Simon Duffy argues that the current ESA system is deeply flawed and suggests an alternative based on a better understanding of unemployment.
Author: Simon Duffy
In the UK today disabled people are astonished and affronted by the development of a whole new system that has emerged out of the Department of Work & Pensions (DWP). This system has many parts, but is often referred to by the name of one entitlement that is part of the system - the Employment and Support Allowance (ESA).
The ESA system is failing and is bound to fail. This is not just the fault of the current government. The system was largely designed by the previous government - although this government has made some of its provisions even harsher.
The system is bound to fail because it is solving the wrong problem in the wrong way. Whitehall cannot solve the problem of unemployment. Whitehall doesn’t even seem to know what the real problem of unemployment is.
The problem of unemployment is not one problem it is two logically distinct problems:
In the United Kingdom, which has the most centralised welfare system in the world (after New Zealand) we leave the solution of these two problems to the DWP in Whitehall. And, over the past few years, the DWP has introduced a complex array of inter-linked measures to ‘solve’ these two problems:
The whole panoply of tests, systems and rules, all with their own weird acronyms, lends an appearance of rationality to the system; but all of this is an illusion. The whole system makes no sense and is based on a deeply flawed understanding of the real world, human motivations and the basic laws of economics.
There are two obvious flaws:
Being able to find work requires someone willing to offer to provide work. The ability to work is not a property of a person (a capacity or an incapacity, a willingness or an unwillingness) it is the existence (or non-existence) of a relationship between a person with needs, who seeks assistance, and someone with gifts who seeks to express them.
Often such relationships do not involve any money - but when they do they can provide a vital source of income to the person with the desired gifts. We would not want to live in a world where all our needs are met by payments - but in the modern world paid work plays a useful role in helping people meet some of their needs, make a valued contribution and distribute income between each other.
Yet the primary focus of the Work Programme is to make the person ready for employment, as if jobs were things that either exist or don’t exist. The focus is on the person’s capabilities, cv, skills, attitude, appearance etc. The programme does not change the overall level of work available, it simply tries to distribute work opportunities differently. Each time it helps someone who has been unemployed get a job, it deprives someone else of getting the same job. They are not altering the level of paid employment, they are just changing its distribution.
Treating work like an object is bad economics and bad public policy. It is better to think about how society can be organised so that there are more opportunities for relationships of contribution - a richer network of connections, which include paid work. As the Campaign for a Fair Society’s Manifesto states:
We want all people to have the same opportunities – in housing, work, education, leisure and relationships. Then people will be part of their community. They will get the chance to put something in as well as get support.
But access to opportunities, including paid work, cannot be achieved by central government, nor by the private corporations it selects. Instead we need an approach that creates these new opportunities at the local level:
Work is created in communities, not by central government. As Nassim Nicholas Taleb argues:
How could we have the happiest nation in the world, Denmark ...and a monstrously large state? ...The state exists as tax collector, but the money is spent in the communes themselves, directed by the communes - for, say, skills training locally determined as deemed necessary by the community themselves, to respond to private demand for workers. [Nassim Nicholas Taleb, Antifragile, p. 131]
Overly centralised responses to unemployment become bureaucratic and insensitive. Whitehall cannot spot opportunities at the level of the individual or the community. It will continue to fail.
As parents (especially mothers), carers and many other people who work very hard know, work doesn’t necessarily provide any income at all. Even if people do work for money there is no guarantee that they will be paid enough for a basic income. This is true even when we set minimum wage rates or living wage rates.
To some people this is surprising, but it is a natural feature of even the most efficient market: the labour market will only clear (i.e. everybody will be in work) with the maximum level of price flexibility. If we impose minimum wage rates then ultimately the market will reach a point where somebody may be willing to work, but nobody is willing to pay the fixed proce. Or, to put this another way, the only way of guaranteeing full employment in a free market is to leave people free to pay wages that may well fall short of anything we may consider acceptable.
Now it is certainly understandable that there are some people who will advocate for flexible labour markets, and who will also pretend that flexible labour markets can also provide enough income for everyone. This may be what some call 'neoliberalism'. However, in reality, even the most intelligent advocates of a flexible labour market will also recognise that the market won’t lift everyone out of poverty.
For example, one of the most important economists and liberal thinkers of the twentieth century, Friedrich von Hayek takes it for granted that the free market won’t meet everybody’s needs on its own:
We shall again take for granted the availability of a system of public relief which provides a uniform minimum for all instances of proved need, so that no member of the community need be in want of food or shelter. [Friedrich von Hayek, The Constitution of Liberty, p. 300]
It is time to get real and recognise that a decent minimum income must be guaranteed, not by the market, but by the community as a whole. It is for this reason that the Campaign for a Fair Society supports the idea of a basic income, or citizen income, for all:
We need a new system that gives everyone a reasonable income. We need a system that makes it worth getting a job, saving money and getting involved in community life.
We do not want to see more divisions between different groups each hoping to be slightly less impoverished than some other ‘less deserving group’, we want to see the highest reasonable level of basic income, guaranteed for all citizens.
Even if we agree that the current system is unfair and needs to change, the challenge is that power lies with people who do not think the current system is unfair. In fact the current system seems to suit the powerful very well:
Today there is no support for more radical thinking, aimed at social justice, within any of the mainstream political parties. This makes the task of resisting injustice very difficult indeed.
However, here are some thoughts about strategy which may prove useful:
Instead of fighting distinct battles it may be better to limit the DWP's room for manoeuvre by showing people the absurdity of the whole ESA system:
We must follow the path described by G K Chesterton, and focus on revealing the underlying absurdity of things:
Everywhere the man who alters things begins by liking things. And the real explanation of this success of the optimistic reformer, of this failure of the pessimistic reformer, is, after all, an explanation of sufficient simplicity. It is because the optimist can look at wrong not only with indignation, but with a startled indignation. When the pessimist looks at any infamy, it is to him, after all, only a repetition of the infamy of existence. The Court of Chancery is indefensible - like mankind. The Inquisition is abominable - like the universe. But the optimist sees injustice as something discordant and unexpected, and it stings him into action. The pessimist can be enraged at wrong; but only the optimist can be surprised at it. [G K Chesterton, All Things Considered]
When considering the changes we want to advocate there is little advantage in allowing the other side to dictate the rules of the debate. Ideas need to be bold, clear and attractive - not technical adjustments. Here are some suggested solutions:
The hardest thing for an oppressed groups is to recognise how much it has in common with other oppressed groups. Often it feels like we must pull ourselves out of harm’s way on our own and that we cannot afford to listen to the problems and perspectives of other groups.
Today the temptation to separate ourselves from others is even greater.
Increasingly the political elites are falling back on the dreadful distinction between ‘the deserving and undeserving poor.’ This helps them blame the poor for poverty and it divides the poor amongst themselves, as different groups seek to distance themselves from the stigma of being amongst the ‘undeserving’. But this disunity will defeat our boldest visions. It turns out that a smaller group of the ‘deserving’ poor will be even less powerful than the poor as a whole.
The publisher is the Centre for Welfare Reform.
How To Reform The ESA System © Simon Duffy 2013.
All Rights Reserved. No part of this paper may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews.