This article is loosely based on the article The Working Class Struggle for Welfare in Britain by David Matthews. This article will mostly be focusing more on the theory side of things in this lead-off. While the emphasis of the article is on the development of the welfare system in the United Kingdom the situation here in New Zealand was similar.
Although there exists no unified Marxist theory of the state, all Marxists would likely agree that whatever its other features, the fundamental objective of the capitalist state is the preservation of the social relations of exploitation. Together, state institutions function so as not to undermine or threaten the long-term interests of capital. Capitalist welfare provision is no exception: even at its strongest, the welfare state has not impinged upon the basic conditions of capital accumulation.
Nevertheless, care must be taken not to fall into economic determinism. The complexity of social policy in any capitalist society is such that it has always been a platform for class struggle. The welfare state cannot be considered exclusively an instrument to support and smooth economic growth, but should instead be understood as a variable mechanism whose power and form are determined by the balance of class forces.In every advanced capitalist nation, the working classes have actively fought for welfare. Examples abound of collective action to support both the expansion and defense of welfare provision, whether through direct agitation or labor and political organizations. While Marxist scholars have rightly demonstrated the advantages that welfare provision offers capitalism, it must also be acknowledged that many of the state’s welfare services are the product of hard-fought gains achieved by labor.
With the gradual erasure of radical perspectives from the social sciences over the last three decades, the Marxist critique of welfare has waned in popularity since its peak during the 1970s and early 1980s. And where Marxism is given any attention in current social policy literature, one cannot help but feel time has stopped. Often the analyses of James O’Connor, Ian Gough, and Clause Offe are cited as perspectives that continue to define Marxist understandings. To varying degrees, all three took a structuralist position, arguing that welfare fulfils systematic economic needs, and that its evolution and expansion constitute a logical process emerging from the wider structural constraints of an increasingly complex capitalist system. By investing in health care, education, and housing, among other services, the welfare state supports the expansion of surplus value through its ability to reproduce and maintain the quantity and quality of labor power and its productive capacity. Furthermore, welfare is conceived as a form of social control, helping to legitimize capitalism and thus to contain any threat of resistance emanating from the working class.
Such analyses have provided great insights and remain extremely pertinent. But it is regrettable that a class struggle perspective has largely been neglected in what has widely been considered the Marxist position on the welfare state. Recognition of welfare’s structural role in sustaining capitalism has eclipsed the power of conscious class struggle as a framework for understanding welfare provision. To his credit, Gough recognized the potential of class conflict. But his analysis remained dependent on a structuralist paradigm. A class struggle approach acknowledges class as a form of collective agency, which consciously attempts to determine social life. Iain Ferguson, Michael Lavalette, and Gerry Mooney have argued for the centrality of active class struggle to the study of welfare, declaring that “the class struggle in its widest sense is an essential backdrop to our understanding of social policy developments.” Nevertheless, such a perspective, especially one that invokes the active role of the working class in instigating collective action for social change, is often missing from major Marxist accounts of welfare.
Without doubt the welfare state helps fulfil essential capitalist requirements, including the reproduction of labor power and the maintenance of the non-laboring population, along with services that enhance the productivity of labor and reduce the costs to capital of labor’s reproduction. But structuralist explanations have tended to stress such ideas to the exclusion of human agency and collective action. I would argue that, far from being a passive bystander as the welfare state evolved to meet the needs of capitalism, labor has had a leading role in both driving and resisting welfare change. The foundations of this argument can be found in the works of both Karl Marx and V. I. Lenin. Focusing mainly on New Zealand and the United Kingdom from the late nineteenth to the mid-twentieth centuries, I can offer a brief sketch of the circumstances in which the working class took part in the construction of the country’s welfare state. I also argue that the current era of austerity has once again made clear the relationship between the working class and the welfare state, as recent years have seen a resurgence of collective action to defend social provision.
