POLI 359 Public Policy Making Session 2-Ideology and Public Policy Lecturer: Dr. Kuyini Abdulai Mohammed, Dept. of Political Science Contact Information: akmohammed@ug.edu.gh College of Education School of Continuing and Distance Education 2016/2017 godsonug.wordpress.com/blog
What is Ideology? Ideology is a set of ideas or beliefs that underpin a social, economic and political system. Ideology is a worldview that allows an individual or group both to interpret the way things are and to suggest the way things ought to be. Ideologies are guides to political action that give us ideal to believe in, goals to strive for and tell for what causes to fight. Ideology is a collection of ideas held by an individual, group or society. Slide 2
What is IdeologLJ? ;ĐoŶt d: Ideology is a set of conscious and unconscious ideas that ŵake up oŷe s ďeliefs, edžpeđtatioŷs aŷd motivations. Ideology is a comprehensive normative vision that is followed by people, government or other groups that is considered the concrete way by the majority of the population. Ideology is a said of ideas proposed by the dominant class of society such the elite for all members of society. Ideology is a system of abstracted meaning applied to society thus making this concept central to politics. Slide 3
Ideology and Policy Prescriptions Different ideological viewpoints offer dissimilar policy prescriptions on: The balance between individual and collective rights and responsibilities in society The relationship between women and men and the nature of the family The virtue of the market economy and the acceptability of economic inequality and poverty The importance of domestic processes and participation The relationship between human civilization and nature Slide 4
Market Focused Ideologies Market focused ideologies stress the importance of free market. They advise against state intrusion and control A pioneering articulation of this view emanated from the French term Laissez-faire. Laissez-faire literally means leaǀe theŵ to do. Laissez-faire was first used in the 18th Century as a sanction against government interference with trade. In laissez-faire viewpoint, the state s role is eŷsure that nothing interferes with the working of the market. Slide 5
Libertarianism The laissez-faire doctrine is referred to as libertarianism. Libertarianism advocates a free market view. It argues that capitalism will be a panacea to inefficiencies than government intervention Adam Smith, one of the fathers of economics identifies with libertarianism. Smith argues that the iŷǀisiďle haŷd of the market will guide people act in their self-interest. The self-interest behaviour produces spontaneous social order that secures the public interest. Slide 6
LiďertariaŶisŵ ;ĐoŶt d: Smith argues that the uninterrupted market is the generator of wealth obstructed only by government intervention. However, Smith conceded that not all areas can be entirely left to the market. Areas like national security, individual security, and public works cannot be efficiently provided by the market Libertarians trust in individual responsibility. They believe the state should only intervene to protect citizens from coercion, interference and discrimination. Slide 7
LiďertariaŶisŵ ;ĐoŶt d: Libertarians insist on the state providing only negative rights. Negative rights refer to the system of justice and associated law, order and protective services such as the police, courts, prisons, probation and rehabilitation services. There is thus minimal need for public finance. Libertarians argue that there is no such thing as social justice. A persoŷ s life ĐhaŶĐes are as a result of ŵarket outcomes. Slide 8
LiďertariaŶisŵ ;ĐoŶt d: These outcomes may be fortunate for some and unfortunate for others but they are not unfair. TheLJ siŵpllj refleđt aŷ iŷdiǀidual s iŷŷate aďilities to earn a livelihood through flair, initiative and hard work. Charitable work rather than state action should be relied upon to help those who are unfortunate in lacking innate abilities for self support. To libertarians: There is no moral case for equality There is no such thing as society Slide 9
LiďertariaŶisŵ ;ĐoŶt d: There is no need for modern welfare state There is no need for public finance and public policy (other than law and order, defense and to relieve destitution) Rather the private sector should provide individuals and their households with services they are willing and able to pay for. Libertarians contend that state intervention is counter-productive. It stifles individual initiative and destroy charitable giving. Slide 10
LiďertariaŶisŵ ;ĐoŶt d: State intervention establishes a dependency culture. Dependency is worsened by moral hazards whereby individuals change their behaviour as a result of: being insured. being less cautious vin their attitudes and response to risk Libertarians insist that governments cannot be trusted to act responsibly. They claim that the state is corruptible They believe governments operate for their own sake rather those they are meant to serve. Slide 11
Neo-Liberalism The resurgence of laissez-faire economics was variously termed as: Neo-classical economics Neo-liberalism Neo-conservatism The New Right Economic rationalism Neo-liberalism is an offshoot of libertarianism. focus is on individual rights and freedom. Slide 12 Its
