The New Political Economy of Disability

Transnational Networks and Individualised Funding in the Age of Neoliberalism

Georgia van Toorn

• Publisher: Routledge
• Year: 2021
• Print ISBN:
  9780367483050
• eBook ISBN:
  9781000348422
• Topic: Social Sciences
• Subtopic: Political Economy
• Index: Social Sciences

This book addresses the ways in which individualised, market-based models of disability support provision have been mobilised in and across different countries through cross-national investigation of individualised funding (IF) as an object of neoliberal policy mobility.

Combining rich theoretical and interdisciplinary perspectives with extensive empirical research, the book provides a timely examination of the policy processes and mechanisms driving the spread of IF amongst countries at the forefront of disability policy reform. It is argued that IF's mobility is not attributable to neoliberalism alone but to the complex intersections between neoliberal and emancipatory agendas and to the transnational networks that have blended the two agendas in new ways in different institutional contexts. The book shows how disability rights struggles have synchronised with neoliberal agendas, which explains IF's propensity to move and mutate between different jurisdictions. Featuring first-hand accounts of the activists and advocates engaged in these struggles, the book illuminates the consequences and risks of the dangerous liaisons and political trade-offs that seemed necessary to get individualised funding on the policy agenda for disabled people.

It will be of interest to all scholars and students working in disability studies, social policy, sociology and political science more generally.

1
Individualised funding

History, theory, practice

IF, with its origins in both the Chicago school of economics and the emancipa-tory paradigm of the Disabled People’s Movement, has proliferated with unprecedented ease and speed in recent years. Its rapid spread has seen the policy move, in various forms and configurations, across numerous countries spanning three continents – North America, Europe and Australia – propelled by a new ‘wave of neoliberalisation’ that purports to reorient state welfare programmes to the twin aims of social justice and efficient markets (Sidaway & Hendrikse 2016: 575; Gadsby 2013). As this chapter reveals, what started out as a fringe idea championed by a small clique of American free-market economists writing on education policy in the 1960s (Friedman 2002 [1962]) has since spread across the world in various guises and been adapted to a wide range of political–geographical settings. This includes, as later chapters reveal, world centres of power and policy innovation, such as England, and more ‘downstream’ sites of adaptation and emulation, such as Scotland and Australia.

Historical and intellectual antecedents of individualised funding

While IF is a relatively new phenomenon, the notion of consumer choice on which it rests can be traced back to some major thinkers in 20th-century neoclassical economics. Austrian economist Ludwig von Mises (2007 [1949]), building on the work of William Hutt (1990 [1936]), expounded a view of consumers as the central drivers of economic production (Smart 2010). In his view, consumers possess a form of power or sovereignty analogous to that of ‘political agents in the polity’, by virtue of their prime position within the totality of market relations (Smart 2010: 32). For von Mises, the primacy of the consumer, and the capacity to enact one’s preferences through market exchange, was one of capitalism’s great virtues, for it supposedly enabled freedoms that would otherwise be denied to individuals in a planned economy dominated by state-owned enterprise. These ideas were echoed by Friedrich Hayek and others within the Mont Pèlerin Society, which formed in 1947 to bring European and American free marketeers together to discuss and revitalise (neo)liberal economics (Mirowski & Plehwe 2009). This was an important venue for the advancement of ideas of consumer choice and individual freedom, albeit rather narrowly and negatively conceived as freedom from state coercion. While contributions to the Mont Pèlerin Society ran counter to the economic orthodoxies of the time, they have rightly been considered important to the resurgence of free-market economic thought and neoliberal approaches to public policymaking (Mirowski & Plehwe 2009; Harvey 2005).

It was Milton Friedman, however, who would take these neoclassical conceptions of consumer choice and apply them to the domain of public policy, thereby helping to popularise them and lend them some institutional and political purchase that they previously lacked. A leader of the famed Chicago school of economics, and an advisor, no less, to President Ronald Reagan and Prime Minister Margaret Thatcher, Friedman was amongst the first group of intellectuals to elaborate and promote free-market economic theory as a framework for public policymaking (Mirowski & Plehwe 2009). Modern notions of consumer choice in social services, for example, are partly indebted to Friedman’s work on vouchers as a mechanism for funding public education (Friedman 2002 [1962]; Friedman & Friedman 1980).

