A continuation of David Craig’s conceptual analysis, which commenced in last week’s guest-post.

Some new and shifting elements in social development and the state/ society relations

In the previous post I suggested that the role of the state in relation to two core areas of the welfare state — decommodification of labour and provision of a social wage — had come under a kind of popular revision in recent years, wherein at least some kind of engagement with the labour market per se was seen as a kind of social good, a normative standard against which many NZers would like to see as many of us as possible measured (and rewarded). In consequence, state action in this and other areas needed to learn to work better with and around the market mechanism: not in a merely reactive way, but in a way that leveraged real market relations, market efficiency and market power in labour market relations. It needed too to reconsider what social relations might mean in relation to markets and the state, and whether in some different conceptions of society and the social (and even in notions like the UK Conservatives’ “Big Society”) are some other levers for producing better outcomes. This, NOT just by not by throwing in ‘local community’ as a substitute for a bigger picture of society as comprised of different groups, classes, families, individuals, all making their way together and separately.

Overall here I want to pursue this reconsideration of state-market- society relations a little more widely. James Purnell recently argued that a feature of progressive policy in this area in recent years has been a polarisation, wherein on the one hand the market (perhaps in the guise of ‘globalisation’, the ‘knowledge economy’ or marketised monetary policy and exchange rates) was seen as a kind of formidable unchallengeable arbiter, but where at the same time the state was seen as the preferred intervention mechanism, where intervention was seen as badly needed. Thirdwayism, I would suggest, will be remembered for being beholden to/ in awe of the market, and yet for falling back on the heavy hand of the state when it needed action. Some of this was captured early on in Tony Blair’s famous 1999 Chicago statement. There he argued,

“We are all coping with the same issues: achieving prosperity in a world of rapid economic and technological change; social stability in the face of changing family and community mores; a role for Government in an era where we have learnt Big Government doesn’t work, but no Government works even less.”

In response, he outlined “the new political agenda we stand for:

Financial prudence as the foundation of economic success. In Britain, we have eliminated the massive Budget deficit we inherited; put in new fiscal rules; granted Bank of England independence – and we’re proud of it.

On top of that foundation, there is a new economic role for Government. We don’t believe in laissez-faire. But the role is not picking winners, heavy handed intervention, old-style corporatism, but: education, skills, technology, small business entrepreneurship.

As the policy rolled out, the state’s roll was at first reinforced through heavy handed management and targeting, and then after 2003 thrown wide open by a swathe of hardly-thought-through communitarian and quasi-market solutions, which Brown felt he had to rein in. Now, under the Conservatives, the institutional pluralisation will continue, perhaps as an experiment, perhaps as something which is increasingly driven down privatisation pathways by a government urgent for ‘results’, and believing its own idealisations.

So, what now? Can we do better than that, and work some of these relations in more reasoned ways?

State, market, society: what scope for new policy relations?

Overall, the solutions seem to me to need robust understandings of the market, the social, the state, and the individual. We must throw in the community and local government there too, on the proviso that we try to remain really clear about what capabilities they can and can’t have!

To offer one starting point: a great deal of work in social aspects of health, child development, and its social and affective psychology in recent years has pointed to the intermediation of not just material wellbeing factors (these are crucial, and arguably depend on state mediation), but also to the intermediation of a range of social mechanisms operating more proximately to the person involved. Here, personal development and responsibility run head-on into big social factors like inequality.

The early family environment is one such area: another is early childhood education. In both cases, the wider social settings — inequality, work, housing — set big causal parameters, and require a solid understanding of what the state can and can’t do to make these aspects tractable. But there is also something much more subtle and close to home at work here. Here, care, stimulation and safety are seen as key, as useful and important whatever the socio-economic background — indeed, as the socio economic background worsens, these are seen as core bases of resilience, self control, and what gets called emotional (self-) regulation. Here the important discourses refer to early identification and intervention, as well as to the support of resilient, strength based parenting. Much of this MUST happen at at least arm’s length from the state per se.

Here is a (ok, pretty obvious) context of the social and security in which the state needs to be where big picture settings driving asset and income markets and security are established; but where closer in (and outside of abuse crisis) the social and individuals need distance and respect, while markets need some accessing (to say the least) but also some taming, in terms of their impact on family time, stress, etc. Hence again a background role for the state: enabling parents to care (though tax/ paid parental leave, etc), early childhood education, early intervention when things get out of hand… all until some kind of reengagement with the labour market  can be considered.

