The OECD, the World Bank, COVID-19 and the Implications for Future Policy
This is a slightly amended version of a paper contributed to the Birmingham Political Economy Workshop on Political Economic Trends after the Covid-19 Pandemic on 16 June 2022. It draws on and updates the final chapter of The Politics of Global Competitiveness. I am grateful to David Bailey and Ruben Gonzalez-Vicente for inviting me, and to the participants for their comments – especially to Pinar Donmez, who presented the paper and opened the discussion.
Summary
The OECD and the World Bank have always been committed to a global capitalist economy organised on liberal principles. They urge all governments to maximise the proportion of their population in employment, and to carry out reforms that will make those in work as productive as possible. Their response to COVID-19 is primarily of interest because it reveals the assumptions on which their analysis is based, and illustrates the speed and precision with which they identified and responded to both the challenges and opportunities the pandemic provided. When the pandemic broke out, they already had in place a policy framework that analysed health and other emergencies in accordance with the goal of promotion of capitalism on a global scale. Within this framework, they have addressed the threats that COVID-19 poses and sought to make it as productive as possible for their continuing commitment to furthering the politics of global competitiveness. Despite significant setbacks their central objective, the development of the world’s population as a resource for global capital, remains unchanged. It is likely to be pursued more intensively than ever by governments around the world in the wake of the pandemic – not because the OECD or the World Bank says so, but because more than ever today the immanent laws of capital, which are the point of departure for both organisations, oblige all nations, on pain of extinction, to adopt the bourgeois mode of production.
Introduction
The development of the world market, or of capitalism on a global scale, is the foundational purpose and lifelong vocation of two organisations, the World Bank and the OECD, created at key ‘liberal moments’ – 1944-5 and 1960-61 respectively – during and after the Second World War. They can be seen as institutional personifications of capital, with its ‘universalising’ tendency to create the world market, and ‘to posit production based on capital in place of earlier modes of production, which appear primitive from its standpoint’ (Marx, 1973, pp. 407-8). Of course, these two organisations are not the prime movers here. Rather, they embrace, promote, and seek as best they can to manage tendencies inherent in the concept of capital itself, or its immanent laws of reproduction. Broadly speaking, the World Bank seeks to proletarianize the poor in the developing world, while the OECD seeks to improve the capacity of capital to extract productive labour (relative surplus value) from the working class in the developed world. These projects have converged towards a single universal regime, as the Bank seeks to draw the vast labour reserve in the developing world into formally regulated labour markets, while the OECD seeks to ‘make work pay’, and to draw into the labour market sectors of the population regarded as ‘hard to reach’. The overall objective is a single global labour market along with a universal regime of social protection that protects people for rather than from change, and aims to maximize the proportion of the population in productive formal employment. COVID-19 posed serious dangers for this project, but in combatting them they have sought at the same time to exploit the opportunities it presents to move it forward.
The first requirement for production based on capital is the availability of an exploitable proletariat. Where capital is not sufficiently dominant to secure this through its own dynamics, it depends on various forms of initial, ‘primitive’ or ‘original’ accumulation (such as merchant trade, slave-based production, and the separation of non-capitalist producers from the means of production). But once it is able to stand on its own two feet, ‘capitalist production … reproduces and perpetuates the conditions under which the worker is exploited. It incessantly forces him to sell his labour-power in order to live, and enables the capitalist to purchase labour-power in order that he may enrich himself. … The capitalist process of production, therefore, seen as a total, connected process, i.e. as a process of reproduction, produces not only commodities, not only surplus value, but it also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-labourer (Marx 1976, p. 724). This is the task to which the OECD and the World Bank devote themselves, on capital’s behalf. The global population is the raw material out of which the capital-relation is fashioned, but the immanent laws of capital do not address the issue of the reproduction of that population as a whole, nor do they provide for any basis for recognition of the idea of human flourishing. Faithful to this logic, the OECD and the World Bank, as institutions, reduce the idea of human flourishing to the universalisation of the capital relation, or the exploitation of labour by capital.
There is no mystery about the fact that if your vocation is to develop capitalism on a global scale, your first task is to nurture the production of an available and efficiently exploitable proletariat, equally on a global scale. It is Liberal Political Economy 101, spelled out in the opening pages of Adam Smith’s Wealth of Nations, and it is pretty much all you need to know about the orientation of the OECD and the World Bank. It informs their policy advice from the beginning, from their insistence on endowing workers with sufficient energy, health, and education to make them exploitable and productive, to their opposition to protectionism (whether in advanced or developing countries) on the grounds that it inhibits the development of the world market through competition, their development of political strategies to further the hegemony of capital over labour, their close attention over near enough fifty years to the need to reform Western European-style welfare and create a universal regime of active labour market policy and ‘social protection’ that compels the propertyless majority to offer themselves for work, and their development over the last decade of techniques aimed at ‘nudging’ that majority towards choices that sustain the capitalist order. At the same time, they have striven over the last two decades to develop a comprehensive ‘unified theory’ of global capitalist hegemony, an ambition reflected in policies aimed at incorporating the billions of ‘informal sector’ workers across the world into fully capitalist labour markets, and in a parallel effort to rethink approaches to health and environmental crises and emergencies in order that responses to them should further the global hegemony of capital. In every instance, the limits to capital appear as barriers to be overcome. I call this the ‘politics of global competitiveness’ (Cammack, 2022). The policymakers concerned with promoting it are fully aware that the essence of capitalism is class struggle, that the capitalist mode of production is riddled with inherent contradictions, and that recurrent crises are inevitable. Such crises, whether in the form of periodic collapses and recessions, or in areas that may appear only indirectly connected to capitalist development, are not going to change their thinking (as some hoped during the ‘global financial crisis’, and may still for all I know).
Adam Smith located the wealth of nations in ‘the proportion between the number of those who are employed in useful labour, and that of those who are not so employed’, and the ‘skill, dexterity, and judgement’ with which a nation’s labour was employed, and associated the improvement in the productive powers of labour that would bring prosperity with ‘the quantity of capital stock which is employed in setting them to work, and the particular way in which it is so employed’ (Smith, 1970, pp. 104-5). The commitment of the OECD and the World Bank to these principles identifies them as quintessentially liberal organisations. In The Politics of Global Competitiveness, I show that they were not only embedded in the thinking of the OECD and the World Bank from the start, but also developed with particular intensity in the wake of the ‘global financial crisis’, notably in World Development Report 2013: Jobs (World Bank, 2012), and a clutch of publications towards the end of the decade: the World Bank’s World Development Report 2019: The Changing Nature of Work (World Bank 2019) and the OECD’s revised Jobs Strategy (OECD 2018) and Employment Outlook 2019: The Future of Work (OECD 2019) explored in detail the kind of worker that global capital requires, and the implications for society as a whole. Then, in World Development Report 2020, Trading for Development in the Age of Global Value Chains(World Bank 2020), the World Bank turned directly to the development of the world market itself. Viewed as a connected whole, these documents advanced a framework for pushing ‘under-employed’ workers in the developed world into a higher level of employment and pulling informal sector workers in the developing world into the formal sector. Informed throughout as they were by strategies for perfecting the means and extent to which labour could be squeezed out of diverse households across their life cycle, targeting women in particular, and shaping social protection to the needs of capital and the labour market, they added up to a comprehensive programme for maximizing the extraction of productive labour from the global population as a whole.
