Nicholas Gruen:            Here we are.

The Mint:                     Good day Nicholas. And thank you very much for joining us to talk to the Mint today.

Nicholas Gruen:            Hi Henry. Evening here and morning there.

The Mint:                     Indeed. The light’s just coming up. I’m beginning to see the snow on the trees outside.

Nicholas Gruen:            Oh?

The Mint:                     Oh yeah. It’s beautiful weather around here. Very, very cold. So today we were going to talk about what might be largely called poverty alleviation programmes, or action by government to try and address the impacts of poverty and dysfunction and so on. And I wanted to start by asking you how you got interested in these programmes, what it was that sparked your involvement.

Nicholas Gruen:            In 2009 I was chairing a government inquiry into the internet and government. Social media was coming along and one of the people on that inquiry was also involved in an organisation called the Australian Centre for Social Innovation, which is a bit of a fancy name really. In some ways I think it would be better if it thought of itself in more traditional terms. The British have this term charity that we don’t tend to use so much, but it’s an ancient word, goes back at least to the King James Bible and it’s quite a good word. And so, this was an organisation quite influenced by some British writing, by people like Geoff Mulgan from Nesta, and it was looking at this thing it called social innovation, which is to try to reconfigure certain kinds of relationships which have not worked out and which are producing bad results. And a good example of this was they were trying, well they were, so this is now 12 years ago and they were bringing the idea of co-design, which is now quite a lot more common. But it was a pretty new idea in those days, which is a shocking thought but it’s true.

The Mint:                     Yes.

Nicholas Gruen:            And they were bringing this idea of co-design, and the person, one of the staff of this organisation had been working in child protection. Now, child protection, don’t think of the Catholic Church and sexual abuse. Think of families having to have their kids taken off them because their families are so abusive and neglectful to those children. And around the world, it’d be interesting I don’t know this, but it’d be interesting to know how different country, the relative performance of different countries here. But I think it’s a pretty reasonable, generalised statement that around the world you take the child out of a disastrous situation and you place them in an only mildly less disastrous situation. The results of this process are almost invariably awful. There are obviously some success stories, but as a class of activity, how’s this for a statistic that half of the children that are taken off their parents are taken off parents who were taken off their parents.

The Mint:                     Yes.

Nicholas Gruen:            So this is a terrible story, and Lemn Sissay, the Chancellor of Manchester University I think is a guy who was taken off his parents and put into this foster care system and has survived, but also speaks to the psychological, the immense psychological damage that it’s done.

                                    So this group built an alternative to taking, well, built an early intervention programme, which was called Family by Family, and what they did is it’s quite instructive to go through what they built, because they spent quite a lot of time with families, talking to them, asking them what they thought would work, why families fell into crisis and so on. And they eventually designed this process where local families, they would basically recruit families to set up in supermarkets and so on, and they recruited families into two groups. One, a group that identified themselves as at risk of some kind of, and there are quite a few families with young kids who feel that I think. And then families who were in the local area who would like to mentor such families, and it would be a good thing if those families had been through tough times themselves.

The Mint:                     Right.

Nicholas Gruen:            Now, in addition to this, everyone says, oh how lovely, because people can, I call this the Rousseau, the Jean-Jacques Rousseau move that really civilizations are the problem. People are terribly lovely and we just need them to have a chat and get on with each other and stay away from the bureaucrats and the experts. But I think this was a much more intelligent process, because this mentoring process was then paid with an honorarium and coached by a trained family coach.

The Mint:                     Right.

Nicholas Gruen:            Now, these families have got a hell of a lot of work to do. They’re in a very difficult situation. Their habits of mind have got all kinds of issues. There’s often some domestic violence. We call them families that were mostly single mothers under a fair bit of stress. And so, I saw this process built and I was very enthusiastic about this, and I also thought that me and this organisation were a kind of marriage made in heaven, in this sense that I could certainly see how what they were doing showed up so powerfully what was missing from my own training and all my instincts as someone who deals with in government policy. But it was also very important for somebody to think about how policy itself could pick this up. And by that I mean, and by pick it up, I don’t mean fund it and have some pilots, because everyone does that. That’s going on all the time. I mean build a mechanism in which, if this process starts to perform much better than what we are doing, that it starts to expand and be funded. And the other stuff, the legacy stuff starts to get defunded.

