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Editorial
Our
review article about the rightly fêted book The
Spirit Level asks that we go deeper into the causes
of inequality than the authors have been able to do, but
we can only applaud the book's message: that inequality
matters, that why it occurs matters, that the damage that
it does matters, and so seeking greater equality matters.
But there has often been an understandable worry that social
policy designed to create a more equal society might make
the economy less efficient. Lilia Costabile's book on European
social policy, also reviewed here, hasn't received anything
like the publicity generated for and by The Spirit Level,
but it is at least as important because it shows that social
protection measures don't necessarily make an economy less
efficient.
These
books have important consequences for the debate on the
desirability and feasibility of a Citizen's Income: We no
longer have to regard economic efficiency and greater social
equality as mutually exclusive: indeed, we can regard them
as complementary and as mutually reinforcing. A social policy
which promotes both should therefore be particularly welcome.
There
is a General Election on the way, and it will soon be time
to discuss some new directions. If all of our major political
parties were to recognise and state that equality and economic
efficiency can be mutually reinforcing, and that economic
and social policy belong together, it could move us into
a new era of the debate on the desirability of universal
benefits. A Citizen's Income is one of those social policies
which would promote both greater economic efficiency and
greater equality. If the Citizen's Income Trust can help
by contributing to the necessary debate, then we shall of
course be very pleased to participate.
Progress
report
We
know that there is nothing very significant about the decade
digit clicking over between the 31st December 2009 and the
1st January 2010, but as much of the rest of the world is
reviewing the past decade, so we are taking this opportunity
to review the Citizen's Income Trust's work during the past
decade and also to look to the future.
Achievements
Since
2001 we have published the Citizen's Income Newsletter
three times a year, kept our mailing list up to date, maintained
a library, responded to numerous requests for information,
and updated our website (which receives between 200 and
400 unique visits a day). We have also run successful questionnaire
surveys of the House of Commons and the House of Lords,
organized an essay prize, participated in conferences, submitted
evidence to the House of Commons Work and Pensions Committee's
Benefits Simplification inquiry (and printed the
evidence as a booklet), published a leaflet/poster for students,
and run a seminar series. We have done all of this on a
shoestring budget and voluntary labour, and we are enormously
grateful to the many people who have helped us with all
of this activity.
Some
questions about future activity
We
would be interested in our readers' responses to a number
of questions:
Our
first question is: During the past decade much of our
activity has been reactive rather than proactive. Should
we now be planning to be proactive? - that is, should we
be creating opportunities for debate rather than waiting
for them to present themselves?
A
little while ago the trustees developed a plan for a commission
on the reform of the tax and benefits system and on a Citizen's
Income as a particular reform option. The process would
be to gather expert groups to tackle particular issues related
to the feasibility, desirability and implementation of a
Citizen's Income; to publish working papers; to consult
on the working papers; to fill gaps in research which the
consultation revealed; to hold a conference or conferences;
and to publish interim and final reports. An important inspiration
for these ideas was the large number of respondents to our
House of Commons and House of Lords questionnaire who asked
for a commission of inquiry of some kind to study the tax
and benefits system as a whole and the options available
for its reform.
So
our second question is: Is now the right time to undertake
such a project?
If
the answer is 'yes' then our third question has to be:
Where
should we seek the financial and human resources which we
shall need in order to carry out such a project?
Funding
our kind of work is particularly difficult because the promotion
of debate on tax and benefits reform is not among the grant-making
criteria of any grant-awarding trust.
The
fourth question must be: What help might you be able
to give with either funding such a project or offering expert
voluntary labour?
So,
please tell us what you think.
News
The
Centre for Social Justice has published a report,
Dynamic Benefits, which recommends a standard total
withdrawal rate for means-tested benefits of 55%. The Centre's
'Universal Credits Scheme' combines various benefits and
also aligns them with in-work tax credits and gives the
responsibility for the payment of all of the credits to
a single agency. The Citizen's Income Trust has written
to the CSJ to suggest that their scheme is just two steps
away from a Citizen's Income. All that's required is to
turn tax allowances into a cash payment and then to combine
all of the payments in the scheme into a single payment
to every citizen. To read the report go to www.centreforsocialjustice.org.uk/default.asp?pageRef=266
Twenty-seven
charities have called on the Government to set ambitious
targets to improve take-up of welfare benefits and tax credits.
More than £16 billion in means-tested benefits and
tax credits currently goes unclaimed every year, and as
many as four out of five low paid workers without children
(1.2bn households) miss out on tax credits worth at least
£38 per week - a total of £1.9 billion. Housing
benefit, council tax benefit, child tax credit and pension
credit are also particularly susceptible to underclaiming.
Citizens Advice Chief Executive David Harker said: 'The
government has made a serious commitment to eradicate child
and pensioner poverty, and to help the working poor, yet
up to £10.5 billion of means tested benefits and £6.2
billion of tax credits remain unpaid each year. … The
benefits and tax credits system is extremely complicated
and the reasons people don't claim what they're due are
complex, ranging from simply not knowing about the benefit
concerned, to being put off by what can sometimes seem a
very daunting process, to feeling that the amount they gain
will be negligible.' For further details see www.citizensadvice.org.uk/press_office201022
2010
is the European Year for Combating Poverty and Social
Exclusion. The year's objectives are to 'encourage involvement
and political commitment from each and every segment of
society to participate in the fight against poverty and
social exclusion, from the European to the local level,
whether public or private; to inspire each and every European
citizen to participate in the fight against poverty and
social exclusion; to give voice to the concerns and needs
of people experiencing poverty and social exclusion; to
engage with civil society and non-governmental organisations
that fight poverty and social exclusion; to help deconstruct
stereotypes and stigmas attached to poverty and social exclusion;
to promote a society that sustains and develops quality
of life, social well-being and equal opportunities for all;
and to boost solidarity between generations and ensure sustainable
development.' www.2010againstpoverty.europa.eu
The
International Labour Office has published a website,
Global Extension of Social Security, www.socialsecurityextension.org/gimi/gess/ShowWiki.do?wid=59:
a most valuable source of information on social security
systems around the world. Readers can use a variety of criteria
to search the matrix: impact, kind of benefits, specific
groups, category of programme, or region/country.
Since
the 2nd November 2009, Child Benefit has been disregarded
when Housing Benefit is claimed. www.opsi.gov.uk/si/si2009/uksi_20091848_en_1
Two
reports published by the Institute for Fiscal Studies
in 2009 complement each other. Poverty and Inequality
in the UK: 2009 reveals recent slow growth in take-home
incomes, and between 1997 and 2008 consistent growth in
income inequality, with 'the lowest growth at the very bottom
of the income distribution over this period and the fastest
growth at the very top' (p.1). Inequality has accelerated
during Labour's third term, and both relative poverty in
general and child poverty in particular have risen. The
second report, Micro-simulating child poverty in 2010
and 2020, does precisely that, and predicts that by
2010 child poverty will have fallen by a third since 1998
but that it will remain 600,000 higher than the Government's
target. If current uprating rules remain in place then child
poverty will remain well above target in 2020. Both reports
contain useful appendices on methodology.
