On every front, collectivism is in retreat.
With the fall of the Berlin Wall, the idea of state socialism is
dead. For many people, the
triumph of the market economy has legitimised the ideals of economic
self-interest. Throughout the
Western world, the traditional role of government is under question: the
large, centralised bureaucracies of the welfare state appear to be
out-of-step with an increasingly self-reliant electorate.
The public’s faith in the public sector is at an all-time low.
So too, we have entered an era of political
disengagement. The hierarchies
of organised politics have generated enormous public distrust and
dissatisfaction. Indeed, it is
difficult to think of a government policy that still fosters a strong
sense of collective interest and collective responsibility.
We are losing the battle for public mutuality.
surprisingly, the foundations of community life
are also weak. Society is
experiencing exclusion at the top as well as the bottom.
The trend towards walled housing estates and gated communities
erodes social capital, no less than the exclusion of poor neighbourhoods.
There is a thing called society but unhappily, we are losing it.
This is the crisis of Left-of-Centre politics: the
widespread decline in collective institutions and collective ideals.
Unless this crisis is addressed, our hopes for social democracy
will hollow out. We will
become a cause for power, rather than a cause for a good society.
While from time to time we will still win elections, we will not
know what to do with our electoral success.
As a starting point, we need to face up to the
uncomfortable truth. Too often
on our side of politics there is a tendency to pretend these problems
Keynes famously remarked that when the evidence changed he was inclined to change his mind. This is the challenge now confronting Left-of-Centre politics. Globalisation and the information revolution are remaking our society and its economy. A new politics is in motion, opening up new fault-lines and issues in the public arena.
We can either face up to this reality or be swept
away by it. Old agendas based
on the politics of statism, unionism and class are fading away.
The challenge is to develop new strategies, to create the new
policy tools by which we can reinvent collectivism.
This does not require a loss of Labor values.
Our commitment to social cooperation and social justice is, in
fact, timeless. What is in
dispute is the means by which these goals can be achieved.
This is an argument about policies and reform technique.
It is not a debate about Labor values and beliefs.
Over the past decade, a group of social democrats
have moved down the reinvention path. They have developed a distinctive political project, exploring the
new institutions and forums of a collective society.
Its ideas have been forged by think tanks such as
the Progressive Policy Institute, the Institute for Public Policy Research
and Demos. Its thinking has
been influenced by scholars such as Tony Giddens, Tom Bentley, Charlie
Leadbeater, Amitai Etzioni and Robert Putnam.
I prefer to think of it as the
new social democracy.
Unfortunately, a number of misconceptions have
arisen concerning the nature and purpose of the project.
Some are likely to be aired at this conference.
It is often argued, for instance, that the
In this country, of course, it underpinned the
reform program of the Hawke and Keating Governments and has now become
part of our political orthodoxy. Indeed,
many of those voting for the first time at the Federal poll later this
year were not even born when the Hawke Government was first elected.
They have grown up experiencing no other type of economic policy
than free trade and deregulation.
The new social democracy involves much more than
the management of an open, mixed economy.
It is an attempt to answer the core challenge of Information Age
politics: is it still possible to practice the shared bonds and
responsibilities of a good society? Is
collectivism still viable?
A new politics is required to meet the needs of an increasingly complex
and fragmented society. Political
leaders need to foster partnerships and collaboration across economic and
social boundaries, creating new communities of interest and common
purpose. We need to reconnect
This is not likely to be achieved through the large bureaucracies of
government. There are now
binding limits on the role of public sector, forcing social democrats to
pursue new, non-state forms of collective action.
With the decline of state socialism, we need to embrace the virtues
of civic socialism.
The reconnection of society also needs to cross national boundaries.
This is why the
Economic change has other opportunities.
Capitalism has evolved into a mass system, with a wider spread of
ownership, skills and entrepreneurship.
Social democrats need to take advantage of this process, creating a
stakeholder society in which all citizens enjoy the benefits of financial
capital, human capital and social capital.
In the past, social democrats have relied on large, massified institutions
(such as government departments, trade unions and political power) to
achieve their goals. In the
Information Age, however, hierarchical institutions are losing support and
relevance. The new politics
requires the dispersal of power: enabling citizens and communities to form
new networks of mutual interest and mutual support.
