The future of the socialist agenda - part 2

Part one of this talk was carried on Page 8 on May 14

The summarized text of a talk given at the N. M. Perera Centre by Dr. Godfrey Gunatilleke Chairman Emeritus, Marga Institute.

The UNP documents of this period reflect an ideology of State benevolence which will soon develop into the overarching social commitment that will be binding on all parties whether of the Left or Right during the 1948-1978 period.

When introducing the first government budget after independence, the UNP Finance Minister J. R. Jayawardene proudly claimed that "free Ceylon may very justly and proudly call itself a social service State," What the UNP succeeded in installing and what prevailed upto 1978 was what might be described as a statist social welfare democracy.

The main elements of UNP social and economic agenda were free healthcare, free education, subsidised food, the distribution of State land to the landless and the heavily subsidised development of peasant agriculture.

They combined both a social programme and an economic development programme that dealt with the most urgent needs of the large rural population. How would the parties competing for the support of this electorate relate to this social agenda and what were the alternatives that they would propose? What happened elsewhere in the developed world and what Hayek described as the decline of socialism with the rise of the social welfare State also happened in Sri Lanka and took its indigenous form in a different context.

The contest between the UNP and the main opposition party the SLFP seemed to revolve round the issue of sustaining, protecting and expanding this agenda of social welfare. The SLFP would come forward as the true custodians of this programme for promoting the well-being of the common man and argue that the UNP was the party of the rich and would be ready to cut back on social welfare to protect the interests of the richer classes.

It did not develop a clear economic philosophy of its own - a well defined socialist idealogy which distinguished itself clearly from the UNP's mix of policies on the one hand or the hardcore socialism of the Marxist Left on the other. The appeal of the social welfare agenda and its coverage of the large mass of the population left the radical revolutionary type of socialism without and adequate popular base.

In those circumstances what the radical left could do was to add to this social welfare programme - establish a large sector of State enterprise and curtail the expansion of the private sector, reduce the power of the propertied classes through nationalisation and land reform, put a ceiling on housing property and incomes and push towards a more egalitarian society. When they had the opportunity of wielding power in coalition with the SLFP they pushed the economy in that direction even much further than where the SLFP would have probably gone on their own.

This mix of social welfare and the patchy efforts at changing the structures of ownership and the distribution of wealth and income did have lasting positive outcomes. It moved Sri Lanka in the direction of a more equitable society; it gave expression to an inherent driving force in democracy - its inner compulsion to move a society in the direction of greater and greater equality and to make the necessary political interventions when the economy left to itself aggravates the inequalities in society. Democracy has the effect of levelling in order to provide a level playing field. It is in this egalitarian impulse in democracy that socialism acquires its popular drive.

These compulsions of democracy would probably explain what was somewhat unusual and even unique to Sri Lanka the high degree of continuity in this statist socialist oriented programme of the 1948-1977 period.

In the alternations of power the UNP absorbed the structural changes that had taken place such as the acts of nationalization, the land reform, the ceiling on housing property, the State enterprise sector without any sharp reversals of policy during the 1948-1978 period. It is important to reflect on this phenomenon for a moment.

The UNP did not seem to be keen on projecting itself as the party of undiluted capitalism. It did not want to appear to be anti-socialist. In fact it wanted to appropriate a small part of the mantle of socialism. The UNP could not reach out for mass support in a democratic society without securing a large part of the rural base which contained a major share of the national electorate and the major share of Sri Lanka's poor.

The UNP support therefore depended on an agenda which brought benefits to the rural poor. This is true even in the post 1977 period when Sri Lanka veered decisively in the direction of a market economy.

In the post 1978 period, the UNP took pride in claiming that they carried through the major structural reform while keeping the social welfare programme virtually intact. As we saw earlier the name of the country in the constitution, the Directive Principles of State policy in the constitution, and finally Premadasa's vitally important contribution through the Million Housing Programme and Janasaviya, all projected the UNP part of the socialist agenda.

You might say that the 2000-2002 period of the UNF is a contrast; it is probably the way in which the UNP projected itself as an undiluted liberal capitalistic party during the short period it enjoyed power. It was the lack of a Premadasa-type socialist component and a clear unequivocal commitment to the social welfare programme that accounts for the reversal it suffered when it went back to the polls.

The conclusion we can draw from all this is that the socialist agenda in Sri Lanka had a pervasive impact, leaving attitudes, value systems and countervailing economic social and political structures, which gave to the socialist agenda, a significant weight and durability.

What perhaps is most significant for the future of the socialist agenda is the outcome of 1977. Was it the end of the road for the socialist agenda of the 1948-1977 era? It would not be correct to say that the 1977 election verdict was a verdict against the social welfare programme that had evolved from the pre-independence period.

