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Economist Brian Easton says social philosophy in New Zealand is muddled and incomplete

Economist Brian Easton says social philosophy in New Zealand is muddled and incomplete

This is a re-post of an article originally published on pundit.co.nz. It is here with permission.


This year, 2021, is the fiftieth anniversary of John Rawls’ The Theory of Justice, described as the most important book on political philosophy written in the twentieth century. As you might expect it is a big book (587 pages with a follow-up one of 464 pages) and its arguments are complex. This column focuses on just one insight.

It raises the ‘minimax’ principle which says that policy should focus on maximising the situation of those at the bottom, that a society should be judged by how well it treats the most marginalised. (There are many dimensions of marginalisation; for instance how easy is access for the disabled.)

Rawls belongs to a long line of thinkers including Immanuel Kant with his prescription ‘to behave as if what you do would apply to everyone’. Kant himself goes back to Jesus with the injunction to ‘do unto others what you would have them do to you’.

Rawls has had surprisingly little impact on New Zealand. He nearly did. Almost simultaneously, the Royal Commission on Social Security (the McCarthy Commission) published in early 1972. It could not have had access to Rawls’ book, but its principle that the aim of social security was, as far as possible, to enable everybody to participate in and belong to their community comes from the same ideological stable. After all,. Michael Joseph Savage described his social security legislation as ‘applied Christianity’.

The minimax idea was once deeply imbedded in the New Zealand psyche as a part of the social contract. A way of characterising it is that the role of the state is to provide a reasonable minimal living for all, and enable everyone to achieve above this if they wished. (This hardly applies to today’s poor children, who with inadequate nutrition, health care and schooling are not going to be able to achieve their full potential in adulthood.)

You might have expected the 1988 Royal Commission on Social Policy (the Richardson Commission) to have picked up the Rawlsian ball and explicitly integrate it into its account of the social security system. No such luck. Insofar as it had any conclusions, they were an intellectual shambles. The purpose of the RCSP was to provide an alternative to Rogernomics, but it demonstrated that the opponents could not get their act together and gave a carte blanche to the neoliberals to ‘redesign the welfare state’, as Richardson (a different one) and Shipley put it.

‘Redesigning’ was a slogan rather than a coherent policy. Much of it seems to have been about privatising and commercialising social security towards an idealised version of the American system – as idealised by the American right. It does not work there either, which is one of the sources of our clumsy shambolic system. Very typically, when we make a policy mess we try to solve it by adding more to the mess, rather than going back to the beginning and analysing why it happened. The result is a Heath Robinson system.

One thing was clear. The ‘redesign’ dramatically cut social security benefits (by over 20 percent in some cases) to pay for tax cuts for the rich. In effect they switched the 1972 RCSS’s approach of minimax to maximax – the aim was to maximise the incomes of those at the top. Not only were the benefits cut but since then they have been usually increased in line with inflation, not with overall prosperity. A way of thinking about this is that the redesign of the welfare state replaced the 1972 RCSS’s approach of a relative poverty with an absolute poverty one.

The 1999-2008 Clark-Cullen Labour Government did little to redirect or recover the social security system. It seems to have been dominated by the same muddled thinking of the 1988 RCSP. A nice illustration is that one of its leading thinkers described Working for Families as the best thing that the government did. Critics who want a more extended and coherent welfare state think it is a muddle which put back the development of welfare. Perhaps they are both right.

The 2008-2017 Key-English Government, under fiscal pressure after giving generous income tax cuts to the rich, continued National’s earlier approach and pressed down on beneficiaries. Maximax rules, OK.

Perhaps it is too early to judge the Ardern-Robertson Government’s approach. But it seems to remain in thrall to the muddle of the 1988 RCSP. There is little evidence of the influence of Rawls or the 1972 RCSS in its policy making.

Rawls’ thinking is surprisingly absent from New Zealand’s. For example, Jonathan Boston’s Transforming the Welfare State: Towards a New Social Contract has no reference to The Theory of Justice. He is not alone.

Why do we not include Rawls is our public discussion? It is not as if he gets mentioned and the writer then explains why they reject Rawls’ approach. Perhaps they object to its Christian foundations, perhaps they are maximax neoliberals, or something in between. I dont know.

It is almost as if all 1051 pages of Rawls is too much to get one’s head around. Have you noticed that in New Zealand we tend to ignore anything we disagree with, rather than address why there is a disagreement? The standard way to deal with quality intellectuals is to dismiss them as unsound and misrepresent their arguments. The consequence is that so much of our thinking is mechanical, shallow, unoriginal and colonial.

