# The rise and fall of neoliberalism: Evidences from an ecological and regulationist analysis of France
(1960–2020)

Alban Pellegris, Victor Court

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Alban Pellegris, Victor Court. The rise and fall of neoliberalism: Evidences from an ecological and regulationist analysis of France (1960-2020). Ecological Economics, 2025, 230, pp.108488. 10.1016/j.ecolecon.2024.108488. hal-04941106

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# The rise and fall of neoliberalism: Evidences from an ecological and regulationist analysis of France (1960–2020)

Alban Pellegris<sup>a,∗</sup>, Victor Court<sup>b,c,d</sup>

## ARTICLE INFO

JEL classification:

B52

E01

P18

Q43

Q57

Keywords:

Regulation theory

Metabolic constraints

Fordism

Neoliberalism

Energy expenditure

Profit rate

## ABSTRACT

This article explores the critical role of energy in shaping capitalist modes of development, and their entry into crisis, in France between 1960 and 2020. This analysis challenges traditional views that regard energy primarily as an exogenous shock and instead posits energy as a fundamental metabolic constraint in capitalist accumulation regimes. To demonstrate this, we integrate energy flows into the analysis of capitalists' regimes by crossing two bodies of knowledge: ecological economics and regulation theory. We enrich regulation theory with three key ecological macroeconomics indicators: thermodynamic efficiency, exosomatic metabolic rate and the weight of energy expenditures. Using descriptive statistics, we show that the weight of energy expenditures is the most significant variable: it must be contained if the rate of profit is to be maintained and if capital accumulation is to continue. Neoliberalism responded to the metabolic exhaustion of Fordism but eventually encountered its own limits in managing energy constraints. Neoliberal recipes for reconfiguring the metabolism have generated major imbalances likely to call into question the reproduction of this regime (financial crises, trade imbalances). We conclude that neoliberalism's structural crisis is rooted in the exhaustion of past energy management strategies, opening the door to the emergence of post-liberal capitalism.

# 1. Introduction: The role of energy in the 2007 crisis, a simple exogenous shock?

## 1.1. Mainstream view of 2007 crisis

For some economists, the Great Recession of 2008 was a sign that neoliberalism was entering a structural crisis. Far from being the effect of a passing conjuncture, the financial deregulation that led to the 2007 subprime crisis is in fact a central element of the neoliberal mode of development. Within the framework of regulation theory (RT), the excessive financialization that led to this disaster is therefore analyzed as an internal contradiction of the regime, and the central banks' tute-lage of the financial system from 2008 onwards is a symptom of the neoliberal regime's failure to reproduce itself (Boyer, 2009).

But like the prevailing beliefs about the origins of economic growth,

the commonly accepted explanations for the onset of the Great Recession of 2008 have a fundamental flaw: they generally have no connection with what really drives the global economic machine, namely energy, and oil in particular (see Appendix A for a summary of the origins of the financial and economic crisis of 2007–08). This is as true for neoclassical economists as it is for the various heterodox schools of thought (neoKeynesian, post-Keynesian, Marxist, regulationist), which tend to overlook the importance of material and energy flows in the economic process, and thus miss the inherent ecological dimensions of crises (Kallis et al., 2009).<fnref n="1" />

## 1.2. Alternative views

Nevertheless, a few isolated voices have attempted to establish the link between energy constraint and the outcome of the 2008 Great

<footnote><sup>a</sup> Laboratoire interdisciplinaire en Recherche et Innovations Sociétales (LiRIS), Université Rennes 2, Place du Recteur Henri Le Moal, CS 24307, 35043 Rennes Cedex, France</footnote>

<footnote><sup>b</sup> IFP School, IFP Energies Nouvelles, 1 & 4 avenue de Bois Préau, 92852, Rueil-Malmaison cedex, France</footnote>

<footnote><sup>c</sup> Chaire Energie & Prospérité, Institut Louis Bachelier, 28 place de la Bourse, 75002 Paris, France</footnote>

<footnote><sup>d</sup> Laboratoire Interdisciplinaire des Energies de Demain, Université Paris Cité, 10, rue Alice Domon & Léonie Duquet, 75013 Paris, France</footnote>

<footnote>* Corresponding author.</footnote>

<footnote>E-mail address: alban.pellegris@univ-rennes2.fr (A. Pellegris).</footnote>

<footnote n="1">¹ However, insofar as economic and financial crises are also a matter of money flows, the dynamics specific to these spheres must not be overlooked. This explains why a significant part of ecological macroeconomics has turned to the post-Keynesian framework (Hardt and O'Neill, 2017).</footnote>
Recession. For example, Tverberg (2012) argues that the global peak in
conventional oil production, reached around 2005, led to stagnation in
oil production, limiting global economic growth. The subsequent in-
creases in energy and raw material costs weighed down economies and
exacerbated debt problems. According to Tverberg (2012), these factors
contributed significantly to the 2008 financial crisis, demonstrating the
crucial role of oil supply in global economic stability. Hamilton (2009)
does not hesitate to describe the 2007–2008 period as an oil shock. He
identifies a combination of factors, including stagnant world oil pro-
duction in the face of growing demand, particularly in China, to explain
the gradual rise in oil prices during the 2000s and their surge in 2007.
The consequences resembled those observed during previous oil shocks
(notably those of the 1970s), with significant downward effects on
consumer spending and domestic car purchases. Hamilton argues that
this episode should therefore be added to the list of US recessions
significantly influenced by oil prices.<fnref n="2" /> Wu et al. (2019) clarify the causal
chain between oil prices and the onset of the 2007 subprime crisis. Using
a model calibrated on Californian data, these authors show that 2007’s
unforeseen rise in gasoline prices increased commuting costs to the point
of decreasing the value of homes far from city centers. Home foreclosure
rates then skyrocketed, as homeowners struggled to pay their mortgages
due to high gasoline expenses.

As we have seen, when energy is considered to have play a part in
triggering the 2007 crisis, it is perceived as an exogenous and temporary
shock, a position echoed even by the École de la Régulation (Boyer, 2009).
To our knowledge, only Auzanneau (2023) adopts a more systemic
approach and gives energy the status of an endogenous long-term
constraint to explain the onset of the Great Recession. For him, the
rise in Federal Reserve policy rates between 2004 and 2006 was a direct
response to the deterioration in the US trade balance and the loss in
value of the dollar that began in 2003. This trade deficit is attributed to
the steady decline in US conventional oil production since 1970, which
led to a gradual rise in the price per barrel between 2003 and 2007. It
was therefore fundamentally due to the reduced accessibility of oil that
two major economic factors – energy-related inflation and the rise in key
interest rates – emerged, ultimately damaging the solvency of the most
modest households, and leading to the bursting of the *subprime* bubble
and the Great Recession.

1.3. *Aim and paper structure*

From the perspective of regulation theory, this paper aims to address
the following question: Does energy only act exogenously, as a shock
amplifying contradictions that have arisen because of other factors, or
does energy act at a more fundamental level, as a metabolic constraint
that the various regimes of capitalism have to manage so that accumu-
lation can continue? This article defends the second option. To achieve
this, we propose in section 2 to enrich regulation theory (RT) with
certain indicators of ecological economics (thermodynamic efficiency,
exosomatic metabolic rate and the weight of energy expenditures rela-
tive to GDP). Applying this analytical framework to French capitalism
over the last sixty years, section 3 shows that the rise of neoliberalism in
the 1980s was already a response to the energy crisis of Fordism.
However, the neoliberal mode of development today is incapable of
overcoming its energy contradictions. Section 4 summarizes our main
contributions and opens the door to the possible emergence of a new
regime to succeed neoliberalism. Finally, section 5 concludes.

## 2. Methodology: Enriching regulation theory with an ecological approach

In this section, we first present regulation theory (2.1), followed by a
few key indicators of ecological economics (2.2). We will then show how

the application of these quantitative tools within a regulationist
framework allows us to better account for the role of energy in the
functioning of a given regime of capitalism (2.3). Finally, we will justify
the application of this analytical framework to the case of france, and
restate our research questions (2.4).

2.1. *Regulation theory: capitalism’s regimes and their crises*

RT is a macroeconomic theory that emerged in the 1970s in an
attempt to explain the stagflationary crisis of the time (Aglietta, 1997).
To achieve this, regulationists propose a framework at the crossroads of
three schools of thought: Keynesianism, Marxism and the École des
Annales (Boyer, 2011). For regulationists, while Marx identified in its
purity the ideal type of capitalism, in practice, capitalism is subject to
different regimes in time and space (Amable, 2005). These different
regimes of capital accumulation can be distinguished and identified on the
basis of certain regularities: the pace of investment, productivity gains,
the share of wage consumption relative to foreign demand, etc. These
stylished facts exist as the product of institutions that organize accumu-
lation, a set of diverse rules that form the mode of regulation. These rules
cover a wide range of areas (5 according to the initial RT), from the
management of money, the type of competition between firms, the rules
organizing the workforce (wages, working hours), to the degree of trade
openness. Schematically, a mode of regulation is characterized as
competitive when coordination through prices is central, and as admin-
istered when coordination through authority (State, large corporations)
is strong. Hereafter, we’ll refer to the capitalist mode of development as the
combination of a capital accumulation regime and the mode of regula-
tion that supports it. (See Fig. 1)

Take, for example, the post-war capitalist mode of development
known as Fordism. It can be described as the combination of an intensive
accumulation regime, where strong productivity gains are accompanied
by aggregate demand strongly driven by wage consumption (mass
consumption). These regularities are made possible not only by a
balanced distribution of value added (the Fordist wage compromise),
but also by regulated competition on the domestic market (strong in-
dustrial policy) and abroad (relative protectionism). Stop-and-go pol-
icies, along with a strong framework for the financial system (financial
repression), completed the regulatory system of this period. Regulation
theory thus enables us to identify a succession of development modes,
the typology of which is specific to each nation (for France, we can agree
on the sequence presented in Table B.1 in Appendix B).

On this basis, regulation theory proposes a typology of crises. Small,
so-called “cyclical” crises reveal partial and temporary imbalances in
accumulation regimes which can be overcome by relying on the existing
regulatory system. For example, a negative demand shock can be
absorbed by fiscal or monetary policy. Major or “structural” crises, on
the other hand, signal a mode of accumulation that is running out of
steam. This was the case with the crisis of the 1930s, analyzed as a
contradiction between mass production methods (Taylorism) and a lack
of mass consumption (due to the absence of wage rules enabling wage
demand to emerge and absorb this production). Faced with such a crisis,
only a new “accumulation regime/regulation mode” can overcome it.
Regulation theory thus proposes an analysis of social change that is
endogenous, due to the emergence of contradictions.

