The Outsiders vs The Managerial Class

Posted by on May 08, 2017

Across the globe, ordinary citizens are in rebellion against the political elites, against Big Government and Big Business, and against a self-serving and corrupt system of party politics that works for 20% of the population and against the other 80%. But it’s a messy process.

Just who are the Outsiders? And who are the Insiders? Who is the political class that journalists now talk about? (though they didn’t use that phrase at all five years ago). Where does Donald Trump sit in this movement? Is he a help or a hindrance to the Outsiders’ Movement?

Until the 1960s, the Establishment in Australia was associated with the political Right – captains of industry, the Liberal Party, Collins Street, and exclusive independent schools clustered in half a dozen suburbs in Sydney and Melbourne. Labor politicians were proudly anti-Establishment.

From the Whitlam period on, a second Establishment emerged in Australia, the product of the post-1968 Left’s ‘march through the institutions’. Universities were the key to this New Establishment, unlocked by the Whitlam Government’s removal of university fees, and pushed by a generational drive for self-realisation and therapeutic intervention.

The result was a proliferation of university graduates from the 1970s who required an expanded array of professional and human service disciplines in which to apply their skills – welfare, media, education, psychology, health, drug and alcohol services, employment and training, child and family services, mental health. It was limitless.

Until the 1970s, employment options for people with these skills were limited. Teaching and nursing were the only options for women, who were, in any case, expected to hold only temporary positions in the paid workforce. Many of the therapeutic professions were employed in organisations with a ‘charitable’ ethos – charities and churches – which limited the potential for dramatic expansion.

But with a proliferation of new disciplines and new client groups, a new system of ‘human services’ emerged, replacing the old charitable service model. It permitted providers of services to ‘professionalise’ their operations and adopt ‘standards’ imposed by government funders and regulators. Former voluntary, charitable and mutual forms of social support were absorbed into this emerging system of ‘human services’.

Most charities and churches found it easier to seek and obtain public contracts for their operations and to tailor their mission to the delivery of these contracts, than to rely solely on community fundraising or commercial income generation. NDIS is celebrated by its proponents as the latest instalment in this shift from pre-modern decentralised ‘charitable’ services to modern centralised ‘professional care’.

Because government now assumed the primary funding role for this system of ‘human services’, providers soon reflected the silo structure of government in their programs and operations. Their internal cultures mirrored the risk-averse, dependence-creating culture of government. Service providers became accountable, not to their service users or to what quickly became known as their ‘clients’, but to their funding Departments.

These providers were run by a new class of managers whose career paths now typically wound between government and community organisations. Any residual notion that government and community were different ‘sectors’ was soon trampled by the march of the managers’ feet – ‘government’ and ‘community’ became blurred in a publicly funded but nominally independent ‘sector’ of social and therapeutic intervention, with a mission defined in social and therapeutic terms against the ‘commercial’ mission of the Old Establishment.

This process, which unfolded and was formalised over two quick decades from 1980 to 2000, has attracted very little public discussion in Australia. But its impact has been profound. It transformed the shape of community organisation in this country and almost killed off civil society. Most community organisations with a history of more than three decades are now unrecognisable from the groups from which they formed in church halls and around kitchen tables in a previous era.

Disability service organizations are a case in point. Most of the disability agencies now headed by CEOs, complete with a raft of risk management, regulatory compliance and brand protection policies, were formed by parents of people with disabilities who knew they needed to create, from scratch, the supports and services needed by their sons and daughters. They usually began around a kitchen table. Everyone was a volunteer. Consultants were unheard of. The only resources on tap were goodwill and a willingness to work together for no reward apart from securing something in the future for their loved ones.

Today, many such parents now find themselves referred to, in the Annual Reports of the bodies they created, as ‘stakeholders’ in the welfare of their sons and daughters. They appear alongside other stakeholders such local governments, suppliers and corporate partners. Many shake their heads in disbelief at the entity they unknowingly created. “We gave birth to a monster”, many say.

This transformation occurred across the country between 1980 and 2000 in small organisations and big institutions alike. It created a second powerful and now deeply entrenched Establishment. This New Establishment belongs to the Left. Like the Old, it comprises a class of people who are conscious of their common interests and who share a realisation that their interests are different from those of other sections of society. Like the Old, it is deeply paternalistic, believing it represents the best interests of society, and that the lower social orders should defer to its judgement. And like the Old, it is a managerial class – its calling is to run institutions on behalf of society.

The Old Establishment runs corporate boardrooms, exclusive schools, traditional media and exclusive sporting clubs. The New Establishment runs public sector authorities, universities and schools, service delivery agencies, and public media. The boundaries between them, though, are not rigid: the New Establishment is making inroads into corporate and exclusive school boardrooms. Local government is shared between Old and New. Churches are shared between Old and New.

The two Establishments are the two faces of our ruling managerial class. Both Establishments are run by Insiders. Each has extensive patronage networks through which favours and public dispensations of money are allocated to their respective client groups of professions, industry interests and aligned media. Taken together, the patronage networks of both Establishments constitute about 20% of the Australian population. The other 80% of us are Outsiders.

