Saturday, March 28, 2009

Protecting the most vulnerable: Pension Reform Now!

As we lurch deeper into economic crisis, the unemployed face a potential backlash as they are particularly vulnerable to the ravages of poverty. Pensioners, aged and disabled are also unfairly disadvantaged and there is an urgent need for reform “across the board”. In the run-up to the next federal budget, the poor and the vulnerable - and those with the decency to stand alongside them - need to mobilise for change.

This paper considers the plight of the most economically vulnerable of our community; and demands change now in the name of kindness and justice.

Aged pensioners are already - and justifiably - mobilising for a “living income”. The Council On The Ageing (COTA) in New South Wales, has called for single aged pension payments of 35 per cent of Male Average Total Weekly Earnings (MATWE).

Theoretically, this is to be linked to a new “Cost of Living in Retirement” benchmarkwhich would translate to $750.60 a fortnight for singles, and $1125.90 a fortnight for couples. For singles, this would amount to $19,515 a year for those living purely on the pension.

Alternatively, the Combined Pensioners and Superannuants Assocation (CPSA), has made the case for a more tightly targeted regime of assistance “to be paid to around 1.5 million pensioners with little or no additional income”.

Charmaine Crowe, speaking on behalf of the organisation, has indicated that these figures refer to “age, disability support pensioners and carers”. Ms Crowe, elaborating further, argued for an extra $80 per week for those single pensioners now on $280 a week. Such a move, providing a modest income to some of the most vulnerable pensioners, according to the CPSA, would cost $3.2 billion.

These proposals must be taken seriously, and should feature prominently in public debate, so that the vulnerable may be delivered from grinding poverty.

The CPSA has defined “low income” as $19,399 a year for singles: enough for a “modest” standard of living. Furthermore, the CPSA has noted that pensioners cannot earn over about $18,200 under the current means test regime; well short of the “modest living” standard of $19,399.

To view this in the appropriate context: such figures stand in contrast to “expenditure on [concessionary] taxation of superannuation” which for the last financial year was “almost $24 billion”. Expenditure on the Age Pension in the same financial year was $22.6 billion. Many superannuation concessions, here, apply to the wealthy.

In light of the hardship suffered by so many, the call for justice, and for governments with better priorities, must go out now.

Compassion and justice for the unemployed

The plight of so many pensioners, aged and carers, must be addressed as a matter of great urgency. And yet the plight of the unemployed is also of critical importance: their financial straits being all the more dire. According to the Brotherhood of St Laurence, Newstart (Australia’s unemployment pension) is $50 less than the Aged Pension every week.

There is a deeply-ingrained sentiment among some sections of the Australian community that the unemployed are “undeserving poor”. Populist rhetoric about “dole-bludging” abounds. Importantly, though, some commentators predict unemployment will rise by an additional 300,000 by mid-2010. As this human tragedy unfolds - now more than ever - we need to counter popular disdain for the unemployed. How can appalling myths and contempt for these people stand in the face of such widespread human misery?

Our response to the crisis ought to be one of social solidarity: a repudiation of the selfish core of the neo-liberal ideology.

The pressing need for reform arises with the backdrop of increases in the cost-of-living, and the moral imperative of providing dignity and quality of life for all.

Reform of pensions - the need for a clear formula

The Greens - in negotiations with Labor - until recently looked to have secured an increase of only $30 a week for single aged pensioners.

These proposals did not come anywhere near the modest standard proposed by the CPSA. Furthermore, they seem to be considered in isolation from other vulnerable pension groups.

The Federal Government’s “Pension Review”, meanwhile, looks set to suggest an increase of $35 a week for single aged pensioners. Recently Treasurer Wayne Swan seemed likely to accept this option, reportedly confirming to The Age that there will be an increase for pensioners.

When pressed, though, Mr Swan's office said that the government had not formally committed to its response to the pension review, and that no firm figure had been “set in stone” yet for any pension groups.

But even supposing there is an increase of $35 a week for pensions “across the board”, there remains the need for a formula that builds upon and extends the previous standard of 25 per cent of Male Total Average Weekly Earnings (MATWE). Without a new formula, immediate changes in pension rates cannot deliver security and certainty for pensioners of all kinds over the long term.

Australian Greens Senator, Rachel Siewert, has made a point of condemning current rates for the unemployed. For singles, the unemployment allowance, Newstart, is only $224.65 a week; for singles with children, it is $243 a week.

Considered on a fortnightly basis, the single unemployed person’s pension is $449.30: more than $100 a fortnight less than the appallingly inadequate single pension for the aged, carers and the disabled.

Some welfare groups, meanwhile, have been reticent in arguing for more ambitious agendas. This February, the Australian Council of Social Services (ACOSS) called on the government to increase the Newstart Allowance (the dole) by $30 a week - to $255.

Among these competing claims for reform, the key to fairness ought to be discerned through ongoing enquiry into the material needs of all pensioners: such as to provide - among other things - for the following:

  •  social connectedness, recreation and activity
  •  personal development - e.g. through community education and other avenues;
  •  access to high quality health care of choice;
  •  the means to enjoy a nutritious and varied diet;
  •  subsidised pharmaceuticals and free health care;
  •  fair and comprehensive allowances for utilities bills;
  •  transport expenses;
  •  adequate housing - and where applicable - home maintenance and gardening expenses;
  •  engagement through the communications and information technology of the day;
  •  allowance for contingencies - eg: repairing the fridge, the computer or the TV; and
  •  purchase of consumer goods which are in keeping with the accepted standards of the age.

Such standards must be considered essential for all pensioners and allowance recipients: the aged, unemployed, disabled and carers.

Pensioners should not be forced to choose only the worst quality cuts of meat; to use candles instead of electricity; to risk pneumonia because they cannot afford adequate heating; to be lost as to what to do - in the instance of a broken washing machine or fridge. Such austerity simply is not right.

