Final Arguments for the Socialist Objective

 

A final passionate argument for the ALP's 'Socialist Objective' ahead  of Conference

Tristan Ewins

As ALP National Conference approaches for the end of this month, Right-wing and ‘Centrist’ forces are busy proclaiming the obituary for socialism. The argument is forwarded (after Lenin ironically) that ‘in the ALP we were never socialists’; ‘that socialism is an outdated and disproven philosophy’ and that socialism ‘has an unbearable connotation’ thanks  to a number of totalitarian regimes from the 20^th Century.  This will probably be my last personal effort to influence debate via this blog ahead of Conference.

To begin – despite ‘obituaries’ democratic socialism still has plenty of resonance in the Nordics and much of Western and Central Europe – successful economies and societies where there are strong left/democratic socialist movements. The socialist Left is also very strong in parts of Central and South America. So the movement as such is not ‘dead’ yet.

The reason socialism does not have the same ‘resonance’ in this country for now, however, is partly our own fault. (ie: the Labor Left) We are the main democratic socialist presence in this country. But because we don’t think it’s the work of a faction to engage in counter-culture – we abrogate our responsibility to pursue a cultural struggle to keep our traditions alive. So we leave it to the Trotskyist groups – and some tendencies in the Greens. And the Trotskyists at least promote it in a very narrow sense – sometimes as if nothing had changed since 1917.

This is a debate we have to have within the ALP Left. And arguably it needs to be supported by publications such as this; but also through forums and conferences, and perhaps even informal schools. In short learn the lessons re: the early success of radical social democratic parties.

That said there are many reasons why socialist consciousness has declined. Indeed, in a recent debate with a NSW Left member the argument was put that socialism is ‘outdated’ because “the vicissitudes of industrialisation no longer tell”.

Well, yes and no.

The industrial working class has shrunk and the broader working class has changed its composition. However many modern clerical jobs are just as mundane, repetitive and alienating as the old industrial working class jobs. Some such vocations even draw people together in factory-like environments. (though some workforces are also ‘atomised’ where workers labour from home without contact with other workers)  

Class consciousness is also in decline partly because of a ‘mistaken identity’ when it comes to the working class. Many white collar workers still tend to see themselves as ‘middle class’. This contributes to the demobilisation of the labour movement and chips away at class-based solidarity. Also the anti-union Ideology is reinforced regularly in the monopoly mass media. And the view that unions are to be treated primarily as political power bases – even if this means acting against the interests of the membership – can only weaken organised labour in this country over the long-run. By comparison Swedish trade unions still enjoy union density rates of over 70 per cent. (compared with 18 per cent in Australia) Sweden shows drastic decline is not unavoidable.

The broader labour movement has been stigmatised in popular culture and as a consequence of our own emphasis on the ‘virtues’ of industrial peace from the 1980s. (Industrial peace is fine where there is industrial justice; But if struggle is stigmatised that is more likely to mean defeat)

Finally socialism was stigmatised as a consequence of the Cold War – a cultural war waged over several decades – culminating in Thatcher and Reagan and the embrace of privatisation, ‘small government’, assaults on organised labour, support for dictatorial and murderous regimes, ‘class war’ against the poor and on welfare.

SO all that considered: why might socialism resonate today if only we found the courage to argue for it?

To start people still remember the chaos of the Global Financial Crisis. They remember that governments had to ‘bail out’ the big banks and finance houses. And then for the public sector to withdraw as if nothing had happened… Except for many countries (eg: Britain) the cost was in the tens of billions. (and much more in the United States)  And there is no guarantee the same thing won’t happen again.

So capitalism remains unstable. It is also wasteful and unfair. There are duplications in cost structures, and markets go places they never really should have. (including energy and water, where ideas of ‘competition’ and product differentiation are ludicrous)  Forms of market failure persist everywhere. There are Public Private Partnerships which are basically licenses for private corporations to fleece the general public. The rights of labour are under attack – not only wages and conditions – but industrial rights and liberties. The vested interests in the energy sector obstruct attempts to introduce reform for the sake of the environment. Inequality is getting worse and worse – with more and more wealth concentrated in the hands of the top 1% and the top 10% ; with relatively negligible wealth for everyone else – and an entrenched underclass which owns practically nothing.

