Why society has withered: The consequences of policy failure

Details

It's time.
Time to make aged care accountable.
Accountable to who?
To citizens and their communities

A society that does not know its history and engage with it, is a society with Alzheimer’s disease. Without a memory, it cannot function effectively.

This page explains what has happened to Civil Society, Governments and Markets over the last 30 years. It explains why giving communities and citizens some control over the aged care market, was so challenging for the Royal Commissioners, that they avoided even talking about it. Forty years ago inquiries into aged care were advising it and they were told about that. What has happened?

Background information

Aged care as a wider societal problem

Aged Care Crisis and some of its members have been studying what has been going on for a long time. We have argued that aged care is only one of many systems that have been failing. If we are going to fix aged care we are going to have to fix a big problem in modern society at the same time.

If we look around us in the USA, the UK and in Australia we can see many market failures. It is the sectors where citizens lack knowledge or power that have failed so badly. Wherever there was any vulnerability it was exploited. There have been many scandals. It was usually the customer or recipient of services who were ripped off. Sometimes vulnerable employees were harmed. Aged care has failed in other countries too and is simply another example.

With so much going on there must be something wrong in our society. We can think about it as a disease like Alzheimer’s where we don’t remember what has happened, don’t see all the other things that are happening, just focus on the issues at hand and don’t put it all into context, think sensibly and then try to fix it.

These abuses have occurred within markets and particularly community services that have been turned into markets. These markets have made many rich by exploiting those who were vulnerable and whom they had a duty to serve with integrity.

It started in Australia in the 1980 and 1990s with the massive Alan Bond, Chistopher Skase, One Tel and HIH corporate frauds and financial collapses. In 2015/16, one of us wrote about some US and many more Australian failures where citizens had been exploited and harmed in the pursuit of profits. Another analysis described how this occurred when human services were privatised in Australia. Something has happened and it is not only aged care that is a problem.

If we look back, we see that in the 1970s and 1980s some major changes occurred in the way businessmen, politicians and then society itself started thinking about their relationships with one another. 

When these are closely examined it soon becomes clear that what we are seeing is exactly what we should have expected - and what was likely to happen to aged care. Aged Care is clearly one part of a wider problem that needs attention. Many warned but by then no one was listening.

Civil society, Government and Markets

To understand what happened we need to understand the relationships between civil society, government and markets.

Civil society is used to describe our caring and responsible citizens and communities. Its where we rear our children, learn to value others and to ‘love thy neighbour as thyself’. We talk about community values, selflessness, empathy. Its where we form close relationships, debate and make decisions. The sense of togetherness and friendship creates a sense of wellbeing that has been called ‘Social Capital’ to contrast it with the impersonal wellbeing that comes with wealth.

It is movements within civil society that have fought for democracy in the UK, the French Revolution, the American Revolution and against dictatorships of all sorts. We are currently witnessing this in Hong Kong and in Myanmar (Burma).

An effective civil society and democracy are inseparable and effective politicians are a product of a well-functioning civil society.

Citizens in a civil society protect everyone’s rights and individual freedoms. At the same time, responsible citizens criticise and sanction anyone who tries to use that freedom to harm someone else or damage society. 

We expect the politicians we elect to support civil society and pass the laws that we need to help us restrain criminals and protect us from predatory markets.

Markets trade on the more primitive selfish instincts that we all have and that civil society tries to contain. Their success depends on a balance of self-interest. 

Over 300 years ago the father of economics Adam Smith described business interests as “different from, and even opposite to, that of the public”. They were “an order of men ... who have generally an interest to deceive and even oppress the public.”  

Our own David Malouf expressed this in his 1998 Boyer Lectures exploring Australia’s heritage. He spoke about people who had “an eye for the main chance and for the weakness of others, the qualities that go to the making of a successful criminal, may be the same qualities that in other circumstances make a politician or businessman”.

Democratic Governments are elected from their members by civil society and their role is to support civil society and give form and support to the things they believe in and want through regulations, laws and enforcement. Laws reflect what the majority of citizens want and identify with.

Democracy is particularly vulnerable to attractive, but sometimes harmful ideological beliefs where a group of believers successfully persuades a majority of citizens to accept their beliefs and vote for them. Sometimes when they can’t do that, they seize power by force.

