By Leander Jones
Introduction
This essay will seek to explain various issues surrounding “workfare” in Britain, with reference to the nexus between the power resources of capital, as posited by Marxist theories, and the interdependent power available to all participants in the cooperative relationships that constitute social life, as explicated by Piven. It begins by defining the term “workfare”, and then describes how it was initiated and expanded under New Labour and the current Coalition Government. It then goes on to explain, from a Marxist perspective, why workfare was implemented. This analysis begins with an explication of the structural and ideological power of capital over the state. This is followed by Jessop's argument about the transition that has taken place from the post-War Keynesian Welfare State to a Schumpeterian Workfare State, which explains how this power has translated into a new policy paradigm which prioritises international competitiveness above other social and economic goals. It then demonstrates how workfare programmes are in-keeping with this over-arching objective. The next section of the essay examines the reasons why there has been a subsequent partial reversal of workfare. It utilises Piven's theory of interdependent power to illustrate why consumers and protesters successfully managed to force many of the companies involved to withdraw their support for the schemes, which indirectly led to a backtracking by the Government due to, again, the structural power of capital.
What is workfare and what shape has it taken in contemporary Britain?
Workfare must be defined in contradistinction to traditional welfare, as established in Britain in the post-War settlement. Traditional welfare involved the “decommodification” of elements of social life, i.e. the withdrawal of numerous social areas from market relations. This separated the entitlement to welfare from the obligation to work. Workfare, in contrast, means the “recommodification” of welfare; one's entitlements are defined according to one's relation to the processes of production. Under such a system people's benefits are generally conditional upon them working (Holden, 2003, pp. 303-316; Jessop, 1993, pp. 7-40; Open University, date unknown a).
The “New Deal” brought in by Labour in 1997 marked the first moves towards a workfare ethos in Britain (Clark and O'Reilly, 2011; Open University a). Their “welfare-to-work” schemes included Working Families Tax Credits, which increased in-work benefits so that work was significantly more rewarding than remaining on out-of-work benefits, and the New Deal for Young People, which made receiving benefits after six months of unemployment conditional on engaging in a programme of subsidised employment, training, or volunteering. These combined financial incentives with a degree of compulsion to work (Aufheben, 2011; Holden, 2003, pp. 303-316). A further significant shift towards workfare came with the 2007 and 2009 Welfare Reform Acts, which aimed to impose work on benefit claimants who had previously been permitted to stay out of the labour market, such as the sick and single parents, and which also entailed a “work for the dole” scheme for the long-term unemployed (Aufheben, 2011; Trickey and Walker, 2001, pp. 181-191).
The current Coalition Government expanded workfare substantially with the introduction of five different compulsory work schemes: Mandatory Work Activity; The Work Programme; Sector-based Work Academies; the Community Activity Programme; and the Work Experience Programme. These vary with regard to who they are aimed at, as well as what conditions accompany them, in terms of what sanctions they entail (how long benefits are frozen for non-compliance) and what type of work they promote, and for what duration. The Work Experience programme is a slight anomaly in that the scheme is voluntary, but sanctions are applied after one week of taking up a place (Ball, 2012; BW, 2012; CAB, date unknown; Jacob, 2012). These programmes are a significant change to workfare as it existed under Labour. They have increased the length of mandatory work placements (from a previous maximum of two weeks to up to six months), and have extended the “welfare-to-work” providers' control over the lives of the unemployed to two years (who remain registered even once they have found work). Moreover referrals have been put on loop, so on completion of a period of mandated work people are not returned to the normal requirements of the jobseeker's agreement (neither is there any guarantee of a job at the end of it); they can thus remain on the programme indefinitely. The placements can also take place in private businesses, and “for the profit of the host organisation”, whereas they were previously restricted to charities and public bodies (BW, 2012; Clark and O'Reilly, 2011; Malik, 2012c). The supposed rationale behind workfare is that such schemes are necessary to tackle unemployment by instilling a work ethic, routine, and discipline in the long-term unemployed. It will also supposedly make such people more appealing to prospective employers (DWP, 2011). However, the Government have since done a partial U-turn, removing the sanctions from the Work Experience scheme, while the status of some of the other schemes are as yet uncertain (BW, 2012; Malik, 2012d). The reason for this change of heart will be examined below.
