Changing work patterns in a just and sustainable society
1991 Keith Suter
It is a great honour to be invited to give the Inaugural Peace Trust Lecture. I would like to say how much I appreciate the compliment that I have been paid in being invited to deliver this Lecture.
The creation of the Peace Trust was one of Tasmania’s best contributions to 1986: International Year of Peace. Indeed, its creation illustrated one of the reasons why the UN conducts “international years“ they are a coat peg on which citizens can hang local initiatives whose beneficial impact will long outlast the year itself.
The topic selected is based on a new campaign being initiated, under the guidance of Stella Cornelius, by The Conflict Resolution Network (CRN) of the United Nations Association of Australia. The campaign is called Employment as if People Mattered.
The Conflict Resolution Network, incidentally, is not only engaged in the theory and practice of Conflict Resolution; it also turns its attention to specific problems of immediate urgency. Like all the rest of CRN’s work, this is an “open” campaign and it welcomes the participation of others.
The campaign’s overall intention is to refocus attention on the need to eliminate involuntary unemployment. That is a cumbersome phrase – and we are looking for a better one! But we wanted to avoid a campaign for “full employment”.
We are not saying that everyone should be forced to have a job – “full employment” by definition leaves no room for people to drop out of the paid workforce. Nursing mothers and people who can get by via living on communes or some other alternative lifestyle should not be press-ganged
‘into paid employment.
The Soviet Union, incidentally, until recently had a policy of “full employment” so that to be unemployed was to commit the crime of vagrancy. It is not our intention to endorse Soviet Union-type compulsion for people to join the paid workforce.
Additionally, everybody’s need for employment is not the same. “Full employment” conjures up images of a 40 hour (or 38 hour) week based on a 9.00am to 5.00pm schedule. Employment patterns in the future will be far more diverse than ever before.
Consequently, we are seeking a third way. We wish to avoid the current high level of unemployment, while also avoiding advocating Soviet Union- type directed labour policies.
We are at the beginning of this present campaign. We are still devising our strategy, looking for allies and seeking organizations with which we can form coalitions. We hope that this Lecture is an inducement to others to want to join this new partnership.
Unemployment and Peace
This Lecture is, then, the first major public airing of the campaign. It has come at an opportune time. 1 July 1991 has seen the introduction of initiatives by the Hawke Labor Government under the heading “Active Employment Strategy“. The Australian Council of Social Service (ACOSS) has claimed “The introduction of the Active Employment Strategy is the most dramatic change to income support and labour market program arrangements for unemployed people since World War II”(1).
Unemployment is a peace issue. First, there is more to “peace” than campaigning for multilateral disarmament at the international level.
Second, The tree of peace has its roots in justice. I have elsewhere commented on the ‘Triangle of Peace:
Unemployment is obviously a part of the “justice” side of the Triangle.
Unemployment is very discriminatory:
All age groups -have been hard hit by a scarcity of jobs, but none worse than the 15-19 age group. The national average for youth unemployment is currently 27 percent; a year ago it was 16 percent. Furthermore, this national figure does not reveal the magnitude of the problem in regional NSW cities such as Newcastle and , Wollongong where higher unemployment rates are prevalent 2.
Unemployment falls, then, disproportionately heavily on the young, female and Aboriginal.
Third, there is the issue of public acceptability of the “peace agenda”. Too often that agenda is perceived as basically an international one, with implications for Australian foreign policy. Attention to unemployment is one way of bringing the peace agenda back home.
Fourth, peace is obviously more than the absence of violence. The concept of “structural violence” has helped us understand that even without direct physical violence, a society may be indicting suffering on people. Is unemployment itself a form of structural violence? That may be debatable – it is certainly an example of “unpeaceful relationships“. But perhaps eventually peace researchers will accord unemployment the status of structural violence.
Finally, a society with high unemployment is not at “peace” – even with the narrow definition of “peace” as being “an absence of violence”. Unemployed people will feel alienated from mainstream society and will indulge in anti-social activities. Eliminating involuntary unemployment is an investment in a peaceful society.
The Campaign’s Components
The campaign has four components:
(i) a recognition that the reliance during the 1970s and 1980s on the “market” as the basic economic philosophy (often called “New Right” thinking) has been a failure.
(ii) the creation of a new paradigm in economics.
(iii) the recognition that the elimination of involuntary unemployment should have a much higher priority in economic, social and political thinking.
(iv) the creation of a set of specific proposals for eliminating involuntary unemployment.
It is evident from the ordering of this list that the campaign differs somewhat from other employment campaigns. Those campaigns fog; upon particular ideas for increasing employment opportunities. The CRN campaign welcomes many of those ideas and approaches those ideas from seeing the problem of unemployment in a wider perspective.
Much of the debate over the current level of unemployment is based on the assumption that Australia is going through a short-term slump in the business cycle. The CRN campaign is based upon the assumption that the world is undergoing a major upheaval and that completely new ideas are required: a new era requires new thinking.
Within Australia, then, ordinary jobs are disappearing. This is not simply a by-product of the recession – which will be overcome when the economy picks up again – but a jobless since the economy began its dive in late 1989, there emerges an important labour-market trend that could dominate the politics of recovery.
It appears that up to one third of all the jobs lost during that period can be classified as lost through the processes of micro-economic reform or industry restructuring.
