Capitalism and Social Rights

Ellen Meiksins Wood

WE’RE TALKING HERE about rights and how to guarantee them in an unequal globalized society. I’m just going to take it for granted that all of us here believe in human rights in some sense of the term. Let’s start from the premise that all human beings, just by virtue of being human, are entitled to certain basic conditions of freedom and dignity which have to be respected by others, not just by other individuals but also, and especially, by people in power and by states. That’s something I’m sure everyone here can accept.

I’m also pretty sure that there’s wide agreement — no doubt universal agreement, in an audience like this — that those basic conditions of freedom and dignity include certain irreducible civil liberties and political rights, freedom of speech, freedom of thought and assembly, the right to due process of law, the right to vote, and so on.

But in the 21st century, that’s just the beginning of debate about rights. The question for many is whether human rights not only begin with civil and political rights but also end with them. The Universal Declaration of Human Rights established 60 years ago, for instance, talks about economic, social and cultural rights, and fierce debate about it still goes on.

Some people, especially in advanced capitalist countries and particularly in the United States, claim that there’s no such thing as economic and social rights. Well, that’s no surprise. There’s no mystery about why governments committed to neoliberal globalization would be especially hostile to ideas of economic, social and cultural rights. Even some who believe in guaranteeing certain basic material and social conditions for everyone don’t want to call them rights. They say that these are just aspirations — that they’re too dependent on available resources and can’t be enforced by the courts in the same way as civil and political rights.

Now I could just spend my time here arguing against those people who don’t accept the expanded conception of rights, those who think that rights are by definition civil and political, not economic, social or cultural. I could say that social rights are no more aspirational than are civil and political rights, even when they require more resources. All you have to do is look at countries where people are still struggling for political and civil rights, places where these rights are still very distant aspirations. Or I could argue that the full realization of civil and political rights ultimately depends on certain basic material and social conditions.

But I want to make a different point. I want to raise some questions about how we draw these distinctions among various kinds of rights in the first place, and I’m going to suggest that the neat distinctions we draw may be hiding some important realities.

Even people who believe in expanding the family of rights tend to talk about economic and social rights as distinct categories which should be added to the list of rights, alongside already existing civil and political rights. They often talk about progress in the achievement of human rights: certain civil liberties were established first in early modern Europe; then there were advances in the right to vote, ending in universal adult suffrage; and since the establishment of widespread political rights, especially since the enfranchisement of working classes, we’ve been fighting for new kinds of rights not recognized before, the rights we call economic, social and cultural.

There’s certainly a lot of truth in this way of looking at rights. It makes sense to think of the history of rights as an expansion from political to economic and social rights brought about by painful struggle, which is still far from finished. But looking at it this way also disguises some very important things.

In fact, we could just as easily say that the history of rights has been a contraction, not an expansion, of political rights — not an expansion from one set of rights to another but a contraction of political rights to exclude the social and the economic. Political rights have certainly expanded in the sense that they’ve become more universal. More and more people have achieved the right to vote. But at the same time, political rights have contracted in the sense that they now exclude so many aspects of life.

There was a time when fewer people had political rights, but the rights they did have were economic and social powers at the same time. Today that isn’t true. People with political rights may not have any social or economic power; and that’s one reason we’ve had to invent new kinds of economic and social rights.

Let me explain what I mean. I’ll give you the punch line first: we live today in a capitalist world, and capitalism has completely transformed the meaning of political rights and their relation to economic and social rights. The distinctive relation between political and economic power in capitalism is fundamentally different from anything that existed in the world before the system came into being. Capitalism has created a separate economic sphere with its own rules and its own forms of power; and political rights have been emptied of economic and social content.

At the same time, the system has produced a whole new set of social problems. In fact, I think you could say that the very idea of a distinct sphere of social problems belongs specifically to capitalism. The idea of “the social question,” as it came to be called in the 19th century, is very specifically related to the development of capitalism, with its propertyless laboring class. And it’s specifically in the conditions of capitalism that we’ve had to start thinking about social rights, social justice, social citizenship, the social economy, and, yes, social work.

In other words, just when political rights have been emptied of social content, there’s a whole new range of social problems, and one of the great debates of our time is how, or even whether, the political power of the state should intervene to solve them.

Is Capitalism the Natural Order?

The whole debate on rights today takes capitalist conditions for granted, as if they were the inevitable, natural order of things, whether we like it or not. But once we recognize the distinctiveness of capitalism, its specificity as a particular moment in history with a beginning and presumably an end, once we start considering its very particular consequences, the whole question of rights starts to look very different.

