Towards a Schumpeterian Workfare State? Preliminary Remarks on Post-Fordist Political Economy

This on-line version is the pre-copyedited, preprint version. The published version can be found here:

‘Towards a Schumpeterian Workfare State? Preliminary remarks on post-Fordist political economy’, Studies in Political Economy, 40, 7-39, 1993.

The Keynesian welfare state regimes that emerged during the long postwar boom are widely held to be in terminal decline; but there is far less agreement upon the nature of the successor to such regimes. While this is too large a topic to be covered in any detail here, I want to advance three general and somewhat speculative claims about current changes. First, a tendential shift is under way from the Keynesian welfare state (wherever it was established) to the Schumpeterian workfare state; second, national states in advanced capitalist economies are subject to an admittedly uneven three-way ‘hollowing out’; and third, both tendencies are related to the transition in western economies from Fordism to post-Fordism. Although clearly linked to the same overall economic dynamic in the third claim, the first two claims can nonetheless be considered independently from each other. Conversely, all three claims could also be condensed into the single audacious aphorism that a ‘hollowed-out’ Schumpeterian workfare state provides the best possible political shell for post-Fordism. The basic assumptions and ideas involved in all four claims are summarized in this paper’s first section. Further sections then contextualize the tendential shifts themselves, outline the mechanisms generating them, and outline three ideal-typical variant forms of the emerging regime. This theoretical work will also help to make the initial claims more concrete and indicate how they might be utilized in further research.

I. The Four Claims Outlined

This paper is more concerned to introduce some state-theoretical concerns into regulation theory than to introduce regulationist concepts into analyses of the state. Its starting point is the insight that, since economic activity is both socially embedded and socially regulated, an adequate account of the economy must adopt an ‘integral’ approach. Thus the following analysis is concerned with the expanded economic and social reproduction of capitalism or, to paraphrase Gramsci, the ‘economy in its inclusive sense’.[1] This can be defined in turn as comprising an ‘accumulation regime + mode of social regulation’. The state is an important structural and strategic force in this regard and has major roles in securing the expanded reproduction and regulation of capitalism.[2] Two general functions are particularly important here: first, helping to secure the conditions for the valorization of capital; and, second, helping to secure the conditions for the reproduction of labor-power. Indeed these two broad functions are incorporated into the very definitions of the Keynesian welfare and Schumpeterian workfare states. Thus, while the first term in each concept refers to the distinctive form of state economic intervention characteristic of a given mode of social regulation, the second refers to the distinctive form of social intervention favoured by the state. From the sort of integral economic viewpoint adumbrated here, the Keynesian welfare state (or KWS) and Schumpeterian workfare state (or SWS) are likely to correspond to different accumulation regimes. Thus I hope to show that, whereas the former was an ‘integral’ element in the expanded reproduction of Fordism, the latter could become just as ‘integral’ to its still emerging successor regime.[3] But let me first summarize the four claims noted above.

I.1 – The Schumpeterian Workfare State The first claim, that there is a tendential shift from the KWS to the SWS underway, rests on the two widely accepted notions: that the KWS was a key structural support of the long postwar boom; and that it has since entered into crisis along with its associated accumulation regime. In abstract terms the distinctive objectives of the KWS regarding economic and social reproduction were: to promote full employment in a relatively closed national economy primarily through demand-side management; and to generalize norms of mass consumption through welfare rights and new forms of collective consumption. The concrete forms of the KWS and the specific ways in which such objectives were pursued naturally varied from case to case. Nonetheless, as the crisis of the KWS unfolded and efforts to restore the conditions for postwar growth through economic austerity and social retrenchment failed, the emphasis shifted to attempts to restructure and reorient the state in the light of significantly changed perceptions of the conditions making for economic expansion. What is emerging, hesitatingly and unevenly, from these attempts is a new regime that could be termed, albeit rather inelegantly,[4] the Schumpeterian workfare state. Its distinctive economic and social objectives can be summarized in abstract terms as: the promotion of product, process, organizational, and market innovation; the enhancement of the structural competitiveness of open economies mainly through supply-side intervention; and the subordination of social policy to the demands of labor market flexibility and structural competitiveness. Although the distinctive features of the SWS emerge most clearly in contrast with the KWS, it is important to note that the appearance of the SWS is not dependent on the presence of any more or less crisis-prone KWS. While this development may be typical in European cases for instance, there are important East Asian examples that do not fit such a pattern. Indeed these latter examples are often taken nowadays as models for crisis-resolution in the West.

I.2 – The ‘Hollowing Out’ of the National State In each of the core triad regions in North America, the European Community, and East Asia, the national state is subject to various changes leading to its ‘hollowing out’. This does not mean that the national state loses all importance: far from it. Indeed it remains crucial as an institutional site and discursive framework for political struggles; and it even keeps much of its sovereignty – albeit primarily as a juridical fiction reproduced through mutual recognition in the international political community. At the same time its capacities to project power even within its own national borders are becoming ever more limited due to a complex triple displacement of powers upward, downward, and, to some extent, outward. Thus, some state capacities are transferred to pan-regional, pluri-national, or international bodies; others are devolved to the regional or local level inside the national state; and yet others are assumed by emerging horizontal networks of power – regional and/or local – that by-pass central states and link regions or localities in several societies. These shifts are also associated with the blurring of the state’s boundaries and its growing involvement in decentralized societal guidance strategies rather than centralized imperative coordination. Moreover, while such shifts sometimes emerge as conjunctural products of short-term crisis management or displacement strategies, they also correspond to long-term structural changes in the global economy. At stake here is not just a series of formal or tactical shifts but also the practical re-articulation of political capacities. For the national state’s tendential loss of autonomy creates both the need for supra-national coordination and the space for sub-national resurgence. The precise mix of the three main forms of ‘hollowing out’ will clearly vary with the existing economic and political regime, the structural constraints it confronts, and the changing balance of forces.

I.3 – From Fordism to Post-Fordism The general consistency of these shifts across a wide range of economic and political regimes suggests that more than mere happenstance or local economic and political conditions are at work. Hence the third claim is that these two shifts are closely related and grounded in a set of processes that is often, if somewhat misleadingly, characterized as the transition from Fordism to post-Fordism. However, while this label has certainly helped to contextualize and shape the responses to the crisis of the KWS, it also obscures the real complexity of the changes grouped thereunder, as well as the problems faced in finding anything like a comprehensive solution. Thus the changes involved need closer examination. In addition to what might well be termed a techno-economic paradigm shift from Fordism to post-Fordism, attention should also be paid to such factors as the rise of new technologies, the accelerated pace of internationalization, and basic shifts in the regional forms of global and national economies. All four trends are closely connected. Together they undermine the KWS’s effectiveness as a force in economic and political regulation (see section II below) and set the parameters within which solutions for the crisis of the postwar economic order must be sought.

