The Labour Party and the Future of Work II: Policy, Productivity and Technology

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Frederick Harry Pitts: There’s obviously been a lot of rumination on Labour’s malaise in recent days, following the elections last week. A familiar refrain is that Labour’s losses are not just the residue of Corbyn’s unpopularity, but a longer-standing process that started unravelling under New Labour, was exacerbated initially by Miliband, and bottomed out under the last leadership. A news report the day after Hartlepool quoted an anonymous Labour MP making the claim that, having shaken off Corbynism, it is now necessary for the party to take the next step and break with Milibandism too.

After developing critiques of the New Labour project in the Brown years, you joined Ed Miliband’s Shadow Cabinet as Policy Coordinator, and there were a lot of debates then around distribution and “predistribution”. The latter seems like a lost possibility latent in that moment that kind of addressed the issues you raise in the book about the need to stage the reconciliation of class conflicts at the level of the workplace, prior to the sharing of gains from the market by means of the state.

In The Dignity of Labour, you write that Milibandism and its ‘cost of living’ approach fell into the trap of following New Labour by proposing cash transfers of various kinds – on rent, wages, student fees – an ‘economic reductionism’ that elided questions of democracy and power. What alternative was posed by Miliband’s brief flirtation with ‘predistribution’? Is there anything worth saving there? Was it suggestive of an economic rebalancing fought out in workplaces by unions and other forms of industrial democracy and determination?

Jon Cruddas: Brown, when he came into power, retained the approach he adopted at the Treasury, in terms of the operation of both the labour market and the wider democratic character of the economy. So we did very little. He was obviously blindsided by a global financial crisis around which he did an awful lot. But again, that left unaltered some of the fundamental design questions.

What I found very interesting with Ed Miliband was the early attempt to tie the character of capitalism to the production of a public philosophy that moved on from New Labor. That was really fertile ground, where he was trying to debate notions of predatory behavior, of predistribution that touched on some fundamental design questions in the nature of modern capitalism. That is where I thought we were going to go, and thereby create a route into rethinking the purpose of politics.

Now, this is my fault, because the Policy Review ended up as a truncated politics built around cost of living, basically around remedial cash transfers to offset the consequences of modern capitalism and its associated degradations rather than continue with some of those redesign concerns of the early Miliband era. There was a path not travelled but Ed had signposted it.

The reason why we didn’t follow that path was the assumption by the political professionals in the party in that period that Labour was on the right side of the two big shifts in the politics of that parliament. On the one hand Liberal Democrats recoiling from the Coalition government, on the other, Brexit or UKIP smashing into the Conservative right. So on both of those big clutch movements Labour was on the right side. The assumption was we couldn’t lose. Therefore, less became more; if we could just get through to election day, we would win, as we were the depository of these two big electoral shifts.

Early in the parliament George Osborne made a disastrous budget, which allowed us to get an undeserved poll lead, really, which acted as a disincentive to carry on the work on some of the more difficult territory; of rethinking the purpose of the left based on some of these deeper questions of design within modern capitalism. Ed thought there was no need to do this now. We could keep the party united and win the election – as leader what is there not to like?

So the politics of Miliband era shifted away from the bigger issues that would be uncomfortable across parts of the Labour coalition – still an uneasy coalition coming out of the Blair-Brown years. The safer ground was one of distribution – rather than pre-distribution –  captured in the ‘cost of living’ frame – of how you chop up the proceeds of growth rather than redesigning the system itself. Consequently despite the early promise we failed to offer a genuinely different politics. At one minute past 10pm on election night one exit poll pulled the ceiling in on that strategy.

The gap between the Labour Shadow Cabinet and the radical left became fertile terrain for Corbyn in the subsequent election after the loss we suffered under Ed. Corbyn was the only one who stood outside of the doctrines of New Labour. He offered a moral critique of modern capitalism unlike the others. Some interesting policy flowed from that – especially around community wealth building, industrial and economic democracy, innovative municipalism etc. But I would argue just as Miliband ended up with a utilitarian politics of distribution, this was also reflected in much of the politics around Corbyn.

