Inequality and Incentive: Don Quixote to Mutual Obligation

Crombie, Robert C. (2003) Inequality and Incentive: Don Quixote to Mutual Obligation. In Bradley, Rebecca, Lyddon, Jeff, & Buys, Laurie (Eds.) Social Change in the 21st Century, 21 November 2003, Queensland University of Technology, Brisbane.


"The pride of man makes him love to domineer, and nothing mortifies him so much as to be obliged to condescend to persuade his inferiors." (Adam Smith, cited in Campbell, Skinner & Todd, 1981, p.388)

For most citizens, the lofty works of long-dead economists make unlikely reading, but supporters of the deregulation policy regime have long been fond of quoting Adam Smith as legitimation for prescriptive policies. Familiar to most would be the theory of the invisible hand of the market; and the regime’s unending opposition to collective bargaining by labour has its basis in an interpretation of Smith’s thesis on monopolies. Monopolies distort the market price mechanism, though both Smith and Karl Marx showed that such distortions were not confined to the labour market. Declining use of the classics in school literature almost certainly contributes to a narrowing appreciation for such works. Among the classics, Cervantes tale of Don Quixote shows the futility of struggle, even with strong incentive, when the adversary is misidentified. For Quixote, the incentive was personal glory, a discursive theme for simpler times; but how many citizens today, economically marginalised or even socially excluded by various categories of unemployment and the discourse of Mutual Obligation, could clearly state their aim, their incentive, and where to meaningfully direct their struggle? In the Cold War discourse, incentive provided a convenient difference between the socialist and capitalist economic systems – under the benevolent state, we were told, there was no incentive to work. Since the end of the Cold War, the issue of incentive has gained prominence in the politics of unemployment, particularly in the discourse on Mutual Obligation. In tracing the rising prominence of incentive, this paper will give consideration to contesting values or ideologies and the political support they have received; the rise of the deregulation policy regime; and institutional change that has occurred or is pending. The purpose is to identify the struggle and its adversaries, and to highlight the inequality in that struggle. For the history of deregulation, the paper relies on the work of Briggs and Buchanan (2000), and the analyses rely upon Bernholz' (1995) work on the causes of change in political-economic regimes, George’s (1997) Winning the War of Ideas, and Brennan and Pincus’ (2002) study of change to Australia’s economic institution.

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ID Code: 118
Item Type: Conference Paper
Refereed: Yes
ISBN: 0646431056
Subjects: Australian and New Zealand Standard Research Classification > STUDIES IN HUMAN SOCIETY (160000) > POLICY AND ADMINISTRATION (160500) > Public Policy (160510)
Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200) > Welfare Economics (140219)
Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200) > Labour Economics (140211)
Divisions: Past > QUT Faculties & Divisions > QUT Carseldine - Humanities & Human Services
Copyright Owner: Copyright 2003 Robert C. Crombie
Deposited On: 10 Jun 2004 00:00
Last Modified: 09 Jun 2010 12:21

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