Fordism and its Discontents

Between roughly 1917 and 1970, from Scandinavia to the USSR, socialists of every stripe hailed the ‘Fordist’ mode of accumulation—the mass production of standardised products within large firms by a Taylorised workforce—as the industrial basis for a new society. For Social Democrats, the productivity enabled by Fordism generated the private profits necessary for public redistribution via the welfare state. For Fabians, Fordism generated the economies of scale which, once freed of the irrationalities of the market and private ownership, could generate abundance for all. And for Marxists, Fordism accelerated the productive processes and relations whereby the industrial worker—the chosen agent of History—could develop their revolutionary consciousness and clout.

By the late 1960s, however, the Fordist mode of production and its possibilities were beginning to fade. Advances in computing technology enabled small firms to rapidly manufacture and deliver unstandardised products and services to diverse niches of consumers—what has become known as ‘flexible specialisation’. For its liberal celebrants this ‘post-Fordist’ regime reflected not merely technological change, but the demands of citizens for more creativity and inclusiveness in their work as in their politics. For many Marxists, however, post-Fordism was neither a technological nor a civic advance, but merely a means of driving down the gains of industrial workers by replacing them with professional-managerials (‘PMC’) and low-skilled service workers—and in workplace cultures conducive to fragmentation rather than solidarity. Where earlier Marxists saw the factories of Fordism as ripe for socialist appropriation, their successors viewed the workshops and culture of ‘flexible specialisation’ as barren of political possibility.

During the 1970s, however, a growing number of left-leaning social movements and economists contested this orthodoxy. Socialist feminists argued that ‘women’s work’ in the new economy, largely low paid and contingent (if paid at all, as in domestic labour), was as important as ‘factory work’ as a vector of oppression and a potential front against private Capital. Environmentalists pointed out the ecological limits to Fordist models of growth, limits that could not be avoided through expropriation alone. And left-wing economists wrote of how the emergent industries and classes of post-Fordism could supplement the industrial proletariat as a vector of socialist transformation. From such movements and ideas arose a coterie of heterodox Marxists economists and geographers such as Michael J. Piore and Charles F. Sabel, Andre Gorz and Doreen Massey.

One of the most significant of these economists was Robin Murray. Born in 1940 to left-wing parents, Murray studied history as an Oxford undergraduate under the tutelage of socialist historian Christopher Hill. This experience, followed by a stint working with Sicilian peasants to improve their villages in the teeth of resistance by the local gentry, led him to a Marxist conviction in the importance of economic conflict and production in shaping world history, together with a scepticism that contemporary industrial modernisation was the only viable route to a progressive society. After earning a degree in Economics from the LSE he helped establish the Conference of Socialist Economists, and later took a post working at the Institute for Development Studies at the University of Sussex. There he combined his interests in economic development and industrial planning with new ideas from the French Regulation School around an emergent ‘post-Fordist economy’ which supplemented and coexisted with earlier regimes.

For Murray, orthodox Marxists made an elementary mistake in seeing Post-Fordism as a rational capitalist response to worker advances: they saw capitalists as rational. Just as classical Industrialism’s potential was wasted under private ownership, so too was Post-Fordism’s potential. Managerial hostility to industrial democracy prevented firms from fully harnessing the profitable wisdom and creativity of their workforce. The pressures of profitability and market competition prevented firms from making the long-term investments in new technology needed to develop the economy as a whole.  Above all, the vested interests of Capital in maintaining a ‘reserve army’ of the unemployed led to enormous social and economic wastage.

For all these reasons, the post-Fordist economy was as much in need of socialised ownership as the Fordist economy had been. Less burdened by the pressures of immediate profit, the state could organise and coordinate economic growth far more effectively than private actors could. It could build an economy which avoided the deskilling, fragmentation, and dualism to which the post-Fordist economy, torn between an elite of managers and a proletariat of service workers, was prone. And it could do it all democratically.

If socialists were to develop as well as own the Post-Fordist economy, however, they would need to adjust their statecraft to this mode’s distinctive requirements. An economy which rewarded flexibility and worker participation would require a creative and hence deeply democratic state. A workforce encompassing new populations, with new demands for recognition, would need to be welcomed by new types of community-oriented unions—unions which activists like Mike Cooley, Alan Hayling, and Hilary Wainwright were building as Robin wrote.

