Anarchism and the death of social democracy

Gillard's ministerial reshuffle has been likened to arranging the deck chairs on the Titanic. Analysts differ on what constitutes the sinking ship; is it Gillard's prime ministership? The Gillard government? The Australian Labor Party?

All seem agreed, however, that Gillard's ministerial reshuffle will do little to alter the ultimate fate of the sinking ship, whatever it may be.

The underlying motivation behind the reshuffle has also attracted the attention of analysts as it seems to have rewarded the froth - Arbib probably doesn't know how to spell his own name and Shorten's ego hides an essential mediocrity, which brought Gillard to power and supported her "leadership" at the recent National Conference. The reshuffle itself appears also to have been enabled by the defection of Peter Slipper.

The entire affair is mainly a sideshow best left for discussion on ABC Insiders, which usually focuses on such trivialities.

My interest here is directed toward the ship, not the deck chairs.

I submit that what is sinking is social democracy itself.

That social democracy would fail was foreseen eons ago from within the Left, most specifically from the libertarian wing of socialist thought otherwise known as "anarchism" or better still "anarcho-syndicalism."

But why say that social democracy has failed?

We forget that what we call "social democracy" initially was meant to serve as the parliamentary road to socialism. To be sure social democracy, especially that associated with the German SPD, in its early days was programmatically Marxist. But the revisionism of Eduard Bernstein served to codify the practical existence of a more evolutionary and parliamentary approach to socialism. In other countries, such as the United Kingdom, where Marxism was not as prevalent within the labour movement, such codification wasn't really necessary.

The key idea of the social democratic approach was that socialism could come about by something akin to an algorithmic procedure; step-by-step through piecemeal reform enacted by democratically elected governments, rather than through a singular extra parliamentary revolution.

This idea found its most important expression in Australia with the socialist objective of the Australian Labor Party and the Australian Council of Trade Unions.

In reality social democracy, to a greater and lesser degree, everywhere became associated with the development of a social contract between capital and labour. Australia was no exception.

In Australia the social contract consisted of a number of interlocking parts, such as centralised wage fixation and industrial arbitration; industry protection through tariffs and quotas; and a social welfare state enabled by the federal collection of a redistributive income tax.

The development and growth of the Australian labour movement, especially following the severe global economic downturn of the 1890s when free market economics held sway, played a vital role in ensuring that such a social contract could come about.

In its essence, the social contract led to the emergence of both a social welfare and developmental state that tamed and regulated the free market. Australian society became more egalitarian and the existence of the social contract was the key ingredient that facilitated the post war social and economic development of Australia, including the smooth post war immigration programme.

Though socialism was "on the books," the labour movement didn't make any serious attempt to bring it about whilst the social contract was in force. It should be stressed that Chifley's bank nationalisation initiative was in accord with orthodox economics, not neo-Keynesian economics, which displayed a preference for the socialisation of investment in order to smooth out the business cycle. In this way, Australian social democracy was largely on a par with that practised elsewhere.

The Bretton-Woods global economic order played a critical structural role in the advent of social democracy. Capital market controls and regulations, that prevented the large scale transfer of capital and the emergence of a global financial economy, provided the glue that enabled the formation of social contracts between capital and labour. In its absence, the easy transfer of large sums of capital across borders could be used to undermine wages and working conditions through the threat of capital strikes.

That was the situation in much of the advanced capitalist states - the US was a special category - but in the third world periphery it was open slather for western corporations.

However that social contract is now dead, and with it has gone social democracy. In its place we have seen the financialisation of the advanced economies and a commitment to extending free market discipline to the great bulk of the population, which does not include the corporate sector, given that it must be protected by the nanny state as corporations have been from time immemorial. As a result, the size of profits in the wages-profits share breaks records with the frequency of a female pole-vaulter.

In Australia, the Australian Labor Party has been especially dedicated to the dismantling of the social contract. It was the ALP that dismantled industry protection; a process first began by Gough Whitlam. It was the ALP that abandoned Keynesian approaches to fiscal policy; it was the ALP that moved away from centralised wage fixing and conciliation toward a deregulated labour market; it was the ALP that started to downsize the welfare state; it was the ALP that started to cut taxes for the rich whilst cutting social spending; and it was the ALP that started to deregulate the financial sector and so enabled the banks to make massive profits on the back of ballooning private debt.

