Andy Blunden. Eureka Street May 2004

There’s more than one way for communities to gain control over their lives.

The debate and research which has blossomed over the past few years around the notion of “social capital” has focused attention on the non-economic causes of poverty and exclusion. This is a very welcome development, but the discussion has been characterised by a lot of confusion about how to interpret the data and by significant divergence about appropriate remedies.

There is more to well-being than having a fat bank account, and there is more to poverty and exclusion than having no bank account. The point I want to make is this: if we were to ask ourselves what is it that people living in poverty and isolation really need, then it is self-determination, that is to say, the capacity both individually and with others to determine their own future and gain control over their lives. Money is just one route to achieving this goal and just one of the contributing factors which may allow people to realise their autonomy. This applies to neighbourhoods just as much as it applies to individuals and families. In fact, self-determination is something that individuals can achieve only in and through their relationships with other people – and surely this is exactly the idea that is picked up in the notion of “social capital"?

However, the very fruitful discussion that has grown up around “social capital” is hampered by the fact that the relation between economics and human life is being turned upside down by some people. Instead of approaching the problem of poverty by broadening the focus beyond economics, and subjecting economic theory and policy to practical criticism from this broader perspective, the scope of economics is being broadened by casting human life as a form of capital, as “resources” which can be converted into cash.

Such a danger can be seen in the interpretation being given to the “social capital” idea by Mark Latham, as outlined in his latest book, From the Suburbs. Let us take it as given that in order to climb out of poverty and gain control over their lives, communities need to build social solidarity and get organised. Still, there are many different ways to proceed, some ways will suit some people and some communities better than others, and most likely people will be able to build relations of trust with other people through a variety of routes.

Mark Latham however is posing one solution to the problem of “building social capital” to the exclusion of all others, and what is more, a solution whose capacity to overcome the anomie and injustice of modern society is problematic. On the other hand, Tony Vinson, whose report on Community adversity and resilience was reviewed in Eureka Street April 2004, reflects I think a contrasting view.

Tony Vinson’s report opens with progress reports on a number of projects in which Jesuit Social Services have participated. Each project begins with efforts to find out the concerns of as broad a range of residents as possible, and then a public forum is called, the aim of which is to encourage some people to step forward to take responsibility and gain a mandate from the wider community. This group then takes responsibility for drafting up an action plan, making further consultation with the community and implementing decisions. The outsiders then take on the role of supporting and resourcing the efforts of the community itself. The outcomes reported are many and varied, including new small businesses, new voluntary projects and new initiatives for local management of public sector service delivery.

This is a widely supported approach, one which recognises the need for a community to “own” the project and emphasises self-help and self-determination.

Mark Latham however, passes a rather harsh judgment on this kind of project:

“In the past, governments have provided a huge amount of money to community development projects, but with little success. These programs have followed a familiar pattern of failure: the formation of local co-ordinating committees; the involvement of residents enthusiastic about a new approach; some capital works and physical changes; scepticism and resistance from central government agencies; a gradual loss of effort and enthusiasm at a local level; demands for further government funding; and, ultimately, the collapse of the program.” [p. 96]

Despite the fact that he himself concurs with Tony Vinson’s observation that “some authorities have no sooner embarked upon a renewal plan than they are devising an ‘exit plan’,” Mark Latham places the blame not with government (which, if he is elected, will be his responsibility!), but on the idea of directly promoting community cohesion. He goes straight from the above comment to contrast this approach to “social entrepreneurship:”

“Social entrepreneurs turn this process around. They operate on increasing returns on investment, ... Social venture capital would aim to back this kind of success. It would allow social entrepreneurs to move poor communities back into the real economy.”

Mark Latham proposes to move government funds out of community development into start-up capital for “social entrepreneurs,” through “Social Venture Capital Funds,” bodies reminiscent of the Cain Government’s ill-fated Victorian Economic Development Corporation.

This idea is part of a larger vision of social policy characterised as “asset-based” welfare. “Asset-based” welfare is premised on the assertion that we live in a period of “mass capitalism” in which a claimed 60% of the population are “already capitalists,” and aims to lift people out of poverty by making everyone a “capitalist.”

