Unemployed recalcitrance and welfare restructuring in the UK today - Aufheben (UK)

Submitted by Joseph Kay on February 5, 2007

1. Introduction

In recent years, unemployment and similar welfare benefits - the dole - have become a focus of struggle in the UK. The small group which produces Aufheben has been involved in this struggle.

As proletarians who at times use the dole as a means of subsistence, fighting to defend it is an expression of our own needs. But such a fight has consequences beyond the particular needs of the unemployed. The main tack we took up in fighting on this issue was to assert the connection of the dole and wages. The dole tends to act as a floor to wages. Undermine that floor and wages are also undermined. Thus we argued that the current government attack on the dole needs to be seen as part of a broad restructuring programme designed to re-orient the class to accept more work, worse conditions and less money.

This article describes how the dole arose through the inclusion of working class needs in the social democratic state. With the retreat of social democracy, the British state has repeatedly sought to 'reform' welfare. The recent 'New Deal' for the unemployed is an example of this. While carried out by the Labour Party, traditionally associated with social democracy, it is a policy of 'welfare reform' which accepts many of the 'neo-liberal' premises of the previous (Conservative) government but which seeks to develop a new agenda. We suggest that, despite the peculiarities of the UK, what has been happening here is relevant to developments in the rest of Europe.

2. The triumph and retreat of social democracy in the UK

The Second World War was the turning point for UK capital and the working class this century, in that it cleared the way for the consolidation of Fordist mass production and mass consumption ("pile 'em high, sell 'em cheap"). Before the war, these production relations had been a source of intense class conflict, especially in the United States, where they were pioneered. War, and the US victory, cleared the way for introducing these relations throughout the Western bloc. However, this restructuring of capitalist relations of production and reproduction could not simply be imposed on the working class, particularly in the victorious countries. Unions and social democratic parties were needed to integrate the working class into these new relations.

The previous 'mode of accumulation'[1] was based on restricting the supply of commodities in order to obtain monopoly prices with which to accommodate the demands of skilled and organized sections of the working class. By contrast, Fordism entailed the unfettered expansion of production. Capital's real domination and 'scientific' development of the labour process allowed a continual rise in the productivity of labour. In return for conceding control over the labour process, the working class was virtually guaranteed continually rising real wages within the limits of the growth in productivity. These higher wages then provided the demand for the ever increasing production of commodities - cars, washing machines etc. - by Fordist industry. The new mode of accumulation was given stability through the UK, along with other Western economies, signing up to the Bretton Woods system of fixed exchange rates, according to which each national currency was committed to maintain a fixed parity to the dollar. All this was the basis of the Keynesian economic strategy of demand management and investment in the public sector adopted by successive British governments of both main political parties.

Socially, an essential precondition of Fordism was the establishment of a 'post-war settlement'. Pressure from the working class, and ruling class fear of revolution, led to the provision following the second world war of comprehensive and inclusive welfare, corporatism (tripartite organizations and trade union rights), full employment and wealth redistribution through taxation. In effect, the working class exchanged the desire for revolution or further social changes in return for the inclusion of its demands within the state and capital. The 'gains' for the working class - for example, free health care, universal welfare system, social housing - necessarily involved its demobilization. Working class communities were broken up as new housing estates were built. The old networks of mutual aid and solidarity were replaced by the bureaucratic administration of welfare etc. At the same time, rising real wages necessarily involved an intensification and monotonization of work.

With these 'gains', social democracy - that is, the representation of the working class as labour within capital and the bourgeois state, politically through social democratic parties, and economically through trades unions - had finally triumphed. The precondition for any revolutionary movement thus became an attack on this representation. The working class had to overcome the social-democratic containment of its struggle.