And much more generous provisions should be made for students also: many whom struggle to apply themselves to their studies while working part-time; barely making ends meet. Surely students should be financially secure so as to be free to apply themselves properly to their studies. Not only is it in the interests of individual students: there is also a social benefit from - and investment in - their education.

If support is provided by the Greens, Nick Xenophon, and Family First, one possible response to the impending crisis could be a formulaic increase in the full single rate of all pensions - perhaps to 30 per cent of Male Average Total Weekly Earnings (MATWE). This would amount to $674.52 a fortnight. (an increase of just over $100 on top of the current singles rate of $562.10 a fortnight for aged pensioners). The full single pension rate, in such an instance, would be about $17,537 a year.

While such reform would still not meet the modest standard proposed by COTA and CPSA, the benefit for Newstart pensioners would be especially marked - in comparison with their current circumstances.

Here the point needs to be made - emphatically - that government should aim to eliminate unnecessary poverty and hardship. We need an honest and comprehensive enquiry as to how this may be achieved. The modest standards promoted by the CPSA, here, might comprise the desired outcome.

It is to be hoped that inclusive and comprehensive benchmarks will have been set by the government’s pension review: but there is the danger that standards will be understated for the benefit of the budget bottom line.

Perhaps the most vulnerable pensioners of all ought to be provided with the kind of tightly-targeted cash payments proposed by Charmaine Crowe of the CPSA. Here, we refer to those who are dependant upon their pensions, and without other sources of income.

Importantly in this equation, we must take into account reasonable activity tests on the part of the unemployed. And we should also consider the enormous amounts which are saved every year by the selfless efforts of carers.

These elements considered, what just argument can be made against granting these people a modest yet adequate living income? Just as critically though: the Greens, Family First and progressive voices from within the Labor government need to mobilise behind - and promote - such reform.

No one should be excluded from the struggle, or from the reform agendas of those politicians guided by compassion and justice. All those concerned should co-operate in the spirit of solidarity. “Let no one be left behind.”

by Tristan Ewins

Tuesday, March 24, 2009

Liberal compromise and the struggle for social justice

(Second in the Series)

As part of the struggle for ‘The Good Society', it is necessary to aim for the right economic, political and social mix.   In pursuit of this, one response is the pursuit of a “democratic mixed economy”: an economic template which pursues economic democracy, strategic planning and public ownership, and the harnessing of market forces.

The “Good Society”, however, is more than a question of how best to manage the economy. Underlining Australian democracy - and democracies the world over - is a presumed social contract of liberal democratic consensus.

The maintenance of social compromise, here, is critical. To begin with, such a compromise can provide the framework for cultural and political pluralism: essential for modern multicultural societies.

However, the rationale for social compromise goes deeper still:

All social actors have a shared interest in avoiding a “vacuum” which can be filled by a desperate and brutal struggle to re-impose a social order.

Such scenarios developed during the 1789-1799 Revolution in France, and also following the 1917 Russian Revolution. After the experience of the Jacobins in France, the desperate efforts of revolutionary governments to hold power has been termed as “Jacobinism”.

Whatever the ideals of the revolutionaries in such struggles, ordinary people in their hundreds of thousands perished in the Terror and the wars which ensued.

Of course, counter-revolutionary terror can be just as horrible, or worse, than revolutionary terror. But surely, if there is an alternative - and less brutal - road to change, then we should use it. So, in avoiding such terror, the social compromise of liberal democracy commands our attention and respect.

The composition of any “liberal democratic consensus” or “social compromise”, however, is strongly contested.

Without social rights and social democracy, such a consensus is simply not enough. The liberal democratic consensus underlining the United States, for instance, is not necessarily a comfort to its poor and vulnerable, including the unemployed, the exploited and the homeless.

And sometimes - such as with the outbreak of World War I in 1914 - the acquiescence of elected governments in the face of such barbarism and horror - shatters any illusion or semblance of legitimacy.

Ultimately, even where a democratic government carries a mandate, pursuit of justice demands that workers, citizens, minorities - engage in struggle for their liberal and social rights (and in the case of unjust wars - for diplomacy and peace).

Liberal democratic compromise might ensure the right of citizens and workers to mobilise and argue in the “public sphere”, and to exercise the right of universal suffrage.

But there are instances, also, when people need to push the limits of liberal democratic social compromise. Strategies of civil disobedience: rallies, occupations, political strike action, the holding of picket lines - can well be justified.

And while terror and brutalisation must be avoided, strategies of civil disobedience can lead to physical confrontation between ordinary people and the state power.

Such circumstances can comprise a delicate “balancing out”: one where physical confrontation and conflict is limited by mutual restraint. Failure to exercise restraint, though, can result in a crisis of legitimacy, descent into repression, and escalation.

Under circumstances of liberal democratic consensus, the state itself - to an extent - also comes to embody the social contradictions it is called upon to mediate.

Employees of the state involved in the provision of social services and welfare might develop an interest in the continuation or improvement of services in their field. Teachers, for instance, have not only been involved in struggles for wage justice: they have been at the heart of struggles for a more progressive curriculum.

And it is not unimaginable to suppose that some police - who themselves have experienced industrial struggles - might under some circumstances be reluctant to break the picket lines of other workers.

Furthermore, strategies of “dual power” may involve the creation of alternative democratic institutions - community media, mutual and building societies, non-exploitative co-operative enterprise - beyond the internal contradictions of the state power.

A more radical example might involve the establishment of “community development” or “citizens’ investment” funds from below - through industrial action.

“The Good Society”, here, is one which is open to change: through the dynamic of class struggle, as well as the struggles by minorities and interest groups for recognition, and socio-economic justice.

But such a society is also one whose liberal foundations allow for civil disobedience, while acting as a bulwark against the disintegration of social order, violent desperation: even terror.

In conclusion, “The Good Society” is one marked by a liberal and social democratic consensus. It is a society characterised by a “mixed democratic economy” whose aim it is to provide for the complex tapestry of human need.

