Tag Archives: class

Technofeudalism – Some Thoughts to Add to the Argument

Yanis Varoufarskis’ book, Technofeudalism: What Killed Capitalism, draws heavily on two books that I began this blog series discussing: Shoshana Zuboff’s The Age of Surveillance Capitalism and McKenzie Wark’s Capital is Dead: Is This Something Worse?. Given this background, I was more than interested to hear Varoufarkis talk at Adelaide Writers’ Week, and to read the book.

In my reading, Varoufarkis takes from Zuboff an understanding of the economic importance of digital data and the ability of corporations to nudge (or more) consumer behaviour to reshape the market and profit. From Wark, he takes the idea that this is more than a new phase of capitalism and is a different form of production.

My goal here is not to properly review the Varoufarkis’ book. Rather, after a brief explanation of the central thesis (skip to here you are familiar with it) I want to add some thoughts from my own theoretical journey in political economy which I think add credence, or at least possibility, to the concept of technofeudalism.

Book cover: Technofeudalism: What Killed Capitalism? by Yanis Varoufarkis

The Technofeudalism Thesis

To me, Varoufarkis takes the best of Zuboff and Wark, but goes beyond this and builds a more convincing argument by showing how control of data enables its owners to accumulate wealth (and political power) – essentially via rent drawn from the production and exchange which takes place in privately defined and owned spaces in the online cloud.

Just as feudal lords enclosed the commons and extracted a portion of the surplus for the right to live and farm on their estates, so too those who own the cloud fiefdoms (Amazon, Google, Facebook, etc) collect rent from all those whose business models require the public access to those virtual fiefdoms and the information generated within them. Capitalists seeking a profit are trapped in these new tech fiefdoms (because of the high price of exiting in loss of exposure, customers, and profit) in the same way that feudal serfs were trapped on the landlords’ estate.

But others have questioned whether this is really happening at scale and whether it is really not capitalism?

Varoufarkis has a variety of answers:

  • the fact that goods and services are still being produced in capitalist firms does not mean that capitalism is dominant, any more than the rise of a capitalist class in earlier centuries meant that agriculture and land rents disappeared.
  • the data that drives the system is formed from the capture of the thoughts, desires and needs of “cloud serfs” (all of us – knowingly or unknowingly) who provide the data for free.
  • This data capture can be expanded exponentially with little new investment, so financial return is not a return on capital, but rather a rental charge for others accessing this information and operating in this (privatised) space.

It is a dominance of rent over profit as the primary centre of accumulation that signals that capital has been supplanted.

Thoughts

1. Dominant Sectors

Weirdly, thinking about technofeudalism replacing capitalism took me back to historical debates I studied as an undergraduate many years ago. The question was how to characterise the Australian economy in the late nineteenth century. From memory, the traditional view of a predominantly pastoral economy (“riding on the sheep’s back”) was challenged by NG Butlin and others who, armed with Kenyesian economics and new national accounting tools, argued that manufacturing contributed more to economic production. However, those arguing in a Marxist tradition insisted on the need to look at the centres of accumulation and capture of state power as the defining dynamic, rather than the share of the economy. In this light, pastoralism and pastoralists remained hegemonic long after the rise of manufacturing.

I have no idea where these historical debates are at now, but the point here is that how we characterise the economy is theory-dependant, and that simple shares of GDP or workforce are not necessarily conclusive.

In this context, when the world’s richest people are those who own the largest slices of cloud capital, it is not unrealistic to question whether the cloud (and the rent from it) is the new centre and the dominant system, even while traditional profit-making industry is more widespread.

2. Cloud serfs and the definition of production and consumption

Varoufarkis’ technofeudal economy is inhabited by “cloud prols” and “cloud serfs”. The former simply appear to be super-exploited workers in an algorithm-dominated, but nonetheless capitalist production process (hence the proletariat label). However, it is the cloud serfs who take us beyond capitalism. The data collection by search engines and digital platforms is a direct appropriation of productive resources – not a market sale of labour power or other productive inputs which characterise the capitalist production process.