Marx on Factory Legislation in the United Kingdom
Since the modern welfare state did not develop until after Marx’s death, it is commonly assumed that he paid scant attention to issues of welfare, and accordingly, that comparatively little on the subject can be learned from Marx himself. However, clues as to how he may have approached the subject can be found in his studies of factory reform in nineteenth-century Britain.Beginning in 1833 and continuing throughout the remainder of the century, a sequence of factory legislation was enacted, primarily regulating the length of the working day. In volume one of Capital, Marx illustrates the decisive role of active class struggle in winning these legal concessions. “The creation of a normal working day,” he wrote, “is the product of a protracted civil war…between the capitalist class and the working-class.” Indeed, Marx argued that unrest had begun as soon as labor had recovered from being catapulted into the factory system. At the same time, from the initial Factory Act of 1833 through every subsequent attempt at regulation, the capitalist class was determined to block this progress. Capital was able to circumvent legal requirements largely by introducing alternative patterns of work. Nonetheless, working-class agitation intensified. Unequivocal in its demands, labor took the Ten Hours Bill, which would limit the working day of women and those under eighteen, as an “election-cry.” Marx explicitly asserted that the law’s enactment, part of the 1847 Factory Act, was a consequence of class conflict: “official recognition, and proclamation by the State, were the result of a long struggle of classes.”
Nevertheless, its passage did not prevent attempts to skirt the new regulations. Seizing on a period of weak labor organization, capital launched a sustained assault on the Ten Hours Bill that Marx described as “a pro-slavery rebellion in miniature.” The resulting “relay system” of work patterns allowed factories to operate for more than ten hours each day, with nominally protected workers given shifts spread throughout the day. In 1850, responding to the legislation being declared legally ineffective, labor rose up again, demonstrating and demanding further reform. In response, the Factory Act of 1850 increased the working day by half an hour, while reducing working hours for women and young people—with similar restrictions for children implemented in 1853—and reducing hours for all workers on weekends. Marx considered this a turning point for labor, whose demands had gradually solidified after years of tenuous victories and setbacks. As he argued, “after the factory magnates had resigned themselves and become reconciled to the inevitable…the power of resistance of capital gradually weakened, whilst at the same time the power of attack of the working-class grew.”
For Marx, the impact of this reform could not be overstated. In his address to the inaugural meeting of the First International in 1864, he described the Ten Hours Bill as a “victory of principle…the first time in broad daylight the political economy of the middle class succumbed to the political economy of the working class.” Through such reforms, Marx argued, the values of socialism could counter those of capitalism. The working class did not have to wait for a revolution: the foundations of a socialist society could be laid now, through the continued struggles of a class-conscious labor force. As Ralph Miliband and others have argued, such “reformist” tactics, when deployed by the working class to undermine the power of capital, were always central to classical Marxism.
From his writings on British factory legislation, it is possible to extrapolate that Marx recognized the potential of the working class to advocate for social reform, and by extension, for the policies and programs that make up the modern welfare state. Marx’s work thus suggests the possibility of welfare provision emerging not merely as a defensive move by capital, but from the collective action of labor to protect and promote its immediate interests under capitalism, as part of a broader movement toward socialism.
Lenin on Social Insurance
Marx was not the only revolutionary socialist to praise reform as a means of undermining capital and advancing socialism. Before 1917, Lenin likewise insisted on the value of working-class reforms under capitalism. One such reform he enthusiastically endorsed was social security, which he maintained was essential to alleviating the exploitation and poverty of the working masses in pre-revolutionary Russia. Addressing the All Russian Conference of the Russian Social Democratic Labor Party in January 1912, Lenin advocated a social insurance system, the costs of which would be borne by both employers and the state, with compensation equal to full earnings. Social security, he argued, should provide for all members of the labor force in every case of incapacity and unemployment. Moreover, coverage should apply to all family members, ensuring that it was universally available.
