POLI 212 Lecture Notes - Industrial Unionism, Class Conflict, Pragmatics
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JANUARY 30, 2012:
Industrial capitalism and the social order:
Industrialization and sequences and path in industrialization→ an argument about
How radical socialism comes to be transformed into social democracy, the transition
from radical socialism to electoral socialism→ the political mainstreaming of a
political option, of significant for the political economy and the working class.
Timing of industrializing as an interpretation of the institutional legacies for the
institution of the market, and the market understood under financial markets,
product markets, and labour markets.
What are the legacies of industrialization for economic policy and foreign economic
The prototypical early industrializer→ Great Britain and three late industrializers→
France, Germany and Italy.
Great Britain: Industrialization occurs around textiles (cloth from wool→ domestic
product, and cotton inputs→ imports from colonies). It is significant that it is this
product because textile production has a backward linkage to agriculture. The
backward linkage encourages agricultural capitalism, production for the market,
production for use and sale and not simply for consumption on a farm. It
encourages the commercialization of agricultural, larger units of agricultural
production. “Proto-industrialization” occurs. Some of the first steps in the
production of textiles don’t require the construction of large factors→ it can be
subcontracted out to small farmers in agriculture (a highly decentralized system
that links agriculture and industry). What does this imply for capital accumulation?
It doesn’t take much capital to start industrial production as a result of
decentralization (large number of relatively small competing firms). The craft
production slowly over time grows into a larger industry. Start-up costs for these
firms are relatively small (starting with small factories). Firms are relatively easy to
finance. Much investment in early industry is the re-investment of earnings→
investment is connected to self-investment. Many of these firms are family firms; it
doesn’t take much capital to get started, which has consequences for the financial
sector. It produces a particular type of banking system. The finance of industry
does not depend on banks, and it doesn’t depend on large national industrial banks.
What emerges is a decentralized financial system characterized by regional banks
designed to serve small family firms (not nationally integrated). It means banks did
not have an important role in the management of firms because they didn’t have a
strong financial stake in firms because the capital could be sub generated. Banks
and industry were separated. When banks invested, it wasn’≈Ωt in domestic
industry but investment in the empire (directed overseas). They didn’t have an
interest in the success of local firms. “The city of London” is a separate financial
sector, a significant part of the political economy of England, with its roots in these
early industrializers. This changes as industrial capitalism grows.
Late Industrializers: enter the process of industrialization late→ but two of these
entrants are also relatively new states. When they begin to industrialize, they are
industrializing around a different product→ Iron and Steel, which have massive
consequences. The textile market has an early advantage, but late industrializers
are not necessarily at a disadvantage because they may learn to do things differently
or more efficiently. There are no backward linkages to agriculture, so the
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