William Mitchell exposes the many ideological maneuvers progressives need to confront in disputing the supremacy of profits over employment and people’s dignity. That goes for disciplining the state to appease foreign exchange markets, the problems with Basic Income proposals, and much more. Lynn Fries interviews William Mitchell on GPEnewsdocs.

• Transcript

LYNN FRIES: Hello and welcome. I’m Lynn Fries producer of Global Political Economy or GPEnewsdocs. Today’s guest is William Mitchell. He will be talking about a progressive vision of society for a post neoliberal world.

William Mitchell is a Professor in Economics and Director of the Centre of Full Employment and Equity, at the University of Newcastle, Australia. Some of his recent books include Eurozone Dystopia, and Reclaiming the State. Welcome, Bill.

WILLIAM MITCHELL: Thank you. Thanks for having me.

FRIES: We are going to be discussing a progressive vision of society, as opposed to that of the neoliberal world. The obvious place to start seems to be the role of workers. What would a progressive concept of productive labor look like in the private and public sector respectively?

MITCHELL: If you go back to the sort of 1930s, when a lot of these ideas started to be developed, there was a concept called the gainful worker. And a gainful worker was defined as someone who really contributed to the creation of private profit through their labor.

So already it was a biased or a loaded concept that was explicitly associated with capitalist surplus value production and realization of profit. And so, if you think about that, then it excluded a whole lot of other things that, uh, people could do with their labor power, that didn’t contribute to private profit. And that really became the, the dominant concept of productive work.

That if you weren’t doing that, then you were unproductive. And so, a whole lot of biased concepts and opinions about, for example, public sector employment that aims to provide services to the community. That was considered to be somewhat suspect.

And going one step further, if the government sought to use its fiscal capacity to introduce job creation programs when in times of high unemployment (then was the sort of work that we saw during the Great Depression and subsequent downturns), that work was dismissed as make work or boondoggling or leaf raking. You know, a number of pejorative descriptors that were designed to bias the opinion of the listener or the reader to: well that work is useless and it’s not productive.

And that’s really biased the way we’ve thought about what prospects we have for solving mass unemployment and the options that governments have. Because governments then, particularly in this neoliberal era, have become incredibly fearful of being dismissed as supporting make work schemes. And it’s really turned our attention away from really useful policy implications.

Now if you then take that orthodoxy and think about, well, what’s wrong with it? Well, what’s wrong with it is it evaluates worth in terms of private costs and benefits. So what’s good for the bottom line of a corporation is equated with what’s good for society. Now there’s a whole body of literature that tells us that that can’t possibly be true.

That there are so many things that can be done in a societal sense that don’t have anything really to do with advancing the profit potential of corporations that add value to our lives and our society which can be undertaken. And so in my view, we have to broaden our concept of worth into social benefits and social costs and consider things not in terms of private terms but in terms of social terms.   

Now there’s a whole range of activities then that immediately become productive and worthwhile, that will never be done as an outcome of the calculus of whether it’s profitable for private companies or not, and are incredibly beneficial to society.

So once you start thinking like that, a very broad concept, then the options that open up to policy makers and our response to those options in a political sense become quite different to the way we think now.

FRIES: Explain how we got to this way of thinking. How as you say our way of thinking about work has changed from thinking of work as something that’s beneficial to society to thinking work is only valuable if it contributes to profits in the private sector, so private profit. And that public sector work is worthless, a boondoggle. 

MITCHELL: Well, I think in the immediate post Second World War period, the role of the state was really different to what it is now. The state in my view in broadly the 30 years after the end of the Second World War was a mediator in the conflict between labor and capital.

And so it stood between those two conflict conflicting classes and sought to appease that conflict in various ways, but with a definite bias towards lifting the material prosperity of labor. Through a number of ways but broadly through ensuring there was true full employment. That everybody who wanted a job could find a job. Ensuring that there was a safety net for those who for some short period couldn’t find work.

That was then broadened into concepts of welfare states that ensured the people who couldn’t work were able to be supported in sickness, in incapacity of some sort or another through age. And the expansion of public education, public transport, public health systems.

All the things that we identify with that period of material prosperity, falling inequality. And, you know, pretty strong economic growth, and very high levels of employment, and major reductions in poverty after the destruction of the Second World War.

Now, you know, that didn’t appease; that didn’t satisfy the interests of capital. But they were really stuck because that social democratic era was a very powerful political force. That we were as voters and citizens, we were pretty engaged in ensuring that our governments would honor the agreements, you know, the visions that they had outlined in 1945, 46, 47.

Now towards the end of the 1960s, there was a major counter attack from capital. It was organized. In the United States, there was a so called Powell Manifesto that was released. And that manifesto outlined a multi pronged way in which capital could fund initiatives to restore the political balance in their favor.

And the rise of think-tanks and the infiltration of the media and the creation of what we now see as Fox News in America and, you know, the, the derivatives elsewhere. The infiltration into the education programs and, and a range of other strategies that were very well funded and very well executed.

And the state didn’t go away; it didn’t wither away with globalization. It just became reconfigured to serve the interests of capital. The accomplishments or the changes that we deem to be characteristic of neoliberalism were really accomplished through the legislative power of the state.

And the state has really become an agent of capital working to benefit that class and using the working class as fodder.

And, progressively what that strategy has done has created the so called gig economy; has retrenched a lot of welfare provisions that the state provided. Privatized a lot of the utilities and turned them into profit making bonanzas for capital. A range of other things that have accompanied that retrenchment of the social democratic era.

And that’s where we are now. And you know we’re in a parlous state because of it.

FRIES: So with the retrenchment of the social democratic era, you are saying the state did not go away. Bit in keeping with a planned strategy from the late 1960s, capital reconfigured the state to serve its interests. From the gig economy to the privatization of public utilities, you have given us a diverse range of examples of the outcome.

Your argument being a progressive framework would place society rather than private profits at the center of public decision making. And that to advance this kind of progressive vision, progressives will need to re-establish a core focus on the main contradictions of the neoliberal paradigm.

So expand on that and also give us a sense of whether or how such contradictions and so conflicts can be resolved within the capitalist system. Start with some history on how this paradigm became mainstream in the first place. And so what you see as deep roots to the current challenge facing progressives.

MITCHELL: I think the progressive side of the debate really sold out in the 1970s. And they bought the line that the pressures of global capital and the globalization of supply chains, etcetera, had rendered the state ineffective. And that the role of the state had to be modified. So that it initially appeased the foreign exchange markets or else those markets would retaliate and cause currency havoc within the countries.

And so at that point, the progressive side of the debate really abandoned the macroeconomic terrain as a contestable terrain. And started to focus research and activism on all sorts of things like identity and methodology and a whole range of important but distractions from the main game.

We evolved into progressive writers even saying that the old framework where class conflict was the organizing framework for discussion was irrelevant now. And so you had progressive writers sort of talking about, to use an example, saying that working class women had more in common with their female bosses than they did have with their fellow male workers.

And, you know, the abandonment of economic class as an organizing framework has been very pronounced. The issues about identity or race and sexuality and gender, they’re not unimportant areas of inquiry. But I don’t consider that they should subjugate the starting point as being economic class in a capitalist system.

And so what we’ve had is a few decades of progressive discussions that are really conducted within the framework set at the macro level by the neoliberals, by the mainstream, by the orthodoxy. And that becomes a straitjacket.

I’ve <