Conservative Regimes and the Transition to Post-Fordism: The cases of Britain and West Germany

This on-line version is the pre-copyedited, preprint version. The published version can be found here:
‘Neo-Conservative regimes and the transition to Post-Fordism’, in M. Gottdiener and N. Komninos, ed., Capitalist Development and Crisis Theory Accumulation, Regulation, and Spatial Restructuring, Basingstoke: Macmillan, 261-299, 1989.
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This paper deals with the current transition from Fordism to post-Fordism in Britain and West Germany under the contrasting conservative regimes led by Mrs Thatcher and Herr Kohl.[2] It addresses the question why the transition is taking the form of Thatcherism in Great Britain and why no comparable regime (let alone one dignified with the label of Kohlism) has developed in West Germany. An explanation is sought in two related sets of factors: (a) the modes of regulation and growth associated with the development of Fordism in these societies and (b) the nature of their state and political systems. For it is these features that have shaped the crisis of Fordism in each country and conditioned the form of transition to a post-Fordist accumulation regime.

This explanation is certainly not exhaustive (nor is it intended to be) and other aspects are also relevant. But a ‘regulationist’ approach is fruitful in defining the nature of these regimes. The paper has three parts: first, a very brief account of Fordism, its crisis, and the nature of post-Fordism; second, an account of the forms assumed by Fordism in Britain and Germany; and, third, an account of their different responses to the crisis of Fordism with special reference to the role of the Thatcher and Kohl governments. It concludes with some more general remarks on the regulation approach.

I. Regimes of Accumulation

In analyzing postwar British and West German political economy, this paper develops the French ‘regulationist’ approach that emerged in the 1970s (for reviews of regulation theory, see: Boyer 1986; Jessop 1988a-b; Noel 1987; de Vroey 1984). Emerging in part out of Althusserian structuralism but intending to overcome the latter’s assumption that structures somehow maintain themselves quasi-automatically without effective social agency and without significant transformations, regulation theorists replaced the notion of ‘reproduction’ with that of ‘regulation’. They asked how capitalism could survive even though the capital relation itself inevitably generated antagonisms and crises that made continuing accumulation improbable. They found an answer in specific institutional forms, societal norms, and patterns of strategic conduct that both expressed and regulated these conflicts until the inevitable tensions and divergencies among these various regulatory forms reached crisis point (Lipietz 1987: 3-4).

The key concepts offered by the French regulationists are ‘regime of accumulation’, ‘mode of growth’, and ‘mode of regulation’ (e.g., Aglietta 1979; Boyer 1986a; Lipietz 1985a). Accumulation regimes and modes of growth are concepts located at different levels of abstraction but their empirical referents are closely related. An accumulation regime comprises a specific pattern of production and consumption considered in abstraction from the existence of specific national economies. A national mode of growth comprises the pattern of production and consumption of a national economy considered in terms of its role in the international division of labour. Relatively stable regimes of accumulation and modes of growth involve a contingent, historically constituted, and societally reproduced correspondence between patterns of production and consumption. Their basic features include: the various conditions governing the use of labour power, the features of the wage relation, the dynamic of investment and forms of competition, and the monetary and credit system (Mazier et al., 1985: 9). A mode of regulation comprises ‘the totality of institutional forms, networks, and norms (explicit or implicit), which together secure the compatibility of typical modes of conduct in the context of an accumulation regime, corresponding as much to the changing balance of social relations as to their more general conflictual properties’ (Lipietz 1985: 121; cf. Bowles and Edwardes on ‘social structures of accumulation’, 1985). The nature of the state and government policy are among the most important aspects of a mode of regulation. They are also increasingly significant as elements in international competition as governments seek to promote the flexibility and adaptability of whole societies (Dauderstadt 1983: 15).

Fordism

Fordism can be analyzed as an accumulation regime, a mode of growth, and a mode of regulation. In all three cases it involves a typical relation between mass production and mass consumption but Fordism needs to be specified more fully as one moves from a regime of accumulation through modes of growth to modes of social regulation. Recent studies of Fordism differ along two main dimensions. The first concerns the relative weight given to the nature of the labour process as opposed to the overall social structure of accumulation or pattern of societalization (Vergesellschaftung). Both aspects are important and each conditions the other. Societalization patterns cannot be derived from the labour process alone; and the latter is always overdetermined by various social and political factors. The second dimension concerns the relative weight accorded to national economies and modes of regulation as opposed to the international aspects of Fordist expansion (such as US hegemony, complementarities among different national modes of growth, and the nature of peripheral Fordism). A thorough account would consider Fordism in all these respects (see Jessop 1988b). Since this paper is concerned with the radical break instituted by Thatcherism and the policy correction engineered through the West German Wende (turn), however, we will focus on the social and political aspects of two national modes of growth and regulation. This means concentrating on the national circuit of production-wages-consumption in its relation to the international economy and national modes of regulation.

Twelve general features of Fordism in advanced capitalist societies[3] can be identified:

  1. the development of mass production – especially in the consumer goods sector but also in some branches of capital goods – based on a dedicated, serial production process (often coupled with the mechanization of transfer activities through such techniques as the moving assembly-line or the continuous flow production process);
  2. the predominant use of machine-paced, semi-skilled labour rather than skilled craft labour and non-Taylorized unskilled labour; managerial concern with the scientific organization of the collective labour process in an enterprise rather than with the fragmented labour performed by the de-skilled individual worker (i.e., the dominance of Fordism over Taylorism);
  3. the role of the wage (as opposed to domestic labour, subsistence agriculture, or labour migration) as the principal mechanism and/or reference point in securing the reproduction of labour-power;
  4. this applies not only to industrial wage-labour but also to primary activities (capitalist agriculture) and tertiary activities (commerce, trade, finance, management, etc).;
  5. the consolidation of collective bargaining over wage rates (tied to inflation and/or to productivity increases) and working time, with the result that firms were better able to forecast wage costs and consumer demand;
  6. the predominance of the mass consumption of standardized, mass-produced commodities and/or of the collective consumption of goods and services provided by the state as opposed to the consumption of non-standardized, typically hand-made or artisan-produced commodities and/or home-produced goods and services;
  7. the role of marginal product differentiation (e.g., annual model changes), inbuilt obsolescence, and advertising to encourage mass demand and the growing role of consumer credit facilities in financing mass consumption;
  8. the central role of mass consumption in integrating the circuit of capital so that the expansion of the capital and wage goods sectors are mutually reinforcing;
  9. monopolistic regulation based on rigid ‘mark-up’ pricing rather than liberal, flexi-price product markets – coupled with movement out of obsolescent product lines into new production techniques and products;
  10. the central role of private and public credit in validating full employment levels of demand: private credit issued by the banking system underwrites private consumption as well as fixed and circulating capital whilst state credit is mobilized for demand management purposes as well as public investment;
  11. the increased importance of the state in securing the conditions for capital accumulation and the reproduction of wage-labour by adapting markets to the rigidities of Fordist mass production (only partially compensated through such forms of micro-flexibility as de-stocking, labour hoarding, or subcontracting) through management of the wage relation, labour market policies, and demand management to smooth out fluctuations and to secure stable, calculable growth and thereby to encourage investment;
  12. the development of the welfare state as a mechanism to establish a minimum social wage, to generalize mass consumption norms, and to coordinate the capital and consumer goods sectors.

Several studies from different positions in the regulation school suggest that Fordist accumulation depends on specific but contingent balances among different moments in the circuit of capital. For example, Lipietz (1986) presents a value-theoretical analysis; Boyer and Coriat (1986) focus on the Fordist wage relation; and Hirsch and Roth (1986) examine social and political blockages in the mobilization of counter-tendencies to the tendency of the rate of profit to fall. In general we can say that continuing Fordist growth depends, firstly, on securing a balanced distribution of revenue between profits and wages so that the balance between mass production and mass consumption can be maintained; and, secondly, on preventing any tendency for the capital intensity of Fordist production techniques to increase from being reflected in a fall in the overall rate of profit – typically because productivity has failed to keep pace with that increase. This means, as Boyer and Coriat have shown, that wage indexing must be neither too high nor too low relative to increasing returns to scale, the propensity to consume, and the relation between investment and demand. If it is too high, profits and investment will fall; if it is too low, the mass demand to spur investment will be too weak (Boyer and Coriat 1986; Bowles and Edwardes 1985; Przeworski 1985). Thus Fordism thrives best where firms engage in oligopolistic pricing (which finances investment and wages are tied to productivity below the growing returns to scale from new investment so that mass consumption can also expand (Boyer and Coriat 1986; Hurtienne 1986).

The Crisis of Fordism

The crisis of Fordism is evident in all twelve areas noted above and has various economic, political, and social causes. The more one moves from the labour processes to broader aspects of the mode of regulation, the more do political and social factors become central in explaining the forms assumed by the crisis of Fordism. We will deal with these factors in relation to the specific modes of regulation and growth in Britain and West Germany (see below) and will focus here on two sets of limits grounded in the labour process proper.

Firstly, there were technical limits to the introduction of rigid fixed capital and the realization of its attendant economies of scale. Not all branches of production are amenable to Taylorism and Fordism and the scope for further productivity increases became relatively exhausted once these techniques had been generalized as far as possible. Moreover, once the postwar boom slackened, the limited forms of micro-flexibility even when coupled with demand management proved inadequate. Political commitment to full employment also meant that ‘reserve army’ effects were limited to secondary markets and this delayed or halted the recovery of profits during downturns (Boyer and Coriat 1986). In addition, with the growing internationalization of production as well as capital flows and trade, it became more and more difficult to close the virtuous circuit of mass production and mass consumption within national economies. With the onset of stagflationary tendencies and the global crisis of the postwar capitalist regime, international competition led to austerity and counter-inflationary strategies that broke or braked the old mass production-consumption cycles.

