Regulation and Politics:

The Integral Economy and the Integral State

Bob Jessop

In

A. Demirovi, H. Krebs, T. Sablowski, eds,

Hegemonie und Staat,

Mnster: Westflisches Dampfboot Verlag,1992

Regulation and Politics: The Integral Economy and the Integral State
Bob Jessop

This paper builds on important complementarities between regulation theory and (neo)-
Gramscian state theory to provide a distinctive account of the institutional restructuring
and strategic re-orientation of the state system in capitalist societies. 1 Its main objective
is to explain the crisis of the Keynesian welfare state and the current transition to what
might be termed the 'Schumpeterian workfare state' in the context of the currently
observable 'hollowing out' (Aushhlung) of the nation-state. To reach this objective the
argument moves through five stages: it first reveals major complementarities between
regulation theory and (neo)-Gramscian state theory which are rooted in the former's
concern with the economy in its integral sense and the latter's with the state in its
inclusive sense; it then departs from the Parisian variant of regulation theory 2 to show
how the state has previously been introduced into integral economic accounts of
capitalist reproduction-regulation; thirdly, it complements this account of the state's
place in an integral economic analysis by considering in turn the place of the economy
in an integral analysis of the state; fourthly, it describes some key changes currently
altering the dominant accumulation regime; and, finally, it shows how these changes
are structurally coupled to the transition to the Schumpeterian workfare state. The
paper ends with some general comments on the methodological implications of the
approach.

1) Integral Economy, Integral State

Gramsci is distinctive among Marxist state theorists for his much greater concern with
the modalities of state power than the general nature of the state apparatus or its
specific functions in capital accumulation. He focused on lo stato integrale (the integral
state), i.e., the state in its inclusive sense. In turn this implies that the state in its narrow
sense can be identified with the governmental apparatus, with the politico-juridical
organisation of the state. This approach is reflected in his controversial definition of the
state as 'political society + civil society' and his related claims that state power in

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western capitalist societies rests on 'hegemony armoured by coercion' (Gramsci 1971:
261-3). Thus his work was not concerned with the constitutional and institutional
features of government, its formal decision-making procedures, or its general policies;
instead he focused on the various ways and means whereby political, intellectual, and
moral leadership was mediated through a complex ensemble of institutions,
organizations, and forces operating within, oriented towards, or located at a distance
from the state in its narrow sense. It was certainly a weakness in Gramsci's work that
he neglected the distinctive organizational forms of the capitalist type of state in favour
of examining the historical specificity of political class struggles in the wider society. But
this can be remedied if state power is understood as a form-determined condensation
of the balance of forces in political struggle. For such an approach would refer us to the
strategic selectivity 3 of the state apparatus and its implications for political class
struggle (cf. Offe 1975; Poulantzas 1978; Jessop 1985).
In my view regulation theory can (but need not always) provide an analogous approach
to the capitalist economy. For regulation theory is typically concerned with the changing
modalities of accumulation rather than the abstract, formal features of capital in
general. It focuses on l'economia integrale (the integral economy), i.e., the economy in
its inclusive sense. Thus, developing the analogy with Gramsci's approach to the state,
I suggest that regulation theory at its best analyses the integral economy in terms of an
'accumulation regime + social structure of accumulation'; and that capital accumulation
in its inclusive sense, i.e., the expanded reproduction of capital as a social relation,
involves 'self-valorisation in and through regulation'. For, if the 'decisive economic
nucleus' (to use another Gramscian phrase) of capitalist regulation is the self-
valorisation of capital, this decisive nucleus is always and necessarily socially
embedded and socially regulated. This social embeddedness does not mean, as some
critics seem to believe, that the regulation approach is structuralist; nor does social
regulation mean that the class struggle can ever be abolished (e.g., Bonefeld 1987;
Clarke 1988; Holloway 1988). Instead what the regulation approach leads us to
investigate is the strategic selectivity of various accumulation regimes and modes of
regulation and its impact on the specific forms and modalities of economic class
struggle in its inclusive sense.

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The complementarities between these two approaches should be evident. Both the
neo-Gramscian and regulation paradigms study their specific theoretical object in its
wider social context. Thus Gramsci examines the social embeddedness and social
regulation of state power, the regulation approach examines the social embeddedness
and social regulation of accumulation. For Gramsci, this involves examining the
modalities of political power (hegemony, coercion, domination, leadership) which
enable a historically specific power bloc to project power beyond the boundaries of the
state and secure the conditions for political class domination. Likewise, for regulation
theorists, this means studying the modalities of economic regulation (the wage relation,
money and credit, forms of competition, international regimes, and the state) which
secure the compatibility between micro-economic conduct and the expanded
reproduction of the circuit of capital in specific historical circumstances. Thus both
approaches are concerned with the strategic selectivity of specific regimes (political or
economic) and their implications for class domination (political or economic).
In bringing these approaches together we can strengthen each of them. For the neo-
Gramscian approach is not only marred by its weakness in dealing with the
governmental apparatus as such (the state in its narrow sense) but also by its
somewhat gestural treatment of the 'decisive economic nucleus' of hegemony. In my
opinion, regulation theory can help to remedy this particular deficiency. Conversely, the
regulation approach is well known (and much criticised) for its neglect of the state (for a
review of the literature on this, see Jessop 1990a). Thus only a few regulation theorists
(and these mostly working outside the Parisian mainstream) have paid much attention
to the state system. But it is surely interesting to note here how far their approach to the
state in such cases either directly refers to (or is strongly reminiscent of) Gramsci (e.g.,
Lipietz 1987; Husler and Hirsch 1987; Jenson 1990; Nol 1988). This suggests that
neo-Gramscian theory and regulation theory are commensurable and that it would be
worth combining them.

2) Regulation Theory and the State

Regulation theory is concerned with relatively concrete and complex issues in Marxist
political economy. In certain respects one could see it as attempting to complete and

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update the critique of political economy planned by Marx. For Marx did not fulfil the six-
book plan for his critical theory, failing to provide full accounts of wage-labour, the
state, foreign trade, and world market and crises, etc.. In this sense regulation theory
builds on concepts and arguments from Capital4 and re-specifies them so that they can
be deployed at more concrete, complex levels of analysis. It takes for granted concepts
such as capital in general, particular capitals, the money form, the wage form,
competition, and so on; and focuses on the various historically specific 'structural
forms' in which they are instantiated and the practices involved in their reproduction-
regulation. Only by locating the regulation approach in the dual movement from
abstract to concrete and from simple to complex5 in and through which is disclosed the
'complex synthesis of multiple determinations' which comprises the 'real-concrete'
(Marx 1857) can one avoid the charge that it is merely a middle-range theory which is
not specifically Marxist.
Indeed, far from being inherently inconsistent with Marxist principles, the development
of the regulation approach could help to realise the project of a critical theory of
capitalist societies. For Marx found real difficulties in presenting the full complexity of
the social embeddedness and social regulation of the circuit of capital at more abstract,
simple levels of analysis. This is amply indicated in the many and varied similes,
metaphors, and circumlocutions which Marx was forced to deploy in dealing with the
articulation of the capitalist social formation in order to avoid simple functionalist or
economic reductionist arguments. Only thus could he proceed beyond the critique of
the capitalist economy in its narrow sense (self-valorisation) to disclose (albeit
figuratively) the complex anatomy of bourgeois societies organized under the
dominance of the capitalist economy in its inclusive sense (an accumulation regime
plus its social structure of accumulation). Once concepts and arguments are introduced
on more concrete and complex levels of analysis, however, both reductionism and
figurative language could be expected to disappear (cf. Woodiwiss 1990). Instead
attention could be focused on the structural coupling and co-evolution of different
structural forms, social practices, and discursive systems in the reproduction-regulation
of the economy in its inclusive sense. In developing such an approach one would be
building upon Marxian principles of analysis and round out his attempts to grapple with
the complexities of the relationship between base and superstructure.