Societies are particularly at risk of doing this when things have gone wrong and society is in crisis and has become rudderless. People need something they can believe in and will seize on appealing ideas that are harmful. Mass media has sometimes helped groups of believers sell ideas and the 20th century has had more problems and wars as a result.

Vulnerability

Civil Society has recognised that vulnerable people in some sectors could be readily exploited by the unscrupulous. A different sort of market was needed. They only allowed people who could be trusted to provide services to vulnerable people. The trustworthy were described as “of good standing” or as “fit and proper persons. 

Government supported this by issuing licenses to operate. Those whose past conduct cast any doubt on their trustworthiness were excluded. Those owning businesses or providing health and aged care had to undergo a ‘probity’ assessment before they could operate. These markets were also more closely regulated. Most of the services were provided by church and other non-profit community organisations. 

During the 1960s governments started funding the for-profit market to provide health care for the elderly in the USA and aged care in Australia. Problems were soon apparent and both countries tried to control the situation.

The erosion of society and the ascendancy of markets since the 1980s.

A little under two thousand years ago Christianity, a small religion starting in Palestine became a global religion when Roman emperors were converted. They spread it across the world. Its message of caring for others aligned with that of citizens and society and it endured. 

Much the same happened at the end of the 1970s when two converts to a new belief system about society, government and markets became leaders; Margaret Thatcher in the UK and Ronald Reagan in the USA. They worked closely together and spread it across the world. 

That did not align with the values of citizens and society who have been pushed aside. It has caused great harm to society. While believers desperately try to deny this, many citizens and academics are now criticising strongly. They are trying to find a better way to meet the challenges that face the 21st century.

Origins

This belief system was started by a group of Austrian economists during the turbulent 1930s and 1940s, the years of the Great Depression, the rise of fascism and World War II. Civil society in Europe was in turmoil.

Instead of seeing this as an aberration in the fabric of societies that had given us democracy and protected our rights, these economists saw societal activity as an evil force that would inevitably end up with more Hitler’s and Mussolini’s. It was a threat to individual freedom. What they called ‘the collective’ became the great threat to freedom and to the market – It was equated with communism and socialism which were evil forces.

They saw freedom as being expressed through markets and society as being organised along market lines. It was a one size fits all system that would fix all our problems. Markets they claimed always worked and corrected themselves provided they were not interfered with or restricted in any way. There was a hidden hand that guided them. If a market was failing any restrictions on its activities should be removed so it could fix itself. They called this ‘liberalisation’. 

Regulation by government, the body representing citizens, was condemned. Individuals were seen as essentially knowledgeable, rational, self-interested and so effective customers. There was no provision for ignorance, vulnerability or selflessness.

Almost everything we already knew about markets, about societies and human behaviour was ignored as were the many advances in our understanding of the ways humans and societies behaved during the rest of the 20th century. Belief trumped evidence and logic.

Expansion

Originally a fringe group they formed the Mont Pelerin Society where economists who were supporters gathered and refined their policies. The movement spread as think tanks were established across the world. The ideas were popular among businessmen who smarted under the restrictions and accountability requirements imposed on markets after the great depression. 

Conservative politicians and libertarian movements welcomed these ideas. An author and philosopher, Ayn Rand promoted self-interest as a virtue, condemned selflessness and described altruism (concern for others) as a disease imposed by society, which she called ‘the collective’ and attacked.

We can glimpse the impact of these patterns of thinking in some of the things that happened in the USA and in Australia (eg. aged care) in the 1960s and subsequently. These ideas came to dominate the western world after the election of Thatcher and Reagan. Schools of management adopted the new thinking and management strategies. They spread these patterns of thinking into businesses, government services and society across the world.

The belief system

This belief system has been called neoliberalism, economic rationalism and free-markets. The first is the best term because it extends beyond markets and economics. It is based on a new way of understanding human beings, society, government and markets and the way they interact. When we do something so fundamental all of them change but, because the consequences are not immediate, we do not recognise it.

Vulnerable sectors like health and aged care have not been excluded. Australia became a keen follower of the USA. The words of those who embraced this system in the USA and Australia illustrate the problem

Examples from health and aged care:

Example 1: Joseph Califano and health care
Problems had first developed in the US Health Care System in the 1960s, when large corporations entered the sector. Califano had held a senior position in charge of health care under president Carter before joining industry.

