socio-economic bargaining in the netherlands: redefining the post-war policy coalition

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Socio‐economic bargaining inthe Netherlands: Redefiningthe post‐war policy coalitionSteven B. Wolinetz aa Professor of Political Science , MemorialUniversity of NewfoundlandPublished online: 03 Dec 2007.

To cite this article: Steven B. Wolinetz (1989) Socio‐economic bargaining in theNetherlands: Redefining the post‐war policy coalition, West European Politics,12:1, 79-98

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Socio-economic Bargaining in the Netherlands:Redefining the Post-war Policy Coalition

Steven B. Wolinetz

INTRODUCTION

The Netherlands is one of several smaller democracies whose post-war politicshave been characterised by a strong and persistent partnership among tradeunions, business associations and government. However, that partnership haslong since eroded. Close co-operation in the immediate post-war years gaveway to disagreements on wages and wage regulation in the 1960s and stalematein the 1970s when the social partners were unable to agree on either wages or theoverall direction of social and economic policy. However, this deadlock wasbroken when a new centre-right cabinet assumed office in 1982. The Lubbersgovernment implemented sweeping measures designed to reduce the deficitand facilitate market-led recovery. These included a 3.0 per cent reduction ofpublic sector wages and social welfare payments, the de-indexation of wagesand benefits, and changes in the social welfare system which reduced the scopeand generosity of general and supplementary benefits.

Although the government's austerity programme was broadly similar tomeasures implemented elsewhere (e.g. Belgium), both the content of govern-ment policies and the way in which they were imposed were unusual in thepost-war Netherlands. Commitments to deficit reduction and supply-sideeconomics contrasted with earlier emphases on maintaining employment, andthe Lubbers government's measures constituted a major rollback of a welfarestate whose provisions had continued to expand through the mid-1970s.Although cabinets since 1975 had attempted to curtail expenditures, noneattacked the problem with the drive of the Lubbers cabinet, which was uniqueamong Western governments in that it not only suspended wage indexationbut also cut public sector salaries. Moreover, although trade unions wereincreasingly aware of the need to restrain incomes, the cabinet measures didnot emerge from either bipartite or tripartite discussions, but rather wereimposed without the initial consent of either trade unions, who activelyobjected, or employers' associations, who heartily approved.

Developments in the Netherlands are interesting in light of recent literatureon corporatism. In Small States in World Markets, Peter Katzenstein arguesthat smaller states rely on corporatist strategies to smooth the process ofindustrial adjustment. Recourse to corporatism reflects not only domesticfactors such as class compromises or prior traditions of accommodation, butalso the position of smaller states in the international economy. Because theyare highly dependent on trade, smaller democracies cannot employ protection-ist measures to insulate themselves from changes in the international economy.Nor can they impose changes from within. Instead, they enlist the co-operationof trade unions and business associations in the formulation of economic and

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80 POLITICS IN THE NETHERLANDS

industrial policies. As such, democratic corporatism provides a device forharnessing social forces, facilitating flexible response and easing, but notavoiding, the burden of adjustment.1 According to Katzenstein, democraticcorporatism exists in two forms: social corporatism, characterised by strongSocial Democratic parties and centralised trade unions, well-positioned toinfluence the content of socio-economic bargaining, and liberal corporatism,characterised by weaker labour movements and stronger business com-munities.2 Both share three distinguishing traits:

an ideology of social partnership expressed at the national level;a relatively centralized and concentrated system of interest groups;and voluntary and informal coordination of conflicting objectivesthrough continuous political bargaining between interest groups, statebureaucracy, and political parties.3

Although the specific forms which it takes vary, democratic corporatismconstitutes both a durable set of arrangements and a device for facilitatingchange. Sustained by the party systems and structures of interest represen-tation in which they are embedded, corporatist structures are difficult tocircumvent. Commenting on viability of democratic corporatism in the 1980s,Katzenstein argues:

Because corporatist structures encourage flexibility, collaboration, andthe absorption of the political consequences of economic dislocations,alternative political coalitions are not easily formed. The political logicinherent in the corporatist structures of the small European states insteadenhances political predictability and incremental adjustment. Thesestructures narrow power differences and link state and society intimately.They thus succeed in capturing potential coalitions among changingpolitical forces and in channeling political energies into therelegitimizating of corporatist arrangements.4

The Netherlands, along with Belgium and Switzerland, is one of Katzen-stein's examples of liberal corporatism and also has one of the most openeconomies within the OECD.5 However, neither the strained relationshipsbetween social partners in the 1970s nor the ways in which austerity measureswere imposed in the 1980s fit comfortably with metaphors of continuingsocial partnership or continuous political bargaining. This analysis willexamine the changing contours of Dutch corporatism in light of the initialbargains which established corporatist structures in the 1940s and the 1950sand the ways in which these were subsequently renegotiated in light ofchanging political and economic conditions. In contrast to the more stablecorporatist systems to which Katzenstein directed his greatest attention,the ways in which the post-war settlement was defined and redefined inthe Netherlands provided considerable room for alternative policy coalitionsand the imposition of solutions for economic crisis outside establishedcorporatist structures.

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SOCIO-ECONOMIC BARGAINING IN THE NETHERLANDS 81

THE POST-WAR SETTLEMENT AND BEYOND

The post-war settlement in the Netherlands is sometimes thought of as a singlebargain or deal which created a complex institutional edifice and embeddedtrade union federations and employers' associations in policy-making.However, following Gourevitch et al., it is more useful to think of the post-war settlement as a series of bargains or exchanges, some more durable thanothers, in which not only representatives of capital and labour, but alsopolitical parties tried to renegotiate more favourable deals.6 We candistinguish three distinct phases before the imposition of austerity measuresin 1982: an initial deal in which trade unions and employers' associations, aswell as Socialists (PvdA) and Catholics (KVP) co-operated in the post-warreconstruction and subsequent expansion, an intermediate period in the 1960swhen unions and employers increasingly disagreed not only about workers'share in a full employment economy but also about the form and desirabilityof wage regulation, and a later period in which unions and employers weredeadlocked, agreements were rare, and the left, and subsequently the centreand the right, attempted to establish alternate policy coalitions.

The initial bargain

The first deal crystallised during and after the Second World War, when abroadly-based coalition favouring economic growth, full employment, andthe expansion and elaboration of the welfare state emerged. This included tradeunion federations and employers' associations, who had negotiated anunderground pact in 1943 and established the bipartite Foundation of Labouras an institutional manifestation of their co-operation, and the Catholic andSocialist parties, who governed together either alone (1946 to 1948) orwith others (Liberals and Christian Historicals from 1948 to 1952, Anti-Revolutionaries and Christian Historicals from 1952 onward) from 1946 to1958. Trade union federations agreed not to strike and shelved demands forco-determination. Employers' associations in turn recognised the trade unionsas negotiating partners and endorsed full employment as a central goal ofgovernment policy.7 At the same time, rapprochement between Socialists andCatholics provided a basis for centre-left coalitions and an active govern-ment role in the economy which had been unavailable before 1939.

