Class, Power and the Structural Dependence Thesis: Distributive Conflict in the UK, 1892–2018
| Author | Simon Mohun,Roberto Veneziani,Carlo V Fiorio |
| Published date | 01 November 2021 |
| Date | 01 November 2021 |
| DOI | http://doi.org/10.1177/0032321720928259 |
| Subject Matter | Articles |
https://doi.org/10.1177/0032321720928259
Political Studies
2021, Vol. 69(4) 985 –1008
© The Author(s) 2020
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DOI: 10.1177/0032321720928259
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Class, Power and the
Structural Dependence
Thesis: Distributive Conflict
in the UK, 1892–2018
Carlo V Fiorio1, Simon Mohun2
and Roberto Veneziani3
Abstract
Can political parties, social movements and governments influence market outcomes and shape
the functioning of a capitalist economy? Is it possible for social democratic parties, and the labour
movement in general, to promote a significant redistribution of income in favour of labour?
According to proponents of the structural dependence thesis, the answer to both questions is
negative, because the structural dependence of labour upon capital severely constrains feasible
income distributions. This article provides a long-run analysis of the UK, which casts doubts on the
structural dependence thesis. There is some evidence of a short-run profit-squeeze mechanism, but
income shares are much more variable in the long-run than the structural dependence argument
suggests, and the power resources available to social classes are among the key determinants of
distributive outcomes.
Keywords
structural dependence thesis, income distribution, power resources, labour movement
Accepted: 27 April 2020
Introduction
A foundational question in political economy concerns the nature of the interaction between
politics and markets. To what extent can political parties, social movements and govern-
ments influence market outcomes and shape the functioning of a capitalist economy? More
specifically, given the inherent tendency of unfettered markets to yield major income and
wealth inequalities, is it possible for social democratic parties, and the labour movement in
general, to promote a significant redistribution of income in favour of labour?
1Department of Economics, Management and Quantitative Methods, University of Milan, Milan, Italy
2School of Business and Management, Queen Mary University of London, London, UK
3School of Economics and Finance, Queen Mary University of London, London, UK
Corresponding author:
Roberto Veneziani, School of Economics and Finance, Queen Mary University of London, Mile End Road,
London E1 4NS, UK.
Email: r.veneziani@qmul.ac.uk
928259PSX0010.1177/0032321720928259Political StudiesFiorio et al.
research-article2020
Article
986 Political Studies 69(4)
According to a prominent tradition comprising both neo-pluralist (Lindblom, 1997,
1982; Stone, 1980) and neo-Marxist authors (Block, 1977; Coates, 1975; Offe, 1984), the
margins of intervention are extremely narrow, due to the unique power of business in
capitalist economies. Capitalists do not need to organize and lobby in order to influence
decisions: they enjoy a structural power which derives from their control over investment.
If governments try to implement any policies or reforms that damage capitalist interests
and undercut profitability or business confidence, profit-maximizing capitalists respond
by reducing investment and thus economic activity. To the extent that economic activity
matters for electoral outcomes, this severely reduces the margins for reforms, and it is
why the market might be characterized as a prison. For a broad category of political/economic
affairs, it imprisons policy making, and imprisons our attempts to improve our institutions. It
greatly cripples our attempts to improve the social world because it afflicts us with sluggish
economic performance and unemployment simply because we begin to debate or undertake
reform. (Lindblom, 1982: 329)
In the last two decades, the structural power of business has played a key role in expla-
nations of the declining ambitions and influence of social democratic parties. As Glyn
(2001: 1) remarked, ‘At the turn of the century more parties of the Left were in govern-
ment in advanced capitalist countries than ever before, including, for the first time ever,
those of the four largest West European countries’ and yet this only brought ‘modest shifts
in economic policy’. This persistent ineffectiveness, compounded by the electoral decline
of socialist parties across Europe, has led even prominent social democratic theorists to
emphasize the structural limits that capitalism places on redistributive policies and
reforms (Streeck, 2014). But the structural power of business has also played a central
role in analyses of financialization and globalization (Bell, 2012; Krippner, 2011; Panitch
and Gindin, 2014; Roos, 2019; Starr, 2019). ‘Indeed, the financial crisis revived the struc-
tural power debate’ (Woll, 2016: 375).
However, the structural power of capitalists does not constrain only government actions.
In a series of seminal contributions, Przeworski (1985, 1991), Przeworski and Sprague
(1986) and Przeworski and Wallerstein (1988) have argued that there is an irreversible
tendency that makes it impossible in capitalist democracies in the long-run to promote
significant changes in the distribution of income in favour of labour, let alone any socialist
objectives. While the immediate interests of capitalists and workers are in conflict in the
short-run (higher profits lead to lower wages, and vice versa), this is not true in a dynamic
context, because in a capitalist system profits are the engine of growth, and growth delivers
(at least potentially) higher welfare in the future. It is this mechanism that is the material
basis of workers’ consent to capitalism and thus of capitalist hegemony, since it explains
why, faced with the likely high costs of transition to socialism, self-interested rational
workers will support capitalism: capitalism promises continued welfare growth.
Furthermore, when socialist parties and the labour movement forsake revolutionary
strategies, they inevitably enter into an economic logic of class compromise. In order to
gain the future benefit of returns to investment, they must forego any significant expro-
priation of profits today. Both high levels of taxation imposed by a sympathetic govern-
ment and the promotion of working-class militancy through class struggle are
counterproductive, because each will generate a profit-squeeze mechanism: low profits
lead to a reduction in investment, which implies lower employment today and lower pro-
duction and wages in the future. Changes in the distribution of income, either via a
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