Sunday, October 6, 2013

Workfare, neoclassical economics and tabloid mindsets.

I am strongly opposed to the concept of mandatory unpaid labour (Workfare) for the unemployed. I've explained my opposition many times, in articles like this, this, and this, so for the sake of brevity* I'll avoid spelling out all of my own objections again here.

One of the most common right-wing retorts to a stated objection to Workfare is the attempt to smear the Workfare critic with the accusation that they must themselves be unemployed. Here  are a couple of examples from the Another Angry Voice Facebook page:
"How many you people on here actually work !!?????"

"If you stopped living out of the working man's pockets and got a job you wouldn't even have to worry about Workfare would you?"

This kind of pitiful ad hominum smear attempt is a rubbish argument from many perspectives, not least the fact that it implies that people that do happen to be unemployed somehow have less legitimacy in talking about Workfare (even if they might have direct experience of it) than an employed person that probably knows very little about the workings of Workfare but strongly approves of the idea of "punishing the scroungers".  [Just for the record, I do have a job and I don't claim unemployment benefits - not that that gives me any greater legitimacy to write about Workfare than anyone else]

This "only the unemployed oppose workfare" argument is utterly facile, and perhaps normal people would simply dismiss it as a display of narrow minded stupidity and think no more of it. I'm not so inclined to dump it in the "too stupid to even bother criticising" bin and move on. I believe that there is something to be learned by analysing some of the underlying assumptions that motivate such comments, in order to get a peek into the right-wing mindset, and also to demonstrate how logically incompatible such pro-Workfare views are with the neoclassical dogma (often referred to as "neoliberalism" or "Thatcherism") that underpins virtually every element of "Modern Conservatism".

Lets start with the glaring assumption. The idea that only the unemployed would bother to complain about mandatory unpaid work schemes for the unemployed. This may seem like an absurd logical leap to you or I, but under the pseudo-economic ideology of neoliberalism (in combination with the requisite level of ignorance) it actually makes perfect sense.

Neoclassical economics tells us that rational self-interest ("greed" or "I'm alright Jack-ism" in laymans' terms) is the only true virtue, because under their pseudo-economic belief system, "market efficiency" is achieved through pursuit of perfect self-interest. What is more, under their bonkers theories, other traditional virtues such as "charity". "empathy", "altruism" or  having "a sense of social justice" are actually aberrations because they defy rational self-interest, harm market equilibrium and undermine "market efficiency".

With this kind of mindset it is easy to see how the tabloidism infused mind could jump to the pseudo-logical conclusion that only the unemployed would ever bother to rail against these schemes. After all, there is no immediately apparent rational-self interest for the working individual to waste their time expressing opposition to something which doesn't directly affect them is there?

The immediate criticism of this kind of attitude is that, just because the concept of "social justice" is alien to the neoliberalism riddled Conservative ideology, doesn't mean that it doesn't exist in reality. Some of us feel duty bound to speak out against injustice, even if we ourselves are not directly subjected to it. The problem with this argument is that it is clearly a left-wing "appeal to morality" argument. This kind of argument can easily be dismissed as "wishy-washy politically correct moralising from a pack of delusional leftie do-gooders", in the manner that so many people have been conditioned to by the right-wing gutter press.

Another criticism that should carry more weight with the tabloid thinker is that an overtly pro-Workfare stance betrays a sense of complacency. Perhaps it is not in the worker's immediate interests to criticise mandatory unpaid labour for the unemployed. However, unless they have perfect confidence in their 100% employability for both the short-term and the long-term future, it would take a great deal of complacency for them to imagine that they will never, under any conceivable scenario, be directly or indirectly affected by the ever growing number of such mandatory unpaid labour schemes. Workfare already applies to many people that have been struck down with debilitating illnesses and permanent disabilities, so the Workfare supporter would have to be 100% confident that serious accidents or illnesses won't ever, under any circumstances, happen to them (or that they have sufficient means to support themselves under any such circumstances, without ever needing to recourse to public funds).

To take it a step further, is the Workfare supporter 100% confident that the scope of Workfare won't have been expanded to include pensioners (as some politicians have already suggested) by the time they come to retirement age? 
Now we'll return to the neoclassical model that all modern Conservatives are trained and indoctrinated into supporting, even though the majority of them don't actually have the faintest clue about what neoclassical economics is actually all about.

