In the Wake of the Greek elections: Is there a way out of the Recessionary Spiral?

above: The Symbol of the Rising SYRIZA Left-Coaltion in Greece

In this article Tristan Ewins discusses the aftermath of today's Greek Election. Debate very welcome here - and at our Facebook page. See: http://www.facebook.com/groups/58243419565/

Tristan Ewins; June 18th 2012

There is some interesting analysis of the Egyptian and Greek elections over at radical-left blog 'En Passant'. Here at “ALP Socialist Left Forum” I would like to take a moment to consider the consequences of the election in Greece – and alternative ‘ways forward’ – out of the depressive spiral which is engulfing much of Europe.
(See: http://enpassant.com.au/2012/06/18/greece-and-egypt-a-tale-of-two-elections/ )

In Greece, specifically, the Conservative “New Democracy” Party is set to form government – but with only approximately 30 per cent of the total vote. As a consequence of the specifics of the Greek electoral system the largest single party receives a 50-seat boost. This makes it very likely that New Democracy will attempt to ally itself with the pro-austerity PASOK. (Pan-Hellenic Socialist Party)

Nonetheless PASOK has historically supported a more moderate approach to austerity: the consequence of which must mean that any new coalition government between New Democracy and PASOK will see bailout conditions re-negotiated to “slow the cuts [and] introduce more generous unemployment benefit.” (See:http://blogs.telegraph.co.uk/news/danielhannan/100165822/another-non-result-in-greece-how-much-longer-can-this-go-on/ )

But in any case - it would be ‘the same poison’ of recessionary austerity - even if a milder variety.

At ‘En Passant’ John Passant further reports that while “left-wing radical group SYRIZA came second with just under 27%”, PASOK received “a little over 12%.” Meanwhile, “the Democratic left, a moderate split from SYRIZA on just over 6% and the KKE, the Greek Communist Party [managed] about 4.5%.”

The fascist, so-called ‘Golden Dawn’ party was thankfully contained on just under 7% of the vote: but it is nonetheless a significant precedent and could bode ill for the future.

The division of the Left in Greece has therefore been crucial for the Conservative victory. Had SYRIZA maintained internal unity it clearly would have emerged as the largest party in the Greek parliament rather than ‘New Democracy’. While the Left broadly defined was a hair’s breadth from securing a majority of votes, the additional 50 seats that would have been delivered to SYRIZA in the event of maintained internal cohesion would have been enough to deliver a clear Left victory. The Greek Left needs to think upon this should continued instability create another opportunity for a Left majority in the near future.

According to one website, SYRIZA leader Alexis Tsipras “called Samaras to congratulate him but later rejected any notion of dealing with New Democracy or PASOK.” Tsipras stated:

“We shall be present in any developments from the position of the main opposition,” he said, stressing that that “everyone must know that the measures of austerity and the selling off of state property will not be able to move forward because they lack popular legitimacy.” http://greece.greekreporter.com/2012/06/17/final-exit-polls-show-new-democracy-leads-syriza-in-tight-race/

The refusal of SYRIZA to deal with PASOK leaves PASOK in a potentially fatal union with New Democracy. Without very substantial re-negotiation continued austerity in Greece will see ongoing unemployment, poverty and even homelessness. The privatisation agenda, meanwhile, is blatantly Ideological. By maintaining its distance from the austerity policies of a PASOK/New Democracy government, SYRIZA is likely to rise as the main beneficiary at the next Greek election; more decisively displacing a relatively marginal PASOK. This is exactly why PASOK is refusing to agree at this point to a coalition without the inclusion of a very reticent SYRIZA.

One online news source has reported that:

“The results should bring a sigh of relief to Greece’s lenders, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) who provided Greece with an initial bailout two years ago of $152 billion and approved a second in February for $173 billion more, but said it depended on Greece continuing with more reforms, including privatization and another $15 billion in cuts.”
http://greece.greekreporter.com/2012/06/17/final-exit-polls-show-new-democracy-leads-syriza-in-tight-race/

Rejecting the assumptions of this reporting, however, what is the answer for Greece?

As John Passant notes at En Passant:

“Unemployment Is running at over 22% and for the young it is approaching 50%. Growth fell last year by up to 7% and is predicted to fall again this year by around the same or slightly less.”

Firstly – as these figures demonstrate, a recessionary spiral is NOT the answer. Greece – as well as other affected countries such as Spain and Italy – need a plan for socially and economically sustainable debt repayment over the long term. Though this author does not claim to be an authority, it seems rational that if privately-financed bonds cannot provide Greece and other countries with fair repayment rates and schedules, then Europe as a whole needs to step in collectively at a public sector-financial level. As recognised above the IMF, European Union and European Central Bank are already providing a bailout. But this bailout has been offered under the wrong (ie: recessionary) terms.

Greece is currently caught between the toll of an eroding credit rating – with spiralling debt-repayment levels enforcing a macabre ‘discipline’ – and the real economic and human cost of austerity and enforced recession.

As an alternative, Greece’s effective credit rating needs to be fully restored in return for ‘locking into’ a European ‘economic contract’ aimed at restructuring the Greek economy, and repaying debts in the most efficient and sustainable manner possible – under conditions of full employment.

