In Chapter 4, David Kotz and one of the present authors argue that the resolution of the crisis of the1970s and early 1980s involved the construction of a new social structure of accumulation (SSA). This new SSA is best characterized as one of global neoliberalism. Kotz and McDonough argue that neoliberalism in this period constituted a multileveled phenomenon that included neoliberal institutions, neoliberal policies, neoliberal theories, and neoliberal ideology. Among neoliberal policies, the aggressive attempt to remove any barriers to the free movement of goods and capital across borders was especially prominent. This provides one of the many links between neoliberalism and globalization. Neoliberalism promoted globalization, and globalization in a dialectical fashion was also at the root of support by capital for the new neoliberal orientation. Increasing international competition undermined profitability. Capital began to pursue a program of deregulation and capital flight as a means to recover profitability. Further, the resultant globalization of production weakened labor and strengthened capital's ability to effectively pursue its newly preferred strategy.

Transformations at the level of the state must be counted among the prominent institutions of this global neoliberalism. Indeed the contemporary changes in domestic state structures and policy have attracted a great deal of analysis. Globalization is easily identified as an influence on these changes. International “competitiveness” has become the stated rationale for government policy in all areas of social life.

Introduction

There is broad agreement among social analysts that capitalism changed in significant ways starting around 1980. However, there is disagreement about how to characterize those changes, what the key features of capitalism have been in recent decades, and what name to apply to the contemporary form of capitalism. In our view, the concept of “global neoliberalism” best captures the contemporary social reality.

In Europe liberalism has long referred to a stance that advocates limited government intervention in the economy. States were generally less active in seeking to manage capitalist economies before the Great Depression of the 1930s than they were after World War II. This does not mean that capitalist states followed a consistently laissez-faire approach in the past. Chang (2002) has shown that states actively promoted industrialization in every major developed capitalist country during its period of early development. In late developers such as Germany and Japan, the state was even more active than in the earliest cases. However, once industrialization was completed, in most developed capitalist countries the state played a relatively limited role in the economy prior to the Great Depression.

Following the Great Depression and World War II, new national social structures of accumulation (SSAs) emerged in the capitalist world in which the state actively regulated the macroeconomy as well as key economic sectors, nationalized some industries in many countries, and provided a set of social programs that is often summed up as the “welfare state.

Since the 1994 publication of our volume, Social Structures of Accumulation: The Political Economy of Growth and Crisis (Kotz et al. 1994), social structure of accumulation (SSA) theory has continued to inspire a substantial outpouring of articles and books in a variety of disciplines. The purpose of this new volume is to provide a definitive account of the state of SSA theory and its applications today, 30 years after SSA theory first emerged, and well over a decade since our previous volume was published. SSA theory seeks to explain, among other things, why long periods of relative economic stability alternate with long periods of economic crisis. For this reason, it is well suited to help understand the factors underlying the financial and economic crisis of global capitalism that broke out in 2007–08.

SSA theory was developed in the 1970s and early 1980s by David Gordon, Richard Edwards, and Michael Reich (1982) as a way of relating apparent long cycles of growth and stagnation in capitalist history to periods of change in the institutional structure of capitalism. Contrary to the sunny picture of conventional equilibrium economics, capitalist history appeared to be punctuated by periodic crises of unusual depth and length. And contrary to some conventional Marxian expectations, capitalism had not fallen into a permanent state of depression or stagnation. Subsequent to the crisis periods, capitalist economies experienced prolonged periods of relatively vigorous and stable growth and accumulation.

This chapter provides an overview of the state of the art of the social structure of accumulation (SSA) literature produced since 1994. Any such project must start with David Gordon's last contributions before his untimely death in 1996. In addition, there have been a number of contributions from the academic discipline of sociology, including the founding of a “spatialization” school extending the work of Gordon, Edwards, and Reich's original Segmented Work, Divided Workers. There have been a number of works extending the geographic reach of the SSA framework to new areas, most prominently to developing countries. Several authors have applied the SSA framework to the history and analysis of specific institutions. Such an overview is supplied in the first section below. Following that section we will assess the theoretical contributions made by these works in the last ten years or so. Finally, we will discuss the debate over whether a new SSA was consolidated after the stagflation crisis of the 1970s and early 1980s. If an SSA was consolidated, the current economic crisis results from the disintegration of that SSA. If an SSA was not consolidated, what we are witnessing today is the continuation of the unresolved collapse of the postwar SSA.

An Overview of the Last Decade

David Gordon's Last Works

David Gordon's continuing contributions were primarily in the area of building econometric models that drew on the insights of SSA analysis to provide an alternative representation of the dynamics of the U.S. economy in the postwar period.