Secondly, there has been growing working class resistance to the Taylorist and Fordist production process. This has also spread to other economic sectors. There was growing absenteeism and labour turnover, a worsening rate of manufacturing defects, more frequent but often localized strikes with fundamental repercussions for the overall continuity of production, and the growth of disputes and strikes over issues other than the abstract, universal categories of money and time (Albers et al., 1976; Crouch and Pizzorno 1978; Mazier et al., 1985, pp 32-33; Hirsch 1985).

These problems have prompted a search for new forms of production that could overcome the rigidities of Taylorism and Fordism and also counteract working class resistance. These responses were initially located within the Fordist pattern (e.g., job enrichment or bureaucratic controls) But post-Fordist responses have latterly become more important with the move to automation and robotization and, accompanying this, attempts to recompose the labour force (Hirsch 1985a; Kundig 1984; Mazier et al., 1985, p 294; Morville 1985; Roobeek 1986)

Post-Fordism

The crisis of Fordism involves more than the forces of production or profitability in any simple sense. Much more fundamental is capital’s inability to create a new regime of accumulation with appropriate institutional forms, social relations, and balance of social forces. Only if a new ‘historic bloc’ (to use Gramsci’s term for a socially constructed correspondence between base and superstructure) can be consolidated will capital accumulation (using both new and old technologies experience a further long wave of expansion. Thus the novelty of post-Fordism consists not only in the increasing flexibility of economic relations but also in the changing role of the state and the more general reorganization of social relations (cf. Boyer and Coriat 1986; Hirsch and Roth 1986; Jessop 1983, 1986b; Mazier et al., 1985; Lipietz 1985; Regini 1986).

The details of the ‘post-Fordist’ system are still unclear and it will obviously vary across countries as Fordism did before it. It will emerge from several distinct processes combined in different ways in different social formations: technological change, decentralization of production, restructuring of declining industries, the expansion of the advanced tertiary sector serving industry (Regini 1986: 60). Although it will inherit some features from Fordism, production will be reorganized and the labour force recomposed.

Post-Fordism involves a basic shift towards flexible specialization in previously rigidly standardized production processes and/or in the field of small-batch production that had previously been resistant to Fordist practices. It permits batch production of multiple products through flexible manufacturing systems. It is a useful means for vanguard firms to adapt to slower growth by product differentiation and market segmentation in competitive but stagnant markets. There is also a new trend towards flexible automation involving not only new processes but also new products. Both forms of flexibilization are strongly associated with the expanding role of electronics, the micro-processor, and information technology in the production of goods and services.

Flexibilization is also associated with changes in corporate organization and occupational structures. In particular there is an increased polarization of the work-force into a full-time skilled core and an unskilled periphery often engaged only part-time. The unskilled periphery is often subject to new forms of Taylorised labour, more mobile and flexible, more fragmented and individualized (Hirsch and Roth 1986). The full-time core often has developed mental and/or supervisory roles and must in all cases be flexible in terms of skills. This polarization of the work-force contrasts with the homogenizing tendencies involved in the rise of the affluent mass worker under Fordism. It extends beyond areas where flexible manufacturing is established and is also apparent in the tertiary or service sector. Here the introduction of more flexible word- and data-processing machinery has been accompanied by more flexible work practices including work from home as well as flexible part-time and shift-work. This also has repercussions for the role of trade unions, which can no longer be organized around the dominant position of the semi-skilled worker in Fordist mass production industries (Accornero 1986).

It is unlikely that flexible specialization (as opposed to flexible automation) will create additional demand or secure a return to full employment. Indeed, whereas Fordism facilitated a policy of full employment and welfare rights to secure demand and thereby created the basis for a class compromise between capital and labour (cf. Przeworski 1985), the new post-Fordist regime poses serious problems for full employment and the class alliances that this entails. Clearly this has major implications for the role of unions and the state as well as for new forms of class alliance.

The polarization and segmentation of the work force need not be inconsistent with a continued role for trade unions at plant and enterprise level. But factors associated with post-Fordism could weaken the role of the union movement at the national level and, especially, as a social partner in a full employment alliance. In particular we should note lower levels of union density, the decentralization and fragmentation of national union organizations, and the emergence of a polarized labour force as compared with the rise of the mass worker under Fordism. In turn this will be tied to a reduced role for the state in securing full employment (although its role in managing the wage relation will be maintained). Indeed Mazier et al., suggest that the more important problem for the state will be mastering the ensemble of social expenditures (health, education, etc. which increase the cost of the social wage. They fear that introducing new technologies would enhance productivity without reducing unemployment or growing social costs (Mazier et al., 1985: 297). Indeed one of the problems in post-Fordism will be managing the relations between ‘work’ and ‘non-work’ and the state will be increasingly involved in regulating the formal and informal labour markets and entry and exit from employment (Offe 1985).

The Role of the State in the Transition

Corporate, managerial, and political strategies in the transition to post-Fordism are oriented to securing greater flexibility through changes in technology, production, industrial relations, labour markets, taxation regimes, social security systems, the educational system, and other key sites for economic and societal restructuring. In addition governments must manage the economic and social costs of transition as well as the political repercussions of the crisis of Fordism. Just as the emergence of Fordism involved more than the diffusion of the American model and produced different national Fordisms, so will the transition witness specific national roads from a given Fordist regime to a post-Fordist mode of regulation. Nothing guarantees that a given national economy will thereby maintain its role or its ranking in the global hierarchy entailed in the changing international division of labour. For some economies are subject to a logic of adhesion, others to a logic of eviction.

States are adopting various strategies in the transition to post-Fordism and it would be wrong to treat them as coherent or unchanging. Even during periods of relative economic and social stability, the state’s relative unity is always problematic; and there are also many well-known limits to the state’s capacities to steer economic and social change. There is much improvisation and trial-and-error involved in the current transition as well as a continuing need to adjust policies to the changing balance of forces and new structural and/or conjunctural problems. But we can still distinguish three basic, ideal-typical strategic lines: neo-liberal, neo-corporatist, and neo-statist. One or other line tends to be dominant in specific countries and other strategic elements will be aligned to it.

Neo-liberalism is primarily concerned to promote a market-guided transition to post-Fordism. For the public sector, it involves a mixture of privatization, liberalization, and adopting commercial criteria in the residual state sector; for the private sector, it involves deregulation and a new legal and political framework (or Ordnungspolitik) to provide passive support for market solutions. In particular neo-liberalism leads to government promotion of ‘hire-and-fire’, flexi-time, and flexi-wage labour markets; the growth of tax expenditures steered by private initiatives based on fiscal subsidies for favoured economic activities; and the reorientation of state activities to the needs of the private sector. Coupled with this is a rejection of social partnership arrangements in favour of managerial prerogatives, market forces, and a strong state. It involves a cosmopolitan approach that welcomes internationalization even if this conflicts with the creation and/or maintenance of a coherent national industrial core that can provide the basis for international competitiveness. Although it is sometimes said to involve a return to the free market and the liberal state, the neo-liberal strategy not only involves strong state action during the transition to restructure markets but will also reinforce monopolistic regulation and requires continuing state intervention once the transition is completed.

Neo-corporatism, along with corporatism, relies on the ex ante concertation of the economic decisions and activities of private economic agents oriented to their own economic interests. But this strategy also involves significant differences from the pattern of Fordist corporatism: the latter may not permit a smooth transition to neo-corporatism nor need a neo-corporatist road be built on corporatist foundations. For neo-corporatist arrangements must reflect the expansion of relevant interests in policy communities as well as the increasing heterogeneity of the labour force and labour markets. In particular neo-corporatist concertation could extend beyond the organizations of capital and labour to include other policy communities representing distinct functional systems (e.g., science, health, education, policing); and policy implementation could be made more flexible through the extension of ‘regulated self-regulation’ and private interest government (cf. Schmitter and Streeck 1983). In the field of industrial and incomes policies, corporatist arrangements could become more selective (e.g. excluding some previously entrenched industrial interests and more peripheral or marginal workers, integrating some ‘sunrise’ interests and giving more weight to core workers); and, reflecting the more flexible forms of the post-Fordist economy, the centre of corporatist gravity will shift to the micro-level away from macro-economic concertation. The state is involved in neo-corporatist strategies as in the neo-liberal and neo-statist approaches. But its actions are more concerned to back or support the decisions reached through corporatist negotiation than to pursue neo-liberal disengagement and/or to resort to active state initiatives along neo-statist lines; and compliance with state measures is either voluntary and/or depends on actions taken by self-regulating corporatist organizations endowed with public status.

Neo-statism is primarily concerned to promote a state-guided approach to economic reorganization through intervention from outside and above market mechanisms. There is little or no consultation with organized economic interests and intervention is based on the state’s powers of imperium (imperative coordination) and/or dominium (its own economic resources and/or activities as one economic actor among others) (on imperium and dominium, see Daintith 1985). It involves a mixture of decommodification, state-sponsored flexibility, and state activities concerned to secure the dynamic efficiency of an industrial core. In particular this is associated with an active structural policy in which the state sets strategic targets for flexible accumulation. It pursues an active labour market policy to re-skill the labour force and ensure a flexi-skill rather than flexi-price labour market; it intervenes directly and openly to restructure declining industries and to promote sunrise sectors; and it engages in societal guidance strategies to promote specific objectives through concerted action within varied policy communities that embrace public, mixed, and private interests. These activities aim to move the economy up the technological hierarchy by maintaining a coherent and competitive industrial core and pursuing a strategy of flexible specialization in specific high technology sectors. The state must become flexible because of the openness of post-Fordist economies and the rapid changes involved in flexible accumulation.

