| Description |
This dissertation explores the economics of regulation prior to and after 1980 in the United States. During the golden age of capitalism, regulation consisted of a set of rules of conduct that imposed mutually binding, socially beneficial restrictions on economic competition. It was widely believed this regulation would sanction those inclined to act opportunistically, making it possible for individual capitalists to act on their enlightened (rather than short-term opportunistic) self-interest. Confidence in the effectiveness of regulation was a commitment device, which allowed individual capitalists to act in concert with their collective class interests. However, the process of deregulation that began around 1980 gradually gave rise to an environment where free riding on others' cooperation became the dominant strategy. The dissertation revisits the theory of the State to highlight the role played by regulatory institutions with respect to the agency of the capitalist class. An analytical framework models the intensity of regulation as a commitment device that increases the likelihood of successful collective action. Theoretical predictions indicate that because deregulation is individually profitable in the short run, it makes collective action more difficult overall as capitalists act opportunistically. The empirical dimension of this research explores the State's relative autonomy, which is necessary if regulation is to be a credible commitment device. Empirical findings indicate that the relationship between the State and the rate of profit at the industry level changed significantly after 1980 compared to the period before. The empirical results, consistent with predictions of the analytic model and descriptive analysis, suggest that the relative autonomy of the State before 1980 and lack thereof after was an important component in capitalists' ability to act collectively. |
