So Italy has now gone the way of the UK and the US in its referendum vote – rejecting the establishment but not sure on what to do instead. It seems that the US voters have been duped by a conman (noting he beat a conwoman). Now Renzi is to go and we will see what happens next. But the trends around the world are unmistakable. Ordinary folk are in rebellion and for good reason. Last night I saw the latest Ken Loach film – I, Daniel Blake, which is a grinding, shocking statement of how society has been so compromised by the neo-liberalism that these voting patterns are rebelling against. I would say that as an Australian the film was a little less shocking than it might have been because our stupid nation led the way in introducing the tyrannical administrative processes that accompany income support systems in this neo-liberal era. Britain (under Tony Blair – never let it be forgotten – he did more than lie about Iraq) followed Australia’s lead in this respect. So, Australians have seen this dystopia for more than 18 years now – and while I hope we have not become inured to it – normalised it – it has been part of our awareness for a long time. Nonetheless, the film is shocking in what it says about the societal compromise and the rise and normalisation of sociopathic relationships between state and citizen.

I am just listening to the news feed as I type and following the reporting on the Italian referendum results.

I will write more about the No result when I have had time to study the numbers and understand the ramifications in more depth. I hope it leads to a political dynamic that gets Italy out of the Eurozone and forces the dysfunctional monetary union into history. I am not confident that hope will be realised.

Italy’s banking sector is probably insolvent with the Financial Times (November 28, 2016) article – Fears mount of multiple bank failures if Renzi loses referendum – reporting last week that:

Up to eight of Italy’s troubled banks risk failing if prime minister Matteo Renzi loses a constitutional referendum next weekend and ensuing market turbulence deters investors from recapitalising them …

While this alarm was probably media hype to scare people into voting yes (similar to the catastrophising that the British people were hit with in the lead up to the June Brexit vote), there is no doubt the Italian banks are in terrible shape and while Italy remains it the Eurozone it is largely helpless to do much about it.

The successful No vote (by a huge margin) brings together the odds and sods of Italian politics who in noted cases hold views that are the anathema of any progressive agenda. But this group is the only anti-Euro voice in Italy.

That is tragic really. It is unfortunate that the more mainstream socialist Left parties are not leading the way in advocating the abandonment of the euro. But then, they drank the neo-liberal poison long ago and at that point ceased to be a voice for progressive policy.

But back to I, Daniel Blake.

The film was motivated by the passing of the Welfare Reform Act 2012 – which was designed to make it harder for people to receive and stay on income support systems relating to unemployment and sickness.

Former PM David Cameron spoke to the bill saying (Source)

Where we back those who work hard and do the right thing … Building that society is simply not possible without radically reforming welfare … Ending the nonsense of paying people more to stay at home than to get a job – and finally making sure that work really pays … What these examples show is that we have, in some ways, created a welfare gap in this country between those living long-term in the welfare system and those outside it.

Those within it grow up with a series of expectations: you can have a home of your own, the state will support you whatever decisions you make, you will always be able to take out no matter what you put in.

This has sent out some incredibly damaging signals.

That it pays not to work.

That you are owed something for nothing.

It gave us millions of working-age people sitting at home on benefits even before the recession hit.

It created a culture of entitlement …

There are few more entrenched problems than our out-of-control welfare system and few more daunting challenges than reforming it …

It’s about the kind of country we want to be – who we back, who we reward, what we expect of people, the kind of signals we send to the next generation.”

That sets the scene for the movie.

The storyline is fairly simple and linear.

Ageing skilled worker has a heart attack and his medical staff say he cannot work. He tries to get the British sickness benefit as is his right as a citizen but is knocked back by the points system, which claims he can work.

The Work Capability Assessment process carried out by a so-called ‘health care professional’ who refuses to confirm her medical qualifications and who works for a US outsourcing company (Maximus).

No effort is made to consult with his medical support team. In other words, the rather apocryphal ‘decision maker’, who is this impersonal agent that welfare applicants are told will determine the outcome of their claims but is not readily available to meet them, ignores the medical evidence that would substantiate his unfitness to work.

His rejection then leads Daniel Blake through a mind-blowing web of administrative cruelty – where he has to apply for unemployment benefits and sign a contract with the case manager which requires the applicant to perform ridiculous stunts to satisfy job search rules and be able to get things like “receipts” for job applications and be computer literate.

