National Politics of Productivity and Technical Change

To complete the examination of the global and national levels set out in Chapter 1, this chapter concentrates on the national politics of productivity and technical change (box 4 of Table 1.1). The agenda comprises institutional configurations and the content of national bargaining over pay, effort and the choice of production technique. The discussion in the previous chapter set out the context within which this national bargaining took place. In America, great power rivalries led government to create conditions under which production of defence materiel could be expanded rapidly both at home and in other countries under US protection. But the productivity leadership of American “civilian” industries allowed government to concentrate on liberalising world trade and payments. Suppliers of raw materials were encouraged to emerge from discriminatory blocs to make their commodities available to American industry. Richer nations were encouraged to open their markets to American manufacturers. Britain, on the other hand, did not enjoy the luxuries of the industrial leader. As will be seen below, industrialists, trade unionists, and many policymakers would have preferred Britain to follow the American government's laissez-faire attitude to negotiations over pay and conditions. However, the recurrent external crises gave British governments no real alternative. Their authority was eroded by the regular jitters of foreign exchange markets.1 British governments had to steer the industrial relations system towards agreements that would not upset foreign confidence in sterling. Thus, this chapter compares a fundamentally decentralised politics of productivity in the USA with a British system of multi-level bargaining in which “concertation in crisis” became a regular feature. We begin with the centrifugal trajectory of US bargaining.