But are people using digital platforms (consumers of those digital services) really producing wealth or enabling the capture of surplus to drive a new economic system? It defies a most fundamental distinction in economics between producers and consumers. However, as I argued in my PhD, this distinction was always artificial – a product of a particular neoclassical theory which conflated work, production, the market and the economy, while households and non-market spaces become consumers.

This distinction is hardwired into our definition of the economy and the national accounts which describe it. Yet around half the goods and services produced in Australia are produced outside the market and market production itself consumes labour power which is produced in the household. In this circular flow between households and market production, the split between production and consumption is arbitrary (or at least theory-dependent).

Marxism draws the production/consumption line differently by positing much activity in the market economy as social reproduction or distribution/consumption of surplus, rather than production. However, it is feminist economics which mounts the strongest challenge to the neat distinction between consumers and producers – both because of the non-market production in the household, but also because much of women’s emotional labour is embodied and not alienable as labour power sold in a market.

In short, we should not simply posit payment and the market as the arbiter of what constitutes production and economic processes. We should be able to analyse the appropriation of personal information and data as a systemic part of the accumulation process on its own terms, not bound by the conceptions of theories based on different economic relations. In this context, the term “cloud serf” may be clunky, but it is consistent with the analysis of the basis of accumulation as rent rather than profit.

3. The mode of production and the metanarrative

Much of the debate around the nature of the new digital economy, whether it is surveillance capitalism, cloud capitalism or technofeudalism is based in narratives around modes of production – the description of the economy as a whole and the metanarrative of the transition from feudalism to capitalism to socialism (maybe, eventually!). But as JK Gibson-Graham point outs, this metanarrative is problematic. The whole idea of “the Capitalist system” leaves no outside, no vision of the other in a perspective which limits political and transformative action.

The alternative, within a Marxism perspective, is a more micro focus on class processes – the different ways in which goods and services are produced and how surplus labour is appropriated. These processes are not economy-wide: there is production and surplus appropriation within households (also, in Resnick and Wolf’s analysis, feudal – bound by ties of family, loyalty and tradition rather than market exchanges), in owner-operated enterprises where there is no direct surplus appropriation, and in government and not-for-profit enterprises where any surplus goes to a common good rather than private profit).

In this analysis, any given person, household, community or economy is characterised by the particular intersection of a range of these class (appropriation) processes as well as non-class processes of power and privilege.

The point here is that, even if one was not convinced by Varoufarkis’ argument that technofeudalism is a new and dominant mode of production (as per point 1 above), it is at least fairly obviously a different set of class processes (by virtue of its non-market appropriation of raw materials and its potential expansion based on data rent rather than capital investment). Free of the question of whether it is the dominant/defining mode of production, there is more scope to analyse the technofeudalist processes on their own terms – and to develop an opposition to them specifically, without it being predicated on the overthrow of society as a whole.

I have vacillated for more than 20 years on the usefulness of the analysis of a “capitalist system” verse a focus on specific production relations and appropriation processes – but either way, it seems to me the technofeudalism argument is challenging, important, and a little petrifying.

Inequality Alarm Bells for South Australia

The data presented in my earlier “Snapshot of Inequality” shows that levels of inequality in South Australia are lower than the national average in a number of areas, but there are alarm bells ringing in the background – and they are getting louder.

The First Warning

At first glance it looks like good news for croweaters. Income distribution between households is slightly more even in South Australia with proportionately fewer households on very high incomes. Compensation for workers in South Australia is higher as a proportion of the state economy than the equivalent national figure (the labour share). The “official” gender wage gap is around half the national average, and households in regional South Australia earned closer to the average Adelaide household than the regional/capital city divide nationally.

However, the apparently good South Australian outcomes come against a background of South Australia having lower average incomes and wealth than the national averages. For instance, the gender wage gap is lower in South Australia – but so are women’s wages with average full-time ordinary time earnings for women $68 per week lower than the national average for women. Similarly, the average income of households in regional SA is closer to the Adelaide average, but $217 a week lower than the national average for regional households.

