not that work was too hard, but that society was too soft.
From the end of the 1960s – well before the famous ‘oil shock’ of 1973, which is often taken as a historical turning point – the profit rate began to fall in the United States.10 The business community realized this, and worried about it. How could this slump be explained? The mainstream economic press hastily pieced together a theory, or rather an ideology of the crisis in profitability.
In March 1969, Fortune reported a drop in profit.11 In July, the magazine found the culprit: rising labour costs,12 themselves fuelled by worker militancy. In a context of galloping inflation, faced with rising prices, unions were still managing to negotiate wage increases.13 At the same time, labour productivity, which had previously been progressing at a steady pace, was stalling. If profits were declining, it was claimed, this was only because of these two phenomena combined: while wages were rising under the pressure of social struggles, rising labour costs were no longer offset by sufficiently vigorous growth in productivity. However, ‘our productivity curve begins to flatten […] because some of the motivations – the spirit and the fear – have gone out of the producers. And maybe our inflation is persistent’.14
Debates on the causes of the ‘profit squeeze’ and the ‘strangulation of profits’ divided the economists. Keynesians, as usual, pointed to the weakness of demand, a phenomenon of under-consumption. Some Marxists, rather strangely, echoed the theory of the editorial writers of Fortune, while others formulated alternative explanations.15 Whatever the decisive factor behind the falling rate of profit – the strength of the working class (Boddy and Crotty), overaccumulation (Sweezy), increased international competition and the effects on prices (Brenner) – ‘the solution to the crisis was, as we shall see, to attack labor’.16
The dominant theory of the crisis – let’s call it the ‘theory of power relations’ – placed the blame on a socio-economic situation that was too favourable to the workers and their struggles. Rather than focusing on psychological considerations, it attributed the crisis to three main factors: (1) the Keynesian commitment to the maintenance of full employment, (2) the social protection systems of the welfare state, and (3) the power of the unions. If the tide was to be turned, none of these pillars should be left standing.
In fact, until the first third of the 1970s, the US labour market had experienced almost full employment. In this context, the supreme threat a boss could resort to, namely dismissal, was no longer perceived as so terrible. As one Detroit teamster recalls, ‘We could just walk in and get a job at any warehouse or dock. We didn’t care if we got fired’.17 Hence, also, the ability to say no, a freedom, a strength that triggered alarm on the opposite side.
‘In a nation where the government is formally committed to maintain full employment, what forces will restrain the perfectly human demand of labor for more money and more power?’ asked Business Week in 1970.18 If it was true that worker indiscipline was the daughter of full employment, people in the business community told themselves, then they would have to think seriously about putting an end to the latter. ‘Mass employment is not a politically viable option […] in short: what this country needs to block this band of madcats is a good depression’ – so wrote an economic chronicler of the early 1970s who allowed himself to be all the more provocative in that he signed his texts with a borrowed name, a revealing pseudonym: ‘Adam Smith’.19
When the spontaneous cycle of crises in capitalism does not offer this kind of opportunity, people can always devote their efforts to bringing it about artificially. And this is what they did, while waiting for a better solution: ‘between 1969 to 1970, the Nixon administration engineered a short recession in order to cool the economy, a euphemism for putting labor in its place’.20 In August 1971 it announced it was going to control prices and wages. The objective of a wage freeze, said one White House adviser, was to ‘zap labor, and we did’.21
As this policy started to bear fruit, an editor at Fortune finally foresaw, in 1971, reasons for hope: if a rise in unemployment were indeed to occur, ‘labor attitudes could change quite rapidly’.22 People had to realize that ‘even a few layoffs can have a dramatic effect’23 in cooling the ardour of protestors.
But as long as social welfare measures were in place, the threat of unemployment could not play its full role, given that the existence of unemployment benefits reduced ‘the “penalty” associated with being fired’.24 Publicly, however, the attack on welfare was justified by another kind of discourse. Neoconservative ideologues, headed by George Gilder, developed an anti-welfare discourse stigmatizing the ‘culture of poverty’: ‘the poor must not only work, they must work harder than the classes above them. […] But the current poor, white even more than black, are refusing to work hard’. But ‘the poor chose leisure not because of moral weakness, but because they are paid to do so’.25 For Gilder, the welfare state represented a moral threat, one that perhaps menaced civilization itself: by setting up relief, the welfare state meant that the poorest needed no longer comply entirely with market imperatives that were presented as powerful prods to virtue. Thus, unemployment benefits encouraged laziness; the right to retire dissolved filial duty towards one’s elders; disability benefit exaggerated the drawbacks of superficial physical defects, etc.
This marked a major comeback for some old doctrines. In 1786, in his famous Dissertation on the Poor Laws, Joseph Townsend deployed similar arguments to oppose welfare measures which, in his view, made the mistake of filling the bellies of the needy and blunting that precious stimulus, hunger. To force the poor to work, there was no need to constrain them by law. It ‘is attended with too much trouble, violence, and noise; creates ill will, and never can be productive of good and acceptable service: whereas hunger is not only a peaceable, silent, unremitted pressure, but, as the most natural motive to industry and labour, it calls forth the most powerful exertions’. Meanwhile, ‘the slave must be compelled to work; but the freeman should be left to his own judgment and discretion’.26 This is a valuable document in the genealogy of liberal morality: it tells us that its conception of ‘freedom’ presupposes the Damocles’ sword of poverty, and that the destruction of established forms of social solidarity is the precondition for the emergence of the ‘voluntary worker’.27
In the post-war period, however, there had been a heartfelt belief that these old ideas had had their day. If, in the earlier phases of capitalism, social insecurity could be considered ‘useful because it drove men – businessmen, workers, the self-employed – to render their best and most efficient service’,28 in contrast, in the age of affluence, Galbraith concluded in 1959, it had become clear that ‘a high level of security is essential for maximum production’.29 Unemployment benefits, for example, far from entailing a slackening of activity, obviously played an essential role in stabilizing the economy by sustaining demand.
Now, thanks to a new swing of the pendulum, it was this consensus which was challenged in the early 1970s. What some people hoped to return to was a society of social insecurity. ‘Government fullemployment policies’, wrote Gilbert Burck in Fortune in 1971, ‘have practically extinguished old fears of being out of a job for a long time. Unemployment insurance and other cushions provided by a wellintentioned society take the hardship out of strikes and enable strikers to stay out in relative comfort until the employer surrenders’.30 Hence the programme: get rid of those ‘cushions’ in order to revive the ‘old fears’ which the cushions seemed to have put to sleep.
How were the workers to be disciplined? The first option was, as we have seen, to exacerbate disciplinary power, at the risk of creating negative side effects. The second option, the one proposed by reformist managers, consisted in introducing forms of participation for self-discipline purposes. According to Stephen Marglin, ‘managerial initiatives to “humanize” work must be seen in general as a response to the increase in labour costs
