The Corruption of Capitalism explains why the future is workless

ON LINE opinion – Australia’s e-journal of social and political debate
Posted Tuesday, 11 October 2016

Professor Guy Standing from The School of Oriental and African Studies at the University of London was a founding member of the Basic Income European Network (in recent years renamed the Basic Income Earth Network). Standing, for many years a senior economist with the International Labour Organisation, is perhaps best known for his book The Precariat: The New Dangerous Class published in 2011. His latest book is entitled The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay looks principally at the way neoliberalism has developed in capitalist societies in recent years.

Tim Dunlop, a Melbourne academic, journalist and author, has an abiding interest in the future of work. Recently he published Why the future is Workless. It is at times a rollicking good read and contains some amusing anecdotes. For instance, at page 41 he writes “Last year, my wife was invited to a breakfast meeting, scheduled to start at 6.30 am on a cold Melbourne morning. The subject of the meeting: work-life balance”! He quotes, at page 14, from the English Poor Act of 1552:

If any man or woman, able to work, should refuse to labour and live idly for three days, he or she should be branded with a red hot iron on the breast with the letter V (presumably short for vagrant) and should be judged the slave for two years of any person who should inform against such idler.

Not surprisingly Dunlop spends much of the first two chapters pointing to the deeply ingrained nature of the work ethic. At page 21, he notes that employment, which in ancient Greece was considered the duty of slaves, has become in capitalist countries “the defining characteristic of human worth”. At page 42, he declares:

We hold ourselves and others to impossible standards of participation even as 40 odd years of market liberalisation, technological development and growing inequality have made it plain that the system is not rewarding the average person in the way it once did. It is almost a psychosis, this elevation of work to the centre of our existence.

Hand in hand with this analysis he obliquely refers to Hockey’s 2013/14 pronouncements that “The age of entitlements was over ” by noting “These were not ‘entitlements’ as it is now fashionable to label them, but the material expression of what most citizens saw as the whole point of government.”

Standing, at page 12, makes the point that:

At the heart of neo-liberalism is a contradiction. While its proponents profess a belief in ‘unregulated’ markets, they favour regulations to prevent collective bodies from operating in favour of social solidarity. That is why they want controls over unions, collective bargaining, professional associations and occupational guilds. …Neo-liberalism is a convenient rationale for rentier capitalism.

In Australia, the stated grounds for seeking a double disillusion election in 2016 were a perfect example of Standing’s point. Dunlop, at page 209 says: “The big lie of neoliberalism is that it wants a small state, the truth is, that it wants a compliant state.”

At pages 29-30, Standing notes that in Western countries:

…rising productivity used to be matched by rising average wages…But, since the 1980s higher productivity has not led to higher wages. For instance, real wages in the USA have stagnated for over three decades while productivity has risen steadily.

Towards the end of Chapter 1, Standing considers the con of austerity economics, elaborating upon Dunlop’s point about “entitlements”. Standing returns to the downsides of austerity economics for the less affluent many times throughout his book.

Dunlop quotes extensively from Standing before going on in Chapters 4 and 5 to ask “Will a robot take my Job?” and “Will an app take my job?” It takes him 71 pages to discover these are not the real question. This was the least useful part of the book for me. A redeeming feature occurred at page 148, when he wrote: “if the state genuinely believed that unemployment benefits were a temporary payment to people ultimately able to find employment, there would be no need to impose conditions” because the payment would only last a short time.

Chapter 6 examines universal basic income and he again draws heavily upon Guy Standing’s work. He accepts that a universal basic income must be universal, provided unconditionally and be a supplement to the welfare state not its replacement. He could have been pre-empting a motion passed at the United Kingdom Trades Union Congress, representing six British million workers in September 2016. Dunlop concludes that an unconditional basic income would radically transform our relationship with paid work not only providing a safety net “for those who fall through the cracks, but a trampoline for everybody to launch themselves into society on terms that are much more their own.”

Standing in Chapter 2 looks at the various ways corporations find ways to defraud the citizens and in Chapter 3 he examines some shonky rich corporations and politicians and the various ways they extract subsidies from the state or avoid taxes. At page 109, he states “Tax credits look like welfare payments, but they are in reality a subsidy, providing capital with unearned income. They make it easier for employers to pay low wages (and employ part-time rather than full-time staff). He suggests they are similar to the oft-criticised 19th century English Speenhamland system.

Guy Standing on page 166 notes that:

The growth of public debt in most industrialised countries is largely due to tax cuts for the wealthy and subsidies for selected interests. Cutting public debt, if desired, could be done by raising taxes and eliminating regressive and inefficient subsidies.

In Chapter 5 Standing lists the ways in which rich people, corporations and corrupt politicians are acquiring that which we own in common whether it be land, opportunity, minerals, petroleum or whatever and removing our common ownership – he concludes that “the precariat has the most interest in recovering the commons from the rent seeker.”

Both Dunlop and Standing note the phenomenal increase in the share of income going to owners of capital. Standing says that in the twentieth century it made sense to focus on wage bargaining but no longer. At page 291, in a call reminiscent of The Communist Manfesto, Standing declares “The precariat have nothing to lose but their insecurity.”

Both writers conclude that if we are to solve the issue of increasing technological/ robotised unemployment, and if it is not to end in tears, then an unconditional basic income is the best method of ensuring income security for all.

Standing in his final Chapter concludes that:

Existing social assistance schemes are costly, administratively inefficient, inequitable and ineffectual in reducing insecurity and inequality… targeting and means testing do not work as intended. Still, moralistic politicians continue tightening conditions, making schemes more selective and punitive and stigmatising some of society’s most vulnerable people. Workfare is inevitably dressed up shamelessly as ‘reintegrating’ people into society.

And Dunlop, at page 197, claims that:

In a world where technology is likely to drive either job losses, or at the very least, a rise in precarious employment, the idea that people should have to rely on having a job in order to participate in society in a decent way is an increasingly obscene idea. To maintain our current work ethic – one that equates having a job with human decency and moral rectitude – is not only anachronistic but cruel.

Should you, gentle reader, wish to read more about basic income I can recommend a 2016 Palgrave MacMillian publication entitled Basic Income in Australia and New Zealand: Perspectives from the Neoliberal Frontier edited by Jennifer Mays, Greg Marston and myself.