Humbled by their own incompetence: ‘winter economic plan’ back to square one
Lockdown exacerbates ruling class conflict over future for employers, employees, and unemployed.
Back in September’s warmer climes, the Financial Times could argue – tentatively, yet hopefully – that furlough should end, enhanced universal credit be maintained, and transition from non-viable to viable industries begin to be eased. (Weaning Britain’s economy off furlough, 15 September 2020)
Expectations of a slow-but-sure return to normality now appear to have been some residual summer innocence: negotiating the end of furlough and mass unemployment has been pushed back, first by a month and now to 31 March next year, the same time that the £20 boost to universal credit is now set to expire.
The trigger for this reprieve has been a second wave of the pandemic that has “surpassed worst-case scenarios”: “One cabinet minister said the decision to put the whole of England into a second lockdown was taken by ‘consensus’ after new evidence suggested the NHS would be overwhelmed by early December.” (Boris Johnson faces fallout after hitting button on Covid ‘nuclear deterrent’, November 1 2020)
The second covid wave has left our government, according to prime minister Boris Johnson, “humbled in the face of nature”. (Boris Johnson announces second lockdown for England, Financial Times, 1 November 2020)
The slipshod way in which the scientific data was handled only makes the question more urgent: humbled by whose nature? (How UK government misrepresented Covid projections – explained, The Guardian, 6 November 2020)
Mr Johnson announced Britain’s second lockdown only six weeks after that distant September when he stated that a lockdown would be “disastrous” for the economy and “completely wrong for this country”. (Second national lockdown proposed by UK scientific advisers, Financial Times, 17 September 2020)
He announced his U-turn at a press conference on a Saturday evening, where he stated the new lockdown would be time-limited until 2 December; on the Sunday morning, however, Michael Gove ‘clarified’ that the lockdown would in fact be subject to extension.
Furlough was first extended for the month, and then on 5 November was extended until March – in anticipation of an equivalent extension to the lockdown? The examination of entrails or tea leaves will provide as good an answer as any. Richard Drax, Tory MP for South Dorset, has warned of a mass rebellion of Conservative MPs if this does indeed prove to be the case. (Boris Johnson ‘faces rebellion by 100 Tory MPs’ if he tries to extend Covid lockdown, The Telegraph, 6 November 2020)
Meanwhile, over two million employees are surviving on sub-minimum wage maintenance with little to look forward to in spring: half-baked payments for firms to take on trainees have been criticised as not fit for purpose; and UBI, the proverbial and literal bad penny, continues to stalk imaginations across the political spectrum – perhaps its hour has come round at last. (Furlough leaves 2m UK employees earning less than minimum wage, Financial Times, 3 November 2020; Cash rewards fail to convince employers to take on trainees, Financial Times, 4 November 2020; Covid job losses lead MPs to call for trials of universal basic income, The Guardian, 31 October 2020)
It is, we submit, the nature of our ruling class that has failed them. They are blind helmsmen of a system that is incapable of performing a risk assessment upon itself, and that consequently leaves us drastically exposed to external contingency.
It is for these reasons that scientific advice can never be heeded until after the horse has bolted. As early as September, scientists at the government’s Scientific Advisory Group for Emergencies (Sage) and the Scientific Pandemic Influenza Group on Modelling (Spi-m) were suggesting a national lockdown for England. (Second national lockdown proposed by UK scientific advisers, Financial Times, 17 September 2020)
Now that the lockdown is finally here, Chris Hopson, chief executive of NHS Providers, has warned: “It will be for a public inquiry to determine whether, as with the first lockdown, these decisions have been sufficiently quick, clear and decisive.” (Lockdown measures welcome but key questions remain, NHS Providers, 2 November 2020)
In a previous article we described the cost-benefit analysis that accompanies capitalist calculations of welfare. Chancellor Rishi Sunak is now in damage limitation mode – £150bn worth of shiny new quantitative easing from the Bank of England will enable the job retention scheme to be extended until 31 March in the hopes of avoiding further exacerbation of rocketing unemployment figures and the concomitant stress on the UK’s benefits system, as well as the possibility of social unrest. (Rishi Sunak extends Covid job furlough scheme until March 2021, The Guardian, 5 November 2020)
The measure has drawn praise from some sections of the ruling class – Rain Newton-Smith, chief economist of the CBI, said: “Extending the tried and trusted job retention scheme will give companies the certainty and stability they need to help safeguard thousands of jobs into March.” (Our response to chancellor’s economic statement, CBI, 5 November 2020)
Criticism, however, has come from other corners. Paul Johnson, director of the Institute for Fiscal Studies (IFS), tweeted: “Basically return to March schemes (dreamt up on the hoof in 24 hrs) as if nothing learnt since. Wasteful & badly targeted for self-employed. No effort at targeting sectors/viable jobs for employees.” (5 November 2020)
This is the way in which the intrinsic inability of the ruling class to coordinate as a class in times of overproduction expresses itself. In times of plenty, capitalist competition takes the form of a “practical freemasonry” whereby profits are realised by each capitalist in general proportion to the amount of capital outlaid as they all “share in the common loot”. It times of stagnation, however, all fraternity is forgotten, and capitalists stand head to head as “enemy brothers”. (K Marx, Capital Vol 3, Chapter 15)
To paraphrase Tolstoy, all happy capitalists are alike; each unhappy capitalist is unhappy in his own way.
