Chapter 2: Widening the perspective: an analytical scheme
In the previous chapter I asserted that, to the extent that labour incomes are an important constituent of demand, and to the extent that consumer confidence is dependent on workers’ confidence in the continuity of their income, the tension between flexibility and security will not only be one between the market and the welfare state or economy and social order, but also a condition of the operation of markets themselves. This is a central puzzle for capitalist economies. It is of course possible for work income not to be the main source of demand. Indeed, for most of human history traded demand was concentrated on luxury products for elite minorities. The mass of the people existed at a subsistence level. This remains the case in large areas of the world today. The industrial revolution brought an expansion of mass goods, but initially of low value-added products. The mutual fuelling of growth in both mass demand and mass supply dates back only as far as the Fordist revolution in mass-production methods of the early twentieth century, limited initially to the USA and later parts of Europe. Even that, which seemed to constitute a pure market solution to the problem, was contingent on economic conjuncture and did not offer long-term security to mass workers; development of the Fordist system was followed by the economic collapse of the 1930s. In many European countries, mass democracy was also not well established until either the inter-war years or later.
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