How To Combat Inequalities Produced By Global Capitalism
Guy Standing
Rising inequality is one of the most salient issues in global and European politics. Guy Standing writes
that what we have witnessed in recent decades is not simply an increase
in inequality, but also the emergence of a new globalised class
structure. A key component of this structure is what he terms ‘The
Precariat’: a new class comprising those who lack economic security and
stable occupational identities, which has systematically been deprived
of some of the fundamental rights afforded to citizens. He argues that a
new ‘Precariat Charter’ is required to combat these insecurities,
including provision for a basic income as a right of citizenship.
Next year is the 800th anniversary
of the Magna Carta, the first class-based charter of liberties against
the state. Today, we need a Precariat Charter to advance the rights of
the precariat and substantially reduce the inequalities and insecurities
in society. This is the theme of my new book, A Precariat Charter: From Denizens to Citizens (Bloomsbury).
The context is clear. We
are in the midst of a Global Transformation, in which a globalised
market system is under painful construction. In its dis-embedded phase,
the transformation was dominated by the interests of financial capital,
just as was Karl Polanyi’s Great Transformation. Inequalities
multiplied, economic insecurity became pervasive. Above all, a new
globalised class structure took shape. All economic and social analysis
of the growth of inequality that ignores the class dimension is like
trying to play Hamlet without the Prince.
The emerging mass class
is the precariat, looking up in income terms to a tiny
plutocracy-cum-oligarchy striding the world, manipulating democracy and
raking in rental income, and looking up to the salariat between them,
receiving more and more of its income from capital and the state. The
old proletariat, the old working class in numerical decline is rapidly
losing its labour securities and non-wage forms of economic security.
The precariat has
distinctive relations of production (unstable labour, lack of
occupational identity, a high ratio of work-for-labour to labour, and so
on), distinctive relations of distribution (depending on money wages
that are stagnant at best, and volatile as the norm, living on the edge
of unsustainable debt), and distinctive relations to the state. This
last aspect has received too little attention. The precariat is the
first mass class in history that has been systematically losing the
acquired rights of citizenship – civil, cultural, political, social and
economic. The precariat consists of supplicants, being forced to beg for
entitlements, being sanctioned without due process, being dependent on
discretionary charity.
More and more people,
not just migrants, are being converted into denizens, with a more
limited range and depth of civil, cultural, social, political and
economic rights. They are increasingly denied what Hannah Arendt called
‘the right to have rights’, the essence of proper citizenship.
This is key to
understanding the precariat. Its essential character is being a
supplicant, a beggar, pushed to rely on discretionary and conditional
hand-outs from the state and by privatised agencies and charities
operating on its behalf. For understanding the precariat, and the nature
of class struggle to come, this supplicant status is more important
than its insecure labour relations.
Guy Standing argues in favour of a ‘Precariat Charter’ for workers. (photo: CC Zoriah on Flickr)
The Precariat And Global Capitalism
The precariat’s position
must be understood in terms of the changing character of global
capitalism and its underlying distribution system, something that Thomas Piketty did not address. In the 20th century,
uniquely in human history, the distribution of income was primarily
between capital and labour, between profits and wages, mediated by the
state with its taxation, subsidies and benefits. The bargaining over the
respective shares was won on points by the representatives of employees
in the post-1945 period, but after the late 1970s was won decisively by
capital. Everywhere the functional distribution of income became more
unequal, with labour’s share of national income dropping dramatically,
nowhere more so than the emerging market economies, including China most
of all.
However, the key to
understanding the challenge ahead is that two factors have changed the
context completely. Historically speaking, from the 1980s onwards the
labour supply to the global open labour market quadrupled, with all the
newcomers being habituated to labouring at one-third or less of the
median income of the workers in OECD countries. This led to the start of
the Great Convergence. It was facilitated by the new technological
revolution, which among other things allowed the corporation to
unbundle, shifting production and tasks to wherever costs were lowest.
In this new context,
rental income has become a major and growing component of total income.
This is far more important than patrimonial capitalism, which Piketty
identifies as the main feature of modern capitalism. Rent comes in
several forms, notably by possession of so-called intellectual property,
through patents, and through privileged possession of scarce
commodities and natural resources. Last year was the first year in which
over two million patents were registered, guaranteeing trillions of
dollars to their owners stretching on average twenty years.
The rental economy
extends all the way down to pay-day loans, whereby members of the
precariat are exploited by disgustingly high interest rates, often
exceeding 5,000 per cent. It includes the vast array of subsidies given
by the state to corporations and the affluent in the salariat and elite.
What the precariat must
demand now is little less than a new distribution system, not just a
tinkering on marginal or average tax rates. Indeed, the weakest aspect
of Piketty’s analysis is his prognosis. The likelihood of very high
marginal direct tax rates is remote. Structural changes are required.
A Precariat Charter must
start from understanding the nature and depth of insecurities faced by
the precariat, and also from understanding the aspirations that exist in
the more educated component of the precariat. It would be quite wrong
to imagine that the precariat wants a return to the old norms of
full-time stable wage labour.
It wants to build a good
society, resurrect a sense of “a future” and create institutional
networks that would enable more and more to pursue a life of work,
labour and leisure. That means building their own sense of occupation,
in which ecological values of reproductive work predominate over the
resource-depleting values of labour.
The assets that need to
be redistributed are not like the old socialist project of a hundred
years ago, when the proletariat was emerging as the mass class. The
assets underpinning a Precariat Charter are basic security, control of
time, quality space, education, financial knowledge and financial
capital. A key demand is for moves towards the realisation of a basic
income as a right of citizenship. Without basic security, none of us can
be expected to be rational and socially responsible. Let us find ways
of going on that road.
For a longer discussion of this topic, see Guy Standing’s latest book, A Precariat Charter: From Denizens to Citizens (Bloomsbury). This column was first published by EUROPP@LSE.
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