The Neo-corporative Mixed Economy
混合经济代写 This paper presents notes briefing on the negotiated economies of Denmark and Austria. A negotiated economy is a system…
This paper presents notes briefing on the negotiated economies of Denmark and Austria. A negotiated economy is a system of economy, political, or social organization that all the stakeholders are involved in decision-making by integrating them into the economic and political system. The reading on the negotiated economy in Denmark and Austria will enhance the understanding of how these economies function in policymaking.
Negotiated Economy in Denmark
Denmark is a small country with a population of at most 5.2 million people (Campbell, Hall, & Pedersen, 2006). The country has advanced economies both politically, economically, socially, and legally. The prosperity of Denmark is vested in the optimization of the negotiated economy. Nonetheless, there are underlying traits that make the country distinct from other small countries including;
- External threats have created a public sense of vulnerability and hence elite use this as an opportunity to create policies for unity and common interests and identity.
- The country has a long history of small elite groups dominating state authority and hence making decisions that are based on national strategies and interests.
- Since the country is small and economy open, political decisions are pragmatic rather than based on ideals and ideologies.
- The country has institutionalized macro policy concertation based on negotiation and consensus.
These traits make the country distinct regarding policymaking principles that are neither mix nor market economy but of the negotiated economy. The negotiated economy of Denmark is characterized by neutral political and economic processes and relations. As such, the negotiated economy is that which coordinate the economy through the integration of autonomous actors in both the public and private sectors. The governance in Denmark is decentralized coupled with autonomy and authority in both public and private institutions. Generally, the economy of the country is built on solidarity in negotiated policies and trust.
Socioeconomic discourse in Denmark
The Denmark social-economic discourse is based on a deliberate process that seeks to get a common ground for understanding economic issues. The macroeconomic phenomena in Denmark are not objective as expects but rather subjective based on the interpretation and perception of economic data. Instead of policies being shaped by the exotic frames to find the meaning of economic data, the discourse is based on the prior experience on the macroeconomic phenomena and common interest.
The Keynesian paradigm as applied by Denmark mainly focuses on balancing the negotiation of policies among the stakeholders. The approach is a blend of the principle of liberalism and social democracy. There are limited direct government interventions to enhance the autonomy of the actors in influencing policymaking. The social-democratic aspect is portrayed through the multiplicity of social interests.
Structural policy as a political project
The policies that began as complementary to support existing ones have gradually come to constitute an overarching political project. Political systems have become the general ways of conducting negotiations. There exist processes for structural policy development. The government introduced an institutionalized form of investment through pension funds and wage-earner capital. As such, policymaking is considered as a trade-off between employment and balanced budgets for optimal management of aggregate demand.
There is a generalized system of negotiations is a process of steps including;
- Organizing negotiations between private and public sectors, local and central state, and labor and capital.
- Interlocking negotiation involves a sequence of negotiations at all levels.
- Allocating privileges among social partners
- Changing the mechanism for creating new policies and reform of the old ones requires experience
- Establishing an agency for implementing strategic policies
In summation, though the negotiation economy has been successful in Denmark, it does not imply it is a prerequisite for small countries to advance in the economy.
Austria is among the smallest countries in the European Union. As of 1993, the country’s population was 3.7 million (TRAXLER, 1998). Manufacturing and service sector has the highest number of employees. It is considered the most corporatized country in western countries. The system is based on collaboration between state, capital, and labor. Four big interest associations represent labor in Austria including the Federal Chamber of Business, Peak of the Chambers of Agriculture, the Austria Trade Union Federation, and the Federal Chamber of Labor. Therefore, social partnership for collective bargaining between all the stakeholders regarding social and economic policies are influenced by the interests of labor and capital. Austria is distinct not only on its corporatist but also its stability from the negative influence of other European economies.
When Austria is compared to other European countries, it has weak labor and capital because of late industrialization. The issues of weak capital and labor were amplified by alliances with capitalist partners. These negative developments led to the creation of labor movements organizations. Labor unions became stronger before the First World War and were granted corporal status, security, and integrated into the formulation of public policy. The reason for empowering unions is the predominance of protectionist interests among capitalists. Therefore, labor associations became key players due to their organizational ability than business associations in collective bargaining.
The role of the state in Austria’s industrial relations
There are four main roles of the state in industrial relations. First, it lay the rules for governing working conditions. Secondly, establish a framework of industrial relations. Thirdly, participate in employment. Lastly, it sponsors corporatist macro-economic management.
Labor union structure
The labor union in Austria is the most centralized and distinct in western Europe. The union has fourteen affiliates from all over the country. There are blue-collar workers and white-collar workers in the private sector. There are either sectoral unions of blue-collar workers while most of the white-collar workers are in a single union. There is one union for both collars in art and media. The separation is important to prevent autonomous white-collar unions outside OGB.
Labor union policy
Labor unions in Austria have adopted a consistent position through experience dealing with capitalists. The main goals are to preserve the dignity of employment while promoting economic growth. The unions have adopted policies that prioritize employment more than a wage increase. They also respond to changes in the balance of political powers. The unions have focused more on quantitative macro-economic goals than qualitative goals related to the workplace.
Austria’s industrial sector is mostly comprised of large public sectors. The nationalized enterprises working together with the big four labor unions strived to maintain full employment in the 1970s by hoarding labor which short-lived due to economic problems. The government responded by privatization program that mainly focused on the manufacturing sector. The move led to the fragmentation of industries to form small enterprises. As a result, the sector became weak compared to employees’ associations.
Overall, Austria’s economy has performed well due to its stability and integration of various stakeholders in decision making. The centralized associations and decentralization of bargaining are compatible with the macro-economic goals of the country. The corporations are strong and flexible accompanied by wage inequality. These policies are essential for stability Austria has enjoyed for years.
TRAXLER, F. (1998). Austria – Still the Country of Corporatism. In: Ferner A. and Hyman R. (eds) Changing Industrial Relations in Europe, Oxford: Blackwell, pp.239-261.
Campbell, J. L., Hall, J. A., & Pedersen, O. K. (editors). (2006). National Identity and a Variety of Capitalism: The Case of Denmark, Montreal: McGill University Press