It's time.
Time to make aged care accountable.
Accountable to who?
To citizens and their communities
A society that does not know its history and engage with it, is a society with Alzheimer’s disease. Without a memory, it cannot function effectively.
This page explains what has happened to Civil Society, Governments and Markets over the last 30 years. It explains why giving communities and citizens some control over the aged care market, was so challenging for the Royal Commissioners, that they avoided even talking about it. Forty years ago inquiries into aged care were advising it and they were told about that. What has happened?
Background information
Aged care as a wider societal problem
Aged Care Crisis and some of its members have been studying what has been going on for a long time. We have argued that aged care is only one of many systems that have been failing. If we are going to fix aged care we are going to have to fix a big problem in modern society at the same time.
If we look around us in the USA, the UK and in Australia we can see many market failures. It is the sectors where citizens lack knowledge or power that have failed so badly. Wherever there was any vulnerability it was exploited. There have been many scandals. It was usually the customer or recipient of services who were ripped off. Sometimes vulnerable employees were harmed. Aged care has failed in other countries too and is simply another example.
With so much going on there must be something wrong in our society. We can think about it as a disease like Alzheimer’s where we don’t remember what has happened, don’t see all the other things that are happening, just focus on the issues at hand and don’t put it all into context, think sensibly and then try to fix it.
These abuses have occurred within markets and particularly community services that have been turned into markets. These markets have made many rich by exploiting those who were vulnerable and whom they had a duty to serve with integrity.
It started in Australia in the 1980 and 1990s with the massive Alan Bond, Chistopher Skase, One Tel and HIH corporate frauds and financial collapses. In 2015/16, one of us wrote about some US and many more Australian failures where citizens had been exploited and harmed in the pursuit of profits. Another analysis described how this occurred when human services were privatised in Australia. Something has happened and it is not only aged care that is a problem.
If we look back, we see that in the 1970s and 1980s some major changes occurred in the way businessmen, politicians and then society itself started thinking about their relationships with one another.
When these are closely examined it soon becomes clear that what we are seeing is exactly what we should have expected - and what was likely to happen to aged care. Aged Care is clearly one part of a wider problem that needs attention. Many warned but by then no one was listening.
Civil society, Government and Markets
To understand what happened we need to understand the relationships between civil society, government and markets.
Civil society is used to describe our caring and responsible citizens and communities. Its where we rear our children, learn to value others and to ‘love thy neighbour as thyself’. We talk about community values, selflessness, empathy. Its where we form close relationships, debate and make decisions. The sense of togetherness and friendship creates a sense of wellbeing that has been called ‘Social Capital’ to contrast it with the impersonal wellbeing that comes with wealth.
It is movements within civil society that have fought for democracy in the UK, the French Revolution, the American Revolution and against dictatorships of all sorts. We are currently witnessing this in Hong Kong and in Myanmar (Burma).
An effective civil society and democracy are inseparable and effective politicians are a product of a well-functioning civil society.
Citizens in a civil society protect everyone’s rights and individual freedoms. At the same time, responsible citizens criticise and sanction anyone who tries to use that freedom to harm someone else or damage society.
We expect the politicians we elect to support civil society and pass the laws that we need to help us restrain criminals and protect us from predatory markets.
Markets trade on the more primitive selfish instincts that we all have and that civil society tries to contain. Their success depends on a balance of self-interest.
Over 300 years ago the father of economics Adam Smith described business interests as “different from, and even opposite to, that of the public”. They were “an order of men ... who have generally an interest to deceive and even oppress the public.”
Our own David Malouf expressed this in his 1998 Boyer Lectures exploring Australia’s heritage. He spoke about people who had “an eye for the main chance and for the weakness of others, the qualities that go to the making of a successful criminal, may be the same qualities that in other circumstances make a politician or businessman”.
Democratic Governments are elected from their members by civil society and their role is to support civil society and give form and support to the things they believe in and want through regulations, laws and enforcement. Laws reflect what the majority of citizens want and identify with.
Democracy is particularly vulnerable to attractive, but sometimes harmful ideological beliefs where a group of believers successfully persuades a majority of citizens to accept their beliefs and vote for them. Sometimes when they can’t do that, they seize power by force.
Societies are particularly at risk of doing this when things have gone wrong and society is in crisis and has become rudderless. People need something they can believe in and will seize on appealing ideas that are harmful. Mass media has sometimes helped groups of believers sell ideas and the 20th century has had more problems and wars as a result.
