Political Economy and Social Work Policy Analysis

If anyone is interested.  Here is a paper I am planning on submitting to Critical and Radical Social Work this summer.  It's on classical liberal political economy and how its useful to macro social work policy analysts.  It's called Planning, privilege, and paternalism: Political economy as a frame for social work policy analysis.

Abstract

                The goal of this paper is to summarize for social workers the insights of the classical liberal school of political economy and sketch a working model of how to apply these ideas in policy practice.  Though philosophically and methodologically distinct from the progressive and Marxian traditions of critical policy analysis, political economy is a structural theory of government that illuminates the exploitation of marginalized groups by government.  Each section will explicate the work of a school of political economy and present fundamental questions social workers should ask when critically evaluating specific policy proposals as well as the role of government more broadly.  Beginning with questions of privilege within the democratic system, the article will examine how oppressed and minority groups are structurally impeded from shaping the policies that affect their lives.  Subsequently, the use of policy to achieve specific ends in social justice is critiqued for its tendency towards paternalism and the marginalization of individual knowledge in favor of the preferences of policymakers and public administrators. After examining this policy analysis framework in detail, conclusions will be drawn about how political economy impacts social justice and the state. 

Introduction

What is political economy?

                Political economy is the application of economic logic to political decision-making.  Using the work of political economists provides a different view of government action than is found in traditional social work texts.  Probably the most famous and influential political economy text for social work scholars is Paul Starr’s classic The Social Transformation of American Medicine (1982) which chronicles the rise of the American Medical Association and American Hospital Association by establishing their economic and social power through the political process.  Starr’s account examines how these interest groups capture government privilege by crafting favorable legislation, undermining unfavorable regulation or change, and improving their financial situation through governmental lobbying.  Although this text is limited to the medical field, the underlying method of political economy is transferrable to understanding government behavior generally and how the structure of government may deleteriously impact social justice policy proposals.  The democratic process is dominated by entrenched interests, who draft policies that benefit themselves over the target population of a given policy, a process termed government privilege.  Moreover, the policymaking process lends itself to top-down paternalism, silencing the voices of the target population and removing the incentives for individualization and responsiveness in service delivery. 

                Examining government is necessarily an ideological endeavor.  Political economy arises from the ideological tradition of classical liberalism.  Based on political affiliations, most social workers are likely to identify with the modern liberal, progressive, social democratic, and Marxian ideologies (Rome & Hoechstetter, 2010; Mullaly, 2008).  Common to each of these approaches is a belief in the importance of collective decision-making through participatory democracy, an entitlement state administered via a central authority, and the central planning of the market economy through regulation, tripartite bargaining, or collective ownership—as seen in Table 1. 

Table 1.

Ideology	Market Orientation	Economic Justice	Governance
Modern Liberal	Regulated Market	Neoliberal Entitlement State	Participatory Decision-Making
Social Democracy	Tripartite Bargaining	Thick Entitlement State	Participatory Decision-Making
Marxism	Planned Economy	Thick Entitlement State	Participatory Decision-Making
CLASSICAL LIBERALISM	Free market	Minimum Income and Voucher Programs	Decentralized, limited

Adapted from Mullaly, 2008

Political economy represents a thoroughgoing critique of democratic governance, entitlement states, and central planning by asking two questions: Does this system continue to help the target population when people act in their own self-interest?  And can a public administrator or policymaker have enough knowledge to create programs that are responsive to individual needs and preferences?  Answering both questions in the negative, political economy forms the social scientific basis for the classical liberal or libertarian skepticism of government, politicians, and bureaucracy.  Though it is unlikely many scholars impassioned by the social justice movement will find fellow-feeling with classical liberal scholars, their works provide an incisive critique of public policy.  Instead of focusing on the opportunities for altruistic action by well-intentioned bureaucrats or policymakers, political economy examines the “business” of social policy—or how it is experienced and enacted by individuals in the everyday.   Examining the business of social policy entails looking at the incentives and rules within the bureaucratic and governmental structure to determine whether these policies are likely to contribute to social justice or perpetuate social injustice. 

