Roads to Post-Fordism

Labour Markets and Social Structures in Europe

Max Koch

• Publisher: Routledge
• Year: 2017
• Print ISBN:
  9780754643081
• eBook ISBN:
  9781351902922
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

In this book Max Koch develops a theoretical model to understand the restructuring of labour markets and social structures of advanced capitalist countries on the basis of the 'regulation approach'. This approach is then applied to comparative analysis of the national trajectories of the UK, Germany, the Netherlands, Spain and Sweden. Against the background of the classical sociological theories of Marx and Weber, he examines whether there are general links between inclusion, exclusion and capitalism. This is followed by an outline of key concepts of the regulation approach and a discussion of the transition from Fordism to Post-Fordism which leads to empirically verifiable hypotheses about long-term trends in labour markets and social structures in Western Europe. These hypotheses serve as the theoretical basis for the subsequent country studies that are founded on an evaluation of international labour statistics.

Chapter 1

Inclusion, Exclusion, and Capitalism

The issue in this chapter is the tensions or ‘contradictions’ inherent in capitalist development that, if not contained by institutional embedding or socio-economic ‘regulation’, may well lead to a decrease in social cohesion, to marginality and exclusion. This chapter discusses these issues at a relatively high level of abstraction in the sense that it refrains from analysing the particularities of national trajectories. The point of departure is the connection between the process of accumulation of capital and the development of employment based on Karl Marx’s theorem of an ‘industrial reserve army’ (1.1). The picture of social inequality, inclusion and exclusion that emerges on that basis will subsequently be complemented by an analysis of social inequality and social struggles around the distribution of wealth in the Weberian tradition (1.2). Finally, we will consider the interaction between national economic locations and the international division of labour and discuss what new dimensions arise from this perspective for the concept of inclusion and exclusion in capitalism (1.3).

1.1 The Marxian tradition: The accumulation of capital and the development of employment

One does not need to be an old-fashioned materialist to consider the creation of profit on the basis of a rational organization of labour in private companies as the crucial orientation for economic action in a capitalist society.¹ In his analysis of the forms of value, Marx (1977, p. 150) shows that the characteristic form of the circulation of commodities c–m–c (commodity–money–commodity) produces an opposite cycle: m–c–m (money–commodity–money). The latter cycle has by definition ‘no limits’ as its extremes can only be distinguished according to their quantity. In fact it is the cycle m–c–m (money–commodity–more money) that expresses that value, in its manifestation as money, tends to increase its quantity, thereby approximating social wealth as such. Defined as value in motion, it is ‘capital’. Max Weber (1986, p. 6) wrote that owners of capital are able to direct their economic practice towards the production of profit, because they have the power to determine the rational organization of the work process that is required in this instance – if necessary, against the wishes of the wage-earners. Marx added that, since employees normally work and produce value for their employers for a longer period than corresponds to the amount of time necessary to earn their living, the employees’ working day is divided into a paid and an unpaid part. It is during the latter that the wage-earners produce a surplus for the employer.

Marx (1977, p. 225) further explains the distinction between the time necessary for a worker to earn his or her living and surplus for the employer when dealing with the conflict that arises when working hours are determined. At this point he suggests an ‘antinomy’ between ‘collective capital’, which claims its right as a purchaser of labour power by fixing working hours as long and – one would add today – as ‘flexible’ as possible, and ‘collective labour’. The objective interest of the latter is to keep working hours within certain limits and to organize labour flexibility in ways that allow for professional and private life to be successfully planned on a regular basis. As the interests of these poles, collective labour and capital, appear to be equally deducible and legitimized in the principles of exchange relations (1.3) – in Marx’s words, they both bear ‘the seal of the law of exchanges’ – employers and employees continue ‘working out’ this conflict by representing their respective interests in, at times, tense struggles.

