Tagged: Neo-liberalism

Convulsions against the tide of history in the New Politics of Inequality

Yesterday I posted about the US Presidential Election and suggested that whatever happened the support for Trump constituted a political ‘convulsion’, in a similar way to the Brexit referendum result.

My basic thesis in terms of the New Politics of Inequality is that inequalities that have arisen as a consequence of neo-liberalisation, are increasingly recognised by communities who are becoming anxious and insecure about their socio-economic futures, both for them and their children.  This is creating a sense of disenfranchisement with politics and political institutions, and fuelling anti-establishment politics, extra-parliamentary political movements and new political parties.

These insecurities are located in universal processes of world market integration which increase international competitiveness.  Much is up for grabs here in terms of how economic insecurities are explained via different cultural politics.

On the one hand rightwing-populism appears to exploit economic insecurities as fear of social and cultural change, and in particular to place the blame on immigrants.  Voters with anxieties about economic futures might have already faced the costs of adjusting to globalisation, but they may also be relatively affluent and concerned about the prospects for their children.  This partly explains why the Republican party in the US now seems to be the party of the relatively poor.

On the other hand, leftist populism seems to focus on the insecurities of the relatively skilled workers who find benefits in a more cosmopolitan society and greater diversity.  In part this explains the high skill profile of Brexit remainers and anti-Trump voters in the US.  It is also partly the reason why the Democrats are becoming the party of the rich.

The main ‘convulsions’ seem to result from the success of politicians in manipulating right-wing populism, seeking to ‘take back control’ in the case of Brexit or ‘make our country great again’ in the case of the US.  But these convulsions are somewhat against the tide of history, in several respects.

First, they are against the trend of world market integration.  In terms of UK, constraints on sovereignty are as much, or more, related to its free trade commitments as wider aspects of European integration.  Leaving the EU while maintaining access to the single market is unlikely to claim back much sovereignty, but appears a likely outcome of the Brexit negotiations.  Similarly, voters supporting Trump’s calls to renegotiate free trade deals might also find that this is easier to say and harder to achieve.

What’s more, while free trade has led to increased competitiveness and the loss of jobs in traditional industries, undoing those deals might merely accentuate the problem for those same families and communities who might then be faced with further job losses, rising consumer prices and more economic insecurity.

It is easy for politicians to stoke up these sentiments for a quick political win, but it will prove much harder to actually deliver for those communities.  In both the US and the UK, the really worrying aspect of the Trump victory and Brexit result might be that the ‘cry of anger’ that underpins them will not be met with beneficial change.  Indeed, they may well be worse off still as a result.  Whatever, voters in the US or UK may want, international competition is only likely to increase.

Second, the demographic tide of history is also against these convulsions.  Those watching the TV coverage from the US overnight or early this morning will have been struck by the degree of demographic change in the country.  When Ronald Reagan won the presidency in 1980 88% of voters were white.  This year 70% were white.  Courting white voters may work for now, but there is a ticking clock on that strategy.  Similarly, like support for Scottish independence and remaining in the EU, support for Hilary was much higher among the young, and those not quite yet able to exercise a vote.  Supporters of the ‘take back control’/’make our country great again’ claims to the past are on the wrong side of inevitable change.

None of that should read as comfort.  These convulsions are against the tide of history, but they are characterised by division, aggression and scapegoating of particular communities.  To some extent these convulsions are about communities trying to cling to an imagined past.  When those same groups find that the tide of history is not turned by their pyrrhic victories, the scope for further division and conflict will surely only increase.

Convulsions now, may then breed the conditions for further convulsions in the future.

In that context, and as Sophia Price argues in a companion post to this one, left politicians and parties need to better understand the ways that culture, race, gender and other identities intersect with class.  These intersections shape the ways in which increasing international competition might be understood.

For several decades political parties have sought to respond to the tastes of median voters.  This has often meant that they court, rather than reshape political anxieties – such as in responses to populist – and often ill-informed – understandings of welfare or immigration.  In place of this, left parties seeking progressive responses to competition and insecurity need to meet these challenges head on, offer alternative explanations and unpick the easy sound-bite politics of the right-populists.

That’s no easy task, but the alternative is pretty bleak.

You can find out more about my publications here.

The ‘New Politics of Inequality and the EU Referendum’ via a Facebook squabble

Politics through Facebook

This week I was prompted to remember the birthday of one of my oldest school friends by a helpful message from Facebook.  I didn’t really need a reminder, but nevertheless I responded to Facebook’s exhortation and dutifully posted the obligatory – if low key – ‘Happy Birthday’ message on his Facebook page.

index

But I don’t expect a response, and perhaps I don’t deserve one.

On Friday June 24th- – the morning of the EU referendum result – I foolishly entered into a Facebook quarrel with this old friend.  He was posting in muted but triumphal terms about the decision to leave the EU, and I objected to some of the explanations used.  He obviously received several posts and messages that were negative, and, despite some enthusiastic support from others in his network, he posted on Saturday morning that he didn’t want to offend anyone and would delete the posts in question.  I suspecthe thought some people – and I fell into that camp – were sore losers and should ‘just get on with it’, but like his initial post his tone was polite, consensual and intended to pour oil on troubled waters.

So why had his posts motivated me in the first place?

Frankly, the reason was that I recognised his concerns.  He explained his antipathy toward the EU as a result of concerns about de-industrialisation, the loss of well paid and secure employment.  He was worried about the social implications of this; in terms of increased insecurity and a sense of disruption of the local communities that had relied on these industries. I know from our friendship that he and his family are long-standing members of those communities which they hold dear. His values are of commitment to place and others.

In the wake of the referendum many remainers have poured scorn on leavers, accusing them of being uninformed, motivated by racism, xenophobia and simplistic nationalism.  All of these are easy to dismiss as the product of a lack of education or rational thought.  But my friend’s posts did not fall into any of these categories. He was thoughtful, well informed and motivated by a commendable and deeply held commitment to community and place, and concerns over the insecurity of both.

What is also notable about this friend is that he has been successful in adjusting to the changes he bemoans. He is well trained and qualified, and I assume reasonably well paid in a high skilled job.  His concerns are about material changes in the communities he values, but they are not sour grapes from a loser in the globalisation story.  He was expressing concerns about the wider and common effects of global economic changes, of which European integration was just one part.

I clearly should have been more cautious with my response to my old friend, and hopefully in time our spat will be forgotten.  The irony is of course that his concerns very much feature in my own research.

indexThat same weekend similar – albeit more consensual – discussions between myself and a range of academic colleagues, also facilitated by Facebook, suggested a more hopeful trajectory.  The Facebook ‘echo chamber generated’ new friends too – all motivated by the EU result and concerned about the need to do more to engage with the political concerns that motivated my friend.

We all recognised that we have been too insular, too concerned with metrics of student satisfaction, research impact and academic reputation to spend sufficient time on the politics of the real world.  As the algorithms of social media generated a discussion of increasing numbers of like minded colleagues, more than 250 of us joined a discussion. The result was that we rather quickly formed a new think tank – InformED. I hope that in the months and years to come you will hear more about our work, for that will suggest that we have carried through our commitment to reach out beyond the confines of the University lecture hall and academic conference room.

