“The industrial reserve army, during the periods of stagnation and average prosperity, weighs down the active army of workers during the periods of over-production and feverish activity, it puts a curb on their pretensions. The relative surplus population is therefore the background against which the law of the demand and supply of labour does its work. It confines the field of action of this law to the limits absolutely convenient to capital’s drive to exploit and dominate the workers (Marx, 1867, Capital, volume I, Penguin edition, p. 792).”

Introduction

This post is part I of a series discussing the labour market under capitalism. In this part, I am addressing the issue of persistent unemployment in capitalism and the introduction of workfare in the UK specifically. I am addressing both economic and political inconsistencies of the introduction of workfare under Capitalism and Bourgeois Democracy. I conclude this post by addressing the crisis of bourgeois democracy that is exemplified by the contradictions between the introduction of forced labour and human rights, one of the strongest weapons belonging to the ideology of bourgeois democracy.

Workfare, a welfare to work scheme, which forces welfare recipients to work to earn their benefit, has existed for some time in the US (see: 1996 Personal Responsibility and Work Opportunity Act: http://en.wikipedia.org/wiki/Personal_Responsibility_and_Work_Opportunity_Act); and for a comparison between state workfare programmes in the US see: http://www.ssc.wisc.edu/~gwallace/Papers/%288%29.pdf). Originally introduced in the UK by Labour in 1998 and insultingly called the “The New Deal” (http://en.wikipedia.org/wiki/New_Deal_%28United_Kingdom%29), it enabled penalties for those that refused “reasonable work” and established courses and volunteer work to get those on benefits into work and provided tax credits for working families to keep them working.

However, the attempt by the current government in the UK to extend it has led to both legal action and resistance on the part of those being forced to labour. The 2010 “Work for your Benefits Pilot Scheme” (http://www.legislation.gov.uk/uksi/2010/1222/pdfs/uksiem_20101222_en.pdf) and the extension of the “Mandatory Work Activity scheme” (2011: http://www.legislation.gov.uk/uksi/2011/688/pdfs/uksiem_20110688_en.pdf; 2012:http://www.parliament.uk/documents/commons-vote-office/June_2012/12-06-12/13.DWP-Mandatory-Work-Activity.pdf) which is supposedly for those that are not on board with the shift from welfare to work strategy of the government) in numbers of “customers” forced to labour without pay and in light of severe criticism in terms of the introduction of forced labour as well as the known ineffectiveness of these schemes is more than questionable. However, it is certainly consistent with the policies and beliefs of the current government.

The second part of this series will concentrate on workfare in the UK and the actions that are part of the fight-back against the extension of workfare and this will go up tomorrow at 12 noon eastern.

One of the most important contradictions in the capitalist economic system lies in the nature of the labour market itself. On the one hand, capitalism requires free labour; that is, free in the sense that it is no longer tied by law to specific aristocrats that provided subsistence in exchange for labour on their land as serfs or tied to specific masters as slaves. In fact, the existence of slavery and indentured servitude in the US arose initially due to the insufficient number of labourers; it continued due to racism and the usefulness of divide and rule amongst working people. While not denying the importance of morality and human decency, when it started to be an impediment with the development of the domestic market, capital moved to eliminate it. Free labour means that instead labour is free to sell its labour to obtain subsistence. On the other hand, the dependence upon wages earned through labour means that they are subject to the vagaries of the labour market itself and the needs of profitability and capital accumulation within the system itself. However, from its earliest, capitalism and unemployment go hand in hand. The numbers of workers needed by the system depends essentially on profitability criterion; full employment is a fantasy, even in periods of rapid economic growth.

I. Capitalism’s reserve army of labour

“On the basis of capitalism, a system in which the worker does not employ the means of production, but the means of production employ the worker, the law by which a constantly increasing quantity of means of production may be set in motion by a progressively diminishing expenditure of human power, thanks to the advance in the productivity of social labour, undergoes a complete inversion, and is expressed thus: the higher the productivity of labour, the greater is the pressure of the workers on the means of employment, the more precarious therefore becomes the conditions for their existence, namely the sale of their own labour-power for the increase of alien wealth, or in other words, the self-valorization of capital. The fact that the means of production and the productivity of labour increase more rapidly than the productive population expresses itself, therefore, under capitalism, in the inverse form that the working population always increases more rapidly than the valorization requirements of capital (Marx, 1867, op. cit., p. 798).”

