ECONOMIC RATIONALISM, THE CHURCHES AND THE POLITICS OF WELFARE.

• Jurisdiction: Australia
• Author: Mendes, Philip
• Date: 01 January 1997

For over a decade, economic rationalist ideas have been dominant in Australian society.

Economic rationalists seek to undo the post-war Keynesian consensus on state intervention in the economy, a centralized arbitration system and high public expenditure on welfare, in favor of reducing government spending, lowering taxation and deregulating the economy - especially the labor market - from government controls. Economic rationalism represents a revival of the classical liberal ideas espoused by Hayek, Friedman and Smith - that is the belief in the perfectibility of the market.

Opponents of economic rationalism reiterate the importance of government intervention in the economy both to promote economic growth and stability, and to promote social equity via a fairer distribution of income.

These two groups fundamentally disagree not only on the legitimacy of state intervention in the economy, but also on the question of lobby group involvement in public policy debates.

The economic rationalists base their argument on what is known as public choice theory. Public choice theory argues that all individuals, whether in the public sector or the private sector, act in their own self-interest. Politicians seek to gain support, for example, by satisfying the demands of organized pressure groups at the expense of the common interest. The only constraint on this pursuit of self-interest is the market, which constrains the pursuit of the interests of pressure groups for the benefit of the consumer.(1)

Consequently, public theorists favor private rather than public provision of goods whenever possible. They believe in a slimmer, allegedly impartial state which will be unconstrained by the demands of obstructive interest groups. Arguments for efficiency should take precedence over alternative concepts such as equality of opportunity and social cohesion.(2)

Public choice theorists are particularly critical of welfare spending and welfare lobbies. They argue that the welfare state and its services operate in the interest of the well-paid social workers (the so-called "New Class") who administer them rather than in the interest of the disadvantaged consumers whom they are intended to serve. These producers of the welfare services (it is argued) have a vested interest in maintaining and expanding welfare programs that has little to do with alleviating poverty and far more to do with enriching themselves.(3)

Thus public choice theorists refute the case for government intervention and welfare programs, not by an analysis of the actual workings of the welfare state, but rather by arguing that income redistribution and welfare spending is inspired by powerful interest groups or "poverty pimps".(4) The broad implication of this argument is that groups concerned with welfare spending (often perjoratively labelled the "compassion industry") should be excluded as far as possible from public policy debates.

Critics of public choice theory reject the notion that private markets are inherently superior to public enterprises, or that there can or should be a strict boundary between the two modes of production. Instead, they emphasize the interdependence of the public and private sectors, and the importance of production for a wide range of purposes beyond individual financial gain.(5)

They also reject as simplistic the concept of public sector welfare producers exploiting the poor and disadvantaged for their own benefit. They argue that the "New Class" is not a real class, but simply a loose category of people who happen to oppose free market views, whether in the public or private sector.(6) Concern is expressed that the the intended exclusion of interest groups from policy debates may be an infringement of democratic processes.(7)

Another criticism is that advocates of economic rationalism also represent vested interests, and these interests are likely to gain directly from any withering or "rolling back of the welfare state. As noted by Brian Head, "Changing the rules always benefits some groups ... the market-liberal agenda for deregulation would most benefit transnational corporations and the speculative sectors of capital ... protection of wage earners' and welfare clients' interests would at best be accidental under conditions of generalised deregulation".(8)

Similarly, Hugh Emy argues that calls for "radical cuts to welfare, major cuts in taxation, even replacing the progressive tax scale by flat taxes, appeared to be arguments which favoured the rich and powerful at the expense of the poor".(9)

Overall, the public choice critique of the welfare state appears more concerned with legitimizing the "self-interest" of the powerful and the wealthy and deligitimizing the agendas of those groups who seek increased government spending, than with genuinely reducing the privileges of special interest groups.(10)

The case of the Church

This essay uses the debate over the merits of economic rationalism and the public/private divide to examine the role of the church in Australian social policy debates.

Over the past five years, churches as members of the welfare lobby have been amongst the most vigorous and (some would say) most effective critics of market economic rationalist agendas.

Yet, many critics of the church dispute the legitimacy of their interventions. One argument is that religion is a private affair, and that churches have no proper role in politics. Another argument based on public choice theory suggests that churches are part of a self-interested welfare lobby and so should be excluded from public debates on welfare spending.

A third argument broached by some internal church critics defends the right of the church to intervene on alleged matters of the faith such as abortion and euthanasia. However, they reject the legitimacy of broader social justice activities, claiming they are inspired by marxist ideology rather than by Christian teachings.

In response, church leaders point to their long history of social policy activism in Australia; the allegedly coherent set of Christian social teachings on which their interventions are based; and the central role of churches in the provision of non-government welfare services. They also reject the notion of religion as a private affair, and emphasize the importance of churches as public bodies contributing to debates in a democratic society.

This essay aims to analyze these competing viewpoints within a broader historical and political context. Part One will discuss the Christian social teachings on which church social justice activism has been based. Part Two will examine the long history of Australian church activism on social justice issues, and briefly discuss the current activities of Christian welfare lobby groups.

Part Three will consider two case studies of church social justice activism: the campaign against the Federal Liberal Party's proposed GST, and the ongoing campaign regarding the Kennett Government's privatization and gambling policies in Victoria.

Part Four will discuss attacks on church social justice interventions by political parties and right-wing lobby groups, and consider alternate arguments. Part Five will consider internal divisions within the church as reflected in the St. Vincent De Paul saga. Part Six will draw some conclusions about the legitimacy of church social justice interventions.

Part One: Christian Social Teaching

In opposing economic rationalism, the churches call upon a set of social teachings which emphasize the responsibility of government to redress structural poverty and inequality. The core principles of these teachings include:

- Each person possesses a fundamental dignity that comes from God, not from any human quality of accomplishment, not from race, gender, age or economic status;

- The principle of the Common Good which holds that individual rights should be adjudged within the context of promoting the Common Good. According to Pope John XXIII, the Common Good can be described as "the sum total of those conditions of social living, whereby people are enabled more fully and more readily to achieve their own perfection". Thus, Christian social teaching can be interpreted as requiring the State to actively intervene in the free market in order to promote a fair distribution of wealth.

- Common Good is closely linked with the principle of Solidarity which holds that individuals are responsible for the welfare of one another.

- The Universal Purpose of Goods principle affirms the right to hold private property, but also teaches that this right is not absolute: "It is subordinated to the right to common use, to the fact that goods are meant for everyone".

- According to the Preferential Option for the Poor, Christians are required to give priority to the poor and oppressed, and to support them in their struggles for justice.

- The Value of Work upholds the dignity of workers. Labour is granted priority over capital. Workers should have a right to belong to trade unions.(11)

Part Two: The History of Church Social Justice Activism

Australian churches have been actively involved in social policy debates since at least World War II.

Influenced by the War and the Great Depression, the Catholic Bishops decided in 1940 to publish an annual statement on social justice matters. The statements which reflected the Papal teachings of Rerum Novarum and Quadrangesimo Anno were intended to promote a fairer and more equitable society. Continuing until 1962, they covered such issues as a just family wage for workers, nationalization of industry and post war reconstruction, social security, full employment, socialization, and industrial relations. Each statement was circulated to over 100,000 church members.(12)

A number of churches were also involved in welfare lobby activities via membership of the State and Australian Councils of Social Service. They included the national welfare bodies of the Catholic, Anglican and Methodist Churches, and the...