Revisiting Henderson launched by Dennis Glover
Poverty, social security and basic income.
On Thursday 4 April, Dennis Glover launched Revisiting Henderson a collection of essays edited by Peter Saunders that brings together leading social security researchers and policy analysts to reflect on past trends, the key changes that the system must adapt to and what this will involve. These are Dennis’s words:
The Henderson Poverty Line.
To those of you who are at least as old as me, those four words will conjure up memories. Maybe of Melbourne in the late sixties or early seventies. Fitzroy before it was gentrified, or when beer not Ice was the problem. Or of the dying days of the Whitlam administration.
For me it conjures memories of the very late seventies and the very early 1980s.
You might remember those strange days. Not old, not new. A time when it felt like something was passing—but we didn’t know just what.
I associate that time with the fading sweetness of pop music. The harmonies of Hall and Oates. The last days of disco. The arrival of the discordance of punk.
It struck me thinking about those times that you didn’t get male harmonies after about 1981. There was no ‘Eighties equivalent of The Carpenters.
I guess it shouldn’t surprise us. After all, how can you have harmony in an age of discord? Punk was more appropriate.
The soundtrack of the past is important. It tells us something.
Around that time something big was changing. Personally for me it was the end of adolescence and the coming of adulthood.
In 1981 I studied HSC economics. I fished my old textbook out of the loft yesterday and it all came flooding back. I remembered how I was rubbish at supply and demand curves. Anything involving maths just didn’t work for me.
But I enjoyed our two elective units: Australian Poverty and Soviet Economic Planning. We actually took the Soviet economy at face value back then. Hard to believe now. Something to do with believing statisticians over Solzhenitsyn. So it goes.
For the first elective our set text was the Henderson Poverty Inquiry. For the second it was writings of Karl Marx.
I know what you’re probably thinking. Ah! He’s from Doveton. He would have known all about poverty. Marx would have opened his eyes, helped him make the connections.
I actually did become a Marxist revolutionary for a while. I’d won a cricket scholarship to a posh private school and seethed every morning when the Head Boy was dropped off by his dad’s chauffeured Mercedes. His dad was a merchant banker and now so is he. So it goes.
Actually the facts about poverty in Henderson’s report were mostly news to me. Back then Doveton wasn’t poor. People don’t believe me when I say this. Poor places were always poor, they say. There’s nothing you can do. It’s an iron law of nature. But you’re going to have to take my word for it. Doveton was an affluent workers’ town.
But it was changing. A sensitive boy like me could feel those changes—after all, I was a Marxist revolutionary.
The big strikes had ended. The factories were starting to lay people off. There were more family breakdowns and unkempt lawns on our Housing Commission estate. The lead singer in the Doveton High School musical died of substance abuse. Small tremors picked up by the seismometer of being seventeen. Looking back now we know that a magnitude 8.9 earthquake soon followed. Doveton has never recovered.
Henderson’s line helps us plot what happened. I’m willing to bet that in the decade after I studied his report, the line for the income of the bottom socio-economic deciles in Doveton would have started falling away dramatically from the poverty line of 56.5 per cent of average earnings. So bravo to Ronald Henderson. He told us what was going on. But looking at graphs alone can’t tell us everything. This is where Marx came in. And I know it’s dangerous to say in the wrong company, but maybe where he still comes in.
We used to think of Marx’s theories as some sort of eternal truth about the inexorable movement of history. A form of big-picture morality tale for atheists. A bible for revolutionaries. But now we see his work differently. Marx was trying to make sense of a major economic and social transition that was happening before his eyes in the 1840s onwards. The transition from pre-industrial to industrial society.
His economics and his voluminous statistics don’t stand up nowadays—just as ours’ won’t a century and a half hence. What remains is the conceptual ambition, the historical sweep, the rhetoric. Marxism we can see now was a story of social change couched in political poetry. The philosophers have only interpreted the world, in various ways; the point is to change it.
The hand mill gives you society with the feudal lord; the steam mill society with the industrial capitalist.
Storyline. Rhetoric. Poetry.
For me in 1981, Ronald Henderson provided the data. Karl Marx provided the story and the poetry. Henderson’s snapshot explained what was happening in freeze-frame. Marx explained the movement in video.
