Alternatives to market approaches

Looking for alternatives to neo-liberalism

by Gavin Mooney

One of the issues that must become foremost in any challenging of the market is to imagine alternatives. I am doing this in economics and health policy. My starting point is that health care systems need to be seen as social institutions. Here I spell out some of my thinking. Is there I wonder, merit in running with this idea in a wider context?

There is a need to consider the broad, social role of health care systems as institutions, as part of the fabric of society. Such a focus means trying to devise ways to involve the community as a community in values to underpin these social institutions.

With respect to health care, there is a need for a dual level approach, a personal one nested within a community one. The first is at the level of individual desire for our own health. The other, community level, is concerned with setting the social principles on which health care systems are to be based. At this second community level the individual now is a citizen rather than a patient.

Two potentially important caveats here. First the citizenry will need some education so that they operate on an informed basis. Second there is a risk, that needs to be addressed, that the rights of minority groups will not be adequately recognised by the majority.

What is required to pursue the above proposal is to determine how different levels of preferences might be elicited. Three levels of preferences or interest functions are proposed.

In the context of multiple interests functions it is useful to think of Frankfurt's** first and second order preferences and to develop a third order as well. The first approximates to some notion of desire; the second to what individuals want when they have time to reflect, perhaps embracing the issue of what sorts of individuals they want to be. These may be different not only in being reflective, but also in terms of the object of the preferences. This is inter alia because reflection comes at a cost; time is needed for reflecting (There seems little point in reflecting over long on whether to buy a chocolate bar but we might want to dwell more on preferences about our chocolate dependency.)

Third order preferences are "communitarian". This philosophy recognises that individuals are not free floating atoms. Their identities are embedded in some community/ies. Being active in a community is good in itself and not just instrumental. Institutions such as health care, but also education, are valued not only for producing some narrowly defined outcomes such as health gain and educational human capital gain. They can be valued for other outcomes, in health (e.g.information) or processes (e.g.caring), or as institutions per se which contribute to the decency of a society (e.g such as a tax based universal health care system). These issues are related to what sort of society citizens want.

To advance these third level preferences I have proposed the idea of "communitarian"claims." John Broome proposed the idea that a claim to a good meant that there was a duty owed to a person that she or he have the good.

I have previously suggested moving Broome's concept of claims to make it more relevant to the discussion here in the following way. It is proposed that "communitarian claims" be a sub-set of claims more generally where this sub-set is the responsibility of the community to meet or address. Thus, the duty in the case of communitarian claims is a duty owed by the community.

These are labelled "communitarian claims" reflecting the fact that it is the community who have the task of deciding what constitute claims, the duty to allocate claims and to decide on the relative strengths of different claims. There is value in being part of the process of arbitrating over claims. The more embedded individuals are in a community, the stronger will be communitarian claims in that community.

The strength of a claim is not a function of an individual's ability to manage to feel harmed. Harms and the strength of these harms are for the society to judge not the individual.(In the market, income is the determinant of claims and individual satisfaction is what is to be maximised). Strictly, with respect to claims, the bad feelings arising for the person harmed are only relevant in so far as the society deems them to be relevant. They are a matter for "community conscience".

The actual consumption of the resources however remains determined by how an individual values the options with which he or she is then faced.

Finally it is apparent that there may be problems in advancing the concept of claims and retaining the ability to measure and quantify within whatever set of principles emerges.

I am unsure if the obsession with quantification is a product of the market or not-it is certainly more prevalent in today's neo- liberal societies. On this issue Amartya Sen the Noble laureate in economics argues that measurement can be taken too far and he seeks to guard against 'over completeness'. As Sen sees it:

"Waiting for toto" may not be a cunning strategy in a practical exercise".

He suggests that:

"the nature of interpersonal comparisons of wellbeing.. as a discipline may admit incompleteness as a regular part of the ... exercise.. An approach that can rank the wellbeing of every person against that of every other in a straightforward way.. may well be at odds with the nature of these ideas"

So I don't worry too much about such problems. Maybe others will. More importantly for this blog I wonder if others can see merit in using the idea of communitarian claims in sectors outside of heath care.