Limitations and strengths of political economy

Vincent Ostrom (1989) puts it best when he likens the choice of paradigm to the economic concept of opportunity cost.  The cost of choosing the tools of political economy over other ideologies, political science theories, or frames of reference in policy analysis is the positive aspects of alternative theories we forgo.  For instance, other theoretical approaches are not burdened with the neoclassical assumptions of rationality, self-interest, and individualism.  They also provide a greater understanding of altruistic action on the part of political actors, instead of focusing on their self-interest.  For example, a notable policy analysis text to macro social workers is Kingdon’s Agendas, Alternatives, and Public Policies (2010).  Kingdon presents a more nuanced view of political action than does political economy.  His three streams of problem, policy, and politics are populated with largely well-intentioned actors who implement policy ideas formulated in communities of specialists in accordance with the national mood or public will.  His account allows for a greater degree of input from media, policy experts, and budget constraints.  Political economy argues, in stark contrast to Kingdon, that the national mood does not exist, policies are largely crafted by interest groups, and the feedback mechanisms in government and bureaucracy are insufficient to coordinate knowledge from the target population to policymakers or administrators.  Other policy analysis tools are more congruent with political economy, as the positive and negative conclusions of political economy policy analysis are valuable inputs into the framework of cost-benefit calculation as well as Strengths, Weaknesses, Opportunities, and Threats classification.  Indeed, one of the strengths of political economy is to elucidate different aspects of costs or benefits that are overlooked in the less methodologically individualistic approaches of Kingdon and other policy analysis scholars. 

In addition to its strengths and limitations in explaining policymaking, there are significant limitations to using political economy as a guide to understanding the role of the state in achieving social justice.  Political economy is largely silent about the ability of marginalized groups to participate in the market process, which they view as a superior though imperfect alternative to government action.  Indeed, political economy does not attend to the oppression outside of governments and is silent on how non-governmental privilege shapes the social world.  Political economists discount the importance of outcomes for groups of people in favor of determining whether the process by which outcomes arise is fair, just, or equitable (Stone, 2002).  Finally, political economy works better as a critical frame, rather than as a basis for concrete policy proposals (Boettke & Martin, 2011).  In spite of these limitations of political economy, it has significant explanatory value for understanding aspects of social policy overlooked by other political science theories; moreover, its conclusions significantly impact our understanding of how social justice and social policy intersect. 

Part One: Government Privilege

What are the incentives for political actors?

                This is the fundamental question of the Public Choice school of economics, and it is a question ripe with nuance.  Public choice focuses on the actions of individuals within the government (i.e. methodological individualism).  It argues that when we speak of “the government” or “the Department of Health and Human Services” writing a certain policy or conducting an audit, for instance, we are speaking metaphorically.  Only individuals can act, and understanding the environment in which they act is key to understanding what behaviors or trends emerge (Ostrom, 1989).  Political actors are modeled similarly to how individuals act in an economic context, based on self-interest and rationality.  Buchanan (1997) terms this behavioral symmetry.  Importantly, these are not seen as the sum-total of all humanity’s motivation, but derive from the goal of building rules, organizations, and institutions that constrain individuals from acting selfishly and against the public interest (Boettke & Leeson, 2004).  Public choice also does not discount the altruistic motivations of political actors, but examines the incentives faced by both altruistic and opportunistic actors. 

                Modeling the actions of policymakers based on self-interest illuminates the structures behind many of the political phenomena we encounter daily.  In stark contrast to the view of politicians as serving the public interest reluctantly accepting power for a short time, most politicians are career-oriented political entrepreneurs who seek to raise funds for reelection, increase their reputation and power, and enhance their financial interests.  Policymakers will often trade votes on bills or kludge together unrelated bills to better serve the parochial interests in their district (Tullock, Seldon & Grady, 2002).  Similarly, the actions of bureau chiefs and bureaucratic actors more generally are to increase their salary, office perks, public reputation, power, patronage, output of bureau, ease of making changes, ease of management, discretionary budget, and the scope of their department (Niskanen, 1994).  Voters, in the public choice model, are rationally ignorant about public policy and have very little power to affect any change through the ballot box (Congleton, 2001; Tullock, Seldon & Grady, 2002). 

                Beginning with this theoretical frame, we can start to understand how public choice’s differential views on what the political process looks like in practice provides an incisive critique of the status quo.  From a political economic perspective, it may be dangerous to entrust social justice to a policymaking and bureaucratic process wherein the individual has little power to affect policy change and the rational self-interest of political actors is runs counter to the interest of the public good. 

What is government privilege?

                More important that understanding the interests of voters, public administrators, and politicians is investigating the incentives within the political process for interest groups.  Interest groups include private businesses or business coalitions, non-profit advocacy groups, voter coalitions, and government bureaus.  Their motivation is to seek profit from the political process by carving out favorable regulation or deregulation, monopoly or cartel status, and direct financial assistance from the government.  These favorable policies constitute government privilege, or political and economic power that puts the interests of small groups over the public good. 

