The Council for Social Democrats (CSD) describes itself as “a network of individuals and organisations who are striving to develop an alternative socio-economic model in lieu of the existing socio-economic model created by the new world order and the neo-liberal economic policies". In Sri Lanka, where the working class and socialist movement has not yet fully recovered from the defeat of the 1980 general strike, let alone the devastation of the Civil War, any such initiative is to be welcomed. The Council has presented its political rationale in “An Accesses to start a Social Democratic Movement” in order to create, “a process for political dialogue" and it is in the same spirit that we present this reply.
From the start, we must make it clear that we do not share the Council's approach to politics. Nonetheless, we hope that the authors of the platform will agree that there is nothing to be gained from any false diplomacy or from denying genuinely held differences. Our disagreements are not limited to particular formulations or arguments but extend to the fundamental methodology that underpins the platform. In fact, this difference of approach is accurately expressed in the very name given to this new initiative, “Social Democracy". Quite apart from the fact that, in its European homeland, Social Democracy has been responsible in recent years for the implementation of precisely the neo-liberal policies that our authors oppose, the name itself expresses the confusion that we believe characterises the whole platform.
“Social Democracy" has its origins in mid-19th century Germany, where it was used to describe a political programme that sought to achieve democratisation not only of political institutions but of all social institutions. Karl Marx himself described it as “a pig of a name" because it conveniently ignored the actually existing realities within society, above all, the private ownership of the economy and the existence of a state machine committed to the defence of that private property. Any political programme that seeks to change the distribution of wealth and political power within society but ignores these two principal characteristics of capitalist society, is utopian. Any party based upon such a programme is doomed to impotence.
The truth of this, admittedly harsh, assessment can be demonstrated by considering just some of the platform's proposals or, to be more accurate, aspirations. True to the Social Democratic tradition, the platform calls for democratisation of no less than 12 “areas" that include the “political system", “civil society", the “educational system" and “economic regulation". Let us consider what is proposed for each of these areas in the platform.
With regard to the “political system" the platform insists that the “fundamental norm" which should govern it is the assumption that the human being is a collective social being and thus political systems should “always consider satisfying the social and developmental needs of a human being". What exactly are we to make of this? Undoubtedly human beings, are social beings, even collective social beings, but how are we to ensure that a political system recognises this? Indeed, what does “recognising” actually mean? If the Sri Lankan political system does not recognise this today, and we must assume the author believes this to be the case, what changes are required to bring it about? Today, Sri Lanka is "formally" a democratic state, indeed, a democratic socialist state. What has to change? Who is to do the changing? How, exactly, is the rule of just one family to be overcome?
With regard to civil society, the platform explains that this is “the space between the family and the state" and it rightly observes that there is a danger that an emphasis on individual rights can lead to the domination within society of men, members of the majority community or “those who possess wealth or wield power". Equally rightly it recognises that this excludes women, individuals of minority communities and underprivileged people. What is the solution to this undoubted problem? According to the platform it is to ensure “the provision of civil and political rights to the people who are marginalised in this manner". This argument appears to contradict itself; civil and political rights are precisely individual rights and, according to the platform itself, an emphasis on individual rights is what leads to the exclusion of women, minority communities and underprivileged people.
Here again we see the failure to recognise reality or, indeed, to call things by their proper names. Let us be more concrete; in a capitalist democracy, even if everybody has the same right to vote this will never outweigh the advantages of those who not only have the right to vote but are also wealthy. With regard to the social inequality suffered by women, our authors' lack of insight and real commitment to social change is reflected by their concentration on “the space between the family and the state". In other words, they accept that equal rights do not apply within the family itself, yet this is exactly where the inequality of women is rooted.
When it comes to “minority communities", the Social Democrats' failure to grapple with the reality of Sri Lankan society is truly glaring. The simple truth is that the Tamil community in Sri Lanka is systematically oppressed, within that community many, particularly women in the plantations, are even denied citizenship. For the Social Democrats to retreat into the vague language of “minority communities" on this issue is a disgrace. Having said that an emphasis on individual rights is inadequate, they should have the courage of their convictions and openly say that the Tamil people have rights as a community and that those rights are currently denied to them.
