Future of Social Democratic Capitalism
For Habermas actually existing capitalism’s defining characteristic is its super-territoriality. He describes the present era is “a post national constellation” (The Postnational Constellation) and suggests that there is no alternative to post nationalism. In Habermas’ view, the greatest failure of this post national capitalism is its production of mass un and under-employment (Defined as employment for less than 16 hours a week). Even according to official statistics unemployment in the EU has exceeded 10 percent of the labour force during the last three decades of the twentieth century. The state has lost fiscal authority because politics remains national unable to deal effectively with its super-territorial constituents. There must now be a democratically legitimated exercise of political power “above” the legislative levels of the nation state so that a super-national social contract can be constructed and a super-national welfare state willed into being. Habermas pins his hope in a federal Europe which will constrain the inequality generating tendency of the transnational enterprises and eliminate the need for competition among nation states (specially, competitive devaluation) to attract and retain investment.
Constructing “Federal Europe” in Habermas’ perception must involve both the formulation of a new political constitution and the evolution of a distinctively European civil society. The constitution must preserve the idea of a self-determining community and intellectuals must struggle for the creation of a European public sphere. Habermas is aware of the lack of popular enthusiasm for such political projects – he laments the “issue less” elections which brought Schroder to power and the continuing decline in voter turn out (specially in elections for the European parliament). He however, rejects Luhman’s image of a media driven society. The “public” is fragmented and distracted but Habermas asserts it retains a capacity to weigh competing arguments. The defense of the public communication sphere which links the “public” with decision-makers remains very important. But “meaningful” and effective public communication requires that market forces should not dominate the communication networks – these networks are replacing the political party as a channel of interaction between the “public” and decision takers. This decline of political parties is welcomed by Habermas for in his view it represents a “debureaucratization of civil society”.
Habermas also accepts the inevitability of mass unemployment. He advocates the “redistribution of a lower volume of necessary labour” and shifting the burden of the cost of unemployment from the unemployables to “society”. This requires a strengthening of “the egalitarian self-understanding of society”. Opposition to the enhanced regulation of society entails a “social fatalist” ideology which legitimises the pursuit of individualised purposes in the context of a value free institutional network. This is an abandoning of consensual values and hence of democracy (Habermas believes that defending democracy is a common project which links Anglo-Saxon analytical philosophy and continental philosophical schools. He regards the work of both Brandom and Rorty as fundamentally in the Hegelian tradition). Habermas’ commitment to a pluralist democracy based upon a respect of the “autonomy of the individual” provides the ideological ground for the reforms he suggests (According to The Post National Constellation values endorsed by Habermas include (a) respect for the particularity of strangers (b) international co-operation (c) autonomy of individuals and plurality of identities (d) suspicion of any “rhetoric of the high or the deep” and (e) resistance to the trivialisation of “the life of the mind”).
Aglietta endorses the commitment to democratically generated consensual values. In his recent reformulation of regulation theory Aglietta (A Theory of Capitalist Regulation) de-emphasises the role of enterprises as the co-ordinating links between the micro and the macroeconomy. Agleitta now regards the history of capitalism as the history of the development of a high wage society. Contemporary high wage society faces three major problems according to Agleitta (a) globalisation (b) threat to social identity and (c) the “shrinking” of the state. New mediation mechanism for reestablishing a high growth regime are gradually emerging. The key features of the new system are (a) expanded competition specially in labour markets [This crucially weakens the impact of collective bargaining and defense against enterprise “outsiders” is no longer available to unionized labour]. (b) control of enterprises by institutional share holders (specially fund managers) and (c) the establishment of market valuation as the basic criteria for social success.
Mediation mechanisms must be evolved to reconcile efficiency and equity. Agleitta suggests that the emergence of the institutional funds provide an opportunity for the trade union. Trade unions must increase their ownership of company shares. This conversion of contractual savings into (collective) property rights will have decisive impact on the way enterprises are run and in their investment and employment policies. Trade unions could use pension fund ownership to protect management from hostile take over bids in return for a corporate strategy which pursues not high short term profitability but stable long term returns. With profitability ensured collective bargaining – at the level of the enterprises the industry and the (super national) region could acquire increased saliency.
Agleitta also calls for a change in the role of the state to tackle the problem of endemic mass unemployment. Training programs must be designed by government to cover the entire working life of each member of the labour force – the state must be able to offer employers a labour force with a constantly rising skill level. Every laborer must periodically return to the training process, and skills acquired must be transferable between enterprises. Job contracts should facilitate mobility and this should be used as a means for enhancing workers negotiation skills. There should be a deliberate fusion of public and private finance to achieve these ends.
Capitalism needs an “investing” not a minimalist state. The new “division of labour” between capitalism’s public and private spheres calls for an enhanced role for the states in the production of technological knowledge (Justified by the existence of externalities) but the utilization of these resources must be left to the private sector. The state must move out of transportation, energy, distribution and municipal management services. It must concentrate its investment resources on training and technological upgrading on a system wide basis. Aglietta endorses orthodox Keynesian “stabilization” measures for nurturing these “investing” states. He regards orthodox Keynesian monetary policy measures as of particular importance in dampening speculative pressure and making the prudential regulation of banks more effective.
