The Future of the Capitalist State

For Ngai-Ling
The Future of the
Capitalist State

Bob Jessop

polity
Copyright © Robert Jessop 2002

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 Contents

List of Boxes viii

List of Tables and Figure ix
Preface x
Abbreviations xii

Introduction 1

1 Capitalism and t h e Capitalist T y p e of State 11

1 C a p i t a l as a S o c i a l R e l a t i o n 12
2 A c c u m u l a t i o n as a P r i n c i p l e of S o c i e t a l i z a t i o n 22
3 C a p i t a l , t h e S t a t e , a n d Policy R e g i m e s 36
4 On S p a t i o - t e m p o r a l Fixes 48
5 Governance and Metagovernance 51
6 Concluding Remarks 53

2 T h e Keynesian Welfare N a t i o n a l State 55

1 On Atlantic Fordism 56
2 TheKWNS 58
3 D i s t i n c t i v e F e a t u r e s of t h e K W N S as a N a t i o n a l S t a t e 71
4 T h e K W N S a n d t h e S p a t i o - t e m p o r a l Fix o f A t l a n t i c
Fordism 73
5 Crisis 80
6 T h e D i s c u r s i v e M e d i a t i o n o f Crisis 92

3 T h e S c h u m p e t e r i a n C o m p e t i t i o n State 95

1 Post-Fordism and the Knowledge-based E c o n o m y 95

2 O l d a n d N e w C o n t r a d i c t i o n s in P o s t - F o r d i s m IO3
vi Contents

3 T h e I m p a c t of G l o b a h z a t i o n
4 S c h u m p e t e r i a n Policies a n d C o m p e t i t i v e n e s s
5 B u i l d i n g t h e C o m p e t i t i o n S t a t e as a R e s p o n s e
6 Discourse and Discursive Change
7 H o w this C o r r e s p o n d s to Post-Fordism
8 Concluding Remarks

4 Social R e p r o d u c t i o n a n d t h e W o r k f a r e S t a t e 140

1 Preliminary Considerations 141

2 Alternative A p p r o a c h e s to Welfare State R e f o r m 143
3 T h e Specificity o f t h e W e l f a r e S t a t e i n A t l a n t i c F o r d i s m 148
4 Towards the Workfare State 152
5 Collective C o n s u m p t i o n and the C o m p e t i t i o n State • 162
6 Concluding R e m a r k s 168

5 T h e Political E c o n o m y o f State R e s c a l i n g 172

1 The National State 173

2 Crisis i n t h e N a t i o n a l C h a r a c t e r o f t h e K W N S 174
3 T h e Political E c o n o m y of Scale 177
4 S c a l e s of C o m p e t i t i o n 187
5 Trends in t h e State 193
6 C o u n t e r t r e n d s in t h e State 201
7 Rescaling and the K W N S : The Case of E u r o p e 204
8 I s T h e r e Still a R o l e f o r t h e N a t i o n a l S t a t e ? 211
9 Concluding Remarks 213

6 From Mixed E c o n o m y to Metagovernance 216

1 The Material Bases of G o v e r n a n c e Mechanisms 217

2 M a r k e t and State Failure 224
3 The G o v e r n a n c e of Atlantic Fordism and B e y o n d 231
4 Governance Failure? 236
5 Metagovernance 240
6 M e t a g o v e r n a n c e Failure 243
7 Concluding Remarks 245

7 T o w a r d s S c h u m p e t e r i a n Workfare P o s t n a t i o n a l R e g i m e s ? 247

1 Trends and Claims 248

2 The Ideal-Typical S W P R 250
3 On the U s e of Ideal Types 254
4 Alternative S W P R Strategies 259
5 Post-Fordism and the S W P R 267
 Contents

6 Resolving Offe's P a r a d o x : Capitalism a n d t h e Welfare

State 27

Notes 27
References 2g
Index 2^
 List of Boxes

B o x 1.1 T h e ' l a w of v a l u e ' i n capitalism 17

B o x 1.2 S o m e f u n c t i o n s o f t h e capitalist t y p e o f s t a t e 45
B o x 2.1 E s p i n g - A n d e r s e n ' s fourfold typology of welfare
regimes 62-3
B o x 3.1 F o r m s of competitiveness 121-2
B o x 3.2 T h e S c h u m p e t e r i a n c o m p e t i t i o n state a n d c a p i t a l
accumulation 138
Box 5.1 T r e n d s a n d c o u n t e r t r e n d s i n state r e s t r u c t u r i n g 202
Box 5.2 Rescaling and state intervention 214
Box 7.1 S t r a t e g i e s t o p r o m o t e o r adjust t o global n e o l i b e r a l i s m 262
Box 7.2 Synopsis: the S W P R and the reproduction of capital 271-5
 List of Tables and Figure

T a b l e 1.1 S o u r c e s o f t e n s i o n i n b a s i c f o r m s o f t h e capital
relation 20
T a b l e 1.2 B a s e s o f capitalist s o c i e t a l i z a t i o n a n d r e s i s t a n c e
thereto 33
T a b l e 1.3 S o m e new concepts in the strategic-relational
approach 35
T a b l e 1.4 S o m e k e y f e a t u r e s o f t h e capitalist t y p e o f s t a t e 38-9
T a b l e 2.1 The Keynesian welfare national state ( K W N S ) 59
T a b l e 2.2 M a j o r s y m p t o m s i n t h e p e r e n n i a l welfare s t a t e
crisis 93
T a b l e 4.1 F o r m s of neoliberalism 169
T a b l e 5.1 Typology of imagined political communities linked
to nation-states 173
T a b l e 5.2 Glurbanization vs glocalization 190
T a b l e 6.1 Modalities of governance 230
T a b l e 7.1 The Schumpeterian workfare postnational regime 252

F i g u r e 7.1 Schematic r e p r e s e n t a t i o n of changing forms of

state intervention according to periodization of
capital accumulation 270
 Preface

In addition to the three giants, G r a m s c i , P o u l a n t z a s and L u h m a n n , w h o s e

intellectual shoulders I h a v e a t t e m p t e d to straddle in developing the
argument below and whose contribution is detailed in the Introduction,
t h e r e are m a n y i m m e d i a t e p e r s o n a l d e b t s i n c u r r e d i n writing this b o o k
that I would like to acknowledge. These are o w e d to the scholars and
friends with w h o m I have shared or, at least, d e b a t e d my ideas over m a n y
years. Singling o u t t h e m o s t influential is invidious and, in any case, they
k n o w w h o t h e y a r e . S o I will s i m p l y n o t e t h a t s p e c i a l m e n t i o n i s d u e f o r
various reasons, large and small, to E l m a r Altvater, A s h A m i n , B30rn
Terje A s h e i m , H e n r i k B a n g , J e n s B a r t e l s o n , M a t s B e n n e r , W e r n e r
Bonefeld, R o b e r t Boyer, Neil Brenner, Terrell Carver, H e e - y e o n Cho,
M y u n g - R a e C h o , S i m o n C l a r k e , C h r i s Collinge, R y a n C o n l o n , R o b e r t
DeJorme, Alex Demirovic, Frank D e p p e , Biilent Diken, G e r a r d
D u m e n i l , Josef Esser, N o r m a n Fairclough, Steve F l e e t w o o d , A n n Haila,
Colin H a y , Jerzy H a u s n e r , Joachim Hirsch, J o h n Holloway, Carsten
Jensen, J a n e Jenson, Joo H y o u n g Ji, M a r t i n Jones, Tetsuro K a t o ,
E l e o n o r e Kofman, E r n e s t o Laclau, Patrick Le Gales, Alain Lipietz,
G o r d o n M a c L e o d , R i a n n e M a h o n , Birgit Mahnkopf, James Martin,
M a r g i t Mayer, Marguerite Mendell, Timothy Mitchell, Lars Mj0set,
Chantal Mouffe, Yoshikazu N a k a t a n i , Klaus Nielsen, Claus Offe, Joe
Painter, Leo Panitch, Ove Kai Pedersen, Markus Perkmann, Sue Penna,
Jamie Peck, Sol Picciotto, M o i s h e P o s t o n e , M a r t i n R h o d e s , J o h n R o b e r t s ,
Ralf Rogowski, A n d r e w Sayer, Takeshi Shinoda, G e o r g e Steinmetz,
G e r r y S t o k e r , G u n t h e r T e u b n e r , A d a m TickelJ, B r u n o T h e r e t , A d a m
Tickell,Chao-Ming Tseng, ConstantineTsoukalas, J o h n U r r y , J e n n - h w a n
W a n g , H e l m u t Willke and D a v i d Wolfe. N o n e of t h e m can be held
responsible for the errors in this book - indeed only t w o of t h e m h a v e
XI Preface

r e a d e v e n o n e o f its s u c c e s s i v e d r a f t s i n its e n t i r e t y a n d few h a v e

f o l l o w e d its t o r t u o u s d e v e l o p m e n t f r o m b e g i n n i n g t o e n d - b u t t h e y h a v e
nonetheless helped to m a k e it better than it would otherwise have been
t h r o u g h t h e i r i n f l u e n c e a t v a r i o u s s t a g e s i n its g e s t a t i o n . I h a v e a l s o
benefited i m m e n s e l y f r o m t h e e n c o u r a g e m e n t , criticism a n d , s o m e t i m e s ,
blank incomprehension of countless other scholars and students over
m a n y years.
F o r institutional s u p p o r t at different times I would also like to t h a n k
t h e Z e n t r u m fiir I n t e r d i s z i p l i n a r e F o r s c h u n g a t B i e l e f e l d U n i v e r s i t y f o r
a y e a r ' s f e l l o w s h i p as p a r t of its j o i n t r e s e a r c h p r o j e c t on Staatsaufgaben
( 1 9 8 8 - 9 ) , M a n c h e s t e r U n i v e r s i t y for a H a l l s w o r t h S e n i o r R e s e a r c h
F e l l o w s h i p ( 1 9 9 6 - 7 ) , t h e J a p a n S o c i e t y f o r t h e P r o m o t i o n o f S c i e n c e for
a p r o d u c t i v e t w o - m o n t h visit t o H i t o t s u b a s h i U n i v e r s i t y , T o k y o ( 1 9 9 7 ) ,
t h e D a n i s h S o c i a l R e s e a r c h C o u n c i l for a visiting R e s e a r c h P r o f e s s o r s h i p
a t R o s k i l d e U n i v e r s i t y ( 1 9 9 7 - 8 ) , a n d t h e C e n t r e for O r g a n i z a t i o n a n d
M a n a g e m e n t , C o p e n h a g e n B u s i n e s s S c h o o l , for s u p p o r t d u r i n g a w h o l e
s e r i e s o f a c a d e m i c visits. M a n y o f t h e a r g u m e n t s d e v e l o p e d h e r e c a m e
together during a three-year research project on economic development
a n d local g o v e r n a n c e financed by the E c o n o m i c a n d Social R e s e a r c h
Council (United K i n g d o m ) under grant L311253032.
F o r his i n t e r e s t a n d c o m m i t m e n t as I b e g a n t h i s b o o k , I wish to
thank David Held. For their continuing encouragement and their polite
r e s p o n s e s t o i n c r e a s i n g l y i n c r e d i b l e e x c u s e s for t h e d e l a y s i n v o l v e d i n its
c o m p l e t i o n , I w o u l d like to e x p r e s s my g r a t i t u d e to L y n n D u n l o p a n d
R a c h e l K e r r . A n d for j u d i c i o u s c o p y - e d i t i n g , t h a n k s g o t o S a r a h D a n c y .
F i n a l l y , t h e m o s t i m p o r t a n t i n f l u e n c e o n m y life i n t h e l a s t t w e l v e y e a r s
has b e e n N g a i - L i n g S u m . A s well a s being m y c o n s t a n t intellectual
c o m p a n i o n d u r i n g t h e s e years, she h a s also p r o v e d m y closest friend a n d
d e v o t e d p a r t n e r . I t i s t o h e r t h a t this b o o k i s d e d i c a t e d w i t h t h e w a r m e s t
love a n d t h e deepest a p p r e c i a t i o n for everything.
B o b Jessop
Lancaster
 Abbreviations

B2B Business-to-business
B2C Business-to-consumer
CIS C o m m o n w e a l t h of Independent States
Comecon Council for Mutual .Economic Assistance
EC European Commission
EMU European Monetary Union
EU European Union
FDI Foreign Direct Investment
G2B Government-to-business
GATT G e n e r a l A g r e e m e n t o n T r a d e a n d Tariffs
ICT Information and C o m m u n i c a t i o n Technologies
ILO International Labour Organization
IPR Intellectual Property Rights
IMF International Monetary Fund
KBE Knowledge-based economy
KWNS Keynesian Welfare National State
MNC Multinational Company
NAFTA North American Free Trade Agreement
NET 'Natural E c o n o m i c Territory'
NGO Non-governmental Organization
NIC Newly Industriahzing Country
OECD O r g a n i z a t i o n for E c o n o m i c C o o p e r a t i o n a n d
Development
OPEC Organization of Petroleum Exporting Countries
R&D Research and development
SEM Single E u r o p e a n M a r k e t
SWPR Schumpeterian Workfare Postnational Regime
 AbbreviaHons XIII

TNB Transnational Bank

TRIPS Trade-Related Aspects of Intellectual Property Rights
UN United Nations
UNESCO United Nations E d u c a t i o n and Science Commission
WTO World Trade Organization
 Introduction

This book is a p r o d u c t of m a n y years of intermittent reflection on the

c a p i t a h s t s t a t e a n d its r o l e i n p o s t w a r c a p i t a l i s m a n d i n v o l v e s a s y s t e m -
atic attempt to m o v e b e y o n d sympathetic critiques of other theoretical
currents in order to present my o w n analysis of the actually existing
capitalist state. Its p r i m a r y a i m is to e l a b o r a t e t h e theoretical founda-
tions for a r e s e a r c h a g e n d a on t h e capitalist t y p e of state in c o n t e m p o r a r y
capitalism rather than to present detailed accounts of particular political
regimes. It does so by setting out a research agenda and some
prehminary conclusions regarding the changing forms, functions and
effectiveness of e c o n o m i c a n d social policy in t h e a d v a n c e d w e s t e r n
capitalist states o v e r t h e last fifty years. M o r e o v e r , whilst recognizing
t h a t t h i s i s still a n o p e n q u e s t i o n , i t a l s o c o m m e n t s o n t h e i r l i k e l y f u t u r e
development.
T h e analysis p r e s e n t e d h e r e is inspired by M a r x ' s predisciplinary cri-
tique of political e c o n o m y b u t draws, in a postdisciplinary m a n n e r , on a
w i d e r a n g e o f s c h o l a r s h i p a n d r e s e a r c h b y social s c i e n t i s t s . S t a r t i n g o u t
from the basic features of capitalism as a m o d e of production a n d object
of regulation, it highlights the inherent improbability of stable capital
a c c u m u l a t i o n b a s e d solely on m a r k e t forces. It t h e n considers t h e m a i n
contributions of the capitalist type of state in conjunction with o t h e r n o n -
m a r k e t m e c h a n i s m s in securing crucial p r e c o n d i t i o n s for a c c u m u l a t i o n .
T h e basic features of capitalism as a m o d e of p r o d u c t i o n a n d object of
regulation a s s u m e different p a t t e r n s in different varieties a n d stages of
capitalism. T h e state a p p a r a t u s a n d state p o w e r are critical factors h e r e
in shaping t h e d y n a m i c of a c c u m u l a t i o n as well as b e i n g s h a p e d by that
d y n a m i c . I n o r d e r t o i l l u s t r a t e t h e s e a r g u m e n t s , t h e r e f o r e , I will f o c u s o n
the form of state that developed after the Second W o r l d W a r in those
2 Introduction

a d v a n c e d capitalist e c o n o m i e s i n t e g r a t e d i n t o Atlantic Fordism; a n d t h e n

reflect o n its r e c e n t d e v e l o p m e n t a n d s p e c u l a t e o n its f u t u r e p r o s p e c t s
f o l l o w i n g t h e c r i s e s i n / o f F o r d i s m f r o m t h e 1970s o n w a r d s .
I e x a m i n e t h e g e n e r a l f o r m o f t h e p o s t w a r s t a t e , its specific v a r i a n t s
a n d its c o n t r i b u t i o n s t o e c o n o m i c a n d s o c i a l r e p r o d u c t i o n . I i n t e r p r e t
this f o r m o f s t a t e a s a h i s t o r i c a l l y specific p o l i t i c a l r e g i m e t h a t c o r r e -
s p o n d s (in c o m p l e x w a y s to be discussed in successive c h a p t e r s ) with a
h i s t o r i c a l l y specific s t a g e of c a p i t a l a c c u m u l a t i o n in a p a r t i c u l a r e c o -
n o m i c a n d p o h t i c a l - s p a c e w i t h i n t h e w o r l d e c o n o m y T o h i g h l i g h t its
h i s t o r i c a l specificity, I c h a r a c t e r i z e t h i s f o r m of s t a t e in i d e a l - t y p i c a l ( o r
styhzed) terms as a Keynesian welfare national state (hereafter, K W N S ) .
E a c h of t h e four t e r m s u s e d in defining this ideal type is linked to a
basic dimension of e c o n o m i c a n d social r e p r o d u c t i o n . I t h e n consider
the crisis-tendencies of the K W N S along these four dimensions and
c o m m e n t on the trial-and-error attempts to resolve or transcend them.
T h e concluding chapter draws the a r g u m e n t s together to identify a
p l a u s i b l e b u t still e m e r g e n t f o r m o f t h e c a p i t a l i s t t y p e o f s t a t e t h a t i s
replacing t h e K W N S , albeit unevenly and at different speeds.
T h e K W N S s that d e v e l o p e d i n m a n y a d v a n c e d capitalist societies
d u r i n g t h e p o s t w a r b o o m h a v e l o n g b e e n r e g a r d e d f o r g o o d o r ill a s
b e i n g i n s o m e s o r t o f crisis, i f n o t i n t e r m i n a l d e c l i n e . T h e r e i s far less
a g r e e m e n t a b o u t t h e e x a c t n a t u r e a n d causes o f t h i s crisis, h o w e v e r ; o r ,
a g a i n , a b o u t w h a t c o u l d o r s h o u l d r e p l a c e this particular f o r m o f s t a t e
a n d its a s s o c i a t e d m o d e o f r e g u l a t i o n . I f t h e crisis o f t h e K W N S e s s e n -
tially i n v o l v e s a crisis i n t h a t r e g i m e a n d its r o l e i n r e p r o d u c i n g t h e a c c u -
mulation regime with which it is linked, then piecemeal reforms in o n e
o r b o t h m i g h t r e s t o r e its r o l e w i t h o u t c h a n g i n g its b a s i c o r g a n i z a t i o n a l
f o r m . B u t , if t h e r e is a crisis of t h e K W N S , a n e w r e g i m e of e c o n o m i c
and social r e p r o d u c t i o n would be necessary. O n e of t h e m o s t p r o v o c a -
tive claims in this r e g a r d c o m e s f r o m C l a u s Offe, w h o , writing as q u e s -
t i o n s o f crisis, c r i s i s - m a n a g e m e n t a n d crisis r e s o l u t i o n m o v e d u p t h e
p o l i t i c a l a g e n d a , a r g u e d t h a t ' w h i l e c a p i t a l i s m c a n n o t c o e x i s t with,
n e i t h e r c a n i t exist without, t h e w e l f a r e s t a t e ' ( 1 9 8 4 : 1 5 3 ; italics i n o r i g i -
n a l ) . I r e t u r n t o t h i s a r g u m e n t i n m y last c h a p t e r t o s u g g e s t h o w ' O f f e ' s
p a r a d o x ' can be resolved.
In relating my analysis of t h e K e y n e s i a n welfare national state to
capitalism, I do n o t w a n t to suggest t h a t state forms and functions are
s o m e h o w fully d e t e r m i n e d in t h e last - l e t a l o n e in t h e first - i n s t a n c e
b y s o m e fully a u t o n o m o u s logic i n s c r i b e d within capitalism. I n d e e d , m y
analysis a t t e m p t s to m o v e a w a y from a simple, e c o n o m i c i n t e r p r e t a t i o n
o f t h e s t a t e . I t d o e s s o i n t h r e e m a i n ways. First, i t a d o p t s a f a r b r o a d e r
interpretation of the economic than is usual in conventional economic
analysis; second, it argues that the economy, w h e t h e r c o n s i d e r e d in
 Introduction 2

narrow or b r o a d terms, is co-constituted by what are conventionally

considered e x t r a - e c o n o m i c factors; and, third, it identifies i m p o r t a n t
structural a n d strategic limits to e c o n o m i c d e t e r m i n a t i o n rooted in t h e
relative intractability of other institutional orders and in resistance from
a wide r a n g e of social forces within a n d b e y o n d t h e e c o n o m i c system. In
particular, in addition to showing h o w t h e d y n a m i c of state forms and
f u n c t i o n s a r e s h a p e d b y c h a n g e s i n c a p i t a l a c c u m u l a t i o n , I also i n d i c a t e
h o w the accumulation process is co-constituted in turn by m a n y other
processes, including the d y n a m i c of state forms a n d functions. T h u s I
focus on t h e structural coupling a n d co-evolution of a c c u m u l a t i o n
regimes a n d political regimes a n d h o w this is influenced by t h e a t t e m p t s
of different social forces to steer their individual a n d / o r conjoint
development.
G i v e n my previous work, t h r e e cautions are in o r d e r to advise r e a d e r s
w h a t ( n o t ) t o e x p e c t f r o m t h i s p a r t i c u l a r study. F i r s t , t h i s i s n o t a p r i m e r
in Marxist political e c o n o m y or Marxist state theory. A l t h o u g h I draw
heavily on M a r x ' s critique of t h e e c o n o m i c categories of political
e c o n o m y a n d his sadly i n c o m p l e t e analysis of the capitalist m o d e of p r o -
duction, this is not the latest of m a n y attempts to reconstruct historical
materialism. H e n c e it advances no general ontological, epistemological
or m e t h o d o l o g i c a l claims. N o r h a v e I tried to d e v e l o p a systematic analy-
sis o f c a p i t a l i s m t h a t s t a r t s w i t h its m o s t a b s t r a c t a n d s i m p l e d e t e r m i n a -
tions and proceeds dialectically and stepwise to an account of the
a c t u a l l y e x i s t i n g c a p i t a l i s t w o r l d m a r k e t i n all its c o n c r e t e - c o m p l e x
details. Instead, I i n t r o d u c e only those e c o n o m i c categories that are
n e c e s s a r y for m y l i m i t e d p u r p o s e s a n d i g n o r e m u c h t h a t w o u l d b e n e c -
essary e v e n for a largely e c o n o m i c analysis of c o n t e m p o r a r y capitalism.
Likewise, while I h a v e b e e n inspired by t h e rich tradition of Marxist
theorizing on t h e state, this work is not i n t e n d e d to p r o v i d e a detailed
c o m m e n t a r y on Marxist state theories. Instead, it takes the critiques I
h a v e p r e s e n t e d e l s e w h e r e for g r a n t e d a n d d e v e l o p s o n l y t h o s e a n a l y t i -
cal c o n c e p t s a n d t h e o r e t i c a l l e s s o n s t h a t a r e e s s e n t i a l f o r t h e l i m i t e d
tasks in hand. It also introduces categories from o t h e r theoretical
traditions, especially institutionalist work on the state, w h e r e relevant
and c o m p a t i b l e with my overall approach. Moreover, since it focuses on
e c o n o m i c a n d s o c i a l policy, t h e r e a r e i m p o r t a n t a s p e c t s o f t h e c a p i t a h s t
state that it ignores. M o s t notable of these are the military and police
apparatuses, their changing forms and functions, the nature of m o d e r n
warfare, and their overall connections to the b r o a d e r state system.
S e c o n d , this b o o k is n o t a p r i m e r on t h e welfare state. W h a t is con-
ventionally included u n d e r this rubric refers to only o n e of t h e four
d i m e n s i o n s of the state's form and functions that are of interest in this
s t u d y . M o r e o v e r , e v e n i n r e g a r d t o t h i s o n e d i m e n s i o n , social p o l i c y i s
4 Introduction

a p p r o a c h e d primarily in t e r m s of the state's role in the social reproduc-

tion of labour-power and m a n y o t h e r i m p o r t a n t aspects of welfare are
ignored. Thus, although I touch u p o n gender, ethnicity and 'race' as k e y
aspects of t h e strategic selectivities of m o d e s of regulation, the social
division of welfare and the institutional matrix of the state, these are
not themselves central topics of enquiry in this work. F o r this study is
i n t e n d e d p r i m a r i l y t o d e v e l o p a fornp^analysis o f t h e s t a t e a n d s t a t e i n t e r -
v e n t i o n r a t h e r t h a n t o offer c o n c r 6 f e i n s t i t u t i o n a l a n a l y s e s o f p a r t i c u l a r
w e l f a r e r e g i m e s o r d e t a i l e d a c c o u n t s o f specific w e l f a r e o u t c o m e s . I t i s
i n t h i s m o r e l i m i t e d c o n t e x t t h a t I d i s c u s s s o c i a l policy. T h u s m y s t a r t i n g
p o i n t i s specific s o c i a l f o r m s , t h e e x t e n t t o w h i c h t h e y a r e - o r c o u l d e v e r
be - relatively unified in a given social f o r m a t i o n ( m y p r e f e r r e d f o r m -
a n a l y t i c t e r m for t h e c o n v e n t i o n a l , b u t i d e o l o g i c a l l y i m b u e d , a n d t h e o -
retically contested, category of 'society'), a n d t h e w a y s in w h i c h f o r m
p r o b l e m a t i z e s f u n c t i o n r a t h e r t h a n g u a r a n t e e s i t ( o n t h i s last a s p e c t , s e e
J e s s o p 1 9 8 2 ) . O f m o s t i n t e r e s t a r e t h e effects o f t h e ( a l w a y s t e n d e n t i a l ,
always socially r e p r o d u c e d ) d o m i n a n c e of particular social forms (espe-
cially t h o s e l i n k e d t o c a p i t a l a s a s o c i a l r e l a t i o n ) o n t h e i m p r o b a b l e
reproduction of capital accumulation (including the reproduction of
labour-power as a fictitious commodity) a n d the tendential emergence
o f t h e b o u r g e o i s n a t u r e o f c o n t e m p o r a r y social f o r m a t i o n s . T h i s p a r t i c -
u l a r a m b i t i o n d o e s n o t m e a n t h a t t h e r e i s n o t h i n g else w o r t h s a y i n g
a b o u t social relations theoretically, empirically or normatively. B u t I
l e a v e this t o o t h e r s ( a n d , p e r h a p s , myself o n o t h e r o c c a s i o n s ) t o n a r r a t e .
Third, this b o o k does n o t c o n t r i b u t e directly to the g r o w i n g b o d y of
theoretically informed empirical research on comparative capitahsms,
c o m p a r a t i v e welfare regimes or o t h e r c u r r e n t s in the n e w institutional-
ist r e s e a r c h a g e n d a . N o n e t h e l e s s I h a v e l e a r n t m u c h f r o m t h i s l i t e r a t u r e
a n d h o p e my o w n critical reflections on the political e c o n o m y of accu-
m u l a t i o n regimes a n d the role of capitalist states in their r e p r o d u c t i o n
will i n f l u e n c e this r e s e a r c h a g e n d a i n t u r n . B u t m y p r o j e c t i n t h i s p r i -
marily form-analytical w o r k remains relatively abstract and must there-
fore l e a v e o p e n m a n y c o n c r e t e c o m p a r a t i v e issues. In this s e n s e I a i m to
e l a b o r a t e t h e basic concepts for a n e w research a g e n d a on capitalism a n d
the capitahst state. I h o p e to refine this analysis in a f u t u r e collaborative
research report that compares Britain, D e n m a r k , G e r m a n y and Sweden
and, if so, this m a y p r o v i d e a m e a n s to s h o w h o w t h e c u r r e n t a p p r o a c h
c a n b e a p p l i e d i n specific c a s e s t u d i e s .
I n a n a l y s i n g t h e c a p i t a l i s t s t a t e a n d its f u t u r e i n t h i s a n d o t h e r t e x t s ,
I h a v e d r a w n freely on t h r e e c o m p l e m e n t a r y theoretical p e r s p e c t i v e s
c o n c e r n e d with t h e discursive a n d extradiscursive aspects of e c o n o m i c ,
political a n d o t h e r social p h e n o m e n a : (1) institutional a n d e v o l u t i o n a r y
economics, especially the regulation a p p r o a c h to t h e political e c o n o m y
 Introduction 5

o f t h e c a p i t a h s t e c o n o m y ; (2) a n a p p r o a c h t o t h e p o l i t i c a l e c o n o m y o f
t h e s t a t e a n d p o l i t i c s t h a t h a s b e e n i n s p i r e d a b o v e all b y G r a m s c i a n d
P o u l a n t z a s ; a n d (3) c r i t i c a l d i s c o u r s e analysis a n d a l l i e d a p p r o a c h e s t o
t h e d i s c u r s i v e c o n s t i t u t i o n o f e c o n o m i c a n d p o l i t i c a l (as w e l l a s o t h e r
social) r e l a t i o n s . O n e m a j o r r e a s o n w h y t h e s e t h r e e p e r s p e c t i v e s c a n b e
r e n d e r e d c o m p l e m e n t a r y is t h a t t h e y a r e all p r e m i s e d on a critical realist
o n t o l o g y , e p i s t e m o l o g y a n d m e t h o d o l o g y ( J e s s o p 1982, 2 0 0 1 b ; S a y e r
2000). M o r e o v e r , in exploring the c o - e v o l u t i o n of t h e e c o n o m i c a n d
p o l i t i c a l a s p e c t s o f t h e K W N S a n d its p o t e n t i a l r e p l a c e m e n t , I a l s o d r a w
o n : (4) r e c e n t a n a l y s e s o f s e l f - o r g a n i z i n g ( o r a u t o p o i e t i c ) s y s t e m s a n d
the p r o b l e m s of governance posed by the i n t e r d e p e n d e n c e of a plural-
ity of self-organizing systems. W h i l e the autopoieticist theories are often
seen as h a v i n g constructivist theoretical underpinnings, I believe they
c a n be a p p r o p r i a t e d a n d i n t e g r a t e d into a critical realist analysis. L e t me
briefly s k e t c h t h e r e l e v a n c e o f all f o u r m o d e s o f e n q u i r y .
First, a s r e g a r d s c a p i t a l i s m , t h e r e g u l a t i o n a p p r o a c h s u g g e s t s t h a t
m a r k e t forces are m e r e l y o n e contributing factor to capitalist expansion.
A d h e r e n t s of t h e r e g u l a t i o n a p p r o a c h reject t h e k e y a s s u m p t i o n of clas-
sical e c o n o m i c s t h a t t h e r e i s a c l e a r l y d e l i m i t e d , s o c i a l l y d i s e m b e d d e d
sphere of e c o n o m i c relations with a tendency t o w a r d s general equilib-
rium. Instead, they emphasize that economic rationality and dynamics
cannot be adequately analysed in terms of pure exchange relations in
perfect m a r k e t s - even as a first a p p r o x i m a t i o n . T h e y also d e n y that
exchange is entirely driven by the optimizing, economizing conduct of
inherently rational individuals w h o have pregiven a n d stable preference
functions a n d w h o a r e solely o r i e n t e d t o t h e p r i c e m e c h a n i s m a n d
its i m p l i c a t i o n s f o r i n d i v i d u a l p r o f i t - a n d - l o s s . I n s t e a d , r e g u l a t i o n i s t s a r e
c o n c e r n e d with t h e socially e m b e d d e d , socially r e g u l a r i z e d n a t u r e of
capitalist e c o n o m i e s r a t h e r t h a n with p u r e , self-regulating m a r k e t
phenomena; and they are concerned with changing economic norms and
m o d e s of calculation rather than with the transhistorical egoism of a
homo economicus w h o is a l l e g e d l y t h e a c t i v e s u b j e c t in all e c o n o m i e s ,
precapitalist as well as capitalist. T h e regulation a p p r o a c h analyses
c a p i t a l i s m v e r y b r o a d l y , t h e n , c r i t i c a l l y e x a m i n i n g its a n a t o m y a s a n
' i n t e g r a l e c o n o m y ' o r ' e c o n o m y i n its i n c l u s i v e s e n s e ' . S e e n i n i n t e g r a l o r
i n c l u s i v e t e r m s , specific f o r m s o f c a p i t a l i s m c a n b e i n t e r p r e t e d a s a n
' a c c u m u l a t i o n r e g i m e -I- m o d e o f s o c i a l r e g u l a t i o n ' . T h i s c o m p r i s e s a n
e n s e m b l e o f s o c i a l l y e m b e d d e d , socially r e g u l a r i z e d a n d s t r a t e g i c a l l y
selective institutions, organizations, social forces a n d actions o r g a n i z e d
a r o u n d ( o r a t l e a s t i n v o l v e d in) t h e e x p a n d e d r e p r o d u c t i o n o f c a p i t a l
a s a s o c i a l r e l a t i o n . T h i s e n s e m b l e t y p i c a l l y a c q u i r e s its s t r u c t u r a l
c o h e r e n c e , t o t h e e x t e n t t h a t i t d i s p l a y s o n e , w i t h i n t h e l i m i t s o f a specific
s o c i a l f i x t h a t i s h i s t o r i c a h y v a r i a b l e i n b o t h its s p a t i a l a n d t e m p o r a l
6 Introduction

d i m e n s i o n s . S u c h a s p a t i o - t e m p o r a l fix h e l p s t o s e c u r e t h e a l w a y s p a r t i a l ,
provisional and unstable equihbria of compromise that seem necessary
t o c o n s o l i d a t e a n a c c u m u l a t i o n r e g i m e a n d its m o d e o f r e g u l a t i o n . I t i s
in these terms that I locate the role of the K W N S in the e x p a n d e d eco-
n o m i c a n d social r e p r o d u c t i o n o f capitalism ( o n t h e r e g u l a t i o n a p p r o a c h ,
s e e e s p e c i a l l y B o y e r 1990; B o y e r a n d S a i l l a r d 2 0 0 2 ; J e s s o p 1997)
S e c o n d , following t h e p r e w a r Italian C o m m u n i s t , A n t o n i o G r a m s c i ,
and the postwar G r e e k Marxist theorist, Nicos Poulantzas, I consider the
state as a social relation. T h e f o r m e r p r o p o s e d an inclusive definition of
t h e s t a t e i n its i n t e g r a l s e n s e a s ' p o h t i c a l s o c i e t y + civil s o c i e t y ' ( G r a m s c i
1971); t h e latter analysed state p o w e r as a f o r m - d e t e r m i n e d c o n d e n s a -
tion of the balance of political forces o p e r a t i n g within and b e y o n d t h e
s t a t e ( P o u l a n t z a s 1978). C o m b i n i n g t h e i r i d e a s , o n e c a n d e f i n e t h e s t a t e
a s a n e n s e m b l e o f socially e m b e d d e d , socially r e g u l a r i z e d a n d s t r a t e g i -
cally selective institutions, o r g a n i z a t i o n s , social forces a n d activities
organized a r o u n d (or at least actively involved in) m a k i n g collectively
b i n d i n g decisions for an i m a g i n e d political c o m m u n i t y . State p o w e r c a n
be understood in turn as a p o w e r relation that is mediated in and through
this institutional e n s e m b l e . It is n o t exercised by t h e state as such; t h e
s t a t e i s n o t a s u b j e c t . N o r d o e s i t o r i g i n a t e e n t i r e l y w i t h i n t h e s t a t e itself
or from a m o n g t h e state's personnel. Instead, it d e p e n d s on the b a l a n c e
of forces within t h e w i d e r society as well as within state a p p a r a t u s e s .
There are three further major themes to be d r a w n from Gramsci's work:
h e g e m o n y , historic bloc a n d t h e role of intellectuals. He defines h e -
g e m o n y as t h e exercise of political, intellectual a n d m o r a l l e a d e r s h i p
w i t h i n a n d o v e r a given p o l i t i c a l s p a c e in such a w a y as to b r i n g s o c i a l
forces and institutions into conformity with the r e q u i r e m e n t s of capital-
ist r e p r o d u c t i o n i n a p a r t i c u l a r p e r i o d . W h e r e h e g e m o n y i s s u c c e s s f u l l y
exercised it is reflected in w h a t Gramsci terms an historic bloc. This can
b e d e f i n e d for p r e s e n t p u r p o s e s a s a h i s t o r i c a l l y specific, c o n t i n g e n t c o r -
r e s p o n d e n c e b e t w e e n the economic, the juridico-political, a n d the ethical
d i m e n s i o n s of a given social f o r m a t i o n . F o l l o w i n g G r a m s c i ' s p i o n e e r i n g
work, I argue that a key role in t h e exercise of h e g e m o n y a n d construc-
t i o n o f a n h i s t o r i c bloc i s p l a y e d b y i n t e l l e c t u a l s w h o d e v e l o p a l t e r n a t i v e
e c o n o m i c strategies, state projects a n d h e g e m o n i c visions a n d m a y
t h e r e b y help to consolidate an unstable equilibrium of c o m p r o m i s e
a m o n g different social forces a r o u n d a given e c o n o m i c , political a n d
s o c i a l o r d e r . I d r a w o n t h e s e i d e a s i n a d d r e s s i n g t h e s o c i a l b a s e s o f dif-
f e r e n t w e l f a r e r e g i m e s a n d t h e i r r o l e i n c o n s o l i d a t i n g specific a c c u m u l a -
tion regimes a n d their corresponding modes of regulation (on state
theory, see Jessop 1 9 8 2 , 1 9 8 5 , 1 9 9 0 b , a n d 2001a).

Third, inspired by critical discourse analysis a n d recent w o r k on t h e

narrative features of t h e social world, I e m p h a s i z e the contribution of
 Introduction 7

d i s c o u r s e t o t h e c o n s t r u c t i o n o f t h e capitalist e c o n o m y a s a n o b j e c t o f
regulation and of the national state as an imagined institutional e n s e m -
ble. I also insist on t h e cultural as well as social e m b e d d e d n e s s of e c o -
n o m i c and pohtical institutions and p o w e r relations. Thus, the e c o n o m y
as an object of regulation is viewed as an imaginatively n a r r a t e d system
t h a t i s a c c o r d e d specific b o u n d a r i e s , c o n d i t i o n s o f e x i s t e n c e , t y p i c a l e c o -
n o m i c agents, t e n d e n c i e s and countertendencies, a n d a distinctive overall
d y n a m i c . T h e state system is treated as an imagined political entity with
its o w n specific b o u n d a r i e s , c o n d i t i o n s o f e x i s t e n c e , p o l i t i c a l s u b j e c t s ,
d e v e l o p m e n t a l tendencies, sources of legitimacy and state projects. Dis-
course analysis is also v e r y relevant, of course, to t h e analysis of h e g e -
mony. In emphasizing the discursive m o m e n t s of the e c o n o m y a n d the
state I do not intend to a r g u e that they are s o m e h o w 'purely' discursive
a n d l a c k a n y i n s t i t u t i o n a l m a t e r i a l i t y . I n s t e a d , I wish t o h i g h l i g h t t w o
issues. F i r s t , e c o n o m i c a n d p o l i t i c a l r e l a t i o n s a r e s o c o m p l e x t h a t a n y
action o r i e n t e d t o w a r d s t h e m r e q u i r e s s o m e discursive simplification
( h e n c e a n e c o n o m i c o r p o l i t i c a l i m a g i n a r y ) t h a t c o n s t i t u t e s specific
s u b s e t s o f social r e l a t i o n s a s its social, m a t e r i a l a n d s p a t i o - t e m p o r a l
h o r i z o n o f action. I n this r e g a r d t h e r e a r e m a n y e c o n o m i c a n d political
imaginaries c o m p e t i n g for h e g e m o n y or, at least, a d o m i n a n t position in
c o n t e m p o r a r y society. A n d , s e c o n d , s u c h d i s c u r s i v e s i m p l i f i c a t i o n s h a v e
a key role in their turn in the always tendential constitution a n d consol-
idation of the economic, political and other systems, shaping the forms
of their institutional separation and s u b s e q u e n t articulation. Thus, while
the d y n a m i c of t h e capitalist e c o n o m y has long unfolded within t h e
f r a m e w o r k of a m o r e or less extensive and c h a n g i n g world m a r k e t , it is
often conceived as a series of m o r e or less clearly d e m a r c a t e d n a t i o n a l
or regional economies. T h e recent discourses around globalization
i n v o l v e a shift i n e c o n o m i c a n d / o r p o l i t i c a l u n d e r s t a n d i n g s a n d a r e
reflected b o t h in the restructuring of e c o n o m i c and political relations a n d
in t h e r e o r i e n t a t i o n of e c o n o m i c a n d political strategies. T h e y t h e r e b y
help to modify the institutional materiality and strategic bias of accu-
m u l a t i o n r e g i m e s a n d t h e i r a s s o c i a t e d p o l i t i c a l f r a m e w o r k s . I will d e p l o y
similar claims at o t h e r levels of e c o n o m i c and political analysis in o r d e r
to show the key contribution of discourses to the overall shaping of eco-
n o m i c a n d political structures a n d strategies in different contexts and
c o n j u n c t u r e s (on critical discourse analysis, see especially F a i r c l o u g h
1992 a n d 2 0 0 0 ) .

Fourth, in exploring the institutional a n d social interconnections

b e t w e e n t h e e c o n o m i c a n d t h e p o l i t i c a l , I d r a w o n t h e o r i e s o f self-
organization. My initial source of inspiration h e r e was Marx's analysis
o f t h e s e l f - v a l o r i z a t i o n o f c a p i t a l , t h a t is, c a p i t a l ' s c a p a c i t y t o r e p r o d u c e
itself t h r o u g h t h e p r o f i t a b l e r e i n v e s t m e n t o f p a s t p r o f i t s a s i t m o v e s
8 Introduction

r e p e a t e d l y t h r o u g h t h e successive stages o f w h a t M a r x t e r m e d t h e circuit

o f c a p i t a l . H o w e v e r , w h i l e M a r x c o n f i n e d h i s analysis o f s e l f - o r g a n i z a -
tion mainly to the capitalist m o d e of production, it is w o r t h considering
several other potentially self-organizing (or autopoietic) systems with
m a j o r significance for s o c i a l o r d e r i n m o d e r n s o c i e t i e s . T h e s e i n c l u d e
the legal system, the political system, science, t h e educational system,
r e l i g i o n a n d a r t . E a c h h a s its o w n o p e r a t i o n a l c o d e , o r g a n i z a t i o n a l
p r i n c i p l e s , i n s t i t u t i o n a l d y n a m i c s , i n s t r u m e n t a l r a t i o n a l i t i e s a n d logics
of a p p r o p r i a t e n e s s . T o g e t h e r t h e y f o r m a self-organizing ecology of
instituted systems that develops t h r o u g h the interaction b e t w e e n their
respective operational a u t o n o m i e s and material interdependencies. This
a p p r o a c h h a s m a j o r implications for studies of t h e s t r u c t u r a l c o u p h n g
and co-evolution of the e c o n o m i c a n d political in r e g a r d to b o t h capital
accumulation and the exercise of state power. Alongside the system
d o m a i n t h e r e also exists a rich a n d c o m p l e x Ufeworld ( s o m e t i m e s inad-
e q u a t e l y d e s c r i b e d a s 'civil s o c i e t y ' ) , w h i c h i s i r r e d u c i b l e t o s u c h s y s t e m s
a n d t h e i r logics. I t p r o v i d e s m u l t i p l e sites o f r e s i s t a n c e t o t h e s e l o g i c s a s
w e l l a s c o n s t i t u t i n g a m a j o r s p h e r e i n its o w n r i g h t f o r conflicts a n d
struggles as well as m u t u a l r e c o g n i t i o n a n d solidarities (on L u h m a n n ' s
a p p r o a c h to autopoiesis, see Jessop 1990b; L a n g e a n d S c h i m a n k 2000;
R a s c h 2 0 0 0 ; T h o r n h i l l 2000; W i l l k e 1 9 9 2 , 1 9 9 7 ) .
I t i s c l e a r f r o m this b r i e f a c c o u n t o f m y p r i n c i p a l t h e o r e t i c a l s o u r c e s
a n d s u b s t a n t i v e c o n c e r n s t h a t t h e a r g u m e n t s i n this b o o k a r e i n d e b t e d
t o m a n y s c h o l a r s . A m o n g t h e s e , t h r e e , all n o w d e a d , m e r i t s p e c i a l a t t e n -
tion. T h e strongest influence is u n d o u b t e d l y that of Nicos Poulantzas; I
m e t him only once b u t have long been inspired by his state t h e o r y a n d
m o r e general analyses. A n t o n i o Gramsci's w o r k has also b e e n influen-
tial - e s p e c i a l l y r e g a r d i n g t h e o r g a n i c c o n n e c t i o n s b e t w e e n t h e e c o n o m i c
a n d t h e political, the c o n t i n g e n t d e v e l o p m e n t of historic blocs, a n d t h e
relational n a t u r e of power. A n d , p e r h a p s surprisingly to m a n y readers, I
learnt m u c h from t h e late Niklas L u h m a n n about the role of systems
t h e o r y i n social a n a l y s i s . L u h m a n n w o u l d h a v e p r o f o u n d l y d i s a p p r o v e d
of the use to w h i c h I have p u t his ideas - especially my a t t e m p t to syn-
thesize his a u t o p o i e t i c systems theory with M a r x i s m , which he claimed
was a p r e m o d e r n t h e o r y that was q u i t e i n a p p r o p r i a t e for t h e analysis of
c o n t e m p o r a r y societies. O n e aim of this w o r k is to refute t h a t claim.
T h e rest of the b o o k is organized into seven chapters. C h a p t e r 1 p r e -
sents t h e m a i n t h e o r e t i c a l c o n c e p t s t h a t will b e u s e d i n m y analysis o f
t h e p o s t w a r form of state in t h e circuits of A t l a n t i c F o r d i s m a n d my spec-
u l a t i o n s o n its f u t u r e . C h a p t e r 2 s k e t c h e s t h e n a t u r e o f A t l a n t i c F o r d i s m ,
the K e y n e s i a n welfare national state, which h a d a k e y role in the regu-
lation of Atlantic Fordism, the m o r e general spatio-temporal fix that
helped to stabilize the A t l a n t i c Fordist accumulation regime, and the
 Introduction 9

crises t h a t e m e r g e d i n F o r d i s m f r o m t h e m i d - 1 9 6 0 s o n w a r d s . C h a p t e r 3
e x p l o r e s t h e n a t u r e o f p o s t - F o r d i s m a n d s u g g e s t s t h a t , f o l l o w i n g initial
uncertainty a b o u t t h e substantive features of a feasible post-Fordist
accumulation r e g i m e , it is gradually a s s u m i n g t h e f o r m of a globalizing
k n o w l e d g e - b a s e d e c o n o m y . T h e e x t e n t t o w h i c h t h i s will o c c u r i s n o t
s e c u r e d p u r e l y b y a n e c o n o m i c l o g i c b u t d e p e n d s o n its c o - c o n s t i t u t i o n
b y e x t r a - e c o n o m i c f o r c e s t h a t c o n t r i b u t e t o its s t a b i l i z a t i o n a n d g o v e r -
nance. T h e chapter sketches the m a i n features of post-Fordism in these
terms, t h e i n h e r e n t structural contradictions and d i l e m m a s of capital
accumulation, and explores the complexities of globalization and the
n e w forms of competition in the emerging knowledge-based economy.
It concludes with a discussion of t h e distinctive functions of t h e S c h u m -
p e t e r i a n c o m p e t i t i o n s t a t e t h a t i s s t e a d i l y r e p l a c i n g t h e K e y n e s i a n full
e m p l o y m e n t state a n d assesses w h e t h e r this e m e r g i n g state form is
a d e q u a t e to p o s t - F o r d i s m . C h a p t e r 4 c o n t i n u e s this line of analysis by
e x a m i n i n g t h e r e d e s i g n o f t h e w e l f a r e s t a t e , its c h a n g i n g r o l e i n s o c i a l
r e p r o d u c t i o n a n d t h e c h a n g i n g articulation b e t w e e n e c o n o m i c a n d social
policy. I t f i r s t c o n s i d e r s i n m o r e d e t a i l t h e specificity o f t h e w e l f a r e s t a t e
a n d c r i t i q u e s s o m e o f t h e m a i n a l t e r n a t i v e a p p r o a c h e s t o its r e s t r u c t u r -
ing, r e c a l i b r a t i o n a n d r e o r i e n t a t i o n i n r e s p o n s e t o e c o n o m i c crisis a n d
globalization. T h r e e m a i n changes in the welfare state are t h e n exam-
i n e d : t h e i n c r e a s i n g s u b o r d i n a t i o n o f s o c i a l p o l i c y t o e c o n o m i c policy,
d o w n w a r d pressure on the social wage considered as a cost of p r o d u c -
tion, and t h e r e s t r u c t u r i n g of collective c o n s u m p t i o n . I also e m p h a s i z e
the limits to welfare r e t r e n c h m e n t r o o t e d in the state's role in r e p r o -
d u c i n g l a b o u r - p o w e r a n d t h e e x t r a - e c o n o m i c c o n d i t i o n s for a c c u m u l a -
tion as well as in t h e n a t u r e of politics in capitalist d e m o c r a c i e s .

C h a p t e r 5 focuses on the rescahng of the capitalist type of state in

r e s p o n s e to t h e crises of A t l a n t i c F o r d i s m , n e w forms of c o m p e t i t i o n , a n d
the e m e r g e n c e of a globalizing, knowledge-driven economy. It also iden-
tifies t h r e e m a i n t r e n d s i n t h e r e s t r u c t u r i n g o f t h e n a t i o n a l s t a t e a n d t h e i r
c o u n t e r t r e n d s . I t h e n c o n s i d e r w h e t h e r t h e r e i s still a m a j o r r o l e f o r t h e
national state in the overall reproduction of capital accumulation and
m a i n t e n a n c e of social c o h e s i o n . I c o n c l u d e that, despite t h e challenges
t o t h e p r i m a c y o f t h e n a t i o n a l s t a t e , i t still h a s k e y r o l e s i n o r g a n i z i n g t h e
g l o b a l e c o n o m y , t h e g l o b a l p o l i t y a n d a n e m e r g i n g g l o b a l civil s o c i e t y . I n
other words, the national state is being reimagined, redesigned and re-
o r i e n t e d in r e s p o n s e to these challenges r a t h e r t h a n withering away. T h e
next c h a p t e r e x p l o r e s t h e m a t e r i a l bases for t h e survival and co-existence
of m a r k e t forces, corporatist c o n c e r t a t i o n and i m p e r a t i v e c o o r d i n a t i o n
throughout the history of capitalism, and then considers some basic ten-
dencies t o w a r d s m a r k e t , n e t w o r k a n d state failure. It t h e n e x a m i n e s t h e
crisis o f t h e m i x e d e c o n o m y p a r a d i g m o f g o v e r n a n c e t h a t c h a r a c t e r i z e d
10 Introduction

the Keynesian welfare national state and the tendency towards greater
reliance on n e t w o r k forms of g o v e r n a n c e in the globalizing, k n o w l e d g e -
b a s e d economy. T h e c h a p t e r ends with observations on g o v e r n a n c e
failure, m e t a g o v e r n a n c e a n d m e t a g o v e r n a n c e failure as potential sources
of future crisis-tendencies in capitalist social formations.
T h e concluding c h a p t e r pulls t o g e t h e r t h e m a i n t h r e a d s o f t h e a r g u -
ments that were p r e s e n t e d in previous chapters. It claims that what is
tendentially replacing the Keynesian welfare national state is the Schum-
p e t e r i a n workfare p o s t n a t i o n a l regime. I suggest h o w this n e w form
of state could contribute to t h e structural c o h e r e n c e of a n e w spatio-
t e m p o r a l f i x for c a p i t a l a c c u m u l a t i o n . I t h e n c o n s i d e r p o s s i b l e v a r i a n t
forms of this new state form a n d show h o w these forms are linked to
different p a t h - d e p e n d e n t v a r i e t i e s of c a p i t a h s m . Finally, in setting o u t
the changing articulation of capital accumulation and the state, I p r o -
p o s e a solution to Offe's p a r a d o x .
 1

Capitalism and the

Capitalist Type of State

This c h a p t e r d e v e l o p s t h r e e m a i n t h e m e s t o b e e l a b o r a t e d i n t h e r e s t o f
the b o o k . First, neither capitalism as a whole n o r t h e c a p i t a l - l a b o u r rela-
t i o n o n w h i c h its c o n t r a d i c t o r y a n d c o n f l i c t u a l d y n a m i c d e p e n d s c a n b e
reproduced purely through m a r k e t relations. B o t h require supplemen-
tary m o d e s of reproduction, regulation and governance - including those
provided in part t h r o u g h the operations of the state. Second, a n d in par-
ticular, s i n c e l a b o u r - p o w e r i s e s s e n t i a l l y a f i c t i t i o u s c o m m o d i t y , i t c a n n o t
b e r e p r o d u c e d solely t h r o u g h t h e w a g e form a n d l a b o u r m a r k e t . Thus,
non-market m e c h a n i s m s of various kinds play a key role h e r e too. A n d ,
t h i r d , a s c a p i t a l a c c u m u l a t i o n e x p a n d s o n a n i n c r e a s i n g l y g l o b a l scale, its
dynamic b e c o m e s m o r e ecologically d o m i n a n t in shaping t h e overall
e v o l u t i o n o f s o c i a l s y s t e m s a n d t h e lifeworld.^
In developing these three themes I do n o t intend to argue that the
d y n a m i c o f c a p i t a l a c c u m u l a t i o n e x p l a i n s e v e r y t h i n g significant a b o u t
t h e a r c h i t e c t u r e a n d o p e r a t i o n o f s t a t e s a n d t h e m o d e r n s t a t e s y s t e m , let
a l o n e e v e r y last detail of t h e i r d e v e l o p m e n t . On t h e contrary, it is p r e -
cisely b e c a u s e c a p i t a l i s m c a n n o t s e c u r e t h r o u g h m a r k e t f o r c e s a l o n e a l l
t h e c o n d i t i o n s n e e d e d f o r its o w n r e p r o d u c t i o n t h a t i t c a n n o t e x e r c i s e
a n y sort of e c o n o m i c d e t e r m i n a t i o n in t h e last i n s t a n c e o v e r t h e rest of
the social formation. This requires us to pay close attention to t h e co-
constitution of capital accumulation through the interaction of m a r k e t -
m e d i a t e d a n d n o n - m a r k e t social relations and, in turn, to t h e c o m p l e x
a n d o v e r d e t e r m i n e d n a t u r e o f its i m p a c t o n t h e o v e r a l l d e v e l o p m e n t o f
s o c i a l r e l a t i o n s . I t f o l l o w s t h a t t h i s c h a p t e r c a n n o t l i m i t itself t o a p r e -
sentation of e c o n o m i c c o n c e p t s for analysing capitalism as a m o d e of
production and object of regulation b u t m u s t also introduce o t h e r con-
cepts a p p r o p r i a t e to t h e analysis of politics a n d t h e state, t h e lifeworld
 12 Capifalism a n d the Capitalist Type of State

a n d civil society, a n d t h e i r c o n n e c t i o n s t o t h e e c o n o m i c c a t e g o r i e s a n d
each other. I n d e v e l o p i n g this m o r e c o m p l e x c o n c e p t u a l i n s t r u m e n -
t a r i u m i t will a l s o p r e p a r e t h e g r o u n d for a f o u r - d i m e n s i o n a l a n a l y s i s o f
r e c e n t c h a n g e s i n t h e s t a t e ' s r o l e i n c a p i t a l i s t r e p r o d u c t i o n a n d its i n s t i -
t u t i o n a l , social, a n d d i s c u r s i v e m e d i a t i o n .

1. Capital as a Social Relation

I n t e r m s o f s u r f a c e a p p e a r a n c e s , c a p i t a l i s m c a n b e d e f i n e d initially a s
an e c o n o m i c system in which g o o d s a n d services a r e p r o d u c e d for sale
(with the intention of m a k i n g a profit) in a large n u m b e r of s e p a r a t e
firms using privately owned capital goods and wage-labour (Bowles and
E d w a r d s 1985:394). Most observers would probably broadly s u p p o r t i h i s
d e f i n i t i o n b u t this m i g h t well b e e x p l a i n e d b y its v a g u e n e s s ove/such
key issues as the n a t u r e of labour-power, the l a b o u r process, the p o w e r s
of capital a n d the dynamic of accumulation. Digging into these four
issues is b o u n d to a r o u s e t h e o r e t i c a l a n d political controversy, b u t this
c a n n o t b e a v o i d e d i f w e a r e t o e s t a b l i s h c a p i t a l i s m ' s h i s t o r i c a l specificity
a s a m o d e o f p r o d u c t i o n a n d its i m p h c a t i o n s f o r e c o n o m i c a n d s o c i a l
policy. A c c o r d i n g l y , I f i r s t e x p l o r e s o m e o f t h e m o r e a b s t r a c t a n d s i m p l e
p r e c o n d i t i o n s of organizing c o m m o d i t y p r o d u c t i o n on capitalist lines,
a n d t h e n e x p a n d a n d d e e p e n t h e initial definition t h r o u g h several spiral
steps t h a t specify s o m e m o r e c o n c r e t e a n d c o m p l e x f e a t u r e s of capital-
i s m . T h i s e s s e n t i a l l y t h e o r e t i c a l e x e r c i s e s h o u l d g e n e r a t e a r i c h e r set o f
categories with which to begin an analysis of the f o r m s of e c o n o m i c a n d
social policy a n d t h e i r c h a n g i n g roles in t h e overall r e p r o d u c t i o n a n d
e x p a n s i o n o f c a p i t a l i s m . P a r a d o x i c a l l y , i t will a l s o h e l p t o r e v e a l t h e
limits of a purely capital- and class-theoretical a p p r o a c h to t h e m y r i a d
complexities of actuahy existing states and thereby estabhsh the impor-
tance of combining it with other theoretical approaches that start out
f r o m different sets of social relations.

The c a p i t a l i s t m o d e o f p r o d u c t i o n

W h a t most distinguishes capitalism from o t h e r forms of producing goods

a n d services for sale is t h e generalization of t h e c o m m o d i t y f o r m to
labour-power. This entails t h e historical d e v e l o p m e n t and s u b s e q u e n t
r e p r o d u c t i o n a n d e x p a n s i o n o f a l a b o u r m a r k e t i n w h i c h w o r k e r s offer
t h e i r l a b o u r - p o w e r for s a l e t o c a p i t a l i s t s i n a f o r m a l l y f r e e a n d e q u a l
commercial transaction. In abstract terms, the capital-labour relation
o p e r a t e s a s f o l l o w s . W o r k e r s e x c h a n g e t h e i r c a p a c i t y t o w o r k for a w a g e
and accept capital's right to (attempt to) control their l a b o u r - p o w e r in
 Capitalism a n d the Capitalist Type of State 13

t h e p r o d u c t i o n p r o c e s s a n d t o a p p r o p r i a t e any profits ( o r a b s o r b any

l o s s e s ) t h a t r e s u l t f r o m its e f f o r t t o p r o d u c e g o o d s o r s e r v i c e s for
sale. W o r k e r s s p e n d t h e i r w a g e s o n m e a n s o f c o n s u m p t i o n a c c o r d i n g t o
the prevailing social n o n n s of c o n s u m p t i o n a n d t h e r e b y r e p r o d u c e
their l a b o u r - p o w e r so that it can be sold o n c e more.^ In this way the
w a g e s e r v e s as a c o s t of p r o d u c t i o n (for all c a p i t a l s ) , a m e a n s of self-
r e p r o d u c t i o n ( f o r l a b o u r ) a n d a s o u r c e o f d e m a n d (in t h e first i n s t a n c e ,
for t h o s e c a p i t a l s t h a t p r o d u c e c o n s u m e r g o o d s a n d , i n d i r e c t l y , f o r t h o s e
capitals that p r o d u c e capital goods). A l t h o u g h capital a p p r o p r i a t e s a n d
transforms natural resources and also draws on t h e productive p o w e r s
of n a t u r e (so t h a t these resources a n d p o w e r s contribute to the p r o d u c -
tion of u s e - v a l u e s a n d a n y r e s u l t i n g increase in w e a l t h ) , t h e socially n e c -
essary l a b o u r - p o w e r t h a t is c o n s u m e d in p r o d u c i n g c o m m o d i t i e s is t h e
sole s o u r c e of real a d d e d v a l u e ( a n d h e n c e profit) for capital t a k e n as a
whole. This point holds in the aggregate regardless of h o w the resulting
surplus m a y later b e divided a m o n g particular capitals. M o r e o v e r ,
far f r o m e x c l u d i n g t h e p o s s i b i l i t y t h a t s u p e r p r o f i t s m a y d e r i v e f r o m
innovation, other temporary advantages, or m o n o p o l y positions at the
e x p e n s e of b e l o w - a v e r a g e profits for o t h e r capitals, it highlights h o w
competition to generate such superprofits is an important souce of
capital's overall d y n a m i c .
The generalization of the commodity form to labour-power does not
m e a n that labour-power actually becomes a commodity. Instead it
b e c o m e s n f i c t i t i o u s commodity. T h e l a t t e r i s s o m e t h i n g t h a t h a s t h e f o r m
of a c o m m o d i t y (in o t h e r w o r d s , t h a t can be b o u g h t a n d sold) b u t is n o t
itself c r e a t e d i n a p r o f i t - o r i e n t e d l a b o u r p r o c e s s s u b j e c t t o t h e t y p i c a l
c o m p e t i t i v e p r e s s u r e s o f m a r k e t f o r c e s t o r a t i o n a l i z e its p r o d u c t i o n a n d
r e d u c e t h e t u r n o v e r t i m e of i n v e s t e d capital. T h e r e a r e four k e y cat-
egories of fictitious commodity, land (or nature), money, knowledge and
labour-power. E a c h is often t r e a t e d as a simple factor of p r o d u c t i o n ,
obscuring t h e conditions u n d e r w h i c h it enters the m a r k e t economy, gets
transformed therein, and so contributes to the production of goods and
s e r v i c e s for sale. B u t t h i s t e n d e n c y t o n a t u r a l i z e f i c t i t i o u s c o m m o d i t i e s
a s o b j e c t i v e l y g i v e n f a c t o r s o f p r o d u c t i o n l e a d s t o t h e f a l l a c i o u s belief,
s t r o n g l y criticized b y M a r x , t h a t e c o n o m i c v a l u e arises f r o m t h e i m m a -
nent, eternal qualities of things rather than from contingent, historically
specific social r e l a t i o n s .
' L a n d ' c o m p r i s e s all n a t u r a l e n d o w m e n t s ( w h e t h e r l o c a t e d o n ,
beneath or above the earth's surface) a n d their productive capacities in
specific c o n t e x t s . T h e c u r r e n t f o r m o f s u c h n a t u r a l e n d o w m e n t s t y p i c a l l y
reflects t h e p a s t a n d p r e s e n t social t r a n s f o r m a t i o n o f n a t u r e a s w e l l a s
natural developments that occur without h u m a n intervention. Virgin
land a n d a n a l o g o u s r e s o u r c e s are n o t p r o d u c e d as c o m m o d i t i e s by
 14 Capitalism a n d the Capitalist Type of State

c a p i t a l i s t e n t e r p r i s e s b u t a r e a p p r o p r i a t e d a s gifts o f n a t u r e a n d t h e n
t r a n s f o r m e d for profit - o f t e n w i t h o u t d u e r e g a r d t o t h e i r specific r e p r o -
d u c t i o n cycles, o v e r a l l r e n e w a b i l i t y , o r , i n t h e c a s e o f l a n d , w a t e r a n d air,
their capacities to absorb waste a n d pollution. M o n e y is a unit of account,
s t o r e o f v a l u e , m e a n s o f p a y m e n t (for e x a m p l e , t a x e s , t i t h e s a n d f i n e s ) ,
a n d a m e d i u m of e c o n o m i c exchange. Regardless of w h e t h e r it has a
n a t u r a l f o r m (for e x a m p l e , c o w r i e s h e l l s ) , a c o m m o d i t y f o r m (for
e x a m p l e , p r e c i o u s m e t a l s ) o r a f i d u c i a r y f o r m (for e x a m p l e , p a p e r n o t e s ,
electronic money), the m o n e t a r y system in which such monies circulate
is n o t (and could not be) a purely e c o n o m i c p h e n o m e n o n that is p r o -
d u c e d a n d o p e r a t e d s o l e l y f o r profit. F o r m o n e y ' s a b i l i t y t o p e r f o r m its
e c o n o m i c functions d e p e n d s critically on e x t r a - e c o n o m i c institutions,
sanctions a n d personal and i m p e r s o n a l trust. Insofar as m o n e y circulates
as national m o n e y , the state has a key role in securing a formally ra-
t i o n a l m o n e t a r y s y s t e m ; c o n v e r s e l y , its i n c r e a s i n g c i r c u l a t i o n a s s t g i e l e s s
m o n e y poses serious p r o b l e m s regarding the reregulation of m o n e t a r y
relations. K n o w l e d g e is a collectively p r o d u c e d c o m m o n resource b a s e d
on individual, organizational a n d collective learning over different t i m e
h o r i z o n s a n d i n v a r i e d c o n t e x t s - n o n - c o m m e r c i a l a s well a s c o m m e r -
cial. S i n c e k n o w l e d g e i s n o t i n h e r e n t l y s c a r c e (in o r t h o d o x e c o n o m i c
t e r m s , it is a n o n - r i v a l g o o d ) , it o n l y g a i n s a c o m m o d i t y f o r m i n s o f a r as
i t i s m a d e artificially s c a r c e a n d a c c e s s t h e r e t o i s m a d e t o d e p e n d o n
p a y m e n t (in t h e f o r m o f r o y a l t i e s , l i c e n s e fees, e t c . ) . T h u s a p r o f o u n d
social r e o r g a n i z a t i o n is r e q u i r e d to t r a n s f o r m k n o w l e d g e into s o m e t h i n g
t h a t c a n b e sold ( S c h i l l e r 1 9 8 8 : 3 2 ) . Finally, t h e a b i l i t y t o w o r k i s a g e n e r i c
h u m a n capacity. It gains a c o m m o d i t y f o r m only insofar as w o r k e r s can
be induced or coerced to enter labour markets as waged labour. M o r e -
over, even w h e n it has acquired a c o m m o d i t y form, labour-power is
r e p r o d u c e d t h r o u g h n o n - m a r k e t as well as m a r k e t institutions a n d social
relations.

S o m e of t h e s t r u c t u r a l c o n t r a d i c t i o n s ^ a n d strategic dilemmas'* t h a t
arise from e x t e n d i n g the c o m m o d i t y form t o land, m o n e y a n d k n o w l -
e d g e a r e d i s c u s s e d i n l a t e r c h a p t e r s . H e r e , I f o c u s briefly a n d c o m -
monsensically on l a b o u r - p o w e r as a g e n e r i c h u m a n capacity. H u m a n
r e p r o d u c t i o n is n o t o r g a n i z e d capitalistically - n o t yet, at least. B a b i e s
are rarely brought into this world as commodities (despite the c o m m e r -
cial p o s s i b i l i t i e s o f s u r r o g a c y a n d n e w r e p r o d u c t i v e t e c h n o l o g i e s ) ; a n d
t h e y a r e typically c a r e d for i n f a m i l i e s (or f a m i l y s u r r o g a t e s ) w i t h o u t
s e r i o u s r e s o r t t o t h e c a s h n e x u s for s u c h c a r e . M a s s e d u c a t i o n i s still
largely p r o v i d e d by not-for-profit public or p r i v a t e b o d i e s (despite t h e
n e o l i b e r a l v o g u e for l e a g u e t a b l e s a n d m a r k e t p r o x i e s ) . E m p l o y e e s d o
n o t s y s t e m a t i c a l l y o r i e n t t h e i r e n t i r e lives t o o p p o r t u n i t i e s for i n c r e a s e d
i n c o m e ( d e s p i t e g r o w i n g p r e s s u r e s o n u s all t o b e c o m e e n t e r p r i s i n g s u b -
 Capitalism and the Capitalist Type of State 15

jects a n d t o w e l c o m e t h e c o m m o d i f i c a t i o n o f o u r e n t i r e l i v e s ) a t t h e c o s t
o f o t h e r s o c i a l r e l a t i o n s . I n s h o r t , a l t h o u g h m o s t p e o p l e m u s t sell t h e i r
l a b o u r - p o w e r t o b e a b l e t o live a n d t o p a r t i c i p a t e fully i n s o c i a l life, t h e y
are n o t actually c o m m o d i t i e s - m e r e l y t r e a t e d as if t h e y were.
It is only w h e n l a b o u r - p o w e r acquires a c o m m o d i t y form that the
m a r k e t - m e d i a t e d s e l f - v a l o r i z a t i o n o f c a p i t a l b e c o m e s p o s s i b l e . Self-
v a l o r i z a t i o n i s t h e p r o c e s s b y w h i c h c a p i t a l e x p a n d s t h r o u g h t h e prof-
itable r e i n v e s t m e n t o f p a s t profits. T h i s o c c u r s t h r o u g h t h e r e p e a t e d
s e l f - t r a n s f o r m a t i o n o f c a p i t a l a s i t p a s s e s t h r o u g h t h e circuit o f c a p i t a l .
This b e g i n s w i t h t h e s t a g e o f m o n e y c a p i t a l , w h e n m o n e y a s c a p i t a l i s
used to p u r c h a s e materials, m e a n s of p r o d u c t i o n a n d l a b o u r - p o w e r ,
which a r e t h e n c o m b i n e d i n a p r o d u c t i o n p r o c e s s t h r o u g h w h i c h v a l u e
is added (the stage of p r o d u c t i v e capital). Capitalist p r o d u c t i o n involves
not o n l y t h e m a t e r i a l t r a n s f o r m a t i o n o f n a t u r e t o a d d u s e - v a l u e b u t a l s o
the v a l o r i z a t i o n o f c a p i t a l t h r o u g h t h e successful a p p r o p r i a t i o n o f a n y
exchange-value a d d e d by t h e socially necessary labour t i m e e x p e n d e d
during the p r o d u c t i o n process. A n y e x c h a n g e - v a l u e so c r e a t e d is only
r e a l i z e d , h o w e v e r , b y s e l l i n g t h e s e c o m m o d i t i e s a t a profit for m o n e y a s
r e v e n u e ( t h e s t a g e o f c o m m e r c i a l c a p i t a l ) . S u c h sales a r e n o t g u a r a n -
teed. T h e c i r c u i t i s c o m p l e t e d a n d r e n e w e d w i t h t h e r e i n v e s t m e n t - i n
t h e s a m e a n d / o r o t h e r areas of p r o d u c t i o n - of t h e initial capital as aug-
m e n t e d b y p a r t o r all o f t h i s profit. A s t h e c i r c u i t o f c a p i t a l b e c o m e s m o r e
developed and differentiated, distinct fractions of capital m a y e m e r g e
a r o u n d specific functions within t h e circuit. T h u s o n e c a n distinguish in
elementary terms b e t w e e n m o n e y capital, p r o d u c t i v e capital and c o m -
mercial capital - whilst recognizing t h a t a n y individual capital, e v e n if it
i s s p e c i a l i z e d i n o n e p h a s e o f t h e c i r c u i t , m u s t a l s o e n g a g e i n its o t h e r
phases ( B r y a n 1995; 9 4 - 5 ) . At m o r e c o n c r e t e - c o m p l e x levels of analysis,
r i c h e r sets o f d i s t i n c t i o n s m a y b e n e c e s s a r y o r a p p r o p r i a t e .
With the fictitious commodification of labour-power, the appropria-
t i o n o f s u r p l u s l a b o u r g a i n s its d i s t i n c t i v e c a p i t a l i s t m e d i a t i o n i n a n d
t h r o u g h m a r k e t forces. I n s h o r t , e x p l o i t a t i o n ' t a k e s t h e f o r m o f e x c h a n g e .
The formal subordination of 'commodified' labour-power to capital
t h r o u g h t h e e m e r g e n c e o f t h e m a r k e t for w a g e - l a b o u r w a s reinforced
historically w h e n t h e e x e r c i s e o f l a b o u r - p o w e r i n p r o d u c t i o n w a s b r o u g h t
directly u n d e r capitalist control t h r o u g h m a c h i n e - p a c i n g in t h e factory
system.'' C o m m o d i f i c a t i o n t u r n s b o t h t h e l a b o u r m a r k e t a n d l a b o u r
p r o c e s s i n t o sites o f class s t r u g g l e b e t w e e n c a p i t a l a n d w o r k e r s . ' T h e
basic e c o n o m i c forms of this struggle are s h a p e d by t h e w a g e form, t h e
technical a n d social division of l a b o u r a n d t h e organization of capitalist
p r o d u c t i o n a s a n e c o n o m y o f t i m e . B u t t h e d y n a m i c o f e c o n o m i c class
struggle also has m a n y o t h e r e c o n o m i c a n d e x t r a - e c o n o m i c d e t e r m i n a n t s
a n d , i n a d d i t i o n , class s t r u g g l e s t y p i c a l l y s p r e a d b e y o n d t h e e c o n o m y i n
16 Capitalism a n d the Capitalist Type of State

its n a r r o w s e n s e t o o t h e r a r e a s o f social o r g a n i z a t i o n . T h e n a t u r e o f
l a b o u r - p o w e r a s a f i c t i t i o u s c o m m o d i t y also s h a p e s t h e c o m p e t i t i o n
a m o n g capitals to secure t h e m o s t effective valorization of labour-power
a n d the a p p r o p r i a t i o n of t h e resulting surplus value. C o m p e t i t i o n and
class s t r u g g l e a r e m a j o r s o u r c e s o f c a p i t a l i s m ' s o p e n - e n d e d d y n a m i c a s
a m o d e of production. Lastly, w h e n capital a c c u m u l a t i o n b e c o m e s t h e
d o m i n a n t p r i n c i p l e o f o r g a n i z a t i o n w i t h i n t h e e c o n o m y i n its n a r r o w
s e n s e , i t a l s o g a i n s a significant i n f l u e n c e o n t h e o v e r a l l n a t u r e o f
societies and, in certain circumstances, it m a y b e c o m e the d o m i n a n t
p r i n c i p l e o f s o c i e t a l o r g a n i z a t i o n (see p p . 2 2 - 3 0 ) .
T h e most i m p o r t a n t g e n e r a l law in capitalism is t h e law of value. This
describes the t e n d e n c y of capitalists to allocate resources to different
f i e l d s o f p r o d u c t i o n a c c o r d i n g t o e x p e c t a t i o n s o f p r o f i t (see b o x 1.1).
A l t h o u g h this law is m e d i a t e d t h r o u g h m a r k e t forces a n d t h e p r i c e i n e c h a -
n i s m , t h e o p e r a t i o n o f w h i c h m a y o r m a y n o t socially vahdalje t h e s e
private decisions, it is ultimately g r o u n d e d in the sphere of production.
For it is only here that n e w value is created through the application of
socially necessary l a b o u r t i m e a n d t h e r e b y b e c o m e s available for a n y
s u b s e q u e n t v a l i d a t i o n , r e d i s t r i b u t i o n o r e v e n d e s t r u c t i o n . ^ M a r x also
described other laws a n d tendencies of capitalist economies. These n e e d
n o t c o n c e r n u s for t h e m o m e n t . ' B u t w e s h o u l d n o t e t h a t h e did n o t t r e a t
t h e law of value or o t h e r tendencies as iron necessities. Instead he
e m p h a s i z e d t h e i r m e d i a t i o n t h r o u g h capitalist c o m p e t i t i o n a n d class
struggles.
M a r x identified an essential c o n t r a d i c t i o n in t h e c o m m o d i t y form
b e t w e e n its e x c h a n g e - a n d u s e - v a l u e a s p e c t s ( M a r x 1 9 6 7 ) . E x c h a n g e -
v a l u e refers to a c o m m o d i t y ' s m a r k e t - m e d i a t e d m o n e t a r y v a l u e for t h e
seller; u s e - v a l u e r e f e r s t o its m a t e r i a l a n d / o r s y m b o l i c u s e f u l n e s s t o t h e
purchaser. Without exchange-value, commodities would not be produced
for sale; w i t h o u t use-value, t h e y w o u l d n o t be purchased.^" This w a s t h e
basis o n w h i c h M a r x dialectically u n f o l d e d t h e c o m p l e x d y n a m i c o f t h e
capitalist m o d e of p r o d u c t i o n - including t h e necessity of p e r i o d i c crises
a n d their role in r e i n t e g r a t i n g t h e circuit of capital as a basis for r e n e w e d
e x p a n s i o n . B u i l d i n g o n t h i s a r g u m e n t , I s u g g e s t t h a t all f o r m s o f t h e
capital relation e m b o d y different b u t i n t e r c o n n e c t e d versions of this
basic c o n t r a d i c t i o n a n d t h a t these i m p a c t differentially on (different frac-
t i o n s of) c a p i t a l a n d o n ( d i f f e r e n t s t r a t a of) l a b o u r a t d i f f e r e n t t i m e s a n d
places. I discuss different forms of this c o n t r a d i c t i o n in t h e n e x t section.
T h e s e c o n t r a d i c t i o n s also affect t h e w i d e r social f o r m a t i o n a n d a r e
n e c e s s a r i l y r e p r o d u c e d a s c a p i t a l i s m itself i s r e p r o d u c e d . B u t t h e y n e e d
n o t r e t a i n t h e s a m e relative w e i g h t o r significance for a c c u m u l a t i o n o r
r e g u l a t i o n . I n d e e d , a s w e s h a l l see, d i f f e r e n c e s i n t h i s r e g a r d p r o v i d e o n e
way to distinguish different stages and/or varieties of capitalism. We
 Capitalism and the Capitalist Type of State 17

Box 1.1 The 'law of value' in capitalism

In I ' d i c i a l i c r n i s . ilic Uw ol \ a i u c ^iiuiicsis ihal m o i o linn.' w i l l be

v,pcril o n ( J i i u l i i L ' i n i i c o m m o d i l i c s w h o s e m . i t k c l p t i i v i s a l u ) \ c I h c i r
pnCL- oi p r o L l u c l i o n as iiK-.isuictl b> i h e SULLMIK llv.•LV^^•ar\ h i b n u r
t u n c i i i v o h c d i n tlicir c i c . i i i o n . ( ' o n \ o r s c l y . Ics*> l i m e \ M 1 I I v s j v m
o n p i o i h i c i n j i c o n i m o d i l i c s \\lu>se n i a r k c i p r i c e i s l o w e r i l m n t h e i r
p i ice o l piudtiction In L a p i t a l i s t e c o n o m i c s this i m c n . m i M n is
ciMnplicaicd. a s c o m p u i t i o n t e n d s m c i j i i a l r / c i.iles o l p r o f i t I ' v c i i
lhoiii;li i n i l i v u h i a l capil.iK m a \ L-mpli>\ J i K c r c n t l a l i o s o l phv>;iv."il
capital a n d watio-labour allhoiijih tlie latlci is llic o n l \ Mmrce n(
• j d d c d - v a l i i e " . A c c o r d i n t i K il is l l i i c i i i a t i o n s i n / ' ; < ' / / / \ ( n i a i k c l p r i c e
k s s cost iM-icv) vvhich i i i c d i a i c i h c law ol \ a h i c in i.apiialisni. Tn
rLSjHinse t o t h e s e n i i c U i L U i o n s a n d i n anticip.ilioii o l h o w l l - e \ mij'hl
J c \ e l o p 111 t i i l u r c . i n J i \ u l i i . i l c a p i t a l s d e c i d e h o w l u a l l o c a t e n o l
only labour-powci hul a l s o pli\sical capilnl lo prudiiclion, d i s m -
htitioii a n d c i i c u l . i i i o i i . W h e t h e r 0 1 n o l i h e s c c a l c i i l a l i o i i s p i c n c
coiii-ci and the\ c^in sell t h e l e s u l h n i ; c o i n n i o d i l i c s a t a | M O I I I
d i - p e i u l s o n (he siibseLiiicni o p e r a t i o n o l m a r k e t t o r c t s a n d i s t h e r e -
lore iiiheieiilK iinccriain l o l a l p r o d i i c t u m in Lapitalist ecotio-
niies d e p e n d s o n I h e u n c o o i d i n a t e d d e c i s i o n s o j c o m p e l i i i j ; c a p i t a l s
a b o u t o p p o r i i m i l i c s j u r p r o h i troiii diU'etcnl p a l i c r i i s o l i i i v c s i m e n t
a n d p r o d u c t i i i i i . I ' l o l i t d ^ p ^ n d s n o t o n l \ o n t h e d e m a n d l o i dilTcr-
enl c o m m o d i t i e s ( i c n c c t i n j i i h e i r i n c v a i l i i i i ; u s c - \ a l i i e j b u t a l s o o n
t h e r a l e <>| e c o n o n n c e x p l o i t a t i o n i n d i l l e r c n l b r a n c h e s o l [irodiic-
lion I I I s t h e j v l o i c cuicialK iclalcd l o the course and o i i k o m e o l
s i i u t ' i i i e s b c l w c e n c a p i t a l <inil l a h o u r a t i n a n \ d i l l e i e n t p o i n t s i n t h e
c i i c u i l o f L a p i l a l a n d i n t h e w i d e r social f o i n i a l i o n .

should also add h e r e that 'the r e p r o d u c t i o n of these contradictions with

their c o n t r a d i c t o r y effects a n d their i m p a c t on t h e historical t e n d e n c y of
c a p i t a l i s t d e v e l o p m e n t d e p e n d s o n t h e class struggle' ( P o u l a n t z a s 1975:
4 0 - 1 ; italics i n o r i g i n a l ) . I d i s c u s s l a t e r h o w a p p r o p r i a t e i t i s t o d e s c r i b e
different forms of social struggle b e a r i n g on capital a c c u m u l a t i o n in
t e r m s o f c l a s s s t r u g g l e ( s e e p p . 3 1 - 2 ) . I t i s e n o u g h t o a r g u e for n o w t h a t
various class-relevant social struggles s h a p e t h e forms in w h i c h t h e
various contradictions a n d d i l e m m a s of t h e capital relation c o m e to be
e x p r e s s e d i n specific c o n j u n c t u r e s ; t h e y a l s o affect t h e m a n n e r a n d e x t e n t
to w h i c h possible bases for r e n e w e d expansion, if any, get established,
blocked or overturned. This explains why accumulation involves an ever-
changing b a l a n c e a m o n g r e p e a t e d cycles o f self-valorization, c o n t i n u o u s
18 Capitalism a n d the Capitalist Type of State

self-transformation, bouts of crisis-induced restructuring and o t h e r

modalities of change. These are often linked to n e w patterns of
t i m e - s p a c e d i s t a n t i a t i o n a n d c o m p r e s s i o n ( s e e p . 112) a s w e l l a s t o shifts
in the d o m i n a n t spatio-temporal horizons and the leading places and
s p a c e s for a c c u m u l a t i o n . T h e c o m p l e x i t y o f t h e s e a s p e c t s v i t i a t e s a n y
u n i l i n e a r a c c o u n t o f t h e s t a g e s o f c a p i t a l i s m b e c a u s e t h e y p e r m i t differ-
e n t t r a j e c t o r i e s i n different sets o f c i r c u m s t a n c e s . F o r t h e s a m e r e a s o n i t
precludes any attempt to interpret accumulation in terms of some kind
of equilibrium theory.

Capital as an object of regulation

Together, these contradictions a n d dilemmas m e a n t h a t t h e capital
relation cannot be reproduced entirely through m a r k e t exchange and
is therefore p r o n e to what is often expressed ideologically as fmarket
failure'. This m e a n s that t h e i m p r o b a b l e self-valorization of capital
c a n n o t b e e x p l a i n e d i n t e r m s o f s o m e a l l e g e d s e l f - c o r r e c t i n g , self-
e x p a n d i n g logic. T h i s l e a d s u s t o c o n s i d e r t h e m e c h a n i s m s t h r o u g h
which, despite capital's contradictions, accumulation m a y get regularized
a n d r e p r o d u c e d . T h e s e e x t e n d well b e y o n d t h e c a p i t a l i s t e c o n o m y i n its
narrow sense (profit-oriented production, market-mediated exchange)
to include various direct and indirect extra-economic mechanisms. M o r e -
over, insofar as t h e s e e x t r a - e c o n o m i c m e c h a n i s m s also r e p r o d u c e t h e
contradictions and dilemmas inherent in the economic mechanisms of
t h e c a p i t a l r e l a t i o n , t h e y f u r t h e r e x p a n d t h e s c o p e for a g e n c y , s t r a t e g i e s
a n d tactics to s h a p e the c o u r s e of a c c u m u l a t i o n a n d t h e m a n n e r in which
these contradictions and d i l e m m a s are expressed. This in turn r e q u i r e s
a n y analysis of the i m p r o b a b l e n a t u r e of capital accumulation to take
agency seriously.
We c a n best u n d e r s t a n d w h a t is involved here if we ask w h y capitalism
n e e d s r e g u l a t i n g . T h e a n s w e r lies i n t h e i n d e t e r m i n a t e b u t a n t a g o n i s t i c
n a t u r e o f t h e c a p i t a l r e l a t i o n a n d its d y n a m i c . T h i s h a s t h r e e k e y a s p e c t s :

• the i n c o m p l e t e n e s s of capital as a p u r e l y e c o n o m i c (or m a r k e t -

m e d i a t e d ) r e l a t i o n s u c h t h a t its c o n t i n u e d r e p r o d u c t i o n d e p e n d s , i n
a n u n s t a b l e a n d c o n t r a d i c t o r y way, o n c h a n g i n g e x t r a - e c o n o m i c
conditions;
• the various structural contradictions and strategic dilemmas inherent
in t h e capital relation and their changing structural articulation a n d
forms of a p p e a r a n c e in different accumulation regimes, m o d e s of
regulation, and conjunctures; and
• conflicts o v e r t h e r e g u l a r i z a t i o n a n d / o r g o v e r n a n c e o f t h e s e c o n t r a -
d i c t i o n s a n d d i l e m m a s as t h e y a r e e x p r e s s e d b o t h in t h e circuit of
capital a n d t h e wider social formation.
 Capifalism and the Capitalist Type of State 19

T h e first a s p e c t r e f e r s t o t h e i n h e r e n t i n c a p a c i t y o f c a p i t a l i s m t o a c h i e v e
s e l f - c l o s u r e i n e c o n o m i c t e r m s or, i n o t h e r w o r d s , t o its i n a b i l i t y t o r e p r o -
d u c e itself w h o l l y t h r o u g h t h e v a l u e f o r m i n a s e l f - e x p a n d i n g l o g i c o f
c o m m o d i f i c a t i o n . T h i s i s l i n k e d t o t h e fictitious n a t u r e o f l a n d , m o n e y ,
k n o w l e d g e a n d , a b o v e all, l a b o u r - p o w e r a s c o m m o d i t i e s a n d t o t h e
d e p e n d e n c e o f a c c u m u l a t i o n n o t o n l y o n t h e s e fictitious c o m m o d i t i e s b u t
also o n v a r i o u s n o n - c o m m o d i t y f o r m s o f social r e l a t i o n s . T h i s i n c o m -
p l e t e n e s s i s a c o n s t i t u t i v e , o r defining, f e a t u r e o f c a p i t a l i s m a n d h a s
m a j o r i m p l i c a t i o n s for its o v e r a l l d y n a m i c . E v e n a t t h e m o s t a b s t r a c t
l e v e l o f a n a l y s i s , l e t a l o n e i n its a c t u a l l y e x i s t i n g f o r m s , t h e r e p r o d u c t i o n
of capitalism d e p e n d s on its achieving an i n h e r e n t l y u n s t a b l e b a l a n c e
a m o n g market-mediated economic supports and other, extra-economic
s u p p o r t s w h o s e efficacy d e p e n d s o n t h e i r l o c a t i o n b e y o n d m a r k e t
mechanisms. This excludes the eventual commodification of everything
a n d , a f o r t i o r i , r u l e s o u t a p u r e c a p i t a l i s t e c o n o m y . T h e r e s u l t i n g in-
stability explains u n e v e n waves of commodification, decommodification
and recommodification as the struggle to extend the exchange-value
m o m e n t s of t h e capital relation e n c o u n t e r s real s t r u c t u r a l limits a n d / o r
increasing resistance and, likewise, as n e w ways to o v e r c o m e these limits
a n d r e s i s t a n c e a r e s o u g h t (Offe 1 9 8 4 ) . I t i s a l s o a s s o c i a t e d w i t h u n e v e n
waves of territorialization, deterritorialization a n d reterritorialization
( B r e n n e r 1 9 9 9 a , b ) a n d t h e s e a r c h for n e w f o r m s o f s p a t i o - t e m p o r a l f i x
as prevaiHng fixes begin to d e c o m p o s e (Jessop 1999a; 2000; 2001b; a n d
section 4 b e l o w ) . S u c h structural limits a n d c o n t r a d i c t i o n s (and their
a s s o c i a t e d ' m a r k e t f a i l u r e s ' ) p r o v i d e c h a n c e s t o shift d i r e c t i o n i n s o f a r
as capitalism is constantly oriented, u n d e r the pressure of competition,
t o n e w o p p o r t u n i t i e s f o r profit. T h i s o p e n - e n d e d d y n a m i c e x c l u d e s a n y
f i n a l d e s t i n a t i o n t o w a r d s w h i c h t h e logics o f c a p i t a l a c c u m u l a t i o n a n d / o r
class s t r u g g l e i n e l u c t a b l y d r a w i t ( f o r e l a b o r a t i o n , s e e P o s t o n e 1 9 9 3 ) . I n
short, viewed substantively, capitalism h a s no pregiven trajectory.

S e c o n d , a c c u m u l a t i o n within the capitalist e c o n o m y as a w h o l e d e -

pends essentially on profit-oriented, m a r k e t - m e d i a t e d exploitation of
wage-labour in the labour process. For, while markets mediate the search
f o r a d d e d v a l u e a n d m o d i f y its d i s t r i b u t i o n w i t h i n a n d a c r o s s classes, t h e y
c a n n o t t h e m s e l v e s p r o d u c e it. M o r e o v e r , t h e v e r y p r o c e s s o f c o m m o d i -
fication rooted in the spread of the market mechanism generates struc-
tural c o n t r a d i c t i o n s that c a n n o t b e resolved b y that m e c h a n i s m . M a n y
o f t h e s e c o n t r a d i c t i o n s a n d t h e i r a s s o c i a t e d s t r a t e g i c d i l e m m a s a r e dif-
ferent expressions of the basic contradiction b e t w e e n exchange- and use-
v a l u e i n t h e c o m m o d i t y f o r m (see t a b l e 1.1).
Thus productive capital is both abstract value in motion (notably in
the f o r m o f r e a l i z e d p r o f i t s a v a i l a b l e for r e i n v e s t m e n t ) a n d a c o n c r e t e
stock o f a l r e a d y i n v e s t e d t i m e - a n d p l a c e - s p e c i f i c a s s e t s i n t h e c o u r s e o f
Table 1.1 Sources of tension in basic forms of the capital relation

Form Exchange-value moment Use-value moment

Commodity Exchange-value Use-value

Labour-power (a) abstract labour as (a) generic a n d c o n c r e t e

a substitutable skills, d i f f e r e n t f o r m s
factor of p r o d u c t i o n of k n o w l e d g e
(b) sole s o u r c e of (b) s o u r c e of craft p r i d e
surplus value for w o r k e r

Wage (a) m o n e t a r y cost of (a) s o u r c e of effective

production demand
(b) m e a n s t o satisfy w a n t s
supply of useful in a c a s h - b a s e d s o c i e t y
l a b o u r for given time

Money (a) interest bearing (a) m e a s u r e o f v a l u e ,

capital, private credit
(b) i n t e r n a t i o n a l
currency
(c) u l t i m a t e e x p r e s s i o n
of capital in general
store of value, m e a n s
of exchange
(b) n a t i o n a l m o n e y , legal
tender
(c) g e n e r a l f o r m o f p o w e r
in the wider society

Productive (a) abstract value in (a) stock of specific assets

capital motion (or m o n e y to be valorized in
c a p i t a l ) a v a i l a b l e for specific t i m e a n d p l a c e
some form of u n d e r specific
investment in future conditions
time and place (b) concrete
( b ) s o u r c e of p r o f i t s of entrepreneurial
enterprise a n d m a n a g e r i a l skills

Land ( a ) 'free gift of n a t u r e ' (a) freely available a n d

that is [currently] uncultivated resources
unalienable (b) t r a n s f o r m e d n a t u r a l
(b) alienated and resources
alienable property,
source of rents

Knowledge (a) intellectual property (a) intellectual c o m m o n s

(b) m o n e t i z e d risk (b) uncertainty

State Ideal collective capitalist F a c t o r o f social c o h e s i o n

 Capitalism a n d the Capitalist Type of State 21

being valorized; t h e w o r k e r is b o t h an abstract unit of l a b o u r - p o w e r s u b -

stitutable by o t h e r such u n i t s (or, i n d e e d , o t h e r factors of p r o d u c t i o n )
a n d a c o n c r e t e i n d i v i d u a l (or, i n d e e d , a m e m b e r of a c o n c r e t e c o l l e c t i v e
w o r k f o r c e ) w i t h specific skills, k n o w l e d g e a n d creativity;^^ t h e w a g e i s
b o t h a cost of p r o d u c t i o n a n d a source of d e m a n d ; m o n e y functions
both as an international currency exchangeable against other currencies
(ideally i n s t a t e l e s s s p a c e ) a n d a s n a t i o n a l m o n e y c i r c u l a t i n g w i t h i n
national s o c i e t i e s " a n d subject to s o m e m e a s u r e of state control; land
functions b o t h a s a f o r m o f p r o p e r t y ( b a s e d o n t h e p r i v a t e a p p r o p r i a -
tion o f n a t u r e ) d e p l o y e d i n t e r m s o f e x p e c t e d r e v e n u e s i n t h e f o r m o f
rent a n d as a n a t u r a l resource (modified by past actions) that is m o r e or
less r e n e w a b l e a n d r e c y c l a b l e ; k n o w l e d g e i s b o t h t h e basis o f i n t e l l e c t u a l
property rights a n d a collective resource (the intellectual c o m m o n s ) .
Likewise, t h e state is n o t only r e s p o n s i b l e for securing certain k e y
conditions for t h e valorization of capital a n d t h e r e p r o d u c t i o n of
l a b o u r - p o w e r a s a fictitious c o m m o d i t y b u t a l s o h a s o v e r a l l p o l i t i c a l
responsibility for m a i n t a i n i n g social cohesion in a socially divided, plu-
ralistic s o c i a l f o r m a t i o n . I n t u r n , t a x a t i o n i s b o t h a n u n p r o d u c t i v e d e d u c -
tion f r o m p r i v a t e r e v e n u e s ( p r o f i t s o f e n t e r p r i s e , w a g e s , i n t e r e s t , r e n t s )
and a m e a n s to finance collective i n v e s t m e n t a n d c o n s u m p t i o n to c o m -
p e n s a t e for ' m a r k e t f a i l u r e s ' . A n d s o f o r t h .
These structural contradictions are inherent in the capital relation,
and t h e t e n s i o n s a n d d i l e m m a s t h a t t h e y g e n e r a t e p r o v i d e a n i m p o r t a n t
entrypoint into t h e general analysis of capital accumulation. N o n e t h e -
less i t i s a l s o i m p o r t a n t t o r e c o g n i z e t h a t t h e y c a n a s s u m e d i f f e r e n t f o r m s
a n d different w e i g h t s in different contexts. T h e y can also p r o v e m o r e or
less m a n a g e a b l e d e p e n d i n g o n t h e specific s p a t i o - t e m p o r a l f i x e s a n d
i n s t i t u t i o n a l i z e d class c o m p r o m i s e s w i t h w h i c h t h e y a r e f r o m t i m e t o
time associated. T h e s e differences p r o v i d e in t u r n an i m p o r t a n t entry-
p o i n t for a n a l y s i n g d i f f e r e n t s t a g e s a n d / o r v a r i e t i e s o f c a p i t a l i s m . I t i s i n
this c o n t e x t t h a t I will a r g u e t h a t t h e K W N S i s j u s t o n e set o f m e c h a -
nisms a m o n g several t h r o u g h w h i c h t h e always p r o b l e m a t i c d e l i v e r y o f
capitalist e c o n o m i c a n d s o c i a l r e p r o d u c t i o n c o m e s t o b e o r g a n i z e d . I t
c o e x i s t s w i t h o t h e r s u c h m e c h a n i s m s t o p r o d u c e a specific r e p r o d u c t i o n
r e g i m e i n v o l v e d i n t h e o v e r a l l r e g u l a t i o n o f c a p i t a l i s m a n d its e m b e d -
ding i n t o t h e w i d e r s o c i e t y ( s e e c h a p t e r s 2 a n d 4 ) .
Third, m o d e s of regulation a n d patterns of governance vary consid-
erably. T h e r e a r e v a r i o u s w a y s i n w h i c h t o s e e k t h e c l o s u r e o f t h e c i r c u i t
o f c a p i t a l a n d / o r t o c o m p e n s a t e for l a c k o f c l o s u r e i n s e c u r i n g c o n t i n u e d
accumulation. Which of these patterns comes to dominate depends on
t h e specific social a n d s p a t i o - t e m p o r a l m a t r i c e s i n w h i c h t h e s e a t t e m p t s
occur. I n d e e d , d e s p i t e t h e i n h e r e n t t e n d e n c y for c a p i t a l a c c u m u l a t i o n t o
continue e x p a n d i n g until a single w o r l d m a r k e t is c r e a t e d , t h e r e are
22 Capitalism a n d the Capitalist Type of State

m a j o r c o u n t e r t e n d e n c i e s a n d otiier l i m i t s t o t h e c o m p l e t e r e a l i z a t i o n o f
g l o b a l i z a t i o n , e s p e c i a l l y b u t n o t o n l y m its n e o l i b e r a l f o r m ( s e e c h a p t e r s
3 a n d 5 ; a l s o A l t v a t e r a n d M a h n k o p f 1 9 9 9 ; P o l a n y i 1 9 4 4 ) . T h u s specific
a c c u m u l a t i o n r e g i m e s a n d t h e i r m o d e s o f r e g u l a t i o n a r e typically c o n -
s t r u c t e d within specific social spaces a n d s p a t i o - t e m p o r a l f i x e s . T a k e n
t o g e t h e r , t h e s e t h r e e sets o f f a c t o r s i m p l y t h a t t h e r e i s n o single b e s t solu-
tion to t h e regularization of capital accumulation - instead, various accu-
m u l a t i o n r e g i m e s a n d m o d e s o f r e g u l a t i o n will b e a s s o c i a t e d w i t h t h e i r
o w n distinctive forms of a p p e a r a n c e of the basic contradictions, dilem-
m a s a n d c o n f l i c t s n o t e d a b o v e . T h e o v e r a l l c o u r s e o f a c c u m u l a t i o n will
d e p e n d in turn on h o w these different solutions c o m p l e m e n t each o t h e r
and/or win out in competition in the world market.

2. Accumulation as a Principle of Societalization

The self-valorization of capital can occur w h e r e most of the key inputs

i n t o c a p i t a l i s t p r o d u c t i o n t a k e t h e f o r m o f (real o r f i c t i t i o u s ) c o m -
m o d i t i e s ; t h e r e i s effective c o n t r o l o v e r l a b o u r - p o w e r w i t h i n t h e l a b o u r -
p r o c e s s ; t h e e n v i r o n m e n t i s sufficiently s t a b l e t o e n a b l e c a p i t a l s t o
s y s t e m a t i c a l l y o r i e n t their a c t i v i t i e s t o o p p o r t u n i t i e s for profit; a n d
profits c a n b e r e a l i z e d a n d r e i n v e s t e d . N o n e o f this r e q u i r e s t h a t all s o c i a l
relations have been s u b s u m e d under the commodity form and entirely
s u b o r d i n a t e d t o m a r k e t forces. I n d e e d , capitalism w o u l d b e impossible
i f t h i s w e r e so. O n t h e c o n t r a r y , t h e r e i s w i d e v a r i a t i o n i n h o w far c a p i -
talist m a r k e t f o r c e s ( a n d t h e a s s o c i a t e d logic o f p r o f i t - s e e k i n g ) c o m e t o
d o m i n a t e t h e o v e r a l l o r g a n i z a t i o n a n d d y n a m i c s o f social f o r m a t i o n s .
This raises questions a b o u t t h e conditions u n d e r which a c c u m u l a t i o n can
b e c o m e t h e d o m i n a n t principle of societal organization (or societaliza-
tion). F o r there are always interstitial, residual, marginal, irrelevant,
recalcitrant and plain contradictory elements that escape subordination
to a n y given principle of societalization and, indeed, serve as reservoirs
o f f l e x i b i h t y a n d i n n o v a t i o n a s well a s a c t u a l o r p o t e n t i a l s o u r c e s o f
d i s o r d e r . T h i s i m p l i e s i n t u r n t h a t t h e r e i s a m p l e s c o p e for conflict o v e r
societal projects that privilege radically different organizational princi-
p l e s a s well a s for conflict o v e r r i v a l p r o j e c t s b a s e d o n t h e s a m e p r i n c i p l e .
T h u s social f o r m a t i o n s m a y b e r e l a t i v e l y u n i f i e d u n d e r t h e d o m i n a n c e
of religion (theocracies), military-police considerations (national secu-
rity states), nation-building ( n e w nations), socially constructed 'racial'
demarcations (apartheid), capital accumulation (bourgeois societies),
etc. ( o n societalization, see Jessop 1990b: 4 - 6 ) .
I n t h i s s e n s e b o u r g e o i s s o c i e t a l i z a t i o n i n v o l v e s far m o r e t h a n c o n t i n u -
ing accumulation. This can also occur in theocracies, n a t i o n a l security
states, n e w nations, r e v o l u t i o n a r y situations or state socialist societies.
 Capitalism a n d the Capitalist Type of State 23

What bourgeois societalization really involves is the relative s u b o r d i n a -

tion o f a n e n t i r e s o c i a l o r d e r t o t h e l o g i c a n d r e p r o d u c t i o n r e q u i r e m e n t s
of capital accumulation. This could be described as 'the e m b e d d i n g
of the m a r k e t e c o n o m y in a m a r k e t society' (Polanyi 1944); as t h e
development of an 'historic bloc' between the economic base, juridico-
political s u p e r s t r u c t u r e a n d f o r m s o f c o n s c i o u s n e s s ( G r a m s c i 1 9 7 1 ) ; o r
as the rise of a 'bourgeois civilization'. F o u r different m e c h a n i s m s can
contribute to such a situation; e c o n o m i c d e t e r m i n a t i o n , ecological d o m i -
n a n c e , e c o n o m i c d o m i n a t i o n a n d b o u r g e o i s h e g e m o n y T h e first p r i n c i -
ple is a systemic f e a t u r e of t h e o p e r a t i o n of the e c o n o m y , t h e s e c o n d
concerns t h e systemic relations b e t w e e n t h e e c o n o m y a n d o t h e r systems,
the third c o n c e r n s t h e institutional a n d o r g a n i z a t i o n a l d i m e n s i o n s of
structural p o w e r in the e c o n o m y a n d / o r the relation b e t w e e n e c o n o m i c
agents a n d e x t r a - e c o n o m i c f o r c e s , a n d t h e f o u r t h m e c h a n i s m o p e r a t e s i n
t h e first i n s t a n c e o n a n i d e a t i o n a l o r d i s c u r s i v e p l a n e - a l t h o u g h s u c -
cessful h e g e m o n y a l s o t e n d s t o b e c o m e s t r u c t u r a l l y e m b e d d e d a n d d i s -
positionally e m b o d i e d .

Economic determination
M a n y o r t h o d o x Marxists h a v e argued for determination in t h e last
instance of t h e e x t r a - e c o n o m i c by t h e e c o n o m i c . This a m o u n t s to t h e
claim t h a t t h e s o c i a l r e l a t i o n s o f p r o d u c t i o n u l t i m a t e l y d e t e r m i n e t h e
form and functions of juridico-pohtical institutions and the so-called ideo-
logical s u p e r s t r u c t u r e . T h e r e i s l i t t l e m e r i t i n t h i s a r g u m e n t a n d , i n d e e d ,
even on casual inspection, it is i n c o h e r e n t . F o r t h e social relations of p r o -
d u c t i o n c o u l d p l a y t h i s d e t e r m i n i n g r o l e o n l y o n t w o c o n d i t i o n s ; (1) i f
they w e r e wholly self-contained a n d self-reproducing and thus o p e r a t e d
a s a c a u s e w i t h o u t c a u s e ; a n d (2) i f t h e r e w e r e a n e c e s s a r y c o r r e s p o n -
d e n c e b e t w e e n the e c o n o m y , o t h e r institutions a n d the lifeworld. O n c e
we allow for the i n t e r d e p e n d e n c e of t h e e c o n o m i c and extra-economic,
h o w e v e r , t h e e c o n o m i c a l o n e c o u l d n e v e r b e d e t e r m i n a n t i n t h e first, l a s t
or any i n t e r m e d i a t e instance. For the e c o n o m i c lacks t h e self-closure
necessary to d e t e r m i n e the extra-economic w i t h o u t being reciprocally
determined by the latter in turn. T h e same a r g u m e n t applies even m o r e
forcefully t o c l a i m s a b o u t t e c h n o l o g i c a l d e t e r m i n i s m , w h i c h a s s e r t t h e
ultimately d e t e r m i n i n g role of t h e forces of p r o d u c t i o n . An alternative
way o f d e a l i n g w i t h t h i s g e n e r a l i s s u e , i n t e r m s o f e c o l o g i c a l d o m i n a n c e ,
is s u g g e s t e d j u s t b e l o w .
Dismissing the ultimately d e t e r m i n i n g role of the forces of production
a n d / o r t h e t e c h n i c a l a n d social r e l a t i o n s o f p r o d u c t i o n for a n e n t i r e
society does not, h o w e v e r , e x c l u d e their i m p o r t a n c e w i t h i n t h e e c o n o m y .
Here the principle of economic determination can be stated in terms of
the primacy of p r o d u c t i o n in t h e overall circuit of capital. By e x t e n s i o n .
24 Capitalism a n d the Capitalist Type of State

i t m e a n s t h e p r i m a c y o f p r o d u c t i v e c a p i t a l ( n o t t o b e e q u a t e d s o l e l y with
industrial capital) over m o n e y or c o m m e r c i a l capital. This involves no
m o r e ( b u t c e r t a i n l y n o less) t h a n t h e fact t h a t w e a l t h m u s t iirst b e p r o -
d u c e d b e f o r e i t can b e d i s t r i b u t e d or, i n M a r x i s t t e r m s , t h a t v a l u e m u s t
first b e p r o d u c e d b e f o r e i t c a n b e r e a l i z e d . T h e r e c e n t rise a n d fall o f t h e
s o - c a l l e d n e w e c o n o m y b a s e d o n t h e d o t . c o m b u b b l e i l l u s t r a t e s t h i s well
b e c a u s e t h e cash-burn rate of d o t . c o m firms was unsustainable a n d their
collapse destroyed value created elsewhere. Likewise, an expansion of
state credit to stimulate d e m a n d without a matching increaseVi produc-
tion c a n trigger inflation ( o n inflation in A t l a n t i c F o r d i s m , see c h a p t e r 2).
This m e a n s in turn that t h e course of capital accumulation is primar-
ily s h a p e d b y t h e o r g a n i z a t i o n o f t h e c a p i t a l i s t e c o n o m y u n d e r t h e
d o m i n a n c e o f t h e v a l u e f o r m a n d its d y n a m i c m e d i a t i o n t h r o u g h t h e
c a p i t a l i s t l a w o f v a l u e . B e c a u s e p r o d u c t i o n lies a t t h e h e a r t o f t h e circuit
o f c a p i t a l , p r o d u c t i v e c a p i t a l ' s p e r f o r m a n c e i s vital t o t h e o v e r a l l a c c u m u -
l a t i o n p r o c e s s . T h i s i m p l i e s t h a t t h e real r a t e s o f r e t u r n o n m o n e y c a p i t a ]
(including credit), commercial capital a n d l a n d e d capital d e p e n d in t h e
l o n g t e r m o n c o n t i n u e d v a l o r i z a t i o n o f p r o d u c t i v e c a p i t a l . I n t u r n this
d e p e n d s on capital's continued abihty to control t h e terms,,conditions
and performance of wage-labour and, since added value can be reaUzed
only t h r o u g h sale of c o m m o d i t i e s at a p p r o p r i a t e volumes a n d prices, to
e n s u r e t h a t its p r o d u c t s a r e m a r k e t a b l e . O w i n g t o t h e m u l t i p h c i t y o f dis-
tinct, a u t o n o m o u s centres of p r o d u c t i o n and their o u t p u t of goods and
services in the f o r m of commodities, h o w e v e r , the c o o r d i n a t i o n of the
capitalist e c o n o m y is essentially anarchic, m e d i a t e d t h r o u g h m a r k e t
f o r c e s a n d c o m p e t i t i o n . M a r k e t f o r c e s o p e r a t e ex post r a t h e r t h a n ex ante
a n d this a l w a y s p o s e s p r o b l e m s r e g a r d i n g t h e e v e n t u a l v a l i d a t i o n o f
capital's decisions a n d p r o d u c t i o n (for an e x t e n d e d discussion of m a r k e t
f a i l u r e , s e e c h a p t e r 6 ) . T h i s h o l d s t r u e e v e n t h o u g h f i r m s t h e m s e l v e s rely
m o r e on t o p - d o w n organization and internal n e t w o r k i n g t h a n on inter-
nal m a r k e t s a n d m a y also c o o p e r a t e with o t h e r e c o n o m i c agents in joint
projects. F o r the u n d e r l y i n g c o m p e t i t i v e n e s s and c u r r e n t c o m p e t i t i v e
s t r a t e g i e s o f s u c h f i r m s a n d a l l i a n c e s will still b e e x p o s e d t o t h e a u d i t o f
t h e m a r k e t ' s invisible h a n d . T h i s a c c o u n t o f e c o n o m i c d e t e r m i n a t i o n ,
w i t h its e m p h a s i s o n p r o d u c t i o n , h a s m a j o r i m p l i c a t i o n s for a n a l y s i n g t h e
contradictions and d i l e m m a s of so-called post-industrial or k n o w l e d g e -
b a s e d capitalism (see c h a p t e r 3).

Ecological dominance
T h i s c o n c e p t w a s initially d e v e l o p e d i n t h e b i o l o g i c a l s c i e n c e s . E c o l o g i -
cal d o m i n a n c e r e f e r s t h e r e t o t h e fact t h a t o n e s p e c i e s e x e r t s a n o v e r -
riding influence u p o n the o t h e r species in a given ecological c o m m u n i t y
 Capitalism a n d the Capitalist Type of State 25

This i d e a c a n u s e f u l l y b e e x t e n d e d t o s o c i a l s y s t e m s . T h i s r e q u i r e s t h a t
d u e a l l o w a n c e b e m a d e b o t h f o r t h e l a t t e r s ' specificities a s c o m m u n i c a -
tively o r d i s c u r s i v e l y m e d i a t e d s y s t e m s a n d f o r t h e c a p a c i t y o f s o c i a l
forces t o reflect o n , a n d l e a r n a b o u t , t h e i r o w n e v o l u t i o n , t o e n g a g e i n
d e l i b e r a t e a t t e m p t s ( s u c c e s s f u l o r n o t ) t o g u i d e it, a n d e v e n t o m o d i f y
t h e f o r m s i n w h i c h e v o l u t i o n itself e v o l v e s ( W i l l k e 1 9 9 7 : 4 8 - 5 1 ) . T h u s
u n d e r s t o o d , e c o l o g i c a l d o m i n a n c e refers t o t h e s t r u c t u r a l a n d / o r s t r a t e -
gic c a p a c i t y of a g i v e n s y s t e m in a s e l f - o r g a n i z i n g e c o l o g y of s y s t e m s to
i m p r i n t its d e v e l o p m e n t a l l o g i c o n o t h e r s y s t e m s ' o p e r a t i o n s far m o r e
t h a n t h e s e systems a r e a b l e t o i m p o s e t h e i r r e s p e c t i v e logics o n t h a t
system." This capacity is always mediated in and t h r o u g h the operational
logics o f o t h e r s y s t e m s a n d t h e c o m m u n i c a t i v e r a t i o n a l i t i e s o f t h e life-
world. F o r e x a m p l e , t h e ecological d o m i n a n c e of capitalism o v e r m o d e r n
states is m e d i a t e d in p a r t t h r o u g h state m a n a g e r s ' calculations a b o u t t h e
likely i m p a c t o f t h e i r d e c i s i o n s o n a l t e r a t i o n s i n t h e m o n e y m a r k e t s a n d
fisco-financial system on which state revenues depend. Conversely, state
activities a n d p e r f o r m a n c e t e n d t o i m p a c t o n t h e e c o n o m y t h r o u g h
m a r k e t a c t o r s ' c a l c u l a t i o n s a b o u t t h e i r i m p a c t o n o p p o r t u n i t i e s f o r profit
(or o t h e r f o r m s o f i n c o m e ) . F o r e x a m p l e , w h e r e a s t h e i m p e r i a h s t r o l e s
of Britain a n d the U S A h a v e b e e n associated with strong military-
industrial complexes, we find a well-developed 'social-industrial' com-
plex i n social d e m o c r a t i c w e l f a r e r e g i m e s ( O ' C o n n o r 1973). A n o t h e r
example of the relatively p a t h - d e p e n d e n t structural coupling and co-
evolution of e c o n o m i c a n d political regimes can be f o u n d in t h e forms
of labour flexibility e n c o u r a g e d by different welfare regimes. T h u s liberal
welfare regimes with hire-and-fire labour m a r k e t s encourage employers
to exercise their rights to m a n a g e , discourage w o r k e r s f r o m investing in
f i r m - s p e c i f i c skills, a n d p r o m o t e t h e e x p a n s i o n o f l o w - w a g e p r i v a t e s e c t o r
services. I n c o n t r a s t , social d e m o c r a t i c a n d C h r i s t i a n d e m o c r a t i c ( o r
corporatist-conservative) welfare regimes are associated w i t h economic

nd social rights that p r o d u c e relatively inflexible, h i g h - w a g e l a b o u r

markets; this e n c o u r a g e s w o r k e r s to a c q u i r e firm- or branch-specific
skills, p r o m p t s f i r m s t o t a k e a d v a n t a g e o f a s k i l l e d l a b o u r f o r c e a n d
develop high-tech, high-productivity processes and products to recover
their h i g h e r w a g e costs, a n d discourages t h e e x p a n s i o n of low-wage, low-
p r o d u c t i v i t y s e r v i c e s s e c t o r s ( E s t e v e z - A b e e t al. 2 0 0 1 ; S c h a r p f 1 9 9 7 ) . A s
)r the lifeworld, t h e ecological d o m i n a n c e of capitalism d e p e n d s on t h e
e x t e n t t o w h i c h m o n e t i z e d , p r o f i t - a n d - l o s s c a l c u l a t i o n p e n e t r a t e s t h e life-
world at the e x p e n s e of o t h e r m o d e s of calculation a n d subjectivity. In
t r n , o t h e r i d e n t i t i e s , v a l u e s a n d m o d e s o f c a l c u l a t i o n will affect t h e
capitalist e c o n o m y mainly insofar as t h e y s h a p e o p p o r t u n i t i e s for profit
(or o t h e r f o r m s of i n c o m e ) - for e x a m p l e , as sources of l a b o u r m a r k e t
s e g m e n t a t i o n , t h r e a t s to w a g e differentials, or an o p p o r t u n i t y to d e v e l o p
26 Capitalism a n d fhe Capitalist Type of State

n e w m a r k e t s . I e x p l o r e w h a t t h i s i m p l i e s for r e s i s t a n c e t o c a p i t a l i s m i n
the next section.
Ecological d o m i n a n c e is always differential, relational a n d contingent.
T h u s a g i v e n s y s t e m c a n b e m o r e o r less e c o l o g i c a l l y d o m i n a n t ; its
d o m i n a n c e will v a r y across s y s t e m s a n d i n different, s p h e r e s o r a s p e c t s o f
t h e l i f e w o r l d ; a n d its d o m i n a n c e will d e p e n d o n t h e d e v e l o p m e n t o f t h e
entire social ecosystem. This d o e s not m e a n that t h e ecologicahy d o m i -
n a n t s y s t e m will n o t b e a f f e c t e d b y t h e o p e r a t i o n o f o t h e r S y s t e m s o r t h a t
specific s o c i a l forces will n o t a t t e m p t t o r e v e r s e , b r a k e \or g u i d e t h a t
d o m i n a n c e . R a t h e r , a s its n a m e implies, e c o l o g i c a l d o m i n a n c e i n v o l v e s a n
ecological relation w h e r e o n e s y s t e m b e c o m e s d o m i n a n t in a c o m p l e x ,
c o - e v o l v i n g s i t u a t i o n ; it d o e s n o t i n v o l v e a o n e - s i d e d relation of domi-
nation w h e r e o n e s y s t e m u n i l a t e r a l l y i m p o s e s its will o n o t h e r s (cf. M o r i n
1980: 4 4 ) . T h e r e i s n o ' l a s t i n s t a n c e ' i n r e l a t i o n s o f e c o l o g i c a l d o m i n a n c e
- t h e y a r e a l w a y s c o n t i n g e n t . T h u s w e m u s t s t u d y t h e h i s t o r i c a l l y specific
conditions u n d e r w h i c h a c c u m u l a t i o n tends t o b e c o m e the ecologically
d o m i n a n t p r o c e s s in t h e w i d e r social f o r m a t i o n .
T h e r e l e v a n c e of ecological d o m i n a n c e to o u r c o n c e r n s b e c o m e s clear
o n c e w e r e c a l l t h a t c a p i t a l i s m c a n n o t b e r e p r o d u c e d solely t h r o u g h t h e
value form. It d e p e n d s on o t h e r systems a n d t h e lifeworld to h e l p close
t h e c i r c u i t o f c a p i t a l a n d t o c o m p e n s a t e f o r m a r k e t failures. O u t s i d e a
fully i m a g i n a r y p u r e c a p i t a l i s t e c o n o m y , t h e n , c a p i t a l i s m i s s t r u c t u r a l l y
c o u p l e d to o t h e r systems a n d the lifeworld. T h u s t h e d e v e l o p m e n t of the
c a p i t a l i s t ( m a r k e t ) e c o n o m y i s c l o s e l y t i e d t o i i o n - e c o n o m i c factors. I t
n e v e r f o l l o w s a p u r e l y e c o n o m i c logic.
Since o t h e r systems a n d the lifeworld are structurally coupled to the
e c o n o m y a s well a s e a c h o t h e r , w e s h o u l d a s k w h i c h , i f a n y , o f t h e m c o u l d
b e c o m e e c o l o g i c a l l y d o m i n a n t . T h e r e a r e a t least f i v e a n a l y t i c a l l y dis-
t i n c t , b u t e m p i r i c a l l y i n t e r r e l a t e d , a s p e c t s t h a t affect a s y s t e m ' s p o t e n t i a l
i n this r e g a r d i n t h e s o c i a l ( a s o p p o s e d t o b i o l o g i c a l ) w o r l d :

• t h e e x t e n t o f its i n t e r n a l s t r u c t u r a l a n d o p e r a t i o n a l c o m p l e x i t y a n d
t h e r e s u l t i n g d e g r e e s o f f r e e d o m t h i s gives i t i n s e c u r i n g a g i v e n
outcome;
• its ability t o c o n t i n u e o p e r a t i n g , i f n e c e s s a r y t h r o u g h s p o n t a n e o u s ,
a d a p t i v e self-reorganization, in a wide r a n g e of c i r c u m s t a n c e s a n d in
t h e f a c e o f m o r e o r less s e r i o u s p e r t u r b a t i o n s ;
• its c a p a c i t i e s t o d i s t a n t i a t e a n d c o m p r e s s its o p e r a t i o n s i n t i m e a n d
s p a c e t o e x p l o i t t h e w i d e s t p o s s i b l e r a n g e o f o p p o r t u n i t i e s f o r self-
reproduction;
• its c a p a c i t y t o r e s o l v e o r m a n a g e its i n t e r n a l c o n t r a d i c t i o n s , p a r a -
d o x e s a n d d i l e m m a s , t o d i s p l a c e t h e m i n t o its e n v i r o n m e n t , o r d e f e r
t h e m into the future; and
 Capitalism a n d the Capitalist Type of State 27

. its c a p a c i t y t o g e t a c t o r s i n o t h e r s y s t e m s a n d t h e h f e w o r l d t o i d e n -
tify its o w n o p e r a t i o n s a s c e n t r a l t o t h e r e p r o d u c t i o n o f t h e w i d e r
system of w h i c h it is always a n d necessarily m e r e l y a p a r t - a n d t h u s
t o g e t t h e m t o o r i e n t t h e i r o p e r a t i o n s m o r e o r less w i l l i n g l y t o t h e i r
u n d e r s t a n d i n g o f its p a r t i c u l a r r e p r o d u c t i o n r e q u i r e m e n t s .

I n g e n e r a l t e r m s , t h e c a p i t a l i s t e c o n o m y , w i t h its d i s t i n c t i v e , self-
v a l o r i z i n g logic, t e n d s t o h a v e j u s t t h o s e p r o p e r t i e s t h a t f a v o u r e c o l o g i c a l
dominance. It is internally complex and flexible because of the decen-
trahzed, anarchic n a t u r e of m a r k e t forces a n d t h e price m e c h a n i s m ' s dual
role a s a s t i m u l u s t o l e a r n i n g a n d a s a f l e x i b l e m e c h a n i s m for a l l o c a t i n g
capital to different e c o n o m i c activities. M o r e o v e r , as capitalism develops,
different o r g a n i z a t i o n s , i n s t i t u t i o n s a n d a p p a r a t u s e s t e n d t o e m e r g e t o
e x p r e s s d i f f e r e n t m o m e n t s o f its c o n t r a d i c t i o n s , d i l e m m a s a n d p a r a d o x e s
and t h e s e m a y t h e n i n t e r a c t t o c o m p e n s a t e for m a r k e t f a i l u r e s w i t h i n t h e
f r a m e w o r k o f s p e c i f i c s p a t i o - t e m p o r a l f i x e s . C a p i t a l also d e v e l o p s i t s
c a p a c i t y t o e x t e n d its o p e r a t i o n s i n t i m e a n d s p a c e ( t i m e - s p a c e d i s t a n t i a -
tion) a n d t o c o m p r e s s t h e m ( t i m e - s p a c e c o m p r e s s i o n ) , m a k i n g i t e a s i e r
t o follow its o w n s e l f - e x p a n s i o n a r y l o g i c i n r e s p o n s e t o p e r t u r b a t i o n s .
Through these and other mechanisms it develops the capacity to escape
the particular structural c o n s t r a i n t s of o t h e r s y s t e m s a n d t h e i r a t t e m p t s
a t c o n t r o l e v e n i f i t c a n n o t e s c a p e f r o m its o v e r a l l d e p e n d e n c e o n t h e s e
s y s t e m s ' g e n e r a l c o n t r i b u t i o n t o its o w n o p e r a t i o n o r , o f c o u r s e , f r o m t h e
c r i s i s - t e n d e n c i e s a s s o c i a t e d w i t h its o w n i n t e r n a l c o n t r a d i c t i o n s a n d
dilemmas. A t t e m p t s to escape particular constraints and particular
a t t e m p t s a t c o n t r o l c a n o c c u r t h r o u g h its o w n i n t e r n a l o p e r a t i o n s i n t i m e
(discounting, i n s u r a n c e , risk m a n a g e m e n t , futures, derivatives, etc.) or
space ( c a p i t a l f l i g h t , r e l o c a t i o n , e x t r a - t e r r i t o r i a l i t y , e t c . ) , t h r o u g h t h e s u b -
version o f t h e l o g i c o f o t h e r s y s t e m s t h r o u g h t h e i r c o l o n i z a t i o n b y t h e
commodity form, or t h r o u g h simple personal corruption. In certain con-
ditions i t c a n a l s o w i n s u p p o r t f o r t h e p r i m a c y o f a c c u m u l a t i o n o v e r o t h e r
p r i n c i p l e s o f s o c i e t a l i z a t i o n i n t h e c o n t i n u i n g s t r u g g l e for p o l i t i c a l , i n t e l -
lectual a n d m o r a l l e a d e r s h i p .

N o n e t h e l e s s , e c o l o g i c a l d o m i n a n c e , i n s o f a r a s i t exists, i s a l w a y s c o n -
t i n g e n t a n d h i s t o r i c a l l y v a r i a b l e . I t d e p e n d s o n t h e specific p r o p e r t i e s o f
accumulation regimes and m o d e s of regulation, the n a t u r e of other
s y s t e m s i n its e n v i r o n m e n t , a n d s p e c i f i c c o n j u n c t u r a l f e a t u r e s . O t h e r
s y s t e m s a n d t h e i r a c t o r s will b e m o r e o r less a b l e t o l i m i t o r r e s i s t c o m -
m o d i f i c a t i o n a n d t o s t e e r e c o n o m i c a c t i v i t i e s b y i m p o s i n g t h e i r o w n sys-
temic priorities a n d m o d e s of calculation on t h e e c o n o m y . By w a y of
illustration, consider the i m p a c t of a territorial state c o m m i t t e d to an
a l t e r n a t i v e p r i n c i p l e o f s o c i e t a l i z a t i o n a n d willing t o a c c e p t t h e p o l i t i c a l
costs o f d e - c o u p l i n g f r o m t h e w o r l d m a r k e t . ' " C o n v e r s e l y , t h e r i s e o r
28 Capitalism a n d the Capitalist Type of State

r e - e m e r g e n c e o f g l o b a l i z a t i o n , e s p e c i a l l y i n its n e o l i b e r a l f o r m , i s i m p o r -
tant in e n h a n c i n g the ecological d o m i n a n c e of capital by e x p a n d i n g the
scope for a c c u m u l a t i o n to escape such constraints (Jessop 2000: 3 2 8 - 3 3 ;
c h s 3 a n d 5 ) . Y e t t h i s will a l s o e n h a n c e t h e s c o p e for t h e c o n t r a d i c t i o n s
and dilemmas of a relatively unfettered (or d i s e m b e d d e d ) capitalism to
s h a p e t h e o p e r a t i o n of o t h e r systems a n d m a y t h e r e b y u n d e r m i n e crucial
e x t r a - e c o n o m i c conditions for a c c u m u l a t i o n .
M o r e o v e r , e v e n w h e n c o n d i t i o n s d o f a v o u r t h e long-terrri e c o l o g i c a l
d o m i n a n c e of the capitalist economy, other systems may gain short-term
p r i m a c y i n r e s p o n s e t o crises e l s e w h e r e . F o r n o individual system repre-
s e n t s , o r c a n s u b s t i t u t e for, t h e w h o l e . E a c h a u t o p o i e t i c s y s t e m i s b o t h
operationally autonomous and substantively interdependent with other
s y s t e m s . E v e n a n e c o l o g i c a l l y d o m i n a n t s y s t e m d e p e n d s o n t h e socially
adequate performance of other systems and a normally subordinate
system m a y b e c o m e d o m i n a n t in exceptional circumstances. This would
o c c u r t o t h e e x t e n t t h a t s o l v i n g a n o n - e c o n o m i c crisis b e c o m e s t h e m o s t
p r e s s i n g p r o b l e m f o r t h e s u c c e s s f u l r e p r o d u c t i o n o f all s y s t e m s -
including t h e capitalist economy. For example, during major wars or
p r e p a r a t i o n s for them, states m a y try t o plan o r g u i d e t h e e c o n o m y i n
t h e light o f p e r c e i v e d m i l i t a r y - p o l i t i c a l n e e d s . T h i s c a n also b e s e e n i n
Cold W a r n a t i o n a l security states (for e x a m p l e , T a i w a n , South K o r e a ) .
After such states of emergency have e n d e d , however, t h e primacy of
a c c u m u l a t i o n i s l i k e l y t o b e r e - a s s e r t e d . This d o e s n o t e x c l u d e
path-dependent traces of such exceptional conditions in the normally
d o m i n a n t s y s t e m (for e x a m p l e , t h e distinctive f e a t u r e s o f p e a c e t i m e w a r
e c o n o m i e s or legacies of total w a r on p o s t w a r e c o n o m i c trajectories).
B u t , even given such path-dependency, the 'quasi-transcendental
m e t a - c o d e ' " o f t h e e c o l o g i c a l l y d o m i n a n t s y s t e m will still i m p a c t m o r e
on o t h e r systems' d e v e l o p m e n t in t h e multilateral process of structural
c o u p l i n g a n d c o - e v o l u t i o n t h a n t h e y c a n o n it.

Economic domination
E c o n o m i c d o m i n a t i o n h a s t w o d i m e n s i o n s . T h e first i s i n t e r n a l t o t h e
e c o n o m y and concerns the p o w e r of one or a n o t h e r fraction of capital
( o r s i m p l y a c a r t e l o r e v e n a s i n g l e f i r m ) t o i m p o s e its i m m e d i a t e i n t e r -
ests on o t h e r fractions, regardless of their wishes and/or at their expense.
Such d o m i n a t i o n can derive directly from the position of the relevant
f r a c t i o n ( c a r t e l , f i r m ) i n t h e o v e r a l l c i r c u i t o f c a p i t a l i n a specific e c o -
nomic conjuncture and/or indirectly from the use of s o m e f o r m of extra-
e c o n o m i c coercion (including the exercise of state p o w e r ) . Interestingly,
m a n y business strategy h a n d b o o k s p r o v i d e advice on h o w best to build
a n d defend such d o m i n a n t m a r k e t positions to avoid e x p o s u r e to the r a w
w i n d s of perfect c o m p e t i t i o n . T h e r e is wide scope for variation in t h e
 Capitalism a n d the Capitalist Type of State 29

i n c i d e n c e a n d e x e r c i s e o f e c o n o m i c d o m i n a t i o n - s u b j e c t t o tlie r e q u i r e -
m e n t tliat tliis m u s t u l t i m a t e l y b e c o m p a t i b l e w i t h c o n t i n u e d v a l o r i z a -
tion of p r o d u c t i v e capital. If t h e latter does n o t occur on an a p p r o p r i a t e
scale ( u p t o t h e g l o b a l ) , t h e r e will b e a d e c l i n i n g m a s s o f s u r p l u s v a l u e
for d i s t r i b u t i o n a m o n g all c a p i t a l s . I n t u r n , t h i s will p r o v o k e a crisis i n
the a c c u m u l a t i o n r e g i m e or long-run decline, which can only be resolved
capitalistically b y d e v e l o p i n g a n effective n e w a c c u m u l a t i o n s t r a t e g y a n d
i n s t i t u t i o n a l i z i n g it. H o w t h i s t e n s i o n b e t w e e n e c o n o m i c d o m i n a t i o n a n d
t h e v a l o r i z a t i o n o f p r o d u c t i v e c a p i t a l p l a y s itself o u t i s o n e o f t h e
k e y d i f f e r e n t i a t i n g f a c t o r s a c r o s s v a r i e t i e s o f c a p i t a l i s m a n d specific
accumulation regimes, with their distinctive modes of regulation and
governance (for an early discussion of e c o n o m i c d o m i n a t i o n in this
sense, albeit in different t e r m s , see V e b l e n 1 9 5 8 , 1 9 6 7 ; and, for a r e c e n t
interpretation of V e b l e n in similar terms, see N i t z a n 1998).
T h e s e c o n d d i m e n s i o n of e c o n o m i c domination involves t h e articula-
tion o f t h e e c o n o m i c a n d e x t r a - e c o n o m i c . H e r e , i t r e f e r s t o t h e c a p a c i t y
of capital in general, a given fraction of capital, or p a r t i c u l a r capitals
to steer t h e evolution of o t h e r institutional o r d e r s in line with the d e -
mands of capital accumulation, either through sheer structural p o w e r or
t h r o u g h specific s t r a t e g i c c a p a c i t i e s . S u c h d o m i n a t i o n i s g r o u n d e d i n t h e
n a t u r e o f c a p i t a l i s m , c a n e x p r e s s itself i n s e v e r a l w a y s a n d c a n , i n c e r t a i n
circumstances, b e c o m e a major element in the m o r e general ecological
d o m i n a n c e o f c a p i t a l i s m . F i r s t , a n d m o s t c r u d e l y , c a p i t a l c a n u s e its
' s t r i k e ' , ' s a b o t a g e ' a n d 'flight' p o w e r s t o s e c u r e t h e c o m p l i a n c e o f o t h e r
s y s t e m s ( s u c h a s t h e s t a t e ) w i t h its specific r e p r o d u c t i o n r e q u i r e m e n t s .
In t h e long t e r m this capacity is g r o u n d e d in the tendential ecological
dominance of the capitalist economy; in the short term, it depends on
specific f o r m s o f m a t e r i a l i n t e r d e p e n d e n c e b e t w e e n t h e e c o n o m i c a n d
n o n - e c o n o m i c . S e c o n d , a s c a p i t a l s e a r c h e s for n e w s o u r c e s o f v a l o r i z a -
tion, c o m m o d i t y r e l a t i o n s c a n b e e x t e n d e d i n t o s p h e r e s n o t c u r r e n t l y
s u b j e c t t o t h e logic o f a c c u m u l a t i o n . T h i s p r o c e s s i s s e e n i n c o m m o d i -
f i c a t i o n o f p o l i t i c a l , e d u c a t i o n a l , h e a l t h , scientific a n d m a n y o t h e r
activities, s o t h a t t h e y c o m e t o b e p r i m a r i l y a n d d i r e c t l y o r i e n t e d t o
o p p o r t u n i t i e s f o r profit. T h i r d , c a p i t a l c a n s e e k t o i m p o s e a n e c o n o m i z -
ing, p r o f i t - s e e k i n g l o g i c o n o t h e r s y s t e m s , e v e n t h o u g h t h e i r a c t i v i t i e s
r e m a i n largely n o n - c o m m e r c i a l . This b e c o m e s e v i d e n t w h e n t h e choice
a m o n g these n o n - c o m m e r c i a l activities is s h a p e d by calculations a b o u t
t h e e c o n o m i c profitability of applying t h e relevant p r i m a r y c o d e in o n e
way o r a n o t h e r . F o r e x a m p l e , n e o l i b e r a l e d u c a t i o n a l , h e a l t h , scientific
and other 'reforms' are intended to induce decision-makers in these
systems t o b e c o m e m o r e business-like. T h e y are i n d u c e d t o m a k e j u d g e -
m e n t s o n e d u c a t i o n a l , m e d i c a l o r scientific m a t t e r s n o t o n l y i n t e r m s o f
their r e s p e c t i v e p r i m a r y c o d e s , b u t a l s o i n t e r m s o f t h e i r f i n a n c i a l i m p l i -
cations. T h i s i s r e f l e c t e d i n c a r e e r i s m , t h e i n f l u e n c e o f m a r k e t p r o x i e s i n
30 Capitalism a n d the Capitalist Type of State

n o n - c o m m e r c i a l organizations a n d t h e s u b o r d i n a t i o n of d i v e r s e institu-
tions to the (perceived, alleged) imperatives of a strong a n d healthy
(internationally competitive) economy.

Economic hegemony
A c c u m u l a t i o n s t r a t e g i e s i n v o l v e e f f o r t s t o r e s o l v e conflicts b e t w e e n t h e
n e e d s of capital in g e n e r a l a n d particular capitals by constructing an
i m a g i n e d ' g e n e r a l e c o n o m i c i n t e r e s t ' t h a t will a l w a y s a n d n e c e s s a r i l y
m a r g i n a l i z e s o m e capitalist interests. E c o n o m i c h e g e m o n y exists w h e r e
a g i v e n a c c u m u l a t i o n strategy^* i s t h e basis for a n i n s t i t u t i o n a l i z e d c o m -
p r o m i s e b e t w e e n o p p o s e d social forces for c o o r d i n a t i n g , g o v e r n i n g or
guiding activities within a n d across different institutional orders around
t h e p u r s u i t o f a p a r t i c u l a r e c o n o m i c t r a j e c t o r y . I n t e r e s t s a r e n o t only
relational b u t also relative, such that a given actor only has interests in
relation to others a n d relative to different spatial and temporal horizons.
T h e i m a g i n e d general interest limits t h e identities a n d relations relative
to which interests a r e calculated; a n d it defines the spatial a n d t e m p o r a l
h o r i z o n s w i t h i n w h i c h this o c c u r s . I t i n v o l v e s specific n o t i o n s a b o u t
which identities and interests can be synthesized within a general
interest, about t h e articulation of different t e m p o r a l horizons (short-,
m e d i u m - a n d l o n g - t e r m , business cycle, e l e c t o r a l cycle, l o n g wave, etc.),
a n d a b o u t s p a t i a l h o r i z o n s ( l o c a l , r e g i o n a l , n a t i o n a l , s u p r a n a t i o n a l , etc.).
T h u s a conception of t h e general e c o n o m i c interest privileges s o m e iden-
tities, i n t e r e s t s a n d s p a t i o - t e m p o r a l h o r i z o n s a n d m a r g i n a l i z e s o r s a n c -
tions others. It also refers to w h a t is needed to secure an institutionalized
class c o m p r o m i s e a p p r o p r i a t e t o t h a t a c c u m u l a t i o n s t r a t e g y a n d t o
a d d r e s s w i d e r p r o b l e m s o f social c o h e s i o n . I n all t h e s e r e s p e c t s i t i s
closely r e l a t e d t o s p a t i o - t e m p o r a l f i x e s (see b e l o w ) .
T h e c o n d i t i o n s for a c c u m u l a t i o n a n d r e g u l a t i o n o f t e n g e t i d e n t i f i e d
only t h r o u g h a trial-and-error search that reveals t h e m m o r e through
r e p e a t e d failure t h a n sustained success. M o r e o v e r , t h e r e is nothing in the
e c o n o m i c logic o f a c c u m u l a t i o n t h a t e n t a i l s t h a t i t will i n e v i t a b l y s u b o r -
d i n a t e o t h e r institutional orders or colonize the lifeworld. To the e x t e n t
t h a t this occurs, it d e p e n d s on t h e o u t c o m e of pohtical a n d ideological
s t r u g g l e s a r o u n d p o l i t i c a l p r o j e c t s a n d h e g e m o n i c v i s i o n s a s well a s o n
t h e e c o l o g i c a l d o m i n a n c e o f t h e c i r c u i t o f capital ( f o r f u r t h e r d i s c u s s i o n ,
see Jessop 1990b; 196-219, 3 0 7 - 3 7 ) .

Capitalist societalization and resistance

A p p r o a c h i n g capitalist societalization in these t e r m s e n a b l e s us to iden-
tify s o u r c e s o f r e s i s t a n c e t o c a p i t a l i s t d o m i n a n c e , d o m i n a t i o n a n d h e g e -
 Capitalism and the Capitalist Type of State 31

m o n y . First, w h e r e v a l o r i z a t i o n d o m i n a t e s , class s t r u g g l e s e m e r g e . T h i s
h a p p e n s n o t only in the capitalist e c o n o m y narrowly seen - t h e m a i n
iield o f t h e e c o n o m i c class s t r u g g l e b e t w e e n c a p i t a l a n d l a b o u r - b u t also
in various extra-economic contexts linked to capitalist exploitation.
M o r e o v e r , i f c o m m o d i f i c a t i o n i s p u s h e d b e y o n d c e r t a i n limits, ' m a r k e t
f a i l u r e ' will t h r e a t e n c a p i t a l a c c u m u l a t i o n a s a w h o l e . S e c o n d , w h e r e
another system code or non-class identities r e m a i n primary, the imposi-
tion o f p r o f i t a b i l i t y a s a s e c o n d a r y c o d e m a y b e r e s i s t e d . F o r i n s t i t u t i o n a l
o r d e r s a n d social r e l a t i o n s o u t s i d e t h e i m m e d i a t e l o g i c o f v a l o r i z a t i o n
typically h a v e t h e i r o w n v a l u e s a n d n o r m s , b a s e s o f social i n c l u s i o n o r
e x c l u s i o n , t h e i r o w n f o r m s o f s t r u c t u r e d conflict, a n d s o f o r t h . T h i s t e n -
dency is also structurally limited by m a r k e t failures of different kinds.
Tiiird, a t t e m p t s t o e s t a b l i s h c a p i t a l i s t h e g e m o n y o f t e n p r o v o k e c o u n t e r -
s t r u g g l e s t o resist t h e c l a i m t h a t a c c u m u l a t i o n i s t h e k e y p r e c o n d i t i o n for
r e a l i z i n g o t h e r s o c i a l g o a l s . T h i s t a k e s u s well b e y o n d a c t i o n s t o m o d i f y
o r c h a l l e n g e s y s t e m logics t o i n c l u d e t h e l i f e w o r l d , w h i c h , w i t h its w i d e
range of identities, values a n d interests, can be a major source of resis-
tance to (as well as site for struggles to e s t a b l i s h ) b o u r g e o i s h e g e m o n y .

On class struggle
I t i s o n l y t h r o u g h a v e r y e l a s t i c a n d i m p r e c i s e u s e o f t h e c o n c e p t t h a t all
t h e s e f o r m s o f r e s i s t a n c e c a n b e e n t i r e l y r e d u c e d t o class s t r u g g l e . I
prefer to restrict the latter t e r m to struggles to establish, maintain or
r e s t o r e t h e c o n d i t i o n s for s e l f - v a l o r i z a t i o n w i t h i n t h e c a p i t a l i s t e c o n o m y
u n d e r s t o o d i n its i n c l u s i v e s e n s e . T h i s c e r t a i n l y e x t e n d s w e l l b e y o n d
struggles over w a g e s a n d w o r k i n g c o n d i t i o n s to i n c l u d e such aspects of
modes of economic regulation as the m o n e y form, modes of competi-
t i o n , e c o n o m i c a n d social p o l i c y r e g i m e s , o r i n t e r n a t i o n a l e c o n o m i c
r e g i m e s . M o r e o v e r , e v e n i n t h i s b r o a d ( b u t far f r o m a l l - e m b r a c i n g )
context, it is useful to distinguish explicit 'class c o n s c i o u s n e s s ' f r o m t h e
actual i m p a c t of different struggles. This distinction m a t t e r s for t w o m a i n
reasons: first, t h e p r o c l a i m e d class i d e n t i t y of a given social force a n d / o r
form of struggle could be deliberately misrepresented, simply m i s t a k e n
o r w h o l l y i m a g i n a r y ; s e c o n d , t h e p o l y v a l e n c e o f all social s t r u g g l e s m e a n s
that their provisional o u t c o m e s can often be recuperated or subverted
a t l a t e r d a t e s . T h e class r e l e v a n c e o f p a r t i c u l a r s t r u g g l e s i s n e v e r g i v e n
o n c e a n d for a l w a y s b u t i s b o t h f o u g h t for a n d p l a y e d o u t o v e r t i m e
a n d space. T h e r e is certainly no univocal c o r r e s p o n d e n c e b e t w e e n t h e
d e c l a r e d class b e l o n g i n g (i.e. l o c a t i o n , affiliation o r m e m b e r s h i p ) a n d t h e
actual class i m p a c t of particular social m o v e m e n t s or forms of struggle.
N o r , e q u a l l y o b v i o u s l y , c a n class i n t e r e s t s o r t h e i r i m p a c t b e d e r i v e d f r o m
abstract positions in the capital relation. A n y calculation of such
32 Capitalism a n d the Capitalist Type of State

interests requires participants or observers to u n d e r t a k e a strategic-

r e l a t i o n a l a n a l y s i s o f specific c o n j u n c t u r e s - i n c l u d i n g t h e e x t e n t t o
which a c c u m u l a t i o n is t h e d o m i n a n t principle of societalization (see
J e s s o p 1982: 2 4 1 - 7 ) .
T h e r e m a i n i n g s i t e s a n d s t a k e s o f r e s i s t a n c e t o c a p i t a l i s m a r e less
s u i t e d t o a s i m p l e class a n a l y s i s (see t a b l e 1.2). T h e y o f t e n i n v o l v e c o n -
f l i c t s o v e r t h e v e r y p r i n c i p l e o f a c c u m u l a t i o n itself r a t h e r t h a n o v e r class
i n t e r e s t s w i t h i n c a p i t a l i s m . T h e y i n v o l v e b o t h t h e e x t e n s i o n o f t h e logic
of capital to other spheres and attempts to establish bourgeois^hegemony
o v e r s o c i e t y a s a w h o l e . S u c h conflicts o f t e n m o b i l i z e p o p u l a r m o v e -
m e n t s organized a r o u n d issues of social exclusion and marginalization
a n d / o r 'elite' social m o v e m e n t s c o n c e r n e d to realign diverse institutional
orders, identities a n d interests. 'Civil society' can b e c o m e a major stake
i n m a n y o f t h e s e conflicts. I t i s t h e s i t e b o t h o f c o l o n i z i n g s t r u g g l e s t o
i n t e g r a t e civil s o c i e t y m o r e e f f e c t i v e l y i n t o t h e s e r v i c e o f o n e o r a n o t h e r
specific i n s t i t u t i o n a l o r d e r (for e x a m p l e , t h r o u g h c o m m o d i f i c a t i o n , j u r i d i -
fication, scientization, the rise of t h e 'learning society', politicization,
m i l i t a r i z a t i o n , etc.) a n d a l s o o f s t r u g g l e s t o r e s i s t a n d r o l l b a c k s u c h
c o l o n i z a t i o n a t t e m p t s i n d e f e n c e o f i d e n t i t i e s a n d i n t e r e s t s t h a t lie
o u t s i d e a n d / o r c r o s s - c u t t h e m ( f o r e x a m p l e , class, g e n d e r , s e x u a l o r i e n t a -
t i o n , ' r a c e ' , n a t i o n , s t a g e i n t h e l i f e - c o u r s e , disability, c i t i z e n s h i p , h u m a n
rights, or t h e e n v i r o n m e n t ) . In this sense, p o p u l a r or elite m o v e m e n t s
organized a r o u n d extra-economic institutional orders, with their o w n
m o d e s of d o m i n a t i o n and exclusion a n d their o w n politics of identity and
d i f f e r e n c e , h a v e n o n e c e s s a r y class b e l o n g i n g ( L a c l a u 1 9 7 7 ) . B u t t h e y
still h a v e a c o n j u n c t u r a l l y d e t e r m i n e d - t h u s h a r d t o c a l c u l a t e a n d p r o -
v i s i o n a l - class r e l e v a n c e . T h e o p p o s i t e p r o b l e m o c c u r s a s o s t e n s i b l y
non-class m o v e m e n t s (such as feminism or anti-racist m o v e m e n t s ) seek
to calculate t h e strategic or tactical v a l u e of alliances w i t h class-based or
largely class-relevant m o v e m e n t s . All such struggles involve serious
strategic dilemmas. These include the relative weight to be attached to
d i f f e r e n t b a s e s o f m o b i l i z a t i o n i n b r o a d c o a l i t i o n s ; a n d t h e risks o f p o l i t i -
cal f r a g m e n t a t i o n w h e n t h e r e a r e n o a t t e m p t s t o b u i l d l a s t i n g c o a U t i o n s
w h e n t h e r e a r e m a n y s u c h b a s e s ( P o u l a n t z a s 1978). T h e s t r u g g l e t o e s t a b -
lish a c c u m u l a t i o n a s a d o m i n a n t / h e g e m o n i c p r i n c i p l e o f s o c i e t a l i z a t i o n
t y p i c a l l y e x t e n d s w e l l b e y o n d class s t r u g g l e s , e v e n b r o a d l y u n d e r s t o o d .

Some preliminary conclusions and caveats on capitalism

I h a v e n o w p r e s e n t e d t h e i n i t i a l s e t o f c o n c e p t s t o b e u s e d i n t h e fol-
l o w i n g a n a l y s i s o f c a p i t a l a c c u m u l a t i o n a n d its i m p l i c a t i o n s f o r t h e f u t u r e
o f t h e c a p i t a l i s t s t a t e . D i f f e r e n t sets o f c o n c e p t s w o u l d b e a p p r o p r i a t e i f
my m a i n interest w e r e in o t h e r aspects of capitalism and/or social
Table 1.2 Bases of capitalist societalization and resistance thereto

Base of bourgeois Mode of resistance Typical actors

societalization mobilized
for or against this
basis

Development of the Class s t r u g g l e s i n (a) Individuals a n d /

market their p r o p e r sense or collectivities
- including struggles w i t h class
'Fictitious'
against the extra- identities
commodification
economic conditions (b) O t h e r s o c i a l
and imposition of
for t h e d o m i n a n c e forces whose
the value form in
of value forms struggles are
economic relations
relevant to
consolidation of
this basis

I m p o s i t i o n of S t r u g g l e s for t h e Various social

' e c o n o m i z i n g ' logic primacy of other categories
in n o n - e c o n o m i c m o d e s of calculation identified with
areas and/or supportive
of o t h e r values
and modes of
calculation

Ecological d o m i n a n c e Struggles to privilege Advocates of other

of c a p i t a l i s t the operational logics (e.g., legality,
economy logic of s o m e o t h e r military security,
system or systems health, religion)

Economic hegemony Struggles to Forces based in

of a g i v e n consolidate a counter-
accumulation hegemonic project
strategy that prioritizes
values other than the
logic o f p e r m a n e n t
capitalist e x p a n s i o n
'lifeworld' allied
w i t h social
categories from
non-economic
systems and with
s u b o r d i n a t e social
classes
Such struggles m a y
b e c o m e t h e basis
for a n e w
hegemonic bloc,
i.e., a d u r a b l e
alliance b a s e d on
alternative
hegemonic project
34 Capitalism and the Capitalist Type of State

f o r m a t i o n s . A s m y a p p r o a c h t o t h e s e issues i s r o o t e d i n M a r x i s t t h e o r y
but departs from m a n y orthodox interpretations, it is worth hsting some
of t h e conceptual innovations that distinguish the p r o p o s e d form-
analytic and strategic-relational reading of Marxism from s o m e of the
m o r e o r t h o d o x i n t e r p r e t a t i o n s t h a t h a v e b e e n d e v e l o p e d d u r i n g its l o n g
and troubled history. M a n y of these innovations h a v e either b e e n a d u m -
b r a t e d o r m o r e fully d e v e l o p e d e l s e w h e r e : for e x a m p l e , i n t h e r e g u l a t i o n
a p p r o a c h , r e c e n t M a r x i s t s t a t e t h e o r y a n d c r i t i c a l d i s c o u r s e Walysis. M y
other source of inspiration is t h e theory of self-organizing systems, their
s t r u c t u r a l c o u p l i n g a n d c o - e v o l u t i o n . T a b l e 1.3 p r e s e n t s s o m e o f t h e m a i n
i n n o v a t i o n s ( i n c l u d i n g s o m e t o b e i n t r o d u c e d l a t e r i n t h i s c h a p t e r ) for
t h e r e s e a r c h p r o g r a m m e e n a b l e d by this a p p r o a c h b u t t h e initial test of
their heuristic a n d e x p l a n a t o r y p o w e r m u s t await m o r e detailed analy-
ses i n o t h e r c h a p t e r s .
Five caveats are also n e e d e d b e f o r e we consider the f o r m a n d func-
tions of the capitalist type of state. First, while m a n y institutions are
r e l a t e d to f u n d a m e n t a l categories of t h e capital relation (such as t h e
commodity, labour-power, m o n e y , capital or price), t h e different forms
they adopt are irreducible to these basic categories. Institutions m a t t e r . "
T h e extensive b o d y of w o r k on successive stages of capitalist develop-
m e n t a n d / o r varieties of c a p i t a l i s m illustrates this well. S u c h w o r k e x a m -
ines h o w d i f f e r e n t c o n f i g u r a t i o n s o f s t r u c t u r a l f o r m s c a n b e s t a b i l i z e d
a n d will l e a d t o d i f f e r e n t w e i g h t s b e i n g a t t a c h e d t o d i f f e r e n t c o n t r a d i c -
tions and dilemmas a n d to their different aspects, to different p a t t e r n s
of conilict and c o m p r o m i s e , a n d to different p r o s p e c t s of displacing
and/or deferring p r o b l e m s and crisis-tendencies. Such w o r k c a n be t a k e n
y e t f u r t h e r b y c o n s i d e r i n g t h e c o m p l e m e n t a r i t i e s a n d conflicts o v e r dif-
ferent t i m e horizons a n d on different scales n o t only within b u t also
across different varieties of capitalism. Second, particular structural a n d
institutional forms are always constituted in and through action, always
tendential a n d always in need of stabilization. In particular, any t e n d e n -
cies h n k e d w i t h p a r t i c u l a r a c c u m u l a t i o n r e g i m e s o r m o d e s o f r e g u l a t i o n ,
l e t a l o n e w i t h c a p i t a l i s m itself, a r e t h e m s e l v e s a l w a y s t e n d e n t i a l . T h i s
doubly tendential nature of tendencies m e a n s that the very presence of
the tendencies linked with a given accumulation regime or m o d e of
r e g u l a t i o n ( w h e t h e r o r n o t s u c h t e n d e n c i e s a r e a l s o a c t u a l i z e d i n specific
c i r c u m s t a n c e s ) d e p e n d s o n t h e e x t e n t t o w h i c h t h e social f o r m s t h a t g e n -
erate t h e m are themselves reproduced. This implies that the incomplete
r e a l i z a t i o n a n d / o r s u b s e q u e n t d e c o m p o s i t i o n o f a g i v e n s o c i a l f o r m wifl
a t t e n u a t e w h a t w o u l d o t h e r w i s e b e r e g a r d e d a s its o t h e r w i s e n a t u r a U y
necessary tendencies. Third, structural forms and institutions never
w h o l l y c o n s t r a i n actions. F o r o u r p u r p o s e s this m e a n s t h a t struggles will
tend to overflow structural forms that w e r e instituted to contain t h e m or
 Table 1 -3 Some new concepts in the strategic-relational a p p r o a c h
Some orthodox Marxist arguments
g c o n o m i c d e t e r m i n a t i o n i n t h e last
jnstance of o v e r a l l social f o r m a t i o n
and its d e v e l o p m e n t . This occurs
through t h e d e v e l o p m e n t of
productive forces a n d / o r t h e
development of t h e social r e l a t i o n s
of p r o d u c t i o n
Relative a u t o n o m y of t h e capitalist
state as an 'ideal collective capitalist'
with n o m o r e n o r less a u t o n o m y t h a n
is required to s e c u r e t h e c o m p l e x
economic, political a n d ideological
conditions for a c c u m u l a t i o n
Either
Unilateral d e t e r m i n i n g r o l e of t h e
economic b a s e i n r e l a t i o n t o t h e
juridico-political s u p e r s t r u c t u r e and
major forms of social c o n s c i o u s n e s s
Or
Mutual functional linkages b e t w e e n
economic base, juridico-political
superstructure and ideologies serve
to r e p r o d u c e t h e capitalist e c o n o m y
Civil society is a distinct s p h e r e b e y o n d
the state a n d t h e m a r k e t w h e r e
individuals p u r s u e t h e i r o w n egoistic
self-interests
Class struggle d e v e l o p s to t h e e x t e n t
that objectively p r e - g i v e n classes
(defined by t h e i r p l a c e in t h e r e l a t i o n s
of p r o d u c t i o n ) b e c o m e m o r e active,
class-conscious 'classes-for-themselves'
and also d e v e l o p t h e a p p r o p r i a t e f o r m s
of economic a n d political o r g a n i z a t i o n
to s e r v e their interests
U i e latter a r e also objectively p r e - g i v e n
by classes' r e s p e c t i v e places in
production, t h e w i d e r social f o r m a t i o n
and the general logic of c a p i t a h s t
development
The strategic-relational alternatives
(a) N e c e s s a r y t e n d e n t i a l p r i m a c y o f
p r o d u c t i v e capital w i t h i n circuit
of capital
(b) C o n t i n g e n t ecological d o m i n a n c e
of c a p i t a l a c c u m u l a t i o n in w i d e r
society
(a) O p e r a t i o n a l l y a u t o n o m o u s ,
institutionally s e p a r a t e political
s y s t e m such t h a t
(b) this s e p a r a t i o n p r o b l e m a t i z e s
state's p e r f o r m a n c e for a n d o n
behalf of c a p i t a l
(a) M u t u a l s t r u c t u r a l c o u p l i n g o f
operationally a u t o n o m o u s systems
u n d e r 'ecological d o m i n a n c e ' of
accumulation (strongest when the
w o r l d m a r k e t is fully d e v e l o p e d )
(b) ' S p a t i o - t e m p o r a l fix' may h e l p to
displace o r defer c o n t r a d i c t i o n s ,
d i l e m m a s , etc.; b u t this is always
limited, p r o v i s i o n a l , a n d m a y n o t
c o i n c i d e with s t a t e b o u n d a r i e s
(c) An ' h i s t o r i c bloc' may e m e r g e
f r o m structural c o u p l i n g a n d co-
e v o l u t i o n of different i n s t i t u t i o n a l
o r d e r s in a social f o r m a t i o n
' L i f e w o r l d ' is a r e a l m of identities,
values, m o d e s of calculation a n d social
r e l a t i o n s n o t a n c h o r e d i n specific
s y s t e m s or t h e i r logics
(a) D i s t i n g u i s h 'class i d e n t i t i e s ' from
t h e 'class r e l e v a n c e ' of social
f o r c e s a n d struggles
(b) D i s c o u r s e has a k e y r o l e in
defining all i d e n t i t i e s ('class' a n d
non-class alike)
(c) O b j e c t i v e interests l i n k e d to any
given subjective identity are
r e l a t i v e and can only be c a l c u l a t e d
for specific fields of struggle a n d
c o n j u n c t u r e s r a t h e r t h a n on a
p e r m a n e n t and comprehensive
basis
 36 Capitalism a n d the Capitalist Type of State

have resulted from institutionalized compromises. This is o n e of t h e key

themes of the strategic-relational approach and highhghts the contin-
g e n c y a n d r e l a t i v i t y o f s t r u c t u r a l c o n s t r a i n t s ( J e s s o p 1982, 1 9 8 5 , 1 9 9 0 b ,
2001a,c; a n d pp. 4 0 - 1 below). F o u r t h , strategies c a n n o t be explained
purely as products of contradictions even though contradictions and
t h e i r a s s o c i a t e d d i l e m m a s d o o p e n a s p a c e for s t r a t e g i c c h o i c e . F o r
strategies are always elaborated in and t h r o u g h discourses; a n d their
i m p l e m e n t a t i o n d e p e n d s o n o r g a n i z a t i o n a l a n d l e a r n i n g ca^i^acities. Fifth,
and finally, strategies are i m p l e m e n t e d on a strategically selective terrain
which m a k e s some strategies m o r e viable t h a n others. This terrain is n o t
p u r e l y e c o n o m i c , h o w e v e r b r o a d l y t h e e c o n o m y m a y b e defined. I t i s
always the product of the interaction of economic and extra-economic
systems a n d social relations.

3. Capital, the State, and Policy Reginnes

This s e c t i o n presents s o m e basic categories for analysing t h e capitalist

t y p e o f s t a t e a n d r e l a t e s t h e s e t o e c o n o m i c a n d s o c i a l p o l i c y r e g i m e s . Its
historical p r e m i s e a n d conceptual starting point is the institutional
s e p a r a t i o n of the e c o n o m i c a n d extra-economic in capitalism. This
separation is rooted in the generalization of the commodity form to
labour-power so that coercion can be excluded from the operation of
l a b o u r m a r k e t s , a n d is also r e q u i r e d to m a n a g e t h e u n s t a b l e b a l a n c e
b e t w e e n the inherent capitalist drive to ever greater commodification
a n d its d e p e n d e n c e o n n o n - c o m m o d i t y f o r m s o f s o c i a l r e l a t i o n s . T h i s
s e p a r a t i o n d o e s n o t i n v o l v e a single, fixed a n d i m m u t a b l e b o u n d a r y ;
instead, it involves plural, contested a n d m u t a b l e boundaries. N o r are
these boundaries identical to t h e (always complex) institutional separa-
tion b e t w e e n e c o n o m y and state; instead, they involve a wide range of
often h e t e r o g e n e o u s , if not irreconcilable, distinctions b e t w e e n the eco-
n o m i c a n d t h e e x t r a - e c o n o m i c . T h e s e t y p i c a l l y u n d e r g o m a j o r shifts
w h e n accumulation regimes and m o d e s of regulation change. For
example, as later chapters argue, the changing forms of competitiveness
associated with globahzing, k n o w l e d g e - b a s e d e c o n o m i e s lead to a major
rearticulation of the e c o n o m i c a n d extra-economic. M o r e generally, this
is l i n k e d to changing f o r m s of state i n t e r v e n t i o n t h a t affect t h e defini-
tion, regulation and o p e r a t i o n of m a r k e t forces narrowly conceived as
well as to t h e b r o a d e r restructuring, rescaling a n d r e t e m p o r a l i z i n g of
m a r k e t - s t a t e - c i v i l society relations. This c o n c e p t u a l triplet has t h e m e r i t
of indicating that the 'extra-economic' includes not only the state or
j u r i d i c o - p o l i t i c a l s y s t e m b u t a l s o t h e family, h o u s e h o l d a n d f o r m s o f civic
association. This is helpful w h e n showing h o w neoliberal 'rollback' of the
 Capitalism a n d the Capitalist Type of State 37

state tends to displace t h e b u r d e n s of adjustment to m a r k e t failure o n t o

t h e family (for w h i c h , r e a d , i n m o s t c a s e s , w o m e n ) o r t h e i n s t i t u t i o n s , n e t -
w o r k s a n d s o l i d a r i t i e s o f civil society. B u t t h e s e t h r e e t e r m s a r e r e a l l y
only c o n v e n i e n t s h o r t h a n d for a m u c h m o r e c o m p l e x a n d v a r i a b l e s e t o f
social r e l a t i o n s .

The capitalist type of state

T h e m o d e r n s t a t e i s o f t e n c h a r a c t e r i z e d i n t e r m s o f its c l a i m t o a l e g i t i -
m a t e (or constitutionalized) m o n o p o l y of organized coercion in a given
t e r r i t o r i a l a r e a , its o t h e r d i s t i n c t i v e s t a t e c a p a c i t i e s ( f o r e x a m p l e , t h e
abiUty t o r a i s e t a x e s o r t h e r i g h t t o m a k e d e c i s i o n s t h a t a r e c o l l e c t i v e l y
b i n d i n g o n i n d i v i d u a l s a n d c o l l e c t i v i t i e s p r e s e n t i n its s o v e r e i g n t e r r i -
t o r y ) , o r its d i s t i n c t i v e p o l i t i c a l logic, r a t i o n a l i t y o r g o v e r n m e n t a l i t y (for
e x a m p l e , its m a i n t e n a n c e o f t e r r i t o r i a l i n t e g r i t y , its f o r m a l r e s p o n s i b i l i t y
for p r o m o t i n g a socially c o n s t r u c t e d 'public i n t e r e s t ' in t h e face of p r i v a t e
e g o i s m , its k e y r o l e i n m a i n t a i n i n g social c o h e s i o n ) . H o w e v e r , w h i l e
these a r g u m e n t s m a y h e l p to establish t h e distinctiveness of the state a n d
pohtics, they m u s t be c o m p l e m e n t e d by an u n d e r s t a n d i n g of the histori-
cal p r e c o n d i t i o n s o f t h e m o d e r n s t a t e a n d t h e c o m p l e x i t i e s o f its s u b s e -
quent articulation and interpenetration with other institutional orders
a n d civil society. O t h e r w i s e t h e y r i s k f e t i s h i z i n g a n d n a t u r a l i z i n g t h e
institutional separation b e t w e e n e c o n o m i c and political, t h e juridical dis-
tinction b e t w e e n p u b l i c a n d private, t h e functional division b e t w e e n
d o m e s t i c a n d f o r e i g n policy, e t c . T h i s risk i s m o s t m a r k e d i n t h e s t a t e -
c e n t r e d a p p r o a c h t h a t s o u g h t to 'bring t h e state b a c k in' as a k e y i n d e -
p e n d e n t v a r i a b l e i n s o c i a l s c i e n t i f i c a n a l y s i s (classically, E v a n s e t a l ,
1985). I n c o n t r a s t , a l o n g w i t h m a n y o t h e r c r i t i c a l s t a t e t h e o r i s t s , I v i e w
such b o u n d a r i e s as discursively constituted, institutionally materialized,
structurally coupled to o t h e r institutional boundaries, essentially
c o n t e s t e d a n d liable to c h a n g e (on t h e critical role of t h e i m a g i n a r y
s t a t e - s o c i e t y b o u n d a r y , see e s p e c i a l l y M i t c h e l l 1 9 9 1 ) .

