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Review by Steven Schwartz

States of Health: Health and Illness in Australia (3rd ed)
by Janet George and Alan Davis
Longman, Sydney, 1998, 507pp, $39.95, ISBN 0 58281 014 0 and

Economics and Australian Health Policy
edited by Gavin Mooney and Richard Scotton
Allen & Unwin, Sydney, 1998, 309pp, $35.00, ISBN 1 86448 749 6

According to opinion polls, Australians place a high value on Medicare and State-funded public hospitals. So, in their public utterances at least, does the present Liberal government and its Labor opposition. Yet, both Medicare and the public hospital system are struggling to meet patient needs while controlling spending. As a consequence, health care has become one of the nationÕs most pressing public policy issues.

Australia is not unique. The public financing of health care has become a leading political issue in Canada, much of South America, and in the United States. In Canada, despite a National Health Act that expressly forbids charges for Ômedically necessary servicesÕ, private health spending now makes up 31 per cent of total health expenditures. For-profit referral services routinely arrange for patients to travel to the United States for surgery, and doctors are leaving Canada in droves for more lucrative careers south of the border. In Chile, Colombia, Peru, Argentina, and Brazil, British-style national health systems are being dismantled and privatised. In Australia, policy makers are wondering how to cope with the health requirements of an ageing population, the never-ending demand for health care, and the explosion of new drugs and technologies. Unfortunately, they will find little assistance in States of Health: Health and Illness in Australia. This book, by Janet George (of the Department of Social Work, Social Policy and Sociology at the University of Sydney) and the late Alan Davis, is described by its publisher as Ôthe most authoritative text on the sociology of health in Australia today.Õ As you might expect from a sociology textbook, the authors devote most of their text to the social definitions of health and illness, the historical development of modern health beliefs and practices, and a mix of topics ranging from Ôdilemmas in modern nursingÕ to Ôwork and its hazards.Õ Because the book surveys a large field, it can only give limited attention to health finance. Still, the topic does come up from time-to-time. For example, the authors argue that State-provided finance is better than private market-based finance because it improves ÔaccountabilityÕ (surely, a world ÔfirstÕ, if true). They also call for less emphasis on curing people who are sick and more prominence for publicly-funded prevention and public health programs. The force of both these arguments is blunted, however, by their jaundiced view of government health bureaucrats.

In contrast to the textbook by George and Davies, Economics and Australian Health Policy, Gavin Mooney from the University of Sydney and Richard Scotton have edited a book entirely devoted to the economic aspects of health in Australia. As with most edited volumes, the contributions are of uneven quality and there is considerable repetition across chapters. Although the contributors take a variety of perspectives, most appear to believe that Medicare is fundamentally sound and that government should continue to play the dominant role in providing health funding. = The authorsÕ suspicion of the private sector may be at least partly justified by the mess that their publisher has made in producing this book. Half the front matter (including the Table of Contents) and every second page of the first chapter were missing from my review copy. To compound these already serious problems, the editors, themselves, have done an amateurish job. Numerous page references are missing from the subject index, data are inconsistent across chapters, and sources cited in the text are omitted from the reference lists.

Because of the missing pages, I cannot tell you what chapter one is about. The rest of the book contains useful reviews about how the Australian health system is organised (or, with 60 Commonwealth health programs and numerous State-Federal boundary disputes, disorganised is probably a better description). J.R.G. ButlerÕs review of health expenditures is a particularly valuable summary of where our health dollars go. Similarly, the book contains good reviews of hospital costs (Stephen Duckett), pharmaceutical expenditures (Glenn Salkeld, Andrew Mitchell, and Suzanne Hill), aged care arrangements (Anna Howe), and health insurance (Helen Owens). Public health in general, and the health of indigenous Australians are also carefully analysed.

All of the authors who mention finance, with the possible exception of Jeff Richardson, seem to take for granted that Australia should strive to spend as little as possible on health. They seem to see health care expenditure as a drain on society, like pollution.Growth in other parts of the economy (the wine industry, to take a favourite of most academics) is good, but growth in the health industry is bad. The high expenditure on health care in the USA is singled out by several authors (and by George and Davies in their book) as an example of how ÔbadÕ things can get when health expenditures are not tightly controlled by the state. This view is puzzling.

It is true that American expenditures on health are the highest in the world, both in absolute terms and as a proportion of gross domestic product. These high expenditures are partly the result of the enormous amount of clinical research taking place in American teaching hospitals (which inflates their patient care costs), the high salaries paid to medical specialists, the cost of widely disseminated new technology and pharmaceuticals, the availability of Ôsuper-specialtyÕ doctors and treatments, and an excess of supply which eliminates any need for surgical queues. Australian health expenditures are lower because we do less clinical research, pay doctors less, actively inhibit the dissemination of technology, slow down the introduction of new drugs, forego some super-specialities, and limit hospital supply, which forces people to wait in queues for surgery. These are social choices which have been made differently in these two societies. As Jeff Richardson points out in his clearly-written and carefully-reasoned chapter on health care financing, expenditures are neither good nor bad in themselves. If people value health care more than designer jeans, then they should allocate their spending accordingly. Of course, we would prefer resources to be allocated efficiently rather than wasted. But, the main point is that increased spending on health can have the same beneficial macroeconomic effects as increased spending on new cars or on anything else.

As for health care policyøwhat to do about our present financial arrangements, if anythingøRichardson opts for the elimination of structural inefficiencies through Ôcoordinated careÕ and, perhaps, some version of managed care (or Ômanaged competitionÕ as Scotton calls it in his chapter). If coordinated care means rationalising the plethora of different and overlapping government health programs, then who could argue with it? Still, a lot depends on how the coordination is done. A coordinating agent who brings together the various resources needed for a patient could improve both health outcomes and efficiency. On the other hand, multi-specialty ÔcoordinatedÕ clinics are often more costly than single-disease organisations. Indeed, Regina Herzlinger of Harvard University, has argued in her book, Market-Driven Health Care, that Ôfocused factoriesÕ (asthma clinics, hip replacement centres) are more efficient and have better health outcomes than vertically-integrated multi-specialty clinics.

Both Richardson and Scotton worry about market approaches to health care financing because patients (customers) lack necessary knowledge about health. This places them in a weak position relative to health providers. (Most people go to the doctor and take any advice she offers.) Apparently, this imbalance in information only applies to medical doctors; neither author advocates bringing naturopaths, homoeopaths, iridologists, and other alternative health care providers under the government umbrella. With these providers, itÕs caveat emptor.

ScottonÕs approach to consumer empowerment, and the creation of a quasi market through managed competition, redresses the knowledge imbalance between doctors and their patients by inserting a purchaser-manager-coordinator between doctors and patients. Medicare funds would go to this intermediary who would have the knowledge and skills to purchase cost-effective health care on behalf of consumers, and the clout to get good prices. By having several purchasers compete we could have a quasi market in which the participants are equal. If we assume that consumers really are incapable of making intelligent health care decisions, then this is a suggestion worth pursuingøprovided the purchasers are free to compete. In the USA, where laws are being passed to regulate what type and level of services must be provided by Health Maintenance Organisations, these companies are finding it hard to control their costs. The end result could be an expensive set of purchasing companies driving up costs with meddling politicians ensuring that there is no change to the current inefficiencies and misallocations of resources. A far better approach is to use Medical Savings Accounts and market forces to limit the moral hazard that exists in the present open-ended, first-dollar, government-funded, Medicare scheme. Alas, none of the authors in this edited volume even wish to consider such a suggestion.

Review by Robert Clark

The Great Disruption: Human Nature and the Reconstitution of Social Order
by Francis Fukuyama
Free Press, New York, 1999, 354pp, US$26.00, ISBN 0 684 84530 X

FukuyamaÕs latest book is a modern approach to the ages-old debate between moral values and moral relativism.

It is not a book of abstract philosophy. Rather, it marshals the findings and methodologies of disciplines including sociology, genetics, management theory, anthropology, law, economics, psychology, criminology, demography, and politics.