Public choice economists talk about government privilege in economic terms.  The costs of providing privileges to favored interest groups are spread across the entire population.  Each individual is unlikely to notice the small increases in the money cost of physician, nurse, or social work services that result from licensure laws or title protection laws.  However, the benefits of increased prices—achieved through reducing competition and raising barriers to access for those entering the health professions—are concentrated among existing health professionals.  This concept, known as concentrated benefits and dispersed costs, underlies a good proportion of all legislation passed by government, according to political economy.  The structural critique of government rests upon the power of interest groups to influence politicians through fundraising and lobbying, and the competition by interest groups for government resources.  Within this policy analysis frame, the public interest and the welfare of the least advantaged are dominated and excluded by the competition for resources by well-positioned interest groups. 

How does this structure affect oppressed groups?

                Part of the answer lies in the rational choice mechanics of the formation of an interest group.  Interest groups exist when participants can easily restrict benefits of privilege from those who do not contribute financially or those who are not directly related to the interest group.  The most powerful groups exist based on common traits—such as occupation, race, or age—that are held in high esteem by the general public, whose symbolic capital gives them power in the political arena (Bourdieu, 1989).  Paul Starr’s (1982) text, for example illuminates how physicians use their positive public reputation to extract favorable legislation from politicians.  In addition this symbolic capital, groups with high economic, social, and human capital are best able to capture political privilege, as they have greater power within the social space (Bourdieu, 1989). 

The structure of policymaking ultimately benefits those who are already comparatively well-off, leaving little room for individuals and groups who do not meet these criteria.  Recipients of federal welfare programs, for example, are a large, heterogeneous group without many shared identifiers.  They generally possess lower levels of capital and are held in comparatively lower esteem by society.  These structural hurdles prevent the interests of public assistance recipients from being adequately heard within the political process.  While non-profit groups and government bureaus often advocate for greater funding for support programs, these interest groups also have self-interested motivations, making them imperfect agents for advocating the interests of those in need.  Additionally, as we will see in the following section on paternalism, government bureaus and non-profits also lack the knowledge to effectively lobby for the manifold, unique interests of the individual. 

What does a Public Choice analysis of public policy look like?

                After acquainting ourselves with the general theory, the first thing to investigate is what interest groups are relevant to a given policy and who they represent.  For example, if we were examining the Affordable Care Act (ACA), we would look at the American Medical Association, American Hospital Association, large health insurance companies, Pharmaceutical Research and Manufacturers of America, and American Association of Retired Persons—among a great many others.  Each interest group is seeking government privilege in order to enrich their members at the expense of the general public.  The next step involves finding aspects of regulation, deregulation, monopoly or cartel status, tariffs, quotas, price floors or ceilings, or mandates that positively impact these groups.  A policy analyst may examine how the ACA maintained monopoly health licensure for existing professional organizations, protected drug manufacturers from overseas competition while maintaining the patent monopoly, and did nothing to examine certificate of need laws that empower existing hospitals to veto any new competitor entering the market.  A shrewd political economist may also take note of the organizations whose self-interest aligns with those adversely affected by a policy and attempt to form a counter-coalition

Part Two: Paternalism

How is knowledge created and coordinated within a policy structure?

                Austrian economics, in contrast to the public choice school, is agnostic as to the motivations of individuals acting within the policy arena.  Whereas the public choice school is vulnerable to criticisms of oversimplification or neoliberalism, Austrian political analysis follows from epistemologically different assumptions (Burczak, 2006).  The theoretical works of F. A. Hayek formulate policy critiques based on epistemological conclusions about what knowledge exists in the social world.  Shunning what he termed the “scientism” of the progressives, social democrats, and socialists of his time, Hayek (1964) constructed a model of economic action where rationality is merely a social construction, knowledge is imperfect, dispersed, and highly subjective, and the most robust structures in society are formed through human action, not human design.  In his long-standing battle with Oskar Lange and other socialist theorists, Hayek and his teacher Mises argue that central planning cannot efficiently allocate resources because of the lack of a price system, a potent communication tool (Hayek, 1945; Mises, 1981).  Moreover, without the incentives created by profit and loss, there is little motivation to create new information by innovating and individualizing services.  Although the Austrians address their arguments to the socialists of their time, their work is applicable to modern policies that use central planning in social policy.  Most importantly, Austrian political economy questions a policy on the degree to which individual choice and agency are respected.   

How paternalistic is this policy?

                Questions of paternalism and knowledge are inextricably linked, as the definition of paternalism implies that any actions done by the dominant power are in the best interests of the subordinate (Mead, 1997).  Austrian economics states plainly that the person who is most knowledgeable about a given situation is the person most affected by it, the individual actor (Hayek, 1945).  Additionally, Austrian-informed policy analysis drives us to ask questions of power and powerlessness, vital aspects of a social justice-informed policy critique.  However, it is not due to social justice that Austrians criticize paternalism, but because replacing the values of individuals from a target population with the judgments of planners suppresses the best informed knowledge about a phenomenon and prevents it from being coordinated across individuals. 

