"A very good article on economics, as you'd expect from Krugman, but this election is about politics. Austerity is really about punishing 'welfare scroungers' and the immigrants who 'steal our jobs'. The Tories and UKIP are succeeding in selling this story to a large part of the public. Never underestimate the desire to punish. Labour is trapped by this story, as it can't be seen as soft on either scapegoat group. It's not about the real economics at all."That reply contains the kernel not only of my critique of Labour's recent campaign and policies, but also of my analysis of the crisis of social democracy all over the world. The Tories have managed to sell their rationale for austerity thanks not to a superior grasp of economics, but rather of social psychology: they spotted and capitalised upon a shift of public mindset to which Left ideology has made Labour blind. A standard trope in most recent Left analyses of neoliberalism is that one of its most important effects is the promotion of the economic over the political, the invasion of the social world by market forces and pricing. The conclusion drawn from such an analysis is that the Left needs to assert a more powerful moral position, to mount a Gramscian counterattack which substitutes empathy and social solidarity in place of commerce and competition. This conclusion, that the Left needs to become more moralistic, was a major factor in the recent defeat. A new critique is certainly necessary, and it does indeed need to start from non-economic grounds, but from social psychology rather than morality.
Since World War II, and at an accelerating pace from the 1960s onwards, affluent Western societies shifted from being mostly organised around production (which we've largely outsourced to the East) in favour of services and consumption. This seismic shift created a profound change of mindset, or character if you prefer, among the population. The type of bourgeois individualism preached by Rousseau and analysed by Max Weber placed a high value on work as a source of both identity and virtue, but our post-60s individualism is more hedonistic, even narcissistic. We've lost most of our deference to authority and adopted in its place a prickly sort of confidence that recoils from any kind of political paternalism. Most of us tend to value pleasure and personal autonomy over social solidarity (except towards family), and sentimentality (rebranded as "emotional honesty") over stoicism. And in recent years the advent of social media like Facebook and Twitter have reinforced this shift enormously, especially among the young, bringing us to the cult of the "selfie".
In the UK dwindling faith in organised religion has lead to morality becoming more personal, arbitrary and even contradictory: on the one hand we dislike people being "judgemental" toward us, while on the other we mercilessly refuse forgiveness to transgressors like "love rats" or celebrity paedophiles. The prevalent attitude of "middle England", of the tabloid press, indeed of a narrow majority among most Western populations, it presents many such contradictions which doom to failure any attempt to analyse public opinion in terms of Left versus Right (or, in the USA, Liberal v Conservative). A deep adherence to personal autonomy might lead someone to support gay marriage while opposing immigration, to resent anti-discrimination laws, to support taxes to pay for the NHS but not for foreign aid, and to despise those who depend on welfare. And this unreadability is compounded by a growing generation gap.
The 35 years following the end of WWII saw governments that were in effect social democratic, even when sometimes called plain Democrats (USA), Christian Democrats (Europe) or one-nation Conservatives (UK), who constructed welfare states that guaranteed a high degree of security in employment. By contrast the last 35 years have seen free-market reforms - under both Tories and New Labour - claw back much of the power that organised labour acquired after WWII, resulting in far less secure employment, and with rewards for the lower-paid static or even falling. Over the period we've witnessed the rising power of the mass media and "celebrity culture", accompanied by a divorce of remuneration from productivity among the upper echelons, a phenomenon that Robert Frank and Philip Cook called "The Winner-Take-All Society" and Slavoj Žižek has dubbed the "surplus wage". Top executives, artists, performers, fashion designers and the like behave like self-selecting, invitation-only clubs in which the rewards are orders of magnitude greater than those for normal jobs.
Young folk in their 20s and 30s are faced with debt and uncertainty, only slightly counterbalanced by the small but real possibility of entry - if they're both talented and lucky - into these "creative industries" which might bestow great wealth. Two generations of left-leaning teachers (the ones Michael Gove would have loved to eradicate) have inculcated values of anti-racism and ecological awareness deeply into most of these youngsters, while popular culture adds a topping of sex, drugs and <insert any one of two hundred+ new genres here>. Old folk in their 60s and 70s on the other hand, faced with a similar loss of certainty, security and identity are offered no compensation beyond a free bus pass: they're among those tempted toward UKIP, toward transferring some of their pain onto scapegoats like immigrants and "welfare scroungers". Fundamentally opposed as some of their attitudes are though, these different age cohorts share a profound dislike of ideology, a keen nose for hypocrisy and contempt for politicians, and - as rampant individualists, forced to forge their own character rather than accept those imposed by work and church - an unprecedented sensitivity to tone.
