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Showing posts with label co-operatives. Show all posts
Showing posts with label co-operatives. Show all posts

Sunday, April 21, 2024

The ALP - Arguing for a Minimum Program

 


by Dr Tristan Ewins ; ALP member of over 30 years

The ALP has long been characterised by internal ideological divisions between self-identifying social democrats and self-identifying socialists.  This division has always problematic because there are competing definitions of social democracy and socialism.  Sweden has been described both as socialist and social democratic. Democratic socialists always contested the notion that the former Eastern Bloc represented ‘real socialism’.   Other socialists continued to find inspiration in one or another form of Leninism.  Some self-identifying social democrats simply see their politics as ‘progressive but moderate’.  In a relative sense we think here of a ‘traditional social democracy’. Other social democrats identify as ‘revolutionary social democrats’: basically a continuation in the tradition of early Marxism. (before Leninism, and typified to a degree by the example of Austrian social democrats in the 1917-1934 period)  This paradigm of socialism (the Austrian example specifically) is notable for adherence to revolutionary aims ; even if pitched as ‘revolutionary reforms’ or ‘slow revolution’.  It is not opposed to socialism (or democracy) as such – but rather is a reclamation of an old politics where ‘socialism’ and ‘social democracy’ were not opposed to each other.  The question I intend to explore here is ‘what is a reasonable minimum program for the ALP, which brings together the Party’s diverse ideological elements?’.   What elements of a Party program should all members of the ALP share adherence to?  This is no easy question to answer: as there must be a degree of ‘give and take’, but without compromising on certain basic issues.  There’s also the question of what the modern ALP Left should stand for: and whether or not it is also ‘losing its way’.


The ALP used to adhere – in theory – to its own ‘Socialist Objective’.  This was always complicated by the so-called ‘Blackburn Amendment’ which committed itself to socialisation to the extent of eliminating “exploitation and other anti-social features”.   It was long considered by some as a ‘dead letter’ ; at odds with the practice of actual Labor policy ; and containing a contradiction: at least as far as Marxism is concerned.  For Marxism exploitation is structurally inbuilt in capitalism (expropriation of surplus value) : and socialisation must be absolute to eliminate it entirely.  Arguably the Objective was also at odds with political practice on the ALP Left ; despite the Left fighting tooth and nail for many years to preserve it.  When arguing for the preservation of the Objective Left leaders such as Kim Carr watered down their arguments to the point  where there was a very significant loss of meaning and content – in an attempt to broaden its appeal.  Guy Rundle has described Carr’s project as one of ‘national social democracy’ characterised by greater self-reliance in manufacturing.  But does this meet appropriate minimum requirements as a ‘stream of socialism’?  Meanwhile, Rundle portrays the rest of the party of embracing “distributionism” which aims to broaden economic ownership, including a place for co-operatives, but does not aim to negate capitalism’s core dynamics.  This means more than competition and markets ; it means accumulation of capital and hence political power in the hands of a dominant capitalist class – achieved through economic relations of exploitation. Meanwhile  avowed ‘Third Way’ politics water down social democracy itself – even in the traditions of ‘mixed economy and welfare state’ – to the point of meaninglessness.

For socialists in the Labor Party the reality is we cannot have it all our way.  And there are questions as to what ALP Left politics are really about these days anyway.  Cynics might argue that in practice the ALP Left simply stands for “a slightly bigger welfare state and social wage” ; and “a slightly more progressive tax system”.  Though incremental improvement of welfare, progressive tax and the social wage is desirable if the progress is sustained. The Left itself needs its own statement of beliefs: which involve a more fundamental critique of capitalism.  This might include critiques of monopolism, exploitation, alienation created by physically demanding work, and work involving lack of creative fulfilment and control ; as well as economic cycles and crises, and the distribution of political and economic power.  But these could also include building blocks for the broader Party.

