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Does the UK really need 'wealth creators' and 'hardworking people'?

The two phrases, so beloved of politicians, stem from a fundamental shift in the role of the worker in post-industrial Britain.

David Cameron meets the hardworking people of Alden Group. David Cameron meets the hardworking people of Alden Group. Flickr/Andy Connolly. Some rights reserved.

Over the past few years, British politics has been plagued by two much-mocked terms. The first is “wealth creators”; the second, “hardworking people”. They are undoubtedly intensely irritating, especially when repeated endlessly by robotic politicians. But given the cynicism of contemporary electoral politics, it is highly doubtful such terminology would be used so profusely unless it had been first approved by legions of focus groups. They must appeal to someone. But to who? And why, and why now?

Political rhetoric is historically specific. It is as difficult to imagine any political party campaigning successfully in favour of “wealth creators” during the Keynesian-Fordist era, as it is to imagine one today explicitly promising, as Labour’s Clause IV once did, to secure “the common ownership of the means of production”.

Rhetoric does not fall ready made from the sky. There is a material basis both to the way people understand their position in society, and attempts by political parties to capitalise upon that understanding. Rather than being dismissed, perhaps “wealth creators” and “hardworking people” should be regarded instead as Benjaminian hieroglyphs, codes to be cracked – clues that reveal, on closer inspection, rather more than meets the eye.

The standard narrative around “wealth creators” is that the government should “support businesses”, and those who invest in them, because they “create jobs”. If taxes are too high, or “red tape” too burdensome, the rich will be unwilling to risk their money in the UK, tax revenues will drop, unemployment will rise, and growth disappear.

This is classic “trickle down” economics, triple-distilled Thatcherism – and indeed only rose to prominence with the beginnings of the Thatcherite brand of post-Fordism. It has not been seriously challenged since. In fact, Miliband’s pledge “to put an end to the tired old idea that as long as we look after the rich and powerful we will all be ok” is the nearest a leading British politician has come to rejecting it – something which Labour’s undead Blairite wing were quick to pounce on as the reason for his defeat.

On the face of it, the “wealth creator” line should be pretty simple to combat. Because, of course, the rich do not “create wealth”. They merely appropriate it from the working class, who are the “real producers” of society. If it appears as though wealth arises from the ideas and benevolence of the rich that is merely because, in a capitalist society, workers do not have access to the means of production unless capital provides it.

Given that the vast majority of people do not fall into the category of “wealth creators”, it should not be too hard to demonstrate that the idea that wealth descends from above is false. Indeed, that task formed the basis of the 20th century workers’ movement, one which by the 1960s it had more or less successfully completed.

So why is this is not the case today? Why, unlike the 1960s, do so many people seem to accept, at least tacitly, that the economy is reliant on those who “create jobs”? Have they been hoodwinked by the right-wing press? No doubt – but a more concrete explanation lies in the structure of a post-Fordist economy itself.

If we look at how the British economy actually functions, where profits come from, what type of work most people perform, and the role that work has in the processes of capital accumulation, then from a perspective within the horizons of that economy, it is not at all obvious that the “wealth creator” argument is fallacious.

The meaning of de-industrialisation

The UK is the most de-industrialised country in the world. As an ONS report on the British economy put it last year:

“The share of UK GDP attributable to production industries… declined from 41% in 1948 to 14% in 2013. In contrast, the share attributable to services industries has risen from 46% to 79% over the same period… The UK manufacturing industry has declined at the fastest pace of the G7 economies; resulting in the UK moving from having one of the largest shares in 1948 to the lowest in 2012.”

The reasons for the extremity of this shift have been well documented. Increased automation, saturated markets and working class resistance led to a crisis of profitability in the late 1960s. Social democracy faced economic ruin. Add Thatcher’s revanchist desire to destroy the working class movement into the mix, and the stage was set for the transformation from a Fordist economy founded on full employment and heavy industry, to a “flexible” one dominated by “services”.

To be a worker in a post-Fordist economy means something quite different to that under Fordism. It means sitting in an office in front of a computer, or standing in a shop, rather than in a factory or down a mine. It means data entry and admin, marketing, PR and sales. It means call centres, middle management, freelance graphic design. More fundamentally, it means a seismic shift in the role that workers have in the overall process of capital accumulation.

The majority of work under Fordism took place at the point at which commodities were produced. Fordist workers may well have hated their work, but they were in no doubt of its critical importance in sustaining society. If they stopped working, the lights went out. Their daily activity, and the knowledge of its significance – which they believed would continue in any future transformed society – provided an immediate political project: taking direct control of the means of production. This was basically achieved in the UK after World War Two via the nationalisation of key industries.

By contrast, with commodity production outsourced to factories in the global south, the majority of work in a “service economy” is instead distributed across the accumulation process – turning money into labour power or means of production, organising the transportation of commodities or raw materials from one side of the world to another, or transforming commodities back into money.