This concern to endogenize crises may have led regulation theory to
neglect the material dimensions of the production process, so dear to
ecological economists. Founding father Robert Boyer explains, for
example, that “regulation theory was in fact built against the standard
interpretation of the crisis [of 1973-74] as the result of an exogenous oil
shock” (Boyer et al., 2023, p. 6). For Lipietz (2002 [1995], p. 351),
another historical figure in regulation theory, this relegation of material
dimensions can be explained by the fact that it was “difficult to claim

<footnote n="2">² A similar analysis, albeit more nuanced, can be found in Kilian (2009).</footnote>
Capitalist mode of development

<figure><img src="image_4.png" /><figcaption>Fig. 1. The regulationist theoretical framework. Source: authors.</figcaption></figure>

that Fordism entered into crisis through the society-environment rela-
tionship" (Lipietz, 2002 [1995], p. 351).<fnref n="3" /> Another, more epistemolog-
ical reason can be put forward: emphasizing the flows of energy and
matter in economic dynamics could then be perceived as material and
asocial determinism (Cahen-Fourot, 2023). It should be noted that the
physical-material dimensions appear in Table B.1 only in the form of
meteorological constraints for the first two development modes. They
are not taken into consideration in the dynamics of subsequent regimes.

Since the early 2000s, there has been a movement (green area in
Fig. 1) to take greater account of sustainability and natural resource
issues within RT. These dimensions are integrated from the concept of
social relationship to the environment, defined as the set of rules gov-
erning “access to the physical environment and the modalities of its use
for production and reproduction activities” (Becker and Raza, 2000,
p.11). Following Polanyi (2009 [1944]), capitalism requires three
fictitious commodities<fnref n="4" /> to develop: land (i.e., natural ressources), labor
and money. The fact that RT was concerned only with the institutions
governing the use of labor power (forms of the wage relation) and
money (forms of money) was a major gap that this concept fills.

To fully integrate ecological dimensions into the analysis, however,
we need to characterize the flows of energy and matter a regime of
accumulation mobilizes. Indeed, insofar as all production is material,

macroeconomic dynamics cannot be assessed solely based on monetary
aggregates. Later, RT began to carry out this work, whether for water
(Buchs, 2012), energy (Cahen-Fourot and Durand, 2016) or matter
(Cahen-Fourot and Magalhães, 2023).

It is important to note that the rules forming the social relationship to
the environment are not the only institutions organizing the dynamics of
physical flows.<fnref n="5" /> To take just one example, regulatory policies encour-
aging energy savings (forms of social relationship with the environment)
have an impact on physical flows, as does the intensifying globalization
(form of insertion into the world economy): thus, industrial offshoring
explains in part countries’ energy trends (lower energy intensity).

In short, the 6 institutional forms belong to the *regulation mode*. All of them are therefore responsible for the energy and material flow dynamics belonging to the accumulation regime (Fig. 1). This is where the link with ecological economics may be relevant. This is what is proposed by *Cahen-Fourot and Magalhães* (2023) when they call for a crossover between regulation theory and material flow analysis (MFA). In the following sections, we continue in this vein, but focus on other metrics relating to energy flows.

## 2.2. *Ecological macroeconomy metrics: Exosomatic metabolic rate, thermodynamic efficiency, and energy expenditures*

For ecological economists, economic production is highly dependent
on the capacity of human societies to mobilize exosomatic energy (from
outside the human body). This starting point leads us to study three
indicators. The first one is the exosomatic metabolic rate (EMR), the
pace of which will be compared with that of apparent labor productivity
(2.2.1). The EMR may be affected by progress in energy efficiency or by
the type of integration into world trade (2.2.2). More recent studies have
focused on a composite indicator to relate the exosomatic energy use to

<footnote n="3">³ In fact, the slowdown in productivity gains began in the 1960s. It therefore predates the oil shocks (Rousseau and Zuindeau, 2007).</footnote>

<footnote n="4">⁴ For Polanyi, “labor, land and money *are not* commodities [insofar as]; as far as they are concerned, the postulate that everything bought and sold must have been produced for sale is flatly false. [...] Labor is but the other name for the economic activity that accompanies life itself – which, for its part, is not produced for sale but for entirely different reasons – nor can this activity be detached from the rest of life, stored away or mobilized; land is simply the other name for nature, which is not produced by man; finally, real money is simply a sign of purchasing power which, as a rule, is not in the least produced, but is a creation of the mechanism of banking or state finance. None of these three elements – labor, land, money – is produced for sale; when they are described as commodities, this is entirely fictitious” (Polanyi, 2009 [1944], p. 107).</footnote>

<footnote n="5">⁵ This is why some RT authors have favored the concept of “environmental institutional arrangements” (Elie et al., 2012). The aim was to emphasize that these were institutions, not material flows.</footnote>
economic performance: the weight of energy expenditures relative to GDP (2.2.3).

### 2.2.1. EMR and its link to apparent labour productivity

The exosomatic metabolic rate (EMR) relates the amount of energy consumed per working hour (h) per year. Since energy can be measured at the national level at the primary (P), final (F), and useful (U) stage, one can calculate the exosomatic metabolic rate (EMRᵢ) with i ∈ [P, F, U] as follows:

$$EMR_P = \frac{P}{h}, EMR_F = \frac{F}{h}, EMR_U = \frac{U}{h} \qquad (1)$$

This indicator is fundamental: the increase in energy per hour worked explains most of the growth in what economists call “labour productivity”, i.e. the ratio between GDP and hours worked (GDP/h) (Cleveland et al., 1984; Giampietro et al., 2014). From a socio-metabolic perspective, this labor productivity results from replacing human labor by machines powered by energy (mostly of fossil origin still today). It is these productivity gains, enabled by energy, that make it possible to reduce working hours (by decreasing lifelong working hours per person, or by increasing the share of inactive people) and develop new sectors in industrial economies (in the most advanced countries, mechanization and fossil fuels have reduced the population working in agriculture to now just 1.5 % of the total working population). For example, Semieniuk (2016) compared the quantity of fossil energy (at the primary stage) per hour of work and labor productivity for 95 % of world production between 1950 and 2012. The average elasticity observed is close to unity.

### 2.2.2. EMR links to energy efficiency and international outsourcing

Two factors can affect the dynamics of EMR. Firstly, EMR can decrease thanks to progress in energy efficiency: all other things being equal, a more efficient machine leads to lower energy use per hour. Of course, because of various rebound effects, all energy efficiency gains at the device level do not translate into equivalent energy efficiency benefits at the economy-wide level (Brockway et al., 2021). Nevertheless, by measuring the quantities of energy consumed at the national level in primary (P), final (F), and useful (U) forms, we can assess the energy efficiency of the economy by calculating the ratios of these aggregates. To increase precision and account for the quality of energy carriers, these aggregates are expressed in terms of exergy rather than energy (Fig. 2)<fnref n="6" />. This allows us to calculate the primary-to-final (F/P), final-to-useful (U/F), and primary-to-useful (U/P) ratios for a given machine, sector, or the economy as a whole.

EMR can also decline because of energy-intensive processes being relocated abroad. In this case, it may be relevant to consider the quantities of energy consumed outside national borders to produce imported goods (similarly, the energy consumed domestically to produce exported goods must be considered). The advantage of this approach is that it is based on consumption rather than production alone, and it can tell a different story. For instance, Hardt et al. (2018) have shown that, between 1997 and 2013, the majority of energy savings in the UK were due to industrial offshoring rather than domestic energy efficiency measures. Where data is lacking, this analysis can be carried out in terms of carbon dioxide emissions rather than energy. This type of footprint analysis shows the extent to which a country benefits from an ecologically

unequal exchange (Dorninger et al., 2021) allowing it to artificially reduce its EMR.

### 2.2.3. Energy expenditures in relation to GDP as a composite indicator

Another ecological indicator useful to our analysis is energy expenditures, i.e. the cost of supplying energy (domestically produced and imported) in relation to gross domestic production (Bashmakov, 2007; Fizaine and Court, 2016; Murphy and Hall, 2011).

In theory, energy expenditures Exᵢ with i ∈ [P, F, U] can be calculated at the primary, final, or useful level. In practice, they are most often estimated at the final level. Furthermore, by noting p the general price index, pᵢ the energy price of type i and distinguishing between nominal GDP (GDPₙ) and real GDP (GDPₚ), energy expenditures as a percentage of nominal GDP can be analyzed as the product of three factors:

* the exosomatic metabolic rate (i/h), with i ∈ [P, F, U],

* the real price of energy (pᵢ/p),

* the inverse of apparent labor productivity (h/GDPₚ).

$$\frac{Ex_i}{GDP_n} = \frac{i_{\pi} p_i_{\pi}}{h p GDP_r} \quad \text{avec } i \in [P, F, U]. \qquad (2)$$

The weight of energy expenditures thus appears to be a valuable composite indicator, as it integrates into the analysis not only EMR and apparent labor productivity, but also the real price of energy.

All other things being equal, a rise in the real price of energy translates into an increase in energy expenditures as a proportion of GDP. This effect can, however, be mitigated by changes in the quantities of energy consumed per hour worked, or by productivity gains. When energy expenditures rises faster than GDP, incomes cannot keep pace, and discretionary consumption and investment are reduced (King and Hall, 2011) leading to a slowdown in growth. In the US, Fizaine and Court (2016) have shown that above 11 % of GDP, the weight of energy expenditures is significantly correlated with a recession.

We'll now look at how these different indicators (synthesized in Table 1) can be integrated into the regulationist framework to characterize accumulation regimes in more detail.

## 2.3. Expanded framework: Energizing regulation theory concepts

Following Huber (2013) we believe that “regulation theory does not necessarily require a new ecological dimension of research, but rather a reformulation of the key concepts of regulation in an ecological sense” (p. 173). RT must be able to acknowledge the fact that the supply of goods and services always rests on a material base (more or less intense). In practice, taking Fig. 1 as a starting point, it's not enough to superimpose an analysis of material flows onto conventional variables, but rather to “materialize” the analysis of supply and demand. We need to be able to think in terms of the articulation between physical and monetary aggregates. To put it another way, energy and material flows must feed into the regulationist concepts used to characterize the progression of supply and demand. If we refer to Fig. 1, our approach implies focusing more on how the contradictions of accumulation regimes lead the mode of regulation to evolve (and less the other way round).

