On Socialism Today - Planning a Way Forward

The following article - which the author plans to submit for publication by the Australian Fabians - is an in depth survey of the background and options for democratic socialism in Australia and the world.  The idea is to spark debate in the lead up to a series of events in Victoria planned for 2020.  Your contributions to the debate are also welcome!

Dr Tristan Ewins

Socialistic sentiment can be traced back to the slave revolt of Spartacus and Peasant uprisings in Europe ; for instance that led by Thomas Muntzer in Germany.  But ‘modern socialism’ began with those labelled as ‘utopians’ by Karl Marx.  Figures like Robert Owen – who personally wanted to convince the bourgeoisie (and nobility) of an egalitarian, communal society based around the means of production.   (specifically communes of up to 3,000 people) And all those others who depended on a ‘socialist vision’ to convince people of the desirability of a socialist order ; as opposed to Marxists who based their approach on ‘the fact of class struggle’.

Generally, socialists preferred equality ; an end to exploitation ; extension of democracy to the economy.  Marxists wanted to socialise the means of production to end both exploitation and the destructiveness and wastefulness of  capitalism and its boom-bust cycle.

But Marx had another criticism of capitalism ; and that was the way in which the division of labour and demanding nature of much work traumatised workers.   This was his theory of Alienation. Today in Australia for instance we are a world away from the working conditions of the 19^th Century.  But in call centres, offices and factories the division of labour can still exclude creative control and work fulfilment.  Indeed, work conditions can still be traumatising.

In Germany where the class struggle was advanced the Social Democrats arose as a combination of the Marxists (Eisenachers) and the Lassalleans.  Lassalleans (led originally by Ferdinand Lasssalle) believed in industry-wide co-operatives with state aid.  Eventually Marxism became dominant.  But by 1914 in Germany right-wing ‘socialists’ had come to predominate in unions and the parliament, and those people eschewed internationalism and supported the First World War.

Before World War One both the European and British socialists supported the class struggle and the fight for universal suffrage to advance workers’ rights.  But Britain was relatively liberal ; and this resulted in less emphasis on revolution and more emphasis on incrementalism.

Fabianism arose in the 1880s ; and came to represent a movement to influence opinion in liberal and progressive circles. Especially in the Labour Party in Britain.  Beatrice and Sidney Webb (prominent British Fabians) expressed sympathy with the achievements of Soviet Communism – but that view did not last.  Some Fabians would focus on practical public policy ; others on the more radical aim of incrementally replacing capitalism.  Again: Generally Fabians were gradualist rather than supporting a ‘sudden rupture’.

Modern Australian Fabianism shared the British Fabian principles and was formed organisationally in 1947.  The height of Fabian influence was in the Whitlam Labor Government.

After World War One the broad Left was generally divided into Communist, Social 

Democratic and Labourist Camps.   Although pockets of Social Democracy remained highly radical – as in Austria in the 1917 to 1934 period.  (Austro-Marxism)   These sought a ‘middle path’ between Bolshevism and ‘mainstream’ international social democracy. And there were anarchists and anarcho-syndicalists – who were significant in the Spanish Republican forces and the fight against the Nazi-backed fascist insurgency of Franco in the Spanish Civil War.

From the 1940s through to the 1980s Swedish Social Democracy enjoyed remarkable success (replicated to various degrees in other Nordic countries) with full employment, active industry policy, strong unions, and a strong welfare state.  For the overwhelming majority of this period Social Democrats held government. Basically workers received social security in return for a ‘corporatist settlement’ including wage restraint.  The full employment achieved under the ‘Rehn-Meidner model’ also made a stronger welfare state possible. Though Walter Korpi conceived of the  Swedish situation differently:  as a ‘democratic class struggle’, involving mobilisation of ‘Power Resources’ and compromise depending on the balance of class power. But in the 70s and 80s Sweden also had to respond to the Oil Shocks and devalue the Krona.  The ‘Meidner Wage Earner Funds’ plan sought to compensate workers for wage restraint by giving them collective capital share.  But this implied a radical redistribution of wealth over time.  Also - because it appealed only to workers and not to citizens, it could be argued that the funds could have included a wider base. (which is democratically preferable anyway)  Capitalists went on the offensive : socialists on the defensive. And there has been a slow retreat since.

Up until and including the 1970s and 1980s there remained strong pockets of radicalism in many Labourist and Social Democratic Parties.  But the Oil Shocks of the 70s and the drive to restore profits divided the Left and led to Socialist retreat.  Also the Soviet Collapse during 1989-1991 had an enormously demoralising effect on the Western Left ; despite the fact the Western Left had long distanced itself from Stalinism. It’s not unreasonable to see the Gorbachev reform movement as a window of opportunity ; and a missed opportunity.

