Article on the debt economy, and the demand for a social wage when work doesn't pay.
The five Tory MPs who co-authored Britannia Unchained – a book arguing that an 'idle' Britain needs to 'rediscover the lost virtue of hard graft' in order to salvage the economy – may be hypocrites, enjoying the five week Parliamentary recess as they are, but at least they are honest. There is no 'compassionate conservatism' beating around the bush here: this is the true voice of capital, raw and unadulterated. 'Work harder, work longer, get less – only work will set you free' is the message. This 'Britannia' is one straining at the 'red tape' leash in order to race to the bottom, desperate to compete with China and the Asian economies via cuts in wages and the further dismantling of the welfare state. But in truth, this argument has little to do with economics: this is wholly political, pure ideology. The view of work held by these MPs, and by the right wing press, has actually very little to do with how capitalism operates now, or how it has worked for the past 30 years. It is an anachronism, a hangover from a long-gone time – and, strangely, it is a defunct vision shared by the majority of the liberal and socialist left.
The position of work in our society has shifted under our feet, even as it defines our subjectivity more than ever. Put simply, the work that most of us do everyday has very little to do with how the economy functions. Work, in the traditional sense of a workday and a wage, now finds itself as an economic externality to capitalism: as Marx puts it in the Grundrisse, human labour 'steps to the side' of the workings of capital. From the standpoint of the worker, this is made clear by the fact that it is becoming increasingly difficult to survive through work alone. The repression of wages since the reconstitution of capitalism in the 1970s (through the development of post-Fordist production methods) has meant that workers have had to resort to greater and greater levels of private debt via credit in order to maintain the standard of living necessary to reproduce their labour. The introduction of tax credits by 'Third Way' governments in the UK and US to top up wages is a tacit admission that work does not pay – as demonstrated by statistics showing that nearly a fifth of those receiving housing benefit in the UK are currently in work, or that seven million people used payday loans or other forms of credit to cover their mortgage repayments in 2011. Add to this the millions of temporary and 'precarious' workers on zero hour or casual contracts, as well as those forced to work for free via workfare schemes, and the link between work, the wage and economic survival becomes ever looser.
How has capital been able to repress wages to such an extent? The political project of neo-liberalism – attacks on unions, outsourcing, privatisation – has been exhaustively recorded by people like David Harvey and there can be no doubt that it was a deliberate attempt to reclaim power by the ruling class. But the weakness of labour has also been a consequence of an immanent drive within capitalism – that of technological innovation. Less and less living labour is now needed to produce more and more goods. Even in China, that fabled powerhouse of industrial production, the number of people employed in industrial production has remained at the same level during a period where the country's economy has tripled in size.  This has led to a situation where, globally, an ever greater number of people are surplus to the requirements of capital, useful only for the downward pressure on wages that the availability of an 'industrial reserve army' provides.
But the reduction of the amount of living labour in the production process also presents difficulties for capital itself. Marx makes it clear in Capital that, as the exchange value of a product consists of the amount of labour that was involved in making it, only living labour – workers – can produce that value. Technology is an incredible force for the production of surplus value, but it cannot create value on its own. Therefore, when a technological innovation reduces the number of labourers needed to make a product, the relative surplus value of that product increases – more products are made for less labour – but the overall exchange value of that product decreases. In addition, in order to sell all of the newly cheapened product, the market for that product must expand. This means that technological innovation presents capital with a double problem – how to continually expand the market so as to generate enough demand to sell the product, and how to continue to make a profit from a production process which has less and less value to play with from the start.
In the Grundrisse's 'Fragment on Machines', Marx draws out the implications of the logical conclusion of this process – of continuing to measure value through labour time, while simultaneously using technology to reduce the amount of that labour time in the production process to almost zero:
'As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange value [must cease to be the measure] of use value. The surplus labour of the mass has ceased to be the condition for the development of general wealth...Capital itself is the moving contradiction, [in] that it presses to reduce labour time to a minimum, while it posits labour time, on the other side, as sole measure and source of wealth.'
This crisis of value, combined with a saturated market, was one of the contradictions that fed into the economic crash of the 1970s – along with an increased antipathy amongst workers themselves towards the rigidities of a life subsumed by wage labour within a Fordist mode of production, as articulated in the uprisings of 1968. In response, capital upped the political attacks on labour and increased flexibility within production – and crucially expanded its search for profits outside of the sphere of production. The workplace was no longer the primary place in which surplus value was generated. Surplus value was now to be extracted from the entirety of social relations: from the lives, not simply the work, of workers. The buying and selling of debt on the financial markets, the inflation of a string of asset bubbles, the enclosure (or privatisation) of previously common goods, and the extraction of rent (from both the land and the accumulated knowledge of society via patents) became the central means by which capital found its profits. Carlo Vercellone has argued, following Marx in Volume III of Capital, that this process has eliminated the distinction between 'profit' – in the sense of capital which is reinvested in the production process – and 'rent', the excess value which is creamed off by landlords and rentiers after the capitalist and labourer have had their share. Vercellone describes this process as the 'becoming-rent' of profits.
In The Violence of Financial Capitalism, Christian Marazzi shows that even for companies at the heart of the so-called 'industrial economy', such as General Motors, the workings of their financial investment arm were as, if not more, important than the actual production of cars. For this reason, therefore, Marazzi argues that the contrast between the 'real', 'productive' economy, and the parasitic 'financial economy', so beloved of liberal commentators, is a false one. 'Financialization is not an unproductive/parasitic deviation of growing quotas of surplus-value and collective saving, but rather the form of capital accumulation symmetrical with new processes of value production'.
