Transnational Capital and Paper Production

Abstract

This chapter examines the progression of the Dutch paper industry during the post-Fordist phase, starting from 1980 onward. By highlighting both active and passive government interventions and economic restructuring within the context of the Dutch paper industry, the chapter challenges the notion that the state withdraws from regulatory involvement in the post-Fordist accumulation regime. State strategies, including the deregulation of market structures to facilitate widespread transnational ownership, neoliberal re-regulative initiatives involving closer collaboration between the public and private sectors for research and development, privatization of public sectors, active and passive financial support for industry demands, and the flexibilization of labor, all aimed at enhancing the international competitiveness of Dutch industries. The chapter clarifies the tensions that arise from the convergence of conflicting class fraction interests, with a focus on industry sustainability, emerging forms of labor precarity, and heightened competition.

Post-Fordism may be summarised as the obverse of Fordism. […] The old oligopolistic firms occupy a smaller proportion of the value chain and establish quasi-market, network relations with a myriad of suppliers, distributors and even direct competitors.

Friedman (2000, p. 60)

What you see now is, there are only a few family-owned companies, the rest are all in the hands of multinationals or private equity. In the last years it is more and more private equity, especially in the North of the Netherlands. People who spend money—risk capital investors—is where all the shit in the world comes from… and all these companies go bankrupt. What they do is, they buy you and after four, five years they sell you again and they cash millions, and millions and hundreds of millions off of it and don’t care about the continuity of the mill. So you’re better off to not fall into the hands of private equity.

Manager in a Dutch paper mill

Post-Fordism is an accumulation regime with a distinct mode of regulation and set of technical and social relations of production, originating in the political-economic conjunctures of the 1970s.¹ The post-Fordist accumulation regime manifests itself in the Netherlands from 1980 onwards.² The transition from the Fordist to the post-Fordist accumulation regime is not linear and coherent, but rather irregular, contextual, and diverting across countries. Nevertheless, conceptual definitions of the main post-Fordist characteristics are essential for understanding the changes the Dutch paper industry underwent since 1980.

The main characteristics of post-Fordism are labor market flexibilization, deregulation and neoliberal re-regulation, transnationalization of production and global value chains, the rise of finance-led accumulation patterns, and deindustrialization.³ During Fordism, many industries still focused on standardized mass production, which resulted in saturated consumer markets in the 1970s in first-wave industrialized countries.⁴ Under post-Fordism, this focus changed in accordance with the rise of cheaper production capacities in newly emerging markets, such as China.⁵ Product specialization and the flexibilization of commodity production, thus, became essential for manufacturing industries to compete in an increasingly globalized market. Consequently, post-Fordist manufacturing operations are based on flexible machines and market-driven, specialized niche products to ensure profitability.⁶

Also labor is gradually being flexibilized in post-Fordism. Rooted in national and supranational labor policies, labor is subordinated to market competitive forces and labor markets are reoriented toward the supply-side.⁷ Labor policies foster “‘flexi-waged, flexi-time, hire-and-fire, and outsourced jobs through self-employed or subcontracted labor, multiskilling of core workers enjoying job rotation, job enrichment and teamwork”, internationalization of managers’ and technocrats’ career-paths, rising dominance of temporary labor-contracts, the individualization and erosion of working-class communities, and the weakening of organized labor; all of which are part of a wider program of deregulation and neoliberal re-regulation in the post-Fordist accumulation regime.⁸ The deregulation of the public sector involves its privatization through selling state shares and listing state-run industries, such as the railway industry, the health sector, the energy sector, and telecommunication sector, on stock markets. Due to these developments, the state is assumed to be retrenching during post-Fordism, leaving previously public as well as private sectors to compete under free market principles without state intervention. At the same time, post-Fordism is marked by waves of neoliberal re-regulation, geared toward the promotion of the competition regime.⁹

Especially the deregulation of financial systems is guided by and itself intensifies finance-led accumulation.¹⁰ Through its deregulation “finance became once more detached from the real economy and liquid capital gained a new transnational mobility and hence exit power”.¹¹ Productive capital situated within traditional manufacturing industries becomes dependent upon finance capital (mostly banks and offshore capital) to sustain its production processes. Financialization, thus, describes “a pattern of accumulation in which profits accrue primarily through […] the provision (and transfer) of liquid capital in expectation of future interest, dividends, or capital gains” instead of previously dominant forms of accumulation, namely trade and commodity production.¹²

Concomitantly, finance and productive capital are transnationalized during post-Fordism.¹³ The loosening of barriers for capital movement and the spatial decentralization of production ownership gives rise to transnational corporations (TNCs). TNCs thrive under the minimization of tax liabilities and the removal of trade and investment barriers, as the resultant transnationalization of production processes allows for the maximization of their global profits.¹⁴ The dynamic interplay between large European and US-American TNCs on the global (financial) market excels competitive forces and, in return, yields the continuation of deregulation of cross-border transactions in the interest of capital agents.¹⁵ Since the 1990s TNCs have outdated former multinational corporations (MNCs), as the majority of large-scale corporations not only operate across national regimes but are embedded in the societal, political, and economic frameworks of the countries they operate in.¹⁶ Unlike other major entities like governments and labor groups, TNCs occupy a unique position: They have the capability to amass resources that allow them to actively participate in political activities while also possessing the ability to navigate multiple, distinct governmental policies, often exploiting regulations that best serve their interests.¹⁷ Furthermore, TNCs’ operations and structures changed under rising globalization in post-Fordism as previously still centralized functions are now internationally dispersed, such as R&D and design.¹⁸

The shift in global profitability from productive to financial capital and the growing reliance of industrial manufacturing companies on liquid capital is essential for the ongoing process of deindustrialization, which marks so-called ‘advanced economies’ in post-Fordism. The rising dominance of specialization, continuous innovation, economies of scope, and rapid responsiveness to consumer markets accelerates the dominance of TNCs and the rise of the service sector, while manufacturing industries are relocated to China and other newly industrialized countries.¹⁹ The process of deindustrialization becomes evident in first-wave industrialized countries through two key indicators: A substantial decrease in the contribution of manufacturing to the overall Gross Domestic Product (GDP) and a decline in the proportion of manufacturing jobs within the total employment sector.²⁰ Under the impact of deindustrialization, several consequences emerge and contribute to its intensification: A reduction in union membership, a decline in the political influence of the working class, the emergence of a more vulnerable and precarious workforce, and the erosion of security within the labor market.²¹ Ultimately, the interplay between deindustrialization and national industrial policies focused on labor market flexibilization limits the ability of labor to effectively organize against (transnational) capital in the post-Fordist era.

5.1 Industrial Policy in Post-Fordism

A variety of scholars argue that the transition to post-Fordism is accompanied by a gradual disembeddedness of markets from states.²² According to them, the past decades are demarcated by laissez-faire state strategies, hereby allowing finance capital to control national market developments as well as the global economy. This state retrenchment thesis follows the “key tenets of neoliberal ideology” by concluding that recent politico-economic developments, such as flexibilization, deindustrialization, and financialization are the foremost results of a ‘silent’ state.²³ However, the historicization of the Dutch paper industry reveals a different dynamic. Despite the transition to post-Fordism, state involvement and industrial policies persist, albeit in altered forms and with different objectives. These factors have played a crucial role in sustaining the Dutch paper industry. By studying the evolving regulatory approach since 1980 in the Netherlands, both direct and indirect market engagements of state authorities become evident.

During the 1980s, the Dutch paper industry experienced a notable expansion in terms of profitability, production output, and investments. Specifically, the number of high-capacity production machinery tripled within a period of eleven years, allowing for an investment of 12 percent working capital on average for meeting operational expenses and short-term debt obligations.²⁴ Three main factors contributed to the industry’s growth at that time: New strategies of capital investment, reduced costs for raw materials (including energy), and decreasing labor costs. I will discuss each one of them at length with a focus on the involvement of the state.

First, already during the 1960s and 1970s the Dutch government initiated programs to foster foreign direct investment (FDI) in the national paper industry.²⁵ While comprehensive data on FDI in the Dutch paper industry during that specific period are not available, other discernible indicators shed light on the industry’s development. These indicators include a noticeable rise in the number of mergers and acquisitions, the prevalence of new investment strategies, and expanding profit margins. These trends suggest that the industrial policy implemented during that time was primarily geared at industrial growth.

