Little joy in being your own boss

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A rise in the numbers of self-employed people in Britain raises interesting questions for Marxists about the changing nature of the working class.

Self-employment in Britain is at its highest level in four decades, comprising one in six people in the workforce. About half of the employment expansion since the recession can be explained by its growth.

Has there been an explosion of entrepreneurialism, perhaps made up of the kind of hi-tech start-ups that cluster around “silicon roundabout” in east London? Or are people simply being pushed into more precarious forms of work by employers keen to reduce tax bills, and avoid offering sick pay and other benefits?

These were among the issues addressed by an excellent symposium, sponsored by The Sociological Review, on “Everyday Self-Employment”.

While listening to the talks there, it struck me that the whole notion of self-employment is a poor starting point. It is a legal category, revealing little about the underlying class relations and allowing wildly different groups of people to be lumped together.

More useful is the category of the petty bourgeoisie, a concept with a precise meaning within Marxist theory.

Capitalist societies are polarised between workers and capitalists. Capitalists control the means of production, while workers must turn to capitalists to find employment. In this employment relationship the capitalist exploits the worker, pumping profits out of them.

However, there are also intermediate groupings and the petty bourgeoisie is one of these. It consists of people who might control a small amount of capital but who do not make most of their profits from exploiting employees. Traditional examples include the small farmer who produces with their own labour and that of their family or the small shopkeeper.

Karl Marx argued that as capitalism came to dominate society the petty bourgeoisie would act as if each were “cut up into two persons”. “The self-employing worker is his own wage labourer; his own means of production appear to him in his own mind as capital. As his own capitalist he puts himself to work as wage-labourer,” he wrote. Competition forces them to self-exploit in order to generate a profit.

The petty bourgeoisie is highly diverse because the two roles — capitalist and worker — are combined in different proportions. At the top, they start to blend into the capitalist class proper as they expand their capital and hire wage labour.

At the bottom, they do not control capital in any meaningful sense and can barely reproduce their businesses. These lower layers can sometimes identify with workers being pulled behind their struggles.

One fast-growing group in self-employment has been “managers, directors and senior officials”, along with various professional groups. Some of these might genuinely be well-to-do consultants or small business owners.

However, there are other groups that should be treated either as the lower echelon of the petty bourgeoisie or simply as workers disguised behind a spurious legal definition.

At the symposium I attended there was an interesting paper on the stripping industry, in which women who are formally private contractors pay a club in order to work, and are subject to exploitation and managerial discipline. Another speaker explained how in the construction industry, which still accounts for the largest chunk of self-employment, there is rampant “bogus self-employment”.

But it is outside the traditional areas such as construction that self-employment has grown recently. There has been a noticeable rise in self-employed women in occupations such as cleaning, childminding and hairdressing. The figures for older self-employed people have also swelled — the number over 65 has grown from 241,000 in 2009 to 428,000 in 2014.

Self-employment is no paradise for such groups. On average the self-employed work two hours a week longer than regular employees. The income data is notoriously unreliable but one survey showed median income for the self-employed falling 22 percent in the four years after the recession.

The expansion in self-employment is not because more people are entering this group — that has barely changed — but because people are far less likely to leave. Many older people do not feel confident they can afford to retire. The British economy also seems to be struggling to create enough decent jobs to drag people out of self-employment since the recession because of miserable levels of investment.

However, it is wrong to see this as a sweeping transformation of the workforce. A far bigger growth took place from 1980 to 1990, when the portion of the labour force in self-employment rose from about 8 percent to 13 percent. It has only risen 2 percent in the 15 years since.

While capitalists will do whatever they can to raise their profits, replacing employed with self-employed workers does not always work. Many prefer to secure a group of relatively reliable, trained and skilled workers to exploit, seeing this as more beneficial than the flexibility acquired through self-employment.

There are, though, issues socialists should take up. When courier City Link went into administration last Christmas, along with 2,000 or so regular staff who lost their jobs, there were about 1,000 self-employed drivers and contractors who did not even qualify for redundancy payments.

Scandals such as these deserve to be challenged by the entire labour movement.