Fabian liberalism? Noel Pearson on conditional welfare

It’s a rainy night and an inexperienced young driver speeds into a sweeping bend. Well over the speed limit he loses control, wrapping his car around a tree. When the ambulance arrives it’s touch and go. Unless the paramedics cut him out the wreck and get him to hospital, he’ll die on the side of the road.

Some hardline classical liberals insist that people who take risks shouldn’t expect others to pay for the consequences. Uninsured drivers shouldn’t expect emergency workers to cut their mangled bodies from car wrecks and have taxpayers support them through a lifetime of disability. People who build on flood plains shouldn’t expect helicopters to pluck them from their roofs when the rain comes. And kids who drop out of school and then find that they can’t get jobs shouldn’t expect to get welfare.

In a recent piece for the Australian, Noel Pearson challenges the view that "people should have the right and freedom to make their own choices but not wear the consequences." He calls that view ‘libertarian welfarism’. It says to people:

Here is the social support, there are no conditions attached to it, you are free to do with it as you wish, and if you and your children come to grief we will make sure there is another safety net to tackle that fallout as well.

Of course the flip side to this arrangement is that those who make prudent choices don’t get to enjoy the full consequences either. Along with more fortunate risk takers, they give up a large share of their incomes to support people whose choices didn’t work out. Hardline classical liberals argue that unless you’ve caused someone else’s poverty you are not responsible for alleviating it — even if the person is poor through no fault of their own.

But Pearson rejects the hardline position. While he argues that individuals should be free to pursue their own interests: "It is not just a matter of individuals bootstrapping themselves up the road of progress by sheer wisdom of choice". He recognises that individuals are free to make choices, but they are not free to choose the circumstances in which they make them. Some individuals grow up in environments so impoverished that it doesn’t matter what choices they make. They just can’t succeed without help.

Pearson wants a welfare system where choices can have positive as well as negative consequences. Following economist Amartya Sen he writes about the need to invest in human capital and ensure individuals have the ability to take advantage of opportunity. After all, it is only when there is genuine opportunity for success that individuals can be held accountable for failure.

Unlike hardline classical liberals, Pearson always leaves the door open for people seeking help. Nobody will starve to death unless they choose to. But unlike the system of libertarian welfarism, there are consequences for making yourself a burden on others. These consequences are flagged in advance and are not arbitrary. For those who make responsible choices, the system offers help with a light touch. But for those who choose to abuse alcohol, disturb their neighbours or neglect their children, accepting support means losing autonomy. Claimants may lose access to cash assistance and be asked to change their behaviour in return for support.

This position follows from Pearson’s view of freedom. If freedom is having the capability to choose a life you have reason to value, then people who behave in a way that interferes with your ability to pursue you own goals are limiting your freedom. As a result, libertarian welfarism reduces freedom in a community by allowing some people to impose unnecessary costs on others.

By stressing freedom and choice, Pearson is positioning himself as a liberal at war with inner-city left wingers. But there’s an irony here. A century ago ‘new liberals‘ and socialists battled over conditional welfare. And it was the socialists who advocated conditionality.

In the early 20th century the Liberal politician Winston Churchill was planning to set up a system of unemployment insurance and labour exchanges. Fabian socialists Sidney and Beatrice Webb wanted a system where government employees could supervise the unemployed. They wanted attendance at labour exchanges and training programs to be compulsory. And for those who were uncooperative, they wanted the option of farm colonies and detention settlements. They saw support for the unemployed as an opportunity to intervene in people’s lives. Churchill disagreed. According to historian Bentley Gilbert, he:

… refused to let the state use its power over those in distress for any purpose except to relieve distress. The state could never
be permitted to distinguish the worthy and the unworthy among its citizens; it might never penalize an applicant for aid, no matter how dirty, ignorant, or improvident, by requiring him to reform.

So as an old debate plays out again, Pearson is playing the socialist part while insisting he is a liberal.

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16 Responses to Fabian liberalism? Noel Pearson on conditional welfare

  1. murph the surf. says:

    Pearson’s stated position sounds like the very essence of a modern position in politics…. focus on the positive and support enterprise but extend the helping hand to the less fortunate.
    I mean isn’t Pearson CT’s poster person – the radical centrist?
    Interesting tidbit about the history of the socialists through the stated desire of the Webbs to detain and imprison those not following the party line.
    Not hard to still see that this line of thinking has still so much influence in the colour and language of their modern incarnations.

  2. Incurious and Unread (aka Dave) says:

    Don,

    I think that your post conflates three different issues: moral hazard, welfare and poverty traps. I would think that most people – including “classical liberals” – who properly understood these things would think that they are bad, good and bad, respectively. That Pearson thinks likewise makes him rather conventional and uncontroversial.

    It seems to me that the controversy is not between the socialists and the liberals but between the thoughtful and the unthinking. The thoughtful socialists and liberals understand that to avoid poverty traps you need to create an incentive to work. The unthinking socialist sees this as unfairly penalising the unemployed, whereas the unthinking liberal sees this as the State unreasonably intruding into the lives of individuals.

