Legislated Poverty and Misery

By Ken Collier

May 2005

A frequent tactic used by those who don’t want to hear opposing points of view is to shout “Conspiracy Theory.” They say it is ridiculous to suppose that dozens, hundreds or even thousands of people must have met to plan something as drastic as the end of the welfare state. They say such ideas cannot, and should not, be believed.

Except, every so often we get an actual record of people conspiring to those ends. Barbara Ehrenreich, a longtime progressive activist, wrote for Harper’s Magazine in August 1997: “The registration fee for corporate participants at the conference on ‘welfare privatization’ held in Washington, DC was $1295 (USA)—an amount almost equal to a year of welfare benefits for a Mississippi family of three. Not that a Mississippi family on welfare was likely to venture into the hotel, which rents rooms for between $300 and $400 a night, discounted to $185 for conference participants. I first learned of the conference from a welfare advocate who faxed me, indignantly, the conference brochure:

—Capitalize on the massive growth potential of the new world of welfare reform

—Gain a leading edge in the market while it is in its early stage

—Profit from the opportunities available.

In these days of the second Dubya administration in the USA, there is no longer any need to conspire about that topic, nor to be secretive about it. President Bush takes pains to promote privatization of services at every available opportunity.

Bush has lots of company among the elites of America. Lockheed Martin and Electronic Data Systems (defense contractors), Unisys and Andersen Consulting (accounting, financial systems) and many other less known firms propose to take over income security and health programs, education, even the prisons. (Yes, that is the same Arthur Andersen company of cooking-the-books notoriety.)

Plans like these came swiftly after President Bill Clinton’s welfare reform bill of 1997 which canceled the USA government obligations to the poor, first legislated in 1936. It limited lifetime welfare allowance to five years. It required adults on welfare to find work. And it turned over the federal share of welfare as block grants to the states, without any binding rule that they must be used for income security. Ehrenreich notes that in the USA, “eligibility for Medicaid and food stamps must be determined by government employees. In May, 1997, the federal Health and Human Services (HHS) administration warned Texas not to flout the law. But Texas congressional representatives have introduced legislation to remove the restrictions. Alternatively, Texas may decide to utilize the loophole offered the state by HHS and begin the privatization of food stamps and Medicaid with ‘pilot programs’ at the county level.”

If we want to see our future, look to our American cousins. Alberta continues to spearhead challenges to Canada’s federal social legislation, and the “new” federal Conservative Party consistently argues for privatization of public services, following a direction recorded in Simon Gunn’s book Revolution of the Right (Pluto/Transnational Institute) aiming to destroy the guarantees of the welfare state—income security, food, clothing, housing, education, health services—as cumbersome drags on corporate finance. (Not that the Liberals are much better, but at least they claim a positive role for government.)

Until the 1970s, industrial manufacturing capital was dominant. Those companies supplying our consumer goods wanted us all—even the poor—to have enough money to “move those refrigerators, those microwave ovens, those custom kitchens, those colour TVs.” By the mid 1970s, companies had made so much money in the consumer market that the world was awash with money, and not enough places to invest it. Finance capital took over from industrial capital as the driving force to remove barriers to global investment. Some of those barriers were (and still are) national tax systems, money transfer regulations, welfare, housing, food quality and conditions of work regulations. The welfare state had to go.

Elements of the welfare state, such as public education, health, housing, income security, human services and the rest were designed originally to help keep good relations between owners and workers. Kaiser Wilhelm in Germany, the second Napoleon in France, and elected governments in England and America, though suspicious of state intervention, chose government welfare programs over worker-led revolution. The welfare state, far from being a gift from kindly, neutral, benevolent governments, was fought for and won by workers, unions and progressive political parties.

Even now, governments try to prevent problems between rich and poor through social legislation in order to keep the economy rolling along smoothly. Governments also try to shape future generations, forecasting what will be needed as new owners and new workers struggle over their roles in the evolving economy. Industrial corporations previously saw the welfare state as a steadying and enabling influence.

The modern corporate finance class has not been satisfied with the results. Their representatives on the political right see state interventions as barriers. Privatization and its partner, globalization, establish the direction away from government regulation and state activity. It leads an anti-tax, individualistic, privatistic, “personal freedom” attack against the state.

What should we do?

In previous generations, the only successful means of affecting the conditions in which we work was through political action. I have three recommendations:

—Join and promote defensive organizations, such as anti-poverty, housing rights, women’s, environmental, First Nations, farm organizations and unions —as examples among many.

—Promote the assembly of those defensive organizations into national and international ecology, feminist, anti-racist and anti-globalization (which is rapidly becoming anti-capitalist) movements, as a means of sharing the issues and promoting the solutions beyond the usual limits of our own experience and locale.

—Promote and join a political party that represents our views and which aims to support and engage with the movement(s), not separated from them or above them.

Political involvement was the foundation of all social welfare and public service. The Settlement House movement, the women’s suffrage movement, the cooperatives that grew out of anti-poverty groups all knew political action was necessary, and the proven effective path, used by right and left forces, is the political path.

Ken Collier works at Athabasca University in Athabasca, Alberta. He is author of Social Work With Rural Peoples: Theory and Practice and After the Welfare State, New Star Publishers, Vancouver. He previously taught social work and social policy at the University of Regina in Saskatchewan, Canada.

This article was adapted from a keynote address presented to the Fourth Annual Summer Institute of Social Work, Red Deer College, Alberta, August 23, 2002 and a version previously appeared in The Advocate.

For more of Ehrenreich’s writing see: www.well.com/user/srhodes/ehrenreich.html