Social Democracy and the State

The state occupies a central place in social democratic thinking. It is the vehicle through which policies are delivered. Indeed, it is no coincidence that the growth of the modern state was a forerunner of the social democratic movement. Today, it is impossible to think about social democracy without considering the role of the state. But the relationship is not without its problems.

The State and Social Democrats make natural Bedfellows

The objective of social democracy is to humanise and curb the excesses of free markets. In the UK it was union bargaining power that first tried to tackle the problem but this proved an insufficient vehicle. So, as in the rest of the continent, national organisations were created to pass legislation through the state, regulate the excesses of capital and deliver a social wage in the form of welfare benefits and health and educational provision.

Industrialisation and then bureaucratisation created the Leninist state in the East, the Fabian state in the West and everything in-between across the continent. Though there were important differences, the similarities were clear: the state and social democracy became intrinsically entwined; they both came hand in hand.

The neo-liberal backlash of the 1980s fatally undermined the Left’s confidence in the state. In its most extreme form, in the East, the Left project collapsed. In the West, the damage, although less obvious, was still corrosive. The failure of the Soviet Union was spun as a failure of socialism, social democracy and the state, rather than the failure of one extreme variation of the role of the state.

With markets unleashed and capital freed from national constraints, state social democracy was on the back foot not just economically but also culturally. The ideological triumph of individualism, consumerism and freedom of choice over the collective, the citizen and democracy created a pincer movement that social democracy could not escape from. It became hobbled. The game now was not just to regulate and humanise the state but to ensure economic efficiency through supply side measures such as education and training. The government went so far as lowering, and sometimes even overlooking, taxes if there was any threat to maximum competitiveness.  The state was destroying itself.

The Retreat of the State and its Consequences

In this conflation of economic efficiency and social justice, the financial markets were liberated in the hope of at least some wealth trickling down. There was, as Mrs Thatcher planned , no alternative. But social democrats forgot their historic purpose – not just to humanise capitalism but to save it from its own excesses. The capital unleashed created the biggest economic crash in a century and the state’s role in the creation of the crisis and then in bailing out the banks destroyed any vestige of credibility that the social democrats had.

People expect free markets to behave in unfair and excessive ways. They expect social democrats to work through the state to prevent it. When this fails, what is the point of social democracy and the state?  At least the free market remains true to itself!

The era of the solely bureaucratic state is over, the place of the market state is now discredited. The challenge to social democrats is whether we can develop a democratic state model? This needs to do two things;  first determine where the state needs to act and therefore were it doesn’t. Before the bureaucratic state, the left was characterised in part by its pluralism and support for a host of non state actors and institutions such as mutuals, cooperatives and friendly societies.  Capitalism and communities need exactly that kind of pluralism to flourish again. So, can the state both facilitate such flourishing and allow the freedom and space for such pluralism?

The second challenge is to work out how the state operates in the areas where it and it alone can act. So how do we de-mechanise and de-marketise the state and instead democratise it through the involvement, participation, voice and votes of producers, users and communities? The argument here is in part moral: whose state is it? But also practical: how can it function better through these processes?

As such the state starts to prefigure notions of a good society by putting in to practice ways of being that social democrats ought to value. The state as a means, not an end.

This post is part of the ‘Basic Values Debate’ jointly organised by the Friedrich-Ebert-Stiftung and Social Europe Journal. Read more on social democratic parties: ‘The Future of the SPD as a Catch-All Party’.