To begin it is worth considering the common ground between different schools of socialism and social democracy in terms of a minimum program.  This would be inclusive of a steadily expanding social wage and welfare state – preferably to Nordic proportions. (in the sense that was realised at the height of Nordic social democracy)  Though Nordic Social Democracy has long been in retreat ; and this means we need to take their example with a grain of salt.   This means more robust pensions ; comprehensive socialised health (including Medicare Dental)  ; and appropriate subsidies for services and amenities  fundamental to modern human existence. This includes power, water, socialised or co-operative housing, communications (including internet access), transport, availability of nutritious food, and so on.  Ongoing Education is also crucial to modern life ; and all people ought be able to pursue personal fulfilment through education as well as skilling up to meet labour market requirements. 

While the reality is that the modern labour market is characterised by exploitation (workers do not keep the full proceeds of their labour power) , we do operate in a global economy where it is necessary to sell labour power in order to participate.   Right now there is ‘no way out’ of capitalism ; but that does not mean we cannot have a critique which informs strategies which address the anti-social, irrational and unfair features of the system. The Left should have a critique – including of the core workings of capitalist political economy ; and it needs a code of principles which provides this ; but a minimum program for a wide range of socialists and social democrats also needs to account for an alliance of forces including elements who are not committed to negating capitalism ; even far into the future.  Something needs to change in discourse more broadly – with an effective counter-hegemony - to achieve anything like a consensus on a Socialist Objective within the ALP.  This means we need a mobilised Left fighting to challenge ‘common sense’ ideas both within and outside of the Party.  Arguably the Communist Party of Australia used to play this role very effectively ; as did other Western Communist Parties - even though they did not usually enjoy significant electoral success.  (The Communist Party of Italy – the PCI - is a very important exception ; having won very strong electoral success for many decades)

That said, a minimum program could include a commitment for the foreseeable future to a democratic mixed economy ; or a hybrid system.  Strategic socialisation should be pursued for reasons of economic efficiency, equity, and sovereignty.  In areas characterised by a lack of competition, or by collusion – government business enterprises can be a game changer.  Think banking, general insurance, health insurance, postal services. In other areas it is appropriate to have natural public monopolies.  Infrastructure in energy, water, communications, transport -are other areas where the logic of natural public monopoly ought apply.  Public monopolies in these fields translate into reduced cost structures ; with the benefits flowing on to the economy more broadly, including consumers.  Governments – including Labor Governments – have systemically undermined the place of natural public monopoly in the economy.  But we need a debate on this within the Party ; about a commitment to strategic public ownership ; and if possible to natural public monopoly in specific fields such as water, energy, transport and communications infrastructure ; as well as a restoration of a public sector job network after the example of the old CES.

Still ;  it is hard enough already getting many self-identifying  ‘moderate’ social democrats to even agree to restoring a public sector role in these fields (in competition with private enterprise) ; let alone restoration of natural public monopolies.  Nonetheless the Left should lead a debate on natural public monopoly and strategic (including competitive) government business enterprise.  Specifically, a minimum program should refer to a democratic mixed economy ; and this should frame an internal debate which the Left tries to lead.  Government could also invest in primary industries ; and in Australia especially there is great scope to benefit from a public role in minerals exploration and mining.  Billions in revenue could be directed towards social programs.

Co-operatives could also play a central role in a democratic mixed economy ; and as far as they reach they attack economic exploitation at its very roots.   It’s important to observe, however, that even in Spain where the successful Mondragon Co-operative operates – that co-operative ownership is not very significant in the context of the broader economy.  But particularly, in Australia government could underwrite co-operative enterprise to enable it to remain competitive on global and local markets ; including by investment in Research and Development and economies of scale.  Government could also provide cheap loans to facilitate the establishment of co-operatives ; including smaller scale co-operatives – eg: co-op cafes – which not only attack exploitation ; but which also allow intimate creative control by workers.  Strong policies could secure a significant (as opposed to marginal or minimal) place for co-operatives in the Australian economy.   But importantly, co-operative enterprise is not a substitute for the public sector: both play a core role in a democratic mixed economy.  Commitment to promoting a greater and greater role for co-operatives in the economy needs to be integrated in a minimum program.