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It is in this context that we can understand the regulation theorists' concern with
institutions and the transformative potential of social action. For they are interested in
how long waves of capitalist expansion and contraction are mediated through particular
institutions and practices which modify the general laws and crisis tendencies of
capitalism. They claim that relatively stable capitalist expansion over any extended time
period depends on quite specific extra-economic, as well as economic, institutions and
practices. They stress that the co-presence and coherence of these institutions and
practices cannot be taken for granted but depends on a varying mixture of chance
events, conscious class struggle and social action, and economic tendencies which
operate 'behind the backs of the producers'. Accordingly they argue that capitalist
reproduction is both contingent and precarious: it proceeds smoothly (albeit cyclically)
only so long as its inherent tensions, conflicts, and contradictions can be contained
through a suitable mode of regulation. Thus each stage of capitalism is analysed as a
long wave of economic expansion and contraction with its own distinctive industrial
paradigm, accumulation regime, and mode of regulation which together endow it with
its own cyclical patterns and forms of structural crisis. Moreover, as a long wave (rather
than a long cycle)6 account of capitalist dynamics, the regulation approach treats the
succession of stages as discontinuous, creatively destructive, and mediated through
class conflict and institutional change.
This perspective clearly analyses the economy in its inclusive sense. Thus the self-
valorisation of capital cannot be understood in terms of some automatic mechanism of
self-reproduction. Instead it involves continuing reproduction-regulation of the complex
social relation between capital and wage-labour on various sites not only within the
economy in its narrow sense but also in the wider, more encompassing field of social
relations. In this context the state comes to play a key role. This goes well beyond
narrow economic intervention to secure the general external conditions for the circuit of
capital (such as money and law), the general conditions for capitalist production (such
as the reproduction of wage-labour 7 or infrastructural provision), or the smooth
operation of economic cycles (thanks to structural and/or conjunctural policies).
Refusing to limit the state's role to these activities by no means involves a denial of
their importance to economic reproduction. Indeed leading Parisian theorists
emphasize the crucial role of the state in securing the wage relation in all its complexity

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and in managing the mutual correspondence of the different structural forms of
regulation over time (cf. Aglietta 1979: 32, 383; Boyer 1986: 53). But we should also
recognize the role of the state as an important factor (if not the most important) in
securing social cohesion in class-divided societies and hence dealing with the political
repercussions of the necessarily uneven, crisis-prone course of capitalist expansion. In
exploring this key role we go beyond the economy in its narrow sense to study the
socially embedded, socially regulated character of capital accumulation.
This is reflected in several regulation-theoretic studies which adopt a much wider focus
and consider the state as the institutional embodiment of a class compromise which
extends well beyond the wage relation. In addition to Parisian theorists and their
followers, we can also cite here the West German, radical American, and Amsterdam
regulation schools. Thus, as well as showing how French public expenditure has been
influenced by the socialisation of productive forces and the impact of foreign and
military factors, Delorme and Andre have also shown how they reflect and entrench
specific class compromises (1983). Likewise West German theorists study the state's
role in actively constituting a power bloc and, as a hegemonial structure, underwriting
specific accumulation strategies and patterns of societalisation. Husler and Hirsch
further argue that the party system plays a key role in mediating between the state and
individuals and institutions in society. Its special function in the complex of regulatory
institutions is to constitute, express, direct, filter, and aggregate the many pluralistic,
antagonistic interests in society to defuse class antagonisms and render their
expression compatible with accumulation (Husler and Hirsch 1987: 655-7; cf. Hirsch
1990). The American radicals see the postwar US-American state as involved in even
more institutionalised accords: these are the accords between capital and labour,
among citizens over democratic rights and politics, among nations in international
economic and political regimes, and among firms and fractions of capital concerning
competition on the American domestic market. They also stress that the democratic
state is a site of conflict between the logic of capital and the logic of citizenship (e.g.,
Bowles and Gintis 1982; the same point is noted by Breton and Levasseur 1989). And
the Amsterdam school stresses the state's central role in implementing a
'comprehensive concept of control' (i.e., a hegemonic economic and political paradigm
governing class relations) at home; and its equally crucial role in acting either as a

Page 7
relay for transnational concepts or else as a brake on their penetration (e.g. Holman
1987-8; van der Pijl 1988, 1989). Whilst these approaches often stress class struggle
and the hegemonic role of specific fractions of capital, they nonetheless grant the state
a central role in constituting and managing this struggle.
Finally we should refer to Jenson's recent development of the Parisian regulation
approach to include discourse theory and the dialectic of structure and agency. She
notes that her work 'starts from the observation that the state does play a regulating
role in capitalist societies but returns to the social relations of civil society to determine
how that role has been played in [each] particular case' (Jenson 1990: 658; cf. Jenson
1989). This leads her to undertake concrete analyses of historically developed sets of
practices and meanings which provide the actual regulatory mechanisms governing a
specific mode of growth and/or a specific 'societal paradigm' which covers a wide range
of social relations extending beyond the realm of production. Adopting such an
approach means that an economic crisis involves more than some final encounter with
certain structural limits. It is also both manifested and resolved within the
interdiscursive field or representational system through which social forces assert their
identities and interests. Thus, according to Jenson, newly visible and active actors will
emerge during a crisis and participate in the expanding universe of political discourse.
They will begin to present alternative modes of regulation and societal paradigms and
engage in political conflict over the terms of a new compromise. If, as a result of conflict
within the universe of political discourse that is linked to the emergence of new
structural relations, a new model of development emerges, then another set of rules for
recognizing actors and defining interests for the future will also then exist' (cf. Jenson
1990: 666).
It is hardly surprising that regulation theorists have discussed the state's role in the
expanded reproduction-regulation of the economy. For, in focusing on the economy in
its inclusive sense, they cannot ignore the state's role in managing the institutionalized
compromise which governs its reproduction as an 'accumulation regime + social
structure of accumulation'. Even less could they ignore the state's activities in securing
crucial extra-economic conditions for the self-valorisation of the of capital (or economic
reproduction in its narrow sense). Nonetheless regulation theorists often neglect or
distort the role of the state. This is mainly due to the uneven development of the

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regulation approach itself, which originated among economists opposed to general
equilibrium theory in orthodox economics and/or more structuralist currents in Marxist
economics. Thus most regulation theorists simply introduce the state into their account
of regulation and/or subsume it under a general account of the structural forms through
which regulation is achieved. With some few exceptions, they adopt an already
available account of the state to fill out their radically new approach to the economic
region. They have not really applied the same approach to the state itself nor have they
tried to integrate more adequate state theories. Yet, as I have noted in the first section
of this paper, there is at least one account of the state which is quite commensurable
with the regulation approach to the economy in its inclusive sense and can be
combined with it.
Indeed, if one takes the regulation approach seriously, it should apply to the state as
well as the economy. Three points above all should be evident. First, the state is
neither an ideal collective capitalist whose functions are determined in the last instance
by the imperatives of economic reproduction nor is it a simple parallogram of pluralist
forces. It is better seen as an ensemble of structural forms, institutions, and
organisations whose functions for capital are deeply problematic. This ensemble is
structurally coupled to the economy in many ways and intervenes into its operations at
many different points in the circuit of capital. There is no reason to expect that the
boundaries of the state and economy should coincide or that their structural coupling
should prove mutually beneficial. Second, the state's unity is as underdetermined at the
level of state form(s) as accumulation is at the level of the value form. Thus, just as
accumulation strategies are needed to give a certain substantive unity and direction to
the circuit of capital, state projects are required to give a specific state some measure
of internal unity and to guide its actions. In this sense the state should be seen as an
object in need of regulation as well as an active subject of regulation. And, third,
securing the conditions for capital accumulation or managing an unstable equilibrium of
compromise involves not only a complex array of instruments and policies but also a
continuing struggle to build consensus and back it with coercion. Taking these three
points together, then, the state itself can be seen as a complex ensemble of institutions,
networks, procedures, modes of calculation, and norms as well as their associated
patterns of strategic conduct.

