Sunday, 12 August 2018

Can Social Democracy be revived?

While preparing to participate in a conference on the Legacy of 1968, it occurred to me that this year sees another equally momentous anniversary, the end of World War One in November 1918. My deeply-suppressed numerological instinct took over for a second, and made me notice that 1968 is the exact mid-point of the century 1918-2018. Is there any significance in that? What was happening during that century? It then struck me quite forcibly that one thing that was happening during that century was Social Democracy. It arrived slowly, tragically, haltingly to dominate the Western World out of the chaotic aftermath of WWI, which had completely overthrown the 19th century liberal order. It wasn’t always called by that name: it appeared, still does, as Christian Democracy, as the US New Deal, as the Welfare State and even as ‘wet’ Conservatism in Britain. 

One can plausibly argue that 1968 marked the peak of Western social democracy and the birth of its libertarian nemesis: that year saw the start of its decline, first to be overtaken by neoliberalism and after that by – what? I’ve argued some of this before, when in 2000, along with David Robins we wrote Cool Rules, a book that was mistaken by most critics as a manual for being cool but was in fact all about the incompatibility of counter-culture values with the social-democratic consensus.

These thoughts prompted me to whip up the following, highly provisional and incomplete, timeline:

1918-2018: The Century Of Social Democracy

1918 WW1 ends
Labour movements of Europe agitate for social democracy
Weimar Republic in Germany
1921-28 NEP in Soviet Union
1925 Fascism in Italy
1929 Great Depression
1933 Hitler elected
        US New Deal
1939-45 WW2
         UK/US/Soviet alliance defeats Nazism/Fascism
1945 UK Labour Government
        NHS/Welfare State
The "Trente Glorieuses" of social-democratic economic boom
1947 Cold War between US/NATO and Soviet Union begins
US Republican Right begins plotting downfall of New Deal under banner of anti-communism
1968 The May Events in Paris
Prague Spring
US assassinations of Martin Luther King and Bobby Kennedy
UK Anti-Vietnam demos
Intel Corporation founded
1975 OPEC Oil Shocks
       Neoliberal backlash proper begins    
During the 30 postwar years capitalists tolerated universal prosperity - Keynesian Social Democracy - because it was profitable. It becomes no longer sufficiently profitable. A neoliberal counter revolution hands over power to finance capital.
Asset stripping of welfare states begins.
1986 “Big Bang”: Rent-seeking and privatisation displace manufacturing to the Far East.
1991 Collapse of Soviet Union
Fear of the Soviet threat had been a key factor in capitalism's acceptance of Social Democracy
2007-8  Runaway financialisation results in the sub-prime crash and "The Great Recession"
Government bank bailouts from public funds effectively bankrupt remaining welfare states.
Austerity policies to reduce deficits depress earnings and feed into populist anti-government revolt
2016 Brexit referendum and Trump presidency
2017 Turkey "coup" enables anti-democratic, anti-secular shift
IT technology causes intense competition
    Rate of manufacturing profit continues to fall
    Automation and outsourcing contribute to unemployment and zero-hours work
2018 Democracy becomes an obstacle to oligarchical capitalism
     Universal Basic income touted as a solution for the underemployed
     1% own 70% of wealth
Middle East and Latin American wars create mass emigration crises
Those feed anti-immigration populist movements throughout Europe, US and elsewhere.
This time there is no UK/US/USSR alliance to combat any worldwide authoritarian oligarchy.  

I repeat, overtaken by neoliberalism and after that by – what? Various oligarchical economic orders that are growing in China, Russia, Turkey, the Middle East and elsewhere are unlikely to prevail in the UK, the EU or the USA, despite the best efforts of Trump, Boris and assorted europhobic parties, but any progressive alternatives to them are very hard to discern. In particular the UK Labour Party and US Democratic Party are both in a totally unfit state to halt the right-wing tide.

The Labour Party is split. The Corbyn Left remains in thrall to ideas of state socialism and anti-colonialism that the older leadership absorbed during their 1968 student days: they appear incapable of fully renouncing romantic revolutionary rhetoric and declaring themselves ‘radical social democrats’, preferring the weasel-formulation of ‘democratic socialists’. The Blairite Right remain unable to distinguish between neoliberalism and social democracy, call themselves social democrats and hence inflame the Left’s rejection of the name.

In between these positions there are those, rather few and not in positions of power, who cogently argue that a return to social democracy is no longer feasible, partly for economic reasons (global transformation of industries and work by the US giant internet corporations is eroding the tax base), but also for sociological reasons (growing individualism of the electorate, growth of identity politics). I’m tempted by such arguments myself, but still resist them because to accept means either learning to live under oligarchy, or a faith that I can no longer sustain in some kind of non-state, libertarian form of sharing economy. All history suggests it would be far too fragile to survive the current world.

Nowadays my opinions are formed less by Marx and Debord, and more by James K. Galbraith and the French sociologists Boltanski and Chiapello. Galbraith’s “The Predator State” is still the most radical critique of the asset stripping of welfare states, while Boltanski and Chiapello’s “The New Spirit Of Capitalism” lays bare the means by which the new Silicon Valley style of entrepreneurial capitalism, assisted by neoliberal finance capital, demolished the older ‘Fordist’ style of corporate capitalism – which was of course the soil in which social democracy flourished. It was the full employment and unionisation created as a response to Fordism that made possible the welfare state, and its demise is what has given us the zero-hours gig economy.