Other areas where an agenda of popular and workers control could be advanced include co-determination and collective capital mobilisation.  In Australia superannuation funds have become powerful players in investment.  Though they operate in the capitalist context ; and tend to adhere therefore to capitalist imperatives.  (eg: share value maximisation) Hence they advance a distributionist agenda ; but not much which is more radical.   Also public pension funds would have been more equitable ; and the superannuation system threatens the eventual marginalisation and undermining of the public Aged Pension over time.

Meanwhile, co-determination can manifest either as consultation, or in the sense of all parties having to agree on major decisions. In Australia the starting point would be workers’ representatives on company boards. Hence workers could have ‘an insiders’ view’ on the decisions affecting their productive lives.  This specific strategy would not be radically transformative in the sense of workers’ control ; but it would be a step forward.  Again we need to set the broad framework in a minimum program ; and then for the Left to lead a debate within that framework.

There is a broad scope to reform welfare. Labor should also be committed to strengthening the Aged Pension, Disability Pension, Job Seeker’s Allowance,  Sole Parents’ Pension , Austudy, and other welfare.   The Disability Pension (and National Disability Insurance Scheme supports) should be for life- in the sense of not being withdrawn depending on age.  Also, there should be more scope to earn additional income through casual or part-time work (or other means) without losing the Disability Support Pension. And entering into a relationship should not see a substantial portion of welfare payments withdrawn.  The NDIS should be strengthened more broadly also  ; not undermined.  University fees should be replaced by progressive tax levies which effectively relate proportionately to the actual financial advantage gained.  A Garaunteed Minimum Income relating to the cost of all fundamental needs could consolidate basic universal economic rights.

In a minimum program reference could be made to all pensions ; and the imperative of providing them on the basis of need.  (again perhaps expanded, and then indexed quarterly to inflation or cost of living – whichever is greater).  The debate on a Garaunteed Minimum Income can be won ; but it may take time to integrate it into a Minimum Program.

Finally there are issues of human rights, labour market and industrial relations rights, and housing – which also need to be addressed in a Minimum Program.  Labor needs to be unequivocal in a Minimum Program in its commitment to freedom of association, assembly and speech ; as well as the right to basic needs such as housing, heating, cooling, nutrition, education, health services, access to transport services, and access to communications and information technology.  This needs to be amended as new relative rights and needs arise with technological and economic progress.  The right to engage in Pattern Bargaining and to withdraw labour in good faith (whether for industrial or political goals) needs to be promoted ; and at the lower end of the labour market especially more robust minimum standards and regulation need to be provided for.  This should have a substantial effect if implemented in the case of heavily exploited ‘feminised’ industries.

Again, shelter is a human right ; and government policy (including provision of public housing) should seek to achieve its universal fulfilment. Government could also help facilitate co-operative housing, and affordable housing – through subsidies and regulations.  The Federal Government and the States have long lagged behind here ; and support from the Federal Government especially is needed – as they do not endure the same fiscal constraints as do the other tiers.  Recently there has been a trend to promote ‘affordable’ housing (as an alternative to public housing) through deals with private developers ; but while this strategy can provide better outcomes for some renters, it does not achieve either efficient financing or equity compared with public housing.  Labor needs a minimum program which significantly expands an ongoing policy of building enough high quality public housing to meet the demand ; while looking to the Austrian example to destigmatise public housing and establish it as an option for all Australians ; including but not limited to the most disadvantaged.  A minimum program needs to aspire to this ; and it should not be controversial for genuine social democrats and socialists.

In conclusion Labor also needs an independent foreign policy outlook and a humane policy with regards to rights of asylum seekers. We should lead the way on defusing conflicts between China and the United States and heading off any potential war. And there is no place for Mandatory Detention in any Party of the broad Left.  We should also promote 'deep democracy' ; supported through civics education 'for active, informed and critical citizenship' ; and government programs which put active citizenship at the centre of policy. This could include government funding to access public space - including, for instance shopping centres - where political and social movement organisations across most of the spectrum could promote their own ideas of 'active citizenship'.

