Britain has gone through comprehensive marketization of welfare and care services over the past 40 years. The result of this process is a strongly gendered and racialized care economy that mostly employs low earning women, non-whites and migrants to offer personal care services for the professional and affluent classes, and their elderly and children.
The more affluent have also been increasingly relying on private childcare, schooling and healthcare services, the costs of which have skyrocketed over time. In contrast, the unpaid care burden has increased in the personal lives of those who cannot afford the private services.
a significant share of the British population is facing a crisis of care
Today, a significant share of the British population is facing a crisis of care, as many families are squeezed between the growingly unaffordable private care services and the continually deteriorating public ones, along with their own longer and more unpredictable working hours. Informal communal and family networks offer a coping mechanism to some.
These changes in the daily experience of life in Britain have been shaped by the big transformation of the country’s economy which started under Margaret Thatcher. Economic restructuring towards financial services as the new engine of growth started during the 1980s. It was meant to boost the country’s international competitiveness in the context of its waning influence of the postcolonial era, accelerating globalization and emerging manufacturing competition from the cheaper global South.
In other words, financialization of the British economy, which was declaredly driven by economic concerns, has not only affected the world of formal work. It has profoundly reshaped everything that concerns the realm of social reproduction, from how people access basic life reproducing services such as health and education, to how they care for themselves, their children, their elderly, and how they interact with their communities.
Financialization and marketization of welfare
The dynamics of social reproduction were changed by a reconfiguration of the country’s welfare system. In fact, privatization and marketization of welfare and education were key policy tools that were used continually over the past 40 years to underpin financialization. But, as I go on to show, these policies were not implemented without the consent of the British public which has been prioritizing its consumer power over little else.
My colleagues and I established this relationship between financialization and the transformation of the British welfare state at the backdrop of a broad social science tendency to either ignore or banalize the relationship between economic processes and welfare state reforms (see Avlijaš, Hassel and Palier, 2021). Scholarship has habitually associated the demise of the publicly funded welfare state with demographic trends such as ageing and immigration, and the associated changes in political cleavages. Those who do associate the rise of neoliberalism with retrenchment of the welfare state have a tendency to present neoliberalism as an abstract exogenous force that is taking away agency from national governments and their constituencies.
By highlighting this relationship between voter preferences and public policy in Britain, we are pointing to a perhaps uncomfortable truth that we do have agency over our national logics of welfare formation, even in the neoliberal era
Our argument that governments are actively directing welfare state reforms in order to feed a specific economic model is particularly conspicuous in the case of the UK, given its global leadership in carving a financialization driven growth strategy which has allowed it a new position of dominance in the rapidly changing global economic landscape. Moreover, the median voter has been benefiting from these reforms as they have led to an amelioration of material conditions for a certain majority. By highlighting this relationship between voter preferences and public policy in Britain, we are pointing to a perhaps uncomfortable truth that we do have agency over our national logics of welfare formation, even in the neoliberal era.
Complete privatization of the pension schemes which was envisaged by the Thatcher government was not politically feasible, given public resistance to privatization of basic and complementary public pension systems. Yet, the government’s aim of expanding private pension funds in order to boost financialization of the economy was pushed through by offering attractive fiscal exemptions to those with a public complementary pension who chose to ‘opt out’ from public schemes.
Extensive privatization of social housing and deregulation of the housing market were also an important part of the wider plan. The Thatcher government eased access to credit for the middle classes during the 1980s and created a new constituency of homeowners by introducing a national ‘Right to Buy’ policy. This policy particularly benefitted low and middle income groups who purchased homes cheap and benefitted from the skyrocketing prices afterwards.
Housing thus became an additional source of savings for retirement. The expanding housing market has also fuelled financial product innovation, making access to mortgages easier for the poorer and less creditworthy households. This is how interest rates and access to credit became a more salient political issue in the UK than labour rights.
The rising demand for education, to access high paying jobs in financial services, was recognized by the Blair government as another opportunity to feed financialization. The government started to encourage marketization and financialization of the higher education system through withdrawal of state funding and introduction of educational loans.