Turning and turning in the widening gyre, Conservative economic policy in response to the pandemic has, especially of late, exposed the seams in ruling-class ideology. The Tories’ relationship with business has been fraught since Brexit, but has sunk to a nadir during the present crisis. (Boris Johnson’s Brexit explosion ruins Tory business credentials, Financial Times, 25 June 2018)
Johnson sent further ‘fuck business’ signals when he tried to cancel his address to the CBI annual conference on 2 November – initially sending business secretary Alok Sharma instead, then finally showing up late to the party.
Despite positive responses to Sunak’s announcement on 5 November, generally speaking a wedge has been driven between the Conservative government and the ‘business community’. Carolyn Fairbairn, director-general of the CBI, has warned that furlough extensions do nothing to help businesses pay rent, of which there is at least £4.5bn owed to commercial property owners. (As rent day looms, it’s the landlords’ turn to be worried, The Guardian, 27 September 2020)
She also said that the relationship between business and Downing Street “could be a lot better”. (Business seeks state support as it faces England lockdown, Financial Times, 1 November 2020)
The British Retail Consortium (BRC) has echoed the CBI’s misgivings. Helen Dickinson, chief executive of the BRC, detailed the damage already done to the British high street as a warning of what is to come: “Now that we are entering the all-important Christmas shopping period, these losses are certain to be much bigger.” (Boris Johnson announces second lockdown for England, Financial Times, 1 November 2020)
What this ultimately amounts to is a loss of trust from business in Johnson’s government: “While the government says England’s lockdown will end on 2 December, few companies now trust the ever-changing messaging.” (The battle to save UK businesses in lockdown, Financial Times, 1 November 2020)
In evidence of this, a senior banker told the Financial Times that “diehard Tory voters in the City are pulling their hair out over decisions being made … there are real worries over how poor this government is. The access to No 10 right now as a FTSE 100 chief is as bad as it’s ever been.”
Furthermore, in words that echo the sentiments of many within the Conservative party itself, the chief executive of pub group Marston’s, Ralph Findlay, criticised the government’s “contemptible way of treating people” – saying that if the Westminster government was a business “someone would be getting sacked”.
It also amounts to the belief amongst business owners – perverse, but perfectly understandable within the logic of capital – that Westminster has been paying too much attention to scientific advice:
“One Tory who worked until recently in Number 10 agreed that relations between Downing Street and business were ‘strained’. ‘The impression you get is that Boris Johnson is spending all day getting health briefings and health guidance, but no one knows who is in there pushing the business case,’ he said.” (Business worried about ‘bunker’ mentality in 10 Downing Street, Financial Times, 2 November 2020)
The ever-delightful Charlie Mullins, founder of Pimlico Plumbers and former Tory donor, who would have ended the furlough scheme at the beginning of August, weighed in (quite possibly from the comfort of his Marbella holiday home): “Sadly, Boris has lost track of these basic Conservative principles and has crumbled under the pressure of the job and the scientific voices whispering in his ear.” (Business seeks state support as it faces England lockdown, Financial Times, 1 November 2020)
Reflecting these divisions, there has been equivalent uproar within the Conservative party itself, with the 1922 Committee of Tory backbenchers reacting with high melodrama – the clutching of pearls, the wringing of hands, weeping and gnashing of teeth – at the introduction of what they see as draconian new lockdown measures and the need for accompanying furlough provision.
Graham Brady, chairman of the committee, stated that the lockdown would be considered “a form of evil” if introduced by a totalitarian state. (Under-fire Boris Johnson insists winter lockdown is ‘time-limited’, Financial Times, 1 November 2020)
Charles Walker, vice-chairman of the committee, said we were drifting “further into an authoritarian coercive state”. David Davis added his voice to the clamour, claiming the new restrictions were “a bigger decision than going to war”. (Boris Johnson faces fallout after hitting button on Covid ‘nuclear deterrent’, Financial Times, 1 November 2020)
Internal rifts in the Conservatives have also come to the surface over the north-south divide and indicate that the real war for the Tories will be a civil one.