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All this suggests in turn that the state cannot just be seen as a regulatory deus ex
machina to be lowered on stage whenever the capital relation needs it. Instead the
state itself must be an object as well as agent of regulation. But the specific form of the
state ensemble gives the political sphere its relative autonomy and means one cannot
treat politics just as 'concentrated economics'. Indeed much recent work on regulation
has emphasised how the fragmented structure of the state affects its capacities to
engage in economic management or crisis-resolution and, conversely, how its sui
generis dynamic and the structural legacy of institutionalised compromise mean that it
has a certain inertial force (Delorme and Andre 1983, Delorme 1987, Baulant 1988).
We will need to incorporate these arguments into our accounts of the roles of the
Keynesian welfare and Schumpeterian workfare states in the regulation of the economy
in its inclusive sense.

3) Neo-Gramscian Theory and the Economy

The 'decisive economic nucleus' of political class domination has tended to receive less
attention from neo-Gramscian state theorists than the state (in either its narrow or its
inclusive sense) has had from regulation theorists. For their concern with the modalities
of state power has led neo-Gramscian analysts to focus more on the relationship of
government to the wider political system, to the organization of civil society, and to the
universe of political discourse. Neo-Gramscian theorists are typically interested in
intellectual, moral, and political leadership rather than the nature and forms of state
economic intervention. Moreover, even when they do consider the latter, they typically
do so in relation to the subordination of narrow technical and economic issues to the
wider problem of managing the 'unstable equilibrium of political compromise'. In turn
this means that neo-Gramscian theorists direct their attention to the nature of
accumulation strategies, their place within hegemonic projects, and their implications
for the overall balance and thrust of state activities. This suggests that the decisive
economic nucleus is best understood integrally, i.e., in terms of the state's role in
constituting and managing an accumulation regime and its social structure of
accumulation. The key stake from a neo-Gramscian viewpoint, then, is not the self-
valorisation of capital as such. For this follows an anarchic trajectory shaped by the

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dominance of the value-form and lies beyond any direct state control. The crucial stake
is rather the management of the social structure of accumulation so that the political
repercussions of accumulation prove compatible with the maintenance of political class
domination and the economic repercussions of the state system prove compatible with
accumulation.
Thus we might expect the economy to figure in several ways in a neo-Gramscian
account of the state. In its narrow sense it is a source of revenue to finance the
activities of a tax state (Steuerstaat) as well as a contested terrain for intervention at
different points in the circuit of capital to re-allocate use- and exchange values for
political purposes. In addition the changing dynamic performance of the economy in its
narrow sense will have more or less serious political repercussions which require more
or less intensive crisis-management. This may involve attempts to guide the economy
in less disruptive directions and/or to defuse or displace any adverse political
repercussions. Considered from the viewpoint of an accumulation regime and its social
structure of accumulation, moreover, the economy has a central role in the integral
state and the ongoing struggle for hegemony. For the complex of institutions,
organizations, social networks, modes of calculation, and norms of conduct that
constitute a social structure of accumulation form an important part of the overall
configuration of 'political + civil society'. This is far from meaning that the integral
economy and the integral state are identical. Instead it suggests that social relations
comprise a field of struggle with potential contradictions and conflicts between projects
concerned to re-organize this field under a dominant accumulation strategy, a dominant
state project, a dominant hegemonic project, or some other societalization strategy. The
most favourable conjuncture from a neo-Gramscian viewpoint, of course, would be one
where a hegemonic project (a) subsumes a feasible accumulation strategy and (b) is
sustained by an historic bloc in which the integral economy and integral state are
closely coupled and mutually reinforcing. But there are many examples of conjunctures
where there is no such coincidence or complementarity between accumulation
strategies and hegemonic projects and where their respective structural preconditions
cannot be reconciled in the short-run. In these cases the social formation is typically
shot through with structural contradictions and unresolved crises of hegemony lead to a
greater emphasis on state coercion and 'economic-corporate' forms of behaviour.

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4) Changes in the Global Economy

This section briefly describes four key tendencies and trends discernible in
contemporary capitalism. These are the increasing impact of new technologies, the
growing internationalisation of the world economy, the shift from a Ford-ist to a post-
Fordist paradigm, and the changing regional hierarchies in the world economy. No such
list of tendencies and trends can be entirely innocent, of course; and this is particularly
clear for the last two tendencies. But, as will be demonstrated below, each has major
implications for the development of the economy in its integral sense.
new core technologies are becoming the motive and carrier forces of economic
expansion. They include: microelectronics, telecommunications, data processing,
optical technologies, robotics, new materials, renewable energy sources, and
biotechnology. Their mastery is critical to economic expansion and structural
competitiveness yet few firms are likely to have the skills, capital, and knowlege to
master them completely. Many are so knowledge- as well as capital-intensive that
their development depends on extensive collaboration among many economic,
scientific, and political interests. This is associated with increasing international
technological competition as well as increased state concern to encourage
technological innovation and transfer - especially in the advanced industrial
economies. For, given the competitive pressures from low-waged NICs in low-tech
products, this could be a source of continuing competitive advantage, permitting
both innovation rents and high wages.
the internationalization of financial and industrial flows involves ever more firms,
more markets, and more countries. This tendentially homogenizes economic space
as leading edge technologies are diffused, product and capital markets become
international, foreign direct investment is undertaken by all metropolitan powers, a
small but increasing number of NICs develop their own multinational companies and
banks, and post-socialist economies are also drawn into the process. This does not
mean that the operations of global firms are identical from country to country nor
that they will ever become equally dispersed across the globe; it does mean that
they are subject to an overall strategic plan which is formulated on a global scale. In

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 turn this has major implications for the role of nation states and for the concept of
the 'national' economy as a natural unit of the world economic order. One crucial
effect is that national economic space is no longer the most obvious starting point
for promoting economic growth, technological innovation, or structural
competitiveness. This is more and more reflected in the transnational strategies of
firms and states alike. This tendency is evident not only in advanced capitalist
economies but also established and more recent NICs.
there has been a paradigmatic shift from a Fordist growth model focused on mass
production, scale economies, and mass consumption to one concerned with flexible
production, scope economies, and more differentiated patterns of consumption. This
shift provides an important framework for making sense of the current crisis and
imposing some coherence on the search for routes out of the crisis. It is
accompanied by a crisis of US economic hegemony (with which the Fordist
paradigm is especially identified) and an emerging struggle between the USA,
Germany, and Japan to define a hegemonic post-Fordist paradigm. At stake today in
international competition is the competitive struggle to switch quickly and smoothly
among innovative products and processes with each new product offering better
functional qualities and improved efficiency in production.
the macro-economic global hierarchy is being reshaped as concepts such as the
European Economic Area and the Pacific Rim Economic Community are promoted
to challenge the economic dominance of the US sphere of economic influence. For
our purposes the most important of these new regional concepts is the accelerated
economic integration of the EC which was begun as a deliberate move to overcome
'euro-sclerosis' and to build Western Europe up as a 'triad power'. The recent
agreement to set up a European Economic Area is even more significant for the
future - especially as it holds the promise of associate membership for the former
COMECON economies. But one should note that this is likely to deepen existing
trends towards centre-periphery relations within Europe: in addition to a solid core
of strong economies we can expect to see a Southern European semi-periphery, a
North African and Eastern Mediterranean periphery, a Baltic periphery, and loose
ties to an East European periphery. Within this context there will also be a
significant re-emergence of regional economies organized around specific countries