Aglietta recognizes that his proposed mediation mechanisms are compatible with globalization, the social primacy of markets and the greater mobility of labour. They come into play before the operations of the price system. But they are not a means for addressing the problem associated with growth of rising inequalities and declining social solidarity. Solidarity requires that the nation as a whole take the risks that threaten life in society – social concerns must be part of individual aspirations. Aglietta endorses Rawls “difference principle” in the statement that “real freedom in a society can be measured only by the resources of its poorest member” (A Theory of Capitalist Regulation, p. 54).
The disintegration of the Fordist regime of accumulation has weakened democracy in the West and there is a need to redefine social rights. In Fordism, these were defined with reference to occupational solidarity. This solidarity has broken down and there is now a need to assert the “right” that exclusion from society cannot be tolerated. Freedom from social exclusion must become the categorical imperative of the state and the supreme aim of social democracy (Aglietta recognizes that this implies significantly higher levels of taxation). Struggle for the social right of “non excludability” avoids the danger that social solidarity will be constructed on the basis of nationalist/racist identities. A central concern of this movement should be the provisions of a minimum income to all which is sufficient to ensure that everyone can effectively access Rawls “primary goods” (According to Agleitta, this guaranteed minimum income should be provided by the state. Its’ provision can therefore reduce the wages paid by companies. It can also reduce income inequalities). The agency for creating this new social solidarity should be a broad coalition of the single issue movements (eco-feminism, animal rights, disarmament, gay rights etc.) which have dominated resistance politics in the West in recent years.
A concern with social solidarity is central to Rorty ( Achieving Our Country : Leftist Thought in Twentieth-Century America ). This in his view can be built only on the basis of a renewed “national pride”. Such national pride must emphatically reject the view that democracy has become a farce. The “traditional left” had national pride in Rorty’s view – they were agents of social change not mere spectators. They believed that “our country, its democratic system and its prosperous future are beyond suspicion” (p 10). They cherished the American myth and “there is no non mythological, non ideological way of telling a country's story for objectivity is of little use when one is trying to decide what sort of power or nation to be. There are no neutral objective criteria dictating (this) choice” (p 13).
The modern left seems to Rorty to have no vision for America. It must endorse Dewey and Whitman's de christianizing secularism. Rorty quotes Whitman.
“And I call to mankind.
Be not curious about God.
For I who am curious about each am not curious about God”.
( Leaves of Grass p. 16).
Americans should “spend the energy past nations spent on discovering God’s desire on discovering one another’s desire” (Rorty p.16). Hegel taught Dewey and his followers “to look forward not upward” (p.19) and “to purge oneself of orthodox Christianity” (p. 20). “America is the first nation state with nobody but itself to please – not even God. We are the greatest power because we put ourselves in the place of God … we redefine God as own future selves” (p.22). [Also “Christ can tell us nothing about the ultimate significance of human life” (p. 24).]
Rorty stresses the need “to treat evaluative terms such as “true”, “right” not as signifying a relation to some antecedently existing thing [That is to regard truth and rightness as having objective value.] but as “expressions of satisfactions” (p 26). We “should abandon the question; why should we prefer democracy to obedience in favour of the question given the preference we Americans have what should we say about truth, knowledge, reason, virtue” (p.27-28). The preference for self-creation and rejecting God’s authority needs no justification. In Rorty, this commitment to democracy justifies national crimes such as the whole scale massacre of the Red Indians [Around 7 million Red Indians were killed during 1750-1890 ( Bury My Heart at Wounded Knee: An Indian History of the American West pp. 147-161)] and the slaughter of the Vietnamese (Rorty p. 32). Rorty follows Dewey in rejecting the possibility of sin (p. 33)[Here Rorty notes the similarity between Dewey on the one hand and Neitzsche, Derrida and Heidegger on the other “for all these philosophers objectivity is a matter of inter subjective consensus among human beings not of accurate representations of something non-human” (p. 35)]. Social democracy must return to the pragmatism and secularism of Dewey and Whitman and use democratic institutions to serve the cause of “social justice”. The “cultural Left” should return to social democracy and abandon “the politics of difference”. It should think less about stigma and more about money, “more about laws that need to be passed” (p. 78), “combining political freedom with centralized economic decision making” (p. 79). Social democrats should target growing economic inequality and economic insecurity. Rorty sees possibilities of populist revolt in the “prolitarianisation of the Americans bourgeois ie.” (Rorty p. 83).