These struggles are not limited to the quantitative regulation of working hours but also include qualitative dimensions of the organization of the work process. The profitability of a company can not only be improved by increasing the working hours of the wage-earners (Marx referred to this as the production of ‘absolute surplus value’) but also by shortening that part of their working day that is necessary for the workers’ physical and social reproduction (‘relative surplus’). Marx explains a reduction in the price of labour power (and, all other things being equal, the magnification of the employers’ profit) through increases in productivity in those branches of production that are part of the consumption patterns of the wage-earners. However, he also stresses, following his assumption that labour is the only source of value, that the realization of such a relative surplus value is linked to an immanent contradiction: individual owners of capital are permanently motivated to optimize the technological and organizational basis of the work process in order to be one step ahead of their competitors. This is normally carried out by a substitution of workers by machinery or by an improved organization of the internal division of labour. The employers whose productivity level is above average can thus make extra profit since they are able to sell their commodities at prices below the normal level.² But such an improvement of production methods tends towards generalization, and the extra profit moves towards zero, since competing companies have no choice but to copy the new methods or even to optimize them. Since this improved level of productivity gradually becomes the new social standard, a given quantity of commodities is now produced with less labour effort than previously. The price of a single commodity decreases as a result. Marx concludes that the methods of production of relative surplus result in workers being driven out of the production process. On the one hand, the rate of surplus of the employed workers increases; however, on the other hand, the absolute volume or mass of surplus value (and, other conditions being equal, the mass of profit) decreases since fewer workers are needed to produce a given amount of commodities than previously. In order to keep the volume of profit stable, despite this dilemma, there is no alternative but to expand the overall scale of production; in other words, accumulation.

‘Accumulation’ means that employers do not consume all the profit they produced during the preceding cycle of production, but instead that they reinvest at least some of it into the elements of the production process (labour power, which Marx defines as ‘variable capital’ as it adds value to the original capital value in the production process; and raw materials, machines, etc., understood as ‘constant’ capital because these capital constituents merely pass their value onto the new product) so that it functions as additional capital alongside the original capital. For systematic reasons, Marx first analyses the demand for labour power under the conditions of constant labour productivity. In these circumstances, in which the ‘organic composition’ of capital (the proportion of constant and variable components) remains the same, companies employ more people in direct proportion to the expansion of the scale of production. A national economy is then soon characterized by full employment and, in turn, wage rises; but also by a lack of technological and organizational innovation. In practice, however, this case is the exception; the rule is the tendency, mentioned above, towards an increase of relative surplus value, which is normally achieved through an increase in the organic composition of the capital used in the production process: the constant constituent of capital increases relatively at the expense of the relative constituent. In this case, the absolute number of employees can only increase, if the entire scale of production (constant plus variable capital) is advanced in greater proportion than the rise of the constant capital components against the variable element. However, this arrangement is also only found during particularly prosperous periods of capitalist development. In general, Marx is able to demonstrate that there is a permanent danger that the accumulation of capital results in a ‘relatively redundant population of labourers’ (Marx, 1977, p. 590).³

Marx distinguishes between three types of relative surplus population: the ‘floating’, the ‘latent’, and the ‘stagnant’. The floating type is typical for industrial centres where ‘the labourers are sometimes repelled, sometimes attracted again’. He understood the agricultural population (‘latent’ surplus population) as a reserve of labour that was required during the Industrial Revolution in the quickly expanding cities (Marx, 1977, p. 601). Finally, wage-earners in irregular and precarious conditions of employment are referred to as ‘stagnant’ surplus population. Probably Marx had qualified craftsmen and women in mind whose skills were devalued in the course of the restructuring of the economy and who had no alternative but to compensate this inferior rate of productivity through increasing self-exploitation. This precarious employment often took the form of self-employment at home. However, it would be inappropriate to dismiss such individualized ways of production as mere historical phenomena. More recently, under the auspices of globalized production, the outsourcing of particular tasks within the work process to small businesses has become especially lucrative. It is well known, for example, that in the textile industry most of the fabrics supplied by western companies are produced in South East Asia. Less well known however is the fact that these companies make the most of the advantages of these locations in a strict economic sense. The often highly capable craftsmen and women, low wage levels, and the lack of prohibition or, at least, the tolerance of child labour, all belong to the ‘locational factors’ that enjoy especial popularity among multi-national corporate groups.

