jessop 1993 keynesian welfare state

Towards aSchumpeterian

VVorkfare State?PreliminaryRemarks onPost- Fordist

Political EconomyBOB JESSOP

The Keynesian welfare state regimes which emergedduring the long postwar boom are widely held tobe in terminal decline; but there is far less agree-

ment upon the nature of the successor to such regimes.While this is too large a topic to be covered in any detailhere, I want to advance three general and somewhat specula-tive claims about current changes. First, a tendential shiftis under way from the Keynesian welfare state (whereverit was established) to the Schumpeterian workfare state;second, national states in advanced capitalist economies aresubject to an admittedly uneven three-way 'hollowing out';and third, both tendencies are related to the transition inwestern economies from Fordism to post-Fordism. Althoughclearly linked to the same overall economic dynamic positedin the third claim, the first two claims can nonetheless beconsidered independently. Conversely, all three claims couldalso be condensed into the single audacious aphorism thata "hollowed-out" Schumpeterian workfare state provides thebest possible political shell for post-Fordism. The basic as-

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sumptions and ideas involved in all four claims are sum-marized in this paper's first section. Further sections thencontextualize the tendential shifts themselves, outline themechanisms generating them, and outline three ideal-typicalvariant forms of the emerging regime. This theoretical workwill also help to make the initial claims more concrete andindicate how they might be utilized in further research.

I. The Four Claims Outlined This paper is aimed at in-troducing some state-theoretical concerns into regulationtheory rather than introducing regulationist concepts intoanalyses of the state. Its starting point is the insight that,since economic activity is both socially embedded and so-cially regulated, an adequate account of the economy mustadopt an "integral" approach. Thus the following analysisis concerned with the expanded economic and socialreproduction of capitalism or, to paraphrase Gramsci, the"economy in its inclusive sense."! This can be defined intum as comprising an "accumulation regime + mode of so-cial regulation." The state is an important structural andstrategic force in this regard and has major roles in securingthe expanded reproduction and regulation of capitalism.sTwo general functions are particularly important here: first,helping to secure the conditions for the valorization of capi-tal; and, second, helping to secure the conditions for thereproduction of labour-power. Indeed these two broad func-tions are incorporated into the very definitions of theKeynesian welfare and Schumpeterian workfare states.Thus, while the terms 'Keynesian' and 'Schumpeterian' ineach concept refer to the distinctive form of state economicintervention characteristic of a given mode of social regula-tion, the terms 'welfare' and 'workfare' refer to the distinc-tive form of social intervention favoured by the state. Fromthe sort of integral economic viewpoint adumbrated here,the Keynesian welfare state (or KWS) and Schumpeterianworkfare state (or SWS) are likely to correspond to differentaccumulation regimes. Thus I hope to show that, whereasthe former was an "integral" element in the expandedreproduction of Fordism, the latter could become just as

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"integral" to its still emerging successor regime.3 But letme first summarize the four claims noted above.

/.1 - The Schumpeterian Workfare State The first claim,that there is a tendential shift from the KWS to the SWSunderway, rests on two widely accepted notions: that theKWSwas a key structural support of the long postwar boom;and that it has since entered into crisis along with its as-sociated accumulation regime. In abstract terms the distinc-tive objectives of the KWS regarding economic and socialreproduction were to promote full employment in a rela-tively closed national economy primarily through demand-side management, and to generalize norms of mass con-sumption through welfare rights and new forms of collectiveconsumption. The concrete forms of the KWS and thespecific ways in which such objectives were pursuednaturally varied from case to case. Nonetheless, as the crisisof the KWS unfolded and efforts to restore the conditionsfor postwar growth through economic austerity and socialretrenchment failed, the emphasis shifted to attempts torestructure and reorient the state in the light of significantlychanged perceptions of the conditions making for economicexpansion. What is emerging, hesitantly and unevenly, fromthese attempts is a new regime which could be termed, albeitrather inelegantly.f the Schumpeterian workfare state(SWS). Its distinctive economic and social objectives canbe summarized in abstract terms as: the promotion ofproduct, process, organizational, and market innovation; theenhancement of the structural competitiveness of openeconomies mainly through supply-side intervention; and thesubordination of social policy to the demands of labourmarket flexibility and structural competitiveness. Althoughthe distinctive features of the SWS emerge most clearly incontrast with the KWS, it is important to note that the ap-pearance of the SWS is not dependent on the presence ofany more or less crisis-prone KWS. While this developmentmay be typical in European cases for instance, there areimportant East Asian examples which do not fit such a pat-tern. Indeed these latter examples are often taken nowadaysas models for crisis resolution in the West.

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/.2 - The "Hollowing Out" of the National State In eachof the core triad regions, in North America, the EuropeanCommunity, and East Asia, the national state is subject tovarious changes leading to its "hollowing out." This doesnot mean that the national state has lost all importance: farfrom it. Indeed it remains crucial as an institutional siteand discursive framework for political struggles; and it evenkeeps much of its sovereignty - albeit primarily as a juridicalfiction reproduced through mutual recognition in the inter-national political community. At the same time its capacitiesto project power even within its own national borders arebecoming ever more limited due to a complex triple dis-placement of powers upward, downward, and, to some ex-tent, outward. Thus, some state capacities are transferred topan-regional, pluri-national, or international bodies; othersare devolved to the regional or local level inside the nationalstate; and yet others are assumed by emerging horizontalnetworks of power - regional and/or local - which by-passcentral states and link regions or localities in several societies.These shifts are also associated with the blurring of thestate's boundaries and its growing involvement in decentral-ized societal guidance strategies rather than centralized im-perative coordination. Moreover, while such shifts some-times emerge as conjunctural products of short-term crisismanagement or displacement strategies, they also correspondto long-term structuralchanges in the globaleconomy.At stakehere is not just a series of formal or tactical shifts but alsothe practical rearticulation of political capacities. For thenational state's tendentialloss of autonomy creates both theneed for supranational coordination and the space for sub-national resurgence. The precise mix of the three main formsof "hollowing out" will clearly vary with the existingeconomic and political regime, the structural constraints itconfronts, and the changing balance of forces.

/.3 - From Fordism to Post-Fordism The general consistencyof these shifts across a wide range of economic and politicalregimes suggests that more than mere happenstance or localeconomic and political conditions are at work. Hence thethird claim is that these two shifts are closely related and

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grounded in a set of processes which is often, if somewhatmisleadingly, characterized as the transition from Fordismto post-Fordism. However, while this characterization hascertainly helped to contextualize and shape the responsesto the crisis of the KWS, it also obscures the real complexityof the changes grouped thereunder, as well as the problemsfaced in finding anything like a comprehensive solution.Thus the changes involved need closer examination. In ad-dition to what might well be termed a techno-economicparadigm shift from Fordism to post-Fordism, attentionshould also be paid to such factors as the rise of new tech-nologies, the accelerated pace of internationalization, andbasic shifts in the regional forms of global and nationaleconomies. All four trends are closely connected. Togetherthey undermine the KWS's effectiveness as a force ineconomic and political regulation (see section II below) andset the parameters within which solutions for the crisis ofthe postwar economic order must be sought.

