Category Archives: COVID-19

Working through COVID

COVID-19

Debate on Covid-19

WORKING THROUGH COVID

31st of July, 2020

Steven Klein

As I write this from Florida, the coronavirus pandemic is raging across the southern US. With rushed economic re-openings, the failures of American capitalism are on full display. Unwilling to accept the redistributive consequences of supporting an idle workforce, leaders presented a false dichotomy of basic human wellbeing and “the economy.” As a result, the COVID-19 pandemic has produced just the sort of total societal crisis Karl Polanyi theorized. Alongside some remarkable displays of solidarity and goodwill are worrying storm clouds for the future of democracy under capitalism.

 

In terms of Polanyi’s framework, the pandemic is ramifying across all three fictitious commodities: as a crisis in the human relationship with nature and as a crisis in capitalist monetary systems (witness the intense battle over issuing coronabonds within the Eurozone). But one of the starkest revelations of the crisis is the changing nature of work under capitalism – changes that pose new challenges for the Polanyian de-commodification of labor. Since the 1970s, one important facet of the neoliberal revolution has been a shift in the structure and nature of work. During the great transformations of the Industrial Revolution, as detailed by Polanyi, the banner under which labor commodification occurred was contractual freedom. Since the 1970s, the promise of the market was individual self-realization through horizontal workplaces and nimble career paths. The commodification of labor would thus enhance, rather than degrade, ones individuality. Yet only some groups benefited from these changes—and those workers are most able to retreat to their households so as to weather the pandemic (with all the attended challenges of integrating their care work with their paid work). Yet “essential workers,” ranging from retail and health services to more traditional manufacturing, have no such luxury. Nor do the petite bourgeois, whose businesses survive off of razor-thin margins. For all those groups, the state has failed to provide protection from the interwoven threats of the pandemic and market dependency. Polanyian scholarship must attend more to the distinctive ways in which these different segments of the working population relate to market forces.

 

These new cleavages, I believe, are worrying from the perspective of Polanyi’s vision of democracy. Historically, the twin struggles for democracy and for the decommodification of labor relied heavily on cross-sectional alliances between the working class and the liberal professions. The COVID crisis risks fraying this alliance even further, accelerating the drift various segments of the working class away from left parties. The full ramifications of the economic dislocation and political conflict produced by the pandemic are not yet clear. But there are storm clouds gathering for democracy, especially in highly unequal polities like the United States. Where the shutdowns have been supported and successful, the pandemic could enhance support for solidaristic collective institutions. Where the needs of the market took precedence over human health, the pandemic could shake the alliances between different segments of the working class—alliances that historically supported the principles of solidarity and political equality in the face of market dependence.

 

Steven Klein

Lecturer of Political Theory
Department of Political Economy
King's College London.

Read the other essays on the Covid-19 pandemic here: 

Working through COVID
Steven Klein, UK
Covid-19, Karl Polanyi and the Reality of Society
Fred Block and Margaret Somers, USA
Total exhaustion – Corona, Class and Nature
Stefanie Hürtgen, Austria
Quest for a self-sufficient nation
Ajith Raj R, India
Polanyi’s Warning: From Covid-19 to Food Sovereignty
Vishwas Satgar and Michelle Williams, South Africa
What kind of individual responsibility against the Covid-“war”?
Maria Markantonatou, Greece
A successful neoliberal tightrope walk
Jörg Flecker, Austria

Covid-19, Karl Polanyi and the Reality of Society

COVID-19

Debate on Covid-19

COVID, Karl Polanyi and
the Reality of Society

31st of July, 2020

Fred Block and Margaret Somers

One of Karl Polanyi’s fundamental concepts is “the reality of society”, a term he used to capture his conviction that human beings are interdependent, social beings, who are ethically responsible for the impact of their actions on others. The reality of society is his challenge to the market fundamentalist belief that society is an aggregate of individuals, each of whom seeks to maximize his or her utility.  In the words of Margaret Thatcher, one of the most influential 20th-century market fundamentalists, “There is no such thing as society…”

The economist Jared Bernstein characterized this philosophical difference with two acronyms—YOYO and WITT. YOYO stands for “You’re on Your Own,” while WITT is “We’re in This Together.” YOYO’s radical individualism defines human freedom as based on absolute independence and autonomy, and explains inequalities in income and wealth by different levels of individual talent and energy. Any efforts to interfere with the system of market rewards are bound to have perverse consequences and destroy the market’s incentive structure.  WITT, on the other hand, affirms the reality of society: we are socially interconnected, responsible for each other, and we need to take responsibility collectively for the differences in well-being between the rich and the poor.   