For Lenin, of course, the working class could not achieve true liberation until capitalism was abolished. Nevertheless, he was adamant on the need for reforms, with active class struggle integral to their implementation. At the time of Lenin’s speech, social security legislation was making its way through the Russian Duma. Lenin nevertheless decried the limitations of the proposed law, which would have provided compensation only for accidents and illnesses, falling far short of universal coverage. Lenin stated categorically that active labor force organization was essential to modify and expand the legislation: “It is the urgent task…to develop the most extensive agitation against the Duma Insurance Bill.” But even if such agitation failed and the law was passed, the reforms should nevertheless be used to further the class struggle. Labor, Lenin argued, should recast the law “into a means of developing its class-consciousness, strengthening its organization and intensifying its struggle for full political liberty and for socialism.”
Although brief, Lenin’s interpretation points to a Marxist understanding of welfare framed by class struggle. He clearly approved of social security reforms in a capitalist context, both for the immediate benefit of the working class and to advance the cause of socialism. Further, and crucially, he conceived welfare itself as an object of class conflict, adamant that the working class and its political representatives had the authority and obligation to determine the development of social policy. Both Marx and Lenin understood social reform as a central working-class concern and part of a larger struggle against oppression. While Lenin does not say so explicitly, it can nonetheless be inferred from his critique that capital as a whole opposed such reform, with his 1912 address implicitly attributing the inadequacy of the proposed legislation to negotiations between the government and business leaders. It seems clear that for Lenin, true welfare would originate from the working class itself, through successful struggle from below.
The Development of Welfare in New Zealand
Unlike the United Kingdom much of the employment in colonial-era New Zealand was based around farming and the setting up of industries that served that sector. It also faced a shortage of labor which allowed workers to make demands, such as the eight hour working day and safer working conditions for the working class, to improve their lives. Adequate housing for workers was also achieved through the pressure applied by labor. Indeed, the New Zealand working class enjoyed a standard of living in the late 19th Century that few workers elsewhere enjoyed due primarily to the actions of organised labor.
Indeed, in 1890 New Zealand was one of the first countries to introduce an old age pension and in 1893 granted women the right to vote, which was to have a major impact on the working classes, the union movement and the welfare system. However, it wasn’t until the Great Depression that unemployment assistance was introduced albeit with the requirement the unemployed had to go to work camps to undertake public work schemes. Much of the pressure to provide some form of unemployment assistance came from unemployed workers. However it would not be until 1938 when Michael Joseph Savage was the Labour Prime Minister that a comprehensive welfare and state housing system was introduced albeit with a strong morals based approach. In the 1960s the morality requirements were scrapped and the Domestic Purposes Benefit were introduced. Again, this was driven from within organised labor. When attacks were launched upon the welfare system in the 1990s it was organised labour – the unions and other working class groups – that were among the strongest defenders of the welfare system.
Marxism and Welfare Reform
Undeniably, the primary purpose of the capitalist state is to safeguard private property and enhance the conditions for economic growth, in which the welfare state is a vital instrument. Existing welfare states are far from islands of socialism in a sea of capitalism. Nor has any welfare state ever challenged the very existence of capitalism, or even seriously threatened the gross inequalities of wealth on which capitalism is based, instead limiting its redistribution to within the working class rather than between social classes. At best, welfare states have mitigated against economic insecurity, rather than removed it. Furthermore, although influential in its establishment, labor itself has rarely controlled the operation of the welfare state, whose organization tends toward hierarchy and bureaucracy.
Nevertheless, the state under capitalism should not be conceived as a monolithic instrument of capital, which combines with welfare services to form “the iron fist in the velvet glove.” Given the real benefits it has brought for labor, there should be no obscuring the fact that the working class has constituted a significant force to advance the establishment of welfare and acted in its defense during times of attack. Although barriers to social mobility in many advanced capitalist nations remain rigid, a universal system of compulsory education and expansion of tertiary institutions has without doubt strengthened working-class opportunity. While frugal, existing social security for families vitally enhances family budgets, especially in an era of stagnating wages. Similarly, it modestly reduces the threat of destitution, particularly for those unable to work due to illness or disability. Moreover, a public health care system does ensure the financial costs of poor health are collectively met by society. A class struggle analysis stands firmly opposed to any idea that the welfare state only serves the interests of capital. Rather, welfare states are constructed under the influence of the class struggle, in the dialectical relation between capital and labor.
