Jessop, Bob - The Future of the Capitalist State

8/8/2019 Jessop, Bob - The Future of the Capitalist State

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The Sch um peter ian Co mp et i t ion S ta te 135

measures to es tabl ish the condi t ions for a post-Fordis t ' take-off as wel las beg in to conso l i da te the ' no rm al ' s t a te fo r ms and func t ions assoc ia tedwi th pos t- Fo rd is m. Nei th er th e f i rs t no r th e sec ond set of task s is ever s t ruc tu ra l ly insc r ibe d or s t ra teg ica l ly p re -s c r ip te d . On the con t ra ry, theyinvo lve ch an ce d i scover ies , sea r ch p rocesses , po l icy t rans fe rs a nd soc ia ls t rug gles . This ind ica tes the ne ed for ex post ana lyses o f how pos t -Ford i s ts ta tes emerge ra ther than ex ante (and there fore t e leo log ica l ) accountsof the necessa ry t rans i t io n to pos t -Fo rd i s m.

Since i t i s not yet evident that consol idated post-Fordis t s ta tes haveemerged , however, we mus t r i sk t e leo logy Thus I wi l l now ind ica te somecri ter ia for ident i fying an ideal- typical consol idated post-Fordis t s ta te .This may seem to be pu t t ing the pos t -Ford i s t ca r t be fore the t rans i t iona lhorse , but i t has a heuris t ic value in assess ing whether cr ises in/of For d i s m are be ing reso l ved or pe rp e t ua te d . Ti me a lone wi ll t e l l ,h owe ver ,whether or not I have judged the next s tep and i ts postulated s ta te corr e c t l y. To e s t a b l i s h w h e t h e r t h e e m e rg 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 ns ta te i s appropr ia te to pos t -Ford i sm or no t , we mus t p roceed in th reesteps . T h e first is to deta il th e ke y fe atu re s of Fo rd is m an d its crisis-tendencies . The second is to ident i fy the key features of a post-Fordis taccumula t ion reg ime . And the th i rd i s to es tab l i sh wha t s t ruc tu ra l fo rms

and s t ra tegic capaci t ies in the s ta te and pol i t ical system might correspond to this regime.

One might argue that i t is st i l l too soon to specify this state form, butI suggest that some ini t ia l c lues can be gleaned from apparent ly fundame nta l t end enc i es in the cu r r en t res t ru c tu r in g and the i r impl ica t ions fo r s ta te forms and funct ions . Moreover, s ince these arguments were f i rs tfo rm ula te d in th e ear ly 1990s an d exp re sse d in ter ms of th e tend en t ia lr i se o f a Sc hu mp et e r ia n wo rk fa re s ta te ( Jessop 1992c , 1993 , 1994 a ,b) , are aso nab le per iod has pas sed to beg in to jud ge whe the r the t endenc i estha t th is app ro ac h imp lie s ar e bei ng real ized or not . Th er e are a t leas tth ree poss ib le t es t s in th i s regard :

• show ing tha t K W N S re gim es wer e s t ructu ral ly coupled in ma jor respec t s to the g r ow th dy na mi c o f At la n t ic Ford i sm and tha t the t ra nsi t ion to th e S W P R hel ps direct l y or ind ire ct l y to resolve (or is heldto do so) th e p r inc ipa l c r i s i s - t endenc ies o f At la n t i c Fo rd i sm and /or i t s a ssoc ia ted KWNS reg imes so tha t a new wave of accumula t ion becomes possible , based on a new vir tuous c i rc le and a new spat io-

tempora l f ix ;• show ing tha t th e dis t inct ive aspects of th e eme rgi ng S W P R co rr e

spo nd in key resp ec t s to th e em er g i ng gr ow th dynam ic o f the ne wglobal economy and contr ibute s ignif icant ly to the overal l shapingand conso l ida t ion o f th i s dynamic cons idered f rom an in tegra l



13 6 The Schum peter ian Co m pet i t ion S tate

viewpoint - t l iereby encouraging t i ie renewal and re-regulat ion of capi ta l ism af ter i t s Fordis t per iod; and

• show ing that the most compet i t ive ec on om ic spaces (even i f theywere not real ly Fordis t themselves but exis ted as non-Fordis t i s landsin a sea of For dis m) in this emer gin g ord er actual ly pi on ee re d thisfo rm of s ta te and hav e there by gained a par adi gma tic , ex em pl ar ys ta tus fo r res t ruc tur ing and re - regu la t ing e ffo r t s e l sewhere .

A ful l evaluat ion of these tes ts must wai t unt i l the three other dim e n s i o n s o f t h e S W P R h a v e b e e n c o n s i d e r e d . N o n e t h e l e s s , t h eSc hum pet e r ia n vers i on of th e compet i t io n s ta te seems to sa ti sfy to someex te nt a ll th re e po te nt ia l cr i ter ia . I do no t in te nd to arg ue th at th is typeof s ta te a lone co uld ever res olve al l the cr is is - tende ncies of Fo rdi sm ,

pre sid e s ingle- hand edly over th e r ise an d cons ol id at io n of pos t-F ord ism ,or tota l ly exc lude al l o t he r s t ra t egic par adi gm s. Ind eed , the ver y con cep tof mo de o f re gul at i on implies tha t ch an ge s wo ul d a lso be ne ed ed inthe wage fo rm, corpora te o rgan iza t ion , fo rms of compet i t ion , innova t ionsystems, and so for th , to resolve fundamental cr ises in accumulat ionreg imes . L ikew ise , r ega rd in g the s t ra teg ic mo me nt o f res t ruc tu r ing andre- reg ula t io n, the re ar e few l imits to th e op er at io n of th e econ omi c and

pol i t ical imaginary. But a t tempts to res t ructure and reor ient the s ta tesystem do have a major role in shaping the t ransi t ion f rom Fordism to

pos t -Ford i sm bo th d i rec t ly and th rough the i r r epercuss ions on changesin o ther regu la to ry domains .

Before cons ider ing poss ib le g rounds fo r desc r ib ing the compet i t ionsta te as post-Fordis t , le t us recapi tula te re levant cr is is- tendencies inAt lan t ic Ford i sm. These inc lude the g radua l (and a lways re la t ive )exhaus t ion o f the g rowth po ten t ia l tha t came f rom ex tend ing mass p roduc t ion in to new branches ; the re la t ive sa tu ra t ion o f marke t s fo r massconsumer durables; a decl ine in prof i tabi l i ty ; the disrupt ion of the vir tuous c irc le o f Ford i s t accum ula t ion th r oug h in te r na t ion a l iza t ion ; thegrowing incoherence and ineffec t iveness o f na t iona l economic management as na t iona l economies become more open ; the s tagf la t ionaryimp ac t o f the KW N S on the Ford i s t g row th dyn am ic (espec ia l ly wh er es ta te eco nom ic in te rve n t io n i s too conc er ne d wi th sus ta in ing employment in sunset sectors) ; a growing f iscal cr is is due to the ra tchet- l ikegrowth of social consumption expendi ture; and an emerging cr is is of soc ia l secur i ty due to the expans ion of pa r t - t ime , t emporary and d i scon

t inuous employment a t the expense o f a fu l l - t ime Ford i s t norm.An emerg ing pos t -Ford i s t accumula t ion reg ime cou ld be sa id to

re sp ond to suc h c r i s i s - t ende nc ies in var io us ways . I t t r a ns f or ms mass p r oduc t ion and t ranscends i t , segments o ld marke t s and opens new ones ,offers op por tu ni t ie s to res t or e the ra t e of prof i t , i s less co ns tr a i ne d by



The Schu mp eter ian Co mp et i t ion S tate 1 37

na t iona l d em an d condi t ions bu t ma ke s ne w de ma nd s up on reg iona la n d n a t i o n a l i n n o v a t i o n s y s t e m s , r e p l a c e s m a c r o e c o n o m i c p l a n n i n g i na 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 p o l i c i e s t o p r o m o t e i n n o v a t i o n ,f l ex ib i l i ty and s t ruc tura l compet i t iveness in response to the enormousramif icat ions of ne w tech nolo gies . Likew ise, i t s con ce rn with s t ru ctur aland /or sys temic compet i t iveness recognizes the changing te rms and condi t ion s of int er nat ion al com pe t i t io n as wel l as i ts inc rea sed s ignif icance.I t offers ne w ways of re ge ne ra t i ng old indu str ies as wel l as rep lac ingthem, p romises new ways o f o rgan iz ing soc ia l consumpt ion to reducecosts and make i t more funct ional for business , and is able to fur ther exp lo i t the f ragmenta t ion and po la r iza t ion o f the l abour fo rce conse

qu en t up on the cr i si s in For d i s m. I t goes be yo nd the m er e re t r en ch me ntof social welfare to res t ructure and subordinate i t to market forces . I tsr 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 s o ci a l 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 yand re t renchment s ign i f i es i t s awareness o f the pos t -Ford i s t pa rad igmshif t as wel l as the impact of in ternat ional izat ion on the pr imary funct ions of m on e y an d wages. I t rescales th ese forms of int erv ent ion ineconomic and soc ia l r eproduc t ion to cor respond to the more complexand mul t i sca l a r fo rm s of acc um ula t io n in a g loba l iz ing ec on om y tha t a rere f lec ted in the complex d ia lec t i c be tween g loba l iza t ion and reg iona l -

i za t ion . And i t in t roduces new forms of s t ra teg ic gu idance and coord ina t ion tha t over co me the l imi t s o f top -d ow n s ta te in te r ven t ion in themix ed eco nom y. Th e Sc hu mp et e r ia n com pe t i t ion s ta te cou ld p lay a keyrole in several of these areas (see box 3.2) . This approach must a lso re lylargely on assertion for i ts persuasive effect until the effectiveness of spec i f i c SWPR reg imes (and a l t e rna t ive modes o f soc ia l r egu la t ion o f theemerg ing g loba l o rder ) have been proper ly examined and the i r v iab i l i tyin specif ic conjunctures is assessed.

An a l t e rna t ive approach i s more p romis ing fo r p resen t purposes ,how eve r, s ince i ts pe rs uas i ve fo rce depe nds on pas t pe r fo rma nce ra the r than poss ib le pos t -Ford i s t fu tu res . I t invo lves demons t ra t ing tha t thoseec on om ie s tha t g r ew mo s t rap id ly dur ing the g loba l c ri s is in /o f For d i s mand that have become models for those in cr is is are especial ly advancedi n d e v e l o p i n g 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. A m o n g t h e m o s t

p r o m i n e n t e x a m p l e s t o d a y m i g h t b e t h e U S A , G e r m a n y, F i n l a n d a n d t h eThird I ta ly, as wel l as some of the most successful regional economies ino t h e r w i s e c r i s i s - p r o ne e c o n o m i e s . J a p a n a n d f i r s t - w a v e E a s t A s i a n d r a g o nec ono mie s once p r ov i ded o the r exe mpl ars , bu t Japa n ' s s t ag na t io n and the

Asian Cris is have cast doubt on their present and past re levance ( for analternative view on East Asia, see Weiss 1998; and on Japan, see Boyer an d Y am ad a 2000) . Ev en i f i t wer e wr on g to ca tegor ize a ll thes e na t ion a land /or reg iona l economies as l i t e ra l ly pos t -Ford i s t (because they werene ver t ru ly Ford i s t ) , the i r inc reas ing ro le as ex em pl ar s o f a l t e rna t i ve (a nd



1 38 The Sch ump et er ian Compet itio n State

, 1 . Promoting their own national or regional capital isms and

appropr ia te condi t ions kn i l ic i r g lobal spicad.

6 . Eng ag in g in co mpl eme nt ar y forms of Standortpolitik a n d

o t h c - t o r m s o | place bas id eonipeti l ion m an allcnipl t o t i \mobi le caphal wi th in t he s t a t e ' 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 iv.gional or iniernaiivinal com

pet i t i ven ess of i ts ow n [•lai .e -hoiind^Gajiii.iK

7 . See kin g to man ag e t h e l e n s i .m between la i t h e nueres ts of

potent ia l ly mobi le c a p i i a l in leducins its pl ; i c i . -dependency

iind /or fr ee ing itself I 'rom te mp or al con str ai nts and (b) th e

s i r U i " s o w n m t e e s - . i n l i xi 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 i n

its territory and l endcr inL ' cap i ta l ' s t e m p o i a l n o i i / ons and

r h y t h m s c o m p a t i b L wi i f i t s own po l i l i c i l l o u t m e s . l on ipora l -

i t ies and crisis-tendencies.

8. Pr om ot in g ne w tei iip oia l lioi i/on.s of act ion and ne w fo rm s of

t e m p o r a l f l e x i b i l i t ) :

Box 3.2 The Schumpeterian competition state and capital accumulation

1 . Cha ng i ng regu la t o ry f r amewo rks to ' f ac i l i ta t e l abo ur ma rk e t

flexibihty and mobili ty within national economic space.

2. Liber aliz atio n an d dereguJat iem of forei gn exc han ge mo ve

men t s an dr ed cs i gn o f in t e rna t i ona l f inanc ia l a rch i t ec tu re wi th

fhe effect of iti ter nat ion aUzi ng and ac ce ler at ing capi tal flovra..

3 . Modifying ins t i tu t ion al f ra mewo rks for in te rnat iona l t r ad eand foreign direct investment.

• add res s in g the ' mul t i formi ty of ec on om ic global iza t ion by

engaging in the r ivalrous and conflictual struggle to define

the ru les for harmoniz ing or s tandardiz ing technological ,

econ omic , jur id icopol i t icaL sociocul tura l and cn vir onm en-

• ta l' is su es :' • - ••• • ^»•-•

• p r o mo t i n i ; th e sp.'ice of (l ow- i;i (iiis conl ^.\l In organiz

in g co nd it io ns lasoLir. hie to th e uiicrn.i tkni. 'i mviiiilit,y of

tcclmoloiiies. iiidustii.il anil conmicL I L I I

Lupnal. in".oilec-t u a l p i o p L i i \ and .it Last ôinc t\jicsoi laboni power.

4. Pl an ni ng and subsitl i/inu -.p-iiial li \L S that su np oi i the activi

ties of finani -ial. indust iial an d coini ncic ial caiiiial ' .ulliin an d

across boi dci s . • .



The Schum pete rian Comp eti tio n State 13 9

apparently successful) trajectories for Fordist regimes in crisis does mean

that they have a paradigmatic post-Fordist status.

8. Concluding Remarks

To avoid a teleo logic al analysis of th e co mp et i t io n stat e as th e func tion

al ly nece ss i ta ted co mpl eme nt to an eme rge nt pos t -Fordis t lab our

process , accumu lat i on reg ime or mo de of regul a t ion, the ar gum ent s pr e

sented above must be qual i f ied by more concre te and complex analyses

of For dis t mod es of gr owt h as well as by mo r e substan tiv e wor k on the

crisis me ch an is ms of th e K W N S cons ide re d as a dist inctive stat e for m

an d polit ical regi me ( see ch apt er 5). A mo re d eta iled analysis of th e co m

pet i t ion s ta te would need to show the s t ructura l coupl ing between each

type of Fo rd ism and the cha ra cte r of th e nat ion al s ta te an d the pro bl ems

this creates; the complexit ies of the capital relat ion in each regime type

and i ts implications for the forms of economic and poli t ical struggle over

crisis-resolution; the path-dependency of the trajectory out of crisis that

emerges in and through such s t ruggles ; and, thus , the problems that ar ise

when the s ta te lacks the capaci t ies to manage the t rans i t ion .

• copi ng witli the incr ease d sali ence of multiple time / on es

(in council-ice. i ' iplomac\. -ecuiil). elc. i:• recali brating and managi ng the inte rsect ion of tem por

a l i ties (e. : ;. . r^ in i la t i i i ! . compul cr p iD^r a i i i i n , . . i i a d i i g .

promoting the 24-hour city as centre of consumption, man

aging en\ lu ii ii ne i lal i i-k 1.

'). Socia l i / i im lo ng - l e i r i c iMi di l i o i i s of prndi icl i "n as s l u i r i - l e r i i

eale.il i i ion I K cii . iies n u n c i liai iinaii t in in . i ik el i / ed ecu iMn iu ,

10. Arti cul ati ng the inte rlin ked pro ces ses of dc - and rctcrritorial-i/ ai in i: aiitl dc and let eii ipo ial i/a tin ii .i-sv.eiateLl wi ll i I 'ew

lor Ills 111 mie -s pac c di sl anl ut io u and tniic space (.•inipussum

in t h e hvipe >il cie. i ii ii 'a new spali o- U-n ipo r .d l'\ vii nan.i'.:iii>;

tin. siruciur.il coniiad clmns inl:eienl in llie capital leLiiinn.

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

in iMliercliaHcts wi'l iik nlilv Inilhei aLl iv i l i es . b icI- ul I I K - e a c l i v

ilics can be linked inio dil lei ent acc umul ali nn s i r a i C L i e s a n d - l a i e

piojccis (sec especialK cliapier ~).



Social Reproduction andthe Workfare State

What is convent ional ly termed the welfare s ta te is far f rom universal . I tis not found in all industrial societies nor even in all advanced capitalistsociet ies and i t i s by no means an i r revers ible evolut ionary achievement .On the con t ra ry, fo r some years the re have been remarkab le changes inec on om ic an d social pol ic ies , their discurs i ve f ra ming a nd legi t imat ion, th espe ed an d scale a t wh ic h pol icy fo rm at io n and ref or m oc cu r in thes eareas , the ins t i tu t iona l me cha nis ms and ne t wo rks th r oug h which these

pol ic ies are pursued, and their economic, pol i t ical and social bases .Th es e ch an ge s are re la ted , as we have se en, to four sets of factors : (1) th er e o rg a n i z a t i o n o f t h e 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 s a n d m o d e s o f regu la t i on in re spo ns e to the bas ic c r i s i s - t endenc ies o f At l an t ic For d i s mand to th e eme rg en ce of ne w pr im ar y con tra dic t io ns in capi ta l ism; (2) th eeme rg i ng f i sc o- f in anc ia l squ eez e on th e KW N S , the c r i si s in the ca tch-a l l

pa r ty sys tem wi th which i t was hnked , the ins t i tu t iona l ized compromiseon which i t was based and the development of new social forces; (3) there -e me rg en ce o r res urg ence o f l ibe ra l i sm in the gu i se o f neo l iber a l i s m asan a l t e rna t ive to corpora t i sm and s ia l i sm as modes o f economicgovernance and s ta te projects , and i ts act ive promotion by the USA as thehe ge mo ni c s ta te in At l an t ic For d i s m and Br i t a in as i ts jun ior pa r tn er ;and (4) the r ise of new economic and social problems and newsoc ia l mo ve me nt s tha t cha l leng ed the p reva i l ing mo de of regu l a t ionan d dem an de d new way s of deal i ng with old and ne w pro ble ms . Th eresponses to these chal lenges have major implicat ions for the pol i t ics of the welfare s ta te , for i t s re t renchment and res t ructur ing, and for a t temptsto move beyond the welfare s ta te without los ing cr i t ical e lectoral andmore genera l po l i t i ca l suppor t o r undermin ing the l eg i t imacy of thena t iona l s t a te .



Socia l Reproduct ion and the W or kf ar e S ta te 141

1. Prelinninary Considerations

With the deve lopment o f fo rmal ly f ree l abour marke t s , marke t fo rces became the chief mode of coordinat ion in regard to a l l economic act ivi t ies in capi ta l ism. But the invis ible hand, wi th i ts formal monetary max-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 i t, b e h i n d t h e b a c k sof the p ro duc er s ) , p r oc ed ur a l ra t iona l i ty, and post hoc o p e r a t i o n , h a sa l w a y s b e e n s u p p l e m e n t e d b y o t h e r m o d e s o f c o o r d i n a t i o n t h a t i n t r oduce mo r e subs tan t ive ob jec t ives , e le men ts o f in te rpe rso na l o r in te r-o rgan iza t iona l de l ibe ra t ion , o r ien ta t ion to co l lec t ive goa l s , and ex anteconcer ta t ion. This is where welfare regimes may help to secure some of the ke y condi t ions fo r cap i ta l accu mula t ion . For they ins t i tu t iona l ize subs tan t ive c r i t e r i a fo r eva lua t ing and cor rec t ing marke t ou tcomes , po l i t i ca land burea ucr a t i c p ro ced ure s for gu id ing the oper a t i on o f ma rk e t fo rcesan d addr essing ma rk et fa i lure . Th ey also ha ve a ke y role in es ta bl ishi ngaccumula t ion s t ra teg ies and l ink ing them to s ta te p ro jec t s and hegemo ni c v i s ions , an d in secur ing c ruc ia l p re con di t i ons fo r th e ope ra t ion o f marke t fo rces . In th i s regard , they cons t i tu te an impor tan t in te r face be tween the economic and ex t ra -economic condi t ions fo r cap i ta l accumulat ion. This has implicat ions for the s t ructural coupl ing and co-evol ut io n of th e econom ic, pol i t ical , legal , edu cat i onal , medic al an d ot he r

funct ional systems, as wel l as for the re la t ionship between these systemsan d th e l i few orld. In th e la t t er res pect , wel far e reg ime s are heavi ly implica ted in govern ing the economic , gender, e thn ic , in te rgenera t iona l andma ny ot he r aspects of the divis ion of la bo ur th ro ug ho ut th e social format io n . In dee d , they a l so con t r ib u te to the ' l abour o f d iv i s ion' th r oug h

This chap t e r examines the res t ruc t ur in g and s t ra teg ic re or i en t a t i onof the K W N S f rom th e mid-1970s regar d ing the soc ia l r e pro duc t io n of l ab our -po wer as a f i c t i t ious comm odi ty . Th is re qu i re s us to cons i der changes in the fo rms and func t ions o f co l lec t ive consumpt ion as wel las in in co me t ran s fe r s based on the con t r ibu tory ins ura nce p r inc ip le ,c i t izen ship r ights or, pe rh ap s, res iden ce pr ivi leges; and i t a lso de ma nd sa t ten t ion to the d i scurs ive and mate r ia l cons t ruc t ion o f new forms and bases o f soc ia l r eproduc t ion deemed appropr ia te to the t rans i t ion to , andsubsequent opera t ion o f , a g loba l iz ing , knowledge-based economy.Thus, a longside changes in social redis t r ibut ion and income t ransfers , Ia lso consider labour market pol icy and the res t ructur ing of educat ion.Al be i t a t d i fferent t im es an d spe eds an d with different degr ees of discon t inu i ty, changes have occur red in these regards no t on ly under neo l ibera l governments bu t a l so under more t rad i t iona l soc ia l democra t ic .C h r i s t i a n d e m o c r a t i c , a n d c e n t r e - l e f t r e g i m e s .



14 2 Socia l Reproduct ion an d the W or kf ar e S ta te

their di fferent ia l t reatment of exis t ing social ident i t ies and/or their creat io n of oth er social ident i t ies ( Mu nr o 1997) . Th ey there by con tr ibu teto the c lass i f icat ion and normal izat ion of individuals , groups and other social forces as a basis for differential treatment in the division of labour and for social inclusion-exclusion within the context of specif ic spat io-te mp or al f ixes (see a lso ch ap te rs 1 an d 2) .

Tl ie gene ral a nd wid esp re ad nat ur e of th e cha nge s invol ved in th e tenden t ia l emergence o f the SWPR sugges t s tha t the p r imary causes o f th i st ra nsi t io n sho uld be sought in ge ne ra l and wid es pr ea d features of the

postwar polit ical economy since the 1970s and '80s. Tliey are unlikely to be f ou nd ju st in factor s t hat a re specific to o ne or tw o spec ial cases . Tliusit is important to define the explanandum at a sufficiently high level of abs tra ct i on and s implic i ty to es tabl ish th e basic ten den cie s invol vedwhi l s t r ecogniz ing tha t the l a t t e r wi l l be overde te rmined a t more concrete-complex levels of analysis. This will enable us to search for ana p p r o p r i a t e m a c r o - e x p l a n a t i o n a n d a v o i d r e d u n d a n t m i c r o - c a u s a l e x p l anat ions (Garf inkel 1981: 55, 59; Jessop 1982: 282-90; Manners 1998) .

No ne th el es s , th e wid e var ia t io n in th e t im ing and t ra jector i es of t ran sit ions , their discourses and legi t imacy, their social bases and outcomes,a l so requ i res ca re fu l a t t en t ion to the i r p rox imate mate r ia l causes , the d i scurs ive f raming of any perceived cr is is in and/or of the welfare s ta te , l inksto histo rica lly specific ba la nc es of forces in pa rt ic ula r conju nct ure s, institu t io nal med ia t i on s an d s t ra tegic select ivi t ies , and issues of seq uen cin g.Likewise , the ac tua l ou tcomes of a t t empts to res t ruc ture and s t ra teg ical ly reor ient social reproduct ion wil l be l inked to different modes of inse r t ion in to the wor ld marke t and in te rna t iona l po l i t i ca l sys tem. So our macro-exp lana t ion mus t be compat ib le wi th more micro- leve l ana lysesth at exp lai n th e his tor ical specific ity of cont inui t ies and disc ont inu i t iesin different welfare regimes.

I have a l ready ind ica ted par t o f th e macr o-e xp l ana t ion fo r chan ges inth e wel fa re d imen s io n of the KW N S in the p rece d ing two chap te rs .

Non e th e le ss , a l thou gh the c r is is o f At l an t ic Ford i sm d id exc lud e con t inuat ion of the KWNS in i ts old form, i t d id not require that a t tempts bemade to dismant le or destroy the welfare s ta te ra ther than to reform i t .Indeed , g iven my a rguments about the necess i ty o f ex t ra -economicfac tors in the rep ro duc t io n of l ab our -po wer as a f ic t i tious com mod i ty , i ti s improbable that a general and enduring rol lback could be consol ida ted . F ar mo re l ike ly a re a t t em pt s to redes ign ins t i tu t ions and /or toreor ien t the i r ro le in soc ia l r eproduc t ion . In th i s sense , the var iousat tempts to effect a major neol iberal regime shif t found in the Uni tedSta tes , the Un i t ed Kin gdo m, Ne w Ze a l an d and , to a lesser ex ten t ,Aus t ra l i a and Canada cons t i tu te excep t ions ra ther than the norm inwel fa re res t ruc t ur ing . M or eov er , g iven the overa l l l ibe ra l na tu re o f these



Socia l Reproduct ion a nd the W or kfa re S ta te 1 4 3

2. Alternative Approaches to Welfare State Reform

Mu ch o f the ex i s t ing l i t e ra t u re on rec en t we l f a re re forms , impo r t an tthough i t i s , addresses issues that are tangent ia l to the present chapter.A f i rs t problem for present purposes is that some s tudies are too concern ed wi th aus te r i ty and re t r en ch me nt in respo nse to the in i t i a l c r i si sin/of the welfare s ta te and/or focus excessively on what of ten prove to

be qui te marginal quant i ta t ive f isco-f inancial var ia t ions . We cer ta inlyknow fa r more now about changing tax mixes ( the re la t ive con t r ibu t ionof t axes on mobi le and immobi le economic agen ts as revenue sources ) ,re ven ue mixes ( the changi ng ba l anc e o f t axa t ion an d bor row ing ) and

budge t mixes ( the changing ta rge t s o f expendi tu res ) . Unfor tuna te lythere are many complex and interact ing factors that may affect theabsolute f igures , t rends and ra t ios , and this makes s i rnple analyses of quan t i t a t ive var ia t ion hard to in te rpre t in compara t ive ana lyses . Moreover, even in more neo l ibera l we l fa re reg imes , we l fa re expendi tu reremains at high levels even two decades after the first serious andinsis te nt calls for re t r en ch me nt (see pp. 150- 2) . This poses inter es t i ngques t ions a bou t conser va t ion -d i ss o lu t io n e ffect s in soc ia l cha nge aswell as about possible qualitative shifts in the role of the welfare state.

In add i t io n , thes e lon g- r un t i me se r ies s tud ies t end to igno re the de l ibe ra te o r p rov iden t ia l use o f shor t - to medium- te rm f luc tua t ions in spending to p rov ide the s ta te wi th l everage in res t ruc tur ing and reor ien t ingcoflect ive co ns um pt io n (for exa mpl e, in educat ion, heal th services an dhous ing) and /or to recompose the l abour fo rce and modi fy incen t ivesand at t i tudes in the publ ic sector. Among other tact ics , per iods of under-funding may be fol lowed by the select ive re lease of addi t ional moniescondi t iona l on comp l ian ce wi th ne w mod es o f work i ng , new-b lood pos t sin s t ra teg i c a reas , ne w pe r f or ma nce ta rge t s , ben chm ar ks , e tc . L ikewise ,access to extra funds may be made to depend on ad hoc chal lenges , genera l i zed compet i t ion o r spec i f i c requ i rements tha t pub l ic fund ing bematched by the mobi l izat ion of pr ivate funds. In addi t ion, a long-termsqu eez e on em pl oy me nt and wage s in the pub l ic sec to r ma y be impos edin th e face of m or e or less res is ta nce in ord er to f ree re ve nu es for ot he r

pur pos es - a lbe i t a t the exp ens e o f mot iva t io n , mo ra le and rec r u i t men tat a la ter date . Cuts in capi ta l spending may l ikewise be made in order

regim es befo re t tie neo l ib era l tur n, eve n these a t te mp ts to pr om ot e aneol iberal regime shif t were less radical than the same at tempts wouldha ve b e e n in oth er welfare regi mes. Ev en here , how eve r, we sho uldcons ider the con t rad ic t ions an d l imi t a t ions bo t h in the i r ow n te r ms andas models for other economic and pol i t ical spaces .



14 4 Socia l Reproduct ion an d the W or kf ar e S tate

to support the prevaihng level of e lectoral ly more sensi t ive currentspending - an effect that would not show up in studies that focus solelyon income t rans fe rs o r on cur ren t spending more genera l ly. The resu l ting de te r io ra t ion in the qua l i ty o f co l lec t ive consumpt ion may a l so bes ign if i cant en ou gh to necess i t a te an d /or l eg i t i mate the sub seq uen t t r ansfer of responsibi l i ty for i ts provis ion to publ ic-pr ivate par tnerships or pri vat e ente rp ri se . This is mos t evid ent in th e ne ol ib er al cases. In allcases , th is s t ra tegy could enable the s ta te to re lease funds for var iousoth er pu rp os es becaus e of i ts red uce d capi ta l spe ndi ng in these par t ic ular areas; to gener ate r eve nue s f r om pri vat izat ion pr oc ee ds th at could beuse d to f inan ce t ax cu t s and /or o the r s t a te expe ndi t u re s ; to perm i t g re a te r f lexi bi l i t y in the op er at io n and provi s io n of hi t her to publ ic servicesand /or in wages a nd wo rk ing con di t ion s in these sector s ; to cr eat e opp ortuni t ies for smal l and medium enterpr ises as wel l as larger service f i rmsand/or to p romote the in te rna t iona l iza t ion o f se rv ices ; and to p romotec 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 en p a r t i c i p a t i o n i n s o c ia l r e p r o d u c t i o n .Final ly, re tu rn in g to th e issue of cu rr en t spe ndin g, we shoul d a lso no tetha t tar get i ng, mea ns- tes t in g and f is cal c law -bac k ma y hav e s ignif icanteffects in de pe nd en t l y of wh et he r cu rr ent spe ndin g r ises , fa lls or s tays thes a m e .

Al l o f th i s ind ic a tes tha t a conc er n wi th quan t i t a t ive var ia t ion andaggregate levels of spending can dis t ract a t tent ion from what could

prove to be far more important shif ts in the qual i ta t ive forms and functions of social policy an d social welfar e in th e cont ext of a br oa de r rear t iculat ion and rescal ing of the capi ta l is t type of s ta te and changingfor ms of gov er na nce . O n e of the funct ions of th e fourf old appr oa ch towelfare regimes adopted here is precisely to faci l i ta te the analysis of qual i ta t ive issues .

A second prob lem i s tha t much of the l i t e ra tu re assumes tha t we l fa res ta t es in th e c i rcui ts of At lan t i c Fo rd is m ( if no t outs id e) exis t in th e sam etime, i .e . , have the same genealogy, rhythms, cycles , and so for th , andhence that one calendar year or decade has the same s ignif icance for anyand all we lfa re states. This is ref lect ed in the negl ect of four inte rr el at ed

pr ob le ms . Firs t , 'we lfa re stat es are alw ays ou t of da te ' as a res ult of sociala n d d e m o g r a p h i c d e v e l o p m e n t s a n d t h e e m e rg e n c e o f n e w n e e d s a n drisks . This is especial ly important in those 'h is tor ical per iods when thevery mo des o f in teg ra t i on whi ch un de rp in wel fa re s ta tes a re cha l lenged '(D al y 1998: 130; cf. Pier son 2001a on th e nee d to ' r eca l ib rat e ' welfa reregimes in the l ight of new r isks , problems and chal lenges) . Second,ec on om ic , po l i t i ca l , soc ia l and cu l tu ra l de ve lop me nt s a re o f te n 'ou t o f ph as e ' , e spec ia l ly w he n con s id er ed c ross -na t iona l ly. Thu s , wh er ea s so meK W N S s b e g a n t o e m e r g e i n t h e i n t e r w a r p e r i o d a n d w e r e c o n s o l i d a t e din the 1950s and 1960s, others first emerged in the 1950s or 1960s and



Socia l Rep roduct ion and the W or kf ar e S ta te 14 5

had no t re ac he d m a t ur h y befo re the onset o f th e cr is is in /of At la nt icFord i sm . In par t i cu la r , th e per iph era l Ford i s t eco nom ies o f So uth er nE u r o p e ( S p a i n, P o r t u g a l , G r e e c e ) b e g a n t h e ir p o s t w a r e c o n o m i c e x p a nsion la ter, began to develop a KWNS mainly af ter the col lapse of their r espec t ive d ic ta to rsh ips , had fas te r economic g rowth ra tes than the EUave rag e in th e 1980s and 1990s (a lbe i t wi th hig her un em pl oy me nt ra te s)and a re s t i l l ca tch ing up wi th the i r nor thern ne ighbours in conso l ida t ingthe wel fa re s ta te a t the same t ime as under tak ing neo l ibera l po l icyad jus tments . L ikewise , f i r s t -wave Eas t As ian newly indus t r i a l i z ingec ono mi es are no w facing pr ob lem s of bui ld ing a welf are s ta te to re pla cethe i r more Ricard ian and /or fami l ia l workfa re reg imes , espec ia l ly inresponse to economic volat i l i ty and growing insecuri ty even for coreworkers . Third, v iewed on a smal ler t ime scale and from the viewpointof class and other social struggles, welfare regimes may be 'out of cycle 'in re la t ion to each o ther, the reby fu r ther compl ica t ing any compar i son .For, a s Ka leck i (1943) an t ic ipa ted and subsequent ana lys t s observed ,

pos twar economic expans ion invo lved a po l i t i ca l bus iness cyc le . Thus ,a f te r Keynes ian- induced fu l l employment s t reng thened the barga in ing pow er o f o rga n ized labour, em plo yer s and the s ta te would p ro vo ke arecession in order to reduce wage pressures; but , as a nat ional e lect ion

ncared , the government would re f la te to garner vo tes f rom economicrecovery. L ikewise , a s P iven and Clo war d (1971 ,1993) hav e shown, the reis a lso a pol i t ical cycle in welfare regimes as s ta te managers and their a l l ies seek al ternately to dampen social protes t and to res tore the incent ive to work. And, four th , owing to differences in the t iming and sequencing of economic and social reforms, i t is also possible for t ime to be 'outof joi nt ' . Th us the s t r uct ura l coupl in g an d co-e volut i on of welf arereg imes and the wider na t iona l and p lur ina t iona l economic and po l i t i ca lsystems in which they are embedded come to be marked by specif ic

pa t t e r ns o f une ven nes s and d i s loca t ion .

A th i rd sour ce o f p ro b le ms i s an un der s ta nd ab l e t e nd en cy to fe t i sh izeEsp ing-Andersen ' s typo log ies (o r the i r de r iva t ives ) in work on changesin wel fa re reg imes . Thus much recen t research has concerned i s sues o f con ver gen ce o r d ive rge nce wi th in th i s pa t t e r n o f we l fa r e reg im es . In te res t ingly, i t i s the l iberal regime that now of ten serves as the empir ical

benchmark against which to assess changes even i f social democracy isre ta ined as the normat ive ideal . This can lead to neglect of other typesof ch an ge within th e th re e ( four, or f iv e) re gim es and, m or e import ant l y,of a l t ern at i ve pa th s away from all of the se regim es ( incl uding the l iber almodel) as they exis ted in the golden age of Atlant ic Fordism. This is espec ial ly p ro b lem at ic , a s Esp i ng- An der se n ' s mo de ls cap tu re on l y pa r t o f th es ta te ' s ro le in soc ia l r eproduc t ion ( see chap te r 2 ) and thereby d iver ta t t en t ion f rom o ther changes in cur ren t soc ia l r eproduc t ion .




Fourth, some s tudies have been too concerned with ident i fying andcrit ically asse ssing th e significance of glo bal iza tio n as a pos sib le caus e of changes in welfare regimes. Tl i is worthwhile interes t ref lects the discurs ive rol e of 'g lo bal iz at ion ' as an a l ibi for cha nge s bein g m ad e for oth er reasons, resul t ing in the c la im that increasing internat ional compet i t ionnecessitates cuts in taxes and in the individual and social wage as well asin other aspects of economic and social policies. I t also relates to thefamiliar claim, which can also serve as an alibi for politicians, that theelectorate , publ ic opinion and other s ignif icant social forces are ingeneral opposed to taxes and publ ic spending - even as par t icular groupsof e lectors and pressure groups demand more spending (cf . Ki tschel t1994, 1997; Tay lor -G oob y 1997, 2001a ) . A n d i t corr es pon ds to the m or egene ral im pa ct of th e global neol ib eral project , whi ch pr om ot es pr iva t izat ion, commodif icat ion and market proxies in the publ ic sector, as wel las reduc t ion and red i s t r ibu t ion o f t ax burdens . However, whi le th i sre nd er s re se ar ch on the social pol icy imp act of globa l izat ion inte l l ig ible ,i t also explains why it is often theoretically i l l-considered and tends tomu dd le que st ion s of caus at io n. In par t icul ar, th is res ear ch fa ils to not ethe mul t i sca la r, mul t i cen t r i c , mul t i t empora l na tu re o f g loba l iza t ion ( seecha pt er 3) , to ta ke ac cou nt of th e ex te nt to which s ta tes on different

scales (especial ly cer ta in nat ional s ta tes) have been act ively involved in promoting global izat ion and to recognize that even those s ta tes that are'more s inned against than s inning ' in regard to global izat ion s t i l l have

pol i t ical choices in responding to global izat ion and i ts associated discourses. I t also tends to ignore the fact that globalization, even in i ts ownter ms, is jus t on e vect or am on g several th ro ug h whi ch the contr adic t io nsand d i lemmas inheren t in the cap i ta l r e la t ion a re cur ren t ly be ingexpressed. In this sense, too, the debate as to whether the pressures onthe nat ional s ta te are pr imarf ly global or domest ic in or igin misses the

poi nt abo ut the chan ging dyn am ic of capi ta l accu mul at i on (see , for exam ple , Ive r sen 2001; P ie r son 2001b; and Swa nk 2001 ,200 2) .

In addi t ion, the impact of global izat ion of ten involves a one-s idedfocus on the hypermobil i ty of f inancial capi ta l , the possibi l i t ies for thecros s -bo rder re loc a t i on o f p r od uc t i ve cap i ta l , the ro l e o f th e ind iv idua land social wage as a cost of product ion, and labour-power as one subs t i tu tab l e fac to r o f p ro duc t io n am on g o thers . I t s im pa c t in th i s reg ard i sce r ta in ly impor tan t . But i t cannot be p roper ly unders tood wi thou t consider ing the s ta te ' s abihty to reorganize s ta te budgets and expendi ture ,the im por ta nce o f the ex t r a -ec onom ic and p lace -boun d condi t ions o f

productive activit ies, the role of the individual and social wage as asourc e of d e m a nd and th e s ignif icance of la bo ur -p ow er as a creat ive a ndkno wl ed gea b le source o f ad de d va lue tha t requ i res ex t r a -e con omi c cu lt ivat ion. In short , many s tudies ignore the extent to which the manifold





148 Socia l Reproduc t ion an d the W or kf ar e S tate

3. The Specificity of the Welfare State in Atlantic Fordism

Welf are re gi me s del iver welfar e thr oug h a com ple x mix of me ch an is ms .

The se involv e cha ngi ng mix es of occ upa t io nal benef i ts , d i rec t s ta te f inanc ia l r ed i s t r ibu t ion , f i sca l meas ures , s t a te - fund ed and /or s ta te -p rov i dedc o l l e ct i v e c o n s u m p t i o n , h o u s e h o l d r e d i s t r i b u t i o n , i n t r a - a n d i n t e rg e n e rat io nal sol idar i ty wi thi n ex te nd ed famil ies , an d cha r i t abl e activi t ies.Alo ngs i de th e soc ia l r ep rod uc t ion of l abou r-po wer i s a reg im e of 'we l fa refor capi ta l ' th at a lso involves a com pl ex mix of me ch an is ms (fiscalwel fa re , d i rec t s t a te subs idies , in f r as t ru c tura l p rov is ion , asym met r ica l pr ivate-publ ic par tnerships , e tc . ) which direct s ta te revenues to the benef i t of par t icular capi ta ls or capi ta l in general and/or forgo revenue

through tax expendi tures ( tax re l iefs) to the same ends. Such welfareregimes have qui te different dis t r ibut ive consequences in c lass , gender,e th n ic and spa t ia l t e rm s acc ord ing to the mix of p r i va t e ,p ub l ic and ' th i rd 'sectors . This very same select ivi ty a lso makes the s t ruggle over welfaremix es a key issue in deba te s over th e res t ru ctu r in g of welf are s ta tes . Inthis con tex t , ideas abou t social par tn er sh ip , s ta keh old ing , th e role of in form al ne t wo rks an d gove rna nce , etc . , p ro v id e so me in te re s t ing newsites of struggle.

Th er e are thr ee mai n fo rm s of wel far e del ivery: (1) col lect ively

organ ized soc ia l insurance l ead ing to f inanc ia l en t i t l ements in the caseof ce r ta in con t ingenc ies , such as unemployment , s i ckness , p regnancy or re t i rem ent ; (2 ) red i s t r ibu t ion th rou gh the f i sco- f inanc ia l sys tem, inc luding no t only t rans fer pa ym en ts bu t a lso f is cal welfa re and s ta t e-subs id ized occupa t iona l we l fa re and s ta te - subs id ized pr iva te p rov is ionof goods such as housing and var ious other tax re l iefs ; and (3) col lect ive

Nonetheless , even the best recent work on this and other aspects of welfare reform fai ls to consider the fourfold l inkages between changes

in economic and social pol icy, the rescahng of the capi ta l is t s ta te , and thechanging forms of governance. Rais ing the quest ion of these l inkages(without c la iming to have ful ly resolved them) is the main a im of the

present work. So, whi ls t th is chapter can and must be parasi t ic uponth e best re ce nt wo rk for i ts analyt ical ins ights and empi r ic al deta i l , i t s

pr incipal a im is not to repeat or cr i t ique that work but to contextual izethe changes that are identified therein. Thus I will give more weight tothe s t ruc tura l impera t ives and changes in the ba lance o f economic and

pol i t ical forces and the resul t ing qual i ta t ive shif ts in the economic

and social pr ior i t ies of the welfare s ta te that are bound up with thetransit ion to post-Fordism. It is this set of qualitative shifts that I seek tocap tur e wi th my conc ep t o f the SW PR .





15 0 Socia l Reproduc t ion an d the W or kf ar e S tate

re terr i tor ia l izat ion of economic and social spaces and a dia lect ic of g loba l iza t i on- r eg iona l iza t ion . Th is has m ad e i t ha rd to con t inu e co l lect ive consumpt ion in i t s KWNS form - a s i tua t ion worsened by neo l ibera l

pressures to pr ivat ize s ta te act ivi t ies as far as possible .I n i m p o r t a n t r e s p e c t s t h e K W N S i n A t l a n t i c F o r d i s m h a d a l r e a d y

'gr own to l imits ' (Fl ora 1986-7) by th e ear ly 1980s. A l t ho ug h th e t ran sit ion f rom a social insurance or social secur i ty s ta te (Sozialstaat) t o m o r ecomprehens ive wel fa re reg imes had begun in the in te rwar per iod , i t wasdur in g the years o f pos t war eco nom ic expan s ion tha t we l fa re s ta tesreached matur i ty ( see chap te r 2 ) . As no ted above , o f course , some la tede ve lo pi ng welf are s ta tes s ti l l ha d r o o m for gro wt h. Bu t i t i s genera l ly

t rue tha t the K W N S was compr ehe ns i ve , be in g bas ed pr im ar i ly on pas t , p resen t o r fu tu re par t i c ipa t ion in the l abour marke t and /or on na t iona lc i t i zensh ip (hence t end ing to marg ina l ize immigran t o r non-na t iona lla bo ur and t re at i ng th em as second-cl ass c i t izens , i f a t a ll ) . Like wis e, th eK W N S did gener al ly cover mos t f ie lds of everyd ay, l i fe t im e and intergenera t iona l soc ia l r eproduc t ion , o ffe red un iversa l o r near-un iversa l

provis ion with high income replacement ra tes for the insured and, for c i t izens in i ts in co me t ransfer pr og ra mm es , pr ov id ed for a univ ersa lnat ional educat ion system and a more or less extensive social izat ion of

basic medical care . Fur thermore, i t was general ly susta ined by high levelsof tax at i on com pa re d to the era of th e l iberal s ta te .

Ho we ve r, whi l e the re wer e econ omi c and po l i t i ca l l imi t s to fu r ther exp an sio n of this type of wel far e stat e in a capitalist soc iety, espe cial ly asan ins t ru men t o f eco nom ic and socia l r ed i s t r ibu t i on , the re a re a lso th r eevery impor tan t l imi t s to wel fa re re t renchment . F i r s t , some form of ex t ra -eco nom ic re pro duc t io n of l ab our -po wer as a f i ct i tious com mod i ty bo thindividual ly and in the aggregate is essent ia l to capi ta l accumulat ion (seecha p te r 1 ) . Mo re ov er , wh e t he r o r n o t t h e cap i tal i s t ty pe o f s t a te i s d i rec t ly

involved in i ts delivery in the first instance, i t is nonetheless expected toserv e as th e social re pr od uc er of labou r- pow er in the las t resor t .^ Thus ,whi le th e respe c t ive respons ib i l i t ie s an d bou ndar ies o f mar ke t , s t a te an dcivil societ y ma y shift , th er e is st il l an im po r ta nt stee ri ng rol e for the state .An in te res t ing recen t example o f th i s i s found in the compet i t ion be tweenna t iona l s t a tes to rec ru i t sk i l l ed workers f rom abroad to suppor t the i r kno wl edg e- bas ed accumul a t io n s t ra teg ies - jus t a s they ha d ea r l i e r sough tto rec ru i t unsk i l l ed workers f rom abroad to under take work tha t was too

physical ly demanding, di r ty, oppressive in i ts working condi t ions , i l l -paid,

unsoc ia l in i t s hours , o r o therwise economica l ly o r soc ia l ly unaccep tab lefor their own ci t izens dur ing the Fordis t boom. Second, there are importan t ins t i tu t iona l l imi t s to wel fa re re t renchment th rough the e ffec t s o f

po l icy inher i t anc e , p r og ra mm e iner t i a and the overa l l a rch i t ec tu r e o f thesta te . These l imits are re inforced by the potent ia l ly disrupt ive conse-



Socia l Reproduct ion an d the W or kf ar e S tate 151

que nce s of rap id and drast ic cuts in welf are on the wi der ec on om y thatwould a r i se f rom the s t ruc tura l coupl ing and mate r ia l in te rdependence o f we l fa re s ta tes and marke t economies . For the pas t deve lopment o f thewelfare s ta te produces a specif ic s t ructure of economic organizat ionref lect ing i ts di fferent ia l impa ct on opp or tun i t i es for prof i t . Neo l ib er aldiscourse emphasizes the a l legedly harmful 'crowding out ' effects of publ ic spending, however i t i s f inanced, as wel l as the unproduct ive natureof tax at i on and s ta te bor ro wi ng. But susta i ned and cons is te nt publ i cspending also induces s t ructural changes in supply and demand (e .g . ,social - in dustr ia l co mp le xe s l inked to specific pat ter ns of publ ic sect or we l fa re spending on cap i ta l p ro jec t s , consumables and se rv ices ) tha twould be more or less severely disrupted i f radical cuts were made andthe f i rms or sec to rs a ffec ted cou ld no t re too l , r es t ruc ture o r red i rec t theresu l t ing p roduc t ion in an accep tab le t ime hor izon .

Thi rd , the re a re the po l i t i ca l hmi t s to wel fa re re t renchment tha t a reroo ted in the po li t i c s o f rep re se n ta t io n (espec ia l ly e lec to ra l dyna mic sand the mobi l i za t ion o f soc ia l movements ) , the in te rna l o rgan iza t ionof the s ta te app ar a tu s (ves ted depar tme nta l and min i s te r ia l in te res t s ,the mult i - t iered nature of welfare del ivery, the presence of the welfare

profess ions , the r ights of s ta te employees , e tc) , and the poht ics of in te rven t ion ( l ega l ly en t renched c i t i zensh ip r igh t s , soc ia l pa r tnersh ipdyn ami cs , th e res i dual p ow er of 'pol icy- take rs ' , e tc . ) . This will inevi tabl y be ref lected in the balance of forces a t any par t icular moment in a changing con jun ctu re an d indi cate s the need for me di um -t er m st ra tegies tot rans form the s t ruc tura l cons t ra in t s and mobi l i ze new po l i t i ca l a l l i ancesto counteract the ins t i tu t ional iner t ia and vested interes ts that favour ma in te na nc e of th e s ta tus quo. In short , the re is a s t ra tegic select ivi ty towel fa re re t renchment in p roduc t ion and wel fa re reg imes tha t in te rac t swi th the more genera l con t rad ic t ions assoc ia ted wi th the charac te r o f

labour-power as a f ic t i t ious commodity:

The broad social coalitions supporting the welfare state status quo preventcentrist and even right-wing parties from implementing, or even advocating, significant cuts in entitlements. Thus, to the extent that economic difficulties 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 theright and the left. (Huber and Stephens 2001:167)

Th us , whi l e the re is sc ope for so me red es ig n of welf are del ivery an d th erea l lo cat ion of th e bu r d en s of social welfare , the se thr ee sets of factors(among others) l imit the economic and pol i t ical scope for wholesalecu t s in pub l ic p rov is io n wi th ou t com pen sa t ing change s e l sewhere . For,whether performed in the pr ivate , publ ic or the thi rd sectors , social




reproduc t ion necessa r i ly invo lves cos t s . Moreover, a t t en t ion mus t be paid to the quality as well as the cost of securing such reproduction inone way or ano the r. The case of pr i vat i zed he al t h car e in th e U S A is part icular ly noteworthy, i f not notor ious , here; for i t provides very unequalor non- ex i s ten t coverage and i s genera l ly mo re expens ive than Eu ro pe an

publ ic heal th systems. There is much more scope, however, to refunc-t ional ize welfare spending at or around the levels prevai l ing in par t icula r reg i mes in resp onse to change s in acc umu la t ion reg ime s , mod es o f regu la t ion and the i r a ssoc ia ted ins t i tu t iona l ized compromises .

4. Towards the Workf are State

Changes have occurred in a l l three s i tes of KWNS welfare; insurance,f isco-f inancial redis t r ibut ion and col lect ive consumption. Across a l l threeareas , we ha ve bee n witnes sing th e incr eas ing subor din at i on of social

policy to economic policy, although, of course, this remains far from total .This ch ap te r ident i f ies th re e re la ted dime nsi ons of welf are red esi gn,res t ruc tur ing and reor ien ta t ion . F i r s t , the re a re qua l i t a t ive changes insocial policy and its articulation to economic policy, with the latter being

acco rde d gre a te r p r imacy. Second , the re i s inc reas ing dow nwa rd pre ssure on the social wage considered as a cost of ( internat ional) production and/or as an electoral l iabili ty in the face of tax resistance - reflectedin cos t -cu t t ing o r, a t l eas t cos t -co n ta i nmen t , me asu re s and the redes ignof soc ia l t r ans fe rs to make them more p roduc t ive . And , th i rd , changesare bei ng m a d e in the fo rm s and fun ct i ons of col lect i ve co ns um pt io n. Ii l lus t ra te these changes f rom po l ic ies fo r unemployed workers , theredes ign of pen sio n pol icy to redu ce the long -ru n costs of pen sio n pr ovis ion an d pr om ot e the f inanci al services sector, and th e res t ru ctu r in g of

th e edu ca ti on sys tem in eff orts to re ali gn it wit h th e alleged ne ed s of aglobal iz ing, knowledge-based economy. This choice is t ied to the econo mi c and po l it i ca l s ign i fi cance o f un em pl oy me nt , the fac t tha t pens ionsconst i tute the largest i tem in the c ivf l ian budgets of most advanced capi ta l is t s ta tes (with heal th typical ly the second biggest budget l ine) , andeduc a t io n ' s key ro le in eco nom ic de ve lo pm en t and na t io n-bu i ld ing . Amo re ex te nd ed t re a tme nt o f we l fa re s ta te res t ruc t ur in g in o ther f i e lds o f social policy, especially health, would be desirable in a longer work, butth os e cho se n ar e sufficiently significant to identify th e ma in tren ds.

The increasing subordination of social policy toeconomic policy

Global izat ion as def ined in chapter 3 (and hence with a meaning far b roader than tha t adopted in mos t recen t s tud ies o f g loba l iza t ion and



Social Reproducti on a nd the Wo rkf are State 1 5 3

social policy) has two key features that affect the KWNS. First , i t is l inkedwi th an economica l ly expanded and soc io log ica l ly enr iched no t ion of compet i t iveness - even i f neo l ibera l g loba l iza t ion p ro jec t s somet imesfai l to give this ful l publ ic recogni t ion. And, second, i t enhances theopportuni t ies for a t leas t some capi ta ls , especiaUy f inancial capi ta l

p rov id ing t ran spa re n t f in anc ia l p rodu c ts , to mo ve ac ross bord ers . Co m b ined wi th inc reas ing in te r-u rban and in te r reg iona l compet i t ion wi th inna t iona l eco nomi es , th i s ex te nds and re in forces cap i ta l ' s ex i t opp or t un it ies . Together these features tend to t ransform pr ior i t ies in social pol icy,espec ia l ly in re la t ion to the l a t t e r ' s impac t on compet i t iveness . However,s ince , a s em ph as iz ed in cha p te r 3 , the re a re d i ffe ren t und er s t an d in gs o f comp et i t iven ess , pr ior i t ies can be reset in different ways. A Ric ar dia nnot ion of compet i t iveness , for example, might indicate a need to cutsocial spending in increasingly open economies . For i t suggests that suchspe ndi ng is a cost of pr od uc t i on , is re la te d mo re to popul is t de ma nd s andsoc ia l eng ineer ing than to economic per formance , i s an unproduc t ivededuc t ion f rom revenues tha t cou ld be be t te r spen t by ind iv idua lec on om ic agen ts in th e mar ket , and is a so ur ce of r igidi t ies in the

p roduc t ive sec to r. Other accounts o f compet i t iveness cou ld l ead in o ther d i rec t ions . Thus an account o r ien ted to sys temic o r s t ruc tu ra l compet it iveness would give less emphasis to the absolute or re la t ive cost of fac to rs o f p roduc t ion and more to the i r r e la t ive con t r ibu t ion to economicoutpu t ; l e ss to the economic and more to the ex t ra -economic d imens ionsof com pet i t i ven ess ; less to th e im me di at e tax costs of social spen di ng an dmo re to i ts long- te rm con t r ib u t i on to p ro duc t io n ; an d less to the im media te ly unproduc t ive na ture o f soc ia l expendi tu re and more to i t s ro le inco mp en sa t i ng wor ker s (and o th er adverse ly a ffec ted soc ia l fo rces ) fo r the r isks an d dis rup t ion s invo lved in in ter nat ion al t ra de. Focus ing onthese aspects of social spending would be less l ikely to generate demands

for abso lu te wel fa re cu t s as opposed to i t s r edes ign and reor ien ta t ion .In ter a l ia, th is suggests that , a lon gside th eir sup po rt for ind ivi dua l c i t izens and their dependants , social welfare could play a key role in socializ ing th e costs of adjus tme nt in op en ec on om ie s as the se affect f i rms,ci t ies or regions, and nat ional economies . In both cases , however, growingin te r na t ion a l iza t ion , whe the r seen in t e r ms of Ric ar d ia n o r s t ruc tu ra lcompet i t iveness , i s l inked to the subordinat ion of social pol icy to thea l leged demands o f economic compet i t iveness . Th is i s an impor tan t qua li ta t ive shif t that is independent of any quant i ta t ive changes, and i t rep

resents a s ignif icant change in the nature of the welfare s ta te and i ts rolein soc ia l r eproduc t ion .

The resu l t ing reorder ing of the re la t ion be tween soc ia l and economic policy has passed through three main stages. In the init ial crisis in/of At lan t ic Fo rd is m dur ing th e 1970s, welf are s ta te act ivi ty and spe ndin g was




inc re ase d. In part , this was a reflection of th e aut om at ic stabil izer s builtin to the KWNS such tha t r i s ing unemployment t r iggered inc reasedwelfare spending as wel l as lower tax revenues; and in par t i t was motiva ted by hope s o f res to r ing the condi t ions fo r For d i s t eco nom ic expansion. W h e n this seem ed to have fa i led to ov er co me s tagf la t ion, th e welfa restate was portrayed on the right as a source of rigidities in the labour ma rk e t and as add ing to cos t s o f p ro duc t io n . Th is p r om pt ed dem an ds fo r chang es in th e welfare s ta te to en ha nc e lab our m ar ke t f le xibi l i ty an d toreduce costs . This is ref lected f rom the 1980s onwards in the t ighteningof e l igibi l i ty cr i ter ia for unemployment benef i t and social ass is tance andin a t tempts to reduce ent i t lements and/or put t ime l imits on them. Thesecond per iod over laps with the beginnings of a thi rd s tage that can beseen more clearly in the 1990s. This involves giving more emphasis toac t ive l a bou r ma rk e t po l ic ies and increas ed coord i na t ion o f une mpl oyme nt benef i ts and ' in-work ' benef i ts to dem on st ra te that 'w ork pays ' .^

The second and third s tages differ f rom the ideal- typical KWNS,especial ly in i ts l iberal form, with i ts more passive approach to unem

p loyment . For, whi le macroeconomic po l icy t a rge ted fu l l employment ,un em pl oy ed wor ker s rece iv ed pass ive suppo r t un t i l jobs bec am e ava i lable again (cf. Mishra 1985). This support took two main forms. For thosewi th suff ic ien t l abour marke t exper ience , unemployment and re la ted

benef i ts based on social insurance were paid; conversely, those who didno t qualify for su ch benef its re ce iv ed social assi stan ce. In con tr as t , th eS 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 p o l i c y t h r o u g ha combina t ion o f measures to c rea te the condi t ions fo r fu l l employab i li ty in the l abo ur ma rk et and of act ive pr ep ar at io n of so me or a ll of th eunemployed to he lp them back in to work . Thus , one o f the major fea tur es of re cen t cha nge s in social re pr od uc t i on is th e rol l -out of ne wreg imes , rhe to r ics and rou t ine s o f 'workfarisf r egu la t ion to rep lace thena t iona l f ramework of an a l l eged ly c r i s i s -p rone wel fa re s ta te o r 'wel-

farisf re gim e (see Pe ck 2001) . A basic fe at ur e of this ne w app ro ac h is i t srol e in enc ou ra gi ng and /or enf orci ng wo rk th ro ug h act ive for ms of sociala n d e m p l o y m e n t p o l i c y a n d t h e d e v e l o p m e n t o f t r a n s i t i o n a l l a b o u r ma rk e t s in ten ded to sm oo th the pa t h (o r t r a ns i t ion ) f rom wel f a re in towork. I t has be e n adv oca te d at al l levels of pol icy for mul at io n and impleme nt a t io n f rom the O E C D ( in i ts job s s tudy, O E C D 1994) a nd the EU(for ex am pl e in the 1993 Wh it e Paper , Growth, Competitiveness, Employment, or the 1995 EU report. Social Protection in Europe, as well as at

a ser ies of eco nom ic sum mits ) th rou gh na t ional s ta tes to th e reg ion al an dlocal level (for ge ne ra l sur vey s of this shift fr om passive to active la bo ur market policy, see Kalish et al . 1998; Peck 2001; Schmid 1996).

