On Neo-Liberalism, Populism, and the New “Dangerous Class"
What follows is Guy Standing’s contribution to a debate on Rethinking Populism, a project of openDemocracy, a UK-based independent global media organization that seeks through reporting and analysis of social and political issues, to educate citizens to challenge power and encourage democratic debate across the world.
Transformations tend to go through several preliminary phases. In Britain, the ‘dis-embedded’ phase in the development of industrial capitalism involved the Speenhamland system launched in 1795, the mass enclosures that created a proto-proletariat, and disruption by a technological revolution. All this prompted a period of primitive rebels – those who know what they are against, but not agreed on what they are for – in which protests were mainly against the breakdown of the previous social compact.
Those included the days-of-rage phase that culminated in the mass protest in Peterloo in 1819, brutally suppressed by the state, and the Luddites, misrepresented ever since as being workers intent on smashing machines to halt ‘progress’, when in fact what they were doing was protesting at the destruction of a way of living and working being done without a quid pro quo.
In my A Precariat Charter written in 2014, sketching a precariat manifesto for today’s Global Transformation, I concluded by citing the stanza from Shelley’s The Masque of Anarchy, written in reaction to the Peterloo massacre. Jeremy Corbyn was later to cite it in his campaign speech of 2017, which James Schneider recalls in his contribution to this debate. Shelley expressed it in class, not populist terms, as I did, in my case signifying that the precariat was evolving as a class-in-the-making. Corbyn seems to have expressed it in support of a left populism.
Until his drowning at an early age, Shelley along with Byron and other artists of that era, including Mozart, were railing against the bourgeoisie, which is why Mozart and Byron were both drawn to the Don Juan/Don Giovanni theme. The Romantics failed to arrest the march of industrial capitalism but their art put out a marker for the future counter movement.
The UK and ‘decent labor’
The trouble was that at the time the emerging mass ‘working class’, the proletariat, had not yet taken shape as a class-for-itself, and was not ready to do so until late in the century. Three other primitive rebel events should be read into the narrative – the pink revolutions of 1848, often called the Springtime of the Peoples, wrongly seen by some at the time as presaging the proletarian revolution, the brave prolonged activities of the Chartists in the 1830s and 1840s, which advanced the cause of political democracy despite defeat, and the upheavals in the 1890s that the left have tended to underplay.
The latter marked an enormous historical error by ‘the left’. It is why the term ‘dangerous class’ was in the sub-title of my The Precariat: The New Dangerous Class, published in early 2011. Although some Marxists have used it to describe the ‘lumpen proletariat’, the term ‘dangerous class’ was used in the nineteenth century to describe those who were in neither the bourgeoisie nor the emerging proletariat. They were the craftsmen, artisans, street traders and artists, from whose ranks came the leading figures articulating a version of socialism as rejection of laborism – freedom from labor, freedom to work and to leisure (reviving ideas of ancient Greece, embracing schole).
In the 1890s, against William Morris and colleagues, including some anarchists, who championed that emancipatory vision, were the laborists, state socialists, Fabians and others who wanted to generalize decent labor. By the turn of the twentieth century, the latter had triumphed and marched forward in labor unions, social democratic parties and Leninism, even though most of the first batch of Labor MPs in 1906, when asked by an enterprising journalist what book had most influenced them, mentioned John Ruskin’s Unto This Last, not anything by Karl Marx.
So, we should interpret what Karl Polanyi was to call the Great Transformation as beginning with a period of dis-embeddedness, when the old social formation with its specific systems of regulation, social protection and redistribution was being dismantled mainly by the interests of financial capital, guided by an ideology of laissez-faire liberalism. This produced growing structural insecurities, inequalities, stress, precarity, technological disruption, debt and ecological destruction, culminating in an era of war, pandemics – most relevantly, the Spanish flu of 1918-1920, which may have killed 50 million people – and the Great Depression.
