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Guest lecture

The Social Foundations of a Free Society

Event series: 

Notes and abstract from Peter Saunders's Guest Lecture presented at the Treasury on 26 March 2002.


Peter Saunders

Centre for Independent Studies, Australia



Social indicators, like crime rates, fertility rates, marriage and divorce rates, prescription of anti depressants, etc, have been changing dramatically in Australia, and elsewhere, over the last 30 years.

Societies are evolving over time and subject to change. Change in itself in not a problem, but it may lead to problems if it occurs too rapidly.

Saunders' considers five key areas (or core institutions) where the balance between individual freedom and social responsibility has been shifting in Australia and New Zealand:

  • Family life;
  • Education system;
  • Community life;
  • Social welfare; and
  • Common culture.



Family life

Family structure has been undermined by the tax and welfare system and by family law reform.

For example, the living standard of couples with children is 60 percent that of couples with no children.

Education system

Education standards in Australia are lowered by producer capture of government schools. For example, government schools are not required to publish indicators of achievement rates.

Moreover, more and more parents opt for sending their children to non-government schools and hence pay for both private and government schools.

Community life

Community mutualism and voluntary activity are crowded out by government initiative.

Community life is important because it creates social capital and cohesion. Social capital means being able to trust other people. Survey data suggests that trust has been declining.

Social welfare

Welfare has not reduced poverty, but has increased dependency.

Poverty estimates vary dramatically across studies.


Individuals have become increasingly risk averse. There are two strategies to deal with risk aversion: (i) avoid risk (by implementing regulation), or (ii) resilience (insuring against risk).

As the way forward, the key for welfare is to get people into work. Australia, New Zealand and the United Kingdom can probably learn from the United States, where welfare roles have successfully been reduced.

The welfare system of the 21st century will be one of asset based welfare, where people pay for an increasing proportion of their and their children's education, provide for their retirement, etc.

Society needs more common norm and values. The law no longer makes any statements about morality.

Last updated: 
Monday, 29 October 2007