The Spanish Socialist Party and the modernisation of Spain

Paul Kennedy

• Publisher: Manchester University Press
• Year: 2015
• Print ISBN: 9780719074134
• eBook ISBN: 9781526102904
• Edition: 1
• Topic: Mezzi di comunicazione e arti performative
• Subtopic: Storia e critica del cinema

This book considers the most electorally successful political party in Spain, the Spanish Socialist Workers' Party (PSOE), which was in government for two of the three decades since it won office under Felipe González in 1982. Providing rich historical background, the book's main focus is on the period since General Franco's death in 1975. It charts Spain's modernisation under the PSOE, with a particular focus on the role played by European integration in this process. Covering events including the 2011 general election, the book is one of the most up-to-date works available in English and will be of great interest to academics and undergraduate and postgraduate students in the field of Spanish and European studies.

1

The PSOE and social democracy

It is important that this book on the Spanish Socialist Party starts with a theoretical discussion of social democracy since the 1970s, when the PSOE went from being a marginal political force to become a viable party of government. The aim is to establish the PSOE’s position and draw lessons from the experience of one of Europe’s most electorally successful social democratic parties over recent decades. Amongst Europe’s oldest social democratic parties, the PSOE was able to establish itself as the most significant political party during the Second Republic (1931–36), and historical memory played a significant role in the PSOE’s re-emergence following Franco’s death. Although the party shrank to near-irrelevance during the dictatorship, its virtual re-establishment under the leadership of Felipe González enabled it, firstly, to secure and consolidate a dominant position within the Spanish left, secondly, as the country’s chief party of opposition, to establish itself as a credible party of government, and thirdly, to retain office at four successive general elections between 1982 and 1993.

Although, within the context of an economy in recession and a seemingly never-ending stream of party-related corruption allegations, the PSOE lost office in 1996, finding the transition from office to government challenging, a renewed party leadership under José Luis Rodríguez Zapatero was able to secure consecutive general election victories in 2004 and 2008. Despite faring badly at the 2011 general election, the PSOE was still far and away Spain’s most electorally successful political party.

It is important to place any study of the PSOE’s experience with respect to social democracy within the broader dilemmas facing social democratic parties in the ‘post-material’ world (Heywood, 1995a: 229). The literature on the challenges facing social democratic governments with respect to the prosecution of an autonomous national economic policy is considerable (see, inter alia, Gray, 1996, 1998; Giddens, 1998, 2002; Cuperus et al., 2001). Constraints include globalisation (especially of the financial markets); Europeanisation of product markets; the existence of an independent European Central Bank with a monetarist statute; high national indebtedness; demographic shifts; heterogenisation of the social structure; individualisation (values, lifestyle etc.); and increasing voter volatility (Merkel, 2001: 36). The end of the post-war boom, and the fact that lower economic growth rates rendered impossible the pursuit simultaneously of policies that reduced inequality, raised living standards and fitted the needs of capitalist accumulation have also been advanced as an explanation for why social democrats have adopted neoliberal policies since at least the 1980s (Lavelle, 2009: 9).

Moreover, although countries throughout the world, reacting to the scale of the international financial and economic crisis of 2008, were quick to apply Keynesian-style prescriptions, demand management was ultimately put back in the policy locker, supplanted once again by a neoliberal approach which had brought the developed world to the edge of the precipice. As Sevilla (2011: 432–3) has argued, the experience of the crisis has not led to the EU reconsidering its stance with respect to the functioning of the economy in general and that of monetary union in particular. Much less has it persuaded the EU to embrace the concept of a lack of aggregate demand and it has not advocated the implementation of compensatory public policies. If a company cannot sell its products, the problem is always one of lack of competitiveness, rather than lack of demand. Consequently, the way to avoid an increase in unemployment is not by stimulating public demand, but rather by improving levels of competitiveness. Similarly, the foreign deficits of eurozone member countries can only be corrected by improving competitiveness so as to stimulate export growth. Competitiveness can only be improved by cost reductions.

Market liberalism, deregulation, the central role played by finance within national economies – all viewed as being key elements in the apparently irresistible phenomenon of globalisation – were likely to have more of a future than the interventionism which had only been temporarily applied in order to prevent the collapse of the international banking system and economic meltdown.

When the PSOE entered office in 1982, in common with other social democratic parties throughout Europe it was confronted with the reality that traditional egalitarian tools such as Keynesian-style demand management, state ownership and mass public provision were all under challenge to a greater or lesser extent. The practical realisation of ‘socialism’ was placed on hold as a utopian goal which could be achieved only through the foundation of economic ‘modernisation’ via European integration. The use of European integration as a strategic option for modernising Spain became the key policy of the PSOE government; ideology was secondary to pragmatic management of the economy (Heywood, 1995a: 198, 225, 229). Others have similarly highlighted the PSOE leadership’s emphasis on pragmatism and realism, rather than ideology, social democratic or otherwise (Gillespie, 1989: 402–3).

