European Social Democracy must re-invent itself


By Martin Winkler

Social democratic parties find themselves in a deep crisis, losing ground in setting the political agenda and organisational power, reaching an existence-threatening extent. Was the year 2000 really the end of the social democratic century just like the liberal German-British sociologist Ralf Dahrendorf predicted in his essay in 1987?

Yet the situation has not been as favourable as it is at the moment for quite some time now. The German philosopher Axel Honneth makes this point in his latest book ‘The Idea of Socialism’: “More than ever in the post-war era, people are outraged at the social and political consequences unleashed by the global liberalization of the capitalist market economy. On the other hand, this widespread outrage seems to lack any sense of direction, any historical sense of its ultimate aim. As a result, this widespread discontent has remained oddly mute and introverted (Axel Honneth, “The Idea of Socialism”, Polity Press, Cambridge 2016, page 1).

In those few places where the indignant masses do not follow right-wing nationalist movements (which is the case in most parts of the world), they tend to lean more towards a new type of left-wing party, such as ‘Podemos’ in Spain, or ‘Syriza’ in Greece.

Added to all this, membership numbers are shrinking for social democratic parties all over the continent. In the German SPD every second member has left since Willi Brandt’s triumphant re-election in 1972. The Swedish SAP are in a similar position, considering that they only count about 100.000 members today. Even the historically strongest social democratic party, the Austrian SPÖ have suffered a tremendous loss in membership, in the 1970s they still had almost 800.000 members, now that number has shrunk to fewer than 200.000.

Why waste any time on ‘grand old lady’ social democracy?

When Ralf Dahrendorf predicted the end of the social democratic decade in 1987 he did not know of the devastating aftermath of the financial meltdown of 2008/09. He was also not confronted with the study by the French economist Thomas Piketty, that shows that the concentration of wealth has not been this high since the stock market crash of 1929. Nor did Dahrendorf know about the results of a different study by another French economist Gabriel Zucman that shows the magnitude of current tax evasion.

Concentrations of wealth are created, which means that there is a shift in how financial success can be achieved, from individual effort to inheritance. Thus, modern market economy loses all its legitimacy, and new oligarchs are created that block ‘prosperity for all’. When it comes to taking back some of the wealth and power from these oligarchies in a peaceful manner, then social democracy can shine in new splendour.

Nationally focused social democratic parties must re-invent themselves as truly European parties.

The European Union is without doubt a historical political project intended to bring peace and prosperity throughout Europe. However, the project finds itself on mighty thin ice at the moment, as national egos have alarmingly limited the EU’s ability to act.

Regarding the missing mechanisms of coordination in the Eurozone the description of Mervyn King in his book “The End of Alchemy”, the former governor of the Bank of England, is very revealing. He points out that the southern countries in the EU are now faced with the possibilities of either further cutting wages and state expenditures to gain competitiveness, thereby falling further into the recession and raising unemployment even further, or the wealthier countries allow higher rates of inflation which mean they would effectively devalue themselves, or those countries would pay up to 5% of their GDP into a common European fund for transfers to the southern countries. The voters of Germany or the Netherlands would never allow either of the last two options to happen. The fourth solution to the problem would be the partial or total break-up of the Euro area. When watching European leaders saying ‘We don’t like any of them’, he is worried that muddling through will not solve the problem.

Claus Offe came to a similar conclusion and wrote: “The seriousness of the crises is due to one core contradiction. In a nutshell: what is urgently needed to be done, according to whichever of many rival political preferences and strategies, is also extremely unpopular und therefore democratically, within member states as well as the EU, virtually impossible to carry out. What must be done, and everyone agrees on it ‘in principle’ (namely some kind of sharing and re-allocation both burdens and responsibilities within the EU) cannot be ‘sold’ to the voting public of member states of both the ‘core’ and the ‘periphery’. After all, political parties who would have to do the ‘selling’ are still largely national power-seeking organisations (Claus Offe, „Europe trapped“, Polity Press, Cambridge 2015, page 4).

This is where we need European Social Democracy. Rather than national egos we need common European solutions based on contributions from all member states, and particularly from their tax payers (both persons and corporations) each according to their ability. In practice this means that we need an extended European solidarity fund as part of the EU budget. Similarly, to the way it is in the United States, where there is a strong ‘Uncle Sam’ who supports economically weaker states by the big federal budget. We need a similar mechanism in the EU.

Social democrats must re-invent themselves as a trusted movement in the fight for women’s rights.