Only Europe-wide planning and co-ordination, now, can provide for such a process of restructure – mobilising the capital and the skills necessary to forge new and sustainable export markets – maximising that potential for debt-repayment under conditions of full employment. This applies as much for Spain and Italy as it does Greece.

The alternative is recessionary austerity: again with the consequence of homelessness, deskilling, poverty – in short, social and economic disintegration.

The SYRIZA anti-austerity platform can be found here and makes interesting reading:
(See: http://www.solidarity-us.org/site/node/3620 )

From 1929 until the dawn of the Second World War the world suffered a Depression the consequences of which radicalised a generation, and with the experience of war-time economies entrenched a Keynesian orthodoxy, providing the basis of the Post-war boom. With SYRIZA refusing to join a unity government the battle in Greece is far from over. Do we really have to learn all the old lessons over again – with the associated toll in human misery?

Debate Very Welcome!

Responding to the 2012-13 Federal Budget – Better Late than Never!

The following article by rank and file Labor activist and freelance writer, Tristan Ewins examines the highs and lows of the 2012-13 Labor Federal Budget; the ways in which Labor has delivered to its core constituency; and the ways in which it could have and should have done better.  He also considers the ways in which the performance of Tony Abbott continues to provoke fears for the future.

Interested parties are welcome to join our Facebook Group also at:  http://www.facebook.com/groups/102658893193637/

Tristan Ewins, May 24^th 2012

Recently at this blog we discussed what would be desirable for the 2012 Federal Budget.   A few weeks after we ask the question: Was this the ‘battler’s budget’ Swan and Gillard have claimed it to be?; and on the other hand – have there been missed opportunities?

Summarising the coverage in ‘The Age’ and elsewhere the following features were notable:

Firstly there was a threadbare surplus of $1.5 billion – with over $30 billion of savings – but nonetheless a surplus.  Whether a surplus was actually necessary or desirable at this point is open to question.  On the southeast coast there appears more of a need for stimulus rather than austerity.  Bringing forward infrastructure projects there would therefore seem advisable. Certainly achieving a surplus has loomed as a political imperative for Labor, and despite recent (and rare) questioning of this ‘imperative’ in the media, past coverage had consolidated the impression that consistent and continuous surpluses were equal to “sound economic management”.  Liberal claims that Labor had not delivered a surplus since 1989-90 were hurting in the wake of that past, basically uncritical media discourse.  On the other hand a balanced budget over the course of the economic cycle is desirable; with debt servicing weighed against growth, improved capacity and productivity stemming from social investments.

Some of the largest savings were made from Defence – “Cut by $5.5 billion over four years”.  Certainly this was preferable to savings in social programs and welfare; although a growing Australian nation holds the prospect of more self-reliance in Defence over the long term.  This also could mean the prospect of greater foreign policy autonomy.

The Government has also saved approximately $1 billion, cutting by half Superannuation tax concessions for income earners on over $300,000/year: which surely was welcome, but arguably did not go far enough.   

Indeed the Australia Institute has argued that the cost of superannuation concessions has blown out to about $30 billion a year; and Richard Denniss specifically has claimed that $10 billion of this goes to the top 5% of income earners. (!!!) This money could have provided a fair go for single parents; improved the shamefully regressive ‘Newstart’ unemployment allowance by $50/week, and radically improved the quality of Aged Care for those needing high intensity care; and those preferring low intensity care in a more social environment. It also could have been redirected into mental health services where the government has a record of “robbing Peter to pay Paul” rather than sufficiently expanding funding for all areas of real need.  Setting the ‘high income benchmark’ at $300,000/year is being far too generous for many who are on ridiculously high incomes: and yet single parents are singled out to be pushed on to the Newstart Allowance if they do not find work – with the welfare of their children cast into serious doubt.   The rationale is not to upset so-called ‘aspirationals’ – But arguably there is more to gain electorally by consistently and visibly assisting low to middle income groups.

(See: http://www.abc.net.au/news/2012-05-08/swan-scrapping-company-tax-cut/3998784 ;  http://www.tai.org.au/?q=node/277 ; and http://www.abc.net.au/pm/content/2012/s3499255.htm )

A key theme for Swan was ‘spreading the benefits of the boom’; and yet the mining tax was not expanded in scope or degree.  Previously the Greens had been on record claiming that the cost to the Budget bottom line, here, was in the vicinity of $100 billion over ten years.   This begs the question: What kind of social and infrastructure investments could have been gained through a revision of this policy?  And what kind of effective cross-subsidies could have been provided for manufacturing, retail, tourism, education – all sectors struggling in the wake of the high dollar driven by the mining boom?   (See: http://greens.org.au/content/mining-tax-needs-review-ensure-revenue-australias-future )

The projected cut in Company Tax has been deferred – but should have been shelved entirely.  By ‘trumping’ Abbott with a similar 1.5% levy on big business as planned with his own paid parental leave scheme,  Labor could redirect that money to further initiatives in Aged Care, mental health or further cost of living relief for low and middle income Australians.  This would ‘back Abbott into a corner’, making it hard for him to justify his priorities; and making it difficult for him to impose a further Company Tax levy on top of Labor’s levy. 