* Broome, J (1991) Weighing Goods, Blackwell
**Frankfurt, H (1971) Freedom of the will and the concept of a person, Journal of Philosophy, 68:5-20
*** Mooney, G (2009) Challenging Health Economics, Oxford University Press
**** Sen A (1992) Inequality Re-examined, Clarendon

When "public" ownership means better outcomes

As the Barnett government moves to privatize more of the WA prison system, Susie Byers's piece on the Boronia pre-release centre in suburban Perth is a reminder that well resourced, State run prisons can deliver, rehabilitation, recovery and integration of prisoners into the community far better than can the market- that is privately run prisons.

Susie's other articles can be found at Eureka St.

A model of modern justice

Susie Byers*

(This article first appeared in Online Opinion)

Western Australian Premier Colin Barnett once said that he didn’t approve of female prisoners being taught pastry-cooking by French chefs. Not, presumably, because he has anything against the French, but because he was furious at what he claimed were the luxurious living conditions afforded women detained in the Boronia Pre-Release Centre for Women: a minimum security correctional facility in Bentley, Western Australia.

During the 2005 state election, then Opposition Leader Barnett promised to close the 70-bed facility, which had been opened just a year earlier. He lost that election, and luckily, when finally elected in September 2008 he appeared to have changed his mind: in the month after polling day, Barnett’s Attorney-General Christian Porter was proud to announce the opening of another pre-release centre in the south-west of WA, apparently similar to Boronia and housing up to 72 inmates.

I say “luckily” because Boronia has proved to be a model for modern justice and rehabilitation, drawing praise from criminal justice experts within Australia and across the world. Boronia should become a model for prisons across the country: it’s time to rethink the way criminal justice is administered.

Opened in 2004, Boronia is styled to provide women nearing release (who have attained a minimum-security rating before consideration for transferral there) with the capacity to operate successfully on the outside. Its website states its four basic principles: personal responsibility and empowerment, family responsibilities, community responsibility and respect and integrity.

Personal responsibility is engendered in part through the housing arrangements: living in shared units, women are responsible for their own cooking, cleaning, shopping (at a shop inside the facility), and budgeting. Women share self-contained units rather than cells, and although they are locked inside the units at night they are free to move about inside them. The idea is for Boronia to mirror the outside world as much as possible, so women can prepare themselves for their post-incarceration lives.

Additionally, women in Boronia are required either to work or to study, with an average day at Boronia starting at 8.30 and finishing at 3.30. During these times women (unless they are sick) must be engaged in either looking after their children if they have them, undertaking one of the courses available to them (including horticulture, hospitality and community services) or working. Some women work in the commercial catering business operated by Boronia, serving staff as well as businesses in the local community. Others leave the centre to do community work in organisations like the RSPCA or the Good Samaritans.

In a radical departure from traditional prison structures women are allowed to keep their children with them (up to their fourth birthday), and can have regular overnight visits from their children up to the age of 12(subject in all cases to the best interests of the child). If a child is approved to live in the prison, a “care plan” is formulated, and when the child arrives it is housed with its parent in “mother and child” units.

The Centre has been applauded by former Western Australian Inspector of Custodial Services Richard Harding, who, in his 2007 report on the facility called it a “model for good practice”. Harding’s successor, Neil Morgan, termed Boronia “one of a kind” and “first rate” due to its “women-centred approach”. (See report here.) Prisoners, too, have praised the facility. On January 19, 2005, the ABC’s 7.30 Report interviewed inmates and former inmates who called their guards “lovely” and “more like friends” and who called the progams offered by Boronia a “really, really good thing”.

This is the moment, no doubt, at which the obvious objection will be made: surely the point of prison construction is not to win praise from inmates? Why on earth should women convicted of crimes be sent off to be taught cooking by a chef who might (or might not) be French?

Susie Byers is a PhD student at the University of Western Australia. She has previously been published in Eureka Street and The New Critic (online journal of the UWA Institute of Advanced Studies).

Sarah Burnside on market logic and welfare reform

Most weeks Sarah Burnside*, a West Australian native title lawyer and writer, reflects on State and national issues in national online publications such as Eureka St, New Matilda and Online Opinion. A previous piece she wrote on the WA mining boom was published on this blog (and contains links to many of her writings).

