Income Distribution System | Guy Standing
Good morning. I think this is the first time for a long time
I've served at a bar but it's a bit early to distribute drinks so I'll have to
talk instead. It's a great pleasure to be here. I don't like name-dropping
it's a bad bad habit but the last public a presentation I did was what I
thought was a hoax. I was invited by the Bilderberg Group. Don’t know if any of
you know of this but it’s a far-right group as far as I'm concerned of people
in the elite and people like me don't get invited to things like that. But
suddenly I found myself giving an hour-long presentation on the precariat and
basic income. With instead of you sitting there Henry Kissinger instead of you
sitting there, Christine Lagarde and instead of you sitting there Eric Schmidt the
CEO of Google and Sundry Prime Minister's and people like that. Well when they
were introducing me I was smiling someone afterwards said why were you smiling?
Well I said I thought it was a very strange situation to be in to be talking
about the precariat in such circumstances.
Now we are in the midst of a global transformation. Those of
you are familiar with Karl Polanyi is great transformation will know that that
was about the painful construction of national market systems which had a
dis-embedded phase dominated by financial capital and then a re-embedded phase
when the reactions took place against the excesses and the insecurities and the
inequalities that resulted from that dis-embedded phase. Polanyi‘s great
transformation collapsed in the 1970s and in the 1980s the global
transformation began and we are in the middle of it. The painful construction
of a global market system and in the process of course we've seen a liberalization
of markets a modification of everything could be commodified a privatization of
everything that can be privatized. A pursuit of flexible labor markets which imparts
more and more insecurity to people and we've seen the emergence and this is the
theme in the new book of what I described as the most un-free market system
ever created. It's extraordinary because it's been done in the name of free
markets.
The paradox is ridiculous and what we've seen is that more
and more of the money the income's are going to rentiers to people who are getting
returns from property from assets financial or physical or natural, it's an
irony of the age. The Canes had predicted the euthanasia of the rentier have actually
seen an expansion to the point where they're ruling the world and we have a new
regulatory architecture that has been constructed in the last 30 years at the
top of which is the intellectual property rights regime. You couldn't have
imagined it a hundred years ago but we have WIPO which used to be a joke
organization WIPO means the world intellectual property organization and under
that millions of patents millions and millions of copyrights millions of brand
names have been established all and every one of them guaranteeing monopoly incomes
to the possessors. Now you have a tripling of patents every single patent
guarantees the owner of a patent 20 years of monopoly income. You can't use it
they make monopoly income rents. There worth probably twenty percent of global
GDP global national income. It’s huge, this isn't a free market this is a
boondoggle.
Now in the process governments have been shifting public expenditure
more and more to giving subsidies to capital. Subsidies to the rentiers to
attract them to their country or to keep them in their country or to reward
them for favors they've done politically. The growth of subsidies paid by government
has been draining public expenditures and obliging governments to cut benefits
and services to you and me. You can document that with relative ease and what
we've seen is a collapse of the 20th century income distribution system as such.
It used to be for most of the 20th century at least after the Second World War
that there was a rough bargain that the share of national income going to
capital and the share going to labor were roughly stable was a part of a social
bargain. That's broken down everywhere in the world the share going to capital
is being going up and the share of that going to rent has been shooting up
where the share going to labour has been shooting down its a global phenomenon.
So the functional income distribution has got profoundly worse and will not be
reversed. In addition the old the old economics 101 rules of the labor market
broken down. It used to be when productivity went up wages went up no longer. You
see the jaws of the snake opening in country after country.
The same time you see that when employment goes up it used
to be the case that wages went up. Now in country after country when employment
goes up average wages go down. simply because the new jobs are paying lower
wages than the jobs that were disappearing so the average goes down. The same
with profits used to be when profits went up workers gain something it's no
longer the case you could go on. We have a situation in which in the last 30
years the global labor supply the number of people participating in a labor
market across the world has quadrupled. What that means is that an extra two
billion people are part of a globalizing labour market all of those extra two
billion were habituated and resigned to take a standard of living 150th of what
a Swedish or a British or an American worker with it regarded as the norm. Now
you don't have to have a PhD in economics to realize you'll who have huge
downward pressure on real wages in those circumstances and that's precisely
what has happened. So of course part of the outcomes of this situation is the
debt distressed debt has become the hallmark of our age. Never before has debt
been a systemic aspect of exploitation a source of rental income being sucked
out of the group I'm about to talk about It is now is systemic. Financial
institutions don't want to get rid of debt on the contrary as I quotes a number
of the top people they want as much debt as possible because that is an income
earnings stream for them you don't have to be a genius to work that out.