Money could also have been directed in future social finance and ownership of transport, energy and other infrastructure – with the savings from lower borrowing costs, productivity agreements with unions, and a non-profit footing – delivering very significant savings for consumers.

Meanwhile – though Foreign Aid is rising by $300 million, Labor’s promises to more radically increase aid have been reneged upon – at least for the time being.  This will save an approximate $2.9 billion annually. But the question nonetheless looms: with more far-reaching tax reform could Labor have avoided having to make such “Hard Choices” on Budget priorities?   (See: http://www.smh.com.au/opinion/blogs/the-party-line/should-a-promised-boost-to-the-foreign-aid-budget-be-deferred-for-a-year-to-help-return-the-budget-to-surplus-20120510-1yei6.html )

Other crucial policy areas included $1 billion over four years “to kickstart the National Disability Insurance Scheme (NDIS)” ; “$577 million over five years to help aged Australians remain at home” and additional payments “of up to $210 a year for unemployment and similar benefits.”  (‘The Age’, May 8 and 9 2012)  

Providing tangible results for the NDIS ahead of the next election could be crucial in establishing the credentials of the government as being based on more than just ‘talk and distant commitments’.  So bringing forward the NDIS as much as possible is a very welcome development.  Though as this author has also argued in the past: the proposed Aged Care reforms while welcome do not go nearly far enough to provide for the basic needs of some of our most vulnerable aged Australians.  More financial support is needed for Carers; and more funding is necessary for residental care for those who choose it – and those who require high level care and do not have a  choice.  Sustainable quotas are also necessary for aged care workers and nurses; and resources to improve quality of life for all kinds of aged Australians suffering social isolation, financial stress, difficulty with day-to-day living, and the indignities that come from an under-resourced, sometimes profit-driven and under-regulated residential care sector. 

Over at ‘The Conversation”, meanwhile, there has been the observation that the Federal Budget “includes $515.3 million dentistry package” with  “$345.9 million…used to treat patients on long waiting lists and providing other vital services to adults.”  See:  http://theconversation.edu.au/what-the-budget-means-for-dental-care-in-australia-6792    But the Greens were justifiably critical of Government plans to axe the Medicare Chronic Disease Dental Scheme,  and have argued for means-testing of the scheme instead. 

However the flagship programs of Labor’s 2012 Budget were definitely its Cost-of-Living initiatives.   The Labor website proudly proclaimed the following initiatives on May 8^th” aimed squarely at “low and middle income families”: 

• An expansion in FamilyTax Benefit A with an increase of the benefit to low and middle income families with two children to $600/year, and $300/year for families with a single child.

• A “Schoolkids Bonus” to help 1.3 million low and middle income families meet the costs of schooling: $410 for each primary school child, and $820/year for each child in high school.

• Support for “the most vulnerable Australians”; Cost of Living Assistance for a million Australians: “$210 a year for singles or $350 a year for couples”; with “lump sum payments will be paid twice yearly”

• “tax cuts will be delivered in 2015‑16 for all taxpayers with incomes up to $80,000” through an increase in the tax-free threshold”

In ‘The Age’ such new initatives were given a price tag of about $5 billion – So they are inarguably very significant!

The government also stood on its record of increasing pensions in past years, promising “a new Low Income Supplement of $300 per annum” for “Any low income households that do not receive enough assistance through tax cuts and increases to payments to cover their average expected price impact”. (presumably in reference to the Carbon Tax)   (See:  http://www.alp.org.au/federal-government/news/helping-households-with-the-cost-of-living/  )

Imaginably this could be the beginning of an ideological offensive by Labor on the issue of distributive justice.  For years now the monopoly mass media have reinforced the perception that redistribution equals ‘class war’; while attacks upon welfare and organised labour apparently do not!   Abbott and the monopoly mass media have directed salvo after salvo against the very principle of redistribution to correct injustices inherent in unregulated laissez faire capitalism.  Facing very little criticism or scrutiny in the media,  Abbott even begrudged the very basic social solidarity of the once-off flood tax – to assist those effected by the Queensland disasters. 

Meanwhile important social initiatives have been dismissed in the press with the loaded expression “cash splash” – the intent clearly being to infer economic irresponsibility in a blatant piece of popular-psychological manipulation.

Yet as against this cyncial and socially damaging political tactic this author remembers very clearly former PM John Howard supporting the principle of progressive taxation some time before being defeated by Kevin Rudd in 2007.