Elements of these strategies can be combined but an effective transition presupposes the dominance of one or other strategic line. Strategies cannot be chosen at will but have quite specific conditions of existence both in the industrial and political legacies of different societies and in the current balance of forces. Success also depends on the complementarities that exist among different national strategies within the overall capitalist order. With these comments in mind, we now turn to the form taken by the transition in Britain and West Germany.

II. Fordism in Britain and Germany

These general models of Fordism and post-Fordism have obvious limitations in comparing different social formations. For each national mode of growth has its own specific features deriving from its own mix of Fordist and non-Fordist elements and its particular industrial and political profiles. This is why the conceptual instrumentarium of the regulation school moves from abstract notions such as regulation to more concrete concepts such as national modes of growth (Boyer 1986a). Each national economy also has its own specific mode of insertion into the international economic system and the forms of crisis and this is reflected in its tendency to ascend or fall in the hierarchy of nations (Mistral 1986). Britain and West Germany clearly differ in both respects. The nature of Fordism in each society is different and so are their insertions into the international economy.[4] This has affected the forms of crisis and the forms of transition to post-Fordism.

Flawed Fordism in Britain

Fordism first struck firm roots in Britain in the 1930s. But the economic expansion and prosperity that this brought to some regions only became general in the years of the postwar boom. The extension of the Fordism wage relation was not so much rooted in the expansion of an auto-centric mass production system as in two other factors: the postwar settlement (1942-48)[5] with its precocious commitment to full employment and a universal welfare system and the favourable economic conditions created by an advantageous shift in the terms of trade with less developed economies and the sellers’ market created by economic growth in the other advanced economies. The Keynesian welfare state (hereafter ‘KWS’ system) provided the political shell and the organizing myth in and through which a Fordist regime of sorts extended its hold over most parts of British society.

The extension of Fordism in Britain was flawed at all three nodal points in the virtuous circle of mass production-high wages-mass consumption. Productivity did not increase to the same extent as in other countries; the Fordist wage relation was defective; and mass consumption was financed through demand management and the social wage as well as productivity increases. The relative retardation of Fordist mass production was reflected not only in lower levels of productive investment but also in two other aspects of investment. It was more often ‘add-on’ in nature, i.e., concerned to compensate for deficiencies in existing techniques and processes of production rather than to introduce entirely new processes and products. And British firms failed to reach the same levels of productivity from similar production processes, machinery, etc., which were obtained in other advanced capitalist economies. This failure becomes even clearer if one discounts the impact of the higher levels of productivity and investment that were obtained by incoming foreign concerns and/or from British firms setting up on greenfield sites.[6] Its long-term impact was evident in recurrent balance of payments problems tied to poor productivity, inflation, and progressive de-industrialization.

The voluntaristic collective bargaining system also contributed to the problems of Fordism in Britain. Trade unions were organized on overlapping craft, industrial, and general lines and this resulted at plant level in multi-unionism; employers’ associations at branch or industry level were weak, peak organizations lacked power, and there is still no peak organization for business as a whole. In the private sector bargaining was decentralized, fragmented, informal, ad hoc, and disorderly; its scope and outcome depended far more on the prevailing balance of forces between ‘the two sides of industry’ than on any institutionalized procedures and rules of engagement. There was only a long-term and imperfect link between productivity increases and real wages; and labour market conditions had little impact on collective bargaining. In the short term, stagflationary tendencies became more marked. This was not reversed by increasing state intervention through wages policies (as often concerned to support the exchange rate as to further industrial policy) nor growing centralization in the sixties. Instead the combination of relative decline and global crisis provoked greater conflict among all three social partners from 1969 onwards and this led to repeated attempts to reform industrial relations.

Thirdly, despite the failure to consolidate mass production, the British state was committed, through the postwar settlement and the continuing bipartisan consensus about jobs for all, to validating full employment levels of demand. Industry’s failure to complete a thorough-going Fordist transformation in relevant sectors was therefore reflected in a structural propensity to compensate for deficiencies in domestic production through the import of mass consumer durables. This was not compensated by the export of capital goods – indeed increasing import penetration and export failure were also evident here. An expanding welfare state further aggravated these problems through an increase in public sector employment and the growth of the social wage – both of which served to generalize Fordist mass consumption norms. Overall the economy was affected by rising unit wage costs, rising imports of mass consumer goods, expanding social expenditure, and an emergent fiscal crisis.

This flawed Fordism was reinforced by the manner in which Britain was inserted into the international economy. British firms tended to look towards imperial markets in Africa and Asia and/or to the more slowly developing and fragmented markets overseas (Latin America) at a time when fast growth and integrated mass markets were found in North America, Japan, and Western Europe. This reinforced the traditional industrial profile of British firms and did little to encourage modernization. These problems were aggravated by the dominance of financial capital within the market hierarchy in Britain and by governments’ concern to maintain the reserve and transaction roles of sterling even when this meant deflation. Modernization and growth policies were blocked by this external dependence. Conversely the weakness of Fordism led to payments problems that affected the City’s role and at one time seemed destined to restrict it to the overseas sterling area. The result was a gradual descent down the international hierarchy.

The crises that have unfolded over the last twenty years in the British political economy involve more than the economic and political forms of the Keynesian welfare state. They are rooted in the failure even to complete the transition to Fordism in key respects and the emerging crisis of Fordism on a world scale. In particular this flawed Fordism has had significant effects both during the postwar boom and during its collapse. Firstly, because the boom years were mistakenly identified with the Keynesian welfare state system, efforts were made to shore this ‘KWS’ system up through corporatist bargaining over prices, incomes, and productivity and through eleventh hour, state-sponsored Fordist modernization aimed at securing economies of scale through mergers, more stable growth through indicative planning, and re-industrialization through investment subsidies. But the corporatist strategies lacked a continuous tradition of social partnership instituted before the economic crisis,[7] a corporatist social base in well organized industrial unions and strong business associations, and corporatist structural supports. Likewise state intervention was attempted without first constructing an interventionist state with the strategic capacities to define, coordinate, and implement a coherent industrial policy (on this, see: Jessop 1980). Industrial policy for the purposes of Fordist modernization was too often confused with job preservation and/or regional policy and too often subordinated to exchange rate, fiscal, and electoral priorities.

And, secondly, the flawed character of British Fordism aggravated the impact of the second oil shock and the deflationary policies pursued by the Thatcher government, leading to a rapid process of de-industrialization and import penetration. This was especially strong during 1980-81 when government monetary policies, petro-currency status for sterling, and deflation put a severe squeeze on domestic manufacturing. But mentioning Thatcherism takes the present story ahead of itself and we must first deal with Fordism in West Germany.

Export-Oriented Fordism in Germany

Fordism in West Germany has also assumed a specific form. This can only be understood by considering how its economic, social, and political systems were reconstructed after 1945 and how it was inserted into the international economy during the 1950s. Whereas Britain survived the war undefeated and its organizational and institutional structures remained much the same, the occupying powers led by the USA presided[8] over the reconstruction of West Germany’s systems of industrial relations, unions, parties, governance, and education. In addition the heavy industrial base that the future Federal Republic inherited after the division of Germany could only operate at full capacity if it found markets abroad.

Thus the German postwar settlement was quite different from that in Britain and it was consolidated somewhat later (1949-52). The labour movement secured co-determination and worker participation but was also obliged to work within the limits of a strong market rationality embodied in the social market economy (soziale Marktwirtschaft). This involved the dominance of private sector capital, a key coordinating role for banking capital, only limited direct and open state intervention, and a welfare state organized along corporatist rather than liberal lines. The distribution of powers between federal and regional (Land) government and the legally entrenched autonomy of the central bank (Bundesbank) made it difficult for the federal state to engage in dirigisme and/or demand management[9]; but high levels of nominal taxation and access to Marshall Aid (together with counterpart funds did enable the federal state to discriminate among different economic activities through selective tax concessions and subsidies. The Erhard government encouraged investment, exports, and capital formation in specific industries and, despite rhetoric to the contrary, penalized consumption and important (Abelshauser 1982: 49-51; Markovits and Allen 1984: 91-102; Deubner 1984: 519-23). This pattern of massive tax concessions and subsidies has continued to the present (Webber 1986: 25-8).

The German postwar settlement also gave a central role to the unions and employers’ organizations in managing the wage relation. The industrial relations system was marked by a strong juridification, well organized social partners (with a system of unitary industrial unions and highly organized employers’ bodies[10] at both regional and national level), and commitment to wage bargaining. Protected from state interference through the legal principle of Tarifautonomie, unions and employers met each other on two levels. Whereas unions bargained over wages and hours at industry and regional levels, works councils (Betriebsräte) negotiated over conditions at plant level. In bargaining the social partners take account of conjunctural factors (especially export markets as well as past productivity gains (Hager 1980: 6; Markovits 1986: 416-17; Streeck 1986: 16).

