Introduction to the special issue on the regulation approach and the contemporary crisis

Abstract

The regulation approach has brought powerful insights into the relationship between periods of stable accumulation and the dramatic ruptures associated with their decline. Shifts from Fordism to post-Fordism and thence financialisation have been analysed using the concepts of structural and cyclical crisis and institutional evolution advanced by the regulation approach. After the current crisis, the new challenge that the environmental threat presents suggests that 'New Green Deals' could play a major role in future regulation regimes. This special issue of Capital & Class draws on the work of new and established scholars working in traditional and new areas of the regulation approach to interrogate the nature of the current world crisis, and the viability of new forms of accumulation that may emerge from it. The issue, largely based on discussions held at a COST-funded colloquium in Paris in November 2010, 'Systemic Risk and Financial Crisis' (COST ISO 902), draws on the work of scholars and activists working from within the regulation approach tradition in the fields of economics, sociology, industrial organisation, political science and international political economy. Regulation approaches new, old and critical are brought to bear in order to explore the systemic causes of the crisis, and the consequences of these for change. The special issue begins by examining how the tensions suppressed under the previous period of growth were revealed in the explosive events of the recent financial crisis. Jessop introduces analytical tools for a better understanding of the continuous making and destruction of the institutional fabric of the economy in order to characterise the main contradictions and crisis tendencies of the successive regimes of accumulation (Fordism, knowledge-based economy [KBE] and finance-dominated capitalism). This leads to an assessment of recent proposals for a 'Green New Deal' as alternative routes out of the global crisis that brought us finance-dominated accumulation. Petit starts with an assessment of the respective properties of accumulation regimes and of modes of regulation. The intrinsic instability of finance-led regimes of accumulation hints at the difficulties of forging modes of regulation that could accommodate them. In such a perspective, the political sustainability of finance-led capitalism can only rely on some specific ties which may not fulfil the objective. The paper argues that in such conditions, the current period may still be one of transition and that the challenge to come of some major environmental threat may lead to a radical shift out of financialisation. The next two papers explore how the gap between reality and fiction was regulated in the development of 'real' and casino economies. Dannreuther examines how the invention, construction and extended deployment of the small firm as a political construct enhanced the agency of the state. Small firms did not have a stable meaning, but one that shifted by administration from legitimating a challenge to the state to becoming instruments for the delivery of public policy. The flexibility of this meaning allowed the Enterprise Act to exonerate bad lending, stimulate additional reckless lending practices and increasingly to redirect the costs of financialisation onto individuals and their homes. Palan calls attention to the inherent speculative aspect of the valuation of intangible assets under capitalism. …