PLANTATION CAPITALISM AND A FEW THOUGHTS ON REACHING ‘THE POST’S’ FIRST ANNIVERSARY

free-trade-economics-cartoon

Click on image to enlarge.

It seems ironic that the first anniversary of The Mugwump Post should be marked by the Abbott government’s announcement of a planned work-for-the-dole scheme.

The Post initially started life as Smashthejobnetworksystem after a particularly frustrating and humiliating encounter with my Job Network provider.

Despite a great deal of research into this corrupt and punitive system accompanied by pleas to the continually growing number of unemployed to organize and resist being pushed into menial part-time and casual work, my posts fell largely on deaf ears.

It was then that I decided to broaden my horizons beyond the single issue of unemployment and comment on politics in general – particularly the influence of the destructiveness of neo-liberalism and its use of ‘supply side’ economics.

The result was far better than I had hoped and a steadily growing readership has encouraged me to continue.

No writer/blogger/commentator is ever alone however, and therefore before I proceed with this article a few words of thanks are in order.

Firstly, to the regular and growing readership of The Post  I would like to express my heartfelt gratitude for your ‘likes’ and your comments.

As someone recently noted, comments to a blogger are like coins to a busker; always welcome even if the contributor/commenter is hoping that you’ll cease your caterwauling and move on.

My deepest thanks and admiration to the following; Victor Quirk of the University of Newcastle who introduced me to Modern Monetary Theory – the principle weapon of mass destruction against the vicious and blindly destructive premises of ‘Marxism for Millionaires’ that is neo-liberalism.

To John Armour, whose guiding hand, sparkling humor and depth of knowledge on all things MMT have provided rock solid support in helping get the message across -a million thanks for your patience, availability and your warm friendship John!

To fellow bloggers Ross Sharp author of ‘Smelly Tongues’, whose sardonic prose and take no prisoners approach always serves as excellent example of what writing a good blog should be.

In my humble opinion you’re one of the best in the blogosphere Ross, for God’s sake don’t stop!

Also many thanks to Deknarf, whose weekly ‘Graphic Manipulations’ always bring a smile to my face, and whose equally warm friendship and ease of approach are also deeply appreciated. Domo arigato gozimasu D., and keep ’em coming!

Finally, to Michael Taylor of Cafe Whispers and the Australian Independent Media Network, Cartoon Mick, Ad Astra, Sally Baxter, M.R., Yosef Albric, and others too numerous to mention – I remain your humble servant.

And so to the main fare…

A year ago, as far as both the NLP and the ALP were concerned, unemployment was a politically dead issue.

The ALP claimed that there was plenty of work available due to its job creation policies, so much so that Julia Gillard shifted single mothers from single parent payments to Newstart after their children reached the age of eight years old.

There was a loud but brief scream from those affected before the issue was swept under the carpet and the real repercussions could be felt.

Most significantly, after a decade of Howardism, the ALP did not overturn the corruption riddled system of Tony Abbott’s brainchild, the Job Network Providers but rather let it continue.

And why not- after all Kevin Rudd’s wife, Therese Rein had become a multi-millionaire through the establishment of  a UK based model.

When it came to avoiding responsibility for genuine job creation and punishing the unemployed for the sin of being unemployed, the Rudd-Gillard governments were determined to demonstrate to the electorate that they could out neo-liberal the neo-liberals.

Twelve months later, and with the NLP now in government and unemployment steadily rising and threatening to rise above the 5 -6% mark as dictated by ‘supply side’ economics, the scenario has taken a rapid volte face.

The proposal by the Abbott government to ‘enhance’ the work-for-the-dole-scheme has met with a swift and angry response both from job seekers and the electorate at large.

What Abbott is proposing is simply another version of ‘plantation capitalism’. The use of low paid workers -and it doesn’t get much lower than the dole- to shift responsibility for creating genuine employment away from government and ensure that a continuance of a punishment regime stays in place to satisfy the neo-liberal notion that those who are unemployed have a ‘mutual obligation’ to the community in exchange for a pittance which is 50% below the poverty line.