Addressing a complex social issue for diverse populations involves an overwhelming amount of knowledge—knowledge that is particular to time and place, that is tacit or difficult to linguistically articulate, and that is dispersed widely among individuals (Burczak, 2006).   Policymakers substitute their own preferences for those of the target population, excluding the knowledge within a target group.  Policy analysts using a political economic framework should ask themselves who determines what is important in this policy.  If policymakers or public administrators are dictating to a target population what is important or what they should value, it is not merely an affront to social justice.  It is a lack of understanding of how knowledge about how to solve social problems emerges within the social world.  Instead of pursuing technical solutions that try to achieve a given outcome, Austrians prefer the construction of a general framework under which individuals can serve each other’s needs, such as voucher, minimum income, and consumer-directed health programs. 

What role does the market play in providing services?

                 Austrian economics is often considered to be “free-market economics” due to the ideological affiliations of its theorists.  Most political economists in this tradition are libertarians, conservatives, or anarchists.  However, the conclusions of Austrian economics regarding the role of the market and the role of the government come not from ideology but from analytical claims about knowledge in the social world (Horowitz, 2012).  One of the reasons Austrians favor market allocation of resources over political allocation is that market incentivizes the creation of new services and innovations in service delivery (DeCanio, 2013).  Austrian analysts are likely to look more favorably on policies that utilize voucher systems or consumer-directed health and social service plans because they use the market to allocate resources (Goodman, 2012).  While governments are necessary to provide public goods that are underprovided in a totally free market, the price system of the market and system of profit and loss are superior methods of allocation.  Most importantly, markets do not require the inordinate amount of knowledge that a centrally planned social policy does (Burczak, 2006).  Distributed, individual, and tacit knowledge are coordinated in the price system to bring about services that are responsive to individual needs. 

Does the policy allow for choice and competition?

                To some extent, policy environments always compete with one another.  Some public choice scholars even model this competition between localities as creating efficiency through the free movement of citizens to environments that suit their preferences (Ostrom, Tiebout & Warren, 1961).  However, the choice and competition present in a marketplace provides more options to individuals without the high search costs of finding a better residence (DeCanio, 2013).  Individuals within a marketplace may also choose from many different providers of services, making the system more responsive to individual need and heterogeneous preferences.  The diversity of a marketplace is its core strength, and through creating voucher programs, public and private competition, and consumer-directed service plans, government can best utilize the knowledge of the target population.  When government acts without these knowledge-creating systems, resource misallocations divest scarce social welfare funding away from the services that target populations truly need.   Moreover, the greater the restrictions placed on consumers and producers within a marketplace, the less agency provided to individuals.

What does an Austrian policy analysis look like?

                One of the best examples of a policy proposal that is responsive to the issues of paternalism raised in Austrian analyses is the self-directed services movement.  Self-direction is composed of three parts: a personalized assessment of needs, resources, and supports, employer authority over the workers who consumers rely on for their daily needs, and budget authority over spending in their own lives (Scala & Nerney, 2000; Moseley, 2005).  Programs that include self-directed supports for Medicaid recipients are operational in almost every state and the majority of states adhere to the general model of services (Walker, Hewitt, Bogenschutz & Hall-Linde, 2009).  For individuals in this program, their lives are dramatically less shaped by what government policy dictates and more on what they consider important.  The model empowers individuals with developmental or intellectual disabilities, the aging, and those diagnosed with a mental health issue to determine the services that are most important to them via an individual budget (Crisp, Doty, Smith & Flanagan, 2009).  Paternalism within this structure is reduced by elevating the authority of the consumer and using their preferences to determine with which services and providers they work.  Should a consumer wish to spend money on vehicular modifications, supported employment, or socialization activities, they have the authority and the financial ability to do so.  Furthermore, because consumers are purchasing these goods on the market, they are allowed to choose services that are most in line with their needs and preferences.  Over time and across consumers, this results in a social support system that incentivizes the creation of services that better serve individual needs.  In this way, self-direction also serves to align the self-interests of service workers with consumers, a key part of public choice political economy. 

                Although there are many things to recommend self-directed supports from a political economy perspective, there are still many strictures that allow for critique.  Service providers to the self-directed services population are still encumbered by licensure laws, labor laws, and wage and price controls which distort price signals and impede competition and choice.  Many of the states base their individual budget calculations based not on what individuals can bargain for on the open market, but on the average cost or prevailing cost in a state for that particular service which substitutes political allocation for that of the market.  Finally, many individuals have diverse needs or preferences and many state programs continue to limit the types of services an individual can purchase using their budget authority.  Taking both the positive and negative together, Austrian economics provides a unique way of understanding social policy. 

