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A reminder of social democracy’s ambitions in times gone by. January 9, 2013

Posted by Tomboktu in British Labour Party, Capitalism, Social Democracy, Workers Rights.

Earlier this week I started reading Capitalism Unleashed: Finance, Globalization and Welfare by Andrew Glyn (Oxford University Press, 2006). I’m not in far enough to offer any thoughts on the book as a whole, but there is a passage at the end of Chapter 1 that shows just how limited the ambition of current social democratic parties is.

On top of the seemingly inexorable rise in government spending came proposals from the Labour movement to restrict the prerogatives of capital within its own sphere — private business. A range of plans emerged in the later 1960s and 1970s going well beyond the customary collective bargaining issues of jobs and working conditions. To give a flavour of what was involved a brief discussion follows of German co-determination, Swedish wage-earner funds, the British Labour Party’s ideas for planning agreements and finally the French Socialist government’s plans for extensive nationalization in the early 1980s.

In Germany workers had achieved a system of co-determination in the early 1950s with equal representation of employees and shareholders on boards of iron and steel companies. They secured lesser representation within other companies but had the right to appoint the labour director responsible for personnel affairs. In the 1970s there was strong pressure to increase co-determination rights, which resulted in an extension to cover employment contracts and training, and in 1976 the proportion of worker representatives was increased from one-third to a half for larger companies (though with a shareholder-appointed chair having a casting vote). These extensions were strongly resisted by employers, politically and in the courts. German co-determination may have had fairly modest effects on managerial freedom, but a comment in 1984 by a prominent American economist, Armen Alchian, shows how it was viewed by advocates of shareholder sovereignty: ‘The campaign for … codetermination on boards of directors appears to be attempts to control the wealth of shareholders’ specialised assets … a wealth confiscation scheme’. (more…)

What is the nature of Labour’s dissent? January 18, 2012

Posted by Tomboktu in Minor Left Parties, Social Democracy, The Left.

I’ve been wondering about the Labour Party’s dissenters. The public face of that dissent is Broughan and Nulty (I don’t count Penrose as dissent — he resigned the whip but he hasn’t inhaled, as his voting record shows), but there has also been the three councillors (now two with Nulty moving up), and more importantly, I would say, those members who are involved with the likes of Claiming Our Future and TASC, who have consistently critiqued current government policy (although not naming their analyses as attacks on the party to which they belong [belonged?]). Are we witnessing a period in which the Labour Party’s leadership has captured the party, relenting on woeful policies only on an issue-by-issue basis when the howls from backbenchers get too loud — e.g. DEIS cuts — or does the Labour leadership reflect the broader Labour membership, and had they (leadership and broad party membership) captured those “mid-Left” activists who have a harder edge to their analyses?

I don’t have an answer to my question, but I cannot see how the current set-up can continue, and I wonder what will give: will the dissenters walk or will they galvanise the party’s membership and call time on the leadership?

Could we learn from the liberal agenda? October 10, 2011

Posted by Tomboktu in Economics, Feminism, Social Democracy, Social Policy, The Left, Unions, Workers Rights.

The liberal agenda has been very successful in Ireland over the last forty or fifty years. Headline issues include securing the availability of contraception, access to abortion, the right to divorce, decriminalising homosexuality, and lifting the ban on same-sex marriage. Other items on the agenda would include equal pay for men and women, the criminalisation of rape within marriage, abolishing illegitimacy, Garda practices concerning rape victims, the right of a married woman to have her own legal domicile, Garda procedures in cases of domestic violence, sex education in schools, and (more recently) gender recognition for trans people.

Not all of those goals have been achieved, but given the progress that has been achieved, it is worth asking if the Left in Ireland today could use the same strategies.

The first thing to notice is that the list is a list: a set of individual items. A source of motivation might have been the overarching concepts of “women’s lib” or “gay rights”, but progress was not made by simply demanding that women be liberated or gay people be given rights. Instead, the overarching goal was broken down into distinct objectives.

What would be on a similar list for the Left in Ireland? A first draft of such a list in three areas might include the following.

Wages and incomes

  • the minimum wage tied to the average executive salary
  • replacing (most) social welfare benefits with a universal basic income

Corporate governance

  • worker directors in all firms with more than 25 employees (as is the case in Sweden)
  • half the board of large firms to be worker directors (as is the case in Germany)
  • executive pay subject to annual approval by the employees
  • tax incentives for co-ops over other firms (as is the case in Italy, although it is abused through firms registering as a co-op but not operating internally as one)

Housing and accommodation

  • rent increases in all accommodation tied to inflation, not “market” prices (as was — and may still be — the case in Denmark)
  • 12 months’ notice required to end all private tenancies that were not originally established (and proven to be) bona fide short-term rents (in the case, for example, of students) (also from Denmark)
  • obligatory requirement on landlords to prove eviction is for serious breach or for them to move back into the property as their primary residence and to prove that rent will not be increased in the case of a new tenancy (also from Denmark)
  • requiring all mortgages to for primary residences be at fixed rates of interest (I don’t know if it is the law, but it I believe it is standard practice in Germany)

To be clear, this is not a definitive statement of the Left’s agenda. There are key items missing from it, and some on the Left would probably object to the inclusion of some items. However, a lot could be gained by identifying a set of key concrete changes and making each of those the focus of a campaign.

That does not mean achieving change would be easy. The experience of the liberal agendas was that the arguments on the issues were explained, criticised, defended, argued, and then explained all over again, on TV, in policy reports, on radio, to the Supreme Court, before the European Court of Justice, at the European Court of Human Rights, to TDs, in submissions to the Law Reform Commission, on street protests, at photo-opportunities — and once even with a famous train journey to Belfast — and back again through many of those activities, over months that turned into years, that turned into decades.

Of course, the idea that the Left could use this approach isn’t novel: I recall taking my now 20-something nephew when he was about eight or nine on a protest calling for the introduction of a legal minimum wage, organised by the Dublin Council of Trade Unions and held outside low-pay fast-food outlets in Dublin’s O’Connell Street. (I wasn’t a particularly good political educator: when the protest finished, he asked if we could go into one of the outlets to get a burger.)

If a core set of specific and concrete objectives is identified, how would the work of achieving those items be organised? A second characteristic of the liberal agenda was that separate organisations were formed to work on most of the key issues: the Divorce Action Group, the Irish Family Planning Association, the Gay and Lesbian Equality Network, the Rape Crisis Centres, Woman’s Aid, Marriage Equality, Transgender Equality Network Ireland.

That approach might not be adapted as easily for the Left’s agenda. There already exist organisations that are (or are supposed to be) working to achieve the objectives that would be in the list — the unions and the parties of the Left. Further, the prospect of a range of new single-issue organisations raises many questions: would it take activists and workers away from the existing organisations. Rivalries between parties and organisations mean that efforts to set up stand-alone campaigns would — in fact, already have — been viewed with suspicion: is that really a campaign about topic x or a front to recruit support for a party or a candidate at the next local elections? On the other hand, disagreements on strategy, ideology — and even rivalries based purely on personality and working styles — existed (and still exist) between activists in the liberal agenda, so that is not a reason to eschew the use of separate organisations for individual goals.

Adopting an approach that looks to non-party and non-union organisations to lead different campaigns for issues of concern to the Left could simultaneously be both a risk and a benefit. The core of that dilemma is that it could create the impression for some people that at their core these are not political issues. One the one hand, de-linking them from the identity of the Left could make them more attractive to people who are uncomfortable with that label. It might create the possibility of sufficient support for many of the issues, but do that by drawing different sets of people who have differing views or levels of comfort with different issues: not all supporters of linking minimum wages to executive salaries, for example, might be happy with an automatic right to worker directors in all firms, just as not all supporters of lifting the ban on divorce were necessarily comfortable with decriminalising homosexuality. However, that ‘depoliticisation’ is deeply unattractive precisely because it is false. And, to boot, it is the strategy that the Right has used to pursue the changes that is has lobbied for, not just domestically and at the level of the EU, but globally through GATT and the WTO. Just now in the USA, Spain and Greece — but less so here, I think — there has been a change, with growing popular acceptance that the ‘free’ market approach is not ‘natural’, is political.

It would stick in my craw to adopt IBEC’s strategy, but if that is what it takes to make progress in Ireland, then maybe it’s what has to be done.

Social Democracy: The Meaning, Use and Abuse of a Term August 14, 2010

Posted by Garibaldy in Social Democracy.

Paul Gillespie in the Irish Times tackles the question of where Social Democracy might go from here. He begins thus

”SOCIAL DEMOCRACY, in one form or another, is the prose of contemporary European politics.” These words of the historian Tony Judt, who died last week of a body crippling illness aged 62, are taken from a brilliant lecture he gave in New York last year before he was altogether incapacitated. They are a fitting way to examine one of the great puzzles of the contemporary world: why has the European left performed so pathetically when capitalism is in crisis, neoliberalism discredited, unrestrained financial markets blamed and working people are footing the bill for recovery?

Gillsepie argues that the question of the miserable performance of the left is a transatlantic question

politically and intellectually under the Obama administration, concerning not only whether to stimulate or cut out of the recession, but how best to promote and protect social welfare, link states and markets, and extend democracy – the three great social democratic concerns.

Before returning to Gillespie, some discussion of Judt. Some time back, EamonnCork provided a link to a piece by Tony Judt entitled Ill Fares the Land in the New York Review of Books. Published shortly after his book of the same name, Judt addressed the changes that had taken place in political culture since the 1970s, including the sense of powerlessness among the young that replaced the arrogant confidence of the 1960s, and the near-total collapse of the political debates that had shaped the world for decades.

Something is profoundly wrong with the way we live today. For thirty years we have made a virtue out of the pursuit of material self-interest: indeed, this very pursuit now constitutes whatever remains of our sense of collective purpose. We know what things cost but have no idea what they are worth. We no longer ask of a judicial ruling or a legislative act: Is it good? Is it fair? Is it just? Is it right? Will it help bring about a better society or a better world? Those used to be the political questions, even if they invited no easy answers. We must learn once again to pose them.

Judt argued that the recent economic problems demonstrated that we can’t go on living in the world shaped during the Reagan/Thatcher years.

the obsession with wealth creation, the cult of privatization and the private sector, the growing disparities of rich and poor. And above all, the rhetoric that accompanies these: uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth.

