Reflections on Socialism in the Twenty-First Century: Facing Market Liberalism, Rising Inequalities and the Environmental Imperative 303033919X, 9783030339197

Citation preview

Claes Brundenius   Editor

Reflections on Socialism in the Twenty-First Century Facing Market Liberalism, Rising Inequalities and the Environmental Imperative

Reflections on Socialism in the Twenty-First Century

Claes Brundenius Editor

Reflections on Socialism in the Twenty-First Century Facing Market Liberalism, Rising Inequalities and the Environmental Imperative

Editor Claes Brundenius Lund School of Economics and Management Lund University Lund, Sweden

ISBN 978-3-030-33919-7    ISBN 978-3-030-33920-3 (eBook) https://doi.org/10.1007/978-3-030-33920-3 © Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Acknowledgements

This book project would not have been possible without the enthusiastic support of the contributing authors. Some have been part of the project since spring 2017, I suggested to some friends and colleagues in Sweden and abroad that, considering the decay of contemporary capitalism, it would be timely to discuss in a book project what happened to ‘socialism’ and its different brands, from the collapse of ‘real socialism’ to the success and problems of democratic socialism (social democracy primarily). We have had intense interchanges for two years, discussing, disagreeing and finally coming to an agreement on most issues. It has been an awesome project! Last but not least, I want to thank my wife and life companion, Helle Leth-­ Møller, for her unwavering support during all phases of this fascinating but at times problematic project. She has not only been supportive but she has also been a source of inspiration when I have at times been almost about to give up. That the book is now being published, is in large part thanks to her.

v

Contents

1 Introduction��������������������������������������������������������������������������������������������     1 Claes Brundenius 2 Possible  Socialisms and the Challenges of the Globalizing Learning Economy in the Anthropocene Age��������������������������������������    17 Björn Johnson and Bengt-Åke Lundvall 3 Social  Democracy and the Fate of the Swedish Model ����������������������    47 Claes Brundenius 4 The  Rise of Socialism in the United States: American “Exceptionalism” and the Left After 2016������������������������������������������   103 Jonah Birch 5 T  he Allende Government’s Attempt to Achieve Major Transformations in Chile: Lessons from Hope and Failure��������������   131 Sergio Bitar 6 Reflections on Socialism������������������������������������������������������������������������   149 Paul Singer 7 Tribute  to Paul Singer (1932–2018): A Socialist Activist��������������������   155 Fábio Sanchez and Fernando Kleiman 8 Cuban  Socialism at 60: Old Aspirations and New Realities��������������   167 Ricardo Torres Pérez and Claes Brundenius 9 Who  Can Save Us from Ourselves?������������������������������������������������������   189 Kenneth Hermele 10 Ecosocialism: A Radical Alternative����������������������������������������������������   199 Michael Löwy

vii

viii

Contents

11 Towards a Socialist Technology������������������������������������������������������������   211 Judith Sutz 12 The  Socialism of Yesterday, Today, and Tomorrow����������������������������   229 Rodrigo Arocena

Contributors

Rodrigo Arocena  University of the Republic, Montevideo, Uruguay Jonah Birch  Department of Sociology, Appalachian State University, Boone, NC, USA Sergio Bitar  Vice President Board of Advisers, IDEA, Stockholm, Sweden Claes Brundenius  Lund School of Economics and Management, Lund University, Lund, Sweden UNU-MERIT, Maastricht, Netherlands Kenneth  Hermele  School of Global Studies, University of Gothenburg, Gothenburg, Sweden Björn  Johnson  Department of Business and Management, Aalborg University, Aalborg, Denmark Fernando Kleiman  EES Department, TU Delft, The Netherlands Michael  Löwy  Emeritus Research Director in Social Sciences, CNRS (Centre National de la Recherche Scientifique), Paris, France Bengt-Åke  Lundvall  Department of Business and Management, Aalborg University, Aalborg, Denmark Ricardo  Torres  Pérez  Centre for the Study of the Cuban Economy, Economics Department, University of Havana, Havana, Cuba Fábio  Sanchez  Sociology Department, Federal University of São Paulo, São Paulo, Brazil Paul  Singer  Former Secretary of Solidarity Economy at the Ministry of Labor, Brazil Judith Sutz  University of the Republic, Montevideo, Uruguay

ix

Chapter 1

Introduction Claes Brundenius

The End of History was the title of Francis Fukuyama’s book (Fukuyama 1992), suggesting that with the demise of communism in the Soviet Union and Eastern Europe after the Berlin Wall, the consequence was that The Market had come out victorious after the Cold War, and now there was only one way ahead, and the savior capitalism would relentlessly lead to democracy. Now we know that this is not the case, and Fukuyama issued in 2006 an extraordinary mea culpa.1 Recent history shows that variants of capitalism can thrive well—and perhaps even better—with authoritarian regimes, and China is a case in point. Russia is another example, although economically not so successful as China. In Europe, pseudo-fascist governments have taken over in the name of capitalism and “illiberalism”: Hungary, Poland, and Italy, to name a few. The threat to democracies is real (Levitsky and Ziblatt 2019). In Brazil, an openly fascist president has taken over with the avowed promise to “crush communism” (Lula and the Workers Party) once and for all. Even in the United States—the beacon of freedom—the alternative right has taken over the White House. “Every age has its own fascism,” warned Primo Levi,2 and continued, “It does not have to arise through violence. It can suffice with the manipulation of the opinion, and the poisoning of the legal system” (Levi 1959).

 http://www.natcath.org/NCR_Online/archives2/2006b/052606/ss052606a.php  Primo Levi (1919–1987) was an Italian Jewish chemist and writer. He participated with the partigiani in Italy against both the fascists and the Nazis. In January 1944, he was arrested and sent to Auschwitz. He survived the Holocaust and is the author of several books, novels, short stories, and essays. 1 2

C. Brundenius (*) Lund School of Economics and Management, Lund University, Lund, Sweden UNU-MERIT, Maastricht, Netherlands © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_1

1

2

C. Brundenius

Widening Income and Wealth Gaps The growing income and wealth concentration can be epitomized by a report that demonstrates that the 26 richest people in the world own as many assets as half the world’s population together  (The Guardian 2019).  On the other hand it is true that income differences (measured in GDP per capita $PPP) between countries have narrowed between rich and poor countries generally speaking, and the extreme poverty in the Global South was estimated to have been reduced considerably (from 20 to 10 percent). Most of this reduction is accounted for by impressive reduction of poverty in big countries such as China, India and Brazil. This is, if course, a positive sign, and the reduction of poverty was one of the most important goals of the United Nations Millennium Development Goals. What is worrying is the widening of income (and of course wealth) gaps within countries, in high income countries, as well as in middle income - and low income countries. One of the first economists to draw attention to this new trend was Thomas Piketty (2014). Piketty argues – with convincing statistics- that inequality is an inherent necessity in capitalist development  – and this goes especially for wealth formation. “Patrimonial capitalism” is back, he says, pointing at the accumulation of inherited fortunes, with the creation of dynasties and oligarchies. Wealth concentration has been increasing since the 1970s worldwide, and is enormous today (Piketty 2014, 2019; WID 2019; Credit Suisse 2019). Also income concentration, expressed by the Gini index, is increasing in practically all countries (WID 2019). In the United States, the top 10% of the income earners accounted for 49% of all incomes in 2016, and 77% of all wealth. In other countries the concentration is also high (although not high as in the United States): Denmark 27% and 72% respectively), Sweden (28% and 69%), Brazil (42% and 73%), Russia (33% and 87%), South Africa (54% and 72%), and China (28% and 67%) (Brundenius 2017 and Credit Suisse 2019). Even more shocking is the share of the top 1% richest, both in terms of both  income and wealth: in  United States (21% of incomes, 42% of wealth), in  Denmark (6% and 29%, respectively), Sweden (7% and 18% respectively), in Russia (66% wealth), and in China (6% and 37%, respectively). In some countries data on the 0.1% richest is also available. In the United States, these 0.1% of the households had accumulated 22% of all wealth, or almost as much as the bottom 90% (Brundenius 2017). Several recent books are devoted to fact finding and analysis of this phenomenon with discussions on what can be done about it: Atkinson 2015, Milanovic (2016, 2019) Stiglitz (2012, 2019) and Weeks (2014) just to mention a few. Göran Therborn has done an interesting analysis in his book The Killing Fields of Inequality (2013). Inequality is more than inequalities in income and wealth. It is also access to schools, health, housing and transport- and above all POWER. Therborn shows that there is a strong correlation between inequality and life expectancy – even between locations that are quite close to each other.

1 Introduction

3

Sustainable Development and the Environmental Imperative “Sustainability” has been connected to with the notion of  “development” for quite some time. At the beginning the concept of “sustainable development” was linked to the debate on limits to growth and to population, and later also to the importance of social inclusion and equity. With the establishment of the new UN goals, the Sustainable Development Goals, attention has also been drawn to what has been called the environmental imperative. There is convincing evidence of the devastating impact of  climate change on the environment. Mankind is now  challenged with few alternatives left. The environmental imperative does not leave us with much choice. There is no Plan-B for the earth. This dilemma is discussed in two of the chapters in this volume.

Neoliberalism: From Casino Capitalism to Voodoo Economics Joseph Schumpeter published in Schumpeter 1942 his seminal Capitalism, Socialism and Democracy. In the book, he introduces his famous theory of the dynamics of capitalism. Through what he calls “creative destruction,” capitalism has an inherent, dialectic tendency to destroy its own institutions while creating new ones. This is good news. The problem is that in the long run capitalism is digging its own grave. Its survival depends on the initiative of entrepreneurs to innovate. The innovating entrepreneur is Schumpeter’s hero in the capitalist jungle. Can capitalism survive? “No, I do not think it can”, he says. His thesis about the capitalist system is that it is “its very success (that) undermines the social institutions which protect it, and ‘inevitably,’ creates conditions in which it will not be able to live and which strongly point to socialism as the heir apparent”. He says that his conclusion is not much different from most socialist writers, and “in particular from that of all Marxists” (Schumpeter 1950, p. 61). Although Schumpeter is considered to have been a Marxist (Rosenberg 2011), he was at the same time skeptical about socialism. It should be stressed that when he discussed socialism, his point of reference was the Bolshevik system in the Soviet Union. A curiosity: he does mention Swedish socialism as an “exceptional case” (“with its well-balanced social structure”), which would be “absurd for other countries to try to copy,” concluding that “the only effective way of doing so would be to import Swedes to put them in charge” (Schumpeter 1950, p.  325). For Schumpeter, it was the concentration of capital and wealth that would undermine capitalism itself and lead to what we today call casino capitalism. In Schumpeter’s time, most capitalists were at least interested in the survival of capitalism, thereby betting on “winners” on the stock markets. This lasted until the 1980s when neoliberalism took over with the beginning of what Susan Strange calls casino capitalism, that is, when stock markets begin to look like casinos in Las

4

C. Brundenius

Vegas (Strange 1986). In the book, Casino Capitalism (1986), she discusses the dangers of the international financial system, later confirmed by the 1997 Asian financial crisis. Casino capitalism is “a form of capitalism that is extremely volatile and unpredictable as a consequence of the ‘speculatively-oriented lifts’ in finance capital. There is a financial ‘contagion’ creating a huge instability in the international financial markets” (Strange 1997, 2015). Susan Strange saw five major trends: (1) innovations in the way financial markets operate, (2) the increased scope of markets, (3) the shift from commercial to investment banking, (4) the rise of the Asian investment markets, and (5) the removal of government regulation from banking. Strange argues for increased regulation and more substantial American leadership, which she believes is required because of the predominant role of the United States in the world markets. Joseph Stiglitz describes in a recent book, People, Power, and Profits (Stiglitz 2019), how capitalism works today. He is especially attacking the supply-side economics of Reagan and Thatcher. The trick was to lower taxes (especially for the already rich) and to deregulate the financial sector. But supply-side economics did not have the dynamic effects that supply-siders claimed. Supply-side economics had four goals: to reduce the rate of government spending, to lower taxes on income and capital gains, to deregulate the financial sector, and to reduce inflation by tightening the money supply. By encouraging people to spend and invest, the economy would gradually improve and would thus ensure the profitability of the financial markets and reward entrepreneurship. “Deregulation,” says Stiglitz, “especially of the financial market, brought us the downturns of 1991, 2001, and most grievously, the Great Recession of 2008.” Thus, lowering taxes does not have the dynamic effect that supply-siders claim. Thomas Piketty has, says Stiglitz, “demonstrated that lowering tax rates has actually been accompanied by unchanged or lower growth around the world.” “Reaganomics” did not convince George H.W. Bush, Reagan’s vice president, who said that supply-side economics was just voodoo economics. Entrepreneurship and innovators were Schumpeter’s heroes. But in the financial sector, a “financial innovation” is not necessarily a healthy sign. Many speculators in stock markets (especially on Wall Street) are increasingly behaving as if they were betting in a casino in Las Vegas. The difference, says Stiglitz, is that “on Wall Street (it) takes on a fancier name, a ‘derivative’, or a ‘credit default swap’, a bet on whether a firm or another bank is going to go into bankruptcy or near it.” So now “capitalists” can bet on whether other “capitalists” will get bankrupt—and make money on that! Stiglitz continues, This betting market exists because it is effectively insured by the government. If the loss is too great, the government will bail the bank out…The Dodd Frank bill tried to stop this kind of government underwritten gambling that had proved so costly. This kind of speculation had resulted in the $180 billion bailout of a single company, AIG—more corporate welfare in one fell swoop than had been provided to all of America’s poor through our welfare programs aimed children over more than a decade (Stiglitz 2019, p. 102).

1 Introduction

5

But this is not the end of the story. This financial innovation, derivatives, was the idea of Robert Merton and Myron Scholes together with the late Fischer Black. They developed a pioneering formula for the valuation of stock options. Their methodology paved the way for economic valuations in many areas, also generating new types of financial instruments that facilitated more efficient risk management in society. In 1997, Robert Merton and Myron Scholes received the Nobel Prize in Economics “for their breakthroughs in the theory of capital markets” (Weeks 2014). The Prize Committee was euphoric: “Markets for options and other so-called derivatives are important in the sense that agents who anticipate future revenues or payments can ensure a profit above a certain level or insure themselves against a loss above a certain level.”3 Merton and Scholes had in 1994 helped to create a scheme (hedge fund) for high-stakes speculation called Long-Term Capital Management. The scheme was an initial success but in 1998 it abruptly collapsed causing a loss to speculators of US$ 4.6 billion. This sad story is documented in Roger Lowenstein’s book “When Genius Failed: The Rise and Fall of Long-Term Capital Management” (Lowenstein 2000).  In his book The Roaring Nineties, Stiglitz calls that decade the “the greediest decade in history.” And now we are paying the price for it (Stiglitz 2003). That was probably true, until the following two decades. The stock broker Gordon Gekko proclaimed in the film Wall Street that “greed is good.” Donald Trump agrees. In his 2016 campaign, he exclaimed to devoted followers that “My whole life I’ve been greedy, greedy, greedy. I’ve grabbed all the money I could get. I’m so greedy. But now I want to be greedy for the United States.”4

Is There a Nordic Model? In August 2018, Fox TV business host Trish Regan opened her “show” with some references to the dramatic, tragic, and disastrous situation in “socialist” Venezuela. Then she continued (after a pause) to “another socialist country”—Denmark. “Like in Venezuela, Denmark has stripped people of their opportunities,” Regan continued. “Taxes are so high and welfare services so generous that no one wants to work.” That is not all: “nobody graduates from school because they are not going to be rewarded,” etc. This immediately led to comments from Denmark, of course. All political parties, from left to right in Denmark, denounced the stupidities coming out of Trish Regan’s mouth. But the interesting thing was that no party protested against the suggestion that Denmark was socialist! The same thing would probably happen in other Scandinavian countries if they were confronted with similar outrageous attacks on the “Swedish model,” or the “Norwegian model.” People are generally  https://www.nobelprize.org/prizes/economic-sciences/1997/press-release/  https://www.washingtonpost.com/opinions/what-drives-donald-trump-greed-and-greedalone/2019/09/26/927fccde-e099-11e9-be96-6adb81821e90_story.html 3 4

6

C. Brundenius

proud of the welfare systems they have in the Nordic countries.5 So can one talk about a Scandinavian or Nordic model? What is it in that case that unites them? The Nordic welfare model is considered to be the most general and universal one in the OECD, as regards free education and health services, gender equality, care of the elderly, family policy, and generous entitlements in general. The citizens enjoy long vacations (five weeks by law), which is the envy of many countries. The table below gives an indication of how the Nordic countries distinguish themselves from the rest of OECD. The differences might seem small but they are important. Labor participation rates, for instance, are higher (with some exceptions) because female labor participation is considerably higher, and they are higher because it is easier for women to enter (and stay) on the labor market than it is for women in many other OECD countries. The reason is that the Nordic countries all have family policies that encourage women to work, for instance, through easy access to affordable child daycare. It is of course difficult to put together easily understandable indicators that would describe a “Nordic Model”, but the table below is an attempt to highlight some areas where the Nordic countries seem to share characteristics that distinguish them from the rest of the OECD. 

 he Nordic Countries in Comparison with other OECD T Countries - 2018 Public social expendi­ GINI tures as disposable % of Countries income GDP Nordic Countries Sweden 0.28 26.1 Denmark 0.26 28.0 Finland 0.27 28.7 Norway 0.26 25.0 Iceland 0.26 16.9 Other OECD Switzerland 0.30 16.0 Netherlands 0.28 18.9 Germany 0.29 25.1 United 0.35 20.6 Kingdom

Success indicators global ranking Female labor participa­ Human Global tion rates development Happiness innovation Average (%) Index index index ranking 81.2 76.6 76.3 73.5 84.5

8 11 12 1 6

7 2 1 3 4

2 7 6 19 20

6 7 7 8 10

79.9 75.8 74.3 73.6

2 10 4 15

6 5 17 15

1 4 19 5

3 7 10 12

 Scandinavia actually only comprises Denmark, Norway, and Sweden, while the Nordic countries also include Finland and Iceland (plus Greenland and the Faroe Islands, belonging to Denmark). Scandinavia will here be used interchangeably with the Nordic countries. 5

7

1 Introduction

Countries United States France Korea Japan Chile

Public social expendi­ GINI tures as disposable % of income GDP 0.39 18.7

Female labor participa­ tion rates (%) 68.2

Global Human development Happiness innovation Average index ranking Index index 15 19 3 13

0.29 0.35 0.34 0.46

68.5 59.4 71.3 57.9

26 22 19 42

31.2 11.1 21.9 10.9

Success indicators global ranking

24 54 58 26

16 11 15 51

22 29 31 40

Sources: OECD (2019), UNDP 2019; United Nations (2019); WIPO (2019)

The Nordic countries generally  have a more sizable public sector  than other OECD countries. This can be seen, for instance, looking at social expenditures (primarily for health and social care). In Denmark, Norway, and Sweden, over 90% of the total social expenditures are covered by taxes (not only income taxes but also, for instance, VAT). All families with children get a generous monthly allowance for their kids. In the Nordic countries, old-age care (including public-funded pensions), plus assistance to disabled person, takes about half of all public social expenditures. Aging will be a growing problem in the future (discussed in Chap. 3 in the case of Sweden). The Nordic countries have also been known for their income redistribution policies. Income differences can be captured in the so-called Gini indicator.6 The Ginis  are still more equal than the rest of the  OECD and the Nordics  have all a considerably more equal income distribution than for instance the United Kingdom, Unites States, Japan, Korea and Chile. But income differences have been increasing also in the Nordic countries. All four countries had Gini coefficients as low as between 0.19–0.23 in the 1970s. Staffan Marklund, a Swedish specialist on welfare policies, warned already in 1988 about negative trends in Nordic welfare policies after the recession 1975–1985 and when neoliberal ideas were winning new souls also in social democratic parties (Marklund 1988). However, it is noteworthy that the Nordic countries also stand out as examples when it comes to annual success indicators that measure countries’ “human development”, peoples’ “happiness”, or the “innovation performance” in the different countries. The table above shows the results (in 2018) for three such indices in terms of ranking. The last column is a an unweighted average of the three columns.  For what it is worth as evidence, the Nordic countries as a rule show up among the top 10 in these annual success indicators. But as the reader can see, two European countries are “spoiling” the picture in the sense that the Nordic cuntries would be unique: Switzerland and the Netherlands that play in the same “top ten” division as the Nordic countries. Like-minded countries perhaps?  The Gini goes from 0 to 1, where 0 means 100% equality and 1 stands for 0% equality.

