Winslow Taylor around the idea of scientific management which defined tasks in detail and essentially rejected the creative process of production altogether. Workers in this way were alienated from the mode of production and were subordinated to management control in the workplace.
This new model for production was adopted across the USA and in industrialising countries, including Korea during Japanese colonisation.
Over time however, there was a backlash from labour. Governments responded to the threat of the labour problem in Europe by invoking nationalism and revamping society’s state loyalty by kindling national support for foreign policy. This steered the sights of labour to another direction to some extent, but did not prevent the increasing tendency toward the welfare state of the early twentieth century. Until the Great War, social policy was increasingly ‘from below’ rather than completely elite led.
In Britain in 1906, the Liberal Party enacted several social reforms for labour. In the United States, the Progressive Party saw increased success in elections, and in Germany the Social Democrats in 1912 were victorious in elections. Militant labour unions emerged in the 1930s and it was only when those unions were de-radicalised and incorporated into the social infrastructure of economies that labour relations stabilised. Despite a history absent of socialism or welfarism, even the US showed signs of social protection through the legalisation of such unions. During the early years of the Cold War, the CIO in the spirit of anti-Communism eliminated any ‘Communist’ labour unions; an action that complemented the emerging powerful role of the USA in the global context (Rupert 1995). The Pax Americana era of history was in bloom.
From the 40s–70s, the global economy can be defined according to a more or less Keynesian market ideology of state regulation of the economy and intervention at some points, and a maintained welfare function likewise. In the early 1970s there was a crisis of the legitimacy of this system, but during its primacy, the ideology behind Pax Americana was consolidated via new forms of states, whose roles as participants in the consolidation of hegemony were to activate adjustment of economic policies at national levels. Two forms of states represent the most active participants in this world economy after the Wars, named by Cox as the neoliberal and neomercantilistic developmentalist forms (1987: 219+; 230+).
Events such as the Truman doctrine in the United States, and the Attlee settlement, which nationalised coal and steel in Britain, launched the new identity of welfare nationalist states in their adjustment to mixed economic forms of state. Welfare nationalist states with the most developed productive forces transformed into the new mixed economic form of state, and took on a new role in world politics as a ‘hegemonic’ leader.
Pax Americana: Forms of State
During the early phase of Pax Americana, market models of free trade and less state intervention were the norm. This meant that states became increasingly busy regulating economies, but only to the extent that they felt was necessary to harmonise with a global economy. Inequalities became increasingly prevalent - labour welfare was not prioritised in most cases and in particular in the developmentalist states i.e. South Korea.
Peripheral states industrialised during this third period. States with newly recovered political autonomy worked to modernise and became an integral part of the world production system, for better or worse. This occurred particularly in Latin America and Asia.
Rupert describes the post world war neoliberal ideological hegemony constructed by the USA (1995). He notes the tirade of anti-Communism in the international labour organisations implemented by US powers, painting a picture of Democracy Vs Communism. During this period, elite groups restructured liberal superpower objectives and prioritised international trade. This led to a perpetuation of a growth- and productivity-centred labour strategy, and the soporific quality of prosperity led governments to gloss over policies concerning social welfare. So, for world orders to become established in the ‘post feudal era,’ a separation into distinct spheres of politics and economics has been crucial and more noticeable. The delineation between these categories
potentially masks exploitation of workers through placing responsibility for what happens to workers within the ‘economic’ field.
The variation between the ideal type of a welfare nationalist state and the mixed-economy state has, firstly, to do with the common objectives seen across categories of these forms of state. While the forms of state are nearly identical in terms of the tripartite relations inherent to corporatism, what marks the mixed-economy state are the ‘goals pursued, in the uses to which the structure was put’ (Cox 1987: 221). The first type retained the objectives to a) protect national economies from external affects, and to b) enhance national power in contrast to enemies or rivals. However, the goal of the mixed economy state was to achieve economic growth nationally, and to participate unflinchingly in a free and open world economy internationally.
Perhaps the most significant event during ‘Pax Americana’ was the depiction of ‘best’ practices for forms of state in the global economy, conveniently organised by the American government. The US intended both to provide a new institutional planning mechanism for national economies and also design a blueprint for international economic relations based on the tenets of currency stabilisation and liberalisation of international trade. A very important meeting was held in 1944 in Bretton Woods, New Hampshire. 44 delegates of the United and Associated Nations met essentially to design a system that would organise the financial and economic requirements and norms for the post-war world.
Delegates decided on a type of gold standard: the value of the American dollar would be fixed to the value of gold. This system would be called the Bretton Woods System.
A British economist named John Maynard Keynes and his American colleague Harry White participated in this architecture for the post-war world by way of a Bretton Woods system. White was most influential in the creation of the IMF, a fund that was originally intended to reach the size of half of the world’s imports. This would be a reasonable size to garner significant influence on the global monetary system. The IMF did not reach this size in practice and, in the early 1990s, when more than USD 1 trillion crossed international boundaries every 24 hours, the IMF controlled liquidity at an amount equal to only two percent of total global imports. However, at its inception it was intended to act as recourse for potential instabilities that could occur in the global economic system (Power 1995).
