ABSTRACT
This chapter aims to provide a perspective, derived from political economic analysis, on the process of devalorisation, or reduction in value of capital, both constant and variable, and to indicate associated changes in the regional environment. It is posited that devalorisation is part of a capital restructuring process in which the affected region is 'readjusted' to better fit into the international division of labour. Capital restructuring not only creates conditions for higher private sector profitability as production relations are changed, but it also causes changes in the social relations of production. In brief, the theoretical basis of the analysis presented here is derived from political economic insights into the capitalist system in which the central dynamic is the drive to accumulate capital. Intra-class competition between capitalists leads individual firms to adopt labour-saving technologies. State investment of devalorised capital is, perhaps, clearest in the case of public industries.