A compelling illustration of this can be seen in the efforts of the Ministry of Economic Affairs, which actively facilitated inquiries from US-based companies regarding potential plant locations and labor supply.²⁶ Additionally, the ministry provided various forms of support, such as investment subsidies, grants, accelerated depreciation schemes, and fiscal stimuli. These initiatives further bolstered the industry’s development and underscored the efficacy of the industrial policy in place during that period.²⁷ With the rise in FDI in the 1980s, foreign investors gradually implemented new forms of industrial investment strategies, such as expansion, diversification, and the elimination of competitors, allowing corporations to expand their already strong market positions.²⁸ By the 1990s, strategies of horizontal concentration as well as forward and backward integration became dominant tools to reach even more low-cost market bases.²⁹ Hence, profit margins rose steadily and vertical integration, such as the control of suppliers, distributors, or wholesalers, secured viable market outlets for Dutch paper producers.³⁰

During this time of corporatization and consolidation, foreign investors displayed a primary interest in expanding the production output of Dutch paper mills by capitalizing on economies of scale. The emphasis was on achieving higher efficiency and cost-effectiveness through increased production volume. As the industry progressed, Dutch paper mills began exploring avenues beyond mass production. They ventured into strategies that allowed them to distinguish their products from competitors and cater to specific market segments with unique needs. Thus, mass production eventually evolved into strategies that incorporated product differentiation and specialization in niche markets.³¹ This shift expanded the industry’s scope of operations and opened up new opportunities for growth and profitability.³²

These trends in investment strategies were closely intertwined with the evolving politico-economic landscape of European integration during that period. In 1987, the Single European Act came into effect, eliminating investment and production barriers among member states while also aligning their respective national regulations to foster competition.³³ During the same period in the Netherlands, the center-right Lubbers I cabinet (1982–1986) enacted policies focused on deregulation, privatization, and decentralization. These measures lowered barriers for services, trade, and capital—particularly financial capital—to move more freely, and made it easier to exploit labor. The policies of the Lubbers I cabinet marked the final break with the cabinets of the 1970s, which had still followed state-aid strategies and used public tax money to revitalize struggling national sectors. In line with the Single European Act, the Lubbers I cabinet propagated the motto “more market, less government” (“meer markt, minder overhead”), herewith legitimizing its strategies of deregulation, neoliberal re-regulation, and privatization.³⁴

This governmental strategy, however, did not lead to a decrease in state involvement, but rather a transformation in its nature and scope. Instead of corporatist tendencies in the form of close cooperation between trade unions, business associations, and government, which marked Dutch post-war industrial policy, the Dutch government focused on a market-led recovery of national industries by “bringing wage, energy and environmental costs under control, improving the operation of labor markets, simplifying regulations and stimulating investment” from 1980 onwards.³⁵ These changes were particularly conducive to foreign investments in Dutch industries. Through increased shareholding in the Dutch paper industry West European, Scandinavian, Finnish, and North American corporations pursued consolidation strategies in order to strengthen their European market positions.³⁶ In effect, the Dutch paper industry was no longer ‘Dutch’ in terms of ownership as capital networks extended far beyond the Netherlands.

Furthermore, the Dutch government, with backing from employer associations, no longer considered the criticisms raised by labor unions, especially concerning significant cutbacks to the welfare state, to be pertinent or impactful. The alignment between the government and employer associations successfully undermined the impact of labor unions’ concerns and limited their ability to effectively challenge the implementation of austerity measures.³⁷ Indeed, the Dutch government put in place a legal framework that primarily safeguarded the interests of corporate shareholders, rather than considering the broader spectrum of stakeholders, including workers and consumers.³⁸ Especially, the vermarkting (sell-out) of businesses and marketing strategies by the state played into the hands of the financial class fraction and succumbed businesses to the volatility of the same. In the case of the Dutch paper industry, the increase in foreign industrial investment commonly took place in the form of M&As, also referred to as brown-field investments. The new center-right cabinet considered economic concentration in the form of M&As a suitable strategy to distribute economic risks, profit from economies of scale and combat illegal forms of collaboration, such as cartels and other collusive practices, which were no longer tolerated and seen as a major crime against consumer-welfare.³⁹

Particularly in the context of the Dutch paper industry, M&As were considered a solution to the periodic issue of overproduction, which continually haunted the industry. The cyclical sensitivity of the industry to overproduction is closely linked to its capital intensity.⁴⁰ Investments into production facilities are comparably high in the Dutch paper industry, but necessary for the expansion of production under rising demand.⁴¹ Unable to coordinate their investments with precision, “[d]ifferent companies tended to invest at the same time, causing a discontinuous growth of production capacity, during which periods of overcapacity occurred”.⁴² Therefore, buying production capacity rather than building it became the guiding investment principle of the 1980s, herewith allowing for the maximization of profits by circumventing the industry’s cyclical character.

The efforts of de- and re-regulation under the Lubbers I cabinet had an overall positive effect on the Dutch paper industry’s profit growth during the 1980s. The deregulation of the public sector involved its privatization through selling state shares and listing state-run industries, such as the railway industry, the health sector, the energy sector, and telecommunication sector on stock markets. The privatization of large parts of the energy sector led to a considerable increase in the number of power plants. In turn, this caused a reduction in energy costs of about 50 percent for the Dutch paper industry, substantially contributing to the industry’s profit growth in the 1980s.⁴³

In addition, the government pursued re-regulation aimed at establishing new forms of collaboration among state agents, industrial companies, and research institutes to address the complexities inherent to innovation processes.⁴⁴ An illustrative example of this approach was the financial state support provided to the VNP, the national lobbying organization of the Dutch paper industry. This funding enabled the VNP to initiate several projects aimed at reducing energy costs, increasing the utilization of waste paper, and minimizing ecologically undesirable pollution within the Dutch paper industry.⁴⁵ These projects fostered collaboration with the Nederlandse Organisatie voor Toegepast-Natuurwetenschappelijk Onderzoek (TNO, Netherlands Organization for Applied Scientific Research), a sectoral organization operating under public law. The partnership between TNO and VNP resulted in the development of less risky and costly methods for the treatment of recovered paper, surpassing the profitability of previously available techniques. This cooperative effort exemplified the government’s commitment to supporting innovation and finding sustainable solutions within the industry.⁴⁶

A crucial factor contributing to the profit growth of the Dutch paper industry during the 1980s was the forced reduction in labor costs, which aligned with the broader trend of labor market flexibilization in the post-Fordist mode of regulation. Two ministerial reports from 1979 and 1980 that criticized Dutch industrial sectors for being outdated and underperforming are of the essence here. These reports sparked public concern, which in turn provided ample opportunity for the Lubbers I committee to implement their labor deregulation policies. Comprised of top government officials, independent experts, and board members of transnational corporations (TNCs), the cabinet’s policies included labor flexibilization and wage restraints. These measures were intended to enhance the competitiveness of Dutch industries, including the paper industry, by reducing labor costs. The implementation of these policies aligned with the broader post-Fordist approach, emphasizing the adaptability and flexibility of labor markets. While these measures contributed to the profitability of the Dutch paper industry, it is important to note that they also had implications for labor’s ability to organize and negotiate for better working conditions and wages.⁴⁷

The cabinet’s official goal in restructuring governmental activity was to stimulate entrepreneurial activities and rise national market competitiveness by decreasing bureaucratic hurdles, improving efficiency, and lowering public expenditure.⁴⁸ However, the adopted Major Operations Program actually included (1) deregulation to “further market liberalization and competition”, (2) de-nationalization to “economize on the state budget and to strengthen the market sector”, and (3) privatization to “trim[…] the welfare state and establish[…] a smaller and more effective public sector”.⁴⁹ Thus, the industrial downswing of that time was the basis for legitimizing the intensification of post-Fordist modes of regulation during the Lubbers I cabinet.

In 1990, the chairman of the earlier Lubbers I deregulation committee was appointed secretary-general of the Department of Economic Affairs under the coalition of Social Democrats and Christian Democrats—the Lubbers III cabinet (1989–1994)—heralding neoliberal re-regulation as a political priority.⁵⁰ In alignment with the European market integration, the Ministry of Economic Affairs redistributed governmental spending in favor of overall deregulation, increased labor market flexibility, and intensified competition policies. Shortly after, in 1994, the ministry implemented a new project called Market Operation, Deregulation and Quality of Legislation, which was not just aimed at legislative deregulation in favor of businesses, but gave businesses an actual right to a say in the re-regulation of, for example, environmental laws.⁵¹

These developments were closely intertwined with the transnationalization of finance and productive capital during post-Fordism. This rise of TNCs represents the emergence of the transnational capital class fraction, consisting of “four main fractions: TNC executives, globalizing bureaucrats, globalizing politicians and professionals, and consumerist elites, including merchants and media”.⁵² TNCs “have become dominant forces in the transfer of capital, production, and technology in the global political economy”, shaping industries, such as the Dutch paper industry, during post-Fordism.⁵³ Deregulation of cross-border transactions in the interest of TNCs increased steadily while large European and US-American corporations started dominating the global (financial) market.⁵⁴ By 1990, more than 40 percent of the Dutch industries were foreign-owned, and four of the top ten corporations in Europe continued to acquire production units in the Netherlands.⁵⁵