On the supply side, a first possibility is to reformulate the intensive or non-intensive nature of accumulation regimes based on material categories. The EMR offers this possibility, given its unit elasticity with apparent labor productivity (Semieniuk, 2016). Nevertheless, this apparent productivity can increase independently of EMR, particularly when an advantageous specialization reduces the energy intensity of production. The energy footprint must therefore be considered (if possible, at the final level). On the other hand, by construction, EMR at the final level (F/h) can also be affected by progress in energy efficiency.

Another possibility for ecologization is offered by the rate of profit. To grasp this point, it's useful to go back to Karl Marx's binary definition of the rate of profit. For Marx, the rate of profit R is calculated by dividing monetary profit (or surplus value, noted as SV) by the value of

<footnote n="6">⁶ Energy in the form of heat is not equivalent to energy in the form of mechanical work: exergy is the maximum amount of mechanical work that can be extracted from a given quantity of energy. Exergy allows us to grasp that not all forms of energy are qualitatively equivalent, even in equal quantities: “1 kWh of mechanical work can be converted into 1 kWh of heat at 30 °C, but 1 kWh of heat at 30 °C can be converted at most into 0.066 kWh of mechanical work [...] Mechanical work is the most valuable form of energy because it is the one with the highest efficiency of conversion to other forms of energy” (Santos et al., 2018, p.112).</footnote>
<figure><img src="image_5.png" /><figcaption>**Fig. 2.** Representation of the energy conversion chain. Dashed blue line: conventional final energy analysis. Solid blue line: useful stage analysis. $\eta_1$ and $\eta_2$ represent respectively the energy efficiency of the first and second conversions, and $\epsilon_1$ and $\epsilon_2$ represent respectively the exergy efficiency of the first and second conversions. Source: Aramendia et al., 2021. (For interpretation of the references to colour in this figure legend, the reader is referred to the web version of this article.)</figcaption></figure>

<caption>**Table 1**</caption>

Main indicators extracted from the ecological economics literature. Source: authors.

<table><thead><tr><th>Acronym</th><th>Indicator</th><th>Unit</th></tr></thead><tbody><tr><td>P, F, U</td><td>Primary, final, or useful exergy</td><td>TJ</td></tr><tr><td>F/P, U/F, U/ P</td><td>Thermodynamic efficiency: primary to final, final to useful and primary to useful</td><td>%</td></tr><tr><td>P*, F*, U*</td><td>Primary, final, or useful energy footprint</td><td>TJ/TJ/</td></tr><tr><td>EMR<sub>i</sub></td><td>Exosomatic metabolic rate (with i ∈ [P, F, U])</td><td>h</td></tr><tr><td>Ex<sub>i</sub>/GDP</td><td>Energy expenditures to GDP (with i ∈ [P, F, U])</td><td>%</td></tr></tbody></table>

capital employed, of which we distinguish two categories: constant capital (i.e., machinery and raw materials, noted C) and variable capital (i.e., labor power, noted V):

$$R = \frac{SV}{C + V} \qquad (3)$$

By dividing the terms by V we can rewrite the equation with a new variable, $\frac{SV}{V}$ which designates the exploitation rate of laborers E:

$$E = \frac{SV}{V} = \frac{Profits}{Wages} \qquad (4)$$

Hence,

$$R = \frac{E}{\frac{C}{V} + 1} \qquad (5)$$

The rate of profit can be analyzed as the product of two variables: the rate of exploitation (E) of labor power and the organic composition of capital (OCC), $\frac{C}{V}$. The OCC is a value composition expressed in money unit. It is therefore distinct from the technical composition of capital (TCC), $\frac{K}{L}$, which relates the physical quantity of machinery used to the number of hours worked. To put it another way, OCC is the product of TCC and the relative price of capital and labor, $\frac{r}{w}$:

$$OCC = TCC^* \frac{r}{w} \qquad (6)$$

For Marx, the development of the productive forces involves substituting dead labor (machines) for living labor (workers), resulting in an increase in the technical composition of capital. However, this does not predetermine how the organic composition of capital (or the profit rate that depends on it) might evolve because the price ratio between capital and labor is also a determining factor. In fact, the increase in technical composition also affects the value of equipment (the labor time required to produce it is reduced), which has an impact on the OCC.<fnref n="7" /> The increase in technical composition therefore has two contradictory effects: a volume effect (the quantity of machines increases relative to the number of workers) and a price effect (the price of goods decreases due to productivity gains).

This technical composition of capital can be reformulated in terms of the exosomatic metabolic rate (EMR). Faced with the impasses of measuring a physical quantity of capital per hour worked other than in money (Robinson, 1971) the EMR is an interesting alternative. Insofar as the machinery used requires energy to be put into motion, the energy mobilized per hour worked is a good approximation of the quantity of capital per hour worked, EMR $\approx$ TCC. This reformulation of the technical composition of capital allows us to integrate energy quantities into the analysis of profit dynamics:

1. As the productive forces develop, capital per hour worked increases (the EMR increases), as does the amount of energy mobilized. All other things being equal, the OCC rises, driving **down the rate of profit**.

<footnote n="7">⁷ Marx explains that “the same evolution which causes the mass of constant capital to increase in relation to variable capital causes the value of its elements to fall as a result of the increase in the productivity of labor, and thus prevents the value of constant capital, which is nevertheless constantly increasing, from increasing in the same proportion as its material volume. In such and such a case, the mass of the elements of constant capital may even increase, while its value remains unchanged or even decreases. [T]he same causes which give rise to the tendency of the rate of profit to fall also moderate the realization of this tendency” (Marx, 1867, pp. 248–249).</footnote>
2. This mobilization of energy reduces the labor time needed to produce goods (productivity gains), thus lowering the value of capital goods. The ratio $L_w$ decreases, so **the OCC falls, and the rate of profit rises**.

3. These productivity gains also occur in the production of wage goods, reducing the value of labor power ($L_w$ increases, so **OCC rises and profit falls**), but employees can claim a share of these productivity gains in the form of higher wages ($L_w$ decreases, so **OCC falls and profit rises**).

The effects of increasing the amount of energy per hour worked on the rate of profit are therefore indeterminate. As step 2 and 3 above show, the way in which productivity gains are used is key. We can already see the importance of codifying the various institutional forms, and particularly the rules governing redistribution of productivity gains on profit dynamics.

The second variable that needs to be included in the analysis is the real price of energy. Indeed, an increase in this price also affects the level of OCC, since energy belongs to the constant capital price (r). Econometric studies of 16 European countries, over the period 1995–2019, have shown a significant negative relationship between the real price of energy and the rate of profit (Pellegris, 2022, pp. 271-307). In addition, descriptive statistics for France show a negative correlation between the weight of energy expenditures and the profit rate (Husson, 2009).

On the demand side, the weight of energy expenditures in GDP must be considered. As Cahen-Fourot (2023, p. 90) points out, “the availability of low-cost energy also enables mass consumption, which is necessary to absorb the products of these productivity gains and ensure the coherence of the accumulation regime”. The fact remains that neither the weight of energy expenditures nor the real price of energy is analyzed in the most applied regulationist works. Yet these data do exist, and it’s also possible to analyze this dimension in greater detail by looking at the weight of energy expenditures in household income.

Fig. 3 summarizes our proposals for greening, or rather “energizing”, regulationist concepts. These different categories enable us to highlight the metabolic constraints characterizing accumulation regimes. At the empirical level, it becomes possible to examine whether or not each capitalist mode of development has a singular way of managing this metabolic constraint.

## 2.4. An application to the case of France (1960–2020)

To demonstrate the operational nature of our theoretical framework, we chose to carry out a study of France between 1960 and 2020. There are two main reasons for this choice: it is a country that the authors know well (this ease the interpretation of the stylized facts for the different regimes of capitalism) and the various data are readily available. Moreover, France is a G7 country with a diversified economy and produces around half of the energy consumed on its territory, making it a good example of developed country with a heavy dependance on globalized value chains.

The period 1960–2020 is of particular interest. First, it allows us to analyze the transition from the Fordist regime to the neoliberal period in the mid-1970s. Furthermore, we cover the entire post-2008 crisis period, which is considered to be a structural crisis of neoliberalism. This allows us to compare the role of metabolic constraints in the structural crisis of the two regimes.

Specifically, we will be answering the following main research question: how has French capitalism managed its metabolic constraints between 1960 and 2020? This fundamental research question can be broken down into four research questions (RQ):

* **RQ1:** How has the weight of energy expenditures changed, and what were the respective contributions of the various factors (EMR, labour productivity, energy real price, energy efficiency, outsourcing) to this change?

* **RQ2:** What is the relationship between the weight of energy expenditures and the rate of profit?

* **RQ3:** Is neoliberalism a way of overcoming the energy constraints of Fordism?

* **RQ4:** Can neoliberalism continue to manage its metabolic constraint in the long term?

To answer these questions, an effort has been made to collate data and produce time series (EMR, thermodynamic efficiencies, energy expenditures, profit rates, labor productivity etc.). These time series are then used to provide a descriptive analysis of each regime, i.e., identifying regularities between energy and economic variables for each period: Fordism consolidation (1960–1974), Fordism crisis (1974–1982), Neoliberalism consolidation (1982–2000), Neoliberalism crisis (2000–2020). In order not to overburden our discussion, the sources and calculations of the various time series presented are specified in the legend of each figure. The data and resulting figures are available in a separate repository.

This article thus extends the seminal work of Cahen-Fourot and Durand (2016) in several directions. By integrating new categories (EMR, thermodynamic efficiency, weight of energy expenditures), the characterization of accumulation regimes is enriched, and the metabolic constraint is more explicitly exposed. It also extends the analysis to the 2010s, providing a genuine “comparative reading of the great crisis of the 1970s and the great contemporary crisis” that these authors were calling for.

