Capitalism and its Future: Remarks on Regulation, Government, and Governance

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

  ‘Capitalism and its future: remarks on regulation, government, and governance’, Review of International Political Economy, 4 (3), 435-455, 1997.


The conference which inspired this collection was explicitly concerned with the direction of contemporary capitalism. Its final plenary session, to which my own contribution was presented, addressed the historical place and destiny of capitalism.[1] Surprisingly, few papers at the conference explored the basic nature of capitalism, its genesis, overall dynamic, or future. Yet only by examining such issues can one usefully comment on the historical place, the direction, or destiny of capitalism or draw relevant political conclusions. Thus I first consider whether capitalism has a distinctive dynamic and, if so, what this might mean for its future. I argue that it does, indeed, show important developmental tendencies. However, as these are not linked to any final telos, capitalist development remains open within very broad limits. Accordingly I do not try to forecast the long-run future or ultimate destiny of capitalism. Instead I discuss several major economic changes in contemporary capitalism, consider whether they involve a break in capitalist development, and suggest some medium-term implications for the national state and governance mechanisms.

1. What is Capitalism?

Marx found capitalism’s distinctive feature as a mode of production in the generalization of the commodity form to labour-power. Money and commodities were already presupposed, of course, in market exchange and petty commodity production. But it was only when the commodity form was imposed on labour-power (often through bloody class struggles) that the self-valorization of capital became possible. Only then did the sole source of value acquire a commodity form, economic exploitation acquire its distinctive capitalist mediation through exchange relations, and the disposition of labour-power fall directly under the sway of capitalist laws of value. This last result of commodification was reinforced when labour-power was directly subsumed under capitalist control through machine-pacing in the factory system. These conditions enabled (but did not guarantee) the metamorphosis typical of capital — beginning with money capital, moving through the stages of productive capital and commercial capital, getting realized as profits in the form of money, and becoming available for fresh investment. Commodification of labour-power and its direct subsumption under capitalist control also make labour markets and the labour process alike sites of class struggle. This fundamentally affects the developmental dynamic of capitalism.[2] For it shapes the forms of economic exploitation, the nature and stakes of class struggle between capital and labour in the labour process, and the competition among capitals to secure the most effective valorization of labour-power. It also magnifies the ‘historical and moral’ element in the price of labour-power and increases the scope of struggles over the social as well as private wage.[3]

Attempts to valorize capital and contain class struggles in these conditions are the source of capitalism’s dynamism. This should not be mistaken for an endpoint towards which capitalism is ineluctably drawn (cf. Postone 1993). Even at the most abstract level of analysis, capitalism demonstrably depends on an unstable balance between its value and non-value forms, on a changing balance between (re-)commodification and decommodification. This rules out the eventual commodification of everything. Instead we find typically uneven waves of commodification, decommodification, and recommodification as the struggle to extend the value moments of the capital relation encounters real structural limits as well as increasing resistance and is then seeks to overcome these again in new ways (cf. Offe 1984). Such structural limits and contradictions (often expressed ideologically in terms of ‘market failure’) provide chances to shift direction in so far as capitalism is constantly oriented, under the pressure of competition, to new opportunities for profit. Such an orientation is, for Schumpeter, typical of entrepreneurs. It spurs innovation — in techniques, production, organization, products, markets, finance, or other features of economic activity — in the hope of securing thereby temporary competitive advantages, generating ‘rents’ beyond the average level of profit (Mandel 1970). Successful innovation in turn puts pressure on capitals to adopt the same, equivalent, or superior innovations. This helps explain the uneven and combined development of capitalism (see also Harvey 1982). But it also means that there is no pre-given trajectory to capitalist development.

2. Putting the Capitalist Economy in its Place

Despite the capacity for self-valorization facilitated by generalization of the commodity form to labour-power, the capitalist economy is not wholly self-contained. Even labour-power itself, despite its commodification, is largely reproduced outside any immediate capitalist labour process[4] — which means that the sole source of value and its bearers, the working class, are placed outside as well as inside the logic of capital. In addition, the capitalist economy is ‘structurally coupled’ to other systems with their own operational logics or instrumental rationalities and to the ‘lifeworld’ formed by various social relations, identities, interests, and values not otherwise anchored in specific systems.[5] Structural coupling involves blind co-evolution among co-existing systems and social spheres. Thus capitalism will co-evolve with other systems and the lifeworld. Changes in its environment are reflected in changes within capitalism — but always in mediated forms shaped by its own instrumental rationality or autonomous operational logic. In turn, economic changes may well produce changes elsewhere in the systemic and life worlds. These changes will likewise be mediated by the operational logics of other systems and the communicative rationalities of the lifeworld. Within this overall blind co-evolution (which always and necessarily escapes any general or global control), there is some, albeit limited, scope to try to coordinate capitalist economic development with the operations of other systems and to anchor it more firmly in the lifeworld. These attempts can take the form of top-down imperative coordination (centralized planning) or more decentralized forms of governance. It is the latter, for reasons to be explored below, that are now being emphasized in economic and political discourses and practices.

