Comparative Political Economy of Work

Marco Hauptmeier, Matt Vidal

• Publisher: Bloomsbury Academic
• Year: 2014
• Print ISBN: 9781137322272
• eBook ISBN: 9781350305304
• Edition: 1
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

An edited book in the Critical Perspectives on Work and Employment series associated with the annual International Labour Process Conference. The book focuses on comparative work and employment relations research conducted within a broader political economy framework. Written by leading academics, it contains cutting-edge research.

CHAPTER 1

Comparative Political Economy and Labour Process Theory: Toward a Synthesis

Matt Vidal and Marco Hauptmeier¹

Comparative political economy and labour process theory, which both emerged as distinct literatures in the late 1970s, share extensive common ground yet remain surprisingly isolated from each other. This relative insularity is somewhat perplexing, given that models of production and employment relations systems have featured prominently in both literatures. On the one side, an enduring theme in comparative political economy has linked national institutions to employee representation and workplace voice (Dore 1973; Streeck 1984; Thelen 1991; Turner 1991), seemingly of interest to both labour process scholars and comparativists. On the other, labour process theory is about how politics and culture shape the organization of work and as such is a form of political economy. Yet, comparative political economists have focused mainly on macro and meso institutions (for example training regimes, inter-firm relations, corporate governance, finance systems, the state), while labour process scholars have continued to focus largely on the workplace issues of control, consent, resistance and accommodation. While scholars in each tradition have occasionally engaged debates and theories from the other tradition – as discussed below – such attempts have been relatively rare.

It is tempting to speculate about reasons for a lack of engagement between these two traditions. Methodologically, for instance, labour process scholars tend to prefer in-depth case studies of individual work-places, while comparative political economists have typically deduced firm behaviour from national institutional context. In terms of academic discipline, labour process analysis has been largely based in the sociology of work and labour economics, while comparative political economy has been developed from within political science and industrial relations. Perhaps most importantly, there appear to be diverging theoretical commitments among scholars within each tradition: labour process researchers maintain the analytical priority of social relations at the point of production; comparativists hold to the fundamental importance of national-level institutions. Our goal here, however, is not to dwell on the curious insularity of these traditions but to look backward only in service of moving forward, exploring common themes in order to advance our argument that while both traditions have critical strengths each also has key weaknesses that may be remedied by more sustained engagement with the other. We hope that our proposal, as well as the chapters that follow, will be equally interesting and engaging for scholars working in both traditions.

We begin with an overview of the comparative political economy literature, focusing on its roots in research on neo-corporatism in Europe, debates over national models of capitalism, and more recent engagement with the themes of institutional change and within-country variation. We then provide a similar overview of labour process research, focusing on the problem of managerial strategy and workforce reactions, the diversity of labour processes, and attempts to understand connections between the labour process and the wider competitive and institutional environment. Our overviews are followed by a more critical assessment of each literature in light of the other, suggesting further areas of potential synthesis for future research.

We argue that comparative political economy has focused on institutional difference to the neglect of systemic capitalist processes, and on macro- and meso-level institutions to the neglect of the micro level, including labour process dynamics. Labour process theory can contribute to comparative political economy, we contend, with its analyses of how managerial strategy regarding work organization is often inconsistent and incoherent, and must be implemented in the context of deeply entrenched workplace politics and culture. The struggles between managers and workers over the extraction of labour effort – and how to interpret and respond to competitive (and institutional) pressures in order to survive and make a profit – feed back into the wider political economy. Even if managers could form consistent, coherent strategies, within the politics of production they must negotiate outcomes with workers, generating a fundamental source of variation at the organizational level. For its part, labour process theory has developed a systematic understanding neither of how institutions may shape and alter competitive pressures and accumulation dynamics, nor of the institutional distinctiveness of national contexts. National institutions provide a basic source of variation in the structure of employment relations systems, the latter being the most immediate context within which workplace dynamics unfold. Formal national and regional institutions moderate and give distinctive flavour to systemic capitalist pressures. In addition, systemic capitalist pressures as such – the need to survive the competitive struggle between firms, negotiate outcomes in the workplace and make a profit – are understood by owners, managers and workers on the ground through formal and informal cultural institutions, including ideologies of shareholder value and antiunionism, as well as various logics of management such as taylorism and employee involvement.