It was at this point that the COVID pandemic struck. Spreading across the world from late 2019 onwards, it unfolded against the background of an environmental crisis centred on global warming that was increasingly recognised as an existential threat. Each of these crises endangered the project of bringing into being an inclusive global capitalist order in a world market characterized by competitiveness at all levels, in which workers were reliable producers of surplus value for capital. The pandemic not only created a health emergency around the world and plunged the global economy into a sharp recession, but also threatened two key components of the OECD-World Bank model – the mobility of goods and workers within and across borders, and the endowment of tomorrow’s workers with the education and skills that capital would require of them. At the same time, it created opportunities to push ahead with other aspects of the project – notably, the development of digital platforms and resources that could potentially transform the world of work, the enrolment of informal sector workers and firms into reformed schemes of social protection, and the concomitant watering down of the protection enjoyed by large numbers of formal sector workers in the developed world towards a common minimum productive for capital. In the formal sector, world-wide, the pandemic disrupted the world of work, pushing firms to undertake radical re-organisation while throwing workers onto the defensive and side-lining the organisations through which they were represented.
There is ample evidence – in the 240 policy briefs produced by the OECD by April 2022 in its Policy Responses to Coronavirus (COVID-19) series and the dozens of assorted briefs and working papers produced by the World Bank – to identify the basic contours of their response, and that is my purpose here. I summarise the emergence of a unified theory of adaptability and resistance across the two organisations from the early years of this century, then document their responses to COVID, showing how they sought to orient it to serve their long-term agenda.
A unified theory of adaptability and resilience
In the period of the ‘global financial crisis’, World Development Report 2010: Development and Climate Change (World Bank 2009) and World Development Report 2011: Conflict, Security, and Development (World Bank 2011) addressed the means by which other forms of crisis could be alleviated. The Bank accepted entirely the need for urgent action on climate change, but presented it at the same time as an opportunity to generate productive employment through private sector investment in new technologies. So even at the height of the worst crisis of global capitalism in its history, it advocated without qualification solutions centred on private enterprise. The OECD also addressed global warming in the context of its commitment to private sector-led inclusive growth, in Aligning Policies for a Low-carbon Economy(OECD 2015) and Investing in Climate, Investing in Growth (OECD 2017), stitching its response to climate change seamlessly into its broader agenda: ‘Implement structural reform policies that boost both productivity and economic activity, as well as supporting the transition to low-emission, climate-resilient economies, through easier resource reallocation; faster technology development and diffusion; greater dynamism in labour markets; and measures to facilitate firm entry and exit’ (OECD 2017, p. 36). In the following year, its revised Jobs Strategy would highlight the need ‘to foster resilience and adaptability of the labour market to achieve good economic and labour market performance’ (OECD, 2018, pp. 3-4). Adaptability and resilience now covered everything, signifying ‘the effectiveness with which individuals, institutions and societies absorb and adapt to economic shocks, and make the most out of the new opportunities arising from megatrends such as technological change (including automation and digitalisation), climate and demographic change and globalisation’ (ibid, p. 47). Climate change had become just another opportunity.
Over the same period the World Bank moved in the same direction, bringing a broader set of ideas linking risk, resilience and opportunity together in the notion of ‘adaptive social protection’. Its social protection and labour strategy, Resilience, Equity, and Opportunity, adopted for the period 2012-2022, invoked a world ‘increasingly becoming interconnected and risky, with economic shocks and epidemics flowing across national borders’, and presented social protection and labour programmes as protecting against what might be called ‘negative’ risks and enabling ‘positive’ risks, ‘directly improv[ing] resilience by helping people insure against drops in well-being from different types of shocks’, and ‘also promot[ing] opportunity by building human capital, assets, and access to jobs and by freeing families to make productive investments because of their greater sense of security’ (World Bank, 2012, p. xi; see further Cammack, 2012). It was followed a year later by Building Resilience: Integrating climate and disaster risk into development. Lessons from World Bank Group experience, in which the Bank offered a framework for ‘climate and disaster resilient development’, bringing the strands of the 2010 and 2011 World Development Reports together. It built in doing so on the IPCC [Intergovernmental Panel on Climate Change] definition of resilience as the ‘ability of a system and its component parts to anticipate, absorb, accommodate or recover from the effects of a hazardous event in a timely and efficient manner, including through ensuring the preservation, restoration or improvement of its essential basic structures and functions’ (World Bank, 2013, p. 4). The core chapter, ‘Towards Climate and Disaster Resilient Development’, cemented the link to the broader Bank policy on managing risk by quoting directly from World Development Report 2014: Risk and Opportunity: Managing Risk for Development: ‘Taking on risks is necessary to pursue opportunities for development. The risk of inaction may well be the worst option of all’ (ibid, p. 15).
This work culminated in two publications that would position the World Bank’s response to COVID-19, both authored by its Social Protection and Jobs Global Practice. The first, Protecting All: Risk Sharing for a Diverse and Diversifying World of Work (Packard et al 2019), set out in the form of a ‘White Paper’ an extremely ambitious plan to break definitively with the idea of a standard employment contract, end protection from dismissal by removing statutory obligations such as severance pay, switch over time from a minimum wage to basic state income support disconnected from employment, and transfer to the worker the responsibility for saving for (inevitable) periods of unemployment. This was seen explicitly as a universal model, building on convergence already under way in the developed and developing worlds, and it promoted an ‘adaptive and resilient’ policy stance that would switch protection from ‘jobs’ to ‘workers’, obliging the latter to adapt to a ‘diverse and fluid world of work’, with the obligation to ‘manage’ one’s own labour market transitions and dislocation with the ‘support’ of state-funded active labour market policies managed by private agencies. The second, Adaptive Social Protection: Building Resilience to Shocks, broadened the field of vision, evoking a global landscape ‘fraught with interconnected and often devastating covariate shocks such as natural disasters, economic crises, pandemics, conflicts, and forced displacement’, and identifying a ‘widespread demand for the use of social protection as a tool to build the resilience of poor and vulnerable households to these kinds of covariate shocks’ (Bowen et al. 2020, p. 1). It brought economic shocks, natural disasters and climate change into a single framework, with unemployment, asset loss, and food insecurity respectively seen as the routes by which shocks are transmitted. Crucially, adaptation in all three cases was conceived in terms of the accumulation of human capital and the potential for mobility:
With sufficient adaptive capacity, a more resilient household can make investments that reduce both its exposure and vulnerability to shocks over the longer term. This includes diversifying or adjusting livelihood portfolios away from sources of income that are especially vulnerable to the impacts of a shock; building a larger and more diversified asset base, including productive, financial, and human capital-related assets to enable these adjustments in livelihood portfolios; and/or leveraging such assets to relocate away from an area of spatially concentrated risk. Indeed, the ultimate expression of adaptive capacity may be the household’s ability to reduce its exposure to a shock altogether through relocation and planned migration when in situ adjustments to livelihood and assets portfolios fail and where remaining in place would lead to chronic vulnerability and even maladaptation’ (ibid, p. 4).