It is the combination of strategic coordination and structural coupling and their mediating role in class struggles and capitalist competition that produces a distinctive configuration of capitalism in any given conjuncture. This can be analysed in a regulationist manner as a distinctive ‘model of development’ (formed by a production paradigm, an accumulation regime, and a mode of regulation) and can also be linked to specific patterns of ‘base-superstructure’ relations and patterns of political domination (see below). In this sense capitalist development is incomprehensible without referring to its social and institutional embeddedness (with all that this implies for close linkages between economic and other activities), to the forms of social as well as economic regularization (or normalization) of profit-seeking actions in a capitalist economy, and to the ways in which resistance to such embeddedness and regularization are managed. I will deal first with two aspects of the embeddedness of capitalism within broader social relations.

First, many actors in the capitalist economy routinely monitor opportunities for profit (or other sources of revenue).[6] In pure market conditions, failure to make suitable adjustments will lead to marginalization or elimination from the market economy. Not all actors have the same capacities to engage in such monitoring, however, or to exploit any changes. For, despite the neo-liberal rhetoric of the enterprise culture and the opportunity society, there are, of course, fundamental asymmetries in structural and organizational power in the capitalist economy. In addition, some economic actors have access to other resources which enable them to survive in the market despite their inability to match socially necessary standards of productivity and performance. But it remains the case that it is through such monitoring and response that the structural coupling of the capitalist economy to its environment is mediated. For differences in the environment offer different opportunities for profit. Thus events or circumstances outside the economy (in the technology, science, political, health, education, legal, or other systems or changing lifestyles and identities) may induce changes in capitalist development by offering new opportunities for profit. This redirection may involve innovations in the labour process due to technical and/or social changes as well as in products, corporate organization, financing, markets, and so on. Varied opportunities help to explain different national, regional, or local capitalisms as well as the rise and fall of particular sectors or branches of production. Thus the American military-industrial complex is linked to its leading roles in the bipolar nuclear system and imperialist alliances and to the ideological significance of ‘national security’ and ‘anti-communism’ in US politics. Likewise the ‘social-industrial complex’ in Nordic economies can be linked to the roles of social democracy and welfare state expansion (O’Connor 1973; Esping-Andersen 1985). Similarly, Porter (1990) has related the competitive advantage of UK firms in the world art market (Sothebys, Christies, etc.) to Britain’s early industrialization, imperial role, and wealth-driven decline. Other examples include: ‘long waves’ of capitalist development associated with scientific and technological change; the rise of ecological modernization as part of Germany’s national accumulation strategy in response to the Green movement; and a ‘pink pound’ niche market reflecting changes in sexual identities and lifestyles.

Second, the capitalist economy is socially embedded and socially regularized. A detailed account of embeddedness is impossible here but would need to look at three different contexts in which economic activities may be embedded and which can serve as sites for their regularization. These contexts comprise: a) interpersonal relations; b) inter-organizational relations; and c) the inter-systemic relations among different institutional orders (for further details, Jessop 1997). Changes in these contexts may be reflected, in mediated form, in a re-direction of capitalism. Thus secular shifts in the forms and extent of interpersonal trust and networking, inter-organizational negotiation and positive coordination of activities, or inter-systemic noise reduction and negative coordination will impact on capitalism to the extent that it is socially, institutionally, and societally embedded, is guided or governed through such embedded activities, or is simply structurally coupled to these types of social context. Thus an adequate account of the capitalist economy and its dynamic should explore how it is actually embedded in a wider nexus of social relations and institutions; how its evolution is coupled to environing, embedding institutions; and how the latter assist or hinder the overall reproduction, regularization, and governance of the economy. This is especially significant at present because of the changing forms of social embeddedness and their re-articulation as capitalism becomes increasingly innovation- and information-driven, is more closely linked to so-called ‘post-industrial’ processes, and becomes more global in scope (cf. Bell 1975; Kumar 1995; Castells 1996). In short, as social embeddedness changes over time it produces a path-dependent structural coupling affecting both the economy and its environments.

3. Capitalist Societalization

Treating capitalism as a complex economic and extra-economic social relation involves a totalizing perspective. This does not mean that the totality of social relations consists in nothing more than interconnected, all-pervasive moments of the economy in its inclusive sense. For all social relations are polyvalent, can be articulated into different institutional orders, and have varying centrality to economic performance. In turn this permits alternative ‘totalizing’ perspectives. This poses an interesting issue about Marxism’s relevance to the analysis of contemporary societies. Is Marxism just one perspective among many or is it the master perspective? I suggest that it can be both. On the one hand, the critique of Marxist political economy offers a paradigm for examining the development of the capitalist economy in its broadest sense. In this sense it could co-exist with totalizing perspectives on the social embeddedness and regularization of other institutional orders. On the other hand, at least for critical realism, capitalism could also prove the dominant object of analysis in so far as capital accumulation has become the dominant principle of societalization (generator of society effects)[7] in a given social order. In this sense, the relevance and power of Marxism as a theoretical approach depends on how far contemporary societies can plausibly be described as essentially capitalist societies and all their institutions as primarily capitalist institutions.[8] If the capitalist economy is simply one institutional order among others (as argued by, for example, Giddens or Mann), the Marxist critique of political economy can at best provide one disciplinary perspective among others — although one less fetishistic, perhaps, about institutional and (hence) disciplinary boundaries than other perspectives. However, if accumulation has become the dominant principle of societal organization to the extent that it shapes the operation of all institutional orders more powerfully than they shape it, then Marxism has the potential to be the master perspective (cf. Albritton 1995, Postone 1993).