The post-war settlement could only be sustained through the economic conditions of the post-war boom; yet it also tended to undermine these very economic conditions. By the late 1960s, the terms of the post-war settlement were an increasing burden on UK capital and served to strengthen the hand of the working class. Workers' demands for more money and less work began to exceed the limits of the social democratic compromise. In 1974, a strike by the miners, the strongest section of the UK working class, toppled the Conservative government. The incoming Labour government tried to defuse class militancy within the terms of social democracy. In order to restrain rising wage demands, a 'social contract', mediated by the unions, attempted to impose equality of sacrifice on all sections of the working class. However, this collapsed in the winter of discontent (1978-9) when many of the key sectors of the working class struck, bringing the country almost to a standstill.

Subsequently, the Thatcher government abandoned the post-war consensus and asserted instead the right of capital to manage. Central to Thatcher's restructuring was both anti-strike legislation and an abandonment of any attempt to mitigate or curb mass unemployment. From the point of view of capital, the Thatcherite restructuring was highly successful. Britain moved from the country leading the industrialized world in terms of strikes and worker 'bloody-mindedness' to one having the lowest level of strikes and the most cowed workforce. Much of the leadership of the labour movement in effect accepted Thatcher's assertion that there was 'no alternative'; the idealistic illusions of progressive social democracy gave way to the 'new realism' of accommodation to the market. Politically, the development of 'New Labour' has been the result.

3. Mass unemployment and 'dole autonomy'

'New Labour' represents the recognition by the political leadership of British social democracy that the re-definition of the post-war settlement begun by Thatcher was irreversible but incomplete. One reason that the re-definition is incomplete is that many sections of the working class have yet to be fully re-integrated into the discipline of the market. To understand this, and hence the importance of work to the 'New Labour' project, we must look at some of the unforeseen consequences of Thatcher's strategic use of mass unemployment.

Mass unemployment certainly had the desired effect on many sectors of the labour market - eliminating at a stroke some of the most militant. The virtual eradication of the mining industry is the key example. Yet the other central aim of the strategy of mass unemployment - to rein in wage levels through creating a reserve army of labour - remained essentially unfulfilled. In effect, a dual labour market emerged. The problem for British capital was that large numbers of people simply got used to long-term unemployment. Those outside work were perceived by the bosses as being unemployable - lacking not just 'skills' but basic work-discipline. So rather than this reserve army of labour creating competition and pressure on wages, the 'recalcitrance' of the unemployed had the effect that, in many sectors, existing workers were simply poached across enterprises and were still able to command relatively high wages. Large sectors of British capital therefore remained uncompetitive.

Most unemployed people certainly sought work, if only because they needed the money. Others, albeit a minority, tried to turn the dearth of jobs to our advantage. Thus, in the 1980s, the dole was the basis of a number of creative projects and movements, some of which were overtly political. In effect, the dole became the trouble-maker's grant. This has continued into the 1990s. For example, many of the most committed anti-roads militants would not have been able to occupy trees etc. without the dole. One could say that the 'refusal of work', a militant tendency which had developed in the workplaces in the 1960s and '70s, now became displaced onto the dole. With such displacement came a certain degree of marginalization, however. While the earlier 'refusal of work' threatened to spread across workplaces and thus form links between different workers and to those outside the workplace, the new 'dole autonomy' too often entails forms of individualism and lifestylism. This becomes clearer when we examine the fragmented responses of people to the current attacks on the dole.

Throughout the 1980s, there had been various attempts to tighten dole regulations. Most had little effect, largely through dole-workers' preferences for an easy life. In 1996, the Job Seeker's Allowance (JSA) was introduced as a more concerted attempt to deal with this problem of the recalcitrance of the unemployed sector of the labour market. The JSA entailed a harsher benefits regime, codifying and systematizing the pressure on unemployed claimants to seek work (any work) or get off the dole. The JSA was openly part of 'neo-liberal' ideology,[2] being designed to increase the effectiveness of the industrial reserve army and hence competition on the labour market, driving down wages at the bottom end.

