Swedish u nions
resulted in a political division o f the Swedish u nion m o v e m en t as white-
collar w orkers refused to jo in the Socialist blue-collar u n io n s an d set up
their own federation after 1945 (Fulcher, 1991).
Political unionism proved even m o r e divisive in co u n tries where, unlike
Sweden, n atio n al politics included a strong C a th o lic element o r where the
F irst World W ar led to a split in the political p a r ty o f the w o rk in g class. In
Italy an d France, Socialist, C o m m u n is t an d C a th o lic parties found ed their
ow n unions, setting in m o tio n p ro tra c te d conflicts betw een a n d a m o n g
unions a n d parties over trad e u n io n unity, w ith u n io n s periodically jo in in g
to ge th er a n d then again b re a k in g a p a r t (F rie d m a n n , 1998; E bbingh aus,
1995; Valenzuela, 1994), Politicization a n d party-political control o f trad e
unions w as favoured in Italy by slow in dustrialization an d by w eak in stitu
tions o f collective b arg a in in g and a d o m in a n t role o f the n atio n al state in
the economy, with stro n g clienlelistism a n d centralism . To escape instru -
m e ntaliza tion for party-political purposes, for exam ple in elections o r in
conflicts over the co m p o sitio n o f th e n a tio n a l g o v ern m e nt, Italian u nions
m a d e several a tte m p ts after 1945 to m erge across political divisions.
Im m ediately after the w ar n a tio n al federations were fou nded in Italy and
F ra n ce that included the form er Socialist, C o m m u n is t a n d C a th o lic unions.
But these soon broke up, m ainly u n d e r A m eric an pressure aim ed at isolat
ing the C o m m u n is ts an d en d in g their alleged co n tro l over the united u n io n
m ove m ent. In Italy, several a tte m p ts at reun itin g the u n ion m o v e m e n t were
m a d e b eginnin g in the 1970s, b u t always tailed earlier o r later w hen p a rty
strategists utilized industrial relations as a n a d d itio n a l political are na, or
w hen u n io n s required political p a tro n a g e to score a success in collective
bargaining. In France, the j o in t effects o f syndicalist an d liberal-republican
political tra d itio n s an d weak la b o u r m a rk e t in stitutions created a sim ilar
1'raile unions as p o litica l actors 341
effect o f d o m in a n c e over u nions by political parties - in p a rtic u la r the

C o m m u n is t p a r ty a n d o f u n io n p o la rization. In c o n tra s t to Italy, u nions
did n o t benefit fro m th e social unrest o f the late 1960s, but: lost m u ch o f
their im p o r ta n c e a n d most: o f their m e m b e rs in s u b se q u e n t years.
Political unio nism to o k a different path in G e r m a n y w here industrial
d ev e lo p m e n t was faster th a n in Sweden, Italy a n d F ra n c e an d where p o lit
ical repression hit the w orking-class p a r ty m o r e th a n the u n io n s
(M o m m s e n a n d H u su n g , 1985). A lready early in the tw entieth century,
Socialist u nions were form ally conc ede d strategic in d e p en d e n ce by the
leadership o f the S ocia l-D e m o cra tic Party. A c o n trib u tin g fac to r m ay have
been the early existence o f a strong C a th o lic u n io n m o v e m e n t associated
w ith the C e n tre Party. Like Socialists, C a tho lics were suspected by the
B ism arckian state o f inte rn atio n a list loyalties, which m a d e th e m , loo, a
target o f state repression. A fter the F irst W orld War, the S o cia l-D e m o cra tic
an d the C e n tre Parties to g e th er becam e the pillars o f the W eim ar R epublic
a n d the u n ions associated w ith th em coexisted m o r e or less peacefully. A
C o m m u n is t u n io n w ing em erged inside the Socialist, o r G e n e ra l, u n io n s
b u t never achieved political relevance. T h e N azis suppressed all u n io n s in
1933. A fte r 1945, Socialist a n d C a th o lic u n io n s set aside their differences
an d f o u n d ed the D G B as an in d e p e n d e n t E in lm tsg ew erksch a ft n o t o r g a n
izationally affiliated to any political party.
T h a t the D G B , unlike the C G 1 L in Italy o r the C G T in France, rem ained
united m ay be explained by the insignificance o f its C o m m u n is t elem ent,
d u e to the con fin e m en t o f G e r m a n C o m m u n is m in the second p o stw a r
G e r m a n state, the D D R . F o rm a l party-political independence, however,
d oes n o t prevent the D G B , from m a in ta in in g a p articularly cordial rela
tio nsh ip w ith the S o cia l-D e m o cra tic P a rty (SP D ). A t the sam e time,
however, it allows it to m a n o e u v r e between the S P D a n d the C h ristian -
D e m o c ra tic U n io n ( C D U /C S U ) , w hich grew o u t o f the fo rm e r C e n tre
P arty with its trad itio n al p r o -u n io n element. W hile the great m a jo r ity o f
their officials sym p a thiz e with the S P D a n d presu m ably carry its m e m b e r
ship card, G e r m a n ind u stria l unions try to ensure th a t at least on e m e m b e r
o f their n a tio n al executive is a m e m b e r o r c o n fid a n t o f the CD LJ/CSU .
T h ere are also so m e u n io n officials th a t are m e m b e rs o f the post-
C o m m u n is t PDS, which afte r G e r m a n unity ab s o rb e d the few
C o m m u n is t elem ents o f West G e r m a n u n io n s before 1989.
In Belgium, the N e th e r la n d s a n d Sw itzerland, the la b o u r capital cleav
age was cut across by conflicts between ch u rc h an d state. In a battle over
political con tro l, two c o m p e tin g sets o f w orker org an iz atio n s an d social
milieus developed, one u n d e r the le adership o f the p a rty in the Socialist
m o v e m en t a n d on e u n d e r th e co n tro l o f religious le aders in the C h ristian
w o rk e rs’ m o v e m e n t (E b b in g h au s, 1995, p. 83). In c o n tra s t to A u stria and
G erm a n y , in the ‘c o n s o c ia lio n a F c o u n tr ie s religious clcavages bccam e in sti

tu tionalized. C o m p lex p a r t y - u n i o n relations c o m b in in g religious and
political cleavages split the trad e union as well as the p a rty systems an d gave
rise to co m plicated co n sen su s-o rien tate d political arrangem en ts.
In J a p a n , b o th unions an d working-class political parties were outlaw ed
for a lo n g time u n d e r th e a u t h o r i ta r ia n d e ve lop m e nta l state o f the decades
after the IS/Ieiji Restoration . P a rlia m e n ta ry d em o c ra c y a n d free collective
b arg a in in g becam e safely institutionalized only after 1945. U nio n iz atio n
proceeded rapidly in the im m edia te p o stw a r period a n d in 1947, the
Socialist P arty to o k over the n ation al g o vernm ent, only to be removed from
office sh ortly th e re afte r by the A m eric an m ilitary c o m m a n d , o n the eve o f
a general strike. S ubsequently the natio n al tr a d e u n ion co n fe d eratio n
divided a lo n g political lines a n d n a tio n al u n io n ism for m a n y decades
rem ained a site o f a rc an e ideological disputes between rapidly c h a n g in g
factions o f the radical Left, u nrelated to the realities o f the workplace.
T here em ployers an d the g o v ern m e n t succeeded in establishing the princi
ple o f enterprise unionism . While this resp o n d e d to strong interests o f
w orkers to have a say at their w orkplace, especially w ith respect to the p r o
tection o f ‘lifetime’ em p lo y m e n t, it also de-politicized tr a d e union ism and
c u t oil’the experience o f w orkers at the w o rkplac e from the ideological d is
putes between natio n al trad e u nion centres, which were m ainly on m a tte rs
o f w ar an d peace a n d on the desirability o f a fast tran sitio n to
C o m m u n ism . N a tio n a l trade u n io n centres c o n tin u ed to reconfigure
rapidly th ro u g h m ost o f the p o s tw a r years, w ith o u t visible im p a c t on in d u s
trial relations at the workplace. E n te rprise u n io n is m a n d the practical irrel
evance o f their politicized natio n al c o n fe d eratio n s c o rre sp o n d e d to the
absence o f a public welfare state in the Ja p an e se political e c o n o m y a n d its
internalizatio n into the industrial relations an d the em p lo y m e n t policy o f
large com panies. W hile Ja p an e se u n io n s were often effective in represe nt
ing their m e m b e r s at the workplace, there was for a long tim e little o p p o r
tunity for them for political actio n in s u p p o r t o f their activities in collective
b argaining, n o t to speak o f tripa rtite political exchange at nation al level
between unions, em ployers, a n d the g ov ernm en t. It was only in the 1980s
with the f o rm a tio n o f Rengo a new ‘m o d e r a te ’ tr a d e u n ion confederation
ideologically n o t c o m m itted to the Left that Ja p an e se industrial relations,
focused as they are on the w o rk plac e an d the enterprise, becam e to som e
extent institutionally reconnected to politics a n d political activities.
In conclusion, the relationship between trad e u nio ns an d political
parties, a n d the political are n a as a whole, can be classified by two s tr u c tu
ral d im e n sion s that evolved in the course o f n atio n -b u ild in g a n d state for
m a tio n in the n in eteenth an d tw entieth century: the degree o f political
unity a n d the degree o f politization o f tr a d e u n io n s (see F igure 10.1).
"d
OJ
N Polarized
Social-democraiic
£
S, NO
Segmented
B, NL, SW
Unified
D, A
CtJ
o
Laborist
o
O, GB, 1RL, USA
O
2
fragmented Unified
Source: O w n c o m p i l a t i o n b a s e d o n E b b i n g h a u s (1995); V a len z u e la (1994); v on B eym e
(1977).
Figure 1 0 .1 Union -party relations
Political unity exists in c ountries w here political tli(Terences w ithin tr a d e

