Making the World Safe for Precarity

Photo source Generation Grundeinkommen | CC BY 2.0

Annually, since 1978, the World Bank has published a self-graded report card, with targets for growth, hokum about reducing poverty, and Xswhere to dig in the coming year.  A draft of their rather bizarre 2019 WBR is now available, titled the ‘Changing Nature of Work’.

In the course of time our fear has risen from Taylorism making us all robots, to fear robots would replace us, to fear we’ll both be reduced to a singularity, instead.  On the contrary, it says, despite capitalism’s thrust to de-humanize labor, human-ness, itself has enduring market value.

However, due to the ‘changing nature of work’ (from robotics, not years of neoliberal putsch, apparently) humans should expect less for their work.  The poor face lower wages to counter further mechanization, while skilled-labor may loose the security of long-term employment.

On the bright side, our socioemotional skills are useful in the ‘gig’ economy.  Question is, where we get them.  After all, the report notes, a steady job is more than income, it frames civic engagement, provides us mobility, and some education. Moreover, it’s been key to ensuring services not just for the employed, but through, growth and taxes, for raising the poor.  Whereas, adjunct work fails to nurture our and others ‘human capital’, and coaxes us to demand less from our employers.

Thus, it says, governments will likely need to shoulder public benefits directly, instead of through employment.  BUT, to avoid losing more jobs to ever-cheaper mechanization, they will have to procure the needed taxes and infrastructure ‘without imposing obstacles for firms to grow’.  -They must deregulate, than tax, however that works.

This is not unfamiliar logic- that we should base the global economy on ‘too big to fail’, but unwilling to pay, corporations, or ‘super-firms’ as they’re dotingly called in the report.  Yet they finally concede, it does beg revising the social contract.

The old contract -ostensibly- exchanged power for benefits, with the notion of greater equality over time, because consent would go to whoever returned the most goods.  But it didn’t satisfy the rich once they’d established power, and power offered ways to subvert it.  If it rested on the middle-class (since the rich lacked interest, and the poor are taxed less), it did not also secure them.  Now half are in revolt, need a bailout themselves in order to stay middle, and their record is contentious, anyway.  That leaves the poor as stewards, and since they get little compensation, the old ‘contract’ amounts to them accepting inequality as norm.  Revise, indeed.

The World Bank posits Universal Basic Income, which could reduce inequality, were it so-intentioned.  But unable (or unwilling) to sufficiently tax corporate profits, use of public resources, or even personal wealth, would require wage-earners to supplement their own falling wages.  (The only things they suggest taxing are fossil fuels and tobacco, now that the rich drive hybrids and don’t smoke.)

Still, miraculously, we have a legit socialist program on the table, and no one has screamed ‘class warfare’.  Perhaps we should -just in the other direction.  UBIs are gaining traction on the Right as means to end welfare earmarked for the poor, and share it with the rest of us.  That way companies can avoid paying workers a living wage, perhaps buy robots with the savings.

Of course, schemes to help the poor by redistributing wealth upward are not much of a departure.  However, the report concludes – ‘our investments need to focus on increasing human capital (to prepare us for the gig economy), and -despite its market din- this part isa revision.  Priorly, the World Bank has never held ‘human capital’ as essential to the developing world, and has divested in it, though austerity and privatization in the developed world as well.  This has engender a wave of populism, likened to the 1930s, and that’s why there’s now talk of reform.

Still, while capitalists are unpopular, their capital is the safest it’s ever been.  And while in the 30s they needed more from us to get their factories running, today they need us to work less.  Hence, growth isn’t a concern in this round, only politics.  So (presuming they’re serious) why mix empowerment with basic income?  What’s it all about?

Consider, the World Bank, when it began, foregrounded ‘ending extreme poverty’ among its missions.  But by it’s first WBR in 1978 omits that phrase, restating its mission as the ‘rapid growth’ of poor economies.  According to both the 1978 and (pending) 2019 documents, ‘the problem in developing countries has not been unemployment, but informal employment that yields only small incomes.’  Thus, more than health or human services, reducing poverty demands ‘increasing the poor’s productivity for overall economic growth’.

Hence, it considered modernizing one or a few sectors of an economy (ala Walt Rostow) more fruitful than broad development. And since the money comes from private sources and has to be repaid, public spending should remain low, anyhow. Obviously, this favored large, multi-national firms over local or communal ones, and tied social benefits to employment, not civism.  The ‘Green Revolution’ provides a clear example, as it concentrated land in fewer hands, favored agribusiness, favored exports, and necessitated costly inputs that -more often than not- indebted the peasantry and poor.

Conspicuously, none of it ended, nor even addressed, endemic poverty.  Nonetheless, the 2019 WBR has dropped the subject, and instead its stated mission is to ‘reduce inequality’.  How, when still today, informal employment counts for more than 50% in Latin American, 70% of sub-Saharan and South Asian, and more than 90% of Indian labor?  In contradiction, the report also rails against over-regulation by poor states (how they’re capable, when most of their population is rogue, I don’t know).

Seen broadly, the World Bank appear more intent on anchoring a middle-class, than addressing poverty.  In fact it’s startling, in light of their broader message, how much parts of the 2019 draft sound like marketing. ‘the middle-class, as both tax-payer and benefit-receiver, are key to ensuring better and more coverage of services for the broader population, including the poorest.’ It even warns how ‘a dysfunctional social contract may cause the middle-class to exert less demand on the state for public services’, and cites as evidence how in developing countries the middle-class increasingly opts for private schools.’  (Solid evidence, considering the World Bank has been funding them; See Seif Trust/ Private Schools for the Rural Poor.)

