Month: February 2017

Labour-Centred Development in Latin America: Two cases of alternative development

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The_hand_that_will_rule_the_worldIn todays post, Adam Fishwick offers an overview of the main arguments and highlight some of the key empirical findings of research published recently in Geoforum. Co-authored with Ben Selwyn, the article discusses alternative models of development that go beyond the neoliberal and statist paradigms that dominate debate, and is based on two cases– the cordones industriales in 1970s Chile and empresas recuperadas in Argentina today – of “labour-centred development”.

The rise of the ‘Pink Tide’ of progressive left and left-of-centre governments in Latin America briefly offered us a set of seemingly new alternative models – from buen vivir in Ecuador to ‘Socialism in the 21st Century’ in Venezuela to ‘growth with equity’ in Argentina.

Yet with the stagnation and apparent collapse of these models, critics on the Left have begun to highlight the many underlying contradictions that the Pink Tide failed to address.

Whilst the ‘neo-developmentalist’ strategies adopted throughout the region have seen a growing level of state intervention favouring increased growth in domestic industrial sectors and some social welfare improvements, they have embedded deepening relations of exploitation, blocked and co-opted social movements that brought these governments to power, and sustained a socio-economic order over-written by neoliberal macroeconomics.

Put simply, the statist strategies of the last decade have – despite limited gains in distribution, welfare, and industrial restructuring – made little progress in overcoming many of the regressive features of the neoliberal development strategies of the 1980s and 1990s.

From this starting point, then, we offer a critique of Elite Development Theory (EDT) as it informs the neoliberal and statist political economy paradigms in Latin America (see Selwyn 2015, 2016 for a wider critique of EDT in development studies). Second, we present two cases of what we term labour-centred development (LCD) in its nascent forms.

Regarding the first, elite development theory can be identified with two dominant trends that run parallel to and have to some extent informed the last three decades of Latin American development.

The emergence of the Washington Consensus formalised in the 1980s and 1990s much of the emerging practice of development across Latin America, bringing with it a firm commitment to reducing states’ welfare spending and the removal of ‘labour market inflexibilities’. The result was a sharp reduction in redistribution towards the labouring classes and the direct and indirect repression of their capabilities to mobilise collectively across Latin America.

The response of Statist Political Economists to this position offered a stark challenge to the Washington Consensus that, for many, offered a real alternative model for development.

But the progressive claims of these statist approaches are problematic. Alice Amsden (1990), for example, describes how South Korean state-led development relied on ‘the world’s longest working week’ and ‘cheap labour’, also noting how ‘labour repression is the basis of late industrialization everywhere’. And, in his comparison of Brazil, South Korea, India, and Nigeria, Atul Kohli (2004) notes the significance of strict workplace discipline.

Recent state-led development in Latin America can also be seen in this light. Although led by left and left-of-centre governments, it often remains reliant on the restriction of workers’ mobilisation in the service of a state-led national development strategy.

Alternatively, then, we propose a view on development that directly privileges the agency of labour in pursuing and constructing what we term labour-centred development:

‘the core concerns for LCD analysis are not those of capital (how to secure accumulation), but those of labouring classes. These include workers’ ability to reproduce their wage labour outside work (i.e. to earn enough wages and have enough time to secure the basic necessities of life and to engage in culturally-enhancing activities such as socialising and education), extending to more free time (shorter working days) and more decision-making ability within the workplace (to reduce the burden of work)’ (Fishwick & Selwyn 2016)

We distinguish our perspective from the two strands of EDT inasmuch as we perceive the interests of the labouring classes as the starting point for alternative strategies of development. We highlight the often invisible and obfuscated dynamics of labour’s collective action and its role in producing unique developmental dynamics from within what Michael Lebowitz (1992, 2001) has termed ‘the political economy of the working class’.

Second, the two cases of LCD we discuss are drawn from distinct contexts – the revolutionary moment of the Allende government from 1970 to 1973 in Chile and the deep crisis and recovery of the Argentinian economy from 2001 to present – but both are demonstrative of the capability of labouring classes to construct real alternatives from below.