The Politics of Reconnection
In a recent edition of the New Statesman magazine, Etzioni argued that:
This is a very perceptive point.
Finally, in the law and order debate,
both sides of Australian politics have engaged in a bidding war for
tougher sentencing laws. Our
State election campaigns have become a contest to build more prisons and
to put more people in gaol.
These diverse issues reflect a
This is what the
The market economics of the Right and the government bureaucracies of the Left have weakened society’s connectedness. They have not been effective forums for collective action. For Right-wing politics, this is not much of an issue. It has always believed in the supremacy of individual freedom and individual action. For the Left, however, it is a huge problem.
The post-war welfare state was a fine act of compassion, an attempt by governments to eliminate poverty and suffering. For all its achievements, however, the welfare state has not been good at creating collectivism. It has not fostered a feeling of mutual interest and support between people. It has, in fact, delivered an individualised form of compassion.
Left-of-Centre politics has always regarded the state as a collective
institution. In practice, this
has been a delusion. Most of
its work is directed at individuals, discharging rights and entitlements
to citizens, rather than communities.
At the heart of the welfare state are transfer payments, paid
directly from large departments to individuals.
In my experience, the relationship between Centrelink and its
clients is one of open hostility, not mutuality.
Likewise, our health system is highly individualised.
Primary health care is discharged by doctors operating in isolation
from each other. Secondary
care is based on the treatment of individual patients by large public
hospitals. The welfare state
has wiped out the Friendly Societies and other mutual organisations that
formed the basis of the Australian health system prior to World War II.
In education, it is difficult to find a practical expression of
collectivism. Our large State
education departments have not been open to community involvement in the
management of local schools. Through their lobby groups, schools are often
positioned as fighting each other for public funding, rather than working
together for public purposes. This
is the sickness of the State aid debate which unhappily, has now
re-emerged as a poisonous force in Australian politics.
The same criticism can be made of the housing, transport and legal
services of government. In my
electorate, I cannot find an example of government bureaucracies
generating mutualism and social capital.
The welfare state has succeeded in the mass production of rights
and entitlements. It has
failed, however, in its most important task: the creation of a collective
society. No less than the free
market, it has practiced an ethos of individualism.
This is the curse of Left-of-Centre politics.
It has fostered social division instead of social cohesion.
Historically, the Left has followed the grand narrative of class
struggle: the divisive politics of labour versus capital, workers versus
bosses. In recent decades, it
has embraced a rights agenda, subdividing society into a collection of
single identities based on the politics of race, gender and sexuality.
Far from creating social connectedness, this process has generated
social resentment, especially among those groups excluded from positive
The new social democracy deals with this problem by fundamentally
reforming the role of government. It
positions the state as a facilitator of social partnerships.
In every area of public policy, the purpose of government must be
to bring institutions and individuals closer together, to create the
circumstances by which cooperation becomes possible.
We need to practice compassion of a collective kind.
adopted the following strategies to achieve this goal:
that the creation of social rights is accompanied by the exercise of
social responsibilities. Right-wing
politics has used the responsibility agenda for punitive reasons,
especially within the welfare system.
the allocation of government resources as a catalyst for partnership
creation. Only organisations
that are willing to collaborate and draw in new partners should be
eligible for public funding. Society’s
most entrenched problems require cross-sectoral solutions, harnessing the
skills of the public, private and voluntary sectors.
The funding power of the state should be used to leverage
organisations closer together.
the collective effort of communities, whether defined by geography or
shared interests. In the past,
government expected civil society to fit the bureaucratic mould of the
welfare state. Its new role is
to identify and nurture successful community projects.
This is what we call the enabling state. (5)
The objective is to create a new kind of social
solidarity, one that crosses economic and class boundaries, one that goes
beyond personal identities and prejudices.
Piece by piece, we need to rebuild the values of a collective
society. Collectivism, of
course, is a learned habit. Unless
people are given the space and opportunities to practice these habits –
the habits of trust and cooperation – then our society will continue to
fragment. The new social
democracy overcomes this problem through the politics of reconnection.
The Limits of the State
The biggest story in late 20th century
politics was the erosion of government power.
Each of the assumptions underpinning Left-of-Centre politics –
Keynesian economics, central planning and mass welfare – was swept away
by the pace of economic and social change.
