Guy Standing: In a book that I wrote in 2011, on page one I said that unless the insecurities, and the fears, and the aspirations of the precariat were addressed as a matter of urgency, we would see the emergence of a political monster.
You will not be surprised that in November 2016 I received a lot of emails from around the world from people who said, “The monster has arrived.” Today, ironically, he is in Germany inspecting his troops. Maybe a lot of Americans would like him to stay in Germany. But I would not.
What I’m going to talk about today is something that has involved me in something I never expected in my life—an adventure. Because since that book was published it’s been translated into twenty-four languages and taken me around the world to speak in over 500 places in about forty countries. And the reason for that is not the book but the fact is that the global precariat is growing in every part of the world.
And I want to talk about some of the background of this disruptive class that is taking shape. Because I think it has a resonance with this conference and similar events taking place. Because as someone like myself—I’m an economist; as I was walking around here this morning I thought, “This is the future.” You are the future if, if, we are to have a future. It’s up to you to define that future. And I mean it very seriously.
We are in the midst of a global transformation. Those of you who are political scientists or know political science will understand that Karl Polanyi wrote a great book in 1944 called The Great Transformation. And his book was fundamentally about what took place in the 19th century and the early part of the 20th century. He describes the mid-19th century until the Second World War as the disembedded phase of the Great Transformation. It was dominated initially by financial capital. By laissez-faire economics. And by a technological revolution that was taking place at the time. It took place in which the dominant groups were around finance and monopolies and imperialism.
But what happened in that disembedded phase was that insecurities multiplied. Inequalities worsened. Wealth inequality grew more than income inequality. And in the process we had the emergence of a new class structure in which the bourgeoisie was confronted by a solidified proletariat. The proletariat were the losers in the process of two world wars and the Great Depression. And we had what Polanyi said with “the threat of the annihilation of civilization.” We all know what happened.
But after the Second World War, a new embedded phase of his Great Transformation took place, in which finance was tamed. In which social democracy became the dominant force. Labor-based insecurities were reduced. Inequalities were reduced. And we had a period in which global trade grew in competitive goods, but with similar standards in the industrialized capitalist countries.
But there were inherent contradictions in that embedded phase of the Great Transformation. It became inflationary, it became sluggish. It was no golden age. It was no golden age that prompted 1968. The riots. The revolt against the system. It was a period of drabness in many ways. When full-time, stable jobs were meant to be the nirvana. But it stultified the human creativities. It stultified subversive thinking. It was a period in which there were many improvements, but it had its limitations. As we all know, that Great Transformation collapsed in the 1970s and 1980s, ushered in the disembedded phase of the Global Transformation.
The disembedded phase was dominated by neoliberalism in economics. By the emergence of politicians like Margaret Thatcher and Ronald Reagan, to put those neoliberal ideas into practice. It was dominated by the emergence of US-dominated financial institutions like Goldman Sachs that became great umbrellas around the world. And it ushered in, too, a new technological revolution that you’re all dealing with today.
For my story, the most important aspect of the early phase of that technological revolution was that it made the relocation of production and employment much easier. So that the relocation depended on relative costs. And it strengthened the power of capital over labor. So we see around the world, in every country, a shift in which more and more of the income goes to capital and less and less goes to labor. It’s a phenomenon that spread around the world.
And the technological revolution also meant that capital mobility increased dramatically. And, we have some other interesting developments which I’ll come to in a moment. But inequalities have increased. Insecurities have become vastly greater in every part of the world. We have a new Gilded Age, at the top, and at the bottom. And that Gilded Age has gone with a new Kondratiev long wave of technological revolution which has helped in the relocation again of the geopolitical power that is so important today.
We have, now, moved away from the neoliberal era of the 1980s and 1990s. And a pivotal event came in 1994 with the passage of TRIPS by the World Trade Organization. Trips: Trade-Related Aspects of Intellectual Property. What this did is globalize the American system of intellectual property rights. With patents, with copyright, with brands, with all of the adages that go with that system. So now, we have a system in which about a quarter of the world’s GDP—national income—is attributable to intellectual property rights.