In assessing these cases, we highlight four factors: (1) growth and productivity (2) employment data (3) workplace organisation (4) production priorities. In each of these we analyse the contributions made by workers themselves, as well as the limitations that derive not from the internal failings of these cases of LCD, but from capital mobilising against them.

The cordones industriales in Chile were a powerful example of LCD that emerged under the socialist government of Salvador Allende in the early 1970s. Comprised of a small occupied factories and large plants incorporated into the state-led nationalisation programme – the ‘Area of Social Property’ – they saw workers organise against a growing employer boycott to establish new forms of control over process of production and distribution.

Mobilising under the Communist Party-inspired ‘battle for production’ slogan, they revitalised output and productivity levels in a range of leading industrial sectors, transforming work, the workplace, and the priorities of production in the process.

Drawing on examples from the textile sector with data gathered from a range of trade union publications and political pamphlets from the time, we show how large and small plants saw increased levels of output under workers’ control, raised employment and wage levels, and even the establishment of facilities aimed to support workers and their families.

Strict Taylorist and paternalist management hierarchies were rapidly replaced by participatory forms of organisation, with workplace assemblies and councils building on the participation programmes promoted by Allende to produce genuine worker participation and control over decisions ranging from output to supply and credit to production priorities. Factories even transformed their produce in direct service of the poor communities and neighbourhoods from which their workers came and which surrounded these workplaces.

Nevertheless, despite these embryonic forms of LCD, pressures both from the socialist government of Allende and pressures from outside restricted the expansion of these strategies. And, on 11 September 1973, they were directly targeted as nascent ‘Soviets’ by the military as it violently reversed many of the gains that had been achieved in these years.

The empresas recuperadas in Argentina are a crucial contemporary example of LCD, in which several hundred workplaces have been transformed into legal and semi-legal cooperatives by workers pushed to the brink of unemployment. Often established following a long period of struggle with first the original owner and later the state, these enterprises first emerged en masse in the aftermath of the 2001 financial crisis in the country.

Typically involving workers with little or no political experience or affiliation, the transformations to work and the workplace have been profound – from the introduction of equitable pay to cooperative networks of financing and supply to the transformation of work.

Drawing on a range of sources and data gathered by the Open Faculty Programme in Buenos Aires, we show how, in recent years, there have been some significant improvements in productivity and output under workers’ control, how wages and employment have improved in most these workplaces, and how, most importantly, workplaces have been transformed.

There has been an increase in democratisation on the factory floor, whilst the introduction of job rotation and new divisions between labour processes and the organisation of the working day have ‘humanised’ these workplaces. Links established between the factories and the neighbourhoods, moreover, have had a tangible impact on the lives of the labouring classes across these communities, as well as contributing to the defence of factory occupations.

Nevertheless, despite these important gains, pressures on the initial formation of the empresas recuperadas, as well as the ongoing influence of their relationship with the wider capitalist marketplace points to the limitations of these examples of LCD. There have been attempts to overcome these through new networks and institutions, but they remain in their early stages.

To conclude, then, in our paper we show that the paradigmatic perspectives on development fail to capture these important dynamics that can – and, as we show, often do – provide fertile ground for genuine alternative development strategies favouring the labouring classes.

To identify these processes, and to correctly situate and overcome their limitations, we argue for the need to look beneath both the regressive logics of neoliberal development and the ostensibly progressive strategies pursued by states. By identifying the independent practices of workers in seeking to shape their own world around them, we can begin to identify how a real ‘political economy of the working class’ can emerge in theory and in practice.

Adam Fishwick is a Senior Lecturer in Urban Studies and Public Policy in the Department of Politics and Public Policy and a core member of CURA at De Montfort University.

This post was originally published on the ‘Progress in Political Economy’ Blog and has been re-published here with their permission.

Austerity and welfare cuts

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6449741467_dc1a81af70_bIn today’s post, Ines Newman discusses the implications of current and future welfare reforms, including the cuts planned for April. She argues that this will lead to increasing inequality and poverty, rising household debt levels with higher levels of rent and council tax arrears and that we are witnessing increased levels of maladministration by the Department of Work and Pensions.

