21 August, 2018

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Taking Democracy From The Political To The Economy & Society: That Is Social Democracy

By Laksiri Fernando

Dr. Laksiri Fernando

Democracy’s foundations remain weak and unstable as long as status inequalities contradict formal political equality.”     Thomas Meyer (The Theory of Social Democracy)

The urgent need in Sri Lanka, given the present circumstances, is to move firmly and committedly towards social democracy. Simply said, social democracy is about extending democracy from the political to the economy and society. Do we have democracy? Formally speaking, we do have democracy in the political sphere since 1931 when the universal franchise and a legislative council were introduced to this country, yet deformed with imperfections and wilful assaults.

Extending Political Democracy

There is no question that political democracy should be extended and the infirmities should be addressed to call Sri Lanka a reliable liberal democratic system. The necessity for a New Constitution primarily emerges from this requirement, nevertheless overlapping with the need to extend democracy from the political to the economy and society. 

As far as democracy is not extended to the economy and society, the infirmities in the political sphere would remain, whether at the national, the provincial or the local level. These are the three tiers of our political superstructure.

Although no one has paid much attention, the failure to resolve the ethnic question even after the 13th Amendment was largely due to this fact. This would remain primarily the same even if a new constitution is adopted and democracy is further extended to the provinces, without extending to the economic/social sphere. The present rift between the TNA and the EPRLF is probably symptomatic of this predicament. This does not mean that a new constitution is premature, but the country and even the new constitution should go beyond the political sphere to address democracy at the economic/social level. 

It is a wrong notion to say that deepening democracy at the political level should be completed before extending democracy to the economic/social sphere. It has to be started here and now. Otherwise, under the given circumstances, what have been initiated since January 2015 would be in utter jeopardy.   

Historical Paradox 

It is true that when you look at the history of democratic evolution, it started in the political sphere first and then only it became partially extended to the social sphere. This is the history of Western social democracy. The first wave was liberal democracy and the second one social democracy. However, the social democratic venture has encountered so many setbacks and difficulties in the period beginning neoliberalism. It is almost reversed in some countries. Only recently that there are new signs of its re-emergence. Jeremy Corbyn (Britain), Martin Schulz (Germany), Bill Shorten (Australia), Jacinda Arden (New Zealand) and  Bernie Sanders (US) are much hope. 

One may argue that countries like Russia or China had started the process in the reverse order, due to socialist revolutions. Russia in its efforts to venture into liberal democracy in recent decades, has jeopardised the social or socialist achievements. That is their present predicament. Even the liberal democracy installed is also not working properly. This highlights the difficult question of ‘balancing between the two.’

No country has so far found what could be the correct balance between political democracy and social democracy. Not even the Scandinavian countries. This can be one reason why China is venturing in rather a slow manner in the political direction. There are of course other factors involved, and ‘economic opening up’ has also damaged some of the social gains.

This is the main reason why any country, let alone Sri Lanka, should venture in this ‘combined or dual task’ in a paced manner. For example, if a party like the JVP manages to achieve a political revolution in the country, what would happen to political democracy? Whatever their good intensions, the result would be the curtailment of political democracy, if not a total disaster.

Therefore it is not through ‘revolution’ that social democracy or socialism should be achieved, but through democratic means and channels. Would this mean a postponement of the task or delaying tactics? It should not be the case. If the political leaders, the political parties and the people at large have a good grasp of the situation, the combined task cannot be a difficult venture.

Our Circumstances

Sri Lanka is in a best position to achieve social democracy without abandoning the liberal democratic gains. It is on the basis of the achievements in liberal democracy in 1930s (universal franchise, legislative council and political parties) that the country could move towards some social welfare measure in 1940s, free education being the cornerstone.

This was the same after independence, although the erosion or lack of ‘liberal values’ in the cultural/ethnic sphere resulted in major disasters. Given the colonial influence in the country, nationalism is a natural outcome. Even otherwise, some patriotism is necessary in any country. However, there was/is no need for ethno-nationalism, if the country was/is firmly grounded on a social democratic or liberal ideology. This is an area where the combination is necessary. This is a task for enlightened political parties. We should not unnecessarily be limited to the ‘Left’ parties, which have unfortunately become small groups.