The postwar expansion of German industry was marked less by mass production of consumer durables than by an export-oriented capital goods sector.[11] The expansion and productivity of this key sector depended less on Fordist economies of scale and the semi-skilled labour of the Fordist ‘mass worker’ than on technological rents and the highly skilled labour of Facharbeiter. Mass consumer durables (e.g. cars) penetrated West Germany more slowly than in other big West European countries and were important only from the mid-sixties onwards (Deubner 1984: 510). Likewise the consumer goods sector has lost out from internationalization of the West German economy and has suffered from rapid import penetration (Deubner 1984: 512). Initially sustained by the clear undervaluation of the DM, this export orientation has since become structurally necessary. For West Germany’s industrial profile and production are oriented towards foreign markets and conversion to serve the home market would be difficult – especially as the capital goods sector is so dominant (Deubner 1984: 506). This sector lies at the centre of a relatively coherent industrial core.

The development of this core is coordinated and, where necessary ‘crisis-managed’, in at least three interrelated ways: through the system of universal banks, which control[12] four-fifths of shares; through formal cartels, cross-investment, interlocking directorates, and subcontracting ties; and, especially from 1966/7, through regional and federal government (Dyson 1986; Esser 1986; Webber 1986). The state system has been active in promoting modernization since the 1960s in order to maintain West Germany’s position at the top of the international hierarchy in civilian capital goods: it has invested in nuclear energy, infrastructure, production technologies, industrial R&D, education, etc. (Hager 1980: 5). From 1966 there has also been a shift towards state sectoral intervention and Keynesianism. More recently Ostpolitik has had important commercial as well as political implications. Finally, although they play no significant coordinating role (except in structural crisis cartels, the trade unions recognize West Germany’s export dependence and generally support the modernization strategies necessary to maintain a high wage export oriented economy (cf. Deubner 1979).

The dominance of the capital goods sector (and export-oriented industries more generally has underpinned a virtuous circle in wage relations. Exports long maintained full employment, monopolistic pricing at home maintained profits, real wages tracked productivity, and the social partners took account of the export market in collective bargaining (Hankel 1980: 29; Boyer 1986a; Markovits 1986).

The crisis in the West German mode of growth took, as might be expected, a form different from that in Britain. The crisis is one of a mature, export-oriented mode of growth rather than of a flawed, uncompetitive Fordism. The first export-led slump came in 1975 but the problems were already apparent earlier in slackening productivity and declining profits. They provoked the social-liberal coalition to develop the Modell Deutschland solution in the early seventies. On the macro-level this sought to secure the international competitiveness of German capital through corporatist arrangements aimed at modernization and austerity. It also sought to block the movement from economic to political crisis by integrating the unions into the crisis-management process (Huebner 1986: 375). The continuing problem has been to maintain export-driven growth despite high wages and a slackening in productivity increases in Fordist sectors (such as cars). A crucial role in this adaptation process has been played by the state at regional and federal level: it has provided finance to modernize old branches and to develop high value-added products for export, promoted international cooperation to stabilize existing export markets and create new ones; financed retraining of the labour force; underwritten the social costs of change; and mobilized union support at plant, branch, regional and national levels to minimize the political costs of modernization (Esser 1986).

Even this strategy was meeting real difficulties by 1981-2. These included union disquiet with the austerity programme and mass unemployment, growing hostility from employers to labour and the state, a deflationary policy on the part of the Bundesbank, blocking moves by the union parties in the upper chamber (Bundesrat), and internal conflict in the coalition and its two member parties (Scharpf 1987). Thus, for the social democratic government, the game was up. The crisis was followed by the Wende (1982-3) and a christian-liberal coalition government committed (at least rhetorically) to ‘more market, less state’ and to renewing the social market economy (Webber 1986: 2). In practice this involved a self-correction of the model, however, without giving up the economic attack on the world market (Huebner 1986: 376). This modification of the prevailing crisis-management strategy contrasts strongly with the British case. In the latter it has been essential to dismantle the obstacles to Fordism and, in an unfavourable economic position, to secure the conditions for post-Fordism. In West Germany the prevailing strategy has been one of adapting the export-oriented model to new conditions and of promoting its self-reorganization through concerted action.

III. The Transition to Post-Fordism

The first responses to the economic crises of the 1970s occurred in the existing modes of growth and regulation. Thus Britain saw corporatist strategies that tried to maintain full employment and social welfare through demand management as well as state-sponsored Fordist modernization based on mergers and industrial reorganization. This failed. The collapse of the Social Contract between the Labour government and the unions in 1976 brought this phase to an end. This was followed by a period of austerity, retrenchment, and social democratic monetarism and, in the wake of the notorious strike-ridden ‘Winter of Discontent’, the election of the first Thatcher government.

The initial West German response also involved attempts to shore up the existing mode of growth and regulation. This was expressed in the Modell Deutschland programme and a more selective form of social partnership; and it was intended to strengthen the economy’s export-orientation. When this strategy began to falter, the SDP-FDP coalition still pursued a stepwise, corrective programme rather than forcing a radical break. An austerity programme was adopted to promote investments, reduce social costs, and promote technological change (Schmidt 1982). However, as mass unemployment continued to rise, the SDP became more isolated and divided. The Wende expressed the exhaustion of the SDP’s approach rather than the collapse of the strategy itself and the christian-liberal coalition has given the model a new inflection rather than trying to overturn it completely. The nature and limits of this continuity will occupy us below.

Thatcherism and Post-Fordism

In the late seventies a consensus gradually emerged about the need to break with economic demand-management and political crisis-avoidance and to embark on radical supply-side economic policies and a more confrontationist politics. Thatcherism gave the growing popular disquiet with the Keynesian welfare state system some direction by placing it at the forefront of the electoral strategy of a major political party. It also provided a focus for an economic and political offensive that emanated from key sectors of the Establishment and was directed against the postwar settlement in general and the gains of organized labour in particular. This was initially presented in terms of reorganizing British society in accordance with the doctrines of the social market economy and the strong state. In the wake of the ‘Winter of Discontent’ (with its postwar strike record), this alliance brought Thatcherism to power.

But the rhetoric of authoritarian populism and the empty formulas of monetarism were unequal to the tasks of effective economic and political management. Thus the first Thatcher government already faced the problem of developing a more coherent strategy to manage the economy and to consolidate its own power. Its approach evolved in a trial-and-error fashion, at different rates in different areas, and with varying degrees of success. Since the mid-eighties it has crystallized around a neo-liberal accumulation strategy based on flexible accumulation and a hegemonic project based on popular capitalism. These are counterposed to the corporatist, Fordist modernization strategy of the ‘sixties and to the social democratic, One Nation welfare state project first established through the postwar settlement. Last year’s election (June l987) has provided striking confirmation of the two nations, popular capitalist project (see Jessop et al., l987) and the third Thatcher government is already embarked on a re-invigorated neo-liberal programme aimed at creating the conditions for post-Fordism.

This involves more than acting as the economic mid-wife to post-Fordism. The social, political and cultural factors that obstruct this transition in Britain must also be tackled. The current strategy operates on a broad front. In particular Thatcher faces the problem that British industry can no longer compete in the old postwar technologies nor, perhaps, become competitive in the new. Many of the structural and institutional obstacles to Fordist modernization are even more acute now and would present any government (and not merely Thatcher’s) with real problems.

The most distinctive feature of Britain’s neo-liberal transition to post-Fordism are its new-found position as the principal site for international (mainly foreign financial institutions). The groundwork for this specialized role was laid in the l960s with the rise of the Eurodollar markets but it has been consolidated under Thatcherism through the abolition of exchange controls, deregulation of financial institutions and services, and favourable tax treatment. Thus Thatcherism has abandoned national capital to global competition and is actively promoting international capital instead of managing the tensions between these fractions as past governments have unsuccessfully attempted (Kastendiek 1987: 26). The City has also gained from a second defining feature of Thatcherite economic strategy: its commitment to privatization as a means of raising revenue and reducing the economic weight of the public sector. Related measures have been adopted to encourage inward investment from multinational enterprises. In addition many schemes have been introduced to promote small business through deregulation, investment schemes, tax breaks, and direct state sponsorship. In all these measures the primary emphasis is on the market-driven character of reorganization. Although state intervention still continues, it is not guided by any overall industrial programme or concern to secure the coherence of Britain’s industrial base.

In other West European countries the unions have been weakened by conjunctural factors and changes in general economic policy. In Britain there has been a sustained political attack on the trade unions as well as direct intervention in their internal affairs as part of a labour exclusion strategy (for details, see Crouch 1986; Hyman 1987). Thus, whereas previous governments had tried to strengthen the position of responsible national leaderships within the unions and in collective bargaining, Thatcherism aims to weaken union leaders and return the unions to their members, confining them to plant level bargaining within the limits of post-Fordist market rationality.

The Thatcher governments have also made efforts to make labour markets more flexible. So far these efforts have been less concerned with re-skilling the labour force than with increasing the flexibility of wages, hours, and working conditions. In addition to industrial relations, employment, and social security legislation, the second Thatcher government gave a central role in this respect to the Manpower Services Commission. In its third term Thatcherism will reinforce these policies through measures to encourage more flexible pay schemes related to regional labour markets, profit-sharing, and wider share ownership.

Thatcherism has also been busy recomposing the welfare state. Despite claims that the welfare state is safe in Conservative hands, it is steadily being reorganized. Whereas the social democratic state was based on citizens’ rights, universal benefits, and a rising standard of financial or material provision, the neo-liberal social security state is discretionary, means-tested, and minimalist. As far as individual welfare is concerned, the government is promoting popular capitalism as a substitute for the nanny state: house-owning, pension-owning, share-owning, and private medical insurance are subsidized through tax relief and are regarded as substitutes for council housing, adequate state pensions, income support, and free health service. Where individuals and families cannot (or will not) make adequate private provision, a basic, no-frills state system will be provided, subject to rationing by queuing and/or involving minimalist, revolving ‘social funds’ administered on a local, discretionary basis. As regards collective provision or collective consumption, increasing emphasis is being placed on adapting public services to the needs of industry. This involves two different policies – private tendering for services under public management and/or growing centralization of services at the expense primarily of local government.

