The Limits of Supply-Side Social Democracy: Australian Labor, 1983-96

Using an institutionalist, supply-side framework, the article describes and assesses the industrial relations reform agenda of the Australian labor movement between 1983 and 1996. Five institutional conditions for diversified quality production are identified, each of which was tackled to some extent in Australia. The article finds the strategy did not yield the benefits promised. Economic performance was average, union density fell steeply, and institutional supports for union membership and bargaining are threatened. Union misjudgments and an unfavorable historical and institutional legacy, in particular the weakness of workplace bargaining structures, explain much of the Australian situation. Furthermore, the union supply-side reform agenda needs to be placed in its proper context. Without complementary policies affecting aggregate demand, innovation and industry policies, and finance reform, supply-side intervention can have only a limited impact. Unions in a neoliberal political economy are not strong enough to force through industrial restructuring alone.