The Mint:                     Right.

Nicholas Gruen:            Now that simply doesn’t happen. It doesn’t happen in this country and I dare say it doesn’t happen in your country. It’s incredibly difficult to get that to happen. Even with the best will in the world, and I’m afraid I would never accuse our bureaucrats of having the best will in the world. They have some, quite a lot of good will, but they certainly don’t have the best will in the world. Even if you were trying, this would be a really hard thing to do for reasons we can talk about. But we are not really trying. Everyone’s going through the motions, filling in the forms, protecting their minister from embarrassment, appearing in prime minister’s questions. And it’s sort of, in a thousand subtle ways, it’s basically impossible to have this new method displace the old one. You can have it on the outskirts, you can have it doing lots of nice things, but I’ve never…

                                    Here’s a challenge for your audience if they can email me with an example. Even something quite small where something was done one way, somebody showed that you could do it better, and grew a system that did it better and got rid of the old system. You tell me about it, because we’ve been talking about doing this for a generation or more.

The Mint:                     So what happened with this specific example? How did that turn out?

Nicholas Gruen:            Well, it’s still going. It made its way to two states of Australia. It was in, I think, two possibly four suburbs in Adelaide. It’s still functioning in some suburbs in Adelaide. It was funded and then defunded in New South Wales. But it never, I mean, after five years my attitude was, well, you either grow this thing or you close it down. But nobody wanted to do any either of those things. So, it sort of settles in and people funded, and then all the poor mugs who are in it, the poor underpaid mugs, and families in difficulty who are now beneficiaries of this system, they all go to the government, either cap in hand or run a bit of a political campaign to try and hang onto on to their money. We see these campaigns all the time. We don’t know how you’re going to tell their lobbying from the lobbying of people who are running some programme that doesn’t work. You can’t.

The Mint:                     And did it work dramatically better?

Nicholas Gruen:            Well, I think it did. If you read my long reflective piece on this, which you can put in show notes, I’ve sent it to you. The evaluation of it, what was kind of inconsequential, so I mean, remarkably enough, the government department that paid several millions of dollars to run this programme in New South Wales wouldn’t hand over the data. Why wouldn’t it hand over the data? Well, everyone was relatively well intentioned. There were privacy issues, I presume. It wasn’t top of mind for anyone. There was a government, sorry, there was a university that got quite a lot of money from us to do the evaluation. The evaluation was completed, they got their money, and they tried to do it in a way that was obviously not going to work, which was they tried to compare different areas with and without the programme. And the problem with that was there were only a few families in the area with this programme, and it was a waste of everyone’s time.

                                    Now that’s to be expected. That’s roughly how this system works. The academics are trying to get a paper published. The departments running the legacy programme and doing their best. And someone’s overworked, and someone is a bit lazy. Just the usual things. And it was hopeless.

                                    I could talk quite a lot more. So that’s the simplest answer. The more complex answer is that this programme, if it worked, would’ve worked over a very broad range of outputs. It would’ve generated better educational outputs, better health outputs. But a particular department will only be asking a question like, has this programme reduced the chances of having to remove the children? Now I can give you just straight out anecdotal evidence, it’s in the video and I’ll send that too, which leaves you in very little doubt that it’s extremely likely that running this programme would’ve saved that one part of government quite a lot of money. But other fashions will arise, and new entrepreneurs will come to the government saying, we’ve got this new system that we got from Holland and we want to run this. And so, you bumble along for a while. You’re never in play. This is never taken seriously.