How do you know if you are an Insider or an Outsider? There are some simple tests. If you are the beneficiary of a political appointment to a job or a board, you are an Insider. If you seek employment by looking through Seek or newspaper ads, you’re an Outsider. If you’ve sat in Centrelink waiting for an interview, you’re an Outsider. If you’ve set up a consultancy firm to supply services to public authorities and you rely on your networks for business, you’re an Insider par excellence. If you’ve been invited to sit on an advisory committee for government, in any field at all, you are an Insider.

Haven’t there always been Insiders and Outsiders in Australia? Yes. But in the past, with just a single Establishment, the big divisions in society were reflected in political institutions, through which some degree of adjustment and regulation were permitted. With the advent of Two Establishments, each with its own political party, our democratic institutions have become detached from the deep social and cultural divisions in Australian life.

This detachment has now become widely recognised. The political ‘crisis’ in Australian politics has erupted because our two-party system represents the two faces of the managerial class, the Two Establishments, and does not represent the primary social chasm between Outsiders and Insiders. This is a global phenomenon. It is a messy process because in each country in the western world, this crisis will take different forms.

Brexit occurred because working class communities in Britain observed all three political parties of Insiders sharing the same position on the European Union and acting as a cohesive managerial class. Trump’s election occurred because working class communities in the USA observed both political parties of Insiders acting as a cohesive managerial class. The Trump phenomenon is particularly messy. The election of Donald Trump shocked elites around the world.

For the first time in living memory, a citizen who was not a politician was elected to a leadership position in a Western country, promising to 'drain the swamp' of career politicians and out-of-touch government officials. The effect of Trump's election has been to demonstrate just how fragile is the control on government exercised by the managerial class.

This does not mean that everything Donald Trump says and does is wise and sensible. Much of it is illiberal, crude and ill-considered. Trump is just as detached from disadvantaged communities as his predecessors and most of his critics. Nor does it mean that Trump has solutions to the disempowerment of the Outsiders. His best policy, to date, is his school reform policy, allowing communities and parents to walk away from failing public schools to form charter and independent schools without obstruction.

The significance of Trump’s election is that, in spite of his many personal failings and policy weaknesses, the people who were nobodies in the eyes of the elites made him President. The impact of this has been momentous in every country in the world, with ordinary citizens who have an interest in politics now re-examining, in the light of Trump's election, how to produce political change in their own country.

What does this mean for the traditional notions of Left and Right? These terms are no longer useful in explaining what is going on in politics around the world, and what ordinary citizens aspire to. Big Business is too powerful. Government is too big and too impersonal. The Media does not reflect the views of most Australians. Many academics and public servants are hopelessly out of touch with real people.

For the last 150 years, both Right and Left have tended to concentrate power in fewer and fewer hands. This shared practice of concentrating power was masked for a long time by the Cold War – with the benefit of hindsight we can now see that the 20th century was the century of concentrated power, Big Government and Big Business, with shrinking social capital and diminishing personal responsibility. That is the legacy of rule by Insiders. The 21st century can be one of dispersing power away from the Insiders - from governments, public servants, union officials, big corporations and service providers - to the Outsiders in communities, small businesses, families and local initiatives.

Where to now for the Outsiders in Australia? First, we have a whole country to take back. The control of the managerial class has encroached upon almost all walks of life – sporting clubs, credit unions, churches, local governments. But managerialism can survive only if citizens acquiesce in its hegemony. Partly through over-reach and exhaustion, in ways that are reminiscent of the last years of the old Soviet bloc, the control of the managerial class is now being openly challenged after many years of quietude. The genie is out of the bottle. On economic policy and reform of our institutions, the Two Establishments are now Emperors with No Clothes.

Second, new technology and new media mean that we Outsiders do not need to be reliant on the infrastructure owned and controlled by the managerial class. We can create our own. We need our own agenda for empowering Ourselves, and transferring leadership and power away from the elites to families, communities, small businesses and our own self-help and democratic initiatives. We want to empower ourselves and remove the elites from power. We don't aim to influence the elites - we aim to put them out of business.

And third, the policy positions that we should favour are those that transfer power and resources away from the Insiders to the Outsiders. NDIS is a bureaucratised and excessively costly reform, but the core element of reform in disability support is the transfer of funding away from service providers to users of services in the form of individual packages. Funds can now be directly controlled by individuals and families and self-managed (either by individuals or by groups), by-passing the managerial class. The same can be done in aged care and mental health.

We should extend these arrangements to every part of social spending, including child care, employment and training, schools, drug and alcohol support, family support, chronic illness care and many others. In these areas, we can put the managerial class out of business. To do this, though, we Outsiders need to get organised.

We need to develop a movement amongst the 80% to build up our confidence, our skills, our leadership, and our ability to develop solutions for Ourselves. In the process, we can put the managerial class out of business.

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