Conclusion: Privilege and Paternalism

                Social work is by its nature a progressive tradition, one that values social justice, diversity, and the dignity and worth of individuals and groups.  The use of political economy in policy analysis illuminates issues in social policy that, due to its methodological individualism, fall outside of these traditional social work ideological frames.  Austrian economics draws attention to the creation of knowledge within a system, and underscores the limits of knowledge possessed by paternalistic central planners.  It asks:

·         Does a policy allow for robust feedback from consumers? 

·         Does it provide for individualization and customization in services and goods? 

·         Can individuals with non-normative needs and preferences have their needs met?  

·         Is this policy accountable to consumers or to policymakers and administrators? 

These questions are necessary to understanding not only how to critique a given policy program but for understanding how to craft policies that are robust in the face of limited knowledge.  Policymakers exist in a sea of uncertainty and by treating individuals as complex actors with their own valid understandings of the world, Austrians argue systems will arise that embody the diversity of human understanding and need. 

                In addition to the epistemological issues raise by Austrian political economists, scholars in the public choice tradition raise issues of privilege within the government system.  The domination of the political process by interest groups raises fundamental questions about the ability of government to address problems of social importance.  It asks:

·         What are the barriers to gaining an effective voice in the policymaking and rule-making process for oppressed and marginalized groups? 

·         How is a policy designed to help powerful interest groups at the expense of others?

·         What interest group’s self-interest aligns or conflicts with social justice?

·         How does a given policy incentivize or limit the opportunistic motivations of political actors? 

By answering these questions, we can more accurately assess the power structure within a given policy and see if it accords with the demands of social justice.  Political economy helps to put aside the rhetoric in the political arena and investigate whether a policy will benefit those in need or powerful, established interests. 

                The ultimate goal of political economy in policy analysis is to create adaptive complex systems that empower those governed by the policy.  Deconstructing how policy is used to promote privilege and paternalism is part of that mission.  Through the use of a political economic orientation to social policy, social justice may viewed in a qualitatively different light.  Modern liberalism treats the market as a necessary evil that provides for the prosperity of the few at the expense of the many.  Political economy rehabilitates the market as a vehicle for achieving social justice that provides greater voice to the preferences of those with little political power than traditional bureaucratic administration.  Furthermore, it critiques the ways in which powerful interest groups and other political actors use government privilege pursue their self-interest at the expense of oppressed and marginalized groups who are structurally discriminated against due to their low levels of capital.  Political economy, as a whole, is a structural critique of granting the state more power in the service of social justice.  Although many of the ideological and philosophical commitments of political economy may be anathema to social work policy analysts, it is an important framework with a rich tradition of scholarship that questions the role of the state in achieving social justice.  

The Mixed Legacy of Federalism

As a libertarian, it is generally taken for granted that federalism leads to better outcomes than national solutions.  Criminal justice reform, marijuana legalization, and gay marriage recognition, are all playing the long game of federalism--winning victory after victory for civil liberties and human rights.  As powerful as federal forces can be for marginalized groups in overcoming or obviating systemic barriers to social change on a national scale, when you play in the social justice/social equity space, federalism is a four letter word.  Contrary to most libertarians, I don't see this as (necessarily) a symptom of the knee-jerk centralization tendency of progressive thought.  The poor reputation of federalism among those who care about issues of race and gender is well-earned.  Moreover, the lack of recognition of these problems by libertarians serves to support the perception of libertarians as blind to the historical oppression of minority groups.

It should not come as a surprise to any student of history that federalism can act (though certainly does not always act) as the last bastion of the bigot.  The obvious examples of slavery, Jim Crow, and interracial marriage should provide important examples of how state governments acted to oppress an entire class of already marginalized people.  Not as often mentioned by libertarians are issues such as marital rape, divorce law liberalization, or "man in the house" rules for AFDC, and other state impositions into the lives of women.  Probably the most salient federalist oppressive structure at present is access to abortion, and the conservative movement to probe, control, and manage women's bodies and reproduction.  Libertarians will often be quite vocal in their understanding of the oppressive tendency of state government.  However, they remain largely silent on the utility of using the federal courts to guarantee those rights.

Let's take the example of recognition of gay marriage.  Presently, federal courts in conservative states are overturning prohibitions on gay marriage.  Looking past the particular legal arguments used in these cases, let's examine the philosophical issues at stake.  Libertarian-conservatives like Rand Paul are opposed to federal courts imposing their will on state courts.  They say that the proper role for the federal government is to allow states to experiment with legal regimes and the most robust protections for gay rights will come when they convince the members of each state to allow full participation in society for gay partners.