I’m guessing that at this point you’re wondering where all this is heading and what it’s got to do with this book we’re launching.
Poverty. Marx. Hall and Oates. Punk music. The last days of disco.
Bear with me.
My point concerns the use and abuse of the social sciences. Namely the problems with statistics and the importance of storytelling. I’ll come back to that shortly.
When the Brotherhood rang and asked me to speak, they said, ‘look, we don’t expect you read the entire book… It’s sort-of long.’ Actually, I ended up reading a lot of it. I have a couple of general observations to begin with.
Firstly, tt’s a great tribute to its editor Peter Saunders and all its contributors.
I especially salute Will Henderson, Ronald’s son, for his heartfelt tribute to his father which captures the books spirit and purpose.
Secondly, related to this, there’s so much in this book that someone like me—a speechwriter who writes for the Labor Party—needs to know. And—should 50+ Newspolls not be wrong—one who might soon be in a position to make good use of it. I’ve got a feeling this book won’t be far from my desk in the coming year or so.
From John Quiggin we get the big-picture story of the post-war years. An utterly compelling account of our times. It’s in some ways the Australian leg of the big story told by Thomas Piketty: a 30-year surge for the working class, reversed just as Hall and Oates fell out of fashion, disco was ending and the punk scene was beginning.
If a graph can tell a story, the one on page 321 says it all. Wages as a share on GDP peaking dramatically in the mid-1970s, then falling away steadily and plunging after the coming of Thatcher and Reagan.
The end of the industrial revolution. The start of the de-industrial revolution. The end of social democracy. The start of neo-liberalism. The end of harmony. The start of a generation-long disruption. What happened to Detroit and to Doveton. A Louis Theroux documentary put to numbers.
Quiggin is right: When unions are weak, and policy favours employers over workers, rapid technological change results in the loss of jobs and wages and working conditions.
Or to mis-quote and mash-up Marx and Keynes: In a social democracy the computer gives you the 15-hour working week. In a neo-liberal society it gives you the gig economy and the zero-hours contract.
I have this fantasy that the day after the next election, Bill Shorten or Chris Bowen is going to phone up John Quiggin and ask him to be head of the Treasury. So it goes.
From Terry Carney we get the fascinating but disturbing story of how the generosity of spirit of the mid-twentieth century, displayed by people like Ronald Henderson, evaporated to be turned into a tool of moralising austerity. “Fascinating but disturbing…” He’s right.
From Sue Regan and David Stanton we get the true context and history of the Henderson Report and the fact that while Henderson was far from alone in reviewing poverty in Australia, his poverty review was the most comprehensive and maybe the best.
Peter Saunders’ Introduction captures wonderfully this feeling of just how much our society and the way we view poverty has changed since the 1970s. He says: What is striking about Henderson’s approach is its refreshing, open-minded but optimistic tone. Some might look back and see this as naïve, set in a time-warp that has long passed.
But maybe the most important revelation from this book is something that I may have overlooked when I was studying it in 1981—the fascinating fact that Ronald Henderson proposed a form of Basic Income.
We look back on the past with an arrogant superiority. They weren’t as smart as us back then. They were narrow-minded and lacked our vision. We think that to our parents and grandparents the idea of Basic Income would have been science fiction. The sort of social policy people might enjoy on the planet Tralfamadore.
Well actually, they thought it was possible. Not easy… but possible.
In revisiting the Basic Income idea, the essayists in Revisiting Henderson tend to stress the ‘not easy’ part. This is understandable. The standard responses are, maybe depressingly, compelling: The politics is just too hard. Taxes would have to be raised too high. People will never accept the idea that they should pay higher pay taxes while others don’t work.
Rather than aim for Utopia, they say, why not aim instead for things we maybe CAN achieve—like rationalizing the existing benefits system, taxing capital a bit more, lifting the Newstart Allowance—something, actually I happen to agree with.
The fact that Newstart hasn’t increased in real terms for a quarter of a century whilst the economy has been destroying the unskilled jobs the unemployed once relied on is one of the biggest injustices and moral scandals of our age.
