The Condition of Postmodernity 13 - autonomous learning

140 Political-economic capitalist transformationthreatened and the USA, which began the postwar era by using anticommunismand militarism as a vehicle for geopolitical and economicstabilization, soon found itself facing the problem of 'guns or butter'in its own fiscal economic policy.But in spite of all the discontents and all the manifest tensions, thecentrepieces of the Fordist regime held firm at least until 1973, andin the process did indeed manage to keep a postwar boom intact thatfavoured unionized labour, and to some degree spread the 'benefits'of mass production and consumption even further afield. Materialliving standards rose for the mass of the population in the advancedcapitalist countries, and a relatively stable environment for corporateprofits prevailed. It was not until the sharp recession of 1973 shatteredthat framework that a process of rapid, and as yet not well understood,transition in the regime of accumulation began.9From Fordism to flexibleaccumulationIn retrospect, it seems there were signs of serious problems withinFordism as early as the mid-1960s. By then, the West European andJapanese recoveries were complete, their internal market saturated,and the drive to create export markets for their surplus output had tobegin (figure 2.3). And this occurred at the very moment when thesuccess of Fordist rationalization meant the relative displacement ofmore and more workers from manufacturing. The consequent slackeningof effective demand was offset in the United States by the waron poverty and the war in Vietnam. But declining corporate productivityand profitability after 1966 (figure 2.4) meant the beginningsof a fiscal problem in the United States that would not go awayexcept at the price of an acceleration in inflation, which began toundermine the role of the dollar as a stable international reservecurrency. The formation of the Eurodollar market, and the creditcrunch of 1966-7, were indeed prescient signals of the United States'diminished power to regulate the international financial system. Itwas at about this time too that import substitution policies in manyThird World countries (particularly Latin America), coupled withthe first big push by multinationals into offshore manufacturing(particularly in South-East Asia), brought a wave of competitiveFordist industrialization to entirely new environments, where thesocial contract with labour was either weakly enforced or nonexistent.International competition thereafter intensified as WesternEurope and Japan, joined by a whole host of newly industrializingcountries, challenged United States hegemony within Fordism to thepoint where the Bretton Woods agreement cracked and the dollarwas devalued. Floating and often highly volatile exchange rates thereafterreplaced the fixed exchange rates of the postwar boom (figure2.5).More generally, the period from 1965 to 1973 was one in which the