I.4 – The Best Possible Political Shell? This leads to the fourth, and most audacious, claim: namely, that the ‘hollowed out’ Schumpeterian workfare state could be regarded as the best possible political shell for post-Fordism. There is an obvious risk with this metaphor. For it might encourage the mistaken idea that the state is merely a protective political shell inside which an economic kernel might germinate securely. An integral economic viewpoint, with its explicit focus on the structural coupling and contingent co-evolution[5] of accumulation regimes and modes of social regulation, excludes any such interpretation. It does suggest the possibility, however, of attempting to justify this claim in at least three ways: by showing that KWS regimes were structurally coupled in major respects to the growth dynamic of Atlantic Fordism[6]and that the transition to the SWS helps resolve the principal crisis-tendencies of Atlantic Fordism and/or its associated KWS regimes so that a new wave of accumulation becomes possible; that the distinctive aspects of the evolving SWS correspond in crucial respects to the emerging growth dynamic of the new global economy and contribute significantly to the overall shaping of this dynamic considered from an integral viewpoint; and that the most competitive economic spaces in this emerging order have actually pioneered this form of state and have thereby gained a paradigmatic, exemplary status for restructuring efforts elsewhere. All three lines of analysis could lend credence to the (now newly redefined, less metaphorical) claim that the ‘hollowed out’ SWS is peculiarly well-suited to promote and consolidate (and not merely to encapsulate) the still evolving integral economic post-Fordist order – with all that this implies for the losers as well as gainers from the process. Just such an experimental threefold demonstration is attempted below.

II. Changes in the Global Economy and State Functions as Context and Cause

This section puts all four claims into their general, indeed their global, economic context by noting the implications of the above-mentioned trends for the ‘integral economic’ functions of the capitalist state. It is far from my intention here to imply that states can always develop (let alone that they already have) the abilities to reorganize themselves and successfully realize these new functions. Nor am I trying to suggest that a post-Fordist accumulation regime with an appropriate mode of social regulation could ever be really trouble-free. Instead I want to highlight the magnitude of the task facing states in adapting to the new conditions. Moreover, once our attention turns to specific regimes facing specific economic and political conditions, one can (and should) engage in detailed studies of the inevitable dilemmas, contradictions, costs, and crisis-tendencies involved in specific responses to these various trends. Before reviewing possible forms of response, however, I will consider some significant implications of the current economic restructuring.

The first crucial trend is the rise of new core technologies as motive and carrier forces of economic expansion. These are creating whole new industrial sectors and, through their own cross-fertilization and/or their incorporation into traditional sectors, helping to widen product ranges. Mastering them is critical to continued growth and structural competitiveness. Yet many are so knowledge- and capital-intensive that their development demands extensive collaboration (especially at pre-competitive stages) among diverse interests (firms, higher education, public and private research laboratories, venture capital, public finance bodies, etc.). This is recognized not only in many advanced capitalist economies but also in many newly industrializing countries. Indeed, given increasing competitive pressures from NICs on low cost, low tech production, and even in simple high tech products, the advanced capitalist economies must move up the technological hierarchy and specialize in the new core technologies if they are to maintain employment and growth. States have a key role here in promoting innovative capacities, technical competence, and technology transfer so that as many firms and sectors as possible benefit from the new technological opportunities created by R&D activities undertaken in specific parts of the economy.[7]In addition to specific areas of intervention or guidance, the state must increasingly get involved in promoting effective national and regional innovation systems. And, given the budgetary and fiscal pressures on states as their national economies become more open, states must shift industrial support away from vain efforts to maintain declining sectors unchanged towards promoting so-called sunrise sectors and/or restructuring so-called sunset sectors so that they can apply new processes, upgrade existing products, and launch new ones. In all cases the crucial point is that state action is required to guide the development of new core technologies and widen their application to promote competitiveness.

Second, as the internationalization of monetary and real flows alike proceeds apace and involves ever more firms, markets, and countries, states can no longer act as if national economies were virtually closed and their growth dynamic were autocentric. On the one hand, internationalization trends (and the leading role of MNCs and TNBs in advancing them) mean that firms can escape national control and national economic policies no longer work so well. In particular many macro-economic policy instruments associated with the KWS lose their efficacy with growing internationalization and must therefore be replaced or buttressed by other measures if postwar policy objectives such as full employment, economic growth, stable prices, and sound balance of payments are still to be secured. On the other hand, it no longer appears so self-evident that national economic space provides the best starting point for pursuing growth, innovation, or competitiveness. Instead the problem becomes one of managing its insertion into the global economy in the hope of securing some net benefit from internationalization. Small open economies already faced this problem during the postwar boom, of course; now even the larger and previously relatively closed economies have become absorbed into the global circuits of capital through a variable combination of extraversion and penetration. This helps to explain the paradox that, as states lose control over the national economy as an object of economic management, they get involved in managing the process of internationalization itself and thereby further undermine national economic autonomy. This not only involves advancing the interests of home-based multinationals but also means creating conditions favourable to inward investment. In both cases regard must be paid to the overall impact on the nation’s technological and economic competitiveness. In addition, states must get involved in redefining the international framework within which such economic processes occur. Among many policy objectives here are: establishing new legal forms for cross-national cooperation and strategic alliances, re-regulating the international currency and credit systems, promoting technology transfer, managing trade disputes, defining a new international intellectual property regime, and developing new forms of regulation for labor migration.

Third, there has been a paradigm shift from a Fordist growth model based on mass production, scale economies, and mass consumption to one oriented to flexible production, innovation, scope economies, innovation rents, and more rapidly changing and differentiated patterns of consumption. What is at stake today in international competition is the ability to switch quickly and easily among innovative products and processes with each new product offering better functional qualities and improved efficiency in production. It is no longer a question of competing through economies of scale in the production of standardized goods and services using dedicated production systems but of competing through the capacity to introduce flexible manufacturing or service delivery systems and exploit the resulting economies of scope. This shift has important implications for enterprise and sectoral strategies even where Fordism itself was not previously dominant in given sectors or national economies. Indeed, this shift provides a major interpretive framework for making sense of the current crisis and imposing some coherence on the search for routes out of the crisis. It is in this context that the transition to a post-Fordist techno-economic paradigm is prompting a reorientation of the state’s principal economic functions. For the combination of the late Fordist trend towards internationalization and the post-Fordist stress on flexible production encourages policy-makers to focus on the supply-side problem of international competitiveness and to attempt to subordinate welfare policy to the demands of flexibility. This is the shift from the Keynesian welfare state to the Schumpeterian workfare state. In identifying this shift I am not implying that the ‘motley diversity’ of political regimes will disappear with the transition to post-Fordism. A general trend does seem to be emerging, however, both in official discourse and in de facto shifts in forms of state intervention.

