The public cost of personal hardship: evaluating the hidden expense of cost-cutting measures on social wellbeing

Abstracts

Class struggle and the Conscience Collective in an era of zombie capitalism

Ronjon Paul Datta (Department of Sociology and Criminology, Windsor University)

This paper offers a provisional analysis of how the North American conscience collective has changed since 2007, reconfiguring the ideological colouring of opposition to state intervention, technocracy, and capitalist development found among working-class groups. Contemporary populism in North America (e.g., the ‘Tea Party’ and ‘Occupy Wall Street’) emerged as a response to bailouts amidst the ‘Global Financial Crisis,’ manifesting a new configuration of resistance to the dominance of capital. Bailouts should have sounded the death-knell for ‘neoliberalism’ indicating that the state is indeed a ‘capitalist state’ traversed by contradictions. Instead, the bailouts consolidated an era of ‘zombie capitalism’, in which debt, austerity and the rhetoric of sacrifice ‘secure’ a capitalist social structure absent its actual reproduction. The relatively swift removal of a right-wing populist blockade opposed to technocratic COVID measures, at the Ambassador Bridge linking Windsor and Detroit over which $600 million CDN in goods flows daily, is an instructive case. It highlighted a plurality of hardships experienced by small and large firms, the underemployed, and even politicians, shaping a new political economy of security.

 

The hidden cost of households experiencing ‘double disadvantage’ in Cambridge

Councillor Sam Davies (Cambridge City Council)

This paper examines the ‘double disadvantage’ of poverty among households in an economically polarised area of Cambridge. In common with other UK public sector organisations, Cambridge’s local government, policing and health services have all experienced dramatic funding reductions over the last decade as a result of austerity policies. However, the impacts of these cuts have locally been further exacerbated by Cambridge’s rapid employment and population growth; the challenge of assimilating new communities at scale; and the bifurcation of economic fortunes among winners and losers from the widely acclaimed ‘Cambridge Phenomenon’.

The paper will draw on interviews with a small number of households experiencing financial, social and/or health inequalities in the Queen Edith’s area of the city. Queen Edith’s ward adjoins Cambridge Biomedical Campus and is often perceived to be one of the most affluent wards in the city, but this perception masks pockets of significant deprivation. Recent ONS census data shows that while 58% of Queen Edith’s households are not deprived in any dimension, up to 20% of households in some localised areas are deprived in three dimensions.

The paper will explore the consequences of this for individual households and the wider social costs of these communities who are being left behind by Cambridge’s economic success.

 

From mutual help to the institutionalisation of social insurance: the case of the Swedish insurance agency (1850 – 2020)

Elise Dermineur Reuterswärd (Department of Economic History and International Relations, Stockholm University)

Sweden is often pictured as the Eldorado of the welfare state, granting its citizens extensive rights and benefits. And yet, over the recent years, cracks have appeared in the Nordic model. In particular, the Swedish Social Insurance Agency (Försäkringskassan, FK hereafter) has attracted growing criticisms, especially regarding its implementation of rules and regulations for sick-leave benefits. The Swedish State aims to reduce the number of benefits distributed in a politics of cost reduction and state disengagement. Yet, citizens, united in a ‘community of fate’, do not understand why they are denied the benefits they thought they were entitled to. They have recently launched collective actions to voice their discontent and ask for the revival of ‘mutual governance’ and rule of law; collective actions that emanate from a shared perception of legitimacy. This conflict of interest leads further to a sentiment of injustice and questions the legitimacy of the institution.

This paper proposes to rewind the course of time and examine how FK has experienced the transition from mutual help funds to institutionalisation into a public agency. How was this transition experienced in practice by citizens? What happened when an institution became a more impersonal institution? What were the real costs behind state disengagement for the citizens? My point of departure is not State politics but rather the institution itself and the way it functions.

I am especially interested in the concept of institutional betrayal. Injustice and inequality experienced in a regular fashion – or perceived as such –, such as in the denial of benefits, are not necessarily the source of social movements in the form of uprisings or violence. Instead, they are a source of resentment and disenchantment on the part of citizens, emotions that often find a way to the voting booth. This is a rupture of a moral and unstated contract between the State and its citizens. It is my contention that institutions become and stay legitimate only if they adapt to and retain the pre-existing set of moral norms of their citizens united in a community of fate. Otherwise, democracy may be threatened in the near future by this process of disembeddedness.