FukuyamaÕs bottom line is that all this shows there is a continuing rational, biological and evolutionary role for moral norms, including many (but not all) of the norms that prevailed in Western societies prior to the 1960s.

Fukuyama contends that, starting in the 1960s, there has been a radical change for the worse, a ÔGreat DisruptionÕ, in social values and conduct in Western societies, and that this change is Ôintimately connectedÕ with the shift from the industrial era to an Ôinformation era.Õ

Around the Western world, as Fukuyama demonstrates with a vast array of statistical citations, there have been rising crime, falling fertility and marriage rates, rising divorce and illegitimacy rates, and a shrinking circle of trust. These factors have had an adverse impact on social relatedness, educational outcomes, child raising, support for the elderly and neighbourhood life.

This Great Disruption was not caused by poverty or income inequality, or conversely by growing wealth. Policing and welfare policies may have had some effect, but they are not a full explanation. A cultural shift is part of the explanation, but it does not explain the timing and speed of the disruption.

Explanations of crime such as urbanisation, ethnic minorities, and (save in relation to child abuse) family breakdown are also rejected. Cultural differences between societies may go to timing, but do not prevent change in the long run.

Further, the Great Disruption could not have been prevented by government programs, nor by Ôhectoring and appeals to the right sorts of valuesÕ regardless of economic incentives.

Rather, just as the Industrial Revolution broke up the norms of the tightly knit community (gemeinschaft) and led to the development of the more formal and impersonal rules of society (gesellschaft) [pp.8-9], so it has been the Ôcreative destructionÕ needed in the current information era which has dramatically disrupted social relationships.

A society built around information tends to produce more freedom and more equality, and to cause political and corporate hierarchies to crumble. Individualism, needed in the marketplace and laboratory, has corroded authority and weakened the bonds holding families, neighbourhoods and communities together.

As well, the changing nature of work has substituted mental for physical labour, propelling women into the workforce and undermining the traditional understandings on which the family was based. Birth control and increasing longevity have diminished the role of reproduction and family in peopleÕs lives.

However, human beings are by nature social and political creatures. Our most basic drives and instincts lead us to create moral rules that bind us together in communities. If our rules are disrupted by external events, we will over time create new ones.

We can do this both rationally and ÔarationallyÕ, and both spontaneously in the course of the myriad interactions of individuals, and hierarchically through governments and religions.

In terms of spontaneously generated rules, recent developments in game theory show that, if people have opportunities for repeated dealings, and especially if information about a personÕs past conduct can circulate to others, there is a benefit for people to have a reputation for honouring their obligations. It can also be rational for people to be altruistic to others, in the expectation that others will be altruistic to them at some other time.

Given this, there is a logical basis for humans to develop in the course of their dealings with one another all sorts of informal rules and protocols governing their interrelationships and dealings, including ones which define the ÔaltruisticÕ obligations which others can be expected to honour.

In addition, rules and norms can have value as Ôrules of thumbÕ which reduce decision-making costs. (ÔNever buy on impulseÕ may cost you the occasional bargain, but give you better shopping results in the long run.)

New research in evolution and biology is also showing that the human mind at birth is not just a blank slate waiting to be filled up with whatever norms are put into it during life. Rather, it comes with specific inclinations and skills oriented towards social interaction, derived from years of evolution.

Thus, contrary to the assertions of relativist philosophy, Ôthere is, in other words, such a thing as human nature.Õ

What does this human nature consist of? It includes a propensity to favour close kin, but it also includes instincts and cognitive skills that reinforce mutually beneficial co-operative behaviour even amongst strangers, and help distinguish honest and dishonest behaviour in others.

Emotions regarding norms, such as guilt, anger, pride and shame, are evolutionary equivalents to maxims such as Ônever buy on impulseÕøthey avoid the need for complex case by case decision-making regarding behaviour, by reinforcing the long run rational interests of people in having themselves and others comply with social norms. Hence, for example, the passion with which people can want to see justice done and the law upheld, even though the case in question has no direct effect on them whatsoever.

What are the processes and conditions that lead to the creation of particular norms in particular circumstances? In general, the larger and more complex the society, the more likely it is that rules will need to be hierarchically developed, or at least enforced. On the other hand, the information era is increasing the importance of social capitaløof trust and co-operation based around informal understandingsøin productive activity.

