Postwar Planning Policies Trade Union Representational Rights: A Comparison of British, Swedish Austrian Reforms, 1945-55 (WPS 60, 1995) Jytte Klausen

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Postwar Planning Policies and Trade Union Representational Rights: A Comparison of British, Swedish and Austrian Reforms, 1945-55* by Jytte Klausen Brandeis University

Working Paper No. 60

Abstract The paper examines the power paradox associated with the Westminster system, as it has lentitself to cycles of refonn and repeal. The contrast is the coalition-building produced by electoralstalemate in countries with prcpotional representation. It is argued that democratic economicplanning and trade union accommodation became possible by mid-century only under specificcircumstances: power-sharing, Keynesian economic policy means, and cohesive trade unionism.A key factor is the facilitation of confederational control that occurs when coalition-building isimperative for the attainment of control over policies.

*J am grateful to Gary Marks, Peter A. Hall, Michael Edelstein, and rarticularly Louise A. Tilly for reading this raper andmaking suggstions. It was written while Iwas aVisiting Scholar at the Center for European Studies at Harvard University.


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Introduction

European Socia l i s t s regarded the twent ie th century with g rea topt imism, expect ing it to be ' l a bo r ' s cen t u ry ' . To th e minds o fth e t h eo r i s t s of re fo rmis t Soc ia l Democracy, l i ke the German andSwedish Socia l Democratic th inkers , Eduard Berns te in (1850-1932)and Hjalmar Brant ing (1860-1925), th e at ta inment of suff rage wouldinev i t ab ly lead to the p o l i t i c a l power of th e working-c lass , as itwas expected to grow to inc lude a major i ty o f th e popula t ion . Oneconomic i s su es , elements o f Marxis t t h ink ing still remained impor tan t to th e re fo rmis t s . Soc ia l i za t ion of the means o f product i on was regarded as e s s e n t i a l to th e rea l i za t ion of p o l i t i c a ldemocracy and economic equal i ty . Democratic social ism n ecessa r i l yimpl ied a t r ansformat ion of cap i ta l i sm and ' economic ' c i t i zensh ipfo r the working-c lass . 1 Af t e r 1945, welfa re cap i ta l i sm provided ad i f f e r e n t framework fo r the rea l i za t ion o f l ab o r ' s asp i r a t i o n sthan o r i g i n a l l y expected, as economic c i t i zensh ip became ves ted ,not in co l l ec t ive ownership, but in th e welfa re s t a t e and in economic planning and c ro ss -c l a ss conc i l i a t ion .

One of th e puzzles in the h i s t o ry o f post-World War I I re forms i s why th e B r i t i s h Labour Government, 1945-51, fa i l ed toc rea t e l a s t i n g economic planning i n s t i t u t i o n s . This f a i lu re becomes only more puzzl ing as one considers the excep t ional ly s t rongsuppor t fo r economic planning pol i c i e s among Labour Par ty e l i t e sand o th e r e l i t e s a t th e t ime. 2 I t a lso s t ands in sharp co n t r a s t tothe ul t imate ly more success fu l co n t in en ta l Socia l Democrat ic l abormovements th e Austr ian and th e Swedish ones are the pr imaryexamples - where l a b o r ' s p o l i t i c a l power was a t f i r s t muted bypower-shar ing arrangement with cen te r - r igh t p a r t i e s butnever the less produced a pro tec ted ro le fo r t rade unions inplanning and economic policy-making more broadly . A ll t h r ee l aborp a r t i e s had a hi s to ry of s t rong l inks between par ty and t r ad eunions , subsc r ibed to re fo rmis t or c o l l e c t i v i s t ideas regarding

1For an e x p l i c a t i o n of the Soc ia l Democratic view, see Cas t l e s (1978); Korpi (1983) . 2Durb in (1985). For an account of publ i c and e l i t e opinions ou ts ide Labour Par ty c i r c l e s , see Howarth (1985).


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ones . 5 Despi te an ex tens ive l i t e r a t u re on neocorpora t i sm, th e p re c i se mechanisms by which group r igh t s and ' economic c i t i z en s h ip 'become i n s t i t u t i o n a l i zed a re not wel l unders tood . 6

I begin by focusing upon th e 'window of o p p o r tu n i ty ' c rea t edby th e t r an s i t i o n from wartime regu la t ion to peace- t ime reform fo ra d i f f e r e n t ro le fo r Bri t i sh t rade unions in th e determinat ion o fnat iona l economic p o l i cy . (The s i g n i f i c a n t pol icy s ta tements andac t s di scussed in th e fo l lowing a re l i s t e d chronolog ica l ly in anappendix . ) Next, th e dive rgen t pa ths o f Swedish and Austr ian p o s t war economic reforms a re in t roduced. The comparison seeks to i dent i f y the cond i t ions under which pol icy i n s t i t u t i o n s promote th einc lus ion of t rade unions as a p i l l a r in organized cap i t a l i sm .Great Britain: Reform and Repea1, 1945-51

In Bri t a in , h i s to r i ca l exper ience and contemporary t h eo r i e sregarding planning o f fe red d i f f e r e n t models fo r c a p i t a l i s t s t ab i l i z a t i o n based upon th e cur ta i lment of compet i t ion. Somewhat mecha n i s t i c marxis t th ink ing on c a p i t a l i s t reform had shaped th eLabour P a r t y ' s Cons t i tu t ion (1918) and cont inued to in f luence theP ar ty ' s Recons t ruc t ion Program's emphasis upon n a t i o n a l i za t i o n andeconomic planning (The Old World and th e New Socie ty 1942). Thei n s t i t u t i o n s and in termediary goa ls fo r economic planning weremostly l e f t undef ined . Sovie t - s ty le planning had widespread supp o r t on th e P a r t y ' s Lef t , which prefer red government appropr ia t iono f in d u s t ry and th e c rea t io n of a command economy. The i deas o fB r i t a i n ' s most famous planner , J . M. Keynes who, a f t e r a l l , was aL ib e ra l , d id not appea l much to t he Pa r ty planners . Thei r i deaswere b e t t e r expressed by Evan Durbin who ca l l ed fo r th e crea t iono f "some kind of Centra l Author i ty with power over indus t ry and

5These advantages have now been wel l -es tab l i shed . During the pas t decades ofgene r a l t r ade union dec l ine , membership has cont inued only to inc rease incoun t r ies where th e t r ade unions play a ro le in the admin is t r a t ion of unemployment b e n e f i t s , see Roths te in (1992) and OECD (1991), pp. 97-134.6The l i t e r a t u r e i s very l a rge , fo r an overview see Del l 'Ar inga (1992) o rCrouch (1993). Recent c r i t i c s have charged t h a t the l i t e r a t u r e has misspec i f i ed o r even reversed th e causa l l ink between organ iza t iona l s t r u c t u r eand p o l i t i c a l outcomes, see Thelen (1994) and Golden (1993) .


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f inance" to ac t as a "Supreme Economic Author i ty" .7 I t is n o te worthy t h a t Durbin, l i ke Harold Laski who a l so was an impor tantf igure in Party debates , argued t h a t in a planned economy th e re l a t ionsh ip between unions and indus t ry had to change. Both cons id ered some curbs on t rade union wage bargaining to be i nev i t ab le .

Keynes 's co n c i l i a t o ry approach t o c ross -c l a s s co l labora t ionand emphasis upon d i s t an t management of th e economy by means o ff i s c a l and monetary pol icy d id f ind not suppor t in the Labour Par ty u n t i l l a t e r , a f t e r t ~ e c o l l e c t i v i s t s t r a t eg y had proven unworkab l e . Car te l l i za t ion and Crown monopolies represen ted bus iness ' sown a l t e r n a t i v e t o unfe t t e red compet i t ion . Business organ iza t ionsl ike th e Federa t ion o f Bri t i sh Indust r i es (FBI) - a p recu rso r toth e p resen t Confedera t ion of Bri t i sh Indust r i es (CBI) - and arange of indus t ry asso c i a t i o n s , had been ac t ive in wartime regu l a t i o n s both dur ing World War I and I I . (The FBI was crea ted in1916.) During th e war, Labour members of th e wartime Coal i t ionGovernment favored the corpora t i s t model o f Frankl in Roosevel t ' sNat ional Recovery Adminis t ra t ion (1933-35). Staf fo rd Cripps , whowould be one of th e key economic pol icy makers in the postwarLabour Government, was insp i red by th e Tennessee Valley Author i tywhen making plans fo r government 's ro le in postwar economic devel opment. 8 The New Deal model represented an a l te rna t ive to bothbus iness c a r t e l l i z a t i o n and to th e Par ty planners orthodoxy by in cluding a ro le fo r both bus iness and t rade unions in corpora t i s tagenc ies .

In 1945, it was still undecided what exac t mix o f corpora t i sm, na t iona l i za t ion , and coordinat ion o r simple command, wouldgo i n to postwar planning. But by th e t ime the Labour Governments tepped down in 1951 t h i s was l a rge ly se t t l e d . I t had proven mored i f f i c u l t to execute what Anthony Crosland - who in th e 1950sformula ted a ' r e v i s i o n i s t ' version o f th e Labour P ar ty ' s economic7Durb in (1949), pp. 52-53. Durbin died in a drowning acc ident in 1948. Hisro le in def in ing the Labour P a r t y ' s ideas has been desc r ibed by h is daughterin Durbin (1985). Another i n f l u e n t i a l f igure with s imi la r views wa s HaroldLaski (1893-1950) who served on th e Nat ional Executive Committee (NEC) o f theLabour Par ty from 1936 and was chairman of th e Par ty in 1945-46. On Lask i ' sview on mat te r s o f wage po l icy , see Kramnick and Sheerman (1993), p . 547.8Barnet t (1986), 256.


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pol icy theory - re fe r red to "the t r an s f e r of power from managementto labor" than th e Par ty planners had expected. 9 The Labour Par ty ' seconomic po l ic ies took tw o conf l i c t ing d i rec t ions . One would l eaddown th e road to indus t r i a l mil i tancy and th e decen t ra l i za t ion ofi n d u s t r i a l re l a t ions a l l the way to the shop f loor and th e shops tewards ' movement in the 1960s. 10 The other l ead to the r e t r e a t o fgovernment from di rec t involvement in economic management to Keynesian management re ly ing on f i s ca l s t imula t ion and occas ionalcon t rac t ion- the ' s t o p -g o ' cycles of postwar Br i t i sh economic p o l icy to which both Conservat ive and Labour governments surrenderedin the fo l lowing decades.