## 3. Results: Metabolic constraints are at the heart of the structural crisis of Fordism and neoliberalism

### 3.1. The stylized energy facts of Fordism (1960–1974)

During the Fordist period, EMR and apparent labor productivity grew at the same pace, against a backdrop of falling energy prices. The weight of energy expenditures thus remained low and went hand in hand with a high rate of profit.

#### 3.1.1. An elasticity between EMR and apparent labor productivity close to unity

Between 1960 and 1974, whether for the economy as a whole or for the productive sectors alone<fnref n="8" />, EMR increased by a factor of 2.5, i.e., by an average of around 7 %/year (see Fig. 4). Thermodynamic efficiencies also increased between 1960 and 1969, after which they began to stagnate (Fig. 5). As a result, the EMR measured at the useful stage increased even more sharply: it multiplied by 3.5 over the period, i.e., an average annual rate of 9.6 %. Contrary to popular belief, energy efficiency is no stranger to the Fordist period, but these efficiency gains fueled a powerful rebound effect (Berner et al., 2022; Brockway et al., 2021) whereby thermodynamic efficiency (U/F) rose by 33 % [15 % to 20 %], while final energy consumption increased by a factor of 2.3. In addition to advances in energy efficiency, another powerful factor driving the incorporation of energy into the production process was the real price of energy. As Fig. 6 shows, the real price of energy fell by 17 % between 1960 and 1973, before starting to rise sharply in 1974 (the level reached was then that of 1960).

<footnote n="8">⁸ By productive sector, we have tried to remove household energy consumption as far as possible, to retain only the uses of productive entities (companies and public administrations). To achieve this, we have subtracted residential and road transport consumption from total final energy consumption. This aggregate remains imperfect insofar as road transport includes both household and business consumption. However, it remains an interesting proxy for interpreting any discrepancies with total final energy consumption.</footnote>
<figure><img src="image_6.png" /><figcaption>**Fig. 3.** Adding new ecological categories to the conventional Regulation Theory scheme used to analyze accumulation regimes. Source: authors.</figcaption></figure>

The increase in capital per hour worked (based on energy per hour worked) and its power (captured by the useful stage) led to significant gains in labor productivity. These grew by 6.2%/year between 1960 and 1974 (see Fig. 7). Here we find an elasticity between EMR (at the final stage) and apparent labor productivity close to unity (0.8), in line with the observations made by Semieniuk (2016).

### 3.1.2. A relatively high and stable profit rate

Over the period, the economy's profit rate remained relatively high, fluctuating between 8.8% in 1960 and 7.8% in 1973 (see Fig. 8). The decline was not linear, as the 1973 level was similar to that of 1963. The exploitation rate remained broadly stable over the period, in line with Fordist regulation: the ratio between total profits and total payroll was 31% in 1960 and 1973. It is therefore the relatively small increase in the organic composition of capital that is behind the slight drop in the rate of profit (-1 point over the period). Whereas constant capital represented 3.5 times the wage bill in 1960, this ratio was 4 in 1973 (an increase of 15%). This increase is relatively modest compared to the rise in technical composition (+140% over the period). This shows that productivity gains were diffused to the capital goods sector (decrease in C) and served to increase the purchasing power of the salaried class (increase in V). Thus, with a stable exploitation rate and an organic composition slightly on the incline, the profit rate remained at a high level, losing only one point (see Fig. 8).

### 3.1.3. Low weighting of energy expenditures

On the demand side, stability was also the order of the day. From 1960 to 1970, energy spending remained at a historically low level, in the range of 6 to 6.5% relative to GDP (Fig. 8). A turnaround began in 1969, with a gradual increase to 6.9% of GDP shortly before the first oil

crisis. The share of energy in household budgets followed a similar pattern. This share of the budget fell until 1964, when it reached a minimum (close to 7%) over the studied period. Thereafter, a gradual rise began. As early as 1971, it represented around 8.3% of income, and remained at this level until 1973 (see SDES, 2022, p. 22).

Insofar as the real price of energy was continually falling (-17%), while the EMR was increasing (+6.4%) and labor productivity rising at the same rate (+6.2%), the weight of energy expenditures remained relatively stable. The low price of energy allowed capital intensity to rise, which in turn enabled productivity gains. As the energy bill did not increase, income was available to be allocated to non-energy consumption, in this case, production surpluses made possible by productivity gains. In this way, the energy dimensions of the system contributed to the coherence of Fordist accumulation.

In short, Fordism is characterized by a sharp rise in final energy consumption per hour worked (Fig. 4) and thermodynamic efficiency (Fig. 5). Energy per hour worked increases, reflecting a rise in the capital intensity of production. These productivity gains are made possible by the fact that the real price of energy continues to fall over the period. As a result, energy expenditures by households and the national economy increases very modestly. Accumulation can therefore continue and outlets are assured, as evidenced by the relative stability of the profit rate at a high level. However, this regime appears relatively fragile and extremely sensitive to energy price increases.

## 3.2. The crisis of Fordism (1974–1982): What role for energy?

### 3.2.1. The metabolic constraints began to show in 1969 (before the first oil shock)

For regulationists, energy is not considered to have been the cause of
<figure><img src="image_7.png" /><figcaption>**Fig. 4.** Apparent labor productivity and technical composition of capital estimated by the exosomatic metabolic rate (EMR) at the final and useful stages in France (1960–2020), for the national economy (a) or just the productive sectorª (b). Source: authors, based on data from Brockway et al. (2024) and INSEE (2022).

ªThe productive sector is obtained by subtracting the residential and transport sectors from the national economy</figcaption></figure>

the Fordist crisis. The rise in energy prices (in 1974) is thought to have occurred after the slowdown in apparent labor productivity (from the late 1960s onwards, see Fig. 7). What's more, by 1986, the real price of energy had returned to its 1960 level, so neoliberalism would not have benefited from an energy context so different from that of Fordism. However, by shifting the focus from prices alone to the weight of energy expenditures, the role of energy can be reassessed. From this point of view, 1969 appears to have been a turning point:

* thermodynamic efficiency stagnated, at 20 % (Fig. 5);

* apparent labor productivity was no longer increasing as fast as EMR at the final stage (Fig. 4);

* real energy prices failed to fully offset this trend (Fig. 6), and the weight of energy expenditures began to rise in the late 1960s (Fig. 8).

From 1969 onwards, the Fordist system seemed to run out of steam: the virtuous dynamic of previous years began to disappear, and the oil

crisis only accentuated this reversal. Indeed, it was the rise in the real price of energy from 1974 onwards that dealt the final blow to Fordism. The first sharp rise of 20 % occurred between 1973 and 1974 (the first oil shock). The price level reached that of 1960. This was followed by a further 30 % rise between 1978 and 1985 (second oil shock). Cumulatively, the real price of energy rose by 54 % between 1973 and 1985 (Fig. 6).

These developments went hand in hand with a change in the technical composition of capital. Here, we note a divergence between the national economy and productive sectors. For the productive sectors, EMR fell between 1974 and 1982, especially from 1978 onwards, with a 15 % drop at the final stage and 28 % at the useful stage (Fig. 4). The decline in EMR continued thereafter, reaching a low point in 1990. This marked the start of a relative deindustrialization, or decapitalization of production, which began timidly in 1974, then lasted from the second oil shock onwards. At the level of the global economy, the final EMR did not fall, it continued to grow, but at a very slow rate of 0.3 %/year, far
<figure><img src="image_8.png" /><figcaption>Fig. 5. Thermodynamic efficiency in France (1960–2020). Source: authors, based on data from Brockway et al. (2024).</figcaption></figure>

<figure><img src="image_9.png" /><figcaption>Fig. 6. Real energy price in France (in €2022, 1960–2022). Source: authors, based on data from OECD, 2024a</figcaption></figure>

below the rate previously seen under Fordism (6.8 %/year). At the useful stage, there was even a decline in EMR, averaging 0.2 %/year. Apparent labor productivity also slowed, but to a lesser extent. It fell by two points to 4 % between 1970 and 1980. The elasticity observed under Fordism disappeared, raising questions about the origin of productivity gains under this new regime (see 3.3).

### 3.2.2. Exploding energy expenditures and decreasing profit rates

By design, the consequence was a surge in energy expenditures. On a macroeconomic level, these expenditures rose from 8.2 % in 1973 to 11.6 % in 1974, and finally to 13.8 % in 1982 (Fig. 8), an increase of almost 5 points. For households, the increase is less significant, with energy expenditures rising from 8.3 % to 11 % (SDES, 2022, p. 22). We can assume that it was the indexation of wages to prices until 1983 that limited the damage. In any case, this compression of non-energy purchasing power affects growth dynamics via the consumption channel.

The rate of profit also deteriorated sharply, halving between 1974

and 1982. The contribution of the organic composition of capital was very modest (+12 %): payroll and fixed capital grew at roughly the same rate, despite virtually stagnating technical composition of capital and payroll increases due to the indexation of wages to rising prices. This suggests a significant increase in the cost of capital goods. Thus, the main variable explaining the dynamics of the rate of profit is the rate of exploitation, which collapsed by 10 points: whereas profits represented 30 % of the wage bill, in 1982 they represented only 20 %. Wages grew faster than corporate profits, due to wage indexation on rising prices until 1983. As evidenced by the rise in the real price of energy (Fig. 6), capital owners were unable to fully pass higher energy prices on to consumers through selling price hikes. This lower profitability deterred resident companies from investing, hence resulting in lower growth and productivity.

In short, Fordism was experiencing a structural crisis whose energy origin was more salient than a simple exogenous price shock. As early as 1969, the virtuous circle of Fordist metabolism broke down, as the
<figure><img src="image_10.png" /><figcaption>**Fig. 7.** Apparent labor productivity and real wages (in € of 2022) in France (1960–2020). Source: authors, based on data from INSEE (2022) for productivity and Feenstra et al. (2015) for wages.</figcaption></figure>

<figure><img src="image_11.png" /><figcaption>**Fig. 8.** Energy expenditures as a percentage of GDP (left axis) and profit rate (inverted right axis) in France (1960–2022). Source: energy expenditures calculated by the authors by adding the added value of hard coal and lignite production, hydrocarbon extraction, coking and refining, electricity, gas, steam and air conditioning production and distribution (INSEE, 2022) and the energy bill (SDES, 2022). For profit rates, data are taken from Basu et al. (2022).</figcaption></figure>

elasticity between EMR and productivity (close to unity) disappeared, creating a first increase in the weight of energy expenditures and a first drop in the rate of profit. The Fordist mode of regulation was unable to overcome these difficulties: wage indexation fed an inflationary spiral and squeezed profit. Accumulation could not continue as it was, and a new growth regime gradually took shape: neoliberalism, which, as we shall see, is also a neometabolism.

