{"id":207064,"date":"2022-03-14T12:00:49","date_gmt":"2022-03-14T12:00:49","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=207064"},"modified":"2022-03-14T06:59:53","modified_gmt":"2022-03-14T06:59:53","slug":"ruling-out-social-democracy-as-an-option-and-a-way-to-rule-it-back-in","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2022\/03\/ruling-out-social-democracy-as-an-option-and-a-way-to-rule-it-back-in\/","title":{"rendered":"Ruling Out Social Democracy as an Option and a Way to Rule It Back In"},"content":{"rendered":"

14 Mar 2022 – <\/em>A decisive misunderstanding prolonging today\u00b4s mega crisis is the lingering belief that social democracy, as it existed in Europe during the thirty glorious years after World War II, and in a different form in the USA during the four terms of Franklin Roosevelt\u00b4s presidency, is a viable option in today\u00b4s world.\u00a0 Although most progressive thinkers today would deny that they suffer from this illusion, I would say (and the reader is free to disagree) that at a deep level it is so widespread that it is taken for granted, and that for this reason well known reform projects \u2013including \u00a0those associated with Yanis Varoufakis and Jeremy Corbyn in Europe; with Bernie Sanders, AOC, and Robert Reich in the USA; with a growing number of left-leaning presidencies in Latin America; and with the floundering remnants of social democratic movements inspired by leaders like Nelson Mandela and Julius Nyerere in Africa, run a real risk of being non-starters..<\/p>\n

Non-starters?\u00a0 This is strong language.\u00a0 Nevertheless, I think I can make a case that it is not an exaggeration by calling only two witnesses, Joseph Schumpeter and Jeffrey Winters; and still have space left to sketch a way to reinvent social democracy in order to rule it back in.<\/p>\n

But first a qualification: Under unusual conditions (such as those that prevailed in Europe during the trente glorieuses<\/em>) social democracy is <\/em>a viable option.\u00a0 Contemporary examples are Norway and Bolivia.\u00a0 Both are in the embarrassing position of enjoying \u00a0high and stable (Norway) or growing (Bolivia) levels of social justice made possible by capturing rents from fossil fuels, during a period of history when the natural sciences and Greta Thunberg are telling us (truthfully) that fossil fuels ought not be mined, sold, and burned.\u00a0 Nonetheless, Norway and Bolivia are making social democracy work; and in the case of Bolivia also \u201crestoring the kinship worldview\u201d (Ubuntu<\/em> in Africa, buen vivir<\/em> in Latin America, and with many analogues in all the other parts of the world.)<\/p>\n

In 1919, at the age of 36, Joseph Schumpeter became Minister of Finance in the newly founded Republic of Austria.\u00a0 The socialist President, Karl Renner, had published in 1904 Ein Beitrag zur Kritik des<\/em> b\u00fcrgerlichen Rechts<\/em>\u00a0(later translated into English as The Institutions of Private Law and their Social Functions<\/em>).\u00a0 Renner had argued that if social democrats could achieve electoral majorities they would be able to transform capitalism while staying within the framework of modernized \u00a0Roman Law (Common Law in the Anglo-Saxon countries)\u00a0 that constituted the rule of law in modern republics.\u00a0 Similarly, Hjalmar Branting, the early leader of Swedish social democracy, had argued that the achievement of universal suffrage would make democratic socialism inevitable. \u00a0\u00a0In 1918, Schumpeter\u00a0 published Die Krise des Steuerstaats <\/em>(The Crisis of the Tax State<\/em>), arguing, first,\u00a0 that prior to modern republics, rulers had many sources of income. Their greatest single source of income was rents from land ownership. The modern republic was inseparable from a liberal legal framework, limited government, reliance on taxes for government income, and a market economy.<\/p>\n

\u201cWhat matters is that\u00a0 the potential tax yield is limited not only by the supply of the taxable object, less the subsistence minimum of the taxable subject, but also by the nature of the driving forces of the economy.\u201d<\/em> (p. 115 of the English translation)<\/p><\/blockquote>\n