As stated above, the public response has been swift and outraged. Rather than re-hash much of whatever has been said today in the MSM and the blogosphere, I thought that I would re-blog a piece from May 2013.

Originally titled ‘Starve for you shall not work!’ I feel that my argument is even more valid today than it was then.

…Thousand’s of us went from door to door asking for honest work. We were whipped for begging.

The ruling class did not say ‘work or starve; They said starve, for you shall not work!’

– Victor Hugo; The Hunchback of Notre Dame.

If you’re unemployed and reading this, the chances are that you are out of work not because you don’t want to work, but because the neo-liberals or liberterians as they like to refer to themselves, do not want you to work!

With the application of neo-liberal theory to economic management by developed countries (and forced on developing countries) since 1973, trans-national companies were able to exert a steadily growing influence on government policies and in particular, policies which dealt with unemployment.

What conglomerates wanted was a large pool of unemployed and under utilized workers from which they could draw, while dictating both wages and conditions with minimal resistance or interference by trade unions or government regulation.

The core belief of neo-liberalism and one that corporations have eagerly championed,  is that capital is primary and must always take precedence over labour, and therefore capital dictates the terms under which labour is utilized.

In the eyes of the neo-liberals, the producers in the form of transnational corporations are the bringers of bounty and creators of wealth and as such there should be no control on their actions, rather the controls should be applied to governments who have a ‘monopoly’ on services such as education, health, transport, management of the environment and welfare.

Welfare of any kind, especially unemployment benefits are an anathema to the proponents of neo-liberalism and since the 1990s they have pressured governments to either reduce payments or dispense with them all together.

The reason for eliminating unemployment benefits argue the neo-liberals, is that the payments (as meager as they are), encourage people not to work, and in fact there is plenty of work available due to the efforts of these bringers of bounty and wealth.

The argument that neo-liberalism has been responsible for a sharp rise in unemployment and the steady decline of  wages and conditions as the result of privatization is conveniently overlooked, as is the fact that while transnational capital is free to roam the globe in search of even cheaper and more willing labour under the auspices of free trade agreements – the workers cannot.

For hardcore neo-liberals, there are only those who produce and those who live off production. In the eyes of the neo-liberalist, those who do not produce are regarded as parasitical and totally dispensable.

For the parasites who were once productive due to the munifecence of the corporations that employed them, and have now folded their tents to go in search of other global markets; under neo-liberalism, they become unproductive parasites in search of a new host.

Should that new host require far less parasites than the old one; well, that’s just the way the market operates according to the proponents of free trade.

In Australia, the problem of parasitical surplus was addressed by privatizing the ‘job seeker market’. This measure, according to the Howard and successive governments, allows the job seeker a wide variety of choice in choosing a Job Network Provider who will tailor their efforts in helping those out of work to find new employment. Nothing could be further from the truth.

From its outset, the Job Network System or Jobs Australia as it is now known, was a sham and far from attempting to help people find jobs its function was to force recipients to comply with the terms and conditions of a ‘mutual obligation’ contract.

These terms included a certain number of jobs to be applied for within a specified time (usually ten per fortnight) and no job offer however menial, could be refused.

This in effect meant that no matter what your previous occupation or qualification, be it newly graduated IT technician or middle aged manager,  you had to accept a job even if it was as a street-sweeper or picking up horse apples at the race-course.

Most jobs that these agencies provide are usually part time, casual, or preferably short term in order for your JNS provider to claim a fee up to three times – once when they place you, once when they put you back on the books when the job finished, and then again when they placed you in another short-term position.

The payment of a stipend by the government to these agencies for ‘job placements’  resulted in entrenched corruption and despite several government inquiries into the nature and efficiency of these organizations – there has been little change in the manner of which they operate.