The
Department for Work and Pensions has launched 'Benefits
adviser': a website which enables claimants 'to obtain an
estimate of the amount of benefit they may be awarded. In
addition, customers will be able to enter potential new
circumstances to see how this would affect their benefits,
for example, if they would be financially better off in
work. The service will make it clear that financial information
given is an estimate only.' www.direct.gov.uk/benefitsadviser
In
their recent report The Great Transition, the New
Economics Foundation argues that a complete restructuring
of society and the economy is required. In particular the
authors recommend 'the creation of Citizens' Endowments
of up to £25,000 for all people on reaching the age
of 21 to enable them to invest in their future, as well
as Community Endowments to provide commonly owned assets
to invest in our local neighbourhoods. Both would be funded
by a proposed increase in inheritance tax on all estates
to 67%.' www.neweconomics.org/publications/the-great-transition
Compass
has published a report, In Place of Cuts: Tax reform
to build a fairer society, which shows in graphic form
(p.15) the seriousness of tax inequality. Earners in the
lowest decile pay 46% of their gross income in taxation
and earners in the highest decile 34.2%. An important reason
for the inequality is the regressive nature of VAT. The
report recommends a variety of changes to the tax system,
including National Insurance Contributions. The report does
not discuss the benefits system nor its relationship to
taxation. www.compassonline.org.uk/publications
In
an article in Social Policy and Administration, Peter
Lloyd-Sherlock reports on research which shows that in Latin
America, where social security provision relies largely
on social insurance entitlements, the impact of social spending
on income distribution is highly inequitable. The poorest
quintile receives 18.6% of spending and the richest quintile
28% (Peter Lloyd-Sherlock, 'Social Policy and Inequality
in Latin America: A Review of Recent Trends', Social
Policy and Administration, vol.43, no.4, August 2009,
pp.347-363
Social
Policy and Administration has also published research
on recent pension reforms. 'The current financial crisis
calls the strategies into question in an even sharper form;
individuals are less likely to have the resources to devote
to long-term savings, especially in any [defined contribution]
scheme where returns cannot be guaranteed; the government
will not underwrite pension savings, other than for the
rapidly diminishing number of [defined benefit] schemes;
financially literate investors, having been educated to
recognize the problem of investment risks, are likely to
act in rational ways and opt out of personal accounts. New
Labour claims to be seriously committed to securing reasonable
incomes for retirees, but to realize this commitment could
require radically rethinking not just the tools of policy
but also the underlying policy framework.' (Barbara Waine,
'New Labour and Pensions Reform: Security in Retirement?'
Social Policy and Administration, vol.43, no.7, December
2009, pp.754-771)
The
Joseph Rowntree Foundation has published the results
of its research project on public attitudes to poverty:
'Surveys suggest that public attitudes towards those experiencing
poverty are harshly judgemental or view poverty and inequality
as inevitable. But when people are better informed about
inequality and life on a low income, they are more supportive
of measures to reduce poverty and inequality.' The authors
call for 'a long-term programme involving government, civil
society, media and private sector organisations [which]
is needed for sustained attitude change and to build public
awareness that solutions to poverty need a societywide response.'
To read the report go to www.jrf.org.uk/publications/public-support-eradicating-poverty-uk
Correction:
At the top of page 9 of issue 3 of the Citizen's Income
Newsletter for 2009 'FBI' should read 'FCI'. We apologise
for the error.
Conference
announcement
The
thirteenth BIEN congress, Basic Income as an Instrument
for Justice and Peace
will
be held in Sao Paulo, Brazil, from the 30th June to the
2nd July 2010.
The
organizers write: 'For the very first time in its history,
the international basic income network will hold a meeting
in Latin America, more specifically in Brazil. Every other
year researchers, scholars, policy makers and politicians
from different parts of the world get together to discuss
alternatives that could lead to the promotion and implementation
of an elementary principle of social justice: the guarantee
of a monetary income, of equal value, unconditional and
free of quid pro quo, to all citizens that are members
of a community. This debate arose in Europe over 20 years
ago and today it integrates the agenda of discussions on
socioeconomic rights in the developing countries as well.
Ideas, experiences and new designs for public policies will
be addressed by specialists and several guests for three
days.'
The
organizers are asking for submissions of papers and proposals
for panels. The deadline is the February 25th 2010.
For
further details, please see the website: www.bien2010brasil.com
Review
article
Richard
Wilkinson and Kate Pickett, The Spirit Level: Why More
Equal Societies Almost Always Do Better,
Allen Lane, 2009, xvii + 331 pp, hbk, 1 846 14039 6, £20
We
don't often give to a book a review article rather than
a review, but this book is important, it has generated a
significant amount of debate, it will prove to be significant,
and it raises interesting questions which are well worth
pursuing.
The
authors are epidemiologists and they bring research tools
normally applied to the study of how and why diseases spread
in populations to the study of a broader range of social
ills. The book is packed full of useful and interesting
data. It would have contained more of it if more had been
available, but the authors found that data on hierarchies
of wealth and on educational attainment are less available
for the whole range of countries they were studying than
is data on income inequality (p.27), so income inequality
comes to stand for inequality in general.
Richard
Layard has shown in his book Happiness (2006) that
as GDP rises happiness rises and then plateaus; and in this
book Wilkinson and Pickett show that the same applies to
life expectancy, health, and other social indicators. But
whereas between wealthier societies average income
makes little difference to the levels of social indicators,
within societies a very different picture emerges:
'Richer people tend, on average, to be healthier and happier
than poorer people in the same society' (p.13). The researchers'
main finding is that levels of income inequality and levels
of social and health problems correlate very closely with
each other (p.20), and they draw the conclusion that inequality
causes a variety of social failings.
But
this isn't just an exploratory work: it is a call to action.
The authors have themselves set up a not-for-profit trust
to disseminate their findings, deliver understanding of
the connections that they have discovered, and promote action
to reduce the inequality which they believe to be the root
cause of social ills. The final part of the book is full
of proposals for action: the kind of childcare we are now
seeing in the Sure Start programme; employee ownership of
companies; reductions in CEO pay; and changing tax and benefits
policies ( - there ought to have been rather more on this
because the authors themselves recognise that it is 'the
most obvious way' to influence income differences (p.263)).
A Citizen's Income gets a brief mention.
The
importance of this book is that no longer will anybody be
able to say the income inequality doesn't matter.
And
so the questions which the book raises:
Causality
and paradigm shifts
A
particularly interesting question is that of causality.
Many of the chapters contain discussions on how inequality
and/or income inequality cause the levels of health and
other social indicators: levels of trust, mental illness,
life expectancy, infant mortality, obesity, educational
performance, teenage pregnancy, murder rates, imprisonment
rates and social mobility. The authors take income equality
as a signal of a more general social inequality, and then
treat that as the causal factor.
As
David Hume suggests: 'When we look about us towards external
objects, and consider the operation of causes, we are never
able, in a single instance, to discover any power or necessary
connexion; any quality, which binds the effects to the cause,
and renders the one an infallible consequence of the other.
We only find, that the one does actually, in fact, follow
the other,' (Hume 2008, ch.1, § iv). Owens 1992 and
Sosa and Tooley 1993 are more recent treatments of the problematic
notion of causality, and they, like Hume and the book under
review (p.62), raise the question as to whether a coincidence
of phenomena can ever lead to a proper conclusion that one
action causes the other. They also raise the question as
to whether we can even say what we mean by the word 'cause'.