Also, the fact capitalism is reaching its limits in terms of the expansion of the world market means desperate measures such as increasing the retirement age and increasing working hours. Yet there’s also a parallel tendency towards underwork. Amidst this, in fact ‘socialist’ policies such as promoting natural public monopolies are one option to promote efficiencies that flow on to the private sector and increase capitalism’s survivability – while at the same time beginning a shift (perhaps) to something better.

Welfare rights are also under attack; The vulnerable are stigmatised on the effective understanding that money saved as a consequence can go towards corporate welfare (primarily tax cuts, so corporations do not contribute fairly to the infrastructure and services they benefit from – which means the rest of us pick up the tab). And also to reduce the bargaining power of workers - because vulnerable job-seekers ‘are not allowed to say no’. And we have punitive labour conscription policies that look like the sort of thing that would come out of Nazi Germany.

Amidst this democratic socialism starts to look pretty good. Again: look to the parties of the Left and Centre Left in the Nordics for instance. Look to Norway’s socialisation of its oil profits. Look at Denmark’s labour market policies. Look at past successes in Sweden – full employment – much of it high wage – AND low inflation. And look at Sweden’s ‘near run thing’ on wage earner funds – Perhaps with a bit more tactical compromise earlier on it would have been a significant leap forward for Swedish Social Democracy.  (See: Andrew Scott’s ‘Northern Lights’ – A review can be found here: http://www.evatt.org.au/papers/northern-lights.html  )


But we should be clearer what we really mean when we speak of socialism. This is necessary to establish how and why democratic socialism is a better alternative to ‘laissez faire’.

For me it is simply this.

a) It is the movement which sought to extend all manner of rights on the basis of the goal of ‘equal association’ as the fair and just response to ‘the social question’. At its highest  level of development this means ‘from each according to ability, to each according to need’ – partly achieved via the social wage and welfare.

b) It is the movement which campaigned for free, universal and equal suffrage – and largely won. This was against the stands taken by Conservatives – but often even by self-avowed Liberals. (eg: in Germany; Though Swedish liberals were notable in that they did support the suffrage)

c) It is the movement that fought for social rights of citizenship – welfare, industrial rights, a mixed economy and social wage – and consolidated many gains for several decades in the post-war world.

d) It is the movement which seeks to reconsolidate those gains – but also extend them to include “economic citizenship” – That is a diverse ‘democratic mixed economy’ – not just based on ‘central planning’ – but on a mix of markets and planning; as well as natural public monopolies, government business enterprises, cooperative enterprise of many types, collective capital formation, co-determination and so on. And with no delusions as to the reality of global capitalism we’re living in – and the constraints that puts upon us for the time being. Until we are much stronger internationally.

e) It is a movement which has a critique of laissez faire/neo-liberal capitalism based on the associated waste, unfairness and instability.

f)  Finally, it is the movement which seeks to empower all human beings to reach their full potential. Through cultural participation and education. Through active citizenship in a robust democracy. By breaking down inflexibilities in capitalism – and modernity more generally -  when it comes to alienation and the division of labour.  Because that is the stuff which impoverishes peoples’ lives – condemning them to nothing but ‘a hard slog’ just to survive.

We cannot allow ourselves to be frightened into avoiding a genuine debate because the IPA or CIS might take us out of context. If ideologically “we are constantly on the run” because of fear of misrepresentation by right-wing forces and by the monopoly mass media – then ultimately we will abandon social democracy and liberalism as well. Because there are anti-democratic forces in this country who will not let up until our regime of social, civil, political and industrial rights have been driven back as far as possible. Until the ABC, for instance, is turned into the mouthpiece for a virtual one-party state. Because today’s big ‘C’ Conservatives are not really convinced democrats, liberals or pluralists. They have precisely the ‘whatever it takes’ approach which we have to deny if we are to hold on to our ‘ideological and ethical souls’….

The point is that you don’t abandon a core foundation for your values, identity and analysis because of the fear you will be misrepresented in the media and by right-wing organisations. Sure you might make tactical compromises – but you don’t abandon your very foundations.

