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Wednesday, December 26, 2012

Labor needs to “Take the High Ground” on the Economy

above: Australian Labor Treasurer Wayne Swan made the right call on the surplus
The Federal Labor Government's reversal on the Federal Budget Surplus was considered a failure by some, but grassroots Labor activist, Tristan Ewins argues that Wayne Swan has made the right call on this one: Although unfair attacks on sole parents, the disabled and others need to be re-thought in the new context.  Labor needs a bold social wage reform package, fundeded broadly by progressively extracting a fairer contribution from the top 15 per cent.
nb: our Facebook group can be found here:!/groups/102658893193637/
Tristan Ewins
December 27th 2012

The headlines of the Melbourne Herald-Sun on December 21st proclaimed “Julia Clean Bowled – Third Broken Promise as $1 billion surplus axed.”  Other headlines further into the paper announced: “Swan comes clean on deficit” and  “Budget blows credibility of Gillard, Swan.” 

To be fair, within the pages of the Herald-Sun there was some deeper and more balanced analysis – admitting the objective necessity of abandoning the surplus at this particular conjuncture.  But clearly the editors of the publication were aiming to influence via first impressions: via the power of headlines; and the likelihood that many readers would not actually read through all the material.

So what of the reality, then? 

With a world economy in crisis, even affecting Chinese growth – Australia has been hit; and so too have Australian tax revenues – including the GST and Company tax.   Notably business is actually supporting Labor with regard postponing the surplus – well aware of the “multiplier effect” stimulus has upon the economy, and thus upon consumer and investor confidence.  Tony Abbott is decrying Labor as “spending like a drunken sailor” – but this is nothing more than a play upon people’s misassumptions and prejudices.  In reality Labor has held tax revenues down as a proportion of GDP, and has ‘robbed Peter to pay Paul’ – hitting Single mothers and many disability pensioners to provide some ‘fiscal room’ for Gonski and the National Disability Insurance Scheme. (NDIS)   

For his part, also, Abbott has to explain how he will deliver his Paid Parental Leave for the upper middle class, while withdrawing  the minerals resource rent tax, as well as the carbon tax, and restoring upper middle-class welfare in the form of a broad-based Private Health Insurance Rebate.  And Liberal support for the NDIS is compromised by hysterical and deceptive panic-mongering about its price-tag; projecting into the future – without explaining the context of inflation – to provide a distorted impression of its ultimate cost. Lastly: Abbott’s agenda of cutting expenditure at this particular conjuncture would be deflationary and contractionary – a criticism of him which Labor and the corporates seem to have in common.

 At the same time Liberal State governments are imposing austerity in their irrational drive for a ‘surplus at any cost’.  Again, this is about retaining the political advantage on “perceived economic competence”.   Having consistently distorted the question of economic management as approximating the management of a household budget, at all levels the Conservatives cannot confess the truth without undermining their political position.   Thus in Victoria Ballieu has gutted TAFE expenditure to achieve a surplus: when in fact stimulus is required; as is investment on infrastructure, education and training to overcome capacity constraints.  User pays mechanisms – for instance increased public transport charges and increased costs for license renewal – are also being imposed to bridge ‘the fiscal gap’ from falling GST revenue.   While the Liberals like to avoid the word ‘tax’ – the effect of these measures approximate regressive, flat taxation.

But what should be done? 

Budgets need to be balanced – but not always: only over the course of the economic cycle. And this need not imply ‘small government’ during periods of growth either: so long as the ‘inflation genie’ is contained some way or another – preferably progressively via taxation on the wealthy and upon conspicuous consumption.  (also inflation shouldn't be raised as an excuse for distributive injustice and exploitation) During times of relative stagnation (ie: right now!)  – and in some parts of the world outright Depression – the time is still right to bring forward big infrastructure programs for quality of life and to overcome capacity constraints.  Again: this has a ‘multiplier effect’ on growth and confidence. 

At a state level the Liberal State Governments also need to face reality.  Without investment in education, health and infrastructure the economy will wither – and human beings will suffer.  The Conservative State Governments have argued meekly for an increased GST to overcome the ‘fiscal gap’ – but surely they perceive the bind Labor is in: restrained by the same ‘small government and surplus at any cost’ mentality which the Conservatives themselves have nurtured.  If the State Governments are to acquire the funds they need it is imperative that they come out consistently, openly, clearly and loudly in favour of increased taxes, and against the lie that surpluses are always appropriate.  No matter how politically unpalatable it may seem, a bipartisan consensus is necessary right now, here - in the national interest. 

And in other words the Conservative State Governments need to publicly refute the position taken so far on this theme by the Abbott Federal Opposition.  Only by doing can they provide Federal Labor the “political breathing room” to do what is necessary to restore State Government finances.  To avoid embarrassment, Abbott himself could finally be responsible: taking the lead in conceding that we still live in precarious economic times; and hence action on the tax/stimulus/services/infrastructure front is necessary.

Finally: both Labor and the States need agree to progressive taxation reform – which is fair both to most working class families and to the disadvantaged.  Increasing a flat, regressive GST is not acceptable.   Yet if these conditions are met – then ‘the ball will be in Federal Labor’s court’ – to reform tax, maintain and expand infrastructure and services, and provide economic stimulus in uncertain times.

But even this compromise should not be enough for a reforming Labor Government.  Gonski and the NDIS need to be “locked in” (with a price tag of about $14 billion) – and without ‘robbing Peter to Pay Paul’ again with regards critical social programs – or else reducing ourselves to empty, token and distant promises. To ‘deliver the goods’ for 2013 there is a need to raise tax as a proportion of GDP.  

As against the popular assumption any tax reform would comprise ‘electoral poison’ there is the contrary argument that improved infrastructure and services – paid for via the progressive targeting of the top 15% wealth and income demographic – could appeal to a broad class base of support.   Such an emphasis would be electorally viable on the basis of the economic interests of most Australians; but broad-based enough to bring in meaningful revenue.

Specific measures could include removing superannuation concessions for the top 5 per cent income demographic – bringing in over $10 billion.  Meanwhile reverting to 75% dividend imputation (tax concessions of investments) could bring in over $5 billion while affecting mainly the wealthy: and with other (small) investors compensated via tax and social wage reform elsewhere.  Should an incremental approach work, here, Dividend Imputation could later be reduced to 50% - bringing in over $10 billion. (in today’s terms) Company Tax cuts could – and should – be put on hold indefinitely (business needs to contribute to the training and infrastructure it benefits from); and income tax reform could also target the top 15% income demographic.   A minimum Company Tax rate could be imposed; land tax imposed on properties valued over $1 million; and further  taxes imposed upon economic rent in oligopolistic sectors such as mining and banking.  Finally the Medicare Levy could be reformed to broaden its scope, apply a more progressive and graduated structure, and provide a desperately-needed boost to Aged Care – caring for the most vulnerable, and removing regressive user-pays charges that hit working class families hard. 

The aim would be to free about $25 billion of new money for socially necessary programs – including desperately-necessary funding for the States - while at the same time providing economic stimulus.  To put this in perspective, this would comprise about 1.5 per cent of a $1.6 Trillion economy)  Further funds could be freed via even better targeting of programs such as the Private Health Insurance Rebate.

The programs that would emerge from such measures there must strike a balance between providing for the most vulnerable (the aged, the disabled, single parents, the poor); and in providing broad-based improvements of  infrastructure, welfare and services that favour the “mainstream” – ie: the great majority of citizens, workers, families.

