ABSTRACT
The weakening of centralized labor market organizations is attributed to the increasing importance of highly specific capital and long-term relationships at the local level. Integrated capital markets and the associated loss of policy autonomy challenge the Nordic model in a fundamental way by rendering obsolete the traditional instruments of the Nordic class compromise on capital accumulation. Social corporatism in Nordic Europe reflects an underlying set of political values and a degree of social cohesion that should, in principle, be able to adapt to changing economic environments. The corporatist institutions of Sweden and Finland historically have been associated with devaluation-prone economic policies. The scholarly literature emphasizes the difficulties faced by the unions, but the above contradiction between long-term ideological objectives and the demands of short-run economic management has torn the policies of employers in both Sweden and Finland. In economic terms, corporatism is often simply associated with "centralization" in wage bargaining.