He warned that if we simply bailed out unregulated capitalism, the same thing would happen, and worse, in future.

And yet we seem unable to conceive of alternatives. This too is something new. Until quite recently, public life in liberal societies was conducted in the shadow of a debate between defenders of “capitalism” and its critics: usually identified with one or another form of “socialism.” By the 1970s this debate had lost much of its meaning for both sides; all the same, the “left–right” distinction served a useful purpose. It provided a peg on which to hang critical commentary about contemporary affairs.

Noting the disillusionment among his students with a world they feel unable to change, he noted that he

wrote my book Ill Fares the Land for young people on both sides of the Atlantic. American readers may be struck by the frequent references to social democracy.

Judt rejected the American term liberal as a description for those who advocated “public expenditure on social objectives” in favour of social democrat.

Social democrats, on the other hand, are something of a hybrid. They share with liberals a commitment to cultural and religious tolerance. But in public policy social democrats believe in the possibility and virtue of collective action for the collective good. Like most liberals, social democrats favor progressive taxation in order to pay for public services and other social goods that individuals cannot provide themselves; but whereas many liberals might see such taxation or public provision as a necessary evil, a social democratic vision of the good society entails from the outset a greater role for the state and the public sector.
Understandably, social democracy is a hard sell in the United States. One of my goals is to suggest that government can play an enhanced role in our lives without threatening our liberties—and to argue that, since the state is going to be with us for the foreseeable future, we would do well to think about what sort of a state we want. In any case, much that was best in American legislation and social policy over the course of the twentieth century—and that we are now urged to dismantle in the name of efficiency and “less government”—corresponds in practice to what Europeans have called “social democracy.” Our problem is not what to do; it is how to talk about it.

Europe, he noted, was different.

Many European countries have long practiced something resembling social democracy: but they have forgotten how to preach it. Social democrats today are defensive and apologetic. Critics who claim that the European model is too expensive or economically inefficient have been allowed to pass unchallenged. And yet, the welfare state is as popular as ever with its beneficiaries: nowhere in Europe is there a constituency for abolishing public health services, ending free or subsidized education, or reducing public provision of transport and other essential services.

Judt set out to challenge conventional wisdom on both sides of the Atlantic, what he termed the “Washington consensus”, i.e. essentially the neo-liberal belief that anything the state could do, the private sector could do better.

The Washington doctrine was everywhere greeted by ideological cheerleaders: from the profiteers of the “Irish miracle” (the property-bubble boom of the “Celtic Tiger”) to the doctrinaire ultra-capitalists of former Communist Europe. Even “old Europeans” were swept up in the wake. The EU’s free- market project (the so-called “Lisbon agenda”); the enthusiastic privatization plans of the French and German governments: all bore witness to what its French critics described as the new ”pensée unique.”

Judt noted that the bailout did not represent an ideological shift among the political elites in Europe and the US.

as the response of the Obama administration suggests, the reversion to Keynesian economics is but a tactical retreat. Much the same may be said of New Labour, as committed as ever to the private sector in general and the London financial markets in particular. To be sure, one effect of the crisis has been to dampen the ardor of continental Europeans for the “Anglo-American model”; but the chief beneficiaries have been those same center-right parties once so keen to emulate Washington.
In short, the practical need for strong states and interventionist governments is beyond dispute. But no one is “re-thinking” the state. There remains a marked reluctance to defend the public sector on grounds of collective interest or principle. It is striking that in a series of European elections following the financial meltdown, social democratic parties consistently did badly; notwithstanding the collapse of the market, they proved conspicuously unable to rise to the occasion.

So what is his solution?

If it is to be taken seriously again, the left must find its voice … We have entered an age of insecurity — economic insecurity, physical insecurity, political insecurity … We have seen that the specter of terrorism is enough to cast stable democracies into turmoil. Climate change will have even more dramatic consequences. Men and women will be thrown back upon the resources of the state. They will look to their political leaders and representatives to protect them: open societies will once again be urged to close in upon themselves, sacrificing freedom for “security.” The choice will no longer be between the state and the market, but between two sorts of state. It is thus incumbent upon us to reconceive the role of government. If we do not, others will.

The last three decades, he noted, have seen the reversal of a century-old trend.

From the late nineteenth century until the 1970s, the advanced societies of the West were all becoming less unequal. Thanks to progressive taxation, government subsidies for the poor, the provision of social services, and guarantees against acute misfortune, modern democracies were shedding extremes of wealth and poverty.
To be sure, great differences remained. The essentially egalitarian countries of Scandinavia and the considerably more diverse societies of southern Europe remained distinctive; and the English-speaking lands of the Atlantic world and the British Empire continued to reflect long-standing class distinctions. But each in its own way was affected by the growing intolerance of immoderate inequality, initiating public provision to compensate for private inadequacy.

He then goes on to give examples of the nature of this inequality, which is at its highest in the west among the most deregulated countries – the US and UK. One suspects that the Republic is not far behind. He provided graphs on things like inequality and health, crime, mental illness, life expectancy, and social mobility to illustrate the facts he cites.

