| Reviews / Comptes Rendus | Labour/Le Travail, 54

Reviews / Comptes Rendus

Paul G. Buchanan and Kate Nicholls, Labour Politics in Small Open Democracies: Australia, Chile, Ireland, New Zealand and Uruguay (New York: Palgrave Macmillan 2003)

MARKET-ORIENTED reforms have swept much of the world over the past two decades. Designed to improve economic competitiveness, a core aspect of the reforms is to increase labour market flexibility in order to reduce unit labour costs. These changes are particularly dramatic for workers in small, vulnerable states. In most of these countries, union density has declined, wage disparities have increased, and collective bargaining coverage rates have dropped. Yet this does not imply convergence toward one model of labour relations where unions are marginalized. In some cases, unions and workers have fared far better than others. What accounts for the variation?

Paul Buchanan and Kate Nicholls argue that the explanation lies in how a country is integrated into global markets, labour's ideological unity and organizational strategies, and national institutional frameworks. Countries with strong mining sectors tended to develop stronger union movements earlier than countries that lacked a mining sector. Ideologically unified labour unions that are independent of state and party control have a better chance of more successfully softening the impact of neoliberal market reforms. And the organization of collective bargaining, rules governing strikes, tripartite structures, and the institutions of conciliation and arbitration all influence labour's efforts to respond to market reform. That is, labour politics do not converge because they are not solely determined by external market pressure, but also by domestic economic structures, union strategies, and national institutions.

To make their argument, Buchanan and Nicholls explore two paired comparisons and one atypical case. A unique aspect of the book is their decision to pair Australia with Chile and New Zealand with Uruguay as sets of most similar cases. Here, the similarity is based on market location and not on political, historical, or cultural factors. Australia and Chile inserted themselves into world markets as small economies with developed manufacturing sectors and strong mining industries. New Zealand and Uruguay inserted themselves as smaller "boutique" economies, that is, economies with agricultural or primary product export niches. Ireland, the outlier case, is also a small, dependent economy, but — to its advantage — it formed a part of the European Union and benefited from market relations and institutional influences.

In Australia the relatively strong and united union movement, and a history of tripartite institutions and compulsory arbitration meant that market reforms were not as abrupt or extreme as elsewhere. While the union movement's dependence on the Labour Party lessened its ability to effectively respond to the reforms, organized labour was able to retain much of its role in the labour-relations regime. In Chile, a divided labour movement that was subordinated to several political parties was further weakened by institutional factors such as decentralized collective bargaining and limits on the right to strike, as well as the brutality of the Pinochet dictatorship (1973–1990). As a result, labour was largely unable to respond to the market-oriented reforms and adopted a survivalist strategy.

New Zealand's more rural economy and lack of a strong mining sector engendered a weaker labour movement than in Australia and Chile. The labour movement was also decentralized, politically moderate, and subordinated to the Labour Party. As a result, the union movement was only able to very modestly alter the market-oriented reforms and, similar to the Chilean case, remained very marginal in the labour-relations regime. Labour in Uruguay faced many of the same economic limitations as labour in New Zealand, but the union movement was ideologically united, controlled by members (i.e., not encumbered by a bureaucratic union leadership), and independent of both state and Labour Party control. As a result — and despite years of military dictatorship — the union movement maintained its active participation in the labour-relations regime while defending real wages and, to a degree, protecting members from job loss. Ireland, which began with many of the same economic challenges faced by the other countries and several institutional obstacles, was positively influenced by its incorporation into the European Union, which compelled it to improve its labour relations regime through "Europeanization."

Buchanan and Nicholls provide new insights as to why economic globalization has not led to a convergence of labour politics. Yet, methodologically it is not entirely clear that the combinations of Australia and Chile, and New Zealand and Uruguay, are the most appropriate paired comparisons. The most similar approach combines cases on as many variables as possible in order to single out the key variable that accounts for a different outcome. But in their comparisons, almost everything varies among these cases except how they were inserted into the global market. Whether one accepts the paired comparisons or not, the real contribution of the book lies in the broader comparison of these five cases of small open democracies in which labour had varying degrees of success in responding to market liberalization. Their insightful exploration of the cases illuminates the importance of institutions, actor strategies, and ideology.

At the same time, the ideational variable could have been better developed. The authors note that structural adjustment programmes included a market-oriented ideological project that sought to secure working-class consent to bourgeois rule. At the same time, they argue that labour's ability to defend its members was tied to ideological unity "regardless of the substantive basis of union ideologies." This is a bit puzzling. It seems that the ideological orientation of unions would matter. The pragmatism of the Uruguayan unionists kept them unified, but their mostly Left orientation helped them resist the manufacturing of consent, whereas the moderation of the trade unions in New Zealand contributed to their more limited success. Outside their case studies, there are a number of labour centrals that embrace market-oriented reforms (Força Sindical in Brazil is one example). In these cases, the strength of the unions is not used to contest the dominant ideological project but rather to reinforce it. While it is true that dogmatic Marxist unions cannot resist neoliberal reforms because their dogmatism engenders divisions and thus weakness, it is not true that all unified unions are effective sources of resistance, especially if success is measured not only in terms of defence of wages and union membership, but also in terms of resistance to neoliberal ideological hegemony.

Despite these concerns, the book's strengths far outweigh its weaknesses. Its historical focus allows us to discern how institutional configurations that were helpful to labour at one point in time can become extremely detrimental in another. In Latin America, corporatist institutions may have produced positive outcomes for labour when populists were in government, but in the hands of the military, they had a devastating impact. In the era of democratization and market reforms, the different legacies of corporatism continue to engender a variety of outcomes. The case of Ireland illustrates that external political influences can sometimes improve labour-relations practices. Most importantly, in contrast to the varieties of capitalism approach which limits its focus to national institutional configurations, Buchanan and Nicholls rightly incorporate labour movement history, ideology, and strategy into the centre of the analysis.


Mark Anner Cornell University

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