Social Democratic Parties and Trade Unions in Deflationist Times

This paper aims at challenging conventional theory according to which the abandonment of Keynesianism by social democratic governments entailed a ‘divorce’ between once very close parties and trade unions. During the 1980s and 1990s, Social Democratic parties endorsed the new economic consensus grounded on restrictive monetary policies. Nonetheless, a collaborative relationship between social democratic governments and trade unions is apparent in a significant number of European countries. Meanwhile, in other countries a ‘new’ kind of adversarial relationship apparently supports the ‘divorce’ theory, as in late 1990s Britain. Contrary to any expectation, however, this adversarial relationship paired with redistributive outcomes favourable to wage earners. Arguably, more must be at stake than a general political economy stance, to be able to explain different types of party/unions relationships throughout Europe. The paper concludes by drawing an alternative explanation of the causal factors of the party/unions relationship to be tested through further research. Reversing the causal direction of the conventional explanation, it argues that the nature of the relationship depends on the features of trade unions movement. Parties and unions will benefit from a collaborative relationship, only if the latter embed the substance of an encompassing union in their programs and attitudes.