This leads to a serious problem. On the one hand, the idea that labour must labour to earn its subsistence is a fundamental perspective that exists in ideology prior to the existence of capitalism; you can even find it in the Bible (see e.g., Genesis 3:17). It is based upon an essential truth that the majority somehow needed to labour in some way to survive. Perhaps one of my favourite defences of the link of labour with subsistence is from Bentham; in fact, he goes so far as to demand the linkage of relief to labour (in houses of industry, workhouses). Listening to what the current government is saying one cannot help wonder if Iain Duncan Smith (the secretary of works and pensions) got lost reading Bentham and never found his way out. In fact, there are strong similarities in Bentham’s discussion of deserving and undeserving poor (which he spends ages on differentiating and then proposes the same remedy to deal with; yep, labour):

“To a person labouring under total and absolute want of ability with regard to work, relief must be administered, without any condition in respect of work, since otherwise he must be left to perish.

To a person possessed of adequate ability, no relief ought to be administered, but on condition of his performing work: to wit such a measure of work as, if employed to an ordinary degree of advantage, will yield a return in value, adequate to the expence of the relief (Bentham, 1796, Essays on the Subject of the Poor Laws, Essay II, sec. III, pp. 44-45).”

Irrespective of his distinction between the deserving and undeserving poor above, Bentham says the following:

“A person deprived of all his limbs, or the use of all his limbs, may still possess ability sufficient to the purpose of serving as inspector to most kinds of work, so long as mental faculties, and sight for observing, and voice for questioning are possessed by him in sufficient vigour (Bentham, op. cit., pp 46-47).”

However, high levels of productivity under capitalism means that less and less labour is needed both relatively and absolutely to satisfy needs and wants. In fact, the introduction of machinery in production of workers consumption goods has reduced the amount of labour necessary to feed the population. The large majority of the working day and production is done for the purposes of production of surplus value, that part of the value of the product going towards profits and rents. However, it has created high amounts of unemployment of labour which cannot and will not be needed due to the profitability criteria under which capitalist production is undertaken.

If the system is such (and capitalism is unique in this sense compared to other economic systems) that persistent unemployment is a by-product of production decisions relying on profitability criteria, addressing unemployment and the subsistence of the unemployed becomes essential. Moreover, there are different forms of unemployment, some of which are essential to production; for example, agriculture has periods of seasonal unemployment and these people must be available for the periods in which they are needed. Additionally, unemployment rises and falls due to the cyclical periods of capitalist growth and crisis; people are drawn in and released from production … this is a relative reserve army of unemployed. They must be available to be drawn into production when needed. Then, there are those that are long-term unemployed that are victims of a system. Increasingly, these numbers are rising in the advanced capitalist world due to the impact of high levels of productivity, the introduction of machinery to replace labour, the decline of industrial and manufacturing sectors in these countries and the general lack of revival of employment due to the nature of economic growth following crises (those jobless recoveries).

“We can now understand the foolishness of the economic wisdom which preaches to the workers that they should adapt their numbers to the valorization requirements of capital. The mechanism of capitalist production and accumulation itself constantly effects this adjustment. The first word of this adaptation is the creation of a relative surplus population, or industrial reserve army. Its last word is the misery of constantly expanding strata of the active army of labour, and the dead weight of pauperism (Marx, 1867, op. cit., p. 798).”

II. Dealing with Persistent Unemployment:

In many senses, the discussions on how to deal with poverty and unemployment created by the capitalist system have gone in waves. For those that do not outright reject public relief for the poor (like Malthus), there are essentially two main positions:

  1. there is either an assertion of the insistence between the link of labour and subsistence (e.g., Bentham, 1834 Poor Law Reform);
  2. or there is a recognition that unemployment of various forms exists and provision for the poor and unemployed must simply be provided (e.g., 1795-7 Poor Law Amendment, Social Welfare State).

