Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 2002 8
RESPONDING TO INEQUALITY TODAY:
ELEVEN THESES CONCERNING THE
REDESIGN OF POLICIES AND AGENTS
FOR REFORM
JOHN BUCHANAN AND BARBARA POCOCK*
T
his paper addresses two questions: What can be done to address the forces driving
inequality in Australia today? And who can do it? We suggest that we need
better tools of analysis to understand the current situation and better categories to help
understand the links between work, social, and economic life. We go on to suggest, more
tentatively, that these categories can also provide important tools for developing new
policy ideas. We also show how these categories can guide initiatives directed at mobilising support for a new approach to combating inequality today. The argument is structured around eleven theses.
The previous papers have considered different aspects of the changing
dynamics driving inequality today. It is now necessary to consider the
questions: What can be done to address these dynamics? And who can do it? We
offer a very tentative set of ideas about the Australian situation and we look
forward to a deeper, sustained debate about inequality and strategies to meet
it––one that has been quiescent in Australia over the past ten years.
In addressing these questions we have built on our previous analyses of the
changing nature of work and especially the changing gender dynamics of working life. (See for example, ACIRRT 1999, Pocock 2001). This paper represents
a written account of some preliminary thinking arising from work we have been
undertaking together and separately over the last five years, associated with advising the Australian union movement, employer organisations, and governments
of various persuasions on how to respond to the current situation. It is schematic
in nature and blunt in presentation. It has been drafted to provoke debate.
Our starting point has been consideration of the question: what should a progressive policy mix look like in the light of the experience of the Accord? We are
unhappy with the two major responses that have emerged to date: policies of the
‘third way’ (or neo-liberalism with a human face) on the one hand, and the return
to classical blue-collar industrial militancy on the other. In thinking through prac* John Buchanan, ACIRRT, University of Sydney. Email: j.buchanan@econ.usyd.edu.au and Barbara
Pocock, Centre for Labour Studies, University of Adelaide. This paper has benefited greatly from
comments provided by participants at the ACIRRT symposium on inequality held at the University
of Sydney, 18 May 2001. The commentary on the paper by Louise Tarrant and Michael Crosby
has been especially useful. Helpful comments were also provided by Robert Brenner. The usual
disclaimer applies.
THE JOURNAL OF INDUSTRIAL RELATIONS, VOL. 44, NO. 1, MARCH 2002, 108–135
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tical responses to inequality today we have built on two literatures. The first
concerns the need to rethink the linkages between economic, social, labour
market, skill formation and industrial relations policy on the basis of an approach
to life cycle conceived in terms of ‘transitional labour markets’ (see for example
Schmid 1995). The second concerns the debate about union renewal based on
the so-called ‘organising model’. (See for example Labor Research Review 1991,
Bronfenbrenner & Juravich 1998, Cooper 2001).
Useful as debates on these issues have been, they too suffer from a number of
limitations; we will mention four. First, these approaches give only limited consideration to the realities of involving employers/management in any program
for reform. Second––and arguably of greater significance––is the limited attention devoted to identifying how state structures and personnel need to be reformed
to ensure new initiatives directed at reducing inequality are effectively implemented in practice. Third, serious reflective debate about the lessons of the Accord
years has been conspicuously absent in Australia. Steep declines in union density continued through the period of Labor government (1983–96). Of course
much of the explanation for this decline lies in labour market restructuring, but
other factors were equally, if not more, important. In particular this period saw
the demobilisation of an independent union voice in Australia. During this period
key leaders in the union movement endorsed or initiated a range of industrial,
education and labour market initiatives that paved the way for a conservative
onslaught and radically reshaped key planks of Australia’s social and industrial
safety net. They may have staved off worse things (as Labor protagonists claim)
but the implications for inequality are undeniable. The fourth issue, neglected
in the literature and policy debate to date, is that the developments resulted in
a deep loss of confidence amongst labour’s foot soldiers: workplace activists.
We examine these issues in this paper. We suggest that we need better tools
of analysis to understand the current situation and better categories to help understand the links between work, social, and economic life. We go on to suggest,
more tentatively, that these categories can also provide important tools for developing new policy ideas. We also show how these categories can guide initiatives
directed at mobilising support for a new approach to combating inequality today.
Our argument can be simply stated in eleven theses:
1. Current mainstream responses to inequality focus primarily on promoting
growth in jobs of any quality, training/education and targetted income support
based increasingly on the obligation of welfare beneficiaries to labour for the
state, ‘community’ and/or employers.
2. Policies of this nature will not succeed in reducing inequality because they
do not address the key dynamics considered in the papers by Froud et al. and
Watson in this issue of the JIR. That is, accumulation based on inequality,
restructuring of wages, hours, and modes of engaging labour in the labour
market, along with the shifting dynamics in the household and unpaid spheres.
3. Most attention in these papers has focused on issues of production. Issues of
consumption and household dynamics require equal consideration, alongside
a broader conception of ‘work’ and analysis of changing gender regimes.
4. There is no shortage of new policy ideas on how to address these issues. Most,
however, are underdeveloped and the linkages between them have not been
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worked through. Moreover, any movement capable of pursuing progressive
policies in the current situation is conspicuously absent.
5. Specific policy proposals cannot be usefully considered independently of the
forces that will promote and implement them. The major challenge in the
current situation is to identify the key categories capable of (a) simultaneously linking new approaches to reducing inequality and (b) providing a focal
point for mobilising support for such policies. While they are far from everything, ideas matter.
6. At the most general level we submit that categories of three different types
are needed. These concern notions of sustainable economic development, the
place of competition in economic development, and working life rights.
7. Arguably the most pressing priority is to identify how the rights of citizens
and households can be enhanced over the life cycle.
8. The key categories of concern associated with enhancing citizens’ and households’ choices over the life cycle require redefining the central features of
the employment contract and the unpaid household/gender contract.
9. This approach also means reconsidering the roles and structures of social
agents involved in establishing and implementing a new policy approach.
In particular, attention needs to be devoted to the role of unions, nongovernment organisations (NGOs), employers and the state.
10. The logical conclusion of these theses is that most of what is currently offered
as policy to redress inequality is flawed. A new policy agenda is urgently
required, along with a new public articulation of the possibilities and promise
of such policy across a range of progressive institutions and interests.
11. Not only are most alternative policy ideas on offer flawed. Equally deficient
has been the process of policy development. Arguably the greatest practical
challenge in the current situation concerns the need to improve the process
of intellectual and organisational renewal among those concerned with
inequality today.
THESIS 1
Current mainstream responses to inequality focus primarily on promoting growth in jobs
of any quality, training/education, and targetted income support based increasingly on
the obligation of welfare beneficiaries to labour for the state, ‘community’ and/or employers.
Since the early 1970s most advanced capitalist countries have experienced a
deteriorating labour market situation. This has had quantitative and qualitative
dimensions. The most significant quantitative dimension has been the return of
mass unemployment. While joblessness has fluctuated with the trade cycle, unemployment has settled at a higher level at the end of each cycle. More importantly
there is growing evidence that, on balance, the quality of jobs is deteriorating.
This is evident in rising levels of involuntary part-time work and the growth in
many forms of non-standard employment (ACIRRT 1999).
In parallel with these developments there has been a shift in policy about work.
Whereas an earlier generation of policy makers attempted to improve wages and
employment conditions directly, belief in the efficacy of such interventions has
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declined. In English-speaking countries especially, interest in income support and
training appears to be replacing an earlier interest in improving the nature and
content of work, especially wages and hours of work. Such developments are
presented as ‘innovations’ by adherents of the third way. Indeed, interest in training and new forms of income support such as tax credits is presented as a break
with the kind of neo-liberalism which dominated government in the English
speaking world during the 1980s and 1990s. But while the ascendancy of the ‘new
right’ has waned, the legacies of this period survive. Many neo-liberal precepts
remain, especially those concerning the alleged superiority of markets. Adherents
of ‘the third way’ now promise to transcend the limitations of both classical social
democracy and ‘new right’ neo-liberalism. This political tendency, primarily
associated with Clinton’s Democrats in the US and Blair’s ‘New’ Labour in the
UK, purports to redefine politics around the ‘radical centre’. Electorates in the
English speaking world are now offered a ‘new’ vision for our time––neoliberalism with a human face.
Many traditional labour-movement policies have been ‘modernised’ by ‘third
way’ adherents in an effort to meet the allegedly uncompromising demands of
globalisation. This has been the case especially in policies concerning labour
related issues. The objective of full employment has been eclipsed by the promise
of ‘full employability’. ‘Flexibility’ now ranks equally with (if not higher than)
fairness in industrial relations and wages policy. And the discourse of ‘mutual
obligation’ appears to have displaced a concern with universal rights of citizenship in social policy. On the other hand, traditional targets of policy concern have
slipped from view altogether. Whereas once the labour movement aimed to discipline the market, the current fashion of competition policy and ‘deregulation’
indicates a preference for enlarging the areas of social life disciplined by market
forces. Beveridge’s dictum that markets make good servants but bad masters
appears to have been lost on many social democratic leaders, especially in the
English speaking world (Buchanan & Watson 2000).
THESIS 2
Policies of this nature will not succeed in reducing inequality because they do not address the
key dynamics considered in the papers prepared by Froud et al. and Watson in this issue of
the JIR. That is, accumulation based on inequality, restructuring of wages, hours and modes
of engaging labour in the labour market, along with the shifting dynamics in the household
and unpaid spheres.