So we have a system which is generating mechanisms to
increase debt of you and me that's the reality. Now the real story is that the
outcome of this process is a global class fragmentation. The top you have a
Pluto Plutocratic corporations and a plutocracy mainly rentiers disgusting human
beings that stride the globe you know their names and you wish you didn't. Underneath
them is an elite also serving the plutocracy and earning vast incomes in their
palatial lifestyles smug claiming they are meritocratic. Then a salary at a
shrinking number of people with long-term employment security pensions paid
holidays more paid holidays more paid holidays and wore paid holidays. Underneath
that you have the old proletariat for which the welfare states of all our West
European countries were built, it's shrinking everywhere in every part of the
globe. Below them that the precariat is emerged and below the prokaryote in
every city in every town is a lumpen precariat an underclass people dying
prematurely in the streets, a badge of shame on all of us. But the precariat is
not an underclass the precariat is wanted by global capitalism it consists of
people about three dimensions.
First they are being habituated to accept a life of unstable labor, insecure labor this is the least important aspect. Many of us actually wouldn't mind unstable labor moving between jobs. Why would you want to be a barrister this type of barrister for 30 years, you know there is not a virtue in wanting to be in a same bloody job for years after years. But in the circumstances in which people are placed it's terrible but in addition to this unstable labor people in the precariat have to do a lot of work for labor work for the state that doesn't get recognized doesn't get remunerated but they have to do it networking retraining blah blah blah blah blah blah. You can document that except that our official statistics ignore all that type of work. In addition the precariat has no Occupational identity no occupational narrative to give to their lives. I am becoming something, I am something and in retirement I can tell my grandchildren I was something. If you're in the precariat you can't do that.
First they are being habituated to accept a life of unstable labor, insecure labor this is the least important aspect. Many of us actually wouldn't mind unstable labor moving between jobs. Why would you want to be a barrister this type of barrister for 30 years, you know there is not a virtue in wanting to be in a same bloody job for years after years. But in the circumstances in which people are placed it's terrible but in addition to this unstable labor people in the precariat have to do a lot of work for labor work for the state that doesn't get recognized doesn't get remunerated but they have to do it networking retraining blah blah blah blah blah blah. You can document that except that our official statistics ignore all that type of work. In addition the precariat has no Occupational identity no occupational narrative to give to their lives. I am becoming something, I am something and in retirement I can tell my grandchildren I was something. If you're in the precariat you can't do that.
The next aspect is that if you're in the precariat you have
to rely almost entirely on money wages. Money wages that are declining that are
stagnant and increasingly volatile so you cannot even count on them next week or
next month let alone next year. This volatility means the people in the precariat
are always in uncertainty facing a situation of unsustainable debt. I have a
man climbing on a razor blade seem to symbolize it, was written done by a
Polish friend and it got my imagination because that is what you're like if
you're on the precariat. One mistake, one illness, one accident, one ill judgment
and none of us of course make any of those and you plunge. Those circumstances
go with increasing poverty traps where the means-tested benefits system that's
developing means that for millions of our Europeans today going from low
benefits into the low-wage jobs that you can get means you face a marginal tax
rate of eighty percent ninety percent. The head of keller in finland recently
told me guy often over a hundred percent here. The third aspect of the
precariat is actually most important. This is the first mass group in history which
is systematically losing every type of right. Civil rights, cultural rights, economic
rights, social rights, political rights and it is this that defines the precariat
not those other features because ultimately if you're in the precariat you are
a supplicant, a supplicant who has to beg, I hope I haven't offended anyone. But
in doing so you have to ask for favors ask for things from the state, authority
figures or whatever. Now the precariat is a dangerous class today because it
rejects the old political strategies and because it is split almost at war with
itself.
It consists of
Atavist, part of the precariat of people falling out of all working class
communities and families. Who are falling out and they look backwards and they
say we had something better what we don't have it today and in those
circumstances those atavist are looking to populists politicians and political
parties. Today their favorite son is Donald Trump next year will be Marine Lepen.
In France we have it with Brexit, we have it with Orban, and we have it with
your Sweden Democrats, apologies if anybody's in that wonderful movement, we
have it everywhere. This populists threat is why I think I was invited to the
Bilderberg Group, not because of my face because they're getting worried the elite.
But that populist threat is a threat to everybody not just to us. The second
group of the precariat consists of what I call nostalgics. These are the
migrants the ethnic minorities the refugees who don't have a present they don't
have a home and this group is being dispossessed and maltreated and turned into
villains as well as victims, it's crazy but that's what's happening. The third
group is the progressives.