Page 13
 or growth poles (e.g., a Baltic region encompassing Scandinavia, Poland, north-
eastern Germany, and the Baltic republics) as well as growing interpenetration of
the so-called triad powers themselves (USA, Germany, and Japan).
These four trends have clear implications for the economic functions of the state in the
current restructuring of the world economy. For ease of presentation we will deal with
them in the same order as they were introduced above. But this implies neither that
each trend is associated with a specific set of economic functions of the state nor that
these trends will somehow call forth the appropriate state capacities to perform such
functions.
First, given the growing competitive pressures from NICs on low cost, low tech
production and, indeed, in simple high tech products, advanced capitalist economies
are trying to move up the technological hierarchy and specialize in the new core
technologies. States have a key role here in promoting innovative capacities, technical
competence, and technology transfer so that as many firms and sectors as possible
benefit from the new technological opportunities created by R&D activities undertaken
elsewhere in the economy. Moreover, given the budgetary and fiscal pressures on
states as national economies become more open, states must shift their industrial
support away from efforts to maintain declining sectors as they are presently structured
and towards their technological renewal and/or replacement by 'sunrise sectors'.
Second, as internationalization proceeds apace, states can no longer act as if national
economies were effectively closed and their growth dynamic were autocentric. Small
open economies had long faced this problem; now even large, relatively closed
economies must confront it. In particular the macro-economic policy instruments
favoured by the Keynesian welfare state become less effective with growing
internationalization and must be buttressed or replaced by other measures if traditional
postwar policy objectives (such as full employment, economic growth, stable prices,
and sound balance of payments) are still to be secured. In almost all cases states have
become more involved in managing the process of internation-alization itself in the
hope of minimizing its harmful domestic reper-cussions and/or of securing maximum
benefit to its own home-based trans-national firms and banks. They must get involved
in managing the process of internationalization and creating the most appropriate
frameworks for it to proceed.

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Third, as the dominant techno-economic paradigm shifts from Fordism to post-Fordism,
the primary economic functions of states are redefined. Fordism was typically
associated with a primary concern with demand management within national
economies and with the generalization of mass consumption norms. This reflected the
belief that Fordist mass production was supply-driven and could only be profitable
when high levels of demand were maintained and markets for mass consumer durables
expanded. The class compromise supporting the Fordist Keynesian welfare state also
encouraged this pattern of economic intervention. But the transition to post-Fordism is
prompting a reorientation of the state's primary economic functions. Indeed, the
combination of the late Fordist trend towards international-ization and the post-Fordist
emphasis on flexible production has encour-aged many states to focus on the supply-
side problem of international competitiveness and to attempt to subordinate welfare
policy to the demands of flexibility. Thus we can speak of a shift from the Keynesian
welfare state to the Schumpeterian 'workfare' state. This does not mean that all states
will become alike with the transition to post-Fordism: the emerging political regime is
already assuming various neo-liberal, neo-corporatist, and neo-statist forms shaped by
institutional legacies and the prevailing balance of political forces.
Fourth, as the forms of internationalization become more contentious and conflictual
and competing strategies evolve around the triad powers, states must address the
political as well as economic repercussions of the changing international order. There is
a complex dialectic at work here. For, besides globalization and the formation of supra-
regional triad economies, there are also trends towards the re-emergence of regional
and local economies within the nation-state. In certain respects this is associated with a
'hollowing out' of the nation-state as powers are delegated upwards to supra-regional
or international bodies, downwards to regional or local states, or outwards to relatively
autonomous cross-national alliances among local states with complementary interests.
Even so the nation-state retains a key role in managing the changing balance of
political forces consequent upon the complex and contradictory process of
globalization. For it is still the most important site of struggle among competing global,
triadic, supra-national, national, regional, and local forces; and social cohesion still
depends on the state's capacities to manage these conflicts.

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5) The Schumpeterian Workfare State

The various changes in the global economy described in the previous section are only
tendential and their development is rather uneven. In this and the next section I want to
make the heroic assumption that they will become dominant so that I can then assess,
from an integral economic perspective, their conjoint implications for the restructuring of
the state. This involves a thought experiment that draws on already discernible shifts in
state structures, activities, and strategies as well as on theoretical arguments. The
latter are mainly drawn from Marxist political economy, including the almost forgotten
West German 'state derivation' debate as well as the currently fashionable French
regulation school. The empirical inspiration (evidence is probably too strong a word)
comes mainly from my work on the restructuring of the British state under Thatcherism.
But it has been substantially reinforced by a more casual awareness of the recent
institutional restructuring and strategic reorientation of the state in the United States
and elsewhere in Europe and by a growing appreciation of the distinctive forms and
functions of the state in East Asia. The intention lying behind this essentially theoretical
exercise is certainly not to describe specific economic regimes or state systems nor to
provide detailed forecasts concerning their future development. Instead it is to suggest
a novel and fruitful way of making sense of the confusion and complexities surrounding
current economic and political changes by approaching them from an integral economic
viewpoint. An integral political perspective would generate in turn a somewhat different
(but, it is to be hoped, complementary) set of arguments about the transformation and
reorientation of the state. At issue here, however, is its changing place in the social
structure of accumulation.
In analysing the state from an integral economic viewpoint, I regard it as performing two
fundamental tasks in promoting the expanded reproduction of capitalism. Firstly, it
helps to secure the conditions for the valorisation of capital; and, secondly, it helps to
secure the conditions for the reproduction of labour-power (cf. de Brunhoff 1978; Kay
and Mott 1982; Jessop 1986). We can develop these ideas by referring to the current
transition from the Keynesian welfare state to the Schumpeterian workfare state. The
KWS and SWS concepts both refer to how this dual function is secured. Thus, whilst
the first term in each concept refers to the form of state economic intervention, the

Page 16
second refers to the form of state social intervention. What distinguishes the two
concepts is the accumulation regimes to which they correspond. For, whilst the
Keynesian welfare state is an 'integral' element in the expanded reproduction of
Fordism, the Schumpeterian workfare state is 'integral' to that of its successor regime.
Since the linkages between Fordism and the Keynesian welfare state have often been
explored, the present paper will concentrate on the ties between post-Fordism and the
Schumpeterian workfare state.
The Keynesian welfare state performs two distinctive functions in addition to the
generic functions of a capitalist state. Firstly, regarding the circuit of capital, it pursues
a macro-economic management policy in the hope of adjusting demand to the supply-
driven needs of Fordist mass production with its dependence on economies of scale
and full utilisation of relatively inflexible means of production. To the extent that this
involves monetary, budgetary, and fiscal policy, the KWS treats money as national
money rather than an international currency. 8 And, secondly, concerning labour-power
reproduction, the KWS tries to regulate collective bargaining, to generalize norms of
mass consumption beyond those employed in Fordist sectors to other workers and
those outside the labour market, and to promote forms of collective consumption
supporting the Fordist growth dynamic.
The economic and social functions of the Schumpeterian workfare state are quite
different. Relating this emerging state form to a new type of accumulation regime, I
suggest that the Schumpeterian workfare state corresponds to post-Fordism. The latter
can be defined as a mode of macro-economic growth based on the dominance of a
flexible and permanently innovative pattern of accumulation. 9 As such its virtuous circle
is based on flexible production, growing productivity based on economies of scope
and/or process innovations, rising incomes for polyvalent skilled workers and the
service class, increased demand for new differentiated goods and services favoured by
the growing discretionary element in these incomes, increased profits based on
technological and other innovation rents and the full utilization of flexible capacity,
reinvestment in more flexible production equipment and processes and/or new sets of
products and/or new organizational forms, and a further boost to productivity due to
economies of scope and constant innovation. This regime can be treated as post-
Fordist to the extent that it resolves (or is held to do so) crisis-tendencies in its Fordist

