Sunday, 1 December 2019

So let us not talk falsely now, the hour is getting late

I haven’t posted much about Brexit on this blog. Partly this is because other people are more than happy to do so I’d just be repeating what someone else has said. But it’s also because I’m convinced that in future years, in the aftermath of a future economic crash, the level of attention devoted to something that really doesn’t change the economic fundamentals much will seem bizarre.

However, I think the leaked US-UK free trade negotiations are very interesting and do merit comment because they indicate that the form of Brexit matters. Johnson’s regulatory disalignment with the EU and liberalisation-based free trade agreements represents a definite fork in the road compared with continue customs unions membership and single market alignment (the Labour party plan) or remaining.

To recap, the leaked documents reveal that US negotiators are pushing for “total market access” to be “the baseline assumption” of the talks. This primarily means services because services are the dominant part of the British economy. And this definition includes the NHS because the NHS is considered a service.

British officials have promised to “fly the good for flag for services liberalisation”. The NHS could only be excluded if, as is the custom with trade negotiations, it is specifically exempted. And the British side has declined to exempt the NHS, just as David Cameron refused to do in the doomed TTIP negotiations between the European Union and the US a few years ago. That is extremely revealing.

Other elements of the nascent US-UK negotiations include introducing lower food standards (chlorine-washed chickens), banning any mention of climate change and establishing the right of corporations to sue the British government, without any right of appeal, for practices they regard as unfair.

The EU and total market access

But before we rush to put our bodies on the line for the status quo, it’s necessary to recall what is already happening in the absence of a newly-minted trade agreement with the USA. Because it’s eerily similar. The afore-mentioned TTIP free trade agreement (FTA) between the EU and the US was considered to pose “real and serious risks to the NHS”. There were genuine worries it could also have undermined food safety, bank regulations and environmental standards. It was negotiated in secret (you had to go into a secure reading room to examine it) and it would have established exactly the same ‘corporate court’ system as the US-UK negotiations. In fact, as a result of EU FTAs with many different countries, and also within the EU, so-called investor-state dispute tribunals are extremely common. 

In Britain, the NHS is already being privatised with mental health services on the frontline. Moreover, under EU laws on fair competition, companies such as Richard Branson’s Virgin are able to sue the NHS on the grounds of putatively poorly-run tendering processes.

However, I think there is a difference between EU free trade and a future in the US orbit. That relates to public opinion. The TTIP, which was negotiated between 2013 and 2016, is dead in the water – in April 2019, the European Commission declared that TTIP was “obsolete and no longer relevant”. Partly that outcome is a result of mushrooming governmental and public opposition to TTIP provisions as they were gradually exposed. Doubtless the European Commission would have liked to proceed, without opposition and scrutiny. But it couldn’t. The same European public opinion will influence what a future Labour government can and cannot do and what is politically possible.

The same could theoretically be said of the British government. But if Johnson wins a majority on December 12 he will take that as permission to blithely ignore public opinion for five years, by which time a US-UK FTA could be negotiated and sealed.

Not all people’s votes are the same

There is also a question here about how Brexit is negotiated which has been overlooked. The leaked negotiations revealed that a no deal Brexit (still on the cards if the UK doesn’t reach an agreement on future trade arrangements with the EU by December next year) is the US’s preferred option. Conversely if the UK is still in the Customs Union and aligned to the single market – which is Labour party policy – a US-UK FTA is seen as a “non-starter”.

So if Labour wins the election and negotiates a deal in which Customs Union membership is maintained and organises a referendum with that deal going up against Remain – as is its stated policy – that will specifically rule out any future US-UK trade negotiations which lead to the privatisation of parts of the NHS or dilution of food standards. Regardless of which side wins, it won’t happen.

However, if there is a 2nd referendum between Johnson’s deal and Remain, a future US free trade agreement – with all that that entails – is eminently conceivable. Indeed, such a scenario – propping up a minority Conservative government to allow a ‘people’s vote’ – was put forward by Lib Dem deputy leader, Ed Davey, now that Lib Dem ‘Plan A’ – revoking Article 50 – has been conceded to be pie in the sky.