Concluding

Apparently there are some in the NSW Left who are also arguing for us to drop reference to democratic socialism in the Platform.  But there are plenty of others – including down here in Victoria – who feel differently.  Importantly, though: Personally I have made conciliatory suggestions – that is, that we should recognise the plural nature of the modern party. But that democratic socialism must be recognised as a core and enduring tradition. (alongside others such as the traditional ‘Keynesian-inspired social democracy with a mixed economy’, and also our indigenous labourism)  What is wrong with that? ON top of that we could embrace the goal of achieving a ‘democratic mixed economy’ which could be the basis of a compromise in both the Objective AND the Economic Platform. ( For example See: http://www.onlineopinion.com.au/view.asp?article=17468 ; ALSO see: http://democraticmixedeconomy.blogspot.com.au/2013/10/what-is-democratic-mixed-economy.html )

 
To conclude, democratic socialism itself has always been a plural tradition – but generally associated with political, social and economic equality, and the extension of democracy. Liberalism remains a vital ideology – especially as promoted by radicals such as Rawls. So does democracy itself. So why would democratic socialism be different? Or is it just a tactical question of divorcing ourselves from associations with Stalinism or even Leninism? Or for the sake of appearing to be a ‘moderate’ ‘Centrist’ Party?

Sure you could say Social Democracy is also about political, social and economic citizenship… Democratic socialism and social democracy mean different things to different people. But when I speak of social democracy and democratic socialism I think of the tradition beginning with the world’s great Social Democratic parties – for whom democratic socialism and social democracy were ‘the same movement’. I also think of the theoretical and practical-political innovations of the Swedes especially. If we’re to be an inclusive Party we need to recognise those traditions as part of our heritage and as part of our modern practice.

For the LEFT especially there shouldn’t be any questioning of our supporting this. If you believe in a moderate/Centrist social liberalism – then people who feel that way might be better off in Centre Unity. (except parts of the Right have drifted SO FAR into neo-liberalism that the Left itself might be drawn right-ward to fill the vacated ideological space) That’s the path to ideological liquidation and the end of our movement.

Postscript

Mind you – while the debate over the Objective has serious long term ramifications the most crucial policy debates for the immediate future will be around tax reform (increasing and reforming the mix of progressive tax), unfair superannuation concessions, social wage and welfare extension, infrastructure including roads, schools, hospitals, public space, public housing etc… Specifically we need to implement NDIS, NBN and Gonski; as well as Medicare Dental, National Aged Care Insurance, improve welfare payments by $35/week or thereabouts, and implement policies to ‘close the gap’ on life expectancy for indigenous Australians and those with a mental illness.

( I have developed a comprehensive ‘model Platform’ which I still hope will influence debate on the Platform ahead of Conference.   The document has well over 600 supporters and can be found here: http://alpsocialistleft.blogspot.com.au/2014/08/for-equal-and-democratic-australia.html   )

Without providing enough flexibility – as against an on-paper commitment to ‘small government’ – we won’t have the scope to deliver genuine economic and social reform if we retake-government. We will ‘rob Peter to pay Paul’ as usual with little overall progress. ( For example, Medicare Dental may be accompanied by another attack on welfare-  eg: Sole Parents again) That is a truly crucial question for all of us – self-identifying social democrats and democratic socialists alike….

Social Justice for the Aged, the vulnerable and Low Income Australians

 

above: Federal Minister for Ageing, Mark Butler has had some victories for Aged Australians - But there's a lot that's left to be done!!! 

In the following article ALP Socialist Left Activist Tristan Ewins argues in favour of reform in the interests of vulnerable and Aged Australians - including tax breaks and national aged care insurance. We need ALP activists to take up these causes and make them a reality before the September election!  Mark Butler seems to be interested - But are others in the Cabinet and Caucus listening?

Firstly: Tax Breaks for Vulnerable Australians wanting to ‘shift down’ to a cheaper home

In the Herald-Sun today (June 2^{nd 2013})  Federal Minister for Ageing Mark Butler was on record coming out in support of removing Stamp Duty tax from the sale of the estates of pensioners.  The tax is seen as a disincentive to ‘shift down’ to smaller and more manageable properties – and the suggestion of an initiative in this direction is similar to what we have argued for at ‘Left Focus’ and ‘ALP Socialist Left Forum’.   This makes good sense for pensioners who can no longer manage a (relatively) large property, including properties with large gardens.

In response the Victorian Conservative government is claiming that this kind of program already exists in the form of a Stamp Duty waiver when shifting to properties up to $330,000 value, and with concessions for properties up to $750,000 value.   This may be true, but the Federal Labor government would be right to see these measures as insufficient for pensioners: with Stamp Duty still comprising a major disincentive to “shift down” to a more manageable property.    Quite simply there are few decent properties – even small properties – under $330,000 market value these days.   And pensioners may not want to move out to the outer urban fringe in order to benefit from such programs.

