Philippe Herzog

Image: Messala Ciulla


Note on a forerunner of political regulation theory

Philippe Herzog, an economist aligned with the French Communist Party in the 1970s, reflects on the influence of the monopoly or financial company on the institutionality and implementation of State policy, as well as analyzes the effects of State policy on the relationship of forces within the class capitalist, that is, on the hegemonic system formed by the conglomeration of industrial and banking capital.

For Ph. Herzog (1974a), the imbrication of the bank and industrial capital engendered a financial oligarchy that works in a new way to value its capital and the drained funds (by the State, the issuance of shares, etc.) at its disposal. It divides this mass into elements that carry out cycles of a different nature and obtain different rates of return, and whose simultaneous management tends to ensure the best conditions for capital appreciation. These points of application and the partial alliances between the capitals of the different fractions, incessantly modify the unstable composition of the 'financial groups', thus making their identification difficult.

As is known, one of the first references to the multifunctional group (circulation, production) in the block of the dominant classes is found in K. Marx, The class struggle in France, when he refers to the “financial aristocracy”, in the context of the capitalist rise in France in the mid-nineteenth century. In the twentieth century, perhaps thinking about the decline of the capitalist formation, Ph. Herzog names the composition of the grouping of the various functions of capital as the “financial oligarchy”. The reference to Plato's forms of government – ​​positive and negative – is still implicit in the two nomenclatures, “financial aristocracy” and “financial oligarchy”.

The competing interests of the financial oligarchy delimit the field of configuration of the institutionality of State policies: “in the current context, it is visible that the monopolies attribute to themselves, in close connection with the ruling political personnel, norms of public action, or grant partially to the workers, without any public power forcing them to accept structurally different solutions”. This does not imply that the State apparatus is directly occupied by the direct representatives of the financial bourgeoisie: “the operation of public institutions is the prerogative of specific State apparatuses. These are not the direct emanation of the ruling class: by entrusting one of the fractions with the working of such apparatuses, the ruling class would aggravate the contradiction between particular interests and its general interest”.

For Ph. Herzog, the issue of the decline of large contemporary companies cannot be equated in the model of capitalist formation, because this model is destined to privilege the consumption of capital (means of production) and not the satisfaction of social needs. As the author states, “the delay of popular consumption in relation to objective needs is one of the central causes of the weakening of the productive potential and, therefore, of inflation”; “It is therefore necessary that public financing respond directly to social needs”. From this diagnosis results the Popular Union Program in advanced capitalist formations: “the reorientation towards social needs of public financing fed by taxes and [by] savings depends, in order to be effective and not be 'compensated' by a new credit inflation, the execution of these new financial structures, unthinkable without nationalizations in industry and finance” (Herzog, 1974b).

But this nationalization, warns Herzog, “must not take the form of nationalization, nor open the way to forms of State capitalism, as this will only serve to reinforce the contradictions of economic policy, waste State resources in the crucible of overaccumulation, increase the State-business secondary contradictions”. Based on these considerations, a new Plan of Government can be elaborated and executed under the control of the workers and their organizations, who are progressively responsible for exercising the democratic planning of the means of the State.

The “social-developmentalist” perspective (Bastos, 2012), represented by Philippe Herzog, favors production aimed at the domestic market, consumption by the greatest number of people and state spending on social policies. It is an economic development strategy that does not fully coincide with the horizon of the private company, which, by diversifying profitability in terms of insertion in the world market, does not have a long-term commitment to the priority of the internal market, salaried consumption and expansion of social welfare. The model values ​​economic planning and direct investment by the State in order to improve the efficiency of the national economy and its tax collection base.

This vision of state policy converges with the social reform programs of democratic socialism, supported, in general terms, by the Central Única dos Trabalhadores (CUT) and the Perseu Abramo Foundation (FPA), maintained by the Workers' Party (PT). The demands of workers' representatives tend not to coincide with the goals of the government team. The CUT argues, for example, that the possibility of readjusting the minimum wage at a higher level than the calculations presented by the Government puts the wage policy in the priority position in the national State budget, and from it derives the need to intervene in the fiscal surplus targets , in the interest rate, in the offer of credits, in the exemption of taxes on the productive sector, whose effects would be the stimulus to the consumption and the improvement in the job situation.

* Francisco Pereira de Farias is a professor at the Department of Social Sciences at the Federal University of Piauí and a postdoctoral researcher at Unicamp. Author, among other books, of Reflections on the political theory of the young Poulantzas (1968-1974) (Ed. Anti-capital struggles).


BASTOS, PZ The political economy of new developmentalism and social developmentalism.Economy and Society, Campinas, v. 21, special issue, p. 779-810, Dec. 2012.

HERZOG, Ph.  Economic policy and planning in a capitalist regime. Lisbon: Press, 1974a.

HERZOG, Ph. The popular union and the dominance of the economy. Lisbon: Press, 1974b.

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