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What does it really mean to suggest that government ‘manages’ things on behalf of capital? Looking at workfare, restrictions on worker’s wages and the growing influence of finance, Charles Umney seeks to understand whether the government works on behalf of people or on behalf of capital.

Charles Umney is the author of Class Matters, a book that brings Marxist analysis out of the 19th century textiles mill, and into the workplaces of modern Britain, revealing how Marxism is vital to understanding increasing pay inequality, decreasing job security and managerial control of the labour process.

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Whose side is government on? Given that opinion polling shows growing scepticism about the trustworthiness of politicians[i], and a widespread perception that they are in cahoots with other members of ‘the establishment’ (business elites, newspaper owners, etc), we might expect a lot of people to answer: “not ours”.

On the other hand, for many liberally-minded people the question itself is a ridiculous one: governments are complicated things made up of multiple different groups with different agendas and different constituencies, so you can’t say government is on anybody’s ‘side’, per se. It depends on the result of elections, it depends on personal convictions, it depends who is getting funded by whom, and various other things.

Marxist thought has a distinctive perspective on this, though one which has not always been that precise or well defined. In the Communist Manifesto Marx and Engels referred to the state as “a committee for managing the common affairs of the whole of the bourgeoisie”. In other words, it is true that government takes a particular ‘side’, but it is not necessarily that of ‘the elite’ or ‘the establishment’ (whatever these terms are taken to mean). Instead, it is on the side of a specific group of people: those who own and control society’s productive resources (its factories, mines, shops, modes of transport), in order to make a profit. Collectively, Marx and Engels call this group the capitalist class. And government is there to manage things on their behalf: for instance, intervening to sort out squabbles between different capitalists, or preventing threats to capital posed by other sections of society (such as organised labour, or even conservatives who want to restore the pre-capitalist privileges of the landed aristocracy).

If we examine this Marxist view further, we find a lot of unanswered questions. Why, we might ask, would government simply accept this function? Do capitalists sit in cabinet meetings directly telling the Prime Minister what to do? What happens if governments do things which could go against the interests of capital, for instance by raising corporate taxes or strengthening legal protections for workers? In any case, anyone who has ever had a manager in their working life will be aware that they often have their own agendas and are quite capable of introducing botched policies which have the opposite effect from intended. So what does it really mean to suggest that government ‘manages’ things on behalf of capital?

A lot of subsequent Marxist writing has debated these questions. For Ralph Miliband, the state does capital’s bidding mainly because of the personal networks and ideological mood-music that surround people in power. Even the most radical individual, the closer they get to power, starts to move in certain circles and becomes more and more invested in the status quo. Since these circles are dominated by business leaders, anyone who gets into government has to buy into the axiom that “whatever is good for business is good for the country”.

There is something intuitively reasonable about this argument. Jeremy Corbyn, for instance, while still advocating a platform generally to the left of the British political mainstream, has clearly started to talk about “business” in a much friendlier way than he did in the past. To do otherwise is to appear irresponsible. And there is no shortage of examples of left politicians who have ditched many of their more radical policies immediately upon getting elected. Using Miliband’s argument, we could explain this by saying that, when they get into power, these people are surrounded by a network of people very invested in the status quo, and which forces them to moderate their views.

Another Marxist philosopher, Nicos Poulantzas, was hostile to this argument, because it was too ‘personal’: it focused on the experiences and opinions of individuals rather than more fundamental pressures of the system itself. According to Poulantzas, the state as an institution (or collection of institutions) fulfils a stabilising function by its very nature. The real core of capitalist societies, he argued, is the workplace: if capitalists lose control over the ‘means of production’ then capitalism itself starts to disintegrate. And so government comes to shift class conflict from the workplace into the political realm where it can be more easily contained. For example: if employees in a given industry starting collectively demanding better pay and working hours, this is quite scary for capital. But if they don’t do this, and instead just go and vote for a political party they think will legislate on the issue, then that is something capital can deal with.

From this kind of perspective, the personal pressures acting on politicians are not particularly important. Simply by taking part in a parliamentary institution within a fundamentally capitalist society, politicians are supporting the capitalist class. Because even the most radical ones will ultimately function as a means for people to let off steam.

Chaotic policies

The problem with these kinds of 20th century debates, from the vantage point of 2018, is that they are basically arguing over how governments work to stabilise capitalist systems. But governments in Europe (and in North America) do not currently seem like stabilising influences. The current UK government’s erratic and confusing approach to Brexit, for instance, is causing business elites serious concern[ii]. Moreover, since the financial collapse and subsequent debt crisis, governments across Europe have not often acted as convincing ‘managers’: instead, they have forcibly dismantled regulatory institutions in countries such as Greece and Spain, leading to economic regression and social upheaval.