In short, the logic of capital was supreme, and as Marx’s general theory of social production foreshadowed (Cammack 2022,pp.122-5, and https://www.politicsofglobalcompetitiveness.com/new-essays.html), workers and households would be obliged to practice versatility, flexibility and mobility both to succeed in the labour market, and to escape the consequences of ‘natural’ disasters. Physics may still lack a unified theory, but the World Bank does not.
COVID-19: ‘Building back better’ for a resilient and inclusive recovery
The immediate impulse in response to the pandemic may have had humanitarian elements, but there was more to it than that. Both organisations favour a thoroughly competitive and productive global labour regime, in which workers have ‘human capital’ that makes them able to compete for work, and ‘social protection’ that both helps and obliges them to do so. Their shared objective of establishing common conditions of subjection to capital for all workers in the world market entails pressing down on the more ‘privileged’, while seeking to level up those with the least access to an ‘efficient’ and ‘productive’ universal minimum, and shifting the costs from firms to individuals. Both organisations seek to move away from the ‘standard labour contract’ associated with full-time formal sector work to a lesser set of rights attached to all forms of work, part-time, short-term and casual work and disguised self-employment included. These would guarantee sick pay, holiday entitlements, and sometimes pension schemes for those in work but at the same time licence flexible working hours, remove protection against termination, and push the costs of pension provision largely onto the individual worker. This is at the same time a benchmark for the World Bank as it seeks to move more than two billion ‘informal’ workers into the formal sector – hence the convergence on what is imagined as a universal minimum in a perfectly competitive global labour market in which all workers compete on equal terms (Cammack 2022, Chapter 4). Their response to COVID-19, conducted under the slogan ‘Building Back Better’, seeks to advance this agenda. Each has been emphatic that the way forward is to redouble efforts to drive the development of the world economy forward on liberal lines: from the start, in both cases, the goal of a global economy marked at all levels by competitiveness was kept to the fore, along with the insistence that it would have to include the world’s poor as potentially productive workers, and incorporate policies aimed at addressing climate change and sustainability.
As detailed in the final chapter of The Politics of Global Competitiveness, which covers the response up to early 2021, both organisations were anxious from the start to take every opportunity to advance their agenda, and to limit or avoid any responses that might derail the push for growth and competitiveness. While they wholeheartedly welcomed teleworking and flexible hours, the extension of paid sick leave and unemployment benefit to non-standard workers including the self-employed, and the provision of online training, they warned that although it might be necessary to offer temporary support for jobs and incomes, care should be taken not to support jobs that would have been preserved anyway, or that were not viable in the longer term. Similarly, restrictions on dismissals should be removed as soon as possible, to allow displaced workers to find their way to jobs with a future. For the OECD, it was essential to ‘minimise the risk that stimulus spawns a new cohort of corporate zombies or national champions that could restrict competition, dampen domestic productivity growth, distort international markets, and impede the economic recovery and, in some cases, aggravate economic disparities’ (OECD, 2020a, p. 1). For the World Bank measures to support jobs and firms should be ‘time bound and transparent to avoid perverse incentives and longer-run market distortions’, and in general ‘policy choices should not only offset the immediate negative impact, but also create foundations for productivity-driven growth during the recovery period by seeking to minimize distortions and disincentives that can hamper recovery efforts’ (World Bank, 2020a, pp. 42-43). The OECD’s June 2020 Economic Outlook challenged policymakers to ‘find ways of identifying and supporting viable jobs and companies in the near term whilst allowing sufficient flexibility for necessary resource allocation to occur across sectors to minimise long-term scarring and restore productivity growth’ (OECD 2020b, p. 32), and its July Employment Outlook drew on positions addressed above to propose a plan for labour market reform that made ‘non-standard’ workers the point of reference, as summarised in an editorial (‘From Recovery to Resilience after COVID-19’), contributed by the organisation’s Director of Employment, Labour and Social Affairs, Stefano Scarpetta (Cammack, 2022, 180-81). There was an opportunity to target support measures ‘to ensure that those in need really get help, while fostering the incentives to go back to work for those who can’, limiting the duration of subsidies and strengthening incentives to look for work or training, while reforming social protection so that non-standard workers could ‘build up rights to the types of out-of-work support that are already available to standard employees’ (OECD 2020c, pp. 13-16).
The Employment Outlook was wholly focused on taking advantage of the pandemic to press for a thorough transformation of labour markets across the OECD, and in the December issue of the Economic Outlook the strategy was clearly defined: ‘Exceptional crisis-related policies need to be accompanied by the structural reforms most likely to raise opportunities for displaced workers and improve economic dynamism, fostering the reallocation of labour and capital resources towards sectors and activities that strengthen growth, enhance resilience and contribute to environmental sustainability’ (OECD, 2020d, p. 39). ‘The policies put in place to foster the recovery from COVID-19’, the report added, were ‘an opportunity to address … old and new challenges’: ‘Measures put in place at the height of the pandemic to support jobs, incomes and companies need to be flexible and agile, increasingly focused on workers rather than jobs, and on companies expected to be viable as the recovery progresses, and be accompanied by structural policy reforms that will help to accelerate the recovery’ (ibid: 49).
Across the Atlantic, meanwhile, World Bank president David Malpass’s foreword to the Bank’s June 2020 issue of Global Economic Prospects placed its crusade against the informal sector and low productivity front and centre, highlighting the ‘importance of allowing an orderly allocation of new capital towards sectors that are productive in the new post-pandemic structures that emerge’: ‘To succeed in this, countries will need reforms that allow capital and labour to adjust relatively fast – by speeding the resolution of disputes, reducing regulatory barriers, and reforming the costly subsidies, monopolies and protected state-owned enterprises that have slowed development’ (World Bank, 2020b, pp. xiii-xiv). The January 2021 edition would reiterate the same message. But at the same time it dwelt at length on the threat the pandemic was causing to the goal of drawing workers into the global economy, and endowing future workers with the skills they would need to compete in global labour markets: growth was declining, debt was spiralling, global value chains were being disrupted, levels of poverty and inequality were worsening rapidly, and prolonged unemployment carried the risk that workers would leave the labour force altogether, while school closures were disrupting learning. This threatened a ‘decade of disappointments’ as hard-won gains were lost, with attendant risks of civil and social unrest (Cammack, 2022, pp. 177-9). The impact of the pandemic was judged to be particularly adverse to its project of transforming the informal economy in the developing world. This was the central message of the 2020 Update on the Human Capital Index launched in 2018, which began with the estimate that worldwide, on the eve of the COVID-19 crisis, ‘the average newborn could only be expected to achieve 56 percent of her potential productivity as a future worker’ (World Bank 2020c). With so much still to be done, it warned that its initial simulations suggested that
school closures combined with family hardship are significantly affecting the accumulation of human capital for a generation of school-age children. The impacts appear comparable in magnitude to the gains many countries achieved during the previous decade, suggesting that the pandemic may roll back many years’ worth of human-capital progress. In parallel, COVID-19’s disruption of health services, losses in income, and worsened nutrition are expected to increase child mortality and stunting, with effects that will be felt for decades to come (ibid, pp. ix-x).