Over the last forty years in the United States YOYO has dominated, as billionaires and multi-millionaires have captured ever larger shares of society’s income and wealth. But COVID19, like all epidemics and pandemics, has challenged the reign of radical individualism and has the potential to teach us that we are all in this together. From its outbreak, public health officials explained that our obligation to our neighbors necessitates that we wash our hands repeatedly, practice social distancing, and sequester ourselves if we have symptoms. Whether or not one gets the disease has nothing to do with one’s personal worth and if we do get sick, our survival might well depend upon health care workers and the hospital facilities that exist to cope with such crises.

Most importantly, many of the poorly paid employees who we have been told deserve their low wages and dangerous working conditions suddenly became “essential workers” on whom everybody else depends.  The experience of delivery people, those who stock grocery store shelves, hospital janitors, farmworkers, the super-exploited and largely immigrant workers who toil in U.S. meat packing plants embodies the ambiguity of the new pandemic awareness: On the one hand, continuous with the cruel injustices of market fundamentalism, they are far more vulnerable to catch and die from the disease than more privileged workers who can work from home. But on the other, the pandemic also highlights that without their work, society would break down.

It is not a surprise then that pandemics have been accompanied by upsurges of social protest and social reform.  The Spanish Flu pandemic of 1918-1919 occurred alongside the greatest strike wave of world history.  And currently in the United States, while COVID-19 is still far from contained, the police murder of George Floyd in Minnesota has given rise to the largest mass protests that the country has seen since the 1960’s. 

While it was police violence that got the protests started, people are in the streets to dismantle the systemic racism that has relegated black and brown people to second class status in education, jobs, housing, income, and wealth.   Moreover, polling indicates that large majorities of white people are supportive of the protests. The existing justifications for poverty and inequality ring hollow as the pandemic reveals the fundamental falsehoods of market fundamentalism and its YOYO ethic.  If we are, in fact, our neighbor’s keepers, why is it then that some people earn $7.25 an hour while Jeff Bezos and Mark Zuckerberg get something closer to $1 million an hour?  If we are in this together, why is there not some basic justice in who gets to live with basic rights and dignity?

Whether the COVID pandemic does set off a new period of social reform in the U.S. remains highly uncertain. The threat of a regressive and authoritarian regime designed to protect the interests of the wealthy remains very real.  As Polanyi understood, rediscovering the reality of society can lead either to social reform or to fascism.

Fred Block

Research Professor of Sociology
University of California, Davis.
President of the Center for Engaged Scholarship,
Oakland, California

Margaret R. Somers

Professor Emerita of Sociology and History,
University of Michigan, Ann Arbor.
Political Economy, Social Theory,
Comparative Historical Sociology

Read the other essays on the Covid-19 pandemic here: 

Working through COVID
Steven Klein, UK
Covid-19, Karl Polanyi and the Reality of Society
Fred Block and Margaret Somers, USA
Total exhaustion – Corona, Class and Nature
Stefanie Hürtgen, Austria
Quest for a self-sufficient nation
Ajith Raj R, India
Polanyi’s Warning: From Covid-19 to Food Sovereignty
Vishwas Satgar and Michelle Williams, South Africa
What kind of individual responsibility against the Covid-“war”?
Maria Markantonatou, Greece
A successful neoliberal tightrope walk
Jörg Flecker, Austria