It is i m p o r t a n t nonetheless to recognize that t h e capitalist type of state

has features that distinguish it b o t h from states in precapitalist or non-
capitalist f o r m a t i o n s a n d f r o m atypical f o r m s of political r e g i m e (for
example, p r e d a t o r y military dictatorships) in societies w h e r e capitalism
in s o m e form'^ is n o n e t h e l e s s a significant f e a t u r e of e c o n o m i c o r g a n i -
zation. F o r t h e capitalist type of state has a distinctive, f o r m - d e t e r m i n e d
strategic selectivity w i t h m a j o r implications for t h e o r g a n i z a t i o n a n d
e f f e c t i v e n e s s o f s t a t e i n t e r v e n t i o n (see e s p e c i a l l y G r a m s c i 1 9 7 1 ; K r a t k e
1984; O ' C o n n o r 1 9 7 3 ; O f f e 1972; P a s h u k a n i s 1978; P o u l a n t z a s 1 9 7 3 , 1 9 7 8 ;
Tlieret 1992). I p r e s e n t s o m e of t h e s e basic form-analytic features in
t a b l e 1.4, b u t t a k e t h e m f o r g r a n t e d h e r e a f t e r i n o r d e r t o h i g h l i g h t m o r e
Table 1.4 Some key features of tfie capitalist type of state
Articulation of Implications for the
economy and state economy and class
in capitalism relations
Institutional E c o n o m y is organized
separation between under dominance of
market economy, capitalist law of value
sovereign state and a as mediated through
p u b l i c s p h e r e (civil competition between
society) located capitals a n d e c o n o m i c
beyond market and class s t r u g g l e
state
Constitutionalized claim Coercion is excluded
to a m o n o p o l y of from immediate
organized coercion organization of labour
within the territory process. T h u s value
m a p p e d by the state. form and market
R o l e of l e g a l i t y in forces, n o t d i r e c t
legitimation of the coercion, shape
s t a t e a n d its a c t i v i t i e s capital accumulation.
Nonetheless coercion
h a s a k e y r o l e in
securing external
conditions of existence
of the operation of the
capitalist e c o n o m y
S t a t e is a t a x s t a t e . Taxes deducted from
Income derives private revenues may
largely from taxes on be used to produce
economic property, 'public goods'. Thus a
actors a n d activities possible tension
and from loans raised between exchange-
from market actors and use-value aspects
T a x capacity depends of tax state activities
on legal a u t h o r i t y If state-owned a n d
-t- c o e r c i o n operated production
Ideal bourgeois tax is p r o f i t a b l e , t h i s
f o r m is a c o n t i n u i n g reduces state's
and general dependence on
contribution to private economic
forces a n d / o r
government revenue
that can be applied weakens institutional
separation. Unprofitable
freely by state to
legitimate tasks - not activities m a y socialize
a d h o c , specifically losses, r e d i s t r i b u t e
l e v i e d f o r specific losses or d e s t r o y w e a l t h
tasks and value
Implications for the
state and politics
Raison d'etat ( a u t o n o m o u s
political rationality)
distinct from profit-and-
loss l o g i c l O f m a r k e t a n d
f r o m relifflous, m o r a l , o r
ethical pnhciples
Specialized military-pohce
organs are subject to
constitutional control.
Force has ideological as
well as repressive
functions
Subject to law, state may
intervene to compensate
for m a r k e t f a i l u r e i n
'national' or 'public'
interest
S u b j e c t s of t h e s t a t e in its
territory have a general
duty to pay taxes,
regardless of whether or
not they approve of
specific s t a t e a c t i v i t i e s
National m o n e y issued by
t h e s t a t e i s also t h e
m e a n s of p a y m e n t for
taxes
Taxation capacity acts as
security for sovereign
debt
T a x e s a n d t h e i r application
a r e o n e o f t h e e a r l i e s t foci
o f class a n d p o l i t i c a l
struggles
jable 1-^ Continued
Specialized
a d m i n i s t r a t i v e staff
with o w n c h a n n e l s of
recruitment, training,
and esprit de corps.
I h i s staff is s u b j e c t to
the a u t h o r i t y o f t h e
political e x e c u t i v e . It
forms a s o c i a l c a t e g o r y
(not a class) t h a t is
internally d i v i d e d b y
market and status
position
R e c h t s t a a t : s t a t e is
based o n t h e r u l e o f
law, n o t of m e n . A
division b e t w e e n
private, a d m i n i s t r a t i v e
and p u b l i c law.
International law
governs r e l a t i o n s
between states. No
formal m o n o p o l y o f
joUtical p o w e r i n
lands o f d o m i n a n t
economic class(es)
but f o r m a l ' e q u a l i t y
before t h e l a w ' o f all
citizens
Formally sovereign state
with d i s t i n c t a n d
exclusive t e r r i t o r i a l
d o m a i n in w h i c h it is
free t o act w i t h o u t
direct, a u t h o r i t a t i v e
interference from
other states or actors
Substantively, s t a t e s a r e
constrained in exercise
of s o v e r e i g n t y by
balance of
international forces as
well as by d o m e s t i c
balance
S t a t e o c c u p i e s specific
place in general
division b e t w e e n
manual and mental
l a b o u r . Officials a n d
p o l i t i c a l class t e n d t o
speciaUze in m e n t a l
l a b o u r w i t h close
relationship between
their specialized
knowledge and their
power. Knowledge
b e c o m e s major basis
of state's capacities
E c o n o m i c subjects are
formally free a n d
equal owners of
commodities, including
labour-power
Private law develops on
t h e basis o f p r o p e r t y
rights and contract
law
S t a t e h a s a k e y r o l e in
securing external
conditions for
economic exchange
Conflict b e t w e e n
economy as abstract
and apohtical 'space
of flows' in the world
market and as the
s u m of localized
activities, w i t h a n
inevitably politically
overdetermined
character
Particular capitals m a y
try to escape state
control or seek
support in world
competition from
their respective states
Official d i s c o u r s e h a s a k e y
role in the exercise of
state power. P u b h c and
private intellectuals
formulate state and
hegemonic projects that
define t h e n a t i o n a l a n d / o r
'national-popular' interest.
S t a t e d e r i v e s its l e g i t i m a c y
by reflecting n a t i o n a l
and/or 'national-popular'
interest
F o r m a l subjects of state
are individuals with
citizenship rights, n o t
feudal estates or collective
e c o n o m i c classes. S t r u g g l e s
to extend these rights play
a key role in t h e expansion
of state activities
Public law organized
around the individual-
state, public-private,
and the national-
international
distinctions
Ideally, states a r e
recognized by other
states as sovereign in
their own territories b u t
they may need to defend
this t e r r i t o r i a l integrity
by force
Political and military
rivalry depends in part
on strength of national
economy. Need to
balance pursuit of geo-
economic and geo-
political goals a n d
social c o h e s i o n
 40 Capitalism and the Capitalist Type of State

specific i n s t i t u t i o n a l f e a t u r e s o f t h i s t y p e o f s t a t e a s i t w a s i n s t a n t i a t e d
in t h e circuits of A t l a n t i c Fordism. It is p e r h a p s w o r t h noting n o n e t h e -
less t h a t t h e g e n e r i c f e a t u r e s l i s t e d i n t h e t a b l e d o n o t i n c l u d e d e m o c r a -
tic institutions, e v e n t h o u g h the c u r r e n t ' n o r m a l ' f o r m of t h e capitalist
type of state involves representative democracy based on universal adult
s u f f r a g e for t h e c i t i z e n s o f a g i v e n t e r r i t o r i a l s t a t e a n d a n e x e c u t i v e
a u t h o r i t y a n d / o r legislative p o w e r formally a c c o u n t a b l e to it^ citizens.
This f e a t u r e is n o t coeval with t h e capitalist t y p e of state. It h a s devel-
oped more recently and rather unevenly in the twentieth century in the
a d v a n c e d c a p i t a l i s t s o c i e t i e s a n d w a s still a b s e n t i n t h e t h r e e p e r i p h e r a l
Fordist capitahst economies of S o u t h e r n E u r o p e until the mid-1970s.
R e p r e s e n t a t i v e democracy nonetheless has i m p o r t a n t implications for
t h e f o r m s o f p o l i t i c a l s t r u g g l e , e s p e c i a l l y for t h e i n c r e a s e d i n f l u e n c e o f
m a s s p o l i t i c s w i t h i n a n d a t a d i s t a n c e f r o m t h e s t a t e a n d for s i g n i f i c a n c e
of the o r i e n t a t i o n to t h e ' n a t i o n a l - p o p u l a r ' interest in a t t e m p t s to define
state a n d h e g e m o n i c projects (see G r a m s c i 1971; Jessop 1982, 1990b;
Poulantzas 1973,1978).
T h e general form-analytic, strategic-relational approach a d o p t e d
b e l o w treats the state as a social r e l a t i o n (Poulantzas 1978). This implies
t h a t t h e e x e r c i s e o f s t a t e p o w e r (or, b e t t e r , s t a t e p o w e r s i n t h e p l u r a l )
involves a f o r m - d e t e r m i n e d c o n d e n s a t i o n of the c h a n g i n g b a l a n c e of
f o r c e s . I n o t h e r w o r d s , s t a t e p o w e r reflects t h e p r e v a i l i n g b a l a n c e o f
forces as this is institutionally m e d i a t e d t h r o u g h t h e state a p p a r a t u s
w i t h its s t r u c t u r a l l y i n s c r i b e d s t r a t e g i c selectivity. A d o p t i n g t h i s
a p p r o a c h , t h e state can be defined as a relatively unified e n s e m b l e of
s o c i a l l y e m b e d d e d , socially r e g u l a r i z e d , a n d s t r a t e g i c a l l y s e l e c t i v e insti-
t u t i o n s , o r g a n i z a t i o n s , social f o r c e s a n d a c t i v i t i e s o r g a n i z e d a r o u n d ( o r
a t least i n v o l v e d i n ) m a k i n g c o l l e c t i v e l y b i n d i n g d e c i s i o n s f o r a n i m a g -
i n e d p o l i t i c a l c o m m u n i t y . B y s t r a t e g i c selectivity, I u n d e r s t a n d t h e w a y s
i n w h i c h t h e s t a t e c o n s i d e r e d a s a s o c i a l e n s e m b l e h a s a specific, differ-
ential i m p a c t on t h e ability of v a r i o u s political forces to p u r s u e particu-
l a r i n t e r e s t s a n d s t r a t e g i e s i n specific s p a t i o - t e m p o r a l c o n t e x t s t h r o u g h
their access to and/or control over given state capacities - capacities that
a l w a y s d e p e n d for t h e i r e f f e c t i v e n e s s o n l i n k s t o f o r c e s a n d p o w e r s t h a t
exist a n d o p e r a t e b e y o n d t h e state's f o r m a l boundaries.^' I t follows
t h a t t o t a l k o f s t a t e m a n a g e r s , l e t a l o n e o f t h e s t a t e itself, e x e r c i s i n g
p o w e r is at best to p e r p e t r a t e a c o n v e n i e n t fiction t h a t m a s k s a far m o r e
c o m p l e x s e t o f s o c i a l r e l a t i o n s t h a t e x t e n d far b e y o n d t h e s t a t e a p p a r a -
t u s a n d its d i s t i n c t i v e c a p a c i t i e s . I n t e r e s t i n g l y , t h i s i s r e f l e c t e d i n t h e
practices a n d discourses of state m a n a g e r s themselves. For, whilst they
s o m e t i m e s p r o u d l y claim t h e credit for h a v i n g initiated a n d carried
t h r o u g h a g e n e r a l s t r a t e g i c l i n e o r a specific policy, a t o t h e r t i m e s t h e y
h a p p i l y s e e k t o offload r e s p o n s i b i l i t y f o r s t a t e a c t i o n s a n d / o r o u t c o m e s
 Capitalism a n d the Capitalist Type of State 41

t o o t h e r s o c i a l f o r c e s ( o r t o force majeure) a t o n e o r m o r e p o i n t s e l s e -
where in t h e ongoing struggle o v e r power. While t h e constitutionaliza-
tion and centralization of state p o w e r enable responsibility to be
f o r m a l l y a t t r i b u t e d t o n a m e d officials a n d b o d i e s , t h i s s h o u l d n o t l e a d u s
t o f e t i s h i z e t h e f i x i n g o f f o r m a l p o l i t i c a l r e s p o n s i b i l i t y a t specific p o i n t s
a n d / o r i n specific p e r s o n a g e s . W e s h o u l d a l w a y s s e e k t o t r a c e t h e c i r c u -
l a t i o n o f p o w e r t h r o u g h w i d e r a n d m o r e c o m p l e x sets o f social r e l a t i o n s
both within and b e y o n d t h e state. This is especially i m p o r t a n t w h e r e t h e
growing complexity and mass mediatization of the exercise of state
p o w e r lead to a search for c h a r i s m a t i c figures w h o can simplify political
realities a n d p r o m i s e to resolve t h e m . For, as G r a n d e (2000) shows,
charisma actually serves to hide complex, if not chaotic, behind-the-
scenes practices which would be hard to explain or defend in public.
This a p p r o a c h is inconsistent with any attempt to treat the state as a
s i m p l e i n s t r u m e n t o r f u n c t i o n a l m e c h a n i s m for r e p r o d u c i n g c a p i t a l i s t
relations of p r o d u c t i o n . I n d e e d , it suggests that t h e typical f o r m of t h e
c a p i t a l i s t s t a t e a c t u a l l y p r o b l e m a t i z e s its o v e r a l l f u n c t i o n a l i t y f o r c a p i t a l
a c c u m u l a t i o n a n d p o l i t i c a l class d o m i n a t i o n . F o r t h e i n s t i t u t i o n a l s e p a -
ration of t h e state from the m a r k e t economy, a separation which is a n e c -
essary a n d defining f e a t u r e of capitalist societies, results in t h e d o m i n a n c e
o f d i f f e r e n t ( a n d p o t e n t i a l l y c o n t r a d i c t o r y ) i n s t i t u t i o n a l logics a n d m o d e s
of calculation in t h e state a n d t h e e c o n o m y (for e x a m p l e , H i r s c h 1976;
O f f e 1984; P o u l a n t z a s 1 9 7 8 ; R e u t e n a n d W i l l i a m s 1 9 8 9 ; W o o d 1 9 8 1 ) . T h u s
t h e r e i s n o g u a r a n t e e t h a t p o l i t i c a l o u t c o m e s will s e r v e t h e n e e d s o f
capital - e v e n assuming t h a t t h e s e c o u l d be objectively identified in
a d v a n c e i n sufficient d e t a i l t o p r o v i d e t h e b a s i s f o r a c a p i t a l i s t i c a l l y r a t i o -
nal plan of state action and inaction. T h e operational a u t o n o m y of the
state is a further massive complicating factor in this regard. Indeed, to
the extent that it enables the state to pursue the interests of capital in
general at t h e e x p e n s e of p a r t i c u l a r capitals, it also e n a b l e s it to d a m a g e
the interests of capital in general. Accordingly, o n e m u s t p a y careful
a t t e n t i o n t o t h e s t r u c t u r a l l y i n s c r i b e d s t r a t e g i c s e l e c t i v i t y o f t h e specific
state forms and political regimes; and m o v e away from abstract, often
essentialist t h e o r i z a t i o n t o w a r d s m o r e detailed accounts of t h e c o m p l e x
interplay of social struggles a n d institutions. A k e y e l e m e n t in such inves-
tigations is a concern with the changing state and/or h e g e m o n i c projects
that define t h e n a t u r e a n d p u r p o s e s of state actions ( a n d inaction) in
p a r t i c u l a r p e r i o d s , s t a g e s a n d p h a s e s o f social d e v e l o p m e n t a n d / o r i n
different varieties of capitalism with their distinctive institutional
configurations. It also requires attention to statecraft (the art of govern-
m e n t ) as a r e p e r t o i r e of skilled, discursive practices t h a t reflexively
m o n i t o r e v e n t s a n d activities b e y o n d as well as w i t h i n t h e state a n d
thereby inform state projects and attempts to exercise state power.
42 Capitalism and the Capitalist Type cf State

I n tliis r e g a r d , t h e s t a t e c a n b e s t u d i e d i n t e r m s o f six i n t e r r e l a t e d
dimensions. T h r e e primarily concern formal institutional aspects of the
s t a t e r e g a r d e d as a social relation: (1) m o d e s of p o h t i c a l r e p r e s e n t a t i o n
a n d t h e i r a r t i c u l a t i o n ; (2) t h e i n t e r n a l a r t i c u l a t i o n o f t h e s t a t e a p p a r a t u s ;
a n d (3) m o d e s o f i n t e r v e n t i o n a n d t h e i r a r t i c u l a t i o n . E a c h o f t h e s e h a s
its o w n s t r u c t u r a l l y i n s c r i b e d s t r a t e g i c selectivities a n d , w h i l e analytically
distinct, t h e y typically o v e r l a p empirically. C o r p o r a t i s m , to\ give a c l e a r
example of such overlap, involves representation, decision-making and
i n t e r v e n t i o n o n t h e basis o f f u n c t i o n i n t h e division o f l a b o u r . T h e s e
a s p e c t s c a n b e s t u d i e d a t different l e v e l s o f a b s t r a c t i o n a n d c o m p l e x i t y ,
r a n g i n g from t h e m o s t b a s i c s t a t e f o r m s t h r o u g h t o q u i t e c o n c r e t e -
c o m p l e x d e s c r i p t i o n s o f specific r e g i m e s . T h e o t h e r t h r e e d i m e n s i o n s
mainly concern substantive and strategic aspects of the state r e g a r d e d as
a social r e l a t i o n : (4) t h e p o l i t i c a l p r o j e c t s a r t i c u l a t e d by d i f f e r e n t social
forces that are represented within the state system, seek such represen-
t a t i o n , o r c o n t e s t its c u r r e n t f o r m s , f u n c t i o n s a n d activities; (5) t h e p r e -
v a i l i n g s t a t e p r o j e c t w i t h its raison d'etat - or g o v e r n m e n t a l r a t i o n a h t y
- a n d statecraft that seeks to impose an always relative unity on the
v a r i o u s activities o f d i f f e r e n t b r a n c h e s , d e p a r t m e n t s a n d scales o f t h e
s t a t e s y s t e m a n d t h a t also defines t h e b o u n d a r i e s b e t w e e n t h e s t a t e a n d
its e n v i r o n m e n t a s a p r e c o n d i t i o n o f t h e o n g o i n g a t t e m p t s t o b u i l d s u c h
a n i m p r o b a b l e i n t e r n a l u n i t y ; a n d (6) t h e h e g e m o n i c p r o j e c t s t h a t s e e k
to reconcile the particular and the universal by linking t h e n a t u r e and
p u r p o s e s of t h e s t a t e i n t o a b r o a d e r - b u t a l w a y s s e l e c t i v e - p o l i t i c a l ,
i n t e l l e c t u a l a n d m o r a l vision o f t h e p u b l i c i n t e r e s t , t h e g o o d society, t h e
c o m m o n w e a l , or s o m e analogous principle of societalization. These pro-
j e c t s give c o n t e n t t o t h e m o r e f o r m a l f e a t u r e s o f t h e s t a t e a n d i t i s t h e
c o n t e s t a m o n g social f o r c e s o v e r c o m p e t i n g p r o j e c t s t h a t m e d i a t e s t r u c -
tural a n d strategic changes in the state in given conjunctures.

Capital and the state

E v e n a p u r e capitalist e c o n o m y , n o t w i t h s t a n d i n g t h e c l a i m s o f s o m e clas-
sical e c o n o m i s t s a n d n e o l i b e r a l i d e o l o g u e s , w o u l d b e p r o n e t o m a r k e t
failure. I n d i v i d u a l c a p i t a l s c o m p e t e for profit, a c t s e l f - i n t e r e s t e d l y a n d
t r y t o a v o i d limits o n t h e i r f r e e d o m o f a c t i o n . C o m p e t i t i o n d i s c o u r a g e s
i n d i v i d u a l c a p i t a l s f r o m u n d e r t a k i n g activities n e c e s s a r y for e c o n o m i c
a n d social r e p r o d u c t i o n t h a t a r e u n p r o f i t a b l e f r o m t h e i r i n d i v i d u a l v i e w -
p o i n t a n d i t m a y also l e a d t h e m i n t o activities t h a t u n d e r m i n e t h e g e n e r a l
c o n d i t i o n s for e c o n o m i c a n d social r e p r o d u c t i o n . R e g a r d i n g e c o n o m i c
r e p r o d u c t i o n , for e x a m p l e , t h e r e i s n o g u a r a n t e e t h a t t h e g e n e r a l e x t e r -
n a l c o n d i t i o n s for p r o d u c t i o n ( s u c h a s law, p r o p e r t y a n d m o n e y ) will b e
secured t h r o u g h m a r k e t forces; n o r t h a t certain general e c o n o m i c con-
 Capitalism and the Capitalist Type of State 43

ditions o f p r o d u c t i o n ( ' p u b l i c g o o d s ' ) will b e o f f e r e d a t t h e r i g h t p r i c e

i n t h e r i g h t q u a n t i t i e s . T h i s s u g g e s t s t h e n e e d for e x t r a - e c o n o m i c insti-
t u t i o n s t o c o m p e n s a t e for p a r t i a l o r t o t a l m a r k e t failure i n t h e p r o v i s i o n
o f t h e i m p o r t a n t c o n d i t i o n s for c a p i t a l a c c u m u l a t i o n . T h e s e i n c l u d e a for-
mally r a t i o n a l m o n e t a r y system, a f o r m a l l y r a t i o n a l legal s y s t e m a n d t h e
r e p r o d u c t i o n of l a b o u r - p o w e r as a fictitious c o m m o d i t y B u t , as I h a v e
i n d i c a t e d a b o v e a n d will e l a b o r a t e b e l o w , t h e r e a r e m a n y o t h e r c o n d i -
t i o n s t o o . In this sense, s t a t e i n t e r v e n t i o n is n o t just a s e c o n d a r y activity
a i m e d at m o d i f y i n g t h e effects of a self-sufficient m a r k e t b u t is a b s o l u t e l y
essential to capitalist p r o d u c t i o n a n d m a r k e t relations. For c o m m o d i t i e s
m u s t b e p r o d u c e d b e f o r e t h e y c a n b e d i s t r i b u t e d via t h e m a r k e t a n d / o r
political action. Thus, given the institutional separation b e t w e e n the eco-
nomic and the pohtical, the state must ensure that capital accumulation
o c c u r s b e f o r e i t c a n b e g i n its r e d i s t r i b u t i v e activities (Miiller a n d
Neusiiss 1975: 4 3 - 6 ; O f f e 1972).
There a r e m a n y w a y s in which t h e state c a n a n d does intervene in
these respects. In abstract terms, state s u p p o r t for t h e valorization of
capital a n d social r e p r o d u c t i o n c a n b e p r o v i d e d t h r o u g h f o r c e , l a w a n d
regulation, money, goods a n d services, knowledge, or 'moral suasion' a n d
in t h e form of meta-, macro-, m e s o - or micropolicies. T h e relative weight
a n d a d e q u a c y o f s u c h m e a n s o f i n t e r v e n t i o n , a s w e shall see, v a r y sig-
nificantly o v e r t i m e a n d i n r e l a t i o n t o specific a c c u m u l a t i o n r e g i m e s .
E c o n o m i c a n d social policies c a n b e o r i e n t e d i n t u r n t o s u p p l y - s i d e c o n -
d i t i o n s a n d / o r t h e d e m a n d for (fictitious) c o m m o d i t i e s o r n o n - t r a d e d
g o o d s a n d services. M e t a p o U c i e s a d d r e s s t h e w i d e v a r i e t y o f e x t r a -
e c o n o m i c f a c t o r s t h a t affect t h e s y s t e m i c c o m p e t i t i v e n e s s b a s e d o n
society's o v e r a l l o r g a n i z a t i o n a l p a t t e r n s ( M e s s n e r 1998) a n d t h e i r c h a r -
a c t e r will c h a n g e a l o n g w i t h n o t i o n s o f c o m p e t i t i v e n e s s (see c h a p t e r 3 ) .
Macropolicies focus on the general external conditions of p r o d u c t i o n
( f o r e x a m p l e , f o r m a l l y r a t i o n a l legal a n d m o n e t a r y s y s t e m s ) a n d o n t h e
p r o v i s i o n o f g e n e r a l c o n d i t i o n s o f p r o d u c t i o n (for e x a m p l e , i n f r a s t r u c -
ture a n d the supply of labour-power) within the spatio-temporal hori-
z o n s o f a discursively a n d i n s t i t u t i o n a l l y c o n s t i t u t e d e c o n o m y . I n t h e e r a
o f i m p e r i a l i s m , for e x a m p l e , t h i s w a s a p l u r i n a t i o n a l e c o n o m y o r g a n i z e d
in terms of c e n t r e - p e r i p h e r y relations. In the case of Atlantic Fordism,
the macrolevel was naturalized as the national economy managed by the
Keynesian welfare n a t i o n a l state. M o r e recently, E u r o p e a n E c o n o m i c
Space is being imagined and instituted as the appropriate macroeco-
n o m i c f r a m e w o r k for E u r o p e a n U n i o n ( E U ) i n t e r v e n t i o n . I n all t h r e e
cases, o f c o u r s e , s t a t e s also p u r s u e d policies c o n c e r n e d t o i n s e r t t h e
r e l e v a n t m a c r o l e v e l e c o n o m y i n t o w i d e r sets o f e c o n o m i c r e l a t i o n s u p
t o t h e w o r l d m a r k e t . M e s o p o l i c i e s c o n c e r n specific b r a n c h e s / s e c t o r s
a n d / o r specific s p a c e s / p l a c e s w i t h i n t h i s b r o a d e r e c o n o m i c s y s t e m . A n d ,
44 Capitalism and the Capitalist Type of State

f i n a l l y , m i c r o p o l i c i e s affect ' i n d i v i d u a l ' e c o n o m i c u n i t s (such a s h o u s e -

holds, individual w o r k e r s or individual firms).
T h e s e d i s t i n c t i o n s a r e always r e l a t i v e t o p a r t i c u l a r scales o f analysis.
T h i s c a n b e seen i n t h e p a r t i a l r e s c a l i n g o f t h e m a c r o l e v e l u p t o E u r o p e
for E U m e m b e r states a n d i n t h e c h a n g i n g s c o p e o f t h e m e t a - a n d
mesolevels in the p r e s e n t era of globalization. T h e distinction b e t w e e n
supply- a n d d e m a n d - s i d e policies i s l i k e w i s e relative t o specific m a r k e t s ,
c o m m o d i t y chains, a n d so forth. Moreover, as t h e taken-for-granted
m e a n i n g s of t h e s e d i s t i n c t i o n s b e g a n to d e c o m p o s e as a r e s u l t of t h e
crisis o f t h e p o s t w a r n a t i o n a l m i x e d e c o n o m y , s p a c e h a s o p e n e d for
d e b a t e s o v e r w h a t should r e p l a c e t h e c o n v e n t i o n a l set o f policy goals for
t h e K e y n e s i a n welfare n a t i o n a l s t a t e .
A brief a n d i n c o m p l e t e list of g e n e r a l f u n c t i o n s t h a t s t a t e s m i g h t
p e r f o r m r e g a r d i n g t h e capitalist e c o n o m y i s p r e s e n t e d i n b o x 1.2. T h e s e
g e n e r a l f u n c t i o n s a c q u i r e i n s t i t u t i o n a l l y specific f o r m s in specific stages
a n d v a r i e t i e s o f c a p i t a l i s m a n d a r e a r t i c u l a t e d t o m o r e d i s t i n c t i v e func-
tions r e l a t e d t o t h e s e p a r t i c u l a r s t a g e s a n d v a r i e t i e s a n d their a c c u m u l a -
t i o n r e g i m e s a n d m o d e s o f r e g u l a t i o n . T h e r e c a n b e n o g u a r a n t e e s (let
a l o n e g u a r a n t e e s i n s c r i b e d i n t h e g e n e r a l n a t u r e o f t h e capitalist t y p e o f
s t a t e ) t h a t t h e s e c o m p l e x a n d i n t e r r e l a t e d f u n c t i o n s will b e p e r f o r m e d
adequately from the viewpoint of accumulation. For, as I h a v e argued
above, t h e capital relation is inevitably incomplete and contradictory so
t h a t , e v e n a t a p u r e l y t e c h n o - e c o n o m i c l e v e l , p e r f o r m a n c e o f t h e s e func-
t i o n s i n e v i t a b l y h a s c o n t r a d i c t o r y effects. F u r t h e r , as a g l a n c e at this
i n c o m p l e t e list i n d i c a t e s , state i n t e r v e n t i o n i n t h e s e m a t t e r s i n v o l v e s far
m o r e t h a n n a r r o w t e c h n o - e c o n o m i c issues. I t always affects m o r e t h a n t h e
forces o f p r o d u c t i o n , t h e profitability o f c a p i t a l , o r m o r e g e n e r a l e c o n o m i c
performance. A n d it always occurs in a wider pohtical context concerned
w i t h s t a t e a n d g o v e r n m e n t a l l e g i t i m a c y a s well a s social c o h e s i o n a n d
e x c l u s i o n . T h u s c h o i c e s a m o n g e c o n o m i c a n d social p o l i c i e s a r e typically
l i n k e d t o p r e v a i l i n g a c c u m u l a t i o n s t r a t e g i e s , s t a t e projects, h e g e m o n i c
projects and m o r e general philosophical a n d n o r m a t i v e views of t h e good
society. O n e a r e a w h e r e t h e i n e v i t a b l y p o l i t i c a l c h a r a c t e r o f e c o n o m i c a n d
social i n t e r v e n t i o n i s e s p e c i a l l y c l e a r i s t h e r e p r o d u c t i o n o f l a b o u r - p o w e r
as a fictitious c o m m o d i t y . F o r this is also a s s o c i a t e d in t h e c a p i t a l i s t t y p e
of s t a t e w i t h a c i t i z e n ' s r i g h t to e x i s t e n c e (cf. R e u t e n a n d W i l l i a m s 1989).

Labour-power and social reproduction

I h a v e a l r e a d y r e f e r r e d briefly t o t h e c e n t r a l i t y o f t h e c a p i t a l - l a b o u r r e l a -
tion in the valorization of capital a n d to t h e state's role in securing the
w a g e r e l a t i o n a n d c a p i t a l ' s r i g h t s t o m a n a g e t h e l a b o u r p r o c e s s . I will
 Capitalism and the Capitalist Type of State 45

Box 1.2 Some functions of capifatist type of state

,1. S e c u r i n g t h e g e n e r a l e x t e j m a l c o n d i t i o n s for c a p i t a l a c c u m u l a -
t i o n , s u c h a s a f o r m a l l y r a t i o n a l legal o r d e r a n d p r o t e c t i o n o f
p r o p e r t y rights. ^
2. S e c u r i n g t h e fictitious c o r a m o d i f i c a f i o n o f l a n d , m o n e y , l a b o u r -
p o w e r and k n o w l e d g e and modulating their suhsequcnt dc-
a n d r e c o m m o d i f i c a t i o n i n t h e light o f t h e c h a n g i n g f o r m s o f
a p p e a r a n c e of capital's Structural coiuradiclions a n d strategic
d i l e m m a s a n d o f t h e c h a n g i n g b a l a n c e o f forces c o n t e s t i n g t h e
• e x t e n t a n d c o n s e q t i e n c e s of s u c h fictitious c o n m i o d i f i c a t i o n . In
r e l a t i o n l o l a b o i t r - p o w e r , this' i n v o l v e s m a n a g i n g t h e s u p p l y o f
labour-power, labour markets and the terms of employment
' w i t h i n t h e l a b o u r proce5>'^:
3. S e c u r i n g t h e r i g h t s a n d Capacities o f c a p i t a l t o c o n t r o l l a b o u r -
p o w e r in,the production,process and regulating the t e r m s and
conditions of the capital-labour relation in the labour market
and labour process;
4. Defining the b o u n d a r i e s b e t w e e n the e c o n o m i c and extra-
" c c o n o m i c a n d inodiryinLi. I I K lirk.s b e t w e e n t h e e c o n o m i c a n d
cxtra-ecMnoMiJL jircconditions ot c.ipnal accumulation in the
light'of chaiigin;^ m a l e r ' a l l \ a n d discursively^ c o n s t i t u t e d f o r m s
o f c o m p ^ ' l i t i o n a n d j n t h e liiihl o l t e s i s t a n c e t o t h e c o l o n i z a t i o n
o f t h e c M r a e c o n o n n c b y I I K losiic o t c a p i t a l .
5. P r o m o t i n i ' , ilie p i o M s m n o t t h e u c n o r a l c o n d i t i o n s o f p r o -
d u c t i o n , e s p e c i a l l y c a p i t a l intciisiNC i i i l r a s t r u c t u r e with a l o n g
t u r n o v e r u n i e . . i p p i o p u . i r e lo ,i g l e i i s t a g e a n d / o r v a r i e t y of
capilaiism.
'6. M a n a g i n g t h e l u n J a m c n t a l c o n i i . i d i c l i o n l>ctwcen t h e i n c r e a s -
i n g l y social i M t i r c i>l p i o J u c l i w l o ccs a n d t h e c o n t i n u i n g
p r i v a t e a n d (.onipotilive n a l u i c o i i l i c social r e l a t i o n s of p r o -
d u c t i o n a n d tiic a p j i r o p n a l i o n o l - n r p ' j s l a b o u r .
7. Articulating the interlinked processes of d e - and reteniiorial-
i z a t i o n ;uid d e a n d i e i c m ] i o r < i l i / ; m o n a s s o c i a t e d with t h e
remakin;> ol" t h e sp:iiio-ieiT:jior:iJ li\c>; n e c e s s a r y for r e l a t i v e l y
stable ptiiods ol .iccLinulaiion.
8. A d d r e s s i U i ' ihv.. w j d e i j\)lilii-,il a n d social r e p c r c t i s s i u n s of t h e
changing forms ol :ippuarani.c ol capitalist contradictions a n d
d i l c m t m s a s i h e s j a r c i i i e d M i e d m . i n d t h r o u g h specific f o r m s
o f poHlical o i L i a n i / a t i o n a n d 'loci.il m o b i l i z a t i o n .
 46 Capitalism and the Capitalist Type of State

n o w c o n s i d e r t h e s t a t e ' s role i n social r e p r o d u c t i o n . T h i s i n v o l v e s t h e

d a y - t o - d a y , lifetime a n d i n t e r g e n e r a t i o n a l r e p r o d u c t i o n o f social s u b j e c t s
i n a c c o r d a n c e w i t h specific p r i n c i p l e s o f s o c i e t a l i z a t i o n . I n capitalist
social f o r m a t i o n s , social r e p r o d u c t i o n i s o r g a n i z e d m a i n l y t h r o u g h a n d / o r
a r o u n d t h e ( c h a n g i n g ) w a g e r e l a t i o n a n d its i n s e r t i o n i n t o a n e c o n o m y
d o m i n a t e d b y a c c u m u l a t i o n for t h e s a k e o f a c c u m u l a t i o n : T h e capitalist
w a g e r e l a t i o n h a s t h r e e f e a t u r e s t h a t m i l i t a t e against a h a r m o n i o u s ,
m a r k e t - m e d i a t e d s o l u t i o n t o social r e p r o d u c t i o n - e s p e c i a l l y w h e n t h e
l a t t e r g o e s b e y o n d d a i l y survival a s a n a c t i v e m e m b e r o f t h e l a b o u r force
to include m a i n t e n a n c e over the life-course and intergenerational r e p r o -
d u c t i o n . First, e m p l o y e e s a n d t h e i r d e p e n d a n t s (if a n y ) a r e free t o s p e n d
their wages without regard to the needs of capital and m a y be objectively
u n a b l e t o d o so, e v e n i f t h e y w e r e s o i n c l i n e d . T h u s w o r k e r s m a y n o t
r e p r o d u c e t h e i r l a b o u r - p o w e r ( i n c l u d i n g specific skills, k n o w l e d g e a n d
c o m m i t m e n t a s well a s g e n e r i c w o r k i n g capacity) t o satisfy t h e m a t e r i a l
n e e d s o f c a p i t a l ; a n d t h e y m a y n o t e n t e r t h e l a b o u r m a r k e t (or r e m a i n
w i t h i n it) o n t e r m s f a v o u r a b l e t o its c o n t i n u i n g v a l o r i z a t i o n . M o r e o v e r ,
insofar as c o n s u m p t i o n n o r m s a r e co-constituted by particular capitals
offering particular commodities, w o r k e r s m a y a d o p t patterns of con-
s u m p t i o n t h a t a r e h a r m f u l t o c a p i t a l i n g e n e r a l ( e v e n i f p r o f i t a b l e for
s o m e p a r t i c u l a r c a p i t a l s ) a s well a s t o t h e m s e l v e s . E v e n w h e r e l a b o u r -
p o w e r is adequately reproduced, e m p l o y m e n t may n o t be available at
a n a p p r o p r i a t e w a g e , o r a t all. S e c o n d , o n c e w a g e - l a b o u r i s s u b j e c t t o
c a p i t a l i s t c o n t r o l i n the l a b o u r p r o c e s s , i t m a y b e d e s t r o y e d o r w e a k e n e d
t h r o u g h over-exploitation (excessive h o u r s or w o r k intensity) or t h r o u g h
'collateral' d a m a g e (such as accidents or occupational diseases). For
c a p i t a l t e n d s t o p r i o r i t i z e its s e l f - v a l o r i z a t i o n r a t h e r t h a n t h e r e p r o d u c -
tion and welfare of labour-power. Particular capitals are certainly not
obliged to invest in improving their ' h u m a n capital' or to c o m p e n s a t e for
its d e p r e c i a t i o n u n l e s s it is p r o f i t a b l e to do so a n d , i n d e e d , it is w i d e l y
r e c o g n i z e d t h a t t h e r e i s a g e n e r a l t e n d e n c y for c a p i t a l t o u n d e r - i n v e s t i n
e d u c a t i o n a n d t r a i n i n g . This p r o b l e m i s l i n k e d t o t h e c o n t r a d i c t i o n
b e t w e e n labour-power as o n e substitutable factor of p r o d u c t i o n a m o n g
o t h e r s a n d l a b o u r - p o w e r as a specific set of skills a n d c o m p e t e n c i e s ; a n d
t o t h e c o n t r a d i c t i o n b e t w e e n t h e w a g e a s cost o f p r o d u c t i o n a n d s o u r c e
of demand. Nonetheless some types of production regime and m o d e s of
regulation do m a n a g e to institutionahze partial solutions. Third, regard-
ing b o t h its p r i v a t e c o n s u m p t i o n a n d its e x p l o i t a t i o n i n t h e l a b o u r
process, workers find it hard to defend their collective interests in repro-
d u c i n g t h e i r l a b o u r - p o w e r - e s p e c i a l l y w h e r e t h e r e is a l a r g e p o o l of
unemployed but employable workers.
These problems concerning a purely market-mediated reproduction
o f l a b o u r - p o w e r c r e a t e a s p a c e for o n e o r m o r e e x t r a - e c o n o m i c ( h e r e .
 Capitalism and the Capitalist Type of State 47

non-market) institutions tiiat can lielp to r e p r o d u c e tlie labour force to

t h e e x t e n t t h a t t h e m a r k e t c a n n o t a c h i e v e this. T h e r o l e o f d o m e s t i c
labour p e r f o r m e d outside the cash nexus is obviously i m p o r t a n t h e r e and
this i s w h y t h e f a m i l y a n d / o r h o u s e h o l d f o r m s ( h e n c e g e n d e r a n d i n t e r -
g e n e r a t i o n a l r e l a t i o n s t o o ) a r e a l w a y s m a j o r objects o f g o v e r n a n c e a s
well a s sites o f struggle. T h e p r e s e n t w o r k i s m a i n l y c o n c e r n e d , h o w e v e r ,
with the key roles of the state in these matters. T h e latter operates on
o n e or m o r e scales f r o m t h e local to t h e s u p r a n a t i o n a l to c o n t r i b u t e
directly o r i n d i r e c t l y t o t h e r e p r o d u c t i o n o f l a b o u r - p o w e r o v e r t h e life
cycle, affecting daily, lifetime a n d i n t e r g e n e r a t i o n a l r e p r o d u c t i o n . Its
twin t a s k s a r e , if p o s s i b l e , to e n s u r e a c o n t i n u i n g a n d a d e q u a t e s u p p l y of
a p p r o p r i a t e l y qualified l a b o u r - p o w e r i n r e l a t i o n t o t h e c h a n g i n g ( a n d
often u n p r e d i c t a b l e ) d e m a n d s o f t h e l a b o u r m a r k e t a n d t o c o m p e n s a t e
for t h e effects o f c o m m o d i f i c a t i o n o n social r e p r o d u c t i o n a n d social
c o h e s i o n ( A u m e e r u d d y e t al. 1978; d e B r u n h o f f 1978; Offe 1 9 8 5 b ;
R e u t e n a n d W i l h a m s 1989).
T h e w a g e r e l a t i o n i s t h e r e f o r e t h e s t a r t i n g p o i n t for a w i d e r a n g e o f
policies d i r e c t e d a t t h e 'social q u e s t i o n ' , w h i c h i n v o l v e s m o r e t h a n social
policy For, as K a u f m a n n notes:

What we generally term the welfare state refers not only to the state, but
also, as German social scientists precisely formulated in the mid-19th
century, to civil society. The 'mediation' between the private sphere of the
market economy and the public sphere of government under law was
referred to around 1850 as 'Sozialpolitik' (Pankoke 1970). 'Sozialpolitik'
may be translated into English as 'social policy' or 'social polities'. In
the German context the main concern addressed by social politics was the
political and social integration of the emerging working classes into the
newly constituted German Reich. In the British and Scandinavian tradi-
tion there was, for a long time, no comprehensive concept for the emerg-
ing policies of labour protection, social security and social services. The
term 'welfare state' was accepted in Scandinavia in the 1930s, but was only
widely used in Great Britain after World War II. 'Welfare state' here is less
concerned with social politics than with social policies. (2001: 17)

Kaufmann's reference to national traditions illustrates o n c e m o r e the

role o f d i s c o u r s e i n c o n s t i t u t i n g s t a t e policy. H e also i n d i c a t e s significant
v a r i a t i o n s i n i n d i v i d u a l n a t i o n a l states o v e r t i m e a s issues o f e c o n o m i c
a n d social policy a r e r e p r o b l e m a t i z e d i n d i f f e r e n t w a y s a n d a s a p p r o -
priate new governmental solutions are proposed, instituted and pursued.
T h e fact that n e i t h e r e m p l o y e e s n o r individual capitals can solve these
d i l e m m a s u n a i d e d d o e s n o t m e a n t h a t t h e s t a t e can ( o r m u s t ) solve t h e m .
Indeed, as with the other state functions discussed above, it is unlikely
that the state could ever k n o w in advance h o w to solve t h e m even were
48 Capitalism and the Capitalist Type of State

s u c h total s o l u t i o n s p o s s i b l e . S u c h e c o n o m i c a n d social f u n c t i o n s r e q u i r e
active m a n a g e m e n t of changing conjunctures within an inherently con-
t r a d i c t o r y system r a t h e r t h a n p u r s u i t o f p r e d e t e r m i n e d a n d a u t o n o m o u s
e c o n o m i c a n d social policies. T h e y a r e a l w a y s m e d i a t e d i n a n d t h r o u g h
political struggles b r o a d l y d e f i n e d r a t h e r t h a n d e t e r m i n e d i n n a r r o w
t e c h n i c a l a n d e c o n o m i c t e r m s . A n d t h e y a r e affected b y t h e s t a t e ' s o w n
distinctive failures a n d c r i s i s - t e n d e n c i e s , r o o t e d i n t h e di'^tinctive n a t u r e
o f politics i n capitalist societies. A l t h o u g h these d i l e m m a s a r e h a n d l e d
o n v a r i o u s e c o n o m i c levels f r o m t h e f i r m u p w a r d s a n d o n v a r i o u s n o n -
e c o n o m i c sites, t h e s t a t e has n o t only b e e n a m a j o r a d d r e s s e e o f d e m a n d s
in t h e s e a r e a s b u t h a s also gained a m a j o r role in m a n a g i n g these d i l e m -
m a s d i r e c t l y o r i n d i r e c t l y t h r o u g h its l a b o u r m a r k e t a n d social policies.

4. On Spatio-temporal Fixes

I h a v e a l r e a d y s u g g e s t e d t h a t r e p r o d u c i n g a n d r e g u l a r i z i n g c a p h a l as a
social r e l a t i o n involves a social fix ( m o d e of r e g u l a t i o n ) t h a t c o m p e n -
sates for t h e i n c o m p l e t e n e s s o f t h e p u r e c a p i t a l r e l a t i o n iri specific c o n -
t e x t s a n d gives it a specific d y n a m i c t h r o u g h t h e a r t i c u l a t i o n of its
e c o n o m i c a n d e x t r a - e c o n o m i c e l e m e n t s . T h i s social f i x h e l p s s e c u r e a
relatively durable structural coherence in managing the contradictions
a n d d i l e m m a s i n h e r e n t i n t h e c a p i t a l r e l a t i o n , s o t h a t different forms,
i n s t i t u t i o n s a n d p r a c t i c e s t e n d t o b e m u t u a l l y reinforcing. T h i s i n c l u d e s
the imposition on these e c o n o m i c a n d extra-economic e l e m e n t s of a
s p a t i o - t e m p o r a l f i x . T h i s c o n c e p t will b e e l a b o r a t e d i n l a t e r c h a p t e r s , b u t
s o m e brief c o m m e n t s a r e a p p r o p r i a t e h e r e .
S t r u c t u r a l l y , t h e s e f i x e s e m e r g e w h e n a n a c c u m u l a t i o n r e g i m e a n d its
m o d e o f r e g u l a t i o n c o - e v o l v e t o p r o d u c e a certain s t r u c t u r a l c o h e r e n c e
w i t h i n a given s p a t i o - t e m p o r a l f r a m e w o r k b u t n o t b e y o n d it. T h i s i s t y p i -
cally a s s o c i a t e d w i t h a d i s t i n c t i v e h i e r a r c h y of s t r u c t u r a l f o r m s t h a t
affects i n t e r a c t i o n s w i t h i n t h e i n s t i t u t i o n a l a r c h i t e c t u r e a s a w h o l e a n d
t h e r e b y s h a p e s t h e overall logic o f t h e s p a t i o - t e m p o r a l f i x . T h i s h i e r a r -
chy i n v o l v e s giving g r e a t e r p r i o r i t y t o t h e r e g u l a r i z i n g o f s o m e s t r u c t u r a l
f o r m s ( a n d giving g r e a t e r priority, p e r h a p s , t o o n e o r o t h e r a s p e c t o f t h e i r
associated contradictions and d i l e m m a s ) than to other structural forms.
T h e s e p r i o r i t i e s will v a r y w i t h a c c u m u l a t i o n r e g i m e s , m o d e s o f g r o w t h
a n d g o v e r n a n c e capacities (cf. P e t i t 1999). I n A t l a n t i c F o r d i s m , for
example, the wage and m o n e y forms were the principal structural forms
at the heart of the m o d e of regulation; in post-Fordism, other forms have
b e c o m e m o r e i m p o r t a n t ( s e e c h a p t e r s 2 a n d 3). Or, a g a i n , w h i l e l i b e r a l
m a r k e t e c o n o m i e s m a y give m o r e w e i g h t t o l a b o u r - p o w e r a s a s u b s t i -
t u t a b l e f a c t o r of p r o d u c t i o n a n d to t h e w a g e as a cost of p r o d u c t i o n ,
 Capitalism and the Capitalist Type of State 49

m o r e c o o r d i n a t e d capitalist e c o n o m i e s m a y p r i o r i t i z e l a b o u r - p o w e r i n
its guise a s so-called h u m a n c a p i t a l a n d t h e w a g e a s a s o u r c e o f d e m a n d .
Strategically, b e c a u s e c a p i t a l i s m ' s c o n t r a d i c t i o n s a n d d i l e m m a s a r e i n -
soluble in t h e abstract, t h e y a r e resolved - partially a n d provisionally, if
at all - t h r o u g h t h e f o r m u l a t i o n - r e a l i z a t i o n of specific a c c u m u l a t i o n
s t r a t e g i e s a t v a r i o u s e c o n o m i c a n d p o l i t i c a l scales i n specific s p a t i o -
t e m p o r a l c o n t e x t s . O n c e a g a i n , t h e n , b e c a u s e o f t h e significance o f
a c c u m u l a t i o n s t r a t e g i e s ( a n d t h e i r a s s o c i a t e d s t a t e projects a n d , w h e r e
relevant, hegemonic visions), we observe the i m p o r t a n c e of agency a n d
discourse in capital accumulation. Such spatio-temporal fixes delimit t h e
main spatial a n d t e m p o r a l boundaries within which structural c o h e r e n c e
is secured, a n d externalize certain costs of securing this c o h e r e n c e b e y o n d
t h e s e b o u n d a r i e s . E v e n w i t h i n t h e s e b o u n d a r i e s s o m e classes, class frac-
tions, social c a t e g o r i e s o r o t h e r social forces l o c a t e d inside t h e s e s p a t i o -
temporal boundaries are marginalized, excluded or oppressed. Thus,
s p a t i o - t e m p o r a l f i x e s also f a c i l i t a t e t h e i n s t i t u t i o n a l i z e d c o m p r o m i s e s o n
which a c c u m u l a t i o n r e g i m e s a n d m o d e s o f r e g u l a t i o n d e p e n d , a n d s u b s e -
quently c o m e to e m b o d y t h e m . This can involve super-exploitation of
internal or external spaces outside the compromise, super-exploitation of
n a t u r e o r i n h e r i t e d social r e s o u r c e s , d e f e r r a l o f p r o b l e m s i n t o a n
indefinite future and, of course, t h e exploitation and/or o p p r e s s i o n of
specific classes, s t r a t a or o t h e r social c a t e g o r i e s . I d i s c u s s t h e s p a t i o -
t e m p o r a l f i x o f A t l a n t i c F o r d i s m a n d its b r e a k d o w n i n the n e x t c h a p t e r .
N o n e t h e l e s s , i n s o f a r a s such c o m p r o m i s e s m a r g i n a l i z e f o r c e s t h a t act
as bearers of functions or operations essential to long-run accumulation,
the g r o w t h o f significant i m b a l a n c e s , d i s p r o p o r t i o n a l i t i e s o r d i s u n i t y i n
t h e circuit o f c a p i t a l will t e n d t o s t r e n g t h e n t h e h a n d o f t h e s e forces,
enabling t h e m to disrupt the institutionaUzed compromises involved in
a particular accumulation regime, m o d e of regulation, state form and
s p a t i o - t e m p o r a l fix (cf. C l a r k e 1977). S u c h crises t y p i c a l l y act as a s t e e r -
i n g m e c h a n i s m for t h e a l w a y s p r o v i s i o n a l , p a r t i a l a n d u n s t a b l e r e -
equihbration of capital a c c u m u l a t i o n insofar as they p r o m p t a t t e m p t s to
g u i d e t h e forcible r e i m p o s i t i o n of t h e u n i t y of t h e circuit of c a p i t a l
t h r o u g h n e w a c c u m u l a t i o n s t r a t e g i e s a n d m o d e s o f r e g u l a t i o n (cf. H i r s c h
1 9 7 6 , 1 9 7 7 ; L i n d n e r 1 9 7 3 ; W i r t h 1977).
T h e p r i m a r y scales a n d t e m p o r a l h o r i z o n s a r o u n d w h i c h such f i x e s a r e
built and the extent of their coherence vary considerably over time. This
is r e f l e c t e d in t h e v a r i a b l e c o i n c i d e n c e of different b o u n d a r i e s , b o r d e r s
o r f r o n t i e r s o f a c t i o n a n d t h e c h a n g i n g p r i m a c y o f d i f f e r e n t scales. Politi-
cal b o u n d a r i e s , for e x a m p l e , h a v e b e e n c h a r a c t e r i z e d b y m e d i e v a l p o l y -
m o r p h y , W e s t p h a l i a n exclusivity a n d p o s t - W e s t p h a l i a n c o m p l e x i t y .
Likewise, the consolidation of capitalism witnessed the national eclipse
o f t h e u r b a n scale a s cities w e r e i n t e g r a t e d i n t o n a t i o n a l e c o n o m i c
50 Capitalism and the Capitalist Type of State

s y s t e m s a n d s u b o r d i n a t e d t o t h e political p o w e r o f n a t i o n a l t e r r i t o r i a l
s t a t e s . A n d t h e n a t i o n a l scale has since b e e n c h a l l e n g e d b y t h e rise o f
global city n e t w o r k s m o r e o r i e n t e d t o o t h e r global cities t h a n t o n a t i o n a l
h i n t e r l a n d s (cf. B r a u d e l 1984; B r e n n e r 1999a, 1 9 9 9 b ; T a y l o r 1994). I con-
sider s o m e i m p l i c a t i o n s of rescaling in c h a p t e r 5.
T h e s e i d e a s h a v e i m p o r t a n t i m p l i c a t i o n s for a c c u m u l a t i o n strategies,
s t a t e p r o j e c t s a n d h e g e m o n i c p r o j e c t s o n v a r i o u s scalfes o f a c t i o n a n d
o v e r different t i m e horizons. F o r e a c h o f t h e s e i n v o l v e s a n a t t e m p t t o
s t r a t e g i c a l l y c o o r d i n a t e activities across d i f f e r e n t s y s t e m s a n d t h e life-
world in o r d e r to achieve a limited, localized structural c o h e r e n c e in
a c c u m u l a t i o n , s t a t e activities a n d social f o r m a t i o n s respectively. T h e r e i s
a m p l e s c o p e for c o m p e t i t i o n a m o n g social forces o v e r a c c u m u l a t i o n
s t r a t e g i e s , state p r o j e c t s a n d h e g e m o n i c visions, a s well a s for p o t e n t i a l
d i s j u n c t i o n s b e t w e e n t h e s t r a t e g i e s t h a t e m e r g e f r o m such c o m p e t i t i o n
t o d o m i n a t e t h e i r r e s p e c t i v e i m a g i n e d s p h e r e s . I n this c o n t e x t a k e y r o l e
is p l a y e d by t h e r i v a l r i e s a n d struggles of i n t e l l e c t u a l forces, i n d i v i d u a l l y
a n d collectively, i n a free-floating o r a n o r g a n i z e d m a n n e r , t o a r t i c u l a t e
s t r a t e g i e s , projects a n d visions t h a t seek t o r e c o n c i l e c o n t r a d i c t i o n s a n d
conflicts a n d t o r e s o l v e d i l e m m a s for v a r i o u s sites a n d scales o f a c t i o n
(cf. G r a m s c i 1 9 7 1 ; J e s s o p 1990b; P o r t e l l i 1973). T h e p r i n c i p a l forces
i n v o l v e d i n t h e s e rivalries a n d s t r u g g l e s a r e o r g a n i z e d interests, political
p a r t i e s a n d social m o v e m e n t s , w i t h t h e m a s s m e d i a r a t h e r t h a n t h e p u b l i c
s p h e r e n o w h a v i n g a c e n t r a l p o s i t i o n i n t h e m e d i a t i o n o f t h e s t r u g g l e for
h e g e m o n y i n t h e s e m a t t e r s . W e will s e e m a n y e x a m p l e s o f this i n l a t e r
chapters.
A s p a r t o f a g i v e n s p a t i o - t e m p o r a l f i x , different i n s t i t u t i o n s , a p p a r a -
t u s e s o r a g e n c i e s m a y specialize p r i m a r i l y i n o n e o r o t h e r h o r n o f a
d i l e m m a , deal with i t o v e r different t e m p o r a l h o r i z o n s , o r a d d r e s s dif-
f e r e n t a s p e c t s a t different times. T h e state m a y also a l t e r t h e b a l a n c e
between institutions, apparatuses and agencies by reallocating responsi-
bilities a n d r e s o u r c e s , a l l o w i n g t h e m t o c o m p e t e for p o l i t i c a l s u p p o r t a n d
l e g i t i m a c y a s c i r c u m s t a n c e s c h a n g e , etc. S u c h s t r a t e g i e s m a y b e p u r s u e d
e n t i r e l y w i t h i n t h e s t a t e o r e x t e n d t o t h e division b e t w e e n s t a t e a n d n o n -
state modes of governance. A n o t h e r way to m a n a g e potential problems
a r i s i n g f r o m t h e l i m i t s o f different m o d e s o f p o l i c y - m a k i n g o r crisis-
m a n a g e m e n t i s t h r o u g h v a r i a b l e p o l i c y e m p h a s e s a c r o s s different scales
of action and temporal horizons. For example, in Atlantic Fordism, the
n a t i o n a l s t a t e set t h e m a c r o e c o n o m i c f r a m e w o r k , t h e local s t a t e a c t e d a s
its r e l a y for m a n y n a t i o n a l l y d e t e r m i n e d p o l i c i e s a n d i n t e r g o v e r n m e n t a l
cooperation in various international regimes maintained the conditions
for n a t i o n a l e c o n o m i c g r o w t h . L i k e w i s e , i n c o n t e m p o r a r y n e o l i b e r a l
a c c u m u l a t i o n r e g i m e s , a r e l a t i v e n e g l e c t o f s u b s t a n t i v e (as o p p o s e d t o
f o r m a l ) s u p p l y - s i d e c o n d i t i o n s a t t h e i n t e r n a t i o n a l a n d n a t i o n a l levels i n
psrr-

Capitalism and the Capitalist Type of State 51

favour o f c a p i t a l flows i n a n d t h r o u g h s p a c e i s p a r t l y c o m p e n s a t e d b y
m o r e i n t e r v e n t i o n i s t p o l i c i e s a t t h e r e g i o n a l , u r b a n a n d local levels,
w h e r e m a n y m a t e r i a l i n t e r d e p e n d e n c i e s a m o n g specific p r o d u c t i v e
capitals a r e l o c a t e d ( G o u g h a n d E i s e n s c h i t z 1996). T h i s h e l p s e x p l a i n
why local states a r e being reorganized as n e w forms of local or regional
partnership e m e r g e to guide and p r o m o t e t h e d e v e l o p m e n t of local or
regional resources (see chapter 5).
A n o t h e r e x a m p l e o f s p a t i a l - s c a l a r divisions o f l a b o u r i s t h e d i s t i n c -
tion b e t w e e n f o r e i g n a n d d o m e s t i c r e l a t i o n s i n h e r e n t i n t h e m o d e r n s t a t e
s y s t e m s u c h t h a t s o m e p a r t s o f t h e s t a t e a p p a r a t u s specialize i n e x t e r n a l
relations, s o m e in internal relations. H o w e v e r , with t h e growing impact
of globalization a n d n e w forms of competitiveness, inherited divisions of
state l a b o u r change. Thus, not only is t h e distinction b e t w e e n domestic
and f o r e i g n policy b e c o m i n g b l u r r e d ; b u t s u b n a t i o n a l g o v e r n m e n t s a r e
n o w getting engaged in foreign (economic) policy t h r o u g h cross-border
cooperation, international localization, and so on, at the same time as
supranational bodies get involved in the redesign and reorientation of
s u b n a t i o n a l politics.
T h e r e c a n a l s o b e a t e m p o r a l division o f l a b o u r w i t h d i f f e r e n t insti-
tutions, apparatuses or agencies responding to contradictions, dilemmas
a n d p a r a d o x e s o v e r different t i m e h o r i z o n s . T h i s i s reflected i n t h e
c o n v e n t i o n a l d i s t i n c t i o n b e t w e e n p l a n n i n g a n d e x e c u t i o n w i t h i n or-
g a n i z a t i o n s a n d i n t h e p r i m a c y o f different t e m p o r a l h o r i z o n s a c r o s s
o r g a n i z a t i o n s (for e x a m p l e , b a n k s a n d c e n t r a l b a n k s , c o m p u t e r -
p r o g r a m m e d arbitrage funds and long-term v e n t u r e capital funds).
Similarly, c o r p o r a t i s t a r r a n g e m e n t s h a v e o f t e n b e e n i n t r o d u c e d t o
a d d r e s s l o n g - t e r m e c o n o m i c a n d social issues w h e r e c o m p l e x , r e c i p r o c a l
interdependence requires long-term cooperation - thereby taking the
relevant policy areas outside the short-term time horizons of electoral
cycles a n d p a r l i a m e n t a r y in-fighting. I n b o t h c a s e s t h e r e i s s c o p e f o r
activities t o r e b a l a n c e r e l a t i o n s a m o n g t h e s e i n s t i t u t i o n s , a p p a r a t u s e s o r
a g e n c i e s t h r o u g h differential a l l o c a t i o n o f r e s o u r c e s , a l l o w i n g t h e m t o
c o m p e t e for legitimacy in changing circumstances.

5. Governance and Metagovernance

The constitutive incompleteness of t h e capital relation, t h e contradic-

tions a n d d i l e m m a s o f a c c u m u l a t i o n , a n d t h e l i m i t a t i o n s o f t h e s p a t i o -
temporal fixes that develop to contain, displace and defer these problems
create a space for attempts at o n g o i n g m a n a g e m e n t , muddling t h r o u g h
a n d c r i s i s - m a n a g e m e n t . G o v e r n a n c e a n d m e t a g o v e r n a n c e a r e useful
c o n c e p t s for a d d r e s s i n g s u c h issues a n d t h e i r i m p l i c a t i o n s for e c o n o m i c
52 Capitalism and the Capitalist Type of State

a n d social i n t e r v e n t i o n . G o v e r n a n c e r e f e r s h e r e t o a n y f o r m o f c o o r d i -
n a t i o n o f i n t e r d e p e n d e n t social r e l a t i o n s - r a n g i n g f r o m s i m p l e d y a d i c
i n t e r a c t i o n s t o c o m p l e x social d i v i s i o n s o f l a b o u r . T h r e e m a i n f o r m s a r e
usually d i s t i n g u i s h e d : t h e a n a r c h y o f e x c h a n g e (for e x a m p l e , m a r k e t
f o r c e s ) , t h e h i e r a r c h y o f c o m m a n d (for e x a m p l e , i m p e r a t i v e c o o r d i n a -
t i o n b y t h e s t a t e ) a n d t h e h e t e r a r c h y o f s e l f - o r g a n i z a t i o n (for e x a m p l e ,
h o r i z o n t a l n e t w o r k s ) . S o m e t i m e s I will also r e f e r t o this t h i r d f o r m a s
g o v e r n a n c e , b u t i t will b e c l e a r f r o m t h e c o n t e x t w h e t h e r a n a r r o w o r
broad meaning is intended. Because the other two forms are probably
familiar, I will focus h e r e on h e t e r a r c h y . T h i s involves t h e reflexive self-
o r g a n i z a t i o n of i n d e p e n d e n t a c t o r s i n v o l v e d in c o m p l e x r e l a t i o n s of
reciprocal interdependence, with such self-organization being b a s e d on
c o n t i n u i n g d i a l o g u e a n d r e s o u r c e - s h a r i n g t o d e v e l o p m u t u a l l y beneficial
joint projects and to m a n a g e the contradictions and dilemmas inevitably
i n v o l v e d i n s u c h s i t u a t i o n s (for m o r e e x t e n d e d discussion o f all t h r e e
t y p e s , see c h a p t e r 6 ) . G o v e r n a n c e o r g a n i z e d o n this basis n e e d n o t e n t a i l
a c o m p l e t e s y m m e t r y i n p o w e r r e l a t i o n s o r c o m p l e t e e q u a l i t y i n t h e dis-
t r i b u t i o n of benefits: i n d e e d , it is highly u n l i k e l y to do so a l m o s t r e g a r d -
less o f t h e o b j e c t o f g o v e r n a n c e o r t h e ' s t a k e h o l d e r s ' w h o a c t u a l l y
p a r t i c i p a t e i n t h e g o v e r n a n c e p r o c e s s . A l l t h a t i s i n v o l v e d i n this p r e -
l i m i n a r y definition i s t h e c o m m i t m e n t o n t h e p a r t o f t h o s e i n v o l v e d t o
reflexive s e l f - o r g a n i z a t i o n i n t h e face o f c o m p l e x r e c i p r o c a l i n t e r d e p e n -
dence. In addition to any general relevance that these three forms of
c o o r d i n a t i o n m a y h a v e , t h e y also c o r r e s p o n d t o d i f f e r e n t a s p e c t s o f t h e
capital r e l a t i o n a n d capitalist s o c i e t a l i z a t i o n m o r e generaUy ( c h a p t e r 6).
I n t h i s s e n s e , a l l t h r e e t e n d t o b e r e p r o d u c e d , a l b e i t w i t h different w e i g h t s
at d i f f e r e n t t i m e s , as c a p i t a l a c c u m u l a t i o n itself is r e p r o d u c e d .
G o v e r n a n c e mechanisms and practices have key roles in modulating
t h e scalar a n d s p a t i a l divisions o f l a b o u r a n d a l l o c a t i n g specific tasks t o
d i f f e r e n t t i m e scales a n d p e r i o d s . B u t , like m o d e s o f r e g u l a t i o n m o r e
generally, they m a y be destabilized in t h e course of capital accumulation.
F o r this always t e n d s t o e s c a p e t h e f o r m s i n s t i t u t e d t o r e g u l a t e a n d / o r
govern it and may thereby modify or even disrupt the unstable equilib-
rium of compromises a r o u n d which that s a m e accumulation process was
p r e v i o u s l y o r g a n i z e d . T h e n e g l e c t o f s o m e k e y c o n d i t i o n for a c c u m u l a -
tion generates increasing tensions to address it (either t h r o u g h emer-
g e n c e o f crises o r t h r o u g h t h e m o b i l i z a t i o n o f social f o r c e s t h a t a r e
critical t o c o n t i n u e d a c c u m u l a t i o n a n d a d v e r s e l y affected b y s u c h
n e g l e c t ) . W i t h i n t h e e c o n o m y , this i s reflected i n p r i c e m o v e m e n t s a s well
a s e c o n o m i c conflicts, i n t h e p o l i t i c a l s y s t e m i n t e r m s o f shifts i n p u b l i c
a n d e l i t e o p i n i o n a s well a s p o l i t i c a l p r o t e s t s , e t c . M e t a s t e e r i n g ( s o m e -
t i m e s c a l l e d m e t a g o v e r n a n c e ) e n t e r s h e r e a s social f o r c e s a t t e m p t t o
c o l l i b r a t e (modify t h e r e l a t i v e b a l a n c e a m o n g ) v a r i o u s g o v e r n a n c e
 Capitalism and the Capitalist Type of State 53

mechanisms and modify their relative importance. Collibration, accord-

ing t o D u n s i r e ( 1 9 9 6 ) , i s c o n c e r n e d w i t h t h e o v e r a l l o r g a n i z a t i o n a n d
b a l a n c i n g o f t h e different f o r m s o f c o o r d i n a t i o n o f c o m p l e x r e c i p r o c a l
interdependence. In addition to m e t a s t e e r i n g practices within t h e m o r e
o r less s e p a r a t e fields o f a n a r c h i c m a r k e t e x c h a n g e , h i e r a r c h i c a l o r g a n i -
z a t i o n s a n d h e t e r a r c h i c s e l f - o r g a n i z a t i o n , t h e r e i s also e x t e n s i v e s c o p e
for m o r e general practices that steer the evolving relationship a m o n g
t h e s e d i f f e r e n t m o d e s o f c o o r d i n a t i o n . T h e n e e d for s u c h p r a c t i c e s i s
especially a c u t e o w i n g t o t h e w i d e d i s p e r s i o n o f g o v e r n a n c e m e c h a n i s m s
in an e m e r g i n g world society a n d t h e c o r r e s p o n d i n g n e e d to build a p p r o -
p r i a t e m a c r o - o r g a n i z a t i o n a l a n d i n t e r s y s t e m i c c a p a c i t i e s t o a d d r e s s far-
reaching increases in t h e complexity of interdependencies.

6. Concluding Remarks

This c h a p t e r h a s i n t r o d u c e d s o m e b a s i c f e a t u r e s o f c a p i t a l i s m a s a m o d e
of production a n d object of regulation, noting in particular the role of
s p a t i o - t e m p o r a l f i x e s i n s e c u r i n g its r e l a t i v e s t a b i l i z a t i o n , i n o r d e r t o c o n -
textualize t h e s t u d y of e c o n o m i c a n d social reproduction. It h a s intro-
d u c e d s o m e b a s i c ideas a b o u t t h e capitalist t y p e o f s t a t e , m o d e s o f s t a t e
i n t e r v e n t i o n , a n d t h e e c o n o m i c a n d social policy f u n c t i o n s o f t h e s t a t e
a n d t h e i r r e l e v a n c e t o w e l f a r e r e g i m e s . A n d i t h a s also i n t r o d u c e d s o m e
g e n e r a l t h e m e s a n d c o n c e p t s r e g a r d i n g t h e i r c o n n e c t i o n t o issues o f gov-
e r n a n c e a n d m e t a g o v e r n a n c e , a n d t h e i r specific d y n a m i c s . T h e s e i d e a s
a r e e l a b o r a t e d , s u p p l e m e n t e d a n d qualified i n s u b s e q u e n t c h a p t e r s .
T h e s e a r g u m e n t s h a v e p r e p a r e d t h e g r o u n d for a f o u r - d i m e n s i o n a l
analysis of the changing form a n d functions of the state in regard to
c a p i t a l a c c u m u l a t i o n , social r e p r o d u c t i o n , scale a n d g o v e r n a n c e . T l i e f i r s t
d i m e n s i o n refers t o t h e s t a t e ' s d i s t i n c t i v e roles i n s e c u r i n g t h e c o n d i t i o n s
for t h e i m p r o b a b l e c o n t i n u a t i o n o f p r o f i t a b l e p r i v a t e b u s i n e s s f r o m t h e
v i e w p o i n t of p a r t i c u l a r capitals a n d capital in g e n e r a l . T h i s is t h e field of
e c o n o m i c policy. I t i s i m p o r t a n t b e c a u s e m a r k e t forces a l o n e c a n n o t
secure these conditions and must be supplemented by n o n - m a r k e t
m e c h a n i s m s . T h e s e c o n d d i m e n s i o n r e f e r s t o h o w t h e c o n d i t i o n s for t h e
p r o b l e m a t i c r e p r o d u c t i o n of labour-power on a day-to-day, lifetime and
intergenerational basis are secured from the viewpoints of particular
capitals, c a p i t a l i n g e n e r a l a n d w o r k e r s ( c o n s i d e r e d b o t h a s w o r k e r s a n d
as c i t i z e n s ) . T h i s is t h e field of social p o h c y as d e f i n e d in this b o o k . It
matters, b e c a u s e l a b o u r - p o w e r is a fictitious commodity. For, although it
i s b o u g h t a n d sold i n l a b o u r m a r k e t s a n d m a y a d d v a l u e i n p r o d u c t i o n ,
it is n o t itself d i r e c t l y ( r e ) p r o d u c e d w i t h i n a n d by c a p i t a l i s t firms w i t h a
view t o p r i v a t e profit. L a b o u r - p o w e r e n t e r s t h e m a r k e t e c o n o m y f r o m
54 Capitalism and the Capitalist Type of State

o u t s i d e . T h i s p o s e s e c o n o m i c p r o b l e m s a s r e g a r d s its i n d i v i d u a l a n d col-
lective suitability t o capital's n e e d s a n d its o w n survival i n t h e a b s e n c e
of a s e c u r e i n c o m e or o t h e r assets; social p r o b l e m s r e g a r d i n g social inclu-
sion a n d c o h e s i o n - i m p o r t a n t i n t u r n for a t t r a c t i n g i n v e s t m e n t ; a n d
p o h t i c a l p r o b l e m s r e g a r d i n g t h e l e g i t i m a c y o f state i n t e r y e n t i o n i n this
area.
T h e third dimension concerns h o w a certain structured coherence is
i n t r o d u c e d i n t o t h e s c a l a r o r g a n i z a t i o n o f t h e s e t w o sets o f activities
t h r o u g h s p a t i o - t e m p o r a l f i x e s i n w h i c h , typically, o n e scale i s p r i m a r y .
T h u s t h e c e n t r a l issue h e r e is t h e p r i m a r y scale, if any, on w h i c h e c o n o m i c
a n d social policies a r e d e c i d e d - e v e n i f t h e y a r e u n d e r p i n n e d o r i m p l e -
m e n t e d o n o t h e r scales (see e s p e c i a l l y C o l l i n g e 1999). T h i s i s i m p o r t a n t
b e c a u s e e c o n o m i c a n d social policies a r e politically m e d i a t e d a n d t h e
p r i m a r y scales o f political o r g a n i z a t i o n m a y n o t c o i n c i d e w i t h t h o s e o f
e c o n o m i c a n d social life. T h e f o u r t h d i m e n s i o n c o n c e r n s t h e chief m e c h a -
n i s m , if any, for s u p p l e m e n t i n g m a r k e t f o r c e s in facilitating capitalist
profitability a n d r e p r o d u c i n g l a b o u r - p o w e r a n d , m o r e generally, h o w t h e
relative weight of these modes of regulation or governance is maintained
in a c o h e r e n t m a n n e r . This m a t t e r s because the state is just o n e a m o n g
several m e c h a n i s m s through which a t t e m p t s are m a d e to o v e r c o m e
m a r k e t failures a n d i n a d e q u a c i e s . C a p i t a l i s m ' s o v e r a l l d y n a m i c a n d t h e
n a t u r e o f t h e w i d e r society d e p e n d o n t h e p a r t i c u l a r m i x o f m e c h a n i s m s .
Deploying these four dimensions, I n o w present the key features of the
K e y n e s i a n w e l f a r e n a t i o n a l s t a t e , e x p l a i n its crisis-tendencies a n d s u g g e s t
that it is being tendentially r e p l a c e d by a n e w f o r m of welfare regime.
 The Keynesian Welfare
National State

This c h a p t e r c o n s t r u c t s a stylized m o d e l o f t h e p o s t w a r s t a t e i n t h e
economies of Atlantic Fordism, namely, the U S A and Canada, North-
western Europe, Australia and N e w Zealand. I characterize these
e c o n o m i e s a s A t l a n t i c F o r d i s t for t w o r e a s o n s . First, d e s p i t e its l a r g e l y
autocentric (or domestically based) growth dynamic, the spread of t h e
F o r d i s t a c c u m u l a t i o n r e g i m e o c c u r r e d t h r o u g h diffusion o f t h e
A m e r i c a n industrial paradigm to Northwestern E u r o p e ; and, second,
because it was supported by various transatlantic international regimes
( v a n d e r Pijl 1984; R u p e r t 1994). A u s t r a h a a n d N e w Z e a l a n d a r e
i n c l u d e d b e c a u s e t h e y w e r e i n t e g r a t e d d u r i n g this p e r i o d i n a n e c o n o m i c
a n d political bloc t h a t w a s organized u n d e r British h e g e m o n y a n d were
i n c l u d e d i n A m e r i c a n m i l i t a r y alliances. A t l a n t i c F o r d i s m c a n b e briefly
defined a s a n a c c u m u l a t i o n r e g i m e b a s e d o n a v i r t u o u s a u t o c e n t r i c circle
of mass production and mass c o n s u m p t i o n secured t h r o u g h a distinctive
m o d e o f r e g u l a t i o n t h a t w a s discursively, i n s t i t u t i o n a l l y a n d p r a c t i c a l l y
m a t e r i a l i z e d i n t h e K e y n e s i a n w e l f a r e n a t i o n a l s t a t e ( o r K W N S ) . I define
A t l a n t i c F o r d i s m i n m o r e d e t a i l b e l o w a n d e l a b o r a t e t h e f o u r k e y fea-
t u r e s o f its i d e a l t y p i c a l s t a t e . B u t I also n o t e h o w d i f f e r e n t n a t i o n a l
e c o n o m i e s , societies a n d states d e v i a t e f r o m t h e i d e a l t y p e t o give dif-
f e r e n t m o d e s o f e c o n o m i c g r o w t h , different w e l f a r e r e g i m e s a n d differ-
ent forms of g o v e r n a n c e within this b r o a d ideal-typical matrix. I then
s u g g e s t w h y t h e K W N S h a d a k e y role i n s e c u r i n g t h e s p a t i o - t e m p o r a l
fix o f A t l a n t i c F o r d i s m . T h e c h a p t e r e n d s w i t h t h e c r i s i s - t e n d e n c i e s i n t h e
typical K W N S .
56 The Keynesian Welfare NaHonal State

1. On Atlantic Fordism

T h i s is n o t t h e p l a c e to e n g a g e in a c r i t i q u e of t h e U t e r a t u r e on F o r d i s m
a n d p o s t - F o r d i s m ( s e e A m i n 1994; B o y e r a n d D u r a n q ^ 1997; J e s s o p
1992a), b u t a brief a c c o u n t of F o r d i s m is a p p r o p r i a t e ( o n p o s t - F o r d i s m ,
s e e c h a p t e r 3 ) . I t c a n b e a n a l y s e d f r o m five a n g l e s : (1) t h e l a b o u r p r o c e s s
v i e w e d as a p a r t i c u l a r c o n f i g u r a t i o n of t h e t e c h n i c a l a n d social division
o f l a b o u r ; (2) a n a c c u m u l a t i o n r e g i m e , w h i c h c o m p r i s e s a m a c r o e c o -
n o m i c regime sustaining a structurally c o h e r e n t p a t t e r n of g r o w t h in cap-
italist p r o d u c t i o n a n d c o n s u m p t i o n ; (3) a m o d e of r e g u l a t i o n , d e f i n e d as
a n e n s e m b l e o f n o r m s , i n s t i t u t i o n s , o r g a n i z a t i o n a l f o r m s , social n e t w o r k s
a n d p a t t e r n s of c o n d u c t that sustain a n d 'guide' a given accumulation
r e g i m e ; (4) a m o d e of s o c i e t a l i z a t i o n , t h a t is, a p a t t e r n of i n s t i t u t i o n a l
i n t e g r a t i o n a n d social c o h e s i o n t h a t c o m p l e m e n t s t h e d o m i n a n t accu-
m u l a t i o n r e g i m e a n d its m o d e o f e c o n o m i c r e g u l a t i o n , t h e r e b y s e c u r i n g
t h e c o n d i t i o n s for its d o m i n a n c e in t h e w i d e r society; a n d (5) a social for-
m a t i o n c h a r a c t e r i z e d by a c o n t i n g e n t c o r r e s p o n d e n c e a m o n g all f o u r of
t h e p r e c e d i n g r e f e r e n t s . This s e c t i o n c o n s i d e r s F o r d i s m from t h e s e view-
p o i n t s ; in a d d i t i o n , s e c t i o n 4 e x p l o r e s its s p a t i o - t e m p o r a l fix, a sixth
perspective that crosscuts these five dimensions and exposes some of the
limitations of Atlantic Fordism as an accumulation regime a n d m o d e of
regulation.
As a distinctive type of labour process,Fordism c a n be c o n s i d e r e d ini-
tially as a specific p r o d u c t i o n p r o c e s s i n d e p e n d e n t of a n y w i d e r linkages.
I n this sense i t i n v o l v e s m a s s p r o d u c t i o n b a s e d o n m o v i n g a s s e m b l y - l i n e
techniques operated with the semi-skilled l a b o u r of t h e mass worker.
This d o e s n o t m e a n t h a t a n e n t e r p r i s e w h e r e m a s s p r o d u c t i o n i s d o m i -
n a n t m a y n o t also e m p l o y o t h e r l a b o u r p r o c e s s e s o r t y p e s o f w o r k e r
and/or be linked to t h e m within a given branch, region or wider eco-
n o m i c s p a c e . T h e k e y p o i n t i n s u c h cases i s t h a t m a s s p r o d u c t i o n w o u l d
be the main source of economic dynamism.
As a stable mode of macroeconomic growf/i. F o r d i s m in its strict, i d e a l -
typical sense involves a virtuous circle of growth based on mass produc-
t i o n , rising p r o d u c t i v i t y b a s e d o n e c o n o m i e s o f scale, rising i n c o m e s
l i n k e d t o p r o d u c t i v i t y , i n c r e a s e d m a s s d e m a n d d u e t o rising w a g e s ,
i n c r e a s e d profits b a s e d o n full u t i l i z a t i o n o f c a p a c i t y a n d i n c r e a s e d
investment in improved mass production equipment and techniques. Not
every branch of the economy must be dominated by Fordist production
t e c h n i q u e s for this m o d e o f g r o w t h t o b e realized: i t i s sufficient t h a t t h e
leading sectors are Fordist. I n d e e d , if t h e expansion of Fordist mass p r o -
duction is to find a mass market, there must be matching g r o w t h in the
p r o d u c t i o n o f c o m p l e m e n t a r y g o o d s ( s u c h a s oil, steel, electricity, r o a d s
 The Keynesian Welfare National State 57

a n d h o u s i n g ) a n d services (such a s r e t a i l i n g , a d v e r t i s i n g , c o n s u m e r c r e d i t
a n d t h e s e r v i c i n g o f c o n s u m e r d u r a b l e s ) t h a t will i n v o l v e a w i d e r a n g e
o f l a b o u r p r o c e s s e s , g o i n g well b e y o n d F o r d i s m a s defined a b o v e .
As a mode of economic regulation,Foidism c a n be c o n s i d e r e d in t e r m s
of five s t r u c t u r a l f o r m s of r e g u l a t i o n : t h e e n t e r p r i s e f o r m a n d m o d e s of
competition, t h e wage relation, t h e n a t u r e of m o n e t a r y emission and
credit relations, the form and functions of the state, and the m a n n e r of
its i n s e r t i o n i n t o i n t e r n a t i o n a l r e g i m e s ( B o y e r 1990). T h e t y p i c a l F o r d i s t
enterprise form involves the separation of ownership and control in large
corporations with a distinctive multidivisional, decentralized organiza-
tion s u b j e c t t o c e n t r a l c o n t r o l s ; a s e a r c h for g r o w t h b a s e d o n e c o n o m i e s
o f scale a n d m a r k e t s h a r e - i n c l u d i n g t h r o u g h m e r g e r s a n d a c q u i s i t i o n s
a s well a s i n t e r n a l e x p a n s i o n ; a n d c o s t - p l u s p r i c i n g strategies. T h e F o r d i s t
w a g e r e l a t i o n r e s t s o n t h e r e c o g n i t i o n b y big b u s i n e s s a s well a s t h e s t a t e
o f t h e l e g i t i m a c y o f r e s p o n s i b l e t r a d e u n i o n i s m a n d collective b a r g a i n -
ing; a n d b y r e s p o n s i b l e t r a d e u n i o n s (or, a t least, t r a d e u n i o n l e a d e r s ) o f
m a n a g e m e n t ' s r i g h t t o m a n a g e . I n this c o n t e x t w a g e s a r e i n d e x e d t o p r o -
d u c t i v i t y g r o w t h a n d retail p r i c e inflation. M o n e t a r y e m i s s i o n a n d c r e d i t
policies a r e o r i e n t e d t o s e c u r i n g effective a g g r e g a t e d e m a n d i n n a t i o n a l
e c o n o m i e s a n d socializing losses a n d d e b t s i n a n e x p a n s i o n a r y b u t m i l d l y
i n f l a t i o n a r y e n v i r o n m e n t . I n t h i s c o n t e x t t h e k e y w a g e b a r g a i n s will b e
s t r u c k i n t h e m a s s p r o d u c t i o n i n d u s t r i e s : t h e g o i n g r a t e will t h e n s p r e a d
through comparability claims among the employed and t h r o u g h the
i n d e x a t i o n o f w e l f a r e benefits, f i n a n c e d f r o m p r o g r e s s i v e t a x e s , for t h e
economically inactive. A n y tendencies towards u n d e r c o n s u m p t i o n owing
t o insufficient d e m a n d a n d / o r t o a w a g e - i n d u c e d profits s q u e e z e ^ c a n b e
offset p r o v i d e d t h a t w a g e s a n d p r o d u c t i v i t y i n t h e c o n s u m e r g o o d s s e c t o r
m o v e in a similar range. In the form of the K W N S , the state contributes
t o this d e l i c a t e b a l a n c e b y h e l p i n g t o i n t e g r a t e t h e c i r c u i t s o f t h e c a p i t a l
a n d c o n s u m e r g o o d s i n d u s t r i e s a n d b y m a n a g i n g t h e conflicts b e t w e e n
c a p i t a l a n d l a b o u r o v e r b o t h t h e i n d i v i d u a l a n d social w a g e s o t h a t t h e
virtuous circle of Fordist g r o w t h can be maintained. T h e expansion of
p u b l i c sector e m p l o y m e n t a n d c o l l e c t i v e c o n s u m p t i o n also p l a y e d a r o l e
h e r e (see b e l o w a n d c h a p t e r 4 ) . T h i s p a t t e r n d o e s n o t r e q u i r e a n e n d t o
dual labour m a r k e t s or non-unionized firms or sectors as long as t h e
g e n e r a l l e v e l o f m a s s d e m a n d rises i n line w i t h p r o d u c t i v i t y . I n s o f a r a s
they a r e directed at conditions in t h e e c o n o m i c a n d political space of
Atlantic Fordism, international monetary, trade, investment, energy and
security regimes serve primarily to sustain Fordist growth in national
economies under American hegemony and to p r o m o t e an orderly expan-
s i o n o f i n t e r n a t i o n a l t r a d e a n d i n v e s t m e n t i n t h e capitalist w o r l d m a r k e t .
As a general pattern of social organization (societalization), F o r d i s m
i n v o l v e s w o r k e r s ' d e p e n d e n c e o n a n i n d i v i d u a l a n d / o r social w a g e t o
58 The Keynesian Welfare National State

satisfy tlieir n e e d s f r o m c r a d l e t o grave; g r o w t h i n t h e c o n s u m p t i o n o f

s t a n d a r d i z e d , mass c o m m o d i t i e s i n n u c l e a r family h o u s e h o l d s a n d i n t h e
p r o v i s i o n o f s t a n d a r d i z e d , c o l l e c t i v e goods a n d services tiy t h e b u r e a u -
c r a t i c state; t h e l a t t e r ' s k e y r o l e i n m a n a g i n g t h e conflicts b i j t w e e n c a p i t a l
a n d l a b o u r a n d t h e social t e n s i o n s t h a t result f r o m t h e d o m i n a n c e o f
F o r d i s m , b u r e a u c r a t i s m , collective c o n s u m p t i o n , a n d s o forth; a n d t h e
i m p o r t a n t r o l e o f t h e city a n d s u b u r b s a s sites for F o r d i s t c o n s u m p t i o n
p a t t e r n s o r lifestyle. T h u s w e h a v e , i n s h o r t , a n u r b a n - i n d u s t r i a l , ' m i d d l e -
m a s s ' , w a g e - e a r n i n g society.
I n b r o a d terms, t h e d y n a m i c o f g l o b a l e x p a n s i o n after 1945 w a s b a s e d
on the continuing spread of Fordism as a labour process from the United
States (where it was already en route to dominance in the interwar
period) to the other Atlantic Fordist economies and, in parallel, on the
c o n s o l i d a t i o n o f its m a s s p r o d u c t i o n a n d m a s s c o n s u m p t i o n d y n a m i c i n
this e x p a n d e d s p a c e . T h i s held m o s t n o t a b l y for t h e big e c o n o m i e s o f
Britain, France and Germany.^ Their national economies acquired a
m a i n l y F o r d i s t d y n a m i c w i t h g r o w t h b a s e d largely o n e x p a n d i n g h o m e
m a r k e t s . S m a l l , o p e n e c o n o m i e s (such a s A u s t r i a , D e n m a r k , N e w
Z e a l a n d , S w e d e n , C a n a d a a n d Australia^) c o u l d also m o v e t o w a r d s a
m a s s c o n s u m p t i o n society with a K W N S , b e c a u s e t h e y o c c u p i e d k e y
n i c h e s i n a n i n t e r n a t i o n a l division o f l a b o u r w h o s e t r a n s a t l a n t i c d y n a m i c
w a s decisively s h a p e d b y t h e l e a d i n g F o r d i s t s e c t o r s i n t h e l e a d i n g
e c o n o m i e s . Tliis e n a b l e d t h e m t o f i n a n c e rising s t a n d a r d s o f m a s s con-
s u m p t i o n a n d e x p a n d i n g collective c o n s u m p t i o n b a s e d o n g r o w i n g
e x p o r t d e m a n d a n d profits i n n o n - F o r d i s t s e c t o r s (small b a t c h c a p i t a l
g o o d s , l u x u r y c o n s u m e r g o o d s , a g r i c u l t u r a l g o o d s , r a w m a t e r i a l s ) a s well
as the expansion of any dynamic Fordist sectors they possessed. These
s m a l l o p e n e c o n o m i e s also e s t a b l i s h e d a p o l i t i c a l a s well a s a n e c o n o m i c
logic a p p r o p r i a t e t o t h e i r d i s t i n c t i v e v a r i a n t s o f K W N S (see b e l o w ) . I n
short, w h e r e a n e c o n o m y t h a t w a s i n c l u d e d i n A t l a n t i c F o r d i s m d i d n o t
itself h a v e a p r e d o m i n a n t l y F o r d i s t s t r u c t u r e a n d logic, it n e e d e d a m o d e
o f g r o w t h t h a t c o m p l e m e n t e d t h e d o m i n a n t F o r d i s t logic i f i t w a s t o
s h a r e in, r a t h e r t h a n b e e x c l u d e d from, t h e l a t t e r ' s o v e r a l l g r o w t h
dynamic. The structural coupling and co-evolution of production regimes
and modes of regulation (including the K W N S ) in these ways established
a path-dependent (but not deterministic) structural coherence that
s h a p e d t h e f o r m s o f crisis a n d t h e p r o s p e c t s for c r i s i s - m a n a g e m e n t .

2. The KWNS

T h e f o r m a n d functions of the capitalist type of state in A t l a n t i c Fordism

a r e usefully d e s c r i b e d i n t e r m s o f t h e K e y n e s i a n w e l f a r e n a t i o n a l s t a t e .
 The Keynesian Welfare National State 59

J ^ \ Q 2.1 The Keynesian welfare national state (KWNS)

distinctive set Distinctive set Primary scale Primary means

of economic of social (if any) to compensate
policies policies market failure

Full e m p l o y m e n t , Collective Relative primacy M a r k e t and state

demand bargaining of n a t i o n a l form a 'mixed
management, and state help scale in economy'. State
provision of generalize economic and is e x p e c t e d to
infrastructure t o n o r m s of mass social policy- c o m p e n s a t e for
support m a s s consumption. making with m a r k e t failures
production a n d E x p a n s i o n of local as well as
consumption w e l f a r e rights central delivery

Keynesian Welfare National State

E a c h t e r m in this f o u r f o l d c o n s t r u c t h i g h l i g h t s distinctive f e a t u r e s of t h e
K W N S a n d i g n o r e s a n y generic p r o p e r t i e s a n d f u n c t i o n s i t m a y s h a r e
with o t h e r types of capitalist state. Several of these generic properties, as
well as t h e basis of t h e f o u r f o l d s c h e m a for assessing r e l e v a n t d i s t i n c t i v e
features, w e r e p r e s e n t e d in c h a p t e r 1. I can therefore m o v e directly to
p r e s e n t t h e K W N S i n s t y l i z e d t e r m s o n all f o u r d i m e n s i o n s b e f o r e c o n -
s i d e r i n g h o w t o d i s t i n g u i s h its p o s s i b l e v a r i a n t f o r m s ( s e e t a b l e 2.1).
First, i n p r o m o t i n g t h e c o n d i t i o n s for t h e profitability o f p r i v a t e
c a p i t a l b y h e l p i n g t o p r o v i d e t h e e x t e r n a l a n d i n t e r n a l c o n d i t i o n s for
capital a c c u m u l a t i o n , t h e K W N S w a s Keynesian i n s o f a r a s i t a i m e d t o
s e c u r e full e m p l o y m e n t in w h a t w a s t r e a t e d as a relatively c l o s e d
national economy and to do so primarily through demand-side manage-
m e n t . Tlie K W N S a t t e m p t e d t o adjust effective d e m a n d t o t h e s u p p l y -
d r i v e n n e e d s o f F o r d i s t m a s s p r o d u c t i o n w i t h its d e p e n d e n c e o n
e c o n o m i e s of scale a n d full u t i l i z a t i o n of r e l a t i v e l y inflexible m e a n s of
production. Likewise, in reproducing labour-power as a fictitious c o m -
m o d i t y a n d h e l p i n g t o s e c u r e t h e c o n d i t i o n s for s o c i a l r e p r o d u c t i o n , t h e
K W N S w a s o r i e n t e d t o welfare i n s o f a r a s i t t r i e d t o r e g u l a t e c o l l e c t i v e
b a r g a i n i n g w i t h i n limits c o n s i s t e n t w i t h full e m p l o y m e n t levels o f
growth; to generalize n o r m s of mass consumption beyond male workers
e a r n i n g a f a m i l y w a g e i n F o r d i s t s e c t o r s , s o t h a t all full n a t i o n a l citizens
a n d t h e i r family d e p e n d a n t s , i f a n y , m i g h t s h a r e t h e fruits o f e c o n o m i c
g r o w t h ( a n d t h e r e b y c o n t r i b u t e t o effective d o m e s t i c d e m a n d ) ; a n d t o
p r o m o t e forms of collective c o n s u m p t i o n favourable to t h e F o r d i s t m o d e
of g r o w t h . This is reflected in indicators such as increasing r e p l a c e m e n t
 60 The Keynesian Welfare National State

r a t e s for u n e m p l o y m e n t benefit, sickness benefit a n d p e n s i o n s d u r i n g t h e

heyday of the K W N S (Huber and Stephens 2001: 207-8; Marglin and
S c h o r 1990). B e r t h i l O h l i n , a S w e d i s h e c o n o m i s t , a n t i c i p a t e d this g e n e r a l
c h a r a c t e r i s t i c o f F o r d i s m i n his a r g u m e n t t h a t t h e S w e d i s h m o d e l n a t i o n -
alized c o n s u m p t i o n , n o t t h e m e a n s o f p r o d u c t i o n (1938: 5). M o r e g e n e r -
ally, t h e e c o n o m i c a n d social p o l i c i e s o f t h e K W N S w e r e closely l i n k e d
t o a n e x p a n d i n g definition a n d p r o g r e s s i v e i n s t i t u t i o n a l i z a t i o n o f e c o -
n o m i c a n d social r i g h t s a t t a c h e d d i r e c t l y o r i n d i r e c t l y t o c i t i z e n s h i p o f a
n a t i o n a l t e r r i t o r i a l state - w h e t h e r this c i t i z e n s h i p w a s b a s e d o n d e s c e n t ,
a c c u l t u r a t i o n , n a t u r a l i z a t i o n , p o l i t i c a l tests o r s o m e o t h e r c r i t e r i o n ( o n
d i f f e r e n t t y p e s o f n a t i o n a l s t a t e , a s o p p o s e d t o n a t i o n - s t a t e , see b e l o w
a n d c h a p t e r 5).
T h e K W N S w a s national i n s o f a r a s t h e n a t i o n a l t e r r i t o r i a l s t a t e
a s s u m e d t h e p r i m a r y r e s p o n s i b i l i t y for d e v e l o p i n g a n d g u i d i n g
K e y n e s i a n w e l f a r e policies o n d i f f e r e n t scales. T h i s reflects t h e m o r e
general importance of national economies and national states in the
' t h i r t y g l o r i o u s y e a r s ' o f p o s t w a r g r o w t h . F o r t h e n a t i o n a l n o t only d o m i -
n a t e d t h e circuits o f A t l a n t i c F o r d i s m , b u t also t h e so-called m e r c a n t i l i s t
r e g i m e s o r t r a d i n g n a t i o n s o f E a s t A s i a a n d t h e i m p o r t - s u b s t i t u t i o n accu-
mulation strategies of many Latin A m e r i c a n economies. T h e various
postwar international regimes linked to Atlantic Fordism were mainly
i n t e n d e d t o r e s c u e E u r o p e a n n a t i o n a l states, t o r e s t o r e s t a b i l i t y t o
n a t i o n a l e c o n o m i e s , t o c r e a t e t h e c o n d i t i o n s for d o m e s t i c e c o n o m i c
growth, to promote international cooperation to underwrite the smooth
o p e r a t i o n o f n a t i o n a l e c o n o m i e s a n d , w h e r e possible, t o s e c u r e a n d r e i n -
force t h e i r c o m p l e m e n t a r i t y r a t h e r t h a n t o a b o l i s h t h e s e e c o n o m i e s o r
integrate t h e m i n t o s o m e superimperialist system. Likewise, local a n d
r e g i o n a l s t a t e s t e n d e d t o act m a i n l y a s r e l a y s f o r policies f r a m e d n a t i o n -
ally, m o d i f y i n g t h e m i n t h e light o f l o c a l c o n d i t i o n s a n d t h e b a l a n c e o f
f o r c e s b u t n o t i n i t i a t i n g r a d i c a l l y d i f f e r e n t policies. I n p a r t i c u l a r , e c o -
n o m i c a n d social p o l i c i e s a t t h e u r b a n a n d r e g i o n a l l e v e l w e r e o r c h e s -
trated in t o p - d o w n fashion by the national state and primarily concerned
w i t h e q u a l i z i n g e c o n o m i c a n d social c o n d i t i o n s w i t h i n e a c h o f t h e s e
national economies. This institutional a n d discursive 'naturalization' of
t h e n a t i o n a l e c o n o m y a n d n a t i o n a l s t a t e was l i n k e d (within A t l a n t i c
Fordism) to the relative closure of postwar economies undergoing recon-
s t r u c t i o n o n t h e basis o f m a s s p r o d u c t i o n a n d m a s s c o n s u m p t i o n . T h i s
period m a r k s the highest stage of the national state f o r m in E u r o p e as
a n e c o n o m i c , p o l i t i c a l a n d social p o w e r c o n t a i n e r , w i t h its a p o g e e o c c u r -
r i n g a t t h e e n d o f t h e 1960s after t h e success o f t h e M a r s h a l l P l a n a n d
the development of the E u r o p e a n C o m m u n i t y in 1945-68 (Milward et
al. 1993). I n s e v e r a l E a s t A s i a n e c o n o m i e s , a l t h o u g h t h e y c a n n o t b e
d e s c r i b e d a s F o r d i s t , t h e s a m e effect w a s a c h i e v e d t h r o u g h ' n a t i o n a l
 The Keynesian Welfare National State 61

security' d i s c o u r s e s t h a t c o n n e c t e d t h e n a t i o n ' s i n t e r n a l a n d / o r e x t e r n a l
security t o close c o n t r o l o v e r t h e d o m e s t i c e c o n o m y .
A n d , f o u r t h , t h e K W N S w a s statist i n s o f a r a s s t a t e i n s t i t u t i o n s ( o n dif-
ferent levels) w e r e t h e chief c o m p l e m e n t t o m a r k e t forces i n t h e F o r d i s t
a c c u m u l a t i o n r e g i m e a n d also h a d a d o m i n a n t r o l e i n t h e i n s t i t u t i o n s o f
civil society. T h u s i t w a s t h e ' m i x e d e c o n o m y ' t h a t p r o v i d e d t h e c e n t r e
o f g r a v i t y for e c o n o m i c , social a n d p o l i t i c a l r e g u l a t i o n . T o t h e e x t e n t t h a t
m a r k e t s failed t o d e l i v e r t h e e x p e c t e d v a l u e s o f e c o n o m i c g r o w t h , b a l -
a n c e d r e g i o n a l d e v e l o p m e n t i n s i d e n a t i o n a l b o r d e r s , full e m p l o y m e n t ,
low inflation, a s u s t a i n a b l e t r a d e b a l a n c e , a n d a socially j u s t d i s t r i b u t i o n
o f w e a l t h a n d i n c o m e , t h e s t a t e w a s called o n t o c o m p e n s a t e for t h e s e
failures a n d t o g e n e r a l i z e p r o s p e r i t y t o all its citizens.

Variant forms of KWNS

Since e a c h o f i t s four d i s t i n c t i v e f e a t u r e s c a n b e r e a l i z e d i n d i f f e r e n t
w a y s , o n e w o u l d n o t e x p e c t t o find a p u r e f o r m o f K W N S . B u t this d o e s
n o t e x c l u d e m o r e o r less distinct v a r i a t i o n s o n t h e b a s i c stylized m o d e l .
I n d e e d , i n s t i t u t i o n a l e c o n o m i s t s , s o c i a l policy specialists a n d c o m p a r a -
tive p o l i t i c a l scientists h a v e s h o w n r e a l t a x o n o m i c z e a l i n t h e i r efforts t o
identify historically significant, e m p i r i c a l l y verifiable t y p e s a n d s u b t y p e s
o f c a p i t a l i s m , w e l f a r e s t a t e a n d political r e g i m e i n t h e p o s t w a r p e r i o d .
Some of the most extensive research in these regards has been under-
t a k e n o n w e l f a r e r e g i m e s . A l t h o u g h t h i s l a t t e r c o n c e p t i s less i n c l u s i v e
t h a n t h e K W N S , t h e effort d e v o t e d t o t y p o l o g i z i n g illustrates s o m e o f
the general p r o b l e m s involved in such endeavours. While some authors
simply u s e t h e g e n e r i c t e r m ' E u r o p e a n social m o d e l ' t o d e s c r i b e t h e dis-
tinctive f e a t u r e s o f E u r o p e a n w e l f a r e r e g i m e s (for e x a m p l e , G r a h l a n d
T e a g u e 1997; P a l i e r a n d Sykes 2 0 0 0 ) , o t h e r s h a v e i n v e s t e d m u c h t h e o -
retical a n d e m p i r i c a l effort i n identifying d i f f e r e n t w e l f a r e r e g i m e s
within E u r o p e a n d e l s e w h e r e . T h e m o s t influential o f t h e r e s u l t i n g
typologies was developed by E s p i n g - A n d e r s e n (1985,1990). He derived
his initial t y p o l o g y f r o m s i m p l e q u a n t i t a t i v e c r i t e r i a c o n c e r n i n g t h e
decommodification of labour-power in eighteen O E C D countries in the
postwar p e r i o d a n d t h e n , on t h e basis of their aggregate scores, simply
d i v i d e d t h e s e e i g h t e e n c o u n t r i e s i n t o t h r e e g r o u p s o f six. H e t h e n s t u d i e d
t h e e c o n o m i c , social a n d p o l i t i c a l h i s t o r i e s o f t h e t h r e e g r o u p s a n d f o u n d
t h e i r g e n e a l o g i e s sufficiently d i f f e r e n t t o justify t h e c l a i m t h a t t h e r e
w e r e t h r e e distinct clusters of welfare regime and that they coincided
w i t h t h o s e h e h a d a l r e a d y identified. H e h a s s i n c e a d d e d a S o u t h e r n
E u r o p e a n m o d e l a n d suggested that the J a p a n e s e case is a h y b r i d of
liberal a n d c o n s e r v a t i v e w e l f a r e r e g i m e s ( o n J a p a n , see E s p i n g -
A n d e r s e n 1997; for t h e f o u r m a i n t y p e s , see b o x 2.1).
62 The Keynesian Welfare National State

Box 2.1 Esping-Andersen^s fourfold fypohgy ofwelfaie regimes

T h e liberal type h a s t h e l o w e s t nl v.leeoiTini>Kliiii.-,iiiori of

l a b o u r - p o w e r . Il re.sis o n t h r e e m a i n p i J M i - , : a m i n i n i a l r o l e L"r t h e
s t a t e ( i n c l u d i n g a r e s i d u a l r o l e hi I ' l o v i d n i u s o c i a l w c i l a n . ) ; an
emphasis on the individualization rather than socialization of (he
r i s k s r e l a t e d t o l a b o u r m a r k e t p a r t i c i p a t i o n ; a n d a p r e f e r e n c e for
m a r k e t s o l u t i o n s to e c o n o m i c a n d ^^oci, I p i o b i c i n s . These t h r e e
p i l l a r s a r e r e f l e c t e d i n m o i e specitn. " L A U N V S . P K a n — i c s l c d assis-
tance, m o d e s t universal transfers, or niarkct-bascd social-insurance
p l a n s ; benefits for l o w - i n c o m e , u s u a l l y w o r k i n g - c l a s s , s t a t e d e p e n -
d a n t s : strict, s t i g m a t i z i n g w e l f a r e e l i g i b i l i u r u l e s : a n d s t a l e e n c o u r -
a g e m e n t lo t h e d e v e l o p m e n t of m a i k^. i- in provldlnsi foi I c o n o m i c
a n d sociiil r e p r o d u c t i o n ,
Tlie conserviiliue t y p e h:i.- ,ni i n i c r n i ^ d i . i l c ICNCI ot i l e c o i n -
modification (by definition) a n d is said to have t h r e e m a i n traits: the
k e y r o l e a t t r i b u t e d t o familiali->m a n d c o i i o r a l i \ i s m i n C O I N P L N S . u
i n g m a r k e t f a i l u r e , a c o m m i l n i l . iii l o niaiiii iininu s i . n u s d i l l c i i . n l i . I -
t i o n , a n d t h e p o o l i n g of r i s k s w ilhin pLiriiciiiar o e c i i p a t i o n . I L g i o i i | I -
a n d / o r s o c i a l s t r a t a r a t h e r t h a n o n a u n i v e r s a l b a s i s a c r o s s all
n a t i o n a l c i t i z c n . s . W e l f a r c r i i ' h l ' ^ PI i\ ILL-L'.e t h e I r a d i l i o n a l t a i n i h form,
a r e a l t a c h c d to class a n d stiiiiis ml lie i tli.in i i a i i o n a l c i l i / e i i s h i p . a n d
l i a \ c :i InniK-d 11.DISII i h u l i x c inijiacl K C J U S C I I I C \ ivllcci rntlicr lli.m
r e d u c e existing class a n d s t a t u - i i i c i | u , d i i i c s . ( o i i s c i v a t n e W L I I I U L
r e g u u c s also a l l o c a t e a k e y r o k t o t h e \ o l i i n [ . i r \ s e c t o r .
T h e iocial democratic ULMIIIO II:IS the liiglK-st L'\I.l o l
d e c o m m o d i f i c a t i o n on E s j n m : . \ n d c i s ^ n " S c h o s e n N I L - a s i u e s li i-.
m o s t s t r o n g l y d e v e l o p e d in the N.-.idic CLOI-OIUK-S. IS l i n k e d U) :i
s t r o n g l a b o u r m o v e m e n t , a n d i s s u o n g l \ c o n i n i i i i c d l o social i w l i s
I r i b u t i o n . I t a c c e p t s a n e x t e n d e d r o l e for s t a t e a c t i o n i n c o m p e n -
s a t i n g for m a r k e t failures, socializes ,i b i o . i d i . i n g c o f r i s k s a n d
offers g e n e r o u s levels o f u n i v e r s a l benefits a n d r e d i s t r i b u t i o n .
T h u s i t d i s p l a y s u n i v e r s a l I v n c l i i s b.IS^d o n t h e n o i i o n o l t h e
' w o r k s o c i e t y ' (ArheilsgeseliM liuli, MJI ICU sulailalc or w a g e c a i iiiiii;
s o c i e t y ) . It is a l s o c o m m i t t e d l o p ' i o \ u l i i i ' linjli ;MH.I r i s i n L ' b , - i i e l i l s
p r e m i s e d o n full C m p l o y m c n i ; . i i d l i e d t o o \ c r a l l e c o n o m i c m o w i l i ,
i t e x t e n d s d e c o m m o d i f y i n g i n c . i s i i i v s l o the m i d d l e c l a s s , t h e r e b y
l o c k i n g t h e m i n t o s u p p o r t for t h e s l a t e : a n d i t e n a b l e s all c i t i z e n s
to integrate themselves into the l a b o u r n n n k c t .
T h e /fl7?7;7/W or S o u t h e r r | - . i i i o p . , u i w e l l ; t i e r e g i m e is a residual
w e l f a r e s t a t e . It relics on t h e c M ^ i i d c d lamiK w i t h a m . i l c JMCad-
 The Keynesian Welfare National State 63

^vlnm'l liM t ' c i i i i i i i n i d i i L i si'ci.il r u p n u l i i f l i i i i i in il.i I.R-L-ot n i a i k e i

c o n t i n g e n c i e s . It t h e r e b y p r o v i d e s a d i f f e r e n t f o r m of intexraetfiate
(.L-cominotliiicalion.

E s p i n g - A n d e r s e n ' s typology was mainly b a s e d on just o n e of t h e four

dimensions central to t h e definition of t h e K W N S - and, i n d e e d , on just
o n e aspect of that d i m e n s i o n . This was the state's role in decommodify-
ing m e n ' s w a g e d l a b o u r . T h u s , e v e n for t h e s t a t e ' s r o l e i n r e p r o d u c i n g
labour-power as a fictitious commodity, E s p i n g - A n d e r s e n did n o t con-
sider t h e s t a t e ' s e q u a l l y i m p o r t a n t r o l e s i n r e l a t i o n t o w o m e n ' s w a g e d
a n d u n w a g e d labour. N o r did he e x a m i n e o t h e r dimensions of the state's
involvement in social r e p r o d u c t i o n , such as e d u c a t i o n , health or housing
- a l t h o u g h his l a t e r w o r k h a s e x t e n d e d i n t o t h e s e a r e a s . B u t h e d i d g i v e
a secondary role to a related aspect of the f o u r t h dimension, n a m e l y , t h e
g o v e r n a n c e m e c h a n i s m s u s e d i n t h e social r e p r o d u c t i o n o f l a b o u r - p o w e r .
I n p a r t i c u l a r , i n a d d i t i o n t o l i b e r a l m a r k e t forces, h e r e f e r r e d t o c o r p o -
rativist i n s u r a n c e s c h e m e s , f o r m a l l y r a t i o n a l s t a t e r e d i s t r i b u t i o n a n d , i n
l a t e r w o r k , c l i e n t e l i s m a n d t h e family. H i s t y p o l o g y w a s a l s o initially
d e v e l o p e d t o e x p l o r e h o w d i s t i n c t i v e n a t i o n a l b a l a n c e s o f social forces
a t t h e f o u n d i n g m o m e n t s o f w e l f a r e r e g i m e s led t o d i f f e r e n t t y p e s o f
w e l f a r e r e g i m e a n d t h e n e x e r c i s e d c o n t i n u i n g p a t h - d e p e n d e n t effects o n
their subsequent d e v e l o p m e n t .
M o s t s u b s e q u e n t t a x o n o m i e s based on E s p i n g - A n d e r s e n ' s influential
p i o n e e r i n g w o r k c o m p r i s e f o u r t o six t y p e s o f w e l f a r e r e g i m e s . T h e s e
a r e t h e m a r k e t liberal (sometimes subdivided i n t o N o r t h Atlantic
a n d A n t i p o d e a n v a r i a n t s ) ; t h e social d e m o c r a t i c ; t h e c o n s e r v a t i v e -
corporativist (or Christian democratic); the M e d i t e r r a n e a n (or Southern
E u r o p e a n o r L a t i n R i m ) ; a n d , for s o m e b u t n o t all, t h e C o n f u c i a n (or
E a s t A s i a n ) r e g i m e . " T h i s e x p a n d e d t y p o l o g y h a s b e e n u s e d for m a n y
p u r p o s e s b e s i d e s t h o s e for w h i c h it w a s first d e v e l o p e d , b u t it is still
s h a p e d b y E s p i n g - A n d e r s e n ' s i n i t i a l r e s e a r c h q u e s t i o n . This m a k e s i t less
r e l e v a n t for s h o w i n g h o w d i f f e r e n t w e l f a r e r e g i m e s h a v e c o m e t o b e i n t e -
grated into b r o a d e r m o d e s of e c o n o m i c regulation and/or distinctive
'historical b l o c s ' (i.e., m u t u a l l y i m p l i c a t e d , s t r u c t u r a l l y c o u p l e d a n d
h i s t o r i c a l l y c o - e v o l v i n g e n s e m b l e s o f e c o n o m i c , political a n d s o c i o c u l -
t u r a l r e l a t i o n s , t h e c o n s t r u c t i o n o f w h i c h d e p e n d s o n t h e activities o f
organic intellectuals a n d collective projects as well as on t h e gradual a n d
e m e r g e n t c o - a d a p t a t i o n o f i n s t i t u t i o n s a n d c o n d u c t ) . I t m a y a l s o b e less
u s e f u l for a n a l y s i n g t h e r e c e n t p o l i t i c s of retrenchment (as o p p o s e d to
expansion) t h a t h a s e m e r g e d i n r e s p o n s e t o crises i n a n d / o r o f w e l f a r e
r e g i m e s ( P i e r s o n 1995; b u t see also H u b e r a n d S t e p h e n s 2 0 0 1 ) .
64 The Keynesian Welfare National State

This s u g g e s t s t h a t a n y fresh t y p o l o g y s h o u l d n o t o n l y i n c l u d e cases

m i s s e d o u t f r o m E s p i n g - A n d e r s e n ' s o r i g i n a l s t u d y b u t also reflect t h e
m o s t incisive criticisms o f its t h e o r e t i c a l a n d empirical f o u n d a t i o n s ' a n d
integrate the other dimensions of the K W N S . Particular attention should
be p a i d to m o d e s of e c o n o m i c i n t e r v e n t i o n - p r e v i o u s l y i g n o r e d - a n d
m o d e s o f g o v e r n a n c e - p r e v i o u s l y t r e a t e d r a t h e r p e r f u n c t o r i l y . This
w o u l d p e r m i t m o r e s o p h i s t i c a t e d analysis o f t h e p a t h - d e p e n d e n t struc-
tural couphng of m o d e s of economic growth, m o d e s of regulation and
t h e n a t u r e o f welfare r e g i m e s ( s e e n e x t s u b s e c t i o n ) . I n t e r m s o f f o r m s
o f e c o n o m i c a n d social i n t e r v e n t i o n , for e x a m p l e , o n e m i g h t d i s t i n g u i s h
b e t w e e n liberal social m a r k e t r e g i m e s ; t r i p a r t i t e social d e m o c r a t i c
r e g i m e s ; c o n s e r v a t i v e - c o r p o r a t i v i s t r e g i m e s in w h i c h social w e l f a r e is
p a r t l y o r g a n i z e d o n o c c u p a t i o n a l o r s t a t u s lines a n d t h e r e f o r e t e n d s t o
c o n s e r v e r a t h e r t h a n w e a k e n e c o n o m i c a n d social i n e q u a l i t i e s ; dirigiste
r e g i m e s w i t h s t r o n g states a n d a r e l a t i v e l y f r a g m e n t e d l a b o u r force;
r e g u l a t o r y states t h a t p r o t e c t t h e w o r k f o r c e t h r o u g h t h e i r s u p p o r t for
m a n d a t o r y collective b a r g a i n i n g a n d l a b o u r l e g i s l a t i o n r a t h e r t h a n
t h r o u g h a n e x t e n d e d u n i v e r s a l w e l f a r e s t a t e ; a n d m o r e clientelist m o d e s
o f e c o n o m i c a n d social i n t e r v e n t i o n . T h e s e w o u l d c o r r e s p o n d t o t h e
N o r t h A t l a n t i c Fordist, N o r d i c , c o r p o r a t i s t - c o n s e r v a t i v e , F r e n c h ,
A n t i p o d e a n a n d S o u t h e r n E u r o p e a n w e l f a r e r e g i m e s respectively.
S e v e r a l o t h e r m o d e l s w o u l d b e n e e d e d for cases b e y o n d t h e circuits o f
A t l a n t i c F o r d i s m , s u c h a s E a s t A s i a n o r L a t i n A m e r i c a n societies.
Likewise, in terms of governance, o n e m i g h t distinguish b e t w e e n a
liberal m i x e d e c o n o m y m o d e l t h a t p r i v i l e g e s m a r k e t forces w i t h a r e s i d -
ual c o m p e n s a t o r y role for the state; a negotiated e c o n o m y m o d e l t h a t
r e s t s o n c o n c e r t a t i o n b e t w e e n social p a r t n e r s w i t h b a c k u p f r o m t h e s t a t e
a s r e q u i r e d ; a statist m o d e l w h e r e t h e s t a t e defines a n d r e g u l a t e s t h e
o b l i g a t i o n s of w o r k e r s a n d e m p l o y e r s as well as t h e activities of m a r k e t ,
not-for-profit a n d civic w e l f a r e o r g a n i z a t i o n s ; a n d t h e familial m o d e l i n
which t h e e x t e n d e d family a n d p a t e r n a l i s t a n d / o r 'familialisf o r g a n i z a -
tions have key roles in redistribution. These types correspond to four
w a y s o f g o v e r n i n g t h e division o f l a b o u r i n capitalist f o r m a t i o n s ( s e e
chapter 6). Liberalism corresponds to t h e principle of free exchange
a m o n g owners of commodities - with no distinction being m a d e in prin-
ciple b e t w e e n o w n e r s o f l a b o u r - p o w e r a n d o w n e r s o f o t h e r s o - c a l l e d
factors of p r o d u c t i o n . T h e n e g o t i a t e d e c o n o m y m o d e l is linked to a
R i c a r d i a n a c c o u n t o f capitalist class r e l a t i o n s , f o c u s i n g o n r e t u r n s t o
'factors of p r o d u c t i o n ' from potentially positive-sum c o o p e r a t i o n and
on issues of distribution, r a t h e r than a Marxist account that focuses on
t h e i n h e r e n t l y a n t a g o n i s t i c class r e l a t i o n s i n p r o d u c t i o n c o n s i d e r e d a s a
v a l o r i z a t i o n p r o c e s s . C o n s e r v a t i v e - c o r p o r a t i v i s t m o d e l s rest m t u r n on a
f u n c t i o n a l i s t a p p r o a c h to t h e division of l a b o u r - w i t h d i f f e r e n t f u n c t i o n s
 The Keynesian Welfare National State 65

or roles being considered in estate-like, corporativist, or organicist terms

a n d t h e s t a t e b e i n g c h a r g e d w i t h o v e r a l l r e s p o n s i b i l i t y for o r g a n i z i n g t h e
c o n d i t i o n s for s e l f - o r g a n i z a t i o n a n d s e c u r i n g o v e r a l l social c o h e s i o n .
A n d t h e familial m o d e l i s l i n k e d t o a s u b s i d i a r i t a r i a n a p p r o a c h t o col-
lective social r e s p o n s i b i l i t i e s w i t h i n a t r i n i t a r i a n ' m a r k e t - s t a t e - c i v i l
society' view o f m o d e r n societies.
T h e p o l i t i c a l e c o n o m y o f scale i s less g e r m a n e t o E s p i n g - A n d e r s e n ' s
t y p o l o g y b e c a u s e , d u r i n g t h e t i m e p e r i o d c o v e r e d b y his r e s e a r c h , h i s
cases w e r e all m a r k e d b y t h e p r i m a c y o f t h e n a t i o n a l scale. E v e n h e r e ,
policy d y n a m i c s a n d t h e s c o p e for r a d i c a l r e f o r m differ a c c o r d i n g t o t h e
unitary, f e d e r a l o r s u b s i d i a r i t a r i a n f o r m a n d o p e r a t i o n o f t h e n a t i o n a l
state. T h e i s s u e o f scale i s also w o r t h i n c o r p o r a t i n g t o f a c i l i t a t e c o m -
parisons with earlier and later periods. On the o n e hand, the earlier
period merits a t t e n t i o n because it is particularly relevant to t h e origins
and d e v e l o p m e n t of welfare regimes. Local state capacities a n d t h e forms
o f d o m e s t i c p o l i t i c s significantly affected t h e b a l a n c e o f e c o n o m i c a n d
political forces d u r i n g the f o r m a t i v e period of welfare regimes. F o r
example, the conservative-corporativist and Southern E u r o p e a n regimes
t e n d t o b e a s s o c i a t e d w i t h s t r o n g localist a n d / o r r e g i o n a l i s t t e n d e n c i e s ;
w h e r e a s t h e m o r e u n i v e r s a l i s t , social d e m o c r a t i c r e g i m e s t e n d t o b e
linked with m o r e centralized national governments. O n the o t h e r h a n d ,
t h e l a t e r p e r i o d i s significant b e c a u s e t h e c o n t i n u i n g d i v e r s i t y o f c o n -
t e m p o r a r y welfare regimes at the national scale is reflected in t h e pursuit
o f different p r o j e c t s a n d s t r a t e g i e s t o p r o m o t e e c o n o m i c i n t e g r a t i o n a n d
b u i l d a S o c i a l E u r o p e . N A F T A h a s l i k e w i s e c r e a t e d p r o b l e m s for
C a n a d a and Mexico - albeit through the economic domination of key
U S c a p i t a l s a n d t h e s h e e r ecological d o m i n a n c e o f t h e U S e c o n o m y m o r e
generally rather t h a n through the actions of an emerging supranational
p o l i t i c a l r e g i m e . S o m e issues r a i s e d b y E U e c o n o m i c a n d social p o l i c i e s
are examined in chapter 5.
M o r e concrete-complex analyses could consider secondary variations
on what, from the regulationist- and state-theoretical perspective
adopted here, are the four key features of the K W N S . These m a y include
t h e i r i n t e r n a l a r t i c u l a t i o n , social bases, g e n d e r e d inflection, ' s e x u a l i z e d '
a n d ' r a c i a l i z e d ' c h a r a c t e r , d e g r e e o f family-friendliness, g e n e r a t i o n a l b i a s
(for e x a m p l e , t o c h i l d r e n , w o r k i n g adults, o r pensioners'"), d i s t i n c t i v e
political p r o j e c t s a n d a s s o c i a t e d h e g e m o n i c projects.^ T o t a k e o n e
e x a m p l e , t h e r e i s n o w a rich l i t e r a t u r e o n t h e g e n d e r e d d i m e n s i o n s , i f
not inherently patriarchal nature, of welfare regimes. This has revealed
an important contrast b e t w e e n male-breadwinner a n d individual wage-
e a r n e r t y p e s . T h e f o r m e r a s s u m e s a g e n d e r e d division o f l a b o u r ,
prioritizes the e m p l o y m e n t opportunities and status of m e n as m a l e
b r e a d w i n n e r , t r e a t s t h e family a s t h e u n i t o f i n c o m e t r a n s f e r s a n d w e l f a r e
66 The Keynesian Welfare National State

benefits, a d o p t s j o i n t t a x a t i o n o f s p o u s e s a n d gives l i u s b a n d s a n d wives

different riglits. T h e latter t e n d s t o b e n e u t r a l r e g a r | l i n g t h e g e n d e r e d
division of labour, or even p r o m o t e s equality of opportunity, treats
e m p l o y m e n t a s t h e b a s i s f o r w e l f a r e benefits i n a ' w o r k s o c i e t y ' , g r a n t s
u n i f o r m e n t i t l e m e n t s o n t h e basis o f e m p l o y m e n t r e c o r d , c i t i z e n s h i p o r
residence rather than discriminating on the grounds of gender or marital
status, a n d assesses t a x e s o n i n d i v i d u a l s r a t h e r t h a n h o u s e h o l d s ( s e e , for
e x a m p l e , B u s s e m a k e r a n d v a n K e r s b e r g e n 1994; J e n s o n 1997; L e w i s
1992; S a i n s b u r y 1996; Siim 2 0 0 0 ) .
I t i s q u i t e a p p r o p r i a t e t o d e v e l o p d i f f e r e n t t y p o l o g i e s f o r different
purposes. M u c h empirical research has tended to confirm the relevance
o f t h e t h r e e basic r e g i m e s originally d i s t i n g u i s h e d b y E s p i n g - A n d e r s e n
and/or the improved descriptive and heuristic p o w e r of m o r e complex
t y p o l o g i e s (see especially P i t r u z e l l o 1999). H o w e v e r , w h i l e his initial
t y p o l o g y w a s d e f e n d e d i n t e r m s o f t h e h i s t o r i c a l r o o t s a s well a s c o n -
t e m p o r a r y properties of the t h r e e clusters, E s p i n g - A n d e r s e n himself has
also n o t e d t h a t

the decisive period in which the basic components of postwar welfare

regimes were put in place, when welfare capitalism was institutionalized
so to speak, was not the postwar decades but during the 1960s and 1970s.
This was when strong worker protection and labour market regulation
emerged, when social citizenship was fully affirmed. And this was when
the core features of welfare states crystalhzed. The essential differences
between the Nordic, social democratic, the Continental European, and the
Anglo-Saxon liberal welfare states were affirmed in these years. (1999: 4)

T h i s w a s also t h e p e r i o d , o f c o u r s e , w h e n t h e a c c u m u l a t i o n r e g i m e s a n d
m o r e general modes of regulation with which these welfare regimes are
associated w e r e consolidated. This occurred in turn in the context of an
e v o l v i n g division o f l a b o u r i n A t l a n t i c F o r d i s m a n d t h e w i d e r i n t e r n a -
t i o n a l e c o n o m y . T h i s division of l a b o u r is also closely r e l a t e d to differ-
e n t p a t t e r n s o f d y n a m i c c o m p e t i t i v e a d v a n t a g e s ( P o r t e r 1990). A n d t h e
l a t t e r a r e closely r e l a t e d t o t h e w a y s i n w h i c h d i f f e r e n t m o d e s o f g r o w t h
a r e e m b e d d e d i n w i d e r sets o f social r e l a t i o n s ( s e e A s h t o n a n d G r e e n
1996; C r o u c h 1993; H a l l a n d S o s k i c e 2 0 0 1 b ; H o U i n g s w o r t h a n d B o y e r
1997a; H u b e r a n d S t e p h e n s 2 0 0 1 ; S t r e e c k 1992; S t r e e c k a n d C r o u c h
1997). E s p i n g - A n d e r s e n s e e m s t o c o n c l u d e f r o m his o b s e r v a t i o n t h a t
four distinctive a n d p a t h - d e p e n d e n t t y p e s o f w e l f a r e r e g i m e w e r e con-
s o l i d a t e d i n t h i s p e r i o d . A n a l t e r n a t i v e concliision i s t h a t v a r i o u s p a t h -
d e p e n d e n t welfare regimes continued to co-evolve with their respective
m o d e s o f g r o w t h d u r i n g this p e r i o d , b u t t h a t t h e y also c h a n g e d i n
r e s p o n s e t o c h a n g e s e l s e w h e r e i n t h e social f o r m a t i o n s i n w h i c h t h e y
came to be embedded.
 The Keynesian Welfare National State 67

It is worth noting here a c o m m e n t of Scharpf a n d Schmidt on their

o w n slight r e v i s i o n t o E s p i n g - A n d e r s e n ' s o r i g i n a l t h r e e f o l d t y p o l o g y o f
welfare r e g i m e s :

In spite of these fundamental structural differences, all three models could

be considered functionally equivalent solutions for the problems of income
security at the end of the golden-age period. Under conditions of assured
full employment, private top-ups on flat-rate benefits could be as satis-
factory as earnings-related public benefits; as segmented contingent
insurance systems expanded their coverage, they could approximate the
universalism of Anglo-Saxon and Scandinavian systems; and within the
boundaries of national economies, general taxation and wage-based social-
security contributions did not differ in their economic viability. With the
onset of the new international challenges, however, the functional equiva-
lence was lost. As unemployment increased, Anglo-Saxon welfare states
lost their capacity to assure income maintenance whereas Continental and
Scandinavian welfare states had to bear the fiscal burdens of their institu-
tionalized promises. With the integration of product and capital markets,
finally, the differences between tax-financed and contribution-financed
welfare states also increased in importance. (2000b; 9)

This i m p o r t a n t observation lends support to my o w n a r g u m e n t that there

was a b r o a d s t r u c t u r a l c o n g r u e n c e across d i f f e r e n t f o r m s of w e l f a r e
regime during t h e 'thirty golden years' of postwar economic growth.
Thus, for all t h e i n t r i n s i c i n t e r e s t a n d m e t h o d o l o g i c a l significance of
a t t e m p t s t o refine, reclassify, e x t e n d , d i s t i n g u i s h a n d c r i t i q u e t h e avail-
a b l e t a x o n o m i e s for t h e p u r p o s e s o f c o n c r e t e - c o m p l e x r e s e a r c h , a n e x a g -
gerated concern with variant forms of welfare regime could p r e v e n t
r e c o g n i t i o n o f t h e i r b a s i c c o n g r u e n c e a t m o r e a b s t r a c t - s i m p l e levels o f
analysis. T h i s i s definitely n o t a call t o r e j e c t s u c h t a x o n o m i c a t t e m p t s o r
t h e i r e m p i r i c a l results. A l l I w i s h t o e m p h a s i z e i s t h a t , g i v e n t h e r e l a t i v e
ecological d o m i n a n c e o f t h e g r o w t h d y n a m i c o f A t l a n t i c F o r d i s m a n d its
impact on the structural coupling and co-evolution of the market
e c o n o m y a n d c a p i t a l i s t s t a t e s i n this p e r i o d , t h e r e w e r e s e v e r a l p o s s i b l e
p a t h - d e p e n d e n t trajectories to the same b r o a d functional outcome.
B o n o l i , G e o r g e a n d T a y l o r - G o o b y m a k e a similar p o i n t for t h e p e r i o d
of welfare state r e t r e n c h m e n t in E u r o p e w h e n they suggest that
' E u r o p e a n w e l f a r e states, f a c e d w i t h s i m i l a r c h a l l e n g e s , d e v e l o p d i f f e r e n t
solutions, d e p e n d i n g on t h e welfare institutions a n d political configura-
t i o n s o f e a c h c o u n t r y , t o a t t a i n similar o u t c o m e s ' ( 2 0 0 0 : 4 6 ) . C o n v e r s e l y ,
w h e n a t t e n t i o n t u r n s t o m o r e c o n c r e t e - c o m p l e x issues, s u c h a s t h o s e typi-
cally s t u d i e d b y a f i c i o n a d o s o f c o m p a r a t i v e welfare r e s e a r c h , t h e p a t h -
d e p e n d e n t specificities of n a t i o n a l w e l f a r e r e g i m e s a c q u i r e a k e y r o l e as
i n d e p e n d e n t a n d / o r d e p e n d e n t v a r i a b l e s a c c o r d i n g t o t h e specific
68 The Keynesian Welfare National State

p r o b l e m ( s ) t o b e s t u d i e d . I will m o s t certainly refer t o Inch specificities

in subsequent chapters.

Worlds of welfare and welfare capitalism

I n a d d i t i o n t o t h e i r r o l e i n o r g a n i z i n g social t r a n s f e r s , w e l f a r e r e g i m e s
o r g a n i z e t h e p r o d u c t i v e s e c t o r o f t h e capitalist e c o n o m y i n d i f f e r e n t
w a y s ( G o o d i n e t al. 1999: 5 ; s e e also E b b i n g h a u s a n d M a n o w 2 0 0 1 b ;
H a l l a n d S o s k i c e 2 0 0 1 b ) . A d o p t i n g t h e E s p i n g - A n d e r s e n typology,
G o o d i n and his c o - a u t h o r s s u g g e s t t h a t t h e liberal w e l f a r e r e g i m e i s
b a s e d o n l i b e r a l politics, capitalist e c o n o m i c s and r e s i d u a l social policies;
t h e s o c i a l d e m o c r a t i c o n class p o l i t i c s , s o c i a h s t e c o n o m i c s a n d r e d i s -
t r i b u t i v e social policies; a n d t h e c o n s e r v a t i v e r e g i m e o n g r o u p politics,
c o m m u n i t a r i a n e c o n o m i c s a n d m u t u a l i s t social p o l i c i e s (1999: 4 0 - 5 4 ) .
My o w n approach emphasizes h o w welfare regimes are structurally
coupled with modes of economic growth (including their insertion into
t h e i n t e r n a t i o n a l division o f l a b o u r ) a n d m o r e e n c o m p a s s i n g m o d e s o f
r e g u l a t i o n . F o u r p a t t e r n s c a n b e d i s t i n g u i s h e d i n this r e g a r d i n E u r o p e
and North America:

• liberal welfare regimes are linked to finance-based, m a r k e t - r e g u l a t e d

capitalist regimes w h e r e the m o n e y concept of capital tends to
dominate;
• social d e m o c r a t i c w e l f a r e r e g i m e s a r e l i n k e d t o s m a l l o p e n
economies with strong Fordist export-oriented b r a n c h e s a n d / o r niche
m a r k e t - o r i e n t e d , high-skill, h i g h - p r o d u c t i v i t y , h i g h - w a g e , f l e x i b l y
specialized export-sectors;
• m o r e conservative, corporativist welfare regimes are linked to larger
e c o n o m i e s , o p e n o r closed, w i t h c l o s e c o o r d i n a t i o n b e t w e e n i n d u s t r y
a n d f i n a n c e a s well a s b e t w e e n l a r g e i n d u s t r i a l c o n c e r n s a n d s m a l l
a n d m e d i u m e n t e r p r i s e s , a n e m p h a s i s o n craft p r o d u c t i o n a n d g u i l d
organization, and a large traditional and n e w petite bourgeoisie,
where the productive concept of capital tends to predominate; and
• t h e S o u t h e r n E u r o p e a n w e l f a r e m o d e l i s l i n k e d t o late d e v e l o p i n g ,
peripheral Fordist economies with large agrarian sectors, traditional
social s t r u c t u r e s a n d family c a p i t a l i s m .

Such correlations need to be explained, of course, rather than merely

p o s i t e d . F o r t u n a t e l y , t h e r e is a g r o w i n g b o d y of i n s t i t u t i o n a l i s t analysis
t h a t i s c o n c e r n e d w i t h this q u e s t i o n (for e x a m p l e , E b b i n g h a u s a n d
M a n o w 2 0 0 1 b ; H a l l a n d Soskice 2 0 0 1 b ; H u b e r a n d S t e p h e n s 2 0 0 1 ) . A
r e g u l a t i o n i s t a p p r o a c h w o u l d e x a m i n e a t least t h r e e v a r i a b l e s i n
this r e g a r d . First, h o w a r e d i f f e r e n t p a t t e r n s o f f i n a n c e - i n d u s t r y
r e l a t i o n s c o n n e c t e d to t h e r e l a t i v e d o m i n a n c e of a ' m o n e y - c a p i t a l ' or a
 The Keynesian Welfare National State 69

'productive-capital' concept of the economic process on the part of the

leading fraction(s) of capital? T h e money-capital concept is m o r e liberal
( a n d , often, i n t e r n a t i o n a l i s t ) i n its c o n c e r n w i t h f o r m a l l y free c i r c u l a t i o n
and exchange; the productive-capital concept is m o r e a t t u n e d to t h e sub-
stantive i n t e r d e p e n d e n c e (or socialization) of the productive forces and
i s m o r e i n t e r v e n t i o n i s t ( a n d , p e r h a p s , p r o t e c t i o n i s t ) i n its c o n c e r n w i t h
s e c u r i n g t h e s u b s t a n t i v e c o n d i t i o n s for t h e p r o d u c t i o n o f s u r p l u s v a l u e
( O v e r b e e k 1 9 9 0 : 2 5 - 9 ; v a n d e r Pijl 1984: 8 - 3 4 ) . T h i s h a s i m p l i c a t i o n s n o t
only f o r e c o n o m i c policy, i n c l u d i n g m o d e s o f i n t e r v e n t i o n , c a p a c i t i e s f o r
state planning or economic guidance, t h e levels and incidence of taxa-
t i o n , a n d e d u c a t i o n a n d t r a i n i n g policy, b u t also f o r t h e r e l a t i v e w e i g h t
o f m a r k e t a n d s t a t e i n social p o l i c y (cf. B o y e r 1997; H a l l a n d S o s k i c e
2001b; H u b e r e t al. 1999; H u b e r a n d S t e p h e n s 2 0 0 1 ; P o l a n y i 1944; S o s k i c e
1999).
A s e c o n d i m p o r t a n t f a c t o r is t h e t i m i n g of t h e e m e r g e n c e of f o r m a l l y
free l a b o u r m a r k e t s i n r e l a t i o n t o t h e o n s e t a n d d e v e l o p m e n t o f i n d u s -
trialization, the timing of the b r e a k d o w n of guild supervision of u r b a n
labour, and the timing of the abolition of feudal labour dues (Biernacki
1995; C r o u c h 1993). F o r , a s B i e r n a c k i h a s s h o w n , t h e s e affect t h e p r e -
vailing c u l t u r a l c o n c e p t i o n s o f l a b o u r - p o w e r , e s p e c i a l l y w h e t h e r i t i s
r e g a r d e d primarily as o n e substitutable factor of p r o d u c t i o n a m o n g
o t h e r s or as a d i s t i n c t i v e set of c r e a t i v e c a p a c i t i e s b e a r i n g a t t a c h e d r i g h t s
a n d d u t i e s . T h e s e c u l t u r a l p e r c e p t i o n s affect n o t o n l y t h e o r g a n i z a t i o n o f
production, l a b o u r m a r k e t institutions, industrial relations and t h e
p r o p e n s i t y for c o r p o r a t i s t c o o p e r a t i o n , b u t also t h e m o r e g e n e r a l e c o -
n o m i c a n d political d e m a n d s m a d e b y l a b o u r m o v e m e n t s (Biernacki
1995).* T h e c o u p l i n g b e t w e e n w e l f a r e r e g i m e s a n d l a b o u r m a r k e t o r g a n -
i z a t i o n h a s also b e e n s t u d i e d b y V i s s e r (2000) for u n e m p l o y m e n t p o l i -
cies; a n d t h e c o u p l i n g b e t w e e n w e l f a r e r e g i m e s a n d p r o d u c t i o n r e g i m e s
h a s b e e n e x p l o r e d b y E s t e v e z - A b e e t al. ( 2 0 0 1 ) , H u b e r e t a l ( 1 9 9 9 ) ,
H u b e r a n d S t e p h e n s (2001) a n d T h e l e n ( 2 0 0 1 ) .
T h i r d , w e s h o u l d e x a m i n e h o w different m o d e s o f inter-firm c o m p e -
tition a n d / o r c o o p e r a t i o n l e a d t o t h e r e l a t i v e d o m i n a n c e o f f o r m a l
m a r k e t exchange or different forms of networking in securing the con-
d i t i o n s o f v a l o r i z a t i o n , i n n o v a t i o n , e t c ' T h e s e sets o f f a c t o r s o p e r a t e ini-
tially a t t h e l e v e l o f b r a n c h e s a n d s e c t o r s (for e x a m p l e , t h e o r g a n i z a t i o n
o f t h e l a b o u r process, t h e s t r u c t u r e o f l a b o u r m a r k e t s , t r a i n i n g r e g i m e s ,
o r t h e differential d e v e l o p m e n t o f p a t e r n a l i s m a n d o c c u p a t i o n a l
welfare), but, depending on the relative structural dominance and hege-
m o n i c c a p a c i t i e s o f specific e c o n o m i c s e c t o r s a n d f r a c t i o n s o f c a p i t a l ,
t h e i r specific effects c a n b e c o m e m o r e g e n e r a l ( o r e v e n u n i v e r s a l ) w i t h i n
p a r t i c u l a r r e g i o n a l o r n a t i o n a l f o r m a t i o n s . T h i s d o m i n a n c e i s typically
m e d i a t e d t h r o u g h t h e s t r a t e g i c selectivity o f s t a t e forms, w h i c h m a k e i t
70 The Keynesian Welfare National State i
\
h a r d e r o r e a s i e r t o p r o m o t e u n i v e r s a l welfare, a n d t h e c h a n g i n g b a l a n c e
of p o l i t i c a l forces. T h e r e l a t i v e w e i g h t of different f a c t o r s also v a r i e s w i t h
stages o f c a p i t a l i s m . T h u s , t o t a k e o n e highly t o p i c a l e x a m p l e , t h e m o n e y
c o n c e p t of c a p i t a l h a d a r e d u c e d significance d u r i n g t h e p e r i o d of
A t l a n t i c F o r d i s m c o m p a r e d w i t h t h e c u r r e n t p e r i o d o f n e o l i b e r a l glob-
a l i z a t i o n ( D u m e n i l a n d L e v y 2 0 0 1 a , b ; v a n A p e l d o o r n 1998; v a n d e r Pijl
1984).
A n e x p l a n a t i o n i n t e r m s o f t h e s t r a t e g i c selectivity o f t h e state a n d its
f o r m - d e t e r m i n e d r o l e i n m e d i a t i n g political s t r u g g l e s w o u l d focus o n t h e
basic i n s t i t u t i o n a l a n d strategic factors of t h e s t a t e n o t e d in c h a p t e r 1
(pp. 37-42). These include m o d e s of representation, t h e articulation of
t h e state a p p a r a t u s across different b r a n c h e s , f u n c t i o n a l d o m a i n s , terri-
torial scales a n d m o d e s o f i n t e r v e n t i o n ; and, for t h e w i d e r political
system, t h e w a y i n w h i c h p a r t y s y s t e m s a n d p a t t e r n s o f i n d u s t r i a l rela-
t i o n s h a v e b e e n s h a p e d b y e x t r a - e c o n o m i c a s well a s e c o n o m i c f a c t o r s
( s e e , for e x a m p l e . C r o u c h 1993; M a r t i n 1995; R o k k a n 1999). T h e s t r a t e -
gic selectivity o f t h e s t a t e s y s t e m o n different scales, e s p e c i a l l y a t t h e
n a t i o n a l level, g e n e r a t e s a m o r e o r less s y s t e m a t i c p a t t e r n o f c o n s t r a i n t s
a n d o p p o r t u n i t i e s o n c o r p o r a t e s t r a t e g i e s (as i t d o e s o n o t h e r t y p e s o f
s t r a t e g y p u r s u e d b y o t h e r types o f a c t o r ) . This affects n o t only t h e i r
immediate market situation and their expectations regarding the oppor-
t u n i t i e s for profit ( a n d t h r e a t s o f loss) b u t also t h e i r c a p a c i t y t o r e s p o n d
t o t h e s e o p p o r t u n i t i e s a n d t h r e a t s b o t h e c o n o m i c a l l y a n d politically.
M o r e o v e r , t h r o u g h the m e c h a n i s m s of structural coupling and co-
e v o l u t i o n , i t also s h a p e s t h e e x t e n t o f c o r r e s p o n d e n c e o r d i s j u n c t i o n
between m u c h wider aspects of the production regimes and welfare
r e g i m e s i n d i f f e r e n t e c o n o m i e s (for r e c e n t analyses o f t h e s e configura-
t i o n s a n d t h e i r i m p l i c a t i o n s for i n s t i t u t i o n a l c o m p l e m e n t a r i t i e s , see t h e
c o n t r i b u t i o n s t o H a l l a n d S o s k i c e 2 0 0 1 b ; o n t h e link b e t w e e n s t a t e
t r a d i t i o n s , t r a d e u n i o n i s m , a n d i n d u s t r i a l r e l a t i o n s , s e e C r o u c h 1993).
T h e variant forms are most important in addressing the various
n a t i o n a l crises i n a n d o / t h e K W N S a n d t h e i r i m p l i c a t i o n s for a n y t r a n -
sition t o n e w e r f o r m s o f e c o n o m i c a n d social i n t e r v e n t i o n . F o r , j u s t a s
t h e r e i s n o p u r e K W N S , t h e r e i s n o p u r e crisis o f t h e K W N S - o n l y
specific, p a t h - d e p e n d e n t , n a t i o n a l l y v a r i a b l e crises, o f t e n w i t h r e g i o n a l l y
specific m a n i f e s t a t i o n s . S o m e cases r e v e a l g r e a t e r c o n t i n u i t y , l i n k e d t o
t h e d o m i n a n c e o f t h e v i e w t h a t t h e r e w a s a crisis i n t h e w e l f a r e s t a t e for
w h i c h i n c r e m e n t a l a d j u s t m e n t s m i g h t b e a p p r o p r i a t e (for e x a m p l e ,
D e n m a r k , S w e d e n , G e r m a n y ) . O t h e r cases i n v o l v e g r e a t e r d i s c o n t i n u i t y
- a d m i t t e d l y m o r e m a r k e d i n d e c l a r e d policy c h a n g e s t h a n a c t u a l p o l i c y
o u t c o m e s - l i n k e d to a discursively c o n s t r u c t e d crisis o / t h e w e l f a r e s t a t e
(for e x a m p l e , N e w Z e a l a n d , B r i t a i n ) . I t i s i n t h e l a t t e r c a s e s t h a t t h e
b i g g e s t shifts h a v e o c c u r r e d i n s t i t u t i o n a l l y ( t y p i c a l l y a s s o c i a t e d w i t h a
 The Keynesian Welfare National State 71

n e o l i b e r a l r e g i m e shift) a n d w h e r e t h e m o s t s e v e r e i n c o m e p o l a r i z a t i o n
consequent upon adjustment has occurred.

3. Distinctive Features of the KWNS as a National State

Having considered the general features of Atlantic Fordism and the

K W N S and possible taxonomies of welfare regimes, I n o w consider the
distinctive f e a t u r e s o f t h e K W N S a s a n a t i o n a l state. T h e s e c a n b e
s u m m a r i z e d a s follows:

1 A m o n g t h e v a r i o u s spatial scales o f f o r m a l political o r g a n i z a t i o n , t h e

s o v e r e i g n s t a t e level w a s r e g a r d e d a s p r i m a r y . L o c a l a n d r e g i o n a l
s t a t e s s e r v e d p r i m a r i l y a s t r a n s m i s s i o n b e l t s for n a t i o n a l e c o n o m i c
a n d social politics. T h e k e y s u p r a n a t i o n a l i n s t i t u t i o n s c o m p r i s e d
various i n t e r n a t i o n a l a n d i n t e r g o v e r n m e n t a l agencies - typically
organized under US hegemony - and were designed to promote
cooperation among national states to help secure postwar economic
and political r e g e n e r a t i o n in E u r o p e and e c o n o m i c growth in N o r t h
America. A m o n g the key concerns of the national state are popula-
tion, r e p r o d u c t i o n , citizenship, migration a n d territorial defence.
E a c h of these has gender, ethnic and 'racial' aspects. Thus, in r e p r o -
ducing the primacy of the national state and international state
s y s t e m , t h e K W N S also i n d i r e c t l y r e p r o d u c e s specific f o r m s o f
patriarchal, ethnic a n d 'racial' domination.
2 State economic strategies a n d e c o n o m i c regulation w e r e p r e m i s e d on
t h e e x i s t e n c e o f r e l a t i v e l y closed n a t i o n a l e c o n o m i e s . A c o m p l e x m u l -
tiscalar field of e c o n o m i c r e l a t i o n s w a s h a n d l e d as if it w e r e d i v i d e d
into a series of relatively closed national economies. E c o n o m i c regu-
l a t i o n t h r o u g h t h e K W N S itself c o n t r i b u t e d t o t h e m a t e r i a l a s well
as discursive constitution of national e c o n o m i e s as objects of regula-
tion. T h e international e c o n o m y was m a i n l y u n d e r s t o o d in t e r m s of
f i n a n c i a l a n d t r a d e f l o w s a m o n g distinct n a t i o n a l e c o n o m i e s . T h e
object of national and international economic management was
typically s e e n a s t h e f o r m a l m a r k e t e c o n o m y o p e r a t i n g o n t h e b a s i s
o f t h e capitalist l o g i c o f ' e c o n o m i c m a n ' ; o r , a t m o s t , i n a n a t i o n a l
context, as the 'mixed economy' formed by the articulation of m a r k e t
a n d s t a t e ( s e e a b o v e ) . T h e r e w a s little a w a r e n e s s of, let a l o n e c o n -
scious policy-making c o n c e r n e d to o v e r c o m e , the capitalist a n d / o r
p a t r i a r c h a l f e a t u r e s o f this o b j e c t o f e c o n o m i c m a n a g e m e n t .
3 A m o n g t h e v a r i o u s s p a t i a l scales o f e c o n o m i c o r g a n i z a t i o n , t h e
n a t i o n a l e c o n o m y was accorded primacy for state action, defined and
measured in terms of national aggregates, and m a n a g e d primarily in
72 The Keynesian Welfare National State

terms of targeted variation in tliese aggregates ( B a r n e s and L e d u b u r

1 9 9 1 , 1998; B r y a n 1995; R a d i c e 1984). L o c a l o r r e g i o n a l e c o n o m i e s
were treated as sub-units of the national economy and interregional
differences were regarded as relatively u n i m p o r t a n t .
4 T h e p r i m a r y object of w e l f a r e a n d social r e p r o d u c t i o n p o l i c i e s w a s
s e e n a s t h e r e s i d e n t n a t i o n a l p o p u l a t i o n a n d its c o n s t i t u e n t h o u s e -
h o l d s a n d i n d i v i d u a l citizens. M a n y o f t h e s e p o l i c i e s a s s u m e d t h e
p r e d o m i n a n c e o f s t a b l e t w o - p a r e n t families i n w h i c h m e n r e c e i v e d a
'family w a g e ' a n d c o u l d e x p e c t h f e t i m e e m p l o y m e n t , i f n o t n e c e s -
s a r i l y a j o b f o r life. T h e p r i n c i p a l e x c e p t i o n h e r e is f o u n d in ' i n d i v i d -
ual earner' welfare regimes. Moreover, n o t only did the Keynesian
w e l f a r e s t a t e a s s u m e t h e stability o f t h e p a t r i a r c h a l f a m i l y f o r m , i t
also m a r g i n a l i z e d o t h e r f o r m s o f family o r h o u s e h o l d a n d a l t e r n a t i v e
s e x u a l i t i e s ( C a r a b i n e 1996).
5 T h e p r i m a r y u n i t s o f t h e s t a t e ' s social basis w e r e i n d i v i d u a l political
subjects, e n d o w e d , a s c i t i z e n s o f t h e n a t i o n a l state, w i t h v a r i o u s legal,
p o l i t i c a l a n d social r i g h t s a n d o r g a n i z e d a s m e m b e r s o f e c o n o m i c -
corporate organizations (trade unions and business associations)
a n d / o r as s u p p o r t e r s of responsible political parties. Different types
o f c i t i z e n s h i p r e g i m e w e r e c o m p a t i b l e w i t h this b a s i c m o d e l ( B o r i s
1995; F r a s e r 1 9 8 7 , 1 9 9 7 ; J e n s o n 1 9 8 6 , 1 9 9 7 ; W i l l i a m s 1995). B u t m o s t
h a d a p a t r i a r c h a l f o r m a n d o f t e n t h e r e w e r e i n f o r m a l a s well a s
f o r m a l l i m i t a t i o n s o n a c c e s s t o c i t i z e n s h i p r i g h t s (see s e c t i o n 4 b e l o w
on the spatio-temporal fix of Atlantic Fordism).
6 T h e axis o f s t r u g g l e s o v e r d o m e s t i c political h e g e m o n y w a s t h e
' n a t i o n a l - p o p u l a r ' a n d its r e a l i z a t i o n i n t h e e x p a n s i o n a n d p r o t e c t i o n
of c i t i z e n r i g h t s in a p o l i t i c a l p r o c e s s t h a t w a s m a i n l y c o n c e r n e d w i t h
i s s u e s o f e c o n o m i c a n d social r e d i s t r i b u t i o n i n a n e c o n o m y w h o s e
e s s e n t i a l l y capitalist f e a t u r e s w e r e t a k e n for g r a n t e d .

I n s h o r t , t h e r e w a s a close a n d m u t u a l l y r e i n f o r c i n g l i n k a g e b e t w e e n
the national state form and Keynesian welfarism. Indeed, the K W N S
p r o b a b l y gave fullest e x p r e s s i o n t o t h e o r g a n i z a t i o n a l a n d s o c i e t a l i z i n g
p o s s i b i l i t i e s of t h e n a t i o n a l state in t h e large e c o n o m i e s . It e m e r g e d at a
time when formal plurinational empires were being dismantled under
pressure from the U S A and liberation m o v e m e n t s and before serious
a t t e m p t s were m a d e to consolidate s u p r a n a t i o n a l blocs a m o n g t h e
a d v a n c e d capitalist economies. T h e p r i m a c y of the national scale did n o t
o c c u r b e c a u s e o f s o m e t e l e o l o g i c a l u n f o l d i n g o f this p o t e n t i a l , b u t
b e c a u s e o f specific e c o n o m i c a n d p o l i t i c a l c o n d i t i o n s a s s o c i a t e d w i t h t h e
organization of Atlantic Fordism under US hegemony. Thus, to argue
counterfactually, had Nazi G e r m a n y secured through economic and
m i l i t a r y i m p e r i a h s m t h e c o n d i t i o n s for its p r o j e c t e d ' N e w O r d e r ' , a m u c h
 The Keynesian Welfare National State 73

m o r e strongly p l u r i n a t i o n a l a n d far m o r e p o l a r i z e d m o d e o f e c o n o m i c
regulation would have b e e n established in Europe. But the Allied defeat
o f t h e A x i s p o w e r s c r e a t e d s o m e e s s e n t i a l c o n d i t i o n s for g e n e r a l i z i n g t h e
American N e w D e a l to E u r o p e . This occurred - seemingly paradoxically
- t h r o u g h the reassertion of t h e organizational principle of t h e national
state. I t w a s t h r o u g h t h e l a t t e r t h a t t h e n a t i o n a l e c o n o m y w o u l d b e r e g u -
lated a s a d i s t i n c t i v e ' i m a g i n e d ' e c o n o m i c s p a c e a n d t h a t efforts w o u l d
be m a d e to secure a complementary expansion of national production
a n d c o n s u m p t i o n a s t h e basis for a 'politics o f p r o s p e r i t y ' t o o v e r c o m e
r i g h t w i n g a n d leftwing e x t r e m i s m ( H a l l 1989; M a i e r 1978; M i l w a r d e t al.
1993; Siegel 1988; v a n d e r Pijl 1984).