Above all, Post-Fordism demanded that socialists revise their assumptions around the proper scale and size of economic activity. For decades, progressives of every stripe had hailed the large firm as the natural successor to its smaller brethren on the grounds of both progressivity and efficiency. Under conditions of ‘flexible specialisation’, however, economies of scale within firms were less important than economies of collaboration between firms. In the ‘Red Belt’ of central Italy, Murray noted, small but collaborative unionised firms and cooperatives were routinely able to out-compete larger English factories by sharing services and knowledge between them, rather than engaging in zero-sum competition with their rivals. For Murray the lesson was obvious: socialist economic policies in the Post-Fordist era should focus less on subsidising individual ‘national champions’ than furnishing shared resources and cultivating cooperative ties between socialised firms. By tapping the potential of place-based networks in this way—a potential routinely destroyed by the capitalist tendency to dislocate from communities at the slightest prospect of individual gain—socialism could simultaneously modernize and return to the older communitarian traditions of William Morris, G. D. H. Cole, and the co-operative movement which had, for so long, been marginalised by Fabianism.

Saving Post-Fordism from the fetters of Capitalism, however, would take more than rationality and good will—it would take force. Socialists would need to develop ‘liberated zones’ within which an alternative economy could develop, expand, and roll back the frontiers of the Capitalist market. These zones would need to both exceed private capital in productive terms while simultaneously changing the nature of production to gain popular support. Nonetheless, Murray believed that Post-Fordism gave one key advantage to these pockets of resistance: whereas self-contained Fordist firms were free to alight to wherever material and labour costs were lowest, network-embedded Post-Fordist firms were far more tied to their communities. Under these circumstances local socialists could have greater leverage to experiment with new strategies of socialised ownership which could be sustained against threats of capital flight.

Murray and the team he gathered together would soon have an opportunity develop and test his theories—not where the old regime was weakest, but in the very Heart of Empire.

Restructuring for Labour

Between 1981 and 1986 London was governed by an eclectic group of radical socialist Labour councillors led by Ken Livingstone. Veterans of New Left struggles against County Hall, these inside-and-outside-the-state officials turned County Hall into a leftist bastion against Thatcher’s government across the Thames. But if the GLC struggled against Thatcher, it also struggled against the political economy of London itself. Between 1971 and 1981 London lost a third of its manufacturing workforce, and unemployment in the city grew to 400,000—the largest of any Western City. Old-style Keynesianism, new-style monetarism, Thatcherian privatisation, and financialization—nothing was pulling the metropolis out of its rut. It was time for something new.

In 1981 the GLC hired Robin Murray as its Chief Economic Advisor and tasked him with developing a strategy for addressing London’s declining economy. A cooperator in practice as well as ideology, Murray worked with other economists and activists to produce what would become known as the London Industrial Strategy (LIS). London’s economic woes, Murray argued in the volume’s introduction, were due to a lack of capital for firms, a lack of coordination between firms, and a lack of economic democracy within firms. Short-sighted private owners, caught up in competition and unwilling to relinquish control, were not up to the challenge of restructuring their firms for the Post-Fordist era. Their only solution was to ‘squeeze the poor’ through lower wages, poorer working conditions, or outright capital flight. But, Murray insisted, there was another way. ‘The GLC’s view,’ he argued, ‘is that (economic) restructuring can take place in many different ways, with different consequences for both workers and consumers. One of the main functions of a public body concerned with industrial intervention is to ensure that any restructuring that does take place is undertaken in the interests of labour and not at its expense.’

To carry out this ‘Restructuring for Labour’, as the LIS referred to it, the GLC established the Greater London Enterprise Board (GLEB) in 1983 as its primary agency for job creation and industrial intervention. In classic New-Left terms, GLEB’s initiatives took the form of an ‘inside-outside’ strategy. On the one hand, the GLEB would use the power of the public purse and an alliance with unions to forge industrial democracy within firms. In exchange for providing capital loans, GLEB demanded that firms open up their shops to unionisation, hold to the prevalent wages and working conditions within their sectors, and democratically develop an ‘enterprise plan’ in coordination with their workforce. While this was not outright municipal ownership—municipal share-holding was more accurate—the GLEB’s loans nonetheless exerted public influence within the ‘black box’ of private firm management to an extent which neither Keynesian nor monetarist remedies ever attempted.

On the other hand, GLEB used its leverage to empower capital’s opponents outside private firms. For example, it provided grant aid for Trade Union Resource Centres across the metropolis, used its procurement powers to purchase from worker-cooperatives (prefiguring Community Wealth Building today), established an Early Warning Unit to find out about prospective factory closures, and developed a Popular Planning Unit, led by among others Hilary Wainwright, to help trade unions and communities prepare alternative proposals for economic development in their communities. All these activities were intended to reduce private capital’s hegemony in the metropolitan economy and civil society.