Moving towards social democracy is largely an economic matter. Do we have such conditions? International experiences have shown that ‘free market’ or ‘free trade’ is not necessarily an impediment in building social democracy. What is detrimental is its extreme form or ‘neo-liberalism’ which opposes or neglects the role of the state. Particularly in a developing country, there are vast areas that cannot be covered by the private sector or the market.

Even otherwise, there are areas which should best be managed not by ‘profits’ but by values. Health and education are two such areas. Social security is obviously another. There are other areas where the state intervention or welfare is necessary for social justice. These are some basic premises of social democracy. Even for economic growth, ‘Two Engines’ of the public-private partnership might be the best. This partnership (PPP) however should not mean that the state assisting some business ventures as mostly happening today in Sri Lanka through political connections.

There is no economic rule that makes state enterprises necessarily unproductive. That depends on the management model that they employ and mostly it is a result of political influence and interference. The role of the state is important in building social democracy. However, it should be a more enlightened, corruption-free and politically and ethnically impartial state.

There can be an argument that social democracy cannot properly be built in a poor country. There can be some truth in it. However, Sri Lanka is not such a poor country. It has come to the lower middle income level today.    

Development Prospects 

There are prospects of further economic development in Sri Lanka. It is already a $ 85 billion economy. Given the size of the country, its location, population and educational standards, there cannot be much difficulty in developing it properly, if a ‘Two-Engine Growth’ model is adopted and proper national planning is ensured. There is enough room for both the private sector and the state sector. What should be avoided is unnecessary competition and overlap,  except in the case of agreed public-private-partnership (PPP).

For example, Dr Neville Fernando should not have been allowed or encouraged to start a medical college. University education should be in the public sector. It is understandable that his love and expertise is in the field of medical science. It was not his mistake. He should have been promoted to invest in producing medical equipment or medicines, or invest completely in a different field. What might be necessary is rationally demarcated areas for the private and the public sector.

Sri Lanka requires a well-planned economic development and not ad hoc decisions. For example, instead of a Megapolis in the Western Province, the country needs Smart Cities, surrounded by Happy Villages in all provinces. The disparities between provinces have enlarged because of ad hoc and arbitrary decisions. While the free market is allowed and encouraged, the infrastructure planning should be by the state.

Sri Lanka requires her own ‘Belt and Road’ initiative mainly inside the country in a planned manner. Chinese assistance or input might be useful in this respect even to extend that into ‘Air.’ It is not possible to anticipate a major export growth without developing the country’s infrastructure. Both should go hand in hand like in China. The past infrastructure and other developments have been confined to the Western and the Southern province for political reasons. It is this ‘Western’ development that has created immense disparities in the country which urgently requires a new policy orientation towards social democracy.

Urgent Need 

Gini Coefficient (GC) is the reliable method of gauging a country’s income and economic disparities. It is calculated between 0 and 1 or 1 and 100. It is always better to use the latter (percentages) as it is easy for the public to comprehend. In such an index, 1 percent is perfect equality and 100 percent is complete inequality. Our authorities also should use this calculation or convert the present decimal data in that way for the public to understand.   

It is practically impossible or quite ‘utopian’ to have perfect equality. It is also not necessary. However, through moderate social democratic polices there were countries who even achieved the GC below 20 percent in the past. This is not the case at present given the pressures of ‘neoliberalism.’ However, still some countries (Finland, Iceland, Sweden, Denmark) maintain a percentage below 30, along with some former Eastern European socialist countries. In the case of Australia, the present GC is around 32.30 percent.   