A senior Conservative spoke to the Telegraph of “the Balkanisation of the Tory party” – referring to the lack of trust in Boris Johnson held by the ‘Northern Research Group’, those Tory MPs who took over seats in northern England’s former ‘red wall’ following the collapse of support for Labour there in the 2019 general election.
They fear that the working-class vote from the region, ‘lent’ to the Conservative party over the issue of Brexit, may be withdrawn as a consequence of prejudicial treatment during the phase of local lockdowns. The prime minister has cultivated the same attitude of wilful ignorance towards them that he has cultivated amongst the business community: “It has felt like you are shouting into the void and no one is listening,” one MP complained. (‘Boris Johnson needs to look after us’: Inside the new Tory rift over the north-south divide, The Telegraph, 27 October 2020)
The national parties of the devolved governments in Scotland and Wales have also caught the scent of blood on the wind, and will eagerly use and further inequalities – real or perceived – to drive a wedge between themselves and Westminster. (Boris Johnson under pressure to extend furlough payments to all of UK, Financial Times, 3 November 2020)
This is the pandemic’s true gift – not an entirely new state of affairs, not a never-before-seen, truly one-of-a-kind crisis, but an opportunity to see in stark relief the senseless dynamics of the capitalist system and the real lack of control our rulers have over it.
Rarely are the states of ‘employment’ and ‘unemployment’ so easily confused; rarely does the one so dramatically turn into the other; rarely have the terms been emptied so considerably of their actual meaning (by way of anecdote, Izabella Kaminska at the Financial Times writes that her attempt to re-employ her nanny, in order to qualify her for furlough, set off alarm bells at HMRC).
Likewise, rarely can the systemic interconnection of unemployment within the capitalist mode of production be so clearly seen, and the question addressed – what does this mean for workers?
At this critical juncture, when the ruling class is in disarray, an organised working-class voice could do real damage, when and where it matters. The task of creating one has never been more urgent.
Encouragingly, disillusionment with the Labour party as a vehicle for socialism is leading to an exodus of former members to the Workers Party of Britain, and has thereby created a space for a genuinely socialist organisation to make inroads.
The constellation of issues around which working-class and socialist dissent is gathering – the campaign for the NHS pay rise, Marcus Rashford’s campaign for free school meals, the GMB union’s struggle with Ikea over pay for sick workers and the living wage, etc – provide the working class with opportunities to grow in strength and agency.
Until that organised voice is achieved, however, issues like these will continue to emerge with depressing regularity, and the working class will continue to pay the price for our rulers’ incompetent management of a rigged system.
How this takes place can be clearly seen in a recent publication from the Office of National Statistics (ONS), which indicates that “employees in the lowest pay decile were five times as likely as others to be furloughed without their employer topping up the 80 percent of wages subsidised by the state. People in this group were disproportionately likely to be young, and working in service settings such as bars and restaurants, and hair and beauty salons, or as labourers.” (Furlough leaves 2m UK employees earning less than minimum wage, Financial Times, 3 November 2020)
For these millions of workers, ‘furlough’ means eking out an existence well below even the minimum wage without help from their employer until (a) they can return to work after lockdown, or (b) they face redundancy and compulsory transition to another sector – “I’ll drive for Amazon or stack shelves at Tesco,” a theatre technician told the Financial Times. (For most UK workers, summer furlough was no paid holiday, 1 October 2020)
Meanwhile, the ruling class is busy justifying this unjustifiable waste of human potential and ability – as in Charlie Mullins’ castigation of his furloughed staff for “sponging off the government”; in the Financial Times’ colourful extension of the ‘moral hazard’ argument, when it likens the job retention scheme to Hotel California – “you can check out any time you like, but you can never leave”; and in the patronising, presumptuous expectations of government-backed ‘re-training’ propaganda. (Plumbing boss hits out at furloughed staff, Chronicle Live, 2 July 2020; Weaning Britain’s economy off furlough, Financial Times, 15 September 2020; Government scraps ballet dancer reskilling ad criticised as ‘crass’, The Guardian, 12 October 2020)
The expected expiration of the £20 boost to universal credit is now the tip of an iceberg awaiting us in springtime. Immediately before the announcement of the new lockdown, Sunak was coming under considerable pressure to maintain it. With the new furlough now set to expire at the same time, it has become one thread in a larger tangle of problems. (Rishi Sunak steps up efforts to avert mass unemployment, Financial Times, 22 October 2020)
Under pressure to keep its system afloat and maintain social peace at a time of rapidly rising unemployment, the ruling class is openly discussing radical changes to the benefits system. The pressure for a ‘universal basic income’ is growing, alongside calls for MMT-style money-printing and the kind of ‘stakeholder’ reforms to capitalism supported by Bob Wylie.