                                    This programme is called Family by Family, and I developed a quite elaborate idea, which I called Family by Family as a platform. Now Family by Family as a platform was the idea that with the coach, one of the things we noticed was that services that were already provided, like autism sort of examinations and advice and so on, the families never went to them and they didn’t get diagnosed. But with the trained family coach and the mentor, the mentor would say, because the mentor got some training as well, and the mentors would say, come along with me to the autism centre and we’ll get that checked out. And I can show you videos of single mothers with tears in their eyes saying, now I can at least start working on what the problem is. I know what the problem is.

                                    So that was improving health and that would’ve improved educational outcomes. And the idea was, that you would build this programme and you would start building modules onto it. So I imagine if the family coach was liaising, and the mentoring family, were liaising with the local school on remedial teaching, with the local health area network on autism or mental health, or what was it stress, anxiety, bullying, whatever it might be. So if you’ve got a healthy system, those things ought to be the kinds of things that it’s trying to do. Now, for reasons that I foreshadowed a minute ago, it’s actually quite hard to think through how you would do that organizationally. But I can confidently say that no system I’ve ever seen has even ever tried to do that.

The Mint:                     And why do you think the standard don’t like this sort of approach? Or what is the-

Nicholas Gruen:            Yeah, it’s a good question. It’s a very good question, and I’ve sort of asked you to ask it, so you have. So now I’ve got to put up or shut up. So think about it, so I’m the head of a department or I’m a senior executive in the Department of Community and Family Services and I run a 1200 social workers in New South Wales who run this system of assessing families, looking at notifications, taking them off, making decisions, or going to court to get kids off their families when they have to, and so on.

The Mint:                     Yup.

Nicholas Gruen:            Now, every now and again one of these children in foster care dies.

The Mint:                     Yeah.

Nicholas Gruen:            And if they die in foster care, you’ve got to have a pretty good answer for the minister, because at question time, the minister will be asked a question about it. So you have a mature system, it doesn’t work in helping kids very much. Doesn’t work very much at all. But it’s built out, it’s battle tested, it’s got a logic that can be explained to the community. It’s got a logic that the Murdoch Press won’t send up, particularly, because imagine if somebody dies and a mentor family is involved, well you’re just easy pickings. The journalist, if they want to turn this into a story, they’re not going to go and say, oh that’s very interesting, there’s been 500 children go through this system and we’ve had one death. What’s the death rate in the other system? That’s not how the laws of news work.

The Mint:                     No.

Nicholas Gruen:            So you are keeping your minister safe, and you might have a sign in the foyer saying we put people first. But when you are keeping the minister safe, you are putting the minister first. Everything else is not interested. Not interested. If the minister needs a brief by 2:00 PM for question time, that is what I call the institutional imperative.

The Mint:                     Yeah.

Nicholas Gruen:            So what you’ve got is you’ve got some hard imperatives, and then you’ve got all this soft stuff. Now the other thing is imagine if you were doing this and you decided to roll it out for 20% of the state, and then the social workers start getting redundancy notices, because you’re not using social workers, you’re using trained family coaches.

The Mint:                     Yeah.

Nicholas Gruen:            Well that’s another series of TV programmes and questions in parliament, and all the rest of it. And are we completely sure that this system is better than the legacy system? Well no, not really, but we’re pretty confident. Are we confident that we can get that across? Are we confident that we can get across the more sophisticated thinking in this? Well, not really. And can you persuade the treasurer and the premier of New South Wales that when push comes to shove, they’re not leaving themselves open to mortal political danger?

The Mint:                     Right.

Nicholas Gruen:            It’s hard, isn’t it?

The Mint:                     And I suppose fundamentally, the people who are potentially being served, by definition, don’t matter in a sense in that they’re [inaudible 00:17:20] least powerful. So that-

Nicholas Gruen:            Yeah, and they’re.

The Mint:                     … Risk is trying to do something about it, then actually leave them to…

Nicholas Gruen:            That’s right.

The Mint:                     Suffer.