The re-embedded phase came after 1945, with European welfare states, shaped by Bismarckian and Beveridge systems of social security and the Swedish model crafted by Gosta Rehn and Rudolf Meidner. This transformation marked the triumph of laborism, of the industrial proletariat.[i] It was not marked by populism. Its political leaders and intellectual architects were as uncharismatic as you could imagine.
The Great Transformation ran into the sand in the 1970s, by when de-industrialization had frayed the proletariat as a mass social force. The trouble was that the mainstream left were trapped by their own history. They had built what is often called, misleadingly, les trente glorieuses, but, like Polanyi himself, they implicitly had a teleological perspective rather than a dialectical one. For too many of the mainstream left, the Transformation was essentially complete. The rest was a matter of defending what had been gained and fine-tuning the welfare state and state ownership of the means of production. But laborism was increasingly reactionary, in both senses of that word.
This was brought to a crisis in the cauldron of radical ‘primitive rebel’ protests in 1968. Once again, those participating in the upheavals knew what they were against but had less unity or clarity in articulating what they were for. Again, this was not a populist moment, it reflected the breakdown in the post-1945 social compact and the protest of elements of the dangerous class that despised dour laborism as much as capitalism. The bourgeoisie looked on with horror and disgust.
The loss of public energy and unity after 1968, and growing ‘stagflation’, created fertile ground for the emergence of the dis-embedded phase of the Global Transformation, the painful construction of a globalized market society. With due respect, interpreting what has happened in terms of populism is a distraction.
From neo-liberalism to rentier capitalism
The Mont Pelerin Society that groomed the economic and political leaders of the 1980s between 1947 and 1979 could be called ‘neo-liberal’, in that they believed in free market capitalism, financial and capital market liberalization and extreme individualism. Undoubtedly, they and their politicians, notably Thatcher, Reagan and others listed in The Corruption of Capitalism (second edition, 2021), were advocates of global capital and vehemently against the proletariat.
Many commentators forget that Thatcher was an accidental leader, who never gained the support of a majority of the electorate.[ii] Intense class conflict ensued. Key events were the miners’ strikes in Britain and the defeat of the air traffic controllers in the United States. The miners’ strike was doomed from the outset, but represented the protest of the dying class, standing up, or going down, with dignity. Those who defied the state deserve our respect.
Here we come to the first crucial point I wish to make in this article. The ideology used to break the old social formation was what we now call neo-liberalism – known in its various guises as the Washington Consensus, the Chicago School, shock therapy and supply-side economics. It corresponded to the ideology guiding the dis-embedded phase in the Great Transformation. But neoliberalism does not define the system that it forged. It was a destructive ideological tool, the hallmark of which was virulent determination to dismantle all institutions and mechanisms of social solidarity, the benchmarks of ‘the left’, on the grounds that they stood against the market.
Neoliberalism essentially died in the 1980s as a political project. By then it had done its work. It had laid the ground for financial capital to take control from national production capital. The Big Bang in the City of London symbolized that moment, although reforms in the USA and elsewhere preceded it. Multinational financial and corporate capital then forged the hegemonic system of today – rentier capitalism. This in turn, as in previous dis-embedded phases in the evolution of capitalism, ushered in a new class structure with new class tensions.
We will come to those later. First, a few words on rentier capitalism. It represents the triumph of private property rights over free market principles. Contrary to what neo-liberals claim, it is the most unfree market system ever constructed. More and more of the income flows to owners or controllers of property – financial, physical and intellectual. The income and wealth gained are forms of rent, not profits from production or wages.
Indeed, another error of the mainstream left was to think neoliberalism ushered in a ‘deregulated’ labor market. As argued elsewhere, the labor market is more tightly regulated than in the social democratic industrial capitalism era. It is just that it is regulated in favor of capital, and the mainstream left helped to make that happen.
There is no space here to go into the contours of rentier capitalism.[iii] But a key point for political action in the coming period is that a transformation can only be forged if one understands the structures one wishes to see transformed. A focus on ‘neoliberalism’ gives rentier capitalism a free pass.