“[C]ozy relationships between government, big business, labor [as in pillarized unions] and the financial community” benefitted the emergence of mega-mergers, such as KNP and Bührmann-Tetterode in 1993, and accelerated the process of transnationalization of ownership and production processes.⁵⁶ Executives of vastly growing Dutch-based transnationals, such as Phillips, Unilever, AkzoNobel, Heineken, and Royal Dutch Shell were actively involved in Dutch policy-making through chairing industrial policy advisory committees and, thus, constituted an increasingly powerful transnational class fraction.⁵⁷ They would suggest the implementation of business-friendly projects such as the technolease scheme, which allowed for “indirect state subsidy amounts” to enable big transnationals to financially exploit their “undepreciated know-how” at little financial risk.⁵⁸ By the end of the 1990s, a small number of transnational corporations, namely Stora-Enso, Norske Skog, Kappa Packaging, and SAPPI, who all belonged to the top 10 TNCs of Europe at that time, held a market share of up to 85 percent in the Dutch paper industry.⁵⁹

From 2000 onwards, the Dutch paper industry shrunk in size and profit as shareholders followed asset-stripping strategies to seek short-term profitability by purchasing plants and closing them down respectively. The disengagement of international investment capital from the Dutch paper industry and the ultimate moving of industrial activities abroad, namely the process of deindustrialization, left only four out of twenty-seven companies of the Dutch paper industry Dutch-owned at that time.⁶⁰ Even though the industry survived by staying located within the national borders of the Netherlands to a certain extent, deindustrialization remains the industry’s number one threat until today. To “manag[e] the process of internationalization […] in the hope of minimizing its harmful domestic repercussions and/or of securing maximum benefit to its own home-based transnational firms and banks” is the main goal of post-Fordist industrial policy and industry associations alike.⁶¹ Thus, efforts of the Dutch government and the VNP to revitalize national industries by convincing foreign investment to stay in the Netherlands through promoting and improving the national conditions for manufacturing paper and board remain fundamental to the survival of the Dutch paper industry.

5.2 Network Cooperation

The historical conjuncture when the post-Fordist accumulation regime gained prominence in the Netherlands was influenced by the surge of neoliberal ideas advocating for a competition regime. Entailing the prohibition of cartels and the intensified enforcement of competition laws, the establishment of the Nederlandse Mededingingsautoriteit (NMa, The Dutch Competition Authority) in 1998 resembles the full-blown arrival of the post-Fordist competition regime in the Dutch political economy. Dutch cartel legislation and, more specifically, the establishment of the NMa are essential for understanding how illegalized yet widespread practices of cooperation, like cartels, were substituted by network cooperation to foster knowledge sharing as well as product and process innovation, safeguarding the industry’s survival during post-Fordism.

During the early 1980s, there was a notable absence of prosecution against cartels, leading to the characterization of the Dutch economy as a ‘cartel heaven’. However, as international attention grew toward numerous Dutch cartel cases, it triggered a gradual accumulation of pressure from the European Commission (EC) on the Dutch authorities regarding cartel prosecution at the national level.⁶² These pressures stemmed from the implementation of an extremely lenient policy toward economic consolidation at the European Community level in 1990.⁶³ Even though early revisions of Dutch competition policies led to the registry of hundreds of cartels at the Ministry of Economic Affairs in the beginning of the 1990s, the national adaption of competition regulation was rather slow. It was not until 1994 that the Netherlands fully embraced EC cartel regulations by introducing a comprehensive ban on, price and market cartels, merger control, and anti-competitive market dominance abuses.⁶⁴ Nevertheless, hundreds of cartels persisted in operating illicitly, resulting in a substantial level of market concentration within the Dutch paper industry during the latter half of the 1990s.⁶⁵ Consequently, the reputation of the Netherlands as a haven for cartels endured, and the industrial supremacy of large incorporated manufacturing operations continued to expand.⁶⁶

By 1998 the Competition Act, namely “[…] a series of anti-trust measures [and] a full-fledged framework of merger control provisions”, was implemented and, subsequently, the NMa was founded under the Ministry for Economic Affairs.⁶⁷ As competition laws were enforced more rigorously, especially through the prosecution of collusive practices like price-fixing and market sharing, the end of the Dutch cartel haven was approaching. Active prosecution of cartels sincerely threatened Dutch industries’ competitive advantages in a globalized market as collusive practices had been a common and tolerated form of cooperation in Dutch industries. In 1998, the at that time State Secretary for Economic Affairs van Rooy commented on the adaption of EC cartel regulation as follows: “[…] Competition policy had to find a balance between combating cartels, on the one hand, and stimulating productive forms of cooperation, on the other”.⁶⁸ In fact, the intensification of the competition regime and subsequent rise in prosecution of cartels generated an industrial policy whereby R&D type of cooperation sponsored by the state became more prominent. Hence, competition policy in the Netherlands during post-Fordism was always also industrial policy.

It is in this context that the Kenniscentrum Papier en Karton (KCPK, Paper and Board Knowledge Centre) emerged to facilitate cooperation within the Dutch paper industry: Since the prosecution of cartels as well as the intensification of merger legislations posed genuine threats to the industrial activities and economic performance of the Dutch paper industry, the KCPK became the Dutch paper industry’s hub for network cooperation. Partially state-funded, the KCPK stresses the difference between cooperative projects for technological innovation among companies of the Dutch paper industry and actual cartel practices, which are now legally banned on national and EC-level due to the intensification of anti-collusive legislations.

The establishment of the KCPK in 1998 was, thus, more than convenient for the declining industry. Until that point, the companies of the Dutch paper industry occasionally cooperated in innovation projects with the TNO and the Wageningen University & Research (WUR). This close cooperation between publicly financed organizations on the one side, and private companies, on the other, laid the foundation for the KCPK to emerge. After extensive discussions between managers of the TNO, WUR, and the board members of the VNP, it was decided that the Dutch paper industry was in need of a knowledge center. In 1998, all three organizations (VNP, TNO, WUR) signed an agreement to finance the operations of the KCPK and its projects to one-third. This funding agreement was part of further long-term agreements signed between the VNP and the Ministry for Economic Affairs during the 1990s.⁶⁹

Through the establishment of the KCPK, cooperation continued despite the rising suspicion toward collusive practices.⁷⁰ The incentive behind initiating the KCPK was to facilitate innovation projects between companies of the Dutch paper industry in order to provide joint knowledge outcomes under optimal use of resources. The KCPK did not and still does not provide its own laboratory for carrying out research. Instead, the KCPK manages research projects by distributing different research tasks to the actual mills or R&D centers of the participating companies. Herewith, the KCPK does not compare to research institutes for paper production innovation in other countries such as Germany, France, and Norway. These are, in contrast, privatized, corporate entities, which provide contracted services to paying customers.

If, for example, a paper company in Germany wishes to test a prototype for a more efficient use of fibers, but has no internal R&D laboratory or means to run these tests within the actual mill, they pay the respective research institute, in this case the Papiertechnische Stiftung (Paper Technology Foundation), to run the tests for them. In the early 2000s, a comparable organizational restructuring was deliberated for the KCPK, proposing to place it under the authority of the WUR, essentially transforming it into a research institute without its previous independent status. As per one interviewee, this move could have jeopardized the KCPK’s primary role in securing national and international funding for research initiatives within the Dutch paper industry. By opting to retain the initial organizational setup of the KCPK, the uninterrupted progression of research projects, primarily benefiting a select group of private companies and aiming to enhance the profitability of the Dutch paper industry, was made possible.

During the post-Fordist era in the Netherlands, public procurement strategies, including the one supporting the KCPK, were prevalent forms of state regulation in the industrial sector. State authorities adopted a reactive and less transparent approach to financially supporting collaborations through the KCPK. Instead of allocating public funds to industrial projects based on a clear strategy, they adhered to the funding agreement of the KCPK, which involved a one-third contribution from each party without a maximum threshold. Consequently, the KCPK initially secured funding from Dutch paper industry companies and then approached TNO and WUR to match this amount. Only after this matching process, the funds were allocated to one of the two project streams of the KCPK. This extensive funding availability led to a growth in staff numbers from an initial 12 to 30 by 2001, resulting in increased costs for maintaining the KCPK as an independent entity.