Rorty believes that “things will get much worse much faster … The world economy will soon be owned by a cosmopolitan upper class which has no sense of community with any workers anywhere” (p 85). Rorty also deplores America’s growing dependence on foreign capital (p 86) and increased free trade (p 88). He sees a conspiracy “of the super rich to keep the minds of the population elsewhere - to keep the bottom 75 percent of Americans busy with ethnic and religious hostilities” (Rorty p 88) and fears that fascism may be America's future (p. 89). “ The non suburban electorate will decide that the system has failed” (p. 91). Social democrats should counter this by (a) putting a moratorium on theory - forgetting the awkward questions raised by Lacan, Leyotard and Derida about the multiple incoherences characteristic of this type of vulgar communitarianism (b) mobilise national pride in being American (c) “ give both religion and philosophy a pass” ( p. 95) and reaffirm faith in the projects of the old fashioned reformist liberals and (d) concentrate political attention within the context of the nation state and “construct inspiring images of the country” (p. 99). This should provide a basis for a people’s charter and an alliance with the trade unions. Social democrats should recognize that participatory democracy is an illusion and that there is no alternative to capitalism ["The public sensibly has no interest in getting rid of capitalism nor should it be interested in participatory democracy (p.104)]. Piece meal reform within the framework of a market economy should be the main concern of social democracy.
Achieving our Country is a polemic against the very widespread disillusionment with liberal democracy in general and “piecemeal reform within the framework of a market economy” in particular - this is reflected in books such as those by Stephenson and ( Jameson ) and the rightward shift of the Democratic party. This shift is also mirrored in the national programs of the social democratic parties of Blair, Schroder.
John Gray one of Europe’s leading political thinkers [Gray began as an admiring interpreter of Hayek but became disillusioned with orthodox conservatism and was briefly a supporter of Blair. His latest book ( False Dawn: The Delusions of Global Capitalism) expresses profound dissatisfaction with social democracy. For an account of Gray’s intellectual journey, see Collis 1998 “Ethics Man: John Gray’s New Moral World” Political Quarterly Vol. 69 No. 1 pp. 59-71.]regards Rorty’s vulgar communitarianism as a “shallow and ultimately incoherent perspective” ( Enlightenment's Wake: Politics and Culture at the Close of the Modern Age p. 146). But Gray is disillusioned not just with social democracy but with the Enlightenment project in general. Once a follower of Hayek he now regards “the new liberal project as the greatest contemporary threat to human well-being” ( False Dawn: The Delusions of Global Capitalism p. 3). Gray rejects the idea that the free market is a natural phenomenon - he regards it as a highly artificial and fragile political construct. In Gray’s view, capitalism undermines itself by unleashing forces that destroy the institutions necessary for its survival. He maintains that the Enlightenment project of promoting autonomous reason as the basis of morality has proved to be self-destroying. The post-modern condition of fractured perspectives and groundless practice brings not just disenchantment but threatens the very existence of Western civilization ( Enlightenment's Wake: Politics and Culture at the Close of the Modern Age p. 146). If globalization is not checked, Gray believes it will lead to war, impoverishment and the break down of social cohesion. Globalization crucially undermines democracy by making social democrat practices (specially Keynesian policies) impossible [In ( False Dawn: The Delusions of Global Capitalism ) Gray shows how globalised capital contributed to the destruction of social democratic practice in Sweden and New Zealand].The free market is remorselessly destroying American social cohesion by deepening insecurities and corroding the basic institutions of bourgeois life (specially the family). Gray takes comfort from the fact that the United States does not have the power to impose a universal free market all over the world. Resistance to globalization is possible but Gray believes that the most likely outcome of the American attempt to impose the free market on the rest of the world will be increased chaos and disorder, sparking off a wave of social and financial turmoil which will eventually engulf the United States: He writes, “global capitalism is inherently ungovernable” (p. 209). In Gray’s perspectives, capitalism will not survive as a unified global system: Attempts to stamp a free market model on all countries by the USA the Fund and the Bank will have terrifying consequences: Resistance to such attempts through augmenting national autonomy is urgently necessary. Nevertheless such resistance will merely create “a fragmentation of the world economy into predatory regional capitalisms” (p. 263). Gray remains profoundly pessimistic throughout his analysis.
In Noam Chomsky's view(Power in The Global Arena), the free market is a myth.
Capitalism today is a “system of administration of markets by collectivist legal enterprises – mergers, cartels, corporate alliances - in associations with powerful states and international bureaucracies which regulate and support private power” (ibid.). Chomsky notes that concentration and centralization of power and privilege is increasing, union victimization has increased and wages of two thirds of American labour in 1998 were below the 1978 level (ibid.).
According to Alan Greenspan the American recovery of the 1990s was primarily, attributable to “greater worker insecurity” [Testimony before the Senate Banking Committee, quoted in ibid.]. State initiatives remain crucially important for sustaining capitalist profitability and concentration [Chomsky demonstrates this with reference to the crucially important role of public sector investment in the development of the internet, information processing, lasers, satellites and transistors] and “naturally business is delighted with this. The public pays the costs, assumes the risk while profits and power are privatized” (ibid).
Increased concentration and centralisation implies that democracy has rising costs – hence the continuing resistance to the growth of social spending. Moreover, liberalization of the financial system is a powerful weapon against the welfare state – it systemically undermines popular sovereignty and creates what Mahon has called “a virtual senate” (Mobile Capital and Latin American Development, p. 10).
Mobile capital has the powers to impose its own social policy upon the democratic state. Mobile capital – 95 percent of which is speculative and short term in nature –imposes a low growth, low wage macroeconomic strategy specially on developing countries and significantly increases their vulnerability to wild fluctuations in world financial markets. Mobile capital transfers sovereignty to the giant banks financial intermediaries and firms, which effectively administer the globalised economy. The political power of MNCs, international funds and banks, has been greatly increased by the odious debt* that has been imposed upon developing countries by the United States the IMF and the World Bank (Mad Money:When Markets Outgrow Governments).
