Monday, September 15, 2014

The Social State in Australia - An analysis by Eric Aarons

In this new 'Left Focus' article former Australian Communist leader Eric Aarons provides an analysis based on Thomas Piketty's influential new book 'Capital in the Twenty-First Century'.  In particular Aarons defends Piketty's notion of a 'Social State' as a project for progressives in today's world.

by Eric Aarons             

In his fine and successful book, Capital in the Twenty-First Century, Thomas
Piketty uses the term ‘the Social State’ to describe a form of government that  controls the capitalism of our day sufficiently to ensure that every citizen gets an adequate mix in  quantity, quality and kind  of the goods and services necessary to live a civilized life in today’s conditions.

This was never achieved in the socialism of the 20th century by those who tried the hardest – the Russians, then the Chinese, Vietnamese and Yugoslavs. Nor were their political formations suited to winning lasting popular support.

But that period witnessed the two biggest and worst wars ever.

The first, ‘The Great War’ against Germany, is presently being ‘celebrated’ for its hundredth anniversary (because We won it) though a major feature of it was a struggle to possess the most colonies with the most people and resources.

The Second World War, fought against German and Japanese fascism, which was an extremely reactionary ideology based on grounds of racial superiority and revenge, which could not be permitted to succeed.

I was born in 1919, so did not see any of the first war, though I was moved in observing some of the human wreckage that came through it. Then I saw and felt the Great Depression that followed it for a decade. By the time the second broke out I was politically aware, and on the basis of the facts then prevailing,   thought that socialism was the only possible solution.

I could literally ‘feel’ the sentiment around me then. It was: that we will fight to the end against German and Japanese fascism; but ‘never again’ will we put up with the sacrifices of wars, in which capitalists always do well, but make few, if any,

 Radical social changes for the better.

I am sure that pro-capitalist forces knew quite well that they were then very much on the defensive and had to suitably respond. The same note was struck by the extensive postwar planning agenda which included plans for doing away with the dilapidated and bug-ridden city shacks in which the majority of working people had to live, while wide-ranging plans were made for the future with the great Snowy-mountains project and other plans put in place near war’s end.

New thinking was encouraged, and practiced enthusiastically – not like today, where it is demanded to get out of the hole capital has dug itself into

All this, and the influx of refugees from shattered European countries who immediately found jobs, created the three decades of unprecedented prosperity that followed, showing what could be done by a socially engaged government that still respected private property rights, but was prepared to act outside the usual bounds, to correct or mitigate the faults in the capitalist system and respond to glaring economic and social needs.

Many important products went into mass production for the first time, such as synthetic plastics (on a scale in which we are near to burying ourselves). And in 1947 were invented the now truly universally present ‘transistors’ using rare ‘semi-conducting minerals, and now essential in all our electronic appliances and especially the miniaturised ones.

It was, in fact, a practical response to the over-theoretical and rather rambling ideology of the neo-Liberalism developed by Friedrich Hayek that made valid criticisms of socialism as practiced, but failed to make a compelling case in favour of permanent adherence to a capitalism that had in major respects run amok ,with no alternative yet in sight.

Three decades of prosperity and peace

For three decades there was virtually full employment; it was easy to leave a job and find another better one, while profits were also booming.  I noticed all this when I returned at the end my three year study period in China, and was somewhat taken aback by the scale of spending that was clearly now the norm. The Social State had arrived, though we didn’t yet have the name for it.

War torn Europe had to spend some years repairing colossal damage, and couldn’t therefore immediately take on this initiating task, while the US was more occupied with Senator Joseph McCarthy’s campaign to drive out of the country all artists, writers and activists deemed to be ‘leftist’.

So I feel justified in claiming that the first examples of the Social State appeared in Australia and New Zealand, and we should now exert ourselves to contribute to the development and renewal that Piketty prescribes.

Government’s role today embraces efforts to regulate capitalism’s inherent cycles, irregularities and periodical crises; and in the financial sector, its increasingly deliberately illegal activities that have incurred multi-billion dollar fines from an Obama Presidency.

We, in Australia, though relatively well-placed economically, are faced with a new conservative government trying to foist on us an austerity regime, while at the same time giving open slather to environmental damage from our massive coal deposits and the money-making plans of ruthless so-called ‘developers’.

Capital Fights Back

But capital does not welcome, or even recognize, the word ‘sufficient’, especially in regard to profit, which is its lifeblood. It worked away in the ideological field with attacks on trade unions, cries of ‘nanny’, concerning the new State, ‘living off the public teat’, ‘not standing on your own two feet’, and the like. Then came the outbreak of an escalating bout of inflation in the mid-1970’s when, particularly with his theory of neo-Liberalism and winning the Nobel Prize, Friedrich Hayek turned the ideological tide which, along with the mantra ‘success is the sure sign of merit’ (literally, where money is concerned, the assertion that ‘might is right’, worked in favour of a capital on the offensive.

Regrettably the left, with its own concerns from even worse socialist failures and accompanying fragmentation, was not up to the task of waging the essential ideological struggle against neo-liberalism. But now, Thomas Piketty, with his new approach and forcefulness has given the left a second chance. We must not waste it this time!

This, if properly and persistently used along with a renewed and refurbished Social State, can break neo-liberalism’s present ideological hegemony and undermine the present political dominance of the mega-rich, who dictate in various ways the direction of society’s (indeed, humanity’s) development.