In 2005, 21.2 percent of US national income accrued to just 1 percent of earners. Contrast 1968, when the CEO of General Motors took home, in pay and benefits, about sixty-six times the amount paid to a typical GM worker. Today the CEO of Wal-Mart earns nine hundred times the wages of his average employee. Indeed, the wealth of the Wal-Mart founder’s family in 2005 was estimated at about the same ($90 billion) as that of the bottom 40 percent of the US population: 120 million people.

The consequences?

children today in the UK as in the US have very little expectation of improving upon the condition into which they were born. The poor stay poor. (See Figures 1 and 2.) Economic disadvantage for the overwhelming majority translates into ill health, missed educational opportunity, and—increasingly—the familiar symptoms of depression: alcoholism, obesity, gambling, and minor criminality. The unemployed or underemployed lose such skills as they have acquired and become chronically superfluous to the economy. Anxiety and stress, not to mention illness and early death, frequently follow.

Inequality is the key issue for Judt, explaining why US life expectancy lags behind that of Bosnia, and only just above that of Albania.

Inequality is corrosive. It rots societies from within. The impact of material differences takes a while to show up: but in due course competition for status and goods increases; people feel a growing sense of superiority (or inferiority) based on their possessions; prejudice toward those on the lower rungs of the social ladder hardens; crime spikes and the pathologies of social disadvantage become ever more marked. The legacy of unregulated wealth creation is bitter indeed.

Just as corrosive has been the change in social attitude that has seen the pursuit of wealth trump all else. The essay concludes

How should we begin to make amends for raising a generation obsessed with the pursuit of material wealth and indifferent to so much else? Perhaps we might start by reminding ourselves and our children that it wasn’t always thus. Thinking “economistically,” as we have done now for thirty years, is not intrinsic to humans. There was a time when we ordered our lives differently.

So, then, it seems that for Judt Social Democracy was about tackling inequality using the power of the state and social expenditure. Although he places great stress on the power of ideas for the future of social democracy, the idea that he seeks to promote are about altering material realities, and not simply abstract moral categories like justice and fairness.

So how then does this fit with Gillespie’s article, which cites Judt as its inspiration?

It suffers from decades of adapting to the very forces which brought on the crisis. Ideologically its leaders bought into the neoliberal, efficient market consensus, promoting the deregulation which exploded two years ago. “Third way” policies eroded the distinctions between left and right, as social democratic parties became more geared to consensual governing than representing alternative futures. Their links to the social classes, trade unions and other blocs supporting them were weakened without finding new social bases.
As a result they lost their ability to fight defensive battles against the new insecurity or offensive political and intellectual ones for an alternative future. Liberal, green or radical left parties gained advantage, but the resulting fragmentation on the left throughout Europe has given easy victories to conservative parties in the European Parliament elections and a string of contests in larger and smaller EU member states.

That seems fair enough, and in line with Judt’s argument. Gillespie goes on to develop these points, arguing that social democracy needs to adopt an international response. He puts faith in the EU as the potential saviour of social democracy.

They have been slower to translate that into coherent policies at a European level to deal with the eurozone crisis. The €750 billion financial stability fund agreed in May is a huge pragmatic step towards greater economic governance. But we do not hear any common social democratic case for it to be supplemented by a bigger EU budget, Eurobond issues, financial transaction taxes, tighter financial regulation or more macroeconomic balance between surplus and deficit states. As a result voters may well conclude that a deflationary spiral of cuts typifies EU policy-making rather than its current right-wing agenda.

Let’s remember what Gillespie sees as the three great concerns of social democracy: to protect social welfare, link states and markets, and extend democracy. I haven’t read Judt’s book, but I didn’t get the impression from Judt’s article that he would see it like that. It seems to me that this is a very different type of social democracy, exactly the defeatist sort Judt was arguing against. Social democracy in its heyday after the Second World War, and even for decades after, spoke in terms of the transformation of society, and especially in terms of equality. This involved a very clear notion of using the powers of the state, especially taxation, of the redistribution of wealth. Nowadays, we hear about fairness not equality, and we never hear about redistribution from social democrats. Again, it may be in Judt’s book, but there wasn’t much sign of it in the article. Social democracy has been hollowed out, but it’s precisely in that hollowing out of economics that it has lost its purpose, and lost its way. I’m not sure that Judt was addressing that question as directly as he might in that article, and Gillespie certainly isn’t.

Who does Gillespie pick to exemplify the new type of thinking he is calling for? The current chair of the Socialist International, none other than the Greek Prime Minister, George Papandreou, who has called for

“fair, efficient system of economic governance that balances the need for sovereignty with the complex demands of monetary union in a globalised economy”

that will ensure

that democracy is never subordinated to markets


That, frankly, beggars belief. The idea that the hope of social democracy lies in the thought of someone who is implementing the dictates of the IMF and domestic capital under the cloak of an austerity programme in Greece is beyond parody. And this is what has happened to social democracy once it has given up even on moderate wealth distribution. Give me the KKE and socialism any day of the week.

The market and high incomes September 30, 2009

Posted by Tomboktu in Economics, Social Democracy, Taxation Policy, The Left.

I think – but would be happy to be corrected – that one of the weaknesses with the Left is a shortage of ambitious and feasible policy ideas to change a key source of inequality in Western economies: the scale of the inequality in the income that those who are in employment receive for their labour.