Whilst all progressives are united in demanding a better deal for those left by capitalism on the scrap-heap of unemployment, we must be clear that none of these proposed remedies represent anything qualitatively different to the system of state maintenance we have been living with since the development of the Victorian poor laws.
Benefits must be sufficient to maintain workers when they are thrown indefinitely out of use, in order that they can be called upon and will function correctly when needed once more. Benefits must be sufficient for the individual worker to absorb at least a small share of ongoing capitalist production. They must be sufficient to maintain social peace. Yet they simultaneously must be insufficient for a decent and dignified life, so as to maintain not only the incentive to work (the need to sell one’s labour) but also to maintain sufficient desperation to work the most desperate and underpaid of jobs.
The logic of capital has always prevented any digression from this formula and is unlikely to begin now, no matter what branding is given to the benefit system. The maddening complexity of social welfare under capitalism is not a ‘bureaucracy out of control’; it is a bureaucracy doing exactly what is required of it. Poverty will not be ended, and socialism will not be ushered in, via welfare state reform.
Capitalism’s ever-growing inability to find profitable use for human labour – a trend long pre-dating the pandemic, of course – is expressed as this Malthusian ‘superfluity’ of human life: “This plethora of capital arises from the same causes as those which call forth relative overpopulation, and is, therefore, a phenomenon supplementing the latter, although they stand at opposite poles – unemployed capital at one pole, and unemployed worker population at the other.” (K Marx, Capital, Vol 3, Chapter 15)
The massive increase in unemployment produced by crisis – two million workers are now on furlough, according to Paul Johnson at the IFS – merely serves to make the crisis deeper still, shrinking still further the market for the capitalists’ stockpiled goods. (Two million face unemployment when furlough ends in March, The Telegraph, 6 November 2020)
No amount of tinkering around with our benefits system will resolve the fundamental contradiction of capitalism – that between social production and private appropriation. When the development of technology and industry is driven by the need to minimise outlay for human labour, so expands the industrial reserve army of unemployed workers.
And yet, even as automation replaces value-creating labour wherever it can, human labour remains necessary to capital as the only means by which profit can be created.
The plight of the worker within this scenario was vividly painted by Marx in the first volume of Capital:
“This absolute contradiction between the technical necessities of modern industry, and the social character inherent in its capitalistic form, dispels all fixity and security in the situation of the labourer … it constantly threatens, by taking away the instruments of labour, to snatch from his hands his means of subsistence, and, by suppressing his detail-function, to make him superfluous … this antagonism vents its rage in the creation of that monstrosity, an industrial reserve army, kept in misery in order to be always at the disposal of capital; in the incessant human sacrifices from among the working class, in the most reckless squandering of labour-power and in the devastation caused by a social anarchy which turns every economic progress into a social calamity.” (1867, Chapter 15)
Any tangible improvement to the miserly system of universal credit is not to be sniffed at in these times of ‘social calamity’ (words recently used to describe Britain’s deepening poverty crisis by Philip Alston of the United Nations). But no change within the present system – even a shift to UBI – can be meaningful enough to remedy this situation.
The contradiction described by Marx will continue to produce poverty. Labour-power that cannot be profitably employed by capital will continue to appear as an excess of human life.
Morbid symptoms present themselves during crises of overproduction, when the funds needed to soak up capitalist produce no longer reach the pockets of those who would otherwise absorb it; they are the throes of a system in decline.
From within capital’s event horizon the future appears through a glass, darkly. But it does appear, as Marx explained:
“Modern industry, indeed, compels society, under penalty of death, to replace the detail-worker of today, grappled by lifelong repetition of one and the same trivial operation, and thus reduced to the mere fragment of a man, by the fully developed individual, fit for a variety of labours, ready to face any change of production, and to whom the different social functions he performs, are but so many modes of giving free scope to his own natural and acquired powers.” (Ibid)
This was evident recently in the widely-derided propaganda poster ‘encouraging’ re-skilling. We reject a world in which the subject of that poster, Fatima, must abandon her promising career in ballet at the summons of the market’s ‘invisible hand’, to half-starve on furlough, JSA, universal credit, UBI, or the Poor Law while she re-tools in cybersecurity.
Another world is possible; one in which all workers are able to fulfil their potential and contribute meaningfully to the development of society. But that world requires that the socialised forces of production that capital has created should be run and managed socially; it requires socialist, planned production.
So long as profit remains the sole motivator for production, humanity will continue to lurch from crisis to crisis, squandering human, financial and natural resources in equal and devastating measure.