Policies of the kind currently in vogue aimed at growth, mutual obligation and
upgrading education and skills, were pursued in Australia during the Accord years.
Many of them have subsequently been continued by an openly neo-liberal Federal
Government. While controversy surrounds what this has meant for income
inequality, there is no debate about the outcomes associated with these policies
in terms of labour market inequality. The nature of these has been clearly and
lucidly analysed in Ian Watson’s paper elsewhere in this issue of the JIR (Watson
2002). It highlighted rising levels of inequality in hourly rates of pay. More significantly he highlighted the importance of understanding changing hours of
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work. These have intensified inequality in labour market earnings even more
significantly. It is well known that, allied to changes in hours of work have been
changes in modes of engaging labour on an increasingly casual, contractor or
labour hire basis. These modes of engagement also appeared to be associated
with deepening levels of inequality (see Buchanan 2000: chapter 11, for an analysis of this linkage between wages, hours of work and mode of engagement in the
metal industry in the 1990s).
In making sense of this outcome we have been greatly aided by the work of
Froud and her colleagues . They have analysed developments such as these based
on analysis of what they refer to as the emergence of trajectories of accumulation based on inequality (Froud et al. 1997, 1998, 1999, 2000, 2002). The key
features of these trajectories can be understood on the basis of a radical reworking of basic Keynesian categories concerning the circuits of consumption
and investment.1 The primary circuit of consumption involves flows between
workers and firms at the micro level, and between households and sectors at the
meso and macro levels (Froud et al. 1997). The secondary circuit involves flows
between different forms of savings and investment (Froud et al. 1998).
What makes this analytical framework particularly helpful is the insight that
‘the primary circuit of consumption [is best understood] in terms of the interaction between (household) consumption and the composition of employment
in an increasingly bipolar society’ (Froud et al. 1998: 5). As these researchers
explain:
High incomes stimulate more tertiary services which in turn spreads low wage
employment. Household services, such as child minding and cleaning for the money
rich and time poor, become increasingly commodified. This reinforces the effects
of corporate outsourcing which is being driven by cost recovery strategies.
At the other pole, low wages have an impact on the composition of demand. For
example, in the UK, private demand for new cars is actually declining and 40 per
cent of cars are now more than 9 years old (Froud et al. 1998).
This analysis suggests that the combination of ‘high incomes for some plus
enforced participation for others’ is a futile one for achieving stable economic
development. Detailed empirical studies indicating the relevance of such trends
in Australia are becoming available as analyses of developments in the 1980s and
1990s are completed (ACIRRT 1999; ABS 2000).2 Analysis of the growing participation of women in the labour market has fed this cycle of commodification,
and strengthened in new ways the linkages between employment, household consumption, working hours, precarious employment and (what many perceive to
be) a decline in the quality and nature of care, relationships and community
(Pocock 2001).
The secondary investment circuit identified by Froud and her colleagues is
responsible for intensifying inequality and unstable labour demand. This occurs
because ‘shareholder value’ is the dominant criterion guiding saving and investment. The pursuit of shareholder value causes endless restructures and cost shifting exercises which adversely affect the workforce. This manifests itself in the
labour market in a variety of ways. First, significant numbers of full time jobs are
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eradicated, especially in larger firms (ACIRRT 1999: 137). Second, increasing
numbers of jobs are of a ‘non-standard’ nature in which employers engage labour
without the obligations that have traditionally been associated with hiring
workers (e.g. Collins 1990; Campbell 1996; Gonos 1997; ACIRRT 1999:
139–142, 147–150). Far from solving the problem, the spread of share ownership and of privately based superannuation actually destabilises the situation
further (although it may also present as yet unrealised opportunities for interventions through shareholder action and investment shifting by employeeinfluenced superannuation managers). As Froud and her colleagues put it:
what we have is a Keynesian paradox about the unequal society where the pursuit
of individual security through investment in the capital market spreads collective
insecurity through labour market redundancy and re-employment which is part of
restructuring (Froud et al. 1998: 25).
The implications of the short run maximisation of shareholder value for developments in the labour market have recently been identified in a number of
studies examining the rise and implications of non-standard employment in
Australia (e.g. Hall et al. 2000).
Froud et al.’s analysis provides a very useful framework for thinking through
the challenges confronting policy and how these challenges have been met in
past and current situations. Our appropriation of their ideas for this purpose is
provided in the following four tables. Table 1 summarises the key categories
needed for thinking through changing forms of inequality.
The key things to note about this table are that when thinking about contemporary inequality it is important to consider dynamics at macro and micro
Table 1 A framework for clarifying key categories concerning changing forms of
inequality: elements and levels of economic flows
Level of economic
flow (and dimension)
Macro
price/financial
quantity/‘tangible’/
‘non-price’
Elements of economic flow
Production/Firms
and Workers
Consumption/Households
Investment regime
(e.g. I for shareholder
value)
Conditions of production
(e.g. excess capacity,
diffusion of new
technology)
Savings/wealth/income
regime
Micro
price/financial
Wages as labour cost
quantity/‘tangible’/
‘non-price’
Hours of work,
modes of engagement
Norms of consumption
(e.g. balance between
collective and individual
consumption,culture of
competitive consumption)
Wages as income (and
non-wage incomes)
Hours of non-paid work,
roles in division of labour
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levels and issues of consumption as well as production. And when considering
macro and micro dynamics it is important to consider price and non-price dimensions of economic reality. At the macro level the key issues needing to be addressed
on the production side are investment primarily driven by a concern to maximise
shareholder value and the problem of excess capacity. The key issues concerning consumption are the functional distribution of income, savings and wealth
as well as underlying norms of consumption. At the micro level the framework
highlights the importance of considering issues of wages, hours and modes of
engagement on the production side. It is important to note that the framework
could also be extended to include issues associated with the structure of capital,
especially network/supply-chain relations between firms and the contractual relations governing financial flows between them. On the consumption side, the key
issue highlighted by this framework concerns levels of income, hours available
for consumption and the division of labour between work and non-work in the
household.
Table 1 merely represents our reworking of key issues arising from the papers
by Froud et al. (2002) and Watson (2002). It is possible to now use this framework for summarising the key issues which policy needs to address if a
modern industrialised economy is to function. These are summarised in Table 2.
On the basis of this table it can be seen that there are four key challenges
confronting policy: securing profits, maintaining effective demand, establishing/
maintaining ‘proper’ jobs and establishing/maintaining ‘proper’ households. A
summary of how these problems have been addressed in the Australian setting
is provided in Table 3.
The top two cells outline the key features of the Australian or Federation settlement as commonly noted in the literature, namely the ascendancy of manufacturing capital and demand management arrangements (Connell & Irving 1980;
Macintyre 1985; ACIRRT 1999: chapter 2). What is not so commonly noted in
the literature are the micro level dimensions of this settlement. These concern
the classical wage-earner model of employment and the traditional breadwinner
model of the household (Buchanan & Watson 2000). This framework allows us
to characterise the nature of the current neo-liberal policy regime in terms summarised in Table 4.
Table 2
Key problems needing to be addressed in a modern, industrialised economy
Level of economic
flow (and dimension)
Macro
Micro
Elements of economic flow
Production/Firms
and Workers
Consumption/Households
Securing profits
(maximising revenue and
minimising costs)
Establishing and
maintaining ‘proper’ jobs
Maintaining effective
demand
Producing and reproducing
‘proper’ families and
households
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Using the framework derived in Table 4 we can characterise the nature of the
policy regime prevailing in the current situation as involving the following key
elements:
• the ascendancy of finance capital (see for example Brenner 1998; Bryan &
Rafferty 1999)
• a decline in interest in using domestic demand management to promote full
employment and help raise living standards for all. Instead there is now open
Table 3 Key features of ‘the Australian settlement’ defined in terms of addressing the
key problems of maintaining a functioning economy
Level of economic
flow (and dimension)
Macro
Micro
Elements of economic flow
Production/Firms
and Workers
Consumption/Households
Manufacturing capital
dominant(e.g. protection
and tight regulation of
financial capital)
Classical wage-earner model
of work
Demand management and
commitment to maintaining
high and growing level of
material consumption for all
Traditional breadwinner
model of the household.
Private,household
allocations of unpaid
work, mostly done by
women
Table 4 Key features of the current emerging neo-liberal regime defined in terms of
addressing the key problems of maintaining a functioning economy
Level of economic
flow (and dimension)
Elements of economic flow
Production/Firms
and Workers
Consumption/Households
Macro
Finance capital dominant
Micro
Breakdown of ‘classical
wage-earner’ and rise of
free contracting agent, and
precarious employment
Increasing reliance on
external sector for
aggregate demand and
diminishing interest in
raising living standards
for all
Breakdown in dominance of
traditional breadwinner
households and rise in zero
market income, single
income, single parent and
especially dual income
households
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policy interest in promoting domestic inequality (e.g. tax policy, wages
policy) and increased reliance on the external sector as a source of effective
demand (see for example ACIRRT 1999: chapter 2).
a breakdown in the classical wage-earner model of employment as both a
labour market reality and a policy aspiration. Instead there has been active
promotion of the vision of the ‘free contracting’ agent in its place––of the
unencumbered, eminently flexible individual making ‘choices’ within ‘ecstatic capitalism’ (as the Australian Financial Review described it on 2 April 2001).
