Wednesday, 20 May 2020

The Wage Slave Model of Capitalism

Pretty much everyone in the western world has in mind a wage-slave model of how economies work, the emphasis being on 'wage'.  You (and/or your spouse) get a regular job with an employer for a regular wage, a degree of security and stability, perhaps even prospects; and other benefits besides - some financial, and some social (the companionship of colleagues etc).   The job, or perhaps a succession of jobs in a serial-monogamy manner, will see you through to retirement, hopefully with not too many unwanted episodes of unemployment along the way.  

More recent developments like zero-hours contracts and the gig economy are widely seen as a baleful departure from this ideal, dragging people into membership of the 'precariat' (and ignoring aspects such as (a) quite a few people enjoy the flexibility of piece-work; (b) many Labour councils are at the forefront of zero-hours; and (c) some of our wealthiest and most glamorous citizens operate in this manner, from choice.  OK, not very many in the grand scheme of things.  But it's how I've operated for many years**, following on from an early career of a more conventional type.)

Easily forgotten, then, that at the first flowering of the industrial revolution, the wage-slave model was itself widely viewed as an abomination, and a dangerous one at that, putting the entire economy at risk.  How so?  I was reminded of the issue by a recent BTL comment from our friend Andrew:
We may be going back to the pre-industrial revolution days where it was normal to wfh. Some of the nicer terraced houses in Weston Super Mare still have large workshops at the end of the garden. Back in the day, that was where the artisan did his/her work^^.
It's a bit more complicated than that.  Prior to the introduction of the factory system, large quantities of properly marshalled labour were periodically required, regular examples being for the harvest, and for war.  But other large-scale projects (inevitably labour intensive) were conducted as well: the construction of large buildings, canals, drainage schemes, country parks.

Able-bodied people - mostly of course, a rural population - lived primarily in smallholdings++.  They had various basic skills, often crafts, and of course they represented a "reserve army" of raw labour since routinely they were more than somewhat self sufficient at the margin, if not strictly subsistence farmers.  When a project was in the offing the menfolk could fairly readily drop what they were doing (a bit of work around their plot or in the little workshop), leaving that to the wife and children, and for several months, if needs be, go off and sell their services to someone who could make profitable use of them, be that commercial or the in the King's pay for a summer's campaigning season.  When times were quiet they would return to their homes.

As a socio-economic system, this had tremendous flexibility.  The theoretical fear was that by taking adults away to the newly expanding towns and cities to work 60-70 hours a week exclusively for one employer, all flexibility and social resilience would be lost.  Somebody could no doubt explain how this danger was mitigated in the industrial transformation that brushed past all objections (there were of course moral as well as economic dangers foreseen by many - not least concerning how many people, newly-rich and poor, would no longer go in fear of the lord of the manor).  We know, however, the transition was made triumphantly if not painlessly.

I haven't formed a theory of how this pertains to 2020.  But it's an interesting input.  As you know, along with our good friend Sackers I'm always intrigued by questions relating to flexibility / resilience vs efficiency.  What's the perfect balance?  Difficult to assess.

** and you know how glamorous I am
^^  a neighbour of mine who was a silversmith worked in that manner until around 1990; and my next door neighbour today, a prosperous IT developer, has always worked mainly from his converted garage at the end of the garden
++ when I was first a local councillor (in a London borough), my ward still contained a number of smallholdings on a peripheral site of 15-20 acres - people living in railway carriages and the like, on plots like glorified allotments.  They were all bought out for a housing development after only a couple of years of my tenure


E-K said...

It's not going to be pretty. I just hope to god someone in government is working on food rations right now.

How we get *there* is a matter for another day but my whole reason for being anxious about mass immigration was precisely this sort of scenario. Similarly the outsourcing of work and industry too which has left us most vulnerable.

To allow mass immigration to continue in light of recent events is a direct assault by government on its own people and will be seen as such by simplistic souls such as me, aka the majority.

david morris said...