4. The K W N S and the Spatio-temporal Fix of

Atlantic Fordism

N o a c c u m u l a t i o n s t r a t e g y o n w h a t e v e r scale c a n b e c o m p l e t e l y c o h e r e n t
o r fully i n s t i t u t i o n a l i z e d . I h a v e a l r e a d y n o t e d t h r e e b a s i c r e a s o n s for t h i s
t h a t a r e i n h e r e n t i n t h e v e r y n a t u r e o f c a p i t a l i s m itself ( p p . 1 8 - 2 1 ) . H e r e ,
I w a n t t o h i g h l i g h t f o u r c o n s e q u e n c e s for a t t e m p t s t o r e g u l a r i z e a c c u -
m u l a t i o n t h r o u g h a c c u m u l a t i o n s t r a t e g i e s o r g a n i z e d a r o u n d a specific
s p a t i o - t e m p o r a l fix. First, g i v e n t h e i n c o m p l e t e , c o n t r a d i c t o r y a n d d i l e m -
m a t i c n a t u r e o f t h e c a p i t a l r e l a t i o n , t h e specific c o n d i t i o n s n e c e s s a r y for
a c c u m u l a t i o n t e n d t o b e o p a q u e , i n d e t e r m i n a t e a n d liable t o v a r i a t i o n .
This explains in p a r t the trial-and-error n a t u r e of attempts to regularize
a n d g o v e r n a c c u m u l a t i o n w i t h i n a n y g i v e n set o f s p a t i o - t e m p o r a l h o r i -
zons. S e c o n d , g i v e n t h e a b s e n c e h i t h e r t o ( a n d t h e i n h e r e n t i m p r o b a b i l -
ity) of a c o m p r e h e n s i v e s p a t i o - t e m p o r a l fix i n s t i t u t e d at t h e l e v e l of t h e
w o r l d m a r k e t , t h e r e will a l w a y s b e f a c t o r s a n d p r o c e s s e s n e c e s s a r y t o t h e
success o f t h e p r e v a i l i n g a c c u m u l a t i o n r e g i m e s t h a t lie b e y o n d t h e r e a c h
o f t h e i r r e s p e c t i v e m o d e s o f r e g u l a t i o n . T h i s i s t h e o t h e r face o f t h e
capacity of a spatio-temporal fix to displace and defer contradictions a n d
crisis-tendencies. Third, consolidating a spatio-temporal fix r e q u i r e s
b u i l d i n g s u p p o r t i n a n d a c r o s s m a n y conflictual a n d c o n t e s t e d f i e l d s f o r
t h e c o r r e s p o n d i n g accumulation strategies, their associated state projects
a n d , w h e r e r e l e v a n t , h e g e m o n i c visions. N o n e t h e l e s s , i n s o f a r a s o n e s u c h
strategy does b e c o m e d o m i n a n t or hegemonic and is institutionalized
w i t h i n a specific s p a t i o - t e m p o r a l fix, it h e l p s c o n s o l i d a t e an a c c u m u l a -
t i o n r e g i m e i n its c o r r e s p o n d i n g e c o n o m i c s p a c e . A n d , f o u r t h , b e c a u s e
t h e u n d e r l y i n g c o n t r a d i c t i o n s a n d d i l e m m a s still exist, all s u c h r e g i m e s
a r e p a r t i a l , p r o v i s i o n a l a n d u n s t a b l e . T h e circuit o f c a p i t a l m a y stifl b r e a k
at m a n y points within and beyond the spatio-temporal fix. E c o n o m i c
c r i s e s will t h e n p r o v o k e r e s t r u c t u r i n g t h r o u g h t h e n o r m a l w o r k i n g o f
74 The Keynesian Welfare National State

m a r k e t forces a s well a s t h r o u g h m o r e d e l i b e r a t e a t t e m p t s t o r e s t o r e t h e
c o n d i t i o n s for a c c u m u l a t i o n . I f s u c h a t t e m p t s a r e c o m p a t i b l e w i t h t h e
p r e v a i l i n g a c c u m u l a t i o n r e g i m e , g r o w t h will b e r e n e w e d w i t h i n its p a r a -
m e t e r s . If n o t , a crisis of - a n d n o t j u s t in - t h e a c c u m u l a t i o n r e g i m e will
d e v e l o p , p r o v o k i n g a s e a r c h for n e w s t r a t e g i e s , n e w i n s t i t u t i o n a l i z e d
c o m p r o m i s e s a n d n e w s p a t i o - t e m p o r a l fixes ( o n this d i s t i n c t i o n , see
B o y e r 1990; L i p i e t z 1988).
W h e t h e r o r n o t t h e s e a r c h for s o l u t i o n s t o e c o n o m i c crisis r e s t o r e s
t h e p r e v a i l i n g a c c u m u l a t i o n r e g i m e a n d its m o d e o f r e g u l a t i o n d o e s n o t
d e p e n d solely o n t h e o b j e c t i v e f e a t u r e s o f t h e crisis a n d w h e t h e r i t i s
o b j e c t i v e l y feasible i n p r i n c i p l e t o r e s o l v e i t w i t h i n this f r a m e w o r k . I t
also d e p e n d s o n t h e i n s t i t u t i o n a l , o r g a n i z a t i o n a l a n d l e a r n i n g c a p a c i t i e s
o f t h e social forces s e e k i n g t o r e s o l v e t h e crisis a n d o n t h e o u t c o m e o f
t h e c o n t e s t t o define t h e n a t u r e o f t h e crisis, t o e x p l a i n its v a r i o u s o b j e c -
t i v e c a u s e s , t o a t t r i b u t e b l a m e for its d e v e l o p m e n t a n d t o identify t h e
m o s t a p p r o p r i a t e s o l u t i o n s . A c c o r d i n g l y , w h i l e similar o b j e c t i v e e c o -
n o m i c c r i s e s affected t h e e c o n o m i e s o f A t l a n t i c F o r d i s m d u r i n g t h e 1970s
a n d 1980s, t h e y w e r e n o t all r e s o l v e d i n t h e s a m e w a y . I n s o m e c a s e s t h e y
w e r e largely m a n a g e d as crises in Atlantic F o r d i s m , in others they w e r e
h a n d l e d as crises o / A t l a n t i c F o r d i s m . It is in this c o n t e x t t h a t m o r e
concrete-complex analyses of the articulation b e t w e e n accumulation
r e g i m e s a n d m o d e s o f r e g u l a t i o n (or p r o d u c t i o n a n d w e l f a r e r e g i m e s )
and m o r e general state capacities n e e d to be introduced. Yet m o r e
detailed studies would e x a m i n e t h e changing balance of forces mobilized
a r o u n d different a c c o u n t s o f t h e crisis a n d p o s s i b l e s o l u t i o n s . T h e basis
for t h e s e c l a i m s c a n b e i l l u s t r a t e d i n t h e f i r s t i n s t a n c e f r o m t h e s t r u c t u r a l
coherence of accumulation and regulation in Atlantic Fordism and the
f a c t o r s l e a d i n g t o its b r e a k d o w n .
B e f o r e a d d r e s s i n g this issue directly, h o w e v e r , i t i s w o r t h a s k i n g h o w
o n e might evaluate the claim that t h e K W N S is the ideal-typical 'Fordist
s t a t e ' ( a n d h e n c e h a s specifically F o r d i s t f e a t u r e s t h a t c o r r e s p o n d t o a n d
co-evolve with Fordism) rather t h a n comprising just o n e possible form
a m o n g several t h a t c o u l d b e a d o p t e d b y t h e m o d e r n s t a t e i n a F o r d i s t
m a s s society. T h i s q u e s t i o n c a n b e a p p r o a c h e d i n f o u r ways, c o r r e -
sponding to t h e alternative referents of Fordism. It has been assessed in
t e r m s of: (1) t h e n a t u r e o f t h e l a b o u r p r o c e s s w i t h i n t h e s t a t e s e c t o r itself
(for e x a m p l e , H o g g e t t 1987); (2) t h e s t a t e s e c t o r ' s d i r e c t e c o n o m i c r o l e
i n a F o r d i s t a c c u m u l a t i o n r e g i m e (for e x a m p l e , O v e r b e e k 1 9 9 0 : 1 1 4 - 1 9 ) ;
(3) t h e s t a t e ' s w i d e r r o l e i n t h e social m o d e o f e c o n o m i c r e g u l a t i o n
l i n k e d t o s u c h a r e g i m e (for e x a m p l e , M o u l a e r t e t al. 1988; P a i n t e r 1991);
o r ( 4 ) its r o l e i n s e c u r i n g t h e i n s t i t u t i o n a l i n t e g r a t i o n a n d social c o h e -
s i o n o f a social f o r m a t i o n w i t h i n w h i c h F o r d i s m i n o n e o r m o r e o f its
p o s s i b l e guises i s d o m i n a n t ( H i r s c h a n d R o t h 1986). T h e last t h r e e cri-
 The Keynesian Welfare National State 75

t e r i a also h a v e i m p l i c a t i o n s , a s w e shall see, f o r t h e A t l a n t i c F o r d i s t

s p a t i o - t e m p o r a l fix.
A l t h o u g h i t m a y b e i n t e r e s t i n g t o i n v e s t i g a t e h o w far t h e l a b o u r
p r o c e s s i n t h e s t a t e i s F o r d i s t (or q u a s i - F o r d i s t ) i n c h a r a c t e r , this w o u l d
tend, in the absence of o t h e r criteria, to reduce the state to o n e a m o n g
s e v e r a l sites o f e c o n o m i c activity. I t w o u l d t h e r e b y lose its d i s t i n c t i v e -
ness as a state. Focusing on the direct e c o n o m i c role of the state or public
s e c t o r c o u l d also lead t o n e g l e c t o f t h e d i s t i n c t i v e f e a t u r e s o f t h e s t a t e
as a w h o l e . C o n v e r s e l y , l o o k i n g at t h e s t a t e ' s r o l e in s e c u r i n g F o r d i s t
societalization might m a k e it h a r d to distinguish a Fordist state p r o p e r
f r o m a s t a t e t h a t m a i n t a i n s social c o h e s i o n in a society t h a t h a p p e n s to
be Fordist. This suggests that the most promising a p p r o a c h to t h e
' F o r d i s t ' n a t u r e o f t h e K W N S i s t h e d i s t i n c t i v e c o n t r i b u t i o n o f its f o r m
a n d f u n c t i o n s as a s t a t e to s e c u r i n g a distinctively F o r d i s t a c c u m u l a t i o n
regime a n d m o d e of regulation. This should not be t a k e n to m e a n that
the K W N S e m e r g e d in order to p e r f o r m these functions n o r that the
a c c u m u l a t i o n r e g i m e p r e - e x i s t e d t h e d e v e l o p m e n t o f its m o d e o f r e g u -
lation. Instead, it is an invitation to explore the structural coupling a n d
c o - e v o l u t i o n o f t h e a c c u m u l a t i o n r e g i m e a n d its m o d e o f r e g u l a t i o n a n d
the extent to which they were able to develop a degree of structured
coherence (or institutional integration) that helped to secure the im-
p r o b a b l e r e p r o d u c t i o n of c a p i t a l a c c u m u l a t i o n for a significant p e r i o d of
t i m e (on the rejection of functionalism in the regulation a p p r o a c h , see
L i p i e t z 1988; J e s s o p 1 9 9 0 a , b ) .
A p p r o a c h e d i n t h e s e t e r m s , t h e distinctive c o n t r i b u t i o n o f t h e K W N S
t o t h e r e g u l a t i o n o f A t l a n t i c F o r d i s m w a s its c a p a c i t y t o m a n a g e , d i s -
p l a c e or defer, at least for a while, the contradictions in the different
forms of the capital relation and their strategic dilemmas as these were
expressed in Fordist accumulation regimes. These benefited from a spatio-
territorial matrix based on the congruence b e t w e e n national economy,
n a t i o n a l s t a t e , n a t i o n a l c i t i z e n s h i p e m b r a c i n g social a s well a s civic a n d
political rights, a n d n a t i o n a l society; a n d f r o m i n s t i t u t i o n s r e l a t i v e l y well
a d a p t e d t o c o m b i n i n g t h e t a s k s o f s e c u r i n g full e m p l o y m e n t a n d e c o n o m i c
g r o w t h a n d m a n a g i n g n a t i o n a l e l e c t o r a l cycles. T h i s s p a t i o - t e m p o r a l fix,
s o m e t i m e s k n o w n a s e m b e d d e d l i b e r a l i s m ( R u g g i e 1982), e n a b l e d a s p e -
cific b u t still p a r t i a l a n d p r o v i s i o n a l r e s o l u t i o n o f t h e c o n t r a d i c t i o n s o f
capital accumulation as t h e y w e r e expressed u n d e r Atlantic Fordism. T h e
principal structural forms (with t h e i r associated contradictions a n d dilem-
m a s ) a r o u n d w h i c h t h i s specific r e s o l u t i o n w a s o r g a n i z e d i n a n d t h r o u g h
t h e K W N S w e r e t h e w a g e a n d m o n e y f o r m s . I will n o w s e e k t o justify t h i s
c l a i m b y e l a b o r a t i n g t h e stylized m o d e l i n t r o d u c e d i n s e c t i o n 2 a b o v e .
First, t h e p r i m a r y a s p e c t o f t h e w a g e f o r m i n A t l a n t i c F o r d i s m a s far
a s t h e K W N S w a s c o n c e r n e d w a s its r o l e a s a s o u r c e o f d o m e s t i c d e m a n d
76 The Keynesian Welfare National State

r a t h e r t h a n as a cost of i n t e r n a t i o n a l p r o d u c t i o n . ^ ° T h u s t h e s t a t e f o c u s e d
its efforts on s e c u r i n g full e m p l o y m e n t levels of d e m a n d w i t h i n t h e
n a t i o n a l e c o n o m y a n d o r g a n i z e d its i n t e r v e n t i o n s a n d p o l i c i e s i n o t h e r
areas t o s u p p o r t t h i s goal a s far a s p o s s i b l e . I n d e e d , a l t h o u g h t h e a t t a i n -
m e n t o f full e m p l o y m e n t d u r i n g this p e r i o d i s o f t e n a t t r i b u t e d t o
successful K e y n e s i a n f i n e - t u n i n g , " its a c h i e v e m e n t w a s actually m o r e
strongly r o o t e d i n t h e basic d y n a m i c o f F o r d i s t e x p a n s i o n t h a t t h e
K W N S h e l p e d t o s e c u r e t h r o u g h its p r o m o t i o n o f m a s s p r o d u c t i o n a n d
m a s s c o n s u m p t i o n . T h e role of w a g e s as a cost of i n t e r n a t i o n a l p r o d u c -
t i o n h a d s e c o n d a r y i m p o r t a n c e for t h e K W N S . I n d e e d , t h e s t a t e w a s
willing t o live e c o n o m i c a l l y a n d politically w i t h m o d e s t inflation a n d
e n g a g e i n m o d e s t d e v a l u a t i o n s i f this w a s j u d g e d n e c e s s a r y t o p r o t e c t
t h e full e m p l o y m e n t levels o f d e m a n d t h a t s e r v e d t h e i n t e r e s t s o f i n d u s -
trial c a p i t a l as well as t h e F o r d i s t l a b o u r force (see also t h e discussion of
m o n e y a n d inflation b e l o w ) . T h i s d o e s n o t m e a n t h a t w a g e costs w e r e
o f n o i n t e r e s t t o t h e state. F o r , i n a d d i t i o n t o its overall i n t e r e s t i n con-
t i n u e d e c o n o m i c g r o w t h , t h e state w a s also a m a j o r p u r c h a s e r o f g o o d s
a n d s e r v i c e s f r o m t h e p r i v a t e s e c t o r a n d a n i n c r e a s i n g l y significant
e m p l o y e r i n its o w n right. B u t w a g e s w e r e g e n e r a l l y v i e w e d w i t h b e n i g n
n e g l e c t b y t h e s t a t e p r o v i d e d t h a t t h e y rose i n line w i t h p r o d u c t i v i t y a n d
prices a n d t h e r e b y c o n t r i b u t e d t o t h e v i r t u o u s circle o f F o r d i s t accu-
m u l a t i o n . T h i s w a s relatively easy t o a c h i e v e t h r o u g h t h e o p e r a t i o n o f
m a r k e t forces during the e x p a n s i o n p h a s e of Atlantic Fordism in the
1950s a n d early 1960s, o w i n g t o t h e c o n t i n u i n g g r o w t h o f F o r d i s t f i r m s
a n d b r a n c h e s w i t h their e c o n o m i e s o f scale a n d c o l l e c t i v e b a r g a i n i n g
i n d e x e d t o p r o d u c t i v i t y a n d p r i c e s . L a b o u r m a r k e t p r e s s u r e s w e r e also
a l l e v i a t e d i n this p e r i o d b y p r o c e s s e s s u c h a s t h e t r a n s f e r o f w o r k e r s f r o m
low p r o d u c t i v i t y a g r i c u l t u r e , t h e m o b i l i z a t i o n o f w o m e n i n t o t h e l a b o u r
f o r c e a n d , later, t h e r e c r u i t m e n t o f i m m i g r a n t w o r k e r s .
These arguments can be related to the m o r e general role of the
K W N S i n s e c u r i n g t h e c o n d i t i o n s for F o r d i s t a c c u m u l a t i o n . First, given
t h e k e y role o f e c o n o m i e s o f scale i n t h e F o r d i s t l a b o u r p r o c e s s a n d t h e
s u p p l y - d r i v e n ('just-in-case') n a t u r e o f p r o d u c t i o n , t h e s t a t e p l a y e d a n
i m p o r t a n t r o l e i n c o m p e n s a t i n g for t h e l i m i t e d s c o p e o f m i c r o e c o n o m i c
f l e x i b i l i t y i n F o r d i s t p r o d u c t i o n b y m i n i m i z i n g t h e n e e d for i n d u s t r y t o
m a k e larger adjustments in output. In particular, in managing the wage
r e l a t i o n a n d l a b o u r m a r k e t policies, a n d g u i d i n g a g g r e g a t e d e m a n d , i t
h e l p e d t o b a l a n c e supply a n d d e m a n d w i t h o u t t h e v i o l e n t cyclical swings
characteristic of competitive markets. Moreover, by holding out the
p r o m i s e o f s m o o t h i n g e c o n o m i c f l u c t u a t i o n s a n d s e c u r i n g s t a b l e , calcu-
l a b l e g r o w t h , i t also p e r m i t t e d F o r d i s t f i r m s t o s e c u r e i n c r e a s i n g r e t u r n s
t o scale a n d e n c o u r a g e d t h e m t o invest. G i v e n t h e d o m i n a n c e o f F o r d i s t
f i r m s i n t h e F o r d i s t g r o w t h d y n a m i c , this also p r o v i d e d o p p o r t u n i t i e s for
 The Keynesian Welfare National State 77

profit t o o t h e r f i r m s w h o s e activities c o m p l e m e n t e d t h o s e i n t h e l e a d i n g
sectors. In this a n d o t h e r regards, then, a relatively consistent accumula-
t i o n s t r a t e g y h e l p e d t o select, c o n s o l i d a t e a n d i m p a r t a F o r d i s t d y n a m i c
t o t h e n a t i o n a l e c o n o m y a s a w h o l e t h r o u g h t h e i n t e r w o v e n logics o f
market competition and economic complementarity. Second, given the
potential virtuous circle of expansion rooted in rising productivity, rising
wages, r i s i n g d e m a n d , r i s i n g profits a n d r i s i n g i n v e s t m e n t , t h e s t a t e
acquired a k e y role in integrating the capital a n d consumer goods indus-
tries a n d m a n a g i n g t h e w a g e r e l a t i o n t o this e n d . Its a c t i v i t i e s h e r e
i n c l u d e d p r o m o t i n g t h e g e n e r a l i n f r a s t r u c t u r a l c o n d i t i o n s for n a t i o n w i d e
diffusion o f m a s s c o n s u m p t i o n (for e x a m p l e , e l e c t r i c i t y grids, i n t e g r a t e d
t r a n s p o r t , m o d e r n h o u s i n g ) , p r o m o t i n g e c o n o m i e s o f scale t h r o u g h
n a t i o n a l i z a t i o n a n d / o r s u p p o r t i v e m e r g e r policies, e n g a g i n g i n c o n t r a -
cyclical d e m a n d m a n a g e m e n t , l e g i t i m a t i n g r e s p o n s i b l e c o l l e c t i v e b a r -
gaining, a n d g e n e r a l i z i n g n o r m s o f m a s s c o n s u m p t i o n t h r o u g h p u b l i c
sector e m p l o y m e n t and welfare e x p e n d i t u r e . U r b a n and regional poli-
cies o r i e n t e d t o r e d u c i n g u n e v e n d e v e l o p m e n t h e l p e d t o s e c u r e t h e
c o n d i t i o n s for m a s s p r o d u c t i o n , m a s s d i s t r i b u t i o n a n d m a s s c o n s u m p t i o n
a n d to r e d u c e inflationary pressures d u e to localized overheating in a
largely a u t o c e n t r i c e c o n o m y . Finally, as well as its g e n e r a l role in c r e a t -
i n g t h e c o n d i t i o n s for m a s s p r o d u c t i o n a n d c o n s u m p t i o n a n d i n m e e t i n g
e x p a n d e d n o t i o n s o f t h e social r i g h t s o f c i t i z e n s h i p , t h e state's p r o v i s i o n
o f collective c o n s u m p t i o n h e l p e d t o socialize a n d t o l o w e r t h e social
r e p r o d u c t i o n costs o f l a b o u r - p o w e r .
M a n y o f t h e s e a c t i v i t i e s r e l a t i n g t o t h e w a g e r e l a t i o n w e r e closely t i e d
t o t h e F o r d i s t m o d e o f r e g u l a t i o n a s well a s t o t h e l a b o u r p r o c e s s a n d
Fordist accumulation regime. Particularly i m p o r t a n t here was state
s u p p o r t for r e s p o n s i b l e t r a d e u n i o n i s m , c o l l e c t i v e b a r g a i n i n g , i n d u s t r i a l
m o d e r n i z a t i o n , t h e c o n s o l i d a t i o n o f big b u s i n e s s a n d bi- o r t r i p a r t i t e
f o r m s o f c o r p o r a t i s m . W h i l e r a t h e r different p a t t e r n s o f t r a d e u n i o n
organization could serve this p u r p o s e during the period of Fordist expan-
sion, t h e o n s e t o f crisis m a d e m o r e d e m a n d s o n t h e i n d u s t r i a l r e l a t i o n s
s y s t e m . T h u s , d u r i n g t h e p e r i o d o f stagflation, b i - o r t r i p a r t i t e c o n c e r t a -
tion played a major moderating role and contributed to comparatively
good economic p e r f o r m a n c e on the t h r e e key m a c r o e c o n o m i c criteria in
Fordist e c o n o m i e s - e m p l o y m e n t , inflation a n d g r o w t h - r e l a t i v e t o n o n -
c o r p o r a t i s t s y s t e m s ( G a r r e t t 1998; K a t z e n s t e i n 1985; K e m a n e t al. 1987;
N o t e r m a n s 2 0 0 0 ; S c h a r p f 1 9 9 1 ; W e s t e r n 1997; W i n d o l f 1990). A t t h e s a m e
time t h e d o m i n a n c e of the Fordist m o d e of growth in these relatively
closed e c o n o m i e s e n a b l e d t h e K W N S to link the interests of organized
d o m e s t i c c a p i t a l a n d o r g a n i z e d l a b o u r ( e s p e c i a l l y m a l e skilled w o r k e r s )
i n p r o g r a m m e s o f full e m p l o y m e n t a n d social w e l f a r e i n s o f a r a s t h e
i n d i v i d u a l a n d social w a g e c o u l d f u n c t i o n as a s o u r c e of d e m a n d for
 78 The Keynesian Welfare National State

i n d u s t r y o r i e n t e d t o tlie d o m e s t i c m a r k e t . S u c h c o r p o r a t i s t b a r g a i n i n g
s o m e t i m e s involved the use of i m p r o v e d pension entitlements as part of
t h e social w a g e i n e x c h a n g e for w a g e r e s t r a i n t . I n s o f a r a s t h e s e e n t i t l e -
m e n t s w e r e n o t fully f u n d e d , if at all, h o w e v e r , this f o r m of d e f e r r e d w a g e
s e r v e d t o p o s t p o n e r a t h e r t h a n solve e c o n o m i c p r o b l e m s (see c h a p t e r 5 ) .
T h e p r i m a r y a s p e c t o f t h e m o n e y f o r m i n A t l a n t i c F o r d i s m a s far a s
t h e K W N S i s c o n c e r n e d w a s its c h a r a c t e r a s n a t i o n a l credit m o n e y . T h e
d e v e l o p m e n t o f a d e q u a t e n a t i o n a l , m a c r o e c o n o m i c statistics a n d t h e
s t e a d y e x p a n s i o n o f t h e p e a c e t i m e state b u d g e t g a v e t h e K W N S far m o r e
l e v e r a g e i n fiscal a n d m o n e t a r y t e r m s t o s t e e r t h e e c o n o m y t h a n t h e
liberal state h a d i n t h e p e r i o d o f c o m p e t i t i v e c a p i t a l i s m . W h i l e t h e
success of fine-tuning can certainly be exaggerated (especially as it was
o f t e n o v e r d e t e r m i n e d b y e l e c t o r a l c a l c u l a t i o n i n cases w h e r e c e n t r a l
b a n k s lacked real a u t o n o m y ) , the general increase in public spending did
m a k e a m a j o r c o n t r i b u t i o n t o c r e a t i n g t h e c o n d i t i o n s for c o n t i n u e d
expansion. In addition to the role of public spending and borrowing,
p r i v a t e d e b t also p l a y e d a m a j o r r o l e i n t h e p o s t w a r b o o m . D e b t w a s
an increasingly important element in financing fixed investment and
w o r k i n g capital for b u s i n e s s ; a n d c o n s u m e r credit h a d a m a j o r r o l e i n
enabling t h e growth of mass c o n s u m p t i o n . In turn, lubricated by public
a n d p r i v a t e credit, g r o w t h h e l p e d t o l e g i t i m a t e K e y n e s i a n w e l f a r e p o l i -
cies, a n d t o g e n e r a t e t h e t a x r e v e n u e s for c o l l e c t i v e c o n s u m p t i o n , w e l f a r e
r i g h t s a n d social r e d i s t r i b u t i o n , a s well a s for i n f r a s t r u c t u r e p r o v i s i o n . I t
also h e l p e d to c o n s o l i d a t e a social basis for t h e F o r d i s t a c c u m u l a t i o n
r e g i m e b a s e d o n a class c o m p r o m i s e b e t w e e n i n d u s t r i a l c a p i t a l a n d
organized labour.
A l l o f t h i s m e a n t t h a t , a t least d u r i n g t h e e x p a n s i o n p h a s e o f A t l a n t i c
F o r d i s m , t h e role o f m o n e y a s a n i n t e r n a t i o n a l c u r r e n c y w a s s e c o n d a r y .
T h i s a s p e c t was m a n a g e d t h r o u g h t h e c o m b i n a t i o n o f t h e B r e t t o n W o o d s
m o n e t a r y regime and the G A T T trade regime. Indeed, most national
e c o n o m i e s w e r e a c t u a l l y m o r e closed o n t h e i r c a p i t a l t h a n t h e i r t r a d e
a c c o u n t s , w i t h n a t i o n a l s t a t e s e n j o y i n g effective c a p i t a l c o n t r o l s , f i x e d b u t
a d j u s t a b l e e x c h a n g e r a t e s a n d significant a n d l e g i t i m a t e t r a d e c o n t r o l s
in place or to hand. This enabled t h e m to m a n a g e the national e c o n o m y
with reference to w h a t o n e Keynesian economist, Hicks (1959), t e r m e d
a n a t i o n a l l a b o u r s t a n d a r d ( t h e c o m m i t m e n t t o full e m p l o y m e n t ) r a t h e r
than to some monetary standard (the commitment to a fixed exchange
r a t e ) s o t h a t e c o n o m i c policy a d j u s t m e n t a n d i n t e r v e n t i o n w e r e p r i m a r -
ily o r i e n t e d t o e c o n o m i c g r o w t h a n d full e m p l o y m e n t r a t h e r t h a n
d e f e n c e of a given e x c h a n g e rate. T h e c o m m i t m e n t to a n a t i o n a l l a b o u r
standard and the ability to m a i n t a i n it was gradually u n d e r m i n e d ,
h o w e v e r , as, i n t h e face o f i n c r e a s i n g f l o w s o f s t a t e l e s s m o n e y a n d n e a r -
m o n e y instruments, national g o v e r n m e n t s chose, sometimes reluctantly.
 The Keynesian Welfare National State 79

s o m e t i m e s willingly, t o a b a n d o n c a p i t a l c o n t r o l s a n d a d o p t a f l o a t i n g
e x c h a n g e r a t e system. T h e U S A w a s a p a r t i a l e x c e p t i o n t o this g e n e r a l
p i c t u r e , o f c o u r s e , b e c a u s e its n a t i o n a l m o n e y w a s also t h e h e g e m o n i c
international currency. D u r i n g the e x p a n s i o n p h a s e of A t l a n t i c Fordism,
i t r e c y c l e d its t r a d e s u r p l u s e s b a c k t o E u r o p e t h r o u g h M a r s h a l l A i d ,
military s p e n d i n g a n d f o r e i g n d i r e c t a n d p o r t f o l i o i n v e s t m e n t . I n l a t e r
p h a s e s , h o w e v e r , t h e initially b e n e f i c i a l r o l e o f t h e U S d o l l a r b e c a m e
a n o t h e r s o u r c e o f i n s t a b i l i t y a n d crisis for A t l a n t i c F o r d i s m .
T h e a p p a r e n t s u c c e s s o f t h e K W N S w a s also g r o u n d e d i n t h e n a t u r e
of the postwar boom and the tax revenues it generated. Moreover,
insofar a s full e m p l o y m e n t w a s a c h i e v e d i n a l a b o u r m a r k e t t h a t w a s
relatively unified r a t h e r t h a n s e g m e n t e d , i t r e d u c e d t h e v o l u m e o f
p r i m a r y p o v e r t y a m o n g w o r k i n g families. T h i s i n t u r n c r e a t e d r o o m for
m o r e g e n e r o u s i n c o m e m a i n t e n a n c e p r o g r a m m e s for o t h e r g r o u p s
(thereby sustaining and generalizing mass consumption) and/or welfare
e x p a n s i o n i n t o o t h e r a r e a s ( o f t e n t i e d t o t h e c h a n g i n g social r e p r o d u c -
tion r e q u i r e m e n t s of Fordism). In short, if the K W N S helped secure the
c o n d i t i o n s for F o r d i s t e c o n o m i c e x p a n s i o n , F o r d i s t e c o n o m i c e x p a n s i o n
h e l p e d s e c u r e t h e c o n d i t i o n s for e x p a n s i o n o f t h e K W N S .
Welfare rights based on national citizenship h e l p e d to generalize
n o r m s o f m a s s c o n s u m p t i o n a n d t h e r e b y c o n t r i b u t e d t o full e m p l o y m e n t
levels o f d e m a n d ; a n d t h e y w e r e s u s t a i n e d i n t u r n b y a n i n s t i t u t i o n a l i z e d
c o m p r o m i s e involving Fordist unions and Fordist firms. In s o m e cases
(notably in t h e U S A ) , collective bargaining at enterprise a n d sectoral
level was i m p o r t a n t in securing occupational welfare and t h e r e b y in
s e t t i n g p o s s i b l e b e n c h m a r k s for l a t e r g e n e r a l i z a t i o n i n a n d t h r o u g h s t a t e -
p r o v i d e d - b u t o f t e n still d u a l i s t i c - w e l f a r e . S e c u r i n g e c o n o m i c g r o w t h
w i t h full e m p l o y m e n t a n d e x t e n d i n g w e l f a r e r i g h t s w e r e i m p o r t a n t axes
o f p a r t y political c o m p e t i t i o n i n all A t l a n t i c F o r d i s t societies. Finally, w e
s h o u l d n o t e t h a t s o m e costs o f t h e F o r d i s t c o m p r o m i s e a n d t h e K W N S
were borne within Fordist societies themselves by the relative decline of
a g r i c u l t u r e , t h e t r a d i t i o n a l p e t i t e b o u r g e o i s i e , small a n d m e d i u m f i r m s ;
b y t h e d e c l i n e o f cities, r e g i o n s a n d s e c t o r s t h a t c o u l d f i n d n o c o m p e t i -
t i v e r o l e i n t h e c i r c u i t s o f A t l a n t i c F o r d i s m ; b y w o r k e r s e m p l o y e d i n dis-
advantaged parts of segmented labour markets; and, especially in liberal
welfare r e g i m e s , b y w o m e n s u b j e c t t o t h e d u a l b u r d e n o f p a i d a n d
d o m e s t i c l a b o u r . M i g r a n t l a b o u r also h a d a n i m p o r t a n t r o l e i n t h i s
spatio-temporal fix. For, as Klein-Beekman notes, 'Fordist state-society
r e l a t i o n s w e r e p a r t l y e n a b l e d b y t h i s shifting a r t i c u l a t i o n o f spatiality.
I n t e r n a t i o n a l m i g r a t i o n was i n e x t r i c a b l y l i n k e d t o t h e a t t e m p t t o e s t a b -
lish a n e x c l u s i o n a r y p o l i t i c a l - e c o n o m i c o r d e r c e n t r e d a r o u n d t h e w e l f a r e
s t a t e a n d b a s e d u p o n u n i v e r s a l c r i t e r i a o f i n c l u s i o n for its c i t i z e n s ' (1996:
440; s e e also S o y s a l 1994).
 80 The Keynesian Welfare National State

O n e o f fhe m e c h a n i s m s for d e f e r r i n g t h e c o n t r a d i c t i o n s o f A t l a n t i c
F o r d i s m a n d t h e K W N S a n d d i s p l a c i n g ( o r r e d i s t r i b u t i n g ) t h e i r costs w a s
inflation. B a s e d o n t h e c a p a c i t y o f b a n k s a n d t h e state t o e x p a n d c r e d i t ,
inflation s e r v e d t o ( p s e u d o - ) v a l i d a t e o t h e r w i s e u n p r o f i t a b l e p r o d u c t i o n
a n d t o m a i n t a i n h i g h levels o f c a p a c i t y u t i l i z a t i o n a n d e m p l o y m e n t
( L i p i e t z 1985). P r o v i d e d t h a t all t h e r e l e v a n t e c o n o m i e s h a d similar m i l d
r a t e s o f inflation o r t h a t h i g h e r inflation e c o n o m i e s c o u l d e n g a g e i n o c c a -
s i o n a l m o d e s t d e v a l u a t i o n s , this w a s n o t a p r o b l e m i n t e r m s o f i n t e g r a t -
i n g t h e c i r c u i t o f A t l a n t i c F o r d i s m ( A g l i e t t a 1982). B u t i t c a m e a t t h e
c o s t o f i n c r e a s e d e c o n o m i c p r o b l e m s l a t e r , r e f l e c t e d i n t h e typical
A t l a n t i c F o r d i s t p r o b l e m o f stagflation ( a c o m b i n a t i o n o f s t a g n a t i o n a n d
inflation t h a t i s i m p r o b a b l e i n l i b e r a l c o m p e t i t i v e c a p i t a l i s m b u t q u i t e
p o s s i b l e u n d e r t h e Fordist m o d e o f r e g u l a t i o n ) . I t also h a d significant
r e d i s t r i b u t i v e effects i n class, s e c t o r a l a n d r e g i o n a l t e r m s . T h u s , a m o n g
o t h e r effects, inflation t e n d e d t o r e d i s t r i b u t e m a r k e t s h a r e a n d profits i n
f a v o u r o f big c a p i t a l a t t h e e x p e n s e o f small a n d m e d i u m e n t e r p r i s e s
( G a l b r a i t h 1967; N i t z a n 1998, 2 0 0 1 ) . O t h e r costs w e r e b o r n e b e y o n d
Fordist societies by e c o n o m i c a n d political spaces that w e r e integrated
i n t o i n t e r n a t i o n a l r e g i m e s (such a s t h o s e for c h e a p oil o r m i g r a n t l a b o u r )
necessary to Atlantic Fordism's continued growth, but were not them-
selves included within the Fordist c o m p r o m i s e . A t l a n t i c F o r d i s m was
also e n a b l e d t h r o u g h a J a n u s - f a c e d t e m p o r a l f i x . O n t h e o n e h a n d , i t
d e p e n d e d on accelerated (and unsustainable) superexploitation of
n a t u r e ( e s p e c i a l l y r a w m a t e r i a l s a n d n o n - r e n e w a b l e r e s o u r c e s laid d o w n
o v e r m i l l e n n i a , such a s fossil fuels). A n d , o n t h e o t h e r h a n d , i t p r o d u c e d
e n v i r o n m e n t a l p o l l u t i o n a n d social p r o b l e m s t h a t i t d i d n o t a d d r e s s
w i t h i n its o w n t e m p o r a l h o r i z o n s - as if w o r k i n g on t h e p r i n c i p l e of apres
moi, la deluge. This i n v o l v e d t h e d e f e r r a l of c u r r e n t e n v i r o n m e n t a l costs
of Fordism (regarding both the renewability of resources and the 'sink'
function of t h e e n v i r o n m e n t ) i n t o an indefinite future (see, for example,
A l t v a t e r 1 9 9 3 : 2 4 7 - 7 8 ; B r e n n a n 1995; S t a h e l 1999). A t t h e s a m e t i m e , t h e
t e m p o r a l r h y t h m s of t h e K W N S w e r e oriented to m a n a g i n g the business
a n d e l e c t o r a l cycles r a t h e r t h a n t o p r o b l e m s a s s o c i a t e d w i t h far s h o r t e r
or longer horizons (such as those of round-the-clock financial trading or
t h o s e of long w a v e s of a c c u m u l a t i o n ) . It w a s i n c r e a s i n g difficulties in
m a i n t a i n i n g this s p a t i o - t e m p o r a l f i x o f A t l a n t i c F o r d i s m t h a t h e l p e d
trigger attempts to transform the K W N S .

5. Crisis

T h e K W N S u n d e r w e n t a crisis i n t h e 1970s a n d 1980s. T h i s h a d v a r i o u s

g e n e r a l e c o n o m i c , p o h t i c a l a n d s o c i o c u l t u r a l c a u s e s . T h e r e w e r e also
 The Keynesian Welfare National State 81

m o r e specific, c o n j u n c t u r a l f a c t o r s t h a t affected t h e t i m i n g , f o r m s a n d
i n c i d e n c e o f t h e crisis i n p a r t i c u l a r cases. F o r crises in/of F o r d i s m a r e
inevitably o v e r d e t e r m i n e d . T h e typical manifestation of t h e e c o n o m i c
crisis in F o r d i s m w a s a g r o w i n g s t a g f l a t i o n a r y t e n d e n c y - t h a t reflected
t h e d i s t i n c t i v e g r o u n d i n g o f its m o d e o f r e g u l a t i o n i n t h e w a g e a n d
m o n e y f o r m s - a n d a t e n d e n t i a l d e c l i n e i n t h e r a t e a n d m a s s o f profit a s
the Fordist g r o w t h d y n a m i c was progressively exhausted. Stagflation
p r o b l e m a t i z e s the state's capacity to engage in contracyclical d e m a n d
m a n a g e m e n t a n d , i n t h e face o f i n c r e a s i n g i n t e r n a t i o n a l i z a t i o n , l e a d s t o
a d d i t i o n a l p r o b l e m s . T h e s e i n c l u d e t h e risk t h a t i n c r e a s e d d e m a n d i s m e t
from a b r o a d r a t h e r t h a n d o m e s t i c p r o d u c t i o n ; t h e s t a t e ' s g r o w i n g i n a b i l -
ity t o c o n t r o l i n t e r e s t r a t e s a n d / o r e x c h a n g e r a t e s ; a n d , w i t h e a c h
successive r o u n d o f stagflation, g r o w i n g p u b l i c d e b t a t a t i m e w h e n
i n t e r n a t i o n a l i z a t i o n w a s l i n k e d t o r i s i n g i n t e r e s t r a t e s . B u t this crisis-
t e n d e n c y was usually o v e r c o m e t h r o u g h a c o m b i n a t i o n of crisis-induced
economic restructuring and incremental institutional changes. As such
p r o b l e m s m o u n t e d , h o w e v e r , t h e crisis o / F o r d i s m b e g a n t o m a n i f e s t
itself s t r u c t u r a l l y i n t h e b r e a k d o w n o f its t y p i c a l c r i s i s - m a n a g e m e n t
m e c h a n i s m s or, as O f f e e x p r e s s e d it, in a crisis of c r i s i s - m a n a g e m e n t
(Offe 1984); a n d , strategicaUy, i n t h e a t t e m p t t o r e a l i g n social f o r c e s
a r o u n d alternative accumulation strategies, state projects a n d h e g e m o n i c
visions. T h i s w a s r e i n f o r c e d b y crises i n o t h e r a s p e c t s o f t h e m o d e o f
regulation, m o d e of societalization a n d overall spatio-temporal fix w h h
which Atlantic Fordism was associated.

Economic crisis
Economically, the continued growth of the K W N S u n d e r m i n e d s o m e of
the conditions that h a d sustained Fordist accumulation. This illustrates
h o w f o r m s e r v e s t o p r o b l e m a t i z e f u n c t i o n ( J e s s o p 1982). F o l l o w i n g t h e
initial one-off b o o s t t o p r o d u c t i v i t y t h a t c a m e f r o m t h e t r a n s i t i o n t o m a s s
production in a given branch of production, further increments b e c a m e
h a r d e r t o a c h i e v e b o t h t e c h n i c a l l y a n d socially. T h e s e a r c h t o a c h i e v e
f u r t h e r e c o n o m i e s o f scale a n d t o c o m p e n s a t e for r e l a t i v e m a r k e t satu-
ration in their h o m e markets p r o m p t e d Fordist firms to expand into
f o r e i g n m a r k e t s . T h e y also b e g a n t o r e s o r t t o f o r e i g n c r e d i t t o r e d u c e
b o r r o w i n g costs a n d t o t r a n s f e r p r i c i n g a n d / o r f o r e i g n t a x h a v e n s t o
r e d u c e t a x bills. Y e t t h i s also b e g a n t o u n d e r m i n e t h e r e l a t i v e c l o s u r e o f
the national e c o n o m y as an object of e c o n o m i c m a n a g e m e n t . T h e r e w e r e
a l s o limits t o t h e e x t e n t t o w h i c h F o r d i s m c o u l d b e e x t e n d e d i n t o all
b r a n c h e s o f p r o d u c t i o n , i n c l u d i n g services. T h e g r o w i n g capital i n t e n s i t y
o f p r o d u c t i o n a n d t h e d e p e n d e n c e o f e c o n o m i e s o f scale o n full c a p a c -
ity u t i l i z a t i o n i n c r e a s e d t h e s t r i k e p o w e r o f o r g a n i z e d l a b o u r ; a n d t h e
82 The Keynesian Welfare National State

c o n t i n u i n g searcli for p r o d u c t i v i t y i n c r e a s e s t h r o u g h w o r k intensification

led to growing alienation on t h e s h o p floor.
E c o n o m i c expansion m o r e generally and the gradual consolidation of
u n e m p l o y m e n t benefits a n d o t h e r f o r m s o f social s e c u r i t y also a l t e r e d
t h e u n d e r l y i n g ( s t r u c t u r a l ) b a l a n c e o f class f o r c e s i n f a v o u r o f o r g a n i z e d
l a b o u r in t h e e c o n o m i c s p h e r e - a shift t h a t w a s t r a n s l a t e d i n t o g r e a t e r
m i l i t a n c y i n t h e m i d - t o l a t e 1960s. T h i s b e c a m e c r i t i c a l a s t h e crisis in/of
F o r d i s m e m e r g e d ( e x p r e s s e d , i n t e r alia, i n declining profits) a n d c a p i t a l
tried t o r e s t r u c t u r e t h e l a b o u r p r o c e s s a n d r e s t r a i n l a b o u r costs. E c o -
n o m i c e x p a n s i o n also a l t e r e d t h e u n d e r l y i n g ( s t r u c t u r a l ) b a l a n c e o f
forces in favour of oil s u p p l i e r s , b e c a u s e t h e d y n a m i s m of t h e A t l a n t i c
Fordist accumulation regime d e p e n d e d not only on continued p r o d u c -
t i v i t y g r o w t h , b u t also, a n d critically, o n a n i n c r e a s i n g s u p p l y o f oil a t
d e c l i n i n g p r i c e s in r e a l t e r m s . T h e two oil s h o c k s in t h e 1970s a s s o c i a t e d
with the formation of the Organization of Petroleum Exporting Coun-
tries ( O P E C ) w e r e a r e f l e c t i o n o f this. I n a d d i t i o n , w e l f a r e e x p a n s i o n
also i n s t i t u t i o n a l i z e d a social w a g e w h o s e d o w n w a r d r i g i d i t y (if n o t its
u p w a r d m o m e n t u m ) could act a s a b r a k e o n profits a n d c a p i t a l accu-
mulation. These changes threatened the Fordist growth regime through
t h e i r a d v e r s e i m p a c t o n b o t h s i d e s o f t h e c a p i t a l - l a b o u r r e l a t i o n , affect-
i n g t h e m o n e t a r y i n c e n t i v e s t o invest a n d t o w o r k .
In addition to these domestically g e n e r a t e d crisis-tendencies and
m e c h a n i s m s , t h e e c o n o m i c a n d p o l i t i c a l effectiveness o f t h e K W N S i n
r e g u l a t i o n was f u r t h e r w e a k e n e d b y a v a r i a b l e m i x t u r e o f e x t r a v e r s i o n
( o u t w a r d f l o w s o f goods, services a n d c a p i t a l ) , p e n e t r a t i o n ( i n w a r d f l o w s )
a n d i n t e r i o r i z a t i o n (defined a s i n t e g r a t i o n i n t o a r e g i o n a l , i n t e r n a t i o n a l
o r g l o b a l division o f l a b o u r t h a t b l u r s t h e p r e v i o u s d i s t i n c t i o n b e t w e e n
d o m e s t i c a n d foreign c a p i t a l ) . S o m e m u l t i n a t i o n a l c o m p a n i e s ( M N C s )
a n d t r a n s n a t i o n a l b a n k s ( T N B s ) c o u l d also l o c a t e s o m e o f t h e i r activi-
ties a b r o a d i n o r d e r t o e s c a p e n a t i o n a l c o n t r o l s , o r p l a u s i b l y t h r e a t e n t o
d o s o i n o r d e r t o s e e k c o n c e s s i o n s from local, r e g i o n a l o r n a t i o n a l
g o v e r n m e n t s ( o n t h e significant e x t e n t t o w h i c h p l a c e - d e p e n d e n c e still
m a t t e r s , see c h a p t e r 5 ) . M a n y m a c r o e c o n o m i c policy i n s t r u m e n t s asso-
c i a t e d w i t h t h e K W N S b e c a m e less effective, l e a d i n g s t a t e m a n a g e r s t o
attempt to replace or buttress t h e m with other measures in the h o p e of
still b e i n g a b l e t o m a i n t a i n the typical e c o n o m i c policy o b j e c t i v e s o f t h e
K W N S - full e m p l o y m e n t , e c o n o m i c g r o w t h , s t a b l e prices a n d a ' s o u n d '
balance of p a y m e n t s . At t h e same time, as the internationalization of
b o t h m o n e t a r y a n d real f l o w s p r o c e e d e d a p a c e a n d i n v o l v e d e v e r m o r e
f i r m s , m a r k e t s a n d c o u n t r i e s , s t a t e s could n o l o n g e r act a s i f n a t i o n a l
e c o n o m i e s w e r e m o r e o r less closed a n d t h e i r g r o w t h d y n a m i c w e r e
autocentric. Moreover, alongside the impact of internationalization on
n a t i o n a l e c o n o m i c policy, r e g i o n a l a n d local e c o n o m i e s w e r e also
 The Keynesian Welfare National State 83

i n c r e a s i n g l y f o u n d t o h a v e t h e i r o w n specific p r o b l e m s . T h e s e c o u l d b e
solved n e i t h e r b y t h e u s u a l n a t i o n a l m a c r o e c o n o m i c policies n o r b y
standardized industrial and/or regional policies formulated at t h e centre.
Overall, it no longer a p p e a r e d so self-evident that national e c o n o m i c
s p a c e w a s t h e b e s t starting p o i n t for e c o n o m i c policies a i m e d a t p r o -
moting growth, innovation or competitiveness.
T h i s p r o m p t e d m o r e i n t e r e s t i n , a n d a shift t o w a r d s , s u p p l y - s i d e
i n t e r v e n t i o n a n d p o l i c i e s t h a t w o u l d i n s e r t local, r e g i o n a l o r n a t i o n a l
e c o n o m i c s p a c e s m o r e effectively i n t o t h e g l o b a l e c o n o m y i n t h e hope
of securing s o m e n e t benefit from internationalization. Small o p e n
e c o n o m i e s h a d a l r e a d y f a c e d this p r o b l e m d u r i n g t h e p o s t w a r b o o m , o f
c o u r s e ; n o w , e v e n t h e l a r g e r a n d p r e v i o u s l y r e l a t i v e l y closed e c o n o m i e s
w e r e b e i n g a b s o r b e d i n t o t h e b r o a d e r circuits o f c a p i t a l . M o r e g e n e r a l l y ,
a n e m e r g i n g crisis i n t h e f o r m s a n d l o n g - t e r m viability o f U S h e g e m o n y
w a s reflected i n s t r u g g l e s o v e r t h e s h a p i n g o f n e w i n t e r n a t i o n a l r e g i m e s
and the extent to which they and earlier postwar international regimes
should serve particular A m e r i c a n interests r a t h e r than capitalism m o r e
generally.^^
T h e i m p a c t o f t h e s e c h a n g e s p r o m p t e d a shift i n t h e p r i m a r y a s p e c t s
of the two principal contradictions of accumulation in the K W N S and
gave r e n e w e d force to o t h e r familiar expressions of t h e underlying con-
tradictions of capitalism that h a d n o n e t h e l e s s played a s e c o n d a r y role in
t h e A t l a n t i c F o r d i s t t y p e o f s p a t i o - t e m p o r a l f i x . T h e w a g e ( b o t h individ-
ual a n d social) c a m e i n c r e a s i n g l y t o b e s e e n , rightly o r w r o n g l y , a s a n
i n t e r n a t i o n a l cost of p r o d u c t i o n r a t h e r t h a n as a s o u r c e of d o m e s t i c
d e m a n d ; and m o n e y n o w increasingly circulates as international curren-
cies a n d o f f s h o r e m o n e y capital, t h e r e b y u n d e r m i n i n g K e y n e s i a n
d e m a n d m a n a g e m e n t on a national level and eventually forcing states
t o a b a n d o n t h e i r a t t e m p t s t o m a i n t a i n f i x e d e x c h a n g e r a t e s . T h i s switch
in the p r i m a r y aspect of the contradiction in the m o n e y form is related
t o t h e t e n d e n c y for t h e d y n a m i c o f i n d u s t r i a l c a p i t a l t o b e s u b o r d i n a t e d
t o t h e h y p e r m o b i l e logic o f f i n a n c i a l c a p i t a l a n d t h e t e n d e n c y for r e t u r n s
o n m o n e y c a p i t a l t o e x c e e d t h o s e o n p r o d u c t i v e c a p i t a l . B u t this shift i n
e c o n o m i c d o m i n a t i o n w i t h i n t h e c i r c u i t s of c a p i t a l is still s u b j e c t , of
course, to t h e principle of e c o n o m i c d e t e r m i n a t i o n by t h e long-run per-
f o r m a n c e o f p r o d u c t i v e c a p i t a l ( s e e c h a p t e r 1).
A f u r t h e r d i s r u p t i v e f a c t o r w a s t h e p a r a d i g m shift f r o m a F o r d i s t
growth model and associated accumulation strategy based on mass
production, scale e c o n o m i e s and mass c o n s u m p t i o n to o n e oriented to
flexible production, innovation, scope economies, innovation rents and
m o r e rapidly changing and differentiated p a t t e r n s of consumption.
W h i l e this p a r a d i g m shift w a s r o o t e d i n o n g o i n g c h a n g e s i n p r o d u c t i o n
a n d t h e s e a r c h for a l t e r n a t i v e s t o F o r d i s m , i t w a s o f t e n t a k e n u p a n d
84 The Keynesian Welfare National State

m a g n i f i e d a s p a r t o f tfie m o r e g e n e r a l a t t e m p t t o r e s t r u c t u r e a n d r e o r i -
e n t a c c u m u l a t i o n , r e g u l a t i o n a n d e v e n societalization. T h i s shift h a s h a d
m a j o r i m p l i c a t i o n s for e n t e r p r i s e , s e c t o r a l a n d spatial s t r a t e g i e s , e v e n
w h e r e F o r d i s m itself d i d n o t p r e v i o u s l y d o m i n a t e given sectors o r
n a t i o n a l e c o n o m i e s . I t p r o v i d e s a m a j o r f r a m e w o r k for m a k i n g s e n s e o f
t h e c u r r e n t crisis a n d i m p o s i n g s o m e c o h e r e n c e o n t h e s e a r c h for r o u t e s
o u t o f t h e crisis. I n a d d i t i o n , t h e a t t e m p t t o m o v e b e y o n d t h e l i m i t a t i o n s
of the Fordist labour process a n d the Atlantic Fordist accumulation
r e g i m e was d e e m e d by key e c o n o m i c a n d political forces to r e q u i r e not
o n l y a significant r e b a l a n c i n g of c a p i t a l - l a b o u r r e l a t i o n s b u t also a series
o f o r g a n i z a t i o n a l a n d i n s t i t u t i o n a l c h a n g e s t o facilitate t h e a d o p t i o n o f
n e w c o r e t e c h n o l o g i e s a n d p r o d u c t s a s t h e m o t i v e a n d c a r r i e r forces o f
e c o n o m i c e x p a n s i o n . T h i s p o s e d p r o b l e m s for f i r m s a n d states c o n c e r n -
ing h o w b e s t t o m a n a g e t h e t r a n s i t i o n t o t h e n e x t l o n g w a v e o f e c o n o m i c
e x p a n s i o n , a n d this, i n t u r n , t y p i c a l l y r e q u i r e d c h a n g e s i n t h e i r s p a t i o -
t e m p o r a l h o r i z o n s , c a p a c i t i e s a n d a c t i v i t i e s (see c h a p t e r 5),
O t h e r e c o n o m i c f a c t o r s t h a t w e a k e n e d t h e K W N S i n c l u d e d t h e chal-
l e n g e s p o s e d b y l o w e r - w a g e b u t increasingly h i g h - t e c h E a s t A s i a n
e c o n o m i e s ; t h e shift f r o m m o r e s u p p l y - d r i v e n t o m o r e d e m a n d - d r i v e n
forms of p r o d u c t i o n (often paradigmatically summarized, b u t n e v e r ade-
q u a t e l y d e s c r i b e d , a s w e shall s e e i n c h a p t e r 3 , a s t h e shift f r o m F o r d i s m
t o p o s t - F o r d i s m ) ; t h e f e m i n i z a t i o n o f t h e l a b o u r force (with its i m p a c t
o n t h e family f o r m a n d t h e family w a g e t h a t h a d b o t h p l a y e d k e y roles
i n t h e K W N S ) ; a n d t h e g r o w i n g r e c o g n i t i o n o f t h e e n v i r o n m e n t a l limits
o f t h e F o r d i s t m o d e o f g r o w t h a s i t intensified i n t h e p i o n e e r cases a n d
s p r e a d to o t h e r e c o n o m i e s - a r e c o g n i t i o n t h a t affected n o t o n l y en-
v i r o n m e n t a l m o v e m e n t s b u t also t h e d r i v i n g forces o f F o r d i s m .

Fisco-financial crisis
A s o n e f o r m o f t h e capitalist t y p e o f s t a t e , t h e K W N S m u s t b e c o n s i d -
e r e d a s a t a x s t a t e (see t a b l e 1.4 i n c h a p t e r 1). A s t h e K W N S e x p a n d e d ,
s o d i d its t a x t a k e . M o r e o v e r , a s p u b l i c s e c t o r e m p l o y m e n t a n d s p e n d i n g
e x p a n d e d r e l a t i v e t o t h e p r i v a t e sector, t h e i n c o m e level a t w h i c h t a x e s
b e g a n fell t o i n c l u d e m o r e o f t h e w o r k i n g class. T h e crisis o f F o r d i s m
e x e r t e d a ' s c i s s o r s ' effect o n K W N S f i n a n c e s . O n t h e r e v e n u e side, i t
r e d u c e d t h e t a x b a s e for social s e c u r i t y p a y m e n t s insofar a s t h e s e w e r e
tied t o w a g e - e a r n e r a n d / o r p a y r o l l taxes a t a t i m e w h e n u n e m p l o y m e n t
b e g a n t o i n c r e a s e . C a p i t a l ' s c o n t r i b u t i o n t o s t a t e r e v e n u e s also fell
b e c a u s e o f t h e d e c l i n e i n g r o s s profits a n d t h e r e d i s t r i b u t i o n o f tax
b u r d e n s t o p r o t e c t p o s t - t a x profit levels. T h i s w a s r e i n f o r c e d t o t h e e x t e n t
t h a t capital w a s m o b i l e a n d t h e r e b y a b l e t o escape n a t i o n a l taxes - or,
with or w i t h o u t t h e connivance of state managers, could plausibly
 The Keynesian Welfare Narional State 85

t h r e a t e n t o d o s o . A t t h e s a m e t i m e , t h e crisis i n c r e a s e d d e m a n d s for
e x p e n d i t u r e o n i n c o m e m a i n t e n a n c e (for e x a m p l e , u n e m p l o y m e n t , e a r l y
r e t i r e m e n t a n d f a m i l y benefit p a y m e n t s ) a n d , via t h e social r e p e r c u s s i o n s
o f u n e m p l o y m e n t a n d r e c e s s i o n , o n o t h e r w e l f a r e services ( s u c h a s
h o u s i n g , h e a l t h a n d f a m i l y p o l i c i e s ) . T h i s w a s reflected i n a m o r e r a p i d
i n c r e a s e i n s t a t e e x p e n d i t u r e s t h a n t a x r e c e i p t s d u r i n g t h e 1970s a n d
1980s i n m o s t O E C D c o u n t r i e s . M o r e o v e r , i n s o f a r a s t h e s t a t e i n c r e a s e d
its r e a l a n d / o r t a x e x p e n d i t u r e s f o r t e c h n o l o g i c a l i n n o v a t i o n a n d e c o -
n o m i c r e s t r u c t u r i n g a n d / o r r e d u c e d its t a x e s o n c a p i t a l i n g e n e r a l , this
f u r t h e r l i m i t e d t h e r e s o u r c e s a v a i l a b l e for social s p e n d i n g . T h e r e s u l t -
i n g g e n e r a l f i s c a l crisis o f t h e s t a t e w a s a s s o c i a t e d w i t h conflicts n o t o n l y
o v e r t h e l e v e l a n d i n c i d e n c e o f s t a t e e x p e n d i t u r e s , b u t also o v e r t h e
r e s t r u c t u r i n g o f t h e t a x a t i o n a n d c r e d i t s y s t e m s ( o n f i s c a l crisis, see e s p e -
ciaUy O ' C o n n o r 1973). T h i s w a s r e f l e c t e d i n g r o w i n g h o s t i l i t y t o t h e t a x
costs of the welfare state a n d / o r to the inflationary c o n s e q u e n c e s of
financing welfare expenditures t h r o u g h g o v e r n m e n t borrowing, a n d was
a m a j o r f a c t o r b e h i n d t h e n e o l i b e r a l r e g i m e shift i n t h e a n g l o p h o n e
Fordist economies and neoliberal policy adjustments in other Fordist
e c o n o m i e s . Y e t t h e c h a n c e s o f l o n g - t e r m r e t r e n c h m e n t i n social w e l f a r e
s p e n d i n g (especiaUy o n t h e c a p i t a l a c c o u n t ) w i t h o u t d e t e r i o r a t i n g p r o -
vision w e r e ( a n d still a r e ) l i m i t e d : a t m o s t , t h e r e c o u l d b e a r e d i s t r i b u -
t i o n o f t h e i r p r o v i s i o n b e t w e e n t h e p u b l i c , p r i v a t e a n d ' t h i r d ' sectors,
t o g e t h e r w i t h m o r e o r less m a r g i n a l a t t e m p t s a t c o s t - c u t t i n g . T h i s b e c a m e
o n e of the key elements, of course, in the neoliberal project of welfare
state restructuring. At t h e s a m e time, t h e r e was growing hostility to the
social a n d e c o n o m i c r e p e r c u s s i o n s o f w e l f a r e r e t r e n c h m e n t ( e s p e c i a l l y
i n h e a l t h , e d u c a t i o n a n d p e n s i o n s ) o n c e cuts e x t e n d e d b e y o n d m o r e
m a r g i n a l s t a t e a c t i v i t i e s a n d / o r t h r e a t e n e d t o affect c o r e e c o n o m i c a n d
political i n t e r e s t s r a t h e r t h a n m a r g i n a l social g r o u p s .
I n this sense, t h e o b j e c t i v e e c o n o m i c a n d social f u n c t i o n s o f t h e
K W N S - which are particular expressions of the m o r e general functions
o f t h e capitalist t y p e o f s t a t e i n r e l a t i o n t o t h e c o n t r a d i c t i o n s , d i l e m m a s ,
a s y m m e t r i e s a n d a n t a g o n i s m s o f t h e c a p i t a l r e l a t i o n - h a v e set limits t o
s t a t e d i s e n g a g e m e n t . H o w e v e r , a s w e shall s e e i n c h a p t e r s 5 a n d 6 , t h e r e
i s m o r e s c o p e for c h a n g e i n t h e e c o n o m i c t h a n t h e social d i m e n s i o n s o f
state intervention. T h e p a t h - d e p e n d e n t institutional and political lega-
cies o f t h e i n s t i t u t i o n a l i z e d c o m p r o m i s e a s s o c i a t e d w i t h t h e K W N S a l s o
serve to reinforce these limits in the short- to m e d i u m - t e r m . N o n e t h e -
less, t h e s e b a s i c limits d o n o t e x c l u d e ( a n d may, i n d e e d , e v e n e n c o u r a g e ,
for w a n t o f a n y t h i n g b e t t e r ) m a r g i n a l a d j u s t m e n t s i n p r o g r a m m e s , t h e
r e s c a l i n g of activities or a significant strategic reorientation of m o r e or
less c o n s t a n t s t a t e b u d g e t s . T h i s i s o n e a r e a w h e r e t h e d i f f e r e n c e s i n
welfare regimes and state forms discussed above have h a d a major
86 The Keynesian Welfare National State

i m p a c t on t h e scope for p u r s u i n g a n e o l i b e r a l r e g i m e shift in social policy.

T h e s t r a t e g i c selectivity o f states a n d t h e p a r t i s a n n a t u r e o f g o v e r n m e n t s
also m a t t e r h e r e ( s e e , for e x a m p l e , t h e c o n t r a s t b e t w e e n t h e r a d i c a l
n e o l i b e r a l r e g i m e shift i n u n i c a m e r a l N e w Z e a l a n d a n d t h e less d r a s t i c
n e o l i b e r a l policy t u r n in a f e d e r a l A u s t r a l i a ) .
I f o n e w e r e t o c o n s i d e r only t h e fiscal a n d b u d g e t a r y aspects o f t h e
w e l f a r e s t a t e , t w o k e y f e a t u r e s of its e c o n o m i c crisis w o u l d fall f r o m view.
First, i t i s i m p o r t a n t t o n o t e t h a t t h e crisis w a s n o t p u r e l y f i n a n c i a l . T h e
fact t h a t the financial crisis of t h e s t a t e was i n t e r p r e t e d at t h e time largely
in t e r m s of t h e excessive b u r d e n of social e x p e n d i t u r e s reflected a shift
i n t h e b a l a n c e o f e c o n o m i c a n d political forces r o o t e d i n t h e m o r e
g e n e r a l d y n a m i c o f F o r d i s m . T h e e m e r g e n c e o f n e w alliances w i t h inter-
ests i n o t h e r policies i m p l i e d t h a t r e n e w e d capitalist e x p a n s i o n w o u l d
n o t p r o d u c e a s i m p l e r e t u r n t o t h e situation t h a t h a d existed b e f o r e t h e
crisis. A n d , s e c o n d , t h e u n d e r l y i n g s t r u c t u r a l causes o f t h e crisis w o u l d
n o t d i s a p p e a r w i t h r e n e w e d e x p a n s i o n . T h e e c o n o m i c crisis o f t h e
w e l f a r e s t a t e was r o o t e d i n t h e g r o w i n g d i s c r e p a n c y b e t w e e n its activi-
ties a n d t h e discursively c o n s t i t u t e d ( b u t often m a t e r i a l l y r o o t e d ) n e e d s
of capital accumulation. Tasks that h a d benefited capital d u r i n g the
Fordist upswing acquired their o w n institutional inertia and vested inter-
ests e v e n t h o u g h t h e n e e d s o f c a p i t a l h a d c h a n g e d (or w e r e h e l d t o h a v e
d o n e s o a s t h e d o m i n a n t F o r d i s t a c c u m u l a t i o n s t r a t e g i e s w e r e chal-
l e n g e d ) a n d m a n y o f t h e policies i n h e r i t e d f r o m t h e p e r i o d o f F o r d i s t
e x p a n s i o n w e r e failing o r e v e n p r o v i n g c o u n t e r p r o d u c t i v e . T h u s , r e s o l v -
i n g t h e e c o n o m i c crisis w o u l d r e q u i r e t h e r e o r g a n i z a t i o n o f t h e accu-
m u l a t i o n r e g i m e , its m o d e s o f r e g u l a t i o n a n d its m o d e o f s o c i e t a l i z a t i o n ,
a s well a s p r i v a t e a n d p u b l i c e c o n o m i c r e t r e n c h m e n t .
T h e fiscal, financial and budgetary dilemmas of the welfare state must
be considered in relation to the overall structure and finances of state
e x p e n d i t u r e a n d t h e state's r o l e i n s e c u r i n g t h e e x t r a - e c o n o m i c c o n d i -
t i o n s for r e n e w e d c a p i t a l a c c u m u l a t i o n . T h u s , t h e t e n d e n t i a l e m e r g e n c e
of p o s t - F o r d i s m as a l a b o u r process, a c c u m u l a t i o n s t r a t e g y a n d societal
p a r a d i g m also b e g a n t o p o s e n e w p r o b l e m s for w e l f a r e s t a t e f i n a n c e . F o r
e x a m p l e , e v e n a s s u m i n g that s o m e t h i n g a p p r o a c h i n g 'full e m p l o y m e n t '
could be restored, the weight of part-time, temporary and discontinuous
employment patterns would prove much greater than under Fordism.
T h i s i n d i c a t e d a n e e d for n e w p a t t e r n s o f t a x a t i o n a n d w e l f a r e e n t i t l e -
m e n t s almost regardless of the particular variants of the K W N S that
existed in different countries. Likewise, with increasing international
capital mobility (especially in t h e service sector) and increasing com-
p e t i t i o n a m o n g s t a t e s t o a t t r a c t i n v e s t m e n t i n sunrise s e c t o r s , t h e c o n -
tribution of taxes on capital converged downwards. This situation is
likely t o c o n t i n u e i n t h e a b s e n c e o f a c o n c e r t e d t r a n s n a t i o n a l p o l i c y t o
raise corporate taxation. Similar p r o b l e m s are n o w being p o s e d by n e w
 The Keynesian Welfare National State 87

p h e n o m e n a such as international electronic commerce, which further

u n d e r m i n e s n a t i o n a l t a x r e g i m e s . T h e s e shifts w e r e also reflected i n t h e
b a l a n c e o f p o l i t i c a l forces a n d t h e t y p e o f d e m a n d s p l a c e d u p o n t h e
w e l f a r e s t a t e . M o r e generally, a s w e shall see below, t h e a l l e g e d n e e d for
new forms of flexibility in t h e organization of the labour process and
l a b o u r m a r k e t h a s h a d m a j o r i m p l i c a t i o n s for t h e f u n c t i o n s a n d o r g a n i -
z a t i o n o f t h e w e l f a r e state. T h e crisis o f F o r d i s m a n d t h e t r a n s i t i o n t o
p o s t - F o r d i s m h a v e affected n o t o n l y t h e levels a n d m e t h o d s o f f i n a n c i n g
w e l f a r e e x p e n d i t u r e b u t also t h e w a y s i n w h i c h t h e p o s t - F o r d i s t w e l f a r e
s t a t e a t t e m p t s t o p e r f o r m its f u n c t i o n s i n t h e v a l o r i z a t i o n o f c a p i t a l ,
social r e p r o d u c t i o n a n d social c o h e s i o n .

Political crises
Politically, t h e K W N S w a s v u l n e r a b l e t o g r o w i n g political r e s i s t a n c e t o
t a x a t i o n a n d s t a g f l a t i o n , t h e crisis i n p o s t w a r c o m p r o m i s e s b e t w e e n
i n d u s t r i a l c a p i t a l a n d o r g a n i z e d l a b o u r , a n d n e w e c o n o m i c a n d social
conditions and attendant p r o b l e m s that could not be m a n a g e d or
r e s o l v e d readily, i f a t all, t h r o u g h c o n t i n u i n g r e l i a n c e o n t o p - d o w n s t a t e
p l a n n i n g a n d / o r s i m p l e m a r k e t f o r c e s . I n a d d i t i o n , n e w conflicts a n d / o r
f o r m s o f s t r u g g l e e m e r g e d t h a t c o u l d n o t b e easily i n t e g r a t e d i n t o t h e
p o s t w a r c o m p r o m i s e ; t w o m a j o r e x a m p l e s w e r e t h e crisis o f c o r p o r a t i s m
a n d t h e rise o f n e w social m o v e m e n t s . T h e l a t t e r h a v e b e e n e s p e c i a l l y
i m p o r t a n t , a s t h e y d e v e l o p e d i n c r i s i s - p r o n e cities a n d w e r e o f t e n o r i -
e n t e d t o g l o b a l o r local r a t h e r t h a n n a t i o n a l issues. Finally, n e w p r o b -
l e m s also e m e r g e d , such a s p o l l u t i o n a n d n e w c a t e g o r i e s o f risk, w h i c h
p r o v e d less easy t o m a n a g e , r e g u l a r i z e o r g o v e r n w i t h i n t h e o l d f o r m s .
I t i s a l s o c l e a r t h a t t h e w e l f a r e s t a t e c a u s e d s o m e o f its o w n p r o b l e m s .
The rational-legal form of welfare provision is associated with b u r e a u -
c r a t i s m , t h e j u r i d i f i c a t i o n o f social r e l a t i o n s , p o l i t i c a l e m p i r e - b u i l d i n g ,
c e n t r a l i z a t i o n , c l i e n t e l i s m a n d t h e intensification o f p e r s o n a l d e p e n -
dence. Moreover, the professionalized and bureaucratized forms of help
a n d s u p p o r t a g g r a v a t e d social p r o b l e m s a n d i n c r e a s e d d e p e n d e n c e . I n
addition, in liberal welfare regimes, the combination of taxation, national
insurance a n d m e a n s - t e s t e d benefits systems created (and continues to
create) two problems; a poverty trap confronting the low-wage employed
(for w h o m i n c r e a s e d e a r n i n g s f r o m e m p l o y m e n t a r e c o u n t e r e d b y loss
o f b e n e f i t ) a n d t h e u n e m p l o y m e n t t r a p (which c o n c e r n s t h e n e t r e a l
increase in income w h e n an u n e m p l o y e d person takes a job). This d o u b l e
t r a p i s a v o i d e d i n social d e m o c r a t i c w e l f a r e r e g i m e s a n d s o m e c o n s e r v -
ative-corporatist welfare regimes. At the s a m e time, the forms in which
welfare policies were administered aggravated distributional and status
conflicts i n b o t h t h e m i d d l e a n d w o r k i n g classes. I t i s o f t e n t h e m i d d l e
classes w h o m a k e g r e a t e r u s e o f w e l f a r e benefits a n d e s p e c i a l l y o f t h e
88 The Keynesian Welfare National State

m o r e e x p e n s i v e benefits (for e x a m p l e e d u c a t i o n , liousing a n d h e a l t h ) ,

w h e t h e r these are provided through the public welfare system or through
t h e s o - c a l l e d 'fiscal w e l f a r e s t a t e ' r o o t e d i n t a x r e d u c t i o n s o n c e r t a i n
classes o f c o n s u m e r s p e n d i n g . I n d e e d , t h e r e l a t i o n s h i p s a m o n g public,
fiscal a n d o c c u p a t i o n a l p r o v i s i o n serve b o t h to d i s g u i s e t h e e x t e n t to
w h i c h t h e s t a t e s u p p o r t s t h e social r e p r o d u c t i o n o f t h e m i d d l e classes
a n d t o p r o v i d e n e w foci for d i s t r i b u t i o n a l a n d s t a t u s conflicts.
T h e r e i s also s o m e t r u t h i n criticisms t h a t t h e w e l f a r e s t a t e h a s a n
i n h e r e n t e x p a n s i o n a r y d y n a m i c insofar a s w e l f a r e n e e d s a r e often
d e f i n e d b y t h o s e w i t h a v e s t e d i n t e r e s t i n their e x p a n s i o n . " T h i s h o l d s
n o t o n l y for politicians ( s p u r r e d o n b y e l e c t o r a l c o m p e t i t i o n ) a n d welfare
a d m i n i s t r a t o r s a n d p r o f e s s i o n a l s (for w h o m w e l f a r e e x p a n s i o n implies
j o b s , c a r e e r d e v e l o p m e n t a n d e m p i r e - b u i l d i n g ) , b u t also for client g r o u p s
a n d t h e p o l i t i c a l l o b b i e s t h a t a r t i c u l a t e their i n t e r e s t s . T h i s h a s m a j o r
s t r u c t u r a l a s well a s r e s o u r c e i m p l i c a t i o n s for F o r d i s m , i n c l u d i n g t h e
i n c r e a s i n g social w e l f a r e b u d g e t d u r i n g t h e p o s t w a r b o o m a n d b e y o n d
a n d t h e r e s u l t i n g n e e d t o r e s t r u c t u r e t h e t a x a n d c r e d i t s y s t e m s t o gen-
erate the necessary revenues to finance that spending. This problem
b e c a m e m o r e a c u t e a s t h e social a n d e n v i r o n m e n t a l costs o f F o r d i s t
e x p a n s i o n a n d t h e d y n a m i c o f w e l f a r e p o l i c y - m a k i n g c r e a t e d n e w issues
a n d n e w i n t e r e s t s a r o u n d w h i c h social m o v e m e n t s c o u l d o r g a n i z e .
A m o n g t h e s e issues w e c a n n o t e t h e g r o w i n g d e c o m p o s i t i o n o f t h e
n u c l e a r family f o r m t h a t p l a y e d a k e y role i n F o r d i s t s o c i e t a l i z a t i o n b o t h
as a l o c u s of p r i v a t i z e d c o n s u m p t i o n a n d as t h e site for social a n d e m o -
t i o n a l i n t e g r a t i o n i n a n a t o m i z e d society ( H i r s c h a n d R o t h 1986). T h e
p r o p o r t i o n o f h o u s e h o l d s t h a t c o n f o r m t o t h e n u c l e a r family p a t t e r n also
b e g a n t o fall. T h i s c o n t i n u e s t o b e reflected i n g r e a t e r n e e d s for s t a t e
s u p p o r t (for e d u c a t i o n , sickness, single p a r e n t families, old age, etc.) a n d
a t t e m p t s t o e n c o u r a g e families t o b e a r t h e b u r d e n s o f y o u t h u n e m p l o y -
m e n t , s i c k n e s s a n d c a r e for t h e elderly. L i k e w i s e , i n n e r - c i t y d e c l i n e c o n -
c e n t r a t e d social as well as e c o n o m i c p r o b l e m s in a r e a s w i t h a declining
tax b a s e a n d i n c r e a s i n g n e e d s for welfare e x p e n d i t u r e a n d p r o g r a m m e s .
I t i s h e r e , a b o v e all, t h a t o n e f i n d s t h e social p r o b l e m s o f e d u c a t i o n ,
h o u s i n g , h e a l t h , s i n g l e h o u s e h o l d s a n d s i n g l e p a r e n t s , social i s o l a t i o n a n d
m e n t a l illness, a n d d e m o g r a p h i c i m b a l a n c e .
N e w f o r c e s b e c a m e a c t i v e i n l o b b y i n g for s t a t e s u p p o r t . T h e s e r a n g e d
from capital-labour cartels in declining industries and regions, t h r o u g h
e t h n i c m i n o r i t i e s a n d single p a r e n t s , t o a l t e r n a t i v e c u l t u r a l a n d social
m o v e m e n t s . T h e expansion of 'tax expenditures' to support t h e private
p r o v i s i o n o f social r e p r o d u c t i o n g o o d s a n d s e r v i c e s ( f r o m p e n s i o n s
t h r o u g h h o u s i n g a n d m e d i c a l i n s u r a n c e t o e d u c a t i o n ) also c r e a t e d a n e w
set o f p o l i c y - t a k i n g i n t e r e s t s a m o n g t a x - p a y e r s a s well a s c r e a t i n g v e s t e d
interests a m o n g capitalist c o n c e r n s (such as pension funds) that service
 The Keynesian Welfare National State 89

t h e m . I n t h e b o o m y e a r s t h e r e w e r e few f i n a n c i a l o r e l e c t o r a l c h e c k s o n
t h e s e i n c r e m e n t a l p r o c e s s e s - e s p e c i a l l y as t h e y e a r s of w e l f a r e e x p a n -
sion c o i n c i d e d w i t h r e d u c e d m i l i t a r y e x p e n d i t u r e s , rising p r o d u c t i v i t y
a n d full e m p l o y m e n t . T h e s e c h e c k s b e c a m e m o r e pressing d u r i n g t h e
1970s a n d 1980s. T h u s t h e crisis o f F o r d i s m w a s l i n k e d t o t h e f i s c a l crisis
o f t h e s t a t e a n d w i t h g r o w i n g e l e c t o r a l r e s i s t a n c e t o t h e t a x a t i o n for
welfare n e e d s . I n s o m e cases t h e e l e c t o r a l r e a c t i o n w a s t e m p o r a r y , i n
o t h e r s it p r o v i d e d t h e basis f o r a n e o l i b e r a l r e g i m e shift.
A f u r t h e r a s p e c t was t h a t t h e m o n e t a r y a n d legal f o r m s of social policy
a r e less a d e q u a t e t o t h e p r o b l e m s t h a t t h e social s t a t e w a s h a v i n g t o
h a n d l e . A t f i r s t , i t d e a l t w i t h s i m p l e e c o n o m i c c o n t i n g e n c i e s ( s u c h a s ill-
h e a l t h , cyclical u n e m p l o y m e n t , p r e g n a n c y , etc.) t h a t d i s r u p t e d t h e e a r n -
ings s t r e a m o f i n d i v i d u a l s a n d / o r families; t h e n i t e x p a n d e d f r o m a social
security s t a t e i n t o a w e l f a r e s t a t e t h r o u g h i n c r e a s i n g i n t e r v e n t i o n s i n t o
t h e field of collective c o n s u m p t i o n - p r o v i d i n g a w i d e n i n g r a n g e of b a s i c
welfare s e r v i c e s s u c h a s e d u c a t i o n , h o u s i n g a n d h e a l t h t h a t w e r e l i n k e d
t o n o t i o n s o f e q u a l i t y , social d e m o c r a c y a n d social r e d i s t r i b u t i o n ; l a t e r
still, i t g o t d e e p l y i n v o l v e d i n p e r s o n a l social s e r v i c e s a n d t h e h a n d l i n g
of sociopsychological problems ('people-processing' and the 'gover-
n a n c e o f t h e s o u l ' ) - l e a d i n g s o m e t o t a l k o f t h e rise o f t h e ' t h e r a p e u t i c
state'. Increasing attention was also paid to the deeper, structural roots
of individual e c o n o m i c contingencies (such as the o p e r a t i o n of the
l a b o u r m a r k e t o r h e a l t h a n d safety a t w o r k ) a n d , a p a r t f r o m t h e case o f
liberal w e l f a r e r e g i m e s , t h e r e w a s closer c o o r d i n a t i o n b e t w e e n e c o n o m i c
a n d social policy i n t h e s e a r e a s . Finally, t h e s t a t e m o v e d i n t o n e w f i e l d s
o f social p o l i c y ( s u c h a s t h e crisis o f t h e i n n e r city, r a c e r e l a t i o n s a n d
gender inequalities), which have complex roots in the overall m o d e of
s o c i e t a l i z a t i o n r a t h e r t h a n t h e o p e r a t i o n o f t h e capitalist e c o n o m y n a r -
rowly conceived.

Social crisis
T h e K W N S w a s also u n d e r m i n e d b y t w o sets o f e m e r g i n g t r e n d s i n t h e
lifeworld. T h e f i r s t o f t h e s e w a s a c o n t i n u i n g t e n d e n t i a l ' d e n a t i o n a l i z a -
t i o n ' of civil society. T h i s is reflected in t h e d e v e l o p m e n t of c o s m o p o l i -
tanism and 'tribalism' (or t h e rediscovery or invention of primordial,
affectual i d e n t i t i e s a t t h e e x p e n s e b o t h o f l i b e r a l i n d i v i d u a l i s m a n d o f
civic l o y a l t y t o a n ' i m a g i n e d ' n a t i o n a l c o m m u n i t y ) , a n d a n e x p a n s i o n o f
d i v e r s e social m o v e m e n t s t h a t n o w o p e r a t e a c r o s s n a t i o n a l b o u n d a r i e s .
T h i s w a s ( a n d still is) a s s o c i a t e d w i t h a crisis in t h e n a t i o n a l s t a t e , w h i c h
t a k e s different f o r m s a c c o r d i n g t o t h e n a t u r e o f t h e i m a g i n e d n a t i o n a l
c o m m u n i t y o n w h i c h i t i s b a s e d (see c h a p t e r 5 ) . T o g e t h e r , t h e s e p h e -
n o m e n a w e a k e n e d the sense o f national identity^' t h a t s h a p e d t h e K W N S
90 The Keynesian Welfare National State

i n its f o r m a t i v e p e r i o d a n d t h e r e b y w e a k e n e d t h e coalition o f forces t h a t

s u s t a i n e d it. T h e s e c o n d set of social t r e n d s c o n c e r n m o r e specific values,
social i d e n t i t i e s a n d interests a s s o c i a t e d w i t h t h e w e l f a r e state a n d t h e
g r o w t h o f social m o v e m e n t s o p p o s e d t o o n e o r m o r e aspects o f t h e
K W N S . T h i s i s reflected i n r e j e c t i o n o f t h e social d e m o c r a t i c a n d / o r
Atlantic Fordist n o r m a t i v e c o m m i t m e n t to class-based egalitarianism
a n d its a c c o m p a n y i n g c l a s s - b a s e d r e d i s t r i b u t i v e politics; in a p l u r a l i s t i c
i d e n t i t y p o l i t i c s a n d 'politics o f d i f f e r e n c e ' i n w h i c h t h e r e i s g r e a t e r
e m p h a s i s o n m u t u a l respect, a u t h e n t i c i t y a n d a u t o n o m y ; i n a shift from
n a t i o n a l c i t i z e n s h i p to 'a m o r e u n i v e r s a l m o d e l of m e m b e r s h i p [in a
state], anchored in de territorialized notions of p e r s o n s ' rights' (Soysal
1 9 9 4 : 3 ) ; i n i n c r e a s e d c o n c e r n for p e r s o n a l e m p o w e r m e n t r a t h e r t h a n for
the b u r e a u c r a t i c a d m i n i s t r a t i o n o f l e g a l rights, m o n e t i z e d e n t i t l e m e n t s
a n d u n i f o r m p u b l i c services; a n d i n t h e e x p a n s i o n o f t h e s o - c a l l e d ' t h i r d '
sector, which supposedly operates flexibly outside of the framework of
p u r e m a r k e t s a n d t h e b u r e a u c r a t i c state ( b u t o f t e n i n close c o n j u n c t i o n
with them as a 'shadow market' a n d 'shadow state').
T h e interrelated crisis-generating dynamics of accumulation, changes
in social r e l a t i o n s intelligible in t e r m s of t h e d y n a m i c of F o r d i s t societies,
and the welfare state were reinforced by important exogenous factors.''
C h i e f a m o n g t h e s e i s d e m o g r a p h i c c h a n g e . T h i s h a s affected b o t h t h e
s c o p e a n d t h e f i n a n c e s o f t h e w e l f a r e s t a t e . I n p a r t i c u l a r , t h e r a t i o o f con-
t r i b u t o r s t o b e n e f i c i a r i e s h a s c h a n g e d d r a m a t i c a l l y i n t h e last 3 5 years, a s
t h e n u m b e r o f t h o s e i n r e t i r e m e n t has i n c r e a s e d ( e s p e c i a l l y a m o n g t h e
o l d e s t c o h o r t s w i t h their g r e a t e r n e e d for l o n g - t e r m m e d i c a l a t t e n t i o n )
a n d t h e n u m b e r o f t h o s e w h o a r e e c o n o m i c a l l y a c t i v e h a s fallen (in p a r t
b e c a u s e o f t h e r e s o r t i n t h e 1980s a n d 1990s t o f o r c e d o r v o l u n t a r y e a r l y
r e t i r e m e n t as a m e a n s of reducing the active l a b o u r force). I m m i g r a t i o n
a s a p a r t i a l s o l u t i o n t o this l a t t e r p r o b l e m h a s g e n e r a t e d its o w n social a n d
p o l i t i c a l p r o b l e m s i n t u r n . C o s t s i n t h e w e l f a r e s t a t e also t e n d t o rise dis-
p r o p o r t i o n a t e l y - e d u c a t i o n lasts l o n g e r , m e d i c a l p r o g r e s s h a s i n c r e a s e d
costs, o n e - p a r e n t families r e q u i r e m o r e s u p p o r t a n d F o r d i s t p r o d u c t i v i t y -
raising t e c h n i q u e s a r e less a p p l i c a b l e t o w e l f a r e activities ( b u t s e e c h a p t e r
3 o n t h e c o n t i n g e n t n a t u r e o f this differential p r i c e a n d p r o d u c t i v i t y t r a p
a n d o n a l t e r n a t i v e exits t h e r e f r o m ) . T h i s intensified t h e f i s c a l s q u e e z e o n
w e l f a r e policies a n d m a d e t h e s e a r c h for s o l u t i o n s m o r e u r g e n t .

Initial responses to the crises in/of Fordism and the KWNS

T h e d e v e l o p m e n t o f t h e K W N S w a s still m a r k e d b y t e m p e r a t e a n d o p t i -
m i s t i c r e f o r m i s m i n t h e 1960s. T h e initial r e s p o n s e t o t h e crisis o f F o r d i s m
d i d n o t p r o d u c e d e m a n d s for a r a d i c a l t r a n s f o r m a t i o n o f t h e e c o n o m y
o r t h e s t a t e . I n s t e a d , i t intensified t h e f e a t u r e s o f t h e K W N S , s u p p l e -
m e n t i n g a n d reinforcing t h e m with o t h e r measures. W h a t occurred was
 The Keynesian Welfare National State 91

a c o n j u n c t u r a l t r a n s f o r m a t i o n o f t h e K W N S r o o t e d i n its a t t e m p t s t o
m a n a g e t h e crisis o f F o r d i s m a n d t o limit t h e r e p e r c u s s i o n s o f t h a t crisis
o n its o w n i n t e r n a l o r g a n i z a t i o n a n d u n i t y . T h u s :

Governments first responded to the economic difficulties by following tra-

ditional formulas that entailed maintaining or increasing entitlements and
expenditure in an effort to fight recession and unemployment and mitigate
their social consequences. After a decade of 'fumbhng', government after
government regardless of pohtical color embarked on new policies that
often involved reining in the increase in expenditure and increasing
revenue. (Huber and Stephens 2001: 207)

I n t h e initial ' f u m b l i n g ' p e r i o d , political a c t o r s initially faced t h e false

d i l e m m a of m o u n t i n g a o n e - s i d e d a t t a c k on w a g e s as a cost of p r o d u c -
t i o n o r p r o v i d i n g o n e - s i d e d s u p p o r t for w a g e s a s a s o u r c e o f n a t i o n a l e c o -
nomic demand. An analogous dilemma concerned abandoning demand
m a n a g e m e n t in favour of monetarism (national or international) versus
a n e q u a l l y o n e - s i d e d r e s o r t t o ' K e y n e s i a n i s m i n o n e c o u n t r y ' a n d subsi-
dies for crisis-hit i n d u s t r i e s . This, i n t u r n , w a s l i n k e d t o t h e c h o i c e b e t w e e n
a o n e - s i d e d l i b e r a l i z a t i o n of e c o n o m i e s ( e s p e c i a l l y financial m a r k e t s )
t h a t w o u l d initiaUy r e i n f o r c e t h e d i s s o c i a t i o n o f f i n a n c i a l a n d i n d u s t r i a l
capital and subordinate the latter to the former, and a one-sided pursuit
of neo-mercantilist or protectionist strategies t h a t might e n c o u r a g e or
i m p o s e g r e a t e r c o o p e r a t i o n b e t w e e n t h e s e t w o rival f r a c t i o n s o f c a p i t a l .
A r e l a t e d d i l e m m a for t h e p o l i t i c a l m a n a g e r s o f t h e K W N S c o n c e r n e d
r e t r e n c h i n g t h e w e l f a r e s t a t e a n d a t t a c k i n g t h e social w a g e a s a cost o f
international production versus defending welfare e m p l o y m e n t , public
services a n d t r a n s f e r s w i t h o u t r e g a r d t o t h e i r i m p a c t o n i n t e r n a t i o n a l
c o m p e t i t i v e n e s s . W h a t unified t h e s e o p p o s e d b u t e q u a l l y false s o l u t i o n s
t o t h e crisis o f A t l a n t i c F o r d i s m a n d t h e K W N S w a s t h e i r o n e - s i d e d
emphasis on tackling o n e or other m o m e n t of the principal contradictions
o f t h e p r e v a i l i n g a c c u m u l a t i o n r e g i m e a n d its m o d e o f r e g u l a t i o n . T h e y
differ i n o p t i n g for u n i l a t e r a l c o m m i t m e n t t o r e i n v i g o r a t i n g t h e n a t i o n a l
scale o f e c o n o m i c a n d p o l i t i c a l o r g a n i z a t i o n i n t h e s e r e g a r d s o r else i n
u n c o n d i t i o n a l l y s u p p o r t i n g (or s u r r e n d e r i n g to) t h e illogic o f a n a b s t r a c t
capital in potentially unrestricted global m o t i o n .
W h e n this o s c i l l a t i o n f a i l e d t o r e s t o r e c o n d i t i o n s for F o r d i s t a c c u m u -
lation, t h e p o l i c y d e b a t e m o v e d b e y o n d t h e n a t i o n a l - i n t e r n a t i o n a l
f r a m e w o r k a s s o c i a t e d w i t h t h e e a r l y stages o f t h e F o r d i s t crisis. T h e r e
was a n i n c r e a s i n g l y i n t e n s e s e a r c h for s o m e o t h e r s c a l e o n w h i c h c a p i t a l ' s
structural contradictions and strategic dilemmas might again be recon-
c i l e d for a n e x t e n d e d p e r i o d t h r o u g h a n a p p r o p r i a t e s p a t i o - t e m p o r a l f i x
a n d i n s t i t u t i o n a l i z e d c o m p r o m i s e . T h i s s e a r c h p r o c e s s t o o k different
f o r m s i n different social f o r m a t i o n s , b u t t h e r e w a s also a n i n c r e a s i n g l y
significant i n t e r n a t i o n a l d i m e n s i o n t o t h e r e s t r u c t u r i n g o f policy r e g i m e s
92 The Keynesian Welfare National State

a n d t h e r e o r i e n t a t i o n of s t r a t e g i e s . T h i s also i m p l i e s t h e s e a r c h for a new

s t a t e form. D e s p i t e t h e v a r i e t y o f criticisms a n d s o l u t i o n s , h o w e v e r , only
a l i m i t e d r a n g e of s o l u t i o n s is likely to be c o m p a t i b l e with a successful
t r a n s i t i o n t o s o m e f o r m o f p o s t - F o r d i s m . H o w t h e y a r e c o m b i n e d and
w h i c h p r e d o m i n a t e s i n p a r t i c u l a r s o c i e t i e s will d e p e n d o n t h e o u t c o m e
o f political a n d e c o n o m i c struggles o n t h e t e r r a i n o f different n a t i o n a l
r e g i m e s o f a c c u m u l a t i o n a n d political r e g i m e s . T h e s e issues a r e discussed
in later chapters.

6. The Discursive Mediation of Crisis

Crisis i s n e v e r a p u r e l y o b j e c t i v e p h e n o m e n o n t h a t a u t o m a t i c a l l y p r o -
d u c e s a p a r t i c u l a r r e s p o n s e or o u t c o m e . I n s t e a d , a crisis e m e r g e s w h e n
e s t a b l i s h e d p a t t e r n s o f d e a l i n g w i t h s t r u c t u r a l c o n t r a d i c t i o n s , t h e i r crisis-
tendencies and dilemmas no longer work as expected and m a y even
a g g r a v a t e t h e s i t u a t i o n . Crises a r e m o s t a c u t e w h e n c r i s i s - t e n d e n c i e s a n d
tensions accumulate across several interrelated m o m e n t s of the structure
o r s y s t e m i n q u e s t i o n , limiting r o o m for m a n o e u v r e i n r e g a r d t o a n y p a r -
ticular p r o b l e m . C h a n g e s in the balance of forces mobilized behind and
across d i f f e r e n t t y p e s of s t r u g g l e (see c h a p t e r 1) also h a v e a k e y r o l e
h e r e i n intensifying c r i s i s - t e n d e n c i e s a n d i n w e a k e n i n g a n d / o r resisting
e s t a b l i s h e d m o d e s o f c r i s i s - m a n a g e m e n t ( O f f e 1984: 3 5 - 6 4 ) . This c r e a t e s
a s i t u a t i o n of m o r e or less a c u t e crisis, a p o t e n t i a l m o m e n t of d e c i s i v e
t r a n s f o r m a t i o n a n d a n o p p o r t u n i t y for decisive i n t e r v e n t i o n . I n this
s e n s e , t h e r e is an i m b a l a n c e in a crisis s i t u a t i o n : it is o b j e c t i v e l y o v e r -
d e t e r m i n e d b u t s u b j e c t i v e l y i n d e t e r m i n a t e ( D e b r a y 1973: 113). T h i s
c r e a t e s t h e s p a c e for d e t e r m i n e d s t r a t e g i c i n t e r v e n t i o n s t o significantly
r e d i r e c t t h e c o u r s e o f e v e n t s a s well a s for a t t e m p t s t o ' m u d d l e t h r o u g h '
i n t h e ( p e r h a p s h o p e l e s s ) h o p e t h a t t h e s i t u a t i o n will r e s o l v e itself i n
time. T h e s e are, then, potentially path-shaping m o m e n t s (on the dialec-
tic o f p a t h - d e p e n d e n c y a n d p a t h - s h a p i n g , s e e H a u s n e r e t al. 1995).
W e c a n s e e this s i t u a t i o n e m e r g i n g i n r e l a t i o n t o t h e crisis in/of t h e
K W N S . W h i c h o f t h e s e a l t e r n a t i v e o u t c o m e s e v e n t u a l l y e m e r g e s will b e
m e d i a t e d i n p a r t t h r o u g h d i s c u r s i v e s t r u g g l e s o v e r t h e n a t u r e a n d sig-
nificance o f t h e crisis a n d w h a t m i g h t follow f r o m it. I n p e r i o d s o f m a j o r
social r e s t r u c t u r i n g t h e r e is an i n t e r s e c t i o n of diverse e c o n o m i c , politi-
cal a n d s o c i o c u l t u r a l n a r r a t i v e s t h a t seek t o give m e a n i n g t o c u r r e n t
p r o b l e m s b y c o n s t r u i n g t h e m i n t e r m s o f past failures a n d f u t u r e p o s s i -
bilities. D i f f e r e n t s o c i a l forces i n t h e p r i v a t e a n d p u b l i c d o m a i n s p r o p o s e
n e w visions, projects, p r o g r a m m e s a n d policies. T h e p r o b l e m s con-
fronting the K W N S , for example, p r o m p t competing narratives a b o u t
w h e t h e r i t i s i n crisis, h o w d e e p t h e crisis is, h o w t h e crisis d e v e l o p e d .
 The Keynesian Welfare National State 93

Table 2.2 M a j o r symptoms in the perennial welfare state crisis

'.^s 1960s 1970s-1980s 1990s

Inflationary a n d Fails t o p r o d u c e Stagflation Globalization

harms g r o w t h equality Unemployment Unemployment
Too bureaucratic Postmaterialism Rigidities
Government Inequalities
overload Social e x c l u s i o n
Family instability

Rightist c r i t i q u e Leftist critique ( O E C D 1981) (Less p a r t i s a n )

( O E C D 1997)

Source: B a s e d on E s p i n g - A n d e r s e n 1997: 2

where it is likely to end and h o w it might be resolved. Indeed, as s o m e

cynics h a v e c o r r e c t l y n o t e d , t h e w e l f a r e s t a t e s e e m s t o h a v e b e e n ' i n
crisis' f r o m t h e m o m e n t o f its i n c e p t i o n . I t i s o n l y t h e n a t u r e o f t h e crisis
that seems to h a v e b e e n contested, with different readings being domi-
n a n t a t d i f f e r e n t t i m e s (see t a b l e 2.2; see also E s p i n g - A n d e r s e n 1999:
2 - 4 ) . A s s y m p t o m s o f crisis g a t h e r , h o w e v e r , a s t r u g g l e f o r h e g e m o n y ( o r
at least d o m i n a n c e ) begins to establish n e w accumulation strategies, state
p r o j e c t s o r h e g e m o n i c p r o j e c t s . T h e s e e c o n o m i c a n d p o l i t i c a l conflicts
c o n c e r n n o t o n l y t h e d i s t r i b u t i o n o f t h e costs o f c r i s i s - m a n a g e m e n t b u t
also t h e a p p r o p r i a t e p o l i c i e s t o e s c a p e f r o m t h e crisis.
T h e plausibility of these narratives and their associated strategies a n d
projects depends on their resonance (and h e n c e capacity to reinterpret
a n d m o b i l i z e ) w i t h t h e p e r s o n a l ( i n c l u d i n g s h a r e d ) n a r r a t i v e s o f signifi-
c a n t classes, strata, social c a t e g o r i e s o r g r o u p s t h a t h a v e b e e n affected
b y t h e d e v e l o p m e n t o f t h e p o s t w a r e c o n o m i c a n d political o r d e r . M o r e -
over, g i v e n t h a t t h e r e a r e a l w a y s v a r i o u s p l a u s i b l e n a r r a t i v e s , o n e m u s t
also c o n s i d e r t h e differential c a p a c i t i e s o f t h e i r n a r r a t o r s t o g e t t h e i r
m e s s a g e s a c r o s s a n d s e c u r e s u p p o r t for t h e specific lessons t h e y e n t a i l .
This will d e p e n d h e a v i l y o n t h e o r g a n i z a t i o n a n d o p e r a t i o n o f t h e m a s s
m e d i a a n d t h e r o l e o f i n t e l l e c t u a l s i n p u b l i c life. T h e p l a u s i b i l i t y o f c o m -
p e t i n g n a r r a t i v e s i s also s h a p e d b y t h e s t r u c t u r a l b i a s e s a n d s t r a t e g i c a l l y
selective operations of various public a n d private apparatuses of eco-
nomic, political a n d ideological d o m i n a t i o n . Narratives do n o t c o m p e t e
for i n f l u e n c e o n a n e v e n p l a y i n g f i e l d , b u t a r e s u b j e c t t o d i s c u r s i v e a n d
s t r u c t u r a l s e l e c t i v i t i e s " a s well a s t h e n e e d t o establish s o m e r e s o n a n c e
w i t h p e r s o n a l n a r r a t i v e s . S u c h c o n c e r n s t a k e u s well b e y o n d a c o n c e r n
for n a r r a t i v i t y , o f c o u r s e , i n t o t h e m a n y e x t r a d i s c u r s i v e c o n d i t i o n s o f
94 The Keynesian W e l f a r e National State

n a r r a t i v e a p p e a l . Finally, t h e p l a u s i b i l i t y o f specific n a r r a t i v e s d e p e n d s
o n a b r o a d e r w e b o f i n t e r l o c u t i o n ( S o m e r s 1994: 614) c o m p r i s i n g m e t a -
narratives that reveal linkages b e t w e e n a wide range of interactions,
organizations a n d institutions and/or help to m a k e sense of whole
epochs. That these institutional a n d m e t a n a r r a t i v e s have powerful reso-
n a n c e d o e s n o t m e a n t h a t t h e y s h o u l d b e t a k e n a t face v a l u e . A l l n a r r a -
tives a r e selective, a p p r o p r i a t e s o m e a r g u m e n t s a n d c o m b i n e t h e m i n
specific w a y s . In this s e n s e , t h e n , o n e m u s t c o n s i d e r w h a t is left u n s t a t e d
or silent, w h a t is r e p r e s s e d or s u p p r e s s e d in official d i s c o u r s e .
I n t e r p r e t a t i o n s o f t h e crisis in/of t h e K W N S w e r e ( a n d a r e ) m a n i f o l d .
T h e y have included r o m a n t i c rejection of t h e welfare state (evident in
t h e w o r k of critics such as I v a n Illich 1 9 7 9 , 1 9 8 1 ) ; calls for an a l t e r n a t i v e ,
c o m m u n i t a r i a n welfare state and/or one addressed to the p r o b l e m s of
p a t r i a r c h a l as well as class d o m i n a t i o n ; social d e m o c r a t i c a r g u m e n t s for
t h e r e o r g a n i z a t i o n a n d r e t r e n c h m e n t o f t h e K W N S for a t e m p o r a r y
p e r i o d of e c o n o m i c a u s t e r i t y b e f o r e it is r e s u r r e c t e d in m o r e or less t h e
s a m e f o r m ; t h e N e w R i g h t ' s d e m a n d s for t h e p r i v a t i z a t i o n o f w e l f a r e
s e r v i c e s a n d / o r t h e i n t r o d u c t i o n o f c o m m e r c i a l criteria i n t o t h e welfare
s t a t e ; a n d m a n y o t h e r s . A s w e shall s e e , a radical n e o l i b e r a l r e g i m e shift
i s b y n o m e a n s t h e only o u t c o m e .
S u c h i n t e r p r e t a t i o n s a r e r e l a t e d t o d e b a t e s a n d reflections o n t h e
s t a t e . Initially i t was c l a i m e d t h a t t h e n a t i o n a l s t a t e was n o l o n g e r func-
t i o n i n g a s i t h a d d o n e i n t h e b o o m y e a r s . W h e t h e r d u e t o t h e excessive
d e m a n d s p l a c e d u p o n it, a scarcity of r e s o u r c e s to m e e t t h e m , a deficit
in s t a t e c a p a c i t i e s to p u r s u e o b j e c t i v e s , a loss of p o l i t i c a l c o h e s i o n , declin-
ing faith i n t h e l e g i t i m a c y o f g o v e r n m e n t o r s i m p l e o v e r l o a d , t h e n a t i o n a l
s t a t e w a s said to be in crisis. S u c h a s s e r t i o n s h a d a specific political
r e s o n a n c e a n d , a l t h o u g h politically c o n t e n t i o u s , s e r v e d t o o r i e n t t h e
a c t i o n s of a w i d e r a n g e of political forces. In p a r t i c u l a r , t h e y fed i n t o t h e
p r o p o s a l s for m a n a g i n g o r r e s o l v i n g t h e crises t h a t w e r e typical o f
t h e s e c o n d s t a g e o f d e b a t e . O n e c o m m o n s u g g e s t i o n w a s t h a t s t a t e func-
tions s h o u l d n o w b e s h a r e d w i t h n o n - s t a t e b o d i e s t o r e d u c e t h e o v e r l o a d
on an overextended state apparatus. A n o t h e r was that there should be a
r e t u r n t o t h e l i b e r a l , n i g h t w a t c h m a n s t a t e s o t h a t i t could c o n c e n t r a t e o n
m o r e effective p e r f o r m a n c e o f its r e m a i n i n g , m i n i m a l functions. L a t e r
still i t w a s r e c o g n i z e d t h a t c h a n g e s i n t h e n a t i o n a l state could n o t b e
l i m i t e d t o a simple r e d i s t r i b u t i o n o r r e d u c t i o n o f o t h e r w i s e u n c h a n g i n g
f u n c t i o n s a n d s o a t t e n t i o n t u r n e d t o t h e s e a r c h t o d e v e l o p a historically
n e w t y p e o f s t a t e a n d politics. W h a t w o u l d r e p l a c e t h e K W N S t h e r e f o r e
c a m e t o d e p e n d o n t h e c h a n g i n g b a l a n c e o f p o l i t i c a l forces m o b i l i z e d for
a n d a g a i n s t c o m p e t i n g i n t e r p r e t a t i o n s o f t h e crisis in/of t h e p o s t w a r m o d e
o f e c o n o m i c g r o w t h , its m o d e o f r e g u l a t i o n a n d t h e a p p r o p r i a t e s o l u t i o n s
t o a n y p r o b l e m s identified i n t h e s e n a r r a t i v e s .
 The Schumpeterian
Competition State

This c h a p t e r i s m a i n l y c o n c e r n e d with t h e c h a n g i n g e c o n o m i c f u n c t i o n s
of t h e s t a t e in a d v a n c e d capitalist s o c i e t i e s following t h e crisis in/of
A t l a n t i c F o r d i s m . C h a n g e s i n t h e s t a t e ' s i n s t i t u t i o n a l f o r m a n d effec-
tiveness a r e c o n s i d e r e d m a i n l y in c h a p t e r s 5 a n d 6 after t h e d i s c u s s i o n
of c h a n g i n g social f u n c t i o n s in t h e n e x t c h a p t e r . I r e l a t e t h e c h a n g i n g
pattern of economic intervention to economic crisis-tendencies in
A t l a n t i c F o r d i s m a n d t o t h e e m e r g e n t f e a t u r e s o f p o s t - F o r d i s m a s well
as to political crisis-tendencies in t h e K W N S and p r o b l e m s r o o t e d in
F o r d i s t m a s s society m o r e g e n e r a l l y . A s e c o n o m i c , political a n d social
forces have responded to these crisis-tendencies, we can discern the ten-
dential crystallization of a distinctive f o r m of state c o n c e r n e d to p r o m o t e
economic and extra-economic conditions deemed appropriate to the
emerging post-Fordist accumulation regime. This n e w type of state can
be usefully d e s c r i b e d as a S c h u m p e t e r i a n c o m p e t i t i o n s t a t e , a n d I will
d e s c r i b e its f o r m a n d f u n c t i o n s a n d justify this d e s c r i p t i o n i n this a n d
l a t e r c h a p t e r s . Its d i s t i n c t i v e f o r m a n d f u n c t i o n s a r e c l e a r l y l i n k e d t o t h e
n e w configuration of contradictions and d i l e m m a s that have e m e r g e d in
t h e w a k e o f t h e crisis o f F o r d i s m a n d t o n e w t e c h n o - e c o n o m i c p a r a d i g m s
associated with t h e e m e r g e n c e of a n e w long wave of economic growth.
B u t this link is far f r o m a u t o m a t i c a n d m e c h a n i c a l . It d e r i v e s f r o m a
t r i a l - a n d - e r r o r search t o m a k e s e n s e o f t h e c r i s i s - t e n d e n c i e s o f A t l a n t i c
F o r d i s m a n d its m o d e o f r e g u l a t i o n a n d t o d e v e l o p s o m e s t r a t e g i c g u i d e -
lines a n d s e n s e o f d i r e c t i o n i n r e s p o n s e t o initial f a i l u r e s t o o v e r c o m e
t h e s t r u c t u r a l crises a n d m o d e r a t e social conflict t h r o u g h n o r m a l r o u -
t i n e s o f c r i s i s - m a n a g e m e n t . I n d e e d , i n significant r e s p e c t s , t h e n e w s t a t e
f o r m (considered as a f o r m - d e t e r m i n e d , strategically selective c o n d e n -
s a t i o n of t h e c h a n g i n g b a l a n c e of p o l i t i c a l f o r c e s ) is p l a y i n g a m a j o r r o l e
96 The Schumpeterian Competition State

i n tlie m a t e r i a l a n d discursive c o n s t i t u t i o n o f t h e globalizing, n e t w o r k e d ,

k n o w l e d g e - b a s e d e c o n o m y t h a t i t s activities a r e s e e k i n g t o g o v e r n .
'Competition state' is used h e r e to characterize a state that aims to
s e c u r e e c o n o m i c g r o w t h w i t h i n its b o r d e r s a n d / o r t o s e c u r e c o m p e t i t i v e
a d v a n t a g e s for capitals b a s e d i n its b o r d e r s , e v e n w h e r e t h e y o p e r a t e
abroad, by p r o m o t i n g the economic and extra-economic conditions that
a r e c u r r e n t l y d e e m e d vital for s u c c e s s i n c o m p e t i t i o n w i t h e c o n o m i c
a c t o r s a n d s p a c e s l o c a t e d i n o t h e r states. P a r a d o x i c a l l y , offshore
e c o n o m i e s c a n b e a n e l e m e n t i n this struggle insofar a s t h e y a r e s p o n -
s o r e d (or t o l e r a t e d ) b y o n s h o r e states t o s e c u r e c o m p e t i t i v e a d v a n t a g e s
for d o m e s t i c o r i n t e r n a t i o n a l c a p i t a l s b a s e d i n t h e i r o w n t e r r i t o r i e s
( H u d s o n 2000; P a l a n 1998). M o r e g e n e r a l l y , a s w e shall see, a n i m p o r -
t a n t a s p e c t o f t h e activities o f c o m p e t i t i o n states c o n c e r n s t h e i r a t t e m p t s
either a l o n e or in conjunction with other forces (including other states)
to project p o w e r b e y o n d their political frontiers to shape cross-border
o r e x t e r n a l e c o n o m i c spaces r e l e v a n t t o capital a c c u m u l a t i o n a n d social
reproduction. A h h o u g h t h e competition state's strategies m a y b e tar-
g e t e d o n specific p l a c e s , s p a c e s a n d scales a n d d i r e c t e d a g a i n s t specific
competitors, they are always m e d i a t e d through the operation of the
w o r l d m a r k e t a s a w h o l e ~ e s p e c i a l l y a s efforts a r e m a d e t o w i d e n a n d
d e e p e n t h e l a t t e r t h r o u g h s t r a t e g i e s o f n e o l i b e r a l g l o b a l i z a t i o n . A s such,
the competition state prioritizes the pursuit of strategies intended to
c r e a t e , r e s t r u c t u r e or reinforce ~ as far as it is e c o n o m i c a l l y a n d politi-
cally f e a s i b l e to do so - t h e c o m p e t i t i v e a d v a n t a g e s of its t e r r i t o r y ,
p o p u l a t i o n , built e n v i r o n m e n t , social i n s t i t u t i o n s a n d e c o n o m i c agents.^
J u s t a s t h e r e a r e different f o r m s o f c o m p e t i t i o n , s o t o o a r e t h e r e differ-
e n t f o r m s o f c o m p e t i t i o n s t a t e . I n r e l a t i o n t o its e c o n o m i c policy r o l e ,
the d o m i n a n t type that is currently emerging can be described as a
S c h u m p e t e r i a n c o m p e t i t i o n s t a t e , b e c a u s e o f its c o n c e r n w i t h t e c h -
n o l o g i c a l c h a n g e , i n n o v a t i o n a n d e n t e r p r i s e a n d its a t t e m p t t o d e v e l o p
n e w techniques of g o v e r n m e n t a n d governance to these ends. A l t h o u g h
social a n d e c o n o m i c policy a r e m o r e tightly c o u p l e d i n t h e c o m p e t i t i o n
s t a t e t h a n i n t h e K W N S , I c o n s i d e r t h e n a t u r e a n d f o r m s o f this c o u p l i n g
in chapter 4 r a t h e r t h a n here.

1. Post-Fordism and the Knowledge-based Economy

T h e r e has b e e n a n e x t e n s i v e a n d o f t e n h e a t e d scholarly d i s c u s s i o n - n o w
s o m e w h a t diminished - a b o u t w h e t h e r the concept of post-Fordism is
t h e m o s t a p p r o p r i a t e e n t r y p o i n t for s t u d y i n g r e c e n t c h a n g e s i n c a p i t a l
a c c u m u l a t i o n a n d its i m p l i c a t i o n s for e c o n o m i c a n d social policy. T h r e e
issues a r e r e l e v a n t h e r e : (1) t h e g e n e r a l t h e o r e t i c a l a d e q u a c y o f t h e
 The Schumpeterian Competition State 97

c o n c e p t o f p o s t - F o r d i s m ; (2) ttie e x t e n t t o w h i c h t h i s c o n c e p t i s s u i t a b l e
for d e s c r i b i n g t h e full r a n g e o f c h a n g e s since t h e m i d - 1 9 7 0 s ; a n d (3) t h e
role o f p o s t - F o r d i s m a n d a s s o c i a t e d n o t i o n s i n e c o n o m i c a n d political
liscourses d e p l o y e d t o justify r e c e n t c h a n g e s i n e c o n o m i c a n d social
policy. I d e a l w i t h t h e s e q u e s t i o n s in t u r n .
F i r s t , i t m a y b e b e t t e r for s o m e p u r p o s e s t o c h a r a c t e r i z e t h e e m e r g -
ing a c c u m u l a t i o n r e g i m e t h r o u g h a s u b s t a n t i v e c o n c e p t t h a t i s a n a l o g o u s
to Fordism, such as Toyotism, Sonyism, Gatesism or Wintelism. These
refer t o n e w t e c h n o - e c o n o m i c p a r a d i g m s i n e s t a b l i s h e d o r e m e r g i n g
manufacturing sectors and/or to new forms of enterprise and competi-
tion d e e m e d superior to the archetypal Fordist forms. These paradigms
lack t h e pervasive resonance that the Fordist p a r a d i g m enjoyed as t h e
Fordist accumulation regime c a m e to be consolidated. But they are cer-
tainly m o r e fruitful t h a n t h e m o r e f o r m a l c o n c e p t o f p o s t - F o r d i s m , w h i c h
relies o n a c h r o n o l o g i c a l prefix t o d i s t i n g u i s h i t f r o m F o r d i s m . T h e s a m e
p r o b l e m h o l d s f o r t h e ' n e w e c o n o m y ' p a r a d i g m , w i t h its s i m p l i s t i c a n d
o v e r d r a w n c o n t r a s t b e t w e e n old a n d new. A c c o r d i n g l y , I will r e f e r
i n s t e a d t o t h e ' k n o w l e d g e - b a s e d e c o n o m y ' (or K B E ) . T h i s p a r a d i g m h a s
g r a d u a l l y b e c o m e h e g e m o n i c a s a r a t i o n a l e a n d s t r a t e g i c g u i d e for
e c o n o m i c , p o l i t i c a l a n d social r e s t r u c t u r i n g , r e s o n a t e s across m a n y dif-
f e r e n t s y s t e m s a n d t h e lifeworld, a n d reflects t h e g e n e r a l i m p o r t a n c e
a t t r i b u t e d , r i g h t l y or w r o n g l y , to k n o w l e d g e as a ' f a c t o r of p r o d u c t i o n ' in
t h e p o s t - F o r d i s t l a b o u r process, a c c u m u l a t i o n r e g i m e a n d m o d e o f r e g u -
l a t i o n (see p p . 1 2 8 - 3 1 ) . T h e n o t i o n o f p o s t - F o r d i s m can also b e a p p l i e d
p r o d u c t i v e l y , h o w e v e r , a s l o n g a s a t t e n t i o n i s p a i d t o c o n t i n u i t i e s a n d dis-
c o n t i n u i t i e s . F o r w i t h o u t c o n t i n u i t i e s , t h e n e w l a b o u r process, a c c u m u l a -
t i o n r e g i m e o r m o d e o f r e g u l a t i o n w o u l d n o t b e post-Fordist b u t m e r e l y
n o n - F o r d i s t ; w i t h o u t d i s c o n t i n u i t i e s , h o w e v e r , i t w o u l d n o t b e post-
Fordist but merely a n o t h e r phase of Fordism - high Fordist, late Fordist,
n e o - F o r d i s t , o r w h a t e v e r . T h u s t h i s a n d s u b s e q u e n t c h a p t e r s also e x p l o r e
t h e i m p o r t a n c e o f t h e c o n s e r v a t i o n - d i s s o l u t i o n effects e n t a i l e d i n t h e
e m e r g i n g a c c u m u l a t i o n r e g i m e a n d its d i a l e c t i c o f p a t h - d e p e n d e n c y a n d
path-shaping.
S e c o n d , this said, i t i s c l e a r t h a t m a n y k e y a s p e c t s o f t h e c o n t e m p o r a r y
l a b o u r p r o c e s s , a c c u m u l a t i o n r e g i m e a n d m o d e o f r e g u l a t i o n h a v e little
to do with the golden age of Fordism. These must be considered in their
o w n r i g h t a s well a s i n t e r m s o f t h e i r p o s i t i o n w i t h i n t h e e m e r g i n g r e g i m e
a n d its m o d e o f r e g u l a t i o n . A n d , t h i r d , w h e t h e r t h e n o t i o n o f p o s t -
F o r d i s m i s c u r r e n t l y t h e o r e t i c a l l y justified a s a n a n a l y t i c a l c o n c e p t o r n o t ,
d i s c o u r s e s m o r e o r less explicitly r e f e r r i n g t o p o s t - F o r d i s m o r f l e x i b l e
s p e c i a l i z a t i o n w e r e i m p o r t a n t i n t h e initial m e d i a t i o n o f e c o n o m i c , p o l i t i -
cal a n d social c h a n g e d u r i n g t h e crisis in/of A t l a n t i c F o r d i s m . T h e m a i n
substantive features of a feasible emerging accumulation regime a n d
98 The Schumpeterian Competition State

m o d e o f r e g u l a t i o n h a v e since b e e n o u t l i n e d a n d i n t e g r a t e d i n t o accu-
m u l a t i o n s t r a t e g i e s , s t a t e p r o j e c t s a n d h e g e m o n i c visions. I n p a r t i c u l a r ,
u n d e r t h e r u b r i c o f t h e K B E , t h e y a r e g u i d i n g a n d r e i n f o r c i n g activities
that are intended to consolidate the emerging post-Fordist economy.
An a d e q u a t e account of the emerging post-Fordist, knowledge-based
r e g i m e m u s t t r e a t it like F o r d i s m - d i s c u s s i n g its different sites a n d levels
a n d also c o n s i d e r i n g t h e sort o f s p a t i o - t e m p o r a l f i x (or f i x e s ) t h a t m i g h t
s e c u r e s o m e s t r u c t u r a l c o h e r e n c e a c r o s s t h e s e levels. I n this spirit, t h e n ,
as a distinctive type of labour process, p o s t - F o r d i s m c o u l d be said to
involve flexible production based on the operation of flexible machines
a n d flexible systems that are c o m b i n e d to secure economies of scope
a n d / o r n e t w o r k s . E c o n o m i e s o f s c o p e d e r i v e f r o m t h e diversity o f p r o d -
u c t s t h a t c a n b e p r o d u c e d f r o m a g i v e n t e c h n i c a l a n d social o r g a n i z a t i o n
o f p r o d u c t i o n r a t h e r t h a n f r o m t h e d i m i n i s h i n g u n i t cost o f l o n g p r o -
duction runs of standardized commodities that generate the economies
o f scale t y p i c a l o f m a s s p r o d u c t i o n . E c o n o m i e s o f n e t w o r k s d e r i v e
mainly from the positive p r o d u c t i o n a n d c o n s u m p t i o n externalities asso-
c i a t e d w i t h i n f r a s t r u c t u r e n e t w o r k s ( s u c h a s t r a n s p o r t , utility a n d c o m -
munication networks) and/or with the joint operation of c o m p l e m e n t a r y
and compatible assets c o n t r o l l e d by d i f f e r e n t o r g a n i z a t i o n s ( E c o n o m i d e s
1996; S h y 2 0 0 1 ) . T h e n e w i n f o r m a t i o n a n d c o m m u n i c a t i o n t e c h n o l o g i e s
( h e r e a f t e r I C T s ) a r e significant for b o t h s o r t s o f n e t w o r k e c o n o m i e s a t
all s t a g e s i n t h e circuit o f c a p i t a l a n d f r o m b o t h t h e i r p r o d u c t i o n a n d
c o n s u m p t i o n sides. F o r e x a m p l e , n e w I C T n e t w o r k s o f t e n involve a l m o s t
e x p o n e n t i a l l y i n c r e a s i n g r e t u r n s t o n e t w o r k size a s ' e a c h a d d i t i o n a l [con-
suming] m e m b e r increases the n e t w o r k ' s value, which in turn attracts
m o r e m e m b e r s , i n i t i a t i n g a spiral of b e n e f i t s ' (Kelly 1998: 2 5 ) . Similarly,
I C T - e n a b l e d forms of collaborative n e t w o r k enterprise, vertical disinte-
g r a t i o n , s t r a t e g i c alliances, o u t s o u r c i n g , a n d s o f o r t h , e s p e c i a l l y w h e n
t h e y o p e r a t e i n r e a l t i m e , also g e n e r a t e p o s i t i v e e x t e r n a l i t i e s . T h e p o s t -
F o r d i s t l a b o u r p r o c e s s also r e q u i r e s a n a p p r o p r i a t e l y f l e x i b l e w o r k f o r c e
t h a t o f t e n c o m b i n e s multiskiUed a n d u n s k i l l e d w o r k e r s i n f l e x i b l e w a y s
i n c o n t r a s t t o t h e d o m i n a n t r o l e o f relatively inflexible s e m i - s k i l l e d
l a b o u r i n F o r d i s t m a s s p r o d u c t i o n . N o t all f o r m s o f f l e x i b i l i t y a r e p o s i -
t i v e for w o r k e r s , h o w e v e r , a s t h e y r a n g e f r o m r e l i a n c e o n f l e x i - w a g e d ,
flexi-time, hire-and-fire, and outsourced jobs t h r o u g h self-employed or
s u b c o n t r a c t e d skilled l a b o u r t o t h e m u l t i s k i l l i n g o f c o r e w o r k e r s e n j o y -
ing j o b r o t a t i o n , j o b e n r i c h m e n t a n d t e a m w o r k . F l e x i b i l i z a t i o n c a n like-
wise t a k e m a n y forms, s o m e m e a n e r and leaner t h a n others. Thus t h e r e
a r e significant d i f f e r e n c e s i n t h e s t r a t e g i e s a n d c o n s e q u e n c e s o f a t t e m p t s
to flexibilize the labour process.
T h e c r u c i a l h a r d w a r e for t h e p o s t - F o r d i s t l a b o u r p r o c e s s - a n d
t h e h a r d w a r e t h a t justifies its d e s c r i p t i o n a t l e a s t c h r o n o l o g i c a l l y a s
 The Schumpeterian Competition State 99

post-Fordist - is microelectronics-based ICTs. T h e I n t e r n e t has an

increasingly i m p o r t a n t r o l e h e r e , e s p e c i a l l y i n intra-firm, b u s i n e s s -
t o - b u s i n e s s ( B 2 B ) a n d g o v e r n m e n t - t o - b u s i n e s s ( G 2 B ) transactions.^ T h e
p o s t - F o r d i s t l a b o u r p r o c e s s also r e l i e s i n c r e a s i n g l y o n i n t e l l i g e n t
software b a s e d o n o p e r a t i n g c o d e s a n d codified k n o w l e d g e a s well a s
knowledgeable 'wetware' (intellectual labour-power possessing as yet
uncodified o r t a c i t k n o w l e d g e ) . ^ I n d e e d , a n o t h e r d e s c r i p t i o n o f p o s t -
F o r d i s m - as inf o r m a t i o n a l i s m - e m p h a s i z e s p r e c i s e l y t h e reflexive a p p l i -
c a t i o n o f k n o w l e d g e t o t h e p r o d u c t i o n o f k n o w l e d g e ( C a s t e l l s 1996,
2000b). F l e x i b l e p r o d u c t i o n b a s e d o n f l e x i b l e m a c h i n e s o r s y s t e m s o p e r -
ated by flexible labour is n o t confined to areas previously d o m i n a t e d by
mass production, w h e r e it results in flexible mass production in large
factories a n d / o r c o n c e n t r a t e d c o n t r o l o v e r d e c e n t r a l i z e d p r o d u c t i o n n e t -
w o r k s . I t c a n also b e a p p l i e d t o s m a l l - b a t c h a n d f l e x i b l y s p e c i a l i z e d p r o -
duction conducted by extended producer networks and/or by small
a n d m e d i u m - s i z e d f i r m s . L i k e w i s e , s o m e o f its p r o c e s s i n n o v a t i o n s
c a n e n h a n c e p r o d u c t i v i t y i n c a s e s o f diversified q u a l i t y p r o d u c t i o n .
Moreover, b e y o n d the manufacturing field, it can also be applied to the
p r o d u c t i o n o f m a n y t y p e s o f services i n t h e p r i v a t e , p u b l i c a n d s o - c a l l e d
'third' sectors. This is i m p o r t a n t for t w o reasons. T h e first of these is the
trend towards deindustrialization in the A t l a n t i c Fordist economies, as a
result o f g r o w i n g p r o d u c t i v i t y i n d o m e s t i c m a n u f a c t u r i n g i n d u s t r y , t h e
r e l o c a t i o n o f s u c h i n d u s t r y t o f o r e i g n sites, a n d c o m p e t i t i o n f r o m m o r e
efficient f o r e i g n p r o d u c e r s . T h e s e c o n d i s t h e s c o p e t h a t f l e x i b i l i z a t i o n
offers t o o v e r c o m e t h e alleged p r o b l e m s i n v o l v e d i n r a i s i n g p r o d u c t i v -
ity i n services r e l a t i v e t o m a n u f a c t u r i n g - p r o b l e m s t h a t a r e o f t e n c h a r -
a c t e r i z e d a s t h e B a u m o l effect, w h i c h r e f e r s t o c o n t i n u i n g i n c r e a s e s i n
t h e p r i c e o f p r o d u c t i o n o f services r e l a t i v e t o m a n u f a c t u r e d g o o d s . T h i s
effect i s o f t e n i n v o k e d t o e x p l a i n t h e f i s c a l crisis o f t h e w e l f a r e s t a t e , b u t
it is b e t t e r s e e n as a socially a n d t e c h n o l o g i c a l l y c o n d i t i o n e d t e n d e n c y
r a t h e r t h a n a s a n i r o n l a w o f s e r v i c e p r o v i s i o n . I t follows t h a t t h e s c o p e
for p o s t - F o r d i s t t e c h n o l o g i e s a n d l a b o u r p r o c e s s e s t o i n f l u e n c e t h e
d y n a m i c of any emerging economic system is m u c h greater t h a n was the
c a s e for t h e F o r d i s t l a b o u r p r o c e s s i n r e l a t i o n t o A t l a n t i c F o r d i s m . I n t h i s
sense, the knowledge-based e c o n o m y does a p p e a r to h a v e genuine
potential to initiate a n e w long wave of economic expansion.
As a stable mode of macroeconomic growth, p o s t - F o r d i s m w o u l d
be flexible and p e r m a n e n t l y innovative. In ideal-typical terms and in
c o n t r a s t t o F o r d i s m , its v i r t u o u s c i r c l e w o u l d b e b a s e d o n f l e x i b l e a n d
networked production; growing productivity based on some combina-
tion of economies of scope, economies of n e t w o r k s and process inno-
v a t i o n s ; r i s i n g i n c o m e s for s k i l l e d m a n u a l a n d i n t e l l e c t u a l w o r k e r s ( o f t e n
j o i n t l y reclassified a s ' k n o w l e d g e w o r k e r s ' ) ; i n c r e a s e d d e m a n d for
 100 The Schumpeterian Competition State

d i f f e r e n t i a t e d goods a n d n o n - e x p o r t a b l e ( a n d h e n c e also n o n -
i m p o r t a b l e ) services favoured by t h e g r o w i n g discretionary e l e m e n t in
t h e s e i n c o m e s ; i n c r e a s e d profits b a s e d o n t e c h n o l o g i c a l a n d o t h e r i n n o -
v a t i o n r e n t s a n d t h e full u t i l i z a t i o n of flexible capacity; r e i n v e s t m e n t in
m o r e f l e x i b l e p r o d u c t i o n e q u i p m e n t a n d t e c h n i q u e s a n d / o r n e w sets o f
p r o d u c t s ; a n d a f u r t h e r b o o s t t o p r o d u c t i v i t y o w i n g t o a n e w r o u n d o f cre-
atively d e s t r u c t i v e i n n o v a t i o n , e c o n o m i e s o f s c o p e a n d e c o n o m i e s o f n e t -
w o r k s . W h i l e it is easy e n o u g h to posit s u c h a v i r t u o u s cycle, it is h a r d ,
given t h e combination of increasing openness and decreasing structured
c o h e r e n c e i n s o m e n a t i o n a l e c o n o m i e s , t o i d e n t i f y t h e scale o n w h i c h a
stable a n d c o h e r e n t p a t t e r n o f p r o d u c t i o n a n d c o n s u m p t i o n m i g h t b e r e a l -
ized. T h i s i s o n e a s p e c t o f t h e c u r r e n t r e l a t i v i z a t i o n o f scale w i t h its asso-
c i a t e d s t r u g g l e t o e s t a b l i s h a l t e r n a t i v e scales a s t h e n e w p r i m a r y scale for
a s p a t i o - t e m p o r a l f i x s u i t e d t o p o s t - F o r d i s m (pp. 1 7 9 - 8 1 ) . M o r e o v e r ,
g i v e n t h a t t h e p o s t - F o r d i s t g r o w t h d y n a m i c n e e d n o t g e n e r a l i z e t h e rising
incomes of core workers to peripheral w o r k e r s or the economically inac-
tive, a p o s t - F o r d i s t a c c u m u l a t i o n r e g i m e c o u l d lead t o g r e a t e r i n c o m e
p o l a r i z a t i o n a n d social e x c l u s i o n t h a n A t l a n t i c F o r d i s m ( s e e c h a p t e r 4 ) .
T h i s is e s p e c i a l l y e v i d e n t in n e o l i b e r a l p o s t - F o r d i s t r e g i m e s .
As a mode of economic regulation, p o s t - F o r d i s m i n v o l v e s c o m m i t m e n t
to supply-side innovation and flexibility in the main structural forms of
r e g u l a t i o n . T h e r e is a shift f r o m t h e p r e d o m i n a n c e of b u r e a u c r a t i c f o r m s
of corporate structure towards flatter, leaner, more decentralized and
m o r e flexible forms of organization that emphasize the strategic man-
a g e m e n t o f i n t e r d e p e n d e n c i e s a r o u n d c o r e c o m p e t e n c i e s ; t o w a r d s net-
w o r k e d forms of organization based on increased integration through
the Internet and other e-based forms of communication, coordination,
control and intelhgence; or towards 'virtual firms' that outsource most of
t h e activities n e c e s s a r y t o d e l i v e r t h e i r g o o d s or, m o r e c o m m o n l y , ser-
vices a n d , i n e x t r e m e cases, exist o n l y o n t h e N e t . T h i s i n v o l v e s e x t e n d -
ing a n d d e e p e n i n g digital n e t w o r k s t o i m p r o v e t h e o r g a n i z a t i o n o f B 2 B
a s well a s b u s i n e s s - t o - c o n s u m e r ( B 2 C ) r e l a t i o n s . T h i s m a y also b e a s s o -
ciated with economies of networks and first-mover advantages. The new
p r e d o m i n a n t forms of competition are based on improved quality and
p e r f o r m a n c e for i n d i v i d u a l p r o d u c t s a s well a s t h e c a p a c i t i e s t o e n g i n e e r
f l e x i b l e p r o d u c t i o n s y s t e m s (or t o d e s i g n f l e x i b l e s e r v i c e d e l i v e r y
systems) and to accelerate process a n d p r o d u c t innovation b a s e d on
k n o w l e d g e a p p l i e d t o t h e p r o d u c t i o n o f k n o w l e d g e . I n this c o n t e x t , e n g i -
neering innovation and improved productivity in setting up manufac-
turing systems rather t h a n manufacturing productivity within any given
s y s t e m a r e c r u c i a l w i t h i n i n d u s t r y . I C T s , e s p e c i a l l y I n t e r n e t u s e for B 2 B
e - c o m m e r c e , a r e i m p o r t a n t h e r e . S y s t e m s i n n o v a t i o n i s also vital i n t h e
f i n a n c i a l a n d c o m m e r c i a l sectors. T h i s i s reflected i n t h e fact t h a t
 The Schumpeterian Competition State 101

c o m p e t i t i o n n o w d e p e n d s h e a v i l y o n a s e a r c h for t e c h n o l o g i c a l r e n t s
based on c o n t i n u o u s innovation, de facto monopolies in advanced tech-
nologies or intellectual p r o p e r t y rights; and e c o n o m i e s of scope, agglo-
meration and/or n e t w o r k s (rather than the e c o n o m i e s of scale typical
o f F o r d i s m ) . I n s h o r t , t h e p o s t - F o r d i s t e n t e r p r i s e i s less c o n c e r n e d
with c o m p e t i n g t h r o u g h e c o n o m i e s o f scale i n t h e p r o d u c t i o n o f s t a n d -
a r d i z e d g o o d s a n d services u s i n g d e d i c a t e d p r o d u c t i o n s y s t e m s t h a n
it is with competing through e c o n o m i e s of scope, network e c o n o m i e s
and knowledge-intensive processes and products based on increasing
flexibility in all s t a g e s of p r o d u c t i o n a n d d i s t r i b u t i o n as l o n g as this is
compatible with continuing valorization.
T h e w a g e r e l a t i o n i s m o d i f i e d t o reflect c h a n g i n g m a r k e t c o n d i t i o n s
(flexi-wage a n d h i r e - a n d - f i r e a n d / o r r e s p o n s i b i l i t y w a g e s a n d r e g u l a r
r e s k i l l i n g ) a n d t h e social w a g e a n d c o l l e c t i v e c o n s u m p t i o n a r e g i v e n k e y
r o l e s i n e n h a n c i n g f l e x i b i l i t y (see c h a p t e r 4). I n d u s t r i a l r e l a t i o n s f o c u s
on integrating core workers into the enterprise through new wage
systems, n e w forms of involvement, new h u m a n resources m a n a g e m e n t
s t r a t e g i e s , a n d s o o n . A n d , i n p u r s u i t o f a n e n h a n c e d f l e x i b i l i t y , coflective
bargaining tends to be decentralized from the national to sectoral a n d
r e g i o n a l o r e v e n c o m p a n y a n d p l a n t levels. T h i s also s e r v e s t o l i m i t t h e
role of connective or p a t t e r n bargaining in generalizing wage increases
as a source of d e m a n d . T h e m o n e y form is d o m i n a t e d by private, root-
less b a n k c r e d i t t h a t c i r c u l a t e s i n t e r n a t i o n a l l y a n d b y p r o l i f e r a t i o n o f
f i n a n c i a l p r o d u c t s , d e r i v a t i v e s a n d o t h e r f o r m s o f liquid a s s e t s ; a n d t h e
e x p a n s i o n of s t a t e c r e d i t is s u b j e c t to limits set by t h e logic of i n t e r -
national currency markets and/or new international benchmarks and
agreements. Commercial capital is reorganized to create a n d serve
increasingly segmented m a r k e t s and, especially in neoliberal regimes,
t o p r o v i d e c h e a p m a s s c o n s u m e r g o o d s t o t h e socially e x c l u d e d a n d
n e w p o o r . Finally, s t a t e i n t e r v e n t i o n a n d i n t e r n a t i o n a l r e g i m e s a r e b e i n g
r e o r g a n i z e d i n w a y s t o b e d e t a i l e d i n this a n d s u c c e e d i n g c h a p t e r s .
As y e t , t h e r e is no o b v i o u s p r e d o m i n a n t p o s t - F o r d i s t mode of
societalization d i r e c t l y a n a l o g o u s t o t h e u r b a n , i n d u s t r i a l m a s s s o c i e t y
a s p i r i n g t o t h e A m e r i c a n d r e a m i n A t l a n t i c F o r d i s m . I n p a r t , this reflects
t h e m a n y u n c e r t a i n t i e s i n t h e 1980s a n d 1990s a b o u t w h a t w o u l d e v e n -
tually replace t h e Fordist l a b o u r process as the driving force in e c o n o m i c
expansion and about h o w the structured coherence of a post-Fordist
accumulation regime could (or would) be secured. Indeed, there were
heated debates over the relative superiority of competing national,
regional and u r b a n models of production, c o n s u m p t i o n and societaliza-
tion. For example, A m e r i c a , J a p a n and G e r m a n y proved to be major
c o n t e s t a n t s a m o n g n a t i o n a l m o d e l s ; S i l i c o n VaUey, t h e T h i r d I t a l y a n d
Baden-Wiirttemberg were a m o n g m a n y alternative regional models; and
 102 The S c h u m p e t e r i a n Competition State

t h e r e w e r e d i s p u t e s o v e r w h e t h e r t h e f u t u r e o f cities lay w i t h global

cities, e n t r e p r e n e u r i a l cities o r p o s t m o d e r n cities. I n d e e d , different forces
in d i f f e r e n t c o u n t r i e s as well as a g r o w i n g n u m b e r of i n t e r n a t i o n a l or
s u p r a n a t i o n a l b o d i e s c o m p e t e d t o define a c c u m u l a t i o n s t r a t e g i e s , s t a t e
p r o j e c t s a n d h e g e m o n i c visions t o r e m a k e social life i n o n e o r a n o t h e r
image. T h e s e u n c e r t a i n t i e s w e r e r e i n f o r c e d b y m o u n t i n g p r o b l e m s facing
each m a i n a l t e r n a t i v e o n its h o m e g r o u n d d u r i n g t h e 1980s and, for
G e r m a n y a n d J a p a n , t h e 1990s. I n t e r e s t i n v a r i e t i e s o f c a p i t a l i s m a n d
t h e i r r e s p e c t i v e s t r e n g t h s a n d w e a k n e s s e s still c o n t i n u e s , o f c o u r s e , with
i n c r e a s i n g r e c o g n i t i o n o f m u t u a l c o m p l e m e n t a r i t i e s and rivalries a n d ,
indeed, of possible evolutionary and adaptive benefits in maintaining
i n s t i t u t i o n a l diversity. N o n e t h e l e s s , A m e r i c a n h e g e m o n y h a s b e e n m o r e
o r less successfully r e a s s e r t e d i n t h e f o r m o f t h e g l o b a l n e o l i b e r a l p r o j e c t
b e c a u s e o f U S a d v a n c e s i n t h e c r u c i a l sectors o f t h e k n o w l e d g e - b a s e d
economy, A m e r i c a n d o m i n a n c e in t h e international regimes involved
in the globalizing economy, and r e n e w e d A m e r i c a n military supremacy
b a s e d o n i n f o r m a t i o n a l i s m and n e w f o r m s o f ' i n t e l l i g e n t ' n e t w o r k e d
w a r f a r e . J a p a n h a s b e e n effectively s i d e l i n e d i n this r e g a r d i n g l o b a l
t e r m s , e v e n t h o u g h i t r e m a i n s a major r e g i o n a l h e g e m o n , w i t h o n l y C h i n a
as a s e r i o u s p o t e n t i a l c h a l l e n g e r ; and, a l t h o u g h t h e r e c e n t c o n s o l i d a t i o n
o f ' E u r o l a n d ' p r o v i d e s a l t e r n a t i v e m o d e l s o f r e g u l a t i o n a n d societaliza-
tion, i t d o e s n o t y e t t h r e a t e n A m e r i c a n d o m i n a n c e w i t h i n t h e o v e r a l l
g l o b a l e c o n o m y . M o r e generally, p a t t e r n s o f s o c i e t a l i z a t i o n a r e m a r k e d
b y t h e rise o f m o r e c o m p l e x , h y b r i d f o r m s o f social o r g a n i z a t i o n a n d
crises o f n a t i o n a l i d e n t i t y a n d social c o h e s i o n . I n p a r t i c u l a r , a t t h e cost
o f f o c u s i n g o n e - s i d e d l y o n t h e p r i v i l e g e d classes a n d s t r a t a i n t h e n o r t h ,
w e c a n n o t e t h a t lifestyle a n d c o n s u m p t i o n h a v e b e c o m e m o r e i m p o r -
t a n t b a s e s o f stratification i n a d v a n c e d e c o n o m i e s , t h e rise o f t h e politics
o f i d e n t i t y , a n d t h e significance o f n e w social m o v e m e n t s i n p o s t m o d e r n
politics. T h i s c a n b e l i n k e d t o t h e a r g u m e n t t h a t w e a r e living i n a p o s t -
m o d e r n society, p r o v i d e d t h a t o n e d o e s n o t u s e t h e p o s s i b l e d e v e l o p -
m e n t o f p o s t m o d e r n m o d e s o f s o c i e t a l i z a t i o n t o justify p o s t m o d e r n i s m
as a d i s t i n c t i v e t h e o r e t i c a l a p p r o a c h .
T h e c o n t r a s t b e t w e e n F o r d i s m a n d p o s t - F o r d i s m s e r v e d ( a n d c a n still
s e r v e ) t o c o n t e x t u a l i z e r e s p o n s e s t o t h e crisis o f t h e K W N S - especially
a t t h e d i s c u r s i v e o r p a r a d i g m a t i c level. B u t t h i s c r u d e c o n t r a s t o b s c u r e s
t h e r e a l c o m p l e x i t y o f t h e c h a n g e s s u b s u m e d ( a n d , i n d e e d , mystified)
u n d e r w h a t h a s too often b e e n treated in t e r m s of a radical break. M o r e -
o v e r , a s r e g u l a t i o n i s t s h a v e n o w e m p h a s i z e d for m o r e t h a n t w e n t y y e a r s ,
the transition from Fordism to a stable post-Fordism is n o t guaranteed.
Instead, it depends on complex trial-and-error search processes, on
the d e v e l o p m e n t o f n e w a c c u m u l a t i o n s t r a t e g i e s , s t a t e p r o j e c t s a n d
h e g e m o n i c visions, o n m a j o r i n s t i t u t i o n a l i n n o v a t i o n , a n d o n t h e
 The Schumpeterian Competition State 103

c o n s o l i d a t i o n o f n e w s p a t i o - t e m p o r a l fixes. T h i s p u t s m a n y difficulties i n
t h e w a y o f finding a n y t h i n g l i k e a c o m p r e h e n s i v e a n d t r a n s f e r a b l e s o l u -
tion t o t h e q u e s t i o n o f h o w b e s t t o m a n a g e s u c h a t r a n s i t i o n .

2. Old and New Contradictions in Post-Fordism

C h a p t e r 2 identified s o m e e c o n o m i c c r i s i s - t e n d e n c i e s i n A t l a n t i c
F o r d i s m t h a t c o n t r i b u t e d t o its crisis a n d t h a t o f t h e K W N S . T h i s c h a p t e r
addresses the e m e r g i n g traits of t h e post-Fordist K B E and their im-
p l i c a t i o n s for e c o n o m i c policy i n n e w a c c u m u l a t i o n r e g i m e s , m o d e s o f
regulation and spatio-temporal fixes. Later chapters consider their
i m p l i c a t i o n s f o r t h e o t h e r d i m e n s i o n s o f t h e capitalist t y p e o f s t a t e . T h r e e
c a u t i o n s a r e a p p r o p r i a t e h e r e . F i r s t , r a i s i n g t h e s e issues d o e s n o t i m p l y
t h a t states c a n a l w a y s d e v e l o p (let a l o n e t h a t t h e y a l r e a d y p o s s e s s ) t h e
ability t o r e o r g a n i z e t h e m s e l v e s a n d successfully p e r f o r m n e w f u n c t i o n s .
Second, it does not m e a n that a post-Fordist accumulation regime with
a n a p p r o p r i a t e m o d e o f social r e g u l a t i o n c o u l d e v e r b e i n t r o d u c e d
w i t h o u t r e s i s t a n c e a n d conflict a n d / o r w o u l d r e m a i n t r o u b l e - f r e e o n c e i t
h a d b e e n c o n s o l i d a t e d . O n t h e c o n t r a r y , t h e following d i s c u s s i o n a i m s t o
h i g h l i g h t t h e m a g n i t u d e o f t h e task facing s t a t e s i n t h e s e n e w c o n d i t i o n s
as they u n d e r t a k e a trial-and-error search to solve old and n e w p r o b l e m s
i n t h e i r e c o n o m i c a n d social policy activities. A n d , t h i r d , a s I h a v e a l r e a d y
argued, the post-Fordist e c o n o m y does not first emerge through the
s p o n t a n e o u s o p e r a t i o n of m a r k e t forces a n d t h e n get regulated from
outside by the various mechanisms and agents of an appropriate m o d e
of regulation. On t h e contrary, struggles to define t h a t e c o n o m y as an
imagined object of regulation and to formulate appropriate accumula-
tion strategies and m o d e s of regulation are themselves co-constitutive
forces i n t h e e v e n t u a l e m e r g e n c e o f p o s t - F o r d i s m . This calls for s p e c i a l
attention to changing techno-economic paradigms, economic theories
a n d d i s c o u r s e s , a n d t e c h n i q u e s o f g o v e r n a n c e , a s well a s t o t h e a d e q u a c y
of the strategic capacities of the state as the p r i m a r y extra-economic
m e c h a n i s m for e c o n o m i c r e g u l a r i z a t i o n a n d g o v e r n a n c e .
F o r all t h e h y p e a n d i r r a t i o n a l e x u b e r a n c e i n c u r r e n t a c c o u n t s o f
t h e f l e x i b l e , globalizing, k n o w l e d g e - b a s e d ' n e w e c o n o m y ' , p o s t - F o r d i s m
d o e s n o t s u s p e n d t h e c o n t r a d i c t i o n s , d i l e m m a s o r conflicts o f c a p i t a l i s m .
I n d e e d , t h e e x p a n s i o n o f t h e e c o n o m i c logic o f c a p i t a l i s m a n d e c o n o m i c
competitiveness to include m o r e and m o r e factors previously regarded as
' e x t r a - e c o n o m i c ' a c t u a l l y serves t o e x t e n d t h e s c o p e for t h e s e c o n t r a -
d i c t i o n s , d i l e m m a s a n d conflicts t o b e c o m e m o r e fully i m p r i n t e d o n social
relations m o r e generally. This is another aspect of the increasing
e c o l o g i c a l d o m i n a n c e of c a p i t a l a c c u m u l a t i o n on a g l o b a l scale as a
 104 The S c h u m p e t e r i a n Competition State

p r i n c i p l e o f sociefalization. F o r fhe p r o b l e m o f r e - r e g u l a t i n g a c c u m u l a -
t i o n after t h e F o r d i s t crisis i n v o l v e s m o r e t h a n finding n e w w a y s t o m a n a g e
the old pattern of contradictions and to do so within the same spatio-
t e m p o r a l fix. This is n o t just b e c a u s e of a r e v e r s a l of t h e p r i m a r y a n d
s e c o n d a r y aspects o f t h e t w o p r i n c i p a l s t r u c t u r a l f o r m s i n t h e A t l a n t i c
F o r d i s t m o d e o f r e g u l a t i o n , n a m e l y , t h e w a g e r e l a t i o n a n d m o n e y form. I t
also a r i s e s b e c a u s e o t h e r c o n t r a d i c t i o n s a n d t h e i r a s s o c i a t e d d i l e m m a s
have become more important and because the spatio-temporal contexts
in which these contradictions are expressed have b e c o m e m o r e complex.
This m a k e s it hard to relocate t h e spatio-temporal fix of Fordism onto
a n o t h e r scale - e i t h e r l o w e r or h i g h e r t h a n t h e n a t i o n a l - e v e n if s t a t e
structures and other relevant regularizing forms could be readily recre-
a t e d o n t h a t scale. T h i s indicates t h e n e e d for a n e w s p a t i o - t e m p o r a l f i x
a s well a s n e w m e a n s o f r e g u l a t i o n a n d g o v e r n a n c e .
T h e r e a r e f i v e significant c o n t r a d i c t i o n s l i n k e d t o t h e crisis o f F o r d i s m
and the transition to post-Fordism. Two involve simple inversions of the
p r i m a r y and secondary aspects of t h e principal contradictions in the
Fordist m o d e of regulation a n d a decline in the overall i m p o r t a n c e of
t h e s e t w o c o n t r a d i c t i o n s , a t least o n t h e n a t i o n a l scale i n t h e p o s t - F o r d i s t
m o d e o f r e g u l a t i o n . T h e o t h e r t h r e e i n v o l v e i n c r e a s e d salience o f con-
t r a d i c t i o n s t h a t h a d h a d a s e c o n d a r y significance for t h e K W N S , a s well
as a r e w e i g h t i n g of t h e i r d i f f e r e n t a s p e c t s .
First, t h e r e h a s b e e n a t r a n s p o s i t i o n o f t h e p r i m a r y a n d s e c o n d a r y
a s p e c t s o f t h e w a g e f o r m c o n s i d e r e d a s cost o f p r o d u c t i o n a n d s o u r c e
of demand. Second, t h e r e has b e e n a transposition of the p r i m a r y and
secondary aspects of the m o n e y form considered as national m o n e y
a n d i n t e r n a t i o n a l c u r r e n c y ( o r stateless m o n e y ) . T h i r d , t h e c o n t r a d i c t i o n
between the exchange- and use-value m o m e n t s in productive capital
h a s b e c o m e m o r e significant o w i n g t o a g r o w i n g d i s s o c i a t i o n b e t w e e n
abstract flows in space and concrete valorization in place compared to
the heyday of Atlantic Fordism. This is particularly associated with the
h y p e r m o b i l i t y o f s o m e f r a c t i o n s o f f i n a n c i a l c a p i t a l , b u t affects o t h e r ,
r e l a t i v e l y m o b i l e a c t o r s a n d p r o c e s s e s i n t h e circuit o f c a p i t a l too. F o u r t h ,
the articulation between the economic and extra-economic conditions
for c a p i t a l a c c u m u l a t i o n ( t h a t is, b e t w e e n its c o m m o d i f i e d , f i c t i t i o u s l y
commodified, and non-commodified preconditions) has become more
p r o b l e m a t i c . I n p a r t i c u l a r , g r o w i n g s h o r t - t e r m i s m i n e c o n o m i c calcula-
tion, a s s o c i a t e d w i t h t h e d o m i n a n c e o f t h e m o n e y c o n c e p t o f c a p i t a l , i s
c o m i n g i n t o s e r i o u s conflict w i t h t h e i n c r e a s i n g d e p e n d e n c e o f v a l o r i z a -
tion on a growing r a n g e of e x t r a - e c o n o m i c factors t h a t t a k e a long time
t o p r o d u c e . Fifth, t h e b a s i c c o n t r a d i c t i o n b e t w e e n t h e g r o w i n g socializa-
t i o n o f f o r c e s o f p r o d u c t i o n a n d c o n t i n u i n g p r i v a t e c o n t r o l i n t h e rela-
tions of production and a p p r o p r i a t i o n of surplus gains a n e w force and
 The Schumpeterian Competition State 105

significance i n t h e n e t w o r k e c o n o m y . Sixth, a n d i n a d d i t i o n , a l t h o u g h i t
is n o t a s t r u c t u r a l c o n t r a d i c t i o n in itself, s e r i o u s conflicts h a v e a r i s e n o v e r
t h e a p p r o p r i a t e h o r i z o n s o f a c t i o n for t h e s p a t i o - t e m p o r a l f i x , i f any,
w i t h i n which t h e p r i n c i p a l ( b u t n o w less i m p o r t a n t ) c o n t r a d i c t i o n s o f
Atlantic Fordism and the newly important contradictions of the current
period might prove manageable.
First, in Atlantic F o r d i s m and the K W N S , the wage was treated pri-
marily as a source of d e m a n d . Thus g r o w t h in wages served the interests
of p r o d u c t i v e c a p i t a l in a t t a i n i n g full c a p a c i t y u t i l i z a t i o n in a r e l a t i v e l y
c l o s e d e c o n o m y d o m i n a t e d b y m a s s p r o d u c t i o n a s well a s c o m m e r c i a l
capital's interests in the spread of mass consumption. T h e growing inter-
nationalization of capital a c c o m p a n y i n g the final stages of Fordism trans-
f o r m e d this s i t u a t i o n : w a g e s w e r e i n c r e a s i n g l y s e e n p r i m a r i l y as a cost
of p r o d u c t i o n a n d o n l y s e c o n d a r i l y as a s o u r c e of n a t i o n a l d e m a n d . ' ' T h i s
h o l d s b o t h for i n d i v i d u a l w a g e s a n d t h e social w a g e ( o n t h e l a t t e r , s e e
chapter 4). This t h r e a t e n e d t h e national institutionalized class c o m p r o -
mise b e t w e e n organized labour and domestic industrial capital and, in
conjunction with the inversion of the p r i m a r y and secondary aspects of
t h e m o n e y f o r m , t e n d s t o shift t h e b a l a n c e o f p o w e r i n this c o m p r o m i s e
f r o m o r g a n i z e d l a b o u r t o p r o d u c t i v e c a p i t a l . I t also t e n d s t o s t r e n g t h e n
m o n e y c a p i t a l vis-a-vis p r o d u c t i v e c a p i t a l . T h i s m a y e n c o u r a g e c a p i t a l i n
specific s e c t o r s or e v e n t h e m a j o r i t y of c a p i t a l s o p e r a t i n g in a g i v e n
national e c o n o m i c space to seek to o v e r t u r n that compromise. This h a s
occurred in those liberal economies t h a t h a v e witnessed a neoliberal
r e g i m e shift t h a t h a s b e e n f a c i l i t a t e d b y t h e r e l a t i v e l y u n c o o r d i n a t e d
n a t u r e of industry-finance-labour relations and by the capacity of their
c e n t r a l s t a t e s t o p u r s u e r a d i c a l p r o g r a m m e s w i t h o u t t h e n e e d for m u c h
consultation or concertation. Elsewhere, however, this inversion m a y
simply lead to a renegotiation of the terms of the c o m p r o m i s e and,
p e r h a p s , a narrowing of the parties to that c o m p r o m i s e . This is most
likely w h e r e capital a n d / o r the state regard the c o o p e r a t i o n of w o r k e r s
a n d t r a d e u n i o n s a s e s s e n t i a l for successfully a d d r e s s i n g o t h e r s t r u c t u r a l
c o n t r a d i c t i o n s i n t h e e m e r g i n g p o s t - F o r d i s t e c o n o m y . T h i s i n t u r n will
depend on the extent to which capital and/or the state regard labour-
p o w e r as a l o c u s of skills, c r e a t i v i t y a n d k n o w l e d g e r a t h e r t h a n as j u s t
o n e s u b s t i t u t a b l e f a c t o r o f p r o d u c t i o n a m o n g o t h e r s . I t will also d e p e n d
on the m o r e general features of the state (see chapter 1) and the pre-
vailing p o l i t i c a l s i t u a t i o n .
In short, h o w radical a b r e a k with the postwar c o m p r o m i s e is pos-
sible d e p e n d s o n t h e p r e c i s e f e a t u r e s o f t h e w a g e r e l a t i o n a n d o n w h i c h
f r a c t i o n s of capital, if any, a r e a c t u a l l y i n t e r e s t e d in b r e a k i n g t h e c o m -
p r o m i s e e v e n t h o u g h t h e u n d e r l y i n g s t r u c t u r a l b a l a n c e o f forces o n this
f r o n t h a s shifted against labour. T h i s i s r e f l e c t e d i n different n a t i o n a l
106 The Schumpeterian Competition State

solutions to resolving the n e w problems. Thus, where labour-power is

seen as a fixed cost (for e x a m p l e , c o r e w o r k f o r c e s in J a p a n or G e r m a n y )
a n d / o r l a b o u r u n i o n s a r e well e s t a b l i s h e d o r g a n i z a t i o n a l l y a n d legally a t
local level (for e x a m p l e , B e l g i u m , G e r m a n y , S w e d e n ) , t h e r e has b e e n a
r e s o r t t o i n n o v a t i o n a n d reskilling i n o r d e r t o sustain a h i g h - w a g e , high-
t e c h , h i g h - g r o w t h a c c u m u l a t i o n s t r a t e g y . I n cases such a s G e r m a n y ,
S w e d e n a n d B e l g i u m , this i s reflected i n p r o d u c t i v i t y pacts t h a t m a y also
r e c e i v e state b a c k i n g . C o n v e r s e l y , w h e r e l a b o u r - p o w e r is seen as a vari-
a b l e cost (as i n t h e differently o r g a n i z e d British a n d A m e r i c a n cases)
a n d / o r w h e r e l o c a l u n i o n s a r e w e a k , c a p i t a l m a y a t t a c k u n i o n s a t all
levels a n d a d o p t a h i r e - a n d - f i r e a p p r o a c h i n t h e h o p e that n e o l i b e r a l flex-
ibility w o u l d r e i n f o r c e c o m p e t i t i v e n e s s ( H a n c k e 1996). Social p a c t s h a v e
also d e v e l o p e d i n S o u t h e r n E u r o p e , a l b e i t for s o m e w h a t different
reasons (see b e l o w a n d chapter 4).
Second, whereas money in the K W N S functioned primarily as
n a t i o n a l m o n e y a n d its c i r c u l a t i o n i n t h e n a t i o n a l e c o n o m y was c o n -
trolled by the national state, the subsequent collapse of t h e regulated
postwar regime of credit m o n e y o p e n e d up a P a n d o r a ' s box. This can be
s e e n i n t h e d e v e l o p m e n t o f financial d e r e g u l a t i o n i n a n d a m o n g n a t i o n a l
e c o n o m i e s and the expansion of 'offshore' finance capital. T h e m o v e -
m e n t to international m a r k e t determination of credit terms and currency
prices - s o m e t i m e s , of course, w i t h t h e c o n n i v a n c e of n a t i o n a l s t a t e s
t h e m s e l v e s , especially b y t h e U S A - h a s w e a k e n e d t h e K W N S a s a dis-
tinctive state form. Increasing cross-border flows of financial capital
(including trade in derivatives) have h a d a negative impact on m o n e t a r y
control by national states. Thus, as A l a n H u d s o n n o t e s '[t]he develop-
m e n t o f stateless m o n i e s r e s h a p e d t h e r e g u l a t o r y l a n d s c a p e , u n d e r m i n -
ing t h e g e o g r a p h y - a s p a t i a l o r g a n i z a t i o n of p o w e r a n d social r e l a t i o n s
- o f f i x e d , m u t u a l l y exclusive, t e r r i t o r i a l s t a t e s ' ( 2 0 0 0 : 2 7 7 ) . O n e m e a s u r e
o f this shift i n p r i m a c y c a n b e f o u n d i n t h e e x p a n s i o n o f i n t e r n a t i o n a l
f i n a n c i a l m a r k e t s f r o m t h e 1970s o n w a r d s . B e t w e e n 1963 a n d 1995, t h e
size o f t h e total f u n d s r a i s e d o n i n t e r n a t i o n a l m a r k e t s i n c r e a s e d a t a n
a v e r a g e a n n u a l g r o w t h r a t e of 24.3 p e r c e n t c o m p a r e d to a 5.5 p e r c e n t
a n n u a l g r o w t h r a t e i n w o r l d t r a d e a n d 3.2 p e r c e n t g r o w t h i n g l o b a l p r o -
d u c t i o n . E v e n m o r e significant a r e s h o r t - t e r m f i n a n c i a l f l o w s . A r o u n d
1.5 trillion U S d o l l a r s ( o r t h e i r e q u i v a l e n t i n o t h e r c u r r e n c i e s ) a r e
e x c h a n g e d daily o n f o r e i g n e x c h a n g e m a r k e t s , o n l y 5 p e r c e n t o f w h i c h
i s d i r e c t l y r e l a t e d t o p a y m e n t s for t r a d e d g o o d s a n d services. T h e s e
flows of stateless m o n i e s a r e e s s e n t i a l l y d e t e r r i t o r i a l i z e d , p o s s e s s i n g a
logic a n d d y n a m i c a t o d d s w i t h t h e n a t i o n a l - c e n t r i c o r d e r o f t h e p o s t w a r
i n t e r n a t i o n a l f i n a n c i a l r e g i m e ( L e y s h o n a n d Tickell 1994). T h e crisis o f
n a t i o n a l m o n e y a d d e d significantly t o t h e crisis o f t h e K W N S , a n d f i n d i n g
an a d e q u a t e response to the threat of massive a n d volatile currency
 The Schumpeterian Competition State 107

m o v e m e n t s will b e c r u c i a l t o a n y e m e r g i n g m o d e o f r e g u l a t i o n a t t h e
n a t i o n a l , r e g i o n a l a n d i n t e r n a t i o n a l levels. T h i s h a s r e p e r c u s s i o n s for t h e
r e d i r e c t i o n of e c o n o m i c policy as well as for its i n s t i t u t i o n a l a r c h i t e c t u r e .
In particular, if the relative strength of the national m o n e y on interna-
tional currency m a r k e t s increasingly d e p e n d s on the competitive
s t r e n g t h o f t h e n a t i o n a l e c o n o m y ( o r its m o s t c o m p e t i t i v e firms, cities
n d r e g i o n s ) , p r e s s u r e s will g r o w for s t a t e i n t e r v e n t i o n t o focus o n
s u p p l y - s i d e d e v e l o p m e n t s . L i k e w i s e , if t h e i m p a c t of v o l a t i h t y is to be
reduced, new m e a s u r e s are required to m a n a g e the d e m a n d a n d supply
o f b a n k credit, e s p e c i a l l y i n s o - c a l l e d e m e r g i n g m a r k e t e c o n o m i e s , t o
improve the absorptive capacities of e c o n o m i e s in receipt of inward
i n v e s t m e n t , a n d t o limit t h e risks o f r e g i o n a l a n d g l o b a l c o n t a g i o n f r o m
p a r t i c u l a r financial crises.
T h e i n c r e a s e d salience o f m o n e y a s i n t e r n a t i o n a l c u r r e n c y a n d / o r
s t a t e l e s s m o n e y h a s also m o d i f i e d i n v e s t m e n t p r i o r i t i e s a n d a l t e r e d t h e
relationship b e t w e e n productive a n d financial capital ( G u t t m a n 2002).
Moreover, linked to t h e changing roles of the money and wage forms in
p o s t - F o r d i s m i s t h e shift i n c o n c e r n f r o m m a n a g i n g inflation i n c o n s u m e r
g o o d s p r i c e s a n d w a g e s ( l i n k e d t o b u s i n e s s cycles) t o w o r r i e s a b o u t
b o o m - a n d - b u s t cycles i n f i n a n c i a l assets. S t o c k a n d p r o p e r t y m a r k e t s a r e
especially i m p o r t a n t h e r e , p a r t i c u l a r l y w h e n l i n k e d t o o t h e r shifts, s u c h
as privatization of state-owned industries, the m o v e m e n t from pay-
as-you-go pensions towards funded pensions and the outsourcing of
coflective c o n s u m p t i o n ( s e e c h a p t e r 4). T h i s r e q u i r e s n e w r e s p o n s e s f r o m
c e n t r a l b a n k s a s well a s c o o p e r a t i o n a m o n g c e n t r a l b a n k s w i t h i n t h e
c o n t e x t of a b r o a d e r r e s h a p i n g of t h e i n t e r n a t i o n a l financial a r c h i t e c t u r e .
T h e I n t e r n e t a n d d o t . c o m b u b b l e i s o n e e x a m p l e o f this; t h e risks a s s o -
ciated w i t h so-called financial contagion provide another example.
Third, the contradiction between the exchange- and use-value
m o m e n t s i n p r o d u c t i v e c a p i t a l h a s b e c o m e m o r e significant o w i n g t o
a growing dissociation b e t w e e n abstract fiows in space and concrete
valorization in place c o m p a r e d to the heyday of Atlantic Fordism. This
i s closely r e l a t e d t o t w o sets o f c h a n g e s i n t h e o r g a n i z a t i o n o f c a p i t a l
accumulation: the resurgence of cross-border transactions (often
labelled internationalization or globalization, although generally con-
fined within relatively integrated triad regions rather than being global
in scope) a n d the rise of the virtual economy. S h o r t - t e r m international
financial transactions and the growth of mobile portfolio investments in
an increasingly integrated world m a r k e t t e n d to dissociate m o n e t a r y
f l o w s f r o m t h e n e e d for t h e f i n a n c e c a p i t a l s d i r e c t l y i n v o l v e d t o v a l o r i z e
specific assets i n specific t i m e s a n d p l a c e s . ' T h i s h a s b e e n r e i n f o r c e d b y
the d e v e l o p m e n t of cyberspace as a sphere of e c o n o m i c transactions. As
Kelly n o t e s , ' t h e n e w e c o n o m y o p e r a t e s i n a " s p a c e " r a t h e r t h a n a p l a c e .
108 The Schumpeterian Competition State

a n d o v e r t i m e m o r e a n d m o r e e c o n o m i c t r a n s a c t i o n s will m i g r a t e t o
this n e w s p a c e ' ( 1 9 9 8 : 9 4 ) . E c o n o m i c c y b e r s p a c e i s a n o n - p r o p i n q u i t o u s ,
m u l t i d i m e n s i o n a l s p a c e , with c o m p l e x d y n a m i c s r o o t e d i n t h e possibili-
ties o f f e r e d by c y b e r s p a c e for t h e s i m u l t a n e o u s c o - l o c a t i o n of m y r i a d
entities a n d r e l a t i o n s h i p s . It involves n e w f o r m s of d i s e m b e d d i n g of
e c o n o m i c activities a n d p o s e s n e w p r o b l e m s for their r e - e m b e d d i n g ,
regularization and governance. Rather than being a neutral, third space
b e t w e e n capital a n d l a b o u r , m a r k e t a n d state, p u b l i c a n d p r i v a t e , cyber-
s p a c e is a n e w t e r r a i n on w h i c h conflicts b e t w e e n t h e s e forces, institu-
tions and domains can be fought out.
T o g e t h e r , t h e s e d e v e l o p m e n t s intensify t h e p o t e n t i a l conilict b e t w e e n
s p a c e a n d p l a c e . T h e m o s t c o m m o n l y c i t e d e x p r e s s i o n o f this i s t h e insti-
t u t i o n a l s e p a r a t i o n o f h y p e r m o b i l e financial c a p i t a l f r o m i n d u s t r i a l
c a p i t a l - t h e f o r m e r m o v i n g in an a b s t r a c t s p a c e of flows, t h e l a t t e r still
n e e d i n g t o b e v a l o r i z e d i n place. E v e n t h o s e c o m m e n t a t o r s w h o a r e m o s t
s c e p t i c a l a b o u t t h e significance o f c o n t e m p o r a r y f o r m s o f g l o b a h z a t i o n
c o n c e d e t h a t s o m e t h i n g h a s c h a n g e d i n r e l a t i o n t o f i n a n c i a l f l o w s (for
e x a m p l e . H i r s t a n d T h o m p s o n 1999). M o r e o v e r , i n t h e light o f t h e A s i a n
Crisis, i f n o t b e f o r e , i n t e r n a t i o n a l a n d n a t i o n a l f i n a n c i a l r e g u l a t o r s h a v e
also c o m e t o r e c o g n i z e t h e p r o b l e m s this poses. B u t s i m i l a r conflicts also
a p p e a r in t h e circuits of financial, industrial and commercial capital con-
s i d e r e d severally a s well a s i n t h e i r i n t e r c o n n e c t i o n s . F o r , h o w e v e r m u c h
c a p i t a l m i g r a t e s i n t o c y b e r s p a c e , i t still r e q u i r e s s o m e t e r r i t o r i a l r o o t s . I n
the case of global finance capital, of course, these roots are found in the
grid o f g l o b a l cities ( S a s s e n 1994). E - c o m m e r c e n e e d s a n i n f r a s t r u c t u r e
too. T h i s is e s p e c i a l l y o b v i o u s in t h e case of t h e physical p r o d u c t i o n a n d
d i s t r i b u t i o n o f m a t e r i a l g o o d s a n d s e r v i c e s linked t o B 2 B o r B 2 C t r a n s -
actions on the Internet; but virtual transactions require some form of
i n f r a s t r u c t u r e , e v e n if this is no m o r e t h a n a 'celestial j u k e b o x ' s e n d i n g
digitized music on d e m a n d and an electronic p a y m e n t s system. In the
c a s e o f i n d u s t r i a l capital, t h e r o o t s a r e f o u n d i n i n n o v a t i o n milieus,
i n d u s t r i a l districts, l e a r n i n g r e g i o n s , etc., as well as p h y s i c a l i n f r a s t r u c -
t u r e ( H a r v e y 1982; S c o t t 1998; S t o r p e r 1997). T h u s , t h e g l o b a l i z i n g
k n o w l e d g e - b a s e d e c o n o m y has n o t t r a n s c e n d e d s p a t i a l b a r r i e r s b u t
effects ' n e w a n d m o r e c o m p l e x a r t i c u l a t i o n s o f t h e d y n a m i c s o f m o b i l -
ity a n d f i x h y ' ( R o b i n s a n d G i l l e s p i e 1 9 9 2 : 1 4 9 ) .
A f o u r t h s o u r c e of p r o b l e m s in t h e r e r e g u l a r i z a t i o n of capitalism after
Fordism is the paradox that the economic competitiveness of the most
a d v a n c e d e c o n o m i e s i n c r e a s i n g l y d e p e n d s o n e x t r a - e c o n o m i c factors.
This occurs because of the growing i m p o r t a n c e that is attached to struc-
tural or systemic competitiveness a n d to cultivating the knowledge-base
as a critical s o u r c e of d y n a m i c c o m p e t i t i v e a d v a n t a g e . D i s c o u r s e s a n d
strategies of structural or systemic competitiveness e m p h a s i z e not only
 The Schumpeterian Competition State 109

firm- a n d s e c t o r a l - l e v e l factors b u t also t h e role o f a n e x t e n d e d r a n g e o f

extra-economic institutional contexts and sociocultural conditions in
which e c o n o m i c actors c o m p e t e . ' ' T h e y a r e l i n k e d t o t h e r a p i d e x p a n s i o n
o f ( c o m p e t i n g ! ) b e n c h m a r k i n g e x e r c i s e s a n d services c o n c e r n e d t o c o n -
s t r u c t l e a g u e t a b l e s a n d offer r e c o m m e n d a t i o n s o n h o w t o e n h a n c e s u c h
competitiveness. This extends economic competition to a virtual com-
p e t i t i o n b e t w e e n e n t i r e social f o r m a t i o n s m e d i a t e d t h r o u g h t h e a u d i t
of the world m a r k e t and increases pressures to (develop the capacity) to
valorize a w i d e r a n g e of extra-economic institutions a n d relations. This
is reinforced by the growing importance attached to the knowledge-base
in post-Fordism and thus to knowledge p r o d u c t i o n and transfer through-
o u t t h e social f o r m a t i o n . T h e s e c h a n g e d d i s c o u r s e s a n d s t r a t e g i e s m e a n
in t u r n that hard e c o n o m i c calculation increasingly rests on the m o b i -
lization o f soft social r e s o u r c e s , w h i c h a r e i r r e d u c i b l e t o t h e e c o n o m i c
a n d r e s i s t a n t t o s u c h c a l c u l a t i o n ( V e l t z 1996: 1 1 - 1 2 ) . T h e c o m p e t i t i v e -
n e s s o f cities a n d r e g i o n s , for e x a m p l e , i s n o w said t o d e p e n d n o t o n l y
o n n a r r o w e c o n o m i c d e t e r m i n a n t s b u t also o n localized u n t r a d e d i n t e r -
d e p e n d e n c i e s , k n o w l e d g e assets, r e g i o n a l c o m p e t e n c i e s , i n s t i t u t i o n a l
t h i c k n e s s , social c a p i t a l , t r u s t a n d c a p a c i t i e s for collective l e a r n i n g ,
a s well a s d i s t i n c t i v e a n d a t t r a c t i v e l o c a l a m e n i t i e s a n d c u l t u r e ( A m i n
a n d T h r i f t 1995; M a s k e l l et al. 1998; S t o r p e r 1997). Similarly, t h e r e is also
growing emphasis on i m p r o v i n g the interface b e t w e e n business,
universities and the state to p r o m o t e the knowledge-based economy
( E t z k o w i t z a n d L e y d e s d o r f f 1997). O v e r a l l , this involves r e d r a w i n g t h e
boundaries between the economic and the extra-economic such that
m o r e of the latter are drawn directly into the process of the valorization
o f c a p i t a l . This c a n b e e x p r e s s e d i n t e r m s o f t h e i n c r e a s i n g d o m i n a n c e
of a c c u m u l a t i o n as a p r i n c i p l e of s o c i e t a l i z a t i o n a n d is r e f l e c t e d in t h e
colonization of extra-economic systems a n d the lifeworld by the logic of
c a p i t a l a c c u m u l a t i o n (see c h a p t e r 1). T h i s i s o n e a s p e c t o f t h e i n c r e a s i n g
ecological d o m i n a n c e of capitalism.
T h e d e v e l o p m e n t o f this p a r a d o x i s a s s o c i a t e d w i t h m a j o r n e w c o n -
t r a d i c t i o n s a n d p o t e n t i a l sites o f conflict i n c o n t e m p o r a r y c a p i t a l i s m t h a t
affect b o t h its s p a t i a l a n d t e m p o r a l o r g a n i z a t i o n . I n t e m p o r a l t e r m s ,
t h e r e i s i n c r e a s i n g conflict b e t w e e n s h o r t - t e r m e c o n o m i c c a l c u l a t i o n
(especially i n f i n a n c i a l f l o w s ) a n d t h e l o n g - t e r m d y n a m i c o f r e a l c o m p e -
t i t i o n r o o t e d i n r e s o u r c e s (skills, t r u s t , collective m a s t e r y o f t e c h n i q u e s ,
e c o n o m i e s o f a g g l o m e r a t i o n a n d size) t h a t m a y t a k e y e a r s t o c r e a t e , sta-
bilize a n d r e p r o d u c e . T h e i n c r e a s i n g e m p h a s i s o n reflexivity a n d l e a r n -
ing i n t h e k n o w l e d g e - b a s e d e c o n o m y r e i n f o r c e s t h i s c o n t r a d i c t i o n . F o r ,
p r e c i s e l y b e c a u s e i t t a k e s t i m e t o c r e a t e collective l e a r n i n g c a p a c i t i e s
a n d a s t r o n g e n t r e p r e n e u r i a l c u l t u r e , ' [tjhose f i r m s , s e c t o r s , r e g i o n s a n d
n a t i o n s w h i c h c a n l e a r n f a s t e r o r b e t t e r ( h i g h e r q u a l i t y o r c h e a p e r for a
110 The Schumpeterian Competition State

given quality) become competitive b e c a u s e their k n o w l e d g e is scarce

a n d c a n n o t b e i m m e d i a t e l y i m i t a t e d b y n e w e n t r a n t s o r t r a n s f e r r e d , via
codified a n d f o r m a l c h a n n e l s , t o c o m p e t i t o r f i r m s , r e g i o n s o r n a t i o n s '
( S t o r p e r 1997; 2 5 0 ) . L i k e w i s e , i n s p a t i a l t e r m s , c a p i t a l i s m a l w a y s i n v o l v e s
a p o t e n t i a l c o n t r a d i c t i o n b e t w e e n t h e f o r m a l m a r k e t e c o n o m y consid-
e r e d as a p u r e s p a c e of flows a n d t h e s u b s t a n t i v e l y i n s t i t u t e d e c o n o m y
c o n s i d e r e d as a territorially a n d / o r socially e m b e d d e d system of e x t r a -
e c o n o m i c a s well a s e c o n o m i c r e s o u r c e s a n d c o m p e t e n c i e s . T h i s c o n t r a -
diction has b e e n r e c e n t l y r e i n f o r c e d b y t h r e e d e v e l o p m e n t s : (1) g r o w t h
of n e w technologies based on m o r e complex transnational, national and
r e g i o n a l s y s t e m s o f i n n o v a t i o n ; (2) t h e p a r a d i g m shift f r o m F o r d i s m , w i t h
its e m p h a s i s o n p r o d u c t i v i t y g r o w t h r o o t e d i n e c o n o m i e s o f scale, t o p o s t -
F o r d i s m , w i t h its e m p h a s i s o n a g g l o m e r a t i o n a n d n e t w o r k e c o n o m i e s a s
well as on m o b i l i z i n g social as well as e c o n o m i c s o u r c e s of flexibility
a n d e n t r e p r e n e u r i a l i s m ; a n d (3) t h e m o r e g e n e r a l a t t e m p t s t o p e n e t r a t e
m i c r o s o c i a l r e l a t i o n s i n t h e i n t e r e s t s o f v a l o r i z a t i o n . T h e intensification
of this c o n t r a d i c t i o n is reflected in t u r n in t h e i n c r e a s i n g e m p h a s i s g i v e n
t o social capital, t r u s t a n d c o m m u n i t i e s o f l e a r n i n g a n d t o t h e i m p o r t a n c e
o f e n h a n c i n g c o m p e t i t i v e n e s s b a s e d o n e n t r e p r e n e u r i a l cities, l e a r n i n g
regions, a n e n t e r p r i s e c u l t u r e a n d e n t e r p r i s i n g subjects. T h e l a t t e r stra-
tegic reorientation is linked to m a n y concepts that are emerging to
d e s c r i b e t h e k n o w l e d g e - b a s e d e c o n o m y , w h i c h is itself a specific
construct linked to the new techno-economic paradigm. These concepts
i n c l u d e n a t i o n a l , r e g i o n a l a n d local s y s t e m s o f i n n o v a t i o n , i n n o v a t i v e
m i l i e u s , s y s t e m i c o r s t r u c t u r a l c o m p e t i t i v e n e s s , l e a r n i n g regions, social
capital, trust, l e a r n i n g - b y - d o i n g , s p e e d - b a s e d c o m p e t i t i o n , etc. T h i s p o s e s
n e w d i l e m m a s for actors seeking to stabilize the capital r e l a t i o n over an
e x p a n d i n g r a n g e of scales and o v e r i n c r e a s i n g l y c o m p r e s s e d as well as
extended t e m p o r a l horizons of action.
Fifth, i n t h e p o s t - F o r d i s t (or, a t least, t h e p o s t - i n d u s t r i a l ) a c c u m u l a -
t i o n r e g i m e , t h e i n h e r e n t capitalist c o n t r a d i c t i o n b e t w e e n t h e socializa-
t i o n o f t h e p r o d u c t i v e f o r c e s a n d t h e p r i v a t e a p p r o p r i a t i o n o f profit
acquires a n e w expression in the tension b e t w e e n knowledge as intel-
lectual c o m m o n s and knowledge as intellectual property. This is hardly
s u r p r i s i n g . F o r this b a s i c c o n t r a d i c t i o n h a s d i s t i n c t i v e f o r m s i n different
t i m e s a n d places t h a t g e n e r a t e f u n d a m e n t a l p r o b l e m s o f collective a c t i o n
a s well a s m o r e o r less a c u t e d i l e m m a s for i n d i v i d u a l e c o n o m i c o r politi-
cal a c t o r s . I n its m o s t g e n e r a l f o r m , i t c a n b e e x p r e s s e d i n t e r m s o f t h e
conflicting d e v e l o p m e n t a l i m p l i c a t i o n s o f p r i o r i t i z i n g t h e i n f o r m a t i o n
e c o n o m y o r t h e i n f o r m a t i o n society (cf. B e l l 1973 o n t h e conflict b e t w e e n
e c o n o m i z i n g a n d s o c i o l o g i z i n g logics i n t h e p o s t - i n d u s t r i a l society). T h e
basic f o r m o f t h e c o n t r a d i c t i o n c o n c e r n s t h e p r i v a t e a p p r o p r i a t i o n o f
k n o w l e d g e i n t h e f o r m o f i n t e l l e c t u a l p r o p e r t y rights ( I P R s ) s o t h a t i t
 The Schumpeterian Competition State 111

can b e c o m e t h e basis for m o n o p o l y r e n t s a n d n a t i o n a l c o m p e t i t i v e n e s s

(and thereby becomes subject to m a n y of the tendencies towards m a r k e t
failure l o n g r e c o g n i z e d i n t h e a c a d e m i c s u b d i s c i p l i n e o f t h e e c o n o m i c s
of i n f o r m a t i o n ) a n d t h e w i d e n i n g of p u b l i c access to k n o w l e d g e as a
source of personal e m p o w e r m e n t and the expansion of the public sphere.
B u t this c o n t r a d i c t i o n i s also r e p l i c a t e d i n t h e i n f o r m a t i o n e c o n o m y itself
i n t h e f o r m o f i n t e l l e c t u a l p r o p e r t y r i g h t v e r s u s access t o t h e i n t e l l e c t u a l
c o m m o n s ; a n d , f r o m t h e v i e w p o i n t o f t h e i n f o r m a t i o n society, i n t h e f o r m
o f r i g h t s t o i n d i v i d u a l p r i v a c y a n d t h e claims o f official s e c r e c y v e r s u s
the w i d e n i n g a n d d e e p e n i n g of p u b l i c knowledge.
These contradictions and dilemmas obviously have a long and con-
t e s t e d history. B u t t h e y h a v e a c q u i r e d g r e a t e r m a t e r i a l a n d d i s c u r s i v e
significance t h r o u g h t h e d e v e l o p m e n t o f t h e n e w I C T s a n d t h e i n c r e a s e d
importance of k n o w l e d g e creation as a driving force in e c o n o m i c expan-
sion o n b o t h t h e e x c h a n g e - a n d u s e - v a l u e d i m e n s i o n s . I n d e e d , t h e i m -
portance of economies of agglomeration and economies of networks
i n k n o w l e d g e - b a s e d e c o n o m i e s h e i g h t e n s t h e c o n t r a d i c t i o n from b o t h
sides. T b u s , o n t h e side o f t h e p r o d u c t i v e forces, t h e i n c r e a s i n g socializa-
tion of knowledge production in networked economies makes it hard to
d i s t i n g u i s h legally b e t w e e n t h e i n t e l l e c t u a l p r o p e r t y o f d i f f e r e n t firms a s
a basis for a l l o c a t i n g t h e r e t u r n s t o i n n o v a t i o n ( K u n d n a n i 1 9 9 8 - 9 : 5 6 ) .
This i s e v e n m o r e obviously t h e case for t h e c o n t r i b u t i o n s o f i n d i v i d u a l
' k n o w l e d g e w o r k e r s ' t o t h e o v e r a l l social s y s t e m o f i n n o v a t i o n . This i n
t u r n l e a d s t o a s e a r c h for n e w f o r m s o f e n t e r p r i s e t h a t c a n c a p t u r e t h e
rents from such network economies without destroying any broader
n e t w o r k ( s ) i n v o l v e d i n g e n e r a t i n g t h e m . ' V i r t u a l ' firms, n e t w o r k e d firms,
a n d s t r a t e g i c a l l i a n c e s a r e o n e f o r m i n w h i c h this o c c u r s ( C a t e l l s 1996:
1 5 1 - 2 0 0 ) ; a n o t h e r f o r m i s m o r e t e r r i t o r i a l , i n v o l v i n g i n n o v a t i o n milieus,
l e a r n i n g r e g i o n s , etc., w h e r e n e t w o r k e c o n o m i e s c a n b e c a p t u r e d i n
t h e f o r m of c l u b g o o d s (classically, Silicon Valley). It also e n c o u r a g e s
a t t e m p t s to p r o t e c t v u l n e r a b l e monopolies in knowledge or information
b y e m b e d d i n g t h e m i n t e c h n o l o g y , m a r k e t - g e n e r a t e d s t a n d a r d s , tacit
k n o w l e d g e o r legally e n t r e n c h e d i n t e l l e c t u a l p r o p e r t y rights. T h e s e solu-
t i o n s s e r v e t o intensify t h e c o n t r a d i c t i o n s o n t h e s i d e o f t h e s o c i a l r e l a -
t i o n s o f p r o d u c t i o n , h o w e v e r , u n l e s s t h e r e s u l t i n g n e t w o r k s e m b r a c e all
t h o s e i n v o l v e d i n p r o d u c i n g t h e n e t w o r k e c o n o m i e s . For, w h e r e a s e v e r y
c a p i t a l w a n t s free access t o i n f o r m a t i o n , k n o w l e d g e a n d e x p e r t i s e , i t also
w a n t s t o c h a r g e for t h e i n f o r m a t i o n , k n o w l e d g e a n d e x p e r t i s e t h a t i t
itself c a n supply. T h i s t e n s i o n g e n e r a t e s s y s t e m a t i c a s y m m e t r i e s o f i n t e r -
est w i t h i n t h e i n f o r m a t i o n e c o n o m y d e p e n d i n g o n a c t o r s ' differing p o s i -
tions in the production, circulation and consumption of knowledge. T h e
I P R r e g i m e is currently of overwhelming benefit, of course, to the US
economy.
112 The Schumpeterian Competition State

A sixth site of p r o b l e m s c o n c e r n s t h e a p p r o p r i a t e h o r i z o n s of action

for t h e s p a t i o - t e m p o r a l fix, if any, w i t h i n w h i c h t h e o l d p r i n c i p a l c o n t r a -
dictions of Atlantic Fordism and t h e newly i m p o r t a n t contradictions of
t h e c u r r e n t p e r i o d m i g h t p r o v e m a n a g e a b l e . T h i s i s closely r e l a t e d t o a
n e w c o m p l e x i t y o f t i m e - s p a c e i n i n f o r m a t i o n a l capitalism d u e t o t h e
interaction of new forms of t i m e - s p a c e distantiation and t i m e - s p a c e
c o m p r e s s i o n . T i m e - s p a c e d i s t a n t i a t i o n s t r e t c h e s social r e l a t i o n s o v e r
t i m e a n d space so that they can be controlled or c o o r d i n a t e d over longer
p e r i o d s o f t i m e ( i n c l u d i n g i n t o t h e ever m o r e d i s t a n t f u t u r e ) a n d o v e r
l o n g e r d i s t a n c e s , g r e a t e r areas o r m o r e scales o f activity. I n this r e g a r d ,
t h e n , g l o b a l i z a t i o n results f r o m i n c r e a s i n g spatial d i s t a n t i a t i o n reflected
i n t h e g r o w i n g s p a t i a l r e a c h o f divisions o f l a b o u r i n d i f f e r e n t f i e l d s ;
a n d i t i s e n a b l e d b y n e w m a t e r i a l a n d social t e c h n o l o g i e s o f t r a n s p o r t a -
tion, c o m m u n i c a t i o n , c o m m a n d , control and intelligence. Conversely,
t i m e - s p a c e c o m p r e s s i o n i n v o l v e s the i n t e n s i f i c a t i o n o f ' d i s c r e t e ' e v e n t s
i n r e a l time^ a n d / o r i n c r e a s e d velocity o f m a t e r i a l a n d i m m a t e r i a l f l o w s
o v e r a g i v e n distance.^ T h i s is l i n k e d to c h a n g i n g m a t e r i a l and social t e c h -
n o l o g i e s e n a b l i n g m o r e precise c o n t r o l o v e r e v e r - s h o r t e r p e r i o d s o f
a c t i o n as well as ' t h e c o n q u e s t of s p a c e by t i m e ' . Differential abilities to
s t r e t c h a n d / o r c o m p r e s s t i m e a n d s p a c e h e l p t o s h a p e p o w e r a n d resist-
ance in t h e e m e r g i n g global order. T h u s the p o w e r of h y p e r m o b i l e forms
o f f i n a n c e c a p i t a l d e p e n d s o n their u n i q u e c a p a c i t y t o c o m p r e s s t h e i r
o w n d e c i s i o n - m a k i n g t i m e (at t h e e x t r e m e , for e x a m p l e , t h r o u g h split-
s e c o n d c o m p u t e r i z e d t r a d i n g ) , w h i l s t c o n t i n u i n g t o e x t e n d a n d consoli-
d a t e t h e i r g l o b a l r e a c h . I t i s t h e differential c o m b i n a t i o n o f t i m e - s p a c e
d i s t a n t i a t i o n a n d t i m e - s p a c e c o m p r e s s i o n t h a t w a s facilitated b y n e w
ICTs and enthusiastically e m b r a c e d by s o m e fractions of capital (and
some states) that contributed to the erosion of the spatio-temporal fix of
Atlantic Fordism.
A t least a s c o m p a r e d w i t h t h e b o o m y e a r s o f A t l a n t i c F o r d i s m , this
p h e n o m e n o n c a n usefully b e d e s c r i b e d a s t h e r e l a t i v i z a t i o n o f scale
(Collinge 1996,1999; chapter 5). T h e current period involves a prolifera-
t i o n o f s p a t i a l scales ( w h e t h e r t e r r e s t r i a l , t e r r i t o r i a l o r t e l e m a t i c : see
L u k e 1994), t h e i r r e l a t i v e d i s s o c i a t i o n i n c o m p l e x t a n g l e d h i e r a r c h i e s
( r a t h e r t h a n a s i m p l e n e s t i n g o f scales) a n d a n i n c r e a s i n g l y c o n v o l u t e d
m i x o f scale s t r a t e g i e s a s e c o n o m i c a n d political f o r c e s seek t h e m o s t
f a v o u r a b l e c o n d i t i o n s for i n s e r t i o n i n t o a c h a n g i n g i n t e r n a t i o n a l o r d e r .
T h e n a t i o n a l scale h a s lost t h e t a k e n - f o r - g r a n t e d p r i m a c y i t h e l d i n t h e
e c o n o m i c a n d political o r g a n i z a t i o n o f A d a n t i c F o r d i s m ; b u t this d o e s
n o t m e a n t h a t s o m e o t h e r scale o f e c o n o m i c a n d political o r g a n i z a t i o n
( w h e t h e r t h e global o r t h e local, t h e u r b a n o r t h e t r i a d i c ) h a s , a c q u i r e d
a s i m i l a r p r i m a c y . I n d e e d , t h e r e i s i n t e n s e c o m p e t i t i o n a m o n g different
e c o n o m i c a n d political spaces to b e c o m e t h e primary anchorpoint of
 The Schumpeterian Competition State 11 3

capital a c c u m u l a t i o n . As yet, t h e n e w politics of scale is u n r e s o l v e d -

a l t h o u g h I s u s p e c t t h a t triads will e v e n t u a l l y r e p l a c e t h e n a t i o n as t h e
p r i m a r y scale for m a n a g i n g , displacing a n d d e f e r r i n g t h e c o n t r a d i c t i o n s
a n d d i l e m m a s o f a globalizing, k n o w l e d g e - b a s e d e c o n o m y (for f u r t h e r
discussion o f t h e political e c o n o m y o f scale, s e e c h a p t e r 5 ) . T h i s r e l a -
tivization of scale is a f u r t h e r f a c t o r c o n t r i b u t i n g to t h e g r o w i n g h e t e r o -
g e n e i t y a n d d i s a r t i c u l a t i o n o f n a t i o n a l p o w e r blocs a n d , a f o r t i o r i , t o t h e
a p p a r e n t loss o f p o w e r b y n a t i o n a l s t a t e s .