A number o f explana t ions of the f a i lu re o f the Labour Par tyto i n s t i t u t e economic planning have been offered . Samuel Beer a r gued t h a t t rade union opposi t ion was th e main cause o f th e f a i l ure . 11 Andrew Shonf ie ld found the Labour Par ty to be naive andcur ious ly l ack ing in unders tanding of what economic planning in vOlved. 12 Neo-marxis t scho larsh ip placed th e re spons ib i l i t y fo r th ef a i l u r e with th e Labour Par ty e l i t e s . One exponent , Leo Pani t chdenounced Beer ' s explanat ion as "highly d ivorced from rea l i ty" .13 Core l l i Barnet t , in con t ra s t , o f fe red a b i t ing indic tment of the"New Jerusalem" vis ions o f the postwar labour government t h a t madeit give p r i o r i t y to so c i a l reforms without concern fo r th e capaci t y to pay fo r such.14 Recent ly , James Fulcher has argued , inaccordance with the cu r ren t pre fe rence fo r n eo - in s t i t u t i o n a l i s t

9Crossland (1956), p . 30.laThe l abe l ' m i l i t a n t ' does not imply p o l i t i c a l r ad ica l ism bu t , simply, as t r a t egy t h a t aims to obta in the bes t poss ib le economic r e s u l t s fo r themembership by means of t r ade union barga ining power in the l abour market . 'Respons ib le ' o r ' i n c l u s i v e ' unionism, in tu rn , r e f e r s to a union s t r a t egy whichaccepts r e sp o n s i b i l i t y fo r overa l l na t iona l pol i cy p r i o r i t i e s and aim toachieve long-term macro-economic goals r a the r than immediate gr a t i f i ca t i on inthe wage barga in , see Visse r (1989); Lange (1984).11Seer (1965), p . 200.12 Shonf ie ld (1965), p . 93.13 pan i t ch (1976), p . 10. He argued in s tead t h a t th e Par ty ' s th inker s had pa idvery little a t ten t ion to what th e unions ' ro le would be in a soc ia l i zed economy and, in any case , subscr ibed to a ' s i m p l i s t i c ' d i s t i n c t i o n between i n d i c a t ive plann ing and t o t a l i t a r i an planning which made them s tep back from e f f e c t i v e plann ing , ib id . , p . 13. Examples of the neo-marxis t pos i t ion are , Crouch(1979); Pani tch (1981); Jessop (1982). Pan i t ch ' s view regard ing th e cu lpab i l i t y of Labour l eader s became a s t ap le of neo-marxis t ana lys i s .14Barne t t (1986) , 23 8 and 263.
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i n t e rp r e t a t i o n , t h a t th e absence of a Br i t i sh 'LO' t h a t i s , at rade union confedera t i Jn comparable to th e Swedish 'Landsorgani sa t i o n ' - and the f a i lu re a t subsequent junc tu res to accomplishcen t ra l i za t ion in the Bri t i sh l abor movement, prevented c ro ss c l a ss coord ina t ion and th e formation of an i n d u s t r i a l re l a t ionssystem t h a t would have sus ta ined a Soc ia l Democrat ic welfares t a t e . 15

When the postwar Labour Government s tepped back from economicplanning designs involving compulsion o r s t a tu to ry in te rven t ion ,it d id so on sev e ra l occasions in response to t rade union objec t i o n s . (The t r ad e unions were wel l represented in th e Government,see note fo r a list o f the main ac to rs . 16) One key decis ion wasmade immediately , in 1945, when the Government agreed to r ep ea lwartime r e s t r i c t i o n s on t rade union behavior , re s to r ing t r ad eunion immunit ies and co l l ec t ive bargaining autonomy.17 The r e s t o r a t i on had impl ica t ions both fo r na t iona l wage pol icy and fo r thecapaci ty of the na t iona l t rade union confedera t ion ( the TradesUnion Congress, TUC) to represen t labor as a nat iona l ac to r inpol icy-making.

Joseph A. Schumpeter once warned bus iness t h a t , a t th e end ofthe war, th e planners had a l ready won the ba t t l e . Since th e s t a t ea l ready con t ro l l ed everything, a consensual t rans i t ion to peace15Unfo r tuna te ly , he does net look a t postwar reforms as an oppor tuni ty l o s t ;Fulcher (1991), p . 325. ,16 0n the Government s ide , the most impor tant ac to r s were Clement R. Att lee(PM), Herber t S. Morrison, Hugh Dalton, S ir R. Staf fo rd Cripps , and Ernes tBevin. The most impor tant t r ade unions (pres idents l i s t e d in parenthes is )were; Amalgamated Union of Engineer ing Workers ( represented by J . Tanner) ,Ele c t r i c a l Trades Union (F. Foulkes) , Nat ional Union of General and MunicipalWorkers (T . Will iamson) , Na t iona l Union of Mineworkers (A. Horner) , Transpor tand General Workers Union (A. Deakin) . Both Bevin and Morrison had a background in th e unions. Foulkes and Horner were both Communists. Th e TUC GeneralCounci l wa s r epr e sen ted by the P res iden t , S ir J . Hallswor th , supplemented bywil l i amson and Deakin . Th e General Counci l r epr e sen t s th e TUC between AnnualCongress meet ings . In order to d i s t ingu ish between th e annual meetings of thet r ade unions and the Par ty , th e meetings of th e former are r e f e r r ed to asAnnual Congress (or s imply Congress) , while th e meetings of th e l a t t e r a rer e f e r r ed to as Conference.17The ' immuni t i es ' in ques t ion exempted th e t r ade unions from common lawl i a b i l i t i e s . Among the more notor ious ac t ions used were ' secondary p i c k e t s ' o r' f l y i ng p i cke t s ' , which m i l i t a n t unions cou ld use to shu t down work a t s i t esnot d i r e c t l y r e l a t e d to th e c o n f l i c t . In th e 1980s, a se r ie s o f Conservat iveEmployment Acts chipped away a t immunit ies to def ine a cons t r a ined space fo rleg i t imate i n d u s t r i a l ac t ion . For an overview, see Edwards e t a l . (1992), pp.10-17.
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t ime planning was the b es t bus iness could hope fo r . 18 This app l iedto th e t rade unions , as wel l . Like business , they were sub jec tedto a se r ies of wartime co n s t r a i n t s which, with some reform, couldhave formed th e bas i s fo r a coordina ted approach to wage r eg u la t ion and plann ing . In genera l , postwar reforms based upon ex ten s ions and amendments o f wartime regu la t ions o f t en paved th e roadfo r a new ro le fo r governments in peace- t ime. In Bri t a in , t h i s oppor tun i ty wa s passed up. Why t h i s happened i s an in te res t ing pieceo f th e grea te r puzzle regarding the f a i lu res of Br i t i sh postwareconomic pol icy_

Pani t ch ' s argument t h a t the unions would have acceptedr e s t r a i n t s , i f th e 1945-51 Labour Government had app l ied more d ra conian measures aga ins t indus t ry , i s dis ingenuous fo r severa l rea sons . Fi r s t , there were contemporary voices both within th et r ad e unions and the Par ty - t h a t emphasized th e need fo r anat iona l wage pol icy and fo r TUC overs igh t in mat ters o fco l l ec t ive barga in ing . These voice const i tu ted a minori ty bu t theyd id sugges t an i n t e r e s t a l so on the pa r t of some t rade un ion i s t sin a d i f f e r en t s t ra t egy . Second, prospec t s looked bleak enough asthey were from the perspec t ive of bus iness . Labour ' s 1945e l ec to r a l pla t fo rm, Let Us Face the Future , promised fu l lemployment, pr i ce con t ro l s , and good wages. In order to achievethese goals , economic pol icy should aim to cure ' under consumpt ion ' and r e s t r i c t b u s i n ess ' s d i scre t ionary con t ro l overeconomic decis ions through soc ia l i za t ion . In i t s r eco n s t ru c t io nprogram from 1942, Labour had declared t h a t U[aJ planned Socie tymust rep lace th e old compet i t ive soc ie ty" .

The l eg i s l a t i v e program of th e postwar Labour Governmentcould hardly be accused of being over ly f r i end ly to th e i n t e r e s t sof bus iness . Steps were taken immediately in 1945 to na t iona l i zethe Bank o f England and a number of i ndus t r i e s , inc lud ing te lecommunicat ions , coal , e l e c t r i c i t y and gas , ra i lways, canals , av i a t i o n , and some types of road t r anspor t a t ion . 19 Consul t a t ive 'Work

18 sc humpeter (1950), p . 375. 19For an account of economic cons ide r a t ions behind th e na t iona l i za t ion program, see Foreman-Peck and Milward (1994), p . 288.


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ing P a r t i e s ' were c rea t ed fo r f i f t e en indus t r i e s in p repara t ionfor the se t t ing up of t r i p a r t i t e planning agencies and th e 1947In d u s t r i a l Organiza t ion and Deyelopment Act . In 1946, the i ron ands t e e l indus t ry was nat iona l i zed . Comprehensive soc ia l reform, educa t ion reform, and changing f i s ca l pol i c i e s aiming a t r ed i s t r i b u t i on complimented economic reforms. The p o l i t i c a l rhe to r i c of theday por tended revo lu t ionary change, e .g . a s ta tement by S ir Shawcross on th e occas ion of the passage of l eg i s l a t i o n t o re s to ret r ad e union immunit ies: "We are th e masters of th e moment-and notonly fo r th e moment, but fo r a very long t ime to come".20

The TUC's decis ion in 1944-45 - which was reaf f i rmed in 194551 - to defend unregula ted t rade unionism (of ten re fe r red to as' vo lun tar i sm' ) as an a l l - impor tan t pr inc ip l e i s a puzzle fo r seve r a l reasons . We would expect o rg an iza t io n a l i n t e r e s t to p u l l inthe o ther di rec t ion , t h a t i s , to motivate th e TUC to se ize th e oppor tun i ty to pro tec t i t s ro le in economic pol icy-making and to en hance i t s o rg an iza t io n a l capac i t i e s . I t i s a l so a puzzle becauseimpor tant i ssues were a t s take beyond o rg an iza t io n a l s e l f i n t e r e s t . Trade union insurgency t e s ted th e Labour Government ' sp o l i c i e s , and the futur= of Labour ' s economic p o l i c i e s . By opposing regu la t ion o f union behavior , th e TUC undermined i t s own o rgan iza t iona l capac i t ies and preempted th e oppor tun i ty to i n t eg ra t ewage-se t t ing with nat iona l economic and soc ia l p o l i c i e s .

In the discuss ion t h a t fol lows a d is t inc t ion i s made betweent rade union reform and wage pol icy . While th e former re fe r s toregu la t ion o f t rade union behavior and th e quest ion of the r e s to r a t ion of t r ad e union imnlunit ies in p a r t i cu l a r , th e l a t t e r r e f e r sto wage pol icy i s su es . In p rac t i ce , ru les d i rec ted a t modifyingt r ad e union behavior , e .g . the co nso l ida t ion o f confedera t ionalco n t ro l over wage barga in ing , had impl ica t ions fo r wage pol icy .Formally , each had d i s t i n c t i v e aims yet ru le-making on one aspec twas c lea r ly l inked to ru le making on the o ther , o f ten addressed byd i f f e r e n t passages of th e same regu la t ion .