It is quite disturbing to note that social inequalities have widened in Sri Lanka during the last three decades. The following are the available overall GC figures for Sri Lanka: 1985 – 32.50; 1990 – 32,50; 1995 – 35.40; 2002 – 41.00; 2005 – 40.30; 2010 – 36.40; 2015 – 39.20. There are all indications that the index is above 40 percent today. This was the case even before, when it was calculated for the monthly expenditure of households. The GC is highest in the urban sector, compared to the rural and the estate sector.

It is true that when a country attempts to develop its economy rapidly, under present circumstances, the inequalities would widen or the GC would go up. This happened even in the case of China. However, during the last decade, it has been brought down from 50 percent to 45 percent. There is more to be done in China in this respect.

The latest household statistics reveal that the income gaps in the country have widened. The bottom 20 percent is left with only 4.8 percent of the national income while the top 20 percent entertaining 50.8 percent of the whole. This also means that 80 percent of the population shares only 48.2 percent of the total income.

Essential Features

Bringing down social inequalities or GC is only one aspect of social democracy. Major reasons for the existing social inequalities are the illicit economy, illegitimate money making, tax evasion, and deficiencies in tax policies favouring the superrich. Others are (1) the underdevelopment in agriculture and the rural sector in general (2) pervasive underemployment in marginal sectors and in the government services and (3) the underutilization of labour/entrepreneurship of youth and women.

This means while the rich are given a free hand in profit and money making, the poor are underutilized in gainful employment/enterprises through neglect.

The objective of social democracy is to construct reasonably a prosperous economy and a society with social justice and human rights in all spheres of economic, social, political, cultural and civil rights. There is an urgent need to develop policy guidelines in all these areas giving priority to public education, public health, social security (unemployment, age, disability), women and child welfare and many others.

While social security in certain areas (i.e. unemployment) might be considered a ‘makeshift’ arrangement, the primary effort should be to engage all able citizens in productive employment and enterprises. Social democracy is not mere ‘welfare state’ to mean welfare dependency or handouts. While there are rights, there are duties and responsibilities. Social democracy is a social movement to voluntarily mobilize human efforts in building a socialist society. Such a movement or policies could only be built through a committed leadership, a party/parties, elected representatives, intellectual involvement and popular participation.

Social democracy is also about taking democracy into the micro level of the individual, family, neighbourhood, school, factory/office, political party and into the political culture and the social value system. Most important might be at this juncture is initiating a broad discussion in developing such an ideology or perspectives in taking forward the existing understanding of social democracy.      

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Latest comments

  • 3
    0

    Good points. After 3 years in power, we can see that our president is still working, talking, joking, struggling all about how messy his administration is, how unfit those under him and how incapable his cabinet is, and pointing fingers at his PM and others. And then other pointing back at him and the drama goes like that – But it says we have not yet set up the right base from where they can serve democracy and basic promises. It might take many more years for them to talk about other developments

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  • 1
    3

    Brilliant and thanks Prof. Laksiri. You are spot on. The Ethnic, religious and racial conflicts are promoted in order to Distract people from the real problem which is Economic Inequality and the corrupt global economic system where the 1 percent owns over half of all wealth in the world as revealed at Davos,. This corrupt global financial governance system which is owned and operated by IMF and various accounting companies like KPMG, Deliot, Arthur Anderson etc which are in the “Bail Out Business” has been instituted in all countries to loot the people . Trickle up or sucking up wealth as Mohamad Yunus called it is the name of the game – NOT trickle down which is a myth.
    The Moda masses in Sri Lanka have been deluded by their corrupt leaders who used hate Speach against other communities to DIVIDE, DISTRACT and RULE and LOOT the people with help and Fake advise of Fake international experts of Economic development at IMF and WB and UN and the various so-called :”donoers”

  • 2
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    True, Dr, L Sri Lanka needs to identify high value non-environmentally destructive industries and develop the relevant sectors systematically.with investment in research and development.

    1.Fisheries and marine resouces and Marine Security service given the island’s strategic location are sectors that should be developed. US Citizen Gotabaya Rajapaksa’s Avant Guard scam set back marine services development to benefit the county and its economy as the most lucrative operation of the Lankan navy was privatized. Avant Guard is the name of a Global Surveillance company.
    2. LNG Energy sector to become an exporter of energy
    2. Given an aging population and potential for Health Tourismd investment in health sector and Pharmaceutical manufacturing ..