But time is running out for Labor. Vague and unrealized promises for the future will not be sufficient for the revival of Labor’s fortunes in 2013.   Labor needs to ‘deliver the goods’ with infrastructure, services and social welfare programs well before the approaching 2013 election.  And in doing so it could also do worse than to nail down the Conservatives’ economic irresponsibility in opposing stimulus and crucial social investment with their deceptive ploys on the theme of economic responsibility. 
A Labor government which remains authentically on-message; succinctly explaining such themes as stimulus, economic multiplier effects, capacity constraints, and the economic role of infrastructure, education and training – could outflank the Conservatives with their claims to economic responsibility and competence.  They could break the myth of Conservative economic credentials and competence.
Julia Gillard herself proclaimed at one point that Labor is a cause: and not a ‘brand’. Yet if the Labor cause is authentic, constantly “robbing Peter to pay Paul’, with “one step forward, two steps back” should not be acceptable. And neither should incessant mutual attacks upon character be considered a substitute for policy substance.

 Labor needs to reconsider its recent attacks on single parents and disability pensioners. It needs new initiatives provided without unfair austerity elsewhere. We need to overcome infrastructure backlogs progressively; without inefficient, Ideological and perhaps even corrupt Public Private Partnerships.  A public fast-rail line along the east coast could revolutionize transport logistics for business, and provide opportunities for citizens. And we need to implement the NDIS and Gonski; but also provide for other crucial yet less-politically convenient causes such as reform of Newstart.  We need big new initiatives in Aged Care and mental health – because the most vulnerable of all cannot afford to wait.

Crucial to these initiatives could be the concept of ‘collective consumption’.  That is: If we do not pay for health, aged care, infrastructure and education progressively (and relatively cheaply) as taxpayers – we will instead pay more for these regressively as private consumers.

Swan and Gillard have done the right thing – and the responsible thing - in abandoning the surplus for the time being. While it may have seemed politically prudential at one point, to follow through now would undermine the economy, and also Labor’s credentials.  Now Labor needs to turn the economic debate around – so it is possible to conduct that debate on its own terms.  Yet even if Labor does all this, victory in 2013 is not assured.  Best, then, to lock a big reform agenda in: reforms in tax, social services, infrastructure and welfare that will put the Conservatives on the defensive; reforms they will not dare to wind back.

$25 billion in new social expenditure – and more accommodated through socially progressive savings elsewhere – could provide the vital ‘Labor war-chest’ – to provide much ahead of the 2013 election – and to promise even more in its wake.  Yet even this is relatively modest in the big picture of a $1.6 Trillion economy. That sense of perspective is so often missing in Conservative critiques of Labor programs which (just like Conservative initiatives) necessarily go into the hundreds of millions or even billions.  Even on the Labor Left - which is largely acquiescent on the issue of 'small government' these days - learning to think on this scale is necessary in coming to grips with a genuine reform agenda.

The bottom line is that an end be put to Labor’s decades-long retreat: that by appealing to and providing for both the disadvantaged and vulnerable – and to the ‘mainstream’ of working Australia – we can consolidate an electoral bloc, and begin anew ‘the steady march forward of Labor’.

Monday, November 19, 2012

Reforming Australian Curricula: Why is Kevin Donnelly afraid of a Robust Democracy?

above:  Kevin Donnelly's vision of education curricula in Australia excludes education for active and critical citizenship

The following article puts the case for curriculum reform promoting active citizenship and critical thinking amongst young Australian students.  Specifically, the author argues there should be cross-partisan consensus were all parties truly committed to democracy in practice...

Nb: The ALP Socialist Left Forum Facebook group can be found here!:

Tristan Ewins; November 20th, 2012

Conservative Education commentator, Kevin Donnelly has again been in the headlines – attacking progressive aspects of secondary curricula in Australia.  On November 3rd in Melbourne’s “Herald-Sun” Donnelly was quoted as criticising the lack of emphasis on Britain in the origins of Australia’s system of government. But Donnelly also went further – condemning civics and citizenship provisions in curricula as encouraging students to become “cultural warriors for the Left”.  Indeed Donnelly indicated he was “concerned” by the “active citizenship” emphasis. 
(Herald-Sun, 3/11/2012, p 22)

I have a number of arguments in response to Donnelly’s stance.

To begin – to be opposed to “active citizenship” ‘in principle’ is suggestive of a disdain for democracy..  Active and critical citizenship are the foundation for any robust democracy as any genuine liberal and/or democrat should be able to grasp. Democracy only functions when an informed, mobilised and engaged citizenship is capable of (and inclined and willing to) hold the powerful – including politicians – to account.   When active citizenship decays, so too does democracy – and in this sense the cynicism and disengagement of Australian citizens is a genuine threat.  

But in order to engage constructively citizens require certain ‘intellectual tools’ – to help in formulating cohesive values systems, a sense of their interests, and of different perspectives on the proper rights and responsibilities of citizenship.  Arguably what is required is “education for ideological literacy” and the imparting of ‘skills of deconstruction’ which assist tomorrow’s active citizens in discerning the ways in which ideologies and institutions themselves (both on the Left and the Right) have been socially and historically constructed.  For some the word ‘deconstruction’ is synonymous with ‘nihilism’; but this need not be the case if we do not choose for it to be so.  There remains scope for a certain kind of deconstruction side-by-side the positing of certain ‘universals’: the value of life, liberty, community and a sense of universal humanity; of kindness and altruism; and the value of culture and science as forces driving improved quality of life and self-realisation for all of us.   

Both the Labor Party and the Liberal Party are experiencing severe organisational decline in Australia – and have been for some time.  You would think there would be a cross-party commitment to the principles of active citizenship as a remedy for the drift towards the scenario of a “detached political caste” governing over a disillusioned and disengaged populace.  Education for active and informed citizenship need not simply be a ‘Trojan horse’ for either the Left or the Right – but rather should be considered a revitalising factor for democracy generally; and an empowering factor for all young people.  An emphasis on active and ideologically literate citizenship is about encouraging young people to think critically and empowering them to see through the ‘spin’ employed by all political parties in today’s society, with its emphasis on the short term media cycle.  The result of a more robust ‘active and critical’ civics and citizenship education curriculum would be a stronger democracy; with young citizens capable of ‘reading against the grain’ whether the texts in question are of a conservative, liberal or socialist perspective. 

As a consequence we would have not only more committed liberals or socialists – but also more committed conservatives.  While we might see some young people gravitating towards socialist, labour and human rights organisations, we could just as easily see other young people grappling with economic liberalism; engaging with the ideas of values of, say, Hayek or Burkean Conservatism; or of ‘Christian social welfare centrism’.  Underscoring an active/critical agenda would be an inclusive pluralism as the basis for cross-party consensus.

And this could be achieved in the context of education regarding the principles of the ‘liberal democratic settlement’;  a settlement of agreed liberal, social and democratic rights which provide a ‘framework for relative conciliation’ for societies such as ours.  (although in the spirit of critical enquiry even this would be open to relativisation from critiques both from the Left and Right; including those seeking ‘a new constitution’; which is the substance of any political revolution)   The point would be to consider the role of democracy in ‘setting oppositions free’, but also resolving them peacefully; though accepting civil disobedience as a legitimate strategy where differences are irreconcilable – but not accepting a descent into escalating violence. 

Why is Kevin Donnelly so determinedly opposed to such a scenario?