Wellbeing is about quantum as well as relativity to others (equality). However, the picture here is also complicated by differences in housing costs, service provision and the need for a fuller accounting of income (alluded to in a previous post, but beyond the scope of this work).

The Alarm Bells for South Australia

In the context of this study, what is ringing the alarm bells loudest for South Australia is not the current gap to the national averages, but the general decline in the position of South Australia relative to the rest of the country over the last 30 years. The South Australian share of the national economy (GSP as a proportion of GDP) has fallen from 7.71% in 1990 to 5.7% in 2021. The data in the graph below shows the impact of this relative decline on inequality statistics. Cue the alarm bells: South Australia’s share of national household income, SA labour’s share of the national economy and even the SA female share of the national wage pool, all declined over the period.

Cue the alarm bells: time series (2001-2021) showing downward sloping lines (i.e. declines) of SA shares of national population, household income, labour share, and female wage share.

It is important to note that this is not, or not necessarily, about average incomes declining relative to the rest of country. Equivalised household disposable income in SA was 92% of the national average in 2001, and the same in 2020. Similarly, female full-time total earnings in South Australia were 96% of the national equivalent in May 2001 and the same in May 2022.

Population Impacts

A key factor driving the data, but which is not evident in the average income data is the decline in South Australia’s population share. This decline is evident in the top line of the graph. The drop was less than 1 percentage point (from 7.8% in 2001 to 6.9% in 2020), but this is still significant.

Had SA retained its population share (that is, grown at the same rate as the rest of the country) over the period, there would be around 220,000 or 13% more people in the state. On current averages of household size and income, those population differences equate to around $9.7bn of household income per year extra that would have been in the SA economy (not counting any multipliers arising from extra population).

Clearly the relative loss of population has a major impact on the SA economy. Combined with the changes in the various average incomes, it gives the downward trajectories in most of the data (even where the income share actually increased in relation to the SA economy). Capturing both population and income changes is the whole point of using income shares rather than household averages, and in this case it highlights several concerns for South Australia.

Firstly, with a declining share of national household income, the gap between South Australia and much of the rest of the country is growing. SA is becoming poorer as a community, even if that is not reflected in the individual household data. That is the alarm bell ringing in the background. As I noted in relation to regional South Australia (where this process is heightened with a further decline in regional communities), this impacts on the ability of communities to provide infrastructure, growth and the ability to attract and retain people. It becomes a self-reinforcing cycle, and the alarm bells become a symphony.

Secondly, as the data above shows, the relative decline of South Australia as a whole means that inequalities within South Australia are also made worse – not internally, but in relation to the rest of the country. Put another way, the more egalitarian income spread and distributions within South Australia may ameliorate, but do not overcome the growing inequality between South Australia and the average of the rest of the country (hence the downward sloping graphs).

As a whole, the South Australian data provides an example of how different inequalities interact with eachother. In this case the geographic inequalities undermine greater gender and class equalities (or alternatively, greater gender and class equality ameliorate increasing geographic inequalities).

Policy Response

South Australia is not alone in this predicament. The same is probably true of other smaller jurisdictions (although I have not done the numbers), and it is certainly true of regional South Australia where the decline of local communities is truly alarming. Clearly a policy response is needed: the current policy settings are not working as South Australia and the regions are being left behind. However, the interactions of different forms of inequality make the policy response complicated.

I have previously noted the importance of government redistribution through mechanisms like the sharing of the GST pool. The data here clearly shows the ongoing need for a sharing from the high-income states to the rest of the country. I have also noted that traditional responses in economies at the periphery (be it regional areas, struggling Australian states or developing countries) has been to attempt to intensify the use of natural resources. However, academic literature suggests that this “extractivism” offers no guarantee of genuine development and may exacerbate inequality and environmental degradation.

In South Australia’s recent history, the Rann/Weatherill Labor governments, like the Liberal state government before them, were desperate to develop new mining operations in the regions and defence technologies in Adelaide. The Marshall government offered a high-tech space future, and the current government spruiks a hydrogen future. Whatever we make of these ideas, the obvious point is that they did not stop the relative decline of South Australia and regional South Australia in particular, and there was little consideration of the multiple layers of inequality in those policies. A far more comprehensive approach is needed.