Interesting as ever, ND.

There's nothing in this Brave New Chinese Virus World that would mitigate against the return of the relationship previously "enjoyed" between Lord & Serf.

Anonymous said...


I see mankind as a herd of cattle inside a fenced enclosure. Outside the
fence are green pastures and plenty for the cattle to eat, while inside the
fence there is not quite grass enough for the cattle. Consequently, the
cattle are tramping underfoot what little grass there is and goring each
other to death in their struggle for existence.

I saw the owner of the herd come to them, and when he saw their pitiful
condition he was filled with compassion for them and thought of all he
could do to improve their condition.

So he called his friends together and asked them to assist him in cutting
grass from outside the fence and throwing it over the fence to the cattle.
And that they called Charity.

Then, because the calves were dying off and not growing up into
serviceable cattle, he arranged that they should each have a pint of milk
every morning for breakfast.

Because they were dying off in the cold nights, he put up beautiful
well-drained and well-ventilated cowsheds for the cattle.

Because they were goring each other in the struggle for existence, he put
corks on the horns of the cattle, so that the wounds they gave each other
might not be so serious. Then he reserved a part of the enclosure for the
old bulls and the old cows over 70 years of age.

In fact, he did everything he could think of to improve the condition of
the cattle, and when I asked him why he did not do the one obvious
thing, break down the fence, and let the cattle out, he answered: "If I let
the cattle out, I should no longer be able to milk them"

dearieme said...

My father ran a family business that had existed for nearly two hundred years. The theme that ran through those years was the effort needed to hire and keep good employees.

Consequently I've always been suspicious of the Lords and Serfs model of firms. Is it the whinge of those who aren't good employees?

Anonymous said...

"when I was first a local councillor (in a London borough), my ward still contained a number of smallholdings on a peripheral site of 15-20 acres - people living in railway carriages and the like, on plots like glorified allotments. They were all bought out for a housing development after only a couple of years of my tenure"

Sounds pretty interesting. The Good Life on a much larger scale. I suppose they'd been there since pre-industrial times, and managed to hang on? Were they forced out, or did they (or their heirs) sell up freely?

If anyone has any more information on this, I'd love to hear it.

Raedwald said...

It was back in 1980 that Alvin Toffler coined the term 'prosumer' - commons-based peer production - when it was treated as an interesting notion but a bit, well, West Coast. Now, with overweening regulation, frightening legal risk, anti-globalism and the catalytic effect of the Wuhan virus, together with stuff such as 3D printers and the web, we may be in for a mega societal shock. The old employment models are no longer sustainable.

We may also be looking at whole new range of marketable skills that owe nothing to mass-manufactured degrees. It could become a William Morris wonderland - the primacy of craft skills, small scale production and co-operative consumption, collapsing the old models of consumer capitalism. Those with STEM skills could be pre-eminent.

Homes with land, workshops, access to resources will become valuable, and we will open our eyes to Localism. On that final point, I got my annual bill, payable in four quarterly installments, for water, sewerage and refuse collection last week.

The water comes from the mountain and is collected in three sand-filter tanks at about 1200m and fed to our 967 properties by gravity. No other treatment. Sewage is treated in 7 micro-plants along the valley. The refuse freighter winds its way around the alpine hairpins once a fortnight to empty our tiny (by London standards) 80 litre wheelie bins. The cost? somewhere between a quarter to a third of the cost I paid in London. There are not always economies of scale, and I hope we will learn that small is not only beautiful but can be very much cheaper also.

I'd recommend both Toffler and EF Schumacher, and Richard Mabey's 'Food for Free', another '70s classic, is also good reading. I'm going to enjoy all this ....

Nick Drew said...

@ Were they forced out, or did they (or their heirs) sell up freely?

Don't know, anon. Don't even know what basis their tenure was.