Both the authoritarian Left and the authoritarian Right would likely “have problems” with an education system which seeks to empower and mobilise individuals to think deeply and critically, and encourage them to express themselves, organise, and participate.  But leftists, liberals, democratic conservatives – should all at least hold to a ‘shared political ground’ when it comes to empowering young Australians with tools of ideological literacy and criticism – not as a ‘Trojan Horse’ for either the Left or Right – but on the assumption that ‘democracy is a good in of itself’.

Perhaps Donnelly has a point: that education about Australia’s historic cultural and political ties to Britain are important – even though ‘unfashionable’ for those planning and formulating this nation’s curricula.  But if there is an important place for recognising the place of Britain in the Australian nation’s cultural heritage, surely there must also be a place for ideological and cultural literacy. 

In part this means communicating the experience of people otherwise excluded in Australia’s historical cultural narratives: including the experiences of women, migrants and indigenous Australians.  But it should  also involve critical engagement with other sources of Australian identity and tradition: whether ‘the ANZAC spirit’, or ‘the spirit of Eureka’.  Importantly: curricula need to be pluralist, inclusive and balanced with regards such content.

English can play a central role in encouraging critical thinking and critical writing – regardless of any ideological prejudice.  The study of History, meanwhile, could be framed in such a way as to critically interrogate values systems – whether that means exploring critiques of capitalism looking at the Great Depression; or exploring the sources of totalitarianism in both its Stalinist and Fascist forms.  To be balanced there could also, for instance, be a consideration of ‘both sides’ of the debate with the retreat of the welfare state and mixed economy from the 1970s. And Politics can provide for a more direct engagement with the political philosophies which underscore our pluralist society: whether socialist, liberal or conservative.   

Finally Pluralism itself needs to be the underlying principle of all such attempts, also: to maintain a cross-partisan consensus on the need for education for active and critical citizenship. 

As a socialist I can nonetheless appreciate the wisdom in Edmund Burke’s words: "All that’s necessary for evil in the world to triumph is for good men to do nothing”.   An active/critical civics and citizenship education model is about encouraging students to think carefully about what is right, and then to stand up for that in the context of participatory democracy.

I implore Kevin Donnelly: think again about your opposition to education for active and critical citizenship.  Commit yourself to a new consensus – based on a genuinely pluralist curricula – which can only strengthen the democracy that we all claim we believe in.  

Saturday, October 20, 2012

Rhetoric and Reality - Labor must stand up for Sole Parents

above: A photo of the author, Denise Allen

In this latest 'ALP Socialist Left Forum' article former Labor MP Denise Allen takes the Federal Government to task for its Sole Parents decision - but applauds Julia Gillard's stand against Abbott. Cuts in the Sole Parents Pension will mean much hardship for our most vulnerable families.

Left-leaning people interested in progressive debate are also welcome to take part in our'ALP Socialist Left Forum' Facebook group - where among other things we promote new posts at the blog, and debate important social themes and issues of the day.   

by Denise Allen, October 2012

Some days the Prime Minister and the Labor Party make you so damn proud you want to shout it from the rooftops.

Last week for example, when our strong and inspiring Prime Minister ripped Tony Abbott a new one and called him out for the sexist bully he is.

It was a day all Australians, regardless of whether you like or support the PM or not – a moment in political history – no one will forget in a hurry.

It makes so many of us Labor supporters proud when the Prime Minister announces new wide sweeping progressive reforms like the NDIS, Carbon Pricing, Aged Care reform and the Gonski Report. Progressive Labor Party reforms akin to the Whitlam Governments Medicare and University reforms.

But on that very same day last week, without very much fanfare, the Labor Party passed – with the help of the Coalition – a continuation of a Howard Governments policy to reduce the income of single parents. 

This Single Parent Pensions Bill is one of the most regressive policy platforms ever introduced by a Labor Government.

This bill, by reverting the Single Parent Payment to Newstart allowance once the youngest child turns 8, reduces the income support of a single parent by up to $100 per week, in some cases more.

That said – it is a slight improvement on the similar policy the Howard Government introduced in 2005 and effective July 1 2006 whereby Supporting Parent payments reduced to Newstart allowance when the youngest child turned 6!

It is designed to coerce single parents back into the workforce.

Now I fully understand that there are many single parents in our society who do not attempt in any way to seek work regardless of the age of their children. But these people – both women and men – are in the minority.

Some are relatively uneducated, have very poor social and employment skills and even if they did have reasonable skills, many live in rural areas where employment vacancies are almost non-existent.

On the other hand, there are many single parents living in the city where rents are exorbitant; transport costs; after-school care costs are an added financial burden.

Taking away up to $100 per week, reduces a single parent’s ability to seek work or re-training and to function as a healthy, happy parent.

The stress that is going to be added to their daily struggle is going to be enormous.

I believe there should be “carrot” not “sticks” to encourage single parents into the work force.

Encouragement should be given to single parents to gain skills by returning to school, through our TAFE system (although now the Bailleau/O’Farrell/Newman Governments have slashed funding to TAFE’s that is going to be so much harder as well) or to enroll in a University.

How a single parent will be able to afford to do that now their income will be reduced by up to $100 per week is questionable – (especially given the funding slashes to TAFE’s).

How will someone without a car manage?

How will someone without extended family support manage?

How will someone who already pays exorbitant rent manage?

What if they can’t get a job for months/years on end no matter how hard they try?

Were these questions even considered when this legislation was being considered?
Whose idea was this to crucify struggling single parents even further?

If the Government is so desperate to find an extra $700m per four years why then didn’t they have the courage to finally attack the rort that is negative gearing, a wealth creation system for wealthy people?

It is true that some people only understand money as a motivation to do anything.

But instead of taking money away from single parents that they use for their everyday living costs, why not offer incentives akin to the baby bonus?  If Governments can offer a baby bonus handout and provide extremely wealthy private schools with huge publicly funded handouts, why can’t they come up with a policy that is more “carrot” and less “stick”; where single parents are encouraged to succeed, not threatened and deprived of vital dollars with which to raise their children on a daily basis.

Those who will scream the loudest about “lazy single parents” are the very same people who will still put their hand out for every subsidy at every opportunity. I have never seen or heard of anyone saying “No thanks, I don’t need the baby bonus” or a wealthy private school say “No thanks, we don’t need taxpayers money to build new a rowing course or swimming pool”…. “let the Government keep it for other more worthy causes.”

I expect this sort of policy from Conservative Governments as it is par for the course for them but not from a Labor Government.

A very wise person once told me that “Governments, in the race to be the ‘best economic manager’ make decisions from a economic rationalist point of view, and in doing so loose all humanity and compassion.  Saying they are “good economic managers” is rhetoric Governments of both persuasions bang on about all the time. The real challenge in being a good economic manager is implementing socially responsible policy that is passionate and well managed.”

This is not socially responsible policy.

It is cruel, heartless, regressive policy that will put many single parents further under the poverty line.

I want to see policy that will assist and inspire single parents to aspire to better opportunities.

This does not do that.

I would expect it of Conservatives but not the ALP.

(As an aside – I am yet to hear Tony Abbott give a commitment in blood to wind back this policy. Seems as far as Mr. Abbott is concerned, it is an outrage to tax multi-billion dollar mining oligarchs and put a price on big polluters spewing filthy toxic waste into our atmosphere, but its ok to reduce the income of some of the poorest, most struggling people in our society.)

