Social Democratic Party Policies in Contemporary Europe

Giuliano Bonoli, Martin Powell, Giuliano Bonoli, Martin Powell

• Publisher: Taylor & Francis
• Year: 2004
• eBook ISBN: 9781134408900
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Democracy
• Index: Politics & International Relations

The end of the twentieth century saw an unprecedented coincidence of electoral success for social democratic parties in western Europe leading to intensive discussion on the future of this new European left. The debates often centred on the notion of a 'Third way' and generated major expectations for policy change among social democratic politicians and voters. The authors collected here examine the recent social and employment policies of these progressive parties, looking for change in the guiding principles of policy and on actual policy decisions. They show how the maxims of demand management and egalitarianism have been replaced by social investment and equality of opportunity and demonstrate the full extent of convergence on policies such as employment maximization, the containment of social expenditure and a shift towards a social investment welfare state.

1 Social Democracy in Europe
Renewal or retreat?

Martin Powell

Introduction

Much has been written on the recent fortunes of Social Democracy. One strand is concerned with electoral results. After varying lengths of time in opposition, Social Democratic parties returned to government in the late 1990s. Blair and Schröder (1999: 1) open their text on the Third Way by stating that ‘Social democrats are in government in almost all the countries of the Union’. As an editorial in the British Daily Telegraph (11 June 2002: 19) put it, in 1997 when New Labour was still new, the Left was ascendant everywhere, with socialists or Social Democrats in government in thirteen and a half of the 15 EU states (the exception was Spain, with the half in Ireland whose parties do not fit the classic Left–Right definitions). Dyson (1999: 195) claims that following the German election of 1998 West European Social Democracy found itself in a uniquely advantageous position. For the first time in the history of the European Union social-democratic-led governments were in power in Bonn, London and Paris; the Party of European Socialists (see Aust, Chapter 10, this volume) was represented in the leadership of 11 of the 15 governments. By August 2000, according to Green-Pedersen et al. (2001), they were in government in 10 out of 15 EU nations. This electoral dominance was termed by Cuperus and Kandel (1998) ‘the magical return of Social Democracy’. However, as we entered the new millennium the magic seemed to be wearing off (see Bonoli, Chapter 11, this volume). The left lost power in countries such as Denmark, Italy, Portugal, Austria, the Netherlands and France. For a time, it appeared that only Britain was immune to the return of the right, where in 2001 New Labour secured another landslide electoral victory. More recently, Social Democratic governments have been (just) re-elected in Sweden and Germany, and the Dutch PvdA regained much of the support they lost some eight months earlier in an Election of January 2003. On the other hand, in the same month the German SDP lost regional elections and so the Christian Democrats now have the power to veto SDP legislation in the Bundersrat. The electoral prospects for Social Democracy, then, are very uncertain.

However, at the height of this parliamentary dominance, electoral optimism coexisted with pessimism. Critics argued that Social Democrats entered office only by moving to the right: ‘Social Democratic governments’ were, in effect, no longer Social Democratic. The main problem here is the seemingly endless debate about what constitutes ‘Social Democracy’. For roughly a century, Social Democratic parties in different countries have shown marked variations, and accusations of moves to the right as old as the parties themselves (e.g. Berman 1998; Pierson 2001). Even the chronology of the ‘golden age of Social Democracy’ is not fully clear (see Hicks 1999: 110, fn). In short, the overarching question to be explored in this book concerns not Social Democratic governments per se, but Social Democratic party policies in Europe.

Recent debate on the future of Social Democracy is characterised by a great variety of positions. On the other hand, Social Democracy is in retreat or has ended (e.g. Callaghan 2000; Thomson 2000; Glyn 2001). As Pierson (2001: 1) summarises, there is a widespread consent that traditional Social Democracy is exhausted. On the other hand, other writers point to the ‘the magical return of Social Democracy’ (Cuperus and Kandel 1998) and ‘new Social Democracy’ (Gamble and Wright 1999). However, they are clear that ‘new’ Social Democracy is not the same as its ‘golden age’ version between the 1940s and the 1970s. In short, Social Democracy has been transformed (Kitschelt 1994). The obvious – but unresolved – issue is to what extent Social Democracy can be transformed before it ceases to be Social Democracy? In other words, what are the limits to Social Democracy?

