How did the attempt to abolish poverty become a war against the poor?

ON LINE opinion – Australia’s e-journal of social and political debate

Posted Tuesday, 11 June 2013

also published in New Community Quarterly, Issue 41, 2013

In this article I shall try to answer the question implicit in the title. In order to do this adequately I shall cast a fairly wide net attempting to explain how various features of Western society are a part of the answer. In the final section of the article I shall suggest a method by way of which, if adopted, we could build a more socially just and economically productive Australia.

The worldwide economic depression subjected about a third of the people of the developed world to an impoverished existence for most of the decade prior to the outbreak of World War II. After the second world war a serious attempt was made in Britain and Australia to expand the welfare state significantly. In 1964, the United States President Lyndon Johnston declared a “war on poverty”. In Australia, in 1972, following the election of the first Labor government in 23 years, the Poverty Inquiry was substantially expanded. By the mid-1970s, it appeared reasonably likely that a guaranteed minimum income would be introduced because the Whitlam Labor Government had increased the scope and generosity of the social security system. Eligibility for social security had changed in emphasis from forcing people to establish an entitlement for a payment to trying to ensure that everyone experiencing financial hardship received their full entitlement. In Canada and the United States governments attempted to introduce generalised income guarantees for the less well off in the 1960s and 70s.

Since the mid-1980s welfare has been cut back in Europe, North America and in Australia and New Zealand. Throughout the 1980s and 90s many critics of US welfare policies attempted to force cutbacks, they particularly targeted monies paid to lone mothers. In 1996, an ideological shift reducing federal aid to impoverished people over the previous decade, culminated in the Personal Responsibility and Work Opportunity Act, which, as claimed by President Bill Clinton, “end[ed] welfare as we know it.”(Wikipedia [b] 2013). The European social insurance provisions came under attack long before the recent global recession sometimes referred to as the Global Financial Crisis.

In the late1980s Friends of the ABC held a meeting to discuss funding cutbacks in the Australian Broadcasting Commission in Canberra. I became the most unpopular bloke in the room when I suggested that ABC journalists had brought the problem on themselves by substantially increasing the time that was devoted to economics, especially the widespread use of the term “rational economics” when referring to neoliberal economic policies, the concentration put into trade weighted indices, the stock market, commodity prices, the value of the Australian dollar and the value of products whilst increasingly neglecting social values.

George Monbiot writing in The Guardian on the 14th January 2013 noted that

“In 2012, the world’s 100 richest people became $241billion richer. They are now worth…just a little less than the entire output of the United Kingdom.” He suggested that the policies leading to this result included reductions in the tax rates paid by high income earners, failing to pursue tax payments from the rich, “government’s refusal to recoup a decent share of revenues from minerals and the land; the privatisation of public assets and the creation of a toll-booth economy,…and the destruction of collective bargaining.”

“The Economic Policy Institute, a think-tank, calculates that chief executives at America’s 350 biggest companies were paid 231 times as much as the average private-sector worker in 2011” (JS.2012). This same think tank calculated that in the year 2000 these executives or their equivalents had been paid in the order of 400 times average private-sector workers: whereas in 1975 this ratio was only 20 times the average workers salary. At Walmart the ratio between the pay of the CEO and the median workers pay is over 1,000 to one. “The average total remuneration of a chief executive of a top 50 company listed on the Australian Securities Exchange in 2010 is $6.4 million – or almost 100 times that of the average worker” and it needs to be remembered that two-thirds of Australian workers receive less than the average wage. The CEOs of Sweden’s 50 largest companies earn on average 40 times more than an industrial worker, a finding that a union organisation head believes is ‘totally unacceptable’ and requires a ‘popular uprising’ to remedy”.

