A good and realistic article.

"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."

This is a very good point. It's basically where society says, "OK, we've got some benefits out of economic reform and globalisation over the past 25 years, but we are suffering other societal costs, so why don't we take stock and civilise the situation we find ourselves in now". This is exactly the right way to go for Australia, IMO. We can't wind back the clock, but we can regroup society and find its proper niche within our current economic situation.

Chris,
Have you ever been to Disneyland?
Trust me there's nothing fantasy about it. It’s a shrewd marketer’s capitalistic wet dream. The whole place is geared to part you from your money down to the timing of the rides. From that perspective Brilliant, just don’t look without rose coloured glasses.

You’re correct of course we need a target to focus on “watch the eyes of the charging rhino when you see the whites of his eyes squeeze the trigger and… Bang…no charging rhino. “
“What if I miss and I and the thirty spectators get trampled?”
“Never mind that son it’s the way we do things”
“but what about the rhinos”
“….Jees Son what are you some Social Democrat or one of them Greenies?”
My point here is that the article boils down to yet another Gross unsupported Generalization. Much like the overly simplistic Left/ Right diatribe. Apart from the intellectually lazy or deficient who fits any of these moulds?
Then when defending status quo that is clearly broken “of course it’s not perfect” that has to be the understatement of the week. As if talking the BIG picture somehow renders a majority of individuals as being collateral damage.
I also note you took 3 pages to say “You think Social Democrats are wrong”
With a subtext that “there’s only one way to deal with the economy… by maintaining the current paradigm.”
To use an old saying “There are many ways to skin a cat”.
Ultimately I reject your assumption to the contrary.

Two final points
If a blind man has an elephant’s tail and describes it as short and ropey does that describe the beast? You would be wiser to wait until you have the whole plan in context and then logically make specific point rather than the elephant’s tail perspective.Al you're achieving is preaching to the converted and causing more unjustified conflict.

Examinator

Fair enough.

But point of article is to suggest that it is easy to criticise, what were the ideas of social democrats in the past and why were they not listened to if the futility of our ways is so obvious, and liberal democracies do adapt to change in an imperfect world where freer trade remains the only sensible option to appease competing nations. The only thing now is that futility of debt means that we wil have to accept much tougher times ahead or return to greater protectionism.

This article is right in saying a liberal democracy is probably the only system that will work in the long term.

Up until this point I think we have had a liberal (unfettered greed and capitalist system) with the failure of successive governments to actually apply the democracy part in looking out for the best interests of the demographic (the whole of society). Such as allowing private individuals running banks too much freedom with the people’s money. Allowing greed to predominate over the training of a new generation of Australian skilled workers.

What works best is a capitalist, free market society, with socialist brakes applied by the government where it is seen to be necessary.

The questions this article asks should be debated and thought about in trying to find the best way forward for the West and our people. Are global companies actually a threat to the West and our people in the long term in terms of loss of jobs and industries. Does their so called helping of developing societies (slave wages?) come at the expense of our own societies. Should a socialist brake of some kind be put on them or is that impossible given the money they probably have to buy governments.

Chris, suggest you study economic history further, the greatest period of economic growth was from 1945-1970s. This occurred under capital regulation and fixed exchange rates established by the Bretton Woods Agreement.
International Trade flourished as businesses could invest without costs associated with uncertainty from floating exchange rates.
Casino capitalism has led to increased curreny volatility hence increased trade costs which inhibit growth.
The Bretton Woods system broke down because of the burden placed on the international reserve currency (US) by the Vietnam war and the OPEC crisis. Rather than having the savvy to reform the international framework they through the baby out with the bath water. Suggest you read two articles I have written on subject. Furthermore for supply side social democratic policies suggest you read "social Democratic response to the GreatDepression of 2008"

Slasher,

I do not deny some of what you said.

But you do not explain what the US should have done instead of ending capital controls. Of course, you would know some forty years later.

You also need to read more eco history to fully understand the many reasons why the US would choose to get rid of capital controls and why no other nation/s was prepared to takeover the US role.

If you want a debate about history, bring it on.

How unfortunate, that those who ought to know better still believe in the "Global Economic Growth Fairy"!

Wake up and grow up, folks - economic growth is at the core of so many of our modern problems, not the solution!

One wonders how much intelligence the author really has when he (right from the start) uses the term the "far left" to describe and denigrate those he disagrees with.

Much the same tactic is used by those on the "right" in the USA, who are now using the word SOCIALISM to describe and criticize the policies of Barack Obama.

