Handbook for Democracy: Economic Deprivation

This essay is an entry in the Handbook for Democracy, a catalog of power techniques used by elites to exercise control and undermine the democratic self-government of the people.

The next basic power technique is economic deprivation: if you can deprive an individual or group of the material resources needed for survival, for comfort, or to achieve important goals, then you can exert a great deal of control over them.  Economic deprivation is only one step removed from direct coercive force: whereas force causes harm directly, economic deprivation causes it indirectly.  If I hit you or shoot you I harm you directly; if I deprive you of food, with some delay starvation causes harm – but I have caused the starvation.  Yet the harm is certainly proximate enough to function as a powerful control technique.  In the case of both force and economic deprivation, not only the act, but also the threat, is sufficient to exert power.

Economic reward is the flip side of this power technique of economic deprivation, but is interesting enough to be explored on its own, and in my opinion is secondary to economic deprivation as a systemic control device.

The basic power principle of depriving or threatening to deprive someone of needed material goods and services is applied in many ways by human beings to exert economic control over each other.  While methods like criminal extortion or slavery mainly use the threat of direct force, both wage labor and capital flight mainly use the threat of deprivation.  It is even the basic mechanism by which the market controls market participants: buyers can threaten to take their money elsewhere.  It is also a means by which working people can exert control over economic elites, on the occasions in this capitalist age when they are able to do so, in the form of the work stoppage or strike, which deprive the capitalist elite of the absolutely essential resource of labor.

Consider the example of wage labor.  The predominance of paying wages for work, the whole institution of the “job,” is a modern invention of capitalist cultures (when compared to slavery or serfdom in the past, or to cooperative ownership used by a few business enterprises now).  Under a wage system, elites who have accumulations of money exchange it with those who need it for their labor.  If you have the ability to deprive someone of this stream of monetary income, then in the final analysis you have the ability to deprive them of material goods – such as clothing, shelter, food, and everything else – that they need to survive, or to achieve any of their life-goals.  The ability to hire and fire people, or even simply to reduce or increase their wages, gives those with that power a great deal of power.  It makes the wage-earners dependent on the capitalists for the basics of life.  It permeates daily life in capitalism, and most people’s entire lives are spent, in one way or another, in the pursuit of earning wages.  This dependency is now taken for granted in advanced capitalism, and it is forgotten that it is in fact a form of dependency

In advanced capitalism such exchanges become institutionalized as “jobs” in which wages, salaries, and in-kind benefits are attached to more or less permanent positions of employment under the control of economic elites.  At the middle and upper-middle professional levels, jobs are parts of “careers” in which an individual’s working life in a filed is seen as a continuous whole where continued remuneration depends on a record of professional accomplishments and good standing.  In such cases, more than merely the daily bread is at stake, and the technique  of economic deprivation can take more subtle forms, such as threats to professional reputation.

In any case, the ability to control someone else’s income is obviously a way to control their behavior and choices — including political choices.  Before the secret ballot, for instance, it was not unusual for bosses to be know who their workers voted for and to punish or fire them if they did not vote according to their employer’s interest.   This has become systemic: in modern economies a great deal of public policy is aimed at creating jobs, ostensibly because this benefits society by keeping working people employed, but it is almost always done in a way that benefits capitalists, for example in the form of tax cuts for employers — “trickle-down” economics uses the threat of depriving workers of jobs to channel resources and privileges to the top.

Another example is capital flight.  This is where corporations and investors threaten to move financial and physical capital out of one community, region, or country to another unless their demands are met.  Entire communities, and even nation states, can be made to behave in certain ways by threatening to deprive them of needed economic goods and services.  Consider how multinational corporations move factories and jobs around the world in order to extract concessions on wages, benefits, and working conditions from laborers, and also to extract tax concessions, subsidies, and favorable policies from governments.  As of the time of this writing, Vladimir Putin has considerable sway over Europe regarding the Ukraine conflict, because he supplies them with most of their natural gas.

Economic deprivation afflicts the political sphere in modern capitalist countries in the form campaign donations, which underlie the lobbying system by which the economic elite dominate the policy process and cause democracy to malfunction and which will, if left unchecked, eventually replace democracy with oligarchy.  As a power technique in the political sphere it undermines democracy, for public policy should be made by the people and those who truly and sincerely represent them, not by representatives operating under the threat of economic controls.

Several practices and institutional arrangements are available to the demos to counter economic deprivation.  First, as already mentioned, working people can group together and go on strike, turning this power technique against the elite in order to counter its many other powers and level the playing field, to some degree.  The demos can and should make more use of this technique, which turns the device back on those who normally use it.  However, management often has the upper hand during strikes because striking requires the collective action and organizing of many working people, all of whom must stick with the strike but who have incentives (such as loss of income) to break it, while management consists of smaller groups of individuals who are already concentrated together, share values and ideology, and are institutionally and legally organized.  This is even more the case when we consider that strikers often lose the income that provides for their basic subsistence during a strike, whereas management only loses financial profit, but not basic needs — so management can hold out longer. Still, union protections negotiated through collective bargaining under the threat of strike can afford a good deal of protection from threats of economic deprivation.

Next, governments can and often do impose legal regulations to eliminate or curtail some forms of economic deprivation.  These include limitations on how and why people can be fired, requirements of advance notice of layoffs, severance packages and unemployment insurance, forms of tenure, and the like.  The public programs of social democracy also help insulate individual workers from attempts at economic deprivation: it’s easier to resist a nasty boss or leave an awful job if there are social welfare programs to fall back on.

Finally, the structures of the economic system can be set up to establish systems that allow minimize the power of economic deprivation.  An economy based on the institution of the job maximizes it by making it the basis of routine economic relations between employer and employee.  But other economic arrangements can instead create economic independence: the agrarian republicanism of the early Roman republic, revived by 17th and 18th centuries Atlantic republicans, aimed to make citizens free from threats of economic independence by making them small property-owners.  Most citizens were to be small landholders who produced nearly all of their own food and most of the other goods that they needed, so that unlike wage incomes their needs were not under any other human being’s control, thereby immunizing them from economic deprivation as a power technique.  Indeed some historians note that the fall of the Roman republic was preceded by the concentration of small landholder’s property onto large plantations or latifundi, driving Roman citizens into the city in seek of wages.  (This isn’t to say that an agrarian economy can produce technological advances, desirable varieties of occupations, or other benefits of modern economies, but it can create economic independence that immunizes the yeoman farmers from threats of economic deprivation.)

Socialism has always sought to eliminate economic deprivation as a power technique through the structural change of transferring ownership of the means of production from private plutocrats and oligarchs to the public.  How that is done, however, determines whether the power technique of economic deprivation becomes controlled by the people or not.  If the method used to socialize productive property is simple nationalization and communist ownership by the state in a command economy, then the power of economic deprivation is only transferred from private oligarchs to state bureaucrats.  A much better solution is collective ownership by workers and communities of the economic enterprises in which they work, i.e. worker’s cooperatives or democratic socialism.

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