Every relevant indicator, from the components of the HCI itself to the newly introduced measures of basic and full utilisation of labour, was negatively affected, and governments around the developing world were facing falling revenues, rising costs and mounting debt. The Bank feared especially that in the poorest and most vulnerable households, where choices were forced when crisis struck, the closure of schools and the sharp drop in economic activity would lead to behavioural changes that would damage the project: the poorest families were least able to support their children’s education when schools closed, and were most likely to miss the contribution of school feeding programmes to nutritional status; and they would find it harder ‘to justify sending older children back to school after a forced interruption, especially if households are under financial stress’ (ibid, p. 70). Workers who lost their jobs might be unwilling to return in the future to low-paid work that required different skills (ibid, p. 73).
The important point here is that the OECD and the World Bank had an overall objective, and a plan. They recognised from the start that an opportunity had been presented, unwelcome as it was, to push their programme forward, and they took it. On 11 January 2021 Ugo Gentilini, the World Bank’s global lead for social assistance, posted an article on his ‘Let’s Talk Development’ Bank blog page entitled ‘A game changer for social protection? Six reflections on COVID-19 and the future of cash transfers’ (Gentilini, 2021). It addressed increased investment in social protection, predominantly through emergency cash transfers, and asked whether the pandemic could ‘offer an opportunity to move the needle in scaling-up social protection more permanently’. In the blog post he identified a number of factors that might either help or hinder a permanent shift, concluding that: ‘Sometimes history presents an unexpected window of opportunity for change. When this occurred in the past, windows tended to close rapidly, and the path taken (or not taken) at those junctures could set the course for decades’. As the pandemic spread, he would lead a World Bank-UNICEF global monitoring platform that monitored initiatives in social protection across emerging and developing economies in a ‘living’ (periodically updated) paper, documenting a total of 3,856 social protection and labour measures planned or implemented in 223 countries as of January 2022, in the areas of social assistance, social insurance and active labour market programmes (Gentilini et al, 2022).
Conclusion
In the editorial that introduced the OECD’s 2021 Employment Outlook (sub-title: Navigating the COVID-19 Crisis and Recovery) OECD Director for Employment, Labour and Social Affairs Stefano Scarpetta neatly encapsulated the approach described above. Headed ‘Seizing the moment to build a more inclusive labour market’, it estimated job losses due to the pandemic at 22 million in the OECD area, and 114 million worldwide, noted that it had ‘amplified existing inequalities in labour market outcomes, skills and opportunities’, and identified ‘a unique opportunity for bold labour market and social policies to avoid locking in inequality and exclusion as a legacy of the crisis’ (OECD 2021a, p. 4). Its policy prescription made it clear that at least as far as the OECD was concerned, efforts to build an inclusive capitalist world market should be intensified. This is a ‘once-in-a-lifetime opportunity to address the main long-standing structural challenges that have been exacerbated by COVID-19’ (p. 6, emphasis original): governments should therefore promote job creation while providing an effective bridge to recovery for those still affected by the crisis; ‘think big’ and address the right structural issues affecting the labour market; invest in effective skills policies to reduce inequalities and minimise individual risks; invest further in the infrastructure of investment systems to help jobseekers find work effectively; and address long-standing gaps in social protection to foster inclusiveness (ibid, pp. 6-8). ‘A window of opportunity is opening’, it concluded. ‘Let us not waste it’ (ibid, p. 8). In short, by June 2021 the OECD had completed the task of repurposing the epidemic as a means to redouble efforts to drive its agenda forward.
It is the World Bank’s Human Capital Project Year Three Progress Report, issued in November 2021, however, that shows best just how swiftly and thoroughly COVID-19 was repurposed to serve the cause of global competitiveness. The Project itself could not be more transparent, focusing with laser-like precision as it does on the policies required to turn future global human labour entirely to the productive service of capital. The report first summarises the extent of the setback that the pandemic represents:
‘The pandemic has resulted in widespread job losses. Globally, between 2019 and 2020, women’s employment declined by 4.2 percent (a drop of 54 million jobs), while men’s employment declined by 3 percent (60 million jobs). While men’s employment is expected to return to 2019 levels in 2021, there will be 13 million fewer women in employment (ILO, July 2021). The impact on global poverty is also significant, with 97 million additional people having been pushed into poverty in 2020 (World Bank, June 2021). People’s ability to use their human capital productively has been seriously affected, as well as their ability to provide the right nutrition and education for their children’ (World Bank 2021, p. 8).
In what follows, the Bank imagines a renewed social contract (p. 19) intended to maximise the potential of the global population for productive labour and turn it wholly to the service of capital. It does so by calculating two Utilization-Adjusted Human Capital Indices (UHCIs), intended to ‘adjust the HCI for labour-market underutilization of human capital in a consistent way across a large number of countries’. It does this because the five components of the index ‘do not cover all the important aspects of the accumulation and productive use of human capital’: ‘When today’s child becomes a worker in the future, in many countries she may not be able to find a job; even if she can, it might not be a job in which she can fully use her skills and cognitive abilities to increase her productivity. In these cases, her human capital can be considered underutilized’. The Bank is concerned with future adults only as resources exploitable by capital, and it develops two further indices that ‘represent the long-run income gains if an economy moves to the frontier where human capital is complete and completely utilized’. In the first, the basic UHCI, ‘utilization is measured as the fraction of the working-age population that is employed’. But this simple and intuitive measure ‘cannot capture the fact that a large share of employment in developing countries is in jobs for which workers may not be able to fully use their human capital to increase their productivity. The full UHCI adjusts for this shortcoming by introducing the concept of betteremployment, which represents the types of jobs (for non-agricultural employees and employers) that are common in high-productivity economies. The full utilization rate depends on the fraction of an economy’s working-age population in better employment.’ (p. 20).
As is clear, you can trace a direct line back from here to the 2013 World Development Report, Jobs, then to the focus on universal provision of basic nutrition, health and education in World Development Reports from 1978 onwards, and all the way back to Adam Smith’s emphasis in 1776 upon the proportion of the population in work, the development of their skills, and the increase in their productivity through the application of capital to the production process. This being so, Marx’s critique, addressed to Smith and Ricardo among others, still stands:
‘It is not individuals who are set free by free competition, it is, rather, capital that is set free. … It is nothing more than free development on a limited basis – the basis of the rule of capital. This kind of individual freedom is therefore at the same time the most complete suspension of all individual freedom, and the most complete subjugation of individuality under social conditions which assume the form of objective powers, even of overpowering objects – of things independent of the relations among individuals themselves’ (Marx 1973, pp. 650-52).