The main organized opposition to the JSA took two forms. First, a small anti-JSA network of anarchist and similar groups from around the country was formed. These 'Groundswell' groups were often connected to claimants' unions or community action groups. Most participants were unemployed themselves, and had in an important sense chosen to be so. Although the Groundswell network held a few marches, pickets and occupations, attempts to build local solidarity through leafleting and advice (e.g., on getting through Jobcentre interviews) were more prevalent.

Second, many Jobcentre (dole) workers themselves were opposed to the JSA, since the new regime threatened to increase the policing aspect of their work and hence bring them into conflict with claimants. The Jobcentre workers' strike in the winter of 1995-6 was not over the JSA as such (due in part to the terms of the anti-strike legislation mentioned above), and certainly did not lead to a direct victory for the workers. But it served both to delay the implementation of the JSA by three months and to undermine its effectiveness, particularly the ability of management to impose performance-related pay, whereby dole-workers are rewarded according to the number of claimants that they pressurize off the dole.

The Jobcentres in Brighton came out on indefinite strike. Those of us involved in the anti-JSA campaign in Brighton argued that shared action with dole-workers was a practical necessity. Moreover, Jobcentres are a section of the civil service which has seen increasing proletarianization; many dole-workers are on low pay and short-term contracts, and are very similar to the claimants they process. Claimants in the anti-JSA campaign group therefore joined workers on the picket-line. We explained to other claimants that the strike was in their interests. A victory for the Jobcentre workers would strengthen their hand against management, and hence against the implementation of the JSA.

On the basis of the joint action during the Jobcentre strike, the Brighton claimants action group established links with militant dole-workers. Support from organized claimants encouraged dole-workers to resist management demands; and dole-workers passed on information and discussed tactics with organized claimants. On the day the JSA was finally introduced (October 1996) over 300 people laid siege to all the town's Jobcentres; dole-workers used the siege as an opportunity to down tools, bringing the new regime into chaos. Unfortunately, however, such scenes were not repeated elsewhere. Since then, although the JSA is now in force, Brighton Jobcentres are among the most lenient in the country; Jobcentre workers here have a reputation for discreet acts of solidarity at the counter when it comes to filling in JSA forms.

The demonstration against the JSA was perhaps the high point of the claimants' 'movement'. Since then, there have been a number of minor successes against a small-scale workfare scheme, 'Project Work', in which a number of claimants were forced to work for their dole for local charities. Militant pickets and occupations forced many of these charities into humiliating climb-downs. Yet this workfare scheme was poorly funded and lacking popular legitimacy; it was easy for small groups of militants to damage it.

Our problem is that the claimants 'movement' has simply failed to take off. It has been enormously difficult for those of us on the dole to compose ourselves collectively. Most claimants feel that they can avoid the sanctions of the JSA through their own initiatives. Moreover, even most of those who treat the dole as the trouble-maker's grant likewise adopt almost exclusively individual solutions: bluffs, signing off, moving away, petty entrepreneurship, going to university etc. For all the vigour of recent dole-based movements (ecological, 'DiY'[3] etc.), collectively they fail to defend the very conditions that make their lifestyles and movements of resistance possible. As a movement, they think they can simply ignore the threat to the dole.

The Government's problem, however, was that the JSA itself was not enough in the face of general unemployed recalcitrance. The lack of 'job readiness' among too many people, whether conscious or otherwise, represented a major obstacle to restructuring. A further push was needed to deliver more employable workers to the labour market. The 'New Deal' represents such a push.

4. A 'New Deal' for the unemployed

Most attempts by the Conservative government to attack benefits were met by cynicism and passive resistance. Labour, on the other hand, as the party that 'created the welfare state', claims to be the one that can be trusted to 'reform' it. The 'New Deal' for the young unemployed - a 'menu' of job-counselling, subsidized employment and work experience placements - is part of New Labour's 'Welfare to Work' strategy. Welfare to Work is described as the government's flagship policy, since it embodies New Labour's key 'values': 'partnership' in place of class conflict (because New Labour wants business to participate in the socialization of the unemployed);[4] the social role of work and the importance of the work-ethic in providing self-respect; and the fair exchange of rights to benefits for the duty to seek and accept the work or placements offered. The New Deal represents a departure from the overtly punitive 'neo liberal' approach of the last government, to a more integrative approach - but not the integration of social democracy.

