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2 Between decline and restoration

2.1 The framework for the analysis
2.2 Changing regimes of accumulation
2.3. Changing roles of the state
2.4. The hypothesis: Technological strategies and US hegemony

US-European relations are changing. They are being reshaped by economic and technological processes and are constrained by political and military factors. In this chapter an analytical framework is developed, highlighting the relevant elements and their relations. The starting point is the crisis of the 'Fordist' regime of accumulation that in the post-war period had combined economic growth, integration of the world economy and technological development under the US hegemony. Deep changes in the structure of the world economy have brought to an end the economic and political effectiveness of such a model. In parallel, changes in the system of international relations have reduced the role and the degree of sovereignty of the national states The qualitative nature of these changes is outlined here, before addressing, in the next chapters, the empirical evidence on economic and technological processes. An interpretative hypothesis is than formulated, on the role of technological strategies in the changing US - European relations in the 1980s.

2.1 The framework for the analysis

The empirical study of the transformations in economic and technological processes needs an analytical framework in order to focus on the relevant elements and to understand their relations. Given the interdisciplinary nature of this study, it is not possible - nor it would be useful - to refer to traditional theories. Rather, a combination of different approaches will be used. The theoretical framework of reference on the economic processes include the neo-Marxist analyses of the regime of accumulation (Aglietta 1979; O'Connor 1973, 1984; Bowles et al. 1984; Davis 1984, 1985), a view of the international economic relations that takes into account the world-system model of the capitalist world-economy (Wallerstein 1979, 1984; Hopkins and Wallerstein 1980, 1982; Amin et al. 1982) and the studies of the international political economy (Strange 1984; Ilgen 1985). On technological change, the reference is to the studies that have focused on its relations to economic and social processes (Freeman 1974; Freeman et al. 1982; Rosenberg 1982; Blackburn et al. 1985). On the role of the state the analysis draws from the debate on the state in capitalism (Poulantzas 1973; Holloway and Picciotto 1978; Shaw 1984) and the analysis of the military is taken from the critics of the arms race (Mills 1960; Melman 1974; Thompson 1980; Thompson and Smith 1980; Kaldor 1982a; New Left Review 1982).

Figure 2.1 summarizes the elements that are relevant for the analysis and their relations. The elements are shown as relatively abstract 'structures', whose logic of action however informs the behaviour of the concrete actors and the processes that result. The economy, the social classes, the state, the military and technology are all crucial factors in defining the profile of a nation and its rode in the international division of labour and hierarchy of states. The network of relations among these key elements defines the system of social relations, the relations of production, the development of forces of production, innovation, the nature of the civil society and its relation to the state in the forms of a 'welfare state' or, when the military role is greater, of a 'warfare state'. This is the context for the development and application of technology within the national system and the outcome is a country's position in the international division of labour.

Figure 2.2 extends the previous model to international relations, with reference to the case of US - West European relations. Here the economic relations are part of a single world economy, ruled by capitalist market relations and the international division of labour. Goods, services, capital and technology flow across boundaries, and the national economies of the West are part of an integrated system. Political relations remain mainly 'external' relations among states, and they are mixed with the military relations within the Atlantic alliance. More uncertain is the relationship bet-weep civil societies of different countries, that are in no way institutionalized, but that can play a key role both in developing new international relations and in influencing the national political process on international issues.

Figure 2.1:The elements for the analysis and their relations

Figure 2.2:The system of relations between the US and Europe

The result of this combination of economic, political and military relations is a world order defined by a hierarchy among states, that is parallel to the hierarchy in the division of labour. The key concept here is that of 'economic power.' Thomas Ilgen defined it as 'the ability of states to structure or restructure the principles and procedures of the international economic 'regime' in which they participate' (Ilgen 1985: 2). Economic power thus is relative, measured among different states, while the 'economic strength' and wealth of a state are measured in absolute terms, by the resources and performances of usual indicators, such as product, income, competitiveness, monetary stability and so on (ibid.). This distinction will be useful when we come to find the divergent trends of the recovery of US economic power and the continuing fall in the position of its national economy: 'while American economic strength has declined relative to Europe and Japan, US economic power, as measured by the ability the shape and direction of rule change in the international economy, has held up remarkably well' (ibid.: 6).

Economic power in fact does not depend only on the success of the economy, but is the joint result of all the factors considered in the previous tables. Economic processes, technological strategies and political and military pressures, all contribute, often in a contradictory way, to the changes in the economic division of labour and hierarchy among states, two areas that in the 1980s have seen strong oscillations between the decline and restoration of US power.

