In the immediate post-war period, and into the 1960's, the rapid accumulation of capital meant that, even as this technologically driven rise in productivity facilitated rising output, it still required additional labour. Rising productivity meant rising relative surplus value, and the additions to the workforce meant a larger social working-day, and so a greater mass of absolute surplus value. In the 1950's, married women were recruited into the workforce; immigration was encouraged, and the post-war baby boom brought additional workers into the workforce in the 1960's. Yet, unemployment remained very low, at around 1-2%. The workers gained improvements in their living standards, because their money wages bought them both more of the necessaries they traditionally consumed, as well as a range of newly available consumer products. In this respect, the accumulation of capital they made possible raised productivity, which facilitated the rise in living standards. But, so long as productivity rises faster than this rise in living standards, profits rise faster. The portion of both wages and profits rises, but the proportion of profits rises, whilst the proportion of wages falls. In other words, the amount of unpaid labour rises, whilst the paid labour buys a greater volume and range of use values. Fordism could perpetuate this situation for so long as the supply of additional labour (absolute surplus value), together with the creation of a relative surplus population (relative surplus value), via labour-saving technology, rises faster than the demand for labour-power.
By the 1960's, that situation starts to come to an end. The demand for labour-power begins to exceed the supply. Wages rose, squeezing profits, as described by Glyn and Sutcliffe et al. By the mid 1970's, this had reached the point whereby capital was overproduced. Any expansion of production meant that the additional demand for labour-power pushed up wages, reducing profit margins to levels whereby any variation in market conditions could lead to losses. The basic conditions for Fordism and social-democracy had been undermined. In industry, prolonged distributional struggles broke out, and in society at large, progressive social-democratic forces gave way to conservative social-democratic forces. The domination of the economy by large-scale, socialised industrial capital, meant that states could not reverse the overall social-democratic nature of the state, without undermining the fortunes of the state itself, but it meant that the progressive forward logic of social-democracy was halted. In other words, the drive to prioritise the needs of the productive-capital, via an extension of industrial democracy, and greater regulation and planning at a macro-economic level was halted. It was the interests of shareholders, and bondholders, i.e. of the dominant section of the ruling class, which held nearly all of its wealth in these forms, which were prioritised, and which created the conditions for the subsequent asset price bubbles. And, by stopping the forward march of history, it thereby also created the conditions for the forces of reaction, of nationalism and the interests of the less mature forms of capital, to once again step forward, a process that reached its peak with Brexit, and the election of Trump.
One rational solution to the conditions that arose, in the mid 1970's, was to extend the elements of social-democracy that had developed out of the needs of large-scale, socialised capital. In other words, it would have involved an extension of measures of planning and regulation, including a further extension and integration of all those aspects of social-democracy, at an international level, developed after WWII, at Bretton Woods, etc., with the creation of the IMF, World Bank, GATT/WTO etc., as well as with its more particular manifestations, such as the creation of the European Coal and Steel Community, and other such bodies, leading up to the creation of the EU, along with similar developments elsewhere in the globe. That reflected particularly in the creation of the EU, the need to go beyond the limitations imposed by the nation state.
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