The relation of this work to the actual process of production is wholly abstract – distant to the point of intangibility. The relationship to the commodity becomes merely one of a flurry of emails before it exists, or its transmission and consumption afterwards.

Working out how a day of data entry in a bleak business park relates to the profits of your own employer, let alone the commanding heights of Goldman Sachs et al, is no easy task. For most service workers, it is really not at all obvious how their particular job fits into the incredibly complicated, interwoven networks of the global economy.

David Graeber. David Graeber. Flickr/Internaz. Some rights reserved.

It is perhaps this confusion which lies behind what David Graeber has called the “phenomenon of bullshit jobs”. As he notes, “huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed.” The truth is that from capital’s point of view, those tasks do need to be performed. They may or may not be productive, and are almost certainly not socially useful, but they are necessary for capital to reproduce itself. But that necessity, from the perspective of the worker, is by no means self-evident.

This is one reason why so few people in a post-Fordist economy, outside of the “creative” elite at least, identify with the content of their jobs. There is very little to identify with. While entire communities and cultures were built, rightly or wrongly, around the identity of being a coal miner or steelworker, all that remains for most service workers is the abstract form of “work” itself.

Here the appeal of the “hardworking people” trope becomes evident. Even if they hate their jobs, and experience nothing but alienation from their working lives, the formal status of “working hard” remains one of the few ways people can gain self-respect in a society that has destroyed the old avenues of working class emancipation.

But note that the term is “hardworking people”, rather than “class”. This is an appeal to a working world formed by individualised contracts and powered by negative solidarity: a world where as long as I have to work ever harder in a meaningless job in order to survive, then I’m going to make damn sure you do too.

A machine to capture value

The economist John Smith has argued that this pattern of globally networked capital accumulation means the primary purpose of western post-Fordist economies is now to “capture” value produced elsewhere. This has led to a “GDP illusion”, because GDP as a measure records only where value is realised on the market, as opposed to where it is produced.

“The main symptom,” Smith writes, “is a systemic underestimation of the real contribution of low-wage workers in the global south to global wealth, and a corresponding exaggerated measure of the domestic product of the US and other imperialist countries.”

Smith shows how the vast profits made by companies such as Apple, and by extension the “growth” enjoyed by western economies, are only possible because of the freedom capital has to exploit global wage differentials. Companies can search the planet for the cheapest labour costs, avoiding unionised, better paid workforces. It can then spectacularly mark up the prices of the finished products to sell to precisely those better paid workers.

This process obviously benefits capital, but also the western states – and their populations, as the taxes on these profits pay for the welfare state. As Tony Norfield puts it, only the “superexploitation” of living labour in the global south “explains why the richer countries can have lots of shop assistants, delivery drivers, managers and administrators, accountants, advertising executives, a wide range of welfare payments and much else besides.”

To a great extent, the UK’s economic growth, millions of jobs, and the welfare state itself, are dependent on the success of this strategy. Here the importance of “financial services” to post-Fordist economies becomes apparent – finance is the key mechanism by which global value is captured.

Add to this the other crucial mechanism, real estate, and it is tempting to conclude that the UK economy is little more than a machine for the capture of value. All that Britain has bothered to produce over the last 30 years has been the arms needed to defend that machine.

To be a worker in such an economy is to be in an exceedingly precarious position. This becomes miserably clear when looking at the jobs market in post-industrial areas. Under Fordism, the natural resources of a particular region, such as coal, provided local workers with a certain amount of leverage in their struggle with capital. Capital could not just up sticks in the face of worker’s demands.

1984 Miners Strike, Rotherham SilverWood Miners Branch Flickr/Chris. Some rights reserved.

In a post-Fordist economy dependent on a steady supply of captured value, capital has a far clearer advantage. Low wages might attract a company to a particular region for a time, but all parties are aware it is a transient deal – the company could just easily have its value transmitted elsewhere in the country, or indeed the world.

The continual talk of the need for “job creation” implicitly recognises the contingency of much work in a service economy. And it goes some way to explaining the historically low levels of political activity in the workplace. From the perspective of a worker within the horizons of a post-Fordist economy, tranches of captured value, and their accompanying jobs, really do seem to be created out of nothing. In such a situation, the risks involved in going on strike are immeasurably greater than in an era of Fordist full employment. Hence the obsequious paeans to “wealth creators” – or rather, “value capturers” – go unchallenged.

As false as “wealth creator” worship is, it is not a lie. In order to survive, countries, regions, cities and workers themselves really do have to extol the virtues of their “flexibility”, competing to make themselves as attractive as possible to those who can provide access to captured value. This was true before the economic crisis, and its urgency has only increased since.