Certain unusual or misunderstood aspects of neo-Liberalism have to be grasped if this struggle is to be won. For instance:

Neo-Liberalism describes itself as something that was not, and could not be created by human beings. It is a self-generated, self-organized combination of elements that, spontaneously welded themselves into the system that we now call capitalism.

Because of that supposed ‘fact’, no individual or group of individuals can be blamed for shortcomings:  these are more likely to be caused by government,   union or leftist interference. This system has evolved, and we cannot control evolution. Indeed, to try to do so can only make things worse than they may presently be. And nothing like ‘Social justice’ can exist, for ‘society’ is not an entity that can be studied or managed as a whole.

Humanity’s now outdated old instincts are the main problem, always holding us back. Rather than inbuilt ‘human instincts’ and ‘fellow-feeling’, we now have to  control ourselves by a set of abstract rules. Hayek proclaims: ‘I believe that an atavistic longing after the life of the noble savage is the main source of the collectivist tradition.’(The Fatal Conceit, page 19). The one exception concerns our intimate companions:  Because, ‘if we were always to apply the rules of the extended order [capitalism] to our more intimate groupings, we would crush them.’ (ibid. page 18).

The rest can go hang, he is saying; but with the sweetener for some                     ‘that such a system gives to those who already have [which is] its merit rather than its defect.’ (Law, Legislation and Liberty, vol. 2, page 123)                                                                                                                                                                                                                                                                                                                                                                                                                                      

Hayek has devised what would be a legally binding constitution to guarantee that it will survive even the demise of the above supports for the inner nature of the system.

Personally, for some years, I and others had hoped, rather, to do away with capitalism altogether. While capitalism was still in full control, it was the social democrats of various kinds in Australia and worldwide who, to their credit,    worked hardest to abolish the sordid slums where the majority of working men, women, and children were forced to live. These were replaced with decent habitation, and many of their progeny showed through their abilities that higher education should no longer be be confined to the wealthy – a principle now under a new threat from the Abbott government and its education minister, Christopher Pyne.

Feelings were intense, ‘post-war reconstruction’ had to heed – and did – modern concerns with new social problems, complexities and to a degree our relation with nature itself and other species began to appear. Capitalists and their ideologists were very much on the defensive, and  the conservative Robert Menzies presented himself as a spokesman for the developing middle class.

It was a period when really full employment existed, and I can remember a  time early in Menzies reign when a  2 percent rate of official unemployment caused anger and concern.

The State

People realised that only democratically elected governments could have the power to obtain the money now required to solve new tasks, and thereby had both the right and duty to step in – not to take over the lives of individuals and families, but to help all citizens cope with the increasing complexity of modern living. 

This expressed the conviction that a civilized society required not only the piecemeal reforms already set in place, but an undertaking that the state itself would work more broadly, as in fact it did. This was significantly and particularly in the three unprecedentedly prosperous decades (a whole generation!) that followed the victorious end of the Second World War.

Some possibilities occur to me that could make a significant difference, without repeating the socialist mistake of advancing to foremost requirement the abolition, essentially by confiscation, of all significant private property in the means of production.

Johnathan Sperber, in his important recent book Karl Marx: a nineteenth-century life, includes from a new edition of Marx’s collected works, the fact that Marx had some second thoughts about private property.

Reading a copy of Rousseau’s Social Contract, Marx had heavily penciled in the margins that ‘a genuine democracy would be the “true unity of the universal and particular”, where the state would be a “particular form of the people’s existence.” Sperber then publishes comments holding that this structure would not be the same as anarchism but the ‘creation of circumstances in which the  state ‘no longer count[s] as the totality’ that is, was no longer opposed to the private interests of civil society. (Karl Marx: a nineteenth Century Life, pages 113-4) 

Taking notice of Piketty’s view that the Social State, now 60 or more years old, is in need of renovation and renewal, I believe, with him, that ‘civil society’ needs a boost. Philosopher John Gray writes of this concept that: ‘this is a complex structure of practices and institutions, embracing a system of private or several property, the rule of law, constitutional or traditional limitations on government authority, and a legal and moral tradition of individualism, which is the matrix of moral tradition of individualism, which is the matrix of moral and political life as we know it.’ (Liberalisms: Essays in political philosophy, page 262).

It is also related to to the concept of ‘self-management’,which I have  personally and positively experienced in a cooperative printery.

The one thing that I would like to add to any set of changes, is that it be made   clear that ‘ownership’ is not absolute, but includes also the concept of custodianship, implying that possession includes some responsibility to preserve, where possible, the value of an asset – and particularly of our wonderful natural assets.                                                                               



viewing a DVD of Ken Loach’s film The Spirit of ’45 (the end of the Second World War) I realized that, despite extensive damage, the British nation and people had not only been moved like everybody else by the spirit of ‘never again’ without changes for the better, would they fight for a defective and unfair social system.

They had immediately set about ensuring it was actually done. Many of the demands developed after WW1 by the left, labour, and progressive movements, but rejected by the dominant rich and aristocratic forces were, dusted off and refurbished by radical intellectuals and socialists, and actually put in place by the first post-war government.

Winston Churchill, a prominent hereditary aristocrat, had played a major part in defeating a movement to do a deal with Hitler, peopled by some prominent aristocrats, including some close to the royal family. And, succeeding, when war actually broke out rose to the top and played a leading part with inspiring speeches and, mainly good, military and political decisions.

When the first postwar election was held, he stood as a candidate to lead the new government, but was defeated by Labour.                                                                                                                                                                                       

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