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An Agenda for Social Democracy

 

An Agenda for Social Democracy

Perspectives vol 1

 

 

The global financial crisis provides an opportunity for the world to rethink its economic and political structures says a leading economist.

In An Agenda for Social Democracy, Professor John Quiggin takes the economic debate beyond the immediate triage and first aid being offered by world governments. He proposes a long term response to the global financial crisis which shifts the risks from individuals and families and places the hand of government firmly on the economic tiller.

"The crisis is not a temporary aberration, to be followed by a return to the 'normality' of the late 20th century, dominated by the ideology of economic liberalism. Rather the economic and social system that emerges from the global financial crisis will be radically reformed," says Professor Quiggin, who is Federation Fellow in Economics and Political Science at the University of Queensland.

"The inevitable contraction of the financial sector creates both the need and the opportunity for an expansion in the provision of non-financial human services, such as health and education."

In An Agenda for Social Democracy, Professor Quiggin outlines his blueprint for a new global economy where governments have a strong role. His vision includes reconstructed financial markets with banks tightly controlled and separated from speculative enterprises; a continuation of free trade; and a healthy income for governments from taxes.

"The global financial sector, which had long overawed national governments with threats of ratings downgrades and capital flight, and dazzled the world with the immense wealth it generated, has suddenly become a collection of desperate and widely-despised mendicants, bailed out at the expense of ordinary citizens," writes Professor Quiggin.

Professor Quiggin also believes the global financial system needs a complete overhaul - an issue recently discussed at the G20 Summit.

"The challenge facing governments and regulators will be to construct a new global financial system and a regulatory architecture strong enough to prevent a recurrence of the bubble and meltdown that has largely destroyed the existing unregulated system," Professor Quiggin writes.

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