In the wake of the GFC however, the prevailing attitude of ‘work or starve’ imposed by transnationals and privatized employment services on their hapless clientele is moving toward that of ‘starve, for you shall not work’ as transnationals shift their capital to underdeveloped countries in search of cheaper labour and greater profit.

This continuing trend leaves the privatized ’employment services’ to deal with a steadily growing pool of unemployed for whom there are less and less jobs, and therefore less profit for the agency – the answer?  Find any and all excuses to throw ’em off the dole and into the street – starve, for you shall not work.

There are of course solutions to this problem but it will take a government with foresight and intelligence to implement them.

One such solution is the establishment of a ‘Job Guarantee’ – an integral part of Modern Monetary Theory

Under the ‘Job Guarantee’ the government would create work in the public sector under a scheme which would see the unemployed paid at the minimum wage (currently $606.40 pw.), while undertaking training and development of vocational skills and applying them appropriately.

This scheme would also act as a hedge against slumps in mainstream employment as participants could return to the Job Guarantee should they be laid off, and then return to full or part-time employment when conditions improved.

Other advantages of the scheme would be to allow employers from the private sector to judge applicants skills and abilities in situ, and would also ensure that people with a disability could work in occupations specifically designed to accommodate their needs.

In tandem, the system would also provide vocational experience and serve as a pathway to higher education or entry to skilled trades.

By its structural nature, the Job Guarantee would not lead to inflationary wage demands but rather would contribute to a more equitable and just society.

Putting the unemployed and under utilized into such a scheme would provide enormous benefits to the economy and alleviate the growing disparity between rich and poor.

If faced with the choice of participating in a scheme that pays you an equable stipend and allowing you to live with modest dignity, or continuing along the path that leads to short-term contracts, reduced wages and no security, coupled with the fear that you may never work again due to market forces, which would you choose?

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14 Comments

  1. It’s interesting to note that, apparently, the buzzword for the business elite at Davos was ‘inequality’, particularly the reducing of it. It seems, that those who define themselves as our masters have finally realised that if you don’t pay the hoi polloi much they don’t spend on goods and desirables and this tragic situation is a definite drag on the profitability of the businesses you own or have invested in. Well fancy that! One would have thought that that was basic economics! Ya see! Ya have this demand thingy and a supply thingy and if nobody has any moola to do the demand thingy then you get an oversupply thingy and you either have to cut your take from the supply thingy or your business goes all bugga up!!
    It’s equally interesting to note that while almost everyone was on track with the equality and lessening income disparity the one outstanding contributor to this talk fest, one Tony Abbott, was heading in the other direction with his strange take on fiscal rectitude.
    This work for the dole nocturnal emission was born in the 60’s — it didn’t work then and it won’t work now! It’s an archaic attempt by uneducated financial neo-conservatives to ascribe to the free-marketeers American dream!

    Reply

    1. Yeah, funny that you need a fully employed workforce to drive the economy and that the more out of work or in part-time-casual positons the slower the economy gets. Of course Keynes and Galbraith told ’em that in the first place, but as we all know they were just a pair of commo know-nothings (probably belonged to a union too..)

      Reply

    1. How true Eddie! The problem is that currently both sides in Australian politics are snoring loudly. The other problem is that most Australians and more than a few Americans believe ‘Hollywood history’ which is as far from reality as Alpha Centauri is from the Earth.
      Thanks for the comment, always appreciated.

      Reply

  2. The idea of a Job Guarantee skirts interesting (possibly tantalisingly) close to the idea of “work for the dole” schemes, but approaches the problem of unemployment from the direction of the compassionate rather than from the mean-spirited punitive end of the spectrum.

    But that’s the point isn’t it: dog-whistle politics. There’s not the slightest interest in actually addressing the problem.