By offering people 'training' and personalized job-counselling, the New Deal claims to give claimants what they want - a toe-hold in the labour market. Yet it is a work-experience programme which doesn't actually create any jobs, and its bedrock is the harsh JSA sanctions regime: refuse the counselling or the New Deal 'options' and you lose all your benefits.

The origins of the New Deal lie in old Labour-left job-creation programmes, themselves part of broader economic strategies. Such old left strategies included Keynesian policies of investment in the public sector which would increase the demand for labour. This reflation of the economy would characteristically be combined with controls on imports and capital movements. A programme like the New Deal would be the supply-side counterpart of such an economic strategy, training the unemployed to take the newly created jobs. But New Labour entails the dumping of left Keynesian economic strategies in favour of a rigid 'neo-liberal' economic orthodoxy. For example, the setting of interest rates has been handed over to the Bank of England, and public spending is to be kept strictly within limits determined by inflation targets. However, the 'training scheme' part of the old strategy, in the form of the New Deal, is retained from the past.

Within a broad strategy of abandoning social democracy, what function is served by retaining the 'training' element of an old left programme? Ideologically, ripping this kind of policy out of its social democratic context fits with the New Labour values of 'rights and responsibilities'. Thus, the government offers claimants the ability to make themselves competitive on the labour market; in return, it expects us to compete harder for the existing jobs. This is what they mean by 'empowering job-seekers' and ending their 'social exclusion'. The New Deal is a social democratic policy in appearance which is turned to the service of labour market flexibility. Its principle aim, as with the JSA, is to enhance the effectiveness of the industrial reserve army and so increase competition in the labour market.

In practice, the 'skills' that the New Deal is supposedly equipping 'job-seekers' with are for the most part not what most claimants want. Like previous make-work and workfare schemes, for most claimants the New Deal won't provide anything more useful on the labour market than the ability to get out of bed in the morning. However, for the employers, of course, the inculcation of work-discipline is essential. True, there is a skills shortage in some sectors (Information Technology and construction); but many of the jobs which cannot be filled or which have high turnover, particularly the lowest-paying ones, require reliability more than special skills. The New Deal is intended as an ideological offensive according to which the work-ethic is to be drummed into even those sectors previously considered outside the labour-market - such as single parents and those on sickness benefits - so that the labour market as a whole learns the value of hard work and flexibility.

The JSA was easy to criticize. But the fact that the New Deal has had some success in presenting itself as what the unemployed want has meant that it has become even more difficult for claimants to compose themselves as a movement of opposition. Many of the Groundswell groups either collapsed or degenerated back into their claimants union origins instead of discussing how to build an oppositional movement. The problem is that no new claimants are coming forward to join the groups - particular not young claimants, the group most affected by the New Deal. The remaining claimants action campaigns largely comprise small groups of ageing politicoes with little basis outside particular narrow scenes. Such problems of opposition have been compounded by the government's apparent success so far in winning round many dole workers with a 'new ethos' of 'customer care'.

Despite the weakness of the opposition, it seems that the New Deal might in fact fail for other reasons. The much-vaunted new ethos is likely to come into conflict with government attempts to increase cost-effectiveness, most notably by privatizing some Jobcentre functions. For example, the Reed private employment agency has taken over provision of the New Deal in parts of London. Reed's 'job-counsellors' are much more reliant than are Jobcentre dole-workers on bonuses for shoving people into jobs (any jobs). Where the Jobcentres have to compete in a 'job-counselling' market, the 'new ethos' and hence the credibility of the New Deal will not survive.
Second, and perhaps more serious for the prospects for the New Deal, is the state of the economy. Although employment is rising and unemployment falling, the pictures varies accoriding to region and sector. In areas of already high unemployment, where the manufacturing base is being eroded still further, the number of New Deal placements will start to dry up, just as more 'clients' need to be 'placed'. Only the least attractive and least credible 'options' will remain; and, in a much tighter labour market, the replacement of normal jobs with workfare placements will become more contentious.