The formal acknowledgment of this transfer of sovereignty from the nation state to the corporation is contained in the OECD’s. Multilateral Agreement on Investment (MAI) which is now being championed by the IMF. This transfer of political sovereignty from states to international corporations is also the primary objective of the amendment to the IMF’s first Article of Agreement mandating capital account convertibility.
The MAI clearly grants corporations the rights of states. Corporations can sue governments. The case would go to private panels not to courts. The states would not have the right to sue corporations. The MAI includes what is called a “ratchet effect” that is based on “standstill” and “rollback”. “Standstill” means that signers cannot introduce any legislation which interferes with unrestricted corporate rights to do anything they feel like. “Rollback” refers to the fact that signers are obliged to roll back existing legislation that interferes with these rights. There is a twenty-year lock so, once you get into it, you are stuck for twenty years. Of course, that doesn't apply equally: if the US wants to get out of it, it will treat it like the Uruguay Round when it decided to ban super-computers. But for the weaker people, it’s a lock. Investors are freed from even the most minimal obligations that might be imposed by some democratic interference with private tyrannies. The draft treaty accords investors the right to move assets freely, including production facilities and financial assets, without “government interference”. By modes of chicanery familiar to corporate lawyers, the rights granted to “foreign investors” transfer easily to “domestic investors” as well. Among democratic choices that might be barred are those calling for local ownership, sharing of technology, local managers, corporate accountability, provisions for a living wage, preferences (for deprived areas, minorities, and so on), labour consumer environmental protection, restrictions on dangerous products, protection for small business, support for strategic and emerging industries, land reform, community and worker control labour actions etc. (which could be construed as an illegal threat to order).
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*When the United States colonised Cuba in the late nineteenth century it cancelled Cuba’s debt to Spain on the grounds that the debt was imposed upon the people of Cuba without their consent. Legal treatises call such debt “odious debt” and recognise “no obligation for the nation. (This debt) is the responsibility of the power that has imposed it” (Odious Debts ).
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Social democracy and its proposed reforms are both necessary and impossible (in a Sartrean sense). As Chomsky notes, “the long term goal of modern capitalism (is to create) an international political economy which is organized by powerful states and secret bureaucracies whose primary function is to serve the concentration of power which administer markets though their own internal operations, though networks of corporate alliances, including the intra-firm transactions that are mislabeled “trade”. They rely on the public for subsidy for research and development, for innovation and for bailouts when things go wrong. They rely on the powerful states for protection from dangerous ‘democracy openings’. In such ways, they seek to ensure that the prime beneficiaries of the world's wealth are the right people: the smug and prosperous Americans: and their counterparts elsewhere (Power in The Global Arena).
As Agleitta and Rorty argue however there are limits to the constraints that can be imposed on the democratic process. Constraining democracy is constraining capital itself – for capital is a concrete form of freedom As Suri (“Some Contradictions of Capitalist Democracy” Pakistan Business Review vol. 1 no. 1 p61-70, here 18) argues the circuit of capital is logically complemented by the circuit of citizenship since the vote is the abstract form of freedom]. Social democratic reform is necessary in that it sustains faith in freedom through the promotion of both consumerism and participation in decision-making processes.
But social democratic reform is impossible for twentieth century experiences have shown that accumulation/organization of capital requires the atomisation/disorganisation of labour. Traditional agencies for implementing social democrat reforms – trade unions, political parties, broad fronts*, national governments – lose authority as capitalism matures.
Hence a fundamentally important disjuncture of modern capitalism, the national organization of democracy and the supra state organisation of markets cannot be addressed by social democracy**. This separation undermines capital's universalism since growing exclusion and disempowerment is necessary for growing concentration and centralisation.
Thus, space seems to appear for the distributional reforms on the social democrat policy agenda. A developing country such as Pakistan clearly gains from resisting globalisation and the deceleration of growth de-industrialisation and the financial sector volatility which globalisation entails.
Mobilising resistance to globalisation cannot be undertaken on social democratic grounds however because social democracy does not delegitimise human rights discourse which is now a principle instrument for the atomisation of the individual and the destruction of collective identities specially in non western societies such as Pakistan.
If political mediation processes remain dominated by human rights discourse, distributional issues will be addressed by poverty alleviation, basic needs type programmes – sponsored by the agencies of multinational capital. The central purpose of such programmes is thwarting the growth of collective rights and identities.
The social democratic agenda becomes irrelevant in such a scenario and countries such as Pakistan “leap over” the Fordist phase in the process of subordination to global capital. Even in western countries, a return to Fordism seems increasingly unrealistic as Lafontaine and Jospin have recently discovered.
There are grounds for mobilising the excluded and the disempowered (the mustadafeen) in movements of resistance but such movements – unlike social democracy – will have to reject not just capitalism but avarice/takathur. They will have to de-legitimise freedom and re-legitimate love as the organising principle of human life at both the society and the state (This is the common project of Christianity and Islam). That however is another story.