Neo-Liďeralisŵ ;ĐoŶt d: Neo-liberals contended that by the end of the twentieth century there was too much government This was evident in several important respects: Governments were taxing too much, thereby penalizing those generating wealth. Government were borrowing too much, thereby reducing the amount of capital available. Governments were spending too much, e.g. on social services. Governments were regulating too much investment fell. Slide 13
Neo-Liďeralisŵ ;ĐoŶt d: Governments were doing too much, although private enterprise was believed to be more efficient Governments were providing too much protection: Tariffs and other regulations were making the market less efficient. Some business sectors were less competitive. Slide 14
Neo-Liberal Solution to Big Government Lowering taxes, flattening the tax structure and taxing consumption rather than income Budgets surpluses should be used to retire debt rather than spending on public services and infrastructure Reducing government expenditure, particularly on welfare and social services Reducing legislative safeguards in areas such as health and environmental standards Slide 15
Neo-Liďeral s SolutioŶ to Big GoǀerŶŵeŶt ;ĐoŶt d: Selling of government business enterprises to private owners. Reducing or eliminating tariffs and other trade barriers Abolishing centralized wage fixing Deregulating markets to allow competition to determine prices. Slide 16
Defining Features of Neo-Liberalism Primacy of the individual Modified markets Negative plus limited positive rights Enabling state Mixed economy Slide 17
Beliefs of Neo-Liberalism The state is a necessary evil Taxation for efficiency Promotion of human capital Equality of opportunity Property rights reflect policy aims Slide 18
General Implications of Neo-Liberalism Weak conception of society Modified market rights Individuals primarily consumers State supplements charity or voluntary action Slide 19
Implication of Neo-Liberalism for the Public Sector Heavily constrained state Some limited positive rights Private or public sector provision Conditional welfare state Public plus private insurance Slide 20
Implications of Neo-Liberalism for Public Policy Restricted public finance Seek additional public spending Tadž bads Ŷot goods for effiđieŷđlj Introduction of proportional taxes Borrowing for efficiency purposes Slide 21
Limitations of Neo-Liberalism IŶdiǀidual s rights to state assistaŷđe is ĐoŶtiŶgeŶt upoŷ responsibilities for self sufficiency The state is not a definite recourse in terms of need Equality of outcomes will not be achieved People s iŷŷate aďilities, flair aŷd ǁork effort ǀarLJ Neo-liďerals ĐoŶĐeptioŶ of sođietlj is Ŷot eŷđoŵpassiŷg It is unclear whether state intervention makes markets work better or worse Neo-liberalism produced weakness in both culture and civil society Slide 22
Socialism (Collectivism) Socialism preached a contrasting view to liberalism. It advocates a state controlled by the people. It was occasioned in the nineteenth century by inequality. The exploitative nature of capitalism. Invocation of a revolutionary transformation of the state Karl Marx and Friedrich Engels were the architects of socialism. The mode of production influences power relations. Slide 23
SoĐialisŵ ;ColleĐtiǀisŵ ;ĐoŶt d: Socialists argue that capitalism is unjust because the means of production is owned by a few elites. These elites exploited the working masses. The masses sold their labour but had no control over the distriďutioŷ of sođietlj s resourđes aŷd benefits. Marxists believed that the exploitation of labour would provide the motivation for a revolution to overthrow capital. Ownership of the means of production influences the distribution of power and resources. Slide 24
SoĐialisŵ ;ColleĐtiǀisŵ ;ĐoŶt d: Socialists predicted the revolution to eliminate class and private property. Class and property would be replaced by a social and economic system controlled by the people. The revolution has not occurred and classes still exist. Owners of capital are still few. However, issues about equity and equality have become salient. Labour power is boosted by unionization and threats of industrial action. People have full not limited positive rights as citizens. These are in addition to negative rights as consumers. Slide 25
SoĐialisŵ ;ColleĐtiǀisŵ ;ĐoŶt d: Only the omniscient and benevolent state can provide for such extensive social and economic rights. Thus markets have to be directly controlled by the state. State control is intended to ensure equality of outcomes. Private property rights are replaced by social ownership. Private profits must be at the expense of social welfare. The state cannot be a passive onlooker while markets allocate resources by chance. Slide 26 Equality of opportunity cannot secure socially
Socialism ;ColleĐtiǀisŵ ;ĐoŶt d): Those outcomes cannot be assured by the enabling state of neo-liberalism. The state rather should be a provider state. The attendant collective benefits more offset the associated moral hazards and dependency culture. Public policy is uncontrolled as is public finance. The state planning is more effective than modified or unfettered markets Thus social rather than economic welfare is the approach to public policy Public policy is geared in favor of disadvantaged and low income groups. Slide 27
