INTRODUCTION

The New Social Democracy

BRYAN EVANS

The contributions to this volume provide a comprehensive examination of a politics that has come to be identified as the “new” social democracy. What makes this historic political movement, with its origins in the late nineteenth century, “new” is the transformation that has occurred in its politics, policy, and ideology since the 1980s, but especially through the 1990s. Of course, social democracy has reinvented itself before. Its original ideological roots, at least in Europe, were broadly Marxist, and its political base was the urban working class. In the postwar era, however, shaped by the Cold War and the brutalities of Stalinism, this heritage was largely jettisoned and replaced with a form of progressive Keynesianism and an increasingly heterodox political base that included a growing number of professionals. The social democracy we see today has now abandoned even that commitment to a mixed economy characterized by significant but not dominant public ownership and redistributive social and economic policies. What distinguishes the new social democracy is an embrace of its new “modern” role as a manager of neoliberal restructuring.

This transformation was noted by Michael Harrington (1986, 2), who warned that the social democratic Left in power had, in failing to understand the economic change underway in the 1980s, come to pursue the policies of the New Right. In this context, social democracy was “confronting a crisis of definition and political effectiveness” (Laxer 1996, 11). How would social democracy distinguish itself from explicitly neoliberal parties? Or could it? Of this period in the history of social democracy, Moschonas (2002, 229) writes:

The “new” social democracy has definitely not sprung up like some jack-in-the-box. … In a sense, the “third way” was already present as well, prior to its adoption by New Labour and theoretical formulation by Giddens. The new social democracy of the 1990s is the worthy, direct heir of 1980s social democracy. The continuity between them is manifest, and manifestly strong.

Indeed, as a result of the efforts of the “progressive modernizers,” for whom modernization “has too often meant deregulation and privatization,” social democracy is no longer what it used to be, argues Robert Taylor (2008). “Too many have sought to accommodate or embrace global capitalism,” he observes, “with varying degrees of enthusiasm. They continue to see the market as an overwhelming force for good.” Social democrats have, moreover, “too often argued that the only way forward is to abandon notions of equality and fraternity … and to weaken the state to the advantage of the forces of capital.”

Through the lens of seven cases — Canada, the United States, the United Kingdom, Australia, Sweden, Germany, and Québec — this volume seeks to survey and document this turn from the postwar social democracy marked by redistributive and egalitarian policy perspectives to a new social democracy with a role as a “modernizing” force advancing neoliberalism. The contributions here present original insights into how and why this second refoundation of social democracy has occurred and why this is significant in political and policy terms.

The selection of these particular cases provides an interesting survey of social democracy. Represented in this sample are social democratic parties operating in rather different political and historical contexts. In Sweden, the Social Democratic Party has been the “natural governing party” for most of the past ninety years. Through the forty-four years from 1932 to 1976, it formed the government without interruption and constructed a comprehensive welfare state that is seen as an icon of the social democratic project. Germany, geographically proximate to Sweden, offers a very different story. Since the end of the Second World War, German social democracy has struggled to win national government. The Cold War and the loss of the social democratic–voting East as a result of partition profoundly shaped the electoral prospects and strategies of the social democrats there. And, today, the Social Democratic Party of Germany (SPD) competes with the Left Party for working-class votes. Britain’s Labour Party shares with the other two European cases a historical base in the working class. However, whereas the Swedish Social Democrats are the exemplars of redistributive social democracy, in the 1990s Britain’s Labour Party came to be the most notable expression of the “new” social democracy. While less well known, Australia’s Labor Party (ALP), like its British counterpart, also reinvented itself as a neoliberal modernizing party by implementing marketization and privatization policies while in government and distancing itself from its working-class and trade union base. In Canada, the New Democratic Party (NDP) has never formed government at a national level, but it has had policy influence at certain moments and significant electoral success in several provinces. But, like other social democratic parties, the NDP has transformed itself from a “protest movement” into a party as capable of managing neoliberalism as any of the capitalist parties. And in Québec, a new party, Québec Solidaire (QS), has emerged to give voice to community and anti-globalization activists and workers alienated by the Parti Québécois’s rightward drift. Perhaps because of its origins at a time of expanding neoliberalism, the QS remains deeply committed to redistributive social and economic policies but, at the same time, cannot be characterized as monolithically anti-capitalist. The QS is struggling in a space in which the question is whether it will reinvent Keynesian social democracy or move toward an anti-capitalist politics with a mass base, something that has yet to emerge in North America. And, finally, the United States is often held out as an example of American exceptionalism in that the social democratic movement is widely viewed as non-existent. This is, however, a gross misreading of the American political scene.