There are no easy answers here, and there are contradictions in dealing with ininequality. For instance, as my post “the super-rich don’t live here” indicated, the biggest areas of geographic inequality between South Australia and the rest of the country, and between regional SA and Adelaide, exist at the higher end of the income spectrum. This creates a contradiction because policies aimed at creating high paying jobs in particular areas would be a step towards reducing inequality between geographic areas, but would increase inequality within those same areas (as there would be a greater spread of incomes). For instance, policies which pay highly skilled workers loadings for working in regional or remote areas may increase incomes at higher levels (and may be necessary to ensure service provision), but they will increase the income gap between those people/households and most other households in that area. Similarly, regional development based on extractive industries may increase regional incomes and geographic equality, but is also likely to favour male workers and exacerbate the gender wage gap.

Conclusion

The contradictions of development and inequality are difficult to navigate, and the focus on multiple dimensions of inequality (in this case, how the inequality between South Australia and the nation as a whole intersects with inequalities within South Australia) complicates the picture of inequality. However, such a focus is important.

The examples above and the use of data on gender and class inequality alongside household income remind us that inequality is built in to economic activity. In turn, this suggests that addressing inequality can’t simply be a distributional after-thought where we drive policy for narrow economic goals, then catalogue how the results are distributed and perhaps seek to address inequalities at that point through welfare provision.

At best, with that approach we will always be playing catch-up – looking for payments and services to paper over fundamental cracks. More likely, we will simply lose. The macro-dynamics will overwhelm any welfare provision.

I will say more about that in a future post, but from the inequality data presented here and in previous posts, it is clear that greater economic intervention is essential. If left to themselves, market forces and demographic patterns will continue to channel money and population to existing growth areas, and continue the decline of South Australia. And if intervention and governance is done without a focus on inequality, or with too narrow a focus only on some inequalities, we will see people or groups within South Australia (and elsewhere) left behind.

The alarm bells are ringing – we need to pay attention.

Snapshot of Inequality – South Australia and National

This snapshot of inequality summarises my series of recent posts on this subject. The series has been a journey. I didn’t completely know where the data would take me and I am now asking different questions than when I started. However, frustrated by the mono-dimensional analyses that often dominate discussion of inequality (including in my own work) I was keen to explore the multi-layered nature of the beast.

Inequalities in income and wealth distribution between households, across states and regions, and between structurally differentiated social groups all matter, so I was keen to analyse the data on all of these – even if in an iterative fashion. I also wanted to look particularly at South Australia, partly for local relevance and partly because state-level data is often not factored in to the analysis of inequality.

Snapshot of Current Inequality

Overall the data examined in this series (almost all it sourced from the Australian Bureau of Statistics) showed significant levels of inequality across the country, as summarised in the table below.

 AustraliaSouth Australia
Household Income (between states) (2019-20)Australian average (mean gross) income $2329 per week, but state averages range from $1,736 (Tas) to $2,422 (NSW)Average household income $1,989 p.w. = 85.4% of national average, although difference mainly at top end. SA receiving 6.3% of all household income (which is below its population share).
Household Income (within states) (2019-20)  Bottom 40% of households received 13.4% of the total income. High-income households (90th percentile) received 9 times the income of low-income households (10th percentile).Inequality broadly reflects national patterns, but relatively lower incomes at the top end of the income spectrum
Household Income (Regional Areas) (2019-20)Regional Australia accounted for 31% of the population, but received only 27% of income.Regional SA share even smaller with 19.9% of population, but just 17.7% of income.
Household Wealth (2019-20)Distribution more unequal than distribution of income: highest wealth quintile held 62.2% of all household wealth, while the bottom 40% of households held only 6.1% of wealth.Distribution data not available, but wealth holdings in SA have a different structure (relatively less wealth in home ownership, more in financial assets).
Labour Share of the Economy (2021)“Compensation of employees” at historically low levels (47.7% of GDP).Labour share slightly higher (49.3% of GSP)
Gendered Wage Patterns (2022)Gender pay gap of 14.1% in full-time ordinary-time earnings. Bigger gaps when all earnings and all employees included.At 7.4%, f/t ordinary-time earnings gap is around half the national average, but on lower earnings and relatively lower male earnings. Difference between national and SA figures narrows when all earnings and employees included.