That is to say, Mark Latham is focusing exclusively on capital accumulation as the sole route to self-determination, a “ladder” which people climb alone.

Mark Latham’s featured case study is the work of Brian Murnane of the Brotherhood of St. Laurence in the Western Sydney suburb of Claymore. I do not share Latham’s wish to counterpose the approach used in Tony’s Vinson’s case studies to that used by Murnane; I believe that Mark Latham counterposes them solely in order to make his own point.

Latham quotes Murnane as summing up his approach with the words: “every time someone said let’s do something, we backed them,” a sentiment which expresses the same orientation to supporting self-determination.

Thus there is an essential common thread between Murnane and Vinson, namely the need to support and reinforce local initiative, and I don’t believe either would want to be seen as prejudiced as to whether people organise themselves along private-sector models in the form of a company, along “third sector” models in the form of voluntary associations, or in the form of a “micro-public sector.” The point is that people need to get organised, building trusting connections with other people in pursuit of common aims, and there are many different ways of doing that.

However, whereas Vinson and Murnane appear to have a very broad approach which is willing to encompass whatever is appropriate and favoured by members of a community, Mark Latham is promoting a single road out of poverty, that of becoming a capitalist and accumulating wealth in the form of capital, and he is willing to withdraw funds from other projects in order to promote this perspective.

However, surely the whole point of “social capital” studies is that poverty is not just an economic question, that well-being and wealth can be neither defined nor achieved by the accumulation of capital alone. In a certain sense, a company is a vehicle of collective self-determination just like any other association in modern society – people establish lasting relations of trust and collaboration in order to make a living together. Accumulation of capital and employment of wage labour are really incidental functions of a company, which may just as well employ voluntary labour and dedicate itself to the public good.

Latham, however, is tying the approach to combating poverty to achieving self-determination by making a profit. Making a profit is what he calls “the real economy.” Charities and government alike are, according to Latham, not qualified to act within the “real economy.” In fact, communities which get organised and place demands on government are deemed to have a “culture of dependency,” and even government itself appears as a form of “dependency,” properly subordinated to the needs of business. But I believe that, for example, people forming themselves into a political lobby group to force the government to upgrade medical services, is just as effective a way of building social solidarity and helping people move towards controlling their own lives, as is setting up a company.

In part, the myopia currently affecting the debate on this area of public policy results from the concept of “social capital” as the lens through which the non-economic causes of poverty are being viewed. By casting human life as a form of capital (rather than capital as a form of human life), as “resources” or “assets” to be used for self-advancement, the concept claims, confusingly, to subsume political and moral problems under economic science.

I believe the best way to move towards greater clarity is to recognise self-determination as the basic need of all people, both individually and collectively, and consequently to see poverty as one factor hindering people from attain self-determination and wealth as just one of the objectives people may seek through self-determination.

The factors picked up by “social capital” data – networks, norms of reciprocity, trust, etc. – are self-evidently relevant to the problem of self-determination. If we conceive of the problem as one of self-determination, then we can see why capital investment, philanthropy and state welfare services all fail in their own way to help the situation. And we can understand what Brian Murnane means when he said says “every time someone said let’s do something, we backed them,” and why the Jesuit Social Services workers were so concerned that the community “owns” a project. If we ask ourselves: what builds social cohesion? then the answer is social solidarity, that is, lending unconditional support to worthy projects defined by people themselves (including strangers), rather than subordinating them to one’s own program.

While it may be true that channelling government funds intended for relief of poverty through tax-incentives to corporations “can save the public sector vast amounts of money” [Latham, p. 99], this kind of privatisation of welfare will contribute little to extending solidarity to those who are struggling to drag themselves out of poverty. In reality it is just substituting one form of subordination for another.

In relation to state delivery of welfare, given that the very raison d'Ítre of a bureaucracy is control, it is easy to see why they are reluctant to aid in the self-determination of communities.

Change can only be effected through the efforts of those working within all these bodies – charities, government agencies, corporations, and so on – to extend solidarity, and support the self-determination of poor and excluded communities, even if that means at times swimming against the stream.

Instead of threatening to withdraw funds from community development, Mark Latham should be tackling the problem of why authorities want to pull the rug out from under such projects as soon as communities begin to find their own voice.

April 2004