Welfare after work?

• Jurisdiction: Australia
• Author: O'Donnell, Anthony
• Date: 22 December 1999

How should we think about welfare states at the close of the twentieth century? Zygmunt Bauman's recent contributions to Arena Journal1 provide a useful starting point. Although he was primarily concerned with analysing the position of the new poor, and considered welfare state responses--actual or ideal--only in passing, he does raise as a radical solution to the crisis he analyses the prospect of some form of guaranteed basic income. Here I want to use Bauman's insights to look more closely at labour markets, households and social polarization, with particular reference to Australia, and how these link to debates on the future of welfare states. (2)

I.

Australia's welfare state is, like many others, undergoing a major rearrangement. It is true that some mean welfare states have become even meaner over the past decade (I am thinking here of Bill Clinton signing off on Republican legislation that undoes sixty years of welfare state development). More generally, however, welfare spending, while not expanding at the same rate as in the 1960s and 1970s, is not declining or in reverse in most western economies. This is not simply due to expanding target groups; where increases in spending can be discerned, these are often the result of increases in benefit rates or expanded conditions of entitlement and eligibility. Furthermore, many welfare states have become more, not less, efficient in lifting poor people out of poverty. (3)

This should direct our attention to thinking in more subtle ways about what welfare states do, which is, after all, important if we are looking to welfare state initiatives, such as a form of guaranteed income, to offer a potential way forward. In many ways, neo-liberal states have become more, not less, interventionist as they try to secure the conditions for the operation of market norms. Similarly, the state has not so much disengaged from social policy as redirected it toward certain ends to do with eliminating 'dependency', further commodifying the labour market, upgrading skills, fostering self-employment enterprises and so on. (4) With state activity in many ways enhanced, it is probably more helpful to begin analysis by asking 'what kind of welfare state?' rather than 'more or less welfare?'.

Social policy is also directive in the kind of structural adjustments currently being undertaken by many western economies. It does this as endless propaganda about high-tech futures and the information economy, creating the conditions that assign high priorities to and reward innovative technological developments. (5) This intersects with the new emphasis on 'human capital' necessary to implement these developments. For example, Labor MP Mark Latham's Civilising Global Capital: New Thinking for Australian Labor illustrates both these aspects. The classic social policy idea of citizenship is unashamedly harnessed to the information economy as he declares that 'the information age demands highly refined cognitive skills to unlock the full virtues of citizenship'. (6) Later, the 'full virtues' of citizenship are reconceived in terms of human capital: 'each of us as individuals plainly need [sic] to do more to advance our own interests--to study harder, to prepare and save more effectively for an uncertain future, to work smarter, to develop the competitive skills that deliver job security in an open economy'. (7)

Social policy today, then, is as much about the creation and sustenance of human capital as it is about the reactive management of an underclass. (8) This is perhaps the outcome of a shift that is associated with that period--the postwar 'long boom'--that saw the institutionalizing of what most international commentators would have in mind when they refer to 'the welfare state'. Put simply, it involved a move within social policy from putting the idle to work to putting them to spend, (9) and the imperative to spend in turn ensured commitment to waged labour.

This shift has been attributed, since Gramsci's commentary, to Henry Ford's peculiar genius. The conventional wisdom pre-World War I was that keeping labourers' wages low was the only way to inculcate the work ethic and ensure workplace discipline. But low wages led to a lack of effective demand and periodic crises of underconsumption, especially when linked to unprecedented growth in productive capacity. Ford linked higher productivity to higher wages and hence higher consumption, and the resulting work-and-spend economy headed off any meaningful rise in free time. (10) In reality, Ford's original rather puritan vision of a male worker governed by sobriety, savings and an early night did not last the distance. Rising wages gave workers access to an ever-widening range of pleasures. The other theorist of Fordism, Aldous Huxley, saw more clearly that narcotics, sexual promiscuity and media schlock were no real threat to modern industrial economies; rather, they were part of a highly successful form of social organisation that saw free time dominated by private consumption. (11)