Since the majority of people were not exposed to long spells of unemployment, due to economic growth and an increasingly dynamic and flexible labour market, demand for social protection was reduced, allowing further retrenchment. Moreover, only a minimal safety net against poverty favours the existence of a low wage labour market, which boosts the productivity of highly skilled workers, as they can outsource many of their non-work-related responsibilities to cheap service workers (Morel 2015). Higher rates of homeownership also increased public support for welfare state retrenchment because government borrowing to finance public welfare expenditures could end up raising interest rates.
The state has also continued to maintain the consumption capacity of the lower wage workers through cheap state interventions such as income tax credits on earnings or the minimum wage. This was important economically, a not only politically, because domestic demand is a key driver of financialization, so reducing people’s capacity to consume below a certain level can have a negative effect on growth.
Last but not least, through extensive outsourcing of government services to the private sector in a publicly supported ideological attempt to spend less on public welfare and provide cheaper and more efficient public services, UK has allowed a deterioration of public services including health, while actually spending more of the taxpayers’ money and syphoning it off into the pockets of private companies (Innes 2021). Therefore, pressures for short-term material gains of the median voter have trumped longer-term interests of the society as a whole.
Enter gender, race and immigration
This direction of transformation of the British society been made possible by the well-established historical habit of offloading social costs onto the more marginalized groups. As most of us are aware nowadays, a disproportionate share of women and minorities are typically in charge of social reproduction, the unpaid or underpaid labour that takes place in households, schools, hospitals, eateries, communities. Since there is no capitalist production without the daily and generational renewal of the worker, social reproduction has been referred to as the invisible engine of capitalism (see Bhattacharya, 2017).
With the growing empowerment of the predominantly white women and their entry into the professional classes, along with the concurrent deterioration of public services, social reproduction responsibilities become increasingly marketized and passed onto the low earning women, often of migrant and non-white background. This group has also included Eastern European immigrants, which Blagojevic (2010) has referred to as ‘non-white whites’.
The bottom line is, migrant labour is cheaper.
The disproportionate reliance on migrant female labour force to provide personal and care services to the more affluent professional classes has been reinforced by geographic inequalities across the UK. For those in smaller communities, incentives to move to London and care for the more affluent are not very high because they rely on their own communities and intergenerational family networks to compensate for the deterioration of the welfare state. Housing ownership and cheaper lifestyles are also making them less mobile. The bottom line is, migrant labour is cheaper.
While immigrants are overrepresented in the lower skill personal and care services sector, the Migration Observatory at the University of Oxford shows that the high skilled immigrants, especially those from Africa and parts of Asia, are also disproportionately working in the healthcare professional sector, as doctors and nurses. This is another disbalance that has been reinforced by the financialization of the educational system. UK students are incentivized to seek the better paid jobs in finance to pay off their educational loans.
Moreover, public funding cuts over the past decade have pushed British universities even further towards capital markets. This matters because university rankings, which determine their access to capital markets, are increasingly based on graduate earnings indicators, which offer universities’ a strong incentive to prepare students for highly lucrative careers in the financial services, rather than careers in healthcare, education and other sectors which support social reproduction.
The future is here
Social organisation which depends on the exploitation of personal and communal resources along the lines of race, gender and citizenship to provide wellbeing to its population is not only socially unjust, but also unsustainable in today’s world which is realizing that there are limits to prioritizing current consumption over little else.
People’s prioritization of current consumption capacities over longer run sustainability is starting to catch up with them and closing off their futures
The comprehensive withdrawal of the state from the realm of social reproduction, and the growing personal burden of unpaid care is making it impossible for a growing number of people to invest in their futures, and in the futures of their children. People’s prioritization of current consumption capacities over longer run sustainability is starting to catch up with them and closing off their futures. The migrant labour force, whether low or high skilled, is also increasingly constrained by the growing costs of their own social reproduction in the UK, making jobs in the British care economy less attractive to them.
The chance ofowning a home in the UK has also more than halved between the early 1990s and now, while no new stocks of social housing have been built. Younger generations are thus no longer having the same opportunity to accumulate wealth as the older constituency of homeowners who purchased housing during the Thatcher era. Social spending is thus gaining more political salience than interest rates.