This somewhat opaque sentence from 2018 predicts the tax competition among nations of 2022.\u00a0 Given the nature of the driving forces of the economy, persons and corporations whose permissive acts (investments) start economic activity are wined and dined and subsidized.\u00a0 Low taxes, access to credit; infrastructure and security provided at public expense, and guarantees that profits made in a country can freely be moved out of it, are among the standard policy tools for getting investors \u201cexcited\u201d about investing.\u00a0 (Dani Rodrik, One Economics, Many Recipes<\/em>)<\/p>\n

Schumpeter\u00b4s tenure as Minister of Finance lasted less than eight months.\u00a0 In his letter of resignation, he explained that he was being asked to perform an impossible task and to deceive the public.\u00a0 A tax state (Steuerstaat<\/em>) could not be a welfare state.\u00a0 In my book co-authored with Joanna Swanger, The Dilemmas of Social Democracies <\/em>(2006) we do case studies of Spain, Sweden, Austria, South Africa, Indonesia, Venezuela, and the evolution of the economic philosophy of the World Bank. \u00a0They show that under normal circumstances Schumpeter\u00b4s view tells it like it is.\u00a0\u00a0 \u00a0Renner and Branting were mistaken.\u00a0 The Swedish (Rehn-Meidner) model could govern a high wage and full employment island (Sweden) in a low wage and high unemployment ocean (the world) under unusual circumstances, but when normality came home, illusions became homeless.<\/p>\n

In 1996 Jeffrey Winters published Power in Motion: Capital Mobility and the Indonesian State.\u00a0 <\/em>Back in 1936, Keynes had already emphasized two points sometimes called Staggering Facts: the chronic weakness of effective demand, and the chronic weakness of the inducement to invest; and consequently the chronic tendency of the economy to stop, not to go.\u00a0 It stops when investors do not invest; it goes when they do invest. \u00a0Employment is a function of how much labour-power employers hire. The employers hire just enough workers to produce as much merchandise as they think they can profitably sell.\u00a0\u00a0 \u00a0Keynes called investment the causa causans <\/em>of employment.\u00a0 Winters elaborates:\u00a0 \u201cAnd it is precisely in designing and implementing policies [of the governments hr] that meet the population\u00b4s investment and production needs, by first satisfying the core objectives of those controlling capital <\/em>that the structural dimension of investors\u00b4 political power finds expression.\u201d\u00a0 (page 3)<\/p>\n

It follows that governments do not govern.\u00a0 As J\u00fcrgen Habermas had argued in The Legitimation Crisis <\/em>in 1973, in modernity the market is the primary institution.\u00a0 The government is secondary.\u00a0 Markets command governments more than governments command markets.\u00a0\u00a0 Winters further elaborates:\u00a0\u00a0 Meeting the physical needs of the population, especially when it is a large urban population with no capacity to retreat into local subsistence agriculture, depends on first satisfying the core objectives of those controlling capital.\u00a0 <\/em>Therefore, <\/em>governments, whatever their ideology may be, in practice devote themselves to attracting investment and to discouraging disinvestment (capital flight).\u00a0 Governments that fail to comply with this structural imperative do not last.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/em>\u00a0\u00a0<\/em>\u201cWhen investors choose not to invest, policymakers are powerless to force them.\u201d<\/em> (Ibid.) This third Staggering Fact, like the first two, justifies the use of the word \u201cstructural.\u201d\u00a0 \u201cSocial structure\u201d is a concept studied in detail by Doug Porpora and Tony Lawson, to whose works I refer anybody interested in a deep dive into its meaning and consequences.\u00a0 Social structure is more fundamental than legislation.\u00a0 It is presupposed, not created, by economic models.\u00a0 Social structures tend to be taken for granted as natural, and to be ferociously defended as sacred. \u00a0\u00a0In modernity the basic structure is named in many ways by liberals, by Marxists, and by others who are neither liberals nor Marxists.\u00a0\u00a0 One way to name it is: The basic social structure is \u00a0the allegedly God- given \u00a0or Nature-given right of a person (and also of \u00a0a \u00a0corporation granted the rights of a person) to liberty and to property.\u00a0 Basic \u201cstructural\u201d rights trump needs.\u00a0 When investors choose not to invest, policymakers are powerless to force them because<\/em>, given the basic social structure, the need for food, for dignity, for employment, the need to save the biosphere, and any need whatever, can be satisfied if and only if, first<\/em>, property owners freely choose to invest.<\/p>\n

