MARKETS OR POLITICS? THE DETERMINANTS OF LABOUR RELATIONS IN A NATIONALIZED INDUSTRY

Abstract

This article examines ‘market’ and ‘political’ explanations for the nature of nationalized industry labour relations, using British Rail as a case study. The market perspective suggests that market insulation generated ‘cosy’ industrial relations since it allowed managers to acquiesce in restrictive practices. More robust labour management recently is the result of greater exposure to market forces. This explanation is rejected because BR was exposed to competitive pressures before the Thatcher era, and because there is no simple relationship between market forces and managerial actions. Instead political uncertainty is the primary determinant of the state of industrial relations. In the 1970s British Rail management and unions formed a ‘tacit alliance’ to limit the potential damage of government interventions. This alliance has broken down in the 1980s not primarily because of market pressures but because government interventions have become more explicitly concerned with industrial relations.