So complex a tapestry refers to material, social and cultural need; and to spiritual and secular aspiration for hope, kindness, justice, love, peace and meaning. The “Good Society” aims for a market which is democratic, innovative, responsive, fair and participatory. Such a social project aims beyond the crude logic of share value maximisation.

“The Good Society”, by this reckoning, is one where each contributes according to their ability, and each receives according to their need.

The stability and endurance of liberal and social democratic consensus and compromise is also central to the pursuit of a good and just social order.

Here, the best defence for liberal, democratic and social rights is a culture of civic mobilisation and activism, and of critical inquiry.

Reference to a culture of “civic mobilisation” includes the strength of NGOs (non-government organisations), social movements, religious organisations and movements, trade unions, and political parties.

“Civic mobilisation” also refers to the capacity of such organisations and movements to build counter-hegemonic strategies to challenge the social order, and - where appropriate - to take collective action - including civil disobedience.

Such a culture is best sustained through a robust and participatory “public sphere”: in participatory electronic media, journals and newspapers, public assemblies and social forums.

The foundations of “active/critical” citizenship, here, are best laid early: in the process of public education, and in the development of curricula and teaching strategies. The emphasis, here, ought be upon value formation, ideological literacy, civic mobilisation (including public sphere participation), and critical appreciation of issues through engagement in the Humanities and Social Sciences.

Hopefully this task of imagining of just what constitutes the “Good Society” might compromise a starting point for real efforts to improve the world.

After all, the “point” is not just to talk about the world - but to change it.

By Tristan Ewins

Thursday, March 19, 2009

Imagining ‘The Good Society’

Imagining ‘The Good Society’     (first in a two part series)

What makes a “Good Society”? Should such a thing be measured in purely material terms? What of free time; of family and friends; of room to develop ourselves as human beings? How best to pursue such aims as human liberty, social justice, democracy, as well as compassion and provision for the needs of the poor and vulnerable?

How to negotiate conflict between the liberal right of individuals to invest their wealth as they choose, and the imperative to alleviate or eliminate the exploitation of labour?

And how best to balance conflicting modes of social organisation: to allow for spontaneity, as well as instances of planning, and the proper functioning of markets where appropriate?

This paper examines the question of a “mixed democratic economy”; of getting the right mix of planning, public and democratic ownership, and market forces.

Using urban planning as a starting point, it is possible to develop arguments surrounding neo-liberalism, the mixed economy and centralised command economics.

A good city mixes diversity, spontaneity and the play of market forces, as well as strategic planning to provide for a truly “livable” urban environment. Too much planning renders a city “sterile”, uniform and predictable. And with not enough planning (including social justice measures) cities become unworkable and unlivable.

It is too common for sprawling urban metropolises to span out of control before transport networks and regional urban “hubs” become interconnected in a workable and orderly fashion. Suburbs become disconnected from the inner-city and from each other: sprawl outpaces the development of infrastructure, services and markets. And affluent suburbs rest upon “underworlds” of poverty, deprivation and exploitation.

At times there is a need for stability and predictability. And it is only with intervention and planning that cities might become truly “livable” for all. Such intervention might, for instance, include:

  • transport networks and hubs;
  • public health, public housing, aged care, child care and education facilities;
  • devoted civic space including public malls, squares, sports grounds and gardens: for civic activism, social life and recreation; and
  • workable planning for commercial, business, residential and social zoning - including - where appropriate - urban consolidation, and the interposition of commercial and business zoning with dedicated space for free public and community use.

The need to mix public and community space with commercial space is crucial. Modern consumer culture eclipses and suffocates public life: limiting it to consumption, and not providing for an active civil society and public sphere.

Upon this urban environment, though, a market economy can thrive in a state of constant evolution and responsiveness to the “flux” of consumer demand. A dynamic of innovation, diversity and change can be provided by markets - and contribute to the “livability” of cities, and the diverse needs of communities.

This same logic, on the whole, holds true also for nation-states - as well as for cities.

There is a critical role for markets and the dynamics they provide: but stability and social justice can only be secured with the simultaneous and planned provision of social and economic infrastructure, labour market regulation, and welfare.

Competitive markets spur innovation, and can provide the logic and impetus for improving efficiency and productivity.

On the other hand - competitive labour markets - without the counter-balance of strong unions, labour market regulation and industry-wide bargaining - can lead to a “race to the bottom” in wages and conditions.

Under capitalism, also, consumption and growth become ends in themselves.

Whereas it can be preferable to enjoy and make use of free time, many businesses prefer longer hours. A social order more concerned with “quality of life” and “human need” could well accommodate shorter working hours, promoting greater flexibility and allowing for personal development, as well as social and family life.

And such an order might also provide support and recognition for the “domestic economy” and the contributions of volunteers - whose efforts go unrecognised by the “market”.

Furthermore: capitalism is prone to “market failure”. Sometimes markets are wasteful. And sometimes markets are unjust.

“Corrections” to overproduction see the pain of these falling on investors and labour. Perhaps, in part, this is the price we pay for the benefits of competition: especially responsive and innovative markets.

That said, in some cases competitive markets can lead to radically increased cost structures for which consumers must ultimately pay (for instance: areas properly held by “natural public monopoly”). One such example is the communications infrastructure in Australia. So-called “reforms” have seen the privatisation of one-time public telecommunications monopoly, Telstra, and the provision of two layers of mobile phone communications infrastructure.

The cost for “competition” in communications infrastructure is a radical increase in the cost structures of the industry.

Recent plans by the Rudd Labor Government also threaten the creation of a “part-private” monopoly in Australia’s proposed fibre-optic network. At first glance, the scenario may seem to be one of “Catch 22”: consumers might be fleeced by private monopoly, or they may be “slugged” as a consequence of radically expanded cost structures in the provision of infrastructure.

The answer, though: one which neo-liberal ideologues refuse to face; is that there remain areas of activity best suited - for all concerned - to “natural public monopoly”.

