687 Social Democracy anyone?

Social Democracy

Democrats voters in the US have a stark choice: Hillary or Bernie. I have heard repeatedly about people who like Bernie Sanders and his policies ... but who won't vote for him. I probably would be one of them. I am a Social Democrat from way back; I’ve blogged about Bernie before and the ins-and-outs of the consequences of voting for him (if he were the Democrats’ candidate he probably would be torn apart by the Republicans; the US arguably is not ready for his branch of policies).

The more I think about what I've said up there and the more I research Bernie Sanders, the less I like the previous paragraph. Luckily I don't have to vote in the US ... it must be heartbreaking to be in that predicament, being compelled to make a tactical choice. But that's politics, I guess.

In any case, if you do nothing else on this page, watch the little video at the very bottom.

Do you have a spare hour? You could do worse than listen to this talk ... "Bernie Sanders is one of the most genuine candidates there ever was. His entire voting history is testimony to his genuine compassion for humanity, for Americans of every gender, colour, religion and creed."

All this raises a pertinent question: What is Social Democracy? And what does it mean to live in a Social Democracy? That is an issue we may want to think through thoroughly. Bernie Sanders has done that for about fifty years (do watch the video).

OK, let’s say on a scale of 0 to 100 - 0 being no social services and 100 would be a country with the most social services anywhere on Earth - Australia sits at 50.

We have a reasonable social safety net of providing social services combined with low taxes to the lower economic demographics, where the discrepancy between the poor and the rich is at a proportion that we can tolerate. From a socialist point of view, more social services and even lower taxes would be desirable; from a conservative point of view the poor are getting a free ride with low or no taxes and the opportunity to “free-load” on excessive social services. Yet, all told, we are probably in a sweet spot where we sit at 50 on the scale of 0 to 100.

What would happen if our society veered further down the scale toward 0? If disadvantaged members of the community receive less help from the government ... if the fantasies of “the rich” are fulfilled and social services were cut?

An immediate consequence would be the rise of crime. In the beginning it would be petty property crimes like break ins, car thefts etc. But the further down the scale our community would fall, the more serious the crimes would be … this thought is not a mere hypothetical; it is quite clear that a society with a widening gap between poor and rich is subject to social unrest, to work-place relation upheaval, to demonstrations, striking and rioting.

At the bottom of the scale you find African countries like Nigeria, Zimbabwe and South Africa. Social services hardly exist, economic mismanagement and corruption flourish and the crime rates are off the scale compared to what we are used to.

In South Africa a booming industry converts BMWs and other luxury cars into travelling fortresses, with bullet proof windows and tyres; at the extreme end are flame throwers installed under the skirting boards, which at he flick of a switch produce gas-powered flames to repel would-be car-jackers and abductors.

Imagine having to live in gated communities, with huge fences and armed-to-the-teeth security guards. Extortion and kidnappings are common place … if you’re rich, your biggest problem would not be to find the million dollars to save the life of your kidnapped daughter after you have received the little finger off her hand in the mail, with the threat her hand will be next unless you pay up; sure, you’ll scramble to sell your Mercedes, your boat and investment properties, maybe even the house you’re living in … no, that’s not your biggest problem. Your biggest problem would be that you’d live your life in constant fear this might happen to you and your family.

The poor populations in countries with low Social Democracy, non-existent social services, are disillusioned and angry. With nothing to lose they are likely to turn to unsavory activities that threaten social cohesion and peace, including terrorism.

Now let’s look at then other end of the scale, where a well developed social security safety net is in place. Sure, this is expensive. The tax rate is on average 50%. Lower demographics pay no tax, high income earners pay much more than the average. The poor have access to a wide range of social services, like cheap health, education, public transport and non-taxed basic commodities, like fresh food; whereas all other commodities are Value Added Taxed at a rate of 20%. You want to spend $100k on jewellery? No worries, that’ll be an extra $20,000 in tax, for schools and hospitals. Luxury motor vehicles, for instance, the Porsches, Ferraris and Mercedes are taxed exorbitantly … and are hardly ever seen in the streets.

The examples of countries with such a well-developed Social Democracy that stand out are Scandinavia … Sweden, Denmark, Norway. Their policies are exceedingly progressive and crime rates are relatively low. You will find the gap between poor and rich is smaller … high income earners make about ten times the wages of low income earners; not a hundred times as much, as in other countries, like the USA.

But here is the cinch: When-ever world wide surveys are held as to which population in which country is the happiest, the Scandinavians - specifically the Danes - come out on top! Who would have thought … but social cohesion, low crime rates, fairness in the community and peace in the land turn out to be highly rated commodities; valued more highly than owning expensive sports cars.

So there is one conclusion for us here in Australia: We are indeed living in a sweet spot, but our level of happiness would probably be more likely to rise with more Social Democracy applied, rather than pursuing the opposite of cutting social services and raising taxes for the lower economic demographics.

Btw, I am all in favor of raising the GST to 15% or even 20%, if basic commodities are exempt. Poor people spend a very large proportion of their funds - in fact about 100% - on simply surviving. Those goods and services should not be taxed.

As an aside, there are instances where Socialism has failed, a good example is Venezuela. Notably Democracy needs to be added to Socialism, for the system to be viable. There must be no corruption, demagoguery and dictatorship in a country that employs Social Democracy.

Neo-conservatives like to refer to Venezuela as an example why Socialism does not work. Nevertheless, to study what went wrong in Venezuela is a good exercise when determining the parameters of what should be done and what should be avoided in a Social Democracy.

Here's more ... indeed: Hilarity Ensues!