One of Friedman’s most acclaimed books, Capitalism and Freedom (2002 [1962]), more broadly explored the prospects for social service provision through vouchers. Capitalism and Freedom addressed one of the central questions of political philosophy: What are the necessary conditions for freedom and human flourishing? Friedman’s answer was indicative of what freedom has come to mean now, to modern-day advocates of consumer choice. Following von Mises, he equated freedom in the sphere of economic exchange with what he called ‘total freedom’, meaning, the freedom to enact one’s own will and live autonomously, free from political forms of coercion (Friedman 2002: 9). This negative conception of liberty – that is, freedom from external constraints on one’s autonomy – begat a strong scepticism towards the state and the very idea of a collective will. On the other hand, Friedman posed the market as a liberating institution, with the capacity to free individuals from state coercion. According to Friedman:

[b]y removing the organisation of economic activity from the control of political authority, the market eliminates this source of coercive power…. The wider the range of activities covered by the market, the fewer are the issues on which explicitly political decisions are required and hence on which it is necessary to achieve agreement.

(Friedman 2002: 15, 24)

From here, Friedman goes on to explore the kinds of activities that would be better placed within the sphere of market relations, so as to give individuals the freedom to choose what public services they consume. While Friedman did not engage in an in-depth discussion of disability service provision, his ideas about school choice influenced thinking on the use of vouchers in many related social policy fields (Exley 2014; Mintrom 2000). In regard to education, Friedman conceded that there was a role for government in subsidising schools because, in his view, schooling has positive externalities or ‘neighbourhood effects’, namely the reproduction of a well-educated, socialised and stable society (Friedman 2002: 89). However, he also believed that the role of financing education and the role of delivering education are not necessarily one and the same. In fact, he claimed the two roles ought to be separated, to prevent the government from delivering what the market could supply more efficiently and without political interference. Friedman proposed vouchers as a way to facilitate this functional separation of the finance and delivery of education:

[g]overnments could … [finance] a minimum level of schooling … by giving parents vouchers redeemable for a specified maximum sum per child per year if spent on “approved” educational services. Parents would then be free to spend this sum and any additional sum they themselves provided on purchasing educational services from an “approved” institution of their own choice…. competitive enterprise is likely to be far more efficient in meeting consumer demand than either nationalized enterprises or enterprises run to serve other purposes.

(Friedman 2002: 89, 91)

The implication of all this is a prescription for a diminution of the role of the state and government.

What, then, is the government’s role in Friedman’s ‘night watchman’ state? Evidently, he was not here suggesting that government withdraws entirely from the economic sphere but, rather, that it uses what legitimate power it has to enforce contracts and support capitalist enterprise. Vouchers, he suggested, are the ideal mechanism for promoting competitive markets in education. As Friedman implied, they work by decoupling the state’s service delivery role from its role as a funder, so that previously de-commodified education systems may be subjected to competition. Consumers, he argued, are the ultimate beneficiaries of a com-modified system of services, as they are able to choose services appropriate to their individual needs and preferences, with less bureaucratic oversight. It is only within the commodified sphere of exchange that ‘exchange is truly voluntary’, claimed Friedman, and that the ‘impersonal market … protects men [sic]’ from political forms of coercion (2002: 31).

More than 50 years on, IF schemes have reanimated neoclassical notions of consumer choice and limited government. While policy makers have largely avoided the term ‘voucher’, the logic and rhetoric of voucher-based provisioning have been refashioned by contemporary neoliberals and put into effect across Europe, North America and Australia through IF schemes for disabled people (Ferguson 2007, 2012; Beresford 2014; Hutchinson et al. 2006). This logic stipulates that cash transfers, in the form of individualised budgets, enhance both the choice and quality of support by helping to establish ‘quasi-markets’ of disability services (Muir & Salignac 2017). Quasi-markets are markets created by governments through the use of contracts and/or individualised budgets (Le Grand 1991). Typically, the government withdraws from service provision but retains a role in administering individual budgets and overseeing the market (Gash et al. 2013; Carey et al. 2018).

Until relatively recently, contracts have been the preferred mechanism for creating quasi-markets in public services (O’Flynn 2007; Pollitt & Bouchaert 2017). The widespread use of contracts characterised an initial phase of marketisation in which government relinquished its responsibilities in direct service provision and ceded these to a range of networks comprised of non-profit and commercial providers (Milward & Provan 2000). ‘Networked governance’ was the broad label given to this new, market-oriented approach to public sector management, in which the supposed benefits of choice and competition were sought through contractual arrangements with third-party providers (Stoker 2006). The model was designed with efficiency in mind. Yet over time, it attracted criticism for being funder- and provider-centric, plagued by bureaucracy and unresponsive to the consumer demands it was supposedly designed to satisfy (Le Grand 2007).