In a market economy, provision of services does not necessarily relate directly to the complex tapestry of human need. An example of this, for instance, is medical services - where providers, including medical practitioners and pharmaceutical companies, can have the motivation to over-prescribe services.

Further examples include the withdrawal or under-provision of banking and telecommunications infrastructure and services in rural and regional Australia following sweeping privatisation. Added to this is discrimination against the poor by private banks - with excessive fees.

When the maximisation of share value informs investment, goods and services are provided on this basis - and the needs of citizens and minorities are lost in the drive for profit.

Also, without local content laws for television “market forces” would leave Australia as a cultural wasteland. Indeed, there are strong arguments for further state intervention to support Australia drama, music, theatre, films, art and other forms of cultural expression: to ensure that Australian cultural identity is not eclipsed.

And sometimes abuse of markets can give rise to corruption, exploitation of consumers, and nepotism.

“Public Private Partnerships”, where social infrastructure such as roads, public buildings, schools, are provided by and held by the private sector long-term, can result in the fleecing of citizens in their capacity as consumers and taxpayers.

So while there are sometimes significant benefits to competitive markets, there are strong arguments for co-operative enterprise as well.

Co-operation, including strategic and public monopoly can provide economies of scale and pooled research and development. Competitive and collaborative efforts could imaginably give rise to landmark developments in such crucial areas as pharmaceutical and medical research.

And without the profit motive (i.e. instead spurred only by public interest) there is no rationale for “built in obsolescence”, “staggered development” and “phased” release of technology in order to maximise sales.

Finally: strategic but strong state intervention could give rise to revolutionary economic developments that otherwise could be stymied as a consequence of vested interest.

Surely state intervention could herald in a state of “critical mass” in the development and provision of renewable energy. “Clean coal” is mainly hypothetical and unproven, but powerful vested interests in the energy industry demand preference regardless of science or cost.

As the world confronts the spectre of “peak oil”, for example, who is going to provide and maintain the new infrastructure and new car models as drivers look increasingly to electric and hybrid vehicles?

Deep, structural changes will require “transitional” arrangements and public subsidies to maintain transport infrastructure such as petrol stations as a competitive market simply ceases to be profitable.

The “market” does not always supply a “spontaneous” and “organic” solution to every economic challenge. Such scenarios can warrant more direct public intervention.

A “mixed democratic economy” might provide the right mix between planning and market forces, placing human need ahead of the imperative of share value maximisation.

The “democratic” component, here, ought not to be under played either. Citizens and workers should have due influence over their own productive lives, and over the economic imperatives of the nation.

Strategies for economic democracy and justice could include:

  • subsidies, low interest loans, support and tax breaks for co-operative enterprise, mutual societies and similar bodies;
  • renewed emphasis on the public sector - managed by democratic government: including public infrastructure such as transport services, water, public housing, communications and energy; health, education, community child care services, and aged care; dedicated pure and applied scientific research; competitive GBEs (Government Business Enterprises) - which work to counter collusion and oligopoly - in fields such as banking and insurance;
  • further GBEs could imaginably be established in critical industries such as mining - under the assumption that such pubic enterprise can perform as well if not better than private enterprise - especially when operating within a competitive global and domestic market (and thus subject to the corrective rigors of market forces). Note: Regardless of this - a public monopoly is preferable to a private monopoly: such enterprise is accountable to the public and is a bulwark against exploitation - profits are returned to “the people” and can, in turn, subsidise public services, welfare and infrastructure.
  • Provision of democratic channels for collective capital formation and management: “citizens investment” or “community development” funds - provided for through a levy upon the profits of businesses, with revenue flowing to the broader welfare system and social wage … Without the imperative of share value maximisation, such funds would be managed on the basis of real social utility and need.

Importantly, the opportunity of citizens to invest their savings is a genuine liberal right. Regardless, though: even pension funds might technically be in a position of expropriating surplus value from workers.

Exploitation as understood by Marx, thus, is in some ways a “Gordian knot” which cannot be severed - or eliminated entirely.

On the other hand, progressive taxation, redistribution of wealth, economic democracy and collective capital mobilisation, maintenance of a strong and strategic public sector - including a progressive welfare state and social wage - could well displace the traditional bourgeoisie in its position as “ruling class”: perceived and real.

In its place it is to be hoped that ordinary citizens (including pensioners, the unemployed, students - i.e.: not just workers) will organise so as to “win the battle of democracy” and secure sweeping economic, political and social change. The right economic and democratic mix is essential for us all: and is an essential part both of imagining - and achieving - “The Good Society”.

by Tristan Ewins

Friday, March 13, 2009

Fighting the recession - The rights of the needy

Debating the Stimulus

This February, Kevin Rudd’s Labor Government passed a formidable stimulus package through the nation’s parliament amounting to $42 billion. Included was money for social housing, school infrastructure, and home insulation. Without going into detail, this stimulus provides a good start in minimising the global recession’s domestic impact for Australia.

Perhaps, though, it does not go far enough. As veteran economics journalist Ken Davidson explains:

The collapse in private-sector demand must be replaced by a corresponding increase in government spending to avoid lower economic growth and higher unemployment.

On this basis, the $42 billion package introduced to the Parliament by Treasurer Wayne Swan was about half that necessary to sustain non-inflationary growth without rising unemployment over the next four years.

Finance Minister, Lindsay Tanner, meanwhile, has argued for a cap on new spending of “2 per cent of GDP” (some what in excess of $20 billion).

Considering the substantial share that welfare reform should comprise in the upcoming Budget, surely there is scope to provide for other initiatives beyond this “self-imposed cap” (many of which, in themselves, would contribute to economic stimulus.)

Options include building the National Broadband Network, modernisation of public transport, more ambitious social housing programs, and essential infrastructure in areas such as water and renewable energy.