In short – and to summarise in conclusion - a Minimum Program should promote a progressively expanding social wage and welfare state ; as well as a democratic mixed economy – with stronger public and democratic sectors which aim to improve underlying cost structures to the benefit of the broader economy and consumers - through strategic public ownership.  Here, the social wage includes socialised health and education ; and ensuring universal access to shelter (including public housing) , information and communications technology, transport services ; and a minimum income where access to energy and water is also universal.  And with a steadily more progressively-structured tax system – with an open commitment to just economic redistribution.  And we will define the welfare state’s role as comprising social provision of income ; especially the vulnerable ; with cross-over between welfare state and social wage where it comes to social services.  

Also the minimum program should include reference to the progressive expansion of economic democracy on several fronts ; and the provision of fundamental industrial and broader human rights.  This means a regulated labour market and the right to withdraw labour in good faith for industrial or political purposes.  As well as the minimisation of the anti-social complications of capitalism ; including its crisis-prone nature ; its tendency to concentrate wealth and promote monopolism ; as well as problems of inbuilt obsolescence – and of collusion and other anti-competitive or anti-consumer practices.   Also ‘the market’ does not necessarily ‘organically’ provide for human need – though there is a role for it in providing for the flexible satisfaction of individualised needs structures.   The need for choice – and hence competition – means there are limits to socialisation – at least under current conditions. ‘The market’ has a place ; but so too does social provision which goes beyond ‘market logic’.

This article has sought to explore the issues which should inform a minimum program for the ALP.  It should be possible to win broad agreement on most of this article’s broad tenets.  In other areas the article has outlined areas where minimum policies could be applied ; but where the Left should lead the debate in terms of achieving stronger policies. 

Also importantly ; there are limits to purely electoral politics – and there is a need for an organised counter-hegemony.  The counter-hegemony should seek a more radical reframing of debate and issues than the minimum program ; and it is necessary to build an alternative to the old Western Communist Parties who used to contest ‘political and economic common sense’.  But that is beyond the broad scope of this article. 

The point is that it is possible to achieve broad agreement on a minimum program which mobilises the broad Labor Party and frames its policies.  The minimum program, here, attempts to frame the ALP as involving currents ranging from traditional social democratic (mixed economy, labour rights and welfare state) on the relative right, to democratic socialism and revolutionary social democracy on the Left.  (involving a more ambitious agenda of economic democracy and socialisation) And these various currents are considered as being capable of solidarity behind basic programmatic and policy principles and agendas.  The most diluted ‘Third Way’ positions – which stand for little in terms of the traditions of social democracy or socialism – need to be seen as liquidationist – and hence are not accepted within the framework of the minimum program.

It is hoped that this article will promote debate and influence the development of the ALP’s Platform running up to the next National Conference.  And also the development of a program behind which both elements of the ALP Left and the ALP Right might be able to coalesce ; as well as non-aligned elements.  This goes so far as to problematise the very idea of an ‘ALP Right’ which is right-wing on the broader political spectrum. Even the most relative right-wing elements in the ALP should be relatively Left on the broader spectrum.  We all need to see ourselves as part of a ‘broad Left’, and in this sense having common cause.  Once we agree on this perhaps we can truly ‘move forward together’.

Friday, August 17, 2012

State and Market - a Democratic Socialist Approach


above: 'people power' - time to build a democratic economy

In this new essay Shayn McCallum explores the possibilities for a genuine democratic mixed economy; one profoundly more radical that the social market approach. Debate welcome!

nb: Readers can join our Facebook group too!! at: http://www.facebook.com/groups/102658893193637/


Current debates within the European socialist movement on the way forward for the Centre-Left, often seem to be centred on the unnecessarily narrow field of “state versus market”. Much of the debate revolves around questions of the “correct ratio” of state-to-market in the provision of public goods and services, with scant attention given to the political nature of either. Where an economic vision is articulated we see labels such as “decent capitalism” or the highly traditional “social-market economy” employed. Both of these terms however, borrow heavily from a terminology, and therefore a mind-set, which is not of the Left and which unnecessarily limits and restricts the thinking of social-democratic strategists and activists.