Screen Shot 2016-07-06 at 11.28.36.png

So aside from introducing InformED, it is the links between the EU referendum result and my research on ‘the New Politics of Inequality’ that I want to tease out in this (admittedly over-long) post. I have two core arguments.

The first is that the pressure for the referendum and the result were partly generated by a ‘New Politics of Inequality’.

The second is that if we are to leave the EU, then it is vitally important that this process is undertaken in a way that involves us all taking greater political responsibility.  For their part, politicians need to take responsibility for the social divisions they have created. Critical academics like me and my colleagues in InformED, have a responsibility to reach out beyond the academy to influence this, and the wider public have a responsibility to engage with political debate in a more substantive way.

The New Politics of Inequality From Below

In a paper, currently under review and co-authored with Daniela Tepe-Belfrage, we argue that levels of inequality in the UK are fracturing the political consensus that had been reflected in the post-war middle class.  In a paper published in 2014 I argued that during the 1980s, Thatrcherism had sought to separate out different sections of the working class, seeking to differentiate between a deserving skilled working class able to cope with increased competitiveness and those less able to cope. This has been a long-running trend; the current government has repeatedly sought to emphasise its support for ‘hard working families’ against the ‘undeserving poor’.

The argument made by Daniela and I is that the specific forms taken by socio-economic inequality in the UK are now undermining both one and two nation attempts to build political compromises. The much vaunted ‘new middle class’ of the 1960s and 70s sociology text-books is fracturing.

For one thing, the long-term prospects of this group now look less secure.  As I argued in my inaugural lecture, the generation now in their twenties and teens look like they will be the first to be considerably worse off than their parents.  The exception to this is where families have acquired housing assets to pass between generations sufficient to protect those now in their teens and twenties from increased insecurity.  In buy-to-let mortgages at one end of the spectrum and increased private renting at the other, the housing and credit markets are acting as a significant mechanism of upward redistribution.


For another thing, those families affected by these changes increasingly recognise their own declining security.  As the recent data from the British Social Attitudes survey shows, concern with inequality is increasing, as it has done for some time.

It is this recognition that has fueled the emerging realignment of British electoral politics.  Just before the last general election the British Social Attitudes Survey showed that UKIP voters were just as likely to be concerned about inequality as were labour voters.  While some groups mix these concerns with more cosmopolitan cultural politics, others express them through more conservative cultural views.  The former group might be more likely to be young, urban and highly educated (or just living in Scotland!); the latter more likely to be out of the major urban centres, older and less well qualified.  Without over simplifying things, the former group may be more likely to be among the ‘Momentum’ group supporting a new extra-party popular mobilisation behind Jeremy Corbyn. The latter group are more likely among the ranks of labour and conservative supporters who have switched to UKIP in recent years.

Screen Shot 2016-07-06 at 11.41.16

Ashcroft Poll data shows common concerns about insecurity among remainers and leavers.  Click on the image to goto the Ashcroft Poll site.

As the Ashcroft polls show, these shared concerns and divergent interpretations of them were neatly aligned with the propensity to vote remain or leave in the EU referendum.  Leave voters were more likely to be socially and culturally conservative while remainers were more likely to be socially and culturally cosmopolitan and outward looking (see graphics below). But both groups (see graphic above) were influenced in their decisions by concerns about economic insecurities and the effects of these on social and community stability.

Screen Shot 2016-07-06 at 11.43.25.png

Screen Shot 2016-07-06 at 11.44.57

Ashcroft polling data showing the social and cultural values of remainers versus leavers.  Click on the images to goto the Ashcroft site for more data.

These patterns are not just present in the UK, they are echoed across Europe and North America. In the US presidential elections similar patterns of support can be seen for Bernie Sanders versus Donald Trump.  The Five Star movement in Italy, the formation of Syriza in Greece exemplify the leftward reaction. On the other hand the rise of the far right parties in France, Austria, Denmark and the Netherlands and the Pegida movement in Germany demonstrate the counter trend to view polarisation and insecurity through the prism of cultural stasis and fear of the other.  Perhaps more significantly the New Politics of Inequality is also manifest outside of electoral politics in the expressions of protest such as Occupy or the Indignados in Spain, or the rise of far right protest movements all across Europe.  Evidence can be found also in declining popular confidence in political institutions.

The New Politics of Inequality then are fracturing the post-war consensus in the highly developed nations of the North America and Europe, from both left and right.  Inequality and cultural change are popularly viewed negatively on both ends of the political spectrum.

The fracturing of the new middle class is perhaps realising Marx’s prophecy that the class structure would evolve into two great and opposing classes. The sloganeering of the 1% versus the 99% seem to suggest that.  However, it seems that the 99% are definitely not drawn together in a cohesive class consciousness by their common economic realities, but are fractured both within and across countries on their cultural response to those economic realities.

The EU referendum result represents the most significant real world expression of this so far in terms of UK, European and even global politics, though the US election result may clearly trump(!) it.

The New Politics of Inequality from Above

Several of the other papers I have written recently have addressed what might be called here the ‘New Politics of Inequality from Above’.  Here I refer to the elite concern about levels of inequality being politically, economically and socially destabilising. This concern has been emergent over the last decade, but is particularly pronounced since the great financial crisis of 2008.

Evidence of this concern can be drawn from the policy documents of significant international organisations such as the International Monetary Fund, the Organisation for Economic Cooperation and Development, World Bank and the World Economic Forum.  These organisations have different roles and functions, but collectively one of the things they do is act as the think tanks and ideas forums of elite policy knowledge.  Social, economic and political changes are interpreted by these organisations as particular problems for the status quo.  The OECD began to worry about inequality first, but all of them have published high level papers rendering inequality as a policy problem over the last five years, as I discuss in a paper published in Spectrum late last year.

Of interest here is that the European Commission definitely qualifies as one of those transnational organisations that has had influence in shaping the elite interpretation of ‘problems’ that national governments choose to focus on and frame particular responses to these in terms of recommended – and in the case of the Commission sometimes mandated – policies.  It is also the case that inequality has featured on the list of concerns the Commission has raised over the last five years.

The key terms of this new politics of inequality from above are that inequality is not rendered by these elite think tanks as an ethical problem.  This new politics does not represent a ‘road to Damascus’ moment for these organisations. Rather they are concerned precisely because inequality might now be seen as a ‘risk’ to the stability of globalisation.  As such they are busy trying to persuade national governments to take these risks seriously.

This new politics of inequality from above was clearly apparent in the EU referendum process.  For years policy elites have sought to exploit social differences to manage the process of disciplining their populations to accept lower wages, and in some cases lower standards of living also.  This has been possible politically, precisely because elites have mobilised fear and sometimes nationalism to generate this division.  Politicians have regularly sought to use the image of the immigrant, the welfare or health tourist or the domestic welfare benefit recipient as a negative foil for generating support among the rest of the population.

