Managerialism v individualism

Although contemporary society is supposed to champion individualism, it often fails to do so in practice because the desires of the individual frequently clash with the smooth functioning of the managerial state.

A classic example of this is the modern state's attitude to owner-operated small businesses.

Despite the pro-small business rhetoric that we’ve been hearing since the late 70s, most modern liberal governments almost invariably consider small businesses a pain in the ass.

As DIY generalists, owner-operator businessmen and women, violate one of the primary tenants of economic theory, that people should specialise in one task if possible, since according to rational economic thinking, specialisation equals efficiency and small-scale multi-tasking doesn't.

Government bureaucracies also find educated specialists a lot easier to deal with. This is why government and big business get on so well. Both have large bureaucracies staffed by professional employees with specialised skills who can talk to each other in the same jargon-filled language. Subsequently government's in most western countries have been making life more difficult for small business, with increasing regulations, indirect taxes and new or expanding accident compensation levees. Some free business advice is now available, but it tends to be of the generic common-sense kind, which is often of limited use to those in specialised, technical fields.

The recent bailouts of big US and UK corporations in the financial sector, is only likely to add to the already high level of grievance felt by the western small business sector.

Interestingly, while governments in the individualist West have been steadily making life harder for small businesses, governments in communitarian Japan have been trying to make life easier for them, with specialist help for example in research and marketing, and in learning to use the latest technology.

This seems paradoxical from the perspective of western individualism -shouldn't collectivists who believe in tempering economic goals with social ones be anti-small business?

Well it does make sense if you take into account that small business is in many respects a communitarian activity, and that people often go into business for non-rational reasons.

People prefer working for themselves for all sorts of reasons; they don't get on with their co-workers, they want to work in a place of their own choosing rather than sit in traffic for hours, they don't have a great CV, they want to pass on a business to their children, and so on and so on.

Since Japan is more communitarian society than most western countries, it understands that rational managerialism can undermine social cohesion if pushed too far, so the country’s elites try to direct the goals of the bureaucracy towards the needs of society rather than re-mould society to fit the rational logic of the bureaucracy.

No doubt Japanese small business owners still have a lot of hassles with government bureaucracy, but at least they know that the bureaucracy isn't ideologically opposed to them.

Unlike westerners, the Japanese also have a more concrete, producerist mentality when it comes to the economy and they realise that in a post-industrial society, many people will struggle to find productive employment which adds real value to society.

Conversely, western elites seem to assume that laid off manufacturing workers can easily find steady, reasonably well-paid work in the service sector, even though much of what the service sector produces is non-essential distractions that people have to cut back on in a recession.

Another example of managerial opposition to practical individualism is secondary taxation. Since people who hold multiple jobs are an inconvenience to the state, it discourages people form taking on more than one job by overtaxing them and then making wait in hope for a tax rebate.

A similar bureaucracy first mentality exists in welfare departments, where, in New Zealand and Britain for example, those seeking short-term unemployment relief are treated like minor criminals, while long-term welfare recipients like solo parents and sickness beneficiaries are regarded as permanent wards of the state.

Psychometrics and Welfare

There is currently a lot of debate in New Zealand about reforming the welfare system, with the left arguing that welfare problems are a product of environmental factors, and the right arguing that the ‘welfare culture’ undermines individual willpower. There is little talk though, about genetic factors in welfare dependency, and the role psychometrics can play in social welfare policy.

Today’s workplace is an increasingly complex and competitive environment with few sheltered government jobs. In the 1960s it was government policy to create jobs for those with marginal capabilities. In the present economic climate this is not really feasible because of the decline of low-skilled work in factories, farms and offices. Today we need to know how many people on welfare can actually fill essential government vacancies and private sector jobs. However, the Government can’t make fair assessments about welfare recipients unless it has some reasonably objective means of assessing their capabilities.

IQ testing is a good predictor of success in many areas of life including success in job training and in government work, and is frequently used by the U.S military, which has to assess large numbers of applicants from low socio-economic backgrounds. At present, Work and Income Support only assesses applicants work interests and not their actual work capabilities. However, just because someone wants to do a particular type of job doesn’t mean they can- a fact that the military is clearly well aware of.