20Butler and Sloman (1975), p . 227.
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Trade Union Reform

During th e War, th e General Counci l had obta ined a monopolyupon the o f f i c i a l r ep resen ta t i o n of t r ad e union i n t e r e s t s to th eCoal i t ion Government. Since wartime con t ro l s involved d i r ec t governmental overs igh t o f wage s e t t i n g , the TUC became more engagedin wage pol icy than it had been or subsequent ly became. In th e immediate postwar years , the Genera l Council still exerc i sed a g rea tdea l o f au thor i ty but , lacking the i n s t i t u t i o n a l i zed co n t ro l s t h a tthe Swedish LO and th e Aus t r ian 6GB acquired, i t s power soonwaned. Among th e most impor tant such co n t ro l s were th e capaci ty tocon t ro l wage bargaining by requ i r ing a f f i l i a t e d unions to seekconfedera t ional approval pr io r t o th e i n i t i a t i on o f barga in ing andr e s t r i c t i o n s on s t r i k i n g in contex t unre la ted to o f f i c i a l b arg a in ing procedures . These i ~ c l u d e ru les fo r a r b i t r a t i o n and sanc t ionsoverseen by a ' n e u t r a l ' p ar ty such as l abor cour t s c rea t ed e i t h e rby means o f l eg i s la t ion (German system) o r p r i v a t e agreement withemployers (Swedish and Aus t r ian systems) .

The TUC's subsequent loss of co n t ro l stemmed to no smal l degree from i t s i n a b i l i t y , in the 1945-51 per iod , to t ake advantageof oppor tun i t i es to mainta in and enhance con t ro l . In 1949, therewere about 70 0 separa te t rade unions , more than h a l f of which hadl e s s than a thousand members. The seventeen l a rges t unions , however , represen ted two- th i rds of a l l union members and, among thel a rg e s t unions , only tw o whi te -co l l a r unions d id not belong to th eTUC.21 Out o f an aggregate union membership of 9.3 mil l ion people ,c lose to e i g h t mil l ion belonged to TUC a f f i l i a t e d unions . In 1949,Denmark had a t o t a l t rade union membership of 636,000 d i s t r i b u t e dover 72 nat iona l union federa t ions . Sweden had 1,256,000 t radeunion members in 44 n a t io n a l federa t ions . In comparison, it i s th es i ze of th e membership r a t h e r than th e degree o f f ragmenta t iont h a t s t ands out as a s ign i f i can t di f fe rence .

One o f th e f i r s t ac t s of the Labour Government was t h e r ep ea lof th e Trades Disputes and Trade Unions Act (1927) . The Act had

21Nat iona l Associa t ion of Local Government Officers and th e Nat iona l Assoc ia t ion of Teachers.


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been passed in response to th e 1926 General St r i k e , a nine-days t r i k e ca l l ed by th e TUC in suppor t of s t r ik ing miners . The conf l i c t or ig ina ted in a th ree-way dispu te between the Conservat iveBaldwin Government, th e mine owners and th e mine workers ' union .The TUC had ea r l y in the c o n f l i c t committed i t s e l f to a sympathys t r i k e , apparen t ly expec t ing th e Government to give in . When th eConservat ive major i ty in par l iament i n s t ead decided to t r e a t th es t r i k e as a cons t i t u t iona l t h r e a t , th e TUC was forced to c a l l agenera l s t r i k e . 22 The s t r i k e s tands as one of t h e g rea t milestonesin B r i t i s h i n d u s t r i a l re l a t ions , as a f iasco and as t h e p ro g en i to rof th e 1927 Act. The Act proh ib i ted p o l i t i c a l s t r i k e s , s t r i k e st h a t harmed the community, and sympathy s t r i k e s or lockout s . I ta l so prevented c i v i l serv ice unions from j o in ing th e TUC, and imposed r e s t r i c t i o n s on union ' s p o l i t i c a l a c t iv i t i e s and th e r a i s i n gof money fo r the Labour Par ty th rough a p o l i t i c a l levy.23 The Actwas a symbol of Conservat ive h o s t i l i t y to th e t rade unions . Thes t r i k e , however, could appropr ia te ly be seen as a symbol of th ecorros ive in f luence of the mining i ndus t ry ' s problem fo rtwent ie th -cen tury B ri t i sh indu s t r i a l r e la t ions in genera l . Therepea l 1945 o f th e 1927 Act s tands out , in r e t ro sp ec t , as animpor tant s tep in th e wrong d i r ec t i o n . By making a p r i n c i p l ed commitment to volun ta r i sm, it subsequent ly became more d i f f i c u l t topersuade th e t r ad e unions to accept curbs on t h e i r freedom of ac t i on and th e need fo r di sc ip l ine in suppor t of nat iona l reformp o l i c i e s .

E a r l i e r o p p o r tu n i t i e s t o change the 1927 Act had fa i l ed , mostimportant ly dur ing th e second Labour Government in 1929-31. Onsev e ra l occasions, it ~ a s debated if the Labour Par ty should seekto amend th e Act r a t h e r than aim fo r i t s r ep ea l . Most of th e TUC'sanger was focused upon t he c l auses proh ib i t ing c i v i l se rv i ce union22 Phelps Brown (1987), p . 85. 23The 1927 Act made it i l l e g a l to co l lec t a levy fo r t he Pa r ty from th e mem be r sh ip , excep t when members had express ly agreed; i . e . ' c o n t r a c t e d - in ' . Prev ious ly , members had to ' c o n t r a c t - o u t ' from paying th e p o l i t i c a l levy by f i l l i n g o ut a form. Th e repea l r es to red th e pr inc ip le of ' con t rac t ing -ou t ' with the e f f e c t t h a t th e share of levy-paying members doubled to almost 90%, see Harr i son (1960), p . 32 . Th e Par ty f inanc ing i s sue , as wel l as o ther aspec t o f th e 1927 Act , resur faced in th e Thatcher Governments t r ade union l eg i s l a t ion .


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a f f i l i a t i o n and regu la t ing the co l lec t ion of p o l i t i c a l con t r ibut i o n s , while r e t a i n i n g t h e prov is ions aga ins t p o l i t i c a l s t r i k e swas debated . The TUC Legal Advisory bureau recommended, fo r examp l e , in 1929 t h a t th e General Council accept an amendment def in ingan area o f l eg a l i t y fo r s t r ik ing . This recommendation was broughtup again in 1941. 24 During World War I I , the TUC repea ted ly p e t i t ioned the Coa l i t ion Government fo r changes in the 1927 Act . Byth e 1945 e l e c t i o ~ campaign, some caut ioned t ha t a demand fo r r e p ea l would provide th e Conservat ive Party with an oppor tun i ty toaccuse Labour o f suppor t ing p o l i t i c a l s t r i k e s . In the end, a compromise was forged which committed th e Labour Par ty leadersh ip toa complete r ep ea l but the TUC to of f i c i a l l y only ask fo r amendment. 25 The new Labour Cabinet promptly l ived up to i t s promise andrepea l the 1927 Act bu t other regu la t ions curbing t rade union immunity were kept on th e books.

Trade union immunity was a l so a t i s sue in connect ion with awartime regu la t ion (Order 1305) which had c rea t ed a Nat ional Arbi t ra t ion Tribunal with th e power to impose binding agreements upont rade unions and employers and made it i l l e g a l to s t r i k e . The O rd e r ' s app l ica t ion ag a in s t employers had in p a r t i cu l a r bene f i t t edthe weaker t rade unions . They argued ag a in s t repea l and fo r p o s t war l eg i s l a t i o n rep l i ca t ing some o f i t s prov is ions . The a n t i s t r i k in g prov is ions were used spar ing ly dur ing th e war, as ev i denced by the cont inuat ion dur ing th e War of work s toppages . 26

The TUC General Counci l and the Cabinet agreed to repeatedex tens ions of th e Order u n t i l 1951. I t was a t tacked by some unionsa t success ive Annual Congress meetings but the TUC General Councildefended it while s teer ing a narrow course of compromise. 27 On the

24 La bour Par ty Report (1941), p. 186.25At th e pos t - e l ec t ion 1945 TUC Annual Congress , pr e t ense was kept up whenWalter C i t r i n e , th e General Secre ta ry expressed h is gra t i tude to th e Government fo r minding th e union i n t e r e s t "wi thout prompting". In r ea l i t y , th eGenera l Council had made immediate repea l a condi t ion fo r not making an i s sueo f it in th e e l e c to r a l campaign, see TUC Report (1945), p . 244. See a l so Allen(1960) , pp. 261-64.26Al len (1960) , p . 141. S e ~ also Phelps Brown (1987), p . 97.27 The Nat iona l Union of Genera l and Municipal Workers wa s one union t h a t suppor t ed th e a r b i t r a t i o n procedure as a means fo r d i sc i p l i n i n g employers (TUC 1946, 369) .


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one hand, th e General Council acknowledged t h a t th e Order c o n s t i t u t ed an inf r ingement of the volun ta r i s t p r inc ip l e because it ' c u tboth ways ' ; it could be app l ied to unions as wel l as employers. Onthe o th e r hand, th e O r d ~ r was worth keeping anyway because it gavethe unions a weapon ag a in s t r eca l c i t r an t employers by fo rc ing themto barga in with unions . Support fo r the Order came espec ia l ly fromunions represen t ing poor ly organized i ndus t r i e s , o f t en with manysmal l employers.

The General Council appears to have gambled t h a t , under aLabour Government, th e b en e f i t s from the p rov is ions compel l ing em ployers to a r b i t r a t i o n and binding agreements outweighed th e pol i t i c a l r i sk o f th e Order ' s app l ica t ion ag a in s t s t r i k e r s . The TUChad a l ready been promised t h a t th e a r b i t r a t i o n system would bediscont inued in the even t of a change in government, s ince the a rb i t r a t i o n system res ted on temporary extensions to which th e TUChad to agree . Replacement language had been passed in connect ionwith th e 1945 Wage Councils Act (d iscussed in the fo l lowing). Thiswas des igned to kick in once th e Order was discont inued. In cont r a s t , th e new prov is ions in th e 1945 Act only ca l l ed fo r volunt a ry and non-binding a r ~ i t r a t i o n to be ac t i v a t ed if bothemployers and unions agreed to a r b i t r a t i o n . In subsequent years ,co n f l i c t arose between proponent and opponents o f arb i t ra t ion asto whether t h i s language was s u f f i c i e n t to serve th e weaker unionswel l .