3. The Impact of Globalization

This r e - a r t i c u l a t i o n of s o m e b a s i c c o n t r a d i c t i o n s of capitalist social for-

mations is rooted in competition as the driving force behind capital
a c c u m u l a t i o n . T h i s c r e a t e s p r e s s u r e s n o t o n l y for t e c h n o l o g i c a l i n n o v a -
t i o n b u t also for i n n o v a t i o n i n m a n y o t h e r a r e a s t h a t b e a r d i r e c t l y o r
i n d i r e c t l y o n t h e r a t e o f profit. F o r m a r k e t - m e d i a t e d c o m p e t i t i o n
i n c r e a s e s p r e s s u r e s o n firms, r e g i o n s o r p r o d u c t i o n s y s t e m s t o s t a y a h e a d
of their competitors so that ever-renewed technological rents and
i n c r e a s i n g m a r k e t s h a r e c a n a l l e v i a t e t h e n o r m a l t e n d e n c y for s u p e r -
profits t o b e c o m p e t e d away. C h a n g i n g f o r m s o f s c a l a r a r t i c u l a t i o n a n d
n e w scalar strategies are an i m p o r t a n t aspect of such competition, a n d
t h e s e i n t u r n affect t h e f o r m s o f a p p e a r a n c e o f s t r u c t u r a l c o n t r a d i c t i o n s
a n d s t r a t e g i c d i l e m m a s a n d t h e viability o f t h e s p a t i o - t e m p o r a l fixes t h a t
f r o m t i m e t o t i m e c o m e t o b e i n s t i t u t i o n a l i z e d a s a m e a n s o f stabilizing
a c c u m u l a t i o n i n s o m e social spaces a t t h e e x p e n s e o f d i s p l a c i n g a n d
d e f e r r i n g p r o b l e m s e l s e w h e r e . It is in this c o n t e x t t h a t I p r o p o s e to
discuss t h e c o m p l e x q u e s t i o n o f g l o b a l i z a t i o n , its n a t u r e a n d its a l l e g e d
impact on accumulation regimes, m o d e s of regulation and the state.
Globalization is a polyvalent, promiscuous, controversial w o r d t h a t
often o b s c u r e s m o r e t h a n i t r e v e a l s a b o u t r e c e n t e c o n o m i c , p o l i t i c a l , s o c i a l
a n d cultural changes. It is best used to d e n o t e a supercomplex
series o f m u l t i c e n t r i c , m u l t i s c a l a r , m u l t i t e m p o r a l , m u l t i f o r m a n d m u l t i -
c a u s a l p r o c e s s e s . It is multicentric b e c a u s e it e m e r g e s f r o m activities in
m a n y p l a c e s r a t h e r t h a n f r o m a single c e n t r e - a l t h o u g h s o m e c e n t r e s
are m o r e important than others as motors of transformation. It is
multiscalar b e c a u s e i t e m e r g e s f r o m a c t i o n s o n m a n y scales - w h i c h c a n
n o l o n g e r b e s e e n a s n e s t e d i n a n e a t h i e r a r c h y l i k e s o m a n y R u s s i a n dolls,
b u t as coexisting and i n t e r p e n e t r a t i n g in a tangled and confused m a n n e r
- a n d it d e v e l o p s a n d d e e p e n s t h e s c a l a r as well as t h e s p a t i a l d i v i s i o n of
labour. Thus what could be described from o n e vantage point as glob-
a l i z a t i o n m i g h t b e r e d e s c r i b e d ( a n d , p e r h a p s , m o r e fruitfully) i n o t h e r
t e r m s f r o m o t h e r s c a l a r v i e w p o i n t s : for e x a m p l e , a s i n t e r n a t i o n a l i z a t i o n .
114 The Schumpeterian Competition State

t r i a d i z a t i o n , r e g i o n a l b l o c f o r m a t i o n , g l o b a l city n e t w o r k - b u i l d i n g , cross-
b o r d e r r e g i o n f o r m a t i o n , i n t e r n a t i o n a l l o c a l i z a t i o n , glocalization,
glurbanization or transnationalization (see pp. 181-3 and 189-90).' It is
multitemporal b e c a u s e it involves an e v e r m o r e c o m p l e x r e s t r u c t u r i n g
a n d rearticulation of temporalities and time horizons. This aspect is
captured in the notions of time-space distantiation and time-space
c o m p r e s s i o n as defined a b o v e ( s e e p. 112). G l o b a h z a t i o n is clearly multi-
causal b e c a u s e i t r e s u l t s f r o m t h e c o m p l e x , c o n t i n g e n t i n t e r a c t i o n o f m a n y
d i f f e r e n t c a u s a l p r o c e s s e s . A n d it is also multiform. It a s s u m e s different
f o r m s i n different c o n t e x t s a n d c a n b e realized t h r o u g h different strate-
gies - n e o l i b e r a l g l o b a l i z a t i o n b e i n g b u t o n e ( R u i g r o k a n d v a n Tulder
1995).
T a k e n t o g e t h e r , t h e s e f e a t u r e s m e a n t h a t , far f r o m g l o b a l i z a t i o n being
a u n i t a r y causal m e c h a n i s m , i t s h o u l d b e u n d e r s t o o d a s t h e c o m p l e x ,
e m e r g e n t p r o d u c t o f m a n y different f o r c e s o p e r a t i n g o n m a n y s c a l e s
I n d e e d , in s o m e ways, t h e g l o b a l is little m o r e t h a n 'a hugely extended
network of localities' ( C z a r n i a w s k a a n d S e v o n 1996; 22; italics in origi-
nal). Hence nothing can be explained in terms of the causal powers of
g l o b a l i z a t i o n - let a l o n e in t e r m s of c a u s a l p o w e r s t h a t a r e i n e v i t a b l e a n d
i r r e v e r s i b l e a n d t h a t a r e a c t u a l i z e d o n s o m e i n t a n g i b l e stage b e h i n d o u r
backs and/or on s o m e intangible p l a n e above our heads. Instead h is
g l o b a l i z a t i o n s t h e m s e l v e s t h a t n e e d e x p l a i n i n g i n all t h e i r m a n i f o l d
s p a t i o - t e m p o r a l c o m p l e x i t y a n d i t i s o n l y w h e n its d i f f e r e n t a s p e c t s a r e
d i s e n t a n g l e d and their a s s o c i a t e d t e n d e n c i e s a n d c o u n t e r t e n d e n c i e s
h a v e b e e n identified t h a t w e c a n b e g i n t o assess t h e i m p l i c a t i o n s o f
g l o b a l i z a t i o n for e c o n o m i c , p o l i t i c a l a n d social r e l a t i o n s .
T h u s seen, g l o b a l i z a t i o n h a s s t r u c t u r a l a n d s t r a t e g i c m o m e n t s . Struc-
turally, i t involves t h e p r o c e s s e s w h e r e b y increasing global i n t e r d e p e n -
d e n c e is created a m o n g actions, organizations a n d institutions within
(but n o t n e c e s s a r i l y a c r o s s ) d i f f e r e n t f u n c t i o n a l s u b s y s t e m s ( e c o n o m y ,
law, politics, e d u c a t i o n , science, s p o r t , etc.) and in different s p h e r e s of
t h e lifeworld. T h e s e p r o c e s s e s o c c u r o n v a r i o u s s p a t i a l scales, o p e r a t e
differently in each functional subsystem, involve complex and tangled
causal hierarchies rather than a simple, unilinear, b o t t o m - u p or top-down
m o v e m e n t , a n d o f t e n d i s p l a y a n e c c e n t r i c ' n e s t i n g ' o f t h e d i f f e r e n t scales
o f social o r g a n i z a t i o n . W h i l e g l o b a l i z a t i o n o b v i o u s l y d e v e l o p s u n e v e n l y
i n b o t h s p a c e a n d t i m e , i t c a n b e said t o i n c r e a s e insofar a s t h e c o v a r i -
a t i o n o f r e l e v a n t activities i s spatially m o r e e x t e n s i v e a n d / o r o c c u r s m o r e
rapidly. I n d e e d , a m a j o r e l e m e n t i n t h e n o v e l t y o f r e c e n t g l o b a l i z a t i o n
t r e n d s i s t h e s p e e d a t w h i c h s u c h c o v a r i a t i o n o c c u r s a s well a s its e x p a n d -
ing s p a t i a l r e a c h . T h e s u p e r i o r c a p a c i t i e s o f c a p i t a l t o e n g a g e i n t i m e -
space distantiation and t i m e - s p a c e c o m p r e s s i o n are a major factor in
t h e g r o w i n g e c o l o g i c a l d o m i n a n c e of a c c u m u l a t i o n on a global scale.
 The Schumpeterian Competition State 115

G l o b a l i z a t i o n also p o s e s s e r i o u s p r o b l e m s for global g o v e r n a n c e i n s o f a r

as this m u s t be t a c k l e d across a r a n g e of p o t e n t i a l l y c o n t r a d i c t o r y t e m -
poral a n d spatial horizons. This brings us to t h e strategic dimension of
globalization.
Strategically, g l o b a l i z a t i o n r e f e r s t o v a r i o u s a c t o r s ' a t t e m p t s t o g l o b -
ally c o o r d i n a t e t h e i r activities i n ( b u t n o t n e c e s s a r i l y a c r o s s ) d i f f e r e n t
functional s u b s y s t e m s a n d / o r t h e lifeworld. T h i s d o e s n o t r e q u i r e t h a t
t h e a c t o r s i n v o l v e d a r e physically p r e s e n t a t all p o i n t s i n t h e g l o b e , o f
c o u r s e ; all i t r e q u i r e s i s t h a t t h e y a t t e m p t t o c o o r d i n a t e t h e i r activities
with o t h e r s i n o r d e r t o p r o d u c e g l o b a l effects. T h e l a t t e r c a n r a n g e
from m e t a s t e e r i n g ( c o n s t i t u t i o n a l o r i n s t i t u t i o n a l d e s i g n ) for a m o r e o r
less c o m p r e h e n s i v e g l o b a l o r d e r t o t h e p u r s u i t o f specific e c o n o m i c -
corporate interests within such a metaf r a m e w o r k . A m o n g the most ambi-
t i o u s g l o b a l p r o j e c t s o n e c o u l d i n c l u d e p r o j e c t s for w o r l d g o v e r n m e n t ,
g l o b a l g o v e r n a n c e o r a N e w W o r l d O r d e r . T h e r e i s clearly s c o p e for w i d e
variation in such projects, as evidenced by the neoliberal,market-led glob-
alization favoured by t h e World B a n k , t h e h o r i z o n t a l global g o v e r n a n c e
favoured by p r o p o n e n t s - especially n o n - g o v e r n m e n t a l organizations
( N G O s ) - o f i n t e r n a t i o n a l r e g i m e s , a n d p l a n s for m o r e t o p - d o w n i n t e r -
statal g o v e r n m e n t . L e s s a m b i t i o u s , b u t still global, p r o j e c t s m i g h t r a n g e
from attempts to establish international regimes to govern particular
fields of a c t i o n on a g l o b a l scale t h r o u g h s t r a t e g i c a l l i a n c e s o r c h e s t r a t e d
by t r a n s n a t i o n a l enterprises (alliances t h a t m a y include m o r e local or
r e g i o n a l l y b a s e d f i r m s a s well a s n o n - p r o f i t - o r i e n t e d o r g a n i z a t i o n s ) o r
c o o p e r a t i o n a m o n g g l o b a l cities t o c o n s o l i d a t e t h e i r d o m i n a n c e i n t h e
h i e r a r c h y o f g l o b a b cities d o w n t o t h e efforts o f i n d i v i d u a l f i r m s t o c o n -
solidate a d o m i n a n t or even a niche position within t h e international
d i v i s i o n o f l a b o u r a n d / o r c i r c u l a t i o n o f g o o d s a n d services.
T h u s v i e w e d , w h a t i s g e n e r a l l y labelled n o w a d a y s a s e c o n o m i c g l o b -
a l i z a t i o n rarely, if e v e r , i n v o l v e s full s t r u c t u r a l i n t e g r a t i o n a n d s t r a t e g i c
c o o r d i n a t i o n a c r o s s t h e g l o b e . P r o c e s s e s i n c l u d e d u n d e r this r u b r i c a c t u -
ally i n c l u d e : (1) i n t e r n a t i o n a l i z a t i o n o f n a t i o n a l e c o n o m i c s p a c e s t h r o u g h
growing penetration (inward flows) and extraversion (outward flows);
(2) f o r m a t i o n o f r e g i o n a l e c o n o m i c b l o c s e m b r a c i n g s e v e r a l n a t i o n a l
e c o n o m i e s - including, most notably, t h e formation of various formally
o r g a n i z e d blocs i n t h e t r i a d i c r e g i o n s o f N o r t h A m e r i c a , E u r o p e a n d E a s t
Asia - and t h e d e v e l o p m e n t of f o r m a l links b e t w e e n these blocs -
notably through the Asia-Pacific E c o n o m i c Cooperation forum, the New
T r a n s a t l a n t i c A g e n d a , a n d t h e A s i a - E u r o p e M e e t i n g s ; (3) g r o w t h o f
m o r e 'local i n t e r n a t i o n a l i z a t i o n ' o r 'virtual r e g i o n s ' t h r o u g h t h e d e v e l -
o p m e n t o f e c o n o m i c ties b e t w e e n c o n t i g u o u s o r n o n - c o n t i g u o u s l o c a l
a n d r e g i o n a l a u t h o r i t i e s i n d i f f e r e n t n a t i o n a l e c o n o m i e s - ties t h a t o f t e n
b y p a s s t h e level o f t h e n a t i o n a l s t a t e b u t m a y also b e s p o n s o r e d b y t h e
116 The Schumpeterian Competition State

l a t t e r ; (4) e x t e n s i o n a n d d e e p e n i n g o f m u l t i n a t i o n a l i z a t i o n a s multi-
national companies, transnational banks and international producer
s e r v i c e s firms m o v e from l i m i t e d e c o n o m i c activities a b r o a d t o m o r e
c o m p r e h e n s i v e a n d w o r l d w i d e s t r a t e g i e s , s o m e t i m e s e x t e n d i n g t o 'global
l o c a l i z a t i o n ' , w h e r e b y firms p u r s u e a global s t r a t e g y b a s e d o n exploiting
a n d / o r a d j u s t i n g t o local d i f f e r e n c e s ; (5) w i d e n i n g a n d d e e p e n i n g o f
international regimes covering economic and economically relevant
i s s u e s ; a n d (6) e m e r g e n c e o f g l o b a l i z a t i o n p r o p e r t h r o u g h t h e i n t r o d u c -
t i o n a n d a c c e p t a n c e o f global n o r m s a n d s t a n d a r d s , t h e a d o p t i o n o f
global b e n c h m a r k i n g , t h e d e v e l o p m e n t o f globally i n t e g r a t e d m a r k e t s
t o g e t h e r w i t h globally o r i e n t e d s t r a t e g i e s , a n d ' d e r a c i n a t e d ' firms with
n o e v i d e n t n a t i o n a l o p e r a t i o n a l b a s e . I n each c a s e t h e s e p r o c e s s e s could
b e said t o b e c o n t r i b u t i n g i n h o w e v e r m e d i a t e d a n d i n d i r e c t a way t o
t h e s t r u c t u r a l i n t e g r a t i o n a n d s t r a t e g i c c o o r d i n a t i o n o f t h e capitalist
e c o n o m y on a global scale. In this w a y t h e s e p r o c e s s e s a r e also con-
t r i b u t i n g i n t h e i r i n t e r c o n n e c t i o n t o t h e f o r m a t i o n o f a n i n t e g r a t e d world
m a r k e t as t h e space within which t h e law of value operates. This in turn
i s a s s o c i a t e d with t h e i n c r e a s e d e c o l o g i c a l d o m i n a n c e o f t h e capitalist
e c o n o m y a n d its c o n t r a d i c t o r y d y n a m i c . B u t t h e s e p r o c e s s e s a r e achiev-
i n g this in a d i s p e r s e d , f r a g m e n t e d , a n d p a r t i a l m a n n e r , a n d t h e y a r e far
from creating an homogenized world economy m a r k e d by the absence
of uneven spatio-temporal development.
I n s h o r t , w h a t g l o b a l i z a t i o n i n v o l v e s b o t h s t r u c t u r a l l y a n d strategi-
cally is t h e c r e a t i o n a n d / o r r e s t r u c t u r i n g of scale as a social r e l a t i o n a n d
as a site of social relations. T h i s is e v i d e n t in t h e c o n t i n u i n g (if often
t r a n s f o r m e d ) significance o f s m a l l e r scales ( n o t a b l y t h e u r b a n , t h e cross-
b o r d e r , t h e n a t i o n a l a n d m a c r o r e g i o n a l ) a s s u b s t a n t i v e sites o f r e a l eco-
n o m i c activities; i n e c o n o m i c s t r a t e g i e s o r i e n t e d t o t h e a r t i c u l a t i o n
o f o t h e r scales i n t o t h e global; a n d i n n e w social m o v e m e n t s b a s e d o n
localism, various tribalisms or resurgent nationalism, and resistant in
d i f f e r e n t w a y s to g l o b a l i z a t i o n . T h i s i m p l i e s in t u r n t h a t a global
s t r a t e g y s h o u l d b e sensitive t o o t h e r scales t h a n t h e ' p u r e l y ' g l o b a l -
e s p e c i a l l y a s t h e latter h a s social m e a n i n g o n l y i n r e l a t i o n t o l e s s e r scales.
I n d e e d , t h e g l o b a l m o r e often serves a s t h e u l t i m a t e h o r i z o n o f action
r a t h e r t h a n t h e a c t u a l site o f a c t i o n . Or, i n o t h e r w o r d s , a s a n u l t i m a t e
h o r i z o n of a c t i o n , it s e r v e s as a m e a n s to o r i e n t a c t i o n s on l e s s e r scales.
T h i s i s n o t a n insignificant role. F o r f a i l u r e t o t a k e s t r a t e g i c a c c o u n t o f
t h e global, e v e n i f a c t i o n s r e m a i n c o n f i n e d t o o t h e r scales, c o u l d well lead
to a m o r e or less r a p i d loss of c o m p e t i t i v e n e s s .
G l o b a l i z a t i o n is p a r t of a p r o l i f e r a t i o n of scales as i n s t i t u t i o n a l i z e d ,
n a r r a t e d objects o f action, r e g u l a r i z a t i o n a n d g o v e r n a n c e . T h e n u m b e r
of d i s c r e t e scales of a c t i o n t h a t c a n be d i s t i n g u i s h e d is p o t e n t i a l l y infi-
n i t e , b u t far f e w e r scales a c t u a l l y c o m e t o b e i n s t i t u t i o n a l i z e d a s explicit
 The Schumpeterian Competition State 117

objects o f r e g u l a r i z a t i o n a n d g o v e r n a n c e . F o r this d e p e n d s o n t h e avail-

abihty of specific t e c h n o l o g i e s of p o w e r - m a t e r i a l , social a n d s p a t i o -
t e m p o r a l - t h a t t r a n s f o r m p o t e n t i a l scales of a c t i o n i n t o a c t u a l sites of
: action. I n a d d i t i o n t o logistical m e a n s ( d i s t a n t i a t i o n , c o m p r e s s i o n , v i r t u a l
c o m m u n i c a t i o n ) , a t t e n t i o n also n e e d s t o b e g i v e n t o m o d e s o f g o v e r -
nance, o r g a n i z a t i o n a l t e c h n o l o g i e s a n d i n s t i t u t i o n a l a r c h i t e c t u r e s . I n t h i s
c o n t e x t I suggest t h a t e c o n o m i c a l l y a n d p o l i t i c a l l y significant i n s t i t u -
tionalized scales of a c t i o n h a v e p r o l i f e r a t e d as a r e s u l t of t h e d e v e l o p -
m e n t o f n e w t e c h n o l o g i e s , o r g a n i z a t i o n s a n d i n s t i t u t i o n s with n e w
s p a t i o - t e m p o r a l h o r i z o n s o f a c t i o n . M o r e o v e r , a s n e w scales e m e r g e
a n d / o r e x i s t i n g scales g a i n i n i n s t i t u t i o n a l t h i c k n e s s , n e w m e c h a n i s m s t o
link o r c o o r d i n a t e t h e m also t e n d t o e m e r g e . T h i s i n t u r n o f t e n p r o m p t s
efforts t o c o o r d i n a t e t h e s e n e w c o o r d i n a t i o n m e c h a n i s m s . T h u s , a s t h e
triad r e g i o n s b e g i n t o a c q u i r e i n s t i t u t i o n a l f o r m a n d r e g i o n a l i d e n t i t y ,
n e w f o r u m s h a v e d e v e l o p e d for c o o r d i n a t i n g b i l a t e r a l r e l a t i o n s b e t w e e n
them.
A similar process is at w o r k regarding t e m p o r a l horizons of action.
N e w i n f o r m a t i o n , c o m m u n i c a t i o n , a n d logistical a n d o r g a n i z a t i o n a l
technologies have enhanced the capacities of some actors to engage in
t i m e - s p a c e c o m p r e s s i o n , a n d this has h e l p e d t o t r a n s f o r m p o w e r r e l a -
tions w i t h i n a n d a c r o s s d i f f e r e n t s y s t e m s a n d t h e l i f e w o r l d . T i m e - s p a c e
compression contributes to globalization through the increased capac-
ities i t offers for t i m e - s p a c e d i s t a n t i a t i o n . I t a l s o r e i n f o r c e s t h e e c o l o g i -
cal d o m i n a n c e o f t h e m a r k e t e c o n o m y b y e n h a n c i n g t h e o p p o r t u n i t i e s
for s o m e e c o n o m i c a g e n t s t o intensify t h e e x c h a n g e - v a l u e m o m e n t o f
t h e c a p i t a l r e l a t i o n a t t h e e x p e n s e o f t h e u s e - v a l u e m o m e n t ; a n d for
o t h e r s t o r e s p o n d t o this b y m o v i n g t o j u s t - i n - t i m e p r o d u c t i o n a n d fast
service t o t h e i r m a r k e t s ( S u m 1999). T r e n d s t o w a r d s t i m e - s p a c e c o m -
p r e s s i o n a r e also a c c o m p a n i e d b y g r o w i n g r e c o g n i t i o n o f l o n g e r - t e r m
t e m p o r a l h o r i z o n s up to t h e longue duree of e n v i r o n m e n t a l d a m a g e -
a l t h o u g h g l o b a l i z a t i o n i s also a s s o c i a t e d with its a c c e l e r a t i o n . T h e s e
d e v e l o p m e n t s p o s e p r o b l e m s o f i n t e r t e m p o r a l c o m p a r i s o n s a n d calcu-
l a t i o n a s well a s i n t e r t e m p o r a l c o o r d i n a t i o n ; a n d t h e y call for m o r e
complex forms of organization and coordination - which thereby
i n c r e a s e t h e c o m p l e x i t y of t h e s y s t e m as a w h o l e .
T h u s , far f r o m p r o d u c i n g h o m o g e n i z e d g l o b a l e c o n o m i c s p a c e , t h e
m a n y and varied processes involved in globalization actually involve the
r e o r d e r i n g - a c r o s s a w i d e r a n g e of e c o n o m i c s p a c e s on different s p a t i a l
scales - o f d i f f e r e n c e s a n d c o m p l e m e n t a r i t i e s a s t h e b a s i s for d y n a m i c
competitive advantages. This has structural aspects linked to the struc-
t u r a l c o u p l i n g a n d c o - e v o l u t i o n o f d i f f e r e n t spaces w i t h i n a n e m e r g i n g
g l o b a l d i v i s i o n o f l a b o u r a n d its e c c e n t r i c , n e s t e d , s u b s c a l e s ; a n d
strategic aspects, w i t h different a c t o r s l o o k i n g for t h e b e s t m e a n s o f
118 The Schumpeterian Competition State

i n s e r t i n g t h e m s e l v e s i n t o t h e s p a t i a l , scalar a n d t e m p o r a l divisions o f
l a b o u r . N o t all a c t o r s a r e ( o r could h o p e t o be) m a j o r global p l a y e r s i n
t h e w o r l d m a r k e t , b u t a n i n c r e a s i n g n u m b e r still n e e d t o a t t e n d t o t h e
global as a h o r i z o n of action, to t h e i m p l i c a t i o n s of c h a n g i n g scalar
divisions, a n d t o t h e differential i m p a c t o f t i m e - s p a c e d i s t a n t i a t i o n and
compression on their identities, interests and strategies. These structural
a n d s t r a t e g i c d i m e n s i o n s o f g l o b a l i z a t i o n a n d its role i n r e i n f o r c i n g t h e
o p e r a t i o n of t h e capitalist l a w of value ( s e e c h a p t e r 1) highlights t h e
i m p o r t a n c e o f p r o d u c i n g , a p p r o p r i a t i n g , o r g a n i z i n g , r e s t r u c t u r i n g and
c o n t r o l l i n g social s p a c e a s p a r t o f a c c u m u l a t i o n s t r a t e g i e s a n d their
r e g u l a t i o n ( L e f e b v r e 1991) a s w e l l a s t h e ability t o t r a n s f o r m a n d c o n t r o l
t h e m u l t i p l e t e m p o r a l i t i e s o f e c o n o m i c , p o l i t i c a l a n d social action and
t h e i r i n t e r a c t i o n w i t h p l a c e , s p a c e , a n d scale.
T h e s e c o n t r a d i c t i o n s a n d conflicts a r e e s p e c i a l l y c l e a r i n t h e c u r r e n t l y
d o m i n a n t neoliberal form of globalization. Current neoliberal trends in
globalization reinforce the abstract-formal m o m e n t s of exchange-value
in the various structural forms of the capital relation at the expense of
t h e s u b s t a n t i v e - m a t e r i a l m o m e n t s o f u s e - v a l u e ( s e e t a b l e 1.1 i n c h a p t e r
1). F o r it is c a p i t a l in t h e s e a b s t r a c t m o m e n t s t h a t is m o s t easily d i s e m -
b e d d e d f r o m specific p l a c e s a n d t h e r e b y f r e e d t o 'flow' freely t h r o u g h
s p a c e a n d time.'" H o w e v e r , i n e a c h o f its m o r e c o n c r e t e m o m e n t s , capital
has its o w n p a r t i c u l a r p r o d u c t i v e a n d r e p r o d u c t i v e r e q u i r e m e n t s . T h e s e
c a n often be m a t e r i a l i z e d o n l y in specific types of s p a t i o - t e m p o r a l loca-
t i o n . T h i s leads t o a g e n e r a l t e n s i o n b e t w e e n n e o l i b e r a l d e m a n d s t o
accelerate the flow of abstract ( m o n e y ) capital t h r o u g h an increasingly
d i s e m b e d d e d s p a c e a n d t h e n e e d for t h e m o r e c o n c r e t e forms o f capital
t o b e 'fixed' i n t i m e a n d place a s weU a s e m b e d d e d i n specific social rela-
t i o n s as a c o n d i t i o n for t h e i r v a l o r i z a t i o n . T h i s a p p l i e s n o t o n l y to t h e
r e l a t i o n b e t w e e n d i f f e r e n t f r a c t i o n s o f c a p i t a l b u t also t o t h e q u e s t i o n
o f h o w t o r e g a r d l a b o u r - p o w e r a n d t h e i n d i v i d u a l a n d social w a g e . T h u s
t h e n e o l i b e r a l a p p r o a c h o f f i n a n c e capital t e n d s t o r e g a r d l a b o u r - p o w e r
as one abstract, substitutable factor of production a m o n g others, to be
sought a r o u n d the globe wherever it can be purchased most cheaply; con-
versely, t h e m o r e p r o d u c t i v i s t a p p r o a c h o f i n d u s t r i a l c a p i t a l still t e n d s t o
r e g a r d l a b o u r - p o w e r a s e m b o d y i n g c o n c r e t e skills a n d k n o w l e d g e t h a t
c a n be a p p l i e d in specific p r o d u c t i o n c o n d i t i o n s in specific p l a c e s . Dif-
f e r e n t v a r i e t i e s o f c a p i t a l i s m a n d scalar s t r a t e g i e s a r e a s s o c i a t e d with
d i f f e r e n t w a y s o f a t t e m p t i n g t o m a n a g e this t e n s i o n a n d t o defer a n d dis-
place its c o n s e q u e n c e s . C h a p t e r 1 a l r e a d y r e f e r r e d to t h e p o s s i b i l i t i e s of
different a p p r o a c h e s t o this t e n s i o n o n different scales ( s e e also G o u g h
a n d E i s e n s c h i t z 1996) a n d states on d i f f e r e n t scales will t y p i c a l l y p l a y a
k e y r o l e i n m a n a g i n g this t e n s i o n w i t h i n a n y p a r t i c u l a r i n d i v i d u a l s p a t i o -
t e m p o r a l fix (see s e c t i o n 6 b e l o w ) .
 The Schumpeterian Competition State 119

4. Schumpeterian Policies and Competitiveness

llie changing forms of articulation of t h e economic a n d extra-economic,

t h e r e l a t i v i z a t i o n o f scale t h a t a c c o m p a n i e s g l o b a l i z a t i o n (as d e f i n e d
above), and the growing complexities of time-space distantiation and
c o m p r e s s i o n h a v e c o n t r i b u t e d t o - a n d h a v e also b e e n affected i n t u r n
by - c h a n g e s in t h e f o r m s of c o m p e t i t i o n a n d bases of c o m p e t i t i v e n e s s .
I h e r e are m a n y types of competitive advantage, m a n y modalities of
c o m p e t i t i o n , m a n y sites o f c o m p e t i t i o n , a n d d i f f e r e n t bases o f e a c h . "
Nonetheless, the primary discourses of competitiveness, metastrategies
to e n h a n c e competitive capacities, and strategies and tactics in competi-
tion h a v e c h a n g e d significantly s i n c e t h e h e y d a y o f A t l a n t i c F o r d i s m . A
useful distinction h e r e i s t h a t b e t w e e n static c o m p a r a t i v e a n d d y n a m i c
competitive advantages. Whilst the former refer to a superior position in
c o n t r o l o v e r s o - c a l l e d n a t u r a l ' ^ factor e n d o w m e n t s r e l a t i v e t o p o t e n t i a l
trading partners or competitors, the latter are s o m e w h a t m o r e obviously
socially c r e a t e d , c a n b e socially t r a n s f o r m e d a n d m a y well b e c o m e
objects of s t r a t e g i c i n t e r v e n t i o n . " If c o m p e t i t i v e n e s s is u n d e r s t o o d
purely in terms of comparative advantages, w h a t m a t t e r s is the overall
efficiency o f r e s o u r c e a l l o c a t i o n , e s p e c i a l l y i n p r o d u c i n g t r a d e d g o o d s
and services. T h i s a p p r o a c h i s o f t e n said t o b e m o s t r e l e v a n t t o n a t i o n s ,
r e g i o n s o r cities t h a t p r o d u c e p r i m a r y p r o d u c t s a n d s t a n d a r d i z e d
m a n u f a c t u r e d goods. But factor-based advantages are usually h a r d to
sustain - e s p e c i a l l y g i v e n t h e s t a n d a r d i z a t i o n o f m a n y t e c h n o l o g i e s a n d
capital goods (permitting their relatively quick a n d easy adoption if the
n e c e s s a r y f i n a n c e a n d skills a r e a v a i l a b l e ) , t h e i n c r e a s i n g availability ( o r
'ubiquitification') of factors favourable to competition, t h e increasing
m o b i l i t y o f i n t e r n a t i o n a l c a p i t a l (reflected i n access t o m o b i l e m o n e y
capital a s well a s p r o d u c t i v e c a p i t a l ' s s e a r c h for l o w e r p r o d u c t i o n c o s t s ) ,
a n d t h e shift o f c o m p a r a t i v e a d v a n t a g e s o v e r t h e p r o d u c t cycle ( w h i c h
p u t s i n c r e a s i n g e m p h a s i s o n p r o d u c t i o n costs a s m a r k e t s m a t u r e ) ( P o r t e r
1990; W a r r 1994). T h i s suggests t h a t l o n g e r - t e r m c o m p e t i t i v e n e s s w o u l d
be better based on developing a n d maintaining d y n a m i c competitive
a d v a n t a g e s . This h o l d s n o t o n l y for f i r m s b u t also for i n d u s t r i a l o r c e n t r a l
b u s i n e s s districts, cities, r e g i o n s , n a t i o n s a n d a n y o t h e r s p a c e s a b l e t o
create spatialized competitive advantages. The m o r e broadly the latter
are understood, the more one can talk of structural or systemic competi-
t i v e n e s s ( o n s t r u c t u r a l c o m p e t i t i v e n e s s , see C h e s n a i s 1986; o n s y s t e m i c
c o m p e t i t i v e n e s s , E s s e r e t al. 1996; M e s s n e r 1998; a n d , o n o t h e r b r o a d -
r a n g i n g b e n c h m a r k s , I M D 2 0 0 1 ; a n d P o r t e r e t al. 2 0 0 0 ) .
T h e basis o f c o m p e t i t i v e s t r a t e g i e s i s a l w a y s a n d n e c e s s a r i l y a n ' i m a g -
ined' economy. For the real e c o n o m y is so unstructured and complex in
 120 The Schumpeterian Competition State

its o p e r a t i o n t h a t i t c a n n o t b e a n o b j e c t o f m a n a g e m e n t , g o v e r n a n c e o r
guidance. Instead, economic m a n a g e m e n t , governance and guidance
a r e a l w a y s o r i e n t e d t o specific s u b s e t s o f e c o n o m i c r e l a t i o n s t h a t h a v e
b e e n discursively a n d i n s t i t u t i o n a l l y fixed as o b j e c t s of such i n t e r v e n t i o n .
T h e s e a r e a l w a y s selectively d e f i n e d a n d typically e x c l u d e e l e m e n t s t h a t
are essential to the overall p e r f o r m a n c e of the subset of e c o n o m i c (and
e x t r a - e c o n o m i c ) r e l a t i o n s t h a t h a v e b e e n identified. T h e link t o s p a t i o -
t e m p o r a l fixes s h o u l d b e o b v i o u s h e r e . F o r t h e c o n s t i t u t i o n o f a n e c o n o m y
i n v o l v e s its d i s c u r s i v e c o n s t r u c t i o n as a ' n a t u r a l ' ( c o m m o n s e n s i c a l , t a k e n
for g r a n t e d ) u n i t o f analysis, m a n a g e m e n t , r e g u l a t i o n , g o v e r n a n c e ,
c o n q u e s t o r o t h e r p r a c t i c e s , w h i c h h a s definite b o u n d a r i e s , e c o n o m i c
a n d e x t r a - e c o n o m i c c o n d i t i o n s o f e x i s t e n c e , t y p i c a l e c o n o m i c a g e n t s and
extra-economic stakeholders, a n d an overall spatio-temporal dynamic.
T h e s t r u g g l e s t o c o n s t i t u t e specific e c o n o m i e s a s subjects, sites a n d stakes
o f c o m p e t i t i o n typically i n v o l v e m a n i p u l a t i o n o f p o w e r a n d k n o w l e d g e i n
order to establish recognition of their boundaries, geometries and tem-
p o r a l i t i e s . A n d this i n t u r n i n v o l v e s t h e d e v e l o p m e n t o f n e w i n s t i t u t i o n a l
forms that h e l p to institutionalize these b o u n d a r i e s , g e o m e t r i e s a n d tem-
p o r a l i t i e s in a specific s p a t i o - t e m p o r a l fix, a n d t h e r e b y h e l p to d i s p l a c e
a n d / o r d e f e r s o m e o f t h e c o n t r a d i c t i o n s a n d c r i s i s - t e n d e n c i e s w i t h which
t h e m a n a g e m e n t of c a p i t a l as a social r e l a t i o n is i n e v i t a b l y a s s o c i a t e d .
O n c e w e c o n s i d e r t h e social c r e a t i o n o f c o m p e t i t i v e a d v a n t a g e , t h e
w o r k of List a n d S c h u m p e t e r b e c o m e s r e l e v a n t (for a brief discussion
of Ricardian, Listian, S c h u m p e t e r i a n and Keynesian understandings
of c o m p e t i t i v e n e s s , see b o x 3,1),'** S c h u m p e t e r has a key role h e r e as an
e m b l e m a t i c t h i n k e r i n s h a p i n g , d i r e c t l y o r indirectly, t h e n e w u n d e r -
standing of competitiveness a n d linking it to long waves of technologi-
cal i n n o v a t i o n a n d c a p i t a l a c c u m u l a t i o n . M o r e o v e r , a s c o m m o d i f i c a t i o n
a n d m a r k e t m e c h a n i s m s a r e e x t e n d e d t o m o r e s p h e r e s o f social activity
and structural and systemic competitiveness gain in importance, the
s c o p e for e c o n o m i c e n t r e p r e n e u r i a l i s m p r o p e r also e x p a n d s . T h e dis-
t i n c t i v e f u n c t i o n of t h e e n t r e p r e n e u r is innovation r a t h e r t h a n t e c h n i c a l
invention ( h o w e v e r original this m a y b e ) , t h e r o u t i n e management of c a p -
italist activities, or t h e b e a r i n g of risk. E n t r e p r e n e u r s h i p in its strict,
s t r o n g o r S c h u m p e t e r i a n sense, i n v o l v e s t h e d e v i s i n g a n d r e a l i z a t i o n
o f n e w w a y s o f d o i n g t h i n g s t o g e n e r a t e a b o v e a v e r a g e profits ( t h a t
is, ' r e n t s ' or, i n M a r x i s t t e r m i n o l o g y a s a p p l i e d t o p r o d u c t i o n , r e l a t i v e
s u r p l u s - v a l u e a n d superprofits) f r o m capitalist c o m p e t i t i o n . E n t r e p r e -
n e u r s h i p c a n b e e x e r c i s e d a t a n y m o m e n t i n t h e overall circuit o f c a p i t a l
and t h e articulation of these m o m e n t s . M o r e o v e r , although it is c o m m o n
to e q u a t e the entrepreneur with the individual business dynamo, t h e
function(s) of e n t r e p r e n e u r s h i p can be exercised t h r o u g h various types
o f agency. I n d e e d , its f o r m s will v a r y w i t h t h e n a t u r e o f c o m b i n a t i o n s ,
t h e f o r m s o f c o m p e t i t i o n a n d t h e objects o f e n t r e p r e n e u r i a l g o v e r n a n c e .
 The S c h u m p e t e r i a n Competition State 121

Box 3 1 Fo.'ms of comficHtivcnef.?

'.Tlic i d e a o f c o m p e t i t i v e n e s s i s c o n c e p t u a l l y a m b i g u o u s a n d p o l i t i -
c.illv C D n i r i U i - . r M . i ! . f l i c u ' a r c m , i i i > >.\.i>s In d e f i n e • n d n - e . i - . i u e i i ;
a n d c u r r e n t p o l i c y d e b a t e s i n d i c a t e tlie p o l i t i c a l issues a t s t a k e .
Picsi. p . i i n l s a u - K l a i c d I oi C v H - i | v l i i i \ i n e s s is a d i s c u r s i \ c l \ (.on-
structcd noiion with obvious strategic implications both e c o n o m i -
cally a n d politically: d i f f e r e n t n o t i o n s e n t a i l d i f f e r e n t f o r m s o f
political a c t i o n with different effects o n t h e c o m p e t i t i v e p o s i t i o n -
ing o f f i r m s , s e c t o r s , r e g i o n s a n d n a t i o n s , a s well a s o n t h e b a l a n c e
o f p o h t i c a l forces w i t h i n a n d b e y o n d t h e s t a t e .

The K'r.iuluiii .iccounl. iiJinicd .jllcr n,i\id Kie.iid>i, .Ml c;irl\

I iis:lis|i [ ) o h l i c . i l e i . o n o n i i - l . s i r e s s e - U i e i n i p o i t . i : k \ o l s i , , t i c ^ o r . i
p a r a l i v e : i d \ , ni,iiii.s .nui o r r e l a i m . piices. Ihii-- c o n | > e l i n \ > . i i e s -
d e p e n d s on exploiting the most a b u n d a n t and cheapest factors of
p r o d u c t i o n i n a g i v e n e c o n o m y (e.g., l a n d , r a w m a t e r i a l s , l a b o u r ,
c . i p U . i l . e n l e r p r i - . e , i AWC e x c l n n i s ' i i i ! ; p r o i l i i i . N . - n i b o d v i n: I I K ^ I "
l . i c l o i s l o i p i o d i i e h I r o i n O I I K I --p.ices w u l i d i l k r e i i l l . i c i o r ^ n d o w
[>i>.nis. R i c i r d i a r . c o n i p e l i l u e n e s - d c ' i c i d s o n - i . i l i c C I I I C I I I K A in
ll:e alKic.'livin o l ieMMiii.s..<- t o M n n n n i / e p i o d n c l i o n I ' o - K wiili ,i
:2i\en icclmiciil division ol l.iiiour and on the .i-sunipliiin lii.ii
c t n i c n t e c o n o m i c c o n d i i i o n - will c o n i i n u c .

I he / /.s/('.,'// . i C L o n n i is nainei.1 ;iHcr I l i e d i i c h I isi. .i ninel>.eiiLh

century C/erman political economist. Tt suggests that a national
- . l a i c C'lii d e \ e l v ) p i n l a n l i i u l i i - l i i c s c i -v.rMCC- i h . i l a r e n o l b . i s e d
on ;.huiui;iiil or c h e a p I' iclor« of piodnciiiMi piovjijeil ih-il il rejecis
free t r a d e i n f a v o u r o f p r o t e c t i o n , s t a t e s u p p o r t a n d s t a t e g u i d a n c e
ol the L i o n o n i \ ihl^ implies ihai jntcriwiiioiMl c o i i p e t i l i x c n e s s
d c j i e n d s o n j i o w l h ellii. l e i i c v i n .'.IKiciiinsi l e s o u i c c s .inioii.'. uln .'iJv
available p r o c e s s e s a n d p r o d u c t s in t e r m s of t h e l i k e l y i m p a c t of
iheir ( l e i.illoeation <!n > c o i i o i n i c gro'.Mh atul on the ,ibilii\ to
p r o t e c t infant i n d u s t r i e s from p r e m a t u r e c o m p e t i t i o n from m o r e
. i d \ a r K \ i i linns oi econoiiiie--.

T h e Schwnpeierian a c c o u n t i s n a m e d after Joseph. S c h u m p e t e r ,

a t w e n t i e t h - c e n t u r y .Austrian p o h t i c a l e c o n o m i s t . Tt s u g g e s t s
t h a t c o m p e t i t i v e n e s s d e p e n d s o,n d e v e l o p i n g t h e i n d i v i d u a l a n d
c o l l e c t i v e c a p a c i t i e s to e n g a g e in p e r m a n e n t i n n o v a t i o n - w h e t h e r
in sourcing. technologies, products, organization or marketing.
' I l i e s e ca[)acities e x t e n d b e y o n d t h e n a i i o w e c o n o m y t o i n c l u d e a
w i d e r a n g e o f c x t r a - e c t m o m i c factors. Tlius S c h u m p e t e r i a n
122 The S c h u m p e t e r i a n Competition State

c o m p e t i t i v e n e s s d e p e n d s o n d y n a m i c etficieiicy i n a l l o c a t i n g
r e s o u r c e s t o p r o m o t e i.nnovaiions that will a l t e r t h e p a c e and
direction of economic growth and enable the economy to compete
m o r e elTectively.

TTie Keynesian approiicli is less c o n c e r n e d w i t h i n t e r n a t i o n a l

c o m p e t i t i v e n e s s , as it a s s u m e s a relatively closed n a t i o n a l e c o n o m y ;
Tt d o c s imjily t h a t full e m p l o y m e n t of r e s o i u c e s ( i n c l u d i n g l a b o u r )
wiU h e l p efhciency by r e d u c i n g u n i t costs of i i r o d u c t i o n , facili-
t a t i n g e c o n o m i e s o f scale a n d r e d u c i n g t h e w e l f a r e costs o f r a a i n -
i.iinMi'j u n i l c r c n i i ) l o \ c d labour piuvei'. M o t c o v e r . il lull c a p a c i t y
utilization l e a d s t o iitilation, its effects c a n b e c o m p e n s a t e d b y
devaluation.

S c h u m p e t e r listed s e v e r a l w a y s i n w h i c h e n t r e p r e n e u r i a l i n n o v a t i o n can
occur:

(1) The introduction of a new good - that is one with which consumers are
not yet familiar - or a new quality of a good. (2) The introduction of a new
method of production, that is one not yet tested by experience in the branch
of manufacture concerned, which need by no means be founded upon a dis-
covery scientifically new, and can also exist in a new way of handling a
commodity commercially. (3) The opening of a new market, that is a market
into which the particular branch of manufacture of the country in question
has not previously entered, whether or not this market has existed before.
(4) The conquest of a new source of supply of raw materials or half-
manufactured goods, again irrespective of whether this source already
exists or whether it has first to be created. (5) The carrying out of the new
organization of any industry, like the creation of a monopoly position (for
example through trustification) or the breaking up of a monopoly position.
(Lim 1990: 215, summarizing Schumpeter 1934:129-35)

A l t h o u g h t h e p h r a s i n g o f S c h u m p e t e r ' s list o f ' n e w c o m b i n a t i o n s ' b e a r s

the i m p r i n t of c o m m e r c i a l and industrial capitalism, n o t h i n g limits it to
t h e s e f i e l d s . I t can clearly b e a p p l i e d t o i n n o v a t i o n s i n o t h e r f i e l d s , s u c h
a s n e w f o r m s o f f i n a n c e ; a n d i t also e m b r a c e s t h e specifically s p a t i a l
and/or t e m p o r a l dimensions of commercial, industrial, financial or other
f o r m s o f e c o n o m i c activity. I t i s w o r t h e m p h a s i z i n g t h e p o t e n t i a l s c o p e
of a S c h u m p e t e r i a n analysis b e c a u s e of t h e i n c r e a s e d significance of ser-
vices, t h e i n c r e a s e d i m p o r t a n c e o f s p a c e a n d t i m e i n d y n a m i c c o m p e t i -
tive advantages a n d the m o r e general redefinition of the 'economic
sphere'.
 The Schumpeterian Competition State 123

T h e r e i s a t y p i c a l e c o n o m i c d y n a m i c t o e n t r e p r e n e u r i a l activities. A s
a n i n t e g r a l e l e m e n t i n c o m p e t i t i o n , t h e y a r e i n s e p a r a b l e f r o m its a t t e n -
d a n t r i s k s a n d u n c e r t a i n t i e s . A l t h o u g h a successful i n n o v a t i o n will
initially g e n e r a t e s u r p l u s profits (or ' r e n t s ' ) , t h e s e t e n d t o d e c l i n e a n d
e v e n t u a l l y d i s a p p e a r a s t h e i n n o v a t i o n i s e i t h e r a d o p t e d (or s u p e r s e d e d )
a s ' b e s t p r a c t i c e ' b y o t h e r c o m p e t i t o r s a n d / o r a s less efficient c o m p e t i -
t o r s ( a r e f o r c e d t o ) l e a v e t h e m a r k e t . U n l e s s a n effective ( p r a c t i c a l o r
legal) m o n o p o l y p o s i t i o n c a n b e e s t a b l i s h e d , t h i s will t e n d t o r e t u r n
profits t o n o r m a l l e v e l s . ' ' M o r e o v e r , o n c e a n i n n o v a t i o n i s g e n e r a l i z e d ,
the cost o f p r o d u c t i o n a n d t h e s e a r c h for n e w m a r k e t s b e g i n t o m a t t e r ,
c h a n g i n g t h e b a l a n c e o f c o m p e t i t i v e a d v a n t a g e s w i t h i n t h e p r o d u c t cycle.
Whilst this e m p h a s i s o n c o s t s l e a d s t o t h e c o m p e t i n g a w a y o f initial
a d v a n t a g e s , i t also p r e p a r e s t h e g r o u n d for t h e n e x t w a v e o f i n n o v a t i o n
a n d e n t r e p r e n e u r s h i p - e i t h e r b y t h e initial p i o n e e r s o r p e r h a p s b y l a t e -
comers w h o can exploit their competitive position in a later stage of the
p r o d u c t cycle t o b u i l d a r e s o u r c e b a s e f o r s u b s e q u e n t i n n o v a t i o n s . T h i s
p r o b l e m i s intensified b y reflexive a c c u m u l a t i o n . F o r ' t h e c o n d i t i o n s
w h i c h a f i r m , r e g i o n o r p r o d u c t i o n s y s t e m m u s t n o w satisfy i n o r d e r t o
win a r e m a n u f a c t u r e d a n d r e m a n u f a c t u r e d m o r e t h o r o u g h l y a n d m o r e
r a p i d l y t h a n e v e r b e f o r e , c r e a t i n g a m o v i n g t a r g e t for success a n d a shift-
ing minefield of risks of failure' ( S t o r p e r 1997: 2 4 9 - 5 0 ) .

5. Building the Competition State as a Response

I n o w r e v i e w t h e p r i n c i p a l f o r m o f political r e s p o n s e t o t h e c h a l l e n g e s
and opportunities p o s e d by t h e o n g o i n g d e c o m p o s i t i o n of A t l a n t i c
Fordism and the emerging economic and extra-economic tendencies
d e s c r i b e d a b o v e . S o m e o f t h e e c o n o m i c r e s p o n s e s a t t h e level o f f i r m s
a n d c l u s t e r s h a v e a l r e a d y b e e n i n d i c a t e d i n m y stylized a c c o u n t o f t h e
d i s t i n c t i v e f e a t u r e s of p o s t - F o r d i s m as a globalizing, k n o w l e d g e - b a s e d
e c o n o m y and, insofar as t h e s e a l r e a d y existed in p i e c e m e a l f o r m in t h e
h e y d a y o f F o r d i s m , t h e y c a n also b e c o n s i d e r e d t o h a v e c o n t r i b u t e d t o
t h e crisis o f F o r d i s m a s a n a c c u m u l a t i o n r e g i m e . T h e a c t i o n s o f s o m e
states h a v e also contributed, as we shall shortly see, to these chaflenges
to the dynamic of Atlantic Fordism and the K W N S . Overall, the prin-
c i p a l political r e s p o n s e c a n b e s u m m a r i z e d briefly a s t h e a t t e m p t b y
s t a t e m a n a g e r s , officials, e c o n o m i c a n d o t h e r forces t o t r a n s f o r m t h e
K e y n e s i a n full e m p l o y m e n t s t a t e i n t o a S c h u m p e t e r i a n c o m p e t i t i o n
s t a t e , t o r e s c a l e a n d r e a r t i c u l a t e its activities, a n d t o d e v e l o p n e w f o r m s
of g o v e r n m e n t and governance to address t h e emerging problems of
s t a t e a s well a s m a r k e t failure. D e s c r i b i n g t h e r e s t r u c t u r i n g a n d s t r a -
tegic reorientation of the K W N S in these terms does not imply that the
 1 24 The Schumpeterian Competition State

v a r i o u s social forces involved i n p r o m o t i n g o r r e s i s t i n g tliis t r a n s f o r m a -

t i o n a r e all c o n s c i o u s l y c o n c e r n e d w i t h an explicit p r o j e c t to c o n s t r u c t a
c o m p e t i t i o n state. T h i s is m e r e l y a c o n v e n i e n t label to c h a r a c t e r i z e
c u r r e n t trends. I t s h o u l d also b e e m p h a s i z e d t h a t t h e r e i s n o t h i n g a u t o -
m a t i c o r m e c h a n i c a l a b o u t this t r a n s f o r m a t i o n . I n s t e a d , i t involves a
t r i a l - a n d - e r r o r s e a r c h p r o c e s s , s t r u g g l e s t o m o b i l i z e s u p p o r t b e h i n d alter-
n a t i v e a c c u m u l a t i o n s t r a t e g i e s , s t a t e p r o j e c t s a n d h e g e m o n i c visions, a
g o o d deal o f m o n i t o r i n g o f d e v e l o p m e n t s e l s e w h e r e , a n d m o r e o r less
c o o r d i n a t e d a t t e m p t s a t policy t r a n s f e r w h e r e this i s d e e m e d a p p r o p r i -
ate. In this s e n s e , it is critically m e d i a t e d t h r o u g h d i s c o u r s e s a b o u t t h e
c h a n g e d e c o n o m i c situation a n d h e n c e t h r o u g h t h e o u t c o m e o f struggles
t o define t h e n a t u r e o f t h e crisis in/of t h e K e y n e s i a n s t a t e ; and, for
t h e s a m e r e a s o n s , i t i s also crucially d e p e n d e n t o n t h e specific, p a t h -
d e p e n d e n t f o r m s o f t h e state t h a t a r e a s s o c i a t e d w i t h different a c c u m u l a -
t i o n r e g i m e s a n d t h e i r s t r a t e g i c selectivities i n r e g a r d t o political
r e p r e s e n t a t i o n , policy f o r m a t i o n a n d i n t e r v e n t i o n .
T h e t e n d e n t i a l e m e r g e n c e o f t h e S c h u m p e t e r i a n c o m p e t i t i o n state
can be s e e n on m a n y different scales - from t h e e m e r g e n c e of e n t r e -
p r e n e u r i a l localities, cities a n d r e g i o n s t h r o u g h n a t i o n a l c o m p e t i t i o n
s t a t e s t o g r o w i n g efforts i n all t h r e e t r i a d i c g r o w t h poles t o p r o m o t e their
systemic or structural competitiveness on an international, panregional
a n d / o r s u p r a n a t i o n a l basis. T h e d i s t i n c t i v e f e a t u r e o f t h e s e d i v e r s e com-
p e t i t i o n s t a t e s i s t h e i r s e l f - i m a g e a s b e i n g p r o a c t i v e i n p r o m o t i n g the
c o m p e t i t i v e n e s s of t h e i r r e s p e c t i v e e c o n o m i c s p a c e s in the face of
intensified i n t e r n a t i o n a l ( a n d also, for r e g i o n s a n d cities, inter- and infra-
regional) competition. This involves not only the economy in the narrow
s e n s e b u t t h e overall i n s t i t u t i o n a l r e d e s i g n o f t h e a c c u m u l a t i o n r e g i m e ,
its m o d e of r e g u l a t i o n a n d its i m p l i c a t i o n s for s o c i e t a l i z a t i o n . I a d d r e s s
t h e s e issues i n f i v e s t e p s t h a t m o v e f r o m self-evidently ' h a r d ' e c o n o m i c
forms t o a p p a r e n t l y ' s o f t e r ' sets o f social r e l a t i o n s t h a t n o n e t h e l e s s h a v e
m a j o r i m p l i c a t i o n s for t h e r e o r g a n i z a t i o n o f t h e e c o n o m y i n its i n t e g r a l
s e n s e . T h u s I discuss i n t u r n : t h e w a g e a n d m o n e y f o r m s ; m a n a g i n g inter-
nationalization; new forms of competition; t h e mobilization of knowl-
e d g e b o t h a s intellectual c o m m o n s a n d i n t e l l e c t u a l p r o p e r t y t o p r o m o t e
the development of the knowledge-based economy; and the subordi-
n a t i o n o f e x t r a - e c o n o m i c s y s t e m s a n d t h e l i f e w o r l d t o t h e discursively
1 c o n s t r u e d n e e d s of c o m p e t i t i v e n e s s in t h e c u r r e n t p e r i o d of capitalist
d e v e l o p m e n t . T h i s discussion c a n n o t p o s s i b l y e x h a u s t t h e full r a n g e o f
o b j e c t s o f i n t e r v e n t i o n a n d t h e i r a s s o c i a t e d e c o n o m i c , p o l i t i c a l a n d socio-
cultural measures. It is only i n t e n d e d to illustrate s o m e key features of
t h e e m e r g i n g s t a t e f u n c t i o n s a n d s o m e o f t h e i r i m p l i c a t i o n s for c h a n g e s
i n s t a t e f o r m , a n d for t h e s a m e r e a s o n i t n e g l e c t s b o t h t h e g e n e r i c e c o -
n o m i c f u n c t i o n s o f t h e capitalist t y p e o f s t a t e a n d t h e e x t e n t t o which
w
mi

The Schumpeterian Competition State 125

distinctive e c o n o m i c f u n c t i o n s o f t h e K W N S h a v e b e e n m o d i f i e d
through their integration into the changed m o d e s of operation of the
Schumpeterian competition state. Chapter 5 provides further c o m m e n t s
on t h e scalar d i m e n s i o n s of t h e s e c h a n g i n g f o r m s of i n t e r v e n t i o n .

The wage and money forms

An emphasis on the wage as an international cost of production does not
take full e m p l o y m e n t off t h e p o l i t i c a l a g e n d a - b u t t h e l a t t e r is no l o n g e r
regarded as an i m m e d i a t e objective of national state intervention. J o b
creation is n o w seen to d e p e n d heavily on the active m a n a g e m e n t of the
supply side and o n t h e e m p l o y a b i l i t y a n d f l e x i b i l i t y o f t h e l a b o u r force
n i t h e r t h a n t o f l o w q u a s i - a u t o m a t i c a l l y from effective m a n a g e m e n t o f
national demand. In certain respects, of course, small o p e n economies
a l r e a d y faced this p r o b l e m i n t h e p e r i o d o f A t l a n t i c F o r d i s m ; a n d w e c a n
find prefigurative aspects of the Schumpetarian workfare postnational
r e g i m e ( S W P R ) , s u c h a s a c t i v e l a b o u r m a r k e t policies, i n t h e i r o p e r a -
fion. But even small o p e n e c o n o m i e s have b e e n forced to adjust to
t h e c h a n g e d c o n d i t i o n s o f i n t e r n a t i o n a l c o m p e t i t i o n a n d a far w i d e r
and d e e p e r r a n g e o f factors i s n o w c o n s i d e r e d t o b e a r o n i n t e r n a t i o n a l
c o m p e t i t i v e n e s s . A n o t h e r r e s p o n s e t o t h e c h a n g e d significance o f t h e
w a g e f o r m is f o u n d in calls for i n t e r n a t i o n a l or at least E u r o p e a n
K e y n e s i a n i s m (see c h a p t e r 5). O t h e r a s p e c t s o f t h e p o s t - F o r d i s t w a g e
relation are discussed in the next chapter.
T h e r e a r e also a t t e m p t s t o d e v e l o p n e w f o r m s o f r e g u l a t i n g t h e c o n -
tradiction b e t w e e n m o n e y as national m o n e y a n d international currency.
A m o n g relevant measures pursued by national states have b e e n jumping
on the neoliberal b a n d w a g o n to float currencies, attempts to develop
regional currency systems (most notably the euro in E u r o p e and a yen-
bloc in N o r t h - E a s t A s i a ) , and the adoption of dollar pegs or a straight-
f o r w a r d d o U a r i z a t i o n o f t h e local e c o n o m y e i t h e r for f o r e i g n t r a n s a c t i o n s
o r else for all m a j o r f o r e i g n a n d d o m e s t i c t r a n s a c t i o n s . T h e r e h a v e also
been increasing a t t e m p t s to establish a new financial architecture, espe-
cially i n t h e w a k e o f t h e s o - c a l l e d A s i a n Crisis a n d s u b s e q u e n t r o u n d s
o f f i n a n c i a l crisis a n d c o n t a g i o n . T h e s e m e a s u r e s d o n o t r e s o l v e t h e c o n -
t r a d i c t i o n , b u t d i s p l a c e a n d d e f e r its effects. F o r t h e y g r e a t l y e n h a n c e t h e
manoeuvrability of the A m e r i c a n state and A m e r i c a n T N B S and M N C s
in the world market and increase the vulnerability of other economies
t o shifts i n U S policy, w h i c h w a s l o n g a g o r e o r i e n t e d f r o m t h e c o l l e c t i v e
e c o n o m i c g o o d o f t h e c a p i t a l i s t w o r l d m a r k e t t o m o r e o r less u n i l a t e r a l
p u r s u i t o f U S d o m i n a n c e . A n d , w h i l e this e n a b l e s c a p i t a l i n its a b s t r a c t -
f o r m a l m o m e n t s t o d i s e m b e d itself f r o m t h e ties o f specific p l a c e s a n d
t e m p o r a l i t i e s , i n e a c h o f its m o r e c o n c r e t e m o m e n t s c a p i t a l stifl h a s its
 126 The Schumpeterian Competition State

own particular productive and reproductive requirements. These need to

b e a d d r e s s e d , often o n n e w scales.

The relative opening of national economies

A s s t a t e s lose (or willingly a b a n d o n ) c o n t r o l o v e r t h e n a t i o n a l e c o n o m y
a s a n o b j e c t o f K e y n e s i a n e c o n o m i c m a n a g e m e n t , t h e y get i n v o l v e d i n
g u i d i n g t h e p r o c e s s o f i n t e r n a t i o n a l i z a t i o n itself a n d s e e k i n g t o d e r i v e
e c o n o m i c , political o r social a d v a n t a g e s t h e r e f r o m . T h i s h a s t h e para-
d o x i c a l effect o f f u r t h e r u n d e r m i n i n g n a t i o n a l e c o n o m i c a u t o n o m y and
vastly c o m p l i c a t i n g t h e p r o c e s s o f e c o n o m i c g o v e r n a n c e . T h i s n o t only
i n v o l v e s a d v a n c i n g t h e i n t e r e s t s o f h o m e - b a s e d m u l t i n a t i o n a l s but also
means creating conditions favourable to inward investment. In both
cases r e g a r d i s paid t o t h e overall i m p a c t o n t h e n a t i o n ' s t e c h n o l o g i c a l
a n d e c o n o m i c c o m p e t i t i v e n e s s a n d t o p o s s i b l e r e p e r c u s s i o n s o n social
cohesion. In addition, states get involved in redefining the international
framework within which such e c o n o m i c processes occur. W h a t is at stake
t o d a y i n i n t e r n a t i o n a l c o m p e t i t i o n i s t h e ability t o switch q u i c k l y a n d
easily a m o n g i n n o v a t i v e p r o d u c t s a n d p r o c e s s e s w i t h e a c h n e w p r o d u c t
offering b e t t e r f u n c t i o n a l q u a l i t i e s a n d i m p r o v e d efficiency i n p r o d u c -
t i o n ; a n a l o g o u s c h a n g e s are d i s c e r n i b l e i n r e l a t i o n t o the c u l t u r e i n d u s -
tries a n d o t h e r k n o w l e d g e - i n t e n s i v e s e c t o r s . It is in this c o n t e x t that
the transition to the post-Fordist knowledge-based techno-economic
p a r a d i g m b e g a n t o p r o m p t a r e o r i e n t a t i o n o f t h e s t a t e ' s p r i n c i p a l eco-
n o m i c functions. F o r t h e c o m b i n a t i o n o f t h e late F o r d i s t t r e n d t o w a r d s
i n t e r n a t i o n a l i z a t i o n a n d / o r g l o b a l i z a t i o n a n d t h e p o s t - F o r d i s t stress o n
flexible, i n c r e a s i n g l y k n o w l e d g e - b a s e d p r o d u c t i o n e n c o u r a g e s policy-
m a k e r s t o focus o n s u p p l y - s i d e a s p e c t s o f i n t e r n a t i o n a l c o m p e t i t i v e n e s s
a n d t o a t t e m p t t o s u b o r d i n a t e social policy t o t h e d e m a n d s o f f l e x i b i l i t y ,
enterprise and innovation in a knowledge-based economy. A m o n g many
r e l e v a n t e c o n o m i c policy o b j e c t i v e s i n this r e g a r d a r e : e s t a b l i s h i n g n e w
legal f o r m s for c r o s s - n a t i o n a l c o o p e r a t i o n a n d s t r a t e g i c alliances, re-
r e g u l a t i n g t h e i n t e r n a t i o n a l c u r r e n c y a n d c r e d i t systems, p r o m o t i n g tech-
n o l o g y transfer, m a n a g i n g t r a d e d i s p u t e s , defining a n e w i n t e r n a t i o n a l
i n t e l l e c t u a l p r o p e r t y r e g i m e , a n d d e v e l o p i n g n e w f o r m s o f r e g u l a t i o n for
l a b o u r m i g r a t i o n . T h e political e c o n o m y of scale is d i s c u s s e d in g r e a t e r
d e t a i l in c h a p t e r 5.

Innovation and entrepreneurship

T h e transition from Atlantic Fordism to post-Fordism is associated
w i t h a t e c h n o - e c o n o m i c p a r a d i g m shift t h a t i n v o l v e s n o t o n l y c h a n g e s
i n t h e l a b o u r p r o c e s s b u t also i n m o d e s o f g r o w t h , r e g u l a t i o n , a n d
 The Schumpeterian Competition State 127

societalization. T h u s t h e n e e d for i n n o v a t i o n e x t e n d s far b e y o n d i s s u e s o f

t e c h n o l o g y a n d t e c h n o l o g y t r a n s f e r t o i n c l u d e social s y s t e m s o f i n n o v a -
ti tn on different ( a n d o f t e n i n t e r c o n n e c t e d ) scales, t h e c u l t i v a t i o n a n d
p r o m o t i o n o f a n e n t e r p r i s e c u l t u r e a n d e n t e r p r i s i n g subjects, a n d a w i d e
range of organizational and institutional innovations that bear on the
changing forms of competitiveness. Regarding the question of techno-
logical i n n o v a t i o n a n d t e c h n o l o g y t r a n s f e r , s t a t e s h a v e a k e y r o l e i n
promoting innovative capacities, technical c o m p e t e n c e and technology
t r insf e r s o t h a t a s m a n y firms a n d s e c t o r s a s p o s s i b l e b e n e f i t f r o m t h e n e w
t ; h n o l o g i c a l o p p o r t u n i t i e s c r e a t e d b y R & D activities u n d e r t a k e n i n s p e -
ci tc p a r t s of t h e e c o n o m y ( A r c h i b u g i et al. 1999; C h e s n a i s 1986; D u n n i n g
2000; P e t i t a n d S o e t e 1999; S i g u r d s o n 1990). I n d e e d , e v e n i n r e l a t i v e l y
neoliberal economies, it is recognized that m a n y high-growth sectors are
so knowledge- and capital-intensive that their development d e m a n d s
extensive collaboration (especially at p r e - c o m p e t i t i v e stages) a m o n g
d i v e r s e i n t e r e s t s (firms, h i g h e r e d u c a t i o n , p u b l i c a n d p r i v a t e r e s e a r c h
l a b o r a t o r i e s , v e n t u r e c a p i t a l , p u b l i c finance, etc.). T h i s r e q u i r e m e n t i s
reinforced by the increasing spatial reach and speed of competition a n d
puts the a d v a n c e d capitalist e c o n o m i e s u n d e r p r e s s u r e t o m o v e u p t h e
technological hierarchy and specialize in t h e n e w core technologies if
they are to m a i n t a i n e m p l o y m e n t and growth. For, given the growing
competitive pressures from newly industrializing countries (NICs) on
low-cost, low-tech p r o d u c t i o n and, indeed, in simple high-tech products,
continued growth and employment in advanced economies depends on
continued m o v e m e n t up the technological hierarchy. Newly industrial-
izing e c o n o m i e s i n t u r n a r e u n d e r p r e s s u r e t o u p g r a d e a s e v e n n e w e r
N I C s e m e r g e t o c h a l l e n g e t h e m . T h i s i s reflected i n a n o v e r a l l intensifi-
c a t i o n of c o m p e t i t i v e p r e s s u r e s on a g l o b a l scale a n d , as i n d i c a t e d in
c h a p t e r 1, an i n c r e a s i n g ecological d o m i n a n c e of t h e logic of c a p i t a l a c c u -
m u l a t i o n r e l a t i v e t o o t h e r s y s t e m s a n d t h e lifeworld.
The importance of innovation and entrepreneurship in post-Fordism
i s reflected i n n e w s t a t e s t r a t e g i e s . T h e c o m p e t i t i o n s t a t e e n g a g e s i n t e c h -
nological intelligence gathering, helps to create i n d e p e n d e n t technologi-
cal c a p a c i t i e s a n d p r o m o t e s i n n o v a t i v e c a p a c i t i e s , t e c h n i c a l c o m p e t e n c e
and technology transfer so that as m a n y firms as possible benefit from
n e w technological o p p o r t u n i t i e s created b y R & D activities u n d e r t a k e n
in specific p a r t s of t h e e c o n o m y . It d e v e l o p s , first, i n s t i t u t i o n s a n d
structures that directly s u p p o r t e n t r e p r e n e u r s , existing or potential;
and, second, institutions and structures that sustain an entrepreneurial
climate. These measures include venture capital provision, subsidies,
business parks, technology transfer m e c h a n i s m s a n d technical assistance,
i n v e s t m e n t i n k n o w l e d g e p r o d u c t i o n t h r o u g h p u b l i c R & D o r locally
o r i e n t e d R & D c o n s o r t i a , i n d u s t r y service c e n t r e s , local a n d r e g i o n a l
128 The Schumpeterian Competition State

d e v e l o p m e n t f u n d s a n d p u b l i c p r o c u r e m e n t policies. A l s o r e l e v a n t a r e
policies t h a t a i m t o i n c r e a s e t h e overall s u p p l y o f e n t r e p r e n e u r s , d e v e l o p
enterprise skills/competencies in under-represented sectors (such as
e t h n i c m i n o r i t i e s o r w o m e n ) , o r p r o m o t e n e w f o r m s o f e n t e r p r i s e (such
a s c o o p e r a t i v e o r c o m m u n i t y v e n t u r e p r o g r a m m e s ) . A s well a s specific
areas o f i n t e r v e n t i o n o r g u i d a n c e t o p r o m o t e i n n o v a t i o n , t h e state gets
i n v o l v e d i n p r o m o t i n g effective s u p r a n a t i o n a l , n a t i o n a l , r e g i o n a l o r local
innovation systems.
This often involves refocusing e c o n o m i c strategies a r o u n d the
f e a t u r e s o f specific e c o n o m i c s p a c e s a n d t h e i r r o l e i n t h e s t r u g g l e t o
m a i n t a i n i n t e r n a t i o n a l c o m p e t i t i v e n e s s a n d / o r d e f e n d j o b s , g r o w t h and
w e l f a r e i n t h e face o f c o m p e t i t i v e p r e s s u r e s a t h o m e a n d a b r o a d . I n this
c o n t e x t , p o l i t i c a l f o r c e s m u s t m o b i l i z e not only i d e o l o g i c a l a n d politi-
cal a p p a r a t u s e s b u t also f o r m s o f o r g a n i z a t i o n a l i n t e l l i g e n c e a n d
m e c h a n i s m s for collective l e a r n i n g ( S t o r p e r 1997; W i l l k e 1 9 9 2 , 1 9 9 7 ) . T h e
d e v e l o p m e n t o f such m e t a c a p a c i t i e s d e p e n d s o n t h e s u p p l y o f r e l e v a n t
k n o w l e d g e a n d o r g a n i z a t i o n a l i n t e l l i g e n c e r a t h e r t h a n capital; o n
shaping the institutional context in which firms operate rather than pro-
v i d i n g s u b s i d i e s ; o n o r g a n i z i n g place-specific a d v a n t a g e s r a t h e r t h a n
a n a b s t r a c t s p a c e o f f l o w s ; a n d o n t h e ( r e - ) t e r r i t o r i a l i z a t i o n o f activities
r a t h e r t h a n t h e i r e m a n c i p a t i o n f r o m spatial a n d t e m p o r a l c o n s t r a i n t s .
I n this w a y d y n a m i c c o m p e t i t i v e a d v a n t a g e s c a n b e t a r g e t e d r a t h e r t h a n
being s t a t i c c o m p a r a t i v e a d v a n t a g e s w i t h t h e a t t e n d a n t risk of a race to
the bottom.
Finally, g i v e n t h e b u d g e t a r y a n d f i s c a l p r e s s u r e s o n s t a t e s a s n a t i o n a l
e c o n o m i e s b e c o m e m o r e o p e n , states t e n d t o shift i n d u s t r i a l s u p p o r t a w a y
f r o m vain efforts t o m a i n t a i n d e c l i n i n g s e c t o r s w i t h o u t t r a n s f o r m i n g t h e m
towards a t t e m p t s to p r o m o t e 'infant' or 'sunrise' sectors and/or restruc-
turing m a t u r e (apparently 'sunset') sectors so that they can apply n e w
p r o c e s s e s , u p g r a d e existing p r o d u c t s a n d l a u n c h n e w ones. I n all c a s e s t h e
crucial p o i n t i s t h a t state a c t i o n i s r e q u i r e d t o g u i d e t h e d e v e l o p m e n t o f
n e w c o r e t e c h n o l o g i e s a s m o t i v e a n d c a r r i e r forces^* o f e c o n o m i c e x p a n -
sion a n d t o w i d e n t h e i r a p p l i c a t i o n t o p r o m o t e c o m p e t i t i v e n e s s . T h e s e
t e c h n o l o g i e s a r e c r e a t i n g w h o l e n e w i n d u s t r i a l sectors a n d , t h r o u g h t h e i r
o w n c r o s s - f e r t i l i z a t i o n a n d / o r t h e i r i n c o r p o r a t i o n i n t o t r a d i t i o n a l sectors,
are helping to widen p r o d u c t ranges. M a s t e r i n g t h e m is critical to con-
tinued growth and structural competitiveness.

The knowledge-based economy

As t h e e c o n o m y c o m e s to be defined and naturalized as knowledge-
based a n d / o r knowledge-driven (an o n g o i n g achievement that involves
a c t i v e a n d e x t e n s i v e d i s c u r s i v e w o r k ) , states a r e i n c r e a s i n g l y i n v o l v e d i n
 The Schumpeterian Competition State 129

p r o m o t i n g tlie p r o d u c t i o n a n d diffusion of k n o w l e d g e . K n o w l e d g e is a
collectively g e n e r a t e d r e s o u r c e a n d , e v e n w h e r e specific f o r m s a n d t y p e s
o f i n t e l l e c t u a l p r o p e r t y a r e p r o d u c e d i n c a p i t a h s t c o n d i t i o n s for profit,
this d e p e n d s o n a far w i d e r i n t e l l e c t u a l c o m m o n s . T h e s t a t e h a s r o l e s
in both regards; it must p r o m o t e the commodification of knowledge
t h r o u g h its f o r m a l t r a n s f o r m a t i o n f r o m a c o l l e c t i v e r e s o u r c e ( i n t e l l e c -
t u a l c o m m o n s ) i n t o i n t e l l e c t u a l p r o p e r t y (for e x a m p l e , i n t h e f o r m o f
p a t e n t , c o p y r i g h t a n d licences) as a basis for r e v e n u e g e n e r a t i o n ; b u t it
must also p r o t e c t t h e i n t e l l e c t u a l c o m m o n s as a basis for c o m p e t i t i v e
a d v a n t a g e for t h e e c o n o m y a s a w h o l e . I t also gets i n v o l v e d i n p r o m o t -
ing the formal subsumption of knowledge production u n d e r exploitative
class r e l a t i o n s t h r o u g h t h e s e p a r a t i o n o f i n t e l l e c t u a l a n d m a n u a l l a b o u r
and the transformation of the former into wage-labour producing knowl-
e d g e for t h e m a r k e t . T h e t r a n s f o r m a t i o n o f u n i v e r s i t i e s , r e s e a r c h insti-
t u t e s , etc., t h r o u g h m a r k e t p r o x i e s a n d p r i v a t i z a t i o n i s i m p o r t a n t h e r e
( o n t h e f i r s t , see, for e x a m p l e , A o k i 1998 a n d D a w s o n 1998; o n t h e
s e c o n d , s e e Schiller 1988; 3 3 a n d S o h n - R e t h e l 1978; o n t h e t h i r d , see
K e l l y 1998; 7 7 a n d M e n z i e s 1998; 9 2 - 3 a n d p p . 1 6 6 - 8 ) .
First, s t a t e s a t a l l levels h e l p i n m a n a g i n g t h e c o n t r a d i c t i o n s r o o t e d i n
the n a t u r e of k n o w l e d g e as a fictitious commodity. For, on the o n e h a n d ,
'[t]he intellectual c o m m o n s is fundamental to the production of knowl-
e d g e ' ( D a w s o n 1998; 281); a n d , o n t h e o t h e r , i n t e l l e c t u a l p r o p e r t y i s a
key basis of accumulation in informational capitalism." This contradic-
t i o n w a s r e c o g n i z e d i n B e l l ' s e a r l y c l a i m t h a t , s i n c e free c i r c u l a t i o n o f
k n o w l e d g e offers n o i n c e n t i v e s t o f i r m s t o p r o d u c e , i t m u s t b e c r e a t e d
b y s o m e 'social u n i t , b e i t u n i v e r s i t y o r g o v e r n m e n t ' (1979; 174). W i t h
h i n d s i g h t . B e l l ' s p r o p o s a l i s c l e a r l y r o o t e d i n t h e logic o f t h e F o r d i s t
m i x e d e c o n o m y r a t h e r t h a n t h e e m e r g i n g logic o f t h e n e t w o r k e d
e c o n o m y . N o n e t h e l e s s , o n e c a n a c c e p t his b r o a d c o n c l u s i o n t h a t s t a t e s
m u s t p r o d u c e ' a socially o p t i m a l policy o f i n v e s t m e n t i n k n o w l e d g e '
(ibid.; 175). D i f f e r e n t s t a t e s are, of c o u r s e , s i t u a t e d differently in this
r e g a r d . T h e y t e n d t o polarize, f i r s t , a r o u n d i n t e r e s t s i n p r o t e c t i n g o r
e n c l o s i n g t h e c o m m o n s (for e x a m p l e , N o r t h - S o u t h ) a n d , s e c o n d , a r o u n d
the most a p p r o p r i a t e forms of intellectual property rights and regimes
o n d i f f e r e n t scales f r o m g l o b a l t o local. T h u s , s o m e s t a t e s a r e m o r e a c t i v e
t h a n others in p r o m o t i n g the primitive accumulation of intellectual p r o p -
e r t y , i n p r i v a t i z i n g p u b l i c k n o w l e d g e a n d i n c o m m o d i t i z i n g all f o r m s
of knowledge; others are more concerned to protect the intellectual
c o m m o n s , t o p r o m o t e t h e i n f o r m a t i o n s o c i e t y a n d t o d e v e l o p social
c a p i t a l . G i v e n its c o m p e t i t i v e a d v a n t a g e i n I C T p r o d u c t s a n d t h e k n o w l -
e d g e revolution, t h e A m e r i c a n state has b e e n especially i m p o r t a n t in
p r o m o t i n g the neoliberal form of the k n o w l e d g e revolution on a global
scale. T h i s i s e s p e c i a l l y c l e a r i n its r o l e i n p r o m o t i n g t h e T r a d e - R e l a t e d
1 30 The Schumpeterian Competition State

A s p e c t s o f I n t e l l e c t u a l P r o p e r t y R i g h t s ( T R I P S ) a g r e e m e n t a s a key
element in the World Trade Organization ( W T O ) and in using bi- and
multilateral trade agreements, conditionalities and other pressures to
seek t o e n f o r c e its i n t e r e s t s i n i n t e l l e c t u a l p r o p e r t y rights.
W h a t e v e r t h e i r p o s i t i o n o n s u c h issues, all states m u s t t r y t o r e s o l v e
v a r i o u s c o n t r a d i c t i o n s a n d d i l e m m a s i n k n o w l e d g e p r o d u c t i o n whilst
e s c h e w i n g a n y direct, h i e r a r c h i c a l c o n t r o l o v e r it. F o r e x a m p l e , t h e y
'must balance the n e e d to protect a n d m a i n t a i n the intellectual c o m m o n s
against t h e n e e d t o s t i m u l a t e i n v e n t i v e activity' ( D a w s o n 1998: 278).
Likewise, in t h e latter context, they need to b a l a n c e t h e p r o t e c t i o n of
i n d i v i d u a l intellectual p r o p e r t y a n d its a s s o c i a t e d r e v e n u e f l o w s against
t h e c o l l e c t i v e benefits t h a t d e r i v e f r o m t h e g e n e r a l diffusion o f its appli-
c a t i o n s 'by c r e a t i n g o p e n s y s t e m s , b y m o v i n g k e y i n t e l l e c t u a l p r o p e r t i e s
i n t o t h e p u b l i c d o m a i n , b y r e l e a s i n g s o u r c e c o d e d e m o c r a t i c a l l y ' (KeUy
1998: 2 8 ) . T h e l a t t e r task i s o f t e n p u r s u e d t h r o u g h state p r o m o t i o n o f
i n n o v a t i o n a n d diffusion s y s t e m s ( i n c l u d i n g social c a p i t a l ) , b r o a d forms
of 'technological foresight', co-involvement and/or negotiated 'guidance'
of the production of knowledge, and the d e v e l o p m e n t of suitable
m e t a g o v e r n a n c e s t r u c t u r e s ( M e s s n e r 1998; W i l l k e 1997). T h u s s t a t e s
s p o n s o r i n f o r m a t i o n i n f r a s t r u c t u r e s a n d social i n n o v a t i o n s y s t e m s o n dif-
f e r e n t scales; d e v e l o p i n t e l l e c t u a l p r o p e r t y r i g h t s r e g i m e s a n d n e w f o r m s
o f g o v e r n a n c e a n d / o r r e g u l a t i o n for activities i n c y b e r s p a c e ; p r o m o t e
m o v e m e n t away from national utility structures with universal supply
o b l i g a t i o n s suited t o a n e r a o f m a s s p r o d u c t i o n a n d m a s s c o n s u m p t i o n
t o m o r e f l e x i b l e , differential, m u l t i s c a l a r s t r u c t u r e s suited t o a p o s t -
Fordist era; and intervene to restructure research in universities to bring
i t m o r e closely i n t o a l i g n m e n t w i t h t h e p e r c e i v e d n e e d s o f b u s i n e s s a n d
to encourage the m a n a g e m e n t and exploitation of intellectual property
t h r o u g h spin-offs, licensing, p a r t n e r s h i p s , s c i e n c e p a r k s , t e c h n o l o g y p a r k s ,
i n d u s t r y p a r k s , a n d s o on.
M o r e p a r t i c u l a r l y , s o m e states a r e g e t t i n g h e a v i l y i n v o l v e d i n p r o -
m o t i n g t h e primitive accumulation of c a p i t a l (in t h e f o r m of i n t e l l e c t u a l
p r o p e r t y ) t h r o u g h p r i v a t e e x p r o p r i a t i o n o f t h e collectively p r o d u c e d
k n o w l e d g e of past generations. This enclosure of k n o w l e d g e takes
s e v e r a l f o r m s , i n c l u d i n g : (1) t h e a p p r o p r i a t i o n o f i n d i g e n o u s , t r i b a l o r
peasant 'culture' in the f o r m of u n d o c u m e n t e d , informal a n d collective
k n o w l e d g e , e x p e r t i s e a n d o t h e r i n t e l l e c t u a l r e s o u r c e s , a n d its t r a n s f o r -
mation without recompense into commodified knowledge (documented,
f o r m a l , p r i v a t e ) b y c o m m e r c i a l e n t e r p r i s e s ( C o o m b e 1998; F r o w 1996:
9 6 - 7 ) - b i o - p i r a c y i s t h e m o s t n o t o r i o u s e x a m p l e ; (2) d i v o r c i n g i n t e l -
lectual l a b o u r from the m e a n s of production - e m b o d y i n g it in smart
machines and expert systems - and thereby appropriating the knowledge
o f t h e c o l l e c t i v e l a b o u r e r ( R o b i n s a n d W e b s t e r 1987); a n d (3) g r a d u a l
 The Schumpeterian Competition State 131

e x t e n s i o n o f t h e limited n a t u r e o f c o p y r i g h t i n t o b r o a d e r f o r m s o f
p r o p e r t y r i g h t w i t h a c o n s e q u e n t e r o s i o n of a n y r e s i d u a l p u b l i c i n t e r e s t
( F r o w 1 9 9 6 : 1 0 4 ) . S t a t e s h a v e a k e y r o l e h e r e i n c h a n g i n g I P R laws a n d
protecting domestic firms' appropriation of t h e intellectual c o m m o n s
at home and abroad.
S t a t e s also p r o m o t e t h e c o m m o d i t i z a t i o n o f k n o w l e d g e a n d t h e i n t e -
gration of k n o w l e d g e and intellectual labour into production. This is
reflected in the increased emphasis on the training of k n o w l e d g e workers
a n d l i f e l o n g l e a r n i n g , i n c l u d i n g d i s t a n c e l e a r n i n g (see c h a p t e r 4), t h e
i n t r o d u c t i o n o f I C T s i n t o its o w n s p h e r e s o f a c t i v i t y a n d t h e m o r e
general prosyletization of the knowledge-based economy and informa-
tion society. I t p r o m o t e s t h e s e s t r a t e g i e s i n t h e p r i v a t e s p h e r e a n d t h i r d
sector. T h e r e i s also i n c r e a s i n g e m p h a s i s o n f l e x i b i l i t y i n m a n u f a c t u r i n g
a n d services ( i n c l u d i n g t h e p u b l i c sector) b a s e d o n n e w t e c h n o l o g i e s
(especially m i c r o e l e c t r o n i c s ) a n d m o r e f l e x i b l e f o r m s o f o r g a n i z i n g p r o -
duction. H e n c e it a t t e m p t s to introduce post-Fordist labour practices
i n t o t h e s t a t e s e c t o r itself a n d i n t o n e w p u b l i c - p r i v a t e s e c t o r p a r t n e r -
ships. N e w t e c h n o l o g i e s actively p r o m o t e d b y t h e s t a t e i n c l u d e : i n f o r -
m a t i o n and communication technologies, manufacturing technology,
nanotechnology, biotechnology, optoelectronics, genetic engineering,
m a r i n e sciences a n d technology, n e w materials a n d biopharmaceuticals.
T h e s t a t e also h e a v i l y p r o m o t e s t h e d y n a m i c s of technological rents
g e n e r a t e d by n e w k n o w l e d g e as part of a m o r e general p r o m o t i o n of
i n n o v a t i o n . T h i s s e r v e s t o intensify t h e s e l f - d e f e a t i n g c h a r a c t e r o f t h e
informational revolution from t h e v i e w p o i n t of capital, insofar as each
new round of innovation is p r o n e to ever m o r e rapid devalorization. But
i t n o n e t h e l e s s w i n s t e m p o r a r y a d v a n t a g e s a n d t e c h n o l o g i c a l r e n t s for
t h e e c o n o m i c s p a c e s i t c o n t r o l s and, insofar a s t h e r e a r e s u s t a i n a b l e
first-mover a d v a n t a g e s , it c a n c o n s o l i d a t e l o n g e r - t e r m a d v a n t a g e s for a
r e g i o n , n a t i o n o r triad. T h i s s t r a t e g y i s a n i m p o r t a n t a n d q u i t e expHcit
e l e m e n t i n t h e r e a s s e r t i o n o f U S h e g e m o n y since t h e y e a r s o f p e s s i m i s m
about the growing threat of the Japanese and East Asian economies, and
helps to explain the A m e r i c a n c o m m i t m e n t to the consolidation of a
r o b u s t I P R r e g i m e (cf. L e h m a n 1996; Schfller 1999). M o r e o v e r , if firms
i n t h e i n f o r m a t i o n e c o n o m y a r e t o m a i n t a i n a b o v e - a v e r a g e profit r a t e s
d e s p i t e t h e t e n d e n c y for t e c h n o l o g i c a l r e n t s t o b e c o m p e t e d away, less
t e c h n o l o g i c a l l y a d v a n c e d s e c t o r s m u s t s e c u r e b e l o w - a v e r a g e profits. T h i s
i s a n o t h e r d r i v i n g force b e h i n d g l o b a l i z a t i o n i n s o f a r a s less p r o f i t a b l e
f i r m s a r e f o r c e d t o r e l o c a t e o r o u t s o u r c e t o l o w e r cost p r o d u c t i o n sites,
and it reinforces the tendencies towards unequal exchange and devel-
o p m e n t a s s o c i a t e d w i t h g l o b a l i z a t i o n . S t a t e s also g e t i n v o l v e d i n o f t e n
contradictory ways in promoting and retarding the mobility of produc-
tive c a p i t a l .
 132 The Schumpeterian Competition State

The e x t r a - e c o n o m i c

T h e increased importance of structural and/or systemic competitiveness

leads t o a f u n d a m e n t a l r e d e f i n i t i o n o f t h e ' e c o n o m i c s p h e r e ' , b e c a u s e
m a n y p h e n o m e n a previously regarded as 'extra-economic' are now seen
a s directly e c o n o m i c a n d / o r e c o n o m i c a l l y r e l e v a n t . D u r i n g t h e h e y d a y
of Atlantic Fordism the p r i m a r y discourse around international com-
p e t i t i v e n e s s r e v o l v e d a r o u n d r e l a t i v e u n i t l a b o u r costs a n d t h e n e e d t o
d e v e l o p l a r g e m a r k e t s a n d e c o n o m i e s o f scale. T h i s r e f l e c t e d t h e r e l a t i v e
closure of national economies, the primacy of the wage and m o n e y forms
i n e c o n o m i c m a n a g e m e n t , a n d the r o l e o f m a s s p r o d u c t i o n i n g e n e r a t -
ing p r o d u c t i v i t y g r o w t h . M o r e r e c e n t l y , c o m p e t i t i v e n e s s i s s e e n t o
involve a far w i d e r r a n g e of p h e n o m e n a , m a n y of w h i c h w o u l d h a v e b e e n
regarded as extra-economic during the heyday of Fordism. In addition,
the d e v e l o p m e n t of global b e n c h m a r k i n g of international competitive-
ness o n a w i d e a r r a y o f e c o n o m i c a n d e x t r a - e c o n o m i c f a c t o r s serves t o
generalize neoliberal norms of competitiveness in m a n a g e m e n t , govern-
ment, the mass media and the academy.
This is p r o m p t i n g a g e n e r a l i z e d S c h u m p e t e r i a n o r i e n t a t i o n - t h a t is,
c o n c e r n w i t h i n n o v a t i o n , c o m p e t i t i v e n e s s a n d e n t r e p r e n e u r s h i p tied t o
long w a v e s o f g r o w t h a n d t h e m o r e r e c e n t p r e s s u r e s for p e r p e t u a l i n n o -
vation. States engage in the pursuit of technological rents on behalf of
capital. This leads in t u r n to the s u b o r d i n a t i o n of the totality of socio-
e c o n o m i c fields to the accumulation process so that e c o n o m i c functions
c o m e t o o c c u p y t h e d o m i n a n t p l a c e w i t h i n t h e state. O t h e r f u n c t i o n s
t h e r e b y g a i n direct e c o n o m i c significance for e c o n o m i c g r o w t h a n d c o m -
p e t i t i v e n e s s a n d this t e n d s t o p o l i t i c i z e t h o s e f o r m e r l y (or still f o r m a l l y )
e x t r a - e c o n o m i c d o m a i n s t h a t a r e n o w d i r e c t objects o f s t a t e i n t e r v e n -
tion. I n t h i s c o n t e x t , states also g e t i n v o l v e d i n m a n a g i n g t h e conflicts
b e t w e e n time horizons associated with t i m e - s p a c e distantiation and
c o m p r e s s i o n - e s p e c i a l l y i n r e g a r d t o p r o t e c t i n g t h e social capital e m b e d -
ded in communities, promoting longer-term economic orientations and
d e s i g n i n g i n s t i t u t i o n s t h a t s u s t a i n i n n o v a t i o n . B u t this e x p a n d i n g f i e l d o f
i n t e r v e n t i o n m e a n s t h a t t h e s t a t e f i n d s i t h a r d e r t o r e c o n c i l e its r e s p o n s e s
to ever m o r e insistent economic imperatives with the m o r e general
d e m a n d s o f s e c u r i n g g e n e r a l p o l i t i c a l l e g i t i m a c y a n d social c o h e s i o n
( P o u l a n t z a s 1978).

6. Discourse and Discursive Change

T h e rise o f t h e c o m p e t i t i o n state i s r e f l e c t e d in, a n d r e i n f o r c e d by,

c h a n g e s i n e c o n o m i c d i s c o u r s e , m o d e s o f calculation a n d s t r a t e g i c
 The Schumpeterian Competition State 133

concepts. Such changes are important mediations b e t w e e n the structural

changes in the global e c o n o m y a n d the transformation of the national
state. F o r discourses p r o v i d e an interpretative framework to m a k e sense
of these structural changes, the crises t h a t often a c c o m p a n y t h e m a n d
a p p r o p r i a t e r e s p o n s e s t h e r e t o . O n e m a j o r d i s c u r s i v e - s t r a t e g i c shift i n
this r e g a r d i s t h e d e m o t i o n o f ' p r o d u c t i v i t y ' a n d ' p l a n n i n g ' i n f a v o u r o f
a n e m p h a s i s o n 'flexibility' a n d ' e n t r e p r e n e u r i a l i s m ' . A n o t h e r i s t h e shift
f r o m a d i s c o u r s e a b o u t e n t i t l e m e n t s t o lifetime e m p l o y m e n t t o o n e
about obligations to e n g a g e in hfelong learning to ensure that w o r k e r s
are e m p l o y a b l e and flexible. A third major change is the e m e r g e n c e since
t h e m i d - / l a t e 1980s of t h e d i s c o u r s e of g l o b a l i z a t i o n as signifying - rightly
or w r o n g l y - a f u n d a m e n t a l shift in t h e d y n a m i c of c a p i t a l a c c u m u l a t i o n
(and, i n d e e d , t h e m o d e o f s o c i e t a l i z a t i o n ) c o m p a r e d w i t h t h e p r e v i o u s
f o r t y y e a r s . A f o u r t h shift, also i n c r e a s i n g l y i m p o r t a n t in r e c e n t y e a r s , is
t h e emphasis on knowledge-based growth in the n e w economy. This is
closely l i n k e d t o e m p h a s i s o n l e a r n i n g r e g i o n s , l i f e l o n g l e a r n i n g , a n d s o
f o r t h . A fifth shift is e v i d e n t in t h e d e m o t i o n of m o n e t a r i s m as an e c o -
nomic t h e o r y in favour of 'new g r o w t h theory', which emphasizes the
virtues of state intervention to create conditions favourable to economic
growth that had previously b e e n regarded as exogenous to the operation
of the economy (on n e w growth theory, see Cortright 2001; Nelson
a n d R o m e r 1996). Afl f i v e shifts a r e r e f l e c t e d i n c h a n g i n g d i s c o u r s e s
about competitiveness. T h e articulation of these and related discursive-
s t r a t e g i c shifts i n t o n e w a c c u m u l a t i o n s t r a t e g i e s , s t a t e p r o j e c t s a n d h e -
gemonic projects, and their capacity to mobilize support are shaping the
restructuring and reorientation of the c o n t e m p o r a r y state and helping to
p r o d u c e n e w r e g u l a t o r y r e g i m e s . A n d i t i s p r e c i s e l y t h e n e e d for s u c h
m e d i a t i o n (as well as, for e x a m p l e , v a r i a b i l i t y i n s t a t e c a p a c i t i e s ) t h a t
e n s u r e s t h a t successful c o n s o l i d a t i o n of a c o m p e t i t i o n s t a t e is far f r o m
automatic.

7. How this Corresponds to Post-Fordism

T h e g e n e r a l c o n s i s t e n c y o f t h e s e shifts a c r o s s a w i d e r a n g e o f e c o n o m i c
a n d political regimes suggests that m o r e t h a n m e r e h a p p e n s t a n c e a n d / o r
purely local e c o n o m i c a n d political conditions are involved. It indicates
t h a t t h e s e shifts a r e closely r e l a t e d a n d g r o u n d e d i n r e s p o n s e s t o t h e
crisis o f A t l a n t i c F o r d i s m a n d t h e d i s c u r s i v e l y c o n s t i t u t e d f e a t u r e s o f a n
i m a g i n e d p o s t - F o r d i s t e c o n o m y . T h e i n i t i a l ' p o s t - F o r d i s f p a r a d i g m cer-
t a i n l y h e l p e d t o c o n t e x t u a l i z e a n d s h a p e t h e r e s p o n s e s t o t h e crisis o f
t h e K W N S . B u t i t also o b s c u r e d t h e r e a l c o m p l e x i t y o f t h e c h a n g e s
g r o u p e d u n d e r the rubric of post-Fordism, as well as the p r o b l e m s faced
 134 The Schumpeterian Competition State

in finding a n y t h i n g like a c o m p r e h e n s i v e solution to t h e crisis-

t e n d e n c i e s o f t h e p r e c e d i n g a c c u m u l a t i o n r e g i m e a n d its m o d e o f
r e g u l a t i o n . T h i s i s e v i d e n t i n t h e s u c c e s s i v e a n d conflictual r e i n t e r p r e t a -
fions o f t h e g e n e r a l n a t u r e o f p o s t - F o r d i s m a n d a l t e r n a t i v e p o s t - F o r d i s t
s c e n a r i o s : f r o m f l e x i b l e specialization t h r o u g h l e a n p r o d u c t i o n t o t h e
globalizing, k n o w l e d g e - b a s e d e c o n o m y a n d , p e r h a p s , b e y o n d . T h i s i s w h y
p a r t i c u l a r a t t e n t i o n m u s t b e p a i d t o t h e full r a n g e o f g e n e r a l and specific
c h a n g e s affecting p a r t i c u l a r F o r d i s t e c o n o m i e s a n d t o t h e w a y s i n
w h i c h n e w c o n t r a d i c t i o n s a s well a s p a t h - d e p e n d e n t legacies s h a p e t h e
transition to post-Fordism.
N o n e t h e l e s s , t h e o v e r a l l effect of t h e s e c h a n g i n g f u n c t i o n s is a t r a n s -
f o r m a t i o n i n t h e e c o n o m i c r o l e o f t h e state. I n A t l a n t i c F o r d i s m , t h i s
i n v o l v e s a shift f r o m n a t i o n a l l y specific v e r s i o n s o f t h e K W N S t o r e g i o n -
ally, n a t i o n a l l y a n d s u p r a n a t i o n a l l y specific v e r s i o n s o f t h e c o m p e t i t i o n
state, e s p e c i a l l y m a S c h u m p e t e r i a n f o r m . In E a s t A s i a , it i n v o l v e s a shift
f r o m f o r m s of a Listian w o r k f a r e n a t i o n a l s t a t e ' * to o t h e r v e r s i o n s of t h e
competition state. I n d e e d , it was in part the a p p a r e n t superiority of E a s t
A s i a n e c o n o m i e s i n c a t c h i n g u p w i t h t h e W e s t a n d , especially, J a p a n ' s
record of innovation in some knowledge-based industries that p r o m p t e d
t h e r e o r i e n t a t i o n of A t l a n t i c F o r d i s t e c o n o m i e s in a similar d i r e c t i o n .
D u r i n g t h e crisis o f F o r d i s m t h e u n i t y o f t h e K W N S t e n d e d t o dis-
integrate (see chapter 2) a n d t h e r e was a transitional period w h e n a
trial-and-error search occurred to find n e w state forms and functions that
m i g h t c o n t r i b u t e t o t h e discovery a n d c o n s o l i d a t i o n o f a n e w a c c u m u l a -
tion regime and m o d e of regulation. This is by no m e a n s an automatic
p r o c e s s - especially as e m e r g i n g m o d e s of r e g u l a t i o n t h e m s e l v e s p l a y a
key role in constituting the eventual objects of regulation. T h e transi-
t i o n a l p e r i o d c a n b e p a r t i c u l a r l y c o n f u s i n g a n d d i s o r i e n t i n g , especially
w h e n i t i n v o l v e s a n a t t e m p t t o i n t r o d u c e a radical r e g i m e shift r a t h e r
t h a n e m e r g i n g f r o m a series o f m o r e i n c r e m e n t a l c h a n g e s . F o r i t i s a s s o -
ciated with a c o m p l e x array of tasks besides those that are typical of
a n y capitalist t y p e o f s t a t e a n d this s i t u a t i o n i s reflected i n a n a p p a r e n t l y
c o n t r a d i c t o r y set of p o l i t i c a l activities.
T h e s e tasks d e r i v e from its l o c a t i o n at t h e i n t e r s e c t i o n b e t w e e n a
consolidated Fordism in decline a n d a putative post-Fordism in the
a s c e n d a n t . I n this s e n s e , t h e t r a n s i t i o n a l r e g i m e i s J a n u s - f a c e d a n d m u s t
e n g a g e i n creatively d e s t r u c t i v e i n t e r v e n t i o n s . I t m u s t b o t h 'roll b a c k t h e
f r o n t i e r s ' o f F o r d i s t s t a t e i n t e r v e n t i o n a n d 'roll f o r w a r d ' t h o s e for p o s t -
F o r d i s t i n t e r v e n t i o n . T h u s , o n t h e o n e h a n d , i t will s e e k t o roll b a c k t h e
exceptional, crisis-induced state forms a n d functions associated with
F o r d i s m i n d e c l i n e a s well a s t o w e a k e n t h e n o r m a l , r o u t i n i z e d f o r m s o f
intervention linked to t h e K e y n e s i a n welfare national state as a whole.
And, on the other hand, a transitional regime must pursue exceptional
 The Schumpeterian Competition State 135

m e a s u r e s t o e s t a b l i s h t h e c o n d i t i o n s for a p o s t - F o r d i s t ' t a k e - o f f a s well

as begin to consolidate the 'normal' state forms and functions associated
w i t h p o s t - F o r d i s m . N e i t h e r t h e first n o r t h e s e c o n d set o f t a s k s i s e v e r
structurally inscribed or strategically pre-scripted. On the contrary, they
i n v o l v e c h a n c e d i s c o v e r i e s , s e a r c h p r o c e s s e s , p o l i c y t r a n s f e r s a n d social
s t r u g g l e s . T h i s i n d i c a t e s t h e n e e d for ex post a n a l y s e s of h o w p o s t - F o r d i s t
states e m e r g e r a t h e r t h a n ex ante ( a n d t h e r e f o r e t e l e o l o g i c a l ) a c c o u n t s
of the necessary transition to post-Fordism.
Since it is n o t yet evident that consolidated post-Fordist states h a v e
e m e r g e d , h o w e v e r , w e m u s t risk t e l e o l o g y T h u s I will n o w i n d i c a t e s o m e
c r i t e r i a for i d e n t i f y i n g a n i d e a l - t y p i c a l c o n s o l i d a t e d p o s t - F o r d i s t s t a t e .
This m a y s e e m to be putting t h e post-Fordist cart before the transitional
h o r s e , b u t it h a s a h e u r i s t i c v a l u e in assessing w h e t h e r crises in/of
F o r d i s m a r e b e i n g r e s o l v e d o r p e r p e t u a t e d . T i m e a l o n e will t e l l , h o w e v e r ,
w h e t h e r o r n o t I h a v e j u d g e d t h e n e x t s t e p a n d its p o s t u l a t e d s t a t e cor-
rectly. T o e s t a b l i s h w h e t h e r t h e e m e r g i n g S c h u m p e t e r i a n c o m p e t i t i o n
state is a p p r o p r i a t e to post-Fordism or not, we m u s t proceed in t h r e e
steps. T h e first i s t o d e t a i l t h e k e y f e a t u r e s o f F o r d i s m a n d its crisis-
t e n d e n c i e s . T h e s e c o n d is to identify t h e k e y f e a t u r e s of a p o s t - F o r d i s t
a c c u m u l a t i o n regime. A n d the third is to establish what structural forms
a n d s t r a t e g i c c a p a c i t i e s i n t h e s t a t e a n d political s y s t e m m i g h t c o r r e -
s p o n d t o this r e g i m e .
O n e m i g h t a r g u e t h a t i t i s still t o o s o o n t o specify this s t a t e f o r m , b u t
I suggest that s o m e initial clues can be gleaned from a p p a r e n t l y funda-
m e n t a l t e n d e n c i e s i n t h e c u r r e n t r e s t r u c t u r i n g a n d t h e i r i m p l i c a t i o n s for
s t a t e f o r m s a n d f u n c t i o n s . M o r e o v e r , s i n c e t h e s e a r g u m e n t s w e r e first
f o r m u l a t e d i n t h e e a r l y 1990s a n d e x p r e s s e d i n t e r m s o f t h e t e n d e n t i a l
rise of a S c h u m p e t e r i a n w o r k f a r e s t a t e ( J e s s o p 1992c, 1 9 9 3 , 1 9 9 4 a , b ) , a
reasonable period has passed to begin to judge whether the tendencies
that this a p p r o a c h implies are being realized or not. T h e r e are at least
t h r e e possible tests in this regard:

• showing that K W N S regimes were structurally coupled in major

respects to the growth d y n a m i c of Atlantic Fordism and that the tran-
sition t o t h e S W P R h e l p s d i r e c t l y o r i n d i r e c t l y t o r e s o l v e ( o r i s h e l d
t o d o so) t h e p r i n c i p a l c r i s i s - t e n d e n c i e s o f A t l a n t i c F o r d i s m a n d / o r
its a s s o c i a t e d K W N S r e g i m e s s o t h a t a n e w w a v e o f a c c u m u l a t i o n
b e c o m e s p o s s i b l e , b a s e d o n a n e w v i r t u o u s circle a n d a n e w s p a t i o -
t e m p o r a l fix;
• s h o w i n g t h a t t h e d i s t i n c t i v e aspects o f t h e e m e r g i n g S W P R c o r r e -
spond in key respects to the emerging growth dynamic of the new
g l o b a l e c o n o m y a n d c o n t r i b u t e significantly t o t h e o v e r a l l s h a p i n g
a n d c o n s o l i d a t i o n o f this d y n a m i c c o n s i d e r e d f r o m a n i n t e g r a l
 136 The Schumpeterian Competition State

v i e w p o i n t - tliereby e n c o u r a g i n g tiie r e n e w a l a n d r e - r e g u l a t i o n of
c a p i t a l i s m after its F o r d i s t p e r i o d ; a n d
• s h o w i n g t h a t t h e m o s t c o m p e t i t i v e e c o n o m i c spaces ( e v e n if t h e y
w e r e n o t really F o r d i s t t h e m s e l v e s b u t e x i s t e d a s n o n - F o r d i s t islands
in a s e a of F o r d i s m ) in this e m e r g i n g o r d e r a c t u a l l y p i o n e e r e d this
f o r m o f state a n d h a v e t h e r e b y g a i n e d a p a r a d i g m a t i c , e x e m p l a r y
s t a t u s for r e s t r u c t u r i n g a n d r e - r e g u l a t i n g efforts e l s e w h e r e .

A full e v a l u a t i o n o f t h e s e t e s t s m u s t w a i t u n t i l t h e t h r e e o t h e r di-
mensions of the S W P R have been considered. Nonetheless, the
S c h u m p e t e r i a n v e r s i o n o f t h e c o m p e t i t i o n s t a t e s e e m s t o satisfy t o s o m e
e x t e n t all t h r e e p o t e n t i a l criteria. I d o n o t i n t e n d t o a r g u e t h a t this t y p e
o f s t a t e a l o n e c o u l d e v e r r e s o l v e all t h e c r i s i s - t e n d e n c i e s o f F o r d i s m ,
p r e s i d e s i n g l e - h a n d e d l y o v e r t h e rise a n d c o n s o l i d a t i o n o f p o s t - F o r d i s m ,
o r t o t a l l y e x c l u d e all o t h e r s t r a t e g i c p a r a d i g m s . I n d e e d , t h e v e r y c o n c e p t
of m o d e of regulation implies that changes would also be n e e d e d in
the wage form, corporate organization, forms of competition, innovation
systems, a n d s o f o r t h , t o r e s o l v e f u n d a m e n t a l crises i n a c c u m u l a t i o n
r e g i m e s . L i k e w i s e , r e g a r d i n g t h e strategic m o m e n t o f r e s t r u c t u r i n g a n d
r e - r e g u l a t i o n , t h e r e a r e f e w limits t o t h e o p e r a t i o n o f t h e e c o n o m i c a n d
p o l i t i c a l imaginary. B u t a t t e m p t s t o r e s t r u c t u r e a n d r e o r i e n t t h e s t a t e
system do have a major role in shaping the transition from Fordism to
p o s t - F o r d i s m b o t h directly a n d t h r o u g h t h e i r r e p e r c u s s i o n s o n c h a n g e s
in other regulatory domains.
B e f o r e c o n s i d e r i n g possible g r o u n d s for d e s c r i b i n g t h e c o m p e t i t i o n
s t a t e a s p o s t - F o r d i s t , let u s r e c a p i t u l a t e r e l e v a n t c r i s i s - t e n d e n c i e s i n
Atlantic Fordism. These include the gradual (and always relative)
exhaustion of the growth potential that came from extending mass pro-
d u c t i o n i n t o n e w b r a n c h e s ; t h e r e l a t i v e s a t u r a t i o n o f m a r k e t s for m a s s
c o n s u m e r d u r a b l e s ; a d e c l i n e i n profitability; t h e d i s r u p t i o n o f t h e v i r t u -
o u s circle o f F o r d i s t a c c u m u l a t i o n t h r o u g h i n t e r n a t i o n a l i z a t i o n ; t h e
growing incoherence a n d ineffectiveness of national economic m a n -
agement as national economies become m o r e open; the stagflationary
i m p a c t o f t h e K W N S o n t h e F o r d i s t g r o w t h d y n a m i c (especially w h e r e
state economic intervention is too concerned with sustaining employ-
m e n t i n s u n s e t s e c t o r s ) ; a g r o w i n g fiscal crisis d u e t o t h e r a t c h e t - l i k e
g r o w t h o f social c o n s u m p t i o n e x p e n d i t u r e ; a n d a n e m e r g i n g crisis o f
social s e c u r i t y d u e t o t h e e x p a n s i o n o f p a r t - t i m e , t e m p o r a r y a n d d i s c o n -
t i n u o u s e m p l o y m e n t a t t h e e x p e n s e o f a full-time F o r d i s t n o r m .
A n e m e r g i n g p o s t - F o r d i s t a c c u m u l a t i o n r e g i m e c o u l d b e said t o
r e s p o n d t o s u c h c r i s i s - t e n d e n c i e s i n v a r i o u s ways. I t t r a n s f o r m s m a s s p r o -
d u c t i o n a n d t r a n s c e n d s it, s e g m e n t s o l d m a r k e t s a n d o p e n s n e w o n e s ,
offers o p p o r t u n i t i e s t o r e s t o r e t h e r a t e o f profit, i s less c o n s t r a i n e d b y
 The Schumpeterian Competition State 137

national d e m a n d conditions b u t m a k e s n e w d e m a n d s u p o n regional

and national innovation systems, replaces m a c r o e c o n o m i c planning in
a u t o c e n t r i c e c o n o m i e s w i t h s u p p l y - s i d e policies t o p r o m o t e i n n o v a t i o n ,
flexibility a n d s t r u c t u r a l c o m p e t i t i v e n e s s i n r e s p o n s e t o t h e e n o r m o u s
r a m i f i c a t i o n s o f n e w t e c h n o l o g i e s . L i k e w i s e , its c o n c e r n w i t h s t r u c t u r a l
and/or systemic competitiveness recognizes the changing terms and con-
d i t i o n s of i n t e r n a t i o n a l c o m p e t i t i o n as well as its i n c r e a s e d significance.
I t offers n e w w a y s o f r e g e n e r a t i n g o l d i n d u s t r i e s a s well a s r e p l a c i n g
t h e m , p r o m i s e s n e w w a y s o f o r g a n i z i n g social c o n s u m p t i o n t o r e d u c e
costs a n d m a k e i t m o r e f u n c t i o n a l for b u s i n e s s , a n d i s a b l e t o f u r t h e r
exploit t h e f r a g m e n t a t i o n a n d p o l a r i z a t i o n o f t h e l a b o u r f o r c e c o n s e -
q u e n t u p o n t h e crisis i n F o r d i s m . I t g o e s b e y o n d t h e m e r e r e t r e n c h m e n t
o f social w e l f a r e t o r e s t r u c t u r e a n d s u b o r d i n a t e i t t o m a r k e t forces. Its
r e s t r u c t u r i n g a n d r e o r i e n t a t i o n o f social r e p r o d u c t i o n t o w a r d s f l e x i b i l i t y
a n d r e t r e n c h m e n t signifies its a w a r e n e s s o f t h e p o s t - F o r d i s t p a r a d i g m
shift a s well a s t h e i m p a c t o f i n t e r n a t i o n a l i z a t i o n o n t h e p r i m a r y f u n c -
t i o n s o f m o n e y a n d w a g e s . I t rescales t h e s e f o r m s o f i n t e r v e n t i o n i n
e c o n o m i c a n d social r e p r o d u c t i o n t o c o r r e s p o n d t o t h e m o r e c o m p l e x
and multiscalar forms of accumulation in a globalizing e c o n o m y that a r e
reflected in the complex dialectic b e t w e e n globalization and regional-
ization. A n d it introduces n e w forms of strategic guidance and coordi-
nation that o v e r c o m e the limits of top-down state intervention in the
mixed economy. T h e S c h u m p e t e r i a n competition state could play a key
r o l e i n s e v e r a l o f t h e s e a r e a s (see b o x 3.2). T h i s a p p r o a c h m u s t also rely
l a r g e l y o n a s s e r t i o n for its p e r s u a s i v e effect u n t i l t h e effectiveness o f s p e -
cific S W P R r e g i m e s ( a n d a l t e r n a t i v e m o d e s o f s o c i a l r e g u l a t i o n o f t h e
e m e r g i n g g l o b a l o r d e r ) h a v e b e e n p r o p e r l y e x a m i n e d a n d t h e i r viability
in specific c o n j u n c t u r e s is a s s e s s e d .
An alternative approach is m o r e promising for present purposes,
h o w e v e r , since its p e r s u a s i v e f o r c e d e p e n d s o n past p e r f o r m a n c e r a t h e r
than possible post-Fordist futures. It involves demonstrating that those
e c o n o m i e s t h a t g r e w m o s t r a p i d l y d u r i n g t h e g l o b a l crisis i n / o f F o r d i s m
a n d t h a t h a v e b e c o m e m o d e l s for t h o s e i n crisis a r e e s p e c i a l l y a d v a n c e d
in developing t h e S c h u m p e t e r i a n c o m p e t i t i o n state. A m o n g t h e most
prominent examples today might be the U S A , Germany, Finland and the
T h i r d Italy, a s well a s s o m e o f t h e m o s t successful r e g i o n a l e c o n o m i e s i n
otherwise crisis-prone economies. J a p a n and first-wave E a s t Asian dragon
economies once provided other exemplars, but Japan's stagnation and the
A s i a n Crisis h a v e c a s t d o u b t o n t h e i r p r e s e n t a n d p a s t r e l e v a n c e (for a n
a l t e r n a t i v e v i e w o n E a s t Asia, see W e i s s 1998; a n d o n J a p a n , see B o y e r
a n d Y a m a d a 2 0 0 0 ) . E v e n i f i t w e r e w r o n g t o c a t e g o r i z e all t h e s e n a t i o n a l
and/or regional e c o n o m i e s as literally post-Fordist (because t h e y w e r e
never truly Fordist), their increasing role as exemplars of alternative (and
1 38 The S c h u m p e t e r i a n Competition State

Box 3 . 2 The Schumpeterian competition state and

capital accumulation

1. Changing regulatory frameworks to'facilitate labour m a r k e t

flexibihty a n d m o b i l i t y w i t h i n n a t i o n a l e c o n o m i c s p a c e .

2. Liberalization a n d dereguJatiem of foreign exchange m o v e -

m e n t s a n d r e d c s i g n o f i n t e r n a t i o n a l f i n a n c i a l a r c h i t e c t u r e with
fhe effect of i t i t e r n a t i o n a U z i n g a n d a c c e l e r a t i n g c a p i t a l flovra..

3. Modifying institutional frameworks for international t r a d e

a n d f o r e i g n direct i n v e s t m e n t .
• addressing the' multiformity of e c o n o m i c globalization by
e n g a g i n g i n t h e r i v a l r o u s a n d conflictual s t r u g g l e t o define
t h e r u l e s for h a r m o n i z i n g o r s t a n d a r d i z i n g t e c h n o l o g i c a l ,
economic, juridicopoliticaL sociocultural and cnvironmen-
• tal'issues:' • - ••• • ^»•-•
• p r o m o t i n i ; t h e sp.'ice of (low- i;i (iiis conl^.\l In o r g a n i z -
i n g c o n d i t i o n s lasoLir. hie to t h e uiicrn.itkni.'i mviiiilit,y of
tcclmoloiiies. iiidustii.il anil c o n m i c LILII Lupnal. in".oilec-
t u a l p i o p L i i \ a n d .it L a s t ^oinc t \ j i c s o i l a b o n i p o w e r .

4. P l a n n i n g a n d subsitli/inu -.p-iiial l i \ L S that s u n p o i i t h e activi-

ties of finani-ial. i n d u s t i i a l a n d c o i n i n c i c i a l caiiiial '.ulliin a n d
across boidcis. •.

,1. Promoting their own national o r regional capitalisms a n d

a p p r o p r i a t e c o n d i t i o n s k n ilicir g l o b a l s p i c a d .

6. E n g a g i n g i n c o m p l e m e n t a r y f o r m s o f Standortpolitik a n d
o t h c - t o r m s o | place b a s i d e o n i p e t i l i o n m a n a l l c n i p l t o t i \
mobile caphal within the state's own ecor.om.c -paces and to
e n h a n c e t h e m t e r u r b a n i r i e i i v . g i o n a l o r iniernaiivinal c o m -
p e t i t i v e n e s s of i t s ow n [•lai.e-hoiind^Gajiii.iK

7. Seeking to manage the lensi.m between lai the nuerests of

p o t e n t i a l l y m o b i l e c a p i i a l in l e d u c i n s its p l ; i c i . - d e p e n d e n c y
i i n d / o r f r e e i n g itself I'rom t e m p o r a l c o n s t r a i n t s a n d ( b ) t h e
s i r U i "s o w n m t e e s - . in l i x i i f j l a l l e g e d h b e n e l i c M J i c a p i t a l in
its t e r r i t o r y a n d l e n d c r i n L ' c a p i t a l ' s t e m p o i a l n o i i / o n s a n d
r h y t h m s c o m p a t i b L w i i f its o w n p o l i l i c i l l o u t m e s . l o n i p o r a l -
ities a n d c r i s i s - t e n d e n c i e s .

8. P r o m o t i n g n e w t e i i i p o i a l lioi i/on.s o f a c t i o n a n d n e w f o r m s o f
temporalflexibilit):
 The Schumpeterian Competition State 139

• c o p i n g witli the i n c r e a s e d salience of multiple time / o n e s

(in council-ice. i'iplomac\. - e c u i i l ) . elc. i:
• recalibrating and m a n a g i n g the intersection of t e m p o r -
alities (e.:;.. r^inilatiii!. c o m p u l c r p i D ^ r a i i i i n , . . i i a d i i g .
p r o m o t i n g the 2 4 - h o u r city as centre of c o n s u m p t i o n , m a n -
aging e n \ l u i i i i n e i lal i i-k 1.

'). Sociali/iim l o n g - l e i r i c i M i d i l i o i i s of prndiicli"n as s l u i r i - l e r i i

eale.il i i i o n I K cii.iies n u n c iliaiiinaiit i n i n . i i k e l i / e d e c u i M n i u ,

10. Articulating the interlinked processes of d c - and rctcrritorial-

i / a i i n i : aiitl dc and leteiiipoiali/atinii .i-sv.eiateLl w i l l i I'ew
lor Ills 111 m i e - s p a c c d i s l a n l u t i o u and tniic space (.•inipussum
in t h e hvipe >il cie.i i i i i ' a new spalio-U-nipor.d l'\ vii nan.i'.:iii>;
tin. siruciur.il c o n i i a d c l m n s i n l : e i e n l in llie capital leLiiinn.

Null-; l l i i s h s i is i i u o n p l e l e and the ai liviliLS fiarl l\ i i v ^ r l . i p . Tables

in i M l i e r c l i a H c t s wi'l iik nlilv Inilhei a L l i v i l i e s . b icI- u l I I K - e a c l i v
ilics can be linked inio d i l l e i e n t accumulalinn s i r a i C L i e s a n d - l a i e
p i o j c c i s ( s e c especialK cliapier ~ ) .

apparently successful) trajectories for Fordist regimes in crisis does m e a n

that t h e y h a v e a paradigmatic post-Fordist status.

8. Concluding Remarks

To avoid a teleological analysis of t h e c o m p e t i t i o n state as t h e function-

ally n e c e s s i t a t e d c o m p l e m e n t t o a n e m e r g e n t p o s t - F o r d i s t l a b o u r
process, accumulation regime or m o d e of regulation, the arguments pre-
s e n t e d a b o v e m u s t b e qualified b y m o r e c o n c r e t e a n d c o m p l e x a n a l y s e s
o f F o r d i s t m o d e s o f g r o w t h a s well a s b y m o r e s u b s t a n t i v e w o r k o n t h e
crisis m e c h a n i s m s o f t h e K W N S c o n s i d e r e d a s a d i s t i n c t i v e s t a t e f o r m
a n d political r e g i m e ( s e e c h a p t e r 5 ) . A m o r e d e t a i l e d analysis o f t h e c o m -
petition state would n e e d to show the structural coupling b e t w e e n each
type of Fordism and the character of the national state a n d the problems
this creates; t h e complexities of t h e capital relation in each r e g i m e t y p e
a n d its i m p l i c a t i o n s for t h e f o r m s o f e c o n o m i c a n d p o l i t i c a l s t r u g g l e o v e r
c r i s i s - r e s o l u t i o n ; t h e p a t h - d e p e n d e n c y o f t h e t r a j e c t o r y o u t o f crisis t h a t
emerges in and t h r o u g h such struggles; and, thus, the problems that arise
w h e n the state lacks the capacities to m a n a g e the transition.
 Social Reproduction and
the Workfare State

W h a t i s c o n v e n t i o n a l l y t e r m e d t h e w e l f a r e s t a t e i s far f r o m u n i v e r s a l . I t
is n o t f o u n d in all industrial societies n o r e v e n in all a d v a n c e d capitalist
societies a n d i t i s b y n o m e a n s a n i r r e v e r s i b l e e v o l u t i o n a r y a c h i e v e m e n t .
O n t h e c o n t r a r y , for s o m e y e a r s t h e r e h a v e b e e n r e m a r k a b l e c h a n g e s i n
e c o n o m i c a n d social policies, t h e i r d i s c u r s i v e f r a m i n g a n d l e g i t i m a t i o n , t h e
s p e e d a n d scale a t w h i c h policy f o r m a t i o n a n d r e f o r m o c c u r i n t h e s e
areas, the institutional mechanisms and networks through which these
p o l i c i e s a r e p u r s u e d , a n d t h e i r e c o n o m i c , political a n d social b a s e s .
T h e s e c h a n g e s a r e r e l a t e d , a s w e h a v e s e e n , t o f o u r sets o f factors: (1) t h e
reorganization of the labour process, accumulation regimes and modes of
regulation in response to the basic crisis-tendencies of Atlantic Fordism
a n d t o t h e e m e r g e n c e o f n e w p r i m a r y c o n t r a d i c t i o n s i n capitalism; (2) t h e
e m e r g i n g f i s c o - f i n a n c i a l s q u e e z e o n t h e K W N S , t h e crisis i n t h e c a t c h - a l l
party system with which it was hnked, the institutionalized c o m p r o m i s e
o n w h i c h i t w a s b a s e d a n d t h e d e v e l o p m e n t o f n e w social f o r c e s ; (3) t h e
r e - e m e r g e n c e o r r e s u r g e n c e o f l i b e r a l i s m i n t h e guise o f n e o l i b e r a l i s m a s
an alternative to corporatism and sialism as modes of economic
g o v e r n a n c e a n d s t a t e p r o j e c t s , a n d its a c t i v e p r o m o t i o n b y t h e U S A a s t h e
h e g e m o n i c s t a t e i n A t l a n t i c F o r d i s m a n d B r i t a i n a s its j u n i o r p a r t n e r ;
a n d (4) t h e rise o f n e w e c o n o m i c a n d social p r o b l e m s a n d n e w
social m o v e m e n t s t h a t c h a l l e n g e d t h e p r e v a i l i n g m o d e o f r e g u l a t i o n
a n d d e m a n d e d n e w ways of dealing with old and n e w problems. T h e
r e s p o n s e s t o t h e s e c h a l l e n g e s h a v e m a j o r i m p l i c a t i o n s for t h e p o l i t i c s o f
t h e w e l f a r e s t a t e , for its r e t r e n c h m e n t a n d r e s t r u c t u r i n g , a n d for a t t e m p t s
t o m o v e b e y o n d t h e w e l f a r e s t a t e w i t h o u t losing critical e l e c t o r a l a n d
m o r e general political s u p p o r t or u n d e r m i n i n g t h e legitimacy of t h e
national state.
 Social Reproduction and the Workfare State 141

T h i s c h a p t e r e x a m i n e s t h e r e s t r u c t u r i n g a n d strategic r e o r i e n t a t i o n
o f t h e K W N S f r o m t h e m i d - 1 9 7 0 s r e g a r d i n g t h e social r e p r o d u c t i o n o f
l a b o u r - p o w e r as a fictitious commodity. This r e q u i r e s us to consider
c h a n g e s i n t h e f o r m s a n d f u n c t i o n s o f c o l l e c t i v e c o n s u m p t i o n a s well
as in income transfers based on the contributory insurance principle,
c i t i z e n s h i p r i g h t s o r , p e r h a p s , r e s i d e n c e p r i v i l e g e s ; a n d i t also d e m a n d s
attention to the discursive and material construction of new forms and
b a s e s o f social r e p r o d u c t i o n d e e m e d a p p r o p r i a t e t o t h e t r a n s i t i o n t o , a n d
s u b s e q u e n t o p e r a t i o n of, a g l o b a l i z i n g , k n o w l e d g e - b a s e d e c o n o m y .
T h u s , a l o n g s i d e c h a n g e s i n social r e d i s t r i b u t i o n a n d i n c o m e t r a n s f e r s , I
also c o n s i d e r l a b o u r m a r k e t policy a n d t h e r e s t r u c t u r i n g o f e d u c a t i o n .
A l b e i t a t different t i m e s a n d s p e e d s a n d w i t h d i f f e r e n t d e g r e e s o f dis-
continuity, changes have occurred in these regards not only u n d e r neolib-
e r a l g o v e r n m e n t s b u t also u n d e r m o r e t r a d i t i o n a l social d e m o c r a t i c .
Christian democratic, and centre-left regimes.

1. Prelinninary Considerations

W i t h t h e d e v e l o p m e n t o f f o r m a l l y free l a b o u r m a r k e t s , m a r k e t f o r c e s
b e c a m e t h e chief m o d e o f c o o r d i n a t i o n i n r e g a r d t o all e c o n o m i c activ-
ities i n c a p i t a l i s m . B u t t h e invisible h a n d , w i t h its f o r m a l m o n e t a r y m a x -
i m a n d s , i m p e r s o n a l o p e r a t i o n ( w o r k i n g , a s M a r x p u t it, b e h i n d t h e b a c k s
of t h e p r o d u c e r s ) , p r o c e d u r a l r a t i o n a l i t y , a n d post hoc o p e r a t i o n , h a s
always been supplemented by other modes of coordination that intro-
duce m o r e substantive objectives, e l e m e n t s of interpersonal or inter-
o r g a n i z a t i o n a l d e l i b e r a t i o n , o r i e n t a t i o n to c o l l e c t i v e goals, a n d ex ante
concertation. This is w h e r e welfare regimes m a y help to secure some of
the key conditions for capital accumulation. F o r they institutionalize sub-
stantive criteria for evaluating a n d correcting m a r k e t outcomes, political
a n d b u r e a u c r a t i c p r o c e d u r e s for g u i d i n g t h e o p e r a t i o n o f m a r k e t forces
a n d a d d r e s s i n g m a r k e t failure. T h e y also h a v e a k e y r o l e i n e s t a b l i s h i n g
accumulation strategies and linking t h e m to state projects and h e g e -
m o n i c visions, a n d i n s e c u r i n g c r u c i a l p r e c o n d i t i o n s f o r t h e o p e r a t i o n o f
m a r k e t forces. In this regard, they constitute an important interface
b e t w e e n t h e e c o n o m i c a n d e x t r a - e c o n o m i c c o n d i t i o n s for c a p i t a l a c c u -
m u l a t i o n . T h i s h a s i m p l i c a t i o n s for t h e s t r u c t u r a l c o u p l i n g a n d co-
e v o l u t i o n o f t h e e c o n o m i c , political, legal, e d u c a t i o n a l , m e d i c a l a n d o t h e r
f u n c t i o n a l s y s t e m s , a s well a s for t h e r e l a t i o n s h i p b e t w e e n t h e s e s y s t e m s
a n d t h e lifeworld. In t h e latter respect, welfare regimes are heavily impli-
cated in governing t h e economic, gender, ethnic, intergenerational and
m a n y o t h e r a s p e c t s o f t h e division o f l a b o u r t h r o u g h o u t t h e social for-
m a t i o n . I n d e e d , t h e y also c o n t r i b u t e t o t h e ' l a b o u r o f division' t h r o u g h
 142 Social Reproduction and the Workfare State

t h e i r d i f f e r e n t i a l t r e a t m e n t of existing social i d e n t i t i e s a n d / o r t h e i r cre-

a t i o n o f o t h e r social i d e n t i t i e s ( M u n r o 1997). T h e y t h e r e b y c o n t r i b u t e
t o t h e classification a n d n o r m a l i z a t i o n o f i n d i v i d u a l s , g r o u p s a n d o t h e r
social forces as a basis for differential t r e a t m e n t in t h e division of l a b o u r
a n d for social i n c l u s i o n - e x c l u s i o n w i t h i n t h e c o n t e x t o f specific s p a t i o -
t e m p o r a l fixes (see also c h a p t e r s 1 a n d 2 ) .
Tlie g e n e r a l a n d w i d e s p r e a d n a t u r e o f t h e c h a n g e s i n v o l v e d i n t h e t e n -
d e n t i a l e m e r g e n c e o f t h e S W P R s u g g e s t s t h a t t h e p r i m a r y c a u s e s o f this
transition should be sought in general and widespread features of the
p o s t w a r p o l i t i c a l e c o n o m y since t h e 1970s a n d '80s. Tliey a r e u n l i k e l y t o
b e f o u n d j u s t i n factors t h a t a r e specific t o o n e o r t w o s p e c i a l cases. Tlius
it is i m p o r t a n t to define t h e e x p l a n a n d u m at a sufficiently high l e v e l of
a b s t r a c t i o n a n d s i m p l i c i t y t o establish t h e basic t e n d e n c i e s i n v o l v e d
whilst r e c o g n i z i n g t h a t t h e l a t t e r will b e o v e r d e t e r m i n e d a t m o r e c o n -
c r e t e - c o m p l e x levels o f analysis. T h i s will e n a b l e u s t o s e a r c h for a n
appropriate macro-explanation and avoid r e d u n d a n t micro-causal expla-
n a t i o n s ( G a r f i n k e l 1 9 8 1 : 55, 59; J e s s o p 1982: 2 8 2 - 9 0 ; M a n n e r s 1998).
Nonetheless, the wide variation in the timing and trajectories of transi-
tions, t h e i r d i s c o u r s e s a n d legitimacy, t h e i r social b a s e s a n d o u t c o m e s ,
also r e q u i r e s c a r e f u l a t t e n t i o n t o t h e i r p r o x i m a t e m a t e r i a l c a u s e s , t h e dis-
c u r s i v e f r a m i n g o f a n y p e r c e i v e d crisis i n a n d / o r o f t h e w e l f a r e s t a t e , links
to historically specific b a l a n c e s of forces in p a r t i c u l a r c o n j u n c t u r e s , insti-
t u t i o n a l m e d i a t i o n s a n d strategic selectivities, a n d issues o f s e q u e n c i n g .
Likewise, t h e actual o u t c o m e s of a t t e m p t s to restructure and strategi-
cally r e o r i e n t social r e p r o d u c t i o n will b e l i n k e d t o d i f f e r e n t m o d e s o f
insertion into the world m a r k e t a n d international political system. So our
macro-explanation must be compatible with m o r e micro-level analyses
t h a t e x p l a i n t h e h i s t o r i c a l specificity o f c o n t i n u i t i e s a n d d i s c o n t i n u i t i e s
i n different w e l f a r e r e g i m e s .
I h a v e a l r e a d y i n d i c a t e d p a r t o f t h e m a c r o - e x p l a n a t i o n for c h a n g e s i n
the welfare dimension of the K W N S in the preceding two chapters.
N o n e t h e l e s s , a l t h o u g h t h e crisis o f A t l a n t i c F o r d i s m d i d e x c l u d e c o n t i n -
u a t i o n o f t h e K W N S i n its old f o r m , i t d i d n o t r e q u i r e t h a t a t t e m p t s b e
m a d e t o d i s m a n t l e o r d e s t r o y t h e w e l f a r e s t a t e r a t h e r t h a n t o r e f o r m it.
Indeed, given my arguments about the necessity of extra-economic
f a c t o r s in t h e r e p r o d u c t i o n of l a b o u r - p o w e r as a fictitious c o m m o d i t y , it
is i m p r o b a b l e t h a t a g e n e r a l a n d e n d u r i n g r o l l b a c k could be c o n s o l i -
d a t e d . F a r m o r e likely a r e a t t e m p t s t o r e d e s i g n i n s t i t u t i o n s a n d / o r t o
r e o r i e n t t h e i r r o l e i n social r e p r o d u c t i o n . I n t h i s s e n s e , t h e v a r i o u s
a t t e m p t s t o effect a m a j o r n e o l i b e r a l r e g i m e shift f o u n d i n t h e U n i t e d
States, t h e U n i t e d K i n g d o m , N e w Z e a l a n d a n d , t o a lesser e x t e n t ,
Australia and Canada constitute exceptions rather than the n o r m in
welfare restructuring. Moreover, given t h e overall liberal n a t u r e of these
 Social Reproduction and the Workfare State 143

r e g i m e s b e f o r e ttie n e o l i b e r a l t u r n , e v e n t h e s e a t t e m p t s t o p r o m o t e a
n e o l i b e r a l r e g i m e shift w e r e less radical t h a n t h e s a m e a t t e m p t s w o u l d
h a v e b e e n in other welfare regimes. E v e n here, however, we should
consider the contradictions and limitations both in their o w n terms and
a s m o d e l s for o t h e r e c o n o m i c a n d p o l i t i c a l spaces.

2. Alternative Approaches to Welfare State Reform

M u c h of the existing literature on recent welfare reforms, important

t h o u g h i t is, a d d r e s s e s issues t h a t a r e t a n g e n t i a l t o t h e p r e s e n t c h a p t e r .
A first p r o b l e m for p r e s e n t p u r p o s e s i s t h a t s o m e s t u d i e s a r e t o o c o n -
c e r n e d w i t h a u s t e r i t y a n d r e t r e n c h m e n t i n r e s p o n s e t o t h e i n i t i a l crisis
in/of t h e w e l f a r e s t a t e a n d / o r focus excessively o n w h a t o f t e n p r o v e t o
b e q u i t e m a r g i n a l q u a n t i t a t i v e fisco-financial v a r i a t i o n s . W e c e r t a i n l y
k n o w far m o r e n o w a b o u t changing tax mixes (the relative contribution
of taxes on mobile and immobile economic agents as revenue sources),
revenue mixes (the changing balance of taxation a n d borrowing) and
budget mixes (the changing targets of expenditures). Unfortunately
t h e r e a r e m a n y c o m p l e x a n d i n t e r a c t i n g f a c t o r s t h a t m a y affect t h e
a b s o l u t e figures, t r e n d s a n d r a t i o s , a n d this m a k e s s i r n p l e a n a l y s e s o f
quantitative variation hard to interpret in comparative analyses. M o r e -
over, even in m o r e neoliberal welfare regimes, welfare expenditure
r e m a i n s a t h i g h levels e v e n t w o d e c a d e s after t h e first s e r i o u s a n d
i n s i s t e n t calls for r e t r e n c h m e n t (see p p . 1 5 0 - 2 ) . T h i s poses i n t e r e s t i n g
q u e s t i o n s a b o u t c o n s e r v a t i o n - d i s s o l u t i o n effects i n social c h a n g e a s
well a s a b o u t possible q u a l i t a t i v e shifts i n t h e r o l e o f t h e w e l f a r e s t a t e .
In addition, these l o n g - r u n t i m e series studies t e n d to i g n o r e the delib-
erate or providential use of short- to m e d i u m - t e r m fluctuations in spend-
ing t o p r o v i d e t h e s t a t e w i t h l e v e r a g e i n r e s t r u c t u r i n g a n d r e o r i e n t i n g
coflective c o n s u m p t i o n (for e x a m p l e , i n e d u c a t i o n , h e a l t h services a n d
housing) and/or to r e c o m p o s e the labour force a n d modify incentives
a n d a t t i t u d e s i n t h e p u b l i c sector. A m o n g o t h e r tactics, p e r i o d s o f u n d e r -
funding m a y be followed by the selective release of additional monies
conditional on compliance with n e w modes of working, new-blood posts
i n s t r a t e g i c a r e a s , n e w p e r f o r m a n c e t a r g e t s , b e n c h m a r k s , etc. L i k e w i s e ,
access t o e x t r a f u n d s m a y b e m a d e t o d e p e n d o n a d h o c c h a l l e n g e s , g e n -
e r a l i z e d c o m p e t i t i o n o r specific r e q u i r e m e n t s t h a t p u b l i c f u n d i n g b e
m a t c h e d b y t h e m o b i l i z a t i o n o f p r i v a t e funds. I n a d d i t i o n , a l o n g - t e r m
squeeze on employment and wages in the public sector may be imposed
i n t h e f a c e o f m o r e o r less r e s i s t a n c e i n o r d e r t o free r e v e n u e s for o t h e r
p u r p o s e s - albeit at the expense of motivation, m o r a l e and r e c r u i t m e n t
a t a l a t e r d a t e . C u t s i n c a p i t a l s p e n d i n g m a y likewise b e m a d e i n o r d e r
144 Social Reproduction and the Workfare State

t o s u p p o r t t h e p r e v a i h n g level o f e l e c t o r a l l y m o r e sensitive c u r r e n t
s p e n d i n g - a n effect t h a t w o u l d n o t s h o w u p i n s t u d i e s t h a t focus solely
on i n c o m e transfers or on c u r r e n t spending m o r e generally. T h e result-
ing d e t e r i o r a t i o n i n t h e q u a l i t y o f c o l l e c t i v e c o n s u m p t i o n m a y also b e
significant e n o u g h t o n e c e s s i t a t e a n d / o r l e g i t i m a t e t h e s u b s e q u e n t t r a n s -
fer of r e s p o n s i b i l i t y for its p r o v i s i o n to p u b l i c - p r i v a t e p a r t n e r s h i p s or
p r i v a t e e n t e r p r i s e . T h i s is m o s t e v i d e n t in t h e n e o l i b e r a l cases. In all
cases, t h i s s t r a t e g y could e n a b l e t h e s t a t e t o r e l e a s e f u n d s for v a r i o u s
o t h e r p u r p o s e s b e c a u s e o f its r e d u c e d c a p i t a l s p e n d i n g i n t h e s e p a r t i c u -
lar areas; t o g e n e r a t e r e v e n u e s f r o m p r i v a t i z a t i o n p r o c e e d s t h a t c o u l d b e
used to finance tax cuts and/or other state expenditures; to permit greater
f l e x i b i l i t y i n t h e o p e r a t i o n a n d p r o v i s i o n o f h i t h e r t o p u b l i c services
and/or in wages and working conditions in these sectors; to create oppor-
t u n i t i e s for small a n d m e d i u m e n t e r p r i s e s a s well a s l a r g e r s e r v i c e f i r m s
a n d / o r t o p r o m o t e t h e i n t e r n a t i o n a l i z a t i o n o f services; a n d t o p r o m o t e
c o m m u n i t y i n v o l v e m e n t a n d c i t i z e n p a r t i c i p a t i o n i n social r e p r o d u c t i o n .
Finally, r e t u r n i n g t o t h e issue o f c u r r e n t s p e n d i n g , w e s h o u l d also n o t e
t h a t t a r g e t i n g , m e a n s - t e s t i n g a n d f i s c a l c l a w - b a c k m a y h a v e significant
effects i n d e p e n d e n t l y o f w h e t h e r c u r r e n t s p e n d i n g rises, falls o r stays t h e
same.
A l l of this indicates that a c o n c e r n w i t h quantitative v a r i a t i o n and
aggregate levels of spending can distract attention from what could
p r o v e t o b e far m o r e i m p o r t a n t shifts i n t h e q u a l i t a t i v e f o r m s a n d func-
tions of social policy a n d social w e l f a r e in t h e c o n t e x t of a b r o a d e r
rearticulation a n d rescaling of the capitalist type of state and changing
forms of governance. O n e of the functions of t h e fourfold approach to
w e l f a r e r e g i m e s a d o p t e d h e r e i s precisely t o facilitate t h e analysis o f
q u a l i t a t i v e issues.
A second p r o b l e m is that m u c h of t h e literature assumes that welfare
s t a t e s i n t h e circuits o f A t l a n t i c F o r d i s m (if n o t o u t s i d e ) exist i n t h e s a m e
t i m e , i.e., h a v e t h e s a m e g e n e a l o g y , r h y t h m s , cycles, a n d s o f o r t h , a n d
h e n c e t h a t o n e c a l e n d a r y e a r o r d e c a d e h a s t h e s a m e significance for a n y
a n d all w e l f a r e states. T h i s is r e f l e c t e d in t h e n e g l e c t of f o u r i n t e r r e l a t e d
p r o b l e m s . First, ' w e l f a r e s t a t e s a r e a l w a y s o u t of d a t e ' as a r e s u l t of social
and demographic developments and the emergence of new needs and
risks. T h i s i s e s p e c i a l l y i m p o r t a n t i n t h o s e 'historical p e r i o d s w h e n t h e
v e r y m o d e s o f i n t e g r a t i o n w h i c h u n d e r p i n w e l f a r e states a r e c h a l l e n g e d '
( D a l y 1998: 130; cf. P i e r s o n 2001a o n t h e n e e d t o ' r e c a l i b r a t e ' w e l f a r e
r e g i m e s i n t h e light o f n e w risks, p r o b l e m s a n d c h a l l e n g e s ) . S e c o n d ,
e c o n o m i c , political, social a n d c u l t u r a l d e v e l o p m e n t s a r e o f t e n ' o u t o f
p h a s e ' , especially w h e n c o n s i d e r e d cross-nationally. Thus, w h e r e a s s o m e
K W N S s began to emerge in the interwar period and were consolidated
i n t h e 1950s a n d 1960s, o t h e r s f i r s t e m e r g e d i n t h e 1950s o r 1960s a n d
 Social Reproduction and the Workfare State 145

h a d n o t r e a c h e d m a t u r h y b e f o r e t h e onset o f t h e crisis in/of A t l a n t i c

Fordism. In particular, the peripheral Fordist economies of Southern
E u r o p e (Spain, Portugal, G r e e c e ) b e g a n their p o s t w a r e c o n o m i c expan-
sion l a t e r , b e g a n t o d e v e l o p a K W N S m a i n l y a f t e r t h e c o l l a p s e o f t h e i r
respective dictatorships, h a d faster e c o n o m i c growth rates than t h e E U
a v e r a g e i n t h e 1980s a n d 1990s ( a l b e i t w i t h h i g h e r u n e m p l o y m e n t r a t e s )
a n d a r e still c a t c h i n g u p w i t h t h e i r n o r t h e r n n e i g h b o u r s i n c o n s o l i d a t i n g
the welfare state at the same time as u n d e r t a k i n g neoliberal policy
adjustments. Likewise, first-wave E a s t Asian newly industrializing
e c o n o m i e s a r e n o w facing p r o b l e m s o f b u i l d i n g a w e l f a r e s t a t e t o r e p l a c e
t h e i r m o r e R i c a r d i a n a n d / o r familial w o r k f a r e r e g i m e s , e s p e c i a l l y i n
r e s p o n s e t o e c o n o m i c volatility a n d g r o w i n g i n s e c u r i t y e v e n for c o r e
w o r k e r s . T h i r d , v i e w e d o n a s m a l l e r t i m e scale a n d f r o m t h e v i e w p o i n t
o f class a n d o t h e r social struggles, w e l f a r e r e g i m e s m a y b e ' o u t o f c y c l e '
in relation to each other, thereby further complicating any comparison.
F o r , a s K a l e c k i (1943) a n t i c i p a t e d a n d s u b s e q u e n t a n a l y s t s o b s e r v e d ,
p o s t w a r e c o n o m i c e x p a n s i o n i n v o l v e d a p o l i t i c a l b u s i n e s s cycle. T h u s ,
a f t e r K e y n e s i a n - i n d u c e d full e m p l o y m e n t s t r e n g t h e n e d t h e b a r g a i n i n g
p o w e r o f o r g a n i z e d l a b o u r , e m p l o y e r s a n d t h e state w o u l d p r o v o k e a
r e c e s s i o n in o r d e r to r e d u c e w a g e p r e s s u r e s ; but, as a n a t i o n a l e l e c t i o n
n c a r e d , t h e g o v e r n m e n t w o u l d reflate t o g a r n e r v o t e s f r o m e c o n o m i c
recovery. Likewise, as Piven and Cloward (1971,1993) have shown, there
is also a p o l i t i c a l c y c l e in w e l f a r e r e g i m e s as s t a t e m a n a g e r s a n d t h e i r
allies s e e k a l t e r n a t e l y t o d a m p e n social p r o t e s t a n d t o r e s t o r e t h e i n c e n -
tive t o w o r k . A n d , f o u r t h , o w i n g t o d i f f e r e n c e s i n t h e t i m i n g a n d s e q u e n c -
i n g o f e c o n o m i c a n d social r e f o r m s , i t i s also p o s s i b l e for t i m e t o b e ' o u t
of joint'. Thus the structural coupling a n d co-evolution of welfare
regimes a n d t h e wider national and plurinational e c o n o m i c and political
s y s t e m s i n w h i c h t h e y a r e e m b e d d e d c o m e t o b e m a r k e d b y specific
patterns of unevenness and dislocation.
A t h i r d s o u r c e o f p r o b l e m s i s a n u n d e r s t a n d a b l e t e n d e n c y t o fetishize
E s p i n g - A n d e r s e n ' s typologies (or their derivatives) in work on changes
i n w e l f a r e r e g i m e s . T h u s m u c h r e c e n t r e s e a r c h h a s c o n c e r n e d issues o f
convergence or divergence within this p a t t e r n of welfare regimes. Inter-
estingly, i t i s t h e l i b e r a l r e g i m e t h a t n o w o f t e n s e r v e s a s t h e e m p i r i c a l
b e n c h m a r k a g a i n s t w h i c h t o assess c h a n g e s e v e n i f social d e m o c r a c y i s
r e t a i n e d as the n o r m a t i v e ideal. This can lead to neglect of o t h e r types
o f c h a n g e w i t h i n t h e t h r e e (four, o r f i v e ) r e g i m e s a n d , m o r e i m p o r t a n t l y ,
o f a l t e r n a t i v e p a t h s a w a y from all o f t h e s e r e g i m e s ( i n c l u d i n g t h e l i b e r a l
m o d e l ) as they existed in the golden age of A t l a n t i c Fordism. This is espe-
cially p r o b l e m a t i c , a s E s p i n g - A n d e r s e n ' s m o d e l s c a p t u r e o n l y p a r t o f t h e
s t a t e ' s r o l e i n social r e p r o d u c t i o n ( s e e c h a p t e r 2 ) a n d t h e r e b y d i v e r t
a t t e n t i o n f r o m o t h e r c h a n g e s i n c u r r e n t social r e p r o d u c t i o n .
146 Social Reproduction and the Workfare State

F o u r t h , s o m e s t u d i e s h a v e b e e n t o o c o n c e r n e d w i t h i d e n t i f y i n g and
critically assessing t h e significance of g l o b a l i z a t i o n as a p o s s i b l e cause of
c h a n g e s i n w e l f a r e r e g i m e s . Tliis w o r t h w h i l e i n t e r e s t reflects t h e discur-
sive r o l e o f ' g l o b a l i z a t i o n ' a s a n alibi for c h a n g e s b e i n g m a d e for o t h e r
r e a s o n s , r e s u l t i n g i n t h e claim t h a t i n c r e a s i n g i n t e r n a t i o n a l c o m p e t i t i o n
n e c e s s i t a t e s c u t s i n t a x e s a n d i n t h e i n d i v i d u a l a n d social w a g e a s well a s
i n o t h e r a s p e c t s o f e c o n o m i c a n d social policies. I t also r e l a t e s t o t h e
familiar claim, w h i c h c a n also s e r v e as an alibi for politicians, t h a t t h e
e l e c t o r a t e , p u b l i c o p i n i o n a n d o t h e r significant social forces a r e i n
g e n e r a l o p p o s e d t o t a x e s a n d p u b l i c s p e n d i n g - even a s p a r t i c u l a r g r o u p s
o f e l e c t o r s a n d p r e s s u r e g r o u p s d e m a n d m o r e s p e n d i n g (cf. K i t s c h e l t
1994, 1997; T a y l o r - G o o b y 1997, 2 0 0 1 a ) . A n d i t c o r r e s p o n d s t o t h e m o r e
g e n e r a l i m p a c t o f t h e g l o b a l n e o l i b e r a l project, w h i c h p r o m o t e s p r i v a t i -
z a t i o n , c o m m o d i f i c a t i o n a n d m a r k e t p r o x i e s i n t h e p u b l i c sector, a s well
a s r e d u c t i o n a n d r e d i s t r i b u t i o n o f t a x b u r d e n s . H o w e v e r , w h i l e this
r e n d e r s r e s e a r c h o n t h e social policy i m p a c t o f g l o b a l i z a t i o n intelligible,
it also e x p l a i n s w h y it is often t h e o r e t i c a l l y i l l - c o n s i d e r e d a n d t e n d s to
m u d d l e q u e s t i o n s o f c a u s a t i o n . I n p a r t i c u l a r , this r e s e a r c h fails t o n o t e
the multiscalar, multicentric, m u l t i t e m p o r a l n a t u r e of globalization (see
c h a p t e r 3), t o t a k e a c c o u n t o f t h e e x t e n t t o w h i c h s t a t e s o n different
scales ( e s p e c i a l l y c e r t a i n n a t i o n a l s t a t e s ) h a v e b e e n actively i n v o l v e d i n
p r o m o t i n g globalization and to recognize that even those states that are
' m o r e s i n n e d against t h a n s i n n i n g ' i n r e g a r d t o g l o b a l i z a t i o n still h a v e
political c h o i c e s i n r e s p o n d i n g t o g l o b a l i z a t i o n a n d its a s s o c i a t e d dis-
c o u r s e s . I t also t e n d s t o i g n o r e t h e fact t h a t g l o b a l i z a t i o n , e v e n i n its o w n
t e r m s , i s j u s t o n e v e c t o r a m o n g several t h r o u g h w h i c h t h e c o n t r a d i c t i o n s
and dilemmas inherent in the capital relation are currently being
e x p r e s s e d . I n this s e n s e , too, t h e d e b a t e a s t o w h e t h e r t h e p r e s s u r e s o n
the n a t i o n a l state are primarfly global or d o m e s t i c in origin misses the
p o i n t a b o u t t h e c h a n g i n g d y n a m i c o f c a p i t a l a c c u m u l a t i o n (see, for
example, Iversen 2001; Pierson 2001b; and Swank 2001,2002).
In a d d i t i o n , t h e i m p a c t of g l o b a l i z a t i o n o f t e n involves a o n e - s i d e d
f o c u s o n t h e h y p e r m o b i l i t y o f f i n a n c i a l c a p i t a l , t h e possibilities for t h e
cross-border relocation of productive capital, the role of the individual
a n d social w a g e as a cost of p r o d u c t i o n , a n d l a b o u r - p o w e r as o n e s u b -
s t i t u t a b l e f a c t o r o f p r o d u c t i o n a m o n g o t h e r s . Its i m p a c t i n this r e g a r d i s
c e r t a i n l y i m p o r t a n t . B u t i t c a n n o t b e p r o p e r l y u n d e r s t o o d w i t h o u t con-
sidering t h e s t a t e ' s a b i h t y t o r e o r g a n i z e state b u d g e t s a n d e x p e n d i t u r e ,
the importance of the extra-economic and place-bound conditions of
p r o d u c t i v e activities, t h e r o l e of t h e i n d i v i d u a l a n d social w a g e as a
s o u r c e of d e m a n d a n d t h e significance of l a b o u r - p o w e r as a c r e a t i v e a n d
k n o w l e d g e a b l e s o u r c e o f a d d e d v a l u e t h a t r e q u i r e s e x t r a - e c o n o m i c cul-
tivation. I n short, m a n y studies i g n o r e t h e e x t e n t t o w h i c h t h e m a n i f o l d
 Social Reproduction a n d the Workfare State 147

p r e s s u r e s of g l o b a l i z a t i o n as a m u l t i c e n t r i c , m u l t i s c a l a r , m u l t i t e m p o r a l ,
m u l t i f o r m a n d , o f c o u r s e , m u l t i c a u s a l p r o c e s s e x p r e s s t h e m s e l v e s differ-
e n t l y i n different l a b o u r p r o c e s s e s , b r a n c h e s o f p r o d u c t i o n , r e g i o n s , p a r t s
of t h e overall circuit of capital, accumulation regimes, m o d e s of regula-
tion, a n d s o f o r t h . I will e x p a n d o n t h e c o n t r a d i c t o r y i m p l i c a t i o n s o f t h e
(il)logic o f g l o b a l i z a t i o n b e l o w (see also J e s s o p 1999c) a n d e x p l a i n its
significance for t h e r e s t r u c t u r i n g , t h e r e s c a l i n g a n d t h e r e o r i e n t a t i o n o f
t h e w e l f a r e state. I will also r e f e r t o m o r e r e c e n t w o r k t h a t h a s b e g u n t o
a d d r e s s t h e s e issues i n i m p o r t a n t a n d m e t h o d o l o g i c a l l y i n n o v a t i v e ways.
Fifth, social policy h a s t o o o f t e n b e e n c o n s i d e r e d i n isolation f r o m e c o -
n o m i c policy. F o r g o o d o r ill, m a k i n g t h i s c o n n e c t i o n w a s a m a j o r c o n c e r n
of early Marxist work on the functions of the welfare state in capitalism
(for e x a m p l e , G o u g h 1979; O ' C o n n o r 1973; O f f e 1984; a n d , for a c r i t i q u e
o f t h e s e t h r e e a u t h o r s , K l e i n 1993). I t w a s also explicitly t h e m a t i z e d i n t h e
d i s c o u r s e s t h a t justified t h e d e v e l o p m e n t o f t h e K W N S a n d t h e p r o j e c t s
i n a n d t h r o u g h w h i c h this initially o c c u r r e d . E s p i n g - A n d e r s e n a l s o d e a l s
w i t h this issue o n e - s i d e d l y i n s o f a r a s h e e m p h a s i z e s t h e r o l e o f t h e w e l f a r e
s t a t e i n d e c o m m o d i f i c a t i o n w i t h o u t n o t i n g how, b y v i r t u e o f t h e c o n t r a -
d i c t o r y n a t u r e of l a b o u r - p o w e r as a fictitious c o m m o d i t y , s u c h i n t e r v e n -
tion c o u l d r e i n f o r c e a s well a s w e a k e n t h e logic o f c a p i t a l a c c u m u l a t i o n .
T h i s c o u l d well b e l i n k e d t o his e m p h a s i s o n a c l a s s - t h e o r e t i c a l a p p r o a c h
at t h e e x p e n s e of a c a p i t a l - t h e o r e t i c a l analysis. It is a l s o p a r a l l e l e d by his
n e g l e c t o f t h e c o n t r a d i c t o r y i m p l i c a t i o n s o f t h e w e l f a r e s t a t e for w o m e n ' s
dual b u r d e n in performing both paid and domestic labour, w h e r e the
extension of welfare rights, child care provision, lone p a r e n t allowances
and similar measures serves to facilitate the recommodification of
w o m e n ' s l a b o u r - p o w e r a n d t h e i r f u r t h e r i n t e g r a t i o n i n t o t h e l a b o u r force.
A m o n g a g r o w i n g b o d y o f w o r k t h a t i s r e - e x a m i n i n g t h e s e issues a r e
three important exceptions to the neglect of the mutual implications of
social a n d e c o n o m i c p o l i c y : t h e statistically s o p h i s t i c a t e d , i n s t i t u t i o n a l l y
rich s t u d y o f H u b e r a n d S t e p h e n s (2001) a n d t h e collective p r o j e c t s p r e -
s e n t e d i n H a l l a n d S o s k i c e (2001) a n d E b b i n g h a u s a n d M a n o w ( 2 0 0 1 a ) .
The last-named authors note that it is important to

consider social protection provided by social security systems, collective

bargaining practices and employment regimes. Our knowledge of modern
welfare states, and especially the sources of their current crises, remains
limited until we reconsider the economic foundation on which they stand.
Moreover, the productive function of social protection has often been
overlooked due to the focus on redistribution as the main goal of welfare
state policies. Hence, we also believe that for a better understanding of
modern capitalism we ought to take into account the important impact
of the welfare state on employment, skill acquisition, wage setting and
investment. (Ebbinghaus and Manow 2001b: 2)
 148 Social Reproduction and the Workfare State

N o n e t h e l e s s , e v e n t h e best r e c e n t w o r k o n this a n d o t h e r aspects o f

welfare r e f o r m fails t o c o n s i d e r t h e f o u r f o l d l i n k a g e s b e t w e e n c h a n g e s
i n e c o n o m i c a n d social policy, t h e r e s c a h n g o f t h e capitalist state, a n d t h e
changing forms of governance. Raising the question of these linkages
( w i t h o u t c l a i m i n g t o h a v e fully r e s o l v e d t h e m ) i s t h e m a i n a i m o f t h e
p r e s e n t w o r k . So, w h i l s t this c h a p t e r c a n a n d m u s t b e p a r a s i t i c u p o n
t h e b e s t r e c e n t w o r k for its a n a l y t i c a l i n s i g h t s a n d e m p i r i c a l d e t a i l , its
principal aim is not to repeat or critique that work but to contextualize
t h e c h a n g e s t h a t a r e identified t h e r e i n . T h u s I will give m o r e w e i g h t t o
the structural imperatives and changes in the balance of economic and
p o l i t i c a l f o r c e s a n d t h e r e s u l t i n g q u a l i t a t i v e shifts i n t h e e c o n o m i c
a n d social p r i o r i t i e s o f t h e w e l f a r e s t a t e t h a t a r e b o u n d u p w i t h t h e
t r a n s i t i o n to p o s t - F o r d i s m . It is this set of q u a l i t a t i v e shifts t h a t I seek to
capture with my concept of the S W P R .