Perhaps a speech could be written for the current Prime Minister, Minister of Finance or Minister of Social Development pointing their government’s shift towards a minimax approach. But it would be delivered without conviction and received without comprehension by the commentariat sated with maximax, while the minister’s officials and advisers would be confused and puzzled.

So we are stuck between the muddle of the 1988 RCSP and the 1990 redesign of the welfare state. It might be worthwhile reading the 1972 McCarthy Commission (or the 1966 Woodhouse Commission on Accident Compensation) to see how one can think (and write) clearly. On the evidence, suggesting that our policymakers and commentariat read The Theory of Justice may be too big an ask.


Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.

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43 Comments

Have you noticed that in New Zealand we tend to ignore anything we disagree with, rather than address why there is a disagreement?

Yes. As a society, we need to stop 're-designing' and start 're-imagining'.

NZ has a major problem. It is the long term beneficiary, multiple kids, sucking up every grant whilst living in HNZ stock. No issues with people needing a hand-out for a year or 2 to find their feet but the intergenerational rort has to stop. Hey, Mum was a dirtbag tenant on the DPB and continued to have 3,4...5 kids without a partner with prospects (whoops, there is the gang analogy). Screw the pity, handout the contraception. Disclaimer-I sucked the unemployment benefit 2x (total 5 months) in 30+yrs of work.

17
up

Disregarding for the moment the unpleasant tone of your comment... where does most benefit money ultimately go? To landlords (and supermarkets).
We can't afford this landlord state anymore. End the Accommodation Supplement, now.

Dear Editor

is this REALLY the sort of Right wing bigotry you want to allow on this site?
It seems to be multiplying too

mike... I agree it was not very well put but we do need to look at the main drivers of intergenerational welfare and address them. I want us to help the poor as much as anybody but we also need people to try to help themselves as well.

Yes agree. Cheetah has a point, although I don't think dishing out 'hard love' (eg. Limiting benefits to one or two years) is a good idea at all.
Unfortunately it all stems back to bad morals. Note, the 'well off' are inflicted by bad morals just as much as the downtrodden, the main difference is the well off are more educated and better with the contraception.
There's no easy way out of this. But education (classroom and life skills) has to be a big part of it.
Communities also need to show leadership too. Let's not beat around the bush, the issues are concentrated to a large extent in Maori and Pacific communities.
They need to take ownership but the government needs to continue to invest in community support.

We as a society have to be in this together.

No bigotry champ, it is an every increasing group who can't afford to feed nor support their kids. And then have more kids whilst on welfare. Where is the bigotry or racism there?

Landlords can't afford to pay their mortgages (hence why so many are interest only) and require government assistance (accommodation supplement from their tenants) so really they're the biggest beneficiaries of them all. But I don't see you bashing that group of people? Are landlords allowed to have babies as well - even though they're living off government money?

Landlords work in partnership with the government to provide valuable services to the community. We proudly call ourselves Centrists*.

*Centrism is a political outlook or position that involves acceptance and/or support of a balance of social equality and a degree of social hierarchy, while opposing political changes which would result in a significant shift of society strongly to either the left or the right.

Where does economic parasite fall on the political scale - I don't seem to be able to see it anywhere.

Landlords are the opposite of Robinhood - taking from the poor and giving to themselves.

In all honesty, landlords are just as bad as the beneficiaries that they bash - but beneficiaries don't gloat about how wonderful they think they are. Hence why I see a correlation between many landlords/property investors and narcissistic personality disorder.

Here's the symptoms if you need to self assess or to check up on any of your friends.

https://cdn.psychologytoday.com/sites/default/files/styles/image-article...

I don't know what you mean by "economic parasite", you're talking nonsense.

"we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our “human capital” in economic terms) to create something new, whether that’s a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

But there is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit."

https://www.theguardian.com/commentisfree/2017/mar/30/wealth-banks-googl...

https://www.theguardian.com/books/2016/oct/26/the-corruption-of-capitali...

The parasite eats away at the health of the system - destroying the same things it needs to survive. It provides no benefit other than to sustain itself but if left uncontrolled, destroys itself through its need to consume more of the thing that provides the real benefit (the productive economy). Sums up landlording/property investment quite well really.

