Scotland & the EU Westminster Mismanagement

There is a new emerging class system – are you part of the securiat or the insecuriat?

Tories cheer public sector pay cap

Politics and economics have been going through rapid evolutionary change in the last few years. Future historians may refer to it as a revolution. Political and economic thinking are deeply intertwined and while the economic order of our lifetime has failed and shows no sign of recovery, our politicians have failed to realise the new reality and are still arguing in terms of left and right, because that’s all they understand.

Left and right are just different wings of the same going-extinct economic model that has brought us the credit crunch and rampant inequality within nations and between nations. We have had political turmoil with American and British isolationism, and far-left and far-right movements have developed because, since they haven’t been in charge for a couple of generations, hardly anyone can remember just how badly they messed up last time.

More than a year ago, I wrote that ultra-conservatives were harking back to traditional Victorian values and unfettered capitalism, while on the far left, Marxists were harking back just as far to a political mantra that never worked. In Scotland, Yes and No had replaced left and right but that is just as tribal and no better in terms of progress and informed debate. The General Election kind of proved I was right about Yes and No, but many are confused by the willingness of rabid socialist Unionists to vote Tory and contribute to Theresa May scraping home by virtue of Scottish MPs. This is, however, down to another revolutionary change, but in the class system. Working, middle and upper classes are constructs of the outgoing political reality. The truth is that rising inequality and insecurity mean that the changing distribution of wealth, linked to the changing nature of work, has created such inequality that the new class system only has two castes – those whose income is secure and those whose income is insecure. This will develop within a generation (if nothing is done to stop it) into those whose income is unearned, or earned from rent (of property, assets and capital) and those who earn virtually nothing via their labour. You might call these new castes the securiat and insecuriat. Back in 2005 Citigroup (a bailed-out, failed bank that remains part of the problem) announced that: “The world is dividing into two blocs; the plutonomy and the rest.” They were talking about nations (they thought it was a good thing) and now its happening within developed nations.

In 2011, Guy Standing, co-founder of the Basic Income Network, wrote a book called The Precariat: The New Dangerous Class. The initial idea was that a small group of people were being sidelined in the periphery of society, but changing work patterns mean that group starts to include people who used to consider themselves upper working or middle class, whose incomes are not so low, but whose jobs are nonetheless threatened by technology. Every generation sees major new technologies destroy its traditional industries. I am not just talking steel mills and mining etc but those jobs now considered traditional for Millennials, in sectors such as finance, admin and call centres, which are being replaced by automation. Throughout history, new technologies generated rapid economic growth, creating more and different jobs, but automation is not creating new jobs. Driverless cars will destroy employment in the taxi, public transport and delivery sectors; accounting and legal software is slashing employment in what were middle-class roles; and more and more people are feeling insecure.

“Ah but unemployment is not rising rapidly.” That’s right, and it won’t for another generation because what is rising is bullshit employment. The last decade has seen a massive rise in zero-hours contracts and the new self-employed, people who have no security, no way of knowing what their earnings will be tomorrow never mind in a month’s time.

Real jobs don’t exist in what you might call the Deliveroo Economy. Sometimes people have two or three jobs, all without guaranteed income, hours, pensions, training, advancement or hope of ever owning houses, and so we have the ridiculous situation where extremely hard-working people are dependent on housing benefit and child tax credits. If you think that’s bad, don’t forget the Uber Economy has no workers at all.

Remember the securiat? Well they have wealth and assets and access to loans and are buying up properties, raising house prices and rents above the level that the insecuriat/precariat can afford. You would too. We think gentrification is a good thing, but it’s creating a poverty and a housing crisis that is forcing more and more people to borrow to live, not to spend, and so they become less economically active, thus slowing the economy and making the benefits they need for an acceptable life harder for the UK Government to afford. This, combined with low wage-growth and rising inflation and (soon) rising interest rates will, within a year or two, create a new consumer debt crunch. We will soon face the reality that we need to redesign our entire economic model. However, every university teaches that neoliberalism and small government is the only way and nearly every economics and business editor and politician has that education and outlook.

If you want to see how out-of-touch with reality Westminster is, open two browsers and compare the footage of the Tories cheering the vote to maintain the public-sector pay cap with the interview with rookie PC Wayne Marques who took on the London Bridge terrorists with only his baton and an overdeveloped sense of duty/bravery.  Then ask how much we rely on public servants such as police, teachers, nurses, junior doctors and care workers, and even full-time carers, and ask if they really deserve to see their standard of living eroded when the system is creating a whole new class of people gaining unearned wealth at exponential rates. Then ask yourself how long before this situation becomes unstable and collapses economically and potentially into mass social unrest. “Ah, but the Tories were cheering the defeat of a Labour amendment.” Yes, but when the economy is heading off a cliff edge it doesn’t matter if you fall to the right or the left, it has the same impact when you hit the bottom.

 

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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland he ran a small social media and sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.

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