In this latter regard I differ from orthodox historical materialism because I see no reason why, even where capital is capable of self-valorization, it has to become the dominant principle of societalization. Accumulation can occur where most of the key inputs into capitalist production take the form of (perhaps fictitious) commodities; there is effective control over labour-power within the labour-process; the environment is sufficiently stable to enable capitals to orient their activities to opportunities for profit; and profits can be realized. None of this requires that the whole of society be subsumed under the commodity form and subordinated to market forces — and, indeed, as noted above, capitalism would be impossible if this were the case. But it does permit significant variation in the extent to which ‘market forces’ (and the institutional logic of profit seeking) penetrate the social.

It is in this context that I have previously distinguished between ‘economic determination’ within the capitalist economy (i.e., the iron law that ‘wealth must be produced before it can be distributed’ or, in Marxist terms, that value must be produced before it can be realized) and the notions of economic domination and economic hegemony, which denote the power of different forces in the economy and wider society. Whereas economic domination refers to the structural and organizational power of capital to secure compliance from other institutional orders with its own reproduction-régulation requirements, economic hegemony exists where a given accumulation strategy is the basis for an institutionalized compromise for co-ordinating, governing, or guiding activities within and across different institutional orders around the pursuit of a particular capitalist economic trajectory (Jessop 1982). Nothing in the economic logic of accumulation requires that ideological and political struggles must subsume other institutional orders and their logics under the principle of capital accumulation and/or colonize the ‘lifeworld’. One should always examine the historically specific conditions under which capital accumulation tends to become the structurally dominant process (or even hegemonic principle) throughout the wider society.

There are at least four interrelated ways in which this can occur. First, commodity relations can be extended into spheres not currently subject to the logic of accumulation. This can be seen in the commodification of political, educational, health, scientific, and many other activities so that they are primarily and directly oriented to opportunities for profit. Second, domains or activities that are primarily non-commercial can be distorted through the development of a secondary economic coding. This occurs when the choice among non-commercial activities in different institutional spheres is determined by calculations regarding whether it is profitable or unprofitable to apply the relevant primary code. Thus neo-liberal educational, health, scientific, and other ‘reforms’ encourage decision-makers to consider the financial impact of their operations on the individual, organizational, and institutional levels. They are now more prone to ask whether it is ‘profitable’ to make judgments on educational, medical, or scientific grounds according to their presumed primary codes. Such commercial distortions are reflected in careerism and the subversion of professional integrity; the influence of market proxies in non-commercial organizations; and the subordination of diverse institutions to the (perceived, alleged) imperatives of a strong and healthy (internationally competitive) economy.

Third, the superior dynamism and reach of a globalizing capitalist economy may cause more problems substantively for other systems than other systems cause for it. In other words, in the multilateral process of structural coupling of systems, other systems adjust more to the logic of capital than capitalism is obliged to incur costs or losses in adjusting to their respective logics. Among reasons for this asymmetrical interdependence among institutional orders one could include the capacity of the capitalist economy to escape the constraints and controls of other systems. This can occur through its own internal operations in time (discounting, insurance, risk management, futures, etc.) and space (capital flight, relocation, extra-territoriality, etc.) or through attempts to subvert these systems through personal corruption or colonization by the commodity form. And, fourth, there may be a successful hegemonic project which establishes capital accumulation as the dominant principle of societalization.

These tendencies are not generated by a telos. Each has its own roots and may even partly or wholly counteract the others. The first tendency is rooted in a search for new sources of valorization; the second is rooted in attempts to impose the economizing, profit-seeking logic of accumulation on other systems; the third is rooted in the logic of structural coupling; and the fourth is rooted in struggles for hegemony and/or asymmetric interactions between capitalism and other orders. Where these tendencies are mutually reinforcing one has the basis for what Gramsci calls an ‘historical bloc’, i.e., ‘the necessary reciprocity between structure and superstructure’ (1971: 366; see also below). And in such circumstances we can talk of capitalist society or the dominance of capitalist societalization.