3. The Specificity of the Welfare State in

Atlantic Fordism

W e l f a r e r e g i m e s deliver w e l f a r e t h r o u g h a c o m p l e x m i x of m e c h a n i s m s .
T h e s e i n v o l v e c h a n g i n g m i x e s o f o c c u p a t i o n a l benefits, d i r e c t s t a t e f i n a n -
cial r e d i s t r i b u t i o n , f i s c a l m e a s u r e s , s t a t e - f u n d e d a n d / o r s t a t e - p r o v i d e d
collective c o n s u m p t i o n , household redistribution, intra- and intergener-
a t i o n a l s o l i d a r i t y w i t h i n e x t e n d e d families, a n d c h a r i t a b l e activities.
A l o n g s i d e t h e social r e p r o d u c t i o n of l a b o u r - p o w e r is a r e g i m e of ' w e l f a r e
for c a p i t a l ' t h a t also i n v o l v e s a c o m p l e x m i x of m e c h a n i s m s (fiscal
w e l f a r e , d i r e c t s t a t e subsidies, i n f r a s t r u c t u r a l p r o v i s i o n , a s y m m e t r i c a l
p r i v a t e - p u b l i c p a r t n e r s h i p s , etc.) w h i c h d i r e c t s t a t e r e v e n u e s t o t h e
b e n e f i t o f p a r t i c u l a r capitals o r capital i n g e n e r a l a n d / o r f o r g o r e v e n u e
t h r o u g h t a x e x p e n d i t u r e s ( t a x reliefs) t o t h e s a m e e n d s . S u c h w e l f a r e
r e g i m e s h a v e q u i t e d i f f e r e n t d i s t r i b u t i v e c o n s e q u e n c e s i n class, g e n d e r ,
e t h n i c and spatial t e r m s according to t h e mix of private,public a n d 'third'
s e c t o r s . T h i s v e r y s a m e selectivity a l s o m a k e s t h e s t r u g g l e o v e r w e l f a r e
m i x e s a k e y issue in d e b a t e s o v e r t h e r e s t r u c t u r i n g of w e l f a r e s t a t e s . In
this c o n t e x t , ideas a b o u t social p a r t n e r s h i p , s t a k e h o l d i n g , t h e r o l e o f
i n f o r m a l n e t w o r k s a n d g o v e r n a n c e , etc., p r o v i d e s o m e i n t e r e s t i n g n e w
sites of s t r u g g l e .
T h e r e a r e t h r e e m a i n f o r m s o f w e l f a r e d e l i v e r y : (1) collectively
o r g a n i z e d social i n s u r a n c e l e a d i n g t o f i n a n c i a l e n t i t l e m e n t s i n t h e c a s e
o f c e r t a i n c o n t i n g e n c i e s , s u c h a s u n e m p l o y m e n t , sickness, p r e g n a n c y o r
r e t i r e m e n t ; (2) r e d i s t r i b u t i o n t h r o u g h t h e f i s c o - f i n a n c i a l s y s t e m , i n c l u d -
ing n o t o n l y t r a n s f e r p a y m e n t s b u t also f i s c a l w e l f a r e a n d s t a t e -
subsidized occupational welfare and state-subsidized private provision
o f g o o d s s u c h a s h o u s i n g a n d v a r i o u s o t h e r t a x reliefs; a n d (3) c o l l e c t i v e
 Social Reproduction and the Workfare State 149

c o n s u m p t i o n i n tlie s e n s e o f p u b l i c finance o f p u b l i c goods a n d services.

These different but i n t e r c o n n e c t e d forms of welfare delivery h a v e con-
t r a s t i n g i m p l i c a t i o n s for class, g e n d e r , ' r a c e ' , e t h n i c a n d r e g i o n a l ( r e ) d i s -
t r i b u t i o n a n d f o r t h e specific f o r m s i n w h i c h t h e crisis in/of t h e K W N S
m a n i f e s t s itself. T h e politics t h a t s h a p e s t h e m i x o f w e l f a r e m e c h a n i s m s
i s e q u a l l y c o m p l e x , d e p e n d i n g n o t o n l y o n e c o n o m i c f a c t o r s b u t also o n
t h e n a t u r e o f t h e s t a t e a n d its a r t i c u l a t i o n t o civil society. R e g a r d l e s s
of these complexities, however, it is useful to consider their role in
s e c u r i n g t h e c o n d i t i o n s for t h e s e l f - v a l o r i z a t i o n o f c a p i t a l a n d t h o s e f o r
r e p r o d u c i n g l a b o u r - p o w e r as a fictitious c o m m o d i t y .
T h e c o n c e p t o f collective c o n s u m p t i o n e m e r g e d d u r i n g t h e 1950s a n d
1960s' a s t h e K W N S w a s g r a d u a l l y c o n s o l i d a t e d i n t h e e c o n o m i c s p a c e
d o m i n a t e d by A t l a n t i c Fordism. It had b o t h a general and a particular
significance. O n t h e o n e h a n d , i t h i g h l i g h t e d t h e g r o w i n g i m p o r t a n c e o f
state expenditure in lubricating and integrating the circuit of capital
( t h e r e b y r e v e a l i n g t h e l i m i t a t i o n s o f t h e i d e a o f final h o u s e h o l d c o n -
s u m p t i o n ) ; a n d , o n t h e o t h e r h a n d , i t identified t h e p a r t i c u l a r f o r m s a n d
f u n c t i o n s o f this e x p e n d i t u r e i n A t l a n t i c F o r d i s m . I n t h e l a t t e r c o n t e x t i t
signified a m a j o r f o r m of s o c i a l i z a t i o n of c o n s u m p t i o n t h a t d e v e l o p e d in
t a n d e m with the socialization of production in Atlantic Fordism. Thus,
just as liberal m a r k e t s and oligopolistic c o m p e t i t i o n w e r e displaced in
f a v o u r o f t h e m i x e d e c o n o m y a n d i n d i c a t i v e p l a n n i n g b a s e d o n bi- o r t r i -
p a r t i t e n e g o t i a t i o n , l i b e r a l m a r k e t forces a n d p r i v a t e h o u s e h o l d s (or, a t
b e s t , p r i v a t e , e n t e r p r i s e - l e v e l p a t e r n a l i s m a n d civic p h i l a n t h r o p y ) c a m e
to play a smaller role in the r e p r o d u c t i o n of labour-power as the state
b e c a m e increasingly involved in the socialization of r e p r o d u c t i o n a n d
c o n s u m p t i o n . N a t i o n a l a n d / o r local s t a t e i n v o l v e m e n t i n c r e a s e d , w i t h a n
emphasis on comprehensive, universal or near-universal redistributive
m e a s u r e s t h a t socialized i n d i v i d u a l r i s k s o v e r t h e life-course i n w h a t h a d
b e c o m e a m a s s , w a g e - e a r n i n g society. T h i s w a s c o m b i n e d w i t h t h e p r o -
vision o f collectively f i n a n c e d a n d p r o v i d e d c o n s u m p t i o n i n f i e l d s s u c h
a s h o u s i n g , e d u c a t i o n , h e a l t h a n d , l a t e r , p e r s o n a l social services.
T h e c o l l e c t i v e n a t u r e o f c o n s u m p t i o n w a s r o o t e d i n a specific a r t i c u l a -
t i o n o f t h r e e discursively a s well a s m a t e r i a l l y c o n s t i t u t e d divisions w i t h i n
c o n t e m p o r a r y capitalism: (1) ' p r i v a t e - p u b l i c ' ; (2) ' m a r k e t ' a n d ' s t a t e ' ; a n d
(3) ' n a t i o n a l ' s p a c e a n d its e x t e r n a l e n v i r o n m e n t . W h a t m a d e c o n s u m p -
t i o n ' c o l l e c t i v e ' w a s its p u b l i c o r g a n i z a t i o n by a d i s t i n c t i v e f o r m of
n a t i o n a l s t a t e i n a n e c o n o m i c s p a c e discursively c o n s t r u e d a n d m a t e r i a l l y
instituted to coincide broadly with that state's territorial boundaries.
M o r e r e c e n t l y , h o w e v e r , w e h a v e seen: (1) t h e r e d i s c o v e r y a n d a c t i v e
p r o m o t i o n o f a t h i r d s e c t o r i n t e r m e d i a t e b e t w e e n p r i v a t e a n d p u b l i c ; (2)
the growing recognition of the role of n e t w o r k s and self-organization as
a n a l t e r n a t i v e m o d e o f g o v e r n a n c e allegedly c a p a b l e o f c o m p e n s a t i n g for
s t a t e as well as m a r k e t f a i l u r e ; a n d (3) c o m p l e x p r o c e s s e s of d e - a n d
 150 Social Reproduction and the Workfare State

r e t e r r i t o r i a l i z a t i o n of e c o n o m i c a n d social spaces a n d a dialectic of

g l o b a l i z a t i o n - r e g i o n a l i z a t i o n . T h i s has m a d e i t h a r d t o c o n t i n u e collec-
tive c o n s u m p t i o n i n its K W N S f o r m - a s i t u a t i o n w o r s e n e d b y n e o l i b e r a l
p r e s s u r e s t o p r i v a t i z e s t a t e a c t i v i t i e s a s far a s p o s s i b l e .
In i m p o r t a n t respects the K W N S in Atlantic Fordism had already
' g r o w n t o l i m i t s ' ( F l o r a 1 9 8 6 - 7 ) b y t h e e a r l y 1980s. A l t h o u g h t h e t r a n s i -
t i o n f r o m a social i n s u r a n c e or social s e c u r i t y s t a t e (Sozialstaat) to m o r e
c o m p r e h e n s i v e welfare regimes h a d b e g u n in the interwar period, it was
during t h e years of postwar e c o n o m i c expansion that welfare states
r e a c h e d m a t u r i t y ( s e e c h a p t e r 2). A s n o t e d a b o v e , o f c o u r s e , s o m e l a t e
d e v e l o p i n g w e l f a r e s t a t e s still h a d r o o m for g r o w t h . B u t i t i s g e n e r a l l y
true that the K W N S was comprehensive, being based primarily on past,
present or future participation in the labour m a r k e t a n d / o r on national
citizenship (hence tending to marginalize immigrant or non-national
l a b o u r a n d t r e a t i n g t h e m a s s e c o n d - c l a s s citizens, i f a t all). L i k e w i s e , t h e
K W N S d i d g e n e r a l l y c o v e r m o s t fields o f e v e r y d a y , l i f e t i m e a n d i n t e r -
g e n e r a t i o n a l social r e p r o d u c t i o n , offered u n i v e r s a l o r n e a r - u n i v e r s a l
p r o v i s i o n w i t h h i g h i n c o m e r e p l a c e m e n t r a t e s for t h e i n s u r e d a n d , for
citizens in its i n c o m e t r a n s f e r p r o g r a m m e s , p r o v i d e d for a u n i v e r s a l
n a t i o n a l e d u c a t i o n s y s t e m a n d a m o r e o r less e x t e n s i v e s o c i a l i z a t i o n o f
basic m e d i c a l c a r e . F u r t h e r m o r e , i t w a s g e n e r a l l y s u s t a i n e d b y h i g h levels
of taxation c o m p a r e d to t h e era of t h e liberal state.
H o w e v e r , while t h e r e were economic and political limits to further
e x p a n s i o n of this t y p e of w e l f a r e s t a t e in a capitalist society, e s p e c i a l l y as
a n i n s t r u m e n t o f e c o n o m i c a n d social r e d i s t r i b u t i o n , t h e r e a r e also t h r e e
v e r y i m p o r t a n t limits t o w e l f a r e r e t r e n c h m e n t . First, s o m e f o r m o f e x t r a -
e c o n o m i c r e p r o d u c t i o n of l a b o u r - p o w e r as a fictitious c o m m o d i t y b o t h
individually and in t h e aggregate is essential to capital a c c u m u l a t i o n (see
c h a p t e r 1). M o r e o v e r , w h e t h e r o r n o t t h e capitalist t y p e o f s t a t e i s d i r e c t l y
i n v o l v e d in its d e l i v e r y in t h e first i n s t a n c e , it is n o n e t h e l e s s e x p e c t e d to
s e r v e a s t h e social r e p r o d u c e r o f l a b o u r - p o w e r i n t h e last resort.^ T h u s ,
while t h e respective responsibilities a n d boundaries of market, state a n d
civil society m a y shift, t h e r e i s still a n i m p o r t a n t s t e e r i n g r o l e for t h e s t a t e .
A n i n t e r e s t i n g r e c e n t e x a m p l e o f this i s f o u n d i n t h e c o m p e t i t i o n b e t w e e n
n a t i o n a l s t a t e s t o r e c r u i t skilled w o r k e r s f r o m a b r o a d t o s u p p o r t t h e i r
k n o w l e d g e - b a s e d accumulation strategies - just as they h a d earlier sought
to recruit unskilled workers from a b r o a d to u n d e r t a k e work that was too
p h y s i c a l l y d e m a n d i n g , dirty, o p p r e s s i v e i n its w o r k i n g c o n d i t i o n s , ill-paid,
u n s o c i a l i n its h o u r s , o r o t h e r w i s e e c o n o m i c a l l y o r socially u n a c c e p t a b l e
for t h e i r o w n citizens d u r i n g t h e F o r d i s t b o o m . S e c o n d , t h e r e a r e i m p o r -
t a n t i n s t i t u t i o n a l limits t o w e l f a r e r e t r e n c h m e n t t h r o u g h t h e effects o f
policy i n h e r i t a n c e , p r o g r a m m e i n e r t i a a n d t h e o v e r a l l a r c h i t e c t u r e o f t h e
state. T h e s e limits a r e r e i n f o r c e d b y t h e p o t e n t i a l l y d i s r u p t i v e c o n s e -
 Social Reproduction and the Workfare State 151

q u e n c e s o f r a p i d a n d drastic c u t s i n w e l f a r e o n t h e w i d e r e c o n o m y t h a t
w o u l d arise f r o m t h e s t r u c t u r a l c o u p l i n g a n d m a t e r i a l i n t e r d e p e n d e n c e o f
welfare s t a t e s a n d m a r k e t e c o n o m i e s . F o r t h e past d e v e l o p m e n t o f t h e
w e l f a r e state p r o d u c e s a specific s t r u c t u r e of e c o n o m i c o r g a n i z a t i o n
reflecting its differential i m p a c t o n o p p o r t u n i t i e s for profit. N e o l i b e r a l
d i s c o u r s e e m p h a s i z e s t h e a l l e g e d l y h a r m f u l ' c r o w d i n g o u t ' effects o f
p u b l i c s p e n d i n g , h o w e v e r i t i s f i n a n c e d , a s well a s t h e u n p r o d u c t i v e n a t u r e
of taxation and state borrowing. But sustained and consistent public
s p e n d i n g also i n d u c e s s t r u c t u r a l c h a n g e s i n s u p p l y a n d d e m a n d (e.g.,
s o c i a l - i n d u s t r i a l c o m p l e x e s l i n k e d to specific p a t t e r n s of p u b l i c s e c t o r
welfare s p e n d i n g on capital projects, c o n s u m a b l e s a n d services) t h a t
w o u l d b e m o r e o r less s e v e r e l y d i s r u p t e d i f r a d i c a l c u t s w e r e m a d e a n d
t h e f i r m s o r s e c t o r s affected c o u l d n o t r e t o o l , r e s t r u c t u r e o r r e d i r e c t t h e
resulting p r o d u c t i o n in an acceptable t i m e horizon.
Third, t h e r e a r e t h e political hmits to welfare r e t r e n c h m e n t that a r e
r o o t e d i n t h e politics o f r e p r e s e n t a t i o n ( e s p e c i a l l y e l e c t o r a l d y n a m i c s
a n d t h e m o b i l i z a t i o n o f social m o v e m e n t s ) , t h e i n t e r n a l o r g a n i z a t i o n
of t h e state a p p a r a t u s (vested d e p a r t m e n t a l and ministerial interests,
t h e m u l t i - t i e r e d n a t u r e o f w e l f a r e delivery, t h e p r e s e n c e o f t h e w e l f a r e
professions, t h e rights of state employees, etc), a n d the pohtics of
i n t e r v e n t i o n ( l e g a l l y e n t r e n c h e d c i t i z e n s h i p rights, social p a r t n e r s h i p
d y n a m i c s , t h e r e s i d u a l p o w e r o f ' p o l i c y - t a k e r s ' , e t c . ) . T h i s will i n e v i t a b l y
be reflected in t h e b a l a n c e of forces at a n y p a r t i c u l a r m o m e n t in a c h a n g -
i n g c o n j u n c t u r e a n d i n d i c a t e s t h e n e e d for m e d i u m - t e r m strategies t o
t r a n s f o r m t h e s t r u c t u r a l c o n s t r a i n t s a n d m o b i l i z e n e w p o l i t i c a l alliances
t o c o u n t e r a c t t h e i n s t i t u t i o n a l i n e r t i a a n d vested i n t e r e s t s t h a t f a v o u r
m a i n t e n a n c e of t h e status q u o . In short, t h e r e is a strategic selectivity to
welfare r e t r e n c h m e n t in production and welfare regimes that interacts
with the m o r e general contradictions associated with the character of
l a b o u r - p o w e r as a fictitious c o m m o d i t y :

The broad social coalitions supporting the welfare state status quo prevent
centrist and even right-wing parties from implementing, or even advocat-
ing, significant cuts in entitlements. Thus, to the extent that economic dif-
ficulties mean the agenda in most countries is not expansion but rather
retrenchment, one should expect narrower partisan differences than in the
past. The narrowing of differences is a result of constraints both on the
right and the left. (Huber and Stephens 2001:167)

Thus, while t h e r e is scope for s o m e redesign of welfare delivery and t h e

r e a l l o c a t i o n o f t h e b u r d e n s o f s o c i a l welfare, t h e s e t h r e e sets o f factors
( a m o n g o t h e r s ) limit t h e e c o n o m i c a n d political s c o p e for w h o l e s a l e
cuts in public provision w i t h o u t c o m p e n s a t i n g changes elsewhere. For,
w h e t h e r p e r f o r m e d i n t h e p r i v a t e , p u b l i c o r t h e t h i r d s e c t o r s , social
 152 Social Reproduction a n d the Workfare State

r e p r o d u c t i o n n e c e s s a r i l y involves costs. M o r e o v e r , a t t e n t i o n m u s t b e
p a i d to t h e q u a l i t y as well as t h e cost of s e c u r i n g s u c h r e p r o d u c t i o n in
o n e w a y or a n o t h e r . T h e case of p r i v a t i z e d h e a l t h c a r e in t h e U S A is p a r -
ticularly n o t e w o r t h y , i f n o t n o t o r i o u s , h e r e ; for i t p r o v i d e s v e r y u n e q u a l
o r n o n - e x i s t e n t c o v e r a g e a n d i s generally m o r e e x p e n s i v e t h a n E u r o p e a n
public health systems. T h e r e is m u c h m o r e scope, however, to refunc-
t i o n a l i z e w e l f a r e s p e n d i n g a t o r a r o u n d t h e levels p r e v a i l i n g i n p a r t i c u -
lar r e g i m e s i n r e s p o n s e t o c h a n g e s i n a c c u m u l a t i o n r e g i m e s , m o d e s o f
r e g u l a t i o n a n d their a s s o c i a t e d i n s t i t u t i o n a l i z e d c o m p r o m i s e s .

4. Towards the Workfare State

C h a n g e s h a v e o c c u r r e d i n all t h r e e sites o f K W N S w e l f a r e ; i n s u r a n c e ,
fisco-financial r e d i s t r i b u t i o n a n d c o l l e c t i v e c o n s u m p t i o n . A c r o s s all t h r e e
a r e a s , w e h a v e b e e n w i t n e s s i n g t h e i n c r e a s i n g s u b o r d i n a t i o n o f social
policy t o e c o n o m i c policy, a l t h o u g h , o f c o u r s e , this r e m a i n s far f r o m total.
T h i s c h a p t e r identifies t h r e e r e l a t e d d i m e n s i o n s o f w e l f a r e r e d e s i g n ,
r e s t r u c t u r i n g a n d r e o r i e n t a t i o n . First, t h e r e a r e q u a l i t a t i v e c h a n g e s i n
social policy a n d its a r t i c u l a t i o n t o e c o n o m i c policy, w i t h t h e l a t t e r b e i n g
a c c o r d e d g r e a t e r p r i m a c y . S e c o n d , t h e r e i s increasing d o w n w a r d p r e s -
s u r e o n t h e social w a g e c o n s i d e r e d a s a cost o f ( i n t e r n a t i o n a l ) p r o d u c -
t i o n a n d / o r as an e l e c t o r a l liability in t h e face of t a x r e s i s t a n c e - reflected
i n c o s t - c u t t i n g or, a t least c o s t - c o n t a i n m e n t , m e a s u r e s a n d t h e r e d e s i g n
o f social t r a n s f e r s t o m a k e t h e m m o r e p r o d u c t i v e . A n d , t h i r d , c h a n g e s
are being m a d e in the forms and functions of collective consumption. I
i l l u s t r a t e t h e s e c h a n g e s f r o m p o l i c i e s for u n e m p l o y e d w o r k e r s , t h e
r e d e s i g n o f p e n s i o n policy t o r e d u c e t h e l o n g - r u n costs o f p e n s i o n p r o -
vision a n d p r o m o t e t h e f i n a n c i a l services sector, a n d t h e r e s t r u c t u r i n g o f
t h e e d u c a t i o n s y s t e m in e f f o r t s to r e a l i g n it w i t h t h e alleged n e e d s of a
globalizing, k n o w l e d g e - b a s e d e c o n o m y . T h i s choice i s tied t o t h e e c o -
n o m i c a n d political significance o f u n e m p l o y m e n t , t h e f a c t t h a t p e n s i o n s
c o n s t i t u t e t h e l a r g e s t i t e m i n t h e civflian b u d g e t s o f m o s t a d v a n c e d c a p -
italist s t a t e s ( w i t h h e a l t h typically t h e s e c o n d b i g g e s t b u d g e t line), a n d
education's key role in economic d e v e l o p m e n t and nation-building. A
m o r e e x t e n d e d t r e a t m e n t o f w e l f a r e state r e s t r u c t u r i n g i n o t h e r f i e l d s o f
social policy, especially h e a l t h , w o u l d b e d e s i r a b l e i n a l o n g e r w o r k , b u t
t h o s e c h o s e n a r e sufficiently significant t o identify t h e m a i n t r e n d s .

The increasing subordination of social policy to

economic policy
G l o b a l i z a t i o n as d e f i n e d in c h a p t e r 3 ( a n d h e n c e w i t h a m e a n i n g far
b r o a d e r t h a n that a d o p t e d in most recent studies of globalization and
 Social Reproduction a n d the W o r k f a r e State 153

social policy) h a s t w o k e y f e a t u r e s t h a t affect t h e K W N S . First, it is l i n k e d

w i t h a n e c o n o m i c a l l y e x p a n d e d a n d sociologically e n r i c h e d n o t i o n o f
c o m p e t i t i v e n e s s - e v e n if n e o l i b e r a l g l o b a l i z a t i o n p r o j e c t s s o m e t i m e s
fail t o give this full p u b l i c r e c o g n i t i o n . A n d , s e c o n d , i t e n h a n c e s t h e
o p p o r t u n i t i e s f o r a t least s o m e capitals, e s p e c i a U y financial c a p i t a l
providing t r a n s p a r e n t financial products, to m o v e across borders. C o m -
bined with increasing inter-urban and interregional competition within
n a t i o n a l e c o n o m i e s , t h i s e x t e n d s a n d r e i n f o r c e s c a p i t a l ' s exit o p p o r t u n i -
ties. T o g e t h e r t h e s e f e a t u r e s t e n d t o t r a n s f o r m p r i o r i t i e s i n social policy,
especially i n r e l a t i o n t o t h e l a t t e r ' s i m p a c t o n c o m p e t i t i v e n e s s . H o w e v e r ,
since, a s e m p h a s i z e d i n c h a p t e r 3 , t h e r e a r e different u n d e r s t a n d i n g s o f
c o m p e t i t i v e n e s s , p r i o r i t i e s c a n be r e s e t in different ways. A R i c a r d i a n
n o t i o n of c o m p e t i t i v e n e s s , for e x a m p l e , m i g h t i n d i c a t e a n e e d to c u t
social s p e n d i n g i n i n c r e a s i n g l y o p e n e c o n o m i e s . F o r i t s u g g e s t s t h a t s u c h
s p e n d i n g is a cost of p r o d u c t i o n , is r e l a t e d m o r e to p o p u l i s t d e m a n d s a n d
social e n g i n e e r i n g t h a n t o e c o n o m i c p e r f o r m a n c e , i s a n u n p r o d u c t i v e
deduction from revenues that could be better spent by individual
e c o n o m i c a g e n t s in t h e m a r k e t , a n d is a s o u r c e of rigidities in t h e
p r o d u c t i v e sector. O t h e r a c c o u n t s o f c o m p e t i t i v e n e s s c o u l d l e a d i n o t h e r
directions. Thus an account oriented to systemic or structural competi-
t i v e n e s s w o u l d give less e m p h a s i s t o t h e a b s o l u t e o r r e l a t i v e c o s t o f
factors o f p r o d u c t i o n a n d m o r e t o t h e i r r e l a t i v e c o n t r i b u t i o n t o e c o n o m i c
o u t p u t ; less t o t h e e c o n o m i c a n d m o r e t o t h e e x t r a - e c o n o m i c d i m e n s i o n s
o f c o m p e t i t i v e n e s s ; less t o t h e i m m e d i a t e t a x costs o f social s p e n d i n g a n d
m o r e t o its l o n g - t e r m c o n t r i b u t i o n t o p r o d u c t i o n ; a n d less t o t h e i m m e -
d i a t e l y u n p r o d u c t i v e n a t u r e o f social e x p e n d i t u r e a n d m o r e t o its r o l e i n
c o m p e n s a t i n g w o r k e r s ( a n d o t h e r a d v e r s e l y affected social f o r c e s ) for
t h e risks a n d d i s r u p t i o n s i n v o l v e d i n i n t e r n a t i o n a l t r a d e . F o c u s i n g o n
t h e s e a s p e c t s o f social s p e n d i n g w o u l d b e less likely t o g e n e r a t e d e m a n d s
for a b s o l u t e w e l f a r e c u t s a s o p p o s e d t o its r e d e s i g n a n d r e o r i e n t a t i o n .
I n t e r alia, this s u g g e s t s t h a t , a l o n g s i d e t h e i r s u p p o r t for i n d i v i d u a l citi-
z e n s a n d t h e i r d e p e n d a n t s , social w e l f a r e c o u l d p l a y a k e y r o l e i n social-
izing t h e costs o f a d j u s t m e n t i n o p e n e c o n o m i e s a s t h e s e affect f i r m s ,
cities o r r e g i o n s , a n d n a t i o n a l e c o n o m i e s . I n b o t h cases, h o w e v e r , g r o w i n g
internationalization, whether seen in t e r m s of Ricardian or structural
c o m p e t i t i v e n e s s , i s l i n k e d t o t h e s u b o r d i n a t i o n o f social policy t o t h e
alleged d e m a n d s of economic competitiveness. This is an i m p o r t a n t qual-
i t a t i v e shift t h a t i s i n d e p e n d e n t o f a n y q u a n t i t a t i v e c h a n g e s , a n d i t r e p -
r e s e n t s a significant c h a n g e i n t h e n a t u r e o f t h e w e l f a r e s t a t e a n d its r o l e
in social r e p r o d u c t i o n .
T h e r e s u l t i n g r e o r d e r i n g o f t h e r e l a t i o n b e t w e e n social a n d e c o n o m i c
p o l i c y h a s p a s s e d t h r o u g h t h r e e m a i n stages. I n t h e i n i t i a l crisis in/of
A t l a n t i c F o r d i s m d u r i n g t h e 1970s, w e l f a r e state activity a n d s p e n d i n g w a s
 154 Social Reproduction a n d the Workfare State

i n c r e a s e d . In part, this w a s a reflection of t h e a u t o m a t i c stabilizers built

i n t o t h e K W N S s u c h t h a t rising u n e m p l o y m e n t t r i g g e r e d i n c r e a s e d
w e l f a r e s p e n d i n g a s well a s l o w e r t a x r e v e n u e s ; a n d i n p a r t i t w a s m o t i -
v a t e d b y h o p e s o f r e s t o r i n g t h e c o n d i t i o n s for F o r d i s t e c o n o m i c e x p a n -
sion. W h e n t h i s s e e m e d t o h a v e failed t o o v e r c o m e stagflation, t h e w e l f a r e
s t a t e w a s p o r t r a y e d o n t h e r i g h t a s a s o u r c e o f rigidities i n t h e l a b o u r
m a r k e t a n d a s a d d i n g t o costs o f p r o d u c t i o n . T h i s p r o m p t e d d e m a n d s for
c h a n g e s i n t h e w e l f a r e state t o e n h a n c e l a b o u r m a r k e t f l e x i b i l i t y a n d t o
r e d u c e costs. This i s reflected f r o m t h e 1980s o n w a r d s i n t h e t i g h t e n i n g
of eligibility criteria for u n e m p l o y m e n t benefit a n d social a s s i s t a n c e a n d
i n a t t e m p t s t o r e d u c e e n t i t l e m e n t s a n d / o r p u t t i m e limits o n t h e m . T h e
second p e r i o d overlaps with the beginnings of a third stage that can be
s e e n m o r e clearly i n t h e 1990s. This i n v o l v e s giving m o r e e m p h a s i s t o
active l a b o u r m a r k e t p o l i c i e s a n d i n c r e a s e d c o o r d i n a t i o n o f u n e m p l o y -
m e n t benefits a n d ' i n - w o r k ' benefits t o d e m o n s t r a t e t h a t ' w o r k pays'.^
T h e s e c o n d a n d t h i r d s t a g e s differ f r o m t h e i d e a l - t y p i c a l K W N S ,
e s p e c i a l l y i n its l i b e r a l form, w i t h its m o r e p a s s i v e a p p r o a c h t o u n e m -
p l o y m e n t . For, w h i l e m a c r o e c o n o m i c policy t a r g e t e d full e m p l o y m e n t ,
u n e m p l o y e d w o r k e r s r e c e i v e d passive s u p p o r t u n t i l j o b s b e c a m e avail-
a b l e a g a i n (cf. M i s h r a 1985). T h i s s u p p o r t t o o k t w o m a i n f o r m s . F o r t h o s e
w i t h sufficient l a b o u r m a r k e t e x p e r i e n c e , u n e m p l o y m e n t a n d r e l a t e d
b e n e f i t s b a s e d o n social i n s u r a n c e w e r e p a i d ; c o n v e r s e l y , t h o s e w h o d i d
n o t qualify for s u c h benefits r e c e i v e d social assistance. I n c o n t r a s t , t h e
S W P R a d o p t s a m o r e a c t i v e a p p r o a c h t o l a b o u r m a r k e t policy t h r o u g h
a c o m b i n a t i o n o f m e a s u r e s t o c r e a t e t h e c o n d i t i o n s for full e m p l o y a b i l -
ity i n t h e l a b o u r m a r k e t a n d o f a c t i v e p r e p a r a t i o n o f s o m e o r all o f t h e
u n e m p l o y e d to help t h e m back into work. Thus, one of the major
f e a t u r e s o f r e c e n t c h a n g e s i n social r e p r o d u c t i o n i s t h e r o l l - o u t o f n e w
r e g i m e s , r h e t o r i c s a n d r o u t i n e s o f 'workfarisf r e g u l a t i o n t o r e p l a c e t h e
n a t i o n a l f r a m e w o r k o f a n a l l e g e d l y c r i s i s - p r o n e w e l f a r e s t a t e o r 'wel-
farisf r e g i m e (see P e c k 2 0 0 1 ) . A b a s i c f e a t u r e of this n e w a p p r o a c h is its
r o l e i n e n c o u r a g i n g a n d / o r e n f o r c i n g w o r k t h r o u g h active f o r m s o f social
and e m p l o y m e n t policy and the d e v e l o p m e n t of transitional labour
markets intended to smooth the path (or transition) from welfare into
w o r k . I t h a s b e e n a d v o c a t e d a t all l e v e l s o f policy f o r m u l a t i o n a n d i m p l e -
m e n t a t i o n f r o m t h e O E C D (in its j o b s s t u d y , O E C D 1994) a n d t h e E U
(for e x a m p l e in t h e 1993 W h i t e P a p e r , Growth, Competitiveness, Employ-
ment, or t h e 1995 EU r e p o r t . Social Protection in Europe, as well as at
a series of economic summits) through national states to t h e regional and
local level (for g e n e r a l s u r v e y s of this shift f r o m passive to a c t i v e l a b o u r
m a r k e t policy, s e e K a l i s h e t al. 1998; P e c k 2 0 0 1 ; S c h m i d 1996).
T h e a c t i v a t i o n a p p r o a c h i s m o r e o r less u n i v e r s a l i n t h e e c o n o m i c
s p a c e o f A t l a n t i c F o r d i s m , b u t i t c a n t a k e different f o r m s . First, i n l i b e r a l
 Social Reproduction a n d the Workfare State 155

welfare r e g i m e s , t h e e m p h a s i s h a s fallen o n w a g e flexibility, r e d u c t i o n s

i n i n s u r a n c e - b a s e d u n e m p l o y m e n t b e n e f i t s a n d m e a n s - t e s t e d social
assistance, a n d t h e a b o l i t i o n o r r e d u c t i o n o f m i n i m u m w a g e s . T h e
northern and antipodean liberal regimes, in part because of their state
s t r u c t u r e s a n d i n p a r t b e c a u s e t h e i r w e l f a r e e n t i t l e m e n t s a r e less well
entrenched, are better able to impose these changes from above without
s e r i o u s c o n s u l t a t i o n . H o w e v e r , for t h e r e a s o n s n o t e d a b o v e , this m a y n o t
be the optimal solution economically in the m e d i u m - to long-term; and
it could be d a m a g i n g electorally because it exposes the responsible
n e o l i b e r a l g o v e r n m e n t s p o l i t i c a l l y s h o u l d m a r k e t failure r e - e m e r g e
( T a y l o r - G o o b y 2 0 0 1 b : 1 0 - 1 1 ) . S e c o n d , social d e m o c r a t i c w e l f a r e r e g i m e s
h a v e t e n d e d t o intensify t h e i r p a s t c o m m i t m e n t s t o d e m a n d m a n a g e m e n t
a n d a c t i v e l a b o u r m a r k e t policies, b u t h a v e g i v e n t h e m a n e w w o r k f a r i s t
inflection whilst m a i n t a i n i n g r e l a t i v e l y h i g h levels o f p u b l i c w e l f a r e
s p e n d i n g (see p p . 1 5 6 , 1 5 8 ) . A t h i r d p a t t e r n i s f o u n d i n t h e c o n s e r v a t i v e -
c o r p o r a t i s t o r C h r i s t i a n d e m o c r a t i c r e g i m e s . T h e s e rely h e a v i l y o n
p a y r o l l t a x e s r a t h e r t h a n o n g e n e r a l t a x a t i o n t o f i n a n c e social w e l f a r e ,
a n d t h e i r w e l l - o r g a n i z e d social p a r t n e r s t e n d t o b e l i e v e t h e y h a v e p r o p -
erty rights in the welfare regime. These regimes therefore face a 'conti-
n e n t a l d i l e m m a ' ( S c h a r p f 1997) t h a t is g e n e r a t e d by a 'scissors effect'.
O n e b l a d e o f this i n v o l v e s g r o w i n g i n a c t i v i t y r a t e s t h a t a r e l a r g e l y d u e
t o r i s i n g levels o f u n e m p l o y m e n t a n d ( o f t e n e a r l y ) r e t i r e m e n t ; t h e o t h e r
blade involves increasing public expenditure based on entrenched insur-
ance-based and corporatist-mediated entitlements. This has p r o m p t e d
n e g o t i a t i o n b e t w e e n t h e different o c c u p a t i o n a l e s t a t e s a n d g o v e r n m e n t
w i t h t h e a i m o f s e e k i n g w a y s t o r e d u c e t h e c o s t o f t h e social w a g e for
firms and transfer it to general taxation without triggering wage d e m a n d s
t o e n a b l e e m p l o y e e s t o m a i n t a i n t h e i r r e a l d i s p o s a b l e i n c o m e after
inflation a n d t a x a t i o n ( s e e also T a y l o r - G o o b y 2 0 0 1 b ) .
E v e n w h e r e activation policies w e r e already an i m p o r t a n t part of t h e
K W N S s y s t e m (e.g., i n t h e N o r d i c e c o n o m i e s ) , w o r k o b l i g a t i o n s h a v e
b e c o m e m o r e explicit, s t r i c t e r a n d m a n d a t o r y i n t h e 1990s. I t i s n o l o n g e r
a q u e s t i o n of w h e t h e r or n o t t h e j o b l e s s s h o u l d p a r t i c i p a t e ui a
p r o g r a m m e , but rather of the p r o g r a m m e into which they should be
e n r o l l e d , wfllingly o r n o t . I t h a s b e c o m e h a r d e r t o refuse p a r t i c i p a t i o n
and the authorities have gained powers to sanction non-participation. In
a d d i t i o n , t h e d i s c o u r s e h a s shifted f r o m e n t i t l e m e n t s t o o b l i g a t i o n s , e s p e -
cially a s r e g a r d s t h e y o u n g u n e m p l o y e d . T o g e t h e r w i t h a r e s t r u c t u r i n g o f
social services t o t a r g e t u n e m p l o y m e n t a n d social e x c l u s i o n a n d t o c u t
social a s s i s t a n c e costs, this a m o u n t s t o a g e n e r a l m o v e m e n t a w a y f r o m
t h e social d e m o c r a t i c t r a d i t i o n ( J o h a n s s o n 2 0 0 1 : 7 0 - 4 ) .
T h e r e a r e f o u r k e y a s p e c t s , for p r e s e n t p u r p o s e s , i n a c t i v a t i o n p o l i -
cies: (1) t h e y a i m t o e n h a n c e t h e f l e x i b i h t y o f l a b o u r m a r k e t s ; (2) t h e y
 156 Social Reproduction and the Workfare State

seek t o e n h a n c e w o r k e r s ' e m p l o y a b i l i t y a n d t r a n s f o r m t h e m i n t o e n t e r -
prising s u b j e c t s i n a p o s t - F o r d i s t w o r l d w h e r e j o b s for life c a n n o l o n g e r
b e g u a r a n t e e d a n d s h o u l d n o l o n g e r b e e x p e c t e d ; (3) r a t h e r t h a n involv-
ing s t a n d a r d n a t i o n a l policies a n d m e a s u r e s , they rely far m o r e o n local
a g e n c i e s t o d e s i g n and m a n a g e policy i n a n e x p e r i m e n t a l m a n n e r i n t h e
belief t h a t this will p r o d u c e s o l u t i o n s t h a t m e e t local n e e d s a n d t h a t c a n
m o b i l i z e local s t a k e h o l d e r s , c o m p e t e n c i e s a n d r e s o u r c e s ; a n d (4) t h e y a r e
being increasingly o r i e n t e d to t h e k n o w l e d g e - b a s e d economy, reskilling
a n d lifelong learning. T h u s u n e m p l o y m e n t b e n e f i t s a r e l i n k e d t o w o r k ,
training or other p r o g r a m m e s designed to help the u n e m p l o y e d move
b a c k i n t o e m p l o y m e n t . A c t i v a t i o n p o l i c y also e x t e n d s i n t o e d u c a t i o n a n d
training a n d n o t j u s t u n e m p l o y m e n t i n s u r a n c e a n d social security.* T h e
m e t h o d s a d o p t e d t o a c t i v a t e w o r k e r s m a y b e m o r e o r less c o e r c i v e o r
e m p o w e r i n g ( P e c k 2001); t h e t a r g e t s also vary within a n d a c r o s s r e g i m e s
and over time - including the registered unemployed, lone parents and
t h e d i s a b l e d ( R o b i n s o n 1998: 87); a n d t h e cost a n d d u r a t i o n o f p r o -
g r a m m e s c a n r a n g e f r o m c h e a p a n d q u i c k t o q u i t e costly a n d e x t e n d e d
p r o g r a m m e s based on retraining. This is evident in the contrast b e t w e e n
c o e r c i v e n e o l i b e r a l j o b - s e a r c h - f o c u s e d w e l f a r e - t o - w o r k tactics t h r o u g h
e x t e n d e d r e t r a i n i n g a n d reskilling p r o g r a m m e s t o t h e still m o r e c o m -
p r e h e n s i v e D u t c h 'flexicurity' a p p r o a c h a n d D a n i s h j o b r o t a t i o n a n d
w o r k l e a v e s c h e m e s ( H e m e r i j c k a n d M a n o w 2 0 0 1 ; J 0 r g e n s e n 2002;
Torfing 1999; W i l t h a g e n 1998). I n s o m e cases t h e c h e a p a n d q u i c k
a p p r o a c h i s c o m b i n e d w i t h state s u b s i d i e s t o w o r k i n g h o u s e h o l d s , e s p e -
cially w i t h c h i l d r e n , s o t h a t t h e i r n e t i n c o m e s i n e m p l o y m e n t c a n rise
a b o v e t h e p o v e r t y line a n d t h e fiscal p o v e r t y t r a p c a n b e r e d u c e d . T h i s
t e n d s t o s u b s i d i z e e m p l o y e r s p a y i n g low w a g e s a s well a s t o i n v o l v e f i s c a l
r e d i s t r i b u t i o n t o t h e p o o r i n a n e w g u i s e (see R o b i n s o n 2000). N o n e t h e -
less, in g e n e r a l , t h e o v e r a l l effect of a c t i v a t i o n p r o g r a m m e s is o n e of
explicit o r i m p l i c i t d i s e n t i t l e m e n t - i n t h e f o r m e r case t h r o u g h d i r e c t
cuts, i n t h e l a t t e r t h r o u g h shifts i n w o r k p a t t e r n s w h e n benefits r e m a i n
t i e d t o s t a n d a r d life-work cycles ( R h o d e s a n d M e n y 1998: 11).
M o r e generally, a c t i v a t i o n p o l i c i e s c a n b e p l a c e d o n a c o n t i n u u m
running from flexploitation to flexicurity. Flexploitation refers to 'the
a n t i - w o r k e r a s p e c t s o f f l e x i b i l i t y ' ( G r a y 1998: 3 ) , e s p e c i a l l y t h e c o m b i -
nation of increased coercion on the unemployed to find work and
i n c r e a s e d i n s e c u r i t y for t h o s e i n w o r k . F l e x p l o i t a t i o n i s p a r t i c u l a r l y asso-
c i a t e d w i t h n e o l i b e r a l w o r k f a r e m e a s u r e s a n d t e n d s t o i n c r e a s e social
e x c l u s i o n ( C o o k e t a l 2 0 0 1 ; G l y n a n d W o o d 2 0 0 1 ; H a u g h t o n e t a l 2000;
H y d e e t al. 1999; J o n e s a n d G r a y 2 0 0 1 ; P e c k a n d T h e o d o r e 2000). I n c o n -
trast, f l e x i c u r i t y , a l t h o u g h a n E n g l i s h w o r d , w a s c o i n e d b y t h e D u t c h i n
1995 t o r e f e r t o a n e w r a n g e o f p o l i c i e s i n t e n d e d t o m a k e l a b o u r m a r k e t s
m o r e f l e x i b l e a t t h e s a m e t i m e a s p r o v i d i n g g r e a t e r social a n d e m p l o y -
 Social Reproduction and the Workfare State 157

m e n t s e c u r i t y for t t i o s e i n o r o u t o f w o r k , a n d i m p r o v i n g social i n c l u s i o n
for all l a b o u r m a r k e t p a r t i c i p a n t s ( s e e W i l t h a g e n 1998: 2 1 ) . D u t c h flexi-
c u r i t y a i m s to p r o v i d e t h e s e c u r i t y of a j o b ( b u t n o t s e c u r i t y in a j o b ) for
c o r e w o r k e r s a s well a s c o n t i n g e n t , a t y p i c a l o r flexible w o r k e r s , a n d t o
s u p p o r t this t h r o u g h a c o r r e s p o n d i n g l y flexible s y s t e m of social s e c u r i t y
a n d a c t i v a t i o n policies. I t i s p a r t i c u l a r l y c o n c e r n e d t o establish g o o d t r a n -
sitional l a b o u r m a r k e t s t o s m o o t h t h e p a t h o f t h e u n e m p l o y e d i n t o w o r k .
Thus it is c o m m i t t e d to the ' e m p o w e r m e n t of workers, organizational
c o o p e r a t i o n (in n e t w o r k s a n d p r i v a t e - p u b l i c p a r t n e r s h i p ) , d y n a m i c effi-
ciency, l e a d i n g t o effective e m p l o y m e n t p r o m o t i o n , a n d s u s t a i n a b l e
e m p l o y m e n t ( r a t h e r t h a n " d e a d e n d j o b s " ) ' ( W i l t h a g e n 1998: 1). M o r e
generally, f l e x i c u r i t y t e n d s t o b e a s s o c i a t e d w i t h n e o - c o r p o r a t i s t b a r -
gaining a n d s o c i a l p a c t s on a n u m b e r of s c a l e s ( f o r a g e n e r a l r e v i e w of
'flexicurity'-type a c t i v e l a b o u r m a r k e t a r r a n g e m e n t s i n E u r o p e , s e e
S c h m i d 1996).

Downward pressure on the social wage

D e s p i t e t h e crisis t h a t b e g a n t o e m e r g e i n t h e l a t e 1970s, state b u d g e t s
r e m a i n e d h i g h i n t h e 1980s a n d c o n t i n u e d t o rise i n t h e 1990s ( G a r r e t t
1998, 2 0 0 1 ; G a r r e t t a n d M i t c h e f l 2 0 0 1 ; H u b e r a n d S t e p h e n s 2 0 0 1 ) .
D e m a n d s for cuts i n s t a t e s p e n d i n g o n t h e g r o u n d s t h a t i t b l o c k e d
economic growth had already begun to attract wide attention in the
mid-1970s a n d t h e O E C D s o o n j o i n e d t h e c h o r u s for c u t s i n 1981 ( O E C D
1981). T h i s r e f l e c t s t h e v i e w t h a t t h e s o c i a l w a g e r e p r e s e n t e d b y w e l f a r e
s p e n d i n g is a cost of p r o d u c t i o n like t h e i n d i v i d u a l w a g e a n d t h a t t a x a -
t i o n is a l w a y s a d i s i n c e n t i v e to effort, savings a n d i n v e s t m e n t . T h i s is asso-
ciated in t u r n with a public b u r d e n m o d e l of welfare, w h i c h has b e e n
defined b y W i l d i n g a s ' t h e v i e w t h a t m u c h t r a d i t i o n a l w e l f a r e e x p e n d i -
t u r e is an unproductive b u r d e n on t h e productive side of t h e e c o n o m y
a n d s h o u l d t h e r e f o r e b e r e v i e w e d a n d r e d u c e d ' (1997: 417). T h i s c a n b e
contrasted with an alternative view that taxes are the price of admission
t o a civilized s o c i e t y ( H u t t o n 2 0 0 2 ) . N o t w i t h s t a n d i n g s u c h d e m a n d s ,
h o w e v e r , t h e crisis l e d t o h i g h e r r a t h e r t h a n l o w e r s p e n d i n g . I n d e e d , t h e
1980s s a w a m o r e m a r k e d m e a n a n n u a l i n c r e a s e i n p u b l i c e x p e n d i t u r e
a c r o s s all w e l f a r e r e g i m e s t h a n h a d o c c u r r e d d u r i n g t h e 1970s, t h e p e r i o d
w h e n t h e K W N S h a d r e a c h e d its p e a k a n d b e g a n t o d i s p l a y crisis s y m p -
toms ( H u b e r and Stephens 2001:207). This continuing increase p r o m p t e d
t h e O E C D i n t h e e a r l y 1980s t o a s k q u i t e l o g i c a l l y w h e t h e r t h i s t r e n d
reflected t h e t e m p o r a r y c o s t s o f m a n a g i n g t h e t r a n s i t i o n o r i m p l i e d t h a t
t h e s t a t e w e l f a r e b u d g e t w o u l d a l w a y s r e m a i n a t t h e s e levels. Its officials
w e r e o p t i m i s t i c e n o u g h a t t h a t t i m e t o m a i n t a i n t h a t 'it s h o u l d b e p o s -
sible t o m a i n t a i n t h e g a i n s i n s e c u r i t y a n d services w h i c h w e r e r e a c h e d
158 Social Reproduction and the Workfare State

i n tiie 1960s a n d 1970s, a n d t o i m p r o v e t l i e m i n line w i t h t h e r a t e o f e c o -

n o m i c g r o w t h , b u t n o t f a s t e r ' ( O E C D 1985). I t s o o n b e c a m e less san-
guine, however, and, together with the I M F , r e c o m m e n d e d the redesign
o f social policy a r o u n d t h r e e goals; (1) i n c r e a s e d efficiency i n t h e deliv-
e r y of g o v e r n m e n t g o o d s a n d s e r v i c e s a n d m p r o g r a m m e efficiency; (2)
a r e v i e w o f s p e n d i n g p r i o r i t i e s a n d p r o g r a m m e objectives; a n d (3) t h e
devolving of s o m e public responsibilities to the private sector (Oxley and
M a r t i n 1991). A n d m o r e r e c e n t l y still, whilst m a i n t a i n i n g this line a n d t h e
d e m a n d for c o n t i n u e d d o w n w a r d p r e s s u r e o n s p e n d i n g c o m m i t m e n t s
(for e x a m p l e , i n t h e a r e a o f p e n s i o n s , o n w h i c h see b e l o w ) , i t h a s also
b e g u n t o p u t m o r e e m p h a s i s o n t h e n e e d for a h u m a n c a p i t a l a p p r o a c h
to t h e residual welfare state ( O E C D 1994,1999).
T h e s e t r e n d s i n p u b l i c s p e n d i n g o u t c o m e s a r e best i n t e r p r e t e d i n con-
j u n c t i o n w i t h state r e v e n u e s . T h u s , w h e r e a s e x p e n d i t u r e i n c r e a s e d faster
t h a n r e v e n u e i n t h e 1970s, r e v e n u e g r e w faster t h a n s p e n d i n g i n t h e
1980s, i n d i c a t i n g a n a t t e m p t t o r e d u c e deficits e v e n a s e x p e n d i t u r e c o n -
t i n u e d t o i n c r e a s e . T h i s p a t t e r n c o n t i n u e d i n t o t h e 1990s, a s g o v e r n m e n t s
sought to increase revenues and rein back spending (Huber and
S t e p h e n s 2 0 0 1 : 207). T h e r e i s also e v i d e n c e t h a t t h e h i g h e r s p e n d i n g
w e l f a r e states h a v e m o v e d closer t o t h e t r e n d line o f ' e x p e c t e d ' s p e n d -
ing t h a n t h o s e t h a t u n d e r s p e n d r e l a t i v e t o t h e i r t y p e o f r e g i m e ( A l b e r
a n d S t a n d i n g 2000). A f u r t h e r i n d i c a t i o n o f t h e s t r u g g l e t o r e d u c e s p e n d -
ing i s t h e r e d u c e d significance o f p a r t i s a n c o n t r o l a n d a c c u m u l a t e d p a r -
t i s a n i n c u m b e n c y o v e r g o v e r n m e n t s p e n d i n g f r o m t h e 1970s t h r o u g h t o
t h e 1990s, s u g g e s t i n g t h a t e x t e r n a l c o n s t r a i n t s a r e l i m i t i n g r o o m for
manoeuvre (Huber et al 1999:190-2).
M o r e o v e r , w h e n one t u r n s to the wood r a t h e r t h a n the trees, we find
t h a t '[e] v e r y w h e r e p r o g r a m m e s o f b e n e f i t c u r t a i l m e n t a n d r e t r e n c h m e n t
are on the agenda; a n d t h e differences are of degree and of t h e vigour
w i t h w h i c h t h e s e policies a r e p u s h e d h o m e ' ( T a y l o r - G o o b y 1996: 214).
Or, a s B o n o l i e t al. c l a i m i n r e g a r d t o E u r o p e w e l f a r e r e g i m e s :

There is now general agreement that the bulk of the social legislation intro-
duced in recent years is intended to reduce the role of the state in welfare.
Policies that lead in the opposite direction play a subordinate r o l e . . . . This
mass of restrictive social legislation consisted of several overlapping types.
Some new policies have reduced the level of cash benefits, restricted enti-
tlement and reduced the period for which the benefits can be paid. Other
legislation increased the payments made by users of the health, education
and social care services. Still other legislation made the provision or the
administration of some of the cash benefits the responsibility of employ-
ers or other bodies or introduced market principles in the management of
services. Finally, legislation privatized parts of the social services or many
public utilities in their entirety. (Bonoli et al. 2000; 1)
r

Social Reproduction and the Workfare State 159

There are m a n y ways in which this downward pressure is expressed.

I h a v e a l r e a d y n o t e d t h e r o l e o f cuts i n u n e m p l o y m e n t b e n e f i t a n d t h e i r
articulation with activation policies and 'work pays' strategies. T h e r e is
also a g e n e r a l extension of means-testing for marginal workers, u n e m -
p l o y e d a n d l o n e p a r e n t s - this r e s p o n s e i s e s p e c i a l l y c o m m o n i n l i b e r a l
r e g i m e s . T h e r e a r e a t t e m p t s t o t r a n s f e r risk a n d u n c e r t a i n t y t o i n d i v i d -
uals t h r o u g h i n c r e a s e d e m p h a s i s o n p r i v a t e p r o v i s i o n a n d civil s o c i e t y
r a t h e r t h a n o n s t a t e g u a r a n t e e s (e.g., t h r o u g h v a r i a t i o n i n p e n s i o n f u n d
performance and annuity rates u p o n retirement). T h e overall result is
i n c r e a s i n g d e p e n d e n c e o n t h e m a r k e t for a n i n c o m e a d e q u a t e t o s u s t a i n
t h e socially a c c e p t e d l e v e l s o f c o n s u m p t i o n or, i n o t h e r w o r d s , a n i n c r e a s -
i n g a d m i n i s t r a t i v e r e c o m m o d i f i c a t i o n o f l a b o u r - p o w e r ( B o n o l i e t al.
2000; Offe 1984; P i e r s o n 2 0 0 1 a ) . A n d , i n d e e d , w h e r e n e o l i b e r a l p o l i c i e s
have reinforced segmented and dualistic labour markets, the resulting
f l e x p l o i t a t i o n will also lead t o i n c r e a s e d i m p o v e r i s h m e n t a n d social
exclusion.
M o r e generally, i n s u r a n c e h a s b e e n p a r t i a l l y p r i v a t i z e d o r p l a c e d i n
t h e t h i r d sector. T h i s a p p r o a c h i s s o m e t i m e s l i n k e d t o p r o m o t i o n o f
'popular capitalism', a property-owning democracy, and wider share
ownership; but elsewhere it is linked to wider community participation,
a s t a k e h o l d i n g society, a n d p u b l i c - p r i v a t e p a r t n e r s h i p i n v o l v i n g N G O s .
T h e r e w e r e p r e c e d e n t s for this i n t h e old c o r p o r a t i s t w e l f a r e r e g i m e s a n d
t r i p a r t i t e social d e m o c r a t i c r e g i m e s , w h e r e t r a d e u n i o n s h a d a key r o l e
i n i n s u r a n c e . Fisco-financial r e d i s t r i b u t i o n t e n d s t o b e c o m e m o r e selec-
t i v e a n d t a r g e t e d a s a m e a n s o f c o n t a i n i n g costs. A n d , i n t h e c o n t e x t o f
Schumpeterian policies for competitiveness, fisco-financial redistribution
i s also l i n k e d t o p r o m o t i n g r a t h e r t h a n t o m o d e r a t i n g i n e q u a l i t i e s . T h i s
i s reflected i n t h e t e n d e n c y for ' w e l f a r e for c a p i t a l ' t o e x p a n d a t t h e s a m e
t i m e a s ' w e l f a r e for l a b o u r ' c o n t r a c t s , a s well a s m o r e g e n e r a l f o r m s o f
w e l f a r e r e s t r u c t u r i n g a n d r e t r e n c h m e n t . I t i s also l i n k e d t o t h e n e o l i b -
eral Schumpeterian t e n d e n c y to p r o m o t e u n e v e n regional d e v e l o p m e n t
r a t h e r t h a n t o c o m p e n s a t e for it.

Pensions
A useful c a s e s t u d y i n this r e g a r d i s t h e d e v e l o p m e n t o f p e n s i o n s . T h i s
is an important field of public expenditure because pensions became the
m o s t costly single i t e m i n g o v e r n m e n t s ' social b u d g e t s i n t h e 1990s a n d
s h o u l d t h e r e f o r e h a v e b e c o m e a m a j o r t a r g e t for r e t r e n c h m e n t , e s p e -
cially a s t h e r e i s r a p i d a g e i n g o f t h e p o p u l a t i o n ( i n c l u d i n g t h e h e a l t h -
care-intensive population aged 75 years or older).' Indeed, the O E C D
h a d a l r e a d y i d e n t i f i e d t h i s a s a m a j o r p r o b l e m for w e l f a r e s t a t e s i n t h e
1980s; a n d t h e W o r l d B a n k h a s r e c e n t l y b e e n p u s h i n g for a s y s t e m o f
160 Social Reproduction a n d the Workfare State

private defined contribution pensions to reduce t h e burden of pensions

o n s t a t e b u d g e t s . P e n s i o n r e f o r m i s also i n t e r e s t i n g b e c a u s e i t c o n t r a s t s
w i t h t h e c a s e o f u n e m p l o y m e n t benefit, w h i c h r e p r e s e n t s a s m a l l e r p r o -
p o r t i o n of state budgets e v e n w h e n it is relatively high. W h e r e a s u n e m -
p l o y m e n t benefit has b e e n cut as part of a package of active reintegration
o f t h e u n e m p l o y e d i n t o t h e l a b o u r m a r k e t , p e n s i o n s h a v e b e e n subject
to greater downward pressure.
T h e s e d e m o g r a p h i c p r e s s u r e s a r e c o m m o n t o all i n d u s t r i a l c o u n t r i e s
a n d this i s reflected i n t h e fact t h a t a l m o s t all states h a v e a c t e d t o r e d u c e
s t a t e e x p e n d i t u r e o n r e t i r e m e n t p e n s i o n s or, a t least, t o r e d u c e its r a t e
of i n c r e a s e a n d to finance it in d i f f e r e n t w a y s . T h u s , as B o n o l i et al. n o t e :
' I n t h e 1980s, a n d e v e n m o r e s o i n t h e 1990s, t h e d i r e c t i o n o f c h a n g e i n
p e n s i o n p o l i c y h a s r e v e r t e d from o v e r a l l e x p a n s i o n t o r e t r e n c h m e n t . A s
a result, in the current situation, the t e r m "pension r e f o r m " is increas-
ingly u s e d a s a s y n o n y m f o r cuts i n old a g e p e n s i o n s ' (2000: 3 0 ) . T h i s
c l a i m i s c o n f i r m e d b y d a t a for e i g h t e e n O E C D c o u n t r i e s p r o v i d e d b y
H u b e r a n d Stephens, w h o further show that liberal welfare regimes are
t h e m o s t likely t o c u t a n d social d e m o c r a t i c r e g i m e s t h e m o s t i m m u n e
from cuts (2001: 208-9). Yet it is t h e Christian democratic conservative-
corporatist regimes that are most vulnerable to these demographic pres-
sures by virtue of the g r e a t e r increase in their dependency ratio of
p e n s i o n e r s to wage e a r n e r s and the n a t u r e of their pension systems.
I n g e n e r a l , all g o v e r n m e n t s h a v e p r e f e r r e d l o w visibility r e f o r m s ,
which can be seen a s p a r t o f a ' s t r a t e g y o f o b f u s c a t i o n ' t o disguise t h e
extent and impact o f c h a n g e s o v e r t i m e ( P i e r s o n 1995: 1 9 - 2 2 ) . A m o n g
the m e a s u r e s used t o disguise t h e e x t e n t o f c u t s a r e :

1 A shift in i n d e x a t i o n of p e n s i o n s to prices r a t h e r t h a n w a g e s . T h i s
contrasts with the position in Atlantic Fordism, w h e r e pensions were
linked to wages a n d t h e latter were linked in t u r n to productivity and
inflation. C o u p l e d w i t h a n e x t e n s i o n o f q u a l i f y i n g y e a r s r e q u i r e m e n t s
a n d a r e d u c t i o n in e a r l y r e t i r e m e n t i n c e n t i v e s , this wfll s t e a d i l y
r e d u c e t h e level o f i n d i v i d u a l p e n s i o n s r e l a t i v e t o a v e r a g e e a r n e d
incomes.
2 A shift f r o m p a y - a s - y o u - g o p e n s i o n s s y s t e m s (effectively a c o l l e c t i v e
intergenerational redistribution from t h e active labour force to t h e
retired that is financed from general taxation) to pre-funded systems
(effectively a m e a n s o f r e d i s t r i b u t i n g i n c o m e o v e r t h e lifecycle b y
boosting savings).This poses transitional problems, as those currently
in the labour force must pay general taxes to finance the pensions of
t h e c u r r e n t l y r e t i r e d a t t h e s a m e t i m e a s t h e y a r e o b l i g e d (or i n c e n -
tivized) t o c o n t r i b u t e t o t h e i r o w n f u t u r e p e n s i o n s . U n s u r p r i s i n g l y ,
this a p p r o a c h has p r o v o k e d significant r e s i s t a n c e t o p e n s i o n r e f o r m .
 Social Reproduction a n d the Workfare State 161

3 A shift f r o m defined benefit to d e f i n e d c o n t r i b u t i o n s c h e m e s in p u b l i c

p e n s i o n p r o v i s i o n , w i t h v a r i o u s a c t u a r i a l a l l o w a n c e s b e i n g m a d e for
i n c r e a s i n g life e x p e c t a n c y , w a g e g r o w t h , r e t u r n s o n capital, etc. T h e
i n t e n d e d n e t effect o f t h e s e a l l o w a n c e s i s t o r e d u c e t h e p e n s i o n bill.
4 A p u s h to m o v e f r o m p u b l i c - d e f i n e d benefit to p r i v a t e - d e f i n e d c o n -
t r i b u t i o n s c h e m e s . T h i s w o u l d n o t o n l y p r i v a t i z e risks r e l a t i v e t o t h e
s t a t e s y s t e m , i t w o u l d also r e d i s t r i b u t e risk f r o m e m p l o y e r s , g o v e r n -
ments and pension funds to future pensioners. Although strongly
p u s h e d by international bodies such as the World B a n k and by
n a t i o n a l states, t h e r e are d o u b t s w h e t h e r private systems can actually
m a t c h t h e risk diversification a n d profile o f p u b l i c s y s t e m s ( F r o n d e t
al. 2 0 0 1 ; O r s z a g a n d S t i g h t z 2 0 0 1 ) . T h e r e a r e also c o n c e r n s a b o u t t h e
h i g h costs o f p r i v a t e p e n s i o n s c h e m e s ( i n c l u d i n g m a r k e t i n g costs,
m a n a g e m e n t c h a r g e s , r e g u l a t o r y a n d c o m p l i a n c e costs, a n d a d v e r s e
s e l e c t i o n effects) a n d t h e e x t e n t t o w h i c h p e n s i o n p r i v a t i z a t i o n s e r v e s
as an indirect state subsidy to the financial services sector at the
e x p e n s e o f t h e i n s u r e d a n d citizens.
5 T h e p r o m o t i o n of m u l t i - t i e r e d s y s t e m s in w h i c h a m i n i m a l p u b l i c
pension is s u p p l e m e n t e d by means-tested assistance and/or an occu-
pational pension or individual p o r t a b l e personal pension tied to stock
market performance.
6 Measures to make pensions more 'portable' so that they correspond
better to more flexible and mobile labour markets.

T h e r e are differences a m o n g welfare regimes h e r e too. L i b e r a l

regimes are most associated with a steady d o w n w a r d pressure on pen-
sions, w i t h s t r o n g r e U a n c e o n d e - i n d e x i n g p e n s i o n s f r o m w a g e i n c r e a s e s
t o l i n k t h e m o n l y t o p r i c e inflation, a n d s t r o n g e n c o u r a g e m e n t t o p r i v a t e
s a v i n g s - w h i c h h a s t h e a d d i t i o n a l b e n e f i t in a m a r k e t - c o o r d i n a t e d a n d
m o n e y - c a p i t a l d o m i n a t e d e c o n o m y o f b o o s t i n g d e m a n d for f i n a n c i a l ser-
vices. I n social d e m o c r a t i c r e g i m e s t h e r e a r e m e a s u r e s t o p r e v e n t e a r l y
r e t i r e m e n t (previously used to deal with deindustrialization, to disguise
unemployment and to enable a greater targeting of unemployment m e a -
s u r e s on the y o u n g u n e m p l o y e d a n d t h e reskilling of t h o s e in m i d d l e age)
and/or to p r o v i d e strong incentives to delay retirement so t h a t t h e
p e n s i o n will b e h i g h e r . S o c i a l d e m o c r a t i c r e g i m e s h a v e also a c t e d t o
r e m o v e p u b l i c s e c t o r e m p l o y m e n t p r i v i l e g e s a n d t o claw b a c k o r m e a n s -
test the national p e n s i o n w h e r e t h e r e t i r e d also h a v e occupational p e n -
s i o n s . T h e r e h a s also b e e n a t i g h t e n i n g o f r e s i d e n c e r e q u i r e m e n t s a n d
o t h e r eligibility m e a s u r e s . I n c o n s e r v a t i v e - c o r p o r a t i v i s t s y s t e m s w e f i n d
a n e x t e n d e d qualifying p e r i o d for p e n s i o n s c o u p l e d w i t h a famfly-
friendly shift b e c a u s e child c a r e y e a r s c a n n o w c o u n t a s a c t i v e y e a r s
(Taylor-Gooby 2001b: 7).
 162 Social Reproduction and the Workfare State

5. Collective Consumption and the Competition State

T h e r e h a s also b e e n a r e t r e a t f r o m c o l l e c t i v e c o n s u m p t i o n p r o v i d e d b y
t h e s t a t e i n t h e m i x e d e c o n o m y t o m o r e m a r k e t - a n d / o r t h i r d sector solu-
t i o n s t o t h e s o c i a h z a t i o n o f c o n s u m p t i o n . T h i s i s reflected i n f i v e m a i n
sets o f c h a n g e s i n t h e f o r m a n d f u n c t i o n s o f collective c o n s u m p t i o n . First,
w h e r e a s collective consumption in t h e K W N S involved public provision
a n d p u b l i c f i n a n c e , this r e l a t i o n s h i p h a s s i n c e b e e n dis- a n d r e a r t i c u l a t e d
to p r o d u c e a m o r e complex 'mixed e c o n o m y of welfare'. At one extreme
we find t h e total privatization of some sectors (involving private p a y m e n t
as well as private provision); then c o m e various types of private and third
sector p r o v i s i o n c o m b i n e d w i t h c o n t i n u i n g p u b l i c p a y m e n t ; less r a d i c a l
still i s t h e i n t r o d u c t i o n o f m a r k e t p r o x i e s i n t o w h a t r e m a i n s o f p u b l i c
p r o v i s i o n f i n a n c e d b y t h e state; a n d , a t t h e o t h e r e x t r e m e , w e f i n d m e a -
sures such as modest user changes, means-testing, co-payment by the
s t a t e a n d p r i v a t e i n s u r e r s ( f o r e x a m p l e , i n m e d i c a l t r e a t m e n t for v i c t i m s
o f a u t o m o b i l e a c c i d e n t s ) , a n d s o f o r t h . S e c o n d , collective c o n s u m p t i o n
has b e e n reseated as p a r t of a m o r e general denationalization of t h e state
( s e e c h a p t e r 5 ) . W i t h a d e c e n t r a l i z a t i o n a n d d e c o n c e n t r a t i o n o f s t a t e ser-
v i c e s , t h e r e i s n o w g r e a t e r s c o p e for l o c a l a n d r e g i o n a l v a r i a t i o n s a n d for
experimentation c o m p a r e d with the heyday of the K W N S . Third, there
is a shift in t h e g o v e r n a n c e of c o l l e c t i v e c o n s u m p t i o n w i t h i n c r e a s e d
reliance on public-private partnerships, multi-agency cooperation, and
p a r t i c i p a t i o n o f t h e t h i r d sector. F o u r t h , t h e p r o d u c t i o n p r o c e s s a n d t h e
wage relation have been reorganized in line with prevailing post-Fordist
norms. Thus we can observe m o r e flexible labour markets, m o r e flexible
w o r k i n g c o n d i t i o n s , m o r e d i f f e r e n t i a t e d p r o d u c t s a n d services, m o r e p e r -
f o r m a n c e targets, m o r e b e n c h m a r k i n g , a n d so forth. A n d , fifth, t h e r e is
a t r e n d towards using collective c o n s u m p t i o n to p r o m o t e the transition
to a g l o b a h z i n g , k n o w l e d g e - b a s e d e c o n o m y . This is s e e n in c h a n g i n g
p u b l i c p r o c u r e m e n t policies, u s e of I C T s - i n c l u d i n g t h e I n t e r n e t - for
d e m o n s t r a t i o n a s well a s efficiency p u r p o s e s , t h e p r o m o t i o n o f best p r a c -
tice, a n d s o on. I n this w a y c o l l e c t i v e c o n s u m p t i o n i s explicitly used t o
p r o m o t e systemic and/or structural competitiveness.
I will n o w i l l u s t r a t e t h e s e c h a n g e s f r o m t h e f i e l d o f e d u c a t i o n . W h i l e
education obviously and necessarily had a key economic role in repro-
ducing the labour force in the period of Atlantic Fordism and the K W N S ,
it also h a d m a j o r p a r a l l e l roles in t h e d e v e l o p m e n t a n d e x p a n s i o n of a
m a s s w e l f a r e state b a s e d o n n a t i o n a l citizenship. I n stylized t e r m s t h a t
w e r e n e v e r fully m a t c h e d i n reality, w e c a n say t h a t e d u c a t i o n w a s
expected to p r o m o t e equality of access a n d opportunity, to create the
basis for a t a l e n t e d a n d j u s t ' m e r i t o c r a c y ' t h a t w o u l d u n d e r m i n e i n h e r -
 Social Reproduction and the Workfare State 163

ited class a n d status s t r u c t u r e s , t o c r e a t e , codify a n d d i s s e m i n a t e a s h a r e d

national identity and culture a p p r o p r i a t e to a universal a n d solidaristic
welfare state, a n d to develop k n o w l e d g e a b l e a n d critical citizens able and
willing t o p a r t i c i p a t e i n a n e x p a n d i n g p u b l i c s p h e r e a s well a s a m a s s
plebiscitary democracy. This was reflected in t h e prolongation of the
period that children and young people spent in compulsory education
a n d i n t h e d e v e l o p m e n t ( a c c e l e r a t i n g i n t h e 1960s a n d 1970s) o f s t a t e -
sponsored and state-funded mass further and higher education. Whilst
t h e g r o w t h o f m a s s h i g h e r e d u c a t i o n w a s clearly r e l a t e d t o t h e task o f
training the technical and professional labour forces d e e m e d appropri-
ate t o a F o r d i s t e c o n o m y , K W N S a n d m a s s society, i t w a s also justified
in terms of the right to continue one's education in the field of one's
c h o i c e t o t h e h i g h e s t l e v e l o n e c o u l d a t t a i n . A d u l t e d u c a t i o n i n this
p e r i o d w a s l i k e w i s e still s t r o n g l y l i n k e d t o a w i d e r d e m o c r a t i c p r o j e c t t o
p r o m o t e citizenship a n d solidarity r a t h e r t h a n t o d e v e l o p h u m a n capital.
T h e e x p a n s i o n o f m a s s e d u c a t i o n w a s also i n t e n d e d t o c o m p e n s a t e for
e c o n o m i c , social a n d r e g i o n a l i n e q u a l i t i e s a n d h e n c e h a d a r o l e i n social
redistribution. In short, education played a key role in the institutional-
ized c o m p r o m i s e u n d e r p i n n i n g A t l a n t i c F o r d i s m . M o r e o v e r , w h e r e t h e
a c t u a l d e v e l o p m e n t a n d o p e r a t i o n o f e d u c a t i o n d i d n o t fully m a t c h this
m o d e l , its f a i l u r e t o d o s o w a s s t r o n g l y criticized i n t e r m s o f t h e h e g e -
m o n i c K W N S values of e c o n o m i c growth, equality of opportunity and
national integration.
T h e e c o n o m i c , p o l i t i c a l a n d social crises in/of A t l a n t i c F o r d i s m ( s e e
c h a p t e r 3 ) w e r e reflected i n t h e e d u c a t i o n s y s t e m t o o . O n t h e o n e side,
t h e r e w a s a n i n c r e a s i n g d i s q u i e t i n b u s i n e s s a n d s t a t e circles a b o u t t h e
failure o f p u p i l s , t e a c h e r s a n d s c h o o l s , t h e g r o w i n g ' m i s m a t c h ' b e t w e e n
educational outputs and the changing needs of industry and the wider
e c o n o m y , t h e f a i l u r e s o f 'big s c i e n c e ' , t h e i n a d e q u a t e r e t u r n o n p u b l i c
investment in education and the growth of graduate unemployment as
u n e m p l o y m e n t m o r e g e n e r a l l y i n c r e a s e d . ' ' A n d , o n t h e o t h e r s i d e , faculty
members b e g a n to turn from a professional ethos to a more trade u n i o n
mentality and student m o v e m e n t s protested against the corporate 'edu-
cation factory' as well as against m o r e general features of Fordist m a s s
society. T h e crisis i n e d u c a t i o n w a s e v e n t u a l l y r e s o l v e d d i s c u r s i v e l y
t h r o u g h a g r o w i n g h e g e m o n y o f a c c o u n t s t h a t cast e d u c a t i o n a l r e f o r m
i n t e r m s o f e c o n o m i c i m p e r a t i v e s s u c h a s t h e n e e d for m o r e t e c h n i c a l
a n d v o c a t i o n a l e d u c a t i o n , for e n h a n c e d skills, creativity, f l e x i b i l i t y a n d
e n t e r p r i s e o n t h e p a r t o f s t u d e n t s , a n d for g r e a t e r a t t e n t i o n t o t h e n e w
demands of international competition and the knowledge-based
economy on the part of university administrators, teachers and
r e s e a r c h e r s . T h e c o n t r i b u t i o n s o f e d u c a t i o n t o social w e l f a r e a n d
national citizenship roles were increasingly subordinated to the pur-
 164 Social Reproduction and the Workfare State

p o r t e d functions o f e d u c a t i o n i n p r e p a r i n g t h e b e a r e r s o f h u m a n c a p i t a l
to p a r t i c i p a t e in a lifelong l e a r n i n g s o c i e t y as well as in r e n e w i n g
i n t e l l e c t u a l c a p i t a l (or t h e k n o w l e d g e b a s e ) for t h e k n o w l e d g e - b a s e d
e c o n o m y . T h e d e m o c r a t i c f u n c t i o n o f e d u c a t i o n i n t h e K W N S h a s like-
w i s e b e e n t r a n s f o r m e d i n t o o n e o f r e d u c i n g social e x c l u s i o n t o i n c r e a s e
e m p l o y a b i l i t y a n d m o b i l i z e s c a r c e skills. B o t h a s p e c t s o f this r e c a s t i n g o f
t h e functions o f e d u c a t i o n e m p h a s i z e t h e e c o n o m i c r e t u r n s t o p u b l i c
investment in education ('human resource development') and the need
for efficiency, v a l u e f o r m o n e y a n d p u b l i c a c c o u n t a b i l i t y . I n t h e w o r d s o f
t h e U K ' s D e p a r t m e n t for E d u c a t i o n a n d E m p l o y m e n t (since r e n a m e d
a s t h e D e p a r t m e n t for E d u c a t i o n a n d Skills), ' l e a r n i n g i s t h e k e y t o
p r o s p e r i t y ' ( D f E E 1998).
G r e e n s u m m a r i z e s t h e c h a n g e s well i n i d e n t i f y i n g t w o t r e n d s :

Firstly, it was increasingly the case that where education was identified with
the national interest, as it has been repeatedly in the rhetoric of all western
governments in the 1980s and 1990s, this was in terms of the national
economy and economic competitiveness, and not in terms of citizenship
and national cohesion. Secondly, among some of the older nation states,
there was a sense in which education was no longer so explicitly part of
the cultural process of nation-building.... As western countries, some-
what reluctantly, began to acknowledge the growing diversity and cultural
pluralism of their populations, they found themselves uncertain of what
their nationality meant and what kind of citizens should be produced by
their schools. (1997; 142,143; cf. Marginson 1999: 27)

T h i s t r a n s f o r m a t i o n c a n also b e p e r i o d i z e d . T h e initial crisis in/of

Fordism p r o m p t e d a critique of e d u c a t i o n as faihng to meet t h e n e e d s
o f a c h a n g i n g e c o n o m y a n d r e d e f i n e d l a b o u r m a r k e t . T h i s w a s associ-
ated with an increased emphasis on inculcating flexibility and adapt-
ability a s a s h o r t - t e r m r e s p o n s e t o t h e v a g a r i e s o f t h e b u s i n e s s cycle a n d
g r e a t e r volatility i n t h e l a b o u r m a r k e t ( R o b i n s a n d W e b s t e r 1989). F l e x -
ibility a n d f l e x i b l e l e a r n i n g w e r e also l i n k e d t o o r g a n i z a t i o n a l c h a n g e ,
especially with the rise of o p e n a n d distance learning e n a b l e d by n e w
ICTs and new methods of context-situated and problem-oriented teach-
ing a n d l e a r n i n g . L a t e r , t h e r e w a s a b r o a d e r e m p h a s i s o n t h e r o l e o f e d u -
c a t i o n i n p r o m o t i n g t h e globalizing, k n o w l e d g e - b a s e d e c o n o m y t h r o u g h
the d e v e l o p m e n t of h u m a n capital. This is linked to growing emphasis
on t h e certification of t r a n s f e r a b l e as well as specific skills in s c h o o l s ,
p o s t - c o m p u l s o r y e d u c a t i o n a n d o n - t h e - j o b t r a i n i n g . T r a i n i n g a n d lifelong
l e a r n i n g a r e n o w a c e n t r a l c o m p o n e n t of e c o n o m i c as well as social
policy i n all a d v a n c e d capitalist e c o n o m i e s a n d a r e t i e d t o t h e g r o w i n g
c o n s e n s u s t h a t successful c o m p e t i t i o n d e p e n d s o n b u i l d i n g t h e k n o w l -
edge base and h u m a n capital.
 Social Reproduction and the Workfare State 165

T t i e s e t r e n d s a r e e v i d e n t at all levels of e d u c a t i o n f r o m s c h o o l s
through further and higher education to on-the-job training and career-
l i n k e d lifelong l e a r n i n g a n d t h e n c e t o ' u n i v e r s i t i e s o f t h e t h i r d a g e ' for
older p e o p l e . A c r o s s - n a t i o n a l s u r v e y o f g e n e r a l d i s c o u r s e s a n d p r o p o s -
als f o r e d u c a t i o n a l r e f o r m h a s i d e n t i f i e d a n e w o r t h o d o x y b a s e d o n :

(1) improving national economies by tightening the connection between

schooling, employment, productivity, and trade; (2) enhancing student out-
comes in employment-related skills and competencies; (3) attaining more
direct control over curriculum content and assessment; (4) reducing the
costs to government of education; and (5) increasing community input
to education by more direct involvement in school decision-making and
pressure of market choice. (Carter and O'Neill 1995, summarized by Ball
1998:122)

Schools a r e n o w e x p e c t e d t o e n a b l e c h i l d r e n t o b e c o m e e n t e r p r i s i n g s u b -
jects a n d d e v e l o p t h e i r p e r s o n a l skills a n d c a p a c i t y for t e a m w o r k i n g .
T h e y a r e also e x p e c t e d t o p r o v i d e t h e basis for t h e t r a n s i t i o n t o w o r k
a n d t o f o r g e c l o s e r l i n k s w i t h f u t u r e e m p l o y e r s . T h i s i s reflected i n a p r o -
liferation of p r o g r a m m e s to i n t e g r a t e e d u c a t i o n a n d work t h r o u g h m o r e
vocational training, partnerships, work experience, training credits, a n d
so on. L i n k e d to this is the extension of the new managerialism and audit
c u l t u r e i n t o s c h o o l s (as well a s u n i v e r s i t i e s ) w i t h its e m p h a s i s o n q u a s i -
m a r k e t s , i n t e r n a l cost c e n t r e s , p e r f o r m a t i v i t y , t a r g e t s , b e n c h m a r k i n g , staff
a p p r a i s a l , etc. ( C l a r k e a n d N e w m a n 1997; P o w e r 1997).
The tightened connection b e t w e e n schooling, employment, p r o d u c -
tivity a n d t r a d e i s r e f l e c t e d i n a c r o s s - n a t i o n a l r e o r i e n t a t i o n o f t h e n o t i o n
o f skill, w i t h i n c r e a s i n g e m p h a s i s o n k e y skills, l i f e l o n g l e a r n i n g a n d
employability, as technology, corporate restructuring and volatile
m a r k e t s a r e b e l i e v e d t o h a v e e n d e d t h e F o r d i s t f a n t a s y o f j o b s for life
( L a u d e r e t a l 2 0 0 1 ) . E d u c a t i o n has b e c o m e i n t e g r a t e d i n t o t h e w o r k -
farist p r o j e c t t h a t d o w n g r a d e s t h e K e y n e s i a n s t a t e ' s c o m m i t m e n t t o full
e m p l o y m e n t a n d n o w e m p h a s i z e s its c o n t r i b u t i o n t o c r e a t i n g c o n d i t i o n s
f o r full e m p l o y a b i l i t y . T h u s r e s p o n s i b i l i t y for b e c o m i n g e m p l o y a b l e i s
d e v o l v e d t o i n d i v i d u a l m e m b e r s o f t h e l a b o u r force, w h o s h o u l d a c q u i r e
t h e i n d i v i d u a l skills, c o m p e t e n c i e s , f l e x i b i l i t y , a d a p t a b f l i t y a n d p e r s o n a l
d i s p o s i t i o n s t o e n a b l e t h e m t o c o m p e t e for j o b s i n n a t i o n a l a n d g l o b a l
l a b o u r m a r k e t s . T h e y m a y b e l a r g e l y r e s p o n s i b l e for this a s e n t e r p r i s i n g
i n d i v i d u a l s i n v e s t i n g i n t h e i r o w n h u m a n c a p i t a l o r a s e q u a l citizens e n t i -
tled t o s u p p o r t f r o m t h e s t a t e a n d social p a r t n e r s t o i m p r o v e t h e i r skills.
I n all cases t h e r e i s i n c r e a s i n g c o o p e r a t i o n b e t w e e n colleges, u n i v e r s i t i e s
and other learning providers and the world of work. Thus employers
and practitioners are involved in curriculum development, m a n a g e r s
 166 Social Reproduction and the Workfare State

are d r a w n into educational governance and agenda-setting, mobility

between the academy and non-academic worlds is encouraged, and
colleges a n d universities deliver lifelong l e a r n i n g t h r o u g h a d v a n c e d
professional programmes, continuing professional development, part-
time, evening, and distance teaching, remedial and second-chance
courses, a n d so on ( T e t c h i e r 1999: 8 5 ) .
N o t w i t h s t a n d i n g this c r o s s - n a t i o n a l p o l i c y d i s c o u r s e c o n v e r g e n c e ,
t h e r e a r e still m a r k e d differences i n t a k e - u p a n d i m p l e m e n t a t i o n .
L a u d e r , e t al. (2001) r e p o r t , for e x a m p l e , t h a t , w h e r e e c o n o m i e s w e r e
d o m i n a t e d by a belief t h a t t h e f u t u r e lay in a p o s t - i n d u s t r i a l s e r v i c e
e c o n o m y , t h e r e w a s a p o l a r i z a t i o n b e t w e e n e d u c a t i o n a n d t r a i n i n g for
h i g h - s k i l l e d elites a n d for a flexible, low-skilled service s e c t o r . T h e l a t t e r
sector also h a d relatively low i n v e s t m e n t a n d g e n e r a t e d o u t p u t m o r e
t h r o u g h long working hours t h a n increasing productivity. Conversely,
w h e r e m a n u f a c t u r i n g w a s still a c c o r d e d a k e y r o l e i n a c c u m u l a t i o n
s t r a t e g i e s , t h e state e m p h a s i z e d i n t e r m e d i a t e skills a n d t h e n e e d for e d u -
c a t i o n a n d t r a i n i n g t o link i n d u s t r y a n d services. T h i s w a s c o u p l e d with
h i g h capital i n v e s t m e n t t o h a r n e s s skills for a h i g h p r o d u c t i v i t y e c o n o m y
T h e U S A a n d U K e x e m p l i f y t h e first m o d e l ; t h e s e c o n d i s i l l u s t r a t e d b y
Germany.'
Turning m o r e directly to further a n d higher education, t h e r e has b e e n
a g r e a t e m p h a s i s o n shifting u n i v e r s i t y t e a c h i n g a n d r e s e a r c h f r o m its
ivory-towered intellectual isolation back into continuous contact with the
e c o n o m y , t h e state a n d t h e c o m m u n i t y a s vital c o - p r o d u c e r s a n d con-
s u m e r s of useful k n o w l e d g e . T h i s is e s p e c i a l l y clear in t e c h n o l o g y , t h e sci-
e n c e s a n d m e d i c i n e , a n d h a s also p e n e t r a t e d t h e social sciences, s o t h a t i t
i s n o t m e r e l y g r a d u a t e s b u t faculty m e m b e r s t h e m s e l v e s w h o a r e e x p e c t e d
to d e v e l o p extensive links with users in industry, business, the professions,
g o v e r n m e n t a n d local c o m m u n i t i e s . T h e r e i s g r o w i n g e m p h a s i s o n e x t e r -
nal f u n d - r a i s i n g , p a t e n t i n g , t e c h n o l o g y t r a n s f e r , r e s e a r c h p a r k s , c o m m e r -
cial spin-offs, s c i e n c e a n d t e c h n o l o g y p a r k s , i n c u b a t o r s , c o n s u l t a n c y
services - a m o u n t i n g to t h e e m e r g e n c e of a v e r i t a b l e ' a c a d e m i c c a p i t a l -
i s m ' i n liberal e c o n o m i e s t h a t e n c o u r a g e s e n t r e p r e n e u r i a l u n i v e r s i t i e s a n d
t r a n s f o r m s faculty m e m b e r s i n t o e n t e r p r i s i n g b e a r e r s o f i n t e l l e c t u a l
c a p i t a l ( S l a u g h t e r a n d L e s l i e 1997). T h i s c h a n g e w a s e n c o u r a g e d i n t h e
U S A ( t h e p r i n c i p a l c h e e r l e a d e r for t h e k n o w l e d g e - b a s e d e c o n o m y )
t h r o u g h c h a n g e s i n f e d e r a l f u n d i n g for r e s e a r c h , e n a b l i n g u n i v e r s i t i e s t o
k e e p t h e i n t e l l e c t u a l p r o p e r t y i n t h e i r discoveries, a s well a s t h r o u g h t h e
m o r e general extension of the scope and duration of intellectual property
rights. U n i v e r s i t i e s a r e also e n c o u r a g e d t o c o m m e r c i a l i z e t h e i r r e s e a r c h .
T h i s w a s i n t e n d e d t o e n c o u r a g e a c a d e m i c e n t r e p r e n e u r i a l i s m , t o subsi-
d i z e c o r p o r a t e R & D , a n d t o facilitate r e g i o n a l e c o n o m i c d e v e l o p m e n t .
Similar p a t t e r n s can be f o u n d in o t h e r university systems.
 Social Reproduction and the Workfare State 167

O v e r a l l , i n t h e w o r d s o f E t z k o w i t z , a leading r e s e a r c h e r o n t h e ' t r i p l e
helix' i n t e r f a c e b e t w e e n u n i v e r s i t y , b u s i n e s s a n d t h e s t a t e :

'Virtually every country that has a university, whether it was founded for
reasons of education or prestige, is now attempting to organize knowledge-
based economic development As the university becomes more depen-
dent upon industry and government, so have industry and government
become more dependent upon the university. In the course of the 'second
academic revolution' a new social contract is being drawn up between the
university and the wider society, in which pubhc funding for the university
is made contingent upon a more direct contribution to the economy.
(Etzkowitz 1994: 149,151)

Two apparently contrary but c o m p l e m e n t a r y strategies are being

adopted here. On the o n e hand, the state is asserting the i m p o r t a n c e of
education in t h e realization of national economic interests; and, on the
other hand, it is conceding greater a u t o n o m y to educational institutions
i n h o w t h e y s e r v e t h e s e i n t e r e s t s ( M a r g i n s o n 1999). B u t this a u t o n o m y
is being exercised in the context of the h e g e m o n y of the k n o w l e d g e -
b a s e d a c c u m u l a t i o n strategy, t h e i n c r e a s i n g p a r t i c i p a t i o n o f t h e b e a r e r s
of this strategy in the shaping of education mission statements and the
i n c r e a s i n g financial d e p e n d e n c e o f f u r t h e r a n d h i g h e r e d u c a t i o n o n
third-party revenues deriving neither from t h e state n o r from students.
T h e first s t r a t e g y ' i n v o l v e s a r e a f f i r m a t i o n of t h e s t a t e f u n c t i o n s of
education as a "public good", while the second subjects e d u c a t i o n to t h e
disciplines o f t h e m a r k e t a n d t h e m e t h o d s a n d v a l u e s o f b u s i n e s s a n d
r e d e f i n e s it as a c o m p e t i t i v e p r i v a t e g o o d ' ( M a r g i n s o n 1999: 122).
Together, these strategies serve to reinforce the ecological d o m i n a n c e of
accumulation o v e r t h e educational system.
A g a i n , t h e r e a r e d i f f e r e n t r o u t e s t o this r e c o n f i g u r a t i o n . I n t h e U S A ,
u n i v e r s i t i e s h a v e l o n g b e e n e n c o u r a g e d t o o p e r a t e a s b u s i n e s s firms a n d
t o b e e n t r e p r e n e u r i a l . P r e s s u r e s i n this d i r e c t i o n h a v e n o n e t h e l e s s b e e n
r e i n f o r c e d f r o m t h e 1980s o n w a r d s w i t h t h e r e s u l t t h a t m a n y u n i v e r s i -
ties h a v e r e o r i e n t e d t h e i r activities f r o m t e a c h i n g t o w a r d s r e s e a r c h t o
g e n e r a t e p a t e n t s a n d r o y a l t i e s . M o r e o v e r , b e c a u s e t h e y m u s t still t e a c h ,
t h i s p r o m p t s t h e m t o c u t c o s t s a n d b o o s t efficiency b y s t a n d a r d i z i n g
a n d c o m m o d i t i z i n g e d u c a t i o n , c a s u a l i z i n g a n d flexibilizing i n t e l l e c t u a l
labour, and m e r c h a n d i z i n g on-line lecture courses. In E u r o p e , t h e E u r o -
pean R o u n d Table is promoting a neoliberal agenda that sees education
a n d t r a i n i n g a s ' s t r a t e g i c i n v e s t m e n t s vital for t h e f u t u r e success o f i n d u s -
try' and has proposed m e a s u r e s to strengthen t h e comparatively weak
influence of business on the curriculum and adapt it to the needs of
industry t h r o u g h the d e v e l o p m e n t of private-public partnerships
 168 Social Reproduction a n d the Workfare State

( L e v i d o w 2 0 0 1 ) . T h i s i s e n c o u r a g e d b y t h e E U itself i n t h e h o p e o f
increasing the international m a r k e t share of EU education ( E u r o p e a n
U n i o n 1999).

6. Concluding Remarks

I n o w h i g h l i g h t six b r o a d p r e l i m i n a r y c o n c l u s i o n s a b o u t t h e p o l i t i c a l
e c o n o m y o f w e l f a r e r e s t r u c t u r i n g - c o n c l u s i o n s t h a t will n e e d t o b e revis-
i t e d after I h a v e c o n s i d e r e d t h e r e s c a l i n g of e c o n o m i c a n d social policy
a n d c h a n g e s i n its g o v e r n a n c e . First, s t a t e i n t e r v e n t i o n i n r e l a t i o n t o
social r e p r o d u c t i o n displays t w o m a j o r c h a n g e s c o m p a r e d w i t h t h e
p e r i o d o f t h e K W N S : (1) t h e use o f social policy t o e n h a n c e t h e f l e x i b i l -
ity o f l a b o u r m a r k e t s a n d t o c r e a t e f l e x i b l e , e n t e r p r i s i n g w o r k e r s s u i t e d
t o a g l o b a l i z i n g , k n o w l e d g e - b a s e d e c o n o m y ; a n d (2) t h e r e d e s i g n a n d
r e o r g a n i z a t i o n o f social policy t o p u t d o w n w a r d p r e s s u r e o n t h e social
w a g e , w h i c h i s n o w r e g a r d e d m o r e a s a cost o f i n t e r n a t i o n a l p r o d u c t i o n
than as a source of domestic d e m a n d . The first tendency has been
p u r s u e d fairly systematically, especially w h e n t h e social w a g e i s s e e n a s
an i n v e s t m e n t in t h e collective l a b o u r e r , i.e., in a p o o l of skilled, k n o w l -
e d g e a b l e a n d creative w o r k e r s w h o can jointly contribute to the intel-
lectual c o m m o n s , rather than as an investment in individual h u m a n
c a p i t a l , w h e r e i t i s i n i n d i v i d u a l s ' r a t i o n a l self-interest t o i n v e s t i n
e d u c a t i o n a n d t r a i n i n g t o m a x i m i z e their f u t u r e e a r n i n g s . T h e s e c o n d
t e n d e n c y has b e e n limited by t h e material, institutional a n d political
limits t o r e t r e n c h m e n t a n d , s h o r t o f t o t a l p r i v a t i z a t i o n , w h i c h i s largely
c o n f i n e d t o societies w h e r e a n e o l i b e r a l r e g i m e shift h a s o c c u r r e d ,
t h e e m p h a s i s h a s b e e n o n cost c o n t a i n m e n t r a t h e r t h a n r a d i c a l c u t s .
S e c o n d , t h e r e i s significant v a r i a t i o n i n t h e e m e r g i n g w e l f a r e -
w o r k f a r e m i x a n d t h e f o r m s i n w h i c h i t i s d e l i v e r e d f r o m case t o case. I n
part, this reflects real p a t h - d e p e n d e n t differences i n political t r a d i t i o n s
a n d i n s t i t u t i o n a l s t r u c t u r e s t h a t affect w e l f a r e r e g i m e s a n d i n t h e r e s u l t -
ing c h a l l e n g e s t h a t n o w face t h e m . I n p a r t , i t reflects t h e r e s u l t s o f trial-
a n d - e r r o r e x p e r i m e n t a t i o n a n d / o r t h e willingness o f s t a t e m a n a g e r s t o
i m p o r t policy m o d e l s f r o m o t h e r levels o f a n i n c r e a s i n g l y m u l t i - t i e r e d
p o l i t i c a l s y s t e m a n d / o r f r o m a b r o a d . I t also reflects, o f c o u r s e , different
b a l a n c e s o f forces. N o n e t h e l e s s , i t i s w o r t h w h i l e a t t e m p t i n g t o identify
b r o a d p o l i c y sets l i n k e d t o d i f f e r e n t a c c u m u l a t i o n r e g i m e s a n d specify
the p o l i c y m k a s s o c i a t e d with a g i v e n s t a t e .
Third, it would be premature to take the ascendancy and prevalence
o f n e o l i b e r a l i s m i n t h e e a r l y 1990s a s e v i d e n c e o f t h e l o n g - t e r m r e p r o -
d u c i b i l i t y of n e o l i b e r a l w o r k f a r e . F o r this a s c e n d a n c y r e f l e c t e d a specific
c o n j u n c t u r e i n w h i c h t h r e e different t y p e s o f c h a n g e - n e o l i b e r a l s y s t e m
 Social Reproduction and the Workfare State 169

Table 4.1 Forms of neoliberalism

Neoliberal policy M o d u l a t i o n of policies to i m p r o v e

adjustments p e r f o r m a n c e of an a c c u m u l a t i o n r e g i m e
and mode of regulation

Neoliberal regime shift P a r a d i g m shift in a c c u m u l a t i o n a n d

regulation, introducing new economic
and political principles

Neoliberalism as radical N e o - l i b e r a l i s m as s t r a t e g y for m o v i n g f r o m

system transformation s t a t e socialism to capitalist social
formation

t r a n s f o r m a t i o n i n p o s t - s o c i a l i s t societies, t h e n e o l i b e r a l r e g i m e shift i n
t h e a n g l o p h o n e d e m o c r a c i e s a n d n e o l i b e r a l policy a d j u s t m e n t s i n ' m o d -
e r n i z i n g ' c o r p o r a t i s t a n d statist r e g i m e s - c o m b i n e d t o l e n d s o m e
c r e d e n c e t o wild n e o l i b e r a l t r i u m p h a l i s t f a n t a s i e s ( s e e t a b l e 4.1). T h i s
c o n j u n c t u r e i s a l r e a d y o n t h e w a n e a s a r e s u l t o f disillusion w i t h t h e p o s t -
socialist e x p e r i e n c e a n d t h e s h o r t - t e r m n a t u r e o f policy a d j u s t m e n t s i n
o t h e r r e g i m e s . M o r e o v e r , e v e n d u r i n g this h i g h p o i n t o f t h e n e o l i b e r a l
phase, there was a greater r u p t u r e in rhetoric than in practice. T h e con-
t r a d i c t i o n s o f t h e n e o l i b e r a l p o l i c y a r e n o w b e i n g e x p o s e d a s t h e y lose
t h e p r o t e c t i v e a n d mystifying p e n u m b r a o f o t h e r f o r m s o f n e o l i b e r a l i s m .
This is being reflected in the reversal of s o m e e l e m e n t s of neoliberalism
e v e n i n n e o l i b e r a l r e g i m e s - a l t h o u g h this d o e s n o t e l i m i n a t e t h e p a t h -
d e p e n d e n t legacies of neoliberal errors. In addition, t h e absence of
concerted opposition to the most radical forms of neoliberal workfare
is no g u a r a n t e e of its o v e r a l l f u n c t i o n a l i t y for t h e capitalist e c o n o m y , as
o p p o s e d t o its efficacy i n d e s t a b i l i z i n g p o l i t i c a l o p p o s i t i o n t o t h e o v e r a l l
neoliberal project. This is linked to the need to analyse the contradictory
f u n c t i o n s o f t h e w e l f a r e state, since t h e n e e d t o b a l a n c e d i f f e r e n t f u n c -
t i o n s i n a s p a t i o - t e m p o r a l f i x limits t h e v a r i a t i o n s t h a t a r e p o s s i b l e i n t h e
longer term. For the needs of capital in general reassert themselves
t h r o u g h t h e c o n t r a d i c t i o n s a n d o s c i l l a t i o n s o f e c o n o m i c a n d social policy
a s well a s t h r o u g h t h e a d j u s t m e n t o f c o r p o r a t e s t r a t e g i e s .
F o u r t h , a m o n g t h e p r e c o n d i t i o n s for r e p r o d u c i n g a w e l f a r e / w o r k f a r e
r e g i m e is a specific i n s t i t u t i o n a l fix t h a t r e s o l v e s , w i t h i n a g i v e n s p a t i o -
temporal fix, the contradictions and strategic dilemmas involved in reg-
u l a r i z i n g c a p i t a l a s a social r e l a t i o n a n d m a n a g i n g its a l w a y s p r o b l e m a t i c
c o n n e c t i o n s with t h e state a n d t h e wider political system. W h e r e a s t h e
p r i m a r y scale o f r e g u l a t i o n i n t h e K W N S w a s t h e n a t i o n a l , t h e r e i s a rel-
a t i v i z a t i o n o f s c a l e i n t h e e m e r g i n g S W P R - e s p e c i a l l y i n its n e o l i b e r a l
 170 Social Reproduction and the Workfare State

guise. I n d e e d , so p r o b l e m a t i c is this, t h a t it is unlikely t h a t a p u r e n e o l i b -

e r a l w o r k f a r e r e g i m e c o u l d e v e r b e c o m e ' s t a b l e ' . A t l e a s t t w o issues a r e
a t s t a k e h e r e . F i r s t , t h e r e a r e d o u b t s a b o u t such a r e g i m e ' s c a p a c i t y t o
i n s t i t u t i o n a l i z e a ' s c a l a r selectivity' i n w h i c h r e s i s t a n c e t o w o r k f a r e m e a -
s u r e s i s m a r g i n a l i z e d f r o m t h e c o r e d e c i s i o n - m a k i n g sites a n d b e c o m e s
s o f r a g m e n t e d a n d d i s p e r s e d a s t o b e l a r g e l y ineffective. E v e n t h e
a b s e n c e o f r e s i s t a n c e d o e s n o t a s s u c h g u a r a n t e e success. W o r k f a r e
i n v o l v e s m o r e t h a n s i m p l y m a k i n g t h e p o o r w o r k ; i t i s also a b o u t m a k i n g
flexible l a b o u r m a r k e t s w o r k . T h e l a t t e r t a s k r e q u i r e s c o o r d i n a t e d a c t i o n
across d i f f e r e n t scales d e p l o y i n g a r a n g e o f m a r k e t a n d n o n - m a r k e t m e a -
sures. S e c o n d , d e s p i t e its i n t e r n a l c o n t r a d i c t i o n s , n e o l i b e r a l w o r k f a r e
t h r e a t e n s o t h e r a p p r o a c h e s t o w o r k f a r e . T h u s , a s w e l l a s local r e s i s t a n c e
i n t h e s o c i e t i e s m o s t c o m m i t t e d t o t h e n e o l i b e r a l p r o j e c t , t h e r e i s also
national and supranational resistance to neoliberalism a m o n g states
c o m m i t t e d to o t h e r m o d e l s as they try to avoid t h e regulatory race to
the b o t t o m linked to the neoliberal project.
Fifth, t h e n e o l i b e r a l a p p r o a c h t o w o r k f a r e p r i o r i t i z e s j u s t o n e m o m e n t
o f t h e c o n t r a d i c t i o n s a n d d i l e m m a s a s s o c i a t e d w i t h c a p i t a l a s a social
r e l a t i o n ( s e e c h a p t e r 1). It r e g a r d s w a g e s p r i m a r i l y as a cost of p r o d u c -
tion a n d neglects the issue of d e m a n d . It regards labour-power primar-
ily a s o n e s u b s t i t u t a b l e f a c t o r o f p r o d u c t i o n a m o n g o t h e r s a n d n e g l e c t s
t h e critical r o l e of l a b o u r - p o w e r as a s o u r c e of a d d e d v a l u e a n d c r e a t i v -
ity. I t r e g a r d s m o n e y p r i m a r i l y f r o m t h e v i e w p o i n t o f i n t e r n a t i o n a l c u r -
rency flows and neglects the continuing contributions that control over
capital flows can play in economic m a n a g e m e n t . It regards capital pri-
marily in t e r m s of m o b i l e i n v e s t m e n t capital in a space of flows r a t h e r
t h a n a s a set o f c o n c r e t e i n v e s t e d assets t o b e v a l o r i z e d i n p a r t i c u l a r
places. A n d i t a d o p t s a s h o r t - t e r m m o d e o f e c o n o m i c c a l c u l a t i o n t o t h e
d e t r i m e n t o f l o n g e r - t e r m a s p e c t s o f t h e e c o n o m y i n its i n t e g r a l s e n s e .
W h e r e a s t h e K W N S m a n a g e d f o r s o m e t i m e t o b a l a n c e t h e s e different
m o m e n t s t h r o u g h a distinctive p a t t e r n o f scalar c o o r d i n a t i o n b a s e d
on the national economy and national state, the neoliberal workfare
r e g i m e f i n d s i t h a r d t o r e c o n c i l e t h e s e d i f f e r e n t m o m e n t s o n a n y scale.
This is a n o t h e r illustration of neoliberalism's counterproductive n a t u r e
i n its a t t e m p t s t o d e s t r o y t h e i n s t i t u t i o n a l e m b e d d e d n e s s a n d s p a t i a l -
i n s t i t u t i o n a l f i x e s a s s o c i a t e d w i t h t h e K W N S a n d i n its o p t i m i s t i c belief
in the spontaneous regenerative powers of disembedded m a r k e t forces
f r e e t o o p e r a t e o n a w o r l d scale. I n p a r t i c u l a r , b y d i s m a n t l i n g k e y o r g a n -
i z a t i o n a l a n d i n s t i t u t i o n a l s u p p o r t s o f t h e K W N S , this a p p r o a c h d e n i e s
its a d v o c a t e s access t o p o t e n t i a l f l a n k i n g a n d c o m p l e m e n t a r y m e a -
s u r e s t h a t c o u l d s e r v e t o stabilize a n e o l i b e r a l r e g i m e . I n t h e c o m p l e x
d i a l e c t i c of ' c o n s e r v a t i o n - d i s s o l u t i o n effects', n e o l i b e r a l i s m loses t h e
opportunity to transform the functions of conserved organizations and
If"

Social Reproduction and the Workfare State 171

i n s t i t u t i o n s w i t h i n t h e n e w logic of a m a r k e t - d r i v e n a p p r o a c h . It is h a r d l y
s u r p r i s i n g , t h e r e f o r e , t h a t , o u t s i d e t h e f r a m e w o r k o f social f o r m a t i o n s
c h a r a c t e r i z e d by a n e o l i b e r a l r e g i m e shift, t h e r e is far g r e a t e r e m -
p h a s i s o n r e d e s i g n e d f o r m s o f social p a r t n e r s h i p , a c o n t i n u i n g r o l e for
t h e s t a t e i n m a n a g i n g t h e n e w collective a c t i o n p r o b l e m s i n v o l v e d i n
p r o m o t i n g capital accumulation and reconciling it with the d e m a n d s
o f p o l i t i c a l legitimacy, a n d a g r e a t e r c o n c e r n t o r e c a l i b r a t e e x i s t i n g
institutions to deal with n e w problems rather than to believe that the
m a r k e t can solve them.
Sixth, a n d finally, in t h e s e a r c h for a n e w s p a t i a l - i n s t i t u t i o n a l fix,
n e o l i b e r a l s risk d e p r i v i n g t h e m s e l v e s o f a n A r c h i m e d e a n p o i n t f r o m
w h i c h t o c o o r d i n a t e t h e different scales o f e c o n o m i c , social a n d p o l i t i c a l
actions and to develop compensatory and flanking measures on other
scales i n r e s p o n s e t o c h a n g e s p u r s u e d o n o t h e r levels. This i s a l r e a d y
c o m p l i c a t e d b y t h e r e l a t i v i z a t i o n o f scale, w h i c h m a k e s t h e c o n t r a d i c -
tions a n d d i l e m m a s of an after-Fordist capitalism h a r d e r to m a n a g e
b e c a u s e t h e y a r e also m o r e d i s p e r s e d o v e r t i m e a n d s p a c e . I n o t h e r
e c o n o m i e s , h o w e v e r , t h e r e i s s t r o n g e r c o m m i t m e n t t o a k e y r o l e for t h e
n a t i o n a l s t a t e i n t h i s r e g a r d . T h i s t o o i s r e f l e c t e d i n t h e l i m i t e d diffusion
of the neoliberal model beyond uncoordinated market economies and
t h e c o n t i n u e d i m p o r t a n c e , s u b j e c t t o c o n s e r v a t i o n - d i s s o l u t i o n effects, o f
older welfare regime and production patterns.
 The Political Economy of
State Rescaling

T h e c o n t i n u i n g r e s t r u c t u r i n g of th,e capitalist t y p e of state c a n also

b e r e l a t e d t o t h e overall p r i m a c y o f t h e n a t i o n a l scale i n t h e e r a o f
A t l a n t i c F o r d i s m a n d t h e c u r r e n t r e l a t i v i z a t i o n o f scale a s s o c i a t e d
w i t h the after-Fordist period.' T h e absence of a n y p r i m a r y scale on
w h i c h t h e s t r u c t u r e d c o h e r e n c e o f c a p i t a l a c c u m u l a t i o n a n d social
r e p r o d u c t i o n c a n c u r r e n t l y b e s e c u r e d e x p l a i n s t h e c o n t i n u e d crisis-
t e n d e n c i e s o f t h e capitalist societies i n w h i c h t h e w e l f a r e s t a t e w a s
e m b e d d e d . I t i s also reflected i n c o n t r o v e r s i e s a n d s t r u g g l e s a r o u n d o t h e r
s c a l e s o f e c o n o m i c , p o l i t i c a l a n d social o r g a n i z a t i o n ; a n d a t t e m p t s t o
e s t a b l i s h a p p r o p r i a t e f o r m s o f g o v e r n a n c e for t h e s e scales i n all t h e i r
t a n g l e d c o m p l e x i t y . T h i s c h a p t e r a r g u e s t h a t a p o s t n a t i o n a l o r d e r is
e m e r g i n g t h a t i s m o r e explicitly m u l t i s c a l a r , m u l t i c e n t r i c a n d m u l t i t e m -
poral than the postwar Atlantic Fordist regime. Particular attention is
p a i d t o t h e r e s u r g e n c e o f e n t r e p r e n e u r i a l cities a n d r e g i o n s , t h e d e v e l -
o p m e n t of supranational triadic regimes, the growth of cross-border
regions, the attempt to develop multilevel governance and the claim that
a g l o b a l ( o r a t least w e s t e r n ) s t a t e i s e m e r g i n g . I n e x a m i n i n g t h e p r e -
d o m i n a n t l y n e o l i b e r a l f o r m o f t h i s p o s t n a t i o n a l o r d e r o n a g l o b a l scale,
I also d i s c u s s t h e illogic of g l o b a l i z a t i o n in its n e o l i b e r a l f o r m . I r e l a t e
t h i s t o t h e c o n t i n u i n g s e a r c h for a n e w scale o n w h i c h t h e p o s t n a t i o n a l
o r d e r c o u l d b e r e r e g u l a r i z e d a n d n e w e c o n o m i c a n d social p r o b l e m s
r e s o l v e d . I c o n c l u d e t h a t a c e n t r a l political r o l e r e m a i n s for t h e n a t i o n a l
s t a t e a n d n o t e h o w this differs f r o m t h a t i n t h e p e r i o d o f A t l a n t i c
Fordism.
 The Political Economy of State Rescaling 173

Table 51 Typology of imagined political communities linked to nation-states

Type of Simple Basis of Multiplex Form taken by

nation national community form of nation when
community membership community decomposed

Yolksnation Ethnos Blood ties or Multiethnic 'Melting-pot

naturalization society'

Kultwnation Shared Assimilation, Multicultural Postmodern

culture acculturation play of
identities

Staatsnation Constitutional Test of political Nested 'Dual state' in

patriotism loyalty political given
loyalties to territory or
multi-tiered transnational
government diasporas

1. The National State

We m u s t distinguish b e t w e e n the nation-state a n d t h e national state in

order to avoid the confusions t h a t arise from references to t h e n a t i o n -
s t a t e i n g e n e r a l w o r k o n t h e f u t u r e o f t h e s t a t e . First, ' t e r r i t o r i a l d e l i m i -
t a t i o n a n t e d a t e d t h e policy o f n a t i o n - f o r m a t i o n , a n d t h e l a t t e r , a s a
b l a n k e t p r i n c i p l e , h a s a s y e t n o t b e e n fully r e a l i z e d , w h e r e a s t h e p r i n c i -
p l e o f t e r r i t o r i a l s t a t e h o o d has e s t a b l i s h e d itself w o r l d - w i d e ' ( B r o c k a n d
A l b e r t 1996: 6 ) . S e c o n d , a s B e n e d i c t A n d e r s o n (1991) has a r g u e d , t h e
nation is an 'imagined community'. It emerges from the m u t u a l recog-
nition of large n u m b e r s of persons u n k n o w n to each other on the basis
o f s u p p o s e d l y s h a r e d a t t r i b u t e s t h a t q u a h f y t h e m for m e m b e r s h i p o f t h e
s a m e n a t i o n and, i t s h o u l d b e a d d e d , t h a t d i s t i n g u i s h t h e m f r o m o t h e r
persons w h o are thereby excluded from such membership. These shared
a t t r i b u t e s m a y e s t a b l i s h t h e i m a g i n e d i d e n t i t y of a Volksnation in an e t h -
n o n a t i o n a l state (for e x a m p l e , G e r m a n y ) and t h e r e are m a n y r o u t e s t o
s u c h e t h n i c n a t i o n h o o d a n d s e l f - d e t e r m i n a t i o n ( B a l i b a r 1990; B r u b a k e r
1992; G e l l n e r 1993; M a c L a u g h l i n 2 0 0 1 ) . B u t t h e r e a r e also s t a b l e ( a n d
unstable) territorial states with t w o or m o r e ethnic nations (so-called
multinational states).
In addition to ethnic n a t i o n h o o d , t h e r e are at least t w o o t h e r forms
of nationhood that are linked to state formation and have proved com-
patible with the existence of m o r e t h a n o n e ethnic group or nation within
a n a t i o n a l s t a t e ( s e e t a b l e 5.1). T h e s e a r e a c u l t u r a l n a t i o n {Kulturna-
tion), b a s e d o n a s h a r e d n a t i o n a l c u l t u r e t h a t m a y well b e defined a n d
174 The Political Economy of State Rescaling

actively p r o m o t e d by t h e state itself (for e x a m p l e , F r a n c e ) ; a n d a civic

n a t i o n (Staatsnation), based on p a t r i o t i c c o m m i t m e n t to t h e c o n s t i t u t i o n
a n d belief i n t h e l e g i t i m a c y o f r e p r e s e n t a t i v e g o v e r n m e n t (for e x a m p l e ,
t h e U S A ) . T h e s e t h r e e f o r m s o f n a t i o n h o o d c a n r e i n f o r c e e a c h o t h e r (for
example, D e n m a r k ) , be c o m b i n e d to p r o d u c e relatively stable hybrid
f o r m s o f n a t i o n a l s t a t e (for e x a m p l e , m a i n l a n d B r i t a i n ) o r p r o v o k e c o n -
f l i c t s o v e r t h e p r o p e r basis o f t h e n a t i o n - s t a t e (for e x a m p l e , C a n a d a , N e w
Z e a l a n d ) . P r e s s u r e s m a y also d e v e l o p t o g r a n t significant a u t o n o m y
t o r e g i o n a l l y b a s e d n a t i o n a l m i n o r i t i e s w i t h i n t h e existing t e r r i t o r i a l
b o u n d a r i e s of a n a t i o n a l s t a t e (for e x a m p l e , S p a i n , m a i n l a n d B r i t a i n ) or
t o e s t a b l i s h ' c o n s o c i a t i o n a l ' f o r m s o f g o v e r n m e n t i n w h i c h different
n a t i o n s a r e g u a r a n t e e d a d e q u a t e (or e v e n p r o p o r t i o n a l ) r e p r e s e n t a t i o n
i n t h e e x e r c i s e o f s t a t e p o w e r (for e x a m p l e , B e l g i u m , N e w Z e a l a n d ) .
E v e n i n s t a b l e cases, h o w e v e r , n a t i o n h o o d p r o v i d e s t h e basis for dis-
p l a c i n g c o n t r a d i c t i o n s a n d i n s t i t u t i o n a l i z i n g social e x c l u s i o n w i t h i n t h e
b o u n d a r i e s of a spatio-temporal fix organized a r o u n d the national state
a s well a s b e y o n d its t e r r i t o r i a l b o u n d a r i e s (cf. T o l o l y a n 1991).^ O f p a r -
ticular i m p o r t a n c e h e r e are the multiform p a t t e r n s of gendering nations
a n d ' r a c i a l i z i n g ' n a t i o n a l differences.
Regardless of their corresponding form of nationhood and the extent
t o w h i c h this h a s p r o v e d s t a b l e o r conflictual, t h e states o f i n t e r e s t i n
t h i s s t u d y c a n all be d e s c r i b e d as n a t i o n a l states - t h a t is, as f o r m a l l y
s o v e r e i g n t e r r i t o r i a l states p r e s i d i n g o v e r ' n a t i o n a l ' t e r r i t o r i e s . M o r e o v e r ,
i n s o f a r a s t h e y w e r e i n c l u d e d i n t h e p r i m a r y circuits o f A t l a n t i c F o r d i s m ,
t h e y c a n also b e c h a r a c t e r i z e d a s K e y n e s i a n w e l f a r e n a t i o n a l states. I n
t h i s r e g a r d , t h e y w e r e all subject to similar p r e s s u r e s for c h a n g e as a
result o f t h e e m e r g i n g d y n a m i c o f g l o b a l i z a t i o n a n d r e g i o n a l i z a t i o n i n
d i f f e r e n t f u n c t i o n a l d o m a i n s . T h u s , c o n c e n t r a t i n g solely o n t h e f u t u r e o f
ethnically b a s e d nation-states (whenever they d e v e l o p e d ) or, alterna-
tively, t r e a t i n g all n a t i o n a l states a s i f t h e y w e r e ethnicaUy b a s e d n a t i o n -
states w o u l d d i v e r t a t t e n t i o n f r o m t h e m o r e g e n e r a l a n d i m p o r t a n t issue
o f t h e f u t u r e o f p o s t w a r n a t i o n a l states, e t h n o n a t i o n a l o r not. I t i s
this i s s u e t h a t c o n c e r n s u s h e r e . F o r m s o f n a t i o n h o o d could t h e n b e
i n t r o d u c e d later a s a s e c o n d a r y v a r i a b l e w h e n a t t e n t i o n t u r n e d t o m o r e
detailed analyses of t h e institutional legacies and p a t h - s h a p i n g possibil-
ities o f specific p r o d u c t i o n a n d / o r w e l f a r e r e g i m e s .

2. Crisis in the National Character of the KWNS

I n o w s h o w h o w t h e features of t h e K W N S , as n o t e d in chapter 2, came

t o b e ( s e e n as) c r i s i s - p r o n e i n t h e l a t e 1960s a n d 1970s. A s t h e d i s t i n c -
tiveness of t h e K W N S as a particular type of state often w e n t unrecog-
 The Political Economy of State Rescaling 175

nized, h o w e v e r , t h e s e crises a n d c r i s i s - t e n d e n c i e s w e r e often a t t r i b u t e d

t o a g e n e r i c m o d e r n o r capitalist state. A f t e r n o t i n g t h e c r i s i s - t e n d e n c i e s
a s s o c i a t e d w i t h e a c h o f its f e a t u r e s , I i n d i c a t e h o w t h e y w e r e s o m e t i m e s
c o n d e n s e d i n t o a m o r e f u n d a m e n t a l o r g a n i c crisis affecting t h e K W N S
as a w h o l e .

1 T h e c e n t r a l i t y of t h e s o v e r e i g n s t a t e itself w a s called i n t o q u e s t i o n
w i t h t h e d e v e l o p m e n t o f aUegedly o v e r l o a d e d 'big g o v e r n m e n t ' ,
w h i c h l e d t o a l e g i t i m a c y crisis a s t h e s t a t e n o l o n g e r s e e m e d a b l e t o
g u a r a n t e e full e m p l o y m e n t a n d e c o n o m i c g r o w t h , a n d t o a n e m e r g -
ing f i s c o - f i n a n c i a l crisis t h a t t h r e a t e n e d t o u n d e r m i n e t h e w e l f a r e
state. T h e s e c r i s i s - t e n d e n c i e s w e r e a g g r a v a t e d b y g r o w i n g conflicts
b e t w e e n local states a n d c e n t r a l g o v e r n m e n t , a n d b y t h e crisis o f t h e
international regimes organized u n d e r A m e r i c a n hegemony, such
t h a t t h e y w e r e less a b l e t o s e c u r e t h e c o n d i t i o n s for effective e c o -
n o m i c a n d p o l i t i c a l p e r f o r m a n c e b y n a t i o n a l s t a t e s . T h e crisis o f t h e
postwar international regimes organized under A m e r i c a n hegemony
also u n d e r m i n e d t h e i r c a p a c i t y t o facilitate t h e effective e c o n o m i c
a n d p o l i t i c a l p e r f o r m a n c e o f n a t i o n a l s t a t e s . M o r e generally, t h e
various forms of national state w e r e challenged by increasing migra-
tion, especially i n t o t h e c o r e n a t i o n a l states o f A t l a n t i c F o r d i s m . T h i s
h a s affected all t h r e e f o r m s o f n a t i o n h o o d . First, i t h a s c o n t r i b u t e d
to declining ethnic homogeneity, as inward migration from other
e t h n i c c o m m u n i t i e s led to multiethnic or 'melting-pot' societies
and/or as outward migration created durable transnational diasporas.
S e c o n d , c u l t u r a l h o m o g e n e i t y h a s d e c l i n e d b e c a u s e of a g r o w i n g
plurality of ethnic a n d cultural groups, leading to informal or even
official m u l t i c u l t u r a l i s m ( e s p e c i a l l y i n l a r g e cities) a n d / o r t o t h e rise
of spaces a n d places for a p o s t m o d e r n p l a y of social i d e n t i t i e s . A n d ,
t h i r d , civic c o m m i t m e n t t o t h e n a t i o n a l s t a t e m a y d e c l i n e e i t h e r
t h r o u g h the d e v e l o p m e n t of multi-tiered political loyalties to units
above and below the national state or through identification with
t r a n s n a t i o n a l social m o v e m e n t s .
2 T h e legitimacy o f t h e n a t i o n a l s t a t e h a s also d e c l i n e d t o t h e e x t e n t
t h a t i t i s s e e n t o d i s a p p o i n t t h e e c o n o m i c a n d social e x p e c t a t i o n s g e n -
e r a t e d b y A t l a n t i c F o r d i s m a n d t h e K W N S . F u r t h e r m o r e i t h a s failed
t o m o b i l i z e s u p p o r t for a l t e r n a t i v e a c c u m u l a t i o n strategies, s t a t e p r o -
j e c t s o r h e g e m o n i c visions. I t b e c a m e h a r d e r t o a c h i e v e s u c h official
n a t i o n a l e c o n o m i c o b j e c t i v e s a s full e m p l o y m e n t , s t a b l e p r i c e s ,
economic growth and a manageable balance of payments. This con-
t r i b u t e d t o a loss o f t h e n a t i o n a l e c o n o m y ' s t a k e n - f o r - g r a n t e d n e s s a s
t h e p r i m a r y object o f e c o n o m i c m a n a g e m e n t . T h i s w a s s o m e t i m e s
associated with a resurgence of protectionism to defend the national
176 The Political Economy of State Rescaling

e c o n o m y (or, a t l e a s t , s o - c a l l e d ' s u n s e t ' s e c t o r s a n d t h e i r a s s o c i a t e d

jobs) and/or with a t t e m p t s to establish a wider e c o n o m i c space within
w h i c h t h e e x p a n d e d r e p r o d u c t i o n o f a c c u m u l a t i o n could b e r e n e w e d .
T h e l a t t e r a t t e m p t s c o u l d o c c u r t h r o u g h f o r m a l political m e a n s ( s u c h
as the European Community and European Union) or through more
open economic borders.
3 R e g i o n a l a n d local e c o n o m i e s w e r e increasingly r e c o g n i z e d t o h a v e
their o w n specific p r o b l e m s t h a t c o u l d n o t b e r e s o l v e d e i t h e r t h r o u g h
national m a c r o e c o n o m i c policies or through uniformly imposed
m e s o - o r m i c r o e c o n o m i c policies. T h i s p r o m p t e d d e m a n d s for s p e -
cifically t a i l o r e d a n d t a r g e t e d u r b a n a n d r e g i o n a l p o l i c i e s t o b e
i m p l e m e n t e d f r o m below.
4 T h e r e w a s a g r o w i n g c o n t r a d i c t i o n in t h e field of social r e p r o d u c t i o n
w i t h e n c o u r a g e m e n t t o t h o s e w h o w a n t e d t o i m m i g r a t e for e c o n o m i c
purposes being accompanied by an increasing concern in the polic-
ing o f t h e b o u n d a r i e s o f n a t i o n a l c i t i z e n s h i p a n d its a s s o c i a t e d
welfare rights. W h i l e the core E u r o p e a n states of Atlantic Fordism
h a d p r e v i o u s l y b e e n seen largely a s c o u n t r i e s o f e m i g r a t i o n a n d / o r ,
in the wake of postwar decolonization, the return of nationals to their
h o m e l a n d s , i n t h e 1970s i m m i g r a t i o n w a s c o n s t r u e d a s a t h r e a t t o
n a t i o n a l c o h e s i o n , full e m p l o y i h e n t a n d t h e welfare s t a t e ( B i e l i n g
1 9 9 3 ; cf. K o f m a n 1995; L e i t n e r 1995; Soysal 1994; s e e a l s o J o p p k e
1998). I n d e e d , ' m i g r a t i o n illustrates b o t h t h e logically closed c h a r -
a c t e r o f t h e w e l f a r e s t a t e a n d t h e difficulty w i t h w h i c h t h a t c l o s u r e
i s m a i n t a i n e d ' ( F r e e m a n 1986: 6 3 ; cf. K e a r n e y 1991). A d d i t i o n a l
destabilizing d e m o g r a p h i c factors w e r e the decline of t h e stable two-
p a r e n t family, t h e f e m i n i z a t i o n o f t h e p a i d l a b o u r force a n d l o n g - t e r m
unemployment.
5 T h e r e w a s a crisis of f o r m s of p o l i t i c a l r e p r e s e n t a t i o n t h a t w e r e b a s e d
o n ' g o v e r n i n g p a r t i e s ' , ' b u s i n e s s u n i o n i s m ' a n d capitalist a s s o c i a t i o n s .
T h i s w a s e v i d e n t i n g r o w i n g e l e c t o r a l v o l a t i l i t y a n d disaffection w i t h
t h e m a j o r p a r t i e s and, i n s o m e q u a r t e r s , i n m i l i t a n t r e j e c t i o n o f t h e
t e r m s o f t h e p o s t w a r c a p i t a l - l a b o u r c o m p r o m i s e . N e w social m o v e -
m e n t s also d e v e l o p e d t o c h a l l e n g e t h e i n d u s t r i a l logic o f A t l a n t i c
F o r d i s m a n d t h e statist logic of K e y n e s i a n w e l f a r i s m in f a v o u r of
alternative forms of e c o n o m i c and political organization a n d an
a n t i b u r e a u c r a t i c , a u t o n o m o u s , p o l i t i c i z e d civil s o c i e t y (cf. Offe 1985b;
H i r s c h a n d R o t h 1986).
6 T h e ' n a t i o n a l - p o p u l a r ' d i m e n s i o n o f h e g e m o n i c s t r u g g l e s shifted
away from expanding prosperity a n d welfare rights towards a m o r e
nationalist, populist and authoritarian discourse and/or towards a
m o r e c o s m o p o l i t a n , n e o l i b e r a l d e m a n d for ' m o r e m a r k e t , less s t a t e '
in a m o r e open economy. Whilst both these latter trends continue.
 The Political Economy of State Rescaling 177

the h e g e m o n y of K e y n e s i a n welfarism has been s u p e r s e d e d by

hegemonic struggles around h o w best to enhance competitiveness
as the route to prosperity.

T h e o v e r a l l effect o f t h e s e c h a n g e s was t o e r o d e t h e K W N S a n d , i n
t h e w o r s t cases, to p r o d u c e an organic crisis of this t y p e of s t a t e ( o n t h i s
c o n c e p t , see G r a m s c i 1 9 7 1 ; P o u l a n t z a s 1 9 7 4 a ) . T h e r e a r e s e v e r a l s y m p -
t o m s of an o r g a n i c crisis. T h e s e i n c l u d e a p r o g r e s s i v e loss of s t a t e unity,
d e c l i n i n g effectiveness, r e p r e s e n t a t i o n a l crises a n d a l e g i t i m a c y crisis.
T h e loss o f s t a t e u n i t y w a s r e f l e c t e d i n t h e d e c l i n i n g s t r u c t u r a l a n d
o p e r a t i o n a l c o h e r e n c e a m o n g d i f f e r e n t b r a n c h e s , a p p a r a t u s e s a n d tiers
o f g o v e r n m e n t i n s e c u r i n g t h e s t a t e activities t i e d t o specific a c c u m u l a -
tion strategies, s t a t e p r o j e c t s a n d h e g e m o n i c projects. I n o t h e r w o r d s ,
t h e r e w a s an internal disarticulation ( i n s t i t u t i o n a l crisis) of s t a t e a p p a r a t -
u s e s i n t e r m s o f t h e i r v e r t i c a l c o h e r e n c e a c r o s s different o r g a n i z a t i o n a l
levels a n d t h e i r c a p a c i t y t o e n g a g e i n h o r i z o n t a l c o o r d i n a t i o n o f differ-
e n t d o m a i n s of activity. This w a s a s s o c i a t e d w i t h declining effectiveness
i n a t t a i n i n g d e c l a r e d s t a t e objectives l i n k e d t o t h e p r e v a i l i n g e c o n o m i c ,
p o l i t i c a l a n d h e g e m o n i c p r o j e c t s . A f u r t h e r c o n s e q u e n c e in cases of
o r g a n i c crisis w a s t h e d i s o r g a n i z a t i o n a n d s t r a t e g i c d i s o r i e n t a t i o n o f t h e
p o w e r b l o c ( o r ' e s t a b l i s h m e n t ' ) a n d its a s s o c i a t e d s t a t e m a n a g e r s a n d / o r
t h e d e c o m p o s i t i o n o f t h e social b a s e s o f s u p p o r t for t h e s t a t e a n d its
p r o j e c t s . T h i s c o u l d lead in t u r n to a representational crisis of t h e s t a t e
i n r e g a r d b o t h t o its b r o a d ' n a t i o n a l - p o p u l a r ' social b a s i s - r e f l e c t e d i n
g r o w i n g volatility o r e v e n a b s o l u t e loss o f s u p p o r t f o r t h e g o v e r n i n g
political p a r t i e s a n d o t h e r m a i n s t r e a m m a s s o r g a n i z a t i o n s - a n d t o t h e
growing instability or even disintegration of institutionalized c o m p r o -
m i s e i n t h e e s t a b l i s h m e n t . A n o t h e r m a n i f e s t a t i o n o f crisis w a s t h e s t a t e ' s
legitimation crisis, t h a t is, a loss of faith in t h i s p a r t i c u l a r t y p e of s t a t e ' s
claims t o p o l i t i c a l legitimacy, i n c l u d i n g , n o t a b l y , its c l a i m t o b e a b l e t o
d e l i v e r e c o n o m i c g r o w t h a n d g e n e r a l i z e d p r o s p e r i t y (for a c o m p a r i s o n
o f t h e o r g a n i c crisis o f t h e B r i t i s h s t a t e t h a t l e d t o T h a t c h e r i s m w i t h t h e
m o r e l i m i t e d e c o n o m i c a n d p o l i t i c a l crises i n W e s t G e r m a n y i n t h e 1970s
a n d 1980s a n d t h e m o r e l i m i t e d G e r m a n Wende, o r ' t u r n ' , s e e J e s s o p
1989).

3. The Political Economy of Scale

T h e effects o f this crisis i n t h e n a t i o n a l s t a t e for t h e c h a n g i n g f o r m s a n d

f u n c t i o n s o f e c o n o m i c a n d social policy h a v e b e e n d i s c u s s e d i n t h e last
two chapters. This c h a p t e r is c o n c e r n e d with the rescaling of the p o s t w a r
n a t i o n a l s t a t e a n d its c o n t r i b u t i o n t o t h e r e s t r u c t u r i n g a n d s t r a t e g i c
178 The Political Economy of State Rescaling

r e o r i e n t a t i o n o f state i n t e r v e n t i o n . A n a l y s e s o f t h e political e c o n o m y o f
scale c o n c e r n t h e strategic selectivity of t h e i n t e r s c a l a r division of l a b o u r
a n d a t t e m p t s t o s h a p e t h i s selectivity i n p a r t i c u l a r ways. I t h a s m a j o r
i m p l i c a t i o n s for t h e m a n n e r a n d e x t e n t t o w h i c h c o n t r a d i c t i o n s and
d i l e m m a s can b e d i s p l a c e d a n d d e f e r r e d i n specific s p a t i o - t e m p o r a l fixes.
A useful a p p r o a c h in this r e g a r d is s u g g e s t e d by S w y n g e d o u w , w h o
a r g u e s t h a t scale is:

the arena and moment, both discursively and materially, where socio-
spatial power relations are contested and compromises are negotiated and
regulated. Scale, therefore, is both the result and the outcome of social
struggle for power and control... [By implication] theoretical and politi-
cal priority . .. never resides in a particular geographical scale, but rather
in the process through which particular scales become (re)constituted.
(1997: 140-1; emphasis added)

In t h e 'thirty glorious years' of postwar e c o n o m i c g r o w t h in Atlantic

F o r d i s m , t h e d o m i n a n t scale w a s t h e n a t i o n a l . I t w a s p r i m a r i l y o n this
scale t h a t s o c i o - s p a t i a l p o w e r r e l a t i o n s w e r e c o n t e s t e d a n d c o m p r o m i s e s
were negotiated and regulated. This occurred within the framework of
i n t e r n a t i o n a l r e g i m e s t h a t r e i n f o r c e d n a t i o n a l states w h i l e l o c a l states
a c t e d a s r e l a y s o r m i c r o - l e v e l a d j u s t m e n t m e c h a n i s m s for p o l i c i e s d e t e r -
m i n e d a t n a t i o n a l level. N a t i o n a l e c o n o m i e s w e r e t h e t a k e n - f o r - g r a n t e d
objects of economic m a n a g e m e n t in Atlantic Fordism, the trading
nations of East Asia and those Latin American economies pursuing
import-substitution strategies. This taken-for-grantedness actually
d e p e n d e d o n q u i t e specific m a t e r i a l a n d i d e o l o g i c a l f o u n d a t i o n s t h a t
could n o t b e t a k e n for g r a n t e d t h e m s e l v e s . T h e n a t u r a l i z a t i o n o f t h e
s t r u c t u r a l c o n g r u e n c e (or s p a t i o - t e m p o r a l c o i n c i d e n c e ) o f n a t i o n a l
economies, national states and national societies was g r o u n d e d in
postwar reconstruction in E u r o p e , in the national security state in East
A s i a a n d i n c r i t i q u e s o f d e p e n d e n c y i n L a t i n A m e r i c a . I n e a c h c a s e , this
n a t i o n a l f r a m e w o r k w a s s u p p o r t e d b y v a r i o u s (typically a s y m m e t r i c a l )
i n t e r n a t i o n a l r e g i m e s a n d a l l i a n c e s t h a t h a d t o b e p u t i n place. R e p r o -
duction of these forms of structured complementarity d e p e n d e d in turn
on the trial-and-error discovery of forms of e c o n o m i c m a n a g e m e n t ,
r e g u l a r i z a t i o n a n d g o v e r n a n c e t h a t c o u l d p r o v i d e a s p a t i o - t e m p o r a l fix
w i t h i n w h i c h t o r e s o l v e a t least p a r t i a l l y c a p i t a l i s m ' s c o n t r a d i c t i o n s a n d
dilemmas.
N o n e t h e l e s s , a s t h e c o n t r a d i c t o r y d y n a m i c o f a c c u m u l a t i o n a n d its
r e s u l t i n g conflicts a n d s t r u g g l e s a l w a y s t e n d t o e s c a p e a t t e m p t s t o f i x
t h e m w i t h i n any g i v e n s p a t i o - t e m p o r a l l y a n c h o r e d i n s t i t u t i o n a l f r a m e -
w o r k , all s u c h s o l u t i o n s a r e u n s t a b l e a n d p r o v i s i o n a l . T h i s i s p a r t i c u l a r l y
e v i d e n t i n t h e case o f t h e n a t i o n a l scale t h a t p r e d o m i n a t e d i n t h e
 The Political Economy of State Rescaling 179

o r g a n i z a t i o n o f p o s t w a r e c o n o m i c e x p a n s i o n . F o r this h a s since b e e n
u n d e r m i n e d i n m a n y different w a y s , i n c l u d i n g t h e v a r i o u s m u l t i s c a l a r ,
multitemporal processes that contribute to globalization.

The relativization of scale

The decreasing structured coherence among national economy, national
state a n d national society t h a t characterized t h e h e y d a y of t h e postwar
b o o m h a s r e l a t i v i z e d scale. F o r , a l t h o u g h t h e n a t i o n a l scale h a s lost t h e
taken-for-granted primacy it held m postwar A t l a n t i c Fordist regimes, no
o t h e r scale o f e c o n o m i c a n d p o l i t i c a l o r g a n i z a t i o n ( w h e t h e r t h e g l o b a l
o r local, u r b a n o r t r i a d i c ) h a s y e t a c q u i r e d a s i m i l a r p r i m a c y i n t h e
c u r r e n t p h a s e o f t h e a f t e r - F o r d i s t p e r i o d . T h e r e i s n o n e w p r i v i l e g e d scale
a r o u n d w h i c h o t h e r levels a r e n o w b e i n g o r g a n i z e d t o e n s u r e s t r u c t u r e d
c o h e r e n c e w i t h i n a n d a c r o s s scales. I n s t e a d , t h e r e a r e c o n t i n u i n g s t r u g -
gles o v e r w h i c h s p a t i a l scale s h o u l d b e c o m e p r i m a r y a n d h o w s c a l e s
s h o u l d b e a r t i c u l a t e d , a n d t h i s i s reflected i n a m o r e c o m p l e x n e s t i n g a n d
i n t e r w e a v i n g o f d i f f e r e n t scales a s t h e y b e c o m e r e a r t i c u l a t e d ( A m i n
a n d R o b i n s 1990; B o y e r a n d H o U i n g s w o r t h 1997; C o l l i n g e 1 9 9 6 , 1 9 9 9 ) .
I n d e e d , views o f n a t u r a l n e s s s e e m t o h a v e b r a n c h e d f r o m t h e n a t i o n a l
t o w a r d s t h e g l o b a l e c o n o m y , t h e t r i a d e c o n o m i e s a n d different t y p e s o f
s u b n a t i o n a l o r c r o s s - b o r d e r e c o n o m y , w i t h o u t t h e n a t i o n a l h a v i n g dis-
a p p e a r e d f r o m view. T h i s c a n b e s e e n i n t h e r e d i s c o v e r y o f ' a l w a y s -
a l r e a d y - t h e r e ' local, u r b a n a n d r e g i o n a l e c o n o m i e s a s sites a n d o b j e c t s
o f e c o n o m i c a n d p o h t i c a l i n t e r v e n t i o n a s well a s i n t h e d e v e l o p m e n t o f
n e w d i s c o u r s e s a b o u t t h e e m e r g i n g significance o f t h e g l o b a l a s t h e
n a t u r a l scale o f e c o n o m i c a n d p o l i t i c a l o r g a n i z a t i o n . A r g u m e n t s a b o u t
t r i a d s a r e also s o m e t i m e s p r e s e n t e d a s i f t h e y a r e a n a t u r a l d e v e l o p m e n t
a n d e x t e n s i o n o f t h e r e g i o n a l scale a n d / o r t h e p r o d u c t o f n a t u r a l f u s i o n
a m o n g economically interdependent nations. Subsequent material and
social d e v e l o p m e n t s h a v e c o m p l i c a t e d this p o s i t i o n , m o r e o v e r , w i t h t h e
e m e r g e n c e of cyberspace as a virtual arena of action that appears to be
everywhere and nowhere.' F o r cyberspace provides both a m e a n s to
e s c a p e f r o m t h e f e t t e r s a n d frictions o f t e r r i t o r i a l b o r d e r s i n t o a func-
t i o n a l space a n d a m e a n s t o c o n n e c t t e r r i t o r i e s a n d localities i n n e w w a y s
(see c h a p t e r 3 ) .
T h e n e w p o l i t i c a l e c o n o m y o f scale d o e s n o t i n v o l v e a p r e g i v e n s e t o f
places, spaces or scales t h a t are m e r e l y being r e o r d e r e d . Instead, n e w
p l a c e s a r e e m e r g i n g , n e w s p a c e s a r e b e i n g c r e a t e d , n e w scales o f o r g a -
nization are being developed and new horizons of action are being imag-
i n e d - all i n t h e light o f n e w f o r m s o f ( u n d e r s t a n d i n g ) c o m p e t i t i o n a n d
competitiveness. In particular, the global, a b o u t w h i c h we h e a r so m u c h
today, is only o n e of m a n y scales on which a t t e m p t s to restabilize
1 80 The Political Economy of State Rescaling

capitalism are being imagined and pursued. I n d e e d , globalization,

w h e t h e r viewed from a structural or strategic viewpoint, is often linked
closely a n d i n c o m p l e x w a y s t o p r o c e s s e s o n o t h e r s p a t i a l scales. I t i s best
s e e n as p a r t of a p r o l i f e r a t i o n of scales a n d t e m p o r a l i t i e s as n a r r a t e d ,
institutionalized objects of action, regularization and governance. The
n u m b e r o f scales a n d t e m p o r a l i t i e s o f a c t i o n t h a t c a n b e d i s t i n g u i s h e d
i s i m m e n s e " b u t far f e w e r e v e r g e t e x p l i c i t l y i n s t i t u t i o n a l i z e d . H o w far
this h a p p e n s d e p e n d s o n t h e p r e v a i l i n g t e c h n o l o g i e s o f p o w e r - m a t e r i a l ,
social a n d s p a t i o - t e m p o r a l - t h a t e n a b l e t h e i d e n t i f i c a t i o n a n d institu-
t i o n a l i z a t i o n of specific scales of a c t i o n a n d t e m p o r a l i t i e s . It is t h e
d e v e l o p m e n t o f n e w logistical m e a n s (of d i s t a n t i a t i o n , c o m p r e s s i o n ,
communication), organizational technologies, institutions with new
spatio-temporal horizons of action, b r o a d e r institutional architectures,
n e w global s t a n d a r d s ( i n c l u d i n g w o r l d t i m e ) a n d m o d e s o f g o v e r n a n c e
t h a t h e l p s t o e x p l a i n this p r o l i f e r a t i o n o f e c o n o m i c a l l y a n d politically
significant i n s t i t u t i o n a l i z e d scales a n d t e m p o r a l i t i e s .
M o r e o v e r , a s n e w scales e m e r g e a n d / o r existing scales g a i n i n institu-
t i o n a l t h i c k n e s s , social forces also t e n d t o d e v e l o p m e c h a n i s m s t o link o r
c o o r d i n a t e t h e m . This g e n e r a t e s i n c r e a s i n g c o m p l e x i t y a s d i f f e r e n t scales
of action c o m e to be linked in various hybrid c o m b i n a t i o n s of vertical,
horizontal, diagonal, centripetal, centrifugal a n d vortical ways. This
complexity cannot be captured in terms of simple contrasts, such as
global-national or global-local, or catch-all hybrid concepts such as
g l o c a l i z a t i o n or t h e t r a n s v e r s a l . I n s t e a d , t h e r e is a p r o l i f e r a t i o n of discur-
sively c o n s t i t u t e d a n d i n s t i t u t i o n a l l y m a t e r i a l i z e d a n d e m b e d d e d s p a t i a l
scales ( w h e t h e r t e r r e s t r i a l , t e r r i t o r i a l o r t e l e m a t i c ) , w h i c h a r e r e l a t e d i n
increasingly complex tangled hierarchies rather t h a n being simply nested
o n e w i t h i n t h e o t h e r , w i t h d i f f e r e n t t e m p o r a l i t i e s a s w e l l a s spatialities.
T h i s m e a n s , a m o n g o t h e r effects, t h a t t h e r e i s a g r e a t e r e c c e n t r i c i t y o f
s p a t i a l scales r e l a t i v e t o t h e early a n d b o o m years o f A t l a n t i c F o r d i s m . '
Larger territorial units have c o m e to contain a decreasing proportion
of t h e e c o n o m i c , political a n d social l i n k a g e s of smaller u n i t s in t h e i r
b o r d e r s compared to t h e heyday of Atlantic Fordism. This means that
s m a l l e r u n i t s can n o l o n g e r b e s o r e a d i l y r e g a r d e d a s n e s t e d w i t h i n t h e
f o r m e r like R u s s i a n dolls. T h i s is p a r t i c u l a r l y clear in t h e e m e r g i n g
n e t w o r k of global cities, w h i c h , as a n e t w o r k , is n o t c o n t a i n e d w i t h i n any
g i v e n s t a t e - r e g u l a t e d t e r r i t o r i a l s p a c e . This c o n t r a s t s with t h e n i n e t e e n t h
c e n t u r y w h e n w o r l d cities f u n c t i o n e d m a i n l y a s t h e c a p i t a l cities o f
e m p i r e s a n d s t a t e - o r g a n i z e d p l u r i n a t i o n a l t r a d i n g blocs ( H a l l 1998; K n o x
a n d T a y l o r 1995). A n o t h e r e x a m p l e o f t h e e c c e n t r i c i t y o f n e w s p a c e s i s
the growth of cross-border regions, m a n y of which are deliberately pro-
m o t e d b y t h e i r r e s p e c t i v e n a t i o n a l states o r , i n t h e c a s e o f t h e E u r o p e a n
U n i o n , a s u p r a n a t i o n a l p o l i t i c a l b o d y (for f u r t h e r discussion of c r o s s -
 The Political Economy of State Rescaling 181

b o r d e r r e g i o n s f r o m this p e r s p e c t i v e , see J e s s o p 2 0 0 2 d ) . I n a d d i t i o n ,
t h e r e a r e p r o c e s s e s o f d e b o r d e r i n g , t h a t is, ' c h a n g e s r e s u l t i n g i n t h e e m e r -
gence o f n e w p o l i t i c a l s p a c e s t h a t t r a n s c e n d t e r r i t o r i a l l y d e f i n e d s p a c e s
w i t h o u t l e a d i n g t o n e w t e r r i t o r i a l d e m a r c a t i o n s (in o t h e r w o r d s , t o a
simple shift i n b o r d e r s ) ' ( B r o c k a n d A l b e r t 1995: 171). I n s h o r t , p a s t
scalar f i x e s , a s w e l l a s p a s t s p a t i a l f i x e s , a r e d e c o m p o s i n g u n d e r e c o n o m i c
and p o l i t i c a l p r e s s u r e a n d b e i n g a c t i v e l y r e w o r k e d t h r o u g h a w i d e r a n g e
of of ten-conflictual s c a l a r s t r a t e g i e s .
T h e p r e s e n t r e l a t i v i z a t i o n o f scale clearly i n v o l v e s v e r y d i f f e r e n t
o p p o r t u n i t i e s a n d t h r e a t s for e c o n o m i c , political, a n d social forces c o m -
p a r e d t o t h e p e r i o d w h e n t h e n a t i o n a l scale w a s c o n s t r u c t e d a n d t a k e n
for g r a n t e d a s p r i m a r y . I t i s a s s o c i a t e d w i t h a c t i o n s b o t h t o e x p l o i t a n d
resist t h e p r o c e s s e s p r o d u c i n g g l o b a l i z a t i o n . W h i l e t h e w o r l d m a r k e t
a n d t h e t r i a d s h a v e b e c o m e t h e m o s t significant spaces of competition,
h o w e v e r , t h e m o s t i m p o r t a n t spaces of competitiveness a r e m o r e o f t e n
n a t i o n a l , r e g i o n a l o r local ( B r e n n e r 2000: 321). I n o t h e r w o r d s , w h e r e a s
t h e c a p i t a l i s t l a w o f v a l u e i n c r e a s i n g l y o p e r a t e s o n a g l o b a l scale, s u b -
jecting all e c o n o m i c a n d e c o n o m i c a l l y r e l e v a n t activities t o t h e a u d i t o f
t h e w o r l d m a r k e t , t h e p u r s u i t o f place-specific c o m p e t i t i v e a d v a n t a g e s
b y f i r m s , s t a t e s a n d o t h e r a c t o r s i s still r o o t e d i n local, r e g i o n a l o r
n a t i o n a l specificities. T h i s s h a p e s t h e f o r m s o f c o m p e t i t i o n a n d s t r a t e g i e s
t o b u i l d c o m p e t i t i v e n e s s (see c h a p t e r 3 a n d p p . 1 8 7 - 9 3 ) . I t also s h a p e s
t h e f o r m s i n w h i c h e c o n o m i c , p o l i t i c a l a n d social f o r c e s m o r e g e n e r a l l y
s e e k t o p r o t e c t t h e m s e l v e s f r o m g l o b a l c o m p e t i t i o n a n d t h e m o s t feasi-
b l e s t r a t e g i e s t o t h i s e n d . T h e f o l l o w i n g p a r a g r a p h s c o m m e n t briefly o n
t h e r a n g e of d i f f e r e n t scales below the level of the global on w h i c h t h e
s e a r c h for n e w s p a t i o - t e m p o r a l f i x e s for a c c u m u l a t i o n a n d r e g u l a t i o n i s
b e i n g p u r s u e d . I discuss t h e g l o b a l l e v e l l a t e r as an effect of different
scalar s t r a t e g i e s as well as an object of g o v e r n a n c e in its o w n right.

Triad power
A s t h e global e c o n o m i c h i e r a r c h y i s r e d e f i n e d , w e f i n d i n c r e a s e d e m p h a -
sis o n t h r e e s u p r a n a t i o n a l g r o w t h p o l e s t h a t e x c l u d e significant a r e a s
o f t h e g l o b e . T h e s e a r e b a s e d o n t h e r e g i o n a l h e g e m o n i e s or, a t least,
dominance of the U S A , G e r m a n y and J a p a n respectively and are
reflected i n t h e c r e a t i o n o f t h e N o r t h A m e r i c a n F r e e T r a d e A g r e e m e n t
( a n d m o r e r e c e n t efforts t o e x t e n d i t i n t o L a t i n A m e r i c a o n a h e m i -
spheric basis), a t t e m p t s to widen a n d d e e p e n a ' E u r o p e a n E c o n o m i c
Space' that extends beyond the current borders of the E u r o p e a n Union,
a n d r e c e n t efforts t o d e v e l o p a r e g i o n a l f i n a n c i a l a s well a s r e g i o n a l
production system in East Asia. E a c h of these supranational or triadic
g r o w t h p o l e s h a s its o w n s p a t i a l a n d s c a l a r divisions o f l a b o u r a n d its
 182 The Political Economy of State Rescaling

o w n a s s o c i a t e d t a n g l e d liierarchies o f s p a c e a n d place. T h e r e i s a l r e a d y
a m a t e r i a l basis to t h e s e t r i a d i c d e v e l o p m e n t s , of course, w i t h a g r o w i n g
intensity of intrabloc trade (most m a r k e d in the E u r o p e a n U n i o n but
also g r o w i n g in t h e o t h e r t w o t r i a d s ) , a f u r t h e r d e e p e n i n g of t h e inter-
r e g i o n a l division o f l a b o u r w i t h i n e a c h bloc, a n d a t t e m p t s t o d e v e l o p
a p p r o p r i a t e forms of governance. This d e v e l o p m e n t may eventually
c o m e t o p r o v i d e a n e w scale o n w h i c h t o seek t o r e r e g u l a r i z e c a p i t a l
a c c u m u l a t i o n a n d c o n s t r u c t a n e w s p a t i o - t e m p o r a l fix t h a t will limit t h e
d i s r u p t i v e i m p a c t of n e o l i b e r a l f o r m s of g l o b a l i z a t i o n . T h i s is m o s t likely
to occur in the short- to medium-term in the E u r o p e a n Union. For the
triads m o r e generally t o b e c o m e t h e c o m p l e m e n t a r y n o d a l p o i n t s o f a
reregularization of the continuing global-local disorder, however, the
d o m i n a n c e o f n e o l i b e r a l i s m i n t w o o f t h e t h r e e triads ( A m e r i c a a n d , t o
a lesser e x t e n t , E u r o p e ) a n d t h e p o l i t i c a l p a r a l y s i s o f t h e J a p a n e s e state
in the third triad must be reversed.
Recent celebration of triads should not blind us to three other impor-
t a n t t e n d e n c i e s : (1) t h e g r o w i n g i n t e r p e n e t r a t i o n o f t h e triads t h e m s e l v e s
a s efforts a r e m a d e t o d e v e l o p a n d d e e p e n t h e i r o v e r a l l c o m p l e m e n t a r -
ities a n d a s m u l t i n a t i o n a l s h e a d q u a r t e r e d i n o n e t r i a d f o r m s t r a t e g i c
a l l i a n c e s w i t h p a r t n e r s i n o t h e r s ; (2) shifts i n t h e s p a t i a l h i e r a r c h i e s
within each triad d u e to u n e v e n d e v e l o p m e n t - reflected n o t only in
shifts a m o n g ' n a t i o n a l e c o n o m i e s ' b u t also i n t h e r i s e a n d fall o f r e g i o n s ,
n e w f o r m s o f ' n o r t h - s o u t h ' divide, a n d s o forth; a n d (3) t h e r e - e m e r g e n c e
o f r e g i o n a l a n d l o c a l e c o n o m i e s w i t h i n s o m e n a t i o n a l e c o n o m i e s or, i n
s o m e cases, c r o s s - c u t t i n g n a t i o n a l b o r d e r s - w h e t h e r s u c h r e s u r g e n c e
is part of the overall globalization process and/or develops in reaction
t o it. A l l o f t h e s e c h a n g e s h a v e t h e i r o w n m a t e r i a l a n d / o r s t r a t e g i c
bases a n d t h u s c o n t r i b u t e t o t h e c o m p l e x o n g o i n g r e a r t i c u l a t i o n o f
global-regional-national-local economies.

