Explained, of course, by Maurice Glasman:
It is wonderful to be here at the LSE. I’ve
had debates with Michael Gove and Jesse Norman, and with Lord Skidelsky, but my
fondest memory of the LSE remains the Living Wage Campaign with London
Citizens.
In that campaign we discovered the London School of Economics was precisely not supposed to be the Chicago School and reproduce the deficiencies of an exclusive reliance on individual utility maximisation as a unit of calculation and, according the Webbs, it was supposed to develop a theory of Labour Value.
It didn’t turn out that way. As we know, the Fabians discovered the state as the instrument of progress, justice and efficiency and it was not clear where work fitted into that scheme. External redistribution replaced internal negotiation and the balance of power as the fundamental agent of change.
Caught between the individual maximiser and the collective aggregator society effectively disappeared from economic calculation as a source of value and was externalised as a cultural or historical anomaly that got in the way of maximum efficiency, price equilibrium and just distribution.
The Living Wage campaign drew attention precisely to the limits of contractual individualism in thinking about work because the cleaners, cooks and security guards were a necessary part of the University and were denied decent pay and conditions through contracting out which treated a human being as a disposable commodity.
The discovery that the Webbs were committed to a Living Wage for all Londonders was one of the few favours that the Fabians have ever done for me and we won a Living Wage on the basis that we were being true to the founding vision of this university.
Working with the students, particularly in the NUS, the Islamic Society and the Christian Union, getting to know the cleaning staff and generating new friendships and alliances was a very good experience and not only is the LSE being true to its founding mission in paying it but also in hosting debates such as these as a forum for public debate.
That was also part of the vision of a London School outlined in the founding documents. One of the core features of Blue Labour is that the old is the new, that our past is our future and finding out what the original mission of an institution is before giving advice on renewal is fundamental to our approach. I think that under the leadership of Craig Calhoun the LSE is rediscovering its identity and renewing its mission.
It is also the case that this debate, about work as a value, is of central political as well as academic importance.
I will suggest that work is a value, a good in itself as well as a source of value. That it is characterised by an internal good, the expertise, experience and excellence of internal accomplishment, doing a job well and also as an external good, in terms of generating value in commodities and the determination of price and wages.
There are two internal goods. It is both good for people to accomplish something skilfully, to participate in an inheritance of practice and innovate within it.
It is also a good in terms of an internal practice that is shared between practitioners that nurtures the character of a person. In terms of external goods, there is the generation of value expressed in price. A constitutive feature of any commodity is the quality of the labour that is involved in its production.
The second external good is that the preservation of work in terms of honesty, skill, resilience, co-operation and competitiveness is fundamental to a good society and a good life. The political consensus around economics in the past thirty, I would say seventy years has assumed that almost anything other than work generates value.
I have been assured that capital generates value, that technology generates value, that state planning generates value, that universities generate value, that friendship generates value but significant though all these things are, if work, if labour, is ignored then a constitutive and decisive feature of value is ignored.
The way this plays out in both political and academic terms concerns the argument over the explanation of the comparative superiority of the German model in terms of its external competitiveness and its internal economic system.
How can it be that the country with the greatest degree of democratic governance in its economy has proved to the most competitive? How is it possible that a vocational system of labour market regulation has proved to be more efficient than its flexible competitors? How is it that a sectoral and local form of banking survived the crash in so much better shape than competitive asset maximising banks?
It was her Majesty the Queen, here at the LSE, who politely asked why none of her expert economic advisors had predicted the crash. ‘Why did no-one warn me this would happen?’ she asked.
The letter of response from economists is an object lesson on how do deny that there is an epistemological crisis of explanation in any theory of value that does not include work as something other than a commodity, as a good carried by human beings who flourish when they treat each other humanely.
That is the key Aristotelian insight. In turns out that there is a need of intermediate institutions that promote virtue, vocation and value within the economy otherwise capital will erode trust and constraint leading to the circumstances of the crash in which unaccountable greed and recklessness brought us to the brink of ruin.
Capital exerts a tremendous pressure to turn centralise ownership and turn labour into a commodity but human beings are capable of association, negotiation, learning, expression and improvisation and these are nurtured by institutions that uphold a non commodity status for labour within the economic system. Institutions like vocational colleges, unions and works councils play a constitutive role in the preservation and renewal of work.