At the moment, we are going through a period both in the US and UK where there is an insistence (irrespective of reality) of the link between labour and subsistence. This has introduced further contradictions in terms of the political dynamic of bourgeois democracy and the discussion of human rights and economic contradictions between free labour and forced labour that has been and continues to be introduced.

A possible way to deal with persistent unemployment is, of course, permanent job creation programmes by the state sector, including nationalisation of not only key industries (like health, agriculture, energy, water, electricity, and natural resources) but other sectors like airlines, and automobiles. Again, these are essentially subsidised sectors that should be expected to be non-profitable as their purpose is to provide jobs and incomes for working people as well as the goods and services themselves. Of course, these types of policies have been progressively abandoned in the advanced capitalist world by countries that initiated them in favour of privatisation from the late 1970s forwards to give the market alternative potential areas of profitability as the profitability in industry and manufacturing in the advanced capitalist world has waned and to destroy the power of the unions in these sectors. Essentially, the need for profitability and growth which are the motivating forces of the capitalist system did not, and could not allow, these sectors to exist outside of the control of the market.

The other obvious solution of reduction of working hours while maintaining incomes is inconsistent with profit maximisation criteria and has not led to increased employment in places where this has been done (see France for example); capital moved overseas to where wages are lower and/or machinery was introduced rather than labour employed. For this solution to work, we need to abandon profit maximisation criteria and capitalism. Without the need of production of surplus value and surplus products to sustain growth and profitability in the context of capitalism, high levels of productivity of labour can easily satisfy the needs and wants for all worldwide and the impoverishment of the majority and destruction of the planet can be ended.

III. The Workhouse and Workfare

I will conclude the economic part of the piece with a discussion examining the similarities and differences between the current workfare system and the 1834 Poor Law Amendment which forced the poor into workhouses.

People have questioned the legitimacy of raising the old workhouses for the poor when discussing workfare. Unquestionably, there are differences between the two systems of dealing with the unemployed through forced labour. No one’s liberty in terms of where they reside is at stake in the modern version; workfare is outdoor relief in the sense that no one is forced into a workhouse to obtain it.

While acknowledging the loss of liberty by the poor, Bentham notes that being confined to a specific place arises due to many types of employment; it holds for those that work in the military and as domestic servants in that they are specifically tied to the physical places of employment. He raises that loss of friends and community would arise if they needed to take a job in another location. Finally, he also states that the loss of individual liberty occurs simply due to being part of society or to the existence of government (Bentham, op. cit., pp. 35-36). His justification for forcing people into the workhouse relates to the importance of maintaining control over the poor and the dispensation of relief ensuring that it was tied to labour. For anyone that has read Bentham’s Panopticon (http://cartome.org/panopticon1.htm), control is very important for Bentham; given that he is a liberal, his lack of trust in human nature is impressive and hearkens back to Hobbes rather than to later enlightenment thinkers:

“Where, in a house where no food can be obtained which is not administered by, or by order, of a master, the administering of a meal’s meat is postponed till the work in consideration of which it administered is done, whether the motive employ’d in this case be the nature of a punishment or the nature of reward, or of both together, is a question of words, not worth insisting on for the present purpose. […] What is more, it is consonant not only to the meaning, but to the very words of scripture, letter as well as spirit. ‘Even when we were with you,‘ says St. Paul to the Thessalonians, even when we were with you, this we commanded you, that, if any would work, neither should he eat.’ Is there any place in which the expedient is more certain in point of efficacy or more practicable than in a House of Industry? (Bentham, op. cit., p. 32)”

Following WWII, forced incarceration if one has not committed a crime (and being poor is still not a crime) is considered unacceptable on a moral level. Irrespective, there are strong similarities to the arguments that underlie and justify the two systems.

