There was widespread concern in the early 1950s about the compatibility between European trade liberalisation promoted by the Organisation for European Economic Co-operation (OEEC) and national welfare mechanisms. Many political leaders, industrialists and trade unionists feared that in an open economic system, differences in social protection would strongly impact on competitiveness, with a particularly negative effect on those countries with the most advanced legislation, such as France and Belgium. In 1954, on the eve of proposals for further integration among the six founding member states of the European Coal and Steel Community (ECSC), the French government officially raised the issue. With the support of the French industry and trade unions, it proposed to combine trade liberalisation with some form of harmonisation of national social law.
The matter was debated in different venues, but it was dealt with in all its implications within the International Labour Organisation (ILO), where a group of external top-level scholars was appointed to study it and come up with a theoretically solid answer. Under the chairmanship of the Swedish economist Bertil Ohlin the group drafted a report that denied any need for social harmonisation and asserted that economic integration would in itself stimulate a general improvement of living conditions. The so-called Ohlin Report had an immediate influence on the European Economic Community (EEC) negotiations and quickly became a major reference for economics and law literature.
ILO officials had deliberately selected the members of the expert group to achieve this outcome. Within the International Labour Office, the ILO's permanent secretariat (usually known by the French acronym BIT for Bureau International du Travail), it was clear from the beginning that the principle of international social harmonisation had to be rejected. The dominant vision in Geneva, where the organisation was located, was that ‘differences in wages and social charges are not [a] determining factor where integration is concerned’.Footnote 1 The decision to appoint external experts had the sole purpose of cloaking the BIT's position with the greatest possible authority.Footnote 2
The BIT's standpoint, which gave priority to economic liberalisation over other aims, was perfectly in line with the ILO's established policy. Created at the 1919 Peace Conference, the organisation was officially charged with approving international conventions in social and labour matters which the member states would then ratify and apply domestically. This mechanism was supposed to ease the pursuit of two tightly connected goals. On the one hand, the development of national social legislation would contribute to defuse domestic political tensions and strengthen social stability in Europe. This goal was reflected in the ILO's tripartite composition: its main decision making body, the International Labour Conference, was formed by government, employer and trade union representatives from each member state, in line with a principle of social dialogue that explicitly opposed the message of class struggle coming from revolutionary Russia. On the other hand, by inducing the progressive alignment of social costs, the application of international labour conventions was meant to reduce their impact on competitiveness, therefore eliminating a major obstacle to trade liberalisation.Footnote 3 This in turn would promote economic rationalisation and growth, thus increasing the resources available for social advancements and fostering social stability.
For this reason, whilst incessantly promoting social reforms in all its member states, the ILO officially supported European integration from its foundation and aimed all its activities towards promoting international economic cooperation. This was particularly evident in its positions on labour market issues, the core of the ILO's concrete action. During the interwar years the ILO developed a specific recipe for ‘manpower’ problems, centred on social dialogue, labour mobility and vocational training. Consolidated during the Second World War, this recipe became increasingly popular in Western political and socio-economic milieus after the war and inspired labour market policies during the early phase of European economic integration.
The growing research on the ILO in recent years has largely neglected these topics. Though the ILO's tripartite composition and migration policies have attracted scholarly interest, and studies on the Organisation's action for social dialogue and labour mobility exist, few works have explored their connection with European economic integration, especially in a long term perspective.Footnote 4 This is a remarkable lacuna, which appears even more important when we consider that, as the article will show, the EEC and the European Union (EU) have shaped their manpower policies on similar bases even in much more recent years.
