Abstract

There is ample historical evidence, both inside and outside the Organisation for Economic Co-operation and Development (OECD), which shows that businesses are not passive policy-takers and in fact that they play a very active role in molding, reshaping, or even blocking when necessary, socially desirable policies when these are deemed antithetical to business interests. On the other hand the state is not a passive policy-maker either, obediently following capitalist diktats. The point of departure of this chapter is the proposition that attempts by the state to implement social democratic policies and/or maintain them over time take place in a highly contested environment involving power struggles between the business, state, and the larger society. The chapter suggests that social democratic policy proposals in a particular country need to be anchored in the study of the history and historiography of state_business relations in order to understand the nature of power struggles over policy. Where relevant, this type of work should be complemented via empirical or econometric analysis. For example, the investigation of the trends in business tax rates and social expenditure rates can provide quantitative evidence of the power wielded by capitalists, workers, and the state, thereby deepening the understanding of the ways in which the power structure in capitalist societies shapes policies.