The Effects of Post-industrialism on the Political Economy of Western Europe The Decline of Corporatist Bargaining The sustained, high economic growth in Western Europe during the post-war period until 1973 led to dramatic changes in the region's political economy. As advances intransportation and communication extended the reach of international trade into new areasof the world, as technological advances allowed establishment of manufacturing facilitiesoverseas, and as European real wages climbed to unprecedented heights, the industrialbase that had served as the foundation for rapid Western European growth in the 1950'sand 1960's increasingly moved to Western Europe's poorer neighbors. As the industrialbase moved, so did the jobs of a large quantity of unskilled manufacturing workers whopopulated the assembly lines. In recent years, the liberalization of international trade hasclearly demonstrated that European industry can no longer compete in traditional,large-scale industrial sectors. European successes have increasingly come fromspecialized, high value-added industry and from intelligent, flexible companies able to shiftproduction quickly to capitalize on movements in world demand. The net result of these changes has been a transition to a post-industrial society, where thestable economic order of mass employment in large-scale industry has given way to massunemployment and a breakdown of the political and social consensus that held swaythroughout the post-war period. These changes have fundamentally altered the WesternEuropean labor market. This paper will show how post-industrialism has dramaticallyreduced the ability of many Western European countries to deliver full employment, notsimply because of changes in employment structure, but more importantly because thosestructural changes have undermined the institutional framework that allowed WesternEuropean countries to control prices while pursuing full employment policies, an...