Also importantly: such schemes could be of interest to low income families as well, and also low income divorced singles who would benefit from ‘shifting downwards’.  For those and others of limited wealth and on low incomes for whom a property may be all they have, the option to ‘shift downwards’ to a smaller property could make a great difference in accessing funds from the sale of their residences.   It could also potentially make a great difference to disabled Australians for whom the only source of income is the disability pension.    Though to avoid the dual outcome of gentrification of some suburbs, and infrastructure and service poverty in ‘low income ghettos’ - such a policy needs to be combined with active intervention to overcome infrastructure and service deficits in affected suburbs.

So at ‘Left Focus’ and ‘ALP Socialist Left Forum’ we are saying ‘Yes’ to the removal of Stamp Duty Tax for aged and disability pensioners, as well as low income Australians and lower income divorcees for whom relocation could make a great deal of difference for their quality of life.  Though so the policy cannot be abused we are suggesting it can only apply to specific individuals once in every ten years – with the exception of house sales upon entering care.  We are saying ‘Yes’ to Federal compensation of State governments so such a policy can be implemented nation-wide – and for Labor to adopt this as an innovative and equitable policy with the election drawing nearer.  Further, we are arguing that this be paid for by restructuring the tax mix rather than through austerity.  And we are hoping some people in the Federal and State governments are listening!

Again:  Aged Care Insurance

A brief postscript, though!

We are also saying ‘Yes’ to National Aged Care Insurance as a priority comparable to the National Disability Insurance Scheme.  But we are opposing regressive user pays charges for aged care services and accommodation. 

We are saying ‘Yes’ to further improvements for the pay, conditions and career paths of Aged Care workers – As well as improvements to the quality of service enjoyed by all aged residents in care – whether high or low intensity care.   This means good quality food; privacy with personal rooms if so desired; better carer and nurse to patient ratios; facilitated social interaction and intellectual stimulation;  and access to IT for those so interested; as well as access to change of scenery including gardens.  It means gentle exercise for those capable; and prompt access to dental care if necessary.  It also means compassionate care for dementia sufferers, and a big public investment for dementia and Alzheimers’ research.  Finally it means support for Carers’ whose intervention could make the difference in preventing premature resort to high intensity care.

Not that long ago Labor figures were speaking of approaching the coming election on the theme of ‘Social Insurance’.  This still makes sense!  But since Abbott has attempted to neutralise the issue with bipartisan support for disability insurance, Aged Care Insurance as outlined here could reignite that debate. And if Abbott attempts to neutralise this issue by adopting a similar policy – then that is a progressive victory as well!

At ‘Left Focus’ and “ALP Socialist Left Forum’ we have argued that Tony Abbott is betraying his Democratic Labor Party heritage by taking a hard line against social welfare, and policies which punish the poor and vulnerable. ‘Compassionate conservatism’ which has a heart for social welfare may not be our ideal – but it is better than contemporary neo-liberal  Neo-Conservatism – which ‘has no heart’.  If by some quirk of fate there are Conservatives reading this post, we urge them to consider the positions of the post-war German Christian Democrats and their support for social welfare and a ‘social market’.  We are saying this well aware that the other aspect of the DLP was its regrettable role in a split which kept the ALP out of power for decades; and which took an anti-liberal authoritarian line in favour of literally banning the Communist Party of Australia; and opposing militant unionism. But perhaps were Labor to adopt Aged Care Insurance – Abbott might also rediscover his conscience and assert himself publicly and in the Liberal Party Room ahead of the election – in favour of the policy.   

And again: win or lose the election – by initiating the policy and potentially securing bipartisan support Labor would have achieved a vital progressive victory. 

Australia: The Consequences of Privatised Infrastructure

In this article Tristan Ewins considers the problems associated with privatised infrastructure: especially privatisation of roads. He critiques the abandonment of the mixed economy by Labor, and urges a return to such a model - but also the extension of a more progressive "democratic mixed economy'. Debate welcome!

Readers are also welcome to join our Facebook group which hosts regular debate, and publishes notice of new material at the blog. See: http://www.facebook.com/groups/102658893193637/

Tristan Ewins

In Melbourne’s “The Age” on July 17th the headlines proclaimed “Tolls urged on existing freeways”. Apparently advisory body “Infrastructure Australia” is frustrated with ever worsening infrastructure log-jams. Whether we’re talking about ports, roads, public transport or new utility infrastructure (gas, water, electricity) – the trend for many years now has been towards infrastructure privatisation – usually in the form of Public Private Partnerships. (PPPs)

In fact both Labor and Liberal governments have been guilty of jumping on the “PPP bandwagon” – to the benefit of their friends in the private sector for whom PPPs were often akin to “a license to print money’. Now ‘Infrastructure Australia’ is urging either public finance of new infrastructure – or privatisation of existing infrastructure and imposition of user-pays charges in order to provide the funding for new roads especially.

Tim Colebatch – also of ‘The Age’ has explored the associated issue in depth. Colebatch poses the question as follows: Australia has a choice in how it pays for an estimated $700 billion in socially and economically necessary infrastructure over the coming decades. See: http://www.smh.com.au/opinion/politics/heres-a-way-to-get-700bn-of-infrastructure-we-need-20120716-226gi.html

In fact we have three options.

a) We can continue to allow the infrastructure backlog to accumulate – actually damaging our productivity and quality of life – especially for families in emerging suburbs where transport infrastructure is negligible.

b) We can impose user pays charges upon existing roads or privatise them outright

c) We can actually raise taxes and invest in infrastructure the old way – via public borrowings and infrastructure bonds

In fact the neo-liberal Ideology is so entrenched now that the prospect of public investment in new infrastructure might be viewed by some as kind of radical. This is patently ridiculous - but we have an entire generation who have known little except PPPs and other forms of privatisation. The combination of mixed economy and welfare state – for decades taken for granted during the post-war period – is now thought of as belonging to the ‘political fringe’. Indeed our friends in the hard Right of the NSW branch of the Labor Party might now consider the model of traditional social democracy as “extreme”. Even Anna Bligh’s government in Queensland – Bligh herself hailing from the Left (!) – privatised energy and rail assets – in a move that led to extensive defections from Labor and Queensland unions to the Greens. And now the neo-liberal ideologues are pursuing a new wave of privatisation at a level that once upon a time would have been considered outrageous. Yet the arguments for a return to the mixed economy are clear and they are sound.

Tim Colebatch raises the spectre of Australia and its various state governments losing their AAA credit rating were we to lift our borrowing ceiling. But what if said borrowing was clearly established as being fiscally sustainable by raising taxes to the level necessary to service and repay the debt? And if increasing a nation’s debt ceiling results in a reduced credit rating – regardless of said states’ structural capacity to service the debt – does this make sense? Or is it an Ideological prejudice that ‘locks in privatisation’? Indeed: Can global or regional social credit provide an alternative? Such questions need to be posed now more than ever.

The problem is that the alternative to higher taxes and higher public investment is much more worrisome. So public finance of infrastructure is preferable for a number of reasons.

Firstly the Federal and State governments can borrow at a more competitive rate than any private sector operator.

Secondly, the argument that PPPs ‘pass on risk’ is fallacious – as when PPPs fail governments inevitably have to step into the breach and pick up the pieces.

Thirdly, privatised infrastructure involves user-charges that operate like regressive, flat taxes. Not only are the increased cost-structures of private finance passed on to consumers: but low and middle income groups are disproportionately affected.

The following is most crucial: Under privatisation most citizens pay much more in their capacity as consumers than they would in their capacity as tax payers with public finance. Privatised infrastructure is bad for equity purposes – with the increased cost structures flowing on to business as well as consumers. The consequence of this is thatinfrastructure privatisation is bad for capitalism in addition to being bad for equity.

We need only look to the costs of energy infrastructure privatisation in Australia to grasp the consequences of infrastructure and utility privatisation for a spiralling Cost-of-Living. Private investment in new energy infrastructure is being passed on in the form of consumer charges that have largely seen energy prices in Australia rise by 40 per cent over the past five years. http://www.abc.net.au/news/2012-03-21/australians-pay-highest-power-prices-says-study/3904024

Full privatisation of infrastructure is obviously the greatest threat – as compared with imposition of tolls on public-owned infrastructure – as user charges become entrenched permanently, rather than comprising an ‘emergency measure’.

But how and why has the ideology of privatisation taken hold – even within the ALP itself? What are the consequences? What is the alternative?

For decades progressives and social democrats have been on the back foot when it comes to privatisation. It is the author’s opinion that many younger members of the Australian Labor Party cannot imagine what a real mixed economy would look like; or conceive why it would be desirable; or conceive anything outside of the neo-liberal framework. Within the ALP there is even scepticism with regards reform of tax and meaningful extension of the welfare state and social wage.

Even on the ALP Left there is an ‘ideological drift’: a loss of a sense of perspective and purpose as the substance of democratic socialist policy is increasingly seen as ‘unspeakable’ even in internal forums.

Without being regularly reinforced through a vigorous and participatory counter-culture traditional Left ideals are fading. Liberalism is filling the void. By while liberalism is part of the answer, it is not sufficient to meet the ‘social question’ which provided the original source of inspiration for Labor. While worthwhile causes such as the rights of refugees and the right of those of queer sexuality are important, any critique of neo-liberal capitalism is relegated to the far margins. Such a critique could advance to cause of moving back towards a mixed economy - including natural public monopolies, as well as government business enterprises which actually enhance competition while providing cross subsidies for disadvantaged consumers. And more particularly progress could be made towards a democratic mixed economy, which could also be marked by co-operative and mutualist enterprise and co-determination.

The power-brokers do not seem to understand that the firmer the control they exert over the grassroots, and the more grassroots initiative is obstructed, the consequence is the decline of the ALP as a movement, and the loss of democratic socialist ideology, culture and identity. At this rate all that will remain ultimately is a patronage machine – which is how some people seem to like it. The disillusioned flock to the Greens – and yet even amidst the current crisis of support for Labor, the Greens’ mass electoral appeal remains largely confined to inner suburbs. Labor remains a crucial electoral bastion that must be contested by progressive forces.

There has been a steady line of retreat since the 1980s on the Left - from a perspective favouring economic democracy, to a rearguard action in defence of a robust mixed economy, to neo-liberalism and a minimal public sector sustained by some residual ‘natural public monopolies’ – and finally now the almost absolute expunging of the public sector from even those sectors of the economy where it is in capitalism’s own interests to contain its cost-structures via public ownership.

We need, now, to return to the theme of the democratic mixed economy: in a sense to ‘save capitalism from itself’ – not necessarily because all facets of capitalism are worth saving – but to prevent the human suffering that comes in the wake of capitalist contradictions. And over the long term we can still aspire to the extension of political, social and economic citizenship – culminating in a qualitatively better social order.

For now a hybrid system can provide the best mix of socialist efficiency and fairness, and market-facilitated innovation and choice. This is the democratic socialism the Labor Left – and the Centre-Left more broadly – needs to return to. It demands a robust counter-offensive against neo-liberalism – not merely another faltering rearguard action in the face of this latest ideological and public policy assault. It requires pro-active advocacy in favour of a democratic mixed economy. And it requires the implementation of these principles by Labor in the field of public policy.

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.”

Socialism and ‘saving capitalism from itself’ – A response to Nigel Farndale

above:   the red-flag in a characteristically Australian context

The following is the first-ever post for 'ALP Socialist Left Forum'. To 'kick off debate' this article comprises discussion of British author Nigel Farndale's call for moves to 'save capitalism from itself'. What are your views?   What is the relevance of this debate for how we see ourselves on the Left; and for our policy agenda?   We welcome opinions across the spectrum of the ALP Left - whether more radical or relatively moderate.

ALP Socialist Left Forum is also a Facebook Group and blog open to ALL ALP Left members and genuine supporters. 

The purpose of the Group and the Blog is to discuss Policy, Strategy, Theory - and all matters relevant to the Party. 

Already we are over 200 members at Facebook.  The aim of this blog and the related Facebook Group is to create a space for shared discourse across the entire ALP Left.  If you're an ALP Left member or supporter - that means we want YOUR participation: In the group and in the blog; through formal sumbissions of articles or policy paper for this blog - or just through debate.  If you're a Left member or supporter your participation is welcome. (Pls join)   

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In the midst of the worst global economic crisis since the Great Depression, British author Nigel Farndale has had published in the Sydney Morning Herald an interesting article exploring the means in which capitalism might be reformed – perhaps ‘to save it from itself’.

 Farndale considers two economic movements in the context of his article. 