  3. john says:

    Problem – this would often result in suffering by others that are innocent, the reckless man provably has recklessly spawned perfectly ,innocent children who might need him to stay alive long enough to be come older and wiser.

    Let he Who is with out sin cut off the life line. Personally “I have done all the dumb things”.

  4. Anthony says:

    Don, in practice the scheme put in place didn’t reflect the absolute unconditionality that the Churchill quote implies. Being an insurance scheme, the new system had to protect against the same sorts of moral hazard as any other insurance scheme, and so wouldn’t insure against ‘voluntary’ unemployment.One of the key functions of the new labour exchange system was to precisely impose conditionality on the receipt of benefits: that is, benefits would only be available to those ‘genuinely seeking work’ or ‘available for work’.

    In the other hand, the system didn’t run as far as setting up labour colonies, but I’m not sure whether detaining the idle in labour colonies is properly termed ‘conditional welfare’.

  5. Don Arthur says:

    … in practice the scheme put in place didn’t reflect the absolute unconditionality that the Churchill quote implies.

    Anthony – That’s right. Workers claiming unemployment insurance had to take their insurance card or book to the labour exchange. If they received a suitable offer of work they were required to accept it or lose the benefit.

    But I don’t think compulsory registration at the labour exchange was a major step towards conditionality or a significant break from Churchill’s original vision. Unemployment insurance was for workers who were unemployed. If a person isn’t looking for work or isn’t willing to accept a reasonable offer of work then they aren’t unemployed.

    All it signifies is that a person has to be unemployed in order to receive an unemployment benefit (so it’s only conditional in the sense that disability pensioners must be disabled or parenting payment recipients must be parents).

    Stretching this you could argue that attending training courses could also be a test of whether or not a person is unemployed. This was the argument of the Social Security Review in Australia during the 1980s. The idea was that if unemployment is structural a claimant isn’t seriously taking steps to find work if they don’t accept offers of training.

    The Webb’s conditionality goes beyond this. They wanted to supervise aspects of people’s lives that had nothing directly to do with employment.

  6. Troy Williams says:

    Noel Pearson seems to be detrimentally a step ahead of the process. Governments look for the quick fix on issues that don’t impact on their political aspirations or directions but give them browny points that will support their cause anyway. The whole concept of Pearson’s ideas as an end result are desirable in terms of choices and freedom of these choices and so they should be without question anyway. The initial challenge would be to address the psyche of such people. Unfortunately, this means that the initial impacts of a proper process would not be evident in current generations, which is mostly ineffective in terms of value, due to established thinking and other interelated variables in these circumstances. The monies invested to address these issues should be channeled into long term focuses such as early childhood. Breaking the cycle of dependance and developing fresh ideals, which hopefully promote healthy choices rather than patronisingly suggestion that people should have choices, which is a human right in the world we live in anyway. The world is full of self interest, which leads me to infer that real processes are considered but do not benefit the framework in which are important to indivuals and there own aspirations and political directions.

  7. john says:

    “Fabian socialists Sidney and Beatrice Webb wanted a system where government employees could [be paid to ] supervise the unemployed.”

    There is nothing like helpless dependency to create work for otherwise unemployable, managers.

    Years ago I did causal teaching in the ‘sector’ it does attract the ‘dominated of the dominant’ looking for somebody to boss around.

  8. john says:

    Greatly admire Noel Pearson . He knows a lot more about the circumstances, in his communities, than most- feel that “Fabian liberalism” is a bit glib.

  9. Anthony says:

    “Unemployment insurance was for workers who were unemployed. If a person isn’t looking for work or isn’t willing to accept a reasonable offer of work then they aren’t unemployed.”

    This suggests that unemployment benefit schemes simply adopted an accepted, pre-existing definition of unemployment and made it the basis of their operation. I think things went the other way around:eg, Pigou’s definitions of unemployment were largely based on the 1911 National Insurance Act; in Australia, Census definitions of unemployment varied markedly from our current definitions up to 1947, that is after the establishment of a UB system in 1944. In short, the idea of defining the statistical category of unemployment by reference to a person’s labour market activity comes after the establishment of unemployment benefit schemes whose administration was premised on such ‘activity’ requirements.

    Again, the notion of only compensating for involuntary unemployment does strike me as conditional welfare. It was not enough to simply be ‘unemployed’, for example, if your unemployment was ’caused’ by a voluntary quit, dismissal for misconduct or industrial action. From here I think its really just a continuum as to how far we inquire into the circumstances attending someone’s unemployment before we compensate them: to saying you need to be unemployed plus you must fill in a dole diary and turn up for interviews with your case manager then to you must be unemployed plus you must have your kids immunised and make sure they attend school etc.

    Finally, ‘conditional welfare’ must surely be along the lines of an offer: “If you do XYZ, you will get ABC benefits in return; if you do not do XYZ, you will get nothing”. I don’t think the forcible assignment of a ‘residuum’ of the unemployable to labour colonies meets this definition

  10. Don Arthur says:

    Anthony – I take your point about there being conditions attached to unemployment insurance.

