Academic journal article Capital & Class

The Political Economy of Public Sector Trade Union Militancy under Keynesianism: The Case of Local Government

Academic journal article Capital & Class

The Political Economy of Public Sector Trade Union Militancy under Keynesianism: The Case of Local Government

Article excerpt


This paper uses an historical perspective to argue that the shift to

neoclassical economic orthodoxy (New Right thinking) ushered in after 1979 in the UK does not represent an entirely new approach to state intervention (Chomsky 1999), for political economy 'has oscillated between free-market and interventionist phases' over the last two centuries (Kotz and Wolfson 2004: 39). Polanyi (2001) calls this the 'double movement': periods of laissez-faire succeeded by protective counter-movements to offset the adverse social consequences of the free market. The paper contributes to this debate, drawing on

Polanyi's concept of the double movement to show that the protective countermovement has always been characterised by a 'residual' approach to intervention that retains, at its heart, the contradictory nature of the state under free market capitalism. It does this through an examination of public-sector union militancy under Keynesianism.

The historical analysis shows how the New Right's claim--that Keynesianism and state intervention create economic ills by disturbing the natural equilibrium of the free market--can only be sustained if one ignores or distorts the 'indisputable facts of economical history'; that is, 'the beggary of the working classes' (Rogers 1905: 352). In other words: while the 'doctrine' of laissez-faire holds that state intervention in the economy should be minimal (Hayek 1986); in practice capitalism's 'inherent instability' (Krugman 2009) not only requires the very state intervention that its ideology decries, it also entails that the state intervene to protect the interests of private wealth accumulation against the interests of civil society (Arendt 1993). For Hobsbawm (1968: 205), 'Total government laissez-faire is ... a contradiction in terms. No modern government can not influence economic life' (italics in original). It is argued here that the doctrine of laissez-faire is grounded in the contradictory proposition 'X', viz. 'The state should both intervene and not intervene in the economy'. The ensuing contradictory nature of laissez-faire has malign social consequences, and generates a series of paradoxes. One such paradox is the focus of this paper: the paradox of public service labour whereby it is treated as if it is and is not public service labour.

The rise of public sector union militancy in the post-war period can be traced to two contributory causes: the residual nature of Keynesianism, and the lack of a systematic analysis of the distinctiveness of public service labour. Residualism, here, denotes an approach to state intervention that aims merely to offset the worst social consequences of a free market, not to dismantle it. This approach is exemplified by liberal political economists such as Mill and Keynes. It is argued that 1978-79's 'winter of discontent' was due, in part, to the treatment of public service workers as if they were private sector workers. Support for this proposition is provided by the arguments and evidence presented below regarding the uneven impact of incomes policies on low-paid public service workers.

The paper is structured in the following way. The opening section summarises the argument, and the conceptual framework that forms its basis. It draws out some crucial links between residual intervention and the social praxis of public service unionism. It also sketches out a Marxist analysis of the distinctive features of public service labour in order to contextualise the critiques of liberal accounts of public sector employment provided later. The next section outlines the contradictory nature of the state under capitalism, and hopes to show how liberal political economists like Mill and Keynes, despite relaxing the laissez-faire doctrine, nevertheless left the contradiction 'X', viz. 'The state should both intervene and not intervene in the economy', intact.

The following section summarises a number of influential approaches (for example, Mill, the Webbs, GB Shaw) to public service labour, showing that these have been partial and conflicting. …

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