Geoff Dow argues that the development of economic policy needs to be founded on a clearer understanding of economic growth, debt, government spending and taxation if key social democratic concerns about contemporary unemployment, living standards, and wealth and income distribution are to be effectively addressed by labour-oriented politics.
In this age of multiple political uncertainties, there are many tasks for social democrats wanting to reconstitute effective politics. One is to refute common errors about economic growth, unemployment, government spending and taxation. Though social democrats’ expectations seem to be in retreat, their actual accomplishments are not – with welfare transfers, political capacities and the role of politics still showing signs of structural advance. Renewed interest in inequalities in wealth and income suggest, too, that political processes can still affect distributive outcomes. While neoliberalism has worsened social conditions in rich and poor countries, it has not produced a viable mode of economic development for the future.