A libertarian with a more nuanced view of federalism and human rights, informed by an understanding of historical oppression of marginalized groups, should have a different take.  I, for one, support these interventions by federal courts because they provide protection for basic human rights and their recognition in the legal framework of society.  The Fourteenth Amendment was enacted for a reason.  State governments were not providing equal rights to African-Americans and the existing constitutional order was not strong enough to countermand state oppression.  Marriage (gay, straight, plural) is a "privilege or immunity" guaranteed by the Fourteenth Amendment and granted to all people in the United States simply based on their value as human beings.  Basic rights and access to social institutions, particularly those as powerful as marriage, should not be left up to the states.

It may be, as Reason TV's video of CPAC attendees shows, that conservatives are growing to embrace change on social issues on the state level.  But this is merely a bare minimum of toleration.  State governments have a very long tradition of oppressing groups of people and the correction of this systemic oppression by federal courts is necessary and proper.  Basic human rights are best granted by a federal constitution, not state governments.  There is certainly a role for states in liberalizing laws and raising awareness about civil rights issues, think of the assisted suicide or right-to-die legislation.  But human rights are best granted by a federal court system beholden to the constitution, not state governments.

This is not to deny, as many social equity scholars do, that federalism has some benefits.  In addition to highlighting social justice or human rights issues, state experimentation in social policy has brought innumerable benefits to oppressed groups.  In my area of interest, Medicaid experimentation has brought far better, more individualized, and responsive care to people experiencing poverty--a disproportionate number of whom are of minority status.  Same thing with education reform, charter schools, and vouchers.  Federalism in policy has enormous benefits and some important drawbacks.  As the Bloomington school of public choice will tell you, there is a justification for every level of government.  It is the interlacing of those systems that makes the American experiment so unique.

The Libertarian Social Welfare Paradigm

It's the purpose of this blog to provide a space for me to create and share ideas for a libertarian vision of social justice, political economy, and social services.  The nagging question that has plagued me for years is to find a approach to implementing social justice that is broadly compatible with the larger libertarian/classical liberal project.  As I've done more research on the policy proposals that libertarians cherish, I've come to a tentative definition that I will use moving forward.

Social justice consists of the creation and maintenance of spontaneous orders in the assistance of the least well-off.  

Spontaneous order is the philosophical concept that distinguishes Hayek as the most important philosopher of science in the past decade, in my opinion.  Building upon ideas of social constructionism and subjectivism, Hayek shows how the free market (not our present system) is not a real thing like a desk is a real thing.  It is the unintended consequence of innumerable uncoordinated human actions.  The concept does not just describe the market, though that was the economist's main focus, but all of the social world.  Language, folkways, culture, institutions--all of these can be seen as spontaneous orders.

What distinguishes a spontaneous order?

I use Charles Johnson's definition of spontaneous orders as Consensual, Polycentric, and Emergent.  Public assistance programs that utilize the concept of spontaneous order give the greatest voice to the knowledge held by those in poverty and those providing services to them.  By placing the funding directly in their hands, people in need can choose in which agency they wish to get services or in which low-income housing complex they wish to reside. The current system tells them where they must live, how much to spend on food, housing, schooling, and other services, and provides steep penalties from deviating from these mandates: abject poverty, untreated illness, prison, and early death.  In addition, there is very little competition between providers of service to the poor, and in the case of monetary assistance, no competition whatsoever.  Without the opportunity to exit to a better institution, people in need cannot vote with their wallets to a better service.  Agencies have no incentive to innovate or be responsive to individual need.  Voters have no ability to tell which programs are working and which ones are not.

What does a spontaneous order approach to social justice look like?

When I say "creation and maintenance of spontaneous orders" I mainly mean the coercive creation of markets through the redistribution of wealth.  I'm not a natural rights libertarian.  I don't believe that property rights are utterly unimpeachable, just very important.  And I take to heart the liberal critiques of Austrian (and neoclassical) economics that assumes all people have equal standing to participate in the market.  It's biased.  This is the remedy.