u nion s have n o t led to o rg an iz atio n al fra g m entatio n. T h e degree o f polit-
ization describes the extent to which trade u nio ns are active in the political
arena. Politically unified trad e u nions are the less politicized the m ore d o m
in a n t they historically were in relation to political parties. D o m in a n t
unions tend to be politically unified but fra gm ented a lo n g ind ustrial, o c c u
pational or enterprise lines. Politically fra gm ented trad e unions are always
highly politicized. T h e m ore politicized tr a d e u n io n s arc, w h eth e r p o liti
cally fra gm en ted o r not, the m o re en c o m p a ssin g they are in industrial
terms.
U n io n p a rty relationships have rem ained rem a rk a b ly stable since the
Second World War. Political cleavages were o rganizationally frozen early in
b o th political p a rty an d trad e u n io n systems. Still, there are lo n g -te rm te n
dencies tow ards unification o f unions a n d m u tu a l in de pende nce between
parties a n d unions. Unification was m o st p ro n o u n ce d in G e r m a n y an d
A ustria, where the entire tr a d e u n io n s tru ctu re was reo rg anized im m ed i

ately after the war. Religious an d political s e g m en tatio n lost in im p o r ta n c e
in the N eth e rlan d s, Sw itzerland a n d Italy, less so in F ra n ce a n d Belgium.
U n io n party links have generally bec o m e w eaker over time, with trade
u nion s a n d political parties r e sp o n d in g to the evolution o f their respective
industrial an d political environm ents.
3. Unions in the political process

T ra de u n io n s m ay achieve political influence by co nverting ind u stria l into
political pow er (Pizzorno, 1978). P olitical exchange o f this so rt occurs
where centralized un ions c o m m a n d strong b a rg a in in g power; w here the
o u tc o m e s o f collective b arg a in in g are decisive for m a c r o e c o n o m ic p erfo r
mance, in p a rtic u la r w ith respect to m o n e ta r y stability an d e m ploym e nt;
a n d where the political survival o f the g o v e rn m e n t d e p e n d s on such p erfo r
mance. Also, u n io n s m ay insert themselves in the political process th ro u g h
privileged links with a n allied political party, w hich may enable th e m to
achieve their indu strial objectives m o r e effectively a n d efficiently th ro u g h
political instead o f industrial means. W here such links d o n o t exist o r have
a tten u a te d , u nions m u st try to achieve political influence th ro u g h electoral
s u p p o r t for the p a rty m o s t s y m p a th e tic to their dem ands. T h ird , union
political pow er m ay derive from institutionalized collective rep resentation
on bip a rtite o r trip a rtite p a ra sta te o r parafiscal agencies, such as la b o u r
m a rk e t o r social security boards. Presence o n such forurns o f fu n c tio n a l rep
resentation m ay enable u n io n s to co n tro l the im p le m e n ta tio n o f public p o l
icies o r even veto ch anges in g overnm en t policy. F u n c tio n a l representatio n
is less form alized in regional, sectoral o r in te rn atio n a l policy n etw ork s th at
often include u nions to e n h a n c e their legitimacy o r m obilize expertise.
Finally, u n ions m ay like o th e r interest g ro u p s lobby p a rlia m e n t an d gov ern
m ent in the p re p a ra tio n o f legislation a n d policy decisions; here it is i m p o r
ta n t for unions, like lobbyists in general, to provide law m ak ers with
technical in fo rm ation a n d , if necessary, influence public o p in io n in favour
o f their preferred policies.
P olitical exchange
Until the end o f the 1970s, economic policy in p ostw ar dem ocratic capitalism
was conducted on the premise that social stability and the electoral fortunes
o f the governm ent depended on politically guaranteed full employment.
Keynesian m ethods o f m acroeconom ic m anag em ent, however, increased the
bargaining power o f unions as these no longer needed to worry a b o u t un em
ployment resulting from excessive wage settlements. Rising worker militancy
fuelled by high growth, inflation and secure em ploym ent prospects made
governments dep endent on unions willing to act as ‘m anagers o f industrial
disc o n te n t’ (Flanders, 1970) and help them restore m o ne tary stability w ithout
having lo retreat from their com m itm ent to full em ploym ent. In this situation,
centralized and broadly based encom passing unions (Olson, 1982) were in a
position to offer governments wage m oderation in exchange for favourable
social policies, such as higher pensions, or for improved institutional c o n d i
tions for unions in the industrial relations system, like extended participation
rights at the workplace or centralization o f collective bargaining.
C onve rsion o f industrial into political po w er u n d e r w h a t c a m e to be
referred to as n e o - c o rp o r a tis t incom es policies enabled u nions to get a wide
variety o f concessions from governm ents, in cluding industrial, regional
and e d u c atio n al policy progra m m e s, a n d to wield extensive pow er over
public policy ( L e h m b r u c h , 1984; Schmitter, 1977; H eadey, 1970). But it
also required u nions to discipline their m e m b e rs a n d m a k e them forgo
s h o r t- te r m for lo n g -te rm benefits. To the extent th a t m e m b e r m ilitancy
reflected collective a n d sym bolic as m u ch as individual an d m a teria l grie
vances, the tra n s f o r m a tio n o f direct action in political n eg o tiatio n s
involved a trad e -o ff o f expressive identities against in stru m e n ta l interests
(Pizzorno, 1978). U n io n s e n g a ging in n e o - c o rp o r a tis t political exchange
thus faced a d o u b le risk o f m e m b e r o p p o sitio n a n d u n co ntro lled m ilitancy
o n the o n e h a n d an d m e m b e r d e-m o tiv atio n an d apathy on the other. O n
the p a r t o f gov ern m e n t, the concessions offered to u n io n s in return for
wage m o d e ra tio n m ay in effect only have m ove d p ro b lem s in to the future,
via growing deficits in the public budget. A t the sam e time, while the price
paid by go v ern m e n ts for u n io n c o o p e r a tio n was often high, con tro l o f
union leaders over their rank-and-file rem ained te n u o u s at best a n d fre
qu en tly u nions tu rn ed out unable to deliver the wage m o d e ra tio n for w hich
they h ad collected political concessions.
'D em ocratic class struggle’ a n d p a rty linkages

C o r p o r a tis t political exchange in principle w orked also with conservative
parties, provided these were still c o m m itte d to the p o stw a r political o r t h o
doxy o f politically g u a ra n te e d full em p lo y m e n t. However, where as in
Scandinavia social-dem ocratic parties h ad achieved heg e m o n ic con tro l o f
the state, a n o t h e r conversion o f indu strial into political streng th o f trad e
u nion s becam e possible u n d e r which u n io n s could increasingly rely on
political m e an s to achieve their objectives. A ccording to K orpi (1983) this
explains why the m o s t successful trad e u n ions o f their tim e had the lowest
strike rates in the W estern w orld, especially in c o m p a r is o n to the U nited
States with its very intense industrial conflict. Sweden in p a r tic u la r was a
c o u n try where class conflict, far from having subsided o r ‘w ithered aw ay’,
had been tra n sp o s e d in to the political arena, w here it was possible to extend
the achievem ents o f the la b o u r m o ve m en t, not ju s t to union m em bers, but
to society as a whole. A s Swedish u nions tu rn e d into a p o p u la r m ovem ent

closely identified with Swedish society an d the Swedish people, they were
able to organiz e an u n m a tch e d 80 per cent o f the workforce.
In the 1960s and 1970s the ‘Swedish m o d e l’ seemed to o iler a generalizable
vision o f dem ocratic-socialist progress u n der a close alliance between p o w
erful unions and a hegem onic socialist party (Stephens, 1979). Subsequently,
however, trad itional u n io n - p a r ty links weakened even in Sweden, where an
im p o r ta n t con trib u tin g factor was the rise o f politically unaffiliated white-
collar unionism. In the U nited K in gdom after the failure o f the L ab our
governm ent u nder C allaghan in the 1979 ‘winter o f d isc o n te n t’, the L ab our
Party began to regard its political dependence on the T U C as an electoral
liability an d gradually extricated itself from it. In G e r m a n y in the 1990s, the
SPE) on several occasions distanced itself publicly from the unions, in the
belief th a t this would improve its electoral fortunes. Generally centre-left
political parties today take care not to a p p e a r as extended arm s o f trade
unions w hose m e m bership base is shrinking and whose policies are perceived
by a growing share o f the public as serving only u n ion members, sometimes
at the expense o f the rest o f society. Nevertheless, social-democratic parties
still require the votes o f the union constituency an d thus m ake considerable
efforts to gain u nion su pport, especially before elections an d d u rin g election
cam p aigns (Western, 1997; Taylor, 1993).
As so cial-dem o cratic parties m u st b ro a d e n their electoral appeal in a
society th a t is bec o m in g m o r e a n d m o r e heterogeneous, u n io n s can no
longer ta k e it for g ra n te d th a t they will necessarily a d o p t a n d ca rry o u t the
policies u nio ns prefer (Taylor, 1989). Increasingly, therefore, u nion s m ust
apply political pressure to m a k e social-dem ocratic parties take their in te r
ests into ac co u n t. Such pressure is likely to be m o s t effective if u n io n s can
credibly threaten to d ivert their s u p p o r t, an d the votes o f their m em bers, to
a c o m p e tin g party. In ad d itio n to the actu al existence o f such a party, this
d ep e n d s on the extent to which union m e m b e rs a n d c o n s titu e n ts follow the
r e c o m m e n d a tio n s o f their le aders w hen casting their votes. A s electorates
te nd to bec o m e increasingly volatile, neither p arties n o r u n io n leaders can
be certain to w h a t extent u nion s will in fact be able to d eliver th eir m em b ers'
votes; indications are th a t this capacity has been declining in recent years.
T h e situatio n is sim ilar for o th e r large organizations, such as church es or
sp o rts associations.
G ro w in g voter volatility increases the im p o r ta n c e o f c a m p a ig n c o n t r i b u
tions a n d financial s u p p o r t generally. D e p e n d in g on a c o u n t r y ’s c a m p a ig n
spen d in g laws, u n io n s may invest consid erable sum s o f m o n e y to ensure
that so cial-dem ocratic parties first s u p p o r t their policies a n d then win the
election. For example, in G e r m a n y the tr a d e union co n fe d eratio n D G B
m obilized an u n p rec ed en ted a m o u n t o f indirect c a m p a ig n c o n trib u tio n s
Trade unions as po litica l actors 347
d u rin g the election c a m p a ig n o f 1998, to extract from the. S P D a c o m m it