That is, at least one third of the jobs lost have gone not so much because of the cyclical downturn in the economy-flowing from the Government’s macro-economic policies – particularly high interest rates – but because there are “permanent” losses of positions as both the public and private sectors struggle to become more efficient and productive.
Put bluntly, they are jobs that are gone forever.
Beyond the conspicuous and identified job losses in the public sector which have been marked as the result of the drive towards greater efficiency, there are many being lost in this recession which ultimately are the victims of reform but which the recession has brought forward by making redundancies expected and more acceptable.
There are also the‘ jobs lost indirectly in industries-serviced sectors in the process of being restructured 3.
Consequently, even as the economy begins to pick up, there will still be this permanent loss of jobs.
A second assumption of the CRN campaign is that there is no shortage of work to do. There is plenty of work to do, such as restoring the environment by tree-planting, building or improving roads, schools, hospitals and low-cost housing. There are services desperately required in health/areas, counselling, social welfare, the arts. The problem is one of generating the will to pay for it.
Third, the success of eliminating involuntary unemployment will depend upon all sectors playing their part, notably government, corporations, trades unions, non-governmental organisations (including churches) and individuals.
A final assumption is that if war is too serious to be left to generals, so recessions are too serious to be left to economists. Modern economics is particularly pernicious in its claims to be objective and “value free” – as befits its claims to be a “science”. This quest for objectivity has squeezed out considerations of justice from what used to be called “political economy”- This campaign is both an attempt to reclaim economics from esoteric economists and to reinject considerations of justice back into the subject.
The failure of the Market and “New Right” thinking
Economic thinking from the 19705 has been based on leaving problems to the “market”. This is often called “New Right” thinking. It began in western nations, as a reaction to post-war economic thinking of government intervention in the economy. It has now been copied in communist nations, such as Mr Gorbachev’s “perestroika”.
With “New Right” thinking being endorsed by such diverse leaders as Margaret Thatcher, Ronald Reagan, Bob Hawke, David Lange and Mikhail Gorbachev, it is perhaps heretical to claim that there is anything wrong with it. However, the first component of the CRN campaign is to urge a re-evaluation of it. Relying upon the market has certainly generated economic growth – but is it equally effective in distributing it? We believe not.
This section will make five points:
First, it will put the current debate over the market and the “New Right” in historical context – there is nothing new under the economic sun. In other words, economics has the same “swings of the pendulum” in fashion as many other aspects of society. Like any other fashions, the New Right is not necessarily here to stay. e challenge for us now is to devise an alternative.
Second, it will argue that the Christian Church needs to rediscover its role in the debate over economics. The Church can do this partly by becoming more involved in the campaign to eliminate involuntary unemployment.
Third “New Right” thinking has some advantages and these need to be acknowledged
Fourth. “New Right“ thinking also has considerable disadvantages — and these Intrinsic flaws are currently not receiving adequate recognition
Finally- there is a comment on the current trades unions controversy as an example of the limitations of “New Right” thinking.
Neither “New” nor “Right Wing”
Labels in politics are usually more a method of abuse than an aid to comprehension, The “New Right“ label is no exception.
“Left” and “Right” are the usual ways of identifying political parties and individuals. The diagram below shows how inadequate is that system of identifying the New Right.
Date Control Freedom
AD 300 Church
eg. Leviticus 19:11-17
1776 Adam Smith
1848 Karl Marx
1891 Rerum Novarum
1936 J M Keynes
1979 M Thatcher
Far Right Old Right New Right
Date Control Freedom
AD 300 Church
eg. Leviticus 19:11-17
1776 Adam Smith
1848 Karl Marx
1891 Rerum Novarum
1936 J M Keynes
1979 M Thatcher
Far Right Old Right New Right
Instead of a left-right spectrum, the diagram runs along a spectrum from total control to total freedom (though I am wary of using “total” absolutes in politics!) The use of control and freedom may be objected to on the grounds that “freedom” has good connotations and ‘control” has unpleasant ones; the labels, therefore, are not balanced. An alternative – but clumsier – way would be to distinguish between “control” and “non-control”.
I am open to suggestions on the labeling. The point I wish to convey is that this is a better way of trying to understand economic Philosophies than the traditional left/right division.
The Role of the Church
Turning to the diagram itself, the first interesting point is the role of the
Church. It is useless for people to argue that the Church should not get involved in the current economic debate. It was, in European terms, the trend-setter for many centuries! The Church was in there first and has had the longest influence of any economic theorist. Indeed, it has only been in the last two centuries that writing on economics has been done by non-ordained persons. Until about Adam Smith’s day, most economists were ordained.
What the first Christians understood (Acts 4: 32-37) is that the aim of any community should be to ensure that “none of their members is ever in want”. This coloured church thinking well into the Middle Ages Archbishop William Temple explained the grounds for the Church’s role in economics:
What now concerns us, however, is that from the very outset Christian faith found for itself social and economic expression. It did not at that stage take the form of a set of principles for the guidance of the State: the primitive Church was a handful of people quite unable to influence the Jewish State, let alone the Roman Empire. But as the Church grew it began to develop its own social philosophy. It could not fail to be influenced by_the Mosaic legislation, such as the Law of Jubilee (Leviticus 25) which is a piece of land-legislation of immense significance, and the prohibition of usury (Leviticus 25 and Deuteronomy 23). The growth of the Church led to the need for a statement of social principles for the guidance of its own members while they were a considerable though unrecognised and often persecuted minority, and later, when the Church was recognised and became a factor of influence in public life, for the guidance of the State.