Th e act ivat ion app ro ac h is mo re or less univ ers al in the ec on om icspa ce of At la nt ic Ford ism , bu t i t ca n take different for ms. Firs t , in l iberal



Socia l Reprodu ct ion an d the W or kf ar e S tate 15 5

welfare regime s, th e emp has is has fa l len on wage f lexibi li ty, re du ct i onsi 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 s o c i a lass i s tance , and the abo l i t ion o r reduc t ion o f min imum wages . Thenor the rn and an t ipo dea n l ibe ra l r eg imes , in par t be ca us e o f the i r s t a t es t ruc tur es and in par t bec aus e the i r we l fa r e en t i t l em ents a r e l ess wel len t re nch ed , a re be t t e r ab le to imp os e the se change s f r om ab ove wi tho u tse r ious consu l ta t ion . However, fo r the reasons no ted above , th i s may no t be the op t i mal so lu t ion eco nomi ca l l y in the me di um - to long- te rm ; an di t could be damaging electoral ly because i t exposes the responsiblen e o l i b e r a l g o v e r n m e n t s p o l i ti c a l ly s h o u l d m a r k e t f a i l ur e r e - e m e r g e(Taylor-Gooby 2001b: 10-11) . Second , soc ia l democra t ic we l fa re reg imesh a v e t e n d e d t o i n te n si f y 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 tan d ac t ive l abour m ar ke t po l ic ies , bu t ha ve g iven th em a ne w workfa r i s tinf lect ion whils t maintaining re la t ively high levels of publ ic welfarespe ndi ng (see pp. 1 56, 158) . A thir d pa t t er n is fou nd in th e con ser vat ive -corpora t i s t o r Chr i s t i an democra t ic reg imes . These re ly heav i ly on payrol l taxes ra ther than on general taxat ion to f inance social welfare ,and thei r wel l - organi zed social pa r t ne rs te nd to bel ieve they ha ve pr oper t y r igh t s in the wel f a re reg im e . Th es e reg im es the re fore face a ' con t inental di lemma' (Scharpf 1997) that is generated by a ' sc issors effect ' .

O ne bla de of this invol ves gro win g inact ivi ty ra te s tha t are largely du eto r i s ing l evel s o f un em pl oy me nt and (o f ten ea r l y ) re t i re men t ; the o t he r

b la de invo l ves inc reas ing publ i c exp end i tu re base d on en t r enc he d insura n c e - b a s e d a n d c o r p o r a t i s t - m e d i a t e d e n t i t l e m e n t s . T h i s h a s p r o m p t e dn e g o t i a t i o n b e t w e e n t h e d i f f e r e n t 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 twith the aim of seeking ways to reduce the cost of the social wage for f i rms and t rans fe r i t to genera l t axa t ion wi thou t t r igger ing wage demandsto enab l e emp loy ees to ma in ta in the i r r ea l d i sposab le inc om e a f te r inf la t ion an d taxa t ion ( see a lso Ta yl or -G oo by 2001b ) .

Even where ac t iva t ion po l ic ies were a l ready an impor tan t pa r t o f theK W N S sys tem (e.g ., in the No rd i c eco nom ies ) , wor k ob l iga t ions have be co me mo r e expl ic i t , s t r ic te r and ma nd at or y in the 1990s. I t i s no long er a quest ion of whether or not the jobless should par t ic ipate ui a

p r og ra mm e, bu t ra ther o f the p ro gr am me in to which they shou ld beenrol led, wfl l ingly or not . I t has become harder to refuse par t ic ipat ionand the au thor i t i e s have ga ined powers to sanc t ion non-par t i c ipa t ion . Inaddi t ion , th e disc ours e has shif ted f ro m en t i t le me nt s to obl igat ions , es pec ia l ly as re gar ds the yo un g un em pl oye d . Toge th er wi th a res t ruc tur i ng of

social services to target unemployment and social exclusion and to cutsocial ass is tance costs , th is amounts to a general movement away fromthe soc ial demo cra t ic t r ad i t ion ( J ohanss on 2001: 70- 4) .

Th er e are four ke y aspects , for pr es en t pu rp os es , in act ivat ion pol ic ies : (1) they aim to enhance the f lexibihty of labour markets ; (2) they




seek to enhan ce wor ker s ' em ployab i l i ty and t ra ns fo rm th em in to en te r prising subjects in a post-Fordist world where jobs for l ife can no longer be gua ra nt ee d an d should no longer be expec ted ; (3) ra t her tha n involving s tandard nat ional pol ic ies and measures , they re ly far more on localagencies to design and manage pol icy in an exper imental manner in the

belief th at this will pr od uc e sol uti ons that me et local ne ed s an d th at canmobi l i ze local s t a kehold ers , com pet enc ies an d reso urces ; and (4 ) they a re

be ing inc reas ing ly o r ien ted to the know led ge- bas ed econom y, resk i l l ingand l i fe long learning. Thus unemployment benef i ts are l inked to work,t ra in ing or o ther p rogrammes des igned to he lp the unemployed move

back into employment . Act ivat ion pol icy a lso extends into educat ion andtraining and not jus t un em pl oy m en t ins ur anc e and social secur i ty.* Th eme th od s adop te d to ac t iva te wor ker s may be mo re o r l e ss coerc ive o r empowering (Peck 2001); the targets a lso vary within and across regimesand over t im e - inc lud in g the reg i s te red u nem plo yed , lone par en t s andthe disa ble d (Ro bi ns on 1998: 87) ; and the cost and du ra t i on of pr ogrammes can range f rom cheap and qu ick to qu i te cos t ly and ex tended

programmes based on re t ra in ing . Th is i s ev iden t in the con t ras t be tweencoerc ive neo l ibe ra l job-s earch - focu sed wel fa re - to -work tac t i cs th r oughextended re t ra in ing and resk i l l ing p rogrammes to the s t i l l more com

prehens ive Dutch ' f l ex icur i ty ' approach and Danish job ro ta t ion andwor k leave schem es (He mer i jck and Man ow 2001; J0 rg en se n 2002;Torf ing 1999; Wi l t ha ge n 1998) . In so me cases th e ch ea p and quick app roa ch is com bin ed with s ta te subs idies to wor king hou se ho lds , esp ecial ly with chi ldren, so that their net incomes in employment can r iseabove the poverty l ine and the f iscal pover ty t rap can be reduced. Thistends to subsidize employers paying low wages as wel l as to involve f iscalred i s t r ibu t ion to the poor in a new gu ise ( see Robinson 2000) . None theless , in gener al , the overal l effect of act iva t io n pr og ra mm es is on e of

expl ic i t or implic i t d isent i t lement - in the former case through directcuts , in the la t ter through shif ts in work pat terns when benef i ts remaint ied to s tandard l i fe-work cycles (Rhodes and Meny 1998: 11) .

More general ly, act ivat ion pol ic ies can be placed on a cont inuumr u n n i n g f r o m f l e x p l o i t a t i o n t o f l e x i c u r i t y. F lexp lo i ta t ion re fe r s to ' thean t i - wo rke r aspec t s o f f l ex ib i l i ty ' (G ra y 1998: 3 ) , e spec ia l ly the comb ina t ion o f inc reased coerc ion on the unemployed to f ind work andincreased insecuri ty for those in work. Flexploi ta t ion is par t icular ly assoc ia ted wi th neo l ibera l workfa re measures and tends to inc rease soc ia l

exc lus ion (C oo k e t a l 2001; Gl yn an d Wo od 2001; H a ug ht on e t a l 2000;Hy de et al . 1999; Jon es and Gr ay 200 1; Pe ck and Th eo do re 2000) . In contras t , f le xicu r i t y, a l th ou gh an Engl ish wor d, wa s co ine d by the Du tc h in1995 to refer to a new range of pol ic ies intended to make labour marketsmore f l ex ib le a t the same t ime as p rov id ing grea te r soc ia l and employ-



Socia l Reprod uct ion and the W or kf ar e S ta te 1 5 7

ment security for t t iose in or out of work, and improving social inclusionfor a ll labo ur ma rk et par t ic ipa nts (s ee Wi l t hag en 1998: 21) . Du tc h f lexicurity aims to provide the security of a job (but not security in a job) for core workers as wel l as cont ingent , a typical or f lexible workers , and tosupport th is through a correspondingly f lexible system of social secur i tyand act ivat ion pol ic ies . I t i s par t icular ly concerned to es tabl ish good t rans i t iona l l abour marke t s to smooth the pa th o f the unemployed in to work .Thus i t i s com mi t t ed to the ' e mp ow er me nt o f wor ker s , o rgan iza t iona lcoopera t ion ( in ne tworks and pr iva te -publ ic par tnersh ip) , dynamic e ff ic iency, l ead ing to e ffec t ive employment p romot ion , and sus ta inab lee 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 " ) ' ( Wi l t h a g e n 1 99 8: 1) . M o r egeneral ly, f l ex i cur i t y t en ds to be assoc i a ted wi th neo- cor pora t i s t ba rgaining and social pacts on a number of scales ( for a general review of ' f l ex icur i ty ' - type ac t ive l abour marke t a r rangements in Europe , seeSchmid 1996) .

Downward pressure on the social wage

Despite the crisis that began to emerge in the late 1970s, state budgetsre m ai ne d hig h in th e 1980s an d co nt in ue d to r ise in th e 1990s (G ar re t t1998, 2001; Garret t and Mitchef l 2001; Huber and Stephens 2001) .Demands fo r cu t s in s ta te spending on the g rounds tha t i t b lockedecon omic g r ow th had a l r eady be gu n to a t t rac t wide a t t e n t io n in themid-1970s and the O E C D soon jo i ned th e chor us fo r cu t s in 1981 ( O E C D1981) . This ref lect s th e view th at the social wa ge re pr es en te d by welfar espending is a cost of product ion l ike the individual wage and that taxat io n is a lwa ys a dis incen t ive to effor t , savings a nd in ve st me nt . This is assoc ia t ed in tu rn wi t h a pub l ic bur de n mod e l o f we l fa re , wh ich has be endef ined by Wi ld ing as ' the v iew tha t m u c h t rad i t iona l we l fa r e expe nditu re i s an unp ro duc t iv e bu rd en on th e p r odu c t i ve s ide o f the eco no myand should therefore be reviewed and reduced ' (1997: 417) . This can becont ras ted wi th an a l t e rna t ive v iew tha t t axes a re the p r ice o f admiss ionto a c iv i l i zed soc ie ty (Hut ton 2002) . Notwi ths tand ing such demands ,how eve r, th e cr is is led to highe r ra th er th an lower spendi ng. I nde ed, the1980s saw a more marked mean annua l inc rease in pub l ic expendi tu reacross a l l welfare regimes than had occurred during the 1970s, the per iodwh en th e K W N S ha d re ac he d i ts pea k and bega n to d i sp lay c r i s i s sym pt o m s ( H u b e r a n d S t e p h e n s 20 0 1 : 2 0 7 ) . T h i s c o n t i n u i n g i n c r e a s e p r o m p t e d

the O E C D in th e ear ly 1980s to ask qu i t e logical ly w he th er this t r en dre f lec ted the t emporary cos t s o f managing the t rans i t ion o r impl ied tha tthe s ta te welfare budget would a lways remain a t these levels . I ts off ic ia lswe re opt imis t ic en ou gh at th at t im e to ma in ta in tha t ' it should be po ssible to maintain the gains in secur i ty and services which were reached




in tiie 1960s and 1970s, and to improve tliem in line with the rate of econo mi c gr ow th , but not fas ter ' ( O E C D 1985) . I t soon bec am e less sanguine , how eve r, and , tog e th er wi th the IM F, re co mm en de d the redes ignof social policy around three goals; (1) increased efficiency in the delivery of government goods and services and m programme eff ic iency; (2)a rev iew of spe ndi ng pr ior i t ies and pr og r am m e object ives; an d (3) thedevo lvin g of so me publ i c respon sibi l i t ies to the pr iva te secto r (O xley an dMart in 1991) . And more recent ly s t i l l , whi ls t maintaining this l ine and thed e m a n d f o r 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 example, in the area of pensions, on which see below), i t has also

begun to put more emphasis on the need for a human capi ta l approachto the res idua l we l fa re s ta te (OECD 1994 ,1999) .

These t rends in publ ic spending outcomes are best in terpreted in con junc t i on wi th s ta te reve nues . Thus , wh er ea s expe ndi tu re inc re ased faste r than revenue in the 1970s, revenue grew faster than spending in the1980s, indicat ing an a t tempt to reduce def ic i ts even as expendi ture cont in ued to inc reas e . Th is pa t t e rn con t in ued in to the 1990s , as gove rnm ent ssought to inc rease revenues and re in back spending (Huber andStephens 2001: 207) . There is a lso evidence that the higher spendingwelf are s ta tes hav e mo ve d closer to th e t r en d l ine of 'e xp ec te d ' spending th an those that un de rs pe nd re la t iv e to their typ e of re gi me (A lb er and Standing 2000) . A fur ther indicat ion of the s t ruggle to reduce spending is the reduced s ignif icance of par t isan control and accumulated part i san inc umb enc y over gove rn me nt spendi ng f rom the 1970s th r oug h tothe 1990s, suggest ing that external constra ints are l imit ing room for m a n o e u v r e ( H u b e r e t a l 1 9 9 9 : 1 9 0 - 2 ) .

Mo re ov er , wh en one tu rn s to the woo d ra th er th an the t rees , we f indtha t ' [ e ] ve ry where p rogrammes of benef i t cur ta i lment and re t renchmentar e on th e age nda ; an d th e diff eren ces are of deg re e and of th e vig our with whi ch these pol ic ies are push ed ho m e ' (Tay lor -G oob y 1996: 214) .Or, as Bonol i e t a l . c la im in regard to Europe welfare regimes:

There is now general agreement that the bulk of the social legislation introduced in recent years is intended to reduce the role of the state in welfare.Policies that lead in the opposite direction play a subordinate role.... Thismass of restrictive social legislation consisted of several overlapping types.Some new policies have reduced the level of cash benefits, restricted entitlement and reduced the period for which the benefits can be paid. Other

legislation increased the payments made by users of the health, educationand social care services. Still other legislation made the provision or theadministration of some of the cash benefits the responsibility of employers 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

Socia l Reproduc t ion an d the W or kf ar e S ta te 15 9

There a re many ways in which th i s downward pressure i s expressed .I have a l read y no t ed t he ro le o f cut s in un em pl oy me nt benef i t an d the i r ar t ic ulat i on with act iva t io n pol ic ies and 'w or k pays ' s t ra t egies . Th er e isa l so a ge ner a l ex ten s ion of mean s- te s t ing fo r mar g ina l wor ker s , un em ployed and lone parents - th is response is especial ly common in l iberalreg imes . There a re a t t empts to t rans fe r r i sk and uncer ta in ty to ind iv idua l s th rough increased emphas i s on p r iva te p rov is ion and c iv i l soc ie tyra the r tha n on s ta t e guara n te es (e .g. , th r oug h var ia t ion in pen s io n fun d

per fo rma nce an d an nu i t y ra t es upo n re t i r eme nt ) . Th e overa l l r esu l t i sinc reas ing dependence on the marke t fo r an income adequa te to sus ta inth e social ly ac cep ted levels of co ns um pt io n or, in oth er word s , an incr easing admin i s t ra t ive rec omm odi f ica t ion o f l ab our -po wer (B onol i e t a l.2000; Offe 1984; P ie r son 2001a) . And , indeed , where neo l ibera l po l ic ieshave re in forced segmented and dua l i s t i c l abour marke t s , the resu l t ingf lex ploi ta t ion wil l a lso lead to inc re ase d im po ve ri sh me nt and socialexc lus ion .

More general ly, insurance has been par t ia l ly pr ivat ized or placed inthe thi rd sector. This approach is sometimes l inked to promotion of ' p o p u l a r c a p i t a l i s m ' , a p r o p e r t y - o w n i n g d e m o c r a c y, a n d w i d e r s h a r eownersh ip ; bu t e l sewhere i t i s l inked to wider communi ty par t i c ipa t ion ,a s takehold ing soc ie ty, and publ ic -pr iva te par tnersh ip invo lv ing NGOs.There were precedents for this in the old corporat is t welfare regimes andtr ipar t i te social democrat ic regimes, where t rade unions had a key rolein insurance . F i sco- f inanc ia l r ed i s t r ibu t ion t ends to become more se lect ive and targeted as a means of containing costs . And, in the context of S c h u m p e t e r i a n p o l i c i e s f o r c o m p e t i t i v e n e s s , f i s c o - f i n a n c i a l r e d i s t r i b u t i o ni s a l so l inked to p romot ing ra ther than to modera t ing inequa l i t i e s . Th isis ref lected in the tendency for 'welfare for capi ta l ' to expand at the sametime as 'welfare for labour ' contracts , as wel l as more general forms of we l fa re res t ruc tur ing and re t renchment . I t i s a l so l inked to the neo l ibe r a l S c h u m p e t e r i a n t e n d e n c y t o p r o m o t e u n e v e n r e g i o n a l d e v e l o p m e n tra ther than to compensa te fo r i t .

Pensions

A useful case s tudy in this re ga rd is t h e de ve lo pm en t of pens ions . Thisi s an im po r t an t f i e ld o f pub l ic exp end i tu re bec ause pens ion s bec am e themost cost ly s ingle i tem in governments ' social budgets in the 1990s andshould the r e for e hav e be co me a majo r t a rg e t fo r re t r en ch me nt , e sp ecial ly as there is rapid ageing of the populat ion ( including the heal thc a r e - i n t e n s i v e p o p u l a t i o n a g e d 7 5 y e a r s o r o l d e r ) . ' I n d e e d , t h e O E C Dhad already ident i f ied this as a major problem for welfare s ta tes in the1980s; and the World Bank has recent ly been pushing for a system of



16 0 Socia l Reproduct ion an d the W or kfa re S tate

p r iva te def ined con t r i bu t i on pens ions to redu ce the bur den of pens ionson s ta te budge ts . Pens ion re fo rm i s a l so in te r es t i ng bec aus e i t con t ra s t swi th the case o f un em pl oy me nt benef i t , whi ch rep res en t s a smal le r p ro

por t ion o f s t a te budge ts even when i t i s r e la t ive ly h igh . Whereas unem ployment benef i t has been cut as par t of a package of act ive re integrat ionof the un em plo yed in to the l ab our mark e t , pens io ns have been sub jec tt o g r e a t e r d o w n w a r d p r e s s u r e .

The se dem ogr ap hic p res sure s a r e co m mo n to a ll indus t r i a l count r i esand this is reflected in the fact that almost all states have acted to reducesta te expendi ture on re t i rement pensions or, a t leas t , to reduce i ts ra teof in cr ea se an d to fi nance it in differe nt way s. Thu s, as Bon oli et al . not e:'I n the 1980s, an d ev en m o r e so in th e 1990s, th e dire ct ion of ch a ng e in

pens ion po l icy has rever ted f rom overa l l expans ion to re t renchment . Asa resu l t , in the cu rr ent s i tuat ion , the te rm "pe ns io n re fo rm " is incr easingly used as a synonym for cuts in old age pensions' (2000: 30). Thisc la im i s conf i rmed by da t a fo r e igh t een O E C D coun t r i es p ro v id ed byHuber and S tephens , who fur ther show tha t l ibe ra l we l fa re reg imes a rethe m ost l ikely to cut and social de mo cr at ic re gim es th e mo st i m m u nefrom cuts (2001: 208-9) . Yet i t i s the Chris t ian democrat ic conservat ive-corpora t i s t r eg imes tha t a re mos t vu lnerab le to these demographic p ressures by v i r tue o f the g rea te r inc rease in the i r dependency ra t io o f

pe ns io ne rs to wag e ea rn er s and the na tu re of the ir pen sio n systems.

In genera l , a l l governments have p re fe r red low v i s ib i l i ty re forms ,which can be seen as part of a 'strategy of obfuscation' to disguise theex ten t and impac t o f changes over t ime (P ie r son 1995: 19-22) . Amongthe measures used to disguise the extent of cuts are:

1 A shift in in de xa ti on of pe ns io ns to prices rat he r th an wag es. Thiscon t ras t s wi th the pos i t ion in At l an t ic Ford i sm, wh er e pens ions werel inked to wages an d th e la t te r we re l i nked in tu rn to pro duct ivi ty andinf la t ion. Co upl ed with an ext ens ion of qual i f ying yea rs re qu ir em en tsand a reduct ion in ear ly re t i rement incent ives , th is wfl l s teadi lyre duc e the l eve l o f ind iv id ua l pen s io ns re la t ive to aver age ea rn edi n c o m e s .

2 A shift f r om pay- as- you- go pe ns io ns sys tem s (effect ively a col lect ivein te rgenera t iona l red i s t r ibu t ion f rom the ac t ive l abour fo rce to theret i red that is f inanced from general taxat ion) to pre-funded systems(effect ively a me a ns of re dis t r ibu t i ng in co me ove r th e li fecycle by

boos t ing sav ings) .Th is poses t rans i t iona l p rob lems , as those cur ren t lyin the labour force must pay general taxes to f inance the pensions of the cur re nt l y re t i re d a t th e same t im e as th ey are obl iged (or ince n-t ivized) to contr ibute to their own future pensions. Unsurpr is ingly,this approach has provoked s ignif icant res is tance to pension reform.



Socia l Reproduct ion and the Workfare S ta te 16 1

3 A shift fr om defined benefit to def ined co nt ri but io n sc he me s in pu bli c pension provis ion, wi th var ious actuar ia l a l lowances being made for increasing l i fe expectancy, wage growth, re turns on capi ta l , e tc . Theintended net effect of these a l lowances is to reduce the pension bi l l .

4 A pus h to mo ve fro m publ ic -def ined benef i t to pr iv ate- def i ned cont r i bu t ion scheme s . Th is wou ld no t on ly p r i va t i ze r i sks re la t ive to th es ta te sys tem, i t would a l so red i s t r ibu te r i sk f rom employers , governments and pens ion funds to fu tu re pens ioners . Al though s t rong ly

pushed by in te rna t iona l bod ies such as the Wor ld Bank and byna t io na l s t a tes , th e r e a re do ubt s wh e t he r p r iv a te sys tem s can ac tua l lyma tc h the r isk divers i f icat ion and prof i le of publ i c systems (F ro nd et

a l . 2001 ; Ors zag an d St ightz 2001) . Th er e are a lso co nc er ns ab ou t th ehigh costs of pr i vat e pen si on schem es ( inclu ding ma rk et in g costs ,m a n a g e m e n t c h a rg 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 c o st s , a n d a d v e r s eselect ion effects) and the extent to which pension pr ivat izat ion servesas an indirect s ta te subsidy to the f inancial services sector a t theex pe ns e of th e ins ure d and ci t izens .

5 Th e pr om ot io n of mul t i - t i e r ed sys tems in which a min ima l pub l ic pens ion i s supp lemented by means- tes ted ass i s tance and /or an occu pa t iona l pens ion or ind iv idua l por tab le persona l pens ion t i ed to s tock

m a r k e t p e r f o r m a n c e .6 Me as ur es to ma ke pens ions mo re 'po r ta b le ' so tha t they cor re sp ond

b e t t e r t o m o r e f l e x i b l e a n d m o b i l e l a b o u r m a r k e t s .

Th e re a re d i ffe rences am on g wel fa r e reg imes her e too . L ib era lre g im es a re mos t assoc ia ted wi t h a s teady do wn wa rd pre ssu re on pens ions , wi t h s t rong reUance on de- inde x ing pens i ons f rom wage incr easesto l ink them on ly to p r ice in f la t ion , and s t rong encouragement to p r iva tesav ings - wh ich has the add i t io na l benef i t in a ma rk e t - co or d i na t ed and

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 fo r f i n a n c i a l s e rv ices . In soc ia l democra t ic reg imes the re a re measures to p reven t ea r lyre t i rement (p rev ious ly used to dea l wi th de indus t r i a l i za t ion , to d i sgu iseu n e m p l o y m e n t a n d t o e n a b l e a g r e a t e r t a rg e t i n g o f u n e m p l o y m e n t m e asur es on the you ng un em pl oy ed an d th e resk i l l ing o f th os e in mi dd l e age)and / or to p r ov id e s t ro ng incen t ives to de lay re t i re men t so tha t th e

pension wil l be higher. Social democrat ic regimes have also acted toremove publ ic sec to r employment p r iv i l eges and to c law back or means-tes t the na t io na l pe ns io n wh er e the re t i re d a l so hav e occupa t iona l pe n

s ions . Th er e has a l so be en a t igh t en ing of res ide nce req u i r em en ts andother e l ig ib i l i ty measures . In conserva t ive-corpora t iv i s t sys tems we f indan ex tended qua l i fy ing per iod fo r pens ions coupled wi th a famf ly-fr iendly shif t because chi ld care years can now count as act ive years(Taylor-Gooby 2001b: 7 ) .



16 2 Socia l Reproduc t ion an d the W or kf ar e S ta te

5. Collective Consumption and the Competition State

Th er e has a l so bee n a re t re a t f rom co l lec t ive co ns um pt io n pr ov i ded bythe s ta te in the mixed economy to more market- and/or thi rd sector solut ions to the soc iah zat ion of co ns um pt io n. This is ref lected in f ive m ai nsets of changes in the form and funct ions of col lect ive consumption. Firs t ,wh er ea s co l lec t ive cons umpt ion in the KW N S involved publ ic p rov is ionand publ ic f inance , th i s re la t ionsh ip has s ince been d i s - and rea r t i cu la tedto p r od uc e a mo re com plex 'mixe d eco no my of wel fa re ' . At one ex t r em ewe f ind the to ta l p r iva t i za t ion o f som e sec tors ( invo lv ing pr iv a te pay me nt

as wel l as pr iv ate provis ion) ; the n com e var iou s type s of pr i vat e and thirdsector provis ion combined with cont inuing publ ic payment ; less radicals t il l i s the int r odu ct i on of ma rk et prox ies into wh at re ma in s of publ ic

prov is io n f in anc ed by the s ta te ; and , a t th e othe r ext re me , we f in d me asures such as mo de s t use r chan ges , means - tes t ing , co- pay men t by th es ta te a nd pr iv a t e insure rs ( fo r ex am pl e , in med ica l t r e a t me nt for v ic t imsof au tomobi le acc iden ts ) , and so fo r th . Second , co l lec t ive consumpt ionhas bee n res eat ed as pa r t of a m or e genera l dena t io nal iza t io n of th e s ta te( see chap t e r 5 ) . Wi th a decen t ra l i za t ion a nd deco nce n t r a t i on o f s t a te se r

vices , th er e is no w gr ea te r sc op e for local and regio nal var ia t i ons a nd for e x p e r i m e n t a t i o n c o m p a r e d w i t h t he h e y d a y o f t h e K W N S . T h i r d , t h e r ei s a sh if t in the gove rn anc e of co l lec t ive co ns um pt io n wi th inc reas edre l i anc e on publ ic -p r iva te par tne rsh ips , mul t i -age ncy coop era t ion , and

par t ic ipa t io n of th e thi rd sector. Fo ur th , the pr od uc t i on proce ss and thewage re la t ion have been reorganized in l ine with prevai l ing post-Fordis tnorms . Thus we can observe more f l ex ib le l abour marke t s , more f l ex ib lewor k in g condi t ions , mo r e d i ffe ren t ia ted p rod uc ts a nd se rv ices , m or e perfor man ce ta rge t s , mo re be nch ma rk ing , and so fo r th . An d , f i f t h , the re i s

a t r en d tow ard s us ing co l lec t ive co ns um pt io n to p r om ot e the t rans i t ionto a g lobahz ing , kno wle dge -ba sed econo my. This i s seen in changing

publ ic procurement pol ic ies , use of ICTs - including the Internet - for demonstra t ion as wel l as eff ic iency purposes , the promotion of best practice, and so on. In this way collective consumption is explicit ly used to

p romote sys temic and /or s t ruc tu ra l compet i t iveness .

I wi l l now i l lus t ra te these changes f rom the f ie ld of educat ion. Whileeduca t ion obv ious ly and necessa r i ly had a key economic ro le in reproduc i ng the l a bou r fo rce in the per iod of At la n t ic Fo rd i s m and the K WN S,

i t a lso had ma jo r par al l e l roles in the de ve lo pm en t an d ex pan si on of ama ss welfare s ta te bas ed on na t i ona l c i t izenship. In s tyl ized ter ms thatwere never ful ly matched in real i ty, we can say that educat ion wasex pec ted to pr om ot e equal i ty of access an d opp ort uni t y, to crea te the

bas is fo r a t a len ted and jus t 'mer i t oc racy ' tha t wou ld un de rm in e inher -



Socia l Reprod uct ion and the W or kf ar e S tate 16 3

i ted c lass and s ta tus s t r uctu res , to crea te , codify and dis sem ina te a sh ar ednat ional ident i ty and cul ture appropria te to a universal and sol idar is t ic

wel fa re s ta te , and to dev e lo p know led gea b le a nd c r i t i ca l c i t i zens ab le andwil l ing to par t ic ipate in an expanding publ ic sphere as wel l as a mass plebisci tary democracy. This was ref lected in the prolongat ion of the per iod tha t ch i ld ren and young people spen t in compulsory educa t ionan d in the dev el op me nt (acce lera t ing in the 1960s and 1970s) of s ta te-sponsored and s ta te - funded mass fu r ther and h igher educa t ion . Whi l s tthe gr ow th of mas s hi gh er edu ca ti on was clearl y rel ate d to th e task of t r a i n ing the t echn ica l and profess iona l l abou r fo rces de em ed app rop r iate to a Fordist economy, KWNS and mass society, i t was also justified

in terms of the r ight to cont inue one 's educat ion in the f ie ld of one 'schoice to the highest level one could a t ta in . Adul t educat ion in this

per iod was l ikewise s t i l l s t rongly l inked to a wider democrat ic project to p r om ot e c i t i zensh ip and so l ida r i ty ra th er th an to deve lop h u m a n capi ta l .The expans ion of mass edu ca t ion was al so in t end ed to co mp en sa te for economic, social and regional inequal i t ies and hence had a role in socialredis t r ibut ion. In short , educat ion played a key role in the ins t i tu t ionali z ed 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 eac tua l dev e lo pm ent a nd oper a t i on o f edu ca t ion d id no t fu lly ma tc h th i s

model, i ts failure to do so was strongly crit icized in terms of the hegem o n i c K W N S v a lu e s o f e c o n o m i c g r o w t h , e q u a l i t y o f o p p o r t u n i t y a n dn a t i o n a l i n t e g r a t i o n .

Th e eco nom ic, pol i t ical an d social cr ises in/of At la nt ic Fo rd is m (se echa pt er 3) w e r e ref lected in t he educ at io n sys tem to o. On th e o n e s ide,there was an increasing disquiet in business and s ta te c i rc les about thefa i lu re o f pup i l s , t eachers and schools , the g rowing 'mismatch ' be tweeneduca t iona l ou tp u t s an d the changi ng nee ds o f ind us t ry and the wid er economy, the fa i lu res o f ' b ig sc ience ' , the inadequa te re tu rn on publ ic

i n v e s t m e n t i n e d u c a t i o n a n d t h e g r o w t h o f g r a d u a t e u n e m p l o y m e n t a sun em pl oy me nt m or e genera l ly inc reased . ' ' An d , on th e o ther s ide , f acu l tyme mb er s beg an to tu rn f rom a p rofess iona l e thos to a mo re t rade un io nm e n t a l i t y a n d s t u d e n t m o v e m e n t s p r o t e s t e d a g a i n s t t h e c o r p o r a t e ' e d ucat i on facto ry ' as wel l as against m o r e gen er al fea tur es of For dis t ma sssociety. The cr is is in educat ion was eventual ly resolved discurs ivelyth rough a g rowing hegemony of accounts tha t cas t educa t iona l re formin te rms of economic impera t ives such as the need fo r more t echn ica land vocat ional educat ion, for enhanced ski l ls , creat ivi ty, f lexibi l i ty and

enterpr ise on the par t of s tudents , and for greater a t tent ion to the newd e m a n d 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 t h e k n o w l e d g e - b a s e dec on om y on the par t o f un ivers i ty admin is t ra to r s , t e ac he rs an dresearchers . The con t r ibu t ions o f educa t ion to soc ia l we l fa re andna t iona l c i t i zensh ip ro les were inc reas ing ly subord ina ted to the pur-




por ted func t ions o f educa t ion in p repar ing the beare rs o f human cap i ta lto participate in a l ifelong learning society as well as in renewingin te l l ec tua l cap i ta l (o r the knowledge base) fo r the knowledge-basedeconomy. The democra t ic func t ion o f educa t ion in the KWNS has l ikewise be en t ra ns fo rm ed int o on e of re duc ing social exclusi on to inc rea seemployabi l i ty and mobil ize scarce ski l ls . Both aspects of th is recast ing of the func t ions o f edu ca t ion emph as i ze the eco nom ic re t u rn s to pub l ici n v e s t m e n t i n e d u c a t i o n ( ' h u m a n r e s o u r c e d e v e l o p m e n t ' ) a n d t h e n e e dfor eff iciency, va lu e for m o n e y an d pu bl ic accountabi l i ty. In th e wor ds of t h e U K ' s D e p a r t m e n t f or E d u c a t i o n a n d E m p l o y m e n t ( s i nc e r e n a m e das the D ep ar tm en t fo r Ed uc a t i on and Sk il l s ) , ' l ea r n ing i s the key to

p rosper i ty ' (DfEE 1998) .Green summarizes the changes wel l in ident i fying two t rends:

Firstly, it was increasingly the case that where education was identified withthe national interest, as it has been repeatedly in the rhetoric of all westerngovernments in the 1980s and 1990s, this was in terms of the nationaleconomy and economic competitiveness, and not in terms of citizenshipand 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-bui lding .. .. As western countries, somewhat reluctantly, began to acknowledge the growing diversity and cultural

pluralism of their populations, they found themselves uncertain of whattheir nationality meant and what kind of citizens should be produced bytheir schools. (1997; 142,143; cf. Marginson 1999: 27)

This t ransformat ion can also be per iodized. The ini t ia l cr is is in /of Ford i sm pr om pt ed a c r i t ique o f edu ca t ion as fa ihng to mee t th e needsof a changing economy and redef ined labour marke t . Th is was assoc ia ted wi th a n inc rea sed em pha s i s on incu lca t ing f l ex ib i l i ty and adap t

abi l i ty as a short - term response to the vagar ies of the business cycle andgre a te r vo la t il i ty in the l abou r ma rk e t ( Rob ins and Web s te r 1989) . F lexibi l i ty and f lexible learning were a lso l inked to organizat ional change,especial ly with the r ise of open and dis tance learning enabled by newI C T s a n d n e w m e t h o d s o f c o n t e x t - s i t u a t e d a n d p r o b l e m - o r i e n t e d t e a c hing an d lear ning . Late r, th er e was a br oa de r em pha si s on th e rol e of ed uc a t i o n i n p r o m o t i n g 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 r o u g hthe d eve lop me nt o f hu ma n cap i ta l . Th is i s l inked to g row ing emphas i son the certification of transferable as well as specific skills in schools,

pos t -compulsory educa t ion and on- the- job t ra in ing . Tra in ing and l i fe longlearning are now a central component of economic as wel l as social

pol icy in a l l advanced capi ta l is t economies and are t ied to the growingconsensus tha t success fu l compet i t ion depends on bu i ld ing the knowledge base and human cap i ta l .



Socia l Rep roduct ion an d the W or kf ar e S tate 16 5

Ttie se tr end s are evi den t at all levels of ed uc at io n fr om sch ool sth r oug h fu r ther an d h ig her ed uc a t io n to on- the - job t ra in ing and ca reer-l inked l i fe long learning and thence to 'univers i t ies of the thi rd age ' for o lder peop le . A c ross - na t iona l su rvey of gene ra l d i scourses a nd pr op osa l s fo r educ a t io na l re f orm has iden t i f i ed a new or th od ox y base d on :

(1) improving national economies by tightening the connection betweenschooling, employment, productivity, and trade; (2) enhancing student outcomes in employment-related skills and competencies; (3) attaining moredirect control over curriculum content and assessment; (4) reducing thecosts to government of education; and (5) increasing community inputto education by more direct involvement in school decision-making and

pressure of market choice. (Carter and O'Neill 1995, summarized by Ball1998:122)

Schools are no w ex pe ct ed to enabl e chi ldren to be co me enter pr is i ng su b jec t s and deve lop the i r pe rsona l sk i l l s and capac i ty fo r t eamwork ing .They are a lso expected to provide the basis for the t ransi t ion to work an d to forge c loser l inks wit h fu tu re em pl oy er s . This is ref lected in a pr ol i f er a t io n o f p r o g r a m m e s t o i n t e g r a t e e d u c a t i o n a n d w o r k t h r o u g h m o r evoca t iona l t r a in ing , pa r tnersh ips , work exper ience , t r a in ing c red i t s , andso on . L in ke d to th i s i s the ex te ns i on of the ne w manage r ia l i s m and aud i tcul ture into schools (as wel l as univers i t ies) wi th i ts emphasis on quasi-ma rk e t s , in te r na l cos t cen t re s , pe r format iv i ty, t a rge t s , ben chm ar k in g , s ta ff appraisa l , e tc . (C lark e and N e w m a n 1997; Po we r 1997) .

T h e t i g h t e n e d c o n n e c t i o n b e t w e e n s c h o o l i n g , e m p l o y m e n t , p r o d u ct ivi ty and t rade is ref lected in a cross-nat ional reor ientat ion of the not ionof ski l l , wi th increasing emphasis on key ski l ls , l i fe long learning andemployab i l i ty, a s t echnology, corpora te res t ruc tur ing and vo la t i l e

ma rk et s are bel i eve d to ha ve en de d the Fordi s t fan tas y of job s for l ife(Lauder e t a l 2001) . Educa t ion has become in tegra ted in to the workfa r i s t p ro jec t tha t do wn gra des th e Ke yne s i an s tate ' s co mm it me nt to ful le 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 i ts 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 sfor ful l emplo yabi l i ty. Th us respon sibi l i ty for be co mi ng em pl oy ab le isdevolv ed to ind iv idua l m em be rs o f th e l abour fo rce , who shou ld acqu i r ethe ind iv idua l sk i ll s, comp etenc i es , f l ex ib i l i ty, adap tabf l i ty an d p er son a ld i spos i t ions to ena b le th em to co mp et e fo r jobs in na t ion a l and g loba llabour marke t s . They may be l a rge ly respons ib le fo r th i s as en te rpr i s ing

individuals invest ing in their own human capi ta l or as equal c i t izens ent it led to support f rom the s ta te and social par tners to improve their ski l ls .In a l l cases there is increasing cooperat ion between col leges , univers i t iesand o ther l ea rn ing prov iders and the wor ld o f work . Thus employersa n d p r a c t i t i o n e r s a r e i n v o l v e d i n c u r r i c u l u m d e v e l o p m e n t , m a n a g e r s




are d r aw n in to educ a t io na l gov er nan ce and agenda- se t t in g , mobi l i ty be tween the academy and non-academic wor lds i s encouraged , andcol leges and univers i t ies del iver l i fe long learning through advanced

profess iona l p rogrammes , con t inu ing profess iona l deve lopment , pa r t -t ime , even ing , and d i s tance t each ing , remedia l and second-chancecourses, and so on (Tetchier 1999: 85).

Notwi ths tand ing th i s c ross -na t iona l po l icy d i scourse convergence ,the re a re s t i l l marked d i ffe rences in t ake-up and implementa t ion .Lau der , e t al . (2001) repor t , fo r exa mpl e , tha t , wh er e econ omi es weredom ina te d by a bel ief th at the fut ure lay in a post - ind ustr ia l serviceeconom y, the re was a po la r iza t io n be tw ee n edu ca t ion and t ra in i ng fo r high -sk ille d eli tes a nd for a flexible, low- skill ed service se ctor . T he latt er sector a lso had re la t ively low inv es tm ent an d ge ne ra te d ou tp ut mo rethrough long work ing hours than inc reas ing produc t iv i ty. Converse ly,where manufac tur ing was s t i l l accorded a key ro le in accumula t ionstra t egies , th e s ta te emp has ize d int er me di at e ski lls an d the need for educat ion and t ra ining to l ink industry and services . This was coupled withhigh capi ta l investment to harness ski l ls for a high product ivi ty economyThe U S A and UK exempli fy th e f i rs t mo de l ; th e se con d is i l lus t r a ted byG e r m a n y. '

Turn i ng mo re d i rec t ly to fu r t her an d h igh er educa t ion , the r e has beena great emphasis on shif t ing univers i ty teaching and research from i tsivo ry- tow ere d inte l l ectual isola t ion back into cont in uous co ntact wi th theeconomy, the s ta te and the community as vi ta l co-producers and consumers of useful knowledge. This is especially clear in technology, the sciences and medicine, and has a lso penetra ted the social sc iences , so that i ti s no t mere ly g radua tes bu t facu l ty members themse lves who a re expec tedto develop extensive l inks with users in industry, business , the profess ions ,go ve rn me nt and loca l com mun i t i es . Th er e i s g ro win g emp has i s on ex te r

na l fund- ra i s ing , pa ten t ing , t echnology t rans fe r, r esearch parks , commercial spin-offs , sc ience and technology parks , incubators , consul tancyservices - amount ing to the emergence of a ver i table 'academic capi ta li sm ' in l ibe ral econ omi es tha t encou rage s en t r epr ene ur ia l un ivers i t i e s andt rans fo rms facu l ty me mb er s in to en te rpr i s ing bea re rs o f in te l l ec tua lcapi ta l (Slaughter and Lesl ie 1997) . This change was encouraged in theU 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 f o r t h e k n o w l e d g e - b a s e d e c o n o m y )through changes in federal funding for research, enabl ing univers i t ies tokeep the inte l lectual proper ty in their discover ies , as wel l as through the

mo re genera l ex tens io n of the scope and dura t ion o f in te l l ec tua l p rope r tyr igh ts . Univers i t i e s a re a l so encour aged to commerc ia l i z e the i r r ese arch .This was in tend ed to enc our age acad emi c en t repr eneu r ia l i sm, to subs id i z e c o r p o r a t e R & D , a n d t o f ac i li t at e 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 .S imi la r pa t t e rns can be found in o ther un ivers i ty sys tems .



Socia l Reproduc t ion and the W or kf ar e S tate 16 7

'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 dependent upon industry and government, so have industry and government

become more dependent upon the university. In the course of the 'secondacademic revolution' a new social contract is being drawn up between theuniversity and the wider society, in which pubhc funding for the universityis made contingent upon a more direct contribution to the economy.

(Etzkowitz 1994: 149,151)

Two apparen t ly con t ra ry bu t complementa ry s t ra teg ies a re be ingadopted here . On the one hand , the s ta te i s asse r t ing the impor tance o f educa t ion in the rea l i za t ion o f na t iona l economic in te res t s ; and , on theo ther hand , i t i s conced ing grea te r au tonomy to educa t iona l ins t i tu t ionsin how they serve these interes ts (Marginson 1999) . But this autonomyis be ing exerc i s ed in the con tex t o f the he ge mo ny of the kno wl ed ge -

based accumula t ion s t ra tegy, the inc reas ing par t i c ipa t ion o f the beare rsof th i s s t ra te gy in the shap ing of ed uc a t io n miss ion s t a t em en ts and t heincr eas i ng f inanc ial de pe nd en ce o f fu r ther and h igh er educa t io n onth i rd -par ty revenues der iv ing ne i the r f rom the s ta te nor f rom s tuden ts .The f i rs t s t ra tegy ' involves a reaff i rmat ion of the s ta te funct ions of edu ca t ion as a "pu bl i c goo d" , whi le the sec ond sub jec t s ed uc a t io n to thed i sc ipl ines o f the ma rk e t and the met ho ds an d va lue s o f bus iness an dredef ines i t as a co mp et i t iv e pr iv at e good ' (M ar gi ns on 1999: 122) .Toge the r, thes e s t ra teg ies se rve to re in force th e eco log ica l do mi na nc e o f a c c u m u l a t i o n o v e r t h e e d u c a t i o n a l s y s t e m .

Ag ai n , the re a r e di ffe ren t rou tes to th i s reconf igura t i on . In th e US A ,univers i t i e s have long been encouraged to opera te as bus iness f i rms andto be en t repreneur ia l . P ressures in th i s d i rec t ion have none the less beenre in forced f rom the 1980s onwards wi th the resu l t tha t many un ivers it i e s have reor ien ted the i r ac t iv i t i e s f rom teach ing towards research togen er a te pa ten t s and roya l t i es . Moreo ver , becaus e they mu s t s ti ll t each ,this pr om p ts th em to cu t costs and boos t eff iciency by s t and ar diz ingand commodit iz ing educat ion, casual iz ing and f lexibi l iz ing inte l lectuallabour, and me rc han diz ing on- l ine l ec tu r e courses . In Eu ro pe , the Eu ro

pe an Ro u nd Table i s p r om ot in g a neo l ib era l age nda tha t sees educ a t i onand t ra i nin g as ' s t ra te gic inve stm ent s vi ta l for th e fu tur e success of ind ust ry ' and has p rop ose d me as ur es to s t r eng the n th e com par a t i ve l y wea k inf luence of business on the curr iculum and adapt i t to the needs of i n d u s t r y t h r o u g h t h e d e v e l o p m e n t o f 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

Ove ral l , in th e wor ds of Etz kowi tz , a leading re se ar ch er on th e ' t r ip lehel ix ' in ter face be tw ee n univers i ty, busi nes s and th e s ta te :



168 Socia l Reproduct ion an d the W or kf ar e S tate


I now h igh l igh t s ix b road pre l iminary conc lus ions about the po l i t i ca lec on om y of welf are res t r uct ur i ng - conc lusi ons tha t wi l l nee d to be revisi ted af ter I have considered the rescal ing of economic and social pol icyand changes in i ts governance. Firs t , s ta te intervent ion in re la t ion tosoc ia l r eproduc t ion d i sp lays two major changes compared wi th the

per iod of the KWNS: (1) the use of social pol icy to enhance the f lexibi li ty o f l abou r ma rk e t s and to c rea te f l ex ib le , en te r pr i s in g worker s su i t edto a g loba l iz ing , kno wl edg e- bas ed econom y; and (2 ) the redes ign andreorganizat ion of social pol icy to put downward pressure on the socialwage , which i s now regarded more as a cos t o f in te rna t iona l p roduc t ionthan as a source o f domes t ic demand . The f i r s t t endency has been pursued fairly systematically, especially when the social wage is seen asan investment in the collective labourer, i .e. , in a pool of skilled, knowledg eab le and c rea t ive wor ker s who can jo in t ly con t r i bu t e to the in te ll ec tua l commons , ra ther than as an inves tment in ind iv idua l humancapi ta l , where i t i s in individuals ' ra t ional se l f - interes t to invest ineducat ion and t ra ining to maximize their future earnings. The secondtendency has been l imi ted by the mate r ia l , ins t i tu t iona l and po l i t i ca ll imits to re t renchment and, short of to ta l pr ivat izat ion, which is largelyconfined to societ ies where a neol iberal regime shif t has occurred,the emphas i s has been on cos t con ta inment ra ther than rad ica l cu t s .

Second , the re i s s ign i f i can t va r ia t ion in the emerg ing wel fa re -workfare mix and the forms in which it is delivered from case to case. In par t , th is ref lects real path-dependent differences in pol i t ical t radi t ionsand inst i tu t ional s t ructures that affect welfare regimes and in the resul ting challenges that now face them. In part , i t reflects the results of trial-and- e r r or exp er ime nta t io n and / or th e wi l l ingness o f s t a te man age rs toimport pol icy models f rom other levels of an increasingly mult i - t iered

pol i t ical sys tem an d/ or f r om ab ro ad . I t a lso ref lects , of cour se , d i fferent bala nces of forces . No net hel es s , i t i s wo rt hw hi le a t te mp ti ng to ident i fy broad pol icy sets l inked to different accumulat ion regimes and specifythe policy mk associated with a given state.

Thi rd , i t would be p remature to t ake the ascendancy and preva lenceof neo l ib era l is m in th e ear l y 1990s as evi den ce of th e long -te rm rep roducibi l i ty of neo l ib er al wo rkf ar e . Fo r this asc end anc y ref lected a specif icconjuncture in which three different types of change - neol iberal system

(L ev id ow 2001). Thi s is en co ur ag ed by th e EU itself in the ho pe of inc reas ing the in te rna t iona l mar ke t share o f EU edu ca t ion (E ur op ea n

Union 1999) .



Socia l Reprod uct ion an d the W or kf ar e S tate 16 9

t r an sf or ma t i on in post-so cial is t societ ies , th e neol i bera l reg im e shif t inthe an g l op ho ne dem ocr ac i es and neo l iber a l pol icy ad jus t ments in 'm odern iz ing ' corpora t i s t and s ta t i s t r eg imes - combined to l end somecredence to wild neol iberal t r iumphal is t fantas ies (see table 4 .1) . Thisco nj un ct ur e is alre ady on the w a n e as a res ult of disil lus ion wi th th e pos t-socia li s t expe r ie nce a nd the shor t - t e r m na tu r e o f po l icy ad ju s tme nts ino th er reg imes . Mo re ove r, eve n dur i ng th i s h ig hpoi n t o f the neo l ib era l

phase , the re was a g rea te r rup ture in rhe tor ic than in p rac t i ce . The contrad ict i ons of th e neo l ib er al pol icy are no w bei ng expo se d as th ey losethe p ro tec t iv e and mys t i fy ing pe nu mb r a o f o th er fo r ms of neo l i bera l i sm.This is being ref lected in the reversal of some elements of neol iberal ismeven in neo l ibera l r eg imes - a l though th i s does no t e l imina te the pa th-de pe nd en t l egac ies o f neo l iber a l e r ro rs . In add i t ion , the abs ence o f c o n c e r t e d o p p o s i t i o n t o t h e m o s t r a d i c a l f o r m s o f n e o l i b e r a l w o r k f a r eis no guarantee of i ts overal l funct ional i ty for the capi ta l is t economy, as

opposed to i ts eff icacy in destabi l iz ing pol i t ical opposi t ion to the overal lneol iber al proj ect . This is l ink ed to th e ne ed to analy se th e cont ra dic tor yfunc t ion s of th e welf are s ta te , s ince th e n eed to bala nce diffe rent funct ions in a spat io- temporal f ix l imits the var ia t ions that are possible in thelonger t e r m. For th e need s o f cap i ta l in gene ra l reasse r t the mse lvesth ro ug h the con t ra d ic t ion s and osc i l l a t ions o f ec ono mi c and soc ia l po l icyas wel l a s th rough the ad jus tment o f corpora te s t ra teg ies .

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 f or 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 ere gi me is a specific ins t i tu t io nal f ix th at resolves , wi t hin a given spa t io -

te mp or a l f ix , the con t r ad ic t ions an d s t ra t eg ic d i l e mm as invo lved in regu la r iz ing cap i ta l a s a soc ia l r e l a t i on and mana gin g i ts a lways p r ob l em at iccon nec t io ns wi th the s ta te and the wider po l i t i cal sys tem. Wh er ea s the

pr im ar y scale of reg ula t io n in th e K W N S was th e nat ion al , ther e is a re la t ivizat ion of scale in the emerging SWPR - especial ly in i ts neol iberal

Table 4.1 Forms of neo l ibera l ism

Neoliberal policy Modula t ion o f po l ic ies to improveadjustments per for man ce of an accu mula t ion reg ime

and m ode of regu l a t ion

Neoliberal regime shift Parad igm sh i f t in accumula t ion andr e g u l a t i o n , i n t r o d u c i n g n e w e c o n o m i cand pol i t ical pr inciples

Neoliberalism as radical Neo-l iberal ism as s t ra tegy for moving from system transformation state socialism to capitalist social

f o r m a t i o n




guise . Indeed, so problematic is th is , that i t i s unl ikely that a pure neol ibera l workfa re reg ime cou ld ever become ' s t ab le ' . At l eas t two i s sues a reat s take here . Firs t , there are doubts about such a regime's capaci ty toinst i tu t i onal ize a ' scalar se lect ivi ty ' in wh ic h res i s tan ce to wo rk fa re measures i s marg ina l ized f rom the core dec i s ion-making s i t es and becomesso fragmented and dispersed as to be largely ineffect ive. Even theabs enc e o f res i s ta nce does no t as such guar an t ee success . Wor kfa reinvolves mo r e th an s imply ma ki ng the poo r work; i t i s a lso ab ou t ma ki ngflexible labour markets work. The la t ter task requires coordinated act ionacross different scales depl oyi ng a ra nge of ma rk et and no n- ma rk et me asures . Sec ond , desp i te i ts in te rn a l con t rad ic t i ons , neo l ib era l work fa reth re at en s oth er ap pr oac hes to wor kfar e . Thu s, as wel l as local res is t ancein the societ ies most commit ted to the neol iberal project , there is a lsona t iona l and suprana t iona l res i s tance to neo l ibera l i sm among s ta tescommit ted to other models as they t ry to avoid the regulatory race tothe bo t tom l inked to the neo l ibera l p ro jec t .

F i f th, the neo l i bera l app ro ach to wo rk fa re p r io r i t i zes jus t one mo m e ntof the co n t ra d ic t i ons an d d i le mm as assoc i a ted wi t h cap i t a l a s a soc ia lre l a t i on (see ch ap te r 1) . I t reg ard s wa ges pr i mar i ly as a cost of pr od uct ion and neg lec t s the i s sue o f demand . I t r egards l abour-power p r imari ly as one subs t i tu tab le fac to r o f p roduc t ion among o thers and neg lec t sth e cr i tical rol e of la bou r- pow er as a sou rce of add ed value an d crea t ivi ty. I t r egards money pr imar i ly f rom the v iewpoin t o f in te rna t iona l currency f lows and neg lec t s the con t inu ing con t r ibu t ions tha t con t ro l over cap i ta l f lows can p lay in economic management . I t r egards cap i ta l p r imari ly in terms of mobi le investment capi ta l in a space of f lows ra ther th an as a set of co nc re te inv est ed assets to be valo r iz ed in par t ic ula r p laces . And i t adopts a short - term mode of economic calculat ion to thede t r im en t o f lon ger - te rm aspec t s o f the ec on om y in i t s in tegra l sense .

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 d i f f er e n tmoments th rough a d i s t inc t ive pa t te rn o f sca la r coord ina t ion basedon the na t i ona l ec ono my an d na t iona l s t a te , the neo l ibe ra l wor kfa rere gim e f ind s i t ha rd to reco nci le the se diff erent mo me nt s on any scale .T h i s i s a n o t h e r i l l u s tr a t i o n o f n e o l i b e r a l i s m ' s c o u n t e r p r o d u c t i v e n a t u r ein i t s a t t empts to des t roy the ins t i tu t iona l embeddedness and spa t ia l -ins t i tu t ional f ixes associated with the KWNS and in i ts opt imist ic bel ief i n t h e s p o n t a n e o u s r e g e n e r a t i v e p o w e r s o f d i s e m b e d d e d m a r k e t f o r c e sfree to op er at e on a wo rl d scale . In pa r t icu lar , by dis man t l i ng ke y or ga n

iza t ion a l and ins t i tu t iona l sup por t s o f the KW N S , th i s ap pr oa ch den i esi t s advoca tes access to po ten t ia l f l ank ing and complementa ry measures that could serve to s tabi l ize a neol iberal regime. In the complexdialect ic of 'conservat ion-dissolut ion effects ' , neol iberal ism loses theoppor tun i ty to t rans form the func t ions o f conserved organ iza t ions and



If "

Socia l Reproduct ion and the Workfare S ta te 17 1

ins t i tu t ions wit hin th e ne w logic of a ma rk et -d r i ve n app ro ac h. I t i s har dlysurpr i s ing , the re fore , tha t , ou t s ide the f ramework of soc ia l fo rmat ionscharacter ized by a neol iberal regime shif t , there is far greater em

phasis on redesigned forms of social par tnership, a cont inuing role for the s ta te in managing the new co l lec t ive ac t ion p rob lems invo lved in

p r om ot in g cap i t a l acc umu la t ion and reconc i l ing i t wi t h the de ma nd sof pol i t ica l legi t imacy, an d a gr ea te r co nc er n to re ca l i br at e exis t inginst i tu t ions to deal wi th new problems rather than to bel ieve that themarke t can so lve them.

Sixt h, and finally, in th e sea rc h for a ne w spati al- ins ti t uti ona l fix,neo l ibe ra l s r i sk depr i v ing themse l ves o f an Ar ch im ed ea n po in t f romwhi ch to coo rdi nat e the differ ent scales of eco nom ic, social and pol i t ic alac t ions and to deve lop compensa tory and f l ank ing measures on o ther scales in response to changes pursued on other levels . This is a l readycom pl i ca t ed by the re la t iv iza t ion o f sca le , whi ch ma ke s the con t rad i ct ions and d i lemmas of an a f te r-Ford i s t cap i ta l i sm harder to manage

because they are a lso more dispersed over t ime and space. In other eco nom ies , howe ver , the re i s s t r onge r co mm it me nt to a key ro le fo r th e

nat ional s ta te in this regard. This too is ref lected in the l imited diffusiono f t h e n e o l i b e r a l m o d e l b e y o n d u 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 a n dthe co n t in ue d im po r t an ce , sub jec t to conserva t ion-d i sso l u t ion e ffect s, o f o lder we l fa re reg ime and produc t ion pa t te rns .



The Political Economy ofState Rescaling

The continuing restructuring of th,e capitalist type of state can also be related to the overall primacy of the national scale in the era of At l an t ic For d i s m and the cur r en t re la t iv iza t ion o f sca le assoc ia tedwi th th e af ter-Fordis t per iod. ' Th e abs en ce of an y pr im ar y scale onwhich the s t ruc t ured cohe ren ce o f cap i ta l acc umu la t ion and socia lrep rod uc t ion can cur r en t l y be secured exp la ins the con t in ued c ri s is -tendencies of the capi ta l is t societ ies in which the welfare s ta te wasembedded . I t i s a l so re f lec ted in con t rovers ies and s t rugg les a round o ther scales of economic, pol i t ical and social organizat ion; and at tempts toestab l ish ap pr op ri a t e fo rm s of go ve rn an ce for th ese scales in a ll their tangled complexi ty. This chapter argues that a postnat ional order isemerg ing tha t i s more exp l ic i t ly mul t i sca la r, mul t i cen t r i c and mul t i t em pora l th an the pos twar At la n t ic Ford i s t r eg im e . Par t i cu la r a t t en t i on i s paid to the resurgence of entrepreneuria l c i t ies and regions, the develo p m e n t o f s u p r a n a t i o n a l t r i a d i c r e g i m e s , t h e g r o w t h o f c r o s s - b o r d e r reg io ns , the a t t em pt to dev e lop mul t i l eve l gov er nan ce an d the c la i m th a ta global (or a t leas t western) s ta te is emerging. In examining the predominan t ly neo l ibera l fo rm of th i s pos tna t iona l o rder on a g loba l sca le ,I a lso discuss the i l logic of glo bal iza t io n in i ts neo l ib er al for m. I re la t ethis to the cont inuing search for a new scale on which the postnat ionalorder cou ld be re regu la r ized and new economic and soc ia l p rob lemsresolved. I conclude that a centra l pol i t ical role remains for the nat ionals ta te an d no te how this di ffers f rom tha t in the pe r i od of At la nt icF o r d i s m .



The Political Ec ono m y of State Res caling 1 73

Type of nation

Simplenational community

Basis of communitymembership

Multiplex form of community

Form taken bynation whendecomposed

Yolksnation Ethnos Blood ties or naturalization

Multiethnic 'Melting-potsociety'

Kultwnation Sharedculture

Assimilation,acculturation

Multicultural Postmodern play of identities

Staatsnation Constitutional patriotism

Test of politicalloyalty

Nested politicalloyalties tomulti-tieredgovernment

'Dual state' ingiventerritory or transnationaldiasporas

1 . The National State

We mus t d i s t ingu ish be tween the na t ion-s ta te and the na t iona l s t a te inorder to avoid the confusions that ar ise f rom references to the nat ion-s ta t e in gene ra l wo rk on th e fut ure of th e s ta te . Firs t , ' ter r i to r ia l del im ita t ion an teda ted the po l icy o f na t ion- format ion , and the l a t t e r, a s a blanket pr inciple , has as yet not been ful ly real ized, whereas the pr inci ple of terr i tor ia l s ta tehood has es tabl ished i tse l f world-wide ' (Brock andAl be r t 1996: 6 ) . Second , as Ben edi c t An de rs on (1991) has a rgue d , thena t ion i s an ' imagined communi ty ' . I t emerges f rom the mutua l recogni t ion o f l a rge numbers o f pe rsons unknown to each o ther on the bas i s

of supp osed ly sha red a t t r ib u tes tha t quahfy the m for me mb er sh ip o f thesame nat ion and, i t should be added, that dis t inguish them from other

pe rsons who a re the reby exc luded f rom such membersh ip . These sharedat t r ibutes may establ ish the imagined ident i ty of a Volksnation in an eth-n o n a t i o n a l s t a t e ( fo r e x a m p l e , G e r m a n y ) a n d t h e r e a r e m a n y r o u t e s t osuch e thn ic na t ionhood and se l f -de te rmina t ion (Ba l ibar 1990; Brubaker 1992; Gel lner 1993; MacLaughl in 2001) . But there are a lso s table (anduns tab le ) t e r r i to r ia l s t a tes wi th two or more e thn ic na t ions ( so-ca l l edm u l t i n a t i o n a l s t a t e s ) .