One of the interesting revelations in this book is Troy Henderson’s observation that historically the opposition to a Basic Income has often come from the labour movement—even in Switzerland and Finland. You will encounter this in Australia too. Many unionists see the Basic Income as a plot by Mark Zuckerberg to keep the unemployed at home glued to their screens while he absorbs the economy and abolishes their jobs. They get methamphetamines to keep their happy, he gets to own half the world.
You’ve got to admit, a Basic Income does seem a hard ask. The conventional, practical wisdom from right and left is soundly against it. But the conventional, practical wisdom has given us three million people living in poverty.
The welfare state doesn’t have all the answers. As Bea Cantillon observes in her essay, welfare states are now less good than they once were at reducing income poverty for people of working age.
Which prompts the question: without a big new idea are welfare states reformable? Or at least reformable enough to give us a truly just society? Can we really put our faith in granular change, toying with an Effective Marginal Tax Rate here and a new allowance there? Maybe. I don’t really know. We fight on and don’t let the perfect become the enemy of the good. So it goes.
What I do know is that every decent idea… that tries to create a better life for the people at the bottom of society… always starts out being ridiculed for being impossible because it’s against the prevailing wisdom.
Back at the start of the Industrial Revolution, when all this began, the conventional wisdom of the Ricardians and the Malthusians held that the wages of working people were permanently doomed to remain at the level of subsistence. Raise wages and the workers will multiply and the price for their labour will go down. Every dollar spent on wages is a dollar less for capital, leading to closed factories. So it goes. Sad, they said, but that’s just the way it is. An iron law. There’s nothing we can do. Within the self-imposed logic they inhabited, they were right.
Things only changed when people refused to accept the logic of this iron law and the dismal, rather hopeless moral outlook it offered. They could see with their own eyes that governed by such logic the new inventions of the industrial revolution had led to slavery and misery. As Marx put it—to people being treated like horses not human beings.
Breaking free from the conventional wisdom by regulating wages, introducing welfare, educating the children of the poor, providing public health services and legalising unions was the only way things were going to change. They rejected the prevailing economic iron laws and made a moral choice. And maybe that’s what books like this have to tell us.
As John Quiggin remarks in his essay: In the long term, we CAN aspire to a society productive enough and tolerant enough to provide people with an unconditional basic income. Pursuing that long-term goal is a moral choice, not an economic one. It requires us to assail conventional economic theory and subvert the scepticism of those who hold that we have to organise our society according to inexorable iron laws.
With the new digital machines and new economic logic of the de-industrial revolution turning us into slaves and horses and failing to eliminate poverty, maybe we need a new idea that is commensurable with the size of the challenge. Maybe it’s time to give Basic Income another serious look.
Moral vision, big ideas—these are the starting points.
The fact that a book like this is prepared to start that conversation by reprising Ronald Henderson’s startling, big, 1974 idea for a Guaranteed Minimum Income, is maybe the start of something. A long journey. But the start.
Let me end with this observation. A book of this sort, which celebrates a statistic, could have gone another way.
It could have been nothing more than an attempt to re-do Henderson’s maths for the data-driven age we live in. Draw a new graph with a new line, using a Mac Air instead of a Commodore 360.
Had the book done that it would have done little more than lead us into a barren desert of data. A maze made up of gently whirring, coolly efficient data servers, offering no more than tweaks to the machine of the welfare state that has become so huge and complex that at times it seems beyond our easy comprehension and out of our control.
How do we make the knowledge and the data we have about a subject like poverty work for us—and do what Ronald Henderson and everyone else in this book wants it to do? Not just interpret poverty but abolish or at least reduce it.
Sometimes the answers come from unexpected places. I was watching television a couple of weeks ago when I saw the physicist Brian Cox talking about the data astronomers collect. Science, he said, creates the data that astronomy turns into dreams. That’s what we have to do. Not turn data about poverty into new and better representations of data. But turn it into the dream of a better society.
That’s what the Henderson Poverty Line I had to read in 1981 was about. A snapshot of a society starting to get harsher. One frame in a moving picture that tells a story. Maths as poetry. The dream of a man with something he wanted to achieve. And an idea of what it might look like with a Guaranteed Minimum Income.
Ronald Henderson’s factual snapshot of a society gone wrong needs a story to set it right and music to make it come to life.
So it goes.