The Death of Social Democracy
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The Death of Social Democracy

Political Consequences in the 21st Century

Ashley Lavelle

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eBook - ePub

The Death of Social Democracy

Political Consequences in the 21st Century

Ashley Lavelle

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About This Book

Whereas many writers and scholars interested in the field of social democracy have focused on factors such as the role of economic globalization and electoral pressures, Ashley Lavelle explores the importance of the collapse of the post-war economic boom and lower growth rates since then. He examines how these pressures have led social democrats to embrace neo-liberal policies and become threatened by minor parties and independent politicians. Providing an original argument about the decline of social democracy, the author investigates how its decline has increased the popularity of minor parties and independents, along with the reasons for social democratic membership and electoral decline. This is an important book for scholars of social democracy and the broader themes of world politics, political parties, social movements and globalization.

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Publisher
Routledge
Year
2016
ISBN
9781317036364

Chapter 1

Introduction: The Social Democratic Malaise

In a world wracked by war, terrorism, the threat of environmental catastrophe, and staggering inequalities in wealth and power, the demand side for left politics has never been stronger. Yet, the supply side seemingly has never been weaker. Everywhere parties nominally of the social democratic left barely differ from their conservative and liberal opponents in their prescriptions for the world’s problems. Plans to challenge entrenched power and privilege or redistribute wealth have disappeared. Is the neo-liberalization of social democracy just a passing phase, or is the project beyond repair?
In answering this question I aim to contribute to the debate about the future of the left. My approach shares with traditional social democracy an abhorrence of free market fundamentalism and a belief in the need for collective action to remedy social injustice. It argues, however, that modern social democratic parties are no longer capable of delivering social change, and that they are now impediments to the building of a better world. The book concludes, therefore, that any challenge to neo-liberalism will only come through embracing alternative left parties and social movements, such as the Alternative Globalization Movement (AGM).1
An argument positing the death of social democracy is not by itself new. Taylor (1993) notes that in the 1980s ‘social democracy was portrayed as, if not in its grave, then verging on terminal decline’. At the end of the 20th century, David Marquand (1999, 247) wrote that ‘[r]umours of the end of social democracy have abounded for more than twenty years’. While Taylor and Marquand are not convinced that the condition is terminal, John Gray (1996) claims that globalization has killed social democracy. Meanwhile, Clive Hamilton (2006) has nominated mass affluence as the culprit in its death.
This book argues that social democracy is dead for very different reasons. From a Marxist perspective, it nominates as chief cause of the death the collapse of the postwar economic boom. A return to low growth in the 1970s removed the economic base of social democracy, which relied on the high revenues and incomes associated with the boom to fund social reforms. On top of the fiscal impact, the end of the boom rendered impossible the simultaneous pursuit of policies that reduced inequality and raised living standards and which did not undermine capital accumulation. In the new context of low accumulation and profits, economies now required neo-liberal policies to open up business opportunities and remove the constraints on capital to enable it to flow into uncharted areas. Social democrats were effectively forced into embracing such a policy approach if they were to stay within the parameters set by capitalist democracies, but in the process they abandoned their historic aim of reforming capitalism.
This explanation matters for any future prognoses. The position taken in this book is a radical one precisely because it rules out a revival of social democracy. There can be no turning back because the economic base from which social democracy could provide an alternative to neo-liberalism cannot be restored. Many commentators see problems in the project, but do not believe it is beyond repair. Even the arguments of Gray about the impact of globalization allow for some possibility of rejuvenation. If, as numerous commentators have pointed out, government policies have made globalization possible, they could just as easily unmake it. Hamilton’s argument that social democrats need to move from targeting economic deprivation to tackling the alienating effects of consumerism assumes that the parties are not so enmeshed with consumer capitalism for them to be able to do this.
Many other authors, meanwhile, see the problem as one of ideas: the rise of neoliberal ideologies has undermined egalitarian politics. Presumably if such ideologies can be effectively countered, social democrats may embrace more progressive politics. This is illusory, however, because the triumph of neo-liberal ideologies largely reflected the structural changes in capitalist political economy that demanded policies to smooth the flow of capital into new areas of profit-making.
No doubt some will interpret this argument as economically determinist. In fact, it is suggested that, given social democracy’s history of class collaboration and the pursuit of reforms within capitalist confines, social democrats have acted rationally by embracing neo-liberal policies in a period of economic decline. What will replace social democracy is also not pre-determined. The Far Right has benefited from social democracy’s embrace of neo-liberal policies and the despair they engender. It could do so further in the future if the left does not put forward a viable alternative to neo-liberalism.