Fourth, the macro-economic global hierarchy is being redefined with growing awareness of the central importance of three supra-national growth poles. These are based on the regional hegemonies of the USA, Japan, and Germany and reflected in attempts to create a North American Free Trade Area, a European Economic Space, and an Asian Pacific Economic Community. There is already a major material base to these latter developments with the growing intensity of internal trade in each bloc. Nonetheless, the seemingly inevitable rise of such ‘triad power’ is confronted with three important counter-tendencies: the growing interpenetration of the so-called triad powers themselves, changes in the national hierarchies within each triadic region, and the gradual re-emergence of regional economies within national economies. What we are actually seeing is a re-shaping of the hierarchy of regions on all spatial scales from ‘world regions’ (triads) through international regions and nation-states to intra-state regions and localities.[8] Transnational firms and banks are major players in this reshaping process but, as noted above, they are often aided and abetted in this regard by national states. As these complex and contradictory processes unfold, however, states must also tackle the many domestic repercussions of global restructuring. This requires the re-positioning of states in the international system as well as the restructuring and reorientation of state agencies at home. Nonetheless the ‘hollowing out’ of the national state thereby generated typically acquires a marked regional dimension as state apparatuses at different levels seek to move beyond simple reaction to adopt a proactive role. This in turn indicates the need for clear alliance strategies among states on different regional scales to provide the basis for economic and political survival as the imperatives of structural competitiveness make themselves felt. The nature of these alliances will vary with the position of the economies concerned in the international hierarchy. Thus, while a small open economy might well seek closer integration with the dominant economic power in its immediate triadic growth pole, the dominant power itself might well seek not only selectively to bind neighbouring economies into its strategic economic orbit but also to enter alliances with other dominant triad powers. Exactly how these strategies work themselves out cannot be determined at this level of analysis, however, depending as it does on the changing balance of forces and different modes of strategic calculation.­ This in turn will fundamentally affect the various forms taken by ‘hollowing out’.

III. Once more on the Schumpeterian Workfare State

In suggesting the label, Schumpeterian workfare state, for the emergent state form I have deliberately chosen a term to make the contrast with the Keynesian welfare state as stark as possible. In many cases, of course, the opposition will be less marked. Yet this contrast can be justified on both critical and heuristic grounds. Many commentators suggest that international Keynesianism would restore the conditions for global expansion and/or that the welfare state is an irreversible historical achievement.[9]My aim is to show that, while the capitalist state is necessarily involved in securing the conditions for economic and social reproduction, this involvement need not take a KWS form. Indeed, the current restructuring in capital accumulation in its inclusive sense would actually seem to require a break with the KWS. That some states may be unable to effect the necessary changes would only undermine this claim if they could compete successfully in the new global economy while retaining this earlier form.

Nonetheless, to avoid misunderstanding, it is worth making two definitional remarks. First, in referring to ‘Schumpeterianism’ to characterize the state’s new role in economic reproduction, I do not wish to suggest that Schumpeter himself advocated the SWS in all its complexity and variety. Nor, of course, did Keynes do this for the KWS. In both cases we are dealing with authors of an emblematic body of work: Keynes was often cited to justify the increasing concern with the state’s possible role in securing full employment; Schumpeter is being rediscovered as a theorist of the motive force of innovation in long waves. Thus the contrast between the two economists is far more specific than would be implied in any simple contrast between concerns with the demand- and supply-side respectively. For Schumpeter’s interest in the latter differed markedly from that of economists such as Hayek, Friedman, or Laffer. It is the supply of innovation that was central to his analysis of capitalist growth dynamics rather than the supply-side implications of liberty, money, or taxation. And it is innovation-driven structural competitiveness that is becoming central to the successful performance of the economic functions of the contemporary capitalist state. Similarly, in adopting ‘workfare’ to identify a second key aspect of the emergent state form, I am not claiming that a precondition of welfare support for the able-bodied is to work, re-train, or prove a willingness to do so. Instead I want to highlight a major reorientation of social policy: away from redistributive concerns based on expanding welfare rights in a nation-state towards more productivist and cost-saving concerns in an open economy. In this regard, the more usual meaning of workfare is merely a special, neoliberal example of the more general trend in the reorganization of the state’s role in promoting social reproduction. For the moment I want to concentrate on the general trends and defer a review of their variant forms.

The distinctive features of the Schumpeterian workfare state are: a concern to promote innovation and structural competitiveness in the field of economic policy; and a concern to promote flexibility and competitiveness in the field of social policy. Naturally the SWS will also express other concerns and perform many other functions typical of capitalist states but it is the combination of these twin concerns, together with their implications for the overall functioning of the state that differentiate it from other capitalist regimes. Together they become an integral part of its accumulation strategy and are also reflected in the state and hegemonic projects with which it is associated. Thus, while most advanced capitalist states have some form of innovation policy, the SWS is distinctive for its explicit, strategically self-conscious concern with promoting innovation and for its broad interpretation of the factors bearing on successful innovation. Likewise, while most advanced capitalist states have some form of competition policy, the SWS is distinctive for its explicit, strategically self-conscious concern with the many and varied conditions that make for structural competitiveness in open economies. Similarly, turning to SWS social policy, while concern with training and labor market functioning has long been a feature of state involvement in the social reproduction of labor-power, flexibility has been accorded greater weight and acquired new connotations in both fields. Complementing these various new strategic concerns in economic and social policy has been the demotion or even rejection of other, earlier policy objectives. Thus, while the KWS was committed to securing full employment, the SWS demotes this goal in favour of promoting structural competitiveness. Similarly, while the KWS tried to extend the social rights of its citizens, the SWS is concerned to provide welfare services that benefit business with the result that individual needs take second place.

Implicit in the preceding paragraph is the crucial working assumption that the rise of the SWS is reflected in, and reinforced by, changes in economic discourse, modes of calculation, and strategic concepts. Such changes are an important correlate of the restructuring and reorientation of the national state in the current period. They provide an important mediating link between the structural changes in the global economy and the transformation of the state by providing an interpretative framework within which to make sense of these changes, the crises that often accompany them, and the responses that might be appropriate to them. One particularly telling discursive-strategic shift in the transition from the KWS to the SWS is the demotion of concern with ‘productivity’ and ‘planning’ and the emphasis now put on the need for ‘flexibility’ and ‘entrepreneurialism’. It is the articulation of these and related discursive-strategic shifts into new accumulation strategies, state projects, and hegemonic projects and their capacity to mobilize support and deliver effective state policies that helps to shape the restructuring and reorientation of the contemporary state and to produce different regulatory regimes (see section VI). And it is precisely the need for such mediation as well as, for example, variability in state capacities that ensure that successful consolidation of a Schumpeterian workfare state is far from automatic.

Let us now consider how the respective economic and social functions of the KWS and SWS are reflected in two major structural (as opposed to discursive-strategic) features of the two regimes. These concern the articulation of the money, wage, and state forms. The money and wage forms both embody the structural contradictions of capital as a social relation and thereby give rise to strategic dilemmas. One expression of this in the money form is the fact that it can circulate both as a national money and as an international currency. In the case of the wage form, there is a contradiction between its function as a cost to capital and a source of demand. These contradictions are reflected in quite different ways in Keynesian welfare and Schumpeterian workfare regimes.

First, whereas money functions primarily as a national money in the KWS and its circulation within the national economy is controlled by the national state, in the SWS this position is threatened by increasing cross-border flows of financial capital and their adverse implications for monetary control by national states.[10] Indeed the crisis of national money is a major contributory factor to the crisis of the Keynesian welfare state. Recognition of national economic vulnerability to massive and volatile currency movements is central to the SWS. For, if the strength of the national money increasingly depends on the competitive strength of the national economy in an increasingly open world economy, then economic intervention must increasingly take the form of guiding supply-side developments rather than trying in vain to manage the demand-side. In turn this reinforces the need for spending to serve productive and competitive needs even in the erstwhile welfare state.