And a very different Tony Abbott seemed to emerge from the Opposition Leader’s book ‘Battlelines’.   The following observation was made at the ‘Left Focus’ blog in 2010:

Interestingly, Abbott raises the opposition between compassionate conservatism and the kind of ruthless neo-liberalism that cares nothing for the social consequences of austerity (pp.xii-xiii). Here the author juxtaposes the “[single-minded] cutting [of] public expenditure … striving to deliver smaller government” to “compassionate conservatism, stressing solidarity with those who are doing it tough” (pp.xii-xiii). By this reckoning the “social fabric … has to be respected and preserved”, while individuals should enjoy such circumstances that they are “empowered, as far as reasonably possible, to live the life that he or she thinks best” (p.xii).  (references from ‘Battlelines’ by Tony Abbott) 

(see:http://leftfocus.blogspot.com.au/2010/04/battlelines-whats-tony-abbott-really.html )

The Conservatives need to decide whether to pursue a mix of economic conservatism and political liberalism; or whether to adopt a ruthless neo-liberalism which cares little for the poor and disadvantged; and for the political and civil liberties of citizens.  It is important to observe, also, that ‘economic conservatism’ need not imply economic liberalism, but rather could accept Keynesian assumptions (in past accepted by Liberal governments) on the mixed economy and counter-cyclical demand management.  Yet Joe Hockey seemed to be quite clear recently on QandA that he cared little for the traditional Australian spirit of egalitarianism.

But for Labor stronger action is necessary to place class faultlines and class interests in clearer relief.  The principle of class struggle is seen by many as being discredited even on the Left – which has reverted to a kind of modest social liberalism. But when we speak of class interests and class struggle this need not imply terroristic Stalinism; or to begrudge citizens their human and civil rights on the basis of class.  Rather the purpose of democracy is at least in part to set free oppositions of interest and provide a framework for their peaceful resolution.  Or where this does not work, to contain conflict to forms of civil disobedience which do not descend into an escalating cycle of violence. 

It warrants the question:  What problem does Tony Abbott and the Liberal Party have with workers and disadvantaged groups organising industrially and politically to pursue their legitimate interests; Indeed – to pursue justice, compassion, and  ‘the fair go’?  

And if he desires an agreed class peace, how does Abbott suppose this is possible on the basis of ruthless neo-liberalism – as opposed to the kind of Centrist Catholic Social Welfarism (or a ‘Social Market’ such as exisited under the Christian Democrats in post-war Germany) this author had hoped (but not dared to believe) he may have been open to? * 

Further, if redistributive policies are nothing but a ‘bribe’ (as according to Abbott) what are we to make of the ‘upper middle class welfare’ of the Howard years: and of Abbott’s own paid parental leave which offers leave with full pay to workers on as much as $150,000/year?  (See: http://www.news.com.au/money/cost-of-living/paid-parental-leave-scheme-stays-abbott/story-fnagkbpv-1226286894077 )

For Abbott, though, this is ‘non-negotiable’ as the polls consitently inform him he ‘has as problem with women’…

Conclusion

Having to achieve more but with less can drive efficiency – so there is some benefit in a government operating under tight fiscal circumstances.  Indeed, a comrade in the Socialist Left of the ALP recently commented to me that rather than spending billions more in areas like Aged Care that we could achieve more ‘electoral kudos’ (my term) with well targeted and innovative initiatives.

But sometimes there is no getting around the need for an injection of greater resources.  Much of this year’s Federal Budget was just reprioritisation – with little new money. Again: In accepting this framework Labor will repeatedly find itself in the position of ‘having to rob Peter to pay Paul’.  In public education, aged care, mental health, welfare, public housing, disability support and services, and crucial transport and other infrastructure: ‘trying to do more with less’ can only take you so far.  For instance: the Gonski recommendations for Education simply cannot be implemented without billions in new funding; nor can a sustained introduction of Medicare Dental.

By comparison – moving initially from 100% to 75% Dividend Imputation, further cutting superannuation concessions for the wealthy top 5% of income earners, reforming the Mining Tax, and applying an ‘Abbott-esque’ levy on business via Company Tax – along with other reforms – could have grown social expdeniture by 1.5% of GDP – or approximately $22 billion in new and improved initiatives.

And yet with $5 billion of largely redistributive, social-justice, Cost-of-Living oriented policies - this is arguably a traditional Labor Budget.  It puts many of Labor’s core low to middle income constituencies first in way we haven’t seen so much in quite some time.  

Now, though, Labor needs to turn the to source of the Cost-of-Living crisis.  Firstly, this must include implementation of the Gonski recommendations – so low and middle income families can feel secure sending their children to State and poorer Independent schools – at peace in the knowledge they will not be disadvantaged, and that there is no need to ‘go beyond their means’ in providing a private school education.   And reversing privatisation, and promoting public housing and infrastructure for emerging new suburbs also need to find themeselves to Labor’s ‘policy radar’ with policies that attack Cost-of-Living pressures at their very root. 

(*though for the record this author supports an outlook of sustained class struggle; even though it is notable that the kind of semi-corporatist structures such as have existed in Sweden provided channels of mediation of interest to citizens across class lines)

For a Budget both Sustainable and Fair

Above:  Wayne Swan is under political pressure to produce a surplus for May 8th. But to re-engage with voters Labor needs to do a lot more; delivering truly meaningful and substantial social programs that appeal both to Labor's working class and liberal middle class electoral bases. This needs to be provided for through a progressive tax restructure including reform of superannuation tax concessions, dividend imputation and consideration of further 'super profits' taxes where appropriate.

