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Neoliberal economics can't care for the disadvantaged


Sandel and Mirowski books

My underlying concern about the recent Federal Budget and the major parties’ economic and fiscal policies is with neoliberalism.

This includes privatisation, free trade, open markets, deregulation, and reduction in government spending i order to aid the private sector. We find neoliberalism in current political rhetoric mentioning the free market, small government, service delivery, privatisation, the end of the age of entitlement, etc.

Before the recent British election, a group of prominent counsellors, psychotherapists and academics argued that austerity cuts and neoliberal thinking among policymakers were having a profoundly disturbing effect on Britons’ psychological and emotional well-being. They said:

The past five years have seen a radical shift in the kinds of issues generating distress in our clients: increasing inequality and outright poverty, families forced to move against their wishes and, perhaps most important, benefits claimants (including disabled and ill people) and those seeking work being subjected to a quite new, intimidatory kind of disciplinary regime.

Neoliberalism presents some very real practical challenges for faith based non profit organisations in Australia, even if the situation is not as stark as in Britain. In particular, neoliberalism is changing the relationship between government, civil society and the market and sector boundaries are blurring and converging.

For example, the welfare state – traditionally the preserve of the State itself – has been extended through government outsourcing to secular and faith based not for profit and for profit organisations. Outsourcing can create real ethical dilemmas for faith based organisations. The old Commonwealth Employment Service (CES) was privatised more than 20 years ago.

The corruption, inefficiency, punishment and coercion within the current iteration – Job Services Australia – were highlighted in a Four Corners report earlier this year. It showed evidence of paternalism and punitive practices, including restricting the benefits paid to clients who failed to attend consecutive interviews when it was not their fault.

Under rare conditions, sanctions may be needed to change behaviour but should it be faith based wielding the stick? Surely the role of faith based agencies is to offer the promise of the carrot. Let the State take the risk and responsibility for wielding the stick.

It is just as alarming that market economics is intruding into funding models, for example with the involvement of for profit organisations.

In What Money Can’t Buy: The Moral Limits of Markets, Harvard Professor Michael Sandel asks whether the market is equipped to promote human dignity and the common good. Are services delivered by faith based organisations measured simply by value for money and efficiency, or by the quality of the outcome?

Will clients with complex intractable problems be properly serviced by the market? I believe the answer is a clear no.

Four Corners also reported on fraudulent practices among some Jobs Service providers, including faith based organisations, in the quest for greater profit and economic efficiencies. These clearly disadvantaged and disempowered their clients.

Two other recent Four Corners reports also expose the failure of the market to provide adequate care, to those with disabilities and Indigenous Australians. The drivers of failure, and examples of poor practice, in these sectors, are very similar to those mentioned in connection with Job Services Australia. The dynamics are the same: only the names, faces and sectors change.

When confronted with these market failures, political leaders avoid questioning fundamental political and economic assumptions. Instead they maintain that these failures and the subsequent corrective action are examples of the benefits of neoliberalism. Despite these very real negative impacts, neoliberalism seems impervious to critique, and with the tacit support of both major political parties, it seems it is here to stay for the foreseeable future.

In Never Let a Serious Crisis Go to Waste, Philip Mirowksi shows how neoliberalism came to be constructed and why, despite the ignominious collapse of the system in 2008, it has proved so hard to remove.

He cites ‘group think’, ‘cognitive dissonance which doesn’t challenge fundamental assumptions’, and ‘no strong alternative to neoliberalism’ as factors which bolster the intransigence of neoliberalism. We are, according to Mirowksi – and indeed Sandel – uncritical neoliberals.

Mirowksi is neither an economic fundamentalist nor a Marxist. He was highly critical of the Occupy Wall Street movement. His position is more nuanced and, while he challenges some of the fundamental assertions of neoliberalism, he also sees a few benefits.

I concur. If managed well, client directed funding – where clients are able to determine how their funding package is to employed for their benefit – may have the potential to elevate client/consumer empowerment and efficacy, thereby greatly enhancing human dignity. It’s also incumbent on faith based agencies to practise thrift in order to achieve the greater economic efficiencies that are needed to deliver a greater benefit for the common good.

Nevertheless we need credible alternatives to ‘group think’, an economics that pursues the common good including the good of the environment. This may seem idealistic, but globally there are many think tanks and other groups wrestling with this very issue. The New Economics Foundation is pursuing such a vision – an economics that works for both people and the planet. When are we going to admit that the emperor has no clothes and acknowledge that the market cannot be our Saviour?