5. Is the British situation peculiar?

In Europe there is much talk among leftists, both 'reformist', and 'revolutionary', about a guaranteed minimum income and reduced working time. The closest parallel in Britain is perhaps the demand to increase the level of Britain's (belatedly-introduced) minimum wage for those in employment. The minimum wage needs to be understood as part of the Government's attempt to shift welfare payments from non-workers (e.g., unemployed, single parents, disabled) towards those in work. In the context of benefits becoming in effect wage-subsidies, a minimum wage is a safeguard against employers shifting the cost of reproducing labour-power onto the state. The leftists who try to mobilize around increasing the level of the minimum wage (currently £3.60 an hour for those over 21) try to maintain the illusion that its recent introduction is a social democratic reform which can be built upon, rather than an integral part of the New Labour project of re-imposing work.

The current attack on the dole, a key component of this project of re-imposing work, is part of the British state's particular response to the global autonomy of finance capital which emerged from the class struggles of the 1960s and 70s. Yet the imperatives imposed by this international power of capital are shared by the UK with all the other countries in Europe. All nation-states are experiencing broadly similar political-economic pressures due to the apparent externalization of the imperatives of capital accumulation. Cuts in benefits and the introduction of workfare-type schemes are reflections of the shared context. Although in different degrees and from different stating points, in the UK and other European nation-states, the old social democratic forms have been in retreat.

Yet, of course, the UK situation differs from the rest of Europe in certain crucial respects. In nowhere else in Europe was there an equivalent of the precipitous and class-confrontational Thatcherite restructuring. In the UK, with its historically important finance-capital sector, the backward manufacturing sector could be sacrificed, since surplus-value could still be creamed off from abroad through the money markets. By contrast, in Germany, for example, there were no Keynesian policies to abandon, and no alternative to continuing to base the economy on manufacturing. Hence Germany, unlike Britain, retained key social democratic strategies such as corporatism, even during the decades during which it was forced, like Britain, to pursue policies aimed at controlling the money supply.
The differences between Britain and the rest of Europe persist. Whereas the election of New Labour in the UK was taken as the consolidation of the 'neo-liberal' achievements of the Thatcher period, the re-emergence of the 'socialists' elsewhere in Europe was interpreted by many, including isolated social democrats in Britain, as a partial resurgence of social democracy. There is no 'new reformism' here in the UK, then, but rather the open drive towards labour market flexibility in the form of a new post-socialist 'consensus'.

However, the relation between the form of some of New Labour's policies and their ultimate aims points to a crucial parallel between the UK and its European counterparts. As we have shown, the 'new ethos' of personalized 'job-counselling' etc. which the unemployed supposedly demanded from the New Deal is part of an agenda in which the price is harder work, lower pay, casualization and a tougher benefits regime. While some might imagine that the calls in Germany and France for reduced working time might serve as a crucial advance for workers' rights, as other articles in this collection point out, the reality is increased flexibility and more work in the guise of a progressive demand. The realities of 'time reductions' negotiated by German unions became apparent when they were imported from 'social Europe' into the British context. Here, BMW's introduction of more intensive working practices from Germany into the factories of their Rover subsidiary was rightly seen as a fundamental attack on existing working conditions, overtime payments etc. It was only imposed through the blackmail of threatening factory closure and complete withdrawal of BMW from Britain.

Similarly, we see the demand in Europe for a guaranteed minimum income as something which is likely to be utilized by capital to its own ends rather than serving as some kind of 'transitional demand'. What is actually guaranteed about such an income is that it would be set at a level which would maintain or increase the competitivity and profitability of the economy in question. Also, even if political pressure could set such a guaranteed income at a reasonable level it is likely over time that the state could push it down below previous benefit levels. Any 'radical' intervention on this terrain would thus simply result in helping the state to restructure its welfare system.

