Harold Wilensky Interview: Conversations with History; Institute of International Studies, UC Berkeley

Comparing Rich Democracies: Conversation with Harold L. Wilensky, Professor Emeritus of Political Science; October 29, 2002, by Harry Kreisler
Photo by Jane Scherr

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Comparing Rich Democracies: Examples

So as we are trying to understand your research, what I hear you saying -- and I'm going to simplify -- is that all of these countries, in a way, are converging. Hence, we want to look at how they're moving in one direction at different speeds and different rates, and so on. That in the course of this, there are certain phenomena in the broad society that further the disintegrative elements within the societies you're looking at. But, finally, there's another set of things you want to look at, and that is the structure of the political economy. You were just talking a little about it -- namely, that some subset of your rich countries are very decentralized. Tell us a little about them, and a little about the other forms of political structure that appear in the spectrum.

There are only five or six countries that fit the category "fragmented and decentralized," of my nineteen. The others have a different set of characteristics. The characteristics of the United States -- and we got it from Britain, and so did Canada, and so did Australia and New Zealand, and I've said that Switzerland sometimes belongs there, and other times does not -- but those countries have a structure of government that is fragmented and decentralized. I need not say more. Everybody knows that we have a decentralized federalism, and so do the Swiss. That's what holds us together.

In these countries, the labor movement is also fragmented and decentralized. In contrast, the Germans, who are corporatist bargaining types, have only sixteen unions. IG Metal, which is the German metal workers' union, functions to coordinate the unions -- it has three and a half million members. It's the biggest, most inclusive union in the world.

And Germany would be an example of what you call corporatist?

Yes. It's not the best case of it. Sweden, Norway, Finland, Belgium, Netherlands, Germany. (Italy would belong a little.) Then you get France and Japan in a separate category of their own. And Switzerland, sometimes, like them. But without getting into the details of this, basically, the fragmented and decentralized political economies are more vulnerable to the mass society tendencies we talked about. The other category is "corporatist democracy." I hate that term, but I have to use it; it is embedded in the comparative politics literature. The other term would be "consensual democracy." Other words would be "negotiated political economies."

Now you've got the idea that there's something going on there that's different from what we know here in the United States. It is centralized government interacting with other sectors, more or less centralized. Sweden is moderately centralized. Netherlands is highly centralized -- the mayors are appointed in the Hague. So there are various measures of this centralization. The labor movement is also somewhat centralized, as are the employer federations. So labor federations and employer federations are in this picture of bargaining -- that's tri-partite bargaining. And you throw in the professions and farmers (who are always well organized), and then talk about other voluntary associations, which are similarly large and inclusive.

So what you have is a system of bargaining among many interest groups, the economic blocs being prominent. They are able to do two things. One, there is a kind of blurring that goes on between private and public, and the scope of bargaining is very wide. For example, it's not just wages, hours, and working conditions, as it is in the United States and the least corporatist political economies. It includes everything, all the issues of modern political economy: inflation, the balance of payments, economic growth, productivity, capital investment. Anything can come to view and it does. Social policy comes to view. The great advantage is the trade-offs that can occur in such a structure. Labor will say, "We're interested in wages, hours, working conditions, and social policy." It costs money. Management will say, "Fine, we're interested in having our taxes cut. We're interested in productivity and profit and labor peace. Let's get together to make sure we get our share of this business." And the government, interested in conflict management, in taxes and collecting taxes, and in meeting mass demands, will say, "Okay, if we're going to fund social policy and cut corporate taxes, and we're going to cut capital gains, we have to raise money in another way. Like, we'll invent the value-added tax, or we'll go to the payroll tax." And labor says, "Okay, so long as you have a family policy that will help the people hurt by this." And so you get all kinds of trade-offs going on throughout the history of this postwar period, where these structures were put into place by 1950.

So, in a way, what you get is organized voices that can sit down at a metaphorical table and negotiate.

And talk to one another.

And talk to one another.

And negotiate major problems of modern political economy, yes. And that's a better system for the purpose of solving these problems and conflict resolution. Now, people could argue, "There are many disadvantages of this" and I take care of all those arguments in my book.

In addition to the word "bible," I would use "encyclopedia" for our audience...

It won't sell a copy if you call it an encyclopedia!

It's a readable encyclopedia. There was a day when there was something like Compton's Encyclopedia that you could turn to. Obviously, your book is at a more sophisticated level.

