Special Reports / Open markets are a fraud

Open markets are a fraud

Guy Standing in conversation with Łukasz Pawłowski · 30 June 2015
We’re seeing the end of social democracy of the XX century variety. Labour and social democratic parties of the old Swedish, German, Spanish model of social democracy have reached the end.

Łukasz Pawłowski: Is there one precariat or many? If there are many, what are the characteristics that differentiate them and yet make parts of the same general group?

Guy Standing: I’ve defined the precariat in terms of distinctive relations of production and distribution and distinctive relations to the state. Yet it’s still internally divided into three factions, which I discuss at length in the new book The Precariat Charter. The first part of the precariat consists of people who have fallen out of old working class communities. Their parents were dockers, ship builders, miners, etc. That group is relating its relative deprivation and insecurity to a sort of lost past. They tend to listen to populist, far-right and neo-fascist groups, particularly in countries where there is a sizeable migration population.

Are migrants themselves not a part of precariat?

The second group in the precariat consists of the migrants and other minorities, who feel the insecurity, but aren’t drawn to the far right. They prefer to keep their heads down. So they get on with surviving, tend not to engage in politics very much, but every now and then the pressure gets too great and they explode – just like in Stockholm two years ago.

And the third group?

The third group, which I think is the most relevant in the longer term, consists of the educated, many of whom are young, with high percentage of women. They went to college or university where they were promised a secure future, career and a stable income. But when they graduate they realize they were sold a lottery ticket which actually doesn’t offer a good future and – by the way – is getting more and more expensive. This part of the precariat is the one that I pin my optimism on, because they realize that the far-right option is unacceptable. A few, as in Poland, may be drawn by libertarian politicians, but the majority, and we can see it now in the Southern Europe, wants more progressive politics.

Some of them claim they want to get rid of politics altogether and replace it with some vague notion of community rule.

For a while they reacted to the crisis by saying that all politicians are bad and refused to join political parties and movements. But very quickly we’re moving into the next phase, where many members of that group realize that by refusing to participate in politics they are surrendering to the neoliberal forces of the right.

What are the consequences of this realization?

We are observing a political re-engagement of that group, which is forming new political movements. In my view in Poland you’ve got now two such movements. One, “Krytyka Polityczna”, which at the beginning wanted to become political without becoming a party, is now moving away from their original model. They realized that in order to have long term influence, they have to become more politically engaged in the democratic process. The new party Razem is also an exciting development, and if it succeeds, it may become something like Podemos in Spain.

And as the political strategies develop, the third part of the precariat will reach out and draw those from the other parts in their direction.

Ilu_2_Standing_Fot_Chris Jones_Źródło Flickr

Fot_Chris Jones_Źródło Flickr

Is the notion of pecariat not too broad? As you said it includes so many different groups whhich seem to have little in common with each other.

I believe the precariat is very clearly a class but you can define any class in a narrow or broad way. People use the term “middle class” which is a concept as broad as you can only imagine with no specific identity or measurement. The way I define precariat is actually quite precise by the standards of defining, say, the middle class, the lower class or the working class, all of which are commonly used terms.

How do you then define precariat, then?

Very precisely, by comparison. They have distinctive relations of production. They are subject to unstable and insecure labour relations. They have no occupational identity and no access to rights-based benefits which would give them sense of security. They are also what I call “denizens” as they are losing not only their social and economic but also political rights. It is a growing group and therefore wherever I’m talking about precariat – whether it’s in Poland, Japan, Germany, Spain or the U.S. – people identify with those descriptions. They ask themselves: how can I belong to a working class if I have a degree, yet how can I belong to a middle class when I have no stable occupation. But if you tell them about precariat, they see themselves.

I can’t agree with much of your diagnosis. In France for example 25 percent of the society votes for the right-wing populist party, which is anti-migrant and at the same time is quite progressive in terms social security and the role of the state. The three groups of precariat you mentioned do not seem to cooperate with each other.

I think the French situation is an interesting variant of what I’ve said. Marine Le Pen has been clever politically and she appeals to a large proportion of French precariat and the old proletariat. If Francois Hollande doesn’t manage to resurrect his own fortunes, you will see a split on the left and a new precariat movement will be built. We’re observing something similar in Great Britain at the moment.

Britain was actually my another example. Seven years after the financial crisis began free-market conservatives were once again elected to power and this time they won a clear majority.

This was not a sweeping victory for the Conservatives. They only got 24 percent of the electorate to support them. Although the electoral system gives them overall majority of 10 in the Parliament, it doesn’t represent a sweeping victory in democratic terms. They are, in fact, a minority.

