It’s been a long time since the heyday of social democracy. Neoliberalism has held sway for decades and austerity is being used to attack public services. Social democrats are out of power across Europe and their arguments marginalised. Is the crisis of Europe a crisis of social democracy?
Social democracy is about a compromise between capitalism and socialism. In practice this means the welfare state, greater equality and the collective provision of what markets will not cater for adequately, such as support for the poor and disadvantaged, education, arts, and workers rights. The welfare state is one of the great achievements of humankind, giving people life chances unlike those of any previous generations. But already some social democrats apologise for it and want to change it all.
Those in and around the top tiers of the UK Labour Party say the welfare state is inefficient, does not provide choice, should be cut back and opened up to private providers and the market, putting at risk the very public good it is aimed at. The compromise between socialism and capitalism has been abandoned in favour of a neoliberal version of the latter, social justice replaced by cost-efficiency with a human face. Labour kick-started the privatisation of higher education, the marketisation of the health service and celebrated the deregulation of labour. This kind of social democracy loses what makes it distinctive and leaves the argument for a social alternative with populist parties and social movements.
The crisis of social democracy is longer running than the crisis in Europe. In the 1980s European social democracy accepted in principle what it already went along with in practice, the role of private ownership and markets. In the 1990s it started to not just accept these institutions but celebrate them and in a free market rather than mixed economy form. In the UK austerity has been accepted by Labour, just less cuts, more slowly.
But Hollande’s victory brings hope and the European crisis could be a chance for social democracy to rediscover itself: investment, rather than austerity, for growth; fairer taxes, on wealth, finance, loopholes and havens; shared responsibility so the rich take a hit rather than getting richer while the effects are borne by the poor; finance regulated so short-term selfish risk-taking at the root of the crisis is ruled out rather than rewarded; and a social Europe.
The crisis also gives social democracy the chance to rethink. Unemployment can be tackled by investment but a less growth-oriented approach is rethinking work. Work is compulsion and takes away our free time. Redistributing it would allow all to work but mean all do not have to work so much. This requires a cultural change in which production and consumption are less valued, but also practical steps such as a shorter working week and a basic income. This is a challenge for social democracy that has been oriented around growth to create wealth, work as the route for inclusion and working class identity as its social basis.
The sovereign debt crisis is pressing but another crisis threatens the future of humanity – climate change. The focus on growth as a solution to the crisis in Europe gives social democrats the chance to rethink what this means. They need to look at alternatives to growth as well as focusing growth on the low carbon economy. This is also a challenge for social democrats because creating wealth as well as its distribution has been their solution for the poor.
Europe facilitates migration within its borders but closes it off from outside. Social democrats adopt anti-immigration rhetoric because they think it appeals to their working class base and because they wear blinkers in which the class they are responsible for is within their own area and not people from outside, who are also humans and often more needy. But migration creates growth that can help with the crisis. It provides productive workers who pay tax, which funds public services, and can support the costs of an ageing population.
Young people are political but alienated from parties and some divert their energies into protest instead. But there were young faces in the Hollande campaign and youth care about environmental issues, their precarity and the unfair way the effects of the crisis are being allowed to fall. Many have been brought up in immigration societies. If social democrats can rediscover their commitments to the welfare state and investment for growth and rethink their views on work, ecology and migration they can bring these young people back to social democracy.
This article is based on a talk given at the Madariaga Foundation, Brussels.
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The Labour Party was taken over by a right-wing gang, but in the aftermath of the 2010 election, a very serious re-think is going on which, one would hope, cuts across some of what the article says and assumes.
The problem has been that the Party, as a whole, was frightened of the markets (and the Press). Governments have allowed the markets to have too much power, without realising that they had, and still have, the means to moderate it and to get tough on behalf of the 99 per cent.
I can only hope that the social democrats have the courage to formulate a new message and to stand up for what is right, and then are able to convince the voters. Of course, if members of governments are within the 1 per cent, we are living in a state of pious hope.
Totally agree with Anthony – and with Luke Martell. In Austria, we have a strong Social Democratic Party – even in government, as the senior partner in a coalition – but its problem is exactly what Luke diagnoses: they aren’t really social democrats, and haven’t been for a long time. Their top representatives feel proud if they can get highly paid jobs in industry after they have left government through the revolving doors. Any corporation will do! And no sign of change…
Belated thanks to Anthony and HW for your great comments. Historically social democracy has been about a compromise between capitalism and socialism, or pools of socialism within capitalism. This is a contradictory and difficult compromise. And social democracy in practice has become about capitalism with a human face. I hope Hollande, Miliband et al will practice what they promise about a more responsible capitalism, where the rich share responsibility more, and this is translated into something more egalitarian.
Thank you for your praise.
I have had a long period working in the City (at quite a senior level) and in small business (at the receiving end of the finance industry). I have taken to doing what I can to come up with practical solutions and fresh ideas to make capitalism better.
This has taken the firm of writing an occasional article for whoever would print it, some letters to the FT and, in the last year, comment on the work of others (including in the FT, the Progress daily e-letters, SEL). Some of this can also be accessed via google.
May I, in particular refer you to my comment on “Institutional incorrigibility”, posted by Stephen Beer on 5th July 2012 on Progress ( http://www.progressonline.org.uk/2012/07/05/institutional-incorrigibility ), in which I give an overview of the issues raised by the Diamond affair.
I don’t think that there is a radical alternative to capitalism that is feasible. But there is a multiplicity of adjustments in its practice which can be made to make it more people-friendly.