In accordance with Hayek's Good Society and Milton Friedman's Negative Income Tax, a universal minimum income equal to the poverty line should be instituted via constitutional amendment (with a breakeven point of twice the poverty rate).  If you're concerned about cost, providing this amount of money to every person and child would cost less than the 2007 ARRA stimulus package.  And would have done much more for our society than what the stimulus accomplished.  I would argue, though I need more evidence to back this up, that this system provides greater monetary benefits than the average combination of benefits that persons in poverty draw from the government at present--especially since most programs (except SNAP!) do not reach the majority of people who qualify for them.  Moreover, a minimum income allows a person to spend their money as they see fit, rather than relying on the government to tell them where and how to spend their funds.  I argue that a minimum income benefit should replace monetary assistance and in-kind assistance programs.  This includes SNAP (food stamps), TANF, and SSI (disability for the indigent).  The regulatory barriers to enter these programs are unconscionably high, the benefit amounts are piddling, and do not provide much flexibility in how funds are used.  There are good reasons to believe this sort of wealth redistribution is necessary because people would not provide these funds voluntarily (e.g. free rider problem).  There are also good reasons to be skeptical of these claims.  For the purposes of this discussion, we will assume that the government will continue to perform these functions, and thus, should do them in the way that most respects the dignity and worth of the people receiving funds.

Although there are important arguments for why the government should likewise get out of the business of providing medical insurance, education, and disabilities services, we are unlikely to see the end of these programs at any point in our lifetime.  While the government is performing these services, it should at least provide in them in a way that best uses the knowledge and abilities of those in need and those providing services to provide better, more individualized services that evolve over time.  Surprisingly, most innovations in these areas have actually used this model, though without citing Hayek, as we'll see below.  The goal of each program is to provide the money directly to consumers of that service.  They, in turn, purchase goods and services they value.  In doing so, they do what spontaneous orders do best--empower individuals to make choices meaningful to them and create systems that utilize and respond to local knowledge.  In doing so, they upend the present approach to public services--a revolution for those in need.


How has this approach to social justice being used right now?

Education reform is an odd coalition of libertarians and local activists who seek to put more power in the hands of parents, teachers, and principals and away from school boards, legislators, and bureaucracy.  Through the provision of school vouchers, competition and choice create better schools and more satisfied parents.  Backpack funding (where the money metaphorically follows the student in her backpack) dislodges the funding mechanism away from bureaucracies that favor the rich and well-connected over the poor and marginalized.  This education market is a spontaneous order--one characterized by individual actors using their own subjective preferences to make choices constrained by rules that are universal and well-announced.  The choices made within these orders create more satisfied parents and better systems for their children.

Perhaps most jarring to me was that Medicaid reform was being led in the same direction.  The research I am working on this semester is looking at the consumer-directed model of services.  In its pure form, this conception of medical assistance to the indigent and the disabled provides funds directly to the consumer.  She can then use these funds on things that are important them--personal assistance from family or a paid helper, renovations to their home for physical limitations, counseling, or social interaction.  Though I have done less research on them, the state implementation of Health Savings Accounts paired with catastrophic coverage plans also builds on the ideas of consumer direction.  Though less prevalent than the consumer-directed plans mentioned previously, pilot projects in a number of states have shown superior results to traditional Medicaid.  Unfortunately, these consumers are still acting within an health economic environment that systematically suppresses (and inflates) the price of services while preventing health providers from repackaging and innovating in service provision.

Most important to my subject area and personal interests, spontaneous order needs to be the organizing concept of redistribution to the poor.  In the present model, individuals experiencing poverty must wade through a morass of public assistance programs that are time-limited, do not meet basic needs, remain plagued with devastating communication problems, and subject to severely perverse incentives.  A basic minimum income provides what the present system cannot--a responsive system based on individual needs.

It is utterly uncontroversial to me to assert that the present welfare system exists for the powerful to exert social control over the lives of the poor.  All EBT purchases are tracked in every state.  TANF's legal mandate is to encourage marriage and two-parent families and reduces mothers to poverty if they choose to take care of their children rather than work for minimum wage.  Housing vouchers, in attempting to weed out the truly "deserving poor," discriminate against anyone who in the 10+ years it takes to get assistance actually find just a temporary residence.  SSI's work disincentives forces anyone who wishes to maintain their income into the shadow economy or to subsist on their checks.  SNAP won't even let you buy toilet paper.  A provides funds that can liberate individuals from oppressive institutions like the welfare bureaucracy, the idiotic and capricious whims of the legislature, but also discriminatory employers, abusive partners, and a damaging environment.

Does this mean we should create as many of these as possible?

I haven't really identified a limiting principle on where I think this should stop.  I would argue that there are cases in which government action to create a spontaneous order would be prudent and effective.  Education may be one case.  Disabilities another.  Health care.  Basic income.  Finding a limiting principle is less important to me at the moment than my primary task--creating a model for public policy that empowers individuals, and through an evolutionary process aided by the market, creates better and more responsive public services.

What about the "support network?"