The specific terms of the post-war settlement emerged from bargaining andcompromise. The cabinet, returning from exile, was initially suspicious of thenew social partnership, but nevertheless incorporated the Foundation ofLabour into the system of wage regulation which it was any case imposingby decree.8 At the same time, Catholics and Socialists held different viewsabout what the post-war economy should look like. Although both rejectedclassical liberal economics and favoured some form of corporatist regulationof the economy, the two coalition partners differed on the desirability ofeconomic planning and whether the new corporatist arrangements should beestablished by law or allowed to emerge from society. Eventually a compromisewas reached, which took into account not only the Socialist and Catholicpositions, but also Liberal and Protestant reservations. The Social andEconomic Council (SER) was established in 1950 to serve both as a top

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advisory organ to the government and as the capstone of a series of tripartitesectoral boards which unions and employers' associations could organise ifthey pleased.9 In practice such boards flourished only in weaker sectors suchas agriculture or retail trade. With the exception of mining and food-processing, none was established in industry.

Government policies reflected similar compromises. The Socialists (PvdA)had initially hoped to engage both the newly created Central Planning Bureau(CPB) and the Social and Economic Council in a process of indicativeplanning. However, Socialist hopes for democratic planning (rooted in thePlan Socialism of the 1930s) were effectively scotched in 1946 when theCatholic Party (KVP) assumed control of the Ministry of Economic Affairs.Under successive Catholic and later Protestant ministers, the economicsministry avoided planning, but nevertheless assumed an active role in pro-moting the postwar industrialisation of the Netherlands. The ministry targetedareas for industrial expansion, arranged credits and, in co-operation withexisting firms, encouraged the establishment of new plants in areas in whichjobs were needed.10

Incomes policies emerged as a central facet of the new strategy. TheNetherlands had been late in industrialising, and a substantial portion of therelatively small pre-war industrial base had either been removed or destroyedduring the war. Policy-makers believed that if jobs were to be provided foran expanding population (augmented by Dutch citizens returning fromIndonesia) further industrialisation was essential. This could only be accom-plished if the volume of exports could be increased and a favourable balanceof payments could be maintained. To do so, it was necessary to restrain wagesand produce more cheaply than neighbouring countries; securing markets andencouraging profits in turn would encourage new investment and additionalemployment." Initially imposed by the returning cabinet, incomes policiesreceived the endorsement of the social partners. Although wage guidelines wereformally laid down by the cabinet and administered by the Board of Govern-ment Mediators, in practice, incomes policies were jointly determined by theFoundation of Labour and the government and implemented by the Boardof Government Mediators in consultation with the Foundation. After theSocial and Economic Council was established, it was incorporated into theprocess: increases in wages were considered in the context of macro-economicgoals formulated by the council.12

In this first bargain, trade unions exchanged labour peace for full employ-ment and the expansion of the welfare state. Centrally negotiated incomespolicies were restrictive, and incomes were geared to the minimum whichindividuals and families needed to survive. Few increases in real incomes werepermitted until the first 'welfare round' in 1954. Nevertheless, incomes policiesimplemented under Socialist-led cabinets received the active endorsement ofthe Socialist, Catholic and Protestant trade union federations and, after someinitial resistance, were accepted by most workers.13 In turn, governmentpolicies produced results. By the late 1950s, registered labour reserves haddropped below 2 per cent and the Dutch were approaching full employment.In addition, new social welfare measures were implemented, first on aprovisional and later on a permanent basis.

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Redefining the bargain: the 1960s

The first deal lasted until 1958, when the Socialist-Catholic co-operationcame to an end. Although the social partners and the government hadbeen able to sustain guided wage policies throughout the 1950s, there wasgrowing disagreement on the shape incomes policies were to take. Initially,incomes policies, which had been coupled with extensive job reclassification,had been applied uniformly across sectors. However, by the mid-1950s,the Protestant and Catholic trade union federations and the employers'associations began to argue for greater differentiation. Although thesesuggestions were deflected by granting across-the-board wage increases,demands for change continued.14

Change in the government coalition opened the way for change in the systemof wage determination. In office from 1946 until 1958, Catholics and Socialistshad exhausted the greater portion of their common agenda and relationsbetween the two parties were increasingly strained. In 1958, the centre-leftcoalition collapsed when the Socialist parliamentary caucus, frustrated byrecurrent compromises and alarmed by recent electoral losses, withdrew itssupport.15 Following new elections in 1959, a confessional-Liberal cabinetassumed office.

Unlike the previous centre-left government which had insisted on uniformwage policies, the new centre-right cabinet hoped to allow greater differen-tiation in wages by linking increases in individual sectors to changes inproductivity. However, this foundered for lack of adequate data, and thegovernment and social partners were forced to negotiate a formula todetermine permissible increases. When this failed to produce the desiredresults, the government became more closely involved in wage settlements andbegan searching for alternative means of allowing greater freedom in collec-tive bargaining while still maintaining wage restraint.16

New procedures were inaugurated in 1963: wage increases were to benegotiated by the social partners in the light of Social and Economic Councildiscussions, in turn based on the Central Planning Bureau's macro-economicforecasts; and collective agreements, previously policed by the Board ofGovernment Mediators, were to be reviewed by the Foundation of Labour.However, this process proved unworkable: trade union federations arguedthat Central Planning Bureau forecasts were too conservative and the resultingincreases too small, and the Foundation of Labour was reluctant to overrulecollective agreements.17

At the same time, the system was being undermined by labour marketpressures. Registered reserves dropped below 1 per cent of the labour forcein the early 1960s. 'Black' or supplementary wages were widespread, and thepolicing of sectoral negotiations became increasingly difficult. Contractsfrequently exceeded guidelines, but the Foundation of Labour, now chargedwith overseeing wage guidelines, was reluctant to intervene. Supplementarywages were subsequently incorporated into central agreements. As a result,wages increased dramatically in the mid-1960s: 13 per cent in 1963, 15 per centin 1964, and another 10 per cent in 1965.

By the late 1960s, the system was in disarray. Incomes policies had lost their

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rationale, and trade union federations now favoured free collective bargaining.However, employers' associations were reluctant to abandon incomes policiesentirely and the Social and Economic Council was unable to reach agreementon a new system. For its part, the government attempted to retain control overexcessive wage settlements by restoring the policing powers of the College ofGovernment Mediators. By this time, the trade unions were increasinglycommitted to free collective bargaining. Government insistence on retaininga provision permitting the rejection of contracts which it deemed excessivein a new law on wage formation in 1970 (previous incomes policies had beenimplemented under an Emergency Decree dating from 1945) resulted in theCatholic and Socialist federations withdrawing temporarily from the Foun-dation of Labour and the Social and Economic Council.18

Although trade union federations were unable to secure either free collectivebargaining or a system of wage formation which they could accept, workers'share of the national income, which had been severely restrained in the 1950s,rose dramatically in the 1960s. For their part, many employers were more thanwilling to pay higher wages or offer extended benefits in order to obtain labour;indeed, much of the argument revolved not around wage increases perse, butrather the extent to which they could be passed on in price increases.

In contrast to the earlier post-war years, when centre-left coalitionsprovided support for guided incomes policies, confessional-Liberal coalitionspresided over growing disagreements over incomes policies in the 1960s.Centre-right cabinets were in office from 1959 until 1965, when the Liberals(VVD) and the confessionals divided on broadcasting policy. Socialistsreturned to the government in a new centre-left coalition; however, the Calscabinet (Socialists, Catholics, and Anti-Revolutionaries) fell in October 1966,when the Catholic Party withdrew its support. After new elections in February,1967, the confessional parties renewed their alliance with the Liberals.