Mind, the World Bank still smacks of dubious Modernization Theories (like Rostow’s), so no surprise this sounds like the Kennedy era.  But mind also, the middle-class is something of a trope; cast as steward of the social contract, even in a country like India, where due to its size it has little bearing on democracy.  However, the ‘middle-class’ is an invention of capitalism, not democracy.  And -depending on capitalism’s needs- it strengthens, but also limits, and sometimes attritions, democracy.  For example, in the US, which dominates World Bank spending, lawmakers use the middle-class as hostages in bargain for lower corporate taxes, and exaggerate the middle-class’ burden to tamper spending on the poor.

In both worlds the ruling-elite has made clear they can profit without it, and often prefer to.  So why, build or preserve it anyway?  For owners and investors, the middle-class’ purpose is not economic, but political.  Why else would capitalism’s bellwether rave about ‘democracy’?  A three-tier system, (in Wallerstein’s terms) breaks the class-struggle into so many local conflicts without reversing the overall, upward flow of capital.  Your middle-class if you think, though not altogether fair, your wellbeing is tied, instead of counter, to the ruling-class, and hence you can find cause not to steal it.  (That’s hard to think if your poor.)  Ergo, ‘human capital’ seems worthwhile, as it amounts to imprinting (though with debatable success) middle-class values on the poor.

But there’s also the drive to do it cheaper. Here, for instance, growing the middle-class was central to the New Deal strategy, figuring the propertied won’t riot, and so forth, and one could argue the same of Civil Rights legislation. But most capitalists found it too effective, and workers were in retreat by the economic slump of the late 1970s. Capitalists blamed the cost of labor and public services in the developed world.  In other words: middle-class wages, pensions, consumer protections, etc., for the slump.  But the coming Reagan Revolution spun it as burden for carrying the poor, and thereby used the middle-class to break the middle-class, fomenting a tax-strike, and loosening supply-side regulations.  Notably, with a nod to the developed world’s economic slump, the ‘78 WBR underscored the need for ‘rapid growth of the developing-world’.  Soon the Washington Consensus-led World Bank called for austerity, and there was a corporate exodus toward newly-secured, tax and human rights shelters in the global South.

‘Neoliberalism’ prescribed quick shocks to right the capital/ democracy hierarchy.  Yet a variety of fast credit and financial products, paradoxically softened real income (and political) loss (here) with mounting debt.  Needless to say, as it was based on prior personal income, credit tilted toward personal luxury, not ‘human capital’.  Then these became the templates for credit possibilities in the developing world.  New financial products including loans to small and mid-sized enterprises (SMEs) helped bypass the local labor markets of both worlds in order to connect suppliers to consumers on the global market.  Today Starbucks gets to tell its customers their ‘fair trade’ invests in human capital, while assuring they piss it away.

For a time, credit allowed us a semblance of middle-class life, even in decline, and thereby allowed Neoliberalism a passive transition.  But since then, cheap credit versus costly debt has nearly replicated the poorer hemisphere’s formal/ informal divisions in the developed world.  (1/3 of us have ‘bad credit’, and 15% never qualified.) Only the American middle-class’ top quintile has increased its wealth -by about 1.5%- and the rest has seen its slip by about 40%.  Now, despite accommodating nearly half of the world’s wealth, America can brag economic stratification on par with the developing world.

It’s not irony that part of their revised mission-statement, to reduce inequality, is coming true.  Marx’ ‘grave diggers’ were the product of capital squeezing us into only two classes to net more profit.  Mind, he undervalued Liberal Democracy’s ability to adjust capitalism. But most critics similarly undervalue capital’s wants.  That said, if Fortune 500 companies cap pay or exploit temp labor, it’s still a lot to say our worlds are meshing when more than half of the world’s poor were never even integrated, and get by on what the UN calls a ‘slow-starvation diet’. And, contradictorily, the report blames over-regulation by poor states, though how they’re capable when most of their population is rogue, I don’t know.  But obviously talk of basic income is not aimed at them.  So perhaps it’s not in the ‘changing nature of our work’, but in our (increasing) mutual alienation that our worlds rhyme.

To put it another way, whether skilled or poor, it’s our precarity that makes us human, and therefore valuable in the post-human working world.  But still, assuming their serious, how does the World Bank reconcile this with UBI?

The draft opens with a tongue-in-cheek nod to Marx’s claim that technology makes the best strike-breaker, and Keynes’ claim that it will one day disemploy us.  Like mechanization, like credit, basic income was conceived to reduce our burden and disentail the poor, until profiteers stood it on its head.  With capitalists at the helm, it would be a regressive tax on welfare.  It would mean the end of the Fight For $15, or for a higher, or any minimum wage. And likely foreclose talk of single-payer, if it’s not a step toward rescinding universal health care in total.  Consider also, most of our Civil Rights legislation made it through court by calling discrimination an attack on commerce.  If a job is no longer a basic necessity, could it not open the door to rollbacks?  Would it not further alienate the poor by foreclosing discussion on indirect forms of income inequality, such as clean air and water, access to transportation, hiring practices, housing discrimination, etcetera, etcetera, etcetera.  Walmart’s 27 hour week would count as fair-dealing in a corporate-friendly world.  Marx was right, if not Keynes, so far.

When the banks ran us aground in the Depression, building the middle-class saved capitalism.  Later a simulated version, based on fast credit, saved capitalism when they tore the real one apart.  UBI could sustain the bereft, simulated version, while the banks unearth their next trove.  And we’ll pretend their welfare also helps the poor.