Second, while the wage functioned primarily as a source of demand within the KWS, it is seen primarily as a production cost in the SWS. In the former, growth in wages served capital’s interests in attaining full capacity utilization in a closed economy in which mass production was dominant. Provided that wages and productivity in the consumer goods sector moved in a similar range, this would offset any tendencies towards a crisis of underconsumption due to insufficient demand or a wage-induced profits squeeze.[11]The KWS contributed to this result by legitimating collective bargaining, generalizing norms of mass consumption, and engaging in contra-cyclical demand management. But the growing internationalization accompanying the final stages of Fordism transforms this situation: wages are increasingly seen as a cost of production. Where this is seen as a fixed cost (e.g., core workforces in Japan or Germany), this can encourage innovation and reskilling in order to retain a high-wage, high-growth accumulation strategy. Conversely, where it is seen as a variable cost (as in the differently organized British and American cases), ‘short-termism’ and ‘hire-and-fire’ may result in the hope that neo-liberal flexibility may help to sustain competitiveness. Since such remarks highlight the need to discuss variant forms of the SWS, however, further discussion will be deferred to the appropriate section.

Let me end with two more substantive caveats.[12]First, in identifying the SWS with supply-side intervention, I am not implying that it can safely ignore the demand-side. It is quite clear that the continuing crisis of Fordism and the current transition to post-Fordism are both linked to problems on the demand side. Excessive budgetary deficits, overly restrictive monetary policies, and frequent and large international current account imbalances have all created serious impediments to the creation of a new long wave of economic expansion. But these problems are exacerbated by the global trends noted above and so demand international as well as national solutions: this is reflected in calls for international Keynesianism as well as national efforts to manage these demand-side problems by restructuring social policy in accordance with workfare principles. It is the increasingly international character of these demand-side problems that reinforces the ‘hollowing out’ process noted above. And this in turn creates space for increasing supply-side intervention by the national and regional state. Second, and conversely, designating the postwar state form as just ‘Keynesian’ would seem to downplay its contributions to the supply of technological innovation through increased support for science, massive funding of higher education, and often vast military support for R&D. But here too it is important to emphasise how the four global trends noted above fundamentally transform the relationship between such demand- and supply-side policies. Whereas KWS supply-side policies were shaped by the Fordist paradigm with its emphasis on economies of scale, big science, and productivity growth, SWS supply-side policies are oriented to permanent innovation, economies of scope, and structural competitiveness. This puts a far greater premium on the self-reflexive management of the national innovation system and the capacity for institutional learning than would have been typical of the Fordist KWS.

IV. ‘Hollowing Out’ and the Development of the SWS

A further key aspect of the development of the SWS is the national state’s subjection to a complex series of changes that result in its ‘hollowing out’. This term is intentionally reminiscent of ‘hollow corporations’, i.e., transnationals headquartered in one country whose operations are mostly pursued elsewhere. By analogy the ‘hollow state’ metaphor is intended to indicate two trends: first, that the national state retains many of its headquarters functions – including the trappings of central executive authority and national sovereignty as well as the discourses that sustain them; and, second, that its capacities to translate this authority and sovereignty into effective control are becoming limited by a complex displacement of powers. The resulting changes in the formal articulation and operational autonomy of national states have major repercussions on forms of representation, intervention, internal hierarchies, social bases, and state projects across all levels of state organization.

First, the role of supra-national state systems is expanding. Such international, transnational, and pan-regional bodies are not new in themselves: they have a long history. What is significant today is the sheer increase in their number, the growth in their territorial scope, and their acquisition of important new functions. This reflects the steady emergence of a world society rooted in a growing number of global functional systems (economic, scientific, legal, political, military, etc.) and in wider recognition of the global reach of old and new risks. One of the major areas for this functional expansion is supra-national bodies’ concern with structural competitiveness within the territories that they manage. This goes well beyond concern with managing international monetary relations, foreign investment, or trade to encompass a wide range of supply-side factors, both economic and extra-economic in nature.

This shift is particularly clear in the European Community. Thus, following a series of relatively ineffective attempts at concerted crisis management in various declining industries in the late 1960s and early 1970s, attention has turned to supply-side issues in new products and processes bearing above all on structural competitiveness. The EC is attempting to create world class competitors in R&D-intensive, high value-added, and high growth sectors not only by establishing the basis for the emergence of Eurofirms but also by encouraging strategic alliances of various kinds. Key areas targeted for intervention include: information technology; manufacturing technology; telecoms; biotechnology; new materials; and marine science and technology. The objective of the Commission in this regard is to stimulate cooperation between firms, laboratories and universities throughout Europe in developing new technologies and new products that will meet existing or potential market needs.[13] Such policies can have significant ‘multiplier’ and ‘inhibitor’ effects on the national, regional, and local levels. They can have a significant demonstration effect and promote technological and institutional learning throughout the Community – especially where responsive states, matching funds, and able partners are available at lower levels. But they can also pre-empt or over-shadow lower level initiatives; or fail because adequate transmission belts are lacking at these levels. In addition EC policies can fail because they are biased against ‘more diverse, smaller-scaled, and socially oriented projects that would be better suited to local conditions’.[14]In short, cross-territorial coordination would seem necessary for the success of these SWS policies. Without it, top-down policies could easily lead to implementation failure and bottom-up policies to wasteful and ineffective ‘municipal mercantilism’.[15]

Second, in tandem with the rise of international state apparatuses, we find a stronger role for the local state. This reflects growing internationalization as well as the economic retreat of the nation-state. For globalization means that ‘the local economy can only be seen as a node within a global economic network (with) no meaningful existence outside this context’.[16] During the Fordist era, local states operated as extensions of the central Keynesian welfare state and regional policy was mainly oriented to the (re-)location of industry in the interests of spreading full employment and reducing inflationary pressures due to localized overheating. Such states provided local infrastructure to support Fordist mass production, promoted collective consumption and local welfare state policies, and, in some cases (especially as the crisis of Fordism unfolded), engaged in competitive subsidies to attract new jobs or prevent the loss of established jobs. In the wake of Fordist crisis, however, local economic activities involve greater emphasis on economic regeneration and competitiveness. The central concern is ‘how state institutions can shape regional economies to make them more competitive in the new world economy’.[17] There is growing interest in regional labor market policies, education and training, technology transfer, local venture capital, innovation centres, science parks, and so on. This led van Hoogstraten to suggest that the state, ‘although badly challenged at the national level because of its Fordist involvement with crisis management, seems to have risen from the ashes at the regional and local level’.[18]

In turn this is linked to the reorganization of the local state as new forms of local partnership emerge to guide and promote the development of local resources. Economic regeneration involves more than a technical fix and calls for coordinated action in areas such as education policy, training, infrastructural provision, the availability of venture capital, cultural policy, and so on. In turn this leads to the involvement of local unions, local chambers of commerce, local venture capital, local education bodies, local research centres as well as local states. This trend is reinforced by the inability of the central state to pursue sufficiently differentiated and sensitive programmes to tackle the specific problems of particular localities. It therefore devolves such tasks to local states and provides the latter with general support and resources.[19]More optimistic accounts of this trend see it leading to a confederation of job-creating, risk-sharing local states rooted in strong regional economies that provide reciprocal support in the ongoing struggle to retain a competitive edge.[20] But more pessimistic scenarios anticipate growing polarization in localities as well as increased regional inequalities.

