Could Jenny Macklin live on $35 per day?  That seems like the wrong question.  The right question is: Could Jenny Macklin live with social isolation, with low self esteem, without focus, drive and purpose?  No, not permanently.  The $35 is not the primary issue for Jenny Macklin.  Of course she could live on $35 per day.  Anyone with her level of self worth, social and familial support, organisation, determination and ability could live forever on $35 per day.

Long term unemployed people are not just poor in material terms.  They can become very poor in psychological assets of self worth, purpose and human connectedness.  So, why do people concentrate on the $35 per day and not on the psychological assets?  Because material wealth is the thing the State can do something about.  The State can tax and redistribute wealth, but it can’t tax and redistribute the psychic well being of people.  It can’t take some of your social connections and give them to someone else (although social connectedness is hardly a zero sum game).

Many Social Democrats have such great faith in the power of the State to solve every problem in society that they can become a bit confused.  They come to define the important problems as the ones that the State can solve.  The material wealth of the long term unemployed must be the main issue because that is what the State can do something about.  If the State can’t fix it then how can it be a problem?  That is how they come to emphasise the $35 per day and not the social isolation, self esteem and life purpose.

The best thing that the State can do for long term unemployed is get them a job, because a job brings with it connectedness, esteem and purpose.  Julia Gillard and Joel Fitzgibbon both made this point recently when asked about the $35 per day.  But what about people who are permanently unemployed?  Or employed, or retired persons, who have been disconnected from society.  Can the State find them and help them?  To some extent yes, but it is very, very inefficient at doing that.

The most efficient organisations at finding and engaging the socially disconnected in society are mostly religious bodies.  There are secular, non-government bodies who make it their business to engage isolated and disaffected people in society, but those organisations, such as police and citizens groups have shrunk over time. The State can’t efficiently or effectively reach people who are disconnected and in a secular society like ours, it can’t hand over large resources to religious groups to do it efficiently.  That leaves us a bit stuck.

There is an interesting discussion of this problem at the end of Robert Fogel’s book The Fourth Great Awakening and the Future of Egalitarianism.  Fogel won the Nobel Prize in Economics (in 1993 with Douglas North) for his work on the institution of slavery in the US.  Before that he studied the effect of nutrition on productivity in pre-industrial Europe and in the industrial revolution.

It was the material privations of the poor in the industrial revolution that motivated the creation of social democratic movements in Europe.  Fogel explains how over time material privation has consistently fallen in Western countries and psychological privation and social isolation has risen.  But social democratic parties are still focused on the material problem, because that is the problem the State can solve.

I think we saw an expression of this problem in the $35 day issue last week.

3 Responses to $35 per day

  1. Chris Shadforth says:

    May I point out that money is actually a great help in socialising? Knowing quite a few people who are long-term unemployed, one of the things that isolates them the most is the inability to afford spending time with friends. Also, before anyone suggests their friends could organise things that don’t cost money, it may just be that the unemployed individual feels a great deal of embarrassment about that situation and eventually cuts themselves off from friends. People just don’t like the idea of those bludgers having a drink on the public money rabble rabble rabble did you know that dole bludgers have houses bigger than the national average with gold plated toilets rabble rabble rabble.

    Basically, yes, there are deeper problems than money, but the money still matters. It’s not that you need to even increase the base rate in order to help – the system simply needs more capacity to deal with shocks to someone’s budget. Clothes don’t last forever, major appliances don’t last forever, deaths happen, cars break down, just COSTS happen. $35 a day makes it pretty damn hard to be prepared for those costs ahead of time. Especially given such saving would practically be seen as theft of public money by quite a lot of ignorant people (and quite possibly officially, given the amount of savings one would need to maintain to deal with such shocks would almost certainly reduce your payments).

    In regards to religious groups being best at engaging the socially disconnected, a cynical person might suggest that this is actually one of the less virtuous elements of religious organisations. It is often paired with a mission to convert, and tends to discriminate as much as possible against those it deems unclean.

  2. “The State can tax and redistribute wealth, but it can’t tax and redistribute the psychic well being of people. It can’t take some of your social connections and give them to someone else (although social connectedness is hardly a zero sum game).”

    Well, it can manipulate social connections in many ways.

    Building public housing in higher income areas almost forces the establishment of neighbourhood connections between classes. Remove funding from private schools will force a bunch of well connected people back into the pubic system where they will meet the children from families on the dole.

    Similar outcomes can be achieved in many ways, none of which are too dramatic at all.

    I am amazed at the reaction of many people to the whole ‘dole-bludger’ concept. “If only they would stop wasting their money on booze”, “If only they stayed at school”, “If only they worked hard”. Well, yes, this is obvious. But people need to learn these habits. And if the wealthy don’t want the children from disadvantaged families going to their children’s school and learning good habits from their own children (and a few bad habits in reverse), or living near them and seeing what hard work entails on a day-to-day basis, then how on earth are people supposed to acquire a work ethic, an ability to plan and save, etc. They will simply learn from others in their social groups, and the cycle of long-term unemployment will continue.

    Of course, despite all this, it is worth noting that the situation in Australia is very good. But there is no harm in making things a little better.

  3. The ‘social inclusion’ idea was an attempt to get the debate beyond just material deprivation. But it was a fuzzy concept.

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