Vulnerability
Civil Society has recognised that vulnerable people in some sectors could be readily exploited by the unscrupulous. A different sort of market was needed. They only allowed people who could be trusted to provide services to vulnerable people. The trustworthy were described as “of good standing” or as “fit and proper persons.
Government supported this by issuing licenses to operate. Those whose past conduct cast any doubt on their trustworthiness were excluded. Those owning businesses or providing health and aged care had to undergo a ‘probity’ assessment before they could operate. These markets were also more closely regulated. Most of the services were provided by church and other non-profit community organisations.
During the 1960s governments started funding the for-profit market to provide health care for the elderly in the USA and aged care in Australia. Problems were soon apparent and both countries tried to control the situation.
The erosion of society and the ascendancy of markets since the 1980s.
A little under two thousand years ago Christianity, a small religion starting in Palestine became a global religion when Roman emperors were converted. They spread it across the world. Its message of caring for others aligned with that of citizens and society and it endured.
Much the same happened at the end of the 1970s when two converts to a new belief system about society, government and markets became leaders; Margaret Thatcher in the UK and Ronald Reagan in the USA. They worked closely together and spread it across the world.
That did not align with the values of citizens and society who have been pushed aside. It has caused great harm to society. While believers desperately try to deny this, many citizens and academics are now criticising strongly. They are trying to find a better way to meet the challenges that face the 21st century.
Origins
This belief system was started by a group of Austrian economists during the turbulent 1930s and 1940s, the years of the Great Depression, the rise of fascism and World War II. Civil society in Europe was in turmoil.
Instead of seeing this as an aberration in the fabric of societies that had given us democracy and protected our rights, these economists saw societal activity as an evil force that would inevitably end up with more Hitler’s and Mussolini’s. It was a threat to individual freedom. What they called ‘the collective’ became the great threat to freedom and to the market – It was equated with communism and socialism which were evil forces.
They saw freedom as being expressed through markets and society as being organised along market lines. It was a one size fits all system that would fix all our problems. Markets they claimed always worked and corrected themselves provided they were not interfered with or restricted in any way. There was a hidden hand that guided them. If a market was failing any restrictions on its activities should be removed so it could fix itself. They called this ‘liberalisation’.
Regulation by government, the body representing citizens, was condemned. Individuals were seen as essentially knowledgeable, rational, self-interested and so effective customers. There was no provision for ignorance, vulnerability or selflessness.
Almost everything we already knew about markets, about societies and human behaviour was ignored as were the many advances in our understanding of the ways humans and societies behaved during the rest of the 20th century. Belief trumped evidence and logic.
Expansion
Originally a fringe group they formed the Mont Pelerin Society where economists who were supporters gathered and refined their policies. The movement spread as think tanks were established across the world. The ideas were popular among businessmen who smarted under the restrictions and accountability requirements imposed on markets after the great depression.
Conservative politicians and libertarian movements welcomed these ideas. An author and philosopher, Ayn Rand promoted self-interest as a virtue, condemned selflessness and described altruism (concern for others) as a disease imposed by society, which she called ‘the collective’ and attacked.
We can glimpse the impact of these patterns of thinking in some of the things that happened in the USA and in Australia (eg. aged care) in the 1960s and subsequently. These ideas came to dominate the western world after the election of Thatcher and Reagan. Schools of management adopted the new thinking and management strategies. They spread these patterns of thinking into businesses, government services and society across the world.
The belief system
This belief system has been called neoliberalism, economic rationalism and free-markets. The first is the best term because it extends beyond markets and economics. It is based on a new way of understanding human beings, society, government and markets and the way they interact. When we do something so fundamental all of them change but, because the consequences are not immediate, we do not recognise it.
Vulnerable sectors like health and aged care have not been excluded. Australia became a keen follower of the USA. The words of those who embraced this system in the USA and Australia illustrate the problem
There were many warnings in the USA. Doctors like Professor Relman and social analysts like Robert Kuttner spoke out about what would and then did happen in health care.
Health care In Australia: Doctors were aware of events in the USA and like our politicians, had read Califano’s book. They warned but politicians ignored them. Governments tried to bring in several massive US mega-corporations to subjugate our medical profession in the same way as the USA.
Citizens who saw what was happening collected data from the USA and supplied it to state probity regulators. They were charged with deciding whether companies were fit and proper to provide health care. Over a 10 year period during the 1990s state probity assessors performed well under pressure from politicians and big business. None of these companies now own hospitals in Australia. One was an aged care company.