Organizations like the KCPK were potentially liable to fall into the category of competition-distorting (semi-)government organizations, according to EU competition rules.⁷¹ The fact that the KCPK was established as a knowledge center for R&D projects, but did not and still does not feature its own R&D laboratory, could have potentially made it into a case of “[u]nfair competition from entities related to the government”.⁷² Yet, the NMa was not able to prosecute unfair competition practices, if conflicts of interest arose with its superordinate, the Ministry of Economic Affairs.⁷³ Due to its lack of independence, the NMa was not able to provide unobstructed prosecution of collusive practices. To be able to do so in the future, it needed to become an independent governing body.⁷⁴ Until that happened, it was “most important”, as the Director General of the NMa was paraphrased in a 1999 OECD report on the role of competition policy in the Netherlands, “[…] that NMa be, and appear to be, independent in its decision-making. [To avoid] bureaucratic disputes and embarrassments, […] it will be focusing now on cases it can uphold against a challenge in court”.⁷⁵ Thus, it was a sole matter of time until the NMa became independent, possibly investigating projects facilitated by the KCPK as competition distorting (semi-)government organizations.⁷⁶

The termination of the all-to-one-third funding agreement of the KCPK in 2004 was well-timed, since the coming independence of the NMa in 2005 was foreseeable by policymakers and industrial agents alike—also for the Dutch paper industry. Already from the late 1990s onwards, the later director of the KCPK maintained close contact with the senior policy advisor and project manager of the Ministry of Economic Affairs. Through such close state-industry relations important legislative changes, like the NMa’s independence, were sure to be considered in the substantive restructuring of the KCPK. Initially, a steady stream of state funding was guaranteed until the all-to-one-third funding arrangement for the KCPK concluded in 2004. Additionally, the board of directors at VNP had ample time to reorganize the legal framework of the KCPK to align with both European Commission-level and national competition regulations, while also prioritizing the industry’s profitability through the promotion of collaboration.

In 2004, the board of directors of the VNP, which at that time was comprised of one-third of all Dutch paper companies’ executive managers, decided to privatize the KCPK via a membership format. Hereby, the KCPK could persist in advancing the interests of the Dutch paper industry, all the while avoiding classification as a competition distorting (semi-)government entity. The privatization of the KCPK implied that 30 percent of all approved project costs were financed through a new state subsidy system. The remaining 70 percent of project costs were paid by the respective organizations participating in the project. This new legal construction of the KCPK aligned with statutes for industrial project subsidies, which had been passed already in 1996 and allowed different ministries, including the Ministry of Economic Affairs, to allocate subsidies to industrial innovation projects that were in line with national guidelines for competitiveness as well as ecological standards.⁷⁷

The new legal structure of the KCPK was not unique. Similar public procurement-based R&D structures were replacing all sorts of public–private-partnerships in the Netherlands from 2000 onwards. This switch in post-Fordist industrial policy was legitimized by claiming “recognized public interest in certain kinds of advances”.⁷⁸ Hence, contemporary public procurement strategies are frequently portrayed as considering the public’s interests in terms of industrial innovation. In reality, these strategies function as a means to distribute public funds to companies with minimal oversight and bureaucratic administration, similar to the approach taken with the KCPK. Consequently, in the post-Fordist era, industrial policy shifted from state support in the form of co-funding, as seen with the KCPK until 2004, to state support under the guise of public interests, exemplified by the present state subsidy system.

As a non-profit organization, the KCPK does not qualify for those national and EU funds, which are exclusively available to for-profit entities, such as SMEs or corporate businesses. In 2004, the KCPK, thus, established a subsidiary, Bumaga BV, which runs under the accounting template of an industrial, for-profit company. Bumaga and the KCPK list the same, eight employees on their websites.⁷⁹ The offices of the KCPK and Bumaga are both registered at the same address. Even though legally Bumaga is a private company and the KCPK is a foundation, the function and aim of both organizations concerning the Dutch paper industry are very similar, if not identical. On the webpage of Bumaga is stated that the company focuses on product and process innovations through “[…] project management, project support, government support, financial support, market explorations, market introductions and patents and licenses for new technologies”.⁸⁰ Similarly, the KCPK aims at generating funding for the purposes of innovation, longevity, and capital growth for (companies of) the Dutch paper industry.⁸¹

Various funding options at both the national and EU levels cater to different types of applicants within the manufacturing industry. Some are exclusively for collaborative innovation ventures among corporate entities, while others are reserved for projects that include non-corporate entities like research institutes or foundations, such as the KCPK. Therefore, it is advantageous for the KCPK to seek funding as either a foundation or a private company. As a result, the KCPK tends to be more frequently engaged in process innovation projects, whereas Bumaga is more inclined toward product innovation projects.

The above explications show, how cooperation changed under the post-Fordist competition regime. The rising suspicion and actual prosecution of collusive practices through the NMa placed pressures on manufacturing industries, especially on already struggling ones, like the Dutch paper industry. In light of the changing relations of (re-)production, the influence of the competition regime, the increasing transnational ownership, and the ongoing deindustrialization in the post-Fordist era, novel modes of cooperation and industrial policies emerged. These enable the state to allocate public funds toward industrial projects. Fundamentally, recently established network organizations such as the KCPK and Bumaga are a proactive response to address the challenges confronted by manufacturing industries in the post-Fordist era. As the subsequent section illustrates, cooperative efforts to tackle global competition persist even beyond the scope of network organizations like the KCPK.

Current forms of cooperative and competitive practices for the Dutch paper industry exist on several levels: The local, national, and the global level. Locally, cooperation between Dutch paper mills themselves and between Dutch paper mills and other industrial sites takes place regularly and partially in secret. Examples cover a vast spectrum of different forms of cooperation. They range from harmless lending of machinery to secret cooperative endeavors, in which companies abuse their powerful positions by imposing vertical constraints on suppliers’ sales prices. For example, one interviewee admitted to have participated in a joint project with direct competitors for innovating end-products. They also explained that practices of jointly forcing suppliers to lower their prices are common in the industry. Other interviewees reported on less harmful and competition-stifling practices, such as lending machinery or expertise in case of emergencies between mills.

Nevertheless, also these ‘harmless’ practices are often secret as some of these mills belong to globally competing TNCs and their CEOs would not approve of such cooperation. Interestingly enough, all these forms of cooperation are based on individual relationships. Interviewees pointed to the importance of trust and respect for the success of project cooperation. One interviewee explained how manifold cooperation projects at their mill are not based on contracts, but solely on personal trust and respect. Another interviewee described how trust enables relationships to outlast actual projects and how trusting, personal relationships lead to sharing information outside of formal agreements.

Essential to these trusting and often personal relationships is that many of the employees of Dutch paper mills, especially in historically grown paper manufacturing regions such as Gelderland (overlapping with the once famous paper region of the Veluwe), have been working in this industry and partially the same mill for over forty years. The low turnover rate, also in the case of white-collar workers, is essential for these everyday forms of local cooperation. As one manager mentioned in an interview, they know each and everyone in the Dutch paper industry and in order to prevent cartel structures and personal cooperation, the whole industry personnel would have to be replaced as most of them maintain special, personal bonds. So even though CEOs officially do not encourage cooperation based on personal relations, an interviewee confirmed that “the cozy part [is] still there”. Other interviewees agree, that, at times, these personal relations can negatively affect formal cooperation in innovation projects as “the click” determines whom to choose as a partner for specific projects and whom not to choose. Despite these personal preferences for cooperation partners, one interviewee states that if “the boss imposes on you to cooperate with someone, you just do it”. Hence, personal relationships between paper mill employees, especially white-collar ones, are pivotal for both short-term solutions of manufacturing emergencies as well as abuse of powerful market positions. Yet, they can be detrimental to top-down initiated, formal cooperation in innovation projects.

Cooperation on the national level is often more formalized than on the local one. Examples are the public swimming pool Coldenhove, which gets the waste heat of the paper mill Coldenhove as well as other projects, in which paper mills and other organizations try to make use of the mill’s waste heat with the support of the provincial government.⁸² Another example is a shared wastewater treatment plant, which originated as a subsidiary of three paper mills in Gelderland (Mayr-Melnhof Eerbeek BV, DS Smith Paper De Hoop Mill, and Coldenhove Papier BV); its foundation was supported by the Surface Water Pollution Act in 1970.⁸³ Also the establishment of regional innovation parks to raise the efficiency in energy and water resource exploitation is exemplary of cooperation on the national level.⁸⁴

In line herewith, government authorities and the VNP held the Target Group Negotiations to positively influence the competitive environment of the Dutch paper industry by measures ranging from the implementation of severe “anti-pollution standards to the subsidizing of cost-intensive restructuring programs”.⁸⁵ With direct support of the state, the VNP focused on developing and improving energy-saving technologies, on finding new raw material sources, and on intensifying their relations with supply chain organizations to attract international investments.⁸⁶ Additionally, the Ministry of Economic Affairs and the VNP jointly signed a long-term agreement on three major industry topics: Sustainability (energy reduction), process and product innovation, and networking to build vital connections with other national and international industries as well as municipalities, research facilities, and NGOs.⁸⁷ In alignment with such installations, the character and future vision of the Dutch paper industry was re-defined into prioritizing energy-saving innovations to stay competitive. Another example of a state-industry joint venture is the agreement between the government and a particular paper mill in the Netherlands to receive low-price timber. This timber was originally produced under governmental lead to manufacture klompen (traditional Dutch shoes) at the beginning of the twentieth century. An interviewee explained that when the market for klompen decreased drastically, the government was looking “for an industrial application for this forest and […] made a joint venture with this mill” in the early 1970s. This joint venture still runs today.