m e n t to u n d o certain la b o u r m a rk e t reform s passed by the last Kohl
g overnm ent an d to enable S ch ro d er to win the election, also with the
s u p p o r t o f the u nion vote. A sim ilar e/Fort was m a d e in 2002 to ensu re
S c h r ö d e r s re-election, after the Red G re e n g o v e rn m e n t h ad closed ran k s
with the u nions on la b o u r m arket a n d social security reform .
Functioned representation
In m a n y C o n tin e n t a l- E u r o p e a n co u n tries trad e u n ions an d em ployers are
represented on national ec o n o m ic policy councils, which were set u p in the
in te rw a r years o r afte r 1945, to provide for regular m eetings an d discus
sions betw een labour, business an d the g o v ern m e nt. F o r instance, the
N e th e rla n d s created a trip a rtite Social a n d E c o n o m ic C ouncil after the
Second W orld W a r an d sim ilar bodies exist in Belgium a n d A ustria. S om e
o f these have, usually narrow ly circum scribed, c o n s titu tio n a l rights to
advise the g o v e rn m e n t or the p a rlia m e n t on m a tte rs o f e c o n o m ic policy, or
to be h e a rd on c u r r e n t legislation. M oreover, tra d e unions, usually together
with em ployers a n d so m etim es also with the g o v ern m e n t, sit on the b o a r d s
o f a variety o f q u asi-pu blic o r paraliscal agencies a d m in isterin g la b o u r
m a rk e t policy or social in su ran c e p rog ram m es. In p a r t such agencies were
created at an early tim e w hen n atio n al states in c o rp o r a te d in their c o m p u l
sory social in su ra n c e p ro g ra m m e s the friendly societies a n d m u tu a l aid
funds founded for their m e m b ers by u n io n s a n d small business associations
in the n in e tee n th century. N o t to be p u sh e d aside, unions, som etim es s u p
ported by em ployers, insisted on being given a role in the a d m in istra tio n o f
the newly-created agencies, w hich in co u n tries like G e r m a n y subseq uently
c a m e u n d er the ‘se lf-g ove rnm e nt’ o f the ‘social p a r t n e r s ’. Bipartite a n d tri
partite bodies o f this kind em erged in p a r tic u la r in the so-called Bismarck
c ou ntries where social in su ra n c e was fu nded th ro u g h c o n trib u tio n s o f
w orkers a n d em p loyers rath e r th a n by general taxes, w ith the paraliscal
agencies collecting an d a d m in isterin g such c o n trib u tio n s p roviding for r e p
resentation o f th o se paying them .
A lth o u g h involvement in the ad m in istra tio n o f social security p r o
g ram m es som etim es offered u nio ns rich o p p o rtu n itie s for patronage, it is
questionable how m u c h political pow er unions derived from it. In coun tries
where public u n e m ploym e nt benefit is adm inistered by the unions, u n d e r the
so-called G h e n t system, they use this as a device for recruiting an d reta in
ing members. This indirectly co n trib u tes to u n ion pow er (E b binghaus, 2.002;
Rothstein, 1992). However, levels o f benefit an d c o n trib u tio n s are univer
sally fixed by law, an d unions and em ployers, far from having a veto, can
influence them only th ro u g h the legislature. T h e same, with ap p ro p ria te
modifications, seems to apply also to the national ec onom ic councils th at
348 International h andbook o f trade unions
have survived from the p o stw a r years, or to an institu tio n like the E co n o m ic
an d Social C o m m itte e o f the E u ro p e an U nion.
U nlike form al particip a tio n in stale councils or quasi-p u b lic agencies,
inform al inclusion o f unions in sectoral, regional an d inte rn atio n a l policy
n etw ork s seems to have bec o m e increasingly im p o r ta n t in recent years.
New form s o f governa nce below, w ithin a n d above the natio n al state
dep e n d on bringing to g e th er all conc ern ed parties to collect expertise,
provide for m u tu a l in fo rm atio n on policy preferences, an d increase as m uch
as possible the legitim acy o f join tly devised policies. R a th e r th a n conflict,
policy netw orks em phasize c o o p e r a tio n in the p u r su it o f c o m m o n objec
tives a n d the im p ro v e m en t o f collective in fra stru ctu re s that cultivate jo in t
co m p arativ e advantage. A lth o u g h policy netw o rk s have n o con stitu tio n
an d there are no form al rights to inclusion, in m o s t cases care is taken to
ensure that u n io n s participate, b o th to gain th e general s u p p o r t o f their
m e m b ers an d to tap their expertise with respect to industrial d evelo pm ent,
train in g an d skill fo rm a tio n , e m p lo y m e n t, la b o u r law', w ork o rganiz ation
an d the like ( M a r in a n d M ayntz, 1991).
L obbying
As the links between u nion s and centre-left political parties have becom e
m ore te nuous, a n d form alized fu n ction al re prese ntation tends to be p re
em pted by legislative activism an d state in terventio n, u nio ns trying to influ
ence political decisions seem to d e p e n d m o re th a n ever on classical
lo bbying o f p a rlia m e n t a n d g overn m ent. Especially in in te rn atio n a l envi
ronm ents, b u t also in n a tio n al politics, th e o p p o r tu n itie s for u n io n s to exer
cise political influence seem to be b e c o m in g sim ilar to those o f any o th e r
interest group, from farm ers to environm entalists. In m o s t countries,
unio ns have established p ro ce d u ra l rights to be h eard by p a r lia m e n ta r y
com m ittees a n d like b odies on im p e n d in g decisions close to their concerns;
som etim es th o se rights exceed th ose o f o th e r groups. Still, u nions used to
acting directly th ro u g h collective b arg a in in g o r th r o u g h political exchange
based on their b argain ing streng th , th ro u g h a closely related socialist party
within an e n c o m p a ssin g la b o u r m ove m ent, o r th ro u g h legally based fu n c
tional representation, m ay n o t be p a rticula rly g o o d at shaping legislation
from the outside or m a k in g their cause attractive to the general public.
Also, in m a n y co u n tries u nions n o t carry m u c h favour in p o stind ustrial
m ed ia politics. N o t least, u nions th a t have trad itio n ally relied on o rg a n iz
ing, m obilizing an d nego tiatin g skills m ay take tim e to build up a capacity
convincingly to present expert know ledge to b u rea u crats an d legislators,
an d a pleasant a p p e a ra n c e to the general public. H e re business firms and
business associations c o m m a n d considerable a d v a n ta g e over u n io n s in
their present co n dition .
4. Unions and economic policy

T ra de u n io n s em erged in conflict with the e c o n o m ic liberalism o f the n in e
te en th c e n tu ry as they tried to protect their m e m b e rs from the fluctuations
o f the m a rk e t economy. Partly in response to u n io n pressures, national
g o v ern m e n ts in the first h a lf o f the tw entieth ce n tu ry assum ed responsibil
ity for stabilizing the e c o n o m y a n d p r o m o tin g ec o n o m ic grow th an d
em p lo y m e n t. M oreover, in the First World War, g o v ern m e n ts intervened
deeply in n atio n al econom ies, only to discover th a t e c o n o m ic m obilization
an d the g o verna nce o f the w ar e c o n o m y required the c o lla b o ra tio n o f
u n io n leaders. In m a n y cou ntries these c a m e to be co -o p te d in p o sition s o f
q u asi-public authority. A lso enlisted soldiers h a d to be prom ised a b etter
life in a fairer society u p o n their retu rn from th e battlefields, w hich entailed
a c o m m itm e n t to lasting state in te rventio n in the economy.
T h e first p o stw a r settlem ent after 1918 involved concessions o f ‘in d u s
trial d e m o c r a c y ’ a n d the a c ce p ta n ce o f free collective b arg a in in g in m any
industrialized countries. However, n ational g o v ern m e n ts proved unable to
stabilize their econom ies w ith o u t ca using high u n em p lo y m e n t, an d in
m a n y co u n tries the G re a t D epression ended liberal d e m o c ra c y a n d free
trad e u n ionism a n d b r o u g h t a u t h o r i ta r ia n regim es into power. A new
la b o u r inclusive settlem ent based on a K eynesian full e m p lo y m e n t policy,
w hich first to o k sha p e in th e New Deal in the U nited States an d u n d e r the
British w ar cabinet, bec am e the c o rn e rs to n e o f the political e c o n o m y o f the
West after 1945. T h e d e m o c ra tic capitalism o f the ‘G o ld e n A g e ’ entailed
n o t only the legal recognition o f tra d e u nio ns an d the rise o f the m o d e rn
welfare state, b u t also the prom ise o f a n ec o n o m ic policy in line with the
f u n d a m e n ta l interest o f w orkers in full em ploym ent.
K eynesianism and the second p ost-w ar settlem en t