When in 1998 government attempted to follow the US in forcing doctors into contracts that limited their control over care, doctors resisted and were vilified and threatened. They won after a bitter conflict with the minister for health.
When Australia’s largest for-profit hospital company started down this path in 2002 doctors took their patients elsewhere and put it out of business.
The lesson for aged care: There is a clear message from all this. United the doctors had the power and legal capacity to challenge government and did so. The big hospital corporations had two customers. The one was vulnerable and powerless. The other had market power and used it to protect the system and their patients by putting those who threatened care out of business. They had a common interest in stopping this even though the patients who were powerless did not realise it.
United communities have the power to challenge government. If they had the same market power in deciding who provided care in their communities and used that effectively, they too could protect the system as well as their elderly members. This is what Aged Care Crisis has been advocating for. This is a model we can follow.
In 2004 Canada was also under strong pressure from economists and businessmen to marketise and corporatize its health and aged care systems. One of Aged Care Crisis members was invited to give a presentation ‘Australia's Experience with Health Reform: Are there lessons for Canadians?’ to the ‘Consumers' Association of Canada’ in Alberta to which senior members of the Canadian Medical Association were invited.
In that lecture he examined the perverse forces at work in the health and aged care marketplaces, described how these forces had played out so disastrously in the USA and how Australian doctors and citizens had responded and contained these forces but not yet eliminated them. The comments are equally applicable to aged care
Aged care in Australia: When Paul Keating wanted to pursue this path in aged care the Gregory 1993 report warned against it. Keating headed the warning but John Howard ignored it. After he defeated Keating in 1996, he worked with industry to redesign the system.
Senator Gibbs made a prophetic speech in parliament in 1997 warning of the consequences of these policies. The Royal Commission has described the consequences but we do not think that it has adequately analysed or addressed the problem in its report. As we explain later this would have been very challenging for them.
The structure of the new system
The new system has redefined the way that we understand ourselves, our society, our markets and our government. This has had profound consequences for the sort of people and the sort of society we have become.
Civil society
Civil society is critical for a functioning democratic society, for our humanity, for resilience, for nurturing and building effective leaders, for restraining antisocial behaviour, and for holding politicians and markets to account. This new belief system has seen society, which it called ‘the collective’ as a major problem and a threat to individuals and markets.
Civil Society has been pushed aside and its role taken over by managers. It has been managed and manipulated by government and industry. Instead of being central to our lives, it has withered and become fractious.
Society is in poor shape, unable to nurture and create responsible citizens who embrace community values and empathic relationships. Self-interest goes unchecked. What was happening to society was already clear in 1995.
Eva Cox was a strong critic and in her Boyer lectures ‘A TRULY CIVIL SOCIETY’ she addressed this issue arguing that increased competition and an excessive focus on economic capital was coming at the expense of social capital. She writes about trust as something that is intrinsic to a civil society and foreign to markets.
In 2021 we are facing a crisis of trust within society and aged care is a good example. Those we trusted to care for us have deceived us in unconscionable ways. Some quotes are relevant
These authors even describe why it is so difficult for those, like the two Royal Commissioners, who have been a part of this system to challenge it and give this feared ‘collective’ a controlling role in aged care. On page 285 they say”
“To question these forces puts the questioner at risk of being labelled anti- progressive, unrealistic, insufficiently corporate, uncooperative or all of these”.
In 2015 Eva Cox wrote critically about continuing damage to social stability and cohesion and way government was focusing on consumers rather than “policies that rebuild community trust and reassure voters that their quality of life does require collective goodwill, not just growing GDP”. At the same time in 2015 others were
- writing about un-confronted pressures to reform democracy describing the situation as “a stalemate seeking a solution” (that stalemate persists today), and
- questioning why there was “no serious discussion on the relative roles of governments, markets and communities in delivering goods and services for the nation” and warning of the “risks that toxic populist movements” similar to those of the 1930’s would develop. This was only a year before President Trump was elected in the USA.
With the system of belief now itself under threat, for believers, the threat of “the collective” is greater than ever.
The price we pay: As a society we are still paying a huge price for ignoring these dire warnings and not acting on them. What is even more disturbing is that when these arguments were made to the Commissioners inquiring into aged care, they simply ignored them.
But if we look around we see that many more in our universities and our societies are now questioning the status quo and writing about it. We need to understand that those who have created the present system and believe in it see their critics as a threat and not credible. When the system fails they are overlooked and not appointed as Commissioners, advisers or invited to contribute as witnesses.