In summary, cooperative practices at the national level align with industrial policies that involve state-industry agreements aimed at fostering technological innovation to enhance the international competitiveness of the Dutch paper industry. Consequently, the significance of cooperation at the national level did not diminish in the post-Fordist era. In contrast, competition notably decreased at the national level, with most competitive activities occurring on a global scale within the Dutch paper industry. Both, the sustained significance of cooperation as well as the decline of competition on the national level are effects of the industry’s transnationalization and subsequent deindustrialization during post-Fordism.

The transnationalization of capital, materializing in, among others, the mega-mergers of the 1990s, led to the domination of foreign TNCs above SMEs and family-owned domestic production units.⁸⁸ Due to this development, market shares of specific paper branches in the Netherlands are highly concentrated. In branches such as light-weight coated paper and newsprint manufacturing, the five largest producers covered a market share of up to 85 percent in the early 2000s.⁸⁹ By 2005, the remaining 27 paper mills in the Netherlands were owned by 17 companies, of which 16 belong to TNCs; in 2016, the number of paper mills further decreased to 21. The challenges arising from the transnationalization of production and ownership, namely the decreasing number of Dutch paper mills, actually reinforce the importance of the industry’s national identity. This is why the national aspect of paper manufacturing is still relevant, despite the fact that the industry is almost entirely transnationalized in terms of ownership.

Industrial strategies of the VNP are geared toward developing, stressing, and strengthening a national identity to convince investment capital to stay within the spatial borders of the Dutch state. This is also visible in the continuous reference to the Dutch paper industry by employees of the industry or at industry events: The emphasis on national identity in papermaking and the continued emphasis on cooperation at the national level are only possible in the post-Fordist era, which is characterized by increased competition because very few of the remaining paper mills in the Netherlands directly compete in terms of consumer markets. In fact, interviewees confirmed that Dutch paper mills foremost compete with foreign paper mills of the same or other TNCs for market segments instead of one another. This is a common problem associated with the rise of TNCs in the global economy, as “[…] TNCs can deploy influence over their subsidiaries in ways less available to domestic firms, notably through ‘coercive comparisons’ between sites in different countries”.⁹⁰ One of the interviewed managers indirectly referred to this dilemma and described a recent case of market consolidation in the Dutch paper industry, in which foreign investors bought paper mills in the Netherlands as well as in new-growth markets, to subsequently shut down the less profitable production site to decrease competition.

Such forms of intra-organizational competition, namely Dutch mills competing with foreign production sites of their main shareholding TNC that focus on similar consumer markets, are further infused by financialization. Liquid capital follows the harsh market carvings of asset-stripping strategies, private equitization, and debt-led risk investments.⁹¹ These trends represent a big threat to the Dutch paper industry. Interviewees describes that the industry “get[‘s] eaten up by the world around [and] by bigger countries, [leaving] rising productivity [as] the only way to survive: faster, more, cheaper”. One interviewee, belonging to the older managerial generation of the Dutch paper industry, describes private equity capitalism as “absolute crazy”, “extreme”, and the source of “all the shit in the world”, explaining that no one cares about the continuity of the mills anymore, but only about short-term profit maximization. Spurred by the threats of relocating production sites to new-growth markets in Asia and South-America, the decreasing number of Dutch paper mills goes hand in hand with a rise in niche-focused production.⁹²

To conclude, the number one challenge for the Dutch paper industry during post-Fordism was to keep foreign investment located within the Netherlands. The answer of the dying Dutch paper industry to the threat of global competition under intensified anti-cartel legislation remains similar to what it has always been: Cooperation on the local and national levels. To not get busted by national and supranational anti-collusion bodies, the legitimate label for cooperation in post-Fordism is network. Networks, aimed at innovation, connect national paper producers with (inter-)national research centers, relevant government organizations, other national sectors of suppliers and buyers, and international paper producers. These networks do not only replace cartels in the Dutch paper industry but they balance the contradictory dynamics of competition-based cooperation. In times of anti-cartel legislation and European integration, new industrial policies serve the purpose of justifying such networks. Overall, cooperation remains an essential aspect of industrial survival in post-Fordism.

5.3 Circular Economies

During post-Fordism, technological innovation foremost revolves around a drastic increase in the speed and scale of papermaking machinery. In the Netherlands, the total number of paper and board machines decreased by 11 between 1993 and 2002.⁹³ Twenty machines, which produced less than 50,000 tons of paper per year, were shut down and nine machines, which produce more than 50,000 tons of paper per year, were newly established.⁹⁴ This rising speed and scale of paper machines placed the Netherlands as eighth of all 90 CEPI paper production states worldwide in terms of annual production output between 1993 and 2002.⁹⁵ Worldwide, smaller-scale paper machines were shut down in order to compensate for the implementation of large-scale ones; in 2003 the largest European paper machine was established in Belgium producing 400,000 tons of paper annually.⁹⁶

In addition to increasing the speed and scale of machinery, the search for new raw materials and energy sources became fundamental to the survival of the Dutch paper industry during post-Fordism. Newly emerging paper producers in several South-East-Asian countries quickly started to dominate the global paper market due to cheaper access to raw materials and energy sources than elsewhere in the world. Thus, independence from importing raw materials continued to be essential for the profitability of the Dutch paper industry.⁹⁷ As a result, not only the already well-established development of paper recycling, but topics such as efficient energy usage (and, thus, energy reduction) as well as the re-usage of primary waste streams through integral chain management and resource circularity became the number one targets of state-industry cooperation during post-Fordism in the Netherlands.

Strategies such as integral chain management and resource circularity demand cooperation between suppliers, buyers, state agents, research facilities, and end-consumers. In the last two decades, ideas of finding cooperation partners to develop cradle-to-cradle systems and entire chains for reusing residuals became prevalent. According to interviewees, “you just can’t do innovation alone” became a widely proclaimed principle in the Dutch paper industry. At the same time, rising suspicion toward collusive practices as well as competition-led market structures undermine cooperation for technological innovation in so far as interviewees admit that it is guided by the credo: “The first one who will build it, gets the profit”. Consequently, cooperative endeavors for the sake of technological innovation are caught between the pressures of competition on the one side and the need for cooperation on the other.⁹⁸ It is in this context that the KCPK’s focus on sustainability evolved as a solution to this complexity.

The focus of the KCPK on sustainable innovation is embedded in a wider agenda on the energy transition of the European Union as well as the Netherlands. At the beginning of 2000, the Ministry of Economic Affairs developed a national program for energy transition that covers multiple sectors as part of The Fourth Dutch National Environmental Policy Plan (NMP4).⁹⁹ Even though the Dutch paper industry is “bio-based”, meaning that it is relatively sustainable as it uses renewable and recyclable raw materials, it is one of the largest consumers of fossil fuel in Europe.¹⁰⁰ The overall goal of the NMP4 was to decrease energy usage by 50 percent by 2020 and foster the transition to low-carbon energy usage.¹⁰¹ Part of this policy plan is the Dutch program ‘circular economy’, initiated by the Ministry of Infrastructure and Environment in cooperation with the Ministry of Economic Affairs in 2016.¹⁰² The circular economy program seeks to align industrial production cycles with resource circularity as found in natural ecosystems by fostering close cooperation between government agents and representatives from science, NGOs, and business.¹⁰³

Circular economy, indeed, describes the minimization of using “the environment as a sink for residuals [and]—perhaps more importantly—[…] virgin materials for economic activity”.¹⁰⁴ The business-friendly adaption of this buzzword in the Netherlands and elsewhere follows a contrary logic. As stated in the circular economy program of the Netherlands,

[t]he circular economy also presents our country with plenty of (economic) opportunities. Innovation creates opportunities for existing businesses, for newcomers (start-ups), and for science. […] The circular economy can thus make a significant contribution to the future earning capacity of the Netherlands and Europe. The Netherlands has a good starting position to capitalise on these opportunities. […] The Rabobank has estimated that a circular economy can lead to extra growth in GDP ranging from 1.5 billion euros (in a business-as-usual scenario) to 8.4 billion euros (in the most circular economic scenario).¹⁰⁵

Discourses on circular economy and sustainability within and beyond the Dutch paper industry are predominantly guided by principles of profitability and non-fiscal economic advantages, which are to be realized through the ample application of new business models, new forms of labor exploitation, and efficient resource access as well as usage.¹⁰⁶ This is not surprising, since industrial policies continue to follow the basic capitalist principles of growth and profit in post-Fordism.¹⁰⁷ The circular economy program is based on the idea “[…] that virtually any social problem is subject to a technical and technological fix”, ultimately succumbing ecological sustainability to economic sustainability.¹⁰⁸ Current environmental programs are, thus, tools to legitimately allocate public money to innovation projects, which ease the way for industries to stay competitive while implementing a minimum of national as well as supranational ecological standards.