Regional blocs and cross-border regions

In addition to the triadic macroregions, two of which a r e emerging within
t h e e c o n o m i c space p r e v i o u s l y d o m i n a t e d b y A t l a n t i c F o r d i s m , t h e r e a r e
p r o p o s a l s for o t h e r k i n d s o f r e g i o n a l blocs o r systems t h a t f r a g m e n t ,
t r a n s c e n d o r cross-cut n a t i o n a l s p a c e . S o m e t h e o r i s t s e x p l a i n t h e s e
alternative proposals as rooted in 'natural economic territories' (NETs),
which have been allowed to re-emerge or develop with the decline of
t h e n a t i o n a l s t a t e a s a n e c o n o m i c a s well a s p o l i t i c a l p o w e r c o n t a i n e r . I t
i s c e r t a i n l y r e m a r k a b l e h o w o l d e r , c r o s s - b o r d e r t r a d i n g b l o c s a n d link-
ages h a v e r e - e m e r g e d after t h e I r o n C u r t a i n c o l l a p s e d i n 1 9 8 9 - 9 0 . B u t
N E T s h a v e b e e n discursively n a t u r a l i z e d a s well a s e c o n o m i c a l l y a n d
politically c o n s t r u c t e d . W h e t h e r a n y g i v e n s p a c e i s s e e n a s n a t u r a l o r n o t
 The Political Economy of State Rescaling 183

d e p e n d s , for e x a m p l e , o n views a b o u t t h e d o m i n a n t m o d e s o f e c o n o m i c
competition and the various economic and extra-economic factors that
might p r o m o t e systemic or structural competitiveness. T h u s , as we saw
in chapter 3, a Ricardian interpretation (based on factor-driven growth
i n o p e n e c o n o m i e s ) w o u l d lead o n e t o identify different N E T s a n d e c o -
nomic strategies from those implied in a Listian account (based on p r o -
tectionist catch-up i n v e s t m e n t dynamics p r o m o t e d by a n a t i o n a l state
c o n c e r n e d w i t h its e c o n o m i c a n d p o l i t i c o - m i l i t a r y s e c u r i t y ) . L i k e w i s e ,
a Keynesian reading (based on securing the i n t e r d e p e n d e n t conditions
for m a s s p r o d u c t i o n e c o n o m i e s o f scale a n d m a s s c o n s u m p t i o n ) w o u l d
i m p l y different N E T s a n d e c o n o m i c s t r a t e g i e s f r o m a S c h u m p e t e r i a n
o n e ( b a s e d o n s e c u r i n g t h e c o n d i t i o n s for s y s t e m i c c o m p e t i t i v e n e s s a n d
permanent innovation).
T h e erosion of t h e relative closure of Atlantic Fordism, t h e e n d of the
Cold W a r , t h e d e c o m p o s i t i o n o f t h e S o v i e t B l o c a n d t h e ' o p e n i n g ' o f
C h i n a t o f o r e i g n capital h a v e r e i n f o r c e d t h e r e l a t i v i z a t i o n o f scale a n d
c r e a t e d s p a c e for n e w e c o n o m i c a n d p o l i t i c a l s t r a t e g i e s o n t h e p a r t o f
firms and states alike. T h e s e c h a n g e s are reflected in a proliferation of
scales on which a t t e m p t s are n o w being m a d e to restructure economic,
p o l i t i c a l a n d social r e l a t i o n s - r a n g i n g f r o m e c o n o m i c g l o b a l i z a t i o n ,
g l o b a l g o v e r n a n c e a n d g l o b a l c u l t u r e t o t h e p r o m o t i o n o f local
economies, n e i g h b o u r h o o d d e m o c r a c y a n d 'tribal' identities. A t o n e
extreme is whole-hearted a d o p t i o n of free trade a n d the unconditional
integration of e c o n o m i c spaces as quickly as possible into the world
e c o n o m y . Historically, a d v o c a c y o f free t r a d e i s a s s o c i a t e d w i t h e c o -
n o m i c a l l y d o m i n a n t p o w e r s , t h a t is, p o w e r s t h a t h a v e a l e a d i n n e w t e c h -
n o l o g i e s , a p r e d o m i n a n t r o l e in p r o d u c t i o n a n d t r a d e , a n d c o n t r o l of a
h e g e m o n i c o r m a s t e r c u r r e n c y . I t i s n o t usually willingly e m b r a c e d i n
w e a k e c o n o m i e s , h o w e v e r , w h e r e free t r a d e i s likely t o g e n e r a t e d e c l i n -
ing e c o n o m i c c o h e r e n c e o r d i s i n t e g r a t i o n o f t h e e c o n o m y a n d its s u b o r -
dination to external influences - whether t h r o u g h growing technological
d e p e n d e n c e , i m p o r t p e n e t r a t i o n a t t h e e x p e n s e o f local e n t e r p r i s e ( w i t h
little c h a n c e t o adjust s t r u c t u r a l l y ) , c u r r e n c y d e p r e c i a t i o n a n d inflation
i n cases w h e r e t h e c u r r e n c y f l o a t s , o r else recession, i n cases w h e r e t h e
national currency is pegged to a stronger o n e (such as the US dollar).
N o n e t h e l e s s , e l e m e n t s o f this n e o l i b e r a l s t r a t e g y w e r e initially a d v o c a t e d
in several post-socialist e c o n o m i e s (reinforced, of course, by neoliberally
inclined international agencies, t h e U S A and Thatcherite Britain); they
a r e also i n c l u d e d i n t h e c o n d i t i o n a l i t i e s a t t a c h e d t o s t r u c t u r a l a d j u s t m e n t
p r o g r a m m e s p r o p o s e d b y t h e W o r l d B a n k for c r i s i s - r i d d e n A f r i c a n a n d
L a t i n A m e r i c a n e c o n o m i e s ; a n d t h e y h a v e also b e e n r e c o m m e n d e d for
s e v e r a l o f t h e post-crisis e c o n o m i e s i n E a s t A s i a ( a g a i n e n c o u r a g e d b y
t h e u s u a l i n t e r n a t i o n a l s u s p e c t s ) . O n m o r e local scales, n e o l i b e r a l i s m i s
 184 The Political Economy of State Rescaling

also e v i d e n t i n t h e massive e x p a n s i o n o f free e c o n o m i c zones, o p e n

m a r k e t e n c l a v e s , free t r a d e zones, a n d s o f o r t h .
S e c o n d , a t t h e o p p o s i t e e n d o f t h e s p e c t r u m , t h e crisis o f n a t i o n a l
e c o n o m i e s has b e e n a s s o c i a t e d w i t h v a r i o u s p l a n s for p r o t e c t i o n i s m , i f n o t
autarky. Such plans involve selective, if n o t complete, withdrawal from the
world e c o n o m y to d e v e l o p a strong n a t i o n a l economic base before being
exposed to international competition. This approach is sometimes linked
to infant industry-style a r g u m e n t s and/or referred to the i m p o r t substitu-
tion phase of several E a s t A s i a n N I C s ' growth trajectories before they
t u r n e d t o e x p o r t - l e d d e v e l o p m e n t . I t i s also l i n k e d o c c a s i o n a l l y t o
geostrategic and security considerations (again as in the South Korean or
T a i w a n e s e c a s e s ) . B u t a full-blown a u t a r k i c s t r a t e g y is difficult w h e r e
economies d e p e n d on i m p o r t e d r a w materials, h a v e foreign debts, or are
a l r e a d y i n t e g r a t e d i n t o t h e i n t e r n a t i o n a l division o f l a b o u r .
Third, building on the process of triad formation, there are attempts
b y o t h e r e c o n o m i e s t o e x t e n d a n d d e e p e n t h e i r links t o t h e n e i g h b o u r -
ing t r i a d bloc. F o r e x a m p l e , i n t e g r a t i o n i n t o t h e E U o r t h e E u r o p e a n
F r e e T r a d e A s s o c i a t i o n w a s t h e m o s t p o p u l a r initial o p t i o n a m o n g
several E a s t e r n a n d C e n t r a l E u r o p e a n e c o n o m i e s , especially g i v e n t h e
c o l l a p s e i n t h e S o v i e t - e r a C o m e c o n bloc after 1989 ( B a k o s 1993). W i t h
due caution a b o u t the financial costs and economic impact on sensitive
s e c t o r s , t h i s s t r a t e g y o f e n l a r g e m e n t h a s also b e e n p r o m o t e d b y t h e
l e a d i n g E U e c o n o m i e s for v a r i o u s e c o n o m i c a n d / o r g e o p o l i t i c a l r e a s o n s .
This i s r e f l e c t e d i n a n u m b e r o f p r o g r a m m e s t o p r o m o t e c r o s s - b o r d e r
l i n k a g e s a n d c o o p e r a t i o n a m o n g n o n - c o n t i g u o u s r e g i o n s , cities o r
localities. T h e s a m e g e n e r a l s t r a t e g y i s f o u n d i n E a s t A s i a . T h i s h a s b e e n
a r t i c u l a t e d m o s t c l e a r l y in J a p a n ' s so-cafled 'flying g e e s e s t r a t e g y ' -
t h a t is, i n t e g r a t i o n o f f i r s t - , s e c o n d - a n d t h i r d - t i e r E a s t A s i a n N I C s i n t o
a r e g i o n a l division of l a b o u r u n d e r J a p a n e s e h e g e m o n y . T h i s s t r a t e g y
n o t o n l y i n v o l v e s a n e w r e g i o n a l d i v i s i o n o f l a b o u r b u t also J a p a n e s e
a t t e m p t s t o e x p o r t its d i s t i n c t i v e s y s t e m o f l a b o u r r e l a t i o n s ( W o o d i w i s s
1998) a n d t o p r o m o t e c o m p l e m e n t a r y f o r m s o f R i c a r d i a n w o r k f a r e
r e g i m e ( E s p i n g - A n d e r s e n 1997; J o n e s 1993; K w o n 1997). T h e i n c r e a s -
ingly c o m p l e x f o r m s o f r e g i o n a l a n d c r o s s - b o r d e r i n t e g r a t i o n i n t h e
A m e r i c a n hemisphere, especially regarding t h e various n e s t e d and/or
e c c e n t r i c h i e r a r c h i e s o f local a n d r e g i o n a l e c o n o m i e s i n L a t i n A m e r i c a ,
also p r o v i d e a r i c h f i e l d o f s t u d y h e r e ( G r u g e l a n d H o u t 1999; H e t t n e
e t a l 2000; S c h u l z e t al. 2 0 0 1 ; V e l l i n g a 2000).
F o u r t h , a n d conversely, t h e r e are proposals to establish n e o -
mercantilist trading blocs. This is well illustrated in the idea of resur-
recting C o m e c o n as a multilateral m a c r o e c o n o m i c organization in the
form of a Customs U n i o n with c o m m o n external customs regulations
and/or a Central E u r o p e a n P a y m e n t s U n i o n that would clear trade
 The Political Economy of State Rescaling 185

i m b a l a n c e s o n a bi- o r m u l t i l a t e r a l b a s i s ( A n d r e f f a n d A n d r e f f 1995;
S m y s l o v 1992). O n a l e s s e r b u t still s u p r a n a t i o n a l scale, t h e r e w e r e p r o -
p o s a l s f o r local e c o n o m i c i n t e g r a t i o n a m o n g s u b s e t s o f t h e f o r m e r p o s t -
socialist e c o n o m i e s . T h e b e s t - k n o w n c a s e ( a n d o n e initially b a c k e d b y
w e s t e r n capitalist f o r c e s ) a i m e d t o e s t a b l i s h a C e n t r a l E u r o p e a n F r e e
Trade Association involving Hungary, P o l a n d and Czechoslovakia, but it
h a s b e e n o v e r s h a d o w e d b y t h e i r c a n d i d a c y for t h e E u r o p e a n U n i o n .
A n a l o g o u s p r o p o s a l s h a v e b e e n p u t f o r w a r d for a y e n - t r a d i n g b l o c i n
E a s t A s i a as a b a s i s for d e e p e n i n g t h e r e g i o n a l d i v i s i o n of l a b o u r , r e d u c -
ing o v e r d e p e n d e n c e on the A m e r i c a n m a r k e t (and, indeed, the US
dollar), providing a space within which Confucian capitalism and/or
A s i a n v a l u e s c a n be c o n s o l i d a t e d in t h e face of a n e o l i b e r a l offensive,
a n d a m e a n s of r e d u c i n g f u t u r e e x p o s u r e to volatile global forces
( F r a n k e l 1994; G o n g 1999; S u m 2 0 0 1 ; V e l l i n g a 2 0 0 0 ) .
Fifth, t h e r e a r e v a r i o u s i n t e r n a t i o n a l p r o p o s a l s f o r c o o p e r a t i o n
b e t w e e n post-socialist a n d c a p i t a l i s t e c o n o m i e s t o c r e a t e n e w r e g i o n a l
e c o n o m i c f o r m a t i o n s . T h e y i n c l u d e : (1) a B l a c k Sea E c o n o m i c C o o p e r a -
t i o n P r o j e c t ; (2) t h e E c o n o m i c C o o p e r a t i o n O r g a n i z a t i o n i n C e n t r a l
A s i a ; (3) B a l t i c Sea c o o p e r a t i o n ; (4) a r e s u r r e c t e d D a n u b i a n C o n f e d e r a -
tion; a n d (5) t h e ' J a p a n S e a ' R i m E c o n o m i c Z o n e . S u c h p r o p o s a l s a r e
intended to build on a history of regional exchanges, growing economic
ties a n d t h e c o m p l e m e n t a r y s t r e n g t h s o f different p a r t n e r s ; a n d t h e y also
h a v e a v a r i e t y o f g e o p o l i t i c a l , e t h n i c , religious, c u l t u r a l a n d o t h e r b a s e s ,
w h i c h v a r y f r o m c a s e t o case. T h e i n c r e a s e d U S r o l e since t h e a t t a c k s
on the World Trade Center and the Pentagon in the southern Turkic
republics of the former Soviet U n i o n provides a further illustration of
this option.
Sixth, v a r i o u s c r o s s - b o r d e r r e g i o n a l p a r t n e r s h i p s h a v e b e e n p r o p o s e d
to link m o r e t h a n two subnational economies into new regional entities
in t h e h o p e of d e e p e n i n g existing complementarities. T h e s e include p r o -
posals for post-socialist E u r o p e a n d for E U / n o n - E U linkages (such as
Interreg Greece, Interreg Viadrina, Interreg Italy-Slovenia, and m a n y
o t h e r s ) ( s e e E u r o p e a n C o m m u n i t i e s 1994, 2 0 0 1 ; P e r k m a n n 2 0 0 0 ) ; a n d ,
again, o u t s i d e t h e E u r o p e a n s p h e r e , i n t h e M u t a n k i a n g d e l t a , i n v o l v i n g
Siberia a n d t h e F a r E a s t e r n r e p u b l i c s o f t h e C I S , p r o v i n c e s i n n o r t h -
e a s t e r n C h i n a a n d N o r t h K o r e a , w i t h J a p a n e s e b a c k i n g (cf. E u r o p e a n
C o m m u n i t i e s 1992). I n a d d i t i o n , t h e r e a r e v i r t u a l r e g i o n s c o m p r i s i n g
e c o n o m i c n e t w o r k s c o n n e c t i n g n o n - c o n t i g u o u s r e g i o n s a n d / o r cities. T h e
most famous of these is the F o u r M o t o r s R e g i o n in E u r o p e that links
four non-contiguous high-growth regions: namely, B a d e n - W t i r t t e m b e r g ,
R h o n e - A l p e s , L o m b a r d y and Catalonia; but there are several other such
regions and/or formally organized E u r o p e a n urban networks (Camhis
a n d F o x 1992; I n t e r r e g 2 0 0 1 ; S c o t t 2 0 0 1 ; V e l l i n g a 2 0 0 0 ) .
 •f

186 The Political Economy of State Rescaling

Cities

A f u r t h e r scale of a c t i o n t h a t is e m e r g i n g (or, m o r e a c c u r a t e l y , r e -
e m e r g i n g i n n e w f o r m s ) also cuts a c r o s s c o n v e n t i o n a l g e o e c o n o m i c
a n d g e o p o l i t i c a l h i e r a r c h i e s . T h i s i s t h e u r b a n scale. T h e r e a r e t h r e e
significant c h a n g e s o c c u r r i n g h e r e : (1) t h e v a s t e x p a n s i o n o f t h e size a n d
scale o f l e a d i n g cities w i t h i n u r b a n h i e r a r c h i e s s o t h a t t h e y b e c o m e l a r g e r
m e t r o p o l i t a n o r r e g i o n a l e n t i t i e s w i t h s e v e r a l c e n t r e s (on e x t e n d e d
m e t r o p o l i t a n r e g i o n s a n d u r b a n c o r r i d o r s i n Pacific A s i a , see F o r b e s
1997); (2) a n i n c r e a s i n g s t r u c t u r a l i n t e g r a t i o n a n d s t r a t e g i c o r i e n t a t i o n
of cities' activities b e y o n d national space - an orientation that creates
p o t e n t i a l conflicts w i t h t h e n a t i o n a l s t a t e a s s o m e cities b e c o m e p o t e n -
tial ' r e g i o n a l s t a t e s ' less o r i e n t e d t o t h e i r r e s p e c t i v e n a t i o n a l h i n t e r -
l a n d s t h a n t o t h e i r ties w i t h cities a n d e c o n o m i c spaces a b r o a d ( w i t n e s s
the increasing use of the 'gateway', 'hub' and 'network' metaphors);
a n d , p a r a d o x i c a l l y , ( 3 ) t h e g r o w i n g r o l e o f s o m e l e a d i n g cities ( r a t h e r
t h a n , a s h i t h e r t o , specific f i r m s o r s e c t o r s ) a s s t a t e - s p o n s o r e d a n d s t a t e -
p r o t e c t e d n a t i o n a l c h a m p i o n s i n t h e f a c e o f intensifying i n t e r n a t i o n a l
competition.
H a r d i n g h a s defined t h e c o n t e n t o f t h e s e e n t r e p r e n e u r i a l p o l i c i e s a s
involving growing concern with:

the state of the local economy; the fortunes of locally-based businesses; the
potential for attracting new companies and/or promoting growth within
indigenous firms; the promotion of job-creation and training measures
in response to growing urban unemployment; the modernization of the
infrastructures and assets of urban regions (communications, cultural
institutions, higher educational strengths and capacities) to attract invest-
ment and visitors and support existing economic activities; and the need
to limit further suburbanization, retain population (particularly middle-to-
upper income families) and workplaces and create compact, livable cities.
(1995: 27)

S t o r p e r ' s analysis o f t h e reflexive city c l a i m s t h a t u n c e r t a i n t y a n d risk

are changing in a period w h e n m a r k e t forces and t h e e x t r a - e c o n o m i c
e n v i r o n m e n t for e c o n o m i c a c t o r s a r e b e c o m i n g m o r e t u r b u l e n t , m o r e
influenced by the strategic calculation of o t h e r actors, a n d m o r e o p e n to
i n f l u e n c e o n a w i d e r a n g e o f s p a t i a l scales. B u t n o t all e n t r e p r e n e u r i a l
cities t a r g e t t h e s a m e f o r m s o f c o m p e t i t i v e n e s s . I n s o m e cases policy
i n n o v a t i o n s i n v o l v e little m o r e t h a n a t t e m p t s t o s e c u r e l a r g e l y static
comparative advantages by attracting inward investment from mobile
capital at the expense of other places through such measures as tax
b r e a k s , subsidies a n d r e g u l a t o r y u n d e r c u t t i n g a n d / o r s i m p l e , civic
 The Political Economy of State Rescaling 187

b o o s t e r i s t i m a g e - b u i l d i n g . I n o t h e r cases, cities a n d r e g i o n s i n t r o d u c e
e c o n o m i c , political a n d social i n n o v a t i o n s t o e n h a n c e p r o d u c t i v i t y a n d
o t h e r c o n d i t i o n s affecting t h e s t r u c t u r a l a n d / o r s y s t e m i c c o m p e t i t i v e n e s s
of b o t h local and m o b i l e capital. This would be reinforced to t h e e x t e n t
t h a t t h e y p o s s e s s a socially d e n s e , i n s t i t u t i o n a l l y t h i c k s p a c e for e c o n o m i c
reflexivity a n d t h e f l e x i b l e p o o l i n g o f risks a n d u n c e r t a i n t i e s i n a n
i n c r e a s i n g l y t u r b u l e n t n a t i o n a l , r e g i o n a l a n d global e n v i r o n m e n t (cf.
S t o r p e r 1997; V e l t z 1996).

Alliance strategies
T h e s e complexities p o i n t to the p o t e n t i a l for alliance strategies a m o n g
s t a t e s o n similar o r d i f f e r e n t r e g i o n a l scales (for e x a m p l e , t h e E U ,
w h e t h e r as an i n t e r g o v e r n m e n t a l organization of nation-states or a
' E u r o p e o f t h e r e g i o n s ' ) t o s e c u r e t h e basis for e c o n o m i c a n d p o l i t i c a l
s u r v i v a l as t h e i m p e r a t i v e s of s t r u c t u r a l c o m p e t i t i v e n e s s on a g l o b a l scale
m a k e t h e m s e l v e s felt. O t h e r f o r m s o f p r o t e c t i o n i s m h a v e b e e n p r o p o s e d
o r o r g a n i z e d o n d i f f e r e n t scales a s p a s t r e g i o n a l a n d l o c a l m o d e s o f
growth are disrupted (ranging from 'Fortress E u r o p e ' to 'new localisms',
f r o m t h e S a o P a u l o F o r u m o r t h e P e o p l e ' s P l a n for t h e T w e n t y - F i r s t
Century to the informal economic self-organization of shanty towns).
Nonetheless, in general terms, as noted by Mittelman, '[rjegionalism in
t h e 1990s i s n o t t o b e c o n s i d e r e d a s a m o v e m e n t t o w a r d t e r r i t o r i a l l y
b a s e d a u t a r k i e s a s i t w a s d u r i n g t h e 1930s. R a t h e r , i t r e p r e s e n t s c o n -
centration of political a n d e c o n o m i c p o w e r c o m p e t i n g in t h e global
economy, with multiple interregional and intraregional flows' (1996:190;
s e e also K e a t i n g 1998).

4. Scales of Competition

T h e preceding analysis suggests that competition occurs n o t only b e -

t w e e n e c o n o m i c a c t o r s (for e x a m p l e , f i r m s , s t r a t e g i c alliances, n e t w o r k s )
b u t also b e t w e e n political entities r e p r e s e n t i n g spaces a n d places
(for e x a m p l e , cities, r e g i o n s , n a t i o n s , t r i a d s ) . I t i s justified t o t r e a t cities,
regions and nations as 'units' or 'subjects' of c o m p e t i t i o n insofar as c o m -
p e t i t i v e n e s s d e p e n d s o n e x t r a - e c o n o m i c a s well a s e c o n o m i c c o n d i t i o n s ,
c a p a c i t i e s a n d c o m p e t e n c e s . F o r this m e a n s t h a t c o m p e t i t i o n i s m e d i a t e d
by m o r e t h a n p u r e m a r k e t forces and raises t h e q u e s t i o n w h e t h e r the
c o n d i t i o n s of successful c o m p e t i t i o n for a city, r e g i o n or n a t i o n a r e
a n a l o g o u s t o t h o s e for a single f i r m . C a n cities, r e g i o n s o r n a t i o n s a c h i e v e
c o m p e t i t i v e n e s s i n s i m i l a r w a y s t o f i r m s , a n d , i f n o t , d o t h e y a t least
pursue economic competitiveness in the same way as each other? The
 188 The Political Economy of State Rescaling

a n s w e r clearly d e p e n d s o n h o w b r o a d l y o n e i n t e r p r e t s c o m p e t i t i o n , c o m -
petitiveness a n d capacities for action (on nations, see I M D 2001; Porter
1990; P o r t e r e t al. 2000; W a r r 1994; o n cities a n d city-regions, see B r e n n e r
2000; O h m a e 1 9 9 1 , 1995; P o r t e r 1995; Scott 1998, 2 0 0 1 ; S t o r p e r 1997).
C o m p e t i t i o n i s m e d i a t e d t h r o u g h t h e invisible h a n d o f t h e m a r k e t a n d
w o u l d o c c u r w h e t h e r o r n o t a c t o r s explicitly o r i e n t e d t h e i r e c o n o m i c
a c t i v i t i e s t o e n h a n c i n g t h e i r c o m p e t i t i v e n e s s . I n this sense, m a r k e t forces
a l l o c a t e s u c h activities a m o n g p l a c e s a n d s p a c e s w h e t h e r o r n o t a t t e m p t s
o c c u r t o a t t r a c t (or r e p e l ) e c o n o m i c activities a t levels a b o v e i n d i v i d u a l
m a r k e t a g e n t s . Cities, r e g i o n s a n d n a t i o n s c a n also c o m p e t e o n a m o r e
explicit, s t r a t e g i c a n d reflexive level, h o w e v e r , i n d e v e l o p i n g a n d p u r s u -
ing p l a n s a n d p r o j e c t s t o a t t r a c t i n v e s t m e n t a n d j o b s a n d t o e n h a n c e t h e i r
p e r f o r m a n c e i n c o m p e t i t i o n w i t h o t h e r places a n d spaces. I f t h e s e
c o m p e t i t i v e s t r a t e g i e s a r e explicit a n d c a p a b l e o f b e i n g p u r s u e d , t h e n i t
i s c l e a r t h a t cities, r e g i o n s a n d n a t i o n s r e a l l y a r e ' e n t r e p r e n e u r i a l ' a c t o r s
a n d a r e n o t j u s t d e s c r i b i n g t h e m s e l v e s a s such. I n o w w a n t t o a r g u e t h a t
an i m p o r t a n t distinguishing feature of post-Fordism, when c o m p a r e d
w i t h F o r d i s m , is t h e i n c r e a s i n g significance of t h e reflexive p u r s u i t of
e n t r e p r e n e u r i a l strategies by n o n - e c o n o m i c actors.
D r a w i n g o n S c h u m p e t e r ' s analysis o f e n t r e p r e n e u r s h i p (see c h a p t e r
3), i t c a n b e s u g g e s t e d t h a t t h e r e a r e f i v e f i e l d s o f i n n o v a t i o n t h a t c a n b e
p u r s u e d b y scalar a c t o r s o n b e h a l f o f localities, cities, r e g i o n s , n a t i o n s o r
t r i a d i c blocs:*

1 T h e i n t r o d u c t i o n of n e w t y p e s of p l a c e or s p a c e for living, w o r k i n g ,
p r o d u c i n g , servicing, c o n s u m i n g , e t c . E x a m p l e s i n c l u d e m u l t i c u l t u r a l
cities, cities o r g a n i z e d a r o u n d i n t e g r a t e d t r a n s p o r t a n d s u s t a i n a b l e
development, and cross-border regional hubs or gateways.
2 N e w m e t h o d s of space- or place-production to create location-
specific a d v a n t a g e s for p r o d u c i n g g o o d s / s e r v i c e s o r o t h e r u r b a n
a c t i v i t i e s . E x a m p l e s i n c l u d e n e w p h y s i c a l , social a n d c y b e r n e t i c
infrastructures, p r o m o t i n g agglomeration economies, technopoles,
r e g u l a t o r y u n d e r c u t t i n g a n d reskilling.
3 O p e n i n g n e w m a r k e t s - w h e t h e r b y p l a c e - m a r k e t i n g specific
localities, cities o r r e g i o n s i n n e w a r e a s a n d / o r m o d i f y i n g t h e s p a t i a l
d i v i s i o n o f c o n s u m p t i o n t h r o u g h e n h a n c i n g t h e q u a l i t y o f life for
r e s i d e n t s , c o m m u t e r s o r visitors (for e x a m p l e , culture, e n t e r t a i n m e n t ,
spectacles, n e w cityscapes, gay q u a r t e r s , g e n t r i f i c a t i o n ) .
4 F i n d i n g n e w sources o f s u p p l y t o e n h a n c e c o m p e t i t i v e a d v a n t a g e s .
Examples include new sources or patterns of immigration, changing
t h e c u l t u r a l m i x o f cities, f i n d i n g n e w sources o f f u n d i n g f r o m t h e
c e n t r a l s t a t e (or, i n t h e E U , E u r o p e a n funds) o r r e s k i l l i n g t h e
workforce.
 The Political Economy of State Rescaling 189

5 R e f i g u r i n g o r r e d e f i n i n g local, u r b a n o r r e g i o n a l h i e r a r c h i e s a n d / o r
altering the place of a given economic space within them. E x a m p l e s
i n c l u d e t h e d e v e l o p m e n t o f a w o r l d o r g l o b a l city p o s i t i o n , r e g i o n a l
gateways, cross-border regions and 'virtual regions' based on inter-
r e g i o n a l c o o p e r a t i o n a m o n g n o n - c o n t i g u o u s spaces.

T h e r e a r e o b v i o u s d a n g e r s i n trivializing e n t r e p r e n e u r i a l activities b y
r e d u c i n g t h e m t o r o u t i n e activities t h a t a r e d i r e c t l y e c o n o m i c o r e c o -
nomically relevant; a n d in treating an e n t r e p r e n e u r i a l self-image or
m e r e place-marketing as evidence of Schumpeterian entrepreneurship.
S o m e places m a y simply be administering or m a n a g i n g an existing
b u s i n e s s - f r i e n d l y c l i m a t e efficiently r a t h e r t h a n b e i n g a c t i v e l y e n g a g e d
i n i n n o v a t i o n . T h a t t h i s m a y suffice t o m a i n t a i n c e r t a i n e x t r a - e c o n o m i c
c o n d i t i o n s for c a p i t a l a c c u m u l a t i o n d o e s n o t m e a n t h a t a p l a c e i s
e n t r e p r e n e u r i a l . N o r d o e s r o u t i n e p l a c e - m a r k e t i n g m a k e a city, r e g i o n ,
n a t i o n or triad entrepreneurial. W h a t is really essential, from a structural
v i e w p o i n t , i s t h a t a n ' e n t r e p r e n e u r i a l ' locality h a s i n s t i t u t i o n a l a n d
o r g a n i z a t i o n a l f e a t u r e s t h a t c a n s u s t a i n a flow of i n n o v a t i o n s . W h a t is
i n v o l v e d h e r e is a s p a t i a l i z e d c o m p l e x of i n s t i t u t i o n s , n o r m s , c o n v e n -
tions, n e t w o r k s , o r g a n i z a t i o n s , p r o c e d u r e s a n d m o d e s o f e c o n o m i c a n d
social c a l c u l a t i o n t h a t e n c o u r a g e e n t r e p r e n e u r s h i p . V i e w e d s t r a t e -
gically, a n ' e n t r e p r e n e u r i a l ' l o c a l i t y i s o n e t h a t h a s d e v e l o p e d t h e c a p a c -
ity t o act e n t r e p r e n e u r i a l l y . I t m a y t h e n itself d i r e c t l y t a r g e t o n e o r m o r e
o f t h e f i v e f i e l d s o f i n n o v a t i o n a s a n e c o n o m i c e n t r e p r e n e u r i n its o w n
r i g h t a n d / o r actively p r o m o t e i n s t i t u t i o n a l a n d o r g a n i z a t i o n a l c o n d i -
tions favourable to economic entrepreneurship on the part of other
f o r c e s . T h e s e f o r c e s m a y i n c l u d e all m a n n e r o f local, locally d e p e n d e n t
and interested outside parties who support a given entrepreneurial
endeavour.
W i t h the increasing interest in dynamic competitive advantages
and the bases of structural a n d / o r systemic competitiveness, t h e extra-
economic features of places and spaces have come to be increasingly
significant i n t h e d e s i g n a n d p u r s u i t o f e n t r e p r e n e u r i a l strategies. T h u s ,
so-called n a t u r a l e c o n o m i c f a c t o r e n d o w m e n t s b e c o m e less i m p o r t a n t
( d e s p i t e t h e p a t h - d e p e n d e n t a s p e c t s o f t h e p o s i t i o n i n g o f places i n u r b a n
h i e r a r c h i e s ) ; a n d socially c o n s t r u c t e d , socially r e g u l a r i z e d a n d socially
e m b e d d e d f a c t o r s b e c o m e m o r e i m p o r t a n t for c o m p e t i t i v e n e s s . E n t r e -
p r e n e u r i a l cities ( o r o t h e r l o c a l i t i e s ) , t h e r e f o r e , m u s t n o t o n l y p o s i t i o n
t h e m s e l v e s e c o n o m i c a l l y b u t also i n t h e e x t r a - e c o n o m i c s p h e r e s t h a t a r e
s o i m p o r t a n t n o w a d a y s t o effective s t r u c t u r a l o r s y s t e m i c c o m p e t i t i o n .
We can refer to 'glurbanization' h e r e as a trend analogous to 'glocaliza-
t i o n ' (see t a b l e 5.2). W h i l e t h e l a t t e r t e r m r e f e r s t o f i r m s ' s t r a t e g i e s t o
b u i l d g l o b a l a d v a n t a g e b y e x p l o i t i n g local differences, t h e f o r m e r r e f e r s
 190 The Political Economy of State Rescaling

Table 5.2 Glurbanization vs glocalization

Glurbanization Glocalization

Strategic Cities (perliaps as Firms (perhaps in

actors national champions) s t r a t e g i c alliances)

Strategies . Place- and space- Firm- or sector-based

based strategies strategies

New scales of C r e a t e local differences D e v e l o p n e w forms of

activities and t o c a p t u r e flows a n d scalar and/or spatial
temporalities e m b e d mobile capital d i v i s i o n of l a b o u r

Chronotopic Rearticulate time and Rearticulate global and

governance space for structural or l o c a l for d y n a m i c
system competitive competitive
advantages advantages

Source: Jessop and S u m 2000

t o a local, r e g i o n a l o r n a t i o n a l s t a t e ' s s t r a t e g i e s t o b u i l d g l o b a l a d v a n -
tage by restructuring urban spaces to e n h a n c e their international com-
p e t i t i v e n e s s . T h i s m a y also r e p r o d u c e l o c a l d i f f e r e n c e s a n d / o r u b i q u i t i e s
t h a t e n a b l e M N C s t o p u r s u e t h e i r o w n ' g l o c a l i z a t i o n ' strategies.
A n a l o g o u s s t r a t e g i e s c a n b e f o u n d o n o t h e r scales, s u c h a s t h e s u b -
regional and cross-border.
T h e r e a r e s t r o n g a s well a s w e a k f o r m s o f g l u r b a n i z a t i o n s t r a t e g i e s .
W h e r e a s t h e f o r m e r a r e typical o f t h e l e a d i n g cities o r r e g i o n s i n u r b a n
and regional hierarchies, the latter are m o r e often pursued by 'ordinary
c i t i e s ' a n d ' o r d i n a r y r e g i o n s ' ( A m i n a n d G r a h a m 1997). S t r a t e g i e s differ
i n a t l e a s t t h r e e r e s p e c t s : their r e s p e c t i v e c o n c e p t s a n d d i s c o u r s e s o f
competitiveness, t h e spatial horizons over which they a r e m e a n t to
o p e r a t e a n d t h e i r a s s o c i a t i o n w i t h d i f f e r e n t local c o n t e x t s a n d p o s i t i o n s
i n p r e v a i l i n g scalar h i e r a r c h i e s . W h a t t h e y s h a r e i s t h e k e y r o l e o f
political authorities in t h e i r overall framing and p r o m u l g a t i o n . At t h e
level o f c i t i e s a n d r e g i o n s w e c a n d i s t i n g u i s h s e v e n m a i n options:''

1 T h e first o p t i o n is to w i d e n or d e e p e n t h e scalar division of l a b o u r

w i t h i n a n i n t e g r a t e d , v e r t i c a l l y n e s t e d set o f scales. T h i s i n v o l v e s
pursuit of some form of 'structured complementarity' by building
f a v o u r a b l e l i n k a g e s t o t h e w i d e r e c o n o m y i n a n e x p a n d i n g set o f
w i d e r scales o f e c o n o m i c a n d p o l i t i c a l a c t i o n . S u c h s t r a t e g i e s m a y b e
p r o m o t e d f r o m a b o v e a n d / o r e m e r g e f r o m b e l o w . Discursively, this
is reflected in a t t e m p t s ' t o p o s i t i o n places c e n t r a l l y on " s t a g e s " of
 The Political Economy of State Rescaling 1 91

v a r i o u s spatial scales: r e g i o n a l , n a t i o n a l , i n t e r n a t i o n a l , g l o b a l ' ( H a l l

a n d H u b b a r d 1 9 9 6 : 1 6 3 - 4 ) . Practically, i t g e n e r a l l y i n v o l v e s p r o m o t -
ing e c o n o m i c d e v e l o p m e n t o n a n y g i v e n scale b y e x p l o i t i n g g r o w t h
d y n a m i c s a t p r o g r e s s i v e l y a s c e n d i n g spatial scales f r o m t h e l o c a l
through the r e g i o n a l a n d national to the supranational
T h e s e c o n d o p t i o n i s t o b u i l d h o r i z o n t a l l i n k a g e s o n t h e s a m e scale
w i t h i n an i n t e g r a t e d , v e r t i c a l l y n e s t e d s e t of scales. T h e r e is a w i d e
r a n g e o f s u c h s t r a t e g i e s r a n g i n g f r o m t h e local t o t h e t r i a d i c scale.
M a n y c r o s s - b o r d e r r e g i o n s e x e m p l i f y this strategy, a s d o t r a n s l o c a l
a l l i a n c e s a n d v i r t u a l r e g i o n s . T h e l a t t e r a r e d e v e l o p e d t o link n o n -
contiguous locales with shared or c o m p l e m e n t a r y interests - such as
t h e cooperation a m o n g the so-called E u r o p e a n F o u r M o t o r s R e g i o n ,
comprising Baden-Wiirttemberg, Rhone-Alpes, L o m b a r d y and
C a t a l o n i a , e a c h of w h i c h is a d y n a m i c c i t y - r e g i o n a s s o c i a t e d w i t h a
m a j o r n o n - c a p i t a l city. I n g e n e r a l , this s t r a t e g y builds o n c o m m o n
territorial interests a n d identities a n d seeks to exploit joint or c o m -
p l e m e n t a r y resources and capacities. T h e aim is either to develop a
critical m a s s t h r o u g h s i m p l e a g g l o m e r a t i o n e c o n o m i e s o r t o d e v e l o p
a d i v i s i o n o f l a b o u r a t t h e s a m e scale r a t h e r t h a n a c r o s s scales.
T h i s h o r i z o n t a l s t r a t e g y c o u l d b e d e v e l o p e d locally f r o m b e l o w
a n d / o r b e p r o m o t e d b y b o d i e s o n l o w e r a n d / o r h i g h e r tiers o r
scales. T h u s cross-border r e g i o n s i n E u r o p e a r e p r o m o t e d b y local
c o m m u n e s a s well a s t h e E u r o p e a n U n i o n .
T h e t h i r d o p t i o n involves b u i l d i n g w h a t o n e m i g h t call ' t r a n s v e r s a l '
l i n k a g e s - t h a t is, b y p a s s i n g o n e o r m o r e i m m e d i a t e l y n e i g h b o u r i n g
scale(s) t o s e e k closer i n t e g r a t i o n w i t h p r o c e s s e s o n v a r i o u s o t h e r
scales. T h i s i s e s p e c i a l l y significant w h e r e f o r e i g n d i r e c t i n v e s t m e n t
( F D I ) a n d p r o d u c t i o n for e x p o r t a r e i n v o l v e d , w i t h t h e result t h a t
links t o a n i m m e d i a t e h i n t e r l a n d o r e v e n t h e n a t i o n a l e c o n o m y
m a y p r o v e far less i m p o r t a n t t h a n t h e c o n n e c t i o n b e t w e e n l o c a l a n d
s u p r a n a t i o n a l scales. S o m e c r o s s - b o r d e r r e g i o n s i n A s i a a r e g o o d
e x a m p l e s o f this s t r a t e g y - n a m e l y , g r o w t h t r i a n g l e s a n d g r o w t h
p o l y g o n s ( P a r s o n a g e 1992; S m i t h 1997; T h a n t e t a l 1998). O t h e r
e x a m p l e s i n c l u d e e x p o r t - p r o c e s s i n g z o n e s , free p o r t s a n d r e g i o n a l
gateways - a l t h o u g h these tend to be located within o n e national ter-
r i t o r y a n d t o b e o r i e n t e d o u t w a r d s (cf. C h e n 1995 o n t h e e v o l u t i o n
o f c r o s s - n a t i o n a l g r o w t h z o n e s ; O h m a e 1995 o n c o n t e m p o r a r y r e g i o n
states).
Resource procurement is another economic development strategy
t h a t i s c o m m o n i n w e a k o r m a r g i n a l localities, s u c h a s i n n e r cities,
declining industrial or coastal regions, a n d so on. This is an u n d e r -
s t a n d a b l e r e s p o n s e i n i n n e r cities, for e x a m p l e , w h i c h suffer f r o m
u r b a n d e p r i v a t i o n , p o o r h o u s i n g , a w e a k fiscal b a s e , a lack of l a n d for
 192 The Political Economy of State Rescaling

p r o p e r t y d e v e l o p m e n t s c h e m e s a n d p o l i t i c a l a n d i n s t i t u t i o n a l frag-
m e n t a t i o n . L o c a l a u t h o r i t i e s i n E u r o p e m a y t u r n t o t h e E U for f u n d s
(for e x a m p l e , t h e v a r i o u s s t r u c t u r a l f u n d s ) ; a n d i n m u l t i - t i e r f e d e r a l
states, t h e y m a y t u r n t o t h e f e d e r a l a u t h o r i t y a s well a s t o s t a t e s .
H o w e v e r , successful b i d s u n d e r a r e s o u r c e - p r o c u r e m e n t s t r a t e g y
typically c o m e with strings attached. This constrains t h e range of
e c o n o m i c initiatives t h a t c a n b e p u r s u e d a n d t h r e a t e n s t h e c o h e r e n c e
o f a n o v e r a l l e c o n o m i c d e v e l o p m e n t p l a n ( H a y 1994).
5 L o c a l i t i e s m a y also p u r s u e p l a c e - m a r k e t i n g via r e g u l a t o r y u n d e r -
c u t t i n g , i n t e r n a t i o n a l ' b e a u t y c o n t e s t s ' for i n w a r d i n v e s t m e n t a n d
i n t e r n a t i o n a l 'ugly sister c o n t e s t s ' for s t r u c t u r a l funds a n d o t h e r
r e s t r u c t u r i n g o r c o m p e n s a t o r y f u n d s for d e c l i n i n g r e g i o n s . T h e t w o
o b v i o u s t a r g e t s for s u c h activities a r e m o b i l e c a p i t a l a n d f u n d i n g
a g e n c i e s ; c e n t r a l s t a t e s o f t e n aid a n d a b e t local a n d r e g i o n a l a u t h o r -
ities i n p u r s u i n g i n w a r d i n v e s t m e n t a n d r e s t r u c t u r i n g f u n d s . R e -
g u l a t o r y u n d e r c u t t i n g is a c o u n t e r p r o d u c t i v e s t r a t e g y , h o w e v e r , for
generating jobs in areas of e c o n o m i c decline and can p r o m o t e a
regulatory race to the bottom. Strong competitive strategies are
g e n e r a l l y far b e t t e r f r o m this v i e w p o i n t , b u t e v e n their r e s u l t i n g
competitive advantages can be c o m p e t e d away (see chapter 3).
6 A sixth o p t i o n is to seek an e s c a p e f r o m scalar or p l a c e - b o u n d con-
straints by locating o n e ' s activities in a b o r d e r l e s s s p a c e of flows or
m o v i n g i n t o ' c y b e r s p a c e ' . B u t this d o e s n o t o b v i a t e t h e n e e d for s o m e
s o r t o f s p a t i a l f i x ( o f f s h o r e i s l a n d s , t a x h a v e n s , etc.) ( s e e H u d s o n 2000;
L e y s h o n a n d Thrift 1999; P a l a n 1998).
7 A s e v e n t h o p t i o n is a p a r t i a l or c o m p l e t e d e c o u p l i n g of a g i v e n scale
f r o m t h e w i d e r division o f l a b o u r a n d w o r l d m a r k e t a n d i s m o s t likely
to be linked with anti-capitalist economic, political and societaliza-
t i o n p r o j e c t s (see c h a p t e r 1).

A n i m p o r t a n t a s p e c t o f m o s t o f t h e s e different s p a t i a l s c a l e s t r a t e g i e s
is their concern to limit competition within the region (structured coher-
e n c e ) t h r o u g h m a r k e t - o r i e n t e d c o o p e r a t i o n a s t h e b a s i s o f m o r e effec-
tive c o m p e t i t i o n b e y o n d t h e r e l e v a n t s p a t i a l scale. T h e s p a t i a l scale o n
w h i c h t h e s e c o m p r o m i s e s wfll b e s t r u c k i s s h a p e d i n p a r t b y t h e n a t u r e
of c o m m o d i t y chains a n d e c o n o m i c clusters, by associated spatial exter-
n a l i t i e s ( i n c l u d i n g district, p r o x i m i t y a n d s y n e r g y a s p e c t s o f a g g l o m e r a -
t i o n e c o n o m i e s ) a n d b y t h e e x i s t i n g f o r m s o f social e m b e d d e d n e s s o f
e c o n o m i c r e l a t i o n s a n d l e a r n i n g p r o c e s s e s ( C a m a g n i 1995; M e s s n e r
1998; cf. P o r t e r 1990; S m i t h 1988).
T h e existence of such e n t r e p r e n e u r i a l projects is no g u a r a n t e e , of
c o u r s e , t h a t r e a l e c o n o m i c spaces w i t h ' s t r u c t u r e d c o h e r e n c e ' a n d s u s -
t a i n a b l e c o m p e t i t i v e a d v a n t a g e s will b e c o n s o l i d a t e d . T h e r e a r e m a n y
 The Political Economy of State Rescaling 1 93

difficulties i n l a u n c h i n g a n d c o n s o l i d a t i n g e n t r e p r e n e u r i a l s t r a t e g i e s n o t
only b e c a u s e of t h e i n h e r e n t u n c e r t a i n t y of c o m p e t i t i o n as a c o n t i n u i n g
p r o c e s s , b u t also b e c a u s e o f t h e difficulties o f e c o n o m i c a n d e x t r a -
e c o n o m i c c o o r d i n a t i o n w i t h i n t h e e c o n o m i c s p a c e s identified a s t h e
objects o f e n t r e p r e n e u r i a l strategies. N o r i s t h e r e a n y r e a s o n t o e x p e c t
t h a t all t h e factors n e e d e d for a successful r e g i o n a l or local s t r a t e g y will
b e f o u n d w i t h i n t h e b o r d e r s o f t h e e c o n o m i c s p a c e t h a t p r o v i d e s its
primary location.

5. Trends in the State

C h a n g e s i n t h e s t a t e ' s r o l e i n c a p i t a l a c c u m u l a t i o n a n d social r e p r o d u c -
tion involve changes in the formal articulation and operational a u t o n o -
my of national states. This is s o m e t i m e s discussed in t e r m s of t h e decline
o f t h e n a t i o n a l s t a t e i n t h e face o f g l o b a l i z a t i o n . B u t this i s h i g h l y m i s -
l e a d i n g . F o r we a r e n o t w i t n e s s i n g a singular emergent globalizing flow-
based economy e v o l v i n g in a z e r o - s u m r e l a t i o n s h i p w i t h a plurality of
traditional national territorial states. To a d o p t s u c h a v i e w w o u l d i n v o l v e
t r e a t i n g t h e c u r r e n t , p a r t l y g l o b a l i z a t i o n - i n d u c e d crisis o f t h e t e r r i t o r i a l
n a t i o n a l s t a t e - w h e t h e r i n its p o s t w a r A t l a n t i c F o r d i s t f o r m , d e v e l o p -
m e n t a l statist, n a t i o n a l s e c u r i t y s t a t e , o r o t h e r f o r m s - a s signifying t h e
p r e s e n t a n d f u t u r e i m p o s s i b i l i t y o f a n y o t h e r i n s t i t u t i o n a l f o r m ( s ) for t h e
territorialization of political power. Instead, the a p p r o a c h d e v e l o p e d
h e r e s u g g e s t s t h a t a t t e m p t s will b e m a d e t o r e c o n s t i t u t e t h e n a t i o n a l t e r -
ritorial state in response to globalization and/or to establish n e w terri-
t o r i a l scales a s d o m i n a n t a n d / o r n o d a l p o i n t s i n t h e i n s t i t u t i o n a l i z a t i o n
of political power. This expectation is reinforced if we n o t e that t h e West-
p h a l i a n state was never as rigid or as c o m p l e t e as 'the fetishization of
s p a c e i n t h e s e r v i c e o f t h e [ n a t i o n a l ] s t a t e ' m i g h t s u g g e s t ( L e f e b v r e 1978;
cf. 1 9 9 1 : 2 8 0 - 2 ; cf. O s i a n d e r 2001). M o r e o v e r , o n c e w e a c c e p t t h a t t h e
delimitation of t h e state as an institutional ensemble is b o t h internal
t o t h e p o l i t i c a l s y s t e m a n d c o n t i n g e n t , w e c a n also assess w h e t h e r n o n -
territorialized forms of government-governance might acquire increased
significance i n t h e e x e r c i s e o f p o l i t i c a l p o w e r . T h e s e p o i n t s a r e r e i n f o r c e d
w h e n w e r e c a l l t h e c o n s t i t u t i v e i n c o m p l e t e n e s s o f t h e capitalist e c o n o m y
a n d its d e p e n d e n c e o n e x t r a - e c o n o m i c factors. F o r this suggests t h a t
e c o n o m i c g l o b a l i z a t i o n will r e q u i r e significant shifts i n t h e i n s t i t u t i o n a l
f o r m s , p r i n c i p a l activities, a n d p r i m a r y scales i n a n d t h r o u g h w h i c h its
extra-economic supports are secured.
T o c o n s i d e r t h e s c o p e for d e - a n d r e - t e r r i t o r i a l i z a t i o n o f f o r m s o f s t a t e
p o w e r a n d / o r for t h e substitution of non-territorial f o r m s of political
p o w e r , w e m u s t r e c o n s i d e r t h e a l l e g e d c h a l l e n g e t o n a t i o n a l states p o s e d
 1 94 The Political Economy of State Rescaling

b y g l o b a l i z a t i o n . T h e s c o p e for i n c r e a s e d e c o l o g i c a l d o m i n a n c e o f t h e
g l o b a l i z i n g e c o n o m y d e p e n d s o n t h e capacities o f leading e c o n o m i c
forces t o d i s t a n t i a t e a n d / o r c o m p r e s s t i m e - s p a c e i n w a y s t h a t e s c a p e t h e
c o n t r o l c a p a c i t i e s o f m o s t s t a t e - b a s e d a n d s t a t e - o r i e n t e d p o l i t i c a l forces.
F o r t h e r e a r e few, i f a n y , i n d i v i d u a l states w i t h a n e f f e c t i v e global r e a c h
a n d a n ability t o c o m p r e s s t h e i r r o u t i n e s t o m a t c h t h e t i m e - s p a c e o f fast
h y p e r m o b i l e capital. This creates a growing disjunction b e t w e e n the
latter's spatio-temporal horizons and routines and those of most con-
t e m p o r a r y states a n d , t h r o u g h t h e i r i m p a c t o n t h e o v e r a l l d y n a m i c o f t h e
capitahst economy, a growing disjunction b e t w e e n a potentially global
s p a c e of flows a n d t h e p l a c e - b o u n d e d n e s s of a t e r r i t o r i a l l y s e g m e n t e d
p o l i t i c a l s y s t e m . T e m p o r a l l y , this l i m i t s t h e t y p i c a l state's a b i l i t y t o r e a c t
a c c o r d i n g t o its o w n r o u t i n e s a n d m o d e s o f c a l c u l a t i o n - w h i c h i s w h y
m a n y s t a t e m a n a g e r s feel t h e p r e s s u r e s o f g l o b a h z a t i o n a n d b e l i e v e t h e y
h a v e lost o p e r a t i o n a l a u t o n o m y . L i k e w i s e , spatially, g i v e n t h e p o r o s i t y o f
b o r d e r s t o m a n y different k i n d s o f f l o w a n d t h e g r o w i n g m o b i l i t y o f
c a p i t a l o v e r a r a n g e of t r a n s n a t i o n a l scales, states find it i n c r e a s i n g l y
h a r d , s h o u l d t h e y w a n t to, t o c o n t a i n e c o n o m i c , p o h t i c a l a n d social
p r o c e s s e s w i t h i n t h e i r b o r d e r s o r c o n t r o l f l o w s across t h e s e b o r d e r s .
These changes are related in t u r n to a growing fragmentation of the
Westphalian state system to the extent, indeed, that some c o m m e n t a t o r s
s u g g e s t it is b e i n g r e p l a c e d by a n e o - m e d i e v a l s y s t e m (e.g., A n d e r s o n
1996; C e r n y 2000; R u g g i e 1993). H o w e v e r , w h i l e t h e r e a r e o b s e r v a b l e
t r e n d s t o w a r d s f r a g m e n t a t i o n i n r e l a t i o n t o specific f i e l d s , this d o e s n o t
necessarily challenge the m o r e general role of the national state as a
crucial n o d a l point within interscalar articulation (see pp. 201-2).
It is nonetheless q u i t e clear that the changes associated with the glob-
alizing k n o w l e d g e - b a s e d e c o n o m y d o h a v e m a j o r r e p e r c u s s i o n s o n f o r m s
o f r e p r e s e n t a t i o n , i n t e r v e n t i o n , i n t e r n a l h i e r a r c h i e s , social b a s e s a n d
s t a t e p r o j e c t s a c r o s s all levels of s t a t e o r g a n i z a t i o n . In p a r t , this i n v o l v e s
m a j o r c h a n g e s i n r e l a t i o n s o n t h e s a m e o r g a n i z a t i o n a l level. F o r
e x a m p l e , a p a r t f r o m shifts i n t h e r e l a t i v e p o w e r o f t h e e x e c u t i v e , legis-
l a t u r e a n d judiciary, t h e r e a r e also shifts i n t h e r e l a t i v e w e i g h t o f f i n a n -
cial, e d u c a t i o n a l , t e c h n o l o g i c a l , e n v i r o n m e n t a l , social s e c u r h y a n d o t h e r
o r g a n s . B u t r e o r g a n i z a t i o n also e x t e n d s t o t h e r e o r d e r i n g o f r e l a t i o n s
a m o n g d i f f e r e n t p o l i t i c a l tiers, t h e a r t i c u l a t i o n o f g o v e r n m e n t a n d gov-
e r n a n c e and t h e r e b o r d e r i n g of political systems. T h e s e aspects of reor-
g a n i z a t i o n c a n b e s u m m a r i z e d i n t e r m s o f t h r e e sets o f c h a n g e s o r b r o a d
t r e n d s i n t h e o r g a n i z a t i o n o f t h e s t a t e a n d politics. E a c h b r o a d t r e n d i s
also a s s o c i a t e d w i t h a c o u n t e r t r e n d t h a t b o t h qualifies a n d t r a n s f o r m s its
significance for p o l i t i c a l class d o m i n a t i o n a n d a c c u m u l a t i o n a n d , m o r e
specifically, for t h e f o r m o f t h e s t a t e a n d its e c o n o m i c a n d social policies.
T h e s e c o u n t e r t r e n d s c a n b e i n t e r p r e t e d i n t h e f i r s t i n s t a n c e a s specific
 The Political Economy of State Rescaling 195

r e a c t i o n s t o tiie n e w t r e n d s ratiier t i i a n survivals o f earlier p a t t e r n s . T h i s

i s w h y t h e y a r e b e t t e r seen a s c o u n t e r t r e n d s t o t h e t r e n d s , r a t h e r t h a n
vice v e r s a . T h u s , I first p r e s e n t t h e t r e n d s a n d t h e n discuss t h e i r r e s p e c -
tive c o u n t e r t r e n d s .
B e f o r e m o v i n g o n t o this discussion o f t r e n d s a n d c o u n t e r t r e n d s ,
h o w e v e r , it is n e c e s s a r y to c a u t i o n a g a i n s t t r e a t i n g states as if t h e y
w e r e i d e n t i c a l units. F o r t h e f o r m a l s o v e r e i g n t y a c c o r d e d t o n a t i o n a l t e r -
ritorial states i n t h e W e s t p h a l i a n s y s t e m d o e s n o t i m p l y a n y s u b s t a n t i v e
i d e n t i t y o r e q u a l i t y a m o n g t h e m i n t e r m s o f t h e i r c a p a c i t i e s for e x e r -
cising p o w e r i n t e r n a l l y a n d / o r i n t e r n a t i o n a l l y . T h e y will b e p r e s e n t e d
w i t h different p r o b l e m s b y t h e m u l t i s c a l a r , m u l t i t e m p o r a l , m u l t i c e n t r i c
p r o c e s s e s t h a t g e n e r a t e g l o b a l i z a t i o n ; a n d t h e y will h a v e different c a p a c -
ities t o a d d r e s s t h e s e p r o b l e m s a n d r e o r g a n i z e t h e m s e l v e s i n r e s p o n s e .
Moreover, whereas the form-determined condensation of forces in some
s t a t e s l e a d s s t a t e m a n a g e r s t o resist g l o b a l i z a t i o n , o t h e r s t a t e s a r e c l e a r l y
heavily committed to p r o m o t i n g it in o n e form or another. I have already
c o m m e n t e d a b o v e o n d i f f e r e n t s c a l a r s t r a t e g i e s i n this r e g a r d a n d will
n o t r e p e a t t h e s e c o m m e n t s . Suffice t o say t h a t l e a d i n g s t a t e s a r e associ-
a t e d w i t h different g l o b a l i z a t i o n p r o j e c t s a n d t h a t less p o w e r f u l states
will o f t e n seek t o p o s i t i o n t h e i r e c o n o m i c s p a c e s a n d a c t o r s m o r e
f a v o u r a b l y w i t h i n m o r e specific local, r e g i o n a l o r f u n c t i o n a l n i c h e s
within t h e e m e r g i n g global division of labour. In so doing, s o m e states
will r e i n f o r c e t h e i r h e g e m o n y o r d o m i n a n c e w i t h i n t h e i n t e r - s t a t e
s y s t e m , o t h e r s will fall f u r t h e r d o w n t h e i n t e r - s t a t e h i e r a r c h y . I n p a r -
t i c u l a r , a f t e r w o r r i e s w e r e e x p r e s s e d a b o u t its d e c l i n i n g h e g e m o n y i n
t h e w a k e o f t h e crisis o f A t l a n t i c F o r d i s m , t h e U S A h a s clearly g a i n e d
i n g l o b a l i n f l u e n c e i n r e c e n t y e a r s t h r o u g h its identification w i t h a n d
p r o m o t i o n o f g l o b a l i z a t i o n i n its o w n i m a g e .

The denationalization of the state

T h e f i r s t t r e n d i s t h e d e n a t i o n a l i z a t i o n o f t h e state (or, b e t t e r , s t a t e h o o d ) .
T h i s i s reflected e m p i r i c a l l y i n t h e ' h o l l o w i n g o u t ' o f t h e n a t i o n a l s t a t e
apparatus with old and new state capacities being reorganized territori-
ally a n d f u n c t i o n a l l y o n s u p r a n a t i o n a l , n a t i o n a l , s u b n a t i o n a l a n d t r a n s l o -
cal levels a s a t t e m p t s a r e m a d e b y s t a t e m a n a g e r s o n different t e r r i t o r i a l
scales t o e n h a n c e t h e i r r e s p e c t i v e o p e r a t i o n a l a u t o n o m i e s a n d s t r a t e g i c
capacities. Thus s o m e of the particular technical-economic, m o r e nar-
r o w l y political a n d i d e o l o g i c a l f u n c t i o n s o f t h e n a t i o n a l s t a t e a r e b e i n g
relocated to panregionally, plurinationally or internationally scaled state
or i n t e r g o v e r n m e n t a l bodies; o t h e r s are d e v o l v e d to t h e r e g i o n a l or local
level inside t h e n a t i o n a l state; a n d yet others are u n d e r t a k e n by e m e r g -
i n g h o r i z o n t a l n e t w o r k s of p o w e r - r e g i o n a l a n d / o r l o c a l - w h i c h b y p a s s
196 The Political Economy of State Rescaling

c e n t r a l s t a t e s a n d link r e g i o n s o r localities i n s e v e r a l s o c i e t i e s a n d m a y
give r i s e t o t h e d e v e l o p m e n t o f s o - c a l l e d ' i n t e r m e s t i c ' ^ (or i n t e r l o c a l b u t
t r a n s n a t i o n a l i z e d ) p o l i c y - m a k i n g r e g i m e s . T h e s i d e w a y s shift i n v o l v e s
r e l a t i v e l y a u t o n o m o u s c r o s s - n a t i o n a l a l l i a n c e s a m o n g local s t a t e s
with complementary interests and is particularly associated with the
E u r o p e a n i z a t i o n of local g o v e r n m e n t a n d associated f o r m s of p a r t n e r -
s h i p ( A n d e r s e n a n d E l i a s s e n 2 0 0 1 ; B e n i n g t o n 1995, B e n i n g t o n a n d
H a r v e y 1994; J o n s s o n e t a l 2000; K e i l 1998; T o m m e l 1 9 9 2 , 1 9 9 4 , 1 9 9 8 ) :
First, t h e role of s u p r a n a t i o n a l s t a t e systems is e x p a n d i n g . S u c h inter-
national, transnational and panregional bodies are not new in them-
selves: t h e y h a v e a l o n g history. W h a t is significant t o d a y is t h e s h e e r
increase in their number, the growth in their territorial scope and their
a c q u i s i t i o n o f i m p o r t a n t n e w f u n c t i o n s . T h i s reflects t h e s t e a d y e m e r -
g e n c e of a w o r l d society r o o t e d in a g r o w i n g n u m b e r of g l o b a l f u n c t i o n a l
systems ( e c o n o m i c , scientific, legal, p o l i t i c a l , military, etc.) a n d i n w i d e r
r e c o g n i t i o n o f t h e global r e a c h o f old a n d n e w risks. O n e o f t h e m a j o r
a r e a s for this f u n c t i o n a l e x p a n s i o n i s t h e c o n c e r n o f s u p r a n a t i o n a l b o d i e s
with structural or systemic competitiveness within the territories that
t h e y s e e k t o g o v e r n . T h i s g o e s well b e y o n d c o n c e r n w i t h m a n a g i n g i n t e r -
national m o n e t a r y relations, foreign investment or trade to encompass a
w i d e r a n g e o f s u p p l y - s i d e factors, b o t h e c o n o m i c a n d e x t r a - e c o n o m i c i n
nature.
T h e u p w a r d s shift i s p a r t i c u l a r l y a s s o c i a t e d w i t h t h e d e l e g a t i o n o f
powers to supranational bodies and the resurgence of a reinvigorated
and relatively unchallenged A m e r i c a n 'superstate' with revitalized
c a p a c i t i e s t o p r o j e c t its p o w e r o n a g l o b a l scale ( S h a w 2000). A s w e shall
see b e l o w , this c r e a t e s a t e n s i o n b e t w e e n u n i c i t y a n d p a r t i c u l a r i s m i n
t h e s e s u p r a n a t i o n a l b o d i e s , w i t h t h e U S A a b o v e all oscillating b e t w e e n
a t t e m p t s t o unify s u c h b o d i e s u n d e r its h e g e m o n y a n d a t t e m p t s t o u s e
t h e m t o i m p o s e its c u r r e n t l y p r e v a i l i n g p e r c e p t i o n o f its o w n i m m e d i a t e
i n t e r e s t s . T h e s a m e u p w a r d s shift, o n a lesser scale a n d w i t h d i f f e r e n t
d y n a m i c s , i s also r e f l e c t e d i n t h e E U . H o o g h e a n d M a r k s , u p d a t i n g cal-
culations by Schmitter, show that there was an increase in the transfer
o f p o w e r s u p w a r d s t o t h e E U l e v e l i n t w e n t y - e i g h t d i f f e r e n t policy
a r e a s b e t w e e n 1950 a n d 2000. T h i s has b e e n m o s t m a r k e d i n t h e f i e l d
o f e c o n o m i c policy, f o l l o w e d b y i n t e r n a t i o n a l r e l a t i o n s a n d e x t e r n a l
s e c u r i t y / e c o n o m i c policy. It is least m a r k e d in social a n d i n d u s t r i a l
policy, w i t h l e g a l - c o n s t i t u t i o n a l policy also s c o r i n g r e l a t i v e l y l o w o n this
m e a s u r e ( H o o g h e a n d M a r k s 2 0 0 1 : 4 7 - 8 ; cf. W e s s e l s 2000; see also s e c t i o n
8 below).
Such m o v e m e n t s do not, however, a m o u n t to t h e rise of a 'global state'
- at l e a s t if t h e c o n c e p t of t h e s t a t e is to r e t a i n its c o r e m e a n i n g of t h e
t e r r i t o r i a l i z a t i o n of a c e n t r a l i z e d p o l i t i c a l a u t h o r i t y - s u c h t h a t a g l o b a l
 The Political Economy of State Rescaling 197

s t a t e w o u l d b e c o m e e q u i v a l e n t t o a single ' w o r l d s t a t e ' . N o r m a l l y , w h a t

o n e finds, as P o u l a n t z a s (1974b, 1975) r e m a r k s , is a p a r t i a l a n d c o n d i -
tional delegation of such functions in order to i m p r o v e e c o n o m i c policy
coordination across different states as part a n d parcel of each national
state's n e w r e s p o n s i b i l i t i e s for m a n a g i n g t h e p r o c e s s o f i n t e r n a t i o n a l -
ization. Moreover, even w e r e a world state to be established, it would
i n e v i t a b l y b e s u b j e c t t o a t e n s i o n b e t w e e n its j u r i d i c o - p o l i t i c a l c l a i m t o
unicity (sovereignty) and t h e harsh reality of plurality (particularistic
c o m p e t i t i o n a m o n g s t a t e s o n o t h e r scales for i n f l u e n c e i n its c o u n s e l s
a n d d e l i b e r a t e l y s e l e c t i v e i m p l e m e n t a t i o n o f its d e c i s i o n s ) . T h i s t e n s i o n
b e t w e e n unicity and plurality is precisely what we find in the E u r o p e a n
case, w h i c h i s f u r t h e r c o m p l i c a t e d b y its m u l t i - t i e r e d c h a r a c t e r . I t i s for
this r e a s o n t h a t i n t e r s t a t e politics on a global scale is often m a r k e d by
t h e i n t e r n a t i o n a l h e g e m o n y of a n a t i o n a l s t a t e t h a t seeks to d e v e l o p a
h e g e m o n i c political s t r a t e g y for t h e global s y s t e m - w i t h t h a t h e g e m o n y
a r m o u r e d , of course, by various forms of sanction and resting on a
complex articulation of governmental powers and other forms of gover-
nance. This is evident in the postwar period in the changing forms of the
continuing h e g e m o n y of the U S A within the capitalist bloc and applies
with particular force following t h e e n d of t h e Second Cold War, w h e n
t h e U S A b e c a m e t h e sole s u p e r p o w e r a n d b e g a n t o e x t e n d its i n f l u e n c e
i n t o t h e f o r m e r Soviet b l o c a n d t h e Soviet s p h e r e o f influence. E v e n i n
this l a t e r p e r i o d , h o w e v e r , w e m u s t b e careful t o d i s t i n g u i s h t h e e x t e n t
t o w h i c h t h e A m e r i c a n w r i t s h a p e s different policy f i e l d s ( c o n t r a s t i n g
m i l i t a r y policy, for e x a m p l e , w i t h social p o l i c y ) . M o r e generally, t h e
t e n s i o n b e t w e e n u n i c i t y a n d p l u r a l i s m i s also e v i d e n t i n t h e g r o w i n g
disputes between US multilateralism and unilateralism respectively in a
wide range of international regimes.
S e c o n d , i n t a n d e m w i t h t h e rise o f i n t e r n a t i o n a l s t a t e a p p a r a t u s e s , w e
f i n d a s t r o n g e r r o l e for r e g i o n a l a n d / o r l o c a l s t a t e s . D u r i n g t h e F o r d i s t
era, local states o p e r a t e d as extensions of t h e K W N S a n d regional policy
was mainly oriented to (re)locating industry in the interests of spread-
i n g full e m p l o y m e n t a n d r e d u c i n g i n f l a t i o n a r y p r e s s u r e s t h a t h a d a r i s e n
as a r e s u l t of l o c a l i z e d o v e r h e a t i n g . S u c h s t a t e s p r o v i d e d local infra-
structure to support Fordist mass production, p r o m o t e d collective con-
s u m p t i o n a n d l o c a l w e l f a r e s t a t e p o l i c i e s a n d , i n s o m e cases ( e s p e c i a l l y
a s t h e crisis o f F o r d i s m u n f o l d e d ) , e n g a g e d i n c o m p e t i t i v e s u b s i d i e s t o
a t t r a c t n e w j o b s o r p r e v e n t t h e loss o f e s t a b l i s h e d j o b s . I n t h e w a k e
o f t h e F o r d i s t crisis, h o w e v e r , l o c a l e c o n o m i c activities i n v o l v e g r e a t e r
emphasis on e c o n o m i c regeneration and competitiveness. The central
concern has b e c o m e h o w state institutions can improve the competi-
tiveness of regional a n d local e c o n o m i e s in the e m e r g i n g world economy.
T h e r e i s g r o w i n g i n t e r e s t i n r e g i o n a l l a b o u r m a r k e t policies, e d u c a t i o n
198 The Political Economy of State Rescaling

a n d training, t e c l i n o l o g y transfer, local v e n t u r e capital, i n n o v a t i o n

centres, science p a r k s , a n d s o o n ( s e e c h a p t e r 3 ) . T h e d e c l i n i n g ineffec-
tiveness a n d legitimacy of t h e n a t i o n a l s t a t e in t h e face of F o r d i s t crisis
h a d a l r e a d y led i n t h e late 1970s t o e n h a n c e d roles for r e g i o n a l a n d local
s t a t e s a s n e w activities w e r e a d o p t e d b o t h t o c o m p e n s a t e f o r t h e crisis
a n d t o s e e k n e w w a y s o u t ( M o u l a e r t e t al. 1988; v a n H o o g s t r a t e n 1983).
This is even clearer today. I n d e e d , as n a t i o n a l a n d international states
r e t r e a t from some k e y economic functions, we find m o r e interventionist
policies a t t h e r e g i o n a l , u r b a n a n d local levels ( B r e n n e r 1998, 1999b,
2000; G o u g h a n d E i s e n s c h i t z 1996) a s well a s a n i n c r e a s i n g r e s o r t b y
c a p i t a l itself t o n e t w o r k i n g a n d o t h e r f o r m s o f p a r t n e r s h i p t o s e c u r e
these requirements. This transfer of powers d o w n w a r d s is not confined
t o e c o n o m i c i n t e r v e n t i o n b u t affects a w i d e r a n g e o f o t h e r policy areas.
F o r e x a m p l e , H o o g h e a n d M a r k s (2001) r e p o r t t h a t n o E U m e m b e r s t a t e
h a s b e c o m e m o r e c e n t r a l i z e d a f t e r 1980 a n d t h a t m a n y h a v e d e c e n t r a l -
ized a u t h o r i t y to a r e g i o n a l tier of g o v e r n m e n t .
T h i r d , closely c o n n e c t e d t o t h e f i r s t t w o c h a n g e s , t h e r e a r e g r o w i n g
links a m o n g local states. This t r e n d i s r e i n f o r c e d b y t h e c e n t r a l s t a t e ' s
i n a b i l i t y t o p u r s u e sufficiently d i f f e r e n t i a t e d a n d sensitive p r o g r a m m e s
t o t a c k l e t h e specific p r o b l e m s o f p a r t i c u l a r localities. I t t h e r e f o r e
devolves such tasks to local states a n d provides t h e latter with general
s u p p o r t and resources. Indeed, ' o n e of the m o s t interesting political
d e v e l o p m e n t s since t h e 1970s h a s b e e n t h e e r r a t i c b u t g r a d u a l shift o f
e v e r m o r e local a u t h o r i t i e s f r o m a n i d e n t i f i c a t i o n o f t h e i r r o l e i n p u r e l y
national terms towards a n e w interest in transnational relationships'
( D y s o n 1989: 1). I n E u r o p e this i n v o l v e s b o t h v e r t i c a l l i n k s w i t h E U
i n s t i t u t i o n s , especially t h e E u r o p e a n C o m m i s s i o n , a n d d i r e c t l i n k s
a m o n g local a n d r e g i o n a l a u t h o r i t i e s i n m e m b e r s t a t e s . T h e s e a r c h for
cross-border support is s t r e n g t h e n e d to the extent that the central state
pursues a m o r e neoliberal strategy, b u t it can be found in other coun-
tries t o o ( J o n s s o n e t al. 2000; P e r k m a n n a n d S u m 2002). S i m i l a r t r e n d s
a r e d i s c e r n i b l e i n E a s t A s i a ( n o t a b l y i n links b e t w e e n H o n g K o n g , M a c a o
a n d G u a n g d o n g , a n d i n t h e so-called g r o w t h t r i a n g l e f o r m e d b y S i n g a -
p o r e , J o h o r e a n d R i a u ) . T h i s t h i r d t r e n d i s also d e v e l o p i n g i n N o r t h
A m e r i c a , with striking examples in the expansion of t r a n s b o r d e r coop-
e r a t i o n o f l i n k e d cities a l o n g t h e U S - M e x i c a n b o u n d a r y , t h e p r o m o t i o n
of C a s c a d i a as a m u l t i s t a t e / p r o v i n c e c r o s s - b o r d e r r e g i o n i n v o l v i n g a
c o r r i d o r i n t h e N o r t h w e s t A m e r i c a n coast s t r e t c h i n g f r o m V a n c o u v e r t o
S e a t t l e a n d P o r t l a n d , a n d a m o r e g e n e r a l i n t e g r a t i o n o f cities a n d r e g i o n s
a l o n g t h e U S - C a n a d i a n b o r d e r ( B l a t t e r 2 0 0 1 ; S p a r k e s 2002). T h i s
g e n e r a l p h e n o m e n o n h a s led D u c h a c e k (1990) t o talk o f t h e s p r e a d
of 'perforated sovereignty' as nations become m o r e open to trans-
s o v e r e i g n c o n t a c t s a t b o t h local a n d r e g i o n a l level.
 The Political Economy of State Rescaling 199

The d e s t o t i z o t i o n of the p o l i t i c a l system

T h e r e is also a t r e n d t o w a r d s t h e d e s t a t i z a t i o n of t h e p o h t i c a l s y s t e m .
While denationalization concerns the territorial dispersion of the
n a t i o n a l state's activities ( h e n c e d e - a n d r e t e r r i t o r i a l i z a t i o n ) , d e s t a t i z a -
tion involves r e d r a w i n g the p u b l i c - p r i v a t e divide, reallocating tasks, a n d
rearticulating the relationship b e t w e e n organizations and tasks across
this d i v i d e o n w h a t e v e r t e r r i t o r i a l s c a l e ( s ) t h e s t a t e i n q u e s t i o n acts. I n
other words, some of the particular technical-economic, narrowly politi-
cal a n d i d e o l o g i c a l f u n c t i o n s p r e v i o u s l y o r n e w l y p e r f o r m e d b y s t a t e s
( o n a n y level) h a v e b e e n t r a n s f e r r e d e n t i r e l y t o , o r s h a r e d w i t h , o t h e r
( t h a t is, p a r a s t a t a l , n o n - g o v e r n m e n t a l , p r i v a t e o r c o m m e r c i a l ) a c t o r s ,
institutional arrangements or regimes. At stake here is the increased
i m p o r t a n c e o f q u i t e v a r i e d f o r m s ( a n d levels) o f p a r t n e r s h i p b e t w e e n
official, p a r a s t a t a l a n d N G O s i n m a n a g i n g e c o n o m i c a n d social r e l a t i o n s
in which the state is often only first a m o n g equals. This leads to a blur-
ring of the division b e t w e e n public and private, to conscious d e p l o y m e n t
o f t h e p r i n c i p l e o f subsidiarity, t o a n i n c r e a s e d r o l e for t h e i n f o r m a l
s e c t o r as well as p r i v a t e e n t e r p r i s e ( e s p e c i a l l y in t h e d e l i v e r y of w e l f a r e
a n d collective c o n s u m p t i o n ) a n d t o i n c r e a s e d r e l i a n c e o n m e c h a n i s m s
s u c h a s ' r e g u l a t e d s e l f - r e g u l a t i o n ' a n d officially a p p r o v e d ' p r i v a t e i n t e r -
est g o v e r n m e n t ' ( S t r e e c k a n d S c h m i t t e r 1985). I t i s also h n k e d t o t h e
s t a t e ' s g r o w i n g i n v o l v e m e n t i n d e c e n t r e d societal g u i d a n c e s t r a t e g i e s
r a t h e r t h a n t h e e x e r c i s e o f its s o v e r e i g n p o w e r s o f c e n t r a l i z e d i m p e r a -
t i v e c o o r d i n a t i o n ( M a t z n e r 1994; W i l l k e 1992). I n this s e n s e i t i n v o l v e s
growing recognition of interdependence, the division of knowledge, and
t h e n e e d for m u t u a l l e a r n i n g , reflexivity a n d n e g o t i a t e d c o o r d i n a t i o n .
This t r e n d o c c u r s o n v a r i o u s t e r r i t o r i a l scales a n d a c r o s s v a r i o u s
f u n c t i o n a l d o m a i n s a n d h a s o f t e n b e e n s u m m a r i z e d a s t h e shift f r o m
g o v e r n m e n t t o g o v e r n a n c e (see c h a p t e r 6).
G o v e r n m e n t s h a v e always relied on o t h e r agencies to aid t h e m in
realizing state objectives or projecting state p o w e r b e y o n d t h e formal
state apparatus. T h e r e is nothing n e w a b o u t parallel p o w e r n e t w o r k s that
cross-cut a n d unify t h e s t a t e a p p a r a t u s a n d c o n n e c t i t t o o t h e r social
forces. B u t this r e l i a n c e h a s b e e n r e o r d e r e d a n d i n c r e a s e d . T h e r e l a t i v e
w e i g h t o f g o v e r n a n c e h a s i n c r e a s e d o n all levels - i n c l u d i n g n o t o n l y a t
t h e supranational a n d local or regional levels b u t also in t h e transterri-
t o r i a l a n d i n t e r l o c a l f i e l d s . T h i s n e e d n o t e n t a i l a loss i n t h e p o w e r o f
government, however, as if p o w e r were a zero-sum resource r a t h e r t h a n
a social r e l a t i o n . T h u s r e s o r t t o g o v e r n a n c e c o u l d e n h a n c e t h e s t a t e ' s
capacity to project its influence a n d secure its objectives by mobilizing
k n o w l e d g e a n d p o w e r r e s o u r c e s f r o m influential n o n - g o v e r n m e n t a l p a r t -
n e r s o r s t a k e h o l d e r s . M o r e o v e r , i n t h e l i g h t o f shifts i n t h e b a l a n c e o f
200 The Political Economy of State Rescaling

class forces, fhe furn fo g o v e r n a n c e c o u l d also be parf of a m o r e c o m p l e x

p o w e r struggle to protect key decisions from popular-democratic control
(cf. P o u l a n t z a s 1978) a n d / o r to socialize risks in f a v o u r of p r i v a t e c a p i t a l
This strategic reorientation from government to governance is espe-
cially n o t i c e a b l e i n t h e c a s e o f t h e E U a n d i s r e f l e c t e d i n a c o m m o n
c o n c e p t t h a t c a p t u r e s b o t h this a n d t h e p r e c e d i n g t r e n d , n a m e l y , m u l t i -
level g o v e r n a n c e . It is difficulties in E u r o p e a n s t a t e - b u i l d i n g as m u c h as
c h a n g e s i n t h e E u r o p e a n e c o n o m y t h a t h a v e p r o m p t e d this r e o r i e n t a -
tion. Thus the current d e v e l o p m e n t of supranational E u r o p e a n gover-
n a n c e involves far m o r e than the e m e r g e n c e of a federal, confederal or
intergovernmental apparatus. It also involves the active constitution of
o t h e r s u p r a n a t i o n a l l y o r g a n i z e d a n d / o r o r i e n t e d e c o n o m i c a n d social
p a r t n e r s - w h e t h e r functional or territorial - and their integration into
l o o s e l y c o u p l e d , f l e x i b l e p o l i c y - m a k i n g n e t w o r k s t h r o u g h specific
c o m m u n i c a t i o n , n e g o t i a t i o n a n d d e c i s i o n - m a k i n g c h a n n e l s (see T o m m e l
1994:14). I n d e e d , 'the E u r o p e a n Commission places a major emphasis
on the formation of n e t w o r k s as a m e a n s of encouraging the achieve-
m e n t o f t h e difficult goal o f E u r o p e a n i n t e g r a t i o n a n d . . . c o h e s i o n '
( C o o k e a n d M o r g a n 1993: 554). E s p e c i a l l y i n t e r e s t i n g h e r e i s t h e c o m -
m i t m e n t t o m u l t i - t i e r e d n e t w o r k s i n v o l v i n g b o t h t e r r i t o r i a l a n d func-
tional actors.
The same trend towards governance is found on the national,
r e g i o n a l - l o c a l a n d t r a n s l o c a l ( o r ' i n t e r m e s t i c ' ) levels. H a v i n g m a d e t h e
case i n g e n e r a l t e r m s a n d i l l u s t r a t e d i t f r o m t h e E u r o p e a n level, h o w e v e r ,
I s i m p l y r e f e r t o t h e l a r g e l i t e r a t u r e o n r e g i o n a l a n d local g o v e r n a n c e
a n d its r o l e i n p r o m o t i n g t h e 'joint p r o d u c t ' o f e n d o g e n o u s e c o n o m i c
d e v e l o p m e n t b a s e d o n e n h a n c e d s t r u c t u r a l c o m p e t i t i v e n e s s (see also p p .
1 8 9 - 9 0 o n cities). T h e s t r e n g t h e n i n g o f local a n d r e g i o n a l g o v e r n a n c e i s
l i n k e d w i t h t h e r e o r g a n i z a t i o n of t h e local state as n e w f o r m s of local p a r t -
n e r s h i p e m e r g e to guide a n d p r o m o t e t h e d e v e l o p m e n t of local resources.
F o r e x a m p l e , local u n i o n s , local c h a m b e r s o f c o m m e r c e , l o c a l v e n t u r e
capital, local e d u c a t i o n bodies, local r e s e a r c h centres and local states m a y
enter into a r r a n g e m e n t s to r e g e n e r a t e t h e local economy.

The internationalization of policy regimes

A t h i r d t r e n d in t h e o r g a n i z a t i o n of t h e s t a t e a n d pcjlitics is a c o m p l e x
o n e t h a t l e a n s t o w a r d s t h e i n t e r n a t i o n a l i z a t i o n o f policy r e g i m e s . T h e
international context of domestic state action (whether national, regional
or local) has e x p a n d e d to include a widening r a n g e of extraterritorial or
t r a n s n a t i o n a l factors a n d p r o c e s s e s ; a n d i t h a s also b e c o m e m o r e signifi-
c a n t s t r a t e g i c a l l y for d o m e s t i c policy. T h e key p l a y e r s i n policy r e g i m e s
h a v e also e x p a n d e d t o i n c l u d e f o r e i g n a g e n t s a n d i n s t i t u t i o n s a s s o u r c e s
o f policy i d e a s , policy d e s i g n a n d i m p l e m e n t a t i o n (cf. G o u r e v i t c h 1978;
 The Political Economy of State Rescaling 201

D o e r n e t al. 1996). Ttiis t r e n d i s r e f l e c t e d i n e c o n o m i c a n d social p o l i -

cies a s t h e s t a t e b e c o m e s m o r e c o n c e r n e d w i t h i n t e r n a t i o n a l c o m p e t i -
tiveness i n t h e w i d e s t s e n s e . A n d i t affects local a n d r e g i o n a l s t a t e s b e l o w
t h e n a t i o n a l level a s well a s t h e d e v e l o p m e n t o f s u p r a n a t i o n a l s t a t e for-
m a t i o n s a n d t h e d e v e l o p m e n t o f i n t e r n a t i o n a l r e g i m e s . I t i s also e v i d e n t
in the development of the interregional and cross-border linkages
c o n n e c t i n g local and regional a u t h o r i t i e s a n d g o v e r n a n c e regimes in
different n a t i o n a l f o r m a t i o n s . Finally, this t r e n d is r e f l e c t e d in a n e w
field of e n q u i r y t h a t

embraces not only the advice offered to national governments by supra-

national agencies, but also the capacity of those agencies to regulate eco-
nomic activity in the interests of social protection; to redistribute resources
from one country to another to achieve welfare objectives; and, in certain
cases, to provide for social needs at a supranational level. (Deacon and
Hulsel997: 44)

W h i l e D e a c o n a n d H u l s e r e f e r o n l y t o t h e f i e l d o f social policy, t h e s a m e
a r g u m e n t s also o b t a i n for m a n y o t h e r policy f i e l d s .

6. Countertrends in the State

These trends have been deliberately presented in a one-sided and

undialectical m a n n e r . This involves m o r e t h a n a simple reference to w h a t
P o u l a n t z a s d e s c r i b e d a s t h e c o m p l e x ' c o n s e r v a t i o n - d i s s o l u t i o n ' effects
a s s o c i a t e d w i t h successive s t a g e s i n t h e d e v e l o p m e n t o f c a p i t a l i s m .
S u c h effects c e r t a i n l y exist i n s o f a r a s p a s t f o r m s a n d f u n c t i o n s o f t h e
state are conserved and/or dissolved as the state is transformed. The
t e n d e n t i a l e m e r g e n c e o f t h e S W P R , for e x a m p l e , i s l i n k e d w i t h v a r y i n g
' c o n s e r v a t i o n - d i s s o l u t i o n ' effects o n t h e K W N S across different s p h e r e s
o f s t a t e i n t e r v e n t i o n a s w e l l a s a c r o s s d i f f e r e n t n a t i o n a l s o c i e t i e s (see
p p . 2 5 5 - 9 ) . W e h a v e a l r e a d y n o t e d s e v e r a l o f t h e s e effects i n p r e v i o u s
c h a p t e r s . B u t let m e n o w briefly p r e s e n t t h e s e c o u n t e r t r e n d s ( s e e
b o x 5.1).
Countering the denationalization of statehood are the attempts of
n a t i o n a l s t a t e s t o r e t a i n c o n t r o l o v e r t h e a r t i c u l a t i o n o f different s p a t i a l
scales. Whflst i t m i g h t b e t h o u g h t t h a t t h e r e i s a s i m p l e c o n t i n u i t y o f func-
tion in t h i s r e g a r d , I w o u l d a r g u e t h a t a m a j o r d i s c o n t i n u i t y has b e e n
i n t r o d u c e d t h r o u g h t h e c u r r e n t r e l a t i v i z a t i o n o f scale. N o n e t h e l e s s , i n t h e
absence of a supranational state with equivalent p o w e r s to those of t h e
national state, the denationalization of statehood is linked to attempts
o n t h e p a r t o f n a t i o n a l states t o r e c l a i m p o w e r b y m a n a g i n g t h e r e l a -
t i o n s h i p a m o n g d i f f e r e n t scales o f e c o n o m i c a n d political o r g a n i z a t i o n .
T h u s loss o f a u t o n o m y e n g e n d e r s b o t h t h e n e e d for s u p r a n a t i o n a l
202 The Political E c o n o m y of State Rescaling

Box 5.' TicnJs and countertrends in stale rr.slructuriny

• d e n a t i o n a l i z a t i o n of t h e s t a t e ;
s p s i d e s t a t i z a t i o n of politics;
• n i U i n a l i n n a i/.iln>n il pnlicv i v ^ M n i c v

JlllMintertrends
• i n c r e a s e d s c o p e for s t a t e in i n t e r s c a l a r a r t i c u l a t i o n ;
• i n c r e a s e d role for s t a t e in m e t a g o v e r n a n c e ;
• oini.Alnif llie Icims and i m p L m u i l . luin ol nilcrnalinral

iisiiii:fiiiiliii:?lsSB|lH

c o o r d i n a t i o n a n d t h e s p a c e for s u b n a t i o n a l r e s u r g e n c e , b u t i t a l s o
e x t e n d s t h e r e b y t h e s c o p e f o r t h e n a t i o n a l s t a t e itself t o m e d i a t e b e t w e e n
t h e i n c r e a s i n g n u m b e r o f significant s u p r a - a n d t h e s u b n a t i o n a l s c a l e s o f
a c t i o n . In this c o n t e x t , using a d i s t i n c t i o n i n t r o d u c e d by C o l l i n g e ( 1 9 9 9 )
b e t w e e n d o m i n a n t a n d n o d a l s c a l e s o f o r g a n i z a t i o n , w e c a n say t h a t ,
while supranational institutions m a y have b e c o m e m o r e comprehensive
a n d inclusive in t h e r a n g e of activities that they u n d e r t a k e a n d / o r seek
t o influence, a n d w h i l e a n i n c r e a s i n g r a n g e o f s t a t e activities m a y b e
delegated d o w n w a r d s and/or sideways, a n y tendency towards increasing
dominance of t h e s u p r a n a t i o n a l level n e e d n o t d e t r a c t f r o m t h e nodal
role of the national state in the expanding w e b of state powers. In short,
w h i l e t h e n a t i o n a l s t a t e m a y h a v e lost s o m e f o r m a l s o v e r e i g n t y , i t c o u l d
well r e t a i n a k e y r o l e in i n t e r s c a l a r a r t i c u l a t i o n .
C o u n t e r i n g t h e shift t o w a r d s g o v e r n a n c e i s g o v e r n m e n t ' s i n c r e a s e d
role in m e t a g o v e r n a n c e . This is especially e v i d e n t in the o p e r a t i o n of t h e
EU a n d in a t t e m p t s to o v e r c o m e decision traps a n d institutional grid-
lock o w i n g t o d i s a g r e e m e n t s b e t w e e n m e m b e r s t a t e s . T h i s i n d i c a t e s t h e
extent to which governance operates in the shadow of government. Gov-
e r n m e n t s ( o n v a r i o u s scales) a r e b e c o m i n g m o r e i n v o l v e d i n o r g a n i z i n g
the self-organization of partnerships, networks and governance regimes
( o n m e t a g o v e r n a n c e , s e e c h a p t e r 6). T h i s s h o u l d n o t b e c o n f u s e d w i t h
t h e survival of state sovereignty as the highest instance of g o v e r n m e n t
n o r w i t h t h e e m e r g e n c e o f s o m e f o r m o f ' m e g a p a r t n e r s h i p ' t o w h i c h all
o t h e r p a r t n e r s h i p s a r e s o m e h o w s u b o r d i n a t e d . I n s t e a d , it i n v o l v e s a shift
from the top-down hierarchical political organization characteristic of
s o v e r e i g n states t o a n e m p h a s i s o n s t e e r i n g m u l t i p l e a g e n c i e s , i n s t i t u t i o n s
and systems that are b o t h operationally a u t o n o m o u s from o n e a n o t h e r
and structurally coupled t h r o u g h various forms of reciprocal inter-
 The Political Economy of State Rescaling 203

d e p e n d e n c e . I t falls t o t h e s t a t e t o facilitate collective l e a r n i n g a b o u t

f u n c t i o n a l l i n k a g e s a n d m a t e r i a l i n t e r d e p e n d e n c i e s a m o n g different sites
a n d s p h e r e s of a c t i o n . A n d it falls to p o l i t i c i a n s - local as well as n a t i o n a l
- t o p a r t i c i p a t e i n d e v e l o p i n g t h e s h a r e d visions t h a t c a n link c o m p l e -
m e n t a r y f o r m s o f g o v e r n a n c e a n d m a x i m i z e t h e i r effectiveness. S u c h
tasks are conducted by states n o t only in terms of their contribution
t o p a r t i c u l a r s t a t e f u n c t i o n s , b u t also i n t e r m s o f t h e i r i m p l i c a t i o n s for
political class d o m i n a t i o n a n d social c o h e s i o n .
T h e t e n d e n t i a l shift f r o m g o v e r n m e n t t o g o v e r n a n c e n e e d n o t w e a k e n
t h e s t a t e a p p a r a t u s a s a w h o l e o r u n d e r m i n e its c a p a c i t y t o p u r s u e
specific s t a t e projects. M u c h will d e p e n d o n t h e w a y s i n w h i c h n e w gov-
e r n a n c e m e c h a n i s m s a r e l i n k e d t o t h e p u r s u i t o f c h a n g e d s t a t e goals i n
n e w c o n t e x t s a n d t o t h e s t a t e ' s c a p a c i t i e s t o p r o j e c t its p o w e r i n t o t h e
w i d e r society. This i s r e f l e c t e d i d e o l o g i c a l l y i n t h e n e o l i b e r a l c l a i m t h a t
an o v e r e x t e n d e d s t a t e is a w e a k s t a t e - w h i c h i m p l i e s t h a t o n l y by
confining its activities t o t h o s e w h i c h t h e s t a t e a p p a r a t u s a l o n e c a n ( a n d
m u s t ) d o c a n i t b e s u r e t o p e r f o r m e v e n t h e s e effectively. I n b o t h r e s p e c t s
i t i s i m p o r t a n t t o resist t h e i d e a l i s t i c a n d e r r o n e o u s i m p r e s s i o n t h a t
expansion of non-governmental regimes unplies that the state is no
longer necessary. I n d e e d , t h e state retains an i m p o r t a n t role precisely
because of the d e v e l o p m e n t of such regimes. F o r it is n o t only an impor-
t a n t a c t o r i n m a n y i n d i v i d u a l g o v e r n a n c e m e c h a n i s m s , b u t also r e t a i n s
r e s p o n s i b i l i t y for t h e i r o v e r s i g h t i n t h e light o f t h e o v e r a l l b a l a n c e o f
class f o r c e s a n d t h e m a i n t e n a n c e o f social c o h e s i o n .
S o m e w h a t ambiguously countering yet reinforcing the international-
i z a t i o n of p o l i c y r e g i m e s is t h e g r o w i n g i m p o r t a n c e of n a t i o n a l states in
s t r u g g l e s t o s h a p e t h e d e v e l o p m e n t o f i n t e r n a t i o n a l policy r e g i m e s a n d
the m a n n e r in which they operate in the interests of their respective
national capitals and electorates. This needs recognizing because of the
extent to which the national state previously managed the insertion of
national economic space into the wider economy. Nonetheless, o n e should
n o t m i n i m i z e t h e r e a l d i s c o n t i n u i t i e s i n t h e state's c u r r e n t c o n c e r n s for
the structural competitiveness of nationally based capitals at h o m e and
abroad that are d u e to the new forms of regionalization-globalization.
I n d e e d , s m a l l o p e n e c o n o m i e s i n this p l u r i n a t i o n a l s y s t e m w e r e c o m -
mitted to maintaining the structured coherence of their national eco-
nomies despite their d e p e n d e n c e on exports. T h e y appeared to have
m a n a g e d their national economies and secured the unity of the p o w e r
b l o c a n d p e o p l e d e s p i t e levels o f i n t e r n a t i o n a h z a t i o n t h a t w o u l d n o w b e
said t o i m p l y a loss o f s o v e r e i g n t y . T h i s s u g g e s t s t h a t t h e p o w e r o f t h e
n a t i o n a l s t a t e i n t h e f a c e o f i n t e r n a t i o n a l i z a t i o n d e p e n d s criticafly o n t h e
c o h e s i o n o f t h e p o l i t i c a l e s t a b l i s h m e n t o r p o w e r b l o c . T h i s said, s t a t e
p o w e r i n this r e g a r d will also b e s h a p e d , o f c o u r s e , b y t h e d y n a m i c s o f
204 The Political Economy of State Rescaling

economic hegemony, economic d o m i n a t i o n and ecological d o m i n a n c e

n o t e d in c h a p t e r 1.
T h i s brief g e n e r a l discussion o f t h e t h r e e t r e n d s a n d c o u n t e r t r e n d s h a s
d i s r e g a r d e d t h e i r i n d i v i d u a l a n d c o m b i n e d r e a l i z a t i o n f r o m case t o case.
T h u s , m y c o m m e n t s o n d e n a t i o n a l i z a t i o n i g n o r e i m p o r t a n t differences
b e t w e e n federal s t a t e s , w i t h clear c o n s t i t u t i o n a l p o w e r s a l l o t t e d t o
n a t i o n a l a n d r e g i o n a l levels o f s t a t e o r g a n i z a t i o n , a n d u n i t a r y s t a t e s , such
a s B r i t a i n , w h e r e t h e local state e x e r c i s e s o n l y s u c h p o w e r s a s a r e cur-
r e n t l y r e q u i r e d o r p e r m i t t e d b y t h e c e n t r a l s t a t e . Similarly, i n d e a l i n g
w i t h t h e shift from g o v e r n m e n t t o g o v e r n a n c e , I n e g l e c t t h e e x t e n t t o
which some K W N S regimes had tripartite m a c r o e c o n o m i c governance
b a s e d o n s t a t e , b u s i n e s s a n d u n i o n s a n d / o r a d o p t e d forms o f r e g u l a t e d
s e l f - r e g u l a t i o n for delivering social welfare. N o n e t h e l e s s I m a i n t a i n t h a t ,
h e r e too, t h e role o f g o v e r n a n c e h a s b e e n s t r e n g t h e n e d a t t h e s a m e t i m e
as the range of p a r t n e r s has changed (see chapter 6). N o r do I consider
t h e differential i m p o r t a n c e o f v a r i o u s g o v e r n a n c e m e c h a n i s m s (for
example, t h e contrast b e t w e e n t h e strengthening of the neocorporatist
' n e g o t i a t e d e c o n o m y ' i n D e n m a r k a n d t h e rise o f n e o l i b e r a l p a r a s t a t a l
o r g a n i z a t i o n s i n B r i t a i n ) . Finally, i n d e a l i n g w i t h i n t e r n a t i o n a l i z a t i o n ,
I i g n o r e differences a m o n g S W P R s , t h e e x t e n t t o w h i c h t h e y c a n b e
d e s c r i b e d a s ' p o s t n a t i o n a l ' , t h e i r c o m b i n a t i o n i n specific cases, a n d t h e
e x t e n t t o w h i c h d i f f e r e n t states a r e m o r e o r less h e g e m o n i c a n d / o r
d o m i n a n t i n defining i n t e r n a t i o n a l p o l i c y r e g i m e s . O b v i o u s l y m o r e
detailed studies of the restructuring and reorientation of the national
state would need to look at each trend in m o r e concrete a n d complex
t e r m s . I t s h o u l d b e e v i d e n t t o o t h a t , i f e a c h o f t h e s e t h r e e t r e n d s c a n vary,
t h e m a n n e r a n d e x t e n t o f their i n t e r a c t i o n m u s t b e e v e n m o r e v a r i e d .
T h i s said, i t i s i m p o r t a n t t o c o n s i d e r all t h r e e t r e n d s i n t h e i r i n t e r a c t i o n
r a t h e r t h a n t o focus o n just o n e o r c o n s i d e r e a c h i n i s o l a t i o n .

7. Rescaling and the KWNS: The Case of Europe

E a c h o f t h e s e t r e n d s i s reflected i n t h e r e s t r u c t u r i n g o f t h e K W N S . T h u s
e c o n o m i c a n d social policies a r e n o w i n c r e a s i n g l y defined a n d p u r s u e d
at several levels r a t h e r t h a n being primarily shaped by the national state
( w i t n e s s t h e social a s well a s t h e e c o n o m i c d i m e n s i o n o f t h e E U , t h e
i m p o r t a n c e o f r e g i o n a l policies, a n d t r a n s n a t i o n a l c o o p e r a t i o n ) ; t h e r e i s
an increased emphasis on public-private partnerships, care in the com-
m u n i t y , self-help, c o o p e r a t i o n , etc.; a n d t h e r e i s a n intensified i n t e r n a -
t i o n a l s t r u g g l e t o s h a p e w e l f a r e r e g i m e s (see t h e a c t i v i t i e s o f t h e O E C D ,
E U , W o r l d B a n k , I M F , W T O , etc., a s well a s i n t e r n a t i o n a l c h a r i t i e s a n d
p h i l a n t h r o p i c o r g a n i z a t i o n s ) . T h i s a r g u m e n t c a n b e i l l u s t r a t e d from t h e
 The Political Economy of State Rescaling 205

EU as the currently most advanced form of multilevel state formation

and/or multilevel governance.
First, i t i s q u i t e c l e a r t h a t t h e E U ' s o v e r a l l e c o n o m i c policy h a s b e e n
reoriented in t h e direction of a S c h u m p e t e r i a n c o m p e t i t i o n strategy
from a n e a r l i e r p e r i o d w h e n i t w a s m o r e s u i t e d t o A t l a n t i c F o r d i s m . T h e
origins o f E u r o p e a n i n t e g r a t i o n c a n b e f o u n d i n p o s t w a r r e c o n s t r u c t i o n
t h a t p r e p a r e d t h e g r o u n d for A t l a n t i c F o r d i s m i n E u r o p e (for details, s e e
v a n d e r Pijl 1984). T h u s , i n a d d i t i o n t o t h e i r initial p o s t w a r r o l e i n r e s t r u c -
t u r i n g i r o n , steel a n d coal i n this c o n t e x t , t h e E u r o p e a n c o m m u n i t i e s
also e m p h a s i z e d t h e c r e a t i o n o f a n i n t e g r a t e d m a r k e t s o t h a t i n d u s t r i a l
e n t e r p r i s e s c o u l d r e a l i z e o p t i m a l e c o n o m i e s o f scale. T h i s i n v o l v e d a n
essentially liberal Ordnungspolitik to c r e a t e a single m a r k e t a n d w a s an
i m p o r t a n t s u p p l e m e n t to t h e pursuit of national Keynesian pohcies -
especially a s t h e T r e a t y o f R o m e left official r e s p o n s i b i l i t y for e m p l o y -
m e n t policy a t t h e n a t i o n a l level. I n d e e d , a s S b r a g i a n o t e s , t h e E U ' s b a s i c
constitutional f r a m e w o r k structurally privileges liberal e c o n o m i c strate-
gies: ' t h e n o r m o f e c o n o m i c l i b e r a l i z a t i o n , e m b e d d e d i n t h e T r e a t y o f
R o m e , was reinforced a n d e l a b o r a t e d in the Single E u r o p e a n A c t and
t h e T r e a t y o f M a a s t r i c h t ' (2000: 224). T h u s e v e n w h e n t h e E U , u n d e r
D e l o r s ' presidency (1985-95), b e g a n to develop a m o r e active e m p l o y -
m e n t policy a n d t o p l a n for a Social E u r o p e a n d t h e n a t t e m p t e d t o insti-
t u t i o n a l i z e t h e s e t w i n r e s p o n s i b i l i t i e s for t h e f i r s t t i m e i n t h e M a a s t r i c h t
T r e a t y (1991), this o c c u r r e d i n a n i n s t i t u t i o n a l c o n t e x t t h a t w a s a l r e a d y
biased in favour of liberalism a n d in an ideological climate that was
d o m i n a t e d by neoliberalism (see pp. 168-9).
I t i s w o r t h n o t i n g h e r e t h a t t h e six i m t i a l m e m b e r s o f t h e E E C - a s
i t w a s t h e n called - h a d m o d e s o f g r o w t h a n d m o d e s o f r e g u l a t i o n
belonging to o n e or other of the regulated or coordinated varieties of
capitalism and either had one or other form of conservative-corporativist
w e l f a r e r e g i m e or, in I t a l y ' s case, h a d a clientelist M e d i t e r r a n e a n w e l f a r e
r e g i m e (cf. H a n t r a i s 2000; R u i g r o k a n d v a n T u l d e r 1996). T h i s s u g g e s t s
that the institutionalized c o m m i t m e n t to economic liberalism might
initially h a v e p r o v i d e d t h e basis for t h e i n t e g r a t i o n a n d c o n s o l i d a t i o n o f
r e g u l a t e d capitalism on a wider scale r a t h e r t h a n serve as t h e m e a n s to
p u s h t h r o u g h a far-reaching liberal p r o g r a m m e . T h e situation changed,
h o w e v e r , a s n e w m e m b e r s w i t h different m o d e s o f g r o w t h , m o d e s o f
regulation and welfare regimes joined the E u r o p e a n Community. This
i n t r o d u c e d g r e a t e r e c o n o m i c a n d social h e t e r o g e n e i t y i n t o t h e E u r o p e a n
e c o n o m y a n d h e l p e d t o shift t h e b a l a n c e o f f o r c e s i n a n e o l i b e r a l d i r e c -
tion. I t h a s b e e n c o r r e s p o n d i n g l y m o r e difficult t o e s t a b l i s h t h e c o n d i -
t i o n s for r e s c a l i n g s t a t e p l a n n i n g f r o m t h e n a t i o n a l t o t h e E u r o p e a n level
o r t o e s t a b l i s h E u r o - c o r p o r a t i s m ( o n E u r o - c o r p o r a t i s m , s e e F a l k n e r 1998
a n d V o b r u b a 1995; o n its limits, S t r e e c k 1995). L i k e w i s e , r a t h e r t h a n
206 The Political Economy of State Rescaling

s e e i n g a r e s c a l i n g o f t h e w e l f a r e s t a t e u p w a r d s t o t h e E U , social p o l i c y
w i t h i n t h e U n i o n largely t a k e s t h e f o r m o f social r e g u l a t i o n . F o r , a s
Majone notes:

[M]easures proposed by the Commission in the social field must be

compatible with the 'economic constitution' of the Community, that is,
with the principle of a liberal economic order. This requirement creates an
ideological climate quite unlike that which made possible the development
of the welfare state in the Member States . .. The economic liberalism
that pervades the Founding Treaty and its subsequent revisions gives
priority to the allocation of public pohcy over distributional objectives.
Hence the best rationale for social initiatives at Community level is one
that stresses the efficiency-improving aspects of the proposed measures.
(1993; 156)

T h e s e difficulties h a v e b e e n r e i n f o r c e d t h r o u g h t h e m a n n e r i n w h i c h
t h e E u r o p e a n M o n e t a r y U n i o n ( E M U ) h a s b e e n i n s t i t u t e d . T h e con-
vergence criteria established under t h e Maastricht Treaty h a v e m a d e it
m o r e difficult for m e m b e r s t a t e s t o b r e a k o u t o f t h e n e o l i b e r a l f r a m e -
w o r k , a n d t h e limited E U b u d g e t p r e v e n t s i t f r o m f i n a n c i n g a m a j o r
expansion of a E u r o p e a n welfare regime. Indeed, in certain respects, the
E M U serves as a n e w 'gold standard', requiring conformity to relatively
rigid n o r m s o f e c o n o m i c a n d p o l i t i c a l c o n d u c t f a v o u r a b l e t o a l i b e r a l
( m o n e y ) c o n c e p t i o n o f e c o n o m i c stability a n d g r o w t h . I n p a r t i c u l a r ,
c o m p l i a n c e w i t h t h e M a a s t r i c h t criteria h a s r e q u i r e d p u b l i c s p e n d i n g
c u t s o r c o n s t r a i n t s , social s e c u r i t y a n d w e l f a r e r e f o r m s , a n d m o r e o r less
significant p r i v a t i z a t i o n o f s t a t e - o w n e d e n t e r p r i s e s a n d c o m m e r c i a l i z a -
t i o n o f p u b l i c services. N o n e t h e l e s s , e v e n i n this c o n t e x t , w e c a n d i s c e r n
a growing concern with active involvement in p r o m o t i n g competitive-
ness, innovation a n d enterprise in line with S c h u m p e t e r i a n perspectives.
A l t h o u g h t h e m a i n t h r u s t o f this i n v o l v e m e n t a c c o r d s well w i t h n e o l i b -
e r a l strategy, i t i s n o n e t h e l e s s f l a n k e d b y n e o s t a t i s t a n d n e o c o r p o r a t i s t
s t r a t e g i e s , i l l u s t r a t e d b y k e y f e a t u r e s o f E U t e c h n o l o g y policies a n d
social p o l i c y r e s p e c t i v e l y ( s e e pp. 2 6 1 - 3 ) . A very i n t e r e s t i n g d e v e l o p m e n t
in this a r e a is, of c o u r s e , t h e r e s u r g e n c e of c o r p o r a t i s m in a n e w g u i s e -
social p a c t s o r i e n t e d t o w a g e r e s t r a i n t , social security r e f o r m , s u p p l y - s i d e
c o m p e t i t i v e n e s s a n d g e n e r a l c o n f o r m i t y t o t h e logic o f t h e n e w m o n e -
t a r y s y s t e m (see D e p p e e t al. 2000; R e g i n i 2000; G r o t e a n d S c h m i t t e r
1999; R h o d e s 1998; see also c h a p t e r 6).
S e c o n d , w e l f a r e a n d social policy w a s r e t a i n e d a s a n a t i o n a l c o m -
petence in the founding treaties of the E C , and policy-making at the
E u r o p e a n l e v e l i n these f i e l d s h a s s y s t e m a t i c a l l y l a g g e d b e h i n d
m a c r o e c o n o m i c , i n d u s t r i a l a n d t e c h n o l o g y pohcies. T h u s , a s K u h n l e ,
n o t e s , ' [ t j h e r e exists a s o f t o d a y n o E u r o p e a n social l a w o n t h e b a s i s o f
 The Political Economy of State Rescaling 207

which i n d i v i d u a l citizens c a n c l a i m b e n e f i t s f r o m B r u s s e l s ; n o d i r e c t t a x a -
t i o n o r social c o n t r i b u t i o n s t o t h e E U w h i c h c a n f i n a n c e social w e l f a r e ;
a n d t h e r e h a r d l y exists a n y w e l f a r e b u r e a u c r a c y i n t h e E U ' ( K u h n l e
1999: 6). N o n e t h e l e s s , t h e r e is i n c r e a s i n g e v i d e n c e of a c o m p l e x a n d
c o m p l i c a t e d r e o r i e n t a t i o n o f w e l f a r e policy a t t h e E u r o p e a n level. T h i s
involves two apparently contradictory tendencies. On the o n e h a n d ,
some welfare policies (such as equal pay, equal opportunities, p o r t a b l e
w e l f a r e b e n e f i t s , m i n i m u m s t a n d a r d s for h e a l t h a n d s e c u r i t y a t w o r k a n d
r u l e s o n w o r k i n g h o u r s ) h a v e b e e n g r a d u a l l y r e s e a t e d t o t h e E U level t o
s u p p l e m e n t t h e m o r e t r a d i t i o n a l n a t i o n a l l y scaled w e l f a r e m e a s u r e s ; a n d
s o m e s t r u c t u r a l p o l i c i e s h a v e also b e e n r e s e a t e d a t a E u r o p e a n level t o
facilitate i n d u s t r i a l r e s t r u c t u r i n g , c o m p e n s a t e for u n e v e n r e g i o n a l d e v e l -
o p m e n t , s u p p o r t agriculture and help to r e g e n e r a t e declining c o m m u n i -
ties. O n t h e o t h e r h a n d , t h e e m e r g e n c e o f social policy a t t h e E u r o p e a n
level t e n d s t o a s s u m e a w o r k f a r e r a t h e r t h a n a w e l f a r e o r i e n t a t i o n . T h u s
' t h e p o l i t i c a l p o i n t of r e f e r e n c e [of s u c h e c o n o m i c a n d social policy ini-
tiatives] i s n o t s o m u c h social i n t e g r a t i o n b u t r a t h e r t h e i n s t r u m e n t a l -
i z a t i o n of policy as a r e s o u r c e for c o m p e t i t i o n o r i e n t e d s t r u c t u r a l
c h a n g e ' ( D e p p e et al. 2 0 0 0 : 2 0 ) . In s h o r t , t h e r e is a g r o w i n g m i x of w e l f a r e
a n d w o r k f a r e s t r a t e g i e s a t t h e E u r o p e a n level; b u t t h e y a r e unified
a r o u n d t h e c o n c e r n t o c r e a t e t h e c o n d i t i o n s for a n effective single
m a r k e t in post-Fordist rather than Fordist conditions.
O n e o f t h e e a r l i e s t signs o f this r e o r i e n t a t i o n c a n b e f o u n d i n t h e
European Commission's White Paper, Growth, Competitiveness,
Employment (1993). T h i s r e v i e w e d a w i d e r a n g e of f a c t o r s affecting t h e
c o m p e t i t i v e n e s s o f t h e E u r o p e a n e c o n o m y a n d its c a p a c i t y t o g e n e r a t e
good jobs and sustainable economic growth; and it r e c o m m e n d e d an
equally wide range of t r a n s - E u r o p e a n macroeconomic, environmental,
i n f r a s t r u c t u r a l , t e c h n o l o g i c a l , e d u c a t i o n a l , v o c a t i o n a l a n d social policy
i n i t i a t i v e s t h a t m i g h t a d d r e s s - r h e t o r i c a l l y at least - t h e c h a l l e n g e s of
t h e c o m i n g c e n t u r y . I n t h e f i e l d o f l a b o u r m a r k e t policy, f o r e x a m p l e , t h e
C o m m i s s i o n c a l l e d for a b r o a d ' a d v a n c e d t r a i n i n g o f f e n s i v e ' a n d o t h e r
m e a s u r e s to e n h a n c e labour m a r k e t flexibility. This r e o r i e n t a t i o n was
t a k e n f u r t h e r a t t h e 1994 E U s u m m i t i n E s s e n , w h e n i t w a s f i n a l l y
r e c o g n i z e d t h a t effective e m p l o y m e n t policies c o n d u c t e d e x c l u s i v e l y a t
t h e n a t i o n a l level c o u l d n o l o n g e r b e successfully m a n a g e d u n d e r t h e
conditions of globalization and E u r o p e a n integration (Hoffman and
H o f f m a n 1997: 2 2 ) . T h e T r e a t y o f A m s t e r d a m f i n a l l y e m b e d d e d a c o m -
m i t m e n t t o full e m p l o y m e n t a s a ' m a t t e r o f c o m m o n c o n c e r n ' for t h e
E U , t r a n s l a t e d this i n t o t h e g o a l o f r e a c h i n g a ' h i g h l e v e l o f e m p l o y m e n t '
without undermining competitiveness and established an E m p l o y m e n t
C o m m i t t e e t o discuss a p p r o p r i a t e policy i n this a r e a a n d t o m o n i t o r
p r o g r e s s . I n l i n e w i t h t h e E U p e n c h a n t for m e t a g o v e r n a n c e r a t h e r t h a n
208 The Political Economy of State Rescaling

d i r e c t t o p - d o w n i n t e r v e n t i o n , l i o w e v e r , t l i e U n i o n ' s r e s p o n s i b i l i t y i n this
a r e a i s t o c o m p l e m e n t t h e activities o f m e m b e r s t a t e s b y d e v e l o p i n g a
' c o o r d i n a t e d strategy', to formulate c o m m o n guidelines, to establish
b e n c h m a r k s and 'best practice' and to monitor the pursuit of national
a c t i o n p l a n s for e m p l o y m e n t .
E x a m i n i n g t h e e m e r g i n g p r a c t i c e i n this a r e a since 1999 t o t h e t i m e
of writing reveals both the extent to which the workfarist reorientation
o f social policy h a s p e n e t r a t e d t o t h e E U level a n d also h o w far i t i s
linked with the expansion of the d o m a i n of the 'economic' into areas
p r e v i o u s l y r e g a r d e d a s n o n - e c o n o m i c . O n e aspect o f this, a s n o t e d b y
D e p p e e t al. (2000: 1 5 - 1 6 ) , i s t h a t , for t h e first t i m e , t h e b r e a d t h o f t h e
EU labour m a r k e t guidelines has forced the ministries of economy,
c u l t u r e , finance, w e l f a r e a n d l a b o u r t o p r e s e n t a j o i n t plan a n d t o r e l a t e
the separate policies to each other. This can be i n t e r p r e t e d a ^ t h e exten-
s i o n of t h e logic of c o m m o d i f i c a t i o n or, at least, of c a p i t a l i s t e c o n o m i c
c a l c u l a t i o n i n t o t h e w i d e r society. S u c h p r e s s u r e s a r e also i n c r e m e n t a l ,
b u i l d i n g u p r a t c h e t - f a s h i o n , w i t h e a c h successive c y c l e o f n a t i o n a l e m -
p l o y m e n t pacts.
T h i r d , a l m o s t b y definition, E u r o p e a n e c o n o m i c a n d social policy illus-
trate the postnational nature of the emerging welfare regimes. Before
c o n s i d e r i n g t h e E U ' s role, h o w e v e r , w e s h o u l d n o t e t h a t i t i s itself p a r t
of a m o r e c o m p l e x i n t e r n a t i o n a l i z a t i o n of e c o n o m i c a n d social policy.
Its p o l i c i e s a r e e v o l v i n g within a b r o a d e r f r a m e w o r k of g r o w i n g i n v o l v e -
m e n t in agenda-setting and policy-making by international institutions,
supranational apparatuses, intergovernmental organizations and forums,
t r a n s n a t i o n a l t h i n k - t a n k s , a n d t r a n s n a t i o n a l i n t e r e s t g r o u p s a n d social
m o v e m e n t s (cf. D e a c o n 1996; o n p o l i c y t r a n s f e r , see D o l o w i t z a n d M a r s h
1996; P e c k a n d T h e o d o r e 2 0 0 1 ; a n d Stella 2 0 0 0 ) . I t i s i m p o r t a n t t o r e c -
ognize, with D e a c o n (1996:45-58), that there is s o m e real disagreement
a m o n g t h e s e different b o d i e s o n p o l i c y r e c o m m e n d a t i o n s ; b u t this s h o u l d
not be exaggerated, since the bodies aligned with the 'Washington con-
s e n s u s ' h a v e t e n d e d t o b e t h e m o s t influential i n t h e i n t e r n a t i o n a l i z a t i o n
o f e c o n o m i c a n d social policy. T h u s D e a c o n a n d H u l s e (1997: 47) n o t e
s o m e c o n v e r g e n c e b e t w e e n E U a n d O E C D policies a s t h e E U h a s dis-
c o v e r e d t h e a d v e r s e i m p a c t o n c o m p e t i t i v e n e s s o f K W N S social policy
and the O E C D ' s Directorate of Education, E m p l o y m e n t , L a b o u r and
Social Affairs has c o m e t o r e c o g n i z e t h e e c o n o m i c b e n e f i t s o f e x p a n d e d
income-support p r o g r a m m e s . This development, mediated t h r o u g h an
i n c r e a s i n g l y d e n s e w e b o f p a r a l l e l p o w e r n e t w o r k s , reflects t h e i n c r e a s e d
f o r m a t i o n o f a t r a n s n a t i o n a l c a p i t a l i s t class c o n c e r n e d t o s e c u r e t h e c o n -
d i t i o n s for c a p i t a l a c c u m u l a t i o n on a g l o b a l scale. T h i s is a s s o c i a t e d with
a ' n e w c o n s t i t u t i o n a l i s m ' (Gill 1995, 2 0 0 1 ) , t h a t is, an a t t e m p t to e s t a b -
lish a n e w a r t i c u l a t i o n b e t w e e n t h e e c o n o m i c a n d t h e p o l i t i c a l o n a g l o b a l
 The Political Economy of State Rescaling 209

r a t h e r t h a n m e r e l y a n a t i o n a l scale. B u t i t i s a l s o a s s o c i a t e d , a s n o t e d
a b o v e , with a t t e m p t s t o r e a r t i c u l a t e t h e r e l a t i o n s h i p b e t w e e n t h e e c o -
nomic a n d the extra-economic conditions for capital accumulation in a
globalizing, p o s t - F o r d i s t , k n o w l e d g e - b a s e d e c o n o m y .
T h e E U h a s a k e y r o l e i n this n e w c o n s t i t u t i o n a l s e t t l e m e n t . U n s u r -
prisingly, t h e r e f o r e , its still e m e r g i n g c h a r a c t e r as a political a r e n a - e n t i t y
i s subject t o p r e s s u r e s f r o m well b e y o n d its b o r d e r s ( e s p e c i a l l y f r o m
t h e U S A ) ; a n d i t i s also b e c o m i n g i n v o l v e d i n i n t e r n a t i o n a l f o r u m s o n
v a r i o u s scales t o r e s t a b i l i z e t h e c o n d i t i o n s f o r e c o n o m i c g r o w t h a n d sta-
bility i n t h e w a k e o f t h e crisis o f t h e p r i m a c y o f t h e n a t i o n a l s c a l e i n t h e
postwar ' e m b e d d e d liberal' international settlement. At the same time,
t h e t e n d e n t i a l E u r o p e a n i z a t i o n o f e c o n o m i c a n d social policy i s also
closely l i n k e d , i n a c c o r d a n c e w i t h t h e p r i n c i p l e o f subsidiarity, t o t h e
increased role of subnational and cross-national agencies, territorial
a n d / o r f u n c t i o n a l i n f o r m , i n its f o r m u l a t i o n a n d i m p l e m e n t a t i o n . I n t h i s
regard t h e r e is an interesting scalar division of l a b o u r b e t w e e n the E U ,
national states and subnational tiers of government. For, whereas na-
t i o n a l s t a t e s r e t a i n significant p o w e r s i n t h e t r a d i t i o n a l s p h e r e s o f t h e
s o v e r e i g n s t a t e (military, p o l i c e ) a n d i n w e l f a r e policy ( w h e r e t h e l i m i t e d
E U b u d g e t b l o c k s a m a j o r r o l e i n g e n e r a l social r e d i s t r i b u t i o n e v e n i f i t
a c q u i r e d this c o m p e t e n c e ) , t h e E U h a s a c q u i r e d i n c r e a s i n g i n f l u e n c e
o v e r e c o n o m i c policy.
Fourth, although the EU has never acquired the characteristics of a
s u p r a n a t i o n a l s o v e r e i g n s t a t e , or e v e n a c o n f e d e r a t i o n of states, a n d so
c a n n o t be said to h a v e u n d e r g o n e a shift f r o m s u p r a n a t i o n a l government
to supranational governance, it has developed an increasingly wide
and d e e p array of both governance and metagovernance capacities that
e n a b l e i t t o i n f l u e n c e e c o n o m i c a n d social p o l i c y i n m o s t a r e a s a n d o n
m o s t scales. F o u r specific f e a t u r e s o f t h e E U g i v e i t s p e c i a l i n f l u e n c e
here: t h e role of judges and litigation (which enables the EU to override
n a t i o n a l laws a n d t o ' c o n s t i t u t i o n a l i z e ' t h e t r e a t i e s ) ; its l o c a t i o n a t t h e
h e a r t of i n f o r m a t i o n flows ( w h i c h gives it a r e l a t i v e m o n o p o l y in or-
g a n i z a t i o n a l i n t e l l i g e n c e ) ; its f i s c a l p o v e r t y ( w h i c h l i m i t s its v u l n e r a b i l i t y
to claims on public spending a n d thereby circumscribes the political
a g e n d a ; s e e S b r a g i a 2000); a n d t h e i n c r e a s i n g a d o p t i o n o f E u r o p e a n p r o -
jects and guidelines t h a t entitle the E U t o m o n i t o r national a n d regional
state activities a n d partnerships across an increasingly interconnected
set of policy a r e a s - t h e r e b y g i v i n g it a m e a n s to s t e e r n a t i o n a l policy
a n d e n d o w i t w i t h g r e a t e r c o h e r e n c e ( D e p p e e t al. 2000; M a j o n e 1 9 9 3 ;
W a l l a c e 2 0 0 0 ) . T h e distinctive f o r m o f m e t a g o v e r n a n c e i n t h e E U , w h i c h
i n v a l i d a t e s a t t e m p t s t o j u d g e its r o l e i n t e r m s o f t r a d i t i o n a l criteria a s s o -
c i a t e d w i t h t h e s o v e r e i g n n a t i o n a l s t a t e , i s well e x p r e s s e d b y S b r a g i a a s
follows:
210 The Political Economy of State Rescaling

The European Union governs in the sense of 'steering' because it is

structurally designed [to keep] certain questions off the table while
insisting that others be kept on the table. The use of treaties rather than a
constitution, the institutionalization of the norm of economic libera-
lization in those treaties, the creation of a powerful court, its unusual
access to information, and the lack of public funds all help the Union steer.
(2000: 236)

L i k e w i s e , T o m m e l , h a v i n g n o t e d t h e k e y r o l e o f r e g i o n a l a n d local
a u t h o r i t i e s a n d v a r i o u s p u b l i c - p r i v a t e p a r t n e r s h i p s i n p e r f o r m i n g gov-
e r n m e n t a l roles in a complex w e b of c o o p e r a t i v e n e t w o r k s organized in
t a n g l e d (or, m o r e p a r a d o x i c a l l y y e t , d e h i e r a r c h i z e d ) h i e r a r c h i e s , s u g g e s t s
that the E u r o p e of regions is b e c o m i n g

an indispensable element of an emergent, new open and flexible system,

in which the EC - or the Union as a whole - will stimulate competitive
and cooperative behaviour and performance of decentralized - public and
private - agents and institutions, by using open, market-oriented steering
mechanisms and by institutionalizing more complex procedures in
decision-making and consensus-building. (Tommel 1998: 75).

I n s h o r t , m e t a s t e e r i n g i s o n e o f t h e m o s t significant a r e a s i n w h i c h t h e
E U i s i n v o l v e d i n r e s t r u c t u r i n g , r e o r i e n t i n g a n d rescaling welfare. T h e
v e r y fact t h a t t h e s e activities d o n o t c o n f o r m t o t h e t r a d i t i o n a l n o t i o n o f
t h e e x e r c i s e o f s t a t e p o w e r has m a d e i t h a r d t o see their significance
for t h e o v e r a l l d y n a m i c o f state f o r m a t i o n a t t h e E u r o p e a n level. B u t
t h e y h a v e , n o n e t h e l e s s , p l a y e d a k e y r o l e i n t h e g r a d u a l rise o f a n E U
w o r k f a r e p r o g r a m m e t o p r o m o t e full e m p l o y m e n t via e n h a n c i n g t h e
f l e x i b i l i t y a n d e m p l o y a b i l i t y o f w o r k e r s i n t h e i n t e r e s t s o f g r e a t e r corn-
p e t i t i v e n e s s a n d e n t e r p r i s e i n t h e t r a n s i t i o n t o p o s t - F o r d i s m . T h i s still
leaves s c o p e for d i f f e r e n t n a t i o n a l o r r e g i o n a l i n t e r p r e t a t i o n s o f f l e x i -
bility a n d e m p l o y a b i l i t y - r a n g i n g f r o m t h e n e o l i b e r a l m o d e l p r o m o t e d
by Thatcherism and retained u n d e r N e w L a b o u r through the neostatist
m o d e l found in France, to m o r e neocorporatist patterns associated with
the Scandinavian and other Rhenish economies. T h e E u r o p e a n Employ-
m e n t S t r a t e g y is a p a r t i c u l a r l y good e x a m p l e of this a n d , as L e i b f r i e d
and Pierson note, it has become a key element in ' E u r o p e ' s emerging
m u l t i t i e r e d s y s t e m of social p o l i c y ' (2000: 288).

8. Is There Still a Role for the Notional State?

Do the trends and c o u n t e r t r e n d s considered above imply the erosion

of the national state? My short answer, based b o t h on theoretical
 The Political Economy of State Rescaling 211

c o n s i d e r a t i o n s a n d a n analysis o f t h e E u r o p e a n U n i o n , i s ' n o ' . T h e

rearticulation of t h e state involves neither a gradual withering away of
t h e n a t i o n a l s t a t e n o r s i m p l e d i s p l a c e m e n t b a s e d o n ' m o r e m a r k e t , less
state'. Instead, it is the K W N S t h a t has b e e n eroded. But the erosion
o f o n e f o r m o f n a t i o n a l s t a t e s h o u l d n o t b e m i s t a k e n for its g e n e r a l
retreat. On the contrary, as the frontiers of the K W N S (especially
t h o s e w h i c h h a d b e e n e x t e n d e d d u r i n g crisis m a n a g e m e n t ) a r e r o l l e d
b a c k , t h e b o u n d a r i e s o f t h e n a t i o n a l s t a t e a r e rolling f o r w a r d i n
o t h e r r e s p e c t s a n d / o r o t h e r f o r m s o f politics are b e c o m i n g m o r e
significant.
Thus, despite the three general trends noted above (denationalization,
destatization and internationalization), the national state retains a key
role. T h i s s u g g e s t i o n c a n b e clarified t h r o u g h t h e d i s t i n c t i o n b e t w e e n
particular state functions a n d t h e state's generic (or 'global') function.
P o u l a n t z a s (1973) identified t h r e e p a r t i c u l a r sets of activities: t e c h n o -
e c o n o m i c f u n c t i o n s r e g a r d i n g t h e forces a n d r e l a t i o n s o f p r o d u c t i o n ;
p o l i t i c a l f u n c t i o n s (for e x a m p l e , t a x a t i o n , policing, d e f e n c e , legislation,
official a u d i t ) c o n c e r n e d w i t h t h e s e l f - m a i n t e n a n c e o f t h e s t a t e ' s c o r e
military, p o l i c e a n d a d m i n i s t r a t i v e activities; a n d i d e o l o g i c a l f u n c t i o n s
(for e x a m p l e , e d u c a t i o n , p a t r i o t i c a n d n a t i o n a l rituals, m a s s c o m m u n i c a -
t i o n ) . I t i s n o t n e c e s s a r y t o a c c e p t this classification o f p a r t i c u l a r func-
tions t o a g r e e w i t h t h e g e n e r a l p o i n t . P o u l a n t z a s also d e f i n e d t h e g e n e r i c
(or ' g l o b a l ' ) f u n c t i o n o f t h e capitalist t y p e o f s t a t e a s ' s e c u r i n g t h e social
c o h e s i o n o f a s o c i e t y d i v i d e d i n t o classes'. W e s h o u l d a d d a f u r t h e r c l a u s e
to this s t a t e m e n t of the generic function, of course, namely, 'and riven by
o t h e r social c l e a v a g e s , divisions a n d conflicts' ( s e e c h a p t e r 1). I n t h e s e
terms, what we are witnessing is the erosion of key 'particular' functions
a s s o c i a t e d w i t h t h e K W N S state p r o j e c t , a n d t h e i r r e p l a c e m e n t b y k e y
'particular' functions l i n k e d to an emerging postnational competition
state that is pursuing S c h u m p e t e r i a n workfare functions. This reorgani-
z a t i o n d o e s n o t e n d t h e n a t i o n a l s t a t e ' s k e y r o l e i n e x e r c i s i n g its g e n e r i c
p o l i t i c a l f u n c t i o n . F o r the national state remains the primary site for this
crucial generic function a n d , i n d e e d , n a t i o n a l s t a t e m a n a g e r s j e a l o u s l y
g u a r d this r o l e e v e n a s t h e y c o n c e d e m o r e specific functions. I n this s e n s e
'denationalization' should be seen as a partial and uneven process that
l e a v e s a r e a r t i c u l a t e d ' n a t i o n a l s t a t e ' still e x e r c i s i n g t h e g e n e r i c f u n c t i o n
of t h e c a p i t a h s t t y p e of s t a t e . It c e r t a i n l y does n o t i m p l y t h a t a fully
f l e d g e d ' s u p r a n a t i o n a l ' state h a s a l r e a d y e m e r g e d t o m a i n t a i n i n s t i t u -
t i o n a l i n t e g r a t i o n a n d social c o h e s i o n i n a n e x t e n d e d , c l a s s - d i v i d e d
s u p r a n a t i o n a l social f o r m a t i o n .
T h u s t h e n a t i o n a l s t a t e i s still t h e m o s t significant site o f s t r u g g l e
a m o n g c o m p e t i n g global, triadic, s u p r a n a t i o n a l , n a t i o n a l , r e g i o n a l a n d
local forces. T h i s i s t h e p o i n t b e h i n d t h e h o l l o w i n g o u t m e t a p h o r , w h i c h
212 The Political Economy of State Rescaling

is i n t e n t i o n a l l y r e m i n i s c e n t of ' h o l l o w c o r p o r a t i o n s ' - t h a t is, t r a n s n a -

tionals h e a d q u a r t e r e d i n o n e c o u n t r y w h o s e o p e r a t i o n s a r e m o s t l y
p u r s u e d e l s e w h e r e . T h e h o l l o w c o r p o r a t i o n n o n e t h e l e s s r e t a i n s its c o r e
c o m m a n d , control, c o m m u n i c a t i o n a n d intelligence functions within the
h o m e e c o n o m y even as it transfers various p r o d u c t i o n activities abroad.
B y a n a l o g y , t h e ' h o l l o w s t a t e ' m e t a p h o r i n d i c a t e s t w o t r e n d s ; first, t h a t
t h e n a t i o n a l s t a t e r e t a i n s m a n y o f its ' h e a d q u a r t e r s ' ( o r c r u c i a l p o l i t i c a l )
functions - including the t r a p p i n g s of central executive a u t h o r i t y and
n a t i o n a l s o v e r e i g n t y a s well a s t h e d i s c o u r s e s t h a t s u s t a i n t h e m a n d t h e
overall r e s p o n s i b i l i t y for m a i n t a i n i n g social c o h e s i o n ; and, s e c o n d , t h a t
its c a p a c i t i e s t o t r a n s l a t e this a u t h o r i t y a n d s o v e r e i g n t y i n t o effective
control are becoming hmited by a complex displacement of powers
upwards, downwards, and outwards. This does not m e a n that the national
s t a t e loses all i m p o r t a n c e ; f a r f r o m it. I n d e e d , i t r e m a i n s c r u c i a l a s a n
i n s t i t u t i o n a l site and d i s c u r s i v e f r a m e w o r k for p o l i t i c a l s t r u g g l e s ; and it
e v e n k e e p s m u c h of its s o v e r e i g n t y - a l b e i t p r i m a r i l y as a j u r i d i c a l fiction
r e p r o d u c e d t h r o u g h m u t u a l r e c o g n i t i o n i n t h e i n t e r n a t i o n a l political
c o m m u n i t y . B u t t h e r e is still s o m e loss of n a t i o n a l s t a t e s ' f o r m a l legal
sovereignty as rule- and/or decision-making powers are transferred
upwards to supranational bodies and the resulting rules and decisions
c o m e t o b i n d n a t i o n a l states. I t h a s a c o n t i n u i n g r o l e i n m a n a g i n g t h e
political l i n k a g e s across different t e r r i t o r i a l scales, a n d its l e g i t i m a c y
d e p e n d s p r e c i s e l y o n d o i n g s o i n t h e p e r c e i v e d i n t e r e s t s o f its social b a s e
( K a z a n c i g i l 1993; 128). M o r e o v e r , j u s t a s m u l t i n a t i o n a l f i r m s ' c o m m a n d ,
control, c o m m u n i c a t i o n a n d intelligence functions are continually trans-
formed by the development of new information and communication
technologies and n e w forms of networking, bargaining and negotiation,
so, t o o , a s n e w possibilities e m e r g e , a r e t h e r e c h a n g e s i n h o w ' h o l l o w e d
out' states exercise and project their power.
Z i e b u r a (1992) n o t e s t h e c o n t i n u e d i m p o r t a n c e o f t h e g e n e r i c
p o l i t i c a l f u n c t i o n o f t h e n a t i o n a l state. H e a r g u e s t h a t t h e t e n d e n c i e s
towards globalization and transnational regionalization provoke a coun-
t e r t e n d e n c y i n a p o p u l a r s e a r c h for t r a n s p a r e n c y , d e m o c r a t i c a c c o u n t -
a b i l i t y a n d p r o x i m i t y . H e a d d s t h a t t h e d e s i r e for local, r e g i o n a l o r (at
m o s t ) n a t i o n a l i d e n t i t y reflects p o w e r f u l d r i v e s , e s p e c i a l l y i n s m a l l
n a t i o n a l s t a t e s , t o c o m p e n s a t e for t h r e a t s f r o m p o w e r f u l n e i g h b o u r i n g
states and/or the rise of supranational institutions that lack any real
d e m o c r a t i c a c c o u n t a b i l h y . N a t i o n a l s t a t e s a r e g e n e r a l l y still b e t t e r
p l a c e d t h a n t h e i r r e s p e c t i v e s u b - n a t i o n a l s t a t e s t o d e a l w i t h social c o n -
flicts. In addition, whereas supranational bodies seem preoccupied
with the internationalization of capital and promoting the structural
competitiveness of macroregions and their constituent national and
r e g i o n a l e c o n o m i e s , t h e y a r e o f t e n less i n t e r e s t e d i n social conflicts a n d
PBSfi

The Political Economy of State Rescaling 213

r e d i s t r i b u t i v e policies. T h e s e c o n c e r n s a r e still m a i n l y confined w i t h i n

national frameworks and it is national states that have t h e potential
f i s c a l b a s e t o c h a n g e t h e m significantly i n this r e g a r d . I n d e e d , w i t h o u t
c e n t r a l g o v e r n m e n t s u p p o r t , i t i s h a r d for m o s t local o r r e g i o n a l
s t a t e s t o a c h i e v e m u c h h e r e . T h i s e x p l a i n s t h e n a t i o n a l state's d i l e m m a
that (a) it must b e c o m e actively engaged in m a n a g i n g the process
o f i n t e r n a t i o n a l i z a t i o n a n d ( b ) i t i s t h e o n l y political i n s t a n c e w i t h
m u c h c h a n c e o f h a l t i n g a g r o w i n g d i v e r g e n c e b e t w e e n global m a r k e t
d y n a m i c s a n d c o n d i t i o n s for i n s t i t u t i o n a l i n t e g r a t i o n a n d social
cohesion.
In short, t h e r e r e m a i n s a c e n t r a l political role for t h e n a t i o n a l state.
But this role is redefined because of the m o r e general rearticulation of
t h e local, r e g i o n a l , n a t i o n a l a n d s u p r a n a t i o n a l levels o f e c o n o m i c a n d
political o r g a n i z a t i o n . U n l e s s o r u n t i l s u p r a n a t i o n a l political o r g a n i z a -
tion acquires not only g o v e r n m e n t a l p o w e r s but also some measure of
p o p u l a r - d e m o c r a t i c legitimacy, t h e n a t i o n a l s t a t e will r e m a i n a k e y p o l i t i -
cal f a c t o r a s t h e h i g h e s t i n s t a n c e o f f o r m a l d e m o c r a t i c political a c c o u n t -
ability. H o w i t fulfils t h i s r o l e d o e s n o t d e p e n d o n l y o n t h e c h a n g i n g
i n s t i t u t i o n a l m a t r i x a n d t h e shifts i n t h e b a l a n c e o f forces, a s g l o b a l i z a -
tion, t r i a d i z a t i o n , r e g i o n a l i z a t i o n a n d t h e r e s u r g e n c e o f local g o v e r n a n c e
proceed apace.

9. Concluding Remarks

Even adopting an economic viewpoint that paid due attention to the

social e m t i e d d e d n e s s a n d social r e g u l a r i z a t i o n o f c a p i t a l a c c u m u l a t i o n ,
it would be wrong to explain these general trends in terms of economic
changes. For they m u s t first be translated t h r o u g h struggles into p o -
litical p r o b l e m s f o r s t a t e a c t i o n a n d t h e i r s o l u t i o n i s t h e n m e d i a t e d
t h r o u g h t h e specific, s t r u c t u r a l l y i n s c r i b e d , s t r a t e g i c a l l y s e l e c t i v e n a t u r e
of the state. Likewise, from a m o r e state-centric viewpoint, it would be
w r o n g t o s u g g e s t t h a t t h e s e t r e n d s a r e a t t r i b u t a b l e solely t o (politically
m e d i a t e d ) e c o n o m i c c h a n g e s . F o r t h e r e c o u l d also b e sui generis
political r e a s o n s p r o m p t i n g s t a t e a c t o r s a n d o t h e r political f o r c e s t o
e n g a g e i n i n s t i t u t i o n a l r e d e s i g n a n d s t r a t e g i c r e o r i e n t a t i o n (cf. J e s s o p
1994b).
T h e r e a r e t w o m a i n c o n c l u s i o n s f r o m t h i s d i s c u s s i o n . First, r e g a r d i n g
the rescaling of accumulation, regulation a n d the state, we are seeing a
r e s h a p i n g of t h e h i e r a r c h y of r e g i o n s on all spatial scales f r o m w o r l d
regions (triads) t h r o u g h international regions and nation-states to
c r o s s - b o r d e r o r v i r t u a l r e g i o n s a n d o n t o i n t r a s t a t e r e g i o n s a n d localities
( T a y l o r 1991: 185). T r a n s n a t i o n a l f i r m s a n d b a n k s a r e m a j o r p l a y e r s i n
 214 The Political Economy of State Rescaling

this r e s h a p i n g p r o c e s s , but, a s n o t e d a b o v e , t h e y a r e o f t e n a i d e d a n d
a b e t t e d i n this r e g a r d b y n a t i o n a l s t a t e s . A s t h e s e c o m p l e x a n d c o n t r a -
d i c t o r y p r o c e s s e s u n f o l d , h o w e v e r , s t a t e s m u s t also t a c k l e t h e m a n y
d o m e s t i c r e p e r c u s s i o n s of g l o b a l r e s t r u c t u r i n g (for a s u m m a r y of t h e
c h a n g i n g s t a t e activities i n r e g a r d t o r e s c a l i n g , s e e b o x 5.2). T h i s r e q u i r e s
t h e r e p o s i t i o n i n g o f s t a t e s i n t h e h i e r a r c h y o f scales ( t h a t is, t h e
r e s c a l i n g o f t h e s t a t e , politics a n d p o l i c y ) a s well a s t h e r e s t r u c t u r i n g a n d
strategic r e o r i e n t a t i o n of state a g e n c i e s at a n y g i v e n scale. This is also
a s s o c i a t e d w i t h a l l i a n c e s t r a t e g i e s a m o n g s t a t e s o n d i f f e r e n t scales t o
p r o v i d e the b a s i s for e c o n o m i c a n d p o l i t i c a l survival a s t h e i m p e r a t i v e s
o f s t r u c t u r a l c o m p e t i t i v e n e s s m a k e t h e m s e l v e s felt. T h e n a t u r e o f t h e s e
a l l i a n c e s will v a r y w i t h t h e p o s i t i o n o f t h e e c o n o m i e s c o n c e r n e d i n t h e
international hierarchy.

Box 5.2 Rescalincj and stota intervention

1. h s t a b J i s h i n g n e w scales of activity (and d i s m a n t l i n g o t h e r s ) ,

lhcicb\ rc-calini.' .iiid re.itlicul.iliii'.; \.'niuus s|,ik- powcis.
i i i s i m n i n i i i l I n t m s . ,i:id i e g i i l a l o r \ c a p a c i i i e s a r d c i c i l i t i L i pos
-ibilii) fo- I icin-cKc- ind m h c r a d o i s lo -iimip s c a k s ' .

2. h MLMUiiii' 111 complLiiiciilai \ Ini m s ol Shifhlt'iipi'liiik and HIIK-I

f o r m s o f p l a c e - b a s e d c o m p e t i t i o n i n a t t e m p t t o fix m o b i l e
capii.il n i l l K i r own e c n n o m i v . s p a c e - ani.! t n e n h a n c e i n t e r
i i i b . n i . n i k i i e L ' i o i i a l o i i n k T i i a t i o n a l e n n i p e l i t i v e i i e s s o f iheii
o w n p l a c e - b o u n d capitals.

^ I'loniniin" uneven iicvelupment tliroiigh p o l i c i e s l o r inU-r

uiiiaii. inlei rei.ional and mt,.'rnafonal i-tinipelition aiivl
sci-knu; lo c o m p e n s a t e lor this.

4. ( o o p e i a t i i v j ill I'K r c b o i d c r i i i g a i u l i c s t a l i n g o f s t a l e l i i n c i i i i U -
iiicliidin>j. i l e c c i i t r a l i / . i l i o i i a i u ! e i o s s - b o i d e i leaioii 'oi iia
l i o ' i . reL<ioii,il b l o c l o i m . i l i o i i . a m i p a i l i c i p a l i i i g i n l o t u m - loi
inter-triad negotiation.

Second, regarding the continued primacy of the national state, the

e x t e n d e d r e p r o d u c t i o n o f c a p i t a l i s m a n d social classes i n t h e e r s t w h i l e
e c o n o m i c space of A t l a n t i c F o r d i s m is no longer linked politically to t h e
K W N S w i t h its local r e l a y s , c o r p o r a t i s t b i a s a n d i n t e r n a t i o n a l s u p p o r t s .
It has b e e n relocated in a m o r e internationalized a n d localized S W P R .
T h e latter's particular functions h a v e been dispersed a m o n g several
i n s t i t u t i o n a l levels o f t e r r i t o r i a l o r g a n i z a t i o n a n d a r e s h a r e d w i t h a n
 The Political Economy of State Rescaling 215

e x t e n d e d r a n g e o f f u n c t i o n a l l y r e l e v a n t ( a n d politically a n d i d e o l o g i c a l l y
defined) stakeholders. Yet the generic political function of maintaining
social c o h e s i o n i s still e x e r c i s e d a t t h e level o f t h e n a t i o n a l s t a t e w i t h i n
this r e s t r u c t u r e d a n d r e o r i e n t e d political e n s e m b l e . H e n c e , t h e t y p i c a l
f e a t u r e s a n d g e n e r i c f u n c t i o n s o f this n a t i o n a l s t a t e a r e q u i t e d i f f e r e n t
f r o m t h o s e o f t h e K W N S , a n d t h e strategic c o n t e x t i n w h i c h i t o p e r a t e s
h a s a l s o b e e n significantly t r a n s f o r m e d .
 From Mixed Economy to
Metagovernance

T h i s c h a p t e r builds o n t h e p r e c e d i n g a r g u m e n t s a b o u t d e s t a t i z a t i o n t o
e x p l o r e r e s p o n s e s t o t h e crisis o f t h e m i x e d e c o n o m y , w h i c h h a d p l a y e d
a k e y role in the Atlantic Fordist m o d e of regulation. It also builds on
the earlier discussion of exchange, hierarchy a n d n e t w o r k s as forms of
g o v e r n a n c e a n d suggests t h a t t h e i r r e l a t i v e w e i g h t s i n capitalist social
f o r m a t i o n s h a v e c h a n g e d i n t w o respects. First, i n t h e capitalist e c o n o m y
n a r r o w l y c o n c e i v e d , w h i l e h i e r a r c h i c a l f o r m s o f o r g a n i z a t i o n h a v e lost
w e i g h t , n e t w o r k f o r m s h a v e b e c o m e m o r e significant c o m p a r e d t o t h e
heyday of Atlantic Fordism. This does n o t m e a n that n e t w o r k s were
absent or u n i m p o r t a n t in Fordism, of course, or that they could n o t have
played i m p o r t a n t roles in the period before Fordism. A n d , second,
r e g a r d i n g t h e c o n d i t i o n s for c a p i t a l a c c u m u l a t i o n i n its i n t e g r a l o r inclu-
sive s e n s e , n e t w o r k s h a v e also a c q u i r e d a g r e a t e r r o l e i n s e c u r i n g t h e
expanding range of extra-economic conditions central to continuing
c a p i t a l a c c u m u l a t i o n a n d , significantly, i n c o r r e c t i n g for m a r k e t failures.
T h i s d o u b l e shift clearly affects t h e s t a t e ' s t w i n roles i n s e c u r i n g t h e
conditions for the profitable accumulation of private capital and repro-
d u c i n g l a b o u r - p o w e r as a fictitious c o m m o d i t y . This is r e f l e c t e d in a
rearticulation of the state's role in governing capital accumulation and
its m o r e g e n e r a l r o l e i n s e c u r i n g t h e c o n d i t i o n s for social c o h e s i o n w i t h i n
t h e w i d e r social f o r m a t i o n . W e c a n d e s c r i b e this r e a r t i c u l a t i o n i n t e r m s
of a t r e n d a n d a c o u n t e r t r e n d ( s e e c h a p t e r 5 ) . T h e f o r m e r is a s s o c i a t e d
w i t h t h e i n c r e a s i n g i n a b i l i t y o f t h e K W N S , a s t h e crises in/of A t l a n t i c
F o r d i s m intensified, t o i n t e r v e n e successfully f r o m a b o v e a n d / o r i n c o n -
c e r t a t i o n w i t h its social p a r t n e r s i n o r d e r t o c o r r e c t for m a r k e t failures.
T h i s l e n t c r e d e n c e t o t h e n e o l i b e r a l call for ' m o r e m a r k e t , less s t a t e ' a n d
a m o r e g e n e r a l beUef t h a t t h e r e d e s i g n of m a r k e t i n s t i t u t i o n s w a s a b e t t e r
 From Mixed Economy to Metagovernance 217

r e s p o n s e to m a r k e t failure than increasing state intervention. T h o s e

p r e s i d i n g o v e r n e o l i b e r a l p o l i c y a d j u s t m e n t s a n d n e o l i b e r a l r e g i m e shifts
d i s c o v e r e d s o o n e r o r l a t e r , h o w e v e r , n o t o n l y t h a t familiar f o r m s o f
m a r k e t f a i l u r e b e g a n t o r e a s s e r t t h e m s e l v e s b u t also t h a t y e t o t h e r f o r m s
of m a r k e t failure b e c a m e evident with t h e primacy of other contradic-
tions in t h e emerging post-Fordist accumulation regime. This p r o m p t e d
a w i d e r a n g e o f social forces t o s e a r c h for a l t e r n a t i v e s t o m a r k e t a n d
s t a t e a l i k e i n t h e c o o r d i n a t i o n o f i n c r e a s i n g l y c o m p l e x societies. T h i s
s e a r c h p r o c e s s g e n e r a t e d a w i d e s p r e a d t u r n t o old a n d n e w f o r m s o f gov-
ernance without government - a t u r n that has been encapsulated in the
n o w familiar c l a i m t h a t t h e r e h a s b e e n a g e n e r a l i z e d shift f r o m g o v e r n -
m e n t t o g o v e r n a n c e o v e r t h e last t w o d e c a d e s . H o w e v e r , a s I n o t e d i n
t h e p r e c e d i n g c h a p t e r , this g e n e r a l t r e n d h a s b e e n c o u n t e r e d b y a n o t h e r
t r e n d t h a t also c o m p l e m e n t s it. T h i s i s t h e i n c r e a s e d s a l i e n c e o f t h e s t a t e
i n o r g a n i z i n g t h e c o n d i t i o n s for s e l f - o r g a n i z a t i o n s o t h a t i t c a n c o m p e n -
s a t e for p l a n n i n g a n d m a r k e t failures a l i k e i n a n i n c r e a s i n g l y n e t w o r k e d
society. O r , t o r e p h r a s e i t i n line w i t h t h e t e n d e n t i a l shift f r o m g o v e r n -
m e n t t o g o v e r n a n c e , t h e r e h a s b e e n a t e n d e n t i a l shift f r o m g o v e r n m e n t
t o m e t a g o v e r n a n c e . T h i s c h a p t e r i s m a i n l y c o n c e r n e d t o e l a b o r a t e this
apparently paradoxical development and to illustrate it from the evolu-
tion of the K W N S . B u t first it develops the categories for the study of
governance that were introduced in chapter 1.

1. The Material Bases of Governance Mechanisms

We have already seen in earlier chapters that markets, hierarchies (espe-

cially b u r e a u c r a t i c a l l y o r g a n i z e d f i r m s a n d t o p - d o w n i m p e r a t i v e c o o r d i -
nation by the state) and networking (both formal and informal) are the
t h r e e p r i m a r y poles a r o u n d w h i c h e c o n o m i c , p o l i t i c a l a n d social gover-
n a n c e a r e o r g a n i z e d i n social f o r m a t i o n s m a r k e d b y h i g h levels o f e c o -
n o m i c , political a n d social c o m p l e x i t y . T h i s d o e s n o t e x c l u d e a s e c o n d a r y
r o l e for c o m m u n i t y ( o r t h e s o l i d a r i t i e s o f ' i m a g i n e d c o m m u n i t i e s ' ) i n
s u p p l e m e n t i n g t h e s e f o r m s o f g o v e r n a n c e a n d / o r i n o r g a n i z i n g social
r e l a t i o n s i n t h e lifeworld. I n d e e d , w h i l e m a r k e t s , h i e r a r c h i e s a n d n e t -
w o r k s m a y o f t e n b e u n d e r m i n e d b y t h e s u r v i v a l o f t h e s e solidarities, t h e y
can also derive additional surplus or leverage in undertaking complex
c o o r d i n a t i o n f r o m b e i n g e m b e d d e d i n s u c h social r e l a t i o n s . F o r t h e
m o m e n t , h o w e v e r , I i g n o r e i s s u e s o f i n t e r p e r s o n a l r e l a t i o n s a n d social
e m b e d d i n g t o f o c u s o n t h e significance o f m a r k e t s , h i e r a r c h i e s a n d n e t -
works in the political e c o n o m y of capitalism.
It is surely no accident that references to markets, hierarchies and net-
w o r k s o c c u r s o s y s t e m a t i c a l l y i n d i s c u s s i o n s o f c o n t e m p o r a r y capitalist
 218 From Mixed Economy to Metagovernance

societies. T h i s i s e v i d e n t , for e x a m p l e , i n t h e r e c u r r e n t a t t e m p t s t o
distinguish variants of capitalism t h r o u g h concepts such as uncoordi-
n a t e d l i b e r a l marlcet c a p i t a l i s m ; t h e d e v e l o p m e n t a l s t a t e a n d s t a t e - l e d ,
dirigiste, o r g o v e r n e d c a p i t a l i s m ; a n d c o r p o r a t i s m , c o o r d i n a t e d c a p i t a l -
ism o r t h e n e g o t i a t e d e c o n o m y . L i k e w i s e , a s w e h a v e s e e n i n c h a p t e r
2 , m a n y s t u d e n t s o f w e l f a r e r e g i m e s d i s t i n g u i s h b e t w e e n liberal, social
democratic and conservative-corporatist regimes. Theorists of public
administration and policy-making t e n d in turn to distinguish m a r k e t ,
b u r e a u c r a t i c a n d p a r t i c i p a t o r y m o d e s o f p o l i c y - m a k i n g a n d delivery. T h e
r e c u r r e n c e o f such t r o p e s c o u l d b e i n t e r p r e t e d s i m p l y i n t e r m s o f a n
intellectual residue of the E n l i g h t e n m e n t conceptual triplet of market,
s t a t e a n d civil society, a n d it is c e r t a i n l y i n t e r e s t i n g h o w far this t r i o of
c o n c e p t s h a s t r a v e l l e d i n o r g a n i z i n g r e s e a r c h o n A s i a n societies w h e r e
its r e l e v a n c e i s b y n o m e a n s self-evident.^ B u t o n e m i g h t also e x p l a i n
their r e c u r r e n c e in terms of certain features of the organization of capi-
talist social f o r m a t i o n s . If this is so, t h e n we s h o u l d also ask w h y t h e i r
relative weights vary across types of capitalism and over time. D o e s the
o v e r a l l m a t r i x o f t h e capitalist m o d e o f p r o d u c t i o n p r o v i d e a p a r t i a l
answer to both problems?

Market exchange and liberalism

Liberalism emphasizes the role of m a r k e t exchange as a coordination
mechanism. Economically, liberalism endorses the expansion of the
market economy through the generalization of the commodity form to
all f a c t o r s o f p r o d u c t i o n ( i n c l u d i n g l a b o u r - p o w e r a n d k n o w l e d g e ) a n d
t h e s p r e a d i n g o f f o r m a l l y free, m o n e t i z e d e x c h a n g e t o a s m a n y s p h e r e s
of social r e l a t i o n s as p o s s i b l e . Pohtically, it i m p l i e s t h a t c o l l e c t i v e
d e c i s i o n - m a k i n g s h o u l d i n v o l v e : (1) a c o n s t i t u t i o n a l s t a t e w i t h l i m i t e d
s u b s t a n t i v e p o w e r s o f e c o n o m i c a n d social i n t e r v e n t i o n ; a n d (2) a
commitment to maximizing the formal freedom of contracting parties
i n t h e e c o n o m y a n d t h e s u b s t a n t i v e f r e e d o m o f legally r e c o g n i z e d
subjects in the public sphere. T h e latter s p h e r e is based in t u r n on
s p o n t a n e o u s f r e e d o m o f association o f i n d i v i d u a l s t o p u r s u e a n y social
activities t h a t a r e n o t f o r b i d d e n b y c o n s t i t u t i o n a l l y v a l i d laws. I d e o l o g i -
cally, l i b e r a l i s m claims t h a t e c o n o m i c , p o l i t i c a l a n d social r e l a t i o n s a r e
b e s t o r g a n i z e d t h r o u g h t h e f o r m a l l y free^ c h o i c e s o f f o r m a l l y f r e e a n d
rational actors w h o seek to a d v a n c e their o w n m a t e r i a l or ideal interests
in an institutional f r a m e w o r k that, by accident or design, maximizes t h e
s c o p e for f o r m a l l y free choice. T h e s e t h r e e p r i n c i p l e s m a y well conflict
o v e r t h e s c o p e o f a n a r c h i c m a r k e t r e l a t i o n s , collective d e c i s i o n - m a k i n g
a n d s p o n t a n e o u s s e l f - o r g a n i z a t i o n , a s well a s o v e r t h e f o r m a l a n d
s u b s t a n t i v e f r e e d o m s a v a i l a b l e t o e c o n o m i c , legal a n d civil subjects. A s
 From Mixed Economy to Metagovernance 219

M a r x n o t e d , h o w e v e r , ' b e t w e e n e q u a l rights, f o r c e d e c i d e s ' (1996: 2 4 3 ) .

In o t h e r words, within the matrix of liberal principles, the relative
b a l a n c e o f e c o n o m i c , p o l i t i c a l a n d civic l i b e r a l i s m d e p e n d s o n t h e
changing b a l a n c e of forces within an institutionalized (but c h a n g e a b l e )
compromise.
T h e resurgence of liberalism in the form of neoliberalism is often
a t t r i b u t e d to a successful h e g e m o n i c p r o j e c t v o i c i n g t h e i n t e r e s t s of
f i n a n c i a l a n d / o r t r a n s n a t i o n a l c a p i t a l . Its r e c e n t h e g e m o n y i n n e o l i b e r a l
r e g i m e s u n d o u b t e d l y d e p e n d s o n t h e successful e x e r c i s e o f p o l i t i c a l ,
i n t e l l e c t u a l a n d m o r a l l e a d e r s h i p i n e l a b o r a t i n g a r e s p o n s e t o t h e crises
of Atlantic Fordism. A n d it is also clearly related to the increased impor-
t a n c e o f t h e m o n e y c o n c e p t o f c a p i t a l (see c h a p t e r s 2 a n d 3 ) . B u t its r e s -
o n a n c e i s a l s o r o o t e d m o r e d e e p l y i n t h e g e n e r a l n a t u r e o f capitalist
social f o r m a t i o n s . F o r l i b e r a l i s m c a n b e s e e n a s a m o r e o r less ' s p o n t a -
n e o u s p h i l o s o p h y ' w i t h i n capitalist s o c i e t i e s i n s o f a r as it is a s e e m i n g l y
n a t u r a l , a l m o s t s e l f - e v i d e n t e c o n o m i c , political a n d social i m a g i n a r y t h a t
c o r r e s p o n d s to g e n e r a l f e a t u r e s of a b o u r g e o i s society. It is, in p a r t i c u -
lar, c o n s i s t e n t w i t h f o u r s u c h f e a t u r e s .
T h e first of t h e s e is t h e i n s t i t u t i o n of p r i v a t e p r o p e r t y - t h a t is, t h e
juridical fiction of a u t o n o m o u s private ownership and control of the
factors o f p r o d u c t i o n . T h i s e n c o u r a g e s i n d i v i d u a l p r o p e r t y o w n e r s a n d
those who dispose over fictitious commodities such as labour-power,
n a t u r a l r e s o u r c e s a n d , e s p e c i a l l y i n t h e p a s t t w o d e c a d e s o r so, in-
tellectual p r o p e r t y , t o see t h e m s e l v e s a s e n t i t l e d t o u s e o r a l i e n a t e t h e i r
property as they think fit without due regard to the substantive
i n t e r d e p e n d e n c e o f activities i n a m a r k e t e c o n o m y a n d m a r k e t society.
In this realm, 'rule F r e e d o m , Equality, P r o p e r t y a n d B e n t h a m , b e c a u s e
b o t h b u y e r a n d seller o f a c o m m o d i t y , say o f l a b o u r - p o w e r , a r e c o n -
s t r a i n e d o n l y b y t h e i r o w n f r e e will' ( M a r x 1 9 9 6 : 1 8 6 ) . S e c o n d , a n d r e l a t -
edly, t h e r e is t h e a p p e a r a n c e of'free choice' in consumption, w h e r e those
w i t h sufficient m o n e y m a y c h o o s e w h a t t o b u y a n d h o w t o d i s p o s e o f it.
Third, the institutional separation and operational a u t o n o m i e s of the
economy and state m a k e the latter's interventions appear as external
i n t r u s i o n s i n t o t h e a c t i v i t i e s o f o t h e r w i s e free e c o n o m i c a g e n t s . Initially,
this m a y b e a n u n w e l c o m e b u t n e c e s s a r y e x t r a - e c o n o m i c c o n d i t i o n for
o r d e r l y f r e e m a r k e t s . H o w e v e r , i f p u s h e d b e y o n d p r e v a i l i n g social defi-
nitions of this acceptable m i n i m u m n i g h t w a t c h m a n role, it a p p e a r s as an
obstacle to free m a r k e t s a n d / o r as direct political oppression. This is e v e n
m o r e t h e case, o f c o u r s e , w h e r e s t a t e i n t e r v e n t i o n t h a t d o e s n o t t r a n s -
gress this socially a c c e p t e d m i n i m u m h a r m s i m m e d i a t e p a r t i c u l a r i n t e r -
ests. A n d , f o u r t h , t h e r e i s t h e c l o s e l y r e l a t e d i n s t i t u t i o n a l s e p a r a t i o n o f
civil society a n d t h e state. T h i s e n c o u r a g e s t h e belief t h a t s t a t e i n t e r -
vention is an intrusion into t h e formally free choices of particular
220 From Mixed Economy to Metagovernance

m e m b e r s o f civil s o c i e t y o n c e t h e c o n d i t i o n s f o r social o r d e r h a v e b e e n
established.
H o w e v e r , o p p o s i t i o n t o l i b e r a l i s m m a y also e m e r g e ' s p o n t a n e o u s l y '
on t h e basis of f o u r o t h e r f e a t u r e s of capitalist social r e l a t i o n s . First,
growing socialization of t h e forces of production, despite continued
p r i v a t e o w n e r s h i p o f t h e m e a n s o f p r o d u c t i o n , s u g g e s t s t h e n e e d for e x
ante c o l l a b o r a t i o n a m o n g p r o d u c e r g r o u p s t o limit m a r k e t a n a r c h y ,
w h e t h e r t h r o u g h t o p - d o w n p l a n n i n g a n d / o r v a r i o u s f o r m s o f self-
organization. Second, t h e r e are the strategic d i l e m m a s p o s e d by the
shared interests of producers (including wage earners) in maximizing
total r e v e n u e s t h r o u g h c o o p e r a t i o n a n d t h e i r d i v i d e d a n d p o t e n t i a l l y
conilictual interests over h o w these r e v e n u e s are distributed. Various
n o n - m a r k e t g o v e r n a n c e m e c h a n i s m s m a y h a v e a role h e r e h e l p i n g t o
b a l a n c e c o o p e r a t i o n a n d conflict. T h i r d , t h e r e a r e c o n t r a d i c t i o n s a n d
conflicts p o s e d b y t h e m u t u a l d e p e n d e n c e o f t h e i n s t i t u t i o n a l l y s e p a r a t e
e c o n o m i c a n d p o l i t i c a l s y s t e m s . T h i s l e a d s t o d i f f e r e n t logics o f e c o n o m i c
and political action at the same t i m e as it generates a need to consult on
t h e e c o n o m i c impact of state policies and/or the political repercussions
of private economic decision-making. A n d , fourth, there are problems
g e n e r a t e d b y t h e n a t u r e o f civil s o c i e t y o r t h e l i f e w o r l d a s a s p h e r e o f
particular interests o p p o s e d to the state's supposed e m b o d i m e n t of uni-
versal interests. T h i s i n d i c a t e s t h e n e e d for s o m e i n s t i t u t i o n a l m e a n s o f
m e d i a t i n g t h e p a r t i c u l a r a n d u n i v e r s a l a n d , since this i s i m p o s s i b l e i n t h e
a b s t r a c t , f o r s o m e h e g e m o n i c d e f i n i t i o n o f t h e ' g e n e r a l i n t e r e s t ' (on t h e
a l w a y s i m p e r f e c t , strategically s e l e c t i v e n a t u r e o f s u c h r e c o n c i l i a t i o n s ,
see Jessop 1990b).
T h i s s u g g e s t s t h a t , i f l i b e r a l i s m c a n b e i n t e r p r e t e d a s a m o r e o r less
' s p o n t a n e o u s philosophy' r o o t e d in capitalist social relations, o n e should
also r e c o g n i z e t h a t i t i s p r o n e t o ' s p o n t a n e o u s c o m b u s t i o n ' d u e t o t e n -
sions i n h e r e n t i n t h e s e s a m e r e l a t i o n s . T h i s w a s n o t e d i n P o l a n y i ' s (1944)
c r i t i q u e o f l a t e n i n e t e e n t h - c e n t u r y liberalism, w h i c h a r g u e d t h a t , i n
r e s p o n s e t o c r i s i s - t e n d e n c i e s i n laissez-faire c a p i t a l i s m , m a n y social
forces struggled to r e - e m b e d and re-regulate the m a r k e t . T h e eventual
c o m p r o m i s e s o l u t i o n w a s a market economy e m b e d d e d in a n d s u s t a i n e d
by a market society. T h e s a m e p o i n t a p p l i e s to n e o l i b e r a l c a p i t a l i s m .
T h u s , a f t e r t h e efforts o f 'roll-back n e o l i b e r a l i s m ' t o free t h e n e o l i b e r a l
m a r k e t e c o n o m y f r o m its v a r i o u s c o r p o r a t i s t a n d statist i m p e d i m e n t s ,
a t t e m p t s a r e n o w b e i n g m a d e t o s e c u r e its m e d i u m - t e r m viability b y
e m b e d d i n g it in a n e o l i b e r a l m a r k e t society (cf. P e c k a n d Tickell 2 0 0 2 ) .
T h i s i n v o l v e s m e a s u r e s t o d i s p l a c e o r d e f e r c o n t r a d i c t i o n s a n d conflicts
b e y o n d t h e s p a t i o - t e m p o r a l h o r i z o n s o f a g i v e n r e g i m e a s well a s s u p -
plementary measures to flank, support and sustain the continued domi-
n a n c e of the neoliberal project within these horizons (Jessop 2002c).
 From Mixed Economy to Metagovernance 221

The d i v i s i o n o f l a b o u r a n d c o r p o r a t i s m

T h i s line o f a r g u m e n t s h o u l d n o t b e r e s t r i c t e d t o l i b e r a l i s m a n d n e o l i b -
e r a l i s m . T h e t w o o t h e r m o d e s o f g o v e r n a n c e t y p i c a l o f m o d e r n social
f o r m a t i o n s a r e also d e e p l y r o o t e d i n t h e e c o n o m i c , p o l i t i c a l a n d social
o r g a n i z a t i o n o f c a p i t a l i s m . A n d t h e y a r e also c o n t r a d i c t o r y a n d t e n s i o n -
r i d d e n . L e t u s n o w briefly c o n s i d e r c o r p o r a t i s m a s a n e c o n o m i c a n d
political e x p r e s s i o n w i t h i n c a p i t a l i s m o f t h e m o r e g e n e r a l p a t t e r n o f
h e t e r a r c h i c g o v e r n a n c e (see p. 52 a n d b e l o w ) . C o r p o r a t i s m is a f o r m of
functional r e p r e s e n t a t i o n that involves an interconnected system of rep-
r e s e n t a t i o n , policy f o r m a t i o n a n d p o l i c y i m p l e m e n t a t i o n b a s e d o n t h e
a l l e g e d (socially d e f i n e d ) f u n c t i o n i n t h e division o f l a b o u r o f t h e v a r i o u s
f o r c e s i n v o l v e d . T h i s definition f i x e s t h e g e n e r i c f e a t u r e s o f c o r p o r a t i s m .
I t i g n o r e s t h e specificity o f p a r t i c u l a r i n s t a n c e s t h a t d e r i v e s f r o m t h e sec-
ondary features of corporatism in different circumstances. These features
i n c l u d e its i d e o l o g i c a l justification, its p o l i t i c a l l e g i t i m a t i o n , its f u n c t i o n a l
bases a n d p r e c i s e o r g a n i z a t i o n a l f o r m s o f r e p r e s e n t a t i o n , t h e v a r i o u s
levels a t w h i c h c o r p o r a t i s t s t r u c t u r e s a r e o r g a n i z e d , t h e a c t u a l scope, p u r -
poses a n d m o d e of policy-making, the particular forms of i m p l e m e n t a -
t i o n a n d t h e p l a c e (if a n y ) o f c o r p o r a t i s m i n t h e w i d e r c o n f i g u r a t i o n o f
e c o n o m i c , p o l i t i c a l a n d social o r d e r s .
Corporatism first emerged in m o d e r n E u r o p e as a reactionary and
Utopian p o l i t i c o - i d e o l o g i c a l c r i t i q u e o f l i b e r a l c a p i t a l i s m w i t h s t r o n g
organicist o v e r t o n e s . T h e s e c o n d m a i n v e r s i o n o f c o r p o r a t i s m w a s l i n k e d
to 'organized capitalism' in t h e late n i n e t e e n t h a n d early t w e n t i e t h
centuries. This version was n o t opposed to capitalism as such (which was
n o w consolidated and had begun to develop monopolistic and imperial-
istic t e n d e n c i e s ) , b u t w a s m o r e c o n c e r n e d a b o u t t h e r e v o l u t i o n a r y t h r e a t
represented by organized labour. These two versions played a major role
i n t h e e m e r g e n c e o f c o n s e r v a t i v e - c o r p o r a t i s t w e l f a r e r e g i m e s (see
c h a p t e r 2). A t h i r d p h a s e o f c o r p o r a t i s m s a w t h e e m e r g e n c e o f t r i p a r -
t i s m i n t h e c o n t e x t o f p o s t w a r A t l a n t i c F o r d i s m a n d its a s s o c i a t e d
KWNSs. Emerging during postwar reconstruction in E u r o p e as an alter-
native to fascism a n d to liberal capitalism, it was s u p p o r t e d by Christian
d e m o c r a t s a n d ' O n e N a t i o n ' C o n s e r v a t i v e s a s well a s b y social d e m o c -
r a t s . I t w a s r e v i v e d a g a i n i n s o m e A t l a n t i c F o r d i s t e c o n o m i e s i n t h e 1960s
a n d 1970s i n t h e h o p e o f m o d e r a t i n g e m e r g i n g s t a g f l a t i o n a r y t e n d e n c i e s
(see c h a p t e r 2). T h e f o u r t h v a r i a n t o f c o r p o r a t i s m b e c a m e p r o m i n e n t i n
t h e 1980s a n d 1990s a n d i s likely t o e x p a n d f u r t h e r i n t h e c o m i n g d e c a d e .
I t i s less o f t e n explicitly d i s c u s s e d i n c o r p o r a t i s t t e r m s (in p a r t d u e t o t h e
l a t t e r ' s n e g a t i v e a s s o c i a t i o n w i t h t h e c r i s e s o f t h e 1970s a n d w i t h t r a d e
u n i o n s ) a l t h o u g h t h e r e i s n o w i n c r e a s i n g r e c o g n i t i o n o f c o r p o r a t i s t social
222 From Mixed Economy to Metagovernance

p a c t s i n a n u m b e r o f E u r o p e a n w e l f a r e r e g i m e s o n v a r i o u s scales. M o r e
often, it is discussed in such t e r m s as networking, public-private part-
n e r s h i p s , s t r a t e g i c alliances, i n t e r - o r g a n i z a t i o n a l c o l l a b o r a t i o n , r e g u l a t e d
s e l f - r e g u l a t i o n , s t a k e h o l d i n g , p r o d u c t i v e solidarities, p r o d u c t i v i t y c o a l i -
tions, l e a r n i n g r e g i o n s , t h e social e c o n o m y a n d a s s o c i a t i o n a l d e m o c r a c y .
T h i s r e c u r r e n c e of c o r p o r a t i s m , a l b e i t in q u i t e v a r i e d guises, is d u e ,
like the r e c u r r e n c e of liberalism, to certain m a t e r i a l features of capital-
ist f o r m a t i o n s . T h e s e a r e t h e s a m e f e a t u r e s t h a t t e n d t o g e n e r a t e limits
t o a p u r e l y m a r k e t - b a s e d f o r m o f c a p i t a l i s t o r g a n i z a t i o n , a n d w e r e listed
a b o v e . I n brief, t o a v o i d u n n e c e s s a r y r e p e t i t i o n , t h e y c o m p r i s e : (1) t h e
g r o w i n g s o c i a l i z a t i o n o f t h e forces o f p r o d u c t i o n despite c o n t i n u e d
p r i v a t e o w n e r s h i p o f t h e m e a n s o f p r o d u c t i o n ; (2) t h e d i l e m m a s p o s e d
by t h e s h a r e d interest of p r o d u c e r classes a n d groups in maximizing total
r e v e n u e s a n d t h e conflict o v e r t h e i r a l l o c a t i o n ; (3) t h e n e e d for c o n s u l -
t a t i o n a m o n g o p e r a t i o n a l l y a n d o r g a n i z a t i o n a l l y distinct b u t f u n c t i o n a l l y
i n t e r d e p e n d e n t forces a b o u t t h e economic impact of state policies a n d
t h e p o l i t i c a l r e p e r c u s s i o n s o f p r i v a t e e c o n o m i c d e c i s i o n - m a k i n g ; a n d (4)
t h e p r o b l e m s g e n e r a t e d by t h e n a t u r e of civil society as a s p h e r e of p a r -
ticular interests. E a c h of these four bases is inherently contradictory and
e a c h p r o m p t s instabilities i n t h e v e r y c o r p o r a t i s t t e n d e n c i e s t h a t i t h e l p s
t o g e n e r a t e . This i s a n i m p o r t a n t p a r t o f t h e e x p l a n a t i o n for t h e r e c u r -
r e n t cycles of t h e r i s e of c o r p o r a t i s m , its fall a n d its r e t u r n in a n e w guise.
T h i s p a t t e r n c a n b e s e e n i n c o r p o r a t i s t policy cycles w i t h i n g i v e n s t a g e s
o f c a p i t a l i s m a n d i n t h e rise o f n e w t y p e s o f c o r p o r a t i s m a s s o c i a t e d w i t h
different s t a g e s of c a p i t a l i s m .