References
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World Bank. 2021. Human Capital Project Year Three Progress Report. Washington DC: World Bank.
Summary
The OECD and the World Bank have always been committed to a global capitalist economy organised on liberal principles. They urge all governments to maximise the proportion of their population in employment, and to carry out reforms that will make those in work as productive as possible. Their response to COVID-19 is primarily of interest because it reveals the assumptions on which their analysis is based, and illustrates the speed and precision with which they identified and responded to both the challenges and opportunities the pandemic provided. When the pandemic broke out, they already had in place a policy framework that analysed health and other emergencies in accordance with the goal of promotion of capitalism on a global scale. Within this framework, they have addressed the threats that COVID-19 poses and sought to make it as productive as possible for their continuing commitment to furthering the politics of global competitiveness. Despite significant setbacks their central objective, the development of the world’s population as a resource for global capital, remains unchanged. It is likely to be pursued more intensively than ever by governments around the world in the wake of the pandemic – not because the OECD or the World Bank says so, but because more than ever today the immanent laws of capital, which are the point of departure for both organisations, oblige all nations, on pain of extinction, to adopt the bourgeois mode of production.
Introduction
The development of the world market, or of capitalism on a global scale, is the foundational purpose and lifelong vocation of two organisations, the World Bank and the OECD, created at key ‘liberal moments’ – 1944-5 and 1960-61 respectively – during and after the Second World War. They can be seen as institutional personifications of capital, with its ‘universalising’ tendency to create the world market, and ‘to posit production based on capital in place of earlier modes of production, which appear primitive from its standpoint’ (Marx, 1973, pp. 407-8). Of course, these two organisations are not the prime movers here. Rather, they embrace, promote, and seek as best they can to manage tendencies inherent in the concept of capital itself, or its immanent laws of reproduction. Broadly speaking, the World Bank seeks to proletarianize the poor in the developing world, while the OECD seeks to improve the capacity of capital to extract productive labour (relative surplus value) from the working class in the developed world. These projects have converged towards a single universal regime, as the Bank seeks to draw the vast labour reserve in the developing world into formally regulated labour markets, while the OECD seeks to ‘make work pay’, and to draw into the labour market sectors of the population regarded as ‘hard to reach’. The overall objective is a single global labour market along with a universal regime of social protection that protects people for rather than from change, and aims to maximize the proportion of the population in productive formal employment. COVID-19 posed serious dangers for this project, but in combatting them they have sought at the same time to exploit the opportunities it presents to move it forward.
The first requirement for production based on capital is the availability of an exploitable proletariat. Where capital is not sufficiently dominant to secure this through its own dynamics, it depends on various forms of initial, ‘primitive’ or ‘original’ accumulation (such as merchant trade, slave-based production, and the separation of non-capitalist producers from the means of production). But once it is able to stand on its own two feet, ‘capitalist production … reproduces and perpetuates the conditions under which the worker is exploited. It incessantly forces him to sell his labour-power in order to live, and enables the capitalist to purchase labour-power in order that he may enrich himself. … The capitalist process of production, therefore, seen as a total, connected process, i.e. as a process of reproduction, produces not only commodities, not only surplus value, but it also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-labourer (Marx 1976, p. 724). This is the task to which the OECD and the World Bank devote themselves, on capital’s behalf. The global population is the raw material out of which the capital-relation is fashioned, but the immanent laws of capital do not address the issue of the reproduction of that population as a whole, nor do they provide for any basis for recognition of the idea of human flourishing. Faithful to this logic, the OECD and the World Bank, as institutions, reduce the idea of human flourishing to the universalisation of the capital relation, or the exploitation of labour by capital.
There is no mystery about the fact that if your vocation is to develop capitalism on a global scale, your first task is to nurture the production of an available and efficiently exploitable proletariat, equally on a global scale. It is Liberal Political Economy 101, spelled out in the opening pages of Adam Smith’s Wealth of Nations, and it is pretty much all you need to know about the orientation of the OECD and the World Bank. It informs their policy advice from the beginning, from their insistence on endowing workers with sufficient energy, health, and education to make them exploitable and productive, to their opposition to protectionism (whether in advanced or developing countries) on the grounds that it inhibits the development of the world market through competition, their development of political strategies to further the hegemony of capital over labour, their close attention over near enough fifty years to the need to reform Western European-style welfare and create a universal regime of active labour market policy and ‘social protection’ that compels the propertyless majority to offer themselves for work, and their development over the last decade of techniques aimed at ‘nudging’ that majority towards choices that sustain the capitalist order. At the same time, they have striven over the last two decades to develop a comprehensive ‘unified theory’ of global capitalist hegemony, an ambition reflected in policies aimed at incorporating the billions of ‘informal sector’ workers across the world into fully capitalist labour markets, and in a parallel effort to rethink approaches to health and environmental crises and emergencies in order that responses to them should further the global hegemony of capital. In every instance, the limits to capital appear as barriers to be overcome. I call this the ‘politics of global competitiveness’ (Cammack, 2022). The policymakers concerned with promoting it are fully aware that the essence of capitalism is class struggle, that the capitalist mode of production is riddled with inherent contradictions, and that recurrent crises are inevitable. Such crises, whether in the form of periodic collapses and recessions, or in areas that may appear only indirectly connected to capitalist development, are not going to change their thinking (as some hoped during the ‘global financial crisis’, and may still for all I know).
Adam Smith located the wealth of nations in ‘the proportion between the number of those who are employed in useful labour, and that of those who are not so employed’, and the ‘skill, dexterity, and judgement’ with which a nation’s labour was employed, and associated the improvement in the productive powers of labour that would bring prosperity with ‘the quantity of capital stock which is employed in setting them to work, and the particular way in which it is so employed’ (Smith, 1970, pp. 104-5). The commitment of the OECD and the World Bank to these principles identifies them as quintessentially liberal organisations. In The Politics of Global Competitiveness, I show that they were not only embedded in the thinking of the OECD and the World Bank from the start, but also developed with particular intensity in the wake of the ‘global financial crisis’, notably in World Development Report 2013: Jobs (World Bank, 2012), and a clutch of publications towards the end of the decade: the World Bank’s World Development Report 2019: The Changing Nature of Work (World Bank 2019) and the OECD’s revised Jobs Strategy (OECD 2018) and Employment Outlook 2019: The Future of Work (OECD 2019) explored in detail the kind of worker that global capital requires, and the implications for society as a whole. Then, in World Development Report 2020, Trading for Development in the Age of Global Value Chains(World Bank 2020), the World Bank turned directly to the development of the world market itself. Viewed as a connected whole, these documents advanced a framework for pushing ‘under-employed’ workers in the developed world into a higher level of employment and pulling informal sector workers in the developing world into the formal sector. Informed throughout as they were by strategies for perfecting the means and extent to which labour could be squeezed out of diverse households across their life cycle, targeting women in particular, and shaping social protection to the needs of capital and the labour market, they added up to a comprehensive programme for maximizing the extraction of productive labour from the global population as a whole.