FHP: In criticising some of this economic reductionism and distributionism, The Dignity of Labour traces back to classical political economy, in particular David Ricardo, a set of approaches that rival the pluralist industrial relations and Marxian value theory you advocate. These rival ‘Ricardian’ approaches see the reconciliation of class conflict occurring not in the sphere of production but after the fact in the market, by means of distribution.

In particular, the ‘Ricardian’ reading of Marx that focuses on ‘embodied labour’ as the source of value, and the primacy of the forces of production in determining capitalist development, implies distributive solutions that leave the social relations that structure work in the sphere of production untouched.

Ricardian Marxism is taken to inform subsequent approaches geared towards the distribution of proceeds of growth as the basis for ‘political reconciliation’ beyond the workplace, as well as scenarios of imminent crisis based on decline of direct labour. This has the effect of displacing struggle from the employment relationship to distributional conflicts within society at large, and promising the resolution of these struggles through technological advances.

The task instead, you argue, is to see labour itself as a contested terrain that relates to economic value by means of its abstraction in exchange rather than direct embodied labour. This complicates appeals to distribution and restates primacy of the relations of production in shaping the crisis tendencies associated with technological change.

What are the implications of this highly abstract understanding of labour and value in capitalist society for the current horizon of left policymaking, for instance around new ‘remedial cash transfers’ like the Universal Basic Income, which the book characterises as a redistributive mechanism just as utilitarian as anything under Brown or Miliband?

JC: Well, the first thing I’d say is UBI is a big powerful idea. And there are some brilliant arguments both for and against it. As such I think we have to inspect the motives of those who are arguing for it. It’s a much more complicated debate than presently constituted. It has advocates on the radical right as well as radical left. You can find advocates and opponents within every model of justice within political philosophy.

My concern about distribution is that it redirects attention within the history of the left, and the history of Marxism, away from labour relations issues. This a strange paradox because the left thinks that value is created through the exploitation of labour. It seems very odd that within the history of Marxism that scholarship and politics has tended to neglect workplace relations itself. Now, I argue – and this is a debate that was very much alive forty years ago – that this tendency is derived from a specific, dominant interpretation within Marxism and specifically within value theory that has focused relations onto distributional battles as retaining political primacy rather than battles over the character of work itself. This has been a recurring theme within the history of the left, and it is disastrous.

Just fast forward to today. One of the hopefully enduring outcomes from Corbynism was interest in economic or industrial democracy; one of the lost paths in the history of the British left. Corbyn is an unlikely figure here – thirty or forty years ago, his position would have seen this turn as collaborationist and a sell-out. I was really intrigued how they latched on to worker ownership funds, for instance, which some of us had tried to get Labour interested in in the early nineties. This stakeholding theme around work, and cooperatives and municipalism were all central in the new ‘models of ownership’ papers circulating around the Shadow Treasury team. Really important themes, and a really rich seam within Corbynism which should be retained in any future policy debates.

To me this rested uneasily with other elements around Corbynism, such as an overemphasis on distributional concerns because of what I would call a ‘Ricardian’ inheritance, a misreading of value theory within Marxism and the assumption of a diminishing working class through automation as ‘concrete labour’ declines within the production process, which ignores the aggregation of labor in a social sense. Politics becomes a battle over economic proceeds and the distribution of assets between ages or other demographics

Now, these sound very abstract debates, I know. But they have concrete political significance, because it leads to a politics distributing the spoils of production rather than altering the architecture of work and the capitalist economy itself. It also leads to very over-optimistic assumptions around the trajectory of capitalism, given the displacement of concrete labor within the labor process. And that is taken to mean that capitalism is eating itself, through the lack of its value-creating possibilities. A benign route to an era of ‘postcapitalism’ beckons.

So, abstract debates import very concrete politics. It’s always been a tension in left politics, but generally  it’s remained in the academy. Now, it has very concrete applications today in terms understanding of the direction of modern capitalism.

We now see a new socialist imagination, where we reinvent the future, demand automation and a world without work, one of abundance and liberation, where there is no such thing as dignified work. And this is seen as self-evident through a certain series of highly questionable theoretical devices within Marxist theory, which needs to be explored because the implications of it are disastrous. Logically we almost get to the stage where there is no point in resisting the technological direction of capitalism, that technology itself is seen as inherently benign, even liberating.