Institutional separation and statism

Imperative coordination is the third m o d e of governance to be consid-
e r e d h e r e . I t plays a n i m p o r t a n t p a r t i n t h e g o v e r n a n c e o f t h e e c o n o m y
i n its n a r r o w s e n s e t h r o u g h t h e d e v e l o p m e n t o f t h e firm a n d o t h e r h i e r -
a r c h i c a l f o r m s . B u t its r o l e i s e v e n m o r e e v i d e n t i n t h e activities o f t h a t
i n c l u s i v e h i e r a r c h i c a l o r g a n i z a t i o n t h a t i s n o t itself s u b j e c t t o c o n t r o l b y
a superordinate organization, namely, t h e sovereign state form t h a t is
t y p i c a l of capitalist social f o r m a t i o n s . T h i s is r e f l e c t e d in W e b e r ' s classic
d e f i n i t i o n o f t h e m o d e r n s t a t e i n t e r m s o f its d i s t i n c t i v e m e a n s o f p o l i t i -
cal c o n t r o l a n d i n t h e p o s t u l a t e o f t h e realist t h e o r y o f i n t e r n a t i o n a l r e l a -
tions t h a t the relation b e t w e e n sovereign states is o n e of p u r e anarchy.
W e b e r a n a l y s e d t h e m o d e r n s t a t e a s a c o m p u l s o r y a s s o c i a t i o n t h a t has
successfully m o n o p o l i z e d t h e l e g i t i m a t e use of p h y s i c a l force as a m e a n s
of d o m i n a t i o n w i t h i n a g i v e n t e r r i t o r y . Its d e f i n i n g f e a t u r e s w e r e an
a d m i n i s t r a t i v e staff, m e a n s of o r g a n i z e d c o e r c i o n , an effective c l a i m to
t h e l e g i t i m a t e e x e r c i s e of t h a t c o e r c i o n , a distinct t e r r i t o r y w i t h i n w h i c h
 From Mixed Economy to Metagovernance 223

this c o e r c i o n w a s e x e r c i s e d a n d s u b j e c t s o v e r w h o m i t w a s e x e r c i s e d
( W e b e r 1948). T h i s d e f i n i t i o n i s c o n s i s t e n t w i t h t h e i d e a o f t h e s t a t e a s
a n a p p a r a t u s t h a t m a k e s d e c i s i o n s t h a t a r e collectively b i n d i n g o n
m e m b e r s o f a given s o c i e t y a n d justified i n t h e n a m e o f t h e p u b h c i n t e r -
est o r c o m m o n g o o d (see c h a p t e r 1 ) b u t i t c o u l d well lead t o o v e r e m -
phasis on the role of force in the state's routine operations at the expense
of other m o d e s of state intervention. For, as n o t e d in c h a p t e r 1, the capi-
talist t y p e o f s t a t e m a y i n t e r v e n e n o t o n l y t h r o u g h t h e e x e r c i s e o f legiti-
m a t e organized coercion and t h r o u g h legislation enacted according to
t h e r u l e o f l a w , b u t also t h r o u g h its c o m m a n d o v e r f i s c a l a n d m o n e t a r y
r e s o u r c e s ( l i n k e d t o its m o n o p o l y o f o r g a n i z e d t a x a t i o n g r o u n d e d i n its
m o n o p o l y o f c o e r c i o n a n d t o its c o n t r o l o v e r legal t e n d e r a n d t h e c e n -
tral b a n k ) , t h r o u g h a r e l a t i v e m o n o p o l y o f o r g a n i z e d i n t e l l i g e n c e , a n d
t h r o u g h its p o w e r s o f m o r a l s u a s i o n r o o t e d i n t h e a r t i c u l a t i o n o f h e g e -
m o n i c a c c u m u l a t i o n s t r a t e g i e s , s t a t e p r o j e c t s a n d h e g e m o n i c visions. T h e
s c o p e o f s t a t e p o w e r s i s e s p e c i a l l y p r o b l e m a t i c f o r m a n y o f t h e distinc-
t i v e e c o n o m i c a n d social policies p u r s u e d b y t h e i d e a l - t y p i c a l K W N S a n d
S W P R as o p p o s e d to the generic functions of the m o d e r n state (or capi-
talist t y p e of state) in capitalist societies.
M o r e generally, i t i s clear, a s W e b e r t o o k p a i n s t o e m p h a s i z e , t h a t
there is considerable variation in the weight of imperative coordination
i n t h e o v e r a l l p a t t e r n o f s t a t e i n t e r v e n t i o n . R e g a r d i n g t h e c o n d i t i o n s for
c a p i t a l a c c u m u l a t i o n , w h i c h i s b y n o m e a n s all t h e r e i s t o t h e s t a t e ' s activ-
ities, for e x a m p l e , t h e r o l e o f i m p e r a t i v e c o o r d i n a t i o n t e n d s t o b e m o s t
significant i n e s t a b l i s h i n g t h e initial c o n d i t i o n s f o r c a p i t a l a c c u m u l a t i o n
( t h e f i r s t r o u n d o f p r i m i t i v e a c c u m u l a t i o n ) - ' a n d r e p r o d u c i n g its g e n e r a l
external conditions (such as the enforcement of p r o p e r t y rights and con-
tracts). Reliance on imperative coordination (or top-down state inter-
v e n t i o n ) also t e n d s t o i n c r e a s e w h e n t h e f o r m s o f p r i v a t e o w n e r s h i p
b l o c k t h e g r o w i n g s o c i a l i z a t i o n o f t h e forces o f p r o d u c t i o n , w h e n class
conflict a n d / o r conflict a m o n g o w n e r s o f d i f f e r e n t e n t i t l e m e n t s t o
r e v e n u e t h r e a t e n s a c c u m u l a t i o n , w h e n t h e logic o f e c o n o m i c a c t i o n c o n -
f l i c t s w i t h i m p o r t a n t p o l i t i c a l goals a n d w h e n t h e p u r s u i t o f p a r t i c u l a r
interests threatens the realization of t h e particular accumulation strat-
egies, s t a t e p r o j e c t s a n d h e g e m o n i c p r o j e c t s w i t h w h i c h t h e s t a t e i s f r o m
time to time associated. A n d the resort to organized coercion rather than
law is at its m o s t significant, of c o u r s e , in t h e initial stages of e x c e p t i o n a l
p e r i o d s w h e n t h e s o v e r e i g n s t a t e d e c l a r e s s t a t e s o f e m e r g e n c y a n d sus-
pends the formal democratic principles on which the normal bourgeois
democratic form of the constitutional state is based. Such situations are
not so relevant to the countries of direct concern in the p r e s e n t work,
but they have played a key role in states and regions b e y o n d the borders
o f t h e s p a t i o - t e m p o r a l f i x a s s o c i a t e d w i t h A t l a n t i c F o r d i s m (for e x a m p l e .
 224 From M i x e d Economy to Metagovernance

i n tiie m i l i t a r y d i c t a t o r s h i p s i n t h e o i l - p r o d u c i n g s t a t e s o n w h i c h t h e
Atlantic Fordist economies depend so heavily).

The paradox of governance

T h e r e a r e strange c o m p l e m e n t a r i t i e s i n t h e oscillation a n d r e c u r r e n c e o f
different m o d e s of governing t h e capital relation. For example, while
l i b e r a l i s m t e n d s t o r e g e n e r a t e itself ' s p o n t a n e o u s l y ' o n t h e basis o f k e y
f e a t u r e s o f capitalist societies, this r e g e n e r a t i o n m e e t s o b s t a c l e s f r o m
s o m e o f t h e i r o t h e r k e y f e a t u r e s . A n d , w h i l e t h e l a t t e r p r o v i d e t h e basis
for t h e r e s u r g e n c e o f o t h e r d i s c o u r s e s , s t r a t e g i e s a n d o r g a n i z a t i o n a l p a r a -
d i g m s , s u c h a s c o r p o r a t i s m o r s t a t i s m , t h e i r r e a l i z a t i o n t e n d s t o b e fet-
t e r e d in t u r n by the very features that g e n e r a t e liberalism. Overall, these
m u t u a l l y r e l a t e d t e n d e n c i e s a n d c o u n t e r t e n d e n c i e s p r o d u c e oscillations
i n t h e r e l a t i v e w e i g h t o f different k i n d s o f c o o r d i n a t i o n a n d m o d e s o f
p o l i c y - m a k i n g . T h i s said, d i f f e r e n t p r i n c i p l e s o f g o v e r n a n c e s e e m m o r e
o r less w e l l s u i t e d t o d i f f e r e n t stages o f c a p i t a l i s m a n d / o r its c o n t e m p o -
rary variants. Thus liberalism was probably m o r e suited to the pioneer-
ing f o r m s o f c o m p e t i t i v e c a p i t a l i s m t h a n t o l a t e r f o r m s - t h o u g h P o l a n y i
a n d o t h e r s w o u l d n o t e t h a t i t has clear limitations e v e n for c o m p e t i t i v e
capitalism; a n d i t i s m o r e s u i t e d t o u n c o o r d i n a t e d t h a n c o o r d i n a t e d
m a r k e t e c o n o m i e s , for w h i c h s t a t i s m a n d c o r p o r a t i s m a r e b e t t e r ( s e e
C o a t e s 2000; H a l l a n d S o s k i c e 2 0 0 1 b ; H o U i n g s w o r t h a n d B o y e r 1997b;
H u b e r a n d S t e p h e n s 2001). T h u s different stages a n d f o r m s of capitalism
m a y h a v e distinctive institutional attractors (or centres of gravity) a r o u n d
w h i c h oscillation o c c u r s . I n a d d i t i o n , d i f f e r e n t v a r i a n t s o f t h e s e f o r m s a n d
stages a r e also likely t o h a v e d i f f e r e n t p a t t e r n s o f g o v e r n a n c e t h a t a r e
s t r u c t u r a l l y c o u p l e d t o t h e i r specific p a t t e r n s o f s p e c i a l i z a t i o n a n d t h e i r
g r o w t h d y n a m i c s . T h i s is a rich field of r e s e a r c h t h a t h a s a l r e a d y b e e n well
ploughed and cannot detain us here.

2. Market and State Failure

T h e p r e v i o u s s e c t i o n h a s c o n s i d e r e d t h r e e basic f o r m s o f g o v e r n a n c e a n d
indicated in quite abstract and simple terms how they are rooted in
g e n e r a l f e a t u r e s o f capitalist social f o r m a t i o n s a n d h o w t h e s e f e a t u r e s
also t e n d t o u n d e r m i n e t h e m . T h i s p r o v i d e s a g e n e r a l e x p l a n a t i o n for t h e
p o s s i b i l i t y o f cycles i n w h i c h t h e r e l a t i v e w e i g h t o f d i f f e r e n t m o d e s o f
g o v e r n a n c e rises, falls, a n d rises again. In t h i s s e c t i o n I c o n s i d e r s o u r c e s
of failure internal to each of these mechanisms that reinforce these
g e n e r a l t e n d e n c i e s a n d also h e l p t o e x p l a i n s o m e o f t h e m o r e c o n c r e t e -
c o m p l e x a s p e c t s of v a r i a t i o n in p a t t e r n s of g o v e r n a n c e . I b e g i n o n c e
 From Mixed Economy to Metagovernance 225

m o r e witli t l i e d o m i n a n t c o o r d i n a t i o n m e c h a n i s m i n capitalist social r e l a -

tions, n a m e l y , t h e m a r k e t m e c h a n i s m .

Market failure
Many orthodox economists tend to assume that the 'procedural ratio-
n a l i t y ' o f p e r f e c t m a r k e t s g u a r a n t e e s m a r k e t success. F a i l u r e o c c u r s
w h e n economic exchanges do n o t produce what a perfect (hence 'imagi-
n a r y ' ) m a r k e t w o u l d d e l i v e r . S i n c e m a r k e t r a t i o n a l i t y d e p e n d s o n free
and equal exchange rather than on the purposes of economic transac-
t i o n s , success o r f a i l u r e c a n n o t , o n m o s t a c c o u n t s , b e j u d g e d t h r o u g h s u b -
stantive criteria such as m a r k e t forces' u n e v e n impact on wealth, income,
hfechances or regional imbalance. For, provided that inequalities derive
from (or are consistent with) the operation of perfect markets, they must
b e j u d g e d a s r a t i o n a l a n d fair. A t best, o n e c o u l d s e e s u c h p r o b l e m s a s
m a r k e t 'inadequacies' r a t h e r t h a n g e n u i n e m a r k e t failures. T h e r e i s n o
s h o r t a g e of claims a b o u t such inadequacies, h o w e v e r , n o r a b o u t t h e n e e d
t o r e m e d y t h e m a s well a s m a r k e t failures t h r o u g h social a n d p o l i t i c a l
action of various kinds.
In a m a r k e t - r a t i o n a l framework, state a n d m a r k e t are strictly d e m a r -
c a t e d . T h e s t a t e s h o u l d stay a t a r m s - l e n g t h f r o m m a r k e t forces, m e r e l y
e s t a b l i s h i n g a n d d e f e n d i n g t h e f r a m e w o r k for m a r k e t i n s t i t u t i o n s . T h e
l a t t e r c a n t h e n a l l o c a t e g o o d s a n d services i n t h e m o s t efficient way. T h e
m a r k e t also functions as a learning mechanism. Thus H a y e k argues t h a t
m a r k e t failure is an essentially 'trial-and-error' discovery m e c h a n i s m
whereby markets p r o m p t economic agents to learn and innovate. In the
l o n g r u n , o n this v i e w , t h e m a r k e t p r o v i d e s t h e m o s t f l e x i b l e a n d l e a s t
disastrous coordinating and adaptive mechanism in the face of complex
i n t e r d e p e n d e n c e a n d t u r b u l e n t e n v i r o n m e n t s . M o r e o v e r , for n e o c l a s s i -
cal a n d A u s t r i a n t h e o r i s t s a l i k e , t h e initial r e s p o n s e t o m a r k e t f a i l u r e i s
' m o r e m a r k e t , n o t less' - e v e n if this often requires, in the short t e r m ,
y e t f u r t h e r s t a t e i n t e r v e n t i o n . B u t i t i s d e b a t a b l e , t o say t h e least, w h e t h e r
e v e n p e r f e c t m a r k e t s c o u l d e l i m i n a t e all f o r m s o f m a r k e t failure. E v e n
neoclassical economists recognize the extent to which markets m a y n o t
' s u i t a b l y c a p t u r e t h e full social b e n e f i t s o r levy t h e full social c o s t s o f
m a r k e t activity' (Wolf 1979:138).
T h i s a p p r o a c h i s clearly i n c o n s i s t e n t w i t h t h a t a d v o c a t e d h e r e . F o r , a s
I h a v e a r g u e d in c h a p t e r 1, it is n o t m a r k e t s as such that a r e distinctive
of c a p i t a l i s m b u t t h e i r e x t e n s i o n to l a b o u r - p o w e r as a fictitious c o m -
m o d i t y . I t i s n o t t h e i n h e r e n t efficiency o f m a r k e t s t h a t d r i v e s ' w e a l t h
c r e a t i o n ' o r ' e c o n o m i c g r o w t h ' . I n s t e a d , this i s a c h i e v e d t h r o u g h t h e
market-mediated exploitation of wage-labour and the competitive (and
c r e a t i v e l y d e s t r u c t i v e ) s e a r c h for a b o v e - a v e r a g e profits; a n d b o t h o f
226 From Mixed Economy to Metagovernance

t h e s e processes involve struggles to accumulate structural p o w e r in order

t o s h a p e t h e o p e r a t i o n o f m a r k e t f o r c e s a n d c o n t r o l t h e c o n d i t i o n s for
t h e v a l o r i z a t i o n a n d r e a l i z a t i o n of c a p i t a l . M o r e o v e r , as I h a v e also
a r g u e d in c h a p t e r 1, t h e c a p i t a l r e l a t i o n c o n s i d e r e d as a p u r e l y e c o n o m i c
(or m a r k e t - m e d i a t e d ) relation is constitutively incomplete. Its continued
r e p r o d u c t i o n depends, in an unstable and contradictory way, on chang-
ing e x t r a - e c o n o m i c c o n d i t i o n s . T h u s , w h i l e m a r k e t s m a y m e d i a t e t h e
s e a r c h for a d d e d value, t h e y c a n n o t p r o d u c e it. I n a d d i t i o n , a s c o m m o d -
ification a n d f i c t i t i o u s c o m m o d i f i c a t i o n w i d e n a n d d e e p e n t h e i r p e n e -
t r a t i o n o f social r e l a t i o n s , t h e y g e n e r a t e c o n t r a d i c t i o n s t h a t c a n n o t b e
fully r e s o l v e d t h r o u g h t h e m a r k e t m e c h a n i s m , b u t o n l y d e f e r r e d a n d
d i s p l a c e d ( c h a p t e r s 1-5). I n this s e n s e , m u c h o f w h a t p a s s e s a s m a r k e t
failure or m a r k e t inadequacies is actually an expression of the underly-
ing c o n t r a d i c t i o n s o f c a p i t a l i s m . T h u s , w h i l e m a r k e t s m a y m e d i a t e c o n -
tradictions and modify their forms of appearance, they cannot transcend
t h e m . Similarly, a l t h o u g h t h e s t a t e m a y i n t e r v e n e i n r e s p o n s e t o m a r k e t
f a i l u r e , i t t y p i c a l l y o n l y modifies t h e f o r m s o r sites o f t h e s e c o n t r a d i c -
t i o n s - i n t r o d u c i n g class s t r u g g l e s i n t o t h e s t a t e a n d / o r g e n e r a t i n g t e n -
d e n c i e s t o w a r d s fiscal crisis, l e g i t i m a c y crisis, r a t i o n a l i t y crisis, etc. - or
else d i s p l a c e s a n d d e f e r s t h e m b e y o n d t h e s p a t i o - t e m p o r a l b o u n d a r i e s
associated with that particular state.

State failure
T h e r a t i o n a l e for state activity i s n o t p r o c e d u r a l (as w i t h t h e m a r k e t ) b u t
substantive. This rationale is expressed through imperative coordination
( o r h i e r a r c h y ) r a t h e r t h a n t h e a n a r c h y o f m a r k e t forces. I n p u r e f o r m i t
i s f o u n d i n t h e definition a n d e n f o r c e m e n t o f collectively b i n d i n g deci-
sions m a d e i n t h e n a m e o f t h e p u b l i c i n t e r e s t o r g e n e r a l will. B u t i t c a n
also b e s e e n i n t h e definition o f c o l l e c t i v e p r o j e c t s t h a t a r e p u r s u e d
through top-down planning and coordination. State failure is judged
a c c o r d i n g t o t h i s s u b s t a n t i v e r a t i o n a l i t y : i t refers t o t h e failure t o r e a l i z e
t h e s t a t e ' s o w n p o l i t i c a l p r o j e c t ( s ) w i t h i n t h e t e r m s o f its o w n o p e r a t i n g
rules a n d p r o c e d u r e s . I n d e m o c r a t i c r e g i m e s t h e s e rules a n d p r o c e d u r e s
i n c l u d e r e s p e c t for legality a n d t h e r e g u l a r r e n e w a l o f p o p u l a r m a n d a t e s
for a c t i o n . T h u s t h e p r i m a r y c r i t e r i o n for i d e n t i f y i n g s t a t e f a i l u r e s i s n o t
a l l o c a t i v e efficiency ( a s defined i n t e r m s o f t h e p r o c e d u r a l r a t i o n a l i t y o f
t h e m a r k e t ) . Instead, it is t h e effectiveness (as often symbolic as m a -
t e r i a l ) w i t h w h i c h specific s t a t e p r o j e c t s a r e r e a l i z e d . I t i s c e r t a i n l y p o s -
s i b l e , h o w e v e r , f o r efficiency t o c o u n t a m o n g t h e c r i t e r i a f o r t h e success
o f specific p r o j e c t s . T h u s ' v a l u e - f o r - m o n e y ' i s o n e o b j e c t i v e o f t h e n e o -
l i b e r a l s t a t e project.
 From Mixed Economy to Metagovernance 227

M o r e o v e r , j u s t as m a r k e t failure c a n be related to substantive factors

t h a t b l o c k t h e r e a l i z a t i o n o f its p r o c e d u r a l r a t i o n a l i t y , s o s t a t e f a i l u r e
c a n b e l i n k e d t o specific p r o c e d u r a l factors t h a t b l o c k effective policy-
making and implementation. Thus various commentators have suggested
that planning, bureaucracy, participation, reliance on professional exper-
tise, etc., m a y e a c h fail i n different w a y s t o g e n e r a t e a d e q u a t e p o l i c i e s
a n d / o r t o s e c u r e t h e i r effective r e a l i z a t i o n . T h e r e s u l t i n g t e n d e n c i e s
t o w a r d s i m p l e m e n t a t i o n a n d f i s c a l crises c a n l e a d i n t u r n t o p r o b l e m s o f
political l e g i t i m a c y if t h e r e is a w i d e s p r e a d p e r c e p t i o n t h a t t h e s t a t e ' s
public purposes a r e n o t b e i n g achieved. O n e r e s p o n s e to this within the
s t a t e i s a c o n s t a n t c y c h n g t h r o u g h t h e s e different m o d e s o f policy-
m a k i n g a n d i m p l e m e n t a t i o n i n t h e a t t e m p t t o c o m p e n s a t e for t h e i r
r e s p e c t i v e t e n d e n c i e s t o f a i l u r e (Offe 1975).
Just as neoclassical economists m a k e unrealistic assumptions a b o u t
m a r k e t s , welfare economists m a k e implausible claims about states. T h e y
a s s u m e t h a t s t a t e s n o t o n l y h a v e all t h e i n f o r m a t i o n n e c e s s a r y t o m a x i -
m i z e social w e l f a r e , b u t also t h a t t h e y h a v e b o t h t h e i n t e r n a l o r g a n i z a -
tional capacities and t h e p o w e r s of external intervention needed to
achieve their public objectives. Y e t it is widely recognized that state m a n -
agers (especially elected politicians) h a v e short-term t i m e h o r i z o n s a n d
are vulnerable to lobbying; that states are subject to b o u n d e d rational-
ity ( l i m i t e d i n f o r m a t i o n , u n c e r t a i n t y a n d t i m e p r e s s u r e s ) w h e n a c t i n g ;
that they often p u r s u e multiple, contrary and even contradictory goals -
m a n y o f w h i c h a r e also i n h e r e n t l y i n f e a s i b l e ; t h a t state c a p a c i t i e s a r e
l i m i t e d b o t h b y ' i n t e r n a l i t i e s ' ( c a l c u l a t i o n s o f p r i v a t e costs a n d b e n e f i t s
w h i c h differ f r o m p u b l i c g o a l s ) a n d e x t e r n a l r e s i s t a n c e ; t h a t n o n - m a r k e t
o u t p u t s a r e u s u a l l y h a r d t o d e f i n e i n p r i n c i p l e , ill-defined m p r a c t i c e a n d
difficult t o m e a s u r e ; a n d t h a t s t a t e i n t e r v e n t i o n m a y p r o m p t r e n t - s e e k i n g
behaviour among policy-takers that merely redistributes rather than
c r e a t e s r e s o u r c e s ( O f f e 1975; W o h 1979).
T h e r e a r e d i f f e r e n t r e s p o n s e s t o state failure. L i b e r a l critics s e e
m a r k e t forces as a self-correcting learning m e c h a n i s m a n d t h e s t a t e as
inherently incorrigible a n d ineducable. They do not ask w h e t h e r state
failure c o u l d b e c o r r e c t e d i n s i m i l a r w a y s t o m a r k e t failure, b u t s e e k
t o r e p l a c e i t w i t h t h e m a r k e t . B u t o t h e r critics allow b o t h f o r self-
c o r r e c t i n g policy cycles a n d / o r i n s t i t u t i o n a l r e d e s i g n i n t h e state. R e l e v a n t
m e a s u r e s i n t h e l a t t e r r e g a r d t o i m p r o v e policy c o o r d i n a t i o n a n d
i m p l e m e n t a t i o n c a n i n c l u d e r e d e f i n i n g t h e division o f l a b o u r i n t h e s t a t e
a n d w i d e r p o l i t i c a l s y s t e m , i n c r e a s i n g s t a t e a u t o n o m y s o t h a t i t i s less
v u l n e r a b l e t o p a r t i c u l a r i s t i c l o b b y i n g , b o o s t i n g reflexivity ( i n c l u d i n g
through auditing and the contract culture) and reorienting time horizons
in favour of longer-term policy-making a n d policy-taking.
 228 From Mixed Economy to Metagovernance

Heterarchy as a response to market and state failure

D i s c u s s i o n s o f m a r k e t a n d state f a i l u r e o f t e n a p p e a r t o rest o n dia-
metrically o p p o s e d theoretical a n d politico-ideological positions. Yet
they share some core assumptions. B o t h presume a dichotomistic
p u b l i c - p r i v a t e distinction and a zero-sum conception of the respective
s p h e r e s o f t h e m a r k e t a n d s t a t e . T h u s , o n t h e o n e h a n d , critics o f s t a t e
f a i l u r e see t h e e c o n o m y a s t h e site o f m u t u a l l y a d v a n t a g e o u s , v o l u n t a r y
e x c h a n g e a m o n g f o r m a l l y free, e q u a l a n d a u t o n o m o u s e c o n o m i c a g e n t s ;
and, o n t h e o t h e r h a n d , t h e y r e g a r d t h e s t a t e a s p r e m i s e d o n o r g a n i z e d
coercion t h a t intrudes on the private liberties of citizens (especially in
t h e i r c a p a c i t y a s e c o n o m i c a g e n t s ) . C o n v e r s e l y , critics o f m a r k e t f a i l u r e
see t h e state a s a s o v e r e i g n a u t h o r i t y e m p o w e r e d t o p u r s u e t h e p u b l i c
i n t e r e s t against t h e p a r t i c u l a r i s t i c , e g o i s t i c s h o r t - t e r m i n t e r e s t s o f citizens
( e s p e c i a l l y t h o s e o f p r o p e r t y o w n e r s ) . I n b o t h cases, t h e m o r e t h e r e i s o f
t h e state, t h e less t h e r e i s o f t h e m a r k e t ; w h a t v a r i e s i s t h e p o s i t i v e o r
n e g a t i v e e v a l u a t i o n o f this r a t i o . Similarly, w h e r e a s t h o s e w h o b e l i e v e i n
t h e b e n e f i c e n c e o f m a r k e t forces r e g a r d s t a t e failure a s n o r m a l a n d
m a r k e t failure a s e x c e p t i o n a l , t h o s e w h o b e l i e v e i n t h e r a t i o n a l i t y o f t h e
s t a t e a n d its e m b o d i m e n t o f t h e p u b l i c i n t e r e s t t y p i c a l l y c o n s i d e r m a r k e t
f a i l u r e a s i n e v i t a b l e a n d s t a t e failure^ a s s o m e t h i n g w h i c h , i f n o t e x c e p -
t i o n a l , i s a t least c o n j u n c t u r a l - a n d c a n t h e r e f o r e b e o v e r c o m e t h r o u g h
i m p r o v e d institutional design, k n o w l e d g e or political practice.
A third way between the anarchy of the m a r k e t and the hierarchy
of imperative coordination is found in 'heterarchy', which comprises
horizontal self-organization a m o n g mutually i n t e r d e p e n d e n t actors.
A m o n g s t its f o r m s a r e i n t e r p e r s o n a l n e t w o r k i n g , i n t e r o r g a n i z a t i o n a l
n e g o t i a t i o n a n d d e c e n t r e d i n t e r s y s t e m i c c o n t e x t s t e e r i n g (dezentrierte
Kontextsteuerung). T h e first t w o of t h e s e f o r m s of g o v e r n a n c e s h o u l d be
f a m i l i a r t o r e a d e r s ; t h e last r e q u i r e s s o m e c o m m e n t . I t c o m p r i s e s efforts
t o s t e e r ( g u i d e ) t h e d e v e l o p m e n t o f d i f f e r e n t systems b y t a k i n g a c c o u n t
both of their o w n operating codes and rationalities and of their various
s u b s t a n t i v e , social a n d s p a t i o - t e m p o r a l i n t e r d e p e n d e n c i e s . T h i s i s fa-
c i l i t a t e d b y c o m m u n i c a t i o n o r i e n t e d t o i n t e r s y s t e m i c 'noise r e d u c t i o n '
(mutual understanding), negotiation, negative coordination and co-
o p e r a t i o n i n s h a r e d p r o j e c t s . A n d i t i s reflected i n t h e use o f s y m b o l i c
m e d i a of c o m m u n i c a t i o n such as m o n e y , law or knowledge to modify t h e
s t r u c t u r a l a n d s t r a t e g i c c o n t e x t s i n w h i c h different s y s t e m s f u n c t i o n s o
t h a t c o m p l i a n c e w i t h s h a r e d p r o j e c t s follows f r o m t h e i r o w n o p e r a t i n g
codes r a t h e r t h a n from imperative coordination (see Glagow and Willke
1987; W i l l k e 1 9 9 2 , 1 9 9 7 ) .
T h e rationality of governance is neither procedural n o r substantive: it
is best described as 'reflexive'. T h e p r o c e d u r a l rationality of t h e capitalist
 From Mixed Economy to Metagovernance 229

m a r k e t is essentially formal in n a t u r e , prioritizing an endless 'economiz-

i n g ' p u r s u i t o f profit m a x i m i z a t i o n ; t h e s u b s t a n t i v e r a t i o n a l i t y o f g o v e r n -
m e n t is g o a l - o r i e n t e d , p r i o r i t i z i n g 'effective' p u r s u i t of s u c c e s s i v e policy
goals. H e t e r a r c h i c g o v e r n a n c e i n s t i t u t e s n e g o t i a t i o n a r o u n d a l o n g - t e r m
c o n s e n s u a l p r o j e c t a s t h e b a s i s for b o t h n e g a t i v e a n d p o s i t i v e c o o r d i n a -
t i o n a m o n g i n t e r d e p e n d e n t a c t o r s . T h e k e y t o its success i s c o n t i n u e d c o m -
mitment to dialogue to generate and exchange more information (thereby
reducing, without ever eliminating, the problem of b o u n d e d rationality);
to w e a k e n o p p o r t u n i s m by locking partners into a ra ng e of i n t e r d e p e n -
dent decisions over short-, m e d i u m - and long-term time horizons; and to
b u i l d o n t h e i n t e r d e p e n d e n c i e s a n d r i s k s a s s o c i a t e d w i t h ' a s s e t specificity'
by e n c o u r a g i n g solidarity a m o n g those involved. T h e rationality of gov-
e r n a n c e is dialogic r a t h e r t h a n monologic, pluralistic r a t h e r t h a n m o n o -
lithic, h e t e r a r c h i c r a t h e r t h a n e i t h e r h i e r a r c h i c o r a n a r c h i c . I n t u r n , this
suggests t h a t t h e r e i s n o o n e best g o v e r n a n c e m e c h a n i s m .
T h e r e h a s b e e n a r e m a r k a b l e i n c r e a s e i n r e s o r t t o h e t e r a r c h y i n t h e last
t w o d e c a d e s i n m a n y d i f f e r e n t s y s t e m s a n d s p h e r e s o f t h e lifeworld. T h i s
i s m o s t e v i d e n t i n t h e e x p l o s i o n o f r e f e r e n c e s t o n e t w o r k i n g (for e x a m -
ple, t h e n e t w o r k e d e n t e r p r i s e , t h e n e t w o r k s t a t e , t h e n e t w o r k society,
network-centric warfare) and in the growing interest in negotiation, multi-
a g e n c y c o o p e r a t i o n , p a r t n e r s h i p , s t a k e h o l d i n g , a n d s o on. T h i s r e p r e s e n t s
a s e c u l a r r e s p o n s e to a d r a m a t i c i n t e n s i f i c a t i o n of s o c i e t a l c o m p l e x i t y . T h i s
h a s s e v e r a l s o u r c e s : (1) i n c r e a s e d f u n c t i o n a l d i f f e r e n t i a t i o n c o m b i n e d
with i n c r e a s e d i n t e r d e p e n d e n c e ; (2) t h e i n c r e a s e d f u z z i n e s s o f s o m e insti-
t u t i o n a l b o u n d a r i e s , for e x a m p l e , c o n c e r n i n g w h a t c o u n t s a s ' e c o n o m i c '
i n a n e r a o f i n c r e a s e d s y s t e m i c o r s t r u c t u r a l c o m p e t i t i v e n e s s ; (3) t h e m u l t i -
p l i c a t i o n a n d r e s c a l i n g o f s p a t i a l h o r i z o n s ; (4) t h e i n c r e a s i n g c o m p l e x i t y
of t e m p o r a l h o r i z o n s of a c t i o n ; (5) t h e m u l t i p l i c a t i o n of i d e n t i t i e s ; a n d (6)
t h e increased importance of knowledge a n d organized learning. Such
complexity is reflected in worries a b o u t the governability of e c o n o m i c ,
p o l i t i c a l a n d social life i n t h e face o f g l o b a l i z a t i o n a n d conflicting i d e n t i -
ties. I t i m p l i e s t h a t i m p o r t a n t n e w p r o b l e m s h a v e e m e r g e d t h a t c a n n o t b e
m a n a g e d o r r e s o l v e d readily, i f a t a l l , t h r o u g h t o p - d o w n s t a t e p l a n n i n g o r
m a r k e t - m e d i a t e d a n a r c h y . T h i s h a s p r o m o t e d a shift i n t h e i n s t i t u t i o n a l
c e n t r e o f g r a v i t y (or i n s t i t u t i o n a l a t t r a c t o r ) a r o u n d w h i c h p o l i c y - m a k e r s
choose a m o n g possible m o d e s of coordination.
T h e c o n d i t i o n s for successful p u r s u i t o f reflexive r a t i o n a l i t y a r e j u s t
as complex as a r e t h o s e for well-functioning m a r k e t s or state planning.
Interpersonal networking, interorganizational negotiation a n d inter-
s y s t e m i c s t e e r i n g p o s e d i f f e r e n t p r o b l e m s i n this r e g a r d . Specific o b j e c t s
o f g o v e r n a n c e also affect t h e l i k e l i h o o d o f success. F o r e x a m p l e , g o v -
erning the global economy, h u m a n rights regimes, transnational crime
a n d t r a n s n a t i o n a l social m o v e m e n t s clearly i n v o l v e v e r y different p r o b -
 230 From Mixed Economy to Metagovernance

Table 6.1 Modalities of governance

Exchange Command Dialogue

Rationality Formal and Substantive and Reflexive and

procedural goal-oriented procedural

Criterion of Efficient Effective goal- Negotiated

success allocation attainment consent

Typical example Market State Network

Stylized mode Homo Homo Homo

of calculation economicus hierarchicus politicus

Spatio-temporal World market, N a t i o n a l territory. Rescaling

horizons reversible planning and path-
time horizons shaping

Primary Economic Ineffectiveness 'Noise',

criterion of inefficiency 'talking
failure shop'

Secondary Market Bureaucratism,

criterion of inadequacies red tape
failure

lems. T u r b u l e n t e n v i r o n m e n t s p o s e d i f f e r e n t g o v e r n a n c e p r o b l e m s f r o m
t h o s e t h a t a r e r e l a t i v e l y s t a b l e - e s p e c i a l l y as t i m e is r e q u i r e d for self-
organization to operate consensually. G o v e r n a n c e mechanisms must
provide a framework ui which relevant actors can reach agreement over
(albeit p o s s i b l y differential) spatial a n d t e m p o r a l h o r i z o n s o f a c t i o n vis-
a-vis t h e i r e n v i r o n m e n t . T h e y m u s t also s t a b i l i z e t h e c o g n i t i v e a n d n o r -
mative expectations of these actors by shaping and promoting a c o m m o n
' w o r l d - v i e w ' a s well a s d e v e l o p i n g a d e q u a t e s o l u t i o n s t o s e q u e n c i n g
p r o b l e m s . I n this w a y t h e y c a n p r o d u c e a p r e d i c t a b l e o r d e r i n g o f v a r i o u s
a c t i o n s , policies o r p r o c e s s e s o v e r t i m e , especiaUy w h e r e t h e y h a v e dif-
f e r e n t t e m p o r a l logics. A t s t a k e h e r e i s e s t a b l i s h i n g s e c u r e bases o f c o o r -
d i n a t i o n w i t h t h e i r o w n s t r u c t u r a l l y i n s c r i b e d s t r a t e g i c selectivity. T h e r e
can certainly be no g u a r a n t e e s of success in the p u r s u i t of collective goals
through self-organization - any m o r e than there can be through reliance
o n t h e invisible h a n d o f t h e m a r k e t o r t h e i r o n f i s t ( p e r h a p s i n a v e l v e t
glove) of imperative coordination. Nonetheless, w h e n faced with con-
t i n u i n g e v i d e n c e o f m a r k e t a n d s t a t e failure, n e t w o r k i n g a n d self-
o r g a n i z a t i o n c a n p r o v e a t t r a c t i v e (for a s u m m a r y a c c o u n t o f t h e t h r e e
m o d e s o f c o o r d i n a t i o n , see t a b l e 6.1).
 From Mixed Economy to Metagovernance 231

3. The Governance of Atlantic Fordism and Beyond

I n t h e light o f t h e s e p r e l i m i n a r y r e m a r k s I will n o w c o n s i d e r t h e c h a n g -
ing f o r m s o f e c o n o m i c a n d social c o o r d i n a t i o n since t h e 1980s. T h e r e a r e
t h r e e i n t e r r e l a t e d issues w o r t h p u r s u i n g h e r e : t h e c h a n g i n g d e f i n i t i o n s o f
t h e objects o f e c o n o m i c a n d social g o v e r n a n c e ; t h e c h a n g i n g i n s t i t u t i o n s
a n d g o v e r n a n c e m e c h a n i s m s r e s p o n s i b l e for its delivery; a n d t h e p r a c t i c e s
i n a n d t h r o u g h w h i c h e c o n o m i c a n d social p o l i c i e s a r e d e l i v e r e d . T h e s e
i s s u e s a r e closely l i n k e d . F o r g o v e r n a n c e p r a c t i c e s ( m e d i a t e d b y i n s t i t u -
t i o n s ) a t t e m p t t o d e l i m i t , unify, s t a b i l i z e a n d r e p r o d u c e t h e i r o b j e c t s o f
g o v e r n a n c e a s t h e p r e c o n d i t i o n a s well a s t h e effect o f g o v e r n i n g t h e m .
M o r e o v e r , g o v e r n a n c e p r a c t i c e s also t y p i c a l l y a i m t o c r e a t e a n d r e p r o -
d u c e t h e sut)jects n e e d e d f o r g o v e r n a n c e t o o p e r a t e effectively ( B a r r y e t
a l 1996; H u n t a n d W i c k h a m 1994). T h u s , a s t h e o b j e c t s a n d m o d e s o f g o v -
ernance change, institutional m e c h a n i s m s and actual practices change too
- a n d s o d o t h e t y p i c a l f o r m s o f g o v e r n a n c e failure. I n t h i s s e n s e w e s h o u l d
s e e e c o n o m i c a n d social p o l i c y r e g i m e s a s c o n s t i t u t i v e o f t h e i r o b j e c t s o f
g o v e r n a n c e a n d n o t j u s t a s r e s p o n s e s t o p r e - g i v e n e c o n o m i c a n d social
p r o b l e m s . I n d e e d , this i s o n e o f t h e b a s e s o n w h i c h t h e w e l f a r e s t a t e h a s
o f t e n b e e n criticized - t h a t i t g e n e r a t e s t h e p r o b l e m s i t a d d r e s s e s . T h i s
a l s o s u g g e s t s t h a t i t w i l l b e s e l f - e x p a n d i n g - a l w a y s finding n e w p r o b l e m s
t o solve - a n d , p e r h a p s , u l t i m a t e l y s e l f - d e f e a t i n g a s i t b e c o m e s m o r e
c o m p l e x , o v e r l o a d s itself w i t h t a s k s , a n d e v e n t u a l l y p r o d u c e s a crisis of
u n g o v e r n a b i l i t y ( f o r e x a m p l e , C r o z i e r e t al. 1975; L u h m a n n 1990).
W h e t h e r o r n o t o n e s u b s c r i b e s t o s u c h criticisms, i t w a s t h e p u r p o r t e d
failure o f t h e K W N S a s a m o d e o f e c o n o m i c a n d social g o v e r n a n c e t h a t
p r o m p t e d t h e s e a r c h for n e w f o r m s o f g o v e r n a n c e . Its a l l e g e d crisis
affected n o t only the modes of ' g o v e r n a n c e - g o v e r n m e n t - g o v e r n i n g ' in
t h e K W N S b u t also t h e l a t t e r ' s o b j e c t s a n d s u b j e c t s o f social a n d e c o -
n o m i c g o v e r n a n c e . T h e K W N S b e g a n t o fail a s a m o d e o f g o v e r n a n c e
w h e n its c o h e r e n c e a s a n i n s t i t u t i o n a l e n s e m b l e b e c a m e i n c o n s i s t e n t
with the objects it was governing, t h e practices being deployed to govern
them, and the identities and interests of the active agents and/or 'passive'
s u b j e c t s o f t h e K W N S r e g i m e . T h u s , t a k i n g its f o u r d i m e n s i o n s i n t u r n ,
t h e f o l l o w i n g c r i s i s - t e n d e n c i e s c a n b e identified.
First, the p r i m a r y object of e c o n o m i c g o v e r n a n c e in t h e K W N S was
the national economy. The emergence and consolidation of Keynesian
practices h a d helped to delimit and reproduce the national economy
( T o m l i n s o n 1985). T h e y p r o v i d e d t h e m e a n s o f m e a s u r i n g n a t i o n a l
e c o n o m i c performance, controlling e c o n o m i c flows across national
b o r d e r s , s e t t i n g e c o n o m i c a g g r e g a t e s s u c h a s inflation, e m p l o y m e n t a n d
growth as goals of national e c o n o m i c m a n a g e m e n t , and creating
 232 From Mixed Economy to Metagovernance

tlie i n f r a s t r u c t u r e for n a t i o n a l e c o n o m i c d e v e l o p m e n t . B u t K e y n e s i a n
economic m a n a g e m e n t b e c a m e increasingly problematic and generated
s t a g f l a t i o n a r y t e n d e n c i e s t h a t fuelled t h e e m e r g i n g crisis o f t h e A t l a n t i c
F o r d i s t e c o n o m i e s t h a t K e y n e s i a n s t a t e i n t e r v e n t i o n (as b r o a d l y d e f i n e d
in c h a p t e r 2) was supposed to have the capacity to manage. E c o n o m i c
internationalization exacerbated these problems. It u n d e r m i n e d the
n a t i o n a l e c o n o m y a s a n object o f e c o n o m i c m a n a g e m e n t a n d l e d t o q u i t e
d i f f e r e n t c o n c e p t i o n s of t h e e c o n o m y a n d , a f o r t i o r i , its m e c h a n i s m s of
e c o n o m i c a n d social governance. As we saw in c h a p t e r 3, replacing the
national economy as the primary object of economic governance is
the knowledge-based economy in an era of globalization. As with the
n a t i o n a l e c o n o m y t h a t w a s discursively i m a g i n e d a n d m a t e r i a l l y consti-
t u t e d a s a n object o f e c o n o m i c g o v e r n a n c e o u t o f a far m o r e c o m p l e x
and inherently u n m a n a g e a b l e ensemble of economic relations, the
k n o w l e d g e - b a s e d e c o n o m y first has to be imagined as an object of eco-
n o m i c g o v e r n a n c e b e f o r e i t g a i n s a sufficiently solid m a t e r i a l a n d insti-
tutional form to b e c o m e potentially g o v e r n a b l e t h r o u g h t h e political
technologies of an emerging S W P R . I h a v e already indicated the massive
e f f o r t s o n t h e p a r t o f m a n y d i f f e r e n t social f o r c e s o p e r a t i n g i n m a n y dif-
f e r e n t d o m a i n s a n d o n m a n y d i f f e r e n t scales t o e s t a b l i s h t h e g l o b a l i z i n g ,
k n o w l e d g e - b a s e d e c o n o m y a s t h e m o r e o r less w i d e l y t a k e n - f o r - g r a n t e d
focal p o i n t o f a c c u m u l a t i o n strategies, s t a t e p r o j e c t s a n d h e g e m o n i c
visions. W h e t h e r o r n o t i t p r o v e s a n y m o r e m a n a g e a b l e i n t h e l o n g t e r m
t h a n t h e n a t i o n a l e c o n o m y did i n t h e A t l a n t i c F o r d i s t e r a i s a n o t h e r q u e s -
t i o n e n t i r e l y (see c h a p t e r 1). N o n e t h e l e s s , a t p r e s e n t , t h e g r o w t h d y n a m i c
o f t h e k n o w l e d g e - b a s e d e c o n o m y i s h e l d t o d e p e n d o n h o w effectively
t h e e c o n o m i c s p a c e in w h i c h it is a n c h o r e d - n o t n e c e s s a r i l y a n a t i o n a l
e c o n o m y - i s i n s e r t e d i n t o (or, b e t t e r p e r h a p s , n e t w o r k e d i n t o ) t h e
changing global division of labour, a n d can survive the audit of the world
market. This in t u r n has p r o m p t e d growing concern with international
e c o n o m i c c o m p e t i t i v e n e s s (if o n l y t h r o u g h i n t e r n a t i o n a l b e n c h m a r k i n g
to establish best practice) and with supply-side intervention - the latter
initially t o s u p p l e m e n t n a t i o n a l d e m a n d m a n a g e m e n t , s u b s e q u e n t l y a s
the p r i m a r y objective a n d m e a n s of e c o n o m i c intervention. M o r e o v e r ,
b e c a u s e of t h e r e l a t i v i z a t i o n of s c a l e n o t e d in c h a p t e r s 3 a n d 5, a t t e m p t s
t o stabilize t h e k n o w l e d g e - b a s e d e c o n o m y a n d / o r t o benefit f r o m s u c h
s t a b i l i z a t i o n a r e b e i n g p u r s u e d o n m a n y m o r e scales.
T h e imagined scope and inclusiveness of the e c o n o m y that needs gov-
e r n i n g h a v e also e x p a n d e d . T h i s i s n o l o n g e r i n t e r p r e t e d i n n a r r o w t e r m s
b u t has b e e n extended to include m a n y additional factors, d e e m e d 'non-
e c o n o m i c ' u n d e r t h e K W N S r e g i m e , t h a t affect e c o n o m i c p e r f o r m a n c e .
T h i s e x p a n s i o n i s reflected i n c o n c e p t s s u c h a s s t r u c t u r a l c o m p e t i t i v e n e s s
or systemic competitiveness - concepts that highlight the combined
 From Mixed Economy to Metagovernance 233

impact of diverse societal factors on competitiveness. State m a n a g e r s

therefore i n t e r v e n e in a growing range of economically relevant prac-
tices, i n s t i t u t i o n s , f u n c t i o n a l s y s t e m s a n d d o m a i n s o f t h e h f e w o r l d t o
e n h a n c e competitiveness. This has two interesting and paradoxical
effects o n t h e s t a t e . F i r s t , whilst i t e x p a n d s t h e p o t e n t i a l s c o p e o f s t a t e
i n t e r v e n t i o n for e c o n o m i c p u r p o s e s , t h e r e s u l t i n g c o m p l e x i t y r e n d e r s t h e
s o r t s o f t o p - d o w n i n t e r v e n t i o n t y p i c a l o f t h e p o s t w a r K W N S less effec-
tive - r e q u i r i n g t h a t t h e s t a t e r e t r e a t f r o m s o m e a r e a s o f i n t e r v e n t i o n
a n d r e i n v e n t itself as a c o n d i t i o n for m o r e effective i n t e r v e n t i o n in o t h e r s
( M e s s n e r 1998). A n d , s e c o n d , w h i l s t i t i n c r e a s e s t h e r a n g e o f s t a k e h o l d -
ers w h o s e c o o p e r a t i o n i s r e q u i r e d for successful s t a t e i n t e r v e n t i o n , i t also
i n c r e a s e s p r e s s u r e s w i t h i n t h e s t a t e t o c r e a t e n e w subjects t o a c t a s its
partners. Thus states are n o w trying to transform the identities, interests,
c a p a c i t i e s , r i g h t s a n d r e s p o n s i b i l i t i e s o f e c o n o m i c a n d social f o r c e s s o
t h a t t h e y b e c o m e m o r e flexible, c a p a b l e a n d r e l i a b l e a g e n t s o f t h e s t a t e ' s
n e w economic strategies - w h e t h e r in partnership with t h e state and/or
with each o t h e r or as a u t o n o m o u s entrepreneurial subjects in the n e w
k n o w l e d g e - b a s e d e c o n o m y ( B a r r y e t al. 1996; D e a k i n a n d E d w a r d s 1993;
F i n e r 1997).
T h i s i s also r e f l e c t e d i n t h e t r a n s f e r o f t e c h n o - e c o n o m i c p a r a d i g m s
f r o m t h e firm t o b r o a d e r f i e l d s o f g o v e r n a n c e . T h i s o c c u r s i n a t least t w o
ways: t h r o u g h t h e s i m p l e e x t e n s i o n o f t e c h n o - e c o n o m i c p a r a d i g m s f r o m
t h e p r i v a t e sector t o p u b l i c a n d t h i r d sector o r g a n i z a t i o n s a n d t h r o u g h
t h e r e s p e c i f i c a t i o n o f t h e best i n s t i t u t i o n a l a r r a n g e m e n t s a n d m o s t
a p p r o p r i a t e t a s k s o f t h e s t a t e (cf. H o g g e t t 1987; G o o d w i n a n d P a i n t e r
1996). I n o r g a n i z a t i o n a l t e r m s t h e F o r d i s t p e r i o d w a s o n e o f l a r g e scale,
hierarchical structures that operated in a bureaucratic, top-down m a n -
n e r , a n d t h i s m o d e l w a s a l l e g e d l y e x t e n d e d t o t h e local s t a t e a n d its e c o -
n o m i c a n d w e l f a r e r o l e s (cf. H o g g e t t 1987; a n d b e l o w ) . P o s t - F o r d i s m i s
associated with the network firm and a new 'network paradigm' (Capello
1996; C o o k e a n d M o r g a n 1993). T h e f o r m e r h a s b e e n d e s c r i b e d i n t h e
following t e r m s :

The traditional models of the large, verdcally integrated firm of the 1960s,
and of the small autonomous, single-phase firm of the 1970s and part of
the 1980s, are replaced by a new type of large networked firm, with strongly
centralized strategic functions extending in several directions, and by a new
type of small enterprise, integrated into a multi-company local network.
Across the network, a system of constantly evolving power relationships
governs both the dynamics of innovation and the appropriability of returns
to the partners involved. The network firm is attracted towards diversified
mass production and the competitive factor of the single firm is the control
of complementary assets in the hands of its potential partners. (Capello
1996: 490)
 1

234 From Mixed Economy to Metagovernance

Ttie rise o f t h e n e t w o r k p a r a d i g m i s r e f l e c t e d b o t h i n t h e i n s t i t u t i o n a l
r e d e s i g n o f p u b l i c sector g o v e r n a n c e , i n t h e ' n e w t e r r i t o r i a l p o l i t i c s ' (or
n e w u r b a n politics) w i t h w h i c h n e w f o r m s o f g o v e r n a n c e a r e a s s o c i a t e d
(cf. C o x 1993; G o u g h a n d E i s e n s c h i t z 1996) a n d i n t h e i n c r e a s e d i m p o r -
t a n c e a t t a c h e d t o p u b l i c - p r i v a t e p a r t n e r s h i p s o f v a r i o u s kinds. T h u s
P a r k i n s o n a n d H a r d i n g h a v e d e s c r i b e d t h e e n t r e p r e n e u r i a l city a s ' o n e
w h e r e k e y i n t e r e s t g r o u p s i n t h e public, p r i v a t e a n d v o l u n t a r y s e c t o r s
d e v e l o p a c o m m i t m e n t to r e a l i z i n g a b r o a d l y c o n s e n s u a l v i s i o n of u r b a n
d e v e l o p m e n t , d e v i s e a p p r o p r i a t e s t r u c t u r e s for i m p l e m e n t i n g this vision
a n d m o b i l i z e b o t h local a n d n o n - l o c a l r e s o u r c e s t o p u r s u e it' (1995; 6 6 - 7 ) .
S e c o n d , t h e g e n e r i c object o f social g o v e r n a n c e i n t h e K W N S (as i n
o t h e r f o r m s o f n a t i o n a l s t a t e ) w a s a n a t i o n a l p o p u l a t i o n divided i n t h e
f i r s t i n s t a n c e i n t o citizens o f t h e n a t i o n a l s t a t e a n d r e s i d e n t aliens. B u t
this p o p u l a t i o n w a s c a t e g o r i z e d a n d g o v e r n e d i n distinctive w a y s s u i t e d
t o A t l a n t i c F o r d i s m a n d its m o d e o f r e g u l a t i o n . A b o v e all, social policy
w a s p r e m i s e d o n c o n d i t i o n s o f full o r near-full e m p l o y m e n t , lifelong
e m p l o y m e n t - albeit n o t n e c e s s a r i l y w i t h t h e s a m e e m p l o y e r - w i t h a
family w a g e for m a l e w o r k e r s , a n d t h e p a t r i a r c h a l n u c l e a r family a s t h e
basic u n i t o f civil s o c i e t y ( E s p i n g - A n d e r s e n 1994). T h e K W N S w a s also
p r e m i s e d o n a class c o m p r o m i s e b e t w e e n o r g a n i z e d l a b o u r a n d o r g a -
nized business in which responsible u n i o n i s m a n d collective bargaining
p e r m i t t e d m a n a g e r s t o m a n a g e a n d w o r k e r s t o b e n e f i t f r o m rising p r o -
ductivity as wage earners and welfare recipients. T h e r e w e r e nonetheless
s o m e m a r g i n a l i z e d o r o v e r b u r d e n e d social g r o u p s - m o s t n o t a b l y w o m e n
a s h o u s e w i v e s , m o t h e r s a n d s e c o n d a r y p a r t i c i p a n t s i n t h e l a b o u r force
a n d a l s o i m m i g r a n t s o r o t h e r w o r k e r s (and their families) w h o w o r k e d
i n d i s a d v a n t a g e d s e g m e n t s o f t h e l a b o u r m a r k e t ( L e w i s 1998). T h i s
p a t t e r n w a s u n d e r m i n e d b o t h e c o n o m i c a l l y a n d socially. T h e crisis o f
A t l a n t i c F o r d i s m u n d e r m i n e d t h e a s s u m p t i o n s o f full e m p l o y m e n t , t h e
family wage and the g e n d e r e d division of labour; and also led state m a n -
a g e r s t o s e e t h e social w a g e i n c r e a s i n g l y a s a cost o f i n t e r n a t i o n a l p r o -
duction rather than as a source of domestic demand. T h e K W N S was
also affected by a w e a k e n i n g of t h e n a t i o n a l i d e n t i t y a n d s o l i d a r i t y t h a t
s h a p e d i t i n its f o r m a t i v e p e r i o d a n d h e l p e d s u s t a i n t h e c o a l i t i o n b e h i n d
it. T h i s is reflected in c h a n g e s in t h e values, social i d e n t i t i e s a n d i n t e r e s t s
a s s o c i a t e d w i t h t h e w e l f a r e s t a t e ( s e e c h a p t e r 2). T h e s e shifts h a v e frag-
m e n t e d t h e K W N S c o a l i t i o n o f forces, led t o d e m a n d s for m o r e differ-
e n t i a t e d a n d f l e x i b l e f o r m s o f e c o n o m i c a n d social policy, a n d led t o
c o n c e r n w i t h p r o b l e m s o f social e x c l u s i o n a n d e n s u r i n g life-time access
to t h e benefits of a r e s t r u c t u r e d w e l f a r e r e g i m e (for e x a m p l e , lifelong
learning).
T h i r d , t h e p r i m a c y o f t h e n a t i o n a l scale o f e c o n o m i c a n d social g o v e r -
n a n c e d e p e n d e d on the coincidence of national economy, national state.
 From Mixed Economy to Metagovernance 235

national society a n d t h e survival of t h e national state as a sovereign

body. T h i s s t r u c t u r e d c o h e r e n c e h a s also b e e n w e a k e n e d . T h e n a t i o n a l
e c o n o m y has b e e n u n d e r m i n e d by internationalization, the growth of
m u l t i - t i e r e d g l o b a l city n e t w o r k s , t h e f o r m a t i o n o f t r i a d e c o n o m i e s ( s u c h
a s t h e E U ) , a n d t h e r e - e m e r g e n c e o f r e g i o n a l a n d local e c o n o m i e s i n
n a t i o n a l s t a t e s ( s e e c h a p t e r s 3 a n d 5 ) . T h i s c o m p l e x a r t i c u l a t i o n of g l o b a l -
regional-national-local economies is related to the 'hollowing out' of the
n a t i o n a l s t a t e , a s its p o w e r s a r e d e l e g a t e d u p w a r d s t o s u p r a r e g i o n a l o r
international bodies, d o w n w a r d s to regional or local states, or o u t w a r d s
to relatively a u t o n o m o u s cross-national alliances a m o n g local m e t r o -
politan or regional states with c o m p l e m e n t a r y interests. T h e r e are also
g r o w i n g a t t e m p t s t o i n t e r n a t i o n a l i z e (or, a t least, i n E u r o p e , t o E u r o -
p e a n i z e ) social pohcy. A n d t h e u n i t y o f t h e n a t i o n - s t a t e h a s b e e n w e a k -
ened by the (admittedly uneven) growth of multiethnic and multicultural
societies a n d o f d i v i d e d p o l i t i c a l loyalties ( w i t h t h e r e s u r g e n c e o f r e g i o n -
a h s m a n d n a t i o n a l i s m a s t h e rise o f E u r o p e a n i d e n t i t i e s , d i a s p o r i c n e t -
w o r k s , c o s m o p o l i t a n p a t r i o t i s m , etc.). T h u s w e s e e a p r o l i f e r a t i o n o f s c a l e s
o n w h i c h e c o n o m i c a n d social p o l i c y a r e p u r s u e d a s well a s c o m p e t i n g
projects t o r e u n i f y i n t e r s c a l a r a r t i c u l a t i o n a r o u n d a n e w p r i m a r y l e v e l -
w h e t h e r this b e t h e industrial district, t h e c i t y - r e g i o n , w i d e r s u b n a t i o n a l
r e g i o n s , c r o s s - b o r d e r r e g i o n s , t h e t r i a d s o r t h e g l o b a l level.
Finally, t h e K W N S m i x e d e c o n o m y m o d e l e m e r g e d i n r e s p o n s e t o
market failure and e m p h a s i z e d the state's role in correcting for m a r k e t
failures. T h e s t a t e ' s r o l e i n t h i s r e g a r d n o n e t h e l e s s r e f l e c t e d t h e F o r d i s t
organizational paradigm. Large-scale, top-down hierarchical structures
b a s e d o n t h e belief i n e c o n o m i e s o f scale s p r e a d easily t o t h e s t a t e ' s e c o -
nomic a n d welfare roles as the primary m e a n s to correct for m a r k e t
failure. T h i s w a s a n e r a o f b i g b u s i n e s s , big u n i o n s a n d big g o v e r n m e n t
a n d 'organized capitalism' even in the m o r e liberal forms of Atlantic
Fordist r e g i m e s . T h i s m o d e l w a s u n d e r m i n e d b y v a r i o u s factors. T h e s e
include: g r o w i n g p o l i t i c a l r e s i s t a n c e t o t a x a t i o n a n d t h e e m e r g i n g
s t a g n a t i o n - i n f l a t i o n ; crisis i n p o s t w a r c o m p r o m i s e s b e t w e e n i n d u s t r i a l
capital a n d o r g a n i z e d l a b o u r ; n e w e c o n o m i c a n d social c o n d i t i o n s a n d
a t t e n d a n t p r o b l e m s t h a t c a n n o t b e g o v e r n e d easily, i f a t all, t h r o u g h c o n -
tinuing r e l i a n c e o n t o p - d o w n s t a t e p l a n n i n g a n d / o r s i m p l e m a r k e t f o r c e s ;
growing r e s e n t m e n t a b o u t t h e b u r e a u c r a t i s m , inflexibility a n d cost o f t h e
w e l f a r e s t a t e a s i t c o n t i n u e d t o e x p a n d d u r i n g t h e l a t e 1960s a n d 1970s;
and t h e r i s e o f n e w social m o v e m e n t s t h a t d i d n o t f i t easily i n t o t h e
postwar compromise (see chapter 2). These problems of the mixed
economy model indicated that planning and other forms of top-down
intervention b y t h e K e y n e s i a n w e l f a r e state h a d their o w n distinctive
c r i s i s - t e n d e n c i e s a n d s e e m e d t o b e i n c r e a s i n g l y p r o n e t o failure. A f t e r
a t t e m p t s t o r e i n v i g o r a t e this s t a t e f o r m t h r o u g h i n c r e a s e d i n t e r v e n t i o n
236 From Mixed Economy to Metagovernance

o n v a r i o u s scales, f l a n k e d i n s o m e cases b y efforts t o e x t e n d p a r t i c i p a -

t i o n i n d e c i s i o n - m a k i n g , a p p e a r e d t o h a v e failed i n t h e 1970s, t h e r e w e r e
i n s i s t e n t calls f r o m l i b e r a l s a n d n e o l i b e r a l s for ' m o r e m a r k e t , less s t a t e ' .
Yet, after a f e w y e a r s ' e x p e r i m e n t a t i o n w i t h n e o l i b e r a l i s m , m a r k e t forces
also s e e m e d t o b e less t h a n p e r f e c t i n s e v e r a l areas. I n p a r t i c u l a r , w h i l e
t h e K e y n e s i a n w e l f a r e f o r m s o f i n t e r v e n t i o n m a y h a v e b e e n rolled b a c k ,
p r i v a t i z a t i o n , d e r e g u l a t i o n a n d l i b e r a l i z a t i o n h a v e also b e e n s e e n t o
require new or enhanced forms of regulation, reregulation and compe-
t i t i o n policy. T h i s h a s c o n t r i b u t e d t o t h e m o r e g e n e r a l t r e n d t o w a r d s
i n c r e a s i n g r e l i a n c e o n s e l f - o r g a n i z a t i o n . Thus, d e s p i t e t h e survival o f
m a r k e t r h e t o r i c i n n e o l i b e r a l r e g i m e s , t h e m o s t significant t r e n d i n t h e s e ,
a s well a s i n p o s t - F o r d i s t r e g i m e s w h e r e o t h e r types o f g o v e r n a n c e p r e -
dominate, is towards networking, governance, partnership and other
f o r m s o f s e l f - o r g a n i z a t i o n a s t h e p r i m a r y m e a n s o f c o r r e c t i n g for m a r k e t
failure. T h i s i s reflected, a s w e h a v e s e e n , i n t h e n e w ' n e t w o r k p a r a d i g m ' ,
with its emphasis on partnership, regulated self-regulation, t h e informal
s e c t o r , t h e facilitation o f s e l f - o r g a n i z a t i o n a n d d e c e n t r a l i z e d c o n t e x t -
s t e e r i n g . T h u s w e c a n o b s e r v e a t e n d e n t i a l shift f r o m i m p e r a t i v e c o o r d i -
nation by the sovereign state to an emphasis on interdependence,
d i v i s i o n s o f k n o w l e d g e , reflexive n e g o t i a t i o n a n d m u t u a l l e a r n i n g .

4. Governance Failure?

R e c o g n i z i n g t h e s e m a j o r shifts i n m o d e s o f g o v e r n a n c e c o m p a r e d t o t h e
A t l a n t i c F o r d i s t e r a , w i t h its e m p h a s i s o n the m i x e d e c o n o m y , s h o u l d n o t
lead u s t o n e g l e c t t h e possibility o f g o v e r n a n c e failure. S e l f - o r g a n i z a t i o n
t h r o u g h n e t w o r k s n e e d n o t p r o v e m o r e efficient p r o c e d u r a l l y t h a n
m a r k e t s and states as m e a n s of e c o n o m i c or political coordination mecha-
nism; and it is by no m e a n s g u a r a n t e e d to p r o d u c e m o r e a d e q u a t e out-
comes. A c o m m i t m e n t to continuing deliberation and negotiation does
n o t e x c l u d e e v e n t u a l g o v e r n a n c e f a i l u r e . T h e c r i t e r i o n for s u c h failure
m u s t n o n e t h e l e s s differ f r o m t h a t for m a r k e t s o r t h e s t a t e . T h e r e i s n o
pre-given formal maximand or reference point to judge governance
success, a s t h e r e i s with m o n e t i z e d p r o f i t s i n t h e e c o n o m y a n d / o r t h e
(imaginary) perfect m a r k e t outcome. Nor is there a contingent substan-
t i v e c r i t e r i o n - t h e r e a l i z a t i o n of specific p o l i t i c a l o b j e c t i v e s c o n n e c t e d
to t h e (imagined) public interest - as t h e r e is with i m p e r a t i v e coordina-
t i o n b y t h e state. T h e p r i m a r y p o i n t o f g o v e r n a n c e i s t h a t goals will b e
m o d i f i e d i n and t h r o u g h o n g o i n g n e g o t i a t i o n and reflection. This sug-
gests t h a t g o v e r n a n c e faUure m a y c o m p r i s e failure t o r e d e f i n e objectives
i n t h e face o f c o n t i n u i n g d i s a g r e e m e n t a b o u t w h e t h e r t h e y a r e still valid
for t h e v a r i o u s p a r t n e r s .
 From Mixed Economy to Metagovernance 237

B u t o n e c a n also a p p l y p r o c e d u r a l a n d s u b s t a n t i v e c r i t e r i a t o l i e t e r a r -
chy a n d assess w l i e t i i e r i t p r o d u c e s m o r e efficient l o n g - t e r m o u t c o m e s
t h a n m a r k e t a l l o c a t i o n a n d m o r e effective l o n g - t e r m o u t c o m e s i n r e a l i z -
ing c o l l e c t i v e g o a l s t h a n i m p e r a t i v e c o o r d i n a t i o n b y states. T h i s r e q u i r e s
c o m p a r a t i v e e v a l u a t i o n of all t h r e e m o d e s of c o o r d i n a t i o n in t e r m s of all
t h r e e of their r e s p e c t i v e r a t i o n a l i t i e s . A v e r y g e n e r a l claim a b o u t t h e
superiority of n e t w o r k s has b e e n p r o p o s e d by Castells, t h e theorist of
i n f o r m a t i o n a l c a p i t a l i s m a n d t h e n e t w o r k society. H e s u g g e s t s t h a t t h e
t r a d i t i o n a l w e a k n e s s o f social n e t w o r k s i s t h a t ' t h e y h a v e c o n s i d e r a b l e
difficulty i n c o o r d i n a t i n g functions, i n f o c u s i n g r e s o u r c e s o n specific goals,
in m a n a g i n g t h e c o m p l e x i t y of a g i v e n t a s k b e y o n d a c e r t a i n size of t h e
n e t w o r k ' (2000a: 15). T h i s i s why, h e c o n t i n u e s , t h e y w e r e liable t o b e o u t -
performed by organizations that relied on imperative coordination to
m o b i h z e r e s o u r c e s a r o u n d c e n t r a l l y defined g o a l s a n d p u r s u e d t h e m
t h r o u g h r a t i o n a l i z e d , v e r t i c a l c h a i n s o f c o m m a n d a n d c o n t r o l . T h i s dis-
a d v a n t a g e h a s n o w b e e n definitively o v e r c o m e , h o w e v e r , t h a n k s t o t h e
spread of the new ICTs. For these enable networks to compress time and
s p a c e , t o n e g o t i a t e a n d adjust t h e i r goals i n r e a l t i m e a n d t o d e c e n t r a l i z e
r e s p o n s i b i l i t y for t h e i r e x e c u t i o n . T h i s i n t u r n e n a b l e s n e t w o r k s t o s h a r e
d e c i s i o n - m a k i n g a n d t o d e c e n t r e p e r f o r m a n c e (Castells 2000a: 15). O n e
m i g h t well q u e s t i o n this c e l e b r a t i o n o f t h e m i r a c l e o f I C T - e n a b l e d g l o b a l
n e t w o r k i n g i n t h e l i g h t o f t h e c o n t i n u e d i m p o r t a n c e o f v e r t i c a l divisions
of e c o n o m i c p o w e r a n d a u t h o r i t y as well as of h o r i z o n t a l d i v i s i o n s of
labour in e c o n o m i c n e t w o r k s and t h e n e t w o r k e d state. But t h e r e c a n
b e l i t t l e d o u b t t h a t s u c h m a r v e l l i n g a t t h e p e r f o r m a t i v e p o w e r o f self-
organization is widely shared. This can be seen in t h e increasing interest
i n h e t e r a r c h y ( i n all its f o r m s ) a s a m e c h a n i s m t o r e d u c e t r a n s a c t i o n costs
in the e c o n o m y in cases of b o u n d e d rationality, c o m p l e x i n t e r d e p e n d e n c e
a n d asset specificity. It is also r e f l e c t e d in t h e state's i n c r e a s i n g i n t e r e s t in
h e t e r a r c h y ' s p o t e n t i a l for e n h a n c i n g its c a p a c i t y t o s e c u r e p o l i t i c a l objec-
t i v e s b y s h a r i n g p o w e r w i t h forces b e y o n d i t a n d / o r d e l e g a t i n g r e s p o n -
sibihties for specific o b j e c t i v e s t o p a r t n e r s h i p s ( o r o t h e r h e t e r a r c h i c
arrangements). At the s a m e time, however, we should not ignore the con-
tinuing advantages of t h e m a r k e t a n d t o p - d o w n c o m m a n d as m e a n s of
c o o r d i n a t i o n . A f t e r all, e c o n o m i c n e t w o r k s o p e r a t e w i t h i n t h e w o r l d
m a r k e t a n d c o n t i n u e t o rely o n i t a t afl p o i n t s i n t h e i r e c o n o m i c activ-
ities; a n d e c o n o m i c n e t w o r k s typically i n v o l v e t h e s e l f - o r g a n i z a t i o n o f
o r g a n i z a t i o n s r a t h e r t h a n o f o t h e r w i s e i s o l a t e d i n d i v i d u a l s . A n d , pace
Nozick's anarcho-capitalist fantasies, we have yet to see t h e state dissolve
itself i n t o a s e r i e s of free-floating, s e l f - o r g a n i z i n g n e t w o r k s w i t h no o v e r -
arching coordination a n d no preservation of the right to recentralize
c o n t r o l i f t h e o p e r a t i o n s a n d / o r r e s u l t s o f n e t w o r k s d o n o t fulfil t h e e x p e c -
t a t i o n s o f s t a t e m a n a g e r s , affected i n t e r e s t s o r p u b l i c o p i n i o n .
238 From Mixed Economy to Metagovernance

Potential sources of g o v e r n a n c e f a i l u r e
T h e r e a r e v e r y good r e a s o n s for t h e f a i l u r e o f n e t w o r k s t o c o m p l e t e l y
displace m a r k e t s and hierarchy as m o d e s of coordination of complex
i n t e r d e p e n d e n c e . Here, given the concern of this book with t h e future
of t h e c a p i t a l i s t state, I will c o n c e n t r a t e on t h r e e m a i n sets of factors
w h i c h limit t h e success of t h e shift f r o m g o v e r n m e n t to g o v e r n a n c e for
t h e p u r p o s e s of e c o n o m i c a n d social policy. T h e first set affects all f o r m s
o f e c o n o m i c a n d social c o o r d i n a t i o n a n d i s i n s c r i b e d i n t h e n a t u r e o f
c a p i t a l i s m itself. T h e l a t t e r h a s always d e p e n d e d o n a c o n t r a d i c t o r y b a l -
a n c e b e t w e e n m a r k e t i z e d a n d n o n - m a r k e t i z e d o r g a n i z a t i o n a l forms.
A l t h o u g h this was previously u n d e r s t o o d mainly in terms of the balance
b e t w e e n m a r k e t a n d state (a distinction based on t h e institutional sepa-
r a t i o n a n d o p e r a t i o n a l a u t o n o m y o f e c o n o m i c s a n d politics), g o v e r n a n c e
d o e s n o t i n t r o d u c e a n e u t r a l t h i r d t e r m b u t a d d s a n o t h e r site u p o n w h i c h
t h e b a l a n c e c a n b e c o n t e s t e d (for e x a m p l e , i n t e r m s o f t h e l e a d i n g r o l e
i n p r i v a t e - p u b l i c p a r t n e r s h i p s ) . O n e a s p e c t o f this i s t h e s c o p e t h a t n e w
f o r m s o f g o v e r n a n c e p r o v i d e for a n e w m e e t i n g g r o u n d for t h e conflict-
ing logics of a c c u m u l a t i o n a n d political m o b i l i z a t i o n . T h i s is o n e of
t h e r e a s o n s w h y t h e a p p a r e n t p r o i n i s e o f s y m m e t r y i n reflexive self-
organization is rarely realized w h e n t h e governance of capital accumula-
t i o n i s a t stake. F o r t h e r e a r e m a r k e d s t r u c t u r a l a s y m m e t r i e s i n t h e
c a p i t a l - l a b o u r relation and in t h e forms of i n t e r d e p e n d e n c e b e t w e e n the
e c o n o m i c a n d t h e e x t r a - e c o n o m i c c o n d i t i o n s for capital a c c u m u l a t i o n .
T h e r e a r e t w o f u r t h e r p o i n t s t o e m p h a s i z e . W e s h o u l d r e c a l l t h a t t h e logic
o f c a p i t a l a c c u m u l a t i o n i s itself i n h e r e n t l y c o n t r a d i c t o r y a n d d i l e m m a t i c
a n d t h e t u r n t o g o v e r n a n c e t o c o m p e n s a t e for m a r k e t f a i l u r e n e i t h e r
suspends these contradictions or dilemmas nor resolves t h e m without
displacing o r d e f e r r i n g a t least s o m e o f t h e costs o f t h e i r p r o v i s i o n a l
resolution elsewhere. A n d , in addition, we should recall that t h e state
a n d p o l i t i c s a r e t h e m s e l v e s r i v e n b y d i l e m m a s a n d conflicts a n d this
p r o b l e m a t i z e s t h e scope a n d m e a n i n g o f l e g i t i m a t i o n .
T h e s e c o n d set c o n c e r n s t h e c o n t i n g e n t i n s e r t i o n o f g o v e r n a n c e
a r r a n g e m e n t s i n t o t h e m o r e g e n e r a l s t a t e s y s t e m - w h i c h i s itself a n i n t e -
g r a l a s p e c t o f t h e s t r u c t u r a l a s y m m e t r i e s j u s t m e n t i o n e d b u t w h i c h also
h a s its o w n specific s t r u c t u r a l b i a s e s . O f p a r t i c u l a r i m p o r t a n c e h e r e i s t h e
r e l a t i v e p r i m a c y o f different m o d e s o f c o o r d i n a t i o n a n d access t o insti-
t u t i o n a l s u p p o r t a n d m a t e r i a l r e s o u r c e s t o p u r s u e reflexively a r r i v e d - a t
g o v e r n a n c e objectives. A m o n g c r u c i a l issues h e r e a r e t h e f l a n k i n g a n d
s u p p o r t i n g m e a s u r e s t h a t a r e t a k e n b y t h e state, t h e p r o v i s i o n o f m a -
terial and symbolic support and t h e extent of any duplication or counter-
action by other coordination mechanisms. For governance mechanisms
a r e p a r t o f a m u c h w i d e r set o f m e c h a n i s m s t h a t exist w i t h i n t h e
 From Mixed Economy to Metagovernance 239

s t a t e i n its i n t e g r a l s e n s e , u n d e r s t o o d i n tliis c o n t e x t a s ' g o v e r n m e n t +

governance'.
T h e r e a r e t h r e e d i m e n s i o n s t o this: (1) t e r r i t o r i a l scale; (2) t e m p o r a l -
h i e s ; a n d (3) t h e t e c h n i c a l d i v i s i o n o f l a b o u r a n d its r e l a t i o n t o t h e s t a t e ' s
g e n e r a l p o l i t i c a l r o l e . First, a s b o t h g o v e r n a n c e a n d g o v e r n a n c e m e c h a -
n i s m s exist o n different scales ( i n d e e d o n e o f t h e i r f u n c t i o n s i s t o b r i d g e
scales), success a t o n e scale m a y well d e p e n d o n w h a t o c c u r s o n o t h e r
scales. S e c o n d , c o o r d i n a t i o n m e c h a n i s m s m a y also h a v e d i f f e r e n t t e m -
p o r a l h o r i z o n s . O n e f u n c t i o n o f g o v e r n a n c e (as o f q u a n g o s a n d c o r p o -
ratist a r r a n g e m e n t s b e f o r e h a n d ) i s t o e n a b l e d e c i s i o n s w i t h l o n g - t e r m
implications to be divorced from short-term political (especially elec-
t o r a l ) c a l c u l a t i o n s . C o r p o r a t i s m o n c e p l a y e d this r o l e , b u t t h e r e l a t i v i z a -
t i o n o f scale h a s w o r k e d t o d e n a t i o n a l i z e a n d d i s i n c o r p o r a t e p r o d u c e r
groups and to widen the range of 'stakeholders' whose participation
m i g h t b e r e l e v a n t . B u t d i s j u n c t i o n s m a y still a r i s e b e t w e e n t h e t e m p o -
ralities o f different g o v e r n a n c e a n d g o v e r n m e n t m e c h a n i s m s a n d t h i s
p o s e s p r o b l e m s a s t o t h e ability o f t h e s t a t e t o a d d r e s s i n t e r t e m p o r a l
p r o b l e m s and coordinate t h e m - especially as these p r o b l e m s arise
within t h e s t a t e a p p a r a t u s itself a s well a s i n o t h e r s p h e r e s . T h i r d ,
a l t h o u g h v a r i o u s g o v e r n a n c e m e c h a n i s m s m a y a c q u i r e specific t e c h n o -
e c o n o m i c , p o l i t i c a l a n d / o r i d e o l o g i c a l functions, t h e s t a t e t y p i c a l l y m o n i -
t o r s t h e i r effects o n its o w n c a p a c i t y t o s e c u r e social c o h e s i o n i n d i v i d e d
societies. I n this s e n s e s t a t e s a t t e m p t t o r e t a i n c o n t r o l o v e r t h e alloca-
t i o n o f t h e s e d i f f e r e n t f u n c t i o n s f r o m t h e v i e w p o i n t o f its g e n e r a l r o l e
a n d t h e continuing p r i m a c y of politics. T h e y reserve to themselves t h e
right t o o p e n , close, j u g g l e a n d r e a r t i c u l a t e g o v e r n a n c e f r o m t h e v i e w -
p o i n t n o t o n l y o f its t e c h n i c a l f u n c t i o n s b u t also f r o m t h e v i e w p o i n t o f
partisan a n d overall political advantage.
T h e third set of constraints is rooted in the n a t u r e of governance as
s e l f - o r g a n i z a t i o n . First, o n e o f t h e c a u s e s for g o v e r n a n c e failure i s t h e
o v e r s i m p l i f i c a t i o n o f t h e c o n d i t i o n s o f a c t i o n a n d / o r deficient k n o w l e d g e
a b o u t c a u s a l c o n n e c t i o n s affecting t h e o b j e c t o f g o v e r n a n c e . T h i s i s e s p e -
cially p r o b l e m a t i c w h e n this o b j e c t i s a n i n h e r e n t l y u n s t r u c t u r e d b u t
c o m p l e x s y s t e m , s u c h a s t h e i n s e r t i o n o f t h e local i n t o t h e g l o b a l e c o n o m y .
I n d e e d , this l e a d s t o t h e m o r e g e n e r a l ' g o v e r n a b i l i t y ' p r o b l e m , n a m e l y ,
t h e q u e s t i o n o f w h e t h e r t h e object o f g o v e r n a n c e could e v e r b e m a n -
a g e a b l e , e v e n w i t h a d e q u a t e k n o w l e d g e ( M a y n t z 1993; M a l p a s a n d
W i c k h a m 1995). S e c o n d , c o o r d i n a t i o n p r o b l e m s o f t e n a r i s e o n o n e o r
m o r e o f t h e i n t e r p e r s o n a l , i n t e r o r g a n i z a t i o n a l a n d i n t e r s y s t e m i c levels.
T h e s e t h r e e levels a r e o f t e n r e l a t e d i n c o m p l e x ways. T h u s i n t e r o r g a n i -
z a t i o n a l n e g o t i a t i o n o f t e n d e p e n d s o n i n t e r p e r s o n a l trust; a n d d e c e n t r e d
i n t e r s y s t e m i c s t e e r i n g i n v o l v e s t h e r e p r e s e n t a t i o n o f s y s t e m logics
through interorganizational and/or interpersonal communication. Third,
240 hom Mixed Economy to Metagovernance

linked to this is the problematic relation between those engaged in com-

m u n i c a t i o n ( n e t w o r k i n g , n e g o t i a t i o n , etc.) a n d t h o s e s o c i a l f o r c e s w h o s e
interests and identkies are being represented. G a p s inevhably o p e n
b e t w e e n these g r o u p s leading to representational and legitimacy crises
a n d / o r to p r o b l e m s in securing compliance. A n d , fourth, w h e r e t h e r e are
various partnerships a n d o t h e r g o v e r n a n c e a r r a n g e m e n t s c o n c e r n e d with
i n t e r d e p e n d e n t issues, t h e r e is a p r o b l e m of c o o r d i n a t i o n a m o n g t h e m .

5. Mefagovernance

G i v e n t h e c o m p l e x i t y o f t h e social w o r l d , s t r u c t u r a l c o n t r a d i c t i o n s ,
s t r a t e g i c d i l e m m a s a n d m u l t i p l e or, a t least a m b i v a l e n t , goals, failure i s
a necessary o u t c o m e of attempts at coordination through the anarchy of
t h e m a r k e t forces, t h e h i e r a r c h y o f s t a t e c o n t r o l , o r t h e h e t e r a r c h y o f t h e
self-organization of inter-organizational relations. It is w o r t h emphasiz-
i n g , / j o c e Castells, t h a t n e t w o r k a n d / o r p a r t n e r s h i p f o r m s o f g o v e r n a n c e
a r e n o t a l w a y s p r o c e d u r a l l y m o r e efficient t h a n m a r k e t s o r states i n
solving p r o b l e m s o f e c o n o m i c a n d / o r p o l i t i c a l c o o r d i n a t i o n , n o r a r e t h e y
a l w a y s m o r e likely t o p r o d u c e o u t c o m e s t h a t a r e a c c e p t a b l e i n t e r m s o f
s u b s t a n t i v e values. M o r e g e n e r a l l y , t h e r e i s a c l e a r p a r a d o x with r e g a r d
to the failure of markets, states a n d g o v e r n a n c e as proposed solutions to
t h e r e d u c t i o n a n d m a s t e r y o f c o m p l e x i t y - t h a t failure itself l e a d s t o
g r e a t e r complexity as fresh a t t e m p t s are m a d e to g o v e r n and to deal with
its c o n s e q u e n c e s .
If markets, states and g o v e r n a n c e are each p r o n e to failure, h o w is
e c o n o m i c a n d political c o o r d i n a t i o n for e c o n o m i c a n d social d e v e l o p -
m e n t ever possible and w h y is it often judged to have succeeded? In part,
t h i s c a n b e e x p l a i n e d t h r o u g h t h e m u l t i p l i c i t y o f satisficing c r i t e r i a a n d
t h e r a n g e o f p o t e n t i a l vested i n t e r e s t s s o t h a t a t least s o m e a i m s a r e r e a l -
i z e d t o a socially a c c e p t a b l e d e g r e e f o r a t l e a s t s o m e o f t h o s e affected.
A further explanation can be derived from the observation that 'gov-
e r n i n g a n d g o v e r n a n c e itself s h o u l d b e d y n a m i c , c o m p l e x a n d v a r i e d '
( K o o i m a n 1993b: 3 6 ) . T h i s h i g h l i g h t s t h e r o l e o f t h e ' m e t a s t r u c t u r e s ' o f
i n t e r - o r g a n i z a t i o n a l c o o r d i n a t i o n ( A l e x a n d e r 1995: 52) or, m o r e g e n e r -
ally, of m e t a g o v e r n a n c e or, p e r h a p s b e t t e r , c o l l i b r a t i o n - t h e g o v e r n a n c e
of governance.
M e t a g o v e r n a n c e i n v o l v e s t h e o r g a n i z a t i o n o f t h e c o n d i t i o n s for g o v -
e r n a n c e i n its b r o a d e s t sense. T h u s , c o r r e s p o n d i n g t o t h e t h r e e b a s i c
m o d e s of g o v e r n a n c e distinguished above, we can distinguish four m o d e s
of metagovernance, o n e of which is an umbrella m o d e .
F i r s t , t h e r e i s m e t a e x c h a n g e . T h i s i n v o l v e s t h e reflexive r e d e s i g n o f
i n d i v i d u a l m a r k e t s (for e x a m p l e , for l a n d , l a b o u r , m o n e y , c o m m o d i t i e s .
 From Mixed Economy to Metagovernance 241

k n o w l e d g e - o r a p p r o p r i a t e s u b d i v i s i o n s t h e r e o f ) a n d / o r t h e reflexive
reordering of relations among markets by modifying their operation and
articulation. M a r k e t agents often resort to m a r k e t redesign in r e s p o n s e
to failure a n d / o r h i r e the services of those w h o claim s o m e e x p e r t i s e in
this f i e l d . A m o n g t h e l a t t e r a r e m a n a g e m e n t g u r u s , m a n a g e m e n t c o n -
sultants, h u m a n relations experts, c o r p o r a t e lawyers a n d accountants.
M o r e g e n e r a l l y , t h e r e h a s l o n g b e e n i n t e r e s t i n issues o f t h e i n s t i t u t i o n a l
r e d e s i g n o f t h e m a r k e t m e c h a n i s m , its e m b e d d e d n e s s i n n o n - m a r k e t
m e c h a n i s m s , a n d t h e c o n d i t i o n s for t h e m a x i m u m f o r m a l r a t i o n a l i t y o f
m a r k e t forces. T h e r e a r e a l s o m a r k e t s i n m a r k e t s . T h i s c a n l e a d t o
' r e g i m e s h o p p i n g ' , c o m p e t i t i v e d e r e g u l a t o r y ' r a c e s t o t h e b o t t o m ' or, i n
certain conditions, 'races to the t o p ' to p r o v i d e the most favourable
c o n d i t i o n s for s t r o n g c o m p e t i t i o n (see c h a p t e r 3 ) . M o r e o v e r , b e c a u s e
markets function in the shadow of hierarchy a n d / o r heterarchy, attempts
a r e also m a d e t o m o d i f y m a r k e t s , t h e i r i n s t i t u t i o n a l s u p p o r t s a n d t h e i r
a g e n t s t o i m p r o v e t h e i r efficiency a n d / o r c o m p e n s a t e for m a r k e t f a i l u r e s
and inadequacies.
S e c o n d , t h e r e i s m e t a o r g a n i z a t i o n . T h i s i n v o l v e s t h e reflexive r e d e s i g n
of organizations, the creation of intermediating organizations, the
reordering of inter-organizational relations, and the m a n a g e m e n t of
organizational ecologies (in o t h e r words, the organization of t h e condi-
tions of organizational evolution in conditions where m a n y organizations
coexist, c o m p e t e , c o o p e r a t e a n d c o - e v o l v e ) . R e f l e x i v e o r g a n i z a t i o n a l
m a n a g e r s can u n d e r t a k e such metaorganizational functions themselves
(for e x a m p l e , t h r o u g h ' m a c r o - m a n a g e m e n t ' a n d o r g a n i z a t i o n a l i n n o v a -
tion) and/or t u r n to alleged experts such as constitutional lawyers, public
choice economists, theorists of public administration, think-tanks, advo-
c a t e s of reflexive p l a n n i n g , s p e c i a l i s t s in p o l i c y e v a l u a t i o n , e t c . T h i s is
reflected i n t h e c o n t i n u i n g r e d e s i g n , r e s c a l i n g , a n d a d a p t a t i o n , s o m e t i m e s
m o r e ruptural, sometimes m o r e continuous, in the state a p p a r a t u s and
the m a n n e r in which it is e m b e d d e d within the wider political system.
Third, there is metaheterarchy. This involves the organization of the
c o n d i t i o n s o f s e l f - o r g a n i z a t i o n b y r e d e f i n i n g t h e f r a m e w o r k for h e t e r a r -
c h y o r reflexive s e l f - o r g a n i z a t i o n . I t h a s s o m e t i m e s b e e n c a l l e d m e t a -
governance (including, it must be admitted, in my o w n w o r k ) - a t e r m
t h a t i s b e t t e r r e s e r v e d for w h a t D u n s i r e (1996) calls c o l l i b r a t i o n a n d i s
best i n t e r p r e t e d a s t h e u m b r e l l a c o n c e p t f o r t h e r e d e s i g n o f t h e r e l a -
t i o n s h i p a m o n g different m o d e s o f g o v e r n a n c e . T h i s c a n r a n g e f r o m p r o -
v i d i n g o p p o r t u n i t i e s f o r s p o n t a n e o u s s o c i a b i h t y ( F u k u y a m a 1995; s e e
also P u t n a m 2000) to introducing innovations to further 'institutional
t h i c k n e s s ' ( A m i n a n d T h r i f t 1995).
Fourth, a n d finally, t h e r e is metagovernance. This involves rearticu-
l a t i n g a n d collibrating d i f f e r e n t m o d e s o f g o v e r n a n c e . T h e k e y issues for
242 From Mixed Economy to Metagovernance

those involved in m e t a g o v e r n a n c e are '(a) h o w to cope with other actors'

self-referentiality; a n d ( b ) h o w t o c o p e w i t h t h e i r o w n self-referentiality'
( D u n s i r e 1996: 320). M e t a g o v e r n a n c e involves m a n a g i n g t h e c o m p l e x -
ity, p l u r a l i t y a n d t a n g l e d h i e r a r c h i e s f o u n d i n p r e v a i l i n g m o d e s o f co-
o r d i n a t i o n . I t i s t h e o r g a n i z a t i o n o f t h e c o n d i t i o n s for g o v e r n a n c e a n d
involves t h e judicious mixing of market, hierarchy and networks to
achieve t h e best possible o u t c o m e s from the viewpoint of those engaged
i n m e t a g o v e r n a n c e . f n t h i s s e n s e i t also m e a n s t h e o r g a n i z a t i o n o f t h e
c o n d i t i o n s o f g o v e r n a n c e i n t e r m s o f t h e i r s t r u c t u r a l l y i n s c r i b e d stra-
tegic selectivity, t h a t is, i n t e r m s o f t h e i r a s y m m e t r i c a l p r i v i l e g i n g o f s o m e
o u t c o m e s o v e r others. U n f o r t u n a t e l y , since e v e r y p r a c t i c e i s p r o n e t o
failure, m e t a g o v e r n a n c e a n d c o l l i b r a t i o n a r e also likely t o fail. T h i s
implies t h a t t h e r e i s n o A r c h i m e d e a n p o i n t f r o m w h i c h g o v e r n a n c e o r
collibration can be guaranteed to succeed.
M e t a g o v e r n a n c e should not be confused with some superordinate
level o f g o v e r n m e n t i n c o n t r o l o f all g o v e r n a n c e a r r a n g e m e n t s n o r with
t h e i m p o s i t i o n of a single, a l l - p u r p o s e m o d e of g o v e r n a n c e . R a t h e r , it
i n v o l v e s a c o n t a i n i n g p r o c e s s of ' m u d d l i n g t h r o u g h ' . It i n v o l v e s defining
n e w b o u n d a r y - s p a n n i n g r o l e s a n d f u n c t i o n s , c r e a t i n g l i n k a g e devices,
s p o n s o r i n g n e w o r g a n i z a t i o n s , i d e n t i f y i n g a p p r o p r i a t e lead o r g a n i z a t i o n s
to coordinate other partners, designing institutions and generating
v i s i o n s t o facilitate s e l f - o r g a n i z a t i o n i n different f i e l d s . I t also i n v o l v e s
p r o v i d i n g m e c h a n i s m s for c o l l e c t i v e f e e d b a c k a n d l e a r n i n g a b o u t t h e
f u n c t i o n a l linkages a n d t h e m a t e r i a l i n t e r d e p e n d e n c i e s a m o n g different
sites a n d s p h e r e s o f a c t i o n , a n d e n c o u r a g i n g a r e l a t i v e c o h e r e n c e a m o n g
d i v e r s e objectives, s p a t i a l a n d t e m p o r a l h o r i z o n s , a c t i o n s a n d o u t c o m e s
of governance arrangements. It involves the shaping of the context
within which these a r r a n g e m e n t s can be forged r a t h e r t h a n developing
specific s t r a t e g i e s a n d initiatives for t h e m .
States play a major and increasing role in m e t a g o v e r n a n c e . They
p r o v i d e t h e g r o u n d r u l e s for g o v e r n a n c e a n d t h e r e g u l a t o r y o r d e r i n
a n d t h r o u g h w h i c h g o v e r n a n c e p a r t n e r s can p u r s u e t h e i r a i m s ; e n s u r e
the compatibility or c o h e r e n c e of different governance m e c h a n i s m s a n d
r e g i m e s ; act a s t h e p r i m a r y o r g a n i z e r o f t h e d i a l o g u e a m o n g policy
c o m m u n i t i e s ; d e p l o y a relative m o n o p o l y of o r g a n i z a t i o n a l i n t e l l i g e n c e
and information with which to shape cognitive expectations; serve as a
' c o u r t o f a p p e a l ' for d i s p u t e s arising w i t h i n a n d o v e r g o v e r n a n c e ; s e e k
t o r e b a l a n c e p o w e r differentials b y s t r e n g t h e n i n g w e a k e r f o r c e s o r
s y s t e m s i n t h e i n t e r e s t s o f s y s t e m i n t e g r a t i o n a n d / o r social c o h e s i o n ; try
to modify the self-understanding of identities, strategic capacities and
i n t e r e s t s o f i n d i v i d u a l a n d collective a c t o r s i n different s t r a t e g i c c o n t e x t s ,
a n d h e n c e a l t e r t h e i r i m p l i c a t i o n s for p r e f e r r e d s t r a t e g i e s a n d tactics;
a n d a l s o a s s u m e political r e s p o n s i b i l i t y i n t h e e v e n t o f g o v e r n a n c e
 From Mixed Economy to Metagovernance 243

failure. T h i s e m e r g i n g r o l e m e a n s t h a t n e t w o r k i n g , n e g o t i a t i o n , n o i s e
r e d u c t i o n a n d n e g a t i v e a s well a s p o s i t i v e c o o r d i n a t i o n o c c u r 'in
t h e s h a d o w o f h i e r a r c h y ' ( S c h a r p f 1994: 4 0 ) . I t also s u g g e s t s t h e n e e d
for a l m o s t p e r m a n e n t i n s t i t u t i o n a l a n d o r g a n i z a t i o n a l i n n o v a t i o n t o
m a i n t a i n t h e v e r y possibility ( h o w e v e r r e m o t e ) o f s u s t a i n e d e c o n o m i c
growth.
T h u s m e t a g o v e r n a n c e does n o t e l i m i n a t e o t h e r m o d e s o f c o o r d i n a -
tion. M a r k e t s , h i e r a r c h i e s a n d h e t e r a r c h i e s still exist; b u t t h e y o p e r a t e i n
a c o n t e x t o f ' n e g o t i a t e d d e c i s i o n - m a k i n g ' . So, o n t h e o n e h a n d , m a r k e t
c o m p e t i t i o n will b e b a l a n c e d b y c o o p e r a t i o n a n d t h e i n v i s i b l e h a n d will
b e c o m b i n e d w i t h a visible h a n d s h a k e . O n t h e o t h e r h a n d , t h e s t a t e i s
no longer the sovereign authority. It b e c o m e s but one participant a m o n g
o t h e r s i n t h e p l u r a l i s t i c g u i d a n c e s y s t e m a n d c o n t r i b u t e s its o w n dis-
tinctive r e s o u r c e s t o t h e n e g o t i a t i o n p r o c e s s . A s t h e r a n g e o f n e t w o r k s ,
partnerships and other models of economic and political governance
e x p a n d , official a p p a r a t u s e s r e m a i n at best primus inter pares. F o r ,
a l t h o u g h p u b l i c m o n e y a n d l a w w o u l d still b e i m p o r t a n t i n u n d e r p i n n i n g
their o p e r a t i o n , o t h e r r e s o u r c e s (such a s p r i v a t e m o n e y , k n o w l e d g e o r
e x p e r t i s e ) w o u l d also b e critical t o t h e i r success. T h e state's i n v o l v e m e n t
w o u l d b e c o m e less h i e r a r c h i c a l , less c e n t r a l i z e d a n d less dirigiste i n c h a r -
acter. T h e e x c h a n g e o f i n f o r m a t i o n a n d m o r a l s u a s i o n w o u l d b e c o m e k e y
s o u r c e s o f l e g i t i m a t i o n a n d t h e s t a t e ' s influence w o u l d d e p e n d a s m u c h
on its r o l e as a p r i m e s o u r c e a n d m e d i a t o r of collective i n t e l l i g e n c e as
o n its c o m m a n d o v e r e c o n o m i c r e s o u r c e s o r l e g i t i m a t e c o e r c i o n ( W i l l k e
1992).

6. Metagovernance Failure

R e c o g n i z i n g p o s s i b l e c o n t r i b u t i o n s o f reflexive m e t a g o v e r n a n c e t o e c o -
n o m i c a n d social coordination is no g u a r a n t e e of success. It is certainly
not a purely technical matter that can be resolved by experts in organi-
z a t i o n a l d e s i g n o r p u b l i c a d m i n i s t r a t i o n . F o r all t h e p a r t i c u l a r activities
and functions of the state are conducted under the primacy of the p o -
litical o w i n g t o i t s u l t i m a t e r e s p o n s i b i l i t y f o r m a i n t a i n i n g social c o h e s i o n .
This c o n s t r a i n t p l a g u e s t h e l i b e r a l p r e s c r i p t i o n o f a n a r m s - l e n g t h r e l a -
tionship between the m a r k e t and the nightwatchman state - since states
a r e r a r e l y s t r o n g e n o u g h t o resist p r e s s u r e s t o i n t e r v e n e w h e n antici-
p a t e d p o l i t i c a l a d v a n t a g e i s a t s t a k e o r i t n e e d s t o r e s p o n d t o social
u n r e s t . M o r e generally, we c a n safely a s s u m e t h a t , if every mode of gov-
ernance fails, then so will metagovernance! T h i s is e s p e c i a l l y likely w h e r e
the objects of governance and metagovernance are complicated and
interconnected."
244 From Mixed Economy to Metagovernance

O v e r a l l , this analysis l e a d s t o t h r e e c o n c l u s i o n s , i n t e l l e c t u a l , p r a c t i c a l
a n d p h i l o s o p h i c a l respectively. F o r , o n c e t h e i n c o m p l e t e n e s s o f a t t e m p t s
at c o o r d i n a t i o n (whether t h r o u g h t h e m a r k e t , t h e state or heterarchy) is
a c c e p t e d as i n e v i t a b l e , it is n e c e s s a r y to a d o p t a satisficing a p p r o a c h
w h i c h h a s a t least t h r e e k e y d i m e n s i o n s .
First, i t r e q u i r e s a reflexive o r i e n t a t i o n a b o u t w h a t w o u l d b e a n
a c c e p t a b l e o u t c o m e i n t h e c a s e o f i n c o m p l e t e success, t o c o m p a r e t h e
effects o f f a f l u r e / i n a d e q u a c i e s i n t h e m a r k e t , g o v e r n m e n t a n d gover-
nance, a n d regular reassessment of t h e extent to which c u r r e n t actions
are producing desired outcomes. This involves a c o m m i t m e n t n o t only
t o l e a r n i n g b u t also t o l e a r n i n g a b o u t h o w t o l e a r n reflexively.
S e c o n d , it r e q u i r e s d e l i b e r a t e c u l t i v a t i o n of a flexible r e p e r t o i r e
( r e q u i s i t e v a r i e t y ) o f r e s p o n s e s t o r e t a i n t h e ability f l e x i b l y t o a l t e r
s t r a t e g i e s a n d select t h o s e t h a t a r e m o r e successful. F o r , i f e v e r y m o d e
o f e c o n o m i c a n d p o h t i c a l c o o r d i n a t i o n i s f a i l u r e - l a d e n , r e l a t i v e success
i n c o o r d i n a t i o n o v e r t i m e d e p e n d s o n t h e c a p a c i t y t o switch m o d e s o f
c o o r d i n a t i o n a s t h e limits o f a n y o n e m o d e b e c o m e e v i d e n t . T h i s m a y
well s e e m inefficient f r o m a n e c o n o m i z i n g v i e w p o i n t b e c a u s e i t i n t r o -
d u c e s slack or w a s t e . B u t it also p r o v i d e s m a j o r s o u r c e s of flexibility m
t h e face of failure (cf. G r a b h e r 1994). M o r e o v e r , b e c a u s e different
p e r i o d s a n d c o n j u n c t u r e s r e q u i r e ' d i f f e r e n t k i n d s o f p o l i c y mix, t h e
b a l a n c e i n t h e r e p e r t o i r e will n e e d t o b e v a r i e d . T h i s p r o v i d e s t h e basis
for d i s p l a c i n g o r p o s t p o n i n g f a i l u r e s a n d crises.
I t also s u g g e s t s t h a t t h e i d e o l o g i c a l l y m o t i v a t e d d e s t r u c t i o n o f
a l t e r n a t i v e m o d e s o f c o o r d i n a t i o n c o u l d p r o v e c o u n t e r p r o d u c t i v e : for
t h e y m a y w e l l n e e d t o b e r e i n v e n t e d i n o n e o r a n o t h e r f o r m . This d i l e m m a
is evident from the experience of the Thatcher (1979-90) and Major
( 1 9 9 0 - 7 ) g o v e r n m e n t s . T h e n e o l i b e r a l hostility t o t h e i n t e r v e n t i o n i s t
state, t r a d e u n i o n i s m a n d c o r p o r a t i s m , m u n i c i p a l socialism a n d o t h e r fea-
t u r e s o f t h e p o s t w a r s e t t l e m e n t w a s r e f l e c t e d i n c o n t i n u i n g efforts t o
d e s t r o y , w e a k e n o r m a r g i n a l i z e t h e m . B u t , whilst this w a s p e r h a p s n e c -
essary to change attitudes in the a t t e m p t e d modernization of the British
e c o n o m y , state a n d society, i t also d i s s i p a t e d e x p e r i e n c e a n d k n o w l e d g e
t h a t c o u l d still p r o v e useful. A n d , whilst i t r e m o v e d specific i n s t i t u t i o n a l
a n d o r g a n i z a t i o n a l o b s t a c l e s t o t h e n e o l i b e r a l p r o j e c t , i t also d e p r i v e d
t h e c e n t r a l s t a t e i n t h e s h o r t t e r m o f a n a d e q u a t e r a n g e o f m o d e s o f co-
o r d i n a t i o n t o d e a l w i t h c o m p l e x issues i n a n e n v i r o n m e n t m a d e m o r e t u r -
b u l e n t b y t h e i n t e n d e d a n d u n i n t e n d e d effects o f its o w n radical policies.
So the Thatcher and Major governments eventually found it necessary to
r e l e a r n l e s s o n s a b o u t t h e limits o f t h e m a r k e t m e c h a n i s m a n d t o r e i n v e n t
alternative m o d e s of coordination to supplement, complement or
c o m p e n s a t e for t h e o p e r a t i o n o f m a r k e t forces. This r e d i s c o v e r y w a s
usually d i s g u i s e d b e h i n d c h a n g e d n a m e s , i n n o v a t i v e d i s c o u r s e s , policy
 From Mixed Economy to Metagovernance 245

ctiurning a n d i n s t i t u t i o n a l t u r n o v e r . N o n e t h e l e s s , t h e u s u a l policy cycle o f

m a r k e t , g o v e r n a n c e a n d s t a t e w a s r e p e a t e d i n c e n t r a l g o v e r n m e n t poli-
cies for u r b a n r e g e n e r a t i o n a n d m a n y o t h e r policies.
T h i r d , i t r e q u i r e s self-reflexive ' i r o n y ' i n t h e sense t h a t t h e r e l e v a n t
social f o r c e s m u s t r e c o g n i z e t h e l i k e l i h o o d o f f a i l u r e b u t p r o c e e d a s i f
success w e r e p o s s i b l e . T h e s u p r e m e i r o n y i n this c o n t e x t i s t h a t t h e n e e d
for i r o n y h o l d s n o t o n l y for i n d i v i d u a l a t t e m p t s a t g o v e r n a n c e u s i n g indi-
vidual g o v e r n a n c e m e c h a n i s m s , b u t also for t h e p r a c t i c e o f m e t a g o v e r -
n a n c e u s i n g a p p r o p r i a t e m e t a g o v e r n a n c e m e c h a n i s m s . M o r e often,
h o w e v e r , w e f i n d c y n i c i s m a n d fatalism. C y n i c s a n t i c i p a t e f a i l u r e b u t s e e k
to further t h e i r o w n interests if a n d w h e n failure occurs ( t h e b e h a v i o u r
o f its d i r e c t o r s a s E n r o n c o l l a p s e d i s o n l y t h e m o s t e g r e g i o u s r e c e n t
e x a m p l e o f s u c h b e h a v i o u r ) . Fatalists a n t i c i p a t e failure a n d t h e r e f o r e
e i t h e r d o n o t h i n g o r c a r r y o n r e g a r d l e s s (for f u r t h e r d i s c u s s i o n o f
r e q u i s i t e reflexivity, r e q u i s i t e v a r i e t y a n d r e q u i s i t e irony, s e e J e s s o p
2002b). A l l t h r e e d i m e n s i o n s o f d e a l i n g w i t h t h e p r o s p e c t s o f m e t a g o v -
e r n a n c e failure h i g h l i g h t o n c e a g a i n , o f c o u r s e , t h e i m p o r t a n c e o f a g e n c y
for t h e c o u r s e o f e c o n o m i c , political a n d social d e v e l o p m e n t .

7. Concluding Remarks

T h e a r g u m e n t s i n this c h a p t e r b e g a n w i t h g e n e r a l reflections o n t h e
r e c u r r e n c e o f liberalism, c o r p o r a t i s m a n d s t a t i s m a s m e a n s o f g o v e r n i n g
t h e c o m p l e x m a t e r i a l , social a n d t e m p o r a l i n t e r d e p e n d e n c e s t h a t c h a r -
acterize t h e always-problematic course of capital accumulation. I t h e n
s u p p l e m e n t e d this a c c o u n t w i t h g e n e r a l r e f l e c t i o n s o n t h e r e c u r r e n c e o f
failures i n m a r k e t s , c o n c e r t a t i o n a n d p l a n n i n g a s m e a n s o f g o v e r n i n g
t h e s e s a m e i n t e r d e p e n d e n c e s . O n this basis I d e s c r i b e d t h e m u t u a l c o n -
s t i t u t i o n o f t h e objects, s u b j e c t s a n d m o d a l i t i e s o f g o v e r n a n c e o f A t l a n t i c
F o r d i s m o n all f o u r d i m e n s i o n s o f t h e K W N S a n d s k e t c h e d t h e i r crisis-
t e n d e n c i e s a n d e m e r g i n g failures. I identified t h e increased salience in
d i s c o u r s e a n d i n p r a c t i c e o f v a r i o u s f o r m s o f s e l f - o r g a n i z a t i o n i n t h e gov-
e r n a n c e o f t h e globalizing, k n o w l e d g e - b a s e d e c o n o m y . R a t h e r t h a n j o i n
in the current celebration of g o v e r n a n c e as a superior m o d e of coordi-
nation to m a r k e t s and t h e state, however, I offered a contrarian account
of t h e g e n e r a l t e n d e n c i e s to g o v e r n a n c e failure. I r e i n f o r c e d this a c c o u n t
by noting once again the contradictions and dilemmas inherent in the
capital r e l a t i o n a n d t h e l i m i t a t i o n s t o effective s t a t e i n t e r v e n t i o n o w i n g
to the p r i m a c y of t h e political in the exercise of state power. In contrast
t o p r e c e d i n g c h a p t e r s , h o w e v e r , I h a v e n o t f o l l o w e d this g e n e r a l a n a l y -
sis w i t h m o r e d e t a i l e d w o r k o n specific f o r m s o f g o v e r n a n c e a n d g o v e r -
n a n c e f a i l u r e . T h e m a i n r e a s o n for this i s t h a t t h e r e c a n b e n o g e n e r a l
246 From Mixed Economy to Metagovernance

t h e o r y of governance because t h e r e is no general object of governance.

T h i s c o n t r a s t s w i t h t h e possibilities of c o n s t r u c t i n g a g e n e r a l t h e o r y of
c a p i t a l a c c u m u l a t i o n o n t h e basis o f t h e specificities o f t h e c a p i t a l rela-
t i o n (for f u r t h e r d i s c u s s i o n of this p o i n t , see Jessop 1995). N o n e t h e l e s s ,
t h e a n a l y s e s p r e s e n t e d i n e a r l i e r c h a p t e r s s h o u l d suffice t o s u p p o r t t h e
overall argument.
To conclude, whilst recognizing the inevitability of failure, we should
also n o t e t h a t t h e r e i s m u c h t h a t r e m a i n s c o n t i n g e n t . T h i s i n c l u d e s t h e
m o d a l i t i e s , sites, f o r m s , t e m p o r a l i t i e s , s p a t i a l i t i e s a n d effects of failure;
a n d , i n a d d i t i o n , t h e c a p a c i t i e s for r e c u p e r a t i n g o r r e s p o n d i n g t o failure.
I n t e r e s t i n s e l f - o r g a n i z a t i o n h a s g r o w n i n r e c e n t years i n r e s p o n s e t o t h e
e x p e r i e n c e o f m a r k e t a n d s t a t e failure a n d i n r e s p o n s e t o t h e i n c r e a s i n g
c o m p l e x i t y of t h e social world. But, as I h a v e also a r g u e d , self-reflexive
s e l f - o r g a n i z a t i o n itself i s p r o n e t o f a i l u r e . T h e r e a r e d i f f e r e n t w a y s o f
coping with t h e inevitability of failure ranging from small-scale incre-
mental adjustments based on trial-and-error learning to comprehensive
attempts at constitutional and institutional redesign. Indeed, without
l e a r n i n g and forgetting, social o r d e r , s u c h as it is, w o u l d be i m p o s s i b l e .
Finally, i n a d d r e s s i n g t h e f o u r m a i n f o r m s o f m e t a g o v e r n a n c e ( c o n c e r n e d
r e s p e c t i v e l y w i t h t h e reflexive r e o r g a n i z a t i o n o f m a r k e t s , h i e r a r c h i e s a n d
n e t w o r k s a n d with t h e collibration of these different m o d e s of gover-
nance), I have emphasized three general principles of governance in the
face o f c o m p l e x i t y : t h e s e a r e t h e p r i n c i p l e s o f r e q u i s i t e reflexivity,
r e q u i s i t e v a r i e t y a n d r e q u i s i t e irony. H o w t h e s e a r e a p p l i e d , if at afl, in
t h e r e g u l a t i o n a n d g o v e r n a n c e o f c a p i t a l a c c u m u l a t i o n i s a n issue still t o
be properly explored.
 7
Towards
Schumpeterian Workfare
Postnational Regimes?

This c h a p t e r d r a w s t o g e t h e r t h e m a i n t h r e a d s o f a r g u m e n t s s p r e a d o v e r
t h e last five c h a p t e r s . I t s u g g e s t s t h a t w h a t i s t e n d e n t i a l l y r e p l a c i n g t h e
Keynesian welfare national state is a S c h u m p e t e r i a n w o r k f a r e post-
n a t i o n a l r e g i m e . I f i r s t discuss t h i s a s a n i d e a l - t y p e a n d t h e n , a s w i t h t h e
K W N S , p r o p o s e s o m e v a r i a n t f o r m s . I t i s n o t m y i n t e n t i o n t o offer a n
alternative to the S W P R as it is outlined h e r e as a key e l e m e n t in t h e
m o d e o f r e g u l a t i o n o f c o n t e m p o r a r y c a p i t a l i s m , let a l o n e t o p r o p o s e a
detailed b l u e p r i n t for an a l t e r n a t i v e to capitalism as a m o d e of p r o -
d u c t i o n . T h e r e a r e t h r e e r e a s o n s for t h i s r e t i c e n c e . F i r s t , t h i s s t u d y h a s
b e e n m a i n l y c o n c e r n e d t o p r o v i d e t h e t h e o r e t i c a l basis f o r a r a d i c a l r e -
e x a m i n a t i o n o f t h e d y n a m i c o f A t l a n t i c F o r d i s m a n d for a n e x p l o r a t i o n
o f p r o b a b l e f o r m s o f e c o n o m i c a n d social policy i n t h e p o s t - F o r d i s t
p e r i o d . S u c h a l i m i t e d s t u d y c a n n o t p r o v i d e t h e basis for s k e t c h i n g a n
alternative, which would n e e d to embrace the entire world m a r k e t and
lifeworld a n d t h u s look well b e y o n d t h e confines o f t h e s p a t i o - t e m p o r a l
m a t r i c e s w i t h w h i c h this w o r k i s c o n c e r n e d . S e c o n d , a l t h o u g h I h a v e
hinted at t h e ecological contradictions of capitalism, I h a v e n o t really
a d d r e s s e d t h e s e c o n t r a d i c t i o n s e v e n for t h e e c o n o m i c s p a c e s o f A t l a n t i c
F o r d i s m , l e t a l o n e for t h e w o r l d a s a w h o l e . A n y a l t e r n a t i v e w o u l d n e e d
to integrate t h e political e c o n o m y of capitalism into a m o r e encompassing
c r i t i q u e o f its p o l i t i c a l ecology. T h e s a m e p o i n t n e e d s t o b e m a d e r e g a r d -
ing t h e m i l i t a r y d i m e n s i o n s o f s t a t e p o w e r a n d its r e l a t i o n s h i p t o g e o -
politics a n d g e o - e c o n o m i c s . A n d , t h i r d , g i v e n m y r e m a r k s o n g o v e r n a n c e
failure a n d t h e i m p o r t a n c e o f collective reflexivity a n d r o m a n t i c irony,
a n y a l t e r n a t i v e t o t h e globalizing, k n o w l e d g e - b a s e d e c o n o m y o r t h e
S W P R , let a l o n e c a p i t a l i s m a s a w h o l e , w o u l d h a v e t o b e d e v e l o p e d a n d
e l a b o r a t e d collectively a n d d e m o c r a t i c a l l y a n d n o t p r o n o u n c e d e x cathe-
248 Towards Schumpeterian Workfare Postnational Regimes?

dra b y a n i n v e t e r a t e t h e o r i s t . I h o p e t h a t t h e m o d e s t r e m a r k s c o n t a i n e d
i n this w o r k will n o n e t h e l e s s c o n t r i b u t e t o t h e s e a r c h for a l t e r n a t i v e s .

1. Trends and Claims

C h a p t e r 2 p r e s e n t e d a stylized a c c o u n t of t h e f o r m of s t a t e t h a t d e v e l -
oped in t h e space of A t l a n t i c Fordism. T h e next four chapters each
e l a b o r a t e d e m e r g i n g t r e n d s i n a d v a n c e d capitalism a n d its state form
r e l a t i v e t o o n e o r a n o t h e r d i m e n s i o n o f t h e K W N S . Specifically, t h e y
identified:

• a t e n d e n t i a l shift f r o m K e y n e s i a n full e m p l o y m e n t t o w a r d s
Schumpeterian economic intervention, which I summarized in terms
of t h e rise of a specifically S c h u m p e t e r i a n version of t h e c o m p e t i t i o n
state;
• a t e n d e n t i a l shift f r o m a welfarist m o d e of s o c i a l r e p r o d u c t i o n
t o w a r d s a w o r k f a r i s t m o d e , d e f i n e d in t e r m s of t h e i n c r e a s i n g s u b -
o r d i n a t i o n o f social p o l i c y a n d c o l l e c t i v e c o n s u m p t i o n t o t h e dis-
cursively constructed needs of the economy;
• a t e n d e n t i a l shift f r o m t h e p r i i h a c y of t h e n a t i o n a l scale in d e t e r -
m i n i n g t h e e c o n o m i c a n d social f u n c t i o n s o f t h e e x t r a - e c o n o m i c
t o w a r d s a p o s t n a t i o n a l r e l a t i v i z a t i o n of scale; a n d
• a t e n d e n t i a l shift f r o m t h e p r i m a c y of state i n t e r v e n t i o n to c o m p e n -
s a t e for m a r k e t f a i l u r e s i n a m i x e d e c o n o m y t o a n e m p h a s i s o n
public-private partnerships and o t h e r self-organizing g o v e r n a n c e
m e c h a n i s m s t o c o m p e n s a t e for b o t h s t a t e a n d m a r k e t f a i l u r e s i n a
networked economy.

S o far t h e s e t r e n d s h a v e l a r g e l y b e e n c o n s i d e r e d s e p a r a t e l y . This m o d e
o f p r e s e n t a t i o n w a s a d o p t e d t o simplify w h a t w o u l d o t h e r w i s e h a v e
b e c o m e a very unwieldy analysis in which everything was being related
t o e v e r y t h i n g else a n d , m o r e o v e r , a t t h e s a m e t i m e . I t h a s also e n a b l e d
me to elaborate some of the m o r e novel concepts and theoretical argu-
m e n t s at the most appropriate point in the overall development of the
book rather t h a n at their first m e n t i o n in a n o t h e r context. Moreover,
presentational c o n c e r n s apart, it is worth treating t h e four trends sepa-
r a t e l y b e c a u s e e a c h o f t h e t r e n d s h a s its o w n c a u s a l d y n a m i c a n d h a s also
d e v e l o p e d i n q u i t e v a r i e d w a y s i n t h e different A t l a n t i c F o r d i s t social
formations. Only after we have considered the u n e v e n development of
t h e four t r e n d s individually could we h o p e to explore h o w they a r e com-
b i n e d , i f a t all, t o c r e a t e a n y o v e r a l l t r e n d t o w a r d s a S W P R i n a n y given
social f o r m a t i o n . T h i s i s p a r t i c u l a r l y i m p o r t a n t b e c a u s e t h e c u r r e n t
r e l a t i v i z a t i o n of s c a l e also affects t h e scalar a r t i c u l a t i o n of e c o n o m i c
 Towards Schumpeterian Workfare Postnational Regimes? 249

a n d social policy i n different w a y s a n d p o s e s m a j o r p r o b l e m s i n t h e i r

governance.
Finally, w h e t h e r t a k e n i n d i v i d u a l l y o r t o g e t h e r , t h e s e c h a n g e s a r e m o s t
c e r t a i n l y closely l i n k e d t o t h e s e a r c h for s o l u t i o n s t o t h e o b j e c t i v e crisis-
t e n d e n c i e s a n d p e r c e i v e d crises o f A t l a n t i c F o r d i s m . T h u s t h e t r a n s i t i o n
in a d v a n c e d capitalist economies - in t h e context of the overall global
division o f l a b o u r a n d t h e w o r l d m a r k e t - f r o m F o r d i s m t o p o s t - F o r d i s m
i s a n i m p o r t a n t p a r t o f t h e overaU c o n t e x t for t h e m o v e f r o m s o m e
version of t h e K W N S to s o m e version of t h e S W P R . A l t h o u g h t h e
r e a s o n s f o r t h i s shift a r e p r i m a r i l y g r o u n d e d i n r e s p o n s e s t o specific
e c o n o m i c a n d social p r o b l e m s , s u c h r e s p o n s e s a r e a l w a y s p o l i t i c a l l y
mediated. Thus national variations in the pace, direction and emerging
p a t t e r n s o f t h e S W P R a r e o f t e n r o o t e d i n t h e i r r e s p e c t i v e initial s t a r t i n g
points, differences in modes of growth a n d insertion into the global
e c o n o m y , a n d i n t h e i n s t i t u t i o n a l specificities a n d d i s t i n c t i v e b a l a n c e o f
forces. T h i s m e a n s t h a t , e v e n i f c e r t a i n g e n e r a l t e n d e n c i e s c a n b e i d e n t i -
f i e d a n d g r o u n d e d i n t h e logic o f c o n t e m p o r a r y c a p i t a l i s m , this d o e s n o t
justify a s i m p l e , 'one-size-fits-all' a c c o u n t of t h e r e s t r u c t u r i n g of t h e c a p -
italist t y p e o f s t a t e . I n s t e a d , p r o p e r c o m p a r a t i v e a n a l y s e s a r e r e q u i r e d
t o c o m p r e h e n d a n d e x p l a i n v a r i a t i o n s a s well a s s i m i l a r i t i e s a c r o s s t h e
advanced capitalist economies. Such studies have not b e e n u n d e r t a k e n
t n t h e c o n t e x t o f this p a r t i c u l a r w o r k b e c a u s e i t h a s b e e n c o n c e r n e d
t o identify t h e m o r e a b s t r a c t t e n d e n c i e s a s s o c i a t e d w i t h t h e e c o l o g i c a l
d o m i n a n c e of the capital relation in an increasingly integrated world
m a r k e t . T h e a p p r o a c h to e c o n o m i c d e t e r m i n a t i o n a d o p t e d in this w o r k
e x c l u d e s a b s o l u t e l y a n y c l a i m t h a t t h e logic o f c a p i t a l a c c u m u l a t i o n
s o m e h o w d e t e r m i n e s e v e r y a s p e c t o f social f o r m a t i o n s . I n s t e a d , e c o l o g i -
cal d o m i n a n c e m e a n s t h a t t h e c o u r s e o f c a p i t a l a c c u m u l a t i o n c r e a t e s
m o r e p r o b l e m s for o t h e r i n s t i t u t i o n a l o r d e r s a n d t h e lifeworld t h a n t h e y
c a n c a u s e for it. H o w t h e s e i n s t i t u t i o n a l o r d e r s a n d t h e l i f e w o r l d a d a p t
t o t h e s e p r o b l e m s c a n n o t b e d e t e r m i n e d a t this level o f analysis. T h i s
r e q u i r e s a m o r e d e t a i l e d analysis b o t h o f t h e d i s t i n c t i v e p a t h - d e p e n d e n t
a n d strategically selective c h a r a c t e r of these institutional orders a n d of
t h e c h a n g i n g b a l a n c e o f f o r c e s o r g a n i z e d a r o u n d different r e s p o n s e s t o
t h e logic o f c a p i t a l a c c u m u l a t i o n .
T h e broad empirical trends presented in the preceding chapters have
a wide r a n g e of causes, a n d each t r e n d should be seen as 'the c o m p l e x
s y n t h e s i s o f m u l t i p l e d e t e r m i n a t i o n s ' ( M a r x 1973: 100). I t w o u l d cer-
tainly b e w r o n g t o t r e a t a n y t r e n d a s a s i n g u l a r c a u s a l m e c h a n i s m a n d
neglect their essentially descriptive, synthetic and generalized nature.^
This i s w h y I h a v e d i s c u s s e d s o m e o f t h e m o r e a b s t r a c t t e n d e n c i e s a n d
counter-tendencies that have combined to p r o d u c e these trends. F o r the
same reason I considered possible empirical countertrends that might
250 Towards Schumpeterian Workfare Postnational Regimes?

qualify o r limit t h e full r e a l i z a t i o n o f t h e s e t r e n d s - c o u n t e r t r e n d s t h e m -

selves p r o d u c e d t h r o u g h specific a b s t r a c t t e n d e n c i e s a n d c o u n t e r t e n -
d e n c i e s . T h e e x p r e s s i o n o f t h e s e t r e n d s also v a r i e s m a r k e d l y a c r o s s t i m e
a n d s p a c e . Lastly, I h a v e s u g g e s t e d h o w t h e f o u r shifts i n v o l v e d i n t h e
K W N S - S W P R t r a n s i t i o n a r e l i n k e d m a i n l y - b u t n o t exclusively - t o t h e
search f o r r e s p o n s e s t o t h e crisis o f A t l a n t i c F o r d i s m . D i s t i n g u i s h i n g
c a u s e a n d effect in this c o m p l e x set of i n t e r r e l a t i o n s is clearly difficult
because so m a n y features of the once taken-for-granted economic,
political, social a n d c u l t u r a l l a n d s c a p e a r e c h a n g i n g a t t h e s a m e t i m e .
T h i s i s w h y i t i s i m p o r t a n t a t this level o f a b s t r a c t i o n t o c o n s i d e r t h e m
i n t e r m s o f t h e s t r u c t u r a l c o u p l i n g o f e c o n o m i c a n d political t r a n s f o r -
m a t i o n s without attempting to judge the relative causal weight of eco-
n o m i c a n d p o l i t i c a l factors i n i s o l a t i o n . T h i s i s w h e r e t h e c o n c e p t o f
ecological d o m i n a n c e i s especially useful h e u r i s t i c a l l y a n d analytically.
F o r i t highlights t h e i n t e r a c t i o n b e t w e e n t h e e c o n o m i c a n d t h e p o l i t i c a l
u n d e r t h e d o m i n a n c e o f t h e logic o f c a p i t a l a c c u m u l a t i o n , w h i c h d e p e n d s
o n a close l i n k b e t w e e n t h e e c o n o m i c a n d t h e e x t r a - e c o n o m i c .

2. The Ideal-Topical SWPR

T h e ideal-typical S W P R can be described, at the risk of some repetition,

as follows (see also t a b l e 7.1). First, r e g a r d i n g its d i s t i n c t i v e r o l e in s e c u r -
ing t h e c o n d i t i o n s for t h e i m p r o b a b l e c o n t i n u a t i o n o f p r o f i t a b l e p r i v a t e
business from the viewpoint of particular capitals and capital in general,
t h e S W P R i s S c h u m p e t e r i a n i n s o f a r a s i t tries t o p r o m o t e p e r m a n e n t
innovation and flexibility in relatively o p e n economies by intervening on
t h e s u p p l y - s i d e a n d t o s t r e n g t h e n a s far a s p o s s i b l e t h e s t r u c t u r a l a n d / o r
s y s t e m i c c o m p e t i t i v e n e s s o f t h e r e l e v a n t e c o n o m i c spaces. T h e p r i m a r y
o r g a n i z i n g c o n c e p t for t h e d e v e l o p m e n t o f a c c u m u l a t i o n s t r a t e g i e s , s t a t e
p r o j e c t s a n d h e g e m o n i c visions i n this c o n t e x t i s t h e k n o w l e d g e - b a s e d
e c o n o m y . This b r o a d concept has t h e a d v a n t a g e in this regard that it is
relatively o p e n - e n d e d b u t n o n e t h e l e s s r e s o n a t e s w i t h a wide r a n g e of
highly visible a n d i n t e r c o n n e c t e d c h a n g e s i n c o n t e m p o r a r y c a p i t a l i s t for-
m a t i o n s . A s such, i t c a n s e r v e a s t h e n o d a l p o i n t i n a w i d e r a n g e o f e c o -
n o m i c , p o h t i c a l , social a n d c u l t u r a l d i s c o u r s e s a n d h a s i m p l i c a t i o n s for
t h e r e s t r u c t u r i n g o f e n t i r e social f o r m a t i o n s (on t h e n a r r a t i v e c o n s t r u c -
t i o n o f crisis a n d t h e d i s c u r s i v e r e o r i e n t a t i o n o f a c c u m u l a t i o n s t r a t e g i e s ,
s t a t e p r o j e c t s a n d h e g e m o n i c visions, see c h a p t e r 2). C o m p l e m e n t i n g
t h e s e n e w s t r a t e g i c c o n c e r n s i n e c o n o m i c policy h a s b e e n t h e r e j e c t i o n ,
d e m o t i o n o r r e a r t i c u l a t i o n o f o t h e r , e a r l i e r policy objectives.
S e c o n d , r e g a r d i n g its d i s t i n c t i v e f u n c t i o n s i n s e c u r i n g t h e c o n d i t i o n s
for t h e p r o b l e m a t i c r e p r o d u c t i o n o f l a b o u r - p o w e r a s a f i c t i t i o u s c o m -
 Towards Schumpeterian Workfare Postnational Regimes? 251

m o d i t y , t h e S W P R c a n b e d e s c r i b e d ( n o d o u b t infelicitously a n d a t t h e
rislc of m i s u n d e r s t a n d i n g ) as a worlcfare r e g i m e i n s o f a r as it s u b o r d i n a t e s
social policy t o t h e d e m a n d s o f e c o n o m i c policy. I n c l u d e d u n d e r t h i s
l a t t e r r u b r i c a r e t h e p r o m o t i o n o f l a b o u r m a r k e t flexibility a n d e m p l o y -
ability, t h e d e v e l o p m e n t o f t h e n e w g l o b a h z i n g , k n o w l e d g e - b a s e d
e c o n o m y a n d the cultivation of structural a n d / o r systemic competitive-
ness. I t i s w o r t h r e p e a t i n g h e r e t h a t t h e s c o p e o f e c o n o m i c policy h a s
b e e n massively w i d e n e d and d e e p e n e d because of the increased impor-
t a n c e for c a p i t a l a c c u m u l a t i o n o f w h a t w a s p r e v i o u s l y r e g a r d e d a s b e i n g
' e x t r a - e c o n o m i c ' . T h u s , whilst t h e K W N S t r i e d t o e x t e n d t h e social r i g h t s
o f its c i t i z e n s , t h e S W P R i s m o r e c o n c e r n e d t o p r o v i d e w e l f a r e s e r v i c e s
t h a t benefit business a n d t h e r e b y d e m o t e s individual needs to second
place. T h i s w o r k f a r i s t s u b o r d i n a t i o n o f social t o e c o n o m i c policy i s m o s t
likely w h e r e t h e s e p o l i c i e s c o n c e r n t h e p r e s e n t a n d f u t u r e w o r k i n g
p o p u l a t i o n . T h i s i s w h y l a b o u r m a r k e t policy, e d u c a t i o n a n d t r a i n i n g h a v e
s u c h a k e y r o l e i n t h e w o r k f a r e strategy. C o n c e r n w i t h t r a i n i n g a n d
l a b o u r m a r k e t f u n c t i o n i n g h a s l o n g b e e n a f e a t u r e o f state i n v o l v e m e n t
i n t h e social r e p r o d u c t i o n o f l a b o u r - p o w e r , o f c o u r s e , b u t t h e S W P R
gives g r e a t e r w e i g h t t o f l e x i b i l i t y a n d gives i t n e w m e a n i n g ( A i n l e y
1997), a n d also redefines t h e n a t u r e o f t h e skills a n d c o m p e t e n c i e s t h a t
e d u c a t i o n a n d t r a i n i n g a r e i n t e n d e d t o deliver. I t i s for t h e s e r e a s o n s t h a t
t h e s t a t e also a t t e m p t s t o ( r e - ) m a k e t h e s u b j e c t s w h o a r e e x p e c t e d t o
serve as p a r t n e r s in the innovative, knowledge-driven, entrepreneurial,
f l e x i b l e e c o n o m y a n d its a c c o m p a n y i n g self-reliant, a u t o n o m o u s ,
e m p o w e r e d w o r k f a r e r e g i m e (for a r e c e n t i l l u s t r a t i o n , see B l a i r a n d
S c h r o d e r 1999).
W o r k f a r e i s also a s s o c i a t e d w i t h d o w n w a r d p r e s s u r e o n p u b l i c s p e n d -
ing t h a t is reflected in absolute or relative reductions in p u b l i c spending
a n d , failing t h a t , i n v i g o r o u s m e a s u r e s o f c o s t c o n t a i n m e n t . T h i s i s m o s t
likely w h e r e social s p e n d i n g c o n c e r n s t h o s e w h o a r e n o t ( p o t e n t i a l l y )
a c t i v e m e m b e r s o f t h e l a b o u r f o r c e a n d / o r h a v e a l r e a d y left it. T h i s i s
particularly evident in the recent t r e a t m e n t of pensions (the largest
single item in welfare budgets) a n d involves an increasingly systematic
assault o n p e n s i o n r i g h t s i n b o t h t h e p u b l i c a n d t h e p r i v a t e s e c t o r s . I t
c a n also b e d i s c e r n e d i n t h e h e a l t h service. C u t s i n social e x p e n d i t u r e
a r e e s p e c i a l l y likely w h e r e t h e social w a g e is s e e n as a cost of p r o d u c -
t i o n , a s b e i n g r e l a t e d m o r e t o p o p u l i s t d e m a n d s a n d social e n g i n e e r i n g
than to economic performance, as an unproductive deduction from rev-
enues that could be better spent by individual economic agents in the
m a r k e t a n d as a s o u r c e of r i g i d i t i e s in t h e p r o d u c t i v e s e c t o r . It is less
likely t o o c c u r w h e r e less e m p h a s i s i s g i v e n t o t h e a b s o l u t e o r r e l a t i v e
cost o f f a c t o r s o f p r o d u c t i o n a n d m o r e t o t h e i r r e l a t i v e c o n t r i b u t i o n t o
e c o n o m i c o u t p u t ; less t o t h e e c o n o m i c a n d m o r e t o t h e e x t r a - e c o n o m i c
 252 Towards Schumpeterian W o r k f a r e Postnational Regimes?

Table 7.1 The Schumpeterian workfare postnational regime

Distinctive set Distinctive set Primary scale Primary means

of economic of social (if any) to compensate
policies policies market failure

Focuses on Subordinates Relativization of Increased role of

innovation and social policy to scale at expense self-organizing
competitiveness an expanded of national scale. governance to
in open notion of Competition to correct both
economies, witli economic policy; establish a new for market and
increasing stress downward primary scale state failures.
on supply-side to pressure on the but continued But state gains
to promote KBE 'social wage' role of national greater role in
and attack on state(s). the exercise of
welfare rights metagovernance.

Schumpeterian Workfare Postnational Regime

d i m e n s i o n s of c o m p e t i t i v e n e s s ; less ,to t h e i m m e d i a t e t a x costs of social

s p e n d i n g a n d m o r e t o its l o n g - t e r m c o n t r i b u t i o n t o p r o d u c t i o n ; a n d less
t o t h e i m m e d i a t e l y u n p r o d u c t i v e n a t u r e o f social e x p e n d i t u r e a n d m o r e
t o its r o l e i n c o m p e n s a t i n g w o r k e r s ( a n d o t h e r a d v e r s e l y affected social
f o r c e s ) for t h e r i s k s a n d d i s r u p t i o n s i n v o l v e d i n i n t e r n a t i o n a l t r a d e .
N o n e t h e l e s s , b o t h a c c o u n t s o f social s p e n d i n g r e g a r d i t i n e c o n o m i c
t e r m s a n d b o t h s e e k t o p u t d o w n w a r d p r e s s u r e o n social s p e n d i n g a s well
as to reorient in line with their respective accounts of competitiveness.
T h i r d , c o m p a r e d w i t h t h e e a r l i e r p r i m a c y o f t h e n a t i o n a l scale i n e c o -
n o m i c m a n a g e m e n t a n d t h e p r o v i s i o n o f s o c i a l policy, t h e S W P R i s p o s t -
n a t i o n a l . T h i s t r e n d i s o c c a s i o n e d b y t h e i n c r e a s e d significance o f o t h e r
spatial scales and h o r i z o n s of action, w h i c h m a k e t h e national e c o n o m y
less s u s c e p t i b l e t o effective m a c r o e c o n o m i c m a n a g e m e n t a n d t h e
n a t i o n a l t e r r i t o r y less i m p o r t a n t a s a p o w e r container.^ T h i s d o e s n o t
m e a n t h e e n d o f t h e n a t i o n a l e c o n o m i c policy c o n c e r n e d w i t h p r o m o t -
ing i n t e r n a t i o n a l c o m p e t i t i v e n e s s , n o r t h e e n d o f t h e n a t i o n a l s t a t e . I t
d o e s signify t h e r e l a t i v i z a t i o n of scale in e c o n o m i c a n d social policy c o m -
p a r e d to the Atlantic Fordist period. This is associated with t h e transfer
o f e c o n o m i c a n d social p o l i c y - m a k i n g f u n c t i o n s u p w a r d s , d o w n w a r d s
a n d s i d e w a y s . O n a g l o b a l level, this c a n b e s e e n i n t h e g r o w i n g c o n c e r n
of a growing n u m b e r of international agencies (such as t h e I M F , World
B a n k , O E C D , and I L O ) and intergovernmental forums (such as the G 8 )
with the shaping of current social as well as e c o n o m i c policy agendas.
I n p a r t , t h e E U acts a s a r e l a y for t h e s e a g e n d a - s h a p i n g efforts a n d , i n
 Towards Schumpeterian Workfare Postnational Regimes? 253

p a r t , i t lias itself p l a y e d a n a c t i v e r o l e i n d e v e l o p i n g i t s o w n a g e n d a for

c o u n t r i e s o u t s i d e its b o r d e r s . T h i s i s m o s t clear i n t h e c a s e o f t h e p o s t -
socialist e c o n o m i e s , e s p e c i a l l y t h o s e i n t h e f r o n t r a n k s o f n e w c a n d i d a t e
m e m b e r states; b u t i t c a n also b e s e e n i n its i n t e r e s t i n social a s well a s
e c o n o m i c policy m a s s o c i a t e m e m b e r s t a t e s a n d N o r t h A f r i c a (cf.
D e a c o n 1 9 9 5 , 1 9 9 6 , 2 0 0 1 ; d e S w a a n 1992; L e i b f r i e d 1993; W i l d i n g 1997).
T h e E U l e v e l i s also i m p o s i n g m o r e n u m e r o u s a n d t i g h t e r r e s t r i c t i o n s
o n n a t i o n a l e c o n o m i c a n d social g o v e r n a n c e , especially t h r o u g h t h e
n o r m s of t h e Single E u r o p e a n M a r k e t ( S E M ) , the M a a s t r i c h t criteria
for e c o n o m i c c o n v e r g e n c e , a n d t h e r e q u i r e m e n t s o f t h e E M U . T h i s i s
reflected i n t h e t e n d e n t i a l E u r o p e a n i z a t i o n o f l a b o u r m a r k e t policies, i n
the transformation of national corporatist and bargaining arrangements
a n d i n t h e d e v e l o p m e n t o f social p a c t s . W h a t i s e m e r g i n g i n this c o n t e x t
is a series of m u l t i l e v e l g o v e r n m e n t a n d / o r g o v e r n a n c e r e g i m e s o r i e n t e d
to issues of t h e i n t e r s c a l a r r e a r t i c u l a t i o n of t h e e c o n o m i c a n d p o l i t i c a l -
with t h e E U just o n e a m o n g m a n y such emerging regimes (Poulantzas
1978; J e s s o p 2 0 0 0 ) . A t t h e s a m e t i m e , t h e r e a r e t e n d e n c i e s t o d e v o l v e
s o m e e c o n o m i c a n d social p o l i c y - m a k i n g t o t h e r e g i o n a l , u r b a n a n d l o c a l
levels o n t h e g r o u n d s t h a t p o l i c i e s i n t e n d e d t o i n f l u e n c e t h e m i c r o -
e c o n o m i c s u p p l y - s i d e a n d social r e g e n e r a t i o n a r e b e s t d e s i g n e d close t o
t h e i r s i t e s o f i m p l e m e n t a t i o n . I n s o m e c a s e s t h i s also i n v o l v e s c r o s s -
b o r d e r c o o p e r a t i o n a m o n g r e g i o n a l , u r b a n o r local s p a c e s . I n all t h r e e
regards regulation regimes have thus become more postnational.
Yet, p a r a d o x i c a l l y , this c a n l e a d t o a n e n h a n c e d r o l e for n a t i o n a l s t a t e s
in c o n t r o l l i n g t h e i n t e r s c a l a r t r a n s f e r of t h e s e p o w e r s - s u g g e s t i n g a
shift f r o m s o v e r e i g n t y to a primus inter pares role in i n t e r g o v e r n m e n t a l
relations.
T h e p o s t n a t i o n a l m o m e n t o f e c o n o m i c a n d social policy r e s t r u c t u r i n g
is complex b e c a u s e of t h e prohferation of scales and the relativization
o f scale w i t h w h i c h i t i s a s s o c i a t e d . T h e r e a r e c l e a r d i f f e r e n c e s a m o n g
the triads here. N A F T A is primarily a continental trading system based
o n A m e r i c a ' s d o m i n a n c e a s a q u a s i - c o n t i n e n t a l e c o n o m y (itself c o m -
p r i s i n g m a n y d i f f e r e n t r e g i o n a l e c o n o m i e s w i t h different l e v e l s o f
e c o n o m i c p e r f o r m a n c e ) , with C a n a d a a n d M e x i c o b e i n g i n c r e a s i n g l y
o b l i g e d t o i n t e r n a l i z e U S p r o d u c t i o n a n d c o n s u m p t i o n n o r m s a s well a s
t o f i n d t h e i r p l a c e a s b e s t t h e y c a n w i t h i n a n e m e r g i n g c o n t i n e n t a l divi-
sion o f l a b o u r . T h e E a s t A s i a n t r i a d h a s d e v e l o p e d a n i n c r e a s i n g l y i m p o r -
tant regional division of labour organized primarily u n d e r J a p a n e s e
regional hegemony, but it has no coherent institutional m e c h a n i s m s to
e n s u r e effective c o o r d i n a t i o n a n d i s w e a k e n e d b y J a p a n ' s c o n t i n u i n g
inability t o b r e a k o u t o f its p o h t i c a l i m p a s s e a s well a s b y t h e r e s i d u a l
b i t t e r n e s s felt b y significant social f o r c e s i n c o u n t r i e s o c c u p i e d b y J a p a n
i n t h e 1930s a n d 1940s. T h e E U p r o v i d e s t h e o n l y e x a m p l e a m o n g t h e
254 Towards Schumpeterian Workfare Postnational Regimes?

tliree triad regions of a clear c o m m i t m e n t to economic, political and

social i n t e g r a t i o n a n d , m o r e a m b i v a l e n t l y , t o t h e d e v e l o p m e n t o f s u p r a -
n a t i o n a l s t a t e s t r u c t u r e s . N o n e t h e l e s s all t h r e e r e g i o n s / t r i a d s a r e l i n k e d
t o i n t e r n a t i o n a l i z a t i o n o f policy r e g i m e s n o t o n l y i n e c o n o m i c b u t also
i n j u r i d i c a l , p o l i t i c a l a n d social f i e l d s . T h i s e x c l u d e s a n y e a s y g e n e r a l i z a -
t i o n f r o m t h e E U c a s e t o t h e o t h e r t w o t r i a d s - o r vice versa; this i n itself
is a sign t h a t o n e s h o u l d n o t p u s h g l o b a l i z a t i o n t o o f a r as a g e n e r a l
explanatory framework of recent changes.
Finally, r e g a r d i n g t h e m o d e o f d e l i v e r y o f e c o n o m i c a n d social poli-
cies, t h e S W P R h a s b e c o m e m o r e r e g i m e - l i k e r e l a t i v e t o t h e s t a t i s m o f
the K W N S . This is reflected in the increased i m p o r t a n c e of non-state
m e c h a n i s m s i n c o m p e n s a t i n g for m a r k e t failures a n d i n a d e q u a c i e s i n
t h e d e l i v e r y o f s t a t e - s p o n s o r e d e c o n o m i c aird social p o l i c i e s . T h i s p r o -
vides a s e c o n d i m p o r t a n t a s p e c t t o t h e a p p a r e n t ( b u t d e c e p t i v e )
'hollowing out' of national states, namely, the increased i m p o r t a n c e of
p r i v a t e - p u b l i c n e t w o r k s to s t a t e activities on all levels - f r o m local p a r t -
n e r s h i p s t o s u p r a n a t i o n a l n e o - c o r p o r a t i s t a r r a n g e m e n t s (e.g., C l a r k e a n d
G a i l e 1998; F a l k n e r 1998). T h e o f t e n r e m a r k e d shift f r o m g o v e r n m e n t
t o w a r d s g o v e r n a n c e (from imperative coordination to n e t w o r k i n g and
other forms of self-organization) means that traditional forms of inter-
v e n t i o n n o w p l a y a lesser r o l e i n e c o n o m i c a n d social policy. T h i s d o e s
n o t m e a n t h a t l a w a n d m o n e y h a v e d i s a p p e a r e d , o f c o u r s e ; i n s t e a d , active
e c o n o m i c a n d social s t e e r i n g n o w t e n d t o r u n m o r e t h r o u g h soft r e g u l a -
t i o n a n d reflexive law, a d d i t i o n a l i t y a n d p r i v a t e - p u b l i c p a r t n e r s h i p s ,
o r g a n i z a t i o n a l i n t e l l i g e n c e a n d i n f o r m a t i o n - s h a r i n g , e t c . A k e y r o l e is
also p l a y e d b y m e t a g o v e r n a n c e , t h a t is, t h e o r g a n i z a t i o n o f t h e i n s t i t u -
t i o n a l f r a m e w o r k a n d r u l e s for i n d i v i d u a l m o d e s o f g o v e r n a n c e a n d t h e
r e b a l a n c i n g o f different m o d e s o f g o v e r n a n c e (see D u n s i r e 1996; J e s s o p
1 9 9 8 , 2 0 0 2 b ) . This c a n b e s e e n a t t h e E u r o p e a n level, w h e r e E U i n s t i t u -
t i o n s typically o p e r a t e less i n t h e m a n n e r o f a n u p s c a l e d , s u p r a n a t i o n a l
sovereign state a p p a r a t u s than as a nodal point in an extensive w e b of
m e t a g o v e r n a n c e o p e r a t i o n s . T h u s t h e y h a v e a c e n t r a l role i n o r c h e s t r a t -
i n g e c o n o m i c a n d social p o l i c y i n a n d a c r o s s m a n y d i f f e r e n t scales o f
a c t i o n i n v o l v i n g a w i d e r a n g e of official, quasi-official, p r i v a t e e c o n o m i c
a n d civil i n t e r e s t s ( E k e n g r e e n 1997; S b r a g i a 2000; T o m m e l 1994, 1998;
Willke 1992,1997).

3. On tfie Use of Ideal Types

L i k e all i d e a l - t y p e s , t h e K W N S a n d S W P R h a v e b e e n f o r m e d t h r o u g h
t h e o n e - s i d e d a c c e n t u a t i o n o f e m p i r i c a l l y o b s e r v a b l e f e a t u r e s ( i n this
c a s e , t h o s e o f A t l a n t i c F o r d i s t social f o r m a t i o n s ) t o c o n s t r u c t a logicafly
 Towards Schumpeterian Workfare Postnational Regimes? 255

p o s s i b l e social p h e n o m e n o n . T h i s d o e s n o t m e a n t h a t t h e y d e r i v e f r o m
a n a i v e , t h e o r e t i c a l l y i n n o c e n t o b s e r v a t i o n of s u r f a c e a p p e a r a n c e s - on
t h e c o n t r a r y , t h e y d e r i v e f r o m a reflexive, t h e o r e t i c a f l y i n f o r m e d r e c o n -
struction of basic t r e n d s and c o u n t e r t r e n d s a n d an a t t e m p t to g r o u n d
t h e m in underlying causal mechanisms.^ They accentuate certain distinc-
tive f e a t u r e s of a p h e n o m e n o n in o r d e r to identify w h a t l e n d s it s t r u c -
tural coherence (including, perhaps, a p a t t e r n e d incoherence that comes
f r o m h i s t o r i c a l l y specific s t r u c t u r a l c o n t r a d i c t i o n s , s t r a t e g i c d i l e m m a s
a n d d i s c u r s i v e p a r a d o x e s ) a n d t o h i g h l i g h t distinctive d e v e l o p m e n t a l
t e n d e n c i e s . I n this s e n s e t h e y a r e i n t e n d e d t o s e r v e a s t h e o r e t i c a f l y
informed reference points in empirical analyses rather than as substitutes
for s u c h a n a l y s e s a n d t o e n a b l e c o n n e c t i o n s t o b e m a d e b e t w e e n s u c h
a n a l y s e s a n d a c r i t i c a l realist a n a l y s i s of t h e e v o l v i n g p o l i t i c a l e c o n o m y
of capitalism. Such one-sided ideal types are never completely realized.
T h u s n e i t h e r t h e i d e a l - t y p i c a l K W N S n o r its v a r i o u s s u b t y p e s w e r e f o u n d
in p u r e form in Atlantic Fordism. Likewise, constructing an ideal-type
S W P R does not p r e s u p p o s e actually existing examples of the S W P R in
p u r e f o r m , n o r d o e s i t i m p l y t h a t a n y m o v e m e n t a l o n g its d i f f e r e n t
dimensions occurs evenly and at the s a m e pace. Indeed there is major
v a r i a t i o n i n t h e s e a r c h for s o l u t i o n s t o t h e p r o b l e m s o f A t l a n t i c F o r d i s m
and t h e K W N S . It involves neither a unidirectional m o v e m e n t nor a
m u l t i l a t e r a l c o n v e r g e n c e across all n a t i o n a l r e g i m e s . W h a t d o exist a r e
p a t h - d e p e n d e n t m i x e s o f types ( a l l o y e d w i t h i n c i d e n t a l a n d a c c i d e n t a l
f e a t u r e s ) w h i c h m u s t b e c o n s i d e r e d i n all t h e i r c o m p l e x i t y r a t h e r t h a n
one-sidedly. A h h o u g h t h e distinctive features of the S W P R e m e r g e m o s t
clearly i n t h i s r a t h e r E u r o c e n t r i c c o n t r a s t with t h e K W N S , t h e r e a r e
i m p o r t a n t E a s t A s i a n e x a m p l e s o f its h a v i n g d e v e l o p e d i n t h e a b s e n c e
o f a n y m o r e o r less c r i s i s - p r o n e K W N S . I n d e e d , t h e s e l a t t e r e x a m p l e s
o n c e s e r v e d - b e f o r e t h e so-called A s i a n Crisis - as m o d e l s to s o l v e crisis-
tendencies in the West.
F o u r c o m m e n t s o n t h e i d e a l - t y p i c a l S W P R a r e a p p r o p r i a t e h e r e . First,
t h e c h o i c e o f this t e r m for t h e e m e r g e n t s t a t e f o r m w a s i n t e n d e d t o m a k e
the contrast with the K W N S as stark as possible. T h u s the ideal-typical
S W P R m a r k s a c l e a r b r e a k w i t h t h e K W N S i n s o f a r a s (1) d o m e s t i c fufl
e m p l o y m e n t is d e p r i o r i t i z e d in f a v o u r of i n t e r n a t i o n a l c o m p e t i t i v e n e s s ;
(2) redistributive welfare rights t a k e second place to a productivist
r e o r d e r i n g of social policy; (3) t h e p r i m a c y of t h e n a t i o n a l s t a t e is d e p r i v -
i l e g e d i n f a v o u r o f p a r t i c u l a r s t a t e a c t i v i t i e s o n o t h e r scales; a n d (4) gov-
e r n a n c e in a negotiated, n e t w o r k e d society is given m o r e emphasis than
g o v e r n m e n t in a mixed economy. In practice, of course, the opposition
will b e less m a r k e d . Y e t this c o n t r a s t c a n b e justified o n b o t h c r i t i c a l a n d
heuristic grounds because of a continuing penchant among m a n y com-
m e n t a t o r s to suggest that international Keynesianism could restore the
256 Towards Schumpeterian Workfare Postnational Regimes?

conditions for global expansion a n d / o r t h a t the welfare state is an irre-

v e r s i b l e h i s t o r i c a l a c h i e v e m e n t " a n d h a s n o t b e e n m u c h affected b y glob-
a l i z a t i o n . M y a i m i n d e v e l o p i n g this a l t e r n a t i v e c o n c e p t i s t o s h o w t h a t ,
whilst t h e capitalist t y p e o f s t a t e i s n e c e s s a r i l y i n v o l v e d i n s e c u r i n g t h e
c o n d i t i o n s for e c o n o m i c a n d social r e p r o d u c t i o n , this n e e d n o t t a k e a
K W N S f o r m . I n d e e d , t h e c u r r e n t r e s t r u c t u r i n g for capital w o u l d actually
seem to require a break with the K W N S . That some states m a y prove
u n a b l e t o effect t h e n e c e s s a r y c h a n g e s w o u l d o n l y u n d e r m i n e t h i s c l a i m
if t h e y c o u l d still c o m p e t e successfully in t h e n e w global e c o n o m y whilst
retaining their earlier form.
S e c o n d , t h e t w o ideal t y p e s p r e s e n t t h e distinctive f e a t u r e s o f t h e
K W N S a n d S W P R r e s p e c t i v e l y a s o p p o s e d t o all t h e i r h i s t o r i c a l l y given,
currently dominant or possible future features. For example, designating
t h e p o s t w a r s t a t e f o r m a s ' K e y n e s i a n ' a n d t h e r e b y e m p h a s i z i n g its
d e m a n d - s i d e r o l e does n o t m e a n t h a t t h e K W N S h a d n o s u p p l y - s i d e poli-
cies. A s s h o w n i n c h a p t e r 2 , i t a l s o p r o m o t e d a u n i f o r m n a t i o n a l infra-
s t r u c t u r e as a basis for g e n e r a l i z i n g F o r d i s t n o r m s of p r o d u c t i o n a n d
c o n s u m p t i o n a n d t o d i m i n i s h u n e v e n n a t i o n a l d e v e l o p m e n t . I t also c o n -
tributed to the supply of technological innovation through increased
s u p p o r t for science, a m a s s i v e e x p a n s i o n o f h i g h e r e d u c a t i o n a l o n g
F o r d i s t lines a n d , s o m e t i m e s , m i l i t a r y s u p p o r t for R & D . B u t t h e r e a r e
significant d i f f e r e n c e s i n t h e r e l a t i o n b e t w e e n d e m a n d - a n d s u p p l y - s i d e
p o l i c i e s i n t h e K W N S a n d S W P R . W h e r e a s K W N S s u p p l y - s i d e policies
w e r e s h a p e d b y t h e F o r d i s t p a r a d i g m w i t h its e m p h a s i s o n e c o n o m i e s o f
scale, big s c i e n c e a n d p r o d u c t i v i t y g r o w t h , S W P R s u p p l y - s i d e policies a r e
oriented to p e r m a n e n t innovation, to economies of scope, agglomeration
and networks, to p r o m o t i n g the knowledge-based e c o n o m y and to struc-
t u r a l a n d s y s t e m i c c o m p e t i t i v e n e s s . T h i s p u t s a far g r e a t e r p r e m i u m o n
t h e explicit, s t r a t e g i c a l l y self-conscious m a n a g e m e n t o f t h e i n n o v a t i o n
s y s t e m s a n d c o m p e t i t i o n policy, o n b r o a d i n t e r p r e t a t i o n s o f t h e f a c t o r s
b e a r i n g o n successful i n n o v a t i o n a n d c o m p e t i t i v e n e s s i n o p e n e c o n o m i e s
a n d o n t h e c a p a c i t y for i n s t i t u t i o n a l l e a r n i n g t h a n w o u l d h a v e b e e n
typical of the Fordist K W N S . Conversely, whereas K W N S macro-
e c o n o m i c p o l i c i e s w e r e c o n c e r n e d t o c r e a t e t h e c o n d i t i o n s for full e m -
p l o y m e n t t o suit t h e d e m a n d s o f d o m e s t i c p r o d u c t i v e c a p i t a l , S W P R
m a c r o e c o n o m i c p o l i c i e s a r e c o n c e r n e d w i t h inflation ( i n c l u d i n g a s s e t
inflation) a n d w i t h p r u d e n t b u d g e t s t o satisfy t h e d e m a n d s o f m o b i l e
m o n e y c a p i t a l . L i k e w i s e , t u r n i n g t o social policy, whilst c o n c e r n w i t h
t r a i n i n g a n d l a b o u r m a r k e t f u n c t i o n i n g has long b e e n a f e a t u r e o f s t a t e
i n v o l v e m e n t i n t h e social r e p r o d u c t i o n o f l a b o u r - p o w e r , t h e t r a n s i t i o n
f r o m F o r d i s m , w i t h its e x p e c t a t i o n of a j o b for life (if n o t t h e s a m e j o b
for life), t o p o s t - F o r d i s m , w i t h its e m p h a s i s o n e c o n o m i c i n s e c u r i t y a n d
c o n s t a n t c h a n g e , l e a d s t o a d i f f e r e n t f o r m o f t r a i n i n g a n d e d u c a t i o n . This
 Towards Schumpeterian Workfare Postnational Regimes? 257

analysis c o u l d b e c o n t i n u e d , b u t e n o u g h h a s b e e n w r i t t e n , I h o p e , t o b r i n g
o u t t h e i m p o r t a n c e o f t h e d i s c o n t i n u i t i e s i n a p p a r e n t l y s i m i l a r activities
as well as t h e significance of n e w activities. M o r e generally, of c o u r s e , t h e
S W P R will also e x p r e s s o t h e r c o n c e r n s a n d p e r f o r m m a n y o t h e r f u n c -
tions t y p i c a l of capitalist s t a t e s , b u t it is t h e f o u r f e a t u r e s n o t e d a b o v e ,
t o g e t h e r w i t h t h e i r i m p l i c a t i o n s for t h e d y n a m i c o f c a p i t a l i s m a n d t h e
overall functioning of states, that differentiate it from o t h e r capitalist
r e g i m e s . T o g e t h e r t h e y b e c o m e a n i n t e g r a l p a r t o f its a c c u m u l a t i o n s t r a t -
egy a n d t h e y a r e also r e f l e c t e d i n t h e s t a t e a n d h e g e m o n i c p r o j e c t s w i t h
which this a c c u m u l a t i o n strategy is associated.
T h i r d , f o u r clarifications a r e n e e d e d t o a v o i d m i s u n d e r s t a n d i n g t h e
purport of the S W P R ideal type:

1 In referring to S c h u m p e t e r i a n i s m in the characterization of the

state's n e w r o l e i n e c o n o m i c r e p r o d u c t i o n , I d o n o t wish t o s u g g e s t
t h a t S c h u m p e t e r h i m s e l f a d v o c a t e d t h e S W P R i n all its c o m p l e x i t y
a n d variety. N o r , of c o u r s e , d i d K e y n e s p r o v i d e a b l u e p r i n t for all s u b -
s e q u e n t i n s t i t u t i o n a l a n d policy d e v e l o p m e n t s a s s o c i a t e d i n w h a t e v e r
country with the K W N S . Neither Keynes nor Schumpeter can be seen
as the legitimate founding fathers of regimes with which they have
s i n c e b e e n identified. N o n e t h e l e s s , i n r e f e r r i n g t o t h e s e e c o n o m i s t s I
have identified e m b l e m a t i c thinkers whose ideas have come to be
a s s o c i a t e d (rightly o r w r o n g l y ) with t h e s t a t e ' s r o l e i n p r o m o t i n g
c a p i t a l a c c u m u l a t i o n i n specific p e r i o d s a n d / o r e c o n o m i c r e g i m e s . '
K e y n e s w a s o f t e n c i t e d t o justify t h e i n c r e a s i n g c o n c e r n w i t h t h e
s t a t e ' s p o s s i b l e r o l e i n s e c u r i n g full e m p l o y m e n t ; S c h u m p e t e r h a s
b e e n rediscovered as a theorist of innovation as t h e m o t o r force of
long waves of e c o n o m i c expansion. T h e r e were analogues to Keynes
in o t h e r economies, of course, such as Wicksell in Sweden, b u t K e y n e s
h a s b e c o m e t h e e m b l e m a t i c f i g u r e for m a c r o e c o n o m i c m a n a g e m e n t
o r i e n t e d t o t h e d e m a n d side. L i k e w i s e , o t h e r e c o n o m i s t s h a v e e x a m -
ined the dynamics of competition, innovation, entrepreneurship and
l o n g w a v e s o f e c o n o m i c g r o w t h , b u t n o n e h a s d o n e s o a s vividly
and comprehensively as Schumpeter. In addition, Keynes and
K e y n e s i a n i s m , w i t h t h e i r e m p h a s i s o n e c o n o m i c policy, p r o v i d e d a
c o n t e x t w i t h i n w h i c h t h e w e l f a r e state could d e v e l o p : for, a s w e h a v e
s u b s e q u e n t l y o b s e r v e d , w i t h o u t full e m p l o y m e n t , a u n i v e r s a l i s t
welfare state would be hard to maintain. T h e role of a 'Keynesian
e p i s t e m i c c o m m u n i t y ' ( I k e n b e r r y 1993) i n e s t a b l i s h i n g t h e f o u n d a -
t i o n s for t h e i n t e r n a t i o n a l p o s t w a r s e t t l e m e n t a s s o c i a t e d w i t h
Atlantic Fordism is especially i m p o r t a n t even if there were different
r o u t e s f o l l o w e d a t d i f f e r e n t s p e e d s t o K e y n e s i a n full e m p l o y m e n t
policies ( o n w h i c h , see t h e c o n t r i b u t i o n s i n H a l l 1989).
258 Towards Schumpeterian Workfare Postnational Regimes?