I
shall continue to employ the notion of cause in this article
whilst recognising that we can't be sure what the term means
or whether causality is operating between inequality and
social ills - because, as Immanuel Kant suggests, without
the notion of causality we find it impossible to reason
about anything.
A
subsequent question is this: If there is a correlation between
income inequality and other social ills, then in which direction
does causality operate? Are social ills the result of inequality,
or is inequality the result of social ills? And what would
it take to prove such a causal link?
Unfortunately
the notion of proof is just as difficult as the idea of
causality. Karl Popper (2002) suggests that science comprises
a set of bold hypotheses which we can falsify but which
we cannot prove. What we can do is seek evidence which supports
a hypothesis and thus construct a cumulative argument. Thomas
Kuhn (1970) shows how a paradigm shift occurs and coheres
within scientific communities and thus forms the basis for
further exploration. The book under review is a useful step
along the way towards understanding how our society functions,
and thus helps to build the foundations for a new paradigm.
Further research on the different kinds of inequality (educational
attainment, housing, social capital, income, power, relationships
with powerful people, etc.) and on how they relate to each
other, and also research on the extent to which a generalised
'inequality' exists and relates to particular kinds of equality,
will help to build such a new paradigm and provide an even
firmer basis for further useful research.
Social
structures and processes
The
general inequality to which the particular inequalities
belong, and with which the levels of social ills correlate,
might in former times have been spoken of in terms of social
class. This raises the issue as to whether underlying the
different kinds of inequality is a fundamental social hierarchy.
Here is another issue deserving further research. If there
is such a social hierarchy then it might be that hierarchy
which is the independent variable, and income inequality
and other particular inequalities which are dependent variables
alongside the social ills which the authors find to be related
to them.
The
authors have offered us a hypothesis: that income inequality
causes social ills. I would like to take the argument one
step further and offer an additional hypothesis: that a
deep-seated social structure (which we might call a social
class structure, but we shall need to revisit the meaning
of that term if we are going to use it) is a causal factor
in constructing social infrastructures (of education, income
distribution, healthcare, community engagement, etc.) and
that those infrastructures result in inequalities which
correlate closely with each other.
In
diagrammatic form:
The
Wilkinson/Pickett hypothesis:
The
alternative hypothesis:
| Social
class structures |
Policy
area |
instruments |
outcome |
| Educational
infrastructures |
Public
schooling for some, private schooling for others, admissions
policies benefiting some and not others, etc. |
Educational
performance outcomes |
| Tax/benefit
structures |
Poverty
traps and high marginal deduction rates for some, subsidies
and low marginal deduction rates for others |
Income
inequality |
| Environment,
housing, segmented society, etc. |
Warm
and dry housing with safe outdoor space for some, not
for others; quiet space for homework for some, not for
others; connections leading to jobs for some, not for
others, etc. |
Social,
health, and wealth outcomes |
To
offer an additional hypothesis brings with it an obligation
to find supporting evidence (evidence which supports it,
not evidence which proves it). Esping-Andersen categorises
'welfare regimes' thus:
| Type
of welfare regime |
Character |
Represented
by |
| Social
democratic regime |
The
state is committed to full employment, generous universalist
welfare benefits, income redistribution, &c |
Scandinavian
countries |
| Conservative
/ corporatist regimes |
Occupationally
segregated benefits |
Germany,
France, Austria …. |
| Liberal
welfare regimes |
Selective
provision and a residual safety net for the poor |
USA,
UK, Australia …. |
(See
G. Esping-Andersen, The Three Worlds of Welfare Capitalism,
Polity Press, 1989)
The
welfare regimes correlate with income inequality in different
countries thus:
Low
inequality
Social
democratic regimes
Conservative / corporatist regimes
Liberal
welfare regimes
High
inequality
The
close correlation suggests that the structure of welfare
provision causes income inequality. If the class structure
of a society relates closely to the type of welfare regime
then Esping-Andersen's categorisation supports the first
line of the table representing the additional hypothesis.
This suggests that income inequality is a dependent
variable, and that the additional hypothesis might offer
a useful description of causal links.
I
suspect that underlying different income inequality outcomes
is the extent to which Esping-Andersen's regimes apply different
rules to different groups within a society. Here the detail
matters. The Department for Work and Pensions Tax Benefit
Model Tables (http://www.dwp.gov.uk/asd/tbmt.asp)
show that many households on low incomes experience marginal
deduction rates of 95%, i.e., for every additional pound
they earn they keep only 5p: whereas those who earn most
keep 59p of every extra pound earned. Income inequality
is bound to be the result. Thus in a liberal welfare regime
which relies heavily on means-testing the structure results
in increasing income inequality. It is such detailed consideration
of the structures of welfare provision (for instance,
of the different types of secondary school, their different
admissions systems, and those systems' privileging of middle
class behaviour) that might reveal the complex causal pathways
which result in a correlation between income inequality
and other social indicators.
Complex
roots of inequalities
At
the end of ch.6 Japan and Russia are compared. The former
has high income equality and good health indicators, the
latter high income inequality and poor health indicators.
The detail of the two examples suggests that a bundle of
factors relating to economic and legal structures, history,
and politics, might be the independent variables behind
both income inequality and health outcomes, as the additional
hypothesis suggests. Similarly, the evidence adduced for
a statement on pp.168-9 that income inequality leads to
lower social mobility suggests that it's feeling comfortable
amongst people like ourselves which improves health and
social outcomes, and when discussing educational performance
the authors find that parents' educational attainments affect
both household income and one's children's educational attainments.
In a number of places the authors show how chemical factors
(for instance, cortisol release when we are stressed, inhibiting
our ability to think) affect social and health indicators.
Such evident complexity supports the existence of the left
hand column in the diagram of the additional hypothesis.
There is a social hierarchy with complex roots; it is this
which in different ways drives the structures of welfare
provision; it is these structures which determine income
inequality and other health and social indicators; and these
inequalities in their turn reinforce the social hierarchy,
thus creating a circular model, as shown in the diagram
below:
The
authors' own discussion of possible causal routes on pp.188ff
could lead us to the additional hypothesis outlined above,
and it could also provide additional support for their listing
of Citizen's Income amongst the actions for which they call.
A Citizen's Income would redistribute income, and would
thus be an action related to the authors' hypothesis; but
it would also reduce marginal deduction rates and thus encourage
low earners to earn more by enabling them to keep more of
the additional money they would earn. It would therefore
change for the better the structure of welfare provision,
as the additional hypothesis requires.
In
every social policy area, changing the structure of provision
will change outcomes. For instance: to remove private schools'
charitable status would reduce the numbers going to them,
which would bring more bright middle-class children and
their parents into the state system, which would improve
state schooling, which would affect educational outcomes.
To cease to allow voluntary aided schools to set their own
admissions criteria would have a similar effect.