The redistributive function of welfare states played a vital role in all this. The postwar boom was sustained in part by what Michael Aglietta refers to as 'the reconciliation of rapid increases in productivity with the growth of real income and with stability in its distribution'. (12) In this way the boom can be seen as based on a conjunction which seems anomalous given what went before and what has come after: the deskilling of labour conjoined with rising and secure wages. (13) In Australia, although couched in the rhetoric of a 'living wage', wage rises were similarly linked to the economy's capacity to pay, or to general productivity gains. It is only since the late 1980s that our wage-setting institutions have abandoned this, linking wage rises to the productivity of individual enterprises, breaking the solidaristic norm essential to Fordism and pinpointing not only the growth in real income but 'stability in its distribution'.

According to neo-classical economics, the conjunction that characterized the long boom now appears as a disjunction. Hence we have the now familiar prescriptions to pull these two aspects back into sync: the 'Clintonite' or 'Blairite' way of stressing education and human capital formation, with a highly skilled workforce justifying a high-wage labour market, versus the 'Thatcherite' path of increased wage competition that allows wages for the low-skilled to collapse to 'market clearing' level. This now appears as the only meaningful distinction between a technocratic left and a free-market right.

If collective bargaining procedures, especially those as centralized as Australia's, once allowed most white male workers and their households to piggyback on the wage rises secured by more powerful workers, wages and income trajectories today, for a variety of reasons, are becoming increasingly diverse. 'Diverse' here is simply an anodyne way of saying polarized, and the shift from the postwar order has been nicely summed up by a group of British commentators:

The children of factory workers who made 'labour saving' durables for the mass markets of the 1960s and the 1970s can find new roles in providing personal services for the middle classes, who represent themselves as 'work rich and time poor', in a world that is recreating the Victorian value of service without the inconvenience of live-in servants. (14) We don't see this so starkly in Australia--yet--as low pay, thanks to a range of institutional protections, is not as predominant here as in other anglophone countries. Evidence suggests that food preparation is the only area of household production that is commodified or outsourced on a regular and widespread basis.

II.

Confronted with a growing polarization of incomes and life chances, it is not surprising that 'two nations' or 'divided society' rhetoric, and the preoccupation with delineating clear internal divisions so characteristic of nineteenth-century social debate, has enjoyed a renaissance. This kind of analysis can be unhelpful for a number of reasons. Generalizations about an underclass of permanently excluded are always complicated by mobility in and out of lower income groups and what we know to be the transitory or episodic nature of much poverty. (15) Hence the delineation of clear divisions, while a useful rhetorical device, often ignores the fact that disparities of income, wealth and participation exist on a continuum. Further, to focus on those excluded from society--whether the bottom ten, twenty or thirty per cent--shifts attention from the very real disparities that exist in the remaining ninety, eighty or seventy per cent, losing sight of the very important debate over inequality more generally--including the obscene inequality that exists between the wealthiest few per cent and the rest. Does it make sense, analytically or conceptually, to say that the excluded are separated not only from society but from those processes responsible for their exclusion? (16) The value of Bauman's analysis is that he doesn't pretend that all is right within the realms of the non-excluded--the non-flawed consumers in his analysis. Instead, his very terms redirect our attention away from the excluded to the pathologies of society itself: in particular, the seductions of consumerism and the accompanying contours of risk and precariousness which he sees as infecting all strata. (17)

Some of the mechanisms driving the process of polarization can be briefly mentioned. On the one hand, the propagation of precarious employment relationships clearly suits the local strategies of capital as it seeks to maximize profits, and such strategies are enhanced by capital's new found mobility over the past two decades. But it would be mistaken to presume that only capital has reorganized or been transformed. The nature of labour has also changed, with a move from the labour of the hand toward a new high-tech economy. This...