What seemed to have been rejected at the 1977 election were the outcomes that people experienced in the other part of the socialist agenda, the part which prescribed central planning and state control of economic activities and state ownership of large components of the means of production and distribution - a regime which led to a denial of economic freedom and a minimum of consumer choice.

It seemed to be the rejection of the socialism that had been practised and advocated by the Marxist Left. Not only did it bundle out the SLFP government, it also gave a devastating blow to the Marxist Left with whom the hard prescriptions of state ownership and centralized planning seem to be most closely identified. The election outcome was a verdict of the people on the quality of life they had experienced under the socialist regime.

What went wrong with the socialist agenda of the 1948-77 period? Even with the slow pace of growth during that period the per capita income and purchasing power of the people had risen by more than a third and their consumption needs had risen. The bundle of goods and services demanded by households was growing larger and more diversified.

What a central planning system and a state managed delivery of goods and services could do with some success with a limited bundle of goods and services catering to basic needs becomes increasing by difficult to do as purchasing power of citizens increase and there is a demand for a wider range of goods and services and greater freedom of choice. All socialist systems seem to face this systemic crisis at some time or another.

Many socialist societies recognized the problem and moved in the direction of what they described as the socialist market system which incorporated a new mechanism to take into account the myriad decisions and choices that producers and consumers needed to make. This mechanism was the market.

In its essence the market signified economic freedom-the freedom of individuals and groups to invest and produce and the freedom of consumers to choose from among a variety of competing suppliers. In the economic sphere, the market was essential to bring forth the innate creativity in human beings and through these means expand the productive capacity.

It enhanced the quality of life of the people. I would argue that socialism does not and need not mean a denial of these essential values of the market. On the contrary, it should be a system which provides its citizens with a high degree of the economic freedom that is inherent in the market system.

Part of the challenge for the contemporary socialist agenda and the distinction between the laissez-faire market and what might be termed the socialist market I think lies precisely here. We have seen how both the free market capitalism and the non-market socialism could produce a nuclear disaster in Chernoby1, the tragedy of the chemical factory in Bhopal, the mega fraud of Enron or the Great Famine in Communist China in 1959/60. Chernoby1 and the famine occurred in societies where the State was all powerful but there was little democratic accountability.

Bhopal and Enron occurred in democracies which could not prevent failures of public accountability and state surveillance. The structure of ownership of the means of production, state or private, did not by itself account for the tragedies.

The causes lay not in the differences but the similarities of the two systems. Both systems were able to produce huge concentrations of power without accountability. If then concentration of power and ownership is the problem and not ownership itself, how can the structure of ownership of the means of production be transformed so that it is subject to broad based public participation and control?

The main challenge for the socialist agenda is how can the market be made accountable in terms of the collective good, how could it be made to operate in ways that there is equitable distribution in the satisfaction of people's wants and society moves increasingly in direction of equality among human beings?

Today, we seem to have reached a broad national consensus on the market economy and democracy. The elections of 2004 and the entry of the JVP into the government have confirmed this consensus around the essential principles. One negative outcome is the deep erosion of the socialist agenda.

This is partly due to the fact that the theoretical foundations on which both the traditional Left and the JVP are participating in this process have not yet become clear.

The moral and theoretical foundations of their strategies have to be defined with greater and more unequivocal clarity. The familiar evasion of saying their present positions are only phases in the transition to the authentic socialist state, no longer suffices; they are no longer credible in terms of the historical reality.

They have at the same time to demonstrate how they can protect the socialist agenda within the national consensus round democracy and a market economy. For this purpose ad hoc responses on specific issues, such as privatization are not enough. The responses have to be part of a policy framework in which the roles of the State and the market form part of an internally consistent whole. To do this successfully, the parties need to envision the future society more fully and communicate it to the people.

At this point I would like to bring together some of the main conclusions which I have drawn and highlight what I might call the fundamentals of the socialist agenda. These fundamentals can be grouped under three broad heads. The first is envisioning the future as clearly as possible and enabling the people to move towards it.

This requires a methodology of socialist planning adapted to a democratic market economy. the second fundamental is deepening the process of democracy. The third and perhaps the most important is anchoring the socialist agenda on the foundation of human rights.

For the first socialist fundamental - the task of envisioning the good society of the future to which the human energies of Sri Lanka could be mobilized, the socialist parties would need to spearhead and give the impetus to a task which the UNP almost contemptuously pushed aside - the task of national planning adapted to the new social order and the market economy.

Given a macro-economic policy framework aimed at reasonably high growth, the socialist dimension of the planning process must cover the following essential tasks:

* Mapping out the complementary roles of the market and the State in the economy

* Designing and promoting structures of ownership of the means of production and distribution that are broad based enabling wide participation of the public and including cooperative, corporate and non-profit forms of enterprise.