### 3.3. Neoliberalism as a solution to overcome the metabolic constraints of Fordism (1982–2000)

Neoliberalism overcame these contradictions. Reduced weight of energy expenditures and increased profit rates were set in motion in 1982 and 1983 respectively, four years before the oil counter-shock of 1986. To achieve this, French capitalists acted on two levels. They

succeeded in establishing a relative decoupling between apparent labor productivity and EMR through gains in energy efficiency, tertiarization, internationalization and financialization. At the same time, they altered the distribution of these productivity gains in their favor.

#### 3.3.1. *Sharing productivity gains in favor of capital*

Further accumulation presupposes restoring the rate of profit. The first way to achieve this is to increase the exploitation rate. The 1983 de-indexation of wages to prices was accompanied by a restoration of the exploitation rate from 20 % to 33 % (Fig. 9), a level slightly higher than in 1973. Thus, the first specificity of this regime was to break the link that had previously existed between wage progression and apparent labor productivity (Fig. 7).

But restoring profits is not simply a matter of changing the way value-added is shared. Major reconfigurations of production (and
<figure><img src="image_12.png" /><figcaption>**Fig. 9.** Exploitation rate of workers (profits/wages) in France (1960–2019). Source: authors, based on data from Basu et al. (2022) and INSEE (2022). Note: total profits are obtained by multiplying the profit share estimated by Basu et al. (2022) to the national GDP from INSEE (2022); and wages are then estimated by subtracting total profits from GDP.</figcaption></figure>

therefore of the metabolism) accompanied this movement. Productivity continued to rise throughout the 1980s, by an average of 3 % (Figs. 4 and 7). However, these productivity gains were no longer based on an increase in the technical composition of capital (final stage EMR only increased by 1 %, see Fig. 4). The elasticity of apparent labor productivity to EMR, which was close to unity under Fordism, is around 2.2 during the first phase of neoliberalism. Several tightly linked phenomena (energy efficiency, tertiarization, delocalization and financialization) enabled this relative decoupling of the energy base.

### 3.3.2. Thermodynamic efficiency: Present but insufficient

First, advances in thermodynamic efficiency made this decoupling possible: productivity could grow without increasing final energy consumption per hour worked thanks to the use of more efficient machines. However, this hypothesis does not stand up to scrutiny, at least for the period 1974–1985, when thermodynamic efficiency fell by 7 %. If we follow Serrenho et al. (2014), this drop indicates the outsourcing of high-temperature industries: the energy efficiency of these processes being higher, their offshoring leads to a drop in aggregate thermodynamic efficiency.<fnref n="9" /> From 1985 onwards, thermodynamic efficiency began to rise again (+8 % until 2000) although the contribution of energy efficiency to decoupling remained relatively modest: EMR at the useful stage grew by only 1.3 %/year between 1985 and 2000, it’s half less than the 2.2 %/year increase in apparent productivity over the same period.

### 3.3.3. Tertiarization and outsourcing enabled by a new international integration

Tertiarization contributes to the decoupling of productivity gains and EMR. Indeed, service activities have productivity gains that, while lower, are less correlated with energy use (Hardt et al., 2021). Furthermore, this structural change is not strictly domestic, it simultaneously extends into the international division of labor. Firms outsource certain industrial activities in order to cut costs and improve

profitability (Milberg and Winkler, 2013). The industrial and material basis of accumulation does not disappear altogether, it is just relocated elsewhere. Carbon content analysis of the trade balance (exported emissions minus imported emissions) is consistent with this thesis. As Fig. 10 shows, CO₂ embodied in trade is on the increase for the entire post-1970 period, with a clear deepening from 1984 onwards. This is a clear sign of an increasing ecologically unequal exchange.

### 3.3.4. The key role of financialization

These developments must be seen in the context of a key feature of the new neoliberal regime: financialization. Financialization can be defined as the tendency of productive units to generate a flow of value from financial assets rather than real assets. The degree of financialization can therefore be estimated on the basis of two key indicators relating to non-financial companies: the disconnection between the rate of investment and the rate of profit (Cordonnier, 2006) or the share of financial assets relative to real assets or value added (Kovacic et al., 2018).

Financialization contributes to the decoupling of apparent labor productivity and EMR through at least three channels. Firstly, from a post-Keynesian perspective, a certain rate of profit is normally achieved through a certain rate of investment (see Appendix C for a presentation of Kalecki’s law). The only way to achieve a given rate of profit without an equivalent rate of investment is to increase other variables, such as the public deficit, consumption over profit, wage dissaving or a trade surplus. This is precisely what happened from 1982 onwards: investment as a percentage of profits fell from 88 % to 66 % in just six years (Fig. 11). The reason: required profitability standards disqualified some investment projects (Auvray et al., 2015). But if investment slows down, capital per capita slows down, and with it, energy per capita. In this case, financialization accompanies the trend towards deindustrialization (Clévenot, 2023) and explains the slowdown in EMR.

The impact of financialization can also be seen in the dynamics of these sectors’ value added in relation to GDP, and therefore on apparent labor productivity. For Durand and Gueuder (2018) and Basu and Foley (2013), we need to consider the evolution of the share of the financial, insurance and real estate sectors in GDP to measure the degree of financialization of an economy. In France, this share has grown steadily since the Fordism-to-neoliberalism transition, rising from less than 10.9

<footnote n="9">⁹ Another and complementary explanation could be efficiency dilution, i.e., the greater use of less efficient processes, like low temperature heating (see Williams et al., 2008).</footnote>
<figure><img src="image_13.png" /><figcaption>Fig. 10. CO₂ content of France’s trade balance in millions of tons (1970–2021). Source: authors, based on the Eora database (Lenzen et al., 2012).</figcaption></figure>

<figure><img src="image_14.png" /><figcaption>Fig. 11. Investments as a share of profits in France (1960–2022). Source: authors, based on data from OECD (2024b).</figcaption></figure>

% of GDP in 1970 to over 16.2 % in 2020 (OECD, 2024c). This share is largely driven by the real estate sector but has tended to stagnate since 2008. It should be noted that the increase in value added in these sectors is partly the result of new accounting conventions that have made these sectors more productive (Christophers, 2011). As value added is increasingly created by low-energy-intensity sectors, and moreover based on accounting conventions that tend to treat previously unproductive income as productive, the result is an apparent decoupling of GDP/labor productivity from EMR.

Beyond the financialization of added value, another related phenomenon is that of *transfer prices* used by the different subsidiaries of the same company. These prices can be set with the aim of inflating/ deflating the added value generated by a firm in a given territory, for purposes such as tax optimization. Take, for example, the extreme case of Ireland, where multinationals locate their parent companies because of the attractive tax rate on profits. This country has the highest apparent labor productivity in Europe. Everyone agrees that, through

transfer pricing, resident companies repatriated the added value generated by subsidiaries abroad to Ireland. In Europe, this movement was made possible by the Single European Act of 1986, which authorized the free movement of capital.

Ultimately, far from being alternative explanations, these different phenomena further reinforce the case to account for the decoupling between apparent labor productivity and EMR as summarized in Fig. 12 (this figure shows causality chains investigated in the present paper, it is not intended to be comprehensive, other channels might be at play). This relative decoupling of productivity gains and EMR is essential: it allowed France to begin reducing the burden of energy expenditures as early as 1983, four years before the oil counter-shock of 1986. The real price of energy rose until 1985, before falling sharply by 23 % to its 1960 level (Fig. 6). It was only under the effect of this last variable that the weight of energy expenditures returned to its pre-shock level (the same applies to households). This easing of the energy constraint favored an upturn in the profit rate (Fig. 8).
<figure><img src="image_15.png" /><figcaption>**Fig. 12.** Neoliberalism and the decoupling of apparent labor productivity and EMR. Source: authors. Note: this figure is not intended to be comprehensive, other channels not identified here might be at play.</figcaption></figure>

Ultimately, in the face of the energy contradictions of Fordism, neoliberalism offered salvation by reconfiguring the productivity/EMR relationship. The return of real energy prices to their 1960 level between 1986 and the early 2000s only reinforced this regime. This is borne out by the relative stability of the rate of profit and the weight of the energy bill between 1988 and 2002. As with the Fordist crisis, focusing on energy prices alone fails to grasp the importance of metabolic transformations in establishing neoliberalism.

**3.4. Towards a neoliberalism structural crisis: The gradual exhaustion of neoliberal recipes for managing metabolic constraints (2000–2020)**

In the early 2000s, neoliberalism once again faced unstable energy conditions. From 1999 onwards, a new price shock appeared: the real price of energy rose by 46 % over 20 years (1999–2019), and even by 76 % if we extend the analysis to the specific context in 2022 (see Fig. 6). The intensity of this shock is comparable to that of the 1973–86 period (+54 %). Energy expenditures, which had bottomed out in 1998 at 5.4 % of GDP, began to rise. Symmetrically, the rate of profit, which had peaked between 1998 and 2000 (7.3 %), began to fall steadily until 2019 (5 %).

Two points deserve comment. First, the neoliberal recipes (deindustrialization and financialization) for reconfiguring the metabolism of France seem not sufficient to remedy this price shock. Above all, the deepening use of these neoliberal “solutions” was a source of destabilization for the regime, as exemplarily shown by the financial crisis of 2007 and the increasingly large trade deficit of the country) (3.4.1.). Second, the deterioration in profit rates can also be seen as an inability of companies to pass on this shock to employees, despite substantial government support for maintaining profit rates (3.4.2.).

**3.4.1. Further deindustrialization and financialization: A dead end**

Neoliberalism's first reaction to this shock was to deepen past trends, namely deindustrialization. As Fig. 4 shows, from the early 2000s onwards, there was a clear break in EMR dynamics, whatever the measure

used (final or useful stage, national economy or productive sectors only). For example, at the useful stage, EMR fell by 18 % between 2000 and 2020 for productive sectors. On an annual basis, EMR fell by 0.9 % per year at the final stage, and by 0.4 % at the useful stage for the national economy. China's entry into the World Trade Organization (WTO) and the introduction of the euro at the same time undoubtedly contributed to this process: increased international competition encouraged industries to continue moving abroad. Concurrently, apparent labor productivity grew at an increasingly sluggish pace: 0.9 % in the 2000s, 0.8 % in the 2010s. Thus, whereas the first phase of neoliberalism (1980–1999) was characterized by a relative decoupling between apparent labor productivity and EMR at the useful stage, from 2000 onwards, the decoupling between these variables became absolute.