T he K eynesian revolution in ec o n o m ic th o u g h t held o u t the p ro spec t o f full
e m p lo y m e n t secured th ro u g h creation o f aggregate d e m a n d by public
authorities, rath e r th a n th ro u g h red u c tio n o f costs by private enterprises
u n d e r the pressure o f co m p etitio n . T h e K eynesian scenario, which was
based on the a s s u m p tio n th a t nom in a l wages were rigid a n d could not
easily be adjusted, was attractive for go v ern m e n ts since it integrated strong
trad e u nio ns a n d collective b arg a in in g as an em pirical fact into ec o n o m ic
theory. K eynesian ideas stren gthened the role o f the state in e c o n o m ic
policy by ho ld in g it responsible for providing for counter-cyclical d e m a n d
w henever the e c o n o m y required new stimulus.
in theory, K eynesianism did n o t entail trad e u nion p a rticip a tio n in
e c o n o m ic policy, n o r did it require detailed ec o n o m ic p lanning . In practice,
however, m a n y E u r o p e a n g o v ern m e n ts after 1945 tried to plan their e c o n
om ies to avoid a repetition o f the politically disruptive ec o n o m ic crisis o f
the inte rw a r years. In France, the c o u n try where p la n n in g bec am e most, for
malized, union influence on the plan was low. N e ith e r g o v e rn m e n t n o r busi
ness w as interested in discussing ec o n o m ic policy w ith tra d e u nions
(B a rb a sh , 1972, p. 149). In o th e r E u ro p e a n countries, p la n n in g w as c o n
ceived as a policy in stru m e n t th a t was deliberately m e a n t to in tegrate the
la b o u r m ov e m en t, especially in o rd e r to m o d e ra te wage d em ands. In such
countries, ec o n o m ic p la n n in g was used to c o n s tra in free collective b a r g a in
ing. In the U K , p la n n in g too k place in the fra m ew o rk o f the N a tio n a l
E co n o m ic D e v e lo p m e n t C ouncil ( N E D C ) u n d e r a L a b o u r governm ent.
T ra d e u nion s were initially willing to particip a te but were quickly disillu
sioned by the com plexity o f the p roblem s an d by the ex pectation o f the
gov ernm ent that they w ould in retu rn settle for lower wages.
In o th e r countries, consu lta tio n on e c o n o m ic policy to o k place outside
form al councils. C o o r d in a tio n between tr a d e u n io n collective b arg a in in g
a n d g o v e rn m e n t ec o n o m ic policy was based on a m o re info rm al shared
u n d e r s ta n d in g o f the m a c r o e c o n o m ic interactio n o f wage setting a n d eco
n o m ic policy. T h e Swedish Rehn M e id n er m odel o f ‘active m a n p o w e r
policy’ was developed in c o o p e ra tio n between tra d e u n io n s a n d the go v ern
ing Social D em o c ratic party, b u t not in a form al co n s u lta tio n structure.
G o v e r n m e n ts e n c o u rag ed tra d e u n ion wage restraint by offering growth-
e n h a n c in g public policies (L a n g e a n d G a r re tt, 1985).
E c o n o m ic policy problem s in p o stw a r E u ro p e were unlike those in the
in te rw a r years. In the first d ec ad e after the war, wage growth was m o d e ra te
and capital stocks were being built up. A fter d em obiliz ation an d recovery
had been achieved, ‘the m a in difficulty o f the p o st-w ar econom ies was n o t
slack d e m a n d , relative o v e rp ro d u ctio n or insufficient investment, but an
ungovernable tendency o f d e m a n d to o u tr u n the e c o n o m y ’s capacity to
meet: it w ithout inflation an d price rise’ (P ostan, 1967, p. 19). in stea d o f
having to stim ulate d e m a n d , g o v ern m e n ts soo n faced the task o f c o n t a in
ing inflationary pressure. A t the sam e time, they rem ained c o m m itted to full
e m p lo y m e n t a n d free collective bargaining.
As a consequence, Western g o v ern m e n ts so o n found themselves facing a
trilem m a between full em p lo y m e n t, price stability an d free collective b a r
gaining, in which any tw o could be achieved only by sacrificing the third.
T h e trad e o ff between u n e m p lo y m e n t an d price stability the so-called
Phillips curve d ep e n d ed on the c o n d u c t o f collective bargaining. U n d e r
the in stitutional c o n d itio n s o f a regulated la b o u r m a rk e t a n d free collective
bargaining , any decrease in u n em p lo y m e n t w ould lead to an increase in
inflationary pressure ( F la n a g a n et a!., 1983; U lm a n a n d F la n a g a n , 1972, p.
2 4). M a c ro e c o n o m ic policy had to deal w ith the q u estion o f how to
a c c o m m o d a te the effects o f free collective b a rg a in in g w ith o u t reducing
em ploym ent.
Trade unions as po litica l actors 351
In this situation, incom es policies were considered a p ro m ising p o tential

in s tru m e n t to shift the Phillips curve d o w n w a r d s a n d p re e m p t inflationary
pressure. A t first, in the 1960s, inco m es policies included the co n tro l o f
prices an d wages. A fte r price controls were d r o p p e d d u e to insuperable
p roblem s o f im p lem e n ta tio n , g o v ern m e n ts issued re c o m m e n d a tio n s or
o rdered wage freezes. A t the sam e tim e u nio ns were included in c o n s u lta
tion with g o v ern m e n ts on how to resolve b alan c e o f p ay m en t an d o th e r
e c o n o m ic difficulties.
E c o n o m ic m a n a g e m e n t becam e far m o r e difficult in the late 1960s w hen
la b o u r u n rest broke o u t in a large n u m b e r o f countries, often in o p p o sitio n
to tr a d e u nio n wage restraint. By th a t time, the experim ents w ith incom es
policies were widely seen as a failure. Nevertheless, w hen the p o s tw a r polit
ical e c o n o m y was p u t to the test o f th e d e v a lua tio n o f the U S d o lla r and
the first oil shock in the early 1970s, m a n y g o v ern m e n ts tu rn ed to incom es
policies again. L ac king alternatives, they a p p r o a c h e d tr a d e u n io n s for vol
u n ta ry trip a rtite co n c e rta tio n w ith the aim to c o n tro l wage expectations.
T h r o u g h o u t the 1970s, there were frequent a tte m p ts to find co o perative
a p p ro a c h e s o f g o v e rn m e n ts an d trad e u n io n s to deal w ith th e p ro b lem o f
stagflation. In m o s t countries, public ex p e n d itu re rose in o r d e r to c o m p e n
sate for j o b losses a n d provide for the unem ploy ed, b u t also to provide a
d e m a n d stim ulu s for the economy.
The rise o f m onetarism

A t the en d o f the 1970s, g o v e r n m e n ts’ ap p ro a c h to ec o n o m ic policy
ch anged drastically. H esitation in the 1960s a n d 1970s to use m o n e ta r y
policy to d a m p e n inflation was reduced by the success o f the ‘G e r m a n
m o d e l’. T h e G e r m a n B u n d e sb a n k switched to a restrictive m o n e ta r y policy
in 1974. A t the end o f the decade, u n e m p lo y m e n t and inflation in G e r m a n y
were far below' th e E u ro p e a n average. M oreover, the U S g ov ernm ent
shifted its e c o n o m ic a d ju s tm e n t strategy in 1978/79, a m o n g o th e r thing s
a d o p tin g a new policy o f dereg ulation. T h e Federal Reserve Bank
responde d to the second oil shock with sh a rp increases in interest rates and,
given the in te rn a tio n a l n a tu re o f financial m arkets, forced the rest o f the
industrialized w orld to follow. In th e U K , the newly elected C onservative
g o v e rn m e n t in 1979 based its e c o n o m ic strategy on tight m o n e ta r y policy
an d la b o u r m a rk e t deregulatio n. T h e a t te m p t by the French socialist
g o v ern m e n t in 1982 to stim ulate grow th by e n c o u ra g in g wage rises and
increasing public ex p e n d itu re failed within only a few m onths. In ad d itio n
the E u ro p e a n m o n e ta r y system, set up in 1978, aim ed at keeping exchange
rate fluctuations within a n a r r o w b a n d an d thereby m a d e a d ju stm e n t
th ro u g h currency d ev a lu a tio n m u c h m o re difficult.
T h e shift in e c o n o m ic policy w as a c co m p an ie d by ch a n g es in ec o n o m ic
th o u g h t. W h ereas previously the Philips curve was widely ac cepted in ec o

