A triumph of failed ideas European models of capitalism in ... - Journal

Hans-Jürgen Urban.................................................................................................................................................................strategic preferences, and hence the stability and duration ofcooperative pacts, can quickly change.Empirical research on social pacts has identified country-specificdifferences in the formation of corporatist arrangements in the precrisisphase, but also common features. These common features wereobserved relatively independently of institutional contexts and politicaltraditions. Describing these competitive corporatist pacts as ‘coalitionsof the weak and moderate’ indicates the degree of empowerment andstrategic calculations of the players (on this, see Baccaro and Lim 2006;Baccaro 2008). Weakened governments which, because of globalisation,the electoral system or over-powerful players with the power of veto,cannot tackle problems on their own, come up against trade unionswhich, because of a declining rate of union membership and generalchanges in the economy and in politics, have also lost bargaining power,but still retain a minimum mobilising capacity and hence a power ofveto. The unions’ readiness to participate in social pacts was oftenpreceded by bitter internal struggles, in which the ‘moderates’ assertedthemselves against the ‘radicals’ and took over the strategic direction ofthe organisation. The willingness of the capital-owning organisations tolet them in has varied according to their expectations regarding theoutcome of social pacts, and has occasionally proved important, not fortheir emergence, but for their stabilisation.The crisis in financial market capitalism has generated a newmacroeconomic context, which has affected players’ interests andability to act. This was true of the economy in the first instance becauseof the suddenness with which loss of full capacity and productionoccurred. But it also affected the state. The new governmentinterventionism exhibited substantial differences from the era of thewelfare state. Nationalisation, short-term economic policy and marketcorrection measures took place under pressure of a massive financialand economic crisis, and were designed first and foremost to stabilisethe domestic economy and financial base. At the same time, theobjectives being pursued could be achieved only by intense cooperationamong nation-states, which in turn limited the ability of individualstates to act (Hassel and Lütz 2010). Finally, ad hoc interventions,which stabilised the economic situation and the financial systemthrough comprehensive expenditure programmes and compensationfor debt-related failures in the private sector, seriously overstretched228 A triumph of failed ideas – European models of capitalism in the crisis