A plethora of employment categories has emerged to minimise the reach of
social protections associated with workers engaged as classical wage earners
(see for example Burgess & Campbell 1998).
a shift in the structure of household forms away from ‘Harvester households’
with male breadwinners, so that 57 percent of Australian couple households
are now dual income (Buchanan & Thornthwaite 2001). There has also been
growth in zero income, single person and single parent households.
THESIS 3
Most attention in the papers by Froud et al. (2002) and Watson (2002) has focused on issues
of production. Issues of consumption and household dynamics require equal consideration,
alongside a broader conception of ‘work’ and analysis of changing gender regimes.
Distilling categories of analysis is difficult and usually unsatisfactory. Life is
complicated and we need to be careful in simplifying complex issues to a set of
simple propositions. The great benefit of having clear categories, however, is that
they can highlight issues requiring attention, and help map change. We would
argue that one of the major benefits of working with the categories identified
above is that they highlight that most of the attention at this symposium
has focused on issues of production, and those of consumption and household
structure and exchanges require equal consideration in formulating any new
approach to reducing inequality. In this light we argue for two supplementary
ideas: a model of the labour market that incorporates the categories of voluntary
and unpaid work, and an analysis that highlights the shifting boundaries of
commodification between these different sectors. This builds on the analysis of
feminist sociologists and economists.
Traditionally labour markets are analysed with respect only to the activities
that occur within the paid sphere, through the representation of three groups:
those in paid work, those looking for it, and those not in the labour force. But
this model has many ghosts that inhabit it invisibly. Glucksmann has argued for
the notion of the Total Social Organisation of Labour (TSOL) which suggests
that ‘the market and household economies of western industrial societies could
be conceptualized as two spheres (though certainly not the only two) of a larger
structure of production and reproduction. At any given time a particular form
of structural division and connection would be seen to exist between them such
that they were articulated in a particular manner’ (1995: 68). Such a conceptualisation must consider the intersections of paid work, unpaid domestic and
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caring work, voluntary work, and unemployment and the changing boundaries
of commodification. In Australia at present, we argue, such a holistic approach
to analysing work is essential to social, economic and industrial policy that has
real salience for most working households. Further, making these connections
will be central to mobilising a serious political force for change: communities,
women, children and whole households who personally count the cost of demanding workplaces and unfair domestic and caring burdens.
Other analysis suggests, further, that understanding the effects of changing
broadly defined work regimes cannot be understood at the level of the individual but must occur at the level of the household. For example, the growing perception of time starvation and pressure in American households is best explained,
according to Jacobs and Gerson (2001) not by growing hours of work for individuals (though there has been some) but by the shift toward the dual income
family formation (with more families contributing more hours jointly) resulting
in a community-wide depletion of non-work time. To understand work now in
Australia, it is essential to understand it both in its broadest dimension and in its
household circuitry.
Our research at the level of the household, using focus groups and interviews
mostly amongst women, suggests that important changes are afoot within this
complex circuitry (Pocock 2001). We see a rising and well documented increase
in women’s participation in paid work, most commonly within a dual income
household formation. Alongside that, there appears to be little compensating
change in domestic and caring work, and a decrease in some forms of voluntary
work (especially that associated with caring and child-rearing through the work
of mothers and grandparents). The pressures of these combined forms of work
are affecting women’s fertility decisions, relationships, the divorce rate, health,
well-being and workplace productivity. They mean that many children in informal care may be at risk. Our research points to an unfolding epidemic of guilt,
persistent private adjustment and readjustment, and domestic tension (Pocock
2001).
However, through this rise in paid work, consumption is boosted, as Froud
et al. have argued, as two workers now exist in growing numbers of households.
Such households turn to the market: for food, childcare, aged care, cleaning and
so on. Domestic and caring work is drawn out of the unpaid domestic sphere
and is commodified. This commodification is not confined to the wealthy; a great
deal of growth in the fast and convenience food industries is consumed in
middle and low income households, as busy women look for quick solutions that
are frequently expensive, which Schor referred to as the work-spend cycle (Schor
1993). What is more, the expansion in credit in Australian households feeds these
consumption trends across the range of income levels (as Schor found in the US).
It seems, however, that commodification does not stop with the consumption of
food and household support services: women in paid work also talk of buying
things for their children to appease the guilt they feel for working; they talk of
compensating for ‘not being there’ through things (Pocock 2001). And in this
their children are frequently happy supporters, as recent Australian research suggests (Lewis et al. 2001). In this way, at the most extreme, relations of love and
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care themselves become commodified. These trends are fine fuel for production,
consumption and legal and illegal exchange. The link between patterns of work
by individuals and households, and consumption is complex and powerful. In
short, we observe a strong coincidence between women’s desire to leave the
private sphere of the home and earn their own incomes and independence
over the past 30 years, and the market’s enthusiasm for their earnings to fuel
consumption.
There are other happy coincidences whereby the changing gender regime consolidates the cycles of production and consumption. Men’s resistance to domestic and caring work remains strong and we observe a pattern of increasing hours
of paid work among a significant number of them. Is it the case that masculinity is consolidated and reconstructed through increasing hours of paid working
time? As workplaces are increasingly greedy for long hours of work, perhaps men
are ‘protected’ from domestic and caring work. The hard-working male is offered
socially acceptable consolidation of his masculinity through the greedy workplace.
Are we observing a happy coincidence of masculinity with greedy capitalism,
hungry for men’s hours and happy to offer them a worthy public place through
which to continue to avoid the private domestic sphere and its work?3 A recent
study of 50 families with ‘extended hours’ workers indicates that this does appear
to be the case (Pockcock et al. 2001).
Belinda Probert (1997) has argued for the notion of a gender contract, building upon Pfau-Effinger (1993, 1994), ‘which seeks to locate the framework of
individual choices within an analysis of national culture––or to put it another
way in terms of “societal effects” ’ (1997: 10). It seems essential to locate
analysis of production/work systems, and policy in relation to equality within
them, within its gender regime or contract.
THESIS 4
There is no shortage of new policy ideas on how to address some of these issues. Most, however, are underdeveloped and the linkages between them have not been worked through.
Moreover any movement capable of pursuing progressive policies in the current situation is
conspicuously absent.
A number of very good proposals have been devised to respond to different dimensions of inequality emerging in Australia today. Arguably the most important have
concerned responding to unemployment. Leading contributors here have been:
Langmore and Quiggan (1994), Kenyon (1997) and Mitchell (1999). Other
important ideas have been formulated concerning the development of a competitive manufacturing sector. Leading work here has come from the MTIA
(1997), ABL (1997) and MTFU (2000). And in the area of linking labour market, social and industrial relations policy, work by ACIRRT has drawn on the
extensive work of Schmid et al. (e.g. 1995, 1998). Useful though many of these
ideas are, they have not cohered well into a clear program for change. As such
they are best seen as elements of a potential alternative policy response to the
current situation.
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Interestingly, feminist policy proposals have been thin on the ground in
Australia for much of the past decade in the face of conservatism. Where is the
ten-point plan for a new Labor Government, or an analysis of the weakness of
our bureaucratic-state strategy of recent decades? We have a patchy set of past
proposals that we continue to rely on (pay equity, publicly funded childcare etc.),
but the energetic impulse of the seventies and eighties is not very evident. We
believe that this element of analysis is quite critical to effective policy (and we
bear some responsibility for its current weakness!).
Equally striking in the current situation has been the absence of any serious
force dedicated to reducing inequality. Important work has been undertaken by
the community sector (e.g. ACOSS) and the churches (e.g. Brotherhood of
St Laurence). Historically, unions and the ALP have played a key role in championing the cause of fairness and reduced inequality. However, a legacy of the
Accord period has been legitimation by the combined labour movement of large
cuts in top marginal tax rates, acceptance (and active promotion) of increased
inequality in the labour market through enterprise bargaining, and acceptance of
cut-backs in the means of collective consumption through reduction in the size
and activity of the public sector. The inequality effects of these cuts in relation to
health, education and childcare (this last creating new tiered preschool systems
of class-replication), and their long term implications for inequality, can only be
described as alarming. Concern about inequality and economic dislocation has
been more effectively mobilised by the populist right (‘One Nation’) than any
progressive political movement. The various anti-globalisation mobilisations (e.g.
S11 and M1) however, indicate that significant mobilisations led by the left and
new forces outside traditional political formations are possible. Taken together,
however, these forces do not represent any serious or coherent alternative to the
current policy regime underpinning accumulation based on inequality.
We believe it is important to note that the tired and disparate nature of alternative policy ideas on offer, and the disparate nature of the forces concerned with
reducing inequality, are not unrelated phenomena. This leads to our fifth thesis.
THESIS 5
Specific policy proposals cannot be usefully considered independently of the forces that will
promote and implement them. The major challenge for policy research on inequality in the
current situation is to identify the key categories capable of simultaneously linking (a) new
approaches to reducing inequality and (b) providing a focal point for mobilising support for
such policies. While they are not everything, ideas matter.
We argue that inequality is created through dynamics occurring at macro and
micro levels involving flows of production and consumption, investment and
saving, within a specific gender regime. As noted above we need to understand
these dynamics to respond appropriately. In thinking through responses we need
to identify key categories for:
• providing a basis for thinking through policies that will result in a better
management of macro and micro flows and production and consumption.
