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Iain Duncan Smith and the race to the bottom

IDSHere we go again. In the topsy turvy Tory world of our beloved Department for Work and Pensions secretary, joblessness is not caused by a lack of jobs but instead “cultures of worklessness“. To his mind, there are millions living it up on the taxpayer dollar – skivers being kept in e-cigs, iPads and Jeremy Kyle appearances. They do not work because they have no incentive to take a job. It’s all bullshit and myth. When a million people queue up every week down the food bank, surely IBS and his chums at the Department would be more concerned about fixing that very real, very pressing, problem.

IBS is a stupid man. Fortunately for him these shortcomings failed to get showcased on Monday thanks to other, more pressing news items – not least a former Tory minister moaning about the lack of a spare room subsidy for MPs. Still, the speech was interesting for what it reveals about the Tories today, as well as the contradictions their inexorable decline are tying them up in. His claims the bedroom tax, tougher sanctions, work capability assessments and the like have responsibility for the “jobs miracle” Nothing to do with cutting up jobs and long-term self-employment depressing the jobless figures (and also wage packets), you understand.

The Tories know their strong suits are benefit-bashing and immigration. They can extend to depths other parties will not reach. In his speech, IBS notes that new arrivals to these shores have taken the lion share of new jobs created while resident Brits like like a Kardashian on the taxpayer dollar. This, for him, is proof enough that social security “creates” unemployment.

What passes for common sense in Conservative circles is that markets are good, and the state is a superbad. The value of a commodity, regardless of what it is, is determined by the market. That is the the millions of different sales and purchases constantly ongoing at any moment. Even front benchers know that a quid for four pints of milk is good, that three quid is steep. Sellers have learned from past transactions the optimum price for maximum sales and maximum profits. Consumers know what they regard as a reasonable price. As this happens spontaneously and reaches a certain equilibrium, sellers and buyers benefit around an optimum level for both. Replace enlightened anarchy with the state’s well-meaning meddling and it all goes screwy. Equilibrium is knocked out of balance, things go wrong, businesses go bust, and the economy takes a dive out a 16th storey window.

If you follow the logic of this argument through to the buying and selling of labour power, to labour markets, you might ask this question. If the majority of jobs being created are taken up by overseas workers, are the bulk of vacancies offered at market rates beneath the price resident Britons are prepared to work for? Anecdotally, yes. This is the more sophisticated reasoning to attacks on social security, even if it so much gloss for their tired punitive populism. Nevertheless, to follow the logic through, social security is distorting the market because dole and other support, like disability, housing, and child benefit, provides workers a means of subsistence outside of employment. Cut this back by tougher criteria and benefit caps, resident workers are forced into a buyer’s market. Restricting access to the labour market for overseas workers ticks so many electoral boxes too. IBS’s hopes are fewer workers coming here means more Brit-born workers working, and a lower benefit bill.

Labour often mention how the Tories propose to solve Britain’s economic woes by a race to the bottom. They deny it, but here it is. IBS has announced it as official policy. Viewed through the prism of Britain’s political economy, since Thatcher their approach to economics has been consistently ‘vertical’. Rather than government take the strategic lead in investment, technological development, skills, their preference – beneath high falutin neoliberal nah-nah – is make the workers pay to restore profitability. It meant smashing the labour movement, gutting workplace legislation, letting bullying management run riot, and rooting out working class culture. Imagine a business that increases its profitability by paring back on contributions to its staff pension pot, forcing employees to work longer for less, and summarily dismissing anyone who complains. This is what the Tories have done and want to continue to do to Britain in the name of market fundamentalism. Invisible hand or mailed fist?

It won’t work, either. It won’t get the economy moving. Racing to the bottom won’t put money in workers’ pockets. But the Tories do not care. It marginally strengthens capital and their class further, they continue to coin it, though in the medium/long-term it will do nothing to arrest British capital’s slow decline.

3 Comments

  1. Robert says:

    I think we are so use to having Blair and Reeves and all the rest of the labour party attack on the poorest, the people who are on welfare or people who are sick disabled or unemployed these days IDS just seems to be another of those who think we are at the bottom through laziness .

    I do not know Reeves is not much better then IDS she goes off with a hammer and then has to do so many U turns to try and get voters back, Miliband is in the pocket of the Progress lot, IDS seems little different to be honest.

  2. We are known for having a stable, welfare state. There’s a reason why we have welfare, why we have jobseekers, the NHS and council housing. Not everyone has a way out because they don’t get the opportunity in a capitalist state for a way out. They have no other choice. Just need a bit more empathy and less greed.

    1. Robert says:

      That is true, but even Miliband stays it’s education that will get people out of the poverty trap, fine but we will still need the road cleaners the bin emptied and the road repaired we will still need a state and state employment teachers nurses carers teach98ing assistant and CSO, so why not pay those people a decent wage, not a min or a living wage but a decent wage.

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