* Defining a set of targets to be achieved within a given time span for the states of well-being that have high value in terms of the socialist value system. These would cover equity, income distribution, socio-economic security and growth. The plan should use the wide range of human development indictors that have been developed in the UN system.

* Examining, evaluating and redesigning existing policies, programmes and structures to achieve the desired outcomes in equity, income distribution and socio-economic security.

The second fundamental is the deepening and strengthening of democracy. Here I can point to four cardinal principles. First, in order to reach the good society, the market and the State must be fully accountable to the people. This means a new design for the devolution of power.

The structures of governance have to be built on the principle of subsidiarity where the disposition of power and authority begins from below, closest to the people who are affected by the decisions that are taken.

Second the democratic constituency of socialism has to be larger than that of a single class. The socialist agenda can and must have the coverage of an ethical value system of a social philosophy and a practical way of life; its capacity to motivate and mobilize people should derive from these. Therefore there has to be a thorough rethinking of the class-based political culture of the Marxist parties if for no better reason than the changing character of classes and multiple stratification that emerges with development.

There has to be an attempt to create a more inclusive democratic culture for the socialist agenda.

Next the socialist agenda has to give a vital role to civil society. If democracy is to put in place the necessary structures of accountability it has to promote and strengthen an active, informed and vigilant civil society that can organise itself on non-partisan lines without formal affiliation to political parties,a civil society that is capable of advocacy and action on public issues and can undertake a regular monitoring and evaluation of both the State and market.

Democracy the world over has recognized the limits of representation and the critical importance of a process where civil society can be continuously active between elections and find means of exercising people's rights and giving expression to their expectations and demands. Civil society therefore becomes the organ of a living democracy. Partnership with it has to be one element of the socialist agenda. This process also means the re-visioning of the State.

Next, the success of the socialist agenda depends on the moral quality of a society. In a society where the capitalist culture has elevated self-interest, greed and the acquisitive nature of human beings as attributes that have high value for economic success and well-being, the socialist agenda needs to promote the socialist culture and value system which relies on human solidarity, cooperation and altruism. It has to draw on the universal socialist core of the religious traditions.

The third fundamental of the socialist agenda is the need to anchor the agenda firmly on human rights. Those who have worked in the field of human rights would recall that the first efforts to adopt an international treaty on human rights focused on civil and political rights.

The move to include social and economic rights was spearheaded by the socialist countries and did not find ready acceptance by the Western countries. Finally, the international community agreed on a compromise which provided for two separate covenants; one on civil and political rights and the other on social and economic rights.

This global effort to provide a normative framework for governance and development, to define a set of human values by which countries will be governed has had a far-reaching impact on the political and economic philosophy that was current.

Today, the human rights agenda is a formidable global counter-tradition to the liberal capitalist paradigm. The positivistic economics of the World Bank and the IMF have had to come to terms with it.

In their effort to accommodate the philosophy of human rights these institutions have made new adjustments and advocated strategies of poverty reduction and given a central place to accountability and good governance. I would argue that the human rights agenda is linked intrinsically to the value system and the goals of the socialist agenda.

In the first and second socialist fundamentals I outlined, I said that the socialist constituency is today a democratic constituency that encompasses a larger human constituency that extends beyond the boundaries of any particular segment of society. It is the rights agenda that can give it that inclusiveness.

An entire plan of action on human rights can unfold before the socialist parties. They can engage in the task of making the Directive Principles operational working in partnership with civil society; they can campaign for the enactment of the Fundamental Rights Chapter and the Directive Principles of the draft constitution of 2000 which includes social and economic rights and make them justiciable.

They can give leadership to the implementation of the SAARC Social Charter and guide the formulation and implementation of the plan of action. These give unprecedented opportunities for the broad based socialist education of the people and their mobilization behind the socialist agenda.

To my mind the three socialist fundamentals I have outlined provide a beginning for an agenda for realizing the vision of a just and equitable society; a construct which is in the nature of a democratic market socialist society, a society which can provide an economic, political and social framework that is an internally consistent and a coherent whole. They give opportunities for the genuine empowerment of the people, for creating the necessary structures of accountability for both market and State and for defining the rights and responsibilities in all parts of society.

Let me end with an excerpt from Eintsein's powerful and well known declaration of his faith in socialism:

"First, nowhere have we really overcome what Thorstein Veblen called "the predatory phase" of human development. The observable economic facts belong to that phase and even such laws as we can derive from them are not applicable to other phases.

Since the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development, economic science in its present state can throw little light on the socialist society of the future.

"Second socialism is directed toward a social-ethical end. Science, however, cannot create ends and, even less, instill them in human beings; science, at most, can supply the means by which to attain certain ends. But the ends themselves are conceived by personalities with lofty ethical ideals and - if these ends are not stillborn, but vital and vigorous - are adopted and carried forward by those many human beings who, half-unconsciously, determine the slow evolution of society."

(Concluded)