Challenging market orthodoxy: the economic lessons of Elinor Ostrom

It is time that those of us concerned about social and economic justice and the role of the NFP sector and civil society start developing serious policy alternatives to the market driven policies that are being imposed in social policy and the delivery of social and community services.

Three years after her death in 2012 the work of  Elinor Ostrom remains more relevant than ever for those of us campaigning for alternatives to the contemporary orthodoxy of market fundamentalism and neoliberalism that has colonized large parts of the not-for-profit and civil society sectors.

 

 Ostrom who was a Professor at Indiana University was the first woman to be awarded the Nobel Prize for Economic Sciences in 2009.

Ostrom's work challenged and rebutted fundamental economic beliefs, particularly free market and neo-classical economic paradigms. Ostrom was particularly concerned with  relational aspects of economic activity — the ways in which people interact and negotiate with each other to forge rules and informal social understandings.

Ostrom's early work focused on what she called co-production.

 

Ostrom argued that many public services depend heavily on the contribution of time and effort by the persons who consume these services, i.e. the clients and citizens.

 

Ostrom believed that services rely as much upon the unacknowledged knowledge, assets and efforts of service ‘users’ as the expertise of professional providers. It was the informal understanding of local communities and the on the ground relationships that make services more effective.

Co-production describes the relationship that exist between ‘regular producers’, like health workers, police, and schoolteachers and their ‘clients’ who may be transformed by the services into safer, better educated and/or healthier persons.

Ostrom defined co-production as

 “…the mix of activities that both public service agents and citizens contribute to the provision of public services. The former are involved as professionals, or ‘regular producers’, while ‘citizen production’ is based on voluntary efforts by individuals and groups to enhance the quality and/or quantity of the services they use”

One implication is that privatization of public services and the turning over of services to the market fundamentally transforms the relationship between provider and service user, hampering the development of co-production and democratic governance.

Her later work examined how people and communities collaborate and organize themselves to manage collective shared resources like forests, fisheries and natural and social resources. The research overturned the conventional wisdom about government regulation  and challenged the idea that private ownership of public resources is better and more effective than the public and collective sphere.

Ostrom's work provides clear evidence  that the commons-based traditions of cooperation and communal management of resources is not a violation of basic economic common sense.

Her work undermines political conservatives and mainstream economists who denigrate collectively managed property and government and who argue that only private property and the "free market" can responsibly manage resources.  Her work also directly challenges current ideas that privatization and private ownership and expert management of resources is a more effective strategy than collective and public management

Ostrom advocated a “polycentric” approach to managing shared or common resources involving oversight “at multiple levels with autonomy at each level. She argued that shared management of resources helps to establish rules that “tend to encourage the growth of trust and reciprocity” among people who use and care for a particular commons.

Ostrim argued that key management decisions should be made as close to the scene of events and the people and groups involved as possible. Her work showed that the people most affected by or with a stake in shared or common resources are the ones best able to collaborate to use and manage those shared resources effectively and sustainably.

Her work demonstrates that ordinary people are able to create rules, institutions and systems that ensure the equitable and sustainable management of shared and common resources, what is often called our 'common wealth'.

She demonstrated the importance of shared (collective) rather than expert or private management of resources and knowledge and emphasises the importance of active citizen participation. She cited a comprehensive study of 100 forests in 14 countries that detailed how the involvement of local people in decision making is more important to successfully sustaining healthy forests than who is actually in charge of the forests.

 David Bollier writes of the significance of Ostrom's work:

In the 1970s, economics was quickly veering into a kind of religious fundamentalism. It was a discipline obsessed with “rational individualism,” private property rights and markets even though the universe of meaningful human activity is much broader and complex. Lin Ostrom pioneered a different, more humanistic way of thinking about “the economy” and resource management. She originally focused on property rights and “common-pool resources,” collective resources over which no one has private property rights or exclusive control, such as fishers, grazing lands and groundwater. This work later evolved into a broader study of the commons as a rich, cross-cultural socio-ecological paradigm. Working within the social sciences, Ostrom proceeded to build a new school of thought within the standard economic narrative while extending it in vital ways.