Initially, the shift from the centre-left to centre-right had a greater impacton the party system than on policy. Although emphases changed, neither thebreak between Catholics and Socialists in 1958 nor the break in 1966 led tosubstantial changes in government policies. The expansion of the welfare state,initiated in the late 1940s and 1950s, continued in the 1960s. Temporaryunemployment insurance and old age pension acts, put in place after the war,were replaced by more permanent measures in the 1950s. In the 1960s, severalsupplementary benefits were added.

The 1970s and the search for a new policy coalition

The relative consensus of the 1960s gave way to greater dissensus in the 1970s.Disagreements were rampant not only in the Foundation of Labour and theSocial and Economic Council but also in the party system, where Socialistsand other elements on the left, frustrated by their exclusion from the cabinet,attempted to assert a new political agenda.19

The frustrations of the left reflected its weakness. Early Socialists bankedtheir hopes on the ballot, but after the introduction of universal suffrage in1918 could command no more than 20-22 per cent of the inter-war vote. Incontrast, the Catholic Party had 30-32 per-cent, the Anti-Revolutionary Party

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and Christian Historical Union, another 18-20 per cent. The Catholics werean indispensable element in any coalition, but refused to govern with theSocialists except 'in dire need'. As a result, Socialists did not enter the cabinetuntil 1939. In the aftermath of the Second World War, the pre-war SocialistParty (SDAP) joined with smaller progressive parties in the formation of anew and more broadly-based Labour Party (PvdA). However, attempts towin the support of Catholic and Protestant workers were thwarted by the re-emergence of the religious parties. Although stronger than the SDAP, the onlyway in which the PvdA could govern was in coalition with the confessionalparties.

This fact was graphically demonstrated by the fall of the centre-left Calscabinet in 1966. PvdA leaders, who believed that they had entered a durablecoalition in 1965, found themselves in opposition a year later. Resentmentwas felt not only by Socialist leaders and followers, but also by progressiveelements in the confessional parties who felt betrayed by the return to thecentre-right formula. Dissident factions emerged in the PvdA and in theconfessional parties, and a new party, Democrats '66 (D'66), was established.

Because their demands coincided with changes in the structure of theelectorate, dissident groups quickly made themselves felt in the party system.Throughout the 1960s, the Dutch system had been dominated by five partiesrooted in a segmented social structure, and outcomes barely changed fromelection to election. However, by the 1960s, earlier patterns of mobilisationhad begun to erode and voters were straying from previous moorings. Partyleaders found themselves confronted not only with dissident factions but alsowith increasingly uncertain bases of support.

On the left, the Socialist Party (PvdA) faced not only declining supportand new competition on its flanks, but also a vocal but loosely structuredfaction, the New Left, intent on gaining influence within the party, whichlaunched a public attack on the party leadership. Hoping to arrest their parties'decline, PvdA leaders attempted to incorporate the New Left into the party.They succeeded, but New Left activists were able to penetrate the PvdA. At thebehest of the New Left, the PvdA distanced itself from the Catholic Partyand assumed a majoritarian vocation, demanding primacy for its program-mes and policies in any cabinet formation.

Changes were also under way in the centre and on the right. Although not asstrongly influenced by dissident factions (key elements bolted and joined theleft), the confessional parties were deeply affected by changes in the Catholicelectorate. Throughout 1963, the Catholic Party (KVP) commanded the over-whelming support of Dutch Catholics. However, in the late 1960s, Catholicvoters began to stray from the fold. The rapid decline of the Catholic vote - theKVP slid from 31.9 per cent of the electorate in 1963 to 17.7 per cent in 1972 -weakened the confessional bloc. Confronted by decline, the Catholic Partysought to enlist the Anti-Revolutionary Party (ARP) and the Christian Histori-cal Union (CHU) in an interconfessional party, the Christian Democratic Ap-peal (CDA). Discussions launched in 1968 resulted in electoral alliances in 1971and 1972, a single parliamentary caucus in 1976, a combined list of candidatesin 1977 and complete merger in 1980. Confessional strength stabilised at onethird of the vote - barely more than the former strength of the Catholic Party.

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Increased fragmentation and the changing posture of the left complicatedthe politics of cabinet formation. In 1971 and 1972, the PvdA, Democrats'66 and the Radical Party (originally a splinter from the Catholic Party) formedelectoral alliances and distanced themselves from parties to their right. In orderto secure a parliamentary majority after the 1971 elections, the confessionalsand the Liberals had to include Democratic Socialists '70 (a right-wing splinterfrom the PvdA) in their coalition. When this cabinet split a year later, newelections were held; however, the cabinet formation which followed lasted fiveand half months. The confessionals and the Liberals again lacked a majority.Arguing that they had won the election, the Socialists and their allies insistedon the primacy of their joint programme, Turning Point. Eventually, the Anti-Revolutionaries and Catholics agreed to join a left-of-centre cabinet underSocialist leader den Uyl. In contrast to previous centre-left cabinets, the denUyl government had a progressive majority: 10 ministers from the PvdA, D'66and the PPR, and only six from the KVP and ARP.

In office from 1973 until 1977, the den Uyl cabinet exposed many of theweaknesses of the left. Attempts to act on the basis of the emerging post-industrial agenda were hindered by a lack of concrete proposals and theabsence of a firm majority committed to reform. Unready to act on many ofthe demands laid out in Turning Point, the den Uyl cabinet fell back on earlierSocialist priorities such as extending the welfare state and guaranteeing theposition of the less well-off in Dutch society. The existing panoply of socialwelfare measures were extended by adding new supplementary measures,including expanded disability payments. Wage-related social benefits,previously indexed to the minimum wage were now indexed to the averagewage. At the same time, minimum wages were increased.

Nevertheless, the Socialists could not act without the assent of the confes-sional parties. In its last months in office, the deny Uyl government attemptedto secure the passage of long-delayed proposals for changes in land ownership,further co-determination in industry, profit-sharing, and investment controls.Attempts to secure the first of these led to a break in the cabinet and its demisetwo months before the 1977 elections. The Socialists gained ten seats, and againattempted to place a progressive stamp on a new cabinet. However, Socialists,Democrats '66, and the Christian Democrats (CDA) were unable to agree oneither the programmes or the personnel of a second den Uyl cabinet. Afterrepeated attempts to form a centre-left coalition, a centre-right cabinet tookoffice under CDA leader, Andries van Agt. The cabinet formation took arecord 207 days.

The failure to establish a second den Uyl cabinet opened the way for aprolonged period of centre-right government. Liberals, along with Socialists,had benefited from the weakening of the confessional centre. Although theconfessionals no longer commanded a majority, they retained their pivotalposition. However, Christian Democrats were less inclined to ally with theleft. The Socialists' majoritarian pretensions irritated Christian Democrats.Moreover, the process through which Protestant and Catholic parties wereunified weakened the position of progressive elements within the new partywho either ended up leaving the party or accepting alliances to the right orpolicies which they had previously disapproved. Successive steps toward

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merger reduced their leverage. Constant wrangling with Socialists in the denUyl cabinet, subsequent cabinet formations, and a brief interlude in 1981-82,when a renewed centre-left cabinet was in office, had a similar effect.