Lastly, the Thatcher governments have been busy reorganizing the state system. The weak capacities of the postwar British state to secure the conditions for Fordist expansion were rooted in the virtual absence of the preconditions for any of the three basic forms of economy-state relationship that have proved compatible with accumulation in different capitalist societies. Owing to the postwar settlement the British state has been unable to adopt a purely liberal role and market forces have been especially prone to distortion by monopolistic practices and the split between the City and industry; also missing have been the organizational preconditions on both sides of industry for corporatism as well as the stable institutional links among corporatist social partners, the natural party (or parties) of government, and the administrative apparatus that are necessary for an effective corporatist policy regime; and the liberal state tradition, for all its ineffectiveness, has meant that the capacities for statist intervention have also been absent. The result of this triple failure has been continual oscillation among liberal, corporatist, and dirigiste strategies as the limits of each have become apparent. This oscillation accelerated under Mr Heath’s Conservative government 1970-74 (with its celebrated U-turn away from its liberal experiment towards abortive corporatist consultation and then ineffective dirigisme) and the 1974-79 Wilson-Callaghan Labour government (with its shift from a quasi-corporatist Social Contract based on a relatively one-sided union-government accord towards statutory controls and a de facto experiment with neo-liberal monetarism and austerity). The failure of these corporatist and dirigiste experiments enabled Mrs Thatcher to claim that there was no alternative to the neo-liberal road and encouraged her administration to embark on the dismantling of corporatist arrangements and the construction of a neo-liberal state system.

Already in the first two periods of office efforts had been made to ‘Thatcherize’ the state in various ways. These included: civil service reorganisation and politically-motivated promotion to key official posts; enhancing Treasury control over all areas of government and using its financial powers to force restructuring; downgrading or ignoring established channels for tripartite or corporatist negotiation involving the trade union movement; reinforcing the police apparatus and redefining ‘subversion’; reducing the financial and political autonomy of elected local authorities (notably by abolishing metropolitan councils and the Greater London Council that had proved important sites of resistance to Thatcherism) but also through a series of annual legal and administrative changes to reduce, redirect, and control local spending; establishing powerful but locally non-accountable bodies such as urban development corporations to modernize the inner cities for and on behalf of capital; radically restructuring the education system through education spending cuts and systematic interference in all areas; expanding the Manpower Services Commission (MSC) into a major force in training (especially for young people and other groups of the unemployed); and embarking on a programme of privatization and deregulation. It should be stressed that many of these changes are motivated more strongly by issues of political strategy than they are by questions of economic rationality. They are undermining political forces committed to the Keynesian welfare state system and constructing new interests in the transition to flexible accumulation and popular capitalism. Their cumulative effect is to provide long-term structural underpinnings to the neo-liberal strategy currently being pursued.

The third Thatcher government is now embarked on a final assault on the social democratic settlement and its political supports. Particularly significant here are four areas where political power is being reorganized. The expansion of urban development corporations to remove planning powers from elected local authorities and to promote urban and industrial redevelopment; further centralization of the education system through a national curriculum coupled with measures to re-introduce selection and parent power; the introduction of a regressive poll tax instead of the current property tax (rates) to intensify electoral pressure against ‘high spending’ local councils; and further measures to promote privatization and/or commercial accounting in local services. In addition there will be a further programme of privatization and another round of legislation to weaken unions. In this sense the Thatcher governments are distinctive for the priority they have given to winning the political struggle over short-term economic crisis-management and/or dynamic economic efficiency.

Modell Deutschland and Post-Fordism

The Kohl government has continued the Modell Deutschland strategy. But it has adapted it to conditions of growing austerity and also reoriented it towards the logic of post-Fordism. Thus it is still committed to promoting West Germany’s dominant world market position in capital goods and high technology and it is still cooperating (somewhat less enthusiastically) with the unions as well as capital.

The Kohl government has continued the active industrial policy of the SPD-FDP coalition through its ‘new research and technology policy oriented towards innovation’ (Esser 1986). This is still oriented to the overall coherence of West Germany’s industrial core and does not, as is true of Japan, aim to promote only selected high tech products or sectors. Instead there is concern for everything from special steels to value-added cars, from new machine tools to telecommunications, from railways to aero-space. Often this is associated with ‘societal guidance’ or ‘technocorporatist’ programmes rather than the earlier tripartite corporatist arrangements linking unions, business, and the state. These programmes seek to advance research on key technologies relevant to all industrial sectors (information technology, biotechnology, new materials, laser technology) and are based on a close, wide-ranging cooperation among business, state, and science community without significant union involvement (Alemann et al., 1986; Esser 1986; Junne 1984; Willke 1986). Other elements in this technology policy are the growing West German interest in space travel and research, closer Franco-German cooperation to establish Europe as an independent aero-space power; and continued support for the energy industry. In turn this is reflected in more extensive federal coordination of technology policy (Alemann et al., 1986). Another post-Fordist element is found in the state promotion of small business through venture capital, science parks, technology parks, etc.. This policy is backed by more general measures (such as deregulation, tax breaks on profits, and public sourcing policies) to favour German industry.

There are certainly neo-classical supply-side and monetarist currents within the coalition parties comparable to those in the Thatcher and Reagan regimes. But, as a separate political force, the monetarists are marginal (largely due to the comparative success the Bundesbank) has long recorded in controlling inflation; and the supply-siders can be readily integrated into the modernization strategy (cf. Fels 1984). Thus, whereas crude supply-siders and monetarists are relatively uninfluential, the more interventionist high technology modernization current have gained in influence (cf. Saage 1985). This current has long-term institutional bases in the West German state system and receives strong and continued backing from the more competitive sectors of German industry. It is also advantaged by the powers enjoyed by Land governments to promote regional and industrial development so that sunrise industries can move to CDU/CSU areas in sunrise regions where a modern infrastructure is most readily available. Particularly important in this respect are Spaeth’s Baden-Wuertenburg and Strauss’s Bavaria. But SPD governments in sunset regions are also active in promoting rationalization and re-industrialization. In this sense the North-South divide has much less resonance in West Germany than in Britain (Esser and Hirsch 1987).

The christian-liberal strategy towards the unions is twofold. Firstly, it is supporting employers in their efforts to make production more flexible, to resist union attempts to slow or reverse job losses, and to press for legislation favouring more flexible working time (Leithauser 1986). This is reflected in legislative changes to restrict the rights of workers regarding hours and conditions, dismissal, and so forth; and to undermine the rights of established unions in representing workers at plant level and undertaking secondary action (Adamy and Steffen 1985). This is part of an attempt to redefine the ‘terms of trade’ among capital, organised labour, and the state and to induce the unions to develop a ‘new realism’ towards flexibility. Its effect will be to push the unions towards a selective corporatism in which core workers gain and others (typically non-unionized) are marginalised.

Secondly, the government is cooperating, as before, with the unions in high tech sectors through codetermination and concertation (Esser 1986). No attempt is being made to exclude the unions (as in Britain and the aim is to tie them into the transition process. The effect of this dual strategy in the political field has been to reduce the significance of national-level corporatism (Chancellor Kohl himself only met union leaders formally in late 1984 and to promote regional and local corporatism (especially in the form of crisis-cartels in declining industries (Brandt 1985: 9).

The Kohl regime has also been reconstructing the welfare state. Initially it continued the austerity programme of the social-liberal coalition, especially in restricting support for the unemployed and transferring more of the burden of pension provision to individual contributors. This has been motivated by a desire to improve the economic climate for business as well as to save money when conjunctural and demographic factors have put budgets under strain. One effect of these changes has been a stronger differentiation than hitherto of social policies between employees and the economically inactive poor – to the latter’s disadvantage. There is a gradual movement towards minimizing guaranteed state provision and encouraging people to make their own earnings-related provision and/or to purchase services in the market or else to seek help in the community. Thus, as official state welfare services and norms have been cut back, the state has encouraged an informal welfare state and the privatization of social risk. Various measures have been taken to devolve state responsibilities to community care, self help, and neighbourhood help Subsidiarität. The overall result of these policies is to strengthen the ‘two nations’ tendencies of the post-Fordist welfare state with such ‘subsidiariary’ help constituting a self-financed bonus for the privileged and stigmatizing, disciplinary charity for the disprivileged (Hirsch and Roth 1986: 144-147; Baecker 1986: 201-3).

Finally, discontinuities in the West German state are less marked than in Britain. This reflects two features of the state. On the one hand, the movement towards a strong, security state was already developed in West Germanhy[13] (cf. Hirsch 1980). The Kohl government has simply presided over its further development, building on recent developments in information technology. On the other hand, the economy’s greater strength and the adaptability of its institutional structures means that pressures for a radical break are less evident (cf. Hirsch and Roth 1986: 142). The opportunities offered for local experimentation by the federal system are as significant here as they are in areas such as industrial policy.

Overall, then, the continuities are more marked than the discontinuities and a radical break involving ‘Kohlism’ (or its equivalent is not needed. Instead what is required and what is occurring is a correction and modification of the strategies pursued in the ‘seventies in the light of the technical and economic developments of the ‘eighties. The new coalition is better able to achieve this reorientation because it faces fewer legitimation problems vis-a-vis the unions than an SPD-dominated government but it nonetheless represents a basic continuity with past political and economic strategies that have proved relatively successful.