So my ‘what?’ question can be rephrased as, is the battle actually over? Has the large, paternalist corporation been utterly trounced by what Richard Barbrook has called The Californian Ideology, the Amazon/Apple/Google/Facebook view of hip libertarian capitalism. Until recently I’d probably have said yes, but what’s changed my mind comes from a most unlikely source, namely one of those very same Californian Ideologists, Steve Blank, adjunct professor of entrepreneurship at Stanford, lecturer at UC Berkeley’s Haas School of Business and senior fellow at Columbia.

Before entering academia Blank was himself a Silicon Valley entrepreneur, in its earliest days. Around 1978 he helped found Zilog – maker of the first successful personal computer CPU chip the Z80 (on which I first learned to program and wordprocess in Wordstar!) - and later worked with the supercomputer companies MIPS, Convergent Technologies and Ardent. What caught my eye was a recent article he wrote about Elon Musk’s Tesla and the future of the Californian model, which you can read on Medium here.

It’s a compelling argument from the history of the American automobile industry: the giant General Motors was actually started by a brilliant entrepreneur in the Musk mould, called Billy Durant, of whom no-one has even heard nowadays. He was unequipped to weather the transition from innovative start-up to mass production and lost control of his company, which went on to become the epitome of a Fordist corporation, beating Ford at its own game. Things aren’t nearly so different in the current economy as we’ve all been lead to believe.

Over the next few years we’re going to see a war for the electric vehicle market between Tesla and the big, still somewhat paternalistic, European makers BMW, Mercedes, Volkswagen and the outcome is not a foregone conclusion. We might also see battles between the US, EU (and even possibly Chinese) states and the giant Silicon Valley corporations whose wealth and influence now make them a threat to state power and whose evasion of taxes is a threat to global stability. The outcome there is no foregone conclusion either. To paraphrase what Joe Stalin once asked about the Pope, “how many divisions” do the Silicon Valley corporations have? Well, none, but a Pope is still here while Stalin is long gone, Putin notwithstanding. State power is everywhere threatened by modern populism, and while Silicon Valley entrepreneurs have mostly been ‘liberals’ in the American sense – socially liberal supporters of the Democratic Party – would they stay that way under pressure? They have unprecedented funds to do deals with some suitable demagogue.

We’re at a great fork in history, where unpalatable as it may be, the Left might find itself having to side with older, global corporations as the lesser of evils, against these 'disruptive' new juggernauts with their blithe unconcern for peoples' livelihoods. To get elected Donald Trump promised his voters jobs (plus a lot of less wholesome things), but he can’t ever deliver those jobs because the backers of the Republican Party, which he only appears to control, would never permit it. The chance of the US Democrats returning to power with a mandate to nationalise Google and Amazon is zero (ditto for Labour in the UK). The chance of displacing rentier/finance capital from its grasp on the big corporations is about the same. The chance that some stratum of the top managements of the world’s corporations will wake up to the fact that putting everyone out of work will eventually destroy the market for their products is somewhere above zero, but their next bonus will soon cure that.

So what’s the answer to my original question - can social democracy be revived? The best I can offer is this mega-hypothetical. It could were a party to achieve power that understands what social democracy means - that is, an armistice in the class struggle rather than a victory for either side - and were strong enough to tackle the giant corporations and make them pay fair taxes and create well-paid jobs. Few such parties have ever existed (perhaps Labour in 1945, in Scandinavia and Germany in the 1960s), and none do now. Such parties aren’t created by a few people scribbling a manifesto, they grow out of mass movements that aren’t in evidence anywhere in the West at the moment, though they may be elsewhere. It took the devastation of two World Wars to build such parties last time: it might take something as drastic, like climate change, to achieve it again.

Dick Pountain/Caustic Comments/ 12th August 2018 13:29:49


  1. For some time I have thought that climate change and the need to develop ecologically sustainable economies were, sadly, the best hope for the sort of social democracy we began losing in the 1980s. It has the potential to be as big an upheaval and threat as the 2nd World War, and hence to force a realignment along more socially and economically cooperative and egalitarian lines.
    Problem is that, as that brilliant Andrew Sullivan article argued, the sort of institutions that might work in that direction are precisely those that the Trumpites and their allies and acolytes are targetting for a corrosive onslaught. Despite his risible side, Trump’s regime has tilted the USA tax system even more towards the wealthy and has badly damaged both the climate change deal and the Iran. Maybe we have to try to see around Trump, but at the moment any attempt to just brings look-a-likes into view - Erdogan, Johnson, the Italian right etc....
    I wonder whether things felt this desperate in the early 30s? Could anyone then have seen that the post War worl was possible?

  2. Agree 100%. 'Seeing around Trump' is the best anyone can manage until we see how the precarious power balance between him and the US legal and defence establishments pans out (and I doubt if any of them would bet on the outcome this week).


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