1.4 - The Best Possible Political Shell? This leads to thefourth, and most audacious, claim: namely, that the "hol-lowed out" SWS could be regarded as the best possiblepolitical shell for post-Fordism. There is an obvious riskwith this metaphor. For it might encourage the mistakenidea that the state is merely a protective political shell insidewhich an economic kernel might germinate securely. Anintegral economic viewpoint, with its explicit focus on thestructural coupling and contingent co-evolutions of accumula-tion regimes and modes of social regulation, excludes anysuch interpretation. It does suggest the possibility, however,of attempting to justify this claim in at least three ways: byshowing that KWS regimes were structurally coupled inmajor respects to the growth dynamic of Atlantic Fordismsand that the transition to the SWS helps resolve the principalcrisis tendencies of Atlantic Fordism and/or its associatedKWS regimes so that a new wave of accumulation becomespossible; that the distinctive aspects of the evolving SWScorrespond in crucial respects to the emerging growthdynamic of the new global economy and contribute sig-nificantly to the overall shaping of this dynamic considered

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from an integral viewpoint; and that the most competitiveeconomic spaces in this emerging order have actuallypioneered this form of state and have thereby gained aparadigmatic, exemplary status for restructuring efforts else-where. All three lines of analysis could lend credence tothe (now redefined, less metaphorical) claim that the "hol-lowed out" SWS is peculiarly well-suited to promote andconsolidate (and not merely to encapsulate) the still evolv-ing post-Fordist, "integral" economic order - with all thatthis implies for the losers as well as those who benefit fromthe process. Just such an experimental threefold demonstra-tion is attempted below.

II. Changes in the Global Economy and State Functionsas Context and Cause This section puts all four claimsinto their general, indeed their global, economic context bynoting the implications of the above-mentioned trends forthe "integral economic" functions of the capitalist state. Itis far from my intention here to imply that states can alwaysdevelop (let alone that they already have) the abilities toreorganize themselves and successfully realize these newfunctions. Nor am I trying to suggest that a post-Fordistaccumulation regime with an appropriate mode of socialregulation could ever be really trouble-free. Instead I wantto highlight the magnitude of the task facing states in adapt-ing to the new conditions. Moreover, once our attentionturns to specific regimes facing specific economic andpolitical conditions, one can (and should) engage in detailedstudies of the inevitable dilemmas, contradictions, costs, andcrisis tendencies involved in specific responses to thesevarious trends. Before reviewing possible forms of response,however, I will consider some significant implications ofthe current economic restructuring.

The first crucial trend is the rise of new core technologiesas motive and carrier forces of economic expansion. Theseare creating whole new industrial sectors and, through theirown cross-fertilization and/or their incorporation into tradi-tional sectors, helping to widen product ranges. Masteringthem is critical to continued growth and structural competi-tiveness. Yet many are so knowledge- and capital-intensive

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that their development demands extensive collaboration (es-pecially at precompetitive stages) among diverse interests(firms, institutes of higher education, public and private re-search laboratories, venture capital concerns, public financebodies, etc.). This is recognized not only in many advancedcapitalist economies but also in many newly industrializingcountries. Indeed, given increasing competitive pressuresfrom NICs on low cost, low tech production, and even insimple high tech products, the advanced capitalist econo-mies must move up the technological hierarchy and spe-cialize in the new core technologies if they are to maintainemployment and growth. States have a key role here inpromoting innovative capacities, technical competence, andtechnology transfer so that as many firms and sectors aspossible benefit from the new technological opportunitiescreated by research and development activities undertakenin specific parts of the economy." In addition to specificareas of intervention or guidance, the state must increasinglyget involved in promoting effective national and regionalinnovation systems. And, given the budgetary and fiscalpressures which arise as their national economies becomemore open, states must shift industrial support away fromvain efforts to maintain declining sectors unchanged. In-creasingly resources must be directed towards promotingso-called "sunrise" sectors, and/or restructuring so-called"sunset" sectors so that they can apply new processes,upgrade existing products, and launch new ones. In all casesthe crucial point is that state action is required to guide thedevelopment of new core technologies and widen their ap-plication to promote competitiveness.

Secondly, as the internationalization of monetary and realflows proceeds apace, involving ever more firms, markets,and countries, states can no longer act as if nationaleconomies were virtually closed and their growth dynamicwere autocentric. On the one hand, internationalizationtrends (and the leading role of multinational corporationsand transnational bodies in advancing them) mean that firmscan escape national control, and that national economicpolicies no longer work so well. In particular many macro-economic policy instruments associated with the KWS lose

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their efficacy with growing internationalization, and musttherefore be replaced or buttressed by other measures ifpostwar policy objectives such as full employment,economic growth, stable prices, and sound balance of pay-ments are still to be secured. On the other hand, it no longerappears so self-evident that national economic space pro-vides the best starting point for pursuing growth, innovation,or competitiveness. Instead the problem becomes one ofmanaging the national economy's insertion into the globaleconomy in the hope of securing some net benefit frominternationalization. Small open economies already facedthis problem during the postwar boom, of course; now eventhe larger, and previously relatively closed economies havebecome absorbed into the global circuits of capital througha variable combination of extraversion and penetration. Thishelps to explain the paradox that, as states lose control overthe national economy as an object of economic management,they get involved in managing the process of internationaliza-tion itself and thereby further undermine national economicautonomy.This not only involves advancing the interests ofhome-based multinationals but also means creating condi-tions favourable to inward investment. In both cases regardmust be paid to the overall impact on the nation's tech-nological and economic competitiveness. In addition, statesmust get involved in redefining the international frameworkwithin which such economic processes occur. Among manypolicy objectives here are: establishing new legal forms forcross-national cooperation and strategic alliances; re-regulat-ing the international currency and credit systems; promotingtechnology transfer; managing trade disputes; defining a newinternational intellectual property regime; and developingnew forms of regulation for labour migration.

Thirdly, there has been a paradigm shift from a Fordistgrowth model based on mass production, scale economies,and mass consumption to one oriented to flexible produc-tion, innovation, scope economies, innovation rents, and morerapidly changing and differentiated patterns of consumption.What is at stake today in international competition is theability to switch quickly and easily among innovative pro-ducts and processes with each new product offering better

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functional qualities and improved efficiency in production.It is no longer a question of competing through economiesof scale in the production of standardized goods and servicesusing dedicated production systems, but of competingthrough the capacity to introduce flexible manufacturing orservice delivery systems and exploit the resulting economiesof scope. This shift has important implications for enterpriseand sectoral strategies, even where Fordism itself was notpreviously dominant in given sectors or national economies.Indeed, this shift provides a major interpretive frameworkfor making sense of the current crisis and imposing somecoherence on the search for routes out of the crisis. It isin this context that the transition to a post-Fordist techno-economic paradigm is prompting a reorientation of thestate's principal economic functions. For the combinationof the late Fordist trend towards internationalization andthe post-Fordist stress on flexible production encouragespolicy makers to focus on the supply-side problem of in-ternational competitiveness and to attempt to subordinatewelfare policy to the demands of flexibility. This is theshift from the KWS to the SWS. In identifying this shift Iam not implying that the "motley diversity" of politicalregimes will disappear with the transition to post-Fordism.A general trend does seem to be emerging, however, bothin official discourse and in de facto shifts in forms of stateintervention.