In his 1986 book, ‘America's Health Care Revolution’, Califano attacked “Medicine's high priests, the doctors” . He blamed them for all the problems. In his words he proposed and introduced a “revolution in the American way of health’. He looked to “the genius of American business” to fix the system using an “awakened, competitive world of business purchasers demanding and bargaining for high-quality care”.

For him “The gospel lesson is that hard-negotiating buyers, who treat health care like any other products they purchase, can change the system”. He expressed “an enormous respect for the genius of American business and a competitive private sector”. 

He urged business to take control of doctor’s incomes and their careers. That is exactly what happened. Doctors were trapped and unable to resist what happened to the US health system. Books and web sites have described the massive frauds and terrible consequences for patients in the USA. 

Califano’s book which aligned with the new belief system was avidly read in Australia but his critics and the books describing the consequences were ignored by market and government.

Example 2 Corporate executives and Health care
 A few representative comments from senior US corporate executives in health care reflect the thinking of those who ‘reformed’ health care by making it market led.

Remarks include "free market, competitive forces should be the driver" and "We are not in the health care business. We are in the sick care business."
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"Health care is a business like anything else." and "The day has come when somebody has to do in the hospital business what Macdonald's has done in the fast-food business and what Wal-Mart has done in the retailing business,"
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"Do we have an obligation to provide health care for everybody? Where do we draw the line? Is any fast food restaurant obliged to feed everyone who shows up?"

Example 3: Aged care
 Aged care was seen as part of the health system. The following quotes are from the founder of a very successful US aged care provider, Sun Healthcare. It was welcomed to Australia in 1997. Its founder met politicians and businessmen in 1997. Politicians and some business advisers were soon echoing his words even as aged care in the USA was racked by scandals and his empire in the USA and Australia dissolved.

"The government should butt out. If that happened, market forces would quickly resolve the problems in the industry"
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“The quality of health care suffers because of government support and regulation. The system takes away incentives to improve. The marketplace would close poor operators”.
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There is “tremendous fat in the health care delivery system at a number of levels. We haven’t even begun to cut the fat."

There were many warnings in the USA. Doctors like Professor Relman and social analysts like Robert Kuttner spoke out about what would and then did happen in health care.

Examples from warnings in the USA:

Example 1: Kuttner about the new belief (2001)

"much of the economics profession, after an era of embracing a managed form of capitalism, has also reverted to a new fundamentalism about the virtues of markets. So there is today a stunning imbalance of ideology, conviction, and institutional armor between right and left."

Kuttner about Health care (1996)

"Columbia/HCA (biggest hospital company in the USA) insists that medicine is a business, and increasingly imposes its rules on the competition game."
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"- - - everyone suffers, not for the benefit of the patients but for the benefit of Columbia/HCA".
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"A market culture and a market idiom are becoming pervasive, even among nonprofits" and " - - big nonprofits are now defensively emulating Columbia/HCA and other for profits."

Example 2 Relman

 (1992 What Market Values Are Doing to Medicine )

- - - clearly there are important distinctions to be made between what society has a right to expect of practicing physicians and what it expects of people in business.
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The Reagan and Bush Administrations have staunchly supported competition and free markets in medicine under the delusion that this is a way to limit expenditures.
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In a commercialized system the cost of health care will continue to escalate and yet we will not be assured of getting the kind of care we really need. In such a system we will no longer be able to trust our physicians, because the bond of fiduciary responsibility will have been broken.

 (Relman 2005 lecture in Canada)

“My message to the Kirby Committee and to Commissioner Romanow (Canada Inquiries) was that the U.S. system was in serious trouble in large part because it had been taken over by market forces, and that Canadians would be well-advised not to follow our example.
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- - - the disastrous effects of investor-ownership and business competition on U.S. health care
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- - not-for-profit - - - competes for market share, and otherwise mimics the investor-owned sector.
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- - - - - looked at as a system that should meet the medical needs of all our citizens, it must be judged a disastrous failure.
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For-profit medical care companies are never less expensive and often more expensive.
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When any kind of health care service becomes a business, its owners seek to maximize their revenues, which inevitably drives up total costs
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- - - they take resources from those communities and rarely provide health care of value equal to that which the community could have provided for itself.

Health care In Australia: Doctors were aware of events in the USA and like our politicians, had read Califano’s book. They warned but politicians ignored them. Governments tried to bring in several massive US mega-corporations to subjugate our medical profession in the same way as the USA. 