Failure to jump through the unrealistic hoops leads to sanctions of between 4 weeks and up to 3 years without support.

The other part of the I, Daniel Blake narrative is the single mother with two kids that he befriends in the job centre and who ends up in prostitution to support her kids because she has been sanctioned by one of the sociopaths in the job centre for being late to an interview. She is new to the region and became lost on her way to the interview.

There are some really grinding interactions between these people at a food bank, where hunger leads to humiliation and between Daniel and a pawn shop. They remind us that this system uses hunger and desperation as disciplining devices for those most in need.

As the UK Guardian article (October 27, 2016) – I am Daniel Blake – and there are millions more like me – noted:

Food is a weapon in austerity Britain. Hunger, the threat of and the reality of, is used to coerce and control. That sentence alone feels paranoid, more than a smack of the mad conspiracy theorist, until you start to look harder. Half of food bank users are there as a direct result of benefit sanctions. Benefit sanctions have been applied in cases where a person has failed to turn up to the jobcentre because they are in hospital following a heart attack. A woman was sanctioned for attending cancer treatment. A man was sanctioned for attending a funeral.

Comply or starve.

Ultimately, on the day of his appeal against the rejection of his sickness benefit application, Daniel Blake dies of another heart attack brought on by the stress of dealing with the sociopaths and the harsh reality of being without income and being unable to navigate through the income support system, which is designed to reject rather than to include.

It is a realy sad film. The final scene the prostitute reads a statement prepared by Daniel Blake as part of his appeal, which was never heard.

It intones the rights of citizenship and the divide and conquer nature of using nomenclature such as skivers, bludgers etc to isolate those without work from the rest, to ensure that the state has the political capacity to deliver this cruelty.

One commentator likened this statement to that of Patrick McGoohan in The Prisoner (I, Daniel Blake: Ken Loach and the scandal of Britain’s benefits system“>Source):

I will not be stamped, filed, indexed, briefed, debriefed or numbered, my life is my own.

The intent is to reinstate the concept of citizenship with all its attendant rights. That concept has become so compromised by these neo-liberal income support systems that it bears little similarity to the great Post World War 2 statements of human rights and societal privileges.

At one point, Daniel Blake is forced to attend a CV workshop. It is a farcical episode where some consultant is delivering the usual neo-liberal babble designed to blame the unemployed (victim) for their plight.

Daniel says “but there aren’t enough jobs”. Which gets to the nub of the issue.

Film director Ken Loach said in an interview (November 24, 2015) – ‘Conscious cruelty’: Ken Loach’s shock at benefit sanctions and food banks – that:

The bureaucratic inefficiency is vindictive and hunger is being used as a weapon. People are being forced to look for work that doesn’t exist … The situation is much worse than in the days of Cathy Come Home, at least then if people had a trade they could have a job for life.

Our governments have not only abandoned their responsibilities to provide enough work for those seeking it (which they agreed to take on as part of various UN and ILO charters relating to human rights in the immediate post World War 2 period), but to hide that choice, they have created systems that pillory the weak and fragile and make the victims appear as scheming, lazy, nasty characters who just want to live of the labour of the rest of us.

Daniel Blake was correct – The unemployed cannot find jobs that are not there!.

The movie was shocking but was like déjà vu to me.

The conservative Australian government adopted the same strategy when it was elected in 1996 although it has to be said that the Australian Labor Party (allegedly the workers’ party) had advanced plans in 1994 to do the same thing had it been reelected in 1996.

The Government privatised public employment service and introduced the so-called Job Network – which was a refinement of the trend towards mean-spirited government that led to the abandonment of a commitment to full employment and the retrenchment of a comprehensive welfare state.

The Job Network was epitomised by the government’s pursuit of the diminished goal of full employability, which constructed mass unemployment as a supply-side problem rather than a system-level failure of the economy to provide enough jobs for those who desired to work at the current wage rates on offer.

Under full employability, the government no longer ensured that employment growth matches labour force growth but focused, instead, on getting individuals ‘work ready’, should there be jobs available.

It was the exemplar of the OECD’s 1994 Jobs Study approach which focused on supply-side activation – a fancy word for blaming the victims of a demand failure and threatening them with starvation should they not agree to submit to the pernicious management regime (relentless dole diaries, meetings with case managers etc) which included working for free.