Page 17
predecessor. Among these are the relative exhaustion of the growth potential which
came from extending mass production, relative saturation of markets for mass
consumer durables, and (introducing for the moment the spatial dimension) the
disruption of the virtuous circle of Fordist accumulation through internationalization and
the problems this created for national Keynesian welfare state regulation. In these
respects post-Fordism transforms mass production and goes beyond it, segments old
markets and opens new ones, and is less constrained by national demand conditions.
In this context we can argue that the Schumpeterian workfare state performs two
functions. Regarding the circuit of capital it intervenes on the supply-side to promote
flexibility and the pursuit of economies of scope: in so far as flexibility is based on
dynamic efficiency, this entails state support for product, process, organizational, and
market innovation. The same emphasis on flexibility occurs in the social reproduction
activities of the Schumpeterian workfare state. In using 'workfare' to identify the second
role of this new state form, I am not restricting my hypothesis to a claim that able-
bodied welfare recipients will be required to work (or prove their willingness to do so).
Instead the term highlights a major reorientation of state social policy towards the
demands of flexible labour markets and structural competitiveness. In this context the
more usual meaning of 'workfare' is merely a special, neo-liberal example of the more
general trend in the reorganization of social policy. In short, the SWS aims to promote
the flexibility of the labour force through labour market and manpower policies and
more flexible and innovative provision of collective consumption.
In both respects the SWS could be seen as post-Fordist to the extent that these new
functions resolve (or are held to do so) crisis-tendencies in the KWS and help to secure
the conditions for the post-Fordist virtuous circle to operate. To establish its post-
Fordist character involves, then, showing how the KWS gradually created or reinforced
rigidities within Fordism;10 and suggesting how the SWS weakens or destroys these
rigidities in favour of greater flexibility and innovation. Among the relevant factors here
are the stagflationary impact of the KWS on the Fordist growth dynamic (especially
where state economic intervention is too concerned with maintaining employment in
sunset sectors); and the growing fiscal crisis of the KWS linked to the ratchet-like
expansion of social consumption expenditure. These problems are reflected in two
basic features of the SWS. For the latter both pursues supply-side intervention to

Page 18
promote innovation and is not merely retrenching and restructuring social welfare but
also subordinating it to market forces. Both functions match the dynamic of the post-
Fordist regime.
Whilst a comparison of the KWS and SWS could certainly be made in abstract terms
such as these, the argument becomes more compelling if one introduces the spatial
dimension. For there is a clear asymmetry between the Fordist and post-Fordist
regimes in this regard. Whilst the Fordist regime is associated with an autocentric
mode of growth in politically demarcated closed economies, the post-Fordist regime
involves growing internationalization in increasingly open (and some would say
politically borderless) economies. 11 It was relative closure that helped to sustain the
success of the KWS in Fordist regimes and it is increasing openness which is pushing
the state in post-Fordist regimes to adopt a more Schumpeterian workfare orientation.
It must be stressed that this radical reorientation of the economic and social functions
of the capitalist state is emergent and tendential. It is also one which applies more to
North America and Europe than to the third pole of the emerging triadic global system.
This qualification is not necessitated by the weakness of the Schumpeterian workfare
model in East Asia but by the weakness of the Keynesian welfare state. For Japan, the
four Asian tigers, and the third-tier Pacific Rim NICS have achieved their remarkable
economic success in part through a concerted Kaldorian-Schumpeterian economic
strategy in which Keynesian welfare considerations were only weakly institutionalised.
In turn this reflects the relative weakness of Fordism in East Asia in comparison with
North America and leading West European economies. It is the very success of the
Japanese accumulation regime and its associated political system which is reinforcing
the pressures in the other two growth poles (or triadic regions) to dismantle the KWS in
favour of a more Schumpeterian workfare model.

6) The Hollowing Out of the Nation State

A further dimension of these changes is the subjection of the nation-state to a complex

series of changes which result in its 'hollowing out'. This term is intended to indicate
two contradictory trends: first, that the nation state still retains much of its national
sovereignty (albeit as an ever more ineffective, primarily juridical fiction reproduced

Page 19
through mutual recognition in the international community of nations); and, second, that
its capacities to project its power even within its own national borders are becoming
limited through a complex displacement of powers upward, downward, and outward.
Some state capacities are transferred to pan-regional, pluri-national, or international
bodies; others are devolved to the local or regional level within the nation state; and yet
others are assumed by emerging horizontal networks of power - local and regional -
which by-pass central states and connect localities or regions in several nations.
The crucial point to stress here is not only the various formal shifts but also the
practical re-articulation of political capacities. The nation-state may well continue to act
as a significant institutional site and to provide a discursive framework for political
struggles but its own capacities to act autonomously are decisively weakened by the
shift towards internationalized, flexible (and thus also regionalized) production systems
as well as by the growing awareness of the transnational character of many risks and
the need for a corresponding scale of risk management. At the same time the decline of
the nation-state should not be confused with the decline of national economic space in
its 'inclusive sense'. For, in the pursuit of structural competiveness, it is obvious that
institutional learning poses serious problems. It is far easier to borrow technology and
adapt it than to transfer the ensemble of institutions that sustain national systems of
innovation. In this context the nation-state can play a key role in institutional learning
and hence in promoting structural competitiveness (cf. Johnson and Lundvall 1991: 2).
First, the role of supra-national state systems is expanding. This holds not only for
bodies such as the European Community but also for various regional and
transnational bodies. Such bodies are not new in themselves: they have a long history.
What is significant today is the sheer increase in their number, the growth in their
territorial scope, and their acquisition of important new functions. In turn this reflects
the gradual emergence of world society rooted in a growing number of global functional
systems (economic, scientific, legal, political, military, etc.) and in wider recognition of
the global reach of old and new risks. One of the most significant areas of functional
expansion is in supra-national bodies' concern with structural competitiveness within
the territories that they manage. This goes well beyond concern with managing
international monetary relations, foreign investment, or trade to encompass a wide
range of supply-side factors, both economic and extra-economic in character.

Page 20
This shift is particularly clear in the European Community. Thus, following a series of
relatively ineffective attempts at concerted crisis management in various declining
industries in the late 1960s and early 1970s, attention has turned to supply-side issues
in new products and processes bearing above all on structural competitiveness. The
EC is attempting to create world class competitors in R&D-intensive, high value-added,
and high growth sectors not only by establishing the basis for the emergence of
Eurofirms but also by encouraging strategic alliances of various kinds. Key areas
targetted for intervention include: information technology; manufacturing technology;
telecommunications; biotechnology; new materials; and marine science and technology.
Second, in tandem with the rise of international state apparatuses, we find a stronger
role for the local state. Whereas local states during the KWS period operated as
extensions of the central state - providing local infrastructure in support of Fordist mass
production and promoting collective consumption and local welfare state policies, we
are now observing 'the slow transformation of local governments from welfare
dispensaries to job-creation agencies' (Sabel 1989: 5). This is related not only to the
crisis of Fordism and the Keynesian welfare state but also to the re-emergence of
regional economies as flexible specialisation becomes a driving force in competition. In
this context there is increasing interest among local states in regional labour market
policies, education and training, technology transfer, local venture capital, innovation
centres, science parks, and so on. As a recent study of the Bundesrepublik noted, the
local state 'becomes involved in ... economic activities themselves and covers more or
less the whole economic circle: R&D to create new technologies, transfer to distribute
the knowledge, application to shift technologies into products or production processes,
subsidies to provide sites and capital for investment, creation of new markets (by public
procurement or by laws and regulations especially in environment protection) and even
sales promotion for international markets' (Schlieper 1989: 117-118). In turn this is
linked with the reorganization of the local state as new forms of local partnership
emerge to guide and promote the development of local resources. Thus local unions,
local chambers of commerce, local venture capital, local education bodies, local
research centres, and local states enter into various arrangements to regenerate the
local economy. This trend is reinforced by the inability of the central state to pursue
sufficiently differentiated and sensitive programmes to tackle the specific problems of

Page 21
particular localities. It therefore devolves such tasks to local states and provides the
latter with general support and resources (cf. Dyson 1989: 118). The more optimistic
accounts of this trend envisage it leading to a confederation of job-creating, risk-
sharing local states rooted in strong regional economies which provide reciprocal
support in the ongoing struggle to retain a competitive edge. But there are also more
pessimistic scenarios which anticipate growing polarization within localities as well as
increased regional inequalities (cf. Sabel 1989).
Third, closely linked to the first two changes, there are also growing links among local
states. Indeed Dyson writes that 'one of the most interesting political developments
since the 1970s has been the erratic but gradual shift of ever more local authorities
from an identification of their role in purely national terms towards a new interest in
transnational relationships' (Dyson 1989: 1). In the European context this involves both
vertical links with EC institutions, especially the European Commission, and direct links
among local and regional authorities in member states. The search for cross-border
support is reinforced to the extent that the central state pursues a more neo-liberal
strategy but it can be found in other countries too (cf. the studies presented in Dyson
1989). Similar trends are discernible in North America with cooperation among local
states in Canada and the USA (especially following the Free Trade Agreement) as well
as among city governments in different provinces or states.

