Diplomacy: Houdini meets Ulysses

Industrial and financial strategies change when states and firms discover that they are wound up in a world in which centrifugal tendencies are gaining ground on centripetal forces. Centrifugal forces are the result of the displacement of dichotomous power constellations (state versus market, labor versus capital, market versus hierarchy) by polycentric dependences. Polycentrism enlarges the margins for shifting alliances and coalitions. However, changing coalitions and alliances tends to increase the uncertainty they are supposed to check, that is, the strategic uncertainty produced by tactical rationality under conditions of mutual dependence. In this chapter I again take the EU as an internally sufficiently diverse arena for sketching the way games of industrial politics deal with the new contingencies. In the case of interdependence, firms, interest groups and state agencies face two questions: how to sustain representativeness (a question referring to the credibility of organizations as a function of their internal cohesion and governance) and how to handle reciprocity (referring to the credibility of organizations as a function of the external demarcation and connectedness or “density” of the domains in which they meet).