Approaching capitalist societalization in these terms also enables one to identify possible sources of resistance to capitalist dominance or hegemony. Each tendency has its own limits and can generate its own form of resistance. First, in so far as the valorization has become the primary code in different domains, there can be class struggles proper. These occur both within the capitalist economy in its narrow sense — the primary field of the economic class struggle between capital and labour — and in various extra-economic contexts which facilitate capitalist exploitation. In addition, there are limits beyond which commodification can be pushed before ‘market failures’ threaten the reproduction of capital in general. Second, where another code remains primary, the imposition of profitability as a secondary code may be resisted. This is where conflicts occur between (a) the bearers of different codes and programmes which are not immediately expressed in terms of profit-and-loss and (b) those directly concerned with exchange-values and profits. Institutional orders and social relations outside the immediate logic of valorization typically have their own values and norms, bases of social inclusion or exclusion, their own forms of structured conflict, etc.. This tendency is also structurally limited by market failures of different kinds. And, regarding the third and fourth tendencies, there can be struggles around the dominant principle of societalization. These take the form of hegemonic struggles and counter-struggles over common sense, world views, etc., which posit accumulation as the necessary condition for accomplishing other social goals. Such struggles take us well beyond the ‘system world’ to include the ‘lifeworld’ or civil society. With its wide range of identities, values, and interests this is a possible source of resistance to (as well as a site for) bourgeois hegemony.

It is only through a very elastic and imprecise use of the concept that all these forms of resistance can be reduced to ‘class struggle’ alone. I prefer to restrict the latter term to struggles to establish, maintain, or restore the conditions for self-valorization within the capitalist economy understood in its inclusive sense. This certainly covers far more than trade unionist struggles over wages and working conditions. It also includes struggles over aspects of the economic and social modes of economic regulation (such as the money form, modes of competition, economic and social policy regimes, or international economic regimes). Moreover, even in this broad (but not all-embracing) context, we can usefully distinguish between the explicit ‘class consciousness’ and the actual impact of different struggles. This distinction matters because the polyvalence of struggles means their provisional outcomes can often be recuperated or subverted. Thus the class relevance of struggles is never give once-and-for-always but is both fought for and played out over time and space. There is certainly no univocal correspondence between the declared class belonging and the actual class impact of particular social movements. Nor, equally obviously, can class interests or impact be derived from abstract positions in the capital relation. Their calculation requires a strategic-relational analysis of specific conjunctures — including the extent to which accumulation is the dominant principle of societalization.

The remaining sites of resistance to capitalism are less suited to a simple class analysis. They often involve conflicts over the very principle of accumulation rather than over different class interests within capitalism. This concerns both the extension of the logic of capital to other spheres and the struggle to establish bourgeois hegemony over society as a whole. These struggles often involve popular movements organized around issues of social exclusion and marginalization and/or ‘elite’ social movements concerned to re-align diverse institutional orders, identities, and interests (on ‘elite’ social movements, see Sklair, this issue). In this context ‘civil society’ becomes a significant (albeit still imaginary) stake in many different struggles. It is the site both of colonizing struggles to integrate it more effectively into the service of specific institutional orders (e.g., through commodification, juridification, scientization, the emergence of the ‘learning society’, politicization, militarization, etc.) and also of struggles to resist and roll back such colonization attempts in defense of identities and interests that lie outside and/or cross-cut them (e.g., class, gender, race, nation, stage in the life-course, citizenship, human rights, or the environment). In this sense, then, popular or elite movements organised around extra-economic institutional orders, with their own modes of domination and exclusion and their own politics of identity and difference, have no necessary class belonging. But they still have a conjuncturally-determined — thus hard to calculate and always provisional — class relevance. The opposite problem occurs as non-class movements (such as feminism or anti-racist movements) seek to calculate the strategic or tactical value of alliances with class-based movements. All such struggles involve serious strategic dilemmas — especially over the relative weight of different bases of mobilization within broad coalitions and the risks of political fragmentation when there are many such bases and no attempts to build lasting coalitions (cf. Poulantzas 1978).

The struggle to establish accumulation as a dominant/hegemonic principle of societalization typically extends well beyond class struggles, even broadly understood. It is no accident that Gramsci, a Marxist pioneer in this field, put so much emphasis on intellectuals’ role in hegemonic struggles and linked it to the re-ordering of common sense. He also considered this issue in its structural and strategic moments — referring to the historical bloc and the hegemonic (or power) bloc respectively. Thus Gramsci employed the notion of ‘historical bloc’ to solve the Marxian problem of the reciprocal relationship between the economic ‘base’ and its politico-ideological ‘superstructure’. In particular he noted a significant ‘ethico-political’ moment to the historical bloc — arguing that values, norms, vision, discourses, linguistic forms, popular beliefs, etc., have a major role in regularizing specific productive forces and relations of production. Only thus, he writes, does the economic structure cease to be an external, constraining force and become a source of initiative and subjective freedom (Gramsci 1971: 366-7). In this spirit, an historical bloc can be defined as an historically constituted and socially reproduced correspondence between the economic base and the politico-ideological superstructures of a social formation. Conversely, Gramsci introduced the idea of ‘hegemonic bloc’ in discussing class alliances and/or national-popular forces as mobilized in support of a particular hegemonic project. Thus it refers to the historical unity, not of structures (as in the case of the historical bloc), but of social forces (which he analysed in terms of the ruling classes, supporting classes, mass movements, and intellectuals). An hegemonic bloc is a durable alliance of class forces organized by a class (or class fraction) which can exercise political, intellectual, and moral leadership over the dominant classes and popular masses. Its unity ‘results from the organic relations between State or political society and “civil society”‘ (Gramsci 1971: 52). Even allowing for Gramsci’s emphasis on the long-term and general orientation of capitalist hegemony, it is nonetheless important to concede that hegemony can be based on other principles of societalization than accumulation (e.g., the primacy of national security, theocracy, nationalism, democratization, etc.) and either subsume or oppose accumulation.