The fundamental Biblical principle is that the earth – land – belongs to God; men enjoy the use of it, and this use may be so regulated as to ensure to particular families both security in that enjoyment and exclusive right to it. But this was to be so done as to ensure also that all members of the community shared in the enjoyment of some portion. There was to be no proletariat. There were thus to be rights of property, but they were rights shared by all, and were subject to the overruling consideration that God alone had ultimate ownership of the land, the families to whom it was allotted being His stewards. The Law of Jubilee, by which every fifty years alienated land reverted to its proper family, so that the permanent accumulation of a large estate in a single hand became impossible, rested on this basic principle of divine ownership.‘
The Church, therefore, should be placed in the above diagram towards the “control” end of the spectrum. It instituted, for example, the principle of the just price (as a way of stopping exploitation) and it forbade usury (the charging of interest for loans). As in the early Christian communities, the Church of the Middle Ages saw the Christian not merely as an individual but as part of a community – with rights and duties vis-a-vis that community- As such, the individual was not only to avoid exploiting others but was also expected to help the destitute.
The Church, incidentally. Not only set down the principles but it was also an important economic factor in its own right. Archaeologist Richard Hodges has written that “from an early date the Church was almost as economically motivated as the secular hierarchy”.5 The constant raids by Vikings on many British monasteries illustrate the immense wealth that had been collected by them by the ninth century. The Church acquired its wealth not only from weekly collections, but also from its own industrial enterprises. (such as glass making, tool-making for farmers, and jewellery)- If even occasionally issued its own coins.
The Rise Of the Market
The change in thinking began around the time of Britain’s industrial revolution and the development of the factory system of production. The °change is particularly identified with Adam Smith (1723-1790), a Scottish professor of philosophy (at a time when that discipline covered more topics than today) and whose main book was The Wealth of Nations published in 17766
The alternative shifts now from “control” to “freedom”. Instead of the Church imposing a set of ethics on a society’s economic activities, the market does the work. The overall direction of the economy was, then, left to the market. The government now had only a limited role in economics.
The market system consists of buyers wishing to exchange money for a product or service, coming into contact with sellers wishing to exchange products or services for money. The market is not necessarily confined to any particular geographical location. It is decentralised and impersonal; buyers and sellers are (at least in theory) concerned only to conduct their transactions, without regard to wider political or ethical concerns. In such a context, the role of the government is limited to such minimal functions as protecting individuals from invasion, theft and fraud and seeing to the enforcement of contracts.
Instead of central authority (church, government etc.) commanding a nation’s economy, the market is left to itself. For example,‘ there is the debate over how best to protect the world’s environment: government intervention or market forces:
The choice of who allocates resources is crucial. In The Wealth of Nations, Adam Smith compiled spectacular examples of government mismanagement and argued that the free market should be left alone to allocate resources. Markets alone, he reasoned, could assemble and convey essential information about scarcity and value. Prices and profits would work to maximise production and minimise resource use. Though over cutting of forest had already become an issue in England by 1776, when Smith published his classic book, he argued that market mechanisms were sufficient to protect forests. . Growing scarcity would drive up the price of wood, reduce consumption, as well as prompt landowners to” plant more trees in anticipation of higher prices. He could not have. predicted that acid rain would kill forests in Western Europe, or that the subsequent oversupply on the timber market would hold down prices. On the other hand, he might have felt vindicated by the price-induced energy conservation response in the West since 19.73, arguably the most significant conservation achievement of our time. The efficiency with which nations produce food and consume energy make useful indicators of their progress toward sustainability. Countries of all political stripes seek to avoid excessive dependence on food imports. Air and water pollution and land disruption are closely associated with agricultural production and energy-use efficiency. Thus, if market pricing and competition provide greater efficiency, both economists and environmentalists have a stake in the changing role of the market in the world’s economies 7.
The debate over the role of the market is one of the most important subjects in. economics (if not the most important). The market system, by same success rate in Smith, incidentally, was not as dogmatic as some of his adherents have implied. He was critical of some business practices and supported the creation of trades unions.
The Rise of Communism
Karl Marx (1818-1883) challenged this reliance on the market. His economic writings were only part of a wide-ranging theory of historical change. He was concerned with the history of class struggle which, by last century, was, he claimed, now between those classes who work to produce goods and those who own the land or machines used in this production. He identified the surplus value: a worker was active for a certain number of hours each day but was paid less than the total value of the goods produced – the surplus value being retained by the owner. Improved machinery meant greater production but not necessarily greater pay for the worker since the owner retained extra surplus value. Since the machinery led to unemployment, workers competing for jobs would be forced to accept low pay rather than no pay at all. Meanwhile, the constant competition of the market system keeps capitalists on their toes – and ever eager to take over competitors (and so, if possible, create monopolies). Marx predicted that the downtrodden workers and unemployed (the industrial reserve army) would eventually take the class struggle a step further and overthrow the owners. Meanwhile, the market system itself was being undermined by the concentration of capital in the hands of the people best able to compete in the market (who can then create monopolies and so disrupt the market).
Much of Marx’s work is heavy going and (in my view) not terribly helpful. what is significant, however, is that it seemed to offer an attractive alternative to the exploitation of the prevailing industrial system. The Communist Manifesto was published in 1848. It received a favourable response especially from workers and intellectuals.