Some Comparisons

To illustrate these general contrasts we can compare some broad areas of reorganization involved in the transition to post-Fordism in both Britain and Germany. These areas show how existing modes of growth and regulation influence the politics and strategies of the transition. We deal in turn with attempts to make the following more flexible: financial institutions; privatization; industrial policy; and industrial relations.

  1. Deregulating Financial Institutions

In Britain the Thatcher government is strongly committed to the deregulation and liberalization of the financial sector. This has been accompanied by radical changes in financial institutions and financial products. Above all the first Thatcher government abolished exchange controls and the second established the framework for ‘Big Bang’, i.e., the liberalization and deregulation of financial services. Together these changes have transformed the City into the world’s leading international financial centre – which is all the more remarkable in the light of its weak domestic industrial base compared with its New York and Tokyo rivals. In West Germany changes in the banking system, the stock exchanges, and financial regulations have occurred but they are less marked and have been undertaken reluctantly rather than from political zeal.

This contrast reflects several aspects of the modes of growth and regulation. Firstly, the universal banking system in West Germany is very flexible and can already provide financial products serving functions similar to the innovative products in Britain; secondly, the inflation and instability that prompted innovation in Britain (and the USA did not produce such a large demand for financial innovations (for a survey of the most important recent financial innovations, see van Horne 1986); thirdly, until recently, the Bundesbank has blocked DM-denominated financial instruments in order to limit West Germany’s exposure to international interest rate and exchange rate shocks and to discourage the use of the DM as an international reserve and investment medium; fourthly, the Bundesbank had always operated in market terms rather than through administrative measures so that deregulation was less necessary; and, finally, West German rules were already relatively liberal for domestic and foreign activities so that there was no need to find loopholes (on these issues, see especially Dulder 1986).

Yet international competition and the fear of losing business to foreign institutions and/or foreign financial centres has led to a partial liberalization. Some financial innovations from abroad can now be employed in West Germany (see Clarich 1987); and, of course, West German banks are especially active in Luxemburg and London where they escape national controls. But the impression remains that, whereas British financial institutions are moving in the direction of internationally competitive specialists in financial services, the West German banks are still more oriented to the West German industrial core, including its operations abroad (cf. Grou 1985). Here, then, the mode of growth has shown inertia and modes of regulation have been adapted. This is even more obvious in the field of stock exchange reform. The dominance of mutual business cross-investment and bank holdings in provincial stock exchanges results in narrow and comparatively illiquid markets and the predominance of unofficial trading in a telephone market dominated by banks (Moran 1987). Even if the latter compensates for the rigidity of the official exchanges, it has effectively blocked the rise of Finanzplatz Deutschland to rival London, New York, and Tokyo in the global securities business.

  1. Privatization and Liberalization

This also provides an interesting contrast. Whereas nationalized industries in Britain are state-owned and have often been run on non-commercial lines, West Germany’s public enterprises are more often controlled at Land or communal level, enjoy more commercial autonomy, and are often used to promote technological change and modernization. Moreover, whereas nationalization has usually divided political parties in Britain, the postwar SPD has never campaigned for a state sector. These factors are reflected in the nature of privatization programmes in the two countries. For, whereas privatization in Britain was initially motivated by ideological commitment and the need to raise revenue to finance tax cuts and sustain public spending, West Germany’s programme is subordinated to the needs of industrial coherence, national security, maintaining stability in financial markets, and preserving continuity in management (cf. Uhel 1986; Abromeit 1986; Young 1987). Thus the christian-liberal rhetoric of privatization has been tempered by pragmatism; proposals are also subject to negotiation rather than being imposed from above (Uhel 1986: 77-8).

We can illustrate this contrast by considering the liberalization and privatization of the telecommunications industry in Britain. For the Thatcher government has adopted a market-driven strategy in liberalizing telecommunications, putting market-led demand before indigenous supply capacity. Domestically this has mainly benefitted the City and those involved in supplying value added network services. But it is consistent with the Thatcherite strategy of promoting cosmopolitan re-industrialization in so far as supply has been met by incoming firms interested in doing business with Europe as a whole (Morgan and Webber 1986: 59, 62). In contrast, the West German strategy has been much more solicitous of German ‘electro-capital’ (Luethje 1986: 67-71). Nor is there a social basis for liberalization in the German telecommunications sector because the union parties are more solicitous than the Conservatives for lower income groups, the rural population, small and medium manufacturing firms, etc. (Webber 1986b: 408-10); and must also take greater account of its implications for jobs, incomes, and the regions (Morgan and Webber 1986: 76).

It should also be noted that privatization in Britain has major political aims. It represents an attempt to roll back the postwar settlement and socialism and to create a ‘popular capitalist’ base of support for a neo-liberal accumulation strategy. And it has served to disguise the government’s failure to control the PSBR (since privatization counts as negative public expenditure). So far privatization in West Germany has only concerned the federal level.

3. Industrial Policy for the Private Sector

As regards British industrial policy, we must distinguish between rhetoric and reality under Thatcherism. The first Thatcher government disengaged loudly from the unsuccessful policies concerning older nationalized industries, pre-Fordist lame ducks, and regional aid. This period of doctrinal palaeo-liberalism ended in the latter half of 1980 under the combined impact of rising unemployment and criticism from business. Since then the government has been active in promoting rationalization and re-industrialization in declining industries and in supporting innovation in sunrise industries. It has developed a wide range of initiatives through several government departments and quasi-government agencies and is now particularly active in partnership with private industry in promoting small business, rationalization, new wave technologies, and so forth (Wilks 1985). Indeed, in the five key future technologies (micro-electronics, telecommunications, robotics, optics and opto-electronics, and biotechnology), Britain has programmes that are similar to those in Japan, the United States, France, and Germany (Junne 1984:143-4). Whether or not the sums available are adequate, spent wisely, and sufficiently well coordinated is debateable but the existence of these programmes does reveal the state’s importance in the transition to post-Fordism even if in neo-liberal guise.

In Germany this strategy is more open because it extends the earlier Modell Deutschland (Webber 1985). The key trends have been sketched above and three further remarks will suffice. The neo-statist strategy is particularly clear in crisis sectors. Here one finds state-sponsored, union-supported rationalization, concentration, and upgrading together with moves to produce low tech products abroad, using low waged, unskilled labour. The high tech sectors are also receiving more financial support under the Kohl government with the federal state playing a more directive role (cf. Esser 1986; Vaeth 1985. The active labour market policy has also been maintained with expenditure moving pro-cyclically under the influence of austerity, expanding when revenues permit (Webber 1987). In contrast to Britain the state is more active role, then, and this encourages greater coherence in the industrial strategy as well as the industrial core.

4. Industrial Relations

Strategies towards industrial relations also differ. The weak institutionalization of trade union rights in Britain has greatly helped the Thatcher government in withdrawing them along with privileged access to the institutions of government. The onslaught began before the inexorable rise of mass unemployment and exploited the political unpopularity of the unions and their organizational weakness borne of easy expansion during the postwar boom. It involves direct state intervention into unions’ internal organization as well as more general economic, labour, financial, and social policies (Kastendiek 1987: 2-3). And, above all, it involves action against public sector unions in industry and public services.

In the private sector the reform of industrial relations is much more market-generated than state-imposed. On key issues business has rejected the government’s strategy (e.g., on the closed shop or regionally differentiated wage agreements). And it is actively developing forms of micro-corporatism based on the ‘new realism’ and internal labour markets. This is reflected in continuing wage drift in the private sector as well as wildcat cooperation, employee bailouts, formal agreements or collective bargaining over new technology, and so forth. Conflicts are largely confined to the public sector, to new modern firms outside greenfield sites, and to firms faced with the choice between bankruptcy or confronting the unions (Terry l986b).

Conversely, juridification, co-determination, and involvement in para-fiscal bodies (such as health insurance, unemployment pay, and pension organizations have blocked a frontal political attack on the unions in West Germany and encouraged cooperation between unions and employers. Thus, although rightwing fringe groups have raised doubts about Tarifautonomie and demand more pluralism at plant level, neither employers’ associations nor the CDU leadership want to touch codetermination (Streeck 1985; Markovits 1986: 426; on the main legal measures against unions and ways in which unions are excluded from the workplace, see Wendeling-Schroeder 1986). Indeed, after remaining aloof for two years, the Kohl government restored tripartite consultation at national level (Markovits 1986: 424); and IG Metall, the largest union, reached an agreement with state and employers over vocational training in 1984. Within this framework, however, changes are occurring. For the Kohl government is trying to work within the legal and corporatist systems to overcome unions’ opposition to flexibility. It is changing the law on working time (length of working day, Sunday working, night work for women, fixed duration contracts, etc. and helping to divide the workforce into a stable core and precarious margin (Leithauser 1986: 183, 197).

Moreover, within the two-tier system of worker representation, it is possible to discern a shift towards micro-corporatism at plant level based on works councils at the expense of meso-corporatism involving the unions (Markovits 1986: 419). Indeed, the works councils appear to be the nucleus of an emergent company unionism (Streeck 1984: 27). In turn this continues the pattern of effective consensual interest accommodation at enterprise level that has long been a crucial precondition of West German success in world markets (Streeck 1984: 42). The continued willingness to bargain can also be seen in the conclusion, in April 1987, of a 3-year agreement between IG Metall and the employers over flexible working time in exchange for the stepwise introduction of a 37.5 hour week and wage increases.