All this was enabled by the Accord with the ACTU, which largely functioned to discipline the working class whilst the ALP and the ACTU got busy dismantling the social contract to please corporate Australia. Little wonder then that a key architect of the Accord, Bill Kelty, has high regard for Bill Shorten.

The Labor government remains committed to the pursuit of free market reforms. The Prime Minister on numerous occasions has been on the record as stating that the government wants to extend free market driven economic reform, even after 30 odd years of relentless neoliberal policies.

Gillard's big idea, even from opposition, was to extend market driven "user pay" principles to social service provision. The Gillard Government, and the ALP more broadly, has all the features of a Trotskyite movement only this time the emphasis is on "permanent reform."

Will neoliberal economic reform actually ever end?

That matters have reached this impasse would not surprise any self-respecting anarchist. Libertarian socialists had always argued that social democracy could not lead to socialism and that it would largely end up being class collaborationist, as it in fact has.

For example the syndicalist Industrial Workers of the World (IWW), a significant early force in labour movement politics, had argued that Labor parliamentarians could not be trusted to serve the interests of the broader movement and would end up being more concerned with protecting their own power.

The most sophisticated version of this can be found in the work of Robert Michels. He had argued, during his anarcho-syndicalism phase, that an "iron law of oligarchy" would ensure that paid officials and elected parliamentarians would assume leadership of social democratic parties and that they would go on to fashion largely hierarchical and authoritarian power structures. If need be, these oligarchic leaders would be prepared to betray the interests of the broader working class movement in order to protect and enhance their power and privilege.

There can be no doubt that the leaders of the parliamentary Labor Party have abandoned the social contract in favour of pro corporate economic restructuring so that they may win elections in a corporate dominated society.

One reason for this is that the oligarchic power structure within the ALP relies upon maintaining client-patron networks, best maintained when in office. A core movement has been the gradual cementing of power within the ALP to a few hands at the top of the parliamentary wing, a process first begun by Gough Whitlam.

Mark Latham is the most well known exponent of this view in Australia today. It is not often realised that the key first chapter of his diary is largely on a par with the traditional anarchist critique of social democracy. As is his suggested remedy of voting informal and abandoning parliamentary politics for other means of political action.

It is important to add that the anarchist critique of Marxism has been somewhat similar. Anarchists had always argued that Marx's "dictatorship of the proletariat," envisaged by Marx to hold sway during the transition to communism, would in fact lead to a "dictatorship over the proletariat." It was the seminal anarchist thinker, Mikhail Bakunin, who argued that Marxism, should it remain true to this concept, would lead to a tyranny that would "beat the people with the people's stick." Of course, Lenin and the Bolsheviks' conception of a revolutionary vanguard party that would monopolise the power of the state led precisely to such a tyranny.

Anarchism, by which I refer to anarcho-syndicalism, should be construed as the application of classical liberal principles to a complex and modern industrial society. When one examines the underlying reasons why classical liberal thinkers valued freedom it is possible to see that personal autonomy, personal fulfilment and the exercise of creativity through free labour were what individual freedom was supposed to foster and nurture.

An industrial society where work and economic concentrations are organised in a hierarchical and authoritarian manner from the top down, is not one in accord with the reasoning that underpins classical liberal thought. But notice that a system of workers self-management and industrial democracy, alongside a political order based on self-governance rather than a centralised state, most certainly is. Neoliberalism has little to do with liberalism; it's simply a doctrine justifying the extension of corporate power and profit.

Movements inspired, even if unconsciously, by anarchist thought are a significant social force. The Occupy Wall Street movements, that have brought to relief both massive inequalities and the essence of the state as the protector of private power (notice we praised the occupy Tiananmen Square movement but not something similar at home), with their affinity groups and self-governing assemblies are largely anarchist in their structure.

Moreover, it is estimated that 130 million Americans are members of self-managing economic firms and that 13 million Americans work in worker owned businesses. From such seeds, as Bakunin pointed out, new social and economic orders may emerge.

Is an anarchist society feasible? That is another topic.

What we can say is that the anarchist critique of social democracy and much of what we call Marxism is correct. Socialism is to be libertarian or it is not to be at all.