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19 September 2008

Markets and Failures

Spending a bit of time in Alice Springs has got me thinking about economics and unemployment. The unemployment rate amongst indigenous people is probably not as high as it feels, but it's still pretty high (19% for NT in 2006). There's an overwhelming sense of needing to shift the culture to make people more employable. Education needs to increase. English skills need to improve. People's work ethic needs to improve. We need to "skill people up" to cope with the challenges of a modern economy. There are some efforts to instead change the labour market, to reduce the burden of change placed on the community, but these efforts appear pretty minor. CDEP was probably the most ambitious (and successful?) example and that's being rolled back in favour of a conventional labour market. There is the idea that CDEP wasn't real employment, because it was subsidised and the wages weren't market wages.

So while no one really wants to label the indigenous communities as "failing" it feels like that's what everyone is thinking. That's sort of what the Intervention is about. The communities are supposedly so screwed up that the government needs to roll in and fix things up.

But it seems to me that the real failure in the Northern Territory is the labour market. We have backed it 100% but it hasn't delivered. The idea is that the labour market allocates work and incomes to the majority, and all those who benefit from it look after the people who get shafted by it. It's most fundamental promise is that it will find people jobs that are a better alternative than poverty. But here that hasn't really happened. For a lot of people in the Northern Territory, poverty is still a more appealing option than any of the available jobs. There are obviously different levels of poverty and if you removed welfare the incentives would change slightly, but not dramatically. I wonder if white onlookers are exaggerating the burden of income poverty and/or the appeal of the jobs there are. After all, for Quite a Long Period, indigenous people lived pretty merrily on consumption far lower than they do today and only worked a few hours each day.

So I don't perceive there is a problem with the work ethic of local communities or with indigenous people at all. I don't think work ethic is even a factor here. I really think it is more about the options available to people. And that is a failure not of the people but of the economy. It's a failure that I suspect is mostly the fault of relying on a market to distribute work. I think that most indigenous people value the resources and services that Europeans have introduced. But I don't think they value them as much as Europeans and I don't think they always value them enough to sign up for one of the jobs on offer.

People are already talking a lot about this sort of stuff, which is great. But I don't feel like they have stopped being exasperated with indigenous people, which is possiblly just as important. We still offer welfare begrudgingly, even though I think it's a necessary component of our preference for market solutions.

I reckon we need better jobs and a more deliberate effort to find jobs that people want. We need jobs that are a better option then welfare and/or income poverty. That definitely isn't easy. If it was then the market would probably have done it already. And it's probably a harder solution than just brainwashing kids through the schools. But I think it's a better solution.

Comments

  1. Excellent post!

    “It’s a failure that I suspect is mostly the fault of relying on a market to distribute work”

    Absolutely. More than that, the market has to start somewhere. The socioeconomic status of most indigenous people is low (in our eyes), and not because they earned that low status, but because we put them there many years ago and expected them to stay there for a long time. This means that the market based on western values which we expect to work for them now has to apportion desirable employment with little resources to work with, and these resources are western education and other social values that mesh well with western culture. We then don’t provide them with adequate education (and when we do, it contains a lot of brain-washing, as you say), and we deny them western values and expect them to acquire them at the same time.

    It’s like a game of football where the ball is already behind the fullbacks on one team, and those fullbacks have their shoelaces tied together. They have to undo their shoelaces and get the ball off the opposing team at the same time. Not only is it unlikely that they will succeed at this, every time we intervene in the way we have done, we keep putting the ball behind those fullbacks and tieing their shoelaces together.

    Getting indigenous people as a society to construct a desirable average standard of living for themselves will require determining the kind of society they want, and giving it a kick start by artificially creating employment in areas which will eventually become the norm. The problem is, we reckon we know what kind of society they want more than they do.

    In my uneducated opinion, and please forgive the analogy to engineering, most indigenous societies that are in strife (in our eyes) can be considered in either a stable state of dependance/poverty or a transient state of reform. If it is the latter (and one would hope that it is), it can’t rely on our own system of governance because our system assumes an overall stable state, and that any transient states will be smothed out (and not always fairly) to fit in with the norm.

    Do you reckon creating a council that is responsible for indigenous affairs and then giving the population that is being governed by that council the right to elect competing candidates might help? Or is that sticking western values where they’re not welcome all over again?

    Laurence / 12:13pm / 26 September 2008

  2. Yes. I agree.

    I don’t think there are any solutions that are one step away, or any helpful suggestions I or we can suggest to indigenous people from afar. I don’t think I have any opinions any more on what indigenous people are doing wrong. I’m not even sure a giant bunch of vaguely connected people can do things wrong all together.

    I don’t think elections are very indigenous, but that doesn’t mean they are necessarily a bad idea. I feel like white people need to still be involved though.

    Ryan / 1:10pm / 26 September 2008

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