Although there is a vast literature on Social Democratic renewal, it suffers from a number of problems and gaps. The first is that much of this literature was written in the period when Social Democratic parties were in opposition or newly elected to office. There is much less material – as yet – on the policies of Social Democratic parties in office. The second is that while there is general agreement that Social Democracy has changed in recent years, the parameters of change are less clear. Social democracy has often been vaguely defined, and rarely operationalised. This means that it is difficult to place changes in context. The different possible changes include variation from the ‘ideal type’; variation from ‘old’ Social Democratic parties in office; convergence with other parties; and convergence between countries. What are the important variables? By how much have they changed? How far can they change before they break the limits of Social Democracy? The third, and linked, problem is that much of literature is at a fairly high level of abstraction. Some of it is concerned with causes and strategies (e.g. vote and office seeking). When there is a focus on policies, it is generally on economic (e.g. end of Keynesianism) rather than social policies. However, the ‘fine print’ of policy is important. For example, many analyses focus on ‘supply side policies’, but these may contain a large range (e.g. Boix 1998). Moreover, many Social Democratic parties in the past and present stress active labour market policy, but this may also see a large variation (Lodemel and Trickey 2000). There has also been a focus on certain countries such as the Netherlands, Germany, Sweden and the UK and on certain broad policy areas such as social security. Less attention has been paid to countries such as Austria and Belgium, and more specific policy areas such as pensions.

The debate on new Social Democracy is inextricably linked with the debate on the ‘Third Way’ (e.g. White 2001). This is associated with the writings of Giddens (1998, 2000, 2001, 2002) and the administrations of Clinton and Blair in the USA and the UK respectively. Proponents of the Third Way make two broad claims. First, the Third Way is a renewed or modernised Social Democracy: it is a left of centre project (Blair 1998, 2001; Giddens 1998, 2000, 2001, 2002). Second, the Third Way is a global model (Blair 2001; Giddens 2001, 2002). According to Blair (1998: 2):

the left is not returning to the old politics of isolation, nationalisation, bureaucracy and ‘tax and spend’. . . . Across Europe, Social Democratic governments are pioneering welfare state reform, tackling social exclusion, engaging business in new partnerships, and establishing a stable economic basis for long-term stability and investment.

Giddens (2001: 1–2) defines the Third Way as a generic series of endeavours, common to the majority of left parties and thinkers in Europe and elsewhere, to restructure leftish doctrines. In this wider sense, Giddens stresses that whether or not one uses ‘Third Way’ does not matter: ‘modernizing Social Democracy’ or ‘the modernizing left’ (or perhaps, Tonyism – after Blair and Giddens) can be used instead. The Third Way is not to be identified solely with the outlook and policies of the New Democrats, or indeed any other specific party, but is a broad ideological stream with several tributaries flowing into it. The changes made by left parties in Scandinavia, the Netherlands, France or Italy since the late 1980s are as much part of Third Way politics as those developed in Anglo-Saxon countries (Giddens 2001: 2). Interestingly, this is similar to Jospin’s earlier view before he rejected the term: ‘I believe that the Third Way is the national form that the effort to reshape theory and policy has taken in the UK, the same project as that has been embarked upon by all the socialist and Social Democratic parties in Europe ( Jospin 1999: 4–5). According to Merkel (2001: 51), at the end of the 20th century the debate about the Third Way has become the most important reform discourse in the European party landscape. He claims that there are at least four different Third Way models in Europe (but see Callinicos 2001: 9). Etzioni (2000: 13–14) sees the countries of Continental Europe, the UK and the USA all as ‘different Third Way societies’. While societies such as France and Italy drive more in the left lane with others such as the USA more on the right, ‘the road they all travel is fully distinct from the one charted by totalitarian and libertarian approaches.’ Moreover, ‘while the various Third Way societies differ in their specific synthesis of the ways of the state and the market, they are pulling closer to one another.’ Callinicos (2001: 1) writes that the Third Way has set the agenda for the moderate left on a European, and indeed a global, scale.

Both claims have been criticised. First, many critics argue that the Third Way has more in common with neoliberalism than Social Democracy (e.g. Hay 1999; Thomson 2000). Navarro (1999) writes that the Third Way is closer to Christian Democracy than Social Democracy (cf. Deacon 2000). Second, it is seen as an Anglo-Saxon model, and not exportable to Continental Europe (see Bonoli and Powell 2002; Powell and Barrientos, 2003).

The focus of this book is not on the Anglo-Saxon Third Way per se. However, it is a useful backcloth for two main reasons. First, the debate about the Third Way is relevant for new Social Democracy. The problems of defining the Third Way (e.g. The Economist 1998; White 1998; Powell 2000; Callinicos 2001; Pierson 2001; Powell and Barrientos 2003; but see Etzioni 2000: 13) parallel those of new Social Democracy (see below). As Clift (2001: 72) argues, it needs more rigourous definition before firm conclusions can be drawn about its compatibility with contemporary European Social Democracy. Second, the concept of a Third Way or trichotomy (rather than the Third Way) is useful to analyse whether new Social Democracy is different from the ‘first’ way of old Social Democracy and the ‘second’ way of neoliberalism. In the words of Przeworski (2001), how many ways can be third?

Our main aim in this book is to address the problems and fill the gaps identified above. In other words, a focus on Social Democratic party politics in Europe will complement existing studies. We examine policies for a broad range of countries and policy areas to critically examine welfare state trajectories in Europe. The welfare state has often been considered to be the jewel in the crown of Social Democracy. For Green-Pedersen et al. (2001), it is its heartland. However, the specification of the Social Democratic welfare state remains problematic (see below).