 

Submerged: surfacing deep poverty during permacrisis

Daniel Edmiston (Department of Sociology and Social Policy, University of Leeds)

The cost-of-living crisis presents the latest challenge for many trying to cover the basics: successive economic shocks, austerity, welfare reform and COVID-19 have all depleted the resources and support networks available to low-income communities. What are the costs and consequences for those pulled into deeper, more severe forms of financial crisis? Answering this question depends on the dominant methods and data practices that currently mediate ways of knowing, quantifying and responding to economic insecurity in highly unequal, neoliberal times. Drawing on a mixed-methods project, this presentation outlines the costs and contradictions of a poverty-debt trap intensified by high inflation and considers what bearing this has had on everyday coping strategies, relationships and health in low-income lives. The findings highlight the private struggles and longer-term consequences of privation that are often mischaracterised or occluded. I demonstrate how those worst affected by permacrisis are also those most likely to fall outwith the counting process (both institutionally and politically), making their privation and the relations that structure marginality less visible in the research and policymaking process. Situating the cost-of-living crisis within a broader historical context, I argue that the analytical frameworks adopted across the social sciences tend to reproduce an overly optimistic reading of (deep) poverty prevalence, dynamics and its effects.

 

Coproducing wellbeing policy: a theory of thriving in financial hardship

Mark Fabian (Warwick), Anna Alexandrova (Cambridge), Yamini Cinamon-Nair (Greater London Authority), with Turn2us

We describe a replicable process for coproducing a theory of ‘thriving’, or more broadly ‘wellbeing’, in partnership with stakeholders to inform an area of policy. Coproduction promotes the effectiveness, practicality, and legitimacy of wellbeing policies by combining insights from people with lived experience of that policy, the practitioners who implement it, and technical experts with relevant area-specific knowledge. We illustrate our methodology using a case study of a coproduction exercise between wellbeing researchers and Turn2us, a UK-based anti-poverty charity. We report both the process developed for this collaboration and the bespoke theory and measures of thriving in financial hardship that emerged from it. We emphasise the interplay between different types of inputs: quantitative and qualitative data, academic knowledge and lived experience, formal and informal insights. The process we describe promotes both conceptual saturation for theory development and representativeness for efficient allocation of policy resources. Our experience demonstrates the value of contextualising wellbeing for policymaking and is an important complement to top-down approaches relying on standardised theories and metrics like subjective well-being.

 

Extraordinary austerity: state and corporate violence in daily life

Mia Gray (Department of Geography, and Girton College, University of Cambridge)

This talk explores the intertwining of corporate extractive practices and state austerity and the ways in which, together, they produce both market and institutional precarity.  This is framed through the concept of ‘extraordinary austerity’.

 

Economic revanchism: Detroit and state-level austerity from 1999 to the present day

Gabriel Gurule (International History, Trinity College Dublin)

Urban Revanchism is a pattern of gentrification, increased policing, and racial anxiety. A reactionary force of urban whites seeking to reconquer or retake their cities from marginalized groups and reformers. These forces are within the city: mayors, local developers, and institutional elites. Economic revanchism, as I distinguish, positions the city in opposition to external reactionary tensions. This includes usurpation of local democratic systems, reduction of public services, and a migration of capital from municipal public benefits to non-resident private interests. Through this lens, I will be examining specific austerity policies within Detroit from the late 1990s to now. In this period, Detroit’s locally elected school board was placed under state control twice. It became the largest city in the United States to declare bankruptcy. For the first time since becoming a majority-Black city, it elected a white mayor. These events led to a decline in public services, greater tax abatements for the wealthy, and a growth in charter schools. The trajectory of these events was to the benefit of predominantly white suburbs, which had grown out of Detroit’s white flight. Economic revanchism provides a way for non- residents to “reconquer” an urban space without having to live in the space.

