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Bringing Capital Back In, or Social Democracy Reconsidered: Employer Power, Cross-Class Alliances, and Centralization of Industrial Relations in Denmark and Sweden

Published online by Cambridge University Press:  13 June 2011

Peter Swenson
Peter Swenson
Affiliation:
Assistant Professor of Political Science at the University of Pennsylvania
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Abstract

The political domination of Social Democrats in Denmark and Sweden beginning in the 1930s was stabilized by the absence of intense opposition by capital to reformist programs aggressively opposed by business and the Right elsewhere in the world. This quiescence was not a symptom of weakness or dependency; rather, it was a product of a class-intersecting, cross-class alliance behind institutions of centralized industrial relations that served mutual interests of sectoral groupings dominating both union and employer confederations. Well-organized and militant, and backed by Social Democrats, employers in the two countries used offensive multi-industry lockouts to force centralization on reluctant unions. Analysis of these cross-class alliances and their pay-distributional objectives is used to challenge a widely held view that centralization and Social Democratic electoral strength are sources of power against capital. It also occasions a reassessment of conventional understandings of farmer-labor coalitions and the decline of industrial conflict in Scandinavia in the 1930s. According to the alternative view presented here, capital was included rather than excluded from these cross-class alliances, and industrial conflict subsided dramatically in part because employers achieved politically what they had previously tried to achieve with the lockout.

Type
Research Article
Information
World Politics , Volume 43 , Issue 4 , July 1991 , pp. 513 - 544
Copyright
Copyright © Trustees of Princeton University 1991

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References

1 See Walter Korpi and Shalev, Michael, “Strikes, Industrial Relations and Class Conflict in Capitalist Societies,” British Journal of Sociology 30 (June 1979), 164–87;Google Scholar idem, “Strikes, Power, and Politics in the Western Nations, 1900–1976,” in Zeitlin, Maurice, ed., Political Power and Social Theory, vol. 1 (Greenwich, Conn.: JAI Press, 1980)Google Scholar; and Korpi, , The Democratic Class Struggle (London: Routledge and Kegan Paul, 1983).Google Scholar See also distinct critiques of Korpi and related authors in Pontusson, Jonas, “Behind and beyond Social Democracy in Sweden,” New heft Review 143 (January-February 1984)Google Scholar; and Fulcher, James, “Labour Movement Theory versus Corporatism: Social Democracy in Sweden,” Sociology 21 (May 1987), 231–52, esp. 237–42.CrossRefGoogle Scholar

2 Note that the balance of power literature tends to see social democracy as a provider of positive-sum gains for both capital and labor. A coherent interpretation entails that capital's gains were imposed, not negotiated. Adam Prze worski's analyses of “class compromise” suggest a better alternative, as they emphasize the mutual advantages of institutional settlements rationally acted upon by both capital and labor. But he treats classes as unitary actors and therefore neglects intraclass conflict as a condition of cross-class settlements. See Przeworski, , Capitalism and Social Democracy (Cambridge: Cambridge University Press, 1985).CrossRefGoogle Scholar

3 See also Peter Swenson, “Labor and the Limits of the Welfare State: Intra-Class Conflict and Cross-Class Alliances in Sweden and West Germany,” Comparative Politics (forthcoming).

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6 The political economy literature ignores employer organization. Philippe Schmitter uses union organization as a proxy measure of corporatist organization in all other sectors; see Schmitter, , “Interest Intermediation and Regime Governability in Contemporary Western Europe and North America,” in Berger, Suzanne, ed., Organizing Interests in Western Europe: Pluralism, Corporatism, and the Transformation of Politics (Cambridge: Cambridge University Press, 1981), 293.Google Scholar Peter Katzenstein treats the organization of labor and business independently, but he measures intersectoral concentration in peak trade organizations rather than centralization of authority in employer organizations, which are often separate. See Katzenstein, , Small States in World Markets: Industrial Policy in Europe (Ithaca, N. Y.: Cornell University Press, 1985), 106.Google Scholar Trade, not employer associations, is the main focus of Schmitter, and Streeck, Wolfgang, eds., Private Interest Government: Beyond Market and State (London: Sage, 1985).Google Scholar