Turning to the education system, the platform proclaims that its first objective should be to “build knowledge, capacities and attitudes that consider the democratic needs of the individual" and that, secondly, it must “provide education to fulfil the developmental needs of society". We can probably assume that the authors mean that the education system should ensure the full development of the individual as a first priority. Once again, what is left out of account in this utopian dream is day-to-day reality, above all, private property. How is an impoverished child to have the same chance of educational development as the child of a wealthy family? To put it more concretely, from where will the money come? The second objective, fulfilling the “developmental needs of society" is also far from straightforward. Who decides what are the developmental needs of society? If it is the present government, the outcome would be predictable. If it is not th present government, how will this change come about?
The root of all this confusion in specific policy areas is to be found in the Social Democrats' view of economics. This is hardly surprising, as Lenin put it, “politics is concentrated economics" and any lack of clarity here is guaranteed to find its way into all other policy areas. On the one hand, the platform “emphasises the need for the existence of entrepreneurship against the state-focused capitalism", it goes on to acknowledge that “private enterprises are an essential factor of the country". However, it is also resolutely in favour of “state intervention in long-term investment" and the “coordination of economic relations through non-market organisational structures". So which is it to be? Support for the entrepreneurs against the state, or state intervention in the interests of long-term investment?
This contradiction in policy flows from an underlying contradiction in theory. This is immediately apparent in the platform's summary of “the path we have chosen". Here we read, “CSD believes that although the market is potentially the most efficient allocation mechanism, it does require regulation since it is incapable of regulating itself". This one sentence sums up the contradiction within the Social Democrats' politics, indeed, a contradiction at the heart of all reformism.
What does it mean to be “potentially the most efficient allocation mechanism"? In market theory, allocation of resources between different economic sectors is achieved through the spontaneous operation of the pricing mechanism. If one sector is producing too much, then the prices for its goods will fall, entrepreneurs in that sector will lose income and, therefore, reduce investment and production until the point where what is produced exactly balances demand. Similarly, if too little is produced in one sector, prices for its goods will rise, encouraging more investment and, therefore, more output, again until demand is satisfied. This, then, is the potential for the market to be the most efficient allocation mechanism. Its supposed efficiency as compared to any other economic system is held to be its self-regulating nature. Providing there is no interference with the pricing mechanism, the market operates spontaneously with millions upon millions of transactions reflecting the ebb and flow of supply and demand.
Despite their professed recognition of this “potential" for the market to be the most efficient allocation mechanism, our Social Democrats immediately contradict the theory by insisting that it also requires regulation, “since it is incapable of regulating itself". Now, regulation requires a regulator and the CSD believes that the regulator's task includes “ensuring competitive conditions for private sector companies", pointing out that this must include public investment in infrastructure, but that the regulator itself “should strive to be an active player in the economy". And what is to be this regulator that will supervise the market while ensuring competitive conditions and being an active player itself? It is the state or, as the platform prefers it, “the active state".
Among the tasks for this active state are: regulation of the financial markets, money supply, highly speculative financial instruments, the excessive pursuit of returns and the formation of elusive economic bubbles. Leaving aside, for the moment, the all-important question who controls the state, what is left of the market economy and how is entrepreneurship protected against State-focused capitalism in this vision of the future?
Market forces themselves guarantee that the state can always borrow money for investment more cheaply than any entrepreneur so, if the state is active within the economy, how are private entrepreneurs supposed to compete against it? For the market to play its role as an allocator of resources, much bigger profits must be available in shortage sectors in order to attract investment to increase production. Where is the line between “bigger profits" and “excessive profits"? The logic of the Social Democrats' approach seems to be that, in the last analysis, the “active state" has the ability to make such difficult decisions. But, if that is the case, what is the point of the market? If the state is so good at economic regulation, why not a fully state regulated or co-ordinated economy?
It would strain the reader's patience to continue listing the details of confusion and contradiction within the Social Democrat platform, enough has been said we think to make clear that no political party capable of transforming Sri Lankan society could possibly be based upon such weak foundations. This is not to suggest that the authors of the platform do not genuinely want to see such a transformation. On the contrary, it is the combination of good intention with the recognition that in some way social control of the economy is the way forward, that prompts us to contribute this reply to their platform. The fundamental weakness of the platform is the unspoken assumption that the existing state could ever be a guarantor of the interests of society as a whole. True social control of the economy will require the overthrow of the existing state and its replacement by a state based on the direct democracy of the actual producers of economic wealth, the working class and farmers.
Behalf of SPSL