Too often it appears that those who of us describe themselves as egalitarians have accepted that the ideal of ‘the redistribution of wealth’ boils down to developing policies to implement a version of that other cliché on what the Left is about: ‘tax and spend’. This does not mean that all tax and spend proposals are unradical. For example, the proposal for a basic income – an income unconditionally granted to all on an individual basis, without means test or work requirement – has been around for some time but is little implemented, and I suspect one of the reasons is that it is seen as a step too far for many. (If my memory is correct, it was a policy backed by Young Fine Gael about 25 years ago when Chris O’Malley was at the helm of the party’s youth wing.) Or another example: The US economist John Roemer has suggested “the creation of two kinds of money: one used for the purchase of goods and the other, referred to as ‘coupons’, for buying shares in companies.” The radical element of his proposal is that all citizens are given coupons through which they derive ownership rights in companies, including dividends and voting for the board, but cannot sell those coupons for ‘ordinary’ money. (This last is one of a number of proposals explored in the Real Utopias Project at the University of Wisconsin. Some of other books from the RU project have other suggestions that I would classify as tax and spend.) And nor does my worry with the extent of the focus on tax and spend policies mean that I think they should be abandoned. You only have to read the article by Brendan Hayes, the ‘refusnik’ on the Commission on Taxation, in the September issue of The Union Post to see why they are sorely needed.

However, the problem that I see with relying only on ‘tax and spend’ policies is that they do not deal with what happens inside the market. Some of them – like investment to combat educational disadvantage or Roemer’s coupons – are designed to give everybody an equal chance as they enter the labour market, but leave the big divergences that occur over the course of different people’s working lives untouched. Other tax and spend policies, like increased social welfare or the basic income, are an attempt to reduce the size of the differences that arise from market processes on an ongoing basis (although no social welfare proposal I have ever heard of would give a sustained income that is anything like that enjoyed by even middle managers, never mind senior executives).

There are two reasons why what happens inside the market should be scrutinised by egalitarians. The first is empirical: the divergence in salaries and other pay for work since the 1970s is the root of the increased inequality in western economies. The second is ideological and, for me, the more important: if we do not examine the inequalities in the market, we give them a credence and contribute to the view that they are somehow ‘normal’, that the natural order of things is for huge inequalities to exist.

Of course, it is not true to say that the only approaches to dealing with economic inequality have been versions of tax and spend. To illustrate: two Irish groupings on the Left have set out policy objectives that go deeper than tax and spend. John Baker and his colleagues at UCD (in Equality: From Theory to Action) have identified the reduction in the inequalities in pay as central to achieving an egalitarian society. And Mary Murphy (a former Labour member of Dublin City Council) and her colleagues in an ad hoc group named Is Feidir Linn (which doesn’t quite have the rhetorical pizzazz of Barak Obama’s original ‘Yes we can’) have gone further and named a specific numerical outcome to be aimed for:

Highest income earners should have no more than ten times the income of the lowest earners.

However, a problem, as I see it, is that all of the discussion is a long way from giving us the content of practical proposals that a policy maker from the Left could table in, say, talks on forming the next government or in negotiations on the programme of the next European Commission.

A comprehensive approach would require looking at the entire range of incomes and how they arise, but my particular interest is the high end of the income scale, and how it has pulled away from the average in the last thirty to forty years. (And for the purposes of this post, I deal only the pay of business executives: it would take too much space to deal with the pay elite of sports-people, rock stars, and ‘celebrity’ broadcasters.).

While I would dearly love to see ideas of the UCD team and Is Feidir Linn further developed, I am glad that they have not rushed ahead with more specific proposals that are poorly grounded, a virtue that cannot be attributed to the British think-tank Compass to justify its campaign for a Commission on High Pay. The Chair of Compass, Neal Lawson, said at the launch of their campaign in August

It’s time the government took action on excessive pay, it’s absolutely right that we now reign in the bonus bandits that created the economic crisis.

The more substantial briefing paper that Compass published expands on this as a key reason for establishing a High Pay Commission:

There is now a clear public interest in exploring the link between high pay, excessive risk taking and the stability of the national economy. That is why Compass is calling for the establishment of a High Pay Commission so that the threat of meltdown and the reality of recession are never repeated because of excessive rewards.

Somebody needs to tell Compass – whose tagline is “Direction for the Democratic Left” – that the logic of this is not particularly of the Left. Applying Compass’s reasoning, if the bandits had not created the crisis, then the level of their pay should not be an issue. Or, could it be that Compass thinks that if those who had created the crisis had not been highly paid, there would be no need to examine their behaviour – that it is OK if medium or low paid workers create global chaos. (For fairness, I should point out that others who provided quotations for Compass’s press statement did offer sounder rationales for examining high pay.)

A second – and potentially much more significant – possible source of change on high executive pay that I have seen discussed recently is an institution I would not have thought of as being notable for its Left stance: the US Supreme Court. Even more surprising is that the intellectual basis is an argument made by Richard Posner, a prominent US scholar and federal judge who would be described as being on the political Right  (albeit he hasn’t become a turncoat:  his rationale is not in the slightest bit egalitarian). In a dissenting opinion in a case called Jones v Harris, he says

executive compensation in large publicly traded firms often is excessive because of the feeble incentives of boards of directors to police compensation.

