The British often believe they have (and are believed by other people to have) unusually powerful unions and employers’ associations. It is certainly the case that, by almost any measure, British unions are stronger than American. Yet British unions in turn can be outmatched by their counterparts in many European countries, a fact their insular leaders often overlook. In Norway, Sweden and Austria, for example, the proportion of the workforce belonging to unions is over 80 per cent, a far higher proportion than in Britain. Nor is the strength of working-class movements confined solely to the industrial sector. In the European countries in which the unions are strongest, not surprisingly, the Social Democratic Party has also fared well. The classic example is of course Sweden, where the Social Democrats have dominated government since the early 1930s, forming the government continuously from 1936 to 1976. The combination of strong unions and almost continuous Social Democratic rule might fill the British or American businessman with despair.
How can capitalism survive in such an environment? In practice, the neocorporatist countries such as Austria, Sweden, Norway and the Netherlands have prospered.’ Austria, for example, passed from being one of the poorest to one of the richest West European countries between the end of the Second World War and the 1970s.2 Sweden, too, exemplifies a high-income economy, matching the USA in terms of real income per capita. The number of working days lost per 1000 workers due to strikes has also been low in the neocorporatist countries, while levels of productivity have been very high. In short, in spite of the apparent strength of working-class movements, the neocorporatist countries have sustained highly successful capitalist economies, providing a congenial setting for business activity: a most successful compromise has been struck between capital and highly-organised labour.