The Cooking the Books column from the March 2018 issue of the Socialist Standard
We know what determines the level of income of those in employment – it’s the cost of recreating their working skills in conjunction with the class struggle and the play of supply and demand – but what about those not in work? What determines the income they get as a handout from the state?
Some light on this was shed by some top secret documents found at the end of January in a filing cabinet in a junk shop in Australia. One of the files concerned the work of a cabinet sub-committee, known as the ‘razor gang’ (down under they call a spade a spade), whose remit was to slash payments to the unemployed as a way of relieving the burden of taxation on profits which had fallen in the slump that followed the financial crash of 2008.
Normally such documents only become available after 30 or so years, but the files related to a much more recent period:
‘One file revealed that Tony Abbott, the former prime minister, considered banning anyone under 30 from accessing income support in a radical proposal before the 2014 budget. Some of his ministers, it said, wanted to ban what the documents termed “job snobs” from receiving unemployment benefits.’
However, the then prime minister didn’t get his way:
‘The proposal was crushed by dissenters in his cabinet who feared that, if implemented, it might force jobless young people into homelessness, crime and other anti-social behaviour.’(Times, 1 February).
There you have it: what governments dole out to the those not in employment for one reason or another – ‘benefits’ doesn’t seem the right word – is the minimum they think they can get away with without provoking too much ‘anti-social behaviour’, in particular crime, which would cost them money to deal with.
Dealing with the unemployed and the unemployable has been a problem for capitalism right from its beginnings, premised as it is on the existence of a class without access to means to themselves produce what they need. In the first instance this involved driving people off the land, which began in England in the 16th century.
The first attempt to deal with this were the Poor Laws, which made providing for those unable to acquire any money to live the responsibility of the parish where they were born. Those who ventured away from their parish were denounced as ‘sturdy beggars’ – and whipped and branded, as Marx describes in chapter 28 of Volume I of Capital on the ‘Bloody Legislation against the Expropriated since the End of the Fifteenth Century’. Right up until the middle of the last century this remained administered locally by Poor Law ‘guardians’.
In 1948 the post-war Labour government made it a national responsibility, run by a board doling out ‘national assistance’. Over time the name changed, first to ‘social security’ (a nice Orwellian touch) and then to its present ‘income support’. But it’s still basically the ‘poor law’ with the government assuming the role of Dickens’s Poor Law Guardians, paying out as little as they can so as to minimise the burden on the capitalist class of maintaining those not in employment.
Basically, then, the answer to what determines the level of income of those not in employment is what the government thinks it can get away with without provoking riots or encouraging those affected to turn to crime. It doesn't always work as the spontaneous riots of 2011 showed.