By Tristan Ewins

As the May 8^th 2012 Federal Budget approaches top Labor policy-makers will be nervous. While there is enormous political pressure to deliver a surplus only very substantial progressive new initiatives hold the prospect of re-engaging with Labor's traditional working class and liberal middle class support bases. 'Treading water' on policy simply will not do at this point. So many voters are 'disengaged' after years now of systemic smears and disinformation in the media. Very substantial new programs are the only chance, now, of breaking through: at the very least saving the Senate, and leaving behind a reform legacy that Abbott will not be able to uproot.

But what specific programs could Labor embrace in order to re-engage with voters; perhaps even to win in 2013?

Immediately there are a number of options which spring to mind:

• Medicare Dental
• Gonski recommendations on education
• Further funding to improve the quality and equity of Aged Care; with a long-term official policy of establishing universal Aged Care Social Insurance
• Robust Cost of Living initiatives for disadvantaged and working class Australians, including pensioners and Newstart recipients
• Substantial investment in public housing to assist those low income families and individuals experiencing housing stress; with the additional benefit of increasing housing supply, driving down rent costs
• Targeted tax-driven cross-subsidies for sectors struggling under the weight of the 'two speed economy'; to include tourism, education and manufacturing;
• Fast rail and other infrastructure projects (eg: infrastructure for emerging suburbs) expedited along the East Coast, with the additional benefit of stimulus in states which are economically struggling.

It is difficult to estimate how much would be necessary in way of funding for industry cross-subsidies. Although a fast-rail line along the Australian East Coast – costing $100 billion - could "dramatically cut emissions" and provide great convenience for travellers, and those utilising rail freight.

Such infrastructure initiatives could be financed via the issuing of government bonds, which could spread debt repayments over decades, with competitive annual repayment rates.

Development of infrastructure in new suburbs is also crucial on practical, environmental and equity grounds: and could create jobs along the economically languishing South-East Coast. Urban design, including public transport, parklands and other social facilities are crucial for the quality of lives of those young families who have been driven by the Howard housing bubble and population growth onto the 'urban fringe'.

And while Cost-of-Living subsidies should aim to deliver a minimum of an additional 1 per cent of Male Average Weekly Earnings (approximately $600/year for individual adults) to assist mainstream working class and disadvantaged families with energy, water, mortgages and rent, this author does not have access to modelling to determine the cost.

Yet 'Cost of Living' is THE issue 'out there' with Australian families, including those working class and disadvantaged families it is Labor's duty to protect and assist. A big initiative, here: as significant or more significant than already suggested – could be THE crucial factor in re-engaging with Australian voters.

Labor also stands to gain, here, by linking Carbon Tax relief with broader Cost-of-Living Relief. In such a way Labor needs to develop a package in which all disadvantaged and mainstream working class Australians are significantly better off. By linking these issues Labor has a chance of changing public perceptions of the Carbon Tax, while addressing genuine Cost of Living stresses for those in need.

And tax cuts would be quickly forgotten, so Cost of Living Relief will be better addressed through a dedicated supplement, to be paid twice-yearly.

Public construction of new energy and water infrastructure could also have savings flowing on to consumers because of the lower cost of public borrowing.

Nonetheless, despite our lack of access to modelling in some areas it can be stated that were the government to reform taxation so as to bring in around an additional 1.5 per cent of GDP in taxation (approximately $22 billion out of a $1.5 trillion economy), this would provide substantial scope for the social welfare and industry assistance packages hinted at here, while also providing for the politically-desirable surplus.

Potential fund-raising mechanisms could include a move to either 75% or 50% Dividend Imputation (saving between $5 billion and $10 billion/year); eliminating superannuation concessions for the wealthy (saving approximately $10 billion/year); restructuring of income tax, reversion to the original Resource Super Profits Tax template, consideration of other 'super profits' taxes where appropriate, and reneging on projected Company Tax cuts.

There is even the prospect of emulating Abbott in terms ofa 1% increase in Company Tax for large enterprises, ploughing the proceeds into Aged Care. Given his own position on Paid Parental Leave and his eagerness to appeal to aged Australia Abbott would be hard-pressed to oppose such an initiative. It is worth noting that Company Tax in Australia is 30% as compared with 35% in some areas of the United States – so there is 'room to move'.

For now, though, it is also worth observing those initiatives for which we do have costings.

Implementing the Gonski recommendations for education could ultimately cost an estimated $5 billion/year. Although the Gonski report itself suggests the Federal Government would only have to pay for 30% of the Education initiative ($1.5 billion) – with $3.5 billion shouldered by the States.

Detractors have attempted to conceal their own vested interests with calls of 'class warfare', but the reality is that 'class warfare' has been waged not against the wealthy, but against poor and mainstream working class Australia with the neglect of public education and health care, and increasing dependence on levies for essential school infrastructure which are 'voluntary' in name only. The appeal of Gonski is in its emphasis on all students, including those most struggling – with a further emphasis on improving state school funding, but without withdrawing existing funding from the private sector. Implementation of Gonski would mean improved infrastructure, smaller classes, more teachers and more subject choice for all schools.

Meanwhile projected public dental initiatives have variously been estimated to (ultimately) involve costs running into the billions annually. Apart from crucial equity and human interest ramifications of universal public dental care, preventative public dental care could save the economy billions over the long term. Though according to the proposal put to Labor by the Greens the first phase of new public dental programs– focusing on the needs of children and low-income groups - need only cost the government $400 million for the upcoming financial year, and as much as "$8.4bn to $14.4bn across four years, depending on the options chosen".