Expanding our understanding of the new social democracy is critical for progressives at this time in history. The Great Recession of the twenty-first century, which began in late 2007, presented social democracy with an opportunity to advance “the case for sustained public investment and wage-led recovery” (Hoffer 2009). Instead, social democratic governments in Portugal, Spain, Greece, the United Kingdom, and the Canadian provinces of Manitoba and Nova Scotia all uniformly turned toward austerity policies, including public sector wage restraint, privatization, and a general curtailing of public services. The alternative not considered was to put forward a reform program composed of “policy measures to correct the dysfunctional wage developments of the past decades, to build a genuinely fair and progressive tax base and change the dysfunctional global capital markets” (Hoffer 2009). Larry Elliot (2008), writing for The Guardian, notes that despite thirty years of market orthodoxy, the social democratic Left has failed to develop an “intellectual critique of what has gone wrong and what needs to be done to put things right,” and the inevitable result, as we are now witnessing, is that “matters will revert more or less to where they were before.” Ultimately, social democrats simply offer up the same policy interventions as those of parties and political traditions that are historically recognized for their contribution to the neoliberal project. However, the problem of social democracy, or the broader Left, doesn’t stop there. There is neither a class politics that could potentially develop the power to realize alternatives to neoliberalism, nor is there a strategic vision to build such alternatives and class politics. By tracing the rise and decline of Third Way social democracy in different countries, the contributors to this volume seek to lay the basis for the reformulation of progressive class politics.

Ingo Schmidt introduces the collection with a theoretical examination of the arguments that defined and redefined social democracy on its way to government power in the 1990s. Two factors embedded in social democratic debates at that time were globalization and the electoral dilemma presented by the shrinking of social democracy’s historical political base in the industrial working class. In addition, Schmidt looks at the social democrats’ experiences in government and explains why electoral success did not endure. Against mainstream social democratic discourse, he argues that neither globalization nor demographic change is key to social democratic success or failure, which is instead linked to economic growth. And here we find a compelling explanation of the brief success, and subsequent failure, of Third Way or “new” social democracy. Schmidt concludes that social democracy in its Keynesian and Third Way versions always relied on economic growth but that both versions were unable and unwilling to pursue their respective programs against the interests of capital in times of crisis.

As this is a Canadian publication and the Canadian case possesses several unique dimensions, the story of social democracy in Canada is presented in two chapters — one dealing with the New Democratic Party as an English-Canadian phenomenon and a second with the rise of Québec Solidaire. Indeed, the longest chapter in the collection concerns the NDP. This party has enjoyed electoral success at the subnational level, having won at least one election in five of the ten provinces, while at the national level it has typically, though not always, been the third party, as measured by the popular vote. Thus, we need to think of the story of the NDP not as a single narrative but as several. Indeed, the national NDP differs from Canada’s other major political parties in that it is the only party in which membership in the federal party is directly derived from membership in a provincial party. No other Canadian party is so organized.

In part, the weakness of Canadian social democracy can be explained by Canada’s federal political structure, which has reinforced regional and linguistic identities and has constitutionally assigned responsibility for important social and economic policy fields to the provinces. While a number of provinces — British Columbia, Québec, and Ontario, in particular — have relatively high rates of union membership and, at least in historical terms, the trade union centrals have possessed a robust capacity to mobilize members in support of the NDP or Parti Québécois, the same cannot be said for the national Canadian Labour Congress. In addition, the role of the national government in policy innovation and redistribution has been shrinking since the late 1980s. As a result, while not unimportant, the central government often appears remote.

