3 - 1997

Social justice and free market

Is conflict or consensus the road to success?

Churches and trade unions in the same boat

by Wolfgang Schroeder

Yesterday’s political opponents are now partners. The author considers the churches and trade unions the very pillars of the rule of law and social welfare. Even if the joint statement of the churches calls into question the freedom of collective bargaining, trade unionist Wolfgang Schroeder suspects that the churches oppose neo-liberalism. He demands that the churches show willingness to face conflict and struggle and the issue of political power. Wolfgang Schroeder is chairman of the board of IG Metall (German metalworkers trade union) and in charge of basic policy issues.

For a few years now economy and society have been subject to structural change. Spurred by innovation in the fields of technology and labour organisation, this change has not only opened new dimensions for competition among businesses but also for that among states and societies. Moreover, political changes brought about by the collapse of Communist rule, which have extended more than just the capitalist principle of competition to an ever-larger portion of humanity. Through these processes, the proponents of a new set of values have gone onto the offensive driven by ideas of difference and inequality. Whereas advocates of social rules that create equal opportunities are on the defensive now. This new political constellation places huge pressure on democracies regulated by social justice and their institutional foundations. While churches and trade unions were rather seen as enemies right into the 1960s, their common ties are more apparent nowadays. Both are now seen as civilisation pillars of the German model of the rule of law and social welfare. This was not always the case. They both needed time to make it up with a pluralistic, liberal democracy and to accept that their ideas of truth and participation have no monopolistic impact in a pluralistic society. Perhaps this belated and conflict-ridden appropriation of democracy made them particularly committed champions of the German model of the rule of law and social welfare. Against the background of completely new framework conditions, churches and trade unions have gone onto the defensive. However, it’s not exactly new that the values and projects they back meet with disapproval. Still, the pressure which has built up over the last few years may have led to a new constellation of action which is permanently wearing away at their own traditions and institutions.

Alliance of unequal partners

The erosion of social and work ethics, individualisation, and cultural and religious pluralisation have led to such fundamental thrusts of societal change that churches and trade unions can’t just ignore them. These developments call their structures and their self-defined position in Germany into question. What role does this "alliance" of unequal partners play against this background? Could they help each other understand rapidly changing reality better, or cope better with the process of defining their own role, so as to contribute to civilising competitive powers and conditions even in this new situation?

Never before was Germany as rich as it is today, but never before were unemployment and exclusion so rampant. Now that practised solidarity is more urgent than ever, there is more and more evidence that selfish, greedy behaviour is on the increase, and the acceptance of our social welfare structures and institutions is in decline. The churches have touched this sore point and have made the task it entails quite clear: "Solidarity and justice are more crucial than ever. Our country is marked by deep rifts: Above all the rift caused by mass unemployment, but also the growing rift between rich and poor and that between east and west, which will take a long time to heal." They are quite aware that many of those in Germany’s economic and political elites would like to "abandon the regulative idea of justice." Opposed to this trend, they plead against a leaner state and for a social balance through social welfare institutions and associations. The trade unions see this statement as an encouragement of their commitment against a divided society and for a change based on social justice and consensus. Like the churches, they want to get society’s achievers to practice solidarity and not to abandon this task. According to trade union experience, however, practical solidarity cannot be obtained through the power of discussion alone. On top of that, we need conflict, a premeditated controversy, and power to create social justice. This side of social justice has always been a difficult issue for the churches, because their definition of community does not see justice as the result of making conflict and exerting power. But suppressing or downplaying the power issue is just as much to blame for the concealment of real dependencies as for the failure to discuss alternatives. The current debate on the future of social welfare aims to weaken traditional distributive institutions and to strengthen private provision and security options. In this debate, the churches plead against changing the social welfare system and for strengthening the principle of need within existing social insurance schemes.

The principle of need (in the form of introducing a basic allowance) could prevent triggering a poverty spiral, which society can neither regulate nor absorb. The churches point out that boosting the forces of society does not mean weakening the social regulative state. On the contrary, to boost social solidarity we need a state that aims to support the necessary forces to put their initiatives on a lasting and more viable foundation.

A society that allows people to contribute only through gainful employment risks becoming totalitarian, if this goal cannot be attained for a long period. Thus, it is necessary to provide for financial security and societal acknowledgement beyond the sphere of gainful employment. But as lifestyles, cultures, and values only change very slowly, politicians in particular are called upon to help improve the employment situation through suitable measures and incentives for the immediate and not-so-immediate future. This includes boosting domestic demand and specific employment schemes. From a trade union point of view, the "alliance for employment" proposed by IG Metall in November 1995 is a contemporary and problem-orientated basic scheme for organising social solidarity. The underlying philosophy of this solidarity model is that the state, employers, and employees make independent contributions towards easing unemployment and boosting solidarity within our society.

