Socialism as Regulation: Is it Enough? A Response to Adam Ford

 

 

Above: An image of Nils Karleby:  Adam Ford's account of 'Socialism as Regulation' has some things in common with the thinking of this important Swedish Social Democrat

Dr Tristan Ewins

 

Veteran Australian Labor Party activist and blogger Adam Ford has put forward a critique of socialist metanarratives insofar as they retain a commitment to what I would personally define as a ‘democratic mixed economy’.  Specifically, by this I infer a mixed economy including a very robust public sector, but also a broader ‘democratic sector’ including various co-operative models, as well as co-determination, democratic collective capital mobilisation and so on.   Partly in response to my own consideration of the substance of modern socialism, instead Adam Ford proposes a reformed socialist project; one which breaks away from prior emphases on Marx, and prior emphases on public ownership.  Ford reserves the right to define socialism however he chooses, and not necessarily follow in the footsteps of Marx, or anyone else really.  Though in a Bernsteinian fashion (ie: after Eduard Bernstein)  he argues that socialism is a premise from which we depart rather than an ‘end destination’.  

Specifically at his blog 'The Bloodied Wombat' he argues:

“The light on the hill is as a beacon, not a point of arrival. It guides us forward, rather than telling us where to stop.”  

So in its emerging incarnation Adam sees the concrete form of modern socialism as comprising the quite vigorous and indeed aggressive regulation of capitalism.   Though he is not very specific in detailing what form this regulation would take.  Nonetheless, perhaps he has something in common with the Swedish theorist Nils Karleby  - who saw regulation like a peeling away of an onion – where the prerogatives of capital were progressively removed ‘until nothing is left’.  For example: I would speculate that this could take the form of legislated provisions for co-determination, or industrial rights including minimum wages and conditions. (though to be honest this is against the grain of so-called ‘reform of the labour market’ under successive governments, Labor and Liberal)   Karleby was critical of narrow interpretations of socialism which focused only on nationalisation.

For Adam Ford ‘socialist outcomes’ do not adhere to “pre-determined” and “known” “socialist structures”.  And rather than comprising an enduring beacon for socialists, the figure of Karl Marx is seen as imposing a “straight-jacket” on socialist thought.

Finally, Adam Ford condemns not only ‘command economies’ as ‘stupid’; but he applies the same judgement to mixed economies where the public sector extends beyond “natural public monopolies”, and certain essential services and infrastructure which the market would not provide via its own devices.

What follows is a response to Adam Ford’s arguments.

The hinting of a Bernsteinian angle is appreciated.  Bernstein had a lot of relevant things to say about socialism and ethics, socialism and liberalism, and the notion there no absolutely-final ‘end point’ for socialism. 

Though Bernstein had also insisted of Marx’s theory:

“The fall of the profit rate is a fact, the advent of over-production and crises is a fact, periodic diminution of capital is a fact, the concentration and centralisation of industrial capital is a fact, the increase of the rate of surplus value is a fact.”   (Bernstein, Pp 41-42)   

Ford is right to suggest that in Marxism we do not have the meaning of ‘life, the universe and everything’.  Ethics, for instance, was a blind spot for Marx and many who followed in his tradition and in his name.  As was the tendency of Marxists – not least of all Lenin – to pose socialism and liberalism practically as polar opposites.  (Whereas for Bernstein socialism comprised ‘liberalism’s spiritual successor’) 
Certainly it is fashionable in this day and age to decry the ‘old’ socialism. The neo-liberal Ideology remains largely hegemonic throughout much of the world.  Public ownership is seen as an anachronism.  ‘The market’ is revered; ‘command economies’ are reviled.  And indeed – even for those proposing a democratic mixed economy, the spectre of the ‘command economy’ hangs over all debate as if there really is no ‘middle path’ or otherwise diverging paths from those of neo-liberalism and so-called ‘state socialism’.  Though to be fair to Adam Ford he personally diverges significantly from neo-liberalism in proposing a thorough regime of regulation.  And his allowance for natural public monopoly puts him at odds with the likes of Mises or Hayek.