The power of capital and the implementation of workfare
Structural power of capital
Marxist state theories maintain that capital has not only economic, but also political, power, due to its position relative to the state; this goes a long way towards explaining the implementation of workfare. On the one hand the state relies on capital as a central source of funding, without which it could not perform its central functions. It relies on the bond markets for borrowing, and on tax revenues for long-term expenditure. Thus capital can constrain state policy through (threatening) relocation, investment strikes, or raising interest rates on loans to the Government. All of these actions are readily available to capitalists, especially when compared with the equivalents available to labour, such as wide-ranging strikes or protests, which require the (arduous) mobilisation of large numbers of people (Gill and Law, 1989, pp. 475-499; Ward, 1987, pp. 593-610; WGPI, 2008b). Another reason for capital's power over the state is ideological. The hegemonic discourse in modern economies prioritises economic growth above all (or most) other objectives, and meeting this goal is often necessary for state elites to win elections. Furthermore, it is believed that private sector investment, innovation and accumulation is necessarily and inevitably the main source of growth. These ideas result in the interests of capital being accorded a higher value than other interests, as Governments try to cultivate a good “business climate”. This in turn gives businesspeople credibility in their dealings with Government, because they are able to “claim an expertise of public value”. Additionally, business tends to derive power from maintaining contacts with government and controlling the majority of the mass media (Gill and Law, 1989, pp. 475-499).
From post-War Keynesianism to the Schumpeterian Workfare State
Prevailing understandings of what constitutes an appropriate “business climate” will change over time, in line with the development of institutional practices, structural changes in the market and discursive shifts (Ward, 1987, pp. 593-610). The general restructuring of the economy that has taken place since the 1970s, associated with globalisation and a post-Fordist accumulation regime, has moulded Government economic and social policy in contemporary Britain. It has led to, according to Jessop, a decline in the Keynesian state form and its associated welfare-state policy paradigm, and a move towards a Schumpeterian Workfare State (SWS). The former was “epitomised by the pursuit of full employment through demand management in relatively closed national economies”. The latter has abandoned these commitments, differing in two main respects. In economic policy, the SWS is concerned with promoting “product, process, organizational, and market innovation”, and structural competitiveness, through supply-side intervention (Holden, 2003, pp. 303-316; Jessop, 1993, pp. 7-40). This change has resulted from national money now largely functioning as international currency. This is relevant in two main senses. During the post-War Keynesian era, wages served primarily as a source of demand due to the national focus of production. Thus it was in the interest of capital for wages to be kept relatively high, increasing in line with profits, as this allowed full capacity utilisation in closed economies. In contrast, the internationalisation of markets means that wages have come to be viewed primarily as costs of production. Additionally, globalisation has resulted in an increase in cross-border flows of financial capital. This means that national economies are increasingly vulnerable to volatile currency movements – and the strength of national money depends to a significant extent on the competitive strength of the national economy. State intervention in the economy thus tends to focus on supply-side factors, as demand management has become increasingly difficult. For these reasons, public spending has generally come to be used to further productive and competitive needs (Jessop, 1993, pp. 7-40). This is believed to necessitate policies of low taxation, low inflation, competitive wages, and flexible labour-markets. Secondly, social policy has been tied in with, and subordinated to, these goals; it is now used as a further tool for increasing labour-market flexibility and structural competitiveness. One element of this has been the “recommodification” of welfare. Welfare is no longer about extending the social rights of citizens; the needs of business are prioritised above the needs of individuals. In sum, the rise of the SWS has been accompanied, and reinforced, by changes in economic discourse and ideology, which have fed into workfare policies (Holden, 2003, pp. 303-316; Jessop, 1993, pp. 7-40).