The final expenditure priority we will consider, here, is Aged Care.

The Federal Government's standing Aged Care policy provides a real funding boost of only $577 million over 5 years.

Much more is needed,yet nonetheless by shifting its priorities and implementing means tests an improvement in service will be experienced by many.

While $1.2 billion has been devoted to providing better salaries and conditions with the aim of retaining aged care staff, user-pays mechanisms will not include any forced sale of the family home. User pays charges will apply for many – both for residential and at-home care. But full pensioners will pay no fees.

There will be 40,000 new home care places (Up to 100,000), relieving the impact upon the Aged Care budget of expensive residential care, while providing many aged Australians with the preferred option of staying at home. Further initiatives include $269.4 m for dementia, $1 billion for Carers' Respite (over several years) and the removal of the low care/high care distinction - which in the past saw aged Australians diverted into high intensity care facilities prematurely in order to save money. The 'My Aged Care website' is another good initiative, and the government has wisely avoided a 'free market in Aged Care'. Many amongst the aged are vulnerable and on their own enjoy little consumer choice or market power. ('The Age', 21/4/2012)

Yet again the initiatives go nowhere near far enough.

The Combined Pensioners and Superannuant's Association New South Wales (CPSA – NSW) has long argued for a Aged Care 'social insurance' model. While CPSA NSW is encouraged by the government's emphasis on at-home care, however, those most in need do not always have the choice. Billions in new funding are necessary to improve the quality of residential care, and to give the aged the choice of high quality low-intensity care in a social environment. (eg: hostels) Staff to resident and nurse to resident ratios are also crucial that those needing high intensity care.

And even for those remaining at home more programs are necessary to keep aged Australians socially engaged, and happy.

The problem with Aged Care is that for many it remains a 'hidden issue'. Aged Australians are suffering – for lack of care; because of poverty; because of social disengagement; and because of the dehumanisation and loss of individual identity that often goes with high-care accomodation.

As an absolute minimum Labor needs to devote an additional $1 billion for Aged Care in the financial year 2012-13; and announce a progressively-structured Aged Care Social Insurance Scheme over the long term – similar to the agreed 'National Disability Insurance Scheme' (NDIS). (covering care, but not pension entitlements) Specifially this author challenges Government Minister Bill Shorten to champion this cause – no less worthy as it is – as he championed the cause of disability insurance.

'The Surplus'

There are sound political arguments for Labor's pursuit of a surplus in the year 2012-13. The level of economic debate in Australia is for the most part quite low. The perspective on the Federal Budget is akin to peoples' ideas on managing a family budget. Hence apparently 'The books must be balanced'. But failure to produce a surplus will result in opportunist media-grabs by the Opposition – which irresponsibly maintains popular mythologies on economic management in order to hold on to political advantage re: perceived competency.

Deeper arguments and realities do not always 'sink in'. Media speculation about the political imperative of a surplus is usually shallow and uncritical. Many voters do not seem to comprehend that investment in infrastructure can increase capacity, improving quality of life and increasing growth over the long term. And there are those who do not seem to see how stimulus is still warranted in many state economies as a consequence of the high dollar, and with falling confidence alongside the decline of tourism, education and manufacturing. Nor how lack of transport infrastructure in developing suburbs is a drag upon the broader economy – making investment there not only sustainable, but of positive benefit.

On the other hand Jessica Irving from the Sydney Morning Herald predicts that after already-projected cuts Swan will needto "raise taxes by $7 billion to achieve his surplus." And also that: "Tax increases on foreigners earning profits in Australia, say mining companies, would also have less of an impact on domestic demand, as would reduced spending on foreign-produced defence equipment."

Were the revenue proposals in this article adopted, alongside other measures suggested by Irving such as increased taxation of foreign profits in mining, that could still leave $15 billion for social programs, while the surplus was achieved.

But regardless of the perceived political imperative of a surplus for 2012-13 Labor still needs truly substantial policy initiatives if it is to re-engage with voters who have 'switched off' or 'turned away' after almost two years of sustained media onslaught. This can only be achieved with a commitment of resources which is truly substantial and appreciable in the 'big picture' of an economy valued at over $1.5 trillion.

Yet if Labor does produce such initiatives it might also manage to rally its own base, as well as the sympathetic social movements which could provide for social base for a real fight-back; and perhaps even a Labor victory in 2013.


Tristan Ewins is a freelance writer, qualified teacher and social commentator based in Melbourne, Australia. He is also a long-time member of the Socialist Left of the Australian Labor Party (ALP).

Talking about Aged Care in the ALP and the Greens

The following article by Tristan Ewins examines the huge deficit of Aged Care services in Australia; and the need for progressive tax reform to fund a radical improvement in the sector.  The author regrets that Aged Care did not seem to have been prioritised by the Greens in a recent survey: but is hoping this will change with a shift of policy by botht the ALP and the Greens.

by Tristan Ewins

 The Greens are to be applauded for their recent web-video putting the case for a reformed Mining Tax to fund social welfare and services, and to invest for the future.