This is a question I got in one of my classes this year.  I suppose it is a holdover from the Randian days of libertarianism in which "I have no obligation to help you, therefore you get no help."  There is a significant role for the voluntary sector of non-profits and charities in the system I've created.  They have the knowledge to fill in gaps that large programs such as those advocated here, just cannot see and cannot be responsive to. A program to provide job training, sex education, or youth engagement would provide a more natural home inside a basic income system--one that actually provides for the basic needs of human beings.  We would be surprised how much  more successful socialization or public health programs are when people can actually feed, clothe, and house themselves.  Even public services within cities or counties may fill in gaps.  Local governments can better gauge the needs of their citizens and have more stringent controls than a federal government that can print money at will.  Competition between and within these municipalities again trends towards the features of a marketplace.

How do these align with Social Work values, theories, and models?

This probably isn't as important to most of the people reading this as it is to me.  My project for the past...5 years has been to link my political beliefs and my profession.  It's been a heartening journey, one where I've found new stones to stand on each week.  Here are my takes on social workers and other helping professions should adopt this approach to social justice.

1) It best approximates the ethics and values of the profession.  If you take seriously the mandate that people have a right to dignity, respect, and self-determination, you cannot in good conscience support the present lot of welfare programs--except that to replace them with nothing would be worse.  There is no reason why the barriers for eligible people to gain benefits should be so high.  Or that the benefits should pay so little.  Or that they should exclude millions of people in need.  Or that people should have so little control over their money and services.  You cannot take the decision-making power away from the individuals receiving and providing services and putting it in the hands of bureaucrats far removed from the problem without severely violating the ethics and values of the profession and the mandate of social justice itself.  That this is not a bigger issue in our profession is embarrassing and outrageous.

2) Social workers who help the poor toil in a planned economy.  I hate to use the word socialist perjoratively (especially since I like some brands of socialism), but that's what it is.  A client comes into my office in need.  I can hook her up with only the federal programs I mentioned.  There may be some state or local programs too, depending on where we are.  But that's it!  I can help her apply and wait for Medicaid (in some states).  I can try and get her SSI if she has a disability (but that takes a long time and she will most likely be denied).  I can get her on TANF (but that requires her to work and pays less than half of the federal poverty level in income for only five years).  That's my job.  Helping her interface with the interminable, unknowable bureaucratic mess.  All the while, I can provide her empathetic psychological support and link her up with other service providers--who in turn are subject to the same system of Medicaid and state funding as me.

What would it look like if my clients actually had the money they needed to survive?  How would services be different if the poor could shop for agencies, counselors, and providers?  What if they could leave relationships they deemed to be oppressive or not responsive?  What if people didn't have to worry that if they peeved off the wrong person, their benefits would be cut off?  What if they had control?

For me, I would love to put myself on the market for social services, as social workers who serve people with greater income do to a certain extent.  Competition leads to better outcomes.  And it leads to better reimbursement for providers who provide exemplary service.

What about the problems with markets?

Doesn't this model require a belief in markets that is not based in empirical fact and notions of justice?  The textbook model of economics is completely unrelated to how the real world actually works.  Everything is imperfect.  Solutions are temporary, cobbled together, and may not make things better (particularly for all people) in the short run.  This is the vision of the market that I share!  This is the vision of the market that libertarians share!  Market imperfection or market failure occurs.  They can be systematically biased against the asset poor.  Knowledge is not equally available to all.  I find it difficult to imagine a reality where the opposite would could be true.

What the public choice school argues is that these failures need to be compared with the failures of government action.  Examining the incentives within a bureaucratic system, there is utterly poor representation for those receiving any of these services and none for those providing them either.  Decisions that make up over 90% of what happens within the helping relationship are made far away from people who never touch the real work being done.  Those actors face incentives to hide the bad stuff, tout the good stuff, always argue for a bigger budget with more control, and never truly solve the problem you were setting out to fix.  The incentives punish the altruist and reward the knave.  And as a street-level bureaucrat, it leaves burned out just from dealing with the system--not from your clients.

When I compare the two systems, it ultimately comes down to a moral question.  Who should have control over your life--you or the government?

By way of conclusion..

What I have described here is a paradigm shift in social welfare policy.  It is one that is already under way.  The libertarian paradigm is suited to our present time--one with spiraling debt, growing inequality, and increased distrust in government.  What it offers is an alternative to the social control apparatus of the modern welfare state--one that values individual strength, resilience, and ability.  A truly humanist paradigm that allows marginalized and oppressed people greater control and autonomy in their daily lives.  It provides for the basic needs of those in poverty upon which community, neighborhood, and local programs can build a society that reflects the values and efforts of its people.  It is a progressive program.  It is a libertarian program.  And it is our best hope to achieve the ideals of social justice.