In
the field in which we are most interested here, we need
policy changes which will result in alteration to the structure
of welfare provision as this would change the ways in which
the system redistributes income. The one prescription would
therefore satisfy the ways in which both of our hypotheses
call for action. In this instance, changing only the symptom
might make matters worse if additional means-testing is
used to redistribute income, for that would only increase
marginal deduction rates (as more benefits would be withdrawn
as earned income rose) and would thus dig people deeper
into poverty. In this, as in all other policy areas, it's
the structure which requires attention as well as the symptom.
Conclusions
Wilkinson
and Pickett are to be highly congratulated on a book which
has started an essential debate; and the publisher is to
be congratulated on the book's production (though the index
is incomplete, there is no bibliography, and the cartoons
are a matter of taste).
This
review is a contribution to the debate which now needs to
happen. We look forward to seeing many more contributions
to it. As the authors say, 'in the course of our research
we became aware that almost all problems which are more
common at the bottom of the social ladder are more common
in more unequal societies' (p.18). Yes, indeed. So what
needs changing is the length of the 'social ladder'. The
more equalities we can introduce into our social infrastructure,
the more the ladder will shorten, particularly for the next
generation. Whilst a Citizen's Income on its own wouldn't
complete that task, it would surely make a substantial contribution
to it.
The
authors have shown that there is a significant correlation
between income inequality and various health and other social
indicators. What we now require is a broad debate about
a) what the causal links might be; and b) what we should
therefore do.
Bibliography
David
Hume, An Enquiry concerning Human Understanding,
Oxford University Press, new edition, 2008
Thomas
Kuhn, The Structure of Scientific Revolutions, University
of Chicago Press, 1970
Richard
Layard, Happiness: Lessons from a New Science, Penguin,
2006
David
Owens, Causes and Coincidences, Cambridge University
Press, 1992
Karl
Popper, The Logic of Scientific Discovery, Routledge,
2002
Ernest
Sosa and Michael Tooleys (eds), Causality, Cambridge
University Press, 1993 MT
Reviews
Guy Standing, Work after Globalization:
Building Occupational Citizenship, Edward
Elgar, 2009, xi + 366 pp, hb, 1 84844 164 4, £89.95
This
is an important book with a monumental scope. Guy Standing
reviews the sweep of labour conditions since before the
nineteenth century. He starts with Karl Polanyi's The
Great Transformation published originally in 1944, in
which Polanyi charts the commodification of labour. 'Polanyi
depicted the nineteenth century as an attempt to create
a market society in which everything was turned into a commodity,
driven by the rising power of financial capital' (p.3).
'The early period was one of 'disembeddedness', in which
financial and industrial capital broke down old systems
of regulation, social protection and redistribution …
to create national markets, including a national labour
market.' The disembedded phase lasted into the early twentieth
century.
It
was followed by state reaction, which tried to prevent market
forces being socially destructive, using new mechanisms
of social protection, regulation and redistribution. This
embedded phase, in which the state re-embedded the economy
into society, occurred in the three decades following the
Second World War.
Since
then, a Global Transformation has been in full flood. Once
again, in the continuing battle between markets and communities,
the cycle of recommodification and decommodification of
many aspects of life, particularly of labour, has continued,
and markets have once again taken the ascendancy.
Early
in the book, Standing discusses and defines various terms
for future reference within his text. These include: the
differences between work and labour, the differences between
labour and labour power, and the concepts of employment,
occupation, vocation, career, profession, crafts and job.
Concepts imply the social contexts in which they take place.
He relates leisure to work, and play to labour. 'Unlike
labour, "work" captures the activities of necessity,
surviving and reproducing, and personal development.'
'In work, there is room and respect for inaction and contemplation.'
He says that in ancient Greece 'reproductive activity, praxis,
work done for its own sake, was a means of strengthening
personal relationships, between relatives, friends and citizens'.
Half
of the book is devoted to examining the decommodification
and recommodification of labour in different time periods.
The growing inequality has led to a new class system. (It
has been suggested elsewhere that there are now two classes
in the UK: citizen, and an underclass.) Standing distinguishes
between the global elite, the salariat, the 'proficians'
(a mix of professional and technician), a withering core
of working class, the 'precariat', the unemployed, and the
detached.
He
looks at the weakening of several former barriers to commodification,
including the family and the education system. In the latter,
he identifies the commodification of schooling and academics
over the last three decades. Attitudes and policies towards
the unemployed have commodified these, too. Commodification
has taken place by undermining 'regulations protecting employees
through labour law, unions and collective bargaining' (p.147).
Occupations and crafts used to provide a barrier to commodification,
but these too have suffered a 'loss of autonomy … via
attack from state bureaucrats, the courts, corporate tactics
or divisions within the occupation'. Both state regulation
and self-regulation of occupations provided barriers to
commodification. Standing examines regulation, which is
about control, and asks 'for whom, by whom, over what and
by what means?'. Powerful trends towards occupational licensing
are recommodifying many occupations.
In
chapter 8, Standing draws together some of the social and
labour consequences of the construction of The Global Transformation.
He calls this 'The Horror'. This period is characterised
by gross and growing inequality, gated communities of the
rich, and social and economic insecurity for most. Also
included is an increase in short-term jobs with long hours,
loss of control, stress, increased surveillance, and the
rise of the adjustment professions for damage limitation
(psychiatrists, therapists, prescription drugs, social workers,
and the police). The defining feature of globalization is
insecurity.
This
is a scholarly and erudite work, with a bibliography testifying
to the breadth of reading by, and background knowledge of,
the author. He also draws on his long experience working
for the International Labour Organisation. It is not an
easy book to read for the non-specialist. However, the work
repays the effort of those who persist. The definition of
terms made in chapter 1, the subtle distinctions in meaning,
and the technical language make, demands on the reader.
There is a wealth of detail, all illustrated with plenty
of fascinating examples. At times, these can seem overwhelming,
and the interesting detail of the trees can make one lose
sight of where the path is leading through the wood. The
goal is revealed in the last two chapters.
Standing
recognises that the commodification phase of the Global
Transformation, during which the building of international
markets was paramount, must be followed by one where the
economy must be re-embedded in society, to overcome the
yawning inequality, stress, insecurity and loss of control.
He argues that, from among the various forms of citizenship
that are vying for supremacy, the desirable form is 'occupational
citizenship'. He then describes the sort of institutions
and policies that could lead to a future society based on
occupational citizenship.
The
first question for any social policy reform should be 'What
sort of society do we want to be part of and help to create?'
Standing recognises that a vision is required, in which
both equality and freedom are goals. Some degree
of equality is a necessary condition for freedom, because
one cannot be truly free if living in poverty. Greater equality
increases choice for more people. He defines 'full freedom'
as the decommodification of people equally, but he recommends
that their labour should be commodified, a good sold for
a money wage. Necessary conditions for the 'Good Society'
include good work relations (rather than good labour relations).
It would also be characterised by identity and social solidarity.
Civic friendship and conviviality will have a high profile.
He favours a cap on incomes and wealth. He refers to Polanyi's
concept of the right to non-conformity. He proposes five
Decision Principles by which to evaluate policy proposals
and institutional changes (pp.296-8), including an Ecological
Constraint Principle as an over-riding requirement.
