The Limits of Regulation

The Limits of Regulation

A Critical Analysis of Capitalist Development

Stavros Mavroudeas

This unique and original book offers a critical survey of the regulation approach, an influential theoretical school born in the 1970s and belonging to the neo-Marxist and radical political economy traditions.

Chapter 5: Regulation and Consumption: Theory and Evidence

Stavros Mavroudeas

Subjects: economics and finance, political economy, radical and feminist economics, politics and public policy, political economy

Extract

5.1 INTRODUCTION Regulation’s consumption theory hinges upon a simple and elegant idea. In pre-Fordist stages workers integrated into the capitalist system through production, whereas their consumption remained non-capitalist. Absolute surplus-value predominated, the value of labour-power was determined individually and competitively (on the basis of the bundle of subsistence goods) and production was socialized (relations between capitals) only through the market, with a minimal state presence. Capitalists and the middle strata were the buyers of capitalist commodities. There was no need for regulation of social (extra-production) reproduction (through a standardization of consumption patterns), since capitalists and those ‘third persons’ managed their consumption according to capitalist norms. However, workers’ struggles and intra-capitalist competition constrained the extraction of abstract surplus-value and led to the predominance of relative surplus-value through the adoption of Taylorist mass production of standardized commodities. This mass of standardized capitalist commodities required a mass market, since capitalists’ and third persons’ consumption did not suffice. Thus, the traditional way of living of the working class was destroyed and labour-power became reproduced through mass consumption of capitalist commodities. These changes radically affected the role and the process of wage formation. In pre-Fordist stages labour-power was a commodity whose value was determined competitively on the market, according to the value of the subsistence bundle, which was not made up of capitalist commodities. Wage was the price of this value, determined according to classical Marxian principles. Wage reductions had no negative effects, since they increased profits and the subsequent loss in outlets affected only...

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