Concepts in Social Administration

A framework for analysis

Anthony Forder

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781000553086
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Public Affairs & Administration
• Index: Politics & International Relations

First published in 1974, Concepts in Social Administration draws on a wide range of theoretical disciplines to examine a number of concepts which are basic to the study of the social services individually and as a whole. The topics discussed are of vital importance to students of social administration and include the relationship between welfare capitalism and the social services, the definition of need, the distribution of resources, professionalism and the structure of the social services, and the question of consumer influence and the balance of power in the provision social services.

Designed especially for teachers and students of social administration, this is a lucid exploration of the philosophy and concepts which are relevant to the discipline of social administration. It offers a framework for the subject which transcends the study of individual services on which most of the literature is based.

Chapter 1 Welfare capitalism and the social services

DOI: 10.4324/9781003272984-1

Summary of the argument

The term ‘Welfare State’ is an inadequate description of our society. It puts undue emphasis on one particular aspect of that society which distinguishes it from British society in the nineteenth century. In fact our society attempts to combine three systems based on different principles; a capitalist system based on the economic market, a democratic political system, and a welfare system.

The capitalist market economy which dominated the organisation of society in the nineteenth century has important advantages as a system for distributing resources and delegating decision-making powers. It has certain serious disadvantages, which the democratic and welfare systems, particularly the latter, are intended to counteract. However, the systems are based on different value principles which to some extent are in conflict.

Social administration is concerned with the study of the welfare system, and particularly the government-sponsored social services. It is therefore concerned with the problems of relating needs and resources in contrast to the capitalist market economy which relates supply with demand that is backed by monetary resources. By examining in subsequent chapters the implications of certain concepts it is hoped to throw light on some fundamental problems in the social services that affect the distribution of resources and the distribution of power.

‘The Welfare State’

It is perhaps natural that when change occurs in any situation attention should be focused on what is new rather than on what remains unchanged. So the acceptance of the term ‘the Welfare State’ to describe post-war British society reflects the new emphasis on state responsibility for social welfare and ignores the elements of social organisation that show continuity with the past. Penelope Hall epitomised this approach when she wrote:¹

The distinguishing characteristic of the Welfare State is the assumption by the community, acting through the State, of the responsibility for providing the means whereby all its members can reach minimum standards of health, economic security and civilised living, and can share according to their capacity in its social and cultural heritage.

Slack² has examined a number of approaches to the definition and assessment of ‘the Welfare State’, and most of these follow the same pattern, taking the nineteenth century as the point of reference and concentrating on differences. By some, and particularly by its supporters, the Welfare State is seen as the culmination of a long process to right the errors and injustices of nineteenth-century laissez-faire capitalism. To others it is an attempt to modify ‘the normal play of economic forces in a market economy’,³ a phrase which implies an acceptance of the nineteenth-century concept of economic forces whose operation is somehow ‘more normal’ if it takes place independently of human, and, in particular, government decisions about social objectives.

Piet Thoënes⁴ puts this into perspective by defining the Welfare State as ‘a form of society characterised by a system of democratic government sponsored welfare, placed on a new footing and offering a guarantee of collective social care to its citizens, concurrently with the maintenance of a capitalist system of production’. This definition includes aspects of our social system which show continuity as well as contrast with the nineteenth century, notably democratic control and capitalism. Thoënes still accepts the term the Welfare State, but the definition suggests that ‘welfare capitalism’ might be a more accurate designation for this form of society, or even, if it was not so cumbrous, ‘democratic welfare capitalism’, as Marshall has suggested.⁵

As Thoënes points out, this approach makes possible a broader comparison with other forms of society such as feudalism or socialism, as well as the ‘liberal’ society of the nineteenth century. Laissez-faire capitalism with its reluctance to accept government responsibility for maintaining the social fabric of the state can then be seen not as a norm, but as an extreme view of the role of government which must itself be accounted for.