In the first budget of this Parliament, George Osborne put in place £12b welfare cuts which came on top of the cuts in the previous Parliament. But with his departure following the Brexit vote and the worrying policies of Donald Trump, the impact of these cuts on families in the UK has slipped out of the limelight. They are however substantial and the Resolution Foundation has recently argued that they will result in ‘falling living standards for almost the entire bottom half of the working-age income distribution between this year and 2020-21’.

In April 2016, working age benefits, tax credits and the Local Housing Allowance were all frozen for four years. For example, Job Seekers Allowance (JSA) for a single unemployed person over 25 stood at £73.10. In 2009, it was already being argued that JSA was not sufficient for the essentials of life, such as food, bills and travel, and was inconsistent with a minimum standard. The real value had not changed for at least 30 years while per capita household consumption had doubled over this period. In relative terms the value had therefore halved. Now, as post Brexit inflation gathers pace, the real value of working age benefits will fall sharply, generating acute poverty.

Those with disabilities have traditionally been slightly protected through the higher Employment and Support Allowance (ESA) and through Disability Living Allowance (DLA). However in 2015, the DWP started to contact anyone getting DLA and asking them to make a new claim for a Personal Independence Payment (PIP). The Government estimates https://fullfact.org/economy/personal-independence-payment-who-are-winners-and-losers/    that out of 1.75 million DLA reassessments, 510,000 will have a reduced payment and 450,000 will have their payments removed altogether.

All those with disabilities have to go through an assessment process which is as inadequate as the Work Capability Assessment for ESA. The PIP assessment is run by ATOS who finally bowed out of the contract on the Work Capability Assessment after receiving massive bad publicity. Meanwhile as Ken Loach’s recent film ‘I, Daniel Blake’ made clear, the new contractors, Maximus, for the work capability assessment, are no better than ATOS. Finally, from April 2017, new claimants who have a recognised disability on the work related assessment but are deemed to be capable for work will see the removal of work related activity components for ESA. It will mean those receiving the benefit will see their weekly payments cut from £103 to £73 a week. Far from protecting ‘vulnerable’ households the Government is pushing more disabled households into poverty. Half of those people living in poverty are now either themselves disabled or are living with a disabled person in their household, when the higher costs they face are taken into account.

Because successive governments have failed to deal with the housing crisis, rising rents combined with the bedroom tax, council tax benefit reductions, the cap on the local housing allowance and the total benefit cap are forcing low income households into poverty and debt. Sometimes they are forced to move into poorer areas, disrupting their children’s schooling and losing the support of families and friends. In December, the New Policy Institute https://www.jrf.org.uk/report/monitoring-poverty-and-social-exclusion-2016   reported that the number of private renters in poverty has doubled over the last decade and homelessness and temporary housing has increased five years in a row. In the London Borough of Camden where I live, we know that the lower benefit cap of £23,000 is affecting 1,110 children in 383 families. While some of these are being protected by discretionary housing payments (DHP) it is unclear for how long they can be supported and we are expecting a cut in DHP in April. A household caring for a disabled child over 18 who are not able to work because of their caring responsibilities will almost inevitably be hit by the benefit cap, as will a lone parent with several small children.

Meanwhile Universal Credit (UC) is gradually being rolled out. Using the language of giving more responsibility to the claimant, UC includes housing benefit (rather than this benefit being paid direct to the landlord) and is paid monthly in arrears. The result has been a massive increase in council rent arrears (85% of those on UC in Camden), partly as a result of delays and miscalculations in the housing element and by an understaffed DWP. From 11 April 2016, the rules on UC work allowances were changed to make them far less generous in a number of cases. The work allowance is the amount an individual or family can earn before their maximum UC award starts to be reduced. The reductions to the UC work allowances announced in the Summer Budget will ultimately have a similar impact to the changes to tax credits which were fought off by various lobby groups at the time of Osborne’s budget. Other changes in UC are significant too. From April 2017, young people aged between 18 and 21 claiming universal credit will not be eligible for housing benefit and will be expected to take part in a Youth Obligation for the first six months and then apply for an apprenticeship or trainee-ship, gain work-based skills or go on mandatory work placement. This is coming in despite the Government having to scrap the previous Mandatory Work Activity programme in 2015 when many charities boycotted it and research showed it was ineffective and merely punitive. Households will not receive Universal Credit for any children born after April 2017, when they already have two children. A lone parent with no child under 3 will be expected to look for work to claim any benefit after April this year. How such parents can then provide the type of parental support that numerous studies have shown is invaluable seems not to be a consideration for this so-called ‘family orientated’ government.

