Hammond’s self-employed U-turn

The Tories know that they have to preserve the middle classes, argues Paul Demarty

Books further out of balance

Last week’s budget was a dismal experience for many - more attacks on schools (except, of course, the grammar schools that Theresa May expresses such fanatical support for), an increase in national health service spending so wholly inadequate that it is little more than a joke.

The media agenda, however, homed in on a particular that seems, on the face of it, relatively minor. The self-employed were to see their national insurance contributions rise from 9% to 11% - a hit to be borne by some 4.8 million people, who currently enjoy the dubious benefits of ‘being their own boss’. The hoo-ha over this was deafening, not least because among the 4.8 million are a significant proportion of journalists, but above all because it is in direct contradiction to the Tories’ manifesto commitments not to raise NI, value-added tax or income tax.

Hammond protested that times have changed since 2015 - which is one way of putting it. He certainly did not begin the Tories’ latest term as chancellor, that title instead belonging to George Osborne, who - we chuckle to remember - was in those days often described as a ‘strategic genius’ in the pages of the bourgeois press, but succeeded in the end only in destroying himself, his prime minister and the medium term political-economic stability of the country through his wizard wheeze of an in-out referendum on European Union membership. Hammond is the anti-Osborne - colourless, plainly at the mercy of the Tory leader, factionally unplaceable. There is no reason why he should be bound by Osborne’s fatuous fiscal promises (after all, how many of his own book-balancing deadlines did unlucky Gideon miss?), with the circumstances now very much changed.

The interest lies rather in the fact that Hammond’s NI increase was so hated by the Tories, never mind the Tory media; indeed, that there should ever have been such a manifesto commitment. That is a much more interesting tale.

Untangling the self-employed

The ‘self-employed’, to begin with, are an amalgam. It should hardly surprise us, of course, since this is a category of bourgeois economics (and not that, even - a category primarily for census-takers and psephologists). They may be found among the most desperate layers of the exploited, and also banging on the door of the bourgeoisie proper, and many other places in between. We must disentangle these layers to make sense of them.

The most common image of the self-employed in Britain is probably that of the practitioner of some skilled trade - the ‘white van man’. He owns the van, the tools therein, and engages in commerce as an independent operator, advertising modestly in local paper classifieds and latterly their web-based usurpers. He does his own taxes (and perhaps does not object to being paid in cash, between friends). The skilled trades are useful to home in on, because the stratification of the self-employed as a whole is present in synecdoche. There is a ‘bottom end’, where individuals become utterly reliant on larger players in the supply chain - a kitchen-fitter, say, who would go bust without a strong relationship with the local B&Q. There are others, however, who succeed well enough to become small-scale employers themselves (of apprentices, etc).

Many things divide these examples, but the most important is this - our struggler, hanging off the every word of B&Q, is in reality an employee. ‘His’ means of production - his van, say - can only be put into the productive process on the say-so of a capitalist firm: that is, can only function as capital when deployed by another. The firm has merely outsourced, ingeniously, some of the costs of maintaining and reproducing the means of production, and by the same ruse liberated itself from some of the obligations (sick pay, paid holiday, minimum wage levels) it would owe to a full employee.

The great contemporary example of this phenomenon is the ‘gig economy’ - above all the behemoth start-up, Uber, which puts ‘self-employed’ (honest, guv) drivers to work as part of a bargain-basement black cab service. An Uber driver works for fares calculated by Uber, guided around the city by Uber’s navigation system, dispatched under the direction of Uber. Their car may well have been bought with a loan advanced by Uber, with repayments docked out of wages - ahem, sorry, invoices - automatically, by Uber. What a fine life it is, to be your own boss!

The whole thing, of course, is total hogwash - and so obviously nonsensical that Uber is frequently dragged to court on precisely this point, and is not always successful in defence - only one of many fronts on which the company, and its emetic CEO, Travis Kalanick, openly defy local laws. Yet the use of self-employed status for superexploitation, as a cover for a revival of putting-out, is used ever more widely outside of Kalanick’s malfunctioning empire; there is something of the spirit of the age in it. (On the whole, it is unlikely that exposure to labour laws will do for Uber. Rather, the minor matter that their 11-figure valuation is a grotesque fiction - and basically a giant Ponzi scheme perpetrated indirectly on the world’s pension funds - will probably cause the company’s demise.)