Capitalism and the role of money

While the roots of the capitalist ethic of nineteenth-century Britain are complex,⁶ one fact is clear. It was of considerable importance at that time to the new middle-class entrepreneurs that they should be able to engage in commerce and manufacture untrammelled by government control or social obligations. On the one hand they needed freedom to introduce new methods of manufacture, and the freedom of trade to exploit the advantages that these new methods gave them. On the other hand they wanted to be able to treat labour like any other factor of production, both in moulding their employees into a tractable labour force and in exploiting a buyers’ market, without having to concern themselves with the welfare of that labour force. To justify their position British entrepreneurs seized on those aspects of the classical economic model derived from the work of Adam Smith which gave them support.⁷

At the centre of the classical economic theories were certain valid propositions about the role of money and a competitive market in the economy. In a society in which specialisation of labour and production has advanced to a considerable degree, money provides a useful tool for measuring value and regulating exchange.⁸ For an individual—or an organisation—the receipt of a monetary income makes it possible for him to determine his own priorities for expenditure. Thus money is a most effective means for delegating responsibility and providing freedom of choice. At the same time it simplifies the decision-making process by allowing the decision-maker to exclude from his consideration all criteria except his own priorities.⁹ Because money widens choice it also provides an enhanced incentive for work and enterprise.

For society as a whole, in a situation in which the supply of goods and services can rarely meet the potential desires of the population, supply and demand can be brought into equilibrium by the operation of a competitive price mechanism which rations goods and provides an incentive for efficiency. In this way it seemed to nineteenth-century economists that the competitive market economy both maximised individual choice and provided an automatic system for co-ordinating the mass of individual decisions. As Samuelson puts it in a modern textbook for students of economics:¹⁰

A competitive system is an elaborate mechanism for unconscious co-ordination through a system of prices and markets, a communication device for pooling the knowledge and actions of millions of diverse individuals. Without a central intelligence it solves one of the most complex problems imaginable, involving thousands of unknown variables and relations.

To nineteenth-century economists, intervention in this system, by limiting competition, artificially restricting supply or controlling price, though providing often temporary advantages to some individuals, was regarded as basically harmful to the prosperity of society as a whole. This was considered true of both internal and foreign trade.

Limitations of the laissez-faire market economy¹¹

In their reliance on the economic market as a means of distributing resources and co-ordinating decisions, nineteenth-century classical economists and their followers failed to recognise the importance of a number of weaknesses in the system. Some of these weaknesses were at the macro-economic level affecting the general efficiency of the whole economy: some at the micro-economic level governing the supply and demand for particular goods and services. Many of these weaknesses were becoming evident by the end of the nineteenth century, though their full significance might not become manifest until well into the twentieth century. They are related first to the effects of a policy of delegation and second to the limitations of money as a measurement of value.

One of the functions of the economic market, as has been pointed out, is to simplify decision-making by delegating responsibilities to individual consumers and productive organisations. But the delegation of decision-making to low levels in a system makes certain sorts of decisions difficult to take and so limits possible lines of development.

The great advantage of any system of delegation is that it simplifies the decision-making process by putting decisions in the hands of those in closest touch with the working situation. This is particularly valuable where flexibility is required in meeting complex situations, and can usefully be contrasted with the inflexibility associated with hierarchical bureaucratic systems. So that giving an income to responsible parents is likely to be more effective in supplying family needs than bureaucratic decisions about the issue of standard rations and clothing. But this simplification of decision-making can only be made at the cost of increasing the number and importance of ‘externalities’—that is to say issues that cannot adequately be evaluated within the terms of reference of the person making the decision.

There are many examples of externalities in the operation of the economic market. Both costs and benefits can be externalities, although most attention is usually directed to costs. Typical examples are the cost to others of pollution of the atmosphere or water system by manufacturing processes, transport systems, or urban living; the cost to all users of transport from delays and inconvenience as more vehicles are put on the roads; or the betterment that accrues to neighbouring areas as a result of an improvement in the amenities of a particular district. Perhaps the most important example of externalities created by an extreme laissez-faire system is the costs thrown on workers, their families and society as a whole by the refusal of employers to accept any responsibility for their workers other than paying them the market value of their labour. The maintenance and improvement of the quality of the labour force requires that workers receive an income that can purchase housing, food and clothing adequate at all times ‘for the maintenance of merely physical health’ for themselves and their dependents—to use Rowntree’s phrase,¹² —together with health, educational and training facilities that will enable them to meet the demands of an industrial society. By the end of the nineteenth century it was clear that a laissez-faire system on the British or American models could not meet these criteria. The postulates of the economists, that labour could be treated like other factors of production with supply and demand brought into equilibrium by price, was shown to be short-sighted as well as being inhumane.

