Organized Interests and Constrained Partisanship – Case Studies of Collective Skill Formation in Liberal Market Economies

Conventional wisdom holds that training reforms towards collective skill formation are unlikely, if not outright impossible, in Liberal Market Economies (LMEs). Respective arguments stress the absence of non-market coordination in LMEs, which militates against training cooperation between employers, unions and the state. Yet, in Australia, Ireland and England governments have frequently attempted to increase cross-class cooperation and employer involvement in training since the late 1970s. On the basis of in-depth case studies, this paper shows that Ireland and Australia (until the mid-90s) have successfully moved into this direction, while English governments did not increase and in fact dismantled cooperation in training.

The explanation I offer for these trajectories centers on the relationship between unions and non-right partisan governments in reforming strongly conflictive training arrangements, which had exhausted their function during the late 1970s. In light of the economic crises of the 1970s and 1980s, governments attempted to use training reforms in order to reform their industrial relations systems towards producing wage restraint on part of the unions to produce economic stability. For these processes the partisan composition of governments, whose choices were constrained by economic turmoil, mattered crucially. The conservative Thatcher governments followed a class-warfare approach by curtailing union influence in training and industrial relations institutions, while centrist coalitions in Ireland and left ALP governments in Australia used training to entice the union movement towards wage restraint and pacify their opposition towards economic liberalization. These reform politics created in turn created their own feedback. While the strategies of non-right governments contributed to policy concertation in training and industrial relations, right governments strategies had the corollary that policy concertation subsequently ceased to be feasible for increasing cross-class cooperation.