Social partnership in the 1970s

Dissensus and polarisation in the party system were complemented by increasedstalemate between the social partners. Following the débâcle of incomespolicies in the 1960s, the Dutch returned to free collective bargaining. Tradeunion federations and employers' associations continued to hold annual dis-cussions on wages with the government in the Foundation of Labour.However, these discussions regularly deadlocked, and only in 1972 was itpossible to conclude a central wage accord for 1973. In the absence of centralagreements, negotiations shifted to individual sectors or firms. In addition,the government frequently intervened, announcing wage freezes and imposingguidelines for lower-level negotiations. Discussions in the Social and EconomicCouncil were equally stalemated; rather than operating as a forum fordiscussion and the discovery of an underlying consensus, the Social andEconomic Council functioned more like a British-style Parliament in whichopposing sides stated positions known in advance.

The deadlocks reflected changes in both the structure and operation of thetrade unions and the posture of the employers' associations. Earlier, agreementon wage policies had been facilitated by the ability of trade union federationsand employers' associations to speak for their followers. However, since theearly 1960s trade unions had been confronted with growing militancy at thebase, which manifested itself from time to time in wildcat strikes, oftenorganised by unofficial unions. This was translated into a more militantposture on the part of affiliated unions and a corresponding shift in powerfrom the national federations - typically more predisposed to compromiseand tripartite bargaining - to the leadership of affiliated unions, who gavegreater expression to the sentiments on the shop floor.20

Other changes were also under way. Until the 1970s the Dutch trade unionmovement was organised in Catholic, Protestant and Socialist federations,and the principal contacts were at the élite level. However, in the late 1960sand early 1970s, the Catholic and Socialist federations drew closer togetherand in 1976 merged into the Federation of Dutch Trade Unions (FNV). Incontrast to the Protestant federation, the Christian National Trade UnionFederation (CNV), the FNV reflected both the growing militancy of someDutch workers and the transfer of power and authority from the central levelto the leadership of the component unions. The latter tendency was enhancedby amalgamation of smaller unions into broader industrial entities, a develop-ment which had been under way throughout the post-war period.21

Increased militancy was matched by a firmer response from business. Incontrast to the 1960s, employers' associations were less willing to concede wageincreases. Instead, employers argued that profits were being squeezed and thatincreases not tied to productivity would be inflationary. Their discussions tookplace against a backdrop of rising inflation, slackening growth and industrialrestructuring. Difficulties reflected not only the effects of the energy crisis,

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but also the structure of the Dutch economy. Post-war wage restraint hadencouraged investment in labour-intensive industries, but the wage increasesof the 1960s had transformed the Netherlands from a low wage to a high wageeconomy. Investment weakened and older sectors such as textiles and ship-building were in trouble.22

Faced with resistance from employers, trade unions were able to defendbut not advance their position. In the early part of the decade, trade unionsstill had sufficient market-power to secure concessions. In 1970, workersthroughout the country received a 400-guilder increase in pay: this stemmedfrom wildcat strikes in the Rotterdam harbour. When these were resolved bygranting an increase, strikes erupted in other locations. Employers and govern-ment responded by conceding an across-the-board increase to avoid furtherunrest. In a somewhat different vein, in 1972 workers occupying the ENKAsynthetic fibre plant in Breda were able to prevent its closure.23 Trade unionswere also regularly included in ad hoc bodies established to cope with theproblems of declining industries. Although unable to prevent restructuringor eventual shutdowns, trade unions were often able to preserve some employ-ment and secure favourable social plans for workers who lost their jobs.

The position of the trade unions was secured not only by market power,but also by the support of the den Uyl government. Presiding over the energycrisis, the den Uyl cabinet insisted that the burdens of adjustment be sharedequally. At times, the cabinet intervened in wage negotiations, freezing wagestemporarily or mandating limited pay increases. Although the unions favouredfree collective bargaining, they were not totally displeased with the results.Wage increases granted under a special 1974 Enabling Act (Machtigingswet)narrowed income differentials, as did the cabinet's policy of indexing socialwelfare benefits to increases in the average wage. Subsequent wage measureshad a similar effect.24 Unions were also able to secure the inclusion ofautomatic price compensation mechanisms in annual collective agreements.However, trade unions were less successful in securing the non-materialdemands, such as more extensive co-determination, profit-sharing (on termswhich they desired) or a voice in investment decisions, which they advancedin lieu of demands for increases in real incomes.25

The stalemate continued in the latter portion of the decade. In the face ofrising inflation trade unions insisted on maintaining the value of real incomes,while employers challenged automatic price compensation mechanisms andinsisted that high wages, taxes and the high costs of the welfare state leftinsufficient room for investment. Trade unions struck in 1977 in order tomaintain wage indexation. Attempts to conclude central wage agreementsregularly foundered. Although trade unions were willing to moderate wagedemands, employers were unwilling to concede either the job preservationagreements or reductions in work time which unions asked in exchange. Attimes the centre-right van Agt government attempted to bring the socialpartners together, but the concessions offered - profit-sharing measures,proposals to limit higher incomes, plans to lower social premiums (the taxespaid by workers and employers in order to finance the welfare state) in orderto preserve the value of real incomes without increasing costs to employers- failed to produce agreement.26 Instead, the van Agt government resorted

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to wage freezes to impose its own wage guidelines. These slowed the pace ofwage indexation, but tended to preserve the buying power of minimumincomes.27

Coping with crisis: austerity from the right

The strategies and responses of the 1970s provide the background for theausterity measures of the 1980s. Faced with increased militancy, uncertainsupport and a changing party system, governments in the early 1970s avoidedconfrontation and continued the expansion of the welfare state. Unions battledto maintain real incomes and the flatter wage structure which successive wagefreezes had produced. However, while trade unions and employers foughtabout wage indexation, important changes in the structure of the Dutcheconomy were under way. Older industries, facing increased internationalcompetition, were shedding labour. Trade unions and employers came togetherin a variety of ad hoc commissions established in order to cope with restruc-turing of declining industries. These scored occasional successes, such as themodernisation or reorientation of some textile plants, but also resulted inspectacular failures, such as the attempt to rescue the shipbuilding industryby bringing disparate wharves together in one large conglomerate.28

Although rescues temporarily preserved jobs and eased the retirement ofredundant workers, employment in manufacturing declined throughout the1970s.29 These tendencies were exacerbated by recession in the early 1980s.Unemployment rates, which had hovered below 6 per cent of the total labourforce from 1974-79 increased to 6.3 per cent in 1980, 9.2 per cent in 1981,12.4 per cent in 1982 and 15 per cent in 1983.30

Rising unemployment coincided with mounting fiscal problems. Publicsector expenditures grew from 45 per cent of gross domestic product in1970-71 to 61.5 per cent in 1981-82.31 Steps were taken in 1975 to restrictthe rate of growth of the public sector to no more than 1 per cent of the nationalincome, and from 1978 onward, the van Agt government attempted to clampdown on expenditures. However, the combined effects of new programmes andgrowing public sector employment, expanded entitlements and greater recourseto social benefits in a period of rising unemployment increased the burdenon the public sector. Automatic wage indexation and coupling mechanismswhich tied public sector salaries and social benefits to private sector wagesmeant that the government had little control over its own expenditures unlessit froze wages in order to keep its own spending in manageable proportions.32

Although increased costs had been initially offset by higher rents from naturalgas, deficits mounted in the early 1980s.33

