Inequality, The Logic of the Market, and The Left

By Matt Donoghue / @drdonoghue

A commitment to reducing and/or eradicating inequality has the potential to unite Labour’s soft and hard left, as well as other groups within and beyond the Labour Party. The UK has a long tradition of protecting a liberal form of civic equality – a commitment to individual equality in the eyes of the state (e.g. entitlement to a fair trial, universal suffrage). However, this equality does little to address unfair power balances in our society: gender inequalities, consistently growing income inequalities, the north-south divide, and the inability of more and more people to get a foot on the housing ladder, to name a handful.

Tackling these inequalities means going further than the framework of equality under the law. The left have attempted this in myriad ways over the decades, with varying success. This is because, I argue, many of the struggles to increase and deepen inequality take place within a framework that sets up the left for failure. Current debates around inequality fail to challenge the current workings of the market, which is the central terrain in which inequalities are (re)produced. Yet the market is more or less off-limits in terms of debate. To address inequality, we must challenge the market, and to do this we must first challenge the logic of the market.

What is the Logic of the Market, and why is it Important?

The ‘logic of the market’ is a set of rules and conventions that govern the operation of the market economy. This logic also governs the majority of socio-economic debates. The logic favours capital (e.g. businesses, property, investment etc.) over labour (e.g. the vast majority of people who must work for their income in order to get by), and focuses on scarcity and value. The market itself relies on the perpetuation of certain inequalities as a pre-requisite of its own survival (e.g. Williamson, 1985: 80). The logic of the market helps legitimise these inequalities as necessary or inevitable. Thus, if the left is serious about challenging inequality it must mount a challenge to this logic. The longevity, resourcefulness and reflexivity of contemporary capitalism, particularly in its neoliberal form, demonstrates that this will not be an easy task. It requires a clear political and – importantly – ideological strategy to do so.

This essay does not intend to debate the abstract merits and drawbacks of a market system. Indeed, within its own economic sphere, the market itself may very well be the most effective system of organising and trading resources and services. However, the logic of the market extends well beyond simple economic organisation and trade (Bourdieu, 2003: 67; Hall, 1996: 229). The logic governs many other social relationships and exchanges, and imposes a certain rationality on aspects of social and cultural life (imposing a particular understanding of ‘value’ on to art, the worth of community centres, and public goods, for example). The logic of the market, therefore, politicises the market as an institution. However, political convention dictates that the market is objective, disinterested and an amoral arbiter. This puts it beyond critique and debate. For example, questioning the efficacy of the market to deliver public goods and services has, until recently, resulted in being labelled as ‘loony left’ or similar.

Simultaneously politicising an institution whilst inoculating it from debate is an inherently ideological act. It allows for a legitimisation of the inequalities associated with value and profit that are essential to the workings of capitalism. Value is predicated on scarcity. Mass-produced items can be sold cheaply, whilst a one-off item can be incredibly expensive. Broadly speaking, the more demand there is for a product, the more value it has. As such, for a ‘product’ or service to be viable it must produce value, largely understood as profit. But the value of an object only has meaning in relation to other objects, be that products, labour power, the ‘value’ of professions and so on. The more value you can demonstrate, the better position you occupy in a market economy. Thus there is a necessary element of competition. Something (or someone) must be better, more efficient, or more able to make profit than its competitor. It is in this sense that inequality is essential to capitalism – without differences in value, there would be no point to profit. Conversely, inequality – if you are on the wrong side of it – has been proven to be damaging for your health, for your wellbeing, and for your social and economic prospects. So why hasn’t it been changed? Put simply, because the public-at-large feel powerless to effect change, or feel that there is not necessarily a problem that needs fixing.

Mounting the Challenge

Challenging the existence and supposed necessity of inequality requires challenging contemporary market society. We cannot at this stage challenge this logic as it pertains to economic organisation, as that would be seen as challenging the market. However, we can challenge the logic where it extends into society, culture and issues of the public good. This leaves the left with three sequential tasks. To challenge the dominance of the market, the logic of the market must be challenged. To challenge the logic, dominant discourses must be challenged and alternatives must be developed to take their place.