Changes Over Time

The above snapshot of inequality is precisely that – just a snapshot at the current point in time. Arguably, a more important story is evident when changes over recent decades are considered.

That story is not straight-forward and has been explored more fully in the earlier posts. However, the short version is that, at the national level:

  • income inequality between households has increased slightly,
  • inequality between cities and the regions, between capital and labour, and inequalities in household wealth have all increased more markedly,
  • gender wage inequality was the only measure where inequality decreased.

These trends are evident in the graphs below which trace changes in the share of the various pools of total income (or wealth, or production), alongside the same data for South Australia (i.e. share of SA total income/product). The time periods vary depending on data availability.

Household Income and Wealth

As can be seen, nationally, the share of total household income of the lowest two (equivalised) income quintiles has been relatively stable, peaking in 1996-97 at 21.4% and falling to 20% in 2019-20. However, while this fall in income share appears small, every 0.1% change represents over $22.6m (in 2019-20) going from the lower to higher income quintiles. Even more significantly, the share of national wealth held by the poorest two wealth quintiles fell more markedly, although the data is more limited, and is not available for South Australia.

Time series snapshot of inequality: share of household income and wealth captured by the bottom two (equivalised) income quintiles, 1994-2020.

Households in Regional Areas

The share of total income received by households outside Australian capital cities fell from 30.7% of the national total in 2000-01 to 27% in 2019-20. (Note: not all years are included in this data). The South Australian data is more volatile, and shows a lower share overall (with proportionately fewer households outside the capital), but the trend is similar.

Time series snapshot of Inequality: Share of national and SA income captured by households in respective regional areas, 2000-2020.

Class

Nationally, labour’s share of the economy fell from 48.8% in June 1994 to 47.7% in June 2021, with each 0.1% change in this data set representing $2bn (in 2021) lost from labour payments. However, the South Australian data here is different, falling more swiftly from a higher share of the economy to a low point in June 2004, then recovering to 49.3% of Gross State Product in 2021 – a larger share of the economy than the labour share nationally.

Time series snapshot of inequality: labour compensation's share of the economy, SA and Australia, 1990-2020.

Gender

As noted above, the gender wage share is the only indicator to see a reduction of inequality with women increasing their share of the national wage pool from 33.1% in November 1994 to 39% in May this year.

Time series snapshot of inequality: female share of total wage pool, SA and national, 10094-2022.

Caveats and Conclusions: Why the Numbers Matter

This snapshot of inequality focuses on shares of total pools of income/wealth, rather than the more traditional but disparate average income figures. My approach enables some consistency of analysis across the different data sets, but I make no claim of a causal relationship or that the inequalities are comparable in nature. Clearly, inequalities can contribute to each other and the data sets overlap, but they are analytically separate and the different trajectories show why it is flawed to simply focus on one dimension (usually household income) when considering questions like whether inequality is increasing or not.

In a future post examining the South Australian data in more detail I will explore more specific interactions between different axes of inequality, but the point of this snapshot of inequality is simply to summarise the data and note the importance of considering multiple forms of inequality alongside each other, rather than the usual mono-dimensional focuses.

In arguing for a broader focus on the multiple forms or layers of inequality, I am not calling for endless sets of data or the infinite division of society until we are left only with individuals (as in the neoliberal dream). Rather, my point is that statistics (and all research data) is a reflection of the questions we ask and the theoretical understandings underpinning the research. Our national economic statistics are a product of the neoclassical and Keynesian theories that gave rise to them (that was Chapter 1 of my PhD). So too, the data we use to describe inequality reflects particular theoretical standpoints.