Labour has the ability to organise itself because it is human and it turns out that the results are better if labour value is recognised as a distinctive factor of production. Where finance capital, or the state assert sovereignty and labour is subordinated there is exploitation and oppression. Karl Polanyi’s theory of commodification in which things that are not produced for sale become available at a price is, I thin, the best starting point for understanding this.
So work has a commodity value, an ethical value and a societal value as a means through which knowledge and good practice are reproduced and renewed. Blue Labour goes further and states that work, is definitive of what it means to be a human being. In this it is true to both socialist and Catholic thought.
There are two forms of labour. One is childbirth and the reproduction of life and the attempt that parents make to love and honour their children throughout life. Labour in this sense is definitionally painful, full of grief and sacrifice as well as love and grace, not always in equal measure and the same is true of the other kind of labour, the transformation of the external world and inherited materials, conceptual and material, so as to increase their value.
In this view Labour is an inheritance of practice that is embodied in the person and embedded in good practice. That is why I am Blue. Work is hard and unyielding, it is frustrating and capricious. And so is love. It is better not to be too progressive in the approach to these things. Things cannot only get better.
The reason why I am sceptical about Lord Skidelsky’s attempt to reconcile an Aristotelian theory of internal goods and the utilitarianism of Keynes concerns precisely work as a value, or to call it by its traditional name, labour value.
Keynes, by concentrating on the money supply and macro-economic counter-cyclical external intervention, the collective aggregator mentioned earlier, and combining this with the individual maximiser of classical theory, had no conceptual space for intermediate institutions; firms, institutions, regions, traditions, vocation and labour itself as a source of value.
External stimulus jolted the system back to work but the source of value, work and its quality, and the conditions for generating that value, institutions with status that could defend labour from becoming a commodity, defined as a sellable thing without relationships or a history, without knowledge or character, replaceable and dispensable and defined exclusively by its price is missing from the theory.
Institutions that preserved the status of human beings and knowledge within the economy were not part of the story and that is why Keynesianism, in itself, does not provide the alternative political economy that we need. He was right about many things. Not least in his critique of usury, in the origins of the gold standard in the stolen gold of the Golden Hind and in the necessity of counter cyclical spending during a recession.
The problem lies with the institutional arrangements required to generate value and emerge from recession in which, other than a few enigmatic allusions in chapter 23 there is not very much between the Treasury and the individual, the market and the state.
That is why I sometimes use the term Viagra economics, for the question remains. What do you do when the stimulus wears off? We are at a moment where we don’t need more of the same but something different and better.
The list of characteristics of the good life suggested by Lord Skidelsky include neither work nor politics and that indicates that there is a problem with understanding power.
Part of a good life is not to be dominated by the rich and the powerful and that can only be done through asserting the necessity of recognising labour as a value so that the people who do it are treated humanely and that involves the other thing that defines human beings, they can get together and change things through the power of association. Politics is part of the good life too although I can tell you it doesn’t always feel that way.
It was Aquinas, and Catholic Social Thought that brought the virtues into the economy, rather than leisure and developed the most complex and compelling account of a non-statist market system characterised by a balance of power and private property in which work retained its status. Rest is the complement to work.
Laborem Exercens, published in 1989 is a masterpiece that I recommend as a complement to anyone who reads the General Theory. In philosophy MacIntyre has done the most important work in developing the idea of virtue as a serious modern concept but it has been the Popes, in their encyclicals, who have best developed the concept of virtue in the economy.
So here comes the point. Lord Skidelsky offers a pre-modern green vision which is rejected as utopian or a technological leisure based society in which we are all Aristocrats with time to pursue the good. The assumption is that there is no way back to the local, to relationships, to a sense of place, or earning and belonging within human scale institutions and economies.
And this is why the German economy is important for it indicates that this modernist choice is false. It turns out that relational accountability vocational institutions, regional banks that are constrained do succeed in domesticating the destructive power of capital, while harnessing its creative, Keynes would say demonic force to uproot, maximise and exploit. The organisation of labour and of place, as well as faith traditions, so central to the Living Wage campaign here at LSE play a central role.
