ABSTRACT
This chapter reviews the development of the new industrial relations system. It discusses the Fordist system and the role of paternalist enterprises and powerful labour unions in maintaining a high-road economic programme of mass production and mass consumption. The chapter describes the new industrial relations system that emerged from this crisis and the implications of the changing industrial relations system for economic performance and the opportunity for progressive economic changes. In 1971, Lewis Powell, soon to be nominated to a seat on the United States Supreme Court, warned the leaders of the United States Chamber of Commerce that ‘the American economic system is under broad attack’. Long-term employment systems protect companies and their investments in their workers’ training and human capital from the otherwise pernicious effects of labour market competition and full employment. Unions resisted the policy changes that undermined the New Deal employment system, but their political demarche has largely failed.
