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.                                                                                                                                                                                             


Wednesday, August 13, 2014

For an Equal and Democratic Australia - A Program for the ALP


Leave a comment with your name underneath this post AND most importantly Join our Facebook Group to register your support
before National Conference in 2015!  PLS Read On!

join here at Facebook to Register your Support:

Dear Friends and Comrades;

For too long the ALP has failed to find sufficient inspiration on the ‘big picture’ social welfare, democratic and nation-building reforms it needs to implement in government as a genuine movement of democratic socialism and social democracy. 

Please find below a ‘minimum program’ I have developed in tandem with other ALP members in  the hope of influencing debate leading up to the 2015 ALP National Conference.  

Included are proposals on tax and welfare reform, social insurance, environmental reform, a ‘democratic mixed economy’ and much, much more.  Not every proposal could be included because of reasons of space.

This ‘Minimum Program’ will be published at the ALP Socialist Left Forum web-page as well; and there you can also comment and leave your name in support of it.

Please also propose motions in support of this program at your local branch, or your ALP student club.  Or you may belong to a ‘third party organisation’ (eg: a welfare organisation, charity, student union or other advocacy group).  Motions of support from these organisations are also welcome!  If you successfully pass a motion in favour of this document please leave a comment to that effect either here, or at the 'For and Equal and Democratic Australia' Facebook Page. 


With enough support and wide enough distribution we may influence debate on the ALP National Platform – to be decided upon in 2015.

If you are a delegate we would especially be interested – pls let us know.

But we will keep on campaigning after that also: to continue to build momentum for a genuinely progressive Federal Labor Government for 2016 and onwards.

Again: if you support the goals of this ‘minimum program’ it is crucial that you respond by ‘liking’ it at our Facebook group – and that support will be noted.


There are some changes from the earlier version so you may like to read through first

As supporters of this Program we endorse the incorporation of the following into the ALP Platform for 2015:

a)      ALP Core Mission: We believe that part of the ALP’s core mission in government is to promote a progressive accumulation of reforms  - for the purpose of improving fairness, democracy and equity; promotion of a robust civil society characterised by informed and active citizenship and civil rights and liberties (speech, association, assembly; continued universal and equal suffrage; and basic industrial liberties);  And preservation of the natural environment upon which human survival itself depends


b)      Supporting Human Rights: We support the ‘core mission’ of pursuing  ‘political’, ‘social’ and ‘economic’ citizenship;  That includes the defence of civil and democratic rights and liberties; the provision of social wage and welfare rights; and finally the pursuit of a ‘democratic mixed economy’ via a plurality of strategies –


c)      A Democratic Mixed Economy: We support variety of strategies for a ‘democratic mixed economy’ -  including a mixture of public and co-operative ownership and control  (including but not necessarily limited to public ownership of critical infrastructure and natural public monopolies), as well as mutualism, co-determination and other related strategies; and also crucially including ‘democratic collective capital formation ‘(that is democratically administered funds such as superannuation, public pension funds, wage earners or citizens’ funds etc)  (nb: ‘collective capital formation’ was a term used by Swedish social democrats) 


d)     Expansion of social expenditure: We are committed to seeing an incoming ALP Federal Government implement a progressive expansion of social investment and expenditure – incorporating the social wage, social welfare state, collective consumption and social insurance; and state-funded public infrastructure


e)      Expansion of Social Expenditure Detail:  Specifically we aspire for the ALP to increase sustained social expenditure in the realm of 2.5 per cent of GDP – or by approximately $40 billion in today’s terms (as of 2014)  – upon taking government, and more throughout the following terms. (plus even more still if the Australian economy is in danger of recession and stimulus is necessary) More specifically, we aspire to achieve a Federal tax to GDP ratio of 30% over several consecutive terms of Labor government, with a corresponding increase of social expenditure in diverse fields listed elsewhere in this statement.  (ie: see article ‘g’) We understand the ALP cannot provide real progress regarding social expenditure on a variety of fronts  without such measures.   On social welfare, we reject ‘giving with one hand’ for the needy only to ‘take away with the other’.


f)       Specific Revenue Measures: To fund these new commitments we support the following:


·         very significant strategic and equitable rescission of superannuation concessions

·         expansion of the Medicare Levy,

·         restoration of a robust Mining Super Profits Tax

·         the establishment of a progressively structured Aged Care Levy.  