Ironically, a putatively principled opposition to Brexit could result in the worst kind of Brexit happening.

Thursday, 19 September 2019

Johnson and Cameron: A Tale of Two Extremes

We are, we are told, suffering under the yoke of one of the most right-wing governments Britain has ever had. Before coming to power, Boris Johnson chewed over tactics with white supremacist Steve Bannon. Upon achieving it, he has suspended Parliament, appointed a Home Secretary who has registered her support for capital punishment and wants criminals to “literally feel terror” and dog-whistled to racists, the far right and empire nostalgists that he is on their side.

Indeed, the person who first came up with the idea of proroguing Parliament is a former Conservative special adviser, now Brexit party supporter, who convinced himself that ex-PM David Cameron was leading a “homesexualist movement” and infecting Britain with ‘cultural Marxism’ lifted straight out of the Frankfurt School.

So it’s plausible – for those of us who inhabit Planet Earth – to believe that Britain is now led by a hard right nationalist party that has brutally severed its ties (by expelling 22 MPs for example) with the saner, moderate, liberal conservatism that preceded it. Plausible, indeed believed in by many people, but not correct.

In fact, we are confronted by two extremes – undoubtedly different in certain ways – but united by a dogmatic, ideological conviction that the damage they inflict is justified and necessary.

It’s hard for people not of the Conservative persuasion – and not under the age of 60 – to understand how David Cameron upset traditional conservatives. Commitments to equal marriage, to disowning Section 28 and to prioritising more female and ethnic minority candidates, which appeared to successfully‘detoxify’ the Conservative brand, were anathema to many Conservative members who think wearing ties should be de rigueur and that Christianity should lie at the heart of public policy. Such people are economically Thatcherite but culturally traditionalist, which might appear contradictory, although not to them. They are also invariably anti-EU. Cameron was tolerated while he won elections and referendums, which all came to juddering halt in June 2016.

But all the while, and despite protestations from esteemed academics that he was a one-nation Conservative at heart, Cameron deepened Thatcherism. Austerity took public sector cuts to places Thatcher could only dream about, privatisation was driven as far as it could go and the NHS was starved of funding like never before while being opened up to the private sector. Anti-trade union laws were extended, while protection against unfair dismissal was diluted. And for the poor and disabled, Cameroonian Conservatism made the Thatcher era look positively compassionate by comparison. The Con/Lib Dem coalition government – followed by a year of ‘pure’ brand Cameron – left a trail of ruined lives, deaths, suicides, destitution, homelessness even self-immolation.

This was, by any fair assessment, an extreme and intensely ideological government but its leading lights presented themselves as centrists, modernisers and “liberal internationalists”. That they were taken seriously by large swathes of the media can be explained in part by the fact that their amplifiers had no personal experience of the depredations the Tories and Lib Dems inflicted. Those that did – though they number in the millions – were largely silent in public debate. Hence, Brexit, which was rooted in deprived areas hardest hit by austerity, appeared to many commentators to come out of the wild blue.

This political mind-set has been described, by Tariq Ali for example, as emanating from the ‘extreme or far centre’. Its manifestation certainly wasn’t limited to Britain. The EU imposed savage austerity on countries such as Ireland, Portugal, Greece and Italy and in order to get its way was quite prepared to overthrow governments and override the will of national Parliaments – in fact proroguing the House of Commons seems almost quaint by comparison. But neither this, nor the pursuing of secretive trade deals with the United States, has dented its reputation as a bastion of enlightened liberalism surrounded by populist sharks.

In Britain, the transition from David Cameron to Boris Johnson – in which the failures of the first flow inexorably into the predominance of the second – reveals several things. One is that the liberal conservatism Johnson is determined to expunge from the Tory party is very selective in the principles it is willing to stand up for. It is pro-EU and against overt bigotry. But, as shown by the voting records of Tory dissidents such as Dominic Grieve and Anna Soubry, strangely unmoved by the social callousness of the Cameron-Lib Dem government. Hence, contemporary liberal conservatism should not be mistaken for a rebirth of the Tory Wets of the 1980s. They – Ian Gilmour for example – would have been outraged, primarily, by Cameron’s inherently Thatcherite approach to social and economic policy and the human damage it inflicted. Unfortunately, they no longer exist.