On every front, the social democratic promise of interventionist
government is under siege. The
state of the state is weak.
The increased mobility of capital has eroded the
economic powers of the nation state, especially with respect to
macroeconomic policy. It is no
longer possible for governments to spend and regulate their way to
economic success. Internationally,
the need for economic competitiveness has weakened the public revenue
base. Footloose capital has
forced governments to bid against each other for jobs and investment.
Whereas companies used to pay money to governments, the reverse is
These fiscal limits have restricted the size of
the public sector. Policy
makers now face the dilemma of overloaded government: so many funding
demands on the welfare state, yet so few funding sources in the globalised
economy. (6) At the next Federal election, for instance, the ALP is
committed to spending less and taxing less than the Howard Government.
At the bottom line, we stand for a smaller public sector. (7) The
era of tax and spend politics has ended.
For Labor Parties around the world, the biggest
question is how we can reform the welfare state so that it can deliver
social justice within the budgetary constraints imposed by membership of
the global economy. This
requires a different approach to public policy.
Increasingly, our side of politics needs to look to non-state and
even non-parliamentary means to satisfy its goals.
This is what the
The new social democracy is deeply sceptical about the traditional role of government. It looks beyond the pillars of the old politics - state intervention and market forces - for new forms of collectivism and social justice. This is what makes it such a radical notion: that Left-of-Centre politics can achieve its goals without following the statist road.
This approach uses civil society as the primary
agent of social democratic reform. It
regards social capital as the number one issue in public life.
It sees social poverty, the loss of the fraternity between people,
as no less important than financial poverty.
With the decline of traditional institutions, society has entered a
period of moral confusion. People
are longing to belong, to rediscover the shared values and trust of a good
society. They want to focus on
questions of community and morality, not just economic policy.
The old ideologies positioned politics as a
struggle for ownership, the historic battle between socialism and
Ultimately, the choice between government services
and market forces is fundamentally flawed.
It neglects the space in the middle where people come together in
voluntary and community action. It
ignores the mutual interests and associations that make up civil society.
The neglect of this vital middle ground has led to serious
problems, such as youth alienation, street crime, family breakdown and
social isolation. Decades of
celebrating personal freedom have weakened the bonds of community and the
ideals of collective action.
The new social democracy aims to address these
issues through a new form of governance.
It is not possible to create social capital unless people have
things to do in common. This
means winding back the dominance of states and markets and creating the
space within which civil society can thrive.
While, to some extent, this reflects a work in progress, a number
of distinctive themes have emerged. The
Instead of controlling and directing the delivery of services, government
should play the role of a facilitator or enabler.
It needs to act as a junior partner to community effort.
Service provision needs to be devolved to a community level.
When we talk of the public sector we need to talk of charter
schools, adult education programs, community housing associations and
social cooperatives, rather than government departments.
Public policy needs to prevent the incursion of market forces into civil
society, especially within the domain of sport, voluntary associations and
family life. There is not a
market solution for every social problem. (8)
The corporate sector also needs to act with a stronger sense of social
responsibility. In the past,
government pursued the financial regulation of capitalism.
It now needs to improve the ethics and morality of market
More generally, social rights need to be matched by social
responsibilities. So far,
As noted earlier, our serious social problems require a cross-sectoral
approach – harnessing the creativity and resources of the public,
private and third sectors. Social
partnerships are essential to the creation of social capital.
Governments also need to harness the work of social entrepreneurs, the
emerging band of community brokers who combine the best of social and
business practice. Social
entrepreneurialism involves the use of social capital to generate human
and financial capital. It is
finding fresh solutions to the curse of long-term poverty.
The yearning to belong in society extends well into the domain of
democratic governance. Most
people value the process of participation no less than the political
outcomes it produces. Politics
needs to open up many more avenues for meaningful participation and moral
dialogue. In particular, it
needs to develop new forums for deliberative and direct democracy. (9)
Lifelong learning is also vital to the creation of social capital.
It teaches people the habits of tolerance and cooperation: how to
understand the needs and interests of others, how to cross social
boundaries and place their trust in strangers.
In short, a learning society is a good society. (10)
As part of their education investments, governments need to provide
improved public access to information technology.
The Internet, for instance, allows housebound and other isolated
people to create new social contacts and networks.
The information revolution needs to work for the benefit of
society, not just its economy.
