Sunday, 19 June 2016

The EU and the permanent over-supply of labour

Regardless of the result of Thursday’s EU Referendum, I would suggest that politics in the UK and Europe won’t be able to drag itself out of the racist and murderous cesspool it is descending deeper into until one issue is honestly faced – the now permanent over-supply of labour.

As is obvious, the vast majority of people require a paid job or jobs to physically survive and make sure their retirement is barely tolerable. Government policy has in the last two decades, and especially since the Great Recession, made entering the labour market under any terms inescapable. Sanctions, workfare, the compulsion applied to sick and disabled people to seek work and the new “in-work conditionality” of Universal Credit, represent an iron cage of labour coercion from it is impossible to escape. All that is impeding an utterly Dickensian race to the bottom is minimum wage legislation.

Meanwhile, retirement ages have been increased across Europe, increasing the ‘pool’ of available labour, and ‘structural reforms’ hawked by economic ‘experts’, like the OECD and the IMF, advocate increasing labour market ‘participation’ by reducing ‘generous’ welfare benefits, and thus, theoretically, trimming government deficits.

At the same technological change will make, and is making, labour far more dispensable and insecure. Research from the US indicates that for the bottom fifth of society a greater than 30% month on month change in total income is already the norm. In the UK, the charity Citizens Advice estimates that 4.5 million workers are in insecure work, defined as zero hours, variable hours and temporary or agency work. This figures does not include the 15% of the UK workforce in self-employment, by nature an insecure form of work, and whose income has plummeted by a quarter since 2008. The self-employed are not the digital whizz-kids of folklore but more likely to be freelance dog walkers and gardeners – pseudo-jobs whose owners are living with income precarity and poverty.

This structural over-supply of labour has been aggravated by the EU’s single market. The proportion of foreign-born workers in the UK working age population is now around 20%, compared to a steady 8% between 1984 and 1995.

The effects of an over-supply of labour has exacerbated by other changes in UK society. The secure tenancies and controlled rents of council housing have become a utopian dream for most people. The private rented sector, with tenancies that can be ended at a moments’ notice and rents that may eat up 60% of pay, has become the only alternative for millions, while lifetime tenancies for new council house tenants are being abolished.

“Human beings do not thrive in an atmosphere of relentless change over which they have little control,” says Anthony Painter of the RSA.

Internationally, the over-supply of labour has been a boon for multi-national corporations who scour the globe looking for the cheapest source of labour (a process misleading called ‘globalisation’). Between 1980 and 2007, the global labour force (people whose livelihood depends on working for pay) increased by 63%, from 1.9 billion to 3.1 billion.

“Not only has the growth of the global capitalist labour force (including the available reserve army) radically altered the position of third world labour, it has also had an effect on labour in the rich economies, where wage levels and stagnant or declining for this and other reasons,” say the Marxist economists, John Bellamy Foster and Robert W. McChesney. “Everywhere multinational corporations have been able to apply a divide-and-rule policy, altering the relative positions of capital and labour worldwide.”

The effect of this process on countries like the US, has been devastating. According to the behavioural economist Daniel Kahneman, US manufacturing and middle class jobs have been decimated in recent decades. “There are places where real incomes have dropped 30% over the last thirty years,” he told the Daily Telegraph. “There used to be a concept that if you do your job, and live your life properly, things will be fine. People don't think that anymore.” These places provide Donald Trump with his core constituency.

But the political consensus, the centre-left as well as the Right, is in purposeful denial about these developments. The resolution of governments has been to push people into any kind of work, while eulogising the benefits of free trade, immigration, deregulation and lower tax for corporations. “Public institutions should push against a dangerous tide rather than accentuate it,” says Painter. “We’ve done precisely the opposite.

The question is, if the ‘relative positions of capital and labour’ have been altered, how do you redress the balance in favour of labour? As Painter and many others have pointed out, Basic Income could imbue labour with a measure of bargaining power that it currently sorely lacks. People who now can’t say no because anything is better than nothing, would be empowered to refuse low paid, insecure work. This change would also give a shot in the arm to automation if armies of desperate people were no longer available on tap. It would spell the end for an economy feeding off cheap labour.

An expansion, not a contraction, of social housing, together with secure tenancies, would also take some of the bite out of the structural over-supply of labour.

This, however, is only half the equation. Do you need a global basic income to really make a difference to the over-supply of labour? Is that remotely feasible? In its absence, there are things you can do, such as reducing low-wage EU migration into private sector jobs. The danger is that countries lapse into isolated, regulated national economies, or worse. But forgetting the fact that you live in an exploitative, capitalist economy, and that an international free market in labour is no more conducive to human welfare than a free market in capital is, is not a safe haven. Neoliberalism, inside or outside the EU, does not work.

