Changing the scene

Eunice Goes

The rise of populism across Europe has its roots in the approach taken by parties of the centre-left for years. European social democracy must rediscover the will to renew itself, writes Eunice Goes

If there were still any doubts, the results of the Copeland by-election dispelled them. The Labour party is going through an existential crisis. Its causes are varied, but the woes of European social democracy have been invoked as a key factor in the crisis. Guardian commentator John Harris, for example, has claimed that Labour’s crisis is ‘structural’ – that is, it is not merely caused by the ineffective leadership of Jeremy Corbyn but it is part of a wider phenomenon that is affecting the electoral fortunes of social democratic parties across Europe.

Harris is correct in his suggestion that Labour’s troubles are partly structural, however the party’s own decisions and actions play a role too. The political scientist Sheri Berman argued in The Primacy of Politics, the most significant obstacles to a social democratic revival ‘turn out to come not from structural or environmental factors, nor from the vibrancy of alternative ideological approaches but from   the ideological fallacies and a loss of will on the part of the left itself’. If Berman is correct, the renewal of social democracy largely depends on the will of the social democratic players themselves.

Crisis and revisionism

To understand the current crisis, it is important to bear in mind that the history of social democracy is defined by crisis, renewal and a fair amount of ideological revisionism. The fact is, since their emergence in the late 19th century European socialist parties had to change in order to have the chance to transform politics.

This realisation led to a big schism in the socialist movement dominated in its early days by its Marxist faction. At the turn of the 20th century, democratic socialists like Jean Jaurès rejected the idea of class struggle and argued instead that “great social changes that are called revolutions” could only happen if socialists were able to mobilise the support of a wide coalition of voters. Likewise, German political theorist Eduard Bernstein argued that democracy provided socialists with “the most effective tool for implementing profound, step-by-step reforms without bloodshed”. This understanding soon became orthodoxy amongst socialist parties.

Then it took the rise of fascism, the great depression of 1929 and the second world war for the second revisionist moment to arise. Social democrats like Bernstein questioned the Marxist prediction that capitalism  would collapse. Bernstein believed that capitalism could be tamed by the state to serve socialist ends. It took some time for this social democratic argument to become mainstream, but eventually most socialist parties came to accept it.

The last third of the 20th century opened another period of crisis and revisionism. Demographic changes and the intellectual and political triumph of the neoliberal right began to throw the electoral viability of social democratic parties into question. But the neo-revisionism of the 1990s, as historian Donald Sassoon called it, did not simply revise the means of social democracy. It also revised its ends. And this is when the current crisis started.

The fact that the European project entered a neoliberal/ ordoliberal phase added impetus to neo-revisionism. The European Union’s single market was predicated on economic liberalisation and deregulation as well as on the erosion of social rights. Roughly a decade later, the launch of the single currency intensified this process further. The euro’s convergence criteria and the Stability and Growth Pact put into practice the ideology of the small state. From then on social democratic parties no longer had the option of pursuing truly social democratic politics. At best, they could redistribute a little bit here and there but using the state to pursue egalitarian policies or to correct the excesses of the market was no longer possible.

It is worth stressing that social democrats were not passive observers of these developments. They were active contributors to the construction of this neoliberal – or, in its German social liberal incarnation, ordoliberal – Europe. With few exceptions, most European social democrats enthusiastically embraced the neo-revisionism so emblematically encapsulated in the ‘third way’ – and in particular the idea that globalisation was an uncontrollable force of nature which demanded unregulated markets and the erosion of the welfare state. The problem was that   by abandoning a critical attitude towards capitalism – one of the distinctive features of social democracy – they renounced as well social democracy’s egalitarian ends and accepted the hollowing out of democracy that such a shift would bring.

The socio-economic and political outcomes of the neoliberalisation of social democracy are well-documented, but its most dramatic consequence was the global financial crisis of 2008. It turns out that agreeing to deregulate financial markets, promoting the expansion of consumer credit as a way to address wage stagnation and going along with the small state agenda posed considerable risks to the global economy.  But instead of taking advantage of this big crisis of capitalism to champion a social democratic agenda, the centre-left in Europe, utterly baffled by the intellectual collapse of its most recent belief system, ended up promoting a higher dose of neoliberalism in the shape of public spending cuts and welfare state retrenchment.

It did not take long to realise that this approach had disastrous electoral consequences. The traditionally varied coalition of voters that social democratic parties had relied upon to win elections started to look elsewhere. They either stopped voting altogether or started to support parties from the radical left (which incidentally had abandoned much of their radicalism to become the new vehicle of social democratic politics) and the populist right.

Timid signs of a social democratic revival

In the meantime, it has become clear that austerity is not a panacea to Europe’s debt crisis. After seven years of relentless public spending cuts, ‘austerity-fatigue’ has set in. This change of heart is understandable. As political economist Mark Blyth has pointed out, there is no evidence that austerity delivers what it says on the tin. Even the institutions associated with neoliberalism have started to admit that the euphemistically called ‘fiscal consolidation strategies’ had caused more harm than good.

Across Europe, some social democratic parties have started to wake up to this reality. In Germany, the new leader of the SPD Martin Schulz argues for an alternative to Angela Merkel’s ordoliberalism. Opinion polls suggest that his promises to reform the labour market and   invest in public services are galvanising voters. Further south, the Portuguese socialist prime minister António Costa has became the poster boy for progressive politics. His minority government, which is supported by the Communist party and by the radical Left Bloc, has managed to reverse austerity, albeit modestly, and to bring down the public deficit to EU-accepted levels.

But Costa’s eventual success – and that of others like  him – will depend on concerted action by all European social democratic parties. They need to challenge the ordoliberal principles governing the EU in order to develop a vision of Europe   that asserts the primacy of politics over markets. In short, they need to rediscover their social democratic roots.

Labour faces similar intellectual and political challenges to its European sister parties but these are exacerbated by a very real leadership crisis and also by Brexit. The loss of the Copeland by-election – and the fall in the vote share in Stoke-on-Trent – may well support the view that the current leadership is a liability to the party. But a leadership change will not automatically transform Labour’s electoral prospects, no matter how charismatic that hypothetical new leader may be. At best a more competent and credible leader will enthuse and unify the Labour benches in parliament, but these attributes will not be sufficient to make Labour a party of power again.

Labour should stop reliving the arguments of 1983 and 1997 and break out of the nostalgia bubble where it has lived for the past few years. It needs to accept that it will take time to find social democratic answers for a crisis that has taken several decades to unfold. Former leader Ed Miliband did quite a lot of groundwork that should guide Labour in that mission. He put equality back at the centre of the party’s agenda, he sought to rebalance the relationship between the state, market and society in a way that offers some answers to   Brexit and to the hollowing out of democracy, and he  started to develop a more robust concept of citizenship that can reassure and galvanise left-behind voters. Whilst leader, Miliband never had the necessary support either to develop his ideas fully or to find a compelling language to present them in. But a Labour party united in the will to renew social democratic politics should have no trouble in picking up from where he left off.

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This article originally appeared in the Spring 2017 issue of the Fabian Review.