Some of you benefit from patents and other copyrights and so on, but it’s a system that has entrenched powerful, big corporations. So we have Big Pharma. We have Big Finance. And above all we have Big Tech. The Big Tech are rentiers, taking more and more from the world’s income pile. And in effect we have rentier capitalism today, not a free market. This is the most un-free market system ever created in history, where more and more of the income is going to the owners of property. Physical property, financial property, and intellectual property.
We’ve had a break down of the income distribution system of the 20th century. It’s broken. Wages have been stagnating in all industrialized countries for three decades. Three decades. They are lower in the United States in real-wage terms than they were in the 1980s. The implications are dramatic. And above all we’ve got a new global class structure that has taken shape. The class structure has a plutocracy at the top. It is not the top 1%, it’s the top 0.1%, of multi-billionaires striding the globe as global citizens, taking more and more rental income. Take someone like Jeff Bezos. His income has grown by $400 million per week this year. This is obscenity multiplied.
This plutocracy of course now have a representative in the White House as their spokesperson. We have other plutocrats manipulating our politics, manipulating our technology, manipulating our commons. These are the realities.
Beneath the plutocracy is an elite who are the servants of the plutocrats. Who are making many millions of dollars euros pounds or whatever, and are servants. We don’t have to feel sorry for them, either.
Below them is the celeriat. With stable, salaried employment. With pension to look forward to. Paid holidays, paid medical leave, paid this, paid that, paid the rest.
The only problem is that the celeriat has been shrinking everywhere in the world. It won’t disappear, but today, many in the celeriat worry about their daughters and their sons. Because they’re not going into the celeriat.
Below the celeriat, just, is a group I call in the books the proficians, a combination of “professionals” and “technicians” Many in this hall this morning are part of the proficians. But be careful. These people don’t want full-time stable jobs. They don’t want to be saying yes/no to a boss. They’re making good money. They’re rushing around with their laptops or whatever over their shoulders. They’re making a lot of money. They’re making a lot of money and they are tending to be complacent. But they should worry about burnout. They should worry about mental illness at age twenty-eight-and-a-half, or thereabouts.
The proficians are helping in identifying the technological and political options for the future—they have a responsibility. But they must not lose that responsibility in an egotistic, narcissistic pursuit of private gain. It’s a difficult balancing act. But they have a responsibility because they have the skills, they have the knowledge, and they know what’s going on.
Beneath these groups are the old proletariat. Disappearing everywhere. They were the ones that established social democracy, the trade unions, collective bargaining, tripartism. All the institutions of the International Labour Organization. But today they are shrinking everywhere. And along with them their political representatives are effectively dead men walking. They are not the future. They did many good things in the 20th century. I do not mean to disparage them in any way. But they’re not the future.
Beneath the proletariat in terms of income is the precariat. The precariat can be defined in three dimensions. The first dimension is that if you’re in the precariat, you are being told, and you are being habituated, to accept a life of unstable labor and insecure work. You don’t have an occupational narrative to give to your life. An occupational identity. “I am something.” You worry that tomorrow morning you’ll have to be something else. You also have to do a lot of work for labor. Work that is not recognized, not remunerated, not in our statistics, but you know you have to do it otherwise you will pay a price.
And in being in the precariat, you don’t know the optimum use of your time. “Should I spend a little more time networking? Doing this. Retraining. Going to a conference. Doing this, doing that. Looking after my baby. Paying the rent.” And therefore you suffer from what I’ve called the precariatized mind. The precariatized mind when you’re stressed. You’re anxious all the time. You put a good face on it, but every now and then you see your friends collapsing in one way or the other. That’s how it feels for many people. Every day, I receive emails from various people from various places who don’t know me who want to explain their experience. Sometimes I get very angry. Sometimes I…feel like crying. But the pain out there is part of the process of liberation as well. It’s not just a victimhood, it’s about people trying to make sense of a life of insecurity.
And another feature is that people in the precariat tend to have a level of education that is above the level of labor they can expect to obtain.
The second dimension of the precariat is that people in it have distinctive relations of distribution. What that means is they have to rely very largely on money wages, money payments. They don’t get access to the prospect of pensions, or paid holidays, or paid medical leave. Or subsidized this or subsidized that. They have to live on wages. The only problem is that the value of those wages are tending to go down and the volatility of their income is growing.