More than that, the data can limit the way we see society and the policies we might pursue to address both inequality and political economy more generally. For instance, data on the distribution of income between households tends towards a tax-and-transfer redistribution (after the fact) to support households in the lowest income brackets. By contrast, labour share data begets industrial policies, while regional data inevitably leads to development debates.

In saying that, I am mindful that my analysis is not comprehensive. I am sure that people with better statistical programs and skills could provide more nuanced numbers, and not all structures of inequality have been examined. Most notably, there is no consideration of structures of racial inequality, although with relevant census data to be released later this year I may be able to add to the analysis later. Perhaps more importantly, I am also acutely aware that race, gender and class inequality is ultimately not reducible to numbers – or even to the economic.

All that said, the economic aspects of inequality are important, and the numbers do provide useful points of reference. At its most basic, it seems to me to be important to have some sense of the scale of inequality, whether things are getting better or worse, and in what areas.

The Labour Share: No Paradise for Workers

This is the fifth post in the series on inequality in South Australia. While previous posts used ABS data to identify and track inequality between households, this post shifts the focus to structural inequality, and questions of class in particular – as evidenced by the changing labour share of the economy. Future posts will look at other structural inequalities based on gender and race.

Structural Inequality

The shift in focus is important because while the household data reveals much about patterns of inequality, it also has many limitations. Household income and wealth data is based on an assumption that households share resources. This assumption is probably unwarranted for many households, including the 13,000 “group households” in South Australia (272,000 nationally) where some expenses may be shared, but income is likely not shared. Further, viewing the household as the basic economic unit hides dynamics of potential inequality within households – most obviously gender and age dynamics, which then have ramifications in society more widely.

Further, the household data produced by the ABS, and used in many studies of inequality (for instance, the Productivity Commission report and the ACOSS/UNSW research) presents a mono-dimensional stratification of income distribution: a continuous spectrum from lowest to highest income/wealth on which all household/individuals are located. The measures of inequality are then based on the relationship of arbitrary points along this continuum such as income quintiles, top-bottom deciles. They do not tell us much about what is driving this stratification.

While it is possible to look at different demographic characteristics of households at various points on this spectrum, it is still largely only a scoring of an end point of distribution – not the mechanism of unequal distribution itself. By contrast, structural inequality is not simply a different location on a spectrum, it is a systemic and often conflictual relation, buttressed by a range of institutional arrangements where the economic inequality drives or at least contributes to the reproduction of that inequality.

Class – the Labour Share of GDP

This description of structural inequality and some of terms above are loose and contested, and there are mountains of academic writings on the subject. I have previously discussed Erik Olin Wright’s attempt to draw together classical Marxist, Weberian and Durkheimian approaches to class. All these approaches offer different insights, and all are added to and cross-cut by analysis of other structural inequalities. However, with no claim to being comprehensive or determinative, in this post I want to keep it fairly simple with just one measure of one structural inequality: class, as measured by the relative financial returns going to capital and labour.

The usual measure of these class-based economic flows is the share of national income going to labour (“compensation of employees” in ABS-speak), or alternatively, the labour share of the whole economic pie (that is, the share of Gross Domestic Product going to labour). I am sure there is a PhD somewhere critiquing the notion that “GDP = the economy”, but nonetheless, the labour share of GDP is a convenient measure as there is a robust ABS data set and changes in the labour share reflect changes in class power within the economy.

The Labour Share Data – National and South Australian

As is well-known, labour’s share of GDP in Australia has been falling in recent times. In 2018, the Journal of Australian Political Economy dedicated an excellent issue to highlighting the issue and examining the causes, and the labour share remains a cause of concern for the labour movement and many on the left.

Rather than add to the debate about causes or solutions, in this post, I simply want to look at the figures and compare the situation in South Australia with the rest of the country. As can be seen in the table below, despite lower average wages and lower workforce participation rates, the most recent ABS data (June 2021) shows that labour share of the South Australian economy was slightly higher than the labour share nationally.

