November 3, 2012
Rob Manwaring argues that social democracy is not traveling well these days. He refers to the increasing numbers of the public turning to the right rather than to the left to govern them; the fragmentation of support for the left with the rise of the Greens; a suspicion of state power, and the issue of immigration being a real Achilles heel in centre-left politics.
However, he adds, the under-pinning structural problem facing centre-left parties since the 1980 is the dominance of neoliberalism. Neoliberalism has a powerful internal logic with popular appeal: economic growth takes place when tackling inflation is prioritised over securing full employment; taxes are low, the welfare state is minimal, and privatisation and marketisation are rife.
The centre-left, he says, has struggled to adopt a sufficiently distinct and electorally appealing alternative to this agenda. Labor today stands for being a competent manager of the economy and incremental change that modify the edges of a neoliberal mode of governance.
John Gray digs deeper into this relationship between neo-liberalism and social democracy by pointing out the contradictions of neo-liberalism. For example:
Neoliberals wanted to limit government, but the upshot of their policies has been a huge expansion in the power of the state. Deregulating the financial system left banks free to speculate, and they did so with reckless enthusiasm. The result was a build-up of toxic assets that threatened the entire banking system. The government was forced to step in to save the system from self-destruction, but only at the cost of becoming itself hugely indebted. As a result, the state has a greater stake in the financial system than it did in the time of Clement Attlee.
Gray adds that although the deregulated banking system may have imploded, capital remains highly mobile. Bailing out the banks has shifted the burden of toxic debt to the state, and there is a mounting risk of a sovereign debt crisis as a result. In these conditions, maintaining the high levels of public spending that social democracy requires will be next to impossible.
Hence the Gillard Government's education reforms are designed to prepare people for the labour market, rather than developing any substantive form of social justice.