Craig Emerson, Market Democrats and the IK economy

Craig Emerson delivered a speech to the Sydney Institute outlining a broad platform to further reform the Australian welfare state.  The speech presented a mainstream construct of an emerging yet well-founded philosophy: that social democracy is relevant where it can influence markets for the public good.  Emerson refers to supporters of this line of thought as Market Democrats.  

I’m a supporter of this broad philosophy.  My concern is the lack of debate in relation to the role of markets in indigenous policy.  My concern is the paucity of debate concerning the relationships between indigenous peoples, markets and social policy. 

Emerson claims that:

Governments must not imprison the disadvantaged by subjugating them to the state, robbing them of self-esteem and condemning them to a life of dependency; governments must liberate them by providing opportunity for all in a truly fair society. Let us not make the disadvantaged the experiments of social engineers yearning for a different social order but lacking the stomach to practise it in their own lives. It is this social experimentation of romanticising traditional life in the harsh outback that has caused Australia’s most vulnerable – indigenous people – to be trapped in misery.

Emerson is correct in asserting that the contemporary welfare state has ‘subjugated’ indigenous peoples to State dependance, but I am not convinced that it is the ‘romanticisation’ of ‘traditional life’ that has allowed welfare dependance to flourish.  In the post-Whitlam period indigenous people were entitled to welfare provision on the basis of equal rights and equal entitlements.  This formed part of an international process aimed at removing discrimination.  When the welfare state was reformed, and where mainstream welfare structures integrated notions of reciprocity and mutual obligation, indigenous-specific programs were excluded from such reforms.  I am not convinced that this exclusion was not confined to reasons of the ‘romanticisation’ of ‘traditional life’ argument.  For example, many conservative political forces sceptical of the ‘romanticisation’ argument supported excluding such programs as a way to stem Aboriginal migration to regional centres.   

Where Emerson is correct, and where other advocates lack focus, is the connection between the State, markets and social policy.  The benefit of adopting the Market Democrat notion to indigenous policy is to look at how to harmonise the relationship between markets and the pluralism of indigenous identity.  I refer to this as the Indigenous Knowledge economy.

More over the fold. 

Emerson notes that: 

…markets are chaotic and wasteful. Predicting prices produced by markets is hazardous. Markets force businesses to close, wasting infrastructure and obliging employees to seek work elsewhere. But far more wasteful and chaotic are central planning and governments pretending to be good at running businesses in so-called mixed economies.

Consider this in the context of indigenous policy. 

At present we invest in indigenous policy as a State because subjugating them solely and absolutely to market forces would create immeasurable social (and economic) consequences.  That is, if an indigenous-specific focus of policy suddenly vanished and was replaced solely by market forces then there would be negative and compounding consequences.    

On the other hand, significant indigenous-spcific funds are invested primarily in Aboriginal corporations on the basis of ‘cultural’ capacity, with little consideration of the benefits of market forces and competition.  The consequence of current policy is that we fail to consider the dynamics of bonding social capital.       

Our economy is strong because resources (human, economic, labour) can operate across markets efficiently.  The degree and type of government intervention, support and regulation is finely tuned.  Innovation and competition are essential ingredients. 

Current indigenous policy structures compound the arguments put by Market Democrats because it invests greater regulation and control in a third sector, and away from the bonding social capital structures of indigenous peoples.  The IK economy is a concept that placates this tension.  Where policy discourse fails is discussion of how best to move to a new model.     

Further, Emerson notes (in the mainstream sense):

Of course, it is unfair if the rich get richer while the poor get poorer. But why should governments try to prevent the rich from getting richer if the poor also get richer as a consequence of the wealth-creation process?

At present, the result of indigenous policy is to enable the Aboriginal middle and upper class to get richer whilst those on the lower rungs of the economic ladder remain in their position, or get poorer.  It is no coincidence that the fragmentation of this construct aligns the middle and upper class with professional and educational opportunities synonomous with living in and associated with urban locations.  That is, those with strong connections to traditional culture are more likely to be denied employment opportunities (and are excluded from the wealth-creation process).   

Market Democrats are yet to formulate a definitive position on the matters raised in this post.    


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