Income inequality, lowered social cohesion and the poorer health status of populations: the role of neo-liberalism

By David Coburn, 28 May 1999

The relationship between neo-liberalism and social cohesion/trust:

A strong argument can be made that neo-liberal doctrines are antithetical to social cohesion or to social trust. The image of society which neo-liberalism carries with it is that of voluntaristic possessive individualism (Macpherson, 19 ).The most appropriate relationship is that embodied in contracts reflecting varied material interests. In the neo-liberal view, societies are not more than the sum of their parts. As Margaret Thatcher asserted, there is no such thing as society only individuals or families. Whereas in previous liberal theory the state is viewed as at least partially representative of the general interests of society, in the neo-liberal perspective the state should have as small a role as possible. Not much is said by many neo-liberals, however, about corporate monopolies or oligopolies although thoroughgoing neo-liberals i.e., libertarians (utopian capitalists) claim to want to break up such market hindrances.

As noted, the neo-liberal vision is individualistic rather than collectivist or communitarian. There is a stark divide between collectivist views of society, including the notion that goods can be held in common, and market ideology.Thus, the first act of many contemporary neo-liberal regimes has been to privatize state organizations or functions and those which might be said to have been included in the commons. Privatization in fact means the individual ownership of what were once possessions or functions of the state as representative of society, or of those things which were previously viewed as the possession of everyone (including natural products, land, fish, etc). As noted earlier even in the era of the welfare state the liberal versions of the Keynesian Welfare State (KWS) were characterized by insurance or targeted versus universal or citizenship oriented social or other programs.In that sense, then they bracketed or excluded low income groups from the rest of society.

The very notion of citizenship as carrying with it particular rights is an inclusionary concept. The implication of universal citizenship measures is that we are all members of the same society and we should all benefit. Targetted programs are exclusionary in privatizing the negative effects of market mechanisms.The implication of targetted programs is that individuals and families are the issue, not the structure of opportunities within that society.Yet, as noted earlier, during the life-course de-commodification makes critical periods less likely to have negative consequences. These crises include periods of inability to earn and income. Wilkinson himself remarks that: Indeed, integration in the economic life of society, reduced unemployment, material security, and narrower income differences provide the material base for a more cohesive society. (Wilkinson, 1997: 319).

Neo-liberals generally view anything in the public sphere as something which would benefit from privatization. Some of the results of these individualist notions may be reflected in attitudes towards private versus public property or goods.That is, what is private is valued and what is public is denegrated. What is mine is valuable, the rest is not mine or not ours either hence is of little concern.

Given the absence of a broader sense of community, neo-liberals advocate individualistic market based solutions to problems. Thus, gated communities and private security guards as a response to crime, private health insurance as a response to the increased health needs of an aging population. There is an emphasis on private versus public transportation, private versus public schooling, private versus public health care. Reducing the size of government means reducing government expenditures. Neo-liberals strongly favour lower taxes (see Raphael, 1999). Given the use of government revenues in various measures which redistribute income then lower taxes imply increased inequality but also imply a privatizing or individualizing of societal risks and opportunities. Even given obvious societal inefficiencies as, for example, in the U.S. health care system, neo-liberals prefer private to public expenditures. Wilkinson neatly captures the essence of neo-liberalism in the notion of a cash and keys economy:

Increasingly we live in what might be called a cash and keys society. Whenever we leave the confines of our own homes we face the world with the two perfect symbols of the nature of social relations on the street. Cash equips us to take part in transactions mediated by the market, while keys protect our private gains from each other’s envy and greed. . . Although we are wholly dependent on one another for our livelihoods, this interdependence is turned from being a social process into a process by which we fend for ourselves in an attempt to wrest a living from an asocial environment. Instead of being people with whom we have bonds and share common interests, others become rivals, competitors for jobs, for houses, for space, seats on the bus, parking places. . . . Wilkinson, 1996: 266 cited in Nettleton and Burrows, 1998).

In light of this quote it is interesting that income inequality, and social trust have been found to be highly related to homicide and violent crimes (Wilkinson and Kawachi, 1998). In fact, removing homicide greatly reduces the income inequality—health relationship. The importance for health of the type of social disorganization associated with violent crime is thus emphasized.

The absence of any concept of the social in neo-liberalism is related to neo-liberal views which imply the universalizing of market characteristics to all areas of human existence.Even the self comes to be viewed in terms of its market use.In an enterprise culture the self is seen interms of its usefulness on the market as an instrument for economic advancement.Social development becomes individual human capital.The importance of those aspects of social capital, aspects of the social environment which benefit everyone, are downplayed or ignored.Society is thus reduced to a collection of individuals in which the whole is simply the sum of the individual parts.Privatization and the lack of (non-contractual) connections amongst citizens, implies a generalized increase in scepticism or distrust towards one’s fellows. If everyone is legitimately seeking their own economic self-interest, as neo-liberalism implies, then there is reason for widespread suspicion of the motives and intentions of others rather than trust. There might be an increasing emphasis on self-aggrandizement at the expense of collective goals, an increasing contempt for public institutions and a lack of support for those organizations through which collective notions are expressed, maintained, or reproduced.

Furthermore, since markets are efficient (and just) allocators of rewards, then economic or social problems are attributed to individual failings. If markets give people what they deserve there is likely to be an increase in individual blame and an inclination to punish rather than help others. Thus, recipients of social welfare measures are welfare bums.As Sennett and Cobb indicate there are many, relatively non-visible injuries of class (1973).

While it has been asserted that neo-liberalism produces a lowered sense of community it might also be argued that the rise of neo-liberalism is itself a signifier of the decline of more widespread feelings of social solidarity. The political rise of neo-liberalism is freighted with a more individualistic view of society and, perhaps, itself reflects a decline in the notion of we are all in the same boat. Not only do neo-liberal policies undermine the social infrastructure underlying social cohesion but neo-liberal movements themselves are partial causes of the decline of a sense of social cohesion.

Thus the proposition:
The more market-oriented the society, the lower the collective organization and the lower the social cohesion and trust.