The Resolution Foundation concludes:  ‘the result is that the parliament from 2015-16 to 2020-21 is on course to be the worst on record for income growth in the bottom half of the working age income distribution. At the same time, we project the biggest rise in inequality since the 1980s, with inequality after housing costs reaching record highs by 2020-21.  This will be the legacy of austerity.

Ines Newman is a visiting senior research fellow at CURA, a trustee of Paddington Development Trust and does social policy research on a voluntary basis for Citizens Advice Camden.

Democracy vs Sovereignty? Reflections on the Brexit Debate

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27323547984_9ef3a4456a_bIn today’s post Prof. Jonathan Davies argues that the left has no option but to support the triggering of article 50, because the arguments employed against doing so are not credible and cannot presently command any sort of democratic mandate.  The left should instead harness the ‘boomerang effect’ of anti-Trump sentiment in order to build an alternative politics fighting for substantive equality, defending the free movement of labour and opposing the Thatcherite economics of the “single market”.

As Theresa May’s March deadline for triggering Article 50 approaches (this is the EU clause setting Brexit in train), “Remain” forces have been arguing that MPs should vote against it.  They effectively want Parliament to stop the Brexit bandwagon in its tracks. And, when Article 50 is triggered they believe the UK must remain part of the EU “single market”.  I voted “Remain” in the June 2016 referendum. I did so not because I like the EU but because I feared the racist backlash, which followed.  Had I voted “Leave”, I would have had to take my share of the political responsibility for that. Moreover, I share the fears and anxieties among pro-EU friends and colleagues about the rise of racism and nationalism in the UK, the US and parts of Europe. Undoubtedly, these are frightening times. Nevertheless, I believe that Remain perspectives are reckless, if not downright dangerous.  And there are far better political options.

A colleague recently made a memorable comment that attacking institutions on entirely legitimate grounds may have dire consequences, if the assailants cannot control what happens next. Remainers used arguments like this before the Referendum. The one about letting the racist genie out of the bottle convinced me.  Yet those now arguing that Article 50 must not be triggered seem to have forgotten their own rules.

After the Referendum, the pro-EU camp disinterred the constitutional principle of Parliamentary Sovereignty.  This principle holds that no authority can countermand the will of Parliament. The Supreme Court judgment on 24th January 2017 upheld that principle in forcing the government, against its will, to hold a House of Commons vote on whether it should be permitted to trigger Article 50.  MPs in the main English parties are divided, but it appears that with Labour support the government will win the final trigger vote on 8th February.  Jeremy Corbyn’s “three line whip” ordering his MPs to vote for Article 50 has led to a renewed chorus of condemnation for the beleaguered leader, not least from the left remain camp, which wants Labour to follow the principle of Parliamentary Sovereignty and strike down the referendum to save Britain from self-inflicted economic and political catastrophe.  This position is justified by the assertion of expert privilege in combination with consequentialist logics. The rationale is that even if striking down the referendum is undemocratic (a moot point) it is justified because it will prevent disaster.  So obsessed with stopping Brexit are some left-leaning academics that they have abandoned Labour and joined the Liberal Democrats.

I believe there is a lot wrong with this thinking.  As a socialist, I have never been much of an enthusiast for either Parliamentary Sovereignty, or referenda – I would prefer to extend and deepen participatory forms of democracy in all walks of life.  The politics of the referendum campaign were dreadful.  The Remain side ran a dismally uninspiring pro-business campaign.  The Leave campaigns were much worse, replete with lies about NHS funding and naked racism. Yet, both Labour and the Tories committed to abide by the result long before the Referendum was held.  And, at present, there seems to be very little public appetite for reversing it. If anything, the contrary is true. Arguably, then, if Parliament refused to trigger Article 50, it would be striking down the referendum in the face not only of the result itself but widespread and enduring public opposition. In these circumstances, the justification for stopping Brexit would seemingly boil down to the claim that “we know better than you”.