These strategies are crucial to the quality of our
society. They reposition
Left-of-Centre politics as an exercise in civic socialism.
Most importantly, they offer fresh hope for winning the war against
poverty, in both its old and new manifestations.
Across all demographic, geographic and income
All the evidence shows that when people have a
high level of social capital and self-esteem they are more likely to make
good use of the material gifts of government: training programs and social
welfare. (11) The success of the welfare state relies heavily on the
success of civil society. Without
trust and social cohesion there can be no end to the poverty cycle.
Traditionally poverty has been defined in terms of
economic capital. The first
and most important step in dealing with financial deprivation, however,
concerns the creation of social capital.
This reality must be at the core of all our efforts and strategies
for ending exclusion. Social
justice has become synonymous with social capital.
The Growth of Globalisation
Internationalism was once an important theme for Left-of-Centre
politics. It was said that the
working people of the world needed to work together to end the
exploitation of labour. The
current campaign against globalisation, however, reflects a feeling of
ultra-nationalism within elements of the Left.
The new social democracy aims to restore the primacy of
internationalism to our economic and social policies.
Globalisation and the Information Age are tailor made for a new era of
progressive politics. The
knowledge economy has freed the labour force from the heavy machines and
degrading work of industrial capitalism.
Highly skilled workers have a strong economic bargaining position.
In effect, they now have ownership of their surplus value.
The purpose of social democracy must be to deliver these
opportunities to all workers, to give everyone a stake in the new economy.
Globalisation has also delivered benefits to the
The social benefits of internationalism are also strong.
Only by bringing people closer together, through advanced
communications and the crossing of cultural boundaries, can we create a
more tolerant and cooperative society.
Imagine the good that comes from millions of school students from
different countries communicating and working together on the Internet
each day. Globalisation of
this kind is the natural enemy of bigotry.
It is the future for our side of politics.
The challenge for modern citizenship is to cross the boundaries of
prejudice and parochialism. Our
loyalties to the local, the regional and the national now need to coexist
with the ideals of good international citizenship.
So too, the identities of modern life – racial, gender and sexual
characteristics – need to sit easily together, without prejudice.
The problem with economic nationalism is that it promotes a narrow,
inward-looking kind of citizenship. Tariffs
and other forms of protection are the economic equivalent of racism.
They encourage Australians to think poorly of people from other
countries and to believe that we would be better off isolated from the
rest of the world. If the
Labor movement is willing to discriminate against other nations on
economic grounds then what credibility do we have in arguing against
Protectionism is not a viable option.
No nation has ever prospered by aiming at economic
self-sufficiency. No society
has ever advanced its culture through an ethos of isolationism.
No community has ever become more capable by locking itself away
from the new frontiers of technology.
Just as much, no political movement can succeed in the coming
century by turning its back on the possibilities of internationalism.
This is not to suggest, of course, that globalisation is perfect or that
the role of government is irrelevant.
Globalisation is not an outcome.
It is a process, full of threats as well as opportunities.
Its impact depends on how well nations respond to this reality.
In a world of constant change and uncertainty, the role of public
policy is all-important. New
strategies and policies are needed to maximise the benefits of
Our first priority must be to strengthen the role of international
economic governance. If
nations are to successfully regulate global capital then they need to
cooperate in global forums. The
European Union offers a good example of this process.
The integration of political power is a logical response to the
global integration of economic power.
This is why the
At an inter-governmental level, the work of the WTO and the ILO needs to
be more effectively linked. It
is absurd, for instance, that the WTO bans imports made by prison labour,
but not those produced by slave labour or child labour.
The IMF and World Bank also have a role to play in lifting labour
and social standards in developing nations.
It is possible for free trade to coexist with civilised corporate
A second strategy involves the development of a learning society.
Whereas nations once relied on machine and muscle power to generate
wealth and prosperity, they must now harness the brainpower of their
people. Across the economy,
production is becoming less resource-intensive and more
knowledge-intensive. A small
This is also the best way of rebuilding social capital.
As a nation, we do not have to choose between the values of
community and the economics of capitalism.
A highly skilled population can enjoy the benefits of both.
Education is a unique public investment.
It not only generates a more efficient economy, it creates a more
cohesive and trusting society. (12)
Talking about the benefits of education is one thing.