And after a slew of academic papers to support that point, Posner goes on:

Directors are often CEOs of other companies and naturally think that CEOs should be well paid. And often they are picked by the CEO. Compensation consulting firms, which provide cover for generous compensation packages voted by boards of directors, have a conflict of interest because they are paid not only for their compensation advice but for other services to the firm—services for which they are hired by the officers whose compensation they advised on.

That seems to me to be a pretty good definition of ‘crony capitalism’, a term I associate with Joe Higgins (in the sense, of course, that he uses that term to attack the business elite).

The subsequent appeal in Jones v Harris now means that, as the New York Times put it ‘Supreme Court to Hear Case on Executive Pay’. (Both the jurisprudence and what might be called the judicial politics of Posner’s dissent are also interesting although they are not relevant to my discussion. Links to some of the discussion of those topics can be found here, here and here.) The importance of Posner’s dissent is that it has moved a well-established critique to executive compensation out of the relative backwater of academia into a legal-political sphere, and within that sphere an arena with some bite.

The question is whether egalitarians can provide responses to that critique, or is sophisticated analysis of that section of the labour market the preserve of the Right?

Raul Castro, Cuba and the European Union. October 18, 2007

Posted by WorldbyStorm in Communism, Cuba, European Union, Social Democracy, United States.

Reading the Irish Times some time ago on the continent (a print edition which had everything one needed bar the entirely superfluous and candyfloss magazine section – ah the joys of European wide print distribution) I was struck by the an article carried from the LA Times-Washington Post by Manuel Roig-Franza which noted that Raul Castro had hinted at some measure of economic reform in a speech during a commemoration of the 54th anniversary of the Revolution.

R. Castro is no fool, and as has been noted here previously he and the army have to some extent tied up the commanding heights of the economy. Some of you will have noticed that while sympathetic to the aims I am not entirely thrilled by a Revolution which 54 years later has the same guys at the top, or indeed many many others aspects of the Revolution.

So it is probably inevitable that R. Castro is treading very carefully. Rumour has it that he was one of the prime movers of the nascent economic liberalisation after the Soviet Union imploded and that Fidel was an obstacle. Who knows?

But his most recent pronouncements are revealing.

He has noted that wage rates are not high enough and has spoken now of the need to open to further foreign investment in order to gain ‘capital, technology or markets’. Meanwhile he also noted the necessity to ‘preserve the role of the state and the predominance of socialist property’.


But to be honest ‘socialist property’ is the least of the issues when one gets down to it. The routes to the future appear fairly predictable. Ten, fifteen years from now Cuba will have some form of democratic representation, the communist system will be replaced and more than likely it will swing straight into the arms of neo- (or will it be neo-neo) liberal economic ‘experts’ as we saw in Russia and other former Soviet Republics and some of the Eastern European countries. It will be cemented firmly with the US sphere of influence and that will be that. Perhaps some aspects of the Revolution will remain. Probably. But, again, who knows?

Okay, it’s fairly loathsome to quote oneself, but in the previous post on this issue I said:

There’s still time for change. There is a chance for Fidel or Raul to maintain the genuine (but hardly unheard of elsewhere) achivements of the past 57 years. A closer engagement with Europe on a political level (that would mirror the joint economic enterprise with Europe), with a clear identification with strong social democratic reforms by firstly dismantling the predominant place of the party, introducing political pluralism and so on would at least offer the chance that the previous years haven’t been wasted.

I think I was being too conservative in that suggestion. ‘A closer engagement with Europe on a political level’. Hmmm. What exactly does that mean? Well here’s a suggestion. Why not enter into some form of association with the European Union proper? Consider that in the last month or so some informal contacts with Cuba have been reestablished by the European Union under the auspices of the United Nations.

Now before going any further it’s worth noting that Mercusor and the Andean Community are merging to generate the Union of South American Nations, which is modeled directly on the EU. It is expected to be a complete union analogous to the EU by … gulp … 2019. UNASUR is a step forward and something that will have a real potential in the future. But Cuba doesn’t appear to be in the running to join UNASUR, since it is, as a minute with an atlas will demonstrate, positioned in the Caribbean and the Caribbean is a patchwork quilt of different supranational entities, most of which such as the Organisation of Eastern Caribbean States are to some degree shaped by the legacy of colonialism in the area. There are others such as the Caribbean Community with which Cuba has a free trade agreement but nothing more. CARICOM is intended to achieve some measure of political unity at some unspecified point in the future and interestingly CARICOM is also involved in trying to thrash out an Economic Partnership Agreement with the EU.

There is in fact some precedent here. It’s not a great one since it too is a legacy of colonialism. French Guiana happens to be a départment d’outre-mer of France and as such is part of the European Union. Another second or two with an atlas will demonstrate that French Guiana sits on the north eastern coast of South America, or why bother with the atlas when those of us with Euro notes will also find it at the foot of a note just right of the EURO/EYPO in a little box. Closer to Cuba is another part of European history, Aruba and beside there the Netherlands Antilles, both parts of the Kingdom of the Netherlands.