Comparative Political Economy

Our review of the comparative political economy literature is necessarily selective, focusing on mainstream approaches that examine work and employment relations or are of theoretical relevance to these. Comparative political economy initially developed in the 1970s out of political science, with important contributions also being made in industrial relations and comparative sociology. It emerged as a response to theorizing in the social sciences following World War II, most importantly neoclassical economics and modernization theory, which proposed a growing convergence of social and economic processes across countries. Theoretical orientations in the comparative literature differed widely, but an important common denominator was the focus on national institutions and politics in structuring and shaping social and economic life (for reviews of the various institutional theories see Hall and Taylor 1996; Morgan and Hauptmeier 2014).

Building blocks of comparative political economy

Neo-corporatism was an early strand in the literature (Schmitter 1974). It built on the insight that class conflict was very differently institutionalized across countries (Dahrendorf 1959) with implications for the power of working-class organizations and their ability to shape social and economic outcomes (Korpi 1983). The focus was on how intermediary organizations – primarily labour unions and employer associations – took part in the governance of the economy (Katzenstein 1985). Historically oriented studies revealed how both unions and employers played an important role in the creation of welfare states and in the subsequent governance of labour markets and welfare institutions (Esping-Andersen 1990). Another empirical focus was the response of countries to the 1973 oil crisis. Unions, employers and the state engaged in tripartite concertation and Keynesian-inspired macroeconomic governance (Scharpf 1991). Interest in neo-corporatism waned in the second half of the 1980s, but later made a surprising comeback when governments, labour unions and employers engaged in social pacts to negotiate economic adjustments in various European countries (Hamann and Kelly 2007).

While the neo-corporatist literature examined the role of labour unions in the wider political economy, industrial relations research showed how an institutional perspective informed an understanding of workplace dynamics. A seminal study was Ronald Dore’s (1973) comparison of British and Japanese workplaces, which highlighted persistent differences in industrial relations. His explanation for the observed pattern relied on institutional and cultural factors, although he also considered the possibility of some scope for mutual learning across countries. In a similar institutional vein, Wolfgang Streeck (1984; 1992) detailed how sectoral collective bargaining, works councils, employment protection and the co-governance of the national training regime created good working standards and social benefits for German workers. Institutional factors imposed ‘beneficial constraints’ on management (Streeck 1997), which foreclosed low-wage employer strategies and also facilitated competitiveness and the export strategies of German firms in high-end market niches. Similarly, Lowell Turner (1991) found that institutionally guaranteed rights gave worker representatives the possibility to influence change processes and outcomes in Sweden and Germany, which contrasted with the weaker and more conflict-based influence of unions in the UK and US. Bruce Western (1997) examined the effect of market competition and internationalization on labour unions, arguing that the varying fortunes of labour unions in different countries can be explained by the extent to which labour unions were institutionally insulated from market competition.

Another strand in the comparative political economy literature developed sectoral analysis (Campbell et al. 1991; Hollingsworth et al. 1994). Based on detailed case studies, they argued that sectors were governed through a number of mechanisms including markets, states, hierarchies and associations. The varying prevalence of these mechanisms generates distinct modes of governance and outcomes across sectors, including in work and employment relations. Chapter 12 by Enda Hannon in this volume connects to this theme with a comparison of the pharmaceutical and food manufacturing sectors in the UK. Owing to the greater strategic importance of the pharmaceutical industry for the UK economy the state provides a number of direct incentives and resources to the pharmaceutical sectors, while the emphasis in the food manufacturing sector is on the regulation of business activities. The final chapter in J. Rogers Hollingsworth and collaborators’ 1994 volume discussed the question of whether sectoral or national factors played a more important role in influencing economic processes. While contemplating that economic internationalization might lead to a greater salience of sectoral characteristics in influencing economic processes, they concluded that national factors, including national institutions, continued to be more important. The subsequent comparative political economy literature seemed to accept this conclusion and took a national turn, as discussed in the next section.