Also, regardless of abstract economic principles, there are many other areas which are central to our real quality of life. Such areas include: more hospital beds, quality of aged care, better nurse to patient ratios, universal provision of health care including dental health (socialised-medicine and not-for-profit community providers), support of public, participatory and community broadcasting and media; provision for community groups, education programs and public libraries.

Of course, some of these might not be able to be realised quickly enough to provide the immediate stimulus we need. But considering the possible depth and length of the recession, such measures could nevertheless be integral to our response. Failure to invest in infrastructure and education now will impact negatively on productivity and capacity into the future and will feed into a “recessionary spiral”.

A global crisis

Around the world governments are facing the reality of financial and economic collapse. Critically, reflating unsustainable speculative “bubbles” - whether in housing or elsewhere - is not the answer.

In a ground-breaking essay on what he calls the new “global social democratic consensus”, Walden Bello supposes the financial meltdown has critically discredited the neo-liberal ideology. For years, the systematic stigmatisation of socialism and social democracy has been so entrenched that even the most progressive voices had to compromise with the neo-liberal ideology in order to be taken seriously. But today Bello believes there is a “fluidity” unknown for the past half century or more. Bello supposes a new global economic order, promoting equity, as well as environmental and social conditions upon trade. And yet he also believes that Global Social Democracy (GSD) needs to orient itself towards further democratisation of economic decision-making.

But Bello is uncertain what the ultimate consequences here will be. He queries:

[Will] government ownership, intervention, and control be exercised simply to stabilise capitalism, after which control will be given back to the corporate elites?

Fred Mosely, writing for the American economics journal Dollars and Sense supposes a role for “tax-payer friendly bank nationalisation”. Socialised banks could then be run “according to public policy objectives” rather than private profit maximisation. In this he includes affordable housing and green energy.

Furthermore: unbound from the short term imperative of maximising profit, Mosely holds that nationalised banks would invest responsibly - rather than feeding speculative debt-induced bubbles.

An Australian response could be to promote a “mixed” banking sector. Such a sector could include a public banking enterprise which would provide real competition along the lines of the former Commonwealth Bank. Such developments might also mitigate tendencies towards oligopoly and collusion. And profits could be re-invested to benefit customers and workers.

Furthermore, deep tax breaks and assistance could be provided for democratic credit unions. Such enterprises could provide substantial relief from fees for members. In tandem with socialised banking, over time, they could come to cover a dominant portion of the overall sector.

Despite the current crisis, though, in a new economy there will still be a need for financial markets: to “mobilise savings”, “allocate capital” and “manage risk”.

But risk, here, needs to be transferred to those most able to afford it.

In the United States, vulnerable poor and working class American families were the victims of predatory and irresponsible lending practices.

Where “the market” did not provide for such people, this is no fair rationale for exclusion. Instead, social housing ought to have “filled the gap” which was not bridged by the markets. In Australia, such an increase in supply would also have provided a counterbalance to any speculative property bubble.

In Australia, and elsewhere, housing markets were characterised by over-valuations which were destined to end in bust. As Australian interest rates rose, scores of mortgagees experienced extreme stress in servicing their debts. This also impacted upon consumer confidence.

On top of the current catastrophe, Walden Bello supposes there are about 4 million US “sub-prime” mortgages that will go into default over the next two years. These are the people the Obama-led US government must assist as a matter of moral urgency.

Regardless of any legitimate role, it is clear that the finance sector has become “decoupled” from the “real economy” and has a largely wasteful, parasitical function.

As Ramas Vasudevan notes in Dollars and Sense: “The profits of the financial sector” (in the US) grew from “14 per cent of total corporate profits in 1981 [to] nearly 50 per cent” in 2001-02. This growth of the finance sector was also matched by an explosion of debt, in private households, businesses, and in government, which “rose from about 1.6 times the United States’ GDP in 1973 to over 3.5 times GDP by 2007”.

Debt finance is a legitimate means of building the kind of infrastructure which can support increased productivity, capacity, and sustainable improvements in material living standards.

But where debt accumulates unsustainably, or where “bubbles” promote an “on paper” economy without an anchor in real production, the system ceases to be viable.

Considered only on a private level (the sum of household and business debt - including corporate bonds), the ratio of Australian debt to GDP - according to Steve Keen - has been building for many years - to peak, at the time of publication,  at 177 per cent.

“Corrections” are inevitably painful - and the current meltdown demands a far more robust and direct role for government in minimising impact of cyclical economic crises in future.

Private pension funds such as superannuation, meanwhile, carry too much risk for ordinary retirees: risk could be better spread and managed through a public system.

Responses to the global crisis

There are other problems which go to the heart of the capitalist world economy. One such failing inherent in the capitalist system is what Marxists call “over-accumulation”.

As Bello explains it, capitalism develops “tremendous productive capacity that outruns the population’s capacity to consume owing to income inequalities that limit popular purchasing power”.

Again: this manifests as a “recessionary correction”, which neo-liberal purists suppose is a necessary, and in fact desirable, process.

Even in the face of recession, though, there are many - such as the wealthy and those with secure employment - who will not bear the brunt of the crisis.

Further, such is our productive capacity, even accepting that unemployment will rise, we have the means to act in social solidarity with each other.

Because those on lower incomes generally spend a greater proportion of their income on domestic consumption, tax and welfare reform in their favour can provide the economy with greater buoyancy, while also providing for human need.

There is no need for Australians to face the kind of destitution widespread in the Great Depression of the 20th century. It is a matter of whether or not government has the political will to do what is right.

It is also a matter of whether or not the people will stand up for justice.

An Australian response

Taking the scenario of unemployment rising by an additional 300,000 by mid-2010, it is worth asking: how can such structural impositions on the Federal budget be sustained without tax reform?

Again: Tanner’s “2 per cent cap” on additional expenditure - taken as a ceiling of $20 billion - is probably insufficient if taken in addition to the cost of welfare reform. And given the long-term benefits of investment in education and infrastructure, there are solid arguments in favour of greater expenditure here and now.