A further distinction is needed between the simple exercise of power as a form of exhibiting strength and the ability to build on it a hegemonic system of international relations, in the economy as well as in politics. According to Davis, 'hegemony' has to be defined 'not as a single, all-embracing power relation... but as a dynamic system which unifies accumulation, legitimation and repression on a world scale. In this sense, American hegemony has been a historically specific form of adequation between the capitalist state system and the world economy' (Davis 1984: 7).

The regime of accumulation and the role of the state are two crucial coordinates of such a hegemonic system; some of the current changes in these two areas are outlined in the following sections.

2.2 Changing regimes of accumulation

The analyses of the economic and political order of the US postwar hegemony (Baran and Sweezy 1968; Aglietta 1979; Wolfe 1981; Parboni 1981; Amin et al. 1982; Bowles et al. 1984) have described the characteristics of a regime of accumulation often defined as 'Fordist', with standardized industrial production of mass-consumption goods. Moving from the US, this model has spread after the Second World War, with the rapid industrialization of Western Europe and Japan that reproduced the same American model of technologies and industrial organization that took its name, in the first decades of the century, from Henry Ford. High division of labour within the factories, employment of deskilled labour power, use of Taylorist techniques, growing levels of mechanization have been the principles of the organization of mass production of standardized goods (Aglietta 1979; Blackburn et al. 1985).

The consumption of these products has been guaranteed by the growing wages of workers and by a mode of consumption highly individualized (and highly wasteful of energy and materials) that had in auto, electrical appliances and durable goods its cornerstones. At the national level, the state has provided the general conditions for this regime of accumulation, creating the necessary infrastructures, making possible an accelerated urbanization and an efficient social reproduction of labour power, through the services of the welfare state (O'Connor 1973; Holloway and Picciotto 1978).

At the international level, the expanding trade has made possible an export-led growth, under the stability offered by the monetary system of Bretton Woods (Aglietta 1979; Parboni 1981). In fact, the monetary order has been the strongest and longest-lasting mark of US hegemony.

The end of the 1960s has seen the explosion of the contradictions of this regime of accumulation in each of these aspects. At the domestic level, this could be seen inside the factories, in the society, in the role of the state and in the political realignments (Castells 1980; O'Connor 1973; Bowles et al. 1984). At the international level, the old monetary order broke down, the trade system changed deeply and the last two decades had a history of oscillations between the attempt of the US to restore its power and the attempts to develop new mechanisms of regulation of the world economy and of international co-operation (Parboni 1981, 1986; Amin et al. 1982).

The capitalist countries that have fully developed the 'Fordist' regime of accumulation have converged to similar levels of production, productivity, income and consumption (see sections 3.1, 3.2 and 4.2), resulting in a substantial loss of the US share in industrial production, international trade and almost any other economic indicator. Such a weakening of the US economic strength does not mechanically translates into a loss of its hegemony, because, as Mike Davis pointed out:

in the absence of a significant trend towards an alternative capitalist coherence in the Centre, and under the pressure of radical challenges at the Periphery, the paradox arises of the reinforcement of US military and political paramountcy, under the banner of a second Cold War, at the same moment when the traditional economic (and, to some extent, ideological) supports of this power are collapsing.

(Davis 1984: 7)

Facing the crisis of 'Fordist' accumulation, a number of possible alternatives have emerged. One is the extension of the model to new developing countries, with the emergence of a 'global Fordism' (Lipietz 1982), bringing into the industrialized semi-periphery the same model of mass production and consumption (Castells 1986).

Another possible way out has been the attempt to intensify the process of accumulation in the countries of the centre, and the US in particular, with automation of industrial production and development of new services and information activities, in a 'neo-Fordism' that promises new mechanisms to increase accumulation, productivity and consumption. In the US this has led to a massive redistribution of income and wealth in favour of the ruling classes, producing a 'overconsumptionism' (Davis 1984: 18) model, with new sources of income, largely financial, that are spent 'intensively', in a short time and by a limited number of people, on new luxury goods and, increasingly, services that make a greater use of the labour of unskilled and underpaid workers (ibid.).

Combined with this process, but also with a degree of its own autonomy, there has been the massive growth of military spending in the US. In the US experience in the 1980s, this has been the only mechanism that could combine accumulation in the core sectors of capital with the emerging 'overconsumptionism' (ibid.: 36). Of all the contradictions of the 'Fordist' crisis, the growing militarization is perhaps the most extreme (see sections 3.5 and 4.3). This is also the process that has the more direct impact on the international order (see sections 3.6 and 4.7), asserting US power in a government system that increasingly assumes the form of a 'warfare state,' while the 'military-industrial complex' expands its control of the economy (Melman 1970, 1974). In this perspective, a 'military Fordism' could also emerge as the response of the US economy to the current crisis. It is remarkable that this would be the only outcome with a domestic focus, contrasting the increasing internationalization of the US economy and industry (see sections 3.3 and 4.4).

