Opinion & Commentary
We don't need a nanny
Towards the end of last year, as he was positioning himself for what turned out to be a successful bid for leadership of the Australian Labor Party, Kevin Rudd wrote a couple of essays spelling out the differences between Labor's "social democracy" and what he called the "market fundamentalism" of John Howard's Coalition Government.
In an article in The Monthly entitled "Howard's brutopia", Rudd drew a distinction between social democrats such as himself and neo-liberals, among whom he included Howard. He acknowledged that Howard's rhetoric emphasised the importance of strong families and cohesive communities, but he maintained that, in practice, Howard's neo-liberal economic policies had weakened families and undermined community solidarity. He accused Howard of unleashing "unrestrained market capitalism" that had encouraged "individual greed and self-interest" and eroded the bonds that held together our society.
Rudd followed this article with a speech to the Centre for Independent Studies attacking Friedrich Hayek, whom he identified as the guru of the "free market fundamentalists".
The speech was particularly critical of Hayek's claim that altruistic behaviour originated in small-scale, tribal societies, where survival depended on sharing, but that it was incompatible with the requirements of a modern economy that depended on trade between strangers. Rudd seized on this, interpreting it as an attack on the virtue of altruism per se and suggesting that Hayek wanted to "purge altruism from the human soul" to increase economic efficiency. He accepted that Hayek understood the importance of family life but said his philosophy precluded him from protecting families from the profit-maximising logic of the marketplace. He then extended this critique to the Howard Government, which he thought had pursued hardline, Hayekian economic policies without regard for their impact on the quality of family and community life.
The core of Rudd's argument in both these essays was that capitalism would "tear itself apart" unless it was regulated. This was because the self-interested pursuit of profit fatally undermined family and community life, which therefore had to be protected by government. He then applied this argument to the Howard Government's recent workplace reforms, which he believed were dismantling a civilising framework of regulation that had kept free-market capitalism in check for 100 years. As a result of these reforms, families were exposed to an "unconstrained market" and were being prevented from spending sufficient time together as profit-maximising employers used the new laws to increase exploitation. "Market fundamentalism", he said, was making "ultimate inroads" into family life.
Both Rudd's essays attracted considerable comment. CIS executive director Greg Lindsay wondered how Howard could be considered a "fundamentalist neo-liberal" disciple of Hayek when he had presided over the biggest spending federal government in our history, and Sinclair Davidson questioned Rudd's understanding of Hayek's writings on the family, altruism and social justice.
Rudd's argument that market capitalism undermines family and community life is not original. Through the years, many social theorists have maintained that capitalism destroys intimacy and a sense of belonging, and many of them have been socialists seeking to make an ethical case for more state control or regulation of the economy. The most influential writer in this tradition was probably Ferdinand Toennies. Writing in the late 19th century, he investigated the "sentiments and motives which draw people to each other, keep them together and induce them to joint action". He identified two main ones: "Natural sentiments", where people felt instinctively drawn to each other, and "rational sentiments", based in calculations of self-interest.
In modern capitalism, according to Toennies, people were encouraged to treat each other as objects, mere instruments for achieving their personal ends. Calculative individualism would have to be overcome by developing new forms of communal life, social unions involving relations of economic co-operation rather than competition. He believed organisations such as worker co-operatives could bind people in cohesive communities based on common sentiment and purpose.
Toennies's thesis became a staple of sociological thinking through most of the 20th century, and it reappeared time and again in studies bemoaning the "loss of community".
Now it has resurfaced in Rudd's recent comments. Like Toennies, Rudd sees family, community and church as the foundations of social unity, and he believes these three core institutions are being undermined by individualistic free-market capitalism. But isn't there something odd about this? If Toennies was right in the 1890s that family and community life were collapsing, there shouldn't be any family and community life left in 2007 for Rudd to fret about.
Claims such as these seem to be made in every generation, with little regard for empirical evidence. Like many gloomy commentators before him, what Rudd is offering is not fresh analytical insight but tired and largely discredited sociological cliches.
