The failure of the family part 1: the family and the basic wage

The family in Australia once enjoyed a privileged place at law and in social and economic policy. Nothing epitomised this more than the 1907 landmark judgment of Henry Bournes Higgins, President of the newly established Commonwealth Court of Conciliation and Arbitration, in the Harvester case. This case established the basic wage, defined as a wage sufficient to support a working man, his dependent wife and three children "in frugal comfort". Higgins set the rate initially at two pounds and two shillings for a six day week.

Higgins' Harvester judgment linked wages to human need, not to profits or productivity. It was also one of many measures in support of a great social experiment, keenly watched in Europe at the time, to build a peaceful, egalitarian and democratic society without revolution or violent upheaval. By and large that experiment was a tremendous success, and it is perhaps a function of that very success that over the past 30 years we have dispensed with most of the structures put in place to attain it, not just in the area of tariffs or industrial relations, but also in relation to the family.

Harvester placed the welfare of the family at the centre of social and economic policy from the beginnings of Federation. In a new nation concerned to minimise the divisions between rich and poor and to lay a solid basis for social stability this made perfect sense. Over the past 30 years an enormous amount of empirical work has been done on the relationship between marriage breakdown and family dysfunction, and the rise of the different social pathologies that pose such problems today for all of us, but especially for law enforcement agencies and health and welfare workers. One of the many things this research makes clear is that if you want to preserve social stability or to prevent it being slowly eroded, it makes good sense to buttress the stability of the family.

While this fact was not as well documented in 1907 as it is today, there was certainly hard-evidence along these lines available to Higgins in forming his judgment, and we know he used it. In particular he drew on Seebohm Rowntree's study of poverty in York in 1898 which challenged the then-prevalent view that the poor were responsible for their own poverty by demonstrating that the more important factor in that city at that time for most of the poor was low wages.

To his credit, Higgins took the point. There can be no genuine social stability on a basis of poverty, even less so on the basis of impoverished families. Rowntree's standard family was a worker with a dependent wife and three children, and so the basic wage and what demographer Peter McDonald calls "the male breadwinner model of the family" became the foundation of all policies affecting family life in Australia.

Feminism, the Market and Family

By the time the basic wage was abolished in 1973 Australia had become a very different place and new pressures on the family were emerging. In 1960, Australia became one of the first countries in the world to grant approval for the general distribution and use of the pill. The freedom this gave women to defer marriage and childbirth, limit the number of children and pursue a career coalesced with the rise of feminism to change the pattern of family life, not least in making the "traditional" family of male breadwinner and dependent partner and children a minority lifestyle today (less than 35 percent of families with children under 15 in 2000). This is not to suggest, of course, that the traditional family (man, woman and children) has become a minority lifestyle choice. On the contrary, couples with children under 15 constituted a little over 79 percent of all families with children under 15 in 2000, although in 1990 the figure was over 85 percent. Over the same period single-parent families headed by the mother rose from 13 percent to almost 19 percent.

Feminism also coalesced with changes in how we thought about the economy. As it became more and more difficult for families to maintain their standard of living on one income, feminism came to the rescue by sending wives out to work. This offset the disappearance of a family wage and enabled families to maintain and often improve their standard of living, at least initially, although for many poorer families today even two incomes are not enough and parents find they have to seek a "third income" in the form of additional part-time work at nights or on the weekend to make ends meet.

The way feminism helped offset the consequences of market reform on families and helped make those reforms possible by reinforcing the radical individualism of market ideology has led American sociologist Philip Selznick to only half-jokingly claim that in the 1970s and 80s feminism saved capitalism. If the one-income family had remained the norm in that period, market reforms would not have been able to go as far and as fast as they did, for fear that plummeting living standards would bring about a real social crisis. It is an interesting claim.

Now I am not saying that the collapse of the family was the consequence of some sort of unholy alliance or conspiracy between feminists and radical free-marketeers. But there is no doubt that in its day-to-day operations the market is interested in individuals only as workers with certain sets of skills, and not as people who may have families or who are performing work that might be inefficient, even costly but important to the wider common good. The market is blind to these considerations. It is the role of society and government to flag these considerations as important and to make them register in the economic realm – the old basic wage is an example.

Contrary to some people's expectations, the Church is not an enemy of the market. Pope John Paul II stated the Church's approach very clearly in his 1991 encyclical Centesimus Annus. It is not a simple matter of saying that a free market economy is always and everywhere good. A great deal depends on what we mean in talking about a free market economy. If we mean "an economic system which recognizes the fundamental and positive role of businesses, the market, private property, and the resulting responsibility for the means of production, as well as human creativity in the economic sector," then the Church supports the free market. But if we mean "a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedomin its totality, and which sees it as a particular aspect of that freedom, the core of which is religious and ethical," then the Church opposes it.

The relationship between economics and culture is complex and there is no doubt that each powerfully influences the other in different ways in differing circumstances. The operation of the free market should be circumscribed by a legal order and by the interests of the common good, an important part of which is the strength and stability of the family. It has often been said that the market relies on qualities that can only be described as moral qualities if it is to operate successfully: qualities such as truthfulness, honesty, conscientiousness, industriousness, self-discipline. We should not take it for granted that by and large business can be conducted in this country without the crippling levels of corruption endemic to other places in the world. This doesn't just happen. It is only made possible by deep moral values underlying the operation of the market.

When the free market begins to undermine the institutions which inculcate the values upon which it depends, it begins to undermine itself. If for no other reason, this is why champions of the free market should be concerned about the effects of the market on families – which is for most us the primary source of the values and standards by which we learn to live our lives. The problem comes about when the market is given pre-eminence over culture and the common good. One indication of this problem is the emphasis that is currently placed on treating most important activities in our society as if they were businesses, or denying their economic significance altogether. The work of a housewife appears nowhere on any financial balance sheet. Hospitals have become the health industry, and patients have become clients. Universities and schools have become the education industry and students and their parents have become consumers.