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Sunday, June 30, 2013

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

 

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

by Geoff Drechsler

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


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


Prosperity without Security


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

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

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


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


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


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


Alternatives


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


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


Geoff Drechsler is a Labor Party and trade union activist.


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

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

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

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

 
Paul Krugman “The Big Fail" - NY Times 6.1.2013
 
Austerity kills, economists warn
http://www.guardian.co.uk/business/economics-blog/2013/apr/29/austerity-kills-health-europe-us


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6 comments:

  1. I want to endorse Geoff Drechsler's comment:

    "A viable democratic socialist economic model would be characterised by a mixed economy characterised by a leading role for different forms of social ownership, a proactive role for government and democratic planning, alongside market forces and a viable private sector, introduced incrementally as a consequence of electoral endorsements."

    This has to be distinguished from the pseudo-Keynesian based version of mixed economy that is nothing but private corporate capitalism "mixed" with public funded welfare and services.

    A democratic socialist model excludes any private accumulation of capital but does not exclude the accumulation of self-earned private property or savings.

    Unless we know specifically what is being "mixed", usage of this term comes close to weasel-wording.

    Electoralism also needs to be specified. There is no need for the whole transformation of a political economy to be authenticated by electoralism. This only applies when the quality of electoral processes are high enough. Also, electoralism can lead to overindulgence in parliamentarianism which can disintegrate in a two-party circus driven by backroom deals aka Eddie Obeid and excessive influences through capitalist media and lobbying outfits. Democratic socialism can not arise, or survive permanently, on this basis.

    Electoralism combined with social movements and trade unions is preferable. It is a pity that the current Federal ALP under KRudd appears fated to distance itself from this base.

    The add for Australian Socialist is not part of the Drechsler post.

    ReplyDelete
  2. Hear hear! Well-written and well argued. I have to say though, people thinking along our lines are beginning to come together. We need this thinking in Australia but also everywhere else. The Party of European Socialists (the "Europarty" representing Europe's socialist, social-democratic and labour parties)is starting to get its head together for a new political-economy in Europe. If you're interested, you can find a short article I wrote on the recent PES council in Bulgaria at the Social Europe Journal (www.social-europe.eu).
    Better days are coming comrades! What seems utopian today (but was modest radicalism 30 years ago) will be the standard for tomorrow. Keep the red flag flying and keep struggling, the days of the democratic left are coming!

    ReplyDelete
  3. Chris; A good thing, though, that it appears we may have a genuine reform of the NSW branch of the ALP on its way...

    Re: 'democratic mixed economy' - I think you're right that the Left needs to go beyond traditional Keynesiansm. Though reverting to a more 'traditional' mixed economy could be a 'first step'.

    If we went back to a state-owned savings bank; maintained public finance of infrastructure at a time when there are great pressures for privatisation; entrenched the NBN as a natural public monopoly - all this would be very good.

    Though into the future it would be desirable to extend into some kind of 'co-operative incentive scheme' - with tax breaks, discounted finance, and advnice for co-ops provided by a government agency... The movement is not strong enough to take that to a conclusion. But if the government provided a significant by limited stream of funds it would be a great starting point. The question is how much could the government afford; what kind of resistance would we get from the private sector; and what kind of policy mix would retain or improve competition in a market enhanced by a very signficant co-operatie element....

    After areas for reversion to public control could be areas of former natural monopoly on infrastructure (eg: airports); and areas where government business enterprises enhance competition (eg: insurance). Also there are areas which properly sould transcend capitalist market forms - eg: pure scientific research,co-operative international medical research etc.

    Where else could we take socialisation - and under which forms - and HOW? That's a good question and it would be great to have some debate on that theme....

    ReplyDelete
  4. Shayne;

    I agree that further policising the EU could create important opportunities for socialists. Sorry to see one respondent trashing your article in response. What's your response?

    I hope you're right thay Europeanisation takes social democracy forward rather than burying it.

    You argue poorly managed crises lead to extremism. Left-social democratic parties could also find themselves bypassed if they don't adopt policies radical enough given the times as well. With over 50% youth unemployment in parts of Spain, for instance, how radical do our policies have to be? And to what extent should we seize the opportunity to revive radical social democracy in the tradition of the earlier Second International? (eg: Austro-Marxism)

    ReplyDelete
  5. Yes, one respondent to my article at SEJ took major exception to my defence of the Bulgarian Socialist Party. I got this from a few people I talked to in Bulgaria and I can see their point to some extent- the BSP is, indeed, a post-communist party but one of the reasons Sergei Stanishev was voted in as leader of the Party of European Socialists is that he has a fairly consistent record of trying to reform and clean up his own party.
    I compare the BSP to the CHP in Turkey. The CHP was founded by Atatürk and it really had nothing to do with socialism at the start but, since the 1970's it has become more and more identified with the Left. A lot of people still see it as the party of the Kemalist military and bureaucracy but it is changing and evolving. I believe the same is true of the BSP and the MSZP in Hungary as well. Yes, these are post-communist parties harboring many dinosaurs out to preserve their power and privilege but they are also vehicles for a new generation of socialists born either at the end of the old regime or completely after it. These parties are, themselves, the loci of major struggle.
    As for the question of how radical we need to be. I'd say we need to get pretty radical but we also need to stay feasible. Especially in Europe, people are cautious of populism and populist parties tend to be protest parties. I would say Austro-Marxism is actually a very good model of feasible socialism in that it focused on delivering tangible results and building transformational alternatives to capitalism on the local level. It was radical but also evolutionary and pragmatic-but-principled. In fact, I would argue our path forward demands a much keener study of these quiet successes and forgotten near-successes from our own history.
    We are entering radical times, like it or not, and timidity will win us no battles. We need to be radical but in a way that is organically connected to popular needs and demands- not an easy task but feasible if the will and commitment is there.

    ReplyDelete
  6. Solid economic reform will eventually lead to job creation. This might be the solution to end or somehow lessen unemployment.

    ReplyDelete

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