Nicholas Gruen:            That’s exactly right. That’s exactly right. But I never like to, I mean, in a way I’ve, because it’s slightly easier to explain the harder edges of this, I’ve explained the harder edges of this. There are lots of much more ambiguously soft edges where people just feel much more comfortable doing what they do. You’ve got this new route set of routines, people get upset, people stuff things up. If you are running a big organisation, just a few people who are really unhappy give you a lot of headaches. So if you want this to happen, you’ve got to start building headaches, you’ve got to start building countervailing headaches, you’ve got to start building a few. So this is where some ideas of mine, like I call the evaluator general come from, which is that someone is independently trying to measure the effectiveness of this new system at the same time, not just evaluate the new system, but say compared to what?

The Mint:                     Yes, yes.

Nicholas Gruen:            And compared to the legacy system. And then you start to generate the sweaty palms in government and in the organisation. Then somebody says that we’ve got the social workers union hopping into us, the public service union’s hopping into, they’re on tele tonight, and the person says what do I do to stop this? And then the answer comes back, well, or if you do stop it, you’ve still got this question to answer, which is, your programme looks like it’s three times as cost effective as the thing that the social workers are running. Do you really want to defend the legacy system? So that’s sort of the idea that you’re trying to build the political economy of change.

The Mint:                     Some of that, let’s just, can I go back on that? Because, just to be clear, if you can have some sort of external body that is highlighting the inadequacies of the current system compared to the possibility of doing things differently.

Nicholas Gruen:            Yeah.

The Mint:                     Then you can bring pressure on the minister to effectively take seriously the alternatives.

Nicholas Gruen:            Yeah, that’s the idea. Since, yeah, I think the other thing to do is to find a way to build institutions. And this isn’t something you can do quickly, but to build institutions which do empower the beneficiary community, and then you get them to say, would you rather more of this or more of that. But that isn’t something that can be done in a consumer charter. It’s something where it’s a bit like building the agency and capability of those families with a coach. These are people who have got problems with feeling their own agency in the world and they need to develop that. So we have no political models like this. We have elections and we have juries, but there are very few representative groups that are chosen by juries, and there are representative groups that are chosen by membership organisations and elections, and they tend to choose activists with their own kinds of imperatives. Their imperatives often are refracted through media imperatives.

The Mint:                     Yeah. Can we just go back to the challenge of setting up this independent, what you call an evaluator general?

Nicholas Gruen:            Yeah.

The Mint:                     I suppose people might say, well we have the national audit offices and things like that.

Nicholas Gruen:            Yeah. Yeah.

The Mint:                     And don’t these institutions also have their own, sort of, I mean they can’t be too problematic because then they get shut down if they bring too much trouble and so on.

Nicholas Gruen:            That’s right.

The Mint:                     So ain’t they also get bought into the system, because ultimately ministers are still in charge, and they don’t want people giving them a hard time [inaudible 00:21:39].

Nicholas Gruen:            Exactly. Exactly. And that’s why I made the point that it’s better if you steward this independence into the beneficiary community.

The Mint:                     Yeah.

Nicholas Gruen:            Because you’re doing it for the beneficiaries. That’s hard. But as you point out quite correctly, building something in government that is genuinely independent rather than has an independent stamp on it, is a very different, those are very different things.

                                    And the classic example, there are two good examples of this. One is an area called regulation review where, Australia led the world on this, but they didn’t lead it anywhere in particular. And in 1986, I think America and Australia came up with these policies which were for, in Australia we called it Minimum Effective Regulation, and the idea was that you didn’t allow regulation through if you hadn’t done a regulatory impact analysis that demonstrated that the benefits outweighed the cost. Principle a perfectly good idea, but in practise that’s not how it worked. What happened was that it became an additional piece of bureaucracy, a piece of regulation that was regulating the regulators, and if a minister wanted to get something, the minister would get someone to write a regulatory impact statement and the regulatory impact statement would compare. There were various attempts to codify what were in these statements., And one of the codifications here is that they have to be three options. Well that’s pretty easy to work out how you have three options and the one you want is option B in the middle. Option A is we could shoot parking offenders. Well, that won’t work. And option B is we could counsel them. Sorry, option C is we could counsel people who over park their stay. And option B is that we fine them 50 pounds. And so it’s obvious that-

The Mint:                     Yeah, and you tick the boxes. Going back to the strategy of empowering beneficiaries, I mean the interesting thing there is, isn’t it, that what you are really addressing is the overall inequalities in society, aren’t you? Because aren’t you in a way saying that where you have a really unequal society, the people at the bottom will never get what they really need. They’ll be a sort of performative approach to supporting them. Unless you actually address those fundamental inequalities and give the power moves more to them, they will never be really properly served.