Felipe González – to the chagrin of some in the party – was happy to adopt Deng Xiaoping’s aphorism, indicating that ‘it doesn’t matter if the cat is black or white, as long as it catches mice’. The ends justified the means, even if those means bore little resemblance to traditional social democratic precepts. Essentially, the party’s aims were viewed in terms of accepting the challenge of consolidating Spanish democracy whilst at the same time bringing Spain up to the level of its European neighbours, socially, economically and politically. European integration provided the fundamental framework for this transformation, ranging from the industrial reforms required to allow Spain to be accepted as a member, to the constraints provided by the Maastricht convergence criteria, and, subsequently, the Growth and Stability Pact. Socialist transformation was side-lined. The party’s frequently expressed aim of bringing about Spain’s ‘modernisation’ captured the essence of its objectives.

It has been argued that those writers who labelled the PSOE’s economic policy orientation as neoliberal (Share, 1988; Petras, 1993) ought, rather, to have viewed the party’s stance as a pragmatic response to an international context over which the Socialists had little control (Heywood, 1994a: 1; 1995: 227). The economic foundations of social democracy had effectively been demolished by the global freedom of capital (Gray, 1996: 26). The degree of manoeuvre available to social democratic parties was therefore viewed as being highly circumscribed.

With neoliberalism in the ascendency, emphasis was placed on the market as an efficient mechanism for the distribution of resources and the opening of economies to international trade and competition. Priority was awarded to the control of inflation, the deregulation of economic activity and balanced budgets. Such has been the supremacy enjoyed by these precepts that they have become just as much features of social democratic economic policies as they are of conservative policies. It is argued that there is now only one viable economic policy, and that economic management is either effective or ineffective, rather than being left-wing or right-wing (Maravall, 2009: 255; Sevilla, 2011: 454).

Others have nevertheless contested this view, arguing that constraints did not prevent the González government from implementing a set of economic policies in line with the party’s social democratic ideological preferences. Taxes were increased by a third whilst the public sector was used to develop the most extensive capital formation plans in Europe in the 1980s (Boix, 1996: 24). By the early 1990s, health care provision had been extended to the entire population, with Spain boasting the highest proportion of doctors per head of population of all OECD countries. Pension rights were similarly universalised, spending on education rose five-fold during the decade 1982–92 and the amount spent by the State on unemployment benefits more than doubled in terms of percentage GDP. Total public sector spending accounted for around 50 per cent of GDP in 1995, around half of which was accounted for by outlays on the welfare state, in line with the EU average (Kennedy, 1997: 98–9).

Similarly, during the first decade of the twenty-first century, the PSOE government under Rodríguez Zapatero was able, prior to the economic downturn, to put in place significant social democratic achievements, including a Dependency Law, passed in November 2006, which guaranteed state assistance to elderly people and those suffering from severe disabilities, including mental illness. Such was the significance of the initiative that the government described it as the ‘fourth pillar’ of the welfare state, joining existing provision in health care, education and pensions. A further indication of the government’s social democratic policy credentials was the fact that those on the lowest incomes enjoyed the largest percentage decrease in their income tax contributions between 2004 and 2008, whilst social expenditure accounted for half of the 2008 budget. These achievements are considered in greater detail in Chapter 10.

The case of Spain under the PSOE thereby appears to bear out the hypothesis that political parties can still exert a major influence on a country’s economic policy. As Pierson argues, ‘there are still choices to be made – even if these have become more expensive or more difficult to mobilize’ (Pierson, 2001: 88). Furthermore, there has been criticism of the view that globalisation ‘imposes’ neoliberal policy agendas on social democratic governments, in that it ignores how the influence of the processes of globalisation is mediated by domestic institutions, and the actors working within them (Clift, 2003: 211).

A further issue within the debate on social democracy is the need to acknowledge that although social democratic governments are subject to a number of the same significant international constraints, domestic factors play a key role in shaping national social democratic agendas and the way in which they are put forward (Cowell and Larkin, 2001: 108). Furthermore, new political orientations and drastic sociological changes within social democratic parties have generated new patterns which reflect the diversity of socio-political issues each party faces in its own national context (Marlière, 1999: 14). As Marquand reminds us, ‘social democracy is, by nature, heterogeneous. There has never been a single social democratic orthodoxy, and it would be astonishing if one were to develop in this time of bewildering flux. Now, even more than in previous decades, it is wiser to think of social democracies than of social democracy’ (Marquand, 1999: 10). Social democracy can no longer be confined to national economies and national economic management. Some greater degree of diversity is required (Gamble and Wright, 1999: 5).

