Reinventing the State: New Perspectives for Social Democracy

‘Building the Good Society’ has come at the right moment. Not only Europe but also European social democracy is ‘at a turning point’.

This document stands in great contrast to the Blair and Schröder document of 1999, which represented ‘traditional’ social democracy – although it would be better to call it ‘transitory’ social democracy, since it failed to move beyond a vague neoliberalism, and had no conception of the urgent need for a new kind of state and global governance. In the last decade mainstream social democracy has been unable to elaborate a proper concept of state that could also be attractive to the general public. Having inherited the concept of an all-protective state from industrial society, it switched to the other extreme with its sudden embrace of the neoliberal ‘lean’ state.

In my view, reinventing the state means introducing the concept and practice of the ‘developmental state’, based on the Nordic model within the EU. This term was originally used in development studies, for ‘developing’ countries, but it has since become an accepted term for other states in the conditions of rapid globalisation. It is well known that market economies are inherently unstable, and that this necessitates a system of state regulation. Labour markets are even more unstable, and the state therefore also appears as ‘stabiliser’ for the population. However, in addition to these traditional roles, a radically new role for the state has arisen. The global economy is highly volatile, and external conditions are constantly changing for the economy and the population, and this means that the state has to take on a role as a ‘mobiliser’, permanently adjusting its institutions and regulations to changing conditions. The developmental state thus focuses on the proper development of institutions and living conditions – as is illustrated well by the flexicurity model. The ‘traditional’ state is status-quo oriented, making adjustments only from time to time, but the ‘new’ state cannot afford this luxury of lagging behind rapidly-changing global realities. Adjustment has become a permanent function of the new globalised state, which requires a built-in anticipatory role and a major capacity for risk management.

Recognition of this situation, which has been generated by the new stage of globalisation, is the basic precondition for the good society – the recent global crisis was the writing on the wall. During the recent global financial tsunami it was not just the poor and those at the margins (the absolute losers) that felt neglected; the lack of strategies for crisis management affected the lower middle classes (the relative losers), who faced loss of status and security. Both the absolute and relative losers in the recent crisis have realised that the state around them is boring, slow and passive: it has not been able to maintain the proper workings of society in the global age.

Creating social capacity and social capital through the mobilisation the population is the pre-eminent task of the developmental state. The good society relies not only on procedural democracy, but also on excellent policy performance by society as a whole, and on the active politicisation of the population for the purposes of deciding between alternative futures at a time of crisis. The developmental state can be defined as an innovative state, with permanent re-regulation and constant adjustment to changing global circumstances, and one that also needs a new understanding of participatory democracy, and multi-level governance, in order to win support for these changes. An active state is characterised by ‘the governance of governance’: horizontal partnership structures, with the involvement of new actors in the policy-making process, necessitate the regulation and re-regulation of this process by the state.

The developmental state offers an opportunity for a new social-democratic narrative with an innovative political leadership. It can make credible promises about investing in the future, for example with lifelong learning, or constant human investment with the flexicurity. A good society works with high-level public services, and socially provided goods and services. The developmental state has the capacity to revitalise social democracy by inventing social Europe for the twenty-first century, turning the recent global crisis into a creative crisis.