Trade unions and employers proposed divergent remedies for the crisis.Confronted with rising unemployment, trade unions advocated reductions inwork hours, job-sharing, and the creation of new part-time jobs in the publicand private sector. In contrast, employers argued that the solution lay in lower-ing minimum wages, eliminating rigidities in the labour market, and cuttingpublic sector expenditures in order to allow wider scope for private invest-ment. Their disagreement meant that the Social and Economic Council wasunable to render unified or effective advice on how to cope with unemployment

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or mounting deficits and that social partners, collectively, had scant influenceon government policy.34

Gaps between party positions were equally wide. Socialists advocated job-sharing, reductions in work-hours, and an active role for the public sector,while Liberals and Christian Democrats favoured greater attention to deficits.Because of widening polarisation, the task of coping with the crisis fell toLiberal-Christian Democratic cabinets which have been in office for all ofnine months since 1977. The van Agt cabinet, in office from 1977 through1981, initially tried to mediate differences between social partners while curbingexpenditures. However, the Lubbers cabinet, in office since 1982, has beenfirmly committed to a programme of deficit reduction, austerity and market-led recovery.35 Support for the new focus on market-led recovery came notfrom social partners, but rather from advisory bodies outside of establishedcorporatist channels. We can trace the new agenda back to rumblings ofdiscontent in the business community. In the mid-70s, leading industrialistsargued that growing wage costs and the increasing size of the public sectorwere crowding the private sector and squeezing profits.36 Initially, thesecomplaints received little support; however, rising unemployment gave theindustrialists' claims greater credence.

A 1980 study, Industry in the Netherlands: Its Place and Future, focusedattention on the problems of industry. Carried out by the Scientific Councilfor Government Policy, an academic advisory board with a mandate to carryout future studies in areas in which it sees fit, the report was unsolicited buttimely. Using a product-cycle model, the Scientific Council noted theprevalence of first and second generation industries in the Netherlands.Industrial employment was declining because labour intensive industries wereshifting to the third world. The report underscored the importance of shiftingproduction to more technologically advanced industries and recommendedthat the necessary decisions be made not by business and labour, but ratherby a commission of experts who were to target and support areas of industrialgrowth. The government was to promote change by providing financialfacilities and support for industrial innovation.37

Industry in the Netherlands provoked considerable reaction. Trade unionsand employers' associations acknowledged the need for innovation but weresceptical about the process by which it was to be carried out - withoutconsultation with the all too frequently deadlocked social partners. Thecentre-right cabinet referred the report to the Social and Economic Councilfor comment and also appointed a special Advisory Commission on IndustrialPolicy, lodged in the Ministry of Economic Affairs, under G. Wagner, a direc-tor of Royal Dutch Shell. The Wagner Commission - which contained'indirect' representation from business and trade union federations -concurred in the necessity for industrial renewal, but argued that 'a newindustrial elan' could best be achieved by granting greater scope to privateenterprise and encouraging the development of targeted industries in whichthe Dutch could find niches in world markets.38

This was to be accomplished by bringing wage, energy and environ-mental costs under control, improving the operation of labour markets,simplifying regulations and stimulating investment. The Advisory Commission

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recommended greater differentiation in private sector wages and argued thatthese should be determined in decentralised settings, taking account of therealities facing each sector. An 'investment wage' was recommended as a devicefor compensating workers and facilitating greater investment. In additionpublic sector expenditures were to be brought under control. This entaileddeveloping a separate salary policy for public sector workers, taking intoaccount the greater security which they enjoyed as well as the government's'responsibility' as an employer, and revisions to social welfare system providinggreater discipline and more incentive to work. Regulations were to be simpifiedand programmes to support industry streamlined. The government was tophase out subsidies for declining industries, stimulate investment in thosewhich could be viable, and supply credits for innovative projects. More cost-effective research and development, improved education and training, andbetter ties between government and industry were also deemed essential.39

The Wagner agenda received greater applause from the right and centrethan from the left. The van Agt cabinet responded favourably and appointeda second commission (also under Wagner) to monitor progress. Adoptingmany of the Wagner proposals as official policy, the government curbedsubsidies for declining industries (a process which had in any case been underway since 1978) and established an independent fund to finance innovativeprojects. Nevertheless, by the time it left office in 1981, the van Agt govern-ment had barely started on the larger task of scaling down the public sector.That was left to the centre-right Lubbers cabinet which took office in 1982.

In the intervening months, a second van Agt cabinet, this time a centre-leftcoalition of Socialists, Democrats '66, and Christian Democrats, assumedoffice. Formed because the Christian Democrats and Liberals lacked amajority after the 1981 election, this cabinet was short-lived: the ChristianDemocrats and Socialists disagreed not only on the deployment of cruisemissiles, but also on the relative priority of job creation and budgetaryrestraint. The Socialists, who had made unemployment a central issue of theircampaign, insisted on the immediate creation of 350,000 part-time jobs. Thecabinet had barely been in office for a month when a split over financingemployment measures occurred. Although this was patched up, the cabinetcollapsed eight months later when the Socialists refused to accept cutbacksin the area of job creation.40

The demise of the second van Agt cabinet paved the way for a renewedChristian Democratic-Liberal coalition under Ruud Lubbers, who hadsucceeded van Agt as Christian Democratic Party leader. The cabinet's centralgoals (subsequently taken up by a second Lubbers government after the 1986elections) were reducing the annual deficit and freeing the economy in orderto facilitate recovery. On taking office, the government suspended theautomatic indexation of public sector wages and social benefits and securedan agreement from trade union federations and employers associationsrestraining private sector wages. Under this arrangement, moneys which wouldhave been used for wage indexation were to be redirected toward the reduc-tion in work hours and the creation of new jobs.41 The full brunt of thegovernment's programme became apparent when the 1984 budget wasunveiled. Public sector salaries were to be reduced by 3.5 per cent, certain

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welfare payments were to be reduced, the social welfare system was to bereformed, and sweeping cuts in health, education, and other sectors wereannounced. Although the wage cutback was later reduced to 3 per cent, thegovernment proceeded with tax cuts and reductions in social welfare benefits.Corporate tax rates were reduced from 48 to 42 per cent. Sickness benefitswere reduced from 80 per cent of previous wages to 75 per cent and then to70 per cent in 1986. In addition, the duration of unemployment benefits wasshortened, and disability allowances and payments to the long-termunemployed were scaled down to 70 per cent of the minimum wage.42

The government's programme was implemented without the full consentof the trade unions. Although trade union federations assented to the govern-ment's request for wage moderation in 1982, the 1982 central agreement wasnegotiated with the knowledge that if the social partners failed to reach agree-ment the government would freeze wages in any case. However, the unionsrejected public sector wage cuts and reductions in social benefits. Proposedwage reductions were greeted by strikes and walk-outs by public sector unions.These lasted six weeks but dissipated when courts ordered some workers toreturn to their jobs. In the interim, trade union federations proposed an alter-nate solution - higher social premiums (taxes) in place of wage cuts - forthe government's fiscal problems. However, this was rejected by thecabinet.43 Public sector wages, minimum wages and many social benefitswere reduced from 1 January 1984. Probably because of the shock of risingunemployment, these measures were accepted with a minimum of protest.44

The imposition of austerity measures altered both the terms of the post-war bargain and relationships among trade unions, business and government.The bargain, redefined in the 1970s under the den Uyl cabinet and maintainedby default under van Agt, narrowed income differentials, provided generoussocial benefits, and maintained solidarity between private-sector workers andpublic-sector employees and recipients of social benefits, whose income levelswere linked to the private sector through the coupling mechanisms establishedin the 1960s. Reduction of public sector wages and social benefits severed theselinkages, reduced the generosity of social welfare benefits, and left private-sector unions in an uncomfortable position. They were now freer to bargainfor higher wages but doing so meant widening income differentials which thetrade unions had sought to narrow and increasing tensions between public-and private-sector unions.