While Labor might hold off on increasing taxes now - to maximise the stimulus - in the long run the Government must act. Tax reform is necessary to sustain the Australian welfare state and to provide critical services and infrastructure, which are key to our economic and human needs.

A global effort - a flawed system

In both the short term and long term - global co-operation is required to breathe new life into consumer demand, global liquidity and investor confidence.

Standards need be set to ensure that events such as the US “sub-prime” disaster are not repeated. Prudential regulation and a substantial role for credit unions and public banking can assist here.

And globally - widespread nationalisation must provide public benefit in proportion to the public cost of “bailout” commitments. A democratic and mixed banking sector should emerge as one positive and lasting legacy.

Finally, the stimulus effort must be co-ordinated as well as global. This must include investment for the future - in the kind of social programs and infrastructure which will provide the foundation for future growth. With future growth, debt incurred from such interventions can be serviced sustainably.

Recovery, though, could be a long and painful process - perhaps lasting years. Such is the scale of the catastrophe, and of the necessary process of adjustment: there is no easy way out.

Capitalism remains a flawed system: a system characterised by exploitation, cyclical crises of over-accumulation and waste; crises of over-production, and concentration of economic power in the hands of a few.

“Free trade” is extolled as a virtue: and yet workers are denied what are among the most basic rights of all: to withdraw their own labour. It is a system where human - and environmental - need is consistently given a “back seat” in favour of accumulation as a “principle in itself”.

And yet these flaws need be considered alongside the right for ordinary people to invest the proceeds of their labours as they will and the innovations which spring from competition.

As Labor considers its next course of action leading to the upcoming Federal Budget, commentators and politicians should not be reticent in condemning the deep flaws of neo-liberal capitalism, and in suggesting progressive alternatives.

But such is the power of the dominant ideology, most cannot imagine a future without “capitalism”, whatever they may conceive it to be.

Nevertheless, we need alternatives which - as Habermas might explain it - place the “life-world” of human and environmental needs ahead of abstracted economic “systems”; which minimise exploitation by investing economic and political power in the hands of ordinary people; and which avoid destructive and parasitical speculative practices.

Whether we call it “Global Social Democracy”, “democratic socialism”, or something else - the need for change is immediate. The time for change is now.

by Tristan Ewins

Monday, March 9, 2009

Re-invigorating Civics and Citizenship Education

 nb:  This article was originally published in Agora, the journal of the History Teachers Association of Victoria (HTAV) - in 2006.  Since them it has been slightly edited.

Civics and Citizenship education has come a long way since Paul Keating instigated the formation of a ‘Civics Expert Group (CEG) in 1994 to build a non-partisan program for citizenship education in Australia in response to a perceived ‘civic deficit’ betraying negligible levels of knowledge concerning Australian political processes and institutions.  
Whereas the original blueprint for civics education espoused by the Howard Conservative government may seem somewhat conservative and ‘uncritically celebratory’, the ‘Discovering Democracy’ initiative, incorporating a wide range of curricular material,  has put civics and citizenship ‘on the map’ in schools nationwide.   

The momentum gathered through the provision of the ‘Discovering Democracy’ material has also opened the necessary space for state Labor governments to customize their own approaches to civics and citizenship education.   

In Victoria, for instance, the Victorian Essential Learning Standards (VELS) curriculum framework focuses strongly on civics and citizenship competencies through six ‘levels’ with this field being established as a key ‘domain’ under the new system.  

Under the VELS system the Civics and Citizenship agenda embraces the study of “human rights and social justice issues at local, national and global levels” providing a “vehicle for students to challenge their own and others’ views about Australian society and to formally participate in and practice activities and behaviours which involve democratic decision-making”.  

It would seem proponents of civics and citizenship education agenda have reason to be well pleased, but nevertheless there remains a strong case for further reform.

Civics and citizenship education is one of the most important fields of education available to secondary students.  Concerning ‘civic knowledge’ of institutions and processes, as well as knowledge of contemporary social issues challenging Australian and international citizens, it enables students to understand these and thus better participate as active citizens, enhancing a democracy wracked by apathy and demobilization.

Unfortunately, however, even since the landmark delivery of the ‘Discovering Democracy’ curriculum kit to Australian schools, civics and citizenship education has nevertheless struggled to find space in a ‘crowded curriculum’ – especially in the latter years. (11-12)   Also, the ‘institutions and processes’ model largely incorporated in the ‘Discovering Democracy’ kit is in of itself insufficient to meet a broader and more progressive civics and citizenship agenda.

What is more, the lack of any compulsory civics and citizenship content in the latter years has left in question the seriousness with which civics and citizenship education is regarded by government even despite the significant achievements of the ‘Discovering Democracy’ initiative.

In Victoria, and nationwide, it is time to re-evaluate the importance of the civics and citizenship education agenda.   Civics and citizenship education requires ‘streams’ of subjects (humanities and social sciences)  dedicated to the realization of its aims as well as the establishment of compulsory civics and citizenship studies through Studies of Society and Environment and/or History in years 7-10.  Already, in NSW, Studies and Society and Environment has been mandated as a compulsory subject in year 10.

We need, now, to replicate this move and progress further, allowing for compulsory study of SOSE and/or History in years 7-10 nationwide.  

Additionally, civics and citizenship competencies need to be embedded in compulsory humanities and social sciences ‘streams of subjects’ for years 11 and 12, one of which must be chosen for any given year.   The provision of ‘streams’ of humanities and social science subjects, including politics, a proposed ‘political economy’ subject, history and sociology, what is more, provides a level of choice unavailable in previous ‘experiments’ such as the ill-fated introduction of ‘Australian Studies’ by the short-lived Kirner Victorian Labor government.  It is this element of choice and diversity that ensures the viability of such an amended curriculum.
Unfortunately, as things currently stand, SOSE attempts far too much with too little time available, combining the study of history, geography and society.  This effectively ‘crowds out’ the critical study of society.  Restructuring the SOSE curriculum to provide further political, historical and sociological content is thus also a central component of any programme to revitalize civics and citizenship education, preferably including separation of the broader SOSE agenda from geography.