It was at this point that the COVID pandemic struck. Spreading across the world from late 2019 onwards, it unfolded against the background of an environmental crisis centred on global warming that was increasingly recognised as an existential threat. Each of these crises endangered the project of bringing into being an inclusive global capitalist order in a world market characterized by competitiveness at all levels, in which workers were reliable producers of surplus value for capital. The pandemic not only created a health emergency around the world and plunged the global economy into a sharp recession, but also threatened two key components of the OECD-World Bank model – the mobility of goods and workers within and across borders, and the endowment of tomorrow’s workers with the education and skills that capital would require of them. At the same time, it created opportunities to push ahead with other aspects of the project – notably, the development of digital platforms and resources that could potentially transform the world of work, the enrolment of informal sector workers and firms into reformed schemes of social protection, and the concomitant watering down of the protection enjoyed by large numbers of formal sector workers in the developed world towards a common minimum productive for capital. In the formal sector, world-wide, the pandemic disrupted the world of work, pushing firms to undertake radical re-organisation while throwing workers onto the defensive and side-lining the organisations through which they were represented.
There is ample evidence – in the 240 policy briefs produced by the OECD by April 2022 in its Policy Responses to Coronavirus (COVID-19) series and the dozens of assorted briefs and working papers produced by the World Bank – to identify the basic contours of their response, and that is my purpose here. I summarise the emergence of a unified theory of adaptability and resistance across the two organisations from the early years of this century, then document their responses to COVID, showing how they sought to orient it to serve their long-term agenda.
A unified theory of adaptability and resilience
In the period of the ‘global financial crisis’, World Development Report 2010: Development and Climate Change (World Bank 2009) and World Development Report 2011: Conflict, Security, and Development (World Bank 2011) addressed the means by which other forms of crisis could be alleviated. The Bank accepted entirely the need for urgent action on climate change, but presented it at the same time as an opportunity to generate productive employment through private sector investment in new technologies. So even at the height of the worst crisis of global capitalism in its history, it advocated without qualification solutions centred on private enterprise. The OECD also addressed global warming in the context of its commitment to private sector-led inclusive growth, in Aligning Policies for a Low-carbon Economy(OECD 2015) and Investing in Climate, Investing in Growth (OECD 2017), stitching its response to climate change seamlessly into its broader agenda: ‘Implement structural reform policies that boost both productivity and economic activity, as well as supporting the transition to low-emission, climate-resilient economies, through easier resource reallocation; faster technology development and diffusion; greater dynamism in labour markets; and measures to facilitate firm entry and exit’ (OECD 2017, p. 36). In the following year, its revised Jobs Strategy would highlight the need ‘to foster resilience and adaptability of the labour market to achieve good economic and labour market performance’ (OECD, 2018, pp. 3-4). Adaptability and resilience now covered everything, signifying ‘the effectiveness with which individuals, institutions and societies absorb and adapt to economic shocks, and make the most out of the new opportunities arising from megatrends such as technological change (including automation and digitalisation), climate and demographic change and globalisation’ (ibid, p. 47). Climate change had become just another opportunity.
Over the same period the World Bank moved in the same direction, bringing a broader set of ideas linking risk, resilience and opportunity together in the notion of ‘adaptive social protection’. Its social protection and labour strategy, Resilience, Equity, and Opportunity, adopted for the period 2012-2022, invoked a world ‘increasingly becoming interconnected and risky, with economic shocks and epidemics flowing across national borders’, and presented social protection and labour programmes as protecting against what might be called ‘negative’ risks and enabling ‘positive’ risks, ‘directly improv[ing] resilience by helping people insure against drops in well-being from different types of shocks’, and ‘also promot[ing] opportunity by building human capital, assets, and access to jobs and by freeing families to make productive investments because of their greater sense of security’ (World Bank, 2012, p. xi; see further Cammack, 2012). It was followed a year later by Building Resilience: Integrating climate and disaster risk into development. Lessons from World Bank Group experience, in which the Bank offered a framework for ‘climate and disaster resilient development’, bringing the strands of the 2010 and 2011 World Development Reports together. It built in doing so on the IPCC [Intergovernmental Panel on Climate Change] definition of resilience as the ‘ability of a system and its component parts to anticipate, absorb, accommodate or recover from the effects of a hazardous event in a timely and efficient manner, including through ensuring the preservation, restoration or improvement of its essential basic structures and functions’ (World Bank, 2013, p. 4). The core chapter, ‘Towards Climate and Disaster Resilient Development’, cemented the link to the broader Bank policy on managing risk by quoting directly from World Development Report 2014: Risk and Opportunity: Managing Risk for Development: ‘Taking on risks is necessary to pursue opportunities for development. The risk of inaction may well be the worst option of all’ (ibid, p. 15).
This work culminated in two publications that would position the World Bank’s response to COVID-19, both authored by its Social Protection and Jobs Global Practice. The first, Protecting All: Risk Sharing for a Diverse and Diversifying World of Work (Packard et al 2019), set out in the form of a ‘White Paper’ an extremely ambitious plan to break definitively with the idea of a standard employment contract, end protection from dismissal by removing statutory obligations such as severance pay, switch over time from a minimum wage to basic state income support disconnected from employment, and transfer to the worker the responsibility for saving for (inevitable) periods of unemployment. This was seen explicitly as a universal model, building on convergence already under way in the developed and developing worlds, and it promoted an ‘adaptive and resilient’ policy stance that would switch protection from ‘jobs’ to ‘workers’, obliging the latter to adapt to a ‘diverse and fluid world of work’, with the obligation to ‘manage’ one’s own labour market transitions and dislocation with the ‘support’ of state-funded active labour market policies managed by private agencies. The second, Adaptive Social Protection: Building Resilience to Shocks, broadened the field of vision, evoking a global landscape ‘fraught with interconnected and often devastating covariate shocks such as natural disasters, economic crises, pandemics, conflicts, and forced displacement’, and identifying a ‘widespread demand for the use of social protection as a tool to build the resilience of poor and vulnerable households to these kinds of covariate shocks’ (Bowen et al. 2020, p. 1). It brought economic shocks, natural disasters and climate change into a single framework, with unemployment, asset loss, and food insecurity respectively seen as the routes by which shocks are transmitted. Crucially, adaptation in all three cases was conceived in terms of the accumulation of human capital and the potential for mobility:
With sufficient adaptive capacity, a more resilient household can make investments that reduce both its exposure and vulnerability to shocks over the longer term. This includes diversifying or adjusting livelihood portfolios away from sources of income that are especially vulnerable to the impacts of a shock; building a larger and more diversified asset base, including productive, financial, and human capital-related assets to enable these adjustments in livelihood portfolios; and/or leveraging such assets to relocate away from an area of spatially concentrated risk. Indeed, the ultimate expression of adaptive capacity may be the household’s ability to reduce its exposure to a shock altogether through relocation and planned migration when in situ adjustments to livelihood and assets portfolios fail and where remaining in place would lead to chronic vulnerability and even maladaptation’ (ibid, p. 4).
