Michaels Burawoy’s the Politics of Production (1985), stands out as an important contribution to Marxist political economy in general and in particular Marxist analyses of the dynamic interaction between welfare state institutions, the juridical regulation of industrial relations, and the labour process. Inter alia, Burawoy set himself the task of developing an analysis of the “politics of production which aim[ed] to undo the compartmentalization of production and politics by linking the organization of work to the state” (p.122). Burawoy used the dynamic interaction between labour market, welfare state, and managerial regimes to generate a typology of labour relations regimes. Specifically he argued that “the process of production is not confined to the labour process… It also includes political apparatuses which reproduce those relations of the labour process through the regulation of struggles. I call these struggles the politics of production or simply production politics” (Ibid: italics in original).
Burawoy argued that for classical Marxist political economy it was simply assumed that the naked coercion of the labour capital relation; i.e., that the dependence of workers on wage labour for its existence and reproduction through time was sufficient to bind workers to capital and by extension to the arbitrary authority of management. It is the latter which Burawoy labels as market despotism, wherein “the anarchy of the labour market is replaced by despotism in the factory.” While Burawoy argues this characterization of labour relations regimes was historically correct for sectors such as the New England mills after the 1860s or in the contemporary agricultural sector of the US, it does not capture the essential dynamics of post-WWII labour relations regimes in much of the advanced capitalist zone.
For Burawoy two kinds of state intervention caused a decisive break with “the ties binding the reproduction of labour power to productive activity in the workplace” (p.125). The first of which being the development of the welfare state and its associative institutions which put an implicit floor on wages and the second being state intervention directly in the relations of production via industrial and labour relations laws which severely restricted the arbitrary exercise of authority by management. Burawoy concluded from the above therefore that:
…management [could] no longer rely entirely on the economic whip of the market…..Workers must be persuaded to cooperate with management…..The generic character of the factory regime is therefore determined independently of the form of the labour process and competitive pressures among firms. It is determined by the dependence of workers’ livelihood on wage employment and the tying of the latter to performance in the workplace. State social insurance reduces the first dependence, while labour legislation reduces the second (p.126).
It was this dynamic of negotiated internal consent over the labour process and the incomplete external alienation of labour from the means of subsistence owing to the provision of a social minimum wage by the state that Burawoy designated as a “hegemonic regime.”
Yet, by the early nineteen eighties Burawoy began to see a new emergent dynamic arising in the advanced capitalist zone which he described as hegemonic despotism.
The new despotism is founded on the basis of the hegemonic regime it is replacing. It is in fact hegemonic despotism. The interests and capital and labour continue to be concretely coordinated, but where labour used to be granted concessions on the basis of the expansion of profits, it no w makes concessions on the basis of the relative profitability of one capitalist vis-à-vis another – that is, the opportunity costs of capital. The primary point of reference is no longer the firm’s success from one year to the next; instead it is the rate of profit that be earned elsewhere (p.150. Italics in original, emphasis added).
Here Burawoy, although without the benefit hindsight and without calling it as such, was describing one of the central characteristics of neoliberalism; namely, the increasing international competition between capitals and the increased mobility of capital relative to wage labour. Further Burawoy identified a key shift in the way in which the relative failure or success of capitalist firms was being evaluated—according to the opportunity costs of capital.