AustraliaSouth Australia
Average Total Weekly Earnings$1,797.10$1,626.00
Participation Rate66.2%62.7%
Labour Share47.7%49.3%

While this suggests a slightly better distribution of income to workers in South Australia (i.e. a more equitable outcome in class terms), as the graph below shows, this is not historically consistent. The labour share in South Australia is more volatile and slumped below the national average in the decade from 1996 to 2006.

Time series showing labour share of economy in SA and nationally from 1990 to 2021. Long term decline in national series, while SA slumped but regained ground from 2010.

It should also be noted that the national data here does not show the current “historically low” labour share discussed in the media. That discussion is rightly based on seasonally-adjusted figures, but these are not published at the state level so I have used the ABS “original” data series to ensure a like-for-like comparison. That said, the seasonally adjusted figures show an even lower labour share nationally (46.1%), so either way, it would appear that SA labour’s share of the state economy is higher than labour’s share at the national level.

While this may appear to be good news for South Australian workers, this is a higher share of a decreasing part of the national economy. In 1990 the SA economy (Gross State Product) accounted for 7.7% of the national economy (GDP). In 2021, SA’s share was 5.7%. As the graph below shows, South Australian labour’s share of the national economy (in orange plotted on the right axis) has declined over the last 30 years, even while largely retaining its share of the state economy (black line plotted on the left axis).

Time series graph repeating SA labour share of GDP, but also showing long even decline in SA labour's share of national economy (GDP)

For South Australian labour there is then a double-challenge – the class challenge of retaining and increasing its share of income, and the development challenge of growing the economic pie overall. Of course this struggle is not unique, but it is a particular challenge given the arguments in previous posts about being at the economic periphery.

Caveats and Conclusion

It is worth emphasising again that the labour share is a class distribution, an economic process rather than a positioning of people or households. Many people and households (particularly higher-income households) have multiple sources of income including government transfers, bank interest, investment income, imputed rents and capital gains. These are different economic flows (class processes) and those households’ labour income does not necessarily determine their total income, lifestyle options or position in society.

That said, labour income is the major income source for the majority of Australian households. Accordingly, changes in the labour share of income are a key contributor to the household income spectrum, while also being important in their own right as a reflection of structural inequality.

In this context, my interim conclusion (to be added to in future posts) is simple: with a declining share of the national economy, it is no paradise for workers[1] – either in South Australia or nationally.

[1]  With apologies to Ken Buckley and Ted Wheelwright for stealing their classic title.

Class In Australia: Everything and Nothing?

A book, a red book (of course), simply titled Class in Australia. A front cover emblazoned with Sally McManus proclaiming that it is “a powerful and vibrant study of the complex realities of class in modern Australia”, and a back cover announcing an examination of class rooted in the specifics of Australian settler-colonialism which also takes account of race and gender relations. A big promise from Monash University Publishing about Steven Threadgold and Jessica Gerard’s book which was published in February this year.

Book Cover: Class in Australia, by Steven Threadgold and Jessica Gerard

With this advance advertising, I pre-ordered a copy, but I am afraid I was ultimately disappointed in the purchase. As an edited collection of essays, it is a hard ask to generate a coherent picture of the complexities of class (and that was probably not the aim), but from the opening chapters I was not sure who the audience was for the book.

Much of the work plotted issues or the various authors’ research in relation to existing academic literature, but without a knowledge of that literature it was hard to evaluate the arguments and contributions. But for an academic audience, the short generalist pieces lacked the data and detail to be convincing. My reading was somewhere in between, and I was left wanting more.

Theory

Threadgold and Gerard’s introduction argued for the importance of class as a concept, and against arguments of the “death of class”. They argue that

“class is necessary for understanding how Australian society functions, how the powerful maintain their interests, and how social and cultural institutions work to reproduce inequality”.

No argument from me on that, but they neither define class or a particular approach to class analysis, beyond emphasising the need for an open analysis of the complexity of class which takes account of gender, sexuality, race, ethnicity and the particular context. From that atheoretical (or at least non-structural) starting point I was not sure what “class” meant or was grounded in.