This article attempts to fill this void. First of all, it will describe the ILO's positions on trade liberalisation and European economic integration and their substantial continuity from the interwar to the post-war period. The main driver of this continuity was the persisting relevance of the organisation's basic aim of social stability – embodied in its tripartite structure – in the political life of the Western countries, in the framework of the New Deal and, later, of the Cold War. Second, the article will trace the emergence of a recipe for labour market policy which drew inspiration from the experience of the United States and some other industrial countries, and which found in the ILO a major international laboratory and disseminator. This represented, to use a concept borrowed from Ernst Haas, a case of successful ‘organisational learning’ by the ILO, i.e. the adaptation of its policies to the evolving political and economic general conditions. This learning process, as will be shown, was steeped in the co-shaping by the ILO of a new set of generally accepted ideas and understandings on the management of labour market dynamics which did not imply the abandoning of the organisation's original ideology.Footnote 5
Creating the Recipe: The ILO and the Labour Market in Interwar Europe
The end of the First World War marked the rise of two basic ideas. The first was the restoration of international free trade as a necessary pillar of peace and prosperity, stimulated by the role that protectionism had clearly played in feeding the tensions that had led to the war.Footnote 6 The second was the belief that social stability could not be attained by repression alone – a belief encouraged by the revolutionary consequences of the war and the emergence of class conflict as the central political issue.
Both ideas were especially popular amongst centrist democratic forces, including sections of the traditional liberal parties, parties of Christian inspiration and reformist currents of socialism. It was in these milieus that the connection between the two – the principle of European trade liberalisation as a key factor for the improvement of social conditions – gradually gained ground. Many moderate socialists and trade unionists, for example, were motivated by the experience of the union sacrée during the war to further develop their reformist orientation and seek solutions that would lead to social improvements without firing class conflict. That is why they started to support the end of protectionism as a way to promote economic growth, which they now saw as the prerequisite for realising social reforms.Footnote 7
The creation of the ILO, with its structural preference for social dialogue and its goals of economic liberalisation and social stability, was inspired by these positions. The importance of its tasks for the victors of the First World War was reflected in the inclusion of the ILO constitution in the peace treaties, together with the Covenant of the League of Nations. It is true that, in spite of the approval of several international conventions on specific issues, the Geneva body did not significantly influence the socio-economic reorganisation of the 1920s, which was based on the return to the gold standard and to more traditional economic policies. However, it remained a constant point of reference for the world of European reformism. Much of the European legislation on social insurance approved in the interwar years, for example, was largely inspired by the ILO studies and guidelines.Footnote 8 On the other hand, European reformist milieus regularly contributed to its institutional life and supplied many BIT officials.Footnote 9
Albert Thomas, the first Director of the Office, was a French socialist who had been Minister of Armaments and War Production during the war. Like other socialists with a similar background, he had been deeply impressed by this experience. The wartime economy had allowed him to see the advantages of closer collaboration among the social classes and of rationalisation and productivity increases for promoting growth and prosperity in peacetime. The comparison with the chaos of revolutionary Russia had then driven him to radically reject class struggle and to see in economic growth the high road to promote social progress.Footnote 10
This explains the great attention that, under Thomas's guidance, the BIT paid to American Taylorist methods in the 1920s, driven by the idea that a more rational organisation of production could increase the resources available to improve the living conditions of the masses.Footnote 11 The same logic fuelled the ILO's preference for trade liberalisation, which was seen in Geneva as a powerful rationalising factor for the European economy. Like other European policy makers, Thomas and his aides considered the economic fragmentation of Europe resulting from the peace conference a major obstacle to growth and employment.Footnote 12
The ILO therefore tried from the beginning to facilitate the most efficient international distribution of labour, by favouring cross-border mobility and, for example, promoting the coordination of national social insurance systems, in order to allow migrant workers to accrue rights from different countries. ILO Convention 2, approved in 1919 and prompted by the problems of post-war demobilisation, emphasised above all the need to improve the mechanisms governing the labour market. All countries were to found public employment agencies, controlled by central authorities and coordinated with each other through the ILO, to make it easier for labour supply and demand to match across national borders. The convention also envisaged the application of unemployment insurance mechanisms (where they existed) to migrant workers and, in line with the basic principles of the ILO, it demanded that trade unions and employers’ organisations be fully involved in the management of these mechanisms. This demand later featured regularly in ILO acts and resolutions.Footnote 13
