In the past two decades the French (or Paris) School of Economic Regulation has developed an ambitious historical-economic theory which has already had a major impact on efforts to understand the current malaise of the capitalist system and the accompanying economic transformations.footnote¹ On the face of it, the School’s favourable reception is not difficult to explain. The Theory of Regulation responds to the belief, widespread today, that orthodox economics has failed to interpret satisfactorily actual patterns of development, past or contemporary, and that, in particular, its tendency to economic determinism prevents it from taking into account in systematic fashion the powerful ways in which historically developed class relations, institutional forms and, more generally, political action have shaped the evolution of capitalist economies. For their part, then, the Regulationists explicitly seek to go beyond the ahistorical verities of neoclassical economics. Their relationship to Marxist approaches is less clear. Yet it would seem that their original intention was to grasp how networks of institutional forms, during the successive epochs in which they held sway, have affected the expression of—or actually modified—the underlying tendencies or laws of capital accumulation as these have been analysed in the Marxist tradition.footnote²

The Regulationists begin, methodologically, from the idea that the overly abstract and ineffectual character of much existing economic theory, as well as the undertheorized nature of much existing economic history, derive from ‘insufficient links between theory and empirical analysis on the one hand and from purely deductive and inductive methods on the other’. Their fundamental goal is to provide those links through ‘build[ing] a series of intermediate models’ to make theory more historically concrete and empirically testable, as well as more useful for historical interpretation.footnote³

The Regulationists thus deny that the capitalist mode of production is comprehensible in terms of a single set of laws that remain unchanged from its inception until its eventual supersession. They see the history of capitalism, rather, as a succession of phases, each distinguished by certain historically developed, socio-institutionally defined structural forms that give rise, so long as they are maintained, to distinctive economic trends and patterns. There is an obvious similarity to the Marxist project of grasping history more generally in terms of a series of historically developed modes of production, each marked by a structure of social-property relations that give rise, so long as it is maintained, to distinctive forms of economic behaviour and systemic laws of motion. Indeed, the Regulationists’ key concepts of mode of regulation and regime of accumulation can be seen to function with respect to the Regulationists’ phases within capitalist history—called modes of development—rather analogously to the way in which the Marxist concepts social relations of production and forces of production function with respect to the modes of production. Moreover, just as a number of recent Marxist theorists refuse to see the fundamental socialproperty structures that constitute a mode of production as either technologically or economically determined or as following a unilineal pattern of evolution, the Regulationists similarly insist that the structural forms that constitute their modes (or phases) of development within the history of capitalism must be understood as the outcome, to a significant degree, of class and political struggles.

It is the purpose of this essay to analyse and evaluate the Regulationists’ theory in terms of their own distinctive aspirations by examining, theoretically and historically, the conceptual links that they have actually constructed between high theory and economic history, and specifically the series of ‘intermediate models’ through which they have sought to understand capitalist development. Let us therefore begin by surveying the basic concepts and the main theoreticalhistorical results of the School.

Each regime of accumulation represents a distinct pattern of economic evolution which, though limited in historical time, is relatively stable. The immediate source of the dynamic specific to each regime of accumulation is a particular series of regularities which include: (i) the pattern of productive organization within firms which defines the wage-earners’ work with the means of production; (ii) the time horizon for decisions about capital formation; (iii) the distribution of income among wages, profits and taxes; (iv) the volume and composition of effective demand; and (v) the connection between capitalism and non-capitalist modes of production.footnote⁴ What is distinctive about the Regulationists’ standpoint is that the content of the regularities defining the pattern of economic growth that constitutes a regime of accumulation is viewed largely as an expression of institutional structures governing intra and inter-firm relations, the relations among capitals and the relationship between capital and labour—namely, the mode of regulation. (Regularity (v) seems to sit somewhat uneasily with the others, since it obviously cannot be grasped simply as a function of capitalist institutions, and this is a point to which we shall have to return.)

Each mode of regulation is constituted by a historically developed, relatively integrated network of institutions that reproduces the fundamental capitalist property relationships, guides the prevailing regime of accumulation, and helps make compatible the myriad decentralized decisions, potentially contradictory and conflictual, taken by the economy’s individual units. It functions, in particular, so as to achieve ‘a certain match between the transformation of the conditions of production (volume of capital employed, distribution between branches, and norms of production) and transformation in the conditions of final consumption (norms of consumption of wage workers and other social classes, collective expenditures).’ The network of institutions that compose the mode of regulation governs the accumulation process by establishing: (i) the nature of the capital–wage labour nexus and (ii) the type of inter-capitalist competition, as well as (iii) the character of monetary and credit relationships, (iv) the manner of adhesion of the firms of the national economy to the international economy, and (v) the forms of the state’s intervention into the economy.footnote⁵ In fact, in the actual working out of their theory, the Regulationists have focused primarily on the first two of these institutional nexuses. Indeed: ‘one of the many structural forms emerges as being especially important: wage/labour relations. . .the process of socialization of productive activity under capitalism’, that is, ‘the network of legal and institutional conditions governing the use and reproduction of the workforce’. As Boyer sums up, ‘this concept is sufficiently broad for us to be able to anticipate a priori close linkages between the form of wage/labour relations and the method of regulation’ and the great ‘extent to which economic crisis and change in wage/labour relations determine one another’.footnote⁶

The combination of mode of regulation with regime of accumulation gives rise, from the Regulationist standpoint, to a distinctive mode of development, with a distinctive type of cyclical, non-threatening and self-regulating crisis. The extension in time of each mode of development ultimately issues in a series of ever more crippling contradictions, which result from the fetters imposed by the already-existing mode of regulation upon the regime of accumulation. As the mode of development reproduces itself, hitherto virtuous circles thus give way to increasingly vicious circles. The outcome is a structural crisis, which—precisely because the old mode of regulation has broken down—is accompanied by the necessarily unregulated and conflictual action of classes, firms, political groups and governments. Out of these historically indeterminate processes of competitive economic war and socioeconomic and political struggle, one out of a range of alternative resolutions of the crisis is eventually hit upon. A new, historically given mode of regulation—which, by governing the historically developed regime of accumulation, makes possible a new mode of development—is the result.