However, that fear and xenophobia is now rather like the ‘Sorcerers Apprentice’; its animated spirit has got out of hand is undermining the position of established elites.  Specifically in the UK, both Labour and Conservative Parties have played the ‘immigration’ and ‘race’ cards, exploiting fears over insecurities to court popular appeal.

Indeed, the now defining moment of Gordon Brown’s tenure as Prime Minister might be thought of as the moment that he unguardedly let slip his discomfort with that narrative when commenting that he thought remarks made to him by a Labour party supporter about migration were bigotry.

Screen Shot 2016-07-06 at 12.11.28

Of course when he realised (see the image above from the Telegraph website capturing the moment) he had been recorded making these comments he immediately back-tracked and offered profuse apologies for ever even thinking about challenging fear expressed as xenophobia. The episode is still referred to as evidence that Brown was out of touch with popular opinion, and – no doubt encouraged by the party machine – he certainly did not try to challenge this populism. It was an episode that demonstrates the cultural divergence in responses to inequality, its manipulation by politicians and the way that this is now hard to control.

But in the run up to the referendum vote, elite concern seemed ever more shrill in the face of the evidence that the Sorcerer’s broom might now be beginning to act on its own motivation, and out of their control. As the campaign progressed and opinion polls showed a close contest, the array of large businesses and elite policy think tanks became increasingly willing to enter the fray.  The supposedly neutral civil service machine also strained at the leash to get involved to put public opinion back in its place, as both the Treasury and Bank of England – the oldest and most central institutional structures of the UK state – sought to raise their own fears of what a Brexit vote would mean to the elite transnational status quo.

Screen Shot 2016-07-06 at 11.57.44

The elites were trembling, and, as it turned out, they had good cause.  The sight of Bank of England governer Mark Carney standing in Threadneedle Street promising that the Bank would step-in to rescue the financial markets, and stablise the global financial system, was evidence of how seriously those elites were rocked. That other Central Banks immediately joined forces to make the same promises is only evidence of the transnational nature of those elites.

Why has inequality risen?

Again, I and many others have addressed the underlying reasons for rising inequality in a number of places, such as my talk in launching the Global Inequalities research cluster at Leeds Beckett, and in a workshop paper to an ESRC seminar at Goldsmiths University late last year. There is also no shortage of explanations. Again, the OECD, the IMF et al. have all jumped on the bandwagon of explaining rising inequality.

The most remarkable thing in terms of the New Politics of Inequality is that the explanations put forward by these elite organisations now are remarkably similar to those put forward for a long time by critical scholars in international political economy and the wider social sciences.  Ofcourse the different proponents of these explanations place varying degrees of emphasis on different parts of the explanation, and often use different language to describe them.  Semantics aside the more or less accepted basket of factors that have increased inequality include:

  • Increasing competition resulting from increased openness to trade and, in some circumstances, increased migration, also. Migration though tends only to have shorter-term and more localised effects and it should be remembered that the migrants themselves are the subject to the negative effects of this competition.
  • Offshoring and globalization as some industries and occupations have moved overseas.
  • Skill Biased Technological change – resulting from the substitution of machines and computers for labour, meaning some occupational roles have disappeared while other more skilled jobs have attracted higher wages.
  • Privatisation of state owned enterprises, which has invariably put a downward pressure on wages in public sector employment, often more dominated by women.
  • The decline of trade union membership and collective bargaining.
  • Labour market policy, including anti-trade union legislation and reduced employment protection legislation.

Of course where critical scholars and the elite international organisations part company is that these are the very changes long-recommended by the OECD, IMF etc.  And in the face of rising inequality and social destabilization they still recommend that the answer is more competitiveness.  But, as Paul Cammack has long argued, pursuing competitiveness as a solution to the problem of increased competition is a fairly circular argument.  Its hard to find a different path out of a tricky situation if one is going in circles!

The European Union and the New Politics of Inequality

European integration was very much the product of the post-war international compromise; motivated by geo-political desires to tie the countries of Europe together in a peaceful free-trade zone of collaboration, while bolstering them against the threat of Soviet expansion. These geo-political concerns suppressed and held in check the tension between two important component elements of EU integration. These were first a political and social liberal project to spread and realise the individual rights of citizens through constitutionalism ;and second an economic liberal project to promote market integration.

After the end of the Cold War the geo-political suppression of tensions between these two projects was removed, and the market liberal project began to emerge as dominant.

As Paul Beeckmans and I argued in a recent paper, the process of economic meta-governance in EU integration has increasingly pursued the objective of economic competitiveness to the detriment of concerns to build a ‘Social Europe’.  The suppression of wages and living standards has been encouraged by the European Commission as an element of EU integration to meet these ends.  If in any doubt about this, just ask the Greek population that has been at the harshest end of this discipline over the last 6 years.

In sum, EU integration has increasingly taken on the concern with competitiveness that has generated the inequality underpinning the damaging ‘new politics’ I describe above.  So, if I am so critical about EU integration as was my friend and the wider ‘Lexiteer’ (Left wing leave voters) campaign right about the need for the UK to leave the EU?

My answer would be ‘no’, on several grounds.

First, while the EU – and the European Council and European Commission in particular, have worked to promote competitiveness at the cost of greater inequality and social tensions, they did not really have this impact in the UK. That is principally because the UK government (under all political parties) has always run ahead of the EU in these objectives.

Indeed, many other Member States have often complained about the role of the UK in encouraging market-oriented reform in the wider EU.  While European integration has been consistent with the types of reform that have realised the New Politics of Inequality in the UK, it has not been a cause of it and at times has acted as a substantial drag on UK ambitions.  Constant debates over the implementation of EU directives strengthening workers rights are prime evidence of this, with the UK often being oppositional in the European discussion on these matters and sluggish to implement the resulting watered down versions that could be agreed in the face of UK objections.

Second, the majority opinion among the political elite (among remainers and leavers alike) is that leaving the EU should be complemented by immediately rejoining the single market or negotiating other equivalent trade deals.  Leaving aside the difficulty of this, as pointed out by Gabriel Siles-Brugge, the direct implication is that leaving will see more market oriented reform and a greater dominance of the economic liberal project over the political liberal one.  Put simply, as Ruth Cain also persuasively argues it will accentuate the conditions which generated the New Politics of Inequality in the first place.

Third, the subordinated aspect of EU integration – shared citizenship, a European identity, the idea of peace and cooperation between nations, cosmopolitan values of tolerance and openness, individual rights and Europe’s great gift to the world: the idea that we collectively have a social and economic responsibility to one another, as expressed through the institutions of a welfare state and social protection – may all be on the back foot, but they are not gone.  We should be promoting a radically different Europe that defends and promotes these values, not turning our back on it.

Where to now?