The problem for the US hegemony is the ability to maintain control over these changes and assure a degree of coherence to the emerging new regime, be it the 'global Fordist' version, 'neo-Fordism' or 'military Fordism' (Davis 1984: 17). For Europe and Japan, the crisis of the US hegemony represents a major opportunity: for the first time after the Second World War, they are not forced anymore to follow the rules set by the US for the regime of accumulation and have some possibility of choice on the direction of economic and technological change and on the international order.

While economic, social and ideological factors are all of key importance in this choice, the focus in this analysis will be on technology and on the role of technological strategies in the changing relations between the US and Europe, between the decline and restoration of the American hegemony. The development of new technological systems is crucial in the emergence of a new regime of accumulation (see section 4.1). Microelectronics, computers, telecommunications, biotechnologies, promise to be for the new cycle of growth what the technologies of autos, chemicals and energy have been for 'Fordism,' that is a technological system able to be generalized to the whole of the economy, in the activities of production and consumption, offering productivity gains and quality improvement, opening new markets and areas for investment (Perez 1983).

While the economic and social conditions for a new 'long cycle' of growth have not yet emerged, the development of new technologies is already at the core of the restructuring of the economic system and is central to the strategies of corporations and governments (see sections 4.4 and 4.7). The control and application of new technologies appears to be an increasingly important factor in the new economic and political order.

However, the various revised and updated versions of 'Fordism' so far discussed are not the only alternative for the future. In fact, the cornerstone of 'Fordism,' mass industrial production of standardized goods, has been increasingly replaced in many industrial sectors in advanced countries, by a system of flexible and specialized production, giving greater priority to quality, and developing production in a network of closely integrated smaller firms (Piore and Sabel 1984). Such processes are developing not only in the 'Third Italy' of the central and north-eastern regions, but also in industrial areas of France, Germany, Denmark, Sweden, and even in some areas of the United States (ibid.). It remains to be seen whether these 'niches' that have emerged in the restructuring of industry can become a comprehensive model for industrial organization, with new production systems and social relations, new technologies, products and market, that may be able to replace the remains of the 'Fordist' regime.

In any case, in the development of the future regime of accumulation other factors will play a role, including the questions raised by the civil society of the advanced countries on the forms of use and conservation of resources and the environment, the social usefulness of work, the reduction of the working time, and other issues related to the quality of the economic system.

2.3. Changing roles of the state

The changes in the economic structure and in the organization of the world economy include also deep changes in the nature and role of the state. The debate of the 1970s had well identified the domestic role of the state in performing its 'welfare' functions (Poulantzas 1973; O'Connor 1973; Holloway and Picciotto 1978), but it largely neglected the role of the state at the international level and the importance of militarism (Straw 1984). The recent growth of interest for these aspects has paralleled the changing role of the state from creating the conditions for capitalist production and reproduction within the domestic system, to emphasizing its activities of law enforcement, repression and militarism. This shift can be traced in the changing composition of public expenditures of the US, West European and even Japanese governments; it can be found in the shifting source of state legitimation, from domestic consensus to an 'external threat,' and in the increasing importance given to the political and ideological projection of state power in the world. Such a transformation in the nature of the state can be defined as a shift from a welfare state to a 'warfare state' (Mills 1960; Melman 1974; Thompson and Smith 1980; Kaldor 1983b; Shaw 1984).

For US-European relations in the 1980s such a shift has been particularly serious. It has paralleled the emergence of a new 'Cold War' (New Left Review 1982; Halliday 1983), with new confrontations between East and West and new rounds of the arms race. Western Europe became the 'theatre' for the deployment of new US nuclear weapons, the Pershing II and cruise missiles. It increased its military activism, undertaking a number of military adventures abroad, Britain in the Falkland Malvinas, France in Chad; both, with Italy and the US, in Lebanon; all of them, together with other countries, in the Gulf.