The Catholic Church, which traditionally tended to draw its membership in industrialised nations from the working class, responded to the growth of communism by repeating its traditional teachings on economics. It could see communist groups recruiting from within its own members and so it explained how its views have always been against exploitation and provided an obligation to help other members of the community – rather than making a virtue out of selfishness. Pope Leo XIII’s Rerum Novarum encyclical letter on the conditions of the working class (1891) reminded Catholics of the Church’s traditional teachings on economic justice 8.
Incidentally, exactly a century later (May 1991) the current Pope issued an Encyclical Letter Centesimus Annus (“The 100th Year”) commemorating the 1891 encyclical. As The Catholic Weekly commented:
The Pope says the Marxist remedy has failed. The realities of marginalisation and exploitation remain in the world, especially the Third World, as does the reality of human alienation, especially in the more advanced countries. Those who hope that the Pope will give an endorsement of unrestrained capitalism in the light of the demise of communism will be disappointed in the encyclical.
Pope John Paul II points to the risk that radical capitalistic ideology could spread and result in us failing to face the problems of vast multitudes living in conditions of great material and moral poverty.
The Holy Father says that ownership of the means of production becomes unlawful when it merely seeks a profit and engages in illicit exploitation and breaks solidarity among working people.
Ownership of this kind, he says, has no justification and represents “an abuse in the sight of God and man”
Says the Pope: “The obligation to earn one’s bread by the sweat of one’s brow also presumes the right to do so. A society in which this right is systematically denied, in which economic policies not allow workers to reach satisfactory levels of employment, cannot be justified from an ethical point of view, nor can that society attain social peace.
The Holy Father’s words should be heeded by those who do not care that many people suffer the effects of unemployment in our society today 9 .
Twentieth Century Developments
This century has had three developments worth noting. The first was the Russian Revolution in 1917. Soviet leaders have claimed to be “Marxists” but there is a continuing debate between Marxist scholars as to whether the USSR is a communist nation or simply an amended version of Tsarist Russia. (Marxist critics of the USSR are sometimes called the New Left – the Old Left presumably being those who support the USSR).
The USSR is placed under the “control” end of the spectrum. If Mr Gorbachev’s “perestroika” bears fruit, then the USSR will slowly move towards the right-hand of the diagram.
The second development was Hitler’s coming to power in Germany in 1933. This had been included in this diagram to show how obfuscating it is to refer to the New Right as neo-nazi or neo-fascist. Hitler had a very large measure of control over his nation’s economy, which is why I have placed him almost in line with the USSR, which was then a totalitarian state.
The third development was the depression of the early 1930s and the ‘proposals of Iohn Meynard Keynes (1883-1946) of King’s College, Cambridge. He argued (for example in The General Theory of Employment, Interest and Money, 1936) that contrary to orthodox beliefs, the normal state of industrial society was not full employment but general unemployment. The market system may be efficient in this context in some respects but the government had to get involved once again in a nation’s economic affairs to stimulate the economy and boost employment. He did not advocate a complete takeover of the economy. When private enterprise was working well, it should be left alone. But the government should apply itself to those things which private enterprise was not doing. Public works programs were not new; Tudor England had them and later on Adam Smith approved of them. But Keynes went further; he advocated a greater intervention in the pace of economic activities (including printing extra money). History has long shown that one way to undermine a society is to debase the currency (“inflation”) and so governments aimed for balanced budgets. Keynes argued that a temporary inflation would stimulate economic activity and the extra money could be recouped when the economic revival was underway. All we stem governments now have economic strategies influenced by Keynes’ thinking.
Three “Rights “
To conclude, there are three “Rights”. The “Far Right”‘is a continuation of Hitler, traditional anti-semitism (in Australia this is now more anti-Asian), and support for South Africa’s apartheid; it is opposed to bankers, the UN, communism, the Trilateral Commission, the Club of Rome, and Henry Kissinger 10.
People who are abusive towards the New Right are often confusing it with this, the Far Right.
The Old Right are people who are sympathetic to the Church’s traditional teachings on economic justice and Rerum Novarum. For example,’I would regard B A Santamaria as a member of the Old Right, for example, because of his advocacy of workers participation in industry (derived from Rerum Novarum) and his criticisms of the spate of takeovers, speculations and excessive credit. He is not necessarily critical. of Adam Smith’s praise of individual entrepreneurship but he is of the current “system of monopoly, Oligopoly, conglomeration and financial anarchy” 11.
The New Right consists of people reacting partly against the revolution created by Keynes. It argues that governments have become too accustomed to inflation and will not take politically unpopular steps to reduce their level of expenditure. Inflation of late in western nations has not been quite so bad as it was in the mid-1970s. But that- it is partly because governments are getting around the problem of not printing extra money by borrowing. Inflation has been replaced by debt. But governments are still undermining the currency.
Some Advantages of the New Right
One advantage of the New Right is its attention on the over-involvement of government in a nation’s economic affairs. It is most likely that the extent of involvement (as a percentage of gross national product) is well in excess of what Keynes himself would have found acceptable. A politician standing for election was once told by an elector: “When you get to Canberra, don’t do anything for me: I can’t afford it.”