Winters goes on to demonstrate the existence in our times of a further extension of a logic that has been implicit in capitalism from the beginning.\u00a0 David Ricardo (1772-1823) thought about it, wondering why capital did not always flow to whatever location offered the highest profits.\u00a0 Ricardo\u00b4s answer was that investors feared losing their money if they sent it away to distant places with strange customs and poor law enforcement.\u00a0 Today\u00b4s accelerating globalization that Winters writes about presupposes a global world order solving the problem Ricardo worried about.<\/p>\n

We now live in the time of what Winters calls the Locational Revolution.\u00a0 Its full effects will be incalculable. They are yet to be felt.\u00a0 In our times, the times of the Locational Revolution, controllers of capital decide which laws to obey when they decide where to locate.\u00a0 Governments compete to please them.\u00a0\u00a0 Legislators write laws designed to stimulate a nation\u00b4s economy.\u00a0\u00a0 They try to make it go, but only controllers of capital can actually make it go.<\/p>\n

(I simplify, using the expression \u201cthe economy\u201d as it is commonly used, while knowing that, as Hazel Henderson and others have shown, more than half the world\u00b4s work is done outside \u201cthe economy\u201d that gets so much attention and whose malfunctioning does so much damage.)<\/p>\n

I hope the above is a sufficient introduction to reasons for ruling out social democracy as we have known it in the past as an option for the present.\u00a0 It leaves some space to write about how to rule a reinvented social democracy back in.\u00a0 It will be convenient to start with Johan Galtung\u00b4s triple analysis of violence: direct violence, structural violence, and cultural violence.<\/p>\n

Picking up on an idea from Pierre Bourdieu, Magnus Haavelsrud and Alicia Cabezudo have been developing peace education methods based on the principle that when culture and social structure conflict, social structure tends to change.\u00a0 I do not know whether anyone else is working along similar lines.\u00a0 Speaking more generally, I recommend \u2013-and I detect growing counter-cultures and scientific\u00a0 research programmes moving in the direction I am recommending \u2013 seeing cultural violence as more fundamental than structural violence, indeed as its root cause and as the source of its constitutive rules.<\/p>\n

Structural violence, in turn, massively creates direct violence (as does massive emotional starvation at birth and in early childhood, as Darcia Narvaez has shown \u2013but, as Daniel Goleman points out in his work on emotional intelligence, the emotional starvation of millions of children is itself largely a consequence of overstressed and overworked parents struggling to get by in today\u00b4s global economy).<\/p>\n

To see anthropology and sociology \u2013and not economics\u2014as the fundamental social sciences, and to see fundamental social science as historical (as both Emile Durkheim and Max Weber, among many others, advocated) is a step toward freeing the human mind from liberal and neoliberal hegemony.\u00a0 A point hinted at above, that the ferocious defence of extreme and oversimplified versions of liberty and property is a knee jerk response of majorities, including many of the victims most damaged by the system, is a symptom of hegemony.<\/p>\n

Culture can be read as the ecological niche of the human species.\u00a0 Culture is much older than social structure \u2013social structure being a concept more at home in the modern Gesellschaft <\/em>than in the traditional Gemeinschaft.\u00a0 <\/em>Social structure can be seen as a key concept for sociology, while culture is the flagship concept of the more comprehensive science of anthropology.\u00a0 Culture links the natural sciences to the social sciences.\u00a0 It links evolutionary biology to social psychology.\u00a0\u00a0 Lev Vygotsky embedded psychology in culture, history, and biology when he founded the intellectual tradition called Cultural Historical Activity Theory (CHAT).<\/p>\n

Now, at a time in history when a hegemonic rule of law cements in place a locational revolution that disempowers governments, a promising educational strategy reframes the laws of economics \u2013previously framed as eternal and universal analogues of Newton\u00b4s laws of motion\u2014as cultural constructions built by 18th<\/sup> century European culture from materials provided (mainly) by the modern reception of Roman Law.\u00a0 Modern western liberal culture, like any other culture, can be reconstructed as new generations learn it and change it as they learn it.\u00a0\u00a0 This is happening.\u00a0\u00a0 It is happening in the light of contemporary natural science and in dialogue with the \u201cdefeated epistemologies\u201d of Asia, Africa, and Latin America that are coming to voice and demanding to be heard.<\/p>\n