Political Consequences

The death of social democracy has – and will continue to have – significant political consequences. While numerous authors have examined the neo-liberalizing trends in social democracy, few have dealt with the political consequences arising from this. The social democratic parties have suffered major setbacks from voters as a result of pursuing neo-liberal policies. This is an important point, given the frequency with which the electoral benefits of ‘modernising’ social democracy are touted.
An additional political consequence is that the parties have lost members. Membership decline is, of course, a problem for parties in general. Yet, there is evidence that social democratic parties have lost members specifically in response to the above policy developments. Without an agenda for social democratic reform, the benefits of membership are significantly reduced.
Another important political consequence has been increased support for minor parties who have capitalized on voters’ contemplation of more radical alternatives in the context of a consensus on neo-liberalism in the established parties. The rise of Far Right parties and more radical left parties are normally treated as separate phenomena. If they are seen in any way as connected to trends in social democracy, analyses are restricted to individual countries, with little comparison between case studies. I attempt to rectify this weakness somewhat by examining four case studies (see below).
The book, therefore, links together seminal themes in global politics: the death of social democracy is driving key political trends, such as the lack of alternatives in mainstream politics, and the rise of more radical parties. These political consequences are important because they presage an increasingly volatile and polarized political climate in the 21st century that has the potential to lead to new and stronger political forces for social justice, or emboldened reactionary elements emerging from the sidelines of politics to occupy more central positions.

Structure of the Book

I examine social democratic parties in four different countries: Australia, Britain, Germany and Sweden. These are important case studies which, when examined collectively, can allow us to make an argument about the future of social democracy. If there is no hope for social democracy in these countries, there is unlikely to be hope elsewhere. Too often, commentators see the countries in isolation. What is missed in the process is not only the fact that the problems each is facing are common to all, but also that sources of problems for individual cases are likely to be international and systemic. Scholars specializing in any of the surveyed countries will no doubt take issue with some aspects of my interpretation of social democracy in these countries. My emphasis is on the broad policy trends globally in social democracy, rather than detailed analysis of individual countries. There is, of course, variation between the countries, and it is argued that factors specific to the political-economic context of individual countries will have a bearing on the emergence of alternatives to social democracy.
The book is structured as follows. Part 1 of the book (Chapters 24) develops the arguments about the death of social democracy and its political consequences. Chapter 2 defines social democracy, looks at the compatibility of the different case studies, and examines the extent to which social democracy has embraced neo-liberalism. Chapter 3 looks at the various explanations for this development, before arguing that the collapse of the post-war boom ultimately provides the best explanation. Chapter 4 introduces the political consequences of the death of social democracy.
The ensuing parts of the book develop these arguments in relation to the case studies. Chapter 13 concludes the book by comparing and contrasting the experiences of the different countries and accounting for some of the differences in political consequences. In the wake of social democracy, it looks at the prospects for social change through radical left parties and social movements such as the AGM.
1 Borrowing from Harvey (2003, 162), this term is used throughout as a replacement for the so-called ‘anti-globalization’ movement, which is not so much against greater global interaction but rather the way in which it is presently constructed.
PART 1
The Death of Social Democracy and its Political Consequences

Chapter 2

Social Democracy and Neo-liberalism

This book examines the death of social democracy in Australia, Britain, Germany, and Sweden. Each of these cases is important. While the ALP has been compared with British Labour (e.g. Johnson and Tonkiss 2002), it has been neglected in comparative work on social democracy more broadly. It served as a model for some ‘modernizing’ social democrats, such as New Labour, partly because it commenced its neo-liberal programme relatively early (in the early 1980s) and was in power for a long period of time thereafter (1983–1996). The British case has been influential internationally under Tony Blair, and is also widely thought to have embraced neo-liberalism more thoroughly than others. The SPD’s age, position, size and international connections make it the most influential social democratic party in Europe, and therefore in attempting ‘to assess the future of social democracy no party is more important than the SPD’ (Paterson 1986, 127). Some may accept the argument as it applies to Britain or Germany, but protest that Sweden still offers a social democratic alternative. But, as we shall see, Swedish social democracy also has been neo-liberalized, and has suffered analogous political consequences.
To what extent can we compare these parties? A distinction often made is between the ‘labourist’ parties of the UK and Australia and the ‘social democratic’ parties of Europe (Scott 2000, 11–14; Clift 2001, 56). Undoubtedly social democracy comes in various national and political forms and styles (see C. Pierson 2001, chapters 2 and 3). The differences between labour parties and social democratic parties have, however, been overstated. As Berger has argued, ‘both the British Labour Party and the German SPD were party to a very similar form of socialism’. Both parties emerged as ‘protest movements against a society which was understood to be unjust and immoral, they were both reluctant to work within that system. The majority within both parties finally overcame these doubts’. Marxism’s influence on the SPD vis-à-vis British Labour also has been exaggerated (Berger 1994, 17, 254, 175, 177). Fielding argues that despite national variations, ‘all social democrats sought to transform free market capitalism into a more regulated system they described as socialism’. Based mainly in the manual working class, they ‘sought to improve their constituents’ lot by contesting elections, winning office and using power to extend the state ownership and regulation of capitalism’ (Fielding 2003, 60, 11). In this sense, social democrats are reformist because they see reforms within capitalism as ends in themselves.1
This compression of these parties into the ‘social democratic’ category is made possible also by the existence of the Socialist International, a grouping that contains ‘socialist’, ‘social democratic’ and ‘labour’ parties (Birchall 1986, 15). Furthermore, as we shall see in the following chapters, recent debates about constraints and challenges – including globalization and electoral pressures – reveal how these different parties in different countries have been impacted on in similar ways. Each of the parties is bedevilled by perceptions that they no longer offer a political agenda distinct from their rivals. The empirical record in the chapters also points to very clear similarities between the parties in terms of their embrace of neo-liberal policies.
The term ‘social democracy’, then, can encompass the different parties studied here. The definition preferred in this book is that provided by Birchall (1986, 15, 16), who refers to ‘a group of parties which have a programmatic commitment to some form of socialism and some link (organizational, traditional or ideological) with the working class, but whose practice is predominantly parliamentary and reformist’. Needless to say, social democratic parties traditionally are parties of the left.2 Also, the existence of a close relationship with trade unions is among ‘the characteristic features of social democratic parties’ (Taylor 1993; see also Moschonas 2002, 25). While some social democrats have much stronger ties with unions than others (Padgett and Paterson 1991, 3), Taylor’s point is true of the countries studied here. The similarities between the parties are again reflected in the deterioration in party-union relations as a result of the turn to neo-liberal policies.