Firstly, he considers the ‘decroissance’ (ie: ‘decrease’) movement in France.  This movement denies the centrality of General Domestic Product (GDP) to ‘economic success’ – pursuing ‘quality’ for all rather than mere ‘quantity’. Hence Farndale quotes UBS chief-economist, George Magnus on “the need for a happiness index, or an economic and social well-being index”. Crucially, this perspective seems also to recognise environmental constraints for certain kinds of growth – capitalist or socialist. 

Secondly, Farndale mentions the “PARECON” movement – which promotes ‘participatory economics’ – with worker’s self-management and solidarity, and greater equality for people in their status as consumers as well as workers.  But although otherwise sympathetic, Farndale dismisses the concerns of this movement for equality in terms of economic power as “back to basics communism”.

 Farndale argues that capitalism is a dynamic and evolving system.  Indeed, he contends that ‘capitalism is to thank’ for the welfare state. He seems to argue that only capitalism – through competition and enterprise – can provide growth and recovery. After all – what alternative is there if capitalism ‘has been [with us] through antiquity, feudalism” and so on? And if capitalism is reducible to the existence of markets surely it is inevitable in one form or another…

In response to Farndale, it is important to challenge his conception of both modern capitalism and socialism.

For Marx modern capitalism meant more than the existence of private ownership and markets.  Under the modern capitalism identified by Marx production for profit, and the rise and dominance of a specifically capital-owning bourgeois class came to eclipse the remains of feudalism. It also saw the demise of artisanship and craft labour and the marginalisation of old forms of self-employment.  In their place capitalism brought mass production, mechanisation, deskilling, and an unprecedented commodification of labour.

During this early period wage labour was a matter of subsistence with workers realising little of the increased productivity for themselves. And unlike with artisanship and the craft economy, the product of the worker did not belong to him/her, but was expropriated for sale by the capitalist. (Hence for workers there was – and still remains - a degree of unpaid labour time and effort) This was in addition to the alienation resulting from brutally demanding and unsafe work practices, involving men, women and children on 14 hour days, with night labour, and worse.

 Increasingly, however, the capitalists who expropriated surplus from these workers were seen to develop into a ‘rentier’ class: who by virtue of their wealth could simply delegate matters of management. Of course it wasn’t all like this: there were innovators and visionaries (as there are today); and there were the small capitalists who worked as hard as anyone. These people often went bust in the face of competition; and more particularly in the face of increasing monopolisation. (which meant they could not compete)  While Marxists such as Karl Kautsky appealed to the small-capitalist middle classes that socialism would provide them with security, Conservative, fascist or economically-liberal forces (a mixed bunch) tried to turn their attention against the organised working class as a threat to their survival in the capitalist context.

But the boom and bust cycle – and capitalist crisis more generally - was more than the ultimately ‘creative destruction’ Farndale refers to. There arose structural and functional unemployment – with a ‘reserve army of labour’ exploited to inhibit working class organisation; driving down wages and conditions, as well as inhibiting employment security. There was immense waste as competition forced the premature and continuous modernisation of the means of production - even when existing machinery had not yet been sufficiently utilised.

Only the monopolists with huge reserves of capital could survive in this environment – hastening the concentration of ownership AND power. In the event of cyclical crises immense amounts of capital and produce were destroyed because unprofitable in the marketplace– even where there was massive unmet human demand and need. Inequality of wealth amongst consumers narrowed the market and thus actually inhibited the system.  

Farndale is right, though, that capitalism has evolved. In different guises it survived the 20^th Century in the sense of becoming a HYBRID system.

 On the one hand - From laissez-faire origins and the age of the individual entrepreneur there emerged the joint-stock company, the trust, the rise and interpenetration of industrial and banking capital. There arose what ‘Austro-Marxist’ Rudolf Hilferding called ‘Finance Capital’ – with unprecedented centralisation of ownership, control, and hence political-economic power. Capitalism evolved with the rise of imperialism, and the competition between nation-states and their constituent capitalist classes for control of markets. At various times capitalism has adopted an ‘organised’ form: especially under conditions of total war.

On the other hand post-war hybrid economies saw the introduction of the advanced welfare state; of labour market regulation and rights for organised labour; of the mixed economy – with emphasis on areas of ‘natural public sector monopoly’. In countries such as Sweden and the other Nordics there emerged some of the most extensive welfare states anywhere: where security was combined with efficiency to provide ‘the best of both worlds’. Innovative ideas also included collective capital formation and co-determination.