It is important to emphasise that GLEB’s activities on behalf of labour, industrial democracy, and community power were not justified on the grounds of ethics alone, but also on the grounds of economic viability. What was good for the workers, the GLEB insisted, was good for London’s economy. As Murray insisted, ‘…our initiatives do not run counter to the intuitional law of value. They are as technically ‘efficient’ as capital’s version of restructuring. What all of them imply is a quite different product, technology, and conditions for labour. This is why I refer to them as restructuring for labour.’ A similar logic led the GLEB to insist that any industry it funded should have active policies on behalf of anti-sexism and anti-racism: prejudice, in addition to being an absolute evil, also brought no competitive advantages to London’s economy.

In this way, the industrial policy of the GLEB aligned with the GLC’s broader goal of updating socialism as a whole: a socialism that could promote an Industrial Plan as well as handbooks on lesbian rights, sponsor the arts as well as support trade unionism. If London’s economy partly depended upon unleashing its people’s creativity, rather than stifling that creativity under Fordist regimentation, then encouraging the empowerment and expression all London’s diverse population could also serve as tools of economic growth.  It was as much a recognition of the new economy as of new social movements which prompted Livingstone to declare that ‘I have always felt that the Labour Party’s almost exclusive concentration on the employed white male working class was a weakness… You need a coalition which includes skilled and unskilled workers, unemployed, women and Black people, as well as the sexually oppressed minorities… that means we have to change.’ For three years, GLEB was part of this change.

Critiques and Lessons

The death of the GLC is well understood by now. Incensed by Livingstone’s generous spending and social policies, Thatcher’s government called as early as 1983 for County Hall’s abolition. While cloaking these arguments in terms of ‘efficiency’, Thatcher’s real motivation was spelled out by Norman Tebbitt of the Conservative Party. ‘The Greater London Council,’ he grumbled, ‘is typical of [the] new modern divisive socialism. It must be defeated. So we shall abolish the Greater London Council.’ In March of 1986 the GLC was indeed abolished, its powers distributed to the boroughs. The GLEB itself would limp on, shorn of its radical personnel and ideology.

So, what were the tangible results of the GLEB in its Livingstonian glory? In the first three years of its existence the Board invested in 200 firms. In perhaps a quarter of its larger recipients, GLEB aid introduced or increased union membership for the first time. Another quarter of these firms became or were transitioning toward cooperative ownership under the GLEB’s guidance. Nonetheless, these results were paltry indeed as compared with the scope of GLEB’s ambitions or the scale of London’s challenges. While the capital’s economy would indeed restructure over the subsequent decades, it would do so in the most labour-unfriendly ways imaginable.

The were some obvious reasons for GLEB’s failure, the most obvious being the Board’s lack of resources. With an annual budget of only £30 million (approximately £122.5 million today), GLEB lacked the capacity to loan to—and therefore shape—the ‘commanding heights’ of London’s economy in the technological and financial sectors. Denied influence over these heights, and by extension the rest of London’s economy, GLEB was forced to loan to smaller and less influential ‘downstream’ sectors and firms. Another obstacle, of course, was political resistance from Tories, conservative Labourites, and the more obstinate elements of the GLC civil service.

The most troubling obstacle to the GLEB’s success, however, lay in a structural tension within their own mission: to both extend the power of London workers and to increase the profitability of London firms. While these goals might align in the abstract long run, in the concrete short-term there were trade-offs to be made between pro-labour policies—higher wages, shorter hours—and immediate profits. And given the firm’s dependence on profits, the state’s need for taxes derived from those profits, and the GLC’s broader ambit of increasing employment within the capital, the GLEB’s goal of modernisation often took precedence over their goals around industrial democracy and equal opportunity. As Alan Cochrane complained, ‘…the GLC and GLEB seem to be in danger of becoming radical management consultants rather than moving towards socialist solutions.’ Murray’s vision of ‘reconstructing for the market’ seemed, in practice, to widen the inequalities and divisions created by this market between a small core of skilled workers and an army of temporary, low-paid workers.

More cynical critics of the GLC argued that this development was a feature, not a bug, of the GLC’s Post-Fordist constituency. Writing in Capital & Class, Mike Geddes argued that the GLC’s base was in the ‘…the women’s, black and peace movements’ and ‘a multitude of progressive community campaigns’, ‘rather than the trade unions or the workers’ party’. Holding to a ‘radical-populist’ rather than a ‘socialist’ ideology, the GLC was more interested in opening up opportunities for discontented New Lefties than building working-class hegemony. The result, Geddes complained, was to ‘install new, mostly politically radical professional and managerial personnel into the upper echelons of the existing state structure, rather than making any real change to the fundamental pattern of social relations… management change rather than restructuring for labour.’  Well then.

