Coordination as a political problem in coordinated market economies

The purpose of this article is to explore the political dynamics of employer coordination in three well-known "coordinated market economies." We examine differences in how employer coordination has been organized in Sweden, Germany, and Japan in the area of industrial relations, and we examine the extent to which such coordination represents a self-sustaining equilibrium, as some of the most influential treatments suggest. To preview the findings, we argue that precisely the intensification of cooperation between labor and management in some firms and industries (that the "varieties of capitalism" literature correctly emphasizes) has paradoxically had deeply destabilizing collateral effects that have undermined or are undermining these systems as they were traditionally constituted. All three cases are characterized not so much by a full-blown breakdown of coordination so much as a very significant reconfiguration of the terms and scope of such coordination. Specifically, all three countries feature the emergence of new or intensified forms of dualism - different in each case based on different starting points - in which continued coordination within a smaller core has in some ways been underwritten through the breaking off of other, more peripheral, firms and workers.