Soon – in July this year – Labor will be called on again to reconsider the Economic component of its National Platform. What follows here is a consideration of what I believe the ALP should do in developing a perspective there in favour of what might be called a 'democratic mixed economy'. By a 'democratic mixed economy' I refer to a mix of public, private, mutualist, co-operative and other forms of ownership – with management organised along democratic lines.
Practical implementation of the goal of a 'democratic mixed economy' implies an extension of democratic principles and forms to the economy as far as is workable. Though there are limits to what can be achieved for the foreseeable future: the consequence of the prevailing 'balance of forces' both in the global economy and in the domestic Australian economy. By this I imply that there would be those from the dominant capitalist class – domestically and globally – who may object to competition from revivified co-operative, mutualist and public sectors.
To provide greater detail: Promotion of democratic principles in the economy includes support for sectors of the economy which can be held accountable to the populace in their capacities as citizens; as workers/producers; in mutual association; and as consumers. And this applies on both a large scale and a small scale.
In this context Labor must strive after the best balance between various kinds of enterprise which can realistically be achieved for the modern day. This involves checks and balances between producers, government and consumers; and includes strategic socialisation of various kinds.
Admittedly a common error on the Left in times past was to assume that democratisation of production alone was sufficient to end the injustices of capitalism. Yet as the socialist Revisionist Eduard Bernstein recognised a long time ago there were problems that could arise even amidst sweeping co-operative ownership by the associated producers. To begin, Bernstein supposed that as a consequence of evolving hierarchies within co-operative enterprises – developing in the context of a necessary division of labour – solidarity and the egalitarian spirit could break down. (Bernstein, 1961, pp 109-116). This is clearly a danger that producers' co-operatives would need to keep in mind even amidst serious gains for the 'democratic sector'.
Meanwhile, spiralling wage rises secured from the position of a "monopolist productive association", and which simply passed on the costs to the broader community - would need to be scrutinised. Hence, Bernstein argued that as the "mistress of a whole branch of production", even democratic producers' associations could become "antagonistic to socialism and democracy'. (Bernstein, 1961, pp 114-119, 138-141).
For Bernstein, therefore, the solidarity of proletarians in their capacity as consumers was as necessary as their solidarity in their capacity as producers. Associated consumers, here, (like trade unions) could contain profit rates. (Bernstein, 1961, pp 135-139) That is why the 'democratic mixed economy' must empower people in all their capacities – as producers, but also as consumers and citizens.
With this in mind - In addition to existing private enterprise, and the need to remain engaged with the transnational corporations whose innovations and investment are essential to Australian jobs and material living standards, Labor's vision for a 'democratic mixed economy' must include an expanded role for the following:
- producers' co-operatives of various types – on both a large scale and on a small scale; This must also to include multi-stakeholder co-operatives which involve producers, regions and government
- consumers' co-operatives/associations through which the associated consumers are empowered
- Mutualist enterprise; for example Mutualist insurance
- natural public monopolies, including in areas of essential services and infrastructure, where duplication of cost structures can be avoided to the benefit of the economy at large, and where the superior credit ratings of government result in more efficient finance
- other public infrastructure (eg: where a natural public monopoly cannot apply because of existing privatisation; eg: through Public Private Partnerships)
- strategic Government Business Enterprises which actually enhance competition in areas of oligopoly, concentrated market power and potential collusion; and also hence enhancing accountability to consumers
- Government Business Enterprises which can also compete internationally - subject to global market forces
- Public investment in Australia's Natural Resources which are properly the property of the Australian people collectively.
- Co-determination agreements between workers, unions and business – supported through a legislative framework
- Democratic collective capital formation, including through the superannuation system, but also through public pension funds which will support the operation of a strong and fair system of Pensions in this country far into the future
To these ends Labor must assert that there is a role for government in extending democratic principles and forms to the Australian economy. That includes:
- through tax breaks, advice and cheap credit for co-operative and mutualist enterprise; and including public funding and support for consumers' associations
- through co-investment to help co-operative enterprise upgrade its economies of scale so as to remain competitive in larger markets while retaining the co-operative form
- through the creation/construction/maintenance of government business enterprises, social services and welfare, and public-owned infrastructure
- through an active industry policy
Finally, in keeping with its principles Labor must not ever deliver monopolies or near-monopolies into the private sector because this may result in an abuse of market power.
Hence there are occasions where only natural public monopoly can do. Again: Duplication of cost structures in a competitive framework can be wasteful; but private monopoly or oligopoly can give rise to problems with the abuse of market power.
Strategic socialisation of different kinds can also ameliorate exploitation; and sometimes even enhance competition where appropriate.
Progress in extending a democratic mixed economy can also assist in ameliorating the self-destructive aspects of capitalism, while extending the principle of democracy into the economy in such a way as advances social democracy not just into the distant future - but beginning here and now. For instance – natural public monopolies which contain overall cost structures in an economy can even pass on a portion of those efficiencies to the private sector itself. Therefore in a way which may appear anti-intuitive to neo-liberal ideologues at first – natural public monopolies can support capitalist enterprise.
This Labor activist hopes that the principles considered in this article will somehow find themselves into the 2015 ALP National Platform – as policy-makers consider the best way forward for Labor between now and its National Conference in late-July.
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