The best example of how the two schools approach the notion of capitalist crisis is provided by their treatment of the 1929 Wall Street crash and the Depression. This especially as seen in comparison with the 1987 New York stock-exchange crash and the general economic slowdown in 1970s and later.
For Regulationists, the two periods present completely different pictures. The Great Depression was an issue of “the all-round establishment of the regime of intensive accumulation” (Aglietta 2000: 99). The problem was uneven development of Departments I and II in the face of an under-established mode of consumption, which, in the relatively autonomous monetary sphere, grew into a financial crisis (Boyer 1990: 10).
For Open Marxists, on the other hand, the crash assumes a paramount significance19. Open Marxists do not analyse the economic slowdown of 1970s and 1980s. They simply take it for granted that this is a crisis of capitalism. Presumably, it is an expression of the falling rate of profit and that is it. And when the falling rate of profit expresses itself through stock-market crashes, there is the need to either face a full-blown crisis or postpone it. So, in 1987 “even the most fierce monetarists advocated expansion – anything to avoid the catastrophe, and confrontation, that a slump would bring” (Bonefeld and Holloway 1996d: 224-225). Once a crisis threatens to manifest itself, ‘capital’ extends credit to itself. More precise formulations than this are difficult, since it is not clear whether credit expansion is due to superstructure efforts, in the form of the state acting on behalf of ‘capital’. Open Marxists refuse to identify structures. Consequently, the temporal allocation is difficult to construe either.
As difficult it is to explain crises in this manner, so it is to explain booms. Why were there two decades of boom following World War II (while a very short-lived boom following the first World War)? All we learn is that in 1939-45 “capital did resolve its crisis, through blood. Capital was restructured and the basis for a new period of accumulation created” Bonefeld and Holloway 1996d: 225). In the meantime, two things remain unclear. The first is the notion that politics of combatting inflation has become the form of subordination of labour. On the one hand, expansion of money supply leaves, all things considered equal, the same ratio of command (Aglietta 330-31). On the other, at the state level, if all states have similar inflation rates, command of labour remains the same, and it is unclear why disciplining through national inflation rates should set in.
Secondly, Bonefeld states that “when, in 1982, Mexico threatened to default, monetarist orthodoxy was relegated to the dustbins of history” (Bonefeld 1996b: 38). Why the threat of default of a relatively small debt market, compared to the market for public debt, or consumer credit market, in the developing world, made ‘capital’ suddenly change its mind about deflation is left unexplained.
The regulation theory recognises modalities of crises, but the protracted economic slowdowns it views as signs of displacements of accumulation regimes. “A regime of accumulation is a form of social transformation that increases relative-surplus value under the stable constraints of the most general norms that define absolute surplus value” (Aglietta 2000: 68). This entails fixing duration and remuneration mechanisms for labour, standardisation of risks through welfare state, and so on (Aglietta 2000: 69).
Of course, the other side of the equation is consumption. The balancing of production and consumption and its effect on the creation of class struggle will be discussed in the next two section. But for now, let us just point out that a consumption mode is an integral part of the conceptology of Regulation Approach, Thus, Aglietta analyses how the homogenised consumption pattern were created through functional aesthetic (‘design’) and advertising techniques so that the “process of social recognition was externalized and fetishized.” The link to crisis analysis is clear:
In so far as Fordism increased the rate of surplus-value by developing an overall set of social relations that closely combined the labour process with the social consumption norm, the department producing means of consumption appeared to be endowed with a dynamic arising from consumption itself. Since accumulation managed to preserve a relatively regular rhythm thanks to a certain harmonization of development between the two departments, at the price of a planned obsolescence and a permanent devalorization of capital, the problem of effective demand was not too serious. (Aglietta 2000: 161)
Note the use of ‘rhythm’. Again, there is no sense in elaborating on valorisation crises without construing a certain notion of ‘capitalist temporality’ (Aglietta 2000: 61). The term ‘rhythm’ at least provides a good guidance to this.
Crisis starts to develop as the development of Department I becomes halting, with no further advances of mechanisation allowing surplus value extraction to preserve smooth exchanges between the two Departments (2000: 162)20. This leads to an upsurge in unemployment, breaking “the buoyancy of the social consumption norm” which can only develop if “there exist social modalities of finance, procedures by which society assumes responsibility for the risks and expenditure of a collective infrastructure” (2000: 163). At the same time, this crisis manifests itself most strongly as a “crisis in the reproduction of the wage relation” (2000:165).
Thus “the socialization of consumption becomes a decisive terrain and battle-ground of the class struggle”. Unless a new mode of consumption can be found, the crisis cannot be overcome. Compare this with Open Marxist insistence on money being the axis of class struggle (Bonefeld and Holloway 1996a:3).
At this point, the only way to overcome crisis is for the new consumption mode to develop fully to lead to a new regime of accumulation. In his Theory, written in mid-1970s, Aglietta noted that new principles of labour organisation combined with use of new technologies allowed for a flexibility in the labour process that could profoundly reshape modes of production. This could allow for a new regime of accumulation, Neo-Fordism, to be established (Aglietta 2000:168).