"Pushing back on narcissism is a human rights issue"

https://youtu.be/aHHWgG7dB6A

Most landlords have the ability to pay. You don't seem to understand how things work and gather from your daily posts, you don't seem to want to anyway.

Landlords aren't living off government money, it's the beneficiaries. Landlords are forced to take the money to help beneficiaries.

Try not to bite the hands that feed you and be a good boy.

Landlordism is parasitic and inherently immoral. This is only going to come into sharper relief over the coming years, so if you cannot handle the justified criticism that will continue to build against it, you might want to stay off the internet. But I gather from your posts that you rather enjoy and feed off making such snarky remarks in a vain attempt to keep people in the place you would have them - under your boot heel. There's a word for this, mentioned just above.

I'll continue to be a good boy and you can be the parasite on the economy. Slowly chewing away at the health of the system until it dies. Deal?

Effectively the hardworking taxpayer is helping fund many landlords via welfare in it's many forms, accommodation supplement being only one aspect, as most of those welfare payments are going on rent and only going to get worse.

Effectively the hardworking taxpayer is helping fund many landlords via welfare in it's many forms, accommodation supplement being only one aspect, as most of those welfare payments are going on rent and only going to get worse.

If you don't agree - how about arguing the point rather arguing for censorship? Everyone Right and Left are entitled to their opinions, opinions can be forged or changed only in the fires of criticism. Censorship gets society nowhere.

Totally agree.

And then you just have to get past 65 and claim superannuation.

Ah yes, the biggest beneficiaries of all, and so many of them are landlords as well as beneficiaries. But Cheetahlegs66 doesn't seem to want to trim NZ Super beneficiaries' wings.

Where did you get that idea? Never (ever) commented on super entitlement. I've worked on the assumption that at 65 I get nothing, zero, nada, zilch. I have taken 100% responsibility to provide for myself. That is why I drive a 2002 Honda and not a Porsche....or live in a med 4 bedroom house and not a place with a swimming pool and triple garaging. Having said that, if I had purchased a bigger/better/more expensive house I would be in a stronger financial position (that is irony). My dislike of beneficiaries is focused on those who can work but choose not to. For those who have kids and yet can't afford clothing or food....and have more kids. No money for food but can smoke and drink alcohol. Working in a health related field I see this most days and it is sickening.

Talking to an orchard owner on the weekend. He needs more fruit pickers than he can get. WINZ is trying to send him some workers, but they do 1/5 the work of the seasonal workers from the Islands, and he loses 20% of them a week i.e. many are only lasting a week before they give up because it's too hard. Those RSE workers are making a killing as a result because they're working as many hours as they want.

I thought beneficiaries were good for business? (landlording?)

There is a relatively easy fix to part of this problem but it can't be done in the society in which we live. Any female 16+ years and who has two children or more and is a beneficiary on any form of unemployment for more than a year has her tubes tied. This formula could be developed to take into account under employment and those starting/stopping work to rort the system.
One of the Ghandis I think tried something about 50 odd years ago to reduce India's breeding rate. Not sure if he was successful.

Ch66,

Clearly, it has not occurred to you that the views of those who think like you mifgt be a greater problem. I find your views distateful on a personal level, but perhaps more importantly, the bile you spout is just wrong.
A few years ago, a study was done which demonstrated that in 2014, the value of tax evaded was 40 times that of welfare defrauded. Thus, the country lost $30.55m to benefit fraud, but $1.24bn to tax evasion. Tax evasion of course did not come from the beneficiaries you describe.
If we look at prison sentences, we see that 18% of those convicted of tax evasion were given prison terms, while 67% convicted of benefit fraud were given jail time. yet, the average value of offending was $229,000 for tax evaders and $77,000 for benefit fraudsters.
The system would seem to be as keen to kick the marginalised of society in the teeth as you are.
As i can only judge you based on what you posted, i think you must be more than a little unpleasant

Only 5 comments to the 55 on the house price thingy. Says it all.

Problem is with power.

Power corrupts and best example is current PM.

PM who was voted against national party housing pokicy which was aim at supporting and promoting speculators, What does she do when voted - first term she blames supporting political party for not allowing her to function to solve the housing crisis as she will like to and soon when she gets full majority and is free from any pressure, What does she do, support and promote housing ponzi ignoring the popular sentiment and the very reason, she was voted to power.

So it is not her to be blamed by power as power corrupts so this problem will always continue, unless one begets a Leader to lead the country and not politician.

