above: A recent book by Eric Aarons - exploring the clash between Karl Marx and Friedrich Hayek.
In the following article former Communist Party of Australia leader Eric Aarons responds to our earlier article by Shayn McCallum. (Shayn's article can be found here: ) Aarons critiques 'social market' approaches to change, positing global warming and other environmental challenges as the most important issues facing humanity. While recognising the necessary role of some markets, Aarons proposes an egalitarian services-based economy, and an economy which goes beyond the treadmill of over-work and over-consumption. DEBATE WECOME!!!
nb also: In addition to our article here, a very detailed review of Aarons' larger, more academically-inclined book on the same theme of Hayek and Marx can be found via the link below - where we welcome debate!!!: SEE: http://hayekversusmarx.blogspot.com.au/2011/07/responding-to-eric-aarons-hayek-versus.html
Eric Aarons, September 2012
This article is a response to Shayn McCallum’s article
‘State and Market – a Democratic Socialist Approach’ that appeared on a Tristan
Ewins’ website. I do so because the concerns it deals with are close to my own
– that is, seeking to formulate a
substantive definition of what currently
active people of the left should do or ‘stand for’.
My response is not intended as a polemic, though it is
forthright and direct because I assume that neither Shayn nor I wants to smarm
over difficulties or differences. I therefore begin with the title of his piece
stated above.
Shayn poses ‘a mixed economy’ as one reasonable answer to
the question posed by his title ‘State and Market’. But that term, which I also
use, can’t take us very far or generate enthusiasm unless the nature of the mix is further clarified.
I also use the term, sometimes with the proviso that the ‘mix’ must be devoid
of the extremes evident in the continuing practices of capitalism and the type
of socialism that came to prevail in the Soviet Union or Maoist China and
blackened the very term.
But I believe that ‘mixed economy’ is not made adequate by
adding the word democratic, or the phrase ‘devoid of extremes’. Similar
problems arise with ‘economic democracy’. I agree that ‘The Social Market’, as
devised by its founders and analysed by Australia’s Hugh V. Emy, Professor of Politics at Monash University,
poses little danger to the existing system, or possesses any significant
transformative power.
Thus we seem to agree that no expression has yet been found
that contains the emotional and intellectual force possessed in the past by the
‘left’, and backed by the capacity to enthuse people into action by
concretising general aims in specific strugggles. Shayn points out that much of social
democratic (in Australia, particularly Labor Party) discourse is ‘excessively
tenuous, somewhat vacuous’ and limits its criticism of [neo] liberalism to the
details rather than its over-arching vision.’ That comment, I believe, is
justified, but loses much of its force when Shayn himself fails to outline what
the content of an effective critique of that vision would be.
I don’t feel lacking in that area, having written three
books on the subject, the last being Hayek
versus Marx (2009). The publishers insisted on that title because it was
part of a planned series (mine came out as the 180th work in that series). But I eventually persuaded
them to add the subtitle: And today’s
challenges, the significance of which for discussions like the present one
I explore later.
But I think it is essential to appreciate the vast
difference between the retail markets that we visit almost every day, and the
financial markets that played a crucial role in generating the Great Financial
Crisis of 2008, to the present time, when it threatens to break out with even
greater force at any moment in Europe.
The
necessity of some markets
As Shayn clearly recognises, markets existed to one degree
or another in practically every society later than the stone age. (For
instance, the Conquistadores found extensive markets in some of the countries
of what is now called Latin America). But Shayn neither distinguishes between
different kinds of market, nor explains the reasons for the universal existence
of some of them.
The foremost of these concerns has to do with what most of
us perforce do every day, in response to the natural evolution of the division
of labour. This compels us to engage in exchanges, usually of money from our
wages, to obtain the mix of different commodities we need to live. These range
from foodstuffs to transport, liquor, haircuts, entertainment and other items.
One doesn’t need a vivid imagination to envision the difficulties, not to speak
of the public outrage, that would result from any attempt to plan and institute an alternative, for
example, one of state allocation of the same
items or meals for all irrespective of the work they may, or may not
have contributed in Mao’s ill-fated Chinese rural communes, while in
competitive marketts, it is equals that are generally exchanged.
(I don’t think it
necessary to pursue the many further variations that arise in areas such as
whitegoods, TVs, computers, houses or cars, where the state may step in with
requirements for performance standards, health requirements and the like.)
The
Social Market
I agree with Shayn that the term ‘social market’ doesn’t take
us very far. Its origin and meaning was well analysed by Australian academic
Hugh Emy as the vision of some genuinely liberal-minded post-war German theorists,
couched in moral as well as economic terms. It centred on the idea of
‘co-determination’ by owners and workers in businesses but ruled out any
interference with ownership relations. It had some progressive content, but was
by no means a transformative development.
Shayn rather airily dismisses cultural issues and contests,
defining them as though they were lightweight compared with a physical presence
or direct economic content. Without trying here to cover the full scope of
culture, political activists need to realise that morals, values and attitudes,
among other features of human behaviour and consciousness, are sources of
action or passivity, which are surely of central importance in politics.