Plenty of commentators have spent the last week worrying about the precise ways in which the fallout from Brexit will play out in terms of the potential for a second referendum, Scottish cessation from the Union and the politics of Party leadership.  The blogosphere is alight with this stuff and it is all many of my colleagues, friends and acquaintances have been able to talk about since July 25th.  It is not just ‘lefty academics’ either. I have overheard conversations in shops, on public transport and in pubs that all suggest a very much heightened interest in politics and a dawning realisation of the dynamics I describe above.  These things are clearly significant and comment worthy in themselves.

However, the big story here is not so much the contingent terms in which the immediate processes of responding to the vote pan out.  Rather, it is in the underlying socio-economic trends and their rival interpretations in cultural politics. The apparent rise of racial harassment and violence is one immediate expression of this, but so too is the widespread antagonism between the two sides of the debate. My Facebook spat is clearly part of this!

In the fallout then there is increased responsibility on all sides.

Politicians have a clear responsibility to engage with the problems in place of Westminster games.

Academics, such as those coming together in this new think tank, have a duty to do more to engage with public opinion and inform scrutiny of politicians. Critical academics working in the fields of international political economy, sociology, social policy, European studies and critical management studies have long been aware of rising inequality and its consequences in the form of alienation and disenfranchisement.  It is crucial that those critical analyses find their way from the lecture hall and conference room to the public debate.  We need to do more to engage the public directly and to influence the political debate in the media.  This is the objective of my colleagues who have come together to create InformED.

The public also have an obligation here.  The stories over the last week or so about Brexit voters immediately becoming ‘regrexiteers’ when the implications of their actions became clear and about the prominence of ‘What is the EU?’ searches on Google suggest a democratic obligation to be better informed before contributing to collective decisions.  They also suggest an increased realisation of this.

Acting on these responsibilities is no ‘academic’ issue.  It is of vital importance if we are not to travel further down the road of cultural divisions.  As a divided nation we are easier to rule in the interests of the few and not the many.  Divergent cultural political reactions to common insecurities risk the many blaming each other for our common inequalities, and letting the few of the hook.

Moreover, these circumstances – common insecurities, fear of the future, disenchantment with existing institutions – look much like the political conditions that led to the downward spiral into the Second World War. I don’t say we are anywhere near that now, but we are closer now than we were, and the warning signs are clearly there.  It is imperative that we all act now to ensure that we do not travel any further down that path.

 

Save

Post-Capitalism: A guide to Our Future?

Paul Mason’s (2015) recent book Post-Capitalism: A Guide to Our Future has created quite a media stir over recent months.   David Runciman, writing in the Guardian is broadly positive, concluding that Mason has provided ‘a spark to the imagination… a worthy successor to Marx’. By contrast former Labour MP Chris Mullin, also in the Guardian, is more scathing, seemingly lambasting Mason for his socialist politics and ‘utopian folly’. Reviews in other media display a similar ‘Marmite’ reaction.

It was with these reviews ringing in my ears that I picked up the book in preparation for a talk at the Centre for Culture and Art’s Post-Capitalism: Rethinking, Crisis, Culture, and Politics Conference, where Mason himself was also talking about the book alongside a film screening of Boom Bust Boom.

Unusually the book is both everything that it is credited and lambasted for. It is probably overly long and far too eclectic in its choice of supporting ideas. The book’s point of departure is that there is something systemically broken in contemporary neo-liberal capitalism. It proceeds through an ill-advised detour of Kondratieff’s wave theory and a rather ill-informed critique of Marx generally to an appreciation for an autonomist reading (Negri and Flemming, 1991) of the so called ‘Fragment on Machines‘ in Marx’s Grundrisse. Here Mason finds the basis for the optimism of the book’s title: Post-Capitalism.

Info-capitalism, he concludes, sows the seeds of its own destruction because innovation has become ‘non-excludable’, to use a mainstream economic term. That is; information distribution on the internet means that technology can be widely shared at minimal or no cost, and innovation itself can become the product of decommodified cooperation. His big example here is ‘Wikipedia‘ on which many thousands of people help to co-create a reliable and ever expanding source of open knowledge. The effect of this cooperative innovation has been to crowd out for profit providers from the market. If such innovations became generalised, capital would no longer be able to rely on innovation to generate profits, and capitalist social relations would therefore whither away. The handmaiden for this ultimate transition, Mason suggests, is the generation of tech-savvy youths with ‘white cables hanging from their ears’. To give all this a shove, Mason lays out a plan of action that states should engage in now: ceasing privatisation; taking radical and centralised multi-lateral action on climate change and socialising finance.

Video of Mason launching the book at Leeds Beckett University

There is plenty to question here. To pick a few: if the state is precisely what is to be transcended by the radical implications of the digital commons, then why is the state also so necessary to the precursor steps that Mason identifies? Are the generation with the white earphones really so tech-savvy? Aren’t they precisely the ones who are so used to using the Xboxes, Playstations and Apple products that focus on the ‘user’ being just that, impeding rather than speeding the types of problem-solving skills that digital co-creation might both generate and require?

Capital and the Commons

And more than any of this, is Mason’s reading of ‘the Fragment on Machines’ consistent with what Marx was trying to argue, and, much more importantly still, the real-world evolution of capitalist social relations? If the Fragment on Machines is put in the context of the wider discussion of competition in the Grundrisse and Capital, then it is arguable that what Marx was trying to show was the ephemeral nature of the relative form of surplus value, based as it is on the need to maintain an innovation advantage. Because capitalists can’t always exclude others from seeing and then applying their innovations in products and production, this means that the way is always open to other capitalists to copy and even leapfrog their innovation, potentially devaluing inventory and fixed capital. This is what drives the endless pursuit of innovation, the perpetual need to supress labour power and the expansive tendencies of capital. It is one source of the chronic instabilities that present themselves to firms, workers and whole communities as periodic crises (read on).

As Marxists like Werner Bonefeld (2011) and Massimo De-Angelis (2004) and feminist Marxists like Silvia Federici (2012) in particular show us, capital is very attuned to the advantages that arise from the commodification of common resources that it did not pay to produce. In this sense, the digital commons may not be so different to the social commons, such as the biological reproduction of life itself. Capital loves to appropriate these base materials whether or not they are directly paid for. Feminists, like Nancy Fraser (2014) point to the exploitation of unpaid domestic labour as a necessary and universal input to every production process, but very rarely does capital acknowledge this through the allocation of pay to cover these costs. Rather, for the most part, this labour is unpaid, undervalued and merely assumed to be in place.

So like the work of ‘social reproduction’, capital exploits freely available technology and ideas as inputs into the production of surplus value.  The widespread corporate exploitation of Linux is good evidence of this. That doesn’t suggest that cooperative and non-commodified production won’t survive alongside capitalist production or that it can’t be used as a source of opposition and resistance. Again, feminist political economy of the household and body illustrates this well. In the same way then the digital commons might be a new frontier in class struggle, but is it not inherently transformatory or necessarily progressive.