n o m ic th e o ry n o t on theoretical g ro u n d s b u t on the basis o f em pirical
facts ratio nal expectations th e o ry q u estio n e d the tr a d e o ff between infla
tion a n d u n em p lo y m e n t. In the long run, a c co rd in g to the new consensus
in m acroecon om ics, it was im possible to gen erate e m p lo y m e n t by allowing
for higher inflation. Inflation was to be fought by tighter m o n e ta r y policies.
Im b a la n c e s in th e real econom y, such as u n e m p lo y m e n t, h ad to be dealt
with by im provin g com petitive c o n d itio n s on the m a rk e ts for g o o d s an d
labour. To create e m p lo y m e n t, policy m a k ers should focus on the supply
side o f the ec o n o m y a n d on flexible a d ju s tm e n t o f the la b o u r m arket.
T h e new trend in ec o n o m ic policy p otentially u n d e rm in e d govern m e n t
c o o p e r a tio n with unions. D e regulation th rea ten e d the role o f tr a d e unions
in the la b o u r m arket. R a th e r th a n n ego tiatin g j o in t ec o n o m ic a d ju stm e n t
policies th a t c o m b in ed wage restraint w ith ec o n o m ic policies beneficial for
labour, m o n e ta rism aim ed at disciplining la b o u r by increasing u n e m p lo y
m ent. A c c o rd in g to Scharpf, only in a K eynesian e c o n o m ic en vironm ent
did go v ern m e n ts d ep e n d on the willingness o f tr a d e u nio ns to engage in
v o lu n ta ry wage restraint. If the g o v e rn m e n t switched to a m o n e ta r is t s tra t
egy, wage restra int no long e r required tra d e u nio n c o o p e ra tio n . Rather,
excessive wage settlem ents were im m ed iately punish e d by un em p lo y m e n t.
U n e m p lo y m e n t, unlike inflation, is experienced, n o t as a collective evil, but
as an individual risk. T ra d e u n io n s have to resp o n d to rising ec o n o m ic inse
curity a n d lower their wage claim s (Scharpf, 1991).
As it tu r n e d o ut, the effect o f m o n e ta r is t policies on the role o f tr a d e
u nion s was n o t as straig h tfo rw ard as an ticipated. Previous studies had
p ointed o u t th a t (lie ec o n o m ic p e rfo rm a n c e o f c o untries varied with the
level o f centralization o f w age b arg a in in g institutions. In the classic version
o f the arg u m e n t, the effects o f wage b arg a in in g in stitutions were d e te r
m ined by two cou n terv ailin g forces. W here centralized u n io n s were in
co n tro l o f wage f o rm a tio n for the e c o n o m y as a whole, they were forced to
internalize the negative effects o f excessive w age settlements. In these cases,
trade u n io n b eha v io u r in wage setting was m o r e responsive to changes in
the e c o n o m y a n d therefore h a d a positive im p a ct on e c o n o m ic p erfo r
mance. A t the sam e time, the b arg a in in g p o w er o f trad e u nions was higher
in centralized wage b arg a in in g structures. In decentralized b arg a in in g
systems a local wage push by tr a d e u n io n s w ould be disciplined by c o m p e t
ing n o n - u n io n com panies. A s a result, the rela tionship between ec o n o m ic
p e rfo rm an ce a n d the centralization o f wage b arg a in in g w ould take the
shape o f a h u m p (C alm fors a n d Driffill, 1988; see also C h a p te r 6 by
F la n a g a n in this volume).
Elsewhere in the literature a linear re la tionship is assu m ed between wage
b a rg a in in g c e ntraliza tion an d e c o n o m ic p erfo rm an ce , with p e rfo rm an ce
Trade unions as p o litiecd actors 353
im pro ving w ith increasing centralization o r c o o r d in a tio n (Soskice, 1990;

D ell’A rin g a a n d Sarneh, 1992). In decentralized wage b a rg a in in g systems,
wage fo rm a tio n is said to d ep e n d o n the c o n d itio n s in local la b o u r m a rk e ts
for p a r tic u la r skills. M oreover, since wage structu re s are em b e d d e d in social
n o r m s a b o u t fair relativities, even in decentralized w age f o rm a tio n relative
wages tend to be rigid.
B uilding o n these arg u m e n ts, it was sh o w n th a t wage b a r g a in in g insti
t u tio n s also in teracted w ith m o n e ta r y policy (Iversen, 1999; Hall an d
F ranzese, 1998). In c o u n trie s w ith d ec entralized wage b arg a in in g , a c o m
m it m e n t o f m o n e ta r y a u th o ritie s to a restrictive policy w ould have less o f
a n im p a c t o n t r a d e u n io n s since local w age b a r g a in e r s w o u ld n o t perceive
their w age se ttlem ents to be influential w ith respect to m o n e ta r y policy.
O nly in centralized wage b a r g a in in g are tr a d e u n io n s able to take into
a c c o u n t the responses o f m o n e ta r y a u th o ritie s th a t their w age settlem en ts
m ig h t trigger. In co u n tries w ith m o r e centralized w age b arg a in in g , u n io n s
are therefore expected to be m o r e responsive to w a rd s tigh t m o n e ta r y p o l
icies (see C h a p t e r 6 by F la n a g a n in this volum e). In em pirical studies it was
show n th a t co u n trie s w ith sectoral wage b a r g a in in g te n d ed to a d ju s t better
to a m o n e ta r is t en v iro n m en t. C o u n trie s w ith decen tra liz ed w age f o r m a
tion show ed the w o rs t p e r f o rm a n c e (T raxler et al., 2001; Iversen, 1999).
Also, the interplay betw een the B u n d e s b a n k ’s restrictive m o n e ta r y policy
a n d secto ral wage b a r g a in in g in stitu tio n s in G e r m a n y w as seen us c o n t r i b
uting to the relative success o f th e G e r m a n e c o n o m y in the 1970s a n d
1980s (Streeck, 1994). T h u s tight m o n e ta r is t e c o n o m ic policy seemed in
principle c o m p a tib le with regulated la b o u r m a rk e ts a n d ce ntralize d wage
barg a in in g .
In line with these a rg u m e n ts a b o u t the persisting im p o r ta n c e o f wage
b arg a in in g institutions for e c o n o m ic perform ance, the p o stw a r tr a d itio n o f
c o n c e rta tio n an d tr a d e union involvem ent in ec o n o m ic policy survived the
tu rn to m o n e ta rism in m a n y countries. W hile restrictive m o n e ta r y policies
were eventually a d o p t e d in all adva nce d industrialized countries, this was
n o t ac c o m p a n ie d by universal la b o u r m a rk e t dereg u latio n a n d tr a d e union
exclusion. O nly in the A n g lo -A m e ric a n O E C D countries, w ith the excep
tion o f Ireland, did the labour-inclusive p o s tw a r political e c o n o m y d is a p
p ea r in the 1980s a n d 1990s. In the U SA , C a n a d a , N ew Z e a la n d , A ustralia
a n d the U K where la b o u r inclusion a n d e c o n o m ic p la n n in g h a d always
been alien to the political system, the tu r n to neo-liberalism a n d m o n e t a r
ism excluded u n io n s from e c o n o m ic policy m aking.
In C o n tin e n ta l Europe, by c o m p a r is o n , m a n y go v ern m e n ts in the 1980s
o pte d for n eg otiating wage restra int with u n io n s a n d em p loyers when
facing the challenges o f tight money, fiscal austerity, an d atta c k s o n their
currencies in inte rn atio n a l financial markets. A new wave o f ‘social p a c ts ’
revived natio n al trad itio n s o f c o n e e rta tio n ( E b b in g h a u s a n d Hassel, 2000;

P ajeriag an d Pochet, 2000). Pacts also bec am e an im p o r ta n t policy in stru
ment in the tran sitio n c ou ntries o f E astern E u ro p e (S c h m itter a n d Grote,
1997). In all these cases, m o n e ta r is m im proved the b arg a in in g p o sition o f
g overn m e n ts vis-a-vis tr a d e unions. In E urope, the M a a s tr ic h t T reaty and
the s u b se q u e n t Stability Pact im posed tight ceilings o n inflation a n d public
spending. T h e Single E u ro p e a n M a r k e t liberalized p roduct m a rk e ts an d
intensified c o m p etitio n . G o v e r n m e n ts n o t only acted u n d e r tighter c o n
straints, but they were also in a b etter positio n to convey this to d om estic
interest groups.
5. Unions and the Welfare S tate

Trade unions played a m a jo r role in welfare state developm ent by pro m o tin g
dem ocratization and the evolution o f social rights as a core elem ent o f citi
zenship. Industrialization and m o dern ization both enabled and required
public welfare provisions. T hey underm ined pre-industrial sites o f solidarity
such as the extended family, the church an d the guilds by advancing social
mobility, urbanization and m arket exchange. As the expansion o f m arkets
tended to destroy the social co m m u n ity on which m arkets are based, social
policy had to re-embed the m arket ec o n o m y into society. A n obvious source
o f provision for the needy was the state, which developed bureaucratic o r g a n
izations to deal with the new d em a n d s (F lo ra an d Alber, 1981).
T h e evolution o f the welfare state coincided w ith the em ergence o f d e m
ocratic form s o f state legitimacy. T h e provision o f collective welfare
th r o u g h public ex penditu re bec am e a principal m e a n s for go v ern m e n ts to
secure the s u p p o r t o f an increasing g ro u p o f voters. E x p an sio n o f the f r a n
chise moved the political a g e n d a to w a rd s th e institutio n aliz atio n o f social
rights. Full citizenship bec am e based, n o t ju st on equality before the law,
but also on social equality (M arsh all, 1965). A t the sam e time, social policy
often preceded full d e m o c ra tiz a tio n and in fact was used to p r e-em p t it.
Also, early dem ocracies were often slow to in tro d u c e com preh ensive
welfare systems because political pow er was ca p tu re d by small pro p erty
ow ners c a m p a ig n in g for lower ta x atio n ra th e r th a n h igher welfare provi
sions (E sp in g -A n d e rse n , 1992, p. 99).
W hile the exp ansion o f the welfare state was a universal p h e n o m e n o n in
the tw entieth century, there are m a rk e d differences between different types
o f welfare state. Welfare regim es can be distinguished by the degree to
which they p ro tec t the in dividual from the m a rk e t a n d the social status o f
individuals in ec o n o m ic h a r d s h ip o r w hen their em p lo y m e n t changes
(E sping-A ndersen, 1990). ‘D e c o m m o d ific a tio n ’ o f la b o u r can take differ
en t form s a n d entail different sorts o f entitlem ent in cases o f sickness,
u n em p lo y m e n t, disability a n d the like.
Trade unions us p o litica l actors 355
T hre e welfare regimes were identified in a seminal study (Esping-