It
is not until page 299 that Standing introduces the idea
of a Basic Income. He extols its many advantages, and defends
it against potential criticisms. By breaking the link between
security and labour, it provides the security to facilitate
a richer working life. He favours an end to subsidies as
indefensible on efficiency and equity grounds. He explores
in greater depth how such a basic income scheme could end
paternalistic welfare policy, where a citizen's receipt
of benefits has behaviour conditions attached. He also indicates
how such a scheme would give people 'work rights', allowing
them choices for how they use their time for contemplation,
for leisure, or in socially useful ways. He recommends that
there should be collective and individual Voice (associations
for representation) for both recipients of care and for
care-workers, and that the latter should have a collective
body with both bargaining powers and lobbying functions
(pp.315-21).
Throughout
the book, Standing is very critical both of social democrats
of the twentieth century, who were mistaken, and of libertarian
paternalists of the early twenty-first century, who claim
to know what is best for others, and who are dangerous.
He claims that a basic income scheme can be justified as
an instrument of democratization. He also indicates how
a basic income scheme is part of a move towards egalitarian
freedom, and how emancipating egalitarianism is needed to
create the basis of occupational citizenship.
It
is impossible to give the full flavour of this thoughtful
and stimulating book in even a long review, but it deserves
to be widely accessible and read.
Anne
Miller
Lilia
Costabile (ed.), Institutions for Social Well-Being:
Alternatives for Europe, Palgrave Macmillan, 2008,
xiii + 242 pp, hbk 0 230 538061, £58
This
book tackles an important question: Do social protections,
such as free education and health care, state pensions and
social security benefits, reduce an economy's efficiency?
In particular, does the European Social Model make for economies
less efficient than those in countries such as the USA where
social protections are less well developed? To put the question
another way: Is state-sponsored equality less economically
efficient than free market inequality?
Professor
A. B. Atkinson discusses Europe's rather loose system of
social policy co-ordination and its consequences: low poverty
in the Nordic countries, and higher ones in the UK, Ireland
and Southern Europe. There are therefore pressures for more
robust social protections, but in a globalising world there
are contrary pressures to reduce them so that Europe's tax
rates don't make its labour costs uncompetitive. Unfortunately,
employment on its own does not ensure escape from social
exclusion, as Munzi's and Smeeding's chapter shows.
The
heart of the book's argument is in Bowles' and Jayadev's
chapter, 'The Enforcement-Equality Trade-off'. They point
out that 'guard labour' (supervision, policing, prisons,
security personnel, etc.) costs money, and they show that
in unequal societies we need more of it. Importantly they
also show that there is more evidence for a correlation
between social inequality and the costs of guard labour
than there is for a trade-off between equality and economic
efficiency. They recommend that more resources should be
redistributed to the less well off to enable the costs of
guard labour to be reduced.
Artoni
and Casarico show that welfare states are insurance systems
and so are no different in principle from private insurance
schemes, with which their costs should be compared; Costabile
and Scazzieri show that the dollar's function as a reserve
currency explains US economic dominance, and that expanding
the euro area is the right European policy response and
reducing our social protections is not; Bettio and Plantenga
construct a typology for care work regimes in different
countries, particularly in relation to the labour market
participation of carers; Gustafson discusses continuities
and changes in the Swedish system ( - an important continuity
is the high level of gender equality); and D'Antoni and
Pagano discuss a Europe in which institutional integration
and the redistribution of wealth complements national and
regional diversity.
Costabile
sums up: 'Many versions of the "equality-Efficiency
trade-off" … do not survive closer scrutiny; …
abdication of the insurance function of the welfare state
produces efficiency losses in our second-best world; …
progressive redistributions may not entail efficiency losses
or higher costs because the alternative system of order
maintenance, namely disciplinary enforcement, is also costly;
… poverty rates are more closely related to the incidence
of low pay and low welfare state expenditures than they
are to unemployment rates [and] the objective of poverty
reduction can only be achieved by integrating full employment
policies with policies aimed at social inclusion; …
distributive policies … produce dynamic efficiency
gains if, by reducing poverty and inequality, they positively
influence the welfare the cognitive abilities of children
and hence human capital formation; … the under-provision
of [care] services acts as an 'inactivating influence' on
market participation and employment, particularly for women;
… economic arguments counsel in favour of an active
role for the EU in the definition of Europe's common social
ambitions; … social policies in Europe should incorporate
measures able to conjugate the objectives of equity and
efficiency ….' (pp.225-231). Costabile recommends a
social insurance / social assistance system for income maintenance.
A social insurance / Citizen's Income scheme would give
her more of both the equity and the efficiency which the
book shows to be compatible.
Fran
Bennett, Mike Brewer and Jonathan Shaw, Understanding
the Compliance Costs of Benefits and Tax Credits,
Institute for Fiscal Studies, 2009, 107 pp, pbk 1 903274
62 0, £40
The
authors describe their research project's aims:
This
report describes a scoping study to understand more about
the nature of the 'costs of compliance' that claimants of
social security benefits and (personal) tax credits incur,
and discusses possible ways of measuring such costs. 'Costs
of compliance' refers to the costs - time, money and psychological
costs - that are imposed on applicants for, and recipients
of, benefits and tax credits, and on others, by meeting
all the various requirements placed on them by social security
and tax credit law and statutory authorities. Our main purpose
in this report is to make the case for taking compliance
costs into account in considering the impact of, and changes
to, benefits and tax credits. (p.1)
The
report is limited in scope, in that it doesn't attempt to
measure compliance costs, but it performs a most useful
purpose: to explore 'the nature of the costs of compliance
for claimants of benefits and tax credits; assesses whether
such costs can be measured and, if so, to what extent; and
discusses whether impact assessments of policy changes could
include such measurements' (p.1).
The
chief method studied is the allocation of monetary value
to the time which employers and claimants expend on their
relationships with the tax and benefits system; but it's
not just claimants' time costs that the report discusses:
it also recognises 'stigma, hassle, intrusion, stress, worry,
fear … uncertainty' and 'conditionality' as costs.
Both quantitative and qualitative surveys and methods are
therefore relevant.
If
ever the Government undertakes a major review of income
maintenance provision in the UK - long overdue: Beveridge's
1942 report was the last time this happened - then this
report and the quantitative and qualitative surveys which
we hope will flow from it will be important evidence.
The
authors are right to suggest that a deeper understanding
of compliance costs would contribute to more accurate calculation
of the productivity of the benefits system, a better understanding
of the reasons for non-take-up of benefits, and improved
trust in government. We hope that the Government and others
will follow the report's recommendations, and we look forward
to seeing the outcomes of the research projects which will
be the result. We also very much look forward to seeing
the results of the current HMRC survey of the comparative
costs of applying for child benefit and child tax credits
(pp.42, 87). The evidence gathered will be useful to a future
review of the tax and benefits system, particularly if a
Citizen's Income is on its agenda.
Hugh
Bochel and Sue Duncan (eds), Making policy in theory
and practice, Policy Press, 2007, ix + 251, pp,
pbk, 1 861 349033, £24.99, hbk 1 861 349040, £65
In
the introduction to this important book by policy-makers
and academics, the editors review the history of theory
about policy-making, study recent changes in policy-making
(privatisation, audit, partnership, arms-length agencies,
evidence-based policies and the effects of multi-level government
and of Europeanisation), and then introduce the nine principles
of policy-making (drawn from a 1999 government paper) on
which the subsequent chapters are based, that is, that policy
should be forward-looking, outward-looking (with cross-national
policy learning), innovative, flexible and creative, evidence-based,
inclusive, joined-up, constantly reviewed, constantly evaluated,
and always learning lessons from experience.