Citizens who saw what was happening collected data from the USA and supplied it to state probity regulators. They were charged with deciding whether companies were fit and proper to provide health care. Over a 10 year period during the 1990s state probity assessors performed well under pressure from politicians and big business. None of these companies now own hospitals in Australia. One was an aged care company.

When in 1998 government attempted to follow the US in forcing doctors into contracts that limited their control over care, doctors resisted and were vilified and threatened. They won after a bitter conflict with the minister for health.

When Australia’s largest for-profit hospital company started down this path in 2002 doctors took their patients elsewhere and put it out of business.

The lesson for aged care: There is a clear message from all this. United the doctors had the power and legal capacity to challenge government and did so. The big hospital corporations had two customers. The one was vulnerable and powerless. The other had market power and used it to protect the system and their patients by putting those who threatened care out of business. They had a common interest in stopping this even though the patients who were powerless did not realise it.

United communities have the power to challenge government. If they had the same market power in deciding who provided care in their communities and used that effectively, they too could protect the system as well as their elderly members. This is what Aged Care Crisis has been advocating for. This is a model we can follow.

Examples from warnings in Australia:

Example: Those who studied the system

 ‘Remission Impossible’ 1992 Ron Williams:  Williams studied the US Health System in writing his doctoral thesis in the USA shortly before a succession of scandals started. He realised just how dysfunctional the system was. When he returned to Australia he examined the economic situation, the trends and the intention of both major parties to globalise health care. He concluded that unless the whole nation recognised the danger and united to resist it then we would get the US system with all its problems.

He thought it unlikely that the danger would be recognised in time and wrote a short book in an attempt to warn Australia. Typical of the responses was that of the president of the AMA who described his predictions as dystocian. The book had little impact. 

Within a few years the profession and their presidents got the message from other sources and acted. His predictions did not come true for health care but they have for aged care.

These quotes are from his book.

"--- a huge and depressing departure from the system as they (readers) now know it."

"I see little but doom and gloom"

" -----, compassion will give way at an increasing ratio to profit. Care for the patient will give way to care for the corporation --------"

"---- if it (this book) corners overseas corporate forces into putting genuine human compassion behind the deceptively human face that they (megacorps) will present then ------"

"----, whether Australians like it or not, and they certainly will not, the new century will see the Australian Health industry controlled by overseas megacorps, part of an international oligopoly, whose primary concern will be measured in terms of the profits derived from its exploitation of the local population and its indigenous labour force"

There is not much chance that this recognition will come in time, in the next few years. (page 191)

Suppose that some media group does put discussion of Americanisation into the nations living rooms. Or suppose that society itself picks up on the issue. (page 193)

The whole task is vast; it requires that a national plan be developed, ----- (page 199)

The might of the megacorps is formidable; they are practised in the use of politics, and power and wealth, in getting their own way. The only way that this nation can impose its will on any of them is to do so as a nation; ------ (Page 197)

---- will not pay over their capital unless they can run their businesses along the free enterprise lines that they think fit. (page 195)

Examples: Warnings by Australian doctors

Doctor A 1996: “By virtue of a mind-set, intelligent reasoning about risk control seems to have been abandoned - as though economic rationalism was, like mad-cow disease, itself a form of encephalopathy. - - - - - We are entering a phase of life in Australia when ‘business thinking’ will be transfused into every possible vein, compatible or not”
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Doctor B 1996: “Cooperation has been integral to medicine from the time of Hippocrates. - - - - This cooperation originates from beneficence, one of the fundamental ethical principles which underpin medical professionalism - - - This contrasts starkly with the dominant ethic of commerce and industry: - - - Price competition, necessarily based on self-interest, is no companion to beneficence. - - - Is such self-interest compatible with beneficence?”
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“The government should not assume the professions resolute adherence to ethics in the face of economic loss. -- - - Such competition is lethal for standards; it is not in the public interest. It is this message that the medical profession must clearly convey to patients”.
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Doctor C 1996 describing the USA: “This paper shows how the subjugation of alternative frames of interpretation to market perspectives resulted in a severely dysfunctional health system which had disastrous consequences for health care. Hundreds of doctors abandoned their medical traditions as they adopted a purely market mindset, transferred their allegiance to the corporation and cooperated in the systematic exploitation of their patients for profit”.
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“The application of business principles resulted in the systematic exploitation of innocent and trusting people who had come to the company's hospitals for help”.
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“Politicians, businessmen and bureaucrats in Australia and the USA continue to view health services entirely within a marketplace paradigm. Surgery is not exempt.”