4. The Future Direction of Capitalism

I have sketched some basic theoretical elements for discussing capitalism’s future direction. It should be evident by now that I regard this as an open future rather than as being driven by a pregiven telos towards some final destination (whether triumph or collapse). This openness extends the scope and stakes of struggles over capitalism’s relationship to its institutional environment and to the lifeworld (Laclau and Mouffe 1985). But, as Wood has emphasised in response to the post-Marxist reading of this conclusion, this does not imply a wholly arbitrary, random co-variation of elements (1986). The complexities of institutional interdependencies, the path-dependent phenomenon of structural coupling, and the increasing opacity of contemporary social relations all point to the difficulty as well as necessity of investigating possible constraints on the future direction of capitalism.

My comments here are limited to the possible reorganization of the mode of societalization linked to Atlantic Fordism. Simply put, the former had three interrelated elements: a mode of economic growth based on the dominance of mass production oriented to relatively closed national markets, a political regime based on the Keynesian welfare national state, and a ‘civil society’ based on the (patriarchally-inflected) principles of a universal national citizenship and social inclusion. All three pillars of Atlantic Fordism are now undergoing major structural reorganization and strategic reorientation: the mode of growth is being reorganized around the dominance of flexible production oriented to open markets, the political regime around a ‘hollowed out’ Schumpeterian workfare regime, and ‘civil society’ is decomposing under various challenges (see section 6). It is impossible here to fully deal with all these changes — especially regarding their regional, national, or subnational variations. Moreover, as Mann shows in his paper, the wider one’s perspective (at least on the future of the nation-state), the greater this variation. Thus my arguments should not be generalized beyond the erstwhile Atlantic Fordist domain and should be made more nuanced even for the latter.

Four sets of economic changes have had a major impact on the dynamic of Atlantic Fordism. These are: the rise of new core technologies (which, though partly driven by changes beyond the capitalist economy, have been increasingly subordinated to the logic of accumulation); the shift from a Fordist to a post-Fordist paradigm for industrial (and service) organization (a paradigm shift that should not be confused with the successful realization of any such transition); growing internationalization, transnationalization, and globalization (a trend which partly returns the world economy, as Hirst and Thompson (1995) note, to the levels of interdependence prevailing around 1913 but which nonetheless has a qualitatively quite different significance); and, linked to this third trend both as its mediation and as a partial counter-tendency, the rise of regional and local economies as key sites in the pursuit of international systemic competitiveness. To these four trends one may also add the competitive threat allegedly posed by East Asian economies; and the increased salience of transnational ecological problems. Singly and together these factors have allegedly undermined the borders of the national state, thereby rendering it anachronistic, and exposed all national economies to an intensified and increasingly inescapable global competition that exerts downward pressure on production costs and a supposedly ‘unproductive’ public sector.

These changes can be linked to the crisis of the postwar mode of growth in the economic space occupied by Atlantic Fordism, its associated regional policies and growth pole strategies, and its characteristic mixed economy of welfare and social redistribution. As Wood (this collection) notes, it is hard to discern a marked discontinuity in the organization of the capitalist economy during the 1970s to 1990s (cf. Jessop 1982). However, whilst the continuities are most obvious in capital-labour relations within the labour process, there are serious difficulties regarding the emergence of a new and stable accumulation regime as well as important discontinuities in modes of regulation and capitalism’s articulation with the wider societal formation. I cannot consider the labour process or the problematic status of accumulation regimes here. Instead I will focus on one important aspect of changing modes of economic regulation: the restructuring of the relationship between the political and economic spheres.

The Keynesian welfare state (or KWS) characteristic of Atlantic Fordism had both economic and social policy aspects. Economically it aimed to secure full employment in relatively closed national economies mainly through demand-side management and regulation of collective bargaining; socially it aimed to generalize norms of mass consumption so that all its citizens shared the fruits of economic growth (and so contributed to effective domestic demand) and to promote forms of collective consumption that supported a Fordist growth dynamic. Whilst the macro-economic role was mainly determined and implemented at national level, local states assumed an increasingly important role in infrastructural and social policy. Whilst local economic conditions obviously affected how local government saw its economic role, the KWS social policy role was almost universal. The emerging ‘Schumpeterian workfare state’ (or, better, regime) involves quite different activities. Thus, economically, it attempts to promote flexibility and permanent innovation in open economies by intervening on the supply-side and tries to strengthen as far as possible the structural competitiveness of the relevant economic spaces. With growing internationalization and resulting competitive pressures, public spending is also subject to general downward pressure. But states at all levels are also subject to growing pressure to subordinate social policy to the needs of labour market flexibility and the demands of structural competitiveness.

