Social democracy: the Disneyland political solution

As I have acknowledged in the past, it is indeed a difficult task to find solutions to address both national and international considerations, never mind environmental solutions. It may indeed be the case that the wealthier democracies will reject freer trade once they realise that job losses to poorer nations will not be limited to low skilled manufacturing, or that Western societies will increasingly struggle to meet a variety of social and environmental policy needs as costs continue to rise.

We need to again learn from our mistakes. We should not lend money to people who cannot afford to repay loans, and we should not allow business leaders to earn outrageous wages on the back of harsh reform for many ordinary workers. Just 25 years ago the average CEO of a US public company was paid 40 times the average worker’s pay compared to 1,000 times more before the recent credit crisis.

And we may have to alter the balance between freer trade and government intervention which will hopefully not deny poorer nations a chance to prosper, despite selfish aims about what their higher standard of living will do to the environment.

But we also need to recognise that Western democracies may need substantial reform; a reality that is hardly likely to please so-called social democrats blinded by hope rather than reason.

Sure Obama’s recent speeches have been impressive having announced reform to health, education and energy (including investing $15 billion a year to develop new technologies). But rhetoric is one thing, and reality is another, although I hope Obama achieves important goals. No doubt that something needs to be done to address America’s housing needs given that previous US governments encouraged banks to make the high-risk sub-prime loans to provide housing, as legitimised by the Community Reinvestment Act 1977 and the recent fetish for low interest rates.

So, social democrats, tell us how, besides higher taxation or public debt levels, we can help meet our social and environmental policy needs, along with industry and infrastructure needs? Tell us how we generate the wealth to pay for important social welfare and environmental programs?

But if you cannot provide solutions without jeopardising international trade which is necessary to promote peace and prosperity between nations (imperfect as it is), then Western societies will long need to pay adequate attention to taxation and labour costs.

Therefore, the current goal of a sensible Left is to utilise the current context to encourage debates about the need to help the most vulnerable Australians just as Australia’s centre-right (the Coalition) used a period of economic boom to aid the wealthy through a number of reforms.

There is a need for tough policy decisions to be made by Labor rather than policies intended to maximise support in the greatest number of seats. For instance, with the Rudd Government possibly to announce a significant pay rise for pensioners in the May budget, what is to be done about those on unemployment levels given the gap between the two payments increased under the Howard government.

Regardless of what Labor does, how will the pay rise be funded in such tough times? Is there not a need for tougher means-testing?

In contrast to the self-declared social democrats who merely criticise, Australians will utilise our liberal democracy to encourage change to shift the centre of politics again back to the Left, just as they did when a clear majority of voters gave their primary votes to Labor or the Coalition at various elections to promote economic reform since the early 1980s.

The times are a changing as Western societies and their governments again deal with the consequences of their ways in a world where competing nations still continue their struggle for resources and the influence of certain ideas.

But contrary to so-called social democrats raving on about how the world should be without giving us effective policy alternatives, we either support freer trade and deal with the consequences as best as we can if we are to give all nations their opportunity; or we become more protectionist and limit co-operation to like-minded nations, a policy option that is guaranteed to increase hatred of the West.

I, for one, prefer to defend the term liberal democracy, a political concept more capable of explaining the struggle of a society to balance compassion and competitiveness which indeed must incorporate national and international considerations, along with the promotion of political and economic freedom necessary to promote the exchange of goods, services, and ideas crucial to innovation.