Bryan Evans’s chapter on the NDP is thus necessarily broad in scope, as it captures key elements of these many narratives in Canadian social democracy outside of Québec. In 1961, the NDP emerged as a political makeover of its predecessor, the Cooperative Commonwealth Federation (CCF). Canadian social democracy was, at the time, attempting to adapt to the Cold War and expanding to broad-based consumerism by representing itself as declassed and deliberately “liberal.” Rather than question capitalism, the NDP claimed that a mixed economy could be better managed by social democrats. This was the first refoundation of Canadian social democracy since the founding of the CCF in 1932. In the 1990s, the NDP moved through a second refoundation, this time much less formal, less organized, and not linked to a specific date or place. But the absence of a founding convention like the one that took place at the Ottawa Coliseum in 1961 does not mean that Canadian social democracy was not in a process of transformation and adaptation to a new terrain of globalized capitalism. Evans’s far-reaching analysis of this process links the NDP’S adaptation to the constraints of neoliberalism to political economy, sociological characteristics of party activists, and a retreat from the politics of class.

We tend to view the United States as a country devoid of a living social democratic tradition, but Herman Rosenfeld digs deep into American political history and contemporary formations to find that this is not the case. He explains that social democracy has taken a different form in the United States: historical and political events created a political culture and structures that would force the American variant of the social democratic project to adopt a trajectory unlike that of other social democratic parties. Many American social democrats have, especially since the New Deal, worked within a capitalist party — the Democratic Party. As a result, the American working class has been a junior partner, following the lead of both the American state and the accumulation interests of American capitalism. This reality makes all political experiences on the US Left substantially different.

But, as Rosenfeld notes, there is much more to the American social democratic Left than this. Political formations to the left of the Democratic Party do exist — organizations that call themselves “socialist” but continue to work within the orbit of the Democratic Party. They have differentiated themselves, however, from the neoliberal administrations of presidents Clinton and Obama. These political formations maintain web pages, publish journals, engage to some degree in electoral politics in support of progressive candidates, and, of course, participate in unions and social movements. But their politics and ideological positions are largely pluralistic, and they focus on developing strategies that allow small socialist organizations and individuals to engage with the Democrats.

The recent election of Ed Miliband to the leadership of Britain’s Labour Party signals an end to Blairite “New” Labour and perhaps the beginning of a more fundamental reconsideration of British social democracy. Byron Sheldrick examines the origins of the Labour Party as a political and electoral vehicle founded on the principles of labourism and parliamentarianism. These founding principles, Sheldrick explains, have shaped the party’s overall approach to regulating capitalism and dealing with economic crisis. In part, the result has been a reluctance to consider more transformative politics and policy. Ultimately, this created the foundation for the party’s own rejection of the postwar Keynesian consensus and thus laid the political groundwork for two decades of conservative rule and neoliberal restructuring. Unlike Labour, the Thatcherite Conservatives tackled the fundamental question of restructuring class relations. Under the guise of “modernization,” New Labour subsequently adopted an electoral strategy that accepted the new consensus of neoliberalism and the parameters established by Thatcherism. Sheldrick assesses the implications of the 2010 election and Ed Miliband’s victory in Labour’s leadership contest.

In Australia, we also find a long labour party history. The Australian Labor Party (ALP) is among the oldest social democratic parties and possibly one of the most politically successful. Indeed, the ALP was the first social democratic labour party ever to form a national government. But on 21 August 2010 Australia held a national election that produced a 2.7 percent drop in the popular vote for the governing Labor Party and the loss of eleven seats. That 2.7 percent of the popular vote went instead to the conservative Liberal-National coalition, which won seventy-two seats, a gain of seven seats. The balance of power lay with one Green MP and four Independent members. More than two weeks of negotiations allowed the ALP to form a razor-thin government with the support of the single Green MP and three of the Independents.

In this context, Dennis Woodward traces the transforming relationship between the ALP and unions. This case study is concerned with the struggle over reform of the industrial relations system initiated by the former Labor government led by Kevin Rudd. Woodward finds that the ALP is both different from and similar to other social democratic parties. It is different in having built a balance between the competing pressures it faces from its trade union base and from business; it is similar in having refounded itself as a multi-class party in which the trade unions are contained as simply one “interest group” among many, each of which is pressing its policy agenda forward.

