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Economics of Europe

prices while pursuing fullemployment policies, and have left Western Europeans widely dissatisfied with their political system. Western European countries demonstrated varying abilities to control inflation and unemployment in the 1970's and 1980's.Cameron argues that two variables explain much of the differences in economic performance: 1) the presence or absence ofcorporatist institutions and practices,1 and 2) the role of leftist, Social Democratic political parties in government (Cameron: 144).Centralization of labor representation facilitates corporatist bargaining. Conversely, fragemented labor representation makesagreement difficult. The greater the number of parties, the less likely that they will find a solution palatable to all negotiators.According to measurements of labor organizational unity by the European Yearbook, countries with the most unified labor duringthe 1970's and 1980's, Austria, Sweden, Norway, Germany, Denmark and Finland, were all among the best in Europe atcontrolling unemployment and inflation, while the countries with the most disunited labor, Italy, France and Spain, were lesssuccessful.The shift to a post-industrial economy has increased the dissolution, fragmentation and differentiation of the Western European labor market. Most countries have suffered high and remarkably stable unemployment. Unemployment rises during economicdownturns, but no longer seems to recover in a boom economy. Many blame post-industrialism for this phenomenon, complaining that technological improvements have led to a 'workerless' economy. While post-industrialism is a cause of higher unemployment,the explanation is not that it has eliminated jobs, but that jobs have changed. New industrial jobs have increasingly required specialized technical skill, while the service sector has created jobs for skilled, semi-skilled and unskilled workers.One crucial difference between the old jobs and the new are that traditional unions play...

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