The new ‘great transformation’

By now the broad contours of the ‘great transformation’ through which we are living are reasonably clear. The combined forces of economy and state are rewriting the scripts governing social structure, class relations and politics in the advanced industrial countries of the global north. In particular the interventionist state is an essential part of the engine of transformation today as it was in the coming of industrial capitalism itself. The ‘great transformation’ of the early 19th century was one in which free market capitalism, the regime of ‘laisser-faire itself was enforced by … an enormous increase in the administrative functions of the state’ (Polanyi, 1957, p 139). Exactly the same has been happening over the last few decades in which ‘the globalisation era was not one of de-regulation but of re-regulation in which more regulations were introduced than in any comparable period of history’ (Standing, 2011a, p 26). The neoliberal state can indeed be seen as ‘a transnational political project aiming to remake the nexus of market, state, and citizenship from above’ (Wacquant, 2010, p 213).

The ‘long boom’ of the 1960s and 1970s of almost uninterrupted expansion of the industrialised Western economies provided a context in which many commentators assumed that most economic and social problems could be overcome by correct policy interventions by a benevolent state. The Keynesian welfare state pursued an economic policy oriented, at least in theory, to full employment, while social policy aimed, again in theory, at social cohesion through education, social mobility and welfare citizenship. Politics was dominated by the process of institutionalised class compromise between capital and labour. Finally, the residue of criminal offenders and socially excluded were to be, as far as possible, subject to rehabilitation and re-integration.

That world is now virtually dead and buried. Long-term falling profit rates from investment in the major capitalist economies over the last 40 years (Harman, 2009) put increasing pressure on capital to renege on the class compromise with labour. Globalisation and mobility enabled capital to both move to new sources of cheap labour and at the same time deploy new technology and work organisation to establish a regime of low-wage, deskilled, insecure, short-term and temporary employment and high rates of structural unemployment (Castells, 1999). This ‘precariat’ (Standing, 2011a), whose condition can also be characterised as ‘advanced marginality’ (Wacquant, 1996, 1999, 2007), has become a growing proportion of the working class.