 Ostrom's work also has direct relevance to the current economic and environment crises. She wrote:

"We cannot rely on singular global policies to solve the problem of managing our common resources: the oceans, atmosphere, forests, waterways, and rich diversity of life that combine to create the right conditions for life, including seven billion humans, to thrive.....Success will hinge on developing many overlapping policies to achieve the goals,.......We have a decade to act before the economic cost of current viable solutions becomes too high. Without action, we risk catastrophic and perhaps irreversible changes to our life-support system.”

Articles written in memory of her work are here, here, here and here.

A reading list of her work is here.

The last article she wrote before she died is here

Her last book, published just before her death was titled Working Together: Collective Action, the Commons, and Multiple Methods in Practice, and describes the advantages of using several different research methods to study a problem.

Abbott led opposition to adopt UK style Big Society policies

 Writing in the Sydney Morning Herald Lenore Taylor traces the influence of the UK Conservative Government's Big Society agenda on the Coalition Opposition's social policy agenda for the next election.

Coalition frontbenchers have been instructed to slice away federal bureaucratic oversight of aged care, childcare, employment and family services in a bid to devolve government power and deliver budget savings through public service cuts.

The Coalition, which needs to find more than $30 billion in spending cuts, will pledge cuts to the bureaucracy, but says it will not hit frontline services. The policy is in line with the controversial ''Big Society'' philosophy of British thinker Phillip Blond, who was in Canberra this week for meetings with Coalition leader Tony Abbott and most of his frontbench.

Coalition families spokesman Kevin Andrews told The Saturday Age he had developed the model for stripping unnecessary federal oversight of federally funded services delivered by community and private organisations.

But Big Society rhetoric provides cover for severe austerity measures and a fundamental transformation of the delivery of publicly funded human and community services. 
 
In the UK Big Society rhetoric was used to justify sweeping cuts to public services, to community services and even to the community and voluntary organisations it was supposed to nurture.
 
It has also produced the largest ever privatisation of human and community services in UK history with large swathes of the human and community services industry now under the control of private corporations.

Despite promises by the UK Government that local devolution would primarily benefit small community based not- for- profit, it has been large corporations who have been the real winners.

Taylor notes, correctly, that:

But in Britain, the outsourcing program that was supposed to benefit little community groups ended up giving enormous contracts to large corporations, such as Serco, which runs Australia's detention centres, and in some parts of Britain now runs all the government-funded schools.

The implications of the Big Society agenda for Australia are well documented in a recent report by the Centre for Policy Development titled Big Society: How the UK Government is Dismantling the State and what it means for Australia. 

The Report shows among other things that the reality of Big Society Agenda is vastly different to its rhetoric. The impacts of the Big Society programs in the UK have included:

• An £81 billion cut in public spending over four years including an average 19 per cent budget cut to government agencies, 60 per cent cut to the budget for new public housing and £7 billion cut to the welfare budget.
• The UK’s public service is expected to shrink by up to 710,000 public servants over six years.
• Corporations and the largest charities have dominated the commissioning process: 35 of 40 Work Programme (employment agency) contracts were awarded to corporations.
• Cameron’s budgets have dealt a £5 billion funding cut to the UK’s community sector and funding cuts of £110 million to 2,000 UK charities
• The number of people employed in the UK’s community sector fell by 70,000.
• Local government budgets were cut by more than a quarter in 2010-11 resulting in staff cuts of 10-20 per cent and widespread cuts to programs.
• During 2010-11, public sector employment fell by 4.3 per cent. Private sector employment increased by 1.5 per cent.

Why privatization and corporate delivery of human and communty services to vulnerable people should be opposed

It is, instead, almost surely a glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation.
Paul Krugman

When a market liberal like Paul Krugman writes in a mainstream US newspaper about the horrors resulting from the privatization of human services to corporate and for profit providers it is more evidence that the privatization of public functions and the corporate delivery of  human and community services to vulnerable and marginalised people must be opposed.