IF ostensibly overcomes these issues by funding end-users directly, while still keeping to the ethos and market-orientation of networked governance. The argument is that where citizens have choice as to who they purchase from, providers are compelled by the imperatives of competition, economic rationality, profit maximisation and constant growth to meet consumers’ needs efficiently, at a reduced cost to the public purse, and with minimal government intervention (Le Grand 2007). Consumers secure the benefit of choosing from a range of public, private and not-for-profit providers according to their personal needs and preferences: ‘it is assumed that the threat of their “exit” is sufficient to keep their current provider “on their toes”’ (Dan & Andrews 2016: 303). In theory, this arrangement results in ‘better services at cheaper prices, in place of traditional welfare-state service-provision models that are considered to be inflexible and inefficient’ (Macdonald 2017: 22). Yet evidence about the benefits of choice is thin and inconclusive, with various studies highlighting problems of iniquitous access to services, poor service quality and declining job quality for disability service workers (Exley 2014; Dan & Andrews 2016; Glendinning et al. 2008; Carey et al. 2018; Cunningham 2016; Macdonald & Charlesworth 2016; Cortis et al. 2013; Cortis et al. 2017).

It would be misleading to suggest that the recent resurgence of policies promoting choice in the consumption of social services is attributable to neoliberalism alone. Another important driver has come from the New Left and attendant social movement, welfare user and NGO-led mobilisations seeking a more just distribution of power and public resources (Fraser 2003, 2013; Spandler 2004). Their promotion of consumer choice in the consumption of social services derives from their theoretical critiques of the post-war welfare state (Williams 1989; Fraser 2003, 2013). New Left critiques of state welfare emerged in the 1960s and 1970s alongside the major civil rights struggles of the time. At the centre of these critiques was a concern for the rights and dignity of subordinate groups in receipt of welfare, including women, people from culturally and linguistically diverse backgrounds and disabled people (Williams 1989; Oliver 1990). For these groups, the bureaucratism and paternalism of state welfare were felt to have a dehumanising effect, inhibiting individual agency, curtailing citizenship and trapping people in a state of enforced dependence (Rose 1996; Misra & Akins 1998; Sapiro 1990). Struggles for choice were thus fought on the grounds of equity and social justice. User movements seeking to empower individuals and democratise the welfare state supported measures to devolve administrative and financial control to recipients of benefits and services (Croft & Beresford 1989). This was seen as a means of not only promoting greater autonomy at an individual level but also enhancing democratic participation in the governance of welfare (Fraser 2003). The extent to which such approaches could in fact enhance individual autonomy and democratic participation is debatable. But what is clear is that they represented at least a partial convergence with those advocates of consumer choice whose policy prescriptions derived from an emerging neoliberal challenge to the Keynesian welfare state and who occupied a position at the opposite end of the political spectrum.

Uneven geographies of consumer-centred care

The convergence of neoliberal and emancipatory arguments in favour of choice-based models precipitated a wave of social policy reforms throughout Europe and North America, accelerating from the early 1980s, although there had been intimations of these changes in previous years (Askheim et al. 2014; Greve 2010; Blomqvist 2004; Laragy 2002; Hutchinson et al. 2006). While these reforms have progressed unevenly over time and across different political jurisdictions, the overarching trend is towards a more marketised social service landscape in each of these regions (Brennan et al. 2012; Meagher & Szebehely 2013; Meagher & Goodwin 2015).

Britain is often considered being at the forefront of marketising reforms. Yet to varying degrees similar processes have occurred across European corporatist and social democratic states (Meagher & Szebehely 2013). For instance, Askheim et al. argue that in Scandinavia, theories of New Public Management have been ‘the ideological basis for a “modernization” of public services’ involving t...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication Page
• Contents
• Acknowledgements
• List of abbreviations
• Introduction
• 1 Individualised funding: history, theory, practice
• 2 Disability politics and the origins of individualised funding
• 3 From Thatcherism to New Labour: individualised funding in an age of ‘deep’ neoliberalisation
• 4 Self-directed support: a new direction for Scottish social care?
• 5 Transnational advocacy and neoliberal entanglements: individualised funding in post-GFC Scotland
• 6 New policy, same paradigm: Australia’s experiment in individualised funding
• 7 Individualised funding and the changing political economy of Australia’s ‘disability marketplace’
• 8 Neoliberalism, transnational advocacy and the politics of disability: final thoughts
• Index