Remaking Capitalism

We challenge the underlying assumptions of the (failed) post 1979 experiment and propose reframed alternatives using a distinctive combination of follow the money research with political and cultural analysis.

Convenor: Professor Karel Williams

About the theme

Remaking capitalism is both the intellectual title for our Theme 1 work programme and the political aim of a core team which has shifted into an increasingly active kind of research.

Our outputs distinctively combine follow-the-money research with cultural and political analysis that draws on science, technology and society (STS) problems and political science to establish the links between knowledge framing and the power of elites.

Our practice is to work in partnership with non-academic organisations, like Enfield Council or the Federation of Small Business (Wales), through which we can learn from and promote new kinds of social experiment and begin to mobilise for socially responsible policy alternatives.

This brief introduction to our work programme introduces our work programme by:

  • presenting the foundational economy as our new organising concept;
  • describing our current portfolio of research projects and activities;
  • explaining how our current projects relate to our earlier body of work on financialization.

See also

The Foundation Economy

We have piled up enough academic critiques of capitalism to reach to the moon and they may make us feel better but they do not change the world. We need to combine criticism with a positive vision and a language which is politically intelligible and intellectually radical. Hence our promotion of the foundational economy as an organising concept.

British political elites have rediscovered industrial and regional policies about promoting key sectors and funding infrastructural improvement; and Westminster politicians increasingly accept the case for some form of decentralisation. But the UK continues to deindustrialise as outer regions fall further behind the city state of London; and devolution to the Celtic nations and English city regions runs ahead of imaginative thinking about devolved policy or any questioning of the objective of competitiveness.

In a Manifesto for the Foundational Economy and subsequent work, Centre for Research on Socio-Cultural Change (CRESC) researchers have proposed an alternative approach which focuses on how the sheltered sectors of the economy can be reorganised so as to generate welfare gains and diffuse prosperity.

This work develops the idea that government is experiment and argues that since 1979 we are victims of a dogmatic, centralised experiment in promoting competition and markets; with success measured in terms of job creation and GDP growth. 

This approach grows out of, and informs our work, with non-academic partners, like Enfield Council and Federation of Small Business (Wales) in loser areas where local politicians, interest groups and NGOs are increasingly convinced that orthodox policies can address but will never resolve their worsening problems.

Our alternative approach can be summed up in the following three key propositions.

The mundane 'foundational economy' is vital but neglected

The UK has lost much of its manufacturing but retains its 'Foundational Economy'. This is the sheltered sector of the economy that supplies mundane but essential goods and services such as: infrastructures; utilities; food processing, retailing and distribution; and health, education and welfare. The foundational economy is unglamorous but important because is used by everyone regardless of income or social status, and practically is a major determinant of material welfare . The foundational economy employs around 10 million people or 35% of the working population; whereas current industrial policy focuses on manufacturing which employs just 8 per cent.

The foundational economy aim is pervasively mismanaged because of destructive short-term

Profitability is important, but so too is the broader social and economic context. Current UK economic orthodoxy does not sufficiently attend to the latter. Private companies and public organisations focuses instead on a 'point value' logic, seeking the “best value” of most profit or least cost in each individual transaction. This kind of point value is destructive because it undermines the mutuality which is necessary to sustain productive capacity along supply chains, and dangerously narrows ideas of innovation.

Alternative policies can work by developing social franchises which aim to re-territorialise and build grounded regions

Most foundational activities involve branches and networks with some degree of natural monopoly reinforced by implicit or explicit state guarantees. CRESC suggests that the state should use this leverage to treat such activities as ‘social franchises’ and thereby increase the local benefits for the communities whose purchasing power sustains foundational activities Under social franchises, large public and private foundational organisations would be obliged to offer social returns such as: supporting local communities and firms; living wages; sustainable supply chains; import substitution; and/or energy and resource sustainability.

Recommended reading

A brief overview

Four key readings

  • Justin Bentham et al. (2013), 'Manifesto for the Foundational Economy', CRESC Working Paper 131
  • Andrew Bowman et al. (2012), 'The Finance and Point Value Complex', CRESC Working Paper 118 
  • John Law and Karel Williams (2014), 'A State of Unlearning? Government as Experiment', CRESC Working Paper 134
  • Andrew Bowman et al. (2014), The End of the Experiment, Chap 5 pp 115-46, Manchester: Manchester University Press

Supplementary reading

  • On point value reasoning see Bringing Home the Bacon on the pig industry, and How Not to Build Trains on the Thameslink procurement process
  • On the realities of franchising. The train operating companies profit from risk-free, state-structured, state-subsidised business environments. See The Great Train Robbery and The Conceit of Enterprise
  • On the failure of existing industrial policy with its focus on export-led industries and neglect of the mundane foundational economy see Against New Industrial Strategy: Framing, Motifs and Absences
  • On point value reasoning and financial instability see Deep Stall? The Euro zone crisis, banking reform and politics
  • Justin Bentham et al. (2013), 'Against New Industrial Strategy', CRESC Working Paper 126
  • Andrew Bowman et al. (2012), 'Bringing Home the Bacon' CRESC public interest report

Current projects

In our current phase of work we challenge the economic assumptions of the whole post-1979 period, reframe our problems and propose constructive alternatives.

Our flagship is the new Manchester Capitalism series of short books published by Manchester University Press which is backed up by various funded projects led by different team members and by research partnerships, including our long-standing partnership with Enfield Council.

We aim to publish two short books each year in the Manchester Capitalism book series with some books authored by the core team and others produced by outside researchers like the team at The Corner House.

The End of the Experiment

The first volume, The End of the Experiment, appeared in June 2014 and argued that an abstract, generalised preference for competition and markets in all sectors of the UK economy fails to engage activity specifics sector specifics and results in private profit and social waste.

The End of the Experiment (2014) represents the post-1979 period as a failed experiment and illustrates this with cases studies of mundane activities like retail banking, dairy and telecoms.

Like our early publications on financialization, this work runs ahead of current understandings and is intended as the first instalment of a longer-term programme with two key elements: 

  1. A new and accessible language for thinking about the heterogeneity of the economy. Hence the concern with the “foundational economy” and the “grounded city” which draws on ideas that the economy consists of different zones, that there is a large zone of mundane activity which is or should be outside the sphere of competition. 
  2. Illustration through the critique of outsourcing. The government increasingly offers private capital lucrative sheltered monopolies in the foundational economy (in everything from adult care to waste management) which are not in the public interest because they inhibit innovation and siphon taxpayer funds upwards. The second book in the Manchester Capitalism series will be about outsourcing. 

Sustaining our work

The question now is whether we can hold this focus and develop these ideas in the next few years With the end of core funding for CRESC, one major task is not only to win research project funding but also to build the academic networks and non-academic partnerships that can sustain a continuous movement.

One major development is the first meetings of an international network on the foundational economy, where mainland European academics are taking the leading role and a team of Italian colleagues is writing a book on the foundational economy in Italy.

We are continuing to bid for funding for academic research projects which sharpen our understanding of economic connections.

The focus of our current funded projects in 2014-15 is on the limits of industrial policy intervention at a point in a world of chain interconnections. Because we now have several streams of output, individual team members have volunteered to lead on different projects.

Julie Froud leads on a funded project on textile re-shoring and Adam Leaver is co-investigator on a research council project about food supply chains. Both will produce academic outputs.

But, following on the success of earlier public interest reports, our question now is whether we can with partners use such public interest reports to change agendas in ways which open the way to policy experiments which are scalable.


We are in continuous dialogue with partners like Enfield Council and the Federation of Small Businesses (Wales) about shared projects where our concerns overlap and change can be levered.

Scalable change requires regional government champions prepared to innovate in areas which are blocked in Whitehall and Westminster and the prospects of change are best where existing policies have manifestly failed.


Hence our focus on two themes, which will in due course generate major public interest reports, are:

  1. In partnership with The Federation of Small Businesses (Wales), we will be working on alternative industrial policies for disadvantaged regions like Wales which slides further behind on all the standard measures.
  2. We will also be working in partnership with Enfield Council’s Social Care department and a Welsh Cardiff project at the Wales Institute of Social and Economic Research (WISERD) on adult social care. This is a major challenge for an ageing society that is currently being managed unconstructively by outsourcing to financialized firms paying low wages and delivering low-quality care.

Connection with earlier work on financialisation and the financial crisis

Our readers are sometimes puzzled by the way in which our core team moves on from one object to another. The first principle of academic life is specialisation by method or object; but our team’s outputs break this rule.

Early output

The CRESC team’s classic early output was the Financialisation and Strategy book of 2006 which could so easily have led to an academic career elucidating six different kinds of financialisation. Instead, their key later outputs from 2009-13 took the form of a new kind of public interest report on diverse sectors including banking, meat supply and railways.

The shift reflected the change in conjuncture and the unforeseen and unwanted transition from the “great moderation” into ongoing finance led crisis since 2008. Instead of taking the diffusion of capitalist prosperity for granted, we now have to come to terms with capitalist instabilities and inequalities; immediately, the crisis has wrecked public finances in ways which affect all our jobs and public services.

These changes also reframe our policy choices and our concept of policy because technocratic management choices and claims to expertise are challenged by events and the question now is whether and how it is politically possible to control a finance sector which privatized gains and socialised losses.

Key reports

The Alternative Banking Report (CRESC, September, 2009) presented empirics which challenged arguments about the socially valuable contribution of finance to tax revenues and job creation; and also raised questions about the unconstructive and inflationary bias of finance sector lending towards property and financial assets.

It was followed by the After the Great Complacency (2011) which was distinctive because it presented the crisis as an elite debacle and combined analysis of market bricolage with political argument.

The conclusion of the 2011 book was that finance was effectively unreformable. The immediate discouragement was that a small elite controlled financial policy making which was a matter of timid measures for banking reform measures and bold non-standard policies like QE which could not effectively be challenged by outsiders. The underlying problem was that, as a recent BIS report nicely illustrates, financial policy elites can question the success of non-standard policies but all share an entirely orthodox view of the economy where the objectives of GDP growth and more jobs are to be achieved by structural reform.

Hence the shift onto the foundational economy which continues the earlier work because point value is about the financialised mismanagement of the foundational economy. At the same time, Ismail Erturk maintains a continuing interest in banking and the question of unaccountable elite power concerns us in many ways.