Highly unlikely they were CPO'd: no public-interest issue. The private developer who built housing on the land (Wates) had been building towards them steadily over the previous decade, and it's likely they (or their landlords?) were the last hold-outs. Probably got excellent prices, whoever were the freeholders, in order for Wates to finish the estate.

Some of the strange arrangements you find, turn out to have been wartime expedients (I can show you a bunch of quirky wartime and just-post-war pre-fabs still standing in my area). The origins of these smallholdings were before my time, and the skids were under them before I became a councillor. It never gave rise to any issue that came to my attention - just an oddity.

Anonymous said...

Anon 5:55pm here. I remember reading Schumacher, not Small is Beautiful but A Guide for the Perplexed. It was full of insights, many of which I've forgotten. One I do remember is that the 'map' that we impose on the world, of what counts as having objective value, is extremely limited. Or at least that's the case for the map that officialdom (whether 'government' or 'private') allows us to have.

I'm certainly in doubt about economies of scale. Reality potentially contains an infinite number of conditions. Big businesses and governments must impose abstractions in order to be able to act at inhuman (I don't mean that pejoratively) scale. They then act on the basis of those abstractions. This leads to perverse outcomes, since abstractions, necessarily, ignore much of reality.

We see this in the absurdity of farmers in the States having to slaughter their cattle while there's a meat shortage in the supermarkets, as a result of meat processing plants being shut down. A small farmer could switch very quickly into direct-to-consumer (or direct-to-butcher) sales. This is impossible at the scale that the American food industry operates at.

I don't know if we're going to see any epochal changes as a result of this virus though. Yes, people will move to the suburbs, and gentrification of city centres might come to a screeching halt, but I don't see any large scale Back to the Land movement emerging from this.

E-K said...

Why move only as far as the suburbs ? Remote working means anyone can work from anywhere.

Anonymous said...

Anon 5:55pm here. @ Nick Drew, I mis-read your OP, I thought there were several people who had 15-20 acres all to themselves, and used it as their own allotment (essentially being self-sufficient in a London borough). Now I re-read it, and it doesn't sound quite so remarkable :)

@ E-K, hard to say, many aren't cut out for rural living, and it's hard to see planning permission allowing millions to move to greenfield land. People also want the convenience of suburbs, and don't like living too far from others.

There may also be the need to travel to the office once or twice a week, although that wouldn't limit people too much. Two hours each way is quite a lot even twice a week. I'm not sure though, you might be right, all bets are off at this stage.

Graeme said...

3 historical cases spring to my mind, but I won't comment much upon them because I might have misremembered.

1 Georg Hauptmann's play The Weavers deals with the plight of artisan weavers in Germany in the mid 19thc.,I believe, producing bolts of cloth while industrial scale mills were being built. A later version of the Luddites.

2 in WW1, armaments manufacturing concentrated on artillery, shells, rifles, machine guns. To cope with demand for pistols, both sides used the artisan pistol makers of Barcelona..... With fairly predictable results. Boom and bust and hugely variable and incompatible weapons and bullets.

3 the backyard steel furnaces of 1950s China, which produced useless low-grade steel

Anonymous said...

All hail the wonderful new site for finding British farmworkers!

Let's pick an employer and look for a job... how about SA Group?

"The company's mission is to be at the forefront of the produce industry, supplying quality produce at competitive prices, to delight our customers. In doing so, we strive to offer a high standard of employment to our agricultural workers who we welcome from all over the world."

Does that include the UK? Let's get in touch!

"please contact a member of the Recruitment Team:"

Nina Slavova
Mobile: 00 44 7772 557556

Kristiyan Georgiev
Mobile: 0044 7772 220217

Valya Stefanova
Mobile: 00 44 7772220212

Looks like a Brit will really fit in, as long as he has decent Bulgarian!

andrew said...

Why move only as far as the suburbs ? Remote working means anyone can work from anywhere.