Other possible consequences: A functioning civil society builds trust and social capital and it does so through personal relationships. It is readily apparent that there has been a breakdown of relationships and trust in our society.
We seem to have created a society that sets the stage for multiple problems and is poorly equipped to address them. The media describes and there are calls for action and funding to combat sexism, ageism, abusive relationships, alcoholism, drug addiction, a rapid rise in mental health and suicide in the young, psychological problems, radicalisation, terrorism and more.
Could these be symptoms of a damaged society that no longer fosters supportive relationships and so is unable to engage and support its members and confront aberrant ideas before they become entrenched?
Government
The philosophy of small government and a hands-off supportive role for government has seen the once independent bureaucracy drastically reduced in the name of efficiency. It has been tamed and made subservient by appointments from industry, a revolving door of industry advisers, consultants, contracted market investigators and policy advisers. Adam Smith’s advice about “an order of men ... who have generally an interest to deceive and even oppress the public” has been ignored as industry and government have become ever closer and read from the same page.
The hands-off approach and ‘liberalisation’ of the market from regulation and close oversight has seen a number of processes, like accreditation and governance adopted in attempts to induce industry to regulate and control itself. They have been singularly unsuccessful in combatting the strong perverse pressures within markets. In situations like this words and processes become tokens – a visible substitute for what is intended but not there.
The government has lost capacity and is now dependent on market entities to help it govern the country. Political party’s electoral campaigns are also dependent on support and large donations from vested marketplace interests who also lobby.
The market
The market has become ascendant and the driving force in our society. Non-profit, government and societal organisations are organised and managed along similar market lines. Economic success has become the measure of performance and the justification for policy and action.
Those who succeed become credible, confident and difficult to challenge. Lavish salaries and bonuses based on performance have become a measure of status and authority. Those who are so successful have no doubts and they are blind to the consequences of what they are doing.
Many are now aware of the problems
If we look around we see that many more in our universities and our societies are now questioning the status quo, writing about it and looking for a new road to follow that includes greater community involvement.
The movements to rebuild society through greater community involvement are not new. They use terms like deliberative democracy, participatory democracy, neighbourhood democracy, and open democracy,
Politicians, businessmen and others who have built their lives using free market thinking will be challenged by these ideas. They will not see these movements as credible. Those who adopt them are not appointed as Commissioners or even advisers. They are not invited to contribute to the discussion.
Understanding the Royal Commissioners and their report
Current Government’s see aged care as a market rather than a human service. It is not surprising that the current coalition government appointed those with market expertise rather than caring experience as commissioners. These are people who see and understand the system in the same way they do. Those who see it differently are not seen as reliable or credible.
One Commissioner was a long-term bureaucrat working with government in managing and interacting with the market. She is an expert in governance processes. The two judges appointed had expertise in tax, commercial law and industrial disputes. They too would approach aged care as a market.
When people have invested their lives and careers in a particular pattern of thought, built their careers using them and condemned alternatives, admitting that everything you have believed in and done was misplaced and harmful is enormously challenging. Social scientists have written books about what has been called ‘Wilful Blindness’ or sometimes ‘Strategic ignorance’. This explains why when challenged by evidence we can know things but simply cannot admit them even to ourselves.
It is not surprising that these Commissioners would have come with very negative attitudes towards any control by community. We can understand why they, like the 31 other failed inquiries over the last 20 years, have avoided this issue like the plague.
In the 1980s inquiries were comfortable in recommending and pressing for regional control and for community to be involved in oversight. We have explained how attitudes have changed since then.
The Commissioners would have had difficulty in advising increased regulation and accountability, but they have tried to do so within the governance framework. There is a great deal about accountability and data collection in their report.
We worry that much of this, particularly that relating to care will be self-reported and may not in practice be properly and independently verified. Avoiding burdensome regulation has been central to belief and at the heart of policy.
The Commissioner’s strong focus on governance is understandable, but in failing to involve civil society and communities, they have once again failed Australia and its citizens. We might describe what we are advocating for as ‘community governance’ but that is seldom listed among the types of governance.
It is interesting that while recommending probity assessments for provider and key personnel, probity requirements for owners, abolished in 1997 were not brought back by the Commissioners. International and local research has shown that ownership is one of the most important factors in outcomes. Probity regulation challenges the free market belief that markets should be liberated.
Commissioner Pagone also has an arts and humanities background with an interest in human rights. He displays a greater insight into what is happening and supports regional management in his recommendations. That there are major differences of opinion between the Commissioners and in their recommendations is not surprising.
