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stalling. If profits were declining, it was claimed, this was only because of these two phenomena combined: while wages were rising under the pressure of social struggles, rising labour costs were no longer offset by sufficiently vigorous growth in productivity. However, ‘our productivity curve begins to flatten […] because some of the motivations – the spirit and the fear – have gone out of the producers. And maybe our inflation is persistent’.14

      Debates on the causes of the ‘profit squeeze’ and the ‘strangulation of profits’ divided the economists. Keynesians, as usual, pointed to the weakness of demand, a phenomenon of under-consumption. Some Marxists, rather strangely, echoed the theory of the editorial writers of Fortune, while others formulated alternative explanations.15 Whatever the decisive factor behind the falling rate of profit – the strength of the working class (Boddy and Crotty), overaccumulation (Sweezy), increased international competition and the effects on prices (Brenner) – ‘the solution to the crisis was, as we shall see, to attack labor’.16

      The dominant theory of the crisis – let’s call it the ‘theory of power relations’ – placed the blame on a socio-economic situation that was too favourable to the workers and their struggles. Rather than focusing on psychological considerations, it attributed the crisis to three main factors: (1) the Keynesian commitment to the maintenance of full employment, (2) the social protection systems of the welfare state, and (3) the power of the unions. If the tide was to be turned, none of these pillars should be left standing.

      In fact, until the first third of the 1970s, the US labour market had experienced almost full employment. In this context, the supreme threat a boss could resort to, namely dismissal, was no longer perceived as so terrible. As one Detroit teamster recalls, ‘We could just walk in and get a job at any warehouse or dock. We didn’t care if we got fired’.17 Hence, also, the ability to say no, a freedom, a strength that triggered alarm on the opposite side.

      When the spontaneous cycle of crises in capitalism does not offer this kind of opportunity, people can always devote their efforts to bringing it about artificially. And this is what they did, while waiting for a better solution: ‘between 1969 to 1970, the Nixon administration engineered a short recession in order to cool the economy, a euphemism for putting labor in its place’.20 In August 1971 it announced it was going to control prices and wages. The objective of a wage freeze, said one White House adviser, was to ‘zap labor, and we did’.21

      As this policy started to bear fruit, an editor at Fortune finally foresaw, in 1971, reasons for hope: if a rise in unemployment were indeed to occur, ‘labor attitudes could change quite rapidly’.22 People had to realize that ‘even a few layoffs can have a dramatic effect’23 in cooling the ardour of protestors.

      But as long as social welfare measures were in place, the threat of unemployment could not play its full role, given that the existence of unemployment benefits reduced ‘the “penalty” associated with being fired’.24 Publicly, however, the attack on welfare was justified by another kind of discourse. Neoconservative ideologues, headed by George Gilder, developed an anti-welfare discourse stigmatizing the ‘culture of poverty’: ‘the poor must not only work, they must work harder than the classes above them. […] But the current poor, white even more than black, are refusing to work hard’. But ‘the poor chose leisure not because of moral weakness, but because they are paid to do so’.25 For Gilder, the welfare state represented a moral threat, one that perhaps menaced civilization itself: by setting up relief, the welfare state meant that the poorest needed no longer comply entirely with market imperatives that were presented as powerful prods to virtue. Thus, unemployment benefits encouraged laziness; the right to retire dissolved filial duty towards one’s elders; disability benefit exaggerated the drawbacks of superficial physical defects, etc.

      In the post-war period, however, there had been a heartfelt belief that these old ideas had had their day. If, in the earlier phases of capitalism, social insecurity could be considered ‘useful because it drove men – businessmen, workers, the self-employed – to render their best and most efficient service’,28 in contrast, in the age of affluence, Galbraith concluded in 1959, it had become clear that ‘a high level of security is essential for maximum production’.29 Unemployment benefits, for example, far from entailing a slackening of activity, obviously played an essential role in stabilizing the economy by sustaining demand.

      Now, thanks to a new swing of the pendulum, it was this consensus which was challenged in the early 1970s. What some people hoped to return to was a society of social insecurity. ‘Government fullemployment policies’, wrote Gilbert Burck in Fortune in 1971, ‘have practically extinguished old fears of being out of a job for a long time. Unemployment insurance and other cushions provided by a wellintentioned society take the hardship out of strikes and enable strikers to stay out in relative comfort until the employer surrenders’.30 Hence the programme: get rid of those ‘cushions’ in order to revive the ‘old fears’ which the cushions seemed to have put to sleep.

      How were the workers to be disciplined? The first option was, as we have seen, to exacerbate disciplinary power, at the risk of creating negative side effects. The second option, the one proposed by reformist managers, consisted in introducing forms of participation for self-discipline purposes. According to Stephen Marglin, ‘managerial initiatives to “humanize” work must be seen in general as a response to the increase in labour costs associated with indiscipline born of prosperity’31 – but such well-meaning plans faded away as soon as unemployment became a reality.

      Discipline is not imposed in the same way in closed institutions, those which you can leave only by escaping, such as prisons, as it is in open institutions, those from which you can always resign, such as businesses. In the former, discipline reigns in a vacuum, preventing subjects from leaving; in the latter, it works by threatening you with forced expulsion. On the one hand, confinement,

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