Capitalism is not necessarily destructive of social capital, as evidenced by the virtues of industriousness, honesty, self-discipline, punctuality and prudence which capitalism fosters.

On the other hand, capitalism can be destructive of social values through the erosion of professional ethics by competition, through the market catering to demand even for damaging products (such as sexual and violent entertainment) and through increasing economies of scale destroying the personal connections of small retailers.

On balance, however, capitalist economies should be able to generate sufficient social capital to meet their needs.

Nor is capitalism alone in being able to both create and destroy social capital. The government sector can also do both, for example through the values which are taught through the education system.

Looking at the history of Western society over the last 200 years or so, we can see that a dramatic improvement in social indicators took place over the second half of the nineteenth century.

This improvement was driven by the emergence of ÔVictorian valuesÕ, which were a radical reaction to the social problems of the time, and were part of the religious revival which swept Europe and the United States from the 1830s.

This nineteenth century experience shows that a society can Ôre-normÕ itself so as to rebuild social capital.

In fact, a trend to re-norming in our own times is already underway, starting from the early 1990s and evidenced by falls in crime, divorce and single mother births.

Fukuyama predicts this re-norming will continue, as people become more aware of the evidence of the damage that self-centred and anti-family values can cause. As well, public policy can help, through initiatives such as community policing and increased action against minor street offences which can destroy social capital in neighbourhoods.

A major change in sexual morality is unlikely, because artificial birth control and the greater capacity for women to support themselves remove or diminish the rational basis for previous limitations on sexual activity. However, realisation of the benefits to young children of their mothers being at home, coupled with technology reducing the importance to both men and women of continuous careers, are likely to result in more mothers of young children choosing to stay at home.

There may be a religious revival of sorts, but more out of people seeking a sense of tradition, belonging and shared values than out of actual belief or religious fervour.

There should also be a continued long-term trend towards liberal democracy, provided that moral relativism does not extend so far as to destroy the moral and political consensus in favour of liberal democracy itself, and provided technological change does not outpace peopleÕs ability to create social capital.

To this reviewer, FukuyamaÕs book serves two valuable purposes. The first is to demonstrate soberly, calmly, and comprehensively that the various social problems we face today are primarily attributable to changes in social values and norms. In the course of doing so, Fukuyama provides a wealth of valuable material for public policy debate.

The second is to show the necessary grounding of social norms of all descriptionsølaws, customs, manners, and conventionsøin human nature. Much as we might like to, we are not free to define morality to be whatever we want it to be. If individuals or communities insist on framing social norms which are contrary to human nature, the consequences will be unavoidable and painful.

The Great Disruption is written in many ways like a good piece of popular science writing. It is clear, direct and readable in style, taking the reader steadily through the chain of reasoning in each chapter, with authorities copiously footnoted.

However, the lay reader is not in a strong position to question FukuyamaÕs assertions about evolution, biology or other specialist disciplines with which he or she is not familiar.

There are, however, several aspects of the book that can more readily be questioned. These include inapposite references to the ÔproductionÕ and ÔconsumptionÕ of social capital, the primacy which Fukuyama attaches to technological and Ôinformation eraÕ explanations of the ÔGreat DisruptionÕ, his understanding of the nature of religious belief, and the absence of an express moral framework for his own normative statements and asides.

Particularly puzzling are FukuyamaÕs concluding remarks on the future of liberal democracy.

In making his point that moral relativism may threaten that future, Fukuyama gives only one specific instance, namely the threat of the Ôactive celebration and promotionÕ of multiculturalism.

This is a surprising instance particularly to an Australian reader, since our experience of multi-culturalism has been an overwhelmingly positive one of enjoyment of cultural and culinary diversity within a framework of near universal acceptance of democracy, openness and the rule of law.

Even given that Fukuyama is referring to a perceived risk of the development of ethnic enclaves that reject such a framework, both the Australian experience, and many decades of American experience, suggest that so long as liberal democracies remain positively committed to such a framework, the framework is likely to be embraced, rather than rejected, by migrants of all backgrounds.