Third, closely linked to the first two changes, there are growing links among local states. Indeed Dyson writes that ‘one of the most interesting political developments since the 1970s has been the erratic but gradual shift of ever more local authorities from an identification of their role in purely national terms towards a new interest in trans-national relationships’.[21] In Europe this involves both vertical links with EC institutions, especially the European Commission, and direct links among local and regional authorities in member states. The search for cross-border support is strengthened to the extent that the central state pursues a more neo-liberal strategy but it can be found in other countries too.[22] Similar trends are discernible in East Asia (notably in links between Hong Kong, Macao, and Guangdong and in the so-called ‘growth triangle’ formed by Singapore, Johor, and Riau). As yet this third trend is less marked in North America (even though the entrepreneurial city and local state have seen remarkable expansion). But striking examples can be found in the expansion of trans-border cooperation of linked cities along the US-Mexican boundary. And, even in the USA itself, the growth of subnational links across nations has led Duchachek to talk of the spread of ‘perforated sovereignty'[23] as nations become more open to trans-sovereign contacts at both local and regional level.

V. Post-Fordism and the SWS

The concept of post-Fordism can be applied meaningfully only if there are both continuities and discontinuities in the development of the accumulation regime and its mode of social regulation: without continuities, the new system could not be said to be post-Fordist; without discontinuities, it could not be post-Fordist. In this context one could regard the continuities as mediated through the crises of Fordism and the discontinuities as introduced by structural and/or strategic changes that might resolve for a significant time the crises in Fordist modes of growth and regulation and/or create the conditions for non-Fordist accumulation and regulation to succeed. Thus we can regard the SWS as post-Fordist to the extent that: it directly or indirectly resolves (or is held to do so) the crisis tendencies of Fordist accumulation and/or of the KWS as one of its main regulatory forms; its emergence (for whatever reason) helps to shape and consolidate the dynamic of the emerging global economy and thereby encourages the renewal and re-regulation of capitalism after its Fordist period; and its alleged contribution to competitiveness in some economies (even if they themselves were never really Fordist) leads to its acquiring paradigmatic status elsewhere as the key to the regeneration and/or reregulation of a capitalist growth dynamic (cf. section 1.4 above).

The Schumpeterian workfare state would seem to satisfy to some extent all three potential criteria. I do not wish to imply here that the SWS alone could ever resolve all the crisis tendencies of Fordism, preside single-handedly over the rise and consolidation of post-Fordism, or totally exclude all other strategic paradigms. Indeed the very concept of the social mode of regulation implies that other changes would also be needed in the wage form, corporate organization, forms of competition, innovation systems, and so forth, for fundamental crises in accumulation regimes to be resolved. Likewise, regarding the strategic moment of restructuring and re-regulation, there are few limits to the operation of the economic and political imaginary. Nonetheless, restructuring and reorientation of the state system do have a major role to play in shaping the transition from Fordism to post-Fordism both directly and through their repercussions on transformations in other regulatory domains.

Before considering possible grounds for describing the SWS as post-Fordist, let us consider some relevant crisis tendencies in the Fordist mode of growth. These include: the gradual (and always relative) exhaustion of the growth potential that came from extending mass production into new branches; the relative saturation of markets for mass consumer durables; the disruption of the virtuous circle of Fordist accumulation through internationalization; the growing incoherence and ineffectiveness of national economic management as national economies become more open; the stagflationary impact of the KWS on the Fordist growth dynamic (especially where state economic intervention is too concerned with sustaining employment in sunset sectors); a growing fiscal crisis due to the ratchet-like expansion of social consumption expenditure; and an emerging crisis of social security due to the expansion of part-time, temporary, and discontinuous employment at the expense of a full-time Fordist norm. An emerging post-Fordist accumulation regime could be said to respond to these crisis tendencies in various ways. It transforms mass production and goes beyond it, segments old markets and opens new ones, is less constrained by national demand conditions but makes new demands upon regional and national innovation systems, replaces macro-economic planning in autocentric economies with supply-side flexibility in response to international turbulence, offers new ways of regenerating old industries as well as replacing them, promises new ways of organizing social consumption to reduce costs and make it more functional for business, and is able to further exploit the fragmentation and polarization of the labour force consequent upon the crisis in Fordism.

This account raises the question whether the distinctive aspects of the SWS match the dynamic of post-Fordist accumulation regimes. An affirmative answer seems to be justified if only on definitional grounds. For, given the evident crisis in the KWS that accompanies the crisis of Fordism, a consolidated SWS as defined here would clearly perform better. It engages in supply-side intervention to promote permanent innovation and enhance structural competitiveness; and it also goes beyond the mere retrenchment of social welfare to restructure and subordinate it to market forces. A less tautological answer must await specification of variant forms of the SWS and empirical assessment of the viability of these different forms in specific conjunctures.

A second approach to the correspondence between the SWS and the new global economic order relates to the four economic trends noted above. The strategic orientation of the SWS to innovation takes account of the enormous ramifications of new technologies; its concern with structural competitiveness recognizes the changing terms and conditions of international competition as well as its increased significance; its restructuring and reorientation of social reproduction towards flexibility and retrenchment signifies its awareness of the post-Fordist paradigm shift as well as the impact of internationalization on the primary functions of money and wages; and its complex ‘hollowing out’ reflects the complex dialectic between globalization and regionalization. In short, for all four trends, a ‘hollowed out’ SWS could help both to shape and consolidate key features of the new regime of accumulation on a world scale. This approach must also rely largely on assertion for its persuasive effect until the effectiveness of specific SWS regimes (and alternative modes of social regulation of the emerging global order) have been properly examined.

A third approach is more promising for present purposes, however, since its persuasive force depends on past performance rather than possible post-Fordist futures. It would involve demonstrating that those economies that have grown most rapidly during the global crisis of Fordism and that have become models for those in crisis are especially advanced in developing Schumpeterian workfare state regimes. Among the most prominent examples might be Japan, Germany, South Korea, Taiwan, Brazil, the Third Italy, and some of the most successful regional economies in otherwise crisis-prone economies. Even if it would be wrong to categorize all these national and/or regional economies as literally post-Fordist (because they were never truly Fordist), their increasing role as exemplars of alternative (and apparently successful) trajectories for Fordist regimes in crisis does mean that they have a paradigmatic post-Fordist status.

VI. Alternative SWS Strategies

The various economic and political tendencies noted above can be (and often are) integrated and expressed in quite different discourses and are associated with contrasting strategic conclusions as different forces seek to make sense of the conflicting tendencies and counter-tendencies at work in the new global economy. There is extensive improvisation and trial-and-error involved in the current changes and no clearly dominant pattern has yet emerged. For heuristic purposes, however, one can posit three ideal-typical forms: neo-liberal, neo-corporatist, and neo-statist. In using the prefix ‘neo-‘ to identify them, I want to emphasize that all three would embody important discontinuities with the liberal, corporatist, and statist KWS regimes linked to Fordism. And, in identifying them here as ideal-types, I want to emphasize that it is unlikely they will be found in pure form. The particular strategy mixes to be found in individual cases will depend on institutional legacies, the balance of political forces, and the changing economic and political conjunctures in which different strategies are pursued.

