Beyond neo-liberalism...

Oireachtas Retort in comments earlier in the year noted Tidjane Thiam, boss of Prudential Insurance while attending the World Economic Forum at Davos suggested the following:

Speaking at a World Economic Forum debate on whether austerity measures in the West would eventually lead to renewed prosperity, Mr Thiam said younger generations were being blocked from joining the workforce by minimum wages which protected those lucky enough to be in work but left those outside the labour force adrift.
“The minimum wage is a machine to destroy jobs. Look at France and Le Pen. The minimum wage is the enemy of young people entering the labour market. They don’t have a voice.”
Mr Thiam told the audience that minimum wage legislation was a “false social policy” designed to protect workers but in reality making the workforce more precarious. Such wage rules also reinforced the protectionist nature of trade unions, he claimed.
“Unions represent people already in jobs so they always support minimum wages. That crowds out the unemployed. People can’t get full time employment. They move from fixed-term contract to fixed-term contract.”

One doesn’t have to be an economic genius to see a fair few problems with those lines. Indeed there’s broad disagreement amongst economists as regards his point about minimum wages.

But it is of a piece with a broader assault from the right (the irony of Thiam making many many multiples of the minimum wage offering such ‘advice’ is apparently lost on him).

Paul Mason, economics journalist at the BBC is referenced in an interesting piece in the Guardian on the rise of a group within the Tories that seek to effectively push back yet further labour and other legislation.

Speaking at the South Bank Centre in London the following week [to the WEF], the far-sighted BBC economics journalist and author Paul Mason interpreted Thiam’s remarks as a sign of an emerging “more radical version of neoliberalism, where we’re basically, finally, told: ‘The race to the bottom, to be like China, is on, and we’re all going to do it. So your wages will meet the Chinese somewhere, and so will your social conditions … abolish minimum wages, abolish social protection.” In the audience, which had gathered to hear Mason talk about the leftwing, street-politics response to the economic crisis, not a formidable new rightwing one as well, there were a few seconds of uncomfortable silence.

You can read a speech Mason delivered at the LSE this year here on Scribd.

It expands upon that point:

The logical neo-liberal response was outlined by Thiam, boss of the Prudential, at Davos. If you want growth you rip up social protections in the west, starting with the minimum wage. Unions, says Thiam are the enemies of young workers because by defending the wages and donations of those in work they prevent them being dragged down so that youth can be employed on sub-minimal wages.

Now think about that and what that expression of at least one significant player in global economic activity suggests. The crazed aspect of it is that cutting those protections would still leave that youth (and all other workers) on ‘sub-minimal wages’. Where is the benefit societally?

That this comes from the very right that through deregulation and other measures laid much of the ground work for the crises that have enveloped us in the past number of years is yet another irony.

Mason notes though that…

It’s one logical path to follow, but I think most politicians in Europe would see it as suicide.

And rightly so, though looking at the latest demands being placed upon the Greek polity one might wonder. There’s altogether too much of a ‘let’s see how much they can take’ attitude abroad on that topic amongst the centre and centre right.

And in the Guardian piece we read this:

“The European economic and welfare model – I think it’s over,” says Mark Littlewood, director of the Institute of Economic Affairs (IEA), like the CPS a veteran British free-market thinktank reinvigorated by current possibilities. He favours cutting state spending in Britain by over a third, and leaving citizens with a “basic safety net”.

What is a ‘basic safety net’? And again who benefits from such a step change in the societal orientation.

This genuinely feels like a revolutionary moment, but not one tilting left.

About these ads