In the piece published below Sarah analyzes Tony Abbott's recent statements on his plan to reform disability pension arrangements. Like Kevin Rudd before him, Opposition Leader Tony Abbott is engaged in a concerted political strategy to re-brand his party's three decades long embrace of punitive neoliberal social policies under the banner of 'compassionate conservativism'. But the contradictions are always evident, as Sarah Burnside points out in this important piece.

What is also interesting is the silence of Tony Abbott, and all those who argue the urgency of welfare reform, over the bigger problem of 'corporate welfare' for corporations and business and the provision of generous 'middle class welfare' by the Howard government (of which Abbott was a key figure) and subsequent Rudd Government.

Tony Abbott's proposal to reform the Disability Support Pension
by Sarah Burnside
Opposition Leader Tony Abbott drew media attention recently for proposing a 'welfare crackdown' to include compulsory work-for-the-dole schemes and higher threshold for eligibility for disability pensions. With respect to the latter, Abbott proposed a review by the National Audit Office to determine more stringent eligibility rules for the disability pension and suggested that recipients with 'less serious medical conditions' be required to undergo annual medical reassessments and sit two interviews each year to 'encourage them into employment'. Currently, 700,000 Australians receive the disability pension. Abbott estimates that around one-third of these people have conditions he would class as 'less serious'.

The Centrelink website explains that eligibility for the Disability Support Pension (DSP) is determined by reference to a set of criteria and usually requires a report from a person's doctor or specialist, and a job capacity assessment. People may be eligible if they are unable to work for15 hours or more per week at or above the relevant minimum wage or be reskilled for such work for the next two years because of illness, injury or disability, or if they are permanently blinded.

Unlike previous Coalition rhetoric on welfare recipients, which tended to damn them as 'bludgers', Abbott's language is more sophisticated, being couched in terms of care. In his 2009 book Battlelines, Abbott posited that 'allowing people who could readily work to stay out of the workforce for long periods is cruelty,not compassion'. This is a classic example of 'compassionate conservatism', a trope employed by UK Tories and US Republicans to varying success in the past decade to counter perceptions of the Right's heartlessness. The implication is that progressives are ideologically wedded to the welfare state but have little empathy for those who are dependent on it; conservatives alone manifest genuine concern for those members of the community. David Penberthy of The Punch supports Abbott, writing:

Apparently it's better to maintain a welfare program that would consign people to a dispiriting life of idolence, exposing them to the mental health anguish that comes with non-participation, rather than ask them some slightly tougher questions about what they would actually do.

The arguments are persuasive- surely no one wants to condemn their fellow citizens to a life with no prospect of employment. Anecdotal evidence suggests that most welfare recipients wish to find employment and that, lacking the social hub of a workplace, they feel isolated and lonely. Several issues are glossed over, though, in the invocation of compassion to justify limiting access to the disability pension.

Firstly, welfare recipients and their families would no doubt challenge the assertion that it is easy to 'qualify' for the disability pension or retain access to it. Interactions with government bureaucracy, involving vast amounts of paperwork, are often frustrating at best and mystifying a worst. Former welfare rights advocate Susie Byers discerns a 'culture of punishment within Centrelink and its parent Department's', born of a 'suspicious pessimism about the motivations and goals of those who are unemployed, raising children, or living with disabilities'. Byers suggests that the process of achieving government benefits is dehumanizing and humiliating, noting that those who claim payments 'expose themselves to invasions of privacy that would make the humblest of aged pensioner feel like a criminal'.

Abbott's suggestion that an audit of the eligibility rules is needed 'to ensure that only those who genuinely deserve the benefit receive it' subtly invokes the stereotype of the bludger without providing any evidence of such exploitation, Generally speaking, it seems likely that any benefit system will attract the self-interested as well as the needy. So be it: this is the price we pay for living in a civilized community that cares for its citizens. To make a whole class of people suffer for the sins of a few- even under the mantle of compassion- would be in this context as in others, profoundly unethical.

