The Assetisation of Labour

Another brief, unfinished piece. This time on the evolution of the condition of labour under capitalism from simple commodity to asset, into "human capital" as they would have us believe.

O Willie, come sell your fiddle,
O sell your fiddle sae fine;
O Willie, come sell your fiddle,
And buy a pint o' wine!
If I should sell my fiddle,
The warl' would think I was mad;
For mony a rantin' day
My fiddle and I hae had.

The rattlin’ roarin’ rogue of Robbie Burn’s ballad, for all his love of a gargle, is too canny to sell his fiddle as he knows his fiddle is worth more to him in its possession than it’s simple worth in exchange. Willie’s fiddle is more than a simple commodity, it is an asset. By asset we mean it is the source of a future income stream. By contrast, a commodity is something whose only realisable value is that of a one-time only exchange at the current price for it.

In financial terms, an asset has a duality with respect to return. Either one can hope for a return on the money invested in purchasing the asset by a rise in its price over time. The realisation of this return can usually only be achieved by selling it at the new higher price, this return being known as capital gains. The other source of return on a financial asset is the payment stream associated with owning it - it’s yield. This can be dividends for equities, quarterly or yearly coupons for bonds and so on.

By contrast, investment into commodities has only one possible source of return. Whether gold, oil or pork bellies, the ownership of a stock of commodities, in itself, yields no return. The only possible source of return is movement in the price of the commodity in the spot market. But not all investment in commodities is speculative (i.e. looking for return) some of it is hedging against the risks of volatility in equity and currency markets - the precarity of the stores of value. But the complex tango of hedgers and speculators through the financial markets is not our primary interest here.

The commodification of labour is a theme that has been common ground for the socialist movement for the last two centuries. The question we open here is whether we are seeing a movement from the simple commoditisation of labour to an assetisation of labour, and if so, what does that mean for the movement for the self-emancipation of labour from its compulsion and exploitation?

What would the assetisation of labour mean? By extension from the material and financial spheres we can say that it is the transformation from labour as a commodity - a possession whose only access to return is its one time exchange for the revenue necessary for its own reproduction in order to repeat the cycle anew; to that of an asset itself holding the potential for a return based on a future income stream. The struggling student who may sell his or her labour cheaply in the here and now in order to fund the studies that will (possibly) guarantee them a ‘professional’ career with much greater earning power in the future.

The evolution of financial capitalism into the form of  biofinance, where the majority of equity capital is held by institutional investors, dominated by (life) insurers and pension funds, has long been noted. The insurance of labour against injury, infirmity, old age and death, originally an organic initiative for self-protection through friendly societies, craft unions and mutual associations, has been now fully financialised through de-mutualisation and the colonisation of the field by market-capitalised financial intermediaries. But the underlying process of transforming labour from a mute object of trade on the spot market of commoditised labour, is progressing through the transformation of the entire life span of living labour into a securitiseable income stream - an asset.

We see the assetisation of labour in student loans which load young workers with tens of thousands of pounds of debt to be repaid by a future lifetime of labour. [..etc..]

But aside from the financial side of young workers being transformed into walking futures contracts, there is the effect on the subjectification of labour itself.

Negative solidarity

There has been talk recently of the phenomenon of “negative solidarity” in relation to the contemporary subjectification/socialisation of labour. If you are not, in your own internal self-image, the super-exploited bar or cafe worker you are currently employed as, but the future businesswoman, doctor or advertising executive you will be in the future when you finish your studies and get out of this shitty student life, then there is no surprise that you have no solidarity to your co-workers in the here and now. Your solidarity is to your future imagined self - the one your bank manager has made reality by giving you a mortgage on it. Negative solidarity is the decompositional subjectification of assetised labour.

So, is the assetisation of labour simply a con? Are the loans well-spent propaganda to create the illusion of a prosperous future that the institutions know will never come about for the majority, in order to drive down the cost of their labour in the here and now? Is this just another vector of so-called ‘false consciousness’?

Certainly there may be an aspect of that. However the fact that labour as cheap or cheaper is already available through migrant or precarised workers, without going through the rigmarole of creating the myth of the assetised future super-earner, means this can’t be the whole of the story.

By returning to model of the financial asset we can clarify this question. The two forms of return are one aspect of the financial asset that is always accompanied by a third component - the component of risk. Risk represents the possibility of loss of either or both sources of revenue, the possible loss of some or all of the exchange price of the asset (loss of principal) or loss of future periodic dividends or other earnings.

In the case of living labour, risks include disease or injury which may temporarily or permanently afflict the possibility for immediate earnings and/or long term future earnings. Similarly, previous investment in training and study may be at risk to being invalidated by becoming obsoleted by the march of technology and change in the social division of labour.

Before we can investigate the significance of the assetisation of labour in relation to risk, we need to go back to the growth of the subordination of labour to capital in its nascent centuries, to the difference between capitalised chattel slavery and wage slavery in the eighteenth and nineteenth centuries.