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25 According to one estimate, there could be a fivefold increase in labor hours per cubic yard for mixing, placing, and curing concrete over what was required in ordinary weather, due to extra waiting time and use of heaters and protective enclosures. See Pulver, H. E., Construction Estimates and Costs (New York: McGraw-Hill, 1947), 137Google Scholar; and also Stoddard, Ralph P., Brick Structures: How to Build Them (New York: McGraw-Hill, 1946), 47–50.Google Scholar

26 The relationship between temperature and high differentials in Table I does not show up for Poland and Yugoslavia, where—to speculate—perhaps less mass production in met-alworking, less urban-industrial construction, more repressive treatment of unions, and alternative livelihoods for construction workers in winter months affected relative wages differently.

27 For more on the unions’ distributional dilemmas (the “trilemma”) and their related attitudes toward bargaining structures, see Swenson (fn. 20).

28 See Galenson (fn. 9).

29 Stephens, John, The Transition from Capitalism to Socialism (London: Macmillan, 1979), 135.CrossRefGoogle Scholar To be fair, Stephens's analysis is eclectic: he correctly attributes earlier steps in centralization (pp. 42–45) to lockouts but also to “industrial infrastructure,” which is wrong (see pp. 53–35 below).

30 By saying capital was “induced to collaborate” Luebbert indicates incorrectly that capital was dominated, reluctant, and disadvantaged—if not fully “excluded.” See Luebbert, , “Social Foundations of Political Order in Interwar Europe,” World Politics 39 (July 1987), 449–78CrossRefGoogle Scholar, at 463–64.

31 In the same tradition Ronald Rogowski also depicts the social democratic coalition, at least in Sweden, as capital exclusive; see Rogowski, , Commerce and Coalitions (Princeton: Princeton University Press, 1990).Google Scholar

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34 Johansen, Hans Christian, The Danish Economy in the Twentieth Century (London: Croom Helm, 1987), 53–57.Google Scholar See also Rasmussen, Erik, Velfardstaten på Vej 1913–1939 (The coming of the welfare state 1913–1939) (Copenhagen: Politikens Forlag, 1965), 416–28Google Scholar; and Haue, Harry, Olsen, Jørgen, Aarup-Kristensen, Jøm, Det ny Danmark 1890–1978: Udvikolings-linier og tendens (The new Denmark, 1890–1978: Development patterns and tendencies) (Copenhagen: Munksgaard, 1980), 165–74.Google Scholar

35 Galenson, (fn. 9), 131.Google Scholar

36 On the Czechoslovakian farmer-labor coalition, Luebbert cites Harry Klepetar, who in reference to the effect on unions only mentions compulsory arbitration and legislative extension of arbitrated settlements to unorganized firms. See Klepetar, , Seit 1918: Eine Geschichte der Tschechoslowakjschen Republik (Since 1918: A history of the Czechoslovakian republic) (Moravska Ostrava: Julius Kittls, 1937), 351Google Scholar, 357. Such intervention elsewhere in Europe weakened unions by making them dependents of the state and increasing employer antagonism. On interwar and postwar Germany, see Feldman, Gerald and Steinisch, Irmgard, Industrie und Gewerkschaften 1918–1924: Die überforderte Zentralarbeitsgemeinschaft (Industry and unions, 1918–1924) (Stuttgart: Deutsche Verlags-Anstalt, 1985)CrossRefGoogle Scholar; and Anders, Karl, Stein für Stein [Stone by stone] (Hannover: Verlag für Literatur und Zeitgeschehen, 1969), 264–66.Google Scholar On interwar France, see Kendall, Walter, The Labour Movement in Europe (London: Allen Lane, 1975), 74.Google Scholar