·         progressively-structured tax reform elsewhere

Additional measures might include crack-downs on corporate tax avoidance, taxes on ‘super profits’ in areas like the banking sector, and a reduction in the rate of dividend imputation.. A Federal Land Tax should be considered but might infringe upon the revenue options for the States. We also ask the Party to consider a moderate increase in Company Tax and actions to ‘end the race to the bottom’ in corporate taxation which is leading to greater and greater ‘corporate welfare’ globally. Other taxation measures will be decided upon by any incoming Labor government – but the ‘bottom line’ is that the total measures implemented must provide for the aforementioned increases in social expenditure, and  very significantly add to rather than detract from the progressive nature of the overall tax and spending mix. 


g)      Specific social expenditure/infrastructure measures we support for implementation in the first term of an incoming Federal Labor Government include: 


·         Disability Insurance,


·         a progressively-funded National Aged Care Insurance Scheme providing a broad range of high quality aged care services for all those aged 65 and over with the need – and without forcing disadvantaged and working class families to sell or take equity against the family home to achieve the highest quality care; 


·         Robust and progressively applied increases in state school funding; including improvements in funding formulae as proposed in Gonski;  


·         provision of comprehensive Medicare Dental – with a wide array of dental services provided at minimal cost and promptly for pensioners and low income groups;


·         Completion of the National Broadband Network – publicly owned and with Fibre to the Home technology; as well as other public-funded and owned infrastructure in areas such as transport, communications, water and energy;


·         full implementation of ‘GP Super Clinics’;


·         greater public support and funding for pure and applied scientific research via the CSIRO.


·         A review of existing job network services; considering the possibility of re-consolidation of a single provider in the public sector; And regardless of this ensuring an emphasis on a more compassionate, patient and understanding approach to case management; especially considering the special needs of the long term unemployed, the under-employed, disability pensioners, those with differing skill types and levels; and for  older job-seekers, 


h)      Welfare Reform: We are committed to the ALP increasing welfare payments in real terms across the board upon re-taking government through more generous welfare formulae.  We reject the ‘blame the victim’ and ‘blame the vulnerable’ mentality apparently promoted by the Abbott government. 


i)        Retirement Age: We are committed to maintaining a retirement age of 65 instead of raising it to 67 or 70 as proposed by Abbott and previous Labor Governments.  Indeed we are also open to the possibility of reducing the retirement age below 65 into the future.  Specifically we support reducing the retirement age for those who have suffered physical debilitation as a consequence of demanding work. (eg: manual labourers)


j)        More Welfare Reform: Again in the sphere of welfare in particular:  we support an incoming ALP Federal Government  providing substantial positive incentives and support for pensioners – including disability and aged pensioners – to ‘return to work’ via community programs (eg: in aged care, helping provide company and care for the vulnerable – unless professionally deemed psychologically unsuited to such work)  But we do not support ‘negative incentives’ or labour conscription of any kind for these people.  We understand that many such people – for instance the disabled – require flexibility which existing labour markets do not provide.   Again: we support ‘positive incentives’ and ‘flexible work’ without loss of pensions.


k)      Industrial/labour rights: We support a legislated real increase in the minimum wage as well as pattern bargaining rights for unions.  And we support effective subsidies for some of the most exploited and underpaid workers (including in child care, cleaning, aged care and elsewhere)– whether through direct subsidies, tax concessions, enhanced social wage provision and other effective measures  We also support the industrial rights and liberties of workers; including a right to withdraw labour ‘in good faith’ (including political strike action), and including a right to secondary boycott when ‘in good faith’ in solidarity with ‘industrially weak’ workers


l)       Economic Democracy: We support the extension of democracy on the economic front, and for that purpose will support a stronger role for producers and consumers co-operatives in the Australian economy on both a large and a small scale.  Specifically we support very significant but initially-capped aid to co-operatives via cheap credit, tax concessions and free advice/economic counselling - with co-operative enterprise supported in a variety of spheres, including  credit unions, insurance, child care and aged care, manufacturing; as well as co-operative small and medium businesses. (for example in hospitality) 


m)    Curricula for ‘active/critical citizenship’: We are committed to reform of school curricula for the purposes of promoting ‘active and  critical citizenship’.  Without bias, the point of such reform would be to impart balanced and inclusive understandings of political values, movements and ideas, and social interests. We believe active and informed citizenship means a stronger pluralist democracy.


n)      On Higher Education:


·         We support restoration and expansion of tertiary education funding; including for universities and the TAFE sector; with an expansion of tertiary education placements on the basis of an understanding of education as a modern social right, and not an exclusive privilege. 


·         We also support the humanities and social sciences for the sake of effective pluralism in the Australian public sphere.  And we support provision for tertiary academics’ participation as ‘public intellectuals’ and not only on the basis of the bulk of published academic works.


