Except for the barons, neoliberalism is a blind alley

There is an interesting book review of “Rentier Capitalism – “Who owns the economy and who pays for it?” by Brett Christophers here.

Now I must emphasise that I haven’t read anything but the review itself (indeed I don’t think the book has yet been published) but the review suggests to me certain conclusions.

First, subcontracting is often in effect, actually the ‘gig’ economy, which works, by subcontracting in order to diminish labour costs. This automatically leads to an increase in director costs – they are the sales contact and as the first contact are bigged up – and essential to have on your side, once you have subcontracted any part of your company function. You rely on the (overpaid) directors to deliver your goods – how is clearly up to them – but it is vital to you that they do.

In effect this is neoliberal nirvana because subcontracting as a necessity always presupposes less for labour and more for directors and shareholders.

The book points out, I understand, that these subcontractors are expert in getting those contracts (and absolutely useless at much else) – certainly the Serco test and trace is a shining example of this.

Google, Facebook, Amazon and the rest are really in fact, rentiers – their principal aim is to control and extract rent from what others do. Apart from Amazon they do nothing constructive themselves and it now seems that the EU is catching up with Amazon’s true purpose. Even people like Hilton Hotels or Macdonald’s are based on the franchising model – so, while the franchisor gets paid through specifying the systems and supplying goods at an unnegotiated compulsory price – it’s down to the franchisee to provide the labour – and the cheaper that that can be found the more profit the franchisee makes. If he cannot – he may make none. This system is prevalent – as, I remember, a Bargain Booze franchisee pointed out to me some years ago.

So here we have some of the clue as to why the UK productivity is so low. Productivity needs investment – if you’re a franchisee you probably cannot afford it and if you can, why do it when much of the advantage may accrue to the franchisor?

If you have a concession for a few months – or maybe a year – as Serco does – why invest? Because investment clearly has no time to deliver any return.

Further, Serco are absolutely expert at winning contracts – and that is key to their ‘value’ – what they are actually doing is entirely incidental. They will always fudge and bluster while hiring labour at the minimum wage and to do something none of their staff – from top to bottom – have any expertise in.

These companies are being paid to learn on the job. The state would be better run for us all if it retained its old learning.

For Serco and their ilk they find that it doesn’t actually matter because like any drug addict they are mainlining on that sole producer of the money supply – the government.

The people doing the mainlining are effectively the drug barons – the rest of us merely the mules.

Welcome to Brexit Britain, for mules and barons are what, it seems to me, so called ‘neoliberalism’ is actually about.

Comments

  1. Gerry Toner -

    The subcontracting mechanism is a transitional catalyst. In the shift from feudalism and mercantilism subcontracting both assisted the formation of markets and then was deconstructed in the formation of vertically integrated factory models. Today the direction is to deconstruct the verticals and this is transitioned via subcontracting. The state assists in all cases because it is a capitalist state, there is no other state. Rentier capitalism is not an end in itself and is a transitional status. People will not standby watching others rake off their earnings; however the state legitimises it in these transition phases while a new more stable and more acceptable mode is created. It is inevitable there will be rentierism as major transitions offer opportunistic moments. The state does not work for ‘us’ as some would believe but for the dominant partial view held by the dominant actors in the economy. At present finance and financialised business models are dominant. In common parlance, opportunists and spivs. One could argue that may be because no other more useful or virtuous model exists. The emotion of being ‘ripped off’ will catalyse more stable and acceptable models. The state is captured by the dominant partial view and it is ‘we’ who must displace that view with something more productive.

    1. Peter May -

      I do hope your conclusion is correct.
      My fear is that poverty and hopelessness may impair change…

  2. Gerry Toner -

    Poverty and hopelessness are energies generated by the prevailing dominant model, which at present is extremely exploitative. Change will come, whether it is ‘impaired’ is not possible to say; it will be change. Our existing models of governance in political and civil society are not fit for purpose and we must exert more to gain a better settlement. The dominant partial view needs to be replaced with something new, and ideally something more unifying.

  3. Bill Hughes -

    At the moment there are no countervailing powers to change or challenge the expoitative systems now in place, whether franchising or conventional vertical top-down managerial control. There may be hope in radical grass roots organisations springing up using non-violent direct action. It seems the old utopianism of traditional anarchist, communist or socialist thinking has had its day (though useful) for evaluating where we go in the 21st Century..

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