The left needs to engineer a situation whereby the notion that the market is the natural solution to issues of social and economic organisation is challenged. This will necessarily open space for debate as to whether the market is the best solution, which will eventually allow the left to present and promote alternative visions of the market or alternatives to the market. This is a difficult task because current dominant discourses (the language and imagery most prevalent in the social consciousness) are largely drawn from the right. The recent financial crisis and its aftermath provides a pertinent example of this. Such a crisis is a perfect platform for the left to promote its ideology. However, social democracy was in such a weak state in Europe (Ryner, 2014: 61) it simply could not win the necessary arguments, partially because developments such as the Third Way legitimised neoliberalism rather than humanised it (for a debate, see Leggett, 2004: 186-199) removing the centre-left’s ability to critique established political and economic orthodoxies. Indeed, a significant amount of support was gained by Podemos in Spain, Syriza in Greece and the Corbyn Labour leadership campaign because they presented a clear alternative to what much of the public began to see as a failed social democratic project. Ed Miliband’s Labour did attempt to begin questioning dominant discourses and thinking, but did so within the same frame it questioned, leading to a confusing and weak challenge.

The cultural aspects of the logic of the market are not bolstered by the same fierce defence, or the natural feeling that the market is the only way rather than one option of organising society (what Gramsci would call ‘common sense’ – see Landy, 2004: 48). This is where the left can begin to challenge the received wisdom and ‘social fact’ of the market. A problem when building such a strategy is demonstrating to the public how such challenges and alternative messages are on topic and relevant to them. This is why it makes more sense to discuss problems with the notions of value, worth and efficiency rather than discuss the market outright. This can also be done on traditionally left-wing territory, such as social goods and the public good. Recent polling shows a large section of the population supports renationalisation of the railway for example, whilst the NHS constantly polls high support from the public. In these areas it is easy to argue, convincingly, that some public goods should not be reduced to crude approximations of value and profit. Public transport is a necessity for many people, and is a lifeline for vulnerable people; its primary benefit should be to those who use it rather than stakeholders and those who expect a return on their capital. Why, then, can a similar argument not be made for housing? This does not mean that the left must argue vociferously for a traditional understanding of council housing and uniformity. Rather it must make the case, strongly and unflinchingly, that housing is a social good and must come before profit (but again, this does not necessarily mean that profit cannot and should not be made). Without this crucial stage, no alternative can be proposed. Why would the voting public (many of whom have a vested interest in investing in, and making a profit from, property, or have never needed to rely on social and affordable housing) accept the idea that there should be a massive increase in house building, or more houses should return to council ownership, or tenants unions should be set-up, or housing associations should be co-operatives so that residents have a say in the future of housing in their area?

Migration provides another example of the pervasiveness of orthodox understandings of value. A common reaction to anti-migrant sentiment is to demonstrate what migration contributes to the country. Beyond some ‘soft’ cultural benefits (such as cuisine or music, perhaps) arguments tend to rely on economics. Migrants pay more in than they take out, they are overwhelmingly in employment, and they actively create jobs. Besides not necessarily assuaging emotional fears held by some sections of the population, these arguments can dehumanise the entire process of migration by reducing the stories of people who leave their homes and families to simple economic cost-benefit analyses. Rather discourses should focus on the empathetic and sympathetic elements, personalising the process of migration. Consider the recent and ongoing refugee crises and the speed with which an image of a deceased child on a beach transformed the language of the crisis – no longer were people looking to protect their families and begin new lives a ‘swarm’.

The bottom line: Power and Framing

Unorthodox ideas, before they can gain any traction, need to overcome the inertia of not being generally accepted. Yet the inertia creates a paradox: in defining an unorthodox idea, it must be placed in relation to the orthodox. This ‘new’ idea is different to the commonly held idea; it is not that idea. In other words it is very difficult to define opposition to something without inadvertently using the language and imagery of that which is being opposed. If we accept that current dominant discourses are generally of the right, it means that left wing arguments and ideas are initially assessed from a right-wing viewpoint. The challenge, then, is to be able to subvert, question, contaminate and challenge these discourses to create space for more left wing positions to come into the ascendancy.

Nye Bevan famously said that ‘the language of priorities is the religion of socialism’. The logic of the market constructs a frame in which priorities are understood in relation to profit rather than the social good. It is up to the left to recast these priorities to favour a logic of the social good, rather than of the market – to, at the very least, ensure the market works in service of the people rather than people working in service of the market.


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