The work of George Lakoff and Drew Westen[1] into the neuro-linguistic dimension of politics reveals a great deal that is useful in considering the current weakness of the Centre-Left and its apparent loss of creativity and direction. In accepting the essence of the liberal world-view and limiting its criticisms of the liberal project to the details rather than the over-arching vision, social-democrats have been reduced to becoming the “annoying flea” of politics, creating little more than an irritation for the continuing (neo-) liberal agenda. It has proven relatively easy for conservatives and liberals in Europe and elsewhere to dismiss social-democratic complaints about the ruthlessness of capitalism as mere faint-heartedness or an unrealistic inability to face up to “what must be done”. What is worse, the social-democratic discourse reveals that they may suspect that their neo-liberal opponents might be right after all; thus, the unsure, excessively tentative, somewhat vacuous nature of much social-democratic discourse.


By adopting terms such as “good capitalism” to combat the “bad capitalism” of the neo-liberals, social-democrats are exposing themselves to the obvious response, common to both far Left and Centre-Right, that really “there is just capitalism” and adjectives such as “good” and “bad” are irrelevant or misplaced. For the hard-core economists of the Right, as much as the more economistic voices on the hard Left, speaking of “good” and “bad” capitalism makes as much sense as speaking of “good” or “bad” gravity or “good” or “bad” oxygen. The term is weak, ineffective and unambitious and fails to offer more than a limp moral critique of the system as it is. In fact, the charming vision of a virtuous, industrious society re-enshrined in the virtuous “real economy” of manufacturing and productive industry is not only a fantasy, it is, in many ways, a reactionary one at that. When ecological collapse is looming right behind the collapse of the unbalanced and excessive, increasingly-consumption driven, global economic system, producing yet more “stuff” is probably not the optimum way forward from where we are now. Short-sighted, populist attempts to revive the industrial revolution in the wealthy nations makes as much sense as trying to stop the Titanic from sinking by making the orchestra play more slowly. The era of unsustainable industrial growth, at least in the first-wave of industrialised nations, belongs to the past not to the future and this is, perhaps, one thing the “neo-social democrats” have got right.


The state we are in demands a much bolder response than a nostalgic appeal to the good old days of industrial growth. Terms such as “decent capitalism” or even the “social-market economy” are flawed, in that they create a conceptual framework that is inseparable from, and therefore unable to move beyond the basic framework of the existing system. In contrast, by adopting terms such as “economic democracy” or even “a democratic mixed economy” socialists would have the means to open up this currently truncated and inhibited conceptual framework and, potentially, take back control of the dominant discourse. Where capitalism, whether “good” or “bad”, is defined by certain structures and institutions that cannot, even must not be transcended or interfered with for fear of undermining the system itself (once the central goal of socialists not so very long ago) terms such as a “democratic mixed economy” at least open the door to the possibility of transcending the flawed logic of capitalism and “the market economy” altogether.


Not only “capitalism”, which, it should be pointed out, is a term originally coined by critics of the system and which has only recently been embraced by its aficionados[2], but also the term “market economy” (whether social or not) is a conceptual prison. The Delors-era social-democratic slogan of “we want a market economy, not a market society” is reminiscent of a caricature of a man being devoured by a tiger and, whilst half-engulfed in the tiger’s maw, pleads with the creature to eat only his lower half and no more. A market economy, in the sense implied by liberal theory, cannot but lead to a market society[3]. A “mixed” economy however, at least conceptually, has the potential of being a society “with markets” without necessarily being dominated by them.