Keynes’s vision for the global economy was based on different ideals
which contrasted with those of many of the delegates at the Bretton Woods meetings, and in particular to White, despite their close collaborations. Keynes pictured the IMF as a type of global safety net for developing and developed countries alike, which would eliminate ongoing persistent debt problems. The International Bank for Reconstruction and Development (IBRD) that became known as the World Bank was designed at the meetings and began to function in 1945. Keynes may have emphasised the role of protector and aid designator of the World Bank and he hoped that the IMF could act as a world central bank with a reserve currency of its own that would create international reserves.
However, the establishment of the IMF and the World Bank ‘reflected [U.S. Assistant Treasury Secretary] Harry Dexter White’s ideas rather than Keynes’s, not because they were technically superior but because the Americans had the power’ (Chandavarkar 2001).
By 1946 the IMF had real authority to require adjustments in member countries that appeared to be lagging behind more advanced nations in the global economy. The IMF had, and has, the power to act as a type of regulator and controller of world orders. The stipulation for use of IMF funds was that receiving countries would adopt particular forms of state, and production processes. Therefore the IMF had a powerful role to play in the formation of the New World order. During 1946 to 1958, major states set an example to other developing countries by adjusting their own national economies to adapt to the New World order of the time, Pax Americana. The Marshall Plan sealed the legitimacy of leadership within this historical bloc, via grants offered to countries recovering from the War. Aid provision seemed to be a quick solution with long-term benefits (Rupert 1995: 52–3).
Pax Americana: Relations of Production
In the post-war era, the primary mode of relations of production in the West involved tripartism, state corporatism, and central planning.
Tripartism emerged as a negotiation tool to unify the three agents of large- scale industries: the state, employers, and employees. State corporatism incorporated tripartism into partnerships, meaning that labour took a participatory role in industrialisation, but enjoyed little real protection or job security. While the form of state remained similar after the Wars, the state’s role was no longer to direct and control the economy as it had been during the War but was to manage it through central planning. This welfare nationalist state form had originated during the wars as a
protective but controlling entity. For its cohesion, ideological consensus was necessary: wartime and post-war restoration facilitated nationalist mentality as well as centrally-controlled provisions distribution.
A mixture of Keynesianism and reformism predominated throughout the 1940s in political economics, though Cox names the mixed economy
‘neoliberalism’ (1987: 218). Cox’s interpretation here should not be confused with the ‘neoliberalism’ of the more recent historical bloc.
During the post-War era in England, a classic example of the mixed economy consensus is crystallised. The Conservative Party sought full employment and used monetary and fiscal techniques to regulate the level of aggregate demand, activities usually attributed to state behaviour within a Keynesian economy. However, simultaneously, the Labour Party sought public collective provision of goods. From 1945 to 1966, there was relative consensus between the parties. ‘Mixed economy’ in these years meant that major manufacturing industries were transferred to public ownership, an action applauded by Labour, since good service was the overall aim. On the other hand, free trade was endorsed, a position traditionally taken by the Conservative Party.
In England at this time, major manufacturing industries were national- ised if they met particular standards decided by consenting parties. The standards for nationalisation of industries were intended to gauge the following criteria: the extent of efficiency; whether or not industrial relations could be deemed satisfactory; whether the industry was holding a monopoly position; whether it retained too much investment of capital; or whether it was a supplier of basic materials. Simultaneously, workers became slightly more integrated into political life when trade unions were given a chance to speak at the Labour Party’s annual conferences in the UK, to the extent that at some points speakers were too challenging for the Party. In 1966, Labour established the Board for Prices and Incomes.
Any request for wage increases had first to be referred to this Board. This regulation was an indication that ‘consensus’ was beginning to wane.
However between 1945–1966, the Nationalist Welfare State evolved into a new form and production and therefore took on a new character.
During the discussed period, social relations of production or accumu- lation were not drastically altered. But Pax Americana is distinct as an economic and political hegemony that assured hierarchical systems within corporatism. In developmental states, employers emerged victorious and enjoyed state support, while labour remained at the bottom rung (which is discussed in the following chapter). The ‘hegemony’ of Pax Americana is an
era marked by increased American funding of development in penetrated states such as South Korea and the formation of the foundations for dependency. This historical bloc began to modify in the 1970s.
The 1970s can be characterised by what Rupert calls a ‘laissez-faire fundamentalism’ (2000: 44). Liberal globalization that led to neo- liberalism’s global popularity for economic development included not just trade but also finance. During this period, the increase and ease of financial exchanges were affected by excess liquidity from US balance of payments deficits. Furthermore, the fixed rate regime and capital controls, implemented at Bretton Woods, saw their own demise. Rates of specu- lation and foreign exchange trade increased. American hegemony did not last, and Cox claims that this was evident from the late 1960s and onward, when America’s ‘consensual’ fragility was revealed. A space revealed itself for a new organisation of the global economy: for new leadership, or dissent.