International Human Resource Management-MJ Version

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again, the link with Albert’s identification of two contrasting models of capitalism
should be obvious.


4 THE EUROPEAN SOCIAL MODEL(S)

From the perspective of this simple dichotomy, it makes sense to regard con-
tinental western Europe as a cross-national region with many common fea-
tures in the organisation of the economy in general and the labour market in
particular. The idea of ‘Social Europe’ has been a key element in the official
discourse of the European Union for more than a decade. For critics, particu-
larly in the Anglo-American world, this idea was merely an expression of out-
dated socialist values. Yet it is noteworthy that the concept can be linked to
the German notion of a ‘social market economy’ which was invented in the
1950s by conservativepoliticians and theorists. It expressed the principle that
economic affairs should be primarily dependent on the market, but that
market relations should in turn respect underlying social and moral values.
This perspective has been highly influential in much of Europe for half a
century, particularly in countries where support for capitalism has been qual-
ified by a Christian- democratic ideology critical of unconstrained economic
individualism.
It is interesting that, in most of western Europe, the English term ‘industrial
relations’ is commonly understood through the notion of ‘social affairs’ or some
analogue. Similarly, government responsibility for industrial relations is typically
vested in a ministry of labour and social affairs. Employment is perceived as a
social relation, not a simply contractual issue. Partly as a corollary, industrial rela-
tions is an arena for collective actors: trade unions and employers’ organisations
are described in much of Europe as ‘social partners’, a term which at one and the
same time expresses an aspiration that conflicts of interest should be resolved
cooperatively but also an assumption that collective representation is a necessary
and important basis for agreement between employers and workers.
Viewed from the outside, there are important common features to indus-
trial relations in most of western Europe (Ebbinghaus 1999). Five of these are
of key importance in underpinning status alongside contract, encouraging
voice versus exit, and embedding market relations in systems of institution-
alised rules. They can be summarised as follows:



  • there is broad social and political acceptance of the need for collective regulation
    of the employment relationship in order to protect the weaker party;

  • accordingly, individual contracts are subordinate to collective ones, limiting the
    freedom of individual labour market actors;


National industrial relations and transnational challenges 421
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