...Many people want "Rus in Urbe"
Or more specifically
A 7-11 type place in easy walking, other shops and supermarkets / restauraunts / takeaways about 10-20mins walk.
And lots of open commons about the same distance.
And _really_ good broadband
And ready access to a big road to the rest of the uk
And an airport conveniently close that cannot be heard.

Not many want to to drive 30mins to buy some potatoes. The north of Scotland is lovely but...

Nick Drew said...

Your list is a good and logical one, andrew

but occasionally watching Escape to the Country I find that many people actually want

- space for their putative alpacas (which at least they can eat in a crisis)
- a remote location that will be the death of them when the first of the couple can't drive any longer
- no neighbours they can actually see from their house (see second point above)
- a Belfast sink (FFS!), the wooden slats of which will harbour the bacteria that hasten their demise
- enough bedrooms for people who'll never visit, but which will render the house costly to heat
- some ludicrously impractical "special feature" that will make them consider the are living in a Grand Design
- a vast precipitous garden leading to the said alpacas

I do acknowledge that they also want an outbuilding with first-rate broadband where 'he' can pursue some bizarre hobby he plans to occupy his time with ... (no sniggering in the back there, Kev)

andrew said...

I think the celebrity you just described called it 'research'.

I have grape vines as you do not need to feed them. Approached by some v.v. precipitous steps.
A little sainbury's is directly across the road. In the old days we used to sit out on warm evenings and look at what people were buying at 9pm on a saturday (plotspoiler - cheap booze). Now we see who is not properly socially distancing in the queue for some easy righteous disapproval tutting and then when there is no queue, skip on down and buy some reduced kiwi fruit.
My Belfast sink is about 100 and is a petri dish that has made me immune to almost all bacteria.
There _were_ too many bedrooms but one is an office (for OH) and one holds all that stuff you want to give to a charity shop but they are all shut.
No special feature, but do have a damp back passage (where I am now) that is by the wine cellar.

(... and _very_ good broadband)

I feel like I am being watched.

Nick Drew said...

Oh, I didn't mean Kev McCloud, I meant our very own E-Kev ...

(who'll be along directly to make a sage observation abt your damp passage)

Raedwald said...

I can tick several of those boxes, Mr D - blistering broadband (to join meetings of my constituency party), two barns and acouple of acres, heating and cooking using local sustainable beech, tons of space including an old chapel (does that qualify as a special feature?), comprehensively equipped workshop, national Park and hiking trails on the doorstep, no neighbours within 400m but a 3mt drive to the local Spar, nearest station 2km, choice of regional airports.

But no Belfast sink (bloody things are only good for planting geraniums in) and no Alpacas - I'm a Soay sheep, Copper Marans and bee chap. And I take great pleasure in turning down any work for which I need to spend more than two or three days a month in London.

Forgive me for being a smug git - I've somehow always managed to be ahead of the curve.

Anomalous Cowshed said...

If resilience becomes a key metric - for investors/owners, consumers/customers, employees - the efficiency probably drops. For "overly" centralised firms anyway.

First up; the spread of the virus is dependent upon the general inter-connectedness of all things, so networks. Higher numbers of cases are associated with higher population densities, but also higher GVA areas - the economic network within and surrounding an area, and you can probably find maps that show cases along transport routes. The "avoid public transport" advice is probably a dead giveaway.

So, reduce the connections, or level of traffic on each connection, between network nodes. So everything gets local.

For retail, the large out-of-town stores with big car parks, look a bit silly. They could shift to click-and-collect, or scheduled delivery rounds rather than booked slots. Retail generally could start to look a bit Arkwright, everything behind the counter, and stores broadly may shift away from the specialist towards general, in the hope that they would be able to remain open in the future for goods deemed essential.

Smaller stores handle fewer customers within more closely defined geographical boundaries - there's the possibility that SARS-CoV2 just saved the Great British High Street - not necessarily for independents, but via the larger chains.

