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

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From one crisis to another: the Swedish model inturbulent times revisitedDominique Anxo1. IntroductionIn the mid-2000s, my colleague Harald Niklasson and I published anarticle, ‘The Swedish Model in Turbulent Times’, retracing the maindevelopments of the Swedish model since its inception in the early1950s up to the early 2000s (Anxo and Niklasson 2006). Our mainconclusion was that, at the turn of the century, the Swedish modelappeared more in line with the core components of the original Swedishmodel 1 than during the decades 1970–1980, which constituted, in ourviews, a clear deviation. During the 1990s, the economic policymodifications towards more restrictive and anti-inflationary macroeconomicpolicies, the re-orientation of active labour market policiestowards supply-oriented measures and the structural reformsundertaken in wage formation, tax and social protection systemssuggested a revival of the Swedish model. After a period of turbulencerelated to the early 1990s economic crisis, the Swedish economyunderwent particularly favourable economic development. Up to thecurrent global recession, unemployment oscillated between 5 and 6 percent, inflation was curbed and current account and public finances wererestored.1. Namely, a macroeconomic policy combining full employment and price stability, acentralised and coordinated wage bargaining system and the application of a wagenorm, the so-called ‘solidaristic’ wage policy based on fairness (same wage for thesame job independently of the profitability of the firm/industry) and efficiency (that is,fostering rationalisation at the company level and promoting productivity-enhancingstructural changes through closure of unproductive plants). Last but not least theimplementation of an ambitious countercyclical Active Labour Market Policy (ALMP)favouring occupational and geographical mobility. Low unemployment and fullemployment are to be secured mainly by supply-oriented ALMP programmesfavouring a reallocation of the labour force from the declining parts of the economy tothe expanding ones.A triumph of failed ideas – European models of capitalism in the crisis 27
Dominique Anxo.................................................................................................................................................................Although the re-orientation of macroeconomic and employment policyduring this period might explain the ‘Swedish success story’, themodifications in Swedish industrial relations – in particular, the cleartendency to re-coordinate wage bargaining – without doubt played avital role in the Swedish recovery. These new developments reflected adesire on both sides of industry to re-coordinate collective bargaining atindustry level and restore the leading role of the traded good sectors inwage formation. The tendency towards a re-coordination of collectivebargaining co-existed with a marked tendency to the decentralisationand individualisation of wage setting and working conditions.We also claimed that strong trade union organisations and high uniondensity at company level ensured the implementation of negotiatedforms of individualisation and differentiation (negotiated flexibility). Inour view, these tendencies should not be interpreted as a weakening ofthe Swedish collective bargaining tradition, but rather as a recompositionand adaptation of the Swedish model of industrial relations in the faceof the major transformations of work organisation and productionprocesses over recent decades. In our view, these developments did notcall into question the basis of the Swedish model, namely a strongcontractual tradition based on the existence of powerful social partnerswho enjoy considerable autonomy from the public authorities, butinstead reflected a transition and adjustment of the Swedish model tothe new challenges posed by post-industrial societies.Also during this period, the various reforms of the Swedish socialprotection system essentially took the form of a temporary reduction ofincome compensation and, perhaps with the exception of the fundamentalrestructuring of the pension system, left the architecture of the Swedishwelfare state system almost intact. The Swedish social protection systemremained, by international standards, clearly universal and inclusive innature and still enjoyed a high level of across-the-board political andpublic support. The structural reforms undertaken in the tax and benefitsystem – in particular, the reshaping of the pension system and the taxreform initiated in the early 1990s aimed at strengthening workincentives and fostering investment in human capital – was also clearly inline with the general philosophy of the original Swedish model favouringthe ‘work first line’, integrative transitions across the life course instead ofpassive support and social exclusion.28 A triumph of failed ideas – European models of capitalism in the crisis
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Hungary’s full-blown malaiseAndr
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Italy: Chronicle of a crisis foreto
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List of contributors...............
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EuropeanTrade Union InstituteBd du
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