At the same time, the government redefined the terms in which trade unionsand business associations could bargain. In the 1970s, trade unions couldchoose either to bargain with each other or to address demands to govern-ment, which might offer compensatory measures in the form of legislationor imposed settlements, which often reduced taxes or social premiums so thatreal incomes could be maintained without excessive costs to employers. Bygiving priority to deficit reduction, the government precluded this strategy.Rather than holding out in order to obtain a more favourable deal from thegovernment, trade unions and employers' associations now had to deal witheach other on terms defined by government policies.45

Ironically, the government's posture led to limited rapprochement betweentrade union federations and employers' associations. In 1984, trade unions

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and employers' associations concluded a further agreement on combating youthemployment. Confronted with high unemployment, private sector unions wereforced to moderate their demands and seek alternate channels for trade unionaction. One of these was to seek co-operation with employers' organisations.However, this should not be interpreted as a return to earlier patterns of socialpartnership. Trade unions, faced with rising unemployment and decliningmembership and with at best a weak presence on the shop-floor, were in noposition to engage in militant actions.46 Agreements with employers were oneavenue to achieve a desired goal, the preservation of employment. Even so,the agreements concluded in 1982, 1984, and again in 1986, were limited inscope. The 1982 social accord, for example, was little more than a frameworkagreement in which trade unions and employers' associations agreed inprinciple to exchange wage indexation for reductions in work-hours and thecreation of part-time employment; details had to be negotiated in sectoral andfirm-level agreements. Although unions were often able to secure reductionsin work-hours in exchange for automatic wage indexation, they were lesssuccessful in ensuring that the work-hours relinquished were converted intonew part-time jobs.47 Other efforts to restore influence, such as attempts tobargain about the introduction of new technologies, have been equallyproblematic.

Relations between the trade unions and centre-right cabinets, in office inthe 1980s have been at best icy. Although trade unions have generally exercisedrestraint in order to facilitate recovery and avoid widening the gap betweenpublic and private sector incomes, the FNV and the opposition Socialist partyassumed a tribune-like role, defending the rights of the unemployed andrecipients of social benefits. The CNV adopted similar positions. Both the tradeunions and the Socialists recognised that cutbacks in government expenditureswere needed and that steps had to be taken to ensure the viability of firms.Nevertheless, both opposed the extent to which public sector workers and thoseon minimum incomes were forced to bear the costs of adjustment, and arguedinstead for more active government measures to promote economic growth,reductions in work-hours and the redistribution of existing work. However,the government's commitment to deficit reduction and market-led recoveryoffered few opportunities for the trade unions or the left to influence govern-ment policy.

CONCLUSION

In the preceding pages, we have traced the changing contours of social andeconomic bargaining in the Netherlands from the 1940s to the 1980s. In doingso, we have examined the ways in which the post-war settlement, worked outin the immediate aftermath of the war, was renegotiated and redefined in the1960s, 1970s and 1980s in light of changing economic and political conditions.The post-war bargain has been anything but static. In the 1940s and 1950strade unions exchanged wage restraint for full employment and the extensionof social welfare measures. In the 1960s workers and subsequently their unionsforced wages up and governments increased the scope and generosity of socialwelfare measures. In the 1970s trade unions and the left sought to reduce

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income differentials and gain greater influence in investment decisions andthe management of firms. Their efforts were partially successful, but in the1980s the terms of the bargain changed again, when a centre-right govern-ment imposed austerity measures and a programme of market-led recoveryfar more in tune with the wishes of the employers associations and the centreand the right than those of the trade unions or the left.

In the process, the institutions and structures through which the post-warbargain was worked out and implemented changed considerably. The initialbargain produced a highly institutionalised variant of democratic corporatism,but by 1970s and 1980s neither the Foundation of Labour nor the Social andEconomic Council could function as consensus-building structures.48 Instead,governments frequently imposed wage guidelines in the 1970s and effectivelyredefined the terms on which unions and employers could bargain in the 1980s.

Although the widening gap between employers and trade unions in theNetherlands is consistent with trends in other countries,49 the extent ofchange is surprising in what is sometimes taken to be a smoothly functioningsystem of democratic corporatism, reinforced not only by domestic politicalstructures but also by the vulnerability of the Dutch to the internationaleconomy. There are a number of reasons, though, why change has occurred.Contrary to Katzenstein's arguments, corporatist structures in the Netherlandsweakened their own legitimacy, and changes in the party system and theorganisation of trade unions provided wide scope for alternative policycoalitions. Maintenance of restrictive incomes policies in the full employmenteconomy of the early 1960s not only undermined the legitimacy of incomespolicies but also seriously weakened the authority of trade union federations.The resulting shifts in power from national federations to affiliated unionsin turn made central wage agreements more difficult to conclude, inhibitingthe kind of flexible response which might have relegitimised the socialpartnership.

Changes in the Dutch party system also played an important role. Throughthe 1960s, the segmented organisation of political life and the need to com-promise with the confessional parties held socialist aspirations in check.However, the weakening of the confessional bloc, the pressures of the PvdA 'sNew Left faction, and the emergence of new parties on the left encouragedthe PvdA to pursue a majoritarian strategy in the 1970s. Although this initiallyresulted in the formation of the left-of-centre den Uyl cabinet, the PvdA'stactics paved the way for a prolonged period of centre-right government andthe further redefinition of the post-war bargain. In part because the Socialistswere confined to the opposition, and in part because the newly formedChristian Democrats found it less essential to appeal to trade union elementsthan in the past, an alternate policy coalition was possible. Although thisdid not necessarily preclude the trade unions, it eliminated key desirata,particularly solidarity between public and private sector workers.

Finally, the wide gap between trade union federations and employers'associations in the 1970s meant that social partners were in no position to workout a joint approach to the economic problems of the 1980s. Throughout the1970s, trade unions and employers harboured widely different views of howto deal with economic crisis. However, even in the late 1970s and early 1980s,

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when trade unions became increasingly convinced of the need to moderatewages in order to ensure the profitability of firms, trade unions and employers'associations found it difficult to reach agreements. Only when the Lubberscabinet imposed austerity and severed linkages between public sector expen-ditures and private sector incomes could social partners achieve limitedagreement on job-sharing.