Secondly, Abbott's classification of muscular-skeletal and psychological/psychiatric disabilities as the categories within which 'less serious' conditions might be found seems opportunistic. Muscular-skeletal conditions may involve chronic pain which is inherently difficult for external parties to perceive. Similarly, psychological or psychiatric illness is not readily identifiable by bureaucrats seeking to limit entitlements. The nomination of these categories suggests a certain lack of sophistication-if someone's not in a wheelchair or holding a cane they must be capable of holding work. These are people already people vulnerable to accusations of malingering, given the increasing sceptisim about diagnoses of mental illness. It is thus important to note that one cannot qualify for the disability pension by feeling a bit blue. The criteria regarding psychiatric impairment in the Social Security Act 1991 (Cth) specify that mild but regular symptoms which tend to case subjective distress' and give rise to 'minimal interference with function in everyday situations' will not of themselves render one eligible for the pension.

Thirdly, despite the existence of such services as Job Services Australia and the Disability Employment Assistance Services it is far from clear that there is an aequate level of support available to help people with disabilities find jobs and mentor them while in employment. A HREOC National Inquiry into Employment & Disability in 2006 noted that, although 'most people with disability want to work if they have the capacity to do so.. we cannot expect high participation rates if people with disability have work-related expenses that are higher than their potential wages or they cannot access the supports they need'. A 'tightening' of the criteria for access to the disability pension would increase the existing need for serious investment in encourageemnt of flexible workplaces and programs to help people find and stay in employment.

More broadly, there are problems with the prevalent view, integral to Abbott's rhetoric, that employment necessarily imbues people with self-esteem and a sense of purpose and enables them to lead meaningful lives. Such a claim might hold true for skilled workers, including educated professionals such as politicians, or those at the other end of the Australian job market, the prospects are less alluring.

The writer Anne Manne, a trenchant critic of the 'Get to Work neo-liberal program', cited her own experiences of dismal jobs, including a stint as a jillaroo, in her 2008 Quarterly Essay ' Love and Money:The Family and the Free Market'. Manne challenged the view that paid work is inherently fulfilling, noting 'when my university teachers talked of the liberation of work, they did not mean domestic help in rural NSW', but rather-like Betty Friedan in The Feminine Mystique- 'prestige work'. Self evidently, prestige work is not available to all. Many workplaces are not flexible enough to cater for the needs of people with disabilities, Further there will always be jobs no one wants to do; such roles are filled by the people relegated to being the leftovers of the modern economy.

In her 2005 Griffith Review Essay law Professor Rosemary Hunter traced shifts within the Australian labour market and their effects on family disputes, noting that the 1990s had seen a 'rise of precarious low-quality employment'. Hunter suggested that 'Australia's current low unemployment rate.. does not signal economic prosperity but rather the rise of the working poor, and the phenomenon of labour market churning, whereby people move constantly between unemployment and poorly-paid, casual and part time jobs, which they must accept as a condition of continued support when they are again unemployed'. The superiority of such a life over one on the disability pension is not immediately obvious.

Currently families make up the shortfall in support of people with disabilities: this kind of informal care is characterized by feminist economist Nancy Folbre as the 'invisible heart' that combines with the 'invisible hand of the market' to render our society functional. Reliance on the family, however, is not sustainable. Its time for a real debate about how people on government benefits can be supported to live meaningful lives, including assistance securing employment where appropriate. The seductive language of dignity, choice and productivity employed by Abbott is unlikely to assist such debate.

*Sarah Burnside is a West Australian solicitor with an interest in history, native title, nationalism and politics. She works at the Yamatji Marlpa Aboriginal Corporation (YMAC), which represents native title claim groups in the Yamatji and Pilbara regions of Western Australia. The views expressed in her articles do not necessarily reflect those of YMAC.

The market, corporations and environmental damage

image courtesy the Guardian and from the Report prepared by Trucost

A recent unpublished study for the United Nations shows the cost of large corporations desire to' internalize profits' and 'externalize costs'.

The United Nations study estimates the world’s 3,000 largest corporations are responsible for over $2.2 trillion in environmental damage.The study found that the cost of and other damage to the natural environment caused by the world's biggest companies would wipe out more than one-third of their profits if they were held financially accountable.