Borrowing from the philosophy of science, we may say that a paradigm will not be displaced by a new paradigm until the existing one prompts questions that its practitioners cannot answer and a new paradigm exists to fill its place with a bevy of advocates and practitioners capable of implementing it.
This should remind ourselves of the nature of political transformations. Rentier capitalism is the latest form of capitalism to ‘negate’ the pursuit of Enlightenment values, encapsulated in its trinity of freedom, equality and solidarity. In that regard, Chantal Mouffe correctly refers to ‘struggles for equality and liberty’ and calls for a ‘deepening of democracy’. One should also emphasize a need to ‘deepen solidarity’, through promoting new collective bodies, as is recognized in Spyros Sofos. However, the immediate challenge is to achieve ‘the negation of the negation’. This is an ontological perspective, not a teleological one. We may not be able to define precisely what type of society we wish to create in the longer term, but we should be able to see what the near Future could be.
This point relates to another historical error of the mainstream left, that is, twentieth century social democrats. They lost a sense of the Future. They became reactionary, at best promising to restore Yesterday.
The precariat in the global class structure
This leads to the class structure generated by the combination of neoliberalism and its progeny, rentier capitalism. It is a globalized class fragmentation superimposed on earlier class structures, which always linger. Very briefly, we should define classes by three dimensions – distinctive relations of production, distinctive relations of distribution and distinctive relations to the state. It is essential to define classes in this multi-dimensional way in order to escape both from the old pseudo-Marxist dualism of the bourgeoisie versus the proletariat (or worse, working class) and the phoney dualism of crude populism of ‘the people’ versus ‘the elite’ (or establishment).
In descending order of income and state power, at the top is the plutocracy, below which is an elite, and then proficians and the salariat. These are defined in detail elsewhere. The crucial points for this contribution are that all are recipients of rentier income and all are objectively and emotionally detached from existing welfare states. It is sometimes overlooked that the salariat – those with salaried employment, occupational pensions, houses and shares – have done very well during the rentier capitalism era, gaining from one of its outstanding outcomes, asset price inflation.[iv]
All this means, in turn, that the top strata – perhaps accounting for 30% of the population – have little inclination materially to defend wages, labor standards or state benefits, unless driven by fear of losing their privileges from the rage of the advancing sans culottes.
Below those groups is the old proletariat, for whom labor and social democratic parties and labor unions were built, and whose interests were advanced globally by the International Labor Organization. The key point for this discourse is that the proletariat was subject to proletarianization, to the disciplines of stable full-time labor, and to fictitious decommodification, in that the money wage shrank as a share of social income, with more coming as non-wage benefits and entitlements, giving them labor security. It was not real decommodification, since workers were obliged to sell labor (effort and time) in order to obtain those entitlements or be married to someone who was prepared to do so.
For the proletariat, the norm was and is to be in a stable job. There is nothing laborists love more than to have as many people as possible in jobs. They romanticize being in a job, promising Full Employment, and quietly resorting to workfare. They conveniently forget that being in a job is being in a position of subordination and fail to recall Marx’s depiction of labor in jobs as ‘active alienation’.
The hallmark of the proletariat’s relations of production was employment security, not job security, in the sense of what work or activity one does.[v.] As for their relations of distribution, those in the proletariat are, as a norm, neither rent-recipients nor structurally exploited by rent mechanisms, unless in the process of falling into the precariat.
This leads to what is the emerging mass class of rentier capitalism, the precariat, below which is a lumpen category cut off from society, without an active role. The precariat’s distinctive relations of production include having unstable, insecure labor, having to do a lot of work that is not labor, including work for the state, having no occupational or organizational narrative to give to themselves, and being exploited and oppressed off workplaces and outside labor time as much as within them.
More of them are being drawn into platform capitalism, as ‘concierge’ or cloud taskers, controlled and manipulated by apps and other labor brokers. Above all, they are being gradually habituated to precariatization, told to put up with a norm of unstable task-driven bits-and-pieces existence.