Krugman's piece focuses on an investigation by the The New York Times about New Jersey’s system of halfway houses — privately run adjuncts to the regular system of prisons.  Krugman writes that the horrors described in the New York Times piece are not an isolated example but part of a broader pattern in which essential functions of government are being both privatized and degraded. 
Krugman also highlights how the privatization of public functions is built upon powerful networks and connections between politicians, elected offocials, lobbyits and the corporations who win the contracts.

Krugman writes:

"... the Times’s reports instead portray something closer to hell on earth — an understaffed, poorly run system, with a demoralized work force, from which the most dangerous individuals often escape to wreak havoc, while relatively mild offenders face terror and abuse at the hands of other inmates.

It’s a terrible story. But, as I said, you really need to see it in the broader context of a nationwide drive on the part of America’s right to privatize government functions, very much including the operation of prisons. What’s behind this drive?

       

You might be tempted to say that it reflects conservative belief in the magic of the marketplace, in the superiority of free-market competition over government planning. And that’s certainly the way right-wing politicians like to frame the issue......

So what’s really behind the drive to privatize prisons, and just about everything else?

      

One answer is that privatization can serve as a stealth form of government borrowing, in which governments avoid recording upfront expenses (or even raise money by selling existing facilities) while raising their long-run costs in ways taxpayers can’t see. We hear a lot about the hidden debts that states have incurred in the form of pension liabilities; we don’t hear much about the hidden debts now being accumulated in the form of long-term contracts with private companies hired to operate prisons, schools and more.

      

Another answer is that privatization is a way of getting rid of public employees, who do have a habit of unionizing and tend to lean Democratic in any case.

      

But the main answer, surely, is to follow the money. Never mind what privatization does or doesn’t do to state budgets; think instead of what it does for both the campaign coffers and the personal finances of politicians and their friends. As more and more government functions get privatized, states become pay-to-play paradises, in which both political contributions and contracts for friends and relatives become a quid pro quo for getting government business. Are the corporations capturing the politicians, or the politicians capturing the corporations? Does it matter?

       

Now, someone will surely point out that nonprivatized government has its own problems of undue influence, that prison guards and teachers’ unions also have political clout, and this clout sometimes distorts public policy. Fair enough. But such influence tends to be relatively transparent. Everyone knows about those arguably excessive public pensions; it took an investigation by The Times over several months to bring the account of New Jersey’s halfway-house-hell to light.

       

The point, then, is that you shouldn’t imagine that what The Times discovered about prison privatization in New Jersey is an isolated instance of bad behavior. It is, instead, almost surely a glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation.

Corporate run nursing homes deliver lower quality care than not-for-profit providers

More evidence of the danger of allowing for- profit corporations to provide human and caring services to vulnerable people.

A major US study  to be published in the Journal Health Services Research has found that for-profit nursing homes deliver significantly lower quality of care than not-for- profit and government run nursing homes.

In the US the 10 largest for-profit corporate providers of hursing homes  operate about 2,000 nursing homes, controlling approximately 13 percent of the country’s nursing home beds.

The study found that the main reason that the quality of care is worse in corporate and for-profit run  nursing homes is that corporate and for- profit providers employ fewer staff  to keep costs down and profits up. In studying staffing and quality in the 10 largest corporate for profit providers of nursing homes the researchers found that the corporate providers  have a strategy of keeping labor costs low to increase profits, with the result that the quality of care suffers and there is a higher number of rated deficiencies.

The researchers found that low nurse staffing levels are the strongest predictor of poor nursing home quality.

The study found that between 2003 and 2008, both the percent of registered nurses and the numbers of all nursing staff were significantly less (30 percent) in the corporate for profit providers than the non-profit homes.  The lower staffing correlated with a considerably higher number of rated deficiencies - the private chains having 36 percent more deficiencies, and 41 percent more serious deficiencies than the non-profits.  Deficiencies include failure to prevent pressure sores, resident weight loss, falls, infections, resident mistreatment, poor sanitary conditions, and other problems that could seriously harm residents.

What is also troubling is that the study found that the quality of care worsened in nursing homes taken over by private equity companies. Nursing homes had more deficiencies after being acquired by a private equity company.This is directly relevant to Australia where private equity companies are increasingly involved in aged care and nursing home provision. The study is the first to make the connection between worse care following acquisition by private equity companies.