Second the New Right ‘focuses upon efficiency. Television comedy programs such as Yes Minister and Yes Prime Minister have argued that all is not well in Whitehall. Ex-civil servants have written books demonstrating that “many a true word is spoken in jest”.12 governments are not necessarily the best managers of economies – as even the USSR and China are now admitting. There is now, if anything, a trend more towards the “freedom” end of the spectrum in a growing number of countries.
Third, the New Right focuses on wealth creation. To a certain extent, the debate (such as it is) between the New Right and its critics is without a common language, or at least a common point of reference. The critics are concerned (with much justification in my view) about the distribution of wealth. But the market system was envisaged as a mechanism for wealth creation, rather than distribution. However, what the critics need to recognise is that it is pointless to talk about dividing up the cake – while ignoring how it is to be baked in the first place.
Some Disadvantages of the New Right
One disadvantage of the New Right is the assumption that each individual is a rational actor seeking to maximise self-gain. A virtue is made out of selfishness. This is a philosophy based on the “survival of the fittest” – do unto others before they get the chance to do it unto you. It erodes a sense of community since each person is out to exploit everyone else.
A second disadvantage is the question of who or what should set the overall pace and direction of economic activity. We should be far less reliant upon the impersonal market and should work for an economic system which can cover both wealth creation and wealth distribution.
Third, the New Right is an amalgam of views. The full agenda of the Libertarian strand of the New Right advocates the least possible amount of government intervention in a nation’s life. Thus these advocates oppose all government regulation over pornography, drugs, alcohol, abortion (a foetus is a “tenant” which the “land lady” can remove at will), and marriage. This is the extreme end of the New Right. But there is a question of where the line should be drawn between that extreme and the “mainstream” New Right.
The Current Trades Union Debate
Most of the attention focused on the New Right has arisen in the context of its criticisms of restrictive practices and other activities of trades unions. Trades unions certainly have a role to play but there are also abuses of power. Moreover, unions exist to protect their own members – not those of other unions, and not those of the unemployed, retired, or those not seeking paid work. (This is, of course, a departure from the early traditions of guilds which had a more philanthropic philosophy.)
However, I would like to make four observations about the current controversy. First, singling out trades unions as the blame for Australia’s economic woes, obscures the responsibility of management for the current crisis. The media’s attention on pay demands is not matched by equal attention to the pay rises senior managers pay themselves (including company directors in fees).
Second, a policy of trying to restrict trades union power is not in itself an economic strategy. There is more to a healthy economy than a weak trade union movement – otherwise many Latin American nations would be economic giants.
Third, low wages and long hours are not necessarily a guarantee of economic growth. If they were, Bangladesh, Botswana and Nigeria would be economic giants.
Finally, Winston Churchill, who was Chancellor of the Exchequer during the 1926 General Strike is reputed to have said “The stupidest men I had ever met were the coal union leaders – until I met the coal mine owners.” Management helps create the need for unions – if it were more sensible, then there would be less need for unions. Black & Decker in the UK has a good record for industrial relations. It would be interesting to see to what extent Australian companies operate on the lines of the UK corporation Black & Decker.
It operates from the conviction that all staff,from the highest to the humblest, should be treated as far as possible alike. In consequence:
- In each plant, there is one staff restaurant; everyone lunches there.
- Conditions of employment are roughly the same, and there’s only one life assurance scheme.
- Everyone gets the same percentage rise, paid on the same day.
- A set scale of notice ranges from six weeks after two years to thirteen weeks after five years (employees only need to give one week’s notice).
- General managers have their offices either literally in the middle of “ the factories, or very near the production lines, and personnel officers are available to deal with trouble on the spot and as it happens.
- An elected works committee meets at least once a month. The general manager chairs it; he tells his people about the company’s sales results (profit, for the whole UK company, is disclosed once a year), and discusses any problems or issues that are raised.
- The really important commitment, though, is to avoid redundancy at most, if not quite all, costs. Maintaining employment levels comes very high on the list of priorities – which gives extra urgency to finding new marketing opportunities, and to making managers go out and sell their output. 13
As at 1991, the economics profession is in disarray. The collapse of communism has proved only that communism has failed – not that capitalism is right. It is necessary to avoid throwing out the baby with the bath water. The Soviet Union, for all its faults, did aim at full employment. In its rush to endorse the market system of economics, it has lost sight of that principle. Meanwhile, the western economic boom of the 1980s has ended in unprecedented levels of debt.
In a deeper sense, economics has lost its sense of direction. Much of the debate is couched in terms of two, somewhat contrasting, paradigms: – the generation of wealth, especially via the market, with an overriding concern for efficiency and “rationalism”.
- the distribution of wealth, with an overriding concern for equity and assisting the poor.
Consequently, economic “debates” often lack a common language because some people are concerned with baking a larger cake, while others are more concerned with how the existing cake is to be divided.
Some conflict-resolving language, incidentally, would help these “debates”. The contrasting viewpoints should not see each other as “opponents” but rather as complementing each other. One viewpoint is focussing on short- term goals (dividing up the cake) while the other is more focussed on long- term goals (baking a bigger cake).
I believe that a third paradigm may be emerging from the concern over the environment:
- the continuation of wealth, with an emphasis on blending both environmentally-benign economic growth with the need for equity.