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providing an effective basis for mobilising support amongst a broad constituency for change to achieve more desirable/less unequal flows in production and consumption.
Most importantly these categories need to work at both levels, that is, the level
of policy development and the level of mobilisation of support, to have effect.
In suggesting a way forward our major proposal is that more attention needs
to be devoted to identifying categories that will help disparate ideas and forces
coalesce around a common program. Such an endeavour has many pitfalls. The
first is quite practical: is this an issue academic researchers should even consider
addressing? Many academics would argue that this is not a research problem but
a political one. We reject this characterisation. Comprehending the current
situation is difficult for anyone. Identifying ways of responding to it is even harder.
Researchers have a vital role to play in both processes. If scholarly social scientists do not do it directly, other researchers (e.g. consultants, Business School
academics) will do it anyway.
Arguably the more serious problem concerns the nature of the venture. There
is the potential problem of being too reductionist in trying to find categories that
address both issues of policy design and those of political mobilisation. What’s
good in one domain is not necessarily relevant in another. We have considerable
sympathy with this concern. But our concern is that, unless the effort is made to
find categories that can work in both domains, progress in each will be limited
by lack of linkage between them.
In this regard we have been motivated by consideration of the different
experiences in the role of progressive economic analyses in the UK and Sweden
in the 1950s and 1960s. It will be remembered that in the 1960s after many years
of debate, Samuelson eventually conceded that Sraffa’s critique of orthodox
marginal productivity theory as it applied to capital was correct (Dobb 1973).
This was heralded at the time as a major breakthrough in piercing the legitimacy
of orthodox economic analysis. The practical outcome for the British labour
movement was negligible to say the least. We contrast this with the experience
of researchers associated with the Swedish labour movement at the time, especially Rehn and Meidner. While their work was not as ‘scholarly’ as Sraffa’s, it
was in many ways just as novel analytically (Martin 1984; Swensen 1989).
Moreover, it provided clear guidance in the conduct of day to day policy concerning wages, labour market structures and levels and distribution of public
expenditure, especially on training and labour market programs. Most importantly of all, it provided the basis for ongoing analytical and policy development
as the crisis of the 1970s unfolded. Meidner’s wage-earner fund proposal struck
stiff political resistance, but at least offered important insights into what might
be possible as an alternative response to the crisis (Pontusson 1992). And Rehn’s
ideas about life cycle entitlements contributed to the development of a whole
new agenda for managing working time in the 1970s and 1980s (e.g. debate on
maternity leave and free universal childcare). We believe it is important to
foster a research agenda inspired more by the Swedish experience than by that
of Cambridge. This is not to deny a role of purely analytical and scholarly
research. It is, however, our submission that greater attention needs to be devoted
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to pursuing research into issues that straddle analytical, policy and strategic
concerns.
Given this reasoning we can elaborate our thesis a little in the following terms:
the key challenge is to identify/develop the basic categories that can help guide the
development, and linking of, new approaches to economic, social, labour market and
industrial relations policy. Such categories are also needed to provide a basis around
which movements committed to reducing inequality can cohere.
What categories are most likely to perform the role of fostering a more
coherent policy and popular response to the current situation?
THESIS 6
At the most general level we submit that categories of three different types are needed. These
concern notions of sustainable economic development, the place of competition in economic
development and the notion of working life rights conceived as enhancing citizens’ and households’ choices over the life cycle.
(a) Categories concerning fundamental economic priorities: sustaining life vs
sustaining markets.
Arguably the most common response to any agenda for progressive economic
and social reform is: ‘while the proposals may be interesting they are simply not
viable or economically sustainable’.
Arguments of this nature need to be confronted directly. The central assumption of such responses is that the current policy mix is sustainable. This is a problematic assumption. Current capital market arrangements, for example, are
creating a perverse situation where most firms are being restructured not because
they are running at a loss but because they are not making enough profit (Froud
et al. 2002). Such a situation must hit limits of sustainability at some point.
The problem of sustainability is more pronounced at the social and political
levels. Markets need social and political conditions of existence––they are not
spontaneous creatures. Yet the kind of market system currently dominant (i.e.
financialised or coupon pool capitalism to use Froud et al.’s terms) does not recognise the importance of making allowance for nurturing these conditions. Worse,
the Canadian philosopher John McMurtry has recently argued at length that the
current stage of economic development is best characterised as the ‘cancer stage
of capitalism’ (McMurtry 1998: 360, 379; 1999). As he notes, destruction of social
and natural infrastructure (what he calls the civil commons) in fact works to
create new ‘market opportunities’ (1998: 366). For example, the erosion of standards of service in public education, public health and public transport as well
as emerging environmental problems, create new markets for ‘growth.’ As a result
‘money is not used for life. Life is used for money. The final measure of the Good
is an increase or decrease in money sums’ (1998: 299). In responding to the
current situation McMurtry argues that the question is not one of a purely moral
choice between equally acceptable ethical options. As he puts it: ‘The problem
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is not one of being unable to tell the difference between good and bad [but rather
in distinguishing] between what disables and what enables life’ (1998: 356).
Assuming we are interested in life, the choice is therefore easy––to move beyond
the market approach. For ‘life as such has no value in this ethical system. Questions
about starving people, malnourished children belong to the clergy, the moralist,
and the politician and must be kept from interfering in the market’s laws of
supply and demand’ (1998: 240).
(b) Categories that provide criteria for institutional design concerning macro
flows: disciplining competition vs being disciplined by it.
Watson’s (2002) paper was quite explicit in identifying market competition as
the root cause of inequality in the contemporary Australian labour market.
Drawing on Botwinick (1993) he noted that the problem should not be conceptualised on the basis of a ‘quantity theory of competition’ but rather in terms
of capitalist competition involving, inter alia, dynamics of a reserve army and a
struggle amongst competing capitals to gain access to privileged income streams.
Similar dynamics were noted in passing in the paper by Froud and her colleagues.
The problem of excess capacity in the sphere of production has been convincingly traced back by Brenner (1998) to excessive inter-capitalist competition.
Within the financialised sector a lemming-like pursuit amongst funds managers
(and their customers) for maximising shareholder value has driven the system of
coupon pool capitalism to seeking higher and higher rates of return which are
both unattainable and disruptive to organisational stability. Finally Schor (1998)
has noted the emergence of a culture of competitive consumption that has
emerged since the 1970s which has driven much consumer behaviour since that
time. This has played a major role in contributing to a deterioriating situation
in hours of work, especially amongst upper decile workers, and fuelled demand
for cheap household services. Clearly competition needs, in the words of
Beveridge, to become a servant and not the master of economic development if
dynamics such as these are to be arrested.
(c) Categories that can provide criteria for institutional design concerning micro
flows: i.e. we need a new conception of working life rights concerned with enhancing citizens’ and households’ choices over the life cycle as the alternative to the
classical wage-earner and neo-liberal conceptions of working and home life.
From our research to date we believe the key categories to work with in this
regard need to move beyond the classical labourist and liberal collectivist notions
of what we call the ‘classical wage-earner’ model of work and the ‘breadwinner’
model of the household. Equally it is important to move beyond the neo-liberal
notion of the ‘free individual agent’ in the economy and the ‘autonomous
family’ vision of the household (Buchanan & Watson 2001; Pocock 2001). In place
of these categories we think it is more useful to work with the notion of promoting fairness and efficiency through enhancing citizen’s choices over the life
cycle. (We elaborate on what is meant by this in Thesis 8 below).
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THESIS 7
Arguably the most pressing priority is to identify how the rights of citizens can be enhanced
over the life cycle.
An effective program of change needs to work at a number of levels. Priorities
do, however, need to be identified. In the current situation we argue that priority should be accorded to proposition 6(c) above––that is, developing an alternative approach to managing working and home life. This is for two reasons.
The first concerns policy development. Too often abstract ideas about things like
macroeconomic policies directed at operating in a situation of excess capacity
and financialisation, are weak in their conceptualisation of what types of jobs are
created by interventions at this level. This was clearly the case in the Accord years
where 69 per cent of net employment growth was either casual or contractor in
nature (ABS 1999: 3). Clarifying what is meant by working and household life
can help ensure that initiatives at the level of macroeconomic policy are supported
by appropriate micro initiatives to achieve desired qualitative outcomes. The
second reason for elevating this aspect of policy is more pragmatic. Issues of working and home life are matters of immediate concern to a wide range of people.
Developing coherent and attractive ideas on them will therefore be central to
achieving the large scale mobilisation necessary to carry through a more comprehensive approach to combatting inequality.
THESIS 8
The key categories of concern associated with enhancing citizens’ and households’ choices over
the lifecycle require redefining central features of the employment contract and the unpaid
household/gender contract.
On the basis of work we have done recently on the changing nature of work and
the restructuring of work and family life we make proposals in two main areas:
first in relation to the paid employment contract, and second in relation to unpaid
work and households, families and community.
(a) the paid employment contract:
categories about work need to leave behind the free contracting agent and
instead deal with notions of ‘worker’, and ‘employment situations’ and ‘transitional labour markets.’ This requires a dramatic reworking of the notion of
‘standard employment.’
The essential features of what we call the classical wage-earner model of standard employment are well known. It involved workers (who were often tacitly
conceived as male) engaged full time on a continuous (or full year basis) as employees (i.e. not as contractors). Typically it was also assumed that the employer was
a large scale enterprise that owned and controlled the place of work.