To critique the GLEB for pursuing both economic and social goals, however, was profoundly silly. As Michael Rustin wrote in an appraisal of the GLC for the New Left Review, ‘Capital—dead labour, one element of the forces of production—is a necessary economic function as well as an antagonistic interest.’ Every socialist project, from cooperatives to state-owned enterprises, must balance the technical requirements of capital accumulation with the social requirements of managing and distributing that accumulation. This was an abiding tension, perhaps a paradox—but not an inherently reactionary one, and certainly not one unique to the GLEB. As Rustin continued, ‘restructuring’ cannot be ‘for labour’ alone, but also has to be for capital (i.e., for the efficient development of the productive forces)—if not for the existing capitalists.’ To contrast economic development policies in terms of being ‘for labour’ or ‘for capital’, he concluded, was to mystify ‘the trade-offs that would have to be made (between present and future consumption, and producer and user interests) in any socialist economic strategy.’

With this in mind, the weakness of GLEB was not in attempting to balance capital accumulation and pro-labour policies, but in failing to develop the leverage needed to make this balance equitably. In this respect the GLEB sometimes fell into the old social-democratic trap of mistaking the market, rather than private ownership itself, for the enemy. For if the irrationalities of the market could be cured through planning, the irrationalities of private ownership could only be undone through power.

To gain this leverage, the GLC needed to further develop its power to shape and marginalise private capital. To be sure, the GLC already possessed certain tools towards these ends, including its ability to set labour-friendly public contracts with private actors, its powers of land-use planning (demonstrated through the community-oriented Coin Street development), and—most importantly—its equity influence over the firms the GLEB funded. As Murray later stated in New Left Review, ‘if there was one great lesson from the experience of the Greater London Enterprise Board it was that trying to encourage the social aims of public ownership without equity control was like operating through a gauze.’ Nonetheless, delivering such aid to firms under unreconstructed private ownership still left those owners able to contest and frustrate the GLC’s aims at every turn. For this reason, the GLC might have been better served investing in firms with different ownership structures—cooperatives and profitable municipal enterprises—in order to better modernise the economy, develop labour power, and both surround and roll back the frontiers of the private market. It was for this reason, Murray admitted in that same NLR article, that ‘nationalisation and social ownership should still be at the center of any socialist strategy,’ for ‘only in this way can we make progress in what I have called ‘the politics of production’.’

At the same time, the GLEB could have done more to broaden and radicalise the GLC’s constituency as a means of acquiring leverage over private Capital. This was a particularly sore point for veterans of the Board: for if unreconstructed Marxists critiqued GLEB for promoting social movements at the expense of trade unionists, many Board members saw a very different reality on the ground. The Board provided a disproportionately small amount of aid to supporting independent Black or Women’s cooperatives or their unionisation efforts. The troubling reason for this failure was a tension within the GLC’s constituency itself:  demands by white community groups and male trade unionists for autonomy, and demands by women and racial minorities for access. Given the former’s financial and numerical weight within the local Labour Party, the GLEB largely failed to press the difficult conversations needed to ensure equity within them.

By failing to reach out to new constituencies, the GLEB failed to develop a broader base with which to force private companies to restructure for labour, or to develop a constituency for new forms of socially-owned enterprises. As Hilary Wainwright stated a year after the GLC’s abolition, ‘Our experience leads us to argue that unless socialists use the state resources over which they win political control to make working-class organisations—in the community as well as in production—one of the driving forces of their economic strategy, then that strategy will largely fail. And furthermore, the results will not last.’

She was right then, and she is right now.

What Must Be Done

The vision of future socialism embodied by Livingstone’s GLC, just a glimmer in 1981, is now a vital force in the left and can be seen everywhere from platform cooperativism and intersectional organising to radical municipalism. To take the next step and synthesise these separate advances into a durable political movement, however, we must build on a final insight of Robin Murray’s: that cooperation, even above money and material, is the most valuable resource the Left must possess. Cooperation, as Audre Lorde long ago recognised, does not mean the sublimation of anger and disagreement. But if we do not cultivate cooperation through our disagreements, we will be co-opted through our isolation. In a society and economy more diverse than ever before, we need cooperation to build the political and financial autonomy needed to resist, and ultimately supplant, unreconstructed private capital. The GLC, of course, failed to overcome differences and divisions within its ranks. But by getting so close—as close as we have recently come to a viable socialism of difference—they left us better able to understand what we must to do to move forward.

‘There is an alternative,’ Robin Murray wrote in 1990. ‘It has grown up in the new movements, in the trade unions, and in local government over the past twenty years. It has broken through the bounds of the Left’s Fordist inheritance in culture, structure and economics. From it can develop… an alternative socialism adequate to the Post-Fordist age.’ Either we realise this alternative today, or neither ourselves nor our planet will have one in the future.