Fourthly, the macroeconomic global hierarchy is beingredefined with growing awareness of the central importanceof three supranational growth poles. These are based on theregional hegemonies of the USA, Japan, and Germany andreflected in attempts to create a North American Free TradeArea, a European Economic Space, and an Asian PacificEconomic Community. There is already a major materialbase to these latter developments with the growing intensityof internal trade in each bloc. Nonetheless, the seeminglyinevitable rise of such "triad power" is confronted with threeimportant countertendencies: the growing interpenetrationof the so-called triad powers themselves; changes in thenational hierarchies within each triadic region; and the gra-dual re-emergence of regional economies within national

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economies. What we are actually seeing is a reshaping ofthe hierarchy of regions on all spatial scales from "worldregions" (triads) through international regions and nation-states to intrastate regions and localities.f Transnationalfirms and banks are major players in this reshaping processbut, as noted above, they are often aided and abetted inthis regard by national states. As these complex and con-tradictory processes unfold, however, states must also tacklethe many domestic repercussions of global restructuring.This requires the repositioning of states in the internationalsystem as well as the restructuring and reorientation of stateagencies at home. Nonetheless the "hollowing out" of thenational state thereby generated typically acquires a markedregional dimension, as state apparatuses at different levelsseek to move beyond simple reaction to adopt a proactiverole. This in tum indicates the need for clear alliancestrategies among states on different regional scales to pro-vide the basis for economic and political survival as theimperatives of structural competitiveness make themselvesfelt. The nature of these alliances will vary with the positionof the economies concerned in the international hierarchy.Thus, while a small open economy might well seek closerintegration with the dominant economic power in its im-mediate triadic growth pole, the dominant power itself mightwell seek not only selectively to bind neighbouring eco-nomies into its strategic economic orbit, but also to enteralliances with other dominant triad powers. Exactly howthese strategies work themselves out cannot be determinedat this level of analysis, however, depending as it does onthe changing balance of forces and different modes of stra-tegic calculation. This in tum will fundamentally affect thevarious forms taken by "hollowing out."

III. Once more on the Schumpeterian Workfare State Insuggesting the label, Schumpeterian workfare state, for theemergent state form I have deliberately chosen a term tomake the contrast with the Keynesian welfare state as starkas possible. In many cases, of course, the opposition willbe less marked. Yet this contrast can be justified on bothcritical and heuristic grounds. Many commentators suggest

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that international Keynesianism would restore the condi-tions for global expansion and/or that the welfare state isan irreversible historical achievement.? My aim is to showthat, while the capitalist state is necessarily involved insecuring the conditions for economic and social reproduc-tion, this involvement need not take a KWS form. Indeed,the current restructuring in capital accumulation in its in-clusive sense would actually seem to require a break withthe KWS. That some states may be unable to effect thenecessary changes would only undermine this claim if theycould compete successfully in the new global economywhile retaining this earlier form.

Nonetheless, to avoid misunderstanding, it is worthmaking two definitional remarks. First, in referring to'Schumpeterianism' to characterize the state's new role ineconomic reproduction, I do not wish to suggest that Schum-peter himself advocated the SWS in all its complexity andvariety. Nor, of course, did Keynes do this for the KWS.In both cases we are dealing with authors of an emblematicbody of work: Keynes was often cited to justify the in-creasing concern with the state's possible role in securingfull employment; Schumpeter is being rediscovered as atheorist of the motive force of innovation in long waves.Thus the contrast between the two economists is far morespecific than wouldbe implied in any simple contrast betweenconcern with the demand- and supply-side.For Schumpeter'sinterest in the latter differed markedly from that ofeconomists such as Hayek, Friedman, or Laffer. It is thesupply of innovation that was central to his analysis ofcapitalist growth dynamics rather than the supply-side im-plications of liberty, money, or taxation. And it is innova-tion-driven structural competitiveness which is becomingcentral to the successful performance of the economic func-tions of the contemporarycapitalist state. Similarly, in adopt-ing 'workfare' to identify a second key aspect of the emer-gent state form, I am not claiming that a precondition ofwelfare support for the able-bodied is to work, retrain, orprove a willingness to do so. Instead I want to highlight amajor reorientation of social policy: away from redistribu-tive concerns based on expanding welfare rights in a

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nation-state towards more productivist and cost-saving con-cerns in an open economy. In this regard, the more usualmeaning of workfare is merely a special, neoliberal exampleof the more general trend in the reorganization of the state'srole in promoting social reproduction. For the moment Iwant to concentrate on the general trends and defer a reviewof their variant forms.

The distinctive features of the Schumpeterian workfarestate are: a concern to promote innovation and structuralcompetitiveness in the field of economic policy; and a con-cern to promote flexibility and competitiveness in the fieldof social policy. Naturally the SWS will also express otherconcerns and perform many other functions typical ofcapitalist states but it is the combination of these twin con-cerns, together with their implications for the overallfunctioning of the state which differentiate it from othercapitalist regimes. Together they become an integral partof its accumulation strategy and are also reflected in thestate and hegemonic projects with which it is associated.Thus, while most advanced capitalist states have some formof innovation policy, the SWS is distinctive for its explicit,strategically self-conscious concern with promoting innova-tion and for its broad interpretation of the factors bearingon successful innovation. Likewise, while most advancedcapitalist states have some form of competition policy, theSWS is distinctive for its explicit, strategically self-con-scious concern with the many and varied conditions whichmake for structural competitiveness in open economies.Similarly, turning to SWS social policy, while concern withtraining and labour market functioning has long been a fea-ture of state involvement in the social reproduction of labourpower, flexibility has been accorded greater weight and ac-quired new connotations in both fields. Complementingthesevarious new strategic concerns in economic and socialpolicy has been the demotion or even rejection of other,earlier policy objectives. Thus, while the KWS was com-mitted to securing full employment, the SWS demotes thisgoal in favour of promoting structural competitiveness.Similarly, while the KWS tried to extend the social rightsof its citizens, the SWS is concerned to provide welfare

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services that benefit business with the result that individualneeds take second place.

Implicit in the preceding analysis is the crucial workingassumption that the rise of the SWS is reflected in, andreinforced by, changes in economic discourse, modes of cal-culation, and strategic concepts. Such changes are an im-portant correlate of the restructuring and reorientation ofthe national state in the current period. They provide animportant mediating link between the structural changes inthe global economy and the transformation of the state byproviding an interpretative framework within which to makesense of these changes, the crises that often accompanythem, and the responses which might be appropriate to them.One particularly telling discursive-strategic shift in the tran-sition from the KWS to the SWS is the demotion of concernwith "productivity" and "planning" and the emphasis nowput on the need for "flexibility" and "entrepreneurialism."It is the articulation of these and related discursive-strategicshifts into new accumulation strategies, state projects, andhegemonic projects and their capacity to mobilize supportand deliver effective state policies that helps to shape therestructuring and reorientation of the contemporary stateand to produce different regulatory regimes (see section VI).And it is precisely the need for such mediation (as well as,for example, variability in state capacities) which ensurethat successful consolidation of a Schumpeterian workfarestate is far from automatic.

Let us now consider how the respective economic andsocial functions of the KWS and SWS are reflected in twomajor structural (as opposed to discursive-strategic) featuresof the two regimes. These concern the articulation of themoney, wage, and state forms. The money and wage formsboth embody the structural contradictions of capital as asocial relation and thereby give rise to strategic dilemmas.One expression of this in the money form is the fact thatit can circulate both as a national money and as an inter-national currency. In the case of the wage form, there is acontradiction between its function as a cost to capital anda source of demand. These contradictions are reflected in

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quite different ways in Keynesian welfare and Schum-peterian workfare regimes.

Firstly, whereas money functions primarily as a nationalmoney in the KWS and its circulation within the nationaleconomy is controlled by the national state, in the SWSthis position is threatened by increasing cross-border flowsof financial capital and their adverse implications formonetary control by national states.U' Indeed the crisis ofnational money is a major contributory factor to the crisisof the Keynesian welfare state. Recognition of nationaleconomic vulnerability to massive and volatile currencymovements is central to the SWS. For, if the strength ofthe national money increasingly depends on the competitivestrength of the national economy in an increasingly openworld economy, then economic intervention must increas-ingly take the form of guiding supply-side developmentsrather than trying in vain to manage the demand side. Intum this reinforces the need for spending to serve productiveand competitive needs even in the erstwhile welfare state.

