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This is one of the deeply problematic parts of the left, but I wouldn't say it's fundamental.
There's a whole load of anarcho-socialist thought around co-operatives, mutuals, and economic democracy, not just the obvious socially liberal views in today's left-wing.
All the paternalistic dictatorship of the proletariat stuff really needs to be left behind in the dustbin of history, and the left needs to revisit the solid arguments about human freedom and flourishing, over and above economic freedom, otherwise we're left with the moral void we're living through now.
believes in centralised and collective decision making
(Collective, yes, centralised 'paternalism' not so much — you don't need to believe in statism to be a socialist)
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you can have centralised and collective planning of service provision free from market informed moral constraints as slippers notes. it's central to a lot of modern social democratic thinking. but as mark fisher is famed for noting, to conceptualise this stuff under late stage capitalism feels equal to imaging fantasy books.
less in jest, saying a wesley is paternalististic, isn't a critique of paternalism as a whole, but how said politician uses that specific facet to the degree it's overbearing in his decision making. to justify otherwise contrarian positions. as slippers mentions elsewhere, any normal socially democratic person would be lording how this is universally promising.
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You can't be a libertarian who believes in centralised and collective decision making
It's easier to do this than to be a libertarian who believes in private property, but no one takes right wing libertarians to task for that particular contradiction.
Left libertarianism is absolutely a thing, and only has (roughly speaking) a 200 year history of political thought behind it. You should dig it out, there's some good reads in there.
it's consistent from the view point that streeting is a parternalistic person. the what and why is window dressing to him ultimately believing people do not know what's best for them (the state/capital) and it should be chosen for them. it's why the messaging is so focused on punishing poors (as liz kendall is atm). it's an inherently protestant, misanthropic position.
it doesn't suprise me at all that someone who operates on this principle would be on the back foot of progressive thought.