Concretely, the Dutch practice of guiding national industries toward the sole reliance on renewable energy and bio-based raw materials is an instrument to keep Dutch industries internationally competitive. The subsidiary of the Ministry for Infrastructure and Environment called Nederland circulair! (Circular Netherlands) brings it to the point by stating that the existing possibilities for reusing and recycling raw materials only allow for manufacturing third-rate products, which in turn leads to the annihilation of millions of Euros every year. Ultimately, the Dutch circular economy program exemplifies how the role of politics has been “[…] reduced to finding the technical means to achieve goals (e.g., economic growth) that in themselves are understood to lie outside the realm of politics”.¹⁰⁹

Also the KCPK, as the Dutch paper industry’s innovation hub, is entrenched with the post-Fordist buzzwords of circular economy and sustainability. The circular economy program is a tool to increase the Dutch paper industry’s economic sustainability, rather than facilitating its growing ecological sustainability.¹¹⁰ In line herewith, the KCPK claims that most of its innovation projects lead to economic efficiency and environmental performance.¹¹¹ Hence, whatever is environmentally friendly needs to be economically profitable first. The primary focus of the KCPK is on technological innovation to drive the industry’s international competitiveness and (transnational) capital growth, thus, aligns well with the Ministry’s circular economy program.

Concluding, the agenda of economic sustainability underlies both the purpose and impact of the circular economy initiative by the state as well as the herewith-funded innovation projects as facilitated by network organizations such as the KCPK. Ultimately, the label of sustainability legitimizes the allocation of public funding to networks geared at industrial survival and economic sustainability.¹¹² Thus, in post-Fordism technological innovation first serves the purpose of enhancing companies’ competitive advantage, profit maximization, and cost efficiency by improving production processes and fostering market-driven product specialization, and only then serves the purpose of increasing industries’ ecological sustainability.¹¹³ As long as technological innovation is propagated as the most important factor for economic growth, organizational strategies aimed at improving environmental sustainability will remain rooted in the capitalist rationality of granting primacy to profit and growth above all else.¹¹⁴ In fact, ecological sustainability and circular industries are at best side-products of transnational capital accumulation through market-driven product specialization and efficiency-driven process innovation under the agenda of economic sustainability.¹¹⁵

5.4 New Forms of Precarity

During post-Fordism, the transnationalization of production and ownership paired with the dynamics of financialization concurs with the decline in labor union density in the Netherlands and beyond.¹¹⁶ Through a closer look at the reproduction of precarious working conditions alongside the rise of the managerial middle class, the racialized economy of the capitalist mode of production appears relevant to the erosion of working-class cohesion in post-Fordist Netherlands.

Even though the weakening of labor unions’ bargaining power from 1980 onwards is undeniable, labor-capital relations in the Netherlands are often romanticized as a successful example of the polder model. The polder model describes the consensus-based culture between dominant agents of labor, capital, and state during early post-Fordism. Many scholars, politicians, and media outlets mystified the Wassenaar Agreement of 1982 as a consensus-based wage restraint, which induced job and economic growth, feeding into the ongoing polder model propaganda.¹¹⁷ Starting with the Lubbers I cabinet in the 1980s and continuing past the Lubbers III cabinet in the 1990s, “competitiveness has been considered as the central key to economic and employment growth” and “wage restraint [as permitting] enhanced international competitiveness […] thus creat[ing] growth in output and employment”.¹¹⁸ Heralding labor rights destruction as the only way to secure capital accumulation and, ironically, rising wealth for all, is quite essential to post-Fordist labor market deregulation and competition-centered discourses.

As a prime example, the Wassenaar discourse, which propagates a Dutch culture of consensus between labor, capital, and state, is a farce. First, the various Wassenaar ‘agreements’ of the 1980s and 1990s coincided with decreasing numbers in union membership, decreasing union power, and the neoliberal co-option of unions.¹¹⁹ Due to this power imbalance between the state, industry, and unions, one can hardly argue that these agreements were consensual.¹²⁰ Second, these negotiations were not unique to the Dutch context and so-called polder model, but also appeared in other national contexts around the time of post-Fordist labor flexibilization and neoliberal re-regulation.¹²¹ Actually, the Wassenaar ‘agreement’ of 1982 was a non-consensual declaration of intent by the social democratic union (FNV) and Christian-democratic union (CNV) on a “‘cost neutral’ redistribution of work”.¹²² Instead of the expected reduction in daily working hours for full-time employees, the implementation of the Wassenaar ‘agreement’ induced drastic wage restraints and labor flexibilization.¹²³ These entailed an enormous increase in part-time, zero-hour, low-wage jobs for women, migrant, and juvenile employees.¹²⁴ In fact, the Netherlands is a champion of labor market flexibilization exhibiting the sixth highest percentage of flexible workers in Europe.¹²⁵ In 2015, 40 percent of the Dutch labor force worked in flex-time contracts, earning on average 35 percent less than people with fixed employment.¹²⁶ Since the beginning of the economic crises in 2008, such forms of occupation increased at a much higher rate than full-time employment.¹²⁷ Therefore, it is not particularly meaningful to the majority of workers in the Netherlands that Dutch employment protection legislation for full-time, regular jobs remains among the most generous in Europe.¹²⁸

In the Dutch paper industry, this rise of post-Fordist precarity materialized in an increased workload per worker, alongside the continuity of hazardous working conditions, which include extreme temperatures and humidity or rapid changes thereof, high noise disturbances, constant exposure to dangerous chemicals (such as asbestos or different sulfites) and physical stress.¹²⁹ The increased workload per worker is often misconstrued as an alleged rise of employee efficiency. It actually is caused by a decreasing number of workers per mill in order to reduce employment costs. Such strategies yielded an excessive decline in employment numbers during the 1980s and 1990s, hereby stimulating post-Fordist deindustrialization further. While a comparably large paper mill would count around 2000 machine operators in the 1960s, the number decreased to a total of 200 workers per mill in 2016.

During the 1990s and 2000s, strategies of downsizing based on advice from external consultancies were deployed to increase profits and lower the cost of labor extensively. Only recently, paper mill directors started to argue for an increase in workforce per mill as the profits a single worker accrues actually outgrew their employment cost. One interviewee explained the revenue maximization per employee as follows: “[W]orkers will make more profit than [we] have to pay for them”. A rise in profit through increased worker’s productivity is nothing more than the essence of precarity inherent to having ever less workers produce ever-more paper under hazardous working conditions.¹³⁰ During an interview one manager summarized this issue as follows: “So each worker is at ninety percent of their capacity, without having problems. So it means they don’t even have time anymore to think […]”. This manager’s assessment of the intense working conditions of paper machine operators in the Dutch paper industry is highly biased. Revealing the manager’s refusal to acknowledge blue-collar working conditions in Dutch paper mills, they continue to legitimize profit-squeezing strategies such as downsizing. While rationalizing peoples’ ability to cope with work as “capacity” and exploiting this “capacity” to its limit, the comment “not even having time anymore to think” exemplifies management strategies of revenue maximization at the cost of workers’ welfare.

The second cause for the decreased employment numbers in the sector is the dire shortage of educated blue-collar workers. Under the Lubbers I cabinet and continuing into the 1990s, the education sector got re-regulated, marked by cuts of public funding and a focus on specialized education as well as prioritization of higher education. As one interviewee explains,

[t]hey killed this system at the end of the 80s, beginning 90s, and then they turn over to the overall education and MAVO and things. But they now, they are starting again with the leerling system. […] And this is something, the whole industry is facing. That we slept for 10, 15 years for education because poor education means also you have to invest time and resources.

In other words, post-Fordist trends of deindustrialization are inter-related with lower vocational education rates. For these reasons, the average worker’s age in the Dutch paper industry is around fifty years and one interviewee explains that “the biggest problem in this industry […] is keeping the knowledge, transferring the knowledge within the company before they go on retirement”. One could think that the old-workers’ knowledge might be redundant in a fully automated paper mill, but it is not. A high rate of machine-stoppage mostly due to paper ripping, approximately once per day in most Dutch paper mills, requires the machine operators to manually intervene with the machine beyond, as one interviewee plays it down, just “pushing a button”. A widely spread alternative to retirement-induced knowledge gaps is to buy-in the relevant knowledge from experts. These practices are costly and not always efficient because such experts, usually studied engineers, do not operate paper machines on a daily manufacturing basis.

In sum, the concurrence of the decrease in unionism and the rise in productivity occurs primarily at the cost of the workers. The demand for ever higher output of ever fewer employees under hazardous conditions reproduces workers’ precarity in post-Fordism. This development is further underpinned by the relocation of production sites to emerging markets (deindustrialization) and the re-regulation of the educational sector, which focuses less on manufacturing personnel and more on the service sector and knowledge workers. In line herewith, the following section explores the development of the managerial middle-class in relation to capital and labor during post-Fordism.