    Those who have worked in the area of unemployment know that most unemployed people would prefer paid work to sit-down money. Even the square pegs I’ve known who might resist coercive employment in round hole jobs would jump at the chance for paid work if their “alternative” pursuits were redefined as “square hole” jobs. Bill Mitchell has suggested unemployed musicians might shift their rehearsals to schools as one example and do some teaching.

    Fully developed, a lot of recreational/leisure activities morph into extremely well paid, glamorous and prestigious employment.

    The true genius of the JG however is its role as an inflation buffer.

    A core belief of neo-liberal ideology is that there is a “natural rate” of unemployment that keeps a lid on inflation, which translates to the need for a buffer stock of unemployment (currently deemed to be about 5%) to keep the greedy wage earners in line. That’s why there will be no serious attempt by the Abbott government to address the problem and why it’s focus needs to be on demonising the victims of its policies instead.

    This morning’s announcement by Abetz that we are on the verge of a “70’s style wages breakout” as unemployment nudges towards 6% is therefore somewhat “curious”.

    Because the JG does not compete with the private sector for labour and because the JG wage would be nothing more than the minimum wage (half the average wage but double the dole, say) it would not be inflationary. Rather, Bill Mitchell says the fixed JG wage provides the inflation anchor.

    The “problem” with a JG however is that it would increase the deficit, which means that to have any chance of getting it off the ground first requires that policy makers themselves would have to undertake a basic JG training programme in how to manage their (the government’s) finances.

    Lesson (1 ) would be that the government does not have a financial constraint.

    Thanks for those very kind words Edward. It’s hard to inject “sparkling humour” into a subject like this but having drongos like Eric Abetz hanging around does create wonderful opportunities.

    Reply

    1. As erudite as always John. After watching Abetz performance this morning, I wondered if there might be a market for ‘tough screen’ TV’s so that the viewer could happily put their boot or hurtle any object at hand into it without fear of damage. As you have previously commented; the JG’s a no brainer but presently ‘no brainers’ in the other sense is what we have in government. Abetz and his policies are just another manifestation of what Deknarf termed ‘the nocturnal emission’ of archaic attempts by uneducated financial neo-cons to ascribe to the free marketeers of the American Dream’ (see above comment). The reality is of course that like the Abbott government, the American Dream is actually a nightmare! As we’re both aware, the fact that governments do not have financial constraint is something that neo-libs try to avoid admitting in the same manner that vampires avoid daylight, and that the policies of cutting jobs and wages in order to stimulate economic growth is the same as the medieval practice of applying leeches to purge the patient of ‘poisons’ with exactly the same result.
      Modern Monetary Theory with its Keynesian based approach is the only logical answer to economic stimulus but then again logic has never been the strong suit of the neo-libs and their belief in ‘supply side’ economics and ‘free market approach’ as evidenced by the GFC. To be ignorant is one thing but for a government to be wilfully blind in order to pursue a thoroughly discredited ideology goes beyond barratry and approaches the realm of high treason against the Australian people.

      Reply

  3. Brilliant article. As a Scot who has suffered the inequity and tyranny of Workfare (as it is known over here), I can tell you definitively that a) it does not come close to improving employment levels, b) it is merely a method by which to manipulate employment numbers by pretending that those sanctioned are not unemployed and c) has the effect of reducing economic efficiency by incorrectly matching skillsets to jobs. Disaster.

    Reply

    1. It is indeed a disaster Politicoid, and to make matters worse – the system was the brain-child of the current Australian PM, Tony Abbott who consulted so called experts in the UK on how to implement the system. The irony being that your very own Emma Harrison of A4e now has her tentacles into the Australian ‘market’ as do the US company, Maax Employment.
      As you are no doubt aware, the entire system is corrupt from top to bottom with many of these operators ripping off the government for ‘false’ placements and operates principally as a punishment regime for those unfortunates on the dole.
      Its just another neo-lib rort to perpetuate ‘supply side’ economics and to break unionism.
      Modern Monetary Theory economics NOW!
      Full Employment NOW!

      Reply

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