The Class Struggle and Welfare: Social Policy under Capitalism
David Matthews, Monthly Review Press, £23.99

A FULL Marx feature in this paper examined the “social wage” — the collective provision of public goods and services ranging from education and healthcare through public libraries, parks and playing fields, public toilets, roads and pavements, to state regulation of food standards and environmental quality.  

All are funded in the last resort, through the value created by labour — via income taxes, VAT on the goods you buy, local rates and (yes, even) taxes on profits. Most hardly existed in Marx’s day, except perhaps through charitably funded schools and hospitals — and workhouses.  

David Matthews takes the analysis forward and focuses on welfare and specifically on the British “welfare state” that emerged following WWII and which from 1979 has been increasingly under attack. Most readers will have some knowledge of issues in at least one of these chapters, but their assembly in one text, contextualised within a Marxist framework, is hugely valuable.

He begins with a short primer on Marxist political economy, in particular regarding the state. The state under capitalism, he declares, is “ultimately a capitalist state, having the primary purpose of enforcing and protecting the conditions of accumulation, including labour’s reproduction” with welfare as “the dominant form of institutional provision outside of the informal care provided by the family.”

At the same time the state is itself “a location for the class struggle, having the conflict between capital and labour stamped upon it, resulting in it embodying contradictory values.”

Welfare institutions are ultimately “instruments to advance the interests of both capital and labour” and “a Marxist understanding of social policy is to be aware of its duality,” including state welfare as social control, enhancing national efficiency and labour productivity.  

Welfare provision itself has been advocated “solely to mitigate and alleviate the existing conditions of labour under capitalism and not capitalism’s abolition.” Conservative MP Quintin Hogg (later Lord Hailsham) declared in a debate prior to the implementation of the welfare state: “If you do not give the people social reform they are going to give you social revolution.” 

With chapters on social security, disability, health, housing and education, Matthews shows how welfare provision within capitalism is ultimately a product of class struggle — a dialectical phenomenon, the outcome of popular campaigns, tolerated and moulded by the state to suit the interests of capital.  

Today, as illustrated by the introduction of universal credit (UC) and the employment support allowance (ESA), social security functions not as a “safety net” but as an instrument of social control — physical and ideological. 

His analysis starts with social security, declaring that “the reproduction of labour power is a pre-eminent function of the welfare state” together with “maintaining the labour power of future members of the labour force”; its second core function is “the maintenance of non-labouring groups […] such as children, the elderly, individuals with disabilities, the long-term sick, those with caring responsibilities, and the unemployed who are not part of the labour market.”   

Matthews argues that capitalism’s devaluation of the “normative body” and the social exclusion of many disabled individuals “is firmly grounded within capitalism’s rejection of them as a source of economic value.”

On health, Matthews returns to Marx and Engels who argued that the root cause of poor health was capitalist production. Marx wrote of the “victims of industry, whose number increases with the increase of dangerous machinery, of mines, chemical works etc, the mutilated, the sickly.” Today we can add personal and financial services — from call centres to healthcare.

Yet within capitalism healthcare is itself ideology, reducing health overwhelmingly to an individual, biological problem. This fits well with its increasing marketisation, couched in the language of “consumer choice,” providing opportunities for the private sector to be represented, and exposing the English NHS “to an unprecedented threat of privatisation.” 

By contrast, in Wales “the overall organisation and planning of healthcare remains the direct duty of the Welsh government, which delegates responsibility to regional state organisations in the form of local health boards (LHBs)” and “there is very little market-driven distinction between purchaser and provider.”

Next, “along with the NHS, council housing was one of the most radical elements of the British welfare system.”  

Housing today is much less a focus of welfare provision. In 1872, commenting on the attempt by some sectors of capital to facilitate home ownership by sections of the working class, Engels suggested that their motivation was that “by an alteration of their proletarian status such as would be brought about by the acquisition of house property, workers would also lose their proletarian character and become once again obedient toadies.”  

That — plus the opportunities for private profit it presented — was certainly the objective of Margaret Thatcher’s “right to buy” policy from the 1980s. Supposedly to advance the concept of a “property-owning democracy” it led to the collapse of investment in new social housing and a new “generation rent” with over 40 per cent of right-to-buy homes now privately rented, many from landlords with multiple properties. 

Quoting Engels, Matthews also argues that education involves the reproduction of labour power; in any society, it is itself a form of commodity production. But under capitalism, it also involves the reproduction of the relations (as well as the forces) of production, both via technical and intellectual skills, and through its ideological function with children as “a captive audience from their formative years.”

At the same time, there is a degree of autonomy in the educational system which allows for the development of politically conscious education professionals and also produces “misfits and rebels.”

Education itself is also a “terrain of class struggle.” Ultimately, however, “capital is always at an advantage, able to define the nature and character of educational reforms and the nature of the educational system.”

Illustrated by the reversal of early hopes for a truly inclusive comprehensive education system it was undermined by the 1981 assisted places scheme providing a state subsidy for academically able children from poorer families to enter a private school, and in 2000 by centrally government-funded academies, removed from local authority control, managed by boards of directors (by whom their teachers are directly employed) and competing with comprehensive schools. The increased emphasis in both sectors is on “work readiness.”

One crucial question is, of course, action. Welfare provision — “a genuine productive gain for labour” — has been steadily eroded in recent decades, under both Labour and Tory administrations. Its defence has largely involved rearguard action, led by the workers and users most directly affected. 

Rather than focusing on how such defensive action can be advanced, Matthews ends with a vision of what collective action might be aimed at securing. His final chapter argues that “a socialist system of welfare, under the authority of the working-class, will have to look beyond the state.”

Rather than reflecting only the needs of capital, welfare provision contains institutions and practices that are already in opposition to capitalism “representing foundations upon which a more equal and democratic economic and social life can be organised.” Alongside state provision “mutual aid” will be important and can feed into the movement, not only to protect and extend what exists, but fight for something better, including “an alternative society to capitalism, one which has at its heart equality, democracy, solidarity and love.”

Matthews’ analysis has been given yet greater urgency with Labour’s determination to cut the welfare budget to fund preparations for war. This is a hugely valuable text for those seeking theoretical analysis and practical action to defend public services.