So I want to thank the economic department at the LSE for inviting me to speak and Lord Skidelsky for wishing to continue this debate. I am grateful for the opportunity to participate.
In that campaign we discovered the London School of Economics was precisely not supposed to be the Chicago School and reproduce the deficiencies of an exclusive reliance on individual utility maximisation as a unit of calculation and, according the Webbs, it was supposed to develop a theory of Labour Value.
It didn’t turn out that way. As we know, the Fabians discovered the state as the instrument of progress, justice and efficiency and it was not clear where work fitted into that scheme. External redistribution replaced internal negotiation and the balance of power as the fundamental agent of change.
Caught between the individual maximiser and the collective aggregator society effectively disappeared from economic calculation as a source of value and was externalised as a cultural or historical anomaly that got in the way of maximum efficiency, price equilibrium and just distribution.
The Living Wage campaign drew attention precisely to the limits of contractual individualism in thinking about work because the cleaners, cooks and security guards were a necessary part of the University and were denied decent pay and conditions through contracting out which treated a human being as a disposable commodity.
The discovery that the Webbs were committed to a Living Wage for all Londonders was one of the few favours that the Fabians have ever done for me and we won a Living Wage on the basis that we were being true to the founding vision of this university.
Working with the students, particularly in the NUS, the Islamic Society and the Christian Union, getting to know the cleaning staff and generating new friendships and alliances was a very good experience and not only is the LSE being true to its founding mission in paying it but also in hosting debates such as these as a forum for public debate.
That was also part of the vision of a London School outlined in the founding documents. One of the core features of Blue Labour is that the old is the new, that our past is our future and finding out what the original mission of an institution is before giving advice on renewal is fundamental to our approach. I think that under the leadership of Craig Calhoun the LSE is rediscovering its identity and renewing its mission.
It is also the case that this debate, about work as a value, is of central political as well as academic importance.
I will suggest that work is a value, a good in itself as well as a source of value. That it is characterised by an internal good, the expertise, experience and excellence of internal accomplishment, doing a job well and also as an external good, in terms of generating value in commodities and the determination of price and wages.
There are two internal goods. It is both good for people to accomplish something skilfully, to participate in an inheritance of practice and innovate within it.
It is also a good in terms of an internal practice that is shared between practitioners that nurtures the character of a person. In terms of external goods, there is the generation of value expressed in price. A constitutive feature of any commodity is the quality of the labour that is involved in its production.
The second external good is that the preservation of work in terms of honesty, skill, resilience, co-operation and competitiveness is fundamental to a good society and a good life. The political consensus around economics in the past thirty, I would say seventy years has assumed that almost anything other than work generates value.
I have been assured that capital generates value, that technology generates value, that state planning generates value, that universities generate value, that friendship generates value but significant though all these things are, if work, if labour, is ignored then a constitutive and decisive feature of value is ignored.
The way this plays out in both political and academic terms concerns the argument over the explanation of the comparative superiority of the German model in terms of its external competitiveness and its internal economic system.
How can it be that the country with the greatest degree of democratic governance in its economy has proved to the most competitive? How is it possible that a vocational system of labour market regulation has proved to be more efficient than its flexible competitors? How is it that a sectoral and local form of banking survived the crash in so much better shape than competitive asset maximising banks?
It was her Majesty the Queen, here at the LSE, who politely asked why none of her expert economic advisors had predicted the crash. ‘Why did no-one warn me this would happen?’ she asked.
The letter of response from economists is an object lesson on how do deny that there is an epistemological crisis of explanation in any theory of value that does not include work as something other than a commodity, as a good carried by human beings who flourish when they treat each other humanely.
That is the key Aristotelian insight. In turns out that there is a need of intermediate institutions that promote virtue, vocation and value within the economy otherwise capital will erode trust and constraint leading to the circumstances of the crash in which unaccountable greed and recklessness brought us to the brink of ruin.
Capital exerts a tremendous pressure to turn centralise ownership and turn labour into a commodity but human beings are capable of association, negotiation, learning, expression and improvisation and these are nurtured by institutions that uphold a non commodity status for labour within the economic system. Institutions like vocational colleges, unions and works councils play a constitutive role in the preservation and renewal of work.