Under the capitalist system basic goods and services are produced for and obtained from the market. But above all, it’s a system in which the main economic actors, workers and employers, are dependent on the market. Market dependence is the essence of the system. This unique way of organizing material life has had a relatively short history. Other societies have had markets, but only in capitalism is dependence on the market the fundamental condition of life. This means that a wide range of human activity is subject to the market and determined by its requirements in a way that was never true before.

In mature capitalism, the workers who supply our goods and services are market-dependent because they generally live by selling their labor-power for a wage. In other words, labor-power has become a commodity. Capitalists depend on the market to purchase labor power and capital goods, and to sell what the workers produce.

But here’s where it gets tricky. Workers are paid for their work. That seems just the opposite of peasants exploited by landlords, peasants who pay some kind of rent to the landlords. But do workers in capitalism really get paid for all the work that they do? What are they actually paid for? They’re paid for their labor power for a certain period of time, not for what they actually produce during that time. Whatever the workers produce belongs to the capitalist, and the capitalist appropriates the difference between what the workers are paid and what their products or services will fetch on the market.

So capitalists appropriate the surpluses produced by workers in the form of profit, just as landlords appropriate surpluses from peasants in the form of rent. It’s not just Karl Marx who called this exploitation. Even the grand old man of liberalism, John Stuart Mill, saw it that way. Capitalism, however, means a very specific way of extracting surpluses from workers — it’s not done by means of direct coercive force but through the market.

I’ll come back later to what this means for our theme, and the relation between political and economic rights. But first I want to make some other points about capitalism. The fact that capitalists can make profit only if they succeed in selling their goods and services on the market, and selling them for more than the costs of producing them, means that making profit is uncertain.

  Capitalists have to compete with other capitalists in the same market. Competition is, in fact, the driving force of capitalism — even if capitalists often do their best to avoid it, by means, for example, of monopolies. But the social conditions that, in any given market, determine success in price competition is beyond the control of individual capitalists.

Since their profits depend on a favorable cost/price ratio, the obvious strategy for capitalists is to cut their own costs. This means above all constant pressure to cut the costs of labor. This requires constant pressure on wages, which workers constantly have to resist. It also requires constant improvements in labor productivity. That means finding the organizational and technical means of extracting as much surplus as possible from workers within a fixed period of time, at the lowest possible cost.

To keep this process going requires regular investment, the reinvestment of surpluses. Investment requires constant capital accumulation. So there’s a constant need to maximize profit. The point is that this requirement is imposed on capitalists, regardless of their own personal needs and wants. Even the most modest and socially responsible capitalist is subject to these pressures and is forced to accumulate by maximizing profit, just to stay in business.

We can talk as much as we like about corporate social responsibility. But capitalism itself puts severe limits on that. The need to adopt maximizing strategies is a basic feature of the system and not just a function of irresponsibility or greed — although it’s certainly true that a system based on market principles will inevitably place a premium on wealth and encourage a culture of greed.

The need constantly to improve the productivity of labor has made capitalism exceptionally dynamic. It generates constant improvements in technology and what’s conventionally called economic growth. But the same market pressures that make it so dynamic also have contradictory effects. Capitalism is prone to constant fluctuations, not only short-term “business cycles” but also constant crises of overcapacity and overproduction and a tendency to long-term downturn and stagnation.

This isn’t the place to explore the whole complex problem of capitalist crisis. What I want to emphasize here are certain deep-rooted problems in capitalism critical to our discussion. Despite its dynamism, capitalism is not an efficient way of supplying crucial human needs. Capitalism may be efficient in producing capital, and it’s certainly true that capitalism has generated great material and technological progress. But there’s a huge disparity between the productive capacities created by capitalism and what it actually delivers.

Production is determined not by what’s needed but by what makes the most profit. Everyone, for instance, needs decent housing, but good and affordable housing for everyone isn’t profitable for private capital. There may be a huge demand for such housing, but it’s not what the economists call “effective demand,” the kind of demand with real money behind it. If capital is invested in housing, it’s most likely to be high-cost homes for people with money. That’s the whole point of capitalism.

Where production is skewed to the maximization of profit, a society can have massive productive capacities. It can have enough to feed, clothe, and house its whole population to a very high standard. But it can still have massive poverty, homelessness, and inadequate health care. You only have to look at the United States, where there are some of the highest rates of poverty in the developed world and where tens of millions have no access to affordable health care. What possible excuse can there be for that in a society with such enormous wealth and productive capacities?