Defining Features of Socialism There is mutual dependence There is rejection of markets Full positive rights exist The state is a provider state Collectivism rather than individualism is emphasized Slide 28
Beliefs of Socialism: The state is a benevolent state. Taxes are raised to meet social objectives. There is building of social capital. Equality of outcomes are emphasized. Property owning is theft. Slide 29
General Implications of Socialism Society is emphasized. State confers rights. Citizens come first before anything else. The state replaces charity. Slide 30
Implications of Socialism for Public Policy The state is expansive. There exist positive rights. There is public sector provision. Welfare is unconditional. There is public insurance. There is unrestrained public finance. Public spending replaces private spending. Redistributive taxes is instituted to achieve equity. The tax structure is progressive. Borrowing is for financing welfare. Slide 31
Social Democracy Social democracy grew out of the socialist movement. Social democrats believe capitalism can reformed rather than overthrown. The overthrow can be done democratically through change. The change will occur through state regulation and addressing inequality. Social democrats insist on the state expanding its role iŷ the eđoŷoŵlj. The state s role ĐaŶ ďe edžpaŷded through regulation and redistribution of wealth. Slide 32
SoĐial DeŵoĐraĐLJ ;ĐoŶt d: Social democrats neither accept a purely market oriented economy or a centralized one. Rather, they advocate a mixed economy. The mixed economy has private enterprise complemented by public enterprise Provision of social services and redistribution of wealth is emphasized. The Social democratic state is exemplified by Sweden. This is because the country has a mixture of high taxes and extensive social welfare system. Slide 33
SoĐial DeŵoĐraĐLJ ;ĐoŶt d: The NDC in Ghana considers itself as a social democratic party. The NDC especially under President Mahama had a mixture of high taxes and provision of social infrastructure. Social interventions of the NDC included FCUBE, LEAP, School Feeding Program, Free School Sandals Program. John Maynard Keynes is the most influential thinker in the state focused school. He called for an interventionist state to stimulate the economy in periods of unemployment. The view was that a given level of demand would produce a corresponding level of employment. Slide 34
SoĐial DeŵoĐraĐLJ ;ĐoŶt d: Keynes, however, pointed out that low unemployment during the depression resulted from low demand. Aggregate demand in an economy is the sum of consumer spending, private investment and government spending. Keynes contended governments could deal with recessions by increasing demand. According to Keynes, recession can be addressed by reducing taxes to spur consumer or investment spending and increasing governments oǁŷ spending. Slide 35
SoĐial DeŵoĐraĐLJ ;ĐoŶt d: Application of Keynesian prescriptions dealt with the recessions and resuscitated ailing economies. Keynesian fiscal policy was successfully put to test during J.F. Kennedy administration in the US in 1961. Keynes radical ideas influenced modern economic and political thought. Governments began to increase taxation. Governments also introduced a variety of social programs. These programs aimed at addressing inequalities The high point on Keynes views is the transformation in our understanding of welfare and redistribution. An interventionist state provides benefits for all. Intervention creates wealth and welfare is improved. Slide 36
SoĐial DeŵoĐraĐLJ ;ĐoŶt d: Laissez-faire policy existed prior to the great Depression. Laissez-faire economists believed that an economy would automatically correct its imbalances. The correction brings about equilibrium in the economy. Demand and supply forces make the economy adjust to inflation without government intervention. Laissez-faire economists see lay-offs, bankruptcies and down turns as things not be avoided. They are part of the natural process of adjustment. The adjustments will restore equilibrium in the economy. Slide 37
SoĐial DeŵoĐraĐLJ ;ĐoŶt d: Government action was less likely to alleviate suffering. It cannot revive economic activity. Rather, it will disrupt the natural restorative powers of the market system. These prediction did not come to pass since the Great Depression wretched havoc in industrial economies. Aggregate spending was very low. Unemployment increased sharply. These problems provoked a rethink of the role of the state in the economy. Slide 38
SoĐial DeŵoĐraĐLJ ;ĐoŶt d: Keynesianism is at odds with capitalism with two contrasting ideas were cobbled together-welfare state measures like health for a healthy workforce and measures concerned with the redistribution of income. This cobbling of opposing ideas posed a risk to capitalism. It was also dangerous to free markets However, the forces of capitalism have won the battle while the welfare state has fallen into disfavour today. Slide 39