The Politics of Structural Change

Abstract

The 1930s and the 1980s were decades of significant political economic change in the capitalist democracies. Depression and the rise of the industrial working class created opportunities for the establishment of social democracy in the 1930s. Stagflation and the decline of the working class made possible waves of radical rightist reform. However, this article suggests that only governments that do not have to concentrate myopically on the exigencies of winning the next election have the political space to undertake structural changes, the benefits of which may only be manifest in the medium term. In turn, successful reforms are likely to entail changes in underlying social structural conditions—such as the strengthening or weakening of organized labor movements—that both expand the electoral constituencies of the government's partisanpreferred policies and improve their macroeconomic efficacy. These propositions are examined with respect to the construction social democracy in Sweden in the 1930s and the construction of neoliberalism in Thatcher's Britain. Although the consequences of these two instances were diametrically opposed, the conditions that created the possibility for radical reform, and the strategies pursued by the governments to precipitate structural change were very similar.