In place of the classical wage-earner model we propose a more
ELEVEN THESES CONCERNING THE
REDESIGN OF POLICIES AND AGENTS
FOR REFORM
JOHN BUCHANAN AND BARBARA POCOCK*
T
his paper addresses two questions: What can be done to address the forces driving
inequality in Australia today? And who can do it? We suggest that we need
better tools of analysis to understand the current situation and better categories to help
understand the links between work, social, and economic life. We go on to suggest, more
tentatively, that these categories can also provide important tools for developing new
policy ideas. We also show how these categories can guide initiatives directed at mobilising support for a new approach to combating inequality today. The argument is structured around eleven theses.
The previous papers have considered different aspects of the changing
dynamics driving inequality today. It is now necessary to consider the
questions: What can be done to address these dynamics? And who can do it? We
offer a very tentative set of ideas about the Australian situation and we look
forward to a deeper, sustained debate about inequality and strategies to meet
it––one that has been quiescent in Australia over the past ten years.
In addressing these questions we have built on our previous analyses of the
changing nature of work and especially the changing gender dynamics of working life. (See for example, ACIRRT 1999, Pocock 2001). This paper represents
a written account of some preliminary thinking arising from work we have been
undertaking together and separately over the last five years, associated with advising the Australian union movement, employer organisations, and governments
of various persuasions on how to respond to the current situation. It is schematic
in nature and blunt in presentation. It has been drafted to provoke debate.
Our starting point has been consideration of the question: what should a progressive policy mix look like in the light of the experience of the Accord? We are
unhappy with the two major responses that have emerged to date: policies of the
‘third way’ (or neo-liberalism with a human face) on the one hand, and the return
to classical blue-collar industrial militancy on the other. In thinking through prac* John Buchanan, ACIRRT, University of Sydney. Email: j.buchanan@econ.usyd.edu.au and Barbara
Pocock, Centre for Labour Studies, University of Adelaide. This paper has benefited greatly from
comments provided by participants at the ACIRRT symposium on inequality held at the University
of Sydney, 18 May 2001. The commentary on the paper by Louise Tarrant and Michael Crosby
has been especially useful. Helpful comments were also provided by Robert Brenner. The usual
disclaimer applies.
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tical responses to inequality today we have built on two literatures. The first
concerns the need to rethink the linkages between economic, social, labour
market, skill formation and industrial relations policy on the basis of an approach
to life cycle conceived in terms of ‘transitional labour markets’ (see for example
Schmid 1995). The second concerns the debate about union renewal based on
the so-called ‘organising model’. (See for example Labor Research Review 1991,
Bronfenbrenner & Juravich 1998, Cooper 2001).
Useful as debates on these issues have been, they too suffer from a number of
limitations; we will mention four. First, these approaches give only limited consideration to the realities of involving employers/management in any program
for reform. Second––and arguably of greater significance––is the limited attention devoted to identifying how state structures and personnel need to be reformed
to ensure new initiatives directed at reducing inequality are effectively implemented in practice. Third, serious reflective debate about the lessons of the Accord
years has been conspicuously absent in Australia. Steep declines in union density continued through the period of Labor government (1983–96). Of course
much of the explanation for this decline lies in labour market restructuring, but
other factors were equally, if not more, important. In particular this period saw
the demobilisation of an independent union voice in Australia. During this period
key leaders in the union movement endorsed or initiated a range of industrial,
education and labour market initiatives that paved the way for a conservative
onslaught and radically reshaped key planks of Australia’s social and industrial
safety net. They may have staved off worse things (as Labor protagonists claim)
but the implications for inequality are undeniable. The fourth issue, neglected
in the literature and policy debate to date, is that the developments resulted in
a deep loss of confidence amongst labour’s foot soldiers: workplace activists.
We examine these issues in this paper. We suggest that we need better tools
of analysis to understand the current situation and better categories to help understand the links between work, social, and economic life. We go on to suggest,
more tentatively, that these categories can also provide important tools for developing new policy ideas. We also show how these categories can guide initiatives
directed at mobilising support for a new approach to combating inequality today.
Our argument can be simply stated in eleven theses:
1. Current mainstream responses to inequality focus primarily on promoting
growth in jobs of any quality, training/education and targetted income support
based increasingly on the obligation of welfare beneficiaries to labour for the
state, ‘community’ and/or employers.
2. Policies of this nature will not succeed in reducing inequality because they
do not address the key dynamics considered in the papers by Froud et al. and
Watson in this issue of the JIR. That is, accumulation based on inequality,
restructuring of wages, hours, and modes of engaging labour in the labour
market, along with the shifting dynamics in the household and unpaid spheres.
3. Most attention in these papers has focused on issues of production. Issues of
consumption and household dynamics require equal consideration, alongside
a broader conception of ‘work’ and analysis of changing gender regimes.
4. There is no shortage of new policy ideas on how to address these issues. Most,
however, are underdeveloped and the linkages between them have not been
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worked through. Moreover, any movement capable of pursuing progressive
policies in the current situation is conspicuously absent.
5. Specific policy proposals cannot be usefully considered independently of the
forces that will promote and implement them. The major challenge in the
current situation is to identify the key categories capable of (a) simultaneously linking new approaches to reducing inequality and (b) providing a focal
point for mobilising support for such policies. While they are far from everything, ideas matter.
6. At the most general level we submit that categories of three different types
are needed. These concern notions of sustainable economic development, the
place of competition in economic development, and working life rights.
7. Arguably the most pressing priority is to identify how the rights of citizens
and households can be enhanced over the life cycle.
8. The key categories of concern associated with enhancing citizens’ and households’ choices over the life cycle require redefining the central features of
the employment contract and the unpaid household/gender contract.
9. This approach also means reconsidering the roles and structures of social
agents involved in establishing and implementing a new policy approach.
In particular, attention needs to be devoted to the role of unions, nongovernment organisations (NGOs), employers and the state.
10. The logical conclusion of these theses is that most of what is currently offered
as policy to redress inequality is flawed. A new policy agenda is urgently
required, along with a new public articulation of the possibilities and promise
of such policy across a range of progressive institutions and interests.
11. Not only are most alternative policy ideas on offer flawed. Equally deficient
has been the process of policy development. Arguably the greatest practical
challenge in the current situation concerns the need to improve the process
of intellectual and organisational renewal among those concerned with
inequality today.
THESIS 1
Current mainstream responses to inequality focus primarily on promoting growth in jobs
of any quality, training/education, and targetted income support based increasingly on
the obligation of welfare beneficiaries to labour for the state, ‘community’ and/or employers.
Since the early 1970s most advanced capitalist countries have experienced a
deteriorating labour market situation. This has had quantitative and qualitative
dimensions. The most significant quantitative dimension has been the return of
mass unemployment. While joblessness has fluctuated with the trade cycle, unemployment has settled at a higher level at the end of each cycle. More importantly
there is growing evidence that, on balance, the quality of jobs is deteriorating.
This is evident in rising levels of involuntary part-time work and the growth in
many forms of non-standard employment (ACIRRT 1999).
In parallel with these developments there has been a shift in policy about work.
Whereas an earlier generation of policy makers attempted to improve wages and
employment conditions directly, belief in the efficacy of such interventions has
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declined. In English-speaking countries especially, interest in income support and
training appears to be replacing an earlier interest in improving the nature and
content of work, especially wages and hours of work. Such developments are
presented as ‘innovations’ by adherents of the third way. Indeed, interest in training and new forms of income support such as tax credits is presented as a break
with the kind of neo-liberalism which dominated government in the English
speaking world during the 1980s and 1990s. But while the ascendancy of the ‘new
right’ has waned, the legacies of this period survive. Many neo-liberal precepts
remain, especially those concerning the alleged superiority of markets. Adherents
of ‘the third way’ now promise to transcend the limitations of both classical social
democracy and ‘new right’ neo-liberalism. This political tendency, primarily
associated with Clinton’s Democrats in the US and Blair’s ‘New’ Labour in the
UK, purports to redefine politics around the ‘radical centre’. Electorates in the
English speaking world are now offered a ‘new’ vision for our time––neoliberalism with a human face.
Many traditional labour-movement policies have been ‘modernised’ by ‘third
way’ adherents in an effort to meet the allegedly uncompromising demands of
globalisation. This has been the case especially in policies concerning labour
related issues. The objective of full employment has been eclipsed by the promise
of ‘full employability’. ‘Flexibility’ now ranks equally with (if not higher than)
fairness in industrial relations and wages policy. And the discourse of ‘mutual
obligation’ appears to have displaced a concern with universal rights of citizenship in social policy. On the other hand, traditional targets of policy concern have
slipped from view altogether. Whereas once the labour movement aimed to discipline the market, the current fashion of competition policy and ‘deregulation’
indicates a preference for enlarging the areas of social life disciplined by market
forces. Beveridge’s dictum that markets make good servants but bad masters
appears to have been lost on many social democratic leaders, especially in the
English speaking world (Buchanan & Watson 2000).
THESIS 2
Policies of this nature will not succeed in reducing inequality because they do not address the
key dynamics considered in the papers prepared by Froud et al. and Watson in this issue of
the JIR. That is, accumulation based on inequality, restructuring of wages, hours and modes
of engaging labour in the labour market, along with the shifting dynamics in the household
and unpaid spheres.
