JOHN QUIGGIN. Socialist utopia 2050: what could life in Australia be like after the failure of capitalism?Jan 23, 2019
From four-day weeks to unconditional basic income to free education, it’s possible to imagine a future where society’s focus has moved from consumption to quality of life.
Looking at contemporary politics, it’s easy to feel a sense of despair. All across the world, we see a resurgence of racist demagogues, now rendered respectable by the embrace of the “mainstream” political right and much of the commentariat. Pauline Hanson, once considered beyond the pale, is now barely distinguishable from Peter Dutton and Scott Morrison. On the other hand, across the English-speaking world and to some extent beyond, young people have moved sharply to the left.
With capitalism having failed them, many are willing to embrace socialism. But what does “socialism” mean?
For the moment, it may be enough to define socialism as social democracy with a spine, as I have before. But to inspire the kind of movement we need to defeat reactionary racism, a positive vision of a socialist society is essential. This calls for a kind of utopian thinking that has been out of favour for a long time. That’s in part because of the failure of so many utopian visions, and even more because of the need to defend the partially realised utopia of the mid-20th century social-democratic welfare state.
I thought it might be worth trying to imagine life in Australia in 2050, a few decades into a socialist resurgence, though well before the emergence of society that could truly be described as socialist. In the utopian vein, I’m going to look at a future where everything has gone as well as could reasonably be hoped. However, I’m going to make every effort to be realistic in terms of the economic constraints involved, and not to invoke radical and unlikely changes in human nature.
I’ll start with a typical 30-year old, born just a couple of years in our future. I’ll call him/her Ali, and leave other details unspecified for now. Like most young people in the 2030s and 2040s, Ali completed high school and went on to further education, all of which had been made free as one of the earliest measures of the socialist government elected in 2025.
Ali’s partner, Sam, was one of the exceptions, finding school a bore and not having the aptitude for a skilled trade training. Instead of free education, Sam received a grant of $100,000 at age 20, to be used in starting up a small business, in Sam’s case, a coffee shop. (A society without coffee shops would be a pretty poor excuse for utopia.)
Ali works at a community-run credit union. The resurgence of credit unions followed the downfall of the global banking sector that dominated late-20th century financial capitalism. After the Second Global Financial Crisis of 2021, and the long depression that followed it, no government anywhere was willing to risk giving financiers another chance to destroy the economy. Investment banks and hedge funds were shut down. Financial transactions taxes, of a kind first proposed by 20th century economist James Tobin, made short-term financial trading of all kinds unprofitable. Commercial banking is once again dull and safe, as it was in the 1950s, a refuge for unadventurous souls with a knack for figures. Tight regulation and the dominant role of publicly owned institutions have seen to that. Meanwhile, community banks and credit unions like the one where Ali works handle the finance of most families and small businesses.
Like most workplaces, Ali’s credit union is open for the standard four-day, 30-hour week. With Monday as a regular day off, Ronald Conway’s sardonic description of Australia as “the land of the long weekend” is now a reality. With eight weeks’ annual leave and additional public holidays, Ali works around 1,200 hours a year, about average for full-time workers.
The shift to a four-and-a-half day week beginning in 2033 was, amazingly in retrospect, the first reduction in standard working hours in 50 years, resuming a trend that had cut annual working hours in half between the mid 19th and late 20th centuries. (The trend was reversed by the massive work intensification of the 1990s, referred to at the time by John Howard as a barbecue stopper. It still stops the occasional barbecue when elderly bores start telling young people they don’t know how easy they have it.)
Despite predictions of ruin from the business sector, the reduction in output was quite small, and after a few years was entirely offset by productivity growth. Output per hour worked doubled over 30 years as a result of technological progress. Moreover, many of the wasteful and unproductive activities of the market economy have disappeared, so that the social value of production has increased even more.
As the shorter working week was phased in, wage growth slowed down, but workers were still much better off than they had been during the early 21st century, when the benefits of productivity growth were less evenly distributed. The change was so successful and popular that the next reduction to a four-day week met little resistance.