It is estimated that around 5 percent of the general population have learning disorders of one form or another and this percentage is likely to be much higher among those on welfare benefits. IQ testing can also be good for indicating the presence of learning disabilities. More often than not, a large gap between the verbal and non-verbal scores on an IQ test indicates the presence of a learning disability, while low scores on particular subtests, such as coding, often indicative of an attention disorder.

Ideally IQ testing should be employed at the secondary level as this would allow schools to give better career guidance and would not bias test results. Although testing could be done on long-term welfare beneficiaries it is possible that some welfare recipients might try to undermine the testing by deliberately trying to achieve low scores. Psychometricians are also developing ways to tests people’s reactions and ability to make quick decisions which is important for many jobs- particularly those involving the use of dangerous machinery.

Many of the long-term unemployed are now moving off unemployment benefits and onto sickness benefits with a big increase in people claiming sickness benefits for mental disorders. Increasingly, governments are responding by providing subsidised counselling for disorders like anxiety and depression. Before sending people to counselling for subjectively defined disorders like ‘depression’ welfare providers should test for the presence of learning disorders which often cause such affective disorders and which are easier to objectively assess.

The increase in sickness benefits could also be partially offset by introducing a sub-category of sickness benefit that requires recipients to look for part-time work. It is likely that many people with mental health disorders lack the mental stamina to undertake full time work but may be quite capable of working on a part-time basis. Indeed, they may benefit from the mental and physical stimulation from regular, part-time employment.

As it is currently conceived, the New Zealand welfare system is based on poorly defined, subjective criteria derived from outdated, ‘blank slate’ thinking about human abilities. It is time for the Government to adopt a modern, scientific approach to welfare that goes beyond the current thinking of the liberal left and the libertarian/neo-conservative right.

Welfare and the Debt Culture

Over the last decade there has been an increasing trend in New Zealand towards ‘welfare debt’, where welfare recipients borrow, or are given, money from the government due to mismanagement of their welfare entitlements. With New Zealander’s being among the developed world’s poorest savers the last thing the country needs is a parallel ‘debt culture’ among its welfare recipients.

As someone who generally takes a fairly centrist stance on economic issues I have tended to assume that New Zealand’s post 1990 welfare system is 'firm but fair'.

Unemployment benefit for example, is related to prices not wages, so anyone on unemployment benefit receives a modest basis living allowance that takes care of basics such as food and accommodation costs. In contrast, in some European countries unemployment rates are related to previous wages, so many unemployed people receive benefits far above the minimum wage- a factor which can't be helping Europe's high unemployment rate.

However, today welfare recipients are routinely given additional money for living costs already covered by benefits. While a single mother might need to borrow money for a second hand fridge there is no reason why a single person should need to obtain extra money for things like food, clothing and accommodation for which they are already given money in their basic benefit- in many cases though, this is exactly what is happening.

A common area of abuse is the Sickness Benefit. For example, I know of an able bodied, reasonably intelligent 21 year male on the Sickness Benefit with an anxiety disorder caused by excessive use of sleeping pills. The sleeping pills were taken for insomnia and other minor problems caused by excessive smoking of cannabis (why his doctor was so stupid as to give him so many sleeping pills I have no idea). This guy receives enough money for food, accommodation and basic living costs yet he managed to get hold of 700 dollars from Work and Income Support to pay for unpaid rent, 250 dollars of which were lost when another slacker, who he stupidly gave his bank card pin number to, promptly raided his account. Naturally he’s got the money back through insurance of course. This individual also regularly violates his doctor’s orders by taking other substances such as hash and alcohol.

If welfare recipients in New Zealand are going to be the freedom to manage the money that is given to them they should also have to suffer the consequences of mismanaging that money. If they are given money for rent and waste it, then they should not be given more money for rent. If this ultimately means a few nights on the street then so be it. Repeat offenders should have the freedom to manage their money taken off them with rent money paid directly to landlords and food vouchers and bus passes instead of cash. Similarly, those on sickness benefits from self-inflicted drug abuse should have to sit blood and fitness tests to prove they are not violating doctor’s orders. If they are, then they should be put onto unemployment benefit instead.

Although these ideas may horrify many on the left I consider them to be reasonable centrist policies. The difference between my position and that advocated by the libertarian right (slash all benefits) is that I wish to discriminate between responsible and irresponsible welfare recipients in a way that most people would find reasonable. Such a distinction is essential in combating the pervasive culture of debt and irresponsibility in today’s society.