The president of the Australian Medical Association (AMA) introduced the new Minister of Health. Dr Michael Wooldridge who had come to explain the government’s new health care competition policy to the AMA on 10 May 1996.

I'd like to make it clear, don't be swept away by the emotive zeal which is characterising the debate about competition policy. Please consider the social consequences at what is happening. Do not forget that this is going to affect people and it is already affecting people. Do not forget that the street is littered with failed economic models. Models, not fact, not theory, not things that live up to the same proof that is required in science, in general. I think we tend to forget that economic models are just that.
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I believe it is a sign of our intellectual and moral bankruptcy as a society that we can only concentrate on growth, on competition and on greed. When are we going to concentrate on the social fabric of our society? Personally, I'd rather pay 10 or 20 cents more for a cake of soap to live in a society where people have the opportunity to work, where governments contributed to an orderly and structured society and where economic theories were regarded as just that - theories.

In 2004 Canada was also under strong pressure from economists and businessmen to marketise and corporatize its health and aged care systems. One of Aged Care Crisis members was invited to give a presentation ‘Australia's Experience with Health Reform: Are there lessons for Canadians?’ to the ‘Consumers' Association of Canada’ in Alberta to which senior members of the Canadian Medical Association were invited. 

In that lecture he examined the perverse forces at work in the health and aged care marketplaces, described how these forces had played out so disastrously in the USA and how Australian doctors and citizens had responded and contained these forces but not yet eliminated them. The comments are equally applicable to aged care

Extracts from an invited lecture to Canadians:

The problems: The real power lies with the large institutionalised investors and with the financial institutions who fund growth. They know nothing of healthcare and have only one responsibility - to make money for their shareholders
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The fact is that the USA has struggled with this problem for 20 years without success. Countries claiming that their processes are different must indicate what they will do differently and they fail to do so.
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The commitment of the people involved to the corporate mission is one of the most startling things observed when the words of health care corporate leaders are examined, and when internal documents are studied. They have no doubts.
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Something has happened to the way in which the market has come to see itself. Somehow we have allowed the marketplace and those who live in that world to set themselves above society.
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"The marketplace myths embraced by these genuinely motivated people allowed them to enthusiastically abuse trust and misuse helpless citizens. At the same time they created a mental filter which rendered the consequences invisible to them."
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The Samaritan tradition which underpins our responsibility for others goes back 2000 years. Capitalist markets in health and aging go back only about 40 years and they have not worn well.

The solutions: "Regardless of how or by whom these services are provided and organised it would be important that the services be fully transparent and that members of the community be involved at every level."
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By greater involvement in humanitarian services, citizens might embrace community values, and give new emphasis to them. This would go a long way to restoring common sense and balance in social discourse.

Aged care in Australia: When Paul Keating wanted to pursue this path in aged care the Gregory 1993 report warned against it. Keating headed the warning but John Howard ignored it. After he defeated Keating in 1996, he worked with industry to redesign the system.

Senator Gibbs made a prophetic speech in parliament in 1997 warning of the consequences of these policies. The Royal Commission has described the consequences but we do not think that it has adequately analysed or addressed the problem in its report. As we explain later this would have been very challenging for them.

Examples from warnings about aged care in Australia:

Example Gregory 1993

The report noted that neither the current standards monitoring system, nor any alternatives considered, would be able to prevent the diversion of funding from nursing and personal care to profit”.

Example Gibbs 1997 predictions

“- -- - managers with no nursing experience. No longer do nursing homes have to employ a qualified director of nursing who will ensure that professional standards are met”.
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“- - - dramatically decreased guarantees of the level of care that residents will receive” in a system where there would “no longer be the checks and balances”.
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“- - - who is going to ensure that the taxpayers' money that the government allocates to these nursing homes is properly spent on nursing care?”.
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“ - - - - the minister is going around claiming that accreditation will take care of everything”.
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“I believe this legislation will start a move which will work to the disadvantage of many of our most vulnerable senior citizens”.

Doctor C 1999 in correspondence with the Minister for Aged Care’s department about the consequences of current policies.