From slavery to commodification of labour

The story of the transatlantic slave trade and its employment by early capitalist agricultural production in the Americas seems to be the non plus ultra of the commodification of labour - the buying and selling of human beings for slave labour. However this is the commodification of human beings, not the commodification of labour and, leaving morality aside, it is important to understand the distinction.

The relation between the slave owner of the cotton plantations of the USA and the cotton mill owners of Lancashire, to their respective labourers must be understood. The slave owner of living labour assumes, inevitably, all the risk costs of injury, sickness or premature death of his slave. Also the investment in training and the concurrent risk of those skills being obsoleted, are the owner’s also. By contrast the mill owner buys labour by the day or week. If the ‘free’ labourer is ill or injured, that risk is not passed on to the mill owner who can replace that individual with another more or less equally productive unit of labour. Labour is commoditised in relation to the mill owner in that he can externalise the risk to the continued reproduction of labour power to society.

Over time, both through struggle from below and the imposition of a biopolitical logic of aggregate, societal level, efficiency from above, the externalised risks of labour are eventually socialised into the specific function of the state - through the regulation of the Factory Acts, the eventual provision of state-funded education and health services.

It is the unmarketised spheres of these state labour ‘risk management’ services, that neoliberalism is now attempting to privatise and marketise. For this purpose the assetisation of labour is the means by which the risk management of labour may be transferred off the account of the welfare state and onto the shoulders, not of some new chattel-owning slave master, but the dispossessed owner of ‘free labour’ him or herself. ‘Every man his own master’, that great liberal aspiration, now reveals its true sinister content - every man or woman his or her own slave-master.

The assetisation of labour then, is the fulcrum of transition from welfare state capitalism to the fully privatised and financialised provision of education, health, training and retirement. This, not only in an ideological sense, but also in the institutionalisation of a financial framework that provides credit and financial services, not to capitalists, but to workers.
[...]

A brief history of time

The three aspects of the asset - the two returns and the risk - correspond to the three modes of time, the periodic, the secular and the exceptional. The ancient Greeks had two conceptions of time, that of Chronos and Kairos. Chronos was the normal passage of time, cyclical like the year, in which the passage of time can be measured - chronometrically - by the repetition of returning to the point of departure. Chronos’ consort Ananke (in Latin Necessitas) was the goddess of force, constraint and necessity, and the mother of the Fates who measured out the lifes of all living things. By contrast, Kairos is the time of opportunity, the fortuitous moment in which victory can be snatched and perhaps even the fates themselves cheated. Kairos represents an interruption of the time of Chronos, an exception which ruptures the linear progression of fated, cyclical time.

As the ages progressed, the worship of Ananke and the Fates fell into oblivion with the rise of the Orphic cult and its worship of Eros, the god of love and also the escape from death and the Fates. But throughout much of human history societies where change was slow relative to human lifespans such that the dominance of cyclical but unchanging time seemed natural, these two notions of time remained unchallenged. It is with the social and technological upheavals following the Black Death in Europe, and subsequent renaissance and reformation, that we encounter a new dominant conception of time - the time of progress. Progress itself is elevated to the status of explicit godhead by the Enlightenment and is emblazoned on the great seal of the USA as the Novus Ordo Seclorum  the New Order of the Ages, where the time of Progress rules over the Empire of Reason.

This new, third notion of time, called secular in the language of economics, is so ingrained within us as children of capitalism, that its very novelty is practically imperceptible. Yet the idea of a linear time in which change occurs, free from fate, is the new modernist conception of time - the time of, not only progress, but above all accumulation, or “growth” as bourgeois economists more shyly euphemise it, these days.

Returning to the asset we can see that the periodic returns from earnings or dividends, correspond to periodic or cyclical time (Chronos), the return from increase of the principal (capital gains) corresponds to secular time (Progress) and, finally, the risk of interruption to either, the risk of the unforeseen, of breakdown, is that of exceptional or crisis time (Kairos).

Tri-partite production

If we move to the sphere of production, we can see an analogous tri-partite division of products.

The first, cyclical product corresponds to circulating value, those elements of labour, raw materials, products and so on, that are sufficient to keep the various cycles of reproduction going.

The second product is, to a degree, an extension of the first - the surplus over and above the requirements for simple reproduction, that lead to accumulation and the extension of the production relation.

The third product, the by-product, perhaps better thought of as the entropic product, are those effects, both material, immaterial and social, that are neither continually re-subsumed in the cyclical process of simple reproduction not capable of being aggregated to the accumulated surplus product.

The default position is, of course, to simply ignore these entropic products, yet if they are being continually produced and not re-absorbed, then they inevitably accumulate until ignoring them becomes increasingly problematic.

The accumulation of the entropic product is itself a factor that sooner or later pushes the process into crisis - interrupting the bourgeois utopia of limitless progress freed from crisis.

The obvious example of such entropic products are the climate changing gases being released by current production. But despite their materiality, we are still examining how the production of crises is immanent to the cycle of production on a metaphysical level - that is, one where abstract categories themselves appear to be the source of change and movements. In order to bring our analyses down from the metaphysical clouds to the world of human society, we need to refactor in terms of human agency.
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