In September 2001, following what the Americans are wont to call “9/11” the United States launched the War on Terror. Millions of people in Iraq, Afghanistan, Pakistan, Yemen and elsewhere in Africa and Asia have lost their lives in, or fleeing from, this never-ending killing spree. The CIA disappeared and tortured thousands in a worldwide program of rendition and secret prisons. There are still 166 prisoners being held in legal limbo at Guantanamo and as I write 100 of them are on a hunger strike. There are daily drone strikes in Afghanistan, Pakistan or Yemen. These are targeted assassinations of what are meant to be “Islamist rebel leaders” but swept up in what the US militarists are apt to call “collateral damage” are women, children and wedding parties. The role of the military arm of the US government going round the world meeting lots of nice people then subjecting them to rendition, torture, or death, dehumanises those Western citizens who don’t vocally oppose such illegal actions. The “War on Terror” inexorably changed from the pursuit of Al Queida to a war of terror against much of the Middle East and beyond. George W. Bush’s simplistic dichotomy “You are either with us or against us” led many US allies (such as Australia) to adopt grotesque Kafkaesque terrorism laws. Such processes turn thinking adults into silent witnesses of State violence in fear of becoming enveloped in the witch-hunt that follows the expression of dissent.

The war on drugs began in the United States in 1914 with the Federal government outlawing heroin. Throughout most of the first half of the 20th century US governments thought that drug addiction could be cured by treatment but in 1951 legislation was passed providing for minimum mandatory sentences for possession of some drugs. This approach was eagerly adopted by the Eisenhower administration in 1952. “The addition of the Drug Enforcement Administration (DEA) to the federal law enforcement apparatus in 1973 was a significant step in the direction of a criminal justice approach to drug enforcement” (Head 2013). Since that time the US has invaded Panama and other Central and South American countries, arming Contras and other paramilitary groups to fight leftists and “drug runners”. It has filled its own prisons with people convicted of various “crimes” involving drugs. In doing so it has condemned many of its own citizens to a custodial system that blights their lives. When countries like Australia want to adopt harm minimisation polices such as heroin trials, drug injecting rooms or clean needle exchanges the US comes calling. This increases the difficulties of developing sensible humane drug policies and consequently alienates another generation of young people and older people with addictions to “illegal” drugs.

Monbiot, in the article referred to earlier, notes that the 2012 “annual report by the UN Conference on Trade and Development should have been the obituary for the neoliberal model developed by Hayek and Friedman and their disciples”. Monbiot asserts that this report “shows unequivocally that their policies have created the opposite outcomes to those they predicted. As neoliberal policies (cutting taxes for the rich, privatising state assets, deregulating labour, reducing social security) began to bite from the 1980s onwards, growth rates started to fall and unemployment to rise”.

Often associated with granting mining leases to rich people or giving them access, at less than replacement cost, to vast tracts of forest to wood chip is the necessity to criminalise environmentalists. This is just part of resource expansion which the State foists on the citizenry in the name of productivity and development. Little wonder ordinary people feel alienated from such acquisition of wealth by the few. The carbon price debate is just one small part played out in the multinational globalisation of resources. The climate change deniers are walking in the footsteps of Mussolini’s Black Shirts.

Once the State can cut off a section of the working class or the unemployed from the main working class movement it can set out to expand its wedging and politics of envy. Howard started with the young unemployed but it wasn’t long before all unemployed were metamorphosed into “dole bludgers” and “job snobs”. Asylum seekers became grist to the mill. Then Disability Pensioners soon found out they were a bunch of “malingerers” whose numbers had to be cut by a third. Then came the turn of single parents and their children. Subsequent Labor governments have followed suit.

The last throw of the dice for the outgoing Howard Government was to impose the Intervention on 73 Aboriginal communities in the Northern Territory ostensibly to safeguard Aboriginal children from sexual abuse or neglect and to protect women from being assaulted. The police and the army were sent into remote Aboriginal communities. The Government suspended the Racial Discrimination Act in order to quarantine half the social security payment made to Indigenous people. The amount quarantined was placed on a ‘Basics’ card that could only be used for approved purposes at certain stores and alcohol was banned from many communities.

