PETERSAUNDERS
The Power of Community and the Limits of Government
Does free market capitalism destroy our sense of community?
Can the pursuit of ‘social justice’ by governments restore it?
“To belong and participate… The goal is to enable any citizen to meet and mix with other New Zealanders as one of them, as a full member of the community – in brief, to belong.” (1972 Royal Commission on Social Security)
“Members of our society are interdependent… Collective or social goods should be available to all, and as far as possible universally used, in order to maximise social inclusion and cohesion” (Prof Michael Keating)
Market undermines Community?
• Promotes individualism & selfishness
• Commodifies relationships
• Leads to inequality and social fragmentation
• Disregards human needs
November 2006: Blundstone announces closing Auckland and Hobart factories and moving to Asia
Concern about community:A conservative response to the two revolutions (Robert Nisbet)
Ferdinand Toennies, Gemeinschaft und Gesellschaft (1890)
“the sentiments and motives which draw people to each other, keep them together, and induce them to joint action”:
NATURAL WILL (Blood, Place, Belief)RATIONAL WILL (Self-interest, calculation –
the market order)
Strong community ties in the past? Weak community ties in the present?
Capitalism breeds individualism and selfishness?
Bournville Village, Birmingham, England
Asian market
Market, south-east Asia
Adam Smith
Measuring ‘social health’:• Crime rate• Divorce rate• Suicide rate• Rate of mental illness• etc…
Emile Durkheim
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1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
Year
Rat
e (1
950=
100)
crime 1950=100
Big Government versus Free Markets:
What’s the evidence? (a) Crime rate
Steady rise 1950 - 1970 Strong rise 1970 – mid 1990sFalling since mid 1990s
Big Government versus Free Markets:What’s the evidence? (b) Family breakdown
Divorce: strong rise 1970-1990, then flattening outEx-nuptial births: Strongly rising since 1960
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1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
Year
rate
(19
50=1
00)
crime 1950=100
divorce 1950=100
exnup 1950=100
Big Government versus Free Markets:What’s the evidence? (c) Government expenditure and ‘economic freedom’
Spending rising sharply 1970-mid 1980sEconomic freedom strengthens mid 1980s – mid 1990s
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1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
Year
Rat
e (1
950=
100)
crime 1950=100
divorce 1950=100
exnup 1950=100
spend 1950=100
econ freedom
Big Government versus Free Markets – Summary
(a) Biggest increase in government spending (1970-mid 80s) coincides with fastest rise in crime & divorce rates;(b) Growth of economic freedom (from 6.0 in 1985 to 8.6 in 1995) followed by flat divorce rate and falling crime rate
So no evidence that increased social expenditure created greater social cohesion, nor that moving to freer markets led to social fragmentation
Does rising inequality undermine social cohesion?
Ratio of equivalised household income of 8th compared with 20th percentile, 1988-2004
In NZ inequality has increased as cohesion has improved.
Jencks finds no association between inequality in a country and crime, health, family stability or reported happiness.
The unintended consequences of 100 years in pursuit of ‘social justice’:
(1)Disempowered individuals“Many people have been left with very little of importance to decide for themselves…For those at the bottom, such money as they receive is in effect pocket money, likethe money school children get from their parents. As a result they are infantilised”(Theodore Dalrymple)
“The welfare state drains too much of the life from life” (Charles Murray)
“Personal responsibility and obligation are key elements that are corroded by long-termdependency… we now have a significant entrenched behavioural problem (NoelPearson)
The unintended consequences of 100 years in pursuit of ‘social justice’:
(2) Politicised civil society
Donors get suspicious and resentful of ‘bludgers’Recipients feel stigmatised or become demanding of their ‘rights’Self-destructive behaviour escalates as we all come to realise that the government will pick up the pieces
The unintended consequences of 100 years in pursuit of ‘social justice’:
(3) Crowding out the ‘little platoons’
NYC 1900: 112 churches in 2 boros ran:
48 industrial schools; 44 sewing schools; 45 libraries; 40 kindergartens; 29 savings banks; 21 employment offices; 20 gyms/pools; 8 dispensaries; 7 nurseries; 4 lodging houses
Demise of mutual aid societies:
Conclusion: Back to Robert Nisbet…
“No social group will long survive the disappearance of its chief reasons for being” (The Quest for Community, 1953)