For manufacturing; I guess having the firm's CNC machine installed in your garage ain't going to happen. However, depending upon safety protocols, shift patterns could change - to include simple testing (temperature) or querying of shift members. If a "fail" turns up, call in the reserve. Which implies that the "reserve" is on-call. Total employment (and wages) rise as the reserves are created, but individual average wages fall. Salaries might take on "on" and "off" patterns when paid.

At a guess, for certain sectors and functions, there's a metric fuck-ton of "why didn't we do this before?" going on for remote or distributed working. And here's where the fun might begin.

The kit that turned up (and the associated software licences) is an asset of the firm. But the employee is now supplying the workplace (and furniture and comms), at some rate (hours/days per month).

The possibility is that firms enter into joint ventures with those employees that can provide results at home. The firm provides the kit to make it work, and the employee provides other stuff. The employee incorporates. Both the employee and the firm have prior, segregated claims over the assets of the new entity - being equity. If the employee is working on a task/project basis, then weekly/monthly hours worked can easily become variable. The employee is able to bring in other firms for the same service or function, and can also form partnerships with other, complementary, "ex-employees". And quite probably substitute who works on which task for which customer and where and when.

Under this, "ex-employers" with equity in these new entities, have claims to future cash flows, dividends, paid from other firms. Those cash flows might be small, individually, but they'll add up - creating additional resilience.

This scenario most likely requires a higher degree of trust between manager/employee than currently exists, but the resulting inter-entity relationships are likely to be fluid, trust-based rather than upon formal contracts - and firms are networks of informal contracts, some of which might not be able to be formally specified anyway.

If this takes hold, the SME sector starts to look terribly Japanese, with formal and informal cross-holdings everywhere. Actual cash flows between these new entities are not entirely predictable - with the implication that Government income is also less predictable. Monthly income via PAYE shifts lower, while annual payments shift higher.

Public sector wages, particularly deferred wages, look borked.

Nick Drew said...

that's very thoughtful, Cowshed (no sarcasm intended)

TRUST is a fascinating issue (the Chinese are very hot on it, as is every commander who must delegate) - and/but the law is quite important, too

how you raise taxes in that world is an interesting question - well, income and profit taxes: I suppose land and consumption are always available to be hit, ultimately

the idle and the thickos are doomed in all this - and that's quite a number of our fellow humans. They depend on rolling up and having someone tell them what to do

if the world of work doesn't do that for them anymore, then the world of populist politics (and crime) will step in ... they'll even be given nice armbands

Charlie said...

Raedwald - being on the lookout for a similar sort of place (we're currently in a flat in north London, with two kids under 2 and a third on the way - it really is grim up north London), can I hazard a guess that you are near Melton?

Charlie said...

@Anomolous Cowshed "metric fuck-ton". I like it, and will make sure to use it in future conversation. How much is it exactly? Two average Yanks in bed together?

andrew said...

I think you may be looking for
the register online standards converter

Raedwald said...

Charlie - about 1,000m too low and 1,000km too far west ...

Anomalous Cowshed said...

Charlie - the Yanks are broadly Imperial, tho' they don't like to admit to it in polite conversation.

I have no idea. Many lots, I should imagine.

Andrew - do you realise that the area of the Lindisfarne Gospels is approximately 2.503 nanoWales?

Anomalous Cowshed said...

Nick - it may be thoughtful, but t'was also a bit long. Sorry, didn't have the time, etc etc.

Idle and thickos; bit harsh, but yes. The labour market is likely to segment into those who have the self-discipline or focus to be able to work with minimal supervision, plus the necessary skills, and those who don't. But there's lots of functions that can't be digitised and distributed effectively without introducing higher latency - shifting part- or finished goods about. Then again, a collapse in passenger numbers on the railways creates additional capacity for freight.

Trust is a curious thing, as someone can be good for a tenner, but I wouldn't let them drive my car. And there's who or what you don't trust. Consistency or predictability of behaviours. There's matching and sorting going on.

Laws get changed. Ethics change with technology. So it goes.