In conclusion, it is useful to consider the implications of the Dutch casefor Katzenstein's arguments and the extent to which the Netherlands still fitsthe rubric of democratic corporatism. Social partnership in the Netherlandshas not functioned well since the early 1960s, but trade union federations andemployers' associations meet at periodic intervals in the Social and EconomicCouncil and the Foundation of Labour in order to discuss the co-ordinationof conflicting goals. Unions and employers are also enmeshed in a largernumber of other bipartite and tripartite structures. Moreover, trade unionstake larger macro-economic considerations into account in formulating theirbargaining positions, and even its more decentralised form, collective bargain-ing still involves considerable elements of co-ordination.50 Nevertheless,democratic corporatism has not facilitated the kinds of flexible response tothe pressures of the international economy which Katzenstein sees as one ofits main virtues; instead, the Dutch government found it necessary to circum-vent corporatist structures in order to orchestrate a response to economicchange. The Dutch case suggests that the pressures of the internationaleconomy are not sufficient to generate corporatist solutions to economicproblems but, as Katzenstein himself argues, these are very much dependenton domestic political configurations and the extent to which social partnersare willing and able to bargain with each other. Nor is the re-establishmentof a smoothly functioning social partnership likely in the near future, exceptperhaps on terms defined by the employers' associations: Although the tradeunions and the Socialists have mooted the idea of a new social contract,restoring solidarity between the private and public sectors, as an alternativesolution for the problems of the Dutch economy, for the moment theemployers' associations prefer the present system of decentralised bargaining,which allows for greater differentiation in incomes. The result is a system withtraits of corporatism but also substantial scope for other forms of decision-making. Perhaps its most striking feature in the 1980s has been the relativelyautonomous role of the government in determining policy.

NOTES

This article is based on interviews with Dutch trade unionists and informed observers conductedin 1982 and 1984. The research was carried out under Vice President's Research Grants andSSHRC General Grants from Memorial University.

1. Peter J. Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ithaca,NY: Cornell University Press, 1985), especially pp. 22-30. See also Katzenstein, Corporatismand Change: Austria, Switzerland, and the Politics of Industry (Ithaca, NY: Cornell UniversityPress, 1985).

2. Katzenstein, Small States in World Markets, pp. 104-5ff.3. Ibid., p. 32.

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4. Ibid., p. 198.5. In 1985 exports constituted 64.1 per cent of GDP, imports 59.3 per cent, making the

Netherlands, next to Belgium and Ireland, the third most open economy in the OECD area.OECD Economic Surveys 1986/7, The Netherlands (Paris: OECD, July 1987), p. 3, 83.

6. Peter Gourevitch, Andrew Martin, George Ross, Stephen Bornstein, Andrei Markovits andChristopher Allen, Unions and Economic Crisis: Britain, West Germany, and Sweden(London: George Allen & Unwin, 1984).

7. John P. Windmuller, Labor Relations in the Netherlands (Ithaca, NY: Cornell UniversityPress, 1969), pp. 106-7. See also Dirk V. Stikker, Men of Responsibility: A Memoir (NewYork: Harper and Row, 1965), pp. 37-43, 53-61.

8. Windmuller, p. 107.9. P.E. de Hen, Actieve en re-actieve industriepolitiek in Nederland (Amsterdam: De

Arbeiderspers, 1980), pp. 259-67. Windmuller, pp. 289-91. See also Pim Fortuyn, Sociaal-economische politiek in Nederland 1945-49 (Alphen aan den Rijn: Samson, 1981),pp. 377-423. The Social and Economic Council is nominally a tripartite body with equalrepresentation from employers' associations, trade union federations, and crown members.However, the crown members are not representatives of the government, but rather indepen-dent experts appointed by the crown. Their numbers include specialists in sociology, economicsand industrial relations, as well as the Director of the Central Planning Bureau and thePresident of the Netherlands Bank.

10. de Hen, pp. 273-4, 278-83. On plan socialism, see Erik Hansen, 'Depression Decade Crisis:Social Democracy and Planisme in Belgium and the Netherlands: 1929-1939', Journal ofContemporary History, Vol. 16 (1981), 293-322.

11. W. Dercksen, Industrialisatie Politiek Rondom de Jaren Vijf tig (Assen: Van Gorcum, 1986),pp.25-7. Windmuller, pp.333-4. See also W. Dercksen, W.S.P. Fortuyn, A.Ph.CM.Jaspers, Vijfendertig jaar SER-adviesen (Kluwer: Deventer, 1982), pp. 534-5.

12. Windmuller, pp.277-9, 283-4.13. A fourth and far more militant union, the Unity Trade Union Central (EVC) was established

after the Second World War. The EVC refused to refrain from strikes and was excludedfrom the Foundation of Labour. The EVC had some 160,000 members (20 per cent of thetotal in 1946), but this subsequently declined. See Windmuller, pp. 113-16.

14. Windmuller, pp. 351-2.15. Anneke Visser, Alleen Bij Uiterste Noodzaak? De rooms-rode samenwerking en het einde

van de brede basis, 1948-1958 (Amsterdam: Bert Bakker, 1986), pp.263-74.16. Windmuller, pp.354-64. See also Robert J. Flanagan, David W. Soskice and Lloyd Ulman,

Unionism, Economic Stabilization and Incomes Policies: The European Experience(Washington, D.C.: The Brookings Institution, 1983), pp. 109-10.

17. Windmuller, pp.297-313. Flanagan et al., pp. 113-14.18. J.P. Windmuller, C. de Galan, and A. F. van Zweeden, Arbeidsverhoudingen in Nederland,

4th edition (Utrecht: Aula, 1983), pp. 222-4.19. This section is drawn from Steven Wolinetz, 'The Netherlands: Continuity and Change in

a Fragmented Party System' in Wolinetz (ed.), Parties and Party Systems in LiberalDemocracies (London: Routledge, 1988), pp. 130-58.

20. Windmuller, de Galan and van Zweeden, pp. 262-4, 291. On changes within the NVV, seeKees van Doorn, Gerrit Dubbeld, Pieter Rosielle, and Frans van Waarden, De BeheersteVakbeweging: Het NVV tussen loonpolitiek en loonstrijd, 1959-1973 (Amsterdam: vanGennep, 1976) and Flanagan, et al., pp. 140-41. However, Akkermans has raised doubtsabout the degree of radicalisation in the early 1970s and the extent to which this reflectedshop-floor pressures. On the basis of case-studies of 20 incidents, Akkermans argues thatradicalisation was partial and incomplete and more closely reflected the predilections of unionleaders than direct pressures from members. See M. J. W. M. Akkermans, Beleidsradicaliseringen Ledendruk: Een Studie over de Industriebond-N. V. V. in de period 1968-1975 (Nijmegen:Instituut voor Toegepaste Sociologie, 1985), 183-8, 193-6.

21. Windmuller, de Galan, and van Zweeden, pp. 261-2.22. Investment in buildings and machinery declined in the 1970s in all sectors except for energy.

At the same time, Dutch investment outside the Netherlands increased, W. S. P. Fortuyn,Kerncijfers 1945-1983 van de sociaal-economische ontwikkeling in Nederland: Expansieen Stagnatie (Kluwer: Deventer, 1983), p. 227. See also Wetenschappelijke Raad voor het

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Regeringsbeleid, Plaats en toekomst van de Nederlandse industrie (Rapporten aan de Regering,nr. 18, Den Haag: Staatsuitgeverij, 1980), pp. 52-5. The English language version, Industryin the Netherlands: Its Place and Future, was published in 1982.

23. Windmuller, de Galan, and van Zweeden, pp. 225-6, 230.24. W.S.P. Fortuyn, Kerncijfers 1945-1983 van de sociaal-economische ontwikkeling in

Nederland: Expansie en Stagnatie (Kluwer: Deventer, 1983), p. 268.25. Paul Nobelen, 'Nederland: Kwijnend corporatisme en stagnerende verzorgingsstaat' in T.

Akkermans and P. W. M. Nobelen (eds.), Corporatisme en Verzorgingstaat (Leiden: StenfertKroese, 1983), pp. 109-11. Windmuller, de Galan, and van Zweeden, pp.232-5.