In short, the logic of capital was supreme, and as Marx’s general theory of social production foreshadowed (Cammack 2022,pp.122-5, and https://www.politicsofglobalcompetitiveness.com/new-essays.html), workers and households would be obliged to practice versatility, flexibility and mobility both to succeed in the labour market, and to escape the consequences of ‘natural’ disasters. Physics may still lack a unified theory, but the World Bank does not.
COVID-19: ‘Building back better’ for a resilient and inclusive recovery
The immediate impulse in response to the pandemic may have had humanitarian elements, but there was more to it than that. Both organisations favour a thoroughly competitive and productive global labour regime, in which workers have ‘human capital’ that makes them able to compete for work, and ‘social protection’ that both helps and obliges them to do so. Their shared objective of establishing common conditions of subjection to capital for all workers in the world market entails pressing down on the more ‘privileged’, while seeking to level up those with the least access to an ‘efficient’ and ‘productive’ universal minimum, and shifting the costs from firms to individuals. Both organisations seek to move away from the ‘standard labour contract’ associated with full-time formal sector work to a lesser set of rights attached to all forms of work, part-time, short-term and casual work and disguised self-employment included. These would guarantee sick pay, holiday entitlements, and sometimes pension schemes for those in work but at the same time licence flexible working hours, remove protection against termination, and push the costs of pension provision largely onto the individual worker. This is at the same time a benchmark for the World Bank as it seeks to move more than two billion ‘informal’ workers into the formal sector – hence the convergence on what is imagined as a universal minimum in a perfectly competitive global labour market in which all workers compete on equal terms (Cammack 2022, Chapter 4). Their response to COVID-19, conducted under the slogan ‘Building Back Better’, seeks to advance this agenda. Each has been emphatic that the way forward is to redouble efforts to drive the development of the world economy forward on liberal lines: from the start, in both cases, the goal of a global economy marked at all levels by competitiveness was kept to the fore, along with the insistence that it would have to include the world’s poor as potentially productive workers, and incorporate policies aimed at addressing climate change and sustainability.
As detailed in the final chapter of The Politics of Global Competitiveness, which covers the response up to early 2021, both organisations were anxious from the start to take every opportunity to advance their agenda, and to limit or avoid any responses that might derail the push for growth and competitiveness. While they wholeheartedly welcomed teleworking and flexible hours, the extension of paid sick leave and unemployment benefit to non-standard workers including the self-employed, and the provision of online training, they warned that although it might be necessary to offer temporary support for jobs and incomes, care should be taken not to support jobs that would have been preserved anyway, or that were not viable in the longer term. Similarly, restrictions on dismissals should be removed as soon as possible, to allow displaced workers to find their way to jobs with a future. For the OECD, it was essential to ‘minimise the risk that stimulus spawns a new cohort of corporate zombies or national champions that could restrict competition, dampen domestic productivity growth, distort international markets, and impede the economic recovery and, in some cases, aggravate economic disparities’ (OECD, 2020a, p. 1). For the World Bank measures to support jobs and firms should be ‘time bound and transparent to avoid perverse incentives and longer-run market distortions’, and in general ‘policy choices should not only offset the immediate negative impact, but also create foundations for productivity-driven growth during the recovery period by seeking to minimize distortions and disincentives that can hamper recovery efforts’ (World Bank, 2020a, pp. 42-43). The OECD’s June 2020 Economic Outlook challenged policymakers to ‘find ways of identifying and supporting viable jobs and companies in the near term whilst allowing sufficient flexibility for necessary resource allocation to occur across sectors to minimise long-term scarring and restore productivity growth’ (OECD 2020b, p. 32), and its July Employment Outlook drew on positions addressed above to propose a plan for labour market reform that made ‘non-standard’ workers the point of reference, as summarised in an editorial (‘From Recovery to Resilience after COVID-19’), contributed by the organisation’s Director of Employment, Labour and Social Affairs, Stefano Scarpetta (Cammack, 2022, 180-81). There was an opportunity to target support measures ‘to ensure that those in need really get help, while fostering the incentives to go back to work for those who can’, limiting the duration of subsidies and strengthening incentives to look for work or training, while reforming social protection so that non-standard workers could ‘build up rights to the types of out-of-work support that are already available to standard employees’ (OECD 2020c, pp. 13-16).
The Employment Outlook was wholly focused on taking advantage of the pandemic to press for a thorough transformation of labour markets across the OECD, and in the December issue of the Economic Outlook the strategy was clearly defined: ‘Exceptional crisis-related policies need to be accompanied by the structural reforms most likely to raise opportunities for displaced workers and improve economic dynamism, fostering the reallocation of labour and capital resources towards sectors and activities that strengthen growth, enhance resilience and contribute to environmental sustainability’ (OECD, 2020d, p. 39). ‘The policies put in place to foster the recovery from COVID-19’, the report added, were ‘an opportunity to address … old and new challenges’: ‘Measures put in place at the height of the pandemic to support jobs, incomes and companies need to be flexible and agile, increasingly focused on workers rather than jobs, and on companies expected to be viable as the recovery progresses, and be accompanied by structural policy reforms that will help to accelerate the recovery’ (ibid: 49).
Across the Atlantic, meanwhile, World Bank president David Malpass’s foreword to the Bank’s June 2020 issue of Global Economic Prospects placed its crusade against the informal sector and low productivity front and centre, highlighting the ‘importance of allowing an orderly allocation of new capital towards sectors that are productive in the new post-pandemic structures that emerge’: ‘To succeed in this, countries will need reforms that allow capital and labour to adjust relatively fast – by speeding the resolution of disputes, reducing regulatory barriers, and reforming the costly subsidies, monopolies and protected state-owned enterprises that have slowed development’ (World Bank, 2020b, pp. xiii-xiv). The January 2021 edition would reiterate the same message. But at the same time it dwelt at length on the threat the pandemic was causing to the goal of drawing workers into the global economy, and endowing future workers with the skills they would need to compete in global labour markets: growth was declining, debt was spiralling, global value chains were being disrupted, levels of poverty and inequality were worsening rapidly, and prolonged unemployment carried the risk that workers would leave the labour force altogether, while school closures were disrupting learning. This threatened a ‘decade of disappointments’ as hard-won gains were lost, with attendant risks of civil and social unrest (Cammack, 2022, pp. 177-9). The impact of the pandemic was judged to be particularly adverse to its project of transforming the informal economy in the developing world. This was the central message of the 2020 Update on the Human Capital Index launched in 2018, which began with the estimate that worldwide, on the eve of the COVID-19 crisis, ‘the average newborn could only be expected to achieve 56 percent of her potential productivity as a future worker’ (World Bank 2020c). With so much still to be done, it warned that its initial simulations suggested that
school closures combined with family hardship are significantly affecting the accumulation of human capital for a generation of school-age children. The impacts appear comparable in magnitude to the gains many countries achieved during the previous decade, suggesting that the pandemic may roll back many years’ worth of human-capital progress. In parallel, COVID-19’s disruption of health services, losses in income, and worsened nutrition are expected to increase child mortality and stunting, with effects that will be felt for decades to come (ibid, pp. ix-x).