"In recent decades, nursing home chains have undergone a considerable expansion.A number of chains were publicly-traded companies until the early 2000s, when five of the country’s largest chains went bankrupt. Following restructuring and ownership changes, as well as increases in Medicare payments, the largest chains became more financially stable. More recently, some of the largest publicly held chains were purchased by private equity investment firms, which invest funds received from investors, with whom they share profits and losses. 

The researchers compared staffing levels and facility deficiencies at the for-profit chains to those at homes run by five other ownership groups to measure quality of care. The 10 largest chains were selected because they are influential in the nursing home industry and are the most successful in terms of growth and market share. 

The study found that for-profit homes strive to keep their costs down by reducing staffing, particularly RN staffing.

The 10 largest for-profit chains in 2008 were HCR Manor Care, Golden Living, Life Care Centers of America, Kindred Healthcare, Genesis HealthCare Corporation, Sun Health Care Group, Inc., SavaSeniorCare LLC, Extendicare Health Services, Inc., National Health Care Corporation, and Skilled HealthCare, LLC.

From 2003 to 2008, these chains had fewer nurse “staffing hours” than non-profit and government nursing homes when controlling for other factors. Together, these companies had the sickest residents, but their total nursing hours were 30 percent lower than non-profit and government nursing homes. Moreover, the top chains were well below the national average for RN and total nurse staffing, and below the minimum nurse staffing recommended by experts.

 The study also found that the four largest for-profit nursing home chains purchased by private equity companies between 2003 and 2008 had more deficiencies after being acquired. The study is the first to make the connection between worse care following acquisition by private equity companies.

There is now a growing body of evidence that demonstrates conclusively that for-profit corporate run nursing homes deliver lower quality care than not-for profit nursing homes.

A study in the British Medical Journal  compared quality-of-care measurements in 82 individual studies that collected data from 1965 to 2003 involving tens of thousands of nursing homes, mostly in the United States. It found that

The authors' meta-analysis, i.e. their integration and statistical analysis of the data from the multiple studies, shows that nonprofit facilities delivered higher quality care than for-profit facilities for two of the four most frequently reported quality measures: (1) more or higher quality staffing and (2) less prevalence of pressure ulcers, sometimes called bedsores.

The results also suggest better performance of nonprofit homes in two other quality measures: less frequent use of physical restraints and fewer noted deficiencies (quality violations) in governmental regulatory assessments.

"The reason patients' quality of care is inferior in for-profit nursing homes is that administrators must spend 10 percent to 15 percent of revenues satisfying shareholders and paying taxes..... For-profit providers cut corners to ensure shareholders achieve their expected return on investment."

Business can learn more from not- for- profits than not- for- profits can learn from business

I have long been a critic of those who argue that not-for-profit and civil society organisations should become "more businesslike" and operate more like business and remodel themselves along business and market lines. It is in my view a ludicrous and dangerous claim.

The claim reflects a naive understanding of not-for-profit  organizations and is predicated on a false assumption that not for profits are run by well intentioned amateurs who need a dose of "business thinking" to be more effective and effective. My view has always been that the reverse is in fact true.

Business and corporations would in fact benefit more from the values, principles and practices of many not-for profit and civil society organizations.

So I was interested in this piece by Debra Allcock Tyler ( Director of the UK Based Directory for Social Change) which appeared in the UK Third Sector News.

Charities are good at what they do, and business should learn from us

By Debra Allcock Taylor

Nick Hurd's recent assertion that charities should learn from businesses is the wrong way round, says our columnist.

I like and respect Nick Hurd, the Minister for Civil Society. I really do. But I find myself in the grip of an overwhelming desire to bash him over the head with a copy of the Charities Act 2006 after his recent remarks in this magazine. He said: "The sector has to open its mind to absorbing skills from the private sector because it clearly needs more business skills."

Have people forgotten the recent financial crises already? Maybe I wasn't paying attention, but I don't think it was expenditure on grants for charity bodies that brought the world's financial markets to its knees, was it? Was the banks' decision to extend credit to a sub-prime market a good business decision, or just greed? Was it good business to have the hedge funds underpinning so much of the financial economy?