These issues and European integration became most explicitly connected in a memorandum of January 1931. Written by Albert Thomas, it expressed the BIT's official support for Aristide Briand's draft for a European Federal Union. Asked about the social implications of the customs union outlined in the French foreign minister's proposal, the Director enthusiastically welcomed the initiative. He expected that, by inducing a rationalisation of the European economy, the customs union would increase the resources available to improve working and living conditions:
It is an established fact that the workers’ purchasing power, that is to say their real wages, everywhere increase when the general progress of production augments the reserves at the disposal of the community. Any progress due to greater freedom or better regulation in the circulation of goods, or to the multiplication or expansion of markets, stabilisation of commercial conditions, better distribution of production to conform with national resources, increase of industrial output or improvement of agricultural methods is bound to be reflected in a rise in the standards of living of the workers both in the cities and on the land.Footnote 14
As a consequence, the only social measures that needed to accompany the customs union were those aimed at creating a real European labour market, which Thomas identified as an indispensable element of economic integration. This meant, first of all, the free circulation of labour and the coordination of social insurance mechanisms to meet the needs of migrant workers.Footnote 15
Thomas's positions thus had their roots in well-established ILO preferences and in the idea that in the long-term trade liberalisation would bring consistent advantages. However, the BIT Director was also aware of the problems it might cause in the short run. By triggering a process of rationalisation in the European economy the customs union could bring ‘the extinction of certain “artificial” industries which have grown up in some countries behind the shelter of customs barriers and could not survive a system of complete free trade’. This would bring about, at least in the beginning, job losses in these industries, a problem that, in Thomas's words, would ‘call for a number of measures of compensation and adaptation for the protection of the working classes’. These measures were the only real social policy that the ILO deemed necessary for the creation of a European customs union.Footnote 16
The worsening economic conditions and widespread political radicalisation in Europe soon led to the abandonment of the Briand project. Each country searched for its own national path out of the crisis. Even during the protectionist spiral of the 1930s, however, the ILO maintained its original attitude towards international cooperation and free trade, and further strengthened it following the accession of the United States to the organisation in 1934.
After the congressional rejection of the peace treaties, in 1919, the cooperation between the US administration and the ILO had been relatively limited. The election of Franklin D. Roosevelt, with his ambitious socio-economic agenda, changed the US government's attitude. The new administration saw the international labour conventions as a potential tool for overcoming the political resistance that New Deal reforms were expected to encounter in the United States. What is more, in line with the organisation's original aims, the ILO's action could help minimise any negative effect of the new US social legislation on the country's competitiveness and contribute to creating a sound basis for a new wave of international trade liberalisation.Footnote 17
New Deal policies therefore explain why the American delegation in Geneva became very active and influential after 1934, and with its political and economic leverage soon began to dominate the organisation. Its activism was particularly spurred on by the political turn of 1934–5, when the Roosevelt Administration adopted some of its most ambitious reforms, such as the Social Security Act, and made its preference for free trade explicit with the approval of the Reciprocal Trade Agreements Act.Footnote 18 In February 1936, for example, after a proposal by the US delegate Isador Lubin, the ILO launched a study on the relations between employment, wages and international trade.Footnote 19 The study was entrusted to Robert W. Carr, an economist at the Department of State, who carried it out in close collaboration with experts from BIT and from various US Departments.Footnote 20 The outcome was a 1940 report which asserted that a close link existed between the development of international trade and increased employment. It stressed once again that the ‘prospects for improving on working conditions and raising the real income of workers’ lay ‘in a greater exchange of goods between countries’.Footnote 21
US membership not only strengthened the ILO's long-standing predilection for economic liberalisation, it also played a major role in developing the organisation's recipes for labour market policy. The economic crisis led to increased attention in vocational training. Traditionally connected with the education and employment of young people, in the 1930s it came to be seen as a suitable instrument for bringing unemployed adults into work, too.Footnote 22 The demands of rearmament and the outbreak of the war further accentuated the importance of training and pushed all countries to strengthen their mechanisms. In France, for example, a series of Centres de Formation Professionnelle, designed to rapidly prepare staff for the war industries, were established during 1939–40, whilst existing vocational guidance services were restructured in order to redistribute the workers in the most effective way for the needs of the war economy.Footnote 23 In Britain the public training system was reorganised during the crisis to facilitate the transfer of workers from especially depressed areas, and was further strengthened and reoriented towards the rearmament effort after 1937. At the same time British technical schools, traditionally dedicated to the apprenticeship of young people, organised courses aimed at helping adult workers to adapt to war industry jobs. After the outbreak of hostilities the government also urged private industries to develop training at their plants.Footnote 24 In the United States rearmament started considerably later than in Europe, but education and training played a central role in New Deal employment policies from the beginning. This was true not only for youth-oriented programmes such as the Civilian Conservation Corps and the National Youth Administration but also for the wider initiatives of the Civil Works and Works Progress Administration, deliberately labour-intensive and focused on training instead of efficiency gains.Footnote 25
