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Socialism for the 21st century

October 10th, 2017

I have a long article in the Guardian putting forward some thoughts about a socialist economic policy program for the 21st century. The headline “Socialism with Spine” is a shortening of my observation that:

As it is used today, the term socialism does not reflect a well-worked ideology. Rather it conveys an attitude that could be described as “unapologetic social democracy” or, in the US context, “liberalism with a spine”

The contraction might have led some readers to expect a position more radical than the one put forward in the article. I’m advocating both a restoration of those aspects of 20th century social democracy that are still relevant today and new ideas to turn the 21st information economy to the benefit of the many, not the few.

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  1. Newtownian
    October 10th, 2017 at 07:03 | #1

    Good to see the discussion John. But also so much missing. Some comments by way of comment not criticism as this project is as they say bigger than Ben Hur:

    1. That it has taken so long to come to the fore is a real worry. This project should have been ongoing from the crisis time of the 70s. That it has taken nearly 50 years to recrystalize even as a priority is a worry and I fear reflects a bankruptcy of imagination on the left. And how are you to change the academy, one of the biggest barriers to progress here that I can see?

    2. Meanwhile it is unclear whether the hegemony of neoliberalism is even realistically challengable because sneaky buggers they are (apparently the word comes from Bulgarians and medieval propaganda), they have sequestered/embedded so many of us would be supporters. I am thinking here of the (near or actual) pensionable age baby boomers like you and me. We have our relatively giant superannuation and other asset bases required for our retirements, two trillion dollars worth which the banks are eying greedily as I write. Is this to expropriated? Dont the young understand its mine mine mine (channelling Daffy Duck in one of his best cartoons)? Or are we simple to remain good petty bourgois rentier capitalists with social democratic puffery? I dont have the answer but am merely pointing to one more of the gorillas.

    3. Then there is the Green problem. I noticed like Stiglitz et al. that your piece in the Guradian is 100% anthropocentric. I realize you are skeptical of LtG but surely this issue still needs inclusion. To illustrate, there is the question of just how much we should leave the planet natural v. a built utpia which is captured under the emerging issue of ‘rewilding’. This flies in the face of wanting prosperity for all given a growth economy. The planet’s resources are simply not enough to support 8 billion at a western level without a reorganized infrastructure by mechanisms which are as yet unclear. Related is the matter of where you put the growth ceilings – like sustainable CO2 emissions. I’m sure you agree infinite growth in population and material accumulation is impossible. So where is/should the ceiling lie? You yourself have offered the opinion that the ceiling is determined more by pollution. While I disagree, its certainly a plausible position and the logical solution is really to try and refine the numbers as has happenned with greenhouse gas emissions and impacts and for our society to then collectively figure out what is really tolerable – if we can sort this mess in time.

    4. Finally there is the problem of socialist reward and resource allocation in a just fashion. As I’ve commented before Herman Daly identifies the traditionally socialist alternative as an Orwellian Central Allocation Board as explained in LANGE, O. 1936. On the economic theory of socialism: part one. The review of economic studies, 4, 53-71. LANGE, O. 1937. On the economic theory of socialism: part two. The review of economic studies, 4, 123-142.

    At the time of him writing in 1936 this approach seemed plausible. But history and 50 failed or problematic centralized socialism experiments seems to have invalidated this though I wonder if the NSW Greens get it. So how do we allocate and control money in a socialist world? Beats me. Money has evolved into such a legal/philosophical/conceptual monstrosity that one of socialism’s first projects is to sort out the does and donts especially when it comes to its use and how to control debt accumulation.

    5. What has socialism got to offer when it comes to messy realities of the human condition. This needs some work. In particular are the problems that come under the concept of ‘vice’, drugs, gambling, prostitution, the inability to deal with which leads to the terrible incarceration system of the Anglosphere, some very nasty people in the form of the outlaw biker gangs etc. ? I’m not saying I have answers but merely I am pointing out that socialism to my understanding does not have a solution to the dark side of human nature unless one is to believe pollyanna style that if socialism can be achieved then all will be well for Candide.

    Anyway it will be fun to watch the other reactions here to your post. The constructive ones at least. Thanks for playing the lightning rod.

  2. Ikonoclast
    October 10th, 2017 at 08:53 | #2

    I understand that John can’t fit everything into even a “long” article. Even so, failing to mention modern Marxian* Socialist scholarship seems to be a large oversight. Or is it intentional as, rhetorically, John considers that the term “socialism” can be rehabilitated but the term “Marxian” cannot? In my view, any mention of modern Marxian scholarship ought to include the Monthly Review, current active editor, writer and theorist John Bellamy Foster and the works of Paul Sweezy and Paul Baran. Prof. Richard D. Wolff also deserves a mention along with David Harvey.

