What is the Purpose of Labour?

Let us accept that the purpose of a political party is not simply to represent a class interest, but to manage an element of the political economy in furtherance of that interest. Thus the purpose of the Conservative Party is to manage parliamentary democracy in such a way as to preserve and reinforce existing privileges. The purpose of the Labour party is to manage labour in the interests of capital and the liberal professions. This isn't a cynical view, merely a reflection of its actual achievements, notably the development of a welfare state focused on improving the quality of labour, and the creation of a hierarchical public sector that privileged the professions. Beyond that, Labour's record in office has merely been the continuation of cautious liberalism by other means.

The current angst over the Labour party's purpose is the product of an era in which workers are increasingly surplus to requirements. This is the result of two, inter-related developments: the rapid advance of information technology, which is simultaneously reducing the demand for domestic labour and increasing the supply of global labour; and the shift of focus for capital expansion and accumulation from the developed to the developing world. In a word, globalisation. While it's moot whether we'll achieve a post-scarcity economy, we are clearly moving to a stage in capitalism's long history where jobs are no longer effective as a universal mechanism of value exchange: balancing the distribution of social wealth (wages) against exploitation (profit). Since the 80s, we have mitigated this through various formal and informal job-creation schemes, from workfare and public sector investment through "bullshit jobs", precarity and the spread of self-employment. These are clearly fragile and inefficient responses.

According to the Invisible Committee, "Today work is tied less to the economic necessity of producing goods than to the political necessity of producing producers and consumers, and of preserving by any means necessary the order of work. Producing oneself is becoming the dominant occupation of a society where production no longer has an object: like a carpenter who’s been evicted from his shop and in desperation sets about hammering and sawing himself". This performative workerism becomes ever more anxious, hence the increasingly paranoid language about "strivers" and "shirkers". This presents a problem to Labour as a party centred on the social value of work, i.e. the belief that we become individually and collectively better-off through work and that the welfare state is a necessary adjunct of the world of work. In contrast, the Tories can thrive politically in an economy where a job moves from being a right to a privilege, and the welfare state is recast as the burden of the workless on the workers.

The Labour leadership contest has been bereft of any real situational analysis, beyond rightist scares about an "existential crisis" (the wall-to-wall coverage the Observer gave to the latest Blairite "directed focus group findings" was hilarious: to determine the way ahead, speak to a tiny sample of Tory voters who obliging parroted Tory propaganda). The contest has been equally bereft of substantive policy debate (ironically, it took Harriet Harman's misjudgement over benefit cuts to spark the contenders into life). As a result, it is essentially a competition of moods: accommodation versus resistance. While the latter has the better tunes, Jeremy Corbyn is likely to lose simply because Labour's raison d'etre is ultimately accommodation. That said, it is worth noting that his fleeting popularity (like that other maverick, Donald Trump) owes much to a visceral distaste for managerialism and the denial of autonomy, and that both the electoral success and the institutional failure of Syriza in Greece is feeding the anti-establishment mood.

Guy Standing of precariat fame notes that "the progressive march of history ... is always about the struggle over the key assets of the time. And in this regard we are living in a tertiary society, not an industrial society. The key assets now are security, time, information (or knowledge) and financial capital, not machines, buildings or other physical assets". Labour, as a democratic socialist party, was initially concerned with the parliamentary struggle over the control of capital (nationalisation). From the 1930s onwards, it transitioned towards a social democratic party, struggling over the control of labour (via the medium of the welfare state), which marked its evolution from an ostensible working class vanguard to a middle class managerial elite. Since the 70s, it has failed to come to terms with the shift that Standing outlines, too often focusing on the low-hanging fruit of the trivial democratisation of knowledge (e.g. academies) and financial capital (e.g. ISAs), while happily ceding control of physical assets to the market. Pro-capital in-work benefits have been its chief policy for addressing security. Notable by its absence has been any attempt to address the issue of work time.

For accommodationist parties like Labour, whether social democratic or neoliberal, there are three options in respect of work time. First, the party can advance a citizens basic income as an continuation of its historic pro-social and redistributive mission, accepting both that the solution must be universal and that it needs to address societal wealth as well as work. Second, it can advance a job guarantee as a continuation of its commitment to full-employment, committing the state to being the employer of last resort and insisting (despite the evidence) that unemployment will remain cyclical. Third, it can advance a managed transition to a parsimonious dole, policing the "left-behinds" and valorising workers/tax-payers. The problem Labour is faced with is not which strategy makes sense in economic terms - the basic income wins hands down - but how this can be effected politically. As the old joke has it: it works in practice, but does it work in theory?

One of the reasons for the reluctance to address a basic income is the recognition that popular macroeconomic understanding has been set back relentlessly over the last 30 years with simple notions such as aggregate demand and multipliers dismissed as abstruse and technical. The parables of microeconomics are now so widespread, from national credit cards to leaky roofs, that any plan that relies on social trust, rather than individual responsibility, is considered crazy talk. Explaining the positive benefits of a basic income on entrepreneurship, innovation and wellbeing is an uphill struggle. It obviously doesn't help when some advocates of a basic income are hamstrung by their ideology (e.g. the anti-growth Greens), but the bigger problem is shifting discussion on a basic income away from a benefits substitute to a more rational way of managing an economy characterised by a declining demand for labour and an abundance of capital.

The job guarantee is a perfectly good response to cyclical unemployment, but it is wasteful and ultimately unsustainable in the face of structural unemployment. The public sector cannot be allowed to compete with the private sector, so both wages and the social value of the work must be inferior. If a profit can be made in any activity, the public sector will have to cede it to the private sector. Consequently, a large-scale job guarantee scheme might well accelerate privatisation and drive down wages for the public sector as a whole. As the number of guaranteed jobs grows over time, so society is coarsened and impoverished. The job guarantee is often advocated because of the presumed externalities of work: on-the-job training and informal skill development, community cohesion and social stability, improved mental health and self-esteem. However, it is doubtful that these benefits would accrue over a long-term dominated by structural, as opposed to cyclical, unemployment. Instead, the job guarantee might produce a new helot class, unable to break into an ever-shrinking pool of private sector jobs and condemned to low-value, pointless toil that undermined self-respect.