In 1951, th e tenuous compromise over the use of the a r b i t r a t ion system broke down. The circumstances o f th e breakdown i l l u s t r a t e th e dilemma t h a t th e quest ion c rea t ed fo r the Government andth e TUC l eadersh ip . A s t r ike by 1,700 gas maintenance workersag a in s t a co n t rac t s igned by t h e i r union in te r rup ted th e supply o fgas. The Labour Government decided to apply th e Order aga ins t th es t r i k e r s , ten of who were given pr i son sen tences . 28 Eventual ly , th es t r ike was se t t l e d and the punishment reduced to a f ine but th eun ions ' anger had been aroused. In a second i n c id en t a few monthsl a t e r , in February 1951, seven members of the t r an sp o r t workers

28Allen (1960) , pp. 268-270


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union (TGWU) were a r re s t ed fo r i nc i t i ng dock workers to s t r i k e .This i n c id en t caused th e General Counci l to demand th e Order wi th

,

drawn immediate ly . The Minis te r o f Labour acquiesced. 29The repea l res to red th e immunit ies confe r red upon unions by

th e 1906 Trades Disputes Act and the 1913 Trade Union Act whichhad been in tended t o p ro t ec t unions agains t th e ap p l i ca t io n ofa n t i t r u s t l e g i s l a t i o n by hos t i l e co u r t s , but a l so to encourages e l f - r e g u l a t i o n . Both ac t s had been passed by Libera l governments ,a t a t ime when e f f o r t s to encourage the development o f a volun ta ryframework fo r coopera t ion between employers and t rade unionslooked as if they were going to bear f r u i t .

The loss o f compulsory a rb i t r a t i o n was decr i ed by someunions . At th e 1951 Congress , one speaker accused the l a rge t radeunions of "soap-box ora tory" in the matter and ca l l ed th e cons tan tdemands of the la rge t rade unions fo r "freedom of ac t ion" d i s t u rb i ng . He f e l t t h a t th e s i tua t ion ins tead ca l l ed fo r , " s ta tesmanl ike views and di scuss ions o f matters of v i t a l i n t e r e s t to a l lworkers" .30 Severa l speakers expressed t h e i r g ra t i t u d e fo r th e a r b i t r a t i o n Order , and poin ted out t h a t it had been used overwhelmi ng ly by unions ag a in s t employers and not vice ve rsa . Others notedd i s s a t i s f ac t i o n with th e volun ta ry a rb i t r a t i o n system put in placeby rep lacement l e g i s l a t i o n .

Attempts to get s t ronger rep lacement language were made, bu tf a i l e d . At th e 1950 Annual Congress a motion ca l l ing fo r immediaterevocat ion of th e Order had been defea ted overwhelmingly, i n d i c a t ing broad suppor t fo r the Order . Yet th e fol lowing year a motionby th e smal ler unions to re ins t a t e language in favor o f compulsorya r b i t r a t i o n was r e j ec t ed , and th e major i ty fol lowed th e lead ofth e General Counci l in defending volun ta r i sm. 31

The 1951 repea l r a i se s some ques t ions . Why did the Genera lCounci l defend th e s t r i k e r s , who a f t e r a l l jeopardized th e p o l i c i e s of a Labour Government? And why was so little done to seek acompromise? Some answers can be gleaned from th e developmenta l

29TUC Report (1951), p. 233.30 TUC Report (1951), p.508.31TUC Report (1951), p. 232 and p. 512.
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h i s t o ry , o th e r s from th e posi t ions taken by var ious ac to rs a t Annua l Congress meet ings . (The i s sue was di scussed only b r i e f l y andinconclus ive ly a t p a r t y conferences . )

Fi r s t , th e Government had a l ready declared i t s p r i n c i p l ed opposi t ion t o r e s t r i c t i o n s on t rade union immunit ies in 1945, andthus had a l ready l o s t grounds fo r a pr inc ip led argument fo r re s t r a i n t s . Second, al though th e Order es t ab l i sh ed some means fo rco n t ro l l i n g t r ad e union behavior , bu t it f e l l shor t o f d i s t i n guishing ' a u t h o r i z e d ' from ' u n au th o r i zed ' wage barga in ing . Alone,it d id not prevent l o ca l ci rcumvent ion of union con t rac t s becauseit d id not g ive th e TUC co n t ro l over wage barga in ing , as such . Loca l t rade union groups could comply with the Order simply by giving not ice of i n t en t to s t r i k e . By doing so , they t r i g g e red th eprocess o f compulsory arb i t r a t ion and forced employers to th e b a r ga in ing t ab l e . In such a s i tua t ion , maverick union groups wouldcomply with th e ru les but still undercu t the capaci ty o f nat iona lunions to determine wage pol icy . Enforcement c rea t ed problems,too . The TUC c lea r ly found the spec tac le of a Labour Governmentput t ing s t r i k in g t rade u n io n i s t s in pr i son unappeal ing.

Yet th e TUC's wi l l ingness to accep t temporary ex tens ions sug ges t s tha t Br i t i sh unions saw some b en e f i t in cu r t a i l i n g ce r t a int ypes o f t r ad e union b e ~ a v i o r , and t h a t th e commitment to ' vo lunt a r i s m ' wa s not abso lu te . The TUC was caught on th e horns o f adilemma c rea t ed by th e c o n f l i c t between i n s t i t u t i o n a l needs fo rmore co n t ro l over wage s e t t i n g and a long-standing ideo log ica l andp o l i t i c a l commitment to unregula ted t rade unionism. The dilemma i sevident in th e General Counc i l ' s Report to th e 1951 Annual Con gress . On th e one hand, it condemned what was termed ' u n o f f i c i a l 's t r i k in g - a l though no ru l e s ex i s ted d i s t ingu i sh ing ' u n o f f i c i a l 'from ' o f f i c i a l ' s t r ik ing - yet , on t h e o th e r hand, it made no fu r t h e r e f f o r t to r ecover con t ro l over i nsurgen t t rade unions . 32

32"I t came as a shock to many to be reminded of [ the penal pr ov i s ions aga ins ts t r ik ing] l a s t autumn in the unof f i c i a l s t r i ke of some gas maintenance work e r s . St r ikes by a minor i ty within a union aga ins t a se t t l ement nego t ia ted bythe union undermine both union democracy and nego t ia t ing machinery it hast aken years to bu i ld . But t h i s reminder t h a t s t r i ke r s could be punished by lawcaused grave misgiv ings ... " , see TUC Report (1951), p . 233.


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Paradoxica l ly , it was the s t reng th of Br i t i sh t rade unionst h a t caused the f a i lu re to maintain TUC con t ro l over a f f i l i a t e dunions. The s t ro n g er unions did not th ink they needed a r b i t r a t i o nfo r pro tec t ive purposes , assuming (correc t ly ) t h a t they would dob e t t e r without the regu la to ry framework. But t h e i r gain depr ivedthe Labour Par ty and th e TUC of the capaci ty to determine a nat i o n a l wage pol icy .33 In a comparat ive p ersep c t iv e , it i s c l e a rt h a t l eg a l regu la t ion of indus t r i a l re l a t ions can have a s t a b i l i z ing e f f ec t on t rade union organiz ing provided t h a t th e unions aregiven a ro le in enforcement . 34 Arbi t ra t ion and conc i l i a t ion proce dures enhance t rade union con t ro l by obl iga t ing employers to negot i a t i on and to con t rac tua l compliance. They a l so s t reng then thehands of union l eaders prevent ing d i s sa t i s f i e d union groupsfrom ex i t ing from a concluded agreement . In t h i s way, procedura lregu la t ion of wage bargaining can a id both t rade union coverage inthe l abor market a t l a rge and concen t ra t ion within unions , f ea t u r e s which f a c i l i t a t e a nat ional wage pol icy .Wage Regulat ion Machinery

Towards th e end of World War I I , debates about th e form of anat iona l framework fo r co l l ec t ive bargaining began. The discuss ionfocussed on th e ro le of government in co l l ec t ive barga in ing , andth e mer i t s o f having a nat ional wage pol icy . The minor i ty viewt h a t favored regu la t ion inc luded pr imar i ly t rade unions organ iz ingworkers with few or no s k i l l s , o r organiz ing in f ragmented andhigh ly compet i t ive i ndus t r i e s . These unions ad d i t i o n a l l y a l so o ften favored l eg i s la ted minimum wages, and some would a l so favora r b i t r a t i o n . 35 The l i ne s of div i s ion were apparen t a l ready in 1944.Then the Furnishing Trades had proposed a reso lu t ion which wasca r r i ed a t Annual Congress obl ig ing the TUC l eadersh ip to t akes t ep s toward propos ing regu la t ions regarding ' a nat iona l wage p o l i c y ' . S ir James Hallswor th , a member of th e General Council andPres iden t of a low-wage union (Union o f Shop, Dis t r ibu t ive and A l33Recent evidence i s provided by Golden (1993). 34Streeck (1982), pp. 29-82. 35 TUC Report (1944), pp . 237-239.
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l i ed Trades) expressed some concern over th e r e so l u t i on and re s ta ted the TUC's pos i t i on which did not a l low fo r any inf r ingementof the pr inc ip l e of unfe t t e red co l l ec t ive barga in ing . I f th eunions could "do it on t h e i r own", th e TUC bel ieved , there couldbe no room fo r "Sta te in te r fe rence" .36 The General Council appearsto have ignored th e r e so l u t i on , as no s teps were made to heed th ere so lu t ion .

The 1944 Congress discuss ion revealed ambiguous fee l ings r e garding th e use of pub l ic po l icy to sus ta in co l l ec t ive barga in ing .The unions wanted compensating po l i c i e s sus ta in ing union wagesbut , a t th e same t ime, a l so opposed pu t t ing obs tac les in the wayof th e s t rong unions and t h e i r a b i l i t y to force th e bes t wagesfrom employers. The unions were still re luc t an t to argue fo r acomplete ro l l -back o f wartime regu la t ions because they feared wagede f l a t ion , as a t th e end of World War I . They a l so feared t h a t demobi l iza t ion would br ing re tu rn ing servicemen f looding the labormarket and depress wages, and lobbied the Government to prolongdemobi l i za t ion .

