Farewell to equality?

Don Arthur

We like to think that every child has an opportunity to develop their full potential, regardless of whether they're born into a leafy suburb or a run-down public housing estate. That's what most Australians mean when they say that they believe in egalitarianism. In a recent column for the Sydney Morning Herald, Michael Duffy argued that the dream is now a reality - Australia is a meritocracy where 'poor people with brains and energy are quickly assimilated into the establishment.' Is it true? Economist Fred Argy thinks not. And unless we change course soon, the level of equality of opportunity we enjoy now will become a thing of the past. In April 2006 the Australia Institute published Argy's discussion paper Equality of Opportunity in Australia: Myth and Reality. I spoke with him by email about his paper and about the future of egalitarianism in Australia.

Equality of opportunity

For Argy, equality of opportunity means:

...a situation where everyone is able to develop their full potential irrespective of the original circumstances of their birth and childhood and where a person's economic prospects are determined overwhelmingly by their own ability and character.

While this egalitarian ideal seems to be widely shared among the Australian public, Argy finds himself having to justify the idea to commentators on both the right and the left. The hard left 'think that I am not focused enough on equality of outcomes' he says. And on the right, hard-line economic rationalists who accept that 'there are merits in trying to equalize opportunities, are not prepared to take the slightest risk with the economy.' Other left-leaning thinkers - like Clive Hamilton - are more concerned with the environment and broader concepts of well-being than they are with economic opportunity. 'They see me as a soft-edged neo-liberal too preoccupied with pursuing both equity and efficiency when neither of these do anything for happiness', says Argy.

"According to Argy, Australian policy makers are increasingly embracing the US social model."

On the right, free market libertarians - many of them followers of economists like Friedrich Hayek and Milton Friedman - 'treat equality of opportunity as a meaningless concept.' Other right wing thinkers, like the Centre for Independent Studies' Peter Saunders, argue that economic outcomes are largely the result of hard work and talent. Saunders argues that Australia already has a high degree of equality of opportunity and that the country is very nearly a meritocracy. It's the view echoed by Sydney Morning Herald columnist Michael Duffy in his recent opinion piece. But Argy argues that Saunders and his supporters ignore the advantages parents are able to pass on to their children - advantages that children from less well off households miss out on.

The importance of social mobility

"Over the past thirty years or so' says Argy, 'a good proportion of young Australians from low-income backgrounds have been able to move up the social hierarchy during the course of their lives." Social mobility is higher here than in Britain or the United States and many Australians have become complacent. "What people don't fully realize," he says, "is that policy norms are changing dramatically in Australia". And unless we act now, it's going to be much harder for young people from low income families to work their way up.

Learning from America

According to Argy, Australian policy makers are increasingly embracing the US social model. And while America "has one of the most open, deregulated and dynamic economies in the world", it lags behind many others in income mobility. Scandinavia and smaller European countries like the Netherlands do much better. Worse still, he says, "On some estimates, the USA stands out as one of the few countries showing declining social mobility." The problem starts before children have had a chance to develop the basic skills they need in order to make the most of education. "There is poor access to affordable, high quality early education where children build reading, cognitive, verbal and social skills" says Argy. "Public schools are denied adequate funding." Children from well off families are able to develop their abilities in a way that those from less well off families cannot.

Warning signs

In Australia Argy also sees a two-tier system developing with middle class parents abandoning an overstretched public system in favour of private schooling - an option not available to those on low incomes. And even before children reach the classroom, many of those from low income families and rural and remote areas are missing out on the advantages of preschool. "Yet we know that early childhood education and care contributes greatly to children's emotional and cognitive development, economic well-being and health and that those who go through preschools perform better at secondary school" says Argy.

Is egalitarianism out of fashion?

Despite its status as a core Australian value, egalitarianism seems to be out of fashion with Australia's opinion leaders. "Key opinion makers (including sections of the media and business) keep telling the public that a significant increase in social spending will hold back economic growth and average living standards" says Argy. And while these experts tell us that equality will send us a broke, others, like the researchers at the Centre for Independent Studies, tell us that demands for equality are nothing but envy dressed up as social justice. Even on the left, thinkers like Clive Hamilton seem more worried by the overconsumption of the rich than they are with the life chances of the poor. "I feel at times as if I am arguing with the whole world", he says.

Could it be that Australian values have changed? Argy suspects that some values are changing. 'The tough competitive environment is hardening people's social attitudes to passive welfare' he says. 'Although Australians want governments to alleviate poverty and assist the aged and sick, they seem less supportive than ever of the idea of handouts to able-bodied people.' But support for handouts is one thing, support for hand-ups is another. Argy believes there is still a 'strong reserve of public sympathy' for equality of opportunity.

Some of Australia's peak bodies have reached the same conclusion. In 2002 the Brotherhood of St Laurence reported the results of their Values and civic behaviour in Australia study. They found that equality was a value shared by the majority of the study's participants, regardless of their socio-economic status, educational attainment or family background. And when the Business Council of Australia (BCA) commissioned a study of Australian cultural norms and values as part of its Aspire Australia 2025 scenario planning exercise, the report's authors drew on the Brotherhood's findings and noted that Australia's egalitarian values, 'have largely resisted recent trends and cultural influences that stress the market economy and global integration, and its emphasis on individual goals) over local, shared interests.' But according to the BCA study's authors, the most likely future for Australia is 'Me World', a scenario where Australians become increasingly self-interested and egalitarianism becomes irrelevant. In 'Me World' 'inequality is more accepted and Australians are reluctant to support programs to provide equal outcomes for all Australians.'

So perhaps the response to Argy's recent paper is a foretaste of things to come. Equality of Opportunity in Australia: Myth and Reality - seemed almost to vanish without a trace. And if the scenario planners are right, old Australia's commitment to egalitarianism may follow.

Don Arthur is currently completing a PhD on free market think tanks and the politics of poverty, and is a regular contributor to weblog Club Troppo.


Fred Argy, Equality of Opportunity in Australia: Myth and Reality, The Australia Institute, Discussion Paper Number 85, April 2006 (106 pp, $21).

Business Council of Australia, Australian Cultural Norms and Values, Research paper for the Business Council scenario planning project, 'Aspire Australia 20025'.

Michael Duffy, "Rich, Smart and Isolated: Meet the New Aristocrats" Sydney Morning Herald, December 2-3, 2006.

Read the companion piece on the Evatt site:

Read Fred Argy's chapter "Fiscal policy for the future" in the The State of the States 2006:

Also on the Evatt site: