Welfare and the Common Good
Maurice Glasman
First, it is always an honour to be invited by Lord Griffiths to anything and I always try to accept. He has been a true friend to me since I entered the House of Lords; that is a rare gift to be given and I treasure it.
It is all the more precious as we are of different religions, different parties, and if my younger self could glimpse me saying these words to the head of the policy unit under Margaret Thatcher and a vice president of Goldman Sachs, then there would be a scandalised disbelief. Life itself is the teacher and I am grateful for the lessons it has taught me. Not the least of these, which is important in the discussion of poverty, is the inheritance of Catholic Social Thought, with its stress on vocation and value, on a balance of interest and relationships; a tradition that also understands that we are fallen and capable of vice as well as virtue, a narrow selfishness as well as self-interest broadly conceived. It is also a tradition that does not think that the free market created the world. There is something inherited in that as well.
It also is fond of paradox, something that sounds wrong but is right, and not the least of these paradoxes is that while there is no alternative to the market, the market is no alternative. It creates unprecedented wealth but also an unprecedented poverty – a poverty of inheritance that leaves people without assets and in debt in a monetised economy. That is a more complex form of poverty in which access to common lands is forbidden through enclosure and there is little participation in a common life; a world in which you are on your own in a radically new way, in which it is your responsibility to find your way with no inheritance. Progress for many people is seen as a systematic dispossession. This is because capitalism poses a radical threat to the notion that human beings and nature, the substance of creation, are anything other than commodities. It tries to exploit both through creating factor markets in labour, land and food, in things that are obviously not created as commodities to be bought and sold. This, however, is what happens to you when you are in debt, as we see in Greece. Its inheritance is being privatised and it is very unclear out of what the value is to be created. The accompanying tragedy is that the state did not create the world either, and nor were people created as administrative units. Poverty is a problem of a lack of humanity, so we need to look to the restoration of human-scale solutions for its alleviation.
While there is a structural and material aspect to poverty, which is extensively researched, I work with a definition of poverty by enquiring as to whether the monetised essentials of life are affordable on a basic wage. While poverty is not caused by welfare, it is not eradicated by it either. The move towards a living-wage economy is a fundamental one in ensuring that people do not work for their poverty. Outside London, £9.40 an hour is a reasonable amount to live a dignified life. It creates incentives to virtue rather than vice, to work and to be able to fulfil fundamental responsibilities to others through your work. It is a foundation stone of a new consensus built around work rather than welfare, but if we consider poverty to be a discussion exclusively about material possessions or spending power at any given moment, then we will get stuck in static definitions and a tax-and-spend Gini coefficient conversation that has not changed the dynamics of polarisation and the increasing divisions of wealth.
A politics of the common good requires a different way of talking about inequality, welfare and the relationship between the market, state and society in the practice of mutual responsibility and the question of how we care for each other. In this, virtue and vocation, responsibility and reciprocity have to play an important role but the two key and primary concepts are those of inheritance and relationships. This is a way of looking at poverty that asks what we pass on to the next generation, in which the ideas contained within a social contract are changed into the notion of a covenant between the generations. This covenant is orientated towards the safeguarding of creation, a preservation of liberty and democracy within an orientation towards the good of a commonwealth and a common-good that is ultimately to pass on liberty, prosperity, civic peace and a sense of mutual responsibility to the next generation, undiminished and, if possible, enhanced a little bit.
I believe that there is a space to build that common good politics in place of the collectivist and exclusively individualist and materialist alternatives that have dominated politics over the last 60 years. In this a renewed body politic would lessen the administrative penetration of the state through a renewed role for the Church, for universities and vocational colleges, for city councils and business to craft a common good around the strengthening of family life, the place you live in and the ethics of work, with an emphasis on virtue, defined as ‘good doing’ rather than ‘do gooding’, the corporation itself rather than corporate social responsibility for example. In other words, a politics in which skilful work is honoured, recognised and rewarded within a system that gives incentives to virtue rather than to vice. A vocational economy if you like.
Marvin Gaye’s question of ‘What’s Going On?’ is logically prior to Lenin’s question of ‘What Is To Be Done?’ What’s going on is centralisation of financial and political power, an excluded and estranged population and widespread anxiety relating to how people can fulfil their obligations to their loved ones.
What remains elusive now in the debate around welfare reform is an understanding of relational poverty (how people find themselves isolated and powerless), institutional poverty (a dearth of belonging and participation within institutions that uphold a specific good and practice) and also knowledge poverty (where people are cut off from a tradition of understanding that is intergenerational and related to specific practices).
In terms of the changes that are required in the political economy, there are three essential ones that are required if poverty is to be addressed in practical terms. The first change concerns the establishment of a vocational economy within which apprenticeship and skill are taught, sustained and recognised through democratic institutions that regulate labour-market entry. Reciprocity requires having something to give as well as take, and if you have a vocation then that is a good relational start. One of the successes of the German economy is that vocation is given a central place in the organisation of its labour market. Vocation includes within itself a calling, or something that is appropriate for the person that comes from within, to work that is authentically your own and not defined exclusively by its external rewards or demands but characterised too by internal goods rooted in a tradition of practice. A vocation requires discipline and judgement, good doing, and constrains vice through the concept of good practice, institutionally enforced. Honour, skill, loyalty and dedication are necessary for the preservation and renewal of value, which is judged by other practitioners and not exclusively by the price system.[1] What academics call ‘peer group review’ is built into the vocational system. It allows for an inheritance to be received, renewed and passed on. It places work, not exclusively as the immediate fulfilment of a task but as something received from the past and orientated towards the future. Vocational institutions valorise labour and promote virtue. The internal goods preserved by vocational institutions are a direct threat to the domination of capital but necessary for its successful reproduction.
