Two forms of socialism – social democracy and communism – characterised the twentieth century in Europe. Initially, they had the same aim: the overcoming of capitalism. But they soon diverged. This was inevitable since ideologies are shaped by the societies within which they operate. Social democrats became powerful only in capitalist democracies. Communists prevailed in less developed societies. They had to develop an industrial society; social democrats had to manage it. Eventually, it was accepted that the goal of social-democracy was the reform of capitalism and not its overthrow, and that no momentous event could deal it the kind of fatal blow that history eventually dealt the communist movement.
Both tendencies originated in the first international organisation of working class parties: the Second International (the First, that of Karl Marx, was never more than a talking shop, though the talking was of a high standard). The Second International was founded in Paris on 14 July 1889 to celebrate the centenary of the French Revolution and was initially dominated by the German Social Democratic Party (SPD) – the most successful and largest socialist party in the world at the time. There were, at that time, no significant labour parties in the UK or in the USA.
The early socialist programmes (such that of Erfurt Programme of 1891) incorporated all the points which would define socialism and progressive politics in the twentieth century: civil rights; education, culture, and health for all; universal suffrage; the legalisation of trade unions and strikes; the regulation of the working day. Though socialists were supposed to be obsessed with class, most of the rights they fought for were individual rights while liberals and conservatives were still defending an electoral system with a restricted franchise. One could say that one of the great achievements of socialists was to have forced liberals and conservatives onto the path of liberalism and civil rights.
The dilemma facing social democrats was that the more they were successful in regulating capitalism, the more they improved it – thus making it more tolerable and delaying its destruction. Moreover, social welfare and good wages also required capitalism to be strong, and these demands were at the forefront of the movement: setting the length of the working day, a minimum wage, and basic labour rights such as maternity and paternity leave. Reforms created winners and losers among capitalist firms since only some, because of their size, or their position in the market or their efficiency, found them affordable.
Before and After the War
Until 1945 socialists achieved few successes. The Labour governments of 1923-’24 and 1929-’31 had no parliamentary majority and achieved little, and the second had to deal with the Great Depression.
In Germany, the social democrats were in governments only for a few years: 1918–’21 and 1923 when they faced massive inflation. They returned to power in 1929 just in time for the 1929 Wall Street crash and the consequent rise of Nazism in 1933. In 1936 in France, the Popular Front government was in power for only eleven months. In Spain the left-wing popular front government elected in 1936 fell to an army revolt led by General Franco.
In Sweden the social democrats had better fortune and were in power for most of the 1930s. Their great achievement was the agreements of 1938 between the trade unions (the LO) and the employers – a ‘class compromise’ whereby the unions accepted the capitalist definition of growth and productivity in exchange for social reforms and full employment.
By 1939, when the Second World War broke out, there were very few liberal democracies left in Europe: only France, the UK, Belgium, Holland, the Scandinavian countries and few other outposts.
Matters changed significantly after 1945. The strength of the left was confirmed in the Scandinavian countries. In Italy and France not only socialists but also communists were in the first post-war coalition governments. In Britain the victory of Attlee’s Labour Party led to the establishment of the modern welfare state.
There were, however, non-socialist precedents for this. Denmark had adopted, in 1891, a state pension scheme. New Zealand followed in 1898, Australia in 1901 and Great Britain (under the liberals) in 1908. In 1889, Bismarck’s Germany introduced a law which provided old age and disability pensions. In Britain even such a staunch conservative as the Prime Minister Lord Salisbury, alarmed by the terrible overcrowding in working class areas, promulgated the 1885 Housing of the Working Classes Act which provided government loans as well as the regulation of speculative builders. The liberal Manchester Guardian denounced it as ‘State Socialism pure and simple.’
Social reforms were thus not always the prerogative of the Left, but without a strong left or strong unions, it is unlikely they would have come about. In the 1950s, conservatives – in power France, Britain, Germany and Italy – did not dare to retreat from post-war welfare reforms.
There was a new swing to the left in the 1960s when social democrats returned to power in Britain and Germany while in Italy the Christian Democrats, fearful of the communists, included the socialists in a reforming coalition. In France, the socialists under Mitterrand finally succeeded in obtaining power in 1981. Though progress was made by these forces, particularly in the field of civil rights (under Harold Wilson capital punishment was abolished, homosexuality decriminalised, abortion legalised) no major advances for workers in the economy were forthcoming. The goal of overcoming capitalism was abandoned.
Social Democracy in Crisis
Having identified the state as the principal regulator of the capitalist economy, socialists sought, often successfully, to democratise it and use it. But as various aspects of capitalism (especially finance capital) developed in a global direction from the 1980s onward, this state-oriented strategy began to falter. Social democrats in the West remained wedded to a national conception of politics, while capitalism set out to stride the globe.
This is the setting for the present predicament of social democracy. Can social democratic reformism still be a force in Europe? The parties, of course, are still there, but has the impetus for social democratic policies exhausted itself over these last ten or twenty years? Is there any comfort for those who still regard themselves socialists or social democrats?
I write these words at a time of deep crisis for social democracy. At the end of the 1990s there seemed to be no crisis at all. The British Labour Party, led by Tony Blair, had been returned to power in 1997 after eighteen years of conservative rule. In the same year, in France, the Parti Socialiste won the legislative election and Lionel Jospin became PM.
In 1996, in Italy, the first ‘left’ government in post-war history was elected. In Germany, in 1998, the Social Democratic Party returned to power. Thus, for the first time ever, the largest four states in Western Europe were led by socialists. The left also ruled (alone or in coalition) in most of the countries of the European Union.