Over time 'minimax' has been corrupted into: as long as we are trying to maximise those at the bottom we don't need to worry about those in the middle.
The problem with state welfare is we don't know how stabilise the demand for it (and it gets corrupted into landlord subsidies). The expenditure and programs keep needing to be expanded which require more taxes so every so every so often a party is elected to cut it back down.
State welfare in its current from is about 100 years old we are still figuring it out. Maybe these "quality intellectuals" should have come up with something better that works better over an extended period and is at least tolerable for everyone.
I'm not advocating cutting benefits at all but shovelling unlimited money at those in poverty will just result in more marginalisation of the middle. And a million a pop to house a family so the rich can maintain their asset prices is too expensive.
We would have to care enough to create a new political party to fix this and risk wasting all that effort when the 5% threshold crushes it. (Over 50% voted labour, we cared that much...)

I have been reflecting on Brian's comment on WFF.
I had often thought of it in a positive sense that it incentivised working. I still think that.
But I think what he was alluding to is that it does little for those at the bottom of the heap. Notwithstanding the incentive of WFF, those st the bottom may not have the ability and/or desire to work and therefore attain the benefit of WFF.
So actually what we need is WFF and a more generous benefits system. Plus support, education, investment.

No. What we need is a universal basic income to stop the perverse incentives beneficiaries exploit and the perverse penalties experienced by those who go on a benefit (stand down periods/abatement rates etc). In addition we pay an army of public servants hundreds of millions a year to figure out whether Bob should get $37 a week or $38 a week.

When people wake up and realise that most of the population are beneficiaries (Landlords through accommodation supplements, WFF for a tonne of people, Super for an increasingly large amount), they will finally realise that a UBI starts making sense. Its simple, can't be easily gamed, increases the desire for people to work and costs the same as the current system. But we will save in terms of trying to calculate tax people should pay and trying to calculate how much each individual person gets.

Fair enough, open to that.

I think we are fast approaching the time for another stark reminder that we cannot just sit back and hope. Change of this sort is almost never pushed from the top down without extraordinary pressure. Our politicians will do nothing substantial to bridge the widening gap of inequality for as long as enough of the population continue to function as their enablers. Anger is often perceived as a fairly negative emotion, but it serves a very important and healthy function in telling us that something is very wrong and needs to be addressed.

I don't expect that we'll ever achieve a perfectly just and fair society as humans - but damn, we sure are in a hurry to burn everything down around us. If we don't start peacefully applying pressure together, we may yet see changes here and around the world that make standing up to this at all, very difficult.

'Anger is an Energy'. J. Lydon.

Sometimes an energy for good, as you allude to.

If you add up all the marginalized groups they must surely outnumber normal people.

'Normal People'.
What's normal?

Exactly Fritz.

Great to see that people have some sense left and understand the root cause of the problem (landlording & long term beneficiary).
But you guys don't matter, the one who matter (JA) will not care. So these issues is well dwell in the society we can write and talk bout it but cannot solve it. It can only be fixed if we get a leader who want to lead for a change and don't manipulate the way our current leaders are doing.

And both echelons are on a sinking ship.

Just physics. Sorry.

Time for a great re-set, but not the Davos hogwash

Brian, I agree with addressing the other side of the argument. Why don't you do it?
You infer that those who have cut welfare have only done so to help the rich, and to align to the American right (really?), without addressing at all the opposite side of the argument about the effect lower taxes has on economic growth and employment.
Therefore I don't believe you when you lament the way 'quality intellectuals' are dismissed; I think you just want to discredit your political opposites.

Maybe it's a Systemic Structural problem? Poor governance making poor decisions instead of addressing the core issues of poverty?
The ole "lock'em up" and throw away the key mentality obviously doesn't work. Claiming that 'they' are all lazy bastards yahdah, yahdah ... doesn't solve anything. There is a saying that goes something like," If you keep on doing the same thing over and over again ...."

70% of the NZ economy is in the shitty service sector. The rest is related to the unproductive sectors.
Hand in hand they suck the lifeblood out of the real economy and demand the cheapest labour the neoliberal governments can deliver. 5% is the target for the 'pool' for the unemployed to achieve a low waged economy. If the number drops below that, that's when you hear employers moaning because the labour shortage drives incomes up! And, or, they demand that the flood gates to be opened for cheaper offshore immigrants!
So, tell me, why is there a need for a mobile, unskilled, semi-skilled 'ready workforce? Because that is what the 'system demands. Who's fault is that? People receiving a benefit dont make those decisions do they?