The danger is we reintroduce the worst fault in the history of the left, which is its recourse to technological determinism, producing varieties of authoritarian, dictatorial politics. And the danger is that a feedback loop into the worst excesses of the history of the radical left is now being represented in the guise of fashionable postcapitalism because of certain technical failings in interpreting value theory.

Now, there’s an awful lot wrapped up in that answer. But the point is you can argue we’re going in precisely the wrong direction because of a technical misunderstanding of what Marxism is. And it creates a technologist route out of capitalism and an embrace of the forces of production devoid of any notion of agency or class struggle or contestation over the character of work. It dramatically resets the history, purpose and strategy of the left.

FHP: One of the other themes of The Dignity of Labour, linking the politics of work and policies of distribution, is the productivity puzzle. This provides us a way to think about the future of work as well. Over the past few years, we’ve had a lot of hype about capitalism breaking through this kind of barrier where there’ll be a workless future due to automation and robots. In the book, you chart the statistical complexities of drawing these assessments out of the present into the future. In spite of the hype, what we’ve actually seen on the ground is a type of stasis where we’ve got low productivity rather than machines supplanting jobs, and rather than substitution we’ve seen the augmentation of labour with technologies that have actually intensified work and degraded it in terms of pay, skill and conditions. This hardly resembles what Paul Thompson critically characterizes as a ‘tipping point thesis’, seeing peak capitalism giving way to a discernible utopia awaiting on the other side. In fact, things look quite different, notwithstanding the consequences of COVID-19 for the economy.

The book argues that the distributionist approach only holds politically insofar as there is growth enough to create a surplus that can be shared around. If we look around us, it might appear that we live in an age of unprecedented growth and productivity, but for economists like Robert Gordon we have experienced an age of relative stagnation. You argue that the service economy constructed in the 1990s has made productivity gains hard to achieve, jarring with the auspicious tech-utopianism and tech-dystopianism that colours many expectations of where work and capitalism are going. Short on growth and in a state of productive malaise, is capitalism increasingly a zero-sum game, where any distribution represents a loss to someone else along the line? In that sense, how central is the question of productivity to the health of democracy, and the ability to make policy at all?

JC: I’m very interested in the notion of the ‘productivity puzzle’ that we’re inhabiting now. Because the notion of a puzzle is benign. It’s almost humorous. And that’s partly because we haven’t got the language to describe our current stasis, because the political classes all bought into a miracle thesis around the effects of Thatcherism. So that’s meant that we’ve got very limited room to maneuver in order to dissect the current situation, which is much more profound than a puzzle. It is a crisis of work, rather than a puzzle, which is destabilizing the foundations of liberal democracy.

Flatlining productivity reflects something profoundly wrong with the architecture of capitalism. That’s why questions of work should be center stage, yet the grave legacy of Thatcherism or the neoliberal breakthrough, which I chart from a document called Stepping Stones published in 1977 – has decoupled work from politics. It neutralizes work which is now perceived as a rational transaction between the individual employee and employer. That’s now fraying. because it’s failing to deliver, as reflected in some of the productivity indicators, but more widely in terms of the turbulence affecting modern capitalism, because. The crisis of work helps ensure capitalism is unable to deliver what it purports to guarantee:   freedom, homes, incomes, sound money.

This is not a puzzle, it is a profound challenge upending capitalism itself, questioning how it can endure. Rather than it withering away as work withers away, it is creating forms of work which induce a profound instability, we either confront and correct or allow to degrade further with the consequent upheaval, turbulence and escalating authoritarian populism.

The politics of work will in the next few decades will be absolutely front and center in terms of public discourse. You can see this being played out, strangely enough, in the Conservative Party in the so-called ‘Red Wall’ seats. But I would argue the hangover of Thatcherism is so enduring that the Tory Party will never be able to do to do what they know they have to do to in order consolidate this new class reconfiguration.