See: http://greensmps.org.au/mining-tax

But while the Greens provided a survey asking people which areas they think the money from such reform ($100 billion) should be spent, they did not include Aged Care.  I was upset at this for a number of reasons – all related to the urgent need for reform in that area.

Firstly:  We have an ageing population.  Even to maintain current quality of service will require greatly increased funding.

Secondly: Staff including nurses are underpaid, and there are inadequate ratios. This impacts upon residents’ quality of life – as staff need to turn residents in their beds to avoid bedsores; check to ensure residents are eating their meals; facilitate exchange and communications between residents to ensure they remain socially engaged… Not having enough nurses and staff to check that residents eat their meals can result in starvation and literally a physical 'withering away' so that those concerned cannot even stand up or walk.

Thirdly:  The current funding mechanism is grossly unfair: requiring families to sell or take equity out against their homes operates like a regressive tax.  Yet levying more proportionately from the wealthy and the upper middle class is considered ‘taboo’ and referred to as ‘class war’.

Finally:  There are broader questions of quality of life for these most vulnerable Australians that barely register in our public discourse.  Provision of gardens could provide an escape and a diversity of scenery that in its way could radically improve quality of life.  Private rooms could help maintain a sense of dignity, private space and connection with past and one’s identity which could also radically improve quality of life. In the future information technology could be crucial in keeping residents socially and intellectually engaged.

Furthermore where possible residents should be taken on outings to create diversity and quality of life.  And those aged Australians who would be better suited to lower intensity care – eg: hostels – should not be forced prematurely into high intensity care in order to ‘save a buck’.

By the same principle there must be greater assistance for aged Australians to remain living in their homes – if that is what they choose; and for family/carers’ to provide the necessary support without having to make too great a sacrifice.

When the shortfalls are considered: service quality, the funding mechanism, the wages and conditions of staff – and the ageing population is also taken into account – a figure of an additional $3.5 billion/year to be invested in the system   - is not unreasonable at this point, with 'more in the pipeline' for the future.  Though this should be in the context of a funding mechanism which operates like a progressive tax – and enables investment in the quality of life for vulnerable families, and working class families who deserve better after spending a lifetime paying their taxes.   A more robust mining tax could pay for such Aged Care reform.

 My hope is that the Greens and the ALP will respond to this issue and run with it as we approach the next election.   But the Coalition often takes the votes of many aged Australians for granted.  They should also be pressed to ‘put their money where their mouths are’ when it comes to Aged Care.  The bottom line is that this is a matter of basic human rights – and of the acute suffering of our most vulnerable spending their final years in circumstances of public neglect, dehumanisation and despair.

 If any of you reading this are Greens/ALP members I urge you to take this issue up in your branches and via your parliamentarians.  For the Greens especially – their survey should have included reference to this most critical of issues.  Here at ALP Socialist Left Forum I think we would all appreciate an official response.

And if by some miracle there are Conservatives reading this – I ask them to look within their hearts – to their basic underlying humanity – To confront the suffering and neglect experienced by our most vulnerable aged – and to DO SOMETHING.  

In place of tax cuts instead commit funds for aged Australia.

Tristan Ewins

Around March 16 2012 Daniel Pocock at Facebook argued against using MRRT money this way:

“I definitely think the bias should be on construction of long-lasting public infrastructure. That will create jobs, more taxes, and the taxes on salaries should fund the welfare state. I think it is actually dangerous to use taxes from non-renewable resources (like mining) to fund ongoing expenditures (like welfare).”

To which I respond here:

 I appreciate that the MRRT money isn’t going to last at current levels forever.  Hence I can understand Daniel’s concern about being ‘structurally locked in’ to funding Aged Care or other social wage measures via the MRRT.

 On the other hand BOTH investment in infastructure AND welfare measures are necessary - and using the MRRT money could be part of that picture - using MRRT money to 'free up' *other* money for Aged Care.

MRRT money could also be put in a Sovereign Wealth Fund with the profits from that being directed - sustainably - into Aged Care and other services as well.  The point, here, is that Sovereign Wealth Fund investments could provide a source for social wage expenditure for decades into the future.  But since then that fund would be slow to build up it begs the question where the money would come from for Aged Care now. 

That means there would have to be tax reform elsewhere.  I support such an agenda 100% - raising in the vincinity of $20 billion new money a year for programs like Gonski, the National Disability Insurance Scheme, Aged Care and welfare reform.  The question is whether Labor and the government can be convinced of the need for such a far reaching agenda. 

Arguably Labor is now in the position where only a radical policy shift – only a radical ‘delivering of the goods’ – can shift voters’ perceptions and voting intentions.  Radical reform of Aged Care could be part of this ‘big picture’ policy agenda which could turn the tide for Labor again by re-engaging with working class Australia.

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.”

Luke Whitington on Equality as a Labor value

above: Grassroots ALP Left Activist, Luke Whitington

The following is an article submitted by left-wing ALP blogger Luke Whitington on what he sees as the abandonment of ideology in the Labor Party.  Luke believes that attempts to distance the ALP and the Left specifically from socialism in the wake of the collapse of Communism in Europe has left the Party and the Left without an 'ideological point of reference.'   Luke is a grassroots ALP member and at this blog we are trying to encourage inclusive and constructive debate on policy, strategy and ideology on the ALP Left.