A n d e rse n , 1990). D ecom m o d ific atio n is stron gest in the social-d em ocratic
regim e with universal provision o f a w ide ran g e o f entitlements. Social-
d e m o c ra tic welfare states were designed to secure high s ta n d a r d s for all,
a n d n o t ju st to s u p p o r t the needy. T h e ir political project was equality
between the classes. S tatus differences between m a n u a l a n d w hite-collar
w orkers were eradicated w ithin a universal in su ran c e system, a lth o u g h b e n
efits co ntin u ed to be based on ac c u s to m e d earnings. E x em p lary cases are
the S candinav ian co u n tries o f Sweden, N orw ay, F in la n d an d D e n m a r k . At
the o th e r end, a liberal welfare regim e developed in th e A n g lo -S a x o n c o u n
tries a n d in a c o u n t r y like Sw itzerland. H ere welfare provisions are m inim al
a n d m eans-tested, an d the state en c o u rag es m a rk e t so lutions by su bsidiz
ing private welfare schemes. Public schemes are universal but provisions are
to o low for statu s m aintenance.
Third, in conservative welfare states social security is provided mainly by
the state an d the share o f the m a rk e t is minimal. Provisions an d entitlem ents
arc, however, n o t as com prehensive as in the social-dem ocratic welfare
regime; the em phasis is n o t on equality but on the preservation o f social
status. Redistributive effects are therefore negligible. Conservative welfare
states are prim arily to be found on the E u ro p e a n continent.
M a n y co u n tries c o m b in e elem ents o f different welfare regimes. T h e
D an ish welfare state has liberal elem ents c o m b in ed with social-dem ocratic
ones. In the p o o r e r coun tries o f s o u th e rn Europe, a mix o f liberal a n d c o n
servative elem ents can be found. Different c o m b in a tio n s indicate different
relative im p o r ta n c e o f conflicting goals in social security provision: e q u a l
ity, the m a in te n a n c e o f sta tu s differentials, a n d m a rk e t reliance.
Unions and the Evolution o f the W elfare S ta te

T ra de u nion d e m a n d s for social security collided an d interacted with the
d e m a n d s o f o th e r political ac to rs in country-specific political c o n s tella
tions. N a tio n an d state building, industrializatio n a n d political cleavage
stru c tu ra tio n coincided w ith trade u nion o rgan iz ation an d the evolution o f
welfare stales (R o k k a n , 1968). Welfare state intervention owes its origins
‘to an ep o c h that an te d a te s la b o r ’s em ergence as a real political force’
( E sp in g -A n d e rse n , 1994, p. 139). T h u s the evolution o f the welfare state
to o k place in inte raction between la b o u r m ov e m en ts a n d g ro u p s like
farm ers an d business. W hile the presence o f strong farm ing c o m m u n ities
often w orked against welfare state expansion (G o u rev itch , 1986), business
could occasionally be d ra w n on la b o u r ’s side. Several studies show a shared
interest o f e m p lo y e rs’ associations an d trade unions in the ex p a n sio n o f
specific form s o f social security provision (M ares, 2.000; S w enson, 1997).
F or instance, u n e m p lo y m e n t insu rance also serves interests o f em ployers as
it preserves the skills o f w orkers d u rin g e c o n o m ic d o w n tu r n s (M arcs,

2000). T h e ac tu a l design o f u n e m p lo y m e n t benefits w h eth e r they are
based on ta x ation o r on a com prehensiv e o r narrow ly defined o cc u p atio n al
in su ran c e schem e - d ep e n d ed on the relative pow er a n d the strategic
b eh a v io u r o f tr a d e unions, em ployers an d the governm ent.
T ra d e u n io n s were highly influential w ith respect to the direction o f
welfare state evolution in different countries. While e x p a n sio n o f social
security was an ob vious goal for all unions, m o re radical u n io n s pressed for
a political so lution bey ond capitalism , in which social security w ou ld be
p a r t o f a socialist e c o n o m ic order. R e fo rm ist la b o u r m o v e m en ts s u p p o r te d
voluntaristic provision o f social security by friendly societies rath e r th a n
the state.
T h e type o f social security provision tr a d e u nion s d e m a n d e d varied su b
stantially with the type o f tr a d e u n ionism an d its in te ractio n with o th e r
political forces. A key fac to r was the mix o f craft a n d industrial trad e
u n ionism at the tim e o f the first period o f social security e x pa nsion in the
latter h a l f o f th e n in eteenth century. C r a f t u nions preferred p articularistic
solutions. N o t least to pro tec t their own organizatio ns, they insisted on p r o
viding social security themselves ra th e r th a n letting the state take over their
role. T h u s they often experienced the g ro w th o f the welfare state as e x p ro
p riation an d dilution o f their own social security provisions. In c ountries
where originally u n e m p lo y m e n t benefits, sickness pay a n d sim ilar form s o f
social in su rance were provided by org an iz atio n s o f skilled workers, craft
u n ion d o m in a n c e im pe ded the d ev e lo p m e n t o f universalistic social se cu r
ity p ro g ra m m e s with high levels o f equality. Since the cra ft u n ions in the
A n g lo -S a x o n co u n tries were also less politicized th a n the m o r e e n c o m p a s s
ing u n io n s o f c o n tin en tal E urope, they did n o t have the political clo u t to
press for com p rehen sive social security. B ut even in D e n m a r k the craft-
orien ted la b o u r m o v e m en t blocked social d e m o c ra tic initiatives for an
active la b o u r m a rk e t policy like in Sweden a n d Norway. In the U nited
States an d the U n ited K in g d o m , cra ft u n io n s preferred o c c u p a tio n a l over
universal benefits.
Industrial unions, by c o m p a r is o n , h ad a b r o a d e r a n d m o re h eterogene
ous m e m b e rsh ip an d were u n d e r pressure from their m a jority o f low-
skilled m e m b ers to even o u t o c c u p a tio n a l differentials. As political unions,
they also were b etter able to b arg a in with central governm ents. In c ountries
where industrial unions becam e d o m in a n t, a wide range o f social benefits
are m o r e likely to be provided by the state, achieved th ro u g h political
m obilization instead o f collective b a rg a in in g a n d on the basis o f universal
rights o f citizenship. In Sweden, u n io n s pu rsu ed the levelling o f statu s an d
pay differentials between blue- an d w hite-collar w orkers in social security
as well as in pay bargaining.
Political fra g m en tatio n o f tra d e u n io n s in c o n tin en tal E u ro p e u n d e r

m ined s u p p o r t for a social-dem ocratic welfare state. T h e persistence o f the
religious cleavage in c ou ntries with seg m ented u n io n p a r ty relations
shaped the n o rm a tiv e o rie n ta tio n o f policy m a k ers vis-à-vis the provision
o f social security. S tro n g ties between C h r istia n - d e m o c r a tic parties and
tr a d e u nions enc ouraged policies based on the sub sidiarity principle. T his
em p h asized the traditional role o f w om en an d the family a n d tended to
w ork against universal a n d com pre hensiv e social security provisions.
Political conflict between c o m m u n is t a n d C h ristian tr a d e u n io n s h ad a
sim ilar effect. In A ustria a n d G erm a n y , the origins o f the welfare state
reach back to a period o f political division and op pression. Social security
provision developed a long the line o f statu s differentials an d this c ha nged
only slowly in the p o stw a r period after the restru c tu rin g o f the trade
unions.
T h e r e is a close interaction an d c o rrela tion between the organ iz atio n o f
wage b arg a in in g a n d the ev olution o f the welfare state, m ed iated by the
degree o f c entralization o f trad e u n io n s a n d their politicization. T h e m ore
en c o m p a ssin g a n d centralized tr a d e u n ions were initially, the m o r e they
were able to influence the political e c o n o m y b o th in wage b a rg a in in g an d
in social policy. T h e d ec o m m o d ific atio n o f welfare regim es is highly c o rre
lated with th e c e ntraliza tion o f w age b a rg a in in g (see F igure 10.2).
Unions an d m ature welfare sta tes

