Contributed by Joe Montero

The first article of this series explained that the emerging economic crisis has bee ncaused by a combinaition of both structural problems within the economy and the coronavirus pandemic. The second noted that it is not enough for the government to just spend its way to turn the economy around. Minimal government intervention is its motto.

This time, the focus is on the alternative of building a social economy. It is the antithesis of what has become known as neoliberalism. Neoliberalism amounts to almost total reliance on an unrestricted market to create a balanced and successful economy. It champions personal ambition, and as Ronald Reagan insisted, greed is held to be good.

A social economy relies on members of communities coming together, deciding how to join their efforts, to provide for identified needs. Everyone is expected to contribute, and everyone has a right to share in the benefits.

It is clear that neoliberalism has been a failure, even in terms of maintaining the status quo in healthy shape. It cannot overcome a crisis emerging from the structure and social relationships of capitalist production and its repercussions through society. And as explained in the previous article, Keynesian demand management through government spending alone, cannot save the day either.

Unless Australia comes up with an alternative, the slide into a severe depression may very well become unavoidable. Turning toward a social economy can provide the solution. It should be taken seriously as a guide to practical action, rather than being consigned to the pages of academic debate.

A social economy means a democratic economy, where all participants have a voice and collective decision making takes place. A social economy also tends to be local in character, aiming to use available resources in the best possible way. It operates mainly to service its community and contributes the surplus to society.

Community assemblies can meet, discuss, and agree on priorities. For example, they could be to provide for identified shortages, fill gaps in essential services, create new jobs, and conduct vocational training, and generate needed funds.

They would assist in the creation enterprises, and provide the mechanism for subsequent community and worker supervision. Where there is a basis for it, new enterprises would operate as cooperatives.

Social decision making and social enterprises would connect to the broader society and economy, including the private sector and government in a collaborative way. There would be an element of competition. But the emphasis could be on working together on shared priorities.

Building a democratic economy means that democracy must be extended to all workplaces. All those who work in them, should have the right to share in the decision making, including decisions over how investments are made, and how the rewards are distributed.

The rise of a social economy will generate support for the democratisation the whole economy, and the enthusiasm and creativity that would serve as the engine for success. This would be an economy for people, providing the best condition for ensuring sustainability under the threat of global warming, ensuring no one was left behind, and eliminating poverty once and for all.

Australia has some advantages. The economy is relatively highly developed, and the workforce is skilled. Australia is largely food self-sufficient. The public infrastructure needed is more or less there, even if some improvement is needed.

A social economy calls for more government economic intervention. Its major contribution must be the implementation of a national economic plan to achieve identified national objectives.

Certain functions can be provided more efficiently as public enterprises. Others are of special strategic or security importance. The past privatisation of public enterprises should be reversed in these cases. This would also provide government with much needed revenue to apply to new priorities.

The public sector could be improved by community supervision of government departments and service delivery at the local level, through a system of community assemblies at the municipal, regional, state, and national levels.

Efforts to build a social economy will not be easy. They will meet resistance from entrenched interests that see this as a threat.

Too few currently make the decisions and take the largest share of the rewards. This monopoly on democracy has meant the concentration of power and the disempowerment of the majority.

The rise of a social economy would challenge the monopoly on power and those who currently hold it will strive to maintain their control. Society must challenge this. Progress and the growth of democracy depends on this.