Neo-liberalism is concerned to promote a market-led transition towards the new economic regime. For the public sector, it involves privatization, liberalization, and imposition of commercial criteria in the residual state sector; for the private sector, it involves deregulation and a new legal and political framework to provide passive support for market solutions. This is reflected in government promotion of ‘hire-and-fire’, flexi-time, and flexi-wage labor markets; growth of tax expenditures steered by private initiatives based on fiscal subsidies for favoured economic activities; measures to transform the welfare state into a means of supporting and subsidizing low wages as well as to enhance the disciplinary force of social security measures and programmes; and the more general reorientation of economic and social policy to the perceived needs of the private sector. Coupled with such measures is disavowal of social partnership in favour of managerial prerogatives, market forces, and a strong state. Neo-liberalism also involves a cosmopolitan approach that welcomes internationalization of domestic economic space in the form of both outward and inward investment and also calls for the liberalization of international trade and investment within regional blocs and more generally. Innovation is expected to follow spontaneously from the liberation of the animal spirits of individual entrepreneurs as they take advantage of incentives in the new market-led climate and from the more general government promotion of an enterprise culture. In turn national competitiveness is understood as the aggregate effect of the micro-economic competitiveness of individual firms. Hence there is little state concern to maintain a sufficiently deep and coherent set of core economic competences in the home economy and/or adequate national or regional innovation systems to provide the basis for structural competitiveness. In this context local and international state apparatuses are expected to act as relays for the market-led approach to innovation and workfare. While neo-liberalism is sometimes said to involve a return to the free market and the liberal state, neither is really feasible in current conditions. Thus it typically involves the subordination of small and medium enterprises to new forms of monopolistic competition on a global scale. Likewise, even if national and local states adopt a laissez-faire role in the hope of generating an entrepreneurial culture, they must still prove strong enough both to dismantle and replace the old mode of social regulation and to resist subsequent political pressures for all manner of ad hoc interventions for short-term economic or political advantage. These are not easy tasks.

Neo-corporatism relies on institutionalization of a continuing, negotiated, concerted approach to the economic strategies, decisions and conduct of economic agents. Based on a self-reflexive understanding of the linkages between their own private economic interests and the importance of collective agreements to the stability of a socially embedded, socially regulated economy, the economic forces involved in neo-corporatism strive to balance competition and cooperation. Influenced by the four global trends noted above, however, this system differs from Fordist corporatism based on the dominance of mass production and mass unions and on the primacy of full employment and stagflation as economic concerns. Thus the scope of neo-corporatist arrangements reflects the diversity of policy communities and networks relevant to an innovation-driven mode of growth as well as the increasing heterogeneity of labor forces and labor markets. Neo-corporatist arrangements in an emerging SWS are also more directly and explicitly oriented to the crucial importance of innovation and structural competitiveness. They will extend beyond business associations and labor unions to include policy communities representing distinct functional systems (e.g., science, health, education); and policy implementation will become more flexible through the extension of ‘regulated self-regulation’ and private interest government so that there is less direct state involvement in managing the ‘supply-side’ and more emphasis on private industrial policies. Corporatist arrangements may also become more selective (e.g., excluding some previously entrenched industrial interests and peripheral or marginal workers, integrating some ‘sunrise’ sectors and giving more weight to core workers); and, reflecting the greater flexibility and decentralization of key features of the post-Fordist economy, the centres of neo-corporatist gravity will move toward the micro-level of firms and localities at the expense of centralized macro-economic concertation. This is certainly not inconsistent with ‘bottom-up’ neo-corporatist linkages connecting firms and/or localities in different national economic spaces and by-passing central government. Whether at local, national, or supranational level, the state is just as involved in such neo-corporatist strategies as it is in the neo-liberal and neo-statist approaches. Its resources and actions are used to back or support the decisions reached through corporatist negotiation, however, rather than to promote either neo-liberal disengagement or autonomous, pro-active, neo-statist initiatives. And this in turn means that compliance with state policies is either voluntary or depends on actions taken by self-regulating corporatist organizations endowed with public status.

Neo-statism involves a market-conforming but state-sponsored approach to economic reorganization in which the state intervenes to guide the development of market forces. It does so through deploying its own powers of imperative coordination, its own economic resources and activities, and its own knowledge bases and organizational intelligence. In deploying these various resources in support of a national accumulation strategy, however, it is well aware of the changing nature of international competition. It involves a mixture of decommodification, state-sponsored flexibility, and other state activities aimed at securing the dynamic efficiency of a productive core. This is reflected in an active structural policy in which the state sets strategic targets relating to new technologies, technology transfer, innovation systems, infrastructure, and other factors affecting the overall structural competitiveness of the economy. It favours an active labor market policy to re-skill the labor force and to encourage a flexi-skill rather than flexi-price labor market; it intervenes directly and openly with its own political and economic resources to restructure declining industries and to promote sunrise sectors; and it engages in a range of societal guidance strategies based on its own strategic intelligence and economic resources to promote specific objectives through concerted action with varied policy communities that embrace public, mixed, and private interests. These activities aim to move the domestic economy up the technological hierarchy by creating and maintaining a coherent and competitive productive base and pursuing a strategy of flexible specialization in specific high technology sectors. While the central state retains a key strategic role in these areas, it also allows and encourages parallel and complementary activities at regional and/or local levels. But its desire to protect the core technological and economic competences of its productive base is often associated with neo-mercantilism at the supra-national level.

Elements of these strategies can certainly be combined. This can be seen at all levels of political intervention. In the European Community, for example, we find: a) the single market strategy is premised on a neo-liberal approach to competitiveness – creating a European-wide market through liberalization, deregulation, and internationalization; b) a neo-statist strategy in which the EC coordinates networks linking different levels of government in different states as well as semi-public and private agencies ranging from educational institutions, research institutes, enterprises, and banks in order to promote new technologies, technology transfer, etc.; and c) a neo-corporatist strategy oriented to a Social Charter that will prevent ‘social dumping’ and thereby underpin attempts to re-skill and retrain workers in the interests of more flexible, responsible work.[24]These approaches may not be inconsistent. The European Commission has even argued (not without a hint of special pleading and political fudging) that the neo-liberal elements of its strategy for structural competitiveness could be viewed as its catalysts and the neo-statist elements as its accelerators. It also suggests that some aspects of the neo-corporatist project could be seen as prerequisites of structural adjustment and enhanced competitiveness insofar as they promote economic and social cohesion.[25]

Different strategies are also found inside each European state. Thatcherism clearly involves the dominance of a neo-liberal strategy, for example, but it has not totally rejected other strategies. Thus central government programmes (admittedly on a small-scale) have been oriented to technology transfer and research into generic technologies; and, notwithstanding blanket hostility to tripartite corporatism and national-level social partnership, it has promoted enterprise corporatism and a ‘new realism’ on the shop floor. Moreover, while central government has been in retreat, there has been a real proliferation of local economic development initiatives along SWS lines. Under Labour-led local authorities these have often been run on neo-corporatist or neo-statist lines; while Conservative authorities have inclined more to neo-liberalism or neo-corporatism without organized labor. Varying combinations of strategies can also be found in other European states and in other triad regions.