As already observed: Nils Karleby shared similar notions to Ford in the sense of emphasising regulation as the substance of socialisation; the means of negating ‘capitalist prerogatives’. Though Karleby himself had also argued:

“How can one imagine a social transformation other than by the growth of collective property at the expense of private property, and through legislative changes together with social and cultural policy measures, and through changes in property rights brought about by the influence of free organisations?” 

 

And further Karleby anticipates a

 

“grinding away of capitalist society in the true sense, a steady progressive growth of new social forms.”  (Karleby in Tilton, p 82)

Hence despite his emphasis on regulation-as-socialism Karleby does not deny the mixed economy.  Though perhaps his position is also suggestive of strategies such as democratic collective capital formation for example.

Again: Ford rejects “predetermined” “socialist structures”. Most particularly this appears to relate to state ownership ; but perhaps it also applies to collective forms of property posed in opposition to exploitative labour-capital relations.  Though Ford also suggests “democratic markets”.  What could this mean?

In truth I have considered “democratic markets” myself.  But here I conceive of a wide variety of producer and consumer co-operative forms, as well as collective capital formation and so on.  I think of workers and consumers organising collectively and co-operatively in the very midst of markets. And I envisage of the state playing an enabling role here: via state aid, including cheap credit, tax breaks and so on.

Still - any role for the state is really the rare exception for Ford.  But is a truly robust mixed economy really “stupid”?

True: Ford and I agree on the need for “natural public monopolies”.  Ford is not specific, but for me here I think of energy, water, communications and transport infrastructure. I also think of near-monopolies in education.  But why not extend strategic socialisation beyond these strictly conceived boundaries?  Government business enterprises can enhance competition in areas as diverse as banking and health insurance; also providing progressive cross-subsidisation where that makes sense. Dividends can potentially be socialised into the tens of billions empowering the extension of welfare and the social wage.  In areas such as mining partial socialisation via some ‘super profits tax’ made sense ; but opposition to a direct public stake here could be seen as Ideological. In any case - even a public sector mining company would operate in a global and competitive market. As could other competitive state enterprises.

Furthermore: ‘the market’ could no-doubt ‘find a way’ to intrude upon just about every facet of our existence. But should we allow for it to do so?  Are ‘markets’ and the profit motive appropriate in Aged Care for example?  The public sector needs to intervene where the market fails.  And market failure takes many forms. This includes the lack of democratic forms; the exploitation of vulnerable people; as well as ‘Planned obsolescence’ and the creation of oligopolies and monopolies which fleece consumers. Also there is the potential for neglect of consumer minorities whose ‘market power’ is not sufficient to ensure the provision of the highest quality goods and services at competitive prices.  Perhaps Ford allows for this final case in his model, however.  Though the question remains: how would that work?

Then there’s also a case for strategic government intervention in support of ‘multi-stakeholder-co-operative enterprise’. Government has a potentially progressive role to play in helping to finance co-operative enterprise large and small.  Especially in the case of large co-operative enterprise large injections of capital may be necessary to attain the economies of scale necessary to remain competitive on global markets. This is where government can help.  And not only State and Federal government – but regions as well.

Underlying rejections of a larger role for government is the notion that private ownership is “natural”.  It is considered the ‘default” form of property compared with which the public sector is but a rare exception. 

I reject this notion. But I do suppose a large role for competitive private sector markets into the foreseeable future.  A ‘democratic mixed economy’ is realisable in the foreseeable future in a relatively modest form. To illustrate: I personally envisage an increase in public revenues and associated outlays by 5 per cent of GDP – achieved perhaps over a decade, and flowing in to social wage and welfare provisions.  As well as public borrowings for ‘nation-building’ infrastructure. 

But ‘autarky’ is not the answer.  As I have argued elsewhere: transnational enterprises from Samsung to Apple respond to ‘the intricacies of consumer demand’. And they innovate under pressure in the context of competitive markets where massive economies of scale are necessary.

Nor should we aspire to ‘nationalise the corner store’.  This has always gone without saying.  Though small-scale co-operatives could also potentially respond to those ‘intricacies’ at the local level as well; while addressing the alienation many workers experience where they have little creative control over their workplaces and their labours.