Ever since the 1970s numerous election analyses in multiple European countries have shown that women tend more strongly towards progressive politics. Simply said women know the worth of a functioning welfare state much better than men do. They still hold a position in which they are the first caretakers of children, they typically have to deal with school issues, find a family place to live, organise leisure activities, look after the elderly and the sick. Yet, social democrats in Europe have again and again thrown away the chance that arose from this situation. In most countries social democratic parties are dominated by old men, even more so than was the case 20 years ago.

50% of the world is female, therefore 50% of delegates, and political positions should be as well. A good example in this case is the current Canadian government headed by Justin Trudeau, as it sends a very clear signal on how a government should be put together in a social sense.

Within the European social democratic parties themselves there is another wonderful example from the year 1986, when Gro Harlem Brundtland set up the first ‘women’s government’. The result was that for years the social democrats in Norway had a very high standing, particularly among women where approval ratings were 20% higher among women as they were with men. Additionally, the implemented measures in the field of child care, full-day schooling, and care for the elderly meant that a much larger number of women than before were able to participate in the Norwegian economy. The example of Norway clearly shows that consequent implementation of social democratic policies can result in success in a large scale for all of society.

Social democrats must re-invent themselves as a party that stands for a fair compensation between the public and the private sector.

Since the 1970s social democracy increasingly became the ‘5th pillar of the public sector’. The political results of this were fatal. European social democracy defends redistribution mechanisms in favour of the remaining party members in the public sector that are in no way fair.

On the one hand there is the public sector that enjoys a wage and pension dynamic, that is not covered by the growth in taxation revenues that, in turn, come mostly from the private sector, and their employees. On the other hand, there is the private sector that is put under more and more pressure due to rising international competition and a missing European economic coordination.

Unfortunately, statistics to the difference in wages between workers and public servants are scarce. In Austria these statistics were just recently released. The income report by the Austrian Rechnungshof (Court of audit) from the year 2016 shows that the real income of the average Austrian worker fell by 13% since 1998. In the same timespan the income of Austrian public servants rose by 26%. This does not bode well for a social democratic party in government that considers itself to be a party of the workers.

Social democrats are trusted only if they manage to ensure that nobody is left behind. This is why social democrats need to ensure a fair compensation between the public and the private sector.

Social democrats must re-invent themselves as a trusted party for social justice.

Many people in the private sector have the feeling that supporting social democrats only means a better income as well as earlier and higher pensions for public servants. Social democrats must regain credibility in order to be able to present themselves as a party for social justice. Today credibility is more important than ever. The developments concerning income and wealth distribution over the last 20 years are more than worrying. The distribution of wealth is tending towards levels that we have not seen since the time of early capitalism. Social mobility also declines the higher the concentration of wealth becomes. The rich tend to marry amongst themselves, and then send their children to exclusive private schools. This means that separate worlds are taking an ever-stronger hold.

There is a broad consensus when it comes to social justice, not just on the left. The majority of people think that every inequality that arises from a lucky start in life should be levelled to the extent that it is possible to achieve success without inheriting a fortune. This levelling of diverse chances can only be achieved on an economic level with a harmonised inheritance and capital gains tax, which in turn could be used to finance an efficient, and cost-free public education system.

This is about the basic ideals of social democracy, this is where there needs to be more credibility. Not fear. Effectively this would be fear of success.

Social democrats must re-invent themselves as a party for a modern and effective state.

The problem of credibility of the social democrats also influences the willingness of citizens to pay taxes for a partly ineffective state. This is why social democrats must take a decided stand for a modern and effective state that consistently can prove its efficiency.

Sustainable development in society can only ever take place through more efficiency and more democracy. More democracy without more efficiency can only end in economic agony, and redistribution in the sense of ‘less for all’. More efficiency is extremely important in the public sector.

A modern efficient state must deal with basic research and educational infrastructure more than with public income support for pensioners. The importance of the state in terms of innovation was impressively shown by Mariana Mazzucato in her book ‘The Entrepreneurial State’. She heavily criticises Apple, Microsoft and other tax avoiders in the USA. She demonstrates that the US government, that took on the high risk and cost for the basic research for Apple, Microsoft and Co., who were not able to take all that risk themselves, in no way receive the compensation they are due. This is a system that Apple also uses in Europe. It is obvious that a fair system is not being practised here but a parasitical system was established. The risk and cost is handed over to the public, whereas profit is privatised, which does not adequately contribute for a better future for all of us.

The ball is already put on the penalty spot. All social democrats need to do is take aim and shoot.

Social democrats must re-invent themselves as a party of economic expertise

A sentence by former US-president Bill Clinton was heard all over the world: “It’s the economy, stupid!” This sentence by democratic campaign strategist James Carville was meant to underline the importance of economic policy in the Clinton campaign of 1992. Economic issues are vital for prosperity for all in Europe. The missing coordination of European economic policy is causing weak growth and high unemployment. In the long run that will also come back to haunt Germany.