6

8

C. Brundenius

So can one then talk about a socialist, or social - democratic, welfare state? Yes, says Gøsta Esping-Andersen, the Danish renowned expert on welfare economics. He claims in his book Politics Against Markets: The Social Democratic Road to Power (1985) that by “de-commodifying” a large service sector—the growing public-­run welfare sector—did the Nordic countries actually gradually socialize piece by piece of “the functions of capitalist ownership” (Esping-Andersen 1985, p.  23). It should be stressed that much water has passed under the bridges since 1985. As shown in the Swedish case in this volume (Chap. 3), the Swedish model has been modified considerably. It has, in particular since the 1990s, become more “market adjusted,” or “more commodified.” In a later book, The Three Worlds of Welfare Capitalism (1990), Esping-Andersen maintains his thesis of “de-commodification as the politics of socialism” and furthermore talks of the “social democratization of capitalism.” He distinguishes three types of welfare systems: • Social democratic regime clusters, which “are composed of those countries in which the principle of universalism and de-commodification of social rights were extended also to the new middle classes.” The social democratic welfare state promotes welfare ensuring equality with high standards rather than minimal needs. The welfare system is committed to a full employment goal. “The right to work has equal status to the right to income protection.” • Liberal welfare regimes are characterized by modest, means-tested entitlements, targeted at low-income households. Social problems are solved with market solutions. Strict entitlement rules are often associated with stigma. Examples are the United States, Canada, and Australia. • The third type is conservative regimes, which tend to encourage family-based assistance, preserving traditional familyhood. The “corporatist” welfare state has its origin in Bismarck’s social insurance model Preussen (1862–1890). Of special importance in this corporatist tradition was the establishment of particularly privileged welfare provisions for the civil service (die Beamten).

So Why Socialism? That is a good question, and thousands of books have been discussing it. Most socialist experiences have ended in failure, while others have been more successful. Albert Einstein was undoubtedly one of the world’s most brilliant scientists. He was also a convinced socialist all his life. In 1949, he published a short essay in the Monthly Review, entitled Why Socialism, where he develops his belief that it is “the economic anarchy of the capitalist society that is the real source of evil.” And he continues: I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts pro-

1 Introduction

9

duction to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society.

Thus Einstein emphasized the need for “a planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child” and that “the economic anarchy of the capitalist society” is unable to have that long-­term vision. Such a planned economy is more than necessary now to tackle the growing income differences, social injustice, and not least the impact of climate change and environmental degradation. Erik Olin Wright was a remarkable Marxist sociologist, known for his bold envisioning  of what he called Real Utopias (Wright 2010). He was fighting with his cancer (acute myeloid leukemia) during all of 2018 but managed to write a follow up, “ a streamlined distillation of the central arguments”, entitled How to be an Anticapitalist for the 21st Century (Wright 2019). In this testament Erik Olin Wright proposes “varieties of anti-capitalism” as an alternative to discuss “socialism” in its numerous varieties. He hoped that his “arguments (would) convince at some people that radical socialist economic democracy is the best way of thinking about a realizable destination beyond captalism, but I did not want the book to seem relevant only to people who already agree with that vision” (Wright 2019). It is clear that socialist ideas and solutions are important to discuss and revisit today. Even Francis Fukuyama seems to admit this. In an interview with George Eaton in the New Statesman (2018), in connection with the publication of his latest book (Fukuyama 2018), he says that “if you mean redistributive programmes that try to redress this big imbalance in both income and wealth, then, yes, not only do I think that it (socialism) could come back, (but) it should come back” (New Statesman 2018).

The Book Project When we, myself and a group of colleagues from different countries, started discussing this book project in the spring of 2017, we agreed that the increasing inequalities and the environmental problems were the most urgent challenges confronting humankind. It was becoming evident that an increasingly myopic and greedy capitalist market will never solve the climate crisis nor the environmental imperative. Since all of us had some Marxist or loosely “socialist” background, the question was obvious: would a democratic socialist society be more apt to handle this serious situation? What about other problems such as work and welfare? Is a socialist-­oriented economy more apt to deal with welfare issues, including providing decent work for everybody? If capitalism, as we know it, is moribund and “real socialism” (Soviet type) is dead, why would socialism today be different? We developed at an early stage of this project what we called “Ten Guiding Lines for a Viable

10

C. Brundenius

Socialism.” The result was something that very much looked like a social democratic program, above all since we insisted on democracy being a prerequisite in the guidelines. At the early stage of this book project, I exchanged views with some of the other authors on “what a viable democratic socialism could look like.” We agreed on characteristics such as universal access to welfare (including free education and health services) and liberal values such as freedom of speech, press, and assembly. We also agreed on the importance of social justice, fair income distribution, and solidarity (both domestic and international). Solidarity, in contrast to greed, should serve as an incentive for human beings for the future. There was also unanimity on the principle that the learning-based society should be based on an environmentally sustainable economy.

Democratic Socialism and Karl Polanyi But then came the question: to what extent is this socialism? For instance, a welfare society is not necessarily “socialist” (see discussion above on the Nordic model!). Our discussion focused on the concentration of capital and the power of capitalism over the means of production. This was interesting since I discovered, when writing my chapter on Sweden, that this has been a problem that has haunted social democracy since its foundation in 1898! Is welfare a goal of socialism, or is it rather a means to reach socialism? Can economic democracy only be fulfilled through the socialization of the means of production? The socialization question was a hot issue when the Swedish Social Democratic Workers’ Party (SAP) conquered the government in 1932 (through democratic elections). A parliamentary “socialization committee” was set up to give advice—but it never finished its work.7 However, there were those in the party who suggested that “socialization” does not necessarily have to be the same as the state nationalizing private industry. It could also take place through the socialization of the consumption by citizens, of goods, but above of all of services (for instance, welfare). These ideas were later spelled out in a book called Functional Socialism: A Theory for Democratic Socialism by Gunnar Adler-Karlsson (1969). Ownership did not have to be socialized as long as their functions were socialized and thus kept under societal control. “Let us (instead of socializing ownership) deprive these capitalists—one by one— of their ownership functions, so that they within some decades just remain as powerless symbols from another epoch” (op. cit.). Adler-Karlsson no doubt got a lot of inspiration from Karl Polanyi,8 who wrote his seminal work The Great Transformation, being a contemporary with Einstein

 For details, see Chap. 3.  Polanyi (1884–1964) was a Hungarian-Canadian economic historian, residing most of his life in England, Canada, and the United States. 7 8

1 Introduction

11

and Schumpeter. Like these, Polanyi was very pessimistic about the capitalist market system, and he assailed the myth of an unfettered or natural free market and how inhuman it was to leave people to the dictates of the impersonal market (Frase 2016). Polanyi was a socialist all his life, “but in contrast to the Marxist tradition,” says Fred Block,9 “Polanyi defined socialism in terms of the extension of democracy into the economic realm.” According to Polanyi, “Socialism is essentially the tendency inherent in industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society” (Polanyi 1944). He thus differed with the Marxist tradition on the important point of property relations that was central for both Marx and Engels, claiming that the end of private ownership of the means of production was a sine qua non for socialism. Polanyi, in contrast, has a view that “democracy can be deepened by giving people greater democratic rights at the workplace and in  local communities, and they could then transform parliamentary democracies into institutions in which elected representatives really did what the voters wanted them to do” (Block 2016). It is argued that such social democratic class compromise is “inherently non-­ viable, and tends toward conflict and crisis” (Frase 2016). There are many examples where such attempts have failed. One is the frustrated Wage Earner Fund10 proposal in Sweden, and another is Mitterrand’s attempt in the 1980s to “push the boundaries of the social democratic compromise and was finally forced back by the power of capital.”

What This Volume Is About As the reader appreciates, a series of important questions beg to be discussed and perhaps also answered. The result has been a host of chapters that reflect on possible socialism today, from different angles. The reader will in this volume find thematic chapters as well as country studies. Perhaps some wonder why some country experiences are discussed while others are ignored. First of all, it would be impossible to cover all “socialist experiences.” The reason being not only the size of the book but also that we - the authors - do not necessarily agree on what are interesting, or even relevant, experiences. In some cases it has been difficult to find authors to write the story with an unbiased and critical view. Such cases have been Bolivia, Venezuela and Vietnam, - cases that we have had to abandon in the course of preparing this book. Chapter 2 in this volume is written by Björn Johnsson and Bengt-Åke Lundvall from Aalborg University in Denmark. It is entitled Possible Socialisms and the Challenges of the Globalizing Learning Economy in the Anthropocene Age. Contemporary socialism, they say, should be discussed in relation to two major

 Fred Block is an American sociology professor, known as an influential follower of Karl Polanyi  The so-called Meidner Funds, discussed in Chap. 3

9

10

12

C. Brundenius

challenges, the globalizing learning economy and the Anthropocene age. First, globalization has undermined the autonomy of national systems of innovation at the same time as knowledge and learning have become the most important sources of local and global wealth. Second, in the age of the Anthropocene, the total biosphere is deeply affected by human society, and almost the entire physical world that we encounter is man-made. This leads to a number of new environmental problems. Combining the two challenges leads to the conclusion that socialist societies can thrive only within new regimes of global governance and that they need to be able to accelerate learning along new trajectories combining knowledge from disparate fields. Major problems like inequality, migration, and global warming cannot be tackled without international collaboration and new forms of global governance. The Swedish welfare model drew international attention already in the 1930s when the American journalist Marquis Childs published the book Sweden: The Middle Way, praising Swedish “democratic socialism,” especially the full employment policies and the cooperative movement competing with the private capitalist sector. In Chap. 3, Claes Brundenius gives a thorough background to Social Democracy and the Fate of the Swedish Model. The chapter discusses the reasons why the social democratic party (SAP) gave up the original socialist model. In the 1930s, there was still a belief in the party that socialism (a welfare society?) could be achieved only by a gradual—but peaceful—socialization of the means of production. These ideas were abandoned after the war, when striving toward a welfare society became identical with socialism (but not for all social democrats!). The strategy instead was to increase tax returns through rapid economic growth, coupled with gradually increasing progressive income tax rates. This strategy worked well until the mid-1970s when international economic turmoil led to lower economic growth globally. With the neoliberal winds blowing in the 1980s, the social democratic government felt pressured to make compromises with the bourgeois opposition, not least since its electorate base began to erode (from about 50% of the votes before 1982 to about 25–30% after 2010). Sweden is today still a welfare society. However, the big problem is how to finance a growing welfare sector (with a growing senior population!). It is difficult and may even be counterproductive (the Laffer curve!) to increase progressive income tax rates, while the bourgeois parties instead insist on privatization and outsourcing of social services as panaceas, as they actually did when in power (1991–1994 and 2006–2014). What remains of the original social democratic system? Or is a third alternative—between capitalism and socialism—more viable and feasible? Jonah Birch, from the Democratic Socialists of America (DSA), has written a very interesting essay (Chap. 4) on The Rise of Socialism in the United States: American “Exceptionalism” and the Left After 2016. The chapter traces the rise of a new socialist movement in the United States, which crystallized in the aftermath of Bernie Sanders’ 2016 presidential campaign. Growing concerns over declining economic opportunities, rising inequality, and the effects of exploding student debt drove support for Sanders’ unsuccessful run for the Democratic nomination in 2016, under the banner of “democratic socialism.” Since then, the emergence of this new movement has been embodied in the rise of the DSA, which now has over 50,000

1 Introduction

13

members. This development, it is argued, reflects a historical irony that the traditional weakness of American socialism has now become an advantage. In recent years, the absence of an electorally viable socialist or social democratic party has also meant that, unlike in Europe, the United States left bore none of the stigma for austerity, inequality growth, and chronic economic instability. As a result, socialism is now seen by many younger Americans as a new and progressive force. The short-lived Popular Unity government in Chile (1970–1973) was a peaceful attempt to introduce democratic socialism in Latin America. This attempt is discussed in Chap. 5 by Sergio Bitar, minister in the Allende government. He reflects on the initial success of the Popular Unity program, the increasing obstacles (including sabotage), culminating in the military coup and assassination of Allende on September 11, 1973. The coup was carried out by General Pinochet and the armed forces in close collaboration with the CIA.  We knew the reaction of the United States after the triumph of the Cuban Revolution, so was this a signal that the empire in the North would not even tolerate a peaceful and democratic transition to socialism? Was this experience viable, or was it condemned to fail from the beginning? Bitar argues that it was a viable program, in spite of the United States and conservative opposition. He analyzes five factors that led to a deviation of the road chosen with important lessons for the future. The renowned Brazilian socialist thinker and activist Paul Singer has written a very thoughtful essay entitled Reflections on Socialism (Chap. 6). He died in April 2018 after a long militant life, a large part of it as an activist in the Workers’ Party (PT). Fábio Sanchez and Fernando Kleiman write a tribute to Paul Singer in Chap. 7. Paul Singer (1932–2018) wrote his Reflections on Socialism when he was Secretary of Solidarity Economy at the Ministry of Labor under Lula’s national government in 2008. This essay describes Singer’s political and academic trajectory and his role in the foundation of the Worker’s Party (PT), especially as part of the Lula government (2003–2016). It also reflects on Singer’s concepts of solidarity economy as a contribution to the debate on democratic socialism. During his life, Singer has been part of many political actions and discussions which are linked to the idea that socialism and democracy are closely connected or even cannot exist without one another. Its practical and theoretical consequences are discussed. Few revolutions have had such an impact on modern times as the Cuban Revolution in 1959, write Ricardo Torres and Claes Brundenius in Chap. 8, entitled Cuba at 60: Old Aspirations and New Realities. Numerous books, articles, and dissertations have been written about it. Opinions about it have diverged; the revolution has been an inspiration for many and contested and even detested by others. In 1961, the Cuban Revolution took a radical turn when Fidel Castro declared that the revolution was socialist and parliamentary elections were no longer on the agenda. This chapter is a review of major events, and turning points, in the life span of a 60-year-old revolution. After the death of legendary and uncontested leader Fidel Castro, the island is confronted with serious problems and challenges—not least with a huge democratic deficit. In Chap. 9, Kenneth Hermele from Gothenburg University, Sweden, presents a rather pessimistic view of the climatic and environmental disaster, asking who can

14

C. Brundenius

save us from ourselves? Although a socialist (in some way) himself, he is skeptical that even a planned socialist economic and social system can save the world. What is clear to each one of us as individuals, he says, seems to be beyond the grasp of our global governance structures as a whole. Nowhere are adequate actions toward real sustainability implemented. The question is why? The global socioecological metabolic regime of the last two and a half centuries, coupled with its powerful backers and beneficiaries, has proven to be a relentless driver toward ever more unsustainable patterns of production and consumption. It is not impossible that a democratic and socially acceptable shift from our present trajectory will be initiated, but the real question still remains: what political forces may propel such a major global shift? In Chap. 10, Michael Löwy presents a more optimistic scenario, suggesting eco-­ socialism as radical alternative for a red-green future. The capitalist system, says Löwy, is driven at its core by the maximization of profit, regardless of social and ecological costs, and is incompatible with a just and sustainable future. Eco-­ socialism offers a radical alternative that puts social and ecological well-being first. Attuned to the links between the exploitation of labor and the exploitation of the environment, eco-socialism stands against both reformist “market ecology” and “productivist socialism.” By embracing a new model of robustly democratic ­planning, society can take control of the means of production and its own destiny. Shorter working hours and a focus on authentic needs over consumerism can facilitate the elevation of “being” over “having” and the achievement of a deeper sense of freedom for all. To realize this vision, however, environmentalists and socialists will need to recognize their common struggle and how that connects with the broader “movement of movements.” Judith Sutz has doubts that “socialism” as a productive system is feasible, but on the other hand she thinks that technology can find inspiration in socialist ideas (Chap. 11). It is not possible to advance socialist values if the intellectual and physical tools with which we understand our world and try to modify society are oriented exclusively by capitalist goals. The attempt to conceive technologies able to advance socialist values regarding work and everyday life is jeopardized by the current ideology of a sort of technological TINA (there is no alternative) to the current technological trend. But history teaches us that technologies of socialist inspiration are conceivable and implementable and that indeed alternatives always exist. Making them happen is one of the greatest challenges to foster a better society for all. Finally, in Chap. 12, Rodrigo Arocena gives his reflections on the Socialism of Yesterday, Today and Tomorrow. Yesterday, he says “real socialism” was the future. It was a failure. This chapter explores the possible contributions of socialist inspiration to facing the challenges of the present. Major problems are generated by the unequal distribution of power stemming from the interactions between technological change and social relations that shape the capitalist knowledge society. Dominant trends include the rise of inequality and climatic problems. Alternatives could stem from socialist core values, characterized by the aim of extending democracy to all the realms of society, by means of rationally oriented collective action with deprived sectors as main actors. Examples of proposals are sketched.