Total exhaustion – Corona, Class and Nature

COVID-19

Debate on Covid-19

Total exhaustion:
Corona, Class and Nature

31st of July, 2020

Stefanie Hürtgen

Mainstream discourses try to reduce Corona to “nature”, to a virus, an accidental outcome of some remote Chinese wet markets – or to an external shock that now troubles “our” economies. However, Corona is far from being external or “natural” – just as the climate crisis is not simply “weather” that descends on us. Corona is a social phenomenon, “collateral damage” from our neoliberal globalized capitalist economy. It is produced and reproduced by a mode of production, work and living that is organised around profit-orientation and capitalist competition. Its decisive source is the politically courted and economically powerful transnational agro-business. This industry clears forests on a large scale, destroys habitats, exterminates entire species and cages farm animals en masse, maltreating and weakening them. The accepted consequence is that microbes, viruses and bacteria can spread at great speed and mutate into dangerous pathogens in human bodies. It is the same industry that, in the midst of the pandemic and all over the Globe, is putting up with the fatal Covid-infection of thousands of typically migrant workers, forcing them to continue to work in the dangerous conditions of slaughterhouses and plantations while ignoring or supressing requests for protection and dignity at work and in their dormitories.

As Marx, Polanyi, and in particular the feminist care-debate, have shown, the rather peculiar parameter of profit, and the coercion to permanently enlarge it, systematically neglects our social interrelatedness among each other and as a part of nature. This is why Polanyi calls nature and labour fictitious commodities. Their treatment as objects and a source for maximizing profit destroys them both. This is exactly what happens. The commodification-fiction is no abstract idea but a daily nightmare-reality. The consequence is exhaustion. Total exhaustion is, actually, the widely used term by workers in the slaughterhouses to describe the effects of their working-conditions. We find it in many other workplaces, industries and services, not least in the health care system where economisation, commodification and privatisation deepen shortage of resources for the many and institutionalise two-tier medicine with high-class treatment for some. Total exhaustion, though, is also the status of nature where species, woods and lakes die while others become sick and continue to exist only in contaminated, objectified and privatised forms for the relaxation and distraction of those who can pay for it.

The antipode to total exhaustion, hence, is not individual leisure, the same as the antipode to Corona is not the strengthening of resilience and the formation of an authoritarian “new normality”. Both deny the socially and ecologically undermining character of the contemporary capitalist economy and project its bitter and destructive effects on a separated, dangerous “nature” with which we are at “war”, as for example French President Macron put it with remarkably bad taste.

The antipode to total exhaustion is to reintegrate nature and labour into society, or in Polanyi’s words, their decommodification. Decommodification is far more than the creation of some protective habitats and regulations for survival. It means the profound and democratic reorganisation of the economy and society on a world scale, in a way that recognises and institutionalizes nature and (man’s and woman’s) labour as the basic sources for social life. Following Polanyi, this project includes the question of power. Nice discourses about an ecological future and more global social responsibility are not only misleading, but, even more than that, they are dangerous, while they do not tackle destructive and reckless commodification and its agents, the transnational business-complexes and their shameless political protagonists.

Stefanie Hürtgen

is assistant professor at the University of Salzburg, Austria, and associated member of the Institute for Social Research (IfS) in Frankfurt, Germany. Her fields of research include global and European political economy, sociology of work and industry and economic and labour geography. Stefanie is member of the scientific board of Attac, the Rosa Luxemburg Foundation and the Mattersburg Circle for Development Policy at the Austrian Universities.

Read the other essays on the Covid-19 pandemic here: 

Working through COVID
Steven Klein, UK
Covid-19, Karl Polanyi and the Reality of Society
Fred Block and Margaret Somers, USA
Total exhaustion – Corona, Class and Nature
Stefanie Hürtgen, Austria
Quest for a self-sufficient nation
Ajith Raj R, India
Polanyi’s Warning: From Covid-19 to Food Sovereignty
Vishwas Satgar and Michelle Williams, South Africa
What kind of individual responsibility against the Covid-“war”?
Maria Markantonatou, Greece
A successful neoliberal tightrope walk
Jörg Flecker, Austria

Quest for a self-sufficient nation

COVID-19

Debate on Covid-19

Quest for a self-sufficient nation:

On the labour and land reforms by Indian states during the pandemic

31st of July, 2020

Ajith Raj R

On the eve of declaring a massive economic stimulus package for saving India’s pandemic hit economy, prime minister Narendra Modi declared that the package is aimed at creating an “atmanirbhar India”. Originally a Sanskrit term, “atmanirbhar” translates to self-sufficiency, resilience or self-sustenance. This term was introduced as a focal principle in the government’s strategy to counter the economic disaster that the pandemic has inflicted on the nation. This strategy envisions increasing indigenization and localisation of the production facilities and making India self-sufficient in every aspect of its economy. Two significant questions that arise at this point are: At what cost India is going to achieve this self-sufficiency, and what would that path look like?