In add i t ion to e thn ic na t ionhood , the re a re a t l eas t two o ther fo rmsof na t i on ho od tha t a re l inked to s ta te fo r mat ion and have pr ove d com

pat ibl e with the exis tenc e of m o r e th an on e eth nic grou p or na t i on wit hina nat ional s ta te (see table 5 .1) . These are a cul tural nat ion {Kulturna-tion), based on a shared nat ional cul ture that may wel l be def ined and

Table 51 Ty polo gy of im ag ine d pol i t ic al com mu nit ies l inked to nat ion-states



1 74 The Political Ec on om y of State Res caling

2. Crisis in the National Character of the KWNS

I n o w sh ow how th e fea tu res o f th e KW NS , as no te d in cha p te r 2 , cam eto be (seen as) crisis-prone in the late 1960s and 1970s. As the distinct iveness of the KWNS as a par t icular type of s ta te of ten went unrecog-

act ively promoted by the s ta te i tse l f ( for example, France) ; and a c ivicn a t i o n (Staatsnation), based on pa t r io t i c commitment to the cons t i tu t ionand bel ief in the legi t imacy of representat ive government ( for example,the US A ) . These th re e fo r ms of na t ion ho od can re in f orce each o the r ( fo r e x a m p l e , D e n m a r k ) , b e c o m b i n e d t o p r o d u c e r e l a t i v e l y s t a b l e h y b r i dforms of na t iona l s t a te ( for exam ple , ma in l and Br i t a in ) o r p r ov ok e confl ic ts over th e pr op er basis of th e nat ion -s t a te ( for exa mp le, Cana da, Ne wZealand) . P ressures may a l so deve lop to g ran t s ign i f i can t au tonomyto regional ly based nat ional minori t ies within the exis t ing terr i tor ia l bou nd ar ie s of a nat ion al s ta te (for exa mpl e, Spai n, ma in la nd Bri ta in ) or to es tab l i sh ' cons oc ia t i ona l ' fo r ms of go ve rn me nt in whi ch d iffe ren tn 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 ( o r 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 nin the exerc i se o f s t a te power ( fo r example , Be lg ium, New Zea land) .Even in s table cases , however, nat ionhood provides the basis for dis

placing contradict ions and inst i tu t ional iz ing social exclusion within the boundar ies o f a spa t io - tempora l f ix o rgan ized a round the na t iona l s t a teas wel l as beyond i ts terr i tor ia l boundaries (cf . Tololyan 1991) .^ Of part i cu la r im po r t an ce he re a re the mul t i fo r m pa t te r ns o f gen der ing na t i onsand ' racia l iz ing ' nat ional di fferences .

Reg ard les s o f the i r cor r espo ndin g fo r m of na t ion hoo d an d the ex ten tto wh ic h this has pr ov ed stab le or conflic tual, th e stat es of int er es t inthis study can all be described as national states - that is , as formallysovere ign te r r i to r ia l s t a tes p res id ing over ' na t iona l ' t e r r i to r ies . Moreover,insofa r as they wer e inc lude d in the p r im ar y c ircu i ts o f At la n t ic Ford i sm,the y can a l so be char ac te r iz ed as Keyn es i an wel f a re na t ion a l s t a tes . Inthis regard, they were all subject to similar pressures for change as aresul t of th e emer ging dy na mi c of globa l iza t ion an d reg ion al i zat ion indiffer ent func t ion al do ma ins . Thus , conc entr at in g solely on th e futur e of e thn ica l ly bas ed na t ion-s ta tes (wh ene ver they dev e lo ped ) o r, a l t e rnat ively, t reat ing al l nat ional s ta tes as i f they were e thnicaUy based nat ion-s ta tes would d iver t a t t en t ion f rom the more genera l and impor tan t i s sueof th e fut ure of po st wa r nat ion al s ta tes , e t hn on at io na l or not . I t i sthis issue tha t concer ns us here . For ms of na t i on ho od could then bein t rod uce d la te r as a seco ndar y var ia b le wh en a t t en t io n tu rned to mo redet ai l ed analyse s of th e ins t i tu t io nal legacies and pa th -s ha pi ng possibi li t ies of specif ic pr od uc t io n and/ or welfar e regim es.





1 76 The Political Ec on om y of State Resc aling

ec on om y (or, a t leas t , so-cal led ' su nse t ' sector s an d their associa ted jobs ) and /or wi th a t t empts to es tab l i sh a wider economic space wi th inwhich the ex pa nd ed re pr odu c t i on of accu mula t ion cou ld be ren ew ed .Th e la t t e r a t t e mp ts cou ld occ ur th ro ug h fo r ma l po l i t ica l me an s ( sucha s t h e E u r o p e a n C o m m u n i t y a n d E u r o p e a n U n i o n ) o r t h r o u g h m o r eo p e n e c o n o m i c b o r d e r s .

3 Re gi on al an d local ec on om ie s wer e increasingly re cog niz ed to havetheir own specific probl ems that could no t be re sol ved ei ther thr ou ghn a t i o n a l m a c r o e c o n o m i c p o l i c i e s o r t h r o u g h u n i f o r m l y i m p o s e dmeso- o r microeconomic po l ic ies . Th is p rompted demands fo r specifical ly ta i lor ed and ta rg ete d ur ba n and re gio nal pol ic ies to bei m p l e m e n t e d f r o m b e l o w.

4 Th er e was a gro win g contr adic t ion in th e f ie ld of social re pr od uc t i onwi th en co ur ag em en t to those who wante d to im mig ra t e fo r eco nom ic purposes being accompanied by an increasing concern in the pol icing of the boundaries of nat ional c i t izenship and i ts associatedwel fa r e r igh t s . Wh i l e the core E ur op ea n s ta tes o f At l an t i c For d i s mhad previously been seen largely as countr ies of emigrat ion and/or,in th e wa ke of po st wa r deco loni zat i on, the re tu rn of nat ion als to thei r homelands, in the 1970s immigrat ion was construed as a threat to

na t i on al cohe sio n, ful l em pl oy ih en t and the welfare s ta t e (Biel ing1993; cf. Ko fm an 1995; Le it ne r 1995; Soysal 1994; see als o J op pk e1998) . Ind ee d, 'mi grat ion i l lus t ra tes b oth the logical ly c losed character of the welfare s ta te and the diff icul ty with which that c losurei s main t a in ed ' (F re em an 1986: 63 ; cf. Ke ar ne y 1991) . Add i t i ona ldestab i l iz in g de mo gr ap hi c factors wer e the decl i ne of th e s tabl e two -

pa re nt family, th e fem iniz at io n of th e paid labo ur force an d lon g- ter mu n e m p l o y m e n t .

5 Th er e was a cr isis of for ms of pol i t ical re pr es en ta t i on that were base don 'govern ing par t i es ' , ' bus iness un ion ism ' and cap i ta l i s t a ssoc ia t ions .This was evident in growing electoral volat i l i ty and disaffect ion withthe ma jo r par t ie s and, in so me qua r t er s , in mil i tan t re j ect ion of th ete rms of the pos twar cap i ta l - l abour compromise . New soc ia l moveme nt s a lso de ve lop ed to cha l le nge th e industr ia l logic of At la nt i cFordism and the s ta t is t logic of Keynesian welfar ism in favour of a l t e rna t ive fo rms of ec ono mi c and po l i t i ca l o rga n iza t ion and anant ibu re auc ra t ic , au to no mo us , pol i t ic ize d civi l society (cf. Offe 1985b;Hi rsch and Roth 1986) .

6 Th e 'na t io na l -po pul a r ' d imen s io n of he ge mo ni c s t rugg les sh i f t edaway f rom expanding prosper i ty and wel fa re r igh t s towards a morena t iona l i s t , popul i s t and au th or i t a r ian d i scourse and /or toward s amo re cosm opol i t a n , neo l ibe ra l dem an d for 'm or e ma rke t , l e ss s t a te 'in a more open economy. Whi l s t bo th these l a t t e r t r ends con t inue .



The Political E cono my of State Rescaling 17 7

3. The Political Economy of Scale

T h e effects of this crisis in th e na ti on al sta te for th e chan gi ng form s an dfunct ions of economic and social pol icy have been discussed in the las ttwo chap te rs . Th is chap te r i s concerned wi th the resca l ing o f the pos twar na t iona l s t a te and i t s con t r ibu t ion to the res t ruc tur ing and s t ra teg ic

the heg em on y of Ke yne s ia n wel fa r i sm has been supe rs ede d by

heg em oni c s t rugg les a r oun d ho w bes t to enhanc e comp et i t iven essas the route to prosper i ty.

The ov eral l effect of th es e cha nge s was to er od e th e K W N S and, inthe worst cases, to produce an organic crisis of this ty pe of sta te (o n thisconcep t , see Gra ms c i 1971; Pou lan tza s 1974a) . Th er e a re severa l sym ptoms of an organic crisis. These include a progressive loss of state unity,decl ining effect iveness , representat ional cr ises and a legi t imacy cr is is .The loss of state unity was reflected in the declining structural andopera t iona l coherence among d i ffe ren t b ranches , appara tuses and t i e r sof go ve rn me nt in secu r ing the s ta te act ivi t ies t ied to specific ac cum ulat ion s t ra tegies , s ta te projects and hegemonic projects . In other words ,th er e was an internal disarticulation ( ins t i tu t i onal cr is is) of s ta te ap pa ra tuses in t e r ms of the i r ve r t i ca l cohe re nce ac ross d i ffe ren t o rgan iza t iona llevels and their capaci ty to engage in hor izontal coordinat ion of different do ma in s of activity. This was as so cia ted wit h declining effectivenessin a t ta ining declared s ta te object ives l inked to the prevai l ing economic,

pol i t ical and hegemonic projects . A fur ther consequence in cases of o rgan ic c r i s i s was the d i sorgan iza t ion and s t ra teg ic d i sor ien ta t ion o f the

pow er b loc (o r ' e s tab l i s hme nt ' ) and i ts a ssoc ia ted s ta te ma na ge rs and / or the decomposi t ion of the social bases of support for the s ta te and i ts

projects. This could lead in turn to a representational crisis of the s ta tein regard both to i ts broad 'nat ional-popular ' social basis - ref lected ingrow ing volat i l i ty or ev en ab so lu te loss of su pp or t for th e gov er nin g

po l i t i ca l pa r t i es and o ther mains t ream mass o rgan iza t ions - and to thegro win g ins tab i l i ty o r even d i s i n teg ra t i on o f ins t i tu t iona l ized co mp romise in the es tab l i shme nt . A no th er man i fe s ta t io n o f c r i s is was the s ta te ' slegitimation crisis, that is , a loss of faith in this particular type of state 's

claims to polit ical legitimacy, including, notably, i ts claim to be able tode l iver ec on om ic g r ow th and genera l i z ed p ros per i ty ( for a co mp ar i s onof the organic cr is is of the Bri t ish s ta te that led to Thatcher ism with them or e l imi ted econ om ic an d pol i t ic al cr ises in Wes t G e r m a ny in th e 1970sand 1980s and the more l imi ted German Wende, or ' tu rn ' , see Jessop1989).




reor ien ta t ion o f s t a te in te rven t ion . Ana lyses o f the po l i t i ca l economy of scale con ce rn the strate gic selectivit y of th e int er sca lar division of la bo ur and at tempts to shape this se lect ivi ty in par t icular ways. I t has major implicat ions for the manner and extent to which contradict ions anddi lemmas can be displaced and deferred in specif ic spat io- temporal f ixes .A useful app ro ac h in this regard is sugg este d by Sw yng edo uw, wh oargues that scale is:

the arena and moment, both discursively and materially, where socio-spatial power relations are contested and compromises are negotiated andregulated. Scale, therefore, is both the result and the outcome of social

struggle for power and control... [By implication] theoretical and political 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 th e ' th i r ty g lo r ious years ' o f pos twa r econ omi c g r ow th in At la n t icFordism, the dominant scale was the nat ional . I t was pr imari ly on thissca le tha t soc io-spa t ia l power re la t ions were con tes ted and compromiseswe re negot i a ted a nd regu la ted . Th is occ ur r ed wi t h in the f r am ew or k of in te rna t iona l reg imes tha t re in forced na t iona l s t a tes whi le loca l s t a tesacted as re lays or micro- level adjustment mechanisms for pol ic ies determined a t na t iona l l eve l . Na t iona l economies were the t aken- for-gran tedo b j e ct s o f e c o n o m i c m a n a g e m e n t i n A t l a n t i c F o r d i s m , t h e t r a d i n gna t ions o f Eas t As ia and those La t in Amer ican economies pursu ingimpor t - subs t i tu t ion s t ra teg ies . Th is t aken- for-gran tedness ac tua l lydepended on qui te specif ic mater ia l and ideological foundat ions thatcould not be taken for granted themselves . The natural izat ion of thes t ruc tura l con gru enc e (o r spa t io - te mpo ra l co inc id ence) o f na t i ona lecon omi es , na t i ona l s t a tes and na t ion a l soc ie t i es was g rou nd ed in

pos twar recons t ruc t ion in Europe , in the na t iona l secur i ty s ta te in Eas tAs ia and in cr i t iq ues of de pe nd en cy in La t i n Am er ic a . In eac h case , th isna t iona l f ramework was suppor ted by var ious ( typ ica l ly asymmet r ica l )in te rna t iona l reg imes and a l l i ances tha t had to be pu t in p lace . Reprod u c t i o n o f t h e s e f o r m s o f s t r u c t u r e d c o m p l e m e n t a r i t y d e p e n d e d i n t u r non the t r i a l -and-e r ror d i scovery o f fo rms of economic management ,regu la r iza t ion and governance tha t cou ld p rov ide a spa t io - tempora l f ixwi th in which to reso lve a t l eas t pa r t i a l ly cap i ta l i sm 's con t rad ic t ions andd i l e m m a s .

None the less , a s the con t rad ic to ry dynamic o f accumula t ion and i t sresu l t ing confl ic ts an d s t ruggle s a lways te nd to es cap e at t em pt s to f ixthem wi th in any g iven spa t io - tempora l ly anchored ins t i tu t iona l f ramework, a l l such solut ions are unstable and provis ional . This is par t icular lyevident in the case of the nat ional scale that predominated in the





1 80 The Political Ec ono m y of State Resc aling

cap i ta l i sm a re be ing imagined and purs ued . In dee d , g loba l iza t ion ,whe ther v iewed f rom a s t ruc tura l o r s t ra teg ic v iewpoin t , i s o f ten l inkedclosely and in complex ways to processes on other spatial scales. I t is bestsee n as par t of a pro l i f era t io n of scales and temp ora l i t ies as na rr at ed ,ins t i tu t iona l ized ob jec t s o f ac t ion , regu la r iza t ion and governance . Thenumber of scales and temporal i t ies of act ion that can be dis t inguishedis im me ns e" but far fewer ever get expl ic i t ly ins t i tu t io nal iz ed. H o w far thi s hap pe ns depe nds on the p reva i l ing t echnolo g ies o f po we r - mate r ia l ,social and spat io- temporal - that enable the ident i f icat ion and inst i tutionalization of specific scales of action and temporalit ies. I t is thede ve lo pm en t o f new logi s ti cal mea ns (of d i s tan t ia t ion , compr ess io n ,

c o m m u n i c a t i o n ) , o rg a n i z a t i o n a l t e c h n o l o g i e s , i n s t i t u t i o n s w i t h n e wspa t io - tempora l hor izons o f ac t ion , b roader ins t i tu t iona l a rch i tec tu res ,ne w globa l s t a nda rds ( inc lud ing wor ld t ime) an d m od es o f gove rna nceth at hel ps to expl ain this prol i fer at io n of econ omi cal l y and pol i t ical lys ignif icant ins t i tu t ional ized scales and temporal i t ies .

Moreover, as new scales emerge and/or exis t ing scales gain in ins t i tutional thickness, social forces also tend to develop mechanisms to l ink or coord ina te them. This genera tes inc reas ing complex i ty as d i ffe ren t sca lesof act i on co me to be l inked in var iou s hybri d co mb in at io ns of ver t ical ,hor izontal , d iagonal , centr ipetal , centr i fugal and vort ical ways. Thiscomplexi ty cannot be captured in terms of s imple contras ts , such asg loba l -na t iona l o r g loba l - loca l , o r ca tch-a l l hybr id concep ts such asglocal izat ion or the t rans vers al . Ins t ead, the re is a pro l i f era t io n of discurs ive ly cons t i tu ted and ins t i tu t iona l ly mate r ia l i zed and embedded spa t ia lscales ( wh eth er terres t r ia l , terr i tor ia l or te l ema t ic ) , whic h are re la t ed inincreas ing ly complex tang led h ie ra rch ies ra ther than be ing s imply nes tedon e within th e oth er , wi th differen t tem por al i t ie s as wel l as spat ia l i t ies .

This mea ns , amo ng oth er effects , th at th er e is a gr ea ter eccentr i c i ty of spat ia l scales re la t ive to the ear ly and b o o m years of At la nt i c Fo rdi sm . 'Larger t e r r i to r ia l un i t s have come to con ta in a decreas ing propor t ionof th e econ omi c, polit ical a nd social l inkag es of small er units in the ir

bor der s com par ed to the hey day of At l an t i c Ford i sm. This mean s tha tsmal ler uni ts can no longer be so readi ly regarded as nested within theformer l ike Russian dolls. This is particularly clear in the emergingnetwork of global c i t ies , which, as a network, is not contained within anygiven s ta te - regu la ted t e r r i to r ia l space . Th is con t ras t s wi th the n ine teen thcentury when world c i t ies funct ioned mainly as the capi ta l c i t ies of

emp i re s and s ta te -org an ized p lur ina t i ona l t r ad ing blocs (Hal l 1998; Kn oxan d Tayl or 1995) . A n o t h e r ex am pl e of the eccentr ic i ty of ne w spaces isthe gro wt h of cro ss- bor der regio ns, m an y of whi ch ar e del iber ate ly pr omoted by their respect ive nat ional s ta tes or, in the case of the EuropeanUn io n, a su pr an at ion al pol i t ical body (for fur t her discussion of cross-



The Pol i t ical Econ om y of State Rescal ing 181

border regions f rom this perspect ive, see Jessop 2002d) . In addi t ion,the re a re p rocesses o f deb ord er i ng , tha t i s, ' cha nges resu l t in g in the em ergence of ne w pol i t ic al spac es that t r an sc en d terr i tor ia l ly def in ed spac eswi thou t l ead ing to ne w te r r i to r ia l de ma rc a t io ns ( in o th er word s , to as imple shif t in borders) ' (Brock and Alber t 1995: 171) . In short , pastscala r f ixes , a s we l l a s pas t spa t ia l f ixes , a re dec omp os i ng un de r econ omi cand po l i t i ca l p ressure and be ing ac t ive ly reworked th rough a wide rangeof of ten-conflictual scalar strategies.

The present re la t ivizat ion of scale c lear ly involves very differentopportuni t ies and threats for economic, pol i t ical , and social forces com

pared to the per iod when the nat ional scale was constructed and takenfor gr an te d as pr im ary. I t i s assoc iate d wi th act ion s bo th to exp loi t an dres i s t the p rocesses p roduc ing g loba l iza t ion . Whi le the wor ld marke tand the t r iads have become the most s ignif icant 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 re more o f tennat ional , regional or local (Brenner 2000: 321) . In other words , whereasth e capi t a l is t law of val ue increasi ngly ope ra te s on a globa l scale , su b

ject ing al l economic and economical ly re levant act ivi t ies to the audi t of the wor ld mark e t , th e pursu i t o f p lace-spec i fi c comp et i t ive ad van tag es

by firms, states and other actors is st i l l rooted in local, regional or

nat io nal specif ic i t ies . This shap es th e for ms of co mp et i t io n an d s t ra tegi esto bui ld compet i t iveness (see chapter 3 and pp. 187-93) . I t a lso shapesthe forms in which economic, pol i t ical and social forces more general lyseek to p ro tec t themse lves f rom g loba l compet i t ion and the mos t feas i

ble s t ra tegies to this end. The fol lowing paragraphs comment br ief ly onth e ra ng e of different scales below the level of the global on which thesearch fo r new spa t io - tempora l f ixes fo r accumula t ion and regu la t ion i s

being pursued. I discuss the global level later as an effect of differentscalar strategies as well as an object of governance in i ts own right.

Triad power

As the g lobal eco nom ic h ie ra r chy i s redef ined , we f ind inc reas ed emp hasis on thr ee su pr ana t io na l gr ow th pol es tha t ex clu de s ignif icant ar ea sof th e globe . Th es e are based on the reg ion al he ge mo ni es or, a t leas t ,d o m i n a n c e o f t h e U S A , G e r m a n y a n d J a p a n r e s p e c t i v e l y a n d a r er e f le c te d 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 Tr a d e A g r e e m e n t(and mo re re cen t effo r ts to ex t end i t in t o La t in Am er ic a on a hemi

s p h e r i c b a s i s ) , a t t e m p t s t o w i d e n 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 cS p a c e ' t h a t e x t e n d s b e y o n d t h e c u r r e n t b o r d e r s o f t h e E u r o p e a n U n i o n ,an d re ce nt effor ts to deve lo p a reg ion al f inancial as wel l as re gio nal

p roduc t ion sys tem in Eas t As ia . Each of these suprana t iona l o r t r i ad icgrowth poles has i ts own spatial and scalar divisions of labour and its




own associated tangled li ierarchies of space and place. There is alreadya ma te r i a l basis to these t r i adic de ve lo pm en ts , of course , wi t h a growi ngin tens i ty o f in t rab loc t rade (mos t ma rk ed in the Eu ro pe an Un io n bu talso grow ing in the ot her two t r iad s) , a fur t her dee pe ni ng of th e interregional divis ion of labour within each bloc, and at tempts to developappropr ia te fo rms of governance . Th is deve lopment may even tua l lycome to provide a new scale on which to seek to reregular ize capi ta laccumulat ion and construct a new spat io- temporal f ix that wi l l l imit thedisr upt i ve impa ct of neo l ib era l forms of global i zat ion . This is mo st l ikelyto occur in the shor t - to medium- te rm in the European Union . For thet r i ads more genera l ly to become the complementa ry noda l po in t s o f are regu la r iza t ion o f the con t inu ing g loba l - loca l d i sorder, however, thedo mi na nc e of neo l ib era l is m in two of th e thr ee t r iads (A me ri ca and, toa lesser extent , Europe) and the pol i t ical paralysis of the Japanese s ta tein the thi rd t r iad must be reversed.

Re ce n t ce le bra t ion o f t r i a ds shoul d no t b l ind us to th r ee o the r importan t t endenc ies : (1 ) the g rowing in te rpe ne t r a t i on o f the t r i ads them se lve sas e ffo r t s a re made to deve lop and deepen the i r overa l l complementa ri t i e s and as mul t ina t iona l s headquar te red in one t r i ad fo rm s t ra teg ical l iances with par tners in others ; (2) shif ts in the spat ia l h ierarchieswithin each t r iad due to uneven development - ref lected not only inshif ts amo ng 'nat i ona l ec on om ie s ' bu t a lso in th e r ise and fa l l of regions ,ne w forms of ' n or th -s ou th ' d iv ide , and so fo r th ; and (3 ) th e re - eme rg enc eof reg iona l and loca l economies wi th in some na t iona l economies o r, insome cases , c ross -cu t t ing na t iona l borders - whe ther such resurgenceis pa r t of th e overal l g loba l izat ion process an d/o r deve lops in rea ct io nto i t . Al l of these changes have their own mater ia l and/or s t ra tegic bases and thus contr ibute to the complex ongoing rear t iculat ion of g l o b a l - r e g i o n a l - n a t i o n a l - l o c a l e c o n o m i e s .

Regional blocs and cross-border regions

In addi t ion to the t r iadic macroregions, two of which are emerging withinthe econ om ic space p rev ious l y do mi na te d by At lan t i c Ford i sm, the re a re

pr opo sa ls for other kinds of reg ion al blocs or systems tha t f ra gmen t ,t ranscend or cross-cut nat ional space. Some theoris ts explain thesea l t e r n a t i v e p r o p o s a l s a s r o o t e d i n ' n a t u r a l e c o n o m i c t e r r i t o r i e s ' ( N E Ts ) ,which have been a l lowed to re -emerge o r deve lop wi th the dec l ine o f the na t io na l s t a te as an ec on om ic as wel l a s po l i t i ca l po we r con t a in er. I ti s ce r ta in ly remarkab le how o lder, c ross -border t rad ing b locs and l inkages have re-emerged af ter the I ron Curta in col lapsed in 1989-90. But

NETs have been discurs ively natural ized as wel l as economical ly and pol i t ical ly constructed. Whether any given space is seen as natural or not



The Political Ec on om y of State Resc aling 18 3

depen ds, for exam ple, on views abou t th e dom in an t mo de s of ec on om iccompet i t ion and the var ious economic and ex t ra -economic fac to rs tha tmigh t p r om ot e sys temic o r s t ruc tu ra l compet i t i veness . Thu s , as we sawin chap te r 3 , a Rica rd i an in t e rp re t a t i on (ba sed on fac to r-dr iven growt hin op en ec on om ie s) wo uld lead on e to ident i fy different N E T s and ec onom ic s t ra tegi es f r om th os e imp lie d in a Lis t i an acc oun t (ba sed on pr otec t ion i s t ca tch-up inves tment dynamics p romoted by a na t iona l s t a teconcerned wi th i t s economic and po l i t i co-mi l i t a ry secur i ty ) . L ikewise ,a Keynes ian read ing (based on secur ing the in te rdependent condi t ionsfor mass p r odu c t i on eco nom ies o f sca le and mas s con sum pt i on) wo uldimply d i ffe ren t NETs and economic s t ra teg ies f rom a Schumpete r ianone (based on securing the condi t ions for systemic compet i t iveness and

p e r m a n e n t i n n o v a t i o n ) .

Th e eros ion of th e re la t ive c losure of At la nt i c Fordi sm, th e end of theCold War, the decomposi t ion of the Soviet Bloc and the 'opening ' of China to foreign capital have reinforced the relativization of scale andcre ate d space for ne w eco no mi c an d pol i t ical s t ra tegies o n th e pa r t of f i rms and s ta tes a l ike . These changes are ref lected in a prol i ferat ion of sca les on which a t t empts a re now be ing made to res t ruc ture economic ,

pol i t ical and social re la t ions - ranging from economic global izat ion,g loba l governance and g loba l cu l tu re to the p romot ion of loca lecon omie s , ne ig hb ou rh oo d dem ocr acy and ' t r iba l ' iden t i t ie s . At on ee x t r e m e i s w h o l e - h e a r t e d a d o p t i o n o f f r e e t r a d e a n d t h e u n c o n d i t i o n a lintegrat ion of economic spaces as quickly as possible into the worldeco nom y. His tor ical ly, advoc acy of f ree t ra de is associate d with ec onomica l ly d om in an t pow er s , tha t is , po we rs tha t hav e a l ead in ne w technolog ies , a p redominan t ro le in p roduc t ion and t rade , and con t ro l o f ahegemonic or master currency. I t i s not usual ly wil l ingly embraced inweak economies , however, where f ree t rade is l ikely to generate decl in

ing ec ono mi c coher enc e o r d i s in tegr a t ion o f the ec on om y and i ts subord in a t i on to ex te r na l in f luences - wh e t he r th ro ug h growing technol og ica ldependence , impor t pene t ra t ion a t the expense o f loca l en te rpr i se (wi thl i t t le cha nce to adjust s t ru ctura l ly) , cu rr en cy de pr eci at i on an d inf la t ionin cases wh er e the cu rr en cy f loa ts , or e lse rec ession, in cases wh er e th enat ional currency is pegged to a s t ronger one (such as the US dol lar) . None the l ess , e le men ts o f th i s neo l i bera l s t ra te gy were in i t ia l ly adv oca tedin severa l post - soc ia l i s t eco nom ies ( r e in for ced , o f course , by neo l ib era l lyinc l ined in te rna t ion a l agenc ies , the U S A and Tha tche r i t e Br i t a in ) ; they

are a l so inc luded in the condi t iona l i t i e s a t t ached to s t ruc tura l ad jus tment p r og ra mm es p rop osed by the Wor ld Ba nk fo r c r i s i s - r idden Afr ica n andL 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 al s o b e e n r e c o m m e n d e d f or several of the post-cr is is economies in East Asia (again encouraged bythe usua l in te rn a t i ona l suspec t s ) . On mo r e loca l sca les , neo l iber a l i s m i s




also evide nt in th e massive exp an si on of f ree econ omi c zones , op enma rk et encl aves , f ree t rad e zones , an d so for th .

Seco nd, a t the opp os i te end of the s pec tr um , th e cr is is of nat io nalec on om ie s has been ass ocia ted with var ious plans for pr ote ct i oni sm , i f no tautar ky. S uch plans involve select iv e, i f no t com ple te , wi thd raw al f rom theworld economy to develop a s t rong nat ional economic base before beingexpo sed to in te rna t iona l comp et i t ion . Th is appro ach i s som et i mes l inkedto in fan t indus t ry -s ty le a rgu me nts an d /or re fe r r ed to the impo r t subs ti tut ion phase o f severa l Ea s t As ia n NI Cs ' g ro wth t ra jec to r ies before theyturned to export- led development . I t i s a lso l inked occasional ly togeo str a te gic and securi ty con sid er at i ons (aga in as in the So uth Ko re an or Taiwanese cases) . But a ful l -blown autarkic s t ra tegy is di ff icul t whereeconomies depend on impor ted raw mate r ia l s , have fo re ign deb ts , o r a rea l ready in te gra ted in to the in te rna t io na l d iv is ion o f l abour .

Thi rd , bu i ld ing on the p rocess o f t r i ad fo r mat ion , the re a r e a t t emp ts by other economies to extend and deepen their l inks to the neighbouring t r iad bloc. For example, in tegrat ion into the EU or the EuropeanFre e Tr ade Assoc i a t ion was the mos t popul a r in i t i al op t ion am on gsevera l Eas t e rn and Cent ra l Eu ro pe an econo mies , e specia l ly g iven thecol lapse in the Soviet-era Comecon bloc af ter 1989 (Bakos 1993) . Withdue caut ion about the f inancial costs and economic impact on sensi t ivesec tors , th i s s t ra tegy of en la rgement has a l so been promoted by thelead ing EU economies fo r va r ious economic and /or geopol i t i ca l r easons .This i s r e f lec ted in a nu mb er of p r og ra mm es to p r om ot e c ross -b order l inkages and coopera t ion among non-con t iguous reg ions , c i t i e s o r local i t ies . The same general s t ra tegy is found in East Asia . This has beenar t i cula ted mo st c lea r ly in Japa n ' s so-caf led ' f ly ing gees e s t ra teg y ' -tha t is, in tegrat ion of f i rs t - , sec ond- a nd third- t ier Eas t As ia n NIC s i ntoa regional divis ion of labour under Japanese hegemony. This s t ra tegynot only involves a new regional divis ion of labour but a lso Japanesea t tem pts to expor t it s d i s t inc t ive sys tem of l ab our re la t ions (Woodiw iss1 9 9 8 ) 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 ereg i me (Es p in g-A nde rs en 1997; Jon es 1993; Kw on 1997) . Th e inc reasingly co mp le x forms of reg iona l an d cro ss- bor der int egr at i on in theAmer ican hemisphere , e spec ia l ly regard ing the var ious nes ted and /or eccen t r i c h ie ra rch i es o f loca l an d reg iona l e con omi es in La t in Am er ic a ,a lso provide a r ich f ie ld of s tudy here (Grugel and Hout 1999; Het tneet al 2000; Sch ulz et al . 2001; Vel ling a 2000).

Four th , and converse ly, the re a re p roposa l s to es tab l i sh neo-mercant i l is t t rading blocs . This is wel l i l lus t ra ted in the idea of resurr e c t i n g C o m e c o n a s a m u l t i l a t e r a l m a c r o e c o n o m i c o rg a n i z a t i o n i n t h efor m of a Cus tom s U ni on wi t h co mm on ex te rn a l cus t oms regu la t io nsa n d / o r a C e n t r a l E u r o p e a n P a y m e n t s U n i o n t h a t w o u l d c l e a r t r a d e



The Pol i t ical Econom y of State Rescal ing 18 5

imb ala nce s on a bi- or mul t i l a te ral basis (And reff an d And ref f 1995;Smyslov 1992) . On a lesser but s t i l l supranat ional scale , there were pro

posa l s fo r loca l eco nom ic in tegr a t io n am on g subse t s o f the fo r mer pos t -social is t economies . The best-known case (and one ini t ia l ly backed bywes te r n cap i ta l i s t fo rces ) a im ed to es tab l i sh a Ce nt ra l E u r o p e a n Fr eeTrade Ass oc ia t ion invo lv ing Hun gar y, Po la nd and Czechos l ovak ia , bu t i thas been overshadowed by the i r cand idacy fo r the European Union .Analogous p roposa l s have been pu t fo rward fo r a yen- t rad ing b loc inEast Asia as a basis for deepening the regional divis ion of labour, reduci n g o v e r d e p e n d e n c e o n t h e A m e r i c a n m a r k e t ( a n d , i n d e e d , t h e U Sdol la r ) , p rov id ing a space wi th in which Confuc ian cap i ta l i sm and /or Asian values can be consol idated in the face of a neol iberal offensive,an d a me an s of re du ci ng fu tur e expo su re to volati le global forces(F ran kel 1994; Go ng 1999; Sum 2001; Vel l in ga 2000) .

F i f th , the re a re var ious in te rna t iona l p roposa l s fo r coopera t ion be tween pos t - soc ia l i s t and cap i ta l i s t economies to c rea te new reg iona lec on om ic fo rma t ions . The y inc lude : (1) a Black Sea Ec on om ic Coo pe rat 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 rg a n i z a t i o n i n C e n t r a lAs ia ; (3 ) Ba l t i c Sea coopera t ion ; (4 ) a resur rec ted Danubian Confederat ion ; and (5 ) the ' Japan Sea ' R im Economic Zone . Such proposa l s a rein t end ed to bu i ld on a h i s to ry o f reg io na l excha nges , g ro win g eco nom ict ies and the complementa ry s t reng ths o f d i ffe ren t pa r tners ; and they a l sohav e a var i e ty of geopol i t ical , e thnic , re l igious , cul tur al and ot he r base s ,which var y f rom cas e to case . Th e inc rea sed US rol e s ince th e a t t ack son the Wo r ld Tra de Cen te r and the Pen t ag on in the sou t he rn Turk i crepubl ics o f the fo rmer Sovie t Union prov ides a fu r ther i l lus t ra t ion o f th i s op t ion .

S i x th , 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 dto l ink m or e th an two sub na t i ona l eco no mi es in t o ne w reg iona l en t i t i e sin the hope of deepen ing ex i s t ing complementa r i t i e s . These inc lude p ro

posa l s fo r pos t - soc ia l i s t Europe and fo r EU/non-EU l inkages ( such asI n t e r r e g G r e e c e , I n t e r r e g Vi a d r i n a , I n t e r r e g I t a l y - S l o v e n i a , a n d m a n yo 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 1 9 94 , 2 0 0 1 ; P e r k m a n n 2 0 0 0 ) ; a n d ,aga in , ou t s i de the Eu ro pe an spher e , in the Mut ank ian g de l ta , invo lv ingSiber ia and the Far Ea st er n republ ics of th e CIS, provi nces in no r t heas te rn Chi na and Nor th Korea , wi th Jap ane se back ing (cf. Eur op ea nCommuni t i es 1992) . In add i t ion , the re a re v i r tua l reg ions compr i s ingeconomic ne tworks connec t ing non-con t iguous reg ions and /or c i t i e s . Themos t famous o f these i s the Four Motors Region in Europe tha t l inksf o u r n o n - c o n t i g u o u s h i g h - g r o w t h r e g i o n s : n a m e l y, B a d e n - W t i r t t e m b e rg ,R h o n e - A l p e s , L o m b a r d y a n d C a t a l o n i a ; b u t t h e r e a r e s e v e r a l o t h e r s u c hr e g i o n s a n d / o r f o r m a l l y o rg a n i z e d E u r o p e a n u r b a n n e t w o r k s ( C a m h i san d Fo x 1992; Int er re g 2001; Scot t 2001; Vel l inga 2000) .



•f

1 8 6 The Political Ec ono m y of State Resc aling

Ci t i e s

A fur ther scale of act ion that is emerging (or, more accurate ly, re-emerg ing in new forms) a l so cu t s ac ross convent iona l geoeconomican d geopol i t ica l hier arc hies . This is th e ur ba n scale . Th er e are th re esignif icant cha nge s occu rr i ng here : (1) the vast expa nsi on of th e s ize andscale of leadin g ci t ies wit hin ur ba n hiera rchi es so tha t the y be co me larg er met ropol i t an o r reg iona l en t i t i e s wi th severa l cen t res (on ex tendedmet ro pol i t a n reg ions and urba n cor r ido rs in Paci f ic As ia , see Fo rb es1997) ; (2 ) an inc re as ing s t ruc t ura l in t egr a t i on and s t ra teg ic o r ien ta t ionof c i t i e s ' ac t iv i t i e s be yo nd na t iona l space - an o r i en t a t i on tha t c rea te s

pot ent ia l confl ic ts wi t h the nat ion al s ta te as som e ci t ies be co m e po te nt ia l ' regional s ta tes ' less or iented to their respect ive nat ional hinterlands tha n to thei r t ies with c i t ies an d eco nom ic spaces abr oad (witnessthe inc reas ing use o f the ' ga teway ' , ' hub ' and 'ne twork ' metaphors ) ;and, paradoxical ly, (3) the growing role of some leading ci t ies ( ra ther than, as hi ther to , specif ic f i rms or sectors) as s ta te-sponsored and s ta te-

p ro tec ted na t iona l champions in the face o f in tens i fy ing in te rna t iona lc o m p e t i t i o n .

Ha rd in g has def ined th e con ten t o f these en t r ep re ne ur ia l po l ic ies asinvolving 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 withinindigenous firms; the promotion of job-creation and training measuresin response to growing urban unemployment; the modernization of theinfrastructures and assets of urban regions (communications, culturalinstitutions, higher educational strengths and capacities) to attract investment and visitors and support existing economic activities; and the needto limit further suburbanization, retain population (particularly middle-to-upper income families) and workplaces and create compact, livable cities.(1995: 27)

Storper ' s analysis of the ref lexive c i ty c la ims that uncer ta inty and r isk a re changing in a per iod when marke t fo rces and the ex t ra -economice n v i r o n m e n t f o r 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 einf luen ced by th e s t ra tegic calc ula t io n of ot he r actors , an d m or e op en toinf luence on a wide range of spat ia l scales . But not a l l entrepreneuria lc i t ies target the same forms of compet i t iveness . In some cases pol icyinnovat ions involve l i t t le more than at tempts to secure largely s ta t iccompara t ive advan tages by a t t rac t ing inward inves tment f rom mobi lecap i ta l a t the expense o f o ther p laces th rough such measures as t ax b reaks , subs id ies and regu la to ry undercu t t ing and /or s imple , c iv ic



The Pol i t ical Eco nom y of State Rescal ing 1 8 7

4. Scales of Competition

The preceding analysis suggests that compet i t ion occurs not only betw ee n econ omi c ac to rs ( fo r exa mp le , f i rm s , s t ra teg ic a l l i ances , ne tw or ks )

bu t a l so be tween po l i t i ca l en t i t i e s represen t ing spaces and p laces(for exam pl e, c it ies , regi ons, nat io ns , t r iads ) . I t i s jus t i f ied to t r ea t c i t ies ,reg ion s and nat ion s as 'u ni t s ' or ' subjects ' of co mp et i t io n insofa r as co m

pe t i t iveness depends on ex t ra -economic as wel l a s economic condi t ions ,capac i t i es and competences . For th i s means tha t compet i t ion i s media ted

by m or e th an pu re mar ke t fo rces and ra i ses the que s t i on wh e t he r thecon di t ion s of successful co mp et i t io n for a ci ty, reg ion or na t i on ar ean alo gou s to tho se for a s ingle f i rm. Ca n cit ies , reg ion s or na t i on s ach iev ecompet i t iveness in s imilar ways to f i rms, and, i f not , do they at leas t

pursue economic compet i t iveness in the same way as each o ther? The

boo ste r is t imag e-bu i ldi ng. In oth er cases , c i t ies an d reg ions int r od uc eeconomic , po l i t i ca l and soc ia l innova t ions to enhance p roduc t iv i ty andother condi t ions a ffec t ing the s t ruc tura l and /or sys temic compet i t ivenessof both local and mobile capi ta l . This would be re inforced to the extentthat they possess a social ly dense, ins t i tu t ional ly thick space for economicref lexivi ty and th e f lexi ble pool ing of r isks a nd unc er t a in t ie s in anincrea singly tur bul en t nat ion al , reg iona l an d global envi ro nm en t (cf.St or pe r 1997; Vel tz 1996) .

Alliance strategies

These complex i t i es po in t to the po ten t ia l fo r a l l i ance s t ra teg ies amongstates on s imilar or di fferent regional scales ( for example, the EU,w h e t h e r a s a n i n t e rg o v e r n m e n t a l o rg a n i z a t i o n of n a t i o n - s t a t e s o r a'Europe of the regions ' ) to secure the basis for economic and pol i t icalsurviva l as the impe ra t i ves of s t r uct ur al com pet i t i ven es s on a global scalema ke thems e lve s fe lt . Ot he r fo rm s of p ro tec t ion i sm have be en pr op os edor organized on different scales as past regional and local modes of g row th a re d i s ru p te d ( rang ing f r om 'For t ress Eu r op e ' to ' n ew loca l i sms ' ,f rom the Sao Paul o F or um or th e Pe op le 's Plan for the Twen ty-F irs tCentury to the in formal economic se l f -o rgan iza t ion o f shan ty towns) .

None the less , in genera l t e rms , as no ted by Mi t te lman , ' [ r j eg iona l i sm inthe 1990s is not to be considered as a movement toward terr i tor ia l ly

based autarkies as i t was dur ing the 1930s. Rather, i t represents concen t ra t ion o f po l i t i ca l and economic power compet ing in the g loba lecon omy, wi th mul t ip le in t e r r eg i ona l and in t ra re g iona l f low s ' (1996:190;see a lso Keat ing 1998) .



18 8 The Political Ec ono m y of State Res caling

answer c lea r ly de pe nd s on how bro ad ly one in te rpr e t s compe t i t i on , com pe t i t iv eness a nd capac i t i es fo r ac t ion (on na t i ons , see I M D 2001; Por te r 1990; Po rt er et al . 2000; W a r r 1994; on cit ies an d city-regi ons, see Br e nn e r 2000; O h m a e 1991, 1995; Po rt er 1995; Scott 1998, 200 1; St or pe r 1997).Com pet i t ion i s me dia ted th r oug h the inv is ible hand of the mar ke t an dwould occur whether or not actors expl ic i t ly or iented their economicact ivi t ies to enhancing their compet i t iveness . In this sense, market forcesal loc ate such act ivi ties am on g places a nd spaces wh et he r or no t a t te mp tsoccur to a t t ract (or repel) economic act ivi t ies a t levels above individualma rk et agents . Ci t ies , reg ion s an d na t i ons can also co mp et e on a m o r eexpl ic i t , s t ra tegic and ref lexive level , however, in developing and pursuing p lans an d pro jec t s to a t t rac t inv es tme nt and jobs and to enha nc e the i r

pe rf or ma nc e in co mpe t i t ion with other places an d spaces . I f the secompet i t ive s t ra tegies are expl ic i t and capable of being pursued, then i tis c lear tha t c i t ies , reg ions and nat ion s real ly are 'e nt re pr en eu ri a l ' ac tor sand ar e no t jus t descr ibing them sel ves as such. I no w wa nt to ar gue thatan impor tan t d i s t ingu ish ing fea tu re o f pos t -Ford i sm, when comparedwith Fordism, is the increasing s ignif icance of the ref lexive pursui t of 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 b y n o n - e c o n o m i c a c t o r s .

Dr aw in g on Schu mpet e r ' s ana lys i s o f en t re pr ene ur sh i p ( see cha p te r 3) , i t can be suggested that there are f ive f ie lds of innovat ion that can be

pursued by scalar actors on behalf of localit ies, cit ies, regions, nations or triadic blocs:*

1 T he in tr odu ct io n of ne w ty pes of pla ce or space for l iving, wo rk in g, p roduc ing , se rv ic ing , consuming , e tc . Examples inc lude mul t i cu l tu ra lc i t i e s , c i t i e s o rgan ized a round in tegra ted t ranspor t and sus ta inab ledeve lopment , and c ross -border reg iona l hubs o r ga teways .

2 N ew me th od s o f space- o r p la ce- pro duc t ion to c re a te loca t ion-spec i f i c advan tages fo r p roduc ing goods / se rv ices o r o ther u rbanac t iv i t i e s . Examples inc lude new phys ica l , soc ia l and cyberne t ici n f r a s t r uc t u r e s , p r o m o t i n g a g g l o m e r a t i o n e c o n o m i e s , t e c h n o p o l e s ,regu la to ry undercu t t ing and resk i l l ing .

3 Op en in g ne w ma rk e t s - wh e t he r by p la ce- mar ke t ing spec i fi clocal i t ies , c i t ies or regions in new areas and/or modifying the spat ia ld iv i s ion of consumpt ion th rough enhanc ing the qua l i ty o f l i f e fo r res ide n ts , co mm ut er s o r v i s i tor s ( for exam ple , cul tu re , en t e r ta i nme nt ,spectacles , new ci tyscapes , gay quar ters , gentr i f icat ion) .

4 Fin din g ne w sources of supp ly to en ha nc e comp et i t ive adv ant age s .Ex am pl es inc lu de new sources o r pa t t e rn s o f imm igr a t i on , chang ingth e cu lt ur al mix of cit ies, f in ding ne w sour ces of fu ndi ng fr om th ecentral s ta te (or, in the EU, European funds) or reski l l ing thew o r k f o r c e .



The Pol i tical Ec ono m y of State Rescal ing 18 9

5 Refigur in g or redef in ing local , ur ba n or reg ion al hie rar chie s an d/ or a l t e r ing the p lace o f a g iven econo mic space wi t h in the m. E xa mp le sinclude the development of a world or global c i ty posi t ion, regionalgatew ays, cros s-bo rder region s an d 'v i r t ual reg ions ' bas ed on inte rr 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 s p ac e s.

There a re obv ious dangers in t r iv ia l i z ing en t repreneur ia l ac t iv i t i e s byreduc ing them to rou t ine ac t iv i t i e s tha t a re d i rec t ly economic o r economica l ly re l eva n t ; an d in t re a t ing an en t re pre neu r ia l se l f - image or m e r e p l a c e - m a r k e t i n g a s e v i d e n c e o f S c h u m p e t e r i a n e n t r e p r e n e u r s h i p .Some places may s imply be adminis ter ing or managing an exis t ing

business-fr iendly c l imate eff ic ient ly ra ther than being act ively engagedin innova t ion . Tha t th i s may suff ice to main ta in ce r ta in ex t ra -economiccondi t ions fo r cap i ta l accumula t ion does no t mean tha t a p lace i se 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 c i t y, r e g i o n ,na t ion o r t r i ad en t re pre neu r ia l . Wh at i s r ea l ly essen t ia l , f r om a s t ruc tura lv iewpoin t , i s tha t an ' e n t r epr ene ur i a l ' loca l ity has ins t i tu t iona l andorg ani zat ion al feat ures tha t can susta in a f low of inno vat i ons . Wh at isinvo lved her e is a spat ia l ized co mp le x of ins t i tu t ions , no rm s, con vent ions, ne tw orks , o rgan iza t i ons , p r oc edu re s and mod es o f eco nom ic andsoc ia l ca lcu la t ion tha t encourage en t repreneursh ip . Viewed s t ra teg ica l ly, an ' en t repreneur ia l ' loca l i ty i s one tha t has deve loped the capaci ty to act ent rep ren eur ia l ly. I t ma y th en itsel f d i re ct ly tar get on e or m o r eof the f ive f i e lds o f innova t ion as an economic en t repreneur in i t s ownr igh t and /or ac t ive ly p romote ins t i tu t iona l and organ iza t iona l condit i o n s f a v o u r a b l e t o e c o n o m i c e n t r e p r e n e u r s h i p o n t h e p a r t o f o t h e r fo rces . These fo rces may inc lude a l l manner o f loca l , loca l ly dependenta n d i n t e r e s t e d o u t s i d e p a r t i e s w h o s u p p o r t a g i v e n e n t r e p r e n e u r i a le n d e a v o u r.

Wi t h t h e i n c r e a s i n g i n t e r e s t i n 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 sand the bases o f s t r uc tu ra l and /or sys temic comp et i t ivene ss , the ex t r a -ec on om ic fea tur es of plac es and spac es ha ve co me to be incre asingl ysignif icant in the design and pursui t of entrepreneuria l s t ra tegies . Thus,s o - c a l l e d 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 l e s s i m p o r t a n t(desp i te the pa th -d ep en de nt aspec t s o f the pos i t io n ing of p laces in u r ba nhierarchies) ; and social ly constructed, social ly regular ized and social lye m b e d d e d f a c t or s b e c o m e m o r e i m p o r t a n t f o r c o m p e t i t i v e n e s s . E n t r e

p reneur ia l c i t i e s (o r o ther loca l i t i e s ) , the re fore , mus t no t on ly pos i t ion

them se l ves econ omi ca l l y bu t a l so in th e ex t ra - eco nom ic sphe res tha t a reso impor tan t nowadays to e ffec t ive s t ruc tura l o r sys temic compet i t ion .We can refer to 'g lurbanizat ion ' here as a t rend analogous to 'g local izat ion ' (see table 5 .2) . Wh il e th e la t te r te rm refe rs to f i r ms ' s t ra t egies to

bui ld global advantage by exploi t ing local di fferences , the former refers





The Political Ec on om y of State Res caling 1 91

various spat ia l scales : reg ion al , nat ion al , in t er nat ion al , g lob al ' (H al land H ub ba r d 1996 :163 -4) . P rac t i ca l ly, i t genera l ly invo lves p r om oting economic development on any given scale by exploi t ing growthdyn ami cs a t pro gres siv ely asc end ing spat ia l scales f ro m th e localt h r o u g h t h e r e g i o n a l a n d n a t i o n a l t o t h e s u p r a n a t i o n a lThe second opt ion is to bui ld hor izontal l inkages on the same scalewithin an integrated, ver t ical ly nested set of scales . There is a widera ng e of suc h s t ra tegie s ran gin g fro m the local to the t r i adi c scale .Many cross-border regions exemplify this s t ra tegy, as do t ranslocalal l iances and vir tual regions. The la t ter are developed to l ink noncont iguous loca les wi th shared or complementa ry in te res t s - such as

t h e c o o p e r a t i o n a m o n g t h e s o - c a l l e d E u r o p e a n F o u r M o t o r s R e g i o n ,c o m p r is i n g B a d e n - W i i r t t e m b e rg , R h o n e - A l p e s , L o m b a r d y a n dCata lon ia , eac h of whi ch i s a dy na mi c c i ty - re g ion assoc ia ted wi t h amajor non-capi ta l c i ty. In general , th is s t ra tegy bui lds on commonter r i t or i a l in t ere s ts and ident i t ies an d seeks to exploi t jo int or co m

p l em en ta ry res ourc es an d capac i t i es . Th e a im i s e i th e r to dev e lo p ac r i t i ca l mass th rough s imple agg lomera t ion economies o r to deve lopa divis ion of labour a t the same scale ra ther than across scales .This hor izontal s t ra tegy could be developed local ly f rom below

and/or be p romoted by bodies on lower and /or h igher t i e r s o r s c a l e s . T h u s c r o s s - b o r d e r 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 l o c a lc o m m u n e s a s w e ll a s t h e E u r o p e a n U n i o n .

The third opt ion involves bui lding what one might cal l ' t ransversal 'l inkage s - th a t i s, bypa ss in g on e o r mo re imm edi a te ly ne igh bou r in gscale(s) to seek closer integrat ion with processes on var ious other scales . This is especial ly s ignif icant where foreign direct investment(F DI ) and pr od uc t i on for ex po rt ar e involved, wi th the resul t thatl inks to an immedia te h in te r land or even the na t iona l economyma y pr ove far l e ss im po r t an t th an the co nn ec t i on be tw ee n loca l andsu pra na t ion a l sca les . Som e c ross -bor der reg ions in As i a a re goo dexamples of this s t ra tegy - namely, growth t r iangles and growth

pol ygo ns ( Par son age 1992; Sm ith 1997; Th an t e t a l 1998) . Ot he r exa mpl es inc lud e exp or t -p r oce ss i ng zones , f ree por t s and reg i ona lga t ewa ys - a l th ou gh these t e nd to be loca ted wi th in one na t io na l t e rr i to ry an d to be or ie nt ed ou tw ar ds (cf. Ch en 1995 on th e evo lut ionof c ross -na t iona l g rowth zones ; Ohmae 1995 on con temporary reg ions t a t e s ) .

R e s o u r c e p r o c u r e m e n t i s a n o t h e r e c o n o m i c d e v e l o p m e n t s t r a t e g ythat is common in weak or marginal local i t ies , such as inner c i t ies ,decl ining industr ia l or coasta l regions, and so on. This is an unders tandable response in inner c i t ies , for example, which suffer f romur ba n de pr iv at io n, p o or ho us in g, a weak fiscal bas e, a lack of land for




p roper ty deve lopment schemes and po l i t i ca l and ins t i tu t iona l f ragme nta t io n . Loc a l au thor i t i e s in E ur op e may tu rn to the EU for funds(for example, the var ious s t ructural funds) ; and in mult i - t ier federals ta tes , they may turn to the federal authori ty as wel l as to s ta tes .However, success fu l b ids under a resource-procurement s t ra tegytypical ly come with s t r ings a t tached. This constra ins the range of economic in i t i a t ives tha t can be pursued and th rea tens the coherenceof an overa l l economic deve lopment p lan (Hay 1994) .

5 Loca l i t i e s ma y a l so purs ue p la ce- mar ke t ing v ia regu la to ry undercu t t ing , in te rna t ion a l ' be au t y con tes t s ' fo r inw ard inv es tme nt andinternat ional 'ugly s is ter contests ' for s t ructural funds and other res t ruc tur ing or compensa tory funds fo r dec l in ing reg ions . The twoobvious targets for such act ivi t ies are mobi le capi ta l and fundingagencies; centra l s ta tes of ten a id and abet local and regional authori t i es in pur su ing inw ard inv es t men t and res t r uc tur ing funds . Regula to ry undercu t t ing i s a counte rproduc t ive s t ra tegy, however, fo r gen era t in g jobs in a rea s o f eco nom ic dec l ine and can pr om ot e aregu la to ry race to the bo t tom. S t rong compet i t ive s t ra teg ies a regeneral ly far bet ter f rom this viewpoint , but even their resul t ingcompet i t ive advan tages can be competed away ( see chap te r 3 ) .

6 A sixth opti on is to seek an es ca pe fr om scalar or pl ac e- bo un d constraints by locating one's activit ies in a borderless space of flows or moving into 'cyberspace ' . But this does not obviate the need for somesort of spat ia l f ix (offs hore is lan ds, tax ha ve ns , e tc . ) ( see H u ds on 2000;Leyshon and Thrif t 1999; Palan 1998) .

7 A se ve nt h opt io n is a par tia l or co m pl et e dec oup lin g of a giv en scalefrom th e wi der divis ion of la bo ur and wo rld m ar ke t an d is mos t l ikelyto be l inked with ant i -capi ta l is t economic, pol i t ical and societa l izat ion projects (see chapter 1) .

An im po rt an t aspect of mo st of the se differe nt spat ia l scale s t ra tegi esi s the i r con cer n to l imi t com pet i t i on wi t h in the reg ion ( s t ru c tur ed coherence) th rou gh ma rk e t - o r i en t ed coope ra t ion as the bas i s o f mo re e ffect ive compet i t ion beyond the re levant spat ia l scale . The spat ia l scale onwhich these compromises wfl l be s t ruck is shaped in par t by the natureof commodity chains and economic c lusters , by associated spat ia l external i t ies ( inc ludi ng dis t r ic t , pr ox im it y an d syne rgy aspects of agg lom er at ion econ om ies ) and by the ex i s t ing fo rm s of soc ia l em be dd ed ne ss 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 1 9 95 ; M e s s n e r 1998; cf. Porter 1990; Smith 1988).

The ex i s tence o f such en t repreneur ia l p ro jec t s i s no guaran tee , o f course , tha t rea l economic spaces wi th ' s t ruc tu red coherence ' and susta ina b le comp et i t ive adva n tag es wil l be conso l ida ted . Th er e a r e ma ny






by global izat ion. The scope for increased ecological dominance of theglobal iz ing economy depends on the capaci t ies of leading economicforces to d i s tan t ia te and /or compress t ime-space in ways tha t escape thecont ro l capac i t i es o f mos t s t a te -based and s ta te -or ien ted po l i t i ca l fo rces .For th er e ar e few, if any, ind ivi dua l state s wit h an eff ecti ve global re ac han d an abi l i ty to com pre ss their ro ut ine s to ma tc h the t im e- sp ac e of fas thyp er mo bi le cap i ta l . Th is c rea te s a g ro win g d i s junc t ion be t we en thela t t e r ' s spa t io - tem por a l hor iz ons and rou t ine s and those o f mos t contemporary s ta tes and , th rough the i r impac t on the overa l l dynamic o f thecap i tahs t economy, a g rowing d i s junc t ion be tween a po ten t ia l ly g loba lspace o f f lows and the p lace-boundedness o f a t e r r i to r ia l ly segmented

pol i t ical system. Temporal ly, th is l imits the typical s ta te ' s abi l i ty to reactacc ord ing to i ts ow n rout i nes a nd m od es of cal cul at i on - wh ic h is wh ymany s ta te managers fee l the p ressures o f g lobahza t ion and be l ieve theyhave lost operat ional autonomy. Likewise, spat ia l ly, g iven the porosi ty of borders to many different kinds of f low and the growing mobil i ty of capi ta l ov er a ra nge of t r ans nat ion al scales , s ta tes f ind i t increa singlyhard, shou ld they wan t to , to conta in econ om ic, poh t ic al and social

processes within their borders or control f lows across these borders .These changes a re re la ted in tu rn to a g rowing f ragmenta t ion o f the

Wes tpha l ian s ta te sys tem to the ex ten t , inde ed , tha t some com me nt a t o r ssuggest i t i s bein g re pla ce d by a neo -m edi eva l syste m (e .g. , A nd e r so n1996; Ce rn y 2000; Rug gie 1993). H ow ev er , whi le the re a re obse rvab letr en ds to wa rd s f r agm ent at i on in re l a t i on to specif ic f ie l ds , th is does no tnecessar i ly chal lenge the more general role of the nat ional s ta te as acrucial nodal point wi thin interscalar ar t iculat ion (see pp. 201-2) .

I t i s none the less qu i te c lea r tha t the changes assoc ia ted wi th the g loba 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 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 sof rep res en t a t i on , in te rven t ion , in te rna l h ie ra rch ies , soc ia l bases an d

state projects across all levels of state organization. In part , this involvesmajor changes in re la t ions on the same organizat ional level . For example, apar t f rom shif ts in the re la t ive power of the execut ive, legisla ture and judiciary, there are a lso shif ts in the re la t ive weight of f inanc ia l , educa t iona l , t echnolog ica l , env i ronmenta l , soc ia l securhy and o ther o rgans . But reorgan iza t ion a l so ex tends to the reorder ing of re la t ionsamong different pol i t ical t iers , the ar t iculat ion of government and gover na nc e and the rebo rd er i ng of po l i t i ca l sys tems . The se aspec t s o f reorgan iza t ion can be sum ma r iz ed in t e rm s of th r ee se t s o f cha nge s o r b r oa d

tr en ds in th e org ani zat ion of the s ta te and pol i t ics . E a c h br oa d t r en d isa l so assoc ia ted wi th a counte r t rend tha t bo th qua l i f i es and t rans forms i t ss ignif icance for pol i t ical c lass dominat ion and accumulat ion and, morespecifically, for the for m of th e sta te a nd its eco no mi c an d social policie s.These counte r t rends can be in te rpre ted in the f i r s t ins tance as spec i f i c



The Pol i tical Ec onom y of State Rescal ing 19 5

reactions to t i ie new trends rati ier t i ian survivals of earlier patterns. Thisis why they are bet ter seen as counter t rends to the t rends, ra ther thanvice vers a . Thus , I f irs t pre sen t the t r en ds and th en discuss thei r re spe ct ive counte r t rends .

