BULLSHIT JOBS AND THE NEW FEUDALISTS
In what way does the world of finance help bring about bullshit jobs? Well, it partly has to do with the way jobs are categorised in the popular imagination. When we talk about major revolutions in working practice we speak of transitions from hunter-gathering, to farming, to manufacturing, to services. Such terms imply that at every stage people always transition to work that is of obvious benefit to society, involving as it does the creation of products that improve quality of life, or by offering services that meet some pressing need or just make life more pleasant.
What’s wrong with this belief is that it paints the wrong picture of what everyone in ‘services’ does. Contrary to what the term implies, not everyone in ‘services’ is helping their fellow human beings by clipping hedges, serving ice-cream and so on. No, there’s a fourth sector involved in work of a different kind, one economists call FIRE after Finance, Insurance and Real-Estate.
(Wall Street. Image from wikimedia commons)
The kind of thing this sector is involved in is well illustrated by the goings-on that lead up to the 2008 crash. Banks' profits once relied on the quality of the loans they extended. However, quite recently we have seen a switch toward 'securitisation', which in practice involves bundling multiple loans together and selling portions of those bundles to investors as Collateralized Debt Obligations or CDOs. Rather than earning interest as loans are repaid over time, when it comes to securitisation the banks' profit is derived from fees for arranging the loans. As to the risk inherent in lending money, it's the buyer of the CDO who takes on the risk, meaning that, as far as the bank is concerned, defaults are somebody else's problem.
This caused a shift from lending that was quality-driven toward quantity-driven borrowing. Thanks to securitisation, banks could make loans with the knowledge that they could be sold off to someone else, the risk associated with such loans being their problem. What this meant was that banks were freed from the downside of defaults. And if conditions are in place to cause wild exuberance, borrowing is bound to spiral out of control.
Of course, that's precisely what happened in the runup to the 2008 subprime mortgage crisis. In the words of Bernard Lietaer and Jacqui Dunne, "math 'quants' took the giant pools of home loans now sitting on their employers' balance sheets and repackaged them into highly complex, opaque, and difficult-to-value securities that were sold as safe bets. As more and more of these risky securities were purchased by pension funds, insurance firms, and other stewards of the global public's savings, the quants' securitisation machine demanded more loans, which in turn led to a massive expansion of dubious lending to low-income American households".
Advertisements for banks really push the message that they are but humble servants helping customers protect and manage their money. And with talk of ‘markets’ and ‘products’, the financial ‘industry’ likewise presents itself as doing the traditional work of making useful stuff and providing much-needed services. If you believe the propaganda, the primary purpose of this sector is to help direct investments to those parts of commerce and industry that will raise prosperity, while earning an honest profit in the process.
But while this kind of thing does happen, it’s very misleading to portray the financial sector as being mostly concerned with such services. We can see this is so by looking at where the money goes. A piffling 0.8 percent of the £435 billion created by the UK government in quantitative easing (ie money printing) went to the real, productive economy. The rest went to the financial sector.
As David Graeber explained, what this sector actually does is as follows: “the overwhelming bulk of its profits comes from colluding with government to create, and then trade and manipulate, various forms of debt”. In other words, what the FIRE sector mostly does is create money from ‘nothing’. But, the thing is, there actually is no such thing as money from nothing. If somebody is making money out of thin air, somebody somewhere else is being lumbered with the cost. So, really, financialisation is the subordination of value-adding activity to the servicing of debt.
(David Graeber. Image from wikimedia commons)
It is under such conditions, in which work is morphed into a political process of appropriating wealth and the repackaging and redistribution of debt, that the nature of BS jobs (which seems so bizarre from the traditional capitalist point-of-view) actually makes sense. From the perspective of the FIRE sector, the more inefficient and unnecessary chains of command there are, the more adept such organisations become at the art of rent-extraction, of soaking up resources before they get to claimants.
An example of such practices was provided by ‘Elliot’:
“I did a job for a little while working for one of the ‘big four’ accountancy firms. They had been contracted by a bank to provide compensation to customers that had been involved in the PPI scandal. The accountancy firm was paid by the case, and we were paid by the hour. As a result, they purposefully mis-trained and disorganised the staff so that jobs were repeatedly and consistently done wrong. The systems and practices were changed and modified all the time, to ensure no one could get used to the new practice and actually do the work correctly. This meant that cases had to be redone and contracts extended. The senior management had to be aware of this, but it was never explicitly stated. In looser moments, some of the management said things like “we make money from dealing with a leaky pipe-do you fix the pipe, or do you let the pipe keep leaking?’’’.