Every relevant indicator, from the components of the HCI itself to the newly introduced measures of basic and full utilisation of labour, was negatively affected, and governments around the developing world were facing falling revenues, rising costs and mounting debt. The Bank feared especially that in the poorest and most vulnerable households, where choices were forced when crisis struck, the closure of schools and the sharp drop in economic activity would lead to behavioural changes that would damage the project: the poorest families were least able to support their children’s education when schools closed, and were most likely to miss the contribution of school feeding programmes to nutritional status; and they would find it harder ‘to justify sending older children back to school after a forced interruption, especially if households are under financial stress’ (ibid, p. 70). Workers who lost their jobs might be unwilling to return in the future to low-paid work that required different skills (ibid, p. 73).
The important point here is that the OECD and the World Bank had an overall objective, and a plan. They recognised from the start that an opportunity had been presented, unwelcome as it was, to push their programme forward, and they took it. On 11 January 2021 Ugo Gentilini, the World Bank’s global lead for social assistance, posted an article on his ‘Let’s Talk Development’ Bank blog page entitled ‘A game changer for social protection? Six reflections on COVID-19 and the future of cash transfers’ (Gentilini, 2021). It addressed increased investment in social protection, predominantly through emergency cash transfers, and asked whether the pandemic could ‘offer an opportunity to move the needle in scaling-up social protection more permanently’. In the blog post he identified a number of factors that might either help or hinder a permanent shift, concluding that: ‘Sometimes history presents an unexpected window of opportunity for change. When this occurred in the past, windows tended to close rapidly, and the path taken (or not taken) at those junctures could set the course for decades’. As the pandemic spread, he would lead a World Bank-UNICEF global monitoring platform that monitored initiatives in social protection across emerging and developing economies in a ‘living’ (periodically updated) paper, documenting a total of 3,856 social protection and labour measures planned or implemented in 223 countries as of January 2022, in the areas of social assistance, social insurance and active labour market programmes (Gentilini et al, 2022).
Conclusion
In the editorial that introduced the OECD’s 2021 Employment Outlook (sub-title: Navigating the COVID-19 Crisis and Recovery) OECD Director for Employment, Labour and Social Affairs Stefano Scarpetta neatly encapsulated the approach described above. Headed ‘Seizing the moment to build a more inclusive labour market’, it estimated job losses due to the pandemic at 22 million in the OECD area, and 114 million worldwide, noted that it had ‘amplified existing inequalities in labour market outcomes, skills and opportunities’, and identified ‘a unique opportunity for bold labour market and social policies to avoid locking in inequality and exclusion as a legacy of the crisis’ (OECD 2021a, p. 4). Its policy prescription made it clear that at least as far as the OECD was concerned, efforts to build an inclusive capitalist world market should be intensified. This is a ‘once-in-a-lifetime opportunity to address the main long-standing structural challenges that have been exacerbated by COVID-19’ (p. 6, emphasis original): governments should therefore promote job creation while providing an effective bridge to recovery for those still affected by the crisis; ‘think big’ and address the right structural issues affecting the labour market; invest in effective skills policies to reduce inequalities and minimise individual risks; invest further in the infrastructure of investment systems to help jobseekers find work effectively; and address long-standing gaps in social protection to foster inclusiveness (ibid, pp. 6-8). ‘A window of opportunity is opening’, it concluded. ‘Let us not waste it’ (ibid, p. 8). In short, by June 2021 the OECD had completed the task of repurposing the epidemic as a means to redouble efforts to drive its agenda forward.
It is the World Bank’s Human Capital Project Year Three Progress Report, issued in November 2021, however, that shows best just how swiftly and thoroughly COVID-19 was repurposed to serve the cause of global competitiveness. The Project itself could not be more transparent, focusing with laser-like precision as it does on the policies required to turn future global human labour entirely to the productive service of capital. The report first summarises the extent of the setback that the pandemic represents:
‘The pandemic has resulted in widespread job losses. Globally, between 2019 and 2020, women’s employment declined by 4.2 percent (a drop of 54 million jobs), while men’s employment declined by 3 percent (60 million jobs). While men’s employment is expected to return to 2019 levels in 2021, there will be 13 million fewer women in employment (ILO, July 2021). The impact on global poverty is also significant, with 97 million additional people having been pushed into poverty in 2020 (World Bank, June 2021). People’s ability to use their human capital productively has been seriously affected, as well as their ability to provide the right nutrition and education for their children’ (World Bank 2021, p. 8).
In what follows, the Bank imagines a renewed social contract (p. 19) intended to maximise the potential of the global population for productive labour and turn it wholly to the service of capital. It does so by calculating two Utilization-Adjusted Human Capital Indices (UHCIs), intended to ‘adjust the HCI for labour-market underutilization of human capital in a consistent way across a large number of countries’. It does this because the five components of the index ‘do not cover all the important aspects of the accumulation and productive use of human capital’: ‘When today’s child becomes a worker in the future, in many countries she may not be able to find a job; even if she can, it might not be a job in which she can fully use her skills and cognitive abilities to increase her productivity. In these cases, her human capital can be considered underutilized’. The Bank is concerned with future adults only as resources exploitable by capital, and it develops two further indices that ‘represent the long-run income gains if an economy moves to the frontier where human capital is complete and completely utilized’. In the first, the basic UHCI, ‘utilization is measured as the fraction of the working-age population that is employed’. But this simple and intuitive measure ‘cannot capture the fact that a large share of employment in developing countries is in jobs for which workers may not be able to fully use their human capital to increase their productivity. The full UHCI adjusts for this shortcoming by introducing the concept of betteremployment, which represents the types of jobs (for non-agricultural employees and employers) that are common in high-productivity economies. The full utilization rate depends on the fraction of an economy’s working-age population in better employment.’ (p. 20).
As is clear, you can trace a direct line back from here to the 2013 World Development Report, Jobs, then to the focus on universal provision of basic nutrition, health and education in World Development Reports from 1978 onwards, and all the way back to Adam Smith’s emphasis in 1776 upon the proportion of the population in work, the development of their skills, and the increase in their productivity through the application of capital to the production process. This being so, Marx’s critique, addressed to Smith and Ricardo among others, still stands:
‘It is not individuals who are set free by free competition, it is, rather, capital that is set free. … It is nothing more than free development on a limited basis – the basis of the rule of capital. This kind of individual freedom is therefore at the same time the most complete suspension of all individual freedom, and the most complete subjugation of individuality under social conditions which assume the form of objective powers, even of overpowering objects – of things independent of the relations among individuals themselves’ (Marx 1973, pp. 650-52).
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