The distinctive relations of distribution are that they must try to survive solely on low, volatile and uncertain money wages, with few if any non-wage benefits or assured state benefits, while being subject to onerous exploitation by rental mechanisms, living constantly on the edge of unsustainable debt. The insecurity experienced is unlike the norms of the proletariat, being characterized by chronic uncertainty and fragility to unpredictable but common shocks.
Those characteristics are bad enough. But it is the distinctive relations to the state that most define the precariat. The precariat are denizens rather than citizens, meaning that they are losing or not gaining the rights and entitlements of citizens. Above all, they are reduced to being supplicants, dependent on the discretionary benevolence of landlords, employers, parents, charities and strangers, showing them pity.
We should reject the idea that the era of rentier capitalism is creating generalized precarity. The etymological root of precariousness, from the Latin, is ‘to obtain by prayer’. That applies to the precariat, not to the salariat or elite. We should also avoid talking about ‘precarious work’ when what is meant is insecure or unstable labor. This leads to false political vocabulary and policy prioritizing.
Now, in indecent haste, let me recall that the precariat is still a class-in-the-making, not yet a class-for-itself, in that it is split into three factions. The first is what can be called Atavists, that is, those who have a sense of grievance around feelings of a lost Past. This part is linked to the declining proletariat: it recalls that themselves, their parents or their communities had a secure Yesterday, which they want back. This fraction, unless offered an alternative progressive paradigm, listens to the sirens of neo-fascism, or pluto-populists, who present themselves as charismatic leaders, promising to bring back ‘greatness’, sovereignty and so on.
In effect, there is scope for reactionary alliances between elements of the plutocracy, the proletariat and the Atavists in the precariat. But it would be a mistake to ignore the class base of such alliances. Donald Trump epitomized the rentiers; he used anti-establishment rhetoric but jealously preserved and advanced the interests of the rent-seeking plutocracy. He never followed a neo-liberal economic agenda. He stood for mercantilism in foreign economic strategy and for rentiers eager to plunder the commons domestically, while pursuing a pluto-populist fiscal policy. It is better to see his era in Gramscian terms, a malignancy of a class-based system in deepening if not terminal crisis.
The second faction in the precariat is the Nostalgics. Made up largely of migrants and minorities, these are the real denizens, their sense of relative deprivation deriving from the fact that they lack a Present, not feeling at home anywhere. This group is suffering loss of all forms of commons – civil, cultural, social, natural and knowledge – but its frustrations only boil over on days of rage, when the pressures they endure become unbearable. Crucially, they are disenfranchised, emotionally and literally, not seeing a political movement or vision offering them a real Present. But they will not support a neo-fascist populism. They will only be mobilized by a progressive vision of a Future, in which their citizenship rights will be advanced.
The third faction is the Progressives. This group tends to be young and relatively educated. Going to school and university or college they were promised by parents, teachers and politicians they would have a Future. They emerge without one, except an insecure one burdened by debt stretching into the future and suffering from a precariatized mind, loss of control over time.
This group will not vote for neo-fascism either. But they do not long for the Yesterday of the tired left either. The most memorable piece of graffiti on a wall in Madrid in the days-of-rage events in 2011 was, ‘The worst thing would be to go back to the old normal.’ The trouble was, and still is, that the mainstream left neither attempted to understand the precariat nor offered a Future. As Beppe Grillo so memorably mocked, they were ‘dead men walking’.
So, naïve anarchism and populism took over the primitive rebels’ phase of the countermovement, in the shape of the Movimento Cinque Stelle in Italy, Podemos (‘we can’) in Spain, adopting the vacuous slogan of Barack Obama, and the Occupy ‘movement’ in many countries.[vi] The latter were the ‘primitive rebels’ phase again. Speaking in several of those Occupied meetings in several countries, it was sad to see the energy being dissipated as populism produced a muffled set of messages, of grievances, of frustrations, but not of direction.
