Regimes of differential accumulation: mergers, stagflation and the logic of globalization

Abstract

A BS T R A C TThe paper offers a new approach for analysing capitalist development and crisis, tying together mergers and acquisitions, stag ation and globalization as integral facets of accumulation. The framework builds on the concept of differential accumulation, emphasizing the power drive by dominant capital groups to beat the average and exceed the normal rate of return. Four regimes of differential accumulation are articulated: internal breadth by amalgamation, external breadth through green-eld investment, internal depth via cost-cutting, and external depth through stag ation. The complex relationships between these different regimes, as well as their broader societal implications, are analysed in light of the US experience over the past century. Several broad conclusions emerge. (1) Of the four regimes, the most important are amalgamation and stag ation, which tend to oscillate inversely to each other. (2) Over the longer haul, amalgamation grows exponentially relative to green-eld investment, contributing to the stagnation tendency of modern capitalism. (3) The wave-like pattern of mergers and acquisitions re ects the progressive break-up of socioeconomic 'envelopes', as dominant capital moves through successive amalgamation at the industry, sectoral, national, and, nally, global level. In this sense, the current global merger wave is an integral facet of differential accumulation. (4) Periodic lulls in amalgamation tend to be compensated for by stag ation, which appears as a crisis at the societal level, but which contributes signi cantly to differential accumulation at the disaggregate level. An end to the present worldwide merger boom could therefore trigger global stag ation. (5) Stag ation crises have been previously 'resolved' when dominant capital broke its existing envelope, pushing to amalgamate within a broader universe of takeover targets. Given that there is nothing more to conquer beyond the global envelope, future stag ation crises may prove much more dif cult to tame. K E Y WO R D S

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