What happens inevitably in this kind of setting is a level of hybridization between state, community, market and family. Experience to here indicates that it’s really easy to set things up so these relations skew off in one direction or another. But too, that doing nothing is a recipe for missed opportunities.

Something that’s already happened is that these programming activities, which can be run by reliable professionals and scaled up from little or nothing, become a market activity and domain in their own right, and as such become a major real expression of the social contract in these settings. For all their social impact, they are liable, in other words, to capture by core market actors working in the name of community. Early intervention around children is one area the nanny state seems a bit more welcome: such interventions are popular for their talk about intervention, their aunty-style didacticism (in relation to ‘recalcitrant’ parents), their monitoring, their promotion of personal resilience and responsibility whatever the economic base, they can also represent and reinforce the wider hegemony of middle class perspectives and interests over the material wellbeing of the poor, and can come as a burden rather than as relief.

Clearly then there are risks and wins to be had here. I think we have to be prepared to explore, and I suggest that early childhood intervention and education is the place to consciously do it: with as much conscious, knowing participation of everyone (but especially families themselves) as possible.

A second area relates more directly to the labour market and its governing arrangements. Here is an area where a real social wage and real decommodification can be re-constructed, but only if it happens within a form of reconstituted market arrangements. I see real progress coming in gendered middle class dimensions of the labour market, in terms of family friendly workplace arrangements which can enable flexible juggling of work and family economies of time and place: lots of room here for active innovation, involving families themselves in shaping real decisions in workplaces and policy. A new policy compact in this area could come from an extended, active participatory policy process here, involving workers, employers, parents, children . . .

Beyond this, the basic issue of overall wage levels is much more thorny, especially at the bottom. There are legislative and institutional ways to strengthen the market power of workers (minimum wages, employment commissions): but pushing for a new social/ living wage compact will require a great deal more imagination: despite from the fact that, as the Australian experience indicates, everyone can emerge from such as winners. As I argued last time, people have come to trust, to some extent or another, the market to set some (but not other) parameters here. How to better leverage, then, issues like family and local living wages back into the agenda? Productivity is already a core element in workplace agreement discussions; but there is surely scope for these discussions to become more like substantive negotiations. A new and flexible tripartism in these areas would be quite an achievement: it might take some prompting from political/ state actors, but they would also need to know when to get out of the way.

A third area is the housing market. Simply here, income inequalities and tax arrangements have skewed market outcomes heavily in favour of the rich, undermining basic class social securities, and giving rise to all sorts of flow-on negatives: ghettoisation, undermining of local schools, and more, sending housing affordability tumbling while failing to reduce rents, at least in Auckland. There needs, simply, to be a new housing market compact hit upon. A part of this compact will no doubt be community sector housing providers : community housing trusts, complementing the state’s social housing roles, and, in some areas, replacing it. What the community sector genuinely does off here is a level of local engagement, much needed entrepreneurialism, and a responsive working relationship with tenets which can go a long way further than Housing NZ has been able to, for a range of reasons.

One step further will surely involve a revisiting of another state subsidy in the housing market, the accommodation supplement currently paid for low income families in housing they can’t quite afford. For a good while now, many on the left have regarded this simply as a subsidy to landlords, which worked in a classic subsidisation way to ensure higher rents all around: and thus add another driver to the housing market. Here is an area where a closer engagement with market actors and economics  needs to be a part of the solution: and by this I don’t mean the facile and largely failed supply-side economics of the kind that got us into the negative gearing/ asset ownership concentration mess we are in.  So far, we’ve seen a poor referencing of markets here, linked to a dull conception of possible state machinery.  The role of families as social actors in all this has been similarly restricted: if they can’t cut it in the ownership market, here’s  a non-capitalisable, bandaid  handout to help you be a tenant: which you hand on to your landlord, who will invest it in a way that will make sure you stay a tenant, too.

Room for improvement? Yes, but there’s no simple state or market fix here, to be sure!

Part three of “Reconceiving the welfare state” will be published next week. In the meantime, leave your thoughts and comments below.

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David Craig is senior lecturer in Sociology at the University of Auckland, where he teaches around the history and political economy/ sociology of liberalism; colonialism and development; and urban sociology. His previous posts for Policy Progress were State subsidisation of low wages and Reconceiving the welfare state (part one).