Guy Standing on an economy that works for everyone

Standing: The ideology of neoliberalism laid the groundwork for what has happened. Its defining features have been “liberalization,” by which is meant opening up national economies to global competition; individualization, which has meant re-regulation to curb all forms of collective institutions—particularly trade unions and other mechanisms of social solidarity; commodification, which means making everything possible subject to market forces (notably through the privatization of public services); and “fiscal retrenchment,” which has meant lowering taxes on high incomes and capital.

Neoliberalism advances a system built on one word above all: competitiveness. This creates a very antagonistic form of economy and society, giving rise to a very small number of “winners,” while virtually everyone else becomes “losers.” Unfortunately, governments, which once cushioned people from the worst of neoliberalism, have been captured by this ideology.

When lax financial regulation, easy credit, and other factors resulted in the economic collapse of 2007-8, media focused on the corruption and greed of Wall Street and the financial markets, but not on the structural features of the global market system and the related crises that were fostered by the neoliberalist strategy. When the financial system collapsed, governments could have taken the opportunity to redistribute income—bailing out “Main Street” instead of Wall Street. Instead they rushed to “rescue the banks,” the greatest give-away to the rich the world has ever seen. Of course the give-away came at the expense of taxpayers, generating more government debt.

This strategy simultaneously weakened workers. Although income inequality had already become greater than at any time since the 1920s, governments responded to the financial crisis by giving more subsidies to the affluent, while cutting benefits and services to others. So-called “austerity” measures are for those who already have little. All of this reinforced what I call an existential crisis. The neoliberal model is a crude version of Darwinian competition, preaching individualism, competition, and a false meritocracy. What neoliberals call “survival of the fittest,” in reality reflects only that the rules have been changed to benefit those who already had the advantage.

Neoliberalism has also worsened our environmental crisis. Pursuit of economic growth has resulted in nearly complete disregard for the externalities that are exacerbating ecological collapse. In the U.S., the Environmental Protection Agency, national parks, public lands, wildlife protections are all under attack, even though the environment, wildlife, and ecosystems in general are in greater need of protection than ever. Proposals to curb pollution, or to make polluters pay for their degradation of the public commons, are thwarted by commercial interests, who typically cite job creation as the higher priority.

Goodman: Before we talk more about that, you mention students graduating from college with enormous debt and few job prospects as belonging to the precariat, but many other population groups are being forced into the precariat also. Please tell us about them.

Standing: Many groups have an above-average probability of being in the precariat, including women, the young, migrants, the elderly, the disabled, the formerly incarcerated, etc. Still, it doesn’t mean we can define the precariat by these demographic groups.

The growing precariat consists basically of three groups: people from working class families and communities in places like Detroit, or northern England, or Lille, France, whose jobs have evaporated. The jobs have been sent overseas, or assumed by robots or other technology, or broken into part-time jobs that don’t qualify for benefits. This segment of the precariat isn’t highly educated; technology and neoliberalism have overtaken them. Their insecurities are often extreme and they tend to listen to neopopulist, neofascist politicians with a certain charisma, who offer them simplistic solutions—in particular blaming minorities and migrants and various others for “taking” their jobs, being “welfare cheats,” and so on—the sort of hate-filled language we know all too much about these days. Right-wing politicians are playing on the fears and insecurities of this group by demonizing other groups, often migrants.

Migrants are a second—and huge—portion of the precariat. Worldwide, we have more migration taking place today than at any time in history. It’s also a different type of migration than we’ve seen in the past. The last upsurge in migration, which was before WWI, was mainly “settlement migration” from the Old World to the New World. People migrated to settle and start a new life. Today much more of the migration is labor circulation. People are moving in all directions seeking work, not necessarily expecting to stay where they’re working, but to return home. Contrary to what some politicians would have you believe, migration is not just from poor countries to rich countries; it’s also between rich countries, and it’s from rich countries to poorer countries. For example, look at all the retirees who migrate to a country where the cost of living is lower so they can stretch their retirement funds. What’s taking place is a very fluid international flow of people.

The evidence is very strong that this form of migration has benefits for local economies. Most migrants tend to be energetic, young, entrepreneurial, eager to contribute, and don’t actually place high demands on health services, pension systems, and so on. Rather than taking jobs, migrants are actually contributing to the economic systems of the countries to which they come. Moreover, most countries have a lot of people migrating out of them at the same time as they have a lot of people migrating into them. It’s a two-way flow.

Goodman: And in the United States, migrants would help our supposed Social Security shortfall, if we would legalize them.

Standing: Exactly. That’s a well-known feature of the American system: if you want to cap high earners from paying more into Social Security, you need young immigrants to pay in. Of course, every country has problems absorbing migration beyond a certain point. Clearly, you could have a situation where the numbers became very difficult to absorb in the short term. However, the central point is that migrants in general have a high probability of entering the precariat. And once in the precariat, they have a low probability of getting out.

Another aspect of migration is that much of it is internal—within countries. The most glaring example is in China, where the government created urban enterprise zones in cities like Shanghai and attracted 200 million or more rural Chinese to work for huge multinationals like Foxconn, which is a contract manufacturer for companies like Apple, IBM, and Hewlett-Packard. But the government wouldn’t give these workers hukou, or residency permits, because that would give them legal access to housing, healthcare, schooling for their children, and other rights of residents. The government basically provided a very low-cost, precariatized workforce to the big multinationals siting factories there.

Without the right to reside in the cities where they worked, these workers were exposed to extreme insecurity and had to accept very, very low paying jobs in onerous working conditions. After the suicide attempts at Foxconn, wages were raised somewhat, but workers’ net gain was zero because the company cut back meals to pay for them.