In a bid to constitute an “atmanirbhar India”, several Indian states like Karnataka, Uttar Pradesh, Gujarat and Madhya Pradesh, have already started making significant reforms in land, labour laws and institutions to attract companies to set up their manufacturing units within their territories. The state governments of Uttar Pradesh and Gujarat have not only given a free hand to employers to hire and fire workers but have also provided them exemptions from labour inspection, while also coming down upon union activities. States like Karnataka have even amended the legal instruments that regulate the use of agricultural land to allow non-agriculturists to purchase agricultural land without restriction on the number of units, which was not the case before. In a nutshell, the governments have slashed down many social protections available to employees, even amidst strong opposition from labour organisations across the country. Similarly, the legal barriers which had previously been raised against the commodification of agriculture land have also been undermined.

Achieving “atmanirbhar” at the cost of what?
If these institutional changes are aligned with the new sermon of ‘atmanirbharta’, it is not very different from the conventional capitalist logic of the accumulation of profit by predating the “fictitious commodities,” as identified by Polanyi. The legal reforms are trying to make land and labour more “flexible” while providing minimal social protective measures. If this is the path chosen to create an “atmanirbhar” India, it is coming at the cost of social security of the labourers and the unsustainable use of natural resources.


Towards a resilient capitalism
It has been clear that the revisions of the legal provisions for labour and land are for commodifying these vital factors, after forcefully subjecting them to “invisible hands” which enables employers to accumulate wealth. Therefore, simply put, the vision of “atmanirbhar” and the path to achieving it is no different from the same old capitalist ethos, although it now comes with a battering of nationalism. The path to “atmanirbharta” appears to create prerequisite socio-economic and political conditions for capitalism to continue on its historic quest to find new “frontiers” where “cheaper fictitious commodities” are available. In short, the vision of “atmanirbhar” in its current form is poised to create resilient capitalism or “atmanirbhar-poonjivaad” founded on economic-centrism-at the cost of social securities of labour and unsustainable use of natural resources

Ajith Raj R

Research Assistant
Biodiversity and Ressource Monitoring Program
Dakshin Foundation
Bangalore, India

Read the other essays on the Covid-19 pandemic here: 

Working through COVID
Steven Klein, UK
Covid-19, Karl Polanyi and the Reality of Society
Fred Block and Margaret Somers, USA
Total exhaustion – Corona, Class and Nature
Stefanie Hürtgen, Austria
Quest for a self-sufficient nation
Ajith Raj R, India
Polanyi’s Warning: From Covid-19 to Food Sovereignty
Vishwas Satgar and Michelle Williams, South Africa
What kind of individual responsibility against the Covid-“war”?
Maria Markantonatou, Greece
A successful neoliberal tightrope walk
Jörg Flecker, Austria

Polanyi’s Warning: From Covid-19 to Food Sovereignty

COVID-19

Debate on Covid-19

Polanyi’s Warning:
From Covid-19 to Food Sovereignty

31st of July, 2020

Vishwas Satgar and Michelle Williams

A Polanyian perspective on nature renders visible the deleterious relationship humans have developed with nature, and thus Covid-19 and its disastrous consequences for our societies is not unexpected.  In the Great Transformation Polanyi cautions against naturalizing the ‘self-regulating market’ (see Satgar and Williams, 2019). He problematizes liberal philosophy’s use of biological evolution as a model for society and which asserts that the ‘self-regulating market’ was a natural outcome of economic history. This reification of the ‘self-regulating market’ occludes centuries of embedded market-society relations based on varied degrees and combinations of reciprocity, redistribution and householding, which makes the ‘self-regulating market’ anachronistic. In addition, Polanyi cautions against reducing land (nature), labour (human activity part of life/nature) and money (a token of purchasing power) to fictitious commodities, as these non-commodities would be subsumed to market rationality, valuation and exchange. Reducing land and labour to fictitious commodities subjects both nature and humans to the limitless appetites of the market.  Indeed, Polanyi warns us about the danger of turning  nature into an object of destruction, which is unleashed by the marketized destruction of society and nature.   In other words, the marketized destruction of nature was also about the destruction of society. Thus,  Polanyi argues that the self-protection of society against the market was also integrally about protecting nature.