Nicholas Gruen:            Yeah, I think that’s completely true. The problem is that power consists of two things, money, and then capacity to operate in the society on other people. And if you’ve got a university degree, judging by the proportion of people in parliament who’ve got university degrees, compared to the proportion of the community that have got university degrees, and the proportion of people in high paying jobs, and in banks, and wherever else you like, in senior positions, in NGOs and charities, these people have all got university degrees. So these people are high agency people. And if you don’t have as much education as that, in western societies, you are a low agency person.

                                    Now, there will be exceptions to that. Highly charismatic people who are not well educated. So if you’re trying to address the problem, it’s all very well to say yes, we’re just addressing a symptom. That’s true in a way, but you are addressing the symptom at source and you’re trying to say it’s not just a matter of handing some money to you, which you can then spend on grog and cigarettes and so on. I think grog might be an Australian word that you guys don’t have. But anyway, on alcohol and gambling, and all the traps that our entrepreneurs have set up to harvest some money with bad habits. You’re trying to find ways to unpick this. And if you want to just make the world a whole lot more equal, best of luck in the next election. It’s a case of you’ve got to move. I’m in favour of doing it, but there’s not much point in giving people lectures about it. They’ll vote against it, beyond a certain point.

The Mint:                     Yeah. Well that’s interesting isn’t it? Because I mean, I was interested to read the sort of, I suppose the history, the classic history of Sweden where you go back pre-1920s, incredibly unequal, extreme relative to the rest of Europe.

Nicholas Gruen:            Interesting.

The Mint:                     That there’s a sort of revolution of sorts, or a change, and they build a social democratic country with incredible equality. And then from the nineties onwards, the levels of equality are heading back in the sort of opposite direction.

Nicholas Gruen:            Yeah, yeah.

The Mint:                     And one wonders, what is it… Obviously once, and I suppose you can say in the UK as well, the levels of inequality dropped towards the seventies, and then the eighties they started going up again. And it’s like somehow the elite tell this story that you could beat us as well, give up on everyone else and join our unequal society at the top.

Nicholas Gruen:            Yep. Yeah. Well it is. It is very like that. And we have systems of power that are entangled in systems of knowledge, and those people who have got more training are in a position to advantage themselves. They also run the knowledge systems, and I guess you hope that if they’re run well with some sort of sense of noblesse oblige, that’s the best we’ve ever managed really is the sort of, I’m not saying this is utopian by any means, but I think the social contract that we had with professionals say until the 1970s or 80s, which was you become a professional, you behave with integrity. If you are a surgeon, you don’t pick up referral fee. You don’t pay referral fees to a doctor to send you people to operate on. You end up maybe you paid a lot more money than your average person. You end up playing golf, if that’s what you want to do. You’re highly respected, but you’re not a billionaire, you’re not massively wealthy, you’re just a pillar of the community.

                                    Now, I’m not telling you that this is nirvana. I grew up in that world and I thought there were lots of things wrong with it. I mean, not that it’s necessary to that world, but we all know about that world being more racist, and sexist, and a whole bunch of other things. There were plenty of things wrong with it, but it was a world which was much more culturally unified. And I remember going to the football when I was a kid and I sort of felt like I was an Australian, and I was with other Australians, and we were all football. And that you can’t even get that feeling at football anymore. There are wealthy people seats and the cheap seats, there is different ways of behaving. These are all somewhat less pronounced than in the UK. And the UK has superficially divested itself of quite a lot of the uglier sides of its class system. But the educated versus the not so well educated classes, that’s the great cleavage in our society. And what is extraordinary is that we have endless, endless debate and action on this thing called diversity. But the one thing that gets left out of it is diversity of levels of education. That’s not what anyone wants to know. They want highly legible issues to deal with black, white, sexual orientation, all this kind of stuff. I’m not against those things, but the place is being torn apart.

