Beyond Brenner's investment overhang hypothesis: The case of the steel industry

One purpose of this article is to revisit Brenner's theory of the investment overhang (long downturn) through examining the steel industry, not least after the first oil crisis. His approach is shown to be unable to capture the dynamics of the industry as revealed by the restructuring of capital approach. This is despite steel traditionally being perceived to suffer from chronic excess capacity and, hence on the face of it, to be most favourable to the overhang hypothesis. A second and more constructive purpose is to present various important aspects of the restructuring of the industry. The next section deepens the analytical commentary already offered by situating Brenner's investment overhang hypothesis in a more general framework concerning the restructuring of capital. It then points to the significance of the steel industry for examining the weaknesses of Brenner's theory. The third section depicts the restructuring of steel in terms of technology and investment. The fourth and fifth sections offer explanations for how exchange (market structure and demand pattern), internationalisation of financial and industrial capital, labour and government have affected the restructuring shown in the third section. Finally, the last section briefly concludes on the wider implications for the study of contemporary capitalism. © 2005 Taylor & Francis Group Ltd.