It is estimated that, at the height of the financial crisis, about 95 firms in the UK were going bankrupt every day, some 20 per cent more than during the 1990s recession.

With the coalition government opening up the public services to competition and private providers to a much greater extent than any of its predecessors, one can't help but wonder if business models really are the most appropriate mechanism.

This culture of commoditising social needs - characterising our needy citizens as consumers of a public sector product - is, I think, dangerous. Vulnerable people aren't consumers. They're vulnerable people. And we are really skilled at helping them.

So why do people who don't run charities keep telling us how to do it? What precisely are these business skills that we apparently need? The ability to deliver excellent services to vulnerable people on tuppence ha'penny? The ability to convince people to give of their time and money for no other reason than it's the right thing to do?

There are probably some badly run charities, of course, but in my experience they are the exception rather than the rule.

So I have to ask, what is this constant exhortation to ape the private sector really all about? Is this just a euphemism for becoming inappropriately competitive; focusing on revenue rather than cause and becoming bigger, because that's what drives companies?

Forgive the sexism, but it's a bit of a macho paradigm, isn't it? It's the size that counts? Well, I don't think it's about how big you are or how much cash you flash. It's about being good at what you do.
Bulldog Rescue & Rehoming survives on less than £25k a year and does what it says on the tin: a wonderful job with an army of volunteers who simply care about what they do. It doesn't need to become Bulldog and Budgerigar Rescue & Rehoming.

Be open to new ideas and ways of working. But charities - I beg you, ignore those calls to be more like businesses. You're absolutely great at what you do when you remember you're charities. Frankly, I think business has more to learn from you.

NGO's: the trojan horse for market, corporate and state power?

 David Harvey in his book A Short History of Neoliberalism:

The rise of advocacy groups and NGOs has...accompanied the neoliberal turn and increased spectacularly since 1980 or so. The NGOs have in many instances stepped into the vacuum in social provision left by the withdrawal of the state from such activities. This amounts to privatization by NGO. In some instances, this has helped accelerate further state withdrawal from social provision. NGOs thereby function as "Trojan horses for neoliberal globalization."

 Mike Davis in The Planet of Slums:

Third World NGOs have proven brilliant at co-opting local leadership as well as hegemonizing the social space traditionally occupied by the Left. Even if there are some celebrated exceptions--such as the militant NGOs so instrumental in creating the World Social Forums--the broad impact of the NGO/"civil society revolution"...has been to bureaucratize and deradicalize urban social movements.

Honoring those who work for a better world

French film Director Bertrand Tavernier's  film It All Starts Today  is a beautiful testament to the commitment and humanity of teachers (and other front line workers) who work with families and children suffering the consequences of neo-liberal market  and economic "reform". 

Like Pierre Bourdieu's  book The Weight of the World: Social Suffering in Contemporary Society  Tavernier's film documents the new forms of social suffering that characterize not just French society, but the economies and societies of the western world.

Tavernier's deeply moving film tells the story of a kindergarten teacher in an impoverished region of France struggling to educate children of families devastated by unemployment, grinding poverty, deprivation, depression and economic hardship. These are children whose families are the casualties of neo-liberal market reform and economic and corporate restructuring.

The film shows the heroics and dedication of teachers, education aides, volunteers, health workers and social welfare workers who give themselves fully and devote their lives to improving the well being of the children and families in their care. They do this despite poor pay and appalling conditions, budget cutbacks and hostility, indifference and neglect from elected officials, politicians, some government agencies and workers, business groups and those who hold power.

 In Australia we accord little respect and honor to those front line workers and volunteers who work for a better world. We forget and ignore the teachers, child care workers, teachers aides, carers, aged care and disability workers, social welfare workers, aboriginal health workers, volunteers, family support workers, refuge workers, domestic violence counselors and millions of  other front line welfare and community workers who dedicate themselves to the care and well being of others, and who through their efforts make our society and communities better places.


