Government social policies are often a mixed bag for employers: Although they may enhance workers’ productivity through skills training or health provision, they also add to the costs of labor. One can dwell on what the right hand giveth or what the left hand taketh away, and therein lies the difference between a business community accommodating growth in government services and one resisting expansion of the public sphere.
This chapter grapples with the deceptively simple question of what matters to the formation of employers’ preferences for state social policies. In particular, we study the relative balance between economic imperative and institutional constraint in guiding human action. We ponder whether business managers – seeking to identify their social preferences – strive to fulfill objective interests grounded in the material characteristics of their firms; or whether institutions, ideas and peer pressure have an impact on how managers interpret (or socially construct) their interests? Thus, the first part of the book explores the origins and evolution of the associational forms of business, and the second part investigates how these institutions of coordination influence employers’ engagement with the welfare state.