These developments at a national level also impacted on the activities of the ILO. During the 1930s the organisation increasingly turned its attention to topics related to training, and in 1939 adopted a formal recommendation on the matter. The US government was this document's main sponsor. Clara Beyer, Associate Director of the Division of Labor Standards of the US Labor Department – one of the major driving forces of the New Deal – was its rapporteur at the International Labour Conference.Footnote 26 This explains why the recommendation was not focused only on the exigencies of the war, which the United States had not yet joined, but also stated some general principles about the organisation of technical education and training in a democratic society in times of peace. In Beyer's words, the basic idea was that ‘vocational training programmes should be closely adapted to the economic and social needs of the community, to the occupational interests and cultural requirements of the workers and to the requirements of employers for labour’.Footnote 27 This focus marked an attempt to reconcile collective needs and personal aspirations, which obviously called for the close cooperation among the social partners in the management of training programmes, and was thus perfectly in tune with the ILO's traditional preferences. The recommendation also proposed the provision of technical training opportunities for all workers including adults, free and non-discriminatory access and support to students in financial difficulty. All these ideas reflected the influence of US government representatives, who hoped to facilitate the adoption of the same principles in their own country. In fact, immediately after the approval of the recommendation, the US Office of Education and the Department of Labor strove to publicise its contents in the United States, urging federal states, companies and organisations to comply with it.Footnote 28
Consolidating the Recipe: The ILO and Labour during War and Demobilisation
By 1939 social dialogue, labour mobility and vocational training were therefore already key ingredients of the ILO's recipe for manpower policy – a recipe that mirrored and, at the same time, fed into the legislation and practices of its major member states. With the United States's entry into the Second World War in 1941 these tendencies became even more marked, resulting from economic and political changes in the United States and the impact of the war on the ILO itself.
The strong growth generated by the war effort was the key factor in allowing the US economy to finally overcome its prolonged crisis. Quickly leading to full employment, it also favoured the alleviation of the social conflicts that had characterised the 1930s and helped the consolidation of a new centrist political formula. This formula was based on a compromise between sections of business, trade unions and the moderate reformist world. It marked the end of redistributive struggles and the onset of class collaboration aimed at pursuing economic growth, now seen as the high road to increase both profits and wages. Known as the ‘politics of productivity’, this formula more than ever required a focus on social dialogue and on the search for economic efficiency, also through the effective management and distribution of labour.Footnote 29 The harmony with the ILO's philosophy was evident and was symbolically confirmed by the two International Labour Conferences organised in wartime, both held in US cities: the first in New York and Washington in late 1941 and the second in Philadelphia in May 1944.
In the meantime, in the summer of 1940 the ILO headquarters had been relocated from Geneva to Montreal, in order to remove them from a German-dominated Europe and shield them from the hostility that the National Socialist regime had always expressed towards the organisation. The transfer was only possible by downsizing the ILO staff from hundreds to a few dozen officials, which weakened its operational capabilities. All this contributed to growing doubts about the organisation's role after the war. In this situation, with most of its European founding members now represented by governments in exile, and in view of the Soviet Union's traditional resentment of the ILO's tripartite composition, the organisation became more dependent than ever on the United States and even more receptive to its government's influence.Footnote 30
These wartime changes became blatantly clear in Philadelphia in May 1944. The conference's participants passed a solemn declaration that reformulated the ILO's original goals of social advancement and international economic cooperation in typical New Deal terms, with references to ‘freedom of expression’, ‘war against want’ and ‘social security’.Footnote 31 They also approved a number of new recommendations. One of these dealt with the problems of post-war demobilisation, an issue widely seen as crucial, especially within the United States after the experience of 1920–21, when an uncoordinated reconversion to peace economy had resulted in a brief but severe recession.Footnote 32 The US government was thus the main promoter of the recommendation, with Clara Beyer once more acting as rapporteur to the plenary conference. Officially dedicated to ‘Employment in the transition from war to peace’, Recommendation 71 essentially reiterated the solutions already identified in previous years, albeit ordering them to form a coherent agenda for labour market policy after the end of the war. While it dealt with several different aspects ranging from the collection of statistical data to industrial reconversion, it mainly focused on the established key ingredients.