Before moving on to this discussion of t rends and counter t rends,how eve r, i t i s neces sary to ca ut i on against t r eat ing s ta tes as i f the ywere ident ical uni ts . For the formal sovereignty accorded to nat ional terr i tor ia l s ta tes in th e We st pha l ia n sys tem does no t im ply any sub sta nt i veident i ty or equal i ty among them in terms of their capaci t ies for exerc i s ing power in te rna l ly and /or in te rna t iona l ly. They wi l l be p resen tedwi th d i ffe ren t p rob lems by the mul t i sca la r, mul t i t empora l , mul t i cen t r i c

processes that generate global izat ion; and they wil l have different capaci t i es to address these p rob lems and reorgan ize themse lves in response .M o r e o v e r, w h e r e a s t h e 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 o f f o r c e s i n s o m es ta tes l eads s ta t e ma na ge rs to res is t g loba l iza t ion , o t he r s t a tes a re c lea r lyheavi ly commit ted to promoting i t in one form or another. I have a l readycommented above on different scalar s t ra tegies in this regard and wil lnot repeat these comments . Suff ice to say that leading s ta tes are associated with different global izat ion projects and that less powerful s ta teswil l of ten seek to posi t ion their economic spaces and actors more

fav oura bly withi n m o r e specif ic local , reg iona l or fun ct i onal nic he swithin the emerging global divis ion of labour. In so doing, some s ta teswi ll r e in fo rce the i r he ge mo ny or do mi na nc e wi t h in the in te r- s ta tesystem, others wil l fa l l fur ther down the inter-s ta te hierarchy. In part i cu la r, a f t e r wor r ies we re expr ess ed abou t it s dec l ining heg em on y inthe wake of the cr is is of At lant ic Fordism, the USA has c lear ly gainedin global inf luence in recent years through i ts ident i f icat ion with and promotion of global izat ion in i ts own image.

The denationalization of the state

The f i rs t t rend is the denat ional izat ion of the s ta te (or, bet ter, s ta tehood) .This is ref lected empir ical ly in th e 'ho l low ing out ' of the nat i on al s ta teappara tus wi th o ld and new s ta te capac i t i es be ing reorgan ized te r r i to r ia l ly and funct ional ly on supranat ional , nat ional , subnat ional and t ranslocal levels as a t tempts are made by s ta te managers on different terr i tor ia lsca les to en ha nc e the i r r espe c t ive oper a t i ona l au ton om ie s and s t ra teg iccapac i t i es . Thus some of the par t i cu la r t echn ica l -economic , more nar

rowly pol i t ical and ideological funct ions of the nat ional s ta te are beingre loca ted to panreg iona l ly , p lu r i na t io na l ly o r in te rna t iona l ly sca led s ta teor in te rgovernmenta l bod ies ; o thers a re devolved to the reg iona l o r loca lleve l ins ide the na t iona l s t a te ; and ye t o thers a re under taken by emerging hor izo n ta l ne t wo rk s o f po we r - r eg ion a l and /or loca l - wh ic h bypas s



19 6 The Pol i t ical Ec ono m y of State Rescal ing

central s ta tes and l ink regions or local i t ies in several societ ies and maygive r ise to th e dev el op me nt of so-cal led ' in te rmes t ic '^ (or in ter local butt ransna t iona l ized) po l icy-making reg imes . The s ideways sh i f t invo lvesre la t ive ly au tonomous c ross -na t iona l a l l i ances among loca l s t a teswi th complementa ry in te res t s and i s pa r t i cu la r ly assoc ia ted wi th theE u r o p e a n i z a t i o n o f lo c a l g o v e r n m e n t a n d a s s o c i a t e d f o r m s o f p a r t n e rsh ip (An de rs en and El iass en 2001; Be nin g to n 1995 , Be ni ng to n andHa rv ey 1994; Jonsso n e t a l 2000; Ke i l 1998; T om m el 19 92 ,1 994 , 1998 ) :

Firs t , th e role of su pr an at ion al s ta te systems is exp andin g. Su ch interna t iona l , t r ansna t iona l and panreg iona l bod ies a re no t new in themselves: they have a long history. What is significant today is the sheer

increase in their number, the growth in their terr i tor ia l scope and their acquis i t ion of important new funct ions . This ref lects the s teady emergence of a world society rooted in a growing number of global funct ionalsystems (economic, scientific, legal, polit ical, mili tary, etc.) and in wider rec ogn i t i on of th e global re ach of old and ne w r isks . O n e of th e maj or a rea s fo r th i s func t iona l exp ans ion i s the conce rn o f sup ra na t ion a l bod ieswi th s t ruc tura l o r sys temic compet i t iveness wi th in the t e r r i to r ies tha tthe y seek to gover n. This goes wel l be yo nd co nce rn with ma na gi ng interna t i ona l mo ne ta ry re la t ions , fo re ign inv es t men t o r t r ade to enc omp ass a

wide rang e of supply -s ide factors , both eco nom ic and ex tr a- ec on om ic inn a t u r e .

The upwards shif t i s par t icular ly associated with the delegat ion of powers to suprana t iona l bod ies and the resurgence o f a re inv igora tedand re la t ive ly uncha l lenged Amer ican ' supers ta te ' wi th rev i ta l i zedcapacities to project i ts power on a global scale (Shaw 2000). As we shallsee below, this cre ate s a tens ion be tw ee n unic i ty an d pa r t i cul ar i sm inthese suprana t iona l bod ies , wi th the USA above a l l osc i l l a t ing be tweena t tempts to un i fy such bodies under i t s hegemony and a t t empts to use

them to impose i t s cur ren t ly p reva i l ing percep t ion of i t s own immedia teinter es ts . Th e sa me up wa rd s shif t, on a lesser scale an d wit h differen tdynamics , i s a lso ref lected in the EU. Hooghe and Marks, updat ing calculat ions by Schmit ter, show that there was an increase in the t ransfer of powers upwards to the EU level in twenty-eight di fferent pol icyare as be tw ee n 1950 and 2000. This has be e n mo st m ar ke d in the f ie ldof ec on om ic pol icy, fo l lowed by in t e rn a t i ona l re la t io ns and e x te r na lsec uri ty/ eco nom ic pol icy. I t i s leas t ma rk ed in social and indust r ia l

policy, with legal-constitutional policy also scoring relatively low on this

me as ur e (H oo gh e and Ma rk s 20 01: 47 -8 ; cf. Wess els 2000; see a lso sec t ion8 b e l o w ) .

Such movements do no t , however, amount to the r i se o f a ' g loba l s t a te '- at least if the concept of the state is to retain i ts core meaning of theter r i t or ia l iza t ion of a centra l ized pol i t ical aut hor i ty - su ch th at a global






and t ra ining, tecl inology t ransfer, local venture capi ta l , innovat ioncentr es, scienc e parks , an d so on (s ee cha pt er 3). T he declin ing ineffectiveness an d legitimacy of th e na ti on al st ate in th e face of For dist crisisha d alr ead y led in th e late 1970s to enh an ce d roles for reg iona l an d locals ta te s as ne w act ivi t ies we re ad op te d bo th to co mp en sa te for th e cr isisand to see k ne w way s out (Mou la er t e t a l. 1988; va n Ho og st ra te n 1983) .This is even clearer today. Indeed, as nat ional and internat ional s ta tesre t rea t f rom some key economic func t ions , we f ind more in te rven t ion i s t policies at the regional, urban and local levels (Brenner 1998, 1999b,2000; Gough and Eisenschi tz 1996) as wel l as an increasing resor t bycapi ta l i tse lf to ne tw or ki ng and oth er forms of pa r t ne rs hi p to secur e

these requ i rem ent s . Th is t r ans fe r o f pow ers do wn wa rd s i s no t conf inedto ec on om ic int er ven t io n bu t affects a wid e rang e of ot he r pol icy areas .For example , Hooghe and Marks (2001) repor t tha t no EU member s ta tehas become more cen t ra l i zed a f te r 1980 and tha t many have decen t ra li zed au thor i ty to a reg iona l t i e r o f government .

Third, c losely connected to the f i rs t two changes, there are growingl inks am on g local s ta tes. This t r en d is re in for ced by the cent ra l s ta te ' sinabi l i ty to pursue suff ic ient ly different ia ted and sensi t ive programmesto tack le the specif ic pr ob le ms of par t ic ula r local i t ies. I t th er ef or e

devolves such tasks to local s ta tes and provides the la t ter wi th generalsup por t and resources . Indee d , ' o ne o f the mos t in te r es t i ng po l i t i ca ldevelopments s ince the 1970s has been the erra t ic but gradual shif t of eve r mo re local au thor i t ie s f ro m an ident i f icat ion of thei r role in pu re lyna t iona l t e rms towards a new in te res t in t ransna t iona l re la t ionsh ips '(Dyson 1989: 1) . In Europe this involves both ver t ical l inks with EUins t i tu t ions , e spec ia l ly the European Commiss ion , and d i rec t l inksamong loca l and reg iona l au thor i t i e s in member s ta tes . The sea rch fo r cr oss -bo rd er su pp or t is s t re ng th en ed to the extent that the centra l s ta te

pu rs ue s a m o r e neo l ib era l s t ra tegy, bu t i t can be found in ot he r co untr ies too ( Jons son et a l . 2000; P e r k m a nn and Su m 2002) . Similar t r en dsare d i sce rn ib le in Ea s t As ia (no ta b ly in l inks be tw ee n H on g Kong , Ma ca oand Guangdong, and in the so-cal led growth t r iangle formed by Singa

pore , Johore and Riau) . Th is th i rd t rend i s a l so deve lop ing in Nor thAmer ica , wi th s t r ik ing examples in the expans ion of t r ansborder coopera t ion o f l inked ci t i es a long the US - Me xi ca n boun dar y, the p ro mo t i onof Cascad ia as a mul t i s t a te /p rov ince c ross -border reg ion invo lv ing acor r idor in the Nor t hw es t Am er ic an coast s t re tch ing f rom Va nco uve r to

Sea t t l e an d Po rt l and , an d a m or e gen er al in teg rat i on of c i t ies an d reg ionsa long th e U S- Ca na di an bo rd er (Bla t t e r 2001; Spa rke s 2002) . Th isgen era l ph en om en on has l ed Du ch ac ek (1990) to t a lk o f the spre adof ' pe r fo ra t ed sove re ig n ty ' a s na t i ons bec om e mo r e op en to t ran s -sovereign contacts a t both local and regional level .



The Political Ec ono m y of State Resca ling 19 9

T h e d e s t o t i z o t i o n o f t h e p o l i t i c a l s y s t e m

The re is a lso a t r en d towar ds the desta t iz at io n of th e poht ical sys tem .Whi le dena t iona l iza t ion concerns the t e r r i to r ia l d i spers ion of thena t io na l s t a te ' s ac tiv i t ie s (henc e de- and re te r r i to r ia l i za t ion) , des ta t i zat ion invo lves redrawing the pub l ic -pr iva te d iv ide , r ea l loca t ing t asks , andrear t i cu la t ing the re la t ionsh ip be tween organ iza t ions and tasks ac rossthis divide on whatever terr i tor ia l scale(s) the s ta te in quest ion acts . Ino ther words , some of the par t i cu la r t echn i ca l -e conom ic , na r rowly po l i t ical and ideological funct ions previously or newly performed by s ta tes(on any level) have been t ransferred ent i re ly to , or shared with , o ther ( 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 rs ,ins t i tu t iona l a r rangements o r reg imes . At s take here i s the inc reasedim por ta nce o f qu i te va r ie d fo rms (an d leve l s ) o f pa r tne rsh ip be tw ee noff ic ia l, pa r as t a ta l and NG O s in ma na gi ng ec on om ic and soc ial r e l a t io nsin which the s ta te is of ten only f i rs t among equals . This leads to a blurr ing o f the d iv i s ion be tween publ ic and pr iva te , to consc ious dep loymentof th e pr in ciple o f subsidiar i ty, to an increa sed rol e for the info rma lsecto r as wel l as pr iv ate ent erp r is e (es pecial ly in th e del iv ery of welf areand co l lec t ive consumpt ion) and to inc reased re l i ance on mechanisms

such as ' regulated sel f - regulat ion ' and off ic ia l ly approved 'pr ivate interes t government ' (Streeck and Schmit ter 1985) . I t i s a lso hnked to thes ta te ' s g rowing invo lvement in decen t red soc ie ta l gu idance s t ra teg iesra ther than the exerc i se o f i t s sovere ign powers o f cen t ra l i zed imperat ive co or di na t i on (M at zn er 1994; Wi l l ke 1992) . In this sens e i t invo lvesg r o w i n g r e c o g n i t i o n o f i n t e r d e p e n d e n c e , t h e d i v is i o n o f k n o w l e d g e , a n dthe nee d fo r mu tu a l l ea rn ing , re f lex ivi ty and negot ia ted co ord ina t ion .This t rend occurs on var ious terr i tor ia l scales and across var iousfunc t iona l domains and has o f ten been summar ized as the sh i f t f rom

g o v e r n m e n t t o g o v e r n a n c e ( s e e c h a p t e r 6 ) .

Go ve rn me nt s have a lways re l i ed on o th er agenc ies to a id th em inrea l i z ing s ta te ob jec t ives o r p ro jec t ing s ta te power beyond the fo rmals ta te appara tus . There i s no th ing new about pa ra l l e l power ne tworks tha tcross-cut and unify the s ta te apparatus and connect i t to other socialforces . But this re l iance has been reordered and increased. The re la t ivewei ght of go ve rn an ce has in cre ased on al l levels - incl udin g no t only a tthe suprana t iona l and loca l o r reg iona l l eve l s bu t a l so in the t rans te r r i -tor ial an d int er loc al fie lds. Thi s n e e d no t ent ail a loss in the po w e r of

g o v e r n m e n t , h o w e v e r , a s if p o w e r w e r e a z e r o - s u m r e s o u r c e r a t h e r t h a na soc ial r e l a t io n . Thu s resor t to gov er nan ce cou ld en ha nc e the s ta te ' scapaci ty to project i t s inf luence and secure i ts object ives by mobi l iz ingknowledge and power resources f rom in f luen t ia l non-governmenta l pa r tne rs or s ta keh old er s . Mo re ov er , in th e l ight of shifts in th e bala nce o f







2 0 2 The Political Ec ono my of State Rescaling

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

• den at i ona l iz at i on of the s ta t e ;sps ides ta t i za t ion o f po l i t i c s ;

• n i U i n a l i n n a i / . il n > n i l p n l ic v i v^ M n i c v

JlllMintertrends• inc rea sed sc ope for s ta te in inter scala r ar t ic ulat i on;

• inc r ease d ro le fo r s t a te in me ta gov er nan ce ;

• o i n i . A l n i f l l i e I c i m s a n d i m p L m u i l . l u i n o l n i l c r n a l i n r a l

iisiiii:fiiiiliii:?lsSB|lH

coord ina t ion and the space fo r subna t iona l resurgence , bu t i t a l soex t ends th e re by the scope fo r the na t io na l s t a te i tsel f to med ia te be t we enthe increasing number of s ignif icant supra- and the subnat ional scales of act ion. In this context , us ing a dis t inct ion introduced by Col l inge (1999)

be tw ee n dom ina n t a nd no da l sca les o f o rgan i za t ion , we can say tha t ,w h i l e s u p r a n a t i o n a l i n s t i t u ti o n s m a y h a v e b e c o m e m o r e c o m p r e h e n s i v ean d inclus ive in th e ra ng e of act ivi t ies tha t they und er ta ke an d/o r se ek to inf luence, and while an increasing range of s ta te act ivi t ies may bede le ga te d down wa rd s and /or s ideways , an y ten denc y tow ard s inc re as ingdominance of the suprana t iona l l eve l need no t de t rac t f rom the nodal role of the nat ional s ta te in the expanding web of s ta te powers . In short ,whi le the nat ional s ta te may have lost some formal sovereignty, i t couldwel l re ta in a key role in interscalar ar t iculat ion.

C o u n t e r i n g t h e s hi f t 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 dro le in metagovernance . Th is i s e spec ia l ly ev iden t in the opera t ion o f theEU and in a t t empts to overcome dec i s ion t raps and ins t i tu t iona l g r idlock owing to d i sagreements be tween member s ta tes . Th is ind ica tes theex ten t to whi ch go ve rn an ce ope ra t es in the shado w of go ver nm en t . Gover nm en ts (on var ious sca les ) a re be com in g mo re invo lved in o rgan iz ingthe se l f -o rgan iza t ion o f pa r t ners h ips , ne tw or ks and gover nan ce reg ime s(on me ta go ve rn an ce , see ch ap te r 6 ). Th is shou ld no t be confuse d wi t hth e surv iva l o f s t a te sov ere ign t y as the h ighes t ins t anc e o f go ve rn me ntno r wi th the emer ge nc e o f so me form of 'm eg ap ar tne rs h i p ' to which a l lo ther pa r tnersh ips a re somehow subord ina ted . Ins tead , i t invo lves a sh i f tf rom the top-down h ie ra rch ica l po l i t i ca l o rgan iza t ion charac te r i s t i c o f sovereign s ta tes to an emphasis on s teer ing mult iple agencies , ins t i tu t ionsand sys tems tha t a re bo th opera t iona l ly au tonomous f rom one ano ther and s t ruc tura l ly coupled th rough var ious fo rms of rec ip roca l in te r-



The Pol i tical Eco nom y of State Rescal ing 2 0 3

de pe nd en ce . I t fa lls to th e s t a t e to faci l i ta te col lect ive lea rn ing ab ou tfunc t iona l l inkages and mate r ia l in te rdependenc ies among d i ffe ren t s i t e sand spheres of action. And it falls to polit icians - local as well as national- to par t ic ipate in developing the shared vis ions that can l ink complementa ry fo rms of governance and maximize the i r e ffec t iveness . Suchtasks are conducted by s ta tes not only in terms of their contr ibut ionto par t ic ula r s ta t e funct i ons , bu t a lso in ter ms of their impl ic at io ns for pol i t ical c lass do mi na t i on and social cohe sio n.

Th e tend en t i a l shi ft f rom go ve rn me nt to gove rnan ce need no t we ak enthe s ta te appara tus as a whole o r undermine i t s capac i ty to pursuespecific state projects. Much will depend on the ways in which new gover na nc e me ch an is ms ar e l ink ed to th e pur sui t of cha nge d s ta te goals innew contexts and to the s ta te ' s capaci t ies to project i t s power into thewider society. This is ref lected ideological ly in the neol iberal c la im thatan overextended s ta te is a weak s ta te - which implies that only byconfining i ts act ivi t ies to those which the s ta te apparatus a lone can (andm us t) do can i t be su re to pe rf or m ev en thes e effect ively. I n bot h res pec tsi t i s impor tan t to res i s t the idea l i s t i c and e r roneous impress ion tha texpa ns io n of no n- gov er nm en ta l reg ime s unp l ies tha t the s ta te i s nolonger necessa ry. Indeed , the s ta te re ta ins an impor tan t ro le p rec i se ly because of the development of such regimes. For i t i s not only an importan t ac to r in ma ny ind iv idua l gov ern anc e mec han ism s , bu t a l so re ta insresponsibi l i ty for their overs ight in the l ight of the overal l balance of c lass forces and the ma in te na nc e of social coh esi on.

S o m e w h a t a m b i g u o u s l y c o u n t e r i n g y e t r e i n f o r c i n g t h e i n t e r n a t i o n a lizat ion of pol icy re gim es is th e growi ng im po rt an ce of na t i ona l s ta tes ins t rugg les to sha pe the dev e l op me nt o f in t e rn a t i ona l po licy reg i mes an dthe manner in which they opera te in the in te res t s o f the i r r espec t ivena t iona l cap i ta l s and e lec to ra tes . Th is needs recogniz ing because o f theex ten t to which the na t iona l s t a te p rev ious ly managed the inse r t ion o f na t i ona l econ om ic space in to th e wide r econo my. None the l ess , on e shoul dnot min i mize th e rea l d i scon t inu i t i es in the s ta te ' s cur re n t con ce rns fo r the s t r uc t ura l com pet i t ive ness o f na t io na l l y based cap i ta l s a t ho m e andabroad tha t a re due to the new forms of reg iona l iza t ion-g loba l iza t ion .Indeed , smal l open economies in th i s p lu r ina t iona l sys tem were commit ted to main ta in ing the s t ruc tured coherence o f the i r na t iona l econ o m i e s d e s p i t e t h e i r d e p e n d e n c e o n e x po r t s . T h e y a p p e a r e d t o h a v emanaged the i r na t iona l economies and secured the un i ty o f the power

b loc and people desp i te l eve l s o f in te rna t ionahza t ion tha t would now besaid to imply a loss of soverei gnty. Thi s suggest s th at th e po w er of thena t ion a l s t a te in th e face o f in te rna t iona l iza t ion de pe nd s c r it icaf ly on t hecohesion of the pol i t ical es tabl ishment or power bloc. This said , s ta te

power in this regard wil l a lso be shaped, of course , by the dynamics of





The Pol i t ical Ec ono m y of State Rescal ing 2 0 5

EU as the cur ren t ly mos t advanced fo rm of mul t i l eve l s t a te fo rmat ionand/or mul t i l eve l governance .

Firs t , i t i s qu i t e c lear that the EU 's overal l econ om ic pol icy ha s be enreor ien ted in the d i rec t ion o f a Schumpete r ian compet i t ion s t ra tegyfrom an ear l ier per iod when i t was more sui ted to Atlant ic Fordism. Theor ig ins o f Eu ro pe an in tegra t ion can be foun d in pos twar r econs t ruc t iontha t p repared the g round fo r At lan t ic Ford i sm in Europe ( fo r de ta i l s , seevan der Pi jl 1984) . Th us , i n addi t io n to their in i t ia l po st wa r rol e in res t ru ctur ing i ron, s teel and coal in this context , the European communit iesa l so emphas ized the c rea t ion o f an in tegra ted marke t so tha t indus t r i a lenterpr ises could real ize opt imal economies of scale . This involved anessent ia l ly l iberal Ordnungspolitik to create a s ingle market and was animpor tan t supp lement to the pursu i t o f na t iona l Keynes ian pohc ies -especially as the Tr ea ty of R o m e left official res pons ibi li t y for emp lo yment pol icy a t the nat ional level . Indeed, as Sbragia notes , the EU's basiccons t i tu t i ona l f r am ew or k s t ruc tura l ly p r iv i l eges l ibe ra l ec on om ic s t ra teg ies : ' t he norm of economic l ibe ra l i za t ion , embedded in the Trea ty o f Ro me , was re in f orced and e la bor a te d in the S ing le Eu ro pe an Ac t andth e Tre aty of Maa str ich t ' (2000: 224) . Th us even wh en the EU, und er De lor s ' p re s ide ncy (1985-95) , be gan to deve lo p a mo re ac t ive emp loyment pol icy and to plan for a Social Europe and then at tempted to ins t itu t ional ize these twin responsibi l i t ies for the f i rs t t ime in the Maastr ichtTreaty (1991) , th is occurred in an inst i tu t ional context that was a l ready

biase d in fa vo ur of l ibe ral i sm an d in an ideolo gical c l i ma te that wa sdomina ted by neo l ibera l i sm ( see pp . 168-9) .

I t i s wo r t h no t i ng he re tha t the six imt ia l m em be r s o f th e E E C - asi t was th en cal led - ha d mo de s of gr ow th and mod es of reg ula t ion belonging to one or other of the regulated or coordinated var ie t ies of cap i ta l i sm and e i the r had one o r o ther fo rm of conserva t ive-corpora t iv i s twelfar e re gi me or, in I ta ly 's case , had a c l ientel is t Me di te rr an ea n welf areregime (cf . Hantrais 2000; Ruigrok and van Tulder 1996) . This suggeststha t the ins t i tu t iona l ized commitment to economic l ibe ra l i sm mightini t ia l ly have provided the basis for the integrat ion and consol idat ion of regulated capi ta l ism on a wider scale ra ther than serve as the means to

pus h th ro ug h a fa r- reach ing l ibe ra l p r og ra mm e. Th e s i tua t ion cha nge d ,how eve r, a s ne w m em be r s wi t h d i ffe rent mod es o f g r owt h , mo de s o f regu la t ion and wel fa re reg imes jo ined the European Communi ty. Th isin t roduced grea te r economic and soc ia l he te rogene i ty in to the Europeanec on om y an d helpe d to shif t th e ba la nc e of forces in a neo l ib er al di rect ion. I t has be en cor re spo ndi ngl y m o r e difficult to es tabl ish the condit ions fo r resca l ing s ta te p l ann in g f ro m the na t ion a l to the Eu r op e an leve lor to es tab l i sh Eur o-c orp ora t i s m (on Eur o-c orp ora t i s m, see Fa lkn er 1998an d Vo br ub a 1995; on i ts l imits , St re ec k 1995) . Like wis e, r a t he r th an



2 0 6 The Pol i t ical Eco nom y of State Rescal ing

seeing a rescal ing of the welfare s ta te upwards to the EU, social pol icywithin the Union largely takes the form of social regulation. For, asM a j o n e n o t e s :

[M]easures proposed by the Commission in the social field must becompatible with the 'economic constitution' of the Community, that is,with the principle of a liberal economic order. This requirement creates anideological climate quite unlike that which made possible the developmentof the welfare state in the Member States . .. The economic liberalismthat 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 onethat stresses the efficiency-improving aspects of the proposed measures.(1993; 156)

The se d i ffi cu lt ies have be en re in for ced th ro ug h the ma n n e r in whicht 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 c onver gen ce c r i t e r i a es tab l i shed unde r the Maa s t r i ch t Trea t y hav e made i tmo re difficult for m e m b e r s ta te s to br ea k out of th e neo l i ber al f ra mework, and the l imited EU budget prevents i t f rom f inancing a major exp ans ion of a Eur op ea n wel fa re reg ime . I nde ed , in ce r ta in respec t s , theE M U serv es as a ne w 'go ld s tan dar d ' , r equ i r ing confor mi ty to re la t ive lyr igid norms of economic and pol i t ical conduct favourable to a l iberal(m one y) c once p t io n of eco nom ic s tab i l ity and growth . In par t i cu la r ,compl iance wi th the Maas t r i ch t c r i t e r i a has requ i red pub l ic spendingcuts or constra ints , social secur i ty and welfare reforms, and more or lesss igni f i can t p r iv a t i z a t io n o f s t a t e -ow ned en t e rpr i ses and comme rc ia l i zat ion of publ ic services . None the les s , even in this cont ext , we ca n disce rna g rowing concern wi th ac t ive invo lvement in p romot ing compet i t iveness , inno va t i on and en te r pr i se in l ine wi th Schu mp et e r ia n perspec t iv es .Al th ou gh the ma in thrust of th is involv eme nt ac cords wel l wi th neo l ibera l s t ra tegy, i t i s non e th e le ss f l anked by neos ta t i s t and neo cor por a t i s ts t ra tegies , i l lus t ra ted by key features of EU technology pol ic ies andsocial pol icy respe ct ivel y (see pp. 261 -3 ) . A very inte res t ing de ve lo pm en tin this area is , of course , the resurgence of corporat ism in a new guise -social pacts or iented to wage res t ra int , social secur i ty reform, supply-s idecom pet i t ive ness an d genera l conf orm i ty to the log ic o f the new mon etary system (see Deppe et a l . 2000; Regini 2000; Grote and Schmit ter 1999; Rhodes 1998; see a lso chapter 6) .

Second, welfare and social pol icy was re ta ined as a nat ional com petence in the founding t reat ies of the EC, and pol icy-making at theEuropean leve l in these f i e lds has sys temat ica l ly l agged beh indmacroeconomic , indus t r i a l and technology pohc ies . Thus , as Kuhnle ,note s , ' [ t jhe re exis ts as of to da y no Eu r o p e a n social law on th e basis of




which individ ual c i t izens ca n cla im benef i ts f rom Brusse ls ; no dire ct taxat ion or social contr ibut ions to the EU which can f inance social welfare;and th er e har d ly ex i st s any wel fa r e bur eau cra cy in the E U ' ( Kuh nle1999: 6) . No net hel es s , the re is increasin g evide nce of a com ple x andcom pli cate d re or ie nta t i on of welfar e pol icy a t th e Eu r op ea n level . Thisinvo lves two apparen t ly con t rad ic to ry t endenc ies . On the one hand ,some wel fa r e po l ic ies ( such as equ a l pay, equa l oppor t un i t i es , po r t ab lewel fa re benef i t s , mi n i mu m s tanda rds fo r hea l th and secur i ty a t wo rk an drul es on w or ki ng hou rs ) ha ve be en gradua l ly res eate d to the EU level tosupplement the more t rad i t iona l na t iona l ly sca led wel fa re measures ; andso me s t ruc tura l po l ic ies have a l so been resea te d a t a E ur o pe a n leve l tofac i l i t ate indus t r i a l r es t ruc tur ing , com pen sa t e fo r une ven reg iona l deve lo p m e n t , s u p p o r t a g r i c u l t u r e a n d h e l p t o r e g e n e r a t e d e c l i n i ng c o m m u n it ies . On the other hand, the emergence of social pol icy a t the Europeanleve l t end s to assu me a wo rk fa re ra th er than a wel f a re o r ie n ta t ion . Th us' t he polit ical point of re fe re nc e [of such eco no mi c an d social policy init ia t ives] is not so much social in tegrat ion but ra ther the ins t rumental-izat i on of pol icy as a res our ce for co mpe t i t io n or ien te d s t r uct ura lch an ge ' (D ep pe et a l . 2000: 20) . In short , th er e is a gro win g mix of welf areand workfare s t ra tegies a t the European level ; but they are unif ied

around the concern to create the condi t ions for an effect ive s inglemarke t in pos t -Ford i s t r a ther than Ford i s t condi t ions .

One of the ear l ies t s igns of this reor ientat ion can be found in theE u r o p e a n C o m m i s s i o n ' s W h i t e P a p e r , Growth, Competitiveness, Employment (1993 ). This re vi ew ed a wi de ra ng e of fac tors aff ecting th ecompet i t iven ess o f th e Eu ro pe an eco no my and i ts capac i ty to gener a tegood jobs and sus ta inab le eco nom ic g row th ; and i t r e co mm en de d ane q u a l l y w i d e r a n g e o f t r a n s - E u r o p e a n m a c r o e c o n o m i c , e n v i r o n m e n t a l ,infras t ructural , technological , educat ional , vocat ional and social pol icyini tiat ive s th at mi gh t add res s - rh eto ric all y at least - the ch all eng es of th e co mi ng century. In the f ie l d of la bou r m a r k e t pol icy, for ex am pl e, th eCom mi ss ion ca l l ed fo r a b r oa d ' a dva nce d t ra in in g offens ive ' and o th er m e a s u r e s 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. T h i s r e o r i e n t a t i o n w a sta ke n fu r t he r a t the 1994 EU s um mi t in Es sen , wh en i t was f i nal lyrecognized tha t e ffec t ive employment po l ic ies conduc ted exc lus ive ly a tth e nat ion al level coul d no longe r be successfully m a n a ge d un de r th econdi t ions o f g loba l iza t ion and E ur op ea n in tegra t ion (Ho ffm an andHoffman 1997: 22) . The Trea ty o f Amste rdam f ina l ly embedded a com

mitment to fu l l employment as a 'ma t te r o f common concern ' fo r theE U , t ra nsl a te d this in t o th e goal of re ac hin g a 'h igh level of em pl oy me nt 'w i t h o u t u n d e r m i n i n g c o m p e t i t i v e n e s s a n d e s t a b l i s h ed a n E m p l o y m e n tCommit tee to d i scuss appropr ia te po l icy in th i s a rea and to moni to r

p rogress . In l ine wi th the EU penchan t fo r metagovernance ra ther than



2 08 The Pol i tical Eco nom y of State Rescal ing

di rec t top-down in te rven t ion , l iowever, t l i e Union ' s respons ib i l i ty in th i sarea is to co mp le me nt the act ivi t ies of m e m b e r s ta t es by dev elo pin g a' co ord ina ted s t ra tegy ' , to fo rmula te co mm on gu ide l ines , to es tab l i sh

be nc hm ar ks and 'bes t p rac t i ce ' an d to moni to r the pursu i t o f na t i ona lac t ion p lans fo r employment .

Examining the emerging pract ice in this area s ince 1999 to the t imeof wri t ing revea ls both the e xtent to which the work far i s t reo r ie nta t io nof social policy has penetrated to the EU level and also how far i t isl inked wi th the expans ion of the domain o f the ' economic ' in to a reas

p rev iou s ly rega rd ed as non -ec ono mic . O ne aspec t o f th is , a s no te d byD e p p e et al . (2000: 15- 16 ), is that, for th e first t im e, th e bre ad th of th eEU labour market guidel ines has forced the minis t r ies of economy,cul t ure , f inance, welf are an d la bo ur to pr es en t a joint plan a nd to re l a tethe se par ate pol ic ies to each othe r. This can be in te rp re te d a^t he extension of th e logic of com mod if i cat ion or, a t leas t , of capi ta l is t ec on om iccalculat ion into the wider society. Such pressures are a lso incremental ,

bui lding up ra tchet-fashion, wi th each successive cycle of nat ional em p loyment pac t s .

Third, a lmost by def ini t ion, European economic and social pol icy i l lust ra te the pos tna t iona l na tu re o f the emerg ing wel fa re reg imes . Beforecon sid er i ng the E U ' s role , how ev er , we sho uld note t hat i t i s i tsel f par tof a m o r e com plex inte rna t io nal iza t io n of ec on om ic and social policy.I ts pol ic ies are evolving within a br oa de r f r am ew or k of gro win g involv ement in agenda-se t t ing and po l icy-making by in te rna t iona l ins t i tu t ions ,s u p r a n a t i o n a l a p p a r a t u s e s , i n t e r g o v e r n m e n t a l o rg a n i z a t i o n s a n d f o r u m s ,t rans na t ion a l th ink- tank s , and t ransn a t ion a l in te res t g roups and socia lmo ve me nt s (cf . D ea c on 1996; on pol icy t ransf er, see Do lo wi tz and Ma rs h1996; Peck and Theodore 2001; and Stel la 2000) . I t i s important to recognize , wi th De ac on (1996 :45- 58) , tha t the re i s so me rea l d i s agr eem ent

am on g these d i ffe rent bod ies on po l icy re co mm end a t io ns ; bu t th i s shou ldno t be exa gger ate d, s ince th e bodi es a l i gned wit h th e 'W as hin gto n consensus ' have tended to be the most inf luent ia l in the internat ional izat ionof economic and social pol icy. Thus Deacon and Hulse (1997: 47) noteso me con ver gen ce be tw ee n EU and O E C D pol ic ies as the EU has d i scove red the adve rse impac t on comp et i t iven ess o f K W N S soc ia l po l icya n d t he O E C D ' s D i r e c t o r a t e o f E d u c a t i o n , E m p l o y m e n t , L a b o u r a ndSocial Affairs has c ome to rec ogn ize the eco no mi c benef i ts of ex pa nd edi n c o m e - s u p p o r t p r o g r a m m e s . T h i s d e v e l o p m e n t , m e d i a t e d t h r o u g h a n

increas ing ly dense w eb of pa ra l l e l pow er ne two rks , r e f lec t s th e inc rea sedformat ion of a t r ansna t iona l cap i ta l i s t c lass concerned to secure the condi t ions for capi ta l accumulat ion on a global scale . This is associated witha 'new const i tu t io nal ism ' (Gil l 1995, 2001) , that is, an a t t em pt to es tabl ish a new ar t iculat ion between the economic and the pol i t ical on a global




ra ther than merely a nat ional scale . But i t i s a lso associated, as notedabove , wi th a t t em pts to rea r t i cu l a te the re la t ion sh ip be tw ee n the economic and the ex t ra -economic condi t ions fo r cap i ta l accumula t ion in ag loba l iz ing , pos t -Ford i s t , knowledge-based economy.

The EU has a key role in this new const i tut ional se t t lement . Unsur pr is ingly, the ref ore , i t s s t il l em er gi ng cha ra cte r as a pol i t ical ar ena -e nt i tyis subject to pressures f rom wel l beyond i ts borders (especial ly f romthe USA); and i t i s a lso becoming involved in internat ional forums onvar ious sca les to res tab i l i ze the c ondi t i ons fo r ec on om ic g r ow th and s ta

bil i ty in the wa k e of th e crisis of th e pr im ac y of th e na ti on al scale in th e p o s t w a r ' e m b e d d e d l i b e r a l ' i n t e r n a t i o n a l s e t t l e m e n t . A t t h e s a m e t i m e ,the t enden t ia l Eu ro pe an iza t i on o f eco nom ic and soc ia l po l icy i s a l soclosely l inked, in accordance with the pr inciple of subsidiar i ty, to theincreased ro le o f subn a t io na l and c ross -na t iona l agenc ies , t e r r i to r ia land /or func t iona l in fo rm, in i t s fo r mul a t i on and imp lem en ta t ion . In th i sregard the re i s an in te res t ing sca la r d iv i s ion o f l abour be tween the EU,na t ion a l s t a tes and subna t ion a l t i e r s o f gov er nm ent . For, wh er ea s nat ional s ta tes re ta in s ignif icant powers in the t radi t ional spheres of thesov ere ign s ta te (mil i tary, pol ic e) a nd in we lfa re pol icy (w he re the l im ite dEU budget blocks a major role in general social redis t r ibut ion even i f i tacqu i red th i s competence) , the EU has acqu i red inc reas ing in f luenceover economic pol icy.

Fourth , a l though the EU has never acquired the character is t ics of asupranat ional sovereign s ta te , or even a confederat ion of s ta tes , and socannot be said to have undergone a shif t f rom supranat ional government to suprana t iona l governance , i t has deve loped an inc reas ing ly widea n d d e e p a r r a y o f b o t h 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 c a p a c i t i e s t h a ten abl e i t to inf luence eco no mi c an d social pol i cy in mo st ar eas an d onmost scales . Four specif ic features of the EU give i t special inf luencehere: the role of jud ges an d l i t igat ion (which e nabl es the EU to ove rr idenat ional laws and to 'const i tut ional ize ' the t reat ies) ; i t s locat ion at thehea r t of inf or ma t i on f lows (w hic h gives i t a re l a t iv e mo no po ly in organizat ional in te l l igence) ; i t s f iscal pover ty (which l imits i t s vulnerabi l i tyto c la ims on publ ic spending and thereby ci rcumscribes the pol i t icalagenda ; see Sbra g ia 2000) ; and the inc re as ing adopt ion of Eu r op e an pro

jects and guidel ines that ent i t le the EU to moni tor nat ional and regionals ta te ac t iv i t i e s and par tnersh ips ac ross an inc reas ing ly in te rconnec tedset of policy areas - thereby giving it a means to steer national policyand endow i t wi th greater coherence (Deppe et a l . 2000; Majone 1993;Wallace 2000) . Th e dis t inct ive for m of me ta go ve rn an ce in th e E U , whichinval id ates a t te mp ts to ju dg e i ts role in term s of t ra di t ion al cr i ter ia associated with the sovereign nat ional s ta te , i s wel l expressed by Sbragia asfollows:



2 1 0 The Pol i tical Eco nom y of State Rescal ing

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

Do the t rends and counte r t rends cons idered above imply the e ros ionof the nat ional s ta te? My short answer, based both on theoret ical

The European Union governs in the sense of 'steering' because it isstructurally designed [to keep] certain questions off the table whileinsisting that others be kept on the table. The use of treaties rather than aconstitution, the institutionalization of the norm of economic liberalization in those treaties, the creation of a powerful court, its unusualaccess to information, and the lack of public funds all help the Union steer.(2000: 236)

Like wis e , To mm el , hav ing no t ed the key ro le o f reg iona l and loca lau thor i t i e s and var ious pub l ic -pr iva te par tnersh ips in per forming gov

er nm en ta l ro les in a comp lex web of coo per a t i ve ne t wo rk s o rgan iz ed in

tang led (o r, more paradoxica l ly ye t , deh ie ra rch ized) h ie ra rch ies , sugges t stha t the E ur op e of reg ions i s bec omi ng

an indispensable element of an emergent, new open and flexible system,in which the EC - or the Union as a whole - will stimulate competitiveand cooperative behaviour and performance of decentralized - public and

private - agents and institutions, by using open, market-oriented steeringmechanisms and by institutionalizing more complex procedures indecision-making and consensus-building. (Tommel 1998: 75).

In short , me ta st ee r i ng is on e of th e most s ignif icant areas in whi ch th eEU is involved in res t ructur ing, reor ient ing and rescal ing welfare . Thevery fact that these act ivi t ies do not conform to the t radi t ional not ion of th e exe rci se of st ate po we r has ma d e it hard to see their significancefor the overal l dynamic of s ta te format ion at the European level . Butthey have, nonetheless, played a key role in the gradual rise of an EUw 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 f u l l e m p l o y m e n t v i a e n h a n c i n g t h ef lexibi l i ty and employabi l i ty of workers in the interes ts of greater corn-

pet i t iveness and enterpr ise in the t ransi t ion to post-Fordism. This s t i l lleaves sc ope for differ ent nat i onal or re gional in te rp re ta t io ns of f lexi

b i l i ty and employab i l i ty - r ang ing f rom the neo l ibera l mode l p romoted b y T h a t c h e r i s m a n d r e t a i n e d u n d e r N e w L a b o u r t h r o u g h t h e n e o s t a t i s tmode l found in France , to more neocorpora t i s t pa t t e rns assoc ia ted wi tht h e S c a n d i n a v i a n a n d o t h e r R h e n i s h e c o n o m i e s . T h e E u r o p e a n E m p l o yment Stra tegy is a par t icular ly good example of this and, as Leibfr iedand P ie r son no te , i t has become a key e lement in 'Europe ' s emerg ingmultit iered system of social policy' (2000: 288).



The Pol i tical Ec ono m y of State Rescal ing 2 1 1

cons ide ra t ions a nd an analysi s o f the Eu ro pe an Un ion , i s ' n o ' . Th erea r t i cula t ion of t h e s ta t e involves nei th er a gr adu al wi ther ing away of the na t iona l s t a te nor s imple d i sp lacement based on 'more marke t , l e sss ta te ' . Ins t ead , i t i s th e K W N S th a t has bee n e ro ded . But the e ros i onof one form of nat ional s ta te should not be mistaken for i ts generalre t rea t . On th e cont rary , as th e f ront iers of th e K W N S (esp ecial lythose which had been ex tended dur ing c r i s i s management ) a re ro l l ed

back, the boundaries of the nat ional s ta te are rol l ing forward ino ther respec t s and /o r o ther fo rms of po l i t ic s a re becom ing mo r esignificant.

Thus , desp i te the th ree genera l t r ends no ted above (dena t iona l iza t ion ,des ta t i za t ion and in te rna t ion a l iz a t ion ) , the na t ion a l s t a te re ta ins a keyrole . This sugges t ion can be c lar i f ied th ro ug h th e dis t inct ion be tw ee n

par t icul ar s ta te funct i ons and th e s ta te ' s ge ner ic (or 'g lo bal ' ) funct ion.Poulantzas (1973) ident i f ied three par t icular se ts of act ivi t ies : techno-economic func t ions regard ing the fo rces and re la t ions o f p roduc t ion ;

pol i t ical funct ions ( for example, taxat ion, pol ic ing, defence, legis la t ion,off ic ia l audi t ) concerned with the sel f -maintenance of the s ta te ' s coremil i tary, pol ic e and admi nis t ra t iv e act ivi t ies ; and ideolo gical funct ions(for example, educat ion, patr iot ic and nat ional r i tuals , mass communica

tio n). I t is no t ne ce ss ar y to acce pt this classification of pa rt ic ul ar funct ions to agree wit h th e ge ne ra l poi nt . Pou lan tza s a lso def ined the gen er i c(or 'g lobal ' ) funct ion of the capi ta l is t type of s ta te as ' secur ing the socialcohe sion of a society divid ed into c lass es ' . We sho uld add a fu r t he r c lau seto this s ta tement of the gener ic funct ion, of course , namely, 'and r iven byother social cleavages, divisions and conflicts ' (see chapter 1). In theseterm s, wh at we are wit nes sin g is the er osi on of ke y 'pa r t i cul ar ' funct ionsassoc ia ted wi th th e KW N S s ta te p ro jec t , and the i r r e p la ce me nt by key'par t i cu la r ' func t ions l in ked to an eme rg i ng pos t na t i ona l compe t i t ion

s ta te tha t i s purs u ing Sch um pet e r ia n wor kfa re func t ions . Th is reorga n izat ion does not end the nat ional s ta te ' s key role in exercis ing i ts gener ic

pol i t ical funct ion. Fo r the national state remains the primary site for thiscrucial generic function and , ind eed , na t i ona l s t a te man ag er s j ea lous lyguard this role even as they concede more specific functions. In this sense'dena t iona l iza t ion ' shou ld be seen as a pa r t i a l and uneven process tha tleaves a re ar t i cu la te d 'na t io nal s ta te ' s t i ll exerci s ing th e gen er ic funct ionof th e cap itah st typ e of sta te. I t cert ainl y does n ot imp ly tha t a fullyf ledge d ' s upr ana t io na l ' s t a te has a l ready em er ge d to mai n ta i n ins t i tu

t ional in tegrat ion and social cohesion in an extended, c lass-dividedsuprana t iona l soc ia l fo rmat ion .

Thus the national state is st i l l the most significant site of struggleamong compet ing g loba l , t r i ad ic , suprana t iona l , na t iona l , r eg iona l andlocal forces . This is the point behind the hol lowing out metaphor, which



2 1 2 The Political Ec on om y of State Resc aling

i s in ten t i ona l ly remi n isce n t of ' ho l low cor por a t i ons ' - tha t i s, t r an sna -t iona l s headquar te red in one count ry whose opera t ions a re mos t ly

pursued e l sewhere . The ho l low corpora t ion none the less re ta ins i t s corecommand, con t ro l , communica t ion and in te l l igence func t ions wi th in thehome economy even as i t t r ans fe rs va r ious p roduc t ion ac t iv i t i e s abroad .By analogy, the 'hol low sta te ' metaphor indicates two t rends; f i rs t , thatthe na t io na l s t a te re ta ins many of i ts ' h ea dqu ar te r s ' (o r c ruc ia l po l i t i ca l )func t ions - inc lud ing the t rapp ings o f cen t ra l execu t ive au thor i ty andnat ional sovereignty as wel l as the discourses that susta in them and theoveral l responsibi l i ty for maintaining social cohesion; and, second, thati ts capaci t ies to t ransla te this authori ty and sovereignty into effect ive

cont ro l a re bec omi ng hmi ted by a complex d i sp lace men t o f pow ersupw ard s , dow nwa rds , an d ou t war ds . Th is does no t m e an tha t the na t ion a ls ta t e loses a ll im po rt an ce ; far f ro m i t. I nde ed, i t re ma in s cruc ial as aninst i tu t ional s i te and discurs ive f ramework for pol i t ical s t ruggles; and i tev en ke e ps mu ch of i ts sov er eig nty - alb eit pr im ar il y as a jur idi cal fictionreproduced th rough mutua l recogni t ion in the in te rna t iona l po l i t i ca lcommunity. But there is s t i l l some loss of nat ional s ta tes ' formal legalsovere ign ty as ru le - and /or dec i s ion-making powers a re t rans fe r redupwards to suprana t iona l bod ies and the resu l t ing ru les and dec i s ions

come to bind nat ional s ta tes . I t has a cont inuing role in managing the polit ical l inkages across different terri torial scales, and its legitimacydepends precisely on doing so in the perceived interes ts of i t s social base(Kazanc ig i l 1993; 128) . Mo re ov er , jus t a s mul t ina t iona l f i rms ' co mm an d,con t ro l , communica t ion and in te l l igence func t ions a re con t inua l ly t ransf o r m e d b y t h e d e v e l o p m e n t o f 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 ntechnolog ies and new forms of ne twork ing , ba rga in ing and negot ia t ion ,so, too, as new possibi l i t ies emerge, are there changes in how 'hol lowedout ' s t a tes exerc i se and pro jec t the i r power.

Z iebura (1992) no tes the con t inued impor tance o f the gener ic pol i t ical funct ion of the nat ional s ta te . He argues that the tendenciestowards g loba l iza t ion and t ransna t iona l reg iona l iza t ion p rovoke a coun-te r tendency in a popula r sea rch fo r t r ansparency, democra t ic accountabi l i ty and proximity. He adds that the desire for local , regional or (a tmo st ) nat ion al ident i t y ref lects pow erf ul dr ive s , espec ial ly in sma l lna t iona l s t a tes , to compensa te fo r th rea t s f rom powerfu l ne ighbour ingstates and/or the r ise of supranat ional ins t i tu t ions that lack any realdemocra t ic accountab i lhy. Na t iona l s t a tes a re genera l ly s t i l l be t t e r

p la ced th an their res pec t iv e sub -na t io nal s ta te s to dea l wi t h social conf l i c t s . In add i t ion , wherea s sup ran a t i ona l bod ies see m pre occ upi edwi th the in te rna t iona l iza t ion o f cap i ta l and promot ing the s t ruc tura lcompet i t iveness o f macroreg ions and the i r cons t i tuen t na t iona l andreg ion al ec ono mi es , th ey ar e of te n less int ere s te d in social confl ic ts and



PBSfi

The Pol i t ical Ec ono m y of State Rescal ing 2 1 3


Even adopt ing an economic v iewpoin t tha t pa id due a t t en t ion to thesoc ial emt i edde dnes s a nd soc ia l r egu la r i za t i on o f cap i ta l accu mula t ion ,i t would be wrong to explain these general t rends in terms of economicchang es. For they mu st f i rs t be t ra nsla ted thr ou gh s t ruggles int o po

l i t i ca l p rob lems fo r s t a te ac t ion and the i r so lu t ion i s then media tedthrough the specif ic , s t ructural ly inscr ibed, s t ra tegical ly select ive natureof the s ta te . Likewise, f rom a more s ta te-centr ic viewpoint , i t would bewrong to suggest that these t rends are a t t r ibutable solely to (pol i t ical lymedia ted) economic changes . For the re cou ld a l so be sui generis

pol i t ical reasons prompting s ta te actors and other pol i t ical forces toengage in ins t i tu t ional redesign and s t ra tegic reor ientat ion (cf . Jessop1994b) .

There are two main conclusions f rom this discussion. Firs t , regarding

the res cal i ng of acc um ula t io n, reg ula t io n an d the s ta t e , we are see ing areshaping of the hierarchy of regions on all spatial scales from worldreg ions ( t r i ads ) th rough in te rna t iona l reg ions and na t ion-s ta tes tocross-border or vi r tual regions and on to int ras ta te regions and local i t ies(Taylor 1991: 185) . Transnat ional f i rms and banks are major players in

redi s t r i but i ve pol ic ies . These conc ern s ar e s t il l mai nly confined withi nnat ional f rameworks and i t i s nat ional s ta tes that have the potent ia lf is cal bas e to ch an ge t he m signif icant ly in this regar d. Ind eed , wi th ou tcen t ra l government suppor t , i t i s ha rd fo r mos t loca l o r reg iona ls ta tes to ach ieve much here . Th is exp la ins the na t iona l s t a te ' s d i l emmatha t (a ) i t mus t become ac t ive ly engaged in managing the p rocessof int ern at i ona l iz at i on and (b) i t i s th e onl y pol i t ical in s t an ce withmuc h cha nce o f ha l t ing a g rowi ng d ivergence b e tw een g loba l ma rk e tdynami cs an d condi t ions fo r ins t i tu t io na l in t egr a t i on and soc ia lc o h e s i o n .

In shor t , the re remains a cen t ra l po l i t i ca l ro le fo r the na t iona l s t a te .But this role is redef ined because of the more general rear t iculat ion of the local , regiona l , nat ion al an d su pr ana t io nal levels of ec on om ic and

pol i t ical organizat ion. Unless or unt i l supranat ional pol i t ical organizat ion acqu i res no t on ly governmenta l powers bu t a l so some measure o f

pop ula r-d emo cra t ic l egi t imacy, the na t i on a l s t a te wi l l r e ma in a ke y po l i t ica l f ac to r as the h ighe s t ins tan ce o f fo rm al de moc ra t ic po l i t i ca l accoun tabili ty. How it fulfi ls this role does not depend only on the changingins ti t uti ona l ma tr ix a nd th e shifts in th e bala nce o f forces, as globali zat ion , t r i ad iz a t ion , reg i ona l i za t i on and th e resur gen ce o f loca l gov er nan ce

p roceed apace .



21 4 The Political Economy of State Rescaling

Box 5.2 Rescalincj and stota intervention

1. hstabJishing new scales of activity (and dismantling others),

l h c i c b \ r c - c a l i n i . ' . ii id r e. i t l i c u l .i l i i i ' . ; \ . ' n i u u s s | , ik- p o w c i s .

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 cicilitiLi pos

- i b i l i i ) f o - I i c i n - c K c - i n d m h c r a d o i s l o - i i m i p s c a k s ' .

2. h MLMUiiii' 111 c o m p l L i i i c i i l a i \ Ini m s ol Shifhlt'iipi'liiik a n d HIIK-I

forms of place-based competi t ion in at tempt to f ix mobile

c a p i i . i l n i l l K i r ow n e c n n o m i v. s p a c e - a n i . ! 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 ihei i

own place-bound capi ta ls .

^ I ' l o n i n i i n " u n e v e n i i c v e l u p m e n t t l i r o i i g h p o l i c i e s l o r i nU -r

u i i i a i i . i n l e i r e i . i o n a l a n d m t , . ' r n a f o n a l i - t i n i p e l i t i o n ai ivl

s c i -k n u; l o c o m p e n s a t e l o r t hi s .

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 ci i i i U-

i i ic l i id in>j . i lecci i t ra l i / . i l i o i i a i u ! e i o s s - b o i d e i l e a i o i i ' oi i ia

l i o ' i . r e L<ioi i , i l b lo c lo 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 - lo i

in ter- t r iad negot ia t ion .

Second, regarding the cont inued pr imacy of the nat ional s ta te , the

ex te nd ed rep ro du ct io n of capi tal is m and social classes in the erstwhil e

ec on om ic space of Atl an tic Ford ism is no lon ger l inke d poli t ically to th eKWNS with i ts local relays, corporatist bias and international supports.

I t has been re located in a more in ternat ional ized and local ized SWPR.

Th e la t ter ' s par t i cular funct ions ha ve been dispersed amo ng severa l

insti tutional levels of terri torial organization and are shared with an

this reshaping process, but , as noted above, they are often aided and

ab et te d in this regard by nat ion al states. As the se comp lex a nd con tra

dictory processes unfold, however, states must also tackle the many

dome st ic repe rcuss ions of g lobal res t ruct ur ing ( for a su mma ry of the

cha ngi ng state activit ies in re gar d to resca ling, see box 5.2). Thi s re qui re s

the reposit ioning of states in the hierarchy of scales ( that is , the

rescaling of the state, poli t ics and policy) as well as the restructuring and

strategic reorientation of state agencies at any given scale. This is also

associated with al l iance strategies among states on different scales to

provide the basis for economic and poli t ical survival as the imperatives

of structural competi t iveness make themselves fel t . The nature of these

al l iances wi l l vary wi th the posi t ion of the economies concerned in the

in te rna t iona l h i e ra rchy.



The Pol i t ical Eco nom y of State Rescal ing 2 1 5

ex te nd ed ra nge of funct ional ly re levant ( an d pol i t ical ly and ideologi cal lydef ined) s takeholders . Ye t the gener ic po l i t i ca l func t ion o f main ta in ingsocial cohesion is st i l l exercised at the level of the national state withinth i s res t ruc tur ed an d reo r ie n te d po l i ti ca l ense mble . Henc e , th e typ ica lfeatu res a nd gener i c funct i ons of this nat ion al s ta te are qu i te differentfro m those of th e K W N S , an d th e s t ra tegic conte xt in whi ch i t op er at eshas a lso been s ignif icant ly t ransformed.



From Mixed Economy toMetagovernance

This chap te r bu i lds on the p reced ing a rguments about des ta t i za t ion toexplore responses to the cr is is of the mixed economy, which had playeda ke y rol e in the At la nt i c For dis t mo de o f reg ula t io n. I t a lso bui lds onthe ear l i er discussion of exc han ge, hi er ar ch y an d ne tw or ks as form s of

gov er na nc e an d suggests that thei r re la t ive weights in capi ta l is t socialfo rm at ion s ha ve cha nge d in tw o respects . Firs t , in th e capi ta l is t ec on om ynarrowly conceived, whi le hierarchical forms of organizat ion have lostweigh t , ne twork fo rms have become more s ign i f i can t compared to theheyd ay of At l an t ic Ford i sm. This does no t m ea n tha t ne t wo rk s wereabsent or unimportant in Fordism, of course , or that they could not have

p layed impor tan t ro les in the per iod before Ford i sm. And , second ,regarding the condi t ions for capi ta l accumulat ion in i ts in tegral or inclusive sens e, ne tw or ks have also acq uir ed a grea ter role in secu r ing the

expanding range of ex t ra -economic condi t ions cen t ra l to con t inu ingcapi ta l accumulat ion and, s ignif icant ly, in correct ing for market fa i lures .

This double shift clearly affects the state 's twin roles in securing thecondi t ions fo r the p rof i t ab le acc umu la t ion o f p r i va t e cap i ta l and repr oduc ing la bo ur -p ow er as a f ic t i t ious com mod ity . This is ref lected in area r t i cul at i on of th e s ta t e ' s role in govern ing capi ta l acc umu lat ion andi ts more general role in secur ing the condi t ions for social cohesion withinthe wider social format ion. We can descr ibe this rear t iculat ion in termsof a t re nd and a co un te r t re nd (see chapt er 5) . Th e fo rm er is assoc iated

wi th th e increas ing inab i l i t y of the K W N S , as the cr ises in/of At la nt i cFordism intensif ied, to intervene successful ly f rom above and/or in concer ta t ion with i ts social par tners in order to correct for market fa i lures .This lent credence to the neol iberal cal l for 'more market , less s ta te ' anda mo re ge ne ra l beUef tha t the rede sig n of ma r ke t ins t i tu t ion s was a be t t er



F ro m M i x e d E c o no m y t o M e t a g o v e r n a n c e 2 1 7

1. The Material Bases of Governance Mechanisms

We have a l ready seen in ea r l i e r chap te rs tha t marke t s , h ie ra rch ies (espec ia l ly bureaucra t i ca l ly o rgan ized f i rms and top-down impera t ive coord ina t ion by the s ta te ) and ne twork ing (bo th fo rmal and in formal ) a re thethree pr imary poles around which economic, pol i t ical and social governa nc e ar e org ani zed in social for mat ion s ma rk ed by high levels of econo mi c, pol i t ical and social complexi ty. This doe s no t ex cl ud e a se co nd ar yro le fo r co mm uni ty (o r the so l ida r i t i e s o f ' im agi ned com mun i t i es ' ) insup ple me nt i ng these fo rm s of gove rna nce an d / or in o rgan iz i ng soc ia lre l a t i ons in the li f eworld . Ind eed , whi le ma rk e t s , h ie ra r ch ies an d ne two rk s ma y of t en be u nd er mi ne d by th e surv iva l o f the se so l idar i t i e s , the ycan a l so der ive add i t iona l su rp lus o r l everage in under tak ing complexcoord ina t ion f rom be ing embedded in such soc ia l r e la t ions . For themoment , however, I ignore i s sues o f in te rpersona l re la t ions and soc ia lem be dd in g to focu s on the s ignif icance of ma rk et s , h ie rar chi es and networks in the pol i t ical economy of capi ta l ism.