Finally, Marx mentions the ‘lowest sediment’ of the relative surplus population; the social groups that most approximate what was later labelled the ‘underclass’ (Herkommer and Koch, 1999). The Lumpenproletariat⁴ consists of three categories. First, there are those who are still able to work whose number increases and decreases in accordance with the stages of the business cycle. The second category is the group of ‘orphans and pauper children’, who are likewise, ‘speedily and in large numbers’, enrolled in the active army of labourers during economic growth periods. One might add that the precise circumstances of this enrolment depend on the particular integration of a national location into the international division of labour at a particular stage of capitalist development. The third category encompasses those unfit for work, ‘chiefly people who succumb to their incapacity for adaptation, due to the division of labour; people who have passed the normal age of the labourer …’ (Marx, 1977, p. 602–3). Given that the welfare state limits the risks of wage-earning the individual consequences of being unfit for work become less dramatic. But the reverse is also true, when such arrangements are removed. Individuals must then increasingly rely on themselves and their capacity to make private provisions to cover for these risks. Since from the standpoint of capital valorization, the costs of inability to work, for example, belong to the faux frais of production, it is a matter of socio-economic regulation, whether capital succeeds in moving these costs, ‘from its own shoulders on to those of the working-class and the lower middle-class’ (Marx, 1977, p. 603) or whether these classes are able to establish a modus vivendi of cost sharing, in which the employers take part.

To sum up the results so far, the logic of the capitalist production and accumulation process presents itself as ‘exclusive’ in the sense that a section of the wage-earners must permanently take the risk of being removed form the active production process and moved into the reserve. The same reasons that improve the productivity of labour, and, at the same time, the rate of accumulation, lead, other circumstances being equal, to a progressively decreasing input of human labour. The distinction between full-time membership in the production process, merely sporadic participation, and complete exclusion, is not just of academic interest, but has significance for the identification of the employee with his or her job, and, more generally, with his or her sense of self-esteem. Elaborating on Marx, Herkommer (1985) argues that the degree of an employee’s autonomy and identification results from his or her particular position in the production process in its dimension as work process. In this determination, this process is shaped and codetermined by workers according to their skills and preferences.⁵ Just as important it is for the individual to prove his or her worth as part of a larger organism through employment, this individual will experience devaluation and self-destruction if it is no longer possible to bring his or her specific interests and skills into the work process. Like a businessperson, who owns only outmoded machines, a person’s labouring capacity has then ceased to have economic value. Since it cannot be deployed productively, there is no alternative but to enhance the ‘investment’ in a person’s own skills in order to achieve re-entry into the labour market. If it is a ‘misfortune’ (Marx) to be a productive worker, since in capitalist circumstances this is associated with exploitation, then it is a personal disaster to be excluded from this process altogether.

The American sociologist Erik Olin Wright (1997) emphasizes that the unemployed are not involved in an exploitative relationship with the owners of capital. Nonetheless, he understands unemployment, labour market marginality, and poverty as being inherent in a socio-economic structure shaped by the capitalist mode of production in Marx’s sense. Localizing the unemployed and economically marginalized in this structure, Wright distinguishes between exclusion, which he refers to in terms of ‘economic oppression’, and ‘exploitation’. Exclusion denotes a situation in which the material benefits of one group are acquired at the expense of another group, coercive practices being an essential part of the process. Exploitation is then a specific form of exclusion: ‘In exploitation, the material well-being of exploiters is causally dependent on their ability to appropriate the fruits of labor of the exploited’ (Wright, 1994, p. 40). Therefore, the welfare of the exploiter depends on the effort of the exploited, whereas in non-exploitative exclusion there is no labour transfer from the excluded to the excluding group. The welfare of the latter is due to a denial of access to certain societal resources for certain social groups, but not to their efforts. Thus, the crucial difference between exploitative and non- exploitative exclusion is that the exploiter needs the exploited, whereas in the case of non-exploitative exclusion, the excluding group might sometimes be happier if the excluded group simply disappeared.