The use of technological progress to improve work-life balance has been taken in other directions. When Sam and Ali had their first baby, they were entitled to three full years of paid leave, to be shared between them. Cynics observed that Australia had only just caught up with conditions available in Sweden decades ago, but most new parents were just happy to have the chance to spend time with their children.
Even back at work, Ali only goes into the office for two days a week, enough to maintain contact with colleagues. Most work, including banking, is done over the internet, which has long been provided free of charge as a public service. The decline of the private business sector has long since wiped out the advertising model on which the fortunes of companies like Google and Facebook were built. Since these companies relied almost entirely on content supplied by their customers, they weren’t much missed when they faded away.
Sam’s life hasn’t changed quite as much as Ali’s. The cafe is a seven-day operation and even with two business partners, running it takes 40 hours a week and sometimes more. And, like small business owners today, Sam grumbles about tax, unions and penalty rates, and the difficulty of getting good staff.
In other ways, though, Sam has it easier than in 2019. The $100,000 grant made it possible to start a business with no debt. More importantly, big corporations have disappeared from most sectors of the economy, including the cafe and restaurant sector. The relentless competition from large franchise operators, with business models based on exploiting franchisees who were forced in turn to exploit their workers, is a thing of the past.
The elimination of tax avoidance and wage theft, through a combination of government and union action, destroyed the business model on which many corporations worked. The abolition of intellectual property and the renationalisation of monopoly infrastructure reversed the tendency towards private monopoly that had contributed greatly to the rising inequality of the early 21st century. The massive financial sector of the early 21st century, another huge source of inequality, is a distant memory.
Most formal employment is in the public and non-profit sectors, including health, education and social services of various kinds, as well as infrastructure. There are still some big businesses left, particularly in the manufacturing sector. They account for around 10% of total economic activity and about 5% of all employment, down from around 30% at the turn of the century. Most of the work in these firms is done by robots and computers, and the relatively small number of workers are well paid. Some senior managers and professionals receive five times the average wage, the legal limit imposed after the Crisis.
Not everyone in 2050 works in a paid job like Ali and Sam, but hardly anyone is unemployed. Most people without paid work receive a “participation income” which reflects non-market contributions to society, such as child-raising, participation in education or volunteering for community groups of all kinds.
Such community groups have flourished, with generous public support for a wide range of causes and ideas. This approach contrasts sharply with that of the early 21st century, in which the public sector sought to harness the energy of the community sector to reduce the costs of achieving predetermined policy goals. Associated with this was an “audit culture” in which concern over the possible misuse of public funds was given greater weight than the opportunities for positive use of those funds.
For those who can’t or won’t find any useful work, there is an unconditional basic income, roughly equal to today’s age pension in value. Despite the concerns of believers in market incentives, only a relatively small proportion of the population is on the basic income at any given time and hardly anyone stays on it for more than a few years. The universal availability of free retraining, and the wide variety of opportunities to contribute, have meant that the basic income genuinely serves the function of a “safety net”.
As the focus of activity has moved from consumption to the quality of life, the environment has started to recover from the damage inflicted by unsustainable economic growth. The economy of 2050, including transport and most industry, is powered entirely by renewable energy, generated by a mixture of public utilities and local micro-grids. Coal-fired power stations and petrol-driven cars are a distant memory.
Food production has also become more sustainable, enabling Australia to feed a growing population, while increasing exports to the rest of the world. An expansion of publicly funded research through bodies such as the CSIRO has reversed the damaging cuts of the neoliberal era and produced a range of innovations, including better climate forecasting and remote sensing, as well as more efficient management of water resources with less damaging impacts on natural ecosystems.
The socialist world of 2050 would not be the kind of utopia dreamed of by abstract theorists. It would not be one of complete leisure or perfect equality, let alone perfect people. But it would provide nearly everyone with a better life, and more opportunity to pursue their own path to happiness, than we have today.
John Quiggin is an Australian laureate fellow in economics at the University of Queensland. He is prominent both as a research economist and as a commentator on Australian economic policy. He is a fellow of the Econometric Society, the Academy of the Social Sciences in Australia and many other learned societies and institutions.
First published in The Guardian, 17 January 2019.