The Truth Of Jobs: (Un)caring Work

THE TRUTH OF JOBS: (UN)CARING WORK

How are caring jobs negatively affected by capitalism? In order to answer that question, we need to understand how capitalism mostly operates in the modern world.

Capitalism is most often promoted as value-adding entrepreneurialism. As Kerry-Ann Mendoza pointed out in 'Austerity: The Demolition of the Welfare State and the Rise of the Zombie Economy', this variant of capitalism can be summarised as "A good idea + skill + usefulness = added value". It is this version of capitalism that makes inequality seem most acceptable, since people generally agree that anyone risking their own capital in bringing to market a product or service that people choose to purchase because it will improve their lives in some way deserves to profit from successful ventures. It is little wonder, then, that capitalism is promoted as though it mostly involves this sort of entrepreneur.

But value-adding capitalism is actually not the dominant force in the modern market economy. You can see this is so by following the money created by the banking sector. As explained in an essay in my 'Down The Rabbit Hole' series, there was an 82-fold increase of the UK's money supply from 1970 to 2012, which saw the supply go from £25 billion to £2,050 billion. In 2010, what percentage of that money went towards businesses that contribute to GDP? Not a great deal, actually. In fact, those kinds of loans accounted for less than 10% of total lending.

In contrast, 45% of loans went to the property market and an additional 15% went to commercial real-estate companies. There's a reason why banks much prefer to lend to unproductive sectors of the economy: It's because it seems so much safer than lending to value-adding business.

In the last episode we saw how capitalism seeks to commodify everything. What it also seeks is the most cost-effective commodities, which is to say those that offer greatest advantage for minimal investment of resources. Furthermore, capitalism demands infinite growth, and that is problematic because any physical commodity has only so much utility.

Mendoza illustrates this point by using the example of water. This is an incredibly valuable commodity, one we literally cannot live without. Its utility, however, is limited. After all, there are a finite number of people who need to drink it and a finite number of ways in which it might be used.

Buying up all the water, thereby gaining monopolistic control over total water production and supply would be a step toward higher profits. Assuming you have maxed out your consumer base, what else might you do? You could sell shares in your company so that those shareholders run the firm while you retain control and continue to receive profit even though you no longer contribute any work. Since you have near monopolistic control over water you can wilfully manipulate its price, say by creating scarcity. If you can get others to bet on whether the price of water will rise or fall, you can rig this casino to ensure the house always wins. In fact, why not place your own bets with the money made from all those bets on water prices?

While all this is going on, the price of water creeps higher and higher. This is because the consumer must pay for the profits and losses occurring all the way up this chain as well as for the water itself. As Mendoza explained, "this is how financialisation works. It takes something that has utility and, without increasing the utility or adding value, it generates ever greater costs to the users and profits (in the short term) for the owner".

In case this all sounds like hypotheticals with scant connection to reality, let's look at a real-life example. The company Apple probably strikes most people as a prime example of 'good capitalism'. After all, their success is due entirely to making great products that everyone wants to buy, right? Actually, that's not the only reason why this corporation is worth about a quarter of a trillion dollars. As is well known, around 2008 the banking and financial sector almost collapsed. The system was 'too big to fail' and so money doctors came in and pumped 13 trillion of euros, dollars and yen in order to keep the system going. And what system was it that they kept going? One in which money is cheap to borrow. And that's what Apple did. Instead of investing their capital in making great new products (what most people assume all capitalists do) they instead borrowed that cheap money. They then issued their own bonds which earned them a premium on top of that, took the cash from that and then bought their own shares back. Lo and behold, this resulted in a boost to the value of their stock which meant 'the market' voted for them to award themselves even more money. And as all this was considered 'investment' (even though no utility-increasing work had been done) guess what? The company paid zero tax on this money.

But, the thing is, there actually is no such thing as money from nothing. If somebody is making money out of thin air, somebody somewhere else is being lumbered with the cost. In other words, financialisation is the subordination of value-adding activity to the servicing of debt. For that is what is really being created whenever financial instruments increase the paper value (not the utility) of an asset. As Mendoza explained, "the purpose of financialisation, the securitisation food chain and the zombie economy is for creditors, investment banks and investors to make maximum profits from lending".

Remembering what we said about commodification in the previous essay, we can appreciate why capitalism should result in the subordination of value-adding activity to the servicing of debt. The former involves risking one's own capital in investing in physical resources and competing in a market where consumers may exercise choice over what they spend their money on. The other involves negligible investment of resources (indeed, none at all if you discount the physical apparatus required to track and transfer debt) and something people often have no choice over paying.

Invariably, an eventuality arises where the sole purpose of debtors (consumers and tax-payers) is the servicing of loans and production becomes a secondary consideration. The debt keeps on piling up and when it all comes crashing down it is invariably the consumer that foots the bill. Governments, by now in the pockets of those financial giants that inflated the zombie economy bubble, won't punish the elites who used their immense wealth and power to alter markets and laws so they could take greater risks with other people's money and assets. You can see this is so by considering the piffling fines levied at Fortune 500 CEOs who have been found guilty not just of unethical behaviour but blatantly criminal conduct. No, they would rather impose austerity, in other words turn private debt into public debt. There then follows savage cuts in services that the more vulnerable in society depend upon, such as the care sector. And so we arrive at the reason why capitalism negatively affects caring work. It is because its drive to find the most cost-effective commodities creates a zombie economy focused on the creation and servicing of debt rather than production that increases utility, and this results in austerity measures. Those wanting to provide decent care are placed under increasing strain as cuts are made, reorganisations put into effect (often multiple times) and those left find their workload increasing to near-unmanageable levels.

The cynic might also add that reducing care in the community is a way to increase negative motivation. Since capitalism strives to reduce rewarding employment as far and as much as possible, it needs something else to compel people into submitting to jobs. Negative motivation is that something. By negative motivation, I mean doing something because you fear the consequences if you refuse (positive motivation, by contrast, is doing something because you expect to be rewarded for your participation). The more social safety nets are taken away, the more fearful the prospect of being jobless becomes and the less bosses need rely on reward. More stick, less carrot. Perhaps it is not surprising, then, to find cuts being made to pensions, job security, minimum wage, social healthcare, unemployment benefits and other community-enriching assets that had to be won from capitalism.

REFERENCES

'The Corruption Of Capitalism' by Guy Standing

'Austerity' by Kerry-Ann Mendoza