There are often good reasons for such variety – notably in differing local conditions that are best dealt with close to the ground. But overall national economic competitiveness requires that central government coordinates and supports these efforts. For effective ‘decentralisation on a territorial basis requires an adequate allocation of responsibilities between communal, regional and national authorities as well as a proper coordination of their actions’.[26] This is especially important where economic initiatives involve not only different tiers of government but also business associations and private bodies. Thus it is essential to establish new institutional arrangements and allocate specific roles and complementary competences across different spatial scales and/or types of actor and thereby ensure that the dominant strategic line is translated into effective action.[27]

VII. Concluding Remarks

This paper has covered much ground by moving at high levels of theoretical abstraction, generality, and ideal-typicality. Much more work is required to make the arguments more concrete and more complex and thereby specify the nature of the SWS in particular cases. This in turn involves transforming concepts already introduced at higher levels of abstraction and simplicity. Some methodological guidelines for this have been introduced in earlier remarks on regulation theory.[28]Rather than taking this exercise further in these concluding remarks, however, I will re-present the key arguments in the light of the initial efforts at concretization and specification given above.

First, I have argued that the Keynesian welfare state policy paradigm and its associated state form are in terminal decline.[29] I have linked this not just to the mid-70s crisis of the Fordist accumulation regime with which the KWS is so often coupled but also to the more general restructuring of the world economy that has gathered pace from the mid-70s onwards. I have also argued that the next policy paradigm and state form can be usefully described as a Schumpeterian workfare state. Moreover, while the KWS was typically organized as a national state with local relays, the SWS is assuming a more dispersed, ‘hollowed out’ form. In addition I have suggested why this could prove to be the most appropriate general state form for a post-Fordist mode of growth in the emerging global economy.

Second, regardless of the power of the claims about a current transition from the national Keynesian welfare state to the ‘hollowed out’ Schumpeterian workfare state, I have tried to explain why I think the emergence of the latter is increasingly evident throughout the world economy. I have related this to four trends in the global economy. All four must be included to provide a plausible account: the paradigm shift from Fordism to post-Fordism, for example, neglects the technological developments encouraging a Schumpeterian role for the state; likewise, post-Fordism and new technologies without increasing internationalization would be insufficient to explain the growing emphasis on structural competitiveness and the residualization of welfare; regionalization adds a further dimension in both economic and political terms. There is still much to be done in exploring the interaction among these factors and their implications for the transformation of the state. More detailed work on modes of growth and modes of adhesion to the global economy would help us to assess the most likely forms the SWS might assume.[30]

There are at least three potential problems with this line of analysis, which its preliminary and rather speculative status prevents from being too readily dismissed. These concern the precise theoretical character of the arguments so far deployed in defense of the SWS thesis, the dangers of operating with a simple dualistic contrast between the KWS and SWS, and the issue of the real empirical and practical scope of the overall argument.

First, my analysis could be accused of functionalism, capital-theoretical reductionism, or structuralism (or all three). Yet what is involved here is a thought-experiment prompted by observation of some general trends. I am trying to theorize the state form appropriate to a future post-Fordist accumulation regime and doing so at a high level of abstraction. Such accounts necessarily tend to be functionalist, capital-theoretical, and structuralist. However, as the analysis becomes more concrete and complex, it should be possible to redefine the terms of the argument. Thus one would examine the structural coupling between each mode of growth and its distinctive political regime and the regulatory problems this creates; the complexities of the capital relation in each regime type and its implications for the forms of economic and political struggle over crisis-resolution; the path-dependency of the trajectory out of crisis that emerges in and through such struggles; and even the problems that arise when the pre-SWS lacks the capacities to manage the transition.[31]

Second, since my analysis has operated mainly in terms of a global contrast between the KWS and the SWS, it could be argued that it subsumes too much under too dualistic a set of concepts. It is not my intention to adopt such a subsumptionist approach, however; and I have tried to note both the variant forms of each form of regulatory regime as well as the limited extent of each. In subsequent work it would be important to explore other forms of articulation between the economic and social roles of the state in relation to different accumulation regimes and other aspects of modes of social regulation.

Finally, it could well be noted that the Keynesian welfare state was by no means universal in the postwar advanced capitalist economies. This is particularly clear for those European economies that discovered complementary non-Fordist niches in the emerging global economy and those export-oriented East Asian economies that by-passed the KWS to develop supply-side oriented workfare regimes. But it is surely interesting to note that the non-Fordist niche economies in Europe were often obliged to adopt a more rigorous supply-side policy at an earlier stage and to manage their welfare regimes with greater regard to problems of competitiveness than was true of more Fordist economies in Europe and North America. In this sense they prefigured the SWS in crucial respects. This is even more obviously the case for East Asia. For Japan, the four Asian tigers, and third-tier NICs in the Pacific Rim owe their remarkable economic success in part to their having been able to by-pass (for various reasons) Keynesian welfare concerns in favour of accumulation strategies that prioritized the supply-side. In turn it is the very success of the Japanese road that is now reinforcing pressures in the other two triadic growth poles to abandon the KWS for Schumpeterian workfare strategies. For, while Marx noted that ‘competition makes the immanent laws of capitalist production to be felt by each individual capitalist, as external coercive laws’,[32]individual economies with their innovation systems can be made to feel these laws through the operation of Schumpeterian competition. This is the key mechanism that leads me to believe that we will witness the continuing consolidation of the ‘hollowed out Schumpeterian workfare state’ in successful capitalist economies. Economic spaces that fail to make this transition in some form or other will fall down the global hierarchy of economic spaces and/or be marginalized. This does not exclude struggles over the future forms of the post-Fordist SWS: it makes them even more imperative.


* This is a revised and shortened version of a paper first given at the Eighth Conference of Europeanists, Chicago, 26-28 March 1992; it has benefitted greatly from the comments of Bill Carroll, Colin Hay, Jane Jenson, Rianne Mahon, Klaus Nielsen, Leo Panitch, Sum Ngai-Ling, and David Wolfe. An unfortunate effect of the paper’s abbreviation has been the excision of many references and supporting examples.

[1] The reference is to Gramsci’s analysis of lo stato integrale (the state in its inclusive sense) in terms of ‘political society + civil society’. See A. Gramsci, Selections from the Prison Notebooks (London: Lawrence and Wishart, 1971). Gramsci’s state theory is compared with the ‘integral economic’ approach implicit in regulation theory in B. Jessop, ‘Regulation und Politik: “Integral Economy” und “Integral State”‘, in A. Demirović et al. (eds.), Akkumulation, Hegemonie und Staat (Münster: Westfälisches Dampfboot Verlag, in press).

[2] The forms, functions, and activities of the state cannot be reduced to its role in regulating the economy in its inclusive sense. In approaching it from an integral economic viewpoint one necessarily produces a partial account of the state; just as an integral political approach to the economy would produce a partial account of the latter – limited in Gramsci’s case, for example, to its role in securing the decisive economic nucleus of an historic bloc. For further comments, see B. Jessop, State Theory: Putting Capitalist States in their Place (Cambridge: Polity, 1990).

[3]I am well aware of the many difficulties involved in deploying terms such as Fordism and, even more seriously, post-Fordism; nonetheless for some purposes they can do real theoretical work and/or have real empirical relevance. See B. Jessop, “Fordism and post-Fordism: a critical reformulation,” in A.J. Scott and M.l. Storper (eds.), Pathways to Regionalism and Industrial Development (London: Routledge, 1992), pp. 43-5.

