Political Governance, Technology, and Endogenous Money: The Making of a State-of-the-Art Technology in the England and Wales Electricity Supply Industry
Javary, Michele, Journal of Economic Issues
Since the 1960s there has been renewed awareness of the importance of the role of technology and technological change in the process of economic growth. This has given momentum to research on the significance of innovation for competitiveness and has prompted numerous studies on the dynamics of technical change and industrial transformation (e.g., Utterback and Abernathy  1990; Pavitt 1984; Dosi 1984; Dosi et al. 1988; Freeman 1989, 1990). This growing interest in the neo-Schumpeterian dynamics of technological change was paralleled by new contributions in evolutionary and institutional economics (e.g., Rosenberg 1976, 1982; Nelson and Winter 1982; Arthur 1989; Nelson 1991, 1994, 1996). These studies have gone a long way toward demonstrating the centrality of technological innovation for the dynamics of production systems and the significance of institutions in promoting and catalyzing the process of change (e.g., Nelson 1993). However, these bodies of research have comparatively little to say about the relationship between technical change and capital accumulation and distribution in contemporary capitalist economies. This relationship, which received a high priority on the agendas of our intellectual forefathers--for example, Karl Marx, Thorstein Veblen, and John R. Commons--appears to have faded into the background. In more recent theoretical and conceptual frameworks used in this area, some contributions, such as that of Adam Smith ( 1960), have left more visible traces than have others (see Pavitt 1997).
This article revisits the relationship between technical change and capital accumulation and distribution in the context of an analysis of the shift from coal to gas technology as "best practice" in electricity generation in the England and Wales electricity supply industry (ESI) after its privatization in the early 1990s. It argues that the making of gas technology the "state of the art" in electricity generation results from the social and political forces driving, and embedded in, the process of institutional change that supports the conditions for profit growth in the privatized utilities.
The rapid introduction of the combined cycle gas turbine (CCGT) as the preferred technology in electricity generation came as a surprise to all concerned in the industry. Its establishment as the state of the art in electricity generation cannot be attributed simply to its exceptional technological performance. At the dawn of the privatization of the England and Wales ESI, this technology's track record was not impressive. Existing CCGT plants had never been tested to sustain large capacity production and, in the period that followed, they encountered a number of serious "teething" problems (Watson 1996; Watson and Mitchell 1996). Nevertheless, the rapid introduction of CCGT induced rapid progress in innovation and incremental improvements that have resulted in the rapid displacement of coal in electricity generation and the introduction of successive generations of CCGT technologies since privatization.
In order to analyze the factors contributing to the making of the state of the art, this article examines how and why CCGT technology became a best practice technology in the England and Wales ESI. Drawing on Marx's analysis of Capital ( 1970,  1978,  1972) and more specifically his analysis of the turnover time of capital in Volume Two ( 1978), this analysis brings together two elements that have been treated as exogenous variables in mainstream economic analysis: technology and money. These are considered in the context of the valuation of coal and gas technology as production systems for electricity generation in the newly privatized utilities. This article emphasizes the social and institutional processes that coordinate, or even integrate, the "moments" of the turnover time for capital, namely, production time and circulation time, for capital advanced for the production of electricity. …