So basically the second aspect of this distributional question is that most people in the precariat are living on the level of unsustainable debt. One mistake, one illness, one bad decision, and you could be tipped out into the lumpen precariat. Outside society, without a voice.
And of course at the same time the state has been changing its social security and social protection system towards more targeting on the poor. So it’s reduced the social solidarity of the social protection system, and this hits the precariat in a very big way. Because state benefits, welfare benefits, have been shrinking. And have been means-tested and behavior-tested, drifting to Hartz IV or the equivalent in other countries, where you’re expected to behave as the state tells you to behave.
Not enough people realize what is happening down at that end of the labor market. The indignities that go with it. The shame. The stigma. The poverty traps, whereby if you do get a benefit and you then have the offer of a low-wage job, you’re losing as much in benefits as you get from the low-wage job. You’re facing a marginal tax rate of 80% in Germany, 86% in Denmark, 80% in Britain. If the middle classes had to accept such marginal tax rates there would be riots in the street. But that is what society expects of the precariat. It’s not funny.
And in addition, and what I think is most importantly about the precariat, it has distinctive relations to the state. The institutions of society and governance. The precariat is losing the rights of citizenship. Often without realizing it they’re losing cultural rights because they cannot belong to organizations that represent their culture or identity or aspirations. They’re losing civil rights because they cannot get access to due process and legal justice. They’re losing social rights because they don’t have access to rights-based benefits and services. They’re losing economic rights because they cannot practice what they are perfectly qualified to do. And above all they’re losing political rights. Because they don’t see out there politicians or political parties that represent what they are. And what they want to be.
Now in that context, I described the precariat today in an old Marxian term. It’s a class in the making, not yet a class for itself. And what I mean by that is that while millions of people share the objective characteristics of being in the precariat, they have different consciousness of what it is. And you can divide the precarious into three groups.
The first I call the atavists. These are those who do not have a lot of education, but their parents and their families and communities used to be in the proletariat, used to have working-class backgrounds of being dockers or steel workers or car workers or whatever. This group is relating their deprivation of today to a lost yesterday, real or imagined. That lost yesterday they want back. It’s this group that supports the Donald Trumps. It’s this group that supported Brexit in Britain. It’s this group that supports the Marine Le Pen, the Orbans, and the equivalent in Germany and elsewhere. This group supported the Lega in Italy. You can name right-wing populist groups.
There’s good news and bad news. The bad news here is that they are proving to be profoundly strong. We risk today that that group could lead us into a new dark political future characterized by demonizing migrants and minorities, authoritarian tendencies, destructive, vile outcomes. But there’s good news. In my view they have reached their peak in terms of size. Many are getting older of that type. And they will not lead the other two groups in the same direction.
The second group in the precariat are what I call the nostalgics. These are made up with the migrants, the minorities, the disabled. People who feel they have no sense of home. They don’t have a home there, they don’t have a home here, but they dream of a home. This group knows it’s losing rights. It’s being demonized. It’s being victimized. But they will not support a neofascist populism. They keep their heads down because they have to survive. Every now and then there are days of rage when everything gets too much. But this group is looking for a home. It’s looking for a future. Its relative deprivation is its got a lost now. The first group a lost past, the second group a lost now.
The third group in the precariat are what I call the progressives. These are the millions of people who went to college, went to university, and were told by their parents and by their teaches, “Go to university and you will get a future!” A future. A career, status. Influence. Dignity. And they come out of university and college knowing they don’t have that future. All they have are debts, disillusions, and difficulties. This group is entering the precariat. It will not support neofascist populism. It is looking for a future. It is looking for a new politics of paradise. There are many people at this conference I believe are in this third part.
The bad news is they’ve been dismissing politics because they know, very wisely, that it’s been cynically manipulated by the plutocrats and by others, and therefore they have detached themselves from politics. The trouble with that is that it surrenders the ground to the others with a regressive, anti-democratic, anti-Enlightenment perspective.
But the good news is this: Since the crisis in 2008, and particularly since the Occupy Movement and the Arab Spring in 2011, and the Indignado movement, more of this third part of the precariat are reengaging with politics. They’re reengaging in different ways, beginning to forge an agenda for that future. And I believe that if you take a historical perspective then I only wish I were 21. I would love to be 21. Because if you are 21, you have a vacuum. You have an opportunity to forge a fundamentally Enlightenment-led future.
