New Rights Ideology and Thatcherite Policies - Term Paper Example

New Rights Ideology and Thatcherite Policies 2009 Introduction The post-war welfare systems came under pressure since the 1970s when recessions in most western countries, both market-based and welfare states, were forced to implement cuts in welfare spending because of growing pressures on public budgets. Even as states were forced to reduce public expenditure on welfare amidst local and national protests, there was an attempt to shift the responsibilities of welfare from the state to other agencies. At the same time, there was also an attempt to redefine the needs of welfare. As a result, the consensus on welfare broke down and also various critiques of welfare policies emerged in the academic circles through the 1970s and 1980s. One such critique was the New Right ideology, though not an entirely homogenous school of thought that was based on conservative and neoliberal thinking process that took an adverse view on the welfare system itself, claiming that welfare dependency leads to unused potential of the economy and the population. The New Right ideology developed in Britain since the late 1970s as the Conservative Party opposed welfare spending and was strengthened with Charles Murray’s thesis of the “underclass” and “welfare dependency” in the late 1980s. Other prominent New Right thinkers in Britain were Anderson (1978) and George Gilder (1981) (Goodin, 1998). In terms of policy, the Thatcherite policies of welfare cuts in Britain during the 1980s were broadly based on this school of thought. With Margaret Thatcher in the helm of power, economic, social and welfare policies of Britain marked a significant shift from the public expenditure-based Keynesian policies that had marked the post-war years. The Thatcherite policies, as was the Reaganite policies in the United States, were associated with “economic liberalization and renascent conservatism” by which the economic libertarianism encouraged private enterprise and at the same time a conservative attitude was adopted to maintain law order, develop nationalistic foreign policies, reverse minority rights and glorify traditional family and religious values (Pierson, 2006). New Right Ideology The New Right ideology, which was an economic ideology rather than a philosophical one, was essentially based on neo-liberalism that in turn advocated Adam Smith’s theory of liberal capitalism written in another age. Like Smith’s critique of the interventionist mercantilist policies by advocating a limited role of the government and relying on the market to bring about capitalism as well as maximum welfare of the people, the neo-liberal capitalism that monetarist economists like Milton Friedman proposed to minimize the role of government policies appear to be similar to the New Rights prescriptions for social democracy and welfare (Pierson, 2006). Thus, the New Right policies encompassed positive economics, especially microeconomics of the free market theories, and libertarian values (Kavanagh, 1987). In Britain, liberalism has changed over the years, from a negative view of the interventionist state to the acceptance of a greater degree of collectivism that has the state playing an important role in the late 20th century. As a result, two distinct schools emerged in Britain in the 1980s – one that accepted free market principles and the other that rejected it (Kavanagh, 1987). New Rights attack on welfare was based on the argument that such policies interfered with the market forces and hence distorted the incentive structure built in the market system, which is thought to be most beneficial for the society. According to this theory, only liberal capitalism can guarantee moral, economic and political freedom (Pierson). Such an approach, according the critics of New Right ideology, is not new. Such an approach, though in a different language, had already been put forwards by Joseph Townsend in 1787 and Thomas Malthus in 1834, who argued that benefits to the poor should be restricted in an industrial society (Goodin). The same argument is forwarded once again by the New Right thinkers, prominent among them being Charles Murray (1984) who based his theory of “underclass” on the basis of the following premises (quoted in Goodin): Premise 1: People respond to incentives and disincentives. Sticks and carrot work. Premise 2: People are not inherently hard working on moral. In the absence of countervailing influences, people will avoid work and be amoral. Premise 3: People must be held responsible for their actions… if society is to function. The New Right critique of welfare was emboldened by Charles Murray’s two essays in 1989 and 1993 on the concept of “underclass” and its effect on the social fabric of Britain. The term “underclass” was coined in the United States by a journalist in the 1980s to denote the behavioral patterns of the underprivileged people, without providing any value judgment. The concept was then used by American sociologists to develop a model that related the structural labor market inequalities to the plight of the “underclass” mainly comprising of the urban blacks. The notion was then used also in Britain first to depict the inequalities in housing and employment policies that, like in the United States, had racial bias. The structuralist sociologists found a combination of race and poverty as a