Economic dignity and financial capabilities: connecting principles and concepts
The concept of economic dignity extends how we understand financial capability. It is not just about people having knowledge and skills, but also about how social and economic structures and systems shape their choices.
At a glance
Australians are living in increasingly financialised times. Their financial choices are often constrained by their economic, social, and political context. This paper develops the concept of economic dignity as a guiding principle to develop a fuller understanding of financial capability that recognises that context.
The ANZ Tony Nicholson Research Fellowship is a one-year position funded by ANZ in honour of former BSL Executive Director, Tony Nicholson.
The work of the inaugural fellow, Dr Jeremiah Brown, has concentrated on how financial capabilities can be conceptualised in a way that embraces the needs of disadvantaged and vulnerable households. This work has contributed to the development of a financial wellbeing framework, which will help guide practice and strategic thinking across the sector.
The most common conceptions of financial capability concentrate on a person’s knowledge, skills and behaviours. However, this ignores the structural conditions that people exist in, and this paper critiques this absence.
The paper draws on the Capability Approach and existing literature about dignity to explore how economic dignity can be used to evaluate competing conceptions of financial capabilities.
Amartya Sen’s Capability Approach concentrates on what is required to live a life with human dignity. It provides a useful framework to understand the social, political, and contextual factors that constrain people’s financial choices but that are missing from current definitions of financial capabilities. Recognising the structural and systemic conditions that people must navigate is essential for financial capability that supports economic dignity.
Economic dignity deals with the dimensions of a person’s dignity that are linked to their economic context. It connects to four different ways that the term dignity is commonly used – as intrinsic to people, as a marker of status, as linked to serving a purpose in the community, and as a reflection of manner or bearing.
This discussion paper provides the conceptual work that underpins the framework presented in a companion paper, Economic security and dignity: a financial wellbeing framework.
Last updated on 15 September 2020