Policies of the kind currently in vogue aimed at growth, mutual obligation and
upgrading education and skills, were pursued in Australia during the Accord years.
Many of them have subsequently been continued by an openly neo-liberal Federal
Government. While controversy surrounds what this has meant for income
inequality, there is no debate about the outcomes associated with these policies
in terms of labour market inequality. The nature of these has been clearly and
lucidly analysed in Ian Watson’s paper elsewhere in this issue of the JIR (Watson
2002). It highlighted rising levels of inequality in hourly rates of pay. More significantly he highlighted the importance of understanding changing hours of
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work. These have intensified inequality in labour market earnings even more
significantly. It is well known that, allied to changes in hours of work have been
changes in modes of engaging labour on an increasingly casual, contractor or
labour hire basis. These modes of engagement also appeared to be associated
with deepening levels of inequality (see Buchanan 2000: chapter 11, for an analysis of this linkage between wages, hours of work and mode of engagement in the
metal industry in the 1990s).
In making sense of this outcome we have been greatly aided by the work of
Froud and her colleagues . They have analysed developments such as these based
on analysis of what they refer to as the emergence of trajectories of accumulation based on inequality (Froud et al. 1997, 1998, 1999, 2000, 2002). The key
features of these trajectories can be understood on the basis of a radical reworking of basic Keynesian categories concerning the circuits of consumption
and investment.1 The primary circuit of consumption involves flows between
workers and firms at the micro level, and between households and sectors at the
meso and macro levels (Froud et al. 1997). The secondary circuit involves flows
between different forms of savings and investment (Froud et al. 1998).
What makes this analytical framework particularly helpful is the insight that
‘the primary circuit of consumption [is best understood] in terms of the interaction between (household) consumption and the composition of employment
in an increasingly bipolar society’ (Froud et al. 1998: 5). As these researchers
explain:
High incomes stimulate more tertiary services which in turn spreads low wage
employment. Household services, such as child minding and cleaning for the money
rich and time poor, become increasingly commodified. This reinforces the effects
of corporate outsourcing which is being driven by cost recovery strategies.
At the other pole, low wages have an impact on the composition of demand. For
example, in the UK, private demand for new cars is actually declining and 40 per
cent of cars are now more than 9 years old (Froud et al. 1998).
This analysis suggests that the combination of ‘high incomes for some plus
enforced participation for others’ is a futile one for achieving stable economic
development. Detailed empirical studies indicating the relevance of such trends
in Australia are becoming available as analyses of developments in the 1980s and
1990s are completed (ACIRRT 1999; ABS 2000).2 Analysis of the growing participation of women in the labour market has fed this cycle of commodification,
and strengthened in new ways the linkages between employment, household consumption, working hours, precarious employment and (what many perceive to
be) a decline in the quality and nature of care, relationships and community
(Pocock 2001).
The secondary investment circuit identified by Froud and her colleagues is
responsible for intensifying inequality and unstable labour demand. This occurs
because ‘shareholder value’ is the dominant criterion guiding saving and investment. The pursuit of shareholder value causes endless restructures and cost shifting exercises which adversely affect the workforce. This manifests itself in the
labour market in a variety of ways. First, significant numbers of full time jobs are
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eradicated, especially in larger firms (ACIRRT 1999: 137). Second, increasing
numbers of jobs are of a ‘non-standard’ nature in which employers engage labour
without the obligations that have traditionally been associated with hiring
workers (e.g. Collins 1990; Campbell 1996; Gonos 1997; ACIRRT 1999:
139–142, 147–150). Far from solving the problem, the spread of share ownership and of privately based superannuation actually destabilises the situation
further (although it may also present as yet unrealised opportunities for interventions through shareholder action and investment shifting by employeeinfluenced superannuation managers). As Froud and her colleagues put it:
what we have is a Keynesian paradox about the unequal society where the pursuit
of individual security through investment in the capital market spreads collective
insecurity through labour market redundancy and re-employment which is part of
restructuring (Froud et al. 1998: 25).
The implications of the short run maximisation of shareholder value for developments in the labour market have recently been identified in a number of
studies examining the rise and implications of non-standard employment in
Australia (e.g. Hall et al. 2000).
Froud et al.’s analysis provides a very useful framework for thinking through
the challenges confronting policy and how these challenges have been met in
past and current situations. Our appropriation of their ideas for this purpose is
provided in the following four tables. Table 1 summarises the key categories
needed for thinking through changing forms of inequality.
The key things to note about this table are that when thinking about contemporary inequality it is important to consider dynamics at macro and micro
Table 1 A framework for clarifying key categories concerning changing forms of
inequality: elements and levels of economic flows
Level of economic
flow (and dimension)
Macro
price/financial
quantity/‘tangible’/
‘non-price’
Elements of economic flow
Production/Firms
and Workers
Consumption/Households
Investment regime
(e.g. I for shareholder
value)
Conditions of production
(e.g. excess capacity,
diffusion of new
technology)
Savings/wealth/income
regime
Micro
price/financial
Wages as labour cost
quantity/‘tangible’/
‘non-price’
Hours of work,
modes of engagement
Norms of consumption
(e.g. balance between
collective and individual
consumption,culture of
competitive consumption)
Wages as income (and
non-wage incomes)
Hours of non-paid work,
roles in division of labour
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levels and issues of consumption as well as production. And when considering
macro and micro dynamics it is important to consider price and non-price dimensions of economic reality. At the macro level the key issues needing to be addressed
on the production side are investment primarily driven by a concern to maximise
shareholder value and the problem of excess capacity. The key issues concerning consumption are the functional distribution of income, savings and wealth
as well as underlying norms of consumption. At the micro level the framework
highlights the importance of considering issues of wages, hours and modes of
engagement on the production side. It is important to note that the framework
could also be extended to include issues associated with the structure of capital,
especially network/supply-chain relations between firms and the contractual relations governing financial flows between them. On the consumption side, the key
issue highlighted by this framework concerns levels of income, hours available
for consumption and the division of labour between work and non-work in the
household.
Table 1 merely represents our reworking of key issues arising from the papers
by Froud et al. (2002) and Watson (2002). It is possible to now use this framework for summarising the key issues which policy needs to address if a
modern industrialised economy is to function. These are summarised in Table 2.
On the basis of this table it can be seen that there are four key challenges
confronting policy: securing profits, maintaining effective demand, establishing/
maintaining ‘proper’ jobs and establishing/maintaining ‘proper’ households. A
summary of how these problems have been addressed in the Australian setting
is provided in Table 3.
The top two cells outline the key features of the Australian or Federation settlement as commonly noted in the literature, namely the ascendancy of manufacturing capital and demand management arrangements (Connell & Irving 1980;
Macintyre 1985; ACIRRT 1999: chapter 2). What is not so commonly noted in
the literature are the micro level dimensions of this settlement. These concern
the classical wage-earner model of employment and the traditional breadwinner
model of the household (Buchanan & Watson 2000). This framework allows us
to characterise the nature of the current neo-liberal policy regime in terms summarised in Table 4.
Table 2
Key problems needing to be addressed in a modern, industrialised economy
Level of economic
flow (and dimension)
Macro
Micro
Elements of economic flow
Production/Firms
and Workers
Consumption/Households
Securing profits
(maximising revenue and
minimising costs)
Establishing and
maintaining ‘proper’ jobs
Maintaining effective
demand
Producing and reproducing
‘proper’ families and
households
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Using the framework derived in Table 4 we can characterise the nature of the
policy regime prevailing in the current situation as involving the following key
elements:
• the ascendancy of finance capital (see for example Brenner 1998; Bryan &
Rafferty 1999)
• a decline in interest in using domestic demand management to promote full
employment and help raise living standards for all. Instead there is now open
Table 3 Key features of ‘the Australian settlement’ defined in terms of addressing the
key problems of maintaining a functioning economy
Level of economic
flow (and dimension)
Macro
Micro
Elements of economic flow
Production/Firms
and Workers
Consumption/Households
Manufacturing capital
dominant(e.g. protection
and tight regulation of
financial capital)
Classical wage-earner model
of work
Demand management and
commitment to maintaining
high and growing level of
material consumption for all
Traditional breadwinner
model of the household.
Private,household
allocations of unpaid
work, mostly done by
women
Table 4 Key features of the current emerging neo-liberal regime defined in terms of
addressing the key problems of maintaining a functioning economy
Level of economic
flow (and dimension)
Elements of economic flow
Production/Firms
and Workers
Consumption/Households
Macro
Finance capital dominant
Micro
Breakdown of ‘classical
wage-earner’ and rise of
free contracting agent, and
precarious employment
Increasing reliance on
external sector for
aggregate demand and
diminishing interest in
raising living standards
for all
Breakdown in dominance of
traditional breadwinner
households and rise in zero
market income, single
income, single parent and
especially dual income
households
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policy interest in promoting domestic inequality (e.g. tax policy, wages
policy) and increased reliance on the external sector as a source of effective
demand (see for example ACIRRT 1999: chapter 2).
a breakdown in the classical wage-earner model of employment as both a
labour market reality and a policy aspiration. Instead there has been active
promotion of the vision of the ‘free contracting’ agent in its place––of the
unencumbered, eminently flexible individual making ‘choices’ within ‘ecstatic capitalism’ (as the Australian Financial Review described it on 2 April 2001).