Seeing the culture concept (Google James Boggs, The Culture Concept as Theory, in Context<\/em>) as primary, and as a powerful force for structural transformation, motivates building cultures of peace today, here and now.\u00a0 It suggests (as Haavelsrud puts it) using education from below to counter oppression from above by governments hell-bent on making big business even more profitable than it already is by intimidating labour even more than it is already intimidated.\u00a0\u00a0 \u00a0It encourages governments like Gabriel Boric\u00b4s new government here in Chile, that are trying to reinvent social democracy after its catastrophic defeat by finance-capital-driven neoliberalism.<\/p>\n

Here are two more contemporary trends we have going for us:<\/em><\/p><\/blockquote>\n

One is the unbounded idea.<\/strong>\u00a0 When the workers lost the class struggle, the capitalists lost too.\u00a0\u00a0 They created a world that nobody wants to live in \u2013and in which nobody could live in much longer even if they wanted to, because it is unsustainable.\u00a0 These realities motivate growing support for movements that are aligning across sectors for the common good. There is more voluntary sharing of wealth.\u00a0\u00a0 There is more thinking outside the box, forgetting the old dichotomy market vs. government, while realizing that for any given problem that we set out to solve together, the number of possible solutions is in principle unlimited.<\/p>\n

Another trend going for us is the ethics boom.<\/strong>\u00a0 As if by instinct operating at a gut level, there is a massive groundswell of awareness \u00a0that if there is still hope for humanity, that hope requires, as Buckminster Fuller put it,\u00a0 \u201cgraduating\u201d to a higher ethical level.\u00a0 \u00a0\u00a0Not to a bogus ethics that glorifies sacrificing the needs of the many to the property rights of a few, but to \u00a0a care ethic, to an ethics of responsibility, human rights, dignity, cognitive justice, \u00a0inclusion, service, solidarity.\u00a0\u00a0\u00a0\u00a0\u00a0 Today we should adopt as an ethical starting point Andrew Sayer\u00b4s proudly mundane principle that the purpose of an economy is to enable people to live well.\u00a0 We should embrace Martin Luther King Jr.\u00b4s concept of one Human Family living in one World House: and Evelin Lindner\u00b4s Big Love.\u00a0 \u00a0The typical objectives of social democracies, such as everyone having good health care, housing, and pensions, should be regarded as ends-in-themselves, to be accomplished one way or another.<\/p>\n

_____________________________________________<\/em><\/p>\n

\"\"<\/a> <\/em>Prof. Howard Richards is a member of the\u00a0<\/em>TRANSCEND Network for Peace Development Environment<\/strong><\/a><\/em>. He <\/em>is a philosopher\u00a0of social science <\/em>and<\/em> Research Professor of Philosophy at <\/em>Earlham College, Richmond<\/em>, Indiana<\/em>, USA<\/em>.\u00a0He was educated at Redlands High School in California, Yale, Stanford, University of California at Santa Barbara, University of Toronto, Harvard and Oxford. He currently teaches in the University of Cape Town`s EMBA programme.\u00a0His books include:\u00a0<\/em>The Evaluation of Cultural Action; Letters from Quebec; Understanding the Global Economy; The Dilemmas of Social Democracies; Gandhi and the Future of Economics; Rethinking Thinking; Unbounded Organizing in Community;\u00a0and<\/em>\u00a0The Nurturing of Time Future.\u00a0His new book, written with the assistance of Gavin Andersson, <\/em>Economic Theory and Community Development: Why Putting Community First Is Essential for Survival, is now available from the publisher, Dignity Press, and from Amazon and other major booksellers, as a print book and as an eBook<\/em>.<\/em> howardri@earlham.edu<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

14 Mar 2022 – A decisive misunderstanding prolonging today\u00b4s mega crisis is the lingering belief that social democracy, as it existed in Europe during the thirty glorious years after World War II, and in a different form in the USA during the four terms of Franklin Roosevelt\u00b4s presidency, is a viable option in today\u00b4s world.\u00a0<\/p>\n","protected":false},"author":4,"featured_media":191722,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[276,433,70,75],"class_list":["post-207064","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-paper-of-the-week","tag-democracy","tag-europe","tag-usa","tag-world"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/207064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=207064"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/207064\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/191722"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=207064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=207064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=207064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}