During th e War, wages were f ixed by corpora te Trade Boards,which f i r s t had been crea ted as voluntary mechanism fo r conc i l i a t i on between employers and unions by l eg i s l a t i o n from 1909. Theirp r i n c i p a l objec t ive had or ig ina l ly been t o s e t minimum wages in' sweated ' i ndus t r i e s , t h a t i s , smal l -sca le , l a rge ly unorganizedi ndus t r i e s with subs tandard l abor condi t ions . There was genera lagreement t h a t the regu la t ion had been bene f i c i a l to th e unions ,bu t t h a t agreement d id not extend to what should rep lace them. Th e1945 Wage Counci l s Act was passed to address fears o f de f l a t ion .I t conver ted the Trade Boards to Wage Councils and extended t h e i rpowers . They were se t up as l oca l t r i p a r t i t e boards to allow fo rreg ional va r i a t ions i n cos t s , but the na t iona l government wasgiven some overs igh t powers with respec t to review o f con t rac t s .They were empowered to f ix ' r emunera t ion ' in genera l , and could inpr inc ip l e do more than simply se t t ing minimum wages, which never t he l e s s i s more or l e s s what they did . The unions showed little

36I bid.
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i n t e r e s t in the Counci ls , and the s t rengthening of the p rov is ionsd id not produce a r i se in th e number of Counci ls . 37 In one respec t ,th e Counci ls represen ted a p o s i t i v e s tep toward to crea t ion o f ani n f r a s t ru c t u r e fo r c ross -c l a s s conc i l i a t ion ; l ike t h e i r neoc o rp o ra t i s t counterpar t s on the European mainland they prof i t edfrom some bus iness suppor t . The Councils produced s t ab le wages inhighly compet i t ive i ndus t r i e s . (Recent evidence o f suppor t croppedup in 1986, when an a t tempt was made to abo l i sh the Wage Counci lsbut employer opposi t ion prevented th e Councils from being comp le t e ly dismant led. ) However, the 1945 Act was a l so symptomatic o fth e f a i l u r e o f th e postwar Labour Government with r e sp ec t to th eformat ion of a n a t i o n a l wage pol icy . I t re f l ec t ed th e mistaken a s sumption t h a t wage def la t ion would be th e pr imary problem, andf a i l ed to es tab l i sh a ro le fo r the TUC in co l l ec t ive barga in ingovers igh t or , fo r t h a t ~ a t t e r to l ink wages to soc ia l concerns .

The General Council f i rmly r e j ec t ed any a t t empts to addressth e nega t ive consequences of wage in f la t ion , e .g . by l ink ing wagesto product iv i ty i n c reases . An inc iden t in 1944 in connect ion withS ir Will iam Bever idge ' s repor t , Fu l l Employment in A Free Soc ie ty(1944) revea led the problem. Beveridge who was otherwise g en era l lydi s inc l ined to pay a t t en t ion to economic r e s t r a i n t s bel ieved t h a tth e f u l l employment goa l might be jeopardized by wage i n f l a t i o nunless th e unions took remedia l ac t ion . 38 While wri t ing h is famousrepor t , which became th e bluepr in t fo r postwar soc ia l reforms,Beveridge approached the unions and asked th e TUC t o ou t l ine whati t s responses would be if wage in f la t ion occurred . The GeneralCouncil i s sued a summary s ta tement saying t h a t the TUC would give"su i t ab le guarantees about wage se t t l ements and reasonable as su r

37The 1945 TUC Congress Report l i s t s 36 unions as r epr e sen ted by a t o t a l of54 3 union nominees to Wage Counci ls . Apparently, a l l were re format ted TradeBoards . The Ta i lo r s ' and Garment Workers ' union was in the l ead with 11 5nominees, followed by th e GMWU with 86 and th e TGWU with 79 nominees. 25unions had l e s s then 10 nominees. In 1947, th e crea t ion of new Counci ls inha i rd res s ing and r e t a i l i ndus t r i e s wa s proposed. TUC Report (1945), pp. 96-98;TUC Report (1947), p . 172.38 Lewi s Minkin writes t h a t the c o n f l i c t not only caused a s p l i t in th e LabourParty-TUC l eader sh ip , but a l so made Bevin to go in to prolonged se l f - imposedex i le from th e Labour Par ty , see Minkin (1991), p . 59.


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ances tha t such guarantees would be general ly observed".39 I t prot e s t ed tha t r e s t ra in t s on t rade union behavior would v io la te thepr inc ip les of a "free society" and cause the unions to "cease tobe Trade Unions".40 The response was less than sa t i s fac to ry in Bever idge ' s view, but he proceeded nevertheless without changing hisrecommendations.

There were also voices within the unions t ha t were concernedabout the socia l impl icat ions of the TUC's unwil l ingness to compromise the voluntar is t pr incip le t ha t l e t the s t ronger unionsbargain fo r the highest possible wages. The Furnishing Trades ' Assoc ia t ion again proposed measures a t the 1945 Congress t ha t wouldtoughen the TUC's stance towards the a f f i l i a t ed unions, and in e ffec t create TUC o v e r s i g ~ t of co l lec t ive bargaining. 41 The resolut ion , which was motivated by concerns over union competi t ion anddemarcation conf l i c t s , carr ied but f a i l ed nevertheless to producean expanded ro le for the TUC in co l lec t ive bargaining.

The large unions proposed a counter-resolut ion which alsoaimed to toughen the Wage Council Act. I t proposed t ha t the Government should se t wages by means of s ta tu tory extension of unioncont rac ts to unorganized workers, but did not ass ign any ro le tothe TUC in bargaining which should be l e f t en t i re ly to the unions.Nor was any allowance made for negot iat ions between employers, theunions, and the Government over industry-wide s tandards . The resolu t ion was sponsored by Arthur Deakin from the Transport and Genera l Workers ' Unions (TGWU) - Bevin 's old union and had thesupport of the engineers ' union and the mine workers. (Anunintended consequence of the TGWU resolut ion l i ke ly would havebeen to reduce the incent ives to union organizing in the weakert rades by sh i f t ing respons ib i l i ty for wage-setting to theGovernment.) The 1945 Wage Council Act represented a compromise,39This is th e statement that Panitch used to justify his view that th e unionswere willing to accept a national wage policy, as long as th e Labour Party hadkept i ts part of the bargain. I find Panitch's interpretation unconvincing,se e TUC Report (1944), p. 420; Panitch (1976), p. 16. The statement puts th eburden of 'convincing' upon th e government, and the unions are compelled onlyto give 'reasonable' assurances.40The only concession was that the unions might have to relinquish some cont ro l over job specifications and assignment, see TUC Report (1944), p. 421.41TUC (1945), p.246.
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which was more in debt to wartime p rac t i ce s than to Congresswishes .

There were o th e r at tempts to cons t ruc t a nat iona l wage pol i cy . In 1946, ful l -b lown conf l i c t erupted between union proponentsand opponents of wage regu la t ion machinery in connect ion with aproposa l ca l l ing fo r a s t a tu to ry minimum wage pol icy and a nat i o n a l wage pol icy aiming a t reduct ion of pay d i f f e re n t i a l s . Theproposa l was defea ted but deserves a t t en t ion because it represen ted an at tempt to formula te an eq u i t ab l e wage pol icy along thel i ne s of Swedish ' s o l i d a r i s t i c ' wage p o l i cy . I t proposed a uniformminimum wage s t andard (applying to both sexes) and obl iged th eGeneral Council to prepare a repor t on " the means whereby a mores a t i s f ac to r y l a s t ing and eq u i t ab l e wage s tandard can beachieved. , ,42 In th e comments, one speaker ca l l ed th e ex i s t ing wagesystem "out of da te" a n j dared th e de lega tes " to tell me t h a t thel ab o u re r ' s ch i l d ea t s l e s s food than th e sk i l l ed man's child. , ,43Other comments sugges ted l inking wage-se t t ing to product iv i ty improvements . Nei ther proposa l was wel l rece ived by the TUC l eader sh ip o r by th e s t rong u ~ i o n s . Arthur Deakin from th e TGWU re j ec t edth e reso lu t ion because the consequence would be t h a t th e wages th eb e t t e r pa id workers would be dragged down, as th e pay of th e lowe s t and poor e s t i n d u s t r i e s would se t the s t andard . 44 He found th eproposa l "water on th e T o r i e s ' mil l" and an unfa i r cr i t i c i sm ofth e TUC. Hallswor th from the Genera l Counci l ca l l ed th e proposa l' n a i v e ' . Despi te th e s t rong language used by th e TUC e l i t e , it wasdefea ted only narrowly in a card vote with 57 percen t opposed. 45

In 1946-47, economic problems led th e Government to s h i f t itspol icy s t ance toward th e t rade unions and wage p o l i cy . In th ecourse of 1947, conf l i c t s between th e t rade unions and key membersof th e Government i n t ens i f i ed . Within the Cabinet , a s p l i t betweenth e planners and the defender s of the t rade unions emerged as th eformer wanted a nat iona l wage pol icy and r e s t r i c t i o n s on th e

42 TUC Report 1946, p . 418. 43 I b id . . 44 I b id . , p. 422. 45 I b i d . , p . 424.


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unions , p a r t i cu l a r l y a n a t io n a l a r b i t r a t i o n system. 46 The s p l i t wasnot a c lea r -cu t div i s ion between th e Right and th e Left of th ePar ty . S ta f fo rd Cripps , Pres iden t of Board of Trade (1945-47) andMinis te r o f Economic Affa i r s a f t e r September 1947, repor ted ly re pea ted ly th rea tened to res ign because of lack o f con t ro l over economic pol icy . The ch ief advocates of the unions were the Min is te rof Labour, George I saac , Ernes t Bevin (who kept up on l abor i s su eseven though he was Foreign Secre t a ry ) , and Clement A t t l ee , thePrime M in i s t e r . 47 The Cabinet was r e sh u f f l ed in the f a l l of 1947,as th e of f i ce s of the Exchequer and Economic Affa i r s were combinedand Cripps was put in charge of bo th . A Ch r i s t i an S o c ia l i s t ,Cripps was considered a r e a l i s t on economic i s sues desp i t e h i ss t rong suppor t fo r so c i a l reform and genera l suppor t of th e 'NewJe rusa lem ' v i s i o n . 48

A 1948 White Paper re f l ec t ed the change in Government pol icyby endor s ing wage r e s t r a i n t and ex p l i c i t l y t y in g wage increases toproduct iv i ty i n c reases . 49 The paper was a depar tu re from t h e p as tin other ways, as wel l . I t had not been through the normal j o in tconsu l t a t ion process with th e unions . Impressed with th e g rav i t yof th e economic problems fac ing th e Government, th e General Counc i l never the less accepted th e Paper and i t s recommendations. At asp ec i a l March 1948 TUC conference , 1500 t r ad e un ion i s t condonedthe White Pap er ' s and i t s c a l l fo r a voluntary wage f r eeze . Bevin,the un ions ' o ld f r iend , jo ined Cripps in appea l ing to th e unions .