Understanding Crisis

All this demonstrates that, while often inconsistent, Mason’s book is certainly thought provoking. The main line of thinking that the book opened up for me though was around the subject of crisis, systemic punctuation and transformation. In that sense, the premise of the book; that the Great Recession opened up a fissure in contemporary capitalism and is therefore a turning point of sorts – albeit one that must be struggled over – has obviously been a topic of much discussion over recent years. This is graphically illustrated with the proliferation of literature making an appeal to the imagery of Zombies. The dominant narrative here is that neo-liberal capitalism is ‘Zombie like’; still moving and devouring all that happens to be in its path, but dead from the neck up and waiting to be toppled. As Jamie Peck (2010, p. 109) puts it, neo-liberalism…

“…has ‘entered its zombie phase. The brain has apparently long since stopped functioning, but the limbs are still moving… The living dead of the free – market revolution continue to walk the earth, though with each resurrection their decidedly uncoordinated gait becomes even more erratic”.

The first thought that always comes to mind when discussing the idea of crisis and capital is the need for specificity over the use of the term. Stephen Gill (2012) has highlighted the medical genealogy of the word; being the acute point in an illness where the patient either dies or recovers. To stretch the metaphor, however, illnesses can be chronic life limiting conditions or these more acute turning points. I argue below that the way in which crisis manifests in capitalist development takes the form of both long-term malaise creating conditions of chronic instability, as well as acute periods in which alternative futures might appear possible because pre-existing social structures are disrupted.

In terms of the logic of capital, crisis can be read as a break in the circulation of value. From the perspective of capital this relates to barriers or interruptions in circulation that prevent the realisation of surplus value in the process of transferring money into the commodities of labour power, fixed capital and raw materials, through the altered commodity form and back to money, with surplus value included as profit. From the point of view of labour, crises can be seen as acute breaks in the circulation process which begins with labour power and flows through commodities back to the reproduction of labour power.

Chronic Crisis Tendencies and Instability

Taking the latter circuit first, chronic, life-limiting malaise and instability is a fairly accurate description of the everyday lived reality for many. Here I don’t just refer to the 800m or so living in extreme poverty on the UN’s metric and whose crisis is likely caused by the absence of exploitation at the hands of capital.  Rather, I refer to the much larger section of the global population, who may or may not be living in ‘extreme poverty’ regardless of the UN’s rather limited $1.25 a day standard, but whose lived reality is determined by the logic of capital. For these people (including many of the authors and readers of this blog) this crisis is formed through the subsumption of their aspirations, the limitations placed on their opportunities and the way their existence is alienated from others around them because of exploitative relations of production or social reproduction. As Shirin Rai (Rai, Hoskyns, & Thomas, 2014) reminds us, it is these people whose energies are ‘depleted’ by the daily process of reproduction in a world of alienation. On top of all this, the looming impact of climate change is both clearly linked to the expansive tendencies of capitalist production and is set to limit human possibilities into the future. The reality of life under the logic of capital then is some form of crisis for large parts of the world’s population for a large part of the time.  This type of everyday crisis is of course often hidden behind the appearance of formal equality, freedom and the festishism of commodities and money.  Deeply embedded but constantly evolving ideologies serve to obscure these real effects from view.

In this sense, capitalist social relations engender chronic life limiting effects which can be read as ongoing crisis tendencies which might be generative of more acute crisis moments. These tendencies though, are not a special condition but an ‘everyday’ lived reality.

There are other ways in which the tendencies toward acute crisis moments are ever present in the ‘normal’ operation of capitalist competition. Firms unable to keep up with competitive pressures succumb to them, devaluing their accumulated capital and the labour power and potential of their workers. To the extent that clusters of interdependent firms are often co-located geographically, these sorts of competitive crises have spatially concentrated effects and act to switch the geographical flows of capital (Harvey, 1982) from one place to another, leaving behind a trail of devastation in human lives and visible traces of decline in their wake, as my coulleague Andrew Lawson’s (2013) work on ‘Foreclosure Stories’ clearly illustrates.

Acute Crises and Systemic Punctuation

Clearly this is not though the type of crisis potentiality that motivates the media headlines and the Zombie metaphors. Rather crisis in this sense appeals to a more dramatic and systemic reading of the term. Here crisis becomes precisely a departure from the norm of capitalist development. If accumulation and expanding reproduction are read as the desired (if difficult to realise and sustain) steady-state of capitalist development, an interruption to either can have systemic consequences. Crisis in this sense – in that suggested at the outset of Mason’s book – can therefore be ‘punctuating’; a point at which alternative socio-economic paths become possible. The emphasis on the openness of socio-economic change and the role of social struggle in determining the direction of this is one of the real strengths of Post-Capitalism.

These punctuating and systemic crises provide the acute interruptions of accumulation and often social reproduction too. Of course Marx provided a theory of crisis development that focussed on the breakdown of accumulation and reproduction. Subsequent theorists continue to argue about whether these systemic crises are the result of different technical aspects of this theory such as the controversial ‘long term tendency of the rate of profit to fall’ or the necessary under-consumption of the working class because the portion of their labour power that is taken in surplus value means that they are simply unable to consume everything that they produce. One of the senior figures in these debates is David Harvey, who long ago (1982) laid out a way of understanding contemporary crises via Marx’s theoretical treatment of crisis.  He has recently returned to the subject to clarify his thinking in ways that serve as a useful introduction for the unitiated. However, one reads these highly technical debates, Marx provides for a range of ways in which what Simon Clarke (1994) calls ‘disproportions’ in supply and demand between sectors and between capital and labour can lead to these systemic crises.

Of course over the last 100 years there have been several punctuating crises of this type, during which not only variants of capitalism but perhaps capitalist social relations per se were up for question. It was these sorts of crisis that occasioned the transition from laissez-faire to social democracy in the immediate Post-War era and the transition toward neo-liberalisation in the 1970s/80s. In both cases, capital encountered barriers to continued accumulation and reproduction. New ideas, modes of production, institutional forms and distributional arrangements were needed to ensure that capitalist social relations per se, could be sustained. In the first case this involved the spectacular devaluation of capital in the form of two world wars and a severe depression. In the latter it involved Harvey’s famous spatial fix as new areas of the globe were opened up to the flow of capital, first through ‘globalisation’; outsourcing and integration of much of South East Asia into the global economy and then through the post-Communist transition of East and Central Europe. These spatial fixes involved the neo-liberalisation of these societies, as they entered the realms of global capitalism (Shields, 2012).

Neo-Liberalism in Crisis?

Of course, like crisis, neo-liberalism is itself a hugely problematic and ambiguous term (Boas & Gans-Morse, 2009), but it is widely understood to be descriptive of the ideas, modes of production, institutional and distributional arrangements which have gradually come to characterise capitalism as a result of the spatial fix that Harvey identifies. Without opening up another genealogical and definitional can of worms, following Jamie Peck and collaborators (Brenner, Peck, & Theodore, 2010), I use the term here as a dynamic process (ala ‘neo-liberalisation’) which is contradictory in character involving all sorts of different institutional forms. Indeed, Japhy Wilson (2015) argues that constant re-engineering of neo-liberalism – embedded in culture, the ideas of thought leaders and also institutions – is crucial to the ways in which ideology enables the reality of capitalist exploitation to be obscured, even if this neurotic redefinition is often only partially successful.  What is common though, is a partly private and partly state-authored project to restructure the relation between capital and labour to benefit the former and to realise the interests of ‘capital in general’, most easily represented in the form of finance. That said, it is far too simplistic to read this as a finance vs industrial capital distinction, for much of what might pass for the latter is so thoroughly financialised as to make such a distinction redundant.

