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

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