Initially, this movement was not sufficient to counter energy prices' effect on the weight of energy expenditures, which increased significantly: 5.6 % in 1999, 10.7 % in 2008, and peaking at 11.5 % in 2012. From 2013 onwards, however, energy costs fall significantly, reaching 7.2 % in 2020, before rising again sharply to 16.7 % of GDP in 2021.

Other difficulties compound with this lightening of the energy expenditures burden. Firstly, the pursuit of financialization showed signs of exhaustion with the outbreak of the 2007 crisis: strategies to create value from financial assets led to the most serious financial crisis since 1929. Non-financial French companies saw their net financial income begin to decline after 2007 (Durand and Gueuder, 2018).

Then, offshoring industrial activities to counter the weight of energy expenditures was an appropriate solution at the firm level. But at the national level, this strategy generated a structural and growing trade deficit. France's trade balance, which had recovered under the first phase of neoliberalism, began to deteriorate in the middle of the 2000s (see Fig. 13). A trade deficit appeared as early as 2004 for the balance of goods (2006 if services are included), and continued to grow until then, reaching 5.4 % in 2022 (3.9 % if services are included). As in the 1974 crisis, this deficit was driven by the increase in the energy bill, following the energy price shock, but not only. The non-energy trade balance is also deteriorating, probably as a result of the growing trend towards
<figure><img src="image_16.png" /><figcaption>**Fig. 13.** France's trade balance as percentage of GDP (1960–2022). Source: authors, based on data from SDES (2022) for the energy bill and OECD, 2024d for the trade balance.</figcaption></figure>

deindustrialization. So, despite a reduction in the energy bill from 2012 onwards, the non-energy trade balance continued to deteriorate. Moreover, unlike in the past, this lightened energy expenditures burden did not coincide with a restored profit rate. In fact, average profit rate fell by 2.3 points compared to its 2000 level.

### 3.4.2. State support in favor of companies increasingly necessary but insufficient to maintain profit rates

As with the Fordist crisis (1974–1982), capitalists have so far failed to pass on these costs to employees: the exploitation rate remained stable from 2000 to 2010 (at around 31 %) and even fell from 2007 onwards (–6 points, see Fig. 9). In 1974, capitalists could not pass on the increasing cost of energy to employees because wages were indexed to prices. In the 2000s, we can assume that it is international competition that is limiting the possibility of firms to pass on increasing energy costs on employees’ wages, otherwise prices of final good would rise. Besides, the downward trend in the EMR also failed to restore profit rates: the organic composition of capital increased by 22 % (from 4,9 to 6) despite the decline in technical composition<fnref n="10" /> (i.e., EMR) over the period. In other words, the volume of machinery per worker was falling significantly, but prices were such that its value increased relative to wages paid.

In 2010, when companies found themselves unable to pass on this profit deterioration to employees as they had done in 1983, they embarked on a massive offshoring driven in the tailwinds of intense free-market globalization. Progress in final energy efficiency (+11.2 %, from 20.2 % to 22.4 % between 2000 and 2020) could not compensate for the incentives towards international competition. Against this backdrop, successive governments made it their priority to reduce France's cost of labor (through exemptions from social security contributions since 1995, employment competitiveness tax credit, the Labor Law, freezing civil servants' wages, etc.): this is a strategy of complacency towards

capital, which demands a return to a profit rate deemed “normal” and “necessary”. For the time being, this strategy has not borne fruit: the wage bill continues to grow faster than profits, resulting in a drop in the exploitation rate (see Fig. 9).

But there’s another lever that governments have been using since the 2000s to bolster profit rates: public aid policies for companies (Fig. 14). Introduced in the 1980s, they soared from the 2000s onwards to represent almost 10.2 % of GDP in 2021, or nearly 42 % of net profit! The concomitance with energy’s sustained real price rise is striking. Nevertheless, this public policy has been a failure for everyone – capitalists, workers, and taxpayers alike. In fact, despite their considerable volume, public subsidies to companies have only served to contain the fall in the rate of profit, without enabling a recovery to the desired level. On the other hand, this spending’s contribution to deteriorating public finances is undeniable: in 2021, this aid represented over 17 % of public spending and more than 1.5 times the amount of the public deficit (6.5 % of GDP).

A post-Keynesian perspective helps us to understand this failure. The rate of profit positively depends on the rate of investment (low), the public deficit (high) and trade in goods and services (structurally negative since 2006). Put another way, government efforts to raise the rate of profit via public deficit are hampered by the trade deficit (for further discussion, see Kalecki’s law in Appendix C).

Neoliberalism in France (and other rich countries) is therefore a mode of development that functions solely by maintaining ecologically unequal exchanges with the rest of the world, extended financialization, and life-support drip for domestic companies (resulting in growing public debt), all of which are still not enough to restore profit rates similar to those of Fordism.

## 4. Discussion: Are we at the dawn of a new post-neoliberal development regime for capitalism?

In this section we state clearly our responses to research questions 1, 2 and 3 (4.1), before answering research question 4 (4.2). Then, we discuss the limits of our study (4.3).

<footnote n="10">¹⁰ The technical composition is the amount of fixed capital divided by the wage bill. Fixed capital represents 6 times the wage bill in 2019.</footnote>
<figure><img src="image_17.png" /><figcaption>Fig. 14. Public aid (including declassified aid) received by companies in France (1979–2021). Source: authors, based on data from Abdelsalam et al. (2022).</figcaption></figure>

## 4.1. Main conclusions and contributions

Most economists believe that energy plays a small (cost-share) role in economic dynamics, and they confine this minor part to an exogenous price shock that temporarily affects economic growth. Our results show the interest of another representation of the role of energy: energy must be understood as a metabolic constraint that the modalities of capital accumulation must permanently overcome.<fnref n="11" />

In line with previous work, we consider that this constraint should be understood in terms of the weight of energy expenditures. When this weight becomes too high, capital accumulation cannot continue:

* on the supply side, the rate of profit in the economy tends to fall, reducing the incentive for firms to invest and produce;

* on the demand side, non-energy spending tends to be squeezed, which prevents demand from growing.

Furthermore, the weight of energy expenditures is a much richer indicator than energy prices alone. In fact, the ternary decomposition of the weight of energy expenditures that we propose also includes labour productivity and EMR. Taking these two variables into account (besides energy real price) gives us a better understanding of how the metabolic constraint plays a part in the reconfiguration of capitalism. To be brief, for a given real energy price, a capitalist mode of development sets a certain elasticity between the EMR and labour productivity.

**Response to RQ1:** Until the mid-1970s, France experienced strong growth because it increased its EMR and achieved productivity gains (elasticity was close to unity), which helped to keep the weight of energy expenditures low (see Table 2). This way of managing the metabolic constraint was no longer possible from 1969 onwards (because productivity gains slowed down and no longer compensated for the rise in EMR) and even less so after 1974 (due to the energy price shock). As regulationnists postulate, the slowdown in productivity gains can be

explained by the saturation of demand for standardized goods and the fact that national markets were too small. At the metabolic level, neoliberalism differs from Fordism in its ability to decouple (relatively at first, and then absolutely) labour productivity growth from EMR, thanks to industy outsourcing and increasing financialization. It was this decoupling that enabled the system to begin reducing the weight of energy expenditures as early as 1984, two years before the fall in energy prices. An analysis of prices alone misses these dimensions.

**Response to RQ3:** From this perspective, key aspects of neoliberalism such as financialization and industrial outsourcing can be seen as ways to overcome the metabolic exhaustion of Fordism. However, these solutions seem to be running out of steam for two reasons: a rising weight of energy expenditures, and the destabilizing nature of the macro-economy (financial crises and trade imbalances) (see 4.2.).

**Response to RQ2:** Finally, our approach also makes room for distributional analysis. Many ecological analyses overlook the specific nature of the economic system under study: capitalism. This system is driven by profit, and the distribution of value between capitalists and employees is therefore a fundamental variable. A fall in profitability caused by the rising cost of energy and machinery can also be passed on to real wages. This is what the French trajectory shows between 1981 and 1989 (Fig. 9). Conversely, between 2007 and 2019, capitalists have not managed to increase the rate of exploitation of workers in order to restore profitability, which has been eroded by high energy prices (Fig. 9).

## 4.2. Implications for the future: the dead end of neoliberalism?

**Response to RQ4:** While neoliberal regulation has succeeded in temporarily containing an explosion in energy expenditures, this has gone hand in hand with the emergence of major contradictions. The deepening of financialization and deindustrialization/tertiarization, essential to decouple labor productivity from EMRs, have reached significant limits. The former has led to chronic financial instability, with the result that the financial system is now heavily administered by central banks. As for deindustrialization, it has led to a structural deficit in trade in goods and services, which has contributed to the fall in France's average profit rate. To counter this trend, which is reinforced by low investment rates (compared to Fordism), we need ever more public deficit (in particular to pay aid to companies) and private debt (employee dissavings). The new price shock from 2021 onwards therefore comes at a time when neoliberal regulation has already run out of

