The Progressive Post

Fighting precarity: a paradigm shift from equality-in-prosperity to solidarity-in-wellbeing

Associate Professor in Political and Social Theory, Brussels School of International Studies (University of Kent)

We stand at a pivotal point in history – one that contains the opportunity to replace the equality-in-prosperity formula of progressive politics with a new one: solidarity-in-wellbeing. For the past 100 years, the critique of capitalism has centred on unfair distributive outcomes (economic inequality), as well as the damage that consumerism and the commitment to economic growth cause on human life, society and the natural environment. Solutions have ranged from wealth redistribution and increased worker representation in companies’ decision-making bodies, to socialisation of the production process (via collectivisation of property ownership), and ‘green growth’ by way of replacing fossil fuels with clean energy sources.

Contemporary capitalism: a diagnosis

In Capitalism on Edge (2020), I have observed that the nature of contemporary capitalism makes these strategies ineffective for progressive politics. This is because under the conditions of global market integration, the key systemic dynamic of capitalism – the competitive production of profit – cannot be effectively countered by distributive measures and structural reforms. A comprehensive plan for transcending capitalism and eliminating the injustices associated with it (impoverishment, exploitation, alienation and ecological crisis) must thus address all three dimensions of capitalism’s impact:

1) the relational dimension of the unequal distribution of power which generates inequalities and exclusion;

2) the structural dimension of the institutions through which relational injustices occur;

3) the systemic dimension of the competitive production of profit which binds science and human creativity to the profit motive. In what follows, I will address the importance of this third dimension for progressive social reform and will propose some solutions.

The overarching significance of this third, systemic dimension in the functioning of capitalism is determined by the idiosyncrasy of our current modality of capitalism.

In its historical development, democratic capitalism (the prevailing form of capitalism in Western societies) has transitioned through four sequential forms: the liberal (entrepreneurial) capitalism of the 19th century, the coordinated (or ‘organised’) capitalism of the four post-war decades, the neoliberal capitalism of the last two decades of the 20th century, and currently, what I have described in my recent book as ‘precarity capitalism’ – a modality that emerged in the early 21st century and matured in the course of coping with the economic crisis of 2008 and the Covid-19 pandemic of 2020.

This current modality is marked by two distinctive features. First, global market integration has expanded the scope and deepened the intensity of competitive pressures. Importantly, the global economy can no longer be plausibly described as a space of national economies integrated through trade. It is a system of transnational production networks and supply chains which engulf a multitude of political regimes (from the autocracies of Vietnam and China to the liberal democracies of Europe) and national economic systems (from the state-controlled socialism of Vietnam and the state-managed capitalism of China to the free market capitalism of America).

The ease with which autocratic regimes increase profits through wage repression and environmental devastation further intensifies the competitive pressures on liberal democracies. Furthermore, the IT revolution, or digitalisation, has facilitated automation. This, in turn, has allowed an increase in productivity while at the same time reducing the need for human labour. These features of capitalism began emerging in the late 20th century.

As a result, governments across the left-right political spectrum began to undertake a policy shift to adjust to this new reality: they committed to maintaining competitiveness in the global market as a top policy priority. The switch from the growth-and-redistribution agenda of the post-second world war welfare state to a stress on competition in the late 20th century and, even further, to an emphasis on competitiveness in the early 21st century has had a far-reaching societal effect.

In pursuit of competitiveness, governments started to undertake the liberalisation of labour markets which allowed them to produce a flexible workforce that could be adjusted to the demands and pressures of global competition. At the same time, governments began helping those economic actors (large corporations) that already had a competitive advantage in the global economy. This increased competitive pressures on the rest of market participants. Governments also reduced social spending as they deemed that in conditions of open markets, where capital flight is easy, the state had lost much of its power to tax capital. This tendency was exacerbated by the financial crisis of 2008 as governments adopted ‘austerity policies’ (via the reduction of government spending and/or income tax increases) in an effort to reduce budget deficits and stabilise their finances.