Paul JensenPaul Jensen is CEO of Centacare for South West NSW, based in Wagga Wagga..



Topic tags: Paul Jensen, welfare, economics, neoliberalism, Federal Budget, Michael Sandel, Philip Mirowksi



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Existing comments

" We find neoliberalism in current political rhetoric mentioning the free market, small government, service delivery, privatisation, the end of the age of entitlement, etc." And we've seen it all before - this is the benefit of history. We know it will produce a fabulously wealthy and powerful elite, and a middle class, and an underclass. Go back to the heyday of liberalism and the glamorous and glittering life of the London wealthy. There are so many lovely picture books of the fashion and taste that wealth of the period created. Now go to this link and scroll down to the photographs - this was the same London at the same time. My grandmother was in that exact place, at that exact time, in an orphanage, because her father had died. We shouldn't forget how our lives improved thanks to the welfare state. http://www.newstatesman.com/culture/2015/03/spitalfields-nippers-show-east-end-welfare-state

Russell | 21 May 2015  

Young man, at the back of the class, with the dunces, you have your hand up. Do you have a question? Yes, sir: what, in heaven's name, is neoliberalism? The word is used a dozen times in this article, sometimes three times in one paragraph. The meaning is confused in the Australian context, by the fact that one political party uses the word liberal in its name. Surely, it is not beyond our creativity to invent another word or combination of words to mean the same thing. Whatever it is.

Frank | 22 May 2015  

For me the clincher in "neoliberalism" is the laissez-faire aspect. Leti it be, whatever happens, the market will sort things out. Which may be fine when you're talking about the price of iron ore, or but when you apply it to jobsearch agencies - obviously from this article it shows that the law of the jungle doesn't help unemployed people, and in migration policy, it means people die (someone else).

AURELIUS | 22 May 2015  

While I can sympathize with most of what Paul Jensen writes, to simply bash “neoliberalism” totally misses the real problem. Aristotle knew that without a moral order, no other order—political, social or economic—was possible. Western civilization was built on Christianity, yet every Western nation has abandoned Christian moral teachings. It’s even been decades since it was taught from the pulpit. A 2008 survey showed that youth homelessness was the fault of decades of changes including no-fault divorce and single parenting, yet the researchers found “Few would seriously want to reverse these social changes.” Yet it was precisely Christian moral teachings that caused a revolution in values which turned an underclass mired in poverty, drunkenness and prostitution, into teachers, policemen, and judges. And it was accomplished in one generation, without one cent of taxpayer’s money. The underclass was New York’s Irish, and the man who turned them around was John Joseph Hughes who became the first Catholic archbishop of New York. “How Dagger John Saved New York’s Irish”. http://www.city-journal.org/html/7_2_a2.html At present, all we do is create poverty with our Left Hand, and with our Right Hand say, “Look Lord, I’m wonderful, I’m helping the poor.” And that’s hypocrisy.

Ross Howard | 22 May 2015  

Ross Howard. You've hit the nail on the head. Western society might well cry out in an adaption of the words of that English country lad Billy Shakespeare's, Juliet, "My God! My God! Wherefore art thou my God?"

john frawley | 22 May 2015  

"A 2008 survey showed that youth homelessness was the fault of decades of changes including no-fault divorce and single parenting". Really? I suppose there were many people who's Dad was gassed in the war, and were brought up by single mothers, who didn't become homeless. On the other hand, we know that financial stress on people and relationships, tends to break up people and relationships. A good welfare state preserves families from the stresses of the capitalist business cycle, so we should look at improving our safety nets if we want to protect our families.

Russell | 22 May 2015  

What we need, I think, is the practice of a philosophy that makes human dignity of supreme importance, with all that implies for economic, political, educational and ecological practice. Respect, including self-respect, enables people to choose the good, to be self-giving and to aspire to virtue. Some philosophy that looks a lot like true Christianity, for example. If it means anything, the Incarnation means that. Neo -liberalism is closer to the law of the jungle, which values only survivors.

Joan Seymour | 22 May 2015  

I suppose neo-liberalism can be summed up in the phrase "greed is Good".

john ozanned | 22 May 2015  

Most of the improvements to the lives of "the working class" and the poor were brought about by the work of either secular thinkers or by those whose investigations and recommendations did not draw upon the authority of the Church for their power.

To point to the decline in belief in God as the major cause of societal failure is ignorant and simplistic. Religion has had both good and bad effects on the welfare of society. True, abandoning moral principle is always bad for society. But to claim that organised Christianity has always been on the side of right is just plain and obviously wrong.

Michael | 25 May 2015  

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