Again, labour mobility was seen as crucial for achieving the most efficient distribution of the workforce. It needed, though, certain conditions in order to work adequately. The first, a traditional topic for the ILO, was the existence of well-organised public employment services, which would provide detailed data on labour demand and supply. The second, seen as the real lubricant of the labour market, was the development of national training and retraining programmes ‘to the fullest possible extent, in order to meet the needs of the workers who will have to be re-established in employment or provided with new employment’. The basic idea was to allow individuals great freedom of choice regarding their education and training. Nonetheless, the recommendation suggested the use of financial incentives to encourage attendance of training courses and to guide the workers towards certain crafts or geographical areas, in order to prevent an unbalanced distribution of labour among regions or economic sectors. For all these policies to work effectively, they had to be managed in close collaboration with employers’ and workers’ organisations.Footnote 33
Recommendation 71 was clearly tailored to the US situation. In its manpower provisions in particular, it was very similar to the Servicemen's Readjustment Act (popularly known as the G.I. Bill of Rights) that Roosevelt was about to sign and which granted free access to vocational training and education to war veterans in order to facilitate their reintegration into the labour market.Footnote 34 Recommendation 71 suggested the application of the same formula to post-war Europe, however, where millions of refugees, deportees and prisoners would have to be repatriated or resettled after the war. The idea that a stable solution for them required their full reintegration in the economic life was widely shared in US political circles. The Commission to Study the Organisation of Peace, an influential think tank with strong connections to the US government, had supported this agenda since 1942. It was broadly in line with the ILO's traditions and preferences and rapidly found the support of its European members. Moreover, Carter Goodrich, Henry Harriman and Robert Watt – the US government, employer and labour representatives in the ILO – were all members of this Commission, a fact that greatly facilitated the adoption of its vision in Philadelphia.Footnote 35
After the end of the Second World War these ideas were not actually applied to European population problems, which were to be resolved very slowly through a combination of heterogeneous policy measures. To some extent, however, they prefigured the principles that a few years later informed the main initiatives for economic integration in Western Europe, from the Marshall Plan to the European Communities.
Applying the Recipe: The ILO, the Labour Market and European Economic Integration
As Cold War tensions emerged the persisting population imbalances were increasingly seen as one of the major obstacles to economic recovery and social stability in Europe. For this reason the Marshall Plan paid great attention to such problems, essentially trying to reproduce the wartime US formula inspired by the politics of productivity and centred on mobility, training and social dialogue.Footnote 36 As its positions chimed with this US agenda, and as it had considerable accumulated expertise, the ILO was involved in the Marshall Plan activities from the outset. The absence of the Soviet Union from its ranks favoured the ILO's Western positioning in the early years of the Cold War. This orientation was further strengthened by the appointment of David Morse, the former Under Secretary of Labor in the Truman Administration, as the Director General of the International Labour Office.Footnote 37 Thus, despite the membership of several communist Eastern European countries (Bulgaria, Czechoslovakia, Hungary and Poland), the ILO focused mainly on Western Europe in those years.Footnote 38
In January 1948 a conference on manpower held in Rome by the Marshall Plan countries asked the ILO to actively contribute to the promotion of European labour mobility. The request specifically concerned the collection of data on labour supply and demand in each country, the setting up and coordination of national employment services and the development of vocational training systems. The conference also requested the BIT to elaborate a standardised nomenclature of professional qualifications, an indispensable prerequisite for efficient cross-border mobility. Moreover, the BIT became involved in the European Migration Committee, an organisation created by the conference to manage intra-European migration.Footnote 39
Stimulated by these developments, the ILO launched its Manpower Programme in March 1948, focusing on the development of ‘employment service machinery’, ‘vocational training and retraining’ and ‘international migration’. This programme formed the basis of the Organisation's activities during the following years, when the ILO adopted new conventions and recommendations on these matters and became very active in providing technical assistance. In the framework of the Marshall Plan, the ILO mainly gave such assistance to countries with a labour surplus. Thus, it established so-called migration field missions in Italy, Austria and Germany to assist local authorities with selecting and instructing migrants, and it supported the Italian and Greek governments in reorganising their employment services and opening new vocational training centres. At the same time, some technical meetings organised by the ILO laid the basis for better communication and coordination among the employment and training services of the Marshall Plan countries.Footnote 40
