The Myth of the Labour Market

Abstract

24 | International Union Rights | 28/2 FOCUS | A CHANGING POST-PANDEMIC WORLD FOR LABOUR I There are a number of expressions which are particularly grating, especially when spoken by comrades in the trade union movement. Hearing the British Prime Minister referred to affectionately as ‘Boris’ is one, the use of the phrase ‘labour market’ is another. The phrase ‘labour market’ gives a legitimacy to a capitalist mythology in which buying and selling labour is a natural and unalterable part of the human condition, in which humans who work for a living are no more than disposable ‘human resources’ and in which those who sell and those who buy labour have some equivalence of bargaining power as they contemplate the wares on the stalls in the ‘labour market’. These myths are unrelated to the reality of capitalism. For most of the 3 million year of hominid, and the 150 thousand years of human, history there has been no buying or selling of labour; whatever required more than one person to do was done collectively in the common interest: raising the young, caring for the elderly and sick, gathering food, hunting, building shelter and so on. No-one paid or received pay for work. Nor, the anthropologists (e.g. David Graeber, Debt: the first 5,000 years) tell us, did they barter. Those able to help were expected to and did help; favours were met with favours without valuation of equivalence or worth. Humans are cooperative beings and worked co-operatively in their communities. There are still societies which live like that outside the reach of ‘civilisation’. Even in feudal times little labour was paid for, though the landlord took his slice of the peasant’s produce and, often, his labour. It is capitalism which has generated the ‘work/wage bargain’, as scholars of the contract of employment have pointed out. II The idea of a bargain, freely negotiated, is one that underpins the legal mythology of ‘freedom of contract’ at work and supplies the moral justification for enforcing its terms by law. The trouble is that in the world of work there is no such freedom to bargain. For all but a tiny exceptional class of workers who have near unique and indispensable skills, individual workers do not negotiate; each is faced with terms set by the employer on a take it or leave it basis. Workers need to work in order to support themselves and their families; the alternative is dire poverty, as Universal Credit and the demeaning rituals required to obtain it demonstrates. Even our Supreme Court has recognised the fundamental imbalance in power between the worker on the one hand and the employer on the other. Because of that fundamental inequality in bargaining power at the workplace, inherent in capitalism, laws have been put in place to moderate the exploitation of humans by capitalism based on a free market in labour. These laws are modest in the extreme and are just enough to prevent life being so intolerable that the stability of society on which capitalism relies is threatened. So the capitalist establishment (by which we mean parliament and the courts) has placed certain minimal limits on the freedom of employers to exploit their power (though, as we have seen in the COVID-19 pandemic, often these limits are not enforced). Thus the ‘free market’ in the hire of labour has certain (minimal) limits at the extremities of exploitation: laws against slavery and unwarranted deductions from wages, compensation for unfair dismissal and redundancy, minimum health and safety at work requirements, requiring equal pay for equal work, against discrimination on specified grounds, and so on. Trade unions have, of course, supported such measures which are, unsurprisingly, largely (but not universally) welcomed by workers. Employers too have benefitted and enlightened employers have supported such measures. This is because, as well as stabilising society, labour laws tend to increase worker spending power generally. This correspondingly increases demand in the economy and hence benefits employers supplying goods and services. More efficient employers prepared to invest in their businesses also benefit because such measures tend to preclude undercutting on labour costs and hence favour those which invest in competitive advantage by other means...