The Job Network was introduced at at time when it the macroeconomic constraints on its effectiveness were substantial. First, the Australian economy had failed to generate sufficient employment since 1975 to match the preferences of the labour force. Second, gross flows data revealed large inertia in all labour force categories and average unemployment duration rising to around 52 weeks and inversely related to the demand side of the labour market.

These development were accompanied by a policy of deliberate fiscal drag (pursuit of fiscal surpluses) which exacerbated the aggregate spending failure.

Not unlike the situation in Britain at present.

The most salient and empirically robust fact about the performance of the Australian economy at the time the Job Network was introduced was that actual GDP growth was not been strong enough to achieve and sustain full employment.

The same situation exists in Britain now.

The privatised Job Network (in it various guises since) has become parasitic private sector fringe – in effect, the Government created a new ‘industry’, whose product was unemployment.

The new industry is totally unproductive and basically generates profits from unemployment.

The Government argued that a competitive model would improve the quality and flexibility of services provided to the most disadvantaged job seekers.

A 2002 report by the federal Productivity Commission described the Job Network as a ‘managed’ or ‘quasi’ market for the provision of subsidised employment services, which aims to mimic the activities of competitive markets by allowing scope for competition, flexibility in service delivery, rewards based on outcomes and some degree of choice for the unemployed.

First, the Job Network comprised multiple independent agencies, each having a share of a common system of public service provision. Second, the agencies will be a mix of profit and not-for-profit organisations; and third, job seekers do not purchase services but have services purchased on their behalf by government.

Under the Job Network, the government was a purchaser and regulator of employment services, not a direct provider. The role of government was to award contracts through a competitive tender process, regulate providers, determine standards, and to collect and disseminate performance information.

However, this perverse “quasi market” soon revealed it was not immune from market failure.

There was policy schizophrenia in expecting an outcome-based funding model for employment services to deliver ‘better and more sustainable employment outcomes’ in the absence of concomitant policies to alleviate the macroeconomic constraint and create real employment opportunities.

In a highly demand-constrained labour market, characterised by persistent unemployment and marked regional disparities, it was always unclear how the supply-side focus of the Job Network could be effective.

It was also the case that a system centred on outcome payments in which providers had discretion with respect to the level and nature of assistance afforded to job seekers created incentives for ‘creaming’ and ‘parking’.

The Productivity Commission’s Independent Review of the Job Network in 2002 found that the payments structure to Job Network providers has led to a substantial proportion of Intensive Assistance recipients being ‘parked’ – that is, taken onto the private agency books to get the first incentive payment but then ignored because the prospects of getting any further payments (for successful job placement) were bleak.

Job seekers with the greater chance of achieving a payable outcome were targeted while those in greatest need of assistance (with low employment probabilities) were left unsupported.

The lack of correspondence between needs and services reflected the difficulties associated with specifying objective outcomes and performance indicators that will allocate resources according to an ordering of societal needs; and relate to both the quality of assistance provided and the quality and sustainability of jobs attained.

The prices attached to employment outcomes also did not adequately reflect all the costs of unemployment which include not only income and output loss, but the deleterious effects on self confidence, competence, social integration and harmony, and the appreciation and use of individual freedom and responsibility.

Subsequent evaluations of the effectiveness of the Job Network showed it failed to provide sustained employment prospects for the vast majority of the case load.

Not a lot has changed in 14 years since that damming report was released.

One of the features of the system that was most repugnant was known as “breaching”. The Government of the day (in 2002-03) reacted to the early criticisms of its failed program by reinforcing what it called the Active Participation Model – aimed at reducing the outlays that were rising as unemployment continued to increase in the face of the on-going failure to stimulate aggregate demand.

The Government argued that the Active Participation Model would ensure the case loads carried by the Job Network agencies would decline.

Underlying the new approach to “mutual obligation” was the view that improving the effectiveness of the employment services system depended on changes to the system itself, and not on the expansion of employment opportunities.

The enhanced ‘effectiveness’ of the system was sought by a reconfiguration of the payment structure and greater integration between Job Network services and mutual obligation activities.

As a result, the ‘Job Search Training’ and ‘Intensive Assistance’ programs were recast as ‘Intensive Support’ and ‘Customised Assistance’. A job seeker who remained unemployed after 12 months would receive Customised Assistance (CA) for a further six-month period.