Let's take two problems. Let's talk about taxes and tax rebellion. Very briefly, tell me the differences in the way your corporatist states have handled this, versus the decentralized ones.

Corporatist democracy has dampened tax-welfare backlash. There are many reasons for this. But if you ask, where are these tax-welfare backlash movements? Do they have anything to do with the level of spending and taxing? One of the odd findings that would surprise most people is that the level of taxing and spending in a democracy doesn't have anything at all to do with tax-welfare backlash to protest against them. Tax-welfare backlash movements are movements and parties that sound this theme: "Anti-tax, anti-social spending, anti-bureaucratic." Think of Reagan, Thatcher. Denmark had a guy named Glistrup who was articulating exactly the same things about the same time as Reagan. And in Switzerland you had similar politicians, and you still have. Those are four countries. Notice, Switzerland is a lean spender, the leanest. The United States is pretty lean. Denmark is a big spender. The U.K. with Thatcher and her predecessors, actually, and Major after her, is a medium spender. So why do you have successful tax-welfare backlash movements that will last in these four? These have come to power and they last. Otherwise, I wouldn't be talking about them. So these are very important.

And why?

The tax structure can count. In the words of an old pop tune, "It ain't what you do, it's the way that you do it." It doesn't matter what the level of taxing and spending is. But the structure of taxing and spending does matter.

What is characteristic of these countries is they have a heavy reliance on property taxes on households. The British have it; they call it "the rates." Incidentally, the change in the property tax, as a trigger event, brought down Maggie Thatcher. And of course, it helped Reagan greatly to attack California property taxes in his sweeping victory in the race for California governor. Income taxes and property taxes on households -- those are the two taxes that are most painfully visible and most unpopular.

Those are the things that get people mad.

They get them very mad, indeed. And they are visible. You pay in one big lump, and you're totally aware of them. Now take value-added taxes, that is, consumption taxes. You pay every day, in every way, a little at a time, and you don't much care, because once it's put in, you get used to it. Payroll taxes, they're moderately visible, but people really don't think that they're just putting it in. They think it's a slot machine. You put it in and you're going to get it out. It's a sin to tell them that they're not going to get their social security. They will. There's no way you can take that away.

Let's take another problem, very briefly. A problem like violence in these societies. You even developed a mayhem index to get a hold of this problem, to figure out how to measure levels of violence, and then you analyzed the way these different democracies respond. In a nutshell, what is the difference in those societies that handle this problem better than we do?

The consensual democracies with corporatist bargaining arrangements are more peaceful. They don't have the high strike rates that we do. These are the ones that dampen the natural tendency of an industrialized country to increase its mayhem. If you take 1950 to the early seventies, murder rates went up in almost all these countries. It leveled off in our country in the eighties, and it went down, just very slightly, in the nineties. Our murder rates are very high; no matter how you measure, we are light years ahead of everybody else. They are three times the next largest murder rate, which is Finland, and were ten times the average. So we are in a class of our own on murder rates.

If you bring broader risks to view, I developed an index that says, "Okay, what can happen to the individual from threats from the social and physical environment?" Murder is one thing, and death by fire is another. Children die in fires, lots. Unemployment is another. Divorce is still another. These are things that happen to you that are unpredictable, and that are often sudden, and that are very momentous. You lose your life. You lose your family. You lose a lot. And public policy could do something about them. Government can't do anything about divorce rates, but it can do something about cushioning the shock of divorce and family breakup by a family policy -- childcare, parental leave, and all that.

Now these corporatist states, in essence, do come up with a broad range of programs to deal with the social environment.

For example, family breakup. They deal with that by family policy. That is a heavy dampener of violence. It's very simple. Corporatist bargaining arrangements produce a family policy. The reverse goes for means testing in decentralized democracies: it makes the poor very visible, and sets up a political process by which the poor are to be punished and where demagogues can work the welfare backlash and say, "Welfare mothers are riding around in Cadillacs" -- Reagan did this -- "and they're on a lifetime vacation plan," he said. That doesn't happen in the corporatist democracies. That's because they have a family policy. They minimize means testing and they reduce poverty. In turn, a family policy and avoidance of means testing will have some effect on equality and poverty, and that will dampen mayhem. So that's the scheme.

However, I started by saying that there will be mayhem in all these countries, and it will vary only if you have counter forces to the power of industrialization that makes for mayhem.

Next page: Conclusion

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