Let me give you by way of conclusion a few thoughts on what that might be. The thoughts are these: Today, our income distribution system is broken. We can’t put yesterday back. Therefore we have to build a new income distribution system. We will not get anywhere by trying to raise wages, but we will get somewhere if we decide that what society has to do is recycle the rent from the technocrats, the financiers, and the property owners to the commons. To the commoners. We must build that distribution system by returning to the values of the Enlightenment. Of égalité, liberté, fraternité, or solidarité. And to do that I strongly believe that one part of this new income distribution system should be a basic income that everybody has, as a right. [applause]
I have had the privilege of working for this for thirty years, since we formed BIEN. Anybody can join BIEN, we have many Germans who are part of it. We have thousands and thousands of people who are members.
For many years we were regarded as crazy. Mad, bad, and dangerous. But suddenly in the last few years we’ve suddenly become respectable. At least…tolerated. I’ve had the privilege of designing and conducting basic income pilots in four continents, the biggest being in India. Anybody who’s interested, I’ve written a book, Basic Income: And How We Can Make It Happen.
But let me just tell you what happened in India. A country that’s poor. A country that poverty is terrifying. And when we decided we would do it and we mobilized money, we provided 6,000 people—men, women, and children—with basic income, Sonia Gandhi told us herself. She said, “You’re wasting the money! They’ll waste it on drink and drugs.”
Two years later after we had done the pilot and seen what had happened, she called us back to her house and she said she wished she had known. What happened was that when they started receiving the basic income they did what all of us in this room would do. They started giving their children better food. So nutrition improved. Health of the children improved. Schooling improved. Health and nutrition of other adults improve. People with disabilities suddenly had a basic income with which they could be citizens. Women’s status improved. Sanitation in the villages improved. Work increased. Production increased. If you go to those villages today, you would have seen a transformation.
Now, that happened in a poor place. We also did it in Africa, where very similar results were shown. We’ve now got pilots in Canada and some hopefully launching soon in Scotland. And the Opposition leadership in Britain has asked me to prepare a plan for doing it in Britain. If you had told me ten years ago that any of those things would’ve happened, I would have said I must have had something to smoke or drink because I must be hallucinating. But change can come quicker than we think. It is up to us.
I want to tell you one story. I still have a few minutes, I hope. Is that…? What figure, I don’t know. But I’m going to tell the story.
When we were launching the pilot in India, we went to one village and all the young women had veils. And we had to have their photo taken for the card so that they could get their monthly basic income. And we had to persuade them to go into a hut with other women to have their photos taken.
Nine or ten months later I went back to that particular village and I said to one of my Indian colleagues, I said, “Have you noticed a difference here?”
And he said, “No. No.” I said what difference? He said, “Nothing. There’s better…sanitation.”
“No,” I said. “None of the women are wearing veils.”
He said, “Yeah.”
So we called some of the women across and we said, “Look excuse us, but…you wore veils, you’re not wearing veils now… Why?”
They were shy, they didn’t want to speak to a foreigner and so on. But after a while one of the young women spoke up and she said, “You know, before, we had to do what the elders told us to do. Now we have a basic income, we can do what we want to do.” [applause]
And there is an even more poignant story in our Namibian pilot. At the end of that one I went to one of the villages and I asked some young women, I said, “What was the best thing about having a basic income? What was the best thing.”
And they talked to each other, and giggled, you. Again, talking to a foreigner and so on. And then one of the young women said, “You know, before, when the men came down from the fields at the end of the month, with their wages in their pockets, we had to say yes. Now we have our basic income, we say no.” That’s emancipation.
And if you can put an analogy in Germany or Britain, anywhere else, you will find that this ability to say no to exploitation and oppression is a fundamental part about a progressive agenda for the 21st century. We have to find a way of liberating people to say no, and also to say yes. To say yes to the ability to help people, to do things, to care. To participate in the ecological aspects of life. And I think it will help in both respects.