1 Introduction

15

References Adler-Karlsson G (1969) Functional socialism. A Swedish theory for democratic socialism. Prisma, Stockholm Block F (2016) Karl Polanyi and 21st century socialism. https://www.opendemocracy.net/en/ karl-polanyi-and-twenty-first-century-socialism/ Brundenius C (2017) Challenges of rising inequalities and the quest for inclusive sustainable development. In: Brundenius C et al (eds) Universities, inclusive development and social innovation. An international perspective. Springer, New York Einstein A (1949) Why socialism? Monthly Review, May 1949 (Reprinted in MR on 1 May 2009) Esping-Andersen G (1985) Politics against markets—the social democratic road to power. Princeton University Press, Princeton Esping-Andersen G (1990) The three worlds of welfare capitalism. Princeton University Press, Princeton Esping-Andersen G (1994) After the golden age: the future of the welfare state in the new global order. UNRISD, Geneva Esping-Andersen G (2009) The incomplete revolution. Adapting to women’s new roles. Polity Press, Malden Frase P (2016) Social democracy’s breaking point. https://jacobinmag.com/2016/06/socialdemocracy-polanyi-great-transformation-welfare-state Fukuyama F (1992) The end of history and the last man. Avon Books, New York Fukuyama F (2018) Identity: Dignity and and the Politics of Resentment. Farrar, Straus and Giroux, New York Heertz N (2001) The silent takeover. Global capitalism and the death of democracy. Harper, New York Klein N (2015) This changes everything. Capitalism vs. the Climate. Simon & Schuster, New York Klein N (2007) The shock doctrine. The rise of disaster capitalism. Penguin Books, London Levi P (1959) If this is a Man. The Orion Press, New York Levitsky S, Ziblatt D (2019) How democracies die. Crown/Random House, New York Lowenstein R (2000) When Genius Failed. The Rise and Fall of Long-Term Capital Management. Random House, New York Marklund S (1988) Paradise lost? The Nordic welfare states and the recession 1975–1985. Arkiv förlag, Lund Milanovic B (2016) Global inequality. A new approach for the age of globalization. Basic Books, New York Milanovic B (2019) Capitalism Alone:The Future of the System that Rules the World. Harvard University Press, Cambridge New Statesman (2018) “Socialism ought to come back”. Francis Fukuyama in interview with George Eaton. New Statesman 17 October 2018 Nordic Council of Ministers (2018) Increasing income inequality in the Nordics, Nordic economic policy review 2018 Nordic Council of Ministers (2014) The Nordic model—challenged but capable of reform. http:// norden.diva-portal.org/smash/get/diva2:715939/FULLTEXT02.pdf Piketty T (2014) Capital in the 21st Century. Harvard University Press, Cambridge Piketty T (2019) Capital and Ideology. Harvard University Press, Cambridge Polanyi K (1944) The great transformation. The political and economic origin of our time. Beacon Press, Boston Rosenberg N (2011) Was Schumpeter a Marxist? Ind Corp Chang 20(4):1215–1222 Schumpeter J (1950) Capitalism, socialism and democracy. Harper & Row, New York, 2nd revised edition Stiglitz J (2003) The roaring nineties. Penguin Books, London Stiglitz J (2010) Free fall: America, free markets, and the sinking of the world economy. W.W. Norton & Company, New York

16

C. Brundenius

Stiglitz J (2012) The price of inequality. How today’s divided society endangers our future. W.W. Norton & Company, New York, NY Stiglitz J (2019) People, power and profits: progressive capitalism for an age of discontent. W.W. Norton, New York Streeck W (2017) How will capitalism end? Verso Books, London and New York Therborn G (2013) The killing fields of inequality. Polity Books, London The Guardian (2019) “World’s 26 richest people own as much as poorest 50%”. The Guardian”. 21 January 2019 Sanders B (2018) Where we go from here. Two years in the resistance. Thomas Dunne Books, New York Strange S (1986) Casino Capitalism. Manchester University Press, Manchester Strange S (1997) Casino Capitalism. Manchester University Press, Manchester (revised edition) Strange S (2015) Casino Capitalism. Manchester University Press, Manchester (second revised edition) Sunkara B (2019) The Socialist Manifesto—The case for radical politics in an era of extreme inequality. Jacobin Publishers, New York Weeks J (2014) Economics of the 1%. How mainstream economics serves the rich, obscures reality and distorts policy. Anthem Press, London and New York Wilkinson R, Pickett K (2009) The spirit level. Why more equal societies almost always do better. Allen Lane, London WID (2019) The world wealth and income data base. https://wid.world/ Chang HJ (2010) 23 things they don't tell you about capitalism. Penguin Books, London Wright EO (2010) Envisioning Real Utopias. Verso, London Wright EO (2019) How to be an Anti-capitalist for the 21st Century. Verso, London OECD (2019) OECD Statistics. https://stats.oecd.org United Nations (2019) Word Happiness Report 2019. https://worldhappiness.report WIPO (2019) Global Innovation Index 2019. https://www.wipo.int

Chapter 2

Possible Socialisms and the Challenges of the Globalizing Learning Economy in the Anthropocene Age Björn Johnson and Bengt-Åke Lundvall

Introduction In this paper, we take as starting point that contemporary socialism must be discussed in the light of two major challenges, the globalizing learning economy and the Anthropocene age. First, the old discussion of socialism in one country has taken on new urgency and new dimensions. While globalization has undermined the autonomy of national systems of innovation, knowledge and learning have become the most important sources of local and global wealth. Major problems facing humanity such as inequality, migration, and global warming cannot be tackled without international collaboration and new forms of global governance. Second, the idea that socialism should aim at creating and using new productive forces treating nature just as a bunch of resources to be exploited in order to create more wealth needs to be radically revised. In the Anthropocene age, the transition to socialism has to go hand in hand with new institutional relationships between social systems and Earth systems. Combining the two challenges leads, first, to the conclusion that socialist societies can thrive only within new regimes of global governance. Second, in order to cope with global challenges, they need to be able to accelerate learning along new trajectories combining knowledge from disparate fields. One may argue that any serious discussion of a contemporary socialism has to include a discussion of the history of socialism. Furthermore, a study of the history of socialism should include the evolution of the idea of socialism as well as of its actual, “real existing” forms. However, the number of different meanings and forms

B. Johnson · B.-Å. Lundvall (*) Department of Business and Management, Aalborg University, Aalborg, Denmark e-mail: [email protected]; [email protected] © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_2

17

18

B. Johnson and B.-Å. Lundvall

socialism has taken over time rules that out in the context of one single chapter. Instead, we will select a limited number of key aspects of socialism, which have been recurring elements in the discourse. We will pursue the discussion by presenting what we see as major “classical and new reasons to aspire for socialism.” We will use references to the real existing socialisms occasionally to illustrate some of the general issues. The reasons for aspiring toward socialism include both old and new arguments. The specific kind of socialism that people have had reason to strive for also includes established as well as new aspects. The same goes for the ideas about how to implement socialism—the thinking about acceptable and effective instruments has also changed over time. Expressed shortly, the questions of why we want socialism, what kind of socialism we want, and how to get there have changed quite a bit over time.

Why Socialism? Classical Arguments Many reasons to strive for socialism have been put forward. We begin by shortly discussing five classical arguments.

Ending the Exploitation of the Working Class By the late nineteenth century, after Karl Marx had influenced the discussion, socialism had come to mean a possibility to end the exploitation of the working class. The misery of the proletariat following the Industrial Revolution was evident to most people, and for socialists it seemed quite clear that capital accumulation, the fruits of which accrued to the capitalist class, was based on the extraction of surplus value through the exploitation of the working class. This was not only regarded as unfair in its own right, but the brutal forms it took, including exhaustingly long hours, miserable labor conditions, starvation wages, and child work, seemed increasingly unacceptable to broad segments of the population. The misery of the working class, which according to some interpretations of Marx would be increasing over time, became a powerful argument for socialism. Only a many-faceted class struggle for a socialist society could bring the exploitation to an end. Justice and equity were parts of the socialist vision from the beginning.

Socializing the Means of Production The question of who should own the “means of production,” i.e., the factories, the machines, the raw materials, and the land, was part of the socialist discourse more or less from the beginning. The workers did only own their labor power, nothing

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

19

else. The capitalists owned the factories and the landlords owned the land. Again, this was not only unfair; it also meant that the key to the future was firmly in the hands of the owning classes. They controlled the economic surplus and decided how it was invested. Socialization of the means of production meant two deeply related things: a more just income distribution and control of the capital accumulation. The necessity of socialization was widely shared in the labor movement, but its more precise meaning quickly became an issue. Robert Owen (1771–1858), one of the so-called utopian socialists, argued for cooperative ownership. Syndicalism (or trade unionism), which developed already within the First International founded in 1864, built on the idea that workers should take direct ownership and take over the management of the individual factories. In the Second International founded in 1889, socialism became more and more connected to state ownership of the means of production. Political control of the state and state ownership of at least the bigger firms was regarded as a basic characteristic of socialism. The labor movement soon became divided on the question of how to do it, by reforms or by revolution, but socialization of the means of production was not questioned until the development of the welfare state in the middle of the twentieth century.

Preventing Economic Crises and Unemployment Capitalism has always been riddled with unemployment, and in the labor movement, socialism has been seen as a promise of full employment. In Marx’ analysis, both the existence of a “reserve army of unemployed paupers” (theory of surplus value) and periodic crises of mass unemployment were inherent aspects of the capitalist mode of production. Only a socialist revolution could secure employment for all workers. After the split of the labor movement in a communist and a social democratic branch and, especially, after Keynes (1936) and Kalecki (1933a, 1933b) published their theories about the role of aggregate demand for the level of employment, the question of full employment under capitalism has remained open, and it is still a crucial topic in the economics discourse.1

 There are important differences between John M. Keynes and Michal Kalecki when it comes to explain why there may be resistance to full employment. Kalecki (1943) who introduces the concept of political business cycles points to the fact that long periods of full employment will lead to a strong position of workers who might use this power to claim a stronger say at work. To keep them at bay, it might be necessary to establish a period of prolonged unemployment. 1

20

B. Johnson and B.-Å. Lundvall

Planning for the Future The question of the role of planning in the economy was closely related to the ownership issue. Henri de Saint-Simon (1760–1825), who is believed to be the one who invented the term socialism, regarded a rationally organized economy based on planning as its main benefit. In a planned economy, production and distribution would in the short run be adjusted to the needs of the population. The long-run development of the society would be controlled by investment planning and thus by political priorities rather than profit maximization. Under socialism, a system of short-, medium- and long-term plans would substitute the “market anarchy” of capitalism. This vision was soon contested by the reality of central planning in the Soviet Union where the relations between markets and plans turned out to be a difficult issue both practically and ideologically. However, the possibility for some form of planning for the future has continued to be an argument for socialism, not the least in the current age of increasing global challenges.

Building Science-Based Societies From Saint-Simon and onward, socialists have regarded the possibility to utilize science and technology in a rational organization of society as one of the major advantages of socialism. Science, technology, and rationality could be turned into servants of progress by a combination of investment in education and research and long-term planning. “Science” has been a highly esteemed entity in the socialist discourse. The term “scientific socialism” was coined by Proudhon (1809–1865) to indicate a socialist society in which economic governance rested on scientific analysis rather than on utopianism and loose ideas. Later, Friedrich Engels (1820–1895) used the same term to describe Karl Marx’ analytical method. The socialist movement should, according to Engels, base its theory and praxis on the scientific method rather than on voluntary thinking, hence the dichotomy “scientific versus utopian” thinking. In the Soviet Union, the instrumental value of science spread from the realm of social, political, and economic analysis and debate to the realm of actual policy-­ making. Science was supposed to be able to tackle almost any problem society encountered, and this motivated heavy investment in both education and scientific research. The investments in science were, however, not reflected in economic and social results. It has been argued that the weak economic performance of the Soviet Union that was a factor in its political collapse reflected a too narrow view of the role of knowledge. While the scientific competences in the Soviet Union were substantial, the ability to bridge the gap between scientific and technical knowledge and its use in the economy and society at large was weak. Current development in China illustrates that the specific institutional setting is crucial for determining to what degree investments in science and technology will contribute to economic performance (Qian and Weingast 1996).

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

21

 re the Classical Arguments Still Valid in the Globalizing A Learning Economy? The distinction between owners of capital and workers has become somewhat blurred, but it remains important. The formation of wage earners’ pension funds and workers’ home ownership may offer them a share of capital income, while individual capitalists may receive part of their income in the form of salaries and bonuses. But still the big majority of workers’ survival depends on their working for a wage. The exploitation of work at the global scale has taken on new and even more dramatic dimensions—in the most recent years, most of the new value created goes to the superrich, and a small number of giant corporations control big proportions of all assets in the world (George 2015). The power to make investment decisions determining the future has become even more concentrated. When the temporary rule of Keynesian economic ideas ended in the 1980s and neoliberal ideas became dominant, unemployment was reestablished as a method to keep the workers’ struggle for higher wages and for influence at the workplace at bay. It is no longer seen as a task for economic policy to create “full employment.” Socialists in countries such as the USA and the UK increasingly refer to growth of “the precariat” constituted by workers who might find temporary employment but who remain in poverty in uncertain jobs (Standing 2018). Mass unemployment and underemployment remain sources of suffering and poverty at the world level. Planning taking place in capitalist economies aims at promoting economic growth at the national level in the context of global competition. Planning efforts must, therefore, not undermine efforts to attract capital from abroad. New tax regimes and restrictions in relation to financial transactions as well as regulations of working conditions and environment need to be designed so that they attract rather than repel private capital. These restrictions make it difficult to develop plans that are effective when it comes to deal with new global challenges such as increasing income inequality and global warming. Science and technology plays an increasing role in capitalist competition. Governments invest in education and in science with the aim to contribute to the increasingly global knowledge-based competition of their domestic companies. They also engage in protecting the privately owned knowledge of their national companies. But firms operating under market conditions tend to underinvest in knowledge, and austerity regimes imposed by the current financial regimes restrain efforts by governments to promote investment in knowledge (Tassey 2005). As China emerges as world leading in strategic technologies, Western politicians and mass media accuse China for stealing intellectual property, while they neglect the immense investments in knowledge in China and the incapacity to mobilize corresponding efforts to build a strong knowledge base in their own countries. Modern capitalism and globalization have not made the classical arguments for socialism obsolete. While workers in the rich countries, on average, have better living conditions than they had 100 years ago, the increasing income inequality and the underemployment of young people worldwide are produced and reproduced by

22

B. Johnson and B.-Å. Lundvall

modern capitalism. The concentration of ownership and the overarching principles of market regulation in a globalized economy leave little room for the kind of long-­ term planning necessary to meet the needs of future generations, including keeping human activities within safe planetary boundaries. Market economies tend to underinvest in scientific advance and technology.

Why Socialism? Contemporary Reasons The list of five classical reasons for wanting socialism discussed above is far from complete. Gender equality, anti-imperialism, giving workers access to the fruits of culture (literature, art, theater, music), and generally improved living conditions have also been important arguments for socialism already from the birth of the labor movement. We will, however, not comment further on this but turn to a number of arguments that have been added over time. With the divorce between the communist and social democratic parts of the labor movement, over the Russian Revolution, the start, development, and collapse of the Soviet Union, the system changes from the late twentieth century in China, and the development of welfare states in leading capitalist countries, the socialist discourse has become less connected to Marxism or Marx-inspired theory. At the same time, the meaning of the notion of reformism has changed, and the use of “socialism” as a vision of the future and signpost for political praxis has more or less vanished in the West. This has led to what may be regarded as an ideological vacuum. But at the same time it has opened up for new ideas and for a new kind of debate about why there is a need for socialism.

Ending Exploitation (in and) Between Countries In the early debate, the struggle for socialism was seen as international. Capitalism was an increasingly global system and had to be fought in all countries. Accordingly, it was difficult to imagine socialism established in one single country. If it was victorious, it would soon be defeated by a united international capital. However, after the defeat of a number of proletarian revolutions in Europe in the early twentieth century, Joseph Stalin (1875–1953) and Nikolai Bukharin (1888–1938) put forward the idea of “socialism in one country.” This may be seen as a pragmatic change of ideology since this was exactly the task that communists faced after the successful Russian Revolution. Since then the quest for socialism as a global system has been toned down, and currently the international coordination of socialist political movement is very limited. At the same time, the global character of capitalism has become more important, and the question of international exploitation has become a major issue. Different theories about “uneven and combined development,” for example, center-periphery

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

23

theories (Frank 1969) and dependence theories (Prebisch 1950), imply that net surplus value is moved from one country to another. This makes it harder to improve living conditions in peripheral countries, and practical solidarity across national borders has become a major issue in the struggle for socialism. As long as capitalist development is “uneven and combined,” some kind of postcapitalist system may be needed to end exploitation not only within but also between countries. In the current era, the access to knowledge has become a major source of national wealth. For low-income countries, strategies to build effective innovation system based on a strong science base and a skilled workforce have become crucial for reducing poverty and for catching up with the high-income countries (Cassiolato et al. 2003). In a postcapitalist system, international solidarity would have as a major element the sharing of knowledge with poor countries and regions.

Inclusive Political and Socioeconomic Systems Some of the classical arguments for socialism, notably ending exploitation, socialization, and planning, included aspects of what is now called “social inclusion.” The working class demanded a new role as subjects in the organization and development of society. But social inclusion is a broader and more diverse notion than contained in the classical quest for socialism. It has together with sustainability become a key aspect of development and can be seen as an important part of possible contemporary socialism. We can define inclusive development as a process of structural and institutional change that gives voice and power to the concerns and aspirations of otherwise excluded groups (i.e., women, poor people, disabled, ethnic and other minorities, etc.). Inclusive development redistributes the incomes generated in the formal and informal sectors in favor of these groups and allows them to shape the future of society in interaction with other groups (Johnson and Andersen 2012). It is clear that social inclusion today is not just about the working class in classical sense, and it seems reasonable that the widening of the concept should be a crucial part of any possible modern socialism. Current debates in the USA and elsewhere on class versus identity politics demonstrate that such a widening is not straightforward. How to balance the relative importance of politics promoting the interests of the working class (predominantly white male industrial workers) in relation to the social inclusion of other categories (black people, women, ethnical and sexual minorities) may become a major issue for the left.