The pandemic has also highlighted the importance of social reproduction by showing to all of us how much work needs to be done when care provisioning institutions are not able to function and when one cannot rely on external labour to support their caring responsibilities (see Avlijaš, 2021). It has also emphasized the importance of essential workers and the broader undervalued sectors that are linked to social reproduction through provision of food, health, education, and even leisure and arts.
People are also beginning to see that personal and communal resources are key for surviving any downturn. In the absence of progressive and continual social investment that would replenish these social ‘stabilizers’ and make them more resilient for the longer run, each new crisis will simply lead to their further depletion. Furlough schemes and absence of commuting have also opened up possibilities for people to establish a different relationship to social reproduction, by cooking healthier meals for themselves, tending to their gardens, or spending more time with their children.
Growing labour shortages in the care sector, offset by Brexit and exacerbated by the pandemic, will likely increase the value of these services, and reinforce social innovations in the organisation of social reproduction. Ageing is another challenge which adds urgency to these processes.
These multiple factors are coming together and creating a window of opportunity for new political coalitions that could make Britain transform its relationship to social reproduction. A turn to a more sustainable model of socio-economic organisation will depend on the society’s ability to face its own cost of social reproduction and to redistribute it more evenly. In all weathers, we should expect a growing salience of social reproduction and the economy of care in the post-covid arena of ‘noisy’ politics.
Avlijaš, Sonja. (2021). “Security for whom? Inequality and Human Dignity in Times of the Pandemic”. In Pandemics, Society and Politics: Critical Reflections on Covid-19, edited by Gerard Delanty, De Gruyter, Berlin. Pp. 227-242. https://doi.org/10.1515/9783110713350
Avlijaš, Sonja, Hassel, Anke and Palier, Bruno. (2021). “Growth Strategies and Welfare State Reforms in Europe”. Chapter 12 inGrowth and Welfare in Advanced Capitalist Economies. How Have Growth Regimes Evolved?,edited by Bruno Palier and Anke Hassel, Oxford University Press. Pp. 373-436. DOI: 10.1093/oso/9780198866176.003.0012
Bhattacharya, Tithi. (2017). Social Reproduction Theory: Remapping Class, Recentering Oppression. London: Pluto Press.
Blagojevic, Marina. (2010). “Non-‘White’ Whites, Non-European Europeans and Gendered Non-Citizens: On a Possible Epistemic Strategy from the Semiperiphery of Europe”. In Scherrer, C. & Young, B. (eds.) Gender Knowledge and Knowledge Networks and International Political Economy,Baden-Baden: Nomos. Pp.183-197. doi.org/10.5771/9783845223858
Innes, Abby. (2021). The limits of institutional convergence: why public sector outsourcing is less efficient than Soviet enterprise planning, Review of International Political Economy, 28:6, 1705-1728, DOI: 10.1080/09692290.2020.1786434
Morel, Nathalie. (2015). “Servants for the knowledge-based economy? The political economy of domestic services in Europe.” Social Politics: International Studies in Gender, State & Society 22(2): 170–92. DOI: 10.1093/sp/jxv006
Sonja Avlijaš is a Marie Sklodowska-Curie Fellow at the Faculty of Economics, University of Belgrade and a research associate at Sciences Po, Paris. She holds a PhD in political economy from the LSE. Interested in the secrets of modern capitalism, Sonja researches what life at the European periphery can tell us about the international political economy of globalization, financialization and digitalization. She is devoted to supporting subalterns in their efforts to interpret the complexity of their experiences in today’s world. She will be completing her book on gender, work, social reproduction and the post-1989 world order during her 2022 Wayne Vuchinich fellowship at Stanford University.
Header Image Credit: Flickr, creative commons license (Michael Summers)
TO CITE THIS ARTICLE:
Avlijaš, Sonja 2021. ‘Care chains and social reproduction of privilege before and after Covid-19’ Discover Society: New Series 1 (4): https://doi.org/10.51428/dsoc.2021.04.0006