These changes cannot be reduced to effects of a crisis of Fordism. Geo-political factors have also played a key role (as Mann and Shaw emphasise): such factors include the end of the Cold War, the approach of the Pacific Century, and the rise of so-called ‘tribal’ identities. The Soviet communist collapse has replaced the struggle between capitalism and communism as competing world systems by often intense struggles between competing versions of capitalism. Thus military competition between major national states declines in favour of civilian economic and technological issues; and security is redefined in terms of environmental risks, sustainable development, the narcotics trade, and transnational migration. These shifts are reflected in the reorientation of foreign policy towards technological, economic, and ecological issues and the increased salience of foreign affairs in many fields of domestic policy. Such changes help to explain the rise of the ‘competition’ state at supranational (e.g., European) and national levels. Moreover, for reasons suggested in the dominant geo-economic narratives about the changing forms of competition and the importance of structural competitiveness, these changes also require a more active, supply-side oriented role for regional and local states. This trend is reinforced by reinvigorated ‘tribal’ identities which are oriented to regional rather than national identities. Furthermore, once the sovereign national state’s traditional role in defense is downgraded, many of its other functions may also be displaced to other political levels. In short, the ‘region state’ (Ohmae 1991) and/or ‘transnational territory’ (Sassen 1994) have become more important for many purposes than the national state (cf. Horsman and Marshall 1994; Kennedy 1993; Luttwak 1990).

5. Changes in the State

Structural coupling means that political changes cannot just be derived from changes in the economy and, conversely, that economic changes are shaped in part by those in the political system. This complicates predictions about the future of the nation-state. Since other contributions discuss this, however, it is certainly worth addressing this issue here. Let me first advance three inter-related propositions about trends in the articulation of the economic and political in the next period of capitalism (for more extended treatment, see Jessop 1995). These three trends have many different causes and cannot be ascribed exclusively to the crisis of Fordism or the alleged transition to post-Fordism. Nor should one treat each of these trends as singular causal mechanisms in their own right and thereby neglect their essentially descriptive, synthetic, and generalized character. Nor do they entail any unidirectional movement or multilateral convergence across all national regimes; instead, they can take different empirical forms.

First, there is a general trend towards the de-nationalization of the state (or, better, statehood). This structural trend is reflected empirically in the ‘hollowing out’ of the national state apparatus with old and new state capacities being reorganized territorially and functionally on subnational, national, supra-national, and trans-local levels. There is a continuing movement of state power upwards, downwards, and sideways as attempts are made by state managers on different territorial scales to enhance their respective operational autonomies and strategic capacities. One aspect of this is the loss of the de jure sovereignty of national states in certain respects as rule- and/or decision-making powers are transferred upwards to supranational bodies and the resulting rules and decisions bind national states. This trend is most apparent in the European Union but also affects NAFTA and other intergovernmental regional blocs (cf. Mann, this collection). Another aspect is devolution of authority to subordinate levels of territorial organization and the development of transnational but inter-local policy-making. However, countering this trend is the survival of the national state as the principal factor of social cohesion in societies and its associated role in promoting social redistribution.

This trend should not be mistaken, pace Shaw (this collection), for the rise of a ‘global state’ — at least if the concept of state is to retain its core meaning of the territorialization of a centralized political authority and a ‘global state’ is thus equivalent to a single ‘world state’. Instead this trend represents a re-articulation of different levels of the territorial organization of power within the global political system. It is by no means limited to a loss of authority to supranational bodies or a reinvigorated and relatively unchallenged American super-state with capacities to project its power on a global scale. It also involves the delegation of authority to subordinate levels of territorial organization and/or the development of so-called ‘intermestic’[9] (or interlocal but trans-nationalized) policy-making regimes. In addition, as I note below, state power has become less important in key respects in contemporary capitalism — as governance has become more important. Moreover, even were a world state to exist, it would be prey to a tension between the juridico-political claim to unicity (sovereignty) and the reality of plurality (particularistic competition among other states for influence in its counsels). It is for this reason that inter-state politics on a global scale is marked by the international hegemony of a national state which seeks to develop a hegemonic political strategy for the global system — with that hegemony armoured, of course, by various forms of coercion and resting on a complex articulation of governmental powers and other forms of governance.

Second, there is a trend towards the de-statization of the political system. This is reflected in a shift from government to governance on various territorial scales and across various functional domains. There is a movement from the central role of official state apparatus in securing state-sponsored economic and social projects and political hegemony towards an emphasis on partnerships between governmental, para-governmental, and non-governmental organizations in which the state apparatus is often only first among equals. This involves the complex art of steering multiple agencies, institutions, and systems which are both operationally autonomous from one another and structurally coupled through various forms of reciprocal interdependence. Governments have always relied on other agencies to aid them in realizing state objectives or projecting state power beyond the formal state apparatus. But this reliance has been re-ordered and increased. The relative weight of governance has increased on all levels — including not only at the supra-national and local or regional levels but also in the trans-territorial and inter-local fields. Nonetheless this can enhance their capacity to project state power and achieve state objectives by mobilizing knowledge and power resources from influential non-governmental partners or stakeholders.