The combined effect of these technological and policy shifts has been the creation of massive precarity – a state of economic, social, and psychological insecurity. The experiences of precarity vary according to type of employment and level of remuneration. However, overall, precarity as a social condition rooted in real, perceived, or anticipated threats to livelihoods, cuts across gender, age, class, and occupational differences. Precarity is at the centre of the social question of our times and should be the focus of progressive economic and social policy. It is the failure of public authority to counter precarity that has eroded solidarity, diminished citizens’ trust in the main institutions of liberal democracy, and fostered the anti-establishment revoltthe upsurge of populism.

Precarity is generated along two trajectories: a personal and a societal one. Along the personal trajectory, precarisation is a result of diminished security of key sources of revenue. This is, typically, a result of job insecurity, the investment of personal savings (including through pension funds) in global financial markets, and the reduction in scope and amount of social security provisions. Along the societal trajectory, precarisation results from diminished investment in public services such as healthcare and education, and from subjecting essential spheres on which societal well-being depends (such as science, culture, education and health) to imperatives of profit-creation.

This has resulted in the fragility of our societies and their incapacity to safeguard their well-being despite their material affluence and their unprecedented scientific and technological sophistication. The Covid-19 pandemic (the transformation of an infectious disease into a public health crisis) is a direct outcome of the societal trajectory of precarity. Cuts to budgets for research and public healthcare had left governments with deficient capacity to react in a timely manner to the spreading contamination; governments had lost time for vaccine-development and struggled to provide essential equipment for medical personnel and patients, as well as to organise large-scale testing of their populations.

An example of one of the engines of social precarity is that in 2017, within the Innovative Medicines Initiative (a public-private partnership funding health research and innovation), the European Commission proposed the development of vaccine for pathogens of the Covid family. The participating pharmaceutical companies rejected the proposal on the grounds that such investment would not be profitable. The rationale of market efficiency was thus allowed to guide policymaking on matters of public health, with tragic consequences for society.

Because the core dynamic of capitalism – the competitive production of profit – is at the root of both trajectories of precarisation, policies that oppose this dynamic will result in exiting capitalism.

Of course, every society needs to produce its material conditions, preferably in an efficient manner, if it values its natural resources and labour power. Profit is the outcome of economic efficiency. Competition can spur innovation and even foster solidarity through a commitment to a common cause. However, a distinctive feature of capitalism is not simply that the economy is run through competitive practices aiming at economic efficiency, but that economic activity is motivated by the competitive production of profit (what Marx called ‘the profit motive’). What marks capitalism is the association of the three elements: the productivist nature of work, the motivation of economic activity by profit, and the competitive nature of the pursuit of profit. Opposing the competitive production of profit – capitalism’s very constitutive dynamic – would thus amount to demolishing capitalism without the help of a guiding utopia (eg, socialism) or a revolutionary break.

Policy reforms: towards a political economy of trust

Three considerations will guide my proposal for a policy reform.

First, it is important to note that the classical toolbox of Left policies (redistribution and collectivisation of production) is currently inadequate for countering precarity. This is because even societies which are relatively (or even perfectly) egalitarian, and in which productive capital is owned or controlled by the workers, would remain subjected to the pressures of the competitive production of profit that global markets generate. Units of socialist organisation of production would thus behave as actors in a capitalist system to the extent that livelihoods continue to be dependent on the successful pursuit of profit in the global economy – with all the resulting damage this incurs on individuals, societies and nature.

Progressive social reform therefore needs to focus as a matter of priority on countering the competitive production of profit as a key engine of social precarity.

The second consideration regards the futility of a return to the growth-and-redistribution policy formula that had secured the relatively egalitarian prosperity during the golden age of the welfare state (from the 1950s to the early 1980s). Going back to this formula is futile because it was based on stimulating consumption by boosting demand – an approach that proved to be detrimental to nature. A social justice agenda focused on growth and redistribution is therefore incompatible with environmental justice.

Instead, fighting precarity perfectly aligns social and environmental justice, because the focus is on the stabilisation of economic and social conditions, on securing personal and societal well-being, rather than on the pursuit of material prosperity.

