Whatever ? Voter Alienation in Australia’s Neo Liberal Capitalist Reality and the Need for a New Democratic Socialist Economic Model

In this latest article, ALP activist and democratic socialist, Geoff Drechsler argues against austerity and for a revived democratic socialist approach to economic management. He argues for the Left to assert itself on the economy - including in the form of economy democracy and full employment.

One of the less discussed trends in Australian politics is 'voter disengagement' - the declining rate of voter enrolments, prevalent amongst young voters, and the steady increase in informal voting, particularly in working class areas. At the last federal election, in 2010, in the federal seat of Blaxland, informal votes accounted for 14% of the total votes cast, up from 9% at the previous election in 2007. Before the recent WA state election, one in three 18-25 year olds was not enrolled to vote. Looking specifically at young voters not enrolling, a similar pattern can be observed in other developed democracies, which have predominantly voluntary voting systems. In each new generation in these countries, voter turnout has been steadily declining generally for the last five decades or so.  But after decades of economic growth here, why are young Australians so lacklustre about enrolling to vote ??

 

Could this disconnect be the product of the reality that 20 plus years of economic growth has not led to an increase in economic security, particularly for this group ? The two main political parties have both embraced key neoliberal economic tenets in recent decades, and irrespective of economic growth or not, this still results in greater fluidity in the labour market and less equitable economic outcomes across the community. Also, the high cost of living in major Australian cities then in turn has a multiplier effect on those in this predicament, and delay the events that usually mark the path towards adulthood - starting a family, purchasing a home and getting full-time stable work. Given the dearth of choice politically on economic policy, and the lived reality, the point of voting is maybe somewhat less obvious or attractive ?

 

Prosperity without Security

 

* Since 2008, the number of teenagers in full-time jobs has fallen from just under 270,000 to about 200,000 in 2012. In 2012 a quarter of 18-19 year olds were not in full-time study or work.

* Rates of part-time employment have increased significantly. The 2012 edition of How Young People Are Faring indicates that the number of teenagers in part-time work and who were not in education increased from 8.7% in 1986 to 30% in 2012. The proportion has more than doubled for 20 to 24 year-olds from 8.3% to just over 19% during the same period. This reflects a long-term pattern of replacement of full-time employment with more part-time jobs within the teen and young adult labour markets

* ABS data indicates that in 2011, a third of the 814,700 part-time workers who would prefer to work more hours were aged 15 to 24 years. Around 28% of underemployed part-time workers in this age group had insufficient work for a year or more (what the OECD defines as "involuntary part-time work").

 

Ultimately, it all comes back to economic policy, and the embrace, by centre left parties of neo liberal economics is linked to events at the end of the 20th century. Internationally, there is now a tendency on the Left to focus on social issues and policy because in the 1980s, the failure of the Soviet centrally planned economic model, and the inability of the Scandinavian nation state social democratic economic systems to make the transition to participating effectively in a globalised international economic system undermined the two most widely accepted “left” economic models almost simultaneously. Subsequently, many centre left governments have simply grafted left-wing social policy onto a basically orthodox right wing economic program, seemingly in the hope the former will ameliorate the latter. The absence of a credible "left" economic model has also allowed the Right to dominate economic debate for the last 20 years too. Seizing the opportunity, in countries that have had long term right wing governments during this period, including Australia, these conservative governments have manipulated predictable less equitable economic outcomes (and the inevitable resulting fluidity in the labour market......), and the subsequent insecurity that is generated to undermine the institutions of the welfare state (how popular is Centrelink ?) and promote individual solutions - 'work for the dole', making public sector workers self-employed individual contractors etc etc. This is all enabled by a general loss of faith in collective solutions in the community.

 

More recently though, due to the 2008 Global Financial Crisis, free market capitalism, and its derivatives, have lost popular credibility as a result of this economic collapse, and failed right wing policy remedies for this. A practical example of this is the UK Conservative Liberal Democrat coalition government austerity program that commenced in 2010. It has all been in pursuit of some ephemeral notion of a 'balanced budget', based on the outdated notion of "the Treasury view"— that fiscal policy has no effect on economic activity. Two years into this austerity program, the UK started 2012 with the biggest trade deficit since 1955, and the government’s adherence to classic neo liberal economic policies has put the UK economy into recession. Fortunately, finally, it appears even the IMF is now questioning austerity budgets. Olivier Blanchard, the IMF chief economist's paper on austerity, at the last American Economic Association's annual meeting, concluded that austerity program's adverse effects are stronger than believed. There is even a new book that claims austerity is seriously bad for our collective health, and that cutbacks have already had a devastating effect across Europe and North America. It points to soaring suicide rates, rising HIV infections and even a malaria outbreak, researchers arguing that in fact governments' austerity drives are costing lives in The Body Economic: Why Austerity Kills.

 

In contrast, in the post-war period, the one thing that has characterised successful left wing governments of all orientations, whether Chavez's Venezuela or social democratic Sweden has been a successful economic model. These have all also placed a strong emphasis on employment. In Venezuela, between 2002 and 2012, the government has increased social spending by 60.6%, and extreme poverty was reduced from 40% (1996) to 7.3% (2010). Part of this program is the intense political participation that the Venezuelan democracy incorporates, that includes 30,000 communal councils, which determine local social needs and oversee their satisfaction and allows ordinary people to be protagonists of the changes they demand. But also, the Venezuelan economy has low debts, high petroleum reserves and high savings and the Venezuelan economy has grown 47.4% in ten years, that is, 4.3% per annum, and reduced unemployment from 11.3% to 7.7% in the same period. In modern Sweden's case, high rates of productivity, historically low rates of unemployment and high standard of living for all of its citizens in the post war period in one of the world's most highly developed post-industrial societies. Both of these examples show that a viable alternative economic model that has refocused the economy's outcomes more equitably, delivered growth, jobs and development and consequently, unsurprisingly, then led to longer term electoral success. Even at a workplace level, there are numerous examples of successful enterprise level exercises in industrial democracy that have been economically successful, from Ricardo Semler's Semco in Brazil, to the Mondragon Cooperatives in Spain. Ricardo Semler has also been a visiting scholar at the Harvard Business School too, demonstrating the widespread applicability of his ideas.