37 See Nyman, Olle, Svensk parlamentarism 1932–1936: Frän minoritetsparlamentarism till majoritetskpalition (Swedish parliamentary government, 1932–1936: From minority government to majority coalition) (Uppsala: Almqvist and Wiksell, 1947), esp. 108–12, 136–37, 158, 528–32.Google Scholar

38 Peter Gourevitch collapses the 1933 crisis agreement with the Agrarians and the 1938 agreement and incorrectly characterizes the Saltsjöbaden negotiations in 1938 as a time when farmers and government met with labor and employers. He misstates the nature of the agreement between labor and employers by asserting that labor gave up demands for socialization and agreed not to strike and that business “accepted high wages.” In fact, business convinced the unions to accept wage restraint but not to renounce the use of strikes. See Gourevitch, , Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca, N. Y.: Cornell University Press, 1986), 26, 141, 152, 179, 231.Google Scholar

39 Luebbert makes a similar and intriguing argument in no way inconsistent with mine that small landowning farmers in Scandinavia were less reluctant than were such farmers elsewhere in Europe to join with Social Democrats because the latter had failed to make socialists out of many farm laborers and therefore to undermine class domination in the countryside.

40 Note that for Sweden much of the 1932 drop in construction wages is attributable to an improvement in the sample of employers reporting wages; the real drop came afterward. Calculations for Denmark are from average hourly earnings for skilled carpenters and metalworkers in Copenhagen, and average daily summer wages are for temporary male agricultural day laborers receiving board. For Sweden, average daily wages are calculated for all industrial workers, skilled and unskilled, and for male temporary day laborers paying their own board (summer only). See also Galenson, (fn. 9), 176–77.Google Scholar

41 Ingham, , Strikes and Industrial Conflict: Britain and Scandinavia (London: Macmillan, 1974).CrossRefGoogle Scholar An influential body of literature on comparative political economy has drawn on Ingham's thesis to help explain the economic and political peculiarities of small, open, exportoriented economies. See, e.g., Cameron, David, “The Expansion of the Public Economy: A Comparative Analysis,” American Political Science Review 72 (December 1978), 1243–61CrossRefGoogle Scholar, at 1256–57; and Stephens, (fn. 29), 42–44Google Scholar, 127, 141. In his analysis of the strong corporatist tendencies of small states, Peter Katzenstein does not dwell on the question of how or why employers and unions centralized and relies instead on Cameron and Stephens for their arguments. See Katzenstein, (fn. 6), 91, 104.Google Scholar

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43 See Pierson, Frank C., “Cooperation among Managements in Collective Bargaining,” Labor Law Journal 11 (July 1960), 621–28Google Scholar; Backman, Jules, Multi-Employer Bargaining (New York: New York University Institute of Labor Relations and Social Security, 1951), 15–18Google Scholar; and Ulman, Lloyd, “Connective Bargaining and Competitive Bargaining,” Scottish Journal of Political Economy 21 (June 1974).CrossRefGoogle Scholar

44 Jackson, and Sisson, , “Employers' Confederations in Sweden and the U. K. and the Significance of Industrial Infrastructure,” British Journal of Industrial Refotions 14 (November 1976).Google Scholar Walter Korpi challenges Ingham's data, arguing that if anything British industry is more concentrated in terms of the largest firms’; share of total industry employment; see Korpi, , The Working Class in Welfare Capitalism: Work Unions and Politics in Sweden (London: Routledge and Kegan Paul, 1978), 394.Google Scholar Curiously, like Ingham, even Korpi relies on data from the 1950s and 1960s; and neither speculates that these data might reflect consequences, and not causes, of earlier bargaining structures. In fact, centralized pay standardization in Sweden probably helped destroy many smaller enterprises.