The emergence of the managerial middle class and its manifestation in the Dutch paper industry dates back to the 1950s and 1960s.¹³¹ In the early 1980s, the Dutch paper industry, like many other industries worldwide, witnessed a drastic increase in managerial positions. This class fraction’s growth is an essential facet of post-Fordist labor-capital relations.¹³² The managerial middle-class is also referred to as the professional-managerial class (PMC),¹³³ new petty bourgeoisie,¹³⁴ or white-collar workers.¹³⁵ It “consist[s] of salaried mental workers who do not own the means of production and whose major function in the social division of labor may be described broadly as the reproduction of capitalist culture and capitalist class relations”.¹³⁶ Herewith, managers take a unique position in post-Fordist labor-capital relations.

Corporate managers are neither fully in power of deciding their own working conditions, including their salary scale, their working hours, their liabilities, and tasks, nor dependent upon organizing their labor force in the form of unions to actually negotiate their working conditions. Instead, they inhabit a position that lies outside the union-negotiated tariff for different sectors. In the Dutch paper industry, the specific circumstances of managers are described as follows by an interviewee:

First of all because [...] the competition between the companies for hiring educated people is just higher, so you need more freedom [to negotiate your working conditions], the second thing is, the working hours are quite long. Sometimes you stay fourteen, fifteen hours because there are some problems, you also are on call sometimes, considering that your salary actually doesn't increase that much. […] So basically, the tariff doesn't apply to me [and] we have direct negotiations.

The flexibilization of working conditions also affects the managerial class fraction, as eight-hour working days are often exceeded. Due to the rise of modern technology, managers are expected to be available throughout the day and always in case of an emergency. In contrast to blue-collar workers, managers are in the position to negotiate their salaries and schedule their working days autonomously, often through—as one interviewee calls it—“gentleman agreements”. Next to their unique bargaining positions within organizations, the managerial middle class also exhibits powers concerning negotiations about future investments and legal boundaries of making (paper) business. This power simultaneously depicts their responsibility to maintain and increase the profitability of the business in the interest of the shareholders. Hence, negotiations between transnational shareholders and corporate managers are an integral part of post-Fordism since their interests do not always align.

In the Dutch paper industry, this new petty bourgeoisie of well-paid, mostly white, men in suits faces contradictory expectations, which are tied to their role within the corporate mill. Paper mill managers have to negotiate their role as representatives of the particular TNC, which owns the paper mill, and their role as representatives of the Dutch paper industry. One manager describes this tension as follows:

Actually, I’m not loyal to [name of TNC], […] [i]n my personal opinion, I’m loyal to this mill. Because here we are fighting for not being closed down in some future. We are small. So, we are fighting and the head quarter is deciding they have [number of] mills, we are too small in profit. So, I’m loyal to this factory. I’m part of [TNC], but my first loyalty goes to this location.

In the case of the Dutch paper industry, paper mill managers operate under the continuous tension of keeping ‘their’ mills profitable, while fearing the ever-present possibility that the shareholders shut down the mill to diminish competition, decrease overcapacity, or follow asset-stripping strategies.

This threat became an actual, dominant trend after 2000, when TNCs started to move production units abroad, close down machines, or dismantle entire plants.¹³⁷ In essence, this leaves managers in a contradictory situation: Identifying with the Dutch paper industry and fearing the shutdown of ‘their’ mill while at the same time executing their shareholders’ will, which solely adheres to rising profits and growth, instead of the national and local importance of the mill. Dutch paper mill managers confirmed in the interviews, that they feel a need to protect the national paper industry from their untamable, corporate employers. The identification of white-collar employees with the Dutch paper industry is, thus, essential to the survival of the industry.

Despite the industry’s transnationalization, the low turnover rates and decade-long careers are still the norm. In fact, most TNCs follow corporate strategies, which adhere to the fact that subsidiaries are embedded in distinct national cultures, which do not necessarily align with their respective culture.¹³⁸ Thus, they continue to employ local managers and engineers, instead of replacing the white-collar staff with foreign professionals. Overall, mill managers face an arduous and complex future when it comes to ensuring the survival of the Dutch paper industry by convincing foreign capital to stay.¹³⁹ This also explains, why the VNP stresses the importance of the Dutch paper industry, even though the industry is almost entirely foreign-owned and its managers (including most of the board members of the VNP) are employed by foreign TNCs.

The rise of the managerial middle-class as a post-Fordist abscess of labor-capital relations posits the continuity of distinct elements of the colonial past, namely the racial segregation of the economy as manifested in post-Fordist labor-capital relations. Thus, underlying the rise of the managerial middle class is the continuation of an “imperial racial economy, with its gendered, sexualized, and classed intersections”.¹⁴⁰ During the era of post-Fordism, manufacturing work in first-wave industrialized countries, such as the Netherlands, was relocated to women, migrant, and juvenile workers. Intertwined with this shift in employment was the post-World War II migration wave, “consist[ing] of three major groups: postcolonial migrants from the (former) empire, labor migrants from the circum-Mediterranean area and recently from Eastern Europe, and refugees from a variety of countries in Africa, Asia, Latin America, and the Middle East”.¹⁴¹ Relocating manufacturing jobs to the outsider (within)¹⁴² in order to exploit and appropriate their workforce, changed the racialized economy in so far as industrial blue-collar jobs were no longer limited to white people.¹⁴³ The current role migrant workers play in manufacturing industries of first-wave industrialized countries depicts the racialized character of the post-Fordist accumulation regime as it describes (forced) migration,¹⁴⁴ allowing corporations to exploit labor at ever cheaper prices due to low (or non) labor regulations for women, migrant, and juvenile workers.¹⁴⁵

In addition, white supremacist racism continues to underpin the creation and attempted legitimation of the managerial identity.¹⁴⁶ Current racist justifications of the oppressive idea(l)s and practices of management date all the way back to early forms of Taylorism during slavery.¹⁴⁷ A statement by one of the managers in the Dutch paper industry reproduces the inherently racialized character of the white, male, highly educated managerial middle-class identity:

We have some areas, where the academic level doesn’t have to be quite high, you are more there to operate three buttons basically, so we have a high percentage of Turkish people, or with Turkish origins. […] Ehm, for the low, ehm, academic level jobs, well you hire basically not illiterate people, but people not with a high school degree. […] I think, I'm not sure, if they are officially Dutch, we more define it as people, who speak Dutch. […] I mean, if you are able to communicate, it’s fine for us. Not if you are in a position, where you have to co-ordinate, but if you understand, what we are telling you to do, it’s fine.

This quote has to be interpreted as embedded in and reproducing the racialized economy, to which the Dutch paper industry is no exception. Until the partial decolonization after World War II, manufacturing jobs in the metropoles remained predominantly white until they were handed down to migrant workers in first-wave industrialized countries.¹⁴⁸ Due to the interplay between the European integration and the national labor deregulation policies, the Dutch paper industry exhibited growing numbers of migrating blue-collar workers from 1980 onwards.¹⁴⁹ They mostly migrated from countries such as Turkey, Poland, Bulgaria, and Rumania, and, once arrived in the Netherlands, faced short-term working contracts, low social security standards, and little to no support from unions.¹⁵⁰

For the respective manager to establish a causal relationship between the assumingly simple task of pushing three buttons and the number of (assumingly) Turkish people working in a mill is racist. It is equally racist to link the notion of Turkish people to the idea of illiteracy and it is discriminatory to indirectly equalize not having a high school degree with illiteracy (despite the fact that shaming illiterate people by giving illiteracy a negative connotation is already discriminatory in itself). Overtly racist statements like the one cited above and the concomitant racist atmosphere pertaining not only in Dutch manufacturing industries but as a matter of fact in the Dutch societal context at large, are supported by an epistemology of ignorance.¹⁵¹ In fact, similar to how Dutch colonialism was mystified as a ‘golden’ age, the racist structures analyzed here are eagerly kept secret through the white Dutch self-representation as “a small but ethically just nation that has something special to offer to the world”.¹⁵² This ignorance enables white supremacy to continue its reign by forcefully defending non-knowing, innocence, and the absence of race and racism from Dutch society.¹⁵³ In a similar vein, it is claimed that racism, if at all, only takes place among the working class; it is said to surely not be part of the (managerial) middle-class in Dutch societies.¹⁵⁴

Of course, this is not surprising as management (as a practice and scientific discipline) is essentially rooted in the colonial project.¹⁵⁵ Techniques of Othering reflect the racist roots of management as established by esteemed scholars, who ignored, how slavery and, thus, white supremacist racism was and continues to be incremental to management as practice and science.¹⁵⁶ Exemplary,

