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From the start, this project was cloaked in the language of “efficiency”, “modernisation”, and — most pernicious of all — “economic freedom”.14 Thatcher’s groupies argued that the unions were vested interests getting in the way of the operation of the free market. The neoclassical theory of wage determination posits that workers are paid a wage equal to the “marginal product” of their labour.15 Essentially, firms pay workers a wage equal to the value of the output they produce. If a firm paid a worker over this amount, another firm could afford to undercut them whilst still making a profit, and if they paid workers less, then another firm could poach the worker with a higher salary and still make a profit. In the perfect world of equilibrium inhabited by the professional economist, the economy runs like a well-oiled machine, everyone fulfils their function, and society’s resources are used in the most optimal way. By extension, workers who demand wages above their marginal productivity reduce the profitability of the companies they work for, therefore reducing the efficiency of the economy as a whole. The unions were committing a cardinal sin — disrupting the operation of the free market — and the state had no choice other than to intervene.
But over the course of the post-war period, the marginal productivity theory of distribution largely held. When the UK had a powerful labour movement able to argue for pay rises on behalf of their workers, on aggregate wages and productivity rose in unison — workers were paid a wage equal to what firms could afford, no more and no less. In fact, there is now a great deal of evidence to suggest that strong union movements actually raise productivity and improve firm performance.16 But after Thatcher’s battle with the unions, wages stopped rising in line with productivity. Without the unions to demand that firms paid workers a salary equal to their marginal output, bosses had no incentive to do so. Instead, they set about internally redistributing resources from workers to shareholders, making billions in the process.17
At the same time, the state was retreating from providing the kind of social security that had been a hallmark of the post-war era. Risks that had formerly been socialised were privatised, encouraging middle-earners to “think like capitalists” in planning and insuring for risks. Private health insurance coverage has increased as wealthier consumers seek out better care than that which is available on the NHS. Rising tuition fees have also shifted the burden for paying for education onto individuals, who find themselves saddled with debt well into their careers. Many working families were taken in by the “delusion of thrift”, believing that their pensions and properties were increasing in value because of smart investments rather than a generalised environment of asset price inflation. This was, of course, a delusion — one that was quickly shattered in 2007 and the legacy of which many families are still dealing with. Many peoples’ pensions were effectively wiped out in 2008 (only to be revived through QE), some homes were foreclosed upon, and personal bankruptcies soared. Unsurprisingly, this assumption of what were previously socialised risks by ordinary households has led to a pervasive rise in feelings of anxiety and insecurity.
The steady privatisation of public spending around the world was recently identified by the UN as the source of pervasive human rights abuses.29 The UN’s expert panel claimed that “[g]overnments trade short-term deficits for windfall profits and push financial liabilities on future generations”. Neoliberal governments have relied on privatised public spending in order to alleviate some of the inequality created by the finance-led growth regime, and to mute the ups and downs of the business cycle. They have, however, shied away from returning to the old Keynesian model of promoting full employment, given the implications this would have for power relations between workers and owners. Instead, they have sought to create a model of privatised Keynesianism, which allows executives and shareholders to profit from public spending through monopolistic corporations that pay executives huge sums whilst hiring workers on poorly-paid, precarious and insecure contracts. In other words, privatisation attempts to deal with some of the many contradictions of finance-led growth, whilst maintaining the power relations upon which it rests.
Meanwhile, the state’s retreat from the provision of public services and the mass sell-off of social housing have increased the cost of living for households, without increasing productive investment. Rising utilities bills, transport costs, and care costs have all eaten away at households’ already stretched incomes. The increase in house prices seen since the crash has driven up rents far more than it has increased the supply of affordable housing. The decline in the social housing stock has pushed many people into temporary accommodation. Some, like Jerome Rogers, have been driven into crippling debt in an attempt to meet their basic needs — allowing lenders to benefit from the deterioration of our collective wealth. Those who are wealthy enough to do so have opted to save more, knowing that they will be forced to fund their own retirements and care needs. The individualisation of risk has only increased disparities of wealth, leaving some facing crippling debt and others sitting on huge piles of unproductive cash, much of which is channelled into real estate or financial markets, making the problem even worse.