5. Interim Conclusions

The Thatcher and Kohl governments are conservative regimes that cannot avoid being involved in the transition to a post-Fordist economic, political, and social order. Nonetheless the Thatcher governments have adopted policies different in key respects from those pursued in West Germany. Where the post-Fordist industrial logic is particularly strong in the high technology areas, some similarities between the two regimes have emerged under the impact of international competition. These similarities can also be seen in the emergent post-Fordist industrial and service sectors where management and unions play the leading role within a framework established by government. In both societies, for example, we find a movement towards micro-corporatism at plant level. The similarities are weakest in areas where the scope for political action is greatest and the logic of post-Fordism less clear. The contrasting approaches to privatization are especially noticeable and so too are those in the field of industrial relations and union legislation. If politics makes a difference, however, we must enquire why it has taken different forms in Britain and West Germany.

V. Why is there no Kohlism in West Germany?

In their different ways both Britain and Germany have embarked on a transition towards a post-Fordist economy. We will now examine how political factors have helped shape this general process. For, alongside differences in their forms of Fordism and its crisis, political structures and forces have also significantly moulded the transition. These can be approached by asking why there is no Kohlism in West Germany as long as this question is not reduced simply to matters of personality and political style.

In Britain the beginnings of the transition to post-Fordism have coincided with the rise and consolidation of Thatcherism. The latter certainly has populist ideological aspects and a plebiscitary political moment and is closely identified with the distinctive personality and political style of Mrs Thatcher. But it also involves a new economic and political strategy for the central state that transcends particular personalities and, indeed, parties. It now dominates the Conservative Party; the SPD in Britain soon acquired the soubriquet of ‘Thatcherism with a human face’; and the Labour Party is gradually accepting the need for flexible accumulation, even if it still rejects the ‘two nations’ aspects of popular capitalism. Different parties would pursue somewhat different strategies but the break with the Keynesian welfare state mode of regulation is clear.

In Germany the transition to post-Fordism involves not so much a break with the past as a correction in the earlier course. It involves no populist movement or ideological current that one could term Kohlism and it is not associated with a radically new economic and political strategy. In part this reflects two simple facts. Kohl himself is no charismatic, conviction politician; and he entered office at the hands of the FDP through parliamentary machinations rather than through a critical, realigning election campaign. These facts are related in turn to basic structural features of the West German electoral and party system. This is structurally predisposed towards coalition government and creates conditions in which small parties (such as the FDP or, perhaps, the Greens) can make or unmake governments. Indeed three major governmental changes in the BRD since 1949 have been secured in parliamentary manoeuvres rather than directly though realigning elections at federal elections: Erhard’s fall in 1966, Kiesinger’s in 1969, and Schmidt’s in 1982 (Irving and Paterson 1984: 422). Likewise the recent Machtwechsel had more to do with shifts from radical liberalism to economic liberalism in the FDP than with the gradual rightward drift of the CDU/CSU (Bulmer 1983: 19; Kastendiek and Kastendiek 1985); and it was helped by Kohl’s centrist commitments that made the shift from SPD to CDU less dramatic and clear-cut. It sometimes seems, indeed, that Kohl’s job is to hold the ‘middle ground’ and secure moderation in domestic and foreign policy so that market, corporatist, and molecular social forces can refashion German society.

But explaining the absence of a radical break in terms of Kohl’s personality and the circumstances of his accession to the Chancellorship could be misleading. Other leading figures (such as Strauss do have an authoritarian populist style and there are also significant neo-conservative and neo-liberal currents in the West German political system. Thus at least two preconditions for something akin to Thatcherism and Reaganism exist but nothing like them has gained power in West Germany. Indeed, whilst Kohlism has never emerged, Straussism actually failed on the national political stage in 1980.[14] And, despite loud calls for a neo-liberal and neo-conservative break, the union parties still follow a centrist line. Thus a more satisfying explanation for the absence of Kohlism (understood as a successful political movement arguing for a radical break in West German modes of regulation and growth) should be sought in more general structural and conjunctural features of German society.

In Britain there is a long-term structural crisis in the polity that can be exploited by a dominant leader. It involves a peculiar dual crisis of the state, i.e., a crisis in the functioning of the parliamentary and party system and a failure to consolidate an alternative corporatist strategies of economic and political crisis-management.[15] In turn this has had two effects. It means there is a political vacuum into which an authoritarian politics can enter and appeal directly to the masses without significant intermediation. It also means that there has been limited resistance to the Thatcher regime from party political or corporatist forces. This has given Thatcherism one of the most vital of political assets in securing the relative autonomy of the state: time. In turn this has helped the three Thatcher governments to make mistakes, correct them, try new policies, choose the moment when to confront opposition, and gradually to broaden the fronts in a war of position aimed at a fundamental and long-term transformation of British society in all spheres. Only through the structural crisis has Thatcherism been able to ride out frequent bouts of electoral unpopularity, internal dissent within the Conservative Party, opposition from vested interests, and a disastrous first two years in office. At the same time this crisis has created the opening for a new style of conviction politics.

In contrast the parliamentary and party systems in West Germany, despite much talk to the contrary in the seventies, seem much more stable and effective. The Machtwechsel itself was the culmination of a long run trend in favour of CDU/CSU support since the l972 election (with l982 an aberration due to the Schmidt-Strauss confrontation). Likewise the Greens have already been incorporated into government at Land level and seem prepared to share in federal power. The operation of the voting and party systems is also less conducive to a purely populist or plebiscitary politics since it encourages coalition government and the FDP’s stabilizing role. There are also close bargaining relations between the federal and provincial governing systems: an intricate web of continuous bargaining, carried on by various political and administrative hierarchies, working within clear rules and structures, and often involving close links with all main parties (cf. Dyson 1984; Katzenstein 1987). Finally, West Germany also has long-established, stable corporatist features that would provide the basis for resistance to a purely neo-liberal strategy within the CDU-state – should this ever become the dominant tendency. Indeed, Katzenstein has recently contrasted the decentralization of the political system with the centralization of private organized interests in economy and society. He suggests that the tension between decentralized state and centralized society is checked by three nodes of policy-making (parties, cooperative federalism, and para-public institutions that provide for political, territorial, and functional coordination and also encourage incremental change (Katzenstein 1987: 15-35).

Thus the complex web of legal, administrative, party political, and corporatist relations makes a drift to authoritarian populism and/or a radical political rupture far less likely. At the same time, of course, the modes of regulation and growth associated with the Modell Deutschland have also proven more effective in sustaining high and stable living standards for the majority as well as maintaining West Germany’s place in the international economy. Given the strong neo-statist elements in this mutually reinforcing set of structures and strategies, therefore, a break along neo-liberal lines seems implausible.

VI. Concluding Remarks

The arguments in this paper have moved between abstract theory and historical description. Thus we should conclude with two sets of remarks. The first set concerns the heuristic value of the regulation approach as deployed here; and the second concerns the prospects for Thatcherism in Britain and the revamped Modell Deutschland in West Germany.

 

 

Reflections on the Regulation Approach

 

Attentive readers will have discerned a problem in the regulation approach employed in this paper: ambiguity concerning the scope of Fordism. Neither Britain nor Germany reveal a clear-cut case of Fordism if this is defined simply in terms of mass production and mass consumption. Britain failed to secure the productivity growth that Fordist methods could have brought to mass production and was hard-hit by de-industrialization as a result. West German growth owes as much to the capital goods sector as to mass production of consumer goods and has also relied as much on its highly qualified Facharbeiter as on semi-skilled, Fordist mass workers. In its minimal sense, therefore, ‘Fordism’ serves mainly as an ‘ideal type’ against which to assess the specificity of the British and German regimes of accumulation. The broader concept of Fordism is, however, both directly relevant and powerful. For the Fordist wage relation, based on institutionalized collective bargaining around a wage tied to rising productivity and inflation, characterized both Britain and West Germany. Likewise private credit and monopolistic competition played a key role in capital accumulation; and state credit and tax expenditures were central elements in economic management. If we adopt the broader concept of Fordism as a regime of accumulation, therefore, we can treat both Britain and West Germany as having Fordist regimes.

The related concepts of ‘mode of regulation’ and ‘mode of growth’ have proved even more relevant for our analysis. They are clearly more concrete concepts and can generate significant insights into the differential dynamic of the British and West German regimes. The institutions of collective bargaining, the relations between banks and industry, and the state play key roles in a mode of regulation; and their contrasting natures in the two cases investigated emerges very clearly. Likewise the modes of growth in Britain and Germany are also significantly different – reflecting their different industrial profiles and modes of insertion into the international economy.[16] By examining the contrasting modes of regulation and growth in these two economies we can better grasp the specificity of their postwar development and of the forms assumed by the crisis of Fordism. It is also interesting to speculate how far these modes of growth seem to have a structural and institutional inertia transcending the specific Fordist logic.

For West Germany is trying to build up its relatively coherent industrial core, its high technology export industries, and its skilled workforce to exploit the opportunities offered by flexible specialization in batch production as well as traditional Fordist mass production industries. Even so fears are often voiced that West Germany is losing out in the technological race with Japan and the United States. Likewise Thatcher’s Britain is pursuing an accumulation strategy based once more on a leading role in international financial services – albeit this time as the centre for transnational banks rather than purely indigenous British banking and commercial capital. But industry is being further balkanized among multinationals from different economies so that its long-term re-industrialization will depend on how Britain fits into the global accumulation strategies of MNCs rather than on a coherent industrial strategy pursued by the British state. This does not exclude regeneration through the synergy of high-tech centres created through interaction among various MNCs, home-grown subcontractors, services, etc. in a neo-liberal fiscal and regulatory environment. But such synergic effects are no more guaranteed than the continuing international competitiveness of a national industrial core favoured in the neo-statist strategy.