In that context, let me conclude by saying a basic income is not a panacea. It must be part of a new system. We need new forms of voice. We need new forms of work. We need to realize today that new technologies are potentially liberating us to escape from labor so that we can do more work. Most languages distinguish the difference, but only in the 20th century were we stupid enough to think only labor counts as work. I have never worked harder than since I stopped doing labor. Since I stopped having a job. [applause] And what we have to do is convince the politicians and the social scientists that they should change their thinking about what is work and what is not work. Every feminist, and we should all be feminists, every feminist should be demanding that they change their concepts. Because it means that most of the work women do doesn’t count as work. It’s ridiculous. It’s sexist, it’s arbitrary.
For me, this is given a new dimension because of the growth of the precariat. Because if you’re in the precariat you know you have to do a lot of work. A lot of work. And you’re treated as if you’re being lazy.
But there’s another wonderful opportunity here. We all know or should know that we are threatened by extinction. Extinction that comes from the greenhouse gas emissions, the pollution, the erosion of the commons, the privatization of our spaces. Our loss of nature. Our loss of an ecological landscape. We know that. It’s the number one crisis charging towards us. We didn’t need the panel of climate change to tell us that, but we know it. And what are we doing? We’ve just seen in Poland, hardly anything. We need big carbon taxes. Big carbon taxes. [applause]
But there are two problems. There are two problems. First, taxes are unpopular. And second, if you just put a carbon tax, it would worsen inequality. Because the poor person pays proportionately more than the rich person. Therefore, we need to combine carbon taxes with carbon dividends. So that the proceeds of carbon taxes are recycled…I think most of you can work it out where I’m ending this discussion…recycled as basic incomes. The carbon tax can pay for a large part of a basic income future. And therefore this perspective leads to you thinking we can advance the cause of ecological survival, advance the cause of security, advance the cause of emancipation, and do what every transformative class should do. The precariat is a transformative class because it wants intuitively to abolish the conditions that define its existence, and therefore abolish itself. We can do it. Thank you very much.
Moderator: Thanks very much. They say on Congress every time every year we have a system that we don't want to use anymore. I think it's capitalism. [applause]
We're going to a Q&A, including your questions from the Internet. There are six microphones scattered around the room. So if anybody wants to ask a question in public we'll start this now. And we'll start with mic 6 over there.
Audience 1: Brilliant. Hi. So I was wondering, you mentioned basic income and you connected it carbon taxes. I was wondering what other strategies you're thinking towards tackling other systemic issues we have, especially in regards to land, which to me…you mentioned different type of property. But I think that land today is the proxy to access to all the other value.
Guy Standing: Thank you very much. I've got a new book coming out, to make me even more boring. It's called Plunder of the Commons. And basically what you've touched on is the theme of this book. If you think of the commons—the natural commons, the social commons, the civil commons, all our commons; including land, water, the air, our amenities and so on; we've allowed the privatization and colonization of the commons to take profit from our commons. And therefore we need a system of levies to say, "Hey, we want the rental income back for the commoners. And that includes land. That's why I strongly favor a land value tax. A land value tax is a very efficient tax, and it has to be part of building this commons fund along the Alaska Permanent Fund principles, for those of you who are familiar with that.
We also need it for water, for air, for digital information. I don't believe taxing robots, as Bill Gates proposed, is the answers. What I do believe is we should put a levy on all the information that Amazon and Facebook and the others are taking from us, free, and making billions. We should have a levy on that. [applause] And th levy should go to everybody equally, because you cannot attribute the profits they're making to any individual. We have to give it to everybody. And if we do that we are all the time building the fund that can help pay out towards a decent basic income. So that's my answer to your question.
Audience 2: Hi. Thank you for being here. Great pleasure. Just recently Sahra Wagenknecht was invited in a talk show about about basic income and the future of work. She's the leader of a German party, the left, Die Linke. She said that she doesn't like the idea of basic income. Her two arguments are she you doesn't like it regarding [?] neoliberal powers, they also like the idea of basic income, for example the CEO of Volkswagen and other big players. And second she said if you move to a basic income we as a society will lose a lot of protection and social benefits. What would be your reaction on her opinion?
Standing: I address this question in my basic income book in the following way: Every new idea in history, in social policy in particular, has been greeted at the time by people saying it will threaten something else and that it will lead to unintended negative consequences. They said this about unemployment benefits, they said it about family benefits. And then when it's introduced, suddenly the objections go away.