Social Democracy in One Country? Social democracy is historically rooted in the socialist labor movement, and while it has renounced on the need for central planning and collective ownership, it shares the ideals of social inclusion with more traditionally socialist parties.

24

B. Johnson and B.-Å. Lundvall

The struggle of trade unions and the political activities of social democratic parties have led to the formation of welfare states where national citizens have access to a social security net. Citizens are guaranteed specific civil rights including the right to elect political leaders. The most inclusive capitalist economies are located in the North of Europe. In these countries, ownership to the dominant firms remains private, and the planning and coordination of the economy is strongly conditioned by the need to remain attractive to capitalist firms operating across national borders. Social democratic governments pursue what seems to be “the necessary policy” even when it leads to growing income inequality and to less social inclusion. In the new millennium, income inequality has grown quite dramatically in the Nordic countries and more than in the rest of OECD (Nordic Council of Ministers 2018). The classical problem of socialism in one country reappears as a problem to establish “social democracy in one country.” While small real existing socialist countries such as Cuba are exposed to systematic and explicit economic boycotts,2 social democratic governments in small welfare states are exposed to the reactions from “the market.” In the first case, the result is direct scarcities of specific commodities, while in the second case the result is a weak financial position typically reflected in outflow of capital and high rates of interest, followed by unemployment and austerity measures. These mechanisms have important implications for our understanding of how to move toward socialism. The issue of scale is important— big countries or unified continents have more leeway than small- and medium-sized countries when it comes to engaging in systemic change aiming at restraining the dominant role of global financial capital.

Constructive Answers to Global Challenges While internationalism has always been a part of socialist ideology, the idea that there are global challenges transgressing both social class and nation-state agendas is relatively new. If we look at the period after the Industrial Revolution, especially since the 1950s, human activities such as production, consumption, and transportation are increasingly affecting the whole Earth system.3 Some of the consequences are climate change on a global level, habitat destruction (especially by deforestation), soil degradation, and overexploitation of global commons, for example, oceans, freshwater resources, and biodiversity. On this background, it has been proposed that we now live in a new geological age called the Anthropocene (literally “the age of man”) (Crutzen and Stormer 2000; Crutzen 2002). In this period, the total biosphere is deeply affected by human society, and almost the entire physical  According to a UN report, the US boycott of Cuba inflicted a cost of 130 billion for Cuba (Reuters 2018). 3  The Earth system is the total system in which the biosphere, the cryosphere, the hydrosphere, the atmosphere, and the lithosphere constitute interacting subsystems. Socioeconomic systems are part of the biosphere and interact with all other subsystems of the Earth system. 2

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

25

world that we encounter is man-made. The Anthropocene leads to a number of “grand challenges.” Most of them are as exemplified above directly related to environmental sustainability issues, but also challenges like demographic change, increasing migration including refuging, food security problems, poverty, and increasing inequality are connected to the Anthropocene. During the history of human civilization, there is no precedent to the Anthropocene challenge. The earlier Holocene geological epoch (from the last ice age until now) was a period with remarkably stable climate with predictable seasonal winds and rainfall patterns and average global temperature staying within a range of 1  °C (Centre for Ice and Climate (n.d.), Marcott et al. 2013, Gaffney and Steffen 2017). The nature functioned as a relatively stable environment for human activity. But now the constancy of nature is changing. The climate changes, glaciers, and polar ice sheets melt faster, and species disappear at a greater speed than before. Nature is becoming unstable and cannot be used as a fixed background for economic and social development in the same way as before. Humans are no longer the sole actors on the scene. The Earth system with all its subsystems is changing, resisting, and interfering with the development of human societies. According to Latour (2017), we cannot understand the present widespread lack of political strategy and vision if we do not realize how much the situation has changed.

Planning in the Anthropocene In much of the socialist discourse, the future of society is formed by planning; visions about the good society are implemented through an institutionalized planning process. The macroeconomic plan guides investments that restructures society and makes it possible to both safeguard existing capacities and reach new goals. It is clear that in the socialist tradition planning has been regarded as an important means to meet different kinds of challenges. The Anthropocene does not basically change this. But the planning environment changes. Furthermore, planning is a term that is used in many ways, and it is not immediately clear what kind of planning that is required. For the purpose of our discussion in this chapter, we start with a rather general, partly intuitive but still well-established notion of macroeconomic planning: It is an institutionalized activity by an authority acting on behalf of society as a whole (i.e., not only representing specific sectors or interests). It prepares decisions to be taken by the government (or an intergovernmental authority) for the purpose of governing the development of the economy in accordance with some explicitly defined goals for the society as a whole.4 The idea of planning was an important aspect of the early socialist discourse. It was quite explicit in the writings of Marx and Engels, and Lenin was clear on the

 This definition is inspired by Johansen 1977.

4

26

B. Johnson and B.-Å. Lundvall

necessity of a planned transformation of the whole society after the revolution. The first national plan was the famous GOELRO plan for the electrification of the Russian Soviet Republic. After 1928, the development of the USSR was guided and managed with the help of 5-year investment plans in combination with more detailed annual plans for the coordination of economic activities. The planning systems were somewhat decentralized in the 1970s, but their main characteristics were reproduced until the end of the Soviet type of socialist systems in the 1980s. In some of the “Western” countries, ideas about comprehensive planning were first developed as a consequence of the economic depression in the 1930s. It was recognized that stronger responsibilities and powers of the state were required to secure high employment levels. The Second World War and postwar reconstruction implied a number of direct government regulations of the economy, but since then planning in this sense has gradually disappeared in favor of more indirect measures of monetary and fiscal policy. This means that the idea of macroeconomic planning diverged and developed very differently between “real existing” socialist and capitalist countries. In the post-Soviet Union capitalist world, there remain a number of reasons for planning. There is still a need to intervene for macroeconomic stability, the proportion of public consumption in total consumption is still high and maybe even increasing, the weight of so-called external effects in production and consumption is also probably increasing, and new private monopoly-like ICT-based network activities (Facebook, Amazon, Google, etc.) call for public regulation. To these “classical” forms of and reasons for planning, we must now add a new reason—the Anthropocene challenge and other grand challenges of our time shortly described above. These demand forceful investments in knowledge and in new technologies, infrastructures, production capabilities, transport systems, etc. To restructure production, consumption, and distribution in order to respect planetary boundaries and tackle increasing inequality and migration obviously requires both a strengthening of the knowledge base and strong planning institutions. The challenges cannot be solved by deregulation and markets. Furthermore, there already exist well-described, but so far not very much implemented, policy instruments to limit climate change, introduce more sustainable forms of food production, and protect soils, biodiversity, and water resources and many other things that are connected to the accumulated and still increasing human impact on nature in the Anthropocene. In addition, planning in the Anthropocene also has to take on board that the world now appears to be less certain and more contingent, complex, and volatile than before. Feedbacks and tipping points in the Earth system may make the ­long-­term effects of planning more uncertain. The frequency of unexpected and sometimes unwanted side effects may increase. It therefore becomes important to engage imaginatively with the constantly emerging present and pay attention to new opportunities. There is, in the present discourse about governance in the Anthropocene, a new focus on managing emerging problems in their concrete contexts in real time utilizing new types of data and sources of information and on socalled micro-­politics, i.e., empowering people based on their relational capabilities,

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

27

enabling existing potential interconnections (Chandler 2018). The UN Global Pulse program is an illustration of this tendency (https://www.unglobalpulse.org). Planning in the Anthropocene is still unknown territory, and any discussion of it easily becomes somewhat speculative. It seems clear, however, that it needs to cope with both immediate action in relation to climate change, loss of biodiversity, soil destruction, ocean acidification, etc., and action to increase resilience, adaptability, and flexibility to handle uncertainty about the behavior of the Earth system or, generally, to stay within planetary boundaries. To cope with this double challenge, society needs to, constantly, develop new knowledge and new competences. It may be useful to complement the planning system with a support system that gradually builds up capabilities to identify changes in the Earth system, for example, in terms of changes in the planetary boundaries and what may be required to stay within them. The biogeophysical and the socioeconomic subsystems of the Earth system have been studied in very different scientific domains, and the interactions between them are poorly understood and difficult to model. New cross-disciplinary research will be critical. New insights of Earth system science may make it possible to avoid undesired repercussions between socioeconomic and biogeochemical forces much more effectively than before. Planetary boundaries may be detected before they are trespassed, and counter-­ policies can be formulated and implemented. In effect, the planning system should aim at a transformation of innovation systems at all relevant levels, sectoral, regional, national, and global (Markard et al. 2012; Fagerberg 2018), and give new directions to the creation and use of knowledge relevant for coping with the Anthropocene challenges. There are presumably different ways to develop planning systems for the Anthropocene, but some already well-established methods to take new experiences and exogenous, noncontrolled factors into account may prove useful. An example may be rolling or sliding plans. New medium- or long-term plans are worked out every year always embracing the same number of years. This makes it possible to handle the fact that long-term plans are most reliable and relevant the first years and then become more irrelevant as actual events turn out to deviate more and more from what was first expected. This may prove to be a useful way to cope with new uncertainties in the Anthropocene. It is also well known that the success of a planning system depends on the availability and accuracy of different kinds of data. The Anthropocene implies a need for new kinds of information about the development of the Earth system and the interactions between its different subsystems. To produce and make use of such data requires that the planning bureaucracy includes relevant cross-disciplinary competences and is closely connected to the research front in Earth system science. All long-term planning, including socialist planning, is (or should be) situated within a vision of what kind of society one wants to develop and a strategy about how to achieve the wanted results. In the Anthropocene, a socialist vision has to include ideas about the substantive value of sustainable and inclusive development. The strategy needs to include how to establish a learning society to cope with grand

28

B. Johnson and B.-Å. Lundvall

challenges and radical change without endangering vital properties of the Earth system as a whole and its socioeconomic subsystem. Any attempt to establish a planning system for the Anthropocene will have to address a fundamental contradiction between the need to cope with uncertainties about the consequences of interventions on the one hand and the need for urgent action on the other hand. While uncertainties about the interaction between social, technological, and natural systems may point to a need to keep options open and to operate with decentralized and diversified decision-making, the other side of the coin is an urgency when it comes to act in relation to the threat of global warming and other threats related to the crossing of planetary boundaries. This is, for example, reflected in the call for transformative change within a 3-year period in six different areas (http://sciencenordic.com/scientists-three-years-left-reverse-greenhouse-gas-emission-trends). Additionally, there is already sufficient information on certain directions of change and of specific technological solutions that with a high probability would have a positive impact. In the case of global warming, it has recently been pointed out by the leading experts that changes in three spheres (food consumption patterns, transport systems, and energy systems) are both urgent and necessary in order to keep the raise of temperature within acceptable boundaries to avoid entering a hothouse stage (Steffen et al. 2018). In the present phase of development, the need for long-term planning is more acute than ever. Climate change and other Anthropocene challenges including inequality and migration transgress the limits of the nation state and have to be met on a global level. The United Nations Climate Initiative (COP) and the United Nations Sustainable Development Goals (discussed later in this chapter) may be seen as tendencies in this direction. At the same time, however, many of the Western parliamentary democracies (like USA, Great Britain, France, and Italy) are in a state of political crisis which make them reject many types of international coordination and focus instead on narrow national interests in short time perspectives. This contradiction may dramatically delay development of much needed long-term global planning initiatives and institution building.

Democracy and Planning The role, methods, and power of planning cannot be discussed in isolation from the question of democracy. In the Soviet Union and the Eastern European socialist countries, the question was raised in connection with the economic reforms for decentralization and increasing use of markets in the 1960s. For example, the Polish political economist Wlodzimierz Brus (1921–2007) argued on the background of the experiences of these countries that socialization could not be implemented by a quick, once and for all takeover of the means of production. Efficient planning, he said, required that both the construction of the central plan and its implementation by the firms were anchored broadly in the population and among the employees of the firms. This necessitated both political democracy on the national and local levels

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

29

and democracy in the firms including workers in management and organization issues. This could not be accomplished overnight, but there should be a steady process in this direction. Otherwise, planning would gradually lose popular support and become both less efficient and effective. This discussion, however, did not accomplish very much before it ended with the breakdown of the Soviet Union-type political and economic systems. Even if we cannot draw many conclusions on the background of the rather short experiences with planning in the Soviet Union and the Eastern European countries, the issue of democracy in long-term planning and, hence, in a new possible socialism remains difficult and important. A discussion of this requires at least a rough definition of democracy, since it is a term that has been used in many different ways. In our context, i.e., the role of democracy for the efficiency and effectiveness of long-term planning, it is important not to define it in a formal and narrow way as, for example, the existence of public balloting. This is of course important as a value in itself, but when it comes to anchoring planning in society, democracy should perhaps be understood as government by discussion and the exercise of public reasoning (Sen 2009). Public discussion and people’s participation have flourished in many places and times (not only in the West in modern times), and history has demonstrated an attraction (a value in its own right) of participatory government. In relation to planning, it seems important that public discussion includes both questions about goals and values in the long-term plans and instrumental questions of power and coercion. Modern parliamentary democracy does not in itself make long-term planning effective or easy to implement. In societies where domestic or international capital interests are strong, like in most parliamentary democracies, they may very well effectively oppose democratically based planning initiatives that circumscribe these interests. Private media, political parties, think tanks, and other organizations that influence public opinion may be paid to counter “socialist” or “Soviet-type” planning. Institutional reforms to make political parties and media economically independent and in other ways support a broad public debate may be an answer to this. Of specific interest in the context of environmental problems and climate change are the discussions of the relations between the historic occurrences of famines and access to information, the existence of political opposition, and generally the conditions for public reasoning (Davis 2001; Sen 1999). It has been observed that no major famine has ever occurred in a country with functioning democracy with regular elections, opposition parties, basic freedom of speech, and a relatively free media. Crop failures may be caused by “nature,” for example, by rainfall failures, but if they develop into famines or not is a socioeconomic and political question. This issue is important also for the reason that problems following, for example, climate change, deforestation, soil destruction, reduced access to fresh water, etc., are likely to hit socially weak minority groups of people first and hardest. The protection of these groups as well as timely attention to the risk for aggravation and spread of these problems may among other things depend on democracy, open media, and public reasoning.

30

B. Johnson and B.-Å. Lundvall

These arguments need to be considered in the light of the fact that democracy in no way guarantees adequate responses to environmental challenges. So far capitalist democracies have been slow or even unwilling to respond to the threat against the natural environment, while China, which lacks the traditional institutions of parliamentary democracy, recently, on the basis of investments in knowledge and long-­ term planning, has been successful in stabilizing its contribution to global warming (https://climateactiontracker.org/countries/china). As will be argued below, China’s real existing socialism has some specific characteristics that make it more resilient to crises than the classical soviet type. Those are rooted in a long historical culture and in experiences made from the cultural revolutions. The case of China illustrates that there are varieties of authoritarian rule as well as there are varieties of democracy and capitalism.

 n the Role of Innovation, Knowledge, and Learning O in Socialist Planning As pointed out above, historically, socialists regarded science both as a source of wealth and as a means to build societies responding to human needs. Technologies were seen as means to conquer nature and to transform natural resources into means of consumption and means of production. In the Soviet system, this ideology was combined with an institutional setup where science and research efforts were developed in organizations separated from the use of knowledge and with weak user competencies. With the exception of military-related technologies such as space and aviation, the rate and success of innovation did not correspond to the investments in science and technology. In the Anthropocene, there is a need to revise the socialist view on innovation, knowledge, and learning. On the one hand, the necessary transformation of production systems and of their relationships with Earth systems will require a speedup of knowledge production and innovation. On the other hand, there is a need to give new direction to those processes including a radical rethinking of the role of science and technology in society as going beyond transforming natural resources into material wealth. Developing strong local, national, and transnational innovation systems is crucial also for overcoming poverty. It has been a basic assumption among Marxists that the introduction of socialism would make it possible to develop productive forces that in capitalism were hampered by the combination of profit-seeking behavior and private ownership. In the age of the Anthropocene, an alternative view would be that the introduction of socialism would make it possible to gear the productive forces toward new objectives and make world development more sustainable. Forming participatory learning societies where ordinary human skills are continuously developed and regarded as equally valuable as scientific competences would change the very meaning of planning since it would allow ongoing feedbacks between central authorities and ordinary citizens.

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

31

What Kind of Socialism? We have discussed some old and new arguments for socialism with reference to problems and challenges that a socialist mode of production should be able to overcome. We now turn to the question if it is possible to envisage a new mode of production, which responds to the old and new reasons for socialism with the characteristics of a creative learning economy. What kind of socialism can overcome the limitations of current capitalism and promote and give direction to learning and innovation in order to respond to the national and global grand challenges referred to above? We take departure from a well-known comparison of capitalist and socialist modes of production. Plotting “ownership” of the means of production (private vs. collective) against economic “coordination mechanism” (market vs. plan), we get four types of economic systems: (1) Private ownership; market allocation (3) Collective ownership; market allocation

(2) Private ownership; planned allocation (4) Collective ownership; planned allocation

These have traditionally been called capitalist market economy, capitalist planned economy, socialist market economy, and socialist planned economy. Two of these, (1) and (4), are archetypal, and in textbooks about “comparative economic systems,” the USA and the Soviet Union were often given as concrete examples of these systems. Sometimes Germany during the Hitler regime was (dubiously) given as an example of a private planned economy and Yugoslavia in the 1950s and 1960s as an (also dubious) example of a socialist market economy. It was soon realized, however, that in spite of common crude political vocabulary and textbook simplifications, pure capitalist market or pure socialist planned economies did not exist in the real world. It was observed that in the Soviet Union state ownership was not hegemonic and far from everything that was planned. In the USA, there was substantial planning in the private sector, and many markets were regulated by the government. All real existing systems are necessarily mixed, but what kind of mix is viable? In the 1960s and 1970s, the Soviet Union and the Eastern European socialist countries introduced elements of decentralization and markets into their economic systems, but that did not prevent them from breaking down in the beginning of the 1990s. This indicates that it is not fruitful to look upon the economic system in isolation from the political and social systems as in the table above. Many things such as access to information, social inclusion, income distribution, public reasoning, and democracy affect how markets and plans work. It is clear that the Soviet-­ type systems lacked in these respects and that these were important factors behind the failures. There were also other obvious weaknesses in these systems. In spite of heavy investment in education and science, they never really became learning economies. The interactions between science and technology remained weak, and research

32

B. Johnson and B.-Å. Lundvall

results were slow to find their way to firms. Even in big firms, research and development activities were relatively isolated from everyday production, and workers were seldom given an active role in connection with technical or organizational innovation. The aim and size of this chapter do not allow a serious discussion of the many shortcomings of the “real existing socialist economies” in the second half of the twentieth century, but it seems beyond doubt that planning and collective ownership of the means of production are not enough. Socialization needs to be interpreted in both broader and deeper way than that.