This idea lives on, although the project has foundered for the time being. It is a dramatic state of affairs that mass unemployment is used as a potential threat to achieve deregulation of Germany’s regulated social system. While it used to be only a few economic theorists, their political representatives in the FDP and in industrial associations, who had the model of a pure market in mind and fundamentally called area-wide collective bargaining into question, the number of critics is much larger today. They attack free collective bargaining, because it is allegedly unable to fight mass unemployment for good and to reduce costs to ensure that German industry can improve its competitiveness through its prices. Thus, collective bargaining becomes a scapegoat for everything, while its performance and reform potential is ignored for the sake of political interests.

Social System and Sozial Peace

Unfortunately, the church statement is not completely devoid of this tendency. With reference to the subsidiarity principle and against the background of their own collective bargaining situation, the churches plead for a rejection of free collective bargaining in that they want to encourage companies not only to have more say in regulating working hours but also in pay levels. Industry-wide bargaining agreements-as international comparisons have shown - are the best way to promote social peace, create social justice, and boost industrial innovation and performance. Area-wide bargaining agreements ease the pressure on the state and companies. Despite the advantages of a policy of area-wide collective agreements so far, we need reforms to adequately shape the changed political and industrial framework both now and in future. This is crucial in view of new material constellations, new subjective demands of the employees and a new attitude of the companies to the area-wide collective agreement and to employer associations.

In the days of full employment, employers were very interested in area-wide collective agreements that reduced competition and conflicts, while enabling reliable planning. In this constellation employer associations had the authority to regulate many labour policy areas bindingly for all companies. The change of competitive conditions and the new ideological appreciation of difference and inequality replaced the principle of collective standardisation by the model of a lean and flexible collective bargaining policy. In contrast, German trade unions demand that the area-wide collective agreement be adapted to different situations in individual sectors and companies. This is to "anchor options in the area-wide collective agreements that give companies choice and creative options for corporate implementation."

If you favour companies one-sidedly to the detriment of collective bargainers, as the church statement demands with a focus on employer interests, you endanger the strength of German collective bargaining. It’s simply not true that collective bargainers are not aware of the necessity of reforming collective bargaining to reposition it between corporate and association levels. However, this calls for consensus that the German model of industry-wide, association-orientated pay fixing is ready for and worth of reform. It is obvious that this consensus will not come of its own accord, but can only be attained through conflicts, in view of divergent interests. The churches have the opportunity to help strengthen social support for this model. Regrettably, they did not take this opportunity in the statement.

Two goals take centre stage for trade unions: The first is to secure employment and create jobs, the second to establish a policy that will improve the impact of the area-wide collective agreement. To realise these goals, they must simultaneously improve the impact of their own organisation policy. In this context, we must consider that a defence concept that focuses on warding off and preventing is not what the trade unions need for the coming confrontation. As most companies are not in a shaky economic position, but are rather extremely modern and efficient units, the trade unions must focus both on securing jobs and on presenting a creative concept that has something to offer weak and strong companies alike. This is another reason why they want to reform the area-wide bargaining agreement.

New quality of ecumenicity

Despite all this criticism, the joint statement of the churches is a good concept. This statement introduces a new quality into the ecumenical dialogue. It shows a normative basic consensus beyond neo-liberalism. It makes the reader aware of social disintegration and of the necessity of a policy that stands up for the poor and excluded. It points out that solidarity in a highly complex competition-orientated industrial society cannot be achieved without a regulating function of the state and a decisive contribution of the high achievers. The discreet charm of neo-liberalism and the abandonment of social welfare and social regulation impede competition and destroy society. That is why the goal must be to revitalise the principle of social justice so that all social forces can commit to this task with ideas and their own initiative. Although churches and trade unions see themselves as part of international movements, their own institutional existence is closely related to the nation state.

This becomes quite plain, if you look at the core instruments that are crucial for their influence. Where would the trade unions be without the area-wide bargaining agreement? Where would the churches be without church tax? Of course, the abolition of the area-wide bargaining agreement would not mean the end of the trade unions, the abolition of church taxes would not herald the collapse of the churches in Germany. But without these instruments, the churches would be different and so would the trade unions. Moreover, a new republic would probably emerge, if two of its major pillars had to work on different structural foundations in future. The future of an alliance between the churches and trade unions cannot lie in a faint-hearted defensive policy of interests in favour of securing their own survival. Nobody would dispute that this is important, but an attempt solely on this level would be ineffectual.

So it’s all about social rules for an individualised competition-based society, in order to protect society from itself. If the churches and trade unions succeed in guiding this process with their own ideas and reform concepts, the future will be on their side. But they should not forget that the aim must also be permanent structures and power. The process of civilisation is not over yet - it constantly needs new impetus and new rules.

Reprinted from Evangelische Kommentare, vol. 8, 1997, slightly abridged and translated for publication in this magazine.