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46 Similar arguments are made by Elvander, Nils, Skandinavisk arbetarrörelse (Stockholm: Liberfförlag, 1980), 312, 320, 333Google Scholar; and Martin, Andrew, “Wages, Profits, and Investment in Sweden,” in Lindberg, Leon N. and Maier, Charles S., eds., The Politics of Inflation and Economic Stagnation (Washington D. C.: Brookings Institution, 1985), 424–25.Google Scholar

47 See especially Przeworski, , “Social Democracy as a Historical Phenomenon,” New Left Review 122 (July-August 1980), 27–58Google Scholar; and idem, “Party Strategy, Class Organization, and Individual Voting,” in Przeworski (fn. 2), 99–132.

48 Castles, (fn. 4), 3–45.Google Scholar

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50 On the importance of employer recognition for union membership levels, see Clegg (fn. 5).

51 That they could have done so is suggested by Leif Lewin's intriguing analysis of the fragility of the initial red-green alliance and the potential ability of Agrarians to be bought off by the Right as well as the Left; see Lewin, , Ideologi och strategi (Stockholm: Norstedt, 1984).Google Scholar

52 Korpi and Shalev (fn. 1, 1979 and 1980); Cameron (fn. 45, 1984).

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54 Fulcher (fn. 1). But the court was not established until 1928, after the decline set in. Also, like Stephens and Luebbert, Fulcher errs in suggesting that the 1938 agreement followed a shift in employer strategy in response to Social Democratic power (pp. 237–42).

55 Figures from Det Statistiske Departement, Statistisk Aarbog for Danmark, various years. Denmark's official statistics do not break down lost man-days as do those from Sweden. Korpi and Shalev (fn. 1, 1980) do not discuss their sources, but the deficiencies of official data make it unlikely that they excluded locked-out workers in their measure of “strike involvement.” See also Ingham (fn. 41), 30. All seem to have taken their cue from Arthur M. Ross and Paul T. Hartman, who deliberately combined strikes and lockouts even when they were reported separately; see Ross, and Hartman, , Changing Patterns of Industrial Conflict (New York: Wiley, 1960), 184.Google Scholar The same holds for the comparative analysis of strikes in Shorter, Edward and Tilly, Charles, Strikes in France 1830–1968 (London: Cambridge University Press, 1974), 306–34.Google Scholar

56 After 1955 in Denmark and 1949 in Sweden, official statistics stop reporting lockouts. With the virtual disappearance of lockouts from 1937 onward in Denmark (when Social Democrats began using compulsory arbitration against the unions rather than against employers) and from 1939 onward in Sweden, the respective statistical bureaus stopped reporting them. Figures from Statistiska Centralbyrån, Statistisk årsbok för Sverige, various years; and Det Statistiske Departement, Statistisk Aarbog for Danmark, various years.

57 Between 1903 and 1935 the loss of man-days due to disputes relative to the number of organized workers in Denmark was greater than in Sweden in only five different years; in Norway, in only four different years. See Galenson, (fn. 9), 192.Google Scholar

58 Only recently have Americans witnessed such a lockout—in that most American of all industries, baseball.

59 The 1935 agreement between the labor and employers’ confederations (similar to the 1899 Danish and 1938 Swedish agreements) inaugurated Norway's “solidaristic wage policy” of holding back pay in construction, in consonance with employers’ lockouts and legal strategies; Galenson, Walter, Labor in Norway (New York: Russel and Russel, 1970), 80–81, 175, 245.Google Scholar Social Democrats and the metalworkers’ union joined employers in support of centralized control over militant building tradesmen (who bolted from the trade union confederation), especially high-pay masons in Oslo. See Dahl, Svein, “Norsk Arbeidsgiverforening 1927/28: Talbaketog og revurdering” (The Norwegian employers confederation 1927/28: Retreat and reevaluation), Historisk tidsskrift 1 (1981), 1–25Google Scholar; and Petersen, Erling, Norsk arbeids-giverforening, 1900–1950 (The Norwegian employers’ confederation, 1900–1950) (Oslo: NAF, 1950), 532–48.Google Scholar

60 See also Swenson (fn. 3).