THE capitals of the world seem to be sounding different. Apparently, there has been a shift from ‘methodological individualism’ to ‘methodological nationalism’. It is now less about free market and competition and more about protecting political and economic boundaries. Those both on the right and neo-left who were not able to see the State in the mystified neoclassical imagery of market are taken aback by the entry of Trump coming loud and clear talking about tariffs, illegal immigrants, jobs of their own workers and industrial policy. Neoliberalism is a class project, a restructuring of the State apparatus in favour of the strongest capitals, namely, the global monopolies in production or in finance. The State in neoliberalism has never been and not to be misunderstood as the protector of free market, rather they are committed to persuade the interests of the monopolies either in the name of competition, free flow of capital and facilitating convergence through investments in developing countries or if needed through protection, trade war and militarisation.

The deep crisis of capitalism is being exposed day by day by rising inequality, unemployment, rising cost of living, climate crisis and chasm in society in welcoming the fruits of human knowledge with the advent of new technology. The impoverishment of the working people of the world and the insane accumulation of wealth by the global corporates, recurrent crisis and downward distribution of burden further to the working people has reached its limits. It is increasingly becoming clearer that the contradictions of capitalism are becoming acute, and the State is implicitly or explicitly trying its best to manage the discontents emerging out of this crisis. And in this mission, hyper-nationalist overarching political narrative, communal, racial or caste-based polarisation and riots and individualised welfare schemes are the major arsenals in this right-wing management of class hegemony.

IMPOVERISHMENT UNDER

NEOLIBERALISM

Neoliberalism introduces logic of market and competition as the organising principle of society including its non-economic components. This is ensured by the neoliberal State that assumes the responsibility of destroying all institutions that enable collective regulations. It instills market behaviour within society as if the State and the individual should adopt the logic of firms. All human solidarity should be broken by celebrating the rise of utility maximising ‘rational’ individuals and cost-benefit analysis must be internalised as the cardinal principle of human behaviour. In the name of individual rationality neoliberalism ensures maximum extraction of surplus for capital and impoverishment of labour. Impoverishment in a Marxian sense is not limited to its economic sense but a diminution of human existence in every respect.

In economic sense impoverishment relates to wages. Wages can be understood in three ways: nominal that is the money value that the worker receives in exchange of selling labour power. This is the wage which the worker can see and bargain on. The other is the real wage which reflects worker’s purchasing power which may eventually decline even if nominal wages increase because of inflation or rise in prices of worker’s consumption basket. A wage paid to the workers by the capitalists is taken away in a roundabout way by increasing prices and making profit out of that. The third is the relative wage or wage share received by the workers out of the total value added. Marx’s notion of exploitation is linked to this measure of wage which reflects the rate of exploitation, meaning the proportion of value the worker is getting out of the total value produced. Impoverishment, hence, is not poverty in terms of levels of income but a relative concept, the share of worker out of total value-added, that may fall even if the level of wage increases. But the current phase of capitalism is characterised by episodes of stagnating and falling real wages and deep decline in relative wages or workers’ share in the total value produced. This is accompanied by a vast mass of people who are jobless. They shouldn’t have any claim according to the capitalist logic because they do not contribute to production as they are unable to sell their labour power. They don’t contribute not because they do not want to, rather because they don’t get the opportunity to be employed. In other words, as Marx said that they are in a position worse than being exploited!

The widening gap between the empire of profit and the vast majority of excluded and exploited is exacerbating the conflict in neoliberal capitalism. But capitalism is neither ready nor capable of addressing the structural injustice. Hence it has to deploy means to displace the structural injustice by foregrounding false ‘injustice’ based on redefining and emphasising identities of victimhood that creates enmity within the working people. And the second is the architecture of social welfare which also becomes an instrument of control primarily to pacify discontents keeping the structural injustice intact.

NEOLIBERAL WELFARE

SCHEMES

Instituting the market requires dismantling public provisioning as establishing private property is the fundamental precondition of market. Hence collective assets of all sorts must be handed over to private owners. All goods and services need to be bought by the consumers, but since market also excludes those who are unable to buy and since the impoverished proportion increases with rising inequality and exclusion, there has to be some mechanism of transfer from the State exchequer to ensure political support. The spree of cash transfers of different modes targeted to particular groups and sections of the population, those might be revolving over time, has become the hallmark of the neoliberal State welfare. These definitely provide some breathing space to the poor and the vulnerable in the face of neoliberal onslaught. It is also important to note that although these are initiated as targeted schemes and not designed as an extension of rights, but increasingly political competition driven by the pressure from below hardly leaves any option for governments of withdrawing the existing schemes. In a way the power of the people hits back in an indirect way and pushes the frontier of welfare. But one must not lose sight of the crucial fact, that these bargains are very much confined within the limited space of declining government expenditure and fiscal austerity that neoliberal governments adhere to. Number of schemes may increase but accompanied by deep cuts in public expenditure which essentially shifts the burden of crisis on the working people. But as unemployment and impoverishment increases, the relative importance and the dependence of poor households on government transfers increases which might give political pay offs at the margin to the class forces who are the real causes of impoverishment of the majority.

Also, the architecture of neoliberal welfare schemes is radically different from the framework of Keynesian welfare regimes. The social democratic welfare regimes of the inter-war years were a capitalist response to establish an equilibrium of class forces articulated through social democratic state in the backdrop of advancing socialism in the world scenario. The foundational structure of such welfare was to acknowledge stable share of the working class in rising output, together with recognising the rights of workers in the space of production. The concept of family wage and living wage, rights for collective bargaining, old age pension, medical allowance, paid leave all were meant to recognise the fundamental rights of workers who are contributing to the process of production. For about two decades the share of workers in value added remained stable in advanced capitalist countries, meaning workers could retain their share of gains emerging from rising productivity.

Contrary to the scenario of balance of class forces, both globally and within countries, the current structure of welfare measures is designed in the context of class assault upon the working people by capital. Welfare schemes are largely designed targeting segments of citizens and refers to the sphere of consumption rather than production. Once welfares are delinked from productive activities, the claims lack legitimate force, as someone is getting something without directly contributing to the society. The receiver of the benefits also internalises a sense of gratitude to political parties in power reciprocating in exchange of transfers despite these are transfers out of public money. This perfectly suits the ruling class because such an engagement pre-empts class mobilisation and individuates the worker as a beneficiary. This perpetuates dependence and disenfranchises class identity. Undoubtedly such transfers are bound to increase over time and such demands should be extended. But it propagates an illusion of ‘gains’ while essentially hiding the crucial fact of deep cuts in public expenditure and disempowerment of working people. In such a context of short termism and myopic political vision of bourgeois parties, it is the Left who uphold the imagination of universal social justice, mobilise classes based on their contribution to productive activities and demand jobs that fetch righteous returns and reasonable social protection for those who are excluded and disabled. Instead of celebrating minimalist transfers that barely protect subsistence, the Left demands higher allocations for food subsidy, health, education, shelter and old age pensions by imposing tax on the wealth of the few superrich.