Yet, with finance capital in the driving seat, there has been no heeding the warning signs.  Finance capital’s capture of our societies and its marketizing of social and natural relations—a process that intensified since the 1980s—produced the 2007-2009 great financial crisis. However, financialized ruling classes did not stop to reflect and redesign global economic institutions and processes. Instead, finance capital returned to the driving seat. 

For the carbon-centric and financialized global food regime, this meant three things: 

  1. First, there are more shocks on the global circuits of the globalized food system. For example, major shocks registered in different parts of the world in 2006-2008 (globally),  2009-2011 (globally), 2014-2017 (Southern and East Africa during a devastating drought), 2018 (globally due to a spike in the oil price) and in 2020 due to Covid-19.  The shock to the globalized food value chains due to Covid-19 has been devastating for many countries, leading a number of countries to turn inwards to ensure the security of their food supply chains.  

  2. Second, corporations continue with land grabs and the destruction of fragile eco-systems. A tragic example is the increasing destruction of the Amazon rain forests and the murders of indigenous activists trying to protect the fragile eco-system. Under Bolsanaro’s leadership cattle ranching, logging and illegal mining increasingly encroaches on this fragile eco-system and indigenous communities. As a result, slash and burn fires are contributing to the eco-cidal destruction of the green lung of planet earth and worsening the climate crisis. 

  3. Third, the destruction of fragile eco-systems through corporate land grabs and expanding industrial agriculture has made our societies vulnerable to zoonotic diseases like Covid-19. Pathogens in these habitats are released as exotic animals are stolen and commodified for elite consumption in ‘wet markets’ such as in Wuhan, China. Similarly, industrial farming knowingly breeds and nurtures deadly pathogens to meet the demands of fast food diets. The more financialized, globalized, mass-consumption- and carbon-based industrial agriculture persists, the more we increase the risk of pandemics emanating from corporate controlled food systems. There is overwhelming and growing evidence in this regard.

It is time for society to swing the pendulum of history to protect itself from the ravages of the financialized and globalized market.  For the food system, this means  we have to start building a new food system that is ethical, just, and ecological. This means advancing food sovereignty alternatives that are based on democratic control, the science of agro-ecology, indigenous knowledge, defending the commons, solidarity economy, healthy diets, and people’s cultures. In the midst of Covid-19 this is certainly happening in South Africa as well as many other places in the world.


Reference
Satgar, Vishwas and Michelle Williams. 2019. ‘Polanyi, Nature, and the International: the Missing Dimension of Imperial Ecocide’ in Capitalism in Transformation: movements and counter-movements in the 21st Century, edited by Roland Atzmüller, Brigitte Aulenbacher, Ulrich Brand, Fabienne Décieux, Karin Fischer, Birgit Sauer. London: Edgar Elgan Press: 198-211.

Vishwas Satgar

Associate Professor of International Relations,
Principal Investigator of the Emancipatory Futures Studies in the Anthropocene Programme and Co-Founder of the South African Food Sovereignty Campaign, University of the Witwatersrand (Wits)
Johannesburg, South Africa

Michelle Williams

Professor of Sociology,
Chairperson of the Global Labour University (GLU) programme
University of the Witwatersrand (Wits)
Johannesburg, South Africa

Read the other essays on the Covid-19 pandemic here: 

Working through COVID
Steven Klein, UK
Covid-19, Karl Polanyi and the Reality of Society
Fred Block and Margaret Somers, USA
Total exhaustion – Corona, Class and Nature
Stefanie Hürtgen, Austria
Quest for a self-sufficient nation
Ajith Raj R, India
Polanyi’s Warning: From Covid-19 to Food Sovereignty
Vishwas Satgar and Michelle Williams, South Africa
What kind of individual responsibility against the Covid-“war”?
Maria Markantonatou, Greece
A successful neoliberal tightrope walk
Jörg Flecker, Austria

What kind of individual responsibility against the Covid-“war”?

