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Social democracy: the Disneyland political solution

By Chris Lewis - posted Monday, 23 March 2009


What is social democracy? Is it a political system more humane and capable when compared to the supposed mean-spiritedness of liberal democracy; with its supposed bias towards individualism and greed?

If you believe Rudd’s recent essay (The Monthly, February 2009), social democracy promotes policies that invest in social goods, encourages greater market regulation, upholds the state provision of social services, and yet preserves a society quest for innovation.

Sounds too good to be true? That is because it is. I am still waiting for so-called social democrats to move beyond rhetoric to provide alternative ideas besides liberalism in order to more effectively meet the aspirations of both developed and developing nations; notwithstanding the disastrous impact caused by the greed of the financial sector in recent years.

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Take the simplicity offered by the far left in a number of On Line Opinion articles. For instance, Tristan Ewins (March 12, 2009) in his call for social democracy, stated that a fairer society is merely “a matter of whether or not government has the political will to do what is right” and “whether or not the people will stand up for justice” as capitalism “remained a flawed system … characterised by exploitation”.

Marko Beljac (March 4, 2009) wants greater “regulation and control over the movement of finance capital” which will also constrain the institutional and political power of financial corporations.

And Jason Wilson (February 20, 2009) declared that enough Australians are instinctive social democrats because: “Australian history suggests an ingrained preference for a relatively equal distribution of wealth, a strong role for the state in framing the operations of the market, and a high degree of common ownership of public goods.”

Really? Show us how a world of compassionate social democracies can be achieved? How can poorer nations benefit without global capital coming from richer nations? And where is the evidence of Australians rejecting recent policy trends?

In truth, no Western democracy has defied recent international economic policy trends. Take Sweden, once the darling national example of many Australian academics. Though arguably the most generous of liberal democracies thus far, respective Swedish governments adopted credit market deregulation in 1985; ended centralised wage bargaining in 1983 which had led to wages being negotiated by collective bargaining with no fixed minimum wage by legislation; encouraged the importance of fiscal discipline, restrictive monetary policies, and a low interest rate (just like Australia); reduced the corporate taxation level from 52 to 28 per cent; and lowered government outlays from 72 per cent of GDP in 1993 to 56 per cent in 2006 (OECD 2006), a development that is placing greater pressure on its generous social security system.

It's high time that so-called social democrats put away their rosy glasses and paid greater attention to competitive realities rather than using the current economic crisis as an opportunity to make cheap points (or blame the US) in a world where effective policy solutions for the world remain extremely difficult.

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As I have stated before, I am no diehard supporter of centre-right political parties or recent policy trends. I have long noted adverse effects upon battlers and the important role played by the labour movement to help diminish the disgusting level of inequality, despite the garbage put forward that Australia’s average income was 40 per cent higher than any other country in 1870 during the era of international free trade (Quadrant, January-February, 2008).

But some on the Left deliberately choose to ignore important realities that help explain our predicament today. Their idealistic approach to political analysis hardly allows facts to get in their way.

The economic fortunes of most Western societies have always depended on successful ties with the international economy (including Sweden).

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About the Author

Chris Lewis has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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