A nice one, as a good pointer:
Social Democrats Must Recognize Capitalism Is A Source Of Injustice
For Europe’s Sake, Social Democrats Must Recognize Capitalism Is A Source Of Injustice
by
Douglas Voigt on 26 October 2016
Despite the threat of populist nationalists
seizing the day in the maelstrom of Brexit, the British center-left has been remarkable in its refusal to reconsider its basic understanding of European capitalism. Since June 23, this obstinacy is reflected in the contrast relentlessly expressed by figures in politics and the media, such as Peter Mendelson and
Polly Toynbee, dividing an ‘open’ and ‘fact based’ Europe governed by the free movement of capital, labor, goods, and services, and a ‘closed’ Europe governed by the echo-chamber of populist fantasies. This narrative effectively equates the xenophobic nationalism of Nigel Farage with the democratic socialism of Jeremy Corbyn. Yet, while the former has already marched through the
Conservative party and into power, the center-left plunged Labour into a power struggle while seeking to defend the very
‘credible’ understanding of capitalism that had already been rejected by the public. This suggests a dangerous inability to grasp the nature of contemporary political economy – a weakness emerging from the intellectual origins of what has been called ‘
neoliberal social democracy’.
Influenced by scholars like
Anthony Giddens and
Anton Hemerijck and implemented by
Tony Blair and Gerhard Schröder, neoliberal social democracy celebrated the so-called ‘new economy’ of the 1990s, conceived of as an objective arbiter of talent, productivity, and consumer choice. The democratic state became subservient to global capitalism in this formulation, oriented only towards making its citizens more attractive investments through loosened labor laws, harsher welfare regimes, and job-focused educational schemes. After conducting extensive field research on the effects of such policies in Germany, my findings suggest two important elements applicable across Europe, shedding light on why we are witnessing the rise of populist nationalism today.
First, capitalist class relations clearly survive in the so-called ‘new economy’ and dismissing class conflict as Marxist claptrap is ignorant and self-defeating. Instead, class structure originates in law. For instance, European policy emerging from
the Directorate General for Competition protects private investors from public competition regardless of the social need for investment in a given region. This deliberately enhances the power of private capital vis-à-vis citizens without financial assets. At the same time, through
abandoning social policy to the open method of coordination, the EU effectively encourages a ‘race-to-the-bottom’ between welfare states seeking such investments. Both create a hierarchy in the legal code between groups of people, enhancing the power of those owning capital assets at the expense of those on welfare or working for a wage. Consequently, a useful model for identifying social class is not
level of income, but its
source. Although more complicated on the ground, in this analytical model, four basic classes are distinguishable: one, financial operatives focused on investment returns, traditionally described as
rentiers; two,
capital, which focuses on generating profits from sales; three,
labour, which derives income from wages; and four,
dependents on the welfare state or family generosity. This pattern of social differentiation has been integral to capitalism since its onset and continues to exist today.
Recent evidence suggests this class structure is becoming both
more entrenched and more unequal. Predictably, lower income intensifies everyday struggles for workers and dependents, as well as immobile and indebted small firms struggling to compete with large conglomerates or manufacturers outsourcing labor to China – hardly a paragon of
democracy or
labor rights. Alongside this transnational competition, small firms are obliged to pay off debt to globalized ‘rentiers’ which offer little flexibility and community-friendly compromise. In such an environment, the bottom line takes intensified precedence, requiring firms to treat wage laborers as expendable tools, undermining the social norms and equal respect at the heart of capitalist social democracy. The EU promotion of labor flexibility and competitiveness is consequently experienced as inflexibility and intolerance for workers, whose everyday struggles such as juggling childcare providers are increasingly disregarded by employers. Employers justify this through citing debt and competition – a logic cascading downwards from European competition law. EU policy thus enriches the rentier class while undermining the basic social norms underpinning a productive and mutually beneficial employer-employee relationship – an unjust system with the
effect of increased inequality.
A second characteristic of neoliberal social democracy is moralizing labor market participation through welfare policy. Participation in wage labor becomes a moral duty in itself, instead of a means to enhance other pursuits such as citizen engagement, cultural development, and family happiness. This links a distinctly Protestant set of norms around the concept of work with virtually every aspect of social policy – education, welfare, housing benefits, pensions, and indeed immigration. The state thus communicates to its own citizens that work is the source of individual moral worth and the only avenue towards a respected social status. This traps workers between a relentless discourse on the moral imperative of wage labor and employers who increasingly treat them as expendable instruments. This is demoralizing and enraging. I’ve found the disgust is particularly evident among older individuals lacking labor market flexibility by owning a home, having depreciating skills, and moreover raised in a period when loyalty between firm and worker, state and society, were reciprocal rather than one-sided concepts.
Nevertheless, despite paying lip-service to
the problems of inequality, we have yet to see any tolerance
across Europe for what that actually means in practice, with
debt-servicing for global rentiers clearly taking precedence over social justice. (...)