If family and community life has changed for the worse in Australia (and Rudd gives no evidence that it has), there is no necessary reason to assume that neo-liberal economic policies are the cause. Liberalisation of the economy may have had some effect, but the strength or weakness of family and community life is also likely to be the product of many other influences that have little or nothing to do with the economy: the growth of women's rights, innovations in contraception, the development of the welfare state, the spread of television, the decline of religious belief, increasing ethnic diversity and the communications revolution, to name a few. Rudd gives no serious consideration to these other possible causes. Instead, he jumps to the conclusion that Howard's economic reforms are to blame for family break-up and community decline, even though he gives no evidence to support it.
The Work Choices legislation passed into law in 2006, so Howard's labour market reforms have clearly had no chance to affect family and community life, negatively or positively. But even if we assume Rudd is making a more general charge against the legacy of the Howard years, the case still does not stand up. When we consider the sum of Howard's economic policies since 1996 -- the reform of company and superannuation taxes, the introduction of the GST, the free trade agreement with the US, the encouragement of workplace agreements and individual contracts, the sale of Telstra, the establishment of the Future Fund -- it is hard to see how any of it can possibly have had the effects that Rudd claims to find.
Family life has clearly changed dramatically in the course of just two generations. But the important point to note about these changes is that they nearly all occurred between the 1960s and the '80s, long before Howard came to power. Indeed, as Keith Windschuttle pointed out in his response to Rudd's comments, the period since 1996 has seen, if anything, a slight reversal in some of these trends. Divorce rates have flattened out, the marriage rate has stopped falling and even the fertility rate has started to pick up. The period when family life started to change significantly in this country, and when community cohesion, measured by indicators such as a rising crime rate, significantly weakened, coincides not with the liberalisation of the economy since the mid-'80s, but with the heyday of government regulation in the '60s and '70s. They mainly took place when Australian governments were still protecting home-based producers behind high tariff walls and were micro-managing workers' labour contracts through a tightly regulated system of awards.
Rather than offering a solution to the weakening of family and community bonds, government regulation may be part of the problem. Rudd wants to use the power of government to limit the market and to protect family and community life against "unrestrained market capitalism" but, historically, it is the expansion in the powers of government that has been a key factor undermining family and community resilience. Many factors contributed to the disruption of family life and the erosion of social responsibility that occurred from the '60s onwards, but one was almost certainly the growth of big government and the remorseless expansion of the welfare state.
Why marry the father of your child if government benefits will provide you with a secure and regular income if you don't? Why ask the grandparents to help with looking after the baby if the government is willing to give you money to buy child care? Why join a mutual health fund if the government is willing to make free health treatment available through Medicare? Why volunteer your time building up and running community facilities if the government can supply them with a wave of its chequebook? In modern Australia, it sometimes seems the only compelling reason for getting together with other people is to demand that governments do more for you.
Every time Howard or Rudd offers to do something for us, they undermine the strength of the intermediate institutions they say they are trying to protect. Every time they take it on themselves to sort out some problem, they reinforce the idea that it is the duty of government to organise our lives for us and that we have no responsibility to do anything for ourselves.
Family and community life does not need Rudd's protection. As long as these primary groups have a role to play in people's lives, they will survive and flourish without government support and subsidies. The only thing government needs to do to nurture community and family strength is to allow people the space to do things for themselves. This, however, is the one thing politicians seem to find most difficult to achieve. If anything, it is government intervention, rather than reduced regulation, that has been weakening family and community life.
Rudd claims to be a supporter of the market. He is a Labor moderniser, not an old-school reactionary. But the image he has created for himself with his recent rhetoric makes him sound more like Old Labor than an advocate of the so-called Third Way to which he says he is attracted.
There is no future for a Labor Party that defines itself in terms of limiting and regulating the market. If Rudd really wants to carve out a political niche for himself, he should be thinking of how to use markets to give ordinary people more control over the key areas of their lives still colonised by governments: their health care, their welfare and their children's education. Radical thinkers on the Left are starting to discuss policy options such as medical savings accounts and school vouchers, and they are openly debating the best way to reduce people's dependency on government welfare handouts. These are the debates Rudd should be connecting with. That way he will not only win elections; he will also end up strengthening family and community life by restoring people's responsibility for organising things for themselves.
This is an edited extract from the autumn edition of Policy, published by the Centre for Independent Studies. Professor Peter Saunders is CIS social research director.
