Is Social Democracy dead?

[politicus]

European Social Democracy (and since Social Democracy developed in Europe and things gets too blurred if you involve non-European versions I am only going to focus on that) is not dead, but it is in severe crisis. The danger is that it will be replaced by right wing populist parties with a left wing economic agenda - what you might call nationalist populists – where the progressive social policies of SDs are replaced with conservative or reactionary positions, while the economic populism is maintained, at least on the rhetorical level.

Their basic problem is that the classic model where Social Democrats avoided taking over the means of production and instead created a large welfare state based on high taxation has hit the wall.

Globalization is the main challenge. In an era where capital can be moved and most jobs can be outsourced it is simply difficult to sustain the necessary tax base. It is also difficult to create enough jobs (at least jobs with a proper wage) to let ordinary people get a sizable share of the economy through wages.

Social Democrats should have implemented economic democracy when they had the chance in several countries in the post-war era, but chickened out of this.

One option is for reformist Socialists to readdress the problem of ownership since workers owning their company is the best way to secure that production isn't moved out of the country. Workers cooperatives owning a large share of the economy would also reduce the wage level thereby making the economy more competitive and state owned investment banks would allow more resources to be put into job creation rather than speculation. But we all know the problems resulting from limiting the free market. Any experiment with ownership, such as government loans for worker coops, nationalization or dropping inheritance and capital taxes for owners who sell to their employees, will be met with widespread resistance.

Social Democratic policies also require growth and in a world where limited resources will increasingly make it harder to grow the economy this will be a challenge.  Converting to a steady state economy with shorter work days, but more family and community responsibility for the welfare sector with volunteer work replacing public employees, is one way to go. But there will be major transitional problems and any break with the current consumer culture will be unpopular.

Even if sustained growth is still possible productivity increase makes it hard to get enough jobs, so a shorter work week will be necessary. Several experiments has shown that this is possible  without a drop in production because of increased efficiency, but its a hard sell to business and the population at large.

In general the problem for SDs is that they need to renew their project and make some choices that will alienate some voters in the short term in order to develop a coherent vision of society that address the problems we are facing. This takes a lot of guts and a long term focus that is generally next to impossible to integrate in ordinary electoral politics.

Another problem is their lack of media power and the break between organized labour and SDs. Since contributions from unions is generally the only thing that can make it possible for left wing parties to aquire enough capital to successfully challenge pro-business parties in elections or create a loyal (or at least not hostile) media this is a major problem, which is hard to solve since many (often most) workers have already abandoned SDs making it hard (often impossible) for unions to support SDs.
Creating a cooperative sector in the economy would also help with this, since you would get pro-SD businesses, but since you need political power to create those its very hard to do.

[politicus]

Wow, I'm really surprised my comments didn't spark myriad of condescending / outraged / annoyed replies...

So far this thread has been a discussion among people who are either green, democratic socialists, social democrats or - in my case -  Christian Democrat with leftist tendencies on socio-economic and environmental issues. I think that's rather pleasant, its not a topic where comments from people who are totally alien to the Social Democratic tradition and/or its history will add anything of value.

There is no need to actively try to entice right wingers to come and say you are a naive dreamer etc. That will just clutter up the thread.   

[politicus]

Wow, I'm really surprised my comments didn't spark myriad of condescending / outraged / annoyed replies...

I didn't comment on your post because I think its mostly stating the obvious without going into some of the hard stuff like:

A. SD being dependent on growth vs. limited resources
B. Distributing wealth via jobs vs. job loss because of technology
C. Cultural alienation of workers incl. many workers being socon on immigration and law & order
D. Lack of media power and campaign money due to unions withdrawing support (related to C.)
E. The conflict between addressing A and B and winning elections.

So while you do address globalization there is some other hard stuff you don't take into consideration and your solution to the problems arising from globalization is of course very broad strokes and general. Many (probably most) people are after all pretty attached to their nation.

[politicus]

Hi Muon

I will try to answer your questions a little by little, since some of them require long answers.