Denise Allen
Political/Social Commentator
Political Strategist
Disability Advocate
Former Vic State MP for Benalla

Saturday, October 13, 2012

A Democratic Economy for the Left- a friendly reply to Eric Aarons

above: Social democratic economist Karl Polanyi - author of 'The Great Transformation'

In this our latest article Shayn McCallum responds to Eric Aarons again on the theme of the Democratic Mixed Economy. Drawing from the insights of Karl Polanyi McCallum argues for a democratic mixed economy employing both markets and planning, but moving beyond 'the market society'. For McCallum economy must serve society and not vice versa. This includes environmental preservation. 
Honest and respectful debate always welcome!!!

The Democratic Mixed Economy Facebook group can be found here:

And our 'ALP Socialist Left Forum' Facebook Group can be found here:

New participants welcome!

Shayn McCallum, October 2012

I appreciate the response that Eric Aarons recently made to my recent article on a democratic mixed economy. His critique raised a number of important points that I had been either entirely unable to address or at least unable to expand on in my paper which had been originally written as a contribution to discussions on economic policy within the Party of European Socialists, first being circulated within the French Socialist Party and German SPD. I also offered it within the UK Fabian society as a critique of Ed Miliband’s “Decent Capitalism”. Indeed, my main target in writing the original article, as much as to promote the idea of what I term (albeit imperfectly) a “democratic mixed economy” was to attack the use of the term “decent capitalism” which, I feel, is an unfortunate choice, linguistically and semiotically, that sets the parameters of the debate on economic policy at exactly the wrong point.

This original article was somewhat truncated to meet maximum length requirements and, therefore, was only partially able to convey the theoretical position I am coming from. As I feel a more detailed explication of this background may serve to clarify the areas in which my approach and Eric’s both converge and diverge, I would like to take the time to more clearly set out my assumptions below.

To begin with, I’d like to go over some of the areas where I feel Eric and I are closer than it may appear based on my original article and Eric’s subsequent response. Firstly; both Eric and I share an ecological emphasis. This may not be terribly clear from my original article but, in fact, we both appear to be agreed on the need to prioritise the issue of environmental destruction and, therefore, question any economic model based on untrammelled growth. I hinted at this very briefly in my original argument by including a few sentences rejecting the idea that there is much value in trying to reinvent manufacturing in the advanced capital-dominated societies. Also, like Eric, I am not overly challenged by the idea of a post-industrial society (although this involves problematic aspects which I will come to further on in this response). Furthermore, I would also tend to agree with Eric that econocentric arguments reducing socialism to questions of property forms are caught in an overly-limiting approach that is, at best, irrelevant and at worst, totally incapable of offering cogent responses to modern realities. Although, due to being an article focusing on economic issues, it may not have been clear; my intention was largely to attack econocentric thinking, which remains deeply imprinted in our collective consciousness.

With all respect to the considerable genius of Karl Marx, the Left remains burdened with the legacy of “Marxism” which, I would argue, is merely the flip-side of neo-liberalism, in that both approaches are agreed on the centrality of economics. This is, ironically, part of the reason why neo-liberalism gained so much ground among social-democrats after the rise of Thatcher and Reagan in the 1980’s and the collapse of Soviet-style socialism in the last year of that decade. The either/or, Marxism vs. Liberalism discourse ultimately obscured what was always really going on within the advanced, capital-dominated societies. Although capitalism is a force that has, especially in recent years, established greater and greater dominance, I do not feel it is entirely accurate to simply refer to most modern economies or societies as “capitalist” as this obscures the complexity of what is actually occurring. Capital has had to struggle to establish and hold onto its hegemony over the course of its dominance. “Capitalism” (meaning the hegemony of capital) is a reality, but it is not as strong as either the Marxist approach, nor that of its neo-liberal mirror image, would have us believe. In fact, a brief look at the actual history of capitalism shows its hold to have been marked by constant precariousness and unending setbacks resulting from its many, obvious failures and the ways in which societies have organised to check and restrict its power. Failing to realise this, amounts to short-changing ourselves at exactly the moment when we have an opening to fundamentally change our way of life for the better.

To clarify where I am coming from; I should explain that my own theoretical position is strongly rooted in the thought of the sovereign socialist thinker Karl Polanyi, whose nuanced critique of capitalism was equally critical of the economism of Marx’ approach.

Polanyi and anti-economism

Karl Polanyi was a sovereign socialist of Hungarian origin who authored one of the most comprehensive critiques of capitalism produced from outside the Marxist tradition; The Great Transformation (which Eric clearly alludes to in the title of his response to my article). Indeed, Polanyi was seriously critical of Marx, in that, Marx’ own critique of capitalism was fundamentally econocentric. The eschatological historicism of Marx that predicted an inevitable collapse of the capitalist system and/or its overthrow by the socialist proletariat was based on one serious error; that the free-market capitalism described by the classical economists such as Smith and Ricardo represented the economy as it actually was (or would become in time as the last remnants of feudalism were expunged) rather than merely as an idealised, utopian model. In reality, capitalism, as envisaged by the classical economists, is an impossible system- a utopia (or dystopia) capable of functioning only on paper. This contention of Polanyi’s is borne out by the fact that, whenever there is an attempt to establish a self-regulating market system, collapse occurs soon after. Polanyi himself witnessed the Great Depression and we are currently witnessing the second proof of Polanyi’s theory as the rotten fruits of three decades of neo-liberalism are reaped over our heads.

Liberal economists, of course, always counter from the opposite perspective; blaming government intervention or imperfect policies for inhibiting the growth of the “true” self-regulating market yet, quite honestly, whilst this ever-ready excuse that things went wrong because the capitalism involved was not “pure” capitalism should be given more credibility than the frustrated Marxist claim that the Soviet bloc collapsed because it was not “pure” socialism, is beyond me. The reality appears to be that there is always something blocking the “pure market economy” and always will be because such an economy, in reality, is utterly unworkable. Most people, not just the working-class, will want to oppose it or, at the very least, modify it to reduce its extremes. Thus the undying nature of the liberal dream paralleling that of the convinced Marxist; “our system would surely work if only people would stop getting in the way and diluting its purity”. We are faced with a hermetically-sealed, self-replicating logic as un-debatable as an item of religious faith.

According to Polanyi however, society must be understood as an organic whole, of which the economy is but one embedded part. Unlike Marx who divided a society into its “base” and “superstructure”, Polanyi made the point that this econocentrism had only emerged with the industrial revolution and was part of the ideology of this revolution. For most of history, the economic question had been secondary and embedded within a broader network of culture, social expectations, legal arrangements and political systems. The specific feature of capitalism, as a rising force, was a conscious effort to extinguish pre-industrial and pre-capitalist modes of existence to impose “the rule of economics” over the whole society. Where under feudalism, with all its abuses, ordinary people enjoyed certain unspoken social rights, primarily the right to live by, if all else failed, hunting and gathering on common land, measures such as the famous enclosures act forced the poor to seek their means of sustenance by selling their labour on the market. The important feature of the rule of capital was its totalitarian nature- its quest to privatise common space in order to ensure total compliance with the market.

Moreover, “the market” was no longer the simple merchant’s or trader’s market that had existed and evolved in most societies able to support more than a subsistence economy but rather a new system based on legal contracts in which virtually every form of commodity could be traded. As Eric points out in his response, financial markets and consumer markets are of a different nature yet “market economics” ignores this fact and treats all commodities as basically similar. Land, labour and capital may all be bought, sold or rented alongside consumer goods and professional services in a theoretical space of free and open mutual contracts entered into willingly by buyers and sellers. What the rising capitalist class intended to do was to make this system pervasive so that, rather than the multi-level feudal economy based on taxation/tribute and peasant subsistence with trade existing, however sophisticated, as a secondary pursuit by the urban bourgeoisie and peasant farmers producing enough to trade in surpluses, capitalism was a system seeking to enshrine trade and exchange as the central economic mechanism. The dream of capitalism, in other words, is not merely a “market economy” (to replace the multi-tiered economies of the pre-capitalist era) but, in effect, a “market society”.