Within the economic market delegation to individual but interdependent units also creates uncertainty because some decisions depend on estimating the way in which large numbers of other individuals will make their decisions. This uncertainty in turn contributes to instability in the processes of production and growth, demonstrated by the regular cycles of expansion and depression in the business cycle. As a co-ordinating mechanism the economic market always tends to equilibrium, but the level of economic activity at which equilibrium is attained without external intervention may be far below what is technically possible.¹³

Uncertainty also affects decisions involving major changes in production. Classical economic theory in fact came increasingly to concentrate on the role of the market in determining ‘marginal’ changes in production and consumption.¹⁴ Major changes could only be accounted for in terms of the ‘entrepreneur’,¹⁵ whose role was to take the risks inherent in the uncertainties of the market. The need of the entrepreneur to control uncertainty has been an important influence in the drive to enlarge businesses, extending control over the resources required for production, and the outlets for the sale of products, creating monopolies and diversifying products. By all these means the ‘perfect’ market, whose competition provides the rationale of the classical economic system, becomes less and less a reality.¹⁶

Some of the problems of co-ordination and externalities created by delegation could be dealt with by voluntary agreements, for instance joint action to raise wages, or deal with pollution. In practice securing joint agreement among numerous independent groups or units is extremely difficult, particularly where any one of them can gain an immediate advantage by disregarding the agreement, or by making use of joint facilities without paying a contribution—the so-called problem of ‘the free rider’.¹⁷

Other weaknesses of a laissez-faire economic system are associated with limitations of money as a measure of value. First of all, only some aspects of social welfare can be measured in terms of money. The value of goods and services or other aspects of welfare that are not normally bought or sold can only be valued indirectly or even not at all. How do you value a life saved, or a limb lost, or the work of a housewife and mother ? Some of these problems will be examined in more detail later,¹⁸ but meanwhile it is important to note, that as with all the social sciences, too much concentration on what can be measured may mean that too little account is taken of the immeasurable.

Even within the economic market monetary value is not an objective criterion like weight or length. The monetary value placed on goods and services through the economic market varies as a result of changes in the value of money as a whole —the all too familiar problem of inflation. More seriously it also varies according to the distribution pattern of income and other claims on resources. If income is transferred from one group to another with a different consumption pattern, then demand for the goods bought by the first group will fall, and their price will tend to fall too. Similarly the price of the goods bought by the second group will tend to rise.

This relationship between price and income distribution presents the flaw in the attempts of economists to define a distribution of resources that would maximise welfare on the basis of the so-called ‘Pareto-optimum’.¹⁹

Pareto argued that the point of optimum welfare would be achieved when no individual consumer could gain anything by further exchanges of goods and services with any other consumer. At this point ‘the marginal utility’ of all products for each individual—that is, the value to the individual of the last additional unit purchased—would equal the price at which the products were offered. Similarly an ideal production schedule could be determined under perfect competition by equating marginal productivity and marginal cost. However, the Pareto-optimum proves not to be a unique position for there is a different optimum distribution for every different set of prices and therefore for every different division of income. One approach t...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Title Original Page
• Copyright Original Page
• Dedication
• Table of Contents
• Preface
• 1 Welfare capitalism and the social services
• 2 Resources, income and wealth
• 3 The definition of need
• 4 The distribution of resources
• 5 Co-ordination
• 6 Power, authority and freedom
• 7 Professionalism and the structure of the social services
• 8 The balance of power and the consumer
• Notes
• Index of authors
• Index of subjects