Social Democrats should have implemented economic democracy when they had the chance in several countries in the post-war era, but chickened out of this.

What caused the SDs to back away from this direction? Was it satisfaction with the status quo? Did the reliance on nationalized industries prevent movement towards worker ownership?

It came the furthest in Sweden and Denmark in the 70s and early 80s with the idea of union controlled employee funds (such funds where approved in Sweden, but never implemented) and stranded on a combination of factors. The right wing in both the party and the trade unions wanted to preserve the status quo and was afraid it would be bad for business + many of them saw it as too "socialist" - SDs had a strong anti-communist tradition. The other factor was fear of capital flight. In Denmark their reliance on support from a centrist social liberal party also played a role. Ironically parties to left of SD considered it a reactionary move to preserve capitalism and make the workers into little capitalists!
Reliance on cooperation with centrist parties was an important deterrent in many other countries and was also used internally by the right wing in SD parties to keep the left wing from demanding economic democracy.

There were no nationalized industry in the Nordic countries, but in countries like Austria, France and UK where (parts of) some industries where nationalized there was a reluctance to let workers run them or sell them to employees - it was never really on the table to do so.
The Israeli union movement ran a large number of businesses in this era, but this brought them into conflict with their core values - since they underpaid Arabic Jews and Arabs and other outsiders. Its likely this insider/outsider problematic would also have been a problem in Europe.

[politicus]

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1. There are some particularly intriguing thoughts here. I would think that creating incentives for business to have cooperative ownership might create some new and unusual coalitions. Wouldn't reductions in regulation or targeted tax incentives move some small and mid-sized businesses to support that type of platform? Would it pull in a mix of workers and native business much like one sees in traditional policy debates on tariffs on foreign goods?

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2. The push towards more family and community responsibility for welfare has generally been a conservative position in the US. If the SDs moved in that direction would that gain them votes in Europe?

When reading my answer to those two keep in mind that I view this as an outsider who has moved left on socioeconomic issues from an originally conservative postion and identifies as a Christian Democrat. A Social Democrat would view this differently.

1. I am unsure how small/midsize business owners would view a push towards more cooperative ownerships, some would clearly view it as unacceptable government interference, but in principle most liberals (in the European sense) would have no trouble accepting more diverse types of ownership. If it  included special treatment for such companies in any way, there would however be a strong backlash in this group.
In countries like Denmark with a strong coop tradition, much of it founded by farmers connected with the Liberal party, coops are not seen as inherently leftist. But I cant speak for non-Scandinavian countries about this, I simply don't know enough.

2. Its an idea promoted by steady state economists, who originate in a leftist tradition, but its alien to the big government thinking that has traditionally dominated SDs. Some parties further left have had a more positive approach to ideas of self organization. The left-SD Socialist People Party in Denmark once had a slogan called "More society, less state" and the idea of greater civil society responsibility would have greater resonance among new left types, at least in principle. In reality the left tends to be SD +10% (or 20%) in their policies, while at the same time wanting less resource consumption!

The tax financed welfare state with a huge public sector staffed with professionals is popular, but I think more and more voters realize that it is unsustainable in its present form since the high wages/high taxes/high prices model is simply too costly in a global market place, and that the left will have to come up with an alternative to centre-right austerity policies. I will however be risky to promote a less work/more self organization-model with less government involvement and higher civil society responsibility. It would definitely cost voters in the beginning. In Denmark municipalities requiring more family involvement in the care of the elderly has been highly unpopular, since its viewed as a public responsibility. But if such policies where combined with shorter work hours they would likely be more acceptable.

My point is that changes to the way welfare is organized is going to happen anyway, and that the left should bring on their own plan to do it with a solidaric distribution of the responsibilities (ie everybody should put in a certain amount of hours in this) and some democratic self organization of it in local areas as an alternative to a right wing approach where less government involvement simply means higher individual responsibility with the size of your vallet determining how well you handle  this situation.