Commentators on the election debacle seem puzzled why the list of Labour manifesto policies - some stolen from the Tories, some sensible and progressive - failed so badly to capture public support. The answer isn't in the policies' content but the tone in which they were delivered. Ed Miliband performed far better than expected on television, and even managed to convey a degree of passion. It was exactly the wrong sort of passion. Agreeing to continue austerity-lite might have been expected to cover both bases, prudence and compassion, but it wasn't believed because it was delivered without the Tories' special spice, punishment. (It's not only "cheats" and "scroungers" that need spanking, but also a little smack bottom for ourselves for running up so much debt during the boom years). Immigration was equally fraught. Every TV interviewer from Jeremy to Krishnan asked rival politicians the question "how many new immigrants is too many?", and of course received no answer because a liberal-minded orthodoxy forbids such a quantitative approach as potentially racist. A sizable proportion of the public think the answer is "not many" but they bitterly resent being accused of racism and so don't express it: instead they allow Nigel Farage to express it for them in his well-rehearsed, cheeky-bar-room-wag manner. This question is pure poison to Labour politicians, from whom it brings out their inner Methodist. The 2015 public hates to be lectured or scolded more profoundly than any before. This mindset - descendant from what David Robins and I called "Cool" in our 2000 book - is not reversible by hectoring or propaganda but is a result of structural changes in the nature of work, and it's wholly at odds with the prevailing voice of the Labour Party.
The same problem affects, or will soon affect, social democratic parties the whole world over as electorates recoil from the collectivist moral tone that's formed the basis of social democratic thinking for a century, which renders them more amenable to libertarian and free-market rhetoric even where that directly threatens their "real" interests. Labour's recent defeat is the culmination of a process that's been more visible than ever since 2008: Alistair Darling and Gordon Brown's prompt action really did save the world's banking system from collapse, but rather than thanks they get blamed for rescuing greedy bankers; the extent of global inequality is widely known and understood, but attacks on the "1%" get brushed off as envy; the crooked bankers, financiers and tax evaders who precipitated the financial crisis and still profit from it today aren't pursued with any great moral outrage, but instead the Tories' wafer-thin excuse that they are the "wealth creators" is swallowed. There's a complete disconnect between economic facts, Labour's analysis of them and the public's perception. It's a Habermasian failure of communication that can't be fixed by quoting Habermas (that only makes it worse). Labour needs more than just a new language: it needs to reorient its whole relationship to civil society and the state if it is to survive, which is by no means guaranteed.
Social democracy does not mean employing reformist rather than revolutionary means to achieve a state-socialist society. It is not an alternative way of "winning" the class war. Instead social democracy is an armistice in the class struggle, whereby the employed classes agree not to expropriate the employing classes in return for a fair share of the profits, paid not only through wages and salaries but through free or subsidised services like health, education, firefighting, policing and so on, administered by the state and financed by universal progressive taxation. The economy remains resolutely mixed, with publicly-owned utilities operating alongside private firms, and with unions representing the interests of the employed. Social democracy in this sense has been the dominant type of economy throughout most of the Western world for 70 years, even when it doesn't use that name. That least social democratic of nations, the USA, still hasn't repealed every trace of Roosevelt's New Deal, while every UK Conservative government since the war, Thatcher's included, has been forced to live with a large degree of social-democratic compromise. However this compromise is now under attack as never before, and the result may well a complete breach of the armistice.
Since the 1980s many centre-right commentators have been predicting the collapse of social democracy on economic grounds, as a failure of Keynesian economic management, but this is only a small part of the problem. The real problem is a deep structural problem with the second half of its name, "democracy". Social democrats eschew revolutionary violence and authoritarian rule, governing populations who are free to live as they wish, within the constraints of a market somewhat moderated by redistributive welfare measures. Society remains divided into classes, some of who own means of production and others who don't.