The distinction between exploitation and exclusion is significant not only within the terms of reference of a theory of stratification but also for an understanding of the different conditions for the representation of interest. The basis for the wageearners’ influence and their degree of autonomy in the work process is the fact that employers are just as dependent on employees as employees are on employers (Ganßmann, 1999, p. 100). Due to this interdependence,⁶ the largely repressive control of employees often proves cost- and labour-intensive and does not lead to optimal results in relation to productivity and efficiency. Often these determinants of profitability are best achieved where wage-earners have a relatively large level of autonomy and identification with their own work. Repressive forms of surveillance of workers are typical for the peripheral regions of the world market, while the locational advantages of Western European nation-states are due to the advanced development of the division of labour in combination with investments in skills and the corresponding active integration of wage-earners in the work process. The representation of the interests of the unemployed is more difficult since the capitalowning classes are not in any way dependent on their cooperation. As the existence of the unemployed is, so to speak, not economically founded, special efforts must be made to further their interests in the political arena, and here, especially though the mediation of the state (1.3). These interests refer to simple biological and cultural reproduction, on the one hand, and to the access to those resources that could make the labour power ‘marketable’ again (above all, training and further education), on the other.

1.2 The Weberian tradition: Exclusion, usurpation, and citizenship

The Marxian tradition views exploitation and exclusion as inherent features of capitalist societies. While it pays special attention to exclusion as a result of the particular capitalist organization of the division of labour, the Weberian tradition has been especially, but not exclusively, interested in the different forms that exclusion takes at the level of the distribution of social wealth and in non-economic social fields. Max Weber’s differentiation between open and closed relationships is generally seen as the starting point of such a theory of exclusion. An open relationship ‘does not deny participation to anyone who wishes to join’, whereas a relationship is defined as closed against outsiders ‘so far as, according to its subjective meaning and its binding rules, participation of certain persons is excluded, limited, or subjected to conditions.’ (Weber, 1978, p. 43) Exclusion (or ‘social closure’) is hence a process through which social groups maximize advantages by limiting access to privileges and life chances – ‘rights’ in Weber’s terminology – to an inner circle of selected persons. To achieve this aim, that is, the monopolization of life chances and the definition of outsiders, practically any feature – language, race, class, gender, religion – can be singled out. Although this definition appears to point to a general concept of exclusion, in his practical work, Weber discusses the issue mainly with reference to economic relationships. Here, ‘usually one group of competitors takes some externally identifiable characteristic of another group of (actual or potential) competitors … as a pretext for attempting their exclusion.’ And – rather casually – he goes on to say that ‘such group action’ of exclusion ‘may provoke a corresponding reaction on the part of those against whom it is directed’ (Weber, 1978, p. 342). However, Weber did not develop the concept of ‘corresponding reactions’ as systematically and as generally as his notion of exclusion. The idea therefore remained unexplored in Weber’s writings and it was some time before it was revisited by scholars.

Frank Parkin (1972; 1979) and Raymond Murphy (1988) were foremost in developing Weber’s original ideas and this led to a general analysis of all kinds of relations of dominance in which ‘corresponding reactions’ on the part of excluded groups play a significant role. Inclusion and exclusion are thought of as a sociopolitical process in which two reciprocal collective strategies are invol...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Preface
• Acknowledgements
• List of Abbreviations
• Introduction
• 1 Inclusion, Exclusion, and Capitalism
• 2 The Regulation Approach
• 3 New Directions in Comparative Research into Labour Markets and Social Structures
• 4 The Country Studies
• 5 Summary of the Empirical Results in Comparative Perspective
• Concluding Remarks
• References
• Index