7) Concluding Remarks

This contribution was not intended to give even a short account of either regulation or
the state in general. Either of these tasks would take far more time and space than is
available here. Instead I have attempted to accomplish just three things: firstly, to show
that the regulation approach involves a distinctive Marxist perspective on the economy
in its integral sense and hence a distinctive account of the state; secondly, to show that
this account is quite consistent with a neo-Gramscian approach to state power and
could benefit from some of the lessons of that approach; and, thirdly, to offer an
admittedly one-sided, regulation-theoretical account of the current changes in the form
and functions of the state seen from the viewpoint of its role in the regulation-
reproduction of capital accumulation. Two further tasks remain: to identify some of the

Page 22
limitations of the account presented above and to suggest future areas for research into
the state and regulation. These tasks will be pursued in tandem.
First, although I have emphasized some complementarities between regulation theory
and neo-Gramscian theory, this does not mean that the two have an identical view of
the state. Rather, as I have also tried to indicate, they actually ascribe the state rather
different roles in their respective accounts of capital accumulation and political class
domination. On the one hand, according to regulation theory, the state's primary role,
granted always that form problematizes function, 12 is to manage the social structure of
accumulation which supports the self-valorization of capital in a given accumulation
regime. From the complementary, neo-Gramscian viewpoint, of course, such a
reproductive-regulatory role is inevitably linked to broader struggles over hegemony.
Similarly, granted still that form problematizes function, the state's role according to
neo-Gramscian theory is to manage the unstable equilibrium of compromise so that it
sustains a specific pattern of political class domination. From a regulation theory
viewpoint, of course, such a coercive-hegemonic role is necessarily linked to struggles
over the decisive economic nucleus potentially afforded by continuing capital
accumulation. In noting these differences we have not done more as yet than identify
the site of some interesting problems for both theory and practice. In particular it would
certainly be worthwhile to determine theoretically and/or explore historically the
improbable13 structural and strategic conditions in which these two roles prove mutually
supportive. And it would also be worth exploring what happens when, as seems much
more likely theoretically as well as historically, they do not coincide or, in some cases,
even contradict each other.
Second, in exploring current and future changes in the state from a regulation-
theoretical viewpoint, I may have given the impression that an integral economic
approach suffices on its own to explain the current transformation of the state. This was
not my intention. Instead, proceeding from the now commonplace assumption that the
dominant postwar accumulation regime and its mode of regulation are in crisis-ridden
terminal decline, I have identified four general tendencies and trends which are
shaping the search for new accumulation regimes and modes of regulation. These in
turn provided the background against which I conducted a thought experiment to sketch
the most likely changes in both the form and functions of that type of state (understood

Page 23
mainly in its narrow sense) which was involved most closely in the postwar boom. It is
this experiment which led to the twin arguments about the hollowing out of the nation-
state and the rise of the Schumpeterian workfare state. But one ought not to conclude
from these results that all capitalist states in the postwar period passed through a
Keynesian welfarist stage; nor that all are now destined to become Schumpeterian
workfare states. Even when one allows for variant forms of both these types of state as
well as of Fordism and post-Fordism (and such variants can readily be
identified), 14there have been other types of state and other accumulation regimes in the
postwar period. For the moment all I want to stress is the increasing salience of several
structural trends and strategic shifts associated with what are termed here the
Schumpeterian workfare state and the hollowing out of the nation-state. Any more
definite and ambitious arguments must await more concrete and complex theoretical
and empirical analyses.
Third, in this latter context, it may be useful to suggest how integral economics and
integral politics could be combined. Assuming for the moment that the Keynesian
welfare state was dominant during the Fordist era and that the Schumpeterian workfare
state is becoming increasingly dominant, two possible historical trajectories for these
developments suggest themselves. One is grounded in integral economics, the other in
integral politics. Thus the search for ways to diffuse and stabilize the Fordist
accumulation regime could have led to the chance discovery of the political
mechanisms involved in the Keynesian welfare state. Likewise the crisis of Fordism and
the search for a way out of crisis may well be leading to the emergence of a 'hollowed
out' Schumpeterian workfare state. But one ought not to overlook other possibilities.
For the struggle to build and consolidate a stable political regime during the turbulent
postwar era could have led to appreciation of the political virtues of the full employment
and collective consumption facilitated by a mixed economy and welfare state. Likewise
the various crises of this political regime and the search for a way out may well be
leading to politically motivated efforts to restructure the state along 'hollowed out'
Schumpeterian workfare lines. 15 Moreover, if there is a coincidence of strategic
interests between such integral economic and political forces, the social basis for these
state forms could well prove much stronger. Conversely, where these interests are
contradictory, these state forms may well be weaker. In either case it would surely be

Page 24
worth studying the societal effects of the structural coupling and/or strategic
coordination of economics and politics. One might find a social formation organized in
an integral economic manner (i.e., with the state firmly integrated into an accumulation
regime and its mode of regulation); or one organized in an integral political manner
(i.e., with economic management subordinate to the strategic requirements of a
national-popular hegemonic project); or even the virtuous case of an historic bloc (to
borrow yet another Gramscian term) where integral economics and integral politics are
mutually supportive. 16
Fourth, and finally, once attention shifts (as it should) from one-sided concern with
economics or politics (even in their respective integral senses) to their structural
coupling and/or strategic coordination, a further set of problems is placed on the
research agenda. For one should investigate the systemic, institutional, organizational,
and interpersonal mechanisms which determine the relative influence of economic and
political factors in specific historical conjunctures. Some of the key ideas and
approaches for such an investigation have already been developed by scholars
concerned with the state's role in regulation (see section 2 above). Indeed, once the
economy is understood in its integral sense, as regulation theory (among many other
approaches) suggests it must, it is self-evident that a socially embedded, socially
regulated economy lacks the autonomy needed to be determinant in the last instance 17.
Instead it becomes merely one strategic terrain among others, each with its own
specific systemic and institutional weight, for struggles over societalization. If the
economy becomes dominant in this context it is because a complex array of specific
forces have prevailed for a time in a specific historical conjuncture in more or less
strategically self-reflexive attempts to constitute a social formation around the
dominance of the value form. An accumulation regime and its social structure of
accumulation have, in other words, become the dominant organizing principle of a
given social formation. There are no guarantees that this will happen. Whether or not it
does depends not only on the course of events within the economy in its narrow sense
but also on events beyond it. And this is where the state (in both its narrow and its
integral sense) has a decisive role to play. It will be interesting to see whether the next
long wave of capital accumulation does involve, as I suspect it must, the reconstitution
of the state along the lines sketched above. Only time and struggles will tell.

Page 25
Page 26
BIBLIOGRAPHY:

In addition to references cited in the text and footnotes I have included some additional
items which have influenced the argument: more detailed support for some of the
claims about the Schumpeterian workfare state and hollowing out can be found in
Jessop 1992b.