US political and economic circles, however, favoured the ILO less as the Cold War intensified. Some US industrialists had always been hostile towards the organisation, whose acts constantly threatened to impinge on national policy making in socio-economic matters. With the increasing international tensions and the emergence of McCarthyism this hostility rapidly spread to political circles, also fed by the presence of some communist countries in the ILO. In this situation it became virtually impossible for the ILO, despite Morse's efforts, to obtain funds from Congress for its technical assistance activities.Footnote 41 From then onwards ILO relations with US policy making circles deteriorated, culminating in the United States’ temporary withdrawal from the organisation in the second half of the 1970s.Footnote 42
In the meantime, however, the ILO had started collaborating with the Council of Europe (created in 1949) and the European Coal and Steel Community (ECSC) (set up in 1951–2) on a wide range of labour related matters. In the case of the Council of Europe this cooperation concentrated on research and, in a few cases, the elaboration of non-binding norms such as, most prominently, the European Social Charter signed in 1961. In the case of the ECSC it consisted mostly of an intense activity of technical assistance provided by the ILO to the High Authority, the ECSC's executive body.
Modelled on the US productivist principles, the ECSC Treaty aimed at rationalising the European coal and steel sectors through the creation of a common market. Within this framework it also established the right for all workers of ‘confirmed qualification’ to move freely within the territory of the six member states but postponed the implementation of this right to a subsequent agreement. With this in mind, in the summer of 1953 the BIT and the High Authority signed a cooperation agreement. This agreement, the very first ever signed by the ECSC, regulated mutual consultation between the two bodies and formally committed the ILO to provide technical assistance to the Community.Footnote 43 Over the following years ILO personnel regularly participated in the discussions on free movement, providing most of the background documents and making a major contribution to drafting concrete regulations. In addition, BIT experts performed the crucial task of classifying and comparing the professional qualifications in the member states, a similar role to the one played in the framework of the Marshall Plan in 1948.Footnote 44 The BIT also helped the High Authority to collect and catalogue all existing material (books, manuals, films, etc.) on vocational training in the coal and steel sectors. It started new research in this field and organised international meetings on specific aspects of the topic.Footnote 45 Finally, ILO experts drafted a convention on the coordination of the member states’ social security systems, identified as a fundamental ingredient of freedom of circulation ever since Thomas's directorship. Due to technicalities, this document never entered into force. In 1958, however, the marginally revised text became one of the EEC's first regulations, thus creating the legal basis for implementing freedom of movement in the new organisation.Footnote 46
The ILO's traditional views were also reflected in the adaptation fund created by the ECSC Treaty to ease the temporary unemployment resulting from the implementation of the customs union for coal and steel, a problem that the ILO had addressed at least since 1931. To facilitate the re-entry of workers into the labour market, the fund financed the retraining and, if needed, the relocation of those who had lost their job as a result of adjustments to the new competitive conditions. The creation of the adaptation fund was prompted by the French, Belgian and Italian delegates during the negotiation on the ECSC Treaty, and there is no evidence of a direct role of the ILO. Nonetheless, it concretely implemented the ‘measures of compensation and adaptation’ envisaged by Thomas twenty years earlier. What is more, its structure and mechanisms were very similar to those suggested by the 1944 ILO Recommendation 71, focusing on the promotion of professional and geographical mobility as the key to manpower re-adaptation and including, for example, the use of financial incentives to encourage retraining or relocation. Finally, the organisations of employers and workers had to be closely associated with the ECSC re-adaptation activities, as previously recommended by the ILO.Footnote 47 Therefore, although it did not participate directly in the creation of the fund, the ILO certainly acted as a torch bearer for its guiding principles and technical solutions. It is not by chance that from his first days as President of the High Authority, Jean Monnet mentioned the adaptation mechanisms as one of the fields in which the BIT assistance to the new Community was indispensable.Footnote 48
Thus, the ILO concretely contributed to the implementation of key ECSC policies. Its contribution was made possible by the strong affinity existing between the two bodies, both closely associated with productivist ideas and aims. The ILO thus acted as a transmission belt of the know-how that it had accumulated over the previous decades, as a witness of national experiences but also as a laboratory for ideas and technical solutions in social policy.