    There were conditions about contributions, conditions about how the worker left their last job, and conditions about being available for work. By the 1930s a claimant could legally be required to attend a training course and would lose their benefit if they were excluded from the course because of misbehaviour.

    On the definition of unemployment I think you’re right. There wasn’t a consensus about how to define it.

    But something almost all uses of the term shared was that the person was available for work, wanted to work and was unable to find work. When William Beveridge wrote about unemployment in 1910 he was referring to workers who were “standing idle though able and willing to work at something”.

    Trade unions that offered insurance against unemployment had their own working definitions by the late 19th century. According to a government report of 1893:

    The “unemployed,” for the purposes of a Trade Union which, grants unemployed benefit, are the members who, from causes other than their own misconduct or choice, have not been earning – wages for a certain number of days.

    But the report’s author regarded that definition as unsatisfactory. He wrote:

    … we may say that the term “unemployed” is used in four distinct senses, though of course the classes of persons corresponding to each definition overlap to a greater or less extent.

    (1.) Those whose engagements being for short periods have terminated their last engagement on the conclusion of a job and have not yet entered on another.

    (2.) Those who belong to trades in which the volume of work fluctuates, and who, though they may obtain a full share during each year of the work afforded by their industry, are not at the given time able to get work at their trade.

    (3.) Those members of various trades who are economically superfluous, because there is not enough work in those trades to furnish a fair amount to all who try to earn a livelihood at them.

    (4.) Those who cannot get work because they are below the standard of efficiency usual in their trades, or because their personal defects are such that no one will employ them.

    It seems to me that by the late 19 century the British bureaucracy had working concept of unemployment — even if some aspects were contested.

  11. john says:

    The Dark Pocket of Time: War, medicine and the Australian State 1914-1935?
    is worth reading.
    In 1918 many of the about two hundred thousand returning ANZACs were in poor shape ; wounds , gas (virtually everybody on the western front), shell shock, opiate additions and VD affected many. Prior to the war Australia had been a healthy country and demand for welfare was low . The Sudden arrival of tens of thousands of men in the ‘prime of life’ with disabling health and mental conditions had far reaching consequences on Australia’s medical and welfare systems

  12. derrida derider says:

    Nobody will starve to death unless they choose to

    Dammit, we are rich enough to ensure nobody will starve to death – full stop. And we should. In practice this stuff about “it’s their choice” very quickly descends into self-serving cant where starvation is seen as a choice which we can now refuse to support.

    The fundamental problem with the Millian liberal’s view that “we are free to do what we want, so long as it doesn’t cost others anything” is that we are social animals, and every single action we take therefore has costs or benefits for others. The fundamental problem with the authoritarian/communitarian worldview is that every action should be judged solely on its effect on others – and all too often vague, unspecified others (eg “society”, or “the state”). It’s always prone to end up with “what is not compulsory is forbidden”, as the Webb’s descent into Stalinist apologetics illustrates. And as others note, it leads to the triumph of those who actually enjoy telling others how to live.

  13. john says:

    derrida
    Authoritarian Mediocrity is the term.

    “vague, unspecified others” in practice often equals : people who represent ‘others’, but who are themselves paid for by management.

  14. john says:

    In about 1934 Issac Babel addressed the Soviet writers Guild and as way of explanation of why he had stopped writing said:

    Comrades our soviet state has given us many things ,
    but comrades it has taken from us something very important;
    the “freedom to write badly”

  15. Anthony says:

    “the person was available for work, wanted to work and was unable to find work”.

    But this is a studiedly ambiguous definition. Available for what work? Wanted to do what work? Unable to find what work?

    Trade union unemployment schemes were designed to make it possible for a worker to hold out for a job in his or her own occupation or trade, under customary conditions: the point being to support members in trade disputes over terms and conditions of employment. Some state schemes – including the British, I think – also let a claimant refuse job offers outside their normal trade or occupation. The definition of unemployed in Australia in 1944 as embodied in the work test meant that to be “unemployed” was to be unavailable for any work under award conditions, including work outside one’s usual trade (although this was limited in geographical terms by the requirement that jobseekers with dependent family not be required to live away from home).

    Similarly, the requirement up to 1979 was that jobseekers only be required to take up full-time work, so someone available for, wanting to take up, and unable to find part-time work was not considered unemployed.

    Again, all I’m saying is that any definition of “unemployment” for the purposes of claiming benefit is inherently conditional and varies across jurisdictions.

  16. john says:

    In the early 20th century the Liberal politician Winston Churchill was planning to set up a system of unemployment insurance and labour exchanges. Fabian socialists Sidney and Beatrice Webb wanted a system where government employees could supervise the unemployed. They wanted attendance at labour exchanges and training programs to be compulsory. And for those who were uncooperative, they wanted the option of farm colonies and detention settlements. They saw support for the unemployed as an opportunity to intervene in people’s lives.

    Fabian economists were very influential in the creation of the post-war British arts council system and influential upon the likes of Nuggett Coombs who was the principal architect of Australia’s federal government art system. The image of ‘special camps’ where government employees are paid to supervise the bewildered really hits home. There is are a lot of make-work schemes for the dominated of the dominant in the cultural sector,and a lot of people who think they know best.

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