The first chapters designed to “situate class analysis” within the specifics of Australian experience were vague and disconnected – one leaping from Poulantzas to the class contradiction of one working class man’s love of classical music, while another described property relations in settler colonial society, but appearing fairly dated in its sources. The most theoretical of the chapters in this section set out its key definitions and assumptions, and adopted a categorisation of class based on income from paid work for owners (employers and petty bourgeoisie) and labour distinguished by control of operational skills and managerial rights (expert managers, managers, experts, workers). There was data on the numbers of people in each of these classes, and some discussion of the interplay of income, assets and culture. IMHO, it was a too dismissive of housing as a class asset (for reasons discussed here), but in any case, the chapter was too short to develop its key themes and, in an edited collection, this framework did not necessarily apply to other chapters.

Race/Aboriginality

Beyond the early chapter on settler colonial society, there were various references to race and the experience of Aboriginal people, but few were developed. For instance, in the concluding interview, Raewyn Connell contrasts Australian colonialism with South African settler society in that:

“Except in the pastoral industry and especially in Northern Australia, colonialism in Australia did not subject the Indigenous population as a labour force … That produced a different pattern of racism in Australia which we still have elements of today – exclusionary rather than hierarchical.”

This struck me as in important entry point to understanding an intersection of class and race, but I wanted a more detailed analysis of how these geographic differences played out, and how the situation changed over time. In 2016, 51% of Aboriginal and Torres Strait Islander adults were employed. This was still well below the 76% of the non-Indigenous people, but it shows that the exclusion from employment/class is not total. So how are we to understand the class processes and differences for both Aboriginal employees and non-employees?

Similarly, the interview with Larissa Behrendt was a story of exclusion in highlighting the discrimination she has experienced in her career. While her story is inspirational, I was not sure what it says about class that is not simply captured by the notion of discrimination (with “class” being redundant).

Industrial Relations

For me, one of the most interesting chapters was an analysis by Tom Barnes and Jasmine Ali of an industrial dispute over retrenchments in a Woolworth’s warehouse in suburban Melbourne. The analysis adopted Erik Olin Wright’s multilevel synthesis of Marxian, Weberian and Durkheimian theory (which I considered in an earlier post) to show the divisions within the warehouse staff. Wright’s work in fact appeared several times in the book, but Barnes and Ali’s chapter was a great example outlining the (Weberian) distinctions between entitlements of full-time, casual and labour-hire workers and the (Durkheimian) situational differences within the formal and informal workplace culture and hierarchy. This was framed within a Marxian logic of the power of capital in deciding production location and warehouse closure.

In the end, the union got a good outcome (much improved redundancy and rights) based on identifying the unity of class interests against capital. While that may be good news, I would have liked to have known more about how those institutional and work-floor divisions were navigated – i.e. how class was mobilised. The article also said little about race or gender intersections, so while it was a good exposition of Wright’s methodology, it did not fully situate class in the current context.

Conclusion

There is not space here to comment on each chapter of Class in Australia, which was something of a smorgasbord (or at least a tasting tray) of class discussion. Suffice to say that the cultural studies chapters analysing an SBS documentary (Struggle Street) and rural romance novels failed to convince me of the generalisability or importance of the topic. And I did not read the chapters on class and education because …

Throughout the book (and somewhat in contradiction to Threadgold and Gerard’s statement cited above), I got no sense of one (or more) classes accumulating wealth and power from their class position or at the expense of other classes. There was a sense of inequality based on class and hierarchy between and within classes, but not really a sense of exploitation or of class processes as drivers of macro-economic structures or of social change or stability. Rather, (and perhaps because they generally reject a priori theory in favour of class forming in context) class appears as the wash-up of other economic and social processes. This is unsatisfactory both analytically and politically as it robs classes of agency.

There is much to say about class in Australia, and Threadgold and Gerard set out to raise rather than answer questions. But I would argue that the class processes and conflicts which determine (or at least influence) the distribution of income and wealth at the macro-level are more important than the musical tastes, and even the education levels or voting patterns, of the players in those processes. Ultimately, that is why I am drawn to political economy rather than sociology, even while acknowledging the importance of other analysis.