Labour has the ability to organise itself because it is human and it turns out that the results are better if labour value is recognised as a distinctive factor of production. Where finance capital, or the state assert sovereignty and labour is subordinated there is exploitation and oppression. Karl Polanyi’s theory of commodification in which things that are not produced for sale become available at a price is, I thin, the best starting point for understanding this.
So work has a commodity value, an ethical value and a societal value as a means through which knowledge and good practice are reproduced and renewed. Blue Labour goes further and states that work, is definitive of what it means to be a human being. In this it is true to both socialist and Catholic thought.
There are two forms of labour. One is childbirth and the reproduction of life and the attempt that parents make to love and honour their children throughout life. Labour in this sense is definitionally painful, full of grief and sacrifice as well as love and grace, not always in equal measure and the same is true of the other kind of labour, the transformation of the external world and inherited materials, conceptual and material, so as to increase their value.
In this view Labour is an inheritance of practice that is embodied in the person and embedded in good practice. That is why I am Blue. Work is hard and unyielding, it is frustrating and capricious. And so is love. It is better not to be too progressive in the approach to these things. Things cannot only get better.
The reason why I am sceptical about Lord Skidelsky’s attempt to reconcile an Aristotelian theory of internal goods and the utilitarianism of Keynes concerns precisely work as a value, or to call it by its traditional name, labour value.
Keynes, by concentrating on the money supply and macro-economic counter-cyclical external intervention, the collective aggregator mentioned earlier, and combining this with the individual maximiser of classical theory, had no conceptual space for intermediate institutions; firms, institutions, regions, traditions, vocation and labour itself as a source of value.
External stimulus jolted the system back to work but the source of value, work and its quality, and the conditions for generating that value, institutions with status that could defend labour from becoming a commodity, defined as a sellable thing without relationships or a history, without knowledge or character, replaceable and dispensable and defined exclusively by its price is missing from the theory.
Institutions that preserved the status of human beings and knowledge within the economy were not part of the story and that is why Keynesianism, in itself, does not provide the alternative political economy that we need. He was right about many things. Not least in his critique of usury, in the origins of the gold standard in the stolen gold of the Golden Hind and in the necessity of counter cyclical spending during a recession.
The problem lies with the institutional arrangements required to generate value and emerge from recession in which, other than a few enigmatic allusions in chapter 23 there is not very much between the Treasury and the individual, the market and the state.
That is why I sometimes use the term Viagra economics, for the question remains. What do you do when the stimulus wears off? We are at a moment where we don’t need more of the same but something different and better.
The list of characteristics of the good life suggested by Lord Skidelsky include neither work nor politics and that indicates that there is a problem with understanding power.
Part of a good life is not to be dominated by the rich and the powerful and that can only be done through asserting the necessity of recognising labour as a value so that the people who do it are treated humanely and that involves the other thing that defines human beings, they can get together and change things through the power of association. Politics is part of the good life too although I can tell you it doesn’t always feel that way.
It was Aquinas, and Catholic Social Thought that brought the virtues into the economy, rather than leisure and developed the most complex and compelling account of a non-statist market system characterised by a balance of power and private property in which work retained its status. Rest is the complement to work.
Laborem Exercens, published in 1989 is a masterpiece that I recommend as a complement to anyone who reads the General Theory. In philosophy MacIntyre has done the most important work in developing the idea of virtue as a serious modern concept but it has been the Popes, in their encyclicals, who have best developed the concept of virtue in the economy.
So here comes the point. Lord Skidelsky offers a pre-modern green vision which is rejected as utopian or a technological leisure based society in which we are all Aristocrats with time to pursue the good. The assumption is that there is no way back to the local, to relationships, to a sense of place, or earning and belonging within human scale institutions and economies.
And this is why the German economy is important for it indicates that this modernist choice is false. It turns out that relational accountability vocational institutions, regional banks that are constrained do succeed in domesticating the destructive power of capital, while harnessing its creative, Keynes would say demonic force to uproot, maximise and exploit. The organisation of labour and of place, as well as faith traditions, so central to the Living Wage campaign here at LSE play a central role.
So I want to thank the economic department at the LSE for inviting me to speak and Lord Skidelsky for wishing to continue this debate. I am grateful for the opportunity to participate.
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