We are organised for nothing except party politics.
At first glance, Britain appears to be the quintessential pluralist country, gripped by antagonistic industrial conflict and committed to laissez-faire liberalism since early days of the industrial revolution. Until 1965, three encompassing associations purported to represent employers – the Federation of British Industries, the British Employers Confederation and the National Association of British Manufacturers; these finally merged into the Confederation of British Industry. Yet, Britain has periodically sought high levels of labor market coordination at various points in the twentieth century, and Margaret Thatcher’s extreme liberalism seems at odds from the more collectivist sentiment in British public philosophy.
This chapter explores how Britain came to create fragmented, pluralist employers’ associations, punctuated by periods of corporatist experimentation. We argue that the failure of institutions for coordination reflect the limited incentives for cross-party cooperation in a two-party competition. Strong economic divisions (between free traders and protectionists, and financial and manufacturing interests) and the absence of a guild tradition (with craft-based unions seeking to control skills) also contributed to employers’ inability to sustain lasting coordination. We consider the impact of bipolar partisan competition at two critical junctures in the evolution of employer representation. First, party structure helps to explain the failure of a national, multisector group to develop at the end of the nineteenth century, when employers elsewhere formed peak associations. Employers were distributed between the Conservative and Liberal parties and neither party would reap obvious rewards by rallying a strongly organized business association.