Neoclassical pseudo-economic scripture tells us that labour is a commodity, to be bought and sold on the open market. In real life, it is obvious that labour is much much more complex than a simple commodity like steel, but then neoclassical economics has only ever maintained a very obvious pretense that it is actually meant to represent any kind of objective reality.

If, for the sake of argument, we accept the backwards assertion that labour is a simple commodity*, then what do we believe would happen to the price of the labour commodity if the UK state began systematically supplying employers with this commodity for free?

The supply of free labour would obviously drive down the market price for labour.

If employers can get labour for free, it is clearly in their rational-self interest to take the free labour instead of paying for it on the labour market (by employing an individual with a contracted wage, National Insurance costs and other potentially costly labour rights). The more unwaged and rightless workers that the state feeds into the workforce, the fewer paid positions are going to be made available in the labour market as a consequence. This creates a fall in market demand for labour, and therefore, a fall in the price of labour due to increased competition in the labour market.

Imagine the scenario with a real commodity such as steel. If the UK state set up a taxpayer funded system to supply British businesses with free steel, this would have a knock on effect in the global steel market: British companies would buy less steel, aggregated global demand for steel would fall, and as a consequence the price of steel would fall.

In the real world the analogy falls down because labour isn't a tangible commodity like steel. The government would have to source the steel they are giving away for free (which would affect the aggregated market price) because steel can't just be willed in and out of existence like labour can (Should I take some unpaid leave to attend my cousin's funeral? Should I do my usual 10 hours overtime, or should I take the financial hit of not doing it in order to spend a bit more time with the kids this week?  I feel really ill, can I afford to take a day off work?).

Common sense dictates that labour and commodities are entirely different, and should be treated as different and distinct. However, we're trying consider Workfare from a right-wing perspective, so we'll continue the facade that labour is a class of commodity.

The reduced market demand for labour caused by the systemic supply of free labour into the market by the state should obviously be far more concerning to some workers than others. People working in the retail sector, elderly care, local councils and low-mid skilled manufacturing and distribution jobs should be particularly concerned because these are the areas where Workfare is currently encroaching, meaning these are the kinds of positions that are particularly under threat from outright replacement by a succession of Workfare slaves, or at the least, worsening pay and conditions. For workers in these sectors to support Workfare is totally irrational because such market interventions clearly conflict with their personal self-interests. To put this rather more bluntly: If you work in any of these sectors and you support Workfare - You're nuts - You're doolally - You're batting for the other team - You're off your bleedin' rocker!

Again, complacency comes into this because many right-wing people (the kind that define their political worldview through the assimilation of simplistic tabloidisms) like to believe that their jobs are completely safe. They don't stack shelves, pick up litter, send parcels or feed elderly people for a living, so they are confident that they wont be replaced. Their job is safe and they're "alright Jack". 

There are two problems here, the value of their labour is still undermined by the fact that there are more people competing for fewer paid jobs in the labour market, giving employers ever more excuse to engage in wage repression across the whole workforce. If labour is some kind of transferable commodity as neoclassical economics dictates, then the aggregated price of labour is going to fall as a result of this state administered manipulation of the labour market.

The other problem is that the more people that get forced onto these schemes, the higher the skill-set of the unpaid workforce is going to become. Eventually corporate interests are going to cotton on that it is in their rational self-interest to pressurise the government to begin compelling workers with higher skill levels to work for no wages in their specialist fields. Thus the unemployed welder won't be compelled to stack shelves at Poundland as punishment for losing their job, they'll be compelled, under threat of absolute destitution, to do their old job, but now for no wage. Are all of the potential future labour prospects of these Workfare supporters 100% safeguarded against the possibility of Workfare encroachment?

This analysis means that from a neoclassical perspective, it is clearly in the personal self-interest of the vast majority of workers to oppose this state manipulations of the labour market in order to undermine wages and working conditions. This means that from a neoclassical perspective, the rational course of action is for the worker is to actually to join a trade union, stage protests against the use of Workfare in their own workplace, write to their MP, get involved with Boycott Workfare, or at the very least, tend to express their opposition to the use of mandatory unpaid labour.