China: A Flexible Autarchy? China’s economy was at the beginning of the 1980s organized along the same principles as the that of Soviet Union. There was a strong emphasis on state ownership and central planning. Advanced scientific and technological knowledge was concentrated in sector-specific institutes with weak links to the production taking place in the state-owned enterprises. The openness to trade and to foreign investments was quite limited. The reforms that were initiated by Deng Xiao Peng and his allies in the beginning of the 1980s started a gradual process that led to radical change in this institutional setup. First, the reforms introduced elements of capitalism in the form of private ownership and market regulation. Second, they introduced decentralization of important decisions to regional and local levels. Finally, they were combined with a rapid increase in international trade transforming China into an open economy. The reorganization of the economy and high rates of saving and investment—close to 50% of national income—resulted in high rates of economic growth. Between 1990 and 2010, the GDP grew by close to 10% per annum (9.98%) (World Bank). Of the different reforms, the move toward decentralization is perhaps the most important and also the most neglected among observers (Saich 2004). China is not a democracy and citizens do not have full human rights. There are certain issues that cannot be freely discussed in public debates such as the unique role of the communist party and the status of Taiwan. But the decentralization makes the system more responsive to new challenges. It introduced competition, diversity, and experimentation into what would otherwise have become a monolithic and autarchic system. The central leadership has allowed local governments and party organizations to go beyond what is mainstream policies, and in cases where the local experiments have been successful, they have stimulated the diffusion of new practices to the other regions. One interesting example of policy learning in China refers to the attempts to create markets for knowledge. As mentioned above, one of the major weaknesses of the Soviet system was the weak links between knowledge production and knowledge users in industry and agriculture. At the end of the 1990s, the Chinese responded to this by introducing reforms aiming at the creation of markets for

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

33

knowledge (Gu and Lundvall 2006). The government support to technological institutes and to universities was drastically reduced, and the expectation was that the knowledge-­producing organizations should create new income by selling their knowledge to public and private enterprises. It soon turned out that this did not happen at the scale that had been planned. There was no readiness among the enterprises to use resources to buy knowledge, and the knowledge institutions had to find other sources of finance. Several of them went into production of goods and services. One of the most famous ICT giants, Lenovo, was, for instance, started through a grant from the Chinese Academy of Sciences (Eun et al. 2005). Universities remain owners of other important high-tech firms operating globally such as Tong Fang owned by Tsinghua University. When this turned out to be a successful strategy, the political leaders at the central, regional, and local level endorsed them. When, later on, the structural weaknesses of mixing business and university in the same organization became obvious, the support was weakened. The combination of decentralization, policy learning, and pragmatism gives China capacity to respond to new challenges that is normally seen as characterizing democracies and as lacking in autarchies. It cannot be excluded, however, that the absence of democracy will undermine flexibility and the capacity to cope with different types of crises in the future. In this context, the prolongation of the rule of the current top leader is a bad sign.

China’s Attempts to Build a Knowledge-Based Economy China stands out not only for its high rates of economic growth. The rate of investment in education and research has been higher than what can be seen in the rest of the world. In periods when the rate of growth was around 10% per  annum, the investments in R&D were growing with staggering 20% per annum (Gu et al. 2009). In 2016, the national rate of investment in R&D was above 2% of GDP, above the averages for the European Union, and still growing with more than 10% per annum (OECD 2018). High priority of science and knowledge has roots in the history of China. The respect for knowledge reflects a heritage from Confucius. It is seen both among ordinary citizens and in the political and administrative system. For Chinese families, offering higher education of good quality for the next generation is perhaps the most important priority, and there is a willingness to make major sacrifices to bring sons and daughters to the best schools and universities. This is one explanation of the households’ high savings ratios. The communist party is based on meritocracy, and it actively makes attempts to organize the students with the highest grades already at the level of college education. Many of the very top leaders (the seven members of the Politburo Standing Committee) are former faculty professors from elite universities such as Tsinghua and Beijing University. Long-term planning efforts have been carried out with

34

B. Johnson and B.-Å. Lundvall

reference to China’s national innovation system, and the top leaders have involved themselves directly in designing policies aiming at strengthening the innovation capabilities in Chinese enterprises. For many years, these efforts to build a strong national knowledge base and to develop a strong national innovation system gave limited results. While expanding in volume, higher education and research did not appear to be of the same quality as in Europe and the USA. Bibliometric analysis referring to numbers of publication in high-quality journals and to citations reflected such weaknesses. The competitiveness of Chinese firms remained based on low wage costs, and most high-­ technology products exported from China came from non-Chinese firms operating in China. There were few Chinese patents with global validity. As a result, China’s leaders proposed a new drive toward “independent innovation” aiming at increasing the domestic capacity to innovate. Today, the situation looks quite different. China is number two after the USA when it comes to the production of scientific publications and highly cited scholarly articles (Nature 2018). The same is true for patenting, and it is expected that China will bypass the USA within the next 5 years (WIPO 2018). China has closed in on the USA in new fields of knowledge such as nanotechnology and artificial intelligence. It has developed advanced new platforms on the basis of ICT that have been used to integrate rural production of commodities and services in e-commerce, hereby creating jobs and reducing poverty in the countryside (Xia 2010). During the first stages of the major reforms and until recently, the access to public welfare services was very limited. Families had to save in order to pay for ­education and health services and to prepare for old age with very limited pensions. Also, until recently, income inequality was growing with the Gini coefficient reaching more than 50%. Only South Africa and Brazil were more unequal. Since 2010, inequality has been reduced, but it remains high with a Gini coefficient well above 40% (Jain-Chandra 2018). The growing share of enterprises that are privately owned and the extended use of markets indicate that the economy is more capitalist than socialist. But the strong element of state control and of long-term planning makes China stand out from capitalist countries. In economic terms, it is interesting to note that while there is little positive experience from trickle-down effects in the Western economies, the enriching of a small minority in China has gone hand in hand with a dramatic reduction in poverty in China. According to the World Bank (http://www. worldbank.org/en/country/china/overview), more than 800 million people have been lifted out of extreme poverty as China’s poverty rate fell from 88% in 1981 to 6.5% in 2012, as measured by the percentage of people living on the equivalent of US$1.90 or less per day in 2011. Poverty is now almost eradicated in China. Between 1990 and 2005, China’s progress accounted for more than three-quarters of global poverty reduction, and it is a big factor in explaining why the world reached the UN millennium development goal of halving extreme poverty worldwide.

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

35

China Engages in Developing Green Technologies China was slow to recognize the importance of the environmental threat. Within China, economic growth was given first priority, and there was little concern about the negative impact upon the environment. There are many extreme cases of pollution of lakes, rivers, and air. In international organizations, China representatives either denied that climate change was a real threat or they argued that the responsibility was exclusively for the more developed Western countries. Just after 2008, there was a wave of climate change-denying books coming out in China presenting global warming warnings as aiming at hindering the economic ambitions of China. But since 2011 the Chinese government has been clear in its ambitions to reduce CO2 emissions (Sandalow 2018). Today, a big majority of the population see global warming as a major challenge. China gave high priority to develop non-carbon energy technologies already in 2008, and it has taken on a lead both in wind and solar energy technologies. More recently (2013), the efforts to reduce smog and to limit the use of coal as energy source have reduced pollution. China is still the single country with the highest CO2 emissions in the world. But using a combination of market and regulatory mechanism, it has succeeded to reach above the CO2 targets set in connection with the 2015 Paris Agreement, and some experts (see, for instance, Brookings on https:// www.brookings.edu/blog/planetpolicy/2018/09/12/chinas-peaking-emissions-andthe-future-of-global-climate-policy/) think that China already has reached the point where CO2 emissions have peaked (something pledged for 2030). In the successful process of building a strong economy, China has deviated from what we have defined as socialist values. It has not offered their citizens civil rights. It has not promoted social inclusion, and it has created huge gaps between rich and poor. Growth has been bought at a high environmental price. But during this process, there have been new signals indicating that economic growth is not the single target. In 2006, the Chinese leaders presented their plans under the heading harmonious growth, and since then politics that reduce inequality, pollution, and CO2 emissions have been successful. As indicated above, the element of political decentralization of economic planning played a key role in the rapid industrialization behind the high rates of economic growth. But this process led to increasing inequality and to the destruction of natural capital. The change in focus toward social cohesion and sustainable development has reflected a recentralization. The instruments used in Chinese politics are sometimes crude, and sometimes initiatives overshoot reasonable ambitions. There appear to be both unnecessary human and economic costs with the processes of reform. But, so far, the form of governance has turned out to be able to adapt and respond to new challenges as they evolve.

36

B. Johnson and B.-Å. Lundvall

Lessons to Be Learned from the China Case The case of China illustrates that new combinations of markets and planning as well as new combinations of private and state ownership may be viable and conducive to economic development and perhaps even for sustainable development. China is neither capitalist nor socialist. It may be argued that the combination of decentralization of power and the merger between political and economic interests at the local level give the system features in common with a feudal economy. At the same time, this offers a unique combination of central planning for the long term and decentralized experimentation in the short and medium term. The leeway given to regional and local authorities to engage in new modes of governance and the readiness to generalize the lessons from local experiments have played an important role in avoiding that the system becomes frozen and captured in a stationary state. The pragmatism of leadership when it comes to the use of alternative forms of economic governance has played an important role in shaping the development path. The strong element of long-term strategic planning and the very ambitious investments in science and technology have made it possible to establish China as an economic superpower. A critical factor explaining why China could develop its own model for economic growth in a predominantly capitalist world is the size of the country. As the economy was opened up and income level was growing, foreign investors were attracted to the huge home market, and the size of the economy makes China less vulnerable when exposed to financial speculation and trade conflicts. China cannot serve as a model for how to build socialism. First, China’s development reflects its unique history and geopolitical position. Second, China is far from the ideal of a participatory democracy, and it has not been able to establish a creative learning society. But the case of China demonstrates that a strong focus on building a strong knowledge base, combined with long-term central planning and local experimentation, can reduce poverty and promote sustainable economic development.

China and the Outside World A crucial question is what role China will play in shaping development outside China. So far, China has pursued a foreign policy aiming at promoting national objectives. The gigantic Silk Road project (Fallon 2015) aims primarily at strengthening China’s economic position in the world. The presence of China in the least developed countries in Africa has aimed at access to natural resources and local markets, and the net impact on building new capabilities in Africa has probably been negative. Competition in manufactured commodities has undermined local industry. Contracts have been made with governments characterized by autarchy

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

37

and corruption, and the efforts to engage and develop local capabilities among local workers have been limited. While the increased emphasis on sustainable development and the commitment to the Paris Agreement on global warming is reflected in domestic planning, it has been pointed out that China does not give sufficient attention to these issues when it comes to its international activities. The Silk Road project will, for instance, if realized in its current form, include the building of a series of big coal-fired electricity plants resulting in increased CO2 emissions in vulnerable countries (Tracy et al. 2017). China’s pragmatic and opportunistic economic nationalism stands in contrast to other major world powers’ attempts to spread their own model to other parts of the world, and therefore it may reduce the risk for global conflicts. Since China has become a major economic power, it needs to take on a more active role in responding to global challenges in terms of global inequality and unsustainable developments. As we will argue in our conclusions, there is a need for new forms of global governance where “knowledge sharing” is at the core. If China took on a lead in shaping such new forms, it would make a major difference and give the country a certain legitimacy worldwide.

How to Get There Revolution and Reform Most real existing socialist countries have been born under violent conditions in societies with a big share of rural population. Marx’ expectation that they would emerge first in industrialized and highly developed societies has proved mistaken. This was true for most of the members of the Soviet Union, China, Cuba, and Vietnam, while the system shifts in the more developed economies in Central and Eastern Europe came as results of the Second World War. There have been great human and social costs with this form of transition, and it has turned out to be almost impossible to introduce democracy in these countries after the regime shift. Their constant exposure to international attempts to change the system back to capitalism has led to suppression not only of attempts to overthrow the system but also of legitimate criticism. When authoritarian rulers have the means to forbid opposition, they tend to do so. Marx assumed that capitalism would dig its own grave. In the long term, the incapacity to make full use of the productive forces developed through capitalist technological competition would undermine its viability, while economic crises would become more and more severe until they led to a mobilization of the working class who would establish itself as a new ruling class taking over the state and the means of production. Marxists have therefore followed closely the evolution of inherent contradictions in the capitalist system. So far, capitalism has turned out to

38

B. Johnson and B.-Å. Lundvall

be quite resilient even to major crises, including the great depression and two world wars. They have not, with exception of the Russian Revolution, resulted in big scale uprisings leading to regime shift. Given the difficulties to create a democratic socialism through revolutionary uprisings or out of crises and war, it is natural to look for a gradual and democratic method to reach socialism. This was the strategy of the left wing in social democratic parties at the end of Second World War. The idea was that the working class and its allies should aim at getting a majority of votes in elections and a majority in parliament. On this basis, they can legitimately use the state to install elements of public ownership and central planning. We have already indicated the difficulty with this slow road to socialism. Those who own private property will resist the socialization, and since capitalism is a global system, the capitalists will find support from outside the country. Even when the process is following all constitutional rules, there will be forces outside the country that will try to bring it to an end. When Italy and Greece at the end of the Second World War were at the brink of electing communist and socialist governments, the USA intervened with massive economic and political support for the Vatican and other political forces who defended capitalism. In Chile, the USA supported the military coup against the legitimate socialist government led by Allende. When the French president Mitterrand tried to implement a left-wing strategy in France in 1981, which included nationalization of major enterprises, the ­massive outflow of capital and the response from international markets forced his government to moderate the program giving up elements that pointed in the direction of socialism. Today, national economies are even more deeply interwoven in a global financial capitalist system, and it is difficult to conceive how a specific small- or medium-­ sized country can decouple from this dependence through establishing control over the movement of financial flows across its borders without extreme economic downturns with ensuing social resistance and political reaction. There are many good reasons to reform the global financial system including its tendency to produce serious economic crises and the need to channel investments to green investments. An additional reason is that the current system is undemocratic since it imposes narrow limits for the actual political choices of national democracies.

 an Socialism Grow Within and Behind The Back C of Capitalism? A different perspective on a transition away from capitalism is represented by Joseph Schumpeter. He was in favor of capitalism, but he was also a great admirer of Karl Marx and his analysis of capitalism (Rosenberg 2011). He believed that capitalism could not survive in the long run arguing that new class structures, family patterns, the concentration of capital, and especially the growing role of the state

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

39

would transform capitalist economies in the direction of socialism (Schumpeter 1942). Among Marxists, this was not seen as the end of capitalism. But it was recognized that the concentration of capital and the growing role of the state had resulted in a different kind of capitalism that was referred to as monopoly capitalism or state monopoly capitalism (Baran and Sweezy 1966). There is no reason to assume that capitalism will not change also in the future. In this chapter, we have indicated some of the major challenges for national and transnational economic systems. We would argue that all social systems in order to cope with these need to change quite dramatically. To manage a national economy or a federation of states in the age of the Anthropocene would require a readiness to engage in a new wave of investment in knowledge and the full mobilization of existing knowledge. It would also require experimentation and creativity as well as political and ideological pragmatism with a strong focus on the interaction between society and its natural environment. Recent political developments in the leading capitalist economy, the USA, where the Trump administration has withdrawn from the Paris Agreement, demonstrate that such a transformation of capitalism will meet strong resistance. China has, in spite of its authoritarian rule, been more successful in responding to the challenge. It has invested heavily in knowledge, and it has—with some costly delay—steered the use of knowledge toward tackling environmental problems. It remains to be seen if it can retain the current combination of regional ­decentralization and experimentation over time or if it will end up as a petrified authoritarian state more focused on keeping political opposition at bay than on solving the problems of its population. A crucial question is if it will be able to go beyond its national ambitions and take on a role in solving global problems, including sharing its technologies with the poor countries. The problems facing the world are global, and therefore it is necessary to think about system change beyond the national level. On the other hand, the formation and experiences of the EU demonstrate the difficulty to create democratic processes at levels above the nation state. One issue is that the public sphere for political discourse remains national rather than transnational. Nonetheless, there are examples of transnational public spheres where people in different parts of the world engage in promoting specific issues related to environment, peace, and human values, for example, Amnesty International, Greenpeace, and Médecins Sans Frontières. Another important phenomenon below the level of the nation state is the examples of local and regional initiatives aiming at actions that go beyond the policy agenda of national governments. In the USA, there are states that are ready to keep their focus on the agenda set by the Paris Agreement, and in all parts of the world cities and international networks of cities develop their own strategies for coping with environmental problems. The combination of local, regional, national, and transnational mobilization of citizens may be seen as one way to transform real existing systems. There is, as we see it, a potential for realizing some of the intentions that we listed above as motivating attempts to create socialism through a transformation of real existing capitalist countries. If humanity can avoid the alternative of a major

40

B. Johnson and B.-Å. Lundvall

war—in such a scenario nothing can be projected—it is obvious that real existing capitalism will have to be transformed radically over the next couple of decades. Perhaps the result will be a world system where planned economies with strong market elements coexist with market economies with strong elements of planning. The general conditions for system change will depend on the relationships between the USA and China in the future. A peaceful competition with focus on saving the planet for future generations might offer more room for a variety of social systems, some of them mixing elements of capitalism and socialism in new ways. A head-on armed conflict would accelerate the destabilization of the Earth system.