“The assertion that quality can be maintained by informed consumers shopping around in a competitive corporate marketplace where corporate marketing strategies exert a profound effect on community perceptions is a myth. The outward form of a corporate health and aged system is at variance with its substance”.
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“Summary: The essence of what I am saying is that it is illogical to set in place a competitive health or aged care system when the pressures motivating those operating the system are in direct conflict with the intention of the system. Success in a system like this will ultimately depend on an ability to find ways around regulations designed to protect citizens and the state. The situation created is the direct opposite of the ‘civil society’ envisaged by Eva Cox. In this congruity of purpose and mutual trust ensure that regulations ‘rest lightly’ “.

The structure of the new system

The new system has redefined the way that we understand ourselves, our society, our markets and our government. This has had profound consequences for the sort of people and the sort of society we have become.

Civil society

Civil society is critical for a functioning democratic society, for our humanity, for resilience, for nurturing and building effective leaders, for restraining antisocial behaviour, and for holding politicians and markets to account. This new belief system has seen society, which it called ‘the collective’ as a major problem and a threat to individuals and markets.

Civil Society has been pushed aside and its role taken over by managers. It has been managed and manipulated by government and industry. Instead of being central to our lives, it has withered and become fractious.

Society is in poor shape, unable to nurture and create responsible citizens who embrace community values and empathic relationships. Self-interest goes unchecked. What was happening to society was already clear in 1995. 

Eva Cox was a strong critic and in her Boyer lectures ‘A TRULY CIVIL SOCIETY’ she addressed this issue arguing that increased competition and an excessive focus on economic capital was coming at the expense of social capital. She writes about trust as something that is intrinsic to a civil society and foreign to markets. 

In 2021 we are facing a crisis of trust within society and aged care is a good example. Those we trusted to care for us have deceived us in unconscionable ways. Some quotes are relevant

Examples from warnings about the impact on society:

Introducing Cox and her 1995 Boyer lectures:

Eva Cox will take a radical look at the collection of somewhat forgotten values - such as trust, co-operation and goodwill - that hold society together. She argues that we are losing that important social glue and that current debates about citizenship are narrowly focussed on citizens as competitive individuals rather than as social beings.

The lectures

Lecture 1: “When Margaret Thatcher said 'There's no such thing as society', she lost the plot! Society is the myriad of ways people connect, linked by some common interests or characteristics. Over the next six weeks, I want to explore what holds society together, what may cause us to come apart and what constitutes a truly civil society in which we trust each other and face our futures optimistically”.
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Lecture 2: In a truly civil society “high levels of social capital bring co-operation and the norms which may be called civic virtues. These virtues in turn are the basis of truly civil societies where the law rests lightly”
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“Social capital is the social glue, the weft and warp of the social fabric which comprises a myriad of interactions that make up our public and private lives - our vita activa. Distrust, loss of social cohesion and short term self-interest breed conflict and social isolation, demands for law and order and a contempt for power and authority”.
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“Trust should be defined as inexhaustible because it is increased, rather than depleted by positive use. The more we work together with others in environments which encourage co-operation the more likely we are to trust others, and the occasional failures of trust will be less damaging”.
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Lecture 6: “My vision of a very civil society involves social connections with political life. Politics must combine the valuing of difference, intertwined rights and responsibilities, and collective and democratic involvement in decisions which affect us”.
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“First, we are primarily social beings, defined by our relationships, linked to a broader society. The links between us are important because they define who we are and how we see ourselves in relation to others. We are born with a capability for good and evil, and we continue to learn trust, sociability, distrust and aggression”
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 “- - it is our social relationships which constitute society, not our individuality. Putting the social back into political decisions seems almost self evident, but somehow we have had an excess of market forces and competition which divides us”.

The same year in 1995 Stuart Rees and Gordon Rodley edited a multi-author book “The human costs of managerialism: Advocating the recovery of humanity”. What they said was prophetic. We need only look around us to see how bad this has become since then.

Extracts illustrate this:

A picture emerges of contrived policy yielding profound human costs and lasting damage to the social fabric. What is needed is nothing less than a recovery of humanity.
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Apart from the immense injustices and hardships imposed on the ‘losers’ in this race to maximize profit and gain, society is losing its collective soul.
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- - is reducing economic security, generating economic inequality and fracturing social cohesion. .
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- - - - shaky theoretical foundations, dubious ethical basis and its practical failures.
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- - - the failure to acknowledge and include the breadth of human cultures and values in envisioning the economic organization of society inevitably leads to the fragmentation of human communities and values.