Such an affinity with the ILO was even more obvious in the case of the EEC, created in 1957–8. Like the ECSC, the new Community aimed at increasing productivity and efficiency through the establishment of a common market, in this case extended to all economic sectors. To this end the EEC Treaty established the freedom of circulation of labour and encouraged the development of vocational training. Moreover, it created a financial instrument to promote professional and geographical labour mobility, the European Social Fund, which, despite a heated debate over its design during the EEC negotiations, in essence adopted the ECSC model.Footnote 49 It is not surprising, then, that the very first cooperation agreement signed by the European Commission in July 1958 was with the ILO, as in the case of the ECSC five years earlier; nor that, from the beginning, the BIT provided technical assistance to the EEC on a wide range of issues; nor, finally, that the EEC and the ILO created, in 1962, a Permanent Contact Committee for the coordination of common activities.Footnote 50
Arguably, however, the ILO's most significant contribution to the formation of the EEC was the Ohlin Report mentioned in the introduction to this article. The debate about so-called social harmonisation had started within the European trade union movement in the early 1950s and had quickly extended to political and industrial circles. Leading ILO officials were strongly opposed to social harmonisation, which they believed to be virtually impossible to attain. More importantly, in their view the focus on social harmonisation was misplaced, as the most significant indicator of competitiveness were not social costs, but the unit costs of products. In the course of 1953 the mounting debate about social harmonisation convinced the BIT of the need to take an official position, which would hopefully contribute to scale down the whole issue. As Vice-Director Jef Rens argued, the objective was to clearly state
that productivity will be increased by European integration [and] the European countries, by committing themselves to closer economic cooperation, will be able to achieve social goals which would be impossible to achieve in the current situation of national economies.Footnote 51
His words were almost identical to those used by Thomas a quarter of a century earlier, once again highlighting the continuity in the BIT's positions. In September 1954, however, when the French government's offensive for social harmonisation intensified, a statement to this effect began to appear less appropriate, potentially appearing to antagonise a traditional supporter of the ILO. The BIT officials therefore decided to appoint a committee of high-level experts to study the problem and take a stance in line with the ILO's preference, but from a formally independent position. To achieve this goal, they appointed personalities like the Italian Pasquale Saraceno and the German Helmut Meinhold, both well-known economists with close connections with their respective national governments and renowned supporters of European economic integration. Even more importantly, the BIT entrusted the committee chairmanship to Bertil Ohlin, the leader of the Swedish liberal party and author of a famous economic theory on the advantages of international free trade.Footnote 52
The Ohlin Report issued in the spring of 1956 fully met the BIT's expectations. It denied the need for a priori harmonisation, affirming that progressive ‘upward harmonisation’ of wages and social conditions would result from the economic rationalisation triggered by the customs union. The report made only one proviso, namely the necessity to prevent social costs from increasing faster than productivity. In other words, redistributive policies were to be avoided, and the focus was to be on increasing economic efficiency – the established BIT position from the interwar years. The Ohlin Report also stressed once more the need to promote labour mobility and called on the ILO to assist in such matters as ‘the development and maintenance of well-functioning and comprehensive employment services, retraining facilities, provisions for removal grants and arrangements enabling workers to retain acquired seniority and compensation rights when they change their employment’.Footnote 53
In the meantime, the quest for social harmonisation had been partially sterilised during the EEC negotiations and had lost some of its supporters. The Belgian government, for example, which in the earliest debates had repeatedly affirmed the need of such harmonisation, progressively abandoned this position to focus its attention on the advantages of trade liberalisation and on activating an adaptation and an investment fund for the new Community. The Ohlin Report's theoretical arguments were therefore used by the opponents of social harmonisation essentially against the French government, which by mid-1956 was isolated in its request.Footnote 54