Knowing how to deliver lifelong learning is a different matter
altogether. It is tempting for
Left-of-Centre parties to apply the old politics of statism to the needs
of the new economy. This is a
recipe for failure. A narrow
reliance on public funding will not satisfy the resource demands of a
learning society. So too,
traditional industry policies are ill-suited to the dynamic nature of the
Lifelong learning is an expensive exercise, especially once it becomes
universally available. This
task is beyond the financial limits of the state.
It can only be achieved through the development of learning
partnerships across society - mobilising extra resources from households,
communities and corporations, as well as governments.
Education needs to be the work of the nation, not just a handful of
government departments. This
approach is set out in my book What Did You Learn Today (2001).
It is a
New thinking is also needed in terms of economic policy.
In the past, social democrats tried to plan, regulate and subsidise
the development of industry sectors. In
the new economy, this approach is likely to be counter-productive.
It is a barrier to inventiveness and the open transfer of knowledge
and technology. Public policy
needs to shift to the supply side, to generating the right kind of
economic inputs. This approach
places a heavy emphasis on skills development, research scholarships and
competitive market structures. (13)
The problem with the “spaghetti and meatballs” in Barry Jones’s Knowledge Nation Report is not that the diagram is over-ambitious or silly. Rather, it accurately reflects the complexity of the new economy: the dense interaction between a large number of public institutions, corporations, educators and researchers. It is foolish, however, to think that government can control and plan for this kind of complexity. The new economy has made industry policy redundant. (14)
Paul Keating once told the Labor Caucus a story from his early days in
If the task of industry planning and picking winners was difficult in
the old economy, it has become insoluble in the new.
How can slow moving government bureaucracies make provision for
technologies that have not yet been invented, for jobs that have not yet
been conceived? How can
politicians second-guess the complex knowledge and decision making of a
dynamic market economy? Those
who still believe in this approach are deluding themselves.
More than most, Jones should be aware this problem.
In his 1982 book, Sleepers Wake, he tried to pick the
industries that would experience “future work expansion.” (15) He
forecast how “the greatest hope for future employment opportunities lies
in work which is not based on a new invention or technological form.”
On this basis, his predictions excluded the software sector,
financial services and telecommunications – all areas of substantial
employment growth over the past 20 years.
By today’s standards, most of the industries on Jones’s list are
insignificant. Others have
actually experienced a loss of employment.
His list included public sector employment, solar energy,
craftwork, subsistence farming, nature-related work, the development and
care of footpath networks, the collection of antiques and the provision of
drink, drugs and commercial sex. Obviously,
it is easier to Pick-A-Box than Pick-An-Industry-Winner.
The great challenge of globalisation is to make it work for all
citizens, to disperse its benefits as widely as possible.
International economic governance and lifelong learning are
essential to this task. I am
incredibly optimistic about the things that can be achieved on our side of
politics, once we modernise our thinking and policies.
I can never understand why so many on the Left are so pessimistic.
Their only purpose in public life is the promise of a better past.
They are more interested in the history of the 1980s than the
possibilities of the Information Age.
Ultimately, this is why the
The Rise of Mass Capitalism
Perhaps the greatest shortcoming of Left-of-Centre
politics has been its failure to recognise the dynamic nature of the
capitalist system. Most Left
economists write about the market as if nothing has changed for 200 years.
This is one of the reasons why social democracy has so many sacred
cows. Outdated economic
theories have been used to justify outdated economic policies.
At one level, it is not difficult to understand
this problem. On our side of
politics most of us grew up with the stereotype of "robber
baron" capitalism: the image of greedy industrialists exploiting
workers and consumers at every opportunity.
It was part of our social justice identikit.
This view of the market continues to inform the values and policies
of many on the Left. It is a
feature, for instance, of the militant campaign against globalisation.
In reality, however, capitalism is in a constant
state of evolution. In
Schumpeter's famous phrase, markets constitute a perpetual exercise in
"creative destruction". This
not only involves the destruction of old products and industries, it
involves the creation of new economic and social conditions.
Across two centuries, the capitalist system has
passed through several stages of development: from its robber baron
origins to the rise of the public company and more recently, the emergence
of a knowledge-based economy. This
has been one of the great transformations of economic history.