I t i s surely no accident that references to markets , h ierarchies and networ ks occu r so sys temat ica l ly in d i scuss ions o f co n t em po ra ry cap i ta l is t

res pons e to mark e t fa i lu re than inc reas ing s ta te in te r ven t ion . Th os e p res id i ng over neo l ibe ra l pol icy ad jus tm ents a nd neo l ibera l r e g i me sh if tsdiscovered sooner or la ter, however, not only that famil iar forms of ma rk et fa i lure be ga n to rea ss er t the ms elv es bu t a lso th at yet other for msof mar ke t fa i lu re be ca me ev id en t wi th the p r im acy of o ther con t rad ict ions in the emerg ing pos t -Ford i s t accumula t ion reg ime . Th is p rompteda wide range of social forces to search for a l ternat ives to market andstate a l ike in the coordinat ion of increasingly complex societ ies . Thissearch process generated a widespread turn to old and new forms of governance wi thou t government - a tu rn tha t has been encapsu la ted in thenow famil iar c la im that there has been a general ized shif t f rom government to governance over the las t two decades . However, as I noted inthe p reced ing chap te r, th i s genera l t r end has been counte red by ano ther t rend that a lso complements i t . This is the increased sal ience of the s ta tein o rgan iz ing the condi t ions fo r se l f -o rgan iza t ion so tha t i t can compensa te fo r p lann ing and marke t fa i lu res a l ike in an inc reas ing ly ne tworkedsociety. Or, to rephrase i t in l ine with the tendent ia l shif t f rom governme nt to gover nanc e , the re has been a t end en t i a l sh i ft f ro m go ve rn me ntto metagovernance . Th is chap te r i s main ly concerned to e labora te th i sapparen t ly paradoxica l deve lopment and to i l lus t ra te i t f rom the evo lu

t ion of the KWNS. But f i rs t i t develops the categories for the s tudy of gov ern anc e tha t we re in t rod uced in cha p te r 1 .



21 8 F rom M ix ed Economy to Me tagove rnanc e

societ ies . This is evident , for example, in the recurrent a t tempts tod i s t ingu ish var ian t s o f cap i ta l i sm th rough concep ts such as uncoord ina ted l ibe ra l mar lce t cap i ta l i sm; the deve lopmenta l s t a te and s ta te - led ,d i r ig i s te , o r governed cap i ta l i sm; and corpora t i sm, coord ina ted cap i ta lism or the negot ia ted economy. Likewise, as we have seen in chapter 2 , many s tudents of welfare regimes dis t inguish between l iberal , socialdem ocr a t i c and conserv a t ive-co rpora t i s t r eg imes . Theor i s t s o f pub l icadmin is t ra t ion and po l icy-making tend in tu rn to d i s t ingu ish marke t ,

bureaucra t i c and par t i c ipa tory modes o f po l icy-making and de l ive ry. There cur ren ce o f such t r op es cou ld be in te r pre ted s imply in t e r ms of anin te l l ec tua l res idue o f the Enl igh tenment concep tua l t r ip le t o f marke t ,sta te an d civil society, an d it is ce rt ai nl y in te re st in g ho w far this tr i o of concepts has t ravel led in organizing research on Asian societ ies wherei ts re levance is by no means sel f -evident .^ But one might a lso explaintheir recurrence in terms of cer ta in features of the organizat ion of capitalist social formations. If this is so, then we should also ask why their re la t ive wei ght s var y acros s types of capi t a l ism a nd over t ime . Do e s th eovera l l ma t r ix o f the cap i ta l is t mo de of p r od uc t io n pr ov i de a par t i a la n s w e r t o b o t h p r o b l e m s ?

Market exchange and liberalism

Liber a l i sm emph as i zes the ro le of ma rk e t exc hang e as a coor d ina t io nme cha nis m. Economica l ly, l ibe ra l i sm endorse s the expa ns io n of them a r k e t e c o n o m y t h r o u g h t h e g e n e r a l i z a t i o n o f t h e c o m m o d i t y f o r m t oa l l f ac to rs o f p roduc t ion ( inc lud ing labour-power and knowledge) andthe s prea d ing of fo rmal ly f ree , mon e t i zed ex chan ge to as ma ny sph ere sof social re la t ions as possible . Poht ical ly, i t impl ies that col lect ivedecis ion-making should involve: (1) a const i tut ional s ta te with l imitedsub sta nt i ve pow ers of ec on om ic an d social in t erv ent ion ; and (2) acommitment to maximiz ing the fo rmal f reedom of con t rac t ing par t i esin the economy and the subs tan t ive f reedom of l ega l ly recognizedsubjects in the publ ic sphere . The la t ter sphere is based in turn onsp on ta ne ou s f r ee do m of associat ion of indiv idual s to pu rs ue any socialact ivi t ies that are not forbidden by const i tut ional ly val id laws. Ideological ly, l iber al is m claims th at ec on om ic , pol i t ical a nd social re la t i ons ar e

bes t or ga ni ze d th ro ug h the form al ly f ree^ cho ice s of form al ly f ree an dra t ion a l ac to rs wh o seek to ad va nc e the i r ow n ma te r i a l o r idea l in te re s t sin an ins t i tu t i ona l f r am ew or k tha t , by acc i den t o r des ign , max imi zes thescope for formal ly f ree choice. These three pr inciples may wel l confl ic tover the scope of anar ch ic mar ke t re la t ions , col lect ive dec i s ion-m akingand spontaneous sel f -organizat ion, as wel l as over the formal andsubstant ive f reedoms avai lable to economic, legal and civi l subjects . As





2 2 0 F r o m M i x e d E c o n o m y t o M e t a g o v e r n a n c e

members of c ivi l society once the condi t ions for social order have beene s t a b l i s h e d .

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 li s m m a y a l s o e m e r g e ' s p o n t a n e o u s l y 'on th e basis of fou r ot he r featu res of capitalist social rela tio ns. First ,g rowing soc ia l i za t ion o f th e fo rces o f p ro duc t ion , desp i te c on t in ued

pr i vat e ow ne rs hi p of th e me an s of pr od uc t i on , suggests th e need for exante co l labora t ion among producer g roups to l imi t marke t anarchy,whe the r th rou gh to p- do wn p lan n ing and / or va r ious fo rms of self-o rgan i za t io n . Secon d , the re a re the s t ra teg ic d i l emm as pos ed by theshar ed in te res t s o f p r odu cer s ( inc lud ing wa ge ea r ner s ) in maximi z ingto ta l r evenues th rough coopera t ion and the i r d iv ided and po ten t ia l lycon i l i c tua l in te res t s over how these revenues a re d i s t r ibu ted . Var iousnon-marke t governance mechanisms may have a ro le here he lp ing to ba lan ce co ope ra t i on and conf li c t. Th i rd , the re a r e con t rad ic t ions an dconf l i c t s posed by the mutua l dependence o f the ins t i tu t iona l ly separa teeconomic and pol i t ical systems. This leads to different logics of economicand polit ical action at the same time as i t generates a need to consult onthe ec on om ic impact of s ta te pol ic ie s and/or the pol i t ical rep erc uss ion sof p r iv a te econo mi c dec i s io n-maki ng . An d , four th , the re a re p r ob l em sge ne ra te d by th e na tu r e of c ivil socie ty or th e l i few orld as a sp he re of

pa r t i cu la r in te res t s op po se d to the s ta te ' s supp ose d em bo di me nt o f un iversal in teres ts . This indicates the need for some inst i tu t ional means of mediat ing the par t icular and universal and, s ince this is impossible in theabst ract , for som e heg em on ic def ini t ion of th e 'ge ner al in t ere s t ' (on th ealways imperfect , s t ra tegical ly select ive nature of such reconci l ia t ions ,see Jessop 1990b) .

Th is suggests th at , i f l ibera l ism can be in te rp re te d as a m o r e or less' s pon tan eou s ph i los oph y ' roo te d in cap i ta l i s t soc ia l r e la t ions , on e shoulda l so recognize tha t i t i s p rone to ' spon taneous combus t ion ' due to t ensions inherent in these same rela t ions . This was noted in Polanyi ' s (1944)cr i t ique of la te nineteenth-century l iberal ism, which argued that , inresponse to cr is is- tendencies in la issez-fai re capi ta l ism, many socialfo rces s t rugg led to re - emb ed and re - regu la te the ma rk e t . Th e even tua lcompromise so lu t ion was a market economy embedded in and sus ta ined

by a market society. The same point appl ies to neol iberal capi ta l ism.Th us , af ter th e effor ts of ' ro l l -back neol iber al is m' to f ree th e neo l ib era lma rk e t eco no my f rom it s va r iou s corpo ra t i s t and s ta t i s t imp edi men ts ,a t t empts a re now be ing made to secure i t s medium- te rm v iab i l i ty byembedding i t in a neol iberal market society (cf . Peck and Tickel l 2002) .This invo lves measures to d i sp lace o r de fe r con t rad ic t ions and conf l i c t s beyond the spat io- temporal hor izons of a given regime as wel l as sup p le men ta r y me as ur es to f l a nk , sup por t and sus ta in the con t i nue d domina nc e of th e neo l ib era l project wi t hin these hor iz ons (Jess op 2002c) .



From M ix ed Econom y to Me tagove rnanc e 221

T h e 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

This l ine of argument should not be res t r ic ted to l iberal ism and neol ibera l i sm. The two o ther modes o f governance typ ica l o f modern soc ia lfo rma t io ns are a lso deeply ro ot ed in the eco no mi c, pol i t ical an d socialo rgan iza t io n o f cap i ta l i sm. A n d they a re a l so con t r ad ic to ry and tens i on-r idden. Let us now br ief ly consider corporat ism as an economic and

pol i t ical expression within capi ta l ism of the more general pat tern of he te ra rch ic governance ( see p . 52 and be low) . Corpora t i sm i s a fo rm of func t iona l represen ta t ion tha t invo lves an in te rconnec ted sys tem of represen ta t ion , po l icy fo rmat ion and po l icy implementa t ion based on theal leged (social ly def ined) fun ct ion in the divis ion of lab our of th e var io usforces involved. This def ini t ion f ixes the gener ic features of corporat ism.I t ign ore s the specif ic i ty of par t ic ula r ins t ance s tha t der i ves f ro m th e secondary fea tu res o f corpora t i sm in d i ffe ren t c i rcumstances . These fea tu resinclude i ts ideological jus t i f icat ion, i t s pol i t ical legi t imat ion, i t s funct ional bases an d precise or gani zat i onal for ms of re pr es en ta t i on, th e var i ouslevels a t whic h corp orat is t s t r uctu res are organ ize d, th e actu al scope, pur

poses and m od e of po l icy-making , the par t i cu la r fo rms of im ple me nt at io n an d th e pla ce ( if any ) of co rp or at is m in th e wi de r conf igur at io n of economic, pol i t ical and social orders .

C o r p o r a t i s m f i r s t e m e rg e d i n m o d e r n E u r o p e a s a r e a c t i o n a r y a n dUtopian pol i t i co- ideo log ica l c r i t ique o f l ibe ra l cap i ta l i sm wi th s t rongorgan ic i st over tones . Th e seco nd ma in vers ion of cor por a t i s m was l ink edto 'o rgan ized cap i ta l i sm ' in the l a te n ine teen th and ea r ly twent ie thcentur ies . This vers ion was not opposed to capi ta l ism as such (which wasno w con so l ida ted and had be gu n to de ve l op mono pol i s t i c and imper i a li s t i c t endenc ies ) , bu t was more concerned about the revo lu t ionary th rea trepresen ted by organ ized labour. These two vers ions p layed a major ro lein the emergence o f conserva t ive-corpora t i s t we l fa re reg imes ( seechap te r 2 ) . A th i rd phase o f corpora t i sm saw the emergence o f t r ipa r-t ism in the context of postwar Atlant ic Fordism and i ts associatedK W N S s . E m e rg i n g d u r i n g p o s t w a r r e c o n s t r u c t i o n i n E u r o p e a s a n a l t e rnat ive to fascism and to l iberal capi ta l ism, i t was supported by Chris t iandem ocr a t s and ' O ne Nat ion ' Conser va t ives as wel l a s by socia l de mo crats . I t was revived again in some Atlant ic Fordis t economies in the 1960sand 1970s in the hope of modera t ing emerg ing s tagf la t ionary t endenc ies( see chap te r 2 ) . The four th var ian t o f corpora t i sm became prominen t inthe 1980s and 1990s and is l ikely to expand further in the coming decade.I t i s less of te n expl ic i t ly discus sed in corpo rat is t te rm s ( in pa r t du e to th ela t ter ' s neg at i ve ass oci at i on wi th th e cr ises of the 1970s an d wi th t ra deuni ons ) a l th ou gh the re i s now increas ing recogni t i on o f corp ora t i s t soc ia l



2 2 2 F ro m M i x e d E c o n o m y t o M e t a g o v e r n a n c e

pac t s in a number o f European wel fa re reg imes on var ious sca les . Moreoften, i t i s d iscussed in such terms as networking, publ ic-pr ivate par tners h ips , s t ra t eg ic al l i ances , in te r- o rgan iz a t iona l co l la bora t ion , reg u la tedse l f - regu la t ion , s t akehold ing , p roduc t ive so l ida r i t i e s , p roduc t iv i ty coa l it ions , l ea rn in g reg ions , the soc ia l econ om y and assoc ia t iona l democ racy.

This recurrence of corporat ism, a lbei t in qui te var ied guises , i s due,l ike the recurrence of l iberal ism, to cer ta in mater ia l features of capi ta lis t format ions . These are the same features that tend to generate l imitsto a pur el y ma rk et -b as ed fo rm of capi ta l is t orga niz at i on, and wer e l is tedabo ve. I n br ief , to avoid unnec ess ary repet i t i on, the y comp ris e: (1) th egro win g social iz at ion of th e forces of pro duc t io n despi te con t i nu ed

pr iva te o wne rsh i p o f the me ans o f p ro duc t io n ; (2 ) the d i l emm as pos ed by the shared in te res t o f p roducer c lasses and groups in maximiz ing to ta lrevenues and the confl ic t over their a l locat ion; (3) the need for consulta t ion among opera t iona l ly and organ iza t iona l ly d i s t inc t bu t func t iona l lyin te rd ep en de nt fo rces abou t the ec onom ic impac t o f s t a te po l ic ies andthe po l i t i ca l r epercus s ions o f p r i va te econ omi c dec i s ion-m aking ; and (4 )the pr ob le ms gen er ate d by th e na tu re of c ivi l society as a sp he re of part i cu la r in te res t s . Each of these four bases i s inheren t ly con t rad ic to ry andeach prompts ins tabi l i t ies in the very corporat is t tendencies that i t helpsto gen era te . Th is i s an im po r t an t pa r t o f the exp l ana t io n fo r th e recu rrent cycles of the rise of corporatism, i ts fall and its return in a new guise.This pat tern can be seen in corporat is t pol icy cycles within given s tagesof capi ta l ism and in th e r ise of n e w type s of co rp or at is m assoc iate d withdifferent s tages of capi ta l ism.

Institutional separation and statism

Imp era t iv e coord ina t ion i s th e th i rd m od e of gove rna nce to be cons idered here . I t p lays an impor tan t pa r t in the governance o f the economyin i t s na r row sense th rough the deve lopment o f the f i rm and o ther h ie rar chi cal for ms. Bu t i ts rol e is eve n m o r e evide nt in th e act ivi t ies of tha tinclu sive hie rar chi cal or ga ni za t i on th at is no t i t se l f subjec t to con tr ol bya super ord ina te o rgan iza t i on , namel y, the sover e ign s ta te fo rm tha t i stypi cal of capitalist social form ati ons . This is ref lect ed in W eb er ' s classicdef ini t ion of the modern s ta te in terms of i ts d is t inct ive means of pol i t ical con tr ol and in th e po st ul ate of the real is t the ory of in te rn at io nal re lat ions tha t the re la t i on be tw ee n sovere ign s ta tes i s one o f pu re anarchy.Weber ana lysed the modern s ta te as a compulsory assoc ia t ion tha t hassuccessful ly mo no po l i ze d th e leg i t i mat e use of physica l force as a me an sof dominat ion within a given terr i tory. I ts def ining features were anadm ini s t r a t i ve staff, m ea ns of or ga ni ze d coer cion , an effect ive c la im tothe legi t imate exercise of that coercion, a dis t inct terr i tory within which



From Mix ed Economy to Me tagove rnanc e 22 3

th is coercion was exercised and subjects over whom i t was exercised(W ebe r 1948) . This def ini t ion is consi s ten t wi th th e idea of th e s ta te asan apparatus that makes decis ions that are col lect ively binding onmembers of a given society and just i f ied in the name of the pubhc interes t or c o m m on good (see chap te r 1) bu t i t coul d wel l lead to ov er em

phas is on th e rol e of for ce in th e s ta te ' s ro ut in e op er at io ns a t th e ex pe ns eof o th er mod es o f s t a te in t e rve n t ion . For, a s no t ed in ch ap te r 1 , the cap ita l is t type of s ta te may intervene not only through the exercise of legi t imate o rgan ized coerc ion and th rough leg i s la t ion enac ted accord ing toth e ru le o f l aw, bu t a l so th ro ug h i t s com ma nd ov er f i sc a l and m on e t a r yresources ( l inked to i t s monopoly o f o rgan ized taxa t ion g rounded in i t smonopoly of coercion and to i ts control over legal tender and the cent ra l bank) , th rough a re la t ive monopoly o f o rgan ized in te l l igence , andth ro ug h i ts pow er s of mo ra l suasion r oot ed in th e ar t icul at i on of he gemonic accumula t ion s t ra teg ies , s t a te p ro jec t s and hegemonic v i s ions . Thescope of s t a te powers i s espec ia l ly p rob lemat ic fo r many of the d i s t inct ive economic and social pol ic ies pursued by the ideal- typical KWNS andS W P R as oppo se d to the gener ic func t ions o f the mo de rn s ta te (o r cap italist type of state) in capitalist societies.

More general ly, i t i s c lear, as Weber took pains to emphasize , thatth e r e i s cons ide rab l e var ia t ion in the weigh t o f im pe ra t i ve coo rd i na t ionin the overa l l pa t t e rn o f s t a te in te rven t ion . Regard ing the condi t ions fo r capi ta l accumulat ion, which is by no means a l l there is to the s ta te ' s act ivi t ies , for examp le, the role of im per at i ve c oor din at i on te nds to be mo sts ignif icant in es tabl ishing the ini t ia l condi t ions for capi ta l accumulat ion( the f i r s t ro un d of p r imi t ive accumula t ion) - ' and rep rod uc i ng it s genera lex t e rn a l cond i t io ns ( such as the enf orc em ent o f p r op er ty r igh t s and cont rac t s ) . Re l ia nce on im per a t ive coor d ina t io n (o r top -d ow n s ta te in te rven t i on) a l so t en ds to inc rea se whe n the fo rms of p r i va te ow ner sh ip

block the gr ow ing social iz at ion of the forces of pr od uc t i on , wh e n classconfl ic t and/or confl ic t among owners of di fferent ent i t lements tore ve nu e th re a t en s accu mula t ion , wh en the logic o f eco nom ic ac t ion conf l i c t s wi th im por ta n t po l it i ca l goa l s and whe n the pursu i t o f pa r t i cu la r in te res t s th rea tens the rea l i za t i on o f th e par t i c u la r accum ula t io n s t ra tegies , s ta t e projects an d he ge mo ni c projects wi t h which the s ta te is f ro mt ime to t ime assoc ia ted . And the resor t to o rgan ized coerc ion ra ther thanlaw is at i ts most significant, of course, in the init ial stages of exceptional

per iod s wh en th e sov ere ign s ta te decl are s s ta te s of em er ge nc y an d sus

pends the fo rmal democra t ic p r inc ip les on which the normal bourgeo isdemocra t ic fo rm of the cons t i tu t iona l s t a te i s based . Such s i tua t ions a renot so re levant to the countr ies of di rect concern in the present work,

but they have played a key role in s ta tes and regions beyond the bordersof the spa t io - t em por a l f ix assoc ia ted wi t h At l an t i c Fo rd i s m ( for examp le .



2 2 4 F r om M i x e d E c o n o m y t o M e t a g o v e r n a n c e

2. Market and State Failure

Th e pre v io us sec t ion has cons ider ed th re e bas ic fo rm s of gov er nan ce andindicated in qui te abstract and s imple terms how they are rooted ingene ral feat ure s of capi ta l is t social fo rm at i on s an d ho w these fe atur esa l so t end to undermine them. This p rov ides a genera l exp lana t ion fo r the

possibili ty of cycles in which the relative weight of different modes of go ve rn an ce rises, falls, an d rises again . In this secti on I con sid er sour ce sof fa i lu r e in t e rn a l to eac h of the se me ch ani sm s tha t re i n fo rce thesegenera l t endenc ies and a l so he lp to exp la in some of the more concre te -com ple x aspec t s o f va r ia t i on in pa t te rns o f gove rna nce . I beg in once

in t i ie mil i tary dic ta torships in the oi l -producing s ta tes on which theAt l an t ic Ford i s t eco nom ies depe nd so heav i ly ) .

The paradox of governance

Th e re a r e s t ra nge com plem ent a r i t i e s in th e osc i l l a t ion an d rec ur r enc e o f different modes of governing the capi ta l re la t ion. For example, whi lel ibe ra l i sm tend s to re gen er a te i t se lf ' sp on t ane ous ly ' on the bas i s o f keyfea tures o f cap i ta l i s t soc ie t i es , th i s regenera t ion mee ts obs tac les f romsome of their other key features . And, whi le the la t ter provide the basisfo r the resurgence o f o ther d i scourses , s t ra teg ies and organ iza t iona l pa radigms, such as corporat ism or s ta t ism, their real izat ion tends to be fe tte re d in tu rn by the very feat ures tha t ge ne ra te l iberal ism. Ov era l l , the sem 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 o s c i l l a t i o n sin the re la t ive weight of di fferent kinds of coordinat ion and modes of

pol icy-making. This said , d i fferent pr inciples of governance seem moreor less wel l sui ted to different s tages of capi ta l ism and/or i ts contemporary var ian t s . Thus l ibe ra l i sm was p robab ly more su i ted to the p ioneering for ms of co mp et i t iv e capi t a l ism th an to la te r for ms - th ou gh Polan yiand othe rs would not e that i t has c lear l imita t ions e ven for com pet i t i ve

cap i ta l i sm; and i t i s more su i ted to uncoord ina ted than coord ina tedmarke t economies , fo r which s ta t i sm and corpora t i sm a re be t te r ( seeCoates 2000; Ha l l and Sosk ice 2001b; HoUingswor th and Boyer 1997b;H u b e r an d S t ep he ns 2001) . Thu s d i ffe ren t s t ages a nd fo rm s of cap i ta l i smma y hav e d i s t inct ive ins t i tu t iona l a t t r ac to rs (o r cen t re s o f g rav i ty ) a ro un dwhich osci l la t ion occurs . In addi t ion, di fferent var iants of these forms andstages are a lso l ikely to have different pa t t er ns of go ve rn an ce tha t ares t ructura l ly c ouple d to their specif ic pa t t er ns of speci al izat ion and their gr ow th d ynam ics . Thi s is a rich field of re se ar ch th at ha s al re ad y bee n well

p loughed and cannot de ta in us here .



F r om M i x e d E c o n o m y t o M e t a g o v e r n a n c e 2 2 5

more wi t l i t l i e dominan t coord ina t ion mechanism in cap i ta l i s t soc ia l r e lat ions , namely, the marke t mechanism.

Market failure

Many or thodox economis t s t end to assume tha t the ' p rocedura l ra t iona l i ty ' o f pe r f ec t ma rk e t s gua ran tee s ma rk e t success . Fa i lu re occurswhen economic exchanges do no t p roduce wha t a pe r fec t (hence ' imaginary ' ) marke t would de l ive r. S ince marke t ra t iona l i ty depends on f reeand equa l exchan ge ra the r th an on th e purp oses o f ec ono mi c t ra nsact ions , success or fa i lure ca nn ot , on mo st ac cou nts , be jud ged th ro ug h subs ta n t iv e c r i t e r i a such as ma rk e t fo rces ' un ev en im pac t on wea l th , inc ome ,hfechanc es o r reg ion a l imb a lan ce . For, p r ov i ded tha t inequa l i t i e s de r i vef ro m (or a re cons i s ten t wi th ) th e opera t io n o f pe r f ec t mar ke t s , they mus t

be judged as ra t ional and fa i r. At best , one could see such problems asm a r k e t ' i n a d e q u a c i e s ' r a t h e r t h a n g e n u i n e m a r k e t f a i lu r e s. T h e r e i s n osho r t age o f c la ims abou t such inadequ ac ies , how eve r, no r abo ut th e needto re me dy th em as wel l a s ma rk e t fa i lu res th ro ug h soc ia l an d po l i t i ca lact ion of var ious kinds.

In a ma rke t - r a t i ona l f ra mew ork , s t a te and ma rk e t a re s t r i c t ly de ma rcated. The s ta te should s tay a t arms-length f rom market forces , merelyes tab l i sh i ng and defe nd i ng the f r am ew or k fo r ma rk e t ins t i tu t ions . Th elat te r ca n t he n al lo cate g ood s an d services in th e mo st effic ient way. Th emarke t a l so func t ions as a l ea rn ing mechanism. Thus Hayek a rgues tha tmarke t fa i lu re i s an essen t ia l ly ' t r i a l -and-e r ror ' d i scovery mechanismwhereby marke t s p rompt economic agen ts to l ea rn and innova te . In thelong run, on this view, th e ma rk et prov ide s the mos t f l exi ble an d leastd i sas t rous coord ina t ing and adap t ive mechanism in the face o f complexi 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, f o r n e o c l a s s ical and Austr ian theoris ts a l ike , the ini t ia l response to market fa i lure is'more market , not less ' - even i f th is of ten requires , in the short term,ye t fu r the r s t a te in te r ven t i on . B ut i t i s deba t ab l e , to say the l eas t , wh e t he r eve n per f ec t ma rk e t s cou ld e l im ina t e al l fo r ms of ma rk e t fa ilu re . Ev enneoc lass ica l economis t s recognize the ex ten t to which marke t s may no t'suitably capture the full social benefits or levy the full social costs of marke t ac t iv i ty ' (Wol f 1979:138) .

This approach i s c lea r ly incons i s ten t wi th tha t advoca ted here . For, a sI have argued in chapter 1 , i t i s not markets as such that are dis t inct iveof capi ta l ism but their extension to labour-power as a f ic t i t ious commodit y. I t i s not the inh er en t eff ic iency of ma rk et s th at dr i ves 'w eal thcrea t ion ' o r ' e co nom ic g ro wth ' . Ins te ad , th i s i s ach iev ed th ro ug h them 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 a n d t h e c o m p e t i t i v e ( a n dcrea t i ve ly des t r uc t ive ) se a rc h fo r abov e-a ver age p rofi t s ; and bo t h o f



2 2 6 F r om M i x e d E c o no m y t o M e t a g o v e r n a n c e

these p rocesses invo lve s t rugg les to accumula te s t ruc tura l power in o rder

to sha pe the oper a t i on o f ma rk e t fo rces and con t ro l the condi t ions fo r the valor izat ion and real izat ion of capi ta l . Moreover, as I have alsoargued in chapter 1 , the capi ta l re la t ion considered as a purely economic(or marke t -media ted) re la t ion i s cons t i tu t ive ly incomple te . I t s con t inuedre pr od uc t ion depend s , in an uns t ab le and con t ra d ic t o ry way, on changing ex t ra - eco nom ic condi t ions . Thus , whi le marke t s may med ia t e thesea rch for ad de d value, the y can not pr od uc e i t. In add i t i on, as co mm odi f icat ion and f i c t i t i ous comm odi f ica t ion wid en an d dee pe n the i r penet ra t ion o f soc ia l r e la t ions , they genera te con t rad ic t ions tha t cannot be

fu lly reso lved th r oug h the ma rk e t mec hani sm, bu t on ly defe r red an ddispl aced (c hap ter s 1-5) . In this sens e, m uc h of wh at pass es as ma rk etfa i lu re o r marke t inadequac ies i s ac tua l ly an express ion of the under lying con t r ad ic t ions o f cap i ta l i sm. Thus , whi le ma rk e t s ma y me dia te cont rad ic t ions and modi fy the i r fo rms of appearance , they cannot t r anscendthem. S imi la r ly, a l though the s ta te may in te rvene in response to marke tfa i lur e , i t typica l ly only modif ies the fo rm s or s i tes of the se co ntr adi ct ion s - in t r od uc in g class s t ruggles into th e s ta te and /or ge ner at ing tenden cie s t ow ar ds fiscal crisis, leg iti mac y crisis, ra tio nal ity crisis, etc. - or

e l se d i sp laces and defe rs them beyond the spa t io - tempora l boundar iesassoc ia ted w i th tha t pa r t i c u la r s t a te .

State failure

Th e ra t io nal e for s ta te act ivi ty is not pro ce du ra l (as with th e ma r ke t) butsubs tan t ive . Th is ra t iona le i s expressed th rough impera t ive coord ina t ion(or h ie ra r chy ) ra t her than the an arc hy of ma rk e t fo rces . In pu re fo rm i tis foun d in th e def ini t ion and enf or ce me nt of col lect ively bindin g deci

s ions made in the name of the publ ic interes t or general wi l l . But i t canalso be seen in the def ini t ion of col lect ive projects that are pursuedthr oug h top-d own p la nn in g and coord i na t io n . S ta te fa i lure i s jud gedaccording to this substant ive ra t ional i ty: i t refers to the fa i lure to real izethe s ta te ' s own pol i t ical project(s) wi thin the terms of i ts own operat ingru les and procedures . In democra t ic reg imes these ru les and proceduresinc l ude res pec t fo r l ega l ity and the regu la r renew al o f po pu la r ma nd a t esfor act ion. Thus the pr imary cr i ter ion for ident i fying s ta te fa i lures is notal lo cat i ve eff iciency (as def ined in ter ms of th e pr oc ed ur al ra t io nal i ty of

the market) . Ins tead, i t i s the effect iveness (as of ten symbolic as mater ia l ) wi th which specif ic s ta te projects are real ized. I t i s cer ta inly possible , how ev er , for eff ic iency to c ou nt am o n g th e cr i ter ia for th e successof specif ic projects . Thus ' valu e-f or- mone y ' i s on e objec t ive of th e neol iberal s ta te project .



F r om M i x e d E c on o m y t o M e t a g o v e r n a n c e 2 2 7

Mor eov er, jus t a s ma rk e t fa i lu re ca n be re l a ted to subs t an t ive fac to rs

that block the real izat ion of i ts procedural ra t ional i ty, so s ta te fa i lurecan be l inked to specific procedural factors that block effective policym a k i n g a n d i m p l e m e n t a t i o n . T h u s v a r i o u s c o m m e n t a t o r s h a v e s u g g e s t e dtha t p lann i ng , bureaucracy, pa r t i c i pa t ion , re l i an ce on prof ess i ona l expe rt ise , e tc . , may each fa i l in different ways to generate adequate pol ic iesand /or to secure the i r e ffec t ive rea l i za t ion . The resu l t ing t endenc iestow ard s im pl em en ta t i on and f i sc a l c r i ses can l ead in tu rn to p r ob le ms of

pol i t ical legi t imacy i f there is a widespread percept ion that the s ta te ' s pub l ic purposes a re no t be ing ach ieved . One response to th i s wi th in the

st a t e is a con sta nt cychng th ro ug h th es e different mod es of pol icym 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 fo r t h e i r respect ive tendencies to fa i lure (Offe 1975) .

Jus t as neoc lass ica l economis t s make unrea l i s t i c assumpt ions aboutmar ke t s , we l f a re economi s t s ma ke impla us ib le c la ims about s t a tes . Th eyassume tha t s t a tes no t on ly have a l l the in format ion necessa ry to maximi ze social welfa re , bu t a lso that they hav e bo th the inte rna l org ani zat iona l capac i t i es and th e po we rs o f ex te r na l in t e r ven t io n nee ded toachieve their publ ic object ives . Yet i t i s widely recognized that s ta te man

agers (espec ia l ly e lec ted po l i t i c ians ) have sho r t - t e r m t im e hor izo ns an dare vu lnerab le to lobbying ; tha t s t a tes a re sub jec t to bounded ra t iona li ty ( l imi ted in f orm at i on , uncer ta in ty and t im e pres sure s ) w he n ac t ing ;tha t they of ten pur sue mul t ip l e , con t ra ry and even con t r ad i c to ry goa l s -ma ny of whic h ar e a lso inhere nt ly infeasible ; tha t s ta te capaci t ies ar el imite d bot h by ' in t erna l i t i es ' (c alcul at ions of pr i vate costs and benef i tswhich di ffe r f r om pub l ic goa l s ) and ex te r na l res i s tance ; tha t no n- ma rk e toutputs are usual ly hard to def ine in pr inciple , i l l -def ined m pract ice anddi ff i cu l t to measure ; and tha t s t a te in te rven t ion may prompt ren t - seek ing

b e h a v i o u r a m o n g p o l i c y - t a k e r s t h a t m e r e l y r e d i s t r i b u t e s r a t h e r t h a ncre ate s re sou rce s (Offe 1975; W o h 1979) .

Th er e are differ ent re sp ons es to s ta te fa i lure . Libe ral cr it ics seemarke t fo rces as a se l f -cor rec t ing l ea rn ing mechanism and the s ta te asinheren t ly incor r ig ib le and ineducab le . They do no t ask whe ther s ta tefai lure could be corrected in s imilar ways to market fa i lure , but seek to replace i t wi th the market . But other cr i t ics a l low both for sel f -correct ing pol icy cycles and/or ins t i tu t ional redesign in the s ta te . Relevantmeasures in the l a t t e r regard to improve po l icy coord ina t ion and

im pl em en ta t i on can inc lud e redef ining the divis ion of la bo ur in th e s ta tean d wid er pol i t ica l syste m, incre asing s ta t e au t o no m y so that i t i s lessvulnerable to par t icular is t ic lobbying, boost ing ref lexivi ty ( includingthrough aud i t ing and the con t rac t cu l tu re ) and reor ien t ing t ime hor izonsin favour o f longer- te rm po l icy-making and po l icy- tak ing .




Heterarchy as a response to market and state failure

Discussions of market and s ta te fa i lure of ten appear to res t on diamet r ica l ly opposed theore t i ca l and po l i t i co- ideo log ica l pos i t ions . Ye tthey share some core assumpt ions . Both p resume a d icho tomis t i c

pub l i c - pr iva te d i s t inc t ion and a ze ro- sum co nce p t io n of the respec t ivespheres of the market and s ta te . Thus, on the one hand, cr i t ics of s ta tefa i lu r e see the ec on om y as the s i t e o f mu tua l ly advan t ageo us , vo l un ta ryexchange among formal ly f ree , equa l and au tonomous economic agen ts ;and, on th e othe r han d, the y re ga rd th e s ta te as pr em is ed on org ani zedcoercion that in t rudes on the pr ivate l iber t ies of c i t izens (especial ly inthe ir capa ci ty as ec on om ic agents ) . Conv erse ly, cr i t ics of ma rk et fa i luresee th e s ta te as a sov ere ign aut hor i ty em po w er ed to pur su e th e publ i cint ere s t against the par t ic ular is t ic , egois t ic shor t - ter m inte res ts of c i t izens(especial l y th os e of pr op er ty ow ne rs ) . In bot h cases , th e mo re t her e is of the state, the less there is of the market; what varies is the positive or neg at ive ev alua t ion of this ra t io . Similar ly, whe rea s tho se wh o bel ieve inthe bene f ic ence of ma rk et forces re ga rd s ta te fa ilure as no rm al andm ar ke t fa i lure as exc ept iona l , th os e wh o bel iev e in th e ra t iona l i ty of thes ta te and i t s embodiment o f the pub l ic in te res t typ ica l ly cons ider marke t

fa i l ure as inev i ta ble a nd s ta te fa i lure^ as so me th in g which , i f no t exce pt iona l , i s a t leas t con jun ctu ral - an d can there for e be ov er co me thr ou ghimproved ins t i tu t iona l des ign , knowledge or po l i t i ca l p rac t i ce .

A th i rd way be tween the anarchy of the marke t and the h ie ra rchyof imp era t iv e coor d ina t io n i s fo und in ' he te r a rch y ' , which compr i s eshor izo n ta l se l f -o rgan iza t ion am on g mut ua l l y in t e r dep end ent ac to rs .A m o n g s t i t s 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 rg a n i z a t i o n a lnegot i a t ion and dec en t r ed in te r s ys tem ic con tex t s t ee r ing (dezentrierte

Kontextsteuerung). T h e f irst tw o of the se for ms of go ve rn an ce shou ld be

famil ia r to re ad er s ; th e last requires som e c om me nt . I t com pr is es effor tsto s t eer (gu ide ) the de ve lo pm en t of di ffere nt systems by tak ing accou nt both of their own operat ing codes and ra t ional i t ies and of their var ioussubs tan t ive , soc ia l and spa t io - tempora l in te rdependenc ies . Th is i s f ac i l i t a ted by communica t ion o r ien ted to in te r sys temic 'no i se reduc t ion '( m u t u a l u n d e r s t a n d i n g ) , n e g o t i a t i o n , n e g a t i v e c o o r d i n a t i o n a n d c ooperat ion in shared projects . And i t i s ref lected in the use of symbolicme dia o f co mm uni ca t io n such as mon ey, l aw or know ledg e to modi fy thestructural and s t ra tegic contexts in which different systems funct ion so

th a t comp l ia nce wi th sh ar ed pro jec t s fo l lows f rom the i r o w n ope ra t ingcod es ra th er tha n f rom imp era t iv e coo rd i na t ion ( see Gla gow and Wi l lke1987; Wil lke 199 2,1 997 ) .

Th e ra t ion a l i ty o f gove rna nce i s ne i the r p r oce dur a l no r subs t an t ive : i ti s bes t desc r ibed as ' r e f l ex ive ' . Th e pro ced ur a l ra t iona l i t y o f th e cap i ta l i s t



F ro m M i x e d E c o n o m y t o M e t a g o v e r n a n c e 2 2 9

ma rk e t i s e ssen t ia l ly fo rma l in na t ur e , p r io r i t i z ing an end less ' ec ono mizing ' pursu i t o f p rof it max imi za t ion ; the sub s tan t ive ra t i ona l i ty o f gove rnme nt is goa l-o r ie nted , pr ior i t iz in g 'effect ive ' purs ui t of successive pol icygoa ls . He te ra rch ic governance ins t i tu tes negot ia t ion a round a long- te rmcons ens ua l p ro jec t as the bas i s fo r bo th neg a t i ve and pos i t ive coor d in at ion am on g in te rd ep en de nt ac to rs . Th e key to it s success i s co n t in ue d comm i t m e n t t o d i a l o g u e t o g e n e r a t e a n d e x c h a n g e m o r e i n f o r m a t i o n ( t h e r e b yredu c ing , wi t hou t ever e l imina t ing , the p ro b l em of bo un de d ra t io na l i ty ) ;to we ake n opp or t un i sm by lock ing par tn ers in to a ran ge of in t e r de pendent dec i s ions over shor t - , me di um - and long- te rm t im e hor i zons ; and to

bui ld on th e in te rd ep en de nc ie s an d r isks assoc iated w it h ' asset specif ic ity ' by encouraging sol idar i ty among those involved. The ra t ional i ty of gover na nc e i s d ia log ic ra the r tha n mono log i c , p lu ra l i s t i c ra t her tha n m on ol i th ic , he te ra rch ic ra ther than e i the r h ie ra rch ic o r anarch ic . In tu rn , th i ssugges t s tha t the re i s no one bes t governance mechanism.

There has been a remarkab le inc rease in resor t to he te ra rchy in the l as ttwo decades in many d i ffe ren t sys tems and spheres o f the l i f ewor ld . Th isis mo st evid ent in th e explosi on of ref ere nce s to ne tw or ki ng (for ex am

p le , the ne tworked en te rpr i se , the ne twork s ta te , the ne twork soc ie ty,ne tw ork -ce n t r i c war f a re ) and in the g rowing in te res t in negot ia t i on , mul t i -agency coopera t ion , pa r tnersh ip , s t akehold ing , and so on . Th is represen t sa sec ula r re sp on se to a dr am at ic intensif icat ion of socie ta l complexi ty. Thi shas severa l sources : (1 ) inc reased func t iona l d i ffe ren t ia t ion combinedwi th inc r eased in t e r de pen de nce ; (2 ) the inc re ased f uzz iness o f so me inst it u t i o n a l b o u n d a r i e s , fo r 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 'in an era of inc rea sed systemic or s t r uctu ral compe t i t ive nes s; (3) the mu lt i p l icat ion and rescal ing of spat ia l hor izons; (4) the increasing complexi tyof temporal hor izons of act ion; (5) the mult ipl icat ion of ident i t ies ; and (6)th e inc r eased im por ta nc e o f kn ow le dge and organ ized lea rn ing . Suc h

complex i ty i s re f lec ted in wor r ies ab ou t the gover nab i l i ty o f eco nom ic , poli t ic al an d social l ife in the face of gl ob al iz at io n an d conflicting iden tit i e s . I t impl ie s tha t im po r t an t ne w pr ob l em s ha ve eme rg ed tha t cann ot bema na ge d or reso l ved read i ly, i f a t a l l , th r oug h top -do wn s ta t e p lann ing or marke t -media ted anarchy. Th is has p romoted a sh i f t in the ins t i tu t iona lcen t re o f g rav i ty (o r ins t i tu t iona l a t t r ac to r ) a r ou nd whic h po l ic y-ma kerschoos e am on g poss ib le mo de s o f coor d ina t ion .

Th e cond i t i ons for successful pur su i t of ref lexive ra t ion al i ty are jus tas com ple x as a re th os e fo r we l l - func t ion ing ma rk e t s o r s t a te p lann in g .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 rg 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 i n t e rsystemic s teer ing pose different problems in this regard. Specif ic objectsof go ve rn an ce a lso affect th e l ikel i hood of success . Fo r ex am pl e, govern ing the g loba l econ omy, h u m a n r igh t s reg imes , t r a nsna t ion a l c r im eand t ransna t iona l soc ia l movements c lea r ly invo lve very d i ffe ren t p rob-



2 3 0 F r o m M i x e d E c o n om y t o M e t a g o v e r n a n c e

Exchange Command Dialogue

Rationality For mal and Subs tan t i ve and Reflexive and p r o c e d u r a l g o a l - o r i e n t e d p r o c e d u r a l

Criterion of Efficient Effe ctive goal- N e g o t i a t e d success a l loca t ion a t t a inment c o n s e n t

Typical example M a r k e t S t a t e N e t w o r k

Stylized mode Homo Homo Homoof calculation economicus hierarchicus politicus

Spatio-temporal Wo r l d m a r k e t , Na t io na l t e r r i to ry. Resca l inghorizons r e v e r s i b l e p la nn i ng and pa th-

t i m e h o r i z o n s s h a p i n g

Primary E c o n o m i c Ineffec t iveness 'Noise ' ,criterion of inefficiency ' t a lk ing

failure s h o p '

Secondary M a r k e t B u r e a u c r a t i s m ,criterion of inade quac i es re d t ape

failure

lems . Tur bu le n t env i r onm ent s pose d i ffe ren t gove rna nce p rob l ems f romthose that are relatively stable - especially as t ime is required for self-o rgan iza t ion to opera te consensua l ly. Governance mechanisms mus t

pro vid e a f r am ew or k ui whi ch re l evan t act ors can re ach a gr ee me nt over (a lbei t poss ibly different ia l ) spat ia l a nd tem por al hor izo ns of act i on visa-vis their environment . They must a lso s tabi l ize the cogni t ive and norm a t i v e e x p e c t a t i o n s o f t h e s e a c t o r s b y s h a p i n g a n d p r o m o t i n g a c o m m o n'wor ld -v iew ' as we l l a s deve lop ing adequa te so lu t ions to sequenc ing

pr obl ems . In this wa y they can pr od uc e a pr edi ct abl e or der ing of var i ousact ions , pol ic ies or processes over t ime, especiaUy where they have different temporal logics . At s take here is es tabl ishing secure bases of coord ina t ion wi th the i r own s t ruc tura l ly insc r ibed s t ra teg ic se lec t iv i ty. Therecan cer ta inly be no guarantees of success in the pursui t of col lect ive goalsth r oug h se l f -o rgan iza t ion - any m or e th an the r e can be th ro ugh re l i an ce

on the invis ible hand of the market or the i ron f is t (perhaps in a velvetg love) o f imp era t iv e coord ina t i on . N one the les s , wh en faced wi th cont i nui ng evi den ce of ma rk et an d s ta t e fa i lure , ne tw or ki ng and self -o rgan iza t ion can prove a t t rac t ive ( fo r a summary account o f the th reemodes of coordinat ion, see table 6 .1) .

Table 6 .1 M od al i t i es o f gov ernan ce




3. The Governance of Atlantic Fordism and Beyond

In th e l ight of the se prel imi nar y re ma r ks I wi l l no w con sid er the cha nging for ms of ec on om ic and social co or din at io n s ince the 1980s. Th er e arethr ee int err e la ted issues wor th pur su ing here: th e cha ngi ng def ini t ions of the objects of economic and social governance; the changing inst i tu t ionsand governance mechanisms responsible for i ts del ivery; and the pract icesin and th rough which economic and soc ia l po l ic ies a re de l ive red . Thesei ssues a re c lose ly l inked . For governance p rac t i ces (media ted by ins t i tut ions) a t te mp t to del imit , unify, s tabi l ize a nd re pr od uc e the ir objects of

go ve rn an ce as th e pr ec ond i t i on as wel l as th e effect of gov ern ing th em .Moreover, governance p rac t i ces a l so typ ica l ly a im to c rea te and reproduce the sut) jects needed for governance to operate effect ively (Barry e ta l 1996; Hunt and Wickham 1994) . Thus, as the objects and modes of gove r n a n c e c h a n g e , i n s t i t u t io n a l m e c h a n i s m s a n d a c t u a l p r a c t i c e s c h a n g e t o o- a n d s o d o t h e t y pi c al f o r m s o f g o v e r n a n c e f ai lu re . I n t h i s s e n s e w e s h o u l dsee ec on om ic and social pol i cy re gim es as const i tut ive of thei r objects of gove rna nce and no t jus t a s resp onse s to p re -g iven e con om ic an d soc ia l

problems. Indeed, th is is one of the bases on which the welfare s ta te has

of ten be en c r i t i c ized - tha t i t ge ner a t es the p r ob le ms i t addresses . Th isalso suggests that i t wi l l be sel f -expanding - a lways f inding new problemsto solve - an d, pe rh ap s, ul t i mat ely sel f -defe at ing as i t be co me s mo r ecom ple x, ove r l oad s i tse l f wi th tasks , an d eve ntu al l y pr od uc es a cr is is 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 a l. 1 9 75 ; L u h m a n n 1 9 90 ) .

Whether or not one subscr ibes to such cr i t ic isms, i t was the purportedfa i lure o f the KW N S as a mo de of ec ono mi c an d soc ia l gover nan ce tha t

pr om pt ed the sea rc h for ne w for ms of go ve rn an ce . I ts a l l eged cr is isa f f e ct e d n o t o n l y t h e m o d e s o f ' 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 ' i n

the KWNS but a lso the la t ter ' s objects and subjects of social and econom ic govern anc e . Th e K W N S beg an to fa il a s a mo de of gov er na ncewhen i t s coherence as an ins t i tu t iona l ensemble became incons i s ten twi th th e objects i t was gover nin g, th e prac t ice s bei ng de pl oy ed to go ve rnthem, and the iden t i t i e s and in te res t s o f the ac t ive agen ts and /or ' pass ive 'sub jec t s o f the K W N S reg ime . Thus , t ak ing i ts fou r d ime ns io ns in tu r n ,th e fol l owing cr is i s- tend encies c an be ident i f ied.

F i r s t , the p r imary ob jec t o f economic governance in the KWNS wast h e n a t i o n a l e c o n o m y. T h e e m e rg e n c e a n d c o n s o l i d a t i o n o f K e y n e s i a n

p rac t i ces had he lped to de l imi t and reproduce the na t iona l economy(Toml inson 1985) . They prov ided the means o f measur ing na t iona le c o n o m i c p e r f o r m a n c e , c o n t r o l l i n g e c o n o m i c f l o w s a c r o s s n a t i o n a l

borders , se t t ing economic aggrega tes such as in f la t ion , employment andgrow th as goa l s o f na t i ona l ec ono mi c ma na gem ent , and c rea t ing




t l i e in f ras t ruc ture fo r na t iona l economic deve lopment . But Keynes iane c o n o m i c m a n a g e m e n t b e c a m e i n c r e a s in g l y p r o b l e m a t i c a n d g e n e r a t e ds tagf la t ionary t endenc ies tha t fue l l ed the emerg ing c r i s i s o f the At lan t icFord i s t economies tha t Keynes ian s ta te in te rven t ion (as b road ly def inedin chap te r 2 ) was supposed to have the capac i ty to manage . Economici n t e r n a t i o n a l i z a t i o n e x a c e r b a t e d t h e s e p r o b l e m s . I t u n d e r m i n e d t h ena t iona l economy as an ob jec t o f economic management and led to qu i ted i ffe ren t con cep t io ns o f the e co no my and , a fo r t io r i , i ts mech ani sm s of economic and soc ia l governance . As we saw in chap te r 3 , r ep lac ing thena t iona l economy as the p r imary ob jec t o f economic governance i sthe k nowl edge -bas ed e co no my in an e ra o f g loba l iza t ion . As wi th thena t iona l economy tha t was d i scurs ive ly imagined and mate r ia l ly cons t itu te d as an object of ec on om ic gove rn an ce out of a far m o r e com pl exa n d i n h e r e n t l y u n m a n a g e a b l e e n s e m b l e o f e c o n o m i c r e l a t i o n s , t h ekno wle dge -ba se d ec ono my f i r s t has to be ima gine d as an ob jec t o f economic governance before i t gains a suff ic ient ly sol id mater ia l and inst itu t iona l fo rm to become po ten t ia l ly governab le th rough the po l i t i ca lt echnolog i es o f an eme rg i ng SW PR . I ha ve a l rea dy ind ica ted the mass iveeffor ts on the par t of many different social forces operat ing in many different domains and on many different scales to es tabl ish the global iz ing,

knowledge-based economy as the more o r l e ss wide ly t aken- for-gran tedfocal point of accumulat ion s t ra tegies , s ta te projects and hegemonicv i s ions . Whether o r no t i t p roves any more manageab le in the long te rmtha n the na t ion a l ec on om y did in the At l an t ic Ford i s t e ra i s ano t he r quest ion en t i re ly ( see ch ap te r 1 ) . Non e th e le ss , a t p re sen t , th e g ro wth dyn ami cof the knowledge-based economy i s he ld to depend on how effec t ive lyth e econ om ic spac e in whi ch i t i s a nc hor ed - no t neces sar i l y a na t io na lec on om y - i s inse r ted in to (o r, be t t e r pe rha ps , ne tw or ke d in to ) th echanging global divis ion of labour, and can survive the audi t of the world

marke t . Th is in tu rn has p rompted growing concern wi th in te rna t iona le 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 gto es ta bl ish best pra ct i ce) an d with supply- s ide in te rv en t i on - th e la t ter i n i t i a l l y 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 st h e p r i m a r y ob j e c t iv e a n d m e a n s o f e c o n o m i c i n t e r v e n t i o n . M o r e o v e r ,

because of the re la t ivizat ion of scale noted in chapters 3 and 5, a t temptsto s tab i l i ze the knowledge-based economy and /or to benef i t f rom suchstabi l izat ion ar e being pur su ed on m an y m or e scales .

Th e imagin ed scope and inc lus iveness o f the ec on om y tha t needs govern i ng hav e a l so exp and ed . Th is i s no longer in te rp re te d in na r r ow te rm s

bu t has bee n ex te nde d to inc lude ma ny add i t i ona l fac to rs , de em ed '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 a ff ec t e c o n o m i c p e r f o r m a n c e .This expans ion i s re f lec ted in concep ts such as s t ruc tura l compet i t ivenessor sys temic compet i t iveness - concep ts tha t h igh l igh t the combined




impac t o f d iverse soc ie ta l f ac to rs on compet i t iveness . S ta te managersthere fore in te rvene in a g rowing range of economica l ly re levan t p ract ices , ins t i tu t i ons , func t ional syst ems and do ma in s of the h few orld toenhance compet i t iveness . Th is has two in te res t ing and paradoxica leffects on th e s ta t e . Firs t , whi ls t i t ex pa nd s the pote nt i a l scop e of s ta tein te rven t ion fo r economic purposes , the resu l t ing complex i ty renders thesor t s o f top -d ow n in t e r ven t io n typ ica l o f the pos twa r K W N S less e ffect ive - requ ir in g that th e s ta te re t r ea t f rom som e areas of in te rv en t i onand reinvent i tse l f as a condi t ion for more effect ive intervent ion in others(Messner 1998) . And, second, whi ls t i t increases the range of s takeholders who se coop er a t io n i s requ i re d fo r success fu l s t a te in te rven t ion , i t a l soincreases pressures within the s ta te to create new subjects to act as i ts

par tners . Thus s ta tes are now trying to t ransform the ident i t ies , in teres ts ,capa ci t ie s , r igh ts an d respo nsibi l i t ies of ec on om ic and social forces sotha t th ey be co me mo r e f lexible , ca pa bl e and re l i able agent s of th e s ta te ' sne w eco nom ic s t ra teg ies - w he th er in par tne rs h ip wi th th e s ta te and /o r wi th each o ther o r as au tonomous en t repreneur ia l sub jec t s in the newknowledge-based economy (Bar ry e t a l . 1996; Deak in and Edwards 1993;Finer 1997) .

This is a lso ref lected in the t ransfer of techno-economic paradigmsfrom the f i rm to broader f ie lds of governance. This occurs in a t leas t twoways : th rough the s imple ex tens ion of t echno-economic parad igms f romthe pr ivate sector to publ ic and third sector organizat ions and throughthe respecif icat ion of th e best ins t i tu t iona l ar ra ng em en ts and mo stap pro pr i a te t asks o f th e s ta te (cf. Ho gg e t t 1987; Go od wi n an d Pa in t e r 1996) . In organizat ional terms the Fordis t per iod was one of large scale ,h i e r a r c h i c a l s t r u c t u r e s t h a t o p e r a t e d i n a b u r e a u c r a t i c , t o p - d o w n m a nner, and this model was a l legedly extended to the local s ta te and i ts economic and wel fa re ro les (c f . Hogge t t 1987; and be low) . Pos t -Ford i sm i sassoc ia ted wi th the ne tw or k f i rm and a ne w 'ne two rk par ad igm ' (Ca pe l lo1996; Cooke and Morgan 1993) . The fo rmer has been descr ibed in thefol lowing terms:

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 stronglycentralized strategic functions extending in several directions, and by a newtype of small enterprise, integrated into a multi-company local network.

Across the network, a system of constantly evolving power relationshipsgoverns both the dynamics of innovation and the appropriability of returnsto the partners involved. The network firm is attracted towards diversifiedmass production and the competitive factor of the single firm is the controlof complementary assets in the hands of its potential partners. (Capello1996: 490)



1

2 3 4 F r om M i x e d E c o n o m y t o M e t a g o v e r n a n c e

Ttie r ise of th e netw or k p ara dig m is ref lecte d both in th e ins t i t u t iona lre des ign of publ ic sector gov er nan ce , in th e 'new terr i tor i a l pol i t ics ' (or new urban pol i t ics) wi th which new forms of governance are associated(cf. Co x 1993; Go ug h and Eis ensc hi t z 1996) and in th e inc re ase d imp ortan ce a t t a che d to pub l ic -pr i va te par tne rsh i ps o f va r ious k inds . Thu sPark inson and Hard ing have descr ibed the en t repreneur ia l c i ty as ' onewhere key interes t groups in the publ ic , pr ivate and voluntary sectorsdev e lo p a com mi tm en t to rea l i z ing a b ro ad l y conse nsua l v i s ion o f u r ba ndeve lopment , dev i se appropr ia te s t ruc tu res fo r implement ing th i s v i s ionan d mobil ize bo th local an d non -lo cal re sou rce s to pur sue i t ' (1995; 66- 7) .

Se con d, the gener ic object of social gover nan ce in the K W N S (as inother forms of nat ional s ta te) was a nat ional populat ion divided in thef i rs t ins tan ce into c i t izens of the nat ion al s ta te and re s id ent a l iens . Bu tthis populat ion was categorized and governed in dis t inct ive ways sui tedto Atlant ic Fordism and i ts mode of regulat ion. Above al l , social pol icywas pr em is ed on condi t io ns of ful l or near-ful l em pl oy me nt , l i fe longem pl oy m en t - a lbei t no t necess ar i ly with th e same em plo yer - wi th afamily wage for male workers , and the patr iarchal nuclear family as the basic uni t of c ivi l society (Esping-Andersen 1994) . The KWNS was also p remised on a c lass compromise be tween organ ized labour and organ ized bus iness in which respons ib le un ion ism and co l lec t ive barga in ing

permi t ted managers to manage and workers to benef i t f rom r i s ing p roduc t iv i ty as wage ea rn ers and wel f a re rec ip ien t s . Th er e we re none t he l essso me marg ina l i zed or ov er bu rd en ed soc ia l g ro ups - mo s t no t ab l y wo me nas housewives , mothers and secondary par t i c ipan ts in the l abour fo rceand also immigrants or other workers (and their famil ies) who workedin d i sadvan taged segments o f the l abour marke t (Lewis 1998) . Th is

pa t t e r n was un de rm in ed bo th eco nomi ca l ly an d soc ial ly. Th e c r i si s 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 f ul l e m p l o y m e n t , t h e

fam ily wa ge an d th e ge nd er ed divis ion of lab our ; an d also led s ta t e m anager s to see th e social wage inc rea sing ly as a cost of in te rn at io na l pr odu c t i on ra the r tha n as a sour ce o f dom es t ic de ma nd . Th e K W N S wasalso affected by a weakening of the nat ional ident i ty and sol idar i ty thatshaped i t in i ts format ive per iod and helped susta in the coal i t ion behindit . Thi s is reflected in ch an ge s in th e values, social ide nti t ie s an d in ter es tsassocia ted with the welfare s ta te (s ee cha pt er 2). Th es e shif ts ha ve fragm en t ed th e K W N S coal i t i on of forces , led to dem an ds for m or e differentiated and flexible forms of economic and social policy, and led to

concern with problems of social exclusion and ensur ing l i fe- t ime accessto the benef i ts of a res t ructured welfare regime (for example, l i fe longl e a r n i n g ) .

Thir d, the pr im acy of th e na t i on al scale of ec on om ic an d social governa nc e dep en de d on the co i nc i den ce o f na t i ona l economy, na t ion a l s t a te .



F r om M i x e d E c o no m y t o M e t a g o v e r n a n c e 2 3 5

nat ional society and the survival of the nat ional s ta te as a sovereign body. Th is s t ruc tu red coherence has a l so been weakened . The na t iona le c o n o m y h a s b e e n u n d e r m i n e d b y i n t e r n a t i o n a l i z a t i o n , t h e g r o w t h o f mul t i - t i e red g loba l c i ty ne tw orks , th e fo r mat ion of t r i ad ec onom ies ( suchas the EU) , and the re -emergence o f reg iona l and loca l economies innat ional s ta tes (see chapters 3 and 5) . This complex ar t iculat ion of global-reg iona l -na t iona l - loca l econ om ie s i s re la te d to the ' ho l lowing ou t ' o f thena t iona l s t a te , a s i t s powers a re de lega ted upwards to supra reg iona l o r in te rna t iona l bod ies , downwards to reg iona l o r loca l s t a tes , o r ou twardsto re la t ive ly au tonomous c ross -na t iona l a l l i ances among loca l met ro

po l i t an o r reg iona l s t a tes wi th co mp le me nt a r y in te res t s . Th er e a re a l sogrowing a t t empts to in te rna t iona l ize (o r, a t l eas t , in Europe , to Euro-

pea nize ) social pohcy. A n d the uni ty of th e nat ion -s ta t e has bee n wea kene d by th e (ad mi t ted ly un ev en ) g ro wt h of mul t i e thn ic and mul t i cu l tu ra lsociet ies and of divided pol i t ical loyal t ies (with the res urg enc e of reg ion -ahsm and na t iona l i s m as the r i se o f Eu ro pe an iden t i t i e s , d iaspor ic ne tworks , co sm op ol i t an pa t r io t i sm , e tc . ) . Th us we see a p ro l i fe r a t ion o f sca leson which eco no mi c and soc ia l po l icy a re pu rs ue d as well a s com pet ing projects to reunify interscalar ar t iculat ion around a new pr imary level -whether this be the industr ia l d is t r ic t , the c i ty-region, wider subnat ional

regi ons, cro ss- bor der regions , th e t r i ads or th e global level .

