ON LINE opinion – Australia’s e-journal of social and political debate
Posted Friday, 23 March 2012
In 1875, in his Critique of the Gotha Program Karl Marx suggested that in a higher state of communism a guiding principle of the system of allocation should be “From each according to ability, to each according to need.” Throughout the period of the 1950s to the late 1980s Commonwealth government ministers responsible for social services asserted that their government “assisted everyone in need”.
Provided one did not look too closely at the legislation and the administration of federal income maintenance then it did appear that most people experiencing financial hardship could obtain assistance of one kind or another.
It had taken until the 1940s for people of Asian descent to be provided with social services – until the 1960s before city-dwelling Aborigines and the 1970s for their relatives living in rural and remote regions to be included. From 1911 until 1973, when Bill Hayden abolished the ruling, people could be refused social services on the basis that they were “not deemed worthy to receive the payment”. By the mid 1960s the bulk of people denied payment in such circumstances had a chronic alcohol problem.
From 1947 until the mid 1980s there existed a Special Benefit paid to people in necessitous circumstances who, for reasons such as not meeting residence requirements, could not be paid another benefit or pension. This Special Benefit operated much like the French Minimum Insertion Benefit in that it inserted an income floor below which people would not fall.
In Australia, there was not the determination to ensure that no one missed out and as a result only “the worthy” were granted the Special Benefit. People applying for unemployment benefit who could not establish they had previously been in employment, or who were unable to prove they were fit, able, ready and willing to work were not considered for Special Benefit. Nor were those who, on applying for an Invalid Pension, failed to convince the Commonwealth Medical Officer that they were 85% incapacitated. Social service officers used their largely unmonitored discretion to decide whom to help and whom to refuse assistance. Such a situation has all the moral hazards of giving the police the power to intervene when they “have reasonable suspicion that a crime is about to occur.”
The contradiction here was that whilst the Special Benefit could, under the legislation and the regulations, be paid to everyone in straightened financial circumstances – it was not. There were people who by any measure were in financial need who were not assisted. Then as now, the Australian government does not assist everyone in financial need.
Some recent international events bring home to us that the shame of the poor house did not dissipate at the beginning of the 20th century. On the 22nd February 2012 Tokyo police discovered 3 bodies – a mother, a father (in their 60s) and their 30-year-old son. They had died 2 months earlier of starvation preferring that to asking for help. (“Family choose to die rather than ask for help.” The Dominion Post, page B3). On that same day this paper’s page 1 lead story covered the finding of a Wellington City Council tenant’s body in his flat. He was believed to have died 8 months previously.
The stigma of asking for assistance is what governments around the world rely upon to deter people from applying for financial assistance. Generating such stigma can’t be left to happenchance; governments work hard to ensure the fear of stigma does not fade. The Dominion Post of the 28th February 2012 began its page 1 lead story with the sentence “Sweeping changes implementing National’s promise to crackdown on DPB (single) mothers and jobless teens are underway- and the government warns that sickness and invalid beneficiaries are next in its sights.”
Many of the changes which the conservative Nationals in Aotearoa are inflicting upon their low income earners and beneficiaries have already been implemented by Coalition or Labor administrations in Australia. The antecedents of such “welfare tightening” can be directly traced back to Tony Blair’s Third Way manoeuvres, Bill Clinton’s 1996 cuts to Aid to Dependent Children, to Margaret Thatcher and Ronald Regan and all of them inspired in one way or another by the anti- Keynesian economics of Frederick Hayek and Milton Friedman.
I remember in the early 1980s one of my colleagues, Alec Pemberton, urging me to join with him in writing a critique of the dark forces of reaction he saw emerging which he felt would tear down much of the social security system that had evolved and become more generous throughout the 20th century. I thought at the time that the small setbacks I was observing in income support provision were a minor hiccup. How wrong I was.
Professor Guy Standing’s 2011 book The Precariat: The New Dangerous Class goes a long way to explaining the situation in which Australians and the rest of the world are finding themselves.
In Chapter 2, Standing asserts that since 1975 neo-liberal economic disciples have sought to establish a “global market economy based on competitiveness and individualism.” In Australia, we mistakenly called such neo- liberal ideas “economic rationalism” when they were hardly appealing economics nor particularly rational for the majority of people. Standing notes that in much of the developed world we thought economic growth would make us richer but in order to achieve this outcome we would have to lower taxes and downsize unions and other collectives in order to stop them impeding the neo-liberal agenda. This meant there was less revenue to maintain universal social services and social solidarity was eroded.
Neo-liberals railed against what they alternatively termed “cradle to the grave welfare” or the “nanny state”, berated the unemployed for failing to find work claiming that they, those with disabilities and single parents were an unnecessary drain on society. In what Standing calls one of the “great ‘con tricks’ of economic history” these same neo-liberals promoted tax credits, tax reliefs and tax holidays for the wealthy and the super wealthy. Standing notes, as a case in point, the inequitable tax rightoffs on superannuation available to the well-to-do but out of the reach of average workers.
For a few years the majority in the West enjoyed increased wealth or at least access to easier credit and the opportunity to buy cheaper household goods from the sweatshops of Asia. Those who were not carried along on the rising tide that was supposed to lift all boats had few if any friends in high places – they were expendable. In Eric Bogle’s words:
We held our wallets to our chest
and said that “I’m all right Jack
and to hell with all the rest.
Then came the global recession, with it the sub-prime housing crisis in the United States and not dissimilar housing affordability issues in much of Europe. Suddenly the Greek, Irish, Portuguese, Spanish and Italian governments appear as if they may go the way of Iceland. There is a crisis in world banking. There is massive unemployment throughout the OECD that once might have been lessened by counter cyclical spending. The unemployed who might have in the past relied upon universal social insurance to tide them over find the coffers are bare.
Guy Standing looks in his last two chapters at alternative scenarios. If governments continue to allow further erosion of social support systems he envisages wages in the developed world converging towards those paid in China and India. He predicts that the precariat will continue to move away from social democratic parties and shift support to neo-fascist anti-immigrant parties. One has only to look at the way those who arrive by boat seeking asylum are treated here and in Italy to see how real such possibilities are.
In his final chapter, Standing examines a much happier option. He argues that people shouldn’t be forced to undertake employment noting William Morris’ 1885 comment that “It has become an article of the creed of modern morality that all labour is good in itself – a convenient belief to those who live on the labour of others”. He then makes the point that:
It is not idleness which damages society. Really idle people may damage themselves, if they dissipate their lives. But it costs society much more to police and punish the tiny minority than would be gained by forcing them to do some low-productivity job.
Later in the chapter Standing writes “If jobs are so wonderful, people should be drawn to them, not driven into them.”
He lays out the case for the creation of a universal Basic Income arguing that for most rich countries introducing a Basic Income would be relatively simple. It would involve consolidating existing income maintenance schemes and “replacing others that are riddled with complexity and arbitrary and discretionary conditionality.” Such a Basic Income would be paid to every individual legal resident without conditions.
Such a Basic Income would provide the foundation on which to phase out all other subsidies to labor and capital. It would abolish workfare and all other conditionalities imposed on those seeking social assistance. This universal income support would help citizens recover lost social solidarity and help give voice and agency to the precariat.
On the way we might rescue the educational system – turning it away from a training regime designed to make students into commodified alienated individualistic competitors for the global market place – guiding it towards again becoming an institution devoted to scholarship and the promotion of republican freedom.
Copyright © 2022 John Tomlinson