    Richard D. Wolff has some interesting things to say about the need for democracy in the workplace. Democracy needs to happen everywhere in society, every week and not just once every three or four years in an imperfect, symbolic and barely semi-representative fashion. That last sentence puts it in my words.

    Monthly Review writers and contributors analyse modern capitalism in ways which go far deeper than “liberal socialist” scholarship. Without absorbing this analysis people cannot, in my view, understand the deep systemic reasons why capitalism behaves the way it does and in turn what needs to be done about it.

    Socialism with a spine needs an intellectual spine too. As valuable as Piketty, Stiglitz and John Quiggin are, their work needs to be further informed with the works of the people I mention above.

    * Note: I prefer the term “Marxian” to “Marxist”. Marxian thinking is informed by aspects of Marx’s philosophical and political economy work but does not take his writings as infallible gospel. “Marxist” as a term is associated with doctrinaire Soviet Marxism, of one strain or another, and with Soviet Communism which is correctly understood as state capitalism and not socialism at all. See some of Wolff’s writings for this latter point.

  3. Smith
    October 10th, 2017 at 10:15 | #3

    Until the late 70s, early 80s, support for the idea of a mixed economy was standard fare for the Labor Right, as distinct from the Labor Left, who supported the “socialisation of the means of production, distribution and exchange”, nationalisation of “the commanding heights” of the economy, full-on economic planning, and so on.

    In post war Britain, support for the mixed economy was most associated with Anthony Crosland. This was so right wing (by British Labour standards of the day) that it cost him the chance for the leadership of the Labour Party.

    It’s funny how the discourse on the economy has moved so far to the right in a generation. It’s pretty much all down to Margaret Thatcher. Most politicians come and go without leaving a trace. Her influence will last 50 years minimum.

  4. I am and will always be Not Trampis
    October 10th, 2017 at 10:35 | #4

    You say neo-liberalism is losing its appeal. you then go on to talk about austerity policies.

    You can believe in neo-liberal polices yet justly criticise the austerity policies which were introduced in some countries. Austerity is not part of neo-liberalism all of the time only in good times.

  5. Ernestine Gross
    October 10th, 2017 at 10:44 | #5

    I liked your article in the Guardian. In my reading, it conveys the idea of social democracy being non-dictatorial, defined here as having only one overriding objective, namely finding policy measures that improve the welfare of all individuals under changing circumstances regarding the natural environment and technology, without seeking some theoretical perfection. In particular, there is no presumption of a unique set of policies that must be followed, irrespective of empirical observations and advances in theoretical knowledge, but rather an invitation for the members of society to participate in the selection of appropriate policies at a time and place. The narrower economic aspects of social democracy could be described as a ecological-social-market economy – an update of ‘mixed economy’, if you like, which takes the mounting evidence of environmental problems into account. In short, social democracy is not an -ism.

  6. Ikonoclast
    October 10th, 2017 at 13:19 | #6

    @Ernestine Gross

    I would like to see democracy extended to workplace democracy broadly as per the ideas of Prof. R. D. Wolff and the Democracy Now website.

    I agree that we cannot seek theoretical perfection of a political economy. It is at least a chaotic system (in the sense of chaos theory) or much more likely a complex emergent system demonstrating genuine indeterminism. Whilst this appears to be the case, there are some dependable laws which we can deduce from empirical data. It is these dependable laws we must seek to uncover and this includes laws which would predict probability distributions for results from certain actions.

    Piketty seems to have deduced a dependable law in the form of a conditional statement:

    If return on capital is greater than growth then inequality increases.

    In turn, that dependable law is an artifact or axiom, if I may say so, of a certain form of economic relations and initial conditions. In broad terms the relations are those where ownership of capital confers an income and the economy’s total income is split between profit and wages. The initial conditions are where ownership of capital is already unequally distributed at any time “t” from which we start observing the system.

    Thus the full statement of the system law would be;

    Where ownership of capital confers an income and the economy’s total income is split between profit and wages and where initial conditions demonstrate some unequal distribution of wealth and return on capital is greater than growth then inequality will increase. This is axiomatic under our current system.

    In a formal system, a “law” is really an axiomatic result of the system settings. Here, we may part company I guess. I hold that capitalism is a discernible and definable system with discernible and definable elements. This is not to say that in practice any “capitalism” is a pure, isolated system. It will always be part of an amalgam, a system of systems, when all is looked at as a complete political economy.