The most important similarity is the assumption that people are unemployed voluntarily; that humans are inherently lazy, dissolute, immoral. The fact that the vast majority of the unemployed are so due to lack of employment opportunities does not seem to matter to these people. A second similarity is the notion of deserving and undeserving poor which is being used to adjudicate those that are capable and incapable of labour. Finally, there is the insistence of the linkage between labour and subsistence. The modern system replaces the threat of being in a workhouse with loss of benefits to compel labour and it is done under a system of private employers being subsidised by the government while also gaining unpaid labour (see here for the amount of subsidy they obtain for getting people into work: http://www.cesi.org.uk/keypolicy/work-programme). In many senses, workfare creates far more problems for waged labour than the old workhouse system.

While in the 19th century, putting people in workhouses did not impact upon the general labour market in the sense of lowering wages, the modern version of forced labour in the US prison system and in workfare at least in the UK is directly impacting upon the market for waged labour.

In order to obtain benefits, unemployed people are being forced to work under the lie that this is training for work as they do not have the discipline learned by regular labour due to long term unemployment. As a result, companies are using forced labour instead of hiring new workers or granting overtime to those already employed. These forced labourers do not have the job protection of paid labour, they do not have the rights to refuse to work or not, the safety conditions afforded to paid labour are not guaranteed to these people. Given that the labour is unskilled, the argument that this is work training is absurd; how much training is needed to learn to stack shelves? Moreover, studies have indicated that being forced to work does not improve your chances of finding paid labour, so that argument is also fallacious (http://unfairworkfare.wordpress.com/2012/02/08/government-report-concluded-that-workfare-reduces-chances-of-future-employment/). In fact, it is worse than that, participation in workfare can reduce chances of finding paid work and it is extremely ineffective for those with multiple barriers (think of those with disabilities, single mothers, parents with children to support, and caring for extended families). A report commissioned by the Department of Work and Pensions (DWP) in 2008 concluded the following in terms of effectiveness of workfare programmes in the US, Canada and Australia conducted by Richard Crisp and Del Roy Fletcher of The Centre for Regional Economic and Social Research (CRESR):

  • Effectiveness in improving employment outcomes
    – There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers.
    – Subsidised (‘transitional’) job schemes that pay a wage can be more effective in raising employment levels than ‘work for benefit’ programmes.
    – Workfare is least effective in getting people into jobs in weak labour markets where unemployment is high.
    – Levels of non-participation in mandatory activities are high in some workfare programmes.
  • Effectiveness for clients with multiple barriers
    – Workfare is least effective for individuals with multiple barriers to work.
    – Welfare recipients with multiple barriers often find it difficult to meet obligations to take part in unpaid work. This can lead to sanctions and, in the most extreme cases, the complete withdrawal of benefits that leaves some individuals with no work and no income.
    – Some states in the US have scaled down large-scale, universal workfare programmes in preference for ‘softer’ and more flexible models that offer greater support to those with the most barriers to work. This includes a greater reliance on subsidised jobs that pay wages rather than benefits to participants (http://research.dwp.gov.uk/asd/asd5/rports2007-2008/rrep533.pdf).

Forced labour is being compelled to compete with free waged labour and is being used to undermine wages and it is undercutting paid employment in a situation where there are larger numbers of unemployed people both due to the economic crisis as well as long-term unemployed due to the destruction of the manufacturing and industrial sectors.

This is creating serious inconsistencies and they do not only have economic implications, they have serious political implications for bourgeois democracy and the ideological legitimation of the system in the face of measures being used to support the capitalist system itself.

IV. A political crisis

The resort to forced labour is creating a political inconsistency with bourgeois democratic notions (or ideology) of liberty and rights of citizens. The notion of human rights is intimately connected to the development of bourgeois democracy; indeed, forced labour is inconsistent with Article 23 of the Universal Declaration of Human Rights which guarantees the following:

• (1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.
• (2) Everyone, without any discrimination, has the right to equal pay for equal work.
• (3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
• (4) Everyone has the right to form and to join trade unions for the protection of his interests (http://www.un.org/en/documents/udhr/index.shtml#a23).

In the European Convention on Human Rights, there is a clear divergence from the noble principles espoused above, but Article 4 prohibits slavery, servitude and forced labour with the following exemptions:

Article 4 prohibits slavery, servitude and forced labour but exempts labour:
• done as a normal part of imprisonment,
• in the form of compulsory military service or work done as an alternative by conscientious objectors,
• required to be done during a state of emergency, and
• considered to be a part of a person’s normal “civic obligations” (http://en.wikipedia.org/wiki/European_Convention_on_Human_Rights#Article_4_-_servitude).

