[INTERVIEW] UK economist calls for redirecting capitalism to make it more inclusive

[INTERVIEW] UK economist calls for redirecting capitalism to make it more inclusive

Guy Standing, author of “The Precariat: The New Dangerous Class” / Courtesy of Guy Standing

Guy Standing, author of ‘The Precariat,’ touts benefits of basic income, a populist idea that is unpopular in Korea

By Kang Hyun-kyung

The COVID-19 pandemic has dealt a serious blow to the already-staggering global labor market which was reeling from the fallout of the 2008 global financial crisis.

Across the globe, job insecurity has worsened with a sharp increase in employment.

In Korea, the self-employed people and temporary workers in the services sector have been hit hardest by the pandemic as heightened social distancing pushed many of them out of business or to lose their jobs.

Guy Standing, a professorial research associate at SOAS University of London and author of “The Precariat: the New Dangerous Class,” observed that rising job insecurity across the world is the result of neo-liberals’ ceaseless pursuit of a flexible labor market and their allegedly wrong remedies have paved the way for unbridled capitalism that only benefits the haves at the expense of the have-nots.

If a sharp increase of “the precariat,” continues, he argues, what he calls “a politics of inferno” could deliver a devastating impact to society as a whole. The word “precariat” is a portmanteau of precarious and proletariat, referring to people suffering from job insecurity.

Standing says these people are experiencing four A’s ― anger, anomie, anxiety and alienation, adding the emergence of the precariat as a new class-in-the-making creates a whole new policy problem, whose nature is much more complicated than that of temporary or seasonal workers.

“The precariat consists of people defined not just by having insecure, unstable forms of labor relations, but by having insecure and fluctuating incomes, being constantly threatened by unsustainable debt, having no occupational narrative to give to their lives and above all by feelings of losing social, cultural, political and economic rights,” he said in a recent email interview with The Korea Times.

“They have to do a lot of work that does not get counted as work and they feel like supplicants even in their own country, having to rely on charity or discretionary actions by others.”

[INTERVIEW] UK economist calls for redirecting capitalism to make it more inclusive

Guy Standing’s Special COVID-19 edition of “The Precariat: The New Dangerous Class”

Standing said the precariat is the outcome of a “rentier capitalism,” which refers to a system that allows those who own physical, financial and intellectual property to enjoy a rising share of income at the expense of those who don’t, warning the greed of capitalism will continue to fuel job insecurity.

He claimed policymakers need to prioritize providing income security to this “dangerous class.” Proposing a basic income for all, he said income security has become inevitable after the pandemic.

“A basic income would encourage a shift to more care work and more ecological community work and would have important economic feedback effects through improving mental and physical health, resulting in lower public spending on healthcare. In the context of pandemics, that is precisely what is needed.”

In Korea, a basic income has become a presidential issue after presidential hopeful Gyeonggi Governor Lee Jae-myung put it forth as part of his key policy agenda.

In July, the liberal presidential candidate unveiled some details of his basic income initiative. If elected, Governor Lee vowed he would provide 2 million won in annual income to people aged between 19 and 20 and people of other age groups would be given 1 million won annually. This direct cash transfer from government to citizens with no strings attached would be effective from 2023, he added.

To finance this basic income for all, Lee said he would alter the budget by readjusting policy priorities, reforming fiscal policies and saving money used for other purposes. Lee said he would levy taxes on all property owners and introduce a carbon tax that will be imposed on entrepreneurs on their carbon emissions required to produce goods and products.

His basic income initiative has created a pros and cons debate, but skepticism dominates.

His rivals have echoed the view that it is unfeasible. Former Prime Minister Chung Sye-kyun said Lee’s plan to increase taxes for the sake of providing “a stipend” to citizens sounds nonsensical, noting there were a host of policy issues, including an ageing society, falling birthrates and climate change which require the government to come up with immediate and effective policy responses.

Some say Lee’s basic income proposal is no more than a populist idea, accusing him of attempting to buy votes. Demands for social services have outgrown tax revenue and thus an additional tax increase to finance a basic income for all is unfeasible, they say.

Standing defended the basic income, stressing it is feasible.

“I am delighted that South Korea is one of the most advanced countries in considering introducing a basic income, for reasons that I have explained in my book ‘Basic Income: And How We Can Make it Happen,'” he said. “It is undoubtedly affordable, beginning at a modest level. It would give everybody basic security, which is a human need.”

He concurred with the need for introducing a carbon tax.

“While it could be paid in the short-term by a fiscal stimulus that would boost the economy and reduce inequality, my preferred way of paying for it is through the creation of a national Commons Capital Fund, built from levies or taxes on polluting activities, that are so desperately needed to combat global warming,” he said.

Standing recently released a special COVID-19 edition of his 2011 book, “The Precariat: The New Dangerous Class.”

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