    Systems have definable boundaries (that’s part of the definition of a system) but these boundaries are best termed interfaces, not boundaries. Whilst maintaining some aspects of its own integrity and identity any system, in a system of systems, will typically share some matter, energy, field influences and information with other systems. Without belaboring the point, the term “mixed economy” for example describes a system with two major sub-systems identifiable within it, namely the private enterprise (or capitalist) system and the public enterprise and public governance system. Each of these main systems then consists of further sub-systems. Employing the concepts, tools and techniques of complex system science will give us our best chance of understanding and managing the political economy system for the greatest good of the greatest number.

  7. Geoff Edwards
    October 10th, 2017 at 18:13 | #7

    @Smith
    And Rupert Murdoch, who became enthused about Ronald Reagan’s economic agenda and gave a megaphone to the neo-conservatives. He also funded think tanks in Britain, Australia and the US.

  8. hc
    October 10th, 2017 at 18:57 | #8

    Isn’t endorsement of a “mixed economy” pretty much what most economists support? Use markets where possible – there are advantages – and where there are market failures, regulate them or publicly-provide goods and services. A decent distribution of income is not ensured by having free markets – not a revolutionary idea but prominent in Samuelson 101. It is the vulgar endorsement of free-market fundamentalism that leads to problems but, apart from a few fanatics at the IPA, few adopt this viewpoint. The difficult issue is where you draw the line. Markets with minor wrinkle distortions should be felt alone but there is a recognition that, even with market failures, there are costs of intervention. Complex tradeoffs should be recognized here not sweeping assertions. I think you misrepresent the discussion. Nor are things as bad as you claim. Was there economic chaos in the 1970s? There is the 1% issue but mixed economies have delivered huge gains in global equality. In every respect I live far better than my parents did – my mate the plumber takes a couple of jaunts overseas each year. It is not a crisis – most of us are doing well. Seeing everything as a crisis might be a debating tool but it is hardly the basis for a reasoned discussion.

  9. Jim Rose
    October 10th, 2017 at 19:04 | #9

    Unless you are willing to give telecom its members monopoly back and introduce exchange rate controls on Amazon one-click, you are just Roger Douglas-lite

  10. Ikonoclast
    October 10th, 2017 at 19:16 | #10

    “my mate the plumber takes a couple of jaunts overseas each year. It is not a crisis – most of us are doing well.” – hc

    This takes a bit of unpacking. Many in Western economies are not doing well.

    http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

    Your mate the plumber is one person and anecdotal evidence. Although this anecdote does point to the likely fact that self-employed tradespeople in Australia have become the new “aristocracy of labour” while people in clerical, administrative and service jobs have seen their pay stagnate or even fall. Many of these cannot even get full hours when they want them and work part time. Many poorly paid workers are women and the upper two deciles, often men with comfortable incomes, do not notice the plight of working women at all.

    As Noel Pearson would have observed, the statement “most of us are doing well” has a sub-text which can be de-coded by reading it as “most of US! are doing well”. The “them” are blacks, women, poor whites, invalids, pensioners and so on.

  11. Geoff Edwards
    October 10th, 2017 at 19:25 | #11

    Given that there seemed to be more than 1100 comments on the piece in The Guardian, it is hard to know what new insight a short comment here can add. However, I will make the attempt.

    The article has passed over the environmental dimension. The human population is now consuming energy and resources at a rate greater than the natural systems can replenish. The global systems that support life are now breaking down and large-scale disruption is imminent. Climate change is only one parameter, but it affects many others. An average increase of 2° in global average temperature is now locked in, and by itself will cause unquantifiable but probably extensive disruption to cereal production, fisheries, desertification and water supply, to mention only some resources. It is already happening in some countries.

    As these disruptions push themselves into political and policy consciousness, governments will cast around for solutions. The discipline of ecological economics has some of the insights, but a social order and an economic order will have to be developed on the run as there is no current blueprint.

    The laws of thermodynamics are inviolate and the laws of economics are derived, social constructs. Economics and politics will have to adjust.

  12. Smith
    October 10th, 2017 at 19:34 | #12

    @hc

    But will your children live better than you? House prices (relative to average incomes) have doubled in the past generation, wages are stagnant, household debt is to the sky, our cities are clogged with congestion. None of these things is going to get better any time soon. They might get worse. Having a whole bunch of cheap electronic devices and cheap flights to Europe only compensates you a little bit.

    (And, no, I am not saying there is some socialist fix or that freeing the internet from Google’s and Facebook’s control is a solution either.)