To me, I asked myself the following question: Do I want that person, or that person, or the person I meet in the street, do I want that person to have the basic security of being able to pay for food, to pay for their rent, and to buy decent clothes? Do I want that? And I say very easily to myself yes, I want that. Don't tell me that it's going to be a threat to something else if that person has basic security. Why is it that so many social democrats make this argument. I've confronted many. Including one major trade union leader. I said, "Why are you so hostile to having people have a basic income? Why?"
And the man who was chairing the session when I was talking, he said, "I think we'll have a coffee break now," before anybody could answer. And when we came back, he said, "Well now we'll move on to the next session."
And the trade union leader at the back stood up and he said, "No. I think we should answer the question." And he said, "You know, I think the answer is that if people had basic security they wouldn't be dependent on us. They wouldn't join trade unions."
And I looked at him and I said, "Just imagine the morality of what you've just said. The morality if you want people to be fearful and insecure, because you want to gain." I said, "But you're also wrong. Because you're wrong in the following respect: People who are insecure and frightened don't engage in politics, they don't engage in society. They've got too many things to worry about. If they have basic security they're more likely to stand up and fight for rights. More likely to stand up and fight for the ecology. More likely to be good citizens. Why don't you trust people more? Why are you so bureaucratic and distrustful? Believe it. We need a new distribution system. And don't tell me neoliberalism is going to destroy it. They're destroying what we've got anyhow. We can do better than that and if you deny," you, people who say this not you but people who say that, "you're denying the Enlightenment freedoms that we should be fighting for." So I say stop being so negative to those people.
Sorry. I was bit angry but I apologize.
Moderator: You've got all reason to. A question from the Internet.
Audience 3 (via reader): There was a popular vote in Switzerland on basic income and it was massively rejected. How do you analyze that? What should be the way forward? And how can we gain leverage against the populace that oppose basic income?
Standing: I again address that particular referendum. I participated in the referendum. We had no money. We mobilized 125,000 signatures, literally going in the streets. All the banks were putting up money. The main political parties were opposed, etc. But we were doing fantastically well. We got up to about 40% opinion poll support. [applause] And then one of our leaders without permission from any of us went on television and an interviewer asked him, he said, "Well how much do you think the basic income should be?"
And the man instead of saying it's up to Parliament and everything, which is what the referendum said, he said it should be 2,500 Swiss francs per month. Which for your information is considerably higher than all the rural areas, the rural cantons, in Switzerland. At that moment, we lost the referendum. We lost.
I'm proud of the fact that in Geneva we got 38%, and that was where I was campaigning. It had nothing to do with me but the fact was that they had more meetings and more people could understand what the politics were. But the greatest thing about that referendum is that today, people in Switzerland in the Auberge, in the cafés, they're talking about basic income—they know what it means.
I gave a talk recently in a big theater in Geneva—there were hundreds and hundreds of people. Many of those had not participated. If there is another referendum, I think it will succeed. Switzerland has a history of even very mild ideas losing in the first referendum, and then a few years later a second referendum they pass. So I'm actually optimistic that it will come in Switzerland.
But not 2,500.
Audience 4: I think a lot of the ideas you presented here are like, respected in the community and here on Congress, but how can we change the society? How can we change the mind of all the other people to also consider these ideas to transform to a new society?
Standing: I think this is the biggest question you could ask. I strongly believe that it's up to us. It really is up to us. Politicians have spaghetti in backbones. Our job is to strengthen the spaghetti. Our job is to display why dreaming of the impossible leads to becoming possible, and then happening. I believe that we have to be taking part in any small way we can.
I will tell you a secret. Yesterday a very good friend of mine, an economist, very well-known economist, he contacted me and we were talking and he said, "Guy. Why are you wasting your time going to Leipzig on December the 27th when you should be having relaxation with Christmas?"
And I said, "John, that's not it. I hope the just one person, just one, will leave this room with more energy and with more thought than when I started. Just one." That would be worth coming to Leipzig. I feel energized, I hope somebody here feels energized. We have to realize that it is up to us—we have no excuse for cynicism. We have to challenge the Trumps. We cannot let them win. For our children and grandchildren, we can't let them win.
Moderator: Thank you very much. I think you'll be around for more questions. We're out of time—
Standing: I will of course be available.
Moderator: But, you can ask those questions directly and I think they will be answered in great length.
Standing: Okay. Thank you.