ABSTRACT
Capitalism in Europe is widely seen as standing apart from the economic systems of other developed countries, particularly the USA and Japan. A range of factors makes the European economy distinctive, but the most important have been attempts by governments in the region to mesh social justice with market competition. Over the years, various labels have been used to capture these efforts, with welfare capitalism being the most frequently used term. Nowadays, the fashionable mantle is Social Europe. No exact definition has been developed for Social Europe, but discussions of the theme invariably cover two key institutions: the welfare state and collective bargaining, coupled with thick regulations governing employment relations. That these two institutions have played a central role in European economic life during the past half century should be beyond contention. To sketch the situation in schematic terms: the economic status of those in employment was determined by collective bargaining, more or less reinforced by legislation, while the rights and obligations of those not in jobs, such as the retired and the unemployed, depended primarily on the welfare state. Thus, Social Europe represents a form of economic citizenship embedded in an extensive array of public and collective institutions. No other industrialised country found it appropriate to organise economic and social relations in a similar way.