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*These rely on a coming together of social democratic parties and single issue movements, but these movements are necessarily exclusionist – not every one can be a woman, a black or gay. Their commitment to social democracy is partial in a way in which the commitment of trade unions and political parties is not.
** That is why federal Europe remains a neo liberal project and social democratic parties have adopted neo liberal stances when addressing problem of European integration.
Constructing “Federal Europe” in Habermas’ perception must involve both the formulation of a new political constitution and the evolution of a distinctively European civil society. The constitution must preserve the idea of a self-determining community and intellectuals must struggle for the creation of a European public sphere. Habermas is aware of the lack of popular enthusiasm for such political projects – he laments the “issue less” elections which brought Schroder to power and the continuing decline in voter turn out (specially in elections for the European parliament). He however, rejects Luhman’s image of a media driven society. The “public” is fragmented and distracted but Habermas asserts it retains a capacity to weigh competing arguments. The defense of the public communication sphere which links the “public” with decision-makers remains very important. But “meaningful” and effective public communication requires that market forces should not dominate the communication networks – these networks are replacing the political party as a channel of interaction between the “public” and decision takers. This decline of political parties is welcomed by Habermas for in his view it represents a “debureaucratization of civil society”.
Habermas also accepts the inevitability of mass unemployment. He advocates the “redistribution of a lower volume of necessary labour” and shifting the burden of the cost of unemployment from the unemployables to “society”. This requires a strengthening of “the egalitarian self-understanding of society”. Opposition to the enhanced regulation of society entails a “social fatalist” ideology which legitimises the pursuit of individualised purposes in the context of a value free institutional network. This is an abandoning of consensual values and hence of democracy (Habermas believes that defending democracy is a common project which links Anglo-Saxon analytical philosophy and continental philosophical schools. He regards the work of both Brandom and Rorty as fundamentally in the Hegelian tradition). Habermas’ commitment to a pluralist democracy based upon a respect of the “autonomy of the individual” provides the ideological ground for the reforms he suggests (According to The Post National Constellation values endorsed by Habermas include (a) respect for the particularity of strangers (b) international co-operation (c) autonomy of individuals and plurality of identities (d) suspicion of any “rhetoric of the high or the deep” and (e) resistance to the trivialisation of “the life of the mind”).
Aglietta endorses the commitment to democratically generated consensual values. In his recent reformulation of regulation theory Aglietta (A Theory of Capitalist Regulation) de-emphasises the role of enterprises as the co-ordinating links between the micro and the macroeconomy. Agleitta now regards the history of capitalism as the history of the development of a high wage society. Contemporary high wage society faces three major problems according to Agleitta (a) globalisation (b) threat to social identity and (c) the “shrinking” of the state. New mediation mechanism for reestablishing a high growth regime are gradually emerging. The key features of the new system are (a) expanded competition specially in labour markets [This crucially weakens the impact of collective bargaining and defense against enterprise “outsiders” is no longer available to unionized labour]. (b) control of enterprises by institutional share holders (specially fund managers) and (c) the establishment of market valuation as the basic criteria for social success.
Mediation mechanisms must be evolved to reconcile efficiency and equity. Agleitta suggests that the emergence of the institutional funds provide an opportunity for the trade union. Trade unions must increase their ownership of company shares. This conversion of contractual savings into (collective) property rights will have decisive impact on the way enterprises are run and in their investment and employment policies. Trade unions could use pension fund ownership to protect management from hostile take over bids in return for a corporate strategy which pursues not high short term profitability but stable long term returns. With profitability ensured collective bargaining – at the level of the enterprises the industry and the (super national) region could acquire increased saliency.
Agleitta also calls for a change in the role of the state to tackle the problem of endemic mass unemployment. Training programs must be designed by government to cover the entire working life of each member of the labour force – the state must be able to offer employers a labour force with a constantly rising skill level. Every laborer must periodically return to the training process, and skills acquired must be transferable between enterprises. Job contracts should facilitate mobility and this should be used as a means for enhancing workers negotiation skills. There should be a deliberate fusion of public and private finance to achieve these ends.
Capitalism needs an “investing” not a minimalist state. The new “division of labour” between capitalism’s public and private spheres calls for an enhanced role for the states in the production of technological knowledge (Justified by the existence of externalities) but the utilization of these resources must be left to the private sector. The state must move out of transportation, energy, distribution and municipal management services. It must concentrate its investment resources on training and technological upgrading on a system wide basis. Aglietta endorses orthodox Keynesian “stabilization” measures for nurturing these “investing” states. He regards orthodox Keynesian monetary policy measures as of particular importance in dampening speculative pressure and making the prudential regulation of banks more effective.
Aglietta recognizes that his proposed mediation mechanisms are compatible with globalization, the social primacy of markets and the greater mobility of labour. They come into play before the operations of the price system. But they are not a means for addressing the problem associated with growth of rising inequalities and declining social solidarity. Solidarity requires that the nation as a whole take the risks that threaten life in society – social concerns must be part of individual aspirations. Aglietta endorses Rawls “difference principle” in the statement that “real freedom in a society can be measured only by the resources of its poorest member” (A Theory of Capitalist Regulation, p. 54).