Far from being merely “ideological”, austerity is a deliberate, rational strategy to lower the cost of reproducing a workforce of value transmitters, pushing down wages, working conditions and welfare provision in order to ramp up the rate of relative surplus value on offer.

Furthermore, few of the tasks of value transmission present themselves as clear targets for turning to alternative purposes, even in less precarious conditions. Most service jobs would be rendered utterly meaningless outside of the particular network of accumulation of which they are a part. Other than reusing the physical space itself, what would be the communist use-value of a call centre or estate agent? There is no positive political project to be affirmed here.

Despite the nostalgic dreams of the social democrats, the Spirit of 1945 is impossible in a post-Fordist economy. Workers’ control of, say, a JD Sports store would look more like the 2011 riots than a nationalised industry, a carnival of destruction – not because of some supposed lack of political consciousness, but precisely because there are no other avenues of action available.

Council housing as transitional demand

Acknowledging that gaining access to captured value is the primary means of survival in post-Fordism makes clear the political importance of the booming housing market. With wages declining and the welfare state decimated, equity in a house rising in value is the main means by which the machinery of capture can keep large chunks of its “hardworking people” onside. It is also one of the few ways the working class can offset the risks of precarity. This is why Tory policies such as right- and help-to-buy remain popular, despite directly leading to record levels of homelessness, evictions and gentrification.

In Spain, mass foreclosures of homes have hit people from all sections of society, making a popular movement based around housing not just a possibility but a reality. By contrast, the housing crisis in the UK remains concentrated on council tenants and a private rented sector divided between those waiting for their chance to access captured value by “getting on the housing ladder”, and others desperate for social housing. In such a situation, abstract demands for “more homes” risk merely fuelling further the buy-to-let market, and can happily be taken up by the right as well as the left. Only a demand for housing removed from the market altogether can provide any solution to the housing crisis.

Like political rhetoric, political demands are historically specific. The effect of a huge increase in council housing provision today – once so centrist a policy that Harold Macmillan’s Conservative government built 300,000 in a year – would be so radical it virtually becomes a transitional demand. A mass of housing outside the market would undermine the key mechanism of value capture manifested in real estate speculation by lowering demand, prices and equity – and thus destroying huge swathes of capital.

This would not only hit the means of survival for millions of homeowners, for whom their house is not just a place to live, but also their pension. It would also threaten the UK economy as a whole. Even during the “boom years” of Thatcher and Blair, as Aditya Chakrabortty notes, “the amount Britons took out in housing equity withdrawal outstripped GDP growth”.

Three Flickr/sarflondondunc. Some rights reserved.

This dependence on the value captured in housing equity to drive growth has in all likelihood increased as public spending has reduced. As it stands, then, the housing crisis is no such thing either for capital, the state, or the 64% of the population who own their homes. It is actually in their rational economic interest for it to continue.

All of this leaves those advocating a social democratic reform of capitalism, represented perhaps by a return to “the real Labour Party”, with some questions to answer. How can social democratic governments in economies dependent on captured value prevent capital flowing away to somewhere less troublesome? If they refuse to push down the wages of a “flexible” workforce, and destroy the key mechanisms of value capture – speculative finance and real estate – where will their tax revenues and “growth” come from? What does a UK economy devoid of housing equity look like? And this is without even taking into account the Fordist-Keynesian crisis of profitability.

Any “rebalancing” based on the reintroduction of production is, in a relatively high wage, highly automated economy, objectively impossible without mass unemployment.  In this context, the social democratic left is reduced to making moral appeals – pleading with people to be nicer (or “better”, as the Labour manifesto put it) while acknowledging it cannot alter the fundamental structure of an economy dependent on the deepening of austerity for its reproduction.

The hope for the radical left is that it is not clear how long the current situation can hold. In order for the rate of relative surplus value to be sustained, austerity will need to hit more and more people. Levels of homeownership are dropping precipitously, making the contradiction between the use and exchange value of housing ever sharper. Another financial crisis is looming, and the UK’s utter dependence on the mechanisms of value capture make it more vulnerable than ever.

Any cessation in the flow of value from the global south, any dip in the price of land, and the knife-edge balancing act of the UK economy will be in peril. The material basis for a mass movement is beginning to form, with radical housing demands, rather than workplace struggle, necessarily at its core.

But there are no guarantees. The final cataclysmic moment of destruction may never arrive – as Walter Benjamin put it: “That things ‘just go on’ is the catastrophe. It is not that which is approaching but that which is.” But the first step in facing up to that catastrophe is to recognise it for what it is, with no illusions. Because it is not the radical left who are “unrealistic”. Rather it is the social democrats who refuse to acknowledge what is staring them in the face, who continue to ignore history, insisting instead that moral appeals can bring about a return to a “fairer” capitalism that never really existed.

 

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About the author

Matt Bolton is a PhD student at the University of Roehampton. He tweets @matatatatat.


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