So while the region itself remains devoid of clear political structures that will embrace Cuba, why not see the EU step in. And by association I’m not suggesting membership, but something that was a close relationship between the sovereign state of Cuba and the EU as an entity – perhaps analogous to the initial relationship between Turkey and the EU. In effect a step by step process of deeper engagement between the two which would have clear cut goals and outcomes which would include tackling openly a range of contentious issues from the nature of democratic representation, human rights and so on but would also acknowledge the value and validity of many of the most positive aspects of the Cuban Revolution.

I entirely understand, and share many of, franklittles criticisms of the EU. But… this is a multipolar world, and the EU for all its faults is one entity which still retains elements antagonistic to neo-liberalism within itself. Naturally there are aspects of history, the colonial period and suchlike to be overcome in any relationship between Cuba and the EU. But such an association could provide a new path for states evolving from the command control political/economic path, as it has with the Czech Republic, Poland, etc, etc. Although it is also clear that it some of those post-communist states which are most adamantly opposed to any such moves. And then other issues would arise. At what point could such an association be formed? It would have to be well along the path to political liberalisation. Where could it potentially go. Would Cuba even want such a thing?

Yet within such an association – however loosely – I think the best elements of the Revolution, of which there are some worth retaining, could be protected.

Is it going to happen?

Not a chance.

Distinctions not cost effective, Social Democracy or Democratic Socialist: and is the Irish Labour Party hoping to slay an imaginary dragon? October 17, 2007

Posted by WorldbyStorm in Irish Labour Party, Irish Politics, Social Democracy, Socialist Party, Socialist Workers' Party.

An interesting post on Politics.ie drew attention to a proposed motion in the upcoming Irish Labour Party Conference in November.

Motion 74 states:

Conference resolves that the party constitution is amended as follows:

Part 1, Introduction, paragraph 3, line one, delete the words ‘Democratic Socialist Party’ and substitute ‘Social Democratic Party’ Paragraph to read:

The Labour Party is a social democratic party and, through its membership of the party of European Socialists and Socialist International, is part of the international socialist movement working for equality and to empower citizens, consumers and workers in a world increasingly dominated by big business, greed and selfishness.

Now (assuming the post is correct), perhaps this displays my ignorance of the LP, but I always assumed that they were a Social Democratic party. Certainly they’ve acted as such for most of the last century. Indeed, one could argue that they’ve acted more rightward than that during that time – particularly in government. And lest that seem like a needless dig against them I am all too aware of the constraints of governing in a broadly conservative social and political milieu and applaud what gains they did make.

But let’s come back to this notion of Social Democracy as against Democratic Socialist. The comments accompanying the post are revealing. There is a clear split between those who adhere to the ‘socialist’ tag and those who consider that that is inappropriate for the LP. What is interesting is how reminiscent this is of arguments I’ve heard before. Long long ago. Wasn’t it a certain Eoghan Harris who wrote in the late 1980s of the “necessity” for Social Democracy in the WP. Moreover, whatever the nature of the WP at least in 1988 one could argue that it retained a strong Marxist approach albeit modified by the then prevailing fashions of more ‘reformist’ currents.

And what precisely are the distinctions between Social Democracy and Democratic Socialism? If we are to argue that this is a distinction between evolutionary socialism and revolutionary socialism, well then I’d suggest that anyone in the latter camp inside Labour is in the wrong party (On the other hand, a fairly cool-headed appraisal of the likelihood of revolution in this society in the near future tends towards a negative prognosis. That being the case why not, revolutionary spirit intact, join a party which has at least some serious links with the working class? And so the old song plays out).

But of course, and here in particularly, generally democratic socialist simply indicates a line further left than social democracy. But how much further left? Often the terms are used interchangeably. But they don’t have to be. Social ownership of industry? Re-distribution of wealth through taxation? Planned economy? Acceptance of representative democracy (or some form of participative and pluralistic democracy)? Marxism of whatever hue? All these appear to aspects of both social democratic and democratic socialist projects. However, contemporary social democracy appears to have essentially shied away from the first, largely the second, the third and the fifth. I’d suggest, that the first and the third might well comprise a democratic socialist agenda. To be honest even a strong social democratic program would – in this day and age – constitute a light democratic socialist program, such is the way that the left has tilted towards the centre (although that is not the whole story. There has been a retention of broadly social democratic impulses amongst the population at large – sometimes in unexpected and contradictory manifestations and government has had to act to appease such impulses hence the stalling of privatisation agendas and the ‘safeguarding’ of core elements of welfarism).

Then again, in economies where planning and ownership appear completely off the agenda the mechanisms for reappropriation seem limited in the short-term. So is this an agenda subject to perpetual delay? And it is also fair to point to new strands, or reworkings of old strands, of libertarian socialism which are strongly averse to statism of whatever form. So therefore while the terms have a utility, it is not exhaustive. But that is the point. It is impossible to clearly demarcate Social Democracy, impossible too to clearly demarcate Democratic Socialism. And as noted above, the distinctions are not entirely cost effective. At best these terms serve as guides, not proscriptions.