Thursday, 19 May 2016

The magic wand and biological determinism. The two faces of neoliberalism

According to Belgian psychologist Paul Verhaeghe, the psychiatric world is riven by two warring factions. On the one side there is the medical or illness model, which assumes that all mental illness stems from biological or genetic defects. Think of low serotonin levels ‘causing’ depression. Treatment involves taking pills, often indefinitely, to relieve the symptoms. Mental disorders are frequently viewed as lifelong afflictions a person must adjust to. The medical model is the dominant approach, adhered to by the majority of clinicians and doctors.

On the opposite terrain is what is known as the ‘biopsychosocial’ model. Under this way of thinking biology or genetics is relegated to a secondary position. Diagnosis focuses on the broader social context facing the individual and treatment is tailored to a person’s circumstances. This model is also far more open to a person making a recovery from mental illness.

Verhaeghe is resolutely on the minority side of the argument. “The vast majority of mental disorders are not illnesses,” he asserts, “but biopsychosocial manifestations in individuals of broader social problems.”

I believe the biopsychosocial model is essential to understanding how our capitalist, neoliberal society is at the root of many mental and physical illnesses. There is overwhelming evidence of the crucial role factors like childhood poverty, inequality, economic insecurity, loneliness, migration and bullying in increasing the risk of mental illness. According to one UK psychology professor, Richard Bentall, the link between childhood trauma and future psychiatric problems is a strong as that between smoking and lung cancer. In contrast, the medical model of mental illness just presents a closed mind.

But the biopsychosocial model also has a sinister side. It is being used to bully disabled people out of social security benefits by insisting they can make miraculous recoveries from their conditions. Disability, here, is regarded as partially caused by the attitude of the sick or disabled person. Welcome to the world-view of ‘welfare reform’ in the UK.

In defending the government’s transformation of the Disability Living Allowance into Personal Independence Payments, Conservative minister Lord Freud (the same one who believes food banks have mushroomed because they offer a free good) told the House of Lords that ‘we have gone for the biopsychosocial model’.

According to a report from the Centre for Welfare Reform, “the biopsychosocial model has been used to create new obligations for those suffering from common health problems, such as the responsibility to ‘recognise that the sick role is temporary, in the expectation of recovery’”.

In one case, the Department for Work & Pensions funded a medical trial for people with ME which was presented as an exciting success for biopsychosocial intervention. But the standard for ‘recovery’ was lowered after the research began meaning that a person’s condition could have worsened and they were still counted as having ‘recovered’.

Here is 'Biopsychosocial Man' in action: 

The DWP has incrementally re-classified the work related activity group of Employment and Support Allowance claimants (people judged unfit for work) as not really disabled. Before, the government only asserted that people in the WRAG group might be able to work at some point in the future and that full-time work could damage their health. Now, they are subject to a ‘shocking’ level of sanctions and, for new claimants, paid the same in benefits as ordinary JSA claimants, as an incentive, ministers say, to find work.

At the same time the government is trying to re-package unemployment as a personal failing or mental illness, as opposed to a social problem beyond the power of the individual to rectify. There are now psychologists in job centres and job coaches in GP surgeries.

This indicates a fatal flaw in the biopsychosocial model. When it applied to the individual alone and their ‘wrong attitudes’, it becomes coercive, tyrannical and vindictive. Applied to society at large, it is liberating.

Under neoliberalism, an unsuccessful person is either lazy or sick. If they are sick, they need pharmaceutical assistance (which creates a steady stream of profits for pharmaceutical companies). If they are lazy, their misguided attitudes need to be corrected by enlightened experts. Two sides of the same battered coin, which, sadly, is still legal tender. The social and economic organisation of society is taken as a given, and not worthy of consideration.

The medical model strikes me as a dead end, like trying to argue with someone who has their fingers lodged firmly in their ears. But the biopsychosocial model can be both oppressive and illuminating. Perhaps we need to drop the ‘psycho’. A biosocial model of illness has great explanatory power and it can’t be manipulated to scapegoat people and cloak the interests of the powerful.

Monday, 18 April 2016

Basic income versus the economy of coercion

 Proving basic income is affordable is merely the first skirmish in long war

In 2015, an academic from Birmingham University asserted that, contrary to the beliefs of sceptics, basic income was eminently affordable. Using Canada as his example, Richard Pereira quantified the likely effects of savings from the abolition of existing social security benefits, reductions in bureaucratic costs, a smaller burden on public health care and a crackdown on tax avoidance and evasion. His conclusion was that you could introduce a basic income at a ‘decent level’ without additional personal taxes. In fact, basic income might even enable reductions in personal taxes.

One of the priorities Pereira identified in making basic income affordable was plugging ‘tax leakage’ by multinationals and the rich. “Vast wealth is channelled away from public goods though … shady and secretive offshore jurisdictions,” Pereira wrote. “Some of the largest multinational companies are paying zero tax and receiving tax refunds and subsidies simultaneously.”

The release of the Panama Papers has lent Pereira’s claims about the affordability of basic income a distinct air of, to use a contemporary political buzzword, credibility. According to the Tax Justice Network, global offshore wealth amounts to $21-32 trillion. Get hold of that vast wealth and the whole political landscape shifts. Austerity loses its justification and basic income becomes a feasible aim. “Some may disagree with the notion of an unconditional cash grant, or object to it going to everyone. Just don’t say we can’t afford it,” noted one Panama Papers post-mortem.