Aglietta, M. (1979) A Theory of Capitalist Regulation: the US Experience, London:

New Left Books.
Baulant, C. (1988) 'Role de l'etat chez les theoreticiens de la regulation',
International Conference on Regulation Theory, Barcelona, 16-18 June.
Best, M. (1990) The New Competition, Cambridge: Polity.
Bonefeld, W. (1987) 'Reformulation of State Theory', Capital and Class, 33, pp 96-
127.
Bowles, S. and Gintis, H. (1982) 'The crisis of liberal democratic capitalism', Politics
and Society, 11 (1), 51-93.
Boyer, R. (1986) La theorie de la regulation: un bilan critique, Paris: Maspero-la
Decouverte.
Breton, G. and Levasseur, C. (1989) 'L'ecole de la regulation et l'etat: l'oubli du
politique', paper for annual conference of European Consortium for Political Research,
Paris, 11-15 April.
de Brunhoff, S. (1978) Capital, Economic Policy, and the State, London: Pluto.
Castells, M. (1992) 'Four Asian tigers with a dragon head: a comparative analysis of
the state, economy, and society in the Asian Pacific Rim', in R. Applebaum and J.
Henderson, eds., States and Development in the Asian Pacific Rim, London: SAGE, 33-
70.
Chesnais, F. (1986) 'Science, Technology and Competitiveness', STI Review, 1
(Autumn), pp 86-129.
Clarke, S. (1988) 'Overaccumulation, Class Struggle and the Regulation Approach',
Capital and Class, 38, 59-92.
Delorme, R. (1987) 'State intervention in the economy revisited: an outline',
unpublished paper.

Page 27
 Delorme, R. and Andre, C. (1983) L'etat et l'economie, Paris: Seuil.
Ernst, D. and O'Connor, D. (1989) Technology and global competition: the challenge
for newly industrializing economies, Paris: OECD.
Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism, Cambridge:
Polity.
Gramsci, A. (1971) Selections from the Prison Notebooks, London: Lawrence and
Wishart.
Husler, J. and Hirsch, J. (1987) 'Regulation und Parteien im Ubergang zum "Post-
Fordismus"', Das Argument, 165, 651-71.
Hirsch, J. (1990) Den Tiger Reiten, Frankfurt: VSA. (??)
Holloway, J. (1988) 'The Great Bear, Post-Fordism, and Class Struggle', Capital and
Class, 36, 93-104.
Holman, O. (1987-8) 'Semi-peripheral Fordism in Southern Europe', International
Journal of Political Economy, 17 (4), 11-55.
Jenson, J. (1989) 'Crisis in Representation: the political economy of permeable
Fordism', Canadian Journal of Political Science, (), pp
Jenson, J. (1990) 'Representations in crisis: the roots of Canada's permeable
fordism, Canadian Journal of Political Science, 24 (4), 653-683
Jessop, B. (1985) Nicos Poulantzas: Marxist Theory and Political Strategy, London:
Macmillan.
Jessop, B. (1990) State Theory: Putting Capitalist States in their Place, Cambridge:
Polity.
Jessop, B. (1992a) 'Fordism and Post-Fordism: Critique and Reformulation', in A.J.
Scott and M.J. Storper, eds., Pathways to Regionalism and Industrial Development,
London: Routledge, 43-65.
Jessop, B. (1992b) 'The Schumpeterian Workfare State: on Japanism and Post-
Fordism', paper presented to the Eight Conference of Europeanists, Chicago, 25-27th
March.
Jessop, B., Nielsen, K. and Pedersen, O.K. (1992) 'Structural Competitiveness and
Strategic Capacities: the cases of Britain, Denmark, and Sweden' in S.E. Sjostrand,
ed., Economics, Politics, and Global Change, New York: Sharpe.

Page 28
 Johnson, B. and Lundvall, B. (1991) 'Flexibility and Institutional Learning', in B.
Jessop et al., eds., The Politics of Flexibility, Aldershot: Edward Elgar, 33-49.
Kim, S.K. (1990) 'The rise of the neo-mercantile security state: state institutional
change in Korea', Pacific Focus, v (1), Spring, 111-148.
Lipietz, A. (1987) Mirages and miracles, London: Verso.
Marx, K. (1857) 'Introduction to the Contribution to the Critique of Political Economy',
in K. Marx, Grundrisse, Harmondsworth: Penguin.
Moulaert, F., Swyngedouw, E., and Wilson, P. (1988) 'Spatial responses to Fordist
and post-Fordist accumulation and regulation', Papers of the Regional Science
Association, 64 (1), 11-23.
Noel, A. (1988) 'Action collective, partis politiques et relations industrielles: une
logique politique pour l'approche de la regulation', International Conference on
Regulation Theory, Barcelona, 16-18 June.
Offe, C. (1975) 'The Capitalist State and the Problem of Policy Formation', in L.N.
Lindberg et al., eds., Stress and Contradiction in Modern Capitalism, Lexington: D.C.
Heath, 125-44.
Petrella, R. (1990) 'Technology and the Firm', Technology Analysis and Strategic
Management, 2 (2), pp 99-110.
van der Pijl, K. (1988) 'Class struggle in the state system and the transition to
socialism', After the Crisis, No. 4, Amsterdam.
van der Pijl, K. (1989)
Porter, M.E. (1990) The Competitive Advantage of Nations, London: Macmillan.
Poulantzas, N. (1978) State, Power, Socialism. London: New Left Books.
Sayer, Andrew and Walker, Richard (1992) The New Social Economy: reworking the
division of labour. Oxford: Blackwell.
Schlieper, A. (1989) 'Case studies of Local Technology and Innovation Policies in
West Germany: Success and Failure', in K. Dyson, ed., Local Authorities and New
Technologies: the European Dimension, London: Croom Helm, 115-123.
Woodiwiss, A.W. (1990) Social Theory after Post-Modernism, London: Pluto Press.

7) Alternative Concluding Remarks

Page 29
The intention behind this contribution is far from that of providing a full account of the
changing form and functions of the state from the viewpoint of its place in the
regulation-reproduction of capital accumulation. This would require far more time and
space than is available here. Instead I have just tried to show that the regulation
approach (understood as a distinctive Marxist viewpoint on the capitalist economy in its
inclusive sense) involves a distinctive account of the state. This account is also
consistent, as I have likewise argued above, with a neo-Gramscian approach to the
state. But consistency is not the same as identity. For the state occupies different
places in regulation and neo-Gramscian theory.

Granted always that form problematizes function, 18 the state's role according to
regulation theory is to manage the social structure of accumulation which contributes to
the self-valorization of capital in a given accumulation regime. From a neo-Gramscian
viewpoint, of course, any such reproductive-regulatory role is inevitably tied to broader
struggles over hegemony. Similarly, still granted always that form problematizes
function, the state's role according to neo-Gramscian theory is to manage the unstable
equilibrium of compromise that sustains a specific pattern of political class domination.
From a regulation theory viewpoint, of course, any such coercive-hegemonic role is
necessarily linked to struggles over the decisive economic nucleus afforded by capital
accumulation. In juxtaposing these approaches we have done no more as yet than
identify the site of some interesting problems for both theory and practice.

Concluding remarks are a suitable vehicle for posing these problems but not for solving
them. Before attempting the first of these twin tasks, however, it is worth rejecting two
possible questions which might be advanced from more conventional theoretical
positions. On the one hand, those Marxists who believe in economic determination in
the last instance might ask whether the demands of reproduction-regulation are so
powerful that they will always win out over those involved in maintaining hegemony -
with the result that any contra-diction between them would always be resolved in favour
of renewed accumulation 'armoured by coercion'. Once the economy is understood in
its integral sense, however, it is self-evident that a socially embedded, socially
regulated economy lacks the autonomy needed to be determinant in the last instance 19.