2 T h e c o n t r a s t b e t w e e n t h e t w o e c o n o m i s t s i s far m o r e specific t h a n
would be implied in any simple contrast b e t w e e n concern with the
d e m a n d - a n d s u p p l y - s i d e . F o r S c h u m p e t e r ' s i n t e r e s t i n t h e l a t t e r dif-
f e r e d m a r k e d l y f r o m that o f e c o n o m i s t s such a s H a y e k , F r i e d m a n o r
Laffer. T h u s H a y e k w a s c o n c e r n e d with t h e e c o n o m i c a n d c o n s t i t u -
t i o n a l c o n d i t i o n s for liberty, M i l t o n F r i e d m a n w i t h t h e m o n e y supply,
a n d L a f f e r ( w h o n o w r e m e m b e r s t h e l a u g h a b l e b u t politically con-
venient Laffer?) with the supply-side impact of varying rates of taxa-
tion. It is the supply of i n n o v a t i o n that was central to Schumpeter's
a n a l y s i s o f capitalist g r o w t h d y n a m i c s r a t h e r t h a n t h e s u p p l y - s i d e
implications of liberty, m o n e y or taxation. A n d it is innovation-driven
s t r u c t u r a l c o m p e t i t i v e n e s s t h a t i s b e c o m i n g c e n t r a l t o t h e successful
p e r f o r m a n c e of the economic functions of the c o n t e m p o r a r y capital-
ist s t a t e .
3 In a d o p t i n g ' w o r k f a r e ' to identify t h e social policy d i m e n s i o n of t h e
S W P R , I am n o t claiming t h a t a p r e c o n d i t i o n of welfare s u p p o r t for
t h e a b l e - b o d i e d i s t o work, r e t r a i n o r p r o v e a wiUingness t o d o so.
I n s t e a d I w a n t to highlight a m a j o r r e o r i e n t a t i o n of social policy:
away from redistributive concerns b a s e d on expanding welfare rights
in a national state towards m o r e productivist and cost-saving
concerns in an open economy. T h e m o r e usual meaning of 'work-
f a r e ' is m e r e l y a special, n e o l i b e r a l e x a m p l e of t h e m o r e g e n e r a l
t r e n d i n t h e r e o r g a n i z a t i o n o f t h e s t a t e ' s r o l e i n p r o m o t i n g social
reproduction.
4 In a d o p t i n g ' r e g i m e ' to c h a r a c t e r i z e t h e m o d e of g o v e r n a n c e , I am
n o t c l a i m i n g that t h e s t a t e has w i t h e r e d away. I n s t e a d , I a m s e e k i n g
t o h i g h l i g h t t h e i n c r e a s e d i m p o r t a n c e o f v a r i o u s f o r m s o f self-
o r g a n i z a t i o n t o c o m p e n s a t e for m a r k e t failure. T h i s i s actually
reflected i n a d u a l shift f r o m g o v e r n m e n t t o g o v e r n a n c e a n d f r o m
government to metagovernance that accompanies the other changes
i n t h e capitalist t y p e o f s t a t e t h a t I h a v e n o t e d .

Finally, i n s u g g e s t i n g t h a t t h e r e i s a t e n d e n t i a l m o v e m e n t f r o m o n e t o
the other, I am n o t suggesting that a radical r u p t u r e has occurred that
has transformed everything. There are always variable p a t h - d e p e n d e n t
' c o n s e r v a t i o n - d i s s o l u t i o n ' effects ( P o u l a n t z a s 1975). C h a n g e can
t r a n s f o r m a n d r e f u n c t i o n a l i z e e a r l i e r social r e l a t i o n s , i n s t i t u t i o n s o r
d i s c o u r s e s , c o n s e r v i n g t h e m i n t h e n e w p a t t e r n ; or, a l t e r n a t i v e l y , can
d i s s o l v e t h e m i n t o e l e m e n t s t h a t a r e selectively a r t i c u l a t e d into t h e n e w
r e l a t i o n s , i n s t i t u t i o n s o r d i s c o u r s e s a n d t h a t t h e r e b y lose t h e i r e a r l i e r
integrity. S u c h effects a r e g r o u n d e d i n t h e p o l y v a l e n c e o f all social p h e -
n o m e n a , which means they can be articulated into different institutional
o r d e r s a n d / o r d i s c o u r s e s a n d will v a r y i n significance w i t h this a r t i c u l a -
 Towards Schumpeterian Workfare Postnational Regimes? 259

tion. F a i l u r e t o n o t e t h e s e effects c a n easily l e a d t o t h e m i s r e a d i n g o f t h e

r e l a t i v e c o n t i n u i t y o r d i s c o n t i n u i t y a c r o s s different p e r i o d s .

4. Alternative SWPR Strategies

B e c a u s e m y analysis h a s o p e r a t e d m a i n l y i n t e r m s o f a g l o b a l c o n t r a s t
between the K W N S and the S W P R , it could be argued that it subsumes
too m u c h u n d e r too dualistic a set of concepts. This is not my intention.
I h a v e a l r e a d y discussed v a r i a n t f o r m s o f t h e K W N S a n d will n o w i n t r o -
d u c e variant forms of the S W P R . T h e various e c o n o m i c and political ten-
dencies noted above can be (and often are) integrated and expressed in
quite different discourses and are associated with contrasting strategic
d i r e c t i o n s a s d i f f e r e n t f o r c e s s e e k t o m a k e s e n s e o f t h e conflicting t e n -
dencies and countertendencies at work in the new global economy. T h e r e
i s e x t e n s i v e i m p r o v i z a t i o n a n d trial a n d e r r o r i n v o l v e d i n t h e c u r r e n t
c h a n g e s a n d n o clearly d o m i n a n t p a t t e r n h a s y e t e m e r g e d . F o r h e u r i s t i c
purposes, however, we can posit four ideal-typical forms: neoliberal, n e o -
c o r p o r a t i s t , n e o s t a t i s t a n d n e o c o m m u n i t a r i a n (see b o x 7.1). I n u s i n g t h e
prefix ' n e o ' t o identify t h e m , I w a n t t o e m p h a s i z e t h a t t h e f i r s t t h r e e
would e m b o d y i m p o r t a n t discontinuities with t h e liberal, corporatist a n d
statist K W N S r e g i m e s l i n k e d t o F o r d i s m a n d t h a t n e o c o m m u n i t a r i a n i s m
also h a s significant d i s c o n t i n u i t i e s c o m p a r e d t o p r e v i o u s efforts t o in-
s t i t u t i o n a l i z e c o m m u n i t a r i a n i s m i n capitalist social f o r m a t i o n s . T h e p a r -
ticular s t r a t e g y m i x e s t o b e f o u n d i n i n d i v i d u a l cases will d e p e n d
o n i n s t i t u t i o n a l legacies, t h e b a l a n c e o f p o l i t i c a l f o r c e s a n d t h e c h a n g i n g
e c o n o m i c a n d political c o n j u n c t u r e s i n w h i c h different s t r a t e g i e s a r e
pursued.

Neoliberalism
This c o u l d well b e d e s c r i b e d a s t h e h e g e m o n i c s t r a t e g y for e c o n o m i c
g l o b a l i z a t i o n b e c a u s e o f its s u p p o r t b y l e a d i n g i n t e r n a t i o n a l e c o n o m i c
b o d i e s ( s u c h a s t h e O E C D , I M F a n d W o r l d B a n k ) , its p r i m a c y i n t h e
U n i t e d S t a t e s ( t h e c u r r e n t l y u n d i s p u t e d capitalist h e g e m o n ) a n d i n o t h e r
anglophone countries (notably England, Australia, N e w Z e a l a n d and
C a n a d a ) , a n d its f o r m e r l y p a r a d i g m a t i c s t a t u s for r e s t r u c t u r i n g t h e p o s t -
socialist e c o n o m i e s a n d i n t e g r a t i n g t h e m i n t o t h e g l o b a l e c o n o m y . I t i s
a l s o e v i d e n t , b u t n o t h e g e m o n i c , i n t h e n e o l i b e r a l policy a d j u s t m e n t s
(even in the absence of a m o r e radical neoliberal regime change) in most
o t h e r a d v a n c e d capitalist e c o n o m i e s . E v e n w h e r e t h i s s t r a t e g y i s n o t
w h o l e h e a r t e d l y e m b r a c e d by the d o m i n a n t economic and political forces
i n o t h e r e c o n o m i c a n d p o l i t i c a l s p a c e s , t h e effects o f t h e n e o l i b e r a l g l o b a l
260 Towards Schumpeterian Workfare Postnational Regimes?

project continue to operate through their contribution to the increasing

ecological d o m i n a n c e o f c a p i t a l a c c u m u l a t i o n a n d t o t h e e c o n o m i c
d o m i n a t i o n o f t h o s e f r a c t i o n s o f c a p i t a l t h a t b e n e f i t f r o m this p r o j e c t .
Neoliberalism is c o n c e r n e d to p r o m o t e a market-led transition
t o w a r d s t h e n e w e c o n o m i c a n d social r e g i m e . F o r t h e p u b l i c s e c t o r , i t
involves p r i v a t i z a t i o n , l i b e r a l i z a t i o n a n d t h e i m p o s i t i o n o f c o m m e r c i a l
criteria i n t h e r e s i d u a l state s e c t o r ; for t h e p r i v a t e s e c t o r , i t i n v o l v e s
d e r e g u l a t i o n a n d a n e w legal a n d p o l i t i c a l f r a m e w o r k t o p r o v i d e p a s s i v e
s u p p o r t for m a r k e t s o l u t i o n s . T h i s i s r e f l e c t e d i n g o v e r n m e n t p r o m o t i o n
of 'hire-and-fire', flexi-time and flexi-wage labour markets; growth of tax
e x p e n d i t u r e s s t e e r e d b y p r i v a t e i n i t i a t i v e s b a s e d o n f i s c a l s u b s i d i e s for
f a v o u r e d e c o n o m i c activities; m e a s u r e s t o t r a n s f o r m t h e w e l f a r e s t a t e
i n t o a m e a n s o f s u p p o r t i n g a n d s u b s i d i z i n g l o w w a g e s a s well a s t o
e n h a n c e t h e disciplinary f o r c e o f social s e c u r i t y m e a s u r e s a n d p r o -
g r a m m e s ; a n d t h e m o r e g e n e r a l r e o r i e n t a t i o n o f e c o n o m i c a n d social
p o l i c y t o t h e p e r c e i v e d n e e d s o f t h e p r i v a t e sector. C o u p l e d w i t h such
m e a s u r e s is d i s a v o w a l of social p a r t n e r s h i p in f a v o u r of m a n a g e r i a l p r e -
r o g a t i v e s , m a r k e t f o r c e s a n d a s t r o n g s t a t e . N e o l i b e r a l i s m also i n v o l v e s
a cosmopolitan approach that welcomes internationalization of d o m e s -
tic economic space in the form of both outward and inward investment
a n d also calls for t h e l i b e r a l i z a t i o n t)f i n t e r n a t i o n a l t r a d e a n d i n v e s t m e n t
w i t h i n r e g i o n a l b l o c s a n d m o r e generally. I n n o v a t i o n i s e x p e c t e d t o
follow s p o n t a n e o u s l y f r o m t h e l i b e r a t i o n o f t h e a n i m a l spirits o f i n d i -
vidual entrepreneurs as they take advantage of incentives in the new
market-led climate and from the m o r e general government p r o m o t i o n
of an enterprise culture. In turn, national competitiveness is u n d e r s t o o d
a s t h e a g g r e g a t e effect o f t h e m i c r o e c o n o m i c c o m p e t i t i v e n e s s o f i n d i -
v i d u a l f i r m s . H e n c e t h e r e i s little s t a t e c o n c e r n t o m a i n t a i n a sufficiently
d e e p a n d c o h e r e n t set o f c o r e e c o n o m i c c o m p e t e n c i e s i n t h e h o m e
economy and/or a d e q u a t e national or regional innovation systems to
p r o v i d e t h e basis for s t r u c t u r a l c o m p e t i t i v e n e s s . I n t h i s c o n t e x t l o c a l a n d
international state apparatuses a r e e x p e c t e d to act as relays for the
market-led approach to innovation and workfare. Whilst neoliberalism
i s s o m e t i m e s said t o i n v o l v e a r e t u r n t o t h e free m a r k e t a n d t h e l i b e r a l
s t a t e , n e i t h e r i s r e a l l y feasible i n c u r r e n t c o n d i t i o n s . I n s t e a d , i t typically
i n v o l v e s t h e s u b o r d i n a t i o n o f small a n d m e d i u m e n t e r p r i s e s t o n e w
f o r m s of m o n o p o l i s t i c c o m p e t i t i o n on a g l o b a l scale. L i k e w i s e , e v e n if
n a t i o n a l a n d local s t a t e s a d o p t a laissez-faire r o l e in t h e h o p e of g e n e r -
a t i n g a n e n t r e p r e n e u r i a l c u l t u r e , t h e y m u s t still p r o v e s t r o n g e n o u g h
b o t h t o d i s m a n t l e a n d r e p l a c e t h e o l d m o d e o f social r e g u l a t i o n a n d t o
r e s i s t s u b s e q u e n t p o l i t i c a l p r e s s u r e s f o r afl m a n n e r o f a d h o c i n t e r v e n -
t i o n s for s h o r t - t e r m e c o n o m i c o r p o l i t i c a l a d v a n t a g e . T h e s e a r e n o t e a s y
tasks.
 Towards Schumpeterian Workfare Postnational Regimes? 261

Neocorporctism

This s t r a t e g y relies on institutionalization of a continuing, negotiated,

concerted approach to the e c o n o m i c strategies, decisions and conduct of
e c o n o m i c a g e n t s . B a s e d o n a self-reflexive u n d e r s t a n d i n g o f t h e l i n k a g e s
b e t w e e n t h e i r o w n p r i v a t e e c o n o m i c i n t e r e s t s a n d t h e i m p o r t a n c e o f col-
lective a g r e e m e n t s to t h e stability of a socially e m b e d d e d , socially r e g u -
l a t e d e c o n o m y , t h e e c o n o m i c f o r c e s i n v o l v e d i n n e o c o r p o r a t i s m strive t o
b a l a n c e c o m p e t i t i o n a n d c o o p e r a t i o n . This s y s t e m differs f r o m F o r d i s t
corporatism based on the dominance of mass production and mass
u n i o n s a n d o n t h e p r i m a c y o f full e m p l o y m e n t a n d stagflation a s e c o -
n o m i c c o n c e r n s . T h u s t h e s c o p e o f n e o c o r p o r a t i s t a r r a n g e m e n t s reflects
t h e d i v e r s i t y o f policy c o m m u n i t i e s a n d n e t w o r k s r e l e v a n t t o a n
i n n o v a t i o n - d r i v e n m o d e o f g r o w t h a s well a s t h e i n c r e a s i n g h e t e r o g e n e -
ity of labour forces and labour m a r k e t s . Neocorporatist arrangements in
a n e m e r g i n g S W P R a r e also m o r e d i r e c t l y a n d explicitly o r i e n t e d t o t h e
crucial i m p o r t a n c e o f i n n o v a t i o n , t h e e x p a n s i o n o f t h e k n o w l e d g e - b a s e d
economy, structural competitiveness, a n d activation r a t h e r t h a n passive
support in relation to labour markets. Neocorporatism extends beyond
b u s i n e s s a s s o c i a t i o n s a n d t r a d e u n i o n s t o i n c l u d e policy c o m m u n i t i e s
r e p r e s e n t i n g distinct f u n c t i o n a l s y s t e m s (e.g., s c i e n c e , h e a l t h , e d u c a t i o n ,
l a w ) ; a n d p o l i c y i m p l e m e n t a t i o n will b e c o m e m o r e f l e x i b l e t h r o u g h t h e
extension of 'regulated self-regulation' a n d private interest g o v e r n m e n t
s o t h a t t h e r e i s less d i r e c t s t a t e i n v o l v e m e n t i n m a n a g i n g t h e ' s u p p l y -
s i d e ' a n d m o r e e m p h a s i s o n p r i v a t e i n d u s t r i a l policies. I n h e r i t e d c o r p o -
r a t i s t a r r a n g e m e n t s m a y also b e c o m e m o r e s e l e c t i v e (e.g., e x c l u d i n g
s o m e previously e n t r e n c h e d industrial interests and peripheral or mar-
ginal w o r k e r s , i n t e g r a t i n g s o m e ' s u n r i s e ' s e c t o r s a n d giving m o r e w e i g h t
to core workers); and, reflecting the greater flexibility and decentraliza-
tion of key features of the post-Fordist economy, the centres of n e o -
corporatist gravity will m o v e t o w a r d s the micro-level of firms and
localities a t t h e e x p e n s e o f c e n t r a l i z e d m a c r o e c o n o m i c c o n c e r t a t i o n . T h i s
is certainly not inconsistent with ' b o t t o m - u p ' neocorporatist linkages
c o n n e c t i n g f i r m s a n d / o r localities i n different n a t i o n a l e c o n o m i c s p a c e s
a n d b y p a s s i n g c e n t r a l g o v e r n m e n t . W h e t h e r a t local, n a t i o n a l o r s u p r a -
n a t i o n a l level, t h e s t a t e i s j u s t a s i n v o l v e d i n s u c h n e o c o r p o r a t i s t s t r a t e -
gies a s i t i s i n t h e n e o l i b e r a l a n d n e o s t a t i s t a p p r o a c h e s . Its r e s o u r c e s a n d
a c t i o n s a r e u s e d t o b a c k o r s u p p o r t t h e decisions r e a c h e d t h r o u g h cor-
poratist negotiation, however, rather than to p r o m o t e either neoliberal
disengagement or a u t o n o m o u s , proactive, neostatist initiatives. A n d this
i n t u r n m e a n s t h a t c o m p l i a n c e w i t h s t a t e policies i s e i t h e r v o l u n t a r y o r
d e p e n d s on actions t a k e n by self-regulating corporatist organizations
e n d o w e d with public status.
262 Towards Schumpeterian Workfare Postnational Regimes?

Box 7.1 Strategies to promote or adjust to global neoliberalism

Neoliberalism
1. Liberalization - p r o m o t e free c i n p c t i l i o n
2. D e r e g u l a t i o n - r e d u c e r o l e of law and state
3. Privatization - sejl off public - e c i o r
4. Market p r o x i e s in re.sidual public sector ;
• 5. Internationalization - free i n w a n i and i .u'.waul llow-
6. L o w e r direct taxes - increase cotisunicr choice

i • Neocorpo ratism ;;;: . j

1. R e b a l a n c e c o m p e t i t i o n and coopcratinn !
Decenir.di/.cd •rvsiiil.iied:seM rc;;iilaiion"
3. Wiilcn ramie i>l p i i \ a l c ; : p u b l c and other Maki.lii)lder>"
4. b x p a i i d n<k 1.1 pn i l i c p r i v a t e pai tnershiiis
5. 1'ioti.ct c n i c LCiinuMMc-sectors m o p e n e c o n o m v
6. 1 [iL'.h :.i\atiiin to l i n a i i c e s o d - i l i i n c s l m c n t

; Neosralism
i 1, I r o m s'.aic c o n t i o f to regulated ci.iT}ietilioii
: 2, ( l i n d e national strategy-xalhcr than plan t o p - d o w n
• 3, Auditirg p c r l o r m a n c c of private .ind public sectors
I 4.^ •l'nlihe-;iri\.iie parlnerslnps iinilei stLite L'uidaiice
J S;ii: tNeo-nii. ."caiililisi [ M o i e e t i o i i o t core e c o n o i i A
•6. I \paiiding l o l e loi new v o l l c c l i \ e resoiiices

Neocommunitarianism i
|™ - ])^•|llvr.lll/atll^ll liitiii tree i . o r i p c l i l i o r
2,; « Lmpoweriiieiit - e n h a n c e role ol tlind sector
3. S o c i a l i / . i l i o i i expand Ihc social e c o n o m v
4. I'mph.i-iMiii social Use value and social c o h e s i o n
5. I air trade n o l T r e e tradti; think tilol-ial, i.ct Local
6. Kedirt-U .axes - citizens' w a g e , carers' a l l o w a n c e s

Neostatism
This involves a market-conforming but state-sponsored a p p r o a c h to eco-
nomic reorganization in which t h e state intervenes to guide t h e devel-
o p m e n t o f m a r k e t forces. I t d o e s s o t h r o u g h d e p l o y i n g its o w n p o w e r s
o f i m p e r a t i v e c o o r d i n a t i o n , its o w n e c o n o m i c r e s o u r c e s a n d activities,
a n d its o w n k n o w l e d g e b a s e s a n d o r g a n i z a t i o n a l i n t e l l i g e n c e . I n d e p l o y -
ing these various resources in support of an urban, regional, intermestic.
 Towards Schumpeterian Workfare Postnational Regimes? 263

n a t i o n a l o r s u p r a n a t i o n a l a c c u m u l a t i o n strategy, h o w e v e r , t h e s t a t e i s still
well a w a r e o f t h e c h a n g i n g n a t u r e a n d d i s c o u r s e s o f i n t e r n a t i o n a l c o m -
p e t i t i o n a n d , i n d e e d , i s actively i n v o l v e d i n p r o m o t i n g t h e s e d i s c o u r s e s
a n d c o r r e s p o n d i n g e c o n o m i c a n d social policies. I n t h i s c o n t e x t n e o -
s t a t i s m i n v o l v e s a m i x t u r e of d e c o m m o d i f i c a t i o n , s t a t e - s p o n s o r e d flexi-
bility a n d o t h e r s t a t e activities a i m e d a t s e c u r i n g t h e d y n a m i c efficiency
of a s t r u c t u r a l l y c o h e r e n t a n d i n s t i t u t i o n a l l y t h i c k p r o d u c t i v e c o r e of
e c o n o m i c activities. T h i s i s r e f l e c t e d i n a n a c t i v e s t r u c t u r a l p o l i c y i n
w h i c h t h e s t a t e sets s t r a t e g i c t a r g e t s r e l a t i n g t o n e w t e c h n o l o g i e s ,
technology transfer, i n n o v a t i o n systems, infrastructure a n d o t h e r
f a c t o r s affecting t h e o v e r a l l s t r u c t u r a l c o m p e t i t i v e n e s s o f t h e e m e r g i n g
knowledge-based economy; and in an active territorial strategy in which
efforts a r e m a d e t o p r o m o t e t h e u n t r a d e d i n t e r d e p e n d e n c i e s t h a t u n d e r -
p i n a successful l e a r n i n g r e g i o n , i n n o v a t i o n m i l e u , i n d u s t r i a l c l u s t e r ,
e n t r e p r e n e u r i a l city, a n d s o f o r t h . I t f a v o u r s a n a c t i v e l a b o u r m a r k e t
policy t o reskill t h e l a b o u r f o r c e a n d t o e n c o u r a g e a f l e x i - s k i l l r a t h e r t h a n
f l e x i - p r i c e l a b o u r m a r k e t ; i t i n t e r v e n e s d i r e c t l y a n d o p e n l y w i t h its o w n
political a n d e c o n o m i c r e s o u r c e s t o r e s t r u c t u r e d e c l i n i n g i n d u s t r i e s a n d
to p r o m o t e s u n r i s e s e c t o r s ; a n d it e n g a g e s in a r a n g e of societal g u i d a n c e
s t r a t e g i e s b a s e d o n its o w n s t r a t e g i c i n t e l l i g e n c e a n d e c o n o m i c r e s o u r c e s
t o p r o m o t e specific o b j e c t i v e s t h r o u g h c o n c e r t e d a c t i o n w i t h v a r i e d
policy c o m m u n i t i e s t h a t e m b r a c e p u b l i c , m i x e d a n d p r i v a t e i n t e r e s t s .
T h e s e activities aim to m o v e t h e domestic e c o n o m y (or o t h e r relevant
economic space) up the technological hierarchy by creating and main-
taining a coherent and competitive productive base and pursuing a strat-
egy of flexible s p e c i a l i z a t i o n in specific h i g h - t e c h n o l o g y s e c t o r s . W h i l s t
t h e c e n t r a l s t a t e r e t a i n s a k e y s t r a t e g i c r o l e in t h e s e a r e a s , it also allows
a n d e n c o u r a g e s p a r a l l e l a n d c o m p l e m e n t a r y activities a t r e g i o n a l a n d / o r
local levels. In t h e t e r m s i n t r o d u c e d in c h a p t e r 6, n e o s t a t i s m i n v o l v e s a
s t r o n g state r o l e i n d e c e n t r e d c o n t e x t s t e e r i n g . N o n e t h e l e s s t h e s t a t e ' s
desire to protect the core technological and economic competencies of
its productive b a s e a n d its innovation system m a y be associated with
n e o m e r c a n t i l i s m a t t h e s u p r a n a t i o n a l level.

Neocommunitarianism
T h i s v a r i a n t p r o m o t e s t h e social e c o n o m y ' ' a s a c h a l l e n g e t o t h e logic o f
capital accumulation in t h e economy, its extension to o t h e r spheres of
s o c i a l life a n d t h e s t r u g g l e t o e s t a b l i s h b o u r g e o i s h e g e m o n y o v e r s o c i e t y
a s a w h o l e . A g a i n s t t h i s logic, e s p e c i a l l y its m o s t a b s t r a c t a s p e c t s r o o t e d
i n t h e d o m i n a n c e o f e x c h a n g e - v a l u e , t h e social e c o n o m y p r i o r i t i z e s social
use-value. It seeks to r e - e m b e d the organization of the e c o n o m y in
specific s p a t i o - t e m p o r a l c o n t e x t s o r i e n t e d t o t h e r h y t h m s o f social
264 Towards Schumpeterian Workfare Postnational Regimes?

r e p r o d u c t i o n r a t h e r t h a n t h e frenzied circulation of digitalized finance

c a p i t a l . N e o c o m m u n i t a r i a n i s m also o p p o s e s t h e e x t e n s i o n o f capitalist
logic t o o t h e r s p h e r e s o f life s u c h t h a t e d u c a t i o n , h e a l t h services, h o u s i n g ,
politics, c u l t u r e , s p o r t , a n d s o o n a r e d i r e c t l y c o m m o d i f i e d or, a t least,
s u b j e c t t o q u a s i - m a r k e t f o r c e s . I n d e e d , e x t e n d i n g t h e social e c o n o m y
p r o v i d e s a basis for r e s i s t i n g c a p i t a l ' s i n c r e a s i n g h e g e m o n y o v e r s o c i e t y
as a w h o l e . F o r it d e m o n s t r a t e s t h e possibility of o r g a n i z i n g e c o n o m i c
a n d social life i n t e r m s t h a t c h a l l e n g e capitalist ' c o m m o n s e n s e ' .

Combining the strategies

T h e s e f o u r s t r a t e g i e s h a v e also b e e n f o r m u l a t e d a s i d e a l - t y p e s b a s e d o n
t h e o r e t i c a l l y i n f o r m e d e m p i r i c a l o b s e r v a t i o n and, a s such, a r e n o w h e r e
to be found in p u r e form. Indeed, elements of these different strategies
for effecting t h e t r a n s i t i o n t o a g l o b a l i z i n g , k n o w l e d g e - b a s e d e c o n o m y
a r e t y p i c a l l y c o m b i n e d in specific cases. T h i s c a n be s e e n at all levels of
p o l i t i c a l i n t e r v e n t i o n . F o r e x a m p l e , while t h e l e a d i n g i n t e r n a t i o n a l a n d
s u p r a n a t i o n a l o r g a n i z a t i o n s i n t h e r e d e s i g n o f t h e global e c o n o m y a r e
g e n e r a l l y c o m m i t t e d t o t h e n e o l i b e r a l strategy, t h e r e a r e still s o m e dif-
f e r e n c e s b e t w e e n t h e m a s well a s s o m e f l u c t u a t i o n i n t h e r e l a t i v e w e i g h t
a t t a c h e d t o d i f f e r e n t e l e m e n t s o f t h e f o u r strategies. F o r e x a m p l e .
D e a c o n , w h o h a s b e e n especially i n t e r e s t e d i n t h e g l o b a l i z a t i o n o f social
policy, h a s n o t e d t h a t :

there continue to be interesting shifts in the position of particular players

within this debate. The IMF has taken the social dimension of globaliza-
tion more seriously, considering whether some degree of equity is benefi-
cial to economic growth. The Bank has articulated more clearly its risk
management approach to social protection in the context of globalization.
The OECD now warns that globalization may lead to the need for more,
not less social expenditure. The ILO has begun to show signs of making
concessions to the Bank's views on social security. More recently, the role
of the World Trade Organization and its views on the desirability of fos-
tering a global market in health and social services provision is assuming
a prominence it did not have in the past. (2001: 60-1)

L i k e w i s e , i n t h e E U , t h e single m a r k e t s t r a t e g y i s p r e m i s e d o n a
neoliberal approach to competitiveness - creating an EU-wide m a r k e t
through liberalization, deregulation and internationalization - and the
E M U i s i n t e n d e d t o e n t r e n c h a n e o l i b e r a l e c o n o m i c a n d social policy
f r a m e w o r k t h a t w o u l d l e a v e m e m b e r states l i m i t e d r o o m for m a n o -
e u v r e . W i t h i n t h i s n e o l i b e r a l f r a m e w o r k t h e r e i s also a n e o s t a t i s t strat-
egy i n a n d t h r o u g h w h i c h t h e E U c o o r d i n a t e s n e t w o r k s l i n k i n g different
levels o f g o v e r n m e n t i n different s t a t e s a s well a s s e m i - p u b l i c a n d p r i v a t e
 Towards Schumpeterian Workfare Postnational Regimes? 265

agencies ranging from educational institutions, research institutes, enter-

prises a n d b a n k s i n o r d e r t o p r o m o t e n e w t e c h n o l o g i e s , t e c h n o l o g y t r a n s -
fer, etc., a n d t o c r e a t e a E u r o p e a n i n n o v a t i o n s p a c e . T h i s i s t h e m o s t
o b v i o u s l y S c h u m p e t e r i a n m o m e n t o f E U e c o n o m i c strategy. A l s o w i t h i n
the neoliberal framework there is an emergent neocorporatist strategy
o r i e n t e d t o a Social C h a r t e r w h i c h will p r e v e n t 'social d u m p i n g ' a n d
t h e r e b y u n d e r p i n a t t e m p t s t o reskill a n d r e t r a i n w o r k e r s i n t h e i n t e r e s t s
o f m o r e f l e x i b l e , r e s p o n s i b l e w o r k ( F a l k n e r 1998; G r a h l a n d T e a g u e 1 9 9 1 ;
P e r r i n 1988). T h i s i s a n i m p o r t a n t f l a n k i n g m e a s u r e for t h e n e o l i b e r a l
market-building strategy and, although not yet strongly institutionalized,
m a y p r o v i d e a basis for r e s i s t i n g f u r t h e r m o v e s d o w n t h e n e o l i b e r a l r o a d .
A n d , f i n a l l y , w e f i n d t h a t t h e E U i s actively e n g a g e d i n p r o m o t i n g t h e
social e c o n o m y i n s m a l l e r a r e a s t o c o m b a t social e x c l u s i o n .
This sort of c o m b i n a t i o n of a p p r o a c h e s need n o t indicate eclecticism
or incoherence. Indeed, the EC even argued (not without a hint of
special p l e a d i n g a n d p o l i t i c a l f u d g i n g ) s o m e t e n y e a r s a g o t h a t t h e
n e o l i b e r a l e l e m e n t s o f its s t r a t e g y c o u l d b e v i e w e d a s t h e c a t a l y s t s o f
s t r u c t u r a l c o m p e t i t i v e n e s s a n d t h e n e o s t a t i s t e l e m e n t s a s its a c c e l e r a t o r s .
I t also s u g g e s t e d t h a t s o m e a s p e c t s o f t h e n e o c o r p o r a t i s t p r o j e c t
could be seen as prerequisites of structural adjustment and enhanced
c o m p e t i t i v e n e s s i n s o f a r a s t h e y p r o m o t e e c o n o m i c a n d social c o h e s i o n
( E u r o p e a n C o m m u n i t i e s 1991: 2 3 ) . ' T h i s a c c o u n t n e e d n o t b e t a k e n a t
face v a l u e . I t c o u l d b e s e e n u n c h a r i t a b l y , for e x a m p l e , a s n o m o r e t h a n
a sign o f c o n f u s i o n a n d m u d d l i n g t h r o u g h . M o r e p l a u s i b l y i t c o u l d b e
interpreted as an expression of the compromises that are inevitable in
arriving at any accumulation strategy or state project. But there could
also b e a d e e p e r s t r u c t u r a l c o h e r e n c e t o this s t r a t e g y w h e n e x a m i n e d
from the viewpoint of attempts to construct a new spatio-temporal fix
a r o u n d t h e p r i m a c y o f E u r o p e a n e c o n o m i c s p a c e . I n this c o n t e x t t h e
S E M is a neoliberal mechanism intended to institutionalize E u r o p e a n
economic space and to e n t r e n c h the m o n e y concept of capital as the
p r i m a r y axis a r o u n d w h i c h f u t u r e a c c u m u l a t i o n s t r a t e g i e s c o u l d b e
defined a n d p u r s u e d . T h i s also s e r v e s t o i n t e g r a t e t h e E u r o p e a n t r i a d
into the emerging neoliberal world m a r k e t that is being actively pro-
moted by the U S A and the international organizations in which it is
h e g e m o n i c . I n this s e n s e t h e n e o l i b e r a l p r o j e c t i s o n e t h a t s e r v e s t o l i n k
the global economy, E u r o p e a n economic space a n d the increasingly
t a n g l e d w e b o f e c o n o m i c spaces b e l o w t h e E u r o p e a n level. S i n c e t h e
m a r k e t m e c h a n i s m i s p r o n e t o failure, h o w e v e r , n e o l i b e r a l i s m n e e d s
s u p p l e m e n t i n g a n d f l a n k i n g . T h e n e o s t a t i s t s t r a t e g y i s i m p o r t a n t for
building the structural competitiveness of the E u r o p e a n economy, espe-
cially g i v e n t h e m a n y e c o n o m i c a n d e x t r a - e c o n o m i c b a r r i e r s t o b u i l d i n g
European-wide cooperation to counteract the growing penetration of
266 Towards Schumpeterian Workfare Postnational Regimes?

tire E u r o p e a n e c o n o m y b y A m e r i c a n a n d E a s t A s i a n c a p i t a l a n d its
resulting fragmentation and Balkanization among competing strategic
alliances and national and transnational interests. Conversely, the n e o -
c o r p o r a t i s t s t r a t e g y is m o r e i m p o r t a n t in t h e field of social policy.
A l t h o u g h t h e E U lacks a n official c o m p e t e n c e i n this a r e a , i t c a n still
a t t e m p t t o p r o m o t e a social policy for E u r o p e t h r o u g h c o o p e r a t i o n w i t h
t h e social p a r t n e r s ( s e e F a l k n e r 1 9 9 8 ) . T h u s i t i s e s s e n t i a l t o e s t a b l i s h
n e w i n s t i t u t i o n a l a r r a n g e m e n t s a n d a l l o c a t e specific r o l e s a n d c o m p l e -
m e n t a r y c o m p e t e n c i e s a c r o s s different s p a t i a l scales a n d / o r t y p e s o f
actor a n d t h e r e b y e n s u r e t h a t t h e d o m i n a n t s t r a t e g i c line i s t r a n s l a t e d
i n t o effective a c t i o n .
D i f f e r e n t s t r a t e g i e s a r e also f o u n d i n s i d e e a c h E u r o p e a n n a t i o n a l
state. W h i l e t h e policies o f T h a t c h e r i s m a n d , m o r e r e c e n d y . N e w L a b o u r
clearly i n v o l v e t h e d o m i n a n c e of a n e o l i b e r a l strategy, for e x a m p l e ,
o t h e r s t r a t e g i e s h a v e n o t b e e n totally r e j e c t e d . T h u s , i n t h e c a s e o f
T h a t c h e r i s m , c e n t r a l g o v e r n m e n t p r o g r a m m e s ( a d m i t t e d l y o n a small
scale) w e r e o r i e n t e d t o t e c h n o l o g y t r a n s f e r a n d r e s e a r c h i n t o g e n e r i c
t e c h n o l o g i e s ; a n d , n o t w i t h s t a n d i n g b l a n k e t hostility t o t r i p a r t i t e c o r p o -
r a t i s m a n d n a t i o n a l - l e v e l social p a r t n e r s h i p , i t also p r o m o t e d e n t e r p r i s e
corporatism and a 'new realism' on t h e shop floor. M o r e o v e r , while
c e n t r a l g o v e r n m e n t w a s i n r e t r e a t , l o c a l e c o n o m i c d e v e l o p m e n t initia-
tives a l o n g S W P R l i n e s p r o l i f e r a t e d . U n d e r L a b o u r - l e d local a u t h o r i t i e s
t h e s e w e r e o f t e n r u n o n n e o c o r p o r a t i s t o r n e o s t a t i s t lines; c o n v e r s e l y .
C o n s e r v a t i v e - l e d local a u t h o r i t i e s w e r e m o r e i n c l i n e d t o n e o l i b e r a l i s m
or favoured private-public partnerships without organized labour. N e w
L a b o u r u n d e r B l a i r h a s e m b r a c e d m o s t o f t h e n e o l i b e r a l legacy o f
T h a t c h e r i s m a n d h a s e x t e n d e d i t i n t o n e w areas. I t h a s also t a k e n t h e
first steps on the r o a d to a routinization of neoliberalism. Thus more
emphasis has been given to securing the o p e r a t i o n of the emerging
n e o l i b e r a l r e g i m e t h r o u g h n o r m a l politics, t o d e v e l o p i n g s u p p o r t i n g poli-
cies a c r o s s a w i d e r a n g e o f policy f i e l d s a n d t o p r o v i d i n g f l a n k i n g m e c h -
a n i s m s t o c o m p e n s a t e for its n e g a t i v e e c o n o m i c , political a n d social
consequences. All of these measures are being pursued, of course, in a
c o n t e x t m a r k e d b y c o n t i n u i n g p o l i t i c a l w o r r i e s a b o u t s t a t e u n i t y a n d ter-
ritorial u m t y , p o h t i c a l legitimacy a n d r e - e l e c t i o n , a s well a s m o r e g e n e r a l
c o n c e r n s w i t h t h e f u t u r e o f social c o h e s i o n .
In short, while there are economic,political and intellectual forces that
a r e closely i d e n t i f i e d w i t h o n e o r o t h e r m o d e o f g o v e r n a n c e , t h e s e s u b -
t y p e s o f t h e S W P R a r e b e s t s e e n a s p o l e s a r o u n d w h i c h d i f f e r e n t solu-
tions h a v e d e v e l o p e d ( a n d a r e d e v e l o p i n g ) o n different scales d u r i n g
m o r e o r less e x t e n d e d p e r i o d s o f conflict a n d e x p e r i m e n t a t i o n . C u r -
rently, t h e n e o l i b e r a l f o r m o f S W P R i s h e g e m o n i c o n t h e i n t e r n a t i o n a l
level, b u t i m p o r t a n t c o u n t e r c u r r e n t s e x i s t i n specific m a c r o r e g i o n a l .
 Towards Schumpeterian Workfare Postnational Regimes? 267

national, subregional a n d cross-border regional contexts. T h e particular

m i x i n i n d i v i d u a l cases will d e p e n d o n i n s t i t u t i o n a l legacies, t h e b a l a n c e
o f p o l i t i c a l forces a n d t h e c h a n g i n g e c o n o m i c a n d political c o n j u n c t u r e s
i n w h i c h d i f f e r e n t s t r a t e g i e s a r e p u r s u e d . T h e y will also b e o v e r d e t e r -
m i n e d b y f a c t o r s b e y o n d t h o s e i n c l u d e d w i t h i n this p a r t i c u l a r a p p r o a c h
to t h e political e c o n o m y of welfare. T h e r e is certainly no reason to expect
a multilateral convergence of modes of regulation a r o u n d o n e subtype
of t h e S W P R - let a l o n e a r a p i d c o n v e r g e n c e . I n d e e d , since t h e r e is a
s t r o n g p a t h - d e p e n d e n t s t r u c t u r a l c o u p l i n g b e t w e e n different a c c u m u l a -
t i o n r e g i m e s , m o d e s o f r e g u l a t i o n a n d m o d e s o f s o c i e t a l i z a t i o n , i t i s far
m o r e p r o b a b l e t h a t t h e r e will b e c o n t i n u i n g d i v e r g e n c e r o o t e d i n t h e
c o n t i n u i n g i n s t i t u t i o n a l f i t b e t w e e n d i f f e r e n t p r o d u c t i o n r e g i m e s a n d dif-
ferent s t r a t e g i e s .

5. Post-Fordisna and the SWPR

The K W N S w a s a k e y structural support of t h e long postwar b o o m and

e n t e r e d crisis a l o n g w i t h its a s s o c i a t e d A t l a n t i c F o r d i s t a c c u m u l a t i o n
r e g i m e . I n d e e d , t h e s e crises a r e r e l a t e d a n d f e e d i n t o e a c h o t h e r . A s t h e
crisis o f t h e K W N S u n f o l d e d , a n d a s efforts t o r e s t o r e t h e c o n d i t i o n s for
p o s t w a r g r o w t h t h r o u g h e c o n o m i c a u s t e r i t y a n d social r e t r e n c h m e n t i n
a n a t t e m p t t o s q u e e z e o u t i n f l a t i o n a n d r e d u c e p u b l i c s p e n d i n g failed,
e m p h a s i s shifted t o a t t e m p t s t o r e s t r u c t u r e a n d r e o r i e n t t h e s t a t e i n t h e
light o f c h a n g e d p e r c e p t i o n s o f t h e c o n d i t i o n s for e c o n o m i c e x p a n s i o n .
I n s o f a r a s this r e s t r u c t u r i n g a n d r e o r i e n t a t i o n s u c c e e d , t h e y will t e n d t o
p r o d u c e o n e or another variant of the S W P R . This is by no m e a n s an
automatic, mechanical transition but is mediated through changes in eco-
nomic discourse, m o d e s of calculation, new economic theories a n d strate-
gic c o n c e p t s . Tliese a r e a f l - i m p o r t a n t m e d i a t i n g l i n k s b e t w e e n s t r u c t u r a l
changes in the global e c o n o m y and state transformation. For they
p r o v i d e a f r a m e w o r k for m a k i n g s e n s e o f t h e s e c h a n g e s , t h e crises t h a t
often accompany them, and the responses that might be appropriate to
t h e m . I t i s t h e a r t i c u l a t i o n o f d i s c u r s i v e - s t r a t e g i c shifts i n t o n e w a c c u -
m u l a t i o n strategies, s t a t e p r o j e c t s a n d h e g e m o n i c projects, a n d t h e i r
c a p a c i t y t o m o b i l i z e s u p p o r t a n d d e l i v e r effective s t a t e policies t h a t h e l p
to shape the restructuring and reorientation of the c o n t e m p o r a r y state
a n d p r o d u c e different regulatory regimes. T h e e v e n t u a l realization a n d
consolidation of the globahzing, knowledge-based economy and the
S W P R as a k e y e l e m e n t in its r e g u l a t i o n , if this o c c u r s , wfll t h e r e f o r e
d e p e n d o n t h e o u t c o m e o f a w i d e r a n g e o f struggles. T h e s e i n c l u d e class
s t r u g g l e s p r o p e r ; s t r u g g l e s t o e x t e n d o r resist t h e c o l o n i z a t i o n o f o t h e r
systems a n d t h e lifeworld by profit-and-loss e c o n o m i c calculation;
268 Towards Schumpeterian Workfare Postnational Regimes?

s t r u g g l e s t o limit t h e g r o w i n g e c o l o g i c a l d o m i n a n c e o f political s t r u g g l e s ;
a n d struggles to mobilize support b e h i n d counter-hegemonic projects
p r o p o s i n g a l t e r n a t i v e s t o t h e globalizing, k n o w l e d g e - b a s e d e c o n o m y a s
t h e d o m i n a n t p r i n c i p l e o f s o c i e t a l i z a t i o n (see c h a p t e r 1).
N o n e t h e l e s s , i n t h e spirit o f c o n t i n u i n g t h e t h o u g h t - e x p e r i m e n t t h a t
has motivated the preceding arguments, we could condense t h e m into
t h e single, a u d a c i o u s c l a i m t h a t a S c h u m p e t e r i a n w o r k f a r e p o s t n a t i o n a l
r e g i m e will p r o v i d e t h e b e s t p o s s i b l e - b u t still i m p e r f e c t a n d a l w a y s p r o -
v i s i o n a l - s p a t i o - t e m p o r a l fix for a globalizing, k n o w l e d g e - b a s e d , p o s t -
F o r d i s t e c o n o m y . T h i s c l a i m c a n b e justified i n t w o ways. E i t h e r t h e
S W P R is a contingently realized f o r m of the m o d e r n state shaped by t h e
e c o l o g i c a l d o m i n a n c e of a g l o b a h z i n g k n o w l e d g e - b a s e d e c o n o m y ; or it
is t h e n a t u r a l l y n e c e s s a r y f o r m of t h e c a p i t a l i s t t y p e of s t a t e in a g l o b a l -
izing k n o w l e d g e - b a s e d economy.^ I n t h e f o r m e r case, t h e s t a t e w o u l d b e
s e e n as contingently p o s t - F o r d i s t (if at all) d u e to t h e d o m i n a n c e of a
globalizing i n f o r m a t i o n a l capitalism i n e c o n o m i c a n d social r e l a t i o n s ,
with t h e result that t h e state tends to acquire t h e features of t h e S W P R
t h r o u g h its social e m b e d d e d n e s s i n this m o r e e n c o m p a s s i n g social for-
mation. T h e key m e c h a n i s m in this case w o u l d be structural coupling a n d
c o - e v o l u t i o n u n d e r t h e ecological d o m i n a n c e o f t h e c a p i t a l i s t m a r k e t
economy. Thus, if the m o d e r n state w e r e situated within an economic or
s o c i e t a l s y s t e m w i t h different f e a t u r e s , i t w o u l d a c q u i r e d i f f e r e n t s e c -
o n d a r y p r o p e r t i e s a n d p e r f o r m m a r g i n a l l y d i f f e r e n t functions. I n t h e
latter case, h o w e v e r , the state system w o u l d be inherently post-Fordist.
It would h a v e basic structural features that are congruent' with the glob-
alizing, k n o w l e d g e - b a s e d e c o n o m y t h a t I h a v e i d e n t i f i e d a b o v e a s t h e
substantive form of the emerging post-Fordist accumulation regime and
would thereby serve to sustain post-Fordism as an accumulation regime,
m o d e of regulation and m o d e of societalization. T h e key m e c h a n i s m in
this c a s e w o u l d b e t h e critical r o l e o f t h e s t a t e i n s e c u r i n g t h e e x t r a -
e c o n o m i c c o n d i t i o n s for c a p i t a l a c c u m u l a t i o n a n d h e n c e i n s h a p i n g a n d
guiding the forms that capital accumulation can take. This is t h e inter-
pretation that I have advanced in the preceding chapters.
I n t h i s c o n t e x t w e c a n distinguish a n a l y t i c a l l y b e t w e e n t w o d i f f e r e n t
f o r m s of p o s t - F o r d i s t s t a t e : a t r a n s i t i o n a l r e g i m e a n d a n o r m a l , c o n -
solidated state. A transitional r e g i m e p e r f o r m s definite functions in the
t r a n s i t i o n b u t h a s a n u n d e r d e t e r m i n e d f o r m . T h i s will d e p e n d o n t h e
institutional legacies of t h e Fordist era and the K W N S from case to case
a n d o n t h e specific f o r m s o f crisis a n d s t r u g g l e a s s o c i a t e d w i t h t h e t r a n -
sition f r o m A t l a n t i c F o r d i s m t o t h e g l o b a l i z i n g , k n o w l e d g e - b a s e d
e c o n o m y . ' " T h e shift f r o m F o r d i s m t o p o s t - F o r d i s m w o u l d c e r t a i n l y s e e m
to i n v o l v e a n y t r a n s i t i o n a l r e g i m e in a c o m p l e x a r r a y of tasks b e s i d e s
t h o s e t y p i c a l o f a n y c a p i t a h s t t y p e o f s t a t e . T h e s e t a s k s d e r i v e f r o m its
 Towards Schumpeterian Workfare Postnational Regimes? 269

location at t h e intersection between a consolidated Fordism in decline

a n d a putative post-Fordism in the ascendant. In this sense t h e transi-
tional regime is Janus-faced and must engage in creatively destructive
i n t e r v e n t i o n s . I t m u s t b o t h 'roll b a c k t h e f r o n t i e r s ' o f A t l a n t i c F o r d i s t
s t a t e i n t e r v e n t i o n a n d 'roll f o r w a r d ' t h o s e for p o s t - F o r d i s t i n t e r v e n t i o n .
T h e first set o f a c t i v i t i e s n o t o n l y i n v o l v e s e n d i n g t h e e x c e p t i o n a l , crisis-
induced state forms a n d functions associated with A t l a n t i c Fordism in
d e c l i n e , b u t also w e a k e n i n g t h e n o r m a l , r o u t i n i z e d f o r m s o f i n t e r v e n t i o n
a s s o c i a t e d w i t h t h e K W N S m o r e generally. T h e s e c o n d set i s just a s
c o m p l e x , albeit for d i f f e r e n t r e a s o n s . F o r a t r a n s i t i o n a l r e g i m e m u s t
p u r s u e e x c e p t i o n a l m e a s u r e s t o e s t a b l i s h t h e c o n d i t i o n s for a p o s t -
Fordist 'take-off as well as begin to consolidate t h e 'normal' state forms
a n d f u n c t i o n s a s s o c i a t e d w i t h p o s t - F o r d i s m (see f i g u r e 7.1). N e i t h e r t h e
f i r s t n o r t h e s e c o n d set o f t a s k s i s ever s t r u c t u r a l l y inscribed o r s t r a t e g i -
cally p r e - s c r i p t e d . T h e y b o t h i n v o l v e c h a n c e d i s c o v e r i e s , s e a r c h p r o c e s s e s
a n d social struggles. F o r t h e s a m e r e a s o n t h i s m e a n s t h a t t h e r e c a n b e
m a n y different routes to a post-Fordist state. We saw t h e s a m e contin-
g e n c y i n t h e d e v e l o p m e n t o f t h e K W N S i n t h e discussion o f t y p o l o g i e s
of w e l f a r e r e g i m e s in c h a p t e r 2 as well as t h e e v e n t u a l c o n s o l i d a t i o n of
s o m e f u n c t i o n a l e q u i v a l e n c e b e t w e e n different f o r m s o f w e l f a r e r e g i m e
a n d A t l a n t i c F o r d i s m . T h i s i n d i c a t e s t h e n e e d for ex post facto a n a l y s e s
o f h o w p o s t - F o r d i s t s t a t e s e m e r g e t h r o u g h s t r u c t u r a l c o u p l i n g a s well a s
a t t e m p t s at s t r a t e g i c c o o r d i n a t i o n r a t h e r t h a n for ex ante ( a n d t h e r e f o r e
teleological) accounts of the necessary transition to post-Fordism." It
w o u l d c l e a r l y b e w o r t h e x p l o r i n g w h e t h e r effective t r a n s i t i o n a l r e g i m e s
are as well-suited to preserving the fruits of a transition o n c e it has
occurred. I have already indicated s o m e reasons for believing that t h e
n e o l i b e r a l f o r m o f t r a n s i t i o n i s u n s t a b l e a n d difficuh t o s u s t a i n w i t h o u t
significant f l a n k i n g a n d s u p p o r t i n g m e a s u r e s .
S i n c e t h e s e c h a n g e s i n v o l v e far m o r e t h a n a s i m p l e t e c h n i c a l f i x , i t i s
e a s y t o see w h y t h e t r a n s i t i o n f r o m K W N S t o S W P R i s a l w a y s politically
m e d i a t e d a n d o f t e n difficult. T h u s , a l t h o u g h m y e n t r y p o i n t for a n a l y s i n g
t h e transition is inspired by the Marxist critique of political economy,
a c r i t i q u e of politics is also r e q u i r e d . T h i s w o u l d s e r v e n o t o n l y to
i n t e r p r e t t h e p o l i t i c a l m e d i a t i o n s o f t h e t r a n s i t i o n (as well a s a n y
' c o n s e r v a t i o n - d i s s o l u t i o n ' effects) b u t also t h e c o n s t i t u t i v e role o f p o l i -
tics i n defining t h e p r o b l e m s t o w h i c h t h e t r a n s i t i o n i s a r e s p o n s e a n d
redefining b o t h t h e objects a n d subjects of governance. This in t u r n helps
to e x p l a i n why, d e s p i t e a t e n d e n t i a l d e n a t i o n a l i z a t i o n of t h e s t a t e a n d a
shift f r o m g o v e r n m e n t t o g o v e r n a n c e , n a t i o n a l s t a t e s still h a v e m a j o r
r o l e s i n s h a p i n g h o w t h e e c o n o m i c a n d social r e p r o d u c t i o n r e q u i r e m e n t s
of capital a r e met. For they try to d e t e r m i n e w h i c h functions go u p w a r d s ,
d o w n w a r d s and sideways, a n d the conditions on which they stay there;
 '1

state intervention

1 1 -
B

X
\ . L J___ g
C
V - -t— Q

^_ A
M

Time

IV V

Forms and levels of state intervention

A = N o r m a l level a n d f o r m of i n t e r v e n t i o n a s s o c i a t e d w i t h c u r r e n t
phase.
B = E x c e p t i o n a l c r i s i s - i n d u c e d level a n d f o r m s of s t a t e i n t e r v e n t i o n to
r e p r o d u c e c u r r e n t p h a s e in face of its crisis.
C = E x c e p t i o n a l t r a n s i t i o n a l level a n d f o r m s of s t a t e i n t e r v e n t i o n to roll
back the n o r m a l and crisis-induced interventions from previous
p h a s e a n d t o roll f o r w a r d t h e n o r m a l f o r m s o f i n t e r v e n t i o n associ-
ated with next phase.
D = N o r m a l f o r m s of i n t e r v e n t i o n a s s o c i a t e d w i t h e m e r g i n g p h a s e .

Phases
I, I I I , V = E n d p h a s e o f o u t g o i n g a c c u m u l a t i o n r e g i m e a n d its m o d e o f
r e g u l a t i o n . H i g h levels o f s t a t e i n t e r v e n t i o n d e r i v e f r o m c o m -
bination of crisis-induced measures to m a i n t a i n d y n a m i c of
t h e c u r r e n t stage, m e a s u r e s t o r o l l b a c k b o t h t h e n o r m a l a n d
the crisis-induced phases of t h e current stage, and trial-and-
error emergence of the normal forms of intervention that
m a y be associated with the next phase.
II, I V = N o r m a l forms of state intervention associated with t h e n e w
p h a s e after its c o n s o l i d a t i o n a n d b e f o r e its c r i s i s - t e n d e n c i e s
accumulate.

Figure 7.1 Schematic representation of changing forms of state inter-

vention according to periodization of capital accumulation
 Towards Schumpeterian Workfare Postnational Regimes? 271

and also seek both to design g o v e r n a n c e m e c h a n i s m s a n d to politically

organize self-organization.
W i t h the new configuration of contradictions and t h e relativization of
scale, h o w e v e r , w e c a n n o t y e t b e c e r t a i n t h a t a n o r m a l f o r m o f p o s t -
Fordist state has b e e n consolidated. At best I h a v e b e e n able to n o t e the
m o s t p r o b a b l e f e a t u r e s o f this f o r m o f t h e capitalist t y p e o f s t a t e i n s o f a r
as it is i n v o l v e d in s e c u r i n g t h e c o n d i t i o n s for t h e r e p r o d u c t i o n of c a p i t a l
a c c u m u l a t i o n (see b o x 7.2). B u t this c a n n o t p r e t e n d t o b e a n e x h a u s t i v e
analysis o f t h e c o n t e m p o r a r y c a p i t a l i s t t y p e o f s t a t e e v e n i n t h e e c o n o m i c
a n d political spaces of the f o r m e r A t l a n t i c F o r d i s m . This would be a
m u c h l a r g e r task t h a n c o u l d c o m f o r t a b l y b e c o n t a i n e d w i t h i n a w o r k o f
this kind. N o n e t h e l e s s , w e h a v e n o w d e v e l o p e d t h e a r g u m e n t t o a suffi-
c i e n t d e g r e e t o offer a s o l u t i o n t o O f f e ' s p a r a d o x .

Box 7.2 Synopsii the SV/PR und tlic rcpioduction of capital

1. SLcniirig the g e n c r . d c.Mein.i cdrulilinu'. l o i c a p i t a l a c c u m i i l a -

i i o n . - i k l i a s a f o r m a l K r a l i n n . i l h l e g a l m d e r . i n d ]->r()tei.lioii o l
pi(ipeil\ liulits. M i n e i e l k \ i \ e . i n d ili^v. l e l i n n a i x ICLMI o l d e r
a-id widci ,ind deepei in\oKenienl m inlellecUial piop^i'x

Securing die l i c l i l M i i s cominodilii.iiion ol land, nioiiev. labour-

powei .hid k n o v \ l e d g e and m o d u l a t i n g tlieir s u b s e q u e n t de-
ami i.'commodilie.iij.in in I J K li<jlit o | ihi. ch;~m'iii;> l o i r i s o f
a p p e a l a K e s o i c a p i i . i l " - s t n j e l n i ,il i o n l r . i d i c l i o i i v imj sii;ilegic
(.lilciiiiiu s a n d o l t h e i.li,iiis;in'j b ; i l a i i c e o | l o r c e s c o n k - s i in.; i h e
eMciil a n d c o n s e t i u e i K C s o l ^ucli (iclitioiis coinniodilii. alioii.
• seeiiriiig l i e liclilioiis c o m n i o d i : i c a i i o n ot the electrom.ig-
netK s]ieeiiimi. c\bersp.icc. the g e n e p o o l , ; no the bods;
• iiiodulatin!; exleiided nijrkci-diivcn commodilicatioii o:
siaieles- mone\.
• s t i a t i l i c a t i o i i , 'ei'iil.-iiion a m i • : o \ i . r i i a n c c o l LJobal p o o l ol
labour p.iuer and niodi'yinc the relations b e t w e e n m.iiui.il
aiul niem.il l.iboiii:
• ]n-oinoiing piiimtjve jccumulalion ol hitcllcctii.il eapual
and v\idermi; ..nd d e e p e n i n g intelk'ctu.il p i o p e r i v riy.lits.

Securiii-i the lii'lits a n d c.ip.ieili^s ol c.ipitaj to c o ' i i i o l l.jboui

powci i n ill.' p o d i i c t i o n p r o c e s s a n d tc",ul.itiii'.i i l i e t e r m s iml
272 Towards S c h u m p e t e r i a n W o r k f a r e Postnational Regimes?

c o n d i t i o n s o f tJie c a p i t a l - l a b o u r r e l a t i o n i n t h e l a b o u r l i i a r k e t
a n d l a b o u r process,
• c h a n g i n g r e g u l a t o r y f r a m e w o r k s t o facilitate v a r i o u s i o r i n s
o f l a b o u r m a r k e t llcxibility a n d m o b i l i t y within a n d b e -
tween (postnational) economic spaces:
• s u b b r d i n a t i n g social p o l i c y (Sozialpolitik) to ecooortiifi^
policy t h n . m g h r e d e s i g n , r e c a l i b r a t i o n a n d r e o r i e n t a t i o n
i n litte with p u r p o r t e d n e e d s o f f l e x i b l e , c o m p e t i t i v e
k n o w l e d g e - b a s e d e c o n o m y a n d / o r t h r o u g h cost r e d u c t i o n -
o r c o n t a i n m e n t i n r e g a r d t o s o c i a l w a g e a n d collective
c o n s u m p t i o n r e g a r d e d a s cost o f ( i n t e r n a t i o n a l ) p r o d i i c l i o n .

4. D e f i n i n g t h e b o u n d a r i e s b e t w e e n t h e e c o n o m i c a n d extra-:-
c c o n o n i i c a n d m o d i f y i n g the l i n k s b e t w e e n t h e e c o t t o m i c a n d
e x t r a - e c o n o m i c c o n d i t i o n s o f capital a c c u m u l a t i o n i n . t h e
light ol c h a n g e s iji t h e m a t e r i a l l y a n d discursively c o n s t i t u t e d
f o r m s o f c o m p e t i t i o n a n d i n t h e h g h t o f r e s i s t a n c e t o the,-
colonizatioji o f t h e e x t r a - e c o n o m i c b y t h e logic o f c a p i t a l .
• p r o m o t i n g t h e n o t i o n of s y s t e m i c or s t r u c t u r a l c o m p e t i -
t i v e n e s s , h e n c e p t o r i i o t i u g i n c r e a s i n g s u b o r d i n a t i o n of,
• e n t i r e scicial f o r m a t i o n lo t h e p u r p o r t e d n e e d s of capital- -
• a c c u m u l a t i o n , a n d g e n e r a l i z i n g this n o t i o n t h r o u g h '
a d o p t i o n o f w i d e - r a n g i n g i n t e r n a t i o n a l b e n c h m a r k i n g of-
competitiveness:
• • p r o m o t i o n of k n o w l e d g e - b a s e d e c o n o m y as p r i m a r y o b j e c t
of ecotioraic governance:
'• coping with resistance to colonization of extra-cdohomic
s y s t e m s a n d l i f e w o r l d by logic of a c c u m u l a t i o n on a w o i i d
scale-. • . . . . ; , ,,

5. Promoting t h e provision of t h e general conditions of p r o d u c -

t i o n , especiaUy capjlal-intetisivc i n f r a s t r u c t u r e with a l o n g
t u r n o v e r timc,.-appropriate lo a given stage and/or variety ot
capitalism. ' »
• s o c i a h z i n g l o n g - t e r m c o n d i t i o n s of p r o d u c t i o r t as s h o i t -
t e r m calculaticm b e c o m e s m o r e d o m i n a n t i n m a r k e t i / c d
e c o n o m i c activities;
• p r o m o t i n g global, national and regional information-"
infrastructures; • ,
• p r o m o t i n g social s y s t e m s of i u n o v a t i o n ;
• planning a n d subsidizing spatial fixes that support the activ-
ities o f f i j i a n c i a l , i n d u s t r i a l a n d c o m m e r c i a l capiial within'
and across borders;
 Towards S c h u m p e t e r i a n W o r k f a r e Postnational Regimes? 273

• e n g a g i n g in c o m p l e m e n t a r y f o r m s of l o c a i i o n a l - p o l i c y
[StandonpoUtik) a n d otlrer f o r m s of p l a c e - b a s e d competi-- '
t i o n i n a n a t t e m p t t o fix m o b i l e c a p i t a l . w i t i i i n t h e s t a t e ' s
o w n e c o n o m i c s p a c e s a n d tc> e n i i a n c e t h e i n t c r u r b a n , iitter-
r e g i o n a l . o r i n t e r n a t i o n a l c o m p e t i t i v e n e s s o f its o w n p l a c e -
bouiid capitals,

6. Managing the fundamental contradiction between t h e increas-

ingly social n a t u r e o f p r o d u c t i v e f o r c e s a n d tJic c o n t i n u i n g a n d
p r i v a t e n a t u r e o f t h e social r e l a t i o n s o f p r o d u c t i o n a n d t h e
, a p p r o p r i a t i o n of s u r p l u s l a b o u r .
• l i b e r a l i z a t i o n a n d d e r e g u l a t i o n of I'orcign e x c h a n g e m o v e -
m e n t s and redesign of iutcrhational financial architecture •
w i t h t h e effect o f i n t e r n a t i o n a l i z i n g a n d a c c e l e r a t i n g c a p i t a l . '

• m o d i f y i n g institufignal f r a m e w o r k s for i n t e r n a t i o n a l t r a d e
-and FOI;
• p r o t n o t i n g t h e s p a c e of flows in this c o n t e x t by o r g a n i z i n g
c o n d i t i o n s f a v o u r a b l e t o t h e i n t e r n a t i o n a l m o b i l i t y o f fech-
nologic-s, i n d u s t r i a l a n d c o m m e r c i a l c a p i t a l , i n t e l l e c t u a l .
property, and at least some types of labotir-power;
• a d d r e s s i n g t h e m u l t i f o r m i t y of e c o n o m i c g l o b a l i z a t i o n by
e n g a g i n g in t h e r i v a l r o u s a n d conflictual s t r u g g l e to d e f i n e •
t h e r u l e s for h a r m o n i z i n g o r s i a n d a r d i z i i t g t e c h n o l o g i c a l ,
e c o n o m i c , j u r i d i c o p o l i t i c a l , s o c i o c u l t u r a l a n d ei^vironmeii-
tai i s s u e s ;
• a d d r e s s i n g t h e e c o l o g i c a l c o n l r a d i c t i o j i s of capital a c c u m u - '
lation g e n e r a t e d by the dissociation between real transfor-
m a t i o n a n d a p p r o p r i a t i o n o f n a t u r e a n d its i n c o m p l e t e a n d
' partial monetized expression:
• m a n a g i n g f u n d a m e n t a l c o n t r a d i c t i o n b e t w e e n socialization
o f p r o d u c t i v e " f o r c e s tmd r e l a t i o n s o f p r o d u c t i o n a s e x -
p r e s s e d i n g e n e r a l t<;nsion b e t w e e n i n f o r m a t i o n s o c i e t y a n d . ,
infortnatibn economy.

7. ArticuUtting t h e U i t e r h n k e d p r o c e s s e s o f d e - a n d r e t e r r i t o r i a l -
i z a t i o n a n d d e - a n d r e i e m p o r a l i z a t i o n a s s o c i a t e d w i t h tlte
r e m a k i n g o f t h e s p a t i o - t e m p o r a l fixes n e c e s s a r y for r e l a t i v e l y
' s t a b l e p e r i o d s of a c c u m u l a t i o n .
• c o o p e r a t i n g in defining a n d e s t a b l i s h i n g n e w s c a l e s - o f
activity ( a n d d i s m a n t l i n g o t h e r s ) , t h e r e b y r e s c a l i n g a n d r e -
a r t i c u l a t i n g v a r i o u s .state p o w e r s , i n s t i t u t i o n a l f o r m s
a n d r e g u l a t o r y c a p a c i i i e s a n d c r e a t i n g t h e possibility for
274 T o w a r d s S c h u m p e t e r i a n W o r k f a r e Postnational Regimes?

, ihemsclves a n d other actors to 'jump scales'. This includes

dccentralizatitm and cross-border region formation, re-
g i o n a l b l o c f o r m a t i o n a n d p a r t i c i p a t i n g i n f o r u m s for i n t e r -
triad negotiation;
• deterritorializing s o m e state fimctions by transferring t h e m
f o p r i v a t e f o r m s o f f u n c t i o n a l a u t h o r i t y (iriciudiflg i n t e r n a -
tional regimes) a n d / o r to mobile m a r k e t forces;
• • a t t e m p t i n g , c o n v e r s e l y , ,to fit s o m e n o n - t e r r i t o r i a l p r o b -
l e m s i n t o a n a r e a l s t r u c t u r e (e.g., m a k i n g n a t i o n a l s t a t e s r e s -
p o t i s i b l e for eiiforcing i n t e r n a t i o n a l a g r e e t n e n t s oil g l o b a l '
w a r m i n g with n a t i o n a l s t a t e s ) ;
• seeking to m a n a g e the tension between (a) the interests of
potentially mobile capital in reducing its place-dependency
a n d / i f f freeing itself from t e r i i p o r d c o n s t r a i n t s a n d ( b ; t h e
s t a t e ' s o w n i n t e r e s t i n iixing ( a l l e g e d l y b e n e f i c i a l ) c a p i t a l iii
its t e r r i t o r y a n d r e n d e r i n g c a p i l a f s t e m p o r a l h o r i z o n s a n d
r h y t h m s c o m p a t i b l e with its o w n political r o u t i n e s , t e m p o -
ralities; and crisis-tendencies. "
• p r o m o t i n g n e w tciiiporal horizons of action and new forms
of t e m p o r a l flexibility; ,
. • c o p i n g w i t h t h e i n c r e a s e d s a l i e n c e of m u l t i p l e t i m e z o n e s
(in c o n i m e r c e . diplofnac}', security, e t c . ) :
• r e a d i b r a l i n g - a n d managing the intersection of temporali-
ties (e.g.,_ r e g u l a t i n g c o m p u t e r - p r o g r a m m e d t r a d h i g , p r o -
m u t n - i g l l K 2 4 - l i n u i cit> c c i i l t c nl C"insMnipl i-n. m a r . i u n i L '
enviroiimcntal risk);
• p r o m o t i n g u n e v e n d e v e l o p m e n t t h r o u g h p o h c i e s for i n t e r -
urban, i n t e r r e g i o n a l and international competition - and
s e e k i n g t o c o m p e n s a t e for this.

8. A d d r e s s i n g t h e w i d e r poJitical a n d social r e p e r c t i s s i o n s o f t h e
I h a n i i m g i o r i n s ol a p j i t a r a n c c ol c:i|>italisi v . o n l i , i d i c t i o n s .ukl
diL-mm;is as i l K s e : (c i i K d i , i l v . d in ,md ihrougli ^pccilic f o i m ^
o f p o l i t i c a l o r g a n i z a t i o n a n d mobilization-.
• d e n a t i o n a l i z a t i o n of s t a t e a n d i n c r e a s e d r o l e of s l a t e in
interscalar articulation;
• d e s t a t i z a t i o n of c t i r r c n t s t a t e functions by t r a n s f e r r i n g
thcitt t o p r i v a t e - p u l d i c p a r t n e r s h i p s o r p l a c e - h o u n d m a r k e t
forces a n d t h e r e b y linking t h e m to m a r k e t - o r i e n t e d t e m -
poralities a n d seeking to organize this process through
metagovernance;
• shaping international pohcy regimes and imidulating their
implementation.
 Towards Schumpeterian Workfare Postnational Regimes? 275

\'>,c: l l u s lisi I - i i K o m p l c i c CIIKI l l i c a , . l i \ i l i c - parity o v e r l a p l.ach

o f l l i c e a c l i \ i l i c s eaii h e I I I I I V C L I i i i l o tlifl'trcnl a c c u i i u i l a ; i o i i ^ i r a k -
'.II.-s ,11111 s l a l e ' i i o j e c h .

6. Resolving Offe's Paradox: Capitalism and the

Welfare State

A s I n o t e d i n t h e I n t r o d u c t i o n , C l a u s Offe o n c e s u g g e s t e d t h a t ' w h i l e
c a p i t a l i s m c a n n o t c o e x i s t with, n e i t h e r c a n it exist without, t h e w e l f a r e
s t a t e ' (1984: 1 5 3 ; italics in original). S o m e m i g h t dismiss this as a m e r e
rhetorical flourish without theoretical meaning or empirical application.
I n fact, O f f e d i d a t t e m p t t o g r o u n d his a r g u m e n t i n t h e n a t u r e o f c a p i -
t a l i s m ; h e also n o t e d s o m e o f its p r a c t i c a l i m p l i c a t i o n s . I n d e e d , his a n a l y -
sis i s g e n e r a l l y c o m p e l l i n g a n d still r e p a y s c a r e f u l r e a d i n g . Its m a i n
p r o b l e m lies e l s e w h e r e . F o r , l i k e m u c h t h e o r i z i n g a b o u t t h e crisis o f t h e
w e l f a r e s t a t e i n t h e 1970s a n d e a r l y 1980s, i t w a s s h a p e d b y t h e e c o n o m i c
a n d p o l i t i c a l h o r i z o n s o f its t i m e . ' ^ O f f e d e v e l o p e d his analysis i n t h e
context of the K W N S in E u r o p e , N o r t h A m e r i c a and Australasia and did
n o t fully a d d r e s s t h e m o r e g e n e r a l difficuhies i n v o l v e d i n c a p i t a l a c c u -
mulation. As t h e Atlantic Fordist system has continued to decline,
h o w e v e r , w e h a v e a b e t t e r u n d e r s t a n d i n g o f its n a t u r e a n d l i m i t a t i o n s . I t
i s also e a s i e r t o d i s t i n g u i s h b e t w e e n its p a r t i c u l a r f e a t u r e s a n d t h o s e
c h a r a c t e r i z i n g c a p i t a l i s m as a w h o l e .
T h u s we are n o w in a position to suggest a solution to 'Offe's p a r a d o x ' .
O n t h e o n e h a n d , c a p i t a l i s m ( a t l e a s t m its A t l a n t i c F o r d i s t f o r m ) c o -
e x i s t e d w i t h t h e w e l f a r e s t a t e (in t h e f o r m o f t h e K W N S ) for a n e x t e n d e d
period. This did not p r e c l u d e the demise or weakening of firms or sectors
that could not c o m p e t e in the n e w Fordist-KWNS setting. Eventually,
t h e F o r d i s t a c c u m u l a t i o n r e g i m e a n d its K W N S m o d e o f r e g u l a t i o n
b e c a m e mutually contradictory. This p r o m p t e d a m o v e away from
A t l a n t i c F o r d i s m t o s e a r c h for n e w e c o n o m i c a n d social b a s e s for c a p i t a l
a c c u m u l a t i o n ; a n d this h a s i n v o l v e d a p a r t i a l d i s m a n t l i n g ( w i t h d u e
r e c o g n i t i o n o f c o m p l e x ' c o n s e r v a t i o n - d i s s o l u t i o n ' effects) o f t h e K W N S .
I n this sense t h e e m e r g i n g p o s t - F o r d i s t a c c u m u l a t i o n r e g i m e c a n n o t
coexist w i t h t h e K W N S . B u t , t o c o m p l i c a t e a n d clarify m a t t e r s a t o n e
a n d t h e s a m e t i m e , t h e c o n t i n u i n g s e a r c h for n e w e c o n o m i c a n d social
b a s e s of c a p i t a l a c c u m u l a t i o n a l s o i n v o l v e s a s e a r c h for n e w f o r m s of
state intervention that might h e l p to secure the valorization of capital
a n d t h e social r e p r o d u c t i o n o f l a b o u r - p o w e r . O n e c o u l d p e r h a p s call this
a s e a r c h for a n e w t y p e of s t a t e to h e l p to m a n a g e a n e w t y p e of s p a t i o -
t e m p o r a l f i x or, t o suit Offe's p a r a d o x , t h e s e a r c h for a n e w t y p e o f
 276 Towards Schumpeterian Workfare Postnational Regimes?

welfare state. B u t this emphasis on the continuity of state involvement

i n e c o n o m i c a n d social r e p r o d u c t i o n i s b o t h d i s i n g e n u o u s a n d m i s l e a d -
ing b e c a u s e , a s a r g u e d a b o v e , t h e c o r e o r g a n i z a t i o n a l p r i n c i p l e s o f t h e
K W N S are being superseded in favour of those of the S W P R as a con-
dition for the r e n e w e d coexistence of capitalism a n d the welfare state.
N o n e t h e l e s s , t h e r e i s a d e e p e r t r u t h i n Offe's claim. T h e r e a r e i n d e e d
basic structural contradictions and strategic dilemmas in the capital rela-
t i o n t h a t e n s u r e t h a t t h e r e l a t i o n s h i p b e t w e e n m a r k e t , civil s o c i e t y a n d
s t a t e i s a l w a y s p r o b l e m a t i c . C a p i t a l i s t g r o w t h d e p e n d s essentially o n t h e
m a r k e t - m e d i a t e d e x p l o i t a t i o n o f w a g e - l a b o u r - n o t o n t h e i n h e r e n t effi-
ciency o f u n f e t t e r e d m a r k e t s . M a r k e t s m e d i a t e t h e s e a r c h for a d d e d
v a l u e b u t c a n n o t t h e m s e l v e s p r o d u c e it; a n d t h e v e r y p r o c e s s o f c o m -
modification engendered by the spread of the m a r k e t m e c h a n i s m gen-
e r a t e s c o n t r a d i c t i o n s t h a t c a n n o t b e r e s o l v e d b y t h a t m e c h a n i s m itself.
This is e v i d e n t in c o n t r a d i c t i o n s i n s c r i b e d in t h e m o s t b a s i c f o r m s of t h e
capitalist m a r k e t society. It w a s in m a n a g i n g , at least for a while, s u c h
contradictions and dilemmas within the spatio-temporal matrix of the
n a t i o n a l e c o n o m y a n d t h e n a t i o n a l s t a t e t h a t t h e ' w e l f a r e m i x ' associ-
a t e d w i t h t h e K W N S m a d e its o w n c o n t r i b u t i o n t o t h e A t l a n t i c F o r d i s t
r e g i m e . N o n e t h e l e s s , m u c h o f w h a t p a s s e d t h e n a s ' m a r k e t f a i l u r e ' (i.e.,
was discursively constructed as such) a n d to which t h e K W N S was
judged an appropriate response was actually an expression of deeper
contradictions of capitalism. Thus K W N S intervention often only m o d i -
f i e d t h e f o r m s o r sites o f t h e s e c o n t r a d i c t i o n s - i n t r o d u c i n g class s t r u g -
gles into t h e s t a t e a n d / o r g e n e r a t i n g t e n d e n c i e s t o w a r d s f i s c a l crisis,
l e g i t i m a c y crisis, r a t i o n a l i t y crisis, etc. A n d , a s t h e c a p i t a l r e l a t i o n d e v e l -
o p e d in ways that u n d e r m i n e d the national e c o n o m y as an object of state
m a n a g e m e n t , the underlying contradictions re-emerged. Thus, if the state
h a d failed t o c o m p e n s a t e for t h e f a i l u r e s o f t h e m a r k e t w i t h i n t h e K W N S
and, in a d d i t i o n , g e n e r a t e d its o w n failures, it d o e s n o t follow t h a t a
r e t u r n t o t h e m a r k e t will p u t t h i n g s right. T h e S W P R i s t h e l a t e s t a t t e m p t
t o s q u a r e t h i s c a p i t a l a c c u m u l a t i o n - s o c i a l w e l f a r e ( r e p r o d u c t i o n ) circle.
L i k e t h e K W N S , i t m a y b e c o n s o l i d a t e d for a w h i l e ; b u t , like t h e S W P R ,
it is unlikely to prove p e r m a n e n t .
 Notes

chapter 1: Capitalism a n d the Capitalist Type of State

1 The distinction between system and hfeworld was introduced by Habermas

(1975,1987 and 1996). I extend systems well beyond his initial economy and
juridico-political couplet to include any self-organizing (or autopoietic)
system with its own instrumental rationality, institutional matrix and social
agents who consciously orient their actions to that system's code. I also inter-
pret the lifeworld more widely than Habermas initially did. Ihus it is used
here to refer to all those identities, interests, values and conventions that are
not directly anchored in the logic of any particular system and that provide
the substratum and background to social interaction in everyday life, includ-
ing enmity and antagonism as well as intimacy and solidarity.
2 With the continuing development of productivity and hence 'wealth crea-
tion', social norms of consumption (as indicated in the quantity and quality
of consumer goods and services) in the advanced capitalist economies will
tend to rise well above any bare subsistence minimum. Whether the increase
and transformation in these use-values also represent an increased share
of total added value of production is another matter entirely and depends
on the outcome of wide-ranging economic and political struggles within and
beyond the advanced capitalist social formations (on the distinction between
wealth and value, see Postone 1993). Moreover, whilst recognizing the trend
towards increased wealth in advanced capitalist societies, one should not
forget that it depends on an increasingly global division of labour that is also
marked by highly unequal working conditions, wages and living standards.
3 , Structural contradictions tend to arise under at least three different types
of condition; first, when the overall logic of an institutional ensemble
generates opposed developmental tendencies (for example, the growing
socialization of productive forces versus continuing private control over the
relations of production and surplus appropriation); second, when there is a
278 Notes to pp. 1 4 - 1 6

conflict or tension between tlie requirements of system reproduction and

the logic of individual action (for example, capital in general versus par-
ticular capitals); and, third, when a social relation is so constituted that it
tends to produce socially structured conflicts between inherently antago-
nistic interests (for example, capital versus labour).
4 A strategic dilemma exists when agents face choices such that, within given
parameters and horizons of action, any action that they pursue (including
inaction) will undermine some key condition(s) of their existence and/or
their capacities to realize a broader set of interests. Dilemmas can be defined
at different levels of individual and collective agency Partial solutions may
be possible if the parametric conditions and horizons of action are changed.
This could occur, for example, through alternating between the horns of the
dilemma, through strategic learning based on iteration, through deferring or
displacing the adverse consequences of a given path of action, and so on.
5 The term 'exploitation' is used here in a morally neutral manner.
6 Such 'real subsumption' (to use Marx's term) has since been extended to
non-manual work through the use of intelhgent office machines that monitor
and regulate non-manual work. But it is never sufficient in itself to secure the
compliance of the labour force and is typically supplemented by other forms
of discipline and control, including coercion, bureaucracy,, performance-
related pay and attempts to mould workers' subjectivity (see Marsden 1999).
7 Class relations are never defined purely at the level of economic relations
but are overdetermined by the intervention of juridico-political and ideo-
logical structures and the articulation of class to other social categories.
Moreover, from strategic and/or tactical viewpoints, workers, capitalists and
other social forces may seek to organize labour markets and the labour
process in terms of other interests and categories, leading to segmented
labour markets and skewed divisions of labour.
8 Innovations that enable a given enterprise to produce commodities below
the socially necessary labour time that is typical for such commodities and/or
to keep realization costs below average wiU produce surplus profits until
they become generalized and thus redefine what is socially necessary. In this
sense, capitalist competition revolves around the average rate of profit.
9 These laws and tendencies include: (1) the growing concentration of capital,
that is, the accumulation of capitahst assets by single firms through the rein-
vestment of past profits; (2) the increased importance of productivity gains
('relative surplus-value') as opposed to longer working hours and greater
effort ('absolute surplus-value') in the creation of surplus; (3) the increas-
ing urgency of overcoming the obstacles to capitalist expansion involved in
the tendency of the rate of profit to fall - a general tendency that emerges
insofar as all enterprises seek a competitive edge by substituting labour-
saving machinery for wage-labour even though the latter is, according to
Marx, the sole source of profit on the total capital advanced to buy capital
goods and materials as well as labour-power; (4) the growing centralization
of capital, that is, the management of assets owned by different individuals
or firms by one enterprise (for example, through joint-stock companies or
banks); (5) the growing separation of legal ownership and effective control
 Notes to pp. 1 6 - 5 7 279

of tlie means of production through the development of joint-stock compa-

nies and related forms of business organization; (6) the growing importance
of credit in the functioning of the capitalist system; and so forth.
10 Labour-power as a fictitious commodity is unusual here because it is not
produced as an exchange-value; and, in addition, its use-value in capitalism
is its capacity to produce exchange-value.
11 Cf. Cleaver on the wage form; 'It is exactly because workers have needs (and
no means of producing what they need) that capital can sell those use-values
and realize the exchange-values it desires. It is exactly because labor-power
is a use-value for capital that it is an exchange-value for labor' (1979: 92).
12 The same principle applies where money circulates within plurinational
spaces, such as formal or informal empires, dominated by one state.
13 This argument about ecological dominance would also apply to other types
of social forces in other types of social ecology, such as organizations and
networks. Organizations and networks can also be more or less ecologically
dominant in their respective social worlds.
14 To avoid any misunderstanding, this statement does not entail that the state
and capital are fully autonomous entities and that the state is therefore able
to intervene from a position wholly outside what is an exclusively economic
circuit of capital to suspend the full realization of its purely economic laws of
motion. It is merely intended to emphasize that the reproduction of capital-
ism always depends on appropriate extra-economic conditions and that its
tendencies are only fully realized to the extent that 'accumulation for the sake
of accumulation' is established as the dominant principle of societalization.
15 This apt phrase comes from Bliihdorn's commentary on Luhmann, even
though he does not acknowledge Luhmann's own contribution to the analy-
sis of ecological dominance (2000: 351).
16 Accumulation strategies are formulated on many scales of economic activ-
ity from the different units of a firm through the branch or region to the
national or supranational bloc. Different types of actor play a leading role
in each case. For a discussion of dimensions of accumulation strategies at
the firm level, see Williams et al. 1983, and, at branch level Ruigrok and van
Tulder 1995.
17 For a strategic-relational critique and reinterpretation of institutions and the
significance of institutionalism, see Jessop 2001c.
18 Max Weber distinguished several forms of capitalism (for example, booty
capitalism, political capitalism) that could certainly exist and, perhaps, thrive
in the absence of what I am calling here the capitalist type of state (see
Weber 1978; and, for a good discussion, Swedberg 1998).
19 On the earlier concept of structural selectivity, see Offe 1972 and Poulantzas
1978; on the more recent concept of strategic selectivity, developed on the
basis of Poulantzas's work, see Jessop 1985 and 1990b.

Chapter 2: The Keynesian Welfare National State

1 See Lipietz 1982. Lipietz also notes that the virtuous circle of Fordism also
requires that increased productivity in the capital goods sector should offset
280 Notes to pp. 5 8 - 8 8

a rising teclinical composition of capital (or capital intensity of production)

if the capital/output ratio is not to grow and so depress profits.
2 All economies have specific properties, of course; but it is worth noting here
that Germany is distinctive because of the importance of export-oriented
capital goods industries in its overall growth dynamic. Nonetheless,
Germany's overall economic performance and capacity to develop mass
consumption at home depended on demand for these capital goods gener-
ated in large part by the overall dynamic of Atlantic Fordism.
3 Australia and Canada are described as small economies because, despite
their massive territories, their population and output are relatively small.
4 PitruzeUo (1999) subjected Esping-Andersen's typology to cluster analysis
and, on this basis, developed a new fivefold schema. This repeats the now
common distinction between the Antipodean and Anglo-American liberal
market regimes and reclassifies the other cases into three sets: universalis-
tic (Belgium, Denmark, Norway, Sweden), Bismarckian (Germany,
Swizerland, the Netherlands), and a new subset within the conservative-
corporatist regime. (Austria, Finland, France, Italy, Japan).
5 Pitruzello (1999) provides a good overview of mainstream critiques; see
also Abrahamson 1999 and, for feminist critiques, Bussemaker and van
Kersbergen 1994 and Daly 1994.
6 OECD data indicate that public spending in Southern European welfare
states, Japan and the USA is particularly biased towards the elderly and that
Antipodean and social democratic welfare regimes are more biased towards
children and working adults (OECD 1996).
7 These features are secondary in relation to the regulationist state-theoretical
starting point for this analysis. However, if, for example, gender were one's
primary analytical focus, other features would be deemed secondary.
8 On Germany, Britain, France and northern Italy in this regard, see
Biernacki 1995.
9 For Soskice (1999:102), a production regime comprises the financial, indus-
trial relations, education and training, and intercompany systems.
10 The terminology of principal and secondary contradictions and of the
primary and secondary aspects of contradictions derives from Mao Zhe-
Dong (1967) and was revived in a different context by Louis Althusser
(1977). My own flirtation with this language serves heuristic purposes. See
also chapter 4.
11 Indeed, several studies indicate that such fine-tuning was more likely t o have
pro- than contra-cyclical effects.
12 In contrast, the new postwar international regimes established under
American hegemony served broader interests in capital accumulation.
13 This squeeze was aggravated to the extent that the Second Cold War, which
was not just a reflex of the crisis of Fordism but was linked to the Soviet
invasion of Afghanistan and the rise of neoliberalism, led to increased
military spending.
14 Capitalism also introduces new products, stimulates new wants and thereby
creates new vested interests. Moreover, privatized consumerism may
threaten valorization through wage claims and excess consumer credit
 Notes to pp. 8 9 - 1 1 2 281

expansion just as much as collective consumption does via taxation and

public debt.
15 Other relevant factors here are international migration, a trend towards mul-
ticulturalism and the emergence of significant diasporas. These have helped
to undermine national identities based on, respectively, the Volksnation, the
Kulturnation and the Staatsnation. On transnationalism, see Smith 2000.
16 Seen in terms of the overall Fordist dynamic, it is tempting to argue that
even factors such as demographic change are actually integral elements or
inevitable consequences of a Fordist social structure.
17 On discursive selectivity, see Hay 1996; on structural selectivity, see Jessop
1990b.

Chapter 3: The Schumpeterian Competition State

1 The concept of the competition state was first introduced by Cerny (1986)
and, as nationaler Wettbewerbstaat (national competition state), by Hirsch
(1995). My approach differs from both of these but is certainly closer to
Hirsch.
2 One calculation suggests that Internet use in aU sectors of the US economy
should raise productivity there by 5 per cent during 2000-10 (Brookes and
Wahhaj 2000).
3 On the distinction between hardware, software and wetware, see Nelson and
Romer 1996.
4 Given the significance of intra-European trade, whether the wage could be
a source of demand for a rescaled European Keynesianism is another issue.
5 In the longer run, returns on portfolio investment are tied to the valoriza-
tion of capital in the production process; in the short run, this is not the case.
Herein lie the roots of the debate over the short-termism of finance capital.
6 The OECD introduced the concept of structural competitiveness in 1986
and remains a key organizing principle in its policy work on competitive-
ness. It refers to 'the global efficiency of the national economy, proficient
and flexible structure of industries, the rate and pattern of capital invest-
ment, its technical infrastructure and other factors determining the 'exter-
nalities', i.e. the economic, social and institutional frameworks and
phenomena which can substantially stimulate or hamper both the produc-
tive and competitive thrust of domestic firms (Chesnais 1986: 86-7). Sys-
temic competitiveness is equally comprehensive. Messner defines it in terms
of 'the outcome of a pattern of complex and dynamic interaction between
states, firms, intermediary institutions, and the organizational capacity of
given societies' (1998:10).
7 This can occur either by reducing the time a given 'event' takes to produce
within a given spatial frame of action, or by increasing the ability to dis-
criminate more steps in an 'event' and so enhancing opportunities to modify
its course or outcome by intervening in the event as it happens.
8 Time-space compression refers here to actual processes rather than a
sense of disorientation generated by spatio-temporal changes linked to
globalization.
282 Notes to pp. 1 1 4 - 5 4

9 On glocalization, see Brenner 1998, 2000 and Swyngedouw 1997; on glur-

banization, see Jessop and Sum 2000; on transnationalization, see Smith 2000.
10 The temporal dimension of flow is captured in the metaphors of 'liquidity'
and 'stickiness'.
11 Different theories of international competitiveness are often linked to dif-
ferent typologies and disputes about the bases of competitive advantage. For
a recent survey of eleven different usages of competitiveness in economics,
see Bloch and Kenyon 2001. In practice, however, different types of advan-
tage may be complementary.
12 The related Ricardian discourse tends to treat as 'natural' many factors of
production that actually depend heavily on broader social conditions: an
abundance of cheap wage-labour is an obvious example.
13 As Warr notes '[t]he classical theory of comparative advantage rested on
some seriously simplified assumptions: international market prices were
assumed to be known and stable; there was no uncertainty about the prices
that would be obtained for export products, or paid for imports; there was
no learning-by-doing; technology was known; constant returns to scale pre-
vailed; resources were all fully employed; and the characteristics of com-
modities were fixed and known to everyone' (1994: 4).
14 In naming just four economic theorists here, I am not implying that these
are the only relevant figures or that theirs are the only approaches to com-
petitiveness. They are simply useful emblematic figures in this context.
15 Indeed, if speculative imitation goes too far, oversupply could reduce profits
below normal levels.
16 As used in the neo-Schumpeterian approach to innovation and long waves,
a motive force refers to the adoption of a major innovation in a dynamic
sector with potential repercussions throughout the economy (e.g., the intro-
duction of the microchip) and a carrier force is a vector for the diffusion of
these effects (e.g., the adoption of microchip technologies in vehicle con-
struction). For further discussion, see Freeman and Perez 1988.
17 Interestingly, Castells, who introduced the notion of informational capital-
ism, neglects the significance of intellectual property in its dynamic, focus-
ing instead on knowledge as a factor of production (Castells 1996, 2000b).
18 The principal exception among the leading East Asian economies was the
Ricardian workfare colonial regime in Hong Kong (Sum 1998).

Chapter 4: Social Reproduction and the Workfare State

1 The practice is much older, however; see, for example, de Swaan 1988.
2 This expectation is economic and political. The state is expected cognitively
and normatively to compensate for market failure; and the labour force
itself has a specific presence both within the state and at a distance from it.
3 The distinction between passive and active is often blurred in practice: 'The
administration of unemployment-related benefits always involves checks on
the eligibility of the recipient, including whether they are seeking work and
are being reasonable about the type of work they are prepared to undertake.
This activity quickly meshes with programmes designed to help individuals
 Notes to pp. 1 5 6 - 8 0 283

witli their job search, or to enable them to consider a wider range of work,
which in turn leads to consideration of other programmes designed to help
individuals secure work... . [Thus] we can say that active labour-market
policy blends into workfare when the emphasis on compulsion becomes an
overwhelmingly important feature of the system' (Robinson 2000: 87).
4 This shift was reflected in Britain by the renaming and merger of the rele-
vant ministries: what started in the postwar period as the Ministry of Labour,
the Board of Trade and the Department of Education were eventually fused
and renamed as the Department for Ernployment and Education (and sub-
sequently renamed the Department for Education and Skills).
5 It does not follow from this that welfare states are for the elderly, however.
There are major variations in the generational beneficiaries of transfers
(with Italy being the supreme example of a pensioners' welfare state, while
the USA favours children); and other benefits may also disproportionately
benefit younger generations (e.g., housing) rather than the elderly (e.g.,
health care).
6 Paradoxically, part of the response was to continue expansion of higher edu-
cation as one means of disguising youth unemployment.
7 Lauder et al. also discussed two further models from East Asia: Japan relied
on highly diffused skills, medium capital investment relative to skill, and high
labour intensity to generate high levels of productivity; Singapore and South
Korea relied on a high-skills strategy based on skill diffusion and capital
investment related to skill utilization in the context of rapid but uneven
skills formation with high labour intensity to generate productivity.

Chapter 5: The Political Economy of State Rescaling

1 I use post-Fordism to refer to an ideal-typical after-Fordist regime that is
characterized by structured coherence; and I use after-Fordism to refer to
actually existing after-Fordist regimes that are marked by a continuing rel-
ative incoherence because a new accumulation regime and mode of regula-
tion have not yet been established.
2 Tn [the nation-state], differences are assimilated, destroyed, or assigned to
ghettoes, to enclaves demarcated by boundaries so sharp that they enable
the nation to acknowledge the apparently singular and clearly fenced-off
differences within itself, while simultaneously reaffirming the privileged
homogeneity of the rest, as well as the difference between itself and what
lies over its frontiers' (Tololyan 1991: 6).
3 Cyberspace is, in fact, far from evenly distributed or accessible and it does
have roots in specific places.
4 Whitehead, cited by Harvey, argues that 'there are an indefinite number of
discordant time-series and an indefinite number of distinct spaces'. Hence
it is important to examine how 'multiple processes flow together to construct
a single consistent, coherent, though multifaceted, time-space system'
(Harvey 1996: 260).
5 This qualification is important because Atlantic Fordism involved a retreat
from earlier levels of internationalization or globalization.
284 Notes to pp. 1 8 8 - 2 4 9

6 Ttie following list is inspired in part by Harvey 1989: 9-10.

7 This discussion draws on an ESRC project undertaken in conjunction
with Colin Hay, who contributed significantly to the initial fourfold typology
from which the present sixfold typology has been developed (ESRC grant
L311253032).
8 Tntermestic' is a term coined by Duchacek to refer to the expanding area of
international connections between local authorities. See Duchacek et al.
1988.

Chapter 6: From Mixed Economy to Metagovernance

1 Thus there are three main explanatory approaches to the economic mira-
cles that have occurred in East Asia: a liberal interpretation emphasizing
the emancipation of market forces, a statist interpretation that focuses on
the role of the developmental state, and a culturalist reading that empha-
sizes the specificities of Confucian capitahsm. Despite their differences of
interpretation, however, all three approaches adopt the market-state-civil
society paradigm. They ignore the extent to which Asian societies lack the
clear institutional separation of market and state said to be typical of
modern western societies, lack a clear, hierarchically organized sovereign
state, and lack a bourgeois civil society with strongly developed individual-
ism. This means that such interpretations also ignore the networks of eco-
nomic and political forces that cross-cut private-public boundaries and
deploy both economic and political resources in pursuit of specific economic
and political projects; and ignore the extent to which collective rather than
individual identities shape orientations in the lifeworld.
2 The concept of 'formal freedom' is used here to draw an implicit contrast
with the lack of full substantive freedom due to the multiple constraints that
limit free choice. But the institutionalization of formal freedom is nonethe-
less a significant political accomplishment and a major element in liberal cit-
izenship as well as a precondition for market economies.
3 Primitive accumulation is not a one-off process that ends once the condi-
tions for the self-valorization of capital have been established, but one that
has a continuing role thereafter in capital accumulation (see de Angelis
1999). Nonetheless, it also varies in importance - witness the recent upswing
through the commodification of the intellectual commons.
4 '[Sjince every project is always a part of some more extensive assemblage,
so every project is always enmeshed with other projective activities, and
there can be no guarantee that such projects, though connected, will even
be wholly consistent with one another' (Malpas and Wickham 1995: 46).

Chapter 7: Towards Schumpeterian Workfare Postnational Regimes?

1 In this sense nothing can be explained in terms of the tendential shift from
the KWNS to the SWPR, the 'hollowing out' of the state, or the movement
from government to governance. It is these shifts themselves that need
explaining.
 Notes to pp. 2 5 2 - 7 5 285

2 Another meaning of postnational is also relevant. This is the movement

from a nation-state (whether Volksnation, Kulturnation or Staatsnation)
towards a multiethnic, multicultural, and more 'diasporic' society within
given national territorial borders (see chapter 5).
3 The use of ideal-types is often incorrectly dismissed as empiricist and hence
as inconsistent with the type of critical realist approach adopted here. This
does justice neither to Weber's own use of ideal types in his historical analy-
ses nor to the nature of concept formation in Marxism. On Weber's ideal
types, see Ringer 1997; and on concept formation in the regulation approach
and state theory, Jessop 1982, 1990b, and 2001b.
4 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 pubhc spending programmes
and the presence of the welfare state. See Therborn and Roebroek (1986).
On international Keynesianism, see also Piore and Sabel 1985.
5 Thus I have discussed elsewhere the ideal-typical Listian workfare national
state and the ideal-typical Ricardian workfare colonial regime in the East
Asian NICs in terms of their primary goals in accumulation (see Jessop
1999c; and Sum 1998). A different typology could be based on how different
forms of economic and social intervention contribute to specific state pro-
jects. Thus one might contrast the Bismarckian social imperialist Sozialstaat
with the Beveridgean social democratic welfare state (see also chapter 2).
6 The following argument derives from Carpi (1997) but has been rephrased
to fit with the more general approach developed in earlier parts of the
chapter.
7 The labels attached to these elements are mine. The EC Bulletin cited here
simply lists a range of policies and describes their respective roles.
8 This issue is a specific version of the general problem in Marxist state theory
(Jessop 1990b): is it a state in capitalist societies or a capitalist state?
9 Congruence is best analysed in this context in terms of the 'strategic selec-
tivity' of state structures, i.e., the extent to which specific structural forms
and operations privilege the pursuit of policies favourable to Fordism.
10 It would be wrong to posit two distinct types of post-Fordist state that
succeed one another: transitional and consolidated. This would be reminis-
cent of the awkward structuraUst fallacy of positing a transitional mode of
production between each normal mode of production, with the latter
defined in terms of its structurally inscribed function of securing the transi-
tion from one normal mode to the next (cf. Cutler et al. 1977). It is for this
reason that I refer to a transitional regime with an indeterminate form and
a normal state with a determinate form. Even with regard to the latter, it
will prove necessary to specify its variant forms.
11 For further discussion of ex post facto analyses and how they can be devel-
oped through work on the co-constitution of modes and objects of regula-
tion, see Jessop 1990a, 1990b, and 2001b.
12 The same point applies to the work of Poulantzas on the future of the state
in the mid-1970s, which was also hmited by Atlantic Fordist horizons (see
Jessop 2002a).
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 Index

Note: The index combines names and subjects. Page numbers printed in bold refer to a
major discussion of a given topic. Specific page numbers (e.g. 31-3) indicate that the dis-
cussion continues over the relevant pages; non-specific page numbers indicate several sep-
arate references on two (31f) or more (31f£) pages. Ttie index is thematic so that entries
sometimes refer to a relevant tlieme rather than an exact use of a given word, concept or
phrase. Authors are indexed only when they are directly quoted or discussed at length, not
when they are simply cited in support of one or another argument.

abstraction, as methodology 3f, 12, 15, 19, agglomeration economies 101,109ft, 181,
41f, 65, 67,74,142, 224-5, 249-50 191f, 256
academic capitalism 166 alliance strategies 184,187,191-2, 214
accumulation, as dominant principle of Althusser, Louis 280
societalization 22-3,27, 32f anarcho-capitalism 237
see also capital, capitalism antagonism 85, 278
accumulation regime 3, 4, 5f, 22, 30, 34, 44, appropriateness, logic of 8
56, 74, 80, 97,140, 147,168,217 art, as functional system 8
accumulation strategy 6, 2 9 , 3 0 , 4 4 , 7 3 , 81, Asia, see East Asia
93, 98,102,124,133, 223,250,263,267, Asia-Europe Meetings 115
279 Asia Pacific Economic Cooperation
and economic hegemony 30 115
knowledge-based economy as 150, Atlantic Fordism 2, 8, 9, 24, 4 0 , 4 3 , 4 8 , 50,
167 55-8, 67, 70, 72, 74, 82, 84, 95, 97, 99,
and spatio-temporal fix 49f 101,104f, 112,119,123,125f, 133, 140,
active labour market pohcies 125, 154, 144f, 149f, 154,172,174f, 178,180,183,
155-6,159,261,282-3 197, 205,216, 231-6,250, 257, 269,
added value 13,15, 24,170,277 279-80, 283f f
see also valorization crisis of 2, 74, 82-90, 95,104,134ff, 195,
Africa 183,253 197, 219, 231-2, 249-50,267, 280
after-Fordism 171,283 governance in 231-6
see also post-Fordism labour process in 56, 84
age and welfare 9 0 , 1 5 6 , 1 5 9 , 1 6 5 , 2 8 3 mode of growth 56
see also generation, pensions mode of regulation 57
 Index 313

mode of societalization 57-8 see also accumulation regime,

pensions in 160 accumulation strategy, valorization
austerity 143, 267 capital in general 13,29f, 41, 46, 53, 148,
see also cost containment, retrenchment 169
Australia 55, 58, 86,142, 259, 280 capital-labour relation 1 1 , 1 2 - 1 3 , 1 5 , 31-3,
Austria 58,280 44f, 58, 77, 82, 88, 234, 238,271, 278
authoritarian populism 176 capital-theoretical approach 12,147
autonomy, operational 41,194f, 203, 219, capitalism 11,12, 1 5 , 1 8 , 7 3 , 1 1 0
238 competitive 224
autonomy, relative 35,194, 227, 279 coordinated 49, 68,161, 205, 218, 224
autopoiesis 5, 8, 28, 34,277 as economy of time 15,16-17, 278
informational 112, 129
B2B 8 7 , 1 0 0 , 1 0 8 laws and tendencies 278-9
B2C 87,100,108 organized 221,235
Baden-Wurttemberg 101,185,191 regulated 2 0 5 , 2 6 2
balance of forces 6,39f, 6 5 , 6 9 , Blf, 86f, 92, uncoordinated 171,218,224
94f, 148, 151, 168, 199-200, 203, 205, see also law of value
242, 249, 259, 267 capitalist mode of production 1, 3, 8, 11,
Baumol effect in services 99 16,53,218
Belgium 106, 174, 280 capitals, particular 13, 29f, 41f, 46, 53,148
Bell, Daniel 110,129 earner force in long waves 84,128, 282
benchmarking 1 4 , 1 0 9 , 1 0 1 , 1 1 6 , 1 4 3 , 1 6 2 , Cascadia 198
165, 208,272 Castells, Manuel 237,240,282
Beveridgean welfare state 285 categories, economic 3, 12, 34
Biernacki, Richard 69 centralization of capital 278
Bismarckian welfare state 280, 285 Cerny, Philip G. 281
Blair, Tony 266 charisma 41
Bonoli, Giuliano 67,158,160 child care 14,147,161
bounded rationality 227, 229, 237 China 102,183,185
Bowles, Samuel 12 circuit of capital 8, I S , 18, 21,23f, 26,28,
Boyer, Robert 6, 57, 69 3 5 , 4 9 , 7 3 , 83, 98,104,108,120,147,
breadwinner welfare models 62f, 65-6, 72 149,279
Britain 25, 47, 58, 70,106,142, 166, 174, and primacy of productive capital 23f
177, 204, 210, 244-5, 259, 283 see also fractions of capital
bureaucratism 58, 87, 90,230,235 citizen wage 262
business association 72,176,200, 234, 261 citizenship 40, 59f, 66,71f, 79,150,162ff,
business cycle, 30,76, 8 0 , 1 1 9 , 1 2 3 , 1 4 5 , 1 6 4 176,228,234
political 30,145 duties 38
participation 144
calculation, modes of 5 , 1 7 , 2 5 , 2 7 , 29, 33, regimes 72,79
4 1 , 1 0 9 , 1 1 7 , 1 3 2 , 1 3 9 , 1 9 4 , 227, 267, rights 4 4 , 7 2 , 7 5 , 7 7 , 1 4 1 , 1 5 0 f
272 see also human rights, welfare rights
Canada 55, 58, 65,174, 253, 259, 280 city 4 9 - 5 0 , 1 1 9 , 1 3 9 , 1 8 6 - 7 , 1 9 8
capital, crisis in/of 87f
as invested assets 170 entrepreneurial 102, 172, 186,189
as object of regulation 18-20 global network 50,102,114, 180,186,
as social relation 4, 5, llff, 16, 21, 48, 189, 235
120, 170 inner 88f, 191
capital accumulation 3, 9f, 17 reflexive 186,188
improbability of 1, 4f, 11,18, 53,75, world vs global 180
250 see also urban policy
314 Index

city-region 1 8 6 , 1 9 1 , 235, 251 see also c o l o n i z a t i o n

civil s o c i e t y 6 , 8 , 9 , 1 2 , 3 2 , 35ff, 6 1 , 1 4 9 f , commoditization,
176, 219f, 2 2 2 of e d u c a t i o n 167
global 9,115 of k n o w l e d g e 131
see also l i f e w o r l d , p u b l i c s p h e r e c o m m o d i t y form, generalization to labour-
class 49, 2 7 8 power 12-13, 36
class analysis 32,278 see also capital, c o m m o d i f i c a t i o n ,
Ricardian vs Marxian 64 fictitious commodity, knowledge,
class b e l o n g i n g 31 labour-power, land, m o n e y , value,
class c o n s c i o u s n e s s 3 1 , 35 wage form
class-divided society 21,211,239 c o m m u n i t a r i a n i s m 68, 2 5 9
class d o m i n a t i o n , political 194 see also n e o c o m m u n i t a r i a n i s m
c l a s s i n t e r e s t s 31f, 35 c o m m u n i t y , i m a g i n e d 89, 1 7 3 , 2 1 7
and d i s c o u r s e 35, 86 community involvement 144,159,165
class relevance 17, 3 1 f , 3 5 comparative advantage 119,186,189, 282
class struggle 15f, 17ff, 2 0 , 3 0 , 3 1 ^ , 3 5 , 38f, competition 9,12,19,24, 30,278
8 2 , 87f, 9 0 , 226f, 267, 2 7 6 e c o n o m i c 1 6 , 1 9 , 4 2 , 69f, 1 1 3 , 1 1 9 , 1 3 7 ,
a n d s t r u c t u r a l f o r m s I S , 34, 3 6 183
class-theoretical approach 12,147 international 163
Cleaver, Harry 279 oligopolistic 149
c U e n t e l i s m 87, 2 0 5 party political 79, 88
Cloward, Richard 145 r e f l e x i v e 1 2 3 , 188
c o - c o n s t i t u t i o n 3 , 9 , 11, 1 0 3 , 1 3 4 , 2 3 1 , 2 4 5 , regional 107,109,124, 138,153, 214
268, 285 scales of 187f
code, operational 8, 29, 31, 33, 226, 228, ' Schumpeterian 96,205,248
277 spaces of 181, 184,192f
c o e r c i o n , see e x t r a - e c o n o m i c c o e r c i o n strong vs weak 1 0 9 - 1 0 , 1 9 0 , 1 9 2 , 241
c o - e v o l u t i o n 3 , 5 , 2 5 , 2 8 , 3 4 f f 4 8 , 58, 6 3 , subjects of 187f
70, 75, 1 1 7 , 1 3 5 , 1 4 1 , 1 4 5 , 2 5 0 , 268 urban 109,124,138,153, 200
c o h e r e n c e , s t r u c t u r e d 5f, 10, 48ff, 5 4 , 67, competition policy 236
7 2 , 7 4 f , 1 0 0 , 1 0 1 , 1 7 0 , 178f, 184, 192, c o m p e t i t i o n state 9, 9 6 , 1 2 4 , 1 3 4 , 281
203, 234-5, 255-63 local 200
Cold War 183,197, 280 national 111
c o l l e c t i v e b a r g a m i n g 58f, 6 4 , 76ff, 79, 1 0 1 , neoliberal 132
145, 2 3 4 Schumpeterian 9 6 , 1 1 9 - 3 1 , 1 3 4 f , 192,
collective c o n s u m p t i o n 9, 2 1 , 5 8 f , 7 7 f , 89, 211, 248
101, 136f, 141, 143f, 1 4 8 , 1 4 9 , 1 5 2 , c o m p e t i t i v e a d v a n t a g e 6 6 , 9 6 , 100, 1 0 8 ,
1 6 2 - 8 , 197, 2 4 8 , 2 5 6 , 2 7 2 , 2 8 1 119,129,187f, 282
c o l l e c t i v e l a b o u r e r 1 3 0 , 168 d y n a m i c v s static 1 2 1 , 2 6 3
collibration 53f, 2 4 0 - 1 , 2 4 6 competitive capitalism 224
Collinge, Chris 54,179, 202 c o m p e t i t i v e n e s s 2 4 , 36, 4 3 , 5 1 , 8 3 , 1 5 3 , 1 6 4 ,
colonization of systems and lifeworld by 1 7 7 , 1 7 9 , 1 8 6 , 252, 281f
capital 27, 29f, 32, 109, 1 1 5 , 1 1 7 , 1 2 4 , extra-economic 103,107,132
1 6 3 , 1 6 7 , 208, 226, 233, 267, 2 7 2 international 91, 201, 214, 255
see also c o m m o d i f i c a t i o n , e c o l o g i c a l Ricardian 153
dominance, lifeworld spaces of 117,119,136,181
Comecon 184 structural and/or s y s t e m i c 1 0 8 , 1 1 0 , 1 1 9 ,
commercial capital 15,24,100,105,122 124,128,137,153,183,187,189,196f,
commodification 1 5 , 1 9 , 27,29f, 32, 45, 47, 214, 2 3 2 , 2 5 1 , 253, 256, 261, 253, 265,
1 0 4 , 1 2 0 , 1 4 6 , 208, 218, 275 281
of knowledge 45,120,129f, 271 supply-side 206
 Ind^e x 315

complementarity, structured 190-1 principal vs secondary 34, 48, 75-9, 83,

complexity 7,11, 26,41, 53,172,180, 217, 91, 104f, 112,132,140,217, 280
229, 233, 239-40 reproduced through struggle 16f
and charisma 41 coordinated market economy 49, 68,161,
methodological 12,42 205, 218, 224
compromise 6, 21, 30, 36,49, 87,105 see also corporatism
see also institutionalized compromise corporatism 9, 42, 51, 65, 69, 72, 77f, 105,
concentration of capital 278 159,169, 206, 218, 221-2, 224,239,244,
concept of capital, money vs productive 253, 259
68f, 70,104 crisis of corporatism 87, 221,235
concertation 9,141, 216, 220, 263 periodization of 221-2
see also corporatism see also concertation, negotiated
concrete analysis, see abstraction economy, neocorporatism, social pact,
condensation of balance of forces 6 tripartism
see also form determination, cost containment 9, 85,158f, 168, 251, 272
institutional materiality, strategic see also retrenchment
selectivity countertendencies 7, 22, 27,114,224, 249,
Confucian capitalism 284 259
conjuncture 17f, 27f, 32, 35, 47f, 81, 142, coupling, structural 3, 25, 28, 34ff, 58, 63,
168, 259 68, 7 0 , 7 5 , 1 1 7 , 1 3 5 , 1 4 1 , 1 4 5 , 224, 250,
management of 47 268f
connective bargaining 101 credit 24, 57, 78, 80,101,106f, 126, 279, 280
see also collective bargaining crisis 9 , 2 8 1 , 4 9 , 5 2 , 5 8 , 8 0 - 9 0 , 92f
conservation-dissolution effects 97, 124-5, Africa 183
143,170f, 201, 251, 258, 269, 275 and discourse 74, 92-3, 124
see also periodization East A s i a 108, 125,137,183,255
consociationalism 174 economic 44,73f, 81-4, 216
constitutive incompleteness of capital environmental 84,88,117
relation 18-19, 23, 26, 36,43f, 48, 51, fiscal 84-5, 89, 99,136,173, 175, 226,
73,193, 226 275
consumerism 188,280 Fordism 2, 74,82-90, 95, 104, 134ff, 195,
consumption 13, 46, 8 3 , 1 0 2 , 1 2 2 , 1 8 8 , 2 1 9 , 197, 219,231-2, 249-50,267, 280
277 Japan 182
norms, 5, 13, 46,159, 219, 277 in/of 2, 70, 74, 81-2, 91f, 94, 97,124,137,
privatized 88 142f, 153,163f, 216
see also collective consumption, mass institutional 177
consumption KWNS 70, 80-94,157, 231-2
context steering, see decentred societal Latin America 183
guidance legitimacy 94,175,177, 226, 240,175
Continental dilemma 155 national money 106
contingency 6, 8, 36 national state 8 9 , 1 7 5 - 6 , 1 9 3
contradiction 9,14,16,18f, 21, 27f, 34, 45, organic 175,177
73, 85, 91f, 103-11,146,169f, 217, 220, party system 140,176
222, 226, 273, 277-8 political 87-8
fundamental contradiction as rationality 226
socialization of production vs private representational 176f, 240
ownership and appropriation 45, as steering mechanism 49, 52, 73f, 82
104f, 273 of US hegemony 83,175,195
contradictions crisis-management 26, 50f, 58, 82, 93, 95,
primary vs secondary aspects of 48, 75f, 134,211,270
78,81,83, 104f crisis of 92
316
crisis-tendencies 2, 27, 34, 73, 92, 95,103,
120,135f, 140,172,175, 231-2, 235,
249, 270, 274
critical discourse analysis 5, 6-7, 34
critical realism 5, 142, 255
and ideal types 255
and tendencies and countertendencies
34
cross-border flows 96, 106f, 126
cross-border regions 51,114,172,179,
180-1,182-S, 188ff, 213, 267,274
crowding out 151
cultural nation, see Kulturnation
currency, 20f, 78-9,101,106ff, 125, 138,
183
master and/or hegemonic 183
see also money
curriculum design 165,167
cyberspace 108,130,179,192, 271, 283
cynicism 245
Czechoslovakia 185
Deacon, Bob 201,208,264
debordering 181
debt 38, 81
decentred societal guidance 52,199,228,
236, 239, 263
decision trap 202
decommodification 62f, 147, 263
deferral ot contradictions 26, 34, 51, 73,
78,118,120, 122, 220, 226,238
see also spatio-temporal fix
deindustrialization 99
deliberalization 262
Delors, Jacques 205
demand management 57, 59,72,76ff, 81,
83,145, 154, 205,231-2,256
democracy 40, 163, 183,212f, 223, 226
associational 22
capitalist 9
and education 1631
demography 90,145,160
see also age and welfare, generation,
pensions
denationalization of civil society 89f
denationalization of state 162,195-8, 204,
211f 252, 263
see also interscalar articulation
Denmark 5 8 , 7 0 , 2 0 4 , 2 8 0
deregulation 106,138,186ff, 236, 241, 262,
264
lex
destatization 158,199-200,211
see also government to governance
detemporalization 45
determination
economic 2,11, 23f, 35, 83, 249
in last instance 2, 11,23, 26, 35
technological 23, 35
see also ecological dominance,
overdetermination
deterritorialization 19, 45, 90, 106, 149-50,
193f, 195f 199, 274
devaluation 80, 183
developmental state 193, 218, 284
diaspora 173,175, 235
dictatorship 37,40,145, 223
difference, politics of 90, 283
dilemma 9,14,18, 21, 27f, 32, 45, 47, 73,
85, 91f, llOf, 146,169f, 238, 278
dimensions of state 42, 70
dirigisme 64, 218, 243
discontinuity 255-7, 259
see also conservation-dissolution effects
discourse 7, 23, 47, 6 0 - 1 , 1 3 2 - 3 , 141,147,
179, 244-5, 258, 267, 282
' and class identity 35
competitiveness 30,45, 86,108f, 121,
124,132,153,164,190f, 263,272
and crisis 74, 92-3, 124
and economy 7, 4 5 , 7 1 - 2 , 86f, 103,120,
122,132,166
and the extra-discursive 7
framing 47,140ff
and general interest 220
and globalization 7,117f, 133,146,179
and knowledge-based economy 126,
250, 267
market failure 18, 31, 276
national security 60f
naturalization 13, 37,43, 6 0 , 1 8 2 - 3
and post-Fordism 97,102
role in ecological dominance 11, 25
and state boundaries 37
and statecraft 41
and strategies 36
discursive selectivity 93, 281
disembedding 108,118,125
see also embeddedness
displacement of contradictions 26, 34, 54,
73,118,120, 220
and corporatism 221-2
see also spatio-temporal fix
 Ind e x 317

diversified quality production 99 urban 182

division of knowledge 199 see also capitalism, integral economy,
division of labour 15, 64,141, 221-2, 237, mi.xed economy, narrow economy,
249, 277f scale
gender 66f education 8,14,29, 46, 63, 69, 88f, 114,
global 117,195, 249 141,143,145,149f 152,158,162-8,
international 58, 66,115 1961, 200,207, 211, 251, 256, 261, 264,
regional 181f, 184 280
scalar 50ff, 71f, 117,178, 181, 190-1, 209, in Atlantic Fordism 172
239 crisis in 163
social a n d technical 15, 56, 239 nation-building 152,163f
spatial 52,117,181 education policy 186, 207, 256
temporal 51f, 117 Edwards, Richard 12
see also world market electoral cycles 51, 75, 80
domestic labour 47,79, 147, 234 electorate 40, 88, 140, 144, 146, 151f, 155,
dot.com b u b b l e 24,107 176
dual state 173 embedded liberalism 209
Dunsire, A n d r e w 53 embeddedness 5ff, 21, 23, 66, 108, 110,
118,189,192,213, 217, 241, 251, 261,
East Asia 60,63f,84,115,131,134, 137, 268
145,178,181,184,186,198, 218,253, employability 133, 154, 156,1641,210
255,283f employment, .see flexibility, full
Ebbinghaus, Burkhard 68,147 employment, labour market, part-time
ecological dominance 11, 23,24-8,29f, 33, employment, policy, wage
35, 65, 67, 103,114,117,127, 167,194, employment policy 154
249f, 260, 268, 279 see also Keynesianism
and discourse 11, 25 Enron 245
and globalization 11 enterprise culture 109, 127f,251,260
ecological relation 26 enterprise form 57, 9 8 , 1 0 0 - 1 , 216f 233,
ecology 247 278-9
of instituted systems 8 enterprising subject 14f, 156, 162, 165,168,
economic development strategy 166,191, 233,251
200 entrepreneurial city 102,172,186,189,
economic domination 23, 28-30, 65, 83, 234, 263
268 entrepreneurial region 172
see also fractions of capital, hegemony entrepreneurial state 127f
economic hegemony 30, 33 see also competition state
see also accumulation strategy entrepreneurial university 166
economic policy 9 , 3 1 , 4 3 , 82f, 107, 127-8, entrepreneurialism 110, 128, 133,192-3
147f, 152,186,196, 207, 234, 260 entrepreneurship 20, 120, UI, 188-9,257
economics of information 111 environment 80, 84, 88,117
economism 2 , 1 1 see also nature
see also determination Espmg-Andersen, G0sta 61-3, 68, 93,145,
economy 8,114,196 147,280
Continental 253 ethical dimensions of hegemony 6
local 72, 82f, 176,179, 183f, 235 ethnic identity 71,141, 148f
national 7, 4 3 , 1 4 9 , 1 7 5 , 231-2, 235 see also Volksnation
plurinational 43,180 ethnic minorities 128
regional 7, 72, 82f, 176,179,182,184, ethnicity 4
235,253 Etzkowitz, H e n r y 167
social 222 Eurocorporatism 206
 318 Ind.e x

E u r o p e 7 1 , 1 0 2 , 1 1 5 , 264-6 family wage 72,84,234

E u r o p e of the regions 187, 210 fataUsm 245
E u r o p e a n F r e e Trade Association 184 feminization of workforce 176
E u r o p e a n integration 205 fictitious commodity 4, 11,13,16,19,21f,
E u r o p e a n Monetary Union 206, 253, 264 33, 43, 45, 104, 141f, 147, 150, 219,225
E u r o p e a n R o u n d Table 167 see also commodity form, knowledge,
E u r o p e a n social policy 61, 206 labour-power, land, money, n a t u r e
see also Social E u r o p e finance capital 83, 100, 104, 106f, 118, 122,
E u r o p e a n Union 43,176,180, 182, 184, 146,153,219
187f, 191f, 197, 200, 202, 205,252-3, see also money capital
264-6 finance-industry relations 68f, 83, 91,105
as governance regime 209f see also varieties of capitalism
Europeanization 209, 235, 253 financial services 100, 161
evolutionary economics 4 Finland 280
exceptional state 223 fisco-financial system 84ff, 143,148,156,
exchange 5, 12-13, 52, 81, 216 159, 223
see also market, m a r k e t forces, price crisis 84-5, 89, 99,136,173,175, 226
mechanisms flanking measures and strategies 206, 220,
exchange-value 15,16-17, 20, 38,104,107, 238,265-6
111,1171,263, 279 flexible mass production 99
see also commodity form, market, flexible specialization 68, 97, 99,134, 263
use-value, value flexibility 76, 83, 98f, 101,110,126, 130,
exploitation 1 2 - 1 3 , 1 5 , 1 7 , 1 9 , 4 6 , 1 2 9 , 225, 133,155,167, 244,250,260, 263
278 labour m a r k e t 25, 76, 83, 87,154ff, 162f,
export strength 68, 280 1 6 5 , 1 6 8 , 1 7 0 , 2 0 7 , 2 1 0 , 2 5 1 , 260f, 272
exports 58,68 in public sector 144
extra-discursive p h e n o m e n a 4, 7 in wage form 155
extra-economic coercion 28, 36ff, 222-3 flexicurity 156 f
extra-economic as supplement to the flexploitation 156,159
economic 9 , 1 1 , 1 4 , 1 8 - 1 9 , 2 3 , 2 8 , 3 3 , Fordism
35f, 45ff, 48, 86, 95,103f, 108f, 119,123, transition to post-Fordism 84,126,134f,
132,141f, 1 4 6 , 1 5 0 , 1 5 3 , 1 8 3 , 1 8 9 , 1 9 3 , 249, 268-9
209,216,219,226, 251,265,279 see also Atlantic Fordism
see also constitutive incompleteness of foreign direct investment 191
capital relation, institutional foreign trade 71, 78,182,281
separation of economic and political form analysis 1-2, 4, 37
extra-territoriality 27 f o r m determination 6, 37, 70, 95, 195
form problematizes function 4, 35, 41, 81
factor-driven growth 183 F o u r M o t o r s Region 185,191
factors of production 64,121,218, 282 fractions of capital 15f, 28f, 49,69f, 104f,
e n d o w m e n t of and comparative 112,118,250
advantage 119,186,189, 282 see also circuit of capital, concept of
fair trade 262 capital
Fairclough, N o r m a n 7 France 58, 64, 210, 280
famiiialism 62ff, 65 free enterprise zone 191
family 14, 36f, 47, 59, 62,64f, 72, 84,176, free trade 183ff, 191,196, 262
234 freedom, formal vs substantive 218-19,
crisis in family form, 88 284
see also domestic labour Friedman, Milton 258
family capitalism 68 full employment 9, 57, 59, 61,76ff, 82, 86,
family policy 85 145,165,175f, 197, 234, 255, 257, 261
 Inde> 319

in European Union 208, 210 governance failure 231, 236-40,242

see also policy (employment) see also metagovernance failure
functional systems 8, 114,141, 196, 228, government to governance 199f 203, 209f,
233, 261 217,284
functions of state 2, 44f, 132,195, 216 vs governance 193,194
primacy of economic functions in see also destatization
SWPR 132 government to metagovernance 202-3,
217, 242, 252-3,254, 258
Gatesism 97 Gramsci, A n t o n i o 5, 6, 8,23, 37, 40, 50
gender 4, 32, 37, 47, 65, 89,141,148f, 174, Grande, E d g a r 41
234 Greece 40,145
and welfare state 147 growth triangle 191
general conditions of production 43, 45
general external conditions of production Habermas, Jfirgen 277
42f, 45, 223, 271 Hall, Peter A. 68, 147
'general interest' 30, 37, 220, 228 Hay, Colin 284
generation 46f, 53, 65, 90,160 Hayek, Friedrich von 225, 258
George, Vic 67 health policy 207
G e r m a n y 47, 58, 70, lOlf, 106,137,173, health system 29, 63, 90,143,149f, 152,
177,280 158, 207, 251, 261, 264
Nazi G e r m a n y 72 A m e r i c a n 152
global city 50,102,114,180,186,189f E u r o p e a n 152,207
global culture 183 global 264
global localization 116 hegemonic bloc 6, 8, 33
global state 172,196-7 see also power bloc
globalization 9, 22, 28, 36, 44, 51,102, 106f, hegemonic project, see hegemonic vision
113-18,123, 126, 135,146f, 152,162, hegemonic vision 39,42, 44,49, 73, 81, 93,
164,168,174,180f, 183,193,195, 203, 98,175,177,223,267
212, 229,232,245, 264, 267 hegemony 6 , 7 , 27, 30, 33, 55, 69, 73, 93,
and neoliberalism 22, 28, 70, 91, 96,114, 176,220
118, 129,146,153,182,195 American 57, 711, 79,175,195,197, 219
and regionalization 150,203, 212 bourgeois 23, 31, 263
a n d welfare s t a t e 146 and discourse 7, 92f, 250
see also world market international political 55,197
glocalization 114,189-90,282 neolil)eral 219
glurbanization 114,117,135,189-90 regional 181, 184, 253
Goodin, Robert 68 heterarchy 52, 221, 228,237
governability 239 see also governance
governance 5 , 1 0 , 1 1 , 1 8 , 51-3, 63, 64,103, Hicks, John 78-9
108, 120, 148f 193, 199, 217 hierarchy 52,216
chronotopic 52,180,190 see also governance, imperative
cycles 222,224,245 coordination
and education 166 Hirsch, Joachim 281
global 115,183 historical bloc 6, 23, 35,63
material bases 217-24 historical materialism 3
objects of 8 1 , 1 1 7 , 2 3 1 - 5 historical specificity 2,12f, 7 2 - 3 , 1 4 8 , 255
in shadow of hierarchy 202, 241, 243 'hollow c o r p o r a t i o n ' 212
see also corporatism, international 'hollow state' 212
regime, metagovernance, mixed 'hollowing o u t ' 235,254
economy, network, partnership, see destatization
statism H o n g Kong 282
 320 Index

H o o g h e , Liesbet 196,198 information and communication

horizon of action 5f, 7, 30,49f, 80, 84f, 132, technologies 98ff, l l l f , 1 1 7 , 1 2 9 , 1 3 1 ,
138,190,227, 229-30, 274 164, 212, 237
spatial 30, 34, 43, llOf, 115ff, 138,190, informationalism 99,102,129, 237
194 infrastructural policy 43, 59, 77f, 186, 188,
temporal 14, 30, 3 4 , 4 3 , 1 0 9 , 1 3 2 , 1 3 8 , 197, 207, 232, 256, 263, 272
194, 227, 229-30, 274 inner cities 88f, 191
housing 57, 63, 85, 88f, 143,148f, 191, innovation 8 3 , 9 6 , 99ff, 106, llOf, 113,
264 1 2 0 - 2 , 1 2 7 , 1 3 0 , 1 8 3 , 1 8 8 - 9 , 243, 250,
Huber, Evelyne 60, 63, 68, 91,147,151, 258, 278, 282
160 and competition 123, 126f, 132
H u l s e , Michelle 201,208 vs management, invention 120
h u m a n capital 46, 49, 158,163ff innovation milieu 108,111,263
h u m a n rights 32, 229 innovation policy 83, 85, 96,127f, 256, 263,
Hungary 185 265, 272
hypermobile capital 83,104,108,112,146, innovation rents 83, lOOf
194 innovation systems 110, 130, 136f, 256, 260
instituted economy 110,115
ideal t y p e 2, 55, 74,135,154, 250, 254-9, institutional attractor 224, 229
285 institutional design 115, 128, 142, 214,
identity 25, 30f, 35, 90, 142,173,229 227f, 234,242, 246
class 31, 33 institutional economics 4,133, 267
national 8 9 - 9 0 , 1 0 2 , 1 6 2 , 1 6 4 , 2 1 2 , 234 institutional ensemble 6, 277
non-class 30f, 35 institutional limits to welfare state reform
politics of 102, 175 85,150,168
regional 117 institutional materiality 7
ideology 18, 23, 30, 35, 38, 178, 203,205f, see also strategic selectivity
211,218, 221,224 institutional separation of economic and
and class 278 political 35, 36, 38, 41, 43, 219f, 222-3,
imaginary 7, 73 238
economic 7. 37, 73,119f, 136, 180, 219, institutional thickness 109,117,180,187,
232 241, 263
general interest 30, 37, 220, 228 institutionalism 3f, 279
political 7, 37, 40,136, 219 institutionalized compromise 21, 30, 36,
imagined community 89,173, 217 49, 74, 77ff, 80, 85, 87f, 9 1 , 105, 140,
immigration 79f, 90,176,188 152,163, 234
imperative coordination 9, 52, 222-3, 236, institutions 7, 34,140,180, 279
254 and competition 189
imperialism 25, 43, 72, 221 a n d struggle 34-5, 41
i m p o r t substitution industrialization 60, insurance, social 62f, 6 7 , 1 4 1 , 1 4 8 , 1 5 2 ,
178 154
i n c o m e polarization lOOf, 137 integral economy 2 - 3 , 5,135-6, 216, 222
indicative planning 149 integral state 6,239
industrial capital 83,105 intellectual commons 20f, llOf, 124,129f,
see also productive capital 168,284
industrial policy 83, 196f, 205 intellectual labour 39, 99,129f, 167, 271,
industrial relations 70,101,280 278
inflation 24, 77, 79, 8 5 , 1 0 7 , 1 2 2 , 1 4 5 , 1 5 5 , intellectual property 20f, llOf, 129-31, 138,
161,175,183,197,231,261,267 166, 219, 273, 282
price vs asset 107, 256 intellectuals 6, 39, 50, 93f
see also stagflation organic 6, 63
 inalex
intelligence, organized 223, 242f, 254, 262f
interest, material 30, 111
interest (as revenue source) 2 1 , 8 1
interiorization (class) 82
intermestic relations 196, 200, 262, 284
International L a b o u r Organization 252,
264
International M o n e t a r y F u n d 158, 205,
252, 259, 264
international regime 50, 55, 60, 78, 102,
115f, 126f, 138, 178, 197, 203, 273f
internationalization 81f, 113,114f, 203,
232, 235, 260, 264
of capital 105,126,213
economic policy 208
of policy regimes 91-2,158, 2 0 0 - 1 , 208,
211
see also globalization, relativization of
scale
Internet 100, 107f, 281
and productivity 99, 281
Interreg 185
interscalar articulation 45, 50f, 60, 71, 83,
112f 116,118,170f, 179, 191, 194, 197,
201, 212, 235, 253,269f, 274
s t a t e r o l e in 194,2021,212-14,274
see also denationalization of state, nodal
scale, relativization of scale, scale
intervention, see state intervention
invention 120
see also innovation
investment 15,76,78
irony 245-6
Italy 101,137, 205, 280, 283
J a p a n 61, lOlf, 131, 137, 181,184f, 253,
280, 283
job rotation 156
jumping scales 214,274
juridico-political 6, 23, 35, 87
Kalecki, Mihaly 145
Kaufman, Franz Xavier 47
Keynes, John Maynard 120,122, 257
Keynesian competition 183
Keynesianism 76, 81, 145,154, 205,231-2
E u r o p e a n 125,281
in o n e country 91
international 125,255
see also demand management, full
employment
321
knowledge 1 2 , 1 4 , 2 0 , 39,129,166, 218,
228, 282
as factor of production 97,105, 166
as fictitious commodity 14,19, 21,129
reflexive 99,123
see also intellectual commons,
intellectual property, intelligence,
wetware
knowledge-based economy 9f, 24, .36, 96ff,
99, 102f, 108f llOff, 123f, 126-34,141,
150,152,162ff, 166,168, 194, 209,
232-3, 250, 256, 261, 263-4,267f, 272
and state 129,272
knowledge-intensive prodticts 101,126
knowledge workers 99, 111, 122,129ff 183
%ee also intellectual labour
Korea, South 28,184, 283
Kuhnle, Stein 207
Kulturnation 173,281,285
K W N S 2, 5, 6, 8-10, 21, 43, 58-68, 78f,
102f, 106,123, 135ff, 142, 147,150,
153ff 169f, 1741,177,197, 211, 204,
215, 231-6, 248-9, 275-6, 291
a n d collective consumption 77,162
contrast with S W P R 255
and education 162
role of international regimes 57, 71
and national state 71-3
as state project 211
uneven development of 144
varieties of 10, 55
labour of division 141f
labour m a r k e t 1 1 , 1 2 - 1 3 , 2 5 , 45f, 161,164,
240
dualism 159
segmentation 25, 79,136,159, 234, 279
transitional 157
labour market policy 43,138, 141,170,
197,207,251,256,282
active 1 2 5 , 1 5 4 , 1 5 5 - 6 , 1 5 9 , 2 6 1 , 282-3
passive 154,282-3
labour-power 4,11-12, 14-15, 20ff, 118,
141,146, 218,278
as abstract value 20f
as creative 20f, 46, 69, 105, 146,168,170
as factor of production 20f, 46,48, 69,
118,146,170
as fictitious commodity 4 , 1 1 - 1 6 , 1 9 ,
43ff, 46, 53, 59, 63,142,150f, 216, 225,
250-1
322 Indlex

labour-power cont. market 1,9,122

as fixed vs variable cost 106 dominant position in 28f
labour process 13, 45, 98,140,147, 272 forces 9, 15f, 19, 2 4 , 2 7 , 3 6 , 7 3 , 1 1 2 , 1 4 1 ,
and Fordism 56, 84 187f, 236, 276
and post-Fordism 98ff, 273 liberal 149
in state 74f, 233 m a r k e t economy 220
see also production market failure 19, 2 1 , 2 7 , 3 0 , 43, 111, 141,
labour standard 78-9 225-6, 235, 248, 258
labour unions, see unions m a r k e t inadequacy 225-6,230, 236,254
Laffer, A r t h u r 258 m a r k e t proxy 2 9 - 3 0 , 1 4 6 , 1 5 8 , 1 6 2
land 1 3 - 1 4 , 1 9 t t 271 m a r k e t society 220
renewability 14, 21 Marks, Gary 196, 198
see also nature Marx, Karl 1,3, 7 , 1 3 , 1 6 , 1 4 1 , 278-9
Latin A m e r i c a 60, 64,183f on circuit of capital 8
law 8, 39, 42, 45, 89,114,196, 271 on freedom 219
law of value 16-17, 24, 38,116,118 on method 249
learning 14, 25, 27, 36, 74,110,164,192, on self-valorization 7-8
199, 203, 236 Marxism 3, 8, 23, 34,269
by doing 282 mass consumption 55, 58, 60,77ff 83,105,
institutional 74 130, 183, 280
organizational 36, 74 mass education 14, 163
strategic 278 mass media 41, 50, 93
see also reflexivity mass production 56f, 59f, 77, 83,98f, 105,
learning society 32 130,132,197, 261
legitimacy 7 , 3 7 , 2 2 1 , 2 2 3 rnass society 74, 95,101,163
state 37, 43, 51, 54, 9 4 , 1 3 2 , 1 4 0 , 1 7 1 , 2 1 2 mass worker 56
liberalism 48, 64, 205, 210 means-testing 62, 87,144,155,159, 161f
characteristics 218 mediation 12,15f, 19, 24f, 47, 50,112,187f,
liberalization 138, 236, 273 220,249
lifecourse 32, 46,156, 234 melting pot society 173,175
lifelong learning 164f mental labour, see intellectual labour
lifeworld 8 , 1 1 , 23,25ff, 30f, 33, 35, 50,109, mercantilism 60
114f 117,124,141, 217,220,229,233, mesopolicies 43-4,176
247,249,267,277 Messner, Dirk 4 3 , 1 1 9 , 2 3 3 , 281
vs systems 277 metaexchange 240-1
see also civil society, colonization metagovernance 10, 50, 52-3, 115, 130,
Lipietz, Alain 279 202-3, 208-10, 217, 238-9, 241-3, 254
List, Friedrich 120 m e t a g o v e r n a n c e failure 10
Listian competition 121, 183f metaheterarchy 241
Listian Workfare National S t a t e 134, 285 metanarratives 94
local internationalization 114 metaorganization 241
local state 60,198,201 metapolicies 43
locational policy 138,273 metasteering, see metagovernance
long waves 30, 84, 95, 282 Mexico 65
Luhmann, Niklas 8 m i d d l e class 87
on ecological dominance 279 migration 76,175f
labour 150,176,188,234
macropolicies 43 militarization 32
Majone, Giandomenico 206 military 3,102,196,247, 256
Mao, Z h e - D o n g 280 military-industrial complex 25, 256
Manow, Philip 68,147 minimum wage 154
 Indilex 323

mixed economy 9f, 16, 44,59, 61, 64, 71, nation-state 1 7 3 - 5 , 1 9 3

16,129,137,162,235,248 see also national state
crisis of 44, 216 national identity 89-90, 102, 162, 164, 212,
of welfare 162,168 234
mobility of capital 29,194,256, 273f crisis of 102
m o d e of governance 21 national-popular 39f, 72,176f
m o d e of growth 56f, 99,205 national security state 2 2 , 2 8 , 60f, 178,193
m o d e of regulation 4, 6, 21f, 34, 44, 46, 56, national state 7, 9 , 1 1 , 47, 50, 60, 7 1 - 3 , 1 0 6 ,
74, 80,140,147, 205, 285 1 4 6 , 1 4 9 , 1 7 3 - 5 , 1 9 5 - 9 , 211-13, 255
and spatio-temporal fix 50 see also denationalization, KWNS,
m o d e of societalization 56, 57-8, 88 national security state
m o d e r n state 222 nationalism 117
monetarism 91, 133 natural economic territory 182-3
m o n e y 13-14, 20f, 3f, 42, 45, 48, 75, 78f, naturalization 13, 60
81, 83, 89, 170, 223, 228, 240,256, 279 nature 13-14,20, 80, 219, 273
as capital in general 20 material transformation 13,15, 20
as currency 20f,78f, 83,170 negative coordination 228f, 243
as fictitious commodity 14, 19 negotiated economy 64, 204, 218
in Fordism 48 neocommunitarianism 94,259,262
functions of 14,20 neocorporatism 157, 206, 266
as national money 14, 20f, 45, neoliberalism 14,29, 50, 70, 91, 96,105f,
106f 127,140,144,146,176,182ff, 186, 198,
in post-Fordism 48 203f 206, 210,227, 236,244,258-60,
as social p o w e r 20 266, 269
as symbolic medium of communication education 29, 167
228 forms 168-9,217,219
money capital 15, 24,105f, 118 a n d globalization 22, 28, 70, 91, 96,114,
money concept of capital 68f, 104,118, 118,129,146,153,182,195
265 a n d labour m a r k e t 156
m o n e y form 101, 104,107,124f policy adjustment 85f
monopoly 122,221,260 regime shift 7 0 - 1 , 85f, 8 9 , 1 0 5 , 1 3 4 , 1 4 2 ,
motive force of long wave 84, 111, 128, 168
282 rollback 36f, 1341,220,236, 270
muddling through 92, 242,265 system transformation 168-9
multiculturaUsm 164, 173, 175, 188, 281, turn 143,159,169
235,285 neo-medievalism 184
multilateralism 197 neo-mercantilism 91,184, 263
multilevel governance 172,197, 200, 205, neo-Schumpeterian approach 282
209, 253, 264-5 neo-statism 206.262-3,264, 266
multinational companies 82,115-16, 125f, Netherlands 156,280
212,214 n e t w o r k 9-10,24, 52,149, 200, 203, 216,
multinational state 173 222, 279
network economies (economies of
N A F T A 65,181, 253 networks) 98, 99ff, 111, 256
narrative 6f, 92f, 180, 250 network economy 105
see also discourse network enterprise 98ff, 111, 229, 233
narrow economy 2 - 3 , 1 2 2 , 1 2 4 , 2 1 6 n e t w o r k infrastructure 98
nation 3 2 , 1 6 4 , 1 7 3 - 4 , 281, 285 n e t w o r k p a r a d i g m 233-4,236
see also Kulturnation, nation-state, n e t w o r k production 99
Staatsnation, Volksnation network society 255, 229
nation-building 22 networking 212
324 Ind e x

new constitutionalism 208 path-dependency 2 5 , 2 8 , 5 8 , 63f, 66ff, 70,

New Deal 73 85f, 92,97,134,139,151,1681,185,
'new e c o n o m y ' 24, 97 189, 234, 238, 248f, 254f, 258, 262,
New L a b o u r 210,266 266-7
new social movements 87f,90, 116,140, path-shaping 92, 97,174, 230
176 patriarchy 65,711,234
New Transatlantic A g e n d a 115 patriotism, constitutional 173
New Zealand 55, 58, 70, 86,142,174, 204, pensions 60, 78, 85, 88, 90,107,152,
259 159-61, 251, 283
newly industrializing countries 127,145 perforated sovereignty 198
N G O s 115 see also denationalization
nightwatchman state 94,219, 243,260 periodization 2, 9,65ff, 69, 91f, 94,144f,
nodal scale 75-7, 202, 182, 194, 254 153f, 164f, 269-70
noise reduction 228, 243 see also long waves, sequencing,
' n o r m a ! state 40,135, 269-70 temporality
Norway 280 peripheral Fordism 40, 68, 145
Nozick, Richard 237 personal social services 89,149,158
petite bourgeoisie 68, 79
O E C D 154,157ff, 205, 208f, 252, 259, 264, Pitruzello, Salvatore 280
280f Piven, Frances Fox 145
Offe, Claus 19, 37, 41, 81, 92,147, 227, 279 place 20,1071,118, 138, 187f
Offe's paradox 2, 10, 275-6 place-boundedness 20, 108, 110, 125-6,
official discourse 38-9 138,146,181, 194, 214
offshore economy 83, 96,106 place-marketing 138,186ff, 191-2, 214
Ohlin, Bertil 60 ^see also locational policy
oil regime 80, 82, 224 plurality vs unicity in the state system 197
O P E C 82 Poland 185
openmg of China 102, 183 Polanyi, Karl 2 3 , 6 9 , 1 1 5 , 2 2 0
opportunism 245 see also embeddedness
Ordnungspolitik 205 policy, see competition policy, economic
organized capitalism 221 policy, education policy, employment
orthodox economics 4f, 225 policy, family policy industrial policy,
overdetermination 11, 92,142, 78, 249, infrastructural policy, innovation
267, 278 policy, Keynesianism, labour
see also determination market policy, locational policy,
ownership 64, 219-20, 222, 228, 279f Ordnungspolitk, regional policy, social
see also capital, intellectual property, policy, social politics, Standortpolitik,
property state intervention, technology policy,
trade policy, urban policy
paradigm shift (techno-economic) 55, 95, policy borrowing 168
97, 103,110, 126f, 133, 137 policy churning 245
paradox 27,217 pohcy inertia 86,150
Offe's 2,10, 275-6 policy inheritance 150
parallel power network 199, 209 political class domination 194
park, science and technology 130, 198 pohtical community 6
p a r t n e r s h i p 144,148,156,159, 165-6,196, pohtical parties 50, 7 0 , 1 5 1 , 1 5 8 , 1 7 6
199f, 203, 233 political regime 3, 37
see also corporatism, public-private politics as functional system 8, 196
partnership, social pact, social p o p u l a r capitalism 159
partnership popular-democratic control 200
part-time employment 86,136 popular-democratic legitimacy 213
 Index 325

Portugal 40,145 productivism 118,258

post-Fordism 48, 96-103, 123,133-4, 99, productivity 25, 56, 68,76f, 81f, 99,165f
156, 162, 188, 209f, 233, 268, 283 278, 279-80, 283
vs after-Fordism 283 and I n t e r n e t 281
continuity/discontinuity in 97ff and welfare state 90
contradictions in 103-11 professions, welfare 87,151,163
discourses about 97, 102 profit 5,7,13f, 16f, 20, 29, 31, 42,56f, 80,
enterprise 101 82ff, 123, 136,151,225,228
labour process in 98 of enterprise 20f
take-off 135, 269 equalization 17
see also flexibility, knowledge-based surplus 123,131,278
economy tendency of rate of profit to fall 81
post-Fordist state 268, 285 p r o g r a m m e inertia 150
postmodernism 173 property 20f, 42
postnational 172, 204, 208, 211, 248, 252-4 see also intellectual property, ownership
post-socialism 169,183,185, 253, 259 property relations 219,277f
Poulantzas, Nicos 5, 6, 8, 17, 32, 37, 40, property rights 20f, 219-20,223
132,197, 200f, 211, 279, 285 protectionism 69, 91, 175,183f, 187, 265-6
poverty t r a p 87 pseudo-validation 80
power public-private 108, 199, 205, 210, 228
political 193 public-private partnership 162, 168, 222,
as social relation 8,120, 199 234, 274
state 28,199 public sphere 38, 50, 111
structural 23, 29, 69, 226,238 see also civil society
technology of 117, 180
territorialization 193,195f R & D 127,256
p o w e r bloc 177,204,207 'race' 4, 22, 32, 6 5 , 7 1 , 89,149, 174
see also hegemonic bloc raison d'etat 38, 41-2
price mechanisms 5,16f, 27, 52, 57 rationality,
primacy of national scale 9, 59ff 71ff, 112, communicative 25
169,172,178,193,211f 215, 234, 248, instrumental 8, 277
255 real subsumption 15, 129,278
primitive accumulation 129f, 223, 271, 284 Rechtsstaat 39,218,223
p r i v a t e interest government 199 recommodification 147, 159
private-public 3 7 , 1 0 8 , 1 4 9 , 2 5 4 redistribution 16, 61f, 64, 68, 72, 78, 80, 89f,
privatization 129, 144, 146, 150, 158f, 161f, 147ff, 150,152, 159,213, 255
168, 206, 236,260, 262 intergenerational 160
product cycles 107,119,123 reflexive law 254
production, reflexivity 52,109,123,199, 227, 229, 236,
primacy in circuit of capital 2 3 - 4 241,2431,254
norms 5,162, 256 and governance 228-9
see also labour process regime, see international regime, political
production r e g i m e 46, 7 0 , 1 4 7 , 1 5 1 , 1 7 4 , regime, production regime, welfare
267,280 regime
productive capital 15,19-21,24, 29, 35, 83, regime shopping 241
1041,119,131,146 regional bloc 115,182-3,185
as abstract value in m o t i o n 19-21 regional policy 77, 83,127, 176, 179,197
and its concept of capital 69, f 18 regional s t a t e 60,186, 191, 198, 201
primacy in circuit of capital 23f regionalism, 1990s vs 1930s 187
source of profit 20 regionalization 174
as stock of assets 19-21 regulated self-regulation 199, 204, 261f
326 Index

regulation a p p r o a c h 4-6, 34, 65,68f, 102, of competition 187-8

280, 285 dominant 202
regulation, object of 1, 7, 11, 18, 71,103, eccentricity of 180, 182, 184
117, 134, 231-5 global 112
see also m o d e of regulation local 112
relational approach 8 nesting 113£117,179f
relativization of scale 91,100,104,112-13, nodal 2 0 2 , 1 8 2 , 1 9 4 , 2 5 4
119, 169-70,172,179-81, 201, 232, primacy of national scale 9, 59f£ 71ff,
239, 248, 252, 271 112, 169,172, 178,193, 211f 215, 234,
religion 8,22 248, 255
rent, monopoly 111 selectivity 170
technological 83,101,120,123,131f u r b a n 49, 60,112
representation 42 see also rescaling
functional 4 2 , 2 2 1 scale economies 56f, 59, 81, 83, 98, 101,
political 4 2 , 1 5 1 , 176 110,132,183, 205, 235,256
reproduction 6, 9 , 1 1 , 21,150 Scandinavia 47, 62, 64, 66f, 155, 210
economic 2 , 9 , 1 1 , 2 1 , 5 3 , 2 5 6 Scharpf, Fritz W. 67,243
and labour-power 149 Schiller, Dan 14
social 2, 4, 9, 21, 46, 53, 77,150, 216, 256, Schmidt, Vivien A. 67
275 Schumpeter, Joseph A. 120
and wage relation 46 Schumpeterian competition 120,121-2,
requisite variety 244-5 132,183
rescaling 44, 50f, 104, 123, 273f Schumpeterian competition state 96,
state 193,2041,266 119-32,134f 192, 211, 248
welfare regime 147,168, 207 science 8, 29,114,162,196
resistance 2 - 3 , 8, 27, 87,103,112, 143, scope, economies of 83, 98f, 101, 265
169f, 220,227, 264f, 272 self-organization 5, 52,149, 230, 236,
spontaneous 220 241-2, 252-3
reskilling 161,164, 188, 265 see also autopoiesis
resource p r o c u r e m e n t 191-2 self-valorization 7 - 8 , 1 5 , 1 9 , 22, 31, 46,149,
responsibility, political 40-1 284
responsibility wage 101 sequencing 69, 83, 145
reiemporalization 45 services 57
reterritorialization 19, 45,128,149-50, sexual orientation 32, 65, 72
193f, 195f, 199, 273 Silicon Valley 111
r e t r e n c h m e n t 63, 67, 85,137, 140, 143, Singapore 283
158ff, 168, 267 Single European M a r k e t 253,265
r e v e n u e 20f 220, 222 skill 20, 25, 46, 68, 9 8 , 1 1 8 , 1 4 7 , 1 5 0 , 1 6 5 ,
Rhenish model 210 251,263, 283
see also coordinated m a r k e t economy muhiskilling 98
Ricardian competition 121, 183, 282 small and medium enterprises 68, 79, 99,
Ricardian workfare colonial regime 282, 144, 233, 260
285 small open economy 58, 68, 83, 125, 204,
Ricardo, David 120,121 212-13
risk 20, 27,140, 144,153, 159, 161 social basis of welfare regimes 72, 78, 90,
Robinson, Peter 283 140,142, 194
rollback 134, 142, 220, 236, 269 social capital 109f, 130, 132
social categories 33, 49, 93
Saillard, Yves 6 social cohesion 30, 37, 54, 65, 126, 132,
Sbragia, Alberta 205, 210 211ff, 243, 239, 265-6
scale 34, 54, 65,118,180 social economy 262-3
 Index 327

Social E u r o p e 61, 65, 205, 265-6 Staatsnation 173, 281, 285

social exclusion 31f, 49, 54, 79,100,142, stages of capitalism 1-2,16,18, 21, 34,
155, 156, 164, 191-2, 234 44
social formation 4, 5 , 1 1 , 1 6 , 1 8 , 21, 56, 74 see also periodization
see also societalization stagflation 79, 81, 136, 154, 232, 235
social inclusion 31, 54, 79,142,157 stakeholding society 156,159
social-industrial complex 25,151 Standortpolitik 138,214, 273
social m a r k e t economy 64 state 6 , 1 1 , 9 5
social movements 3 1 , 5 0 , 1 5 1 capitalist state vs state in capitalist
new 87f, 90,116,140,176 society 3, 285
transnational 175 capitalist type 1-2,36-42, 85, 124, 150,
social pact 157, 206ff, 221-2, 253 211-12, 223, 256, 268, 285
social partnership 151, 165,171, 216 and collectively binding decisions 6, 40,
social pohcy 3f, 9, 31, 43, 147f, 152,197, 223
206f 234, 260, 266 dimensions 42,194
social politics 47 economic functions of 45
social wage 9,76, 91,152,165,168,234,251 exceptional 223
socialization 277 Fordist state vs state in Fordist society
of consumption 149 74
of production 45,104f, 149, 273 general functions of 95,195-6, 199, 201,
of productive forces 45, 69,104, llOf, 211, 215
220,222f as imagined political community 6
of risk 149 as institutional ensemble 193
socially necessary labour t i m e 13,15f, 278 labour process in 74f
societalization 16, 22, 27, 32, 42, 80, 84, and K W N S 59, 61, 71-3
lOlf, 109,133, 263,267-8 and metagovernance 202-3, 242-3
capitalist 30-2, 52, 75 multinational 173
software 281 post-Fordist 268, 285
solidarity 8 , 3 7 , 1 6 2 - 3 , 2 1 7 , 2 2 2 , 229, 234 postnational 204,208, 211
Sonyism 97 and social cohesion 37, 239, 243
Soskice, David 68,147, 280 territorial 193,222-3
sovereignty 37, 39,175,195,197ff 202f, transitional 162,268,285
209-10, 212, 222, 243 unitary vs federal 65, 86, 204
Soviet Bloc 183, 197 see also developmental state, global
Sozialpolitik 47 state, integral state, local state, nation-
space 107f, 118,148 state, national state, nightwatchman
national 149 state, regional state, sovereignty,
see also cyberspace, space of flows, supranational state, territorialization,
spatiality, spatio-temporal fix, territory, western state, Westphalian
time-space compression, time-space state
distantiation state apparatus 1, 6,38-9, 40
space of flows 39, 51, 91, 104,106ff, 110, state capacities 37, 40, 65, 69, 74, 81,103,
112, 118,128,138,170,193f, 273, 282 133,146, 209-10,214, 227,232, 237,
Spain 40,145, 174 256
spatiality 109ff, 114,194 state coercion 37, 222-3
spatio-temporal fix 5 - 6 , 1 0 , 1 9 , 21f, 27, 30, state failure 226-7, 228, 235-6,248
3 5 , 4 3 , 45, 48-51, 53, 73-8, 81, 91, 98, state form 2, 38-39, 201
100,103f, 112, 118,120,142, 153, 169, state intervention 36,42, 57,63f, 69, 75-7,
174, 178, 1811265,275 89, 95, 101, 21,126,134ff 2161, 219,
spending, state 1 4 3 - 4 , 1 5 1 , 1 5 7 - 9 , 2 5 1 223, 233, 245,248, 257, 260, 262,
see also social wage, taxation 268-76, 282
 328 Index

state intervention cont. superstate 196

primacy of economic functions in supply-side 107,137
S W P R 132 supranational state 196
see also indicative planning, interscalar surplus profit 123
articulation, policy, state surplus value 16, 29, 69,101, 111, 278
state personnel 6 absolute 278
state power 1, 6, 40, 199 relative 278
state project 6, 7, 41f 44, 49, 73, 98,140, Sweden 60, 70,106, 257, 280
175,177, 223, 226, 267 Switzerland 280
state theory 3, 285 S W P R 10, 125, 135ff, 142, 154, 169, 201,
state unity 42,199, 266 204, 211, 215, 250-4, 264-78
statecraft 42 contrast with K W N S 255
statehood 195 varieties 10,259-64
statism 140,169,176,224, 254,259 Swyngedouw, Erik A. 178
see also mixed economy, neo-statism systems, functional 109, 115, 117,124,141
status conflict 87f
Stephens, John D. 60, 6 3 , 1 4 7 , 1 5 1 , 160 Taiwan 28,184
Storper, Michael 186 targeting 144,155f
strategic relational approach 34-6, 279 tax state 38,84
strategic selectivity 4, 5, 6, 36,40, 41, 52, taxation 21, 37, 66f, 69,79, 81, 84, 86,143,
69-70, 86, 93, 9 5 , 1 4 8 , 1 5 1 , 1 7 8 , 2 1 3 , 146,148,150f, 153ff, 157,160f, 211, 223
220, 238, 242,279, 281,285 cuts 144, 146,152
strategy 7, 36, 70, 73, 84, 92,181,190 relief 148
scalar 112 resistance 30-1, 85 152,170, 235
see also accumulation strategy, ' Taylor-Gooby, P e t e r 67
hegemonic vision, hegemony, state technical composition of capital 280
project technology 183
strike, capital 29 of p o w e r 232
structural coupling 3 , 1 4 1 , 1 4 5 , 1 5 1 see also information a n d communication
structural forms 15,34, 36, 48, 64, 57,104 technologies
structural policy 253 technology policy 85, 96,127,206f, 272
structural power 23, 29, 69, 226, 238 technology transfer 126f, 263, 265-6, 273
see also ecological dominance, economic teleology 72, 135, 269
domination temporality 80,109ff, 114,118, 125, 180,
structural selectivity 279,281 190,194, 239
see also strategic selectivity see also time
struggle 8, 30, 47, 52,70, 87f, 92,124, 179, tendencies 16, 21, 34, 48, 249, 259
277 doubly tendential n a t u r e of 34
class 15f, 17ff, 20, 30, 31-5, 35, 38f, 82, see also countertendencies
87f, 90, 226f,267,276 tendency of the rate of profit to faU 278
overflows forms 34-5 territorialization 19,274
polyvalence of 31 of political power 193, 196f
subordination of social to economic policy territory 1 7 3 , 1 7 9 , 1 8 0 , 1 8 1 - 2 , 1 9 3 , 230,
152-68, 248, 251f, 258, 260, 272 239, 252
see also workfare identity 191
subsidiarity 65, 199, 209 extra-territoriality 27
subsumption, Thatcherism 177,183, 210, 244, 266
formal, of knowledge 129 therapeutic state 89
real 15, 129, 278 Third Italy 101, 137
superimperialism 60 third sector 62, 64, 90, 99,148f, 151,159,
superprofit 13 162, 233f, 262
 Index 329

time 1 5 , 1 7 , 2 0 , 1 4 4 United Kingdom, see Britain

capitalism as e c o n o m y of 15, 17 universities 109, 129, 163, 166-8
horizons 14, 30,144 autonomy 167
see also conjuncture, long waves, urban policy 77,176,179
periodization, spatio-temporal fix, USA 25, 55, 58, 65, 71f, 79,101, 106, 111,
temporaUty, time-space compression, 129, 137,142,166, 174,181, 183,198,
t i m e - s p a c e distantiation 253
t i m e - s p a c e compression 18,26f, 1 1 0 , 1 1 2 , health care 152
114,117f 123, 127, 132,139,180,194, h e g e m o n y 102,125,131, 259
237, 262, 274 New Deal 73
time-space distantiation 18, 26f, 112,114, use-value 15,16-17,19f, 104,107, 111,
117f 132,139,180,194 117f, 263, 277,279
Tommel, Ingeborg 210 utilities, universal 130
Toyotism 97
trade policy 196 validation of decisions 24
trading nations 60, 178 see also pseudo-validation
transitional labour market 157 valorization 16, 29, 104,109f
transitional regime 162, 2 6 8 - 9 , 2 8 5 value 13,24
transnational banks 8 2 , 1 1 4 , 1 1 6 , 1 2 5 law of 16-17, 24, 38,116,118
transnational capitalist class 209 see also exchange-value, surplus value,
transversal relations 191 use-value
trends a n d countertrends 9,194-5, 210-11, value for money 227
216f, 249-50 value form, dominance of 24, 263-4
triads 107, 112f, 114f, 117,124, 172, 179, varieties of capitalism 1 - 2 , 4 , 1 6 , 2 1 , 34,
181-2,184,212, 214,253-4 41, 44, 55, 70,102,106,118, 218
trial-and-error approach 2, 30, 73,102f, venture capital 198, 200
124,168,178, 246,259,265, 269 virtual economy 107,127
triangle, growth 198 virtual firm 100,111
tribalism 89,116,183 virtual region 1 1 5 , 1 8 5 , 1 8 9 , 1 9 1 , 214
tripartism 6 4 , 2 0 4 , 2 2 1 , 2 3 5 virtuous circle of Fordism 57, 76-7,136,
triple helix 167 279-80
T R I P S 129f Volksnation 173, 281, 285
trust 110
typology, welfare state 145, 218 wage Uff, 13, 81, 83, 155
see also ideal type as cost 13, 20f, 46, 48, 83, 91, 105,146,
152,157,170,234,251
ubiquification 119, 190 as demand 13, 20f, 46,49, 76,105,146
uncoordinated market economy 171, 218, and Fordism 48, 57
224 and post-Fordism 48
unemployment 84f, 145, 148, 153,154ff, in public sector 143
163,176 a n d social reproduction 46
benefits 60, 62, 67, 81, 85,154,156,159f, see also family wage, responsibility
282 wage, social wage
trap 87 wage cuts 146,160,165
unequal exchange 131 wage form 11, 75ff, 81ff, 104,107,124ff,
uneven development 131,182, 206f, 214 279
welfare state 144f wage relation 46,101
unicity vs plurality in state system 197 w a r 28
unilateralism 197 warfare, neglect of 3, 247
unions 69f, 72, 82, 87f, 106,176,200,234, Warr, Peter 282
261 Washington Consensus 208
330 Index

wealth 13,24 Wende (Germany) 177

vs value 277 western state 172,196
Weber, Max 222f, 279, 285 Westphalian state 3f, 9,49,140,193f
welfare cycles 145 wetware 99,281
welfare economics 227 Whitehead, Alfred North 283
welfare mix 4,148,162, 168, 207 WickseU, Knut 257
welfare regime 59, 61-3, 68-71, 70,93, Wmtelism 97
141,145,147,174,280 women, dual burden 79,147
Anglo-Saxon 66f see also domestic labour, feminization of
Antipodean 63f, 155 workforce, gender
for capital 148, 159, 251 'work society' 62, 66
Christian Democratic 25,155, 160f workers, core vs periphery 100,106,157
Confucian 63f workfare 135,154,168,170, 206, 210, 248,
conservative-corporativist 62, 64f, 66, 250-2, 258
87, 155, 160f, 205,221 European 208
fiscal 88 working class 87
generates own problems 231 World Bank 115,159,161,183, 205, 252,
liberal 25, 68, 87, 89,145,154f, 160 259,264
Mediterranean 63ff world city 180
North Atlantic 63f see also global city
occupational 88 world market 2, 3, 7, 21f, 26f, 35, 43, 57, 73,
Ricardian 145, 184 96,107,109,116,118,125,181,192,
Scandinavian 62,64f, 66, 68 230, 232, 237,247, 249,265
Schumpeterian workfare 159 decoupling from 27,192
social democratic 25, 62, 64ff, 87,155, see also globalization
159, 161 world society 53,196
see also KWNS, SWPR 'world state' 197
welfare rights 59, 72, 147,155,176, 252,
255, 258 World Trade Organization 130, 205, 264
welfare state, variant forms 61-71
Ziebura, Georg 212f