Australian consumers don’t want to be isolated from the innovations that go on in competitive global markets. And Australian workers also stand to benefit from jobs-creating foreign investment.  I accept this. No-one (or at least almost no-one) wants ‘socialism in one country, Stalinist-style’.  We can gradually build up to a robust democratic mixed economy. But the ‘traditional socialist society’ as epitomised by the old Soviet and Eastern bloc is ‘lost to us’. 

In some ways this is actually a good thing.  The old command economies produced a ‘dictatorship over needs’ (Fehr, Heller, Markus) where ‘needs’ were defined ‘from above’ and consumers did not enjoy the freedom to determine their own needs-structures via markets.  Markets can be appropriate to the extent to which they enhance responsiveness to consumer demand, and reasonably enhance personal determination of needs structures.

But we should not adopt an Ideological perspective which closes off the strategic extension of the public sector.  Nor should we fetishize markets – especially where they fail.  And we should not just jettison the Marxist tradition in its entirety – when there is such a rich and diverse range of viewpoints and insights even still.  Even though in today’s more plural Left there is greater tolerance towards the pursuit of ‘ethical’ or even ‘liberal’ socialism.  (a good thing) 

We probably can define socialism ‘however we choose’.  But we should also ask ourselves what is reasonable when we return to ‘first principles’.  Socialism began with notions of economic equality; notions of ‘equal association’. There was also the communist notion of ‘From each according to ability, to each according to need’.  And that notion still retains its force today.  Though quite rightly the modern Left has also considered that economic equality alone is not enough to achieve ‘The Good Society’.  A ‘good society’ and a ‘strong democracy’ needs to include a participatory and authentic public sphere.  It must encompass mutual respect and free enquiry.  It must support peoples’ need for economic security; but also peoples’ search for meaning in many-varied ways.  Whereas the Left once focused its attentions on nationalisation too-narrowly, however, the opposite tendency to reject public ownership as a strategy is itself ‘Ideological’. Democratic socialists are learning from past errors.  But it is not a ‘clean break’.  Our efforts today should still be informed to a significant extent by past insights, and past tradition.

 

Bibliography 

Bernstein, Eduard  “Evolutionary Socialism”, Shocken Books, NewYork, 1961

Tilton, Timothy; “The Political Theory of Swedish Social Democracy – Through the Welfare State to Socialism”; Clarendon Press, Oxford, 1990

Responding to Kim Carr on the ALP's ‘Socialisation Objective’

 

Above: ALP Socialist Left Senator Kim Carr is right to take NSW Labor leader, Luke Foley to task for rejecting the ALP's 'socialisation objective'; But he is wrong in his apparent rejection on an 'extensive' public sector.

The socialisation objective is about more than nationalisation ; but extensive and strategic social ownership needs to factor into our plans and principles.

Tristan Ewins

In ‘The Age’ on August 9th 2015, Socialist Left Labor Senator Kim Carr provided a statement in defence of the ALP’s standing Socialist Objective.   That includes the ‘socialisation objective’ specifically which (originally in 1921) committed Labor to the following:

‘‘The Australian Labor Party is a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other antisocial features in these fields.’’

He also relates how in 1981

“23 explanatory subparagraphs were added to it. These set out goals such as full employment, the abolition of poverty, a more equal distribution of wealth and the elimination of exploitation in the home.”

Carr places himself at odds with NSW Labor Leader Luke Foley – for whom the socialisation objective was ‘confusing’.   Foley was beginning from the assumption that socialisation means nationalisation – and that those defending it were simply engaging in obfuscation.  For Foley Labor ought ‘say what it means and mean what it says’.   If we are about ending exploitation, then in the Marxist sense this infers the abolition of wage labour.  This is important – as is the question of socialisation interpreted as nationalisation.  And we will come back to this later- to consider why the positions of both Foley and Carr are problematic.

For Kim Carr it is the more-recent explanatory paragraphs which communicate the true essence of the Party’s Socialist Objective.  Further elaboration or reformulation are thus considered not necessary.