Anomalous Cowshed said...

Nick - taxes, consumption, stocks and the first buyer doctrine.

Funny old thing, but remember the slightly sharp practice of ground rents on new builds? Bit of a hoo-hah a few years back.
Also, the leasing model for car sales.

I tend to think of both as attempts to create claims over future cash flows. Rising prices for housing, or increasing life times for motors.

eBay and others collapsed the search cost for second-, third- etc hand goods. Those goods form household wealth. Everyone's a trader.

Doesn't really matter where it gets levied, but transaction taxes on those goods? There's a potential shift from taxing income to wealth.

Nick Drew said...

Some people have ferocious views on LVT. pro and con

(see Mark Wadsworth passim)

I don't. But I do like taxes that cannot easily be dodged. I always thought Osborne (an overrated git if ever there was one) missed a massive trick in 2010 - he should have increased significantly the number of top-end council tax bands. Simples.

@ attempts to create claims over future cash flows - I am sure books have been, or certainly could be, written on this. There is nothing like a good annuity stream. Software is a brilliant example of how a whole industry strove, and largely succeeded, in migrating from one-off licence fee to recurring payment

for a few years I moved from energy-proper to S/W for energy. We played all the tunes: upfront $$$ initial licence; installation fees; ongoing maintenance & upgrade subscriptions

what we never tried (because I refused to, based on sour experience) was fee-per-click. It was trading software. My previous firm, an energy co in the vanguard of trading, had been approached by a famous s/w vendor with a really excellent product, when trading had only just started (and we were still using .xls and Access). The only fee basis they were willing to discuss was per click. Having every intention that our transaction volumes were going to increase exponentially (which they did), we told them in ever-increasing metric fuck-decibels to forget this idea

they wouldn't, so ... no deal! & we developed our own (which you should never do - but we were way out in front, and knew exactly what we wanted)

Anomalous Cowshed said...

Yeah, MW is somewhat, fixated.

Software's the basic model here, indeed. One beauty is having customers pay for specific customisations, which eventually get "productized" (bloody Yanks), so you get paid more than once. Marvellous stuff.

Did famous vendor sell any on that basis? Sounds vaguely familiar.

Nick Drew said...

they didn't sell to any of the major players, all of whom had same objection: and the smaller players who did sign up, never had the volume of throughput to gratify the s/w vendor

we (qua energy firm, not my subsequent s/w co) were the only ones who seriously developed our own. In the interim, interestingly, we had some guys who could really make MS Access sing - the DB aspect is key to what's needed - and we knew exactly what spec we wanted. Ran with that for a surprisingly long time, before purpose-built stuff was ready

but that was unusual: generally speaking you should no more dev your own s/w for any commonly-practised activity than you should dev your own WP or DB - leave it to the specialists and share the debugging traumas with lots of other customers

Anomalous Cowshed said...

VB6 + DCOM + Jet was a marvellous combination. Throw in Excel and you were laughing. You could also do great stuff using Word on top of those as well (as long as it didn't fall over, or randomly forget the cursor position - but it's always been a bit of a pig).

80/20 innit? If you think you have a real advantage in the domain, always write the 20.

PushingTheBoundaries said...

@nd wasn't SAP by any chance was it?

@ac trouble with the Patento principle is that 20% is damned hard usually which is why peeps avoid it.

Nick Drew said...

No, not SAP

they tried half-heartedly, and utterly failed in the energy trading s/w market: it was a very specialised sector

the thing that fooled some of the early attempts was to think you could take some standard commodities trading s/w, cross out the word "copper" or "WTI" and insert "electricity"

but the unit of copper trading is the month: the unit of electricity trading is the hour, or the half-hour - that's two orders of magnitude difference

and the volatility of electricity prices is more like 3 orders of magnitude greater

s/w just doesn't scale like that, you gotta start again from scratch

us specialist vendors swept the floor with the old players just crossing out the old words