A plethora of employment categories has emerged to minimise the reach of
social protections associated with workers engaged as classical wage earners
(see for example Burgess & Campbell 1998).
a shift in the structure of household forms away from ‘Harvester households’
with male breadwinners, so that 57 percent of Australian couple households
are now dual income (Buchanan & Thornthwaite 2001). There has also been
growth in zero income, single person and single parent households.
THESIS 3
Most attention in the papers by Froud et al. (2002) and Watson (2002) has focused on issues
of production. Issues of consumption and household dynamics require equal consideration,
alongside a broader conception of ‘work’ and analysis of changing gender regimes.
Distilling categories of analysis is difficult and usually unsatisfactory. Life is
complicated and we need to be careful in simplifying complex issues to a set of
simple propositions. The great benefit of having clear categories, however, is that
they can highlight issues requiring attention, and help map change. We would
argue that one of the major benefits of working with the categories identified
above is that they highlight that most of the attention at this symposium
has focused on issues of production, and those of consumption and household
structure and exchanges require equal consideration in formulating any new
approach to reducing inequality. In this light we argue for two supplementary
ideas: a model of the labour market that incorporates the categories of voluntary
and unpaid work, and an analysis that highlights the shifting boundaries of
commodification between these different sectors. This builds on the analysis of
feminist sociologists and economists.
Traditionally labour markets are analysed with respect only to the activities
that occur within the paid sphere, through the representation of three groups:
those in paid work, those looking for it, and those not in the labour force. But
this model has many ghosts that inhabit it invisibly. Glucksmann has argued for
the notion of the Total Social Organisation of Labour (TSOL) which suggests
that ‘the market and household economies of western industrial societies could
be conceptualized as two spheres (though certainly not the only two) of a larger
structure of production and reproduction. At any given time a particular form
of structural division and connection would be seen to exist between them such
that they were articulated in a particular manner’ (1995: 68). Such a conceptualisation must consider the intersections of paid work, unpaid domestic and
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caring work, voluntary work, and unemployment and the changing boundaries
of commodification. In Australia at present, we argue, such a holistic approach
to analysing work is essential to social, economic and industrial policy that has
real salience for most working households. Further, making these connections
will be central to mobilising a serious political force for change: communities,
women, children and whole households who personally count the cost of demanding workplaces and unfair domestic and caring burdens.
Other analysis suggests, further, that understanding the effects of changing
broadly defined work regimes cannot be understood at the level of the individual but must occur at the level of the household. For example, the growing perception of time starvation and pressure in American households is best explained,
according to Jacobs and Gerson (2001) not by growing hours of work for individuals (though there has been some) but by the shift toward the dual income
family formation (with more families contributing more hours jointly) resulting
in a community-wide depletion of non-work time. To understand work now in
Australia, it is essential to understand it both in its broadest dimension and in its
household circuitry.
Our research at the level of the household, using focus groups and interviews
mostly amongst women, suggests that important changes are afoot within this
complex circuitry (Pocock 2001). We see a rising and well documented increase
in women’s participation in paid work, most commonly within a dual income
household formation. Alongside that, there appears to be little compensating
change in domestic and caring work, and a decrease in some forms of voluntary
work (especially that associated with caring and child-rearing through the work
of mothers and grandparents). The pressures of these combined forms of work
are affecting women’s fertility decisions, relationships, the divorce rate, health,
well-being and workplace productivity. They mean that many children in informal care may be at risk. Our research points to an unfolding epidemic of guilt,
persistent private adjustment and readjustment, and domestic tension (Pocock
2001).
However, through this rise in paid work, consumption is boosted, as Froud
et al. have argued, as two workers now exist in growing numbers of households.
Such households turn to the market: for food, childcare, aged care, cleaning and
so on. Domestic and caring work is drawn out of the unpaid domestic sphere
and is commodified. This commodification is not confined to the wealthy; a great
deal of growth in the fast and convenience food industries is consumed in
middle and low income households, as busy women look for quick solutions that
are frequently expensive, which Schor referred to as the work-spend cycle (Schor
1993). What is more, the expansion in credit in Australian households feeds these
consumption trends across the range of income levels (as Schor found in the US).
It seems, however, that commodification does not stop with the consumption of
food and household support services: women in paid work also talk of buying
things for their children to appease the guilt they feel for working; they talk of
compensating for ‘not being there’ through things (Pocock 2001). And in this
their children are frequently happy supporters, as recent Australian research suggests (Lewis et al. 2001). In this way, at the most extreme, relations of love and
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care themselves become commodified. These trends are fine fuel for production,
consumption and legal and illegal exchange. The link between patterns of work
by individuals and households, and consumption is complex and powerful. In
short, we observe a strong coincidence between women’s desire to leave the
private sphere of the home and earn their own incomes and independence
over the past 30 years, and the market’s enthusiasm for their earnings to fuel
consumption.
There are other happy coincidences whereby the changing gender regime consolidates the cycles of production and consumption. Men’s resistance to domestic and caring work remains strong and we observe a pattern of increasing hours
of paid work among a significant number of them. Is it the case that masculinity is consolidated and reconstructed through increasing hours of paid working
time? As workplaces are increasingly greedy for long hours of work, perhaps men
are ‘protected’ from domestic and caring work. The hard-working male is offered
socially acceptable consolidation of his masculinity through the greedy workplace.
Are we observing a happy coincidence of masculinity with greedy capitalism,
hungry for men’s hours and happy to offer them a worthy public place through
which to continue to avoid the private domestic sphere and its work?3 A recent
study of 50 families with ‘extended hours’ workers indicates that this does appear
to be the case (Pockcock et al. 2001).
Belinda Probert (1997) has argued for the notion of a gender contract, building upon Pfau-Effinger (1993, 1994), ‘which seeks to locate the framework of
individual choices within an analysis of national culture––or to put it another
way in terms of “societal effects” ’ (1997: 10). It seems essential to locate
analysis of production/work systems, and policy in relation to equality within
them, within its gender regime or contract.
THESIS 4
There is no shortage of new policy ideas on how to address some of these issues. Most, however, are underdeveloped and the linkages between them have not been worked through.
Moreover any movement capable of pursuing progressive policies in the current situation is
conspicuously absent.
A number of very good proposals have been devised to respond to different dimensions of inequality emerging in Australia today. Arguably the most important have
concerned responding to unemployment. Leading contributors here have been:
Langmore and Quiggan (1994), Kenyon (1997) and Mitchell (1999). Other
important ideas have been formulated concerning the development of a competitive manufacturing sector. Leading work here has come from the MTIA
(1997), ABL (1997) and MTFU (2000). And in the area of linking labour market, social and industrial relations policy, work by ACIRRT has drawn on the
extensive work of Schmid et al. (e.g. 1995, 1998). Useful though many of these
ideas are, they have not cohered well into a clear program for change. As such
they are best seen as elements of a potential alternative policy response to the
current situation.
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Interestingly, feminist policy proposals have been thin on the ground in
Australia for much of the past decade in the face of conservatism. Where is the
ten-point plan for a new Labor Government, or an analysis of the weakness of
our bureaucratic-state strategy of recent decades? We have a patchy set of past
proposals that we continue to rely on (pay equity, publicly funded childcare etc.),
but the energetic impulse of the seventies and eighties is not very evident. We
believe that this element of analysis is quite critical to effective policy (and we
bear some responsibility for its current weakness!).
Equally striking in the current situation has been the absence of any serious
force dedicated to reducing inequality. Important work has been undertaken by
the community sector (e.g. ACOSS) and the churches (e.g. Brotherhood of
St Laurence). Historically, unions and the ALP have played a key role in championing the cause of fairness and reduced inequality. However, a legacy of the
Accord period has been legitimation by the combined labour movement of large
cuts in top marginal tax rates, acceptance (and active promotion) of increased
inequality in the labour market through enterprise bargaining, and acceptance of
cut-backs in the means of collective consumption through reduction in the size
and activity of the public sector. The inequality effects of these cuts in relation to
health, education and childcare (this last creating new tiered preschool systems
of class-replication), and their long term implications for inequality, can only be
described as alarming. Concern about inequality and economic dislocation has
been more effectively mobilised by the populist right (‘One Nation’) than any
progressive political movement. The various anti-globalisation mobilisations (e.g.
S11 and M1) however, indicate that significant mobilisations led by the left and
new forces outside traditional political formations are possible. Taken together,
however, these forces do not represent any serious or coherent alternative to the
current policy regime underpinning accumulation based on inequality.
We believe it is important to note that the tired and disparate nature of alternative policy ideas on offer, and the disparate nature of the forces concerned with
reducing inequality, are not unrelated phenomena. This leads to our fifth thesis.
THESIS 5
Specific policy proposals cannot be usefully considered independently of the forces that will
promote and implement them. The major challenge for policy research on inequality in the
current situation is to identify the key categories capable of simultaneously linking (a) new
approaches to reducing inequality and (b) providing a focal point for mobilising support for
such policies. While they are not everything, ideas matter.
We argue that inequality is created through dynamics occurring at macro and
micro levels involving flows of production and consumption, investment and
saving, within a specific gender regime. As noted above we need to understand
these dynamics to respond appropriately. In thinking through responses we need
to identify key categories for:
• providing a basis for thinking through policies that will result in a better
management of macro and micro flows and production and consumption.
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providing an effective basis for mobilising support amongst a broad constituency for change to achieve more desirable/less unequal flows in production and consumption.