National models of capitalism

Globalization theorists argued that countries which do not liberalize labour markets and retrench welfare states would be shunned by multinational companies. In contrast, the emerging literature on national models suggested that countries compete successfully in the international economy with different national institutions, including those with strong labour representation, social protection and developed welfare states (Garrett 1998). One of the first national-models frameworks was the societal effects approach, which examined how organizations are shaped by the ‘social fabric’ of the national context within which they operate, including ‘the interconnections between different social spheres such as manufacturing, industrial relations, education, training’ (Maurice et al. 1980:61; see also Maurice et al. 1986). Another early approach, known as social systems of production, elaborated the argument that national economies coalesce into complementary institutional configurations (Hollingsworth and Boyer 1997). In a similar vein Richard Whitley (1999) proposed eight institutional dimensions that combine into one of six types of national business systems: fragmented, coordinated industrial district, compartmentalized, state-organized, collaborative and highly coordinated.

Building on the foregoing contributions, Peter Hall and David Soskice (2001; see also Hancké et al. 2007) developed the influential varieties-of-capitalism approach, which differentiated between so-called liberal market economies (Anglo-Saxon countries) and coordinated market economies (continental and Scandinavian countries and Japan). This theory uses a rational choice model to argue that companies have to solve coordination problems in different spheres – employment relations, skills/training, corporate governance, finance and inter-company relations – but do so very differently in liberal and coordinated market economies. The institutions in each type of economy and the complementarities between them provide comparative institutional advantage, which firms seek to exploit. For example, in Chapter 6, Claire Evans and Dean Stroud compare how steel companies in Germany and Britain comply with European Union environmental regulation. In Germany different elements of the institutional framework complement each other, including the built-in environmental agenda in vocational education and continuous training, the long tenure of employees and the participation of employees in management decisions. These beneficial constraints allow companies not just to follow environmental regulation, but instead to turn the environmental agenda into an advantage by using it to save resources and develop innovative and productive work practices. In Britain different institutional features matter, including narrower task-focused training, the exclusion of environmental issues in vocational education and training, smaller investments in continuous training and human resources, and fewer channels for worker participation in change processes. Overall, environmental regulation in Britain focuses on legal compliance so that innovative work practices are not systematically developed. In contrast, in Chapter 9 Giedo Jansen and Agnes Akkerman present a quantitative analysis of the relationship between increased employment flexibility and union capacity across the European Union states. Specifically, they examine variation across countries in how use of temporary employment and performance-based pay affects union membership and strike incidence, finding that the outcomes are not in the direction hypothesized by varieties-of-capitalism theory.

Along with Whitley (1999), scholars have developed typologies of national models that are more complex than the liberal/coordinated binary, including many examining distinctive national institutional arrangements in Southern and Eastern Europe, Latin America and Asia (Iankova 2002; Amable 2003; Schneider 2013; Witt and Redding 2013). Colin Crouch (2005) has levelled a formidable critique against cross-national typologies, arguing that individual countries should be studied not to determine the type into which they fit, but which types are found within them. In Chapter 11, Hyunji Kwon and Sanghoon Lim demonstrate another problem with developing ostensibly general typologies of national models based on a few starkly contrasting Western countries. Focusing on the banking sector in Korea, they document the surprising recent centralization of collective bargaining despite a weak institutional basis for sectoral bargaining, most importantly relatively weak unions and a virtual absence of employer associations at the sectoral level. Yet, in contrast to the received wisdom from the European case...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Illustrations
• Notes on Contributors
• 1. Comparative Political Economy and Labour Process Theory: Toward a Synthesis
• Part I: Systemic Problems of Advanced Capitalism
• Part II: National Institutions
• Part III: Within-Country Diversity
• Part IV: International Organizations and Liberalization
• Index