Regulation theory

The regulation school (French: l'école de la régulation) is a group of writers in political economy and economics whose origins can be traced to France in the early 1970s, where economic instability and stagflation were rampant in the French economy. The term régulation was coined by Frenchman Destanne de Bernis, who aimed to use the approach as a systems theory to bring Marxian economic analysis up to date. These writers are influenced by structural Marxism, the Annales School, institutionalism, Karl Polanyi's substantivist approach, and theory of Charles Bettelheim, among others, and sought to present the emergence of new economic (and hence social) forms in terms of tensions within existing arrangements. Since they are interested in how historically specific systems of capital accumulation are "regularized" or stabilized, their approach is called the "regulation approach" or "regulation theory". Although this approach originated in Michel Aglietta's monograph A Theory of Capitalist Regulation: The US Experience (Verso, 1976) and was popularized by other Parisians such as Robert Boyer, its membership goes well beyond the so-called Parisian School, extending to the Grenoble School, the German School, the Amsterdam School, British radical geographers, the US Social Structure of Accumulation School, and the neo-Gramscian school, among others.

Robert Boyer describes the broad theory as "The study of the transformation of social relations, which creates new forms- both economic and non-economic- organized in structures and reproducing a determinate structure, the mode of reproduction". This theory or approach looks at capitalist economies as a function of social and institutional systems and not just as government's role in the regulation of the economy, although the latter is a major part of the approach.

Regulation theory discusses historical change of the political economy through two central concepts, "regime of accumulation or accumulation regime" (AR) and "mode of regulation" (MR). The concept of regime of accumulation allows theorists to analyze the way production, circulation, consumption, and distribution organize and expand capital in a way that stabilizes the economy over time. Alain Lipietz, in Towards a New Economic Order, describes the regime of accumulation of Fordism as composed of mass-producing, a proportionate share-out of value added, and a consequent stability in firm’s profitability, with the plant used at full capacity and full employment (p. 6).

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