Another is the strange sight of strict austerians reneging on their previous iron commitments to reducing public spending and controlling the deficit, obsessions which have defined politics for the past eight years. The chancellor, Sajid Javid, noted The Economist, “is a fan of Ayn Rand and hangs pictures of Margaret Thatcher his office. Yet on Mr Johnson’s instructions he announced an extra £13.8bn in election-friendly giveaways, paid for with extra borrowing.”

However, as highlighted by this blog last year, such flexibility is simply what happens when the Right realises that patience with austerity is at breaking point and the consequences of persevering with it are worse than performing an intellectual volte-face.

Undoubtedly Britain now has a ‘hard Right’ government under Boris Johnson. But it has already experienced one for the past eight years, although one whose sheen was that of modernising conservatism. Now some of the elite are getting a taste of the ruthlessness that Cameron routinely meted out to ordinary citizens. But don’t worry too much – they won’t starve.

Friday, 9 August 2019

The social democratic moment

Some time ago I tried to point out that, despite the endless barbs being hurled in his direction insisting he was barely disguised Marxist, Trotskyist, Stalinist etc., Jeremy Corbyn was and is a mainstream social democrat. In fact, much more so than other people who proudly ordain themselves social democrats.

This wasn’t in order to denigrate him from a far left perspective. Social democracy, like all political traditions, has flaws but also distinct characteristics that mark it out from other allegedly ‘progressive’ currents such as liberalism. At this moment in British politics, the distinctiveness of social democracy needs to be loudly proclaimed. It isn’t liberalism and if it is drowned in a sickly sea of liberalism, this once-in-a-generation chance to alter the British political system will be lost.

A century ago

Historically, social democracy emerged in the early 20th century as way of advancing the interests of the working class through the Parliamentary system. This was to mark it out from syndicalism – before the First World War a massive movement – which dismissed the Parliamentary system altogether and advocated that workers themselves should democratically control industries and workplaces. This is why the ‘Labour’ party was created – to represent the interests of labour (i.e. workers) in Parliament.

Social democracy also, in time, broke from orthodox Marxism in that it sought immediate improvements in workers’ conditions, rather than waiting for some inevitable collapse of the capitalist system. And it also repudiated Leninist revolutionary socialism. Social democrats upheld the Parliamentary, ‘democratic’ system, fought (fitfully) for universal suffrage, were consciously reformist and rejected ‘democratic centralism’ – the idea that an authentically Leninist (or Trotskyist) political party should work out an agreed line and then rigidly enforce it amongst its membership. In theory, social democratic parties should be democratically run and encourage free and open debate.

To reiterate, there are flaws within social democracy. The lack of interest in the fate of the capitalist system, or how it is changing, means that social democrats rather blindly assume the state can always be deployed to improve people’s conditions when those conditions also depend on capitalism functioning well. In the context of spiralling climate change, the connection between healthy capitalism and prospering social democracy is a glaring contradiction. Admittedly, social democrats do sometimes envisage life beyond capitalism, a hazy end point called ‘democratic socialism’ which is always seemingly in the distance and evasive of exact definition.

Moreover, the commitment to democratic, Parliamentary means papers over, not just Leninism, but also other forms of democracy as well, such as syndicalist ‘workers’ control’ and democratic councils, or soviets, the directly democratic, face-to-face forms of government that, as pointed out by Hannah Arendt, appear spontaneously in every revolutionary outbreak and aspire to permanence.

After neoliberalism

However, there are also valuable features in social democracy which now need to be brought to the fore. One of these is – or should be – a commitment to class politics and to represent the interests of its class. Whereas in the 1950s and ’60s this class element meant social democracy was fundamentally a conservative force, protecting post-war gains, now – in the aftermath of decades of neoliberalism, privatisation and the privileging of the power of employers over employees –  to be true to itself, it has to be radical.

