The Crisis of Social Democratic Trade Unionism in Western Europe

Martin Upchurch

The end of the second world war in Western Europe ensured political settlements generally inclusive of trade unions. Britain saw a consolidation of the relationship between the Labour Party and trade unions, while in Germany the SPD entrenched its position as the social democratic ‘party of labour’. The political events that shaped the settlements varied. In France and Italy the Communist Party had gained credibility in the resistance to German occupation and many workers looked to the Communist Party rather than the reformist Socialist Party. The relationship between a social democratic party and unions was strongest in Sweden, with the SAP and LO forming a stronghold on the political trajectory of that country for many years. Exceptions were Spain and Portugal, where fascist dictatorships lingered on until the 1970s.

Don’t waste the crisis: The case for sustained public investment and wage-led recovery policies

Frank Hoffer

Returning to the pre-crisis world after timely, targeted and temporary government interventions as advocated by the OECD and others is risky and a waste of public funds. Structural changes in income distribution, taxation and capital markets are needed to address the fundamental causes of the crisis and put social justice and decent work at the centre of a crisis response.

Root Causes of the Global Economic Crisis

In recent decades, wages and transfer incomes have not grown in line with productivity in most countries. In fact, institutional and legal capital and labour market changes, combined with aggressive, short-term profit-maximisation strategies enabled the owners of private enterprises and financial capital to appropriate most of society’s productivity gains. Moreover, threats of relocation or disinvestment resulted in labour market deregulation and casualisation of employment. Such global capital mobility led to the rise of tax havens, transfer pricing and tax competition, reducing the ability of governments to tax capital, thus driving down tax rates and regulation levels. Meanwhile, the high profit rate in the financial industry put pressure on the real economy to produce similar results for shareholders. Thus, the profits of the financial bubble economy became the benchmark for the real economy.