Just to frame this concept so it can emerge from the level of rhetoric to the level of a concrete example, economic history reveals a myriad of examples of economic systems which employed markets without being dominated by them and without exchange and commerce occupying the central place in economic life. Indeed, for much of human history, commerce has existed as one among many forms of economic activity and it is only in the modern age that it has acquired such a uniquely pervasive influence. Feudal economies, for example, were essentially war-driven economies based on the control of land and commerce remained a highly secondary pursuit. Merchants were tolerated and or encouraged as a means to an end and it wasn’t until the vast influx of wealth from the new world, from the 1500’s on, began to undermine the feudal power structure and grant the rising merchant class a significant degree of political influence that the road to modern capitalism was opened[4]. Likewise, in the Islamic Middle-East, trade was an important pursuit and markets held an important place in the life of the cities yet, even here, the dominant economic engine was the demands of a militarised state. There was no market economy to be found in the Middle-East, although very sophisticated markets played an important role in the urban economic order. No matter how important markets may have been to pre-modern economies, these were always merely one part, mostly a subordinate part, of the broader economic and political context.


As Polanyi points out[5], economic relations are always embedded in (and have been historically subject to) broader social and political contexts. Capitalism therefore, may be perceived as an attempt to dis-embed the economy and grant it a central, autonomous and superior role in the construction and maintenance of society. This is, however (according to Polanyi at least, and history is yet to prove him wrong) an unworkable fantasy. The idea of the self-regulating market is just as mythical and untenable as the idea of a fully-planned, efficient communist paradise. In reality, all economies embody a variety of co-existing production and distribution systems and most have varied property forms. Even the most “capitalistic” economies, such as the U.S., clearly demonstrate these variances. The state and large corporations are intertwined in ways that make a mockery of Smith’s “invisible hand”. Capitalism, in short, means “the rule of capital” and markets are merely a vehicle to be used when profitable and to be ignored whenever a liability[6].


This definition of capitalism permits the, otherwise absurd, position of advocating free markets against capitalism. This highly optimistic approach can be found in the works of David Korten[7]and the theory of mutualism associated with Pierre-Joseph Proudhon, together with various theories of “market socialism”. Indeed, there are a number of political approaches which separate the market as a mechanism from the rule of capital. Although this “socialist reading of Adam Smith” is perhaps naïve and overly rooted in a near extinct class of smallholder artisans, farmers and entrepreneurs, the idea of a separation of the market from the rule of capital, although problematic, is not totally unreasonable as the existence of socially-embedded market mechanisms long precede the emergence of the capitalist political economy. As has been mentioned above, the self-regulating market is an ideological fantasy and does not approach the reality of capitalism which is increasingly exercised through highly-organised, bureaucratic trans-national corporations that employ markets as a tool. The problem of “markets against capitalism” however, is that the competition inherent to a market system inevitably creates winners and losers and leads to an evolutionary dynamic that, in a very short period of time, undermines the basis of the market itself (which is the essence of Polanyi’s critique of free-market ideology). A market-centred economy, regardless of its ideological foundations, appears inevitably to tend to support the emergence of capitalism at some point (a process somewhat demonstrated by real-world attempts to implement “market socialism”[8]).


Capitalism therefore, defined as the “rule of capital”, is, in every sense, at odds with popular sovereignty. If social-democrats accept “decent capitalism” as a goal, they are essentially pleading for capital to be decent as they are not capable of advancing any meaningful counter-power, such as powerful, well-organised trade-unions or citizens’ alliances to ensure this. In fact, the “decent capitalism” of the post-war Keynesian era, that forms the basis for this vision, was “decent” precisely because capitalism was compromised and partly balanced by a rising wave of democratisation. This democratic revolution was, unfortunately, undermined by circumstances and partially abandoned in the late 1970’s, at which point the neo-liberal counter-revolution seized the initiative. After WWII, capitalism was forced into an open-ended compromise with democracy, from the 1980’s onwards it has been busy undoing the bonds imposed by that era.