As welfare states m a tu re d after the Second W orld War, the in te raction
between u n io n s a n d the welfare state an d between social policy, collective
b arg a in in g a n d the la b o u r m a rk e t ch a n g ed . O ver time, tr a d e u n io n s learned
to use the welfare state an d its e x p a n d in g provisions to stabilize the in com e
o f their m em bers. W hile political exchange between g o v ern m e n ts an d trad e
unio ns entailed wage restra int on the side o f the unions, it often provided
for the e x pa nsio n o f social security benefits by the governm ent.
A t the sam e time, welfare state regim es increasingly affected the p e r f o r
m a n c e o f la b o u r m a rk e ts a n d tr a d e u n io n s grew d e p e n d e n t o n the welfare
state. First, the welfare state bec am e a big employer. In the mid-1990s, the
social service e c o n o m y a c co u n ted for one q u a r te r o f total e m p lo y m e n t in
Sweden ( E sp in g -A n d e rse n , 1996). In th e social-d em ocratic welfare states,
female la b o u r m a rk e t particip a tio n increased with the increase in e m p lo y
m e n t o f the social security sector.
S econd, the welfare state reduced em plo y m e n t by offering incentives to
older w orkers to leave the la b o u r market for early retirement. Participation
rates o f men above 55 declined on average in the EIJ by 27 percentage
points, from 81 to 54 per cent, between 1970 an d 1995. Beginning with the
1970s when gov ernm ents were no longer able to g u a ra n te e full e m plo ym e nt,
45
40
a • DK * N °
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Degree of centralization of wage bargaining
Source: E sp in g -A n d ersen (1990), Iversen (1999); o w n c a lcula ti ons .
Figure 10.2 D eeom m odijication a n d centralization o f wage bargaining
early retirement and sim ilar policies were developed to lake care o f r e d u n
d a n t workers. Early retirement was p o p u la r with older workers, an d th e re
fore with trade u nion s w hose m e m b ersh ip g radually grew older on average
(Ebbinghaus, 2001).
T hird , social security e x pa nsion raised the price o f labour. In insurance-
based welfare states, n on-w age la b o u r costs have exploded since the early
1970s. Since early retirement p ro g ra m m e s and disability pensions are paid
out o f co n trib u tio n s o f those em ployed, unit la b o u r costs increased while
wages remained stagnan t. As non-w age la b o u r costs began to m ake national
econom ies non-com petitive, em ployers an d governm ents had to seek
massive productivity increases, which often resulted in even m o re publicly-
funded early retirement.
The welfare sta te in retreat

Since the early 1980s the welfare state has been in retreat. O nly a few
g overnm ents, especially in Britain and the U S A , a tte m p te d to cu t back on
social security spending. But ageing, low e m p lo y m e n t a n d public debt
forced welfare states to restructure. T h e Treaty o f M a a s tr ic h t an d the su b
s e q u en t Stability an d G ro w th Pact h ad sim ilar conseq u e n ces for E u ro p e a n
welfare states.
T h e retreat o f the welfare state has a m bivalent im plications for trad e
unions. To the ex ten t th a t tr a d e u n io n s were e m b e d d e d in the welfare state,
r e tre n c h m e n t is a threat to their established role in social policy. W here
tra d e u n io n s p articip a te in the a d m in istra tio n o f welfare state program m es,
this has co m e u n d e r criticism in recent years, like for exam ple in A ustria,
France, G e r m a n y an d the N etherlands. W h e reas in som e cases em ployers
have pressed for change, in o th e rs go v ern m e n ts have taken the initiative an d
tried to curtail the role o f the ‘social p a r t n e r s ’ in the g overna n ce o f the
welfare state. In A ustria a n d Italy this was seen as an attac k o n trad e u n io n
ism as such a n d h as led to a call for p rotest strikes, in p a r tic u la r to the first
general strike for two decades in Italy in 2002 (E b b in g h au s, 2002.).
O n the o th e r h a n d , restru c tu rin g o f the welfare state ex p a n d e d the space
for collective b arg a in in g (M yles a n d Pierson, 2001; Schludi, 2001; Sw ank,
2001; E b b in g h a u s a n d Hassel, 2000). F or instance, the g rad u a l re tre n c h
m e n t o f p ay-as-you-go pension schemes on the E u ro p e a n c o n tin e n t has
o pen e d up o p p o r tu n itie s for b arg a in in g on o c c u p a tio n a l pensions. In the
N eth e rlan d s, F ra n ce a n d Sweden have existed for a long time. T h e y n e g o
tiated s u p p le m e n ta r y pensions increased in im p o r ta n c e w ith the c u tb a c k o f
universal state pension schemes. In o th e r c ountries where tr a d e u n io n s had
no tra d itio n o f n ego tiatin g private pensions, they have sta rted to d o so. T h e
G e r m a n pension reform o f 2001 intro d u c ed new v o lu n ta r y private pension
funds to s u p p le m e n t declining public benefits. T his h as led to collective
ag reem ents on funded occ u p atio n al pension schem es an d the co nversion o f
p arts o f the wage into in surance c o n trib u tio n s (E b b in g h au s, 2002.).
T ra d e u n io n inclusion in e c o n o m ic policy a n d social security provision
survived in W estern E u ro p e m ain ly b ecause o f the close c o n n e c tio n
between the m a tu r e welfare state a n d the la b o u r m arket. F o r m a n y g o v e rn
m e n ts it b e c am e a p p a r e n t in the 1980s a n d 1990s th a t la b o u r m a r k e t d e r
egulation in m a tu r e welfare states is politically risky an d expensive. M a tu re
welfare states n o t only o iler m ultiple veto p o in ts to social g ro u p s u n d e r
ta k in g to o b s tr u c t dere g u latio n a n d re tr e n c h m e n t (Pierson, 1998). Social
security provision has also b ec o m e a m a in so urce o f legitim acy for g o v e r n
m e n ts in a n unstable w orld economy. In m a n y countries, in p a r tic u la r on
the E u ro p e a n c o n tin e n t, tra d e u n io n s have used their influence on the
welfare state to ta k e r e d u n d a n t w o rk ers o u t o f the la b o u r m a rk e t rath e r
th a n m a k e th e m u n em ployed. U n e m p lo y m e n t is still seen by the public

a n d by policy m a k ers as the m ain b e n c h m a r k for e c o n o m ic policy. Even in
c o u n trie s w ith liberal welfare states w here trad e u n io n s are n o t involved in
the design a n d ad m in is tra tio n o f social securing p ro g ra m m e s, the politics
o f r e tr e n c h m e n t w ere difficult for neo-liberal g o v e rn m e n ts like th o se o f
R o n a ld R e ag a n in the U S A , a n d M a r g a r e t T h a t c h e r in the U K (Pierson,
1994).
6. New challenges
In th e last tw o decades o f the tw entieth century, new challenges arose for
o rgan ized la b o u r in the politics o f advanced industrialized countries. T h e
arch itectu re o f the world e c o n o m y h a d c h a n g ed f u n d am e n tally since the
early 1970s with the b r e a k d o w n o f the B retton W o o d s system an d the rise
o f in te rn a tio n a l capital markets. E c o n o m ic liberalization, privatization
a n d d ere g u latio n sprea d across the w orld, an d pro tected niches o f e m p lo y
m en t in state-run industries were eradicated. In Europe, the Single
E u ro p e a n M a rk e t, M o n e ta r y U n io n an d the Stability and G ro w th Pact
ce m e nted the tu r n to austerity a n d tight m o n e ta rism . L a b o u r m ark ets
becam e m o r e volatile, insecure a n d heterogeneous. P arty systems u n d e r
w ent f u n d a m e n ta l changes as they dissociated themselves from tra d itio n a l
class cleavages (Kitschelt, 1997). T ra d e u n io n m e m b e r sh ip declined an d in
m a n y c oun tries the cohesion o f th e tr a d e union m o v e m e n t as a political
a c to r is in d o u b t.
T ransnational econom ic policy

With ec o n o m ic inte rn atio n a liz atio n , th e in te rd ep en d e n ce between national
ec onom ie s has increased. N a tio n a l e c o n o m ic policies p ro d u c e stronger
external effects th a n before an d they are m o r e th a n ever subject to in te r n a
tional regulation. Increasingly, in te rn a tio n a l agencies a n d su p ra n a tio n a l
bodies regulate or, for th a t matter, deregulate m a rk e t access a n d tr a d e an d
capital flows. In tergovernm e ntal bodies th a t o p era te in an in te rn atio n a l
space derive their legitim acy from the c o o p e r a tio n o f sovereign go v ern
ments. U n io n influence on th em is generally low. N e ith e r the I n tern atio n al
M o n e ta r y F u n d n o r the World T ra de O rg a n iz a tio n provide o p p o rtu n itie s
for u n io n participation.
The internationalization o f capital m a rke ts

T h e in te rn a tio n a liz a tio n o f ca p ita l m a rk e ts p u ts a p r e m i u m on price
stability. U n d e r flexible exc han ge rates th e valu e o f a c u rre n c y d e p e n d s on
the rate o f inflation a n d the c u r r e n t a c c o u n t balance. N a ti o n a l m o n e ta r y
an d fiscal policy m a k e r s th e re fore have to ta k e the effects o f w age infla
tion on the e x c h an g e rate in to a c c o u n t. A s th e ability o f g o v e r n m e n ts to
to le ra te w age inflation is d im in ish e d , u n io n s c o m e u n d e r p ressu re to