In t e rn a t i o n a l p o l i t i c s played an impor tant ro le in th e s h i f tin th e Government ' s posi t ion with respec t to wages and t h e r eg u la t ion o f wages. In 1948-49, th e European Recovery Program ( the Mars h a l l Plan) began to in f luence domestic economic pol icy p r i o r i t i e si n s ev e ra l ways. In response to some of th e condi t ions fo r Mars h a l l a id , the Br i t i sh Government worked out a four -yea r p lan andin October 1948, another White Paper was publ ished on European Coopera t ion (Cmd. 7545) which t i ed B r i t i s h economic recovery to cu r 46Cairncross (1985), p . 40 347 Ib i d . , p . 49. See a l so Bullock (1983), p . 57.48 Cr ipps wa s replaced in October 1950 by Hugh Gai t ske l l . An ambiguous app r a i s a l o f Cripps as a utop ian and a r e a l i s t , see Barne t t (1986) , p . 253.49Statement on Personal incomes. Costs , and Pr i ces (Cmd. 7321)


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rency c o n v e r t i b i l i t y , m u l t i l a t e r a l t rade and balance of payments t a b i l i z a t i on . Nat iona l p r i o r i t i e s were being brought i n to s tepwith the i n t e r n a t i o n a l economic pr inc ip l es guiding th e RecoveryProgram and the new i n t e rna t iona l economic order under cons t ruct i o n . Later , the Government ' s main planning document, th e 1949Economic Survey, r e i t e r a t e d the same s t a b i l i z a t i o n goals .

A second c a l l fo r wage r e s t r a i n t went out to the unions againin September 1949, when cur rency devaluat ion could no longer beavoided and a balance o f payments c r i s i s loomed. Impressed withth e sever i t y of the economic c r i s i s and th e Government 's d i f f i c u l t i e s in running i t s economic po l icy , the TUC once again accepted ,in January 1950, s t r i c t l im i t s on wage inc reases . This t ime, however , wage increases were t i ed to increases in th e pr i ce index,ano ther wartime measure put to much use in postwar episodes ofwage r e s t r a in t . In the absence of a framework fo r monitor ing andenforcement , compliance was en t i r e ly based upon s e l f -d i s c i p l i ne .

Ret rospec t ive ly , the 1948-50 wage r e s t r a i n t episode was excep t io n a l because it was success fu l . 50 I t succeeded because th e TUCstill exerc i sed r e la t ive ly firm con t ro l over the a f f i l i a t e dunions , stemming from the war years when the TUC spoke on b eh a l fo f a l l of labor . Also, ~ h e moral au thor i ty of the o ld e l i t e whichhad guided l abor to postwar t r iumph still compel led r ank-and- f i l ed i sc i p l i n e . Key people in the Genera l Council , Arthur Deakin inp a r t i c u l a r , had become convinced t h a t the fu tu re of the Governmentdepended upon t h e i r ac t ing in a responsib le fashion, and t h e i rpersona l au thor i ty was such t h a t they could de l ive r t r ade unionsuppor t fo r th e Government 's economic pol icy .51 But ne i the r cons t r a i n t endured ag a in s t growing counter-mobi l izat ion and th e pas sage of t ime.

Open r ebe l l ion a t the 1950 Annual Congress r esu l t ed in a r e s o lu t ion demanding t h a t s teps be taken to cont ro l pro f i t s i n s t eado f wages, and t h a t a l l wage r e s t r a i n t po l i c i es should be abandoned. The r e so lu t ion wa s defea ted narrowly but the opposi t ion hadth e l a s t say anyway. The General Counci l ' s Report was voted down50 Dor fman (1971), p. 52 51Al len (1960) pp. 288-89; Dorfman (1973), p. 63.
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because o f its support fo r t h e Labour Government 's economic p o l i c i e s , and th e TUC in e f f e c t went i n to oppos i t ion ag a in s t a LabourGovernment. 52 The c o n f l i c t ebbed as th e Government back t racked and,in 1951, th e economy began improving. Elec t ion campaigning pu t anend to fu r the r d iscuss ion . For th e next t h i r t e e n years , Conservat i v e governments held power.

In 1951, when th e Labour Government s tepped down, th e wager eg u l a t i o n system it l e f t in p lace was r e spec t fu l of t r ad e unioni n t e r e s t s but woeful ly inadequate fo r plann ing purposes . The 194850 vo lun tary wage and pr ice ' f r e e z e ' sugges ted a model fo r fu tu rei n f l a t i o n co n t ro l e f f o r t s which, once the o ld men of the 1945-51Government were gone, proved non- funct iona l . Persona l appea l s andvo lun tary measures worked in a c r i s i s but d id not provide i ncent i v e s fo r p roac t ive measures aga ins t i n f l a t i onary wages. Nor d idthey prov ide fo r a ro le fo r t he TUC as a n a t io n a l a c t o r in economic p lann ing . Increas ing ly , r espons ib i l i t y fo r wage-se t t ingsh i f t ed downwards, even tua l ly reaching th e shop f l o o r .

There were still some within th e Labour Par t y who favored d i r e c t co n t ro l s and a ' p l anned economy' approach to economic p o l i cy .Hugh Gai t ske l l favored measures t h a t were e s s e n t i a l l y d i r i g i s t e . 53As l a t e as in 1950, Cripps had i n s i s t e d t h a t the p ress was wrongt h a t th e Government had abandoned economic plann ing , admi t t inghowever t h a t it was not poss ib le to use " the v io len t compulsions... appropr ia te to t o t a l i t a r i a n planning" .54 C r ip p s ' s successorGai t ske l l wrote a memorandum in 1949 arguing fo r th e n eces s i t y ofkeeping exchange con t ro l s and import con t ro l s a permanent measuresand "a d i s t ingu i sh ing f ea tu re o f Br i t i sh s o c i a l i s t planning".55

The p lanners had not expected t h a t t rade union oppos i t ionwould be a stumbling block, p a r t l y because they d id n ot r e a l i s t i c a l l y as s e s s B r i t a i n ' s economic cons t ra in t s . 56 Moreover, th e i n s t i t u t i o n a l underpinnings fo r the des i red reforms were too weak. TheGovernment had f a i l e d t o f ind a way to include wage r eg u l a t i o n as52 TUC Report (1950), pp. 467-47353Dow (1970), p. 34 .54Ci ted af te r Cairncross (1985), p. 332.55Cairncross (1985), pp. 329-330.56For a cr i t i ca l evaluat ion, see Barnett (1986)
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a rou t in ized p a r t of economic p o l i cy . Once t h a t p o s s ib i l i t y hadbeen fo rec losed , it was l o g i ca l t h a t th e Labour Par ty would beginmoving towards th e d i s t a n t management t h a t Keynesian macroeconomicmanagement t heory and Anthony Crosland 's revis ionism s tood fo r . S7

In th e next decades, B r i t i s h t rade unionism took an ad v ersa r i a l m i l i t a n t course in con t ras t to th e co l labora t ive s t r a t eg i e s o fco n t i n en t a l Socia l Democratic unions . With no meaningful ro l e toplay in wage r eg u la t io n , th e TUC became a lobby organ iza t ion rep r e sen t in g the p o l i t i c a l i n t e r e s t of th e t rade unions to governments . Th e combinat ion of fu l l employment and p ro t ec t i v e r i g h t sencouraged a fu r t h e r s h i f t in power away from th e nat iona l l ev e lto th e shop f l o o r .

Continental Labor Movements: Socia l Partners and EquityIn a compara t ive perspec t ive , two var iab les s t and out as key

fo r th e development of a ' r e s p o n s i b l e ' unionism t h a t makes comprehensive t rade union mobi l i za t ion compatible wi th n a t i o n a l economicplan ing . The f i r s t i s confedera t iona l ove rs igh t o f co l l ec t ive b a r ga in ing . This can take many forms, ranging from confedera t ionalre spons ib i l i t y fo r bargaining to var ious di rec t and d i r ec t over s i g h t means which l e t the confedera t ion a c t as a coord ina to r whileleaving unions in charge of ac tu a l barga in ing . Oversight hinges ,however, upon some means fo r d i sc i p l i n i n g unions , e . g . an a r b i t r a t i on system. The second v ar i ab l e i s more d i f f i c u l t to spec i fy because it i s no t pr imar i ly i n s t i t u t i o n a l , al though it of ten f indsi n s t i t u t i o n a l express ion . I t i s the recogni t ion o f th e primacy ofeconomic development, and shared re spons ib i l i t y between employersand employee organ iza t ions fo r product iv i ty concerns .

In Bri t a in , t h i s was known as the "machine quest ion" and inSweden as th e " ra t iona l i za t ion debate" . In Sweden, th e quest ionwas re so lved in 1933-34 in favor o f t rade union acceptance o fshared re spons ib i l i t y . I t happened in the context o f an ex tens ivepubl ic dia logue invo lv ing organ iza t ions , a Soc ia l Democratic government , and economic exper t s over th e na ture o f Swedish economic

S7Mink in (1991), pp. 92-93.


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problems. I t i s beyond th e scope of t h i s a r t i c l e to engage in aser ious d i scuss ion of why th e Bri t i sh ended up giving shor t s h r i f tto th ink ing about economic growth, except to note t h a t as ide fromth e i so l a t ed voices of Treasury o f f i c i a l s and some economic expe r t s no publ ic dia logue took place on t h i s mat ter ; n e i t h e r inconnect ion with the recons t ruc t ion program, nor a f t e r th e War. S8

As Barnet t t e l l s it, th e re spons ib i l i t y fo r t h i s f a i lu re hasto be shared equal ly by Br i t i sh governments , employers , and t radeunion i s t s . He br ings up th e Restora t ion o f Pre-War Trade Prac t i ce s(1942) as an example of s teps taken in the wrong di rec t ion dur ingth e War. The Act poses an almost p e r fec t counter-example to th eSwedish embrace of product iv i ty enhancing po l ic ies . I t was passedin response t o co n f l i c t s - inc luding work s toppages - over th ef tdi lut ion ft sue. The term r e f e r r ed to th e replacement of s k i l l edmale workers with unsk i l l ed and of ten female l abor . The Actpromised to re s to re a l l work ru les and s ta f f ing r e s t r i c t i o n s a f t e rth e war t h a t had been temporar i ly suspended in response to wartimeproduc t ion needs . At i s sue was, however, not ju s t th e temporaryuses o f female l abor to replace workers ca l led up as serv ice menbut a l so overmanning and outdated work ru les which preventedproduct iv i ty increases . By promising th e unions t h a t prewar normswould be res to red , the Government bought temporary l abor peace a tth e cos t o f foregoing ga ins brought about by th e in t roduct ion o fnew techniques and e f f i c i e n t u t i l i z a t i o n of l abor .

As fo r the i n s t i t u t i o n a l underpinnings fo r confedera t ionalovers igh t of wage barga in ing , a comparat ive view to th e contempora ry reforms in o ther coun t r ies with s t rong nat iona l l abor movements makes th e Bri t i sh s h i f t to decen t ra l i za t ion s tand out as anexcep t ion . The circumstances of ea r l y compulsory nat iona l a rb i t r a t i on language were s imi la r in Sweden and in Great Bri t a in .

S8For th e Swedish debate which in 1928-31 caused unions to di scon t inue t a l k swith employers , see Johansson (1989), pp. 103-116. Th e Bri t i sh coun te r pa r t i sdiscussed in Phelps Brown (1986) .