The final version of the EEC Treaty fully embraced the report's underlying philosophy, with its reliance on market forces for growth and wealth creation and its limited social dimension, a mere support for economic integration.Footnote 55 This explains why many academics consider the Ohlin Report to be a cornerstone of European construction: in André Sapir's words, ‘one of the most influential pieces of economic work on the subject of international differences in labour standards and international trade in the European context’.Footnote 56
It was certainly a formula that was destined to last. On its basis, the EEC worked until the early 1970s, de facto contributing to promote the strong economic growth of the so-called Golden Age. Even when, after the oil shock of 1973, the economy slowed down, the Community's recipes continued to be inspired by the same model, focusing on labour mobility, the strengthening of social dialogue and the development of education and vocational training. This influence actually increased further during the following decades, when the drive towards the single market and the monetary union was accompanied by the same traditional ingredients, as in the case of the European Union's so-called Lisbon Strategy, launched in March 2000, or the ‘Europe 2020’ programme.Footnote 57
Conclusion
In his book Beyond the Nation-State, published in 1964, Ernst Haas identified four phases in the ILO's history. In his view each phase, characterised by a different international background and political balance within the organisation, produced a different ‘organisational ideology’, an expression that Haas used to describe the ILO's overarching goal beyond its formal objectives and purposes. This ideology progressively shifted from the ‘universal social and industrial democracy’ of Thomas's years, to the international Keynesianism of the 1930s, to the defence of individual socio-economic rights proclaimed in Philadelphia and, finally, to the ‘productivity drive’ of the Cold War years.Footnote 58
Haas's interpretation aptly points out the importance of taking into account the changing internal and external environment when attempting to understand the ILO's evolving profile and action, but it goes too far in stressing discontinuities in its ideology. Despite its eventful history, the ILO's overall orientation remained surprisingly stable. Social stability was from the beginning and remained one of its fundamental goals. This was a consequence of the ILO's tripartite structure and of the principle of social dialogue it embodied, which pushed the organisation to search for social cooperation and consensual solutions. This structure and orientation also determined the ILO's continuous support for trade liberalisation and European economic integration. By triggering rationalisation and growth these policies would supposedly create favourable conditions for social stability. The ILO's ideological history was thus strongly path dependent from the original political choice of tripartitism.
The ILO manpower policy in turn resulted from its ideology, and likewise remained consistent from the interwar to the post-war period. It constantly aimed at developing efficient labour market mechanisms to facilitate professional and geographical mobility and was subjected to limited changes, such as the increasing centrality of vocational training and the development of adaptation mechanisms. Thus, the continuity in the ILO's organisational ideology induced continuity also in labour market policy design.
As we have seen, it is by virtue of this continuity that the ILO concretely contributed to shape the labour market policies that accompanied the early steps of European economic integration. The extensive experience accumulated on these issues rendered the Geneva organisation an indispensable reference for devising adequate labour market measures to accompany the progressive economic opening, and led the major bodies of European cooperation – from the OEEC to the ECSC to the EEC – to entrust it with a number of tasks in social and labour matters. The development of vocational training systems, the rules governing free circulation of labour and social security for migrants and the mechanisms for the adaptation of workers were the aspects on which the ILO offered a particularly precious contribution.
But, by promoting the drafting of the Ohlin Report, the Geneva body also influenced the European construction from a more general point of view. First of all, because, by denying the need to accompany the common market with social harmonisation mechanisms, it eased the path towards economic integration, thus achieving a goal that it had always identified as fundamental. Indeed, at least until the 1970s, the common market effectively contributed, as anticipated by the ILO since Thomas's time, to fuel growth and to generate resources for the development of national social policies, thus representing, in the well-known definition by Alan Milward, an ‘external buttress of the welfare state’.Footnote 59 Second, because in this way the ILO took part in outlining aspects that would characterise the European construction for years to come, even to this day, when, after decades of weak growth and systematic dismantling of national social protection systems, the deepening of economic integration continues to be accompanied by a feeble social dimension and by labour market policies focused on mobility and on the adaptability of the workforce.
