IT is commonplace to denounce the Tories for seeking to dismantle the welfare state. But more is going on than that. In order to compete in a newly globalised capitalist world market, the UK is in the process of inventing a new labour market process, based on super-exploitation of ordinary working people (including immigrants). The post-war welfare state is not simply being dismembered in order to save money or reduce the so-called deficit. Rather, it is being re-configured specifically to act as an Orwellian machine for recruiting and disciplining a new, servile labour force, in order to make British capitalism more competitive in the conditions pertaining in the 21st century.

Evidence of Tory callousness towards welfare recipients is, sadly, all too abundant. Last week it was revealed that 2,380 people had died shortly after a work capability assessment ordered by the Department of Work and Pensions (DWP) had deemed them “fit for work”. These figures were only made public after a Freedom of Information request which the DWP contested.

Incredibly, this DWP death list was followed by news that the department plans more cuts in support for those with incapacities. Iain Duncan Smith, the DWP’s gauleiter, brazenly declared that he believes up to one million people still on Employment and Support Allowance (ESA) – two fifths of the total – should be forced to work. In particular he singled out those with mental health issues. However, the majority of ESA claimants with mental or behavioural disorders are deemed even by the DWP to be severely disabled. If IDS has his way, how long before we see more premature deaths? Some might call Mr Duncan Smith callous. Others might call him something worse.

Yet the Tory project for dismembering the welfare state – and remember the “cap” on welfare spending was supported by a majority of Labour MPs – reflects much more than fiscal parsimony or a desire to cut taxes. What we have here is a new model for the functioning of the labour market in “late capitalism”. It is more about managing and disciplining the active labour force, rather than saving pennies.

Post-war western capitalism was based on what came to be christened Fordism. It centred on mass production in big factories, employing large manual workforces. The latter were well unionised and able to extract wage increases because of their direct control over the production process. High working-class earnings fuelled the consumption that kept the merry-go-round turning. But it was not an economic model built to last, especially as the workers used their muscle to demand better social benefits and pensions. The rate of profit duly suffered, upsetting the City.

This led to a new model of western capitalism: neoliberalism, and with it a new kind of de-unionised, two-tier labour market. Automation eliminated the need for those bolshie industrial workers while Reagan/Thatcherism did for the unions. At the same time, the collapse of communism brought China into the world market as a source of cheap labour. That freed the West to make its profits out of banking and services, staffed by a new proletariat of university graduates. Most of the latter were modestly paid but they didn’t notice because a housing bubble, plus oodles of cheap Chinese electronic goods, kept them in bread and circuses. Non-graduates worked in Tesco for minimum wage.

This model too is now bust. Partly it was done for by the Credit Crunch. And partly, as we’ve seen this past few weeks, because China too is in trouble. Which means the western labour market model is looking for a makeover. For starters, computers are rapidly de-skilling professional service jobs, and the system can no longer pretend to give its graduate proletariat an appreciatively higher income than the rest of the work force. Besides, there are too many graduates around.

Thus we have a new labour market model in the UK based on casualiseation of professional jobs and super-exploitation. Since 2008, millions of professionals have been pushed into self-employment in the service trades – but part-time and poorly remunerated. Even this is only possible because of the internet and the fact people own their own homes to work from. Certainly, young graduates in London can still find employment but increasingly they have to work 12-hour days “to show willingness”. In the public sector, most salaries have been frozen for years while in the private sector minimum wage is increasingly the norm.

This is where Tory welfare “reforms” come in. An ideological narrative has to be spun to convince folk this new labour market is both normal and desirable. To persuade people that they should abandon two centuries of cultural progress in reducing the working week. To reject a century of argument in favour of paying decent pensions before workers were too worn out to enjoy them. And to get otherwise rational people to accept that those with mental health problems should be forced into work “for their own good”.

Fortunately in Scotland, where communitarian values have held firmer for longer than down south, the insidious nonsense of Tory “welfare” reform has not made a lot of political headway. But nailing it in the rest of the UK requires that we expose its true ideological purpose.

Unlike Germany or the US, modern Britain does not make much in the way of industrial goods, nor are we great shakes at exporting. To crude Tory thinkers, this implies that generating any capitalist profits domestically can only be achieved via a return to the sort of super-exploitation of workers associated with Victorian times. It comes as no surprise that we should be regressing to a Victorian approach to welfare.

But this is an economic dead-end economically – even for convinced capitalists. Far from being a beacon of modernity, as Cameron and Osborne pretend, the UK is busily replicating a pre-industrial duel economy, with a class of super-rich, rentiers consumers (mostly in London) and a mass of low-paid attendants. Even demography is being rearranged to suit this model, courtesy of the DWP. Over the past five years, inner London has been subject to social cleansing on a vast scale, with 50,000 low-income families being decanted to other boroughs due to benefit caps. Central London is now a vast building site as expensive tower blocks sprout up in previously working-class areas.

The permanent secretary in charge of the DWP is Robert Devereux. Predictably, he’s an Oxford graduate – in mathematics. A career civil servant, he did a stint with Guinness Brewing “for experience”. Listen to Devereux being interviewed about his department, when he said: “The government has chosen to set some challenging targets for the cost of running today’s business [ie, the DWP]. There’s 25 per cent efficiency improvements for the operational business, and a 40 per cent reduction in the cost of the corporate centre.” Devereux is not protecting the sick, ill-housed and unemployed – he is running “an operational business” with a “corporate centre”.

When Parliament reassembles next week, progressive MPs should be aiming to hold Devereux to account for those 2,380 deaths. At the same time, we need to find a different model for the labour market than the nightmare one Devereux and Iain Duncan Smith have wished on us.