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Sweden

In Sweden, as in B r i t a i n , t r ade unions have h i s t o r i c a l l y hada c lose r e l a t i onsh ip with th e Socia l Democrat ic Par ty (SAP). Thecons t i t u t i ona l r e l a t i onsh ip between th e Par ty and th e unions d i f fe r s in s i g n i f i c a n t respec t s from t h a t in Br i t a in , however. Incon t r a s t to th e B r i t i s h Labour Par ty , where th e unions con t ro l thepa r ty organ iza t ion , the des i r e to appea l to a broader e l e c t o r a t el ead the S oc ia l Democrats e l imina te t o co l l ec t ive t r ade union membersh ip o f th e Par ty as ear ly as in 1909. Hence, l o c a l unionscould a f f i l i a t e with th e l o c a l Par ty o rgan iza t ion only a f t e r amembership vo te . An unin tended consequence wa s to s h i f t th e r e l a t ive ba lance o f power between th e unions and th e par ty wi th in th ecombined l ab o r movement in favor of th e l a t t e r . This has been pa r t i c u l a r l y ev iden t when c o n f l i c t s have a r i sen between t r ade uniongroups and Socia l Democrat ic governments.

A milepos t in the r e l a t ionsh ip between t r ade unions and th ePar ty occurred when a s t r i k e among cons t ruc t ion workers in 1933-34th rea tened to cause a par l iamentary c r i s i s fo r th e minor i ty So c ia lDemocrat ic Government. The s t r i k e was brought to an end, when theLO imposed a co n t r ac t upon th e s t r i k ing cons t ruc t ion workers a f t e rth e s t r i k e r s ' t h i r d r e j ec t ion o f a co n t r ac t proposa l . The LO's in t e rven t ion came a f t e r t : ~ e Socia l Democrat ic government had made itc l e a r t h a t , in th e absence of in te rven t ion , l eg i s l a t ion c u r t a i l i n gt r ade union behav io r was l ikely .59

The t h r e a t of s t a tu to ry regu la t ion o f i n d u s t r i a l ac t ions t r i k i n g as wel l as lockouts - brought employers and th e t r adeunions in to t a l k s regarding a voluntary framework fo r c o l l e c t i v ebarga in ing and i n d u s t r i a l ac t i o n . These t a l k s r e su l t ed in th e 1938Basic Agreement between employers and th e LO, and es tab l i shed anexpanded ro le fo r th e peak organ iza t ions in cros s -c l as s conc i l i a t i o n . On the l abor s ide , o ther f ac to r s , such as LO co n t ro l overs t r i k e funds, a lso helped sus ta in t r ade union c e n t r a l i z a t i o n . Th eimportance o f na t iona l nego t ia t ions and c ross - c la s s coord ina t ion59 There a re d ive rge n t accounts of the ro les of the LO and th e Government inbr inging th e s t r i ke to an end, see Kupferberg (1972); Stephens (1986); Swenson(1991); Klausen (1995).
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was sus ta ined by successive agreements on i n d u s t r i a l i s sues . I tnever the less took c lose to two decades to es tab l i sh f u l l confedera t i o n a l con t ro l over co l l ec t ive barga in ing , when the conso l ida t ionof pay bargaining in to nat ion-wide con t rac t s between SAF and LOtook place in 1952.Swedish l eg i s l a t i o n proh ib i t s s t r i k e s outs ide con t rac tua l cyc le s , making such s t r ik ing not simply ' unau thor ized ' but 'ille g a l ' . The au t h o r i t y of concluded con t rac t s - and of th enego t ia to rs - had been pro tec ted a l ready in 1928 by conserva t ivel eg i s l a t i o n crea t ing an arb i t r a t ion system. The So c ia l Democratsaccepted compulsory a r b i t r a t i o n , desp i te rank-and- f i l e t rade unionoppos i t ion , and subsequent ly passed up oppor tun i t i es to repea l theAct . Ins tead , piecemeal reforms t h a t made the a r b i t r a t i o n systemmore p a l a t ab l e to th e unions were made, e .g . equa l represen ta t ionfo r unions and employers on a r b i t r a t i o n boards . 60 Arbi t ra t ionc lea r ly enhanced the fede ra t ion ' s con t ro l over unauthor izedi n d u s t r i a l ac t i o n . Less sweeping and imprecise than th eproh ib i t ions l a id down by the Bri t i sh Act from 1927, the Socia lDemocrats ' acceptance never the less represen ts an example o f s e l f in te res ted acquiescence to res t r i c t ions on t rade union behavior .Union d i s c i p l i n e premi ts t rade union l eaders to speak withau t h o r i t y and partake in the formula t ion of nat iona l p o l i c i e s . Asan as ide , it i s worth not ing t ha t th e Swedish ban on p o l i t i c a ls t r ik ing f inds a counte rpa r t in German i n d u s t r i a l re l a t ions caselaw in re l a t ion to Ar t i c le 9 (sec. 3) of German cons t i t u t ion ,Grundgesatz from 1949, which p ro h i b i t s s t r ik ing ag a in s t th e commoni n t e r e s t .

Swedish union and employer federa t ions shared with t h e i rBr i t i sh counterpar t s a s t rong d i s t a s t e fo r compulsory a r b i t r a t i o n .In the place of s t a tu to ry r eg u la t io n , they agreed to s e l f regu la t ion . Although Swedish regu la t ion o f i n d u s t r i a l re l a t ionshas been based p r imar i ly upon pr iva te agreements, confedera t ionalcon t ro l over a f f i l i a t e d unions , ex tens ive regu la t ion of pay bar gaining rou t ines , and coordinat ion between th e t r ad e unions and a

60 Fu l cher (1991), pp. 138-141.


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succession of Socia l Democratic governments (1945-76) , have a l lserved to in fuse wage pol icy with concerns fo r pub l ic p r i o r i t i e sof var ious k inds .

Sweden was a n eu t r a l country dur ing World War I I and sparedthe dev as ta t ion the economies of other European co u n t r i e s su f fe red . Never the less , t h e re were ex tens ive wartime co n t ro l s . Theadjus tment process a f t e r the war was in some r e sp ec t s s i mi l a r tot h a t o f Bri t a in ; pr ice con t ro l s had to be l i f t e d and a commitmentto fu l l employment pro tec ted while i n f l a t iona ry pressures and imp o r t s o f much wanted consumption goods caused ba lance of paymentd i f f i c u l t i e s . 61 (Sweden devalued toge ther with Bri t a in in 1949.)Moreover, th e Swedish t :rade unions faced s i mi l a r problems rega rding unauthor ized s t r i k i n g and mil i t an t t r ad e union oppos i t ion inth e immediate af termath of th e war.

Already in the spr ing of 1945, t he Soc ia l Democrats faced at e s t . A lengthy s t r i k e in th e metal indus t ry def ied the Government 's economic pol i c i e s and th rea tened to develop i n to a c r i s i swhen th e membership voted down the co n t rac t reached by means of aconc i l i a t ion procedure . In Ju ly , t h e n a t io n a l t rade union approvedthe con t rac t , desp i te the negat ive vote , with th e suppor t of theLO and th e Government. The mil i t an t oppos i t ion was subdued. Nor e so l u t i o n s cha l l eng ing c ro ss -c l a ss co l l ab o ra t io n had beenproposed a t th e 1944 SAP Congress , nor would be a t th e 1946 LOCongress. 62 The wil l ingness of the Soc ia l Democrats and th e LOl eadersh ip to confront rebe l l ious t rade unions s t ands in sharpco n t r a s t to th e response of the TUC l eadersh ip to ' unau thor ized 'i n d u s t r i a l ac t io n in 1950-51. The balance between union opponentand proponents o f confedera t iona l overs igh t was d i f f e r e n t in Sweden; in Br i t a i n opponents had ca r r i ed t he ma jor i ty view.

The reasons fo r t h i s d i f fe ren ce i s open t o i n t e rp r e t a t i o n .Communist ag i t a t ion played a ro le in both co u n t r i e s , but does notexpla in Bri t i sh oppos i t ion , as th e communists ' in f luence was re s t r i c t e d t o spec i f i c indus t r i e s . The divergent views of the unione l es i s a s t r i k i n g d i f fe ren ce . In Br i t a i n , the t rade unions had61 For an exce l l en t h is to ry , see Lundberg (1957). 62Johansson (1989) , p . 234


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defenders in the cab ine t o f the 1945-51 Labour Government whoshared th e unions view t h a t government regu la t ion of union ac t i v i ty was unacceptable . In Sweden, th e po l i t i c a l f e a s ib i l i t y of theGovernment ' s economic pol icy wa s given primacy over union i n t e r e s t s . Another di f fe rence i s the ear ly rea l i za t ion ( in 1933-34 andreaf f i rmed in 1945) by th e Swedes t h a t economic planning basedupon co l lec t iv i sm and soc ia l i za t ion had to make way fo r planningby means of c ross -c l a s s coordinat ion.

E l ec t o ra l p o l i t i c s played a key ro le in moderat ing th e Socia lDemocrats ' ambit ions wi th respec t to soc ia l i za t ion and plann ing .In th e 1930s and again in th e postwar years , the Socia l Democrat icgovernments depended upon a c e n t r i s t agrar ian par ty which imposedr e s t r i c t i o n s on t rade union behavior as a condi t ion fo r i t s supp o r t . During th e war, the Soc ia l Democrats had been encouraged bythe ex is tence o f a l e f t -wing major i ty - consi s t ing of the Socia lDemocrats and the smal l Communist Par ty - to recons ider ideas re garding economic planning and soc ia l i za t ion which had been she lvedin th e 1930s. But the 1944 e lec t ion produced an e l ec to r a l setbackfo r the Lef t , and the Soc ia l Democrats turned to coopera t ion withthe cen ter once again . In 1944, B er t i l Ohlin, an economist who belonged to th e 'S tockholm School ' o f proto-Keynesian th ink ing , became l eader o f the l i b e ra l p ar ty , Folkpa r t i e t . The ag ra r i an par ty ,Bondef6rbundet , had e a r l i e r in 1933-34 been convinced o f th e meri t s of macroeconomic s t imula t ion by means of a c r i s i s program t h a tpromised to ra i se both farm pr ices and wages. There was now ac l e a r consensus behind economic pol i c i e s based on Keynesian presc r ip t ions . Like the Br i t i sh counterpar t s , the Swedish Socia lDemocrats feared wage def la t ion and a depress ion upon th e conclus ion o f th e war, and made f u l l employment th e major objec t ive o fpostwar economic po l ic ies . 63

Sweden - l i ke Br i t a in exper ienced i n f l a t i o n ra the r thande f l a t ion in the immediate postwar years and acute payments andt rade balance problems. In 1949-50, Swedish union agreed to avolun ta ry 'wage-f reeze ' in much th e same way and fo r much the same

63Lundberg (1957); Lewin (1967).