On 19 September 2010, Sweden’s voters handed an unprecedented second term to a government alliance of the centre-right. The Social Democrats, with 30.7 percent of the vote, scored their lowest level of popular support since 1914. Seeking to explain these historic election results, Kjell Östberg charts the transformation of Swedish social democracy from “labour party to liberal party.” Swedish social democracy’s transformation and declining prestige as an ideological and public policy innovator can be attributed to a variety of forces and developments. In particular, Östberg examines the close of an era of postwar prosperity that created both the political and economic foundation for the welfare state, the end of the Cold War, and the weakening of social democracy’s political base — the industrial working class. Ultimately, these factors resulted in shifts in the class composition, ideological orientation, and organizational effectiveness of the party. Östberg concludes by assessing the potential for the emergence of a new radical Left given the limitations and electoralism of both the Social Democratic and Left parties.

Germany’s Social Democratic Party, which counted Karl Marx and Friedrich Engels as members, has an iconic place in the annals of classical social democracy. It was the largest and most electorally successful party of the European Left up to the First World War. In his chapter, Ingo Schmidt forcefully challenges structuralist explanations of the Social Democratic defeats in Germany. These arguments contend that changes in social and economic structure undermined both the electoral basis of social democratic parties and the regulatory capacities of social democratic governments. The suggestion is that the declining numbers of industrial workers made it difficult for Social Democrats to win electoral contests. Furthermore, globalization and increasingly liberalized investment regimes meant that high wage and tax policies were increasingly difficult to pursue. Consequently, in the late 1980s, social democratic strategists began to advocate for a shift from class-based politics to appeals to libertarian values and a much more multi-class politics. The electoral success of Third Way social democracy in the late 1990s is sometimes seen as a validation of this reorientation.

Schmidt instead contends that German social democracy’s electoral fortunes can be explained more consistently by economic cycles and changes in world politics. More specifically, the German Social Democrats enjoyed electoral success when they appeared as agents of economic modernization and social justice. During the New Economy boom of the 1990s, profit growth outpaced job creation and wages so that increasing numbers of working-class voters were asking for what they considered their fair share of economic prosperity. These voters saw the SDP as the party of employment growth and a fair distribution of incomes. Moreover, for their wholehearted support of technological innovation, the Social Democrats won support from voters of different class backgrounds. The hope for permanent prosperity tied this cross-class coalition of voters together. However, economic growth, on the one hand, and a desire for social justice and innovation, on the other, do not automatically lead to social democratic election victories. The German experience demonstrates that economic crises produce a decline in social democratic fortunes in elections, membership, and approval ratings. This social democratic experience in times of economic crisis points to the conclusion that cross-class alliances are not the way out of structural decline. Rather, they lead to further electoral failure.

The emergence of Québec Solidaire (QS) is one of the most interesting developments in a very long time within the broad Left in Canada, and perhaps in any of the wealthy Western countries. And yet a paucity of analysis presently exists concerning this new party. As the Parti Québécois (PQ) has steadily drifted to the neoliberal right since the premiership of Lucien Bouchard, the QS has emerged as the largest political organization of the Québec Left. Roger Rashi presents an entirely original analysis of the QS. Tracing the PQ’s many swings to the right since 1982, Rashi explains that the QS arose as an explicit rejection of the PQ’s program and practice of “neoliberalism with a human face.” Indeed, he rejects the characterization of the PQ as a social democratic party, explaining that its political base was neither the working class nor the trade unions. Although both were an important part of the electoral coalition, this does not make the PQ a social democratic party. In contrast, the QS, with its origins in the anti-globalization movement after 2000, is an antineoliberal united front that encompasses various left and radical political trends, some socialist and anti-capitalist in orientation and others leaning toward redistributive social democracy. As Rashi explains, while clearly to the left of any Western social democratic party, the QS is better understood as a “left of the Left” formation, similar to new parties that have appeared in several European countries in the past decade. These parties tend to be multi-tendency, embracing allied but distinct ideological currents, including revolutionary socialist, eco-socialist, anarcho-syndicalist, and redistributional social democrats, under a single organizational umbrella.

In sum, the case studies point to a social democracy that has confirmed its rupture with the postwar order and with its role as the primary political representative of working-class interests. Instead, everywhere we look, social democracy has demonstrated its protean talent for adapting to the requirements of the different phases of capitalism. Québec Solidaire may well be an expression of the potential for renewing a more radical and transformative reformism that, while not anti-capitalist, does raise important questions and offer resistance to the neoliberal variant of capitalism.