But socialists did not exploit that unique conjuncture to develop Europe-wide policies, establishing a social security net which would form the basis of a more progressive European Union, or a redistributive fiscal policy, or a tight system of labour regulations enforceable throughout Europe. By and large, the European Union has remained a loose confederation of states with different capitalisms, different fiscal policies, different industrial relations systems, and different welfare states. The size of the working class may have been shrinking everywhere, but the rate of de-industrialisation was highly uneven: higher in Sweden and in the UK than in Germany or Austria; Greece was more inflation-prone than Germany, unemployment in Spain and Italy was higher than everywhere else.
A neoliberal ‘grand narrative’ of global proportion, unequalled in earlier times, established itself. The left narrative was one in which socialism was the natural successor to the Enlightenment. But the new grand narrative told a different story: the world market had opened up an unprecedented era of individual freedom. The state, neoliberals claimed, by imposing rules and regulation, was holding back such development. By taxing individuals it taxed enterprise, innovation, and individual effort.
A New Century
By 2020 it has become obvious even to those on the left for whom optimism is a necessary position (‘the future is ours’ and other such self-consoling mantras) that reformist social democracy has been comprehensively defeated throughout Europe. Will it survive in some form or other?
In Sweden social democrats are in a weak and unstable coalition. If the once celebrated Swedish model now makes a sad spectacle for social democrats, the rest of Scandinavia can only be described as an iceberg of tears. Under the social-democratic Prime Minister, Helle Thorning Schmidt, an exponent of the so-called ‘third way’, Denmark decreased taxes for the rich and cut welfare payments. In Norway, the Labour Party became increasingly enamoured with the market economy, privatised public assets, cut down the health services, helped the rich to get richer. It paid the price and has been in opposition since 2013. In Finland in 2019 the socialists were the first party with only 17.7% but the far-right Finns Party was just behind with 17.5%.
Elsewhere, matters are even worse for the traditional left. It loses to the far-right far more often than to parties to its left, as occurred in Greece. In Austria, the Social Democratic party (SPÖ) are less and less popular. In the October 2017 election, Sebastian Kurz of the Austrian People’s party (ÖVP) shifted his party to the right (as did the SPÖ) in a desperate bid to stem support for the far right FPÖ. As the SPÖ crumbled, the Greens surged ahead and agreed to join Kurz’s government. So much for those who thought the Greens had principles.
The Dutch results of 15 March 2017 were catastrophic for the left: three left parties, (the Labour Party, the Socialists, and the Green) obtained together a smaller percentage of votes (23.9%) than the Labour Party on its own in 2012 (24.8%). In Italy the Partito Democratico (PD), hardly a ‘real’ social democratic party, is now the junior partner of a coalition led by the Movimento Cinque Stelle, a ‘neither-right-nor-left party’ – in other words a party deprived of any ideas.
In Britain, the Labour Party lost elections in 2010, 2015, 2017 (though it obtained a creditable result in June 2017 when led by Jeremy Corbyn, reviled and pilloried by virtually all his parliamentary colleagues and much of the liberal press). But in December 2019 Labour lost decisively and with this defeat went Corbyn’s left-wing leadership of the party. This was despite the fact that Corbyn’s Labour had managed even in a bad defeat to obtain a higher percentage of the popular vote than Gordon Brown in 2010 or Ed Miliband in 2015 – a fact few in the press bothered to note.
In France, at the presidential election of April 2017, the official socialist candidate, Benoît Hamon only managed to obtain 6.3% of the vote, and was out in the first round, coming fifth well behind another ‘neither-left-nor-right’ candidate Emmanuel Macron. Two months later, in the legislative election, the Socialist Party (with its allies) reached only 9.5% – the most disastrous result since the war.
In Germany it was no better. The SPD were reduced to be a mere junior partner in Angela Merkel’s government. In 2017 the SPD mustered a miserable 20.5% of the vote – its worst result ever, half what it had in 1979. The latest polls indicate that this decline is continuing, with the SPD now consistently falling to third place behind the Greens and only managing results in the mid-teens.
The left has virtually disappeared in the countries of the former Soviet bloc. Most are run by corrupt, right-wing parties such as Viktor Orbán in Hungary and the Law and Justice Party in Poland. In the Czech Republic the social democrats were pulverised; in Slovakia a homophobic and anti-abortionist millionaire won the last election; in Romania the corrupt Liviu Dragnea, the leader of the social democratic party (in fact a right-of-centre party) was found guilty of vote-rigging (yet his party enthusiastically re-elected him as leader).
In November 2019 in Spain, the Socialist Party, which had ruled uninterruptedly from 1982 to 1996 celebrated as a ‘victory’ the 28% of the vote. Yet in 1982 the party had 48% of the vote, one of the highest percentages ever obtained by party of the left in Europe. It is now in a government of the left supported by other left-wing and regionalist parties, but its forces are much diminished.
Matters evolved even more disastrously for socialists in Greece where PASOK was down to 5% in 2015 (in 2009 it had almost 44%). In this vacuum stepped the far-left Syriza led by Alexis Tsipras but, unable to cope with the economic crisis, Syriza too is now out of power.
So traditional social democracy, the kind of social democracy which had prevailed at times for lengthy period in office, has been comprehensively defeated not only in Europe but almost everywhere. None of this should be particularly surprising. Most social democratic parties embraced a policy of austerity, allowed wages to stagnate, inequalities to increase and privatised public services to an extent unimaginable thirty years ago and did not did not even dare to tax the prosperous beneficiaries. It seldom pays to fight on the terrain chosen by one’s opponent.