Ideas@TheCentre brings you ammunition for conversations around the table. 3 short articles from CIS researchers emailed every Friday on the issues of the week.
Advocates for a universal basic income (UBI) often cite automation and the rise of part-time and casual work as a reason to massively expand the welfare state by making unconditional payments to all.
This is not about those who can’t find work and exist on welfare alone: they would see little additional benefit from most proposals for a UBI. It about the living standards of the working class in an age when unskilled labour is diminishing in value.
This sentiment is not limited to the niche debate around a UBI. Take, for example, union demands for additional support to manufacturing industries: some arguments are premised on the fact that many of those workers will never find a job with similar pay and conditions again.
Or even consider the appeal of Donald Trump in the US rust belt. When Trump talks about returning manufacturing to these areas, he is painting a picture of the days when a hardworking man with a high school education could support a family — and prosper — in a largely manual job.
The problem is that the market’s failure to provide middle class living standards to the working class is viewed as cause for government intervention.
The issue is actually fairly straightforward: the market assigns labour a value based entirely on what it can produce. Some people have skills that are very valuable, others do not. Technological progress and removing barriers to competition (both from targeting prejudice and encouraging trade) has made unskilled and semi-skilled labour in rich economies much less desirable.
Simply put: the market does not believe everyone has a right to a good job. But in an age where everyone gets a prize lest they not feel like a special snowflake, it’s very hard to convince people to lower their expectations.
‘Giving a Gonski’ has become a slogan for ‘caring’ about education but seemingly without bothering to understand what it actually means.
For years now, so-called Gonski funding — the National Education Reform Agreement (NERA) — has been held up as the holy grail of education policy by many people, including some state governments and teacher unions.
As the Gillard government’s six-year school funding agreement with most of the states in 2013, the NERA included substantial increases in spending on schools by both federal and state governments. However, most of the increase was allocated for the final two years in 2018 and 2019 which the current federal government has been strongly urged to fund.
This makes two recent developments quite ironic.
First, it was revealed earlier this month that four state and territory governments reduced their recurrent school funding in 2014-15. The Australian Productivity Commission’s Report on Government Services 2017 shows South Australia, Tasmania, and the ACT — all participants in the NERA funding agreements — cut their recurrent school funding, contrary to what was originally agreed.
Second, last week one of the Gonski Report panellists, Ken Boston, said it is a misunderstanding to refer to the NERA as ‘Gonski funding agreements’ and in reality neither side of federal politics has ever adopted the Gonski Report. The truth is the NERA is contrary in many ways to what Gonski proposed.
Given that neither side of politics is embracing the Gonski Report (and now that four of the states and territories appear unwilling to commit to, or are unable to afford, ‘Gonski funding’) it is appropriate for both federal and state governments to consider alternative school funding arrangements.
Other possibilities include school vouchers, charter schools, and transferring all education policy and funding responsibilities to the states as recommended by the National Commission of Audit.
The fact that none of these alternative school funding options were even considered in the Gonski Report simply highlights the limitations of the ‘I give a Gonski’ sloganism.
When CIS hosted Michael Novak in 1995, he noted — with concern — people’s tendency to envy those who are more prosperous than ourselves.
Novak, who died last week, insisted that enactment of a religious duty to help the poor lift themselves from poverty, and to help those incapable of doing so for themselves, need not be joined with resentment of the rich.
He argued that the material prosperity of the wealthy need not be what concerns us; it is lifting the living standards of the poor that matters. And the market economy has proved the best means of doing so.
Novak’s analysis of ‘democratic capitalism’ in his landmark work The Spirit of Democratic Capitalism, published in 1982, is the most formidable account of the moral and economic strength of capitalism.
Samuel Gregg has said that the book was “the first effort by a theologian to offer an in-depth, moral, cultural, and political analysis of the market economy in a systematic way.”
For many people, “capitalism” remains a term of contempt. Novak knew well enough about the shortcomings of capitalism, and was a stern critic of the amoral pursuit of profit. The creation of prosperity, he argued, needed to take virtue seriously.
He showed how democratic capitalism instantiated key moral goods such as individual liberty and the rule of law. He was also concerned with the strength of civil society, and advocated reforms to welfare to free people from the snares of state dependency.
Novak continued to face stern criticism, especially from other theologians and church leaders. His arguments nonetheless gained widening acceptance both within the churches and the academy, and beyond.
“It is a testimony,” wrote Gregg, “to the truth that ill-conceived propositions can be discredited by the promotion of alternative ideas through good scholarship and intellectual conviction.”