Workfare programmes serve the needs of the SWS model because they help to maintain an effective “reserve army of labour”. A central goal of SWS is to keep inflation low and wages competitive, and the belief is that, in order to do so, a certain level of unemployment must exist in the economy. The logic is that full employment leads to capital having to compete for labour, meaning effectively a shortage in its supply, which drives up wages, and also places unions in a strong bargaining position from which they can increase wages even further, generating inflation. Marx also recognised that this would be the case. He argued that capitalism will therefore maintain a reserve army of (unemployed) labour, which would mean a consistent over-supply of workers and constant competition for the available jobs, keeping wages down and weakening organised labour. The level of unemployment that will yield a “stable rate of inflation” is known as the Natural Accelerating Rate of Unemployment (Baker, 2000, p. 1; Christensen, 2000, p. 4; Jacob, 2010; Marx, 1999). Thatcher broke with the post-War tradition of striving to achieve full employment, and deliberately allowed mass redundancies. The unforeseen consequence of this policy agenda was that it created a pool of long-term unemployed people by the end of her time in office. The long-term unemployed however do not serve as an effective reserve army because of their general “reduced job-search activity..., and employer reluctance to employ them” due to their (at least perceived) recalcitrance and lack of discipline. Workfare programmes represent an attempt to reinvigorate this reserve army so that they can effectively put pressure on the labour market. David Blunkett openly stated that this way “firms have more potential recruits to choose from, wage pressure is diminished and non-inflationary growth is promoted” (Aufheben, 2011; Christensen, 2000, p. 3-15; Holden, 2003, pp. 303-316).
When there is a shortage of labour, as was the case when Labour devised its Welfare Reform Acts due to the flourishing economic situation prior to the financial crisis (the implementation of the 2009 addition could not be easily reversed due to the uncompleted plans already made with the private workfare providers), there is arguably some validity to the claim that international competitiveness necessitates that inflation and wages do not outstrip the levels in other countries. However, over a million people were thrown into unemployment as a result of the crisis, thus creating a surplus of workers (there are at least six jobseekers per vacancy) – who were skilled, healthy, and willing to work. In such a situation there is no urgent need for legislation designed to force the unfit into the labour market (Aufheben, 2011; Jacob, 2012). Yet it was in this context that the Coalition Government expanded workfare, suggesting an additional reason for their programmes.
The Coalition Government's workfare programmes benefit capital also by undercutting workers in normal employment; it creates the potential for employers to replace existing workers with much cheaper labour. This is likely to undermine labour laws and workers' rights due to the insecurity it would engender among workers, which would discourage unionisation and strike action. It could also in the long-term lead to a decline in the number of people in paid work as they are substituted for workfare wardens doing the same tasks, which in turn would increase the size of the reserve army of labour and competition for existing jobs, depressing wages further (Clark and O'Reilly, 2011; Jacob, 2010). Marx explains how the logic of capital accumulation means that business must always remain competitive, or risk failure. Companies employing this unpaid labour would be afforded a competitive advantage, which would encourage competitors to cut costs by doing the same in response. There is already evidence that such substitution has been taking place since the Government introduced its schemes. This is particularly the case with overtime for permanent retail workers, as well as the filling of Christmas vacancies. In some cases, jobs have been replaced entirely; for example with station staff on the London Underground (BW, 2012; Clark and O'Reilly, 2011; Marx in Sawaya, 2011, p. 9). Workfare thus enhances labour market “flexibility”, and puts downwards pressure on overall wage levels.
In contrast to the relative cautiousness of New Labour, the apparent zealousness of the Coalition Government to not only maintain an effective reserve army of labour, but to undercut existing workers, can be explained by their different societal objectives; their approach is largely Neo-liberal in character. This emphasises, among other things, privatisation, deregulation, liberalisation, and “hire-and-fire, flexi-time, and flexi-wage labour markets”. It is underpinned by a belief in the inherent efficiency and self-equilibrating nature of the unrestricted free market. These ideas have fed into the Government's understanding about how to engender post-recessionary recovery. Labour's approach seems to be more in-keeping with Neo-statism. This sees room for state involvement in the market to increase supply-side competitiveness, promoting “sunrise sectors”, technological advancement, training and education, and emphasises a “flexi-skill” above a “flexi-price” labour market (Gamble, 1989, pp. 350-361; Jessop, 1993, pp. 7-40). The important point however is that, while the two parties maintained ideological differences, their strategies can both be understood in the context of the emergent SWS. This has been accompanied by a new set of (perceived) constraints and opportunities to those of the Keynesian era, which lends to (some form of) welfare recommodification.
