Regulation Theory

Regulation theory emerged in France during the 1970s as an extension of Marxist political economy. The theory is especially associated with ideas developed in Michel Aglietta's seminal book A Theory of Capitalist Regulation (1976). In its basic form, regulation theory posits that when capitalism changes over time, new institutions develop to support the prevailing economic system. These clusters of economic and political institutions form distinct societal paradigms during separate phases of capitalist development.

The historical background to regulation theory is the tumultuous end of the 1960s, with its social upheavals and growing economic uncertainties—a period when the capitalist economy appeared weaker than at any point since the Great Depression. However, a decade later, it was clear that capitalism would not disintegrate due to its inherent contradictions, ...