Concerned about electability, social democratic parties have sought a broader base in ‘progressive’ opinion, leading them to adopt a ‘citizenship-focused’ discourse, indicating the degree to which social liberalism has influenced social democracy (Pierson, 2001: 59). Under González, PSOE governments shared the social democratic concern with equality and non-discrimination in the exercise of citizenship rights; emphasis was placed on the expansion of social policies, rather than on traditional – and increasingly outdated – social democratic policy preferences such as the extension of public ownership (Maravall, 1992: 25). This approach continued under Rodríguez Zapatero, who commented:

My socialism is not of the old ‘tax and spend’ variety, i.e. where there is unlimited public spending paid for by tax increases. Nor is it the socialism of a state with numerous public sector companies in areas where private initiative obtains better results. Nor am I, as regards the day-to-day functioning of the economy, a supporter of government meddling in companies’ activities. I think that it is necessary to establish a set of clear and transparent rules for companies, and that public finances should be managed rigorously. (Calamai and Garzia, 2006: 83)

Similarly, in an interview which he gave to the Spanish newspaper, El Mundo in April 2006, Rodríguez Zapatero described his vision of social democracy in the following terms:

A modern left’s programme is based on a well-managed economy with a surplus in the public accounts, moderate taxes and a limited public sector. All of this accompanied by the extension of civil and social rights. (Quoted in Maravall, 2009: 254)

The tax burden barely changed under the PSOE’s first term in office. The top rate of tax was reduced by 3 per cent and the threshold of each tax band was raised only slightly (Maravall, 2009: 255).

Marquand, writing about the UK, comments that the concept of a new intellectual and political paradigm combining insights from traditional social liberalism and traditional social democracy emerged during the early 1990s based on the work of individual writers such as Will Hutton and Ralf Dahrendorf and organisations such as Charter 88. Although he describes it as being ‘inchoate, and in places distinctly fuzzy’, Marquand (1999: 13–14) identifies five key features:

• It was broadly liberal in politics, but broadly social democratic in economics.

• It was for capitalism against socialism, but implied profound changes in the architecture of British capitalism and a concomitant challenge to powerful corporate interests.

• Although drawing on American academic writing, its vision of the political and moral economy was much closer to those of mainland Europe than to the United States.

• It was pluralistic, implying a multiplicity of power centres, economic and political.

• It rejected the notion of a single modern condition to which there is a single route.

Marquand notes that Blair’s New Labour rejected the paradigm, arguing that its own methods constituted ‘the sole path to the future’. The paradigm nevertheless displays broad similarities with the kind of ideological underpinning which the PSOE, under the leadership of Rodríguez Zapatero, sought to provide for the Spanish variant of social democracy. Rodríguez Zapatero and members of his immediate circle have readily acknowledged their debt to US academics such as John Rawls and Benjamin Barber, and the Princeton-based Irish academic, Philip Pettit.

The constraints on economic policy nevertheless remained considerable and the long boom enjoyed by the Spanish economy between the mid-1990s and 2008 served to dissuade Rodríguez Zapatero’s government from introducing significant changes in the country’s economic growth model. Given the buoyancy of the economic inheritance left by his PP predecessors in government, it is understandable that Rodríguez Zapatero pragmatically opted to implement a policy which broadly remained within the parameters established under José María Aznar between 1996 and 2004. Enjoying a surplus on the public accounts throughout almost his entire first term in office at a time when significant public deficits were the norm throughout the EU, and with public debt being comfortably below the EU Growth and Stability Pact’s 60 per cent of GDP limit, any major shift in policy might even have appeared foolhardy. Moreover, Spain’s chronic unemployment rate was on a downward trend, and Spain accounted for a good proportion of the job creation within the EU. Innovation in the economic policy field therefore appeared to be unnecessary.

Although the PSOE’s manifesto at the 2004 general election was critical of the prominent position played by the housing sector, highlighting ‘the current risks concerning the Spanish economy, which is highly indebted and geared towards bricks and mortar’ (PSOE, 2004a: 104), Rodríguez Zapatero did little when in government after 2004 – particularly during his first term, when the economy boomed – to replace Spain’s construction-based economic model with an alternative approach more geared towards addressing structural weaknesses within the economy and improving economic competitiveness. Such solutions were only proposed after boom turned to bust.

Ultimately, the economic downturn, which hit Spain partic...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• Series editors foreword
• Acknowledgements
• Introduction
• 1 The PSOE and social democracy
• 2 The character of Spanish Socialism: a historical overview, 1879–1982
• 3 The PSOE and the European Community: from isolation to integration
• 4 Economic policy under the PSOE, 1982–96
• 5 Foreign and security policy under the PSOE government (1982–96): the irresistible force of European imperatives?
• 6 The PSOE and the question of regional autonomy
• 7 The PSOE in opposition, 1996–2004
• 8 Zapatismo: progressive ideology in a post-social democratic world?
• 9 Foreign and security policy under Rodríguez Zapatero
• 10 Nemesis: economic policy under the PSOE and the road to defeat
• 11 Conclusion
• Appendix: Party organisation, membership and general election results 2000–11
• Bibliography
• Index