The new climate of military confrontation has emphasized the role of NATO, and of military relations among advanced capitalist countries. The use of the 'external threat' from the Soviet Union and the Warsaw Pact has been used to emphasize the vulnerability of the state and to legitimize a growing arms race. In this process the military strategies and technologies have led to a dramatic increase in the centralization of power and decision-making on the destiny of the Western alliance in the US hands. With the new weapons and strategies, Western European states have in fact resigned their power to declare (nuclear) war to the US, losing a fundamental power of the sovereign state. In parallel, within the national states, governments have increasingly reduced the power and ability of parliaments to control and decide on the issues of peace and war.

It is a paradox that such an 'eclipse of sovereignty' occurred when the strength of Western Europe's economy had equalled that of America. This is a further measure of the success of a strategy of political and military assertiveness in order to restore a declining economic strength.

The loss of European control over military policy, however, is strikingly parallel to the loss of control over economic policy. The internationalization of the economy has made irrelevant the traditional tools of economic regulation and intervention in domestic economies.

Supranational processes seem to dominate the scene in the 1980s both in military and economic issues. This has offered the US the possibility of very effective 'unilateral actions' and 'examples' (Yochelson 1985) to restore its leadership, rejecting the more co-operative attitude of the 1970s. Short of new forms of regulation of the world economy, and of the international order, giving greater say to the other countries and to social forces, the US strategy has scored some important successes.

The main obstacle on the way of the US 'restoration,' while the Western European states were 'eclipsing,' has come from the civil society on both sides of the Atlantic. Opposing various aspects of this policy, social movements and citizen's groups have increased their activity on international issues, trying to regain some degree of control over the processes and the decisions that were increasing instability and danger and that were making the national states irrelevant. This has been a common feature of the peace, ecology and solidarity movements, while it has happened to a more limited extent in the labour movement, confronted in a similar way by the internationalization of the economy.

2.4. The hypothesis: Technological strategies and US hegemony

The analytical framework so far developed provides the basis for an interpretative hypothesis on the role of technological strategies in the US attempt to revive its hegemony within the West in the 1980s. The focus here is on the US initiatives and their impact on the relations with the other advanced capitalist countries, Western Europe in particular. The specific bilateral relations among countries are not considered here, nor is the articulation of policies within Europe. The term 'Europe' will be often used to refer to the countries of the Western half of the continent; twelve of these are part of the European Economic Community (EEC); among these, only Ireland does not belong to NATO, the military alliance between the US and Western Europe, while France and Spain are part of the 'political' structure of the alliance and not of the military organization. The differences among European countries and the problems of their co-operation and joint action are not considered here.

Figure 2.3 summarizes the interpretation that is suggested; it applies the theoretical framework previously outlined to the case of US - European relations in the 1980s. In this hypothesis, the 1980s have seen a deep change in the relations between the US and Europe. A new US domestic hegemonic bloc has led to a dramatic reorientation of national policies and, in the international arena, it has tried to reverse the American decline. New strategies have been developed, aiming to restore a leadership role that had been eroded over the previous decades by the higher European economic growth and political autonomy.

Initially, this strategy has led to a 'shock treatment' in the areas of military and monetary relations, with the deployment of the 'Euromissiles' and the rising US dollar. Then the US strategy has developed a more complex design, that has used in particular technological strategies to reorganize the relations between the most advanced capitalist countries, on the bases of economic structures consistent with maintaining US power.

In the economy, the US strategy has focused on monetary and financial relations, where a degree of control greater than in trade and industry was possible. The steady rise of the US dollar until 1985 has become the main form - and the symbol - of the new US role in the world economy. The flows of goods and capital have been diverted towards the US economy. The forms of regulation of the world economy have moved from the consensual management of the previous years to more unilateral US attitudes. While this process has developed serious contradictions within the US economy, it has temporarily succeeded in restoring a major US role in the world economy.

In military relations, the position of the US as the superpower of the Western bloc has never been questioned. The greater European economic and political strength has never weakened the military ties to the US maintained by NATO. In the 1980s, with the emergence of a new 'Cold War,' NATO became a particularly effective instrument for reinforcing the US hegemony over Europe. The deployment in Europe of a new generation of US nuclear missiles, the Pershing II and cruise, became a test of political obedience by European government and parliaments, in spite of large public opinion opposition.

Figure 23: The hypothesis on the changing US-European relations in the 1980s

The new strategies and weaponry developed by the US and NATO, including the 'Euromissiles,' the 'Follow-on forces attack' (FOFA) war-fighting strategy, and the Strategic Defence Initiative (SDI), have led to a greater power of the US in the Alliance, without any control by the European allies. The success of the deployment of the Euromissiles and the lack of opposition to other US military programmes have marked the success of this US 'military offensive' against its European allies. It has also provided another symbol of the revived US hegemony over the West.