Instead, the real risk to liberal democracy would seem to be the broader threat which moral relativism and its consequences pose to support for and participation in the democratic process by citizens in general.

Were a re-norming of society not in fact to take place, and were instead the unravelling of social norms to continue, there would be a grave risk that the culture of self, and the ever narrowing circle of trust, would eventually undermine support and participation to such an extent that liberal democracy would gradually slide into dictatorship through apathy.

However, if re-norming is to occur, there has to be a rejection, conscious or unconscious, of moral relativism. Without such rejection, there can be no basis on which citizens can expect others to comply with emerging social norms (or, indeed, with existing norms).

The puzzle is that Fukuyama does not pick up on this broader issue, which would seem to follow inexorably from his own research and reasoning. Despite these and sundry other criticisms which one can level at The Great Disruption, it remains a book of remarkable breadth, bringing recent learning and insight to bear on issues which are as old as humanity but which our modern generation is beginning to revisit afresh.

Review by Jason Soon

Destiny Will Out: The experiences of a multicultural Malayan in White Australia
by Arasa Minerva Press, Sydney, 1998, 392pp, £8.99, ISBN 1 86106 462 4

The author of this memoir, Raja Arasa Ratnam, is of Ceylonese Tamil origin, born in what was then called Malaya. He came to Australia for his tertiary studies and through a labyrinth sequence of events, eventually settled down in Australia and became a citizen while the White Australia policy was still in place. Though somewhat meandering, his narrative manages to hold our interest because of the authorÕs perceptiveness and eye for interesting detail. It is also a narrative interspersed with charming homilies and thoughtful commentary about Australian society and its reaction to the first substantial contact with people of non-European origins through overseas students and later, the immigration programme.

Aside from the human interest aspects of his story, this book should also be of great interest to sociologists, historians and others who are looking for a wealth of empirical material regarding the transformation of Australian society, particularly with regard to the sensitive issues of immigration, cultural diversity and race relations. This is doubly so, because the author spent a substantial part of his working life in the public service and community sector in the ethnic affairs area, including the formulation of policy and liaising with ethnic communities. In addition he also worked in the area of foreign investment regulation, industry protection (or as he wryly puts it, Ôensuring the continued inability of Australian industry to be competitive globallyÕ), compiling balance of payments statistics, public sector selection procedures and overseas aid. These experiences give Raja Ratnam the ability to comment with first-hand knowledge on a wide range of public policy issues. He has many salient points to make about the distinction between cultural diversity and State-funded multiculturalism, and the problems of public education and the welfare system which would strike a chord with many Policy readers. What is more unique is that for Raja Ratnam, many of these issues are not ÔacademicÕ but very relevant to his own experiences in his settled country.

This authentic testament of the migrant experience in the midst of the White Australia policy also offers refreshing perspectives, bereft of bureaucratic jargon and more importantly, of the sort of predictable rhetoric one has come to expect from some political activists. The authorÕs views on multiculturalism are similar to those of Jerzy Zubrzycki whom he cites in his reflective and constructive criticism of the excesses of socially-engineered multiculturalism.

In 1995, Zubrzycki, a key figure in the reorientation of policies towards a greater acceptance of cultural diversity, argued that multiculturalism was an out of date term, with negative connotations of political separatism. Furthermore, he was imprudent enough to question the relativistic assumption that all cultures are equally valuable and equally compatible with the fundamental liberal universalist values underpinning Australian society; and argued that a policy of grants to ethnic groups was potentially divisive.

Of the representativeness of opposing views frequently put forth by ÔethnicÕ political activists, Ratnam has this to say, ÔÉ it is difficult to know if their constituencies are consulted regularly and whether, in any such consultations, each community has considered how its grandchildren will relate to the grandchildren of other Australians É Are there always going to be ethnics, with each group separate from the others, and to be in need of taxpayer subsidies?Õ (p.326).

Overall this book is very difficult to characterise. It is a melting pot of many different influences and experiences much like the Australia which has become the authorÕs new home and the Australia he aspires to see flourish.

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