Third, social solidarity is the proper basis of a thriving society. Solidarity is not synonymous with economic equality, just as inequality is not necessarily detrimental to solidarity. Thinking of social justice in terms of equality between individuals obscures the importance of the commons and reproduces the individualistic fallacy typical of neoliberalism. If it is precarity that is the main culprit in the destitution of our societies, obtaining solidarity by fighting precarity is therefore the main objective of ‘a political economy of trust’.

1) Fighting personal precarity: voluntary employment flexibility

As noted earlier, we inhabit a social context marked by a political economy which does not produce good jobs for all, while labour decommodification is technologically attainable due to the unprecedented advancement of information technology. The reduction of time spent in paid employment, as well as the flexibility of employment, are highly valued in our societies. However, employment flexibility enhances personal freedom only if flexibility is voluntary. In other words, the conditions must be put in place to allow people an easy entry into the labour market, as well as an easy exit from it – in a formula of voluntary employment flexibility. This can be achieved through two sets of policies:

i) a trans-European social security provision (universal and unconditional welfare) would make essential social safety independent from an employment contract (thus not directly predicated on participation in the labour market). This can be achieved via a combination of free education and healthcare, affordable housing provision, denizenship-based unemployment benefits, and a minimum income. (Denizenship – from ‘denizen’: a person who resides in a given country but without the formal status of being its citizen.)

As a start, the temporary employment reinsurance scheme (SURE) which the European Commission adopted during the pandemic should be made permanent and expanded to include all forms of precarity and self-employment. Funding for such a trans-European social security provision could be secured by granting EU bodies the power to tax ‘a single market levy’, or by creating a trans-European public sector – for example, building and operating infrastructure as a source of revenue, owned and managed centrally by the EU.

ii) a ‘universal basic employment formula in which the creation of jobs that arenot directly committed to the profit motive (for example via community employment) should be combined with job sharing (which will necessitate a mandatory limitation of working hours). The European Union already has some experience with social enterprises, and this needs to be expanded and properly institutionalised.

The combination of these two measures will incentivise the labour-market insiders to leave paid employment earlier and more often, which will open the possibility for labour-market outsiders to enter the labour market at will.

2) Fighting societal precarity: a robust public sector

The Covid-19 pandemic has brought to light the significance of social infrastructure – in terms of public investment in science, and the availability of a well-funded public health service accessible to all. Countries where public spending had been severely cut as part of austerity policy over the past decade (for example Italy and the UK) have been worst affected by the health crisis. Developing a robust public sector (both in terms of expanding public services and building public enterprises, as discussed above) is thus essential for eliminating precarity.

Usually, the robustness of public provision is gauged as a ratio of state expenditure to gross domestic product. However, an increase in public expenditure is a necessary but insufficient condition. It will be crucially important to eliminate considerations of profitability (but not of economic efficiency) in decisions regarding essential public services such as healthcare, science and education. This will require a thorough overhaul of the decision-making structures at local, national, and EU-level, so that decisions regarding productive inputs and social surplus can be made with a view to social needs rather than the pursuit of profit.

3) The overarching policy priority: altering globalisation

Enacting the above reforms would not have a significant impact unless our societies are insulated from the competitive pressures of the global market. The global economy is no longer an agglomeration of national economies mutually connected via trade agreements, but societies integrated via production networks that span the globe. That is why it is futile to undertake economic reforms first within the bounds of nation states and then to seek to negotiate trade agreements. We must alter the nature of production in these global production networks. As a matter of urgency, therefore, the rules of globalisation need to be rewritten by inserting stringent labour- and environmental standards in trade agreements regarding domestic production processes. The recent change of administration in the US provides a last chance for the EU and America to unite their powerful economies through such a trade agreement. The rest of the world will have to follow if it wishes to gain access to this vast economic space.

Together, these three sets of policy reforms would engender what I call a ‘political economy of trust’ which, by placing people before profits, would gradually bring about societies marked by both freedom and solidarity.

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