It has produced what might be thought of as "mass
capitalism" - a system in which ownership and economic capacity have
been dispersed across a wider share of society.
This can be seen in the following trends:
This transformation represents a huge challenge
for social democratic thinking. There
was a time, of course, when Left-of-Centre politics was dedicated to the
elimination of capital. Now,
with the emergence of mass capitalism, we have an opportunity to use the
economic system for egalitarian purposes.
Just as capitalism has changed, our strategies for social justice
must also change.
Russell Long, a Democrat Senator from
While up to 60 per cent of the population is
participating in the benefits of mass capitalism, a large number of people
remain outside the ownership tent. Without
a tangible stake in the new economy, they feel threatened by the prospect
of economic restructuring and exclusion.
The purpose of welfare policy should be to increase the number of
stakeholders. Sixty per cent
is not enough. We need to aim
at universal participation, giving all Australians access to a range of
assets: financial capital, human capital and social capital.
Internationally, this approach is known as
asset-based welfare reform. It
recognises the need to move from a system of recurrent income transfers to
one based on asset accumulation. Unfortunately,
this new wave of welfare policy has not touched the Australian debate.
We have much to learn from asset-based programs in the
In the old system, social democrats tried to
redistribute economic resources through tax and spend strategies.
As noted earlier, there are now clear limits to this approach.
In any case, recurrent transfers are not a good way of generating
economic and social participation. Instead
of fostering self-reliance and economic security, they force people to
rely on the benevolence of government.
People need a tangible stake in society and its
economy. In effect, they need
to be freed from the vagaries of the welfare state.
For those facing insecurity, assets are an essential buffer against
the contingencies of change. They
allow people to smooth out their income capacity and economic
circumstances. In particular,
they allow workers to bounce back from the impact of restructuring,
thereby avoiding the poverty trap.
Asset accumulation is also vital for the long term
poor. One of the mistakes of
the Left has been to under-estimate the capacity of disadvantaged people
to save. Programs overseas,
for instance, have shown that the poor can save and invest, once they
receive the right kind of incentives. (18) This process, in turn, creates
spin-off benefits in terms of self-esteem, health care and employment.
Assets are essential to a common sense of belonging in society.
The only way to leave poverty on a permanent basis
is to save and accumulate assets, whether in the form of financial,
education or social resources. Incredibly,
the welfare state has emphasised recurrent income transfers rather than
assets. Rich people, of
course, have no problem with the question of asset accumulation.
Family inheritances pass on the benefits of financial capital and a
good education from one generation to the next.
The welfare state needs to provide a similar set of opportunities
for the poor.
In the past, public policy has encouraged a
limited range of financial assets, such as home ownership and
superannuation. These schemes,
however, have been available to everyone bar the poor.
It seems surreal that the Left has tolerated such a massive
inequity. It has been happy to
pay income support to the underclass and asset support to the middle
class. Indeed, means tested
payments have actively discouraged asset accumulation: if welfare
recipients save more than a small amount they become ineligible for income
Not surprisingly, these arrangements have made the
poor welfare dependant and the rich asset dependant.
Inequality has been institutionalised in society.
The true Left-wing policy is to give low-income earners equal
access to asset support. The
best type of welfare safety net is a trampoline.
new role for government is to facilitate asset accumulation among the
victims of poverty and economic insecurity.
It needs to develop a stakeholder welfare state, in which all
citizens have access to the benefits of mass capitalism.
This is one of the basics of an inclusive society: common
membership of the new economy and with it, a common sense of social
summary, stakeholder welfare aims to:
On balance, the rise of mass capitalism is an
opportunity for social justice. This
is not to suggest, however, that the market economy is beyond question or
critique. The primary flaw in
modern capitalism is its lack of social responsibility.
As investment continues to move to the global arena, it bears less
allegiance to particular locations. The
connection between business interests and community interests has been
stretched, sometimes to breaking point.
The process of economic restructuring has left many traditional
institutions and communities confused about their relationship with the
The new social democracy aims to apply the
principles of mutual responsibility to the market economy.
In recent decades, corporations have won many more rights,
particularly the right to trade and invest on a global scale.
These rights need to be matched by the exercise of social
traditional emphasis on the economic regulation of capital needs to be
supplemented by new forms of moral regulation.