In other words, there has to be a new way of looking at, for example, biological resources. At present industries dealing with biological resources are not necessarily concerned with achieving long-term maximum sustainable yields,.but are only concerned with maximising the return of their capital. This is equally true of the clear- cutting of the tropical rainforests or the exhaustion of the soils on industrial farms. The emphasis is on immediate gain rather than long- term preservation. ‘ (- Exploring
A major contribution to this debate has come from the “Brundtland Report”. 14 Its title is interesting: Our Common Future. It is the latest in a line of “independent commissions” investigating international issues: the Brandt Report on foreign aid (Common Crisis) and the Palme Report on disarmament (Common Security). The recurring “common” is not accidental. It is a reply to the 1985 fashion of the New Right’s rugged individualism – and a call for a rediscovery of international co-operation based on a sense of international community.
The introspective 1970s were called the “Me Decade”. The 1980s were the “My Decade” (my yacht, my car etc). We need to make the 1990s the “Our Decade”.
The “Our Decade” partnership is not only between humans, but is also between humans and the environment. Humankind will last only if it puts the environment first.
For example Senator John Cotlter has called for a new approach to Gross Domestic Product (GDP):
GDP is the index used to measure growth; growth means a per cent increase in GDP year on year. GDP is the dollar value (after allowing T for inflation) of resources used up in each year. Moreover, GDP mixes costs with benefits. The costs of repairing environmental damage are added to GDP. Thus for both reasons the economy can grow as a direct result of environmental damage. When a home- bound spouse moves into the paid work-force and pays someone else to care for the children, something formerly done for no pay, that amount is added to GDP. That “growth” does not make us more . able to afford environmental protection. 15
Under this environmentally eccentric system, of accounting: the “best” Way for Tasmania to contribute to Australia’s GDP is to burn down Hobart as often as possible. Tasmania’s landscape would not have much to show or all this effort but it would employ undertakers, fire brigades, police officers, builders, architects and town planners – all of this work would contribute to the GDP!
But Sustainable Development is not an alternative to economic – just a more environmentally responsible way of looking at economics. As David Brooks has written:
Two key assumptions of conventional economics must go: The assumption of infinite supply of resources, which denies the laws of thermodynamics, and the assumption of unlimited human wants, which denies what we know of human nature.
- From the bottom-up perspective of the firm or the individual (micro economic), sustainable development insists on including all costs, and it accepts that there do exist areas that should be off-limits to developments and products and processes that are simply not acceptable on environmental or social grounds.
- From the top-down perspective of the whole economy (macroeconomics), sustainable development questions not merely the possibility but also the purported efficiency of continued economic growth, as defined by reference to such measures as GNP, and it insists that slow growth (possibly no growth) can, if appropriately directed and equitably shared, provide an even higher quality of life.
However, sustainable development does not deny the usefulness of markets for many purposes, nor does it put forward autarky as a goal. It is neither pro-Marxian nor anti-Marxian, pro-Keynesian nor anti-Keynesian, but rather draws from both. What it does deny is the possibility and the desirability of continually increasing what can be called the materials throughput of a society, of continually accumulating physical capital. Thus, sustainable development is an alternative economics; it is not an altemative to economics.“
Creating the political will
Australian society has various incentives for ending involuntary unemployment. First, as already noted, unemployment breeds alienation, despair and anti-social activities. An extreme “lesson of history” was provided in the Depression of the 1930s with the rise of Hitler, who was able to capitalise upon the extensive unemployed and disheartened Germans.
Second, a society with widespread unemployment is an unhappy place – even for people in paid employment. ‘Such people are troubled by both the rising crime rate and the fear in the back of their mind, that they, too, may join the ranks of the unemployed. Even if they may avoid unemployment, their relatives may become unemployed. ‘
A society with little unemployment gains benefit from consequent reductions in total unemployment payments, fewer law and order costs, and lower health costs_(in so far as health costs may be due to ill health induced by the unemployment of patients). In other words, government has to spend less.
Third, the tax_collected from newly employed will mean governments will gain more.
There are also incentives for separate sectors of the population for ending involuntary unemployment. In the case of politicians, this would help
restore trust in the political system.
For businesses, there would be a lift in consumer confidence and in numbers of people able to purchase goods and services. At a time when the community expects better business ethics, an involvement in the CRN campaign would be evidence of a company acting in a socially responsible way.
Trades unions would also benefit in a public relations sense by proving that they are concerned for society as a whole, not just for their own members.
Ideas for eliminating involuntary unemployment
There is no single key to eliminating involuntary unemployment. Nor is there any single sector of the community (government, business etc.) which can by itself solve this problem.
The ideas set out below are of a tentative nature. They will at least constitute a basis of discussion.
The major idea is the most basic: unemployment is not inevitable. We do not have to live with a high rate of unemployment. There is, unfortunately. a prevailing sense of doom and gloom underpinning a belief that unemployment is here to stay. Consequently, the CRN campaign is concerned to generate new ideas and publicise old ones.
Additionally, we need to ask: What can be done to make it more pleasant to employ people? Conversations with employers on this question Often include bitter comments about “red tape”, excessive regulations. and the advantages of machines over humans. This question cannot be answered easily but needs to be constantly in our minds.