From Hawke and Keating onwards Australian Labor has broadly internalised neo-liberal Ideology.  Small government,  privatisation, free trade, limits on the liberties of organised labour, trade agreements which give capital an effective ‘veto’ on regulation and public sector expansion.  Marxism used to have a strong base in the Socialist Left.  But increasingly the factions have lost ideological cohesion ; and have been subsumed in the mainstream political discourse.

Indeed, the experience of Hawke and Keating inspired Tony Blair and Antony Giddens with their ‘Third Way’ or ‘Radical Social Democratic Centre’.  In the 19^th and early 20^th Centuries ‘Centrism’ had been a largely Catholic phenomenon including limited support for trade unions, labour market regulation and welfare.  Since Giddens and Blair the ‘Third Way’ has come to represent ‘neo-liberalism with  a human face’.   Punitive welfare on the one hand, but also the principle there should be an economic and social ‘floor’ below which no-one should be allowed to fall.  Blair also marginally increased tax.  (will Australian Labor still consider tax reform for the next election?)  But he would not retreat an inch in opposing any re-socialisation – no matter how badly privatisation had failed.  (eg: of railways)  In Australia more recently ‘Centrism’ as epitomised by the ‘Centre Alliance’ struggles to maintain a credible liberalism – let alone any kind of social democracy. For instance there was conditional support for the ‘Ensuring Integrity’ union-busting legislation.  Today ‘Centrism’ in Australia can  mean a shallow populism cashing in on broad disillusionment with the two party system.   Significant parts of the ALP Right consider themselves ‘Centrist’ after the Blairite model. Blairites also generally accept capitalism as a given.

Fast-forward to 2019 and ‘What is to be done?’.

Capitalism remains more vulnerable than people think. There is much focus on public debt, but private debt is a ‘ticking time bomb’ that could lead to loss of confidence, panic and collapse.  In Australia, the US and much of the world private debt is many times the level of public debt.  The Australian economy especially has come to rest on the housing bubble. Millions are locked out of home ownership ; but sudden and radical devaluation would cause panic and collapse.  The boom-bust cycle remains a fact: but governments focused on public debt are less likely to engage in counter-cyclical measures. This could one day mean recession (or Depression) as the ‘solution’ to indebtedness.   Modern Monetary Theory (MMT) has it that government can ‘create money’ at will ; but this is not without limits. It involves a  degree of redistribution which capitalists hate – but also inflation.  Progressive tax is still more effective at redistributing wealth in a targeted and progressive way.  But certainly the MMT crowd are on to something.

The Labor Party today is probably inclined to want to ‘save capitalism from itself’.  The welfare state and higher minimum wages can assist by boosting expenditure and demand.  A return to a meaningfully mixed economy can help by reducing cost structures via natural public monopolies. This could flow on to the private sector as well.   As well, this could counter oligopolistic collusion – for instance in banking.  (actually promoting competition)  Higher government expenditure can also add money to the economy ; increase demand ; and ameliorate the explosion of private debt – which is a ticking time-bomb for the economy. (here and globally) 

An expanded social wage, welfare state, collective consumption and social insurance – can also provide social justice and social security. Think reformed pensions – easing means testing and increasing payments.  Public housing.  Better-funded schools and hospitals. More money for the Pharmaceutical Benefits Scheme.  More efficient public provision of infrastructure. (because of a better rate of borrowing and a ‘public interest test’ rather than share value and dividend maximisation)  Also consider National Aged Care Insurance and a withdrawal of regressive user-pays mechanisms.  As well as a retreat of user-pays in Education.

These are ameliorative reforms that can improve peoples’ lives.  But Australia is still captive to the global economy and will suffer along the rest of the world in any ‘general downturn’ or ‘collapse’.

Over the long term we still need to think about an alternative to capitalism. Sub-Prime and the Global Financial Crisis did not only reveal instability – It also revealed the gap between Use Value and Exchange Value as Marx would put it.  That is: there was an abundance of housing amidst widespread destitution and homelessness.   This is a real capitalist failing and vulnerability.

Marx’s weakness was that he did not propose any concrete alternative vision to capitalism. He assumed ‘the class struggle would take care of things’.   So maybe in part the ‘Utopian Socialists’ were on to something?  The context of class struggle had to be engaged with ; but also concrete visions for the future.  Today perhaps we need ‘provisional utopias’. We cannot afford to be ‘a force of pure negation’ with no vision for the future. Especially after the real historical experience of Stalinism.

But capitalism is a globally-reinforcing system.  You can’t just ‘go it alone’ in revolutionising the entire economy.  There are economic AND political constraints.