Page 30
Instead it becomes merely one strategic terrain among many for struggles over
societalization: in this particular case, of course, what is at stake in the struggle is the
constitution of a social order organized under the dominance of the value form. On the
other hand, those post-Marxists (in some cases previously of neo-Gramscian
theoretical persuasion) who claim all social relations are really constituted in and
through social (or even purely discursive) practices might well ask whether there are
any economic constraints on politics which lie beyond the reach of deconstruction and
renegotiation through some suitable hegemonic discourse - with the result that a
decisive economic nucleus is not really needed to secure hegemony or, alternatively,
can (at least in principle) be conjured up when really necessary. What this view ignores
is that the socially embedded, socially regulated character of the economy in its integral
sense presupposes some sort of economy in its narrow sense: particular accumulation
regimes are always constituted in and through the articulation of definite economic
activities with particular modes of regulation. This does not mean that they are
constituted ex nihilo nor that any mode of regulation can be combined at will with any
accumulation regime (cf. Jessop 1990: 310-11). Instead we find that modes of
regulation and accumulation regimes are structurally coupled and historically co-
evolving. We must explain howw regulatory procedures emerge, interact, and combine
to produce particular objects of regulation rather than others and, once produced, what
the implications of a given accumulation regime are for the stability of the mode of
regulation. What we typically find, of course, is the 'structural coupling' of economic and
political regimes in which the institutional logics and strate-gically oriented actions of
each modify the operation of the other.

The implications of the approach proposed here are quite different. In recognizing that
social relations constitute a field of struggle for competing societalization projects and
that social formations comprise a series of more or less consolidated institutional
orders we have the basis for studying the structural coupling and strategic coordination
of different institutional orders. A social formation could be organized under the
dominance of a capitalist societalization project (in which case the regime of
accumulation would become the principal axis of social organization) and society could

Page 31
be understood as its superstructural reflection. Alternatively it could be organized under
the dominance of a national-popular project concerned with democratic consolidation.

Given that the Keynesian welfare state dominated postwar capitalist order and that the
Schumpeterian workfare state is becoming increa-singly dominant, two possible
historical trajectories suggest themselves on the above basis. One possible mechanism
is grounded in integral economy: that the search process for economic stbaility of
accumulation regime leads to chance discovery of political mechanisms which help to
consolidate Fordism. Another mechanism is grounded in integral politics: search for
unstable equilibrium of compromise leads to social democratic politics emphasizing
need for full employment and growth as economic nucleus. Where there is a
coincidence of interests between economic and political forces, the KWS is strongly
consolidated. Where only one set of mechanisms is involved, KWS could be
undermined by inappropriate economic base (e.g. Britain); or by inappropriate social
base (e.g., United States). Where coincidence, then structural coupling and strategic
coordination more viable. Likewise, the SWS has been approached in this paper from
an integral economic viewpoint. But this is only one possible route towards the SWS: a
struggle over the conditions to secure structural competitiveness in an increasingly
open and post-Fordist world economy. But it could also be approached from viewpoint
of integral politics: the mechanisms in and through which struggle for hegemony or
national survival sought to construct a decisive economic nucleus which emphasized
national expansion. The East Asian economies would fit here (Castells 1991). Latin
American economies could provide instances where neither integral economic nor
integral political route to KWS or SWS emerged but instead we find dual crisis of
accumulation and hegemony grounded in one and/or both sets of mechanisms.

Page 32
1
In formulating these ideas I have benefitted from many intensive discussions with members of
the Staatsaufgaben research group at the Centre for Interdisciplinary Research (ZIF) in Bielefeld
(especially Claus Offe, Klaus Gretschman, Herbert Kitschelt) and with my good friends, Klaus
Nielsen and Ove Kai Pedersen of Roskilde University Centre, Denmark. The fruits of my work at
ZIF will appear in Jessop 1992. An extended version of some of these ideas will also appear with
case studies drawn from Britain, Sweden, and Denmark under the joint authorship of Nielsen,
Pedersen, and myself as 'Structural Competitiveness and Strategic Capacities: Rethinking the
State and International Capital' in Sven-Erik Sjstrand, ed., Institutional Change: theory and
empirical findings, New York: M.E. Sharpe, 1992.

2
There are other variants of regulation theory and even the Parisian version is far from unitary
(see Jessop 1990a). But the Parisian approach provides the most useful starting point for an
integral economic analysis of the kind tried here. I will also draw on recent German efforts to
introduce regulation theory into work on the strategic selectivity of the capitalist state.

3
Strategic selectivity refers to the structurally mediated bias which means that particular forms
of state privilege some strategies over others, access by some forces over others, some interests
over others, some time horizons over others, some coalition possibilities over others. A given type
of state, a given state form, a given form of regime, will be more accessible to some forces than
others according to the strategies they adopt to gain state power. And it will be more suited to
the pursuit of some types of economic or political strategy than others because of the modes of
intervention and resources which characterise that system (see Jessop 1990).

4
The three volumes of Capital correspond essentially to the proposed books on capital, landed
property, and, in part, that on wage-labour. See: Oakley 1983, 105-113; and Rosdolsky 1977: 40-
62.

5
The reproduction of the real-concrete as a concrete-in-thought involves both movement from
abstract to concrete along a single dimension of abstraction and the combination of concepts
drawn from different dimensions of abstraction. It is this latter movement which I refer to as that
from simple to complex (cf. Poulantzas 1968; Jessop 1982).

6
Long wave and long cycle theories can be distinguished as follows. Whilst both identify long
waves of economic expansion and contraction, the former do not seek to identify a single causal
mechanism which explains both the dynamic of individual long waves and the transition between
them; the latter do regard the transition between periods as having a single causal mechanism
(or set of mechanisms) which remains the same across succeeding cycles. Thus long wave
theories emphasize the ruptural, discontinuous form of economic reproduction-regulation and
search for the conditions leading to each long wave in chance historical discoveries.

7
The generalisation of the wage-form to labour-power does not mean that it has really become a
commodity but that it has assumed the (fictitious) form of a commodity. Wage-labour is not
produced as a commodity in a capitalist labour process for immediate sale on a labour-market but
is reproduced in many different social contexts in civil society and the state as well as the
economy in its narrow sense.

8
As we shall see below, money has two contradictory functions in a capitalist economy: as a
national money circulating within a productive system and as an international currency traded
between different productive systems. The former function is dominant in the KWS, the latter
predominates in the SWS. On this distinction, see: Aglietta 1986; Borrelly 1991.

9
It is insufficient to define post-Fordism in terms of flexibility alone: all accumulation regimes
contain elements of flexibility and, as Piore and Sabel have emphasized, flexible specialization
regimes also pre-dated Fordism (Piore and Sabel 1985). The novel element in post-Fordism is the
way in which flexibility is shaped and enhanced by a new techno-economic paradigm in which the
search for permanent innovation is institutionalized.

10
This is not to deny that it also provided some measure of flexibility on the demand side to
compensate for the already rigid supply-side position.

11
In this context we are talking of economies in the narrow sense; in their inclusive sense, all
economies are politically bounded (see below).

12
This is one of the central lessons of the state derivation debate: see, for example, Hirsch 1976.

13
Regulation theorists argue, correctly in my opinion, that regimes of accumulation and modes of
regulation are inherently improbable social achievements (e.g. Lipietz 1985). A close reading of
Gramsci would suggest much the same about hegemony (Gramsci 1971).

14
On variant forms of the Keynesian welfare state, see Esping-Anderson (1990); on variant forms
of the Schumpeterian workfare state, see Jessop (1992b); and on variant forms of Fordism and
post-Fordism, see Jessop (1992a).

15
Castells has recently suggested that the four East Asian developmental states (South Korea,
Hong Kong, Taiwan, and Singapore) moved in this direction because their state managers were
concerned with national survival; initially export-oriented economic development was simply the
means to this end (Castells 1992). On South Korea, see also: Kim 1990.

16
These suggestions need much more elaboration, of course, before they could provide a focus
for research. They are only included to hint at the heuristic potential of a regulation-theoretical,
neo-Gramscian analysis.

17
I have advanced this argument in more detailed, but rather different, terms in my recent book
on state theory: see Jessop 1990.

18
This is one of the central lessons of the state derivation debate: see, for example, Hirsch 1976.

19
I have advanced this argument in more detailed, but rather different, terms in my recent book
on state theory: see Jessop 1990.