The Productivity Commission, for instance, has
reported that Australian governments outlay $18 billion each year in
corporate welfare. (23) This financial assistance should only be paid to
companies that comply with a Code of Corporate Citizenship, based on
decent labour, environmental and social standards.
If the global economy is to work properly, it needs to be founded
on the responsibilities of the privileged, not just the poor.
The reform of capitalism has become an ethical question.
The Dispersal of Power
In the Industrial Age, social democracy embraced
the politics of bigness. It
was thought that large, centralised institutions were needed to stand
between the public and the prospect of market failure.
Our side of politics became synonymous with big government
departments, big trade unions and big protest groups.
We tried to create collectivism on a mass scale.
In retrospect, this was a mistake.
Bureaucratic organisations are more likely to destroy social
capital than to create it. The
mass production of services inevitably leads to the depersonalisation of
service delivery. Big
companies and big government share a common methodology.
They rely on standardised rules to deliver a standardised product
to a large number of individual clients.
This process leaves little room for the development of personal
relationships, the mutualism and cooperation upon which a good society
relies. It is not a good way
of creating collectivism.
In practice, there is no such thing as a large
scale community. Every
community is different, based on a unique set of relationships and
experiences. The social
capital generated in one setting cannot be transferred to another.
While the private sector has mastered the art of franchising and
the public sector is experienced in the mass delivery of income support,
the same cannot be said for community life.
It can never be standardised.
Questions of scale and organisation have produced
a deep paradox within Left-wing politics.
It demonises global capital as distant and depersonalised yet it
turns a blind eye to the failings of government bureaucracy.
It criticises McDonalds yet congratulates Centrelink.
In a world of rapid organisational change, the Left desperately
needs a new organisational strategy. The
politics of bigness will no longer suffice.
One of the characteristics of Information Age
politics is a growing sense of self-reliance.
With the spread of mass information and education, the public wants
to make more of its own judgements, to take greater control of the
decision making process. Across
society, institutions that tell people what to do are losing support.
This is true of all forms of hierarchy, whether expressed through
government agencies, political parties, trade unions or churches.
We have entered an era of institutional rebellion.
Left-wing politics is the most prominent victim of
this process. Each of our
major institutions is in crisis. Trade
union membership in
Likewise, the old politics of statism is in
decline. Contrary to the
promise of the welfare state, there is not a government program for every
social problem. Indeed, it is
difficult to find a section of society that remains enthusiastic about the
work of government. At one
level, these shortcomings are entirely predictable.
The state has adopted the organisational principles of the
Industrial Age: hierarchies, mass production and standardisation.
It is out of step with the demands of an increasingly diverse and
The concept of working class solidarity has also
lost its significance. In an
open economy and diverse society, people are more mobile.
They want to share in the skills and enterprise of the new economy.
The fixed boundaries of class and social distinction are fading
away. Not surprisingly, this
environment has created a new set of political values.
People are less willing to cut down tall poppies, as they see
themselves as occupying this position one day.
Aspirational politics is here to stay.
This is a significant challenge for social democracy.
More than ever, when we talk about ripping down the rich and
redistributing wealth, we are talking to ourselves.
The public has no time for the politics of envy.
It wants its political leaders to encourage opportunity and social
mobility, while also building a stronger sense of common purpose and
cooperation in society. In
summary, it supports a new politics of common aspiration.
While, to be certain, these changes are wiping out the old politics,
they are also creating new opportunities.
Collectivism is not dead. It
has just changed its organisational structure and values.
Instead of supporting large, centralised institutions, the public
is in search of meaningful participation, a chance to cut out the
middleman and engage in acts of self-governance.
Instead of positioning public life as a divisive contest between
Left and Right, the electorate wants a new politics of partnership and
In the age of globalisation, the politics of neighbourhood matters more,
not less. If people are to
cross boundaries and reconcile the conflicting loyalties of a complex
world, they need to first learn the habits of community and
self-governance. It is in this
civic realm that the foundations of social capital can be found.
Civic socialism is our best hope for accommodating the diversity of
modern society while also recapturing the shared bonds of a collective
society. Etzioni calls it a
“community of communities.”
In the struggle to create the welfare state, Left-wing politics became
obsessed with the size of government.
Statism was seen as an end in itself, rather than merely the means
to a better society. As a
result, the processes of governance, the interactions between people and
institutions, were overlooked. Yet
in practice, it is these relationships that define our society.