Some commentators have argued to the effect that these ‘explanatory paragraphs’ rendered the Objective meaningless anyway.  But before proceeding it is useful to consider specifics.  Hence the following selection from that section of the ALP Platform in question:

"c) Redistribution of political and economic power so that all members of society have the opportunity to participate in the shaping and control of the institutions and relationships which determine their lives.

"d) Maintenance of and support for a competitive non-monopolistic private sector, including small business and farming, controlled and owned by Australians, operating within clear social guidelines and objectives.

"l) Equal access and rights to employment, education, information, technology, housing, health and welfare services, cultural and leisure activities and the law.

"j) The abolition of poverty, and the achievement of greater equality in the distribution of income, wealth and opportunity.

"n) Recognition and protection of fundamental political and civil rights, including freedom of expression, the press, assembly, association, conscience and religion; the right to privacy; the protection of the individual from oppression by the state; and democratic reform of the Australian legal system.

"p) Elimination of discrimination and exploitation on the grounds of class, race, sex, sexuality, religion, political affiliation, national origin, citizenship, age, disability, regional location, economic or household status.

"t) Recognition of the need to work towards achieving ecologically sustainable development.

"u) Maintenance of world peace; an independent Australian position in world affairs; the recognition of the right of all nations to self determination and independence; regional and international agreement for arms control and disarmament; the provision of economic and social aid to developing nations; a commitment to resolve international conflicts through the UN; and a recognition of the inalienable right of all people to liberty, equality, democracy and social justice."

Hence the Objective is really quite extensive and substantial, and it does not restrict itself solely to socialisation interpreted as nationalisation. Indeed it could be considered both politically liberal and democratic socialist as well in the sense of advocating universal social rights of citizenship.  The promise of moving towards equality of political and economic power suggests a radically redistributive project, but at the same time there is the important (and realistic) concession in support for a non-monopolistic, competitive private sector. 

This Objective – reformulated in 1981 to be inclusive of both the Party’s Left and Right could be interpreted after the way of Nordic social democracy, with the probable implication of supporting a comprehensive welfare state and social wage; a progressive taxation system; as well as appropriate industrial rights. But there is room for improvement.  Some of these could be spelled out more clearly and overtly. And the significance of socialisation interpreted either as occurring through the public sector – or through a more diverse ‘democratic sector’ including State Aid for co-operative and mutualist enterprise – is not elaborated upon sufficiently.

Kim Carr gives the impression that he believes Foley’s proposed Objective is “tepid” and weak – and could just as easily find a place in the Platform of the Liberal Party.  After all, who today disagrees with the principle of ‘equal opportunity’ – at least openly or ‘in theory’?  Carr gestures towards the true inequality of opportunities that persist under capitalism ; for instance the meaninglessness of any ‘freedom’ of individuals to negotiate terms in the labour market – where the only real strength of workers under these circumstances – their collective solidarity – is progressively undermined and even criminalised.  He argues that this:

“is like saying that a millionaire and a homeless person have the same freedom of choice to sleep under bridges”

And for socialists ‘equal opportunity’ must mean more than ‘meritocracy in the labour market’. As the Objective insists, it must include: “Equal access and rights to employment, education, information, technology, housing, health and welfare services, cultural and leisure activities and the law.”   Socialism implies progress towards the principle of ‘From each according to ability, to each according to need’.

Sure, the Liberals make a mockery of ‘equal opportunity’ in practice – supporting privilege in Education, and proposing deregulation where quality of education would depend upon user pays mechanisms which excluded the poor and much of the working class.  Chris Bowen has also gone a bit further, arguing for equality of outcomes in Health.  Bowen’s proposal of a ‘toothless’ National Conference; his apparent opposition to a robust mixed economy; his support for a simpler (ie: in reality less progressive) tax system –  are all disappointing. But support for real equality of opportunity in education, and crucially equality of outcomes in health - comprise a beach-head for something more progressive – and so this common ground should be capitalised upon.

Hence we desperately need to commit to a National Aged Care Insurance Scheme,  Medicare Dental, and ‘closing the gap’ on life expectancy of the mentally ill – ahead of the next Federal election.