Piven's theory of interdependent power
However, the Marxist argument set out above, which posits that the implementation of workfare derives ultimately from the extensive power resources of capital, cannot, by itself, explain the subsequent partial reversal of Government policy. To this end we must to Frances Piven's theory of interdependent power.
What is interdependent power?
Power resources are the means available to actors for exerting power over others – for influencing or coercing their behaviour in a desired manner, even against their resistance. Those most commonly identified include skills and expertise, leadership qualities, the occupancy of positions of authority, wealth, prestige, and control of the instruments of physical coercion. The latter three are widely considered to be the key elements, as they are reliable bases for dominating others. One type of resource can typically be used to gain another, and as such they tend to determine social hierarchies; they are by definition concentrated among those of higher social rank (Piven, 2008, pp. 1-14; WGPI, 2008a). However this resource perspective cannot explain why at times people of lower social rank, without wealth or status etc., do sometimes prevail in contests with the powerful, and have historically been able to impose institutional reforms for their own benefit. Such resources therefore cannot be the only means of exercising power, because otherwise the weak would be incapable of resistance (Piven, 2008, pp. 1-14). Frances Piven argues that such scenarios are made possible through the exercise of a different kind of power, based not on resources but on the interdependent relations which comprise social life. Societal functions are organised through “networks of cooperative relations”, and all people who contribute towards these relations have potential power over those that depend upon them. This type of power is not concentrated among a certain group in society, but is, by its nature, widespread (Piven, 2005, pp. 33-53; Piven, 2008, pp. 1-14; WGPI, 2008a). Power resources only translate into power if they are perceived as such; power is not a corporeal phenomenon, but is the result of interaction. Resources are only relevant to the extent that they are integral to interdependent relationships, and thus what counts as a resource changes over time as the nature of these interdependencies change. For example, control over capital is an effective power resource only because people are embedded in a set of economic relations where the majority are “dependent on entrepreneurs for the means of production and subsistence”. The activation of interdependent power entails the ability to “disrupt” these cooperative relationships (Lendman, 2008; WGPI, 2008b). Thus while control over investment and employment gives capitalists power over workers, and they can exert leverage through lockouts or blacklists or capital flight for example, workers have potential power over capitalists because production depends on their labour, and they can engage in sabotage, slowdowns, and strikes. Similarly, state elites in democratic societies write the laws and have monopoly control over the legitimate means of violence, but they also depend on the public's votes to remain in office. Even the unemployed have power in that others depend on them to be quiescent and comply with the norms of civic life. Interdependence means that domination cannot occur (except through physical force) without the cooperation of the dominated; it offers the opportunity for resistance (Lendman, 2008; Piven, 2005, pp. 33-53; Piven, 2008, pp. 1-14).
“Actionability”
This perspective accounts for social hierarchy by explaining how, while co-dependants have equal potential resources for power, some contributions (and disruptions) are more actionable than others, and can be used more easily to exert leverage in interdependent relationships. The lines of power in society generally reflect this differing “actionability” (Piven, 2005, pp. 33-53). There are seven main reasons identified by Piven why participants in interdependent relationships would/could not exercise their potential power. The first is that they are unconscious of it; they have not recognised the indispensability of their contribution. The second is, in collectivities, because similarly situated actors are unable to coordinate their activities effectively. The third is because people have insufficient staying power – i.e. they are unable to tolerate the costs of the disruption to a particular interdependent relationship. Fourthly, people will not be successful in exercising power if they are unable to prevent their opponents in a contestation from circumventing them, and thereby undermining their indispensability. Similarly, they must be necessary to the opposing party to prevent them from exiting the relationship entirely in the face of their challenge. They may, additionally, be constrained by third-party leverage. Lastly, people will not be able to exercise interdependent power in the face of the threat or use of physical force (WGPI, 2008a).
