Chapter3

Corporati sm in Industrial
Relations: a Formal Model

Colin Crouch

Introduction
When classifying industrial relations systems in terms of cor-
poratist theory, it is useful to think of a continuum, starting at
one extreme with contestative relations, moving through plural-
ist bargaining and bargained corporatism, and ending at
authoritarian corporatism. Elsewhere (Crouch, 1983b) I have
defined the poles of this continuum in terms of the role of
representatives being, respectively, purely representative and
purely disciplinary. But this tells us very little of the inner
dynamics of different ideal typical systems. How do these
different kinds ofindustrial relations 'work'? In particular, how,
in detail, do pluralist and corporatist forms ofbargaining differ?
This can be done most clearly if the argument is set out formally.
There is nothing that can be called mathematics in this, but
readers who have a horror of formal analysis can skip the
symbols, as everything is contained within the verbal account.
Our starting point is a relationship between two actors in a
capitalist economy: organised labour (L) and (organised)
capital (C). The relationship between Land Cis a sub-set of a
wider relationship between labour and capital. Only some
aspects of that wider relationship become issues between the
organisational representatives. For them to do so means that
they have become politicised and must be resolved through
some political exchange, deal or bargain. The remainder of the
wider relationship is arranged by labour receiving orders from
capital in exchange for payment of a wage (the wage-effort
relationship), although usually orders are modified by personal
give and take. The parentheses around 'organised' in the case of
W. Grant (ed.), The Political Economy of Corporatism
Macmillan Publishers Limited 1985
64 Corporatism in Industrial Relations: a Formal Model

capital indicates that capital may appear as an individual firm

in an exchange, not necessarily as a group or association of firms,
while labour is always collectively organised, at least informally,
if it is taking part in an exchange going beyond the simple
wage-effort bargain that binds individual employees to their
jobs. This reflects part of the fundamental imbalance between
capital and labour, in that capital automatically possesses
power by virtue of its role in the employment relationship, while
labour does so only if it organises. (For a fuller account of this
inequality, see Offe and Wiesenthal, 1980; and Crouch, 1982b,
ch. 2.)
The question of the level at which C and L operate (e.g. shop
floor, company, economic branch, nation state) will be left
indeterminate until a later section (p. 79). This has considera-
ble advantages, as it enables us to build up the relationship from
its simplest components. A disadvantage is that it means
postponing the entry of the state until a late stage. Given that
corporatism is often presented as a theory of the state, this may
seem puzzling. However, the state is active in this area only
because problems exist in relations between the labour-market
actors. Historically, the state has sometimes intervened after
these problems have revealed themselves; sometimes it has acted
anticipatorily. But analytically it makes sense to analyse the
relationship that throws up the problems before examining the
intervention that becomes involved in the search for a solution.

Forms of industrial relations systems

Contestation
The wider capital/labour relationship contains elements of both
conflict and those matters in which the two sides prosper
together. But the starting point for the relationship between L
and Cis normally conflict: issues enter the relationship because
one side (usually labour) is dissatisfied. The simplest form of
relation between L and C is therefore a zero-sum game, 1 i.e. a
change to the benefit of one party can be achieved only through
a concomitant change to the disadvantage of the other:

~c + ~~ = 0 (1)