  • 0
    2

    The great majority of the inhabitant population who are the poor rural Sinhala people are naive when it comes to Politics.
    Their Politicians thrive on that and want the the majority to stay that way.
    UNP. TNA, LTTE Diaspora , NGOs and the West brought them Yahapalanaya not to give them, Social Democracy.
    It was aimed primarily to give the TNA what the LTTE couldn’t get.
    And the UNP had a different agenda, as well , which is to make the Money which they couldn’t access for two decades.
    All of a sudden Dr Ranil’s close mates thought they are the Kids in a Toy shop which is owned and run by the UNP.
    Helping themselves and their mates to what ever they could grab.
    While they were collecting their Toys, Dr Ranil set out to implement his other items in the agenda, the Homeland for TNA .
    And permanent Privatisation of all Government Assets and Services, which will ensure the Rich get richer and the Poor stay poor.
    And change the Education in favour of the kids whose parents have the money to buy them Degrees.
    Their Hired Gun. President Sirisena in the meantime was trying hard to split the SLFP and convert the Sinhala Majority to follow Dr Ranil.
    The result of these activities are now playing havoc in the Country.
    No development, No F Investments High Cost of Living, Increased Borrowings at higher Interests Rates , and unprecedented Foriegn Debt are plaguing the nation.
    And the BS they dish out now to fool the majority again , are unbelievable and disgusting.
    Do you Expect this Mob to give us Social Democracy…

  • 0
    2

    Learned Professor, time to time, invent ideas how to confer PhD in War Crime and Colonize the North-East with Sinhala Buddhist. So now he wants the government to take over North East’s Economy and deployed more Rapist Army in the name of development. Guys you may remember, in the place where the National Anthem could not be sung in Tamil, but Reginald sang “Brindavanamum” with a double meaning? https://www.colombotelegraph.com/index.php/austin-reveals-secret-of-missing-pages-in-bond-report/comment-page-1/#comment-2155903. It is on the same wavelength of Reginald Corey, our learned Professor also sings his Brindavanamum. This time his topic is Social democracy. His did his best to destroy the Yahapalanaya’s (if there was anything true in that gimmick) Secret Solution

    We cannot cover all the flaws in the learned theory. We just want to point a simple one. The Learned professor, with help of ultimately corrupted CB numbers, substantiates his arguments. Very first thing is any number coming from the CB describing as Lankawe is “Best in the South Asia” is not true at all. Anybody like us who ended looking at the rupee value from about 40 years ago at less than Rs 8 to now about Rs 155 for one dollar, will never in his/life will ever believe any statistics come out of CB. After all that, the idiots shameless write to undermine American economic policies, brag about their rotten Cuban, Venezuela Communism (even that is not theirs- Their own is only Sirimavo education policy, i.e standardization and economic policy, i.e Nationalizing British Tea companies and now exporting tea to Russia with bugs). If any Modaya sincerely see what has happened to the Rupee value just with in the last 40 years against the American Dollar, they have to hire Mervyn to tie all the politicians to trees and hire New King to beat them with his Thirukkai Vaal.