One instance is collective bargaining. At their height, collective bargaining agreements covered over 80% of workers, but now they apply to just over a fifth of the workforce and less in the private sector. In that they presuppose negotiations with trade unions, they symbolise a recognition of the rights and dignity of labour, in contrast to the current attitude of treating workers like civilians in an occupied country – constantly under suspicion and surveillance. Plans for a resuscitated Ministry of Labour – which will spearhead attempts to revive collective bargaining across the economy – are redolent of Ernest Bevin’s reign as Minister of Labour in the Second World War coalition when for the first time in British history a rough, day-to-day industrial democracy prevailed.

This highlights an integral difference between social democracy and liberalism. Social democrats – in common with liberals – should be in favour of democratic norms, equality before the law and human rights. They should be implacably opposed to the ethno-nationalism of Donald Trump or the hard-right culture warmongering of Boris Johnson. But social democrats have to be about more than this.

Without practical rights and popular organisations that mediate between government, powerful institutions and ordinary citizens, democratic norms are just formal and empty (which isn’t to say they are without value) and can easily be co-opted by wealthy interests. For example, the introduction – by current Liberal Democrat leader Jo Swinson – of fees of up to £1,200 for attending employment tribunals is something no social democrat can ever countenance because it assumes, in time-honoured liberal fashion, that the formal, theoretical right to justice no different to the practical ability to access it.

This acknowledgement that the formalities of liberal-democracy and abstract human rights are insufficient can lead social democrats into interesting areas. It can lead them to attempt to democratise the economy and contest the divine right of capital to rule in the ‘private’ sphere of the economy. To be sure this is not inevitable. Historically, there are numerous occasions when social democrats have been mind-numbingly unimaginative and cemented the rule of bureaucracies and managers. Famously, Herbert Morrison (Peter Mandelson’s grandfather coincidentally), as deputy Prime Minster in the post-war Labour government, insisted that the newly nationalised industries be run in a top-down bureaucratic fashion – much like the private companies they superseded – with absolutely no concession, beyond the rights of trade unions, to the right of workers to have any say in how they were run.

The other social democracy

But there is another social democratic tradition – call it more radical social democracy if you want to – that believes in socialisation, not merely nationalisation and wants to open up both public and private enterprises to the influence of citizens and workers. This can be seen in post-war demands from some trade unions that nationalisation equate to a rough economic democracy, the Institute for Workers’ Control in the 1960s and the 1976 ‘Lucas Plan’, a blueprint to transform a weapons’ company into a worker-controlled firm, producing for social need.

Internationally, this current in social democracy can be discerned in the 1976 ‘Meidner Plan’, the Swedish endeavour to create ‘wage-earner funds’ that would accrue a steadily rising proportion of private company shares, eventually coming to own the firms – and thus most of the economy – outright. The plan was belatedly introduced in 1984 but in extremely truncated form (a ‘pathetic rat’ in the description of its original author, economist Rudolf Meidner).

Now this other social democratic tradition is plainly where Shadow Chancellor John McDonnell resides. His Inclusive Ownership Fund (IOF) echoes the Meidner plan, though with the caveat that a maximum of 10% of company shares can be transferred to the workforce. The ‘right to own’ proposal, which will give the workforce the right of first refusal to buy a company if it is sold, dissolved or floated on the stock exchange, is another example. Services to be nationalised – for example the Royal Mail, and the rail and water industries – would not be handed over to civil servants or imported private sector managers to run but would be governed – in part at least – by workers and service users.

Erstwhile doubts about the record of social democrats in government are appropriate here. As the Swedish case above shows (and it is far from alone), proposals are one thing but the actuality is quite another. Even Theresa May wanted to place workers on company boards before the idea was quietly shelved because of opposition from the CBI. France and Germany both insist on worker representation at board level but the effect is negligible. Moreover, a criticism of Employee Stock Ownership Plans (ESOPs) in the US –  which are akin to McDonnell’s IOF and ‘Right to Own’ schemes – is that they boost productivity and wages but do not entail real participation, a classic social democratic fudge regarding the ‘right to manage’.