  13. October 10th, 2017 at 23:20 | #13

    The article recognises the need to expand voluntary work and unpriced information, but does put this in a theoretical frame. My short mental model is of three complentary sectors: capitalist, socialist, and communist. The last refers to unpriced transactions governed by gift exchange and loose reciprocity. I suggest that one aspect of a humane socialism is recognition of the value of the communist sector and the potential for its expansion. We don’t need to believe that 100% communism is possible to think we could do with more of it. The position has moral force against the neoliberals who try to expand the scope of prices and monetary exchange everywhere. Ideally they would replace marriage with prostitution.

  14. rog
    October 11th, 2017 at 02:35 | #14

    Another example of political dissonance was given by the talentless Bronny Bishop who, on Sky, warned of creeping socialism while advocating the govt to build more power stations to ensure that the privatised energy system doesn’t stress out.

  15. rog
    October 11th, 2017 at 02:40 | #15

    @I am and will always be Not Trampis

    “Austerity is not part of neo-liberalism all of the time only in good times.”

    That sounds like classic Keynes, Homer.

  16. Ikonoclast
    October 11th, 2017 at 09:41 | #16

    Meanwhile, the disgraceful attacks on workers continue.

    http://www.abc.net.au/news/2017-10-11/penalty-rates-union-court-appeal-public-holiday-sunday-pay/9037286

    Workers already on low rates and short hours get a pay cut as per this decision. Current economic policy is still bereft of any understanding of the wages/profit circuit. One person’s wages become another person’s income. Workers, especially at the lower end of the income scale, tend to spend all their income. Profits going to better-off people (like business owners) are not always all spent. As the economists would say, workers have a higher marginal propensity to consume. The most likely outcome of lower wages in an already high unemployment situation is a further depression in economic activity. There is little to no evidence of a boost to employment by going the low wage route. It simply creates working poor: more immiseration.

    Look at the table in the article I linked to. It contains evidence that the goal is the lowest wages possible. Otherwise, if there was any nod to equality at all, fast food workers would not have been sent below the new penalty rate floor for the other workers. These penalties are percentages so the normal wage would be the overall reward for skill set by the employers. There is no need (other than paying workers as poorly as possible and thus increasing profits) to send fast food workers to a lower penalty floor.

    The people who make these anti-worker policies are transparently greedy and callous. What’s more they are wrecking our economy. Stiglitz has done work which proves that greater inequality is a drag on economic activity.

  17. Smith
    October 11th, 2017 at 10:28 | #17

    @Ikonoclast

    They union appellants were always going to lose this case. They tried to make it a case about the merits of the FWC’s decision, but that was never going to work because the judge could only rule on whether the FWC followed the right legal process, which it did. For the union to say that the decision “represents a new low” for workers is fine rhetoric but fatuous.

    Fun fact: it’s the same judge who potted Andrew Bolt on 18C.

  18. I am and will always be Not Trampis
    October 11th, 2017 at 14:43 | #18

    @rog
    even the IMF realised their past sins rog!

  19. hc
    October 11th, 2017 at 19:58 | #19

    I am pleased Homer remains extant!

  20. John Goss
    October 12th, 2017 at 21:10 | #20

    I’m amazed at the number of ignorant rants on the Guardian site. The internet gives amazing opportunities for people to participate in debate about policy, but why do so many people rant rather than constructively engage. Am I part of the same humanity as the ignorant ranters, or are we separate sub-species. I really don’t understand them.

  21. may
    October 13th, 2017 at 15:15 | #21

    @John Goss

    you are not meant to understand.

    confusion trumps attempts at obtaining clarity, so lies can legitimately be called “alternative facts”.

    trumpery at the moment is a dog having it’s day.

    druh!

  22. Nicholas
    October 13th, 2017 at 18:33 | #22

    The article in The Guardian gives a good general overview of the changes needed by there are two major omissions: first, the need to drastically change the composition of economic output in favour of environmentally and socially healthy activities; and second, the massive psycho-social benefits of guaranteeing that people who want meaningful and valued paid work will get it on demand. As usual, JQ gives a perfunctory shout-out to Job Guarantee possibilities while devoting significant space to the inferior Universal Basic Income proposal.

  23. October 16th, 2017 at 14:05 | #23

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  24. October 18th, 2017 at 10:08 | #24

    I do not visit this blog as often as I did between 2004 & 2007, so I’m a little late to this party.

    The combination of a job guarantee and a universal basic income would free workers from dependence on employers. But this would only be feasible if society could ensure adequate production of crucial goods and services, without dependence on the wishes of big business.

    I was very heartened to see this remark when the article came out.

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