The larger point is that migration is now a central tenet of the global labor market. Companies can move their production anywhere in the world—to places where the pay scale may be 1/50th of what it is in a developed country. So the numbers of people moving around seeking employment today are far greater than at any time in history. In a lot of places these people aren’t welcomed. They’re exploited; they often have no rights. Their neighbors don’t want them in the country, but then also demonize them because they haven’t “integrated.”

Migrants have typically stayed out of politics, either because they don’t have the right to vote, or they aren’t sure which way to vote. Gradually, however, they’re becoming politicized. I think that, as migrants recognize their numbers, and also recognize that their situation has largely been created by those who profit from it, they’re going to play a major role in a new progressive politics.

That leads to a third group, which consists of educated people who aspired to jobs among the salariat or the proficians, but there are just too many of them for the openings the neoliberal economy is creating. Employers want flexibility; they don’t want the commitment of a salaried, fulltime professional, so they’re outsourcing jobs; hiring independent contractors; replacing older, more skilled workers, with younger, less-costly ones. They’re shipping tech jobs overseas to India. They’re breaking up fulltime positions into part-time ones that pay no benefits and have far less advancement potential.

This third precariat group consists of mainly young, educated adults who went to college expecting to qualify for a career and finding out instead that they only bought a lottery ticket. The career they trained for isn’t available, so they’re left with nothing but debt. This group is not going to vote for the Trumps of the world; they’re looking for a new progressive politics.

Whether they use the term “precariat” or not, millions of people are recognizing themselves as having a lot in common with other, disparate groups that the world economy has no desirable place for, and they are reengaging in politics. In their reengagement they are turning to some surprising characters. Everybody was extremely surprised in Britain recently when precariat voters jumped for Jeremy Corbin. In the U.S., everyone was surprised with Bernie Sanders. Neither is really a spokesperson for the precariat, but they’re mold-breakers. They’re basically clearing the decks, saying, “Establishment parties and politicians represent old interests and old models of society and we want rid of you.” Of course the powers that be don’t understand it.

I’ve spoken to precariat groups in thirty-five countries over the last four or five years and everywhere—Italy, Spain, Poland, Russia, Japan, Australia—people express the same sentiments. For a while—around the time of the Occupy movements and the Arab Spring—there was a rejection of politics because people felt that the choices were all the same. One was as bad as the other. But now the realization is growing that we have to do something besides protest. We have to channel our anger into a new progressive politics. I think we are at a very exciting stage when yes, the sufferings and harm being done within the precariat are enormous and infuriating and dispiriting. But at the same time there is a new energy being expressed, which could usher in a new progressive era. There are reasons to be optimistic.

Goodman: Before we talk about an optimistic future, I’d like to talk about another growing segment of the precariat, the criminalized and formerly incarcerated. The U.S. has one of the largest prison populations in the world and people don’t always think of that as a function of economic and government policy, but you do.

Standing: In the last thirty years governments have become much more prone to criminalize activities that used to be non-criminal—which has hit low-income people the hardest. In the U.S. you have millions of people—primarily people of color—criminalized and incarcerated for possession of small quantities of drugs, running numbers, selling bootlegged cigarettes, being delinquent on fine-payments, failing to pay the fees charged by the criminal justice system, overstaying their visas or being in the country illegally, and so on. In the U.S. particularly, the judicial system sends people to prison rather than assigning forms of non-custodial punishment. In addition to an extremely high cost to society, criminalization leaves long-lasting scars. Electronic records mean that potential employers can easily find out if somebody has a criminal past, either in the country or elsewhere, which makes it very difficult for them to get a legal, decent-paying job. Criminalization often robs people of the right to vote—sometimes for life—a form of double jeopardy. Of course, it also affects closely contested elections because a few votes can make a big difference.

Criminalizing people has accompanied the trend to make our welfare systems much meaner—which keeps more people in poverty and insecurity where they’re more likely to commit petty crimes like shoplifting in order to survive, pay for their baby, or whatever it might be. Basically, low wages and insecurity lead not only to poverty but to criminalization, which leads to more people being stuck in the precariat.

Goodman: You point out that the precariat is not only a creation of the private sector; the public sector is being turned into a precariat zone too. Please elaborate.

Standing: Neoliberal ideology believes in reducing government. Margaret Thatcher demonstrated perfectly how this was done: First, cut funding for public services, making it harder for them to operate. Report on the resulting public dissatisfaction, while making the case that private services are better. Then privatize public services “in response” to people’s needs—presumably in the interests of efficiency and better service delivery. The “austerity” response to the 2008 financial crisis redoubled the pressure to cut public services. As a result, public administrators now boast about their ability to do more with less—by turning larger and larger parts of the public sector into zones of insecure labor. Instead of workers enjoying tenured academic, public administration, hospital, or other government service positions, they are increasingly forced to accept temporary, fixed-term contracts. Governments also outsource more and more functions, such as cleaning services, building maintenance, fleet repairs, transport, and catering. They privatize these and convert them to contract labor, where people are much more insecure in terms of continued employment, wages, and benefits. So the public sector has definitely contributed to the growth of the precariat almost as much as the private. Again, the culprit is neoliberal economics.

Goodman: If the economy isn’t working for such a large portion of humanity, and it certainly isn’t working for the environment, why do you say that globalization isn’t going to change? Can’t we change it?



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  1. United States: Standing, in Moon magazine interview, says nearly half of world population mislead by right-wing politicians | Basic Income News - August 26, 2017

    […] Standing, co-founder of Bien and a University of London professor, in an interview for the Moon magazine says people with a precarious future are preyed upon by right-wing […]

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