Countering the shift towards governance is government’s increased role in meta-governance. Political authorities (at national and other levels) are more involved in organizing the self-organization of partnerships, networks, and governance regimes. They provide the ground rules for governance; ensure the compatibility of different governance mechanisms and regimes; deploy a relative monopoly of organizational intelligence and information with which to shape cognitive expectations; act as a ‘court of appeal’ for disputes arising within and over governance; seek to re-balance power differentials by strengthening weaker forces or systems in the interests of system integration and/or social cohesion; try to modify the self-understanding of identities, strategic capacities, and interests of individual and collective actors in different strategic contexts and hence alter their implications for preferred strategies and tactics; and also assume political responsibility in the event of governance failure. This emerging meta-governance role means that the forms of networking, negotiation, noise reduction, and negative coordination characteristic of governance take place ‘in the shadow of hierarchy’ (cf. Scharpf 1994: 40; Hodgson 1988: 220-228).

Third, there is a dual trend towards the internationalization of policy regimes. The international context of domestic state action has extended to include a widening range of extra-territorial or transnational factors and processes; and it has become more significant strategically for domestic policy. The key players in policy regimes have also expanded to include foreign agents and institutions as sources of policy ideas, policy design, and implementation (cf. Gourevitch 1978; Doern, Pal and Tomlin 1996). This trend is reflected in economic and social policies as the state becomes more concerned with ‘international competitiveness’ in the widest sense (cf. my earlier comments on Schumpeterian workfarism). Neo-liberalism is the most obvious and vocal manifestation of this trend; but its long-term social impact is also proving the most disastrous. Somewhat ambiguously countering yet reinforcing this trend is a growing ‘interiorization’ of international constraints as the latter become integrated into the policy paradigms and cognitive models of domestic policy-makers (on interiorization, see, for example, Poulantzas 1975).

These three changes do not exclude a continuing and central political role for the national state. But it is a role which is redefined as a result of the more general re-articulation of the local, regional, national, and supra-national levels of economic and political organization. Unless or until supra-national political organization acquires not only governmental powers but also some measure of popular-democratic legitimacy, the national state will remain a key political factor as the highest instance of bourgeois democratic political accountability. How it plays this role will depend on the changing institutional matrix and shifts in the balance of forces as globalization, triadization, regionalization, and the resurgence of local governance proceed apace. As noted above, perhaps the most important role for the national state in this context is that of meta-governance, i.e., coordinating different forms of governance and ensuring a minimal coherence among them. In this sense Shaw is right to claim (this collection) that the national state core to governance will not go away. But this core will be less governmental and more oriented to issues of meta-governance. But one should note that there is no point at which any final meta-governance instance can be established to cooordinate myriad subordinate forms of governance — this would re-introduce the principle of sovereignty or hierarchy which growing social complexity and globalization now rule out.

6. Excursus on Civil Society

As well as changes in the state in its integral sense, three trends can be discerned in the re-shaping of civil society. First, just as there is a de-nationalization of statehood, civil society is being ‘de-nationalized’. This is reflected in the growth of a post-national cosmopolitanism, ‘tribalism’ (i.e., the rediscovery or invention of primordial, affectual identities at the expense both of liberal individualism and of civic loyalty to an ‘imagined’ national community), and the growth of diverse social movements which operate across national boundaries. Second, due partly to the crisis of the Keynesian welfare national state, partly to market-driven and/or state-sponsored commodification of ‘civil society’, and partly to the rise of new forms of public-private governance arrangements,[10] several changes have occurred in the principles and practices of civil society considered as a (residual) social sphere. These include: rejection of the Atlantic Fordist commitment to class-based egalitarianism (and its associated redistributive politics); increased concern with empowerment (in the sense of ensuring life-time access to the benefits of different institutional orders);[11] a resulting politicization of a wide range of institutional orders; growth in identity politics and the politics of difference (with their emphases on respect, authenticity, and autonomy); and the expansion of the so-called ‘third’ sector (which operates beyond pure markets and the bureaucratic state). And, third, and least certainly, whilst national citizenship is still important in many established national states, there is an emergent (albeit still weak) emphasis on (transnational) human rights which can be invoked even where an individual is not a citizen in a given state and/or that state resists such enforcement by external agencies. The problem with this last trend, it need hardly be said, is that it is still national states which are mainly responsible for enforcing human rights and, in many cases, for infringing them.

7. Concluding Remarks

I have attempted three tasks in this brief contribution. The first is to pose once again the key question of the nature of capitalism, its overall dynamic, and its possible future(s). In emphasizing the self-organizing capacities of the capitalist economy in its inclusive sense (reflected above all in the self-valorization of capital as it metamorphoses through different moments in the circuit of capital), I have highlighted one distinctive feature of the capitalist mode of production and related it to the commodification of labour-power. These features give capitalism its distinctive dynamic and also give a certain form-determination to class struggle and competition in the capital relation. At the same time I have emphasized that capitalism is not a self-contained system but is structurally coupled to its environment. This serves both to keep the future of the capitalist economy open (whilst nonetheless making its trajectory non-arbitrary and path-dependent) and to create various interfaces between the developmental logic of capital and its class struggle, on the one hand, and, on the other hand, the instrumental and communicative rationalities of its environing institutional orders and lifeworld together with their distinctive forms of struggle and resistance.