Just as it is impossible to serve two masters, it is also impossible to simultaneously uphold the power of capital and the sovereignty of the people. The unsatisfactory compromise offered by liberalism is to separate the political from the economic, leaving the economy to the abstraction known as the market (in truth, organised corporate interests) whilst parliaments elected by the people handle what remains of the political. In short, according to the theory, the “market” will see to employment, prices, wages and the distribution of essential and non-essential goods and services, whilst “democracy” need content itself with rulings on issues such as the permissibility of gay marriage, the criminalisation of flag-burning, gun ownership, abortion or other details of the social, cultural and political milieu. In such an environment, politics becomes a matter of flavour and preference with cultural issues substituting for questions of class power, redistribution or the provision of social goods and services[9]. That social-democrats have allowed themselves to be led down this path is a sad indictment of the robustness of socialist thought and strategy in the current era.


As Thomas Meyer points out[10], economic issues, issues of public welfare and economic justice give democracy its substance. If the liberal celebration of “negative freedom” (i.e. “freedom from” as opposed to “positive freedom” being the “freedom to” act or access something[11]) leads to little more than the “freedom” to be unemployed, homeless, ignorant or uninsured, there is good reason for adopting a more balanced and sober attitude. There is no point speaking of “freedom” unless people have the basis on which to enjoy that freedom and this can only be assured politically, by means of an active, participatory democracy that embraces all areas of public life.


Thomas Meyer roots his approach to social-democracy in the U.N. Universal Declaration of Human Rights and there is some merit in referring to this document. The Declaration attempts not to align itself overtly with any particular political or economic theory or ideology although it is quite explicit in its advocacy of a political and social democracy entailing a raft of full social and political rights. Indeed, the resulting document proves, in its fundamentals, incompatible with either capitalism or communism (as practised in the Soviet Bloc or China) but highly compatible with either democratic socialism or social-liberalism and, indeed, it was on this terrain that the post-war Western European political order was established. The emergent order was a compromise between socialism and capitalism which, although capitalism was always the dominant force, arguably also contained the (historically unrealised) potential also to evolve in a more socialist direction.

It is worthwhile remembering that liberals such as Keynes, although by no means socialists, were also very much disenchanted with capitalism, although they grudgingly tolerated its continuation as the least-bad of the available alternatives. The aim of Keynesian demand-management was the general welfare and it saw capitalism as a tool, a means rather than an end. Keynes’ economics were, therefore open-ended and evolutionary and, arguably, contained the seeds equally of what could become either a democratic socialist or a social-liberal approach.


Although the benign capitalism of the “social market economy” may have resembled, in practice, the social-democratic ideal of a “democratic mixed economy” in truth the intentions were, and are, different. The social market may be “social” but the market is the indispensable, central mechanism of the economy, albeit modified where necessary by the need for a degree of social justice (again, to the degree that it does not “distort” the market mechanism). The “democratic mixed economy” however is an open-ended evolutionary project which stresses democracy as its primary feature. Its goal is not mere benevolent capitalism but a terrain on which new, emancipatory forms of property and production are able to evolve and emerge. It does not seek to overthrow capitalism in a frontal assault, nor necessarily to entirely eliminate market mechanisms from the economy, but rather to tame them, then subordinate them to the general good where possible. The difference, in brief, is that the “social market” is conceptually rooted in the market and therefore limited by the demands of the market whereas a “democratic mixed economy” is conceptually rooted in, and limited by, the demands of democracy and social justice. In the former, the limits of the social are determined by the market whereas, in the latter, the limits of the market are determined by the social.

Of course, in the real world, assuming the basis for a new compromise could be created, there would be a competition in politics between the visions of the “democratic economy” and the “social-market” which was, indeed, the ideological cleavage separating the Centre-Right and Centre-Left in the post-war Western European political economy. The democratic Left begins from the assumption that its own vision must be fought for amidst a plurality of competing visions and approaches. Any democratic political project must be open-ended and subject to both advances and reversals. It is a pity that the large sections of the Centre-Left abandoned its own vision before it had even achieved the bulk of its goals, although there is still a chance it will find its way back home.


