Social democracy in the age of austerity and resistance: the radical potential of democratising capital.
| Author | Guinan, Joe |
| Position | Features |
Social democracy at a crossroads
Historians joke that, no matter what the period, the middle class is always rising. In the same vein, social democracy seems perpetually at a crossroads. This may not be surprising, given the revisionist origins and protean political tendencies of a tradition whose leadership has always been prepared to hedge and trim and accommodate to the prevailing political winds. But today, more than a hundred years after the first of the parties affiliated to the Second International won a plurality in a parliamentary election (in Finland in 1907; Anderson, 1992, 307), social democracy may finally be running out of rope. All the main European social democratic parties are facing a crisis, registering at long last endlessly postponed questions about their fundamental purpose and programme. The strategic choices they make now and in the next few years could determine whether social democracy survives as the principal political force on the left or finally gives up the ghost, expiring not with a bang but a whimper and with scarcely a mourner at the funeral.
As with the last great crisis of social democracy in the 1970s, today's stark choices are being posed as the result of a major economic shift within capitalism: the deep disruption of capital accumulation as a consequence of the crisis in global financial markets unleashed in 2008. With the end of the recent long boom - or rather, long bubble, given that profits were extracted through serial asset inflations in 'unlikely domains' such as subprime mortgages via 'unlikely instruments' such as credit-default swaps (Sassen, 2011, 21) - social democrats have been dealt a tremendous double whammy. On the one hand, their decade-long strategy of full accommodation to neo-liberalism in order to skim off the surplus for ameliorative social spending has collapsed with the end of the growth upon which it depended. On the other, they have fallen victim to a breathtaking act of political jujitsu. Contrary to many expectations, the crisis has not thus far unseated neo-liberalism as the reigning economic paradigm, and with this 'strange non-death' (Crouch, 2011) financiers and the political right have neatly turned the tables on the centre-left. The big banks, having caused the crisis in the first place and led governments to borrow vast sums to come to their aid, have successfully redefined the resulting fiscal deficits as entailing cuts to public spending and social protection. Similarly, sovereign debt crises are painted as cause rather than effect of the downturn. Social democrats have thus been cut off from the exits, unable to escape into the soft neo-Keynesianism that is their more progressive reflex.
Stuck in this quandary, social democracy is unlikely to be afforded any relief by the markets. Rather than giving way to a resumption of growth, the Great Recession shows every sign of turning instead into a Long Slump. The latest economic figures reveal a poor outlook for Europe, with the eurozone in double-dip recession and the euro-crisis staggering toward an increasingly inevitable terminus. Meanwhile, Chinese growth is slowing, and the sluggish American recovery remains beset with difficulties real and imagined, with a divided Washington fully capable of administering self-inflicted wounds. Nor is a return to pre-crisis global economic relations on the cards. The increasingly high-handed lectures being delivered to Europeans by sovereign wealth fund managers from emerging economies suggest the acceleration of a transition already well underway before the collapse of Lehman Brothers - a shift away from Europe in the underlying balance of global economic power (Calhoun and Derluguian, 2011, 7).
Nature, too, has some nasty surprises in store for us: 'The repo girl is at the door' (Davis, 2012). As a result of global warming that has already occurred it is now too late to avoid 'a cascade of local and regional "natural" disasters in the medium term' (Barnes and Gilman, 2011, 43). Price shocks, supply disruptions, dislocations, the rising costs of urban coastal infrastructure and remediation efforts: Hurricane Sandy - a direct hit on the world's financial and media capital at an estimated cost of $50 billion and counting - is the shape of things to come. At the same time, a $20 trillion bubble of 'unburnable carbon' inside the global financial system (Carbon Tracker Initiative, 2012) will require - if the planet is to be saved - deliberate capital destruction on a scale roughly twice that of the end of slavery (Williamson and Cain, 2011).
Even when - if - growth resumes, it will not deliver on the promises with which it is being invested. A modelling exercise for the Resolution Foundation by the Institute for Employment Research and the Institute for Fiscal Studies finds that on the basis of annual average UK growth of 2.5 per cent from 2015-2020 - an optimistic scenario - and no further cuts in public spending, living standards will fall for low and middle income house-holds by between 3 and 15 per cent (Brewer et al., 2012). Only the rich will escape this ravening maw of austerity. We may not quite be facing the 'end of growth' (Heinberg, 2011) altogether, but it would be a foolhardy politics that retained any strategy relying upon a return, even in the medium term, to anything approaching normality or the status quo ante.
It is in these circumstances that the political battle lines of the coming era are being drawn. For all the difficulties, the crisis has at least smashed the false separation of politics from the market that has been a precondition of neo-liberal theory. As governments move to close schools, pare back local authorities, cut public spending and reduce wages, they are conjuring up a series of class struggles that are already playing out in the streets. Continuing through this tunnel of pain, the hope for the left should be to emerge from the other end with a new political economy and a system design truly capable of sustaining democracy, equality and community, while meeting head on the challenges of concentrated ownership and power and ecological meltdown. The question is whether social democracy will play its part in the development of these solutions or whether it will end up being an obstacle on the road to systemic change.
Morbid symptoms
How have Europe's social democrats responded to this conjuncture? It has to be said that the early signs are not propitious. There are 'morbid symptoms' aplenty, of precisely the kind Gramsci ascribed to a crisis interregnum in which 'the old is dying and the new cannot be born' (Gramsci, 1971, 276). To begin with, there has been a near-total lack of solidarity among the parties of the Socialist International, whether in government or opposition, as they have fallen in with the needs of their own national capitalisms, narrowly defined. The mask of the much vaunted European social model - offered just a few short years ago as a 'paragon' for the rest of humanity - has slipped badly, revealing the true features of northern capital that was behind it all along:
Once crisis struck, cohesion in the eurozone could only come, not from social expenditure, but political dictation - the enforcement by Germany, at the head of a bloc of smaller northern states, of draconian austerity programmes, unthinkable for its own citizens, on the southern periphery, no longer able to recover competitivity by devaluation. (Anderson, 2012, 56-7) The politics of austerity is proving as disruptive as the economics. To the 'zombie households, companies and banks' of the post-crisis landscape (Giles, 2012) must now be added 'zombie governments'. A horror show of decrepit political formations not seen since the inter-war years has been exhumed from the crypt and installed across Europe: national governments, externally-imposed technocrats, even - in Greece - a troika-dictated regimen 'reminiscent of Austria in 1922, when a High Commissioner was posted to Vienna by the Entente - under League of Nations colours - to run the economy to its satisfaction' (Anderson, 2012, 57). Unsurprisingly, turnouts at elections - those dark nights in which all cats are grey - are falling, but this has not prevented an anti -incumbency tide sweeping over Europe to which governing parties in country after...
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