So far, none of this picture much contradicts Marx, however the important difference between Polanyian and Marxian narratives is that, unlike Marx who believed that the capitalist revolution had been successfully completed, or at least soon would be, Polanyi argued that the reality was somewhat more complex. People resisted the imposition of the economy on their lives creating, what Polanyi termed “a double movement” in which every attempt to advance capitalism was met by popular resistance, necessitating compromises and accommodations between the revolutionary capitalist class and the various counter-forces (which included, alongside the nascent urban proletariat, the peasantry, dispossessed feudal aristocracies, petit bourgeoisie and various other groups all presenting a range of, often contradictory and antagonistic, objections to market rule). Unlike Marx, who envisaged a revolutionary awakening in the urban proletariat as the dialectical antithesis of this capitalist rise, Polanyi saw a conservative resistance to a revolutionary capitalist class attempting to preserve, and later extend, rights which were being extinguished. Moreover, it was this initially conservative response that empowered the radical answer in socialism which Polanyi defined as “the tendency inherent in an industrial civilisation to transcend the self-regulating market by consciously subordinating it to a democratic society”[1].

Marx had ambiguous feelings towards democracy. Towards the end of his life, he began to speculate that, in countries such as Britain at least, socialism might yet be introduced peacefully. For most of his life however, Marx saw parliamentary democracy, in particular, as little more than a bourgeois trick. Subsequent orthodox Marxists belittled and ridiculed notions such as “the parliamentary road to socialism” and the revisionist ideas of Bernstein that, in the end, despite the ongoing embarrassment they caused, came to roost in the practice, if not theory, of virtually the entire European socialist movement (including the Eurocommunist parties). Whilst Marxists disdained the political, seeing all politics under capitalism as bourgeois politics, the success of socialist parties- not necessarily in building (capital “s”)“Socialism” as conceived in its pure form, but in forcing back the power of capital, clearly show its effectiveness. This success is much under-estimated, I believe, due to the ideological blinkers imposed by orthodox Marxism. According to the Marxist “revolutionary” reading of social-democracy, reformism was a form of betrayal and the reformist working-class suffering from “false consciousness” however, for Polanyi, like Bernstein before him, this slow, incremental struggle in the field of politics was the natural form of the struggle for socialism itself in a democratic (or democratising society). Moreover, for Polanyi, this process of democratisation was, in itself, part of the socialist struggle per se.

Looking at modern history through Polanyian eyes, everything suddenly makes sense. Whereas Marxists struggle to account for the lack of revolutionary fervour in the European working-class and liberals insist that capitalism and democracy are inseparable twins, a Polanyian reading of history sees democracy emerging and advancing largely against capital. This is particularly obvious in the neo-liberal era as democracy is being increasingly reduced to an empty ritual whilst “the market” is held up as an apolitical, “common sense” area not to be interfered with by meddling politicians or the unwashed plebeian masses with their “market distorting” trade unions, environmental organisations and other barriers to the sovereignty of business. In truth, “capitalism” has never managed to fully establish itself although it has acquired considerable ideological force, because, in the end, most people (including smaller capitalists) don’t want to live in the kind of dystopia capitalism actually implies. If “pure” capitalism were ever established, it would quite simply resemble hell for almost everyone (shades of which we can see in the U.S. or Greece, Spain, Portugal and Ireland among others)- a system with no security where every individual was seeking the maximisation of their own self-interest and the losers were simply “left to the wolves”. Modern “capitalism” as we live it is a compromise and always must be.

“Economic Freedom” and “Freedom from Economics”

The neo-liberals rankle against the necessity of this “market-distorting” compromise which has arisen as a result of subordinating the economy to society through the mechanism of democracy and have instead, attempted to create a conceptual universe based on “economic freedom” and have moved to enact policies, over the last 30 years, which entrench this mythology.

“Freedom” in neo-liberal terms is the freedom to enter contracts, to buy and sell at liberty and to act in one’s own self-interest. It does not take a great deal of effort to expose the shoddiness of this conception of freedom which, for the majority does not even amount to meaningful economic freedom (for example; can the “right” to work for subsistence wages or starve be considered a genuinely free choice? Yet this is the essence of the neo-liberal approach to unemployment).

The socialist answer to capitalism, has always been, in effect, to propose “freedom from economics”. Marx’ rare ruminations on communism envision a society where work is no longer mere “labour” but performed as an act of contribution to the society or self-fulfillment, for which each individual may expect the satisfaction of his/her material needs without the need for elaborate accounting. It is a beautiful vision and one worth dreaming about for the very distant future. For the forseeable future however, we may have to tolerate some degree of economic rule over our lives. Nonetheless, the goal of the Left must be to “put economics in its place”. The economy must serve humanity and not the other way around. In other words, rather than the empty ideal of “economic freedom” which presents a false definition of what it means to be free, the Left must continue to struggle for “freedom from economics”.

Ironically however, to free ourselves from economics we must turn our attention more to economic issues. I would like to assure Eric that, perhaps contrary to the impression given in my previous article, I am not altogether dismissing questions of culture as political issues, yet, I must insist that these must not become the sole, or primary, focus of politics in the current period. Unfortunately, for the moment, economics truly is the “substance” of politics because the market has enslaved us. How can we doubt this for a second when the richest, most prosperous societies in the world are facing galloping poverty rates, massive unemployment and the wholesale destruction of social services? Moreover, this is all occurring in the middle of unprecedented material abundance. Throughout Greece and Spain the shelves of shopping centres and supermarkets groan with an abundance of goods even as the streets outside fill with the recently impoverished and unemployed who lack the economic means to consume what is available. Here we see the tyranny of economics and the waste and inefficiency of a market society. Production and distribution are misaligned.

This does not imply that the only, or even preferred solution is a return to Soviet-style planning. The downfalls of this system have been enumerated at length for years. Nor is there much point asserting some utopian notion of “democratic planning”(not that it mighn’t be a good idea to experiment with this on a small scale) or some other exotic solution. People used to being able to determine their own consumption preferences in the marketplace are unlikely to want to replace this with a totally planned system no matter how democratic. Markets clearly have their place but what should that place be? What goods and services should be covered by the market and which should be provided as untraded “social goods”? These are important questions. Few people much mind having a variety of restaurants to go to or a choice of clothing styles or technological items but perhaps many of us do not feel a pressing need for a variety of power providers competing to sell us electricity or a host of private banking institutions that differ only to the extent that they are ripping us off. And there are other “empty” choices that would perhaps be more satisfactorily be taken over by well-run, transparent, public service providers (or perhaps a combination of public and third-sector non-profit providers if so desired) such as education, health, public utilities and welfare services.

My reason for proposing a “democratic mixed economy” (and I should point out I am not “married” to the term but prefer it, for a number of reasons, to any of the alternatives on offer) is to allow for an open-ended experimental approach to reorganising the economy that puts people first, through the democratic, participatory mechanism and which is open-ended with regard to the question of the role and limitations of markets, the ownership and property mechanisms that exist and the degree of state, as opposed to private, cooperative or third-sector delivery of services. My own orientation within such a framework, would be strongly towards the socialist end of the continuum and the “mix” I would prefer would perhaps be leaning heavily towards the public/cooperative/mutualist approach but, in the end it would not be me but the majority which would (hopefully) have the final say on the composition of the mix (which would be bound to change over time anyway- probably in ways we cannot even foresee).