In this context, my second task was to argue that the openness of capitalist developed excluded any prognostications about its ultimate destiny. This can be deduced neither from the laws of motion of capital (which are at best tendential) nor from any historical guarantee about the eventual victory of workers in the class struggle. In particular I have emphasized the capacity of capital to monitor changes in its environment (social as well as natural) and exploit perceived opportunities for profit. Within quite broad limits tied to the requirements for the reproduction of capital in general and to its path-dependent development and hence relative fixity in specific locations, this permits the continuing self-transformation of capitalism in response to structural changes and/or social struggles. But capitalism’s openness to its environment is also an additional source of influence over its development for forces seeking to limit the free play of market forces and/or the power of capital. In this sense the interface(s) between the capitalist economy in its inclusive sense and its environing institutional orders and the lifeworld becomes a crucial site for class and class-relevant struggles. These can involve a wide range of forces (not simply class forces) and a wide range of sites and sources of resistance (not reducible to the capital-labour relation alone). Indeed, as I have argued all too briefly, a number of changes often fallaciously equated with the shift from modernity to post-modernity have increased the complexities of such struggles in recent years. For the moment, however, I will simply conclude that such complexities rule out any simple forecasts about the future of capitalism.

My third task was to make some medium-term predictions about the relationship between the economic and the political in contemporary capitalism. Here I have tried to break with the simple distinction between market and state and to consider the overall articulation of the capitalist economy in its inclusive sense and a political order resting on ‘government and governance’. In this context I have presented some suggestions about recent changes in the economic space of Atlantic Fordism and their implications for the future of national states. In particular, whilst indicating the crisis of the Keynesian welfare national state characteristic of Atlantic Fordism, the ‘hollowing out’ or de-nationalization of state authority, the partial de-statization of politics, and the internationalization of policy regimes, I have also argued for a continuing (if still provisional) role for the national state both as the primary instance of meta-governance and as the primary (if more residual) instance of social cohesion in class-divided (and otherwise divided) social formations. These changes may be closely grounded in recent economic changes in contemporary capitalism but they have other, extra-economic, causes too. But, whatever the causal mechanisms behind these changes, they have profound implications for the nature of struggles over the future of capitalism.

For capital, as Marx himself emphasized, is not a thing. It is first and foremost a social relation. Moreover, as various theorists have noted, some of the most basic contradictions in the capital relation itself are deeply and inescapably rooted in its dependence on an unstable balance between its economic and extra-economic forms (cf. Offe 1984; Jessop 1982; Polanyi 1957). This inherent limitation to the self-reproduction of capital as a social relation ensures its instability, regardless of resistance or class struggle. The latter nonetheless affect how these instabilities are expressed and also govern how far the capital relation is ever successfully reproduced. This process is always unstable, conflictual and contradictory — posing in turn what are always conjunctural questions about its possible governance or regularization. The changes in economic and political organization discussed above will therefore have a major impact on the capacity of different forces to contest the current ‘ecological dominance’ of the capitalist economy, its penetration into extra-economic systems and the lifeworld, and its continued capacity for self-valorization.

Endnote

[1] Andrew Chitty and Ash Amin both offered incisive comments on the very first draft. Since the paper is now much revised, it is vital to record that any and all remaining problems are my responsibility.

[2] This can be expressed in terms of ‘the value theory of labour’ rather than ‘the labour theory of value’. Whereas the latter is a flawed account of the value of labour-power (claiming that it is reducible to the sum of the values of commodities which enter into its reproduction), the former expresses the impact on capitalist dyanamics of labour-power’s commodification.

[3] It is also quite consistent with the regulation approach.

[4] In this sense it could be described as a ‘fictitious commodity’.

[5] In this regard I extend the system world well beyond Habermas’s couplet of economy and state to include any self-organizing system with its own instrumental rationality and also interpret the ‘lifeworld’ more widely to include identity politics, etc., regardless of whether committed or not to undistorted communication.

[6] Although Weber refers to opportunities for profit, economic calculation can also be directed to other sources of revenue: wage income, interest, groundrent, etc..

[7]Societalization refers to the production of ‘society effects’ within a specific ‘time-space envelope’: society effects have two dimensions — social cohesion and system (or institutional) integration.

[8] In this context one might distinguish the disciplinary perspective of ‘integral economics’ from issue of whether an ‘integral economy’ is the dominant principle of societalization.

[9] ‘Intermestic’ is a term coined by Duchacek to refer to the expanding area of international connections between local authorities. See Duchacek et al., 1988.

[10] There are many other causal mechanisms behind these shifts — these are the most significant for present purposes.

[11] For example, by ensuring jobs, access to legal services, lifetime education, freedom of scientific information, subsidiarity in politics, etc..

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