Without entering the field of values, for instance, I see
little chance of constructing an effective critique of the neo-liberal vision
which at present still holds (now less securely) a hegemonic position, or
defining an effective social democratic one. Shayn instead speaks of
confronting the ‘questions of class power’, that he then nominates in purely
economic terms as ‘redistribution or the provision of social goods and
services’.
I am far from dismissing the importance of this for a
segment of the population of our country, a similar proportion of other
economically developed countries, and massive numbers in the undeveloped. But I
am convinced it is the wrong direction, at this particular juncture, in which
to look for a liberating, emancipatory, transformative orientation.
Today’s main
challenges
The general social conditions and forms of economic
restructuring that would be involved in meeting those challenges, the first of
which is Global warming, requires sober calculation, including of the time
frame. Solutions need to be, or clearly becoming, politically possible within two or three decades, or the problem
could take a disastrous turn, for example by the melting of the tundra in
Siberia, Greenland and elsewhere which would release huge quantities of now
frozen methane – an even greater ‘greenhouse effective’ gas than carbon
dioxide.
‘Politically
possible’ means that to be democratically effected there has to be near enough
to majority support for the measures involved type. There are already in
existence more than needed of what I call ‘if only’ plans – ones that pose preconditions having little
chance of being realised, and which in any case are inadequately campaigned
for.
Global Warming occurs today mainly because we are burning
increasing quantities of fossil fuels (coal, oil and gas) to generate our
ever-increasing energy requirements. The burning process produces carbon dioxide gas which has
the physical property of acting like a greenhouse – that is, a kind of‘house’ device,
usually made of glass that lets in the sun’s rays, or is internally heated to
cultivate plants that need heat to grow, but doesn’t let the heated air inside
escape. Carbon dioxide and other gases, in the quantities now being generated
by burning, mix uniformly in the global atmosphere from whatever country they
come, warming the world, from frozen poles and glaciered areas to the tropics,
causing the escalating number of weather extremes we all see on TV or ourselves
experience, and raising ocean levels by melting ice.
Earth’s resources are not infinite
The related major challenge of our times is first of all the
growing threat to the sustainability of the supply base for all this burning of
fossil fuels. It is clear that oil will
soon run out, while coal and gas won’t last forever. Water is becoming scarce
in many places, and large quantities of underground water are being polluted by
the fracking of coal and shale beds to produce gas. ‘Rare-earth’ elements,
essential for many sophisticated electronic apps are scarce. Phosphorus, one of
our main fertilisers (and an essential component of DNA) is in short supply, as
is potash.
Fish are becoming scarcer, and some of its best food species
are on the verge of extinction, while ever-larger trawlers are built to pursue
others still existing. New agricultural land is scarcely to be found and the
productivity of large areas is being reduced by overuse and more extreme weather events.
Much more information
is readily available, but is not acted upon. Nor are either the dangers, or the
transformational possibilities flowing from victory in the struggle to overcome
them sufficiently taken on board by the left including, regrettably, the trade
unions.
The scale of all this
Geology Professor Mike
Sandiford of Melbourne University gives us a striking measure of this scale:
Rivers and glaciers have moved about 10 billion
tons of sediment from mountain to sea each year on average over geological
time. Each year humans mine about 7 billion tons of coal and 2.3 billion tons
of iron ore. We shift about the same amount again of overburden to access these
resources, along with construction aggregate and other excavations. In short we
are now one of the main agents shaping the earth’s surface. (Sydney Morning Herald, May 23, 2011 )
The course of solving it will
not only help to change the present unfavourable-to-the-left balance of
political forces. It will provide us, and especially succeeding generations,
with clues about the best course to further economic and cultural steps.
* * *
Inverting the meaning of Karl
Polanyi’s striking title to his famous book The
Great Transformation which he used with the subtitle The Political and Economic Origin of Our Time, I have called
success in meeting fully the present challenges The Greatest Transformation.
This may seem exaggerated, but
consider the fact that for the first time ever in history, all countries and
cultures will eventually have to become involved, and that the vast majority of
people will then have to be guided by the principle that excesses in resource
consumption must be avoided.
Some may be alarmed at this and
consider it to be going backwards. But I hold that it is true progress,
liberating us from toils of consumerism which daily (and nightly) consume the
time and energy of a growing proportion of the world’s population, while also
keeping a large proportion of humanity in wretched poverty or on the brink of
starvation.
Transformation, emancipation
Those on the political right,
centred on the ideology of neo-liberalism, and their rabble-rousing foot soldiers,
simply deny what is there to be seen and experienced. Maybe they simply fear
change as such, perhaps believing that what now exists is the pinnacle of
possible human existence, as Frances Fukuyama once asserted, but now, to his
credit, has changed his tune.
Even those on the left, the
core of which are the social democrats, and the Greens (who are to the left of
them on some issues), aspire to something better and more constructive for the
future, but have yet to develop a sufficiently coherent social philosophy.
And I am concerned that Shayn
gives so little attention to these issues. Could it be that he holds the view
common among a small section of the left, that no substantial progress can be
made in any social field until the economic base on which it has arisen is
first transformed? Such views have dogged the socialist cause almost from its
beginnings, with Eduard Bernstein, for one, struggling with it through most of
his life.