If then, the premise of Post-Capitalism the book is to be believed, we are living in times of an acute and potentially punctuating crisis moment for neo-liberalisation, opening the possibility for a transition to ‘Post-Capitalism’. While it is hugely significant that a mainstream journalist is willing to confront such systemic and political issues, we are a long way from a systemic crisis of neoliberalisation and therefore much further still from a crisis raising the possibility of a transition away from capitalist social relations altogether. As another colleague Katy Shaw’s (2015) suggests in her recent book on Crunch Lit, the continued dominance of the Vampire metaphor for contemporary capitalism might be more apposite than that of the Zombie. Here’s why.

In the initial post-crisis period there were indeed a range of developments that questioned the continuity of neo-liberalisation, such as the widespread adoption of Keynesian stimulus, banks taken into public ownership and active state interventions in some countries to offset or avoid unemployment, notably in Germany. Politicians and other ‘organic intellectuals’ made high profile speeches at the World Economic Forum at Davos and other places which promised a new kind of economy and academics and thought leaders as disparate as Joseph Stiglitz and Naomi Klein commented that they expected significant change. This window in which alternatives to further neo-liberalisation were to the fore, was short-lived however and the widespread implementation of austerity measures has since reinstated an on-going trajectory of neo-liberalisation.

Austerity as Governance by Crisis

The implementation of austerity though provides another way in which we can think about crisis. Like crisis and neo-liberalism, ‘austerity’ is another over used phrase that requires, but is not often given, a definition. Indeed, it is notable that ‘what is austerity?’ has been one of the most prominent Google searches over recent years and especially during elections. Despite its widespread use, many people simply do not know what it means. Clearly a full definition is beyond the realm of this blog-post, but one suggestion here is that austerity be read partly as means of politically inducing crisis in the reproduction of labour and households.

A video of my talk at the Centre for Culture and the Arts event on Post-Capitalism

Austerity as public spending cuts, reducing welfare or reproductive services often relied on by poor households, forces them to moderate their consumptive behaviour or look for other forms of subsistence.  As such, austerity is crisis inducing in the household. At recent ESRC Seminars on the ‘Hidden Costs of Recovery’ the contradictions of austerity policies which appear to hinder the productive capacities of households were widely discussed, and the commonly proposed answer was that this was the product of state strategies to assert control over especially poor households. At these seminars Ruth Cain showed how this was carried through in the form of the new ‘Universal Credit’ welfare benefit and Anat Greenstein and Daniela Tepe-Belfrage showed the deeply interventionist logic underpinning both the ‘Bedroom Tax’ and the government’s Troubled Families Programme. As Mary Evans and Angus Cameron argued persuasively in these discussions, it is not an accident that these government policies are matched by a moralising culture of austerity which portrays poverty and inequality as the ‘fault’ of poor households, and women in particular. In different ways Johnna Montgomerie, Emma Dowling and Ruth Pearson all highlighted how material and cultural austerity are linked to crises in social reproduction, whose costs are born largely by households, and thereby disproportionately by women (Pearson and Elson, 2015).  As these colleagues argued, this is a dynamic and dialectical process, since crises in social reproduction can also be causes of crises in material accumulation.

In even more dramatic ways, the countries receiving support from the ‘Troika’ of the European Commission, European Central Bank and the IMF, massive reductions in the size of the state itself and in the living standards of large sections of the population have been used to moderate the behaviour and future expectations of these populations. As Johnna Montgomerie argues, the forced moral economy of the debt crisis in Southern Europe is selectively applied by the powerful against the relatively powerless. Different debt-moralities are applied to lenders than to borrowers and to different types of public and private borrowers. The result is debt-crisis management as a governing strategy to impose a particular form of moral order in which financial interests are to the fore.

Responding to popular resistance to forced austerity, the Troika – and other member states of the European Union – have been quite happy to see the suspension of democracy as in Italy, or (once international capital had been repatriated) in Greece to merely offer those populations the straightforward choice of accepting the unacceptable or leaving the EU, with all the uncertainty that that would entail. Indeed, following the various rejections of further austerity by the Greek people, the conditions attached to further support have actually been accentuated and Syriza is now implementing a more stringent package of measures than those they were elected to resist. It seems as though the Greek population is being singled out among those requiring external support, for particularly punitive action, in comparison say to the Irish who, after initial protests, did put up with externally imposed austerity.

In the context of the structural lack of external competitiveness of the European economy, it might be possible to start to interpret the application of contemporary austerity, whether internally authored as in the case of the UK or externally enforced as in the case of Ireland, Greece, Spain, Portugal and Italy, as an ‘experiment’. Whether consciously designed in this way or not, there may be parallels between the experience of austerity in Europe now and the way that Pinochet’s Chile was used in the 1970s to test neo-liberalisation. Perhaps the experience of poor households in the UK and the bailout countries of Europe can show just how much of an alteration in living standards can be enforced in European societies while retaining stable reproduction, and including, where necessary, the suspension of democracy to ensure implementation. Different scales of governance – and supranational meta-governance in particular – have been used in a divide and rule strategy over the populations of Europe, with the effect that the Irish subjects of austerity expect their counterparts in Greece to swallow the same painful medicine, whether or not it is in the end any good for them. Understood thus, the ‘recovery and return to normalcy’ narrative for the current conjuncture in Europe looks distinctly unlikely. Rather, we might be in for episodic and crisis induced ‘ratcheting down’ of living standards for the forseeable future.

This leads to us to the importance of critically interrogating the logics of policy failure and success, and the ways that this might shape our understanding of precisely how ‘crisis’ should be understood. As Peck et al. (2012) argue, neo-liberal policies often (and predictably) appear as if they fail. But ‘failure’ here needs to be understood in complex and contingent ways because policies “typically fail in such a way as to engender new rounds of experimentation, generally oriented toward the same market- disciplinary agendas that underpinned earlier forms of policy reform—and associated policy failure(s)” (p274). As such, neo-liberalisation often continues while appearing to fail, the appearance of failure induces a sense of crisis and therefore a further justification for more of the same. As Stuart Shields pithily summarises this ‘the time for reform is always now’. In a recent article on EU Meta-governance Paul Beeckmans and I argue that the EU has operated under this logic for more than 20 years now, especially mobilising ideas of failing competitiveness in relation to an evolving list of countries from the US and Japan in the early 1990s, to China, India and other emerging markets today (Nunn & Beeckmans, 2015). Neo-liberalism might be chronically unstable and frequently appear to be experiencing existential crisis, but it is not currently in the throes of the acute episode that might realise its transformation.

Crisis and Post-Capitalism?