One interesting dynamic of contemporary Irish left politics is the way the SWP and SP have cornered the market on the term ‘socialist’. Not entirely, but sufficiently to give a certain distinctiveness to the utility of the term by others. There is no more tiresome argument than to read an SP member or other argue that they alone have some sort of moral or ethical copyright on the term socialist (although by way of balance can I propose that there is little more irksome than to read Ireland’s leading self-proclaimed ‘socialist’ use it either). On a personal note, and following on from some of Garibaldy’s comments on another thread, I entered Democratic Left in the hope that it would be Democratic Socialist/Eurocommunist (and let’s not open that can of worms). I left convinced that it was hardly less social democratic than Labour and in some very important ways, to me at least, was actually more rightward in its positions.

Consider the situation across the Irish Sea. Today, Polly Toynbee, writing in the Guardian last week has found Labour wanting. Writing about the dismal fiasco that is represented by the frankly disgraceful retreat on inheritance tax by Labour she notes that ‘this was the week that social democracy ebbed away’. Not democratic socialism, mind you, but social democracy. And to contextualise it she argues that Blair and Brown ‘purged’ socialism when they forged New Labour. She suggests that “Clause Four was indeed archaic nonsense’. And yet, the curious thing is that if one should trouble oneself to consult the BLP Constitution one will find…

‘The Labour Party is a democratic socialist party. It believes that by the strength of our common endeavour we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential and for all of us a community in which power, wealth and opportunity are in the hands of the many, not the few.’

Now that, no doubt, will raise the occasional wry chuckle from those, like myself who have passed through the BLP at one point or another. And yet, it remains part and parcel of that party. It has a certain currency. It can be used as an yardstick against which the goals and objectives of the BLP can be assessed. But the point is that by any standards of a ‘democratic socialist’ party the u-turns on inheritance tax represented a debacle. I can stomach much, but to my mind inheritance tax is fundamental to a left project. Toynbee also, correctly to my mind, argues that “we now have a centrist government in Europe’s most unequal country. Our government stands somewhat to the right of Merke’s coalition in Germany, to the right of economic policy in France…at least in Europe there are leftwing parties to still make the public arguments: in England, due to our malfunctioning electoral system, a political generation has barely heard the case for social justice.” The point is that this dynamic is equally apparent in this polity, perhaps more so because the explicit left is so weak (although let me – if I haven’t before – rapidly reference a brilliant piece by Splintered Sunrise which notes that objectively FF was for most of its history more left wing than SF – perhaps that tells us something too).

And weirdly, despite the fact that I’m putting forward a defence of the word socialist in this context, I’ve never much liked it. I’m vastly fonder of it with the prefix ‘democratic’. I’m not hugely fond of the term Social Democrat, that may be a hangover from the foundation of the UK variants (although I’ve always admired from afar the Nordic parties of the same name). But like so much in politics categorisations seem to be hauled out often for no other reason than to bash ones ideological opponent over the head. Mind you, also worth noting that the LP belongs to the “Socialist” International, and indeed the European “Socialists”. How to square that circle? I look forward to the Conference.

For myself I see no problem with the terms Democratic Socialist and Social Democrat co-existing. Personally I prefer the terms Marxist, or leftist or indeed left progressive or red/green and, again, I’m fairly certain the word democratic is in there somewhere. But all these categories are fluid. One of the most illuminating aspects of building up this left archive is to see how catch-all ‘socialism’ is. Communists of the Moscow line were ‘socialists’, Mitterand was a ‘socialist’, the British Labour Party is ‘socialist’, Joe Higgins is a ‘socialist’, I’m a ‘socialist’ of sorts and I’ll bet a large percentile of you are ‘socialist’ as well. It hasn’t stopped some interesting and even heated discussions and debates on these pages, and if it has that flexibility… well then perhaps we shouldn’t invest it with too much emotion. Yet, sometimes we have to. Sometimes it is necessary to say that a term has a currency, however nebulous it may be, however difficult it is to feel entirely comfortable with it and that it links into broader discourses.

What I find depressing is to see an argument I saw in the late 1980s replayed inside Labour. If the left is going to move forward I genuinely believe it should start to move beyond attempts to corral everyone within neat categorisation and accept that there are different strands that have to work together. To be entirely honest, both about itself and its potential Labour would append Social Democrat as a descriptor within the Constitution in addition to Democratic Socialist.

It is entirely reasonable, perhaps even necessary, that within a political party of the left that there are different platforms that represent different strands. Sometimes this can be destructive, but sometimes it can lead to a vitality, an energy, and indeed an honesty about the realities of political formations.

But let’s put this in perspective. Is it seriously suggested that altering this term is going to bring the onset of a Gilmore tide? Where is the public demand for such a move, other than in the mutterings in the media about Labour ‘changing’ in some unspecified fashion? And yet, perhaps this is the dragon about to be despatched. Gilmore generating his Kinnock-like ‘Militant’ moment. I genuinely hope not. I find the idea that that dynamic of change, that token of political ‘authenticity’ and power, is somehow still with us uniquely depressing. Because the thought strikes me that we might well see a more overt promotion of the the term ‘Social Democrat’ within the Labour party on foot of such a change. As I say, I have no argument with that term, amongst others, in usage within Labour, but I’m also beginning to wonder could this be the first gentle soundings that would precede a name-change?

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