  • 0
    2

    Let’s come to our single one point. In all developed democracies Education, Health and Social Security is looked at in two levels. It is arbitrary differentiation and of cause, and varies country to country, but a smart management technique, instead of muddling like Communist Lankawe. The states are responsible for the Basic education, Basic Health Care and the Basic Social Security. There is no requirement for a man/woman that he has to invest his/her high incomes through the government. But all must pay for the basic social security. Health is more complex to tell something like that. But the states try to provide a basic health care. Anybody who needed better one can go with their own ways. Education is pretty neat and highly structured in all those countries. The basic education, unlike in Communist Lankawe, is a must for every child. Children go through the state systems, though permission granted to the proven outside systems too. Higher education is mainly managed by competition as per the need of the country’s activity level. Most demanded and highly subscribed is Engineering. In many countries Medicine is highly paid in both cost and revenue. The counties’ need and the time and money a student prepared to spend on his future decides what higher education that student will seek. The learned professor cannot understand the two levels exists in education, health and social security in the developed countries and it is more intelligently managed there than in Communist Lankawe. That is why he is saying the SAITM never should have been allowed in Lankawe. Shamefully it was opened by Old Royals while the learned Professor was preaching to the Old Royal the communism. These hypocrite Sinhala Intellectual are one brought down the Rs from 8 to 155 for a dollar, and still preaching the communism to Lankawe’s 8th grade Modaya politicians. Give us a break please!

  • 0
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    I read the definition of Democracy. One description is that people do not have to worship some privileged class. but, in Sri lanka, see PM is a Well known Crook. He is was involved in the biggest financial scandle in the history and because of that Economy of the country is limping. Yet, the PM is moving like one in those ancient FEUDAL societies. what is the democracy there. They lie to the voters. How do you say democratic govt when they are corrupt from the beginning. How do you say we have free franchise when most of the NATIONAL LIST MPS were those rejected by the voters. I heard, PEtroluem corporation is to be leased to India after the election. whose money goes to fill the tanks of Politicians the govt should be by the people for people. but, the truth is govt is some families and their henchmen for the people. that never changes. Just take a survey and see how many politicians have their families working at top levels in the govt and own many families – wife/husband, father/son, brother/brother are in the parliament. We have a crooked Democracy. Do you say that is democracy. It i the FEUDAL system we have. You political scientists identify as democracy with defects. Just compare whether it is the same system that USA has.

  • 0
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    The crux of matter is that Theory of Development in Sri lankn political system which that path and model still that dilemma in that mindset of class of elites .
    They are confuses by themselves since 1977 UNP-JRJ governances being to power has an open Neo-liberal economy by nexus to neo-colonialism by last 40 odd years.
    We were in that vicious cycle of Neo-colonial of Depend capitalism currently advocated UNP leadership of MS ,Ranil Wick and CBK of Tamil federalist of range of political -economic policies innovated by “Rainbow revolution” 2015 January 8th.
    While by an applying whole set of policies by UNP Ranil Wick has which taken power of executive of the State into handful of UNP are currently dismantle an economic sovereignty Island last 36 months.
    Ours economy tiny one that come to US$ 85 billion that compared with its come to Singapore GDP of US $ 320 is nothing. Our is four time smaller than Singapore ‘s GDP!

    After 70 years of an Independences since 1948 that we did delivered only low output of GDP was that national economy by leadership of UNP’s that Neo-Liberal policies . What else of that we remain as the an initial stage of that by simple commodity productions of capitalism at early part of development.
    We are an economically back ward , weak and unstable by misruling and mismanagement all political parties, its classes and their leadership of governances did not do enough rebuilding nation after 425 years in colonial occupations by three western power?

    In fact 70 years of modern post-colonial era, we are at by neo-colonialism order of which remain in key factor dominated national economy by UNP leadership?
    Undoubtedly the key factor of 40 year of Economy and Political order was dominated by USA led Neo -Liberalism that nexus to Neo-colonialism

  • 1
    0

    D.Nimal

    What is an open Neo-liberal economy by nexus to neo-colonialism?

    “We were in that vicious cycle of Neo-colonial of Depend capitalism currently advocated UNP leadership of MS ,Ranil Wick and CBK of Tamil federalist of range of political -economic policies innovated by “Rainbow revolution” 2015 January 8th.”

    What is the alternative?
    Do you recommend self sufficiency, import substitution, scarcity, rationing, black market, stagflation, shrinking economy, unemployment, youth revolt, ………………human rights violation, war crimes, ………….. backwardness in knowledge, technology, …….. skills, …

    “We are an economically back ward “

    How about intellectually/mentally/scientifically/politically/ ………………….. ?