descriptor for the “underclass” that comprised of marginalized migrant workers, refugees, asylum seekers, inner city minority population, who collectively had little control over income generation or assets (Lister). However, Murray (1989) noted that in Britain, the “underclass” had a much less racial connotation than in the United States. Murray emphasized on the behavioral aspect of the poor, by saying that it refers not to the “degree of poverty, but to a type of poverty”, which David Green in a Foreward to the first edition to Murray’s essay elaborated as “those distinguished by their undesirable behavior, including drug-taking, crime, illegitimacy, failure to hold down a job, truancy from school and casual violence” (quoted in Lister). At a more tangible level, the “underclass” usually comprises of those who are dependent on state welfare benefits. However, there are various operational problems with defining the underclass in terms of welfare receipts. For example, some people apply for welfare for short periods of time, which means such people will qualify to be in this group only for the duration of the welfare receipts. Similarly, some people who are engaged in low-paid jobs top it up with benefits hence strictly defining underclass as welfare-recipients would overestimate the figure. The estimation becomes all the more unclear while considering those outside the labor market, for example the chronically ill or the aged (Lister, 1996). According to this theory, the creation of the “underclass” is related to welfare dependency which induces illegitimate births, lone parenthood and negative moral behavior. Welfare is claimed to lead to welfare dependency and reluctance to take up employment even when it is available. Depicted in the media as well as some scholarly literature, the underclass is not simply a set of marginalized people but also undesirable and threatening to the moral fabric of the society. This class challenges the middle class at a time when the gap between the high income and the low income was widening in both the United States and Britain. The entire definition of underclass as well as the policy prescriptions is loaded with stigmatization. In particular, women who have children out of wedlock are singled out as the welfare dependent and morally inferior. Murray (1990, cited in Lister, 1996) notes that “the sexual revolution of the 1960s” has resulted in an erosion of morality that has in turn led to a growing number of illegitimate children. The moralizing attitude of Murray’s thesis and the movement towards “restoration of the two-parent family” has been the basic premise of the New Right agenda (Lister, 1996). According to critics of the theory, this has diverted the issue from an economic one to a social one with wider political dimensions. Such a view, according to the view of the latter, focuses on the victimized as the accused and turns the gaze of the social scientists on institutions that maintain and in fact even promote social inequalities, that, according to some scholars, have even created an “overclass” comprising the elite of the society. Thus, while the behavioralists like Murray focus on the marginalized in a negative perspective, structuralists, like Alan Walker, criticize the view as one that blames the victim and focus on the structural unemployment that leads to the poor being left out of economic gains of the society (Lister, 1996). Effect of the New Right ideology on welfare policies In the policy perspective, the New Right criticized the post-war tendency of burgeoning public expenditure, which it saw as the major reason for the recession. It saw welfare administered by the government as a waste of resources and bureaucratic tangle. Instead, it preferred welfare, if needed, to be provided by the private sector through a price mechanism. According to this theory, welfare policies should be based on absolute poverty and not relative poverty so that there is no tendency for people to become welfare-dependent. It saw social policies wielding to political pressure that claimed welfare on the basis of a very abstract notion of relative poverty. The New Right ideology also linked the social problems like unemployment, crime, violence and family breakdowns with welfare dependency (Langan, 1998). However, the New Right thinkers do not provide with a unique set of prescriptions for welfare policies. While a liberal strand of New Right policies proposed a relatively free economy and polity, a more conservative attitude restrictively directed the society. Both schools of thought, however, objected to a welfare state because of the associated administrative and bureaucratic inefficiencies, lack of consumer choice for welfare services, huge resource requirements hence making it objectionable from the perspective of the financiers. In a sense, the New Right thinkers thought that the problems of industrial capitalism lay not in market failure but bypassing the market for the provision of welfare policies (Pierson, 2006). In the first two terms of Conservative Party rule in Britain after it came to power in 1979, the welfare policy was restructured, without actually dismantling it, in response to the New Right critique (Langan). However, after the election of the Party in the third term, it grew bolder in challenging the post-war welfare paradigm. The policy shift was aided with the collapse of