Capitalism is inefficient in another sense too. With its emphasis on profit maximization and capital accumulation, it’s necessarily a wasteful and destructive system of production. It consumes vast amounts of resources; and it acts on the short-term requirements of profit rather than the long-term needs of a sustainable environment.

All aspects of life that become market commodities are outside the reach of democratic accountability. They answer not to the will of the people but to the demands of the market and profit. And that, as you can imagine, has huge implications for the meaning of political rights.

The Meaning of Globalization

What about global capitalism? The important thing to remember is that we’re still talking about capitalism, and not some other system operating according to different rules. What we mean when we talk about globalization, at least in its present form, is that more and more of the world is being drawn into the mechanisms of the capitalist market.

This doesn’t mean that all economies are developed capitalisms or even in the process of capitalist development. It simply means that market imperatives coming out of the developed economies have been imposed in one way or another everywhere. The primary objective of capitalist globalization, after all, isn’t to encourage development but to maximize profit for capital in the advanced economies.

If we’re talking about the globalization of market imperatives, it’s not surprising that all the problems of capitalism, all the problems caused by market imperatives, have been aggravated by “globalization.” It may be true that there’s been a reduction in the percentage of people overall who are living in poverty, but that’s far from being the whole story. Even in advanced capitalist countries the main beneficiaries of globalization have been in the top 20% income bracket; and some parts of the world, like sub-Saharan Africa, have been altogether marginalized and impoverished.

The gulf between rich and poor has been growing everywhere, not just between North and South but within developed economies. And while this has been going on, the rate of ecological degradation has also accelerated at an alarming rate. This isn’t just because we live in a global economy. The point is that global capitalism does what it does not just because it’s global but, above all, because it’s capitalist and because, local or global, capitalism is driven by market imperatives.

I want to emphasize two essential things, which have fundamental consequences for political rights and their relation to economic power and social rights. The first has to do with the relation between classes, those who labor and those who appropriate the labor of others. Capitalism is unique, because unlike any other system before it, the capitalist doesn’t need direct coercive force to get access to the worker’s labor.

Workers aren’t legally dependent on capitalists. They’re not slaves or serfs. They’re not in conditions of debt bondage or peonage. They’re obliged to work for capital not because they’re compelled by the capitalist’s superior force, but because they need to sell their labor power for a wage just to get access to the means of subsistence. This means that economic and political power have been separated in a wholly new way.

I don’t mean that the capitalist market can exist without support from the state. If anything, capitalism needs intervention by the state in some ways more than any other system, just to maintain social order and the conditions of accumulation. But the economic power of capital is separate from political power in two senses: the capitalist’s power over workers doesn’t depend on privileged access to political or legal rights, and possession of political and legal rights by workers doesn’t free them from economic exploitation.

The second major point is that the capitalist system is driven by certain inescapable imperatives, certain compulsions, the economic imperatives of competition, profit-maximization, constant accumulation and the endless need to improve labor productivity. These really are imperatives. They’re not just choices made by greedy capitalists. They’re conditions of survival for capital.

This is a critical point. We hear a lot about the free market, market choice and market opportunities. But when we talk about the capitalist market, we’re talking about compulsions, necessities, not simply opportunities and freedom. And much of human life is driven by these imperatives. They drive not just production and the allocation of labor and resources but many aspects of life outside the workplace, even down to the most basic organization of time.

It’s worth pointing out, too, that capitalism has produced a new kind of imperialism, which doesn’t necessarily depend on direct colonial rule. We’ve seen how capital can dominate labor without direct political coercion. Well, the same is true of imperial capital, which can dominate subordinate economies just by subjecting them to market imperatives, for instance through policies of so-called “structural adjustment,” the instruments of debt and conditional aid, and so on.

For our purposes here, what all this means is that much of human life and an increasing range of social practices are governed by market imperatives and not by political agency. This has huge implications for the meaning of political rights. Today, all advanced capitalist countries and many developing countries enjoy universal political rights. In other words, they have what we call democracy. But much of what governs our everyday lives has been put outside the reach of democratic accountability. It’s ruled instead by capitalist economic imperatives.

The irony is that every day, governments everywhere are deliberately putting more and more of our lives out of democratic reach, to be ruled by market imperatives. So what we’re talking about is a very particular kind of democracy. It’s very different from what the word meant in its original, literal meaning — popular power. When the word democracy was invented, political and economic power were so closely related that, if the common people did achieve political rights, as they did in ancient Greek democracy, they would be freed from the most common kinds of exploitation, like slavery or serfdom or debt-bondage.