 

The depths of deprivation: theorising disparities in life expectancy between the North and South of England

Ariane Hanemaayer (Brandon University) and Niamh Mulcahy (University of Cambridge)

The effects of budgets cuts over 40 years have been considered for compounding deprivation in the North of England (declining infrastructure, job loss, low quality of life, poor employment prospects). Despite research demonstrating inequalities among the North and South of England, exemplified in life expectancy (e.g., the Health and Lifestyles Surveys of 1984-1991 and later the 2010 Marmot Review), a continued reduction of services and infrastructure has led to further deprivation in the North. The disparity among Covid-19 death rates between North and South has recently rendered visible the scope of these inequalities. This paper examines the normalisation of death in English public policy, by drawing theoretical connections between Foucault’s (2003) concept of normalisation, a political technology that establishes a bandwidth of acceptability within a population, and Agamben’s (1999) notion of thanatopolitics, the state’s power to make some populations die. We compare health and social policies in England from two time periods, the 1990s and 2020s, and two areas, health (The Health of the Nation 1992, Build Back Better 2021) and housing policy underpinned by the ideological drive for homeownership. We find that policy articulates a subject who begins from an imagined place of ‘freedom to choose’ better health or better housing. However, we argue, cuts to infrastructure funding have curtailed the field of possible action for residents in Northern communities, leading to poorer life chances and reduced life spans. The normalisation of higher death rates in the North provides an index for explaining the operation of thanatopolitics in public policy in England.

 

Housing from a social harm perspective

Addison Kornel (Department of Sociology and Criminology, University of Windsor)

From 2020 to 2022 housing prices in Canada surged. This paper investigates the social consequences of rising prices by considering the exceptional example of Windsor, Ontario, Canada. Unlike most Canadian cities, the ‘Canadian dream’ social narrative of timely and reliable homeownership on the back of local labour wages had survived in Windsor until recently. The latest run-up marked a turning point. Qualitative interviews conducted in early 2022 with successful and unsuccessful homebuyers in Windsor reveal the centrality of homeownership to the life course and social fabric. Participants articulated long- standing economic and sociological concerns that home value spikes drive wealth inequality and cleave society based on housing tenure. But they also point to an underresearched ideological dimension of this social process. The data provide evidence of the disappointment that arises when a previously efficient ideology (the ‘Canadian Dream’) is suddenly eclipsed by new economic realities. Drawing on Ultra-realist criminology, it is argued that this consequence of rising prices constitutes social harm. It is maintained that the homeownership social narrative gave participants reasonable expectations for success and that their inability to attain said success was functional to the markets that frustrated their efforts. This study offers a rare glimpse into a phenomenon that has already become a foregone conclusion in many localities and speaks to the real consequences of credit-driven economies that rely on home value appreciation to sustain growth.

 

Who pays for debt? Interrogating the costs of austerity to the public and private household  

Johnna Montgomerie (Department of European and International Studies, King’s College London)

The United Kingdom (UK) continues to struggle with protracted uncertainty, deep stagnation and perpetual crisis. Debt plays a central role in generating these conditions; debt is where politics meets structures, and where the global, national, and everyday become entangled in the routines and rhythms of everyday life. In light of the COVID-19 pandemic and current cost-of-living crisis, the purpose of this chapter is to critically interrogate how numbers representing debt stocks are part of the economic storytelling used to justify austerity. Privatized Keynesianism describes a policy regime that promotes debt-led growth, and neoliberalism a politics of market rule to benefit the already wealthy; this chapter traces the economic storytelling about debt found across both. The economic storytelling about the UK debt stock in terms of the public and private household, integrates the moral economy frame of ‘who pays?’ and feminist economics frame of ‘who is counted?’; with the aim of unpacking the normative framing of the costs of austerity by interpreting who pays the costs of the debt stock. The analysis shows that debt-dependence relies on the household metaphor to justify austerity and, in doing so, the idea of individual financial distress caused by debt can to be projected onto the national economy in ways that entrench economic malaise. In turn, this provides a justification for imposing austerity on local communities and residential homes to ‘address’ the debt problem with spending cuts. There is an urgent need for economic transformation, not simply alleviation of austerity. I argue that eliminating portions of the public and private debt stock is a viable alternative to austerity and remedy for the cost-of-living crisis, which is examined in light of the existing research on debt default, bankruptcy, abolition or jubilee. 