What would the Future look like? Believing that any Transformation must be led by the needs and aspirations of the emerging mass class, and that the ‘vanguard’ must be the progressive part of that class, in 2014 I asked myself the impertinent double question: If there were to be a manifesto or charter for the precariat, what would it look like and how would it differ from one for the proletariat, had there been one, one hundred years ago?
Mainstream political parties and movements were not doing that exercise, because they had either gone atavistic – promoting warmed-up laborism and jellified Third Wayism – or had gone populist, in talking vaguely but in a PR mode of ‘we, the people’ against ‘the 1%’ or ‘for the many, not the few’. If you do not identify the emerging mass class, you are rather unlikely to identify the priority policies you should be promoting, or the vocabulary and imagery you need to be using to mobilize those who see themselves in that class or likely to be in it or having relatives and friends likely to be in it.
In framing a Precariat Charter, a fundamental understanding had to be kept in mind. The precariat are not just Victims. They are not defined just by defeat and pity. They are defined as well by interests, aspirations and passions.[vii] So many commentators focus exclusively on their victimhood. But we should always remember that an emerging class wants particular changes, which evolve in action, as the vision crystallizes.
Ontologically, the negation of the negation means creating a new Today by overcoming barriers to the realization of the aspirations of the emerging class, creating a social structure that can presage a new Tomorrow, which may not be imaginable or visible when we are in a mess. We can, realistically, only paint the Future as the next transformational stage on an unfolding journey. This is surely one of the lessons of the failed ‘left’ experiments of the twentieth century, of getting ahead of oneself, of then sliding into the optic of ‘the ends justify the means’.
Reinventing the future, in class terms, has always been the primary task of ‘the left’. So when it came to framing a Precariat Charter, it seemed appropriate to take as a guiding principle the adage of Aristotle that only the insecure man is free. That means we must not be stuck in the old sense of security, even though it is a human need to enjoy basic security.
The Precariat Charter was based on analyzing the characteristics of the precariat, listening to self-declared members of it in what were over 400 presentations in 40 countries, reading the thousands of emails from readers or listeners and, above all, recognizing that a Charter had to combine elements to ‘right wrongs’ and elements for institutional changes needed for an aspirational Future.[viii]
What emerged, rightly or wrongly, was a set of 29 policy or institutional reforms that were markedly different from what a proletariat charter would have looked like and from what was being advocated by either the populist left or social democratic left parties, then or now.
The strange death of left populism
In 2016, I had the privilege of being invited by John McDonnell, the Shadow Chancellor of the Exchequer, to be one of his economic advisers, remaining so until after the General Election of December 2019. He understood the precariat, as well as my emphasis on the centrality of the commons in a transformative vision. He repeatedly assured me that he would deploy the vocabulary and agenda all that implied. But he just could not do so. He did openly advocate a basic income, as I had urged him to do, and he publicly backed my report for the leadership on piloting basic income, as did the previous Labor leader, Ed Miliband, as well as the Shadow Ministers with the relevant portfolios. However, the Labor bureaucracy showed no interest, let alone engagement.
The left populism of which James Schneider writes in his contribution to this debate was trapped in its laborism, its diagnosis of the nature of ‘the enemy’ and a lack of awareness let alone understanding of the precariat. One problem was that leading figures in the insurgent group, Momentum, were atavistic laborists; another was that labor unions thought that the problem was reducible to reintegrating those in ‘precarious labor’ (sic) into the unionized proletariat. The team around Jeremy Corbyn were also atavistic, focusing on ‘the Preston model’, nice but strangely peripheral to the concerns and aspirations of the precariat.
John McDonnell organized an event on the commons in the Speaker’s Chamber of the House of Commons, at which I was an opening speaker. The Chamber was packed, but nobody from Corbyn’s team was there. Ironically, in mid-2020, I was invited to give a webinar on rentier capitalism with Jeremy Corbyn as discussant/moderator. He was characteristically gracious and attentive, and ended by saying he was supportive of the analysis and prognosis. The tragedy was that a good man was in the wrong job at the wrong time, and had surrounded himself with laborists and those steeped in old class analysis.
