Social democratic values need rethinking

Sat, Aug 14, 2010, 01:00

WORLD VIEW:The left remains generally rudderless in spite of the spectacular failure of neoliberalism, writes PAUL GILLESPIE

‘SOCIAL DEMOCRACY, in one form or another, is the prose of contemporary European politics.” These words of the historian Tony Judt, who died last week of a body crippling illness aged 62, are taken from a brilliant lecture he gave in New York last year before he was altogether incapacitated. They are a fitting way to examine one of the great puzzles of the contemporary world: why has the European left performed so pathetically when capitalism is in crisis, neoliberalism discredited, unrestrained financial markets blamed and working people are footing the bill for recovery?

Judt’s many fine works on 20th-century European history and his long residence in New York eminently qualified him to suggest answers. It is striking how much it has become not only a European question but a transatlantic one politically and intellectually under the Obama administration, concerning not only whether to stimulate or cut out of the recession, but how best to promote and protect social welfare, link states and markets, and extend democracy – the three great social democratic concerns.

Judt reminded his audience that the social security many in the US aspire to is available in Austria, the Netherlands and Scandinavian countries – at a price in taxation. Recalling how so many theorists influencing current debates came out of Europe’s second World War crisis, he argued that social democrats had to rethink their purposes after the cold war’s end deprived them of their democratic credentials on the left.

Confronted with privatisation, growing inequalities and insecurity the social side of the equation requires fresh thinking and radically defensive action. In Europe, he believed, there are very few politicians “who would dissent from core social democratic assumptions about the duties of the state, however much they might differ as to their scope. Consequently, social democrats in today’s Europe have nothing distinctive to offer.”

Merkel, Sarkozy and Cameron have won elections based on such a consensus. But confronted with these trends “social democrats, characteristically modest in style and ambition, need to speak more assertively of past gains” in order to prevent them being eroded and destroyed, when it is “the right that has inherited the ambitious modernist urge to destroy and innovate in the name of a universal project”.

These are good benchmarks for judging contemporary social democracy. It suffers from decades of adapting to the very forces which brought on the crisis. Ideologically its leaders bought into the neoliberal, efficient market consensus, promoting the deregulation which exploded two years ago. “Third way” policies eroded the distinctions between left and right, as social democratic parties became more geared to consensual governing than representing alternative futures. Their links to the social classes, trade unions and other blocs supporting them were weakened without finding new social bases.

As a result they lost their ability to fight defensive battles against the new insecurity or offensive political and intellectual ones for an alternative future. Liberal, green or radical left parties gained advantage, but the resulting fragmentation on the left throughout Europe has given easy victories to conservative parties in the European Parliament elections and a string of contests in larger and smaller EU member states.

Ireland’s last election in 2007 illustrates the case, even if the Labour Party here now displays untypical political brio – just as debates between left- and right-wing economists on the Tasc and Irish Economy websites about cuts or stimulus seem more lively than elsewhere. But then we are in a deeper hole. In the US similar trends afflict the governing Democrats, as Obama’s policies disappoint the new social democratic aspirations of its middle class.

The current centre-right majority in Europe amply reflects this political configuration. So does the political debate on responding to the economic crisis at European level. Social democrats have classically navigated between the several varieties of capitalism available in Europe by emphasising the collective merits of social protection and state regulation, even as they acknowledge that Christian Democrats and liberals can also claim their ownership.

They have been slower to translate that into coherent policies at a European level to deal with the eurozone crisis. The €750 billion financial stability fund agreed in May is a huge pragmatic step towards greater economic governance. But we do not hear any common social democratic case for it to be supplemented by a bigger EU budget, Eurobond issues, financial transaction taxes, tighter financial regulation or more macroeconomic balance between surplus and deficit states. As a result voters may well conclude that a deflationary spiral of cuts typifies EU policy-making rather than its current right-wing agenda.

George Papandreou is an exceptional voice, coming from the inferno of Greek fiscal consolidation. Greek prime minister and chairman of the Socialist International, he called in an interview this week for a socialism that “above all ensures that democracy is never subordinated to markets” and a “fair, efficient system of economic governance that balances the need for sovereignty with the complex demands of monetary union in a globalised economy”. That requires a new internationalism, another old value never more needed than in this uncertain global age.