F ina l ly, the KWNS mixed economy model emerged in response tomar ke t fa i lu re and em ph as iz ed the s ta te ' s ro le in cor rec t i ng fo r ma r ke tfa i lures . The s ta te ' s role in this regard nonetheless ref lected the Fordis to rga n iza t iona l pa ra d igm . Large- sca le , top- dow n h ie ra rc h ica l s t ruc tu res bas ed on th e belie f in eco no mi es of scale sp re ad easily to the sta te 's economic and wel fa re ro les as the p r im ar y m ea ns to cor rec t fo r ma rk e tfa i lure . This was an era of big business , b ig unions and big governmentand 'o rg an iz ed cap i ta l i sm ' even in the m or e l ibe ra l fo rm s of At l an t icFord i s t r eg imes . Th is mode l was undermined by var ious fac to rs . Theseinclude: growing pol i t ical res is tance to taxat ion and the emergings tagna t ionin f la t ion ; c r i s i s in pos twar compromises be tween indus t r i a lcapi ta l and organized labour; new economic and social condi t ions andat tendant problems that cannot be governed easi ly, i f a t a l l , through cont inu ing re l i ance on top-down s ta te p lann ing and /or s imple marke t fo rces ;g rowing re se n t me nt abou t the bur eau cr a t i sm , in flexib il i ty and cos t o f thewelf are s ta te as i t co nt in ue d to ex pa nd du ri ng the la te 1960s and 1970s;and th e r is e of n e w social mov em en ts th at did not f i t eas i ly int o the

pos tw ar co mp ro mi se ( see chap t e r 2 ) . The se p ro b le ms of th e mix edec on om y mod el ind ica ted tha t p lan n ing and o ther fo r ms of to p- do wnin te rv en t ion by the Key ne s i an wel fa r e s ta te ha d the i r ow n d i s t inc t ivecr is is- tendencies and seemed to be increasingly prone to fa i lure . After a t t empts to re inv igora te th i s s t a te fo rm th rough increased in te rven t ion



2 3 6 F ro m M i x e d E c o n om y t o M e t a g o v e r n a n c e

4. Governance Failure?

Recogniz ing these major sh i f t s in modes o f governance compared to theAtlant ic Fordis t era , wi th i ts emphasis on the mixed economy, should notlead us to neglect th e possibi l i ty of gove rn anc e fa i lure . Se lf-or ganizat i onthr ough ne t wo rk s ne ed no t p rove mo re e ffi cien t p roc edur a l ly thanma rk e t s and s ta tes as mea ns o f ec on om ic o r po l i t i ca l coor d ina t io n mec hanism; and i t i s by no means guaran teed to p roduce more adequa te ou tcomes . A commitment to con t inu ing de l ibe ra t ion and negot ia t ion doesno t exc lude even tua l governance fa i lu re . The c r i t e r ion fo r such fa i lu remust nonetheless differ f rom that for markets or the s ta te . There is no

p re -g iven fo rmal maximand or re fe rence po in t to judge governancesuccess , as there is wi th monet ized prof i ts in the economy and/or the( imaginary) per fec t marke t ou tcome. Nor i s the re a con t ingen t subs tant ive cr i ter ion - the real izat ion of specif ic pol i t ical object ives connectedto the ( ima gined ) pub l ic in te res t - a s the re i s wi th imp er a t i ve coor d inat ion by the s ta te . The pr imary point of governance is that goals wil l bemodif ied in and through ongoing negot ia t ion and ref lect ion. This suggests that governance faUure may comprise fa i lure to redef ine object ivesin the face of cont inuing disagreement about whether they are s t i l l val idfor the var ious par tners .

on various scales, f lanked in some cases by efforts to extend participat ion in decis ion-making, appeared to have fa i led in the 1970s, there wereinsis tent cal ls f rom l iberals and neol iberals for 'more market , less s ta te ' .Ye t , a f t e r a few years ' exper imenta t ion wi th neo l ibera l i sm, marke t fo rcesalso seemed to be less than perfect in several areas. In particular, whilethe Keynesian welfare forms of intervent ion may have been rol led back,

pr iv at iz at io n, de re gu lat io n and l iber al iza t ion ha ve also bee n se en torequ i re ne w or en ha nc ed fo rms of regu la t ion , re r egu l a t io n and com pet i t ion po licy. Th i s has con t r i bu t ed to the mo re gener a l t r en d tow ard sincreasing re l iance on self -organizat ion. Thus, despi te the survival of market rhetor ic in neol iberal regimes, the most s ignif icant t rend in these ,as wel l as in post -Fo rdis t reg ime s whe re oth er types of go ve rn an ce pred o m i n a t e , i s t o w a r d s n e t w o r k i n g , g o v e r n a n c e , p a r t n e r s h i p a n d o t h e r fo rm s of se l f -o rga n iza t ion as the p r ima ry mea ns o f cor r ec t in g fo r ma rk e tfa i lure . This is ref lected, as we have seen, in the new 'network paradigm' ,wi th i t s empha s i s on par tner sh ip , r egu la ted se l f - regu la t ion , th e in formalsector, th e faci l i ta t ion of sel f - organ izat io n and dec ent ral ize d conte xt-s teer ing. Thus we can observe a tendent ia l shif t f rom imperat ive coordina t ion by the sovere ign s ta te to an emphas i s on in te rdependence ,d iv i s ions o f knowledge , re f lex ive negot ia t ion and mutua l l ea rn ing .



F r om M i x e d E c o n o m y t o M e t a g o v e r n a n c e 2 3 7

B u t o n e can a l so app ly p r oc ed ur a l a nd subs t an t iv e c r i t e r i a to l i e te ra r-chy an d assess wl ie t i i e r i t p rod uc es mo re e ff ic ient lon g- t e r m ou tc om esth an ma rk e t a l loca t ion and m or e effect ive lon g- t e rm ou tco mes in rea l i zing co l lec t ive goa l s than impera t ive coord ina t ion by s ta tes . Th is requ i rescomparat ive evaluat ion of a l l three modes of coordinat ion in terms of a l lthree of their respect ive ra t ional i t ies . A very general c la im about thesuper io r i ty o f ne t wo rks has be en pr opo sed by Cas te ll s , th e theor i s t o f in format iona l cap i ta l i sm and the ne twork soc ie ty. He sugges t s tha t thet rad i t iona l weakness o f soc ia l ne tworks i s tha t ' t hey have cons iderab ledifficulty in coordinating functions, in focusing resources on specific goals,in m an ag in g th e comp lex i ty of a giv en task be yo nd a ce r t a i n s ize of th ene tw or k ' (2000a: 15) . This is why, he cont i nues , th ey wer e l iable to be out pe r formed by organ iza t ions tha t re l i ed on impera t ive coord ina t ion tomob ihz e res ourc es a r ou nd cen t ra l ly def ined goa l s an d pu rs ue d th emthro ugh ra t iona l ized , ve r t i ca l cha ins o f c om m a nd an d con t ro l . Th is d i sadva n tag e has no w be en defin i tive ly ove rc ome , how eve r, th an ks to thespread of the new ICTs . For these enab le ne tworks to compress t ime andspac e, to ne go t ia te an d adjust th eir goals in real t im e and to dece ntr al i zerespons ib i l i ty fo r the i r execu t ion . Th is in tu rn enab l es ne t wo rks to sh aredec i s ion-making and to decen t re per formance (Cas te l l s 2000a : 15) . One

mi ght wel l que st i on this ce leb ra t io n of th e mir acle of IC T- en abl ed globalne twork ing in the l igh t o f the con t inued impor tance o f ve r t i ca l d iv i s ionsof economic power and authori ty as wel l as of hor izontal divis ions of l a b o u r i n e c o n o m i c n e t w o r k s a n d t h e n e t w o r k e d s t a t e . B u t t h e r e c a n

be l i t t le doubt that such marvel l ing a t the performat ive power of sel f -organizat ion is widely shared. This can be seen in the increasing interes tin he t e r a r chy ( in a ll i t s fo rms) as a me ch an is m to re duc e t ra nsa c t i on cos t si n t h e e c o n o m y i n c a s e s o f b o u n d e d ra t i on a l it y, c o m p l e x i n t e r d e p e n d e n c ean d asset specificity. I t is also ref lec ted in the state 's inc re as in g in te re st in

he te ra rc hy ' s po te n t i a l fo r en ha nc in g i ts capac i ty to secur e po l i t i ca l ob ject ives by shar ing power with forces beyond i t and/or delegat ing respon-sibiht ies for specif ic object ives to par tnerships (or other heterarchica r rangements ) . At the same t ime , however, we should no t ignore the cont inu ing adva n tag es o f the ma rk e t and top -d own c om m an d as me an s o f c o o r d i n a t i o n . A f t e r al l, 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 dma rk et and cont in ue to re ly on i t a t af l po in ts in the ir ec on om ic act ivi t ies ; and economic networks typical ly involve the sel f -organizat ion of o rgan iza t ions ra th er th an of o th er wi se i so la ted ind iv idua ls . A nd , pace

Nozick 's anarcho-capi ta l is t fantas ies , we have yet to see the s ta te dissolveitself in to a seri es of free-f loating, self -or gani zing ne tw or ks wi th no ove ra rch ing coord ina t ion and no prese rva t ion o f the r igh t to recen t ra l i zecontrol i f the op er at io ns and /o r resul ts of ne tw or ks do no t fulfi l the e xpe ctat ions of s ta te managers , affected interes ts or publ ic opinion.






s ta te in i ts in tegral sense, unders tood in t l i i s context as 'government +g o v e r n a n c e ' .

Th er e are three dime ns ion s to this : (1) ter r i t or i a l scale ; (2) te mp or al -hies ; an d (3) the tec hni cal divis ion of la bo ur and i ts re l a t i on to the s ta te ' sgenera l po l i t i ca l ro le . F i r s t , a s bo th governance and governance mechanisms exist on different scales (indeed one of their functions is to bridgescales) , success a t one scale may wel l depend on what occurs on other sca les . Second , co or d in a t i on mec han ism s may a l so have d i ffe ren t t em

pora l hor izons . O ne func t ion o f go ve rn an ce (as o f qu an go s and cor pora t i s t a r rangements beforehand) i s to enab le dec i s ions wi th long- te rmimplicat ions to be divorced from short - term pol i t ical (especial ly e lectoral) calculat ions . Corporat ism once played this role , but the re la t ivizat ion o f sca le has worked to dena t iona l ize and d i s incorpora te p roducer g ro ups and to wid en the rang e of ' s t ake hol der s ' wh ose par t i c ip a t io nmi ght be re levan t . B ut dis ju nct io ns ma y s t il l ar ise bet we en th e t e m pora l i t i e s o f d i ffe ren t governance and government mechanisms and th i s

poses p rob lems as to the ab i l i ty o f the s ta te to address in te r tempora l p rob lems and coord ina te them - espec ia l ly as these p rob lems a r i sewithin the s ta te apparatus i tse l f as wel l as in other spheres . Third,a l though var ious governance mechanisms may acqui re spec i f i c t echno-economic, pol i t ical and/or ideological funct ions , the s ta te typical ly monitors the ir effects on i ts ow n cap aci ty to secu re social cohes ion in div idedsociet ies . In this sense s ta tes a t tempt to re ta in control over the a l locat ion of these different funct ions f rom the viewpoint of i t s general roleand the con t inu ing pr im ac y of po l i t i c s . The y res e rv e to themse lves t her ight to ope n, c lose , juggle a nd re ar t ic ul ate go ve rn an ce f ro m th e view

point not only of i ts technical functions but also from the viewpoint of par t isan and overal l pol i t ical advantage.

Th e thir d set of con str a in ts is ro ot ed in the na tu re of go ve rn an ce asself -o rganiza t ion. Firs t , on e of th e causes for go ve rn an ce fa i lure is th eovers impli f icat ion of the condi t ions of act ion and/or def ic ient knowledgeab ou t causa l con nec t i ons a ffec t ing the ob jec t o f gov ern anc e . Th is i s e spec ia lly p r ob le ma t i c wh en th i s ob jec t i s an inhe ren t ly uns t ru c tu re d bu tcom ple x syst em, suc h as the ins er t ion of th e local in to the glo bal econo my.Indeed , th i s l eads to the more genera l ' governab i l i ty ' p rob lem, namely,the ques t io n of wh eth er th e object of gov er nan ce could ever be manageab le , eve n wi th ade qua te kno wle dge (M ayn tz 1993; Malpa s andWickham 1995) . Second , coord ina t ion p rob lems of ten a r i se on one o r mo re o f the in te r person a l , in te rorg an iza t iona l and in te r sy s temic l eve l s.These three levels are of ten re la ted in complex ways. Thus interorganiza t iona l nego t ia t ion o f ten depe nds on in te rpe rso na l t rus t ; and dece n t r edin te r sys temic s tee r ing invo lves the represen ta t ion o f sys tem log icst h r o u g h i n t e r o rg a n i z a t i o n a l a n d / o r i n t e r p e r s o n a l c o m m u n i c a t i o n . T h i r d ,





F ro m M i x e d E c o no m y t o M e t a g o v e r n a n c e 2 4 1

kn ow le dg e - or appr opr ia te subdi vis io ns thereof ) an d/or the ref lexivereo rd er i ng of re la t i ons amo ng ma rk e t s by modi fy ing the i r opera t io n andar t i cu la t ion . Mar ke t agen ts o f ten reso r t to mark e t redes ign in re sp ons eto fa i lure an d/ or hi re the servic es of tho se wh o cla im so me expe r t is e int h is 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 ns u l t a n t s , h u m a n r e l a t i o n s e x p e r t s , c o r p o r a t e l a w y e r s a n d a c c o u n t a n t s .M o r e general ly, th er e ha s lon g be en inte res t in issues of th e ins t i tu t ionalredes ign of the marke t mechanism, i t s embeddedness in non-marke tmec hani sms , and th e con di t ion s fo r the m ax im um form al ra t iona l i ty o f ma rk e t fo rces . Th er e a r e a l so ma rk e t s in mark e t s . Th is ca n l ead to' r eg ime shopping ' , compet i t ive deregu la to ry ' r aces to the bo t tom' o r, incer ta i n condi t ions , ' ra ces to the to p ' to pr ov id e the mo st favou rab lecondi t ions fo r s t r ong com pet i t ion ( see chap te r 3 ) . More ove r, bec aus ema rk e t s func t ion in the sha dow of h ie r a rc hy an d / or he te r a rchy , a t t em ptsa re a l so ma de to modi fy mar ke t s , the i r ins t i t u t iona l supp or t s and the i r agen ts to improve the i r e ff i c iency and /or compensa te fo r marke t fa i lu resand inadequac ies .

Sec ond , th e r e i s metao rga n iza t ion . Th is invo lves th e re f lex ive redes ignof o rgan iza t ions , the c rea t ion o f in te rmedia t ing o rgan iza t ions , thereorder ing of in te r-o rgan iza t iona l re la t ions , and the management o f o rgan iza t iona l eco log ies ( in o ther words , the o rgan iza t ion o f the condit ions o f o rgan iza t iona l evo lu t ion in condi t ions where many organ iza t ionscoex is t , compete , coopera te and co-evo lve) . Ref lex ive o rgan iza t iona lm a n a g e r s c a n u n d e r t a k e s u c h m e t a o rg a n i z a t i o n a l f u n c t i o n s t h e m s e l v e s( f or 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 rg a n i z a t i o n a l i n n o v at ion) and / or tu rn to a l l eged expe r t s such as cons t i tu t i ona l l awyers , pub l iccho ice econom is t s , theor i s t s o f pub l ic admi n is t ra t io n , th ink- tanks , adv ocate s of ref lexive pl an ni ng , special is ts in pol i cy ev al ua t i on , e tc . This isre f lec ted in the con t inu ing redes ign , resca l ing , and adap ta t ion , somet imesm o r e r u p t u r a l , s o m e t i m e s m o r e c o n t i n u o u s , i n t h e s t at e a p p a r a t u s a n dthe ma nn er in whi ch i t i s emb ed de d wi th in the wider po l i t i ca l sys tem.

Thi rd , the re i s met ahe te r a rc hy. Th i s invo l ves the o rga n iza t ion o f thecond i t io ns o f se l f -o r gan iza t ion by redef in ing the f ram ew or k fo r he te r a rchy or ref lexive sel f - organi zat ion . I t has so me ti me s be en cal led met agovernance ( including, i t must be admit ted, in my own work) - a termthat is bet ter reserved for what Dunsire (1996) cal ls col l ibrat ion and is best in te rp re te d as the um br el la co nc ep t for the rede sign of th e re l at ionsh i p a m on g d i ffe ren t mo de s o f gove rna nce . Th i s can ra ng e f rom pr ov id ing oppor tun i t i es fo r spon taneous soc iab ih ty (Fukuyama 1995; seea l so Pu tn a m 2000) to in t r oduc i ng innova t ion s to fu r ther ' ins t i tu t iona lth ickn ess ' (A mi n and Thr i f t 1995) .

Fou r th , and f ina l ly, th e r e i s me tag ove rn an ce . Th is invo lves rea r t i culat ing and col l ibrat ing different modes of governance. The key issues for




those invo lved in metagovernance a re ' ( a ) how to cope wi th o ther ac to rs 'se l f - refer ent ia l i ty ; an d (b) ho w to co pe wi th thei r own se lf - refere nt ia l i ty '(Duns i re 1996: 320) . Metagovernance invo lves managing the complexi ty, p lur al i t y and tangl ed hie rar chi es foun d in prev ai l i ng mod es of coordinat ion. I t i s the organizat ion of the condi t ions for governance andinvolves the judicious mixing of market , h ierarchy and networks toach ieve th e bes t poss ib le ou t co me s f r om th e v iewpoin t o f those en gage din me tag ove rn an ce . fn th i s sense i t a l so me an s the o rgan iza t ion o f thecondi t ions of governance in terms of their s t ructural ly inscr ibed s t rategic select ivi ty, that is, in ter ms of the ir a sym met r ic al pr ivi leging of s om eou tc om es over others . Unf or t una tel y, s ince ever y pract ice is pr on e tofai lure , me ta go ve rn an ce and col l ib rat i on ar e a lso l ikely to fa il . Thisimpl ies tha t the re i s no Ar ch im ed ea n po in t f rom which gov ern anc e o r co l l ib ra t ion can be guaran teed to succeed .

M e t a g o v e r n a n c e s h o u l d n o t b e c o n f u s e d w i t h s o m e s u p e r o r d i n a t eleve l o f government in con t ro l o f a l l governance a r rangements nor wi ththe impos i t io n o f a s ingle , a l l -pur pose mo de of gove rnan ce . Ra th er , i tinvolv es a con tai nin g pro ces s of 'm ud dl in g th ro ug h ' . I t involve s def iningne w bou nda ry -s pan nin g ro les and func t ions , c rea t ing l inkage dev ices ,sponsor ing new organ iza t ion s , iden t i fy ing app ro pr i a te l ead o rgan iz a t ionsto coord ina te o ther pa r tners , des ign ing ins t i tu t ions and genera t ingvis ions to faci l i ta te sel f -organizat ion in different f ie lds . I t a lso involves

p rov id ing mech ani sms fo r co l lec t ive feedback a nd lea rn ing ab ou t thefunc t iona l l inkages and the mate r ia l in te rdependenc ies among d i ffe ren ts i t es and spheres o f ac t ion , and encourag ing a re la t ive coherence amongdiverse object ives , spat ia l and temporal hor izons, act ions and outcomesof governance a r rangements . I t invo lves the shap ing of the con tex twi th in which these a r rangements can be fo rged ra ther than deve lop ingspecific strategies and init iatives for them.

Sta t es p lay a maj or and incr eas i ng ro le in me ta go ve rn an ce . Th ey prov ide the g round ru les fo r governance and the regu la to ry o rder inand th rough which governance par tners can pursue the i r a ims ; ensurethe compat ib i l i ty o r coherence o f d i ffe ren t governance mechanisms andregimes; act as the pr imary organizer of the dia logue among pol icycom mun i t i es ; dep loy a re la t ive mon op ol y o f o rgan iza t io na l in te l l igenceand informat ion with which to shape cogni t ive expectat ions; serve as a'c our t of ap pe al ' for disputes ar is ing wit hin and ove r go ve rn an ce ; seek to reba lance power d i ffe ren t ia l s by s t reng then ing weaker fo rces o r

sys tems in the in te res t s o f sys tem in tegra t ion and /or soc ia l cohes ion ; t ryto mod ify the sel f -un der s ta ndin g of ident i t ies , s t r a tegi c capa ci t ie s andinte res ts of indiv idual a nd col lect ive actor s in different s t ra tegic contex ts ,and hence a l ter their impl icat ions for preferred s t ra tegies and tact ics ;and also assu me pol i t ical resp onsi bi l i t y in th e ev ent of go ve rn an ce




6. Metagovernance Failure

Recogniz ing poss ib le con t r ibu t ions o f re f lex ive metagovernance to econo mi c an d social co or di na t i on is no gu ar an te e of success . I t i s cer ta i nlynot a purely technical mat ter that can be resolved by exper ts in organizat ional design or publ ic adminis t ra t ion. For a l l the par t icular act ivi t iesand funct ion s of the s ta te a re co ndu cte d un de r th e pr im acy of th e pol i tical owing to i ts ul t im at e respons ibi l i t y fo r ma in tai nin g social cohes ion.This cons t r a in t p lagues the l ibe ra l p resc r ip t i on o f an a rms- le ng th re lat ionsh ip be tween the marke t and the n igh twatchman s ta te - s ince s ta tesa r e ra r e ly s t ron g en ou gh to res i s t p re ssur es to in te rv ene whe n an t ic i

pated polit ical advantage is at stake or i t needs to respond to socialunres t . Mo r e general ly, we can safely assum e that , if every mode of governance fails, then so will metagovernance! This is especial ly l ikely wherethe ob jec t s o f governance and metagovernance a re compl ica ted andi n t e r c o n n e c t e d . "

fa i lu re . Th is emerg ing ro le means tha t ne twork ing , nego t ia t ion , no i sereduct ion and negat ive as wel l as posi t ive coordinat ion occur ' inth e sh ad ow of hie rar chy ' (Schar pf 1994: 40) . I t a lso sugge sts th e ne edfor a lm os t pe rm an en t ins t i tu t iona l and organ iza t io na l innov a t ion tomain ta in the very poss ib il i ty (howev er rem ote ) o f sus ta ined ec ono micg r o w t h .

Thu s me ta go ve rn an ce does no t e l imin a te o ther mo de s o f coor d inat ion. Ma rke t s , h ie r a rch ies and he t e ra rch ies s ti ll ex i st ; bu t they ope ra te ina con tex t o f ' nego t ia te d dec i s ion-m aking ' . So , on the one han d , ma rk e tcom pet i t i on wil l be ba lan ced by co op er at io n an d th e invis ible ha nd will

be combined with a vis ible handshake. On the other hand, the s ta te isno longer the sovere ign au thor i ty. I t becomes bu t one par t i c ipan t amongothers in the plural is t ic guidance system and contr ibutes i ts own dist inc t ive res ourc es to the negot ia t i on p rocess . As the range of ne t wor ks ,

pa r tnersh ips and o ther mode ls o f economic and po l i t i ca l governanceexpand, off ic ia l apparatuses remain a t best primus inter pares. F o r,a l th ough publ ic mo ne y and law wou ld s ti ll be im po r t an t in unde rp inn ingthe i r ope ra t ion , o ther res our ces ( such as p r iv a te mone y, kno wl ed ge or exper t ise) would a lso be cr i t ical to their success . The s ta te ' s involvementwould become less hierarchical , less centra l ized and less dir igis te in charac te r. Th e exchan ge of in f orm at i on and mora l suas ion would b ec om e keysource s of legi t ima t ion and th e s ta t e ' s inf luence wo ul d dep end as mu chon its role as a prime source and mediator of collective intell igence ason i t s co mm an d over econo mic resource s o r l eg i t im ate coerc ion (Wi l lke1992).





From M ix ed Economy to Me tagove rnance 2 45


The arguments in this chapter began with general ref lect ions on there cur ren ce o f l ibe ra li sm, corpor a t i sm a nd s ta t i sm as me an s o f gove rn ingthe complex mate r ia l , soc ia l and tempora l in te rdependences tha t charac te r ize the a lways-prob lemat ic course o f cap i ta l accumula t ion . I thensupplemented th i s account wi th genera l re f lec t ions on the recur rence o f fa i lu res in ma rk e t s , con cer ta t ion an d p lan n ing as me an s o f gover n ingthese same interdependences . On this basis I descr ibed the mutual const i t ut ion of th e objects , subjects and moda l i t i es of go ve rn an ce of At la nt icFor dism on all four dime nsi ons of th e K W N S an d sket ched thei r cr is is-tendencies and emerging fa i lures . I ident i f ied the increased sal ience indisc ours e and in pra ct i ce of var iou s for ms of sel f -or gani zat i on in the governa nce o f the g loba liz ing , know led ge- bas ed ec ono my . Ra th er th an jo inin the cur ren t ce lebra t ion o f governance as a super io r mode of coord ina t i on to ma rk e t s and the s ta te , how ever , I o ffe r ed a con t ra r ian a ccou ntof the genera l tend enc ie s to gove rn anc e fa i lure . I re i nfo rce d this acc oun t

by not ing once again the contradict ions and di lemmas inherent in the

capi ta l re la t ion and the l imita t ions to effect ive s ta te intervent ion owingto th e pr im ac y of th e pol i t ical in the ex ercis e of s ta te powe r. In con tr as tto p reced ing chap te rs , however, I have no t fo l lowed th i s genera l ana lysis wi th more detai led work on specif ic forms of governance and governan ce fa i lure . Th e ma in rea son for this is tha t th er e can be no gen era l

c t iurning and inst i tu t ional turnover. Nonetheless , the usual pol icy cycle of mar ke t , gov ern anc e and s ta te was re pe a t ed in cen t ra l go ve rn me nt po l ic ies for urban regenerat ion and many other pol ic ies .

Thir d, i t requi re s sel f - ref lexive ' i ron y ' in the sense tha t th e re lev antsocial forces mu st recog niz e the l ike l ih ood of fa i l ure but proc ee d as i f success were possible . The supreme i rony in this context is that the needfor i rony holds not only for individual a t tempts a t governance using indiv idua l governance mechanisms , bu t a l so fo r the p rac t i ce o f metagovern 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 o f t e n ,how eve r, we f ind cynic ism and fa ta l ism. Cyn ics ant i c ip ate fa i lu re bu t seek to fu r ther the i r ow n in te res t s i f an d w he n fa i lu re occurs ( th e behav iou r of i ts d i rect ors as E n r o n col la psed is only the most egre gio us re ce ntexam ple o f such beh av i our ) . Fa ta li s t s an t ic i pa t e fa i lu re and there for eei ther do nothing or carry on regardless ( for fur ther discussion of requis i te ref lexivi ty, requis i te var ie ty and requis i te i rony, see Jessop2002b) . Al l th r ee d ime ns io ns o f dea l ing wi th the p ro spe c t s o f me ta gover nan ce fa i lure highl ight on ce aga in, of cou rs e , th e im po rt an ce of agenc yfor the course of economic, pol i t ical and social development .



24 6 F rom M ixe d Economy to Me tagov e rnan ce

theory o f governance because the re i s no genera l ob jec t o f governance .This contras ts wi th the possibi l i t ies of construct ing a general theory of

cap ita l acc um ul at io n on th e basis of th e specificit ies of th e capital relat ion ( for fur ther discussion of this poi nt , see Jess op 1995) . Non eth ele ss ,the analyses presented in ear l ier chapters should suff ice to support theo v e r a l l a rg u m e n t .

To c oncl ude, whi ls t reco gniz ing the inevi tab i l i ty of fa i lure , we sh ouldalso note that there is much that remains cont ingent . This includes themodal i t ies , s i tes , forms, temporal i t ies , spat ia l i t ies and effects of fa i lure;and, in addi t ion, the capaci t ies for recuperat ing or responding to fa i lure .Interes t in sel f -organizat ion has grown in recent years in response to the

experience of market and s ta te fa i lure and in response to the increasingco mp le xi ty of th e social world. But, as I ha ve also a rgu ed, self-reflexiveself-organizat ion i tse l f i s prone to fa i lure . There are different ways of coping with the inevi tabi l i ty of fa i lure ranging from small -scale incrementa l ad jus tments based on t r i a l -and-e r ror l ea rn ing to comprehens ivea t t em pts a t cons t i tu t iona l and ins t i tu t iona l redes ig n . Inde ed , wi t hou tl e a r n i n g and forgetting, social or der , such as i t is , wo ul d be imp oss ible .F ina lly, in addres s ing the four ma in fo rm s of me ta go ve rn an ce ( conc ern edrespec t ive ly wi th the re f lex ive reorgan iza t ion o f marke t s , h ie ra rch ies and

networks and with the col l ibrat ion of these different modes of governance) , I have emphas ized th ree genera l p r inc ip les o f governance in theface of complexi ty: these are the pr inciples of requis i te ref lexivi ty,requisite variety and requisite irony. How these are applied, if at afl , inthe regu lat ion an d go ve rn an ce of capi ta l acc um ula t io n is an issue s ti ll to

be p roper ly exp lored .



7

TowardsSchumpeterian Workfare

Postnational Regimes?

This chap te r d raws toge the r the ma in th r ead s o f a r gum ent s spr ead over th e las t f ive cha pt er s . I t suggests that wh at is ten den t ia l l y re pl aci ng th eK e y n e s i a n w e lf a r e n a t i o n a l s t a t e i s a S c h u m p e t e r i a n w o r k f a r e p os t -nat ional regime. I f i rs t d iscuss this as an ideal- type and then, as with theKWNS, propose some var iant forms. I t i s not my intent ion to offer anal ternat ive to the SWPR as i t i s out l ined here as a key element in them o d e of regu l a t ion o f co n t em po ra ry cap i ta l i sm, l e t a l on e to p r op os e adetai led blu ep ri nt for an alt er nat ive to capita lism as a mo de of pr oduc t ion . The re a re th r ee re aso ns fo r th i s re t i cence . F i r s t , th i s s tu dy has

be en ma in ly co nc er ne d to p ro v id e the theore t i ca l bas i s fo r a rad ic a l reexa min a t i on o f the dy nam ic o f At l an t i c For d i s m and fo r an exp lora t ionof pr ob ab le form s of ec on om ic and social pol icy in th e pos t-F ord is t per iod. Suc h a l imi ted s tudy can no t pr ov id e th e basis for ske tchi ng anal ternat ive, which would need to embrace the ent i re world market andl i feworld an d thus look wel l be yo nd the confines of the spa t i o- te mp or almat r ic es wi t h whi ch th i s wo rk i s conce rne d . Second , a l th oug h I hav ehinted a t the ecological contradict ions of capi ta l ism, I have not real lyaddres sed the se con t ra d ic t i ons eve n fo r th e eco nom ic spaces o f At l an t icFordism, le t a lone for the world as a whole . Any al ternat ive would needto in te gra t e th e po l i t i ca l ec on om y of cap i ta l i sm in to a m o r e enco mpa ss i ngcr i t iq ue of i ts pol i t ical ecology. T he sam e po in t nee ds to be m a d e re ga rding the mil i tary dimensions of s ta te power and i ts re la t ionship to geo

po li t i cs an d geo-e conom ics . An d , th i rd , g ive n my re ma rk s on gov er nan cefai lure and the importance of col lect ive ref lexivi ty and romant ic i rony,any a l t e r na t ive to the g loba l iz ing , kno wle dge -ba sed ec on om y or theSW PR , le t a lone capi ta l ism as a wh ole , woul d ha ve to be de ve lo pe d ande la bor a te d co l lec tive ly and democr a t ica l ly and no t p r on ou nc ed ex cathe-



24 8 Towards Schu mpe ter ian W or kf ar e Pos tna t iona l Regimes?

1. Trends and Claims

Chapter 2 presented a s tyl ized account of the form of s ta te that develop ed in th e spa ce of At la nt ic Fo rdi sm. Th e next four cha pte rs eachel ab or at ed emerg ing t rend s in ad va nc ed capi ta l ism an d i ts s ta te formrelat ive to on e or ano the r dim en si on of the KW N S . Specif ical ly, theyident i f ied:

• a t en den t ia l sh i f t f r om Ke yn es ian fu ll em pl oy me nt tow ard sS c h u m p e t e r i a n e c o n o m i c i n t e r v e n t i o n , w h i c h I s u m m a r i z e d i n t e r m sof th e r ise of a specif ical ly S ch um pe te r i an vers ion of th e com pe t i t ions t a t e ;

• a te nd en t i a l shift f r om a welfar is t m o d e of soci al re pr od uc t i ontowards a workfar is t mode, def ined in terms of the increasing subor di na t i on of social pol icy and col lec t ive co ns um pt io n to th e discurs ive ly cons t ruc ted needs o f the economy;

• a te nd en ti al shift fr om th e pr iih ac y of th e na ti on al scale in det ermin i ng the eco nom ic and soc ial func t ions o f the ex t ra - eco nom ictowards a pos tna t iona l re la t iv iza t ion o f sca le ; and

• a te nd en t i a l shif t f r om th e pr ima cy of s ta te inter ven t ion to co mp ensate for market fa i lures in a mixed economy to an emphasis on

pub l ic -pr iva te par tnersh ips and o ther se l f -o rgan iz ing governanceme ch an is ms to co mp en sa te for bot h s ta te and mar ke t fa i lures in an e t w o r k e d e c o n o m y.

So fa r these t rends have l a rge ly been cons idered separa te ly. Th is modeof p r es en t a t i on was ad opt ed to s impl i fy wha t would o the rw is e ha ve

become a very unwie ldy ana lys i s in which every th ing was be ing re la tedto every thi ng else and, mo re ov er , a t th e sa me t ime. I t ha s a lso en ab le dme to e labora te some of the more nove l concep ts and theore t i ca l a rgume nt s a t the mos t appr opr ia t e po in t in the overa l l deve lopm ent o f the book ra ther tha n a t the i r f i r s t me nt io n in ano t her con tex t . Mor eov er , p resen ta t iona l concerns apar t , i t i s wor th t rea t ing the four t rends separate ly be ca us e each of the t r en ds has i ts ow n causa l dyna mi c and has a lsode ve l op ed in qu i te va r i ed ways in the d i ffe ren t At l an t ic For d i s t soc ia lfo rma t ions . O nly a f te r we ha ve cons ider ed the un ev en de ve lo pm en t o f the four t rends individual ly could we hope to explore how they are com bined, i f a t a l l , to create any overal l t rend towards a SWPR in any givensoc ia l fo rmat ion . Th is i s pa r t i cu la r ly impor tan t because the cur ren tre la t ivi zat i on of scale a lso affects th e scalar ar t i cula t ion of ec on om ic

dra by an inve te r a te theo r i s t . I ho pe tha t the mode s t re ma rk s con t a in edin this work wil l nonetheless contr ibute to the search for a l ternat ives .



Towards Sch um peter ian W or kf ar e Pos tna t iona l Regimes? 2 4 9

and social pol icy in different ways and poses major problems in their

g o v e r n a n c e .Final ly, wh et he r ta ke n indiv idua l ly or togeth er, these cha nge s are most

cer ta inly c losely l inked to the search for solut ions to the object ive cr is is-t enden c ies an d perc e ive d cr i ses o f At l an t ic For d i sm. Thus the t rans i t ionin advanced capi ta l is t economies - in the context of the overal l g lobald iv i s ion of l abour and the wor ld marke t - f rom Ford i sm to pos t -Ford i smis an important par t of the overaU context for the move from somevers ion of th e K W N S to so me ver s i on of th e S W P R. Al th ou gh th ereasons for this shif t are pr imari ly grounded in responses to specif iceconomic and soc ia l p rob lems , such responses a re a lways po l i t i ca l lymedia ted . Thus na t iona l va r ia t ions in the pace , d i rec t ion and emerg ing

pa t te rn s of th e SW P R are of ten ro ot ed in their res pec t ive ini t ia l s tar t ing points , d i fferences in mod es of gr ow th an d inse r t ion into the glob aleconomy, and in the ins t i tu t ional specif ic i t ies and dis t inct ive balance of forces . This means that , even i f cer ta in general tendencies can be ident if ied and gr ou nd ed in the logic of co nt em po ra ry capi ta l ism , this does not

jus t i fy a s imple , 'one-s ize-f i ts-a l l ' a cco unt of the r es t ruc tur ing of th e capi ta li s t type o f s t a te . Ins tead , p ro pe r com par a t i ve ana lyses a re req u i r edto comprehend and explain var ia t ions as wel l as s imilar i t ies across theadv anc ed cap i ta l i s t econ omie s . Such s tud ies hav e no t bee n un de r t ak entn the con tex t o f th i s pa r t i cu la r work because i t has been concernedto iden t i fy the more abs t rac t t endenc ies assoc ia ted wi th the eco log ica ldominance o f the cap i ta l r e la t ion in an inc reas ing ly in tegra ted wor ldm a r k e t . T h e a p p r o a c h t o 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 i n t h i s w o r k exc lud es abs olut ely any cla im tha t th e logic of capi ta l accu mu la t io nso me ho w de te rmi nes every aspec t o f soc ia l fo rma t ions . In s tea d , eco log ica l do mi na nc e me an s tha t the course o f cap i ta l accumu la t ion c rea tesmore p rob lems fo r o ther ins t i tu t iona l o rders and the l i f ewor ld than they

can cause for i t . How these ins t i tu t ional orders and the l i feworld adaptto these problems cannot be determined at th is level of analysis . Thisrequ i res a mo re de ta i l e d ana lys i s bo th o f the d i s t inc t ive pa th -d ep en de ntan d s t ra teg ical ly select iv e ch ar ac te r of th es e ins t i tu t ion al orde rs an d of th e chan ging ba l an ce o f fo rces o rgan i zed a ro un d d i ffe ren t res pons es toth e log ic o f cap i ta l acc umul a t io n .

The broad empi r ica l t r ends p resen ted in the p reced ing chap te rs havea wide range of causes , and each t rend should be seen as ' the complexsynthes i s o f mul t ip le de te r mi na t ion s ' (Ma rx 1973: 100) . I t wou ld ce rta inly be wrong to t reat any t rend as a s ingular causal mechanism andneglect their essent ia l ly descr ipt ive , synthet ic and general ized nature .^This is wh y I ha ve discussed som e of th e mo re abstract ten de nc ies a ndcount e r- t enden c ies tha t have co mbi ned to p r od uc e these t rends . For thesame reason I cons idered poss ib le empi r ica l counte r t rends tha t migh t



2 5 0 Towa rds Schum peter ian W or kf ar e Pos tna tiona l Regimes?

2. The Ideal-Topical SWPR

The ideal- typical SWPR can be descr ibed, a t the r isk of some repet i t ion,as follows (see also table 7.1). First , regarding its distinctive role in securing the condi t ions fo r the improbab le con t inua t ion o f p rof i t ab le p r iva te busines s f rom the vie wpo int of par t ic ula r capi ta ls an d capi ta l in gen era l ,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 ar a s i t t r i es t o p r o m o t e p e r m a n e n tinn ova t io n and f l ex ib i l i ty in re la t ive ly ope n econ omi es by in t e rv en i ng onthe supply-s ide and to s t rengthen as far as possible the s t ructural and/or sys temic compet i t iv eness o f th e re le van t econ omi c spaces . Th e pr i mar yorgan iz i ng conc ep t fo r the dev e lo pme nt o f acc umu la t i on s t ra teg ies , s t a te

p ro jec t s and hegemonic v i s ions in th i s con tex t i s the knowledge-basedec ono my . This b r oa d con cep t has the ad va n t ag e in th i s reg ard tha t i t i sre la t ive ly open-ended bu t none the less resona tes wi th a wide range of h igh ly v i s ib le and in te rconnec ted changes in con temporary cap i ta l i s t fo rmations. As such, i t can serve as the nodal point in a wide range of econo mi c, poht ica l , social an d cul t ural disco urse s and has impli cat i ons for the res t ruc tur ing of en t i re soc ia l fo rmat ions (on the nar ra t ive cons t ruct ion of cr is is and the discurs ive reor ientat ion of accumulat ion s t ra tegies ,s ta te p ro jec t s and hegemonic v i s ions , see chap te r 2 ) . Complement ingthese new st ra tegic concerns in economic pol icy has been the re ject ion,demot ion or rea r t i cu la t ion o f o ther, ea r l i e r po l icy ob jec t ives .

Second, regarding i ts dis t inct ive funct ions in secur ing the condi t ionsfor the p r ob l em at ic rep ro duc t io n of l ab our -po wer as a f i c t i t ious com-

qual i fy or l imit the ful l real izat ion of these t rends - counter t rends themse lves p roduced th rough spec i f i c abs t rac t t endenc ies and counte r tendencies . The expression of these t rends a lso var ies markedly across t imean d spa ce. Lastly, I have s ug ge st ed ho w th e fou r shifts in vol ve d in th eK W N S - S W P R transi t ion ar e l inked ma inl y - but no t exclusively - to thesearch for re sp ons es to th e cr isis of At lan t i c Fordi sm. D is t ingu ishi ngcaus e an d effect in this com pl ex set of in te rr el at io ns is clearly difficult

because so many fea tu res o f the once t aken- for-gran ted economic , pol i t ical , social and cul tural landscape are changing at the same t ime.This is why i t i s important a t th is level of abstract ion to consider themin ter ms of th e s t ructur al coupl in g of ec on om ic an d pol i t ical t ransf ormat ions without a t tempting to judge the re la t ive causal weight of economic and pol i t ical factors in isola t ion. This is where the concept of ecological dominance is especial ly useful heur is t ical ly and analyt ical ly.For i t h ighl ights the inte ract ion be tw ee n th e eco nom ic and th e pol i t icalun de r the do mi na nc e o f the log ic o f cap i ta l accu mula t ion , which dep en dson a c lose l ink be tween the economic and the ex t ra -economic .



Towa rds Schu mp eter ian W or kf ar e Pos tna t iona l Regimes? 25 1

modity, th e S W P R can be desc r ib ed (no d oub t infel ic i tously and at ther is lc of mi su nd er s t an di ng ) as a worlcfare reg ime insofar as i t su bo rd in at essocial pol icy to the demands of economic pol icy. Included under thisla t t e r rub r ic a re the p ro mo t i on of l ab our ma rk e t f l ex ibi l ity and em ploy -ab i l i ty, the deve lopment o f the new g lobahz ing , knowledge-basedec on om y an d the cu l t iva t ion o f s t ruc t u ra l an d / or sys temic comp et i t iveness . I t i s worth repeat ing here that the scope of economic pol icy has

be en mass ive ly wi de ne d and d ee pen ed be cause o f the inc r ease d impo rtance fo r cap i ta l ac cum ula t io n o f wh a t was p rev ious ly reg ard ed as b e ing'ex t ra - econ omic ' . Thu s , whi l s t the K W N S t r i ed to ex t end the soc ia l r igh t sof i t s c i t i zens , the SWPR i s more concerned to p rov ide wel fa re se rv icestha t benef i t bus iness and thereby demotes ind iv idua l needs to second place. This wor kfa r is t su bo rd in at io n of social to eco no mi c pol icy is mos tl ike ly where these po l ic ies concern the p resen t and fu tu re work ing

pop ula t io n . Th is i s why labo ur ma rk e t po l icy, edu ca t ion an d t ra in in g havesuch a key role in the workfare s t ra tegy. Concern with t ra ining andlabour market funct ioning has long been a feature of s ta te involvementin the soc ia l r ep rod uc t ion of l abour -pow er, o f course , bu t the SW P R gives gre ate r wei ght to f lex ibi l i ty and gives i t ne w me an in g (A inl ey1997) , and also redef ines the nature of the ski l ls and competencies that

educat ion and t ra ining are intended to del iver. I t i s for these reasons thatthe s ta te a lso a t tempts to ( re-)make the subjects who are expected tos e r v e a s p a r t n e r s i n t h e i n n o v a t i v e , k n o w l e d g e - d r i v e n , e n t r e p r e n e u r i a l ,f l ex i b le ec on om y and i ts a cco mpa nyi ng se l f- re l i an t , au to no mo us ,empowered workfa re reg ime ( fo r a recen t i l lus t ra t ion , see Bla i r andSchroder 1999) .

Wor kfa re i s a lso assoc ia te d wi th downw ar d press ure on publ ic spe nding tha t i s r e f lec ted in abso lu te o r re la t ive reduc t ions in pub l ic spendingand, fa i l ing tha t , in vig oro us mea su re s of cost co nt ai nm en t . This is mos tl ike ly where soc ia l spending concerns those who a re no t (po ten t ia l ly )act ive members of the labour force and/or have al ready lef t i t . This is

pa r t i cu la r ly ev iden t in the recen t t r ea tment o f pens ions ( the l a rges ts ingle i tem in welfare budgets) and involves an increasingly systemat icassaul t on pension r ights in both the publ ic and the pr ivate sectors . I tcan also be discerned in the heal th service . Cuts in social expendi tureare especially l ikely where the social wage is seen as a cost of product ion , as be ing re la ted more to popul i s t demands and soc ia l eng ineer ingt h a n t o e c o n o m i c p e r f o r m a n c e , a s a n u n p r o d u c t i v e d e d u c t i o n f r o m r e v

enues tha t cou ld be be t te r spen t by ind iv idua l economic agen ts in them ar ke t and as a so ur ce of rig iditi es in th e pr od uc ti ve secto r. I t is lessl ikely to occur where less emphasis is given to the absolute or re la t ivecost of fact ors of pr od uc t i on and mo r e to their re la t ive cont r i but ion toe c o n o m i c o u t p u t ; l es s 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




Table 7 .1 The Schu mpe ter ian w or kfa re pos tna t iona l reg im e

Distinctive set Distinctive set Primary scale Primary meansof economic of social (if any) to compensate

policies policies marke

Focuses on Subordinates Relativization of Increased role of innovation and social policy to scale at expense self-organizingcompetitiveness an expanded of national scale. governance toin open notion of Competition to correct botheconomies, witli economic policy; establish a new for market andincreasing stress downward primary scale state failures.on supply-side to pressure on the but continued But state gainsto 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

dim ens ion s of com pet i t i ven ess ; less , to the imm ed ia te tax costs of socialspending and more to i t s long- te rm cont r ibu t ion to p roduc t ion ; and lessto the imm edi a te ly un pr odu c t ive na tu re o f soc ia l exp end i tu re and mo reto i ts role in compensat ing workers (and other adversely affected socialforces) for the r isks and disrupt ions involved in internat ional t rade.

Non e th e le ss , bo t h account s o f soc ia l sp end ing regar d i t in econ omi cterms and both seek to put downward pressure on social spending as wel las to reor ien t in l ine with their res pect ive ac cou nts of comp et i t iven ess .

Thi rd , compared wi th the ea r l i e r p r imacy of the na t iona l sca le in economic management and the p rov is ion of soc ia l po l icy, the SWPR i s pos t -na t ion a l . Th is t r end i s occas i oned by the inc r eased s ign if i cance o f o t he r spa t ia l sca les and ho r i zo ns o f ac t ion , wh ich ma ke t he na t ion a l ec on om yless suscep t ib le to e ffec t ive macroeconomic management and thenat ion al terr i t ory less im po rt an t as a po we r container.^ Thi s does notmean the end of the na t iona l economic po l icy concerned wi th p romoting in te rna t iona l compet i t iveness , nor the end of the na t iona l s t a te . I tdoes signify the relativization of scale in economic and social policy com

pared to the Atlant ic Fordis t per iod. This is associated with the t ransfer o f economic and soc ia l po l icy-making func t ions upwards , downwards

and sideways. On a global level, this can be seen in the growing concernof a g row ing num be r o f in te rna t iona l agenc ies ( such as the IM F, Wor ldBank , OECD, and ILO) and in te rgovernmenta l fo rums ( such as the G8)with the shaping of current social as wel l as economic pol icy agendas.In pa r t , the EU acts as a re l ay for the se age nda -s ha pin g effor ts and , in



Towards Schu mpe ter ian W or kf ar e Pos tna tiona l Regimes? 25 3

part , i t l ias i tself played an active role in developing its own agenda for cou ntr ies ou ts i de its bor der s . This is most c lear in th e case of th e pos t-soc ia l i st eco nomi es , e spec ia l ly tho se in the f ron t ra nk s o f ne w ca ndi da t emember states; but i t can also be seen in i ts interest in social as well asec on om ic pol icy m asso ciate me m b e r s ta te s and Nor th Afr i ca (cf.D ea co n 1995 ,19 96 , 200 1; de Swaa n 1992; Le ibf r ied 1993; Wi ld ing 1997) .Th e EU leve l i s a l so imp os in g m or e nu me ro us an d t igh te r res t r i c t ionson na t iona l economic and soc ia l governance , espec ia l ly th rough then o r m s o f t h e S i n g l e E u r o p e a n M a r k e t ( S E M ) , t h e M a a s t r i c h t c r i t e r i afor ec ono mi c conve rgen ce , and the requ i r em en ts o f the EM U . Thi s i sre f lec ted in the t ende n t ia l Eu ro pe an iz a t io n o f l ab our ma rk e t po lic ies , int h e t r a n s f o r m a t i o n o f n a t i o n a l c o r p o r a t i s t a n d b a rg a i n i n g a r r a n g e m e n t san d in the d ev el op me nt of social pacts . W ha t is em er gi ng in this con tex ti s a se r ies o f mul t i l eve l go ve rn me nt and /or gov er nan ce reg imes o r ien tedto issues of the interscalar rear t iculat ion of the economic and pol i t ical -with th e EU jus t on e am on g ma ny such eme rgi ng regime s (P oul ant zas1978; Jess op 2000) . At th e sa me t ime, th er e are te nde nci es to devo lvesome economic and soc ia l po l icy-making to the reg iona l , u rban and loca llevels on the grounds that pol ic ies intended to inf luence the micro-economic supply-s ide and social regenerat ion are best designed close to

their s i tes of implementat ion. In some cases this a lso involves cross- bor der coop er a t io n am on g reg io na l , u r ba n or loca l spaces . In a ll th re er e g a r d s r e g u l a t i o n r e g i m e s h a v e t h u s b e c o m e m o r e p o s t n a t i o n a l .Yet , paradoxical ly, th is can lead to an enhanced role for nat ional s ta tesin cont rol l ing th e int er sca lar t ra nsfe r of the se po we rs - sug ges t in g ashift from sovereignty to a primus inter pares r o l e i n i n t e rg o v e r n m e n t a lre la t ions .

The pos tna t iona l moment o f economic and soc ia l po l icy res t ruc tur ingis com ple x be ca us e of th e pro hfe rat ion of scales and th e re la t iviz at ionof scale with which i t i s associated. There are c lear di fferences amongthe t r i ads here . NAFTA i s p r imar i ly a con t inen ta l t r ad ing sys tem basedo 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 ( i ts e lf c o m

pris ing many different regional economies with different levels of e c o n o m i c p e r f o r m a n c e ) , w i t h 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 yobl iged to in te r na l ize US pro duc t io n and con sum pt i on no rm s as wel l a sto f ind their place as best they can within an emerging cont inental divis ion o f l abour. The Eas t As i an t r i ad has de ve l ope d an inc reas ing ly im portan t reg iona l d iv i s ion o f l abour o rgan ized pr imar i ly under Japanese

reg iona l hegemony, bu t i t has no coheren t ins t i tu t iona l mechanisms toensure e ffec t ive coord ina t ion and i s weakened by Japan ' s con t inu inginabili ty to break out of i ts pohtical impasse as well as by the residual

bi t terness fe l t by s ignif icant social forces in countr ies occupied by Japanin th e 1930s a nd 1940s. Th e EU pr ov id es the onl y ex am pl e a mo ng the



25 4 Towa rds Schum peter ian W or kf ar e Pos tna t iona l Regimes?

3. On tfie Use of Ideal Types

Like a l l idea l - types , the KWNS and SWPR have been fo rmed th roughthe one- s ide d acc en tua t io n o f empi r ica l ly obse rva b le fea tu res ( in th i scase, tho se of At la nt ic For dis t social fo rm at io ns ) to co ns tr uct a logicaf ly

t l i r ee t r i ad reg ions o f a c lea r commitment to economic , po l i t i ca l andsocial in tegrat ion and, more ambivalent ly, to the development of suprana t io na l s t a te s t ruc tu res . Non e th e le ss a ll th ree reg ions / t r i ads a re l inkedto int er nat ion al i zat ion of pol icy reg ime s not only in ec on om ic bu t a lsoin jur idica l , pol i t ical an d social f ie lds . This ex clude s an y easy gener al iz ation from the EU case to the other two triads - or vice versa; this in itself is a sign that one should not push globalization too far as a generale x p l a n a t o r y f r a m e w o r k o f r e c e n t c h a n g e s .

Final ly, re ga rd ing the mo de of del ivery of ec on om ic and social pol ic ies , the SWPR has become more reg ime- l ike re la t ive to the s ta t i sm of the K W N S . This i s r e f lec ted in the inc re ased imp or ta nce o f non -s t a temechanisms in compensa t ing fo r marke t fa i lu res and inadequac ies inthe de l ive ry o f s t a te - sponsored economic a i rd soc ia l po l ic ies . Th is p rov ides a second impor tan t aspec t to the apparen t (bu t decep t ive)'ho l l owing ou t ' o f na t i ona l s t a tes , namely, the inc rea sed im po r t an ce o f

pr iva te- pub lic n et wo rk s to st at e activit ies on all levels - fr om local partnersh ips to suprana t iona l neo-corpora t i s t a r rangements (e .g . , C la rke andGai l e 1998; Fa l kne r 1998). Th e of ten rem ar ke d sh i ft f rom go ve rn me ntt o w a r d s g o v e r n a n c e ( f r o m i m p e r a t i v e c o o r d i n a t i o n t o n e t w o r k i n g a n dother forms of sel f -organizat ion) means that t radi t ional forms of intervention now play a lesser role in economic and social policy. This doesno t m ea n th a t l aw and mo ne y ha ve d i sap pea red , o f cou rse ; in s te ad , ac t iveeconomic and social s teer ing now tend to run more through sof t regulat ion and re f lex ive l aw, add i t iona l i ty and pr iva te -publ ic par tnersh ips ,o rgan iza t iona l in te l l ig ence and in fo rmat ion-s har i ng , e tc . A key ro le isa l so p layed by metagovernance , tha t i s , the o rgan iza t ion o f the ins t i tut iona l f ramework and ru les fo r ind iv idua l modes o f governance and thereb a lan c ing of d i fferen t mo de s o f gov er nan ce ( see Dun s i re 1996; Jess op1998,2002b) . This can be seen at the European level , where EU inst i tut ions typical ly operate less in the manner of an upscaled, supranat ionalsovereign s ta te apparatus than as a nodal point in an extensive web of me tag ove rn anc e opera t ion s . Thu s the y have a cen t ra l ro le in o rches t ra ting economic and social pol icy in and across many different scales of act ion involving a wide range of off ic ia l , quasi-off ic ia l , pr ivate economicand civi l in te res ts (E ke ng re en 1997; Sbr agi a 2000; T om m el 1994, 1998;Wi l lke 1992 ,1997) .



Towards Schum peter ian W or kf ar e Pos tna t iona l Regimes? 2 5 5

poss ib le soc ia l ph en om en on . Th i s doe s no t m e a n tha t they der ive f roma naive, theoret ical ly innocent observat ion of surface appearances - onth e contrary , they de r i ve f r om a ref lexive, theoret ic af ly inf orm ed rec ons t ruc t ion o f bas ic t r en ds and cou nte r t ren ds and an a t t e mp t to g ro undth em in unde r ly ing causa l mechanisms .^ The y acc en t ua t e ce r ta in d i s t inct ive features of a phenomenon in order to ident i fy what lends i t s t ructu ra l coh er enc e ( inc lud ing , pe r haps , a pa t t e r ne d inc ohe re nce tha t com esf rom h is to r ica l ly spec i f i c s t ruc tu ra l con t rad ic t ions , s t ra teg ic d i l emmasand d i scurs ive paradoxes) and to h igh l igh t d i s t inc t ive deve lopmenta ltendencies . In this sense they are intended to serve as theoret icaf lyin f or me d re f e re nce po in t s in emp i r i ca l ana lyses ra th er than as subs t i tu tesfor such analyses and to enable connect ions to be made between suchanal yses a nd a cr i t ical real is t analysis of th e evo lvin g pol i t ic al ec on om yof capi ta l ism. Suc h one -s ide d ideal type s are ne ve r com ple tel y real i zed.Thu s ne i t he r the idea l - typ ica l K W N S nor it s va r iou s su b ty pe s wer e foundin pure fo rm in At lan t ic Ford i sm. L ikewise , cons t ruc t ing an idea l - typeS W P R does no t p r es up pos e ac tua l ly ex i s t ing exa mpl es o f the S W P R in

pu re for m, no r do es i t im ply tha t any m ov e m e n t a l ong i ts di ffer entdimensions occurs evenly and at the same pace. Indeed there is major var ia t ion in th e sea rch for sol ut i ons to the pro bl em s of At la nt i c For dis mand th e KW NS . I t invo lves ne i the r a un id i rec t iona l mov em en t nor amul t i la ter al co nv er ge nc e across a l l nat io nal regimes . Wh at do exist are

pa th -dependent mixes o f types (a l loyed wi th inc iden ta l and acc iden ta lfeatures) which must be considered in a l l their complexi ty ra ther thanone-s ided ly. A h h o u g h the d i s t inc t ive fea t u res o f the S W P R emer ge mo s tc lea rly in th i s ra the r Eur oce n t r ic con t ras t wi th the K WN S , th e r e a reim por tan t Eas t As i an exa mpl es o f i ts hav in g dev e lo ped in the abse nceof any more o r l e ss c r i s i s -p rone KWNS. Indeed , these l a t t e r examplesonce served - before the so-called Asian Crisis - as models to solve crisis-

t endenc ies in the Wes t .

Fou r co mm en ts on th e idea l - typ ica l S W P R ar e app rop r ia te here . F ir s t ,the choi ce of this te rm for the em er ge nt s ta te form was in te nd ed to ma kethe cont ras t wi th th e K W N S as s tar k as possib le . Th us the ideal- typica lSWPR marks a c lear break with the KWNS insofar as (1) domest ic fuf lempl oym ent i s depr io r i t i zed in favour o f in te rna t ion a l compe t i t iv eness ;(2) redis t r ibut ive welfare r ights take second place to a product ivis treorder ing of social pol icy; (3) the pr imacy of the nat ional s ta te is depr iv-ile ged in fa vou r of pa rt ic ul ar sta te activit i es on oth er scales; an d (4) governance in a nego t ia ted , ne tworked soc ie ty i s g iven more emphas i s thangovernment in a mixed economy. In p rac t i ce , o f course , the oppos i t ionwill be less marked. Yet this contrast can be justified on both crit ical andheur i s t i c g rounds because o f a con t inu ing penchan t among many comme nt a t o r s to sugges t tha t in te rna t iona l Ke yne s ia n i s m could res to re the



25 6 Towards Schum peter ian W or kf ar e Pos tna tiona l Regimes?

con di t ion s for glo bal exp ans ion an d/ or th at the welf are s ta te is an i r revers ible his tor ic al achi eve men t" an d has not be en m uc h affected by global izat ion. My aim in developing this a l ternat ive concept is to show that ,whi ls t the capi ta l is t type of s ta te is necessar i ly involved in secur ing thecondi t i ons for eco nom ic and social re pr od uc t i on , th is ne ed no t tak e aK W N S form. In de ed , th e cur re nt res t ruc tur i ng for capi ta l wou ld actual lyseem to require a break with the KWNS. That some s ta tes may proveunable to effect the necessary changes would only undermine this c la imif they could sti l l compete successfully in the new global economy whilstre ta ining their ear l ier form.

