At one time the Labour Party wanted to reform capitalism into something different and better. Now it isn’t even a genuine reformist party but, in its thinking as well as its practice, is continuing the Thatcherite counter-reformation of whittling away state benefits.
“A new contract that will lift people out of dependence and into dignity” was how Frank Field, the Minister for Welfare Reform, described the proposals in the Labour government’s Green Paper New Ambitions for Our Country–A New Welfare Contract, published at the end of March.
The best form of welfare, declared Field, was work. Everybody able to do so had a duty to work and the Labour government would take steps to ensure that three groups in particular—young people, single parents and the long-term unemployed—fulfilled this duty. Of course it wasn’t presented quite as bluntly as this but in the form of offering these groups the “opportunity” to work and of “helping” them to overcome their “dependence” on state benefits. It was clear all the same that Article I of the new “contract” the Labour government was proposing them reads: Either you take a job or we cut your benefit.
Field was in effect saying that it is better for the poor to be dependent on an employer rather than on the state. But why? To Socialists both forms of dependency are equally undignified, an expression of the fact that in capitalist society the propertyless majority only have a choice of who to depend on for the source of the money they must have to buy what they need to live. What we want is a society in which nobody will be in this position, but where everybody co-operates to produce what is needed and then everybody has access as of right to the common store of wealth to satisfy their needs, a society of “from each according to their ability, to each according to their needs”.
Field, on the other hand, as a manager of the political side of capitalism, has a different point of view. From his perspective, it is better that the poor should be dependent on some employer for an income rather than on the state, for the simple reason that this is cheaper for the state and saving money on welfare benefits is the name of the game.
What Field was announcing was a policy aimed at shifting as much as possible of the burden of maintaining the poor from the state to employers. This has two aspects. First, forcing the able-bodied poor to take any job, however shitty and however low-paid, by threatening to cut their benefits. Second, if the wages are too low, making them up to the poverty line by payments either to the employer or to the person. Subsidising low-pay employers in this way will still cost the state some money but far less than the present system, so Field and his team of accountants at the Department of Social Security have calculated.
This does represent a change of policy, but is one forced on all capitalist governments, irrespective of their political colour, by the workings of the capitalist economic system. Capitalism runs on the profits made in the profit-seeking sector of the economy and most of the state’s income comes from these profits, either through taxation or through borrowing. The state is in this sense parasitic on the profit-seeking sector and when this latter is in difficulty, as it has been since the long post-war boom came to an end in 1973, the state has had to trim its spending.
This is why all capitalist states have experienced a more or less permanent budgetary crisis since the middle of the 1970s. The main consequence of this for ordinary people has been a continual whittling away of the reform measures that existed up until then. This was the policy of the Thatcher administration who carried it out under the ideology of “anti-socialism” by which was meant undoing everything the post-war Labour government had done. This policy is being continued by the present Labour government because, given the economic circumstances, as Thatcher put it, “there is no alternative”.
The only difference is one of tone and style. Thatcher and her ministers arrogantly expressed the contempt the ruling class has always had for the lower orders by denouncing the poor as work-shy scroungers. Blair and his ministers preach to the poor that they have a duty to work in accordance with the Christian doctrine that, because Adam and Eve dared to eat the fruit of the tree of knowledge, all humans have been sentenced by God to hard labour for life. The Tories just cut benefits to the poor but Labour tells them that if they don’t work they won’t get to heaven either.
There was a time when the Labour Party’s ideal was to shift the source of people’s income away from work and more and more towards as-of-right payments from the state. The more daring of their thinkers looked forward to a time when, in return for some socially useful work, everybody would be guaranteed a decent income by the state sufficient to meet their needs. They saw this as coming about as a result of the extension of the system of transfer payments to parents, pensioners, the unemployed, the sick and disabled which already existed. It was an argument that the way forward lay through more, not less, of people’s income being provided by the state.
It was a reformist proposal in the classic sense of the term—a suggested way of gradually transforming existing capitalist society into something different. It was never going to work (since taxing profits to pay people a decent income goes against the whole logic of the capitalist system) and it hasn’t, but at least it represented a view that things don’t have to be as they are. The present Labour government not only disagrees with this classic reformist strategy but wants to move—and is bringing in measures to move—in the opposite direction: away from income-through-the state back to income-from-jobs.
The harsh reality of governing capitalism long ago led to Labour accepting the logic of the profit system. In practice all Labour governments have done this but it has now led to Labour embracing its ideology as well. The Labour Party was set up to try to reform capitalism into something better for workers but it now merely aspires to make capitalism work more efficiently by its own criteria of profitability and competitiveness. Instead of the Labour Party changing capitalism, it is capitalism that has changed the Labour Party.