Social Policy Whisperer: Renewing the Voluntary Sector in Australia - Part Two

Today delivers Part Two of Paul Smyth's presentation to the Dunstan Foundation's Addressing Homelessness Conference (@DonDunston). In this post Paul explores the ideologies that got us here, and what it will take for a new social policy perspective to rise from the ashes the  recent 'market led' approach. 


New Left

First the New Left thinking associated with people like Marcuse, Habermas, O’Connor and Offe expressed disillusionment with the failure of the welfare state to eliminate inequality. It applied band aids without eliminating causes, lulled the working class into false consciousness based on naïve beliefs in class harmony and never ending prosperity. A welfare state could never overcome these contradictions of capitalism. A truly Civil Society could only come with the abolition of private property and the end of the class system and so on. For the community sector this meant a new agenda based on the rejection of the welfare state and capitalism. The social dimension was found instead in the social movements of groups left outside of the post-war settlement: women, indigenous, people with disability, immigrants and so on. These became the face of the community sector, a civil society outside of the mainstream.

New right

The attack on the welfare state from the right by the Pinochets, Friedmans, Thatchers and Reagans needs no rehearsal here. The welfare state had stifled market freedoms with too much tax and regulation while welfare handouts had produced dependency.

In a perceptive commentary in the mid-1970s Claus Offe (1984) showed how the New Right flatly rejected the social policy principles of the Marshall tradition. Thus you cannot have ‘a separate and autonomous source of wellbeing which provides incomes and services as a right’. Market forces must prevail.

Their ‘ideal state of affairs’ Offe writes is a situation in which every citizen can take care of all of his or her needs through participation in market processes, and the inherent test of rationality of policy –making in the capitalist state is the extent to which it approximates this situation’ p. 138.  Interestingly Offe like every other commentator of the time thought this ideal wildly utopian.

Bringing society back in: a triadic model

This brief retrospect highlights the way that extreme ideologies of left and right replaced the balance of state, market and civil society achieved in the mid twentieth century. I would argue that the first challenge we face today is to develop a big picture account of social policy which reasserts the kind of balance achieved in the mid twentieth century.

By pushing the old left’s positive appraisal of individual freedom, markets and the welfare state off the agenda the New Left effectively reduced the social domain to a radical fringe of community groups. On the other hand the New Right’s reassertion of market individualism in opposition to a welfare state was founded on an ideal which negated the axial principle of social equality and with that the institutions of the welfare state and civil society dedicated to its realisation.

The academic case for this new beginning has been powerfully put by the US sociologist Margaret Somers (2008). In her book, Genealogies of Citizenship writes of the new ‘triadic model’ we will need to re-establish a better balance of power between the three sectors:

“My central claim is that ideal-typical democratic and socially inclusive citizenship regimes rest on a delicate balance of power among state, market and citizens in civil society…Disproportionate market power disrupts this carefully constructed balance…” p.1

Constructing and promoting such a triadic approach for Australia must be the priority task for those who want to close down the fire sale of civil society institutions in Australia. This fire sale is not just another exercise in efficiency a la the 1990s but an obviously ideologically driven exercise in undoing the balance between the sectors.

The triadic approach – lessons from South Australia

Once we get to work on the triadic approach we begin to realise just how limited our imaginations have been by that constant recasting of welfare sector reform in terms of neoclassical economics 101. What is needed now is a fundamental reappraisal of the contribution of all three sectors to achieving the society we want. This means reopening the question of the role of the Voluntary sector from the starting point not of neoclassical economics but rather social policy itself. Viewed from this perspective the current marketization agenda itself is quickly recognised as a utopia totally out of keeping with Australian history and potentially a danger to the poor.

The Australian social model along with New Zealand was the envy of the world in the latter nineteenth century. Albeit within a larger scenario of colonial invasion and dispossession of the indigenous peoples the settler communities nevertheless created an experiment in egalitarian living that attracted the attention of the world. It was most noted for its land reforms and industrial legislation which generated a social equality which struck European visitors as a form of socialism without doctrines. The workers it was said had become gentlemen in a society of equals (see A Metin). State and market were doing their job in the Workingman’s paradise but where did the community welfare sector fit in?