In this sense, the social democratic appearance of the current demands is in fact being fetishized by those demanding a reduction in working time and a guaranteed minimum income; the actual substance of the proposed developments represents the reversal of the social democratic 'gains' of the past. In all cases, what we are witnessing is the use of apparently social democratic principles or policies as part of an overall strategy of acceding to the pressures imposed by the autonomy of global finance capital. The 'new consensus' that both New Labour and the apparently more social democratic European left governments are seeking to create is more work intensity and greater flexibility of the labour market - by any means necessary! While New Labour is honest about abandoning social democracy and imposing market imperatives, the policies of the European left governments represent the hollowing out of social democracy.

Whether in form or in substance, social democratic concessions are not inherently progressive but are forms of mediation and recuperation of working class demands. What is particularly effective about such concessions from the point of view of capital is that they function to make the working class demand and organize its own alienation.

[1] The capitalist mode of production is, of course, an essential category for grasping the present form of class society defined by generalized commodity production and wage-labour, where the ruling class extracts surplus-labour in the form of surplus-value (which is divided into profit, rent, interest etc.). But beyond this level of analysis it seems necessary to periodize the capitalist mode of production to grasp the changes that are occurring. The concept of a 'mode of accumulation' is a means to do this. However, it must be remembered that this concept has been developed by the academic Regulation School in a structuralist and technological determinist framework. For us, when describing the features of such periods it is essential to recognize that the foundation is the balance of forces in the class struggle and not the objectified expressions of this. Thus, though finding the concept of 'Fordism' useful for grasping the nature of the post-war boom, we don't accept the concept of 'post-Fordism', which is often taken to mean post-capitalism. For an interesting discussion of this, see F. Gambino, 'A Critique of the Fordism of the Regulation School' in Common Sense, 19.

[2] 'Neo-liberal' ideology is an expression of the freedom of global finance capital. In response to the class struggles of the '60s and '70s and the difficulties in maintaining accumulation, states took actions (e.g., by abandoning Bretton Woods) which in effect created the conditions for the development of the relative autonomy of global finance capital. Through taking this more autonomous form, capital could outflank areas of working class strength. A situation was created in which governments of nation states could claim that they had no freedom of manoeuvre but rather had to compete in terms of labour flexibility, social costs etc. to maintain competitiveness and attract investment. The 'neo-liberal' ideology and practices which Britain and the USA promoted were only the harshest examples of this move by states to present aggressive measures against their working classes as dictated by an external force. The 'Third Way' policies these states now champion are largely a continuation of the same attacks with a softened rhetoric but similar appeal to 'new global realities'. Opponents of 'neo-liberalism' and 'globalization' fall into the trap of opposing the state to capital and then appealing to the state to tame the economy. They are also wont to whine about the irresponsibility of capital and complain that democratic institutions are being undermined. It must be remembered that democratic states have participated in the creation of the structures of the global economy and the current relation between finance and industrial capital. The political and economic, rather than distinct spheres, are two sides of the same coin of capitalist domination. From the proletarian perspective it must always be remembered that finance capital even in its more autonomous global manifestation is not a separate entity but is simply a form that capital takes. It is ultimately dependent on always coming back to concrete labour - to exploitation and insubordination. The class struggle must be fought out with real workers in concrete situations.

[3] 'Do it Yourself'. See our articles, 'Kill or Chill? Analysis of the Opposition to the Criminal Justice Bill' in Aufheben 4 (Summer 1995) and 'The Politics of Anti-road Struggle and the Struggles of Anti-road Politics: The Case of the No M11 Link Road Campaign' in DiY Culture: Party & Protest in Nineties Britain, ed. George McKay (Verso, 1998).

[4] Some businesses responded by donating alarm clocks and bars of soap!