Ideally, a restructured SOSE curriculum, as well as revitalised humanities and social science curricula in years 11 and 12, ought to give pride of place to the following objectives:

  • critical analysis of how identity and social relations are constructed and contested on the basis of class, ‘race’, ethnicity, nationality, gender and religion, as well as a consideration of whether or not said social relations are just or unjust
  • critical analysis of how citizens organize to pursue their interests and ideals both through conventional political forums and ‘from below’.  (including lobby groups, unions, political parties, social movements and media)   Such an analysis would range from traditional lobbying methods such as rallies, petitions and letter writing to more radical measures such as revolution, civil disobedience, occupations, direct action and general strikes, posing the question of what kind of action is and is not legitimate given various social circumstances, including the prevalent ‘social contract’, social stratification, and the ‘rule of law’.   Specific contemporary examples for study could include the anti-monarchist rebellion in Nepal and the revolt against ‘labour market reform’ in France.   Historic examples could include the French and Russian revolutions – already included in the Victorian Certificate of Education ‘Revolutions’ history unit.
  • critical analysis of Australian and international political institutions and processes including the relativisation of dominant political narratives and incorporating a critical assessment of international political, cultural and economic social relations
  • consideration of political ideologies and national and international social and political movements: their values, history and objectives – with the aim of engendering ‘ideological literacy’ of such traditions as conservatism, liberalism and socialism – and how such traditions can be practiced or even blended in the current day
  • a critical consideration of political economy, including consideration of the values that inform a range of economic theories and perspectives
  • development of an orientation towards active citizenship, including individual and collective social action, as well as independent value formation informed by ideological literacy and understandings of history, processes, identities, social relationships and social movements.  Students would be encouraged to involve themselves in active citizenship, examples of which could include writing articles for a student paper, taking part in student representation, writing a ‘letter to the editor’ of a paper or magazine, engaging in internet forums on social issues, or joining a political party or social movement and involving oneself in its activities.  Additional studies could include, for instance, an evaluation of relatively low levels of party political participation in Australia compared with countries such as Sweden, analyzing the causes of civic demobilization and disenfranchisement, and considering means to revivify democratic collective decision making processes.
  • critical appreciation of ‘civic megatrends’ such as multiculturalism and globalization, including the deconstruction of such trends –  eg: is ‘globalisation’ really a new phenomena, how much does it truly constrain national government, and can any such constraints be overcome through internationalism?  OR – does multiculturalism imply cultural relativism and can cultural relativism be justified?

Obviously the content thus considered would need to be channeled through in a highly simplified form in the early years, but in years 11 and 12, during a period of significant intellectual maturation, there would be great potential for empowerment through the above agenda.

The above model for civics and citizenship education could best be referred to as the ‘active/critical’ model – often referred to by educators as a ‘maximalist’ model.   Rather than simply seeking to ‘hammer home’ selected tid-bits of civic knowledge about political processes and leading historical personalities, such an approach encourages students to engage in political processes and struggles, and to relativise hegemonic processes, movements and ideologies in the process of independently forming their own social and political values and identities.   

Despite the probable conservative charge of ‘bias’ it ought be reinforced here that such a curriculum would seek to encourage critical thinking with regard to all ideologies, allowing students to independently form their own values systems regardless of whether or not this involved ultimately adopting conservative, liberal, socialist or other positions and personas.  

The model thus considered would also expand the definition of the ‘civic deficit’ considered most commonly in civics and citizenship education debates beyond the commonly accepted domain of institutions and processes.  Rather it would seek to critically interrogate dominant social practices, assumptions and relations as well as those practices and relations that would seek to challenge the dominant ideology.  Lack of knowledge of social practices, assumptions and relations would in of itself be considered a kind of ‘deficit’ in dire need of address.  The aim, here, is to create ‘citizens of social vision’ whose broad and critical knowledge of ideologies, processes, institutions, practices, social relations and social assumptions, is sufficient to provide for truly informed and active participation in civic life.

Ideally, the Federal government ought revitalize the ‘Discovering Democracy’ initiative by providing additional material with the aim of supporting the ‘critical/active’ agenda.   What is more, additional curricular material ought also be provided by state governments with the aim of enhancing teacher choice in years 7-10 and deepening civics and citizenship content in years 11-12.   Mandating of the ‘active/critical’ model of civics and citizenship education in years 7-12 needs also to be achieved by state governments nationwide. 

Finally, there is no need to limit civics and citizenship education to the primary and secondary years of education.  Through progressive subsidization of the humanities and social sciences at a tertiary level, powers of critical thought and analysis could be encouraged through optional ‘streams of subjects’ throughout the course of any degree, enabling such content to complement the mainstream content of any given degree.  Such a move could be achieved through government subsidies and HECS discounts and would provide a significant boost for the humanities and social sciences, and thus for the widespread critical understanding of history, literature, culture and society.

Ultimately, it is a question of what value we put upon the values and social engagement that must be present for the success of any robust democracy.  Do we want to educate purely for vocation or do we want to educate for the ‘whole person’, including the rights and responsibilities that underpin citizenship, even including the capacity to interrogate the very category of citizenship itself?   Increasingly, the consensus amongst educators is that civics and citizenship must move to centre stage in the curricula of education systems nationwide.  

Ideally the options in this paper ought be open to cross-partisan consensus as all political parties ought support the endowing of aptitudes necessary for critical thought and informed citizenship.   With Labor governments the country-over - we should be taking advantage of the situation to implement a ‘critical/active’ agenda nationwide.

 by Tristan Ewins

Tristan Ewins is a qualified teacher, freelance writer and grassroots member of the Australian Labor Party


Monday, March 2, 2009

A Revolution in the Transport Economy

If you ask most Australians today what worries them most, chances are they will respond that the ever-spiralling cost-of-living is of prime concern. The rising cost of petrol, in particular, is one factor which flows on through the transport sector to impact upon the broader economy.