In 1979 the Rev Ward Powers set out the following ideas – all of which are endorsed by the CRN campaign:
A More Flexible Working Week: Instead of a job having to entail 35 or 40 (or whatever) hours per week, much greater flexibility is built wide range of jobs they can get where this is possible. There me)’ be some jobs in the community where it is essential that the same worker be engaged on the same job for a given number of hours in a week; in a great many cases (right through from process workers and machinists to professional people like teachers, doctors, lawyers, etc) it would be quite feasible, and not really very difficult, to arrange shifts and times so that people could elect to work a shorter week if they chose. All that is needed here is a changed attitude on the part of those concerned (employers, employees, unions, governments). Obviously, remuneration would be proportional to time worked.
This would allow more workers to be employed without any -increase in cost to industry.
Changes in Payroll Tax, Workers, Compensation Insurance Premiums etc: Some changes would be necessary in some _aspects of taxation, industrial, and employment legislation to ensure that employers were not disadvantaged by employing more people than at present who on average worked fewer hours each (e.g. five employees who worked four days a week each instead of four employees working five days each).
Less Unemployment, and Lower Average Hours Worked: The above would lead to a trend in the community where (quite without any kind of coercion, but simply through enabling workers to have more control over the length of their working week, and giving encouragement to the spreading of available jobs over more workers) there was less unemployment, but where, there was a drop in average hours worked per employee. This would help redress the present imbalance where some people, who have a job, are increasingly well off at the expense of others, who do not. ‘ Increasing Leisure and Increasing Employment Opportunities: Increased leisure time would foster the growth in numerous tertiary areas including adult voluntary education courses, and cultural, recreational and sporting activities etc, and this would create additional employment opportunities.
Less Pressure, More Individual Choice, More Thought About Life: With all the foregoing there could be a lessening of the current pressure to produce more,spend more, and consume more. vice (instead of the two being, as at present, virtually regarded the other way around).
There would be less pressure also for the wasteful consumption of irreplaceable natural resources, and less pressure upon people to spend their lives simply in earning more money just to spend it on things to consume.
There would be less pressure towards both husband and wife having to go out to work – unless they both wanted to spend one half of the
week where each of them worked, for interest’s sake, so that they could both have leisure time together for the other half of the week.
There would be increased opportunity for people to have the leisure to reflect upon who they are, and why they are here, and what life is meant to be all about. 17
It is also necessary to review overtime practices. At the present time there are many situations where workers are pressured into working overtime whether they want to or not and many cases, of course, where workers do not want to. But if a few employees were not working overtime an extra worker could be engaged and there need be no change in production output. The outcome would be more leisure time for some workers; extra jobs available for some unemployed workers with an opportunity, not previously available, for the latter to be able to get an income. Special cases for overtime may be allowed when justified but would require special justification,
The matter of penalty rates for overtime is another consideration. If you remove penalty rates, employers will be more motivated to use overtime as part of their employment policy while employees will be more motivated to resist it. It would seem as though it would be preferable to address the validity of overtime as an issue separate to the rates of pay available for it.
It’s time that the Australian Government gave a higher priority to eliminating involuntary unemployment. Relying on the market (“New Right” thinking) has failed. It’s time for the government to implement more policies designed specifically to reduce unemployment.
One area of action is taxation reform. We propose the introduction of tax incentives to encourage individuals to employ people. For example, when a business employs (say) a yard sweeper, then the wages of that person are tax deductible for the business because the yard sweeper is helping the business operation. However, if a householder were to employ a yard sweeper, that person’s payment is not tax deductible for the householder even though the yard sweeper is doing this instead of the householder who is then free to use that time to earn taxable income. This type of tax reform will have at least two benefits. (1) increased opportunity for low-skilled people, those first to suffer and last to benefit, to find extra opportunities for part-time employment because of the incentive thereby given to potential employers; (2) a way of reducing the underground (“grey”) economy of cash payments which escape tax collection. Reforming the unemployment benefits system is not enough. We need new thinking on unemployment from the perspective that people matter.
In regard to additional opportunities, perhaps some form of community service could be introduced: community. service which recognise the needs of all people – young, old, male, female, non-English-speaking or disabled – to be needed. This would not be conscription or National Service. Incidentally, this proposal has the support of the Returned Services League.
Care has to be taken over the current “retraining” programs. ‘If there are no suitable jobs at the end of the training period, the new skills are unlikely to be used and then the training will have been wasted. The likely outcome of such a situation is the demoralisation of the re-trainees and all the consequences which flow from such a situation.
Perhaps more use could made of “sabbatical years”. These are a fixture of university life, thereby enabling academics to travel and to catch up on recent developments in their fields. This system could be used for the other parts of the work force. Sabbaticals at regular periods throughout working life could be utilised to provide the worker with average wages – possibly paid through the national taxation system which would tax all income earners. Such a system may be perceived as a national insurance scheme against unemployment. Thus the nation’s incomes fund would not change – but savings from unemployment benefits not required would ease the tax burden significantly, since much of the cost of the scheme is already being met and presently used to provide benefits to- the unemployed.
People should live as though they could die this evening (their affairs should always be in order) – and they should learn as if they‘ will live forever. The main task of schools, then, should be to inculcate a love of learning. Factual information can always be overtaken by fresh developments. But a desire to acquire and maintain an active mind will see a person keeping up to date.
Additionally, individuals should have the opportunity to return to educational institutions throughout their lives. Formal education should not stop when a person leaves school.
These two points seems so straightforward – and yet run contrary to so many of today’s educational policies!? The CRN campaign will have to address educational reform in the light of eliminating involuntary unemployment.
