Tuesday, 12 May 2015

What's wrong with David Seymour's welfare reform is what no one noticed

A call to help people off welfare benefits and into jobs will sound to most people like a goose chase. However, it comes from ACT MP David Seymour, which means he’s going to tell you it’s an easy task – and it isn’t.

Reforming the current welfare structure is all but impossible unless one is willing to radically alter or bring down the overarching consumer system – but he isn’t willing to do that either. Politicians do enjoy the odd bluster. How do I know he’s not willing? His aim in changing welfare (which is only the latest example of a much larger political belief) requires looking beyond the system for some answers about how it might be possible to alter that system.

True change means he needs to step outside the system but all he’s ever been fed is the system. I know he can’t do this because almost straight away in the article, which appeared online in the NBR's Weekend Review, he shows he has no idea this system even exists. Maybe that’s because no one can be told what the system is – they have to see it for themselves.

Imagine a large machine mobilised for people to buy things we don't need at ridiculously inflated costs, complete with advertising and branding convincing us we’re not cool if we don't have this or that thing. But when we get one of those things we discover it's of terrible quality and obsolete in six months. That’s how the system works.

The system is an inherently stratified concept, with some people occupying top positions and others the bottom. This is called controlling the capital. All movements must maintain this stratification. For instance, the creation of a welfare state was also the entrenchment of an aristocracy. They are two sides of the same leaf – inseparable. These are the system rules.

The system cannot be modified through playing by its rules. It appears immoral to most people but changing the system requires truly fresh ideas. Not ideas offering only the fetish of change. Mr Seymour’s only achieves the latter. Which is why his suggestion that jobs help poor people is precisely what the system wants him to say.

Let me explain.

Welfare and the system
When most people see a welfare mum they assume she can’t or won’t find work. This connection is understood to be a bad thing but no one stops to ask why it’s a bad thing. So let’s start with the basics: what is the system telling us is the form of the question? More importantly, what is the question the system forbids from asking?

Mr Seymour frames his question by positing a choice between either welfare or employment. In this binary junction, it is assumed welfare is the less desirable option. So we know he wishes to change the structure but these are the questions it occurs to him to ask:

Are they available for work? Have they appropriate skills or qualifications? Do single parents face the right incentives to get work?

His plan is to ameliorate poverty by offering greater employment. Simple as that. But observe he doesn’t suggest corporations invent new jobs to soak up all this wasted potential labour – that would be silly. Creating jobs springing fully formed from the head of Zeus always leads to economic pain in the long run, everyone knows that.

He might truthfully have the poor’s interests at heart but his words and ideas do nothing to change the status quo. What’s worse is those ideas make theoretical sense to all of us precisely because they reinforce the larger, all-important consumer system. Nevertheless there’s still a nasty reality in the welfare debate: the further  down the income distribution ladder you are, the more likely you are to be a single mother in a large city.

That’s certainly tragic but, from the perspective of the economy, single mothers are actually model citizens. She’s already produced a child and is willing to go all in on production/consumption because she has no other choice. This isn’t to say the woman wants to be a single mother on benefits but this is what the system wants her to be. If this mother is on benefits and working multiple jobs, then it begins to get clearer why the system’s desires line up exactly with what Mr Seymour the politician also wants:

Consideration should be given to requiring more sole parents of children younger than five to work, with appropriate support for childcare and flexibility for particular circumstances. The path out of poverty is through employment.

Yes, employment is the path out of poverty. There are plenty of studies supporting this assertion but I can still see the dollar signs dripping from that paragraph. So what exactly does Mr Seymour understand to be “poverty” here? No one lives in grass huts anymore. Poverty, according to the logic of the system, means this single mother is simply not consuming enough. Therefore, she needs either more benefits or higher wages.

Reform is defined not by the ends but by the means. Consumption is the end, and cash is the means. The form of the question assumes the ends are already decided – consume/produce – so the problem of welfare is apparently solvable by redistribution of capital.

It’s all about labour costs
When a single mother has a job, not only is she producing, she can use all that juicy extra income to consume even more while being unable to earn enough to pull herself out of the eat-sleep-consume cycle. That’s not reform, that’s the status quo.

The welfare argument is set to condition the public to believe the answer is to give these poor people something. The political argument differs only on what to give them: cash payments or jobs. The system also convinces us that staying off welfare and becoming employed has some intrinsic honour in itself. As if when a person pulls on a suit in the morning or laces a pair of work boots they are more, not less, respectable. But I recognise a long con when I see it. This ruse is designed specifically to get people to unquestionably accept the form of the question.

And it hides the true question that no one is allowed to ask. The system has persuaded Mr Seymour to frame the choice as binary: either you work in a job or you receive benefits and stay home with the kids – as if there’s no other option, no middle ground. However, from an economic perspective the real irony is that the debate isn’t actually about reform, and never was. It has always been about labour costs.

I mentioned earlier that Mr Seymour won’t deal with the elephant in the shopping mall: non-existent jobs. That’s worth teasing out a bit here. Hopefully it’s not a revelation when I say it’s no longer clear everyone needs to work. More people than ever are drawing benefits while corporations are earning record amounts. So what gives? I understand the importance of working from an ethical/character perspective, but that isn’t my point. Since the New Zealand economy no longer requires much domestic manufacturing work – China/robots can do it cheaper – and since most labour costs have evaporated, could this surplus go toward paying single mothers to think about something other than throwing rocks?

Is there a natural economic balance price where, say, a single mother can do no economically productive work at all but still be paid to be a one-person day-care centre and stay out of trouble? Let me be absolutely clear, my question isn’t: wouldn’t this be a good idea. My question is: considering this is exactly what's happening already, is the system sustainable? So what’s the cost of this programme to the New Zealand economy?

I don't have to run the numbers, Statistics New Zealand already has: $299 per week for one person, over an average of 17 years, accruing a total of $230,000. And that’s just for one solo parent. Those numbers might look destructive, but they are entirely necessary for the functioning of the system. And Mr Seymour wishes to change this? Something smells fishy, and I don’t think the winner will be the single mother.

Irrelevant forever
It’s time to ask who would benefit from his proposed amendment. Single mothers would remain one of the poorest groups in society, and have less time to look after their kids. And they certainly won’t be paid anywhere near what the company earns from their labour – that’s called controlling the capital. So who is being empowered?

Mr Seymour might not see it but, while his idea appears altruistic, it is a distraction constructed by and in favour of the status quo. It is the corporations, which are empowered by gaining both more production and more consumption with zero effort. Heads I win, tails you lose. He wants single mothers to escape poverty but he has approached the problem exactly backward. It is poverty that cannot escape single mothers. Recall that the whole point of the system is to stratify society, not equalise it. Some people at the top, some at the bottom.

This is why, to the consumer system, any skills a single mother might possess are irrelevant. Not irrelevant for now, not irrelevant “until the economy improves” – irrelevant forever. The only thing she is useful for is the exact action she’s already undertaking: purchasing Huggies.

The system makes plenty of money from single mothers just as they are. Now someone important wishes to give them extra and make them work for it? Happy days! Mr Seymour probably thinks he’s a radical progressive. He believes the move represents a shift away from heartless capitalism toward better social outcomes.

This is not a change, it is simply the maintenance of the amoral status quo for the benefit of those who control the capital. Single mothers might “appear” better off, but ask yourself one question: in his utopia, do retail sales go up or down? Exactly. The system has won.

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