Each
of the nine chapters is by a pair of authors: one a social
policy academic, the other involved in the policy-making
process. 'The views expressed in this book are the authors'
own and do not necessarily reflect those of their employers',
and there are places where a critical stance is taken in
relation to whether the Government has followed its own
nine principles (see, for instance, the discussion of the
Government's review of the Child Support Agency on pp.164ff).
The authors often take a critical look at the principles
on which their chapters are based, and the editors, in their
concluding chapter, discuss critically the principles and
the extent to which they can be put into practice. 'Given
that [the nine principles] have been a major plank in the
policy-making process for nearly a decade, it is perhaps
surprising that there has been little recent attention given,
either in civil service or academic literature, to refining
the nine elements of policy making' (p.214).
No,
actually it isn't. Policy is made by politicians, and not
by the civil servants and other officials listed as authors
(though they clearly have a filtering role and plenty of
influence); and politicians are driven by short-term electoral
considerations, the interests of influential stakeholders
(such as the Murdoch press), and their own interests, and
not by any set of principles, however worthy.
Reading
this book, you are left wondering why no serious attempt
has been made to reform the tax and benefits system in the
UK, and in particular to implement a Citizen's Income. A
Citizen's Income would serve well almost any conceivable
future economic and social configuration; it would learn
from experiments in Namibia and elsewhere and from universal
pensions in New Zealand and other countries; it would be
innovative, flexible and creative, and would enhance people's
ability to innovate, to work flexibly, and to be creative;
it would be evidence-based (Child Benefit is the evidence);
it would be inclusive (by definition); it would join up
the different stages of people's lives, employment transitions,
and many of the fissures in our society; it would be simple
to review and to evaluate; and it would learn lessons from
past experience (and particularly from the disincentive
effects of our current system).
The
reason it hasn't happened is that it's in no politician's
short-term electoral interests.
This
book is a thorough exploration of the social policy process
in terms of nine principles published in a Government paper,
and the many examples given show that the theory works well
in relation to clearly bounded policy areas - such as zero-tolerance
policing, driven partly by 'looking outwards' to New York
(pp.51ff) - where the parameters of the debate have already
been set by political interests. What it doesn't do is explain
major policy decisions (such as the invasion of Iraq: not
in the index) or major decisions not taken (Citizen's
Income). For these issues the final page is relevant: 'Ultimately
policy making is political' (p.217). Quite!
Everyone
involved in policy-making should read this book. It is well
researched and it really is related to policy-making practice.
Now what we need is a book by the politicians telling us
how policy is really made and why.
Valerie
Bryson, Gender and the politics of time, Policy
Press, 2007, vi + 222 pp, pbk, 1 861 347497, £24.99,
hbk 1 861 347503, £60
Our
awareness of time is socially constructed, and in modern
capitalist society we distinguish the 'clock time' of employment
from leisure time dedicated to consumption. The author's
resistance to this dominant time culture involves 'the assertion
of the value of time that is not measured by money, a time
that is neither committed to an employer nor simply set
aside for leisure or consumption. Such time responds to
human needs, whether these are to perform particular tasks
in however long this takes, or to care for and communicate
with others, or to build relationships' (p.33).
Free
time is a democratic resource, so it matters that a long-hours
employment culture and the disproportionate amount of time
spent by women on domestic and reproductive activities gives
women less free time for political activity than men, and
Bryson details recent government attempts in some countries
to require men to contribute to household tasks. Time is
a measure of welfare, and any measure of acceptable social
standards ought to include an assessment of how much free
time people have at their disposal.
The
author gives reasons for treating women as a collective
group with particular pressures on their time, and goes
on to question the public / private distinction often employed
in discussion of use of time because the distinction presupposes
men's needs and not women's. She asks that we value and
reward time spent on care rather than seeing it as a negative
constraint, that governments should legislate for limits
to time spent in employment, and that women should involve
themselves in politics - and particularly in Trades Unions
- in order to press for better work-family balance.
The
author asks whether women have a distinctive 'time culture':
that is, do they use their time in a distinctive way; and
she discusses policy options: for instance, paid parental
leave for men not only gives them more time to do caring
work but it also functions as a societal statement that
caring work belongs to men as well as to women. The detailed
list of policy options on p.184 contains some useful ideas
(such as that 'part-time employment should be treated as
normal for both men and women' and that 'employment policies
and pension entitlements should be based on the assumption
that workers will normally want to work short hours or to
take leave at various points in their life'), but it doesn't
recognise that changes to the tax and benefits system might
be needed in order to turn such ideas into practical policy.
We
do indeed need to 'reassert the value of time that cannot
be measured by the clock, the inescapability of natural
physical rhythms and the value of human relationships' (p.185),
and a Citizen's Income would, of course, be an important
contribution to making such an essential change.
Lars
Söderström, The Economics of Social Protection,
Edward Elgar, 2008, xi + 180, pp, hbk 1 847 202390, £49.95
Söderström
understands social protection as provision for consumption
needs when for various reasons (unemployment, illness, childhood,
old age) we cannot provide for them ourselves. A pooling
of resources is required, in the shorter term enabling those
in need to benefit, and in the longer term enabling all
of us to benefit during those periods of our lives during
which our productive capacities or opportunities don't match
our consumption needs.
In
chapter 1 the author discusses a variety of agents of social
protection: families, banks, insurance companies, mutual
societies, and the State; he explores problems relating
to insurance provision (exclusion of those with risks too
high to enable them to pay premiums, and adverse selection
caused by asymmetric information) and also problems relating
to charity (free riding); and he identifies government use
of tax revenues as legitimate and necessary as an additional
means of providing social protection.
Chapter
2 understands inequality as reflecting differences in choice
as well as in opportunities, as the result of previous choices,
and as the result of chance; chapter 3 discusses three understandings
of social justice, and helpfully relates them to the different
elements of inequality (p.50); chapter 4 discusses private
pension arrangements and proposes an alternative to insurance
provision: the purchase of interest-bearing bonds; chapter
5 compares Pay As You Go schemes with Capital Reserve (i.e.,
fully funded) schemes; chapter 6 uses simulations and a
lifecycle model to study how mandatory pensions affect aggregate
saving (and there is an interestingly topical study of student
loans); chapter 7 discusses income security during working
life (a combination of family, market and state provision
is found to be essential); and chapter 8 looks at benefits
in kind (for instance, public subsidisation of health care).
This
book will be of interest to anyone interested in the technical
detail of funding mechanisms, and those not so inclined
will still find plenty of thought-provoking material to
explore; but there are one or two basic assumptions which
readers might wish to question. For instance: Söderström
treats children as consumption choices made by adults (and,
significantly, when discussing life phases in the context
of pension provision he decides to reduce the life phases
from four to three by omitting childhood (p.61)). This understanding
of childhood, and the related concentration on pension provision,
compromises the stated lifecycle approach of the book. Similarly:
the cluster of income maintenance mechanisms is reduced
to three: insurance, family, and state, with state provision
restricted to filling gaps left by the other two. There
is little sense that other patterns might be Pareto optimal,
have low administrative costs, and be conducive to social
justice. (In general, too little account is taken of administrative
costs: an important frictional element in any social protection
provision.)