Rule-making as an instrument of power
The “actionability” of contributions is also constructed, as behaviours are accorded different levels of legitimacy by societal rules – both legal and customary. Social life is always organised by rules; a prerequisite for cooperation which provides a framework for action. However, rule-making is also an instrument of power, used by people to make others do what they want by delineating permissible and impermissible practices. Rules are often utilised by dominant groups to restrict the activation of interdependent power by weaker groups, through delegitimising the actions available to them; in contrast they grant themselves wide scope for the use of such leverage (Piven, 2005, pp. 33-53; Piven, 2008, pp. 1-14; WGPI, 2008a). One central element of this asymmetrical rule-making process concerns the ideological construction of contributions. The contributions made by dominant groups tend to be defined as the most valuable to systems of social cooperation (despite the fact this does not usually reflect reality), thereby justifying their privileged positions. A part of this is the legal rights of ownership granted to certain actors over things, the possession and supply of which in turn come to be understood as making up their contribution to interdependent relations. A good example is the contemporary legal construction of private property, in which individuals are remunerated for the contributions of the property they “own” – and as a result owners of capital are widely believed to perform the most important functions in the processes of production (Albert, 2004, pp. 28-42; Piven, 2005, pp. 33-53).
The ability of particular actors to exercise power derived from interdependence, along with constructed attitudes about their relative contributions to cooperative relations, are subject to change. Groups battle over rules, which activate and inhibit the latent power inherent in interdependencies. Rules can change as a result of the deployment of power resources, but also as a result of mobilisations from below. Many rules generally reflect a degree of compromise between opposing parties, such as with laws that permit strikes but only with conditions attached to them. However, even in such cases, the existing compromises tend to be weighted in favour of dominant groups with more power resources (Piven, 2005, pp. 33-53; Piven, 2008, pp. 1-14).
The power resources of capital, interdependence, and the retrenchment of workfare
The Government's partial retrenchment of workfare can be explained by combining Piven's theory with Marxist arguments about the power of capital over the state. Anti-workfare campaigners began to apply pressure on companies and charities who had opted into the Government schemes to refuse taking on unpaid workers. They did this through a variety of methods which equated to an exercise of interdependent power. Firstly, they aimed to disrupt the normal processes of business – invading shops and conducting “walks of shame” (in which a group of protesters would demonstrate outside all the chain stores in an area which employ the scheme). This behaviour frightened executives, who were worried about the negative implications for their brand image (and thus their custom); they did not want to appear exploitative (Ball, 2012; BATC, 2012; Topping, 2012). However, most significantly, anti-workfare campaigners and thousands of customers threatened the organisations involved (via social media) with consumer boycotts (Malik, 2012b; Malik, 2012c). This represented a potential disruption of the interdependent relationship between merchant and customer. This in turn led many of the companies to put pressure on the Government to drop the sanctions from the schemes, with partial success1 (BW, 2012; Malik, 2012b; Malik, 2012c; Malik, 2012d).