Notably: because the Conservatives are progressively abandoning meaningful commitments to political liberty and civil rights, as well as genuine and comprehensive meritocracy through a more accessible and equitable regime of Education – that should not be taken as a signal to simply opportunistically occupy the vacated political space. Aspects of Greens policy have been depicted as ‘extreme’; whereas in reality they are closer to the legacy of Whitlam, say, than we are ourselves often in the ALP today.  We cannot accept these terms of debate ; and we cannot simply move to the Right and allow to Greens alone to occupy that political terrain. The Politics of ‘Convergence on the Centre’ are really self-defeating where it occurs on the terms of our Conservative rivals, and on the terms of an Ideological monopoly mass media.

If we are truly a democratic socialist party we must not only exist for winning elections as an end in itself.  We must be about contesting the very substance of ‘the mainstream’, progressively reshaping the discourse to shift the relative centre to the Left in keeping with our values.  Antonio Gramsci would refer to the formation of a  ‘counter-hegemonic historic bloc’ – an alliance of forces through which society’s ‘common sense’ is reconstructed as the substance of democratic socialism. Again after Gramsci this could be interpreted as a ‘war of position’ – taken in our own specific circumstances as a process of laying political siege to, and contesting the institutions of civil society and the state. Culminating in the democratisation of the State itself – so that the way is unambiguously open for ‘a democratic path’ to socialism.

Kim Carr concludes his commentary by elaborating on what socialisation means to him.  To establish this we will reproduce some of his closing comments on socialisation:

“It is not about the straw man of extensive public ownership and a centrally planned economy. But it is about public entrepreneurialism, and public investment in the forms of human endeavour that are necessary to build and sustain a democratic, just and technologically advanced society.

Socialisation is about defending a just minimum wage and fair working conditions. It is about the creation and defence of Medicare, the enhancement of a great public education system, and the construction of national infrastructure such as the Snowy Mountains Scheme and the National Broadband Network.”

While Carr’s support for public education, nation-building infrastructure and ‘public entrepreneurialism’ are encouraging, he himself appears to be conceding substantially to the neo-liberal Ideology.  That is: In the sense of implying support for ‘small government’ through rejection of an “extensive” public sector.   While Foley wants to get rid of the socialisation objective because he rejects any radical connotations, Carr seems to be implying that we sidestep or reject content associated with public ownership – content which could potentially and progressively challenge the current distribution of power and wealth under capitalism. (and hence not acceptable to capitalists)  Though perhaps Carr is open to tax reform, as well as social wage, social insurance and welfare extension – all of which are central components of a democratic socialist agenda of ‘socialisation’.  Here we could do with specifics – and policy ambition.

Few today support a Soviet model of centralised state planning.  But we should not close our eyes to the possibilities of strategically extending the public sector, and engaging in strategic instances of planning.  Neo-liberal Ideology rules out public and democratic sector expansion as well as socialisation interpreted as regulation where ‘the absolutism and prerogatives of capital’ are progressively curtailed.  (see the work of the Swedish social democratic thinker, Nils Karleby) But the old socialist Ideology aspired towards progressive nationalisation – potentially over decades.  In the 1970s socialists like Stuart Holland hoped that the ‘commanding heights’ of the economy would ultimately revert into public hands.  Today, though, we could well embrace the project of a ‘democratic mixed economy’.  

The ‘way forward’ to something along the lines of ‘socialising the commanding heights’ appears to be blocked on account of the dominant Ideology, and also because of the power of Capital to obstruct reform through destabilisation, capital strike, disinformation etc.  Indeed, this can be a corrupting influence upon democracies.  Here, while the sheer political and economic clout of the biggest transnationals is a genuine threat to democracy, working people and citizens nonetheless stand to benefit from job-creating-investment, and as consumers from various innovations in areas ranging from automotive industries to information technology.  While the scale of the transnationals is in some ways threatening – and we need to frankly recognise this - the economies of scale and competition involved can have benefits in these fields. Though there are also other problems (eg: built-in-obsolescence) which might be remediable through some form of regulation.  And global solidarity of labour is necessary to prevent the transnationals from simply exploiting the poorest and least organised workers.