At this point, it is perhaps appropriate to remember the approach of Eduard Bernstein for whom the “movement (was) everything, the end nothing”. The end, for modern socialists, is perhaps not “nothing”, in that it helps to have a landmark in the distance by which we can measure our progress, although, the nature of social-evolution is such that there usually is no identifiable end that can be discerned as one victory endlessly opens the path to new struggles. The goal of the Centre-Left therefore ought to be to ensure that the direction of evolution be towards greater freedom, equality and solidarity. Getting trapped in the historical cul-de-sacs of specific systems or institutional frameworks, whether it be “state-socialism” or “decent capitalism”, is the passport to extinction. Socialists need to imitate life itself and embrace constant evolution, but they must never forget the direction they wish to evolve in if they are to avoid the fate of the dinosaurs and dodos of the past. In time, terms such as “democratic mixed economy” are bound to pass their use-by date and develop into hidebound clichés as reality continues to extend its limits and social-democrats, if they are even continuing to call themselves by that name by then, will once again need to adapt or die, but always, hopefully, on the path to ever more democracy, ever more equality, liberty and fraternity.


[1] Lakoff and Westen’s work strongly parallel and even largely duplicate each other. The most comprehensive exposition of their approach can be found in:
Lakoff, George (2008): The Political Mind: why you can’t understand 21st-century politics with an 18th-century brain, Penguin, NY
Westen, Drew (2007): The Political Brain: the role of emotion in understanding the fate of the nation Public Affairs, NY
[2] Professor Fred Block points this out frequently in his work on capitalism and social-democracy and particularly compellingly in a Miwon lecture he delivered to Kyung-Hee University, Korea on September 26 2011, entitled; The Origins of the Current Crisis of Global Modernity
[3] Articulated most clearly by Karl Polanyi, especially in his magnum opus The Great Transformation. See
Polanyi Karl (2001 (1944) The Great Transformation, The Political and Economic Origins of Our Time, Boston,
Beacon Press
[4] These ideas are explored widely in Polanyi’s writings on economic history and can also be found in Eric Hobsbawm’s writing on the era as well as in a number of other sources. There is a wide range of literature dealing with the Islamic Middle-East however, among the best is probably the 3-volume investigation on the political-economy of the Ottoman Empire by Halil İnalcık and Donald Quataert., see
İnalcık H & Quataert D (1994) An Economic and Social History of the Ottoman Empire, CUP, Cambridge
[5] Polanyi Karl (1944) op.cit.
[6] This is also mentioned by Polanyi but also widely commented on by a very wide range of other sources positioned on all points of the political spectrum. It was even acknowledged by former U.S.president Dwight D. Eisenhower in his musings on the “military-industrial complex”.
[7] David Korten is a leading proponent of a non-capitalist market economy. Most of his work embraces the central contention that capitalism is actually not a market system and that a “true” market economy is the solution. In many respects, his work is reminiscent of classical Proudhonian mutualism.
[8] Examples of this may be cited as the collapse of Yugoslav market socialism as well as the rather makeshift “goulash socialism” of communist Hungary but also the feeble market reforms of perestroika or state-capitalism of China and Vietnam. It remains to be seen how the emerging reforms in Cuba are likely to take shape.
[9] For an enthusiastic embrace of this process, see Thomas Friedman’s The World is Flat
Friedman Thomas (2005) The World Is Flat: a brief history of the twenty-first century FSG NY
[10] Meyer, Thomas & Hinchman, Lewis (2005 (2007) The Theory Of Social Democracy Cambridge, Polity Press
[11] The distinction between “positive” and “negative” freedoms here are based on the categories introduced by Sir Isaiah Berlin in his famous essay Two Concepts of Liberty.