This
book is a treasure-trove of empirical data, theoretical
discussion, and practical application, and also as a useful
indicator of how much of Europe understands social protection.
John
Creedy, Pensions and Population Ageing, Edward
Elgar, 1998, xv + 239 pp, hbk 1 858 988020, £68
The
Pensions Commission has come and gone, and Adair Turner
has wondered publicly whether he ought to have been more
radical by recommending a higher basic state pension in
order to keep more pensioners out of means-testing. This
book might have been published ten years ago, but we are
reviewing it in this edition because it is even more relevant
now than it was then. It is a careful study of economic
models and their application to the problem of funding pensions
for an ageing population, and the lesson we draw from it
is that Turner should indeed have been much more radical.
The answer to the problem is not a larger contributory state
pension but a universal pension.
Chapter
1 is an introduction and outline and discusses the context:
reducing birthrate and increasing longevity, leading to
more elderly people dependent on fewer younger people. Chapter
2 employs economic models to explore population growth,
age structure, and social expenditure; chapter 3 uses Australia
as an example to discuss the effects on projections of assumptions
about real spending growth, productivity growth, unemployment,
and labour market participation rates; and chapter 4 shows
how immigration growth reduces considerably the proportion
of elderly people in the population.
In
chapter 5 Creedy begins his discussion of pensions and their
financing by studying the variety of options available to
governments; chapter 6 compares private savings and social
transfers using a complex model which takes account of increasing
longevity and changes in labour supply; chapter 7 studies
state schemes and the ability to contract out of them; and
chapter 8 finds that an earnings-related component creates
positive employment incentives and raises average earnings
compared to a flat-rate pension, but also that a flat-rate
pension scheme can achieve higher social utility curves.
Chapter 9 studies the wage-pension trade-off under a variety
of pension schemes and discovers a rather complex picture;
and chapter 10 begins the author's discussion of lifetime
simulation models and finds that means-tested and universal
systems result in similar lifetime inequalities, which means
that removing the complexity of means-testing would not
create greater inequality. Chapter 11 shows that means-tested
state pension systems are a relative disincentive to private
pension saving and that a universal scheme would make less
optimal the kind of working age behaviour which results
in lower retirement incomes. Similarly, chapter 12 finds
that a universal pension would make optimal a higher retirement
age than does a means-tested pension.
The
author's careful use of relatively simple economic models
builds a strong case for a universal pension. Given the
importance of pensions in relation to social welfare, employment
incentives, savings incentives, tax rates, and much else,
it really is essential that the work of the Pensions Commission
continues, and equally essential that this book is on its
members' reading list.
Susan
M. Hodgson and Zoe Irving (eds), Policy reconsidered,
Policy Press, 2007, vi + 250 pp, pbk, 1 861 349125, £24.99,
hbk 1 861 349132, £65
'What
is policy?' (p.22). It is with such fundamental questions
in mind that the diverse chapters of this book study both
social policy and the study of social policy, and it is
no accident that the very first page is not entirely clear
about which the book is supposed to be about.
How
the concept of 'policy' functions is a question central
both to the first chapter and to the book as a whole; and
also central to the book is the question as to how we should
understand the boundaries between political science, economics,
social policy (and administration), sociology, public policy,
urban studies, organisational studies, etc.. There is constant
interchange between the different disciplines as the authors
study both policy and the policy process.
Broad
policy directions are discussed (will the EU become a social
Europe or will it join a globalised race to the bottom?),
and there are discussions of the ways in which we categorise
people, of the politicisation of social policy, of the relationship
between business and policy-making, and of the way in which
international policy processes influence national processes.
The final section studies 'practices' and contains discussions
of the relationship between ethics, research, and policy,
of user involvement, and of the 'translation' of policy
from one context to another. The last chapter returns to
the fundamental questions with which the book begins, and
in particular asks what counts as social policy, what counts
as evidence, and what is legitimate method (for all evidence
and method is inevitably viewed from particular standpoints).
The final chapter returns to the beginning of the book in
another way too. It's about social policy and about the
study of social policy, and it isn't sufficiently clearly
structured to enable the reader to distinguish when it's
about one and when it's about the other.
This
is an edited collection and so treatments in successive
chapters are not always entirely consistent with each other,
but the authors are agreed that the meaning of every term
is negotiable and that boundaries are there to be crossed
( - so it's a bit of a surprise that the first two sections
of the book are labelled 'meanings' and 'politics': 'meanings'
and 'boundaries' would have been better).
Readers
of this Newsletter will be interested in the diagram
on page 4. 'Urban studies', 'criminology', 'housing studies',
'education studies' and 'health studies' appear. 'Income
maintenance', 'taxation' and 'benefits' don't; and it is
equally no surprise that the many good case studies in the
book are drawn from the fields in the diagram and discussion
of taxation and benefits is conspicuous by its absence.
Nevertheless,
this is a thought-provoking introduction to some important
questions related to both policy-making and to the study
of policy-making, and what's needed now is a study of tax
and benefits policy in the light of the questions and disciplines
contained in these chapters.
If
I were to choose just one discussion, then it would be that
of categorisation of people in chapter 4: 'The extent to
which any policy is able to reach its target population
and stated goals crucially depends on the appropriateness
of the categories chosen. Despite this, the political process
of categorising ensures that theoretical and conceptual
clarity are by no means central to the decisions made' (p.76).
After reading this book, reducing to one the number of categories
employed in the allocation of benefits looks like a really
good idea.
Steffen
Mau and Benjamin Veghte, Social Justice, Legitimacy and
the Welfare State, Ashgate, 2007, xviii + 264 pp,
hbk 0 754 649397 , £55
This
edited collection of conference and invited papers offers
a coherent, well-researched and detailed international picture
of public attitudes to social justice and the welfare state.
The chapters bear out the editors' view that 'the western
welfare state is not at risk of losing support or encountering
fundamental opposition … the state is still conceived
of as the major addressee for social needs and the management
of social risks' (p.12) and also that different attitudes
to the welfare state relate to different welfare regimes.
Encouragingly, the editors also find 'strong evidence for
the effects of people's own stake in the welfare state'
and that 'they also seem willing to contribute to the collective
good as long as the distribution of burdens and benefits
are regarded as just' (p.13). They suggest that plausible
and appealing concepts of social justice will be needed
to support the continuance of the social contracts on which
welfare states are based.
The
various authors have amassed evidence on the relationship
between social class and attitudes towards redistribution,
individuals' motives for supporting redistribution, cultural
differences in the notion of the 'deserving needy' and in
attitudes to redistribution towards the deserving needy,
public attitudes on the justice or otherwise of tax systems,
coherence between public attitudes and attitudes embodied
in social security systems, relationships between media
and political party attitudes and public opinion, why the
losers from globalisation have shifted their allegiance
from left-wing to right-wing parties (in Belgium and Israel),
factors relating to public attitudes to immigrants, and
the relationship between a society's welfare state type
and general levels of trust in that society. There is enough
evidence and discussion in these chapters to provide students
of welfare states with plenty of material for reflection
and further research projects.