I have explored this argument in greater depth in a recent paper written with some colleagues[iii], as well as in my forthcoming book with Pluto Press[iv]. In our paper, we identify two examples of chaotic labour market policies in Europe. First, the policy of wage moderation, which has been pursued aggressively by EU institutions, who have pressured Eurozone states to limit wage growth in their countries. There is growing evidence that restricting wages has diminished consumer demand and thus exacerbated sluggish growth[v]. Moreover, workers’ wages were clearly not the cause of the crisis in the first place. If anything, fierce wage restraint in major exporting countries like Germany were a key source of instability, since their trading partners on whom their growth model depended were simply not able to keep up[vi].

workfare CAPITAL THE PEOPLE WHO DOES THE STATE WORK FOR CHARLES UMNEY CLASS MATTERS

© Andrew Cooper

Yet this policy persisted long after the crisis, with self-defeating results. Not only this, but it has been implemented in a highly disruptive way. Established systems for collective bargaining, often assumed to be a means of ensuring stable capitalist governance, have been subverted or dismantled.[vii] Given this, it is hard to see these policies as an effective way to ‘manage’ capitalism.

A second example is the case of ‘workfare’ reforms, which have been a trend across various European countries. ‘Workfare’ essentially means the introduction of more coercion into benefits systems: out-of-work people are pressured to more proactively ‘look for work’, and be more ready to accept poor quality jobs, under threat of benefits sanctions (about which there are well-known and mounting horror stories, particularly in the UK)[viii]. From a capitalist perspective, there is some logic to these reforms, since by making people more afraid of unemployment they increase the numbers of people that can be pushed to work in the worst jobs[ix]. But workfare has also failed on its own terms. It has a poor record of reducing unemployment, and the job-matching ‘services’ it provides tend to be little-valued by capitalists.[x]

These kinds of cases can very easily (and justifiably) be read as government trying to make it easier for capitalists to make profits: profit is the engine of capitalist societies, after all, and if this necessitates measures that punish workers then too bad. But, it is clearly not stable management. Instead, these examples reveal states making unreliable guesses about what they think is good for capital, since there is no coherent collective voice telling them what this actually is in the long term. As a result, governments have been pursuing measures that have caused instability in exchange for little real gain. They just believe that they need to put on a performance: showing how ‘competitive’ they are in the hope that this will win them some ‘business confidence’.

This situation is clearly exacerbated by the growing influence of finance in the European economy: the circulation of financial flows is more fluid and unpredictable than that of productive investments, and more prone to nebulous ’psychological’ factors like ‘confidence’. Hence financialisation[xi] makes it even harder to ‘manage’ capitalist economies, since the behaviour and preferences of the capitalist class becomes more and more opaque.

It is ironic to note that much opprobrium has been directed at politicians such as Michael Gove for denigrating the role of ‘experts’ in the lead up to Brexit. But if a lack of expertise really worries us, then we should be concerned about the fact that so much of our economic wellbeing is dependent on an abstract and unpredictable collective swarm known as ‘the markets’. Under these circumstances, what is the point of experts anyway? We have created a system whereby there is inevitably a disconnect between what we might want governments to do, and what they realistically can do while maintaining their flawed managerial role. Until this is resolved democracy will inevitably have tight limits.

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Charles Umney is a Lecturer at the University of Leeds. He teaches, researches and writes on the subjects of trade unionism, working conditions and employment policy across Europe, and has also published extensively on the topic of working life in live music.

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Class Matters: Inequality and Exploitation in 21st Century Britain is available from Pluto Press.

The pen and ink drawing in this blog was created by Andrew Cooper, part of a sequence of drawings that go through Marx’s Capital. You can find more of his work here.

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[i] https://www.ipsos.com/ipsos-mori/en-uk/politicians-are-still-trusted-less-estate-agents-journalists-and-bankers

[ii] https://www.independent.co.uk/news/business/news/brexit-theresa-may-eu-talks-trade-cbi-uk-business-paul-drechsler-a8109311.html

[iii] http://journals.sagepub.com/doi/abs/10.1177/0309816817738318

[iv] https://www.plutobooks.com/9780745337081/class-matters/

[v] http://classonline.org.uk/docs/2014_Wage-led_development_-_Ozlem_Onaran.pdf

[vi] https://www.inderscienceonline.com/doi/abs/10.1504/IJPP.2011.039577

[vii] http://journals.sagepub.com/doi/abs/10.1177/0032329211420082

[viii] https://www.plutobooks.com/9781783718047/cut-out/

[ix] http://journals.sagepub.com/doi/abs/10.1177/0261018315588231

[x] https://global.oup.com/academic/product/the-marketization-of-employment-services-9780198785446?cc=gb&lang=en&

[xi] https://www.versobooks.com/books/2452-fictitious-capital