The instinctive response of the Tories is to create a parsimonious dole. In practice this will be a basic income, but one that has been birthed out of the existing infrastructure and ideology of benefits, primarily through the creation of limits: the overall benefit cap, the cap on housing benefits, the cap on child benefit etc. This "capping" has become the dominant motif of debate around the funding of the unemployed and the underpaid. It is important because it removes the key distributive mechanism of a basic income: the ability to distribute the fruits of growth by gearing the income level to GDP as opposed to prices or private sector wages. A related tactic has been to question the definition of poverty: what constitutes an acceptable standard of living. The "national living wage" is clearly intended to depress that level, but also to act as a de facto cap - i.e. the implied limit of ambition for equivalent benefits.

Though the state will reserve the right to mandate the wage level (Osborne's marginalisation of the Low Pay Commission is only superficially centralising), in practice the level will be determined by capitalist sentiment. This will inevitably bias downwards in real terms, with business leaders claiming that a generous increase will damage confidence. Though the Tories are effecting a small step up in the short-term (more than offset by benefit cuts), the longer-term trend will be as mean as before. In theory, a Blairite Labour Party might match the rhetoric while being more generous in practice; but, as they found with working tax credits, any mechanism that can be gamed by the private sector will be so gamed, leading to the unintended consequences of under-investment and declining productivity. Even accommodation presents choices: do you accommodate automation and liberate labour, or do you accommodate the implicit blackmail of business's monopoly on the declining pool of jobs?

Labour's strategy since the 80s has been a combination of corporate indulgence (to encourage and subsidise job creation), and public sector investment, to both improve the quality of labour (supply-side) and create jobs (demand-side), particularly in regions unable to independently attract private capital. The limits of this strategy have become obvious, with low levels of corporate investment and high levels of corporate tax avoidance, endemic low-pay and increasing job insecurity, and a beleaguered public sector. The Tories long term strategy towards the welfare state has always centred on division, from the defence of private beds in the NHS, through a preference for means-testing over universalism, to the current speculations of Iain Duncan Smith on Schillerian insurance markets (as with pensions, it can't be long before NICs are "liberated" for employees and abolished for employers). Labour's desire to "revive the contributory principle" risks reinforcing this turn.

The Tories attempt to rebrand themselves as the "workers" party is not merely chutzpah or an attempt to deny the word to Labour ("recasting it as the badge you wear when you earn a living, and you resent subsidising anyone who doesn't", in the words of John Harris). It is a recognition that the core employed (i.e. those with well-paid jobs, rather than the precariat) are a shrinking segment of society that is increasingly open to a pitch based on fear, the preservation of gains, and the acceptance of privilege. This is an old strategy with its roots in the working class Toryism of  Disraeli, which sought to combine deference (the organic "one-nation") with sectional appeals during periods of social and economic turmoil (e.g. anti-Catholic sectarianism in the face of Irish immigration). Despite the Bullingdon Boys, modern working-class Toryism has decisively shifted away from deference since the 1960s towards aspiration (i.e. self-interest), which was nicely illustrated this week by The Sun's publication of a photo showing the royals giving Nazi salutes (this was also an early shot across Cameron's bows to keep the royals away from an EU referendum that will inevitably feature anti-German sentiment).

In response, some on the centre-left have sought to recast Labour as a party of nation and community, detaching it from the workplace (as Harris puts it, "As the great grey millstone that is Labour’s name still attests, paid employment is too often assumed to completely define people’s sense of who they are"). This has produced multiple morbid symptoms, from the sentimental authoritarianism of Blue Labour, through the civic nationalism that casts envious eyes at the SNP, to the Village Green Preservation Society of the likes of Harris ("Labour should finally think seriously about what needs to be conserved and protected: the town centre, the green-belt fields, the bus route, the pub" - Blake and Orwell are never far away). What they all share is a belief that the party should desert the field of the economy (or at least choose to fight more of its battles elsewhere) because labour is increasingly excluded from it. This is the resigned acceptance of enclosure.

Labour was (and was proud to be) the party of welfare when that was seen to be joined at the hip to work: temporary unemployment assistance in an era of full employment; health care and education for workers and their families; and council housebuilding (good accommodation at affordable prices) intended to make up for inadequate private sector provision. Over time, neoliberalism has normalised the traditional Tory critique that welfare is an opponent of work, rather than its necessary support. As welfare has come to be the defining characteristic of the jobless and precariously employed, Labour has sought to cling ever more tenaciously to the life-raft of work: rebranding as business-friendly New Labour, insisting that rights are contingent on responsibilities (they must be "earned"), and treating benefits as evidence of poor personal choices.

The choice embodied in the Labour leadership contest should be about more than just the mood music of accommodation and resistance. It should be about the need to change Labour's purpose to meet the changes in the economy. The New Labour project has failed: we are not a "young country" with high skills and world-beating businesses, generating well-paid jobs and affordable housing. We are a country marked by growing inequality, rentiers, low investment, poor productivity and a worsening balance of payments. Labour will remain accommodationist, but it needs to get back on the front foot as the party best able to manage the transition to a post-work society. Its new purpose should be to "reform welfare", but not in the sense of treating it as an opponent that must be tamed. Instead it should acknowledge that welfare is a universal right and the goal is to manage it in the interests of all, rather than a few. It is welfare that needs a rebrand.