If neo-liberalism is not in crisis then, what of Paul Mason’s claim that we might be in a position to witness ‘Post-Capitalism’? Given the preceding discussion we should clearly treat this sort of claim with some caution, without necessarily dismissing it. We shouldn’t dismiss it because the simple act of thinking about ‘post capitalist’ social relations is itself a form of resistance to the dominance of capital and its attempt to write itself into our minds and bodies.

However, no such transition appears likely in the near future. Paul Cammack’s recent work offers a way to think about such issues. In several recent papers he argues that Marx and Engels always intended that their analysis of the contradiction and crisis ridden nature of capitalist development mapped out a world where capitalist social relations were universal before they could be transcended. This makes perfect sense if Rosa Luxemburg’s argument that capital requires social groups outside of it to constitute supplies of new labour, raw materials and demand is taken seriously. As David Harvey has convincingly (and repeatedly) argued, the availability of ‘space’ for capital to expand into is one important way that chronic instabilities and even acute crises can be offset and partially resolved. As Cammack shows though, there is still plenty of space left for capital to expand into, though the doubling of the global workforce since the early 1990s is clear evidence of the intensification of its expansiveness and an explanation for chronic instabilities to come to the fore.  If expansion can offset systemic crises then we shouldn’t expect a crisis-transcendence logic to emerge any time soon.

Finally then, if neither post-capitalism nor post-neo-liberalism are around the corner, what might we expect from the coming decades? To answer that question we might need to enjoin Paul Mason’s ‘optimism of the will’, with a slug of ‘pessimism of the intellect’. Unfortunately there is a popular tendency in ‘the west’ to almost absent mindedly associate capitalism with progress and the sort of distributional and institutional arrangements that have been dominant in Europe and, to a lesser extent, in North America in the post-war period.

However, there is of course no clear reason why we should expect capitalism to be combined with high or rising standards of living and generous redistribution and social protection. For much of the world’s population, capitalist social relations have never been like this.  Indeed, reading it as such may serve to naturalise the social distinctions between those who have, and have not, benefitted from high levels of redistribution and state spending, obscuring important cleavages of ethnicity and gender which structure inequalities of experience, resources and life chances.  Over the long-run, Thomas Piketty’s (2014) recent high profile empirical findings about patterns of inequality across the last hundred years or so may illustrate the exceptionalism of the Post-War experience in the relatively small number of countries where social democracy prevailed, for a relatively short period of time. The equation of capitalism with such progress then was a rather white and male experience, and to speak of crisis in punctuating terms, as the unravelling of social-democratic institutions may also obscure the real experience of capital for people outside of Europe and North America.

Nevertheless, in a world of intensified competition, driven in part by the expansion of capitalist social relations to South and East Asia, it might well be that European and North American populations can expect a tightening of living standards that extends beyond an exceptional period associated with ‘recovery’ from the ‘Great Recession’. Indeed, permanent belt tightening and social conflict over the distribution of costs and benefits might well be the ‘new normal’ of European and North American societies. Rising inequality and instability in the electoral landscape in many countries may just be the first signs of these trends setting in. Increased attention in governance circles to the importance of managing the effects of rising inequality might then be interpreted as a ‘New Politics of Inequality’ where the underpinning moral economy is not so much egalitarian, as about functionally managing the chronic instabilities and tendencies toward crisis that are the normal, everyday and systemic characteristics of an expanding capitalist system.

References

Angelis, M. D. (2004). Separating the Doing and the Deed: Capital and the Continuous Character of Enclosures. Historical Materialism, 12(2), 57–87. http://doi.org/10.1163/1569206041551609

Boas, T., & Gans-Morse, J. (2009). Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan. Studies in Comparative International Development (SCID), 44(2), 137–161. http://doi.org/10.1007/s12116-009-9040-5

Bonefeld, W. (2011). Primitive accumulation and capitalist accumulation: notes on social constitution and expropriation. Science & Society, 75(3), 379–399.

Brenner, N., Peck, J., & Theodore, N. (2010). Variegated neoliberalization: geographies, modalities, pathways. Global Networks, 10(2), 182–222.

Clarke, S. (1994). Marx’s theory of crisis. Macmillan Basingstoke.

Federici, S. (2012). Revolution at point zero: Housework, reproduction, and feminist struggle. PM Press.

Fraser, N. (2014). Behind Marx’s Hidden Abode. New Left Review, (86), 55–72.

Gill, S. (2012). Global Crises and the Crisis of Global Leadership. In S. Gill (Ed.), Leaders and Led in an Era of Global Crises (pp. 23–37). Cambridge: Cambridge University Press.

Harvey, D. (1982). The Limits to Capital. London: Verso.

Lawson, A. (2013). Foreclosure Stories: Neoliberal Suffering in the Great Recession. Journal of American Studies, 47(1).

Negri, A. and Fleming, J (1991). “Marx Beyond Marx Lessons on the Grundrisse,”. http://philpapers.org/rec/NEGMBM.

Mason, P. (2015). Post-Capitalism: A Guide to Our Future. London: Allen Lane.

Nunn, A., & Beeckmans, P. (2015). The Political Economy of Competitiveness and Continuous Adjustment in EU Meta-Governance. International Journal of Public Administration, 38(12), 926–939. http://doi.org/10.1080/01900692.2015.1028645

Pearson, R., and Elson, D. (2015). “Transcending the Impact of the Financial Crisis in the United Kingdom: Towards Plan F—a Feminist Economic Strategy.” Feminist Review 109, no. 1 (February): 8–30. doi:10.1057/fr.2014.42.

Peck, J. (2010). Zombie neoliberalism and the ambidextrous state. Theoretical Criminology, 14(1), 104–110. http://doi.org/10.1177/1362480609352784

Peck, J., Theodore, N., & Brenner, N. (2012). Neoliberalism resurgent? Market rule after the Great Recession. South Atlantic Quarterly, 111(2), 265–288.

Piketty, T. (2014). Capital in the Twenty-First Century. London and Cambridge MA: Belknap Press.,

Rai, S. M., Hoskyns, C., & Thomas, D. (2014). Depletion: The cost of social reproduction. International Feminist Journal of Politics, 16(1), 86–105.

Shaw, K. (2015). Crunch-Lit, London: Bloomsbury.

Shields, S. (2012). The international political economy of transition: neoliberal hegemony and Eastern Central Europe’s transformation. Routledge.

Wilson, J. (2015), Neo-liberal Nightmares. Spectrum: Journal of Global Studies, 7:1.

ONS Productivity Figures Suggest a Different Labour Market Policy is Needed

Data released by the ONS this week show that the UK economy has fallen behind on productivity when compared to competitors like the US, Germany and France.  To those well versed in these statistics, it is old news – they always show that the UK has a productivity gap with these economies. What is new, is that during the 2000s some of that gap narrowed, but since the onset of the current economic crisis in 2008, that gap has again been growing.  The big problem for the UK is that employers in this country have held onto labour in the context of falling output.  Ofcourse, in may ways this is good.  It has helped keep the labour market – employment and unemployment – in a better shape than it would otherwise have been.  The downside of this is that workers have accepted stalled wages and falling standards of living to square that circle.