The report comes amid growing concern that no one is made to pay for most of the use, loss and damage of the environment, which is reaching crisis proportions in the form of pollution and the rapid loss of freshwater, fisheries and fertile soils.

The report in the Guardian argues that:

"The true figure is likely to be even higher because the $2.2tn does not include damage caused by household and government consumption of goods and services, such as energy used to power appliances or waste; the "social impacts" such as the migration of people driven out of affected areas, or the long-term effects of any damage other than that from climate change. The final report will also include a higher total estimate which includes those long-term effects of problems such as toxic waste"

The unpublished report was conducted by the Principles for Responsible Investment Initiative and the United Nations Environment Programme.

Just who benefits from mining booms?

(image courtesy of the ABC)

In Western Australian the mining and resources industry is all powerful. But there are voices questioning the triumphalist narrative that the industry supposedly delivers benefits for all Western Australians equally.

Sarah Burnside* is one such voice and has published a challenging and important piece on Online Opinion. Sarah's other writings can be found at New Matilda,
University of WA Institute of Advanced Studies and the Australian Institute of Aboriginal and Torres Strait Islander Studies

The benefits of mining or not, in Boomtown, WA (published in Online Opinion, Thursday January 21 2010)

By Sarah Burnside

In their excellent work It’s Still in My Heart, This is My Country: The Single Noongar Claim History, the historians John Host and Chris Owen noted that the colony of Western Australia was initially:

... a capitalist venture that sent the weakest to the wall and allowed the strongest - those with stamina and adaptability but more importantly, assets, connections and a certain ruthlessness - to flourish.

Western Australia remains a state firmly wedded to market principles and in thrall to the romance of a certain rugged individualism; the mining industry occupies particular pride of place. To say that WA is pro-mining is to comprehensively understate the situation. In recent years, the mining boom - fuelled by Chinese demand for iron ore - has made the state an economic success story, if not a full-fledged capitalist fairytale.

The overriding narrative is triumphal: “WA has the best performing State economy in the nation as it shrugs off the global financial slump and enters the new year ready to reassert itself as Australia's economic powerhouse”. Late last year, a conference entitled In the Zone was held in Perth. The name referred to the time zone shared “by Perth, 60 per cent of the world’s population, and the nations that promise the greatest economic growth of the twenty-first century”. Having long been so far from the action, the isolated capital city is now asserting itself: rest of the world, meet Boomtown.

Perth has eclipsed Melbourne as the second-most affluent city in Australia, retail outlets from the likes of Gucci, Tiffany & Co and Louis Vuitton have popped up in the CBD, and the local media spent much of the last fortnight preoccupied with the fate of a yellow Lamborghini under the State’s “hoon laws”.

So far, so banal: money is being made, people are spending it and the cogs and wheels in the economic system are turning. Although there are legitimate concerns (expressed most prominently by public intellectual Clive Hamilton) about the conceptual confusion of consumerism with citizenship, economic growth is regarded as a boon for obvious reasons.

There have been several reports in recent years, however, of the uneven spread of benefits arising out of the mining boom, in Western Australia and elsewhere. Peter Kenyon, a Professor of Economic Policy at Curtin University, has cast doubt on the assumption that what is good for the mining industry is good for everyone, saying: “What tends to happen in these circumstances is those that are directly benefited through the mining industry and indirectly benefited through the mining industry tend to do very well but the significant proportion of the population do not do well.”

Professor Kenyon’s argument is supported by research (PDF 258KB) conducted by the Australia Institute in 2009 which concluded that overall, “the mining boom seems to have had very little positive impact on the wellbeing of the majority of Australians other than those directly affected by the expansion in the mining industry”.

Similarly, Committee for Perth spokeswoman Marion Fulker noted in late 2009 that “there are some disparities between those earning very good incomes and those not … I would say the divide between the have and the have nots is increasing”.