26. Paul Nobelen and Tinie Akkermans, 'Ailing Corporatism in the Netherlands: Consensus With-out Exchange' Faculteit der Sociale Wetenschappen, Katholieke Universiteit te Nijmegen, 1982.

27. Windmuller, de Galan, and van Zweeden, pp. 235-46ff. Flanagan, et al., pp. 145-50. Seealso Nobelen, pp. 115-32 and B. Peper, 'The Netherlands: a Permissive Response' in AndrewCox (ed.), Politics, Policy, and the European Recession (New York: St. Martin's Press, 1982),pp. 101-2.

28. Bo Stråth, The Politics of De-industrialization: The Contraction of the West European Ship-building Industry (London: Croom Helm, 1987), pp. 15-82. See also Rob van Tulder,'Management of Industrial Change in a Small Country: The Netherlands', Journal of PublicPolicy, Vol.4, No.4, pp.339-42, and S.W. Langdon, 'North/South, West and East:industrial restructuring in the world economy.', International Journal, Vol. 36 (Autumn, 1981),pp. 768-75.

29. Employment in industry declined from 1,199,000 man-years in 1969 to 980,000 in 1978. Asubstantial portion of this decline was in the textile and clothing and shoe industries. Textilesshed 44,000 employees, clothing and shoes 53,000. Agricultural employment also declinedin the same period. However, employment increased in the service sector. The net loss forthe period was 90,000 jobs. Wetenschappelijke Raad voor het Regeringsbeleid, Plaats entoekomst van de Nederlandse industrie (Rapporten aan de Regering, nr. 18, The Hague:Staatsuitgeverij, 1980), pp. 55-57. Employment in the construction of new ships droppedfrom 13,000 in 1975 to less than 3000 in 1984. Strath, p. 256.

30. OECD Economic Surveys, 1985/1986, The Netherlands (Paris: OECD, March, 1986), p. 44.Unemployment figures are for the unemployed as percentage of the labour force in person-years.

31. OECD Economic Surveys 1983-84, The Netherlands, (Paris: OECD, February, 1984),pp. 29-31.

32. Windmuller, de Galan, and van Zweeden, p. 251.33. The state budget financing requirement was 5.2 per cent of net national income in 1975, 7.7

per cent in 1980, 9.2 per cent in 1981, 10 per cent in 1982, and 10.7 per cent in 1983. OECDEconomic Surveys, 1985/1986, The Netherlands, p. 35.

34. Nobelen and Akkermans note that although agreement could sometimes be reached in theSocial and Economic Council, Council recommendations on economic policy were rarelytranslated into policy. See Nobelen and Akkermans, p. 9.

35. Braun and Heere argue that the policies implemented in 1982 were a continuation of wagefreezes and austerity measures implemented under the den Uyl and van Agt governments.However, these measures differed from those which followed in that attempts were made totake account of trade union demands and reactions. See D. Braun and F. Heere, 'Krisis, Over-heidsstrategieen en Vormen van Overheidsinterventie: Het neo-korporatisme tussen Keynsian-isme and Monétarisme' in Hans Keman, Jaap Woldendorp and Dietmar Braun (eds.), HetNeo-korporatisme als Nieuwe Politieke Stategie: Krisisbeheersing met en (door) overleg(Amsterdam: CT Press, 1985), pp. 182-3. For a different interpretation of the 1982 changes,see Scholten, 'Corporatism and the neo-liberal backlash in the Netherlands' in Ilja Scholten(ed.), Political Stability and Neo-Corporatism: Corporatist Integration and Societal Cleavagesin Western Europe (London: Sage, 1987), pp. 120-52.

36. The complaint was stated in a public letter from nine leading industrialists, including G.Wagner, who was later chairman of the Advisory Commission on Industrial Policy. 'Openbrief van bezorgde ondernemingsleiders', NRC-Handelsblad, 13 January 1976.

37. Wetenschappelijke Raad voor het Regeringsbeleid, Plaats en toekomst van de Nederlandseindustrie (Rapporten aan de Regering, nr. 18, The Hague: Staatsuitgeverij, 1980), especiallypp. 266-311.

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38. Adviescommissie inzake het industriebeleid, Een Nieuw Industrieel Elan (Den Haag, Ministerievan Economische Zaken, 1981), pp. 5-7. English translation published as AdvisoryCommission on Industrial Policy, A New Spirit for Industry. Van Tulder notes that halfthe membership of the Wagner Commission was drawn from Dutch multinationals and thatthe report more clearly represented their interests than those of smaller firms. See van Tulder,pp. 345-6.

39. Adviescommissie inzake het industriebeleid, pp.5-7, 15-22ff., 17-46.40. Keesings Historisch Archief, 21 May 1982, pp. 321-7.41. Keesings Historisch Archief, 3 December 1982, pp. 788-92.42. Keesings Historisch Archief, 30 September 1983, pp. 614-20. Nico Klene, 'The Social Security

System in the Netherlands', ABN Economic Review, No. 110 (August, 1985), pp. 19-26.See also OECD Economic Surveys, 1985/1986, The Netherlands, 1986, pp. 78-80.

43. Keesings Historisch Archie/, 25 November 1983, pp. 757-62.44. Jelle Visser notes that Social and Cultural Planning Bureau surveys detected rising pessimism

in the early 1980s. There was a pronounced increased in the proportion of the populationagreeing that government expenditures should be cut: 40.5 per cent took this view in 1979,51.2 per cent in 1980, 58.4 per cent in 1981, and 63 per cent in 1983. Such views may wellaccount for the widespread acceptance of austerity measures. See Sociaal en CultureelPlanbureau, Sociaalen Cultureel Rapport 1984 (The Hague: Staatsuitgeverij, 1984), p. 286,and Jelle Visser, 'Continuity and Change in Dutch Industrial Relations - the 1980s' in G.Baglione and C. Crouch (eds.), European Industrial Relations in Transition: The Experienceof the 1980s (London: Sage, 1988).

45. Both Windmuller, de Galan and van Zweeden and Flanagan et al. suggest that the likelihoodof government intervention became a regular part of social partners ' calculations in the 1970s.See Windmuller, de Galan and van Zweeden, p. 252 and Flanagan et al. pp. 137, 156-7.

46. On trends in trade union membership see Jelle Visser, In Search of Inclusive Unionism (Ph.D.dissertation, University of Amsterdam, 1987), and Visser, 'Continuity and Change in DutchIndustrial Relations'. Density rates declined from 34-35 per cent in the late 1970s to 24 percent in the mid-1980s.

47. Visser, 'Continuity and Change in Dutch Industrial Relations'.48. Windmuller, de Galan and van Zweeden argue that the role of the Social and Economic

Council changed from one of discussion to negotiation (see pp. 391-5). However, doubtshave been raised about the extent to which either the Foundation of Labour or the Socialand Economic Council contributed to the earlier consensus or simply reflected it. See Dercksen,Fortuyn and Japsers, pp. 539-40.

49. See Gourevitch et al. for descriptions of the ways in which post-war settlements were redefinedin Britain, West Germany, and Sweden.

50. F. Leijnse, 'De Sociale Partners Als Handzaam Alibi', Namens, Vol.2, No. 1 (January, 1987),pp. 2-3.

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socio-economic bargaining in the netherlands: redefining the post-war policy coalition

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