 

Alternatives

 

A viable democratic socialist economic model would be characterised by a mixed economy characterised by a leading role for different forms of social ownership, a proactive role for government and democratic planning, alongside market forces and a viable private sector, introduced incrementally as a consequence of electoral endorsements.  The key long term aim of this program is to democratise key economic decision making and incorporate the aspirations of the majority of the population in regards to this process. Undoubtedly, full time permanent full employment being an overt public policy goal (again) is probably one expression of this.This in turn will also lead to more equitable economic outcomes, through moving beyond the pursuit of the profit motive being the sole economic benchmark of success. At a workplace level, alienation would be reduced as workers gained more control by encouraging cooperative and collective workplace industrial democracy process. And a rejection of failed free market orthodoxy will lead to more equitable outcomes that reduce income disparity between the richest and poorest and reverse the trend of Australia being one of the most unequal developed societies.

 

All of these changes listed above could utilise technological improvements to allow greater distribution of information and participation in workplace decision making in post-industrial white collar workplaces too.

 

Geoff Drechsler is a Labor Party and trade union activist.

Generation next: where to for Australia’s young people?

http://theconversation.com/generation-next-where-to-for-australias-young-people-10604

Youth face snakes and ladders on the path to full-time employment

http://theconversation.com/youth-face-snakes-and-ladders-on-the-path-to-full-time-employment-10677

Paul Krugman “The Big Fail" - NY Times 6.1.2013

Austerity kills, economists warn

http://www.guardian.co.uk/business/economics-blog/2013/apr/29/austerity-kills-health-europe-us

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Labor‘s Socialist Objective in the 21st century - principles for economic democracy and equity ?

From the author, Geoff Drechsler: The following is an open letter to Australian Fabian News. I posted it here in the hope it will generate some discussion on some of the issues raised in the book 'Looking for the Light on the Hill: Modern Labor‘s Challenges.'

by Geoff Drechsler

One of the 'more' curious aspects of the current debate around modernising Australian Labor is the recurring proposal to abandon the party’s socialist objective, and commit Labor wholeheartedly to a neo liberal economic model. Troy Bramston‘s Looking for the Light on the Hill: Modern Labor‘s Challenges takes up this theme also. This is 'curious' because we are presently witnessing the greatest failing of free market neo liberal economics since The Great Depression, largely stemming from a lack of regulation and governance. So, it is a strange time to be advancing a position supporting free market economics, particularly in a debate about the future of a social democratic party, when one looks at the concrete realities of the current situation.

In this debate, the reality is that the choices being presented are between the principles of economic democracy and of equity of the socialist objective or a neo liberal agenda of privatisation and deregulation that has progressive social policy grafted to it, with the aim that the latter will mitigate the effects of the former. Since the late ‘80s, there has been a shift to the right in terms of economic policy by social democratic governments internationally, and all these experiences have shown the reality that such programs have meant less equitable outcomes for Labor’s people, and led to declining electoral support.

Locally, this approach is exemplified by the recent activities of the current Queensland state government and the former NSW government. Both have driven supporters away electorally, and are unlikely to deliver equitable outcomes in the long term.

Many of the opponents of the socialist objective use warnings of some grim imagined Sovietesque economic basket case, that they claim would be the practical manifestation of any implementation of the socialist objective too. This is disingenuous.

As a social democratic party, participating in politics in an advanced industrial country like Australia, it would be much more instructive to look to the labour and social democratic parties of Europe and their experiences, in regards to economic policy and programs.

In this debate, one country’s experience is informative, Sweden, because the Swedish social democrats developed an alternative economic model that achieved economic growth and equity in the post-war period. And the Swedish social democrats understood that free market economics were incompatible with the interests of working people and social justice, so attempted to develop their own economic model, rather than rely on existing mainstream economics. Just like the first Labor activists in Australia who drafted the original socialist objective here. The Swedish social democrats goal of economic democracy centred around 2 themes-industrial democracy and collective capital formation, which it was envisaged would lead gradually to the transformation of private ownership of the means of production to social ownership.

The Swedish economic model is also interesting because nationalisation as a strategy was rejected early on, and Sweden has also never had a large public sector either.

Practically, this alternative economic model lifted Sweden out of the Great Depression earlier than other advanced economies and, in the post-war period, led to high rates of economic growth and lower rates of unemployment than comparable economies. The Swedish social democrats themselves experienced an unprecedented period of electoral success over the same period.

The end result is a country with a high standard of living, more equitable distribution of wealth and a modern dynamic developed economy. All in all, an economic program worth further examination in any debate around the socialist objective.

We need to see this debate in terms of the need for an economic model that meets both the party’s economic and social goals, and clearly free market economics has already discredited itself, as recent history shows. Sadly, one only needs to look to the US to see the shrinking middle class, the product of a sustained neo liberal economic agenda over the last few decades.

A quote from Keynes’s is probably an apt conclusion at this point-“Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually slaves of some defunct economist.”