After that if the individual had not found work they would be required to undertake another Mutual Obligation activity, which included Work for the Dole programs.

The extant data at the time showed the Work for Dole programs to be a categorical failure in providing a bridge to paid-work in the open labour market.

Data on labour market assistance outcomes for the year to March 2002 showed that three months after completing Work for the Dole just 11.6 per cent of participants were in full-time work. Half of the participants remained unemployed or had withdrawn from the labour force while one-quarter were in receipt of further assistance.

Not a lot has changed since. The performance of the Job Services sector in Australia is appalling.

Further, the Government introduced penalties that would be imposed on the long-term unemployed people found to be – in the Government’s assessment – not genuinely seeking work.

The Government gave the Job Network providers the power to identify and punish unemployed people that the Government believes are deliberately avoiding work.

Once identified, the Job Agencies were also able to force these workers to complete double the hours in work-for-the-dole programs and issue on-the-spot suspensions of payments for unemployed people who failed to attend interviews.

This penalty system was called breaching. The data that emerged was shocking. There was an escalation in the number of people subjected to the loss of benefits.

The evidence was that Job Network providers acted capriciously and had no specific procedural guidelines for making decisions about breach recommendations leading to inconsistent treatment of the unemployed within a single organisation.

We learned that unemployed workers who failed to attend a first interview were more consistently and readily breached than others. Rules of natural justice were not being correctly applied in all instances (some unemployed were subjected to unjust decision-making processes).

Job Network agencies used strategic breaching to remove potentially “non productive” unemployed from the books – which meant – workers who they felt they were unable to secure any further placement funding for.

Moreover, those that were being breached include schizophrenics who were prone to episodic illness and unable to attend interviews on days when they were suffering the most; homeless people who were unable to access mail at old addresses informing them of an activity test interview and other disadvantaged citizens.

The reality is that the new compliance regime that the Australian Government introduced did not address the substantive cause of the mass unemployment – the failure of the economy to provide enough jobs.

It established a new industry – with private parasites pursuing a profit motive by meeting perverse performance targets specified in their contracts. These agencies were meant to support the unemployed but quickly assumed a police-type role imposing fines and disciplining the unemployed.

The system failed to achieve any of its stated purposes which were, of-course, not the real roles that the government was interested in pursuing anyway.

A major OECD report came out in 2001 endorsing the Australian government’s supply-side approach – OECD (2001) Innovations in Labour Market Policies, The Australian Way, Organisation for Economic Co-operation and Development, Paris – which concluded that Australia has lead the way in introducing “market-type mechanisms into job-broking and related employment services” (Page 11).

The OECD concluded that in terms of labour market policies Australia “has been among the OECD countries complying best” (Page 14) with the OECD 1994 Jobs Strategy. It is tangential to this blog – but the evidence doesn’t support the OECD’s conclusion. Australia’s Work for the Dole scheme is poorly conceived and the Government has admitted it is just a “compliance program” forcing workers to work for their miserable (below poverty-line) unemployment benefit.

The British government, under New Labour, followed Australia down this very sorry path and the movie – I, Daniel Blake – tells us what a disadvantaged worker can expect.

The UK Work Capability Assessment, which Daniel fell foul of (but the fault was in the tool not the applicant) echoes the way the Australian system evolved.

The UK Labour government introduced this pernicious piece of bureaucracy that is designed to prevent people from getting sickness benefits rather that facilitating their access on medical advice.

The instrument is similar in nature to the Australian Job Seeker Classification Instrument (JSCI) which was introduced to deliberately slim down the pool of income support reciplients. It is a pernicious survey instrument designed to humiliate the disadvantaged and get them off benefits.

On April 22, 2006 I wrote the blog entry (in my old blog format) about the Disability Support Pension and the application of the JSCI:

The Federal Government at its finest!

Today I became aware of a case of a person in their late teens who is severely autistic, is stricken by life threatening epilepsy and has late onset Rett Syndrome. We learn that Rett syndrome “is a childhood neurodevelopmental disorder characterized by normal early development followed by loss of purposeful use of the hands, distinctive hand movements, slowed brain and head growth, gait abnormalities, seizures, and mental retardation … gradually, mental and physical symptoms appear … loss of muscle tone … [loss of] … use of … hands and the ability to speak … The loss of functional use of the hands is followed by compulsive hand movements such as wringing and washing … the inability to perform motor functions – is perhaps the most severely disabling feature of Rett syndrome, interfering with every body movement, including eye gaze and speech.”