There is one point on which to end this section. The defeats for left populism of recent years, in Britain and elsewhere, must be understood as a loss of vision. I warned in speeches in early 2016 that Brexit could be won and Trump could win because the Atavists and declining manual proletariat would support them, while most of the Nostalgics were disenfranchised and while the Progressives were disengaged and unenthused. Left populists were failing to be popular enough.
What transpired is that in Brexit, the Progressives in the precariat were confronted by one side offering Remain coupled with the prospect of more years of austerity and the other Leave side promising an unedifying retreat into nationalism and bourgeois rule. Confronted by such a choice, most stayed at home. A similar pattern allowed Trump to win, albeit with a minority of the actual vote. Something similar happened in the 2017 General Election in Britain, despite Corbyn’s mobilization of many motivated by anger and frustration, and a similar pattern happened even more strongly in the 2019 General Election.
Similar drifts into losing causes have characterized the populist left in continental Europe, with Podemos shrinking into a reformist package, with M5S mired in its unresolved class base, and with social democratic parties struggling to hold onto dwindling shares of the electorate.
The good news is actually quite encouraging. The right is winning with a dwindling share of the vote as well. In Britain, the Conservatives gained a landslide victory in December 2019 with the support of just 29% of the electorate, and with most of those elderly. Meanwhile, everywhere, the size of the Atavist faction of the precariat has almost certainly passed its peak, while the Progressive numbers are mounting every day.
The challenge before us is that if we want a Green Left Transformation we must forge a cross-class alliance built around the aspirations of the Progressives in the precariat, a revival of the commons and a green-blue vision of a sustainable balance between humanity and nature. William Wordsworth’s words from The Prelude come to mind:
“Bliss it was in that dawn to be alive
But to be young was very heaven.”
Put in modern parlance – everything is up for grabs.
Notes and references
[i] I have called this the era of industrial citizenship, due to social ‘rights’ being linked to industrial-style labour. This labourist model should be contrasted with an emancipatory one around occupational citizenship.
[ii] This author recalls going on a London tube in 1985 and seeing daubed in black paint along the adverts, ‘If Maggie’s the answer, it must have been a bloody stupid question.’
[iii] That is done in Standing, 2021.
[iv] This makes it problematic to claim that ‘precarisation is afflicting all’ as Azmanova suggests, whatever meaning one gives to ‘precarisation’.
[v] Although I have explained at length the difference between the seven forms of labour-based security, many writers still treat employment security and job security as synonymous, thereby missing a key factor in the debate on the precariat.
[vi] Of course, one populist party did temporarily gain office, Syriza in Greece, mentioned by Spyros Sofos and Didier Fassin. Probably, the less said about Syriza the better. Its self-centred leader, Alexis Tsipras, said arrogantly, ‘Defeat is the battle that isn’t waged…..Lost battles are battles that are not fought.’ Then, he surrendered without putting up any fight worthy of the name.
[vii] In a different context, this was brilliantly understood by the great political economist Albert Hirschmann, The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph.
[viii] The Precariat has been translated into 23 languages, which has led to nearly a decade of emails from around the world. It should be stated that many of the 400 presentations came after the Charter was drawn up. They have generally confirmed the articles, although no doubt there would be differences, particularly of priorities, if the book were to be written now. Some of the themes went forward into Plunder of the Commons: A Manifesto for Sharing Public Wealth.
[Guy Standing is Professorial Research Associate, School of Oriental and African Studies, University of London, Fellow of the UK Academy of Social Sciences, and co-founder and honorary co-president of the Basic Income Earth Network (BIEN). He is the former director of the International Labor Organization's Socio-Economic Security Program, responsible for reporting on global socio-economic security and the Decent Work Index. Among his latest publications are Basic Income: How We Can Make it Happen (2017), and The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay (2016).]