COVID-19

Debate on Covid-19

What kind of individual responsibility
against the Covid-“war”?

31st of July, 2020

Maria Markantonatou

The French philosopher Jean Baudrillard characterized September 11 as the “absolute event”[1], and ever since “absolute events” in the framework of various crises have become typical of the 21st century. The events are described as “war” and attributed to an “invisible threat”: Market speculative attacks in the 2008 financial crisis, so called terrorist attacks, and, recently, Covid-19 were labeled as “invisible threats” without much explanation of the underlying socio-economic causes. Medical and economic discourses are often merged, irresponsible individuals or individual countries are blamed, and “therapy” becomes urgent. For instance, as A. Gurría, OECD’s Secretary-General, had put it for the Greek crisis[2], “this [the Greek crisis] is like Ebola. When you realise you have it, you have to cut your leg off in order to survive”.

A decade after the outbreak of an Ebola-like economic crisis, the Covid-19 crisis broke out. The Greek right-wing government of Nea Demokratia, which was newly elected with a program of liberalization and privatizations combined with “law and order” politics, implemented a strict lockdown together with increased surveillance and policing as well as an intensive mass media campaign to persuade people to comply with the restrictive measures (“Stay Home” campaign).

From 12.03.2020, when the lockdown begun, until 04.05.2020, when it was gradually lifted, everyday at 18.00 o’ clock, the Greek TV-audience watched a team of medical experts and government officials announcing numerous preventive measures and providing detailed hygienic directions. Analyzing 46 TV announcements of the team, we find a specific rhetoric emerging, especially that of “war” and “individual responsibility”. That “we are at war [with Covid]” was mentioned daily, and the dictate to show “individual responsibility” was heard more than 120 times during these 46 press releases. A new polarization emerged, the “responsible” ones (those who stayed home and followed hygienic rules) vs. the “irresponsible” ones (those who were caught outside without a reason). The former were rewarded on TV by government officials (“we are proud of the responsible ones”), and for the latter there were punishment threats: “we won’t allow any deviance from the measures and we will show zero tolerance”. Be it out of fear of another social drama as that of the previous decade or low trust to the Greek public health system, most Greeks complied with the experts’ dictates (a mixture of scientific and moralistic arguments) and accepted “responsibility”.

Polanyi was a strong advocate of “responsibility” emerging from democratic participation to economic policy and the individuals’ overview of production in a socialist framework[3]. Of course, this is not the kind of responsibility propagandized by neoliberal governments today, including the Greek one, which celebrates its campaign as a “success story” due to the comparatively low number of total cases and deaths. Τhe contribution of the lockdown in these numbers has not been sufficiently studied, but the tragic events in neighboring Italy and the awareness of the Greek hospitals’ low current capacity made it appear as the only choice for the government. What was actually promoted in Greece in the name of safety was the neoliberal responsibility of individuals to secure alone their existence, in a social setting, in which, after ten years of intensive austerity, welfare institutions have been severely deteriorated and the public health system systematically deregulated. We were never further away from a Polanyian notion of responsibility. This would require socialist directions in welfare policy and economic democracy rather than non-stop market competition and liberalization.

 

[1] Baudrillard, Jean, The Spirit of Terrorism, Verso, London, 2012 (translated by Chris Turner)
[2] See: Greek debt crisis: Europe feels shockwaves as bailout falters. The Guardian. 28.04.2010. Available online: https://www.theguardian.com/business/2010/apr/28/greek-debt-crisis-europe-bailout
[3] Polanyi, Karl, Über die Freiheit, 1927, Karl Polanyi Institute of Political Economy, 2-16.