Of
particular interest to readers of this Newsletter
will be chapter 6 on 'the moral economy of poverty', a study
of public attitudes to the German welfare state. 'The results
show a high degree of congruence between the norms institutionalised
in the German social assistance scheme and the attitudes
prevalent in the population …. Welfare recipients are
seen as deserving of support only when they comply with
the behavioural requirements (no self-inflicted poverty,
active cooperation) institutionalised in social assistance'
(p.137). But in which direction does the causality work?
Or is causality circular? If conditionality were to be removed
from the system, would public attitudes change? Further
research on this issue would be of interest.
In
their introduction the editors suggest that 'in their reform
attempts, politicians are advised to embrace both considerations
of financial sustainability and principles of social justice'
(p.13); but the evidence base in chapter 6 suggests that
the 'plausible and appealing concepts of social justice'
needed might be about conditionality and the exclusion of
those deemed undeserving. Might it not be the case that
a system based on unconditionality and inclusion could lead
to these notions becoming 'plausible and appealing concepts
of social justice'? Only thus, surely, will 'a durable,
legitimate welfare system able to address societal needs
and to safeguard …. vulnerable groups become possible'
(p.13).
Peter
Edelman, A Living Income for Every American
Amitai
Etzioni with Alex Platt, A Community-based Guaranteed
Income
Charles
Murray, Guaranteed Income as a Replacement for the Welfare
State
Michael
Opielka, The Feasibility of a Basic Income
Dalmer
D. Hoskins, Pension Crisis or Pension Rethink?
Avia
Spivak, The Rise in Uncertainty and Reforms of Social
Security Systems in Chile and Sweden
Frank
S. Bloch, Disability Benefit Reform and the Contract
for Income Support
Amir
Paz-Fuchs, The Contract for Income Support and Pensions
in the Modern Welfare State: Report and analysis of
the second workshop of the 'The Social Contract Revisited',
Oxford, 10-12 October 2007
All
the above are published by the Foundation for Law, Justice
and Society in collaboration with the Centre for Socio-Legal
Studies, University of Oxford.
In
our first edition for 2008 we published a report on a conference
held in October 2007 by the Foundation for Law, Justice
and Society at the University of Oxford. The conference's
title was The Social Contract Revisited: The Modern Welfare
State, and the Foundation has now published some of
the presentations and also a record and critical assessment
of the sessions.
Of
particular interest is Amitai Etzioni's A Community-based
Guaranteed Income (meaning here a Citizen's Income).
Etzioni suggests that we live on a variety of levels (individual,
local community, national community ….), that discussion
of a Citizen's Income needs to relate to all of them, and
that a community-based Citizen's Income could usefully complement
means-tested benefits. In his critical assessment of the
workshop, The Contract for Income Support and Pensions in
the Modern Welfare State, Amir Paz-Fuchs asks 'What is the
community and what are its boundaries?' (Paz-Fuchs, p.4),
and suggests that Van Parijs's argument for a Citizen's
Income on the basis of the real freedom which it would foster
is more coherent than Etzioni's argument on the basis of
our moral responsibility for each other in a community.
Also
of interest are Michael Opielka's The Feasibility of
a Basic Income and Charles Murray's Guaranteed Income
as a Replacement for the Welfare State. Opielka argues
that a wage-centred welfare state is becoming less relevant
and that increasing social inequality requires a solution.
He discusses a number of possibilities: negative income
tax, a Citizen's Income, a partial Citizen's Income, and
a Citizen's Income scheme in which someone could choose
a lower CI and a lower tax rate or a higher CI and a higher
tax rate. Transitional arrangements are discussed, and finally
a new category of welfare state: 'guarantism'.
Murray
recommends a Citizen's Income on the basis that it would
enable government to interfere less with people's lives
and that it might encourage labour market participation
by currently excluded groups, and he suggests that a Citizen's
Income should replace existing welfare states (and, in particular,
that people should pay their own compulsory health insurance
premiums out of their Citizen's Income).
At
the end of his critical assessment of the workshop Paz-Fuchs
lists the distinctions which our current welfare system
institutionalizes:
'
"deserving" versus "undeserving"; able-bodied
versus disabled; children versus adults versus elderly;
married versus non-married; and so forth. The idea of a
genuine basic income, discussion of which opened and closed
the workshop, discards these divisions. That is one of its
obvious appeals' (Paz-Fuchs, p.15).
Richard
E. Wagner, Fiscal Sociology and the Theory of Public
Finance: An Exploratory Essay, Edward Elgar, 2007,
x + 228 pp, hbk, 1 84720 246 8, £59.95
Every
science sets off from axioms: a set of unproven, and generally
unprovable, hypotheses. Since Adam Smith, neoclassical economic
science has set off from a hypothesis of perfect competition
in a free market in private property. This turns public
economics into a science based on market failure. Private
trades thus become the norm and government action in the
economy becomes non-normative. This is clearly nonsense
because without a functioning public square to create a
structure of security, contract law, education, and health,
private trades would become unreliable and economics as
we understand it would no longer adequately model the chaotic
situation which would ensue.
Richard
Wagner suggests a different starting point. There are various
ways in which we can generate orderly patterns of activity:
by individual trades in private property, by individuals
relating to each other through the collective property which
constitutes the state, and by relationships through property
held in common by members of an association. This view sees
government action as a particular realm of orderly action
and not as an interference in some other set of actions
regarded as normative.
Another
axiom which the author questions is the market equilibrium
which classical economic theory regards as normative. Wagner
suggests that if public economics is a facet of social theorising
(that is, if there is no clear boundary between economics
and polity) then change generated by conflict between different
social groups.becomes normative.
Following
two chapters which provide an overview of Wagner's approach,
the central chapters of the book understand society as constituted
by 'political enterprises' which compete with each other
for resources to enable them to undertake their chosen projects.
Chapter 7 then explores multiple levels of government and
the competing public squares which result.
The
final chapter understands taxation and government spending
as so complex that 'analytical coherence can be attained
only through massive simplification in some form' (p.181).
The theorems of traditional welfare economics represent
precisely such a simplification. In the real world, political
cultures and fiscal arrangements interact with each other
and, in particular, we can't package utility into leisure
and consumption as traditional labour market economics tries
to do.
'To
approach life through the organization of meaningful activity,
as against approaching it hedonistically through consumption,
is to seek to reconceptualise welfare in terms of the interesting
and challenging adventures that different systems of economic
order allow people to have during the course of their lives.
Such an alternative formulation would, of course, deny that
consumption is the end of economic activity, and would convert
consumption into a by-product concomitant of that activity.
A Society in which people are having interesting and creative
adventures will flourish, and what we call high consumption
will emerge as a by-product of the activities that flourishing
represents' (p.195)
If
how people relate to each other and the competencies they
are encouraged to develop are allowed to be factors in the
construction of welfare economics, then, says Wagner:
'A
system of designated accounts over which people have ownership
creates a relationship among equals. In contrast, existing
social security programs involve relationships of domination
and subordination, within which supplication becomes a standard
mode of conduct' (p.196)
This
is an important book.
©
Citizen's Income Trust, 2010
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