The utilisation of the boycott tactic (or the threat of it), and the rejection of industrial action, represents an effective exercise of interdependent power. Workfare itself neutralises the interdependent power people have to withdraw their labour from the production process, because it undermines the ability of those involved in such schemes to tolerate the disruption of the relationship, as they could not survive in doing so. This represents, in Piven's terms, a dominant group (in this case the Government in the service of capital) creating rules which deprive the weak in society the means they have of exercising power over the strong. However striking would also have been difficult for workers on normal employment contracts who may have wanted to do so in support of the workfarers. On the one hand it is not an easy thing to do in a practical sense, as workers do not get paid while on strike, and their staying power is limited by their need to keep their families fed, pay their rent etc. (Piven, 2008, pp. 1-14). Moreover, laws regulating labour strikes have always been harsher than laws governing capital strikes, reflecting asymmetrical rule-making and rendering (especially sympathetic/secondary) strikes very problematic (BBC, 2002; Piven, 2005, pp. 33-53). This is particularly the case in modern Britain. Trade unions have lost a great deal of their legitimacy, while workers also suffer weakened labour protections, face competition from a growing temporary workforce (and now workfarers), and are more vulnerable to flight by mobile capital due to globalisation (Jones, 2012; Lendman, 2008). Moreover the mechanisms intrinsic to mass production, identified by Marx, that serve to generate labour solidarity and labour-capital antagonisms, do not apply so readily to the modern service-based economy. Piven explains how strategies of resistance must change in order to meet the challenges of changing circumstances. Her theory supplements Marx as it highlights how the disruptive power of labour deriving from their interdependence with capital is not timelessly applicable – rules determine what interdependencies can be exercised (Piven, 2008, pp. 1-14). The relative success of the boycott tactic can be explained by the fact that, on the one hand, it has not been delegitimised in the same way as strike action has, and, on the other, it meets Piven's seven criteria outlined above for the successful utilisation of interdependent power. Withholding custom when there is a wide variety of shops from which to buy goods is inevitably easier than withholding labour, meaning much greater staying power. Moreover, such a tactic prevents circumnavigation of the “power seeking” party; i.e. unlike the hiring of scabs to undermine workers' strikes, merchants cannot simply “go around” boycotting customers.
While the protesters could not influence the Government directly, they were able to apply successful pressure on capital, using its structural power to their own advantage, to exercise indirect interdependent power over the state. The very implementation of workfare suggests that the Government displayed little concern about its popularity among the marginalised groups who would be victim to such schemes. This is because political participation is stratified – the advantaged tend to participate more in politics than the disadvantaged. The unemployed, particularly, have low voter turnout. Thus interdependent power could not be exercised directly against the state (Piven, 2005, pp. 33-53; Rampbell, 2011; WGPI, 2008b). In contrast, the structural position of capital meant it could exercise leverage through its interdependent relationships with the state as outlined above. This is evidenced by the fact that when the companies involved in the workfare schemes applied pressure on the Government, they were immediately invited in for talks. There is no ostensible reason, if the workfare schemes were purely about getting people back into work, as the Government claimed (rather than being designed to benefit business), why these companies should have been given a platform to express their views on the matter, or why their advice was heeded (Ball, 2012; Malik, 2012c; Topping, 2012). Thus people were able to most successfully exert influence over the state indirectly through utilising the structural power of capital.
Conclusion
In conclusion, the implementation of workfare and subsequent partial backtracking by the Government can be explained through a combination of Marxist state theory and Piven's notion of interdependent power, and sheds considerable light on power relations within British society. Capital's power over the state is multifaceted, but derives ultimately from its economic power, which it can use to disrupt the prosperous climate upon which state actors and the state itself depend. This means that, whatever else a state may do, it must be concerned with fostering an economic environment which is perceived to be favourable to business. Such perceptions change over time, and in recent years have responded to, and reinforced, a transition from post-War Keynesianism to a SWS as the global economy has become increasingly integrated. Part of this transformation has involved the subordination of social policy to the goal of economic competitiveness. Workfare is a key element of this – it serves to maintain an effective reserve army of labour, provides cheap labour, and weakens the effectiveness of trade unions. Workfare has been approached in different ways by Labour and the Coalition Government, yet their ideological differences remain within a SWS framework. However the structural power of capital does not mean outcomes in British society are predetermined, as is evidenced by the Government's reviewing of some aspects of its workfare package. Members of society with no key power resources can achieve gains by refusing to cooperate in the interdependent relationships that ensure their domination. The effectiveness of such non-cooperation is constrained by a number of factors, including societal rules, the ability to endure withdrawal, and the degree to which the other party is vested in the relationship. These caveats explain why the (threat of) disruption of merchant activity was a successful tactic in indirectly gaining concessions from the Government (the structural power of capital was in this instance used against the interests of capital itself), while threats of labour or electoral non-cooperation were non-existent.