Secondly, while the wage functioned primarily as asource of demand within the KWS, it is seen primarily asa production cost in the SWS. In the former, growth inwages served capital's interests in attaining full capacityutilization in a closed economy in which mass productionwas dominant. Provided that wages and productivity in theconsumer goods sector moved in a similar range, this wouldoffset any tendencies towards a crisis of underconsumptiondue to insufficient demand or a wage-induced profitssqueeze. I I The KWS contributed to this result by legitimat-ing collective bargaining, generalizing norms of mass con-sumption, and engaging in contracyclical demand manage-ment. But the growing internationalization accompanyingthe final stages of Fordism transforms this situation: wagesare increasingly seen as a cost of production. Where thisis seen as a fixed cost (e.g., core workforces in Japan orGermany), this can encourage innovation and reskilling inorder to retain a high-wage, high-growth accumulationstrategy. Conversely, where it is seen as a variable cost (asin the differently organized British and American cases),"short-termism" and "hire-and-fire" may result in the hope

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that neoliberal flexibility may help to sustain competitive-ness. Since such remarks highlight the need to discussvariant forms of the SWS, however, further discussion willbe deferred to the appropriate section.

Let me end with two more substantive caveats.R First,in identifying the SWS with supply-side intervention, I amnot implying that it can safely ignore the demand side. Itis quite clear that the continuing crisis of Fordism and thecurrent transition to post-Fordism are both linked to pro-blems on the demand side. Excessive budgetary deficits,overly restrictive monetary policies, and frequent and largeinternational current account imbalances have all createdserious impediments to the creation of a new long wave ofeconomic expansion. But these problems are exacerbatedby the global trends noted above and so demand interna-tional as well as national solutions: this is reflected in callsfor international Keynesianism as well as national effortsto manage these demand-side problems by restructuring so-cial policy in accordance with workfare principles. It is theincreasingly international character of these demand-sideproblems which reinforces the "hollowing out" processnoted above. And this in tum creates space for increasingsupply-side intervention by the national and regional state.Secondly, and conversely, designating the postwar stateform as just 'Keynesian' would seem to downplay its con-tributions to the supply of technological innovation throughincreased support for science, massive funding of highereducation, and often vast support for military research anddevelopment. But here too it is important to emphasize howthe four global trends noted above fundamentally transformthe relationship between such demand- and supply-sidepolicies. Whereas KWS supply-side policies were shapedby the Fordist paradigm with its emphasis on economies ofscale, big science, and productivity growth, SWS supply-side policies are oriented to permanent innovation, economiesof scope, and structural competitiveness. This puts a fargreater premium on the self-reflexive management of thenational innovation system and the capacity for institutionallearning than would have been typical of the Fordist KWS.

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IV. "Hollowing Out" and the Development of the SWSA further key aspect of the development of the SWS is thenational state's subjection to a complex series of changeswhich result in its "hollowing out." This term is intention-ally reminiscent of "hollow corporations," i.e., transnation-als headquartered in one country whose operations are most-ly pursued elsewhere. By analogy, the "hollow state"metaphor is intended to indicate two trends: first, that thenational state retains many of its headquarters functions -including the trappings of central executive authority andnational sovereignty as well as the discourses that sustainthem; and, second, that its capacities to translate thisauthority and sovereignty into effective control are becom-ing limited by a complex displacement of powers. The re-sulting changes in the formal articulation and operationalautonomy of national states have major repercussions onforms of representation, intervention, internal hierarchies,social bases, and state projects across all levels of stateorganization.

First, the role of supranational state systems is expanding.Such international, transnational, and pan-regional bodiesare not new in themselves: they have a long history. Whatis significant today is the sheer increase in their numbers,the growth in their territorial scope, and their acquisitionof important new functions. This reflects the steady emer-gence of a world society rooted in a growing number ofglobal functional systems (economic, scientific, legal, politi-cal, military, etc.) and in wider recognition of the globalreach of old and new risks. This functional expansion isnotably evident in the interest that supranational bodies dis-play in fostering structural competitiveness within the ter-ritories that they manage. This goes well beyond concernwith managing international monetary relations, foreign in-vestment, or trade to encompass a wide range of supply-sidefactors, both economic and extra-economic in nature.

This shift is particularly clear in the European Community.Thus, following a series of relatively ineffective attemptsat concerted crisis management in various declining in-dustries in the late 1960s and early 1970s, attention hasturned to supply-side issues in new products and processes

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bearing above all on structural competitiveness. The EC isattempting to create world class competitors in R&D-inten-sive, high value-added, and high growth sectors not onlyby establishing the basis for the emergence of Eurofirmsbut also by encouraging strategic alliances of various kinds.Key areas targeted for intervention include: informationtechnology; manufacturing technology; telecommunica-tions; biotechnology; new materials; and marine science andtechnology. The objective of the Commission in this regardis to stimulate cooperation between firms, laboratories anduniversities throughout Europe in developing new tech-nologies and new products which will meet existing orpotential market needs. 13Such policies can have significant"multiplier" and "inhibitor" effects on the national, regional,and local levels. They can have a significant demonstrationeffect, and promote technological and institutional learningthroughout the Community - especially where responsivestates, matching funds, and able partners are available atlower levels. But they can preempt or overshadow lowerlevel initiatives; or fail because adequate "transmission belts"are lacking at these levels. In addition EC policies can failbecause they are biased against "more diverse, smaller-scaled, and socially oriented projects which would be bettersuited to local conditions.t'H In short, cross-territorial coor-dination would seem necessary for the success of these SWSpolicies. Without it, top-down policies could easily lead toimplementation failure and bottom-up policies to wastefuland ineffective "municipal mercantilism."15

Second, in tandem with the rise of international stateapparatuses, we find a stronger role for the local state. Thisreflects growing internationalization as well as the economicretreat of the nation-state. For globalization means that "thelocal economy can only be seen as a node within a globaleconomic network (with) no meaningful existence outsidethis context."16 During the Fordist era, local states operatedas extensions of the central Keynesian welfare state andregional policy was mainly oriented to the (re-)location ofindustry in the interests of spreading full employment andreducing inflationary pressures due to localized overheating.Such states provided local infrastructure to support Fordist

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mass production, promoted collective consumption and localwelfare state policies, and, in some cases (especially as thecrisis of Fordism unfolded), offered subsidies in an effortto compete with each other to attract new jobs or preventthe loss of established jobs. In the wake of Fordist crisis,however, local economic activities involve greater emphasison economic regeneration and competitiveness. The centralconcern is "how state institutions can shape regional eco-nomies to make them more competitive in the new worldeconomy.vl? There is growing interest in regional labourmarket policies, education and training, technology transfer,local venture capital, innovation centres, science parks, andso on. This led van Hoogstraten to suggest that the state,"although badly challenged at the national level because ofits Fordist involvement with crisis management, seems tohave risen from the ashes at the regional and local level." 18

In tum this is linked to the reorganization of the localstate as new forms of local partnership emerge to guideand promote the development of local resources. Economicregeneration involves more than a technical fix and callsfor coordinated action in areas such as education policy,training, infrastructural provision, the availability of venturecapital, cultural policy, and so on. In tum this leads to theinvolvement of local unions, local chambers of commerce,local venture capital, local education bodies, local researchcentres as well as local states. This trend is reinforced bythe inability of the central state to pursue sufficiently dif-ferentiated and sensitive programs to tackle the specificproblems of particular localities. It therefore devolves suchtasks to local states and provides the latter with generalsupport and resources.l? More optimistic accounts of thistrend see it leading to a confederation of job-creating, risk-sharing local states rooted in strong regional economieswhich provide reciprocal support in the ongoing struggleto retain a competitive edge.20 But more pessimistic scen-arios anticipate growing polarization in localities as wellas increased regional inequalities.