There is nothing wrong with expertise.  We need it very badly if we are to flourish as a species.  The racist right has cynically exploited growing public skepticism about expertise, but skepticism itself is far from unreasonable.  For example, the field of economics not only failed to predict the 2008 crisis it refused to acknowledge even the possibility that such an event might happen. It colluded in making the crisis by aligning itself, conspicuously and unapologetically, with neoliberal ideology. Economics departments in leading universities have long since been cleansed of anti-neoliberal (heterodox) economists. Where real scientific expertise depends on openness, plurality, modesty and healthy skepticism, economics relied on institutional power, arrogance, dogma and intellectual closure.  Of course, not all economists are guilty of this kind of behavior – far from it.  Nevertheless, it is untenable to think that invoking economic expertise will work as a justification for striking down the referendum.

At the same time, the UK is going through a growing crisis of democratic representation, a condition Colin Crouch calls “post-democracy”.  The institutions of the state, repeatedly exposed as seedy and corrupt, are held in diminishing public esteem. If, in some ideal world, it could be argued that the British State works for the rights and freedoms of all, the majority might just be convinced to put our collective sovereignty in the hands of an institution like Parliament. But today, our decaying institutions could not possibly carry the people without naked political repression. Presently, there is no justification for demanding that MPs overturn Brexit. On the contrary: it would not be democratic and alternative appeals to sovereignty, backed by claims to expert knowledge, are not politically credible.

For these reasons, it is now the turn of Remain supporters to heed warnings about unleashing forces they cannot possibly control.  Striking down the referendum would be politically catastrophic, not least in triggering a further racist backlash. Three line whip or not, Jeremy Corbyn’s position on Article 50 is correct in my opinion. And, it provides some basis for opposing a reactionary Brexit thereafter.

The other Remain demand is that once Article 50 is triggered, the UK should try to stay within the EU “single market”.  This is generally what people mean by a “Soft Brexit”. The PM has ruled this out, because it would mean having to accept “free movement” of EU citizens.  Mrs May therefore proposes a nationalist and anti-immigration “Hard Brexit”.  I deplore that and seek to defend the principles of “free movement” for people and the right of refugees to sanctuary in the UK.  Is the “single market” really the way to do that?  Some time before the EU was founded, the right wing Mont Pèlerin Society envisioned a single market. These founding fathers of neoliberalism later influenced Margaret Thatcher, who celebrated Britain’s accession to the single market:

“It’s your job, the job of business, to gear yourselves up to take the opportunities which a single market of nearly 320 million people will offer. Just think for a moment what a prospect that is. A single market without barriers—visible or invisible—giving you direct and unhindered access to the purchasing power of over 300 million of the world’s wealthiest and most prosperous people …

As Mrs Thatcher recognized, the EU single market promotes free market capitalism, competition and corporate profitability. No-one on the left thought it was a good idea in 1988. It certainly isn’t now.  The single market and other pro-market institutions are antithetical to equality, solidarity and democracy. Even the IMF now concedes that “instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansion”.  Markets – single or otherwise – polarize. And they crash. To regain our credibility, the left must surely fight for more worthwhile and tangible goals. If so, the real challenge is to both defend free movement and fight for an entirely different economics rooted in socioeconomic equality and solidarity.

The inspirational global response to Donald Trump’s racist edicts shows that this combination of demands is entirely pragmatic. Protests against Trump’s impending visit to the UK could be among the biggest ever held in this country. The Stand up to Racism demonstration on 18th March will also be very big.  Defending migrants and refugees will be among the key demands.  Most importantly, it is possible even now to see how the wave of giant protests across the UK and US can incubate an entirely different politics of hope and solidarity. The boomerang effect of anti-Trump protests in the UK is already plain to see, as Mrs May’s humiliating encounter at the White House exposes the absurdity of racist claims about reclaiming UK sovereignty.  Barricading ourselves behind discredited political and economic institutions is wrong and it will not work.

Jonathan Davies is Professor of Critical Policy Studies and Director of the Centre for Urban Research on Austerity at De Montfort University.