Se co nd, th e tw o ideal types pre se nt th e dis t inct ive fea tur es of theKWNS and SWPR respec t ive ly as opposed to a l l the i r h i s to r ica l ly g iven ,cur ren t ly dominan t o r poss ib le fu tu re fea tu res . For example , des igna t ingthe pos twar s ta te fo rm as 'Keynes ian ' and the reby emphas iz ing i t sdem an d- s i de ro le does no t me an tha t the K W N S had no supply-s ide po l ic ies. As sh ow n in chap te r 2 , i t a lso pro mo te d a un if or m na t i on al infras t r uctu re as a basis for gene ral i z ing Fordis t no rm s of pr od uc t i on andconsumpt ion and to d imin i sh uneven na t iona l deve lopment . I t a l so cont r i bu t ed to the supply o f t echnol og ica l innova t i on th r ough increa sedsupport for sc ience, a massive expansion of higher educat ion along

For d i s t l ines and , some t imes , mi l i t a ry sup por t fo r R & D . But the r e a res ign i f i can t d i ffe rences in the re la t ion be tween demand- and supply-s ide po l ic ies in the KWNS and SWPR. Whereas KWNS supply-s ide po l ic ieswe re sh aped by the Ford i s t pa r ad ig m wi th it s emphas i s on ec ono mie s o f scale , b ig science and product ivi ty growth, SWPR supply-s ide pol ic ies areo r i e n t e d t o p e r m a n e n t i n n o v a t i o n , t o e c o n o m i e s o f s c o p e , a g g l o m e r a t i o na n d n e t w o r k s , t o p r o m o t i n g 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 t o s t r u ctural and systemic compet i t iveness . This puts a far greater premium onthe exp l ic i t , s t ra teg ica l ly se l f -consc ious management o f the innova t ion

systems a nd co mp et i t i on pol icy, on bro ad int erp ret a t i ons of th e factors bear ing on success fu l innova t ion and compet i t iveness in open economiesand on the capaci ty for ins t i tu t ional learning than would have beent y p i c a l o f t h e F o r d i s t K W N S . C o n v e r s e l y, w h e r e a s K W N S m a c r o -ec on om ic po l ic ies we re con ce rn ed to c rea te the condi t ions fo r ful l em

p l oy me nt to su i t the dem an ds o f dom es t ic p ro duc t ive cap i ta l , S W P R ma cr oe co no mi c po l ic ies a re conc er ned wi th in f lat ion ( inc lud ing assetin f la t ion) a nd wi th p r ud en t bud ge t s to sat is fy the de ma nd s o f mob i lem on ey capi ta l . Likewi se, tu rn in g to social pol icy, whi ls t co nc er n with

tra i ning and labou r m ar ke t funct ionin g has long bee n a featur e of s ta t einv o lv em ent in the socia l r e pr odu c t i on of l abo ur- pow er, th e t rans i t ionfr om For di sm , wi th i ts ex pe ct at io n of a jo b for l ife (if no t th e sa m e jo bfor l i fe) , to post-Fordism, with i ts emphasis on economic insecuri ty andconstant change, leads to a different form of t ra ining and educat ion. This



Towards Sch um peter ian W or kf ar e Pos tna t iona l Regimes? 2 5 7

ana lysi s cou ld be c on t i nued , bu t en ou gh has b ee n wr i t t en , I ho pe , to b r ingout th e im po rt an ce of th e discont inui t ies in ap pa re nt ly s imilar act ivi t iesas well as the significance of new activit ies. More generally, of course, theSWPR wi l l a l so express o ther concerns and per form many o ther functions typical of capitalist states, but i t is the four features noted above,tog e th er wi t h the i r impl ica t io ns for th e dy na mi c o f cap i ta l i sm and theoveral l funct ioning of s ta tes , that di fferent ia te i t f rom other capi ta l is treg imes . Toge ther they become an in tegra l pa r t o f i t s accumula t ion s t ra tegy and they are a lso ref lected in the s ta te and hegemonic projects wi thwhich th i s accumula t ion s t ra tegy i s assoc ia ted .

Thi r d , four c la r if i cat ions a re ne ede d to avo id mis und ers tan d in g th e pu rp or t o f the S W P R idea l type :

1 In re fe r r ing to Sc hum pet e r ian i s m in the char ac te r iza t ion o f thesta te ' s new role in economic reproduct ion, I do not wish to suggesttha t Schumpete r h imse l f advoca ted the SWPR in a l l i t s complex i tyand var ie ty. Nor, of course , d id Keynes provide a blueprint for a l l subsequent ins t i tu t iona l and po l icy deve lopments assoc ia ted in wha tever count ry wi th the KWNS. Nei ther Keynes nor Schumpete r can be seenas the l eg i t imate found ing fa thers o f reg i mes wi th whi ch they ha vesince be en ident i f ied. None th el es s , in refe rr i ng to the se ec ono mi st s Ihave ident i f ied emblematic thinkers whose ideas have come to beassoc ia ted ( r igh t ly o r wrongly) wi th th e s ta te ' s ro le in p r om ot in gcap i ta l accumula t ion in spec i f i c pe r iods and /or economic reg imes . 'Ke yn es was of te n c i ted to jus t i fy the increa sing co nc er n wi th th es ta te ' s poss ib le ro le in secur ing fu ll em pl oy me nt ; Sc hu mp et e r has

been rediscovered as a theor is t of innovat ion as the motor force of l o n g w a v e s o f e c o n o m i c e x p a n s i o n . T h e r e w e r e a n a l o g u e s t o K e y n e sin other economies , of course , such as Wicksel l in Sweden, but Keynes

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 f o r m a c r o e c o n o m i c m a n a g e m e n tor i en t ed to the de m an d s ide . L ikewise , o th er econ omis t s hav e exa mi n e d t h e d y n a m i c s o f c o m p e t i t i o n , i n n o v a t i o n , e n t r e p r e n e u r s h i p a n dlon g wa ves of ec on om ic growt h, bu t no ne has do ne so as vividlyand comprehens ive ly as Schumpete r. In add i t ion , Keynes andKeyne s ian i s m, wi th the i r emp has i s on ec ono mi c po l icy, p rov id ed acontext wi thin which the welfare s ta te could develop: for, as we haves 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 f u ll e m p l o y m e n t , a u n i ve r s a l i s twelfare s ta te would be hard to maintain . The role of a 'Keynesian

ep is temi c co mm un i t y ' ( Ike nbe r r y 1993) in es tab l i sh ing the fou ndat ions fo r the in te rna t iona l pos twar se t t l ement assoc ia ted wi thAt lan t ic Ford i sm i s espec ia l ly impor tan t even i f the re were d i ffe ren trou te s fo l lowed a t d i ffe re n t spe eds to Keynes ian ful l em pl oy me nt

pol ic ies ( on whic h, see the co nt r i bu t i ons in Ha l l 1989) .





Towards Schum peter ian W or kf ar e Pos tna t iona l Regimes? 25 9

4. Alternative SWPR Strategies

Because my analysis has operated mainly in terms of a global contras t be tw ee n the KW N S and the S W P R, i t cou ld be a rgu ed tha t i t su bs ume stoo m u c h un de r too dual is t i c a set of con cep ts . This is not my int ent ion .I ha ve al r ead y discussed var i ant for ms of th e K W N S and wil l no w int roduce var ian t fo rms of the SWPR. The var ious economic and po l i t i ca l t endenc ies no ted above can be (and of ten a re ) in tegra ted and expressed inqu i t e d i ffe ren t d i scourses and a r e assoc ia ted wi th con t ras t ing s t ra teg icdirec t ions a s diff eren t forces se ek to m a ke se nse of the confl ic t ing tendenc ies and counte r tendenc ies a t work in the new g loba l economy. Therei s ex tens ive improviza t ion and t r i a l and e r ro r invo lved in the cur ren tchanges and no c lea r ly dominan t pa t t e rn has ye t emerged . For heur i s t i c

purposes , however, we can posi t four ideal- typical forms: neol iberal , neocorpora t i s t , neos ta t i s t and neocommuni ta r ian ( see box 7 .1 ) . In us ing the

pref ix ' ne o ' to ident i fy th em , I wan t to emp ha si ze that the f i r s t th re e

would embody impor tan t d i scon t inu i t i es wi th the l ibe ra l , corpora t i s t ands ta ti s t 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 malso has s ignif icant discont inui t ies compared to previous effor ts to ins t i tu t iona l ize communi ta r ian i sm in cap i ta l i s t soc ia l fo rmat ions . The part icular s t ra tegy mixes to be found in individual cases wil l dependon inst i tu t iona l legacies , th e ba la nc e of pol i t ical forc es and the ch ang ingeconomic and pol i t ical conjunctures in which different s t ra tegies are

p u r s u e d .

Neoliberalism

This cou ld wel l be desc r ibe d as t h e he ge mo ni c s t ra tegy fo r ec ono mi cg loba l iza t ion because o f i t s suppor t by l ead ing in te rna t iona l economic

bod ie s ( such as the O E C D , IM F and Wo r l d Ba nk ) , i t s p r im acy in theU 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 c a p it a l is t h e g e m o n ) a n d i n o t h e r a n g l o p h o n e c o u n t r i e s ( n o t a b l y E n g l a n d , A u s t r a l i a , N e w Z e a l a n d a n dCanada) , and i t s fo rmer ly parad igmat ic s ta tus fo r res t ruc tur ing the pos t -soc ia l i s t economies and in tegra t ing them in to the g loba l economy. I t i s

a l so ev iden t , bu t no t hegemonic , in the neo l ibera l po l icy ad jus tments(ev en in th e abse nc e of a mo r e radi cal neo l ib er al re gim e ch an ge ) in mos to ther advanced cap i ta l i s t economies . Even where th i s s t ra tegy i s no tw h o l e h e a r t e d l y e m b r a c e d b y t h e d o m i n a n t e c o n o m i c a n d p o l i t i c a l f o r c e sin other economic and pol i t ical spaces , the effects of the neol iberal global

t ion. Fai lu re to no te the se effects c an easily lea d to th e misr ead ing of th erela t ive cont inui ty or disc ont in ui ty acros s different per iod s .




p ro jec t con t inue to opera te th rough the i r con t r ibu t ion to the inc reas ingeco log ica l dominance o f cap i ta l accumula t ion and to the economicdominat ion of those f ract ions of capi ta l that benef i t f rom this project .

Neol ibera l i sm i s concerned to p romote a marke t - l ed t rans i t iontowards the new economic and social regime. For the publ ic sector, i tinvo lves p r iva t i za t ion , l ibe ra l i zat ion a nd th e impos i t i on o f com mer c ia lcrit eria in th e res idu al state sec tor ; for th e pri vat e sector , i t inv olv esde re gu lat io n and a ne w legal an d pol i t ic al f r am ewo rk to prov ide pass ivesuppor t fo r marke t so lu t ions . Th is i s r e f lec ted in government p romot ionof 'h i r e-and -f i r e ' , f lexi- t ime an d f lexi- wage labo ur ma rk ets ; gro wth of taxex pe nd i t ur es s te ere d by pr i vat e ini t i a t ive s base d on f is cal subsidies for fav our ed eco nomi c act iv it i e s; me as ur es to t rans f orm the wel fa re s ta teinto a means of support ing and subsidizing low wages as wel l as toenhance the discipl inary force of social secur i ty measures and prog 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 so c ia l

poli cy to th e pe rc ei ve d nee ds of th e pr iva te sector. Co up le d wit h suchme as ur es i s d i savowa l o f soc ia l pa r t ner sh i p in favour o f man age r ia l p r eroga t ives , marke t fo rces and a s t rong s ta te . Neol ibera l i sm a l so invo lvesa c o s m o p o l i t a n a p p r o a c h t h a t w e l c o m e s i n t e r n a t i o n a l i z a t i o n o f d o m e st ic economic space in the fo rm of bo th ou tward and inward inves tmentan d also cal ls for the l iber al izat ion t ) f in t er nat io nal t ra de an d in ve st me ntwi th in reg iona l b locs and more genera l ly. Innova t ion i s expec ted tofol low sp on ta ne ou sl y f ro m th e l iber at io n of th e an im al spir i ts of indiv idua l en t repreneurs as they take advan tage o f incen t ives in the newm a r k e t - l e d c l i m a t e a n d f r o m t h e m o r e g e n e r a l g o v e r n m e n t p r o m o t i o nof an en te rpr i se cu l tu r e . In tu r n , na t i ona l compet i t ive ness i s un de rs to odas the aggr ega te e ffec t o f the mi cr oe co no mi c comp et i t iven ess o f ind ividual f i rms. Hence there is l i t t le s ta te concern to maintain a suff ic ient lydee p and cohere n t se t o f core ec onom ic compe tenc ie s in the ho me

economy and /or adequa te na t iona l o r reg iona l innova t ion sys tems to p r ov id e the bas i s fo r s t ruc tu ra l compet i t ivene ss . I n th i s co n te x t loca l an din te rna t iona l s t a te appara tuses a re expec ted to ac t as re lays fo r them a r k e t - l e d a p p r o a c h t o i n n o v a t i o n a n d w o r k f a r e . W h i l s t n e o l i b e r a l i s mis sometimes said to involve a re turn to the f ree market and the l iberals ta te , nei ther is real ly feasible in current condi t ions . Instead, i t typical lyinvo lves the subord ina t ion o f smal l and medium en te rpr i ses to newforms of monopol is t ic compet i t ion on a global scale . Likewise, even i f na ti on al and local state s adop t a laissez -fair e ro le in the h op e of ge ne r

a t in g an en t r epr ene ur ia l cu l t u re , the y mus t s ti l l p ro ve s t ro ng en ou gh both to dismant le and replace the old mode of social regulat ion and tores i s t su bs eq ue nt po l i t i ca l p res sure s fo r afl m a n ne r o f ad ho c in te rve nt ions fo r shor t - t e rm economic o r po l i t i ca l advan tage . These a re no t easytasks .



Towards Schu mp eter ian W or kf ar e Pos tna t iona l Regimes? 26 1

N e o c o r p o r c t i s m

This s t r a te gy re l i es on ins t i tu t io na l iza t ion o f a con t inu ing , neg o t ia ted ,con cer ted appr oac h to the ec on om ic s t ra teg ies , dec i s i ons and co nd uc t o f ec on om ic agents . Bas ed on a sel f - ref lexive un de rs ta nd in g of th e l inkage s

be tween the i r own pr iva te economic in te res t s and the impor tance o f co llect ive agr ee me nt s to th e s tabi l i ty of a social ly em be dd ed , social ly regula ted econom y, the ec ono mi c fo rces invo lved in neo cor pora t i s m s t r ive to

balance compet i t ion and cooperat ion. This system differs f rom Fordis tcorp ora t i sm base d on the do mi na nc e o f ma ss p r odu c t i on and massun ion s and on th e pr im ac y of ful l em pl oy me nt and s tagf la t ion as econom ic concer ns . Thu s the scope of neo cor por a t i s t a r r ang em en ts ref lect sthe d ivers i ty o f po l icy co mm un i t i e s and ne tw or ks re lev an t to aninno va t io n-dr iven mod e of g rowth as wel l a s the inc reas ing he te ro ge nei t y o f l a b o u r f o r c e s a n d l a b o u r m a r k e t s . 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 i nan emerging SWPR are a lso more direct ly and expl ic i t ly or iented to thec r u c i a l 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 decon omy, s t ruc t ura l compet i t ivenes s , an d ac t iva t ion ra th er th an pass ives u p p o r t i n r e l a t i o n t o l a b o u r m a r k e t s . N e o c o r p o r a t i s m e x t e n d s b e y o n d

bus iness assoc ia t ions and t rade un ions to inc lude po l icy communi t i es

represent ing dis t inct funct ional systems (e .g . , sc ience, heal th , educat ion,l a w ) ; a n d p ol i c y i m p l e m e n t a t i o n w il l 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 eex ten s ion of ' r e gu la ted se l f - regu la t ion ' and pr i va te in te res t go ve rn me ntso that there is less direct s ta te involvement in managing the ' supply-s ide ' and more emphas i s on p r iva te indus t r i a l po l ic ies . Inher i t ed corpora t i s t a r rangements may a l so become more se lec t ive (e .g . , exc lud ingsome prev ious ly en t renched indus t r i a l in te res t s and per iphera l o r marginal workers , in tegrat ing some ' sunr ise ' sectors and giving more weightto cor e wo rke rs ) ; and , re f lec t ing the g rea te r f l ex ib i l i ty and dece n t ra l i za

t io n of ke y fea tur es of th e post -Fo rdis t eco nom y, th e cent res of ne ocorpo ra t i s t g rav i ty wi l l m ov e to wa rd s the micro- leve l o f f i rms andloca l i ti e s a t th e expense o f cen t ra l i zed macr oe con om ic conc er ta t ion . Th isi s ce r ta in ly no t incons i s ten t wi th ' bo t tom-up ' neocorpora t i s t l inkagesconnec t ing f i rms and /or loca l i t i e s in d i ffe ren t na t iona l economic spacesand bypass ing cen t ra l government . Whether a t loca l , na t iona l o r supranat ional level , the s ta te is jus t as involved in such neocorporat is t s t ra tegies as i t i s in the neol iberal and neostat is t approaches . I ts resources andact i ons ar e used to bac k or su pp or t th e decis ions rea che d th ro ug h cor

pora t i s t nego t ia t io n , how eve r, r a th er th an to p r om ot e e i the r neo l ib era ld i sengagement o r au tonomous , p roac t ive , neos ta t i s t in i t i a t ives . And th i sin turn means that compliance with s ta te pol ic ies is e i ther voluntary or depends on ac t ions t aken by se l f - regu la t ing corpora t i s t o rgan iza t ionsendowed wi th pub l ic s ta tus .



26 2 Towards Schumpeter ian Wo rk fa re Postnational Regimes?

Box 7.1 Strategies to promote or adjust to global neoliberalism

Neoliberalism

1. Libera l izat ion - promote f ree c i np ct i l io n

2. De re gu la ti on - red uce ro le of law and state

3. Privatization - sejl off public -ecior

4. Mar ket pr ox ie s in re.sidual publ ic se ct or ;

• 5. Internationalization - free inwani and i .u'.waul llow-

6. Lo we r direct taxes - inc reas e cotis unicr choi ce

i • Neocorpo ratism ;;;: . j1. Reba lan ce comp eti ti on and coopcrat inn !

Decenir .di /.cd •rvsiiil.iied:seM rc;;iilaiion"

3. Wiilcn ramie i>l pi i \ alc;:publc and other Maki.lii)lder>"

4. b x p a i i d n<k 1 .1 pn ili cp ri va te pai tnershii is

5. 1 'ioti.ct cnic LCiinuMMc-sectors m open economv

6. 1 [iL '.h : . i \at i i in to l inai icesod-i l i incslmcnt

; Neosralism

i 1, Irom s'.aic contiof to regulated ci.iT}ietilioii

: 2, (linde national strategy-xalhcr than plan t o p - d o w n

• 3, Auditirg pcrlormancc 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 econoiiA

• 6 . I \pai iding l o l e loi new vollccli\e resoiiices

Neocommunitarianism i|™ - ])^•|l lvr . l l l /a t l l ^l l liitiii tree i.oripclilior

2,; « Lmpow eri iie iit - enh anc e role ol tlind sector

3. S o c i a l i / . i l i o i i expand Ihc social economv4. I'mph.i-iMiii social Use value and social cohesion

5. I air trade nolTree tradti; think tilol-ial, i.ct Local

6. Kedirt-U .a xes - citi zens' wa ge, carers' all owa nce s

Neostatism

This involves a market -conforming but s ta te-sponsored approach to eco

nomic reorganizat ion in which the s ta te in tervenes to guide the devel

op men t of ma rk et forces . I t doe s so thr oug h deployin g i t s ow n pow er s

of imperat ive coordinat ion, i t s own economic resources and ac t iv i t ies ,

and i ts own knowledge bases and organizational intel l igence. In deploy

ing these var iou s reso urce s in suppor t of an ur ba n, regional , in termest ic .

http://paiiding/

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Towards Schu mpe ter ian W or kf ar e Pos tna t iona l Regimes? 26 3

na t iona l o r suprana t iona l accumula t ion s t ra tegy, however, the s ta te i s s t i l lwe l l aw ar e o f the cha ngi ng na tu re an d d i scourses o f in te rna t ion a l com

pet i t ion and, indeed, is act ively involved in promoting these discoursesand cor responding economic and soc ia l po l ic ies . In th i s con tex t neos ta t i sm invo lves a mix tur e of deco mmod i f ic a t ion , s t a te - spon sor ed f l ex i

bi l i ty an d oth er s ta te act ivi t ies a im ed at sec ur i ng th e dy na mi c eff iciencyof a s t ructural ly coherent and inst i tu t ional ly thick product ive core of economic act ivi t ies . This is ref lected in an act ive s t ructural pol icy inwhich the s ta te sets s t ra tegic targets re la t ing to new technologies ,t ech nolo gy t rans f e r, inn ova t io n sys tems , in f ras t ruc ture a nd o the r fac t o rs a ffec ting the overa l l s t ruc tu ra l comp et i t iven ess o f the e mer g in g

knowledge-based economy; and in an ac t ive t e r r i to r ia l s t ra tegy in whiche ff o r t s 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

pin a successful learning region, innovat ion mileu, industr ia l c luster,en t repreneur ia l c i ty, and so fo r th . I t f avours an ac t ive l abour marke t

pol icy to reski l l the lab ou r force an d to enc ou ra ge a f lex i-sk i l l ra th er th anf lex i -p r ice l abour marke t ; i t in te rvenes d i rec t ly and open ly wi th i t s own po l i t i ca l and economic resources to res t ruc ture dec l in ing indus t r i es andto promote sunrise sectors ; and i t engages in a range of societa l guidancestra tegies based on i ts own s t ra tegic inte l l igence and economic resources

to p romote spec i f i c ob jec t ives th rough concer ted ac t ion wi th var ied po l icy communi t i es tha t embrace pub l ic , mixed and pr iva te in te res t s .These ac t iv i t i e s a im to move the domes t ic economy (or o ther re levan teconomic space) up the t echnolog ica l h ie ra rchy by c rea t ing and mainta in ing a cohe ren t and com pet i t i ve p ro duc t iv e base and pur su ing a s t ra tegy of f lexible special izat ion in specif ic high- technology sectors . Whils tthe central state retains a key strategic role in these areas, i t also allowsand encourages para l l e l and complementa ry ac t iv i t i e s a t r eg iona l and /or local levels . In th e te rm s intr odu ce d in cha pt er 6 , ne os ta t i sm invol ves a

s t rong s ta te ro le in decen t red con tex t s t ee r ing . None the less the s ta te ' sdes i re to p ro tec t the core t echnolog ica l and economic competenc ies o f i t s p roduc t ive base and i t s innova t ion sys tem may be assoc ia ted wi thneomercan t i l i sm a t the suprana t iona l l eve l .

Neocommunitarianism

This var ia nt pr om ot es t h e social econom y' ' as a chal leng e to t h e logic of cap i ta l accu mul a t i on in th e econ omy, i t s ex tens ion to o t he r sph ere s o f

soc ia l l if e and th e s t rugg le to es tab l i sh bou rge o is he ge mo ny over soc ie tyas a whole . Against th is logic , especial ly i ts most abstract aspects rootedin the dominance o f exchange-va lue , the soc ia l economy pr io r i t i zes soc ia luse -va lue . I t seeks to re -e mb ed the o rga n iza t ion o f the eco no my inspecif ic sp at i o- te mp or al conte xts or ie nte d to th e rh yth ms of social



2 6 4 Towa rds Schum peter ian W or kf ar e Pos tna t iona l Regimes?

re pr odu c t ion ra t her th an the f renz ied c i rcu la t ion o f d ig i t a l i zed f inancecap i ta l . Ne oc om mu ni ta r i an i s m a lso oppos es the ex ten s ion of cap i tal i s tlogic to other spheres of l i fe such that educat ion, heal th services , housing,

polit ics, culture, sport , and so on are directly commodified or, at least ,sub jec t to qua s i - mar ke t fo rces . Indeed , ex te nd i ng the soc ial eco no my

provides a basis for res is t ing capi ta l ' s increasing hegemony over societyas a whole . F or i t dem ons t r a t es the poss ibi l i ty o f o rga n iz i ng eco nom icand social l i fe in terms that chal lenge capi ta l is t ' common sense ' .

Combining the strategies

These four s t ra tegies have also been formulated as idealtypes based ontheore t i ca l ly in formed empi r ica l observa t ion and , as such , a re nowhereto be found in pure form. Indeed, e lements of these different s t ra tegiesfor effect ing the t ransi t ion to a global iz ing, knowledge-based economyare typically combined in specific cases. This can be seen at all levels of

po l i t i ca l in te rven t ion . For example , whi le the l ead ing in te rna t iona l andsupr ana t ion a l o rgan iza t ions in th e red es ig n of th e globa l econ omy a regeneral ly commit ted to the neol iberal s t ra tegy, there are s t i l l some differences between them as wel l as some f luctuat ion in the re la t ive weightat ta che d to diff erent e le me nts of th e four s t ra tegies . Fo r exa mpl e.De ac on , w ho has been especial ly in ter es ted in th e global iza t ion of social

policy, has noted that:

there continue to be interesting shifts in the position of particular playerswithin this debate. The IMF has taken the social dimension of globalization more seriously, considering whether some degree of equity is beneficial 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 makingconcessions to the Bank's views on social security. More recently, the roleof the World Trade Organization and its views on the desirability of fostering a global market in health and social services provision is assuminga prominence it did not have in the past. (2001: 60-1)

Likewise, in the EU, the s ingle market s t ra tegy is premised on aneo l i bera l approa ch to comp et i t ivene ss - c rea t ing an EU-w ide ma rk e tth rough l ibe ra l i za t ion , de regu la t ion and in te rna t iona l iza t ion - and theE M U is in t end ed to en t ren ch a neo l iber a l eco nom ic and soc ia l po l icyf ramework tha t would l eave member s ta tes l imi ted room for manoeuvr e . Wi th i n th i s neo l iber a l f ra mew ork the re i s a l so a neos ta t i s t s t ra tegy in and th rough which the EU coord ina tes ne tworks l ink ing d i ffe ren tlevels of government in different s ta tes as wel l as semi-publ ic and pr ivate





2 6 6 Tow ards Schum peter ian W or kf ar e Pos tna t iona l Regimes?

t ir e 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 it sresu l t ing f ragmenta t ion and Ba lkan iza t ion among compet ing s t ra teg ical l iances and nat ional and t ransnat ional in teres ts . Conversely, the neocorporat is t s t ra tegy is more important in the f ie ld of social pol icy.Although the EU lacks an official competence in this area, i t can sti l la t t empt to p romote a soc ia l po l icy fo r Europe th rough coopera t ion wi ththe social par tners (see Falkner 1998) . Thus i t i s essent ia l to es tabl ishnew ins t i tu t iona l a r rangements and a l loca te spec i f i c ro les and complementary competencies across different spat ia l scales and/or types of ac to r and thereby ensure tha t the dominan t s t ra teg ic l ine i s t r ans la tedinto effective action.

Di ffe ren t s t ra teg ies a re a l so found ins ide each European na t iona ls ta te . Whi le th e pol ic ies o f Tha tch er i sm and , mo re r ecend y. N ew Lab ou r c lear ly involve the dominance of a neol iberal s t ra tegy, for example,other s t ra tegies have not been tota l ly re jected. Thus, in the case of 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 sm al lsca le ) were o r ien ted to t echnology t rans fe r and research in to gener ictech nolog ies ; and , no t wi t hs t and ing b lanke t hos t i l i ty to t r ipa r t i t e corpora t i sm and na t iona l - l ev e l soc ia l pa r tne rs h ip , i t a lso p r om ot ed en te r pr i secorp ora t i sm a nd a ' new rea l i sm ' on th e sho p f loor. Mo re ov er , whi lecen t ra l government was in re t rea t , loca l economic deve lopment in i t i at ives a long SW P R l ines p ro l i f e ra ted . U nd er Labou r- le d loca l au thor i t i e sthese were of ten run on neocorporat is t or neostat is t l ines; conversely.Conserva t ive- led loca l au thor i t i e s were more inc l ined to neo l ibera l i smo r f a v o u r e 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 w i t h o u t o rg a n i z e d l a b o u r. N e wLabour under Bla i r has embraced mos t o f the neo l ibera l l egacy of Thatcher ism and has extended i t in to new areas . I t has a lso taken thef i r s t s tep s on the r oa d to a rout iniza t ion of neo l ib era l is m. Th us mo reem pha si s has been given to secur ing the ope ra t i on of the emer gin g

neol iber a l r eg ime th rou gh norm al po l i ti c s , to deve lo p ing supp or t i ng po l ic ies across a wide range of pol icy f ie lds and to providing f lanking mechanisms to compensate for i ts negat ive economic, pol i t ical and socialconsequences . Al l of these measures are being pursued, of course , in acontext marked by cont inuing pol i t ical worr ies about s ta te uni ty and terr i tor ia l umty, poht ical legi t imacy and re-elect ion, as wel l as more generalconcerns with the future of social cohesion.

In shor t , whi le the re a re econom ic , po l i t i ca l and in te l l ec tua l fo rces tha tare c losely ident i f ied with one or other mode of governance, these subtypes of the SWPR are best seen as poles around which different solut ions have developed (and are developing) on different scales dur ingmo re or less ex te nd ed per i ods of conflic t an d ex pe r i me nt at io n. Curren t ly, the neo l ibera l fo rm of SWPR i s hegemonic on the in te rna t iona lleve l , bu t impor tan t counte rcur ren t s ex i s t in spec i f i c macroreg iona l .



Towards Schu mpe ter ian W or kf ar e Pos tna t iona l Regimes? 2 6 7

5. Post-Fordisna and the SWPR

The K W N S wa s a ke y s t ruc tu ra l sup por t o f th e long pos t war b o o m andent e re d c ri s is a long wi th i ts a ssoc ia ted At la n t ic Ford i s t acc umu la t ionregime. Indeed, these cr ises are re la ted and feed into each other. As thecr is is of th e K W N S unf old ed, and as effor ts to re s t or e th e condi t ion s for pos twar g rowth th rough economic aus te r i ty and soc ia l r e t renchment inan a t t empt to squeeze ou t in f la t ion and reduce pub l ic spending fa i l ed ,emphas i s sh i f t ed to a t t empts to res t ruc ture and reor ien t the s ta te in thel igh t o f changed percep t ions o f the condi t ions fo r economic expans ion .Insofar as this res t ructur ing and reor ientat ion succeed, they wil l tend to

p roduce one o r ano ther var ian t o f the SWPR. This i s by no means ana u t o m a t i c , m e c h a n i c a l t r a n s i t i o n b u t i s m e d i a t e d t h r o u g h c h a n g e s i n e c onom ic d i scourse , mo de s o f ca lcu la t ion , new ec ono mic theor ie s and s t ra teg ic conc ep ts . T l iese a re a f l - impor ta n t me dia t in g l inks be tw ee n s t ruc t ura lchanges in the g loba l economy and s ta te t rans format ion . For they

pro vid e a f r am ew or k for ma ki ng sense of the se chan ges , th e cr ises thato f ten accompany them, and the responses tha t migh t be appropr ia te tothem. I t i s the ar t iculat ion of discurs ive-s t ra tegic shif ts in to new accumulat ion s t ra tegies , s ta te projects and hegemonic projects , and their cap aci ty to mobi l i ze su pp or t and del iv er effect ive s ta t e pol ic ies th at he lpt o s h a p e t h e 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 t h e c o n t e m p o r a r y s t a t eand produce d i ffe ren t regu la to ry reg imes . The even tua l rea l i za t ion and

conso l ida t ion o f the g lobahz in g , kno wle dge -ba sed eco no my and th eS W P R as a key el em en t in i ts reg ula t io n, i f th is occurs , wfl l th er ef or edepend on the outcome of a wide range of s t ruggles . These include classs t ruggles proper ; s t ruggles to extend or res is t the colonizat ion of other sys tems and the l i f ewor ld by prof i t -and- loss economic ca lcu la t ion ;

na t iona l , subreg iona l and c ross -border reg iona l con tex t s . The par t i cu la r mix in indi vidu al cases will dep en d on inst i tu t io nal legacies , th e bala nceof pol i t ical forces and th e chang ing ec on om ic an d pol i t ical con jun ctu re sin which different s t ra tegies are pursued. They wil l a lso be overdetermined by fac to rs beyond those inc luded wi th in th i s pa r t i cu la r approachto the pol i t ical ec on om y of welfa re . Th er e is cer ta in ly no r eas on to ex pec ta mul t i l a te r a l con ver gen ce of mod es o f regu la t ion a r oun d one sub typ eof th e S W P R - le t a lo ne a rap id con ve rge nce . Ind ee d, s ince th er e is as t rong pa th -d ep en de nt s t ruc tu ra l coupl in g be tw ee n d i ffe ren t acc umul at ion reg ime s, mod es of reg ulat ion a nd mode s of societa l izat ion , i t i s far more p robab le tha t the re wi l l be con t inu ing d ivergence roo ted in thecont inuing inst i tu t ional f i t between different product ion regimes and different s t ra tegies .



2 6 8 Towards Schum peter ian W or kf ar e Pos tna t iona l Regimes?

s t rugg les to l imit th e grow ing ecological do mi na nc e of pol i t ical s t rugg les;an d s t rugg les to mobi l i ze sup por t be h i nd cou nte r- heg emo nic p ro jec t s

p ropos ing a l t e rna t ives to the g loba l iz ing , knowledge-based economy asth e do mi na n t p r inc ip l e o f soc ie ta l i za t ion ( see ch ap te r 1 ) .

Non e th e le ss , in the sp i r i t o f con t i nu ing the tho ugh t -e xpe r i me nt tha thas mo t iv a t ed th e p rec ed in g a rg ume nts , we cou ld con den se th em in tothe s ing le , auda c iou s c la im tha t a Sc hu mp et e r ian wor kf a r e pos t na t i ona lregime wil l provide the best possible - but s t i l l imperfect and always prov is iona l - spa t io - tempora l f ix fo r a g loba l iz ing , knowledge-based , pos t -Fordis t economy. This c la im can be jus t i f ied in two ways. Ei ther theSWPR i s a con t ingen t ly rea l i zed fo rm of the modern s ta te shaped by theeco log ica l dominance o f a g lobahz ing knowledge-based economy; o r i ti s the natural ly necessary form of the capi ta l is t type of s ta te in a globaliz ing kn ow le dg e- ba se d economy.^ In th e fo rm er case , the s ta te wo ul d beseen as contingently post-Fordis t ( i f a t a l l ) due to the dominance of aglobal iz ing informat ional capi ta l ism in economic and social re la t ions ,with the resul t that the s ta te tends to acquire the features of the SWPR through i t s soc ia l embeddedness in th i s more encompass ing soc ia l fo rmat ion . Th e key me ch an is m in th i s case wo ul d be s t ruc tura l cou pl i ng andco-evo lu t ion un de r th e eco log ica l domi na nc e o f th e cap i ta l i s t ma rk e teconomy. Thus , i f the modern s ta te were s i tua ted wi th in an economic o r soc ie ta l sys tem wi th d i ffe ren t fea tu res , i t would acqu i re d i ffe ren t secon da ry p ro per t i e s and per fo rm marg i na l ly d i ffe ren t func t ions . In th ela t t e r case , however, the s ta te sys tem would be inheren t ly pos t -Ford i s t .I t wo uld hav e bas ic s t r uc t ura l f ea t u res tha t a re cong ru en t ' wi th th e g loba l iz ing , knowledge-based economy tha t I have iden t i f i ed above as thesubs t an t ive fo rm of th e em er g in g pos t -For d i s t accum ula t ion re g im e andwould the reby se rve to sus ta in pos t -Ford i sm as an accumula t ion reg ime ,m od e of regu la t i on and mo de of soc ie ta l i za t ion . Th e key me ch an is m inthis case would be the crit ical role of the state in securing the extra-economic condi t ions fo r cap i ta l accumula t ion and hence in shap ing andguiding the forms that capi ta l accumulat ion can take. This is the inter p re ta t ion tha t I have advanced in the p reced ing chap te rs .

In this context we can dis t inguish analyt ical ly between two differentfor ms of pos t-F ord is t s ta te : a t ra nsi t io nal reg ime an d a nor mal , conso l ida ted s ta te . A t rans i t iona l reg ime per fo rm s def in i t e func t ions in thet rans i t ion bu t has an underde te rmined fo rm. This wi l l depend on theins t i t u t i ona l legacies of th e For dis t era and the KW N S fr om case to caseand on the specific forms of crisis and struggle associated with the trans i t ion f rom At la n t ic Fo rd i sm to the g loba l iz ing , kno wl edg e- bas edecono my. ' " Th e shi ft f r om For d i sm t o pos t -Fo rd i sm would ce r ta in ly se emto involve any t ra nsi t ion al re gi me in a com plex arr ay of tasks bes idesthose typical of any capi tahst type of s ta te . These tasks der ive f rom i ts



Towards Schu mp eter ian W or kf ar e Pos tna t iona l Regimes? 2 69

loca t ion a t the in te r sec t ion be tween a conso l ida ted Ford i sm in dec l ineand a putat ive post-Fordism in the ascendant . In this sense the t ransit iona l reg ime i s Janus- faced and mus t engage in c rea t ive ly des t ruc t iveint erv ent ion s . I t mus t bo th ' rol l back the f ront i ers ' of At lan t ic Ford is ts ta te in te r ven t ion and ' ro ll fo rwa rd ' thos e fo r pos t -F ord i s t in te rven t ion .T h e first set of acti vit ie s no t only inv olv es end in g th e ex ce pt io na l, crisis-indu ced s ta te fo rms a nd func t i ons assoc ia ted wi th At lan t ic Ford i sm indec l ine , bu t a l so weakening the normal , rou t in ized fo rms of in te rven t ionassociated with the KWNS more general ly. The second set is jus t ascomplex, a lbei t for di fferent reasons. For a t ransi t ional regime must

pursue except ional measures to es tabl ish the condi t ions for a post-Ford i s t ' t ake-off as we l l a s beg in to conso l ida te the ' normal ' s t a te fo rmsand funct ions associated with post-Fordism (see f igure 7 .1) . Nei ther thefirst nor the second set of tasks is ever structurally inscribed or strategica lly p re -s c r ip ted . The y bo th invo lve chanc e d i scover ies , sea rc h p roc esse sand social s t ruggles . For the same reason this means that there can bem a n y different rou te s to a post -Fo rdi s t s ta te . We saw th e sa me cont i ngency in th e dev el op me nt of the KW N S in th e discussion of typol ogiesof wel far e re gi me s in ch ap te r 2 as wel l as the ev ent ual cons ol i dat ion of so me func t iona l equ i va le nce be tw een d i ffe ren t fo rms of we l fa re reg ime

an d At la nt ic For dis m. This indi cate s the nee d for ex post facto a n a l y s e sof ho w pos t - Ford i s t s t a tes em er ge th ro ug h s t ruc tura l coupl ing as wel l a sa t t empts a t s t ra teg ic coord ina t ion ra ther than fo r ex ante ( a n d t h e r e f o r ete leo log ica l ) ac counts o f the necess a ry t rans i t ion to pos t -F ord i sm ." I twould c lea r ly be wor th exp lor ing whe ther e ffec t ive t rans i t iona l reg imesare as wel l -sui ted to preserving the f rui ts of a t ransi t ion once i t hasoccur red . I have a l ready ind ica ted some reasons fo r be l i ev ing tha t theneo l ibera l fo rm of t rans i t ion i s uns tab le and d i ff i cuh to sus ta in wi thou ts ign i f i can t f l ank ing and suppor t ing measures .

Sinc e th es e chan ges invol ve far m or e tha n a s im ple tec hni cal f ix , i t i seasy to see why th e t ra nsi t ion f r om K W N S to S W P R is a lw ays pol i t ical lymediated and of ten diff icul t . Thus, a l though my entry point for analysingth e t ra nsi t ion is inspire d by the Mar xis t cr i t iqu e of pol i t ical econ omy ,a crit ique of polit ics is also required. This would serve not only tointerpret the pol i t ical mediat ions of the t ransi t ion (as wel l as any'co nse rva t io n-d iss olu t io n ' effects) bu t a lso th e const i tu t ive role of pol it ics in def ining the problems to which the t ransi t ion is a response andredef ining both the objects and subjects of governance. This in turn helpsto explain why, despi te a tendent ia l denat ional izat ion of the s ta te and ashif t f rom government to governance, nat ional s ta tes s t i l l have major ro les in sha p in g ho w the ec on om ic and soc ia l r ep rod uc t ion req u i re me nt sof capi ta l ar e met . For the y t ry to det er mi ne wh ic h funct io ns go up wa rd s,downwards and s ideways , and the condi t ions on which they s tay the re ;



'1

state intervention

1 1 -

V -\ . L

B

V -\ . L

B

V -J___ g

XC V -

J___ g

XC V -

-t— Q

^ _ A

XM

XI V

Time

V

Forms and levels of state interventionA = No rm al level an d for m of in ter ven t io n associate d with curr ent

phase .B = Ex ce pt io na l cr is isin duced level an d form s of s ta te int er ven t io n to

reproduce current phase in face of i ts cr is is .C = Exc ept ion al t rans i t ion al level an d for ms of s ta te int er ven t io n to rol l

back the normal and c r i s i s - induced in te rven t ions f rom prev ious pha se a nd to ro l l fo r war d the no rm al fo r ms of in t e rv en t ion associa ted wi th nex t phase .

D = N or m al fo r ms of in te rve n t io n assoc ia ted wi t h eme rg i ng phas e .

PhasesI , I I I , V =

II, I V =

Figure 7.1

E n d phas e of outgo ing a ccu mul at i on re gi me an d i ts mo de of regulat ion. High levels of s ta te intervent ion der ive f rom com

b ina t ion o f c r i s i s - induced measu res to ma in t a i n dy na mi c o f the cur ren t s t age , measures to ro l lback bo th the normal andthe cr is i s- induced ph as es of th e cur re nt s tage, and t r ia l -a nd-e r r o r e m e r g e n c e o f 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 t h a tmay be associated with the next phase.

Normal fo rms of s t a te in te rven t ion assoc ia ted wi th the new

phase af ter i t s consol idat ion and before i ts cr is is- tendenciesa c c u m u l a t e .

Schematic representation of changing forms of state inter-vention according to periodization of capital accumulation







Towards Schump eter ia n Wor kfa re Postnat ional Regimes? 2 7 3

• 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 l o c a i i o n a l - p o l i c y[StandonpoUtik) and ot l rer for ms of pla ce- bas ed compet i - - 't ion in an a t tempt to f ix mobi le capi ta l .wi t i i in the s ta te ' sown e co no mi c spa ces and tc> eni i ance th e intc ru rb an , i i t ter-reg iona l . o r in te rna t iona l compet i t iveness o f i t s own p lace- boui id capi ta ls ,

6 . M a n a g i n g t h e 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 t h e i n c r e a singly social nat ur e of pr odu ct i ve force s and tJ ic con t in uin g and

pr i vat e na tu re of the social re l a t i ons of pr odu ct i on a nd the

, appr opr ia t i on o f su rp lus l abour.• l iber al izat ion an d de re gul at i on of I 'orcign exc han ge mo ve -

me nt s and redes ign of iu tc rha t iona l f inanc ia l a rc h i t ec t u re •with the effect of in t ern at i ona l iz ing and ac cele rat ing capi ta l . '

• modi fy ing ins t i tu f igna l f ra mewo rks fo r in te rna t ion a l t r ade- a n d F O I ;

• pro tno t i ng th e spa ce of f lows in this con text by org ani zin gcondi t i ons favour ab le to the in te rna t iona l mobi l i ty o f fech-

nologic-s , indus tr ia l and co mm er ci al capi t a l , in te l l ectua l . pr op er ty , an d at leas t so me typ es of labo t i r -pow er;

• addr ess i ng the mul t i fo r mi ty o f ec ono mi c g loba l iza t ion byeng agi ng in th e r iv alr ous and confl ic tual s t ruggl e to def ine •the ru les fo r ha rmoniz ing or s i andard iz i i tg t echnolog ica l ,eco nom ic , ju r id icopol i t i ca l , soc iocu l tu ra l a nd e i^v i ronmeii -tai issues;

• add res sin g the ecol ogic al conlra dict ioj is of capi ta l ac cu mu - 'l a t ion gen era ted by the d i s soc ia t ion be t wee n rea l t r ans for

ma t io n and ap pro pr i a t i on o f na t u re and i ts inc omp le t e and' p a r t i a l m o n e t i z e d e x p r e s s i o n :

• 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 s o c ia l i za t i onof pro duc t iv e" forces tmd rel a t io ns of pr od uc t i on as ex

pressed in general t<;nsion between informat ion society and. ,in for tna t ibn economy.

7. Art icuUtt ing th e Uite rhnke d proc ess es of de - and re t err i to r ia li za t ion and de- and re iempora l iza t ion assoc ia ted wi th t l t eremaking of the spa t io - tempora l f ixes necessa ry fo r re la t ive ly

' s t ab le per i ods o f accu mula t ion .• coo per a t i ng in def in ing an d es tab l i sh ing new sca les -of

ac t iv ity (and d i s mant l ing o ther s ) , the re by resca l ing and re -ar t iculat ing var ious .s ta te powers , ins t i tu t ional formsand regulatory capaci i ies and creat ing the possibi l i ty for



2 7 4 Towar ds Schump eter ian Wor kfa re Postnational Regimes?

, ihe msc lve s an d ot he r act or s to ' j ump scales ' . This incl udes

dccentra l iza t i tm and cross-border region format ion, regional b loc format ion and par t ic ipat ing in forums for in ter-

t r i ad nego t i a t ion ;

• de ter r i tor ia l iz ing so me s ta te f imct ions by t ransfer r ing th em

fo pri va te for ms of func tion al aut hor ity ( ir iciudiflg int er na

t ional re gim es) and /o r to mobi le ma rk et forces ;

• • a t t empt ing , converse ly, , to fi t so me non- t er r i tor ia l pr ob

lems int o an are al str uct ure (e.g. , ma ki ng nat ion al state s re s-

pot is ib le for e i i forc ing in ternat ional agreetnents o i l g lobal '

warming wi th nat ional s ta tes) ;• see kin g to ma na ge the tensi on be twe en (a) th e inte rest s of

pote nt ia l ly mob i le capi ta l in reduc ing i t s p la ce- dep end enc y

a n d / i f f freeing i tself from teri ipord constraints and (b; the

state's own interest in iixing (allegedly beneficial) capital iii

i t s te r r i tory and render ing capi lafs temporal hor izons and

rhythms compatible with i ts own poli t ical routines, tempo

rali t ies; an d crisis-t endencie s. "

• pr om ot in g ne w tcii iporal hori zon s of action and new forms

of te mp or al flexibility; ,. • cop ing with the incr ease d salien ce of multi ple t ime zo ne s

(in conimerce. diplofnac}', security, etc.):

• r ea d ib ra l ing -an d manag in g the in t e r sec t ion o f t empora l i

t ies (e.g.,_ regula t ing co mp ut er -p ro gr amm ed t radhig , pro-

mut n- i g l l K 24 - l i nu i ci t> cc i i l tc n l C"insMnipl i -n . mar . iu niL '

env i ro i imcn ta l r i sk ) ;

• pr omo t in g une ven de ve lo pme nt thro ugh pohc ies for in ter-

u rban , in t e r re g i ona l and in t e rna t iona l compe t i t ion - and

seeking to compensate for this .

8. Ad dr es si ng the wid er poJit ical an d social reperc tissions of th e

I han iimg ior ins ol a pj it ar an cc ol c:i|>italisi v.on li, idic tio ns .ukl

diL-mm;is as i lKse : (c i iKdi, i lv.d in ,md ihrougli ^pccil ic foim^

of poli t ical orga niz ati on and mobilization-.

• den ati ona liz ati on of sta te an d inc rea sed rol e of slate in

in terscalar ar t icula t ion;

• des tat iza tio n of ct irrcnt state functions by tran sfer ring

thci t t to pr ivat e-pul dic par tn er shi ps or p lac e-h ound mark etforces and thereby l inking them to market -or iented tem

poral i t ies and seeking to organize th is process through

m e t a g o v e r n a n c e ;

• shap ing in te rna t ion al po hc y regimes and imidula t ing thei r

i m p l e m e n t a t i o n .



Towards Schu mpe ter ian W or kf ar e Pos tna t iona l Regimes? 27 5

6. Resolving Offe's Paradox: Capitalism and theWelfare State

As I noted in the Introduct ion, Claus Offe once suggested that 'whi le

cap i ta l i sm cannot coex is t with, nei ther can i t exis t without, the wel fa rest at e ' (1984: 153; i talics in origin al). So me mig ht dismi ss this as a m e r erhe tor ica l f lour i sh wi thou t theore t i ca l meaning or empi r ica l app l ica t ion .In fact , Offe did a t tempt to ground his argument in the nature of capita l ism; he a lso noted some of i ts pract ical impl icat ions . Indeed, his analysis is general ly compel l ing and s t i l l repays careful reading. I ts main pr ob le m l ies e lsewhe re. Fo r, l ike mu ch theor iz i ng ab ou t th e cr is is of th ewe lf ar e st ate in th e 1970s an d ea rl y 1980s, i t was sha pe d by th e ec on om icand pol i t ical hor izons of i ts t ime. 'Ôffe developed his analysis in the

c o n t e x t o f t h e K W N S i n E u r o p e , N o r t h A m e r i c a a n d A u s t r a l a s i a a n d d i dnot ful ly address the more general di ff icuhies involved in capi ta l accumul a t i on . As the At lan t ic Ford i s t sys te m has con t in ued to dec l ine ,however, we have a be t t e r unders tand ing of i t s na tu re and l imi ta t ions . I tis a lso easier to dis t i nguis h be tw ee n i ts pa r t ic ul ar fea tur es and thosecharac te r iz ing cap i ta l i sm as a whole .

Thus we are now in a posi t ion to suggest a solut ion to 'Offe 's paradox ' .On the one hand, capi ta l ism (at leas t m i ts At lant ic Fordis t form) coex is t ed wi t h the wel fa re s ta te ( in the fo rm of th e K W N S ) fo r an ex te nd ed

per i od . Th is d id no t p r ec lu de the dem ise o r we ake n in g of f i rms or sec to r stha t cou ld no t compete in the new Ford i s t -KWNS se t t ing . Even tua l ly,the Ford i s t accumula t ion reg ime and i t s KWNS mode of regu la t ion

became mutua l ly con t rad ic to ry. Th is p rompted a move away f romAt la nt ic Fo rd is m to sea rch for ne w ec on om ic and social bases for capi ta laccumula t ion ; and th i s has invo lved a par t i a l d i smant l ing (wi th duerecog ni t io n o f co mp le x ' cons erva t ion-d i sso l u t ion ' e ffec ts ) o f the K W N S.In th i s sense the emerg ing pos t -Fo rd i s t accum ula t ion reg i me canno tcoexis t wi th the KW N S . But , to com pli cat e and clar i fy ma t te rs a t one

and the same t im e, th e con t in uin g search for ne w econ om ic and social bases of capi ta l accumulat ion also involves a search for new forms of s t a te in te rven t ion tha t migh t he lp to secure the va lor iza t ion o f cap i ta land the soc ial r epr odu c t i on of l abou r-po wer. O ne cou ld pe rh ap s ca ll th i sa search for a new type of state to help to manage a new type of spatio-temporal f ix or, to sui t Offe 's paradox, the search for a new type of

\'>,c: l lus l isi I - i i K o m p l c i c CIIKI l l i c a , . l i \ i l i c - par i ty ove r l ap l . a ch

o f l l i c e a c l i \ i l i c s e a ii h e I I I I I V C L Ii i i l o t l i fl ' t rc n l 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 .




welfare s ta te . But this emphasis on the cont inui ty of s ta te involvementin economic and soc ia l r eproduc t ion i s bo th d i s ingenuous and mis leading beca use , a s a rg ue d above , the cor e o rgan iza t iona l p r inc ip les o f th eKWNS are be ing superseded in favour o f those o f the SWPR as a condi t ion for the renewed coexis tence of capi ta l ism and the welfare s ta te .

Nonetheless , there is a deeper t ruth in Offe 's c la im. There are indeed

bas ic s t ruc tura l con t rad ic t ions and s t ra teg ic d i l emmas in the cap i ta l r e lat ion that ensure that the re la t ionship between market , c ivi l society ands ta te i s a lways p rob lemat ic . Cap i ta l i s t g rowth depends essen t ia l ly on themarke t -media ted exp lo i ta t ion o f wage- labour - no t on the inheren t e ff ic iency of unfe t t e red marke t s . Marke t s media te the sea rch fo r addedva l ue bu t ca nn ot themse l ves p r od uc e it ; an d the ver y p ro ces s o f commodi f ica t ion engendered by the spread of the marke t mechanism generates contradict ions that cannot be resolved by that mechanism i tsel f .This is evident in contradict ions inscr ibed in the most basic forms of the

capitalist market society. I t was in managing, at least for a while, suchcont rad ic t ions and d i lemmas wi th in the spa t io - tempora l mat r ix o f thenat ion al ec on om y and th e nat ion al s ta te that th e 'welfa re mi x ' associa te d wi th the K W N S ma de i ts ow n con t r ib u t io n to the At l an t ic Ford i s treg ime . None t he l ess , mu ch of wha t pass ed the n as 'mark e t fa i lu re ' ( i . e. ,was discurs ively constructed as such) and to which the KWNS was

judged an appropr ia te response was ac tua l ly an express ion of deeper con t r ad ic t ions o f cap i ta l i sm. Thu s K W N S in te rven t i on of ten on ly mod if ied the forms or s i tes of these contradict ions - in t roducing class s t rug

gles into the s ta te and/or generat ing tendencies towards f iscal cr is is ,legitimacy crisis, rationality crisis, etc. And, as the capital relation develop ed in ways tha t un de rm in ed the na t ion a l ec on om y as an ob jec t o f s t a t em a n a g e m e n t , 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 r e - e m e rg e d . T h u s , i f t h e s t a t eha d fa i led to com pe ns at e for the fa i lur es of the m ar ke t wi thi n the K W N Sand, in addition, generated its own failures, i t does not follow that areturn to the market wi l l put th ings r ight . The SWPR is the la tes t a t temptto square th i s cap i ta l accumula t ion-soc ia l we l fa re ( reproduc t ion) c i rc le .Lik e the KW N S , i t ma y be con sol ida ted for a whi le ; but , l ike the SW PR ,

i t i s un l ike ly to p rove permanent .



Notes

chapter 1: Ca pita l ism a n d the Ca pital is t 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 socialagents 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 usedhere to refer to all those identities, interests, values and conventions that arenot directly anchored in the logic of any particular system and that providethe substratum and background to social interaction in everyday life, including 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 qualityof consumer goods and services) in the advanced capitalist economies willtend to rise well above any bare subsistence minimum. Whether the increaseand transformation in these use-values also represent an increased shareof total added value of production is another matter entirely and dependson the outcome of wide-ranging economic and political struggles within and

beyond the advanced capitalist social formations (on the distinction betweenwealth and value, see Postone 1993). Moreover, whilst recognizing the trendtowards increased wealth in advanced capitalist societies, one should notforget 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 ensemblegenerates opposed developmental tendencies (for example, the growingsocialization of productive forces versus continuing private control over therelations of production and surplus appropriation); second, when there is a



2 7 8 N o t es t o p p . 1 4 - 1 6

conflict or tension between tlie requirements of system reproduction andthe logic of individual action (for example, capital in general versus particular capitals); and, third, when a social relation is so constituted that ittends to produce socially structured conflicts between inherently antagonistic 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 (includinginaction) will undermine some key condition(s) of their existence and/or their capacities to realize a broader set of interests. Dilemmas can be definedat 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 thedilemma, 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 thecompliance of the labour force and is typically supplemented by other formsof 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 ideological structures and the articulation of class to other social categories.Moreover, from strategic and/or tactical viewpoints, workers, capitalists andother social forces may seek to organize labour markets and the labour

process in terms of other interests and categories, leading to segmentedlabour markets and skewed divisions of labour.

8 Innovations that enable a given enterprise to produce commodities belowthe 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 thissense, 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 reinvestment 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 increasing urgency of overcoming the obstacles to capitalist expansion involved inthe tendency of the rate of profit to fall - a general tendency that emergesinsofar as all enterprises seek a competitive edge by substituting labour-

saving machinery for wage-labour even though the latter is, according toMarx, the sole source of profit on the total capital advanced to buy capitalgoods and materials as well as labour-power; (4) the growing centralizationof capital, that is, the management of assets owned by different individualsor firms by one enterprise (for example, through joint-stock companies or banks); (5) the growing separation of legal ownership and effective control





2 8 0 N o t e s t o p p . 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 herethat Germany is distinctive because of the importance of export-orientedcapital goods industries in its overall growth dynamic. Nonetheless,Germany's overall economic performance and capacity to develop massconsumption at home depended on demand for these capital goods generated in large part by the overall dynamic of Atlantic Fordism.

3 Australia and Canada are described as small economies because, despitetheir massive territories, their population and output are relatively small.

4 PitruzeUo (1999) subjected Esping-Andersen's typology to cluster analysisand, on this basis, developed a new fivefold schema. This repeats the nowcommon distinction between the Antipodean and Anglo-American liberalmarket 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; seealso Abrahamson 1999 and, for feminist critiques, Bussemaker and vanKersbergen 1994 and Daly 1994.

6 OECD data indicate that public spending in Southern European welfarestates, Japan and the USA is particularly biased towards the elderly and thatAntipodean and social democratic welfare regimes are more biased towardschildren and working adults (OECD 1996).

7 These features are secondary in relation to the regulationist state-theoreticalstarting 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. Seealso 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 Sovietinvasion of Afghanistan and the rise of neoliberalism, led to increasedmilitary spending.

14 Capitalism also introduces new products, stimulates new wants and therebycreates new vested interests. Moreover, privatized consumerism maythreaten valorization through wage claims and excess consumer credit



N o t es t o p p . 8 9 - 1 1 2 2 8 1

expansion just as much as collective consumption does via taxation and public debt.

15 Other relevant factors here are international migration, a trend towards multiculturalism and the emergence of significant diasporas. These have helpedto 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 Jessop1990b.

Cha pter 3 : The Schump eter ian Co mp et i t ion S tate

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 toHirsch.

2 One calculation suggests that Internet use in aU sectors of the US economyshould raise productivity there by 5 per cent during 2000-10 (Brookes andWahhaj 2000).

3 On the distinction between hardware, software and wetware, see Nelson andRomer 1996.

4 Given the significance of intra-European trade, whether the wage could bea source of demand for a rescaled European Keynesianism is another issue.

5 In the longer run, returns on portfolio investment are tied to the valorization 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 1986and remains a key organizing principle in its policy work on competitiveness. It refers to 'the global efficiency of the national economy, proficient

and flexible structure of industries, the rate and pattern of capital investment, its technical infrastructure and other factors determining the 'externalities', i.e. the economic, social and institutional frameworks and

phenomena which can substantially stimulate or hamper both the productive and competitive thrust of domestic firms (Chesnais 1986: 86-7). Systemic competitiveness is equally comprehensive. Messner defines it in termsof 'the outcome of a pattern of complex and dynamic interaction betweenstates, 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 discriminate more steps in an 'event' and so enhancing opportunities to modifyits course or outcome by intervening in the event as it happens.

8 Time-space compression refers here to actual processes rather than asense of disorientation generated by spatio-temporal changes linked toglobalization.



2 8 2 N o te s t o p p . 11 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 different 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 advantage 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: anabundance of cheap wage-labour is an obvious example.

13 As Warr notes '[t]he classical theory of comparative advantage rested onsome seriously simplified assumptions: international market prices wereassumed to be known and stable; there was no uncertainty about the pricesthat would be obtained for export products, or paid for imports; there wasno learning-by-doing; technology was known; constant returns to scale prevailed; resources were all fully employed; and the characteristics of commodities were fixed and known to everyone' (1994: 4).

14 In naming just four economic theorists here, I am not implying that theseare 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 dynamicsector with potential repercussions throughout the economy (e.g., the introduction 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 construction). 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, focusing 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).

Ch apter 4 : Soc ia l Reproduct ion an d the W or kf ar e S tate

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 onthe eligibility of the recipient, including whether they are seeking work andare being reasonable about the type of work they are prepared to undertake.This activity quickly meshes with programmes designed to help individuals



N o t es t o p p . 1 5 6 - 8 0 2 8 3

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 anoverwhelmingly important feature of the system' (Robinson 2000: 87).

4 This shift was reflected in Britain by the renaming and merger of the relevant ministries: what started in the postwar period as the Ministry of Labour ,the Board of Trade and the Department of Education were eventually fusedand renamed as the Department for Ernployment and Education (and subsequently 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, whilethe 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 education as one means of disguising youth unemployment.

7 Lauder et al. also discussed two further models from East Asia: Japan reliedon highly diffused skills, medium capital investment relative to skill, and highlabour intensity to generate high levels of productivity; Singapore and SouthKorea relied on a high-skills strategy based on skill diffusion and capitalinvestment related to skill utilization in the context of rapid but unevenskills formation with high labour intensity to generate productivity.

C ha pte r 5: The Political Ec ono m y of State Res caling

1 I use post-Fordism to refer to an ideal-typical after-Fordist regime that ischaracterized by structured coherence; and I use after-Fordism to refer toactually existing after-Fordist regimes that are marked by a continuing relative 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 toghettoes, to enclaves demarcated by boundaries so sharp that they enablethe nation to acknowledge the apparently singular and clearly fenced-off differences within itself, while simultaneously reaffirming the privilegedhomogeneity of the rest, as well as the difference between itself and whatlies over its frontiers' (Tololyan 1991: 6).

3 Cyberspace is, in fact, far from evenly distributed or accessible and it doeshave 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'. Henceit is important to examine how 'multiple processes flow together to constructa single consistent, coherent, though multifaceted, time-space system'(Harvey 1996: 260).

5 This qualification is important because Atlantic Fordism involved a retreatfrom earlier levels of internationalization or globalization.



2 8 4 N o te s t o p p . 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 typologyfrom which the present sixfold typology has been developed (ESRC grantL311253032).

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.