Most importantly these categories need to work at both levels, that is, the level
of policy development and the level of mobilisation of support, to have effect.
In suggesting a way forward our major proposal is that more attention needs
to be devoted to identifying categories that will help disparate ideas and forces
coalesce around a common program. Such an endeavour has many pitfalls. The
first is quite practical: is this an issue academic researchers should even consider
addressing? Many academics would argue that this is not a research problem but
a political one. We reject this characterisation. Comprehending the current
situation is difficult for anyone. Identifying ways of responding to it is even harder.
Researchers have a vital role to play in both processes. If scholarly social scientists do not do it directly, other researchers (e.g. consultants, Business School
academics) will do it anyway.
Arguably the more serious problem concerns the nature of the venture. There
is the potential problem of being too reductionist in trying to find categories that
address both issues of policy design and those of political mobilisation. What’s
good in one domain is not necessarily relevant in another. We have considerable
sympathy with this concern. But our concern is that, unless the effort is made to
find categories that can work in both domains, progress in each will be limited
by lack of linkage between them.
In this regard we have been motivated by consideration of the different
experiences in the role of progressive economic analyses in the UK and Sweden
in the 1950s and 1960s. It will be remembered that in the 1960s after many years
of debate, Samuelson eventually conceded that Sraffa’s critique of orthodox
marginal productivity theory as it applied to capital was correct (Dobb 1973).
This was heralded at the time as a major breakthrough in piercing the legitimacy
of orthodox economic analysis. The practical outcome for the British labour
movement was negligible to say the least. We contrast this with the experience
of researchers associated with the Swedish labour movement at the time, especially Rehn and Meidner. While their work was not as ‘scholarly’ as Sraffa’s, it
was in many ways just as novel analytically (Martin 1984; Swensen 1989).
Moreover, it provided clear guidance in the conduct of day to day policy concerning wages, labour market structures and levels and distribution of public
expenditure, especially on training and labour market programs. Most importantly of all, it provided the basis for ongoing analytical and policy development
as the crisis of the 1970s unfolded. Meidner’s wage-earner fund proposal struck
stiff political resistance, but at least offered important insights into what might
be possible as an alternative response to the crisis (Pontusson 1992). And Rehn’s
ideas about life cycle entitlements contributed to the development of a whole
new agenda for managing working time in the 1970s and 1980s (e.g. debate on
maternity leave and free universal childcare). We believe it is important to
foster a research agenda inspired more by the Swedish experience than by that
of Cambridge. This is not to deny a role of purely analytical and scholarly
research. It is, however, our submission that greater attention needs to be devoted
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to pursuing research into issues that straddle analytical, policy and strategic
concerns.
Given this reasoning we can elaborate our thesis a little in the following terms:
the key challenge is to identify/develop the basic categories that can help guide the
development, and linking of, new approaches to economic, social, labour market and
industrial relations policy. Such categories are also needed to provide a basis around
which movements committed to reducing inequality can cohere.
What categories are most likely to perform the role of fostering a more
coherent policy and popular response to the current situation?
THESIS 6
At the most general level we submit that categories of three different types are needed. These
concern notions of sustainable economic development, the place of competition in economic
development and the notion of working life rights conceived as enhancing citizens’ and households’ choices over the life cycle.
(a) Categories concerning fundamental economic priorities: sustaining life vs
sustaining markets.
Arguably the most common response to any agenda for progressive economic
and social reform is: ‘while the proposals may be interesting they are simply not
viable or economically sustainable’.
Arguments of this nature need to be confronted directly. The central assumption of such responses is that the current policy mix is sustainable. This is a problematic assumption. Current capital market arrangements, for example, are
creating a perverse situation where most firms are being restructured not because
they are running at a loss but because they are not making enough profit (Froud
et al. 2002). Such a situation must hit limits of sustainability at some point.
The problem of sustainability is more pronounced at the social and political
levels. Markets need social and political conditions of existence––they are not
spontaneous creatures. Yet the kind of market system currently dominant (i.e.
financialised or coupon pool capitalism to use Froud et al.’s terms) does not recognise the importance of making allowance for nurturing these conditions. Worse,
the Canadian philosopher John McMurtry has recently argued at length that the
current stage of economic development is best characterised as the ‘cancer stage
of capitalism’ (McMurtry 1998: 360, 379; 1999). As he notes, destruction of social
and natural infrastructure (what he calls the civil commons) in fact works to
create new ‘market opportunities’ (1998: 366). For example, the erosion of standards of service in public education, public health and public transport as well
as emerging environmental problems, create new markets for ‘growth.’ As a result
‘money is not used for life. Life is used for money. The final measure of the Good
is an increase or decrease in money sums’ (1998: 299). In responding to the
current situation McMurtry argues that the question is not one of a purely moral
choice between equally acceptable ethical options. As he puts it: ‘The problem
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is not one of being unable to tell the difference between good and bad [but rather
in distinguishing] between what disables and what enables life’ (1998: 356).
Assuming we are interested in life, the choice is therefore easy––to move beyond
the market approach. For ‘life as such has no value in this ethical system. Questions
about starving people, malnourished children belong to the clergy, the moralist,
and the politician and must be kept from interfering in the market’s laws of
supply and demand’ (1998: 240).
(b) Categories that provide criteria for institutional design concerning macro
flows: disciplining competition vs being disciplined by it.
Watson’s (2002) paper was quite explicit in identifying market competition as
the root cause of inequality in the contemporary Australian labour market.
Drawing on Botwinick (1993) he noted that the problem should not be conceptualised on the basis of a ‘quantity theory of competition’ but rather in terms
of capitalist competition involving, inter alia, dynamics of a reserve army and a
struggle amongst competing capitals to gain access to privileged income streams.
Similar dynamics were noted in passing in the paper by Froud and her colleagues.
The problem of excess capacity in the sphere of production has been convincingly traced back by Brenner (1998) to excessive inter-capitalist competition.
Within the financialised sector a lemming-like pursuit amongst funds managers
(and their customers) for maximising shareholder value has driven the system of
coupon pool capitalism to seeking higher and higher rates of return which are
both unattainable and disruptive to organisational stability. Finally Schor (1998)
has noted the emergence of a culture of competitive consumption that has
emerged since the 1970s which has driven much consumer behaviour since that
time. This has played a major role in contributing to a deterioriating situation
in hours of work, especially amongst upper decile workers, and fuelled demand
for cheap household services. Clearly competition needs, in the words of
Beveridge, to become a servant and not the master of economic development if
dynamics such as these are to be arrested.
(c) Categories that can provide criteria for institutional design concerning micro
flows: i.e. we need a new conception of working life rights concerned with enhancing citizens’ and households’ choices over the life cycle as the alternative to the
classical wage-earner and neo-liberal conceptions of working and home life.
From our research to date we believe the key categories to work with in this
regard need to move beyond the classical labourist and liberal collectivist notions
of what we call the ‘classical wage-earner’ model of work and the ‘breadwinner’
model of the household. Equally it is important to move beyond the neo-liberal
notion of the ‘free individual agent’ in the economy and the ‘autonomous
family’ vision of the household (Buchanan & Watson 2001; Pocock 2001). In place
of these categories we think it is more useful to work with the notion of promoting fairness and efficiency through enhancing citizen’s choices over the life
cycle. (We elaborate on what is meant by this in Thesis 8 below).
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THESIS 7
Arguably the most pressing priority is to identify how the rights of citizens can be enhanced
over the life cycle.
An effective program of change needs to work at a number of levels. Priorities
do, however, need to be identified. In the current situation we argue that priority should be accorded to proposition 6(c) above––that is, developing an alternative approach to managing working and home life. This is for two reasons.
The first concerns policy development. Too often abstract ideas about things like
macroeconomic policies directed at operating in a situation of excess capacity
and financialisation, are weak in their conceptualisation of what types of jobs are
created by interventions at this level. This was clearly the case in the Accord years
where 69 per cent of net employment growth was either casual or contractor in
nature (ABS 1999: 3). Clarifying what is meant by working and household life
can help ensure that initiatives at the level of macroeconomic policy are supported
by appropriate micro initiatives to achieve desired qualitative outcomes. The
second reason for elevating this aspect of policy is more pragmatic. Issues of working and home life are matters of immediate concern to a wide range of people.
Developing coherent and attractive ideas on them will therefore be central to
achieving the large scale mobilisation necessary to carry through a more comprehensive approach to combatting inequality.
THESIS 8
The key categories of concern associated with enhancing citizens’ and households’ choices over
the lifecycle require redefining central features of the employment contract and the unpaid
household/gender contract.
On the basis of work we have done recently on the changing nature of work and
the restructuring of work and family life we make proposals in two main areas:
first in relation to the paid employment contract, and second in relation to unpaid
work and households, families and community.
(a) the paid employment contract:
categories about work need to leave behind the free contracting agent and
instead deal with notions of ‘worker’, and ‘employment situations’ and ‘transitional labour markets.’ This requires a dramatic reworking of the notion of
‘standard employment.’
The essential features of what we call the classical wage-earner model of standard employment are well known. It involved workers (who were often tacitly
conceived as male) engaged full time on a continuous (or full year basis) as employees (i.e. not as contractors). Typically it was also assumed that the employer was
a large scale enterprise that owned and controlled the place of work.
In place of the classical wage-earner model we propose a more