The UN Sustainable Development Goals It is interesting to note that the UN development goals (SDG) overlap significantly with what we have listed as arguments for socialism. There are 17 such goals adopted in the “2030 Agenda for Sustainable Development” from 2015. They cover very broadly including the topics of poverty, hunger, health, education, gender, water, energy, work, growth, innovation, infrastructure, inequality, sustainable cities, responsible consumption and production, climate, life below water and on land, peace, justice, and partnerships for implementation. To some extent, the SDGs reflect an Anthropocene perspective: Environmental sustainability issues play important roles in 12 out of 17 goals. They are global and refer to mankind and not only nations or classes. They refer to the need to “transform our world,” and they integrate social, economic, and environmental aspects. They imply major changes in existing structures and tendencies, and they often refer to technical and institutional innovation as both necessary and effective instruments. Formation of visions, goals, and targets is an essential part of any development strategy. A political movement for a possible new socialism has to include development goals formed on the background of the challenges discussed above. However, the SDGs do not add up a socialist vision. That has not been the attention. Still, many of the goals and the targets that accompany them fit well with traditional socialist aims. This is the case for the goals addressing an end to poverty, hunger, and malnutrition; improved living conditions in terms of income, health, access to water, sanitation, and energy; inclusive access to education; reduced inequality within and between countries; and increased social inclusion. Some of the other goals would be crucial parts of any vision for a contemporary “possible socialism.” Such a vision will have to address the SDGs about sustainable consumption and production patterns, sustainable use of natural resources, sustainable cities, and climate change. It will also have to include an Anthropocene perspective on development, which is at least implicitly present in the SDGs. We think that the United Nation’s SDG agenda may serve as source of inspiration for a strategy for possible contemporary socialism since it addresses many of the issues that such a strategy has to deal with. Formulation of goals and targets is

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

41

of course not enough even if the SDG agenda has been described as “global governance by goal-setting” (Bierman et al. 2017). Implementation is still the big problem, and the success of the SDGs depends on number of institutional factors. To which extent can the global goals be translated into national goals? How strong commitments can countries be motivated to make? How much “power to persuade” does the UN carry in relation to member countries? How many degrees of freedom for policy implementation do national governments have on the background of the international mobility of capital and their position in the international economic competition? And so on. SDG number 17 considers implementation issues: It is stated that a massive redirection of public as well as private investment is needed to deliver significantly on the sustainable development goals. This is not only a responsibility for governments and international organizations like the UN. It requires partnerships between governments, the private sector, and civil society on global, regional, national, and local levels building on “a shared vision, and shared goals that place people and the planet at the centre.” The formulations are vague, but the points they make are important also in a socialist perspective. If a general and global popular movement could be built around the SDG goals rather than around nationalistic agendas, different real existing capitalist systems might converge and serve as a platform for moving toward a new type of “possible” socialism.

Conclusion There is no ideal society in the world. Real existing societies have weaknesses and strengths also when it comes to tackle the global challenges referred to in this chapter. To some degree, these reflect how they combine elements of markets with planning and different forms of ownership. Given the global challenges that these societies are confronted with, we would argue that there is a need to strengthen elements of “socialism” in most societies. First, there is a need to build institutions for long-term central planning that should be combined with local experimentation. While the Anthropocene calls for a combination of long-term and short-term policy-making, the electoral cycle implies that short-term issues dominate the policy agenda. At the same time, there is a need to build participatory learning societies where democracy goes beyond the right to vote in parliamentary elections. Employees and consumers should be mobilized as active participants in transforming the economic system. Second, there is a need to restrict and/or restrain capitalist ownership of capital and natural resources. The current constellation of private ownership results is extreme and increasingly unequal distribution of incomes, wealth, and power in the world, and they give incentives to overexploit natural resources and global commons leading to transgression of planetary boundaries. The dominant role of finance capital constitutes a major problem when it comes to develop new strategies for social and economic development. Currently, “the market” set narrow limits for

42

B. Johnson and B.-Å. Lundvall

what can be done in the political sphere. To turn this around and establish effective political control of the financial sector is a major issue. Third, the current forms of political governance where nation states compete in attracting private capital and in protecting knowledge need to be radically changed. New forms of international, regional, as well as global governance are crucial for coping with global challenges. It is not sufficient to introduce elements of socialism in specific countries. The UN sustainable development goals may be seen as the first step toward developing a worldwide vision for change and the Paris Agreement as the first attempt to coordinate actions that go beyond the national interest. To realize this vision, there is a need for further steps toward a world system where knowledge of strategic importance for coping with global challenges is shared worldwide with privileged access for low-income countries. In both its national and global forms, a modern possible socialism has to gradually acquire an Earth system perspective on the “nature” and the “environment.” This is because the interactions within the Earth system (including self-reinforcing feedback loops) increasingly set the agenda for what is traditionally called environmental policy. A shift from a Holocene perspective of a relatively stable natural environment to an Anthropocene perspective of a fast-changing Earth system is also required. This is because the Holocene implies a narrow and backward-looking view on “nature” and “the environment” leading to unnecessary and counterproductive conflicts and stalemates in policy-making. Going back to the Holocene stability is not a realistic option. Planning and governance in the Anthropocene have to face up to the new global challenges. A crucial question is: What social forces can push social systems in the direction of socialism? In the classical Marxist perspective and the early social democratic strategy, a relatively homogenous working class with industrial workers at its core was seen as the subject that would drive the process of change. Today, the share of traditional industrial jobs has become quite small in high-income countries, and the same is true for low-income countries where the majority is employed in informal sectors and in agriculture. There are certainly categories of workers who are unemployed and underemployed or who work under precarious conditions. But the working class has become heterogeneous and constituted by groups with different interests. So far it has proven difficult for political parties on the left to mediate between different interests and identities in such a way that the different actions for inclusion of excluded groups take the system in the direction of socialism at the national level. It is even more difficult to widen the perspective so that it involves international solidarity. The big international gaps in living standards give insiders with citizenship in rich countries strong incentives to defend the nation state and its borders. It is tempting to conclude that “socialism” is no longer a realistic option and that the only options left are varieties of capitalism. But history is full of surprises and earlier declarations of the end of history have been proven premature. The fall of the Berlin Wall came as a surprise, and 20 years ago very few had foreseen that China would challenge the economic leadership of the USA. The two major challenges that we have linked to our discussion of socialism—globalization and the

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

43

Anthropocene—signal that the current forms of economic and political governance are not sustainable and that radical transformations will have to take place in one form or the other. We can also witness a political response to these challenges both at the top as exemplified by the UN sustainable development goals and the Paris Agreement and from below where a multitude of local, national, and global initiatives aiming a sustainable development are emerging. When it turns out that the only way to respond effectively to these challenges is to develop a different mode of production where private ownership is combined with new forms of collective ownership and where crucial markets are subordinated to long-term planning, some of these efforts may result in new varieties of capitalism and socialism. Another interesting development is that the two countries that have been leading the other capitalist countries toward economic globalization (deregulation of finance nationally and globally, limiting national governments’ rights and capacity to regulate their economies), the USA and the UK, now see a growing nationalism on the right (Trump and Brexit) as well as a new growth of support for left-wing political candidates (Sanders and Corbyn). This reflects that in these countries neoliberal strategies to globalization have exposed the populations most directly to the negative consequences of such a strategy. A change in political regimes in these countries moving them toward the welfare state models of capitalism would have an impact on the world political scene.

References Baran P, Sweezy P (1966) Monopoly capitalism. Monthly Review Press, New York Bierman F, Kanie N, Kim RE (2017) Global governance by goal-setting. The novel approach of the UN sustainable development goals. Curr Opin Environ Sustain 26–27:26–31 Cassiolato JE, Lastres HMM, Maciel ML (2003) Systems of innovation and development. Edward Elgar Centre for Ice and Climate (n.d.) Niels Bohr Institute, University of Copenhagen, Climate during the Holocene. http://www.iceandclimate.nbi.ku.dk/research/climatechange/glacial_interglacial/ climate_holocene/ Chandler D (2018) Ontopolitics in the anthropocene. An introduction to mapping, sensing and hacking. Routledge, London Crutzen P 2002 The Anthropocene. Journal de physique IV France Crutzen P, Stormer EF (2000) The Anthropocene. Global Change Newsletter 41:17. http://www. igbp.net/publications/globalchangemagazine/globalchangemagazine/globalchangenewsletters no4159.5.5831d9ad13275d51c098000309.html Davis M (2001) Late Victorian Holocausts. El Nino Famines and making of the third world. Verso, New York Eun J, Lee K, Wu G (2005) Explaining the university-run enterprises in China: a theoretical framework for university–industry relationship in developing countries and its application to China. Res Policy 35(9):1329–1346 Fagerberg J  (2018) Mobilizing innovation for sustainability transitions: a comment on transformative innovation policy. Res Policy 47(9):1568–1576. https://doi.org/10.1016/j. respol.2018.08.012

44

B. Johnson and B.-Å. Lundvall

Fallon T (2015) The new silk road: Xi Jinping’s grand strategy for Eurasia. American Foreign Policy Interests 37(3):140 Frank AG (1969) Capitalism and underdevelopment in Latin America, historical studies of Chile and Brazil. NYU Press, New York Gaffney O, Steffen W (2017) The Anthropocene Equation. The Anthropocene Review 4(1):53–61 George S (2015) Shadow sovereigns: how global corporations are seizing power. Polity Press, Cambridge Gu S, Lundvall BA, Liu J, Malerba F, Serger SS (2009) China’s system and vision of innovation: an analysis in relation to the strategic adjustment and the medium to long term S&T development plan (2006-20). Ind Innov 16(4/5):369–388 Gu S, Lundvall B-Å (2006) Policy learning as a key process in the transformation of China’s innovation system. In: Lundvall B-Å, Intakumnerd P, Vang J (eds) Asian innovation systems in transition. Edward Elgar, Cheltenham Jain-Chandra S, Khor N, Mano R, Schauer J, Wingender P, Zhuang J (2018) Inequality in China— trends, drivers and policy remedies. IMF Working Papers 18(127):1 Johansen L (1977) Lectures in macroeconomic planning. Part I, general aspects. North Holland Publishing Company, Amsterdam Johnson B, Andersen AD (eds) (2012) ‘Learning, innovation and inclusive development’ Globelics Thematic Report 2011/12. Aalborg University Press, Aalborg Kalecki M (1933a) An essay on the theory of the business cycle. Included in Michal Kalecki: Theory of economic dynamics’ (2011), Published by New Left Review in 2011 Kalecki M (1933b) Essays on the business cycle theory. In: Osiatynsky J (ed) Collected works of Michal Kalecki, vol 1. Oxford University Press, Oxford Kalecki M (1943) Political aspects of full employment. In: Osiatynsky J (ed) Collected works of Michal Kalecki, vol 1. Oxford University Press, Oxford Keynes JM (1936) The general theory of employment, interest and money. The Royal Economic Society, London Latour B (2017) Ned på Jorden—hvordan orienterer vi os politisk? Informations forlag. Translated from “Latour, B., 2017. Où atterir? Comment s’orienter en politique, Editions La Découverte, Paris, France” Markard J, Raven R, Truffer B (2012) Sustainability transitions: an emerging field of research and its prospects. Res Policy 41:955–967 Nature (2018) NEWS 18 January 2018, ‘China declared world’s largest producer of scientific articles’ Nordic Council of Ministers (2018) Increasing income inequality in the Nordics: Nordic economic policy review 2018 OECD (2018) Research and development statistics (RDS), DSTI Prebisch R (1950) The economic development of Latin America and its principal problems. ECLA, Santiago Qian Y, Weingast B (1996) China’s transition to markets: market-preserving federalism, Chinese style. Journal of Policy Reform 1(2):149–186 Reuters (2018) U.S. trade embargo has cost Cuba $130 billion, U.N. says, World News, May 9 2018 Rosenberg N (2011) Was Schumpeter a Marxist? Ind Corp Chang 20(4):1215–1222 Saich A (2004) Governance and politics of China, 2nd edn. Palgrave, Basingstoke and New York Sandalow D (2018) Guide to China’s climate policy 2018: center on global energy policy. Columbia University, New York Marcott SA et al (2013) A reconstruction of regional and global temperature for the past 11300 years. Science 339:1198–1201 Schumpeter J (1942) Capitalism, socialism and democracy. Harper & Row, New York Sen A (1999) Development as freedom. Oxford University Press, New York Sen A (2009) The idea of justice. Penguin Books

2  Possible Socialisms and the Challenges of the Globalizing Learning Economy…

45

Standing G (2018) The Precariat: today’s transformative class? Great Transition Initiative, Cambridge. https://greattransition.org/publication/precariat-transformative-class Steffen W, Rockström J, Richardson K, Lenton TM, Folke C, Liverman D, Summerhayes CP, Barnosky AD, Cornell SE, Crucifix M, Donges JF, Fetzer I, Lade SJ, Scheffer M, Winkelmann R, Schellnhuber HJ (2018) Trajectories of the earth system in the anthropocene. Proceedings of the National Academy of Sciences USA 115(33):8252–8259. https://doi.org/10.1073/ pnas.1810141115 Tassey G (2005) Under investment in public good technologies. In: Scherer FM, Link AN (eds) Essays in honor of Edwin mansfield, Special issue of Journal of Technology Transfer, vol 30, pp 89–113 Tracy EF, Shvarts E, Simonov E, Bbenko M (2017) China’s new Eurasian ambitions: the environmental risks of the silk road economic belt. Eurasian Geogr Econ 58:56–88 The UN global pulse program. https://www.unglobalpulse.org WIPO (2018) China drives international patent applications to record heights; demand rising for trademark and industrial design protection, Geneva, March 21, PR/2018/816 Xia J  (2010) Linking ICTs to rural development: China’s rural information policy. Gov Inf Q 27(2):187–195

Chapter 3

Social Democracy and the Fate of the Swedish Model Claes Brundenius

Introduction Sweden attracted much attention as an interesting socioeconomic role model already in the 1930s, especially after Marquis Childs published his famous and influential book, The Swedish Middle Way (1936). Childs’ main argument was that the “Swedish model” was a successful “socialist” policy with a growing cooperative sector—as a counterbalance to the private sector—and effective crisis management. Of special interest to him was the building of cheap homes for the working class undertaken by the common good (public and cooperative sector). This was accomplished through strong and decisive government intervention in economic life, especially to fight mass unemployment with Keynesian-style policy tools. Childs argued that Sweden was developing as a role model also for other reasons. The Folkhemmet (People’s Home) model was based on consensus politics, a historic compromise between capital and labor, providing economic equality and political pragmatism. The book also attracted President Roosevelt’s interest. In a press conference, he told reporters that it was primarily the cooperative development that drew his attention, and that they “have a royal family, a socialist government and a capitalist system, all working happily together side by side (and) they have these cooperative movements existing happily and successfully alongside of private industry and distributions of various kinds, both of them making money.”

C. Brundenius (*) Lund School of Economics and Management, Lund University, Lund, Sweden UNU-MERIT, Maastricht, The Netherlands © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_3

47

48

C. Brundenius

Yes, interesting indeed! But was it true at the time? It is perhaps a bit naïve of the author to believe that a social democratic government, after winning the elections in 1932, could install a democratic socialist system in four years! Is democratic socialism even possible in a capitalist environment? This chapter deals with the rise, ­heydays, and eclipse of the Swedish model. Yes, there was a model, and in many ways a model still exists, although it is being considerably modified as will be shown in this chapter. Was the original welfare model really “socialist”? What is the current welfare model then? What is the difference? These are some of the questions addressed in this chapter. Sweden still has one of the most comprehensive (and perhaps most generous) “cradle to the grave” welfare systems in the world. For many people, it is the Swedish welfare system they mean when they refer to the “Swedish model,” but it is not always clear what is referred to. There are at least four types of models frequently referred to in this context: 1. The unique labor-employer relationship (the Saltsjöbaden spirit) that lasted from 1938 to the mid-1970s. 2. The labor market policy based on the Rehn-Meidner model. 3. The welfare system in general—the social democratic brew—often outside Europe (especially in the United States) referred to as a “socialist system” 4. The image of a small, rich, capitalist, globalist, internationalist country, with a “strong state” and a sizeable public sector, combining growth with free education, health care, radical social reforms, and low unemployment coupled with small income differences (low Gini). In many ways Sweden  has  been  a role model  - at least until  the mid-1970s. Bhaskar Sunkara says in his book The Socialist Manifesto (2019) that “Sweden in the 1970s was not simply the most livable society in history, it was also the European country where, after World War II, socialists got the furthest along in undermining capital’s power”. Whatever the case, it is clear that the Swedish model referred to is, if not dead, so definitely under attack and with serious problems. When I started writing this chapter, my preliminary title was “The Rise and Fall of the Swedish Model.” However, gradually, I have come to realize that there are already many articles (even books) with that or similar title: Meidner (1998), Lundberg (1985), de Vylder (1996), and Elmbrant (1993), just to mention a few. The chapter focuses on the role of the Swedish Social Democratic Labor Party (SAP) in developing a model, or models, that could serve as examples of democratic socialism. To what extent have such models been successful? What are the opportunities and limits of democratic socialism? What is the goal of a socialist strategy? If the goal is a “welfare state,” what are then the means to get there? Or is it rather the “welfare state” that is the means to reach socialism?

3  Social Democracy and the Fate of the Swedish Model

49

Seeds of the Early Century The Social Democratic Labor Party (SAP) was founded in 1889 largely by trade union members, although LO1 (the Swedish Confederation of Trade Unions) was founded only in 1898. SAP’s first party program dates from 18972. It was reformist although inspired by the Marxist debate in Europe at the time. The program stressed general, equal, and direct voting rights, for both men and women; an 8-h working day (by law); the prohibition of child labor (under 14); and rights to express, print, and organize and assembly. Not least, the program advocated for a “gradually rising (progressive) income, wealth and inheritance tax” (ARB 2001). The 1911 program was a victory for the left wing of the party. Paradoxically, perhaps, small-scale farmers and petty bourgeois groups, such as artisans and small business owners, were singled out as being part of capitalist exploitation (together with the working class) and whose means of production therefore would be exempted from being socialized. The program now also emphasized the need for universal insurances against accidents at work, disease, and unemployment and for old age needs (pension). The turn of the century also saw the birth of the cooperative movement. Kooperativa Förbundet (The Cooperative Association) was founded already in 1899 and is still by far the largest cooperative movement in Sweden. It is now a holding company with numerous consumer cooperatives in many branches, at the beginning especially groceries in the countryside. Later on, in 1923, an important housing cooperative was founded, HSB3 (The National Tenants’ Association), which would come to play an important role in social democratic Sweden, both as a savings bank (for the tenants) and as manager of cooperative housing, financing, and construction of houses. There was much poverty in Sweden at the turn of the century. There had been a serious famine in 1867–1869 after serious crop failures, which had led to increasing emigration. Living conditions for the majority of the population were appalling, and “social policies” had not yet replaced the degrading “poverty relief” (Elmér 1975). An aging population was a problem at the beginning of the twentieth century (although not by the same dimension, of course, as a century later). The population aged 65 or more had doubled from 4.8% to 9.4% of the total population between 1850 and 1900 (SCB 1969)4. This increase was partly the result of the emigration by mainly the younger generation to America in this period5. Old people remaining  Landsorganisationen.  SAP has adopted new revised programs at eight congresses: 1905, 1911, 1920, 1944, 1960, 1975, 1990, 2001 and 2013. 3  Hyresgästernas sparkasse- och byggnadsförening (Tenants’ Savings and Construction Association. 4  https://www.scb.se/Grupp/Hitta_statistik/Historisk_statistik/_Dokument/Befolkningsutvecklingenunder-250-ar.pdf 5  Almost 900 thousand Swedes emigrated to America between 1865 and 1910, a big number in relation to the population of Sweden, which was two million in 1865 and 2.7 million in 1910 (SCB 1969). 1 2

50

C. Brundenius

became a burden to many local (often distant) communities, and poor relief was not sufficient to solve the problem. Both liberal and socialist politicians started campaigns to address the problem, criticizing the existing poverty law as being a national disgrace. Social policy was the concept used when poor relief was finally replaced by social reforms at the turn of the beginning of the new century. In 1901, the Parliament (Riksdag) had taken a first step by passing a new law on obligatory work related injury insurance. It is, however, with the adoption of a general and universal pension system that Sweden became the first country in the world to have a social insurance system, comprising the whole population. The pension insurance law was proposed by the liberal governing party and adopted by the Riksdag in 1913. The pension system was financed through fees and taxes. The monthly pension was quite small, and most of the elderly could not live on the pension—if they were at all alive at 67 (the retirement age), considering that the average life expectancy was 58 years at the time. The left wing of the SAP—the largest opposition party—was very critical of the law because of the ridiculously small pension and especially because the law was discriminatory against women6.