c o o p e r a te in a d ju s tin g n a tio n a l la b o u r m a r k e ts to the n ew in te r n a tio n a l
co n stra in ts.
A t the sam e time, go v ern m e n ts have rea sons to seek new form s o f c o o p
era tio n w ith tra d e unions in their effort to a d ju st to the new e c o n o m ic envi
ro n m en t. In p a r tic u la r in co u n tries where la b o u r m a rk e ts are still highly
regulated a n d the role o f t r a d e u nio ns in wage f o rm a tio n is strong, go v ern
m e n ts try to p ersu a d e tr a d e u nions to accept v o lu n ta ry wage restraint.
D ep e n d in g on u n io n s ’ ability to m obilize electoral pressure, g o v ernm e nts
have a n incentive to p re e m p t union o p p o sitio n th ro u g h negotiations. T he
interest o f g o v ern m e n ts in trip a rtite agre em e nts o n wages an d welfare state
reform o p en s new o p p o r tu n itie s for tr a d e u n io n political influence. In
c o u n tries where tr a d e u n io n s are w eak in political, in stitution al an d o r g a n
izational term s, g o v e rn m e n ts increasingly tend to exclude th em from p o lit
ical decision m ak ing.
E uropeanization
In the E u ro p e an U n io n the process o f e c o n o m ic a n d m o n e ta r y in tegration
has m a d e a tight m o n e ta r y policy an d fiscal austerity a n in te rn atio n a l o bli
gation for m e m b e r states. T h e M a a s tr ic h t T reaty a n d the Stability and
G ro w th Pact have tied the h a n d s o f n atio n al governm ents. E c o n o m ic
governance, as envisaged by the French g o v ern m e n t, is u nd erde velope d in
c o m p a r is o n to the role o f the a u t o n o m o u s E u ro p e a n C e n tral Bank.
Still, E u ro p e a n integration has always entailed a n elem ent o f social p a r t
nership a n d tripartism . Like m o s t o f the C o n tin e n ta l E u ro p e a n m e m b e r
states, the E U h as a trip a rtite E c o n o m ic and Social C o m m itt e e on which
u nion s are represented. M oreover, the E u ro p e a n U n io n h as long been c o m
m itted to ‘social d ia lo g u e ’ between business a n d la b o u r (Falkner, 1998),
an d the E u ro p e a n e m p lo y m e n t strategy em phasizes the inclusion o f u nions
at the su p ra n a tio n a l as well as the n a tio n al level.
As o f no w the im p a c t o f E u r o p e a n social policy has rem ained limited.
E u ro p e a n social policy directives, w ritten with m o re o r less involvem ent o f
the E u ro p e a n T ra d e U n io n C o n fe d e ra tio n , cover only n a r r o w issues a n d d o
n o t su bstantia lly affect natio nal la b o u r or social legislation. E u ro p e a n -
wide collective b a rg a in in g is a lon g way off an d indeed seems unlikely ever
to materialize (see C h a p te r 13 by Sadow ski, L udew ig a n d T urk in this
volume). D espite the preferential tre a tm e n t o f the social p a r tn e rs by the
E u ro p e a n C o m m issio n , the E u ro p e a n political system is m uch m o r e p lu
ralist th a n c o r p o r a tis t (Streeck, 1992). A large n u m b e r o f tr a d e unions,
associations, lobby groups, firms a n d regions have a variety o f choices o f
different p a th s o f access to the political centre, an d policy m a k in g is o r g a
nized a r o u n d a com plex interplay between the n atio n al a n d E u r o p e a n level.
E u ro p e a n decision m a k e rs have a variety o f interest gro u p s to deal with,

trad e u n io n s b eing only one a m o n g m a n y (Streeck, 1993b).
Trade unions as p o litica l actors

In p o s tw a r E u ro p e a n d bey o n d , u n io n s were included in natio n al politics
as representatives o f the w o rk in g class as a whole. In the 1970s in p a r ti c u
lar, their m e m b e r sh ip grew a n d so did their political influence. However,
d eep ch a n g es in the c o m p o sitio n o f trade u n ion m e m b e r s h ip have taken
place since. In m o s t countries, u n io n m e m b e r sh ip h a s declined s u b s t a n
tially a n d its s tru ctu re becam e stuck in th e g olden e ra o f welfare state
ex pansion. By the end o f the tw entieth century, the average union m e m b e r
was o ld e r th a n the average em ployee; m o re likely to be a blue-collar w orker
th a n a w hite-collar w orker; m ale rath e r th a n female; a n d em ployed in m a n
ufac tu rin g ra th e r th a n in services (see C h a p te r 2 by Schnabel a n d C h a p te r
11 by Visser in this volume). In particular, the increase in female a n d service
sector e m p lo y m e n t is n o t reflected in tr a d e u n io n m em bership. Such i m b a l
ances are likely to have lo n g -te rm negative effects o n the political legitimacy
o f tr a d e unions. F o r example, established rights o f u n io n s to be represented
o n public co m m ittee s a n d adm in istra tiv e b o a r d s m ay be increasingly c h a l
lenged by a sceptical public.
Even m o re im p o r ta n t, the political interests o f u n io n s will n atu ra lly be
defined by th eir rem a in in g core m em bership. T h e massive e x pa nsio n o f
early retire m ent in the 1980s a n d 1990s reflected the d e m a n d s o f older trad e
union m em bers. T ra d e u n io n s in Italy, w here u p to 50 per c e n t o f u n io n
m e m b ers are retired, c a m p a ig n for p ensioners rights at the expense o f
y ou n g w orkers (E bbingh aus, 2002). D esp ite the effort o f m a n y tr a d e u n io n s
to b ro a d e n their m e m b e rsh ip base, unions as political ac to rs are likely to
be increasingly defined as a pressure g r o u p for a n a rro w co n stitu e n cy o f
skilled m a n u a l workers. T h is will m a k e it difficult for them to defend the
political status they achieved in the p o s tw a r perio d, w hich is still reflected
in m a n y o f the core institu tio n s o f d e m o c ra tic capitalism .
Present tendencies to w ard s dere g u latio n o f advanced political e c o n o
mies may, however, be overstated. In m a n y E u ro p e a n co u n tries trad e
u nion s are still stro ng (Ross a n d M a r ti n , 1999). T h e y generally co n tin u e to
be regarded by m a n y go v ern m e n ts as indispensable p a rtic ip a n ts in natio n al
social pacts for wage m o d e r a tio n an d em p lo y m e n t. O n th e o th e r h a n d , even
where p o stw a r c o r p o r a tis m is n o t d isa p p ea rin g , it is ch a n g in g u n d e r pres
sures on g o vern m e nts to strengthen e c o n o m ic incentives a n d en su re that
the costs o f the o rganized p u rsu it o f collective interests are b o r n e by those
w ho also reap the benefits, r a th e r th a n by th e public-at-large.
Acknowledgement
We w ould like to th a n k M a rc o H a u p tm e ie r for his help in se arching a n d
c o m pilin g su b sta n tia l p a r ts o f the literature as well as the ed ito rs for very
helpful com m ents.
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Trade unions as political actors

Zur Verfügung gestellt in Kooperation mit / provided in cooperation with:

Empfohlene Zitierung / Suggested Citation:

Nutzungsbedingungen: Terms of use:

B ar g a i n in g : E v idenc e from British C o m p a n i e s a n d E s t a b l i s h m e n t ’, In d u s tr ia l a n d L a b o r

Well into the 1980s a n d 1990s, E u r o p e a n u n io n s in p a r ti c u la r la u n c h e d

g a rd its d e m a n d s, the British T U C has no o th e r p a r ty th a n L a b o u r to turn

2. H istorical origins o f union political behaviour

this sort had no d e m a n d s on the state a p a r t from n o n -inle rferenc c in their

was q uite different from the A n g lo -A m e ric a n world (K endall, 1975).

effect o f d o m in a n c e over u nions by political parties - in p a rtic u la r the

G erm a n y , in the ‘c o n s o c ia lio n a F c o u n tr ie s religious clcavages bccam e in sti­

Figure 1 0 .1 Union -party relations

Political unity exists in c ountries w here political tli(Terences w ithin tr a d e

A ustria, where the entire tr a d e u n io n s tru ctu re was reo rg anized im m ed i­

3. Unions in the political process

'D em ocratic class struggle’ a n d p a rty linkages

to society as a whole. A s Swedish u nions tu rn e d into a p o p u la r m ovem ent

d u rin g the election c a m p a ig n o f 1998, to extract from the. S P D a c o m m it­

4. Unions and economic policy

K eynesianism and the second p ost-w ar settlem en t

In this situation, incom es policies were considered a p ro m ising p o tential

The rise o f m onetarism

th o u g h t. W h ereas previously the Philips curve was widely ac cepted in ec o ­

im pro ving w ith increasing centralization o r c o o r d in a tio n (Soskice, 1990;

revived natio n al trad itio n s o f c o n e e rta tio n ( E b b in g h a u s a n d Hassel, 2000;

5. Unions and the Welfare S tate

T hre e welfare regimes were identified in a seminal study (Esping-

Unions and the Evolution o f the W elfare S ta te

it preserves the skills o f w orkers d u rin g e c o n o m ic d o w n tu r n s (M arcs,

Political fra g m en tatio n o f tra d e u n io n s in c o n tin en tal E u ro p e u n d e r ­

Unions an d m ature welfare sta tes

Degree of centralization of wage bargaining

Source: E sp in g -A n d ersen (1990), Iversen (1999); o w n c a lcula ti ons .

Figure 10.2 D eeom m odijication a n d centralization o f wage bargaining

The welfare sta te in retreat

th a n m a k e th e m u n em ployed. U n e m p lo y m e n t is still seen by the public

T ransnational econom ic policy

The internationalization o f capital m a rke ts

to le ra te w age inflation is d im in ish e d , u n io n s c o m e u n d e r p ressu re to

E u ro p e a n decision m a k e rs have a variety o f interest gro u p s to deal with,

Trade unions as p o litica l actors

G o u r e v i t e h , P e te r Alexis (1986), P o litics in H a rd Tim es. C o m p a ra tiv e R e sp o n se s to

S c b a r p f , f r i t z W. ( 1 9 9 1), C risis a n il C hoice in E u ro p ea n S o c ia l D e m o c ra c y , It h a c a , NY: C o rn e ll

Das könnte Ihnen auch gefallen

G erm a n y , in the ‘c o n s o c ia lio n a F c o u n tr ie s religious clcavages bccam e in sti

A ustria, where the entire tr a d e u n io n s tru ctu re was reo rg anized im m ed i

d u rin g the election c a m p a ig n o f 1998, to extract from the. S P D a c o m m it

th o u g h t. W h ereas previously the Philips curve was widely ac cepted in ec o

Political fra g m en tatio n o f tra d e u n io n s in c o n tin en tal E u ro p e u n d e r