These authors even describe why it is so difficult for those, like the two Royal Commissioners, who have been a part of this system to challenge it and give this feared ‘collective’ a controlling role in aged care. On page 285 they say”

“To question these forces puts the questioner at risk of being labelled anti- progressive, unrealistic, insufficiently corporate, uncooperative or all of these”.

In 2015 Eva Cox wrote critically about continuing damage to social stability and cohesion and way government was focusing on consumers rather than “policies that rebuild community trust and reassure voters that their quality of life does require collective goodwill, not just growing GDP”. At the same time in 2015 others were

  • writing about un-confronted pressures to reform democracy describing the situation as “a stalemate seeking a solution” (that stalemate persists today), and
  • questioning why there was “no serious discussion on the relative roles of governments, markets and communities in delivering goods and services for the nation” and warning of the “risks that toxic populist movements” similar to those of the 1930’s would develop. This was only a year before President Trump was elected in the USA.

With the system of belief now itself under threat, for believers, the threat of “the collective” is greater than ever.

The price we pay: As a society we are still paying a huge price for ignoring these dire warnings and not acting on them. What is even more disturbing is that when these arguments were made to the Commissioners inquiring into aged care, they simply ignored them.

But if we look around we see that many more in our universities and our societies are now questioning the status quo and writing about it. We need to understand that those who have created the present system and believe in it see their critics as a threat and not credible. When the system fails they are overlooked and not appointed as Commissioners, advisers or invited to contribute as witnesses.

Other possible consequences: A functioning civil society builds trust and social capital and it does so through personal relationships. It is readily apparent that there has been a breakdown of relationships and trust in our society.

We seem to have created a society that sets the stage for multiple problems and is poorly equipped to address them. The media describes and there are calls for action and funding to combat sexism, ageism, abusive relationships, alcoholism, drug addiction, a rapid rise in mental health and suicide in the young, psychological problems, radicalisation, terrorism and more.

Could these be symptoms of a damaged society that no longer fosters supportive relationships and so is unable to engage and support its members and confront aberrant ideas before they become entrenched?

Government

The philosophy of small government and a hands-off supportive role for government has seen the once independent bureaucracy drastically reduced in the name of efficiency. It has been tamed and made subservient by appointments from industry, a revolving door of industry advisers, consultants, contracted market investigators and policy advisers. Adam Smith’s advice about “an order of men ... who have generally an interest to deceive and even oppress the public” has been ignored as industry and government have become ever closer and read from the same page.

The hands-off approach and ‘liberalisation’ of the market from regulation and close oversight has seen a number of processes, like accreditation and governance adopted in attempts to induce industry to regulate and control itself. They have been singularly unsuccessful in combatting the strong perverse pressures within markets. In situations like this words and processes become tokens – a visible substitute for what is intended but not there.

The government has lost capacity and is now dependent on market entities to help it govern the country. Political party’s electoral campaigns are also dependent on support and large donations from vested marketplace interests who also lobby.

The market

The market has become ascendant and the driving force in our society. Non-profit, government and societal organisations are organised and managed along similar market lines. Economic success has become the measure of performance and the justification for policy and action.

Those who succeed become credible, confident and difficult to challenge. Lavish salaries and bonuses based on performance have become a measure of status and authority. Those who are so successful have no doubts and they are blind to the consequences of what they are doing.

Many are now aware of the problems

If we look around we see that many more in our universities and our societies are now questioning the status quo, writing about it and looking for a new road to follow that includes greater community involvement.

The movements to rebuild society through greater community involvement are not new. They use terms like deliberative democracy, participatory democracy, neighbourhood democracy, and open democracy,

More information about these movements:

In the USA longstanding interest in a more civil society has recently been overwhelmed by Trumpism but not died. What was happening soon became clear.

A 1993 study from the Brooking institute found that “careful research and analysis” showed that “neighborhood based participation is the key to revitalizing American democracy”. Their analysis of 5 cities showed that “citizens in participatory programs are able to get their issues on the public agenda and develop a stronger sense of community, greater trust in government officials, and more confidence in the political system”.