Instead they are poorly paid and usually berated and stigmatized, labeled as do-gooders and bleeding hearts, or dismissed as rent seeking, vested interests who breed dependency and a welfare mentality in people.

No, in Australia we honor soldiers who fight in imperial wars, celebrities caught in the glare of their own importance, sportsmen who are paid exorbitantly and businessmen and corporations who pursue and accumulate wealth and power at the expense of the common good.

Jim Johnson has taken up a similar theme in a recent post on his excellent blog Notes on Politics, Theory and Biography and I thank him for his insights:

"I find it obsequious and cloying to hear the radio show hosts and politicians offering a "Thank you for your service" whenever they encounter a veteran or military personnel. What about the social workers and parole officers and teachers and, yes, scientists and artists, who work in underpaid professions for years and decades in order to contribute to a better world? After all, they could be out there peddling sub-prime mortgages (or some other form of snake oil) and making real money. When was the last time you heard someone - anyone - publicly thank those folks for their service? No, instead we are taking aim at them (the teachers and parole officers are, after all members of those dastardly public sector unions) in the misguided quest for fiscal responsibility"

Why we should be skeptical about "social enterprise"

The concept of social enterprise has found its way into the centre of debates about the future of the not- for-profit sector in Australia and is viewed as a policy panacea for the sector.

Here in West Australia, the Barnett Government's Economic Audit Committee, which has been accepted and endorsed by large segments of the WA not-for-profit sector, has a vision to make all not-for-profits into social enterprises.

A UK study by the Third Sector Research Centre shows why we should be deeply skeptical of claims about social enterprise. The UK study found that social enterprise approaches are poorly defined, and they exclude black and ethnic minority groups as well as small not for profits that serve disadvantaged groups and communities.

A view from within the WA human services sector: Critique by an experienced manager

"The dominant story is of a corporatised, economics-driven sector, where leaders are promoted on their ability to run businesses that happen to be charities"

Lucy Morris

Just been reading Lucy Morris's excellent article The Economics of Charity: Who Cares  in the Australian journal Third Sector Review.  Lucy is an academic at the Notre Dame University in Fremantle and an experienced CEO in the human services sector in Western Australia. Her critique is even more important because it is made by an experienced and long serving manager in the human services industry in this state.

Lucy's piece is an important and scathing critique of the dominant pro market (neoliberal) policy agenda that has dominated public policy making for the human services and not- for- profit sector in Australia over the last two decades.

Market driven policies have fundamentally transformed the human services sector and contributed to many of the problems that the sector now faces. For example, Lucy Morris shows how the application of market led, neoliberal policies combined with the gendered nature of the human services workforce and the sector's religious, social and ethical underpinnings have created oppressive employment practices. 

Furthermore, she argues that these market led approaches have transformed and repackaged service users into "consumers" and created hierarchies of need which disadvantage the vulnerable and the most needy. The consequence is often care that is illusory and discriminatory. Morris sees that these market led approaches have distanced managers from service recipients who have become dehumanized, scapegoated and objectified.

Morris writes that increasingly not- for- profits are economically pressured to seek clients that bring in money and don't require intensive support. Governments seek to drive down the price of services to the most vulnerable and needy (the uneconomic clients). So agencies are continually under pressure to get large client numbers and to chase more contracts.  The difference between the business/corporate sector and the not-for-profit sector has become less clear.

Her argument is that these market led and corporatised approaches have largely benefited governments, the funding body or business, rather than improved the quality of care and the lives of service recipients.

Morris is no less critical of managers in the human services sector:

"Charitable corporate governance discussions are focused on strategic planning, financial projections, bottom line decisions, returns on investments and tax breaks. Large charities employ corporate minded CEO's and staff, whose salaries soak up surpluses that used to sustain non-profitable client services. These costs are accepted because CEO's promise to update, professionalise and make the charity more accountable, as it is portrayed as needing economic and governance makeovers. These assumptions seem unquestioned"

In my view Morris is spot on. Hers is an important and accurate critique. I share her concerns and have argued for many  years that the market- led and business approaches imposed on and adopted by the human services and not- for profit sector are a major cause of the fundamental crises that affect many parts of the industry.