Maria Markantonatou

Assistant Professor, Department of Sociology,
University of the Aegean
Lesvos, Greece

Read the other essays on the Covid-19 pandemic here: 

Working through COVID
Steven Klein, UK
Covid-19, Karl Polanyi and the Reality of Society
Fred Block and Margaret Somers, USA
Total exhaustion – Corona, Class and Nature
Stefanie Hürtgen, Austria
Quest for a self-sufficient nation
Ajith Raj R, India
Polanyi’s Warning: From Covid-19 to Food Sovereignty
Vishwas Satgar and Michelle Williams, South Africa
What kind of individual responsibility against the Covid-“war”?
Maria Markantonatou, Greece
A successful neoliberal tightrope walk
Jörg Flecker, Austria

A successful neoliberal tightrope walk

COVID-19

Debate on Covid-19

A successful neoliberal tightrope walk

31st of July, 2020

Jörg Flecker

In the last months and weeks, intensive debates arose about work sharing measures such as short-time working and the rise of unemployment. They were sparked by the economic crisis triggered by measures against the COVID-19 pandemic, i.e. by governments’ decisions. As a consequence, governments might have been more willing to support negatively affected companies and workers than it would have been in case of a crisis merely caused by economic factors. It was nevertheless surprising to often hear ‘whatever it takes’ when it came to the costs of such measures.  The subtleties of debates and decision-making, however, come to the fore if we apply a Polanyian perspective of the double movement and the fictitious commodity of labour.

In many countries, the decades before the current crisis were characterised by a retrenchment of the welfare state and a withdrawal of workers’ social rights. On the labour market, this resulted in weaker securities in case of unemployment and increased pressure to take on jobs, i.e. a re-commodification of labour. In the situation of immediate crisis caused by the lockdown in March and April 2020, many governments were willing to avoid redundancies by offering state-subsidised short-time working schemes. In Austria, the funding of these followed the whatever-it-takes principle particularly explicitly. Yet, also other governments invested considerable means in such schemes. 

Looking at the Austrian example in more detail, we can see a striking difference between the treatment of the unemployed and those workers whose jobs could be saved, at least for the time being, through short-time working. To negotiate the latter, the government had recourse to the social partners they had not included a great deal in policy making in recent years. The outcome was not only presented within two days, it was also generous with subsidised payments to workers of up to 90 percent of their previous net wage regardless of hours worked. But not all companies adopted the short-time working scheme and in particular in the tourist industry many immediately made their workers redundant. Those were faced with an unemployment benefit only reaching 55 percent of their net wage. Of course, discussions also arose on the need to increase the net replacement rate of the unemployment benefit but they came to nothing.

Two aspects of these debates are particularly noteworthy: First, the discussion on an increase in unemployment benefits gained momentum in a situation in which the unemployment numbers shot up and it was becoming tangible that the fate of the newly unemployed was not their fault. Before, redundancies were spread over time and not visible enough to challenge the neoliberal narrative of the generally not-deserving unemployed. Second, the right-wing populist and neoliberal governing party ÖVP successfully blocked any improvement for the unemployed. The prime minister explicitly justified this with the need of businesses to be able to recruit workers and, one could add, that higher unemployment benefits make it harder to sustain low-wage employment.

What this Austrian example shows is an interesting combination of de-commodification and sustained re-commodification along the lines of a segmented labour market. Where companies were prepared to subscribe to the short-time working scheme taking the risk of deferred payment of subsidies and having to refrain from redundancies during the scheme, workers were protected from the sudden market downturn. This applied to the primary labour market of rather secure employment. In contrast, the workers in the segments with higher-and-fire policies were exposed to the adversity of the market. Thus, the government did not wander off the long-term path of re-commodification of labour in spite of generously supporting workers who faced job-losses caused of the measures taken against the COVID-19 pandemic.

Jörg Flecker

Professor of Sociology at University of Vienna,
Chair of the Working Life Research Centre (FORBA)
Vienna, Austria

Read the other essays on the Covid-19 pandemic here: 

Working through COVID
Steven Klein, UK
Covid-19, Karl Polanyi and the Reality of Society
Fred Block and Margaret Somers, USA
Total exhaustion – Corona, Class and Nature
Stefanie Hürtgen, Austria
Quest for a self-sufficient nation
Ajith Raj R, India
Polanyi’s Warning: From Covid-19 to Food Sovereignty
Vishwas Satgar and Michelle Williams, South Africa
What kind of individual responsibility against the Covid-“war”?
Maria Markantonatou, Greece
A successful neoliberal tightrope walk
Jörg Flecker, Austria