Social democracy in turmoil

Andrew Coates, Ipswich CLP, takes a global view of recent defeats for social democratic governments and draws links with the Blair "project".

Alfonso Guerra of the socialist party, the PSOE, was not downcast at the results of Spain's March elections. In his phrase, there has "never been such a sweet defeat, nor such a bitter victory". (Cambio 16, 18.3.96). Yet the PSOE vote has dropped from 48% in 1982 to 37% in 1996. Spanish social democracy's difficulties are not unique. The parties of the Socialist International are in deep trouble.

In the 90s, there has been a near-universal electoral shift to the right. As Guerra consoled PSOE supporters, the Australian Labour Party lost their elections after more than a decade of power. The New Zealand Labour Party was trounced in 1991. The German SPD failed in 1994. Fourteen years of socialist presidency came to an end in France in 1995. Scandinavian social democracy no longer enjoys undisputed rule. Spectacularly, Italy's Clean Hands investigation revealed the Italian socialists' (PSI) corruption, destroying it by 1994.

A world shaped by the strongest capitalist economies confronts us. Many argue that socialists must modernise to keep up with its development. Labour's leadership claims to be at the forefront of this move. A robust capitalism backed by social partnership and communitarian cohesion is the objective. For all their admiration for the US Democrats, Labour's decision-makers have taken over the policies of the European and Australasian parties now stuck in opposition. A prime cause of their defeats is that modernised social democracy helped create the economic environment now hemming in the left.

The 1980s saw the heyday of the modernisers of 'post'-social democracy. Holding power in France and Spain socialist parties replaced class struggle, and egalitarian socialism, with a nineteenth-century Saint-Simonist admiration for the application of organised finance to industrial innovation. In Italy under Craxi and in New Zealand during Roger Douglas's control of finance, economic liberalism ruled. Support for European integration and competition, in the Single European Act of 1986, and building the South Asian trading zone for the Australasians took precedence. The practical reformism of the past, based on full employment, a strong public sector and redistribution, was replaced by a drive for efficiency, opportunity and equity within a market economy.

By the early 1990s many modernisers were becoming exhausted. Combining economic management with social goals proved to be difficult. The 'global economy' was used in Europe and the southern hemisphere to justify labour market flexibility and an opening to competition. Even partial privatisation of industries had, in many cases, become accepted as a means to withstand international rivalry. In New Zealand the dismantling of public services was under way before the National Party won in 1991. In France the Socialist Party (PS) tried to fill an ideological void with declarations of human rights but failed to tackle poverty and marginalisation. Prime Minister Pierre Beregovoy's term of office (1992-3) was marked by dole queues approaching 3 million. In Spain, conscious of the widening social gulf, the largest union federation, UGT, demanded a 'giro social' (social policy shift), which was largely ignored. By 1996 Spanish unemployment had reached 22.7%. Social democracy surrendered to capital and has been unable to provide renovated and egalitarian social provision.

Riding the wave of economic liberalisation were tightly organised parties. Ten years ago the Italian 'rampamti' (yuppies) rallied around Craxi, described as a minor Stalin. The PSOE was dominated by obedient Felipistas. Mitterrand had his courtiers. Hawke and Keating had their inner circle of 'mates', and the New Zealand Labour Party appeared to be run by finance. Governments favourable to business encouraged patronage. This has long been the right's practice where ties between capaital and state are the norm. This practice spread to social democracy. Funders, legal or illegal, could expect rewards, from the PSOE's network of public appointments (over 50,000 posts) to contracts masterminded by French parties. A hidden tax on public and private funds, the 'lottizzazione', set up by the Christian Democrats, illustrated how connections between the Italian and Flemish socialist parties generated bribery.

Modernised social democracy has been unable to master the economic crisis. It is now barely able to resist pressure for the plunder of public resources that goes with full-blown market economies. Last year many Gallic socialist and unionist modernisers gave a sympathetic hearing to Prime Minister Juppe's plans to cut France's welfare. The result is that social democracy's social base has shrunk; its appeal to those with a stake in economic liberalisation leaves organised labour, public employees and the unemployed out in the cold. As a result opposition to liberalism has spilled out on to the streets; in the 1994 Italian mobilisation to defend pension rights, and in the French movements of last winter to protect the public sector.

Socialists world-wide have been deeply affected by these changes. In Britain Blair's platform and organisational reforms appear to follow the general pattern - if ten years later on. Rampant young apparatchiks and a desire to reach partnerships with private enterprise suggest ominous parallels. The Socialist Labour Party, taking its cue from the ditching of Clause IV, is attempting to build an alternative to New Labour. Others, not necessarily in agreement with the SLP's structure and programme, are looking for new bodies on the left to replace social democracy. Many have found models in the independent European left and ecological groups which have won some representation over the last ten years.

These parties at most hover around 10% of the electorate, i.e., in no position to make up a serious governmental alternative. They face great internal difficulties.

First, the basis for alternative left parties has been changing. The German movement against Pershing missiles in 1982 and the Spanish referendum on joining NATO in 1986 were respectively the catalysts for Die Grunen's entry into the Bundestag (1983) and the formation of the Izquierda Unida (United Left). Pacifism has declined as an issue. The Green parliamentary group has even gone so far as to back NATO involvement in Bosnia (in disregard of their own internal 'basis' structure). Since the 1980s both formations have also been confronted with the need to co-operate with social democracy in local government. A third of the United Left, with support in the trade union CCOO (Workers' Commissions), has formed the 'New Left', which advocates collaboration with the Socialists (Cambio 16, 8.4.96.) Faced with a new competitor, the ex-Communist Party of Democratic Socialism (PDS), the German Greens have moved right.

Second, all the electorally significant alternative left and ecologist parties are coalitions. There are those who back class struggle politics and those who support 'post-materialist' demands, which range from ecology to a new international order based on human rights. Debating these issues, or constructing electoral blocs around approved programmes, takes up a lot of the activists' energy. There is therefore a tendency to look inwards, content to represent a radical constituency, without prospects of power.

Social democracy has not stood still. The crisis of modernisation has thrown up new left forces inside the French socialist party (the Gauche Socialiste), and in the PSOE, Antonio Santesmases' Izquierda Socialista (Socialist Left). Full employment is now a major issue. Throughout the European social democratic parties, a very significant battle is taking place over the future of socialism.

The key issue is how to build an international movement capable of replacing economic liberalism with new socialist projects and alliances. New left parties have a role, but risk being sidelined. The British Labour Party has, despite the wishes of post-social democrats, a direct link to the organised working class. It is therefore the site of potential conflicts between support for robust capitalism and socialist ideas. However, alternatives to modernisation will not emerge easily if Labour wins power. If the record of social democratic rule is a guide, flare-ups between the grassroots and the leadership will take time to develop. It is inside governmental structures amongst the newly powerful supporters of the leader that the most serious problems will occur. It will be through the demonstration of practical alternative policies that the left will be refounded. Some of the most decisive battles are being fought inside the most intense and contradictory arenas, the social democratic parties. To abandon intervention in these debates is a serious mistake.

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