Issues of Economic Structure and Governance

Of course, as Eric pointed out, with regard to Australia but, in fact it is also largely true of all the advanced economies, we are no longer dealing with “industrial” but rather “post-industrial” economies in most of the wealthy nations. As I mentioned above, I do not feel the shift to a service economy is, in itself, a particularly terrible thing any more than it can be seen as intrinsically emancipatory. There is, however, an important element to this structural shift which presents a far more serious problem for the Left: the growing international division of labour effected by “globalisation”.

It should be obvious to anyone that, no matter how abstracted from any kind of material production most of our jobs become, someone somewhere has to be growing the food we eat, buy, sell, market or advertise just as someone has to manufacture the clothes we wear, the vehicles we travel in and the computers we increasingly rely on in our service-sector jobs. The idea of a “virtual economy” is a risible fantasy that can only exist as long as we are prepared to ignore the fact that everything we really need to stay alive is physically produced somewhere.

Indeed, the shift from a “production” to a “consumption” oriented society was one of the pillars of neo-liberal strategy. As Marx pointed out, when we view economic processes as consumers it is easy to ignore the injustices and exploitation that delivers us cheap goods, however, if we look at the same process through the eyes of producers, all of these miseries become clear. Not only did killing off industry in the wealthy countries have the effect of increasing unemployment (and therefore facilitating union-busting and assaults on wages in order to pursue the anti-inflationary policies that neo-liberals are so in love with) but also allowed large companies to deepen the international division of labour that is so beloved of free-trade theory, by relocating manufacturing to the cheap-labour havens of the “developing world”.

Add to this the fact that there is no equivalent of the state at international level to govern or regulate these processes and it is quite clear that this whole process has had a great deal to do with a strategic flanking of the postwar social-democratic compromise. Governments renounced their competencies over economics “for the greater good” leaving no political response to market rule easily available.

To a large extent, this explains the “deer caught in the headlamps” response of social-democrats to the current global economic crisis. The tools simply do not yet exist to do much about the problems we face. Where governance mechanisms are being instituted however, as can be seen at present in the European Union, they are not of a democratic nature but rather embody a technocratic response aimed at preserving the hegemony of capital, if not the self-regulating market nonsense that has had its dirty underwear exposed yet again.

So, what to do? In this era, international coordination among Leftists is a matter of survival. This is something I have been actively struggling for in the Party of European Socialists. Socialists and social-democrats in Europe (which is my primary focus as I live on the margins of Europe in Istanbul, Turkey) need to work much more unitedly to present structural reforms at the European level that would enable greater democratic participation and transparency as well as advance a Europe-wide “social Europe” agenda. This is not an easy proposition as the European institutions are weighed down with layers of treaties, bureaucratic and technocratic measures and entrenched ideologies that are firmly opposed to reform. The European Union was specifically conceived of as a “benign technocracy” rather than a democracy as its architects feared (probably correctly) that European public opinion would be hostile to integration- let alone political union.

The need to reform Europe is only one, fairly limited, step in the struggle to reform globalisation. I, personally, do not consider globalisation as an intrinsically negative phenomenon and certainly see no future in any attempt to go backwards to re-entrench the Westphalian state or try to reindustrialise the rich world economies. Our problems today truly are global yet we lack global political mechanisms to deal with these. Ultimately, these struggles to oppose and limit the power of capital must become international and, moreover, they must be democratic if they are to succeed in any worthwhile way.

Environmental Collapse and Reevaluating Growth

Finally, I’d like to address one of the most pressing issues raised by Eric in his critique of my previous article; environmental destruction. This is perhaps one of the most important indications of our need to adopt a global approach as the environmental disaster posed by climate change is not limited in its effects to any one country or region but rather, poses significant risks for all life on earth.

The ideology of untrammelled growth central to capitalism is profoundly dysfunctional. The only analogue in nature to an organism that recognises no limits or controls to growth is cancer. As we all know, the point at which untreated cancer cells cease growing is at the point where the host body dies. It is an ugly analogy but, the economic system we currently follow is essentially cancerous. Schumpeter’s “creative destruction” increasingly looks more like simple destruction without any “creation” worth mentioning.

It is necessary that, lacking a global political mechanism able to coordinate such efforts, individual nations do what they can to respond to the environmental crisis but, we must acknowledge that, just as individual responses to the related economic crisis are limited, so too will our very best efforts to address the environmental crisis be. This is, however, no reason for refraining from the attempt. What can be done must be done and struggle is the best way to perceive the limits to what can be achieved and the only way to force up past those limits.

What Is To Be Done?

The task for Leftists in the current era is, I would argue, to advance international cooperation and solidarity among ourselves whilst reaching out to our allies. The movements for change of the future are liable to be networks and loose coalitions cooperating around specific issues rather than the mass parties of the past. We need to leave our ideological conceits, sectarian preferences and vanguardist fantasies buried in the Twentieth Century where they belong.

Our goal must, I believe, be to advance new forms of participatory democracy at the local, national and international level and, a major programmatic focus must be economic. If we are to ever be “free from economics” we must attack economism by offering alternative economic models that subordinate the economy to society and democratic politics. As much as possible, we need to experiment with practical models rather than attempting to push dry theory which does little more than keep academics in jobs. People are understandibly skeptical of almost any new idea until they can see for themselves that it works. The wasteland of failed ideas lurks behind us all and provokes us all to caution and conservatism; the Left needs to work with this cautiousness rather than trying to browbeat people with our “superior understanding”- an unfortunate personality flaw which has left us stereotyped as “out-of-touch, self-righteous elites” by the cunning conservative populists of the Right.

There is no question that the task is daunting and the stakes are extremely high but the global crisis of capitalism is right on top of us, threatening everything we hold sacred and even everything that keeps us alive. There is a golden opportunity presenting itself, for perhaps the briefest of times, to change direction and lay the foundations for a quantum shift in the way we live on this fragile planet of ours, how we treat each other and how we view ourselves and our societies. The possibility to really change for the best is tantalisingly tangible yet frustratingly held back by our own limitations and the lack of structures to work through.

I admit that my own answers remain vague and more a matter of principle than detail but these things are always a collective effort. Already there are countless examples of activists doing what needs to be done and trying to implement change on the ground, perhaps what we need is just to deepen our links with each other and see what can be gleaned from our common experience as we try to forge disparate acts of resistance and creation into a broader strategy for change. The nature of the times demand that we stretch the limits of our creativity in responding to the needs of our era.

In contrast, it is in just such times as these that the last thing we need is a “Left” that has nothing more to offer than a bleating plea for “decent capitalism” based on a return to some sanitised, nostalgic fantasy of the industrial past. Such an appallingly stunted vision is worse than no vision at all, and it is in this spirit that I was originally moved to make my previous contribution to the economics debate within the European social-democratic movement.

A Final, Personal Note

I hope this goes some way towards clarifying the perspective from which I approached my previous contribution on the “democratic mixed economy”. I believe there are several points on which my own views and Eric’s converge or, at least overlap though several points of contention may yet remain, which I believe is a strength rather than a weakness as it is only through discussion that ideas can be refined. I would be more than happy to discuss these ideas further with Eric or anyone else who is interested. The most important thing is to discuss and develop the concepts and approaches that can take us forward and my own views are nothing but a work in progress- I am always open to the persuasion of better ideas and more insightful perspectives. In other words, all (constructive) responses are welcome.