Ferrero’s studies, which contrasted the stereotypical image of the lazy barbarian with that of the self-controlled, industrious and civilized European, were accorded scientific credence and were instrumental in shaping the worldview of important theoreticians of organization and management vis-a-vis the non-western ‘other’.¹⁵⁷

Othering is a strategy commonly deployed to build a dominant identity and maintain racialized, oppressive structures. In science Othering is reinforced through institutionalized discourses, which “[…] are predicated upon a colonial tradition where non-white people are seen as exotic Others who require Western scientific investigation and classification”.¹⁵⁸ The discursive use of Othering installs and legitimizes violent and oppressive structures such as patriarchy, nationality, borders, law, Western¹⁵⁹ science, and various forms of state and corporate violence, which are all based on building an identity in demarcation to the Other, who does not belong.¹⁶⁰ Essentially, Othering within and beyond science employs the following strategy: “If you want to be equal to us, then don’t talk about differences; but if you are different from us, then you are not equal”.¹⁶¹ In the Dutch context,

[p]ersistently, an innocent, fragile, emancipated white Dutch self is constructed versus a guilty, uncivilized, barbaric other, which in the past decades has been symbolized mostly by the Islamic other, but at different times in the recent past blacks (i.e., Afro-Surinamese, Antilleans, and Moluccans) have occupied that position.¹⁶²

The above-cited interview respondent, titled deputy manager, is himself a migrant worker from a West-Middle-European country, who enjoyed a middle-class upbringing and an international engineering education at different paper mills worldwide. His father, also a paper engineer, worked at many different paper mills worldwide and actively supported his son’s career. Essentially, this vita resembles how the patriarchal and (neo-)colonial character of the Dutch paper industry, especially concerning the industry’s management level, is still based on ‘gentleman agreements’. Furthermore, assuming to inhabit a position, in which ‘he the manager’ is legitimated to define another person’s identity (“we more define it as people, who speak Dutch”), ultimately resembles the racist, authoritarian, patriarchal, and imperial core of the managerial middle-class. Even though ‘he the manager’ tries to hide this core by using the seemingly legitimizing plural “we”, he assumes a judge-like authority for himself (or in his words for “us”) by devaluing the Other. Additionally, the racist, authoritarian, and discriminatory nature of the manager’s last sentence is worth noting, as he clearly sees himself in a role, in which he tells the Others, what to do, while they have to follow his order.

To conclude from the above explications: The reproduction of racist discourses and material practices is marked by the establishment and rise of the managerial middle-class and its inherently racialized character. Furthermore, the managerial middle-class is embedded in and reproductive of a society, which claims to be blind toward and, hence, perpetuates racialized realities. Overall, current (forced) migration and subsequent work displacement to oppressed groups in post-Fordism goes hand in hand with neoliberal restructuring processes yielding “fiscal austerity, the liberalization of trade agreements, a reduction of import tariffs, and wide-ranging cuts to public expenditure”.¹⁶³ By these means, racial inequality and labor market discrimination are also characteristic of the Dutch paper industry, exploiting so-called low-skilled migrant workers, who work under low social security standards and flex-time contracts, while facing racist oppression. Overall, the rise of the managerial middle-class is essential for reproducing the oppressive structures inherent to capitalism by augmenting the hierarchy between capital and labor under the guise of extrapolating capital growth during post-Fordism.

5.5 Rebutting State Retrenchment

The role of the state in post-Fordism is conditioned by and its policies adjusted to the international competition regime, which stresses the importance of national competitive advantages based on “territory, population, built environment, social institutions and economic agents”.¹⁶⁴ The showcased active and passive governmental steering and restructuring of economic affairs in the context of the Dutch paper industry from 1980 onwards refutes the thesis that the state retrenches from regulative involvement during the post-Fordist accumulation regime. Instead, the above analysis shows how the state’s regulative involvement within and beyond the Dutch paper industry simply changes throughout time but does not cease. Despite the contradictory propagation of free market principles and rising competition, the cooperation between government authorities and managers of the Dutch paper industry clearly traces manifold instances of industrial policy, which benefitted the profitability of the industry. State strategies, such as deregulation of market structures allowing for a widespread transnationalization of ownership, neoliberal re-regulative activities in the form of closer cooperation between public and private sectors for the purpose of R&D cooperation, processes of privatizing public sectors, active as well as passive financial support for industry demands, and flexibilization of labor, all pursued the goal of increasing the international competitiveness of Dutch industries. The governmental response to post-Fordist threats of deindustrialization, the moving of production units abroad, and subsequent shut-down of paper mills in the Netherlands was to bolster industrial and, hence, capital growth through setting “strategic targets for flexible accumulation, continuous innovation and the promotion of the overall structural competitiveness of the national economy”.¹⁶⁵ Herewith, the post-Fordist state continued to play a fundamental role in the restructuring of the politico-economic environments its national industries are embedded in.

During post-Fordism the number one goal for the Dutch paper industry was to soften the negative repercussions of rising deindustrialization and to put a stop to the moving of production capacities to third-wave industrialized countries.¹⁶⁶ In the Netherlands, among others, the competition regime is promoted as the only way to make economic growth attainable; keeping fully transnationalized industries located within the respective national borders is the number one goal of post-Fordist states. With the full-blown arrival of the competition regime in the Netherlands, namely the establishment of the NMa, new forms of cooperation between companies as well as between the public and private sectors became fundamental. Foremost targeting R&D cooperation, industry-specific knowledge and innovation hubs, like the KCPK, started sprouting. Focusing on the national identity of Dutch papermaking became pivotal for propagating R&D cooperation despite the growing dominance of the competition regime. With the goal to foster cooperation, the KCPK established local, regional, and national level innovation projects in order to strengthen the industry’s competitiveness on the global level. Partially funded by (supra-)national institutions, the KCPK, as a daughter organization of the VNP, aimed to increase the attractiveness for paper manufacturing businesses to stay in the Netherlands.

The opposing forces of cooperation during heightened competition manifest in the demand for certain forms of industrial cooperation, i.e., networks aimed at innovation, and the disdain for other forms of industrial cooperation, i.e., cartel structures. In fact, network forms of industrial R&D-focused cooperation are politically legitimized under fashionable notions, such as circular economy. Innovative production processes, technology, and products are propagated as sustainable solutions to ecological problems. Sustainability is the new buzzword under which the repercussions of deindustrialization are said to be tamable by re-orienting manufacturing alongside market demands and niche products. Embedded in a discourse of ecological sustainability, technological innovation actually prioritizes the need for capitalist profit accumulation and economic growth during post-Fordism. In this time of hyper-competition, cooperation has never been about increasing industries’ ecological sustainability.¹⁶⁷ Overall, the innovation discourse led in the name of ecological sustainability more generally and in the context of the Netherlands in the name of the circular economy program more specifically, disregards any positive aspects of collusive practices, which could help diminish the negative impacts competition-induced overproduction and its subsequent increase in waste have on our natural and social environments.

Also within the final dimension of labor-capital relations, one can find tensions. New forms of precarity arose in first-wave industrialized countries, while harsh and exploitative labor was relocated to other geographical as well as demographic areas. Deplorable working conditions in newly industrialized countries provide the basis for a culture of ever-growing consumption in first-wave industrialized countries. Also in European manufacturing industries, which officially adapted supranational safety and production standards, new forms of precarity arose. These include flex-time, low-paid jobs, and decreasing social security standards, especially for women, migrant, and juvenile workers. While automation and computerization in manufacturing industries seem to have decreased the harsh working conditions of blue-collar workers, time-efficiency and unethical productivity measures are actually increasing the daily pressures on workers in the Dutch paper industry. Not only does the dominance of capital over labor remain, but this power relation is further augmented by the rise of the managerial middle-class. As this class mostly consists of white, male, middle-class “Westerners”¹⁶⁸ in the Dutch paper industry, its patriarchal and (neo)colonial character is sustained. Yet, also managers are confronted with certain contradictions in the post-Fordist accumulation regime. These relate to the fact that managers are both, internationally mobile representatives of big TNCs as well as locally placed managers, who, in the case of the Dutch paper industry, identify more with the respective industrial site than their transnational corporate employer.

Furthermore, the rise of the managerial class fraction lends impetus to the above-described contradictions of cooperation in the dominant competition regime. Local and national cooperative efforts, including short-term, daily activities as well as long-term, formalized projects, are strongly reliant on personal relations between managers (including various management levels, from executive manager to technical engineer) in the Dutch paper industry. Globally, competition prevails over cooperation as most Dutch paper mills do not compete on a national level, but more so with their globally spread sister mills. Currently, the biggest threat for Dutch paper mills is that their corporate shareholders shut down production as a consequence of following asset-stripping or consolidation strategies. Cooperation and technological innovation, as fostered by the Dutch state authorities, is thus designed to convince industrial investment capital to stay within the national borders of the Netherlands.