The disintegration of the Fordist regime of accumulation has weakened democracy in the West and there is a need to redefine social rights. In Fordism, these were defined with reference to occupational solidarity. This solidarity has broken down and there is now a need to assert the “right” that exclusion from society cannot be tolerated. Freedom from social exclusion must become the categorical imperative of the state and the supreme aim of social democracy (Aglietta recognizes that this implies significantly higher levels of taxation). Struggle for the social right of “non excludability” avoids the danger that social solidarity will be constructed on the basis of nationalist/racist identities. A central concern of this movement should be the provisions of a minimum income to all which is sufficient to ensure that everyone can effectively access Rawls “primary goods” (According to Agleitta, this guaranteed minimum income should be provided by the state. Its’ provision can therefore reduce the wages paid by companies. It can also reduce income inequalities). The agency for creating this new social solidarity should be a broad coalition of the single issue movements (eco-feminism, animal rights, disarmament, gay rights etc.) which have dominated resistance politics in the West in recent years.
A concern with social solidarity is central to Rorty ( Achieving Our Country : Leftist Thought in Twentieth-Century America ). This in his view can be built only on the basis of a renewed “national pride”. Such national pride must emphatically reject the view that democracy has become a farce. The “traditional left” had national pride in Rorty’s view – they were agents of social change not mere spectators. They believed that “our country, its democratic system and its prosperous future are beyond suspicion” (p 10). They cherished the American myth and “there is no non mythological, non ideological way of telling a country's story for objectivity is of little use when one is trying to decide what sort of power or nation to be. There are no neutral objective criteria dictating (this) choice” (p 13).
The modern left seems to Rorty to have no vision for America. It must endorse Dewey and Whitman's de christianizing secularism. Rorty quotes Whitman.
“And I call to mankind.
Be not curious about God.
For I who am curious about each am not curious about God”.
( Leaves of Grass p. 16).
Americans should “spend the energy past nations spent on discovering God’s desire on discovering one another’s desire” (Rorty p.16). Hegel taught Dewey and his followers “to look forward not upward” (p.19) and “to purge oneself of orthodox Christianity” (p. 20). “America is the first nation state with nobody but itself to please – not even God. We are the greatest power because we put ourselves in the place of God … we redefine God as own future selves” (p.22). [Also “Christ can tell us nothing about the ultimate significance of human life” (p. 24).]
Rorty stresses the need “to treat evaluative terms such as “true”, “right” not as signifying a relation to some antecedently existing thing [That is to regard truth and rightness as having objective value.] but as “expressions of satisfactions” (p 26). We “should abandon the question; why should we prefer democracy to obedience in favour of the question given the preference we Americans have what should we say about truth, knowledge, reason, virtue” (p.27-28). The preference for self-creation and rejecting God’s authority needs no justification. In Rorty, this commitment to democracy justifies national crimes such as the whole scale massacre of the Red Indians [Around 7 million Red Indians were killed during 1750-1890 ( Bury My Heart at Wounded Knee: An Indian History of the American West pp. 147-161)] and the slaughter of the Vietnamese (Rorty p. 32). Rorty follows Dewey in rejecting the possibility of sin (p. 33)[Here Rorty notes the similarity between Dewey on the one hand and Neitzsche, Derrida and Heidegger on the other “for all these philosophers objectivity is a matter of inter subjective consensus among human beings not of accurate representations of something non-human” (p. 35)]. Social democracy must return to the pragmatism and secularism of Dewey and Whitman and use democratic institutions to serve the cause of “social justice”. The “cultural Left” should return to social democracy and abandon “the politics of difference”. It should think less about stigma and more about money, “more about laws that need to be passed” (p. 78), “combining political freedom with centralized economic decision making” (p. 79). Social democrats should target growing economic inequality and economic insecurity. Rorty sees possibilities of populist revolt in the “prolitarianisation of the Americans bourgeois ie.” (Rorty p. 83).
Rorty believes that “things will get much worse much faster … The world economy will soon be owned by a cosmopolitan upper class which has no sense of community with any workers anywhere” (p 85). Rorty also deplores America’s growing dependence on foreign capital (p 86) and increased free trade (p 88). He sees a conspiracy “of the super rich to keep the minds of the population elsewhere - to keep the bottom 75 percent of Americans busy with ethnic and religious hostilities” (Rorty p 88) and fears that fascism may be America's future (p. 89). “ The non suburban electorate will decide that the system has failed” (p. 91). Social democrats should counter this by (a) putting a moratorium on theory - forgetting the awkward questions raised by Lacan, Leyotard and Derida about the multiple incoherences characteristic of this type of vulgar communitarianism (b) mobilise national pride in being American (c) “ give both religion and philosophy a pass” ( p. 95) and reaffirm faith in the projects of the old fashioned reformist liberals and (d) concentrate political attention within the context of the nation state and “construct inspiring images of the country” (p. 99). This should provide a basis for a people’s charter and an alliance with the trade unions. Social democrats should recognize that participatory democracy is an illusion and that there is no alternative to capitalism ["The public sensibly has no interest in getting rid of capitalism nor should it be interested in participatory democracy (p.104)]. Piece meal reform within the framework of a market economy should be the main concern of social democracy.