Meanwhile as ever my favourite "philosopher" sums up the world-wide situation created by those on the "right" of the culture wars, via these references

http://www.coteda.com/fundamentals/index.html

http://www.da-peace.org

chris, The real question is not what the US should have done 30 to 40 years ago but what should it do now. We are facing an absolute disaster in the world economy, collapsing trade and the fundamental implosion of the finance sector. We must move away from a paper fiat monetary system to a value based monetary system. It should at least be bimetallic or as I have written previously tri-metallic. The burden of full convertability should be shared by the four major currencies $US, Euro, Yen and Yuan. Fixed exchange rates with each member nation to ensure their currency trades in a 5% range against all reserve currencies. Establish a Economic security council to set the value of gold against the reserve currency and have the mandate of currency devaluation/revaluation upon an agreed definition of disequilibrium. This definition to be based on maintaing relative PPP and long term neutral current account position.
This system would restore financial stability, reduce currency movement risks and encourage more trade. Certainty and predictability is crucial to growth in the real economy, which is vital to restoring full employment. Fundamental change is necessary to avert the greatest depression in our history. The removal of capital controls has allowed mega foreign loans to Eastern European nations which has driven their recent growth. The floating exchange rate will destroy that growth. As these currencies undershoot, sovereign default, deflation or hyperinflation is the risk associated with massive social upheaval. The sovereign default risk of Eastern Europe could destroy the Euro with cataclysmic consequences.

Slasher,

Again I have no problem with much of what you say, although such ideas to resolve international finance have been around for years.

My point is that any solution will have consequences in a world of competing nations. Hence, so-called social democrats need to offer sensible ideas that address both national and international needs, a most difficult task indeed.

When you realise such a difficulty, then greater sympathy should be given to the efforts of liberal democratic governemtns in recent decades, notwithstanding our curent predicament.

I think this article is setting the Left up as a straw man to some extent.
Liberal democracy works fine so long as the transparency is there so to the "democracy" part works. What typified the Howard/Bush years was secrecy, media misdirection, nepotism and special interest groups. Any growth during this period was due to generational theft, running down of infrastructure and an unsustainable credit bubble. What was lacking was any consistent approach to economics, or even the Law...it was all mates rates, dog whistling and deniability. (Where are the WMD's that the government saw "solid" evidence for?)

Slasher: What about a currency based on a unit of energy? By linking wealth to energy (a fundamental, measurable unit), we remove the artificial "shiny metal" link with wealth which worked OK in a iron-age, pseudo-technological society but is pretty irrelevant to a modern information economy. The amount of wealth really has nothing to do with the quantity of refined metals in the world anymore.
We would still need a central banking system that is *not* in private hands for any currency system to work. Privatising banking is really, really silly!

Chris, liberal democracy failed in 1929, it failed in 2008. The failure in 1929 led to 12 000 000 deaths, social democracy does not have any failure with such drastic consequences.

Ozandy to suggest currency against units of energy is absurd. To create wealth more energy produced. Therefore dire consequences for global environment.

There are times when fiat monetary system is appropriate and there are times when a commodity based system is appropriate. We are now entering one of the times when a commodity based system is necessary, essentially to restore faith in financial system after unregulated derivative markets were allowed to run wild. Lets hope we do not have to see 12 000 000 deaths before we change the financial system.

slasher, "you state that liberal democracy failed in 1929, it failed in 2008. The failure in 1929 led to 12 000 000 deaths, social democracy does not have any failure with such drastic consequences".

Actually, my support of liberal democracy is part of suport for liberalism, so you are stating that liberalism failed and caused the death of 12 million people. Big call.

Now again, I ask you to define a political concept that can appease competing nations as liberalism has sought to do, despite the many imperfections of Western leadership.

I would have thought that sensible commentators of the Left would fit within general support for liberalism although we all differ over the extent of govt intervention needed.

Chris... I wonder if I've left it too late to contribute to this debate- but here goes...

You do not grapple with my concrete proposals...

To begin with - yes we can raise progressive taxation...And even when this is taken into tens of billions - it this 'extreme' in the context of an economy of over $1 trillion? Is it extreme to wind back some superannuation concessions for the wealthy - while transferring these for the needs of the most vulnerable?

Is it 'extreme' to suggest this money could go into public housing, transport and communications infrastructure, education, health? Is it 'extreme' to want a fairer minimum wage - and to gradually democratise the economy - through wage earner funds and the like?...

Perhaps it's because I actually NAME capitalism as a distinct system - which depsite its benefits - also embody many contradictions and flaws? That said - I accept a role for markets - leading innovation, resposiveness etc... I argue for a DEMOCRATIC MIXED ECONOMY...

Finally - re: protectionism... I think it is positive to be boosting world trade... But when competition takes the form of gross exploitation of vulnerbale workers - I believe these workers should organise internationally for a fair go...

Further - I think some industries are of strategic value - and should be domestic regardless... eg: Defence, Communications...