It is not enough to consider the advantages the working class has gained from the welfare state as a fortunate by-product of capitalism’s efforts to enforce and protect its own dominance.
Class Struggle and Austerity
The influence of the working class on the welfare state persisted for at least a generation after the Second World War and organised labor contributed to the expansion of both state housing and social welfare programmes well into the 1960s and 1970s.Still, relative to the late nineteenth and early twentieth century, working-class influence in New Zealand diminished from the mid-1970s, and qualitative advancement of the welfare state slowed significantly. Moreover, the neoliberal assault of recent decades may lead some to question whether the working class retains any active relation to the welfare state. Arguably, this has much to do with the stifling of organized labor.
Anti-trade union legislation such as the Employment Contracts Act and it’s successor the Employment Relations Aft and a fragmented, precarious labor market that makes industrial action ever harder has seriously weakened the role of the working class as agents of social change, both in New Zealand and beyond. Nonetheless, the Ardern years can be said to have reignited the collective bond between labor and state welfare. The current era of austerity being implemented by the National-led government is unequivocally an example of the continuing impact of class conflict on welfare, an overt attempt to restructure the state in the interests of capital in the face of a weakened working class. However, this challenge has been met with growing resistance from below.
Under the hegemony of neoliberalism, capital and the wider ruling classes within government have implemented in earnest rules mandating reduced budget deficits, minimal government debt, and fiscal surpluses. Notwithstanding the advantages welfare offers capital in the long term, levels of existing welfare expenditure have been presented as an obstacle to economic expansion. The slashing of welfare budgets in many advanced capitalist nations has galvanized ordinary citizens to respond in an eruption of collective action. Over the last decade, notably in Western Europe, pensioners, the disabled, students, children, single parents, social housing residents, and the many people who rely upon public health care and education have assembled in displays of collective unity against deliberate attacks upon welfare services. Briefly converging in mass movements such as Podemos in Spain, Syriza in Greece, the People’s Assembly in Britain, Solidarity in Ireland, and, in North America, Occupy Wall Street, both the labor movement and the unorganized working class, combining both moderate and radical approaches, joined forces in solidarity. Often peacefully, but sometimes exploding in violence, tens of thousands have taken to the streets in protest, with the anti-austerity movement representing a global awakening of class consciousness not experienced for decades.
Supporting the millions of welfare recipients in public protest have been welfare professionals. General strikes have featured prominently in Greece, Spain, Italy, and Portugal, with welfare workers among the central actors. In Britain, the attempted dismantling of welfare services encouraged some of the most powerful displays of industrial action in thirty years. Teachers, medical professionals, and social workers, among others—along with the wider public-sector labor force — united in opposition to budget cuts, with as many as a million workers withdrawing their labor during various bouts of industrial unrest. Moreover, in the United States, with public education under particular threat, from Sacramento to Chicago, education professionals have been instrumental in organizing resistance through strikes or, where teachers’ strikes are illegal, by taking collective sick days.
The contradiction of welfare provision under capitalism is that although, as Marxist analyses have rightly shown, the welfare state is used to solidify and sustain the dominance of capital, it also serves as an instrument of social reform actively embraced and defended by the working class. History from the late nineteenth century to the current era of austerity illustrates that for labor, the welfare state is not just a mechanism to enhance the accumulation of capital or reinforce working-class oppression. From the beginning, it was a vital part of the class struggle—and so it remains today.Resistance to capital is a fight with many fronts, and the struggle for welfare also holds a crucial link to the struggle against imperialism. Although the early welfare victories of the British working class were in part funded by the extraction of surplus from colonial markets, the new imperialist era of finance capital has threatened the very existence of welfare provision in the advanced capitalist nations. Amid the superexploitation of a growing global reserve army of labor in the global South, the working classes in the mature economies now face chronic unemployment, deflationary wage growth, and reduced welfare provision, as the advanced capitalist nations are forced, it is argued, to remove barriers to capital if they are to compete with developing nations. Now more than ever, the global working class must unite in solidarity to combat their exploitation, a struggle to which the fight for welfare is inextricably tied.