·         Furthermore we support progressive reform of the HECS system: reversing any fee deregulation, and with real increases in the repayment threshold; and forgiveness of debts of those who have  a good reason for not being able to benefit from the prior education. (eg: because of disability)


·         Gender equality: Finally, here, we support equal participation, and on-average equal achievement - between men and women in higher education, and greater participation and opportunity for those from disadvantaged and working class families.


o)      Treaty: We are committed to beginning formal dialogue with representatives from the entire range of indigenous peoples with the aim of negotiating a Treaty.  We support an incoming ALP government initiating such a process in its first term.


p)      Environment: We are committed to increasing the proportion of renewable energy sources so as to achieve a real reduction of emissions even as the economy and population grow.  Specifically we aspire to reduce Australia’s greenhouse gas emissions by 25% below 2000 levels by 2025.  To this end we support large scale public investment in renewables, as well as generous subsidies for lower income households to acquire micro-renewable energy systems; and incentives for landlords to invest in micro-renewable energy. In further environmental reforms we are committed to sustainable land use and water management, achieving ‘world’s best practice’ in food production.


q)      Humanitarian Migration: We support a very significant expansion of Australia’s humanitarian migrant intake – increased very significantly in real and proportionate terms on top of what was proposed by the outgoing Rudd Labor government.  Additionally, we want for an ALP government to pursue diplomatic channels to encourage other prosperous countries in the region to also increase their humanitarian intake very significantly.  For asylum seekers we support humane onshore community-based processing.


r)       ABC and SBS:  We support continued funding of the ABC and SBS – and the pursuit of ‘participatory media’ principles and strategies through these channels.  We support a role for the ABC and SBS in pursuing an ‘authentic’ public sphere, and an inclusive pluralism. (with the exception of not providing a platform for the far right)  And we support representative ‘popular’ participation on the ABC and SBS boards of management.
s)    Public and Social Housing: We support very substantial investment in high quality public housing (facilitated through tied Federal grants to the States), and also social housing where it is more cost-effective - to increase supply, and hence also affordability.  (combined with the necessary public investment in local infrastructure in emerging suburbs)   Re-iterating from item ‘g’ –that means expansion of ( largely ‘non-clustered’) public housing stock to at least 10% of total  stock over several terms of Labor Government


t)       Local Government:We support a gradual re-working of the funding of local government – to ensure local government is funded in an increasingly progressive way, and is less dependent on ‘rates’ and ‘levies’ which do not take sufficient (or any) account of ‘capacity to pay’.  In that context we also support additional Federal funding for poorer municipalities to improve their capacity to invest in local infrastructure and services.


u)       Internal Reform: We support internal democratic reform of the ALP; including a direct role for union members in supporting particular policies and platform items; as well as direct election for ALP National Conference delegates; actual adherence to State and National Platforms; and a ‘mixed model’ for election of the Party Leader which may include rank and file, Parliamentary Labor and trade union components. In the same spirit we demand that both major factions (Left and Right) – and the Party more broadly - equally share the work of achieving the Affirmative Action goal of 40% women preselected for winnable seats.


v)      Public Sphere: We also support the establishment of a ‘progressive public sphere’ in this country, including ALP related forums, and policy and ideas conferences and publications which are inclusive, authentic, progressive, and which accommodate difficult debates.


w)      Strategic industry policy: We support an active industry policy aimed at the maintenance of ‘strategic industries’ with ‘strategic capacities’ in Australia; including through automotive production, shipping-construction and also defence industries.  (but not for export to aggressor nations) Said industries can also involve high wage, high skill labour. And there are a variety of potential models, including joint multi-stakeholder co-operative-state ventures – involving workers, regions and government.


x)     Multilateral Disarmament and Peace: At the same time we support a policy of realistic multilateral disarmament with the aim of freeing resources for purposes which meaningfully improve peoples’ material; quality of life 


y)      On Health Care:  In addition to the aforementioned implementation of comprehensive Medicare Dental and GP Super Clinics we also support the following:


·         Also increase investment in the Pharmaceutical Benefits Scheme to extend its coverage

·         Improve the rate of Bulk Billing

·         Tighten means tests for ‘Lifetime Health Cover’ in order to pay for the removal of penalties for low income individuals (including pensioners) who let their policies lapse;

·         Also extend Medicare to cover physio, optometry (including glasses or contact lenses), speech therapy, podiatry, psychology; provision of hearing aids where necessary; and also cosmetic surgery for those in extreme need (for instance as a consequence of physical injury)

·         Improvement of and substantial new investment in mental health services to ‘close the gap’ regarding the life expectancy of those with mental illness; as well as to improve productivity and quality of life


z)      A Comprehensive Bill of Modern Human Rights: Finally: We support a comprehensive ‘Bill of Rights’ in this country, supporting liberal and civic rights of suffrage, speech, assembly, association, faith, conscience. As well we support ‘social rights’ including education and health, a guaranteed minimum income; housing; access to communications and information technology; access to transport; access to fulfilling employment with a remission of exploitation;  social inclusion including opportunity for recreation and participatory citizenship; respect and human dignity.

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