What is particularly troubling is that so many in the sector hope that the implementation of the recommendations of the Barnett Government's Economic Audit Committee Report will be the solution. But it is shaped by and reflects the same discredited market led and corporate/business  ideology.The EAC report has just cleverly repacked that ideology into a more acceptable and attractive package- that of social enterprise, enterprising not- for- profits and citizen driven services.

How useful is "Clicktivism" or online activism?

image courtsey of Stone/Getty, The Guardian UK

Just been reading this important and provocative article from the UK Guardian which critiques the growing trend towards online citizen activism, what it calls clicktivism. 

I have considerable sympathy with the thrust of the article, particularly its critique of the ideology of "market"models of activism and of the need to challenge corporate power (which is purpose of the Nemesis Project which I coordinate).

"A battle is raging for the soul of activism. It is a struggle between digital activists, who have adopted the logic of the marketplace, and those organisers who vehemently oppose the marketisation of social change. At stake is the possibility of an emancipatory revolution in our lifetimes................................

The trouble is that this model of activism uncritically embraces the ideology of marketing. It accepts that the tactics of advertising and market research used to sell toilet paper can also build social movements. This manifests itself in an inordinate faith in the power of metrics to quantify success. Thus, everything digital activists do is meticulously monitored and analysed. The obsession with tracking clicks turns digital activism into clicktivism...........................

Against the progressive technocracy of clicktivism, a new breed of activists will arise. In place of measurements and focus groups will be a return to the very thing that marketers most fear: the passionate, ideological and total critique of consumer society. Resuscitating the emancipatory project the left was once known for, these activists will attack the deadening commercialisation of life. And, uniting a global population against the megacorporations who unduly influence our democracies, they will jettison the consumerist ideology of marketing that has for too long constrained the possibility of social revolution. "

Welfare for the wealthy and aspirational classes: The revolution of the rich

Jane Caro has written an important article The deserving rich v the undeserving poor in which she contrasts the punitive and paternalistic treatment of welfare recipients with the generous public subsidies gifted to beneficiaries of "middle class welfare", particularly private schools.

The rivers of money flowing to private schools at the expense of public schools exemplifies the political reality that public funding to the middle and wealthy classes is generally non-conditional and ever expanding.

Caro points out that more than half of Australia's private schools receive more public funding than they are entitled to, thanks to deals done between the powerful private school lobby and successive Federal Governments.

Caro writes:

"Unlike the recipients of real welfare, who are policed within an inch of their lives, there is little accountability for the millions handed out to these schools. Justified as supporting parental choice, there is actually no mechanism attached to these subsidies to make sure they have any effect of fees parents pay at all...... If we are serious about not wasting public money, we must simply put a stop to it at the top end of the income scale as well as at the bottom"

Michael Edwards: the danger of business approaches in the not-for-profit and civil society sector

"No lasting change has been successful without large numbers of people acting consciously and collectively around human values of solidarity and social justice, not market values. Markets are great ways to do some things, but not to fashion communities of caring and compassion"
Michael Edwards Small Change: Why Business Won't Save the World.

It has become tiresome to hear the cliche that not-for-profit and civil society organisations should become "more businesslike", that they should operate more like business and be remodeled along business and market lines. Frankly, it is a ludicrous and dangerous claim.

Most times it reflects a naive understanding of not-for-profit and civil society organizations and is predicated on the false assumption that such organizations are run by well intentioned amateurs who need a dose of "business thinking" to be more effective and effective. My view has always been that the reverse is in fact true. Business and corporations would in fact benefit more from the values, principles and practices of many not-for profit and civil society organizations.

In his new book Small Change: Why Business Won't Save the World Michael Edwards questions the wisdom of applying business and corporate thinking in the world of NGOs and civil society. Michael Edwards's book should be required reading for any one working in the not-for-profit and civil society sector(s). Edwards, who has spent over three decades in the not-for-profit and civil society sectors in the USA, UK, Europe and internationally, has published widely on the sector. His book Civil Society is acknowledged as one of the seminal works on the role of civil society and citizen action in democracy and public life.