<footnote n="11">¹¹ As already pointed out by Kümmel and Lindenberger (2014), our approach shows that the so-called “cost share theorem” of neoclassical economics theory is completely wrong. When energy is cheap and has a low cost share in national GDP (relatively to other production factor such as labor and capital), it does not mean that the contribution of energy to economic growth is minor. On the contrary, the weight of energy expenditures must remain low for the economy to potentially grow.</footnote>
<table><caption>**Table 2**
Characterizing capitalists’ modes of development in France (1960–2020).</caption><thead><tr><th rowspan="3"></th><th colspan="3">Fordism</th><th colspan="2">Neoliberalism</th></tr><tr><th colspan="2">Consolidation</th><th rowspan="2">Crisis</th><th colspan="2">Consolidation</th></tr><tr><th>1960</th><th>1974</th><th>2000</th><th>2020</th></tr></thead><tbody><tr><td>Profit rate</td><td>8.8%</td><td>7.1%</td><td>4.5%</td><td>6.4%</td><td>4.2%<sup>a</sup></td></tr><tr><td>Exploitation rate</td><td>31.3%</td><td>30.1%</td><td>20.6%</td><td>31.5%</td><td>25.3%<sup>a</sup></td></tr><tr><td>Organic composition of capital</td><td>3.6</td><td>4.2</td><td>4.6</td><td>4.9</td><td>6<sup>a</sup></td></tr><tr><td>Annual gr. rate for the period ending in<sup>b</sup></td><td>/</td><td>+0.9%</td><td>+1.6%</td><td>+0.4%</td><td>+1.1%</td></tr><tr><td>EMR (final stage) index</td><td>100</td><td>245.3</td><td>249.8</td><td>297.4</td><td>244.9</td></tr><tr><td>Annual gr. rate for the period ending in</td><td>/</td><td>+7.6%</td><td>-0.1%</td><td>+1%</td><td>-0.9%</td></tr><tr><td>Thermodynamic efficiency (F-to-U stage)</td><td>15%</td><td>20%</td><td>19.2%</td><td>20.2%</td><td>22.4%</td></tr><tr><td>Labor productivity index</td><td>100</td><td>228.9</td><td>293.9</td><td>434.5</td><td>516.7</td></tr><tr><td>Annual gr. rate for the period ending in</td><td>/</td><td>+6.1%</td><td>+3.6%</td><td>+2.2%</td><td>+0.9%</td></tr><tr><td>Labor productivity/EMR</td><td>1</td><td>0.93</td><td>1.17</td><td>1.5</td><td>2.1</td></tr><tr><td>Elasticity for the period ending in</td><td>/</td><td>0.8</td><td>-24.78</td><td>2.19</td><td>-0.93</td></tr><tr><td>Real energy price index</td><td>100</td><td>100.6<sup>c</sup></td><td>125.7</td><td>100.3</td><td>141.5</td></tr><tr><td>Energy expenditures relative to GDP</td><td>6.5%</td><td>11.6%</td><td>13.8%</td><td>7.3%</td><td>8.4%</td></tr></tbody></table>

a. In the absence of available data for 2020 in Basu et al. (2022), we use the value for 2019.

b. For example, the data for 2000 should be read as follows: the organic composition of capital grew by 0,4% per year between 1982 and 2000.

c. This 1974 value does not totally reflect the trend occurring during Fordism consolidation. In 1973, the index of the real price of energy is 83.2, showing a decline throughout the period rather than a stagnation (see Fig. 6).

steam.

At the time of writing this article, central banks are certainly in an uncomfortable position, torn between the desire to fight inflation (by tightening monetary policy) and that of guaranteeing financial stability, which implies not abandoning the guarantee of public debt. Furthermore, in the face of historically low profit rates, large corporations have finally decided to make households pay. This has not escaped the notice of either the European Central Bank or the IMF, since researchers at both institutions estimate that nearly half of inflation is now driven by profits (Hahn, 2023; Zhou et al., 2023).<fnref n="12" /> As nominal wages do not keep pace with inflation, real wages tend to fall and the exploitation rate rises. Unless energy prices come down, the social sustainability of neoliberalism is at stake. The French government has perfectly understood this. In October 2021, it launched the “tariff shield”. This measure, which accounted for 1.1 % of France’s GDP (annually), saw the State pay for part of the rise in energy prices. Social stability was relatively preserved, but at the cost of a further increase in public debt. Beyond these emergency measures, the French government seems to be aware of the problem of deindustrialization affecting the country. In September 2023, Emmanuel Macron advocated for a new “ecological planning” to ensure both a “reduction in CO₂ emissions and an adaptation [to climate change]” but also a “strengthening [of] our sovereignty, and therefore reducing our dependence, compatible with our objective of reindustrialization and full employment”.<fnref n="13" /> President Macron also repeatedly stressed the need to move towards sufficiency policies, insisting, however, that it was not a question of producing less but of “consuming less

energy, particularly fossil fuels”.<fnref n="14" /> This last sentence shows that for Emmanuel Macron, as for many people, the distinction between sufficiency and efficiency is not understood.

Recently, Boyer (2023) outlined that a new ecologically sustainable accumulation regime could emerge. In such a system, environmental imperatives would take precedence over everything else, which would completely reconfigure the rules governing our international integration, the degree and type of competition on the markets, and the way money is managed. Boyer argues that such a macroeconomic framework would favor “living well over growth” and would be “open to degrowth”. This system closely resembles the models advocated in post-growth or even degrowth literature (see, for instance, Fitzpatrick et al., 2022).

As things stand, the move towards such a regime seems very timid. Despite the recommendations of the Stiglitz-Sen-Fitoussi report (Stiglitz et al., 2009) on new wealth indicators in 2008, the French government’s compass remains firmly focused on GDP’s growth. Admittedly, the aforementioned speeches envisage a reconfiguration of the modalities of international integration, but free trade treaties remain legion<fnref n="15" /> and the competition promoted by the European treaties unchanged. What’s more, Emmanuel Macron has shown no openness whatsoever to the degrowth thesis.<fnref n="16" /> Perhaps only the monetary sphere is moving in this direction: the European Central Bank has begun to green its priorities and interventions (Deyris, 2023).

It is still too early to say whether these announcements signal a

<footnote n="12">¹² Christine Lagarde, President of the ECB, did not hesitate to publicly relay this information: https://euobserver.com/green-economy/157196.</footnote>

<footnote n="13">¹³ https://www.vie-publique.fr/discours/291196-emmanuel-macron-2509-2023-planification-ecologique</footnote>

<footnote n="14">¹⁴ https://www.francetvinfo.fr/france/14-juillet/l-interview-du-14-juillet-une-tradition-a-laquelle-emmanuel-macron-ne-s-est-pas-plie-souvent-depuis-son-arrivee-a-l-elysee_5947781.html.</footnote>

<footnote n="15">¹⁵ The European Union has the largest network of free trade agreements in the world, with over forty agreements concluded with third countries.</footnote>

<footnote n="16">¹⁶ “Degrowth is not the solution to the ecological challenge. Those who tell us that we need to shrink are often people who don’t believe in progress or in the role of innovation in solving these challenges” (speech given on 20 June 2020).</footnote>
genuine change of regime, or whether the measures taken will be enough to reverse past trends. For the time being, Neoliberalism in France appears to be an increasingly administered system: public spending is increasingly necessary to maintain it, which in turn presupposes relative control of the financial system (by central banks) in order to guarantee public debt. This fact calls into question the name “neoliberalism” given to the current period. It seems more appropriate to say that we have entered a post-liberal mode of development in recent years.

### 4.3. Limitations of this work and future research

Several limitations to this work have been identified and may be addressed in future studies. First, although our analysis is based on a regulationist framework, it is limited to characterizing the accumulation regime (see Fig. 1), i.e., the regularities in the various monetary and physical aggregates. To be totally complete, it lacks a detailed analysis of the different institutions at the origin of these regularities. Some of them are mentioned (China's entry into the WTO, the introduction of the euro, certain public aid schemes for businesses) but they should be taken into account more systematically. In particular, it would be interesting to see the contribution of the various institutions regulating access to energy and the formation of its price. For example, in the 2000s, the European Union deregulated the electricity market. It is not entirely clear whether these institutional changes have contributed to the observed dynamics of energy prices before 2021.

Secondly, our analysis is limited to the case of France. This country has certain specific characteristics (such as the fact that a large proportion of its electricity is generated by nuclear power). A comparison with more industrialized countries with a different energy mix, such as Germany, would be interesting. Similarly, the accessibility of the data certainly makes such a study possible for the United States, which, given its weight in the world economy and its position as the world's leading oil producer, is an interesting case. Are such changes in metabolic constraints being observed in these countries? The recent study of Kennedy (2024), showing that macroeconomic paradigms in the USA were defined by energy during the 20th century, indicates that our analysis would stand to this country. In addition to a comparison over time for each country (between Fordism and neoliberalism), a comparison over space would also make sense, since different types of capitalism coexist at the same time (Amable, 2005).

Finally, at the methodological level, a quantitative analysis of the contribution of the various factors affecting the weight of energy expenditures (real energy prices, EMR, labor productivity) would be beneficial. For instance, future work could use index decomposition for this purpose.

## 5. Conclusion and outlook: Energy at the heart of neoliberalism's structural crisis

At a time when neoliberalism is undergoing a structural crisis, two interpretations of the role of energy are possible. The first, a minimalist one, is found among most orthodox economists, as well as regulationists, and consists in seeing energy only in terms of its price. Energy is no more than an exogenous shock, certainly capable of temporarily shaking up a regime, but the real determinants of the crisis are elsewhere (exhaustion of productivity gains for Fordism, excessive financialization for neoliberalism). From this perspective, high energy prices may have contributed to the bursting of the subprime bubble in 2007, but this would remain a secondary factor compared to excessive financialization.

By enriching regulation theory with contributions from ecological macroeconomics, our article defends a second interpretation. We argue that energy is much more central to the constitution and demise of accumulation regimes, as each regime of capitalism must manage a *metabolic constraint*. In concrete terms, each regime finds itself having to organize the progression of capital accumulation while containing the weight of energy expenditures. Focusing solely on the price of energy is insufficient, since we must also consider the fundamental relationship between the exosomatic metabolic rate (EMR) and apparent labor productivity.

Fordism and neoliberalism in France represented two distinct ways of handling the metabolic constraint. The Fordist regime relied on increasing energy use and productivity in parallel, but this method became unsustainable by the 1970s. Increasing financialization and deindustrialization (among other features) were the “solutions” that capitalism needed to overcome the metabolic exhaustion of Fordism and design a new regime, namely neoliberalism. This regime achieved a relative (and now absolute) decoupling of energy use from apparent labor productivity, but this too has shown signs of exhaustion since the 2000s, and even more since the financial crisis of 2007. Rising energy costs, stagnating productivity gains, increasing trade balance, and the growing need for public financial support for private businesses (aggravating public deficit and debt) have exposed the inherent contradictions of neoliberalism, calling into question whether this regime can continue to adapt to its ecological constraints. Future trajectories may signal the rise of a new, post-neoliberal capitalist mode of development. Whether this new regime will also be post-growth remains in question.

### Funding

Victor Court acknowledges the support of the Chair Energy and Prosperity, under the aegis of *La Fondation du Risque*.

### CRediT authorship contribution statement

Alban Pellegris: Writing – review & editing, Writing – original draft, Validation, Methodology, Investigation, Formal analysis, Data curation, Conceptualization. Victor Court: Writing – review & editing, Writing – original draft, Visualization, Validation, Methodology, Investigation, Formal analysis, Data curation, Conceptualization.

### Declaration of competing interest

The authors declare that they have no known competing financial interests or personal relationships that could have influence the work reported in this paper.

### Acknowledgements

We would like to thank Emmanuel Aramendia for his help with data on primary, final, and useful exergy consumption, and the resulting thermodynamic efficiencies. We thank participants of the seminar "*Économie et société à Rennes 2 (ESR²)*" for valuable questions, especially Luc Elie and Alexandre Berthe. We also thank Albert Bouffange for his interesting remarks on an earlier version. Finally, we would like to thank the three anonymous reviewers for the time they spend reading this article. Their insightful comments helped us to restructure our article and better highlight our conclusions. All remaining errors are ours.

## Appendix A. Commonly accepted causes of the 2007 crisis

The *subprime* crisis of 2007, which later turned into the Great Recession, is considered the most serious economic crisis since the Second World War.
Its causes and consequences are multiple and interconnected. A well-known key element of the crisis was the proliferation of *subprime* mortgages for borrowers with poor creditworthiness. These loans often carried variable interest rates, increasing the risk of default. The possibility of excessive *subprime* mortgage lending can be explained by a context of weak financial regulation, which allowed banks to broaden their lending criteria to reach a wider audience, while developing new financial products whose risks were difficult to assess (Arner, 2009; Mishkin, 2011). In particular, the practice of securitization, in which mortgage loans are bundled into complex financial securities to form a more liquid product, contributed to the spread of risk throughout the financial system as the quality of the underlying loans was camouflaged. The opacity of these structured financial products, based on these *subprime* loans, greatly contributed to the crisis.

The desire to make a quick profit by securitizing *subprime* loans also corrupted the risk management practices of major financial conglomerates and the credit review practices of rating agencies. Rating agencies assigned high ratings to many financial products containing *subprime* loans, misleading investors as to the real level of risk associated with these securities (Wilmarth Jr., 2020). The underestimation of the risks associated with these securitized products, combined with their widespread distribution in the financial system, led to rapid global contagion of the financial crisis that began in the United States in 2007. It affected financial institutions in Europe, necessitating major intervention by governments and central banks to stabilize the financial system (Jiang et al., 2022). Policy responses to the crisis, such as quantitative easing by central banks and fiscal support policies by governments, had mixed results. In the United States, massive support policies led to a relatively rapid economic recovery, while the more timid and short-lived policies implemented in Europe failed to prevent another crisis, that of public debt in the eurozone.

For some authors, this crisis is rooted in the US Federal Reserve's highly accommodating monetary policy during the 2000s, under the leadership of Alan Greenspan. This expansionary monetary policy is said to have contributed to an environment of low interest rates, encouraging indebtedness and risk-taking in the real estate and financial sectors (Leamer, 2009; Taylor, 2007, 2009). This analysis is not unanimous, however, as several econometric studies have shown that the Fed's monetary policy played a negligible role in the creation of the US real estate bubble (Dokko et al., 2011; Luciani, 2015).

In short, the *subprime* crisis was the result of a complex combination of factors, including extremely risky credit practices, uncontrolled financial innovation, opacity regarding the risk of financial assets, lax monetary policy and global integration that facilitated the spread of the crisis. This episode highlighted fundamental flaws in the global financial system, which have not been fully resolved, and which therefore point to the strong likelihood of a new crisis. (International Monetary Fund, 2023).

## Appendix B. Characterization of development patterns in France since the 16th century

<caption>Table B.1</caption>

Development patterns in France from the 16th century to the present day. Source: authors, after Boyer (2015, p.65; 2023, p.34).

<table><thead><tr><th>Features</th><th>Development mode</th><th></th><th></th><th></th><th></th></tr><tr><th></th><th>Ancien Régime (16th–18th centuries)</th><th>Large factory (19th century)</th><th>Taylorism (early 20th century)</th><th>Fordism (1945–1974)</th><th>Neoliberalism (since 1974)</th></tr></thead><tbody><tr><td>Dynamics of the global output</td><td>Extensive, predominantly agricultural sector, strong dependence on colonies</td><td>Extensive, beginning of mechanization in urban factories</td><td>Intensive, start of assembly lines</td><td>Intensive, mobilizing returns to scale</td><td>Extensive trend: exhaustion of productivity gains and tertiarization</td></tr><tr><td>Composition of total demand</td><td>Peasantry, rising bourgeoisie, aristocracy (sustained war effort)</td><td>Peasantry, assertive bourgeoisie, public spending</td><td>Growing share of employee demand</td><td>Employee demand drives mass consumption</td><td>Salaried but stratified by income</td></tr><tr><td>Regulation</td><td>Administered</td><td>Competitive</td><td>Competitive</td><td>Administered</td><td>Competitive</td></tr><tr><td>Value-added sharing</td><td>Capture by the aristocracy</td><td>For the benefit of shareholders</td><td>To the benefit of capital owners, growing share for salaries</td><td>Ex ante stabilization of the wage-capital split</td><td>Reduction in the employee share, then stabilization</td></tr><tr><td>Cyclical crises</td><td>Meteorological hazards</td><td>Meteorological hazards, accumulation-related imbalances</td><td>Imbalances in accumulation not addressed by economic policy</td><td>Accumulation imbalances taken care of by economic policy</td><td>A succession of speculative bubbles</td></tr><tr><td>Structural crisis</td><td>Political conflict over the appropriation of wealth</td><td>Deflationary spiral and underemployment equilibrium</td><td></td><td>Stagflation</td><td>Financial system under central bank control</td></tr></tbody></table>

## Appendix C. Kalecki's law

According to the post-Keynesian approach, making profits requires capital accumulation, and therefore investment. Known as Kalecki's law, this relationship can be summed up by the following adage: "wage earners spend what they earn, capitalists earn what they spend" (Kalecki, 1966). A brief presentation based on national accounting illustrates this idea.

Either *P* profit, *W* wages, *C* consumption, *I* investment, *Q* production, *K* capital stock and *p* unit price. It is assumed that there is no intermediate consumption, so that value added *VA* is equal to *p* × *Q* that employees consume their entire wage and that capitalists only invest (no capitalist consumption). We can therefore write:

$$P = pQ - W \qquad (C.1)$$

$$P = (C + I) - W \qquad (C.2)$$

$$P = I \qquad (C.3)$$

$$P/K = I/K \qquad (C.4)$$
In this stylized model, we see that profit comes from capitalists' investment spending, so the rate of profit depends on the rate of accumulation in accounting terms and over a period of time. From this perspective, the paradox of profit without accumulation is more salient: if capitalists invest less, they spend less, so they should have a lower profit. The question then arises: how do they manage to have a positive rate of profit, even though they invest less?

To understand this, all we have to do is add to the initial model the distinction between salaried consumption ($C_w$) and capitalist consumption ($C_p$), so that $C = C_w + C_p$.

In this case, we have:

$$P = C_p + C_w + I - W \quad (C.5)$$

$$P = C_p + I \quad (C.6)$$

and in the absence of investment, i.e., $I = 0$, we obtain:

$$P = C_p \quad (C.7)$$

This fictitious example shows that, in a simple model, it's possible to make a profit without investment. Indeed, capitalists can make two types of expenditures: capitalist consumption or investment (accumulation of fixed capital). If profit consists essentially of capitalist consumption, there is no investment, and therefore no extended reproduction of capital: the economy cannot grow. It is therefore possible to have a positive rate of profit with a zero rate of accumulation, in this case, when capitalists consume the entire profit.

In a world where there are only capitalists and wage earners, this expenditures can only come from the capitalists themselves, either in the form of consumption or investment. However, by making the model more complex, it is possible to highlight other situations that produce this result. At least three such situations can be identified: public deficit, trade surplus and employee dissaving.

In the case of the public deficit, the State spends more than it takes from private economic agents. It therefore injects additional net demand into the economic circuit. Companies receive more than they pay out in wages, without capitalists having to invest or consume. Starting again from the national accounting equations and noting G public spending and T taxes, profit can be written as:

$$P = (C_p + I) + (G - T) \quad (C.8)$$

The case of the trade surplus follows the same logic, except that this net injection of additional demand is generated by the rest of the world. With X exports, and M imports, we can enrich our profit formula as follows:

$$P = (C_p + I) + (G - T) + (X - M) \quad (C.9)$$

Finally, employee dissaving behavior also influences the profit rate. It should be remembered that, in the initial model, employees had only their current wages at their disposal, which they consumed in full. In practice, however, it is more realistic to consider the possibility of employees spending more than their wages, either through a previously built-up stock of savings, or by taking on debt. In both cases, this behavior results in employee dissaving, i.e., a *negative savings flow*. Employee dissaving makes a positive contribution to profits and, conversely, when employees save, this reduces profits. Eq. (C.9) can thus be completed with $S_w$ which gives us the most complete equation proposed by Kalecki:

$$P = (C_p + I) + (G - T) + (X - M) - S_w \quad (C.10)$$

For convenience, the sum of the aggregates in bold will be called A in the following. A is the sum of all cash flows that contribute positively to a given level of profit, but which are not capital expenditures. Our aim here is to distinguish capital expenditures (I) from other expenditures (A). By dividing by the capital stock (K), we return to the formula for the rate of profit:

$$\frac{P}{K} = \frac{I}{K} + \frac{C_p}{K} + \frac{(G - T)}{K} + \frac{(X - M)}{K} - \frac{S_w}{K} \quad (C.11)$$

$$\frac{P}{K} = \frac{I}{K} + \frac{A}{K} \quad (C.12)$$

An economy's rate of profit can therefore be decoupled from its rate of investment, provided that $\frac{A}{K} > 0$. It's the evolution of this term that we need to follow to measure the extent to which the rate of accumulation deviates from the rate of profit. Put another way, the gap between the rate of profit and the rate of accumulation can be explained by the positive contribution of A/K.

## Data availability

Data are available in a separate repository on Open Science Framework.

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