1917: On the Brink of a Swedish Revolution? The popular unrest in Russia in the winter and spring of 1917 also spread to Sweden. The February Revolution was greeted with enthusiasm, not only by workers and socialists but also by liberals all over Europe. There was a serious economic crisis in Sweden, like in the rest of Europe, even if Sweden had been spared from the horrors of the war. There were hunger riots in many places in Sweden. On April 13, the Bolshevik leader Vladimir Lenin had passed almost unnoticed through Stockholm on his way to Petrograd and was met by the leaders of the Socialist Left Party (SVP)7, which had been founded just three months earlier after being thrown out of the mother party, the Social Democratic Party. On April 21, 1917, there was a huge demonstration with tens of thousands of people that had gathered in front of the Riksdag. It is said that what happened that day could have been the spark that ignited a revolution in Sweden. According to an eyewitness,8 the police chief had decided to break up the demonstration - with force if necessary -    when a constable prevented him to do  so. If the police chief had ­succeeded with his plan to scatter the demonstrators and arrest those believed to be responsible for organizing the demonstration9, it could all have ended in bloodshed.

 The maximum pension amount (per year) was 150 crowns for men and 140 crowns for women. In comparison, the average wage for an industrial worker was 1300 crowns per year at the time. 7  Lenin’s visit does not seem to have had any impact on the succeeding events in Stockholm. 8  The eyewitness, Nils Horney, reporter from the major social democratic newspaper, gave the account in his memoirs published in 1969 (quoted in Ohlsson 2014). 9  One of them was a speaker at the event, Per Albin Hansson, later to become Prime Minister of the SAP government in 1932. 6

3  Social Democracy and the Fate of the Swedish Model

51

In June that same year, the Riksdag was to debate the lack of food (especially bread and potatoes) and how it affected workers and people in general and see what could be done about it. The Socialist Left Party again called on the workers of Stockholm to leave their workplaces and meet up outside the Riksdag to manifest their anger. Like in April police and military again surrounded the tens of thousands of demonstrators. Machine gun posts were placed on the rooftops. The situation was very tense. It could have ended in a “bloodbath,” according to many newspapers, with many people stepped upon and wounded in the uproar that followed. Many were fearing that the result would be the spark that ignited the beginning of a revolution. Some were hoping just that10. The demonstrators were shouting “General Strike!” But the strike did not materialize.

October 1917: Coalition Government with the Liberal Party On October 19, 1917, the SAP joined the Liberal Party (LP) to form a coalition government. The government lasted until March 10, 1920—a relatively long period. That autumn 1917 was turbulent in Europe. In November, the Bolsheviks overthrew the provisional government, and Finland (a colony of Russia) got its independence, but there were also revolutionary movements claiming for power in Europe. In Sweden, the two coalition parties saw the opportunity to press the Riksdag to pass a law on universal suffrage, for both men and women, irrespective of social class and income. Attempts had been made by both parties in the past—but always sabotaged by the Conservative Party. The law finally passed in both chambers of the Riksdag on December 17, 2018. It passed with the votes of the right (the Conservative Party). It is clear that the conservatives were scared of the events in Europe, not only the Russian Revolution but also the uprisings in Europe. Germany was on the brink of revolution after the end of the war, and in January 1919, the Spartacists almost took over power in Berlin.

 he 1920 Party Congress: A Radicalized Social Democratic T Party The Social Democratic Party had been split in 1917 with the left wing leaving (or perhaps rather being thrown out of the party), creating the Socialist Left Party (SVP)11, inspired by the developments in Russia. But the SAP was, although reformist, still a radical party at that time. In 1920, it had adopted a new and radicalized

 These events have been recorded in many books and articles, for instance, Klockare (1967), Larsmo (2002); and Ohlsson (2014). 11  In 1921, it changed name to the Swedish Communist Party (SKP). 10

52

C. Brundenius

party program, which was the most Marxist influenced one in the party history. Expressions such as “exploitation, “pauperization,” and “class struggle” were characteristic of the new program. But the criticism of the capitalist system was not only because of its exploitative character but also because of “its inefficiency to fully utilize the growing productive forces.” For the first time, the program called for a republic, for free education at public schools (at all levels), and for a progressive tax system that would contribute to public capital accumulation. And also important, the party program called for a planned economy whereby “natural resource, industrial companies, credit institutions, and transport & communications, to be expropriated and transferred to social ownership.” Important to notice: social ownership, not state ownership. One of the most radical speeches at the 1920 Congress was that of Gustav Möller (later to become one of the chief architects of the Swedish welfare model): “Everything speaks to the necessity to begin the work of socializing production and abolishing capitalism.”12 SAP’s 1920 party program was not changed until 1944. The differences that SAP had with the socialist left was not over the final objective: socialism. It was over which means to use, the means to reach the final ­objective: a violent revolution (with unforeseen consequences) or a reformist way to socialism.

Incipient Struggle for Industrial and Economic Democracy After the war, the question of industrial and economic democracy became the focus of the debate, mainly in the trade unions and the labor movement, although there were—for some time—also proposals in that direction from both social liberals (the Liberal Party) and some employers. Before 1919, it was only the syndicalists (through their trade union SAC) that had shown any interest in the question. However, the spread of revolutionary movements in Europe after the end of the war in Central Europe triggered off the debate (Lundh 1987). In the fall of 1919, the social democrats discussed the conditions for further government cooperation, and also the Liberal Party agreed that the question of industrial economy had to be explored. At the Party Congress in February 1920, a majority of the participants were in favor of an offensive socialization strategy, and this had been the position of the left wing of the party for a long time, among them Ernst Wigforss, Gustav Möller, and Arthur Engberg (Lundh 1987)13. The SAP won the elections in 1920 and for the first time formed a government alone, with Hjalmar Branting as Prime Minister, and set up a government committee, chaired by Richard Sandler, to study the “viability of socialization,” named The  Quoted in Therborn 1986.  Wigforss became the Minister of Finance and Engberg the Minister of Education, in the social democratic government that started its 44-year-long rule in 1932. Wigforss was the Minister of Finance for 18 years. Möller was the Minister of Social Affairs for 17 years. 12 13

3  Social Democracy and the Fate of the Swedish Model

53

Socialization Committee. It would take many years before the committee managed to submit a report to the Riksdag. The 1920s were turbulent years, economically, socially, and above all politically. The social democrats sat in three short-lived governments after 1920. In 1925, the legendary leader of the party, Hjalmar Branting, died on the post. In 1926, the young party ideologue Nils Karleby died at the age of 32. Both sudden deaths were heavy losses to the party.

The Birth of a Swedish Model The social democrats won the parliamentary elections in 1932 with 41.7% of the votes. Together with SKP, they had exactly 50% of the votes in the Riksdag. The SAP then ruled alone or in coalition with other parties for 44 years until losing the elections in 1976. Never did a democratic socialist party maintain hegemony for such a long period. The party platform in 1932 concentrated on combatting the economic crisis (this was just at the deepest trough of the Great Depression), especially mass unemployment. It has been said that SAP was inspired by Keynes and his recipes on how the economy could expand from a deep depression through offensive public investments, especially as a means to subdue unemployment. The SAP government was very successful in getting Sweden out of the crisis, much thanks to budget deficit spending, initiated by Ernst Wigforss, the new Minister of Finance. The new government quickly presented a comprehensive program to fight mass unemployment, which to a large extent—in retrospect—seemed copied on Keynes’ magnum opus The General Theory of Employment Interest and Money that, however, was published only four years later, in 193614. In fact, Wigforss developed his theories already in the late 1920s, before the Great Depression. John Kenneth Galbraith had this to say: “All of this was being said and done in Stockholm in the 1930s well in advance of Keynes; in a terminologically exact world the modern reference would not be the Keynesian but the Swedish Revolution” (Galbraith 1987, p. 225). In 1931, unemployment stood at 19.3% of the organized labor force in Sweden. By 1936, it had fallen to 11.1% and by 1941 to 6.8%. Unemployment insurance was also important for the relatively rapid recovery of the Swedish economy by sustaining the level of effective consumer demand. Ernst Wigforss and Gustav Möller together with the couple Alva and Gunnar Myrdal were the most important architects of the welfare reforms. Möller as the Minister of Social Affairs was involved in most of the reforms and so was, of course, Wigforss as the Minister of Finance. One could say that the 1930s saw the birth of

 See also Introduction by Paul Krugman to The General Theory of Employment, Interest, and Money, edition 2006. http://www.pkarchive.org/economy/GeneralTheoryKeynesIntro.html 14

54

C. Brundenius

a model that would create the foundation for the welfare society that Sweden is still today in many ways. With a clear majority in the Riksdag behind the reforms, the social democratic government introduced a law on state support to housing construction and a new unemployment insurance law in 1934; the general basic pension was raised (and indexed) in 1935, a law regulating agricultural work in 1936, means-tested prenatal care in 1937, housing loans to families, and a law of two-­ week obligatory vacation in 1938, which was of immense importance, especially to blue-collar and white-collar workers and their families. Taxes more than doubled in the 1930s (Elmér 1975).

Family Policy In 1934, Alva and Gunnar Myrdal published their pioneering book, Kris i befolkningsfrågan (Crisis in the Population Question), which had a strong impact on the debate about the Swedish welfare society and its future. The starting point was an attack on neo-Malthusianism, taking the example of Sweden, where the problem was not overpopulation but rather a threatening population decline, if the low birth rates would continue. The recipe was to initiate a series of social reforms to rectify this tendency. Such social policies would not, like in the past, focus on poverty relief, but instead they would focus on family policy, to encourage and support families that get two or more children. This family policy would build on free medical care, free school lunches and other benefits, and not least more and better housing affordable to everybody. Low-income families would be offered subsidized rents by the state. The Myrdal couple furthermore argued that the current patriarchal family pattern (with a job working father and a home working mother) must be broken. This could be done by encouraging women to work outside the home with children taken care of by daily care centers with professional staff. This would have a double positive effect, both for the women and for the children.

The Beginning of a Housing Policy Housing policy15 started in the 1930s and a Housing Commission16 was set up already in 1933, with a young ambitious secretary, Alf Johansson. He was considered to be one of the most influential Swedish socialist economic theorists at the time (Olsson 1991, p.  160). During its existence (until 1947), the commission

 HSB, The Tenants Association, which is part of the cooperative movement, had been founded already in 1923. 16  Bostadssociala utredningen. 15

3  Social Democracy and the Fate of the Swedish Model

55

c­ollected information—and analyzed data—on the housing conditions of the Swedish population and worked out a housing policy that would change the lives of many people, especially for the working class. Housing policy was later on seen by Alva and Gunnar Myrdal as a major element of their visions of social policy. The couple Myrdal and Johansson were convinced that population growth would be stimulated by good-quality, low-price, housing policies, subsidizing old-age pensioners and low- and middle-income families with many children. The final report by the Housing Commission defined the principles for the housing policy that was set in motion after the war. These principles are still in use today in many ways, such as considering housing as a common good (allmännyttan), at the level of a universal basic need, or a social entitlement. However, it is another story that the equally important principle of equal access to high-quality housing is increasingly being set out of play today. Houses were as a rule built by cooperatives and companies owned at the regional (county) and local community (commune) level. Thus, the Construction Workers’ Federation was often a partner in the housing projects (Olsson 1991, p. 162). Other civil society groups grew in importance during the housing booms: the National Tenants Association (HSB), the Public Utility Housing Enterprises, and the trade unions also owned housing construction companies. One housing problem was that the monthly costs of rented apartments tended to increase so quickly over time that tenants could not pay, and many were literally thrown out of their homes. To remedy this, a new rental law was passed in the Riksdag in 1942. The law implied that it would be more difficult for a landlord to oust a tenant arbitrarily. Furthermore, rents were to be set by state regulation. The rental regulation has since been modified over time until it was formally abolished in 1978. The housing had (at the end of the 1940s) the ambition that “all people should have sound, spacious, well planned and functional accommodation, with good quality at reasonable cost” (Olsson op. cit.).

“The Saltsjöbaden Spirit”: A Historical Compromise A historic agreement was signed between the Swedish Trade Union Confederation (LO) and the Swedish Employers Association (SAF17) in December 1938 at Saltsjöbaden (a suburb to Stockholm). The agreement came to be a model for agreements on the labor market. The principle was that the two sides—employers and those employed—conclude agreements without the interference by the government. The agreement lasted without change until 1976. Central negotiations between LO and SAF were perhaps the most important aspect of the agreement. This was generally accepted by the LO members, but some minor unions were critical and even

17

 Svenska Arbetsgivareföreningen.

56

C. Brundenius

threatened to leave LO. Many refer to this historical compromise between capital and labor as the Swedish model. The agreement was criticized from both right and left at the time and has also been questioned from time to time after that18. Social democracy became associated with the vision of Sweden as Folkhemmet (the People’s Home). This vision was first mentioned by Per Albin Hansson, speaking to the Swedish Parliament in January 1928 (that is, before he became Prime Minister). He stressed that “if the Swedish society should develop to become a People’s Home, then the class differences have to be removed, social care developed, income differences narrowed, and the working people given opportunities to take part in economic management” (CB translation).

 he Postwar Program and the Debate on “the Planned T Economy” Sweden was luckily not invaded by Nazi-Germany and was again saved from the horrors of war, in contrast to its neigbors, Denmark, Norway and Finland.  When the Second World War was nearing its end, the SAP saw the need for a new, more modern party program in 1944 (as recalled, the last one was from 1920). Although the new party program was an important beacon and guide for the future vision of the Swedish society, there was another program (presented the same year) that got more attention. It was entitled the Postwar Program of the Labor Movement, and it was a long-­ term (15 years) action program, drawn up by representatives from by SAP, LO (The Trade Union Confederation), the Women Federation, and Social Democratic Youth. Ernst Wigforss chaired the commission and drafted most of the text. The program proved to be the most ambitious action program ever produced by the social democratic movement, so radical that it was endorsed by SKP, the Swedish Communist Party. It consisted of 27 policy actions, under three headings:      I. Full employment  II. Just distribution and increased standard of living III. Greater efficiency and economic democracy Under I: Eight actions were identified to reach full employment: preventing inflation; unemployment measures to be centralized under the state; maximum exploitation of export possibilities; quality consumer goods; long-term plan for high-quality housing construction; mass production of cheap, quality consumer goods; state support to sustain a viable agriculture; public works to reduce unemployment, when needed; and an efficient labor market to be supported by state-­ managed job centers.

 In the aftermath of the 1968 student unrest, many new radical groups (even parties) saw the light, and the Saltsjöbaden Agreement came under attack again as “class collaboration”. 18

3  Social Democracy and the Fate of the Swedish Model

57

Under II: The goal was to raise wages and salaries in general, especially through a solidarity wage policy and equalization of wages and salaries between men and women; general unemployment insurance and universal social security insurance; shorter working week (especially for hard work); creation of day care institutions to alleviate for parents (so they can both work outside the home); equal access for all to education; and equalization of living standards between classes. Under III: Promote efficiency through agrarian reform; rationalization of work at home; support to allmännyttan (public good); socialization should be considered when private entrepreneurship leads to mismanagement or monopolies; increased worker influence over production.19 It is clear that socialization got lower priority, also in the party program adopted at the party program that same year.

The Debate on “the Planned Economy” Wigforss had already at the Party Congress in 1932 expressed that socialization was not—and could never be—a goal in itself for socialists. Socialization was just one possible means that could be replaced by the planned economy. The socialization committee had been dissolved in 1935, and there had been no official final report.20 In the party program of 1944, socialization is only mentioned as a means to be used when “private capital is not fulfilling its role.” The coalition government (consisting of SAP and the opposition21) that had ruled Sweden since the outbreak of the war resigned during the summer of 1945. The political tension between the SAP and the opposition blossomed up again. While SAP with the Postwar Program was looking forward toward a “harvest time” after the war, the opposition and SAF (The Employers Association) had quite different ideas. They took the Postwar Program ad notam as a threat (not least since it was endorsed by the Communist Party), with its plans for “industrial democracy and economic democracy” and “increased state influence over private capital.” They feared that the final goal was the socialization of large parts of private industry. This came as an ugly surprise since they thought that the socialization issue had been put in a drawer—once and for all—with the rather toothless report in 1935. But there was now a concern with some new parliamentary “socialization” motions in the Riksdag. It is true that “socialization” was toned down in the Postwar Program, but instead the need for national planning was mentioned again and again was not the planned economy just a disguised way to do the same but expressed in a milder way (Lewin 1967)?