This is no place to review the history. What I want to do is show how out of step with the past is the radical liberal sell-out of our civil society organisations. Such an agenda had in fact been behind the Poor Law reforms in Britain in 1834. Its aim was to end the welfare that had previously been available charity in communities and restrict aid to those incarcerated in houses for the poor where husbands and wives were separated and people denied the vote. This was to end the age of entitlement and discipline the wider population to look only to the market for their livelihood.

The colonists in Australia hated the Poor Law. Rather than adopt that system they resolved that their communities should take responsibility for the welfare of their own members. What did that look like? How did it work?   South Australians need look no further than Penola. Someone told me recently that he had walked in the footsteps of Mary McKillop all the way from Portland in Victoria to Penola in a kind of pilgrimage. That walk had been the beginning of McKillop’s dream of inspiring the Catholic communities not to accept what was a kind of second class citizen status but to work together to ensure that all the kids had the education necessary to take their full place in society. Of course we can all multiply these stories of Australian communities accepting this responsibility to look out for one another and manage their own affairs. It gave rise to a feature of our national welfare system i.e. the strong tendency to want the work done through communities themselves rather than directly by governments.

If the radical liberalism of the Poor law spurred the growth of the voluntary sector it left a question mark over the role of government in welfare. Which was not to be answered until the middle of the twentieth century.   The question was raised with great clarity by another great South Australian reformer Catherine Helen Spence. At the first Australasian conference on charity in 1890 there was the view that government provision was not to be promoted because it ‘would shrink the field of voluntary endeavour. Spence introduced South Australia as ‘the only one of the Australian colonies where the most socialistic principle of the English legislation, the right of the destitute to claim shelter and food from public funds, still holds good’. Strip back the excesses of 1834, she said, and a Poor Law system adds great advantages to the charity model. Thus when government assumes overall responsibility for a mixed systems of state and voluntary relief the result will be cheaper, fairer (by ensuring all classes pay their share and distribute relief more equally and justly between recipients). It would also be more efficient, with a centralized system of inquiry and supervision. Moreover, while the alternative systems were meant to be voluntary, they relied heavily on state support. Spence concluded that while people might be ‘frightened at the mention of a poor law … a poor law properly managed was a very good thing’.

It was this very logic which led to Australia’s adoption of this kind of mixed economy of welfare following the Second World War. The old charitable system could never deliver on the kind of equality grounded in the social rights of citizenship which underpinned the new welfare state. No less than Don Dunstan spoke to this theme at the ACOSS annual conference in 1966 which had tellingly been rebadged as ‘Citizens as organizers and providers’ from the earlier ‘The e Voluntary Principle in Community Welfare’. Dunstan’s address concerned urban planning and emphasised that to be effective it had to draw on inputs from the communities themselves and not be left to technicians and local power elites. He was particularly concerned that in this work the voluntary agencies understood the fast changing realties o family life and not impose outdated conventions.

The different roles need different institutional designs

Hopefully these glimpses of our past attune us to the need a variety of organisational forms in the quest for a truly Civil Society. In their new book Markets Rights and Power in Australian Social Policy, Meagher and Goodwin (2015) show the extent to which this variety has been compromised across the social services and community sector through marketization. The good society they argue requires what I have been calling a triadic organisational model and, they argue the three different types of organisation require three different institutional logics.

Thus they observe how the market derives its legitimacy from the price mechanism, requires norms of self-interest and so on. The state’s legitimacy comes through democratic participation; it operates bureaucratically and has citizenship as the source its norms. The community sector’s legitimacy is based on trust and reciprocity; it is committed to community values as its source of authority and has group membership or solidarity as its norm. This is of course highly reminiscent of TH Marshall who also emphasised that these different logics extend to the types of roles and people needed for each sector to be effective.