Achieving our Country is a polemic against the very widespread disillusionment with liberal democracy in general and “piecemeal reform within the framework of a market economy” in particular - this is reflected in books such as those by Stephenson and ( Jameson ) and the rightward shift of the Democratic party. This shift is also mirrored in the national programs of the social democratic parties of Blair, Schroder.
John Gray one of Europe’s leading political thinkers [Gray began as an admiring interpreter of Hayek but became disillusioned with orthodox conservatism and was briefly a supporter of Blair. His latest book ( False Dawn: The Delusions of Global Capitalism) expresses profound dissatisfaction with social democracy. For an account of Gray’s intellectual journey, see Collis 1998 “Ethics Man: John Gray’s New Moral World” Political Quarterly Vol. 69 No. 1 pp. 59-71.]regards Rorty’s vulgar communitarianism as a “shallow and ultimately incoherent perspective” ( Enlightenment's Wake: Politics and Culture at the Close of the Modern Age p. 146). But Gray is disillusioned not just with social democracy but with the Enlightenment project in general. Once a follower of Hayek he now regards “the new liberal project as the greatest contemporary threat to human well-being” ( False Dawn: The Delusions of Global Capitalism p. 3). Gray rejects the idea that the free market is a natural phenomenon - he regards it as a highly artificial and fragile political construct. In Gray’s view, capitalism undermines itself by unleashing forces that destroy the institutions necessary for its survival. He maintains that the Enlightenment project of promoting autonomous reason as the basis of morality has proved to be self-destroying. The post-modern condition of fractured perspectives and groundless practice brings not just disenchantment but threatens the very existence of Western civilization ( Enlightenment's Wake: Politics and Culture at the Close of the Modern Age p. 146). If globalization is not checked, Gray believes it will lead to war, impoverishment and the break down of social cohesion. Globalization crucially undermines democracy by making social democrat practices (specially Keynesian policies) impossible [In ( False Dawn: The Delusions of Global Capitalism ) Gray shows how globalised capital contributed to the destruction of social democratic practice in Sweden and New Zealand].The free market is remorselessly destroying American social cohesion by deepening insecurities and corroding the basic institutions of bourgeois life (specially the family). Gray takes comfort from the fact that the United States does not have the power to impose a universal free market all over the world. Resistance to globalization is possible but Gray believes that the most likely outcome of the American attempt to impose the free market on the rest of the world will be increased chaos and disorder, sparking off a wave of social and financial turmoil which will eventually engulf the United States: He writes, “global capitalism is inherently ungovernable” (p. 209). In Gray’s perspectives, capitalism will not survive as a unified global system: Attempts to stamp a free market model on all countries by the USA the Fund and the Bank will have terrifying consequences: Resistance to such attempts through augmenting national autonomy is urgently necessary. Nevertheless such resistance will merely create “a fragmentation of the world economy into predatory regional capitalisms” (p. 263). Gray remains profoundly pessimistic throughout his analysis.
In Noam Chomsky's view(Power in The Global Arena), the free market is a myth.
Capitalism today is a “system of administration of markets by collectivist legal enterprises – mergers, cartels, corporate alliances - in associations with powerful states and international bureaucracies which regulate and support private power” (ibid.). Chomsky notes that concentration and centralization of power and privilege is increasing, union victimization has increased and wages of two thirds of American labour in 1998 were below the 1978 level (ibid.).
According to Alan Greenspan the American recovery of the 1990s was primarily, attributable to “greater worker insecurity” [Testimony before the Senate Banking Committee, quoted in ibid.]. State initiatives remain crucially important for sustaining capitalist profitability and concentration [Chomsky demonstrates this with reference to the crucially important role of public sector investment in the development of the internet, information processing, lasers, satellites and transistors] and “naturally business is delighted with this. The public pays the costs, assumes the risk while profits and power are privatized” (ibid).
Increased concentration and centralisation implies that democracy has rising costs – hence the continuing resistance to the growth of social spending. Moreover, liberalization of the financial system is a powerful weapon against the welfare state – it systemically undermines popular sovereignty and creates what Mahon has called “a virtual senate” (Mobile Capital and Latin American Development, p. 10).
Mobile capital has the powers to impose its own social policy upon the democratic state. Mobile capital – 95 percent of which is speculative and short term in nature –imposes a low growth, low wage macroeconomic strategy specially on developing countries and significantly increases their vulnerability to wild fluctuations in world financial markets. Mobile capital transfers sovereignty to the giant banks financial intermediaries and firms, which effectively administer the globalised economy. The political power of MNCs, international funds and banks, has been greatly increased by the odious debt* that has been imposed upon developing countries by the United States the IMF and the World Bank (Mad Money:When Markets Outgrow Governments).
The formal acknowledgment of this transfer of sovereignty from the nation state to the corporation is contained in the OECD’s. Multilateral Agreement on Investment (MAI) which is now being championed by the IMF. This transfer of political sovereignty from states to international corporations is also the primary objective of the amendment to the IMF’s first Article of Agreement mandating capital account convertibility.