And yet much of the old socialism remains instructive. Capitalism can be inefficient, unstable and wasteful. It can create conditions of exploitation and human alienation.  The expropriation of a portion of the proceeds from labour by capitalists remains morally problematic even though few on today’s Labor Left will openly discuss this. For genuinely small investors (eg: other workers) dividends may comprise a fair return in the context of making a sacrifice through deferring consumption. But in the bigger picture a portion of the value created by workers is expropriated by capitalists. Workers generally do not enjoy the full proceeds of their labours. These arguments are commonly ignored simply because the consequences are potentially radical for a Left ‘on the back foot’ in a steady (decades-long) process of liquidating its own traditions in order to ‘Converge at the Centre’. Here it was really Hawke and Keating who ‘led the way’ providing the ‘inspiration’ for Blair.   We need to retain a frank critique of capitalism even if the movement towards something better has currently stalled.

But the extension of the ‘democratic sector’ - including the important ‘subset’ of the public sector -remains important despite being at odds with the prevailing Ideology.  By ‘the democratic sector’ we refer not only to the traditional public sector, but also to a multiplicity of co-operative and mutualist forms, as well as democratic collective capital formation and other like-projects, as well as self-employment and co-determination.  These democratic economic forms and strategies can mitigate or indeed end instances of alienation and exploitation.  They can result in a more equitable distribution of wealth and the power that corresponds to this; and also give working people creative control over their labours.  

Efficiencies and reduction of cost-structures through natural public monopolies can also be capitalised upon – flowing on to the private sector and making better wages and conditions, and more progressive corporate taxation sustainable.  For instance: did we really ever need two sets of mobile telephony infrastructure?  And what price are we still paying for that duplication?  Indeed, ‘competition’ in areas such as energy, transport and communications infrastructure, water – are still deeply ‘anti-intuitive’, wasteful and unnecessary.  Hence it is possible to add to the current capitalism’s survivability while laying foundation stones for something better ‘long term’. 

An extended public sector specifically can lead to many other desirable outcomes.  Socialisation of profits via public enterprises in areas like mining, general insurance, private health insurance and banking could (in the Australian context) deliver tens of billions into welfare, infrastructure and social wage programs.  And a ‘not-for-profit’ footing could enable better pay and conditions for child care and other professionals who currently face extreme exploitation. Without getting into a long debate over the labour theory of value – public sector workers could be compensated fairly – but profits would be redistributed through the social wage, investment in infrastructure and services, and in welfare.  There would be no expropriation of surplus value, here, in the traditional capitalist sense. Though the redistribution of profits could appear to some to be diluting the return to labour. (that would not be a problem for some forms of co-operative enterprise for instance)  Government Business Enterprises and public infrastructure could also be administered in such a way as to cross-subsidise in favour of the disadvantaged ; but also to enhance competition where oligopolistic collusion would otherwise be a threat.

So indeed there are many arguments in favour of an extended public sector as part of a broader project of a ‘democratic mixed economy’.   Contra-Luke Foley - Let’s defend the Socialist Objective.  But let’s not dilute it to the point where it becomes merely token or symbolic.  Indeed let’s try and improve the Objective to make clear our aspirations for a democratic mixed economy; an expanded welfare state; a reformed tax mix and an expanded social wage.  Yet as against Kim Carr’s aversion to an ‘extensive’ public sector, strategic expansion of the public sector remains important and valid, as does the spread of other democratic forms – such as co-operative enterprise – with assistance via State Aid.  Indeed, these together could comprise a ‘multi-pronged strategy’: a long-awaited Left counter-offensive against the dominant neo-liberalism.

Both neo-liberalism and the old ‘Communism’ have demonstrably failed.  We need to reject the prevailing intellectual fetish for ‘undistorted’ markets, privatisation and small government and return to the question of a democratic mixed economy with an open mind.

Nb: Several other essays on the theme of a ‘democratic mixed economy’ can be found here:

http://democraticmixedeconomy.blogspot.com.au/2013/10/what-is-democratic-mixed-economy.html