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  • Print publication year: 2012
  • Online publication date: June 2012

3 - Party Conflict and the Origins of Danish Labor Market Coordination

Summary

It is almost more important to have a good employers’ association than a good government.

Niels Andersen

Introduction

The exceptionally high levels of equality in Scandinavian today are underscored by equally impressive levels of social and economic coordination. For example, for much of the post-war era, the peak associations for the social partners – the Confederation of Danish Employers (DA) and the Danish Confederation of Trade Unions (LO) – negotiated broad collective bargains and engaged in corporatist tripartite discussions with government to develop a wide spectrum of public policies. Although collective bargaining was decentralized to sectoral level cartels in the 1980s, wage setting remains relatively coordinated even at the decentralized level and policy making continues through tripartite channels.

This institutional exuberance for consensus is attributed to various causes: Perhaps cultural exceptionalism explains the high levels of coordination, as citizens of the frozen north simply have a more collective esprit des corps. Modern cooperation may reflect historical patterns of industrial conflict, because well-organized and aggressive Scandinavian labor movements wrested power away from an upper class divided between agricultural and industrial elites. As a late industrializer, Denmark may have been motivated to develop high levels of coordination and cooperation in order to catch up to other advanced nations. Tales of cultural harmony and class warfare, however, are a bit difficult to reconcile, and one wonders how employers cast their lot with cooperation over conflict.