So this person cannot speak, cannot eat or wash without assistance, is not toilet trained and requires around the clock care and attention from family. She is also on disability support pension (DSP).

Yesterday, she received a letter from the Federal Government which said that because she is receiving DSP she is subject to the new welfare-to-work rules. The letter then said that according to these rules she is now required by law to look for work or face loss of entitlements.

This is a Government who deliberately runs Budget Surpluses such that those who are willing and able to work cannot find enough work because there are not enough jobs or hours of work created in the economy. And at the same time, the genii in FACS and DEWR dream up ever more pernicious ways to humiliate the most disadvantaged of our citizens, including those who are unable to work. So, the Australian Government at its finest.

This is a common example of how these neo-liberal governments, obsessed with the meaningless (running budget surpluses at all costs), inflict inhumane treatment on the poor.

The ‘sanctions’ that Daniel and Katie (the single mother) face in the movie are styled on the breaching that the Job Network oversaw.

Treating the poor with contempt as if they are criminals – who incur fines for crimes – is the hallmark of these systems.

British Sociology Academic Zygmunt Bauman provided a summary of his 1998 book Work, consumerism and the new poor in the 1999 New Internationalist article – The burning of popular fear.

He wrote:

The poor will always be with us, but what it means to be poor depends on the kind of us they are with …

Us have been pushed and prodded by years of misleading information about macroeconomic options, about the causes of mass unemployment, about the capacities of currency-issuing governments, about the powerlessness of individuals to gain work if there is a systemic failure to generate enough jobs, and more.

It has led to a cruel indifference towards our fellow citizen. We have normalised this disdain and cruelty in these bureaucratic systems such as those administered by the DWP in Britain.

All of the travails that Daniel Blake encountered are political choices not determined by any natural order or government financial shortage.

The UK Guardian article (September 11, 2016) – I, Daniel Blake: Ken Loach and the scandal of Britain’s benefits system – is correct in saying that:

This is a political choice, not the outcome of a feckless sub-stratum of society. The facts ought to speak for themselves. But such is the toxicity of the shirkers-versus-strivers message, delivered by all the leading political parties, that facts are no longer believed. That’s why we need the visceral emotion of Loach.

Political response

The political response has been predictable.

The British Labour Party have embraced the movie. Jeremy Corbyn urged the British PM to see it.

The Shadow Chancellor, John McDonnell was reported as saying (Source):

I, Daniel Blake was one of the most moving films I’ve ever seen so I’m very pleased we have teamed up with Ken Loach to urge people to go and watch it at these special screenings taking place before the autumn statement.

We’re living in an I, Daniel Blake society as a result of having the Tories in power for six years. The government should be caring for sick and disabled people, not making their lives worse.

But he also has introduced what he called the Party’s “fiscal credibility rule” and promised he will “balance the budget” if in office.

Until he rejects the central macroeconomic premises of neo-liberalism it is hard to see British Labour doing anything very different to what it espoused when in office last time under the guise of New Labour.

The Conservatives called the movie a “fictional film”.

Just the Groupthink responses we should expect.

I note that recently, the UK Disability News Service (DNS) has just secured a Freedom of Information request against the Department of Work and Pensions to force so-called “internal reports detailing the way it manipulated media reporting of benefits cuts” to be made public (Source).

Suppression of information is just one way that these fascist-style neo-liberal governments hide their disgusting behaviour – just in case we find out.

For example, on the issue of benefit sanctions, which feature in the I, Daniel Blake movie, the DWP reports show how it manipulated the media to successfully “dampened interest” in the sanctions report, which had the effect of ensuring “a smaller spike in coverage than previous critical reports”.


Films like – I, Daniel Blake – are hard to watch. But they are essential if the lies and misinformation spread by these increasingly authoritarian and cruel governments are to be exposed.

The Italian vote and the ‘surprise’ votes before it (Trump, Brexit) signal that we are getting sick of the elites and their ways. But until we can really understand the way these systems reinforce the hegemony the elites enjoy we will only get the responses of people like John McDonnell – ‘things are bad but we need to balance the budget’ type statements.

Unfortunately the cinema was near empty last night.

That is enough for today!

(c) Copyright 2016 William Mitchell. All Rights Reserved.

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