The remainder of this chapter provides a broad context for the contributions that follow. First, the rationale for the current study is justified by outlining the problems and gaps of existing studies. Second, a broad framework of analysis differentiates discourse, values, policy goals and policy mechanisms.

The long fall and rise of Social Democracy

As Pierson (2001: 20) notes, it is often the ‘high water mark’ of the ‘golden age’ of Social Democracy that critics have most frequently in mind when they think of Social Democracy’s decline and fall (p. 20; cf. Callaghan 2000: 6). However, ‘Social Democracy’ has varied over time and space. Pierson (2001) begins his chronological discussion in the nineteenth century, viewing Social Democracy as a label that could be attached to the claims of both social ownership and democratisation. He progresses through Bernstein’s revision of Marx at the turn of the twentieth century to ‘classical’ Social Democracy’ of the ‘golden age’ after the Second World War. Other recent accounts have extended this chronology. For example, Stammers (2001) traces the evolution from traditional through modernising to globalising Social Democracy. Similar discussions of the ‘global age’ are given in Garrett (1998), Krieger (1999) and Tam (2001), but see Berman (1998) and Hicks (1999).

Much has been written about changes in Social Democracy since the end of the ‘golden age’ (e.g. Padgett and Paterson 1991; Piven 1991; Gillespie and Patterson 1993; Bell and Shaw 1994; Ladrech and Marliere 1998; Callaghan 2000; Pierson 2001). Much of this literature is pessimistic, focusing on problems, retreat, decline and periods of political opposition. This culminates in terms such as ‘after Social Democracy’ and ‘the death of Social Democracy’ (see Pierson 2001). However, a more optimistic literature (e.g. Boix 1998; Garrett 1998) suggests that partisan differences may still exist. Writing after the electoral successes of the late 1990s, Cuperus and Kandel (1998) write of the ‘magical return of Social Democracy’. Critics argue that ‘Social Democratic parties’ have magically returned only by using a wand to make Social Democracy disappear (e.g. Krieger 1999; Hay 1999; Thomson 2000). This clearly relates to the problem of defining the limits of Social Democracy (below), but the point to note here is that much of the literature is anachronistic in that it could not focus on the record of Social Democratic parties in office.

The limits of Social Democracy

Pierson (2001: 19) argues that many existing typifications do very limited justice to the diversity and ambiguity of the Social Democratic tradition (cf. Berman 1998; Cuperus and Kandel 1998; Hicks 1999; Przeworski 2001). Indeed, it is really quite unclear when and what Social Democracy is or was. In practice Social Democratic parties and policies in few countries fitted their ‘textbook’ or ‘ideal type’ models. At times, Social Democratic strategies were pursued by governments that would never call themselves Social Democratic, and Social Democratic governments pursued non-Social Democratic programmes. This section uses two recent frameworks to analyse the limits of Social Democracy.

The first approach is given by Krieger (1999: ch 1) who aims to locate British Social Democracy in theoretical and comparative perspective. He presents three models of European Social Democracy: the institutional– collectivist model; analytical Social Democracy (Przeworki 1985) and the strategic adjustment model (Kitschelt 1994). Although they add important dimensions in some respects, Krieger finds major problems with the last two models. With narrow and fixed definitions of class and conceptions of party organisation, analytical Social Democracy is poorly equipped to ask important contemporary questions. On the other hand, the strategic adjustment model is too wide. There is a disconcerting vagueness in what might be called the political morality of Social Democracy. Strategic considerations take precedence over the traditional core egalitarian or redistributive values of parliamentary socialism. The strategic adjustment approach makes it very difficult to analyse Social Democracy in all its dimensions, as the term assumes a nominalism being applied de facto to any party that carries a labour, so...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Illustrations
• Contributors
• Series Editor’s Preface
• Acknowledgements
• 1. Social Democracy In Europe: Renewal or Retreat?
• 2. Policy Changes of European Social Democrats, 1945–98
• 3. Models of Citizenship and Social Democratic Policies
• 4. Social Policy In Belgium and the Netherlands: Third Way or Not?
• 5. The Portuguese Socialists and the Third Way
• 6. Turning Ideas Into Policies: Implementing Modern Social Democratic Thinking In Germany’s Pension Policy
• 7. The Social and Employment Policies of the Jospin Government
• 8. The Third Way In Welfare State Reform?: Social Democratic Pension Politics In Germany and Sweden
• 9. Why Do Social Democratic Parties Change Employment Policy Positions?: A Comparison of Austria, Germany and the United Kingdom
• 10. From ‘Eurokeynesianism’ to the ‘Third Way’: The Party of European Socialists (PES) and European Employment Policies
• 11. Social Democratic Party Policies In Europe: Towards a Third Way?