Piketty’s wealth tax is a prime example of “solutionism”: a proposal intended to solve all of the world’s problems through tweaks to the current institutional architecture. He pays little attention to power, to politics, or any other drivers of change. The same can be said for a lot of other radical ideas that have recently become popular, like modern monetary theory, land value taxation, or universal basic income. These can all be understood as a kind of technocratic utopianism — they rely on the assumption that society can be transformed from above and that making one or two radical policy changes will completely transform the economy. Many of these policies are not incorrect or bad, but their adherents often prescribe them as the solution to all the world’s problems, without considering how we got to where we are in the first place. Policy prescriptions — from wealth taxes and land value taxes, to financial reform and housing reform — have to be situated within their political economic context. It is meaningless to speak of “policy” without speaking of power.
We must focus on shifting the balance of power in society away from capital and towards labour by expanding state, community and worker ownership. This is not simply a moral or political statement: it is a statement of necessity. Without a plan to socialise wealth, the economic contradictions of the current model — from inequality to climate change — will only continue to mount. Piketty showed that the tendency of capitalism is for returns to capital to increase faster than returns to labour. Financialised capitalism accelerated this trend for a time by inflating giant debt-fuelled speculative bubble that drained the planet of resources, only to burst in a fit of inefficiency and waste. As long as wealth is privately owned and unequally distributed, these patterns will continue to afflict our economy. What will emerge is a financialised world characterised by bubbles, rising inequality and ever-increasing levels of debt, accompanied by environmental degradation in the pursuit of profit. Such a model cannot remain stable for very long.
So now you’re on your way to a training day at Amazon which you won’t be paid for taking part in. Of course you ought to be paid for taking part in the training day. There’s a quiet complaint to be heard inside you as you approach the company premises, but there’s no one there to listen to you, or anyone like you, complain that a training day ought to be paid, and then to say: Right! We forgot about that. We’ll change it right away.
Anything you could possibly want from this company, you’d have to tell the company’s customers and make them understand. You’d have to win the company’s customers over to your side to get paid for the training day, but just you try getting hold of them all.
You’d like to contradict him, incidentally, and say: I, who am also a customer of this company, would be glad to sit more comfortably here. And I think the company could afford to provide us with more comfortable seats without having to raise prices for the customer.
You don’t say that, though, because you’re me and that means you’re shy; you can’t get your mouth open. Robert steps aside and hands over to Sandy.
A picture of a bleeding hand comes up. This doesn’t look good, says Sandy, not turning round to the screen. This is an employee’s hand. He was working on the conveyor belt. When the belt stopped he put his hand inside the mechanism to adjust the slipped belt. The belt started moving again. There was a lot of screaming. This accident could have been avoided. Most accidents can be avoided.
Don’t step on the pallets.
Always wear cut-resistant gloves when using cutting blades.
Lift correctly.
Anyone who doesn’t lift correctly doesn’t just harm themselves. Sick days harm Amazon.
Sandy repeats: We’re not saying all this for our own amusement.
You trot after Norman as he leads you around the hall. Two forklift drivers accompany your group, disappearing between the shelves, popping up again at the end of an aisle, blocking the way, joking around with Norman, who sends them away: Haven’t you got anything better to do?
Not much up today, one of them says.
I’ve got plenty to do though, Norman says.
You watch your working time melt away, but you also register with interest that working time is allowed to simply melt away at Amazon, that there isn’t a light that goes on some place in the company to signal wasted working time to a supervisor and order immediate countermeasures. So this is what you make a mental note of: between the shelves, in the empty halls, beyond the lead desks, outside of the glass container they want to demolish soon, where the more important bosses and planners sit at their desks, working time is allowed to melt away; there are places where you can be slow.