Third, there are growing links among local states, aphenomenon closely linked to the first two changes. IndeedDyson writes that "one of the most interesting political

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developments since the 1970s has been the erratic butgradual shift of ever more local authorities from an iden-tification of their role in purely national terms towards anew interest in transnational relationships.t'-! In Europe thisinvolves both vertical links with EC institutions, especiallythe European Commission, and direct links among local andregional authorities in member states. The search for cross-border support is strengthened to the extent that the centralstate pursues a more neoliberal strategy, but it can be foundin other countries too.22 Similar trends are discernible inEast Asia (notably in links between Hong Kong, Macao,and Guangdong and in the so-called "growth triangle"formed by Singapore, Johor, and Riau). As yet this thirdtrend is less marked in North America (even though theentrepreneurial city and local state have seen remarkableexpansion). But striking examples can be found in the ex-pansion of transborder cooperation of linked cities alongthe US-Mexican boundary. And, even in the USA itself, thegrowth of subnationallinks across nations has led Duchacekto talk of the spread of "perforated sovereignty"23as nationsbecome more open to trans-sovereign contacts at both thelocal and regional level.

v. Post-Fordism and the SWS The concept of post-Fordismcan be applied meaningfully only if there are both con-tinuities and discontinuities in the development of the ac-cumulation regime and its mode of social regulation: with-out continuities, the new system could not be said to bepost-Fordist; without discontinuities, it could not be post-Fordist. In this context one could regard the continuities asmediated through the crises of Fordism and the discon-tinuities as introduced by structural and/or strategic changeswhich might resolve for a significant time the crises in For-dist modes of growth and regulation and/or create the con-ditions for non-Fordist accumulation and regulation to suc-ceed. Thus we can regard the SWS as post-Fordist to theextent that: it directly or indirectly resolves (or is held todo so) the crisis tendencies of Fordist accumulation and/orof the KWS as one of its main regulatory forms; its emer-gence (for whatever reason) helps to shape and consolidate

2S


the dynamic of the emerging global economy and therebyencourages the renewal and re-regulation of capitalism afterits Fordist period; and its alleged contribution to competi-tiveness in some economies (even if they themselves werenever really Fordist) leads to its acquiring paradigmaticstatus elsewhere as the key to the regeneration and/or re-regulation of a capitalist growth dynamic (cf. section 1.4above).

The Schumpeterian workfare state would seem to satisfyto some extent all three potential criteria. I do not wish toimply here that the SWS alone could ever resolve all thecrisis tendencies of Fordism, preside single-handedly overthe rise and consolidation of post-Fordism, or totally ex-clude all other strategic paradigms. Indeed the very conceptof the social mode of regulation implies that other changeswould also be needed in the wage form, corporate organiza-tion, forms of competition, innovation systems, and so forth,for fundamental crises in accumulation regimes to beresolved. Likewise, regarding the strategic moment of re-structuring and re-regulation, there are few limits to theoperation of the economic and political imaginary. None-theless, restructuring and reorientation of the state systemdo have a major role to play in shaping the transition fromFordism to post-Fordism both directly and through theirrepercussions on transformations in other regulatorydomains.

Before considering possible grounds for describing theSWS as post-Fordist, let us consider some relevant crisistendencies in the Fordist mode of growth. These include:the gradual (and always relative) exhaustion of the growthpotential which came from extending mass production intonew branches; the relative saturation of markets for massconsumer durables; the disruption of the virtuous circle ofFordist accumulation through internationalization; the grow-ing incoherence and ineffectiveness of national economicmanagement as national economies become more open; thestagflationary impact of the KWS on the Fordist growthdynamic (especially where state economic intervention istoo concerned with sustaining employment in sunset sec-tors); a growing fiscal crisis due to the ratchet-like expansion

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of social consumption expenditure; and an emerging crisisof social security due to the expansion of part-time, tem-porary, and discontinuous employment at the expense of afull-time Fordist norm. An emerging post-Fordist accumula-tion regime could be said to respond to these crisis tenden-cies in various ways. It transforms mass production andgoes beyond it, segments old markets and opens new ones,is less constrained by national demand conditions but makesnew demands upon regional and national innovation sys-tems, replaces macro-economic planning in autocentriceconomies with supply-side flexibility in response to inter-national turbulence, offers new ways of regenerating oldindustries as well as replacing them, promises new waysof organizing social consumption to reduce costs and makeit more functional for business, and is able to further exploitthe fragmentation and polarization of the labour force con-sequent upon the crisis in Fordism.

This account raises the question whether the distinctiveaspects of the SWS match the dynamic of post-Fordist ac-cumulation regimes. An affirmative answer seems to be jus-tified if only on definitional grounds. For, given the evidentcrisis in the KWS that accompanies the crisis of Fordism,a consolidated SWS as defined here would clearly performbetter. It engages in supply-side intervention to promotepermanent innovation and enhance structural competitive-ness; and it also goes beyond the mere retrenchment ofsocial welfare to restructure and subordinate it to marketforces. A less tautological answer must await specificationof variant forms of the SWS and empirical assessment ofthe viability of these different forms in specific conjunc-tures.

A second approach to the correspondence between theSWS and the new global economic order relates to the foureconomic trends noted above. The strategic orientation ofthe SWS to innovation takes account of the enormous rami-fications of new technologies; its concern with structuralcompetitiveness recognizes the changing terms and condi-tions of international competition as well as its increasedsignificance; its restructuring and reorientation of socialreproduction towards flexibility and retrenchment signifies

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its awareness of the post-Fordist paradigm shift as well asthe impact of internationalization on the primary functionsof money and wages; and its complex "hollowing out"reflects the complex dialectic between globalization andregionalization. In short, for all four trends, a "hollowedout" SWS could help both to shape and consolidate keyfeatures of the new regime of accumulation on a world scale.This approach must also rely largely on assertion for itspersuasive effect until the effectiveness of specific SWSregimes (and alternative modes of social regulation of theemerging global order) have been properly examined.

A third approach is more promising for present purposes,however, since its persuasive force depends on past perfor-mance rather than possible post-Fordist futures. It wouldinvolve demonstrating that those economies which havegrown most rapidly during the global crisis of Fordism andwhich have become models for those in crisis are especiallyadvanced in developing Schumpeterian workfare stateregimes. Among the most prominent examples might beJapan, Germany, South Korea, Taiwan, Brazil, the ThirdItaly, and some of the most successful regional economiesin otherwise crisis-prone economies. Even if it would bewrong to categorize all these national and/or regionaleconomies as literally post-Fordist (because they were nevertruly Fordist), their increasing role as exemplars of alter-native (and apparently successful) trajectories for Fordistregimes in crisis does mean that they have a paradigmaticpost-Fordist status.