Theresa May set up the Taylor Review, because she knew something was going on that needed to be remedied – in terms of work quality. But nothing’s come out of it. She talked about industrial democracy, but nothing came of it. Because the party wouldn’t let her. Now the question for me is, given the history of distributionism on the left, whether the left will be able to do anything about this. And that’s why I seek to rehabilitate the Oxford School, which was the last coherent attempt to refashion a politics of work on the centre-left. The only alternative on the left is a post-work politics driven through a terrible misreading of Marx. So we should rehabilitate exiled traditions.

HP: Into this breach steps Labour. After the weekend briefing war that followed the Hartlepool result, a party spokesperson said that “work and jobs” were going to be the number one policy priority for the for the foreseeable future, and Angela Rayner was given a newly-created role as Shadow Secretary of State for the Future of Work. This shows that Labour is going to start engaging with these issues.

As you suggest, Labour are faced with a Tory party that has ditched the existing Industrial Strategy, but it has replaced it with an auspiciously more specific approach to the relationship between industry and work in the areas addressed by the “levelling up” agenda. The Tories are now recast as what you term in the book ‘the party of work and the activist state, offering ‘Regional Keynesian stimulus, through infrastructure spending’ and a ‘New Deal sentiment’’. You write that the new ‘importance of work, workers and the working class’ to the Tories ‘will not pass with the virus but will remain a central part of a new evolving conservatism’. The Tories showed an openness to a more compromising approach to industrial partnership around the furlough scheme, emulating tripartite bargaining with Rishi Sunak flanked by the heads of the TUC and CBI on the steps of 11 Downing Street.

Meanwhile, a ‘roaring twenties’ economic boom is forecast to follow hot on the heels of the recovery from the pandemic, which could, some suggest, act to boost ailing innovation and productivity, including by incentivizing investment in new technologies. On top of this we have a newly interventionist and protectionist government seemingly prepared to steer the economy in a potentially more productive, manufacturing-based direction with greater support for R&D and strategic industries.

Following the 2008 crisis, the book notes, productivity and productive investment did not recover. Does the combination of economic recovery from the current – and much different – crisis, twinned with a post-neoliberal government, suggest a possible basis for a productive resurgence? If the economy recovers, and the Tories pull off even half their agenda, how does Labour craft a distinct position in a radically changed context, where, for instance, the impacts of technology in the workplace might become more tangible than they have been over the past five years?

JC: I knew the autonomist movement in the eighties. Negri was a marginal political figure. You’d occasionally meet an autonomist who’d be up on Broadwater Farm throwing a few rocks or, in the Brixton riots. They were talking about the factory being society as a whole, yet they were marginal figures.  They’ve now mainlined into the post-work left. The consequent danger is the left walks away from the major contested politics of the future, around the character of work – both a crazy political strategy and ethically wrong.

The clever Conservatives you talk to see this moment as commensurate with 1979. They pinpoint an equivalent reconfiguration of class forces. Back then they were locked in power for 18 years, but they could well exceed that now. So what do we do about it? I would argue there is an opportunity here because although the Tories know they need a new politics of work, they cannot go there. The Thatcher legacy will derail them in providing real quality jobs, what Joe Biden describes as jobs that you can raise a family on. That won’t happen. They won’t be able to regulate against the sharp practices of British Gas workers being fired and rehired or the Deliveroo drivers on £2 an hour, because it pushes back too much against their recent history and the miracle thesis of the 1980s.

Thatcherism was not about the quantity theory of money, of meeting Q3 targets. It was built around the deregulation of labour, the cornerstone of the whole political philosophy. John Hoskins was an arch Austrian. Their emphasis was on chaos and creative destruction. They weren’t neoclassicists interested in minor adjustment to monetary targets. This was a wrecking ball. And I don’t think Johnson and his ilk will be able to reject this revolution and could create a really strong opening for Labour around good work.

Obviously, the Tories are going to try and create work. But we have to debate the nature of work itself, the architecture of the economy and the workplace. Proper employment protections, the redefinition of the worker and employee contractual status, proper renumeration, union recognition, the right to work as a constitutional right for every citizen, industrial democracy, worker directors – there’s a massive agenda there for Labour around good work being the organizing principle for a new politics.

