Can we opt for democratic socialism?
WITH the demise of the Soviet Union socialist politico-economic system has all but vanished from the global scene. Though the global recession, affecting both the developed and the developing countries, did bring on a muted debate on the most suitable system that the world can adopt, the sins of the socialist system in the past and the overarching influence of the Western system have denied any possibility of a serious debate on the issue.
Countries like Bangladesh have not fared well under either system, and the restoration of pluralism in our body politic has not improved our condition from LDC to a higher one. A serious investigation could be undertaken, since the ills of socialism are now well known to us all, whether some sort of egalitarian distribution of national income should not be aimed at.
Such an enquiry is overdue because of the failure of the Western world to see ahead the meltdown that Nobel laureate Paul Krugman describes as "predictable failure (and) the (economic) profession's blindness to the very possibility of catastrophic failure in a market economy."
Krugman was critical of economists who, until the Great Depression, saw capitalism as a perfect or near perfect system and fell in love with the concept as soon as the specter of the Great Depression receded from the public mind.
This school of economists ignored "the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of the markets that can cause the economy's operating system to undergo sudden, unpredictable crashes; and to the danger created when regulators don't believe in regulations (NYT-September 2009: How did economists get it so wrong - Paul Krugman)."
Could one conceive of democratic socialism that follows an electoral, reformist or evolutionary path to socialism, rather than a revolutionary one and distinct from communism? An economist has described it as "transformative democratic socialism," referring to the politics of the Clement Attlee government (a strong welfare state, fiscal redistribution, some nationalisation) and "revisionist democratic socialism," as developed by Labor minister and thinker Anthony Crosland and former British Prime Minister Harold Wilson.
Anthony Crosland contended that a more "benevolent" form of capitalism had emerged since the [Second World War]... According to Crosland, it was now possible to achieve greater equality in society without the need for "fundamental" economic transformation.
For Crosland, a more meaningful form of equality could be achieved if the growth dividend derived from effective management of the economy was invested in "pro-poor" public services rather than through fiscal redistribution (Robert PageJnl.Soc.Pol 2007)."
The inequity that rules the global economic order, notwithstanding the thesis propounded by Thomas Friedmen in his book The world is flat because, he says, technological forces have dismantled the barriers between the rich and the poor segments of the global society. Not so writes Naomi Klein in her book The Shock Doctrine, where she describes the rise of free market fundamentalism as "disaster capitalism."
In a review of her book Joseph Stiglitz speaks of the economic shock therapy given by the corporations and politicians who exploit the fear and disorientation of the people caused by wars, terror, coup d'etat, and natural disasters.
While preaching the merits of Adam Smith's theory of minimalist role by the government to lead a country "to the highest degree of opulence from lowest barbarism" advocates of capitalism ignored that perfect marriage between demand and supply is a theoretical concept, particularly in places where few firms forming syndicates control the supply and price of commodities.
In economies like ours captains of industry and commerce often also dictate state economic policies, either as pressure groups on the political authority or on their election as members of parliament.
With the withering away of idealistic politics and the advent of commerce based politics and expensive elections, politicians in both the developed and developing worlds have increasingly become dependent on donations from industrialists to finance their elections. Donations being hardly given for altruistic reasons the donors expect returns on their "investment." Such concentric relationship invariably leads to inequity and social stratification in terms of wealth and power.
Political theorist Benjamin Barber's criticism rests on his argument that while early capitalism encourages virtues with the working men's "robust motion of agency and spirited grittiness" while the decay that spells later-day capitalism suffers from a paradox -- "the needy are without income and the well heeled are without needs."
For Bangladesh, Nobel laureate Joseph Stiglitz's prescription of an economic development where, in his words, there will be "moral growth, growth that is sustainable, that increases living standard not just today but for future generations as well, and that leads to a more tolerant, open society" appears to be most suitable.
The idea is to avoid a situation as in the US today, where 20% of the wealth is possessed by only 1% of the population. As the recent Eid-ul-Fitr has shown, increase in income distribution between the haves and the have-nots may stunt the development process of the country.
Kazi Anwarul Masud is a former Secretary and Ambassador.
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