Book review: Politics,Inequality and the Australian Welfare State After Liberalisation

Ben Spies-Butcher’s new book receives high praise from its dust-jacket reviewers. Frank Stilwell applauds the book as a ‘brilliant analysis of the Australian welfare state’ and recommends it as ‘essential reading for anyone concerned with the practicalities and politics of welfare.’ Ariadne Vromen praises it as ‘an impressive and broad-ranging book’ that ‘demonstrates a commanding understanding of the field through an analysis of new marketised policy regimes.’ Gabrielle Meagher describes it as a ‘creative and optimistic book’ whose ideas ‘will inspire analysts and activists across rich democracies.’ To all these commendations I add that the book bears a controversial argument on a crucial topic. Spies-Butcher’s book addresses itself to all who seriously engage with the task of sifting through the best options for social democracies today. I am grateful for the effort that its interesting and nuanced argument has cost me as I tried to clarify my misgivings.

Spies-Butcher is not taken with bold proclamations of a neoliberal victory. To him, the proposition that a democratic state has been fully reconstructed after the logics and imperatives of markets does not make good sense of the resilience of Australia’s evolving welfare state. He is not persuaded, either, by traditional social democratic representations of a pitched battle between warring projects: a democratic state, responsive to civic activism about needs, that commits to the public good; versus a barbaric winner-take-all market justice. Both these models are blind to the significance and the potentials of some effective alliances that have been re-scoping the Australian welfare state.

The narrative of a triumphant market rationality, in which markets and prices provide the only reliable marker of values, does not fit complex histories. In Australia, as elsewhere, ‘the welfare state is on the march.’ Social needs ‘such as child, disability and elder care are supported in ways they were not before’ (p. 1). At the same time, a hoped for social democratic epiphany, when the COVID-19 pandemic forced a brief switch from ‘prioritising budgets to prioritising health’ and ‘public spending rose as the economy contracted’ (p. xiii), proved to be in vain. Austerity soon returned and with it an increase in homelessness and poverty. It seems that we need to move beyond flatfooted ideologies and ferret out the best potentials of the concrete ways in which the Australian welfare state has renegotiated old enmities.

Two distinct policy settings, ‘dual’ and ‘hybrid,’ have structured the Australian welfare state after liberalization. Dual welfare trots out a meagre safety net for the destitute who have fallen by the wayside. It partners this paternalistic support for the hapless with tax exemptions and other encouragements for entrepreneurial, asset-rich actors who have made a go of it. The dual welfare state ‘ties the principle of need to that of achievement’ (p. 10). Dual policy settings ‘reflect the asymmetric application of market principles within public budgeting’ (p. 12). Politely intolerant of all dogmas about the good and the bad in social policy agendas, Politics, Inequality and the Australian Welfare State After Liberalisation wants to redeem aspects of the dual policy setting. What is wrong, it seems, is the moralistic divide that shapes dual welfare’s protections and rewards and engineers its unequal effects. ‘Young people are not clamouring to cut pensions and aged care. Instead the dual welfare state creates political opportunities for generational solidarity. The most obvious response is not to mobilize the young to tear down social protections enjoyed by the old, but to universalize these protections’ (p. 156).

Universal access again offers the yardstick for judging the potentials and the shortcomings of contemporary ‘hybrid’ settings. Hybrid policies are porous between markets and states and these openings can be used to undermine the moral divides of dual welfare and promote egalitarian outcomes. These progressive potentials are in no way guaranteed. They are mere potentials that are encoded in some features of market mechanisms (moral agnosticism about need claims) that can be activated by the progressive ambitions of civic activists. This contingency at the heart of hybrid settings requires the book to track its argument about options through a rich landscape of examples and case studies. A book about and for activists, there is no blueprint here for what is to be done, just a cautious account of how egalitarian potentials can be squeezed out of the negotiations of the Australian welfare state. While the unemployment benefit (Jobseeker) illustrates the moral divides of dual welfare, family benefits, which are similarly ‘flat-rate, means-tested and funded from general revenue’ have been increased and rendered more inclusive due to ‘feminist pressure.’ Medicare’s compromise between a system of private subsidy and nationalization, ‘appears to have facilitated the relative expansion of public provision avoiding fiscal and constitutional constraints while applying monopoly power to discipline providers’ (p. 10). Spies-Butcher tells us that income-contingent loans pioneered by Australian governments to fund higher education exemplify how financialization of a public institution can expand its services and increase access for the previously marginalized (p. 12). Political and collective interests fed these reforms and are the beneficiaries of its egalitarian outcomes.