VI. Alternative SWS Strategies The various economic andpolitical tendencies noted above can be (and often are) in-tegrated and expressed in quite different discourses, andare associated with contrasting strategic conclusions as dif-ferent forces seek to make sense of the conflicting tenden-cies and countertendenciesat work in the new globaleconomy.There is extensive improvisation and trial-and-error in-volved in the current changes and no clearly dominant pat-tern has yet emerged. For heuristic purposes, however, onecan posit three ideal-typical forms: neoliberal, neocor-poratist, and neostatist. In using the prefix "neo" to identify

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them, I want to emphasize that all three would embodyimportant discontinuities with the liberal, corporatist, andstatist KWS regimes linked to Fordism. And, in identifyingthem here as ideal-types, I want to emphasize that it isunlikely they will be found in pure form. The particularstrategy mixes to be found in individual cases will dependon institutional legacies, the balance of political forces, andthe changing economic and political conjunctures in whichdifferent strategies are pursued.

Neoliberalism is concerned to promote a market-led tran-sition towards the new economic regime. For the publicsector, it involves privatization, liberalization, and imposi-tion of commercial criteria in the residual state sector; forthe private sector, it involves deregulation and a new legaland political framework to provide passive support formarket solutions. This is reflected in government promotionof hire-and-fire, flexi-time, and flexi-wage labour markets;growth of tax expenditures steered by private initiativesbased on fiscal subsidies for favoured economic activities;measures to transform the welfare state into a means ofsupporting and subsidizing low wages as well as to enhancethe disciplinary force of social security measures andprograms; and the more general reorientation of economicand social policy to the perceived needs of the private sector.Coupled with such measures is disavowal of social partner-ship in favour of managerial prerogatives, market forces,and a strong state. Neoliberalism also involves a cos-mopolitan approach that welcomes internationalization ofdomestic economic space in the form of both outward andinward investment and also calls for the liberalization ofinternational trade and investment within regional blocs andmore generally. Innovation is expected to follow spon-taneously from the liberation of the animal spirits of in-dividual entrepreneurs as they take advantage of incentivesin the new market-led climate and from the more generalgovernment promotion of an enterprise culture. In tum na-tional competitiveness is understood as the aggregate effectof the micro-economic competitiveness of individual firms.Hence there is little state concern to maintain a sufficientlydeep and coherent set of core economic competencies in

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the home economy, and/or adequate national or regionalinnovation systems, to provide the basis for structural com-petitiveness. In this context, local and international stateapparatuses are expected to act as relays for the market-ledapproach to innovation and workfare. While neoliberalismis sometimes said to involve a return to the free marketand the liberal state, neither is really feasible in currentconditions. Thus, it typically involves the subordination ofsmall and medium enterprises to new forms of monopolisticcompetition on a global scale. Likewise, even if nationaland local states adopt a laissez-faire role in the hope ofgenerating an entrepreneurial culture, they must still provestrong enough both to dismantle and replace the old modeof social regulation and to resist subsequent political pres-sures for all manner of ad hoc interventions for short-termeconomic or political advantage. These are not easy tasks.

Neocorporatism relies on the institutionalization of a con-tinuing, negotiated, concerted approach to the economicstrategies, decisions and conduct of economic agents. Basedon a self-reflexive understanding of the linkages betweentheir own private economic interests and the importance ofcollective agreements to the stability of a socially em-bedded, socially regulated economy, the economic forcesinvolved in neocorporatism strive to balance competitionand cooperation. Influenced by the four global trends notedabove, however, this system differs from a Fordist cor-poratism based on the dominance of mass production andmass unions and on the primacy of full employment andstagflation as economic concerns. Thus, the scope of neocor-poratist arrangements reflects the diversity of policy com-munities and networks relevant to an innovation-drivenmode of growth as well as the increasing heterogeneity oflabour forces and labour markets. Neocorporatist arrange-ments in an emerging SWS are also more directly and ex-plicitly oriented to the crucial importance of innovation andstructural competitiveness. They will extend beyond busi-ness associations and labour unions to include policy com-munities representing distinct functional systems (e.g.,science, health, education); and policy implementation willbecome more flexible through the extension of "regulated

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self-regulation" and private interest government, so thatthere is less direct state involvement in managing the "supp-ly-side" and more emphasis on private industrial policies.Corporatist arrangements may also become more selective(e.g., excluding some previously entrenched industrial in-terests and peripheral or marginal workers, integrating somesunrise sectors and giving more weight to core workers);and, reflecting the greater flexibility and decentralizationof key features of the post-Fordist economy, the centres ofneocorporatist gravity will move toward the micro-level offirms and localities at the expense of centralized macro-economic concertation. This is certainly not inconsistentwith "bottom-up" neocorporatist linkages connecting firmsand/or localities in different national economic spaces andby-passing central government. Whether at the local, na-tional, or supranational level, the state is just as involvedin such neocorporatist strategies as it is in the neoliberaland neostatist approaches. Its resources and actions are usedto back or support the decisions reached through corporatistnegotiation, however, rather than to promote eitherneoliberal disengagement or autonomous, proactive, neos-tatist initiatives. And this in tum means that compliancewith state policies is either voluntary or depends on actionstaken by self-regulating, corporatist organizations endowedwith public status.

Neostatism involves a market-conforming but state-spon-sored approach to economic reorganization in which thestate intervenes to guide the development of market forces.It does so through deploying its own powers of imperativecoordination, its own economic resources and activities, andits own knowledge bases and organizational intelligence.In deploying these various resources in support of a nationalaccumulation strategy, however, it is well aware of thechanging nature of international competition. It involves amixture of decommodification, state-sponsored flexibility,and other state activities aimed at securing the dynamicefficiency of a productive core. This is reflected in an activestructural policy in which the state sets strategic targetsrelating to new technologies, technology transfer, innova-tion systems, infrastructure, and other factors affecting the

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overall structural competitiveness of the economy. It favoursan active labour market policy to reskill the labour forceand to encourage a flexi-skill rather than flexi-price labourmarket; it intervenes directly and openly with its own politi-cal and economic resources to restructure declining in-dustries and to promote sunrise sectors; and it engages ina range of societal guidance strategies, based on its ownstrategic intelligence and economic resources, to promotespecific objectives through concerted action with variedpolicy communities, which embrace public, mixed, andprivate interests. These activities aim to move the domesticeconomy up the technological hierarchy by creating andmaintaining a coherent and competitive productive base, andpursuing a strategy of flexible specialization in specific hightechnology sectors. While the central state retains a keystrategic role in these areas, it also allows and encouragesparallel and complementary activities at regional and/orlocal levels. But its desire to protect the core technologicaland economic competencies of its productive base is oftenassociated with neomercantilism at the supranational level.

Elements of these strategies can certainly be combined.This can be seen at all levels of political intervention. Inthe European Community,for example, we find: a) the singlemarket strategy is premised on a neoliberal approach to com-petitiveness - creating a European-wide market throughliberalization,deregulation,and internationalization;b) a neos-tatist strategy in which the EC coordinates networks linkingdifferent levels of government in different states as well assemi-public and private agencies ranging from educationalinstitutions, research institutes, enterprises, and banks inorder to promote new technologies, technology transfer,etc.; and c) a neocorporatist strategy oriented to a SocialCharter which will prevent "social dumping" and therebyunderpin attempts to reskill and retrain workers in the in-terests of more flexible, responsible work.24 These ap-proaches may not be inconsistent. The European Commis-sion has even argued (not without a hint of special pleadingand political fudging) that the neoliberal-t elements of itsstrategy for structural competitiveness could be viewed asits catalysts, and the neostatist elements as its accelerators.

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It also suggests that some aspects of the neocorporatistproject could be seen as prerequisites of structural adjust-ment and enhanced competitiveness insofar as they promoteeconomic and social cohesion.