Wait a minute. In the last election Conservatives got well over over 30 percent…

That’s what they want you to think. They got 36 percent of the vote, but out of a low turnout, so it was actually only 24 percent of the electorate. What we’re seeing in Europe is declining turnouts and support for the conventional political parties. We’re also seeing the process of commodification of politics, where you sell a party and charismatic leaders backed by big money. And still the British right, which has all the money and media, is only getting a minority of support – no matter whether you say it’s a minority of 36 percent of those who voted or 24 percent of the electorate bothered to support them. Don’t think that the right has a mandate to introduce some major policy changes or an overwhelming support base. It doesn’t.

The turnout may in general be getting lower but it was still a few percent higher than in 2001 and 2005 when Labour Party won. Tony Blair was also far from winning support from the majority of the British people. The point is, however, that despite the politics of austerity enacted by the conservative government the left is still losing. Is there no preceraiat in Britain?

Potentially there is going to be some sort of political realignment with a precariat emphasis growing. You can interpret Scottish National Party – which won over 50 seats in the last general election – as much a precariat movement as a nationalist one. I was invited 6 times to Scotland before the election. And although I’m not a nationalist and not a party-political person, everywhere I was invited to talk, the dialogue around the precariat was understood clearly. There is a sort of rejection of the city of London and the neoliberal financial model but in Scotland it has taken a form of nationalism, just as in Catalonia. In Barcelona – where I’ve been invited a number of times lately – they are using this nationalist umbrella also to advance a debate on the precariat as a growing class.

And what about the “Old Left”?

I had a meeting with Ed Miliband before the election and I said: “It’s to late for you now, but unless you see the crisis from the perspective of the precariat, you will not come up with the sorts of answers that are needed”. We’re seeing the end of social democracy of the XX century variety. I think labour and social democratic parties of the old Swedish, German, Spanish model of social democracy have reached the end. They basically accepted the neoliberal economics and are going to pay a price.

Why did they accept it, then?

We’re seeing a dramatic increase in inequality of income and a growing share of income going to rental forms, that are not due to productive activities, but due to the possession of patents, copyrights, trademarks, etc. This means that the 20th century income distribution system as such has broken down. In other words the old strategy of labor and social democrats of trying to push up wages in hope that the wage share will rise and with it the living standards of workers won’t work.

Due to globalization and quadrupling of the world’s labor supply – with all the new people coming to the global labor market, prepared to accept wages much lower than in Warsaw on in London – the downward pressure on wages in Europe is going to continue for many years to come.

Is, therefore, precariat a national or global phenomenon?

What do you mean?

Can you deal with these challenges on a national level? Can, for example, Podemos actually do something for the Spanish people, or do they need to form a global or at least European coalition?

My new book is an attempt to answer that particular question. I believe a lot can be done at local and national level, but we need to ask ourselves the right question: how do we provide income security for the precariat? You can’t do it through wage bargaining, therefore we have to find mechanisms for redistributing rental income, removing subsidies which to the wealthy and using that money to provide people with income security. That’s why I’m supporting movements towards basic income as part of the answer, not a panacea.

Some people say the world has changed so much we can no longer provide social security to people and it is not only a matter of economy but also of political, demographic and technological developments. For example the pace of technological changes is so high one must constantly redefine oneself and change jobs in order to remain employed.

It sounds like a very right-wing view or a view by somebody who lost it. I profoundly disagree. We might need to accept – and I’m perfectly willing to accept it – that we will have flexible labour relations. But in this case we need to find ways to provide security and redistribution from outside the labour market.

That is why I give so much attention to the need to reconceptualize what it is we mean by work. A fatal error of the left in the 20th century was to define work only in terms of labour. We need to provide more security so that people can alternate their activities, do more care work, more voluntarily work and more community work. And there is no reason we cannot have such a system.

I cannot imagine how you would be able to implement it without some kind of global, very strong government.

We’ve done pilot basic income schemes in India. When we were designing it Sonia Gandhi told us it would not work – people would waste the money and would not improve their social security. Three years later the area has been transformed, money has been saved and these economies are now much more self-reliant. You can do it at a local level.

Only at a local level…

It may not provide utopia overnight but we are moving in a different direction. In my second book I also argue that every country should set up sovereign national capital funds. Today over 60 countries have set their own national capital funds. What is failing at many of these funds is the undemocratic governance. But there is absolutely no reason why it cannot become democratic so that the funds are independently controlled and run by democratically elected people. It’s far too defeatist or opportunistic to say we cannot do anything at local or national level. Yet that’s also not to say there’s nothing to reform on the international level.

For example?

Intellectual property rights which is one of the biggest disgraces at the moment because it’s basically giving monopoly income to rent holders. We should not throw up our hands in the air and cry let’s have free, open markets when we don’t have free, open markets and we are not going to have them. State institutions are giving subsidies to the affluent whose power over media and politicians increases. So the ideal of open markets as presented to us by the neoliberal right is a fraud. On the other hand, however, the leaders of the Old-Left to me look like emperors without clothes.