the economic boom of the late 1980s and the failed hopes in recovery as well as the dismantling of the Berlin Wall in 1989, integration of the eastern bloc with western Europe and the end of the Cold War. Even as greater labor movement into Britain as a result of these factors induced demand for more welfare from leftist politicians as well as academicians to deal with growing inequalities, the conservatives pointed out to the greater financial burden (Langan, 1998). Simultaneous to the argument stressing on financial burden, the New Right thinkers also highlighted the fact that welfare policies were based on ‘relative poverty’, that is, poverty measured in comparison to the rest of the society rather than in terms of ‘absolute poverty’, that is, poverty measured in terms of chances of survival. The leftist argument for welfare based on relative poverty argued that people who could not earn income because of unemployment, disabilities or sickness should be provided with income that allowed them not simply to survive but also to have a decent living standard in comparison to the rest of the population (Runciman, 1966, cited in Langan, 1998). In this line of thinking, differences in health among groups of population can be explained through the socio-economic differences, that is differences in income, social stratification, access to social capital, social connectedness, gender and other such social parameters (Philips, 2005). Income inequalities between different groups of people are found to result in differences in life expectancy and mortality rates. The relationship between income inequality and mortality rate is found in differences in investment of social capital, that is, investments in social trusts and membership of voluntary groups for health matters (Kawachi et al, 1997). In this approach to public health, social cohesion is seen to be a more important factor than individual lifestyle parameters for establishing the basis for public health and epidemiology. As a corollary, interventions strategies to improve community health needs to be targeted towards the social parameters. Treatment approaches then focus towards building the “social capital” rather than “individual treatment”. Hence, the political environment that ‘sensitises” the social divide and income inequalities are more important than individual causal model (Lomas, 1999). The New Right thinkers, on the other hand, argued that this resulted in welfare dependency and reduced the incentives to search for employment and work. Charles Murray (1989), for example, pointed out to the existence of a new class of urban people – the ‘New Rabble’ or the ‘underclass’ – who are poor because they prefer to be dependent on welfare benefits. To Murray, many of the social ills of urban Britain, like drug abuse, family instability, crime, school dropout, are all related to the dependence on welfare schemes, which act as a deterrent towards work. On the other hand, the structuralist view is that most of the British urban poor are prevented from working either because there is not enough employment opportunities or because the labor market is distorted such that the poor are restricted to work as casual labor (Cox, 2003). In this theory, most crucial poverty alleviation programs include providing safety nets for the poor in the face of globalization that cannot be reversed. Such interventions include providing the essential infrastructure in housing and other amenities like electricity, solid waste management, education and health programs. Thatcherism For some scholars, the term Thatcherism was not a representation of a set of policies alone but an overall worldview. It is a composite idea of the moral dimension depicted by market entrepreneurialism that was anti-union rather than anti-state and the revival of nationalism that this ideology brought about needs to be seen in the context of Britain’s post-colonial political economy. Thatcherism aimed to attack issues that were of popular concern rather than develop a model for British society. As a result, Thatcherism became an “authoritarian populism” or an “organization by consent” that created a strong centrist state while also reducing the powers of trade unions and engaged in law and order campaigns and other such populist measures (Smith, 1994). As a result, it raised issues like “family values” and “nationalism” that have long been on the agenda of conservative politics. Thus, Thatcherism was nothing but reshaping old anxieties in the new context. The essential elements of Thatcherism were based on the virtues of market that believed in the efficiency of the market that was free from government intervention. This view in turn depended on the virtues of individualism as opposed to dependency that welfare was supposed to induce. The individual is seen to be self-reliant and responsible for his own actions. Hence, any interference into the development of individualism, which was thought to be typically the case for welfare dependency, is a hindrance to the advancement of society. Much of the New Right theories on individualism drew on Hayek (1944, 1949, 1960, cited in McAuley, 2003) who thought the freedom to buy, sell and accumulate was the foundations for developing a libertian system. In order to promote markets and individualism, it was essential to have a strong government. Thus the New Right ideology as well as