Cha p te r 6 : F rom M ix ed Economy to Me tagove rnanc e

1 Thus there are three main explanatory approaches to the economic miracles that have occurred in East Asia: a liberal interpretation emphasizingthe emancipation of market forces, a statist interpretation that focuses onthe role of the developmental state, and a culturalist reading that emphasizes the specificities of Confucian capitahsm. Despite their differences of interpretation, however, all three approaches adopt the market-state-civilsociety paradigm. They ignore the extent to which Asian societies lack theclear institutional separation of market and state said to be typical of modern western societies, lack a clear, hierarchically organized sovereignstate, and lack a bourgeois civil society with strongly developed individualism. This means that such interpretations also ignore the networks of economic and political forces that cross-cut private-public boundaries anddeploy both economic and political resources in pursuit of specific economicand political projects; and ignore the extent to which collective rather thanindividual identities shape orientations in the lifeworld.

2 The concept of 'formal freedom' is used here to draw an implicit contrastwith the lack of full substantive freedom due to the multiple constraints thatlimit free choice. But the institutionalization of formal freedom is nonetheless a significant political accomplishment and a major element in liberal citizenship as well as a precondition for market economies.

3 Primitive accumulation is not a one-off process that ends once the conditions for the self-valorization of capital have been established, but one thathas a continuing role thereafter in capital accumulation (see de Angelis1999). Nonetheless, it also varies in importance - witness the recent upswingthrough 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, andthere can be no guarantee that such projects, though connected, will even be wholly consistent with one another' (Malpas and Wickham 1995: 46).

Ch apter 7 : Towards Schu mp eter ian W or kf ar e Pos tna t iona l Regimes?

1 In this sense nothing can be explained in terms of the tendential shift fromthe KWNS to the SWPR, the 'hollowing out' of the state, or the movementfrom government to governance. It is these shifts themselves that needexplaining.



N o te s t o p p . 2 5 2 - 7 5 2 8 5

2 Another meaning of postnational is also relevant. This is the movementfrom a nation-state (whether Volksnation, Kulturnation or Staatsnation)

towards a multiethnic, multicultural, and more 'diasporic' society withingiven national territorial borders (see chapter 5).

3 The use of ideal-types is often incorrectly dismissed as empiricist and henceas inconsistent with the type of critical realist approach adopted here. Thisdoes justice neither to Weber's own use of ideal types in his historical analyses nor to the nature of concept formation in Marxism. On Weber's idealtypes, see Ringer 1997; and on concept formation in the regulation approachand state theory, Jessop 1982, 1990b, and 2001b.

4 Thus Therborn and Roebroek discuss variant forms of the welfare state andthen declare it irreversible (under democratic conditions); their argumentdepends on a simple equation between major pubhc spending programmesand 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 nationalstate and the ideal-typical Ricardian workfare colonial regime in the EastAsian NICs in terms of their primary goals in accumulation (see Jessop1999c; and Sum 1998). A different typology could be based on how differentforms 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 rephrasedto fit with the more general approach developed in earlier parts of thechapter.

7 The labels attached to these elements are mine. The EC Bulletin cited heresimply 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 selectivity' of state structures, i.e., the extent to which specific structural formsand operations privilege the pursuit of policies favourable to Fordism.

10 It would be wrong to posit two distinct types of post-Fordist state thatsucceed one another: transitional and consolidated. This would be reminiscent 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 transition from one normal mode to the next (cf. Cutler et al. 1977). It is for thisreason that I refer to a transitional regime with an indeterminate form anda normal state with a determinate form. Even with regard to the latter, itwill prove necessary to specify its variant forms.

11 For further discussion of ex post facto analyses and how they can be developed through work on the co-constitution of modes and objects of regulation, see Jessop 1990a, 1990b, and 2001b.

12 The same point applies to the work of Poulantzas on the future of the statein the mid-1970s, which was also hmited by Atlantic Fordist horizons (seeJessop 2002a).



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Index

Note: The index combines names and subjects. Page numbers printed in bold refer to amajor discussion of a given topic. Specific page numbers (e.g. 31-3) indicate that the discussion continues over the relevant pages; non-specific page numbers indicate several separate references on two (31f) or more (31f£) pages. Ttie index is thematic so that entriessometimes refer to a relevant tlieme rather than an exact use of a given word, concept orphrase. Authors are indexed only when they are directly quoted or discussed at length, notwhen they are simply cited in support of one or another argument.

abstrac tion, as met hodol ogy 3f, 12, 15, 19,41f, 65, 67,74,142, 224-5, 249-50

acad emic capitalism 166accumulation, as dominant principle of

societalization 2 2- 3, 27 , 32f see also capital, capitalism

accumulation regi me 3, 4, 5f, 22 , 30, 34, 44,

56, 74, 80, 97,140, 147,168,217accumulation strategy 6, 29,30,44,73, 81,

93, 98,102,124,1 33, 223,250,263,267,279

and econ omic heg emon y 30knowledge-b ased eco nomy as 150,

167and spatio-temporal fix 49f

active lab our market poh cies 125, 154,155-6 ,159 ,261 ,282-3

added value 13,15 , 24, 170 ,27 7

see also valorizationAfrica 183,253after-Fordism 171,283

see also post-Fordismage and welfare 90,156,159,165,283

see also generation, pensions

agglomera tion econ omies 101,109ft, 181,191f, 256

alliance strategies 184 ,18 7,1 91- 2, 214Althusser, Louis 280anarcho-capitalism 237antagonism 85, 278appropriate ness, log ic of 8

art, as functi onal system 8Asia, see East AsiaAsia- Euro pe Meetings 115Asia Pacific Economic Cooperation

115

Atlantic Fordism 2, 8, 9, 24, 40,43,48, 50,55-8, 67, 70, 72, 74, 82, 84, 95, 97, 99,101,104f, 112,119,123,125f, 133, 140,144f, 149f, 154,172,174f, 178,180,183,197, 205,216, 23 1-6, 250 , 257, 269,279 -80 , 283f f

crisis of 2, 74, 82 -90 , 95,1 04,1 34ff , 195,197, 219, 231-2, 249-50,267, 280

governance in 231-6labour proce ss in 56, 84mo de of growth 56mo de of regulation 57



Index 3 1 3

mod e of societalization 57- 8pensions in 160

austeri ty 143, 267 see also cost containment, retrenchment

Australia 55, 58, 86 ,1 42 , 259, 280Austria 58,280authoritarian pop uli sm 176autonomy, operatio nal 41,194f, 203, 219,

238autonomy, relative 35, 194 , 227, 279autopoiesis 5, 8, 28, 34, 277

B2B 87,100,108B2C 87,100,108Baden-Wurttemberg 101,185,191ba lance of forces 6,39f, 65 ,6 9, Blf, 86f, 92,

94f, 148, 151, 168, 199-200, 203, 205,242, 249, 259, 267

Bau mol effec t in services 99Be lgi um 106, 174, 280Bell, Daniel 110,12 9benchmarking 14,109,101,116,143,162,

165, 208,272

Bever idgea n welfare state 285Biernacki, Rich ard 69Bismarckian welfare state 280, 285Blair, Tony 266Bonoli, Giuliano 6 7,1 58 ,16 0b ou nd ed rationality 227, 229, 237Bowles, Samuel 12Boye r, Rob ert 6, 57, 69breadwinner welfare mo del s 62f, 65 -6 , 72Britain 25, 47, 58, 70,106,142, 166, 174,

177, 204, 210, 244-5, 259, 283

bureaucratism 58, 87, 90 ,23 0, 23 5busines s association 72, 176 ,20 0, 234, 261business cycle, 30,76, 80,119,123,145,164

political 30,145

calculation, modes of 5, 17 ,25 ,27 , 29, 33,41,109 ,117,13 2,139, 194, 227, 267,272

Canada 55, 58, 65 ,1 74 , 253, 259, 280capital,

as invested assets 170

as object of regulation 18- 20as social relation 4, 5, llf f, 16, 21 , 48,

120, 170capital accum ula tion 3, 9f, 17

improbability of 1, 4f, 11,18 , 53 ,7 5,250

see also accumulation regime,accumulation strategy, valorization

capita l in general 13,29f, 41, 46, 53, 148,169

capital-labour relation 11 ,12 -1 3, 15 , 31-3,44f, 58, 77, 82, 88, 234, 238,271, 278

capital-theoretical approa ch 12, 147capitalism 11,1 2, 15 ,1 8, 73 ,1 10

competitive 224coordinated 49, 68, 16 1, 205, 218, 224as econ omy of time 15, 16- 17, 278informational 112, 129laws and tendencies 278 -9organized 221,235regulated 205,262uncoordinated 171,218,224

see also law of valuecapitalist mode of production 1, 3, 8, 11,

16,53,218

capitals, particular 13, 29f, 41f, 46 , 53 ,1 48earner force in lo ng waves 84, 128 , 282Cascadia 198Castells, Manuel 237 ,24 0,2 82

categories, eco nom ic 3, 12, 34centraliza tion of capital 278Cerny, Phi lip G. 281charisma 41child care 14 ,14 7,1 61China 102,183,185

circuit of capital 8, IS , 18, 21,23f, 26 ,2 8,35,49,73, 83, 98,104,108,120,147,149,279

and primacy of productive capital 23f see also fractions of capital

citizen wage 262citize nship 40, 59f, 66,71f, 79, 150 ,16 2ff ,

176,228,234duties 38participation 144regimes 72,79r ights 44,72,75,77,141,150f

see also hu ma n rights, welfare rightsci ty 49-50,119,139,186-7,198

crisis in/of 87f entrepreneurial 102, 172, 186,189

global network 50 ,10 2,1 14, 180,186,189, 235

inner 88f, 191reflexive 186,188world vs globa l 180

see also urban policy



3 1 4 Index

c i t y - r e g i o n 1 8 6 , 1 9 1 , 2 3 5 , 2 5 1

civi l soc ie t y 6 , 8 , 9 ,1 2, 32, 35ff , 61,1 49f ,

176, 219f, 222

g l o b a l 9 , 11 5

see also l i f ewor ld , pub l i c sphe re

class 49, 27 8

c l a s s a n a l y s is 3 2 , 2 7 8

Rica r d i an vs Marx ian 64

c l a ss b e l o n g i n g 3 1

c la s s con sc i ous nes s 31 , 35

c l a s s - d i v i d e d s o c i e t y 2 1 , 2 1 1 , 2 3 9

c la s s dom ina t io n , po l i t i ca l 194

class interests 31f, 35

and d i s cou r se 35 , 86

c la s s r e l e vanc e 17 , 31 f , 35

class s t ru ggle 15f , 17ff, 20 ,3 0, 3 1 ^ , 35, 38f ,

82, 87f, 90, 226f, 267, 276

and s t ructural for ms IS, 34, 36

c l a s s - t h e o r e t i c a l a p p r o a c h 1 2 , 1 4 7

Cleave r, Har r y 279

cUe n te l i s m 87 , 205

C l o w a r d , R i c h a r d 1 4 5

co-c ons t i t u t ion 3 , 9 , 11 , 10 3 ,1 34 , 231 , 245 ,

268 , 285cod e, oper at ion al 8 , 29, 31, 33, 226 , 228,

2 7 7

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

co -e vo lu t i on 3 , 5 , 25, 28, 34f f 48, 58, 63,

7 0, 7 5, 1 1 7 , 1 3 5 , 1 4 1 , 1 4 5 , 2 5 0 , 2 6 8

co he re nc e, s t r uc tur ed 5f, 10, 48ff , 54, 67,

72 ,74 f , 10 0 , 10 1 , 17 0 , 178f, 184 , 192 ,

2 0 3 , 2 3 4 - 5 , 2 5 5 - 6 3

C o l d Wa r 1 8 3 , 1 9 7 , 2 8 0

col lec t iv e b ar ga mi ng 58f , 64 , 76ff, 79, 101,

145 , 234c o l l e c t i v e c o n s u m p t i o n 9 , 2 1 , 5 8 f , 7 7 f , 8 9 ,

101, 136f , 141, 143f , 148,149,152,

16 2- 8, 197, 248, 256, 272 , 281

co l l e c t ive l ab oure r 130 , 168

c o l l i b r a t i o n 53f , 2 4 0 - 1 , 2 4 6

C o l l i n g e , C h r i s 5 4 , 1 7 9 , 2 0 2

co lon iza t ion o f sys t ems and l i f ewor ld by

capi ta l 27, 29f , 32, 109, 11 5, 11 7, 12 4,

163 ,167 , 208 , 226 , 233 , 267 , 272

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

d o m i n a n c e , l i f e w o r l d

C o m e c o n 1 8 4

c o m m e r c i a l c a pi t al 1 5 , 2 4 , 1 0 0 , 1 0 5 , 1 2 2

com mod i f i ca t ion 15 ,1 9 , 27 ,29 f , 32 , 45 , 47 ,

1 0 4 , 1 2 0 , 1 4 6 , 2 0 8 , 2 1 8 , 2 7 5

o f k n o w l e d g e 4 5 , 1 2 0 , 1 2 9 f , 2 7 1

see also c o l o n i z a t i o n

c o m m o d i t i z a t i o n ,

o f edu ca t ion 167

o f k n o w l e d g e 1 3 1

c o m m o d i t y f o r m , g e n e r a l i z a t i o n t o l a b o u r -

p o w e r 1 2 - 1 3 , 3 6

see also c a p it a l , c o m m o d i f i c a t i o n ,

f i c t i t i o u s c o m m o d i t y, k n o w l e d g e ,

l a b o u r - p o w e r, l a nd , m o n e y, v a l u e ,

w a g e f o r m

c o m m u n i t a r i a n i s m 6 8, 2 5 9

see also n e o c o m m u n i t a r i a n i s m

co mmu ni t y, ima g in ed 89, 173 , 217

c o m m u n i t y i n v o l v em e n t 1 4 4 , 1 5 9 , 1 6 5

c o m p a r a t i v e a d v a n t a g e 11 9 , 1 8 6 , 1 8 9 , 2 8 2

c o m p e t i t i o n 9 , 1 2 , 1 9 , 2 4 , 3 0 , 2 7 8

e c o n o m i c 1 6 , 1 9 , 4 2 , 6 9f , 11 3 , 11 9 , 1 3 7 ,

18 3

in t e rna t iona l 163

o l igopo l i s t i c 149

par t y pol i t ica l 79, 88

ref l exive 123, 188

r e g i o n a l 1 0 7 , 1 0 9 , 1 2 4 , 1 3 8 , 1 5 3 , 2 1 4

scal es of 187f ' S c h u m p e t e r i a n 9 6 , 2 0 5 , 2 4 8

spac es o f 181 , 184 ,19 2f

s t r o n g v s w e a k 1 0 9 - 1 0 , 1 9 0 , 1 9 2 , 2 4 1

sub jec t s o f 187f

u r b a n 1 0 9 , 1 2 4 , 1 3 8 , 1 5 3 , 2 0 0

c o m p e t i t i o n p o l i c y 2 3 6

c o m p e t i t i o n s ta t e 9 , 9 6 , 1 2 4 , 1 3 4 , 2 8 1

loca l 200

na t iona l 111

n e o l i b e r a l 1 3 2

S c h u m p e t e r i a n 9 6 , 11 9 - 3 1 , 1 3 4 f , 1 9 2 ,211 , 248

co mp e t i t i ve adv an t age 66 , 96 , 100, 108 ,

11 9 , 1 2 9 , 1 8 7 f , 2 8 2

dy na mi c vs s t a t i c 121 , 263

c o m p e t i t i v e c a p i t a l i s m 2 2 4

c o m p e t i t i v e n e s s 2 4 , 3 6 , 4 3 , 5 1 , 8 3 , 1 5 3 , 1 6 4 ,

1 7 7 , 1 7 9 , 1 8 6 , 2 5 2 , 2 8 1 f

e x t r a - e c o n o m i c 1 0 3 , 1 0 7 , 1 3 2

in t e r na t ion a l 91 , 201 , 214 , 255

Rica rd i an 153

s p a ce s o f 1 1 7 , 1 1 9 , 1 3 6 , 1 8 1s t r uc t u r al a n d / o r s y s t e m i c 1 0 8 , 11 0 , 11 9 ,

1 2 4 , 1 2 8 , 1 3 7 , 1 5 3 , 1 8 3 , 1 8 7 , 1 8 9 , 1 9 6 f ,

214 , 232 ,251 , 253 , 256 , 261 , 253 , 265 ,

2 8 1

s u p p l y - s i d e 2 0 6



Ind e x 3 1 5

compleme ntarity, structured 19 0-1complexity 7, 11, 26, 41, 53, 172 ,18 0, 217,

229, 233, 239-40and charisma 41methodological 12,42

compr omise 6, 21, 30, 36, 49 , 87, 105 see also institutionalized compromis e

conce ntrati on of capital 278concept of capital, money vs productive

68f, 70,104concertation 9, 14 1, 216, 220, 263

see also corporatismconcrete analysis, see abstractioncond ensa tion of bala nce of forces 6

see also form determination,institutional materiality, strategicselectivity

Conf ucian capitalism 28 4con junct ure 17f, 27f, 32, 35, 47f, 81, 142,

168, 259management of 47

conn ectiv e bargaining 101

see also collective b argaining

conservation-dissolution effects 97, 124-5,143,170f, 201, 251, 258, 269, 275

see also periodizationconsociationalism 174constitutive incompleteness of capital

relation 18- 19, 23, 26, 36,43f, 48, 51,73,193, 226

consumerism 188,280consumption 13, 46, 83, 102, 122, 188, 219,

277norms, 5, 13, 46,159, 219, 277

privatized 88 see also collective consumption, mass

consumptioncontext steering, see decentred societal

guidanceContinental dilemma 155contin gency 6, 8, 36contradiction 9,1 4,1 6,1 8f, 21, 27f, 34, 45,

73, 85, 91f, 103-11,146,169f, 217, 220,222, 226, 273, 277-8

fundamental contradiction as

socialization of production vs privateownership and appropriation 45,104f, 273

contradictionsprimary vs secondar y aspec ts of 48, 75f,

78,81,83, 104f

principal vs secondary 34, 48, 75 -9 , 83,91, 104f, 112,132,140,217, 280

reproduced through struggle 16f coordinated market econo my 49, 68 ,16 1,

205, 218, 224 see also corporatism

corpo ratism 9, 42, 51, 65, 69, 72, 77f, 105,159,169, 206, 218, 221-2, 224,239,244,253, 259

crisis of corporatism 87, 22 1, 23 5periodization of 221-2see also concertation, negotiated

economy, neocorporatism, social pact,tripartismcost containmen t 9, 85,158f, 168, 251 , 272

see also retrenchmentcountertendencies 7, 22, 27, 114 ,22 4, 249,

259coup ling, structural 3, 25, 28, 34ff, 58, 63,

68, 70,75,117,135,141,145, 224, 250,268f

credit 24, 57, 78, 80, 101 ,10 6f, 126, 279, 280crisis 9 ,281 ,49, 52,5 8,80 -90, 92f

Africa 183and discourse 74, 92- 3, 124East Asi a 108, 125 ,137 ,183 ,25 5econ omic 44,73f, 81-4 , 216environmental 84,88,117fiscal 84- 5, 89, 99 ,1 36 ,1 73 , 175, 226,

275

Fordism 2, 74,82-90, 95, 104, 134ff, 195,197, 219,231-2, 249-50,267, 280

Japan 182in/of 2, 70, 74, 81-2, 91f, 94, 97,124,137,

142f, 153,163f, 216institutional 177KWNS 70, 80-9 4,15 7, 231 -2Latin America 183legitimacy 94,1 75,1 77, 226, 240,1 75national mon ey 106national state 8 9,1 75 -6 ,19 3organic 175,177party system 140, 176political 87-8rationality 226

repres entatio nal 176f, 240as steering mecha nis m 49, 52, 73f, 82of US hegemony 83,17 5,195

cris is-manageme nt 26, 50f, 58, 82, 93, 95,

134,211,270crisis of 92



3 1 6 lex

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, 34critical realism 5, 142, 255

and ideal types 255and tendencies and countertendencies

34

cross-border flows 96, 106f, 126cross-border regions 51, 114 ,17 2,1 79,

180-1,182-S, 188ff, 213, 267,274crowding out 151cultural nation, see Kulturnationcurrency, 20f, 78-9,101,106ff, 125, 138,

183master and/or heg emon ic 183

see also moneycurriculum design 16 5,1 67cyberspace 108 ,13 0,1 79, 192 , 271, 283cynicism 245Czechoslovakia 185

Deacon, Bob 201,20 8,264

debordering 181debt 38, 81decentred societal guidance 52, 199 ,22 8,

236, 239, 263decision trap 202decomm odifica tion 62f, 147, 263deferral ot contradictio ns 26, 34, 51, 73,

78,118,120, 122, 220, 226,238 see also spatio-temporal fix

deindustrialization 99deliberalization 262

Delor s, Jacques 205dema nd mana gemen t 57, 59,72,76f f, 81,

83,145, 154, 205,231-2,256democracy 40, 163, 183,212f, 223, 226

associational 22capitalist 9and education 1631

demography 90,145,160 see also age and welfare, generation,

pensions

denat ionali zation of civil societ y 89f

denationalization of state 162 ,19 5-8 , 204,211f 252, 263

see also interscalar articulationDenmark 58,70,204,280deregulation 106, 138, 186f f, 236, 241 , 262,

264

destatization 158,199-200,211 see also government to governance

detemporalization 45determination

eco nom ic 2, 11 , 23f, 35, 83, 249in last instance 2, 11 ,2 3, 26, 35technological 23, 35

see also ecological dominance,overdetermination

deterritorialization 19, 45, 90, 106, 149 -50 ,193f, 195f 199, 274

devaluation 80, 183dev elop men tal state 193, 218, 284diaspora 173,1 75, 235dictatorship 37, 40, 145 , 223diffe rence , politi cs of 90, 283dilem ma 9, 14 ,1 8, 21, 27f, 32, 45, 47, 73,

85, 91f, llOf, 146,169f, 238, 278dime nsion s of state 42, 70dirig isme 64, 218, 243discontinuity 255- 7, 259

see also conservation-dissolution effectsdiscourse 7, 23, 47, 60 -1, 13 2- 3, 141,147,

179, 244-5, 258, 267, 282' and class identity 35

competitiven ess 30 ,45 , 86,108f, 121,124,132,153,164,190f, 263,272

and crisis 74, 92-3, 124and econo my 7, 45 ,7 1- 2, 86f, 103, 120,

122,132,166and the extra-discursive 7framing 47,140ff and general interest 220and globalization 7,117f, 13 3,1 46 ,1 79

and knowledg e-b ased econo my 126,250, 267

market failure 18, 31 , 276national security 60f naturalization 13, 37, 43, 60,1 82 -3and post-Fordism 9 7,1 02role in ecological domina nce 11, 25and state bo undarie s 37and statecraft 41and strategies 36

discursive selectivity 93, 281

disembedding 108,118,125 see also embeddedness

displ aceme nt of contrad ictions 26, 34, 54,73,118,120, 220

and corporatism 221-2 see also spatio-temporal fix



In d e x 3 1 7

diversified quality pro duc tio n 99division of know led ge 199division of lab our 15, 64, 141 , 221- 2, 237,

249, 277f gender 66f global 117, 195, 249interna tional 58, 66,11 5regional 181f, 184sca lar 50ff, 71f, 11 7,178, 181, 190- 1, 209,

239soci al an d technical 15, 56, 239spatial 52,117,181te mpo ra l 51f, 117

see also world mark etdomestic labour 47,79, 147, 234dot.com bub ble 24,107dua l stat e 173Dunsire, Andr ew 53

Eas t Asia 60,6 3f, 84,1 15,1 31,1 34, 137,145,178,181,184,186,198, 218,253,255,283f

Ebbinghaus, Burkha rd 68,147ecological domin anc e 11, 23,24-8,29f, 33,

35, 65, 67, 103,114,117,127, 167,194,249f, 260, 268 , 279

and discourse 11, 25and globaliz ation 11

ecological rela tion 26ecology 247

of instit uted systems 8economic development strategy 166,191,

200eco nomi c dom ina ti on 23, 28-30, 65, 83,

268 see also fractions of capital, he gemo nyecon omic he gem ony 30, 33

see also accumulation strategyeco nomi c policy 9, 31 ,4 3, 82f, 107, 127-8,

147f, 152,186,196, 207, 234, 260eco nomic s of info rmati on 111economism 2,11

see also determinationeconomy 8,114,196

Continental 253

lo ca l 72, 82f, 176,179, 183f, 235national 7, 43, 149 ,17 5, 231-2, 235 plurinational 43,180regio nal 7, 72, 82f, 176 ,17 9,1 82, 184 ,

235,253social 222

urban 182 see also capitalism, integral economy,

mi.xed economy, narrow economy,scale

edu ca tio n 8, 14 ,2 9, 46, 63, 69, 88f, 114,141,143,145,149f 152,158,162-8,1961, 200, 207 , 211, 251, 256, 261, 264,280

in Atl ant ic Ford ism 172crisis in 163nation-building 152,163f

edu ca tio n policy 186, 207, 256Edwards, Richa rd 12elect oral cycles 51, 75, 80el ec to ra te 40, 88, 140, 144, 146, 151f, 155,

176emb edd ed liberalism 209em be dd ed ne ss 5ff, 21, 23, 66, 108, 110,

118, 189, 192, 213, 217, 241, 251, 261,268

empl oyab ilit y 133, 154, 156,16 41,210employment, .see flexibility, full

employment, labour market, part-timeemployment, policy, wage

emp loy men t policy 154 see also Keynesianism

Enron 245ente rpri se cul ture 109, 127f,251,260ente rpri se form 57, 98, 100 -1, 216f 233,

278-9ent er pri sin g subjec t 14f, 156, 162, 165 ,1 68,

233,251entrepreneuria l city 102,172,186,18 9,

234, 263

entr epre neuri al region 172entr epre neuri al state 127f

see also competition stateentr epre neur ial university 166entrepreneurialism 110, 128, 133,192-3entr epre neur ship 20, 120, UI, 188-9,257envir onment 80, 84, 88,117

see also natureEs pmg -A nde rs en , G0sta 61-3, 68, 93,14 5,

147,280ethical dimen sions of hege mony 6

ethnic identity 71,141, 148f see also Volksnation

ethnic minorities 128ethnicity 4Etzkowitz , Hen ry 167Eurocorporatism 206



3 1 8 Ind.ex

Euro pe 71,102,1 15, 264-6Eu ro pe of the regions 187, 210

Eu rop ean Fre e Trade Association 184Eu rop ean integration 205Eu rop ea n Monet ary Union 206, 253, 264Eur ope an Round Table 167Eu ro pe an social policy 61, 206

see also Social EuropeEuropean Union 43,176,180, 182, 184,

187f, 191f, 197, 200, 202, 205,252-3,264-6

as governance regime 209f Eur ope ani zat ion 209, 235, 253evolutionary economics 4except ional state 223exc han ge 5, 12-13 , 52, 81, 216

see also market, market forces, pricemechanisms

exchange-value 15, 16-17, 20, 38,104,107,111,1171,263, 279

see also commodity form, market,use-value, value

exploi tat ion 12-1 3,15 ,17,1 9,46 ,129 , 225,278

export stre ngth 68, 280exports 58,68extra-discursive phenomena 4, 7ext ra-e con omi c coe rcio n 28, 36ff, 22 2-3extra-economic as supplement to the

economic 9 ,11,14, 18-19 , 23 ,28 ,33 ,35f, 45ff, 48, 86, 95,103f, 108f, 119,123,132, 141f , 146,150,153,183,189,193,209,216,219,226, 251,265,279

see also constitutive incompleteness of

capital relation, institutionalseparation of economic and politicalextra-territoriality 27

factor-driven growth 183factors of pro duc tio n 64,1 21, 218 , 282

endowment of and comparativeadvantag e 119,186 ,189, 282

fair trad e 262Fairclough, Nor man 7famiiialism 62ff, 65

famil y 14, 36f, 47, 59, 62,64f, 72, 84, 17 6,234

crisis in family form, 88 see also domestic labour

family capital ism 68family policy 85

family wage 72,8 4,23 4fataUsm 245

femi niza tion of work forc e 176fictitious com mod ity 4, 11, 13, 16,19,21f,

33, 43, 45, 104, 141f, 147, 150, 219,225 see also commodity form, knowledge,

labour-power, land, money, naturefinance capital 83, 100, 104, 106f, 118, 122,

146,153,219 see also money capital

finance-industry rel ati on s 68f, 83, 91 ,1 05 see also varieties of capitalism

financial servi ces 100, 161Finland 280fisco-financial system 84ff, 14 3,1 48 ,15 6,

159, 223crisis 84- 5, 89, 99, 13 6,1 73 ,17 5, 226

flanking meas ures an d strate gies 206, 220,238,265-6

flexible mass prod ucti on 99flexible specialization 68, 97, 99, 134 , 263flexibility 76, 83, 98f, 101,110,126, 130,

133,155,167, 244,250,260, 263lab our ma rk et 25, 76, 83, 87,154ff, 162f,

165,168,170,207,210,251, 260f, 272in pub lic sect or 144in wag e form 155

flexicurity 156 f flexploitation 156,159Fordism

transition to post-Fo rdism 84,126, 134f,249, 268-9

see also Atlantic Fordismforeign direct inves tment 191

foreign trad e 71, 78, 182 ,28 1for m anal ysis 1-2, 4, 37fo rm det erm ina tio n 6, 37, 70, 95, 195for m prob lema tizes function 4, 35, 41, 81Fo ur Moto rs Region 185,191fra cti ons of ca pi ta l 15f, 28f, 49,69f, 104f,

112,118,250 see also circuit of capital, concept of

capitalFra nc e 58, 64, 210, 280free ent erp ris e zon e 191

free tra de 183ff, 191 ,19 6, 262freedo m, formal vs substantive 218-19,

284Frie dman , Milton 258full em pl oy me nt 9, 57, 59, 61,76ff, 82, 86,

145,165,175f, 197, 234, 255, 257, 261



Inde> 3 1 9

in Eur ope an Unio n 208, 210 see also policy (employment)

func tion al systems 8, 114 ,14 1, 196, 228,233, 261

functio ns of sta te 2, 44f, 132, 195 , 216 primacy of economic functions in

SWPR 132

Gatesism 97gen der 4, 32, 37, 47, 65, 89,141,14 8f, 174,

234and welfare stat e 147

gen era l conditions of produ ction 43, 45general external conditions of production

42f, 45, 223, 271'ge ner al inte res t' 30, 37, 220, 228generation 46f, 53, 65, 90,160George, Vic 67Germany 47, 58, 70, lOlf, 106,137,173,

177,280 Nazi Ge rm an y 72

global city 50,1 02,11 4,180 ,186, 189f globa l cul ture 183globa l localiz ation 116global state 172, 196-7globa lizati on 9, 22, 28, 36, 44, 51,1 02, 106f,

113-18, 123, 126, 135,146f, 152,162,164,168,174,180f, 183,193,195, 203,212, 229,232,245, 264, 267

and neoliberalism 22, 28, 70, 91, 96,114,

118, 129,146,153,182,195and regionalizati on 150, 203 , 212an d welfare st at e 146

see also world market

glocalization 114 ,189-90 ,282glurbanization 114,117,135, 189-90Goodin, Robe rt 68governability 239governance 5 ,10 ,11 ,18 , 51-3, 63, 64 , 103,

108, 120, 148f 193, 199, 217chronotopic 52,180,190cycles 222,224,245and educ ation 166global 115,183material bases 217-24

objects of 81,117 , 231-5in shad ow of hie rar chy 202, 241 , 243

see also corporatism, internationalregime, metagovernance, mixedeconomy, network, partnership,statism

governance failure 231, 236-40, 242 see also metagovernance failure

gov ern men t to gov ern an ce 199f 203, 209f,217,284

vs gov erna nce 193,194 see also destatization

government to metagovernance 202-3,217, 242, 252 -3,2 54, 258

Gramsci , An to ni o 5, 6, 8,23, 37, 40, 50Grande, Edg ar 41Greece 40,145growth triang le 191

Hab erm as , Jfirgen 277Hal l, Pe te r A. 68, 147Hay, Colin 284Haye k, Friedrich von 225, 258hea lth policy 207hea lth syst em 29, 63, 90,143,149f, 152,

158, 207, 251, 261, 264American 152European 152,207global 264

hegemonic bloc 6, 8, 33 see also power bloc

hegemonic project, see hegemonic visionheg emo nic vision 39,4 2, 44, 49, 73, 81, 93,

98 ,175 ,177 ,223 ,267hegemony 6 , 7, 27, 30, 33, 55, 69, 73, 93,

176,220Amer ican 57, 711, 79 ,17 5,1 95, 197 , 219

bourgeois 23, 31, 263an d disc ours e 7, 92f, 250international political 55,197

neolil)eral 219reg ion al 181, 184, 253

heterarchy 52 , 221, 228,237 see also governance

Hicks, John 78-9hierarchy 52,216

see also governance, imperativecoordination

Hirsch, Joachim 281historical blo c 6, 23, 35, 63historical materialism 3

histori cal specificity 2,12f, 72 -3 ,1 48 , 255'hollow corp orat ion' 212'hollow sta te' 212'hollowing out ' 235,254

see destatizationHong Kong 282



3 2 0 Index

Hoo ghe , Liesb et 196,198ho ri zo n of ac tion 5f, 7, 30,49f, 80, 84f, 132,

138,190,227, 229-30, 274spa tia l 30, 34, 43 , llOf, 115ff, 138,1 90,

194temporal 14, 30, 34,4 3,1 09,1 32, 138 ,

194, 227, 229 -30, 274hous ing 57, 63, 85, 88f, 143,148f, 191,

264Huber, Evelyne 60, 63, 68, 91,1 47,1 51,

160Huls e, Michelle 201,208hu m an capita l 46, 49, 158,163ff hum an right s 32, 229Hungary 185hypermobile capita l 83,104,108 ,112,146,

194

ideal type 2, 55, 74,135,154, 250, 254-9,285

identity 25, 30f, 35, 90, 142 ,17 3, 229class 31, 33nat ional 89 -90,102 ,162,16 4,212, 234non-class 30f, 35

polit ics of 102, 175regional 117

ide olo gy 18, 23, 30, 35, 38, 178, 203,205f,211,218, 221,224

and class 278imag inar y 7, 73

economic 7. 37, 73,119f, 136, 180, 219,232

gen era l int ere st 30, 37, 220, 228 political 7, 37, 40,136, 219

imagined communit y 89,173 , 217immig ratio n 79f, 90, 176 ,18 8impe rativ e coord inatio n 9, 52, 222-3, 236,

254impe riali sm 25, 43, 72, 221imp ort substitu tion industrialization 60,

178in co me pol ari zati on lOOf, 137indicative plann ing 149industrial capital 83,105

see also productive capital

ind ust ria l policy 83, 196f, 205industrial relations 70 ,101 ,280inflation 24, 77, 79, 85,107,122,145,155,

161 ,175 ,183 ,197 ,231 ,261 ,267 price vs asse t 107, 256 see also stagflation

information and communicationtechnologies 98ff, lllf, 117,129,131,164, 212, 237

informationa lism 99, 102 ,12 9, 237infrastructural policy 43, 59, 77f, 186, 188,

197, 207, 232, 256, 263, 272in ne r citie s 88f, 191in nov at io n 83 ,9 6, 99ff, 106 , llOf, 113,

120-2 , 127 ,130 ,183 , 188-9 , 243, 250,258, 278, 282

an d co mp et it io n 123, 126f, 132vs mana gemen t, invention 120

innovation milieu 108,11 1,263inn ov at ion policy 83, 85, 96,127f, 256, 263,

265, 272in no va tio n ren ts 83, lOOf in no va tio n syst ems 110, 130, 136f, 256, 260instituted econ omy 110,115institutional attractor 224, 229ins tit uti ona l design 115, 128, 142, 214,

227f, 234,242, 246institutiona l econ omic s 4,1 33, 267institu tional ense mble 6, 277institutional limits to welfare state reform

85,150,168institutional materiality 7

see also strategic selectivityinstitutional separation of economic and

political 35, 36, 38, 41 , 43, 219f, 222-3,23 8

institutional thickness 109,1 17,18 0,187 ,241, 263

insti tutio nali sm 3f, 279institutionalized compromise 21, 30, 36,

49, 74 , 77ff, 80, 85, 87f, 91 , 105, 140,152,163, 234

institutions 7, 34,14 0,180 , 279and com peti tio n 189an d struggle 34- 5, 41

insurance, social 62f, 67 ,14 1, 148 ,15 2,154

integral economy 2-3 , 5,1 35- 6, 216, 222integ ral state 6,239inte llec tual com mon s 20f, llOf, 124, 129f,

168,284

inte llec tua l lab our 39, 99,129f, 167, 271 ,27 8

intellectual property 20f, llOf, 129-31, 138,166, 219, 273, 282

int ell ect ual s 6, 39, 50, 93f organic 6, 63





3 2 2 Indlex

labour-power cont.as fixed vs va ria ble cost 106

labo ur process 13, 45 , 98,140,1 47, 272and Fo rd ism 56, 84and post-Fordism 98ff, 27 3in st at e 74f, 23 3

see also product ionlabour standard 78-9labour unions, see unionsLaffer, Ar th ur 258land 13-14 ,19t t 271

rene wab ilit y 14, 21 see also nature

Latin Ame ric a 60, 64,183f law 8, 39, 42, 45, 89 ,1 14 ,1 96 , 271law of value 16-17, 24, 38,116,118learni ng 14, 25, 27, 36, 74, 11 0,1 64, 192 ,

199, 203, 236 by doing 282institutional 74organizational 36, 74strategic 278

see also reflexivity

learning society 32legitimacy 7,37,221,223

state 37, 43, 51, 54, 94,1 32,1 40,1 71,2 12libe ralis m 48, 64, 205, 210

characteristics 218liberalization 138, 236, 273lifecourse 32, 46, 15 6, 234lifelong lea rni ng 164f lifeworld 8 , 11, 23,25ff, 30f, 33, 35, 50,109,

114f 117,124,141, 217,220,229,23 3,247 ,249 ,267 ,277

vs systems 277 see also civil society, colonization

Lipietz, Alain 279List, Frie dri ch 120Listian competition 121, 183f Listian Workfar e Nation al St at e 134, 285local intern ation alizat ion 114local state 60,1 98,2 01location al policy 138,273lon g waves 30, 84, 95, 282Luhm ann, Niklas 8

on ecological dominance 279

macropolicies 43Majone, Giand omen ico 206Mao, Zhe -Do ng 280Manow , Philip 68,147

market 1,9,122dom ina nt position in 28f forces 9, 15f, 19, 24 ,27 ,36 , 73 ,1 12 ,1 41 ,

187f, 236, 276liberal 149

mar ket economy 220marke t failure 19, 21 ,2 7,3 0, 43, 111, 141,

225-6, 235, 248, 258ma rk et inadequacy 225-6 ,230, 236,254mark et proxy 29-30,14 6,158,1 62ma rke t society 220Ma rk s, Ga ry 196, 198Marx, Karl 1,3, 7, 13 ,16 ,14 1, 278-9

on circuit of capita l 8on fre edo m 219on met hod 249on self-valorization 7-8

Mar xis m 3, 8, 23, 34, 269mass con sum pti on 55, 58, 60,77ff 83, 105 ,

130, 183, 280mass education 14, 163ma ss med ia 41, 50, 93mas s pr od uc ti on 56f, 59f, 77, 83,98f, 105,

130,132,197, 261rnass society 74, 95,101,163mass worker 56means- testing 62, 87, 14 4,1 55 ,15 9, 161f med iat ion 12,15f, 19, 24f, 47, 50,112 ,187f,

220,249melting pot society 173,17 5mental labour, see intellectual labour mercantilism 60mesopolicies 43-4,176Messner, Dirk 43,1 19,2 33, 281

metaexchange 240-1metag overn ance 10, 50, 52-3, 115, 130,

202-3, 208-10, 217, 238-9, 241-3, 254meta gove rnan ce failure 10metaheterarchy 241metanarratives 94metaorganization 24 1metapolicies 43metasteering, see metagovernanceMexico 65mid dle class 87

migration 76,175f labour 150,176,188,234

militarization 32military 3,10 2,19 6,24 7, 256military-industrial complex 25, 256min imu m wage 154





3 2 4 In d ex

new constitut ionalism 208 New Deal 73'new economy' 24, 97

New La bo ur 210,266new social movements 87f,90, 116,140,

176 New Transa tlantic Ag en da 115 New Zeala nd 55, 58, 70, 86,1 42,1 74, 204,

259newly industrializing countrie s 127,145

NGOs 115nightwatch man state 94,219, 243,260nodal scale 75-7, 202, 182, 194, 254noise reduction 228, 243'n orm a! state 40,13 5, 269-70

Norway 280 Nozick, Richard 237

OE C D 154,157ff, 205, 208f, 252, 259, 264,280f

Offe, Claus 19, 37, 41, 81, 92,14 7, 227, 279Offe's par ado x 2, 10, 275-6official disc ours e 38-9

offshore eco nomy 83, 96, 106Ohlin , Bert il 60oil reg ime 80, 82, 224OPEC 82op en mg of Chin a 102, 183opportunism 245Ordnungspolitik 205orga nize d capita lism 221ort hod ox econ omi cs 4f, 225ove rde term ina tio n 11, 92,142, 78, 249,

267, 278

see also determinat ionown ers hip 64, 219- 20, 222, 228, 279f

see also capital, intellectual property, property

para dig m shift (tec hno- econ omic ) 55, 95,97, 103, 110, 126f, 133, 137

paradox 27,217Offe's 2,10 , 275-6

parallel powe r net work 199, 209 park, scie nce an d tec hno log y 130, 198

par tnership 144,148,156,159, 165-6,196,199f, 203, 233

see also corporatism, public-private partnership, social pact, social partnership

part-time employ ment 86,136

path -d epe nd enc y 25 ,2 8, 58 , 63f, 66ff, 70,85f, 92,97,134,139,151,1681,185,189, 234, 238, 248f, 254f, 258, 262 ,266-7

path-sha ping 92, 97,174 , 230 patriarchy 65,711,234 patriot ism, constitutiona l 173 pensions 60, 78, 85, 88, 90, 107 ,15 2,

159-61, 251, 283 perforated sovereignty 198

see also denationalization per io dizat io n 2, 9,65ff, 69, 91f, 94,144f,

153f, 164f, 269-70 see also long waves, sequencing,

temporality peripheral Fordism 40, 68, 145 perso nal social services 89, 149 ,15 8 petite bourge oisie 68, 79Pitruzello, Salvatore 280Pive n, Fran ces Fox 145 place 20,1071,118, 138, 187f place-boundedness 20, 108, 110, 125-6,

138,146,181, 194, 214 place -ma rke tin g 138,186ff, 191- 2, 214

^see also locational policy plurality vs unicity in th e stat e system 197Poland 185

Polanyi, Karl 23 ,69 ,11 5,2 20 see also embeddedness

policy, see competition policy, economic policy, education policy, employment policy, family policy industrial policy,infrastructural policy, innovation policy, Keynesianism, labour

market policy, locational policy,Ordnungspolitk, regional policy, social

policy, social politics, Standortpolitik,state intervention, technology policy,trade policy, urban policy

policy borrowing 168 policy churning 245 pohcy inertia 86,150 policy inh eri tan ce 150 political class dominati on 194 pohtical commun ity 6

pohtical parties 50, 70,1 51,1 58,1 76 political reg ime 3, 37 politics as functio nal sys tem 8, 196 pop ul ar capitalism 159 popular-democra tic contr ol 200 popular- demo crati c legitimacy 213



Index 3 2 5

Portugal 40,145 post-Fordism 48, 96-103, 123, 133-4, 99,

156, 162, 188, 209f, 233, 268, 283vs after-Fordism 283cont inuit y/dis cont inuit y in 97ff contradictions in 103-11disco urses about 97, 102enterprise 101lab our proc ess in 98take-off 135, 269

see also flexibility, knowledge-basedeconomy

post-Fo rdist state 268, 285 postmodernism 173 post nat ion al 172, 204, 208, 211 , 248, 252-4 post-socialism 169, 183, 185 , 253, 259Po ula ntz as, Nico s 5, 6, 8, 17, 32, 37, 40,

132,197, 200f, 211, 279, 285 poverty tr ap 87 power

political 193as social relation 8,120, 199state 28,199

structural 23, 29, 69, 226,238technology of 117, 180territorialization 193,195f

powe r bloc 177,204 ,207 see also hegemonic bloc

pri ce mec hani sms 5,16f, 27, 52, 57 pri ma cy of na ti on al scale 9, 59ff 71ff, 112,

169,172,178,193,211f 215, 234, 248,255

primitiv e accu mula tion 129f, 223, 271, 284 priv ate interest governm ent 199

private-public 37,108,149,254 pri va ti za tion 129, 144, 146, 150, 158f, 161f,

168, 206, 236,260, 262 product cycles 10 7,1 19, 123 production,

primac y in circuit of capital 23 -4nor ms 5,162 , 256

see also labour process production regime 46, 70,147,151,174,

267,280 productiv e capital 15, 19-21, 24, 29, 35, 83,

1041,119,131,146as abstract value in motion 19-21and its con cep t of capita l 69, f 18

primacy in circuit of capital 23f so ur ce of profit 20as stock of assets 19-21

productivism 118,258 produ ctiv ity 25, 56, 68,76f, 81f, 99 ,16 5f

278, 279-80, 283and Int ern et 281and welfare state 90

professions, welfare 87, 151 ,16 3 prof it 5,7,13f, 16f, 20, 29, 31, 42,56f, 80,

82ff, 123, 136,151,225,228of ent erp rise 20f equalization 17surplus 123,131,278te nd en cy of rat e of profit to fall 81

pro gr amm e inertia 150 prop ert y 20f, 42

see also intellectual property, ownership propert y relations 219,277f property rights 20f, 219-20,223 protectionism 69, 91, 175,183f, 187, 265-6 pseudo-validation 80 pub lic -p riv ate 108, 199, 205, 210, 228 public- priv ate par tne rsh ip 162, 168, 222,

234, 274 publ ic sp he re 38, 50, 111

see also civil society

R&D 127,256'ra ce' 4, 22, 32, 65 ,7 1, 89,149, 174raison d'etat 38, 41-2rationality,

communicative 25instru mental 8, 277

real subsu mption 15, 129,27 8Rechtss taat 39,218,223reco mmod ifica tion 147, 159

re di st ri bu ti on 16, 61f, 64, 68, 72, 78, 80, 89f,147ff, 150,152, 159,213, 255

intergenerational 160reflexive law 254reflexivity 52 ,10 9,1 23, 19 9, 227, 229, 236,

241,2431,254and governance 228-9

regime, see international regime, politicalregime, production regime, welfareregime

regime shopping 241regional bloc 115 , 182-3, 185regional policy 77, 83,127, 176, 179,197regional state 60,186, 191, 198, 201reg ion ali sm, 1990s vs 1930s 187regionalization 174reg ulat ed self-regulation 199, 204, 261f



3 2 6 Index

regulat ion approach 4-6, 34, 65,68f, 102,

280, 285regulation, object of 1, 7, 11, 18, 71,103,117, 134, 231-5

see also mode of regulationrelational approa ch 8

relativizatio n of scale 91, 100 ,10 4, 112-13 ,119, 169-70,172, 179-81, 201, 232,239, 248, 252, 271

religion 8,22ren t, mono poly 111

technological 83,101,120,123,131f

representation 42functional 42,221

political 42,151, 176reproduc tion 6, 9,1 1, 21,150

economic 2 ,9 ,11 ,21 ,53 ,256and lab our -po wer 149social 2, 4, 9, 21, 46, 53, 77,150, 216, 256,

275

and wage relation 46requisit e varie ty 244 -5rescal ing 44, 50f, 104, 123, 273f

state 193,2041,266welfare reg ime 147,168, 207

resistance 2-3 , 8, 27, 87, 103 ,112 , 143,169f, 220,227, 264f, 272

spontaneous 220reskillin g 161 ,164 , 188, 265resource pro cur emen t 191-2responsibility, political 40-1responsibility wage 101reiemporalization 45reterritorialization 19, 45,12 8,149 -50,

193f, 195f, 199, 273retrenchment 63, 67, 85,137, 140, 143,

158ff, 168, 267revenue 20f 220, 222Rhenish model 210

see also coordinated market economyRicardian competition 121, 183, 282Ricardian workfare colonial regime 282,

285

Ricard o, David 120, 121risk 20, 27 ,14 0, 144,1 53, 159, 161Robinson, Peter 283ro llb ac k 134, 142, 220, 236, 269

Saillard, Yve s 6Sbragia, Alb ert a 205, 210scale 34, 54, 65,118,180

of compe tition 187-8dominant 202ecce ntric ity of 180, 182, 184global 112local 112nesting 113£117,179f nodal 202,182,194,254 prima cy of na ti on al sc ale 9, 59f£ 71ff,

112, 169,172, 178,193, 211f 215, 234,248, 255

selectivity 170ur ba n 49, 60,112 see also rescaling

scale e con omi es 56f, 59, 81, 83, 98, 101,110,132,183, 205, 235,256

Sca ndi nav ia 47, 62, 64, 66f, 155, 210Scharpf, Fritz W. 67 ,2 43Schiller, Da n 14Schmi dt, Vivie n A. 67Sch ump eter , Josep h A. 120Schump eterian competition 120, 121-2,

132,183Schumpeterian competition state 96,

119-32, 134f 192, 211, 248science 8, 29,1 14,1 62,1 96sco pe, econo mies of 83, 98f, 101, 265self-o rgani zation 5, 52, 14 9, 230, 236,

241-2, 252-3 see also autopoiesis

self-valorization 7-8 , 15,19, 22, 31, 46,149,28 4

sequencing 69, 83, 145services 57sexual orientat ion 32, 65, 72

Silic on Valley 111Singapore 283Single European Market 253,265skill 20, 25, 46, 68, 98 ,11 8, 14 7,1 50 ,1 65 ,

251,263, 283muhiskilling 98

small and med ium enterp rise s 68, 79, 99,144, 233, 260

small op en econ omy 58, 68, 83, 125, 204,212-13

social basis of wel far e re gi me s 72, 78, 90,

140,142, 194soc ia l cap ita l 109f, 130, 132social categor ies 33, 49, 93soc ial co he si on 30, 37, 54, 65, 126, 132,

211ff, 243, 239, 265-6social econom y 262- 3



Index 3 2 7

Social Eu ro pe 61, 65, 205, 265-6social exclusion 31f, 49, 54, 79 ,1 00 ,1 42 ,

155, 156, 164, 191-2, 234social formation 4, 5,11,16,18, 21, 56, 74

see also societalizationsocial inclusion 31, 54, 79, 142 ,15 7social-industrial comp lex 25,1 51social mar ket econom y 64social move ments 31,5 0,15 1

new 87f, 90 ,11 6,1 40, 17 6transnational 175

socia l pa ct 157, 206ff, 221 -2, 253

social part ners hip 151, 165,171, 216soci al po hcy 3f, 9, 31, 43, 147f, 15 2, 19 7,206f 234, 260, 266

social politics 47social wage 9,76, 91,152 ,165,1 68,234 ,251socialization 277

of con sump tion 149of pro du ct ion 45,104f, 149, 273of pro duc tiv e forces 45, 69,104, llOf,

220,222f of risk 149

socially nece ssary labo ur ti me 13,15f, 278soc iet ali zat ion 16, 22, 27, 32, 42, 80, 84,

lOlf, 109,133, 263,267-8capitalist 30-2, 52, 75

software 281solidarity 8,37 ,16 2-3, 217 ,222 , 229, 234Sonyism 97Soskice, David 68,1 47, 280sov ereig nty 37, 39, 175 ,19 5,1 97f f 202f,

209-10, 212, 222, 243Sovi et Blo c 183, 197

Sozialpolitik 47sp ace 107f, 11 8,1 48

national 149 see also cyberspace, space of flows,

spatiality, spatio-temporal fix,t ime-space compression, t ime-spacedistantiation

space of flows 39, 51, 91, 104,106ff, 110,112, 118,128,138,170,193f, 273, 282

Spain 40,145, 174spatiality 109ff, 114,194

spatio-temporal fix 5-6,10,19, 21f, 27, 30,35,43, 45, 48-51, 53, 73-8, 81, 91, 98,100,103f, 112, 118,120,142, 153, 169,174, 178, 1811265,275

spending, s ta te 143-4, 151,15 7-9,251 see also social wage, taxation

Staatsnation 173, 281, 285stages of capitalism 1-2, 16,1 8, 21, 34,

44 see also periodization

stagflation 79, 81, 136, 154, 232, 235stakeh olding socie ty 156,159Standortpolitik 138,214, 273state 6 , 11 ,95

capitalist state vs state in capitalistsocie ty 3, 285

capitalist typ e 1-2, 36-42, 85, 124, 150,211-12, 223, 256, 268, 285

and collectively bind ing decisions 6, 40,223

dimensions 42, 194economic functions of 45exceptional 223Fordist state vs state in Fordist society

74general functions of 95,195-6, 199, 201,

211, 215as imagin ed political comm unit y 6as inst ituti onal ense mble 193

labour process in 74f and KW NS 59, 61 , 71-3and metago verna nce 202-3, 242-3multinational 173

post-F ordi st 268 , 285 postnati onal 204,2 08, 211and social cohesio n 37, 239, 243territorial 193,222-3transitional 162,268,285unit ary vs feder al 65, 86, 204

see also developmental state, global

state, integral state, local state, nation-state, national state, nightwatchmanstate, regional state, sovereignty,supranational state, territorialization,territory, western state, Westphalianstate

state app arat us 1, 6, 38-9, 40state ca pacities 37, 40, 65, 69, 74, 81 ,1 03 ,

133,146, 209-10,214, 227,232, 237,256

sta te coercion 37, 222-3state failure 226-7, 228, 235-6,248state form 2, 38-39, 201state interven tion 36,4 2, 57,63f, 69, 75-7 ,

89, 95, 101, 21,126,134ff 2161, 219,223, 233, 245 ,24 8, 257, 260, 262,268-76, 282



328 Index

state intervention cont. primacy of economic functions in

SWPR 13 2 see also indicative planning, interscalar

articulation, policy, statestate per son nel 6state power 1, 6, 40, 199st at e pr oje ct 6, 7, 41f 44, 49, 73, 98,1 40,

175,177, 223, 226, 267state the ory 3, 285state unity 42,1 99, 266statecraft 42statehood 195statism 140,1 69,176 ,224, 254,259

see also mixed economy, neo-statismsta tus conflict 87f Stephen s, John D. 60, 63 ,1 47 ,1 51 , 160Sto rper , Mich ael 186strategic relational approach 34-6, 279strategic selectivity 4, 5, 6, 36, 40, 41 , 52 ,

69-70, 86, 93, 95,148,151,178,213,220, 238, 242,279, 281,285

strateg y 7, 36, 70, 73, 84, 92 ,1 81 ,1 90

scalar 112 see also accumulation strategy,hegemonic vision, hegemony, state

projectstrike, capi tal 29structural coupling 3,1 41,1 45,1 51stru ctur al forms 15, 34, 36, 48, 64, 57, 104structural policy 253stru ctur al powe r 23, 29, 69, 226, 238

see also ecological dominance, economicdominat ion

struc tural selectivity 27 9,28 1 see also strategic selectivity

stru ggl e 8, 30, 47, 52 ,7 0, 87f, 92 ,12 4, 179,277

class 15f, 17ff, 20, 30, 31-5, 35, 38f, 82,87f, 90, 226f,267,276

overflows forms 34 -5 polyvalence of 31

subordination of social to economic policy152-68, 248, 251f, 258, 260, 272

see also workfare

subs idiar ity 65, 199, 209subsumption,

forma l, of kn ow led ge 129re al 15, 129, 278

superimperialism 60superprofit 13

superstate 196supply-side 107,137supra natio nal sta te 196sur plu s profit 123surpl us value 16, 29, 69 ,1 01 , 111, 278

absolute 278relative 278

Swe den 60, 70 ,10 6, 257, 280Switzerland 280SWPR 10, 125, 135ff, 142, 154, 169, 20 1,

204, 211, 215, 250-4, 264-78contrast with KW NS 255varieties 10 ,259-64

Swyng edouw, Er ik A. 178systems, function al 109, 115, 117, 124 ,14 1

Taiwan 28,184targeting 144,155f tax state 38, 84taxa tion 21 , 37, 66f, 69 ,7 9, 81, 84, 86 ,1 43 ,

146,148,150f, 153ff, 157,160f, 211, 223cuts 144, 146,152relief 148

resistance 30-1, 85 152,170, 235' Taylor-Gooby, Pe te r 67techni cal composit ion of capital 280technology 183

of po wer 232 see also information and communication

technologiestech nol ogy policy 85, 96,127 ,206f, 272tech nol ogy tran sfe r 126f, 263, 265 -6, 273teleology 72, 135, 269temporality 80, 109ff, 114,118, 125, 180,

190,194, 239 see also time

ten den cies 16, 21 , 34, 48, 249, 259doubly tendential nature of 34

see also countertendencieste nd en cy of th e rat e of profit to faU 278territorialization 19,274

of politica l po wer 193, 196f terr i tory 173,179 ,180,18 1-2,193 , 230,

239, 252identity 191

extra-territoriality 27Thatc herism 177,1 83, 210, 244, 266therapeuti c state 89Th ird Ita ly 101, 137thi rd sec tor 62, 64, 90, 99,148f, 151, 159,

162, 233f, 262



Index 3 2 9

t ime 15,17,20,144capitalism as ec on om y of 15, 17

horizo ns 14, 30,144 see also conjuncture, long waves,

periodization, spatio-temporal fix,temporaUty, time-space compression,time-space distantiation

time -spa ce compression 18,26f, 1 1 0 , 11 2 ,114,117f 123, 127, 132,139,180,194,237, 262, 274

tim e-s pac e distantiation 18, 26f, 112, 114,117f 132,139,180,194

Tomm el, Ingebo rg 210Toyotism 97tr ad e policy 196tra ding nat ion s 60, 178transitio nal labo ur mar ket 157transitional regime 162, 26 8-9 ,28 5transnational banks 82, 114, 116 ,125trans natio nal capitalist class 209transversal rela tio ns 191trends an d countert rends 9,19 4-5, 210-1 1,

216f, 249-50tr iads 107, 112f, 114f, 11 7, 12 4, 172, 179,

181-2, 184,212, 214,253-4trial-an d-erro r appro ach 2, 30, 73,102f,

124,168,178, 246,259,265, 269triangle , growt h 198tribalism 89,116,183tr ipar t ism 64,204,221,235tri ple heli x 167TRIPS 129f trust 110typology, welfare state 145, 218

see also ideal type

ubiquification 119, 190uncoor dinate d marke t economy 171, 218,

224unemployment 84f, 145, 148, 153,154ff,

163,176 benefits 60, 62, 67, 81, 85,154,1 56,159 f,

282trap 87

une qua l excha nge 131

unev en dev elop men t 131,18 2, 206f, 214welfa re sta te 144f

unicity vs plurali ty in stat e sys tem 197unilateralism 197

United Kingdom, see Britainuni vers itie s 109, 129, 163, 166 -8

autonomy 167urban policy 77 ,17 6,1 79USA 25, 55, 58, 65, 71f, 79 ,1 01 , 106, 111,

129, 137,142,166, 174,181, 183,198,253

hea lth car e 152hege mony 102,12 5,131, 259 New Deal 73

use-value 15, 16-17, 19f, 104,107, 111,117f, 263, 277,279

utilities, univ ersal 130

validation of decisi ons 24 see also pseudo-validation

valorizati on 16, 29, 104,109f value 13,24

law of 16-17, 24, 38,116,118 see also exchange-value, surplus value,

use-valuevalue for money 227value form, dominance of 24, 263-4varieties of capitalism 1- 2, 4, 16 ,2 1, 34,

41, 44, 55, 70,102,106,118, 218ven tur e capita l 198, 200virtual econ omy 107,127virtual firm 100,111virtual region 115 , 185,189,1 91, 214virtuous circle of Fordism 57, 76- 7,1 36 ,

279-80Volksnation 173, 281, 285

wage Uff, 13, 81, 83, 155

as co st 13, 20f, 46, 48 , 83, 91, 1 05, 146 ,152 ,157 ,170 ,234 ,251as dema nd 13, 20f, 46, 49, 76, 105 ,14 6an d Ford ism 48, 57and post-Ford ism 4 8in pub lic sector 143and social reproduc tion 46

see also family wage, responsibilitywage, social wage

wage cuts 146 ,160 ,16 5wag e form 11, 75ff, 81ff, 104,107,124ff,

279wage relati on 4 6,1 01war 28warfare , neglect of 3, 247

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Jessop, Bob - The Future of the Capitalist State

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