But even the more concrete concepts of the regulation school must be supplemented by much greater attention to the sui generis dynamic of the political system. The state apparatus and political system has been seriously neglected by the French regulation school[17] and the American radical political economy tradition[18]. In contrast the leading West German contributors (Esser, Hirsch, Roth to the regulation approach have consistently emphasized the state’s role and the political dimension in developing a more general analysis of different forms of societalization (Vergesellschaftung).[19]

Hopefully the present analysis has shown how important political factors can be in explaining the forms assumed by modes of regulation and growth, the crises that they undergo, and the nature of the strategies that emerge to resolve them. The specificity of the British and German postwar settlements, the contrasts between the Keynesian welfare state and the CDU-Staat in the fifties, and the different experiences with corporatist concertation in the sixties and seventies surely provide evidence enough for this view. But the contrast between the break between the Social Contract and Thatcherism and the continuity between the social-liberal Modell Deutschland and the present christian-liberal strategy provide even more convincing evidence for the need to ‘bring the state back in’. In this sense the regulation approach needs modifying to take account of the state to a much greater extent.

The Prospects for Britain and Germany

 

The prospects of Thatcherism and the revamped Modell Deutschland depend on three sets of factors. Firstly, there is the changing balance of forces mobilized for and against them; secondly, there are the institutional obstacles, structural constraints, and policy dilemmas that might block them; and, thirdly, in an increasingly internationalized global economy, the complementarities among different national strategies are crucial elements in ascent or decline in the international hierarchy. These factors are inter-related. In the short run, no strategy, however rational in narrow economic terms, can succeed without a favourable balance of forces; in the medium-term, a strategy that was once irrational could eventually succeed because it can be sustained long enough for changing circumstances to render it more plausible and/or to enable its protagonists to improve it through trial-and-error; and, in the long-term, no strategy that is inconsistent with the long-run trends emerging from the clash of all strategies in the world economy can provide the basis for movement up the international hierarchy.[20]

The development of Thatcherism illustrates all these points. Its initial survival was related to the demoralization and disorganization of the opposition (there was no alternative and to various short-run political concessions. In the medium term it has gained economically and politically. Thus it has benefitted from the weakening of bases of resistance in manufacturing and the trade union movement as the economy has been restructured and from the emergence of a more coherent supply-side strategy that better reflects the competitive pressure to move beyond Fordism. And it has benefitted from the recomposition of political forces through its hegemonic project of popular capitalism and its reorganization of the state system. Yet to be decided is the long-term compatibility of this strategy with the strategies of the three dominant economic powers (Japan, the United States, and Germany) as well as the host of other players.

A comparison of the two conservative regimes led by Thatcher and Kohl is revealing in at least two different ways. This involves more than the question of the overwhelming presence of Thatcherism vs the apparent absence of ‘Kohlism’. This can easily be explained in personal, conjunctural, and institutional terms. At stake is not merely the form taken by the transition to post-Fordism but also the reasons behind the relative continuity or discontinuity of specific accumulation strategies and hegemonic projects.

Thatcherism was significant initially because it represented a specific response to the crisis of flawed Fordism in Britain and its accompanying ‘Keynesian-welfare-state’ political shell. Mrs Thatcher knew instinctively that there could be no return to the old Keynesian welfare state ways: but in rejecting these crisis-management and crisis-avoidance responses, she invoked a return to even earlier values and institutions. The dual crisis of the British state gave Thatcherism (which is not purely a vehicle for Thatcher’s aggrandizement but also a project for radical transformation of British society) enough breathing space to engage in trial-and-error policy-making and to find a relatively coherent strategy for the transition to post-Fordism in Britain. Thus, having come to power promising a return to a pre-Fordist, liberal capitalism, the third Thatcher government is now paving the way for movement towards post-Fordism.

In contrast the union and liberal parties were more aware of the need for forward movement and rejected a simple return to the social market economy of the fifties – let alone to a mythical laissez-faire approach absent from the German state tradition. They were committed to ‘high technology modernization’ alongside sound money and sound finance. In this regard they are seeking to exploit the peculiar features of West Germany’s export-oriented Fordism. Flexible specialization is particularly useful in the batch production of capital goods that was previously resistant to Fordist methods; and West German employers still retain a relatively skilled workforce that can operate flexible manufacturing systems. What Boyer (1986b) has termed ‘flexi-Fordism’ provides a good basis for movement to a flexible post-Fordism.

The broad aims of Kohl and Thatcher are the same: what differs is the conditions in which they are being pursued and the route that has been chosen. In both countries there is a movement towards post-Fordism: in Britain this involves new forms of populist and plebiscitary politics closely associated with (but not reducible to a dominant political personality; in West Germany there is much greater concern with business as usual. But the British road to post-Fordism also involves specializing in transnational financial services for the world economy and reinforcing the commercial and rentier character of British society. In contrast the West German road involves continued specialization in high technology manufacturing as the industrial workshop of the European Community. The dangers involved in these strategies may be overcome if the modes of growth that these contrasting strategies involve can be rendered complementary and reinforcing.

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Endnotes

[1] This paper is a much expanded and theoretically more grounded version of a contribution to a forthcoming book, edited by Mark Gottdiener and Nikos Komninos, on Modern Capitalism and Crisis Theory: Accumulation, Regulation and Spatial Development. The book will be published in 1988 by Macmillan and St Martin’s Press.

[2] In writing this paper I have benefitted from discussions with Kevin Bonnett, Simon Bromley, Alex Demirovic, Harald Dueren, Josef Esser, Klaus Friedel, Klaus Gretschmann, Joachim Hirsch, Hans Kastendiek, Emil Kirchner, Tom Ling, Dave Marsh, and Doug Webber. I have also drawn freely on my earlier work on these themes, especially 1980, 1985, 1986a-c, 1987, and 1988a-b. The final responsibility for the arguments presented here naturally remains with me.

[3] This sketch is drawn from: Blackburn et al., 1985; Boyer, 1986a; de Vroey, 1984; Galbraith, 1975; Hirsch and Roth, 1986; Hurtienne, 1986; Kundig 1985; Lipietz, 1985; Monse, 1987; Piore and Sabel, 1983.

[4] It is worth repeating that Fordism is treated here in terms of the overall organization of the production- wages – consumption nexus and its associated modes of growth and regulation rather than in the narrower terms of the Fordist labour process in mass production industries.

[5] The postwar settlement was basically concluded during the war itself and its institutional embodiment was largely completed by the postwar Labour government from by 1948: see Addison 1984; Barnett 1985; Middlemas 1986.

[6] It is debateable how far this is due to management failures, to union veto power over management initiatives, and to government macro-economic policy (Coates and Hillard 1986; Nichols 1986.

[7] Middlemas correctly identifies a persisting pattern of corporatist bias in the governing institutions of Britain: in the interwar years this was more concerned with political crisis management, during the war it was conditioned by the dominance of labour in the market hierarchy, and during the 1950s it had been attenuated by the dominance of liberal strategies. See Middlemas 1979.

[8] Domestic forces were not passive during this period but sought to advance their own interests and strategies under the imprimatur of the occupying powers.

[9] Conversely it has prompted collaboration among Laender and the federal government as well as concertation with organized interests: see Dyson 1981; Webber, 1986: 7.

[10] German firms are more highly organized than their workers – among whom around two-fifths are unionized: the BDA has an 80 percent enrolment among all firms, coordinates lockouts, and imposes a taboo catalogue of non-negotiable issues. In addition, 95 percent of industrial firms belong to the BDI; and all firms are legally obliged to belong to local chambers of commerce.

[11] For this reason I disagree with the unqualified use of the terms Fordism (Hirsch and Roth 1986 or neo-Fordism (Deubner 1984 as well as the qualification, ‘flexi-Fordism’ (Boyer 1986b, to describe the West German model. Collective bargaining assumed the typical Fordist form but it was coupled to an atypical mode of growth due to Germany’s industrial profile.

[12] This control is exercised through their own shares and/or proxies entrusted by customers or borrowed from other banks.

[13] The British state has been perfecting a security state apparatus in Northern Ireland for decades but its extension to the mainland is far more restrained and also limited mainly to the inner cities.

[14] It is also worth noting that Strauss’s Bavaria has an interventionist state that is deeply committed to promoting flexible accumulation

[15] My earlier arguments about three strategies for moving towards post-Fordism and about the weakness of market-oriented, corporatist, and statist capacities in Britain might suggest that the crisis is threefold rather than merely ‘dual’: for present purposes, however, it is sufficient to concentrate on the weaknesses of the parliamentary and party system and of corporatism.

[16] The importance of modes of growth is neglected in Hall’s otherwise interesting comparison of Britain and France in terms of what we would call their modes of regulation: see Hall 1986..

[17] The main exception here is the work of Andre and Delorme (1983 with its emphasis on the state as the site of an institutionalized compromise; but even their magisterial work neglects the relative autonomy of political processes and the specificity of political struggles. Lipietz has invoked some Gramscian concepts in his analyses but they remain essentially underdeveloped: e.g., Lipietz, 1985a-b.

[18] For a critique of its state theory, see: Verhagen and Elshout, 1986.

[19] To the extent, indeed, that they run the risk of politicism.

[20] This last argument should not be interpreted in a narrowly economic fashion: strategies are never purely economic but always have significant political, social, and ideological dimensions.

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