The economic and military strategies of the US in the early 1980s have thus been focusing on (and symbolized by) 'dollars and missiles.' These are the most 'abstract' variables of international relations, a direct expression of power and strength, symbols of the accumulation of value and destructive power. It is along these two variables that the positions of the US and Europe have been reshaped, by precipitating a crisis in the economic and military relations across the Atlantic.

Effective as they may be, 'dollars and missiles' cannot, however, increase forever. They have worked as a 'shock treatment,' to discipline reluctant allies, but they are unable to create a new permanent order in the West. They may reinforce but not consolidate the hierarchy of states; they may revive the US hegemonic role but not its economic strength; they may impose US power over its allies but not restore a broken consensus.

In this perspective, what is going to replace 'dollars and missiles' in the US hegemonic strategy for the end of the 1980s and the 1990s? Technology may be the answer. The development of new technologies - microelectronics, computers, telecommunications, biotechnologies, space and new materials - is a major economic and military priority for the US government and corporations and is an increasingly important factor shaping the new international relations.

In the military sphere, the development of high-technology weapons has been at the core of the US military strategies to regain superiority in the East-West confrontation.

In the economy, facing the problem of regaining a lead over the European economies and Japan, the development of new technologies offers to the US the possibility of containing the growing international competition and to create new comparative advantages and new activities, influencing at the same time the direction of innovation in the most advanced countries.

The 'Star Wars' programme of the US Strategic Defence Initiative can be considered as the symbol of this new strategy. SDI is the largest research programme ever financed by a Western government. Its objective is the creation of a new generation of 'defensive' military technologies that may provide the US with a new superiority, qualitative as well as quantitive, in the arms race. Within NATO it has the effect of concentrating the control over the development and deployment of weapons in US hands, with a further reduction of the control and autonomy of the European allies.

The US government argues that the results of SDI research will have extensive applications in other areas, with the promise of a high-technology future for the US economy. While the validity of these arguments has been seriously disputed, SDI certainly represents an important attempt of the US to direct the future technological progress towards sophisticated military technologies. This is the area where the US already has a remarkable advantage, putting under pressure the innovative strategies by the other advanced countries. In this way the US can keep an overall control over the advance of new technologies, now that Europe and Japan have developed technological capacities similar to those of the US, with a greater orientation towards civilian products and markets.

In the US technological strategy, SDI is only one part; there is a whole set of new policies that share the same objective of using technology as a weapon in international relations. The restrictions on the international transfer of technology; the growing regulation and active intervention in key areas such as semiconductors and telecommunications are only the most evident examples of a combination of strategies by the US government and corporations to regain technological power.

With such characteristics, the US attempt to restore its hegemony could be defined as a strategy of 'Technological Star Wars' against the other advanced capitalist countries, Europe and Japan. It is a strategy that is not limited to the SDI programme or to the military aspect of the development of new technologies. Rather, it aims to direct the technological competition in these areas where the US has the better positions, thus reproducing a technological advantage of the US on its most direct competitors.

In order to succeed, such a strategy does not require that these technologies be able to generate a new 'long wave' of growth of the world economy; in other words, a technological and economic success is not required. A political success will be enough. It will stop the erosion of the US technological lead, set the ground for the competition in the areas most favourable for the US, such as in military technologies, where the US has the greatest comparative advantage.

The consequence for Europe will be the imposition of the same technological model, strongly oriented towards military-related sectors. This is an outcome that can be favoured by the strict military and political link between the two sides of the Atlantic and that would lead Europe to renounce choices of greater technological originality, economic growth and political autonomy. Europe would return, just like in the immediate post-war period, to be a junior political partner, with an economy lagging behind the US and dependent on it for key technologies.

If the 'Technological Star Wars' strategy is the result of the current policies of the US government and of many US corporations, it also opens up deep contradictions for its costs, dangers and consequences, that make it a controversial strategy even within the US leadership. European reactions have been confused and contradictory. Governments, corporations and the civil society in Europe are deeply divided on the key issue of the changing US-European relations. No coherent European response has so far developed, but a number of alternatives have already appeared for the future of Europe.

This is the interpretative hypothesis guiding the analysis of the following chapters. Next, in Chapter 3, the economic processes will be reviewed, showing the relative decline of the US economy and the strategies to reverse it. In Chapter 4 the technological performances of the US, Europe and Japan will be analysed, with the strategies of corporations and the US government. Finally, the conclusions, in Chapter 5, will draw a final picture of these contradictory processes of decline and restoration of the US hegemony, and of the alternatives for the future of Europe.

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