  • 0
    0

    Ranil pretended that he is with West and took all the American help to climb to the power that he could not do for the previous 20 years. He simply fooled the previous American State Secretary Kerry to achieve this. When Kerry could not get Ranil to do anything in line with America, he said it was some SLFP members holding hostage the Yahapalanaya. He simply meant Old Royals on that. But Sharia-Yahapalanaya government always had 2/3 in Parliament, beyond the Joint Comedy Club, to do all it wanted. Unlike Secretary John Kerry, when JR played same game in 1980s, American Administration of that time was not easily bought by that so JR was on the mercy of Rajiv. Secretary John Kerry was inactive while Ranil was having cozy relationship with China and selling assets to it, but declared on his own that Myanmar and Lankawe has been brought back to democracy. He never did know unlike Myanmar which is still under Army, Lankawe never slipped from its dictatorial Democracy, where it is always well and safe. India is still filled with lot of Shiv Shankar Menon class Malayalee consultants and waking up out of that is not easy, though PM Modi sees he cannot sell the Economic package, ETCA to Lankawe. But to pull wool on the eyes of West and Inia, Lankawe signed a Free Trade deal with Singapore. This is only to show that it is not with China only. The game here is to import some high market elites’ products for politicians and Businessman with concession prices from Singapore. There is no synergy between world’s most productive labor of Singapore and most corrupted, lethargic Lankawe labor. It is not surprising that any of the Lankawe Communists are protesting against Ranil importing elite products from Singapore as Free Trade.

  • 0
    0

    The truth is, time and again all European Colonists imported, for centuries at stretch, labor from India for their projects. It was only “Ceylon Tamils” migrated to Singapore and Malaysia seeking jobs those days. That is how Ranil dodged ETCA, borrowing from China to Mega polis and staring to Import expensive elites’ products from Singapore under the name of free Trade.
    Currently the Rapist Army Economic Model is only imposed in North-East. Army forcefully occupies Tamils land, do agriculture, develop its own tourism Industry, illegal sand and building material excavation, employing school children on drug smuggling.…. Then Sharia – Yahapalanaya tell everybody that Army occupying the North East economy is good for them. We show what the Kanangra education Model did to North-East Schools. Even the Tamil Philanthropist put up Building are gone now. We show what the Standardization did to Tamils’ university Entrance. So now we need not to wait until the “Rapist Army Economic Model” benefits are reaped.
    The major worry for Sharia-Yahapalanaya government is, if it starts a real free trade with any nation, it has to open up North-East. Especially on a trading with India like on pact of ETCA and excluding North-East and keeping its economy managed by Rapist Army is not possible. What Lankawe would prefer is it would like to show the war torn part, the North-East, (the beggar wound) and milk from donating countries, Asian Development Bank, IMF, World Bank… but will not allow any one of them to do any useful economic development projects in North-East

  • 0
    0

    Even the EU, without getting any assurances, gave back the GSP+, only to see Lankawe has cheated it even on last remaining promise, the MMDA, too. This type of games worked very well with West and India and they all always succumbed to these games. But last night President Trump speech suggests that Lankawe may not easily fool America for long on its GSP+. Trump has asked Congress to channel its help only to friendly nation of America. When American Ambassador approached Ranil to discuss about the Jerusalem Embassy, Ranil sternly replied and sent him back. Then Ranil had voted against American Interest in UN. I do not think the past Old Chandrika-Kathirgamar games which fooled Condoleezza rice will go ahead anymore unless Ranil become a real market economist and align the politics and Economy of Lankawe with West, instead of playing for Chinese commission and borrowing from it. President Trump last night clearly indicated that the future American trading policies with countries will be based on mutual benefits, not like in the past that its enemies nibbling it through development programs and then work against America. Let’s wait and see if the change in the American policy can bring some Industries to North-East too. Let’s wait and see if Communist Lankawe going to get commission and borrow from China or open up its market, including North-East where now only Rapist Army farming and Rapist Army Truism is allowed, for private investments.

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