Different strategies are also found inside each Europeanstate. Thatcherism clearly involves the dominance of aneoliberal strategy, for example, but it has not totally re-jected other strategies. Thus, central government programs(admittedly on a small-scale) have been oriented to tech-nology transfer and research into generic technologies; and,notwithstanding blanket hostility to tripartite corporatismand national-level social partnership, it has promoted enter-prise corporatism and a "new realism" on the shop floor.Moreover, while central government has been in retreat,there has been a real proliferation of local economic de-velopment initiatives along SWS lines. Under Labour-ledlocal authorities these have often been run on neocorporatistor neostatist lines; while Conservative authorities have in-clined more to neoliberalism or neocorporatism without or-ganized labour. Varying combinations of strategies can alsobe found in other European states and in other triad regions.

There are often good reasons for such variety - notablyin differing local conditions which are best dealt with closeto the ground. But overall national economic competitive-ness requires that central government coordinates and sup-ports these efforts. For effective "decentralisation on a ter-ritorial basis requires an adequateallocation of responsibilitiesbetween communal, regional and national authorities as wellas a proper coordinationof their actions."26This is especiallyimportant where economic initiatives involve not only dif-ferent tiers of government but also business associationsand private bodies. Thus it is essential to establish newinstitutional arrangements and allocate specific roles andcomplementary competencies across different spatial scalesand/or types of actors and thereby ensure that the dominantstrategic line is translated into effective action.27

VII. Concluding Remarks This paper has covered muchground by moving at high levels of theoretical abstraction,generality, and ideal-typicality. Much more work is required

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to make the arguments more concrete and more complexand thereby specify the nature of the SWS in particularcases. This in tum involves transforming concepts alreadyintroduced at higher levels of abstraction and simplicity.Some methodological guidelines for this have been intro-duced in earlier remarks on regulation theory.28 Rather thantaking this exercise further in these concluding remarks,however, I will re-present the key arguments in the lightof the initial efforts at concretization and specification givenabove.

Firstly, I have argued that the Keynesian welfare statepolicy paradigm and its associated state form is in terminaldecline.S? I have linked this not just to the mid-70s crisisof the Fordist accumulation regime with which the KWSis so often coupled but also to the more general restructuringof the world economy which has gathered pace from themid-70s onwards. I have also argued that the next policyparadigm and state form can be usefully described as aSchumpeterian workfare state. Moreover, while the KWSwas typically organized as a national state with local relays,the SWS is assuming a more dispersed, "hollowed out"form. In addition, I have suggested why this could proveto be the most appropriate general state form for a post-Fordist mode of growth in the emerging global economy.

Secondly, regardless of the power of the claims about acurrent transition from the national Keynesian welfare stateto the "hollowed out" Schumpeterian workfare state, I havetried to explain why I think the emergence of the latter isincreasingly evident throughout the world economy. I haverelated this to four trends in the global economy. All fourmust be included to provide a plausible account: theparadigm shift from Fordism to post-Fordism, for example,neglects the technological developments encouraging aSchumpeterian role for the state; likewise, post-Fordism andnew technologies without increasing internationalizationwould be insufficient to explain the growing emphasis onstructural competitiveness and the residualization of wel-fare; regionalization adds a further dimension in botheconomic and political terms. There is still much to be donein exploring the interaction among these factors and their

34


implications for the transformation of the state. More de-tailed work on modes of growth and modes of adhesion tothe global economy would help us to assess the most likelyforms the SWS might assume.F'

There are at least three potential problems with this lineof analysis, which its preliminary and rather speculativestatus prevents from being too readily dismissed. These con-cern the precise theoretical character of the arguments sofar deployed in defense of the SWS thesis, the dangers ofoperating with a simple dualistic contrast between the KWSand SWS, and the issue of the real empirical and practicalscope of the overall argument.

Firstly, my analysis could be accused of functionalism,capital-theoretical reductionism, or structuralism (or all three).Yet what is involved here is a thought experiment promptedby observation of some general trends. I am trying to theorizethe state form appropriate to a future post-Fordist accumula-tion regime and doing so at a high level of abstraction.Such accounts necessarily tend to be functionalist, capital-theoretical, and structuralist. However, as the analysis be-comes more concrete and complex, it should be possible toredefine the terms of the argument. Thus one would examinethe structural coupling between each mode of growth andits distinctive political regime and the regulatory problemsthis creates; the complexities of the capital relation in eachregime type and its implications for the forms of economicand political struggle over crisis resolution; the path-de-pendency of the trajectory out of crisis which emerges inand through such struggles; and even the problems that arisewhen the pre-SWS lacks the capacities to manage the tran-sition.U

Secondly, since my analysis has operated mainly in termsof a global contrast between the KWS and the SWS, itcould be argued that it subsumes too much under a dualisticset of concepts. It is not my intention to adopt such a sub-sumptionist approach, however, and I have tried to noteboth the variant forms of each form of regulatory regimeas well as the limited extent of each. In subsequent workit would be important to explore other forms of articulationbetween the economic and social roles of the state in relation

35


to different accumulation regimes and other aspects ofmodes of social regulation.

Finally, it could well be noted that the Keynesian welfarestate was by no means universal in the postwar advancedcapitalist economies. This is particularly clear for thoseEuropean economies which discovered complementary, non-Fordist niches in the emerging global economy and thoseexport-oriented, East Asian economies which by-passed theKWS to develop supply-side oriented workfare regimes. Butit is surely interesting to note that the non-Fordist nicheeconomies in Europe were often obliged to adopt a morerigorous supply-side policy at an earlier stage and to managetheir welfare regimes with greater regard to problems ofcompetitiveness than was true of more Fordist economiesin Europe and North America. In this sense they prefiguredthe SWS in crucial respects. This is even more obviouslythe case for East Asia. For Japan, the four Asian tigers, andthird-tier NICs in the Pacific Rim owe their remarkableeconomic success in part to their having been able to by-pass(for various reasons) Keynesian welfare concerns in favourof accumulation strategies which prioritized the supply-side.In tum it is the very success of the Japanese road that isnow reinforcing pressures in the other two triadic growthpoles to abandon the KWS for Schumpeterian workfare stra-tegies. For, while Marx noted that "competition makes theimmanent laws of capitalist production to be felt by eachindividual capitalist, as external coercive laws,"32 indivi-dual economies with their innovation systems can be madeto feel these laws through the operation of Schumpeteriancompetition. This is the key mechanism which leads me tobelieve that we will witness the continuing consolidationof the "hollowed out Schumpeterian workfare state" in suc-cessful capitalist economies. Economic spaces which failto make this transition in some form or other will fall downthe global hierarchy of economic spaces and/or be marginal-ized. This does not exclude struggles over the future formsof the post-Fordist SWS: it makes them even more impera-tive.

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Notes

This is a revised and shortened version of a paper first presented at theEighth Conference of Europeanists, Chicago, 26-28 March 1992; it hasbenefitted greatly from the comments of Bill Carroll, Des King, ColinHay, Jane Jenson, Rianne Mahon, Klaus Nielsen, Leo Panitch, Sum Ngai-Ling, and David Wolfe. An unfortunate effect of the paper's abbreviationhas been the excision of many references and supporting examples.

I. The reference is to Gramsci's analysis of "10 stato integrale" (thestate in its inclusive sense) in terms of "political society + civilsociety." See A. Gramsci, Selections from the Prison Notebooks (Lon-don: Lawrence and Wishart, 1971). Gramsci's state theory is com-pared with the "integral economic" approach implicit in regulationtheory in B. Jessop "Regulation und Politik: 'Integral Economy' and'Integral State' ," in A. Demirovic, et al. (008.), Akkumulation, Hegemonieund Staat (Muenster: Westfaelisches Dampfboot Verlag, in press).