Matt Leighninger, the president of the ‘Deliberative Democracy Consortium’ wrote a book in 2006 and a report in 2008 described the growing interest in community participation. The book made “a compelling case that something new is, in fact, transforming the way in which decisions are made by local governments and school boards, and sometimes even at the state and national levels”. He wrote about “the growing tendency of public bodies to see their communities not as collections of citizens, but rather as individual consumers. They don’t engage citizens as potentially active decision makers - - .”

The report described the neighbourhood engagement and the Open Democracy movement that were bringing citizen’s voices to the table. The consortium represents over fifty nonprofit organisations aiming to “advance democratic practice in North America and around the world”.

In 2011 Little described the way the movement had waxed and waned with political winds over the years.

In the UK the “Centre for Welfare Reform” was founded in 2009. It has been pressing strongly for citizens to be involved and take greater control of the care of the disabled and infirm and is critical of centralization and neoliberal thinking.

They now have “over 100 Fellows around the world” who contribute to their work and a large library of articles and reports . They have joined with and been very active in a much larger group, the ‘Movement for Neighbourhood Democracy’. It has over 20 group members and was formed in response to the greater interest in community engendered by the COVID-19 pandemic.

In 2020 the Economist in the UK wrote that “democratic institutions have taken a battering” and supported more “deliberation within democracy” including Citizen’s Assemblies.

A new 2020 book ‘The Lonely Century’  describes the consequences for society and the loneliness of citizens within it.  It describes the “phenomenon of feeling oneself to have been marginalised and neglected by the dominant interests in society - not so much left behind but left out”.   It indicates the need to “reconnect capitalism to the pursuit of the common good and put care, compassion and cooperation at its very heart - - ”.

In Australia the open government movement and participatory democracy experiments flourished under labor between 2007 and 2013 but died with Abbott in 2014, recovered reluctantly with little publicity under Turnbull, and has since hibernated under Morrison.

In 2015/16 Aged Care Crisis reviewed what was happening. The new Democracy group formed in 2004 has been active in writing about new forms of democracy and citizen participation and continues to strongly press for this. The COVID pandemic has stimulated a greater interest among citizens about their role and involvement within communities but political leadership is absent.

Politicians, businessmen and others who have built their lives using free market thinking will be challenged by these ideas. They will not see these movements as credible. Those who adopt them are not appointed as Commissioners or even advisers. They are not invited to contribute to the discussion.

Understanding the Royal Commissioners and their report

Current Government’s see aged care as a market rather than a human service. It is not surprising that the current coalition government appointed those with market expertise rather than caring experience as commissioners. These are people who see and understand the system in the same way they do. Those who see it differently are not seen as reliable or credible.

One Commissioner was a long-term bureaucrat working with government in managing and interacting with the market. She is an expert in governance processes. The two judges appointed had expertise in tax, commercial law and industrial disputes. They too would approach aged care as a market.

When people have invested their lives and careers in a particular pattern of thought, built their careers using them and condemned alternatives, admitting that everything you have believed in and done was misplaced and harmful is enormously challenging. Social scientists have written books about what has been called ‘Wilful Blindness’ or sometimes ‘Strategic ignorance’. This explains why when challenged by evidence we can know things but simply cannot admit them even to ourselves.

It is not surprising that these Commissioners would have come with very negative attitudes towards any control by community. We can understand why they, like the 31 other failed inquiries over the last 20 years, have avoided this issue like the plague.

In the 1980s inquiries were comfortable in recommending and pressing for regional control and for community to be involved in oversight. We have explained how attitudes have changed since then.

The Commissioners would have had difficulty in advising increased regulation and accountability, but they have tried to do so within the governance framework. There is a great deal about accountability and data collection in their report.

We worry that much of this, particularly that relating to care will be self-reported and may not in practice be properly and independently verified. Avoiding burdensome regulation has been central to belief and at the heart of policy.

The Commissioner’s strong focus on governance is understandable, but in failing to involve civil society and communities, they have once again failed Australia and its citizens. We might describe what we are advocating for as ‘community governance’ but that is seldom listed among the types of governance.

It is interesting that while recommending probity assessments for provider and key personnel, probity requirements for owners, abolished in 1997 were not brought back by the Commissioners. International and local research has shown that ownership is one of the most important factors in outcomes. Probity regulation challenges the free market belief that markets should be liberated.

Commissioner Pagone also has an arts and humanities background with an interest in human rights. He displays a greater insight into what is happening and supports regional management in his recommendations. That there are major differences of opinion between the Commissioners and in their recommendations is not surprising.