Of all of these new processes of value (or perhaps more correctly, wealth) production which take place outside of the workplace and within the sphere of social reproduction – Marazzi points to the 'Ikea model' of people working for free by building furniture at home, and the 'Google model' of internet users freely producing and sharing data which is sold to advertisers, but could equally include longstanding examples such as housework and the raising of children. The most important though is debt. It is no exaggeration to say that debt has replaced work as the driving force of capitalism. Indeed, as public-service consuming workers, failing to produce sufficient value, we are a drain on capital: only by going into debt (via our credit cards, our houses, our education) can we generate wealth.
The figures are startling – most people spend far more on their debt repayments and interest than they do on commodities and services. According to the US economist Michael Hudson, 'Some 40 percent of blue-collar wage income in the United States typically is spent on housing [rents and mortgages]... Another 15 percent or so is earmarked to pay other debts, student loans to get the education required for middle-class employment, auto loans to drive to work...credit card debt, personal loans and retail credit'. Add in regressive Medicare and Social Security taxes (11%), plus income and sales taxes (10 to 15%), and American workers are left with less of a third of their wages to spend on the means of survival. Rising house prices, enabling the release of mortgage equity, acted as a form of compensation for low wages and topped up demand in the years preceding the 2008 crash: indeed, the US economy would have been in recession in 2000 and 2001 were it not for the boost from the withdrawal of mortgage equity. This enormous pool of private debt was, of course, then put to work by the financial economy through the now-infamous array of derivatives, asset-backed securities and collaterised debt obligations. As Marina Vishmidt notes:
Neither capital nor labour are interested in jobs: all anyone is interested in these days is assets. Capital has neither the inclination nor the resources to offer workers more exploitation right now, but there has to be recognition that exploitation remains the bedrock of the social contract, and it is achieved most efficiently without jobs in an economy premised on the capitalization of debt. Isn’t the “jobless recovery” appearing as the watchword in economic analysis today built on assumptions that consumption (or “consumer confidence”) can single-handedly drive a return to prosperity, that is, through another credit bubble?...It seems evident, from this perspective, that we can only produce wealth (not value) for capital now through our debt repayments.”
And this is where we can return once more to Britannia Unchained and its ideological function. Despite work's increasing irrelevance to the processes of capital accumulation, capitalism must continually reproduce the class relation between capital and labour, via the wage, in order to survive. The wage relation may not be necessary in economic terms, but it remains vital in a political sense – as a means of control, a way of preventing 'the serious risk that we will end up finding a good use for our idleness', as the French collective, The Invisible Committee, put it neatly. This political imperative not only explains the constant exhortations to 'work harder', to 'graft', but also the ever-increasing administrative and bureaucratisation of work, the never ending processes of self-auditing and performative – and ultimately pointless – activity which makes up so much of the working day.
The problem for anyone wishing to challenge this state of affairs is that under current conditions it is almost impossible to imagine a means of mass survival outside of the wage relation. It is therefore understandable why much of the Left has taken the position of fighting for the 'Right to Work' or for the return of Keynesian full employment. But in effect, this amounts to coalescing with the Right in allowing capitalism to keep up the charade, in perpetuating a subjective reality of a class relation and economic structure which no longer exists in that form. Rather than joining capital on the shadowplay battleground of fighting for more, 'better' work, the Left should instead adopt the 'Refusal of Work' position that was articulated by the Autonomist movement in 1970s Italy. By labour refusing to take up its position within the wage relation, by rejecting the pretence that the 'workday' bears any relation to the production of value or wealth, the terrain of the struggle shifts to where the real action is: the reproduction of life, of social relations, and debt. In the same way that capital was forced to adapt to the crisis of value and the demands of workers for more autonomy in the early 1970s, so a refusal of work and a concomitant focus on debt as a site of struggle would mean that capital would have to at least attempt to accommodate such demands in order to survive.
Debt is both a site of weakness and power for capital. Being laden with debt makes any political action that affects a worker's ability to repay extremely risky, especially when that debt is tied to housing. But equally, it cannot be emphasised enough that it was the non-payment and default of 'sub-prime' debt which triggered this crisis – and which paradoxically revealed the true power of the debtor-subject. It was the non-payment of debt that brought capitalism to its knees, something that a century of strikes and workplace action has not been able to do. On a nation-state level, the horror that sweeps through the rentier class when the prospect of a Greek default is raised just serves to highlight how potent the fear of non-payment of debt is. The task of the Left should therefore be centred upon the organisation of a debtor class, rather than the worker – beginning with the demand for a debt jubilee, backed up by the threat of mass default, and for a social income that is not tied to the workplace. This would in effect constitute only a formal recognition of a state of affairs long in existence – but the power inherent in calling things by their true names should not be underestimated.
Matt Bolton is a writer and Masters student at Birkbeck.
 Karl Marx, Grundrisse, p.705. http://thenewobjectivity.com/pdf/marx.pdf
 See David Harvey, A Brief History of Neoliberalism, Oxford University Press, 2005.
 Karl Marx, Grundrisse, pp.705-06. http://thenewobjectivity.com/pdf/marx.pdf
 Christian Marazzi, The Violence of Financial Capitalism, MIT Press, 2010, p.48.
 The Invisible Committee, 'The Coming Insurrection', p.48. http://libcom.org/files/thecominsur_booklet.pdf
Taken from the New Left Project