Even in 20^th Century Australia a compromise developed involving labour market regulation and strong unions, as well as socialised health-care, and ‘natural monopolies’ in energy, gas, water, communications, and other crucial infrastructure. Also there was strategic public ownership in areas like banking and insurance to actually maintain competition and provide for consumers otherwise excluded or discriminated against because of lack of market power. For a long time even political conservatives in Australia - in the Liberal Party and Democratic Labor Party - supported much of this compromise.

 In recent decades these variants have themselves been displaced by resurgent ‘laissez faire’ capitalism. Falling profits have been responded to with assaults on the rights of labour. Exploitation has intensified with a mix of ‘labour market deregulation’ and increasingly draconian limits on the industrial action available to workers. (so much for the ‘liberty’ held high by faux-liberals!) Various forms of ‘corporate welfare’ have emerged. This has involved an effective subsidy through maintained provision of infrastructure, education and training even in the context of corporate tax cuts, and increasingly regressive taxes for workers, consumers and citizens. But the myth of triumphant capitalism has remained partly through the effect of technological innovation on peoples’ lives; and partly because of enduring myths about socialism; and the reality of Stalinist implosion in the late 20^th Century.

 In the short to medium term capitalism must again hybridise if it is to survive, and if it is to provide security and happiness for citizens, consumers and workers it must again incorporate significant socialist aspects.

A mixed system including economic socialisation and democratisation, here, is one possible response. In Sweden socialists attempted to extract a greater share of democratic ownership in the economy as a trade-off for years of restrained wages; as compensation for resulting excess profits in some areas; and as a response to centralisation of private capital ownership. That effort (for ‘Meidner wage earner funds’) failed because it attempted too much too quickly – and because it promoted exclusively wage earner funds rather than funds controlled by ALL citizens. But many of its principles remain valid and instructive.

Many of the problems identified by Marx still exist for modern capitalism. There remains a tendency for profits to fall – though ameliorated by the countervailing impact of qualitative technological leaps in productivity and material living standards. Labour and Nature remain the sources of all material goods: and regardless of objectivist and subjective interpretations of value, the reality of surplus extraction remains – even if it cannot be nailed down with precision. (there is the question of fair return on investment; considering the deferred gratification of small investors; as well as return for innovation and initiative)  

 More recently, with rapidly evolving technologies there has emerged the practice of planned obsolescence: unnecessarily staggered release of technology intended to maximise sales.  

As well as demand management there is a need to capture the forces of innovation and efficiency that are unleashed by competition, while at the same time experimenting with more co-operative forms, and countering the effects of unnecessary and counter-productive cost-structure duplication, and private monopolistic abuse of market power.  Also there is a need to counter demand-crises rising from inequality, and other forms of excess and waste.  Hence strategic re-deployment of natural public monopoly and other appropriate forms of public sector extension.   Finally, collective consumption via the social wage and welfare state provide the most efficient and equitable means for citizens and consumers to access essential services in health, aged care, education, unemployment insurance, and other necessities.

Farndale condemns the idea of some ‘New Man’ he sees as embodied in the Marxism of Stalin and Mao. But for earlier moderate and democratic Marxists such as Karl Kautsky one of the most noble aims of socialism was to democratise culture – to bring culture to the people. Since then we have seen the rise of universal education including a critical element incorporating the humanities and social sciences.  Abundance that Marx could barely dream of has brought music, literature and new information technologies to the masses.   The aim of socialists today is to further that democratisation of culture – through further extension of critical participation in the humanities and social sciences; through a culture of active citizenship; through the development of a participatory media and public sphere.

In bringing our attention to the PARECON and ‘decroissance’ (‘decrease’) movements Farndale does readers a genuine service, however.  Though over the longer term there is still the dream of a more robust democratic socialism, these movements continue to demonstrate some of capitalism’s greatest failings; and show that current-day crises can only be fought off with compromise – with a HYRBID system – as much liberal democratic socialist as capitalist.

Tristan Ewins is a Politics PhD candidate, as well as a long-time freelance writer, having written for many publications including 'The Canberra Times' and the 'Journal of Australian Political Economy'.  He is also a long-term grassroots ALP Left activist.