"A system of co-operation between workers and management cannot survive, therefore, unless management effectively guarantees its employees job security, by which I mean employment for life. It is on this condition alone that there can be social integration on the Japanese model within the enterprise. Yet large Japanese firms are only able to guarantee their employees jobs for life by subcontracting out the manufacturing and services which they, as parent companies, have no vital interest in undertaking themselves, to a vast network of satellite companies. These subcontracting enterprises cushion the parent company from fluctuations in economic conditions: they employ and dismiss their workers according to changes in demand, and the fact that their employees often have no union or social protection whatsoever means this can be accomplished with great speed. Job security in the parent companies is matched by unstable employment and social insecurity throughout the rest of the economy. Employment for life and social integration are privileges reserved for an elite (about 25 per cent of Japanese employees in 1987, a figure which is decreasing markedly as older workers are encouraged to retire early and are not replaced). They are only compatible with economic rationality within the framework of a dual society. This social division (or 'dualization') has been the . dominant characteristic of all the industrialized societies since the mid seventies."