“The worker gets the short end of the neoliberalist stick.”
By Andy Kusi-Appiah
QE Scholar, 2019/2020
It all began with an idea:
We now live in an uberized world where the corporation is ‘king’ and all other institutions are firmly planted below it. In this system, the ‘market’ has become the central mechanism for doing business. Market-oriented policy reform policies like privatization, austerity, deregulating capital markets, lowering trade barriers and reducing state influence in the economy is the order of the day – it is officially called neoliberalism. Neoliberalism increases income inequality by rewarding those who are already rich while providing fewer nets for poorer population to fall back on. As author Thomas Picketty argues that: “…worsening income inequality is an inevitable outcome of free market capitalism…the rise in inequality reflects markets working precisely as they should.” And since neoliberalist policies limit government regulation and allow business owners and investors to run their businesses in a manner that maximises profit for themselves and their stakeholders, workers are left to fend for themselves. The worker is now the ubermensch (apologies to Nietzsche), and s/he now stands alone in the fight against a system that exploits her/his labour.
In his now famous and oft quoted publication of 1776, “The Wealth of Nations”, our father of economics, Adam Smith set out to define, in concrete terms, the recipe for wealth generation on planet Earth. Our ideas about the economy today is based on Smith’s ideas regarding the importance of free markets, assembly-line production methods, and gross domestic product (GDP). Smith’s formula is based on homo-economicus, i.e., the proverbial ‘rational economic (hu)man’ – that individual who will singlehandedly perform incredible economic ‘hocus pocus’ all on his own and by himself. Adam Smith believed in a self-regulating market that is controlled by an ‘invincible hand’ – a hand you and I are not supposed to see, all that is based on what the market dictates – from above. In this era of COVID-19 pandemic, the invincible hand of the market is still at it, rearranging the way we do business on planet earth – again!
Localism & and the rational economic (hu)man:
Adam Smith’s ideas sound so magical except when we consider the irregularities and all the hidden structures which render it impossible for one homo economicus in a depressed environment (you may call it a marginalized/exploited place) to gain access to valuable resources, when those resources are way out of his reach. When we invoke the power of localism, we realize that all places are not the same. As Neil Clarke (2013) characterizes it: “views are always views from somewhere, and here the situatedness of views and their embeddedness in specific locals cannot be overemphasised in this late capitalist era.’ (Clarke, 2013).
First, of all no market anywhere is self-regulating or ‘natural. And this is the first wrong premise on which our economic philosophy today is hinged. Adam Smith described a self-regulating market that determines what happens on market days. But Adam Smith was wrong about the workings of the market because the market is socially constructed and manipulated by humankind. The market has never been free and the sooner we acknowledge that fact the better!
Second, it is a fact that assembly line production methods work, however, if the surplus value does not get to the workers who toiled for the product(s) to be made; Indeed, it is of no use to continue with a process that demeans, exploits and dehumanizes the people who participate in it.
In recent years (and I am referring to the late 20th century) other economists like John Maynard Keynes and Frederick Hayek have profusely defended Adam Smith and his ideas regarding how nations make their wealth. Even though Keynes and Hayek are staunch believers in Adam Smith and his economic ideas, they differ on whether supply side economics or demand side economics must lead the way. Hayek won that ‘fight’ with his unapologetic view that governments must stay away from a nation’s wealth creation. Indeed, this is the policy motif for all ‘free market’ thinking intellectuals and policy makers today.
Frederick Hayek took Adam Smith’s views about the role of government to another level, making governments subordinate to corporate visions and objectives (Hayek, 1944). Adam Smith believed that: “Government should limit its activities to administering justice, enforcing private property rights, and defending the nation against aggression.” (Smith, 1776). In response to Adam Smith, Hayek formulated what has come to be known as ‘neoliberalism”, the current economic policy instrument that limits the role of government to security issues as well as the building of infrastructure for the benefit of rational economicus. But John Maynard Kaynes was emphatic about the unequivocal important role of government when it comes to economic development of nations (nations are in places/localities/locales). In his book, the “General Theory of Employment, Interest and Money,” John Maynard Keynes (1936) advocated for government spending and monetary policy to mitigate the adverse effects of economic recessions, depressions, and booms.
Unfortunately, Kaynes missed out and Hayek won, rolling out his neoliberal policies which gives all the powers to the corporation and the ‘rational economic man’ who is now on her/his own to create wealth for him/herself and for his/her family – the ubermensch has arrived indeed. It is obvious that Hayek’s idea of the world economy is working like a charm. His concept of zero government interference has emboldened the ubermensch (to borrow Nietzsche’s term again) to assert his superheroism, building businesses without regard for the laws made possible by government forces. Corys Afoko argues that: “Uber’s bulldozer approach to entering new markets sees it sidestep regulators, bully competitors, and mistreat employees. The uber-mind does not believe that existing regulations apply to its business model – it means that in the uber world, there are no rules, we are just playing the game by ear’.
But the spread of the ubermensch can be a troubling phenomenon. In the peri urban neighbourhood of Hull/Quebec, there is a domestic worker whose husband is also an uber driver and these two beautiful souls are living in hell-on-earth because the system is not making their labour/toil/sweat and blood work for them. The urbermensch works 20-hour shifts, 5 times in a week, and his spouse is also out there cleaning homes 6 times a week. The couple do not have any time for themselves let alone their kids. However, they cannot complain because if they do then they will lose their jobs and there will be nowhere to go for redress. Of course, neoliberalism is designed this way in order to make it easy for the corporation to make huge profits at the expense of the worker, who has been made to believe that they have the freedom and the leverage when it comes to their labour.
The worker is on her own:
But uber-ized workers all over the world are at the brink of losing everything as they are unable to organize themselves to demand better working conditions. Uber-ized workers need to think innovatively about how to get rid of this system, this suffocating system. This calls for a different way of seeing things – it means that one needs to look at the system and say to oneself: “this thing called neoliberalism doesn’t work, and therefore something new should replace this neoliberalist thinking.”
The premise under which Adam Smith wrote his Wealth of Nations, and the vim with which Frederick Hayek denounced the role of government in poverty in his best seller “The Road to Serfdom” indicates to me that over 500 years of exploitation and marginalization has not taught humankind very much. We continue to advocate for theories and ideas which have proven to be exploitative and punishing throughout recent history. First it was slavery, then we moved on to feudalism, and then after feudalism, we are now tooting the merits of free market economics, and yet the scare of yesterdays and the suffering of today stare us right in the face and we are still shouting out loud about the benefits of a free market that has sent billions of people to their graves ruling the world. The obvious and inconvenient reality is that this economic system is prone to crashes and the only rescuer is government, as we have seen in recent years when the economy has been in major free fall. The point is that the farther a government gets away from this limited role, the more people are left to their own devices – we become the quintessential ‘uber-self.
A new more collectivist system that takes the people’s labour into account can lead to poverty reduction, as the worker’s labour would be respected and their remuneration will match their work.
Andy Kusi-Appiah is an adjunct professor at Carleton University. His interests are on the impact of social and environmental changes on the health and well-being of vulnerable groups (e.g. 2nd generation Canadians of African descent)