3. Changes in Austrian Corporatism and Industrial Relations
Changes in Austrian social partnership is evident in the fact that the economic and socio-
political environment, which promoted the development of social partnership in the 1950s
and 1960s, is no longer intact. Increased competition, lower rates of economic growth,
budget problems, and rising unemployment are expressions of these changes. Rather than co-
ordination and consent, the new political priorities are budget consolidation, competition for
investment, and flexibility (Kittel & Tálos 1999, p. 102). The institution of social partnership
par excellence, traditional price-wage-agreements by the famous Joint Commission, had
already lost its importance in the 1970s (Kittel & Tálos 1999, p. 110). The national regulation
of prices is no longer feasible when wage policy becomes a factor in the competition on
international markets. Since then price stability has been substituted by increased market
competition and the metal sector functions as an indicator for other sectors (Rosner 1999, p.
micro-founded supply-side economics – has been undermining the basis of social partnership.
In line with neo-liberal economic beliefs, several former state-owned industries were
privatized. Alterations in the economic structure have resulted in changes to the (potential)
membership of economic associations. Small-scale entrepreneurship is no longer a lifelong
perspective; this fosters short-term and particularistic orientations and hinders the balancing
of interests (Traxler & Zeiner 1997). Moreover, former state-owned industries set the context
for the development of the social partnership system. The close linkages between the state,
the interest organizations and the parties, facilitated the Austrian way of “class struggle at the
round table”. Now that industry is widely privatised, this favourable condition does not arise
any more.
Second, due to the structural change from an industrial to a post-industrial society, the old
cleavages and thus the party system have begun to ‘unfreeze’. As long as Austrian society
remained “pillarized”, the political and the interest group systems complemented each other.
The simple dichotomy between capital and labour, however, became obsolete with increasing
economic and societal heterogeneity. As society has become more complex it is more
difficult to intermediate interests within these camps and especially between them. Instead,
new “post-industrial” issues such as environmentalism, participatory democracy, minority
rights, etc. came to the fore and, consequently, voters were not sticking to the two main
5
Instead the sub-commission on prices is dealing nowadays with issues of employment and competition and the
building of shared political-economic views (Kittel & Tálos 1999, p. 109).
9
Convention