FHP: On that basis, then, Labour’s task now might look something like an ‘immanent critique’ of the Levelling Up agenda, using its affordances to present a better alternative to the government’s incomplete approach. There are of course other ways to combat the government’s new appetite for state largesse – to warn against the risk of overheating the economy by piling spending upon recovery, for instance. But with Johnson riding Merrie Albion through a ‘roaring twenties’ it will be difficult for Labour to preach moderation.

The Dignity of Labour eulogises President Roosevelt’s New Deal – something it shares in common with Michael Gove’s Ditchley speech last year, which placed the government’s agenda in the same ambitious lineage, as well as the association drawn lately between Biden’s first 100 days and those of FDR. Amidst competing claims on the spirit of the New Deal and its relevance today, what can Labour learn from Roosevelt in order to hold Tory hands to the fire over the Levelling Up agenda? And, looking across the pond to Biden’s potentially transformative administration, how neatly can we map lessons from the US context against our own?

JC: Going back to our discussion of distributionism, there’s a lot of talk about fiscal stimulus borrowing from both the Biden plan and FDR’s thirties attempts to reinvigorate the economy. I’m more interested in where FDR went in the latter stages, in the 1944 State of the Union. He started talking about new economic and social constitutional rights – the right of work, to housing, free education, health and security, all built on questions of human dignity. There is a rich radical politics there beyond Keynesian stimulus. The politics of work could be the gateway to such a reimagination of social democracy, if the left today have the agility and the creativity to go there. Will we go there? The jury’s out because of what we’ve talked about – some of the current post-work fashions, and whether our factionalism means we are too tired and hollowed out to have the energy, purpose and strategic agility to head in this direction. Our lack of pluralism, civility and fraternity might inhibit building the alliances necessary to build such a politics

Now, there are some openings. Angela Rayner’s new job around the future of work is an opening, the new policy review is an opening. The fact we’ve had such a battering in the polls, the overriding sense that we have no definition in terms of what we stand for, motivates a renewed emphasis on work as creating ballast within Labour.

So I’m quite optimistic strangely that we could forge a new politics around good work. It seems to me the joint, the three elements to start a semblance of renewal, could be good jobs, the environmental challenge, and a new pluralism. If you can align these three, there could be something serious in play.

FHP: Addressed to the impasses of left thinking over the past five years, the book contains a great deal of scepticism about contemporary claims of impending technological upheaval. However, with productivity a central concern of the book, you also hint at a technological ‘high road’ to productivity that avoids the kind of race-to-the-bottom work intensification we have witnessed in recent years.

This would be based on the pluralist reforms you argue for, like greater workplace democracy and codetermination. These, you suggest, could act as a counterweight to the satisfaction of shareholder value alone and play a role in resolving the productivity puzzle by driving productive investment and negotiating new technology at the level of the workplace.

You suggest that the ‘drivers of productivity’ also happen to correspond ‘to what people desire in their work: autonomy, influence and discretion over their labour, voice, responsive management, the prevalence of initiative taking, innovation, high-impact suggestion making and higher-productivity-enhancing jobs’.

Post-crisis, in the recovery, what kind of policy context would need to be created to stimulate productive investment as a road to growth rather than profits being eked out on the back of poor pay and conditions? What would you like to see from Labour in this area, as its focus turns towards work and jobs with Angela Rayner’s new brief?

JC: That’s exactly what I’m suggesting: the ‘high road’ route is a good description. My argument is that the productivity puzzle reflects a crisis of work. We bought into the miracle thesis around Thatcherism when instead we should have christened it as a consolidation of some of the long-term postwar trends in the British economy towards low-wage, low-productivity industrial development, which accounted for our comparative weak productive position.

We shed over a million manufacturing jobs and consequently there was a short-term productivity boost because output didn’t drop to the extent that employment fell. But  in the medium term that may have consolidated our long-term productivity weaknesses. And this was played out in the development of an hourglass economy under New Labour, which was preoccupied with the knowledge workers on the top, whereas actually, hiding in plain view, were the people in the bottom end of the hourglass.

This has subsequently played out in Brexit and the development of the right in their ‘Red Wall’ conservatism, it is ever present in the crisis of the left, and threats to liberal democracy with populist right-wing authoritarian tendencies. This is all linked to these issues around work and its character. So a ‘high-road’ route out rather than doubling down on the sweating of labour, is the only option available. We have to incentivize investment, dramatically intensify the devolution agenda – again, neglected terrain in the Miliband era – rebuild local government, new infrastructural and industrial strategy, use the state as the driver through procurement and pioneering new forms of ownership.

