Monday, February 7, 2011

Economics and the failure to understand the experience of people with disabilities

image courtesy of AFDO

The ideas in this piece were the result of comments made by Taryn Harvey (see below)

Economics (and economists) try to create a world in the image of their economic theory. In particular, they try to show that market solutions are the best way to address social and economic problems and are always good for people and for communities. In public policy economists provide the justification for building a world based on markets.

Most economists believe in a self regulating market system- a world in which markets collectively allocate resources, efficiently set prices and determine the distribution of income.

In the world of economic theory markets are supposed to provide for all human needs and are inherently good for people and communities. Of course in the real world in which we all live, such economic theory is frankly rubbish.

Economists fail to acknowledge that their ideas, theories and prescriptions are based on half truths and often undermine and destroy communities and disadvantage people who are already marginalized, such as people with disabilities.

In his book The Dismal Science: How Thinking like an Economist Undermines Community Stephen Marglin dismiss market driven economic theory as inherently destructive for public policy, for disadvantaged groups and for communities. When markets become a sphere unto themselves, an autonomous system to not just run the economy, but a key driver of public policy and the basis for organising society is a whole, Marglin believes that economics (and markets) destroy human communities.

Marglin argues that in the area of the labour market economic theory does particular damage.

I was reminded of Marglin's critique of mainstream economic and market theory and its destructive impact on public policy when I read this piece in The Australian quoting Economist Mark Woden who reckons that the Gillard Government should reduce the payment of the disability support benefit in order to provide an increased incentive to recipients to enter the workforce.

Here is a brief commentary on Woden's suggestion  by Taryn Harvey, CEO of the Developmental Disability Council of WA, who has a decade of experience in disability policy, including employment. She is also a Local Government Councilor for an inner city local government authority in Perth.
And what would Mark Wooden, an economist, actually understand about how the Disability Support Pension works and how it impacts on people's behaviour? Oh THAT"s right...people behave in a purely "economically rational" way. Economists know... diddly about how people actually make decisions and weigh up pros and cons in a real environment. We've had a decade of policies based on economists theories and they have had NO IMPACT. Governments and bureaucracy have been ineffective because they lack the capacity for insightful policy development. They lack the capacity to actually understand what their lofty ideas actually look like in practice and how people live day to day..

So Mark, let me just explain something to you. Most people on the disability support pension have a life long disability that has quite an impact on functioning. Some of these people have a level of disability that means that employment as YOU understand it is unlikely. That doesn't mean that they CAN'T work or that they don't WANT to work, it just means that people like you can only cope with understanding people who work just like you do in jobs just like yours in worlds just like yours.

Now, if Governments actually gave employers better support. In fact, if Government actually LEAD BY EXAMPLE and employed people with disabilities then perhaps more people on DSP would be able to get work. Maybe if DEEWR actually let disability employment services do good work instead of telling them exactly how to do their jobs they might be able to actually get work done. If DEEWR spent LESS on "contract management" and so-called "accountability" and red tape and MORE on actual support then we might see things improve.

So Mark's solution is to cut the DSP. GREAT one Mark. Excellent idea. That will give them the kick up the pants they need Take a group of people, many of whom have difficulty entering the paid workforce or staying there and increasing their earnings and CUT THEIR INCOME. Oh yes, never mind about the fact that they are already often have higher costs of living because of their disability.

They can't.  Why doesn't the cause none of you have actually managed any meaningful or insightful policy development, and don't have Government organisations who can actually implement insightful policy.

This ISN"T an insoluble issue - it just takes policy makers to stop thinking they know it all.

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