George

In an essay published in the Monthly magazine before the election, Kevin Rudd put his finger on a crucial tension at the heart of the Liberal Party’s mix of neo-liberal economic reform and socially conservative social policy. Howard claimed the two were complementary, but provided no philosophical framework to demonstrate exactly how. The socially corrosive effect of aggressive economic deregulation (epitomised, Rudd argued, in Work Choices) was hard to square with a social conservative line on family values, tradition, church and pride in country.

But the question Rudd posed to Howard can now be asked of his own Government, especially in light of his first budget. If, as Rudd insists, individuals are best conceived as self-regarding and other-regarding, and if we need “security, liberty, property as well as equality, solidarity and sustainability”, then what is the appropriate philosophical framework for reconciling these often competing values?

Craig Emerson, the Rudd Government’s small business minister, in a speech this year to the Sydney Institute, laid out his vision of what he calls market democracy. The gist of Emerson’s vision is to “allow the market to create prosperity and out of that prosperity to expand opportunity, not the welfare state”.

Equality of opportunity is the key concept and educational opportunity, in particular, is seen as the best means of combating entrenched poverty and social disadvantage.

Equality of opportunity is a powerful rhetorical tool in contemporary politics, just because it seems so acceptable across the political spectrum. Who would be against it? If it means we all should get an equal chance to get ahead in life, then that sounds fine. If it also means that people can feel good about earning or owning vastly more than their neighbours, even better.

But equality of opportunity is not a political philosophy in itself. It forms part of a way of thinking about the nature of citizenship and the public ethos of a country, but only that. I believe a broader framework is supplied by something that has been deeply unfashionable in Australian politics for far too long: the notion of social justice.

A striking feature of political discourse in Australia since the 1990s (and elsewhere, including Britain, the US and Canada) has been that social justice, as a way of thinking about politics and economics in general, is almost completely marginalised. Friedrich Hayek, the Austrian free-market economist and political philosopher who inspired many of those who surrounded Margaret Thatcher - and whom Rudd targeted for particular critical attention in his Monthly article - claimed that social justice was, in fact, a mirage.

For Hayek, the pursuit of distributive justice stifles individual liberty and creates the conditions for oppressive government. It interferes with the market, distorting price signals and thus undermining efficiency. This in turn interferes with individuals’ abilities to plan their own lives on the basis of information that only genuinely free markets can provide.

Faced with a hostile political environment, parties of the centre-left, including Labor, have replaced the language of social justice with that of the “third-way” or indeed “market democracy” (Labor has banished socialism from its lexicon for some time now). And so it has been left to the churches, the trade union movement and various community groups to take up the call for social justice.

More often than not, this message has been ignored. But we need to revive the idea of social justice; otherwise, equality of opportunity simply becomes a vacuous concept into which any kind of political rhetoric can be poured.

The modern concept of social justice emerged out of the seismic changes occurring around the emergence of industrialisation in the 1840s in France and Britain. Fundamental questions were asked about the justice of the unequal relations between capital and labour, and about the distribution of income and wealth. Out of these struggles emerged a number of ideas that became the hallmark of social democratic movements in the late 19th and 20th centuries: that the power of capital needed to be counterbalanced by other institutions, including trade unions; that extreme inequalities of income and wealth needed to be remedied through measures of taxation and transfer, including ensuring that all citizens (even those unable to work) had at least enough resources to satisfy their basic needs; and that education and health should be provided equally and universally. Even Hayek thought that if markets failed to deliver basic health and education and living wages, the state should step in.

If, at the heart of social justice is the idea that every individual ought to be treated equally, lying beneath this idea is the notion that each individual deserves equal respect, or in Immanuel Kant’s famous phrase, to be treated always as an end and never as a means. Another way to think of this is the ability to live without shame, as the Nobel Prize-winning economist and philosopher Amartya Sen has put it, and having the capabilities to be able to participate fully in a variety of ways in the community.

No one should be prohibited from receiving an education or medical help or having a fair trial because of their skin colour, gender, sexual orientation or social and economic status.

But not being prohibited from attending school is not the same thing as having a genuine opportunity to receive a good education. If you live in the central desert without access to a good local public school, and without the means to pay for private education, your “right” to education is empty. Genuine equal opportunity is actually extremely demanding.