The implications of this in the longer term, pose significant challenges for labour market policy.  At the Work Employment and Society Conference a week or so ago I gave a paper which argued that the implementation of Active Labour Market Policy across Europe, and particularly in  the UK, was stuck in the early 1990s.  My paper suggested that the way that Public Employment Services manage their activities is excessively focused on discipline and ‘activation’ – forcing the unemployed to apply for any job.  I suggested that instead they should reorient themselves to focusing on the European Commission’s Public Employment Services Strategy which emphasizes the importance of ‘Transitional Labour Markets’.  This approach, following the ideas of Gunter Schmid, suggests that governments should use labour market policy to encourage those who can to apply for work now, while seeking to upskill others and even recognizing that there are points in the lifecycle when employment is not the best option, or that it should be combined with other responsibilities such as caring for children and other relatives.

Such an approach would though need to break with the idea of pushing competitiveness down to the individual level – something I have blogged against here before.  The lessons from my paper and yesterday’s ONS data is that labour market policy needs to change.  This is particularly so in the UK, where the current emphasis on discipline and activation simply provides employers with a ready supply of cheap, sometimes free and state subsidised labour, that they have little or no incentive to retain, train or value.  In that context, if a recovery of output were to emerge, employers could simply employ more cheap labour and avoid the costs of capital and productivity enhancements. The result would be that the UK economy would retain its comparative low skill equilibrium.

In place of this, labour market policy needs to shift away from disciplining the poor and toward a holistic view of what is good for households and good for the economy and society at large.  That will mean working to increase skill levels, combatting poverty (as a right and not an uncertain potential reward for competing for low quality employment), and that economic problems are to be found not just on the supply side of the labour market – but on the demand side too. I’ll be making some of these points at the Public Employment Services Dialogue conference in Brussels in two weeks time.  I hope those assembled will listen.

The Six Legacies of Thatcherism

I spoke recently in Manchester at the April meeting of the Transpennine Working Group of the Conference of Socialist Economists (http://csetranspennine.wordpress.com/) and will do so again on the 15th May to the Leeds Taking Soundings group (http://www.takingsoundings.org.uk/), on the legacy of Thatcherism.  The result is a longer than expected draft paper on the subject (click here to read).

The first point made in the paper is that Thatcher’s legacy is easily over-stated, by both supporters and detractors.  The basic gist of the over-statement of Thatcher’s legacy is that she was responsible for neo-liberal reform in Britain, that either (to supporters) transformed UK competitiveness and overcame structural barriers to continued capitalist growth; or (to detractors) destroyed the industrial base, led to rising inequality and left the UK with intractable social and economic problems.  The paper rejects this analysis, arguing that neo-liberal reform in the UK started a long time prior to the Thatcher government’s of 1979-1990 and has continued apace since that time.  In this context, it is necessary to understand the particular contribution of Thatcherism as a ‘first phase’ in neo-liberal reform, concerned with deconstructing the social and institutional structures of post-war social democracy.  The succeeding part of the project, pushed through by New Labour was concerned with a ‘second phase’ in Neo-Liberalism, designed to recreate new social and institutional structures to contain some of the problems associated with Thatcherism/first-phase reform.

In this context I identify six major legacies from Thatcherism:

  1. A crisis in the neo-liberal project – by 1990 the most immediate legacy of Thatcherism was a crisis in the neo-liberal project she promoted.  The extension of market discipline had created long-term structural unemployment, rising inequality and the weaknesses in economic strategy undermined rather than strengthened the UK position in the international economy.  Rising social divisions, crime and fear of crime and a housing market collapse undermined Thatcher’s weak political coalition.
  2. A transformation in party politics – the way in which New Labour confronted this challenge completed the transformation of party political choice that had been underway since the Labour government of 1976 chose to implement neo-liberal reform under advice from the IMF.  New Labour uncritically accepted the discourse of globalisation as a structural reality and set about the promotion of social justice as a subordinate concern to the prior objective of ensuring the competitiveness of ‘capital operating in Britain’ (to use Jessop et al.’s phrase).  New Labour would extend privatisation into parts of the welfare state not touched by Thatcherism and would pursue a more comperehensive strategy to promote competitiveness, leaving inequality unchecked.
  3. The neo-liberal individual – Thatcher is often associated with the controversial statement that ‘there is no such thing as society’.  Ofcourse, this is a vacuous claim, but New Labour was in fact responsible for the pursuit of some of the individualism that Thatcher is more commonly associated with. Underpinning New Labour’s pursuit of neo-liberal reform was a concern to activate the unemployment, promote upward mobility and to inculcate a more competitive work force. The aim of the (mainly supply side) policies associated with this was to drive down competitiveness to the level of the individual. This was attempted however, in a much more sophisticated way than those under Thatcher. To see the results of this walk into a primary school classroom and look for evidence of targets, read a primary school report to identify an individual child’s targets and strategies for improvement.  Look at the desparate scrambling of University departments to make their graduates employable.  Talk to parents and listen to politicians.  The currency of the day is a logic of individual competitiveness expressed as a preference for aspiration, ambition and struggle for advantage in a social hierarchy that is much more unequal than it was in the 1970s. Whether we like it or not, we are all neo-liberal now.
  4. Widespread engagement with the financial markets – A simple point to make.  Think credit cards, mortgages, life insurance, pensions.  The breadth (i.e. the sheer proportion of the population) and depth (the extent to which our current and future livelihoods) of dependence on the financial sector is far greater than it was in the 1970s and this is directly attributable to policies of financial deregulation; the promotion of individual home ownership; the cheapening of wages etc.
  5. The fractured and unconscious working class – recent opinion polls undertaken for the British Social Attitudes Survey show a weakening of solidarity over time. They demonstrate a decreasing preference for welfare and increasing tendencies toward harshness in the welfare regime, and this is progressively more entrenched for younger age cohorts, with those born during and since the 1980s being the least generous in their disposition.  This tendency not only took shape in the Thatcher period in office, it accelerated during the rule of New Labour.  It is part of the explanation for why the current government is able to cut welfare benefits and increase (already harsh) conditionality at a time when we know poverty is accelerating and opportunities in the labour market are relatively scarce, and even working families are dependent on welfare because of the low level of wages.
  6. The economic position of Britain – I don’t make the argument fully in the paper but a sixth legacy relates to the repositioning of the UK economy in the global economy. It includes de-industrialisation, which again proceeded apace during but also after Thatcher’s decade in government, and has left the UK stuck with many uncompetitive, low pay and low skill equilibrium industries. This enhances our vulnerability to global market competition, and further exacerbates the problems above.  If I develop the paper further, I’ll be sure to include a fuller analysis of this.

If you are interested, and you want to know more, then come along to Taking Soundings on the At 6pm on Wednesday 15th May 2013, in AG10 Broadcasting Place, LMU, Woodhouse Lane, Leeds.