They tell us about the level of mutual trust and cooperation
between people, about the way in which society is acting on its common
The new social democracy is more interested in the processes of
governance than the size of government.
This is why it seeks to empower the networks of civil society,
rather than the hierarchies of the state.
There is, of course, no rulebook for this approach.
There is no set of bureaucratic guidelines for the creation of
civic associations and interests. Rather,
this process relies on the dispersal of social power: opening up the
relationships and forums in which civil society can flourish.
Hierarchies and bureaucracies are the antithesis of community life.
The objective must be to weaken the influence of centralised
organisations and small elites. Effective
power needs to shift to a network of small scale associations, each
supported by the funding and regulatory role of government.
The enabling state is an active yet junior partner to communities.
This approach is also essential for social
justice. Hierarchy allows
power and privilege to be concentrated among the few.
A network society disperses economic, social and political power to
the many. The new political
divide is between insiders and outsiders – those who occupy the centres
of authority and influence in society and those who have been
disenfranchised by the power elite.
is a political cause for outsiders. It
aims to democratise power and spread the benefits of ownership as widely
as possible. It is against
centralisation of any kind, whether in the form of corporate power,
super-unions, big government or an out-of-touch political system.
This approach is evident in all aspects of its work program:
The choice for Left-of-Centre politics is clear.
Across society and its economy, the Information Age is flattening
hierarchies and weakening the established centres of power.
We need to replicate this process in the reform of public
governance. We need to swim
with the tide of devolution.
We also need to right an historic wrong.
We have called ourselves social democrats but, in many respects, we
have failed to live up to this title.
In fact, post-war social democracy has been a misnomer.
It has not tried to democratise power and disperse the benefits of
mass capitalism. It has simply
vested more control and influence in the hierarchies of the state.
This has fostered a culture of authoritarianism and even elitism
among parties of the Left.
In its current form, Left-of-Centre politics is
insoluble. It sees the state
as an agent for collectivism yet, in practice, the delivery of government
services has been individualised. It
talks about the need for more public investment yet, for electoral
reasons, it is unwilling to broaden the public revenue base.
It hopes to intervene and develop industry plans yet, in the new
economy, planning has become impossible.
In most countries, our side of politics feels somewhat empty.
The true believers have precious little to believe in.
We have set ourselves the task of varying by two
or three per cent the way in which government works, when the real
challenge is to change by 10 to 20 per cent the way in which society
functions. Social democracy
needs to free itself from the limits of the state, to rediscover its
ambition for social reform. This
is why there is so much debate about
a time of rapid change, it is not unusual for organisations to define
themselves in the negative – to know the things that they oppose but not
the things that they favour. This
is how the Left now defines itself. Ask
a union leader or S11 protestor what they oppose and the list never ends:
globalisation, workplace change, enterprise bargaining, share ownership,
welfare reform, non-government schools, aspirational politics and so
forth. The strongest movement
on our side of politics over the past decade has been the rise of Left
new social democracy is a direct response to this trend.
As it confronts change, it looks for opportunities rather than
threats. At its core, it is
optimistic and iconoclastic. It
also has a distinctive technique. The
In the Information Age, the best approach to reform comes from the
fringe of the system, rather than the hierarchies and power plays of
conventional politics. There
is more to be learned from listening to social and business entrepreneurs
than any number of parliamentary sessions, party meetings and interest
groups. Entrepreneurs talk a
language of change, creativity and enablement.
Machine politics, by contrast, has narrowed its conversation to an
exchange of slogans, spin and electoral manipulation.
This is why the old politics is dying.
As Tom Bentley puts it:
Today’s politicians are trapped in a contest between two inherently limited models of policy delivery. The Left offers the promise of strong public services, developed and managed by a strong political centre, using new technology to individualise the services each citizen draws upon. The Right, meanwhile, continues to offer the chimera of a minimal state, with social need met by private action. The striking fact is that both models continue with the myth that government can deliver on behalf of the people it serves. The truth, of course, is that politics cannot change society unless it can persuade people to change the way they themselves behave. In other words, we must now move towards grown-up government - institutions which respect the intelligence and self-determination of individuals, but which expect people to take active responsibility for producing collective solutions. (24)
If this is the
then it should be our way.