[4] At least in the view of A. Cochrane, ‘Is there a future for local government? Critical Social Policy, 32, 1992, p. 5. In an earlier paper, I simply referred to it as the post-Fordist welfare state but this term lacks both formal and functional specificity: see B. Jessop, ‘The Welfare State in the Transition from Fordism to Post-Fordism’, in B. Jessop et al. (eds.), The Politics of Flexibility (Aldershot: Edward Elgar, 1991), pp. 82-104.

[5] Structural coupling occurs when two or more operationally autonomous but otherwise interdependent systems co-exist in the same environment and react both to changes in that environment and to each others’ reactions; intertwined in this way, they also co-evolve in a partly contingent, partly path-dependent manner. For more information on these concepts, see Jessop, State Theory, pp. 327-329.

[6] In this context I follow analysts such as van der Pijl in viewing Fordism as an accumulation regime whose growth dynamic was rooted in the diffusion of the US-American industrial paradigm to north-western Europe. See K. van der Pijl, The Making of an Atlantic Ruling Class (London: NLB, 1984). I would add that a number of non-Fordist economies whose growth dynamic proved complementary to that of the dominant Fordist regime were also able to expand significantly during the long postwar boom (these included Canada and several European economies). In both contexts there was a tendential emergence of the Keynesian welfare state mode of social regulation (cf. G. Esping-Andersen, Politics against Markets, Ithaca: Cornell University Press, 1985),

[7] F. Chesnais, ‘Science, Technology and Competitiveness’, STI Review, 1 (Autumn), 1986, pp 86-129; cf. J. Sigurdson, ‘The internationalisation of R&D – an interpretation of forces and responses’, in J. Sigurdson, (ed.), Measuring the dynamics of technological change, (London: Pinter, 1990), pp. 171-195.

[8]P.I.Taylor, “A theory and practice of regions: the case of Europe,’ Environment and Planning D: Society and Space 9 (2), (1991), p. 185.

[9] Thus Therborn and Roebroek discuss variant forms of the welfare state and then declare it irreversible (under democratic conditions); their argument depends on a simple equation between major public spending programmes and the welfare state tout court. See G. Therborn and J. Roebroek, ‘The irreversible welfare state: its recent maturation, its encounter with the economic crisis, and its future prospects’, International Journal of Health Services, 16 (3), 1986, pp. 319-57. On international Keynesianism, see, for example: M.J. Piore and C. Sabel, The Second Industrial Divide (New York: Basic Books, 1985).

[10] There is a counter-tendency to this: the formation of currency blocs in each of the triad growth poles. Monetary union in the EC is the most obvious example with the DM becoming the de facto monetary standard; the US dollar is crucial in the North American Free Trade Area; and the yen plays a key role (together with the dollar) in East Asia.

[11] See Alain Lipietz, ‘Towards global Fordism’, New Left Review, 132, 1982, pp. 33-47. Lipietz also notes the need for another proportionality to be satisfied if the virtuous circle of Fordist accumulation is to continue: that increased productivity the capital goods sector should offset the rising technical composition of capital if the capital/output ratio is not to grow and so depress profits.

[12] I am grateful to David Wolfe for pointing out the dangers of one-sided approaches to the KWS and SWS regarding the focus of state intervention.

[13]European Commission, An Industrial Strategy for Europe, European File, 4, 1986.

[14]I. Tömmel, “Regional policy in the European Community: its impact on regional policies and public administration in the Mediterranean member states,” Environment and Planning C: Government and Policy 5 (4), pp.365-381, at pp. 379-380.

[15]K. Young, “Economic development in Britain: a vacuum in central-local government relations,” Environment and Planning C: Government and Policy 4/4 (1986), pp.440-450; and R.S. Fosler (ed.), The New Economic Role of American States (New York: Oxford University Press, 1988).

[16]A. Amin and K. Robins, “The re-emergence of regional economies? The mythical geography of flexible accumulation,” Environment and Planning D: Society and Space 8/1 (1990), pp 7-34. Cf. R. Morales and C. Quandt, “The new regionalism: developing countries and regional collaborative competition,” International Journal of Urban and Regional Studies 16 (3), (1992), pp. 462-475.

[17]Cf. Fosler, New Economic Role … , p. 5.

[18]P. Van Hoogstraten, De ontwikkeling van het regionaal beleid in Nederland 1949-1977 (Nijmegen: Stichting Politiek en Ruimte, 1983), p. 17. Cf. F. Moulaert, E. Swyngedouw,and P. Wilson, “Spatial responses to Fordist and post-Fordist accumulation and regulation,” Papers of the regional Science Association” 64 (1) (1988), pp. 11-23.

[19]K.W. Dyson (ed.), Local Authorities and New Technologies: the European Dimension (London: Croom Helm, 1989), p. 118.

[20]C.F. Sabel, “Flexible specialisation and the re-emergence of regional economies,” in P.Q. Hirst and J. Zeitlin (eds), Reversing Industrial Decline? (Leamington Spa: Berg, 1989), pp. 17-70.

[21]Cf. Dyson, Local Authorities … , p. 1.

[22]Cf. the studies presented in ibid.

[23]I.D. Duchacek, D. Latouche, and G. Stevenson (eds), Perforated Sovereignties and International Relations: Trans-sovereign contacts of subnational governments (New York: Greenwood Press, 1988).

[24]See J. C. Perrin, “New technologies, local synergies and regional policies in Europe,” in P. Aydelot and D. Keeble (eds), High Technology Industry and Innovative Environments (London: Routledge,

1988), pp. 139-162; and 1. Grahl and P. Teague 1992: the Big Market (London: Lawrence and Wishart, 1991).

[25]European Commission, European Industrial Policy for the 1990s – Bulletin of the European Communities Supplement 3191 (1991), p. 23. The labels attached to these elements are mine. The EC Bulletin cited here simply lists a range of policies and describes their respective roles.

[26]Perrin, “New Technologies…,” p. 422.

[27]Cf. J. Fox Przeworski, “Changing intergovernmental relations and urban economic development,” Environment and Planning C: Government and Policy 4/4 (1986), pp. 423-438; Perrin, “New Technologies…; and T. Kawashima and W.B. Stohr 1988, “Decentralized technology policy: the case of Japan,” Environment and Planning C: Government and Policy 6/4 (1988), pp. 427-440.

[28]B. Jessop, “Regulation Theory in Retrospect and Prospect,” Economyand Society 19/2 (1990), pp. 153-216.

[29]Cf. B. Jessop, Welfare State.

[30]A good example of how this might be accomplished is provided in H. Kitschelt, “Industrial governance structures, innovation strategies, and the case of Japan: sectoral or cross-national comparative analysis”,’ International Organization 45/4 (1991), pp. 453-494.

[31]On the British case, see, for example, B. Jessop, “From social democracy to Thatcherism,’ in N. Abercrombie and A. Warde (eds), Social Change in Contemporary Britain (Cambridge: Polity, 1992), pp. 14-39.

[32] K. Marx, Capital, vol. I (London: Lawrence and Wishart, 1883), p. 555.

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