There is of course a library of literature on the negative impacts of marketization on the capacity of government and community sector fulfilling their distinctive roles. People like McDonald, Marston and Chenoweth have documented extensively the erosion of professional social work standards by the inappropriate impositions of the market logics into the community sector.

For two decades policy making has been mesmerised by the market template for social service reform. But if we are indeed looking at a rebalancing of the roles of market state and civil society then we should be looking now for the new governance templates based on understandings of the distinctive contributions of each sector and working through the different institutional logics they require if each is to make its unique contribution. We should recall Tawney’s and Polanyi’s emphasis on the importance of intermediate social organisations in the makeup of a civil society and how these institutions themselves need to assume active responsibility for ensuring their members social contribution is of the highest standard.

Phoenix rising? What can be done

As we have seen, a social policy perspective on the role of the Voluntary Sector creates a very different scenario than does neoclassical economics 101.   The latter’s ideal of a society in which every citizen takes care of their needs through participation in market processes is seen to be as extreme a view as its opposite i.e. a society in which private property is abolished and all needs met via the state. So if what we need is a new triadic balance how can we get there?

As I observed earlier, in the 90s we might not have liked economic rationalism but realistically there was no alternative. The horizon for social reform had shrunk to zero. But today we do have a new horizon and it is there to which we should look if we want to imagine a new future for the Voluntary sector. Two years ago with John Buchanan of Sydney University I (2013) brought out the book Inclusive Growth in Australia which noted the new emphasis on Equality in policy thinking of the IMF, World Bank and the OECD. Something of a novelty at the time it has been quickly overtaken by the march of events. Across 2014 many in the sector were engaged with the C20 work on this agenda and around the world we see a gathering momentum from the Vatican to the new socialism across Latin America and so on. Closer to home a number of agencies are actively exploring the policy detail of an inclusive and environmentally sustainable policy agenda. Jenny Macklin for example is in the second year of an ALP root and branch renewal of social policy along these lines while the Labor think tank, the Chifley Institute is preparing a report looking more at the economic dimension. A ‘Common Action people’s Economic Alternative’ campaign has been launched in Sydney ; the Catholic Social Justice Council is exploring the Australian policy implications of Pope Francis’ teaching; while recently the ACTU, the BCA and ACOSS among others have announced their own policy summit in the absence of leadership from the national capital.

I don’t think we need a crystal ball to realise that we are indeed in a transition from the market extremism of the 90s towards a more balanced paradigm involving greater equality requiring a significant renewal of our social policies and their governance regimes.

Next steps

  • Inclusive growth emphasises social investment, universal services with a progressive loading for the most excluded groups. Social inclusion sought to conform individuals to the market. Inclusive growth seeks to conform the market to a society of equals. We need to position homelessness as an inclusive growth priority.
  • As Shelley Mallet said last year we do this by focussing not on containing and managing the problem of homelessness within the community sector but by addressing the wider responsibilities of the mixed economy and social services so that there will be no homeless problem in the first place
  • In pursuing the triadic approach serious work on the governance aspect needs to begin. Public policy research is often backward looking and absorbed in the pros and cons of marketization. Inclusive growth thinking must make a start in producing an entirely different governance models based on these different institutional logics
  • An agenda like this cannot be left to commissions of economists. We need one bold government in Australia to establish a Social Policy Commission alongside its Productivity Commission with equal and commensurate resourcing and authority.
  • Individual Agencies and sector alliances will have to make their own decisions in the period of transition. We are likely to see a community sector dividing between the genuine civil society agencies of the future ( e.g. in the spirit of the London Citizens group) and the mega for profits and others conformed to the marketised regime
  • Hopefully the inclusive growth agenda will call forth new alliances of agencies dedicated to and supported by government to reconstructing the role of civil society agencies in a twenty first century world.

This presentation was delivered at the Dunstan Foundation's Addressing Homelessness Conference.  

Posted by Sarah Toohey