Further - intervention can be jsutified to achieve an overall balance of trade... And some enterprises would be viable - and profitable - in democratic ownership - even if not the MOST efficient way of boosting share value... The failure of neo-liberalism to look beyond this logic is one of its greatest flaws...

Hope there's enough people here to keep up this debate... Readers might like to check ou my more recent article - from yesterday... 26/3...

sincerely,

Tristan

tristan,

for social democracy to flourish we must make the leap of democraticising investment decisions. Too often social democrats focus on the social democratic mechanism of wealth distribution.

We need to embark on widespread corporate reforms. These are not sexy to social democrats but we can't redistribute wealth if we have no say in wealth creation.

We need to ensure that superannuation members have a direct say in the affairs of corporations. We also need to ensure that the board rooms are truly democratised. We need a complete overhaul of corporate regulations, we must end the ability of CEOs to manipulate shareholder votes. That means bringing true secret ballots to corporate australia, ending the practice where proxy votes can be rounded up if a vote is going bad.

We need to change the taxation system to remove the bias towards debt financing which encourages high leveraging exposing the wealth creating vehicles in our society to significant risk.

If we do not get these changes right we cannot move social democracy to the next level.

Tristan,

Again, I agree with much of what you say. My problem with so-called social democracy articles is they suggest they have the answers to complex issues which competing nations have not solved after centuries.

It is extremely hard to get the right balance. West govts must take account of its own national interest as well as international considerations.

Why else are we in the state we are now.

I don't deny the need to do somethign about widening income disparity or aid public housing. Read my Quadrant articles; i often cite such needs and bag free trade as a perfect system.

All I sought to do with OLO article is to provoke debate and get social dmemocrats to see that solutions are extremely difficult in such a competitive world. No matter what ideas are suggested, there will be further consequnces. You need to think through your ideas from both a national and internaitonal perspective.

My argument will always be that world is better off under liberalism (including capitalism), as long as sovereign states are the basis for internaitonal relations.

As I suggested, the tide is turning, and some of your ideas wil take hold even in the US, the nation that has done most to promote fairer trade, regardless of its imperfections.

There is no use in offering ideas that have no way of taking off in a world where there are balance of power considerations. This is why we either accept free trade and face more policy consequences and realise that fairer rules will allow poorer naitons to rise at our expense, or we reject freer trade

Just want to add that it not all gloom and doom if we continue with freer trade. We will have to modify our welfare ystem to reduce the overall burden but ensure it helps most needy.

Prime concern, however, is that struggling society may turn in on itself with political parties even more so targeting policies to win most seats.

So Tristan, dont worry about criticism from liberal democrats. Just keeping highlighting important issues.

The more that such issues about the vulnerable are exposed, the more likely that all democrats will listen. Remember how the coalition took up the pensioners cause to get political mileage.

All i will say again, if you are interested in battlers all over the world, is that there is two sides to every story. What you criticise about liberalism, may be rejected by many more millions in China and India.

If you are a true socialist, you will have to devise ideas and policies that can meet all of the world's needs.

Real solutions will not be achieved by restrictions on capital flows. Real solutions will not be achieved by tariffs

Dear Chris,
You might now be familiar with all my work - but to clarify, I consider myself a liberal as was as a social democrat. But there are different strains in liberalism. Liberalism cannot be reduced to 'free trade' of course... Free speech, association, assembly - are core. And for ordinary people - I have argued a number of times that these ought to be free to invest their earnings as they wish - within ethical constraints...

On the other hand, I believe in economic democracy - and I envisage much of the economy being transformed into mutualist and co-operativist forms, - and including Government Business Enterprises, and social infrastructure and services... (achieved partly through tax breaks and support for such democratic forms) Also important would be wage earner or pension funds and the like...

The 'mixed economy' was mainstream really - until Labor abandoned it in the 80s and 90s for political expediency. I don't consider my politics 'extreme' - and I'd like to see you justify such language... Yes I believe in a larger public and democratic sector... And I believe with a multiplicity of social and democratic ownership - with a strong welfare state - less people will want to take risks with private investment... But I would not take away from them that right... (although I would impose progressive taxes and restructure the overall tax system)

Anyway - the point of all this is: is it really fair to call these politics 'extreme'?... Again - it is a way of avoiding engagement with different ideas... Ultimately all this is relative anyway...I seek to shift the boundaries and 'capturing and redefining the centre'... Just remember - a few decades ago neo-liberalism was considered 'extreme' - and with the current economic disaster it may be considered as such again...

nb: 'take risks' should read 'take EXCESSIVE RISKS'... and with Public pension funds the risk is socialised... For the sake of fairness it is 'spread around'...