Traditional Social Democratic Policies

As well as having these common characteristics, the different parties have pursued similar (though not identical) policies. In countries such as Australia and Britain there has been a commitment (programmatically at least) to socialization of the means of production; in others, such as Sweden, there has been more emphasis on extending the welfare state. Yet, there are many commonalities. Hay suggests three historical characteristics of social democracy. First, social democrats are committed to redistributing wealth in response to the inequalities created by markets. Second, social democrats believe in government economic intervention to deal with market failure. Third, social democrats are socially protectionist, in that they stand for the provision of better health care, education and welfare for their citizens (Hay 1999, 57). Seyd and Whiteley (2002, 185) suggest that social democracy has been characterized by a belief in democracy on the one hand and, on the other, ‘curbing the excesses of capitalism and redistributing power and resources to the disadvantaged and the forgotten’. Social democrats have also believed in government intervention to ‘civilize’ capitalism.3 With a largely German focus, Egle and Henkes (2005, 163, 164) include among traditional social democratic policies reforms such as progressive taxation aimed at redistributing wealth, generous welfare provision and legal protections for employees, and full employment. Social democrats from Australia mention similar policies, including spending on pensions, unemployment relief and public health and education, investment in infrastructure and publicly-owned enterprises, and policies aimed at reducing workers’ exploitation (Kerr 2001, 4).
In terms of the implementation of such policies, the quarter century after WWII is regarded as a ‘golden era’. According to Harvey (2005, 11), during this period ‘market processes and entrepreneurial and corporate activities were surrounded by a web of social and political constraints and a regulatory environment that sometimes restrained but in other instances led the way in economic and industrial strategy’. Many social democrats were attracted to the ideas of the British economist John Maynard Keynes, who argued that it was of ‘vital importance’ for the state to ‘exercise a guiding influence on the propensity to consume partly through the scheme of taxation, partly by fixing the rate of interest, and partly, perhaps, in other ways’. A ‘somewhat comprehensive socialization of investment will prove the only means of securing an approximation to full employment … ’ (Keynes 1973, 377, 378). While it is debatable to what extent Keynesian policies contributed to the consistently high economic growth rates of that period (see Chapter 3), social democrats seized upon Keynesianism, whose status as orthodoxy allowed them to avoid having to choose between mainstream economics and government intervention to raise living standards, expand welfare, and reduce inequality (Scharpf 1991, 23; Padgett and Paterson 1991, 22, 23). According to Plant (2004, 112), Keynesianism became social democrats’ answer to the Marxist critique of their strategy of seeking justice and equality by political means while ignoring the economic power of capitalists (see below).
As we shall see in the chapters that follow, it was the buoyant economic conditions that enabled social democrats some measure of success in the post-war period. Yet, social democrats have often failed to implement their traditional policies in government, and have instead ended up enacting policies beneficial to capital rather than their working class constituents. This (at best) chequered history runs through each of the case studies. As Callaghan (2002, 436) comments, one reason why the post-war period is referred to as a ‘golden age’ is that social democrats’ pre-war record was ‘sufficiently grim’. The most persuasive explanation for social democratic failure has come from the Marxist tradition.

Social Democracy and Revolutionary Marxism

According to Tudor and Tudor (1988, ix), among the outstanding features of politics in the 20th century was ‘the conflict between revolutionary Marxists and non-revolutionary Social Democrats’. Unlike social democrats, Marxists have seen reforms not as ends in themselves but as a necessary step on the road to the ultimate goal of transcending capitalist social relations (see Lenin 1970, 75–78). Social democrats abhor class struggle. In contrast, witness Marx’s (1973, 108) lauding of the ‘struggle of class against class’ as ‘the prime mover of all social progress’.
The division between reformists and revolutionary Marxists was not always so clear. The current association of social democracy with gradual parliamentary reform, Moschonas suggests, is a post-war thing. Earlier social democrats could have been considered ‘orthodox, revisionist, [or] revolutionary’, the latter evidenced by Lenin’s description of himself as a social dem...

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