It’s only in capitalism that we can even talk about a distinct economic sphere, with its own forms of power, its own forms of domination, and its own specific imperatives, none of which require the legal or political dependence of workers. The power of capital, and the imperatives of the market, dictate increasing aspects of our lives, even when we have universal political rights and legal equality. Capitalism has made possible a limited democracy, a democracy which is confined to a separate political sphere, while it leaves intact the distribution of power in the economic sphere. This kind of “formal” democracy is something that was never possible before.

Civil rights and liberties guaranteed by formal or liberal democracy are in themselves a very good thing, the product of long and bitter struggles. We need to do everything we can to preserve them where they do exist and to win them where they don’t. It’s obvious, too, that voting rights for working classes, and other rights like the right to autonomous trade unions, are vitally important and can make a huge difference. There’s no question that there’s a wide range of capitalist democracies, from neoliberal to social democratic varieties, and these differences matter. But we have to be clear about what all of them have in common, and what’s missing from capitalist democracy in all its forms.

There’s no such thing as a capitalism governed by popular power, no capitalism in which the will of the people takes precedence over the imperatives of profit and accumulation, no capitalism in which the requirements of profit maximization doesn’t dictate the most basic conditions of life. The essential condition for the very existence of capitalism is that the most basic conditions of life have been commodified, turned into commodities subject to the dictates of profit and the “law”’ of the market. Every human practice that’s commodified is outside the reach of democratic accountability.

The Struggle for Social Rights

Political rights in capitalism, even though they’re more widely distributed than they ever were before, leave out huge aspects of our lives. What do I mean, then, when I say that capitalism has also created a whole new realm of social problems?

It obviously doesn’t mean that capitalism is the first form of society to have poverty and human deprivation, or that poverty and deprivation are worse than they’ve ever been. Capitalism has certainly marginalized and impoverished many people, and it continues to reproduce poverty even in developed economies. But there’s no doubt that it has tremendously improved material conditions in general and raised the standard of living for vast numbers of people throughout the world. The point, though, is that it has also produced distinctive problems of a kind that never existed before, even in more prosperous economies.

Just think for a minute about the conditions of market dependence. What are the basic conditions that make people dependent on the market? The basic point is that market dependence in capitalism means that people have lost non-market access to the means of production and the means of subsistence.

When people are in direct possession of land, for instance, and when that possession doesn’t depend on success in the market, there isn’t what I’m calling market dependence or market imperatives. What we see in the history of capitalist development is the loss of that kind of possession. We see either complete dispossession for the majority, or the imposition of conditions that make possession dependent on success in the market, which for many people ultimately leads to dispossession.

We also see the destruction of communal networks — village communities, and so on — which traditionally gave people some kind of support in times of need. In the earliest days of capitalism, in England for instance, this meant among other things the loss of customary rights to the use of common land, in the famous process of enclosure. It also meant a change in communal values and changes in the way the law was applied. It meant new legal definitions of property in which any traditional commitment to a basic right of subsistence was replaced by the imperatives of profit. As capitalism developed into its industrial form, there were also measures, like changes in the system of relief for the poor, designed to uproot people from their local communities, to increase the mobility of labor.

Today, the spread of capitalist imperatives means structural adjustment. It means the privatization of just about everything. It means what some people have called a whole new process of enclosure. In agricultural economies, for instance, it can mean outright dispossession of small landholders, or it can mean the imposition of economic policies that force producers to abandon strategies of self-sufficiency in favor of export-oriented strategies, the production of single cash crops, and so on. It also means, as it did in the early days of capitalism, the break up of various social networks which people have relied on for support.

The basic principle of the capitalist system is the isolation of individuals and their naked exposure to market imperatives. It means eliminating everything that stands between people and dependence on the market, everything that makes them autonomous from the market. And when social life is driven by market imperatives, it’s also subject to the cycles and crises of the market. For example, dispossessed workers, who depend on selling their labor-power for a wage, have nothing to fall back on when the market doesn’t need them.

It’s not hard to see how this has created new social problems, and right from the beginning, the state has had to deal with them. From the earliest days of capitalism, the state has had to deal with growing numbers of dispossessed people, people with no property, no access to the means of subsistence, no customary rights, no social or communal supports. The state has had to deal with them not just out of humanitarian concern but out of fear of social disorder, even social disintegration.

From the beginning of capitalism, the state has had to step in just to maintain social order or even to prevent revolution. In the early days of capitalism, nervous governments and property-owners used to talk about the threat posed by “masterless men” wandering around the countryside, men without property and without the discipline of service to a master. This was a danger that governments were forced to confront not only by means of law and order but also by minimal social provision, like the early English poor laws.

