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Thursday, 7 August 2025

Rethinking Redistribution (3/3): Internal Contradictions

 Introduction

The lumpenproletariat, once derided by Marx as the “dangerous classes”—a social residue of vagabonds, criminals, and the chronically unemployed—has undergone a profound transformation in the historical development of British capitalism. In the wake of two world wars, the decline of industrial capitalism, and the liberalisation of previously criminalised economies, this group has not disappeared but rather evolved.

This AI-generated essay argues that elements of the historical lumpenproletariat in cities like London and Manchester have become a wealth-owning capitalist subclass in their own right. Through sectors such as the drug trade, sex work, private security, and cultural production, they have entered the circuits of capital accumulation. Drawing on Marxist theory and Mao’s notion of internal contradiction, this essay explores how the informal economy both reproduces and destabilises capitalist structures, offering a unique site for analysis of class mutation, cultural commodification, and intra-capitalist struggle.

 

From Lumpenproletariat to Capitalist Subclass

Marx viewed the lumpenproletariat as politically unreliable and economically parasitic, excluded from the productive relations of capital. However, in the context of post-war Britain, especially in deindustrialised urban centres, this class has undergone a mutation. Through engagement in illicit markets, informal labour, and entrepreneurial subcultures, descendants of the lumpenproletariat now control forms of capital and influence that rival the traditional bourgeoisie.

This shift is visible in the rise of street entrepreneurs, organised crime syndicates turned investors, and working-class celebrities who monetise their authentic origins. These figures often leverage symbolic and cultural capital into economic assets, participating in an emergent economy that thrives on identity, risk, and informalisation. While they may still be stigmatised by law or morality, they are no longer excluded from capitalist accumulation—in fact, they exemplify its outermost edges.

 

Cultural Commodification and Identity Capital

Popular culture has played a central role in romanticising and commodifying the image of the ex-lumpen subject. Figures from sports, music, fashion, and film have turned working-class or criminalised identities into profitable brands. This identity capital—presented as “authentic” or “streetwise”—is commodified for mass consumption. While offering avenues of mobility, this process reinforces neoliberal logics of individual success and depoliticises the structural conditions that shape class trajectories.

From the aesthetic of the “roadman” to the mythos of the gangster-turned-entrepreneur, mainstream culture reimagines the lumpen figure not as an outsider but as a savvy capitalist in waiting. This transformation aligns with the commodification of rebellion—what was once politically subversive becomes economically profitable. Brands, record labels, and entertainment platforms reap profits from stylised portrayals of resistance, stripping them of any systemic critique.

 

The Informal Economy as a Capital-Attracting Force

The liberalisation and commercialisation of sectors once considered marginal—recreational substances, sex work, and private security—has created an alternative economy that attracts capital at scale. These sectors offer high returns with low formal oversight, appealing to investors both within and beyond the state. Informal capital now competes with traditional forms of investment, threatening aristocratic holdings and legacy capital.

The emergence of wealth-generating activities in the informal sector presents a unique case of class mobility not tied to traditional wage labour or bourgeois family inheritance. A generation of informal entrepreneurs, often rooted in communities historically excluded from capital, have begun to build transgenerational wealth through alternative pathways. Their activities are often networked, decentralised, and global in scope, reflecting the transnational nature of contemporary capitalism.

This should not be seen as a subversion of capitalism per se. Rather, it illustrates capital’s adaptive logic: its ability to absorb and monetise what was once outside its boundaries. Yet, in doing so, it reveals the fragility of the old order—where once only the aristocracy could own, now the peripheries threaten to outmaneuver the centre.

 

Mao and the Internal Contradiction of Capitalism

Mao Zedong’s theory of internal contradiction provides a powerful lens for understanding this shift. According to Mao, the most fundamental movement of any system is driven by contradictions within it. The UK informal economy—formerly external to capitalist production—now constitutes an internal contradiction. It erodes and competes with established capitalist interests from within, not through revolutionary overthrow, but through economic parasitism and innovation.

The contradiction is dialectical in nature. Capital once excluded the lumpenproletariat as useless or dangerous; now, through systemic crises, deregulation, and neoliberal ideology, it has invited them in—albeit conditionally. This mutation has birthed a new intra-capitalist antagonism: between formal legacy capital (aristocratic landowners, financial elites, legacy corporations) and informal emergent capital (ex-lumpen entrepreneurs, cultural producers, illicit traders).

This contradiction creates instability within the system. Informal capital is often less predictable, less disciplined, and more volatile. It challenges the centralised power of traditional institutions and introduces new networks of influence. Yet, it also reproduces capitalist exploitation, often in harsher and more precarious forms—where workers are unprotected, surveillance is decentralised, and the law serves market flexibility.

 

Conclusion: Mutation, Not Liberation

This transformation should not be mistaken for liberation. The rise of a wealth-owning ex-lumpen class is not inherently progressive. While it exposes the instability and flexibility of class under late capitalism, it also risks reinforcing capitalist ideologies of competition, hierarchy, and accumulation. What was once marginal and potentially radical is now incorporated and often reactionary.

However, recognising this internal contradiction offers new insights into the fragility and adaptability of the capitalist system—and the potential, still latent, for politicised class reformation. The informal economy today is not a shadow of capitalism but a dialectical force within it. It represents both an expression of capitalist decay and a space in which new contradictions are forged—contradictions that may one day produce a genuinely transformative politics.

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