The mass media have still not addressed fully their social responsibility of reporting unemployment. They have at least stopped their “dole bludger” stories of a decade ago and are no longer so willing to blame the victim.
The media ought to give equal time to people producing ideas on eliminating involuntary unemployment. They ought to give more attention to presenting options – rather than just reporting on the doom and gloom of unemployment statistics. The media serve us very badly when they take the attitude, “Oh, we did unemployment last week”. On the other hand, the media have an enormous potential to keep this grave social injustice alive in our national consciousness.
Incidentally, a good e of how the mass media can be deployed is the way in which Newstart was so well publicised in July 1991.
NGOs are the vital source of fresh thinking in all issues. Some NGOs are already playing an active role, such as the Australian Council of Social Service.
Some churches have made notable contributions, such as the Brotherhood of St Laurence in Melbourne and all of those involved in Skill Share programs, such as Wesley Mission in Sydney.» But (as noted above) there is a great deal more than can be done for churches to recover the role they have had traditionally in the debate over economics.
Incidentally, other religious faiths do not seem to have been active in this issue. There are, for example, unemployed Jews, Moslems and Buddhists in Australia. Perhaps there is scope here for inter faith co-operation in campaigning for the elimination of involuntary unemployment.
When I was last in New York, I saw a bumper sticker: “If you’re hungry and unemployed, eat a greenie”. This illustrated the perceived tension between jobs and protecting the environment. As noted above, a new paradigm in economics ought to bring the two together in a new partnership.
A decade ago, there was an NGO called Environmentalists for Full Employment. EFFE argued that capital ear-marked for environmentally harmful or resource wasteful projects such as uranium mining or increasing electricity generating capacity could provide much more social benefit, and many more jobs, if invested in alternative environmentally sound activities. Instead of forestry industries using up their natural resource capital causing unemployment of forestry workers, EFFE believed attention should be given to sustained-yield forestry operations and replanting of marginal farmlands which would created expanded long-term employment opportunities. Another example is pollution control. The US Bureau of Labour Statistics estimated that each $1 billion spent on anti- pollution programs created 66,900 jobs. Environmental control related employment was one of the few job areas to expand during the recession in the US. A further area in Australia which could expand creating new employment opportunities was the manufacture and operation of public transport vehicles. In short, EFFE aimed to demonstrate that the path towards environmental harmony can also lead towards full employment.
With the lead up to the June 1992 UN Conference on Environment and Development, there is a need to find ways – as EFFE argued – of blending these two issues for mutual benefit.
To conclude, the CRN campaign is only beginning and ii welcomes the participation of everyone.
The campaign is a blend of:
Social justice: employment is a human right recognised by the UN;
rationality: eliminating involuntary unemployment cost effective for a society;
technical details: there is no single solution and so various ideas need to be implemented – and these involve at least economics, environment, accounting, sociology, politics and law.
There is, in short, plenty of scope for people of various-skills and talents to become involved. CRN invites people to take up those issues in: which they feel they have a role to play. This is a broad campaign. There is plenty of work for people to do in helping to eliminate involuntary unemployment.
(1) ACOSS Newstart: A Response to Plans for implementing of a Major New Scheme for Unemployed People, Sydney, May 1991,pl
(2) Damien Gleeson “The Severity of Unemployment” Journey (Brisbane), June 1991, p23.
(3) Laura’Tingle “Micro Reform, Macro Misery”,The Australian, 15 lune 1991.
(4) William Temple Christianity and Social Order London: SPCK 1976 (1942), p48. .
(5) Richard Hodges Dark Age Economics: The Origins of Towns and Trade AD600-1000 London: Duckworth, 1982, p55. t
(6) Adam Smith The Wealth of Nations London: Penguin, 1982 (1776).,
(7) William V Chandler The Changing Role of the Market in National Economies Washington‘ DC: Worldwatch Institute, 1986, p7. I
(8) Rerum Novarum: Encyclical Letter of Pope XIII on the Condition of the Working Classes London: Catholic Truth Society 1983 (1891).
(9) “A Century of Social Concern” The Catholic Weekly, 8 May 1991 (emphasis added). S
(10) For example: Gary Allen None Dare Call It Conspiracy Seal Beach, California: Concord, 1971. i
(11) B A Santamaria “Do We Know Where We Are Going?” The Australian 27 Iuly 1986, and “Political Paralysis Will End in National Atrophy” The Australian, 15 June 1991.
(12) Leslie Chapman Your ‘Disobedient Servant: The Continuing Story of Whitehall’s Overspending London: Penguin, 1978; Clive Ponting Whitehall: Tragedy and Farce London: Hamish Hamilton, 1986. .
(13) Robert Heller The Business of Success London: Sidgwick 8: Jackson, 1983, pp147-148. I ‘ I
(14) “World Commission on Environment and Development” Our Common Future Oxford: Oxford University Press, 1987.
(15) John Coulter “Economy, Envlronment The Australian Fiancial Review, 22 August 1989.
(16) David B Brooks “Sustainable Development. Easy Slogan or Difficult Choice?” The Human Economy Newsletter (Mankato University MN), March 1989, p5.
St t University,
(17) B Ward Powers “Unemployment – Its Source and Its Solution” AGAPE Notes (available from: 259A Trafalgar Street Petersham NSW 049), May 1979, pp5-6.