It is the definition of forced labour (or unfree labour) that is important for the discussion of workfare and it is that which calls into question the introduction of workfare and also raises the issue of prison labour which is considerably more difficult to address due to civil law in countries where it exists contradicting human rights law:

Unfree labour[…] is a generic or collective term for those work relations, especially in modern or early modern history, in which people are employed against their will by the threat of destitution, detention, violence (including death), lawful compulsion, or other extreme hardship to themselves or to members of their families.

Many of these forms of work may be covered by the term forced labour, which is defined by the International Labour Organization (ILO) as all involuntary work or service exacted under the menace of a penalty. Unfree labour includes all forms of slavery, and related institutions (e.g. debt slavery, serfdom, corvée and labour camps) (http://en.wikipedia.org/wiki/Forced_labour).

So theoretically, forced labour is forbidden by the EU convention on human rights. But if you think about it seriously, the linkage between labour and subsistence that underlies workfare (and for that matter, forced labour in prisons) is based exactly on the notion of people being employed against their will by threat of destitution and extreme hardship to themselves or members of their families. While people are not being forced into workhouses, their ability to refuse to work is prevented by their fear of destitution and hardship. Yet that has neither stopped signatories to the UN Declaration on Human Rights (e.g., the US, Canada, Australia, and the UK), or the UK which is a member of the EU introducing workfare.

Moreover, in many senses, the whole capital-labour relationship is based upon the fact that if people do not work they will be destitute in the absence of a social welfare state. In fact, the social welfare state itself broke the link between subsistence and labour; these policies which attempt to revive it on the backs of the poor and unemployed are reintroducing something which is essentially inconsistent with both notions of bourgeois democracy as well as the idea of free labour: forced labour. Even more so, the introduction of these policies in the context of both an economic recession and the existence of long-term unemployment due to capitalist profitability criteria demonstrates clearly both the political and economic crisis that we are experiencing.

The threat to paid labour of forced labour is clear to the British trade union movement which has strongly opposed workfare (http://www.tuc.org.uk/economy/tuc-21054-f0.cfm).

“Unions believe that workfare is a failed policy. It exploits the people who take part by paying them much less than the minimum wage. It is unfair to other workers because it threatens their jobs and pay rates. It is unfair to other businesses if their competitors are being subsidised by the government in this way. […] All workers are threatened by workfare but the poorest and weakest are threatened most because it is at the bottom end of the labour market that workers in real jobs are most likely to find themselves in competition with those on workfare, as the Nobel Prize winning economist Robert Solow has pointed out (http://www.tuc.org.uk/economy/tuc-21054-f0.cfm).”

For those who are tied to the rights and obligation perspective, the question arises whether labour is a civic obligation; that is, is your right not to be forced to labour counterbalanced by your civil responsibilities? But that raises the exact point as to whether your lack of labour is your choice or is a result of the economic system, such that your responsibilities are counterbalanced by the fact that there is no paid labour? If unemployment is involuntary as the vast majority of the unemployment actually is, can it be said that the unemployed are not fulfilling their civil responsibility or rather is it the case that civil society is actually failing in its responsibilities to them?

There is an even more fundamental question at stake which I want to raise here; this relates to the inalienable right to life (for human beings) which is independent of the question of rights and responsibility. If people are ineligible to get welfare benefits because they refuse to participate in workfare schemes are you condemning them to either slow death or forcing them to theft to ensure their lives? This will be addressed in more detail in part II of this series where Locke, for example, links the right to subsistence to the inalienable natural right to life in early bourgeois democratic theory.

References:

Bentham, Jeremy (1796) “Essays on the Poor Laws” in The Collected Works of Jeremy Bentham, Writings on the Poor Laws, Volume I, Oxford, 2001.

Marx, Karl (1867) Capital, Volume I: A Critique of Political Economy, Penguin, 1990.