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The Return of Social Democracy?

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On both sides of the Atlantic, the sirens of social democracy have sounded. In the United Kingdom, it has reappeared in the body of left-leaning politician Jeremy Corbyn’s challenge to the Labour Party leadership. In the United States, it has emerged as democratic socialist Bernie Sanders makes his appearance as a strong contender for the Democratic Party’s presidential candidate. In Canada, the New Democratic Party’s (NDP) Thomas Mulcair holds the lead in the federal elections due on October 19. It is likely that the NDP, which already swept the provincial elections in Alberta, could defeat the Conservatives. Buried languages against income inequality and social fragmentation can be heard once more in the mainstream press. These are traditions that had been cremated in the 1980s. In the rubble of the financial crisis, social democracy has begun to smoulder.

In the U.K., the emergence of Corbyn in the Labour Party leadership contest has set off alarms. Corbyn is an old-style socialist—uncomfortable in the boardroom and glad to be on the streets. He is not forged in the smithy of New Labour, the “third way” of Tony Blair. Indeed, Blair has frontally attacked Corbyn as a throwback to the 1980s. “Jeremy Corbyn doesn’t offer anything new,” Blair wrote. “Those of us who lived through the turmoil of the 80s know every line of this script.”

Corbyn’s script is written in large part by the social democratic tradition—government intervention to deliver public services, an end to muscular military intervention, and higher taxes on the wealthy. Little here sets Corbyn apart from Michael Foot and Tony Benn, both standard-bearers of social democracy in Labour’s past. Corbyn’s rise threatens the Third Way. He wants to recommit Labour to socialism, which is anathema to Blair.

In the U.S., Sanders has once more recovered long-forgotten lineages in the Democratic Party—one not seen on the political circuit since Jesse Jackson’s campaigns of 1984 and 1988 for the Democratic presidential nomination. Sanders has taken hold of the popular sentiment against what the Occupy Movement called the 1 per cent. He routinely uses that kind of imagery to talk about income inequality in the U.S. In a speech in Wisconsin, before over 10,000 people, Sanders said, “The issue of wealth and income inequality, to my mind, is the great moral issue of our time…. There is something profoundly wrong when today, the top one-tenth of 1 per cent own almost as much wealth as the bottom 90 per cent.”

Sanders’ strong push against income inequality has moved his rival for the Democratic ticket, Hillary Clinton, to make her own, less populist gestures. Hillary Clinton has pledged to increase spending for education and infrastructure as an antidote to income inequality. Sanders digs deep into the vault of social democracy—he wants to tax the rich, break up the banks, make college education free, raise the minimum wage and redo trade agreements that helped haemorrhage U.S. industry.

Mulcair’s NDP broke its links with Canadian socialism in the 1990s under the leadership of Audrey McLaughlin. While Audrey McLaughlin adopted the “Third Way” thinking of Tony Blair, she could not replicate his electoral successes. Under her leadership, the NDP shrank as Canada moved rightward. None of the capitulations of the NDP in that period worked to its benefit. The NDP, by validating many conservative principles, delivered the country to the Conservatives. In the midst of the election campaign of 2004, NDP leader Jack Layton swung his party leftward by force of will and in the slough of desperation.

A combination of trade union support and nativist populism allows the NDP to draw voters from a range of backgrounds. There is a great deal that links the prairie populism of the NDP with the New England populism of Sanders. Both are robust critics of Big Money, but neither is able to offer a significantly different path out of the present difficulties. Even if the NDP wins the elections, it will not be able to govern far to the left of the Conservatives. Mulcair’s pledge to increase spending for the police is an early indication of his party’s capitulation.

Neoliberal socialism

One of the problems shared by Corbyn, Sanders and Mulcair is that all three are social democrats in an adverse climate. Social democracy of the early 20th century relied upon the theories of John Maynard Keynes and the liberal socialist traditions of Eduard Bernstein and the Fabian Society. Capitalism, this tradition argued, had softened since its harsh beginnings. There was no possibility of breaking with capitalism—only of producing capitalism with a human face.

What the governments of this tradition were tasked to do was to intervene in the economy through planning and social welfare to ameliorate the unequal outcomes of capitalism. The German Social Democratic Party’s 1959 Godesberg Programme broke with the SPD’s heritage in Marxism. Its new goal was Freiheitlicher Sozialismus (liberal socialism). Three years
letterstopalestineearlier, British Labour Party’s Anthony Crosland’s The Future of Socialism had argued that his party must fight to “equalise the distribution of rewards and privileges so as to diminish the degree of class stratification, the injustices of large inequalities and the collective discontents”. This was the limit of 20th century social democracy. Between 1945 and 1979, there was a broad consensus around this path. Conservative ideas had been largely discredited. In 1971, U.S. President Richard Nixon, a conservative, nonetheless said, “I am now a Keynesian in economics.”

By the late 1970s, the context of social democracy changed dramatically. The rich (and corporations) in North America and the U.K. went on a general strike against taxes. Revenue for social welfare schemes began to dry up.

New theories for balanced budget amendments stayed the hands of governments from being able to borrow for social expenditure.

With finance untethered from state control, governments had an impossible time raising funds. New technologies such as computers, satellites and container ships alongside lower fuel costs and less powerful governments in the Third World allowed firms to break up production across the world. No longer were commodities made in single factories.

This meant that governments lost the power of nationalisation. Faced with increased unemployment and decreased ability for social welfare payments, conservative and Third Way governments expanded security forces for overseas wars and domestic social control. The essence of social democracy withered.

Nothing in the programmes of Corbyn, the NDP and Sanders announces an acknowledgment of this new and adverse context. Their hands are tied by the immense political power accrued by the wealthy to drive policy agendas to their benefit. What Corbyn and Sanders have suggested is that their campaigns are neither about winning governmental power nor about being able to change the policy direction in the U.K. and the U.S. In Iowa, Sanders came out with plain truth: “No matter who is elected to be President,” he said, “that person will not be able to address the enormous problems facing the working families of our country.” Why is this so? “The power of corporate America, the power of Wall Street, the power of campaign donors is so great,” said Sanders, “that no President alone can stand up to them. That is the truth. It is not just about electing Bernie Sanders for President. It is about creating a grass-roots political movement in this country.” Much the same kind of sentiment has come from Corbyn, a movement man more than a government man.

Attracting the dispossessed

Corbyn, Sanders and Mulcair have attracted the dispossessed in much the same way as Syriza and Podemos drew from the excluded of southern Europe. One problem with Corbyn’s run in the Labour Party and Sanders’ run in the Democratic Party is that they are also drawing energy into political formations that are committed to the Third Way, to free-market liberalism. Corbyn’s anti-austerity agenda has drawn back voters in Scotland who had given their votes to the genuinely anti-austerity Scottish National Party.

Sanders is drawing voters from among the catchment area of the Green Party. There is little expectation that either campaign will be able to transform its own parties. On the other hand, the landscape in the U.S. and the U.K. is so bleak that people who are disaffected with the status quo have few other places to turn toward. Small left-wing groups have been unable to break out of their decades-long isolation, and issue-based mobilisation (against police brutality or for immigrant rights) has been unable to shape a mass political force.

In such a benighted political environment, it is hard to begrudge the return of these standards of social democracy. They recognize that their policy slates are anachronistic as long as the propertied have a monopoly over the political and cultural process.

This column originally appeared in Frontline (India).

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Vijay Prashad’s most recent book is No Free Left: The Futures of Indian Communism (New Delhi: LeftWord Books, 2015).

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