From the post-industrial prophecy to the de-industrial nightmare: Stagnation, the manufacturing fetish and the limits of capitalist wealth

Abstract

The post-2008 era saw a return of the manufacturing fetish, the idea that manufacturing constitutes the flywheel of growth without which no nation can thrive. Across the Global North and South, voices are calling to reverse deindustrialization and revive manufacturing. While today deindustrialization is met with anxiety, in the 1930s economists predicted deindustrialization but interpreted it as a liberating process leading to a post-industrial age based on material abundance and widespread economic security. Far from delivering this vision, deindustrialization actually produces a precarious economic order driven by labour precarity, economic stagnation and lost development opportunities for the Global South. What can be termed the Baumolian and Kaldorian frameworks, attribute this precarious reality to services’ inability to replace manufacturing as a growth engine given their technologically stagnant nature. However, this article argues that, by focusing on the technical aspects of service economies, such views overlook the social limits of the capitalist economy and its historically specific conception of wealth, value. As capitalism matures, productivity becomes an increasingly inadequate form of augmenting social wealth as it results in great increases in physical output but counterintuitively undermines the expansion of value. Capitalism is underpinned by a secular movement towards declining dynamism, as it increasingly struggles to maintain its former economic vigour. Stagnation and heightened labour precarity are not merely the product of tertiarization but symptoms of capitalism’s declining trajectory.

The ‘wicked trinity’ of late capitalism: Governing in an era of stagnation, surplus humanity, and environmental breakdown

“…While individual firms are compelled by the profit-or-perish law of capitalist competition to continuously raise labour productivity, this contributes to conditions of economic stagnation at the aggregate level (Moraitis, 2022). Firms tend to compensate for decreasing profit rates by expanding the volume of production, ultimately leading to market saturation and overcapacities, rendering these firms' viability increasingly precarious (Clarke, 1988).…”

“…Yet, at the same time, modalities of liberal governancefacilitating market freedom, enabling competition, responsibilizing individuals against economic risks, and depoliticizing economic relationsremain essential to disciplining domestic constituencies in line with the global imperatives of accumulation. It is precisely the growing inadequacy yet continued necessity of liberal governing methods that we seek to capture with the notion of the anachronism of liberal governance (Moraitis 2021).…”

Assessing the Sustainability of Advanced and Developing Countries: A Different Perspective

“…The sectoral aspect of the post-industrial economy is directed to less developed countries that produce what is needed at a lower cost through outsourcing. In the 1930s and 1940s, the economists Clarke, Fourastier and Fischer viewed the decline in the share of manufacturing in the economy as a desirable and inevitable trajectory for the development of modern society (Moraitis, 2022), since economic prosperity was closely associated with the growth of the service sector. They argued that as industrial productivity and incomes increased, labor would become redundant and people would work in services for which demand would rise.…”

Decarbonizing the downturn: Addressing climate change in an age of stagnation

“…Brenner (2006), for instance, eschews classic Marxist crisis theories, instead rooting his account in the anarchy of capitalist competition, while others debate whether falling profitability signals a cyclical or terminal crisis of capitalism (Larsen et al, 2014). However, the most convincing accounts anchor stagnation in a non-deterministic interpretation of Marx’s value theory that emphasises the secularly increasing difficulty (but not impossibility) of maintaining economic dynamism in the face of capitalism’s unending productivity race (Moraitis, 2021; Ortlieb, 2014; Clarke, 1994).…”

“…Yet such counter-tendencies must take place on an ever-larger scale as labour productivity continues its relentless climb. Paradoxically, ‘the more productive capitalism has become, the more it struggles to emulate past patterns of economic prosperity’ (Moraitis, 2021: 11–12).…”