Fifteen Eighty Four

“Empowering Labor” delves into the utilization of wage policy as a pre-distributive instrument by leftist governments in South America and Southern Europe. This comparative study focuses on three small open economies: Chile, Portugal, and Uruguay. The book sheds light on the underlying political dynamics of strategies pursued by leftist parties in power and the evolving linkages between those parties and labor in developing democracies. A key insight is that the unity of the Left and labor’s political legitimacy are the main drivers for advancing distributive strategies that promote the inclusion of organized labor in wage setting at the national or industry level. Unity of the Left and the political legitimacy of labor, in turn, are shaped by elite long-term strategies towards labor. These historical causes related to the empowered inclusion and legitimation of labor, as well as the unity of the Left, are slow-moving processes that are temporally distinct from their outcomes.

Through a comparative historical analysis of elites’ political practices toward subordinate groups, the argument emphasizes that long-term factors shaping labor’s political legitimacy are important for understanding present-day strategic decisions of Left parties toward labor. Strategies established early on not only created path dependency but also shaped differential opportunities for further options down the road. It’s crucial to account for this large-scale process because political legitimacy, intricately linked with long-lasting elite strategies, is a prerequisite for empowered inclusion. Additionally, elite strategies toward labor, which became dominant in the three countries under study during the mid-20th century, displayed remarkable continuity through adaptation to the new democratic and market-oriented context. The book suggests that elites in the three countries developed different dominant strategies toward subordinate groups: Elite-biased Contention in Chile, Controlled Coordination in Portugal, and Consociationalism in Uruguay.

The analysis of long-term factors is complemented by a comparison of left parties’ strategic stances in labor reform debates and voting since the return to democracy. These stances are shaped by Left unity, which is influenced by two main factors: the extent of divisions over political strategy within leftist parties during the period, and the narratives constructed by the political Left and organized labor regarding their roles during periods of past violence and repression by political opponents.

The harsh political conflict during the dual transition, including radical regime changes in Chile, Portugal, and Uruguay, affected the unity of the Left in the subsequent decades, particularly the relationship between Communist and Socialist parties. This unity or disunity also impacted Left-labor relations for decades. Disunity could lead to a weakening of party-societal linkages or the formation of two or more camps, where at least one continues to mobilize labor. In Chile, the former scenario occurred, while in Portugal, the latter occurred. The unity of the Left during this period was influenced by significant political divides within leftist parties over political strategy. Attitudes toward democracy and open capitalism varied greatly across the three cases and within the left-wing bloc in the Portuguese case. In Chile, the Unidad Popular government (1970-1973) attempted to move the economic model toward socialism while maintaining a democratic regime. This bold strategy, coupled with intense repression by the military regime that followed, decisively affected the unity of the leftist camp. In contrast, in Uruguay, leftist parties and labor organizations remained within the democratic camp. The cooperative atmosphere between Socialists and Communists, as well as between them and other minor parties and groups that formed the Frente Amplio, remained intact during the dual transition.

Long- and short-term factors are then contextualized by the ideational construction of the tradeoff between wages and employment. This anchoring factor links Left unity and the empowered inclusion of labor to the use of wage policy. The anchoring bias, causing individuals to heavily rely on previous information, suggests that when debating wage policy, the Left in each country interprets the conflict from the reference point of its anchor. Thus, this anchoring factor is relevant for understanding the path dependency of long-term historical factors. The continuity through adaptation of previously existing elite strategies to the post-dual transition period supports the idea of the historical continuity of long-term processes even in the face of disruptive historical events. This argument underscores the importance of not solely focusing on immediate, short-term causes while neglecting to examine long-term slow-moving processes.

In conclusion, among several contributions, the book demonstrates meaningful variation in how capitalist structures are organized in Latin America. It also underscores that such variation is directly related to the problem of empowered inclusion, a central issue for democracy highlighted by O’Donnell at the dawn of the third wave of democratization. The book endeavors to integrate large-scale historical processes with frequently analyzed short-term and agency-based factors to elucidate variation in the crafting of distributive strategies. By placing cases within a longer historical arc, it aims to reshape the debate on the politics of distribution in democracies outside the developed world.