What, then, does the activist finally take away? There is, it seems, to be no going back to the old social democratic war between the democratic state and the capitalist market. Activists need to acknowledge a ‘shift in politics.’ The ‘Golden Age’ of the social democratic project committed to regulation of the market in the public interests is exhausted and has been replaced by a decentralized progressivism that campaigns for equity and universal access on the back of ‘issue-based, data-informed and communication focused strategies’ (Bower-Pont, 2023 cited by Spies-Butcher p. 164). ¹ No heavy-hearted realism invades Spies-Butcher’s book. The shift in politics in which progressives are invited to participate in expanding the open-mindedness of hybrid policy settings is not registered as a sad loss of radical ambitions. It is this estimation of no major costs in the defeat of a social democratic project that had me intrigued and challenged to find an alternative perspective. The lament, as I see it, should be over the antidemocratic distortions that are involved once we seek common ground between the democratic state and the market on a mutual capacity to acknowledge claims about needs.

To be sure, paternalism and the disaffection of tax-paying stakeholders did corrode and enfeeble old welfare states. However, these authoritarian histories belie the critical potentials of a social democratic project whose dormant radicalism, according to Jürgen Habermas ² and Maria Márkus, ³ remains worth saving. The social democratic rewiring of liberal democratic institutions partly arose in response to a critique of the elitist temperament of political liberalism. Liberalism had tied justice to the freedoms of the rights-bearing individual and the question of practical capacities soon raised its head. This was to be addressed by acknowledging that universal freedom required admitting claims about needs as self-interpretations about freedom’s particular conditions. This was all about the expansion of the meaning of justice. The struggle of new need claims to establish their legitimate calls upon public resources have constantly worked up cultural expectations and significantly reformed legal institutions. The betrayals and self-betrayals of this incompletable project continues to draw its champions to its defence. Among its partial successes we might count the revolution in the social and legal circumstances of LGBTI communities while an authoritarian paternalism in the provision and justification of welfare has upended the radically democratic ambitions of a social democratic politicization of needs.

Spies-Butcher supposes that market mentalities in a post-liberal context are not systematically inhospitable to claims about needs. He is not mistaken about this. Friedrich Hayek ⁴ was as aware as any social democrat that laissez-faire rested on a naturalistic fallacy about the self-sufficient actor that would finally be torn apart as the grounds for the legitimacy of market rule. Claims about needs had to be acknowledged if markets were to scope a new anti-ideological regime of power in the post-war world. At the same time, Hayek knew full well that an ideological battle was on. A social democratic recognition, that claims about needs were to be funnelled up to political power as interpretations of the justice of new calls upon shared resources, must be blocked. This would be the radical engine of, for example, a feminist social revolution that demanded not just access to existing entitlements but the rethinking of the meaning of private right. If needs must be acknowledged but the radicalism of their entwinement with claims to justice frustrated, then need claims must be reduced and controlled. Hayek was energetic in scoping needs as wants that could be met by accessing a determinant share of material resources.

My point is that Hayek knew that he was a player in an ideological battle and that reducing needs to wants that could be supplied by markets was his weapon of choice. It is not entirely clear that Spies-Butcher recognizes that he walks on the landscape of an apparently defeated project whose ambitions have been impoverished and refashioned by its ideological opponents. As mentioned, Spies-Butcher refers to the deferred fee payment scheme in Australian higher education as an example of the way in which the financialization of a major institution can accommodate an egalitarian access to its goods. I am old enough to have been a beneficiary of the old Whitlam policy of free higher education. This was not just a financial boon for my generation. We were treated to an era in the life of the university that was vulnerable to (if not welcoming of) demands that its humanistic and enlightenment mission accommodate all sorts of knowledges and life experiences. I have witnessed the goods of the contemporary financialized institution close around qualifications offered as meal tickets for anyone who is prepared to sign up for deferred payment.

Activists must decide for themselves, of course, if it is best to hold market values to account against a hostile project or whether it is time to relinquish the struggle and make the best of what the apparent neoliberal ideological victory has left to us. In either case I think that the losses and costs should be acknowledged. A social democratic project would continue the battle in which new claims about needs are heralded as the opportunity to rethink the grounds of legitimate calls upon shared resources. This was the project that facilitated the recognition of Native Title and tragically failed in the Voice referendum. Spies-Butcher acknowledges that ‘norms’ of social justice must be in place if the inclusive potentials of hybrid policy settings are not to be squeezed out. However, it is not clear how these expectations are to be generated and reproduced if the progressive response to a sea of issues is permitted to oust the pursuit of a progressive project.

I intend great compliment to Spies-Butcher’s Politics, Inequality and the Australian Welfare State After Liberalisation when I conclude that its, immensely readable, challenge, to rethink options for progressive politics in the contemporary welfare state, stimulated me to review (albeit finally reclaim) my commitment to the battle weary social democratic project. This carefully crafted and intelligent book forced me to drag shibboleths out of the cupboard and struggle to re-justify them. I am very sure that many other scholars and activists will find this book as deeply rewarding.