Of course, no one political
strategy could meet every different set of conditions; but my judgment is that
the issues stated above are tailor-made for a strategy of resolving pressing
major issues, not instead of
(perhaps) more basic ones, but rather as an essential step on the way to
actually doing so.
Consumption is essential up to
the point of sufficiency (which of course cannot be too narrowly defined) but
taken beyond that to the very aim of life is a view and practice that is far
from liberating. It binds a majority of people in the economically developed
countries to a daily (and often nightly) treadmill that is now restricting
rather than helping to extend our development as human beings.
Friedrich Hayek, who developed neo-liberal philosophy to its
present (though declining) predominance, helped elevate consumerism to its
present peak above more worthy and humanly satisfying aims by denouncing those
who rejected his view ‘that the great ideal of the unity of mankind should in
the last resort depend on the relations between the parts being governed by the
striving for the better satisfaction of their material needs.’ (LLL2, 111)
He followed that up by denigrating working people with the
assertion that ‘their intuitive craving for a more humane and personal morals
corresponding to their inherited instincts is quite likely to destroy the Open
Society [capitalism].’ (LLL2, 146).
Let us wear this as a
badge of honour.
Human
development
One aspect of switching our
view of progress from more material goods to greater human development is to
expand and deepen our relationships with other human beings, family and
otherwise. This activity is both pleasurable and emancipatory, cultivating our
human sensibilities whose possibilities are inexhaustible, as are the possible
accomplishments of our reason.
Furthermore, caring occupations require increased human
participation, as do educational, and health services, and individual and
collective cultural and artistic pursuits, while engineering and related
developments to create more material commodities often cut employment, though
capturing sufficiently more of the sun’s heat and electronic rays to replace
burning for energy will keep the need for engineering and related activities,
including science, fully employed indefinitely into the future.
The
Services Society
Largely unnoticed and unremarked till recently is the fact
that provision of services rather than material consumption commodities is by
far the largest part of the economies of the developed countries.
Last year, two Reserve Bank
economic analysts, Ellis Connolly and Christine Lewis, quantified the changes
in Australia. Titled Structural Changes
in the Australian Economy, it showed that 80 per cent of the total value
produced in our country came from the service sector, and embraced 85 per cent
of the total workforce. The remaining 20 per cent of value was produced by
agriculture, manufacturing and mining which employed the remaining 15 per cent of
the workforce.
I queried them about the
inclusion of ‘construction’ (for instance, construction of massive office
blocks) and they replied that they did so because it is listed in the Australia
and New Zealand Standard Industrial Classification (ANZSIC). However, they did agree that there is no
clear distinctions between industries that are ‘services’ and those that are
‘non-services’.
As a lay-person in this area I
would estimate that a more realistic figure might be about two thirds services.
But that figure, and the fact that only 15 per cent of the workforce, in
manufacturing, mining and agriculture, produces no more than 20 per cent of all
value indicates a major restructuring of society is already under way, I
believe with great significance for proceeding to ‘the greatest transformation’ that humanity must
accomplish before the end of this century. And building on a
spontaneous/evolutionary development is generally far easier to accomplish than
trying to create something so radically different that people may be more
reluctant to embrace it, while it can also be more subject to violent
reversal.
Consumption goods cannot be
distributed equally because people and families are different, have different
responsibilities, different incomes and different tastes, Services, however,
from electricity, water and sewerage supplies, health and education and
transport and communication services … are equally essential to everybody,
indeed possess an egalitarian aspect that is desirable, but rare in present society. This fact is
expressed in the so far unsuccessful attempt to globalize and privatise trade
in services through GATS (General Agreement on Trade in Services), leaving most
services still locally supplied, with a major portion still in state hands.
The Australia Institute conducted surveys that revealed a
majority would prefer better services over tax cuts. When asked which election
promise was more likely to win their vote, 56 per cent of those surveyed chose
better services to increased living standards compared to 44 per cent who said
that tax cuts would sway their vote. Of all those surveyed, 63 per cent wanted
services to benefit Australians equally.
As well as treasuring this egalitarian factor, we should
remind ourselves e forget conditions of work have an effect on ways of
thinking, ‘big industry’ significantly generating trade unionism and to a
certain extent socialist thinking. This is not to suggest that trade union and
socialist sentiment cannot arise among workers in, for example, caring
activitie, only that they may have to be approached in a rather different way,
as do workers in country areas compared with the city. The conclusion should be
that understanding the ways of thinking of differently placed, differently
formed, differently parented and differently educated people, is not simply the
product of class economic relations.
Taken
generally, we need to realise that politics is an art rather than a science
where ‘theory’ alone is adequate to decide on policy and practical activity.
Or, put somewhat differently, the common view in left, right, and to some
extent in neutral or various other circles, that property or other economic
relations have to come first – that these, often called material relations, must change before any significant society-wide
alternatives can occur.
My
contention is that in the concrete conditions of global warming and threats to
planetary resource provision, tackling these problems should be the priority,
and that succeeding in the endeavour to overcome them will do more than any
other available way in which to clarify what economic changes can politically
then be made.
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