Labor came to power in 2007 promising to continue the Intervention for a year before reviewing it. A committee was set up, headed by Aboriginal leader, Peter Yu, that recommended winding back most of the compulsory aspects of the Intervention except where it could be proven that Indigenous people were incapable of handling money. Labor ignored the report. It has moved towards providing incentives for the use of a Basics card whilst allowing people to “request” they not be required to have a Basics card. At the same time this government has expanded the areas of the Northern Territory and elsewhere in Australia where Aboriginal and other ethnic groups are cajoled into a paternalistic administration of their social security. It has reinstated the Racial Discrimination Act and so cannot specify any particular ethnic group that is forced to participate. What it does instead is select geographical areas where particular ethnic groups predominate and legislate to force all residents of those areas to participate in its paternalistic form of social security.

The process of marginalising various sections of society which can in turn be denigrated – the unemployed called dole bludgers, disability pensioners become malingerers, single parents become welfare mums who brought their problems on themselves, the original owners of this land are converted into drunks and paedophiles, asylum seekers are called illegals and queue jumpers – has now turned round to bite the very people who engaged in maligning the disadvantaged. Commentators around the country are calling on the government to end “middle class welfare”. The values which neoliberal economics promote inspire envy and hatred of out-groups and undermine solidarity.

Monbiot points out “the recent jump in unemployment in most developed countries – worse than in any previous recession of the past three decades – was preceded by the lowest level of wages as a share of GDP since the second world war.” The promise of neoliberal economics – that if governments would get out of the way and leave everything to the market then the rising tide would lift all boats and everyone would be better off – has failed to come true.

Following the second world war Britain moved away from a categorical means-tested benefit system by adding a social insurance system and later a tax credit system. The US largely maintained its welfare charity model to which were added private insurance and eventually a tax credit system. Australia introduced some universal payments such as child endowment but largely stuck to increasing the scope and generosity of its system of categorical benefits and pensions. In 1992 it introduced a privatised superannuation system.

Tax credits, social insurance and privatised superannuation are all tied to participation in the labour market or other financial contributions. They are of no help to people who cannot enter the labour market. When the values which emerged in the wake of the second world had inspired a desire to provide a liveable income for everyone were eroded by the corrosive values of neoliberal economics – solidarity evaporated and the poor were left to the ravages of the rich.

It is time to turn back, back from greed and downward envy, back from abusing asylum seekers, social security recipients and Indigenous people. We need to retreat from excessive inequality and turn our backs on indifference to the plight of others. It is time to note the social security advances in Brazil, Bolivia and Venezuela where they are moving to ensure all citizens have access to a liveable income – the slogan that drives this campaign is “For all – the poor first”. The reason for doing this is that more equal societies are happier, less fearful and healthier societies. Monbiot notes “The greater inequality becomes…the less stable the economy and the lower the rate of growth”. This is a good economic reason for advancing equality as well as being the decent thing to do.

The best way of moving in the direction of a more egalitarian society is to discard the charity-style categorical means-tested welfare system and embrace a citizenship entitlement system for all permanent residents. Such a universal Basic Income would be paid to every individual permanent resident irrespective of their wealth, marital status or other social feature. To pay for such a scheme income tax would be paid on all other income the person earned or acquired from the first to last dollar gained. There would no longer be a political need to subsidise less productive industries, in order to keep people in work, thereby unleashing a huge creative and productive potential.


ACTU (2013) “Executive Pay Watch.”
BIEN (2013) Basic Income Earth Network
CEO (2013) CEO pay in Perspective.
Head, T. (2013) “History on the War on Drugs.” [Civil Liberties].
JS. (2012) “The ratio of CEO to worker compensation: Are they worth it.” The Economist 8th May
Monbiot, G. (2013) “If you think we’re done with neoliberalism, think again.” The Guardian, 14th January. This article in a fully referenced version entitled “Bang Goes the Theory.”
Ramirez, l.(2013) “Guantanamo Prison Hunger Strike Grows.” Voice of America 8th May.
The Local (2011) “Swedish CEO salary ‘unacceptable’: union.” 7th February.
Tomlinson, J. (1999) “The Politics of envy.” Union Song site
Tomlinson, J. (2007) “We are having a ‘save the Aboriginal children’ blitzkrieg.” ON LINE opinion
UNCTAD (2012) Trade and Development Report: Policies for Inclusive and Balanced Growth.
Wikipedia [a] (2013)
Wikipedia [b] (2013)