Small Change is a wise and radical book that challenges many of the taken for granted assumptions that dominate thinking and practice in the world of not-for-profits and civil society. Edwards argues that business and market thinking has too much influence over not-for-profit organisations and civil society groups.

Edwards rejects the role of markets, business and business thinking as solutions for the social ills of society and the challenges facing the not-for-profit and civil society sector. He contends that civil society and NGO groups must turn away from the lures of the market and business and reassert the importance of independent citizen action. He is deeply skeptical about importing business approaches into the nonprofit sector.

Edwards argues that while market approaches can improve access to goods and services, confronting inequality and injustice head-on requires advocacy and system change.

In this book and an earlier monograph and articles Edwards critiques what he called philanthrocapitalism- the belief that markets and business can create lasting social change and that philanthropy from wealthy individuals and corporate sources that is guided by the values and metrics of the corporate world is a force for positive and just social transformation.

In Australia we see a growing body of powerful and influential philanthrocapitalists who claim to be putting their money to work to achieve socially transformative goals. As Edwards points out what is missing from their work is any genuine systemic change that addresses social injustices and inequities in fundamentally significant ways.

Here are just some of the lessons to take from Edwards masterly work

• Philanthrocapitalism concentrates power in the hands of a few major players, mirroring the very inequities not-for-profits and civil society organizations should be trying to ameliorate. With a vested interest in the status quo it shies away from fundamental change. At most all it can promise is valuable but limited advances: small change.
• Markets and business cannot be fundamentally reformed to serve social purposes in the way that their proponents claim
• What seems inefficient using market and business criteria is essential for the social and political impact of not-for-profits and civil society
• Most business metrics and business practices are at odds with the social goals and social transformation that not-for-profits and civil society organizations aspire to.
• Achieving social transformation and change requires cooperation not competition, collective action rather than just individual effort and support for long term systemic solutions rather than immediate results. Business and business models promise only limited advances in addressing society's inequities and injustices.
• Business and business values are ill equipped and unable to address the core issues of concern to many not-for-profits and civil society groups.
• The adoption and use of business models and market thinking can and does corrupt the core mission, purpose and values of NGOs and civil society.

Challenging market approaches in social policy: WA perspectives

Over on one of the other blogs I edit- Challenging the Market- there are two new pieces by West Australians who write on contemporary social and political issues.

Susie Byers piece shows that a publicly run woman's prison can deliver successful outcomes in terms of rehabilitation and integration of prisoners into the community. Sarah Burnside critiques the market logic and contradictions involved in Opposition Leader Tony Abbot's plans to reform the Disability support pension.

Challenging the Market is an initiative of the WA Social Justice Network (of which I am the co-convenor) to publicize the writings of Western Australian citizens and activists who support economic, environmental, racial and social justice.

The blog provides a space for people concerned about the extension of market, corporate and business values into so many spheres of daily life with the resulting debasement of democracy, public policy, civic life and political debate. The extension of market, corporate and business values into so many spheres of daily life is detrimental to the wellbeing and social fabric of WA.

We aim to challenge the dominant market and corporate worldview. Relying on the market to solve social and environmental problems it has created is shortsighted and dangerous.

Economic Audit Commitee Report and the WA NGO sector

The Barnett Government has just released the final report of its Economic Audit Committee which was established soon after the Liberal National Government came to power. The Report "Putting the Public First: Partnering with the Community and Business to Deliver Outcomes" is available here and a summary here.

This will be a significant document for the not for profit, non-government sector in Western Australia and it will be interesting to see the sector's response over coming months. The Report proposes a radical process of privatization and outsourcing of public services to the private and not for profit sector, and the introduction of market and business practices to the delivery of public and human services. The Report has a vision to make NGO's more business like and run as social enterprises.

On the surface this will be attractive to many NGO's, particularly the larger corporate NGO's, who have long argued that they should provide more services on behalf of government, and see plenty of opportunities in the new landscape.

But there is much to be concerned about in this Report and it should be a cause for great concern, particularly among the medium sized and smaller community based NGO's who make up the bulk of human service providers in WA. A longer analysis of the Report will appear on this blog in 2010.