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reasons t h a t B r i t i s h union agreed to one in 1948-49. 64 In 1952, theSwedish Finance Minis te r asked th e unions to accep t fu r t h e r l imi t son pay r a i s e s determined by the i n t e rna t iona l f i n an c i a l s i t u a t i o n sbut th e LO re fused , fear ing a r an k -an d - f i l e rebe l l ion . Thec o n f l i c t impressed upon Swedish t rade union economists howd i f f i c u l t it was fo r t rade union l eaders to both represen t t h e i rmemberships and be sen s i t i v e to the government 's economic pol icyp r i o r i t i e s . As a r e s u l t , they began developing pol i c i e s whichloca ted concerns fo r p r i ce s t a b i l i t y , wage equal i za t ion ,p roduct iv i ty improvement and fu l l employment under one umbrel la ,leading ul t imate ly to th e cen t ra l i za t ion of ba rga in ing in tona t iona l con t rac t s and LO co n t ro l . 65 In Bri t a in , th e same economiccons t ra in t s app l ied but brought a d i f f e r e n t response , with t radeunions asse r t ing t h e i r autonomy checked only by occas iona l pe r iodso f r e s t r a i n t , as th e Government fa i l ed to persuade th e t radeunions to accept r e s t r a i n t s in exchange fo r g rea t e r co n t ro l overeconomic p o l i cy .

The Swedish Soc ia l Democrats ' recons t ruc t ion program sharedmany s i m i l a r i t i e s with t ha t of the Labour Party but execut ion in volved s i g n i f i c a n t ad jus tment . P o l i t i c a l power-shar ing made itnecessary to compromise. The LO sugges ted in 1947 the crea t ion ofcorpora t i s t indus t ry counc i l s (branchrAd) modeled on th e Br i t i shDevelopment Counci ls , but th e proposa l f loundered under opposi t ionfrom bus iness , as d id a t tempts to secure d i r e c t government in volvement in i n d u s t r i a l planning . 66 In th e end, volun ta ry coord ina t i on ( ~ a m o r d n i n s ) replaced c a l l s fo r soc ia l i za t ion and publ ic ownersh ip , and a d i r i s i s t e approach to planning was fo r e s t a l l e d .

The Swedish pol icy process of consu l ta t ion and bipa r t i s ancommission repor t s produced a broad consensus regarding pol icygoals and means. Thus the c rea t io n of an i n d u s t r i a l r e l a t i o n s sy s tem based upon c ro ss -c l a ss negot ia t ions and r eg u la r i zed proceduresfo r conc i l i a t ion with equal r ep resen ta t i o n o f employers and t rade

64Lundberg (1957), p . 231; Dorfman (1973), p . 52. 65 Some key LO r epor t s framing th e i s sues are Trade Unions and F u l l Employment (1951) and ~ c o n o m i c Expansion and St ruc tu ra l Change (1963). 66 I b id . , p. 327.


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unions removed wage pol icy and indus t r i a l i ssues from the p o l i t i c a l process , l eav ing th e government f ree to nego t ia te economicpol icy with i t s coa l i t i on p a r t n e r s . LO overs igh t of co l l ec t ivebargaining ensured t h a t wage demands were balanced agains t theGovernment ' s pol icy p r i o r i t i e s .Austria

The developmental h i s t o ry o f Austr ian postwar i n d u s t r i a l r e l a t ions have little in common with e i t h e r Swedish o r B r i t i s h in d u s t r i a l r e l a t i o n s . I t shows however both th e importance of t radeunion regu la t ion fo r s t ab le t rade unionism and fo r th e capaci ty o fgovernments to engage in economic planning. I t a l so shows, as doesth e Swedish case , th e importance of power-shar ing arrangements ingiving b i r t h to c ro ss -c l a ss coopera t ion. In Aust r ia (as in th eFedera l Republ ic of Germany), Ch r i s t i an , S o c i a l i s t and Communistt rade unions were consol idated in to un i t a ry confedera t ions in1945. (Otherwise Austr ian and West German postwar i n d u s t r i a l r e l a t i o n s reforms have had little in common.) The e l ec to r a l system inAus t r ia ( l ike th e Swedish) r e l i ed on propor t ional represen ta t ionand produced e l ec to r a l outcomes t h a t demanded coa l i t i on governments. The war, th e S o c i a l i s t Party (SPO) and the Chr i s t i an Democ r a t s ( the Austr ian People ' s Party , OVP) , formed a broad coa l i t i ongovernment a f t e r the War which represen ted c lose to 90 percen t o fth e votes in par l iament . The 'Grand Coa l i t i on ' l a s t ed u n t i l 1966.Coal i t ion government genera ted a se t of norms regarding consensualpol icy-making t h a t guided postwar recons t ruc t ion pol icy . These a rer e f lec ted in the concept of Socia l Par tners (Soz ia lpar tnerschaf t ) ;c l a s s -b ased represen ta t ion l inked to c ro ss -c l a ss coopera t ion .Postwar reforms crea ted a new i n t e r e s t group system based upon' r e cy c l ed ' nine teen th-cen tury models o f economic represen ta t ionsamended to make room fo r twen t ie th century concept ions of c las s .The system wa s as unique in i t s spec i f i c d e t a i l s as th e Swedishsystem fo r conc i l i a t ion , but i t s ef fec t iveness hinges on th e samefea tu res : the cap aci ty o f th e n a t io n a l t rade union confedera t ionto speak fo r a l l t rade unions and to co n t ro l a f f i l i a t e d unions.


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On th e bus iness s ide , d i sc i p l i n e was enhanced by organ iza t i o n , as wel l as by an i n d u s t r i a l s t ruc tu re evenly div ided betweens t a t e run en t e rp r i se s and many smal l , l a rge ly family-owned en te r p r i se s t h a t bene f i t t ed from incorpora t ion . Business represen ta t ionwas channeled through a' Chamber of Commerce (Haodelskaromern),o r i g i n a l l y c rea t ed in 1848. The Chamber was se t up as a h i e r a r c h i c a l na t ion-wide network o f l o ca l , p rov inc ia l , and nat iona l b u s i ness o rg an iza t io n s . 67 In 1920, a Chamber of Labor (Arbeiterkaromern)was crea ted as a counte rpa r t o rgan iza t ion fo r l abor . 68 A Chamberfo r ag ra r i an i n t e r e s t s made the system of i n t e r e s t represen ta t ioneconomy-wide. Membership and dues-paying to th e Chambers were madecompulsory fo r 1Iall phys ica l o r l eg a l persons 1l in indus t ry , commerce, f inance , c r ed i t , or insurance , and a l l wage-earners o rsa l a ry -ea rn e r s . Permi t t ing only i nd i rec t r ep resen ta t i o n , th e Chambers merged th e e l i t e s from th e i n t e r e s t organ iza t ions and th ep a r t i e s in to a p i l l a r e d system combining c la s s , funct ional , andp o l i t i c a l represen ta t ion .

Afte r 1945, the t rade unions took co n t ro l of th e Chamber ofLabor and merged the tw o s t ru c t u re s i n t o a dua l system o f wageearner i n t e r e s t r ep resen ta t i o n . The Chamber helped organized wageearners in t r ad es and b"..1siness t h a t unions of ten f ind it d i f f i c u l t

"to mobi l ize , p a r t i cu l a r l y in the provinces and in smal l b u s i nesses . The Austr ian Confedera t ion of Labor Unions (OGB) wasrecrea ted as a ' s u p ra -p a r t y ' organ iza t ion and t o l e r a t e d th e ex i s tence o f p o l i t i c a l fac t ions or caucuses - within th e unions .(This arrangement con t ras t s with both ' non-pa r t i s an ' unionism ande lec t ive a f f i l i a t i o n . ) The OGB was se t up as a confedera t ion o fsec to r -based nat iona l unions . From th e beginning, th e SPO was th el a rges t p o l i t i c a l fac t ion within th e t rade unions , and re l a t ionsbetween th e S o c i a l i s t Party and the t rade unions have been c losebu t moderated by th e presence of n o n -So c ia l i s t p o l i t i c a l f ac t i o n s .

67Var ious sec to r s are organ ized separa te ly within th e Chamber. Employers areorgan ized in a , Bundeswirtschaft-kammer, (BWK). The Chamber i s a fragmentednetwork o f se c t o r a l , r eg iona l and t r ade- spec i f i c i n t e r e s t organ iza t ions , seeT r ax le r (1991), p . 340.68A t h i r d network of Chambers represent agrar ian i n t e r e s t s .


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In th e f i r s t year a f t e r the end of the War, wages were cont r o l l e d by an In t e r -A l l i ed Wage Board but between July 1947 andMay 1951, a s e r i e s of wage-pr ice agreements were worked out between farmers , employers, and the unions . 69 Austr ian Reconst ruc t ionp o l i c i e s inc luded a heavy dosage of government co n t ro l . The Coal i t ion Government agreed upon economic p o l i c i e s aiming a t con t ro l l edr e f l a t i o n . Wage and pr i ce pol icy aimed a t permi t t ing a concer tedincrease in wages and a g r i c u l t u r a l p r i ces , while still pro tec t ingemployment and ensur ing t h a t in f la t ion remained moderate and underco n t ro l .

The f i r s t and only chal lenge to coordinat ion took place inOctober 1950 when i nsurgen t unions declared a genera l s t r i k e anddemanded wage increases beyond t hose pe rmi t t ed by the se t t l ement .The s t r ike became th e l a rges t in Austr ian postwar hi s to ry . TheCommunist Par ty - aided by Sovie t occupying fo rces in the Sovie tzone - a l l eged ly played an impor tant ro l e . 70 The s t r ike was unsuccess fu l in cha l l eng ing the co l labora t ive system.

In 1951, a t r i p a r t i t e Economic Direc to ra t e was c rea t ed tocoord ina te wage and pr i ce se t t i ng , as well as other i n i t i a t i ve sregarding economic pol icy but was subsequent ly declared uncons t i t u t i o n a l by th e Austr ian Supreme Court , as it improperly combinedgovernment au thor i ty with pr iva te i n t e r e s t groups . The system wasrecons t i t u t ed based upon pr iva te agreements between l abor marketorgan iza t ions . Government involvement has s ince than formal lytaken place only as voluntary consu l ta t ion with th e "Soc ia l P a r t ners" . I t may be t h a t All ied concept ions of publ ic -p r iva te d i s t inc t ions played a ro le in the Cour t ' s dec is ion . In any event , th eru l ing made only a form31 di f fe rence for the i n s t i t u t i o n a l f ram

Documents

Postwar Planning Policies Trade Union Representational Rights: A Comparison of British, Swedish Austrian Reforms, 1945-55 (WPS 60, 1995) Jytte Klausen