We need to address the failures of an exclusively academic framework for further and higher education in which there is tremendous working-class and immigrant failure as well as a lack of skills in the economy. The most important structural changes would be to close down half the universities and transform them into vocational colleges, jointly run by local business, the unions and local political representatives. Vocation would bring intergenerational relationships through the apprenticeship system, also bringing older and retired workers into a constructive relationship with the economy and with younger people. It would establish a tradition of good practice that would address knowledge poverty and bring a sense through which people can earn and belong, in the words of Jon Cruddas.
The second fundamental economic reform that would address the impoverishment of a local inheritance is the endowment of regional banks that are constrained to lend in their area through using part of the bailout. One of the fundamental causes of contemporary poverty is debt and the emergence of usurious financial institutions. Regional banks are a central part of the new institutional ecology in that they resist the centralising power of capital, allow a more stable access to credit for regional and smaller businesses and encourage relationships and reciprocity to constrain the demand for higher rates of return that have decimated the mutual bank sector in Britain. Ten per cent of the bailout should be used to endow these Banks of England through which local people could have access to credit, start businesses and a more humane and locally embedded form of banking could be established.
The third aspect would be corporate governance reform so that workers can exercise a balance of power with capital in the governance of firms. Corporate governance representation for labour addresses the necessity of a form of accountability that does not claim all advantage for one side and that can restrain cheating, greed and avarice in the working life. The specific technique developed within Catholic Social Thought was a form of relational accountability, in which the real physical presence of the workforce on boards required a sharing of information regarding the firm and the sector, a negotiation of modernising strategy that was not set exclusively on terms beneficial to capital.[2] The unilateral pay rises given to themselves by managers could possibly be constrained by the presence of a workforce that could question their legitimacy on the basis of a real internal knowledge of the firm.
It is the absence of relational accountability, the lack of internal constraint on capital and the absence of the labour interest that provide the fundamental explanation of the crash of 2008. The financial crisis was generated by the concentration of capital, a lack of accountability so that money managers could lie, cheat and exaggerate without any specialist interests with knowledge of the internal working of the firm that could challenge them. We learnt that accountability is too important to be left to accountants. It was a crisis of accountability, of a lack of virtue and of ‘incentives to vice’ in the form of bankers’ bonuses and unilateral self-remuneration. It was also a result of the relentless demands for higher rates of return. These turned out to be speculative and fantastical. There was no vocation or virtue in the governance of the financial sector, and the key to its remedy lies in the expertise and interests of labour, who through their representation in the firm could hold the unvirtuous elites to account and bring about the necessary cultural change required to break out of the present malaise. Responsibility and power need to be shared in order to be effectively exerted.
Relationships, reciprocity and responsibility
In terms of welfare reform a similar process of moving away from the unilateral domination of management and towards a balance of interests in the governance of institutions such as schools and hospitals is required, so that their corporate governance is based on a third funders, a third workforce and a third users. This would initiate the workforce and users into the complexity of running large institutions, create a greater sense of ownership, constrain the fantasies of relentless restructuring and create an ethos or common good within the organisation.
The second reform relates to what is sometimes called ‘relational welfare’. I have mentioned that human beings should be understood not as either selfish or altruistic but in terms of ‘self-interest broadly conceived’. This is based philosophically on a broadly Aristotelian reading of persons in which human flourishing is understood as bound up with the well-being of family, friends and colleagues and not opposed to that. David Brooks’s The Social Animal: The Hidden Sources of Love, Character, and Achievement gives a good account of the extent to which many different forms of academic research are clustering around the propensity of all things to move into a relationship with other things, and most particularly human beings.[3]
We are social beings who find meaning in relationships with others, and it is these relationships that are the source of our flourishing and power, rather than qualifications or formal status. One of the problems with the previous political economy was its tendency to individuate and collectivise, so that relationships were neglected. Relationships are a source of power in that they generate trust and a sense of a shared destiny between people who would otherwise be estranged. Relational welfare would give incentives for people to meet and do things together, rather than put the emphasis on individual care packages, career plans and CV skills.
A third area relates to the more political issue that there is a large defection from the existing means-tested benefit system among the working class. It is seen as unfair in that people who have not put into it are sometimes beneficiaries, and as inhibiting virtue by rewarding irresponsibility and indolence. With the impact of austerity, this is moving from an irritation to a central political concern. This is at a time when it is undoubtedly the case that there is going to have to be greater welfare provision for social care, the National Health Service and pensions. There is a loss of trust in unmediated state provision, which echoes a further loss of trust in politics and political leadership. A meaningful structural reform would be to generate four contributory mutuals within the National Insurance system that would be owned and administered by those who make a contribution in the areas of social care, pensions, health and social security. It is important that those who care for their parents and children would be viewed as giving, so that there would be incentives to strengthen relationships. This would also provide an incentive for participation and engagement, as interests would be involved.
What needs to be questioned is the reliance on the state and the market as the two essential instruments. There needs to be a stress on relationships and virtuous institutions, a balance of power in the corporate governance of public and private corporations and a common good forged through the reconciliation of estranged interests. Ugly politics leads to ugly governments. A politics in which the rich or the poor are demonised is a bad politics and can end badly for both sides. The stakes are high but the quality is low. It is up to us to build a common good and raise the level – maybe we could call it the spiritual level.
Notes to Chapter 3
[1] See Papal Encyclicals, Centesimus Annus (1991), paragraph 32, and Laborem Exercens (1981), paragraph 18.
[2] See Papal Encyclical, Quadragesimo Anno (1931), paragraph 132.
[3] David Brooks, The Social Animal: The Hidden Sources of Love, Character, and Achievement, New York: Random House, 2012; see ch. 1.