Fighting precarity: a paradigm shift from equality-in-prosperity to solidarity-in-wellbeing

[Celerity]

Notes on a political economy of trust





https://progressivepost.eu/spotlights/fighting-precarity-a-paradigm-shift-from-equality-in-prosperity-to-solidarity-in-wellbeing

Contemporary capitalism: a diagnosis

In Capitalism on Edge (2020), I have observed that the nature of contemporary capitalism makes these strategies ineffective for progressive politics. This is because under the conditions of global market integration, the key systemic dynamic of capitalism – the competitive production of profit – cannot be effectively countered by distributive measures and structural reforms. A comprehensive plan for transcending capitalism and eliminating the injustices associated with it (impoverishment, exploitation, alienation and ecological crisis) must thus address all three dimensions of capitalism’s impact:

1) the relational dimension of the unequal distribution of power which generates inequalities and exclusion;

2) the structural dimension of the institutions through which relational injustices occur;

3) the systemic dimension of the competitive production of profit which binds science and human creativity to the profit motive. In what follows, I will address the importance of this third dimension for progressive social reform and will propose some solutions.

The overarching significance of this third, systemic dimension in the functioning of capitalism is determined by the idiosyncrasy of our current modality of capitalism. In its historical development, democratic capitalism (the prevailing form of capitalism in Western societies) has transitioned through four sequential forms: the liberal (entrepreneurial) capitalism of the 19th century, the coordinated (or ‘organised’) capitalism of the four post-war decades, the neoliberal capitalism of the last two decades of the 20th century, and currently, what I have described in my recent book as ‘precarity capitalism’ – a modality that emerged in the early 21st century and matured in the course of coping with the economic crisis of 2008 and the Covid-19 pandemic of 2020. This current modality is marked by two distinctive features. First, global market integration has expanded the scope and deepened the intensity of competitive pressures. Importantly, the global economy can no longer be plausibly described as a space of national economies integrated through trade. It is a system of transnational production networks and supply chains which engulf a multitude of political regimes (from the autocracies of Vietnam and China to the liberal democracies of Europe) and national economic systems (from the state-controlled socialism of Vietnam and the state-managed capitalism of China to the free market capitalism of America).

The ease with which autocratic regimes increase profits through wage repression and environmental devastation further intensifies the competitive pressures on liberal democracies. Furthermore, the IT revolution, or digitalisation, has facilitated automation. This, in turn, has allowed an increase in productivity while at the same time reducing the need for human labour. These features of capitalism began emerging in the late 20th century. As a result, governments across the left-right political spectrum began to undertake a policy shift to adjust to this new reality: they committed to maintaining competitiveness in the global market as a top policy priority. The switch from the growth-and-redistribution agenda of the post-second world war welfare state to a stress on competition in the late 20th century and, even further, to an emphasis on competitiveness in the early 21st century has had a far-reaching societal effect. In pursuit of competitiveness, governments started to undertake the liberalisation of labour markets which allowed them to produce a flexible workforce that could be adjusted to the demands and pressures of global competition. At the same time, governments began helping those economic actors (large corporations) that already had a competitive advantage in the global economy. This increased competitive pressures on the rest of market participants. Governments also reduced social spending as they deemed that in conditions of open markets, where capital flight is easy, the state had lost much of its power to tax capital. This tendency was exacerbated by the financial crisis of 2008 as governments adopted ‘austerity policies’ (via the reduction of government spending and/or income tax increases) in an effort to reduce budget deficits and stabilise their finances.

The combined effect of these technological and policy shifts has been the creation of massive precarity – a state of economic, social, and psychological insecurity. The experiences of precarity vary according to type of employment and level of remuneration. However, overall, precarity as a social condition rooted in real, perceived, or anticipated threats to livelihoods, cuts across gender, age, class, and occupational differences. Precarity is at the centre of the social question of our times and should be the focus of progressive economic and social policy. It is the failure of public authority to counter precarity that has eroded solidarity, diminished citizens’ trust in the main institutions of liberal democracy, and fostered the anti-establishment revolt – the upsurge of populism. Precarity is generated along two trajectories: a personal and a societal one. Along the personal trajectory, precarisation is a result of diminished security of key sources of revenue. This is, typically, a result of job insecurity, the investment of personal savings (including through pension funds) in global financial markets, and the reduction in scope and amount of social security provisions. Along the societal trajectory, precarisation results from diminished investment in public services such as healthcare and education, and from subjecting essential spheres on which societal well-being depends (such as science, culture, education and health) to imperatives of profit-creation.

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[EarnestPutz]

1. Really interesting article. Bookmarked for further consideration. "Precarity" is quite a concept.

[Celerity]

2. Precarity by design is the standing order of the day for vast swathes of the US socio-economic

superstructure. Cannot let the proles get the least bit content and unstressed, else the politics of division, the primal cutthroat competition, and the systemic extraction of wealth from the many (who make up the lower 90% plus of the pyramid) on up to the few will start to break down. Live to work, and yet the work yields less and less in actual inflation-adjusted remuneration as the years and then the decades roll by.