Emerson is spot on in focusing on educational opportunity as a crucial part of ensuring overall equality of opportunity. But if Labor is serious, the kind of investment required to make it really work, especially for the worst off in our society, will require much more than the “education revolution” has so far promised to deliver. Education is vital but it needs to be part of a broad package of reforms aimed at delivering genuine equality of opportunity. And that means talking about redistribution. This is where a debate over social justice runs up against much recent political orthodoxy.

There is ample research in the social sciences which shows that the greater your wealth and income, the more you think you deserve it (the inverse also applies; the less you make, the less you think you deserve it).

But responsibility is a tricky philosophical concept to pin down, and even trickier in relation to the causal chains that would allow us to say that James Packer, for example, really deserves to keep his billions of dollars, and that the unemployed are fully responsible for their plight. We need to keep hold of the distinction between someone being in a certain situation because of the choices she has made, as opposed to the circumstances she faces. But it is a difficult distinction to draw, and one not well served by the over-simplifying rhetoric of much of our recent political debates.

Individual responsibility is indeed a vital concept for making sense of social justice, but individuals must have equal opportunity to develop the capabilities required in taking responsibility.

Although there are intense debates about where, exactly, to draw the line in defining poverty, everyone agrees poverty is lousy. But after a certain point, usually above where it is assumed that people have enough resources to lead a reasonable life, why care about the levels of inequality between, say, Jamie Packer and a nurse? Moreover, because Australian real wages have grown across all income levels, why worry that they have grown more at the highest level than the lowest?

The short answer is that rising levels of inequality make the worst off even more worse off overall. And that is unjust. We know inequality is closely related to a host of problems with regard to health, crime, education and employment. Over 70 years until 2004, the “headline” rate of income poverty (defined as 50 per cent of median income) increased from 7.6 per cent to 9.9 per cent.

Over the next two years, it increased from 9.8 per cent to 11.1 per cent. This means approximately 2.2 million Australians are living in poverty, including 411,000 children. In addition, since 1996, those in the top quintile have received 47.3 per cent of the increase in disposable income produced by our booming economy.

None of this would matter as much if there was a lot of mobility between different income and wealth levels - if knowing the position of your parents, for example, didn’t tell us much about where you eventually end up.

Alas, this isn’t the case. To allow for vastly different starting points in relation to people’s ability to make the most of their opportunities - to get a decent education, a well-paying job, to enjoy good health - is unjust.

Many of the goods at issue here are what economists call “positional goods”: what matters is not how much you have in general, but how much you have in relation to what others have. For example, if most new jobs now require post-secondary education, it’s not just a matter of finishing high school but going to university. If most of your peers have university degrees, you’ll need a master’s degree, or a degree from an elite university, to be competitive for the best jobs. The rich have much greater capacity to buy their way into those pathways.

One response, of course, is to argue inequality is required to provide incentives for the talented and diligent to create the economic growth that benefits all. But the claim that growth in inequality underpins economic success is highly dubious, at least in need of serious evidence. I see no reason to think economic growth can be achieved with less inequality. And we need to balance growth against environmental capacity, and to ensure it is compatible with sustainability.

Finally, we need to think about how the gains from economic reform and success can be more justly shared through the tax and transfer system. Mentioning higher taxes, or even considering not offering further tax cuts, is now considered deeply politically incorrect. But we should be intellectually and politically brave enough - left and right - to start asking hard questions about inequality.

A good start would be to focus not only on income and wealth disparities, but broaden analysis to include the bundle of resources required for people to enjoy real opportunities to lead decent lives. Money is important, but it isn’t everything, even to the poor. And here having a political philosophy can help. We can turn to John Rawls’s argument about the equal distribution of primary goods - all purpose means such as liberties, opportunities, rights, income, wealth and the social bases for self-respect.

Rawls powerfully argues that justice consists in the equal distribution of these goods, and that only when this is in place can we talk about holding people responsible for their preferences. Or, we might turn to Sen’s work, which has focused on identifying those substantive freedoms, or capabilities, required to choose a life one has reason to value. Given human diversity, Sen is particularly concerned about how people convert the various goods required to live a decent life into genuine opportunities. And delivering genuine equal opportunity is much harder than many people - including Emerson - think.

So how do we reconcile a commitment to liberty, security and property with that of equality, solidarity and sustainability, as Rudd insists we must? We need to rediscover the language of social justice, and we need to adapt it to today’s circumstances. By not talking about social justice, by failing to connect it to Australia’s challenges, we are left with the idea that justice is simply a mirage - as Hayek thought - or is whatever outcomes the market generates.

Professor Duncan Ivison is head of the school of philosophical and historical inquiry at the University of Sydney.