Classes aren't biological entities and your class is not encoded in your DNA, though it most definitely is greatly affected by your birth, that is by your parents' position in the hierarchy of ownership. Since class isn't biological it must therefore continually renew itself (humans have a finite lifespan) by sifting and sorting, recruiting and rejecting new members into each class, and two of the most potent class-forming forces in modern Western democracies are housing and education. The deeper crisis of social democracy isn't so much the funding of welfare through taxation (important though that is), but more to do with a movement among the middle classes to segregate themselves from the working classes, both geographically and educationally, thanks to their superior exploitation of their economic freedom. Ideologues of the Right understand these forces as well as, maybe better than, those of the Left, and Conservative governments ever since Thatcher have been devising policies to accentuate this defection and division - with an effect that far exceeds their hopes since they're pushing at an open door. The middle classes are tremendously effective and self-organising in their desire to defend higher remuneration and superior social status through housing and school choice. Those countermeasures that social democrats once employed during their successful era, provision of social housing and excellent state education, have ceased to be effective.
Social democracy has been eroded by an interlocking set of sociological vicious-circles. Its very success in expanding the consumer economy after WWII lead to an affluence that increased the confidence of the middle classes, while the high wages achieved by the working classes prompted manufacturers to outsource production to the orient. Politicisation of education combined with a collapse of deference lead to a decline in the quality of state education, drove more and more of the middle classes back to private schooling, and produced a barely-employable underclass of undereducated youth. Loss of deference toward the professions, coupled with a deskilling of many arts through new technologies, lead to growth of a "creative class" and stimulated the aspiration to enter this class, to escape from wage labour into creative, non-manufacturing jobs and bohemian lifestyles: Žižek's "surplus wage" and the zero-hours contract are two sides of the same debased coin.
This being the case, why not just let social democracy die, mutter RIP, and wipe away a small tear? One good reason is that it's indispensable for the survival of the human species. The alternative of state socialism was tested to total destruction by history (and let's waste no more time on all that sectarian bullshit about "actually existing socialism" versus "deformed state capitalism" and the rest). The alternative of totally free markets is about to be tested to destruction right now, but this time the destruction will affect most lifeforms on the planet through increasing ecological catastrophes, through mass migrations, through financial meltdown and universal impoverishment. Social democracy on a world scale is the only imaginable way that the necessary regulation can be applied to steer capitalism back toward sustainable progress, and reverse the defection of a tiny super-rich minority at everyone else's expense. Social democracy really is just an armistice, and the result of breaking it won't be some kind of benign anarchistic cooperation but rather an epidemic of terrible new forms of authoritarianism and mayhem.
If there's any role left for social-democratic parties in this changed world, it can only be as honest referees of the armistice. They can no longer be partisan advocates for either the middle or working classes. A social democratic party needs to re-educate the electorate about the necessity for a mixed, regulated economy, which might not be impossible in the UK given the British public's continued adherence to the NHS. It mustn't be afraid to call itself social democratic and to explain what that label means. It needn't suck up to "business" and finance capital in the lubricious way that New Labour did, but nor must it pander to the public sector and unions uncritically: it must remain a referee. It needs to seek cooperation with other international parties and institutions to pursue tax evading corporations vigorously and plug the revenue leaks that threaten to sink the ship of state. It needs to enforce equitable rules about employment rights, work-place safety and welfare matters, but its job is not to promote the public's aspirations, which are their own business, nor to judge their moral failures (except those that breach the law). In short it needs to step back out of people's personal lives and concentrate on the context and infrastructure that supports those lives. Abandoning PC rhetoric will be as a hard as giving up smoking, but it has to be done.
Starting a new social democratic party from scratch isn't a sensible option and the only party in the UK whose history suggests that it could become such a party again is the Labour Party: the LibDems have imploded, while the SNP can't help but be suspected of trying on a social-democratic mask over its nationalism. Whether or not a potential Labour leader exists with the will, charisma and political nous to reforge its broken halves into such a party is something we won't know for at least five years, perhaps a lot longer.