2. The forms, functions, and activities of the state cannot be reducedto its role in regulating the economy in its inclusive sense. In ap-proaching it from an integral economic viewpoint one necessarilyproduces a partial account of the state; just as an integral politicalapproach to the economy would produce a partial account of thelatter - limited in Gramsci's case, for example, to its role in securingthe decisive economic nucleus of an historic bloc. For further com-ments, see B. Jessop, State Theory: Putting Capitalist States in theirPlace (Cambridge: Polity, 1992).

3. I am well aware of the many difficulties involved in deploying termssuch as Fordism and, even more seriously, post-Fordism; nonethelessfor some purposes they can do real theoretical work and/or havereal empirical relevance. See B. Jessop, "Fordism and post-Fordism:a critical reformulation," in A.J. Scott and M.l Storper (eds.), Path-ways to Regionalism and Industrial Development (London: Rout-ledge, 1992), pp. 43-5.

4. At least in the view of A. Cochrane, "Is there a future for localgovernment"," Critical Social Policy 32 (1992), p. 5. In an earlierpaper, I simply referred to it as the post-Fordist welfare state butthis term lacks both formal and functional specificity: see B. Jessop,"The Welfare State in the Transition from Fordism to Post-Fordism,"in B. Jessop, et a1. (eds.), The Politics of Flexibility (Aldershot:Edward Elgar, 1991), pp. 82-104.

5. Structural coupling occurs when two or more operationallyautonomous but otherwise interdependent systems coexist in the sameenvironment and react both to changes in that environment and toeach others' reactions; intertwined in this way, they also co-evolvein a partly contingent, partly path-dependent manner. For more in-formation on these concepts, see Jessop, State Theory, pp. 327-329.

6. In this context I follow analysts such as van der Pijl in viewingFordism as an accumulation regime whose growth dynamic wasrooted in the diffusion of the US-American industrial paradigm tonorth-western Europe. See K. van der Pijl, The Making of an AtlanticRuling Class (London: NLB, 1984). I would add that a number of

37


non-Fordist economies whose growth dynamic proved complemen-tary to that of the dominant Fordist regime were also able to expandsignificantly during the long postwar boom (these included Canadaand several European economies). In both contexts there was a ten-dential emergence of the Keynesian welfare state mode of socialregulation. Cf. Esping-Andersen, Politics against Markets, (Ithaca:Cornell University Press, 1985).

7. F. Chesnais, "Science, Technology and Competitiveness," STI Review1 (Autumn, 1986), pp. 86-129; cf. I. Sigurdson, "The inter-nationalization of R&D - an interpretation of forces and responses,"in I. Sigurdson (ed.), Measuring the dynamics of technologicalchange (London: Pinter, 1990), pp.I71-195.

8. P.I. Taylor, "A theory and practice of regions: the case of Europes,'Environment and Planning D: Society and Space 9/2 (1991), p. 185.

9. Thus Therborn and Roebroek discuss variant forms of the welfarestate and then declare it irreversible (under democratic conditions);their argument depends on a simple equation between major publicspending programmes and the welfare state tout court. See G. Ther-born and 1. Roebroek, "The irreversible welfare state: its recentmaturation, its encounter with the economic crisis, and its futureprospects," International Journal of Health Services 16/3 (1986),pp.319-57. On international Keynesianism, see for example: M.I.Piore and C. Sabel, The Second Industrial Divide (New York: BasicBooks, 1985).

10. There is a countertendency to this: the formation of currency blocs ineach of the triad growth poles. Monetary union in the EC is the mostobvious example with the DM becoming the de facto monetary stand-ard; the US dollar is crucial in the North American Free Trade Area;and the yen plays a key role (together with the dollar) in East Asia.

11. See Allan Lipietz, "Toward global Fordism," New Left Review 132(1982), pp 33-47. Lipietz also notes the need for another propor-tionality to be satisfied if the virtuous circle of Fordist accumulationis to continue: that increased productivity the capital goods sectorshould offset the rising technical composition of capital if the capi-tal/output ratio is not to grow and so depress profits.

12. I am grateful to David Wolfe for pointing out the dangers of one-sidedapproaches to the KWS and SWS regarding the focus of state in-tervention.

13. European Commission, An Industrial Strategy for Europe, EuropeanFile, 4, 1986.

14. I. Tommel, "Regional policy in the European Community: its impacton regional policies and public administration in the Mediterraneanmember states," Environment and Planning C: Government andPolicy 5/4, pp.365-381, at pp. 379-380.

15. K. Young, "Economic development in Britain: a vacuum in central-local government relations," Environment and Planning C: Govern-ment and Policy 4/4 (1986), pp.440-450; and R.S. Fosler (ed.), TheNew Economic Role of American States (New York: Oxford Univer-sity Press, 1988).

16. A. Amin and K. Robins, "The re-emergence of regional economies?The mythical geography of flexible accumulation," Environment andPlanning D: Society and Space 8/1 (1990), pp 7-34. Cf. R. Morales

38


and C. Quandt, "The new regionalism: developing countries andregional collaborative competition," International Journal of Urbanand Regional Studies 16/3 (1992), pp. 462-475.

17. Cf. Fosler, New Economic Role ... , p. 5.18. P. Van Hoogstraten, De ontwikkeling van het regionaal beleid in

Nederland 1949-1977(Nijmegen: Stichting Politiek en Ruimte, 1983),p, 17.Cf. F. Moulaert, E. Swyngedouw,and P.Wilson, "Spatial respon-ses to Fordist and post-Fordist accumulation and regulation," Papersof the regional Science Association" 6411 (1988), pp. II-23.

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

20. C.F. Sabel, "Flexible specialisation and the re-emergence of regionaleconomies," in P.Q. Hirst and J. Zeitlin (eds.), Reversing IndustrialDecline? (Leamington Spa: Berg, 1989), pp. 17-70.

21. Cf. Dyson, Local Authorities ... , p. 1.22. Cf. the studies presented in ibid.23. I.D. Duchacek, D. Latouche, and G. Stevenson (eds.), Perforated

Sovereignties and International Relations: Trans-sovereign contactsof subnational governments (New York: Greenwood Press, 1988).

24. See J. C. Perrin, "New technologies, local synergies and regionalpolicies in Europe," in P. Aydelot and D. Keeble (eds.), High Tech-nology Industry and Innovative Environments (London: Routledge,1988), pp. 139-162; and 1. Grahl and P. Teague 1992: the Big Market(London: Lawrence and Wishart, 1991).

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

26. Perrin, "New Technologies...," p. 422.27. Cf. J. Fox Przeworski, "Changing intergovernmental relations and

urban economic development," Environment and Planning C:Government and Policy 4/4 (1986), pp. 423-438; Perrin, "New Tech-nologies...••; and T. Kawashima and W.B. Stohr 1988, "Decentralizedtechnology policy: the case of Japan," Environment and PlanningC: Government and Policy 6/4 (1988), pp. 427-440.

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

29. Cf. B. Jessop, Welfare State.30. A good example of how this might be accomplished is provided in

H. Kitschelt, "Industrial governance structures, innovation strategies,and the case of Japan: sectoral or cross-national comparativeanalysis",' International Organization 45/4 (1991), pp. 453-494.

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

32. K. Marx, Capital Vol. I, (London: Lawrence and Wishart, 1867), p.555.

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jessop 1993 keynesian welfare state

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