Anyone who has followed the current economic and financial crisis in Europe knows that social democratic governments and parties have consistently lined up on the side of the banks and the rich in the ongoing political conflict. The policies they have implemented while in government have been nearly identical to those advanced by the traditional right-wing parties and governments. In several counties, the social democrats have formed political alliances to govern with the right wing parties. What is going on here?
It is hard to get answers from social democrats who hold office. The leaders of the larger trade unions make excuses or remain silent. Those who have traditionally voted for these parties, or taken out memberships, are mystified. But you can find some answers in a new book edited by Bryan Evans and Ingo Schmidt: Social Democracy After the Cold War.
The Third Way — revised
I can remember when Sweden was referred to as the “Third Way” — the alternative to the Anglo-American version of unfettered and rapacious capitalism and the totalitarian version of state socialism that was the Soviet Union. Sweden was a deeply democratic country with the great majority of workers in trade unions, a solid base of democratic social organizations, where the Social Democratic Workers Party formed the government between 1932 and 1976. With a progressive system of taxation, they had created a society with a comprehensive, universal welfare state that had all but eliminated poverty.
Now the Third Way is identified with the neoliberal package of policies implemented by the same social democratic parties. This includes greatly reduced taxes on corporations and the rich, major cuts to universal social programs, privatization of state-owned enterprises, deregulation of the economy and the backing of the “free trade” treaties as advocated by the largest corporations and financial institutions. U.S. President Bill Clinton and British Prime Minister Tony Blair led the way in deregulating the financial sector and refusing to regulate the new derivatives markets, directly leading to the financial collapse and the Great Recession which began in 2008.
Social democratic parties as we know them emerged after 1919 with a split in the broad working class movement. Parties which backed the new Soviet Union formed the Third International Workingmen’s Association. They wanted to replace the capitalist system with a government of the working class, implementing a socialist alternative. The remaining parties stayed in the revised Second International. While some of these parties hoped to create a socialist society through the electoral route, most sought simply to reform the system, to create a “capitalism with a human face.”
The high point for this reformist social democratic vision was the period between 1945 and 1975. The world economy was booming, workers were expanding the trade union movement, and governments were introducing the new welfare state. This boom period ended when Paul Volker and the central bankers raised interest rates and created the major world recession of 1980-2. The election of Margaret Thatcher’s government in 1979 and Ronald Reagan’s presidency in 1980 turned the tide, leading an all out war against the Swedish Third Way.
The major shift in social democracy
The essays in this book cover the experiences of social democratic parties and governments in Canada, the United States, the United Kingdom, Australia, Sweden and Germany. One of the conclusions is that the moderate reform of capitalism that social democracy has implemented while in government is only possible when there are good economic times. When there is economic stagnation, and corporate profits start to fall, the capitalists of all nations join together and launch a counter attack on workers and the poor. The shift in social democratic governments to embrace the neoliberal agenda began in Sweden in 1982 and New Zealand in 1984.
The authors point out that the social democrats have been unable to create an alternative to the current program of austerity which focuses on increasing the rate of profit for the corporations while implementing the package of regressive policies which fall almost exclusively on those on wages and salaries and the poor. Part of the problem is that the social democrats have never produced a serious analysis of how capitalism works. Kjell Ostberg, writing on the experience in Sweden, argues that “social democracy has ceased to function as a creator of ideas.”
The bankruptcy of the leadership of social democracy was demonstrated in their commitment to “free trade” and globalization. In this major battle, which began in the late 1980s, the social democratic parties stood with the capitalist class and its allies and against the trade unions and the popular organizations, the core of their supporters. If this was not bad enough, they also stood solidly behind the different U.S. administrations in their more recent imperial wars, again in the face of majority popular opposition. In the massive world movement against the U.S. war on Iraq in 2003, they were silent if not in support.
The transformation of social democracy
Most of the social democratic parties in the advanced industrialized countries were created by the trade union movement. In Canada the CCF-NDP was formed by a broad populist movement on the left. The authors report that there have been common developments in all these countries which have contributed to their transformation.
1. The professionalization of the party. The leadership of the party and the parliamentary caucus run the party from the top down. They rely on professionals and media experts to set the party’s direction. The party membership and supporters have been marginalized.
2. The complete shift to electoralism, with the conviction that politics is debate and voting in the legislature. There is hostility towards extra-parliamentary politics. This was most evident in Canada and the United States in the battle over the free trade agreements, where the opposition was led by the trade unions and the popular organizations which used to form the base of the social democratic movement. In the U.S., Bill Clinton actively promoted the free trade agenda; in Canada, in the 1988 “free trade election,” the New Democratic Party under Ed Broadbent stood down on the issue.
3. There has been a conscious move to separate the professional party from its historic base in the trade unions and the working class. The industrial working class has declined as this work has shifted to Asia, but neither the parties nor the trade unions have been able to mobilize the new working class.
4. The parties have become Stalinist, permitting no open public debate on important issues. The leader sets the policies and supporters are expected to toe the line. When organized dissent emerges, it is contained or expelled.
5. There is the development of the “nobility” of the party leadership, with key members, and the elected caucus, representing career party loyalists. Few representatives from the working class are allowed to win electoral nominations, and few are elected. The political orientation of this leadership is liberal rather than democratic.
The results have been the same in all the industrialized countries. Party membership has fallen dramatically. Voter turnout has dropped significantly, especially in working class and poor areas. New parties of the socialist left, the Greens and the neo-fascist right are increasing their support in areas which were historically the reserve of the social democrats.
In the present economic and financial crisis, we are seeing the collapse of the social democratic parties in Europe. They are unable to develop a critique of globalized capitalism and advance a program and vision which is different from the free market, free trade right. Since they are no longer a movement, how can they bring their former supporters back into the party? How can they convince the 40 to 50 per cent who no longer vote that it is worth going to the polls? Is there any future for social democracy?—John Warnock
John Warnock is a Regina-based writer, his latest book is Creating a Failed State: The US and Canada in Afghanistan (Halifax: Fernwood Publishing, 2008). This review first appeared on his blog at johnwarnock.ca.