Sir Sigmund Freud wanted to help selected clients from the Viennese bourgeoisie overcome their neuroses; his great-grandson wants to get two million British proles off incapacity benefit and into badly-paid jobs. Even given the four generations between them, that is big time mission creep for any family.
New Labour has hired former City banker David Freud to implement recommendations that he himself drew up for getting the long-term unemployed - especially those currently larging it on £81.35 of taxpayer cash a week because they are deemed unfit for employment - back into work.
That’s a worthwhile aim, of course. Persistent long-term unemployment – and I have experienced it myself – is a massive waste of human potential, and one of the prime indictments of capitalism.
The left would expect a Labour government to do everything possible to tackle this issue. Measures worth considering include investment in education, to ensure that Britain has a skilled workforce; investment in social housing, to secure greater mobility; investment in public transport, to enable people to get to work; and, where supply side measures are not enough, investment in the means of production to create jobs directly.
But this is not what Freud advocates. His classically free market answer is to put the private sector on piece work. Firms will get anything up to £50,000 for placing someone in a job for more than three years and nothing if they fail.
Business will make – to use the word employed by Freud himself – masses of money in the process:
We can pay masses - I worked out that it is economically rational to spend up to £62,000 on getting the average person on Incapacity Benefit into work.
Mention masses of dosh, and you can expect instant international interest; the Financial Times today brings readers up to speed with what’s happening in the ‘multi-billion pound welfare to work market’, and lists the main players likely to scoop up the contracts.
Should socialists be against the idea on principle? After all, if it means people that need jobs finding jobs, does it matter if a private company picks up a few quid in the process? It can’t be worse than paying the Corrections Corporation of America to bang ‘em up in Doncatraz, I guess. But the worry has to be how the scheme will work in practice.
The impact of the Freud reforms is likely to be felt most by on those on incapacity benefit. The number of claimants only really took off in the 1980s, when Britain was picking up the pieces after Thatcher’s deliberate decision to deindustrialise. The left at the time argued that this was a scam to massage reduce the number of unemployment benefit claimants at a time when the dole queues topped 3m, and there is little reason to change this assessment.
Freud is on record as suggesting that only 700,000 of around 2.7m IB claimants should be getting a weekly sum of money that doesn’t pick up a lunch tab for two in the City. The point is arguable. But surely a doctor – rather than some suit with a 50k incentive to get the sick flipping burgers – is the best judge of that?
While I haven’t seen the small print, I’m not aware of any structural dimension to what Freud is proposing. High densities of long-term unemployment are regionally concentrated, because the industries that once sustained entire communities no longer exist.
The good jobs aren’t there any more; if claimants are forced into the labour market, it will be at the expense of existing badly paid workers, who will find their wages yet further undercut.
As David’s great granddad could have told them, no amount of wish fulfillment fantasy on New Labour’s part is going to change that.
Comments (10)
Actually it's £59,15 a week for standard JSA, and a mighty £46,85 for the under 25 year olds.
The rational economics of this push into the workplace are beyond me. Are there so many jobs just out there? Does all it take is to get all us shilly-shallying shirkers up to scratch, offer wads of rhino to bosses, and hey presto, we'll all be at work together sharp Monday morning?
Just where are these posts for those deemed unfit to work, or unemployable, going to be magicked from? By what conjuring trick? While they're after abolishing the segmented labour markets and the economic laws which create the reserve army of labour, could Parnell and Freud perhaps not have a crack at discovering how to turn Lead into Gold?
The real mettle of what is being proposed can be seen in the following sentence (from BBC site). In case anyone misses it, the central point for claimants is this:
"He said those who did not find work would be assigned to private or
voluntary groups who would be allowed to "innovate"."
Purnell means that claimants who do not get work after all his harrying, and bribing companies - the savoury remnant that no-one will employ (the great unwashed) - will be 'assigned' to the care of Artful Doger Plc, and the supervision of Lady Bountiful Reg.charity. To 'innovate' with them as they wish.
PS: last night at our Trades Council AGM we discsssed and passed our motion against the New Deal, to go the National TC AGM. One topic which came up a number of times was the increasing use of 'voluntary' bodies in Welfare provision, and the growing importance locally of Christian groups in this.
"investment in social housing, to secure greater mobility"
Eh? It's almost impossible to get social housing if you move from one area to another, always has been.
If you actually want labour mobility you want more private landlords: all those buy to let things.
Oh, and reducing or eliminating stamp duty on the sale/purchase of houses would help, too.
Did you notice that it was also announced to day that there will be 12,000 jobs lost in the Department of Work and Pensions with Jobcentres closing? I really, really, really hate this Government. I've heard that the Communist Party of Britain is standing in the GLA elections and I am wdondering if it is acceptable to vote for a Stalinist Party? What does Uncle Dave think?
As regards privatised prisons in America, there is a whole industry there in banging people up. Doesn't strike me as particularly healthy if incarceration is tied to financial incentive and shareholder value, and perhaps its one of the factors keeping the US prison population so high.
As a Labour Party member, Sue, I cannot advocate voting for parties that stand against it.
Readership of this blog ranges from SWP and CPGB members to Lib Dems and Tories; as voting adults, I rather presume they make up their own mind where to put their cross.
Dave, I didn't mean to compromise you so perhaps I should have phrased it differently, 'What possible reasons can there be for voting Labour?'.
Readers will make their own mind up, based on Labour's record in office [he says through gritted teeth]. Vote Labour on May 1. Just 'cos.
Andrew Coates, you seem to be suggesting in your post that you are simultaneously long-term unemployed and an active member of your local Trades Council. Schorely schome mischtake?
Sue, central government cutting Whitehall jobs has nothing to do with the GLA. Perhaps you simply want to punish the government through voting against London Labour. Seems a bit perverse when Ken and his London team have been (just about) more leftie and progressive than central government. i.e. affordable housing, the living wage, congestion charge, etc
Also - Labour in government may be dissapointing, but the Communists will just be nuts who probably hold views you find equally offensive.
"if claimants are forced into the labour market, it will be at the expense of existing badly paid workers, who will find their wages yet further undercut."
Who is paying for IB claimants to sit on their lazy bums watching TV?
The money comes from the taxes of those "existing badly paid workers" you seem concerned about.
So surely you must be pleased that these people are being asked to pay their way instead of freeloading?
-Who is paying for IB to sit on there lazy bums, they did. I'm disabled after a fall at work do not worry I will not be around to long to worry the Government my injury's are massive.
But I worked and paid 30 years my IB is taken out of my NI stamp, we all pay a bit of our NI stamp to wards insurance which will keep us in sickness or disability, if you do not work you cannot have IB.