If and when a left-wing Labour government is elected, its plans will immediately rub up against the interests of the ‘big end of town’ (as the City of London was called during the New Labour years).  Whether they will then be diluted to ‘pathetic rat’ status is impossible to say. Britain’s business sector is heavily financialised and used to – in terms of internal management – entirely getting its own way. Much will depend on whether the power and reach of trade unions is transformed. In a classic social democratic country such as Norway a limited form of industrial democracy – a joint management model which gives workers’ representatives co-determination over company decisions – can apply because managers and owners accept trade unions as legitimate, in fact essential, parts of the negotiating landscape. Such acceptance is thoroughly alien to the mind-set of British business and there will be immense resistance to any change in the balance of power.

The watershed of Brexit

Clearly one question social democrats now cannot bypass is Brexit. The current Labour party position – implacable opposition to no-deal whilst proposing to negotiate its own deal which it then puts to the country in a referendum including an option to remain – is, in my opinion, the best compromise from a bad situation it didn’t create or desire. Many politicians, including Ed Miliband, Nick Clegg and Vince Cable, voted for the referendum and promised to respect its outcome.

However, social democrats, in particular, cannot be agnostic about the government of the EU. In its core institutions – the Council of the European Union, the European Commission, the European Central Bank and the European Court of Justice (ECJ) – the EU embodies a liberal philosophy anathema to social democracy. Deriving most strongly from German ordo-liberalism, this approach assumes that appointed ‘experts’ and judicial ordinances should have priority over democratic impulses. Laws are mainly made by the Council of the European Union (ministers from member states) and interpreted by the ECJ. It is no accident that classical liberal Friedrich Hayek advocated a pan-state single market – many years before its actual creation in Europe – as a way of protecting the free market from the meddling of democratic governments. The fact that many European social democrats have tamely accepted this liberal settlement shows nothing more than the bankruptcy of European social democracy.

The dilemma for the Labour party is that its ‘soft Brexit’ policy (membership of the customs union, close relationship with the single market etc.) almost certainly presupposes acceptance of many of the laws and directives that accompany EU membership. In at least two areas – state aid and public monopolies which don’t permit outside competition – there will be conflict with the priorities of a social democratic Labour government. In whichever of the two states Britain may be in (continuing as an EU member or the halfway house of Customs Union membership) the only coherent option for a social democratic government is to welcome the conflict, refuse to give in to penalties in the form of fines or law suits and attempt to widen the dispute to other member states. Remain and Rebel as opposed to Remain and Reform.

In Britain at the moment a social democratic Labour party faces two adversaries. One is the hard-right government of Boris Johnson committed to job destroying free trade deals, breaking free of the regulations that irritate entrepreneurs and fermenting a culture war. The other comprises liberals in each of the three main parties who – peculiarly undisturbed by years of austerity that have stripped public services to the bone and the conscious cruelty imposed on benefit claimants and sick and disabled people – wish that the last three years simply hadn’t happened. The answer is not reactionary conservatism or status quo liberalism. Social democracy – for all its flaws – approximates to one. If not now, when?

Friday, 28 June 2019

Our Pikettian Universe

Earlier this month, in announcing plans to replace the David Cameron-created Social Mobility Commission with a new Social Justice Commission, Jeremy Corbyn made a telling, though seemingly unremarkable, observation: “Social mobility has failed, even on its own terms,” he said “… the greater inequality has become, the more entrenched it has become”.

The evidence is all around. According to the aforementioned Social Mobility Commission, social mobility in the UK “has stagnated over the last four years at virtually all life stages”. Last year the OECD reported that, internationally, social mobility was a “reality” for people born before 1975 but has stalled for those reaching adulthood in the 1990s and after. In the UK, according to the OECD, only around a fifth of children of low income families go on to become high earners and only a quarter of children of parents with manual jobs get managerial positions.

