Keeping the Aspidistra Flying: The Political Economy of Capital Accumulation in the United Kingdom
European Institute London School of Economics and Political Science London, United Kingdom
The paper analyses and evaluates British capitalist development and crisis using the novel approach devised by Jonathan Nitzan and Shimshon Bichler. The foundation of the analysis is rooted within the concept of differential accumulation, which emphasises the power drive of dominant capital groups to "beat the average" and exceed the "normal rate of return".
In doing so, Nitzan & Bichler articulate four regimes of differential accumulation, internal breadth via amalgamation, external breadth via green-field investment, internal depth via cost-cutting and external depth via stagflation. The inter-connected relationship between these regimes of differential accumulation, as well as their larger societal impacts, are analysed in light of British capitalist development since WWII and the current economic environment.
Five conclusions emerge from this paper, (1) Of the four regimes; amalgamation and stagflation are the most vital and tend to fluctuate contrariwise against each other. (2) Over a long period, amalgamation grows exponentially relative to green-field investment, contributing to the stagnating tendency of modern capitalism. (3) The wave-like pattern of mergers & acquisitions reflects the break-up of socioeconomic "envelopes", as dominant capital moves through successive amalgamation at the industrial, sectoral, national, supranational and global levels. In this sense, the current economic environment is an integral facet of differential accumulation. (4) Stagflation compensates for the periodic and, importantly, the current, lull in amalgamation. Stagflation, although appears as a crisis at the societal level, contributes significantly to differential accumulation at the disaggregate level. The current stagflationary crisis shall be "resolved" when dominant capital broke its existing envelope and pushes to continue amalgamation. Given however, there is nothing more to conquer beyond the global level, future stagflationary crises may prove more difficult to tame.