Tony Abbott has stated a couple of times recently that if Australia doesn’t change course we’re destined to adopt a ‘Greek-style economic future‘ (i.e. contraction, stagnation etc.), pointing to his ‘deficit reduction’ as the remedy. Sadly his efforts are falling well short due to the fact he’s actually DOUBLED the deficit since coming to power. But never mind that embarrassing fact for the moment, I actually agree with Abbott – we are heading towards a social and economic calamity in this country sometime in the near future. But it won’t be the result of a trifle amount of debt left by his political fore-bearers. Oh no, it’s much worse…
It’s much more likely the economic impacts of a rapid deflation of housing and asset bubbles, the cooling of the Chinese economy, the very real possibility of further turmoil in Europe, the ramifications of peak oil, an ageing population, food and water shortages coupled with a dramatic decrease in biodiversity and the collapse of ecosystems, the end of the mining boom or the compounding effects of climate change will challenge not just our current economic system, but the very fabric of society itself in the next couple of decades. So what is one to do when faced with such challenges? Since most of the problems listed are not only the product but a result of capitalism, it would seem odd to suggest that ‘more’ capitalism would be the answer. We need to think outside the box…
After I submitted a post to my blog recently, a friend commented this:
Interesting perspective Jamie, always good to identify a problem.. Even harder to come up with a solution that works..
It could be taken as a back-handed comment I guess, but I think this particular individual was highlighting something that is definitely intrinsic to what it is to be human. It’s easy to point out that something is very wrong. Despite the variations in the human character across the globe, there seems to be something in each and every one of us that reacts the same way when we know something isn’t right. You saw that a couple of weeks ago when the Greeks voted ‘oxi’ (no in Greek) despite the media, the bankers and the political elite of Europe demanded the people toe the line. Where we all differ is in our response on how to fix this particular error, evil or anomaly.
So the million dollar question, highlighted daily on our TV’s within the continuing Greek tragedy and the collapse of the Chinese stock market is, what comes next? In a globalised world where economic forces dictate our very existence, everyday people are starting to catch on that something is wrong… very wrong. The feeling that something needs to change is near universal – where we differ is in our reaction.
More government intervention, or less? A greater role for the economy in our lives, or a greater emphasis on the economy working for the benefit of our lives? Are the current crises in Europe and China just a blip on the radar of the evolution of capitalism, or the death knell for an economic system that has spread across the globe since the beginning of the Industrial Revolution? Is the answer communism, libertarianism, anarchism, some fine tweaks to the capitalist system – or none of the above?
So what my friend may have been meaning by this comment was this (if applied in this particular instance):
It’s easy to know something bat-shit crazy happened to our economic system in 2007-08, but what are you going to do about it Jamie? What’s your solution – or are you just hot air?
So here goes – my response to the current order of things as I see it. Here is my version for a ‘better society’ – it’s vague as fuck and blurry on the details, but hopefully my vision for a better society resonates to that part of you that knows something has to change.
As I believe the vast majority of injustices are predominantly the result of economic inequality, I’ll be presenting a new economic system that attempts to alleviate gross economic injustice and re-appropriate the wealth accumulated by a privileged few by distributing it for the benefit of the masses. This is my ‘good society’ and here’s how it would work.
In my good society, I imagine a world where the average man has a stake in the corporation that he works for. I imagine that the workers would get a share of the company’s profits – not as detached shareholders but as a worker-owner. I imagine a society where universal healthcare is enshrined, all education is free and the criminal and justice system does not target the poor, the mentally ill and the weak. I imagine a society where there is a clear separation between church and state; and the elderly, the sick and the disabled are treated with respect and dignity.
I imagine a society where politics is not controlled by an elite few, but is democratic and influenced directly by the will of the people – not business interests. I imagine a world where the environment and the economy are not exclusive entities, but mutually dependent fields of societal importance that are sustainable and fair. I imagine a society where nobody is obscenely rich and nobody is poor and the average person makes a decent wage to live on. I imagine a society where democratic and human rights extend to everyone and are protected in law for the benefit of the people.
This is the society I imagine, and I will now detail how it will come about.
Let us begin with a brief overview of how the economy would look like in my ‘good society’. In principle, it would imitate and function like a ‘socialist’ economy. But please, don’t get scared off by this word. All I’m simply suggesting is that this is an economy where economic decisions are made to create an egalitarian outcome benefiting all participants in the economy. That will be the goal, first and foremost – it will reflect a shift away from the goal of unfettered growth. For how can you have infinite growth on a finite world?
So this strategy would be conducted via various methods, such as facilitating the democratic control of resource allocation decisions by all members of the community. When I refer to the ‘community’, I am encompassing the workers at a company, or even the people living within a specific part of society. For example, the approval of a Chinese owned coal-mine in Australia’s food bowl would never even come to fruition in such a framework – it wouldn’t even get off the ground. I’ll classify this as ‘economic democracy’ and it would be extended to all persons who are significantly impacted by a company’s allocation of resources.
Within this society the goal will be to deny the ability of power and wealth to be concentrated into the hands of a select few. So that means no more Gina Rhinehart’s, Rupert Murdoch’s or James Packer’s.
Fuck ’em, we don’t them. They are parasites.
But to do this the whole economic paradigm will have to be shifted to a system where the idea of return on investment as a measure of economic success is discarded. A highly regulated economic system where capitalists are taxed incredibly high won’t work, as there’s always an incentive for this powerful group of people to loathe ‘the system’ and progressively attempt to dismantle it. Keep in mind that after WWII the marginal tax rate was 91% for the richest in America, but due to consistent lobbying by the wealthy over the last 50 years it’s now below 35%.
To counter something like this happening, I won’t recommend a transfer of power to the state (the Soviet Union didn’t work out too well, did it?) – an economy with minimum interference and maintenance by the state is the goal. To achieve this socialist economy, the most positive aspects of a capitalist society will be adopted (yes, there are some).
For example, the pursuit of wealth will not be discouraged (I don’t believe it truly can be), but it will be constrained within the regulations of the new economic paradigm enshrined in the constitution. When I refer to a constitution, I mean something revered and respected like the Constitution of The United States (I’d like to refer to something similar in Oz, like a Bill of Rights, but we don’t actually have one).
So essentially all economic policies proposed would need to be adopted and preserved in law and a bill of rights for them to be properly implemented. The profit incentive will still be there, but personal responsibility, personal liability (as opposed to corporate liability and limited liability) and a natural ‘cap’ (which will be discussed in my next post) will provide an environment where capitalism’s excesses of exploitation and corruption are curbed dramatically.
So what do you all think of it so far? Please let me know in the comment section below. In my next post I’m going to look at the details of how this would all look a little bit more. Specifically, how it would affect you – in your place of work, at home and on a day to day basis. Stay tuned!
NB: I’ve been heavily influenced by the work of Brian Rush in writing this post, and recommend you check out his work here if you want to learn more.