On this new level you live, you have been living more comfortably every day, with new morals, new principles. You have accepted things you would not have accepted five years ago, a year ago, things that your father, even in Germany, could not have imagined.” - Milton Mayer in 'They Thought They Were Free: The Germans 1933-45'
In Liquid Modernity, the late sociologist Zigmunt Bowman said that in the initial stage of industrialisation, capital, management and labour all had to stay in one another's company. Workers depended on being hired for their livelihood; capital depended on hiring them for its growth. The dependence was therefore mutual, and the two sides were bound to stay together for a very long time to come. Both sides recognized that there were limits to how far the other side in the conflict of interests could and should be pushed. Thus there were limits to the inequality which capital could survive.
This was the reason why the state needed to introduce minimum wages or time limits to the working day and week, as well as legal protection for labour unions and other weapons of worker self-defence. It ensured that the system is protected against the suicidal consequences of leaving unchecked the capitalists’ greed in pursuit of a quick profit. Those factors are now absent and a reversal of this trend is unlikely.
This is because now labour and capital are no longer interdependent because of technological advances. The ideas of corporate loyalty and rewarding seniority have disappeared. Risk has become a daily necessity shouldered by the masses. Capital, which means power, can move with the speed of the electronic signal and so it can move its essential ingredients instantaneously. Labour, on the other hand, remains as immobilized as it was in the past. The company is free to move; but the consequences of the move will remain. Whoever is free to run away from the locality, is free to run away from the consequences.
It is the people who cannot move quickly or who cannot leave their place at all, who are ruled. The mobility acquired by ‘people who invest’ has resulted in power being detached from obligations: not only duties towards employees, but also towards the younger and weaker, towards yet unborn generations. This means power has now got freedom from the duty to contribute to daily life and the perpetuation of the community. This freedom implies that capital has to look at only at economic costs; other costs are for the territorially bound to manage.
There are a large number of workers tied to the assembly line or to the computer networks and electronic automated devices like check-out points. Nowadays, they tend to be the most expendable parts of the economic system. Neither particular skills, nor the art of social interaction with clients are required for their jobs - and so they are easiest to replace. Detachment and superficial cooperativeness are better armour for dealing with current realities than behaviour based on values of loyalty and service.
People no longer work at the same company or the same job for long stretches of time. They switch jobs or switch teams or change fields or even become consultants. There’s no predictability, no long-term commitment, no long-term relations with co-workers and bosses, no loyalty, more confusion, etc. “No long term” means keep moving, don’t commit yourself, and don’t sacrifice. In such an environment, there is no need to look beyond immediate personal satisfaction.
The uncertainty created by the new realities of the workplace is a powerful individualising force: it makes people think more about themselves and think less about others. It divides instead of uniting, and since there is no telling who will wake up the next day in what division, the idea of 'common interests' loses all pragmatic value. Once the employment of labour has become short-term and precarious there is little chance for mutual loyalty and commitment to develop.
The mobility of capital has made the modern state powerless. While all the agencies of political life stay within the boundaries of the state, power flows well beyond their reach and thus outside citizens’ control. Capital has acquired enough mobility in most cases to blackmail territory-bound political agencies into submission to its demand. The threat of cutting local ties and moving elsewhere reduces the powers of local agencies to take action.
A government has little choice but to implore and cajole capital to come in by 'creating better conditions for free enterprise', which means, using all the regulating power at the government's disposal for deregulation, of dismantling and scrapping the extant 'enterprise constraining' laws and statutes. This means low taxes, fewer or no rules and above all a 'flexible labour market'. More generally, it means a docile population, unable and unwilling to put up an organised resistance to whatever decision the capital might yet take.
Paradoxically, governments can hope to keep capital in place only by convincing it beyond reasonable doubt that it is free to move away. Governments that don't play ball incur severe costs, generally economic. They may be refused loans or denied reduction of their debts; local currencies would be speculated against and pressed to devalue; local stocks would fall on the global exchanges; the country may face economic sanctions; global investors would withdraw their assets.