The divide to which Ms Fulkner refers is becoming increasingly apparent: the 2009 Counting the Homeless Report found that the rate of homelessness in WA increased by 14 per cent between 2001 and 2006. The division between Perth and the regions was starkly illustrated by the spike in homelessness rates in the Pilbara and Kimberley regions, which increased by 58 per cent during this period. The report’s author, Dr Chris Chamberlain, attributed these rates in part to the mining boom, which saw many workers moving to the northwest and finding a lack of accommodation that led to them “sleeping in their cars … sleeping in shipping containers”. Homelessness is also particularly prevalent among Aboriginal people in WA - in 2008, a survey of Broome residents undertaken by the local council revealed that 27 per cent of the Aboriginal people surveyed were homeless.

It is also commonly noted that Aboriginal people in remote and regional areas have not substantively benefited from successive mining booms within their traditional country, a fact often erroneously invoked to criticise the Native Title Act, which was predicated not on social justice grounds but on the recognition of rights held under traditional systems of law and custom.

The poverty in the midst of plenty (PDF 3.93MB) shocks us out of the complacency engendered by the comfortable Australian rhetoric of the “fair go”. Responses, from indigenous and non-indigenous Australians alike, include sincere hopes that Aboriginal people will “share in the mining spoils”, “get out of poverty, get off welfare … have a better life”.

Mining, then, rather problematically assumes the status of Great New Hope for Aboriginal People. Such a mantle ignores the diversity of indigenous groups, assumes a monolithic “solution” will fix a loosely defined problem, and rather conveniently lets State, Federal and Territory governments off the hook.

It must be acknowledged that the resources industry is an easy target for glib critique. Issues are rarely as simple as environment v mining or traditional owners v mining: progressives and conservatives alike paint skewed pictures of complicated disputes. Some devotees of “the free flow of capital” have accused commentators on the “mining boom” of expressing an “elitist snobbery towards miners”.

The problem is not the industry itself, so much as our inflated expectations of what it can achieve. Reports about the “downside of the boom” are newsworthy because they are deemed counterintuitive - man bites dog; resources boom fails to deliver equitable levels of wealth. The question is: how surprising is it that the “trickle-down” theory fails to fulfil its promise? Do we really expect mining companies - whose primary purpose is the generation of wealth for their shareholders - to further an egalitarian state or “solve” ongoing post-colonial problems, without some kind of regulatory nudge in the right direction? Whether with respect to mining or any other area of wealth creation, the news that market capitalism does not automatically lead to equality of outcomes is hardly earth-shattering.

The past few decades have seen a gradual blurring of the roles of government and private industry in Australia; under neoliberal thought, the former ought to contract to allow the latter to flourish. It is worth restating that it is the role of government, rather than of industry, to safeguard citizens’ rights and their ability to enjoy those rights on an equal basis. This is not to say that private industry is a pernicious force; merely to acknowledge, as did humanities academic David McKnight in his 2005 book Beyond Right and Left, that markets “require a strong framework of law and civil society to restrain their dynamic but destructive tendencies”.

The reports quoted above indicate that what is good for mining companies isn’t necessarily good for all of us. What is often skirted around, however, is the fact that a buoyant economy will not, absent government intervention, reward all Australians equally either. The boom raises questions about what kind of society we want, about the concept of equality and the role of government in achieving it. In WA as elsewhere, our egalitarian self-image needs more than a bright new coat of paint in time for Australia Day: it requires some serious examination.

*Sarah Burnside is a West Australian solicitor with an interest in history, native title, nationalism and politics. She works at the Yamatji Marlpa Aboriginal Corporation (YMAC), which represents native title claim groups in the Yamatji and Pilbara regions of Western Australia. The views expressed in her articles do not necessarily reflect those of YMAC.

Western Australian perspectives that challenge the market

This blog is for people concerned about the extension of the market into every sphere of life. It has a particular focus on Western Australian issues and perspectives and the majority of contributors will be West Australians.

While the prime focus of our concerns is WA, the state cannot be seen in isolation from the rest of Australia, or indeed the rest of the world. The extension of the market to more and more aspects of society is a global phenomenon of the last two to three decades and thinking and action on this matter knows no state or national boundaries. In addition to writing about Western Australia, we we will have an eye of what is happening elsewhere.

Regular contributors are welcome.