Over the next few years we have to incubate such a politics within a new municipal radicalism. Andy Burnham, in his victory speech the other day, talked about the right for all citizens to have dignified work. And I think it’s absolutely the right way to simultaneously confront the crisis of the left, as well as diagnose and remedy enduring productivity concerns by reconfiguring and democratizing workplaces, and embrace a different approach to technology. Rather than just seeing us as dormant victims or beneficiaries; of technology as a utopian or dystopian driver of politics, it has to be reset as a distinct political terrain. So there is a ‘high road’ route through this for Labour, if it can rethink a politics of work.

FHP: As you say, technology isn’t intrinsically utopian or dystopian, but rather its development and implementation is conditioned by social relations and political-economic processes. The ‘high road’ you describe – workplace democracy, industrial codetermination, productive investment and innovation – historically tends to be associated with an economy of larger, more vertically-integrated manufacturers that has seemed irreplicable in the global era.

Under New Labour, globalization, deindustrialisation and the knowledge economy were taken to rule out any resurrection of Donovan-style industrial relations pluralism. Rather than via the extension of collective bargaining, New Labour sought to distribute the gains of knowledge-economy growth and shore up low-paid service work through tax tweaks.

Today, we see what some perceive as a retreat from globalisation, the rise of new protectionisms, and maybe even a new Cold War waged between rival globalisations based on competing military-economic blocs. Greater government support for strategic industries like defence and aerospace is now underpinned by notions of ‘systemic competition’ driving a new integrated approach to foreign, defence and industrial policy.

This policy context, combined with decoupling from global supply chains and production networks currently dependent on Chinese state capital and manufacturing capacity, could, some foresee, reshape the UK economy back towards a stronger manufacturing base in high-tech sectors where skills and productivity gains are more readily achievable.

In this meeting of international relations and industrial relations, do you see the possibility of a kind of reset that restores balance to the economy, opens up a high-road to productivity, and makes more possible some of the democratic reforms to workplace life that you seek? In this sense, what implications does so-called ‘Global Britain’ have for local policies around the organisation and regulation of work and employment?

JC: I think that’s absolutely right. I think you’ll see Lisa Nandy try to shape a stakeholder approach onto the international stage in order to rethink our relationships and location within the international division of labour. That includes international treaty obligations including the International Labour Organisation, our foreign policy investment decisions, the use of budgets within the Foreign Office, the promotion of human rights, the promotion of international trade unionism. You can imagine the democratization of some of our international architecture alongside some reform of company law, new forms of worker directors and the like at home.

The Bullock Committee of 1977, which looked at industrial democracy, was split. We had worker directors in British Steel and the Post Office. There were a few experiments in worker cooperatives, such as Meridan Motorcycles and Kirby Engineering, but nothing as extensive as in other economies. We could try and ally the democratization of our domestic economy with a wider renewal of international rules-based systems. This is ambitious, but a natural, rich terrain for a new left politics and goes with the grain of the best of Corbynism.

It could import a domestic and international coherence in the context of the wider crisis of social democracy, especially if you can align it with sister parties trying to excavate a similar sort of path. It also allows for domestic bridgebuilding within the left between our traditional class base and wider progressive forces and between factions.

Now that is weaving a lot together. But it seems to me, possibly, that we can reset a politics of work as some sort of anchorage within that wider politics. Biden is trying to do that, in terms of his domestic policy agenda and its links to the environment. His key people argue that there are two big planks to their agenda. One is the environment. The other is jobs, equality and unions. By linking these together he is seeking to weave together a coalition of voters between Rust Belt and the East and West Coasts, the young and the old, and get out from under the binaries that are destroying left politics. If we cannot transcend these binaries we will be destroyed by them. 

Monday 10th May 2021

Jon Cruddas is Labour Member of Parliament for Dagenham and Rainham

Frederick Harry Pitts is Lecturer in Work, Employment, Organisation & Public Policy, University of Bristol