In the 19th century, and especially in the first half of the 20th, the threats to social order were even more dramatic — the threat of revolution, the threat of social disintegration in the long years of depression, and so on. Those threats, of course, led to the modern welfare state, the development of social democratic parties, and the implementation, even the invention, of many social rights.

Today even some social democrats have retreated from the welfare state and bought into neoliberalism. Even Scandinavian countries, the pride and joy of social democracy, have been in retreat; and here in Brazil, you know all too well how governments of the left have given in to neoliberal pressures. But even the most neoliberal regimes have needed at least a minimum safety net. If nothing else, they have to maintain a reserve army of workers, keeping them alive through moments in the economic cycle when they’re not needed so that they’re available when capital does need them.

Of course, there are still societies where even that minimal provision is still an aspiration and not a reality. But I suspect that most people here demand something more than a minimal safety net, something more like the most advanced welfare state. I’m sure you want social provision that isn’t just a means of keeping a reserve army of workers alive. It’s more a commitment to some kind of provision for various social needs, like health care or housing, which the capitalist market doesn’t supply, or at least not in ways that are affordable for everyone.

We all know that it’s a constant struggle to gain that kind of social provision or, once you get it, to keep it. Neoliberalism has taught us just how precarious these gains have been. We’ve learned a lot about how vulnerable they are to economic cycles and shifts in the political wind. Even the most secure gains, like universal education or old-age pensions or public health care systems like Britain’s National Health Service, have been subject to pressures for privatization and so-called market choice.

Capitalist Imperatives vs. Our Rights

Social provision is vulnerable and precarious not just because of changing political fashions but for a more fundamental reason, and that’s because it’s in constant tension with the imperatives of capitalism. It’s the imperatives of capitalism that make these rights necessary, and it’s capitalist imperatives that constantly threaten them.

It’s not enough to count on the state to pick up the pieces. Of course, it’s vitally important to elect governments that recognize the importance of social provision and will do what they can to provide it. But it’s not enough to count on the state to allocate available resources to compensate for the damage done by the capitalist market, or even to supply what the market will not. If social rights are really going to be treated as rights, we have to stop the damage before it’s done. We have to challenge the imperatives that make social rights necessary in the first place and yet constantly threaten them.

How do we challenge those imperatives? It’s hard to see how we’ll ever overcome them completely without moving beyond capitalism and the commodification of labor-power. But speaking for myself, I have to start from the premise that capitalism won’t end in my lifetime — and I very much suspect it won’t end in the life-times of any of you, no matter how much younger than I you may be. So, what should we do?

We can start by treating social and economic rights in the same way as civil and political rights. Political and civil rights are aimed above all at limiting the power of the state and asserting the autonomy of individuals and communities. We’re all comfortable with that idea, the idea of rights as a check on power and a guarantee of autonomy. But my point is that capitalism has created its own distinct structure of power outside the state. We have to limit that kind of power too and to defend our autonomy against it.

What does it mean to assert our autonomy not just in relation to state power, but also against the power of capital? It means bringing democracy not just to the workplace but also to all spheres of life where it’s now excluded by market imperatives. It means challenging the power of the market. It means detaching as much of human life as possible from the compulsions of the market. It means a constant struggle for decommodification, the de-marketization of as many spheres of life as possible. It means taking basic necessities like health care, housing and food and converting them from commodities produced for profit into truly social rights.

This obviously isn’t a simple matter. If many of the most progressive governments in our globalized world have retreated from a commitment to social rights and social justice, it’s not just because they’ve lost their nerve or political will. The economic pressures really have been greater since the end of the long postwar boom, and capitalism really has imposed more powerful structural obstacles. But that doesn’t mean that governments should go even further into retreat. On the contrary, it means they need to make a real leap forward

If anyone tells you that globalization has made the state irrelevant or powerless, just don’t believe it. Global capital may move around the world freely. It may cross all kinds of territorial boundaries. But it needs local support and enforcement as much as it ever did, maybe now more than ever. Instead of using state power to draw us ever further into market imperatives, as so many governments have been doing, that power can and should be used to challenge those imperatives at home and abroad.

State power can and should be used to convert human needs and public goods from commodities into social rights. This means that truly democratic forces, at local and national levels, both inside and outside the state, can make a real difference. They can push the state to pursue a program not only of social welfare but of decommodification and democratization.  And that puts you, as social workers, in the front line of the democratic struggle.

ATC 140, May/June 2009