In order for such organisations to continue doing what they are doing, there has to be employees that work to prevent such dubious practices from becoming widely known. Faithful allies must be rewarded, whistleblowers punished. Those on the rise must show visible signs of success, surrounded by important-looking men who make their ‘superiors’ look special in office environments where one’s status is determined by how many underlings you command. Meanwhile, those flunky roles are themselves a handy means of distributing political favours, and since those in the lower ranks had best be distracted from the dodgy goings on, this incentivises the creation of an elaborate hierarchy of job positions, titles and honours. Let them occupy themselves squabbling over that.
So, ‘Managerial Feudalism’ is so-called because the FIRE sector (which in practice is spreading, which is why car commercials no longer tell you what it costs to buy the vehicle, only what APR representative you can expect if you take out a loan) has brought about conditions that resemble classic medieval feudalism, which was likewise primed to create hierarchies of nobles, flunkies, mystic castes quoting obscure texts, and downtrodden masses.
This is not without consequence. In the early 20th century, economists like Keynes were tracking progress in science, technology and management and predicting that, by the 21st century, our industries would be so productive we could drastically reduce the amount of time devoted to paid employment, investing the time gained in the pursuit of a more well-rounded existence. When you consider that 50 percent of jobs are either definitely bullshit or kind of vague regarding their value to society, you can see how people like Keynes were partly correct. Had we continued to focus on technical efficiency and productive capability we doubtlessly would have access to much more leisure and prosperity. But, instead, business, economics and politics combined in such a way as to create a new kind of feudalism that has imposed itself on top of capitalism.
Recapping what we have learned over this series, the old paternalistic corporate model came under attack during an era of bustups, mergers and acquisitions. The corporate raiders who lead this attack were different from their predecessors in that they identified much more with finance than the workers under their management. This, coupled with a cult of materialist positive thinking, gave rise to an executive class whose salary and bonus structure put them in a ‘noble’ position. It also gave rise to a corporate culture that was hostile to any bad news. This meant that, when the savings that were being made by bringing the axe down on those at the lower end of the corporate hierarchy only ended up being wasted by the hiring of more levels of management, there were few people who dared speak out against this practice. Moreover, keeping one’s mouth shut and hoping you, too, might be in line for a pointless but well-paid white collar job had become the sensible choice for those burdened with the high costs of an over-consumptive lifestyle. And that part of the ‘service’ sector which has little to do with providing services but is more concerned with colluding with government in order to repackage and sell ever-more complex forms of debt had every incentive to run things as inefficiently as possible, since those are the conditions in which rent-extraction can cream off more of other people’s money.
Such conditions encourage the existence of jobs that are more to do with appropriating rather than creating wealth, and with disguising the fact that this is happening. When your status is defined by how many underlings you have, this can encourage an increase in the levels of management. If other big businesses employ somebody to sit at a desk, your company must do likewise. Not because the person has anything useful to do, necessarily, but simply because it’s ‘what is done’. When you make your money from a ‘leaky pipe’ (ie some deficiency in the system) this can encourage ‘duct-taping’ jobs that merely manage the problem rather than deal with it. This is like employing somebody to replace the bucket rather than fix the leaking roof. Of course, in that overly-simplistic example the ruse would be easily spotted. But in the deliberately complex world of the FIRE sector there is more chance of doing things incompetently and getting away with it, because few can penetrate the jargon and management-speak and see the bullshit hiding behind it.
What this all means is that the ‘technological unemployment’ gap that Keynes predicted has been filled with jobs that, quite frankly, don’t need to exist. If you can’t imagine how that can happen under capitalism, well, your mistake is in assuming our current system is something that people like Adam Smith or Milton Friedman would recognise as ‘capitalist’. Bullshit jobs really shouldn’t exist in the kind of free market that people like Stefan Molyneux promote, but they can and do exist in the whatever market system dominates today.
REFERENCES
“White Collar Sweatshop” by Jill Andresky Frazier
“Bullshit Jobs: A Theory” by David Graeber
“Smile Or Die” By Barbara Ehrenreich