The MAI clearly grants corporations the rights of states. Corporations can sue governments. The case would go to private panels not to courts. The states would not have the right to sue corporations. The MAI includes what is called a “ratchet effect” that is based on “standstill” and “rollback”. “Standstill” means that signers cannot introduce any legislation which interferes with unrestricted corporate rights to do anything they feel like. “Rollback” refers to the fact that signers are obliged to roll back existing legislation that interferes with these rights. There is a twenty-year lock so, once you get into it, you are stuck for twenty years. Of course, that doesn't apply equally: if the US wants to get out of it, it will treat it like the Uruguay Round when it decided to ban super-computers. But for the weaker people, it’s a lock. Investors are freed from even the most minimal obligations that might be imposed by some democratic interference with private tyrannies. The draft treaty accords investors the right to move assets freely, including production facilities and financial assets, without “government interference”. By modes of chicanery familiar to corporate lawyers, the rights granted to “foreign investors” transfer easily to “domestic investors” as well. Among democratic choices that might be barred are those calling for local ownership, sharing of technology, local managers, corporate accountability, provisions for a living wage, preferences (for deprived areas, minorities, and so on), labour consumer environmental protection, restrictions on dangerous products, protection for small business, support for strategic and emerging industries, land reform, community and worker control labour actions etc. (which could be construed as an illegal threat to order).
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*When the United States colonised Cuba in the late nineteenth century it cancelled Cuba’s debt to Spain on the grounds that the debt was imposed upon the people of Cuba without their consent. Legal treatises call such debt “odious debt” and recognise “no obligation for the nation. (This debt) is the responsibility of the power that has imposed it” (Odious Debts ).
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Social democracy and its proposed reforms are both necessary and impossible (in a Sartrean sense). As Chomsky notes, “the long term goal of modern capitalism (is to create) an international political economy which is organized by powerful states and secret bureaucracies whose primary function is to serve the concentration of power which administer markets though their own internal operations, though networks of corporate alliances, including the intra-firm transactions that are mislabeled “trade”. They rely on the public for subsidy for research and development, for innovation and for bailouts when things go wrong. They rely on the powerful states for protection from dangerous ‘democracy openings’. In such ways, they seek to ensure that the prime beneficiaries of the world's wealth are the right people: the smug and prosperous Americans: and their counterparts elsewhere (Power in The Global Arena).
As Agleitta and Rorty argue however there are limits to the constraints that can be imposed on the democratic process. Constraining democracy is constraining capital itself – for capital is a concrete form of freedom As Suri (“Some Contradictions of Capitalist Democracy” Pakistan Business Review vol. 1 no. 1 p61-70, here 18) argues the circuit of capital is logically complemented by the circuit of citizenship since the vote is the abstract form of freedom]. Social democratic reform is necessary in that it sustains faith in freedom through the promotion of both consumerism and participation in decision-making processes.
But social democratic reform is impossible for twentieth century experiences have shown that accumulation/organization of capital requires the atomisation/disorganisation of labour. Traditional agencies for implementing social democrat reforms – trade unions, political parties, broad fronts*, national governments – lose authority as capitalism matures.
Hence a fundamentally important disjuncture of modern capitalism, the national organization of democracy and the supra state organisation of markets cannot be addressed by social democracy**. This separation undermines capital's universalism since growing exclusion and disempowerment is necessary for growing concentration and centralisation.
Thus, space seems to appear for the distributional reforms on the social democrat policy agenda. A developing country such as Pakistan clearly gains from resisting globalisation and the deceleration of growth de-industrialisation and the financial sector volatility which globalisation entails.
Mobilising resistance to globalisation cannot be undertaken on social democratic grounds however because social democracy does not delegitimise human rights discourse which is now a principle instrument for the atomisation of the individual and the destruction of collective identities specially in non western societies such as Pakistan.
If political mediation processes remain dominated by human rights discourse, distributional issues will be addressed by poverty alleviation, basic needs type programmes – sponsored by the agencies of multinational capital. The central purpose of such programmes is thwarting the growth of collective rights and identities.
The social democratic agenda becomes irrelevant in such a scenario and countries such as Pakistan “leap over” the Fordist phase in the process of subordination to global capital. Even in western countries, a return to Fordism seems increasingly unrealistic as Lafontaine and Jospin have recently discovered.
There are grounds for mobilising the excluded and the disempowered (the mustadafeen) in movements of resistance but such movements – unlike social democracy – will have to reject not just capitalism but avarice/takathur. They will have to de-legitimise freedom and re-legitimate love as the organising principle of human life at both the society and the state (This is the common project of Christianity and Islam). That however is another story.
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*These rely on a coming together of social democratic parties and single issue movements, but these movements are necessarily exclusionist – not every one can be a woman, a black or gay. Their commitment to social democracy is partial in a way in which the commitment of trade unions and political parties is not.
** That is why federal Europe remains a neo liberal project and social democratic parties have adopted neo liberal stances when addressing problem of European integration.
posted by Alghazalians at 11:23 AM
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