[1] Polanyi Karl (2001 (1944) The Great Transformation, The Political and Economic Origins of Our Time, Boston,
Beacon Press p. 242

Thursday, October 4, 2012

The Greatest Transformation - Eric Aarons responds to Shayn McCallum

above: A recent book by Eric Aarons - exploring the clash between Karl Marx and Friedrich Hayek.

In the following article former Communist Party of Australia leader Eric Aarons responds to our earlier article by Shayn McCallum. (Shayn's article can be found here: ) Aarons critiques 'social market' approaches to change, positing global warming and other environmental challenges as the most important issues facing humanity. While recognising the necessary role of some markets, Aarons proposes an egalitarian services-based economy, and an economy which goes beyond the treadmill of over-work and over-consumption. DEBATE WECOME!!!

nb also: In addition to our article here, a very detailed review of Aarons' larger, more academically-inclined book on the same theme of Hayek and Marx can be found here - where we welcome debate!!!:


Eric Aarons, Sep 22, 2012

This article is a response to Shayn McCallum’s article ‘State and Market – a Democratic Socialist Approach’ that appeared on a Tristan Ewins’ website. I do so because the concerns it deals with are close to my own – that is, seeking to formulate a substantive definition of what currently active people of the left should do or ‘stand for’.

My response is not intended as a polemic, though it is forthright and direct because I assume that neither Shayn nor I wants to smarm over difficulties or differences. I therefore begin with the title of his piece stated above.

Shayn poses ‘a mixed economy’ as one reasonable answer to the question posed by his title ‘State and Market’. But that term, which I also use, can’t take us very far or generate enthusiasm unless the nature of the mix is further clarified. I also use the term, sometimes with the proviso that the ‘mix’ must be devoid of the extremes evident in the continuing practices of capitalism and the type of socialism that came to prevail in the Soviet Union or Maoist China and blackened the very term.

But I believe that ‘mixed economy’ is not made adequate by adding the word democratic, or the phrase ‘devoid of extremes’. Similar problems arise with ‘economic democracy’. I agree that ‘The Social Market’, as devised by its founders and analysed by Australia’s Hugh V. Emy, Professor of Politics at Monash University, poses little danger to the existing system, or possesses any significant transformative power.

Thus we seem to agree that no expression has yet been found that contains the emotional and intellectual force possessed in the past by the ‘left’, and backed by the capacity to enthuse people into action by concretising general aims in specific strugggles. Shayn points out that much of social democratic (in Australia, particularly Labor Party) discourse is ‘excessively tenuous, somewhat vacuous’ and limits its criticism of [neo] liberalism to the details rather than its over-arching vision.’ That comment, I believe, is justified, but loses much of its force when Shayn himself fails to outline what the content of an effective critique of that vision would be.

I don’t feel lacking in that area, having written three books on the subject, the last beingHayek versus Marx (2009). The publishers insisted on that title because it was part of a planned series (mine came out as the 180th work in that series). But I eventually persuaded them to add the subtitle: And today’s challenges, the significance of which for discussions like the present one I explore later.

But I think it is essential to appreciate the vast difference between the retail markets that we visit almost every day, and the financial markets that played a crucial role in generating the Great Financial Crisis of 2008, to the present time, when it threatens to break out with even greater force at any moment in Europe.

The necessity of some markets

As Shayn clearly recognises, markets existed to one degree or another in practically every society later than the stone age. (For instance, the Conquistadores found extensive markets in some of the countries of what is now called Latin America). But Shayn neither distinguishes between different kinds of market, nor explains the reasons for the universal existence of some of them.

The foremost of these concerns has to do with what most of us perforce do every day, in response to the natural evolution of the division of labour. This compels us to engage in exchanges, usually of money from our wages, to obtain the mix of different commodities we need to live. These range from foodstuffs to transport, liquor, haircuts, entertainment and other items. One doesn’t need a vivid imagination to envision the difficulties, not to speak of the public outrage, that would result from any attempt to plan and institute an alternative, for example, one of state allocation of the same items or meals for all irrespective of the work they may, or may not have contributed in Mao’s ill-fated Chinese rural communes, while in competitive marketts, it is equals that are generally exchanged.

(I don’t think it necessary to pursue the many further variations that arise in areas such as whitegoods, TVs, computers, houses or cars, where the state may step in with requirements for performance standards, health requirements and the like.)

The Social Market

I agree with Shayn that the term ‘social market’ doesn’t take us very far. Its origin and meaning was well analysed by Australian academic Hugh Emy as the vision of some genuinely liberal-minded post-war German theorists, couched in moral as well as economic terms. It centred on the idea of ‘co-determination’ by owners and workers in businesses but ruled out any interference with ownership relations. It had some progressive content, but was by no means a transformative development.

Shayn rather airily dismisses cultural issues and contests, defining them as though they were lightweight compared with a physical presence or direct economic content. Without trying here to cover the full scope of culture, political activists need to realise that morals, values and attitudes, among other features of human behaviour and consciousness, are sources of action or passivity, which are surely of central importance in politics.

Without entering the field of values, for instance, I see little chance of constructing an effective critique of the neo-liberal vision which at present still holds (now less securely) a hegemonic position, or defining an effective social democratic one. Shayn instead speaks of confronting the ‘questions of class power’, that he then nominates in purely economic terms as ‘redistribution or the provision of social goods and services’.

I am far from dismissing the importance of this for a segment of the population of our country, a similar proportion of other economically developed countries, and massive numbers in the undeveloped. But I am convinced it is the wrong direction, at this particular juncture, in which to look for a liberating, emancipatory, transformative orientation.

Today’s main challenges

The general social conditions and forms of economic restructuring that would be involved in meeting those challenges, the first of which is Global warming, requires sober calculation, including of the time frame. Solutions need to be, or clearly becoming,politically possible within two or three decades, or the problem could take a disastrous turn, for example by the melting of the tundra in Siberia, Greenland and elsewhere which would release huge quantities of now frozen methane – an even greater ‘greenhouse effective’ gas than carbon dioxide.

‘Politically possible’ means that to be democratically effected there has to be near enough to majority support for the measures involved type. There are already in existence more than needed of what I call ‘if only’ plans – ones that pose preconditions having little chance of being realised, and which in any case are inadequately campaigned for.

Global Warming occurs today mainly because we are burning increasing quantities of fossil fuels (coal, oil and gas) to generate our ever-increasing energy requirements. The burning process produces carbon dioxide gas which has the physical property of acting like a greenhouse – that is, a kind of‘house’ device, usually made of glass that lets in the sun’s rays, or is internally heated to cultivate plants that need heat to grow, but doesn’t let the heated air inside escape. Carbon dioxide and other gases, in the quantities now being generated by burning, mix uniformly in the global atmosphere from whatever country they come, warming the world, from frozen poles and glaciered areas to the tropics, causing the escalating number of weather extremes we all see on TV or ourselves experience, and raising ocean levels by melting ice.

Earth’s resources are not infinite

The related major challenge of our times is first of all the growing threat to the sustainability of the supply base for all this burning of fossil fuels. It is clear that oil will soon run out, while coal and gas won’t last forever. Water is becoming scarce in many places, and large quantities of underground water are being polluted by the fracking of coal and shale beds to produce gas. ‘Rare-earth’ elements, essential for many sophisticated electronic apps are scarce. Phosphorus, one of our main fertilisers (and an essential component of DNA) is in short supply, as is potash.