This tendency - felt worldwide - is worsened by tension in the Persian Gulf, and looming confrontation with Iran. In addition, there is the impact of rapidly developing economies like China and their insatiable thirst for oil.

Many commentators believe if we have not already reached “Peak Oil” we will do so soon. And as demand increasingly outstrips supply the crisis is set to worsen.

The aim of this paper is to consider the transport sector crisis: from the need for green and efficient alternatives, to the imperative of providing transitional transport supply infrastructure - as part of a “transport revolution”.

Transport economy in crisis

Considering the skyrocketing price of oil, it might reasonably be supposed that there is already sufficient incentive for governments worldwide to take decisive action and restructure their transport economies in favour of cost-effective and renewable solutions.

The Emissions Trading Scheme proposed by the Rudd Government - as applied to petrol - looked set to increase prices by as much as 10c a litre.

In response to criticism, the government signalled that it would be cutting petrol excise for three years so as to make the overall effect revenue neutral.

There is still, though, a strong case to transition beyond the kind of oil dependence we now have. Both for the environment and for sheer efficiency there is a case to be put for the public transport alternative - and for investment in electric and hybrid car technology.

Debate is now crucial: to spur Australian governments on to embrace reform and to restructure transport economies in favour of cost-effective, sustainable and renewable solutions.

The case for public transport

Public transport is a far more energy-efficient and is a less carbon-intensive alternative to petrol-driven vehicles. The Public Transport Users Association (PTUA) has surveyed the energy efficiency of public versus private transport. To break the figures down: an average petrol-run car will cost about 3.7 mega-joules (MJ) per passenger-kilometre (pkm). An electric train, however, operates at a rate of between 0.04 and 0.18 MJ pkm, making train transport as much as 92 times more energy efficient.

From an energy-conscious and environmental perspective the imperative of prioritising increased public transport patronage and improving infrastructure and services is undeniable.

But how affordable is public transport - considering the example of Melbourne - in the face of the current fare system?

Drawing on RACV figures, meanwhile, the PTUA compares the cost of running a used car to that of everyday public transport use: "… even used cars, already fully paid for and ‘running on the smell of an oily rag’ can cost over a thousand dollars more in annual registration and fuel than the most expensive Yearly Metcard." Here "annual running costs" are "$2,918".

In comparison, the PTUA has noted that (in regards to the Victorian example): "Metlink yearly tickets are $1,117 for zone 1, $748 for zone 2, or $1,722 for zones 1+2."

Despite the competitive cost of public transport, though, many still choose to use their cars as a matter of convenience. And also the above figures may appear deceptive if one considers that car transport can be relatively cost-efficient in comparison to public transport in the case of short trips. It is critical that such disincentives to the use of public transport are addressed.

As Royce Millar and Simon Mann have argued:

“Just one in 20 outer Melbournians take public transport to work. In the relatively transport-rich inner city, the figure is one in five. Citywide, just 9% of all trips are taken by bus, train or tram.”

Public transport infrastructure and rolling stock in Australia need to be upgraded to accommodate greater patronage, and to provide excellent and convenient service (including greater frequency) at competitive prices to all citizens.

The PTUA is launching a campaign on improving the regularity of public transport services to provide convenience for consumers. The campaign has been named Every 10 Minutes to Everywhere.

There is a particularly urgent need to expand transport networks into the urban fringe of major cities where services are often especially poor.

Indeed, compared internationally, there is much scope to improve the affordability of public transport in Australia’s cities. The PTUA notes, for instance, that the Canadian city of Vancouver enjoys fares of around half the cost of Melbourne's.

To conclude: the need to revolutionise the transport economy - to invest in public transport and rail freight - is undeniable. So also is the need for root and branch reform of Australian public transport fee structures.

Such are the environmental, equity and fiscal imperatives we face.

Transport from a different perspective: hybrid and electric car technology

Alongside the imperative to revolutionise the provision of public transport, there is the question of hybrid and electric car technology. Environmental and cost of living pressures are bringing to a head the need for such innovation.

Wikipedia notes that Plug-in Hybrid Electrical Vehicles (PHEV) are currently capable of about 100km a day on battery power alone - after which the car reverts to a petroleum motor. The working of the petroleum motor thereafter assists in recharging the vehicle battery. Notably 100km a day is more than most people require in their daily usage. But the hybrid system provides flexibility on long trips - when it is needed.

Research is ongoing, and Wikipedia also notes that:

“Advanced battery technology is under development, promising greater energy densities by both mass and volume, and battery life expectancy is expected to increase.”

Some researchers, however, feel that more work should be put into developing more efficient and “green” alternatives like “fuel-cell cars that can use sustainable sourced fuels, such as hydrogen”. Unfortunately, though, many suppose that hydrogen fuel cells will not provide a marketable alternative before 2025.

If PHEV vehicles are the best option available over the next 20 or so years, then the challenge is to make the technology affordable. Indeed, it is a basic “cost of living” issue essential to the transport framework of the entire economy.

One significant challenge here might be subsidisation and even socialisation of petrol supply during the transition period. The aim, in this instance, is to make private transport affordable for those on lower-incomes - who may not have the immediate means to “upgrade” to the new technology.

As part of this process, there is a key role for Australian government: to partner with other governments and automobile companies in furthering PHEV and hydrogen fuel cell research and development to make it affordable for all.

Other roles for government may also include driving the adoption of micro-renewable energy solutions - to complement the shift to a “green private transport economy”.

A revolution in transport infrastructure, including improved public transport, and the adoption of hybrid and electric vehicle technology - can provide better value and efficiency even while reducing greenhouse gas emissions.

We need to speak out and ensure our voices are heard so that decisive action is taken - now.

by Tristan Ewins

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