What is it then, that drives so many workers to irrationally ignore their own economic interests and to commit the ultimate neoclassical meta-crime of actively supporting state administered labour market manipulations that go against their own rational self-interest?

Perhaps the answer is "Conservative Justice". This form of justice is not concerned with maximising social utility (reparations for victims, rehabilitation for offenders, protection of the public from the non-rehabilitated / unrehabilitatable ...), it is instead driven by a desire to enforce punishment upon transgressors. It's the authoritarian idea that people are like puppies that need to be smacked on the nose by the state to teach them not to crap on the carpet. As far as the tabloid thinking right-winger is concerned, not having a job is a crime that needs to be punished. To them a virtuous society punishes those that don't work, so they get a warm glow of social satisfaction from the thought of transgressors getting their just deserts. They feel that the fact that this punishment scheme exists, is restitution enough for the for the fact that they work hard for a living, whilst other people don't. The state administered punishment of transgressors is sufficient to assuage their burning sense of injustice that some people have a roof over their head and food in their belly despite not having a job.

Even though this kind of mindset is repulsive to people with developed senses of social justice, this "punish the transgressors" attitude is clearly a primitive kind of social justice in the minds of right-wing tabloid thinkers because it is a faith position that society should be structured in a particular way. This means that under neoclassical pseudo-economic dogma, it is clearly an aberration, because it puts some favoured social objective (that transgressors get their comeuppance) above the pursuit of rational self-interest.

If the working right-wing thinker was properly tuned in to the pseudo-economic dogma that underpins the whole edifice of modern Conservatism, they would vehemently oppose Workfare schemes. The only way it could possibly make rational sense for workers to support Workfare would be if they held significant financial interests in the companies that utilise Workfare labour (to drive down their wage bills, and maximise their corporate profits); in which case supporting Workfare could well be in their financial best interests.

It doesn't matter how riled some workers might feel that other people seem to be getting a "free ride", there is absolutely no way to make rational their support for a government labour market manipulation scheme that undermines their own wages and working conditions (both now, and under unknowable future circumstances too), unless of course they have sufficient financial interests in companies that exploit Workfare to outweigh the negative consequences on the value or even the continuance of their own paid labour.

OK. I believe I've clearly demonstrated that workers supporting Workfare is irrational. Even when considered from within the warped pseudo-economic paradigm that is almost universally accepted (explicitly or implicitly) amongst right-wing thinkers, it is clearly irrational, because neoclassical dogma tells us that the the supply of free labour drives down the commodity value of  labour. Therefore it is clearly in the rational self-interest of the majority of workers to actively oppose mandatory unpaid labour schemes in order to prevent the value of their own labour being undermined.

I apologise if all the economics talk has annoyed or frustrated you. If it has, yet you've still managed to read this far despite it, I'll leave you with a more catchy, and less economics riddled criticism of Workfare as a reward.

Ian Duncan Smith and the Tories have repeatedly used the justification narrative that herding the unemployed onto mandatory unpaid labour schemes is somehow "ending the something-for-nothing culture". Only in the Tory mindset is it possible to believe that "the something for nothing culture" can be "ended" by using their political powers to provide their corporate mates with a steady supply of free labour, all paid for at the taxpayers' expense.

 Another Angry Voice  is a not-for-profit page which generates absolutely no revenue from advertising and accepts no money from corporate or political interests. The only source of revenue for  Another Angry Voice  is the  PayPal  donations box (which can be found in the right hand column, fairly near the top of the page). If you could afford to make a donation to help keep this site going, it would be massively appreciated.

* If it even possible to describe a 2,000 odd word essay on neoclassical economics, tabloid mindsets and the value of labour as having in any way the property of "brevity".
 ** For more on the absurdities in the neoclassical definition of labour, check out "Debunking Economics (revised and expanded edition)" - Steve Keen, Chapter 6.

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What is ... Wage Repression?
 What is ... Neoliberalism?  
Mixed Economy vs Neoliberalism
Margaret Thatcher's toxic legacies
What is ... a Justificiation Narrative? 
The Great Neoliberal Lie

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