The realisation that a colossal trove of wealth exists to fund basic income is coupled with a growing awareness that punitive welfare systems don’t even succeed in meeting their most elemental aim – that of saving money. All that checking on people’s fitness to work and whether they have applied for 47 jobs that week as they promised in their job search agreement, costs an inordinate amount of money. According the UK’s National Audit Office, the cost to the taxpayer of the private contractors carrying out fit to work tests is at least £600 million more than the government is forecast to save in benefits reductions. The ‘age of austerity’ should be renamed the ‘age of needless pain’.

But there is a danger that basic income advocates are lulled into the belief that all they need to do is rationally convince the public and policy-makers that a basic income is affordable, will lighten the burden on multiple public services and vastly increase personal freedom. People will slowly see the light.

This, however, is less than half the battle. A great many, very powerful people will not want basic income regardless of how affordable it is. They will fight against it mercilessly precisely because it will vastly increase individual freedom, and their entire worldview rests on human subjection.

The great German psycho-analyst and socialist Erich Fromm advocated a basic income sixty years ago his book, The Sane Society – he called it a ‘guaranteed subsistence minimum’. After refuting the idea that basic income sounds too ‘fantastic’ to be affordable, Fromm was less sanguine about convincing everybody that a basic income was necessary and right. “However, the suspicions against a system of guaranteed subsistence minimum are not unfounded from the standpoint of those who want to use ownership of capital for the purpose of forcing others to accept the work conditions they offer,” he said.

Even more than in Fromm’s day ownership of capital is now overtly predicated upon forcing people to accept the work conditions that are on offer. Economic recovery after 2008 rests upon low wage, insecure service sector work. According to economists, all the net growth in jobs in the US since 2005 has been in ‘alternative work arrangements’, such as contract and temporary posts. In Britain, zero hour contracts have mushroomed during recovery from recession, while other forms of flexible work contract have proliferated. In continental Europe, massive political weight has been expended to make it easier for employers to fire workers. In France, the Nuit debout protests are against a planned labour reform that would place the country’s entire labour laws up for negotiation with employers, including the 35 hour week.

All these changes are inherently about increasing coercion. “The labour market is never free,” says Paul Mason is his book, Postcapitalism. “It was created through coercion and is re-created every day by laws, regulations, prohibitions, fines and the fear of unemployment.”

The rise in sanctioning people on benefits in Britain for not looking for work with sufficient ardour and the hounding of sick and disabled people is not primarily about saving money because, as is evident now, money is conspicuously not being saved. The reason is to force people to take work at wages they can’t live on, make life on benefits so astoundingly awful that zero-hour contracts seem attractive, and to sound a clear warning to those in work that they need to knuckle under and obey. “Economics is the method,” said Margaret Thatcher. “The object is to change the soul.”

By contrast basic income threatens to undo all the hard work of neoliberalism in shoring up the power of employers. At present, as one basic income advocate says, “all negotiating power is in the hands of those offering the jobs and not those looking for them”. Basic income will grant palpable bargaining power to individuals in the labour market, and, for the first time, allow genuine personal choice. Erich Fromm thought basic income would be the beginning of real freedom of contract between employers and employees. Work will have to be interesting, or well-paid enough for people to want to do, or will be automated because no-one will.*.

But to the rulers of our societies this represents, not a dream of liberation, but a nightmare of the collapse of social coercion. Who knows where such a society will lead. Marilola Wili of the Swiss group, Generation Basic Income, contends that basic income will “unpredictably set human forces free in ways one may have never thought about”.

“Work for a salary is the bedrock of the system,” says Paul Mason. “We accept it because as our ancestors learned the hard way, if you don’t obey, you don’t eat.” Basic income will loosen that bedrock and quite possibly, in time, smash it completely. For that reason, many people at the summit of society will do anything to ensure it doesn’t come to pass. Let’s not kid ourselves, achieving basic income will be an almighty struggle. But it’s a struggle we need to embrace.

*Automation represents another danger basic income might pose to capitalism. According to Karl Marx, ‘the most fundamental law of capitalism’ is the tendency for the profit rate to fall as machines replace human labour, which is the ultimate source of value. If basic income cause a spurt in automation and a reduction in labour intensive employment, as unpopular jobs are increasingly mechanised, then profit rates may well, in time, crumble. Capitalism in the West has become reliant on low-wage, low productivity but labour intensive service sector jobs, which do not have to be done by people and in the future almost certainly won’t be, regardless of whether basic income is adopted. But basic income will accelerate that process. Human, sweatshop labour in China and East Asia has provided an enormous boost to profitability for multinational corporations, but that source of profit is drying up as the Chinese economy, and thus globalisation, slows. It is also true that, according to Marxian economics, various forces counteract the tendency for profit to fall, such as increased wages boosting consumer spending. Basic income could also be an offsetting force to falling profits, so its economic impact may be complicated.