What is wrong with the labour market?
Last update: 06 August 2020

This began as a response to an article about people spreading contagion because they couldn't afford to not go to work. I'd hoped that a quick Facebook post would do. The more I looked into it though, the bigger the issue proved to be. That fed in to my experiences as an officer of the Commonwealth Employment Service during the closing decades of the twentieth century. At best, we in the Service managed a more equitable distribution of misery among our clients. I left before privatisation; the market wasn't operating well at that time and privatisation made matters far worse.

The labour market is a disease. It makes people sick. It kills people. And not just during a pandemic. Is the uncertain, underpaid and otherwise inadequate employment typical of the “market” these days really better than serfdom?

It's also Diabolically wasteful. Underemployment has been rising for at least four decades. What could Australia achieve, if we optimise the value of our human resources?

Why a market?

Labour, it seems to me, is unique among Capitalist markets. Labour exists, regardless of demand. An hour of labour costs a certain amount to bring to the workplace, notwithstanding how much an employer thinks they should have to pay. If the cost of production is not met, then the outcome will eventually be lethal. Does labour really fit the market model?

Whence came this obviously dysfunctional creature?


In The Great Transformation, Karl Polanyi traced the development of market economies deep into history. Among other things, Polanyi pointed out that labour is not a natural market commodity.

To someone raised in a near-total market environment like Australia, Polanyi can be hard to understand. His view is of a different world. The following draws heavily from Chapter Fourteen of The Great Transformation.

In societies that we might call primitive, labour (work beyond that needed to maintain the family unit) was a duty to the community. Individuals did what the community needed or wanted. Situations like those hypothesised in the “tragedy of the commons” didn't arise.

The individual supported the community. In return, the community supported the individual. An individual need not fear starvation, unless the community as a whole was in danger of starvation. To quote Polanyi: “It is the absence of the threat of individual starvation which makes primitive society, in a sense, more humane than market economy, and at the same time less economic”.

To separate labour from other activities of life and to subject it to the laws of the market was to annihilate all organic forms of existence and to replace them by a different type of organisation, an atomistic and individualistic one”. In large part, this was achieved by selling the notion “that the noncontractual organisations of kinship, neighbourhood, profession, and creed were to be liquidated since they claimed the allegiance of the individual and thus restrained his freedom”.

The labour market, Polanyi avers, is means to that end. Interestingly, the rise of markets in general has been associated with the advent of the poor. In  “primitive” societies, individual poverty exists, no more than individual starvation. If we want poverty, it seems we need markets. If we want optimum wellbeing, not so much.

For what else might we beneficially think outside of markets?

Site Index

Valid HTML 4.01 Strict

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Feedback: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it.