These are the results achieved by the unstinting efforts of successive British governments over decades to raise social mobility and achieve a genuine meritocracy. The Conservative-Lib Dem coalition had its ‘social mobility strategy', before then the Blair government vowed to achieve social inclusion, and before then John Major had entered Downing Street promising to create a “classless society”.

Growth and  meritocracy

In Britain, social mobility has all the hallmarks of a secular faith – for people in power at all levels of society a belief in the virtues of social mobility – whatever the evidence – is compulsory, and if it forever seems out of reach, a few policy tweaks, such as adult education or free childcare, will set things on the right course again.

In fact the social mobility faith is remarkably similar to another secular creed – the conviction of the virtues of economic growth. The affinity is most apparent in the fact that belief in them is unshaken by the slight problem that they don’t actually achieve their aims – intergenerational meritocracy in the one case and healthy GDP growth in the other.

LSE anthropologist Jason Hickel, in his book The Divide, correctly observes that “almost the entire economic profession and nearly all politicians” are obsessively focused on raising GDP growth. What he doesn’t go on to note is that this obsession has conspicuously failed to bear fruit. GDP has unquestioningly increased over time, but, as pointed out by the Geopolitical Economy Research Group, the rate of growth, for the world’s industrialised countries, has been trending downwards since at least the mid-1960s.

Since the financial crisis a decade ago, this decline has intensified. For the UK, GDP growth has averaged a mere 1.87% per year since 2010, and for the European Union, the average is even more modest: 1.6%. This is below the 2-3% thought to be essential for profits to be made in the economy and a pale shadow of the 5 or 6% annual growth rates achieved in the 1950s and ‘60s.

Piketty and capitalism

There are several ramifications of low-growth capitalism, one being that debt – corporate, personal and governmental – skyrockets across the board. Another – less noted perhaps – is that low social mobility inevitably follows. In 2014, French economist Thomas Piketty published an almighty tome, Capital in the 21st Century, to general applause and fanfare. Piketty’s central finding was that when returns to capital are greater than economic growth (when r > g), then inequality is bound to intensify. This is what happened, Piketty asserts, during much of the 19th century and has occurred over the last 40 years in industrialised countries. It will also be the default state of affairs, he predicts, during the rest of this century.

What are returns to capital? They are income streams that stem from the ownership of assets, such as share dividends, profits, capital gains, rents, royalties and interest. When economic growth is high, Piketty contends, income from labour – which is the only way those without assets can get richer – can outpace these capital returns. When it isn’t, the opposite is the case.

It is fairly apparent, therefore, to see why, in Piketty’s eyes, inequality should increase in an era of low-growth capitalism, such as this one. But it is also the case that returns to capital, should they increase faster than economic growth, also hamstring social mobility. This is because once these assets are amassed, they are almost always passed on to the asset-holder’s children and also because they become concentrated in fewer and fewer hands over time. Essentially they guarantee wealth immobility and ensure that those who are already rich, not only stay rich, but become much richer.

For Piketty, the decades between 1914 and 1973 were unusual because the rate of economic growth was higher than returns to capital.  Coincidentally, this period – certainly the post-WW2 years when economic growth was conspicuously high – was one in which, according to the OECD, social mobility was a ‘reality’.

It is also true that – contra Piketty – in the last decade income from labour in the UK has risen even more slowly than economic growth, reversing the historical norm. In fact wage levels have, in real terms, contracted, while the economy as whole has grown, albeit weakly. Moreover, overall wage levels hide enormous inequality in remuneration. Corporate chief executives have seen vast increases, while earning levels in the lowest income groups have barely moved at all since the 1990s.

But that does not detract from the fact that income from capital has outpaced economic growth, with all the consequences that that entails.

No more Thatcherism

This ‘Pikettian’ problem explains much about the current travails of the Conservative party. The Conservatives simply cannot bring themselves to accept that Thatcherism doesn’t work anymore. The promise of Thatcherism was that assets – such as shares and council houses – would be distributed throughout society, leading to a genuinely popular capitalism. Privatisation, said Thatcher, represented “the greatest shift of ownership and power away from the state to individuals and their families in any country outside the former communist bloc”. The creation of a ‘share-owning democracy’ was the clarion call of the age.