In a system of fixed exchange rates, like the one in place in the Eurozone, the internal rates of exchange (such as the effective exchange rate of e.g. the industrial sector), meaning the way they come to be according to wage and productivity developments in every single member state, become the most important. This is a situation that has not been researched thoroughly enough in economic science. For instance, the German industry was deflated by 18% in comparison to Austrian industry which greatly undermined Austrian competitiveness as shown by Vienna based Economist Herbert Walther in his Article „Rekordarbeitslosigkeit als zentrale Herausforderung in der Wirtschaftspolitik“.It is precisely in this area that we should have a comprehensive and broad public debate, in order not to subvert the competitiveness amongst the member states even more. A productivity orientated wage policy must be the basis of fair competition between the respective member states. What is essential in this case is a collective and agreed upon economic strategy by Germany and France as economic leaders of the union.

Social democrats must re-invent themselves as a party for orderly immigration into Europe with a dedicated cultural re-interpretation

For years the social democratic parties ignored the fact that Europe is an immigration continent. Problems caused by immigration were to solve themselves. The educational-, social-, and health systems were assumed to be strong enough to take on the ever-changing requirements.

It went unnoticed that due to a rise in immigration smaller, but also larger problems cropped up in education or health institutions, in residential areas, or in shopping centres. Due to growing diversity in the groups of immigrants a need for political measures arose, in regard to child care, kindergartens and schools, apprenticeships, universities, adult education, in hospitals, or care centres for the elderly. A part of the immigration dividend should have been implemented much earlier in regard to the topics listed above. Unfortunately, social democrats were not ready to have that conversation at the time. An important factor in this case was the beginning of the rise of the nationalist right-wing.

That Europe is a continent of immigration is something that European social democrats have to come to grips with. In order to do that problems that arise must be dealt with head on, solutions must be provided, and specific problem areas must be addressed and improvement provided in regard to them. It must be made clear to the public that Europe needs continuous immigration. Without immigration, and without integration the social systems in Europe would fall apart.

This is not only about institutional questions, but very much about cultural questions such as defining home. If the European social democrats do not put any value on that term, and do not try to modernise and redefine it, then they will lose it to the nationalist right and their definition of home based on origin. The danger is growing with the increase of a debate about ‘our people’, and slogans like ‘our people first’. It is important to demonstrate that people living in Europe have any number of roots. Some of them may be recent European citizens, others have been since generations. Thousand try to find a new place in life here, and will become European citizens in the future. A social democratic definition of home is something that has to encompass all these things. European social democrats must never let it happen that the term ‘our people’ is misused.

Social democrats must re-invent themselves as allies to the civil society.

People interested in politics nowadays can choose from a large spectrum. There are not only the established organisations such as large religious communities, or political parties, but additionally hundreds, if not thousands of initiatives. A social democratic party must therefore enter into a lively exchange with the civil society in order to reach those outside of established structures.

How many activists from Amnesty International, Greenpeace, ATTAC, Refugees Welcome, or Oxfam move into positions in social democratic parties? The leaders of European social democratic parties need to represent this civilian commitment.

Vice versa civilian initiatives have a lot to learn from social democrats. The ‘committed’ often come from an upper-middle class, well-educated background, and often forget that our society can only function in peace if there is solidarity amongst different social standings. The civil society organisations need the topical influence of social democrats in order to prevent civilian initiatives to be happy with themselves all too quickly.

Social democrats must re-invent themselves as an open movement in Europe.

Those that are truly interested in politics nowadays are often scared away by the rituals of social democrats. The party institutions and places to meet are dusty, and all too often dominated by people from public service. A social democratic party that does not provide a playground for social mobility, and has become a party in which functions are inherited has lost its historic eligibility and role model.

An important point for more openness and mobility is the representation of the general public within the party structures. Social democrats must give people with a migration background a real chance. In order to do that there must be invitations to regional organisations on every level. There must be more open competition, a larger selection, more open decisions. On every level there should be preliminary elections open to all members and supporters (supporters should pay a small fee in order to show their seriousness). Committed groups should try and mobilise supporters in order to carry through their candidates. For this there are many interesting examples in Great Britain and France.

An interesting experiment in this context would be to hold this sort of open election on a European level for the next social democratic candidate running for the EU commission president.

Conclusion

European Social Democracy is in an existential crisis that cannot be solved by a few cosmetic changes. In the view of the author, who works as a restructuring consultant for large companies, the prerequisites are here: the political and social market in Europe is calling out for social democratic answers. In order to create prosperity for all, social democracy is still very much needed.