Thatcherism moved away from neoliberalism to some extent. Margaret Thatcher, in particular, opposed the dependency culture of welfare, or what she called the “nanny state”, and argued that the trickle-down effect of wealth creation, rather than direct welfare policies targeted at the poor, would benefit the marginalized and the poor to a greater extent (McAuley, 2003). The essential characteristics of Thatcherism was its commitment to laissez-faire economy and reduced levels of public expenditure, which could in turn enable tax cuts to promote wealth creation. According to the New Right policies in the Thatcher years, the fear of unemployment, in the absence of welfare policies, would keep inflation and wages low in a situation of tight money policies. Low inflation rates were thought to be essential for economic stability. The Thatcher years were marked not only by reduced rates of inflation and public expenditure and tax cuts but also higher levels of industrial production and productivity and the privatization of various industries, including British Aerospace, British Telecom and British Gas (McAuley, 2003). Despite the similarities between New Right ideology and Thatcherism in terms of conservatism and alignment with neo-liberal ideas, the two schools were not always been in unison. Although, typically, both schools of thought are taken to be conservative in terms of family and moral issues and hence necessarily adopting an anti-adoption stand, many individual New Right thinkers and free market Thatcherites have also been pro-abortion. For example, the Thatcher government, despite many of the politicians including Margaret Thatcher’s anti-abortion opinion, did not ban selling of contraceptives to girls below the age of 16. Thatcher, herself, despite the pronounced conservative attitude, treaded the middle path when it concerned feminist issues (Smith, 1994). Studies have also found evidence that contradict the welfare dependency theory. The characteristics of welfare recipients vary significantly from the thesis proposed by the New Right thinkers. For example, Cox (2003), by studying a government agency that distributes welfare benefits found that the majority of recipients were not teenage mothers or lone mothers with abundant children, as the dependency theory seems to imply. Typically, lone parents who claimed welfare were not teenage mothers and most of them had only one or two children. Besides, there was also no evidence of the thesis that welfare benefits attracted early parenthood as the thesis claimed. Also, the welfare-dependent population has not been static but changing in composition. Very few of the recipients were continuous claimants of welfare, showing that they were not dependent on welfare. Conclusion Thus, the New Right ideology that grew in Britain was based on the conservative approach to develop a behavioural approach to welfare policies. It marked a shift in approach from public funded welfare policies towards a neoliberal approach to economic and social policies. This was also based on a behavioural approach to social policies in which the “underclass” was defined as the welfare-dependent population who were induced towards a life of crime, violence, lone and early parenthood and slothful attitude towards employment. However, such view has been severely criticised by the structuralist school of thought that took this as a victimisation and stigmatisation of the marginalised. The Thatcherite policies that aimed at reduction of public spending and shifting of many of the welfare provisions were based on such a New Right and neo-liberal approach. The policies were in nature conservative and populist that focused on traditional family values as well as a market-led economy. Works Cited Cox, Melissa, Welfare Dependence and the Dynamics in Britain, Presented at “Women Working To Make a Difference” IWPR’s Seventh International Policy Research Conference, June 2003 Goodin, Robert R, Reasons for Welfare: The Political Theory of the Welfare State, Princeton University Press, 1998 Kavanagh, Dennis, Thatcherism and British Politics: The End of Consensus? Oxford University Press, 1987 Kawachi, I et al., Social capital, income inequality and mortality American Journal of Public Health, 1997 Sep; 87(9):1491-8 Langan, Mary, Welfare: Needs, Rights and Risks, 1998, London: Routledge Lister, Ruth (ed). Charles Murray and the Underclass: The Developing Debate, IEA Health and Welfare Unit, Choice in Welfare No 33, 1996 Lomas, Jonathan, Social capital and health: Implications for public health and epidemiology, Social Science and Medicine, Volume 47 Issue 9, November 1998 McAuley, James, An Introduction to Politics, State and Society, Sage, 2003 Murray, C, The Emerging British Underclass, London, IEA Health and Welfare Unit, 1990 Murray, C, Underclass: The Crisis Deepens, IEA Health and Welfare Unit/ Sunday Times, 1994 Pierson, Christopher, Beyond Welfare State? The New Political Economy of Welfare, Polity, 2006 Philips, Susan P, Defining and measuring gender: A social determinant of health whose time has come, International Journal for Equity in Health 2005, 4:11 Runcimen, W.G, Relative Deprivation and Social Justice: A Study of Attitudes to Social Equality in the Twentieth Century, 1966, London: Routledge Smith, Anna Marie, New Right Discourse on Race and Sexuality: 1968-1900, Cambridge University Press, 1994 Read More