Fish are becoming scarcer, and some of its best food species are on the verge of extinction, while ever-larger trawlers are built to pursue others still existing. New agricultural land is scarcely to be found and the productivity of large areas is being reduced by overuse and more extreme weather events.

Much more information is readily available, but is not acted upon. Nor are either the dangers, or the transformational possibilities flowing from victory in the struggle to overcome them sufficiently taken on board by the left including, regrettably, the trade unions.

The scale of all this

Geology Professor Mike Sandiford of Melbourne University gives us a striking measure of this scale:

Rivers and glaciers have moved about 10 billion tons of sediment from mountain to sea each year on average over geological time. Each year humans mine about 7 billion tons of coal and 2.3 billion tons of iron ore. We shift about the same amount again of overburden to access these resources, along with construction aggregate and other excavations. In short we are now one of the main agents shaping the earth’s surface. (Sydney Morning Herald, May 23, 2011)

The course of solving it will not only help to change the present unfavourable-to-the-left balance of political forces. It will provide us, and especially succeeding generations, with clues about the best course to further economic and cultural steps.
* * *
Inverting the meaning of Karl Polanyi’s striking title to his famous book The Great Transformation which he used with the subtitle The Political and Economic Origin of Our Time, I have called success in meeting fully the present challenges The GreatestTransformation.

This may seem exaggerated, but consider the fact that for the first time ever in history, all countries and cultures will eventually have to become involved, and that the vast majority of people will then have to be guided by the principle that excesses in resource consumption must be avoided.

Some may be alarmed at this and consider it to be going backwards. But I hold that it is true progress, liberating us from toils of consumerism which daily (and nightly) consume the time and energy of a growing proportion of the world’s population, while also keeping a large proportion of humanity in wretched poverty or on the brink of starvation.

Transformation, emancipation

Those on the political right, centred on the ideology of neo-liberalism, and their rabble-rousing foot soldiers, simply deny what is there to be seen and experienced. Maybe they simply fear change as such, perhaps believing that what now exists is the pinnacle of possible human existence, as Frances Fukuyama once asserted, but now, to his credit, has changed his tune.

Even those on the left, the core of which are the social democrats, and the Greens (who are to the left of them on some issues), aspire to something better and more constructive for the future, but have yet to develop a sufficiently coherent social philosophy.

And I am concerned that Shayn gives so little attention to these issues. Could it be that he holds the view common among a small section of the left, that no substantial progress can be made in any social field until the economic base on which it has arisen is first transformed? Such views have dogged the socialist cause almost from its beginnings, with Eduard Bernstein, for one, struggling with it through most of his life.

Of course, no one political strategy could meet every different set of conditions; but my judgment is that the issues stated above are tailor-made for a strategy of resolving pressing major issues, not instead of (perhaps) more basic ones, but rather as an essential step on the way to actually doing so.

Consumption is essential up to the point of sufficiency (which of course cannot be too narrowly defined) but taken beyond that to the very aim of life is a view and practice that is far from liberating. It binds a majority of people in the economically developed countries to a daily (and often nightly) treadmill that is now restricting rather than helping to extend our development as human beings.

Friedrich Hayek, who developed neo-liberal philosophy to its present (though declining) predominance, helped elevate consumerism to its present peak above more worthy and humanly satisfying aims by denouncing those who rejected his view ‘that the great ideal of the unity of mankind should in the last resort depend on the relations between the parts being governed by the striving for the better satisfaction of their material needs.’ (LLL2,111)

He followed that up by denigrating working people with the assertion that ‘their intuitive craving for a more humane and personal morals corresponding to their inherited instincts is quite likely to destroy the Open Society [capitalism].’ (LLL2, 146).

Let us wear this as a badge of honour.

Human development

One aspect of switching our view of progress from more material goods to greater human development is to expand and deepen our relationships with other human beings, family and otherwise. This activity is both pleasurable and emancipatory, cultivating our human sensibilities whose possibilities are inexhaustible, as are the possible accomplishments of our reason.

Furthermore, caring occupations require increased human participation, as do educational, and health services, and individual and collective cultural and artistic pursuits, while engineering and related developments to create more material commodities often cut employment, though capturing sufficiently more of the sun’s heat and electronic rays to replace burning for energy will keep the need for engineering and related activities, including science, fully employed indefinitely into the future.

The Services Society

Largely unnoticed and unremarked till recently is the fact that provision of services rather than material consumption commodities is by far the largest part of the economies of the developed countries.

Last year, two Reserve Bank economic analysts, Ellis Connolly and Christine Lewis, quantified the changes in Australia. Titled Structural Changes in the Australian Economy, it showed that 80 per cent of the total value produced in our country came from the service sector, and embraced 85 per cent of the total workforce. The remaining 20 per cent of value was produced by agriculture, manufacturing and mining which employed the remaining 15 per cent of the workforce.

I queried them about the inclusion of ‘construction’ (for instance, construction of massive office blocks) and they replied that they did so because it is listed in the Australia and New Zealand Standard Industrial Classification (ANZSIC). However, they did agree that there is no clear distinctions between industries that are ‘services’ and those that are ‘non-services’.

As a lay-person in this area I would estimate that a more realistic figure might be about two thirds services. But that figure, and the fact that only 15 per cent of the workforce, in manufacturing, mining and agriculture, produces no more than 20 per cent of all value indicates a major restructuring of society is already under way, I believe with great significance for proceeding to ‘the greatest transformation’ that humanity must accomplish before the end of this century. And building on a spontaneous/evolutionary development is generally far easier to accomplish than trying to create something so radically different that people may be more reluctant to embrace it, while it can also be more subject to violent reversal.

Consumption goods cannot be distributed equally because people and families are different, have different responsibilities, different incomes and different tastes, Services, however, from electricity, water and sewerage supplies, health and education and transport and communication services … are equally essential to everybody, indeed possess an egalitarian aspect that is desirable, but rare in present society. This fact is expressed in the so far unsuccessful attempt to globalize and privatise trade in services through GATS (General Agreement on Trade in Services), leaving most services still locally supplied, with a major portion still in state hands.

The Australia Institute conducted surveys that revealed a majority would prefer better services over tax cuts. When asked which election promise was more likely to win their vote, 56 per cent of those surveyed chose better services to increased living standards compared to 44 per cent who said that tax cuts would sway their vote. Of all those surveyed, 63 per cent wanted services to benefit Australians equally.

As well as treasuring this egalitarian factor, we should remind ourselves e forget conditions of work have an effect on ways of thinking, ‘big industry’ significantly generating trade unionism and to a certain extent socialist thinking. This is not to suggest that trade union and socialist sentiment cannot arise among workers in, for example, caring activitie, only that they may have to be approached in a rather different way, as do workers in country areas compared with the city. The conclusion should be that understanding the ways of thinking of differently placed, differently formed, differently parented and differently educated people, is not simply the product of class economic relations.

Taken generally, we need to realise that politics is an art rather than a science where ‘theory’ alone is adequate to decide on policy and practical activity. Or, put somewhat differently, the common view in left, right, and to some extent in neutral or various other circles, that property or other economic relations have to come first – that these, often called material relations, must change before any significant society-wide alternatives can occur.

My contention is that in the concrete conditions of global warming and threats to planetary resource provision, tackling these problems should be the priority, and that succeeding in the endeavour to overcome them will do more than any other available way in which to clarify what economic changes can politically then be made.