It has been a long time since social democracy was prevalent in mainstream politics. Its heyday was in the post-war period and lasted until the 1970s. Then even parties of the right had a word to say for welfare and the dangers of inequality. But neo-liberalism has been dominant since the 1980s. Social democrats have been out of power across Europe for a while and their arguments marginalised. Deregulation and the expansion of the private sector and markets have led the way. Now austerity is being used as a justification for a particularly harsh version of neo-liberalism that attacks public services.
Crisis is an overused word, but there is a crisis in Europe. There are serious debt and recessionary problems across the continent. The legitimacy of the European Union has been called into question, and social stability and governance has been under threat in Greece and in question elsewhere. Social democratic beliefs in equality, welfare and regulation have been pushed aside by political forces that go against these, to the extent that their embeddedness in society and mainstream politics has been overturned. I want to focus on the ideas of social democracy now, after the financial crisis, and in the context of the crises in Europe and of social democracy. When social democracy looks at itself in this context, what should its identity be and where should it be going? It could turn these crises into an opportunity, where it both rediscovers and rethinks itself.
The meaning of social democracy
Social democracy is about a compromise between capitalism and socialism. This is different from democratic socialism, which is for a gradual transformation to socialism using democratic means. There have been people in social democratic parties who want to do what they can within capitalism but are also not averse to a gradual democratic shift to socialism. But social democracy is mainly about accepting capitalism and building socialist institutions within it. This is also different from revolutionary socialism, which aims for a transformation to socialism outside the liberal democratic process, through revolutionary means. This definition of social democracy includes radicals like Hugo Chavez who despite his rhetoric, and probably belief, in twenty-first century socialism, was effectively working to create more public control of the economy and help for the poor within a capitalist society.
In practice socialist institutions under capitalism have involved the welfare state, the attempt to build greater equality, and the collective provision of what markets won't cater for adequately. This is in areas such as support for the poor and disadvantaged, education, the arts, and workers' rights. Social democrats have also been keen on using economic stimulus to boost the economy, although Keynesianism has not been the exclusive preserve of the centre-left.
Tony Judt in his book Ill Fares the Land echoes Ralf Dahrendorf in seeing the welfare state as one of the great achievements of human history, giving people life chances no previous generations had. For cohorts after the Second World War, free higher education and universal health care, support during unemployment, sickness, or poverty, together with post-war economic growth, provided unprecedented security and opportunities. But the welfare state has been a one or two generation achievement and despite its huge advances for humanity there has been an astonishing rush to dismantle it, with the complicity of social democrats themselves (Judt, 2010, 78, 221, 224).
In fact, social democrats are now apologetic about these great institutions set up by their predecessors. In and around the top tiers of the British Labour Party the talk is that the welfare state is inefficient and doesn't provide choice. It should be reduced in size, and opened up to private providers and the market. Such principles are applied to welfare benefits, the health service, and education.
New Labour said that we should be less dogmatic about the boundaries between the private and the public. It was argued that this is a matter of means and ends. The main end is to deliver good quality welfare, health, and education. But we should not confuse the goal of public services with a dogma about these being delivered via a state-planned public sector.
However, the means used to deliver social democratic ends affect the ends. If the private sector delivers public services on a marketised basis, this allows drivers of profit-making to dilute the values of public services, putting at risk the public good that social democratic institutions have been oriented towards. Instead of public services being geared to delivering the public good, the content of them becomes changed to what delivers the best possible profit for the private providers.
In the British Labour Party the compromise between socialism and capitalism has been abandoned, with Labour outrightly favouring capitalism, and quite a neo-liberal version of it, with a human face. Labour is not purely neo-liberal and the same as the Conservative Party. It favours a more humane version of capitalism than the Conservatives: less cuts, less fast and a greater emphasis on measures to protect the poor, such as a living wage, tax credits and recent proposals for energy price freezes. But Labour does not favour advancing the role of socialist institutions within capitalism. In fact it is on the side of rolling them back.
New Labour started the privatisation of higher education when it introduced student-paid fees, and promoted the marketisation of the health service. Tony Blair preached the deregulation of labour to other European leaders, and Gordon Brown the deregulation of finance. But this shift to a liberal form of capitalism and the marketisation of public services loses what makes social democracy distinctive and leaves the argument for a social alternative with populist parties and social movements.
In the 1960s and 1970s the New Left of social movements and theorists like Herbert Marcuse criticised social democracy and the welfare state for libertarian reasons, for being paternalistic, bureaucratic, and undermining individualism and freedom. But it is today's inheritors of the 1960s New Left tradition, the bottom-up and plural student and protest movements, who argue for the welfare state. The context has changed and they see the loss of the rights, security, and life chances the previous generation had. They are protesting for the form of the welfare state that social democrats are retreating from.
These changes in social democracy are not new. In...