But what can be done is to begin a process of ‘revolutionary reforms’.  Say in the spirit of the interwar Austrian Social Democrats.  Even today in Austria there is a legacy in Vienna of 60% public housing – and overwhelmingly high quality public housing.  A ‘democratic mixed economy’ would stabilise capitalism (through strategic socialisation and redistribution) while at the same time advancing towards an alternative.  As in Austria this would also involve a counter culture: a rebuilding and reassertion of the labour movement ; but also a coalition with other social movements.  What Gramsci would have called a ‘counter-hegemonic historic bloc’. That also involves establishing online presences ; other publications ; public meetings ; progressive radio and television ; social events of various kinds ; plays ; workers’ sport ; radical music etc.  Establishing footholds where-ever possible.

Importantly the decline of industrial labour (with ‘deindustrialisation’) has widely meant a decline in class consciousness.  Service sector workers can be just as exploited ; but are more likely to think themselves ‘middle class’ or lack class consciousness.   We can and should fight this. But the industrial working class might not any longer be seen (in the Marxist sense) as a ‘finally redemptive’ ‘universal historic subject’.  The labour movement is central: but the modern Left also needs alliances.

And should another Global Financial Crisis occur the big finance houses should not be ‘bailed out at the public’s expense’.   Where the public sector steps in (if that occurs) it should retain a share in ownership.

Of course when it comes to advanced socialist transition bourgeois economic and political resistance has to be expected.  

The ‘democratic mixed economy’ should be the short to medium term model.  That includes a key place for natural public monopolies, strategic government business enterprises , consumers and workers co-operatives of various sorts (including multi-stakeholder co-ops which bring workers, governments and regions together) , mutualist associations . As well as ‘collective capital formation’.  ( The Meidner Funds were such ; In Australia superannuation was a very pale imitation which may actually endanger welfare into the future by narrowing its base) ‘Multi-stakeholder co-ops’ are an important idea - as they could enable expansions of economies of scale to retain competitiveness under capitalism.   All these are part of a concrete alternative. 

There is also a need to restore and consolidate industrial liberties ; to increase organised labour’s power ; its ability to deliver ; and hence its coverage, strength, and ability to contribute to change.

Furthermore: how do we tackle ‘alienation’ today in Marx’s sense?    Even with deindustrialisation, workers still find themselves alienated in modern professions – for instance call centre workers.  The ‘post-industrial utopia’ has so far failed to emerge.  At the least we can improve wages and conditions for the most exploited and alienated workers with low-end labour market regulation.  (and maybe government subsidies where the market will not bear higher wages)  Perhaps enabling a reduction of the working week for  many.  (though others would crave longer hours)  ‘Free time’ is perhaps one alternative (for now) to Marx’s vision of a communism where workers regained creative control ; and labour becomes ‘life’s prime want’.  (a quote from Marx)  But ‘alienation’ is a feature of broader Modernity and not only capitalism.  The rise of co-operatives could at least facilitate worker control – also ameliorating alienation.

In the final instance we need to think of where improvements in productivity could lead. Either to greater equality, plenty and free time for everyone.  Or in the capitalist context only the intensification of growth, profit and exploitation.  And possibly greater inequality if we do not socialise much of the gains of productivity.  What Marx called the ‘coercive laws of competition’  means that competition forces a focus on productivity for capitalist profit and short term economic advantage.   The problem is finding a way out of this ‘circuit’.   (as well as the intensification of exploitation ; and a 'lagging behind in wages' in labour intensive areas where productivity improvements are hard to come by)   We need to think where free trade and internationalism fit in to this problem.  There are environmental implications as well. Capitalism by its very nature will trend towards the ‘endless growth’ option.   Perhaps if the emphasis is on information and service industries it could be more environmentally sustainable.

But Sweden is also a warning.  Again: there has been retreat since the Meidner Wage Earner Funds.  The ‘corporatist consensus’ delivered for several decades in Sweden.  But since the bourgeoisie ‘got cold feet’ and organised more overtly against Swedish social democracy – there has been a retreat.  Swedish social democracy now has to work with Swedish Liberalism to keep the right-wing parties out ; and the price has been a retreat of the Swedish welfare state and progressive tax.  In short: Socialists and social democrats have to be ready for capitalist backlash.

Class struggle creates change. That remains true.  But so too do broader coalitions, cultural and electoral strategies.  The Fabian Society in Australia  is placed to mount cultural interventions ; and hence influence the electoral strategies of the Labor Party and the broader Left.  We won’t get all that we want all at once.  But we need a critique of capitalism.  We have to be prepared for future crises.  We have to think what a transition would look like: under what circumstances and what time frame?  But all the time considering the reality of power – economic and political ; including the power of the  State.  And all in a global context: where global progress remains limited without global consciousness and organisation.  Which is something the Fabians also need to be thinking about.  Building ties with Democratic Socialists of America, for instance, could be a fruitful endeavour.

The Fabian Society re-embracing its place as an organisation of democratic socialism means engaging with these problems.  For the short to medium term it is to be hoped we have an important strategic place in developing a ‘democratic mixed economy’ ; critiquing capitalism ; and imagining ‘revolutionary reforms’ which could decisively shift economic and political power over the long term.