There’s No Going Back to Social Democracy

by A.R. Naraghi

8 November 2016


Across western Europe social democracy is facing a mortal threat. Voters are fed up with the status quo: super trade deals, endless austerity and the concentration of corporate power. Jeremy Corbyn’s overwhelming re-election as leader of the Labour party is just the latest blow to the centre-left and its conversion to neoliberalism.

In France, François Hollande’s erratic handling of the economy has put his approval rating in a historic hole. According to recent surveys, if Hollande runs in the next presidential race he will be routed in the first round. The oldest political party in Germany, the Social Democrats (SPD), saw its support fall from 35.6% of the vote in the last elections to 30.2%. In Italy, prime minister Matteo Renzi’s losses suggest he might struggle to rally support against the surging anti-establishment 5 Star Movement in elections due in 2018.

On the other side of the Atlantic, the similarities are too obvious to ignore. Bernie Sanders’s spirited run against Hillary Clinton may have fallen short, but his campaign was the most credible challenge to centrist policies that have plagued the Democratic party for decades. Donald Trump’s campaign — a disaster in every imaginable way — may enable Clinton to win over disillusioned Sanders supporters this time. But the defection of the working class from the Democrats could fracture the party sooner than later.

So what is driving the process?

The global financial crisis of 2007–8 was not an ordinary one – indeed, it shook the foundations of modern capitalism. In Europe and the US, millions lost their homes and jobs; many more saw their living standards collapse. Meanwhile, governments were spending billions to save a banking system which had been deemed too big to fail. The neoliberal formula may have delivered economic growth in the 90s, but today it demands austerity and the erosion of public services to mask its busted features.

In the midst of these dramatic events, mainstream political parties have had little to say about the causes of the financial calamity, and even less about the solutions required to address it. In policy terms, most of them have accepted the logic of austerity as the cornerstone of economic recovery. Now that the centre-left finds itself entangled in the politics of austerity, its traditional support base — lacking genuine alternatives — is looking for answers elsewhere.

As the political pendulum swings across Europe, radical parties are on the rise. Since the 2008 crisis the vote share for these parties has surged on average by 30%. The double election victory of Syriza in Greece and its mobilization to defy austerity was a pronounced example of this phenomenon. A similar movement is taking place in Spain, where the two-party system that had traditionally dominated Spanish politics lies wounded.

But the challenge to centre-left politics does not come merely from the new left.

The sharp rise in unemployment, real wage stagnation and seemingly dysfunctional immigration policies led many working-class voters to seek alternatives in the messages of the populist right. In France, the Front National — a far-right party — has exploited the moral collapse of French socialism. In the Netherlands, the Freedom party has been gaining ground for over a decade. In Britain, Ukip started to target traditional Labour party voters and won 27.5% of the vote in the 2014 European parliament elections.

What these voters — turning to both sides of the spectrum — have in common is an angry rejection of the centre-ground politics. They view minimalist policies of incremental change as concessions to preserve a decaying system. The reason Labour’s mass membership seeks a clear and decisive break with Blairism is no great mystery: by 2010 it was clear that New Labour’s conversion to the neoliberal project had been an abject failure.

Now there are other options. Corbyn’s rapid rise in British politics is a prime example: instead of making promises of incremental progress toward social justice, he sweeps aside the traditional austerity agenda, saying the UK is wealthy enough to treat the less fortunate fairly and humanely.

This is not an inconceivable thought.

The sense that capital could be redirected to benefit the working class and the poor has been reinforced by the writings of prominent economists such as Thomas Piketty, Joseph Stiglitz and Ha-Joon Cheng. The Brexit vote revealed that for millions of people in the UK the status quo has become intolerable. Their economic grievances have a foundation in reality and the causes do lie, at least in part, in globalized capitalism. For this angry electorate, the only element that can respond to such sentiments is one that is radical enough.

Unlike the far right, whose appeal is limited by their xenophobic positions, the new left can offer a big tent. The younger generation instinctively sees the left as modern and intellectually receptive. There is broad public support for workers’ rights, investment in infrastructure, public ownership and a just tax system.

The insecurities that are fueling the rise of the radical right and the new left aren’t going to go away. If social democracies are struggling to stay relevant, and if the system itself looks fragile, it is probable that other aspects of society are weak as well.

The weakness of European social democracy lies at the level of ideas, strategy and a coherent alternative. Mainstream political parties have limited time in which to halt their terminal decline, but their revival depends on recognizing that going back to the politics of the 1990s is not an option.

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