We encourage debate on these matters here at the blog, and at our Facebook page.  PLS feel welcome to join our Facebook group if you are an ALP Left member or supporter.

see: http://www.facebook.com/groups/102658893193637/

You don’t hear much about equality as a policy aim these days.

You might hear ‘equity’ or ‘social justice’. The PM talks about equality of opportunity.

But I am interested in good old fashioned equality. “Egalite” as the French say.

‘Australian egalitarianism’, the thing that allegedly sets us apart from our European forebears (those of us that have them), and also our Asian neighbours and American cousins. Only the kiwis, our closest siblings, have the same professed national culture of equality, notwithstanding the many cultures that celebrate equality. We seem to have made it a reality more than most societies, yet we are still very unequal, and getting more so every year, as the rich get richer faster than the poor, who are generally just staying poor, if not getting poorer.

I’m interested in equality for many reasons, but essentially it’s just an instinct for me. I chafe at outward manifestations of rank and hierarchy, and I see unquestioned hierarchies of wealth and privilege as the source of so much pain and suffering in our world. My large family taught me about equality of shares, and the importance of the strong being fair and kind to the weak. My schooling was imbued with these values as well, especially at my infants years at Hornsby Heights PS.

I am an inveterate egalitarian. So the works of Hemingway and Orwell which I discovered in high school, my study of ancient Athens and Rome, the twentieth century and of Australian history, my study of historiography, especially Marxist, post-colonial and transnational history has all reinforced my strong belief in the desirability of equality, and the evil consequences of hierarchies.

It has also given me a perspective on what I describe as self-replicating, self-perpetuating hierarchical systems, such as capitalism, nationalism, liberalism and patriarchy.
My political mission, as I see it, in one respect, is to disrupt the accumulation of power in to the hands of fewer and fewer individuals through these self-replicating, expanding systems of control. Einstein wasn’t kidding when he said the most powerful force in the universe was compound interest. The ability of money to attract money, as as social system, agreed to by so many, either willingly or unwillingly, shapes everything we do, and that system keeps expanding, into the farthest reaches of the world. Either for good or ill, it expands, and those with money already continue to accumulate it.
If you want equality you must confront this fact.

So how does that play out in terms of public policy, especially at a provincial level, in NSW State politics?

Well I believe the first thing we need to do is recognise the problem.

Since the end of the Cold War, people in the Labor Party have essentially subscribed to the Fukuyama ‘end of history’ view, helped by Graham Freudenberg’s history of the NSW Branch of the ALP, which deliberately sought to distance Labor from the communist project in order that Labor would in no way go down with that sinking ship. It has left the ALP, including the Left, an ideology free zone. And this has meant there has been no intellectual comeback to the moves to privatise, cut, outsource, eliminate debt, build through public-private partnerships, ‘rationalise’ and corporatise government departments and instrumentalities, ‘monetise’ education services, health services, wildlife and parks services, generally run the State as much like a capitalist enterprise as possible, in the name of efficiency.

The unwitting consequence is of course that all the human relationships, and our relationship with the land and air and water becomes one of exploitation and hierarchy. Everyone gets used to thinking in terms of structures and titles. That guy is a manager. The other is a worker. She’s on this much and I’m on this much because she is higher up, she earns more money for the enterprise. This land is owned by this state or private owned corporation, and therefore is blocked to you, unless you have our permission. These are all socially constructed, highly contingent relationships, which rely on mental architecture that is ‘naturalised’ in a capitalist, nationalist, liberal system. But there is nothing ‘natural’ about any of it. From a sociological point of view, it is robust because the systems are self replicating. But, as we’ve seen in Greece, Rome, Iceland and elsewhere, when people stop believing that they’re part of an imagined community with rules about ownership and control and proper social behaviour, the whole system can collapse in an afternoon.

If we can understand that power is centrifugal then we can start to implement policies that redistribute power, and stop pursuing policies that help the small numbers of men accumulate a lot of it. We can recognise that despite it being regarded as a natural condition of life and society, capitalist property relations, and nationalist political relations are contingent and historical, liable, like all historically contingent and socially constructed structures, to sudden death or slow decay. So, if we wish to perpetuate our society and our culture, and protect our natural resources and our physical bodies, we must act collectively to control and master the impersonal but impressive systems that dictate so much of what we do. Instead of living ‘under’ capitalism, or ‘under’ a Government, let us live ‘over’ capitalism and ‘over’ our Governments. Let our governments be an expression of democratic control over our systems of wealth creation and trade. And if necessary, let our culture and our society be an expression of democratic control over our governments! Because, for many of our citizens, ‘Government’ has not represented anything helpful or useful to their lives, and in fact has been a threat and a danger to their health and wellbeing.


Luke Whitington is an ALP Left grassroots activist and blogger based in New South Wales.

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)   

To join or examine our Facebook group See: http://www.facebook.com/groups/102658893193637/

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.