Unfortunately for the Conservatives, the shift was transitory if it occurred at all. Before Thatcher entered Number 10, individuals owned almost 40% of the shares in British companies. When she died in 2013, that figure had shrunk to under 12%. In reality, large companies are now owned by other large companies – frequently banks – in an interlocking system which the small shareholder has no influence over.

Council houses were swiftly transferred from the people who had bought them under the ‘Right to Buy’ scheme to a small coterie of private landlords. Home ownership in general has been in decline since 2003 accompanied by soaring rates of private renting. Governments of all stripes have since the 1980s tried to stoke a perpetual property price boom, mainly by restricting supply and not allowing council or social housing to be built. In these conditions of low-growth capitalism, the main hope of becoming wealthier lay not in a lifetime’s labour but in realising the capital gains (one of Piketty’s returns to capital) from selling your property, possibly numerous times. A route millions took.

The dilemma for the Conservatives (and Blairites) is that high property prices prevent young people from buying homes in the first place, thus ensuring that home ownership becomes more concentrated over time. And because their original promises have proven so hollow, the Conservatives – to save their electoral skin – have resorted to the zero sum game of fuelling a ‘culture war’ and overseeing a no deal Brexit, even at the cost of completely alienating the sector of society – big business – whose interests they exist to protect. ‘Fuck business’ was a retort that came out of Boris Johnson’s mouth, not Jeremy Corbyn’s.

21st century wage slavery

What our Pikettian universe means is that for many millions of people employment is not – as it was for many decades after the Second World War, even up to the 1990s – an escalator out of their current economic situation and into a better one. As the figures on in-work poverty show, it is merely a means of week to week survival and sometimes, given the fact that many people who show up a food banks also have jobs, not even that.

Naturally, it can be pointed out that most people don’t live in poverty and most people have mortgages rather renting their homes from landlords (and given the fact that interest rates are so low have benefitted from the last decade or so). However, even ignoring the fact that more precarious forms of work are mushrooming, the trend is not in favour of those who clearly gain materially from capitalism. Piketty’s prediction of a low growth future seems quite solid, and in those circumstances, the asset poor will slowly but surely close the gap on the asset rich.

This has ramifications for how work is perceived, although ones that Piketty, who dismisses ‘the lazy rhetoric of anti-capitalism’, does not make. If work no longer comes attached with an ulterior motive – that it represents a way to personally progress – then it will increasingly be seen in terms of its bare essentials: that is, the granting of wages in exchange for obedience. In the 19th century (the original epoch, Piketty contends, when returns to capital exceeded economic growth and wages were flat), the concept of wage slavery – the idea that the employee is forced by the pressure of need to rent themselves out to employers and endures, in effect, a form of slavery during their time at work – was common on the Left, even the non-socialist Left (see Henry George). If the 21st century replicates the economic conditions of the 19th (not literally, mass outbreaks of cholera are unlikely), then the idea of wage slavery will grow in popularity because it will reflect most people’s experience.

This situation also means the traditional ameliorative solution of the social democratic Left – redistribution of income through taxation – will no longer have the effect it once did. If income is primarily secured by the ownership of assets, then redistribution has to focus on ownership. This is why the UK Labour party moves in favour of ‘alternative models of ownership’ – such as cooperatives, municipal ownership and democratic forms of national ownership – are significant. These may be too limited  and too slow  – John McDonnell’s ‘inclusive ownership fund’ would see companies transferring shares to their workforce every year but it would take 50 years for these to constitute a majority – and in essence a policy fix for a systemic problem. But at least they presage a necessary change of thinking.

However, there is a larger problem. Piketty’s central assertion is that low growth capitalism will inevitably lead to inequality intensifying over time. But low growth capitalism is the condition we are told is essential if climate change is to be seriously mitigated. The question is therefore: does averting ecological catastrophe mean entrenching the power of an oligarchy?  I will attempt to provide an answer in a future post.