This was the line of attack used by the Labour front bench against Hammond, and understandably so. According to John McDonnell,

The challenge for the next Labour government and the whole labour movement will be in securing the balance between the best possible protections for those in work [ie, formal employment - PD] and recognising that the world of work itself is changing. The labour movement has risen to challenges like this in the past. It was born out of the struggle for decent pay and conditions, when new technologies were ripping up existing ways of working. We need that same spirit and vision again.

The dream

There are two things wrong with this response. The first is that it subtly casts technological progress as the agent of changes in the “world of work”. It would be more accurate (if a little over the top) to say it was the other way round - changes in the “world of work” (that is, the prevailing relationships of class power) rather dictate the shape that some given scientific advance takes, when it is embodied in a material-technological item of capital. Blaming computers and automation is a cop-out.

The second problem, which is more pertinent to the current discussion, is that it misses the reason for the success of current ‘self-employment’ practices. There are many ways to chain workers to a machine and drive down their living standards. You can simply enslave them directly; you can organise fascist bands to conduct terror against trade unions and the left. Such measures have been deployed in the past and, if it comes to it, will be again - if the current crop of CEOs and directors are not up to it, they will be replaced with men and women of sterner stuff. And, all things being equal, we would expect it, for it is inevitable on a long enough time-scale that the working class will seek to improve its conditions collectively - an endeavour squarely at odds with the interests of its exploiters.

Yet slavery is plainly not on the cards, and nor (in spite of everything) is generalised fascist violence. Violence, in the end, is expensive, and risky with it. Instead, day-to-day social peace must be maintained with the consent of the lower orders.

Capitalism inherits from earlier societies a class of small property-owners - the petty bourgeoisie - in the cities and countryside. The basic premises of Marxist political economy give us every reason to suspect that the petty bourgeoisie will disappear rapidly, dividing between the bourgeoisie proper and (mostly) the proletariat. That this did not happen can be explained, instead, with reference to the slower cadence of history, whereby forms of society themselves have life cycles, are born, mature, decay and die. As contradictions sharpen, the basic laws of that society are increasingly constrained by the very same evasive actions necessary to preserve their operation.

The preservation of a middle class has taken various forms - an emancipated peasantry, an urban petty bourgeoisie, later a layer of professionals ... In different ways, each is given a limited material stake in the persistence of the system of generalised private property. They can thereby be convinced, in many cases, of the justice of the system; and, in a great many more, to accept its inevitability. A sliver, a fig leaf of these privileges, but more the idea of them - of ‘independent means’ - is offered to the people we met earlier at the bottom end of ‘self-employment’. With it comes the possibility that these wider layers will identify themselves as property-owners first and plebeians second - and thus identify their interests more with Bob Diamond than striking train drivers or migrant bricklayers.

Hammond’s blunder

It is this, in the end, that explains the furore about Hammond’s policy, and what marks it out as an error. For his two measly percentage points on national insurance contributions amounts to an assault on the very basis of Tory power.

The Tories, in their contemporary form, have two faces - the one is as the guardians of high capitalism, the ‘party of business’; the other is that of the party of English ‘common sense’, the custodians of this nation of shopkeepers. In the aftermath of the Brexit vote, and amid a general right-populist upsurge, the latter countenance has proven more convenient, and Theresa May wasted no time in adopting it after emerging from last summer’s bloodletting in the top job. This minor adjustment in tax rates is a lurch in very much the wrong direction, according to the needs of the day. Nobody much should have been surprised when Hammond’s boss and wiser cabinet colleagues force him into retreat on the issue.

As for us communists, the issue is simpler. We do not seek to preserve artificially a layer of petty property-owners; on this point, the fundamental tendency of capitalism to rid us of it is very much more historically progressive than the political exigencies that oppose it. Yet we do not favour the general immiseration of 4.8 million people in Britain alone as a means of achieving it - still less forcible liquidation after the fashion of ‘dekulakisation’ or the Khmer Rouge. The lot of the working class must be improved, by the organised and conscious collective action of the workers, together with as many of the contradictory middle class elements won to the cause as possible.

If Hammond really wants to make things ‘fair’, he should clamp down on the pseudo-self-employment scam used by the likes of Uber to force their de facto workers further into precarity and penury. It will be a cold day in hell before a Tory chancellor reaches for that as a first resort, however - whatever mask he is wearing.