 

Councillors at the casino? Financialisation and local statecraft in austerity and centralisation in England 2010-

Andy Pike (School of Geography, Politics, and Sociology, Newcastle University)

The UK government reduced expenditure and introduced local financial self-sufficiency in pursuing austerity after the 2008 crash, forcing local governments in England to find savings and new income sources to close funding gaps. As new financial strategies and practices were devised, ‘councillors at the casino’ were characterised taking risks with local taxpayers’ money and jeopardising local public service provision. Looking beyond the high-profile cases in an internationally resonant local public sector reform laboratory, this presentation examines the wider landscape across local government in England since 2010. A local tier of over 300 governments, managing £100bn of revenue expenditure, and employing almost 1.5m providing services to over 56m people across the country. Underpinned by local statehood attributes, a new local statecraft theory explains how local statecrafters act in realms including financial strategies and risks, external advice, borrowing and debt management, and in and out-of-area activities. The framework reveals and accounts for their vanguard, intermediate, and long tail approaches with differing engagements with financialisation. While limited within the overall landscape, such relations and UK government policy are rewiring and rescaling local statecraft and relocating risks and uncertainties onto local government and the wider local state. UK government policy and the extension and intensification of financialisation expose the local state’s financial sustainability and resilience in the longer-term. They raise fundamental questions about what local government is for and how it should be funded? Eroded local accountability of local statecraft in financialisation risks de-politicised and post-democratic local governance.

 

Debt, credit payment holidays, and their relationship with mental health during the COVID-19 pandemic in the United Kingdom

Matthew Sparkes (Department of Sociology, University of Cambridge)

Background: The study addresses the relationship between non-mortgage debt and mental health in the United Kingdom during the Covid-19 pandemic where a government-endorsed credit payment holiday was implemented to allow borrowers to postpone debt repayment. The scheme shifted the individual responsibility that is usually placed on borrowers who miss debt repayments with potential effects on their mental health. The relationship between debt and mental health is well documented in the literature but no study has paid attention to the role these credit payment holiday schemes played in mitigating the relationship between debt and mental health.

Method: Data come from three waves of the Understanding Society COVID-19 surveys. We use fixed (FE) and random (RE) effects to assess the relationship between change in the presence of unsecured debt, credit payment holiday and psychological distress (GHQ-12 Likert score), controlling for confounders.

Results: Among the indebted population, results show that while credit payment holidays have a positive effect on psychological distress in RE models (RE=0.94, 95%=0.38, 1.51), the effect becomes negative in FE models (FE=-2.62, 95%CI=-4.35, -0.88). This suggests that self-selected personal characteristics might confound the relationship. After considering the fixed effects, credit payment holiday was associated with lower psychological distress. These patterns remain consistent across gender, household and education groups.

Conclusion: The relationship between debt and mental health has not changed throughout the pandemic; but the credit payment holiday has played a significant role in attenuating it, perhaps because it de-stigmatised missed repayment. Such has been the cumulative rise in individual and household debt due to COVID-19, the ongoing cost of living crisis, and rising borrowing costs, our results suggest the scheme can become a long-term policy tool which helps alleviate the negative mental health effects of persistent financial precarity.

 

Policy architecture and infrastructure: trust, uncertainty, and expectations

Jonathan Warner (Von Hügel Institute at St Edmund’s College, University of Cambridge)

It is a truism of economics that people respond to incentives. For example, lower interest rates encourage higher investment: owning your own home encourages you to take care of it; tuition grants and subsidies encourage families to invest in more education.
By ‘policy architecture’ I mean the planning domain in which policy is made, and the basic rules that apply to the policy-making process. Policies towards physical infrastructure (transport, energy, green spaces and so on) affect the quantity, type, and location of economic activity. For example, the government’s ‘levelling-up’ agenda seeks to spread the gains of investment to those areas of the country that have been left behind.

But the success of such an agenda depends crucially how people respond to the incentives on offer. Trust that policy proposals will come to fruition is important. Uncertainty about what will happen will tend to reduce an incentive’s effect – uncertainty over the path of Brexit continues to depress business investment in the UK. Of great importance, therefore, are the expectations that people form of the effects of a policy. It is these secondary effects of policy decisions that this paper explores.
Although there are exceptions, in general, it is the poor who are differentially affected by policy uncertainty. They have less resilience to the negative effects of any proposed change, and less ability to hedge or insure against any negative consequences. Fear can paralyse action. By looking at a number of policy decisions over the past decade, the paper seeks to explore how the trinity of trust, uncertainty and expectations have shaped the trajectory of policy outcomes in the UK.