Bouman on the welfare state

Among its many other functions, the welfare state performed a crucially important role in the perpetual recommodification of labour; by providing good quality education, an adequate health service, decent housing and healthy nourishment for the children of poor families, it assured a steady supply of the capitalist industry with employable labour – an effect no individual company or group of companies would be able to secure on their own. As the perpetuation of the capitalist mode of production depends on the constant purchase of labour, prospective labour must be made into a commodity which the prospective employers would be willing to buy; the employers could not and would not purchase an inferior product. The welfare state kept a 'reserve army' of labour in a state of constant readiness for active service, and kept it in the right shape and condition while its services were not needed.

However, the prospect of employers needing again the services of the reserve army of labour presently under state-administered care are growing increasingly remote. Presently redundant labour may never again become a commodity – not so much because of its own defective quality, as due to the absence of demand. Such a demand as is still likely to emerge on the domestic labour market – demand for casual, occasional and flexible (that is, not 'exceedingly profiled' or 'overtrained') labourers, is likely to ignore the kind of well-educated, robust and self-confident labour force that the welfare state in its halcyon days sought to cultivate. Even those relatively small quantities of old-style labour that parts of modern industry may still need are likely to be sought and found far beyond the reach of any single state, given finance's new unbound freedom of movement and the much cherished flexibility of deregulated capitalist enterprise.

However cumbersome tax-wise, the state-administered welfare services were from the companies' point of view good investments, assuming that an additional labour force would need to be hired if a company wished to expand, and that it was from the pool of the state-welfare users that companies would need to draw whenever they wished to replenish their labour resources. Given however the rapidly falling role of labour in production and the global dimensions of companies' freedom, the investment in welfare provision does not seem all that profitable after all; the same and better effects may be obtained at much less cost. The 'flags of convenience' cheaply obtained in the far-away places under the aegis of less demand-burdened governments seem to be a much better idea.

This newly obtained freedom of movement comes together with freedom from the financial burden of replenishing the pool of labour: seemingly inexhaustible reservoirs of raw, pliable and unspoiled labour beckon and lure from afar. On a planet covered in part by societies of sophisticated consumers, there are still vast virgin territories where submissiveness of labour may be obtained without the need to whip up consumer desires; where the rough demands of the struggle for survival will do the job which elsewhere calls for inventing ever-new desires clamouring for satisfaction and for keeping wages up so that these desires can turn into universal needs.

This seems to be the logic of capitalist reproduction: having manoeuvred itself into the use of consumer desires as the major mobilizing and integrating force and the royal road to conflict-resolution and order-maintenance, the capitalist approach tends in the long run to 'price labour out of work'. Each successive plot ploughed up by the capitalist mode of production suffers sooner or later from soil exhaustion and falls victim to the law of diminishing returns. In order to keep production profitable, new – virgin, uncultivated – lands must be sought. This predicament goes a long way towards explaining the pressure to dismantle all the barriers to free trade and above all to the free movement of capital. All the more so, as that pressure goes hand in hand with another pressure to make the walls barring free movement of labour watertight.

And so the 'reserve army of labour' and the costs of its readiness for active service are now global, while all welfare provisions are state-bound and – like the state authority itself – local. The arms of the state are much too short to reach where it truly counts. To the expansion and security of capital the old-style states assistance has become largely irrelevant. The local businessmen knowing only too well that to remain businessmen they had better stop being local, need their prime-ministers and foreign secretaries mostly as their trade agents to introduce and endear them to the authorities of the targeted localities during their diplomatic voyages, and if need be to subsidize the trips.

And so the paramount interest, arguably the main axis in the cluster of interests which stood at the cradle of the welfare state, has been removed from the project it once held together. Without it, the whole cluster falls apart, losing, above all, its economic foundation. Seeing no benefit in paying for the 'recommodification' of labour which they are unlikely ever again to need, businessmen worth their salt use their new global freedoms to take their money and their enterprise abroad, to less demanding places, the moment they are asked to partake of the costs of welfare. The governments who insist on keeping the standards of welfare intact are therefore haunted by the fear of a double whammy: the homeless and disinherited flocking in, the capital (and so the potential income sources) flocking out.