These are people who go to university go to college they were promised a future they were promised that they would have a career, wonderful life, rapidly rising incomes, a pension, all the trappings of a bourgeois r existence and they come out of university knowing they bought a lottery ticket that's worth less and less and costs more and more. I don't need to tell Swedes about student debt because your student debt is almost as high as anywhere else in the world despite having a more commercialized system elsewhere. So we have a situation now where there's a political crisis but the progressive part of the precariat does not yet have a political strategy. But we're getting to a stage where that part of the precariat is growing and growing and the energies out there are fantastic and the creativity and people's responses are growing, new movements are taking shape, new political parties are taking shape, all of these new parties will be partially good, partially bad. Live in Italy and you know what Betty grilled o stands for, go to Spain and you see podemos losing its nerve. Going to Denmark you see will alternate Yvette mmm, go to Poland razem similarly but you can tell there's an energy out there that is moving the debate forward.
These are people who go to university go to college they were promised a future they were promised that they would have a career, wonderful life, rapidly rising incomes, a pension, all the trappings of a bourgeois r existence and they come out of university knowing they bought a lottery ticket that's worth less and less and costs more and more. I don't need to tell Swedes about student debt because your student debt is almost as high as anywhere else in the world despite having a more commercialized system elsewhere. So we have a situation now where there's a political crisis but the progressive part of the precariat does not yet have a political strategy. But we're getting to a stage where that part of the precariat is growing and growing and the energies out there are fantastic and the creativity and people's responses are growing, new movements are taking shape, new political parties are taking shape, all of these new parties will be partially good, partially bad. Live in Italy and you know what Betty grilled o stands for, go to Spain and you see podemos losing its nerve. Going to Denmark you see will alternate Yvette mmm, go to Poland razem similarly but you can tell there's an energy out there that is moving the debate forward.
I think we are in a
stage of revolt where we want to revolt but we're not sure how to revolt we're
in the stage of primitive rebels. We know what we're against but we're not
quite sure what we're for. I think we are going to see a revolt in which we
build and demand a new income distribution system. A system which recognizes
that technology is changing the nature of the labor process. Creating crowd
labor and a globalized system by which there will be many, many, many more jobs
but those jobs will not pay people enough to live in dignity. In those
circumstances I think we're going to see a demand that we redistribute this
rental income. Which is a moral, economically unjustified by any economist and
redistribute it to make sure that the whole of society has access to the rental
income and recovers the Commons which is being denuded sold off to the property
owners and that new income distribution system is going to have capital funds.
I first worked in Sweden with the great Rudolf Meitner back in the 80s and
Rudolf had his wage earner funds it was attacked by the ello and attacked by
the employers, attacked by most people but the essence of what he wanted was a
capital fund to be able to distribute the proceeds of society. We’re seeing the
emergence of movements for sovereign wealth funds which could be the means as
had in Norway and Alaska and so on for pooling part of the rental income not
just from oil and things like that to be able to pay out towards a basic income,
a basic income which would give the core the anchor of a new income distribution
system.
In that process we have
to defeat those reactionaries who say it's unaffordable, it's not unaffordable.
We could replace the subsidies we could make sure we share in the rent we could
build up a better tax system so that the ordinary people are not paying much
higher taxes, its well within the reach of affordability. We must also defeat
those who say that if people have a basic income they will stop working. Well
our pilots have shown that people who have basic income work more not less. They
do more work by caring like working in the community. They do more secondary
activities that build up their security and their humanity. It is not true that
if you or I had just the modest basic income we'd all become lazy Drifters. We’re
human beings we want to improve life not stay still and the ultimate thing is
that a basic income is a matter of social justice. We go back to Thomas Paine
who recognized that nature belongs to all of us. It doesn't belong to the
rentiers by themselves. It isn't something for nothing, we're demanding it's
something for justice and it is something to that would increase our freedom
because without our freedom we will not be productive citizens of a good
society. Security, freedom, social justice, these are the three avenues to
justify a basic income. Listen to panacea it has to be seen as part of a
strategy but it is an important part. I'd like to end on that note and thank
you very much for listening, thank you very much.
Guy Standing explains in an inspiring talk about the new social class: the precariat. So called because of its precarious situation in-and-out of employment. It has now replaced the proletariat as the new, potentially revolutionary, class. It is born out of the global market system, which our increasingly liberal and populist leaders has set up as the most unfree system ever, paradoxically, in the name of freedom.
What characterizes the new class is not only that they have to work for labour, but that they lack any occupational identity. The man or woman who can no longer say I am… could be likened to a person climbing up a razor blade. A new income distribution system is not only necessary, it’s a matter of social justice.
https://2017.theconference.se/
Guy Standing explains in an inspiring talk about the new social class: the precariat. So called because of its precarious situation in-and-out of employment. It has now replaced the proletariat as the new, potentially revolutionary, class. It is born out of the global market system, which our increasingly liberal and populist leaders has set up as the most unfree system ever, paradoxically, in the name of freedom.
What characterizes the new class is not only that they have to work for labour, but that they lack any occupational identity. The man or woman who can no longer say I am… could be likened to a person climbing up a razor blade. A new income distribution system is not only necessary, it’s a matter of social justice.
https://2017.theconference.se/