Understanding The US Political Crisis - Part 7

Fordist Regulation

Marx describes the way that capitalist accumulation is characterised by periods when lots of new inventions are introduced, which revolutionise production. They bring about a rapid increase in output, and the processing of material that is accompanied by a relative, and possibly even absolute falls in the amount of labour-power employed. On the other hand, it is also characterised by similar periods when the forces of production change only marginally. During these periods, the same kinds of machines tend to be employed, but in larger numbers. Capital expands during these periods by employing more of everything, more fixed capital, more materials, more labour-power.

This kind of periodicity can be mapped against the Long Wave Cycle. But, it has also been taken up by Marxist economists such as Aglietta, Lipietz and Jessop of the Regulation School. In their model, these different periods can be defined as periods of either extensive or intensive accumulation. Intensive accumulation involves the former, and extensive the latter. The different types are called Regimes of Accumulation.

It is also argued that different emphases on the means of surplus value extraction go with these different regimes. Under Extensive Accumulation, there will be a tendency to weigh more heavily on the extraction of Absolute Surplus Value, to reduce wages, increase the length or intensity of the working-day etc. Given that during such periods, labour-power may represent an increasing proportion of cost prices, it is fairly clear why this should be.

Under Intensive Accumulation, capital will be more likely to utilise Relative Surplus Value extraction, and again, as labour-power represents a declining relative share of cost-price during such periods, its clear why this would be. But, also considering Engels 1892 Preface to “The Condition Of The Working Class”, quoted in Part 6, it is also apparent, why, especially during a period of boom, “the greater the loss and inconvenience caused by every conflict between master and men;” was the reason “a new spirit came over the masters, especially the large ones, which taught them to avoid unnecessary squabbles...”

The classic manifestation of this is Fordism.

“Fordism can be described as involving intensive accumulation and monopolistic regulation. It can be analysed further as involving a specific labour process (mass-production); a regime of accumulation (economic growth, economies of scale, mass market); and a mode of regulation (the separation of ownership and control, large corporations, the corporate recognition of trade unions, the management of credit to sustain demand, mass consumerism, government intervention in wage policies and Keynesianism). This is an ideal type, which has always combined with non-Fordist sections in practice. Fordism produced crises from: decreasing productivity (unions limit work, and there is a loss of economies of scale); globalization (which makes national management impossible); growing social expenditure (on the welfare state); the end of mass consumption and new diversity.”

Notes On Ash Amin - Post Fordism

In other words, the kind of material conditions that Engels described, become a basis under Fordism for the extension of these principles to a state level, in the form of the modern social-democratic, welfare state. The period when Fordism was at its height, in the post-war, long wave boom, a period of intensive accumulation, is also the period when that welfarist state expanded. In Britain, the Labour Government established the Welfare State, whose principal ideas had been put forward by the Tory Chancellor Neville Chamberlain as far back as 1929, but which were formulated in the Report of Liberal, William Beveridge. When Labour lost the 1951 election to Churchill and the Tories, they continued the policies of Welfarism, and Keynesian intervention, throughout the period of the boom. The fact that Tory policies in this regard to economic policy were hardly distinguishable from those of Labour was reflected in the coining of the term “Buttskellism”, referring to the Tory Chancellor R.A. Butler, and the Labour leader Hugh Gaitskell. In fact, analysis shows that 90% of legislation put forward by outgoing governments, during the 1950's through to the 1970's, was adopted and carried forward by their opponents when they came into office.

The same was true in the US. Democrat President Truman carried forward the policies of Roosevelt, but incoming Republican President Eisenhower, not only carried forward New Deal Agencies, but also expanded Social Security. That was extended further in the 1960's by LBJ in his Great Society programme.

The ending of the Long Wave Boom in 1974, brought about new conditions. In place of intensive accumulation, a greater emphasis now fell upon extensive accumulation. That led to an intensification of sectional struggles, as workers attempted to defend wages and conditions. Increasingly, throughout the 1970's it became clear that Keynesian fiscal intervention, which had worked in the boom conditions of the 1950's and 60's, could not solve the problems of Capitalism during a period of Long Wave downturn. Its not that Keynesianism was ditched, the size of the State continued to increase under both Thatcher and Reagan, but the emphasis switched away from the use of fiscal to monetary levers. First, Neo-Austrian measures were introduced to reign in money supply, most notably under Paul Volcker in the US, who raised the Federal Funds Rate in 1981 to 20%! In the late 1980's, when workers had been defeated in both countries, the state in both the US and UK, switched to a Friedmanite policy of monetary expansion to stimulate growth, and boost profits.

During the same period, the strength of big industrial capital in both countries waned. In Britain, in 1976, Industry accounted for 40% of social capital, whilst services accounted for 57%. Today, industry accounts for just 18%, whereas Services account for 81%. A similar trajectory occurred in the US. Today, the figures for the US are, Industry 19% and services 80%. A large part of Services is accounted for by the growth of Financial Services, and as will be shown in the next part that has a significant impact on the political developments in both countries.

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