                                    We’ve got Donald Trump, we’ve got Brexit, we’ve got the Murdoch Press just making hay out of the resentment of people feeling that they’re being ignored. Why do they feel they’re being ignored? Because they are being ignored and vilified as racists and all this sort of stuff. It’s a very, very toxic brew, and that’s where we are now.

The Mint:                     And any hope to end this on, in terms of, because we’ve been going there for some time, haven’t we? Are there any ways out? Do you see any-

Nicholas Gruen:            Yeah, yeah, yeah.

The Mint:                     … Leading the way out.

Nicholas Gruen:            Yeah, look, I think there are signs of, you’ve now got a government in the United Kingdom that isn’t obviously incompetent and utterly disregarding of even the most basic decencies or proprieties I suppose. So that’s a step forward for you. Donald Trump seems to be somewhat on the skids. I mean, the really exciting news came from Australia where we had a government, which was quite like the Boris Johnson government, I mean, it came from a conservative party that called itself the Liberal Party. But it went from being a conservative party under John Howard to being like Boris Johnson, utterly just sort of running one idiot culture war campaign a day and couldn’t do anything. Told us all it was laser focused on getting vaccines and ended up at the back of the queue. And there was evidence that Pfizer had turned up within a couple of weeks to say, do you want early access to this vaccine? That’s just one example.

                                    So this was disastrous. And then what happened was, in I think eight or more of the jewels in the crown of the Australian Conservative Party called the Liberal Party, they lost those seats to independent candidates who were, almost to a person, extremely accomplished professional women who, so people were not, the Labour Party was not going to win those seats. And they were called the Teals and the reason they’re called the Teals is the blue is the colour for the liberals, and they had a green tinge, because they were interested in trying to do the right thing on greenhouse and stuff like that.

                                    And so, two things about the Australian system, well three things I suppose. One is, Australians sense of their own egalitarian values, often honoured in the breach. But then there were two technical aspects of our electoral system, which is compulsory voting, which pushes politicians towards the centre to try and get the votes sitting in the centre, and preferential voting and what preferential voting or instant runoff voting. So you could vote for a third candidate who was unlikely to win without losing your vote as you do in first pass the post voting in the United Kingdom. And that meant that you could actually bring about this situation where these people who were running an appallingly bad government, sort for the Murdoch Press really, I mean they were talking how the world was being overtaken by trans rights activists and stuff like that. I mean, I happen to kind of agree with them, not that the world’s being taken over, but I agree with their point of view. The question, it’s just that this was a circus compared with the sorts of things we needed to be talking.

                                    We still live in open societies and people can put their case and say we are going down the wrong path. So I think there are lots of shoots, green shoots that should be making us somewhat optimistic. And the other thing that makes me optimistic, he said self-servingly, is that if you can work out what’s wrong, and that’s quite closely connected to something that you could, to doing something in a different way that might improve it, then you just have to start persuading people. And we’re in the world, we’re in a world where there’s a lot of people feeling like they’re in a desert and they’re pretty desperate to find an oasis. And I’m in the oasis business. And I think that there are some things that we could do. And I think that if people will give me a go, I’ll put the case well and then they can make up their mind.

The Mint:                     Brilliant. Well great. Let’s stick with the oasis business. I like that. And thank you very much, Nicholas, it’s been a pleasure talking to you as ever.

Nicholas Gruen:            Thanks Henry.


Nicholas Gruen

Nicholas is a policy economist, entrepreneur and commentator, founder of Lateral Economics and Peach Financial, Visiting Professor at Kings College London Policy Institute and Adjunct Professor at UTS Business School.

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