 This is just a brief summary of a 77-page document!  But Richard Sandler, the chairman of the commission, submitted a report that was just aimed at summarizing the work of the commission. 21  The Liberal Party, the Center Party (Farmers Party), and the Conservative Party. 19 20

58

C. Brundenius

While the opposition and the employers wanted deregulations after the war, the social democrats feared that a worldwide depression would follow the end of the war, and this justified continued government intervention, rather more than less. Therefore, only national planning could solve production and employment problems. Gunnar Myrdal was one of the architects of this policy. He was of the view that “the labor movement should from now on devote more interest to the problems of production. With only distributive reforms we will not go far” (quoted in Lewin 1967, CB translation). Myrdal managed to enrage SAF by demanding a “branch rationalization,” implying that private corporations were in need of structural reforms, and this should be effectuated with government intervention—“to tell the private sector how to run their business.” Now it was confrontation! The opposition together with the employers started a “resistance movement against national planning” (in brief PHM22). The opposition and SAF suspected that the national plan was nothing but initiating a process of surreptitious socialization. The planning debate lasted until now the elections in 1948 in a tense political climate, intensified by an iron curtain that divided Central Europe, signaling the beginning of a Cold War. The bourgeois opposition began ferocious attacks on what they called “state socialism,” and there was not much difference between social democracy and communism (Ohlsson 2014). SAP easily won the elections again (with 46% of the votes) but with a smaller margin than before, and especially the SKP (6%) was a big loser (see Annex Table 3.9).

 id Social Democracy Change Ideology at This Point: Or D a Tactical Retreat? One could wonder why planning was so aggressively attacked, especially by the opposition parties and SAF, the “PHM.” The background was that in 1937 Herbert Tingsten, a member of the party but also journalist and academic, had been entrusted by SAP (and LO) to write the first volume in a series that would become the History of the Swedish Working Class. His contribution The Development of Swedish Social Democratic Ideology (Tingsten 1941) was unwavering anti-Marxist, and his conclusion was that SAP had at last—after getting to power in 1932—abandoned “the socialization idea” that had been on the agenda and inscribed in successive party programs, since the beginning of the century. But Tingsten’s conclusions did not stay with that. He also concluded that “ideologies were dead” and that social democracy was just a party like any other democratic party. While the opposition was welcoming Tingsten’s book, most social democrats were furious in their comments, not least since SAP and LO had financed his research.

 PHM stand for Planhus Hållnings Motståndet = Planned Economy Resistance. PHM was actually invented by the social democrats and used as an invective in the heated discussions. 22

3  Social Democracy and the Fate of the Swedish Model

59

Tingsten claimed that socialization had been replaced by welfare policies and class struggle by the Folkhem ideology. The seizure of power should take place by political compromise, and democracy was endorsed as a superordinate principle (Linderborg 2001). The initial commentaries made in 1941 right after the book had been published, that is, during the war coalition government, were made in a friendly spirit. The opposition parties and SAF no doubt saw the book as a confirmation that SAP had once and for all abandoned Marxism and their socialization plans. However, after the publication of the Postwar Program, it could seem that Tingsten’s theses seemed to be contradicted by the new party program and the planning debate. Tingsten left the party in 1945, and instead he became an irreconcilable enemy23.

Lewin’s Dissenting View on SAP’s Ideological Development Leif Lewin, a political scientist, published in 1967 his dissertation The Planning Debate, which in large parts was a critique of Tingsten’s book from 1941 and drew at once a lot of attention. Lewin claimed—contrary to Tingsten—that the SAP had indeed been consistent in its ideological development. It was above all Ernst Wigforss who had been the driving force behind this ideological continuity with change, leaving dogma behind but still with Marxist roots. When Tingsten had claimed that SAP’s nonsocialist policies in the 1930s saved capitalism, Lewin emphasizes the consistent socialist policy by the party (Linderborg 2001). “Socialization is replaced by ‘the planned economy’.” And this ideology does not imply any intellectual treason against the Marxist socialist ideology. “Despite abandoning the history philosophy of Marxism, the continuity in the development of social democratic ideology is palpable” (Lewin 1967, p. 75, CB translation). Lewin furthermore discussed SAP’s ability to integrate liberal ideas with the social democratic agenda. An example was the efficient crisis policy in the 1930s when Keynes rather than Marx was the beacon to look for, even if Lewin himself found many similarities between Keynes’ and Marx’s analysis of capitalism. But with the important difference that while Marx saw the inherent contradictions of capitalism and why it was doomed to collapse, Keynes was looking for ways on how to save it. The underconsumption problem (leading to crises) could be solved by the state stimulating purchasing power though deficit spending, according to both Keynes and Wigforss. Alf Ross24 wrote in a commentary that he saw no problems for a democracy to use planning as a tool (Lewin op. cit.). One could have added that five-year plans

 As chief editor of Dagens Nyheter, the largest opposition daily newspaper.  Alf Ross (1899–1979) was a respected legal and moral philosopher. His books were often referred to in political science. His most important book was perhaps Why Democracy? (1952). 23 24

60

C. Brundenius

were, and still are, very efficient instruments in successful economies in Asia, such as the Republic of Korea and Taiwan. Tage Erlander (Party Leader and Prime Minister after 1946) and Gunnar Sträng (Finance Minister after Wigforss) were—in contrast to Wigforss and Meidner—of the opinion that the interests of wage earners and employers could coincide and that it was the management of enterprises, not ownership, that was of importance (Linderborg 2001). After 1932, there had been a majority in the party leadership that claimed that it was possible to bridle capitalism while at the same time utilizing its dynamic power (op. cit., p. 363). Bertil Ohlin, the leader of the Liberal Party, was annoyed over Lewin’s book, because he claimed that the Swedish welfare model was liberal, not social democratic (Lewin, p. 218). He also protested against the assertion that there was a bourgeois “block.”25 Åsa Linderborg suggests that Lewin tried to save social democracy not only from Tingsten’s not so flattering verdict but also from the New Left that was aggressively digging into historical documents, trying to reveal SAP’s consensus policies with big capital (op. cit., p. 219). Ernst Wigforss, who played a leading role in Lewin’s book, expressed satisfaction with the author’s analysis (and he was probably also flattered by the role attributed to him). For Wigforss, it was obvious that a reformist socialist movement can be Marxist, but he was very hesitant to making planning synonymous with socialist policy, as Lewin claims (op. cit.). The social democratic journalist Olle Svenning expressed criticism of Lewin’s dissertation from a leftist position. He questioned one of the main conclusions in the dissertation, namely, that Wigforss with a loose form of planning ideology should have replaced the socialization objective, and thereby retreated from the question of ownership and economic democracy (Linderborg, p. 221). What did Möller and the social democracy mean by “socialization”? In the original Party Program from 1897, it had been emphasized that the goal of social democracy is the “social liberation of the working class” and this should be achieved through “the abolishment of the monopoly of private capital over the means of production and its transformation to a common good owned by the entire society” (Antman 1999). In 1969 Gunnar Adler-Karlsson introduced the concept of functional socialism, to describe the Swedish variant of socialism. He said that the long term objective of the party should not necessarily be to socialize the means of production but rather to socialize the consumption, and especially social services, the result of the productive system (Adler-­Karlsson 1969). 

 Ohlin had in 1944 claimed in an article that Folkpartiet (the LP) is a “left party” and that it has – in opposition to the Right Party – driven forward universal suffrage and many economic and social reforms (Lewin 1967, p. 297). 25

3  Social Democracy and the Fate of the Swedish Model

61

“Harvest Time”: The Golden Welfare Years (1945–1975) It was during the first 30 years after the Second World War that SAP influence and dominance became almost hegemonic. It was during this period that the ruling party carried out many social reforms, laying the foundation for Folkhemmet,26 where the citizens could expect security and social protection, thanks to what Gunnar Myrdal called the “strong society.” A pillar in this philosophy was that social reforms need an economy with sustained growth and full employment. Increasing production (and not least exports) would lead to a system where social reforms could be continuously financed through steadily increasing tax returns to the state. Myrdal is said to have coined the expression “harvest time” to symbolize the period after the end of the war, when the social democrats could reap the fruits from the seeds of the 1930s (Hägg 2005). During these golden years,27 the state enjoyed trust by people in general to solve societal problems, and the state (government) was seen by many as a reliable mediator in social conflicts. Trust, or what today is called social capital, was important in the building of the Swedish welfare state. During this period, there was a remarkable increase of state and other public activities. Sweden was often referred to as a “socialist country” abroad—by many with horror—while others looked at it as an admirable example to follow: democratic socialism. In 1947, the government proposed a law that would introduce a universal monthly child allowance to all children up to 16 years. This was thus a general—not means tested—law that was a very welcome contribution to the economies of many families. Wigforss, the Finance Minister (until 1951), was instrumental in getting a radical tax reform passed in the Parliament, implying a flattening of the income differences through a progressive income and wealth tax. The most radical part of the tax reform was the introduction of an inheritance tax. Means-tested housing allowances were introduced for the first time. The government also set up a committee to explore the feasibility of implementing a general public pension system for workers and employees, based on their working life. Some other important reforms saw the light in this period: 1948: Law on General Child Allowance (from 1937 there had also existed child allowance law but based on income). 1952: Law of Freedom of Religion. It was now possible also to be “without religion.” 1956: Social Assistance Law. Primarily economic support to unemployed people without unemployment insurance. 1960: National Retirement Pension, guaranteed by the state (see below).

 The popular saying goes: “while it was Per Albin Hansson who created Folkhemmet, it was Ingvar Kamprad (IKEA) who furnished it.” 27  The 30 years of rapid economic and social development after the war (1945–1975) is not unique to Sweden of course. In France, the same period is referred to as Les Trente Glorieuses. 26

62

C. Brundenius

Table 3.1  Laws regulating working hours and obligatory vacation Maximum working hours per week 1919 48 1958 45 1967 42.5 1971 40

Minimum vacation 1938 2 weeks (12 days) 1951 3 weeks (18 days) 1963 4 weeks (24 days) 1978 5 weeks (25 days, 5-day working week)

Source: Elmér (1975) and Spross (2017)

1965: Million Program (to build one million homes in 10  years—it was accomplished). 1971: Individual tax declarations. Before taxes were made by household units (couples living together). The tax reform was important since it made it easier (and with more incentives) for women to work outside the home. Working hours per week were also regulated by law and so was obligatory vacation (see Table 3.1).

 he Rehn-Meidner Model: Equality and Full Employment T with Low Inflation For some, this is the Swedish model. It was developed by the two Swedish LO economists Gösta Rehn and Rudolf Meidner in 1951 with a report to the LO Congress. The point of departure in the model was the imperative of full employment28. The report was called the Trade Unions and Full Employment, and the Rehn-Meidner model was an important instrument in labor market policy and strategy until the 1980s. The idea was to use a combination of Keynesian economic theory and real income development with an active labor market policy and state intervention when needed. The goal was to sustain effective domestic demand, overcoming rollercoaster business cycles. This created security and stability for workers and employees as well for private industry and consumers. Of course, an important ingredient in this model was a safe and progressive income tax. The model had four concrete objectives: (1) low inflation, (2) full employment, (3) high sustained growth of the economy, and (4) an equal income distribution. The model is also related to the solidarity wage policy that will be discussed later. After the war, it had become obvious that it was shortage of labor that caused wage increase (wage drifts), which exceeded productivity growth and which as a result led to inflation. In 1949, the government had ordered a wage freeze that turned out to be a total failure. It was clear that full employment and price stability were two conflicting goals.

 Meidner himself refers in this context to the British Labor Party’s (or rather Beveridge’s) definition: “full employment is the situation where there are permanently more jobs to fill than those who can fill them” (Meidner 1993). 28

3  Social Democracy and the Fate of the Swedish Model

63

The proposal could be seen, says Meidner, as a form of modified Keynesianism (Meidner  1998). Total demand, exercised through fiscal and monetary measures, should be high—but not too high—to ensure the full use of the productive resources and all skills in branches and in each region. “Inflation should be avoided not by inflating effective demand but by selected and targeted labor market policy measures, such as retraining of redundant labor, wage subsidies for disabled and older workers, and workers in general to become more mobile.” The idea was that this active labor market policy would also attract women to enter the labor market. Here social legislation was of big help to facilitate this through the establishment of subsidized day care, lengthy maternal leave, and equal pay for equal work. A problem with the Rehn-Meidner model was ironically the idea of equality through solidarity, or what was to be known as the solidarity wage policy. Meidner says that they “were aware that powerful unions could jeopardize the stabilization policies through aggressive wage claims” (Meidner 1993). But the model was conceived within the framework of wage solidarity and not the specter of ­ unemployment. The goal of the centralized wage negotiations between LO and SAF (the Employers Confederation) was thus a wage structure that was based on the kind of work and work skills rather than on the productivity of branches or individual companies. But, paradoxically, what happened during the golden years of growth was that some branches, especially the big corporations, accumulated excess profits due to the solidarity wage policy that led to a compression of the wage structure. It was this problématique that led LO to ask Meidner to come up with ideas and suggestions on how to solve that dilemma. The Rehn-Meidner model, or rather strategy, was quite efficient and persuasive during the 1950s and 1960s and “during its heydays one could see the model as both an economic program and an economic theory for the Social Democratic Party” (Jacobsson 2004). When “market forces” took over in the 1980s, the situation was quite different, and the conditions for aggressive social democratic policies were rapidly changing, as will be discussed in the section “The 1980s: ‘The Market’ Takes Over”.

ATP: A General but Targeted Pension System In the mid-1950s, the SAP proposed to introduce a general and obligatory public pension scheme, linked to number of years worked until the age of 65. This pension, in addition to the basic old-age pension, was called ATP (general income pension). An advisory plebiscite was arranged in 1957 with three alternatives: 1. Alternative 1 (proposed by SAP with support from SKP): publicly managed, where benefits not necessarily corresponded to contributions (46% of the votes)

64

C. Brundenius

2. Alternative 2 (proposed by the Conservative and Liberal Parties): obligatory ATP but managed by private insurance funds and with close correspondence between contributions and benefits (15% of the votes) 3. Alternative 3 (proposed by the Center Party— the former Farmers Party): voluntary and private additional pension (35 % of the votes) Alternative 1 narrowly won (by one vote!) in the Riksdag in 1958. In retrospect, it is clear that this was an important victory for the social democratic policy of income leveling in general and with respect to leveling pensions in particular. The ATP struggle is said to have been a watershed in Swedish policy, especially since it implied a deep split between SAP and its coalition partner since 1951—the Farmers Party.29 At the same time, SAP moved from being primarily a blue-collar party to also embracing a growing white-collar class, becoming a wage earner party. With the ATP system, SAP wanted to expand its elector base. While Prime Minister  Erlander was worried about “the discontent of rising expectations,” meaning continuous expectations of more and more welfare and the difficulty to satisfy all people in the long run, Gunnar Sträng, the legendary Minister of Finance, proclaimed triumphantly in 1969 that “the building of the welfare system is now concluded” (quoted in Sjöberg 2003).

The “Guest Workers” The Swedish industry was rapidly expanding and needed laborers. There was at the beginning a sufficient inflow, thanks to growing birth rates but also to the emigration from rural areas to the towns. Although productivity also increased, the demand for labor in the industrial and service sectors continued to be high. A report pointed at the need to stimulate immigration—that was something quite new in Sweden.30 The idea was that immigration would be to attract younger workers from primarily the Mediterranean countries to come to Sweden and stay as “guest workers” —for a limited time. In the period 1945 to 1967, Sweden received almost 700,000 immigrants, of which most were guest workers. Some went back to their countries (primarily Italy, Spain, Greece, Turkey and Yugoslavia), but many of them stayed and became Swedish citizens with their families. This period was the first time that there were more immigrants to Sweden than Swedes that emigrated (Fig. 3.1). From the end of the 1950s the state’s expenditures on social welfare exploded, from 10% of GDP in 1960 to 30% in 1985. The social expenditures have remained at a level oscillating between 26 to 31 percent of GDP since then (Fig. 3.2). 

 The party had changed its name to the Center Party in 1957.  In a report from 1946 on the future demand for labor in Sweden, a whole section was devoted to the need for an “immigration policy” (Ahlberg and Svennilson 1946). 29 30

3  Social Democracy and the Fate of the Swedish Model

65

Fig. 3.1  Migration flows in Sweden 1875–2016. Source: commons.wikimedia.org 

35 30.6

30

30

27.2 24.8

25

26.8 27.4 26.3 27.1

20.03

20

16.06

15 10.14

10 5

0.72 0.85 0.85 1.03 1.14

2.59

0

Fig. 3.2  Public social expenditures in Sweden as percent of GDP, 1880–2016. Source: Author, based on SCB (various reports)

66

C. Brundenius

Table 3.2  Growth indicators by quinquennial periods, 1932–1980 (annual average growth) Periods 1932–1935 1935–1940 1940–1945 1945–1950 1950–1955 1955–1960 1960–1965 1965–1970 1970–1975 1975–1980 (opposition)

Gross domestic product 5.3% 3.0% 3.7% 5.0% 4.2% 3.4% 5.2% 4.1% 2.6% 1.3%

Industrial production 11.6% 4.3% 2.3% 7.5% 4.0% 6.4% 7.2% 4.9% 2.4% −0.4%

Source: SCB National Accounts

 age Earner Funds and the End of Social Democratic W Hegemony The 1970s saw two counteracting tendencies: a radicalization of the labor movement on the one hand, partly as seeds of the rebellious 1960s, and on the other hand mounting opposition from the right as a result of the crisis—globally—of the postwar economic system: The oil crisis (with quadrupling of oil prices almost overnight in 197331), the subsequent collapse of the Bretton Woods system, and with neoliberal ideology beginning to permeate the political discourse gave bourgeois opposition parties wind for the 1976 elections. From the mid-1970s, Sweden entered a period of significant slowdown of growth, and its backbone of the Swedish economy, the export industry, found it increasingly difficult to maintain conquered shares in the world market. Industrial production fell and the industrial crisis led to lower GDP, and in 1977 GDP per capita declined for the first time since the war. The first postwar recession had come—but it would not be the last (Table 3.2). However, the Rehn-Meidner model was sustained with continued low unemployment rates all through the 1970s (Table 3.3). In September 1976, the SAP lost the parliamentary election for the first time in 44 years. In a way, it is strange that the end of social democratic hegemony occurred already in the 1970s. In the 1968 elections, SAP had obtained over half of the electoral vote (a record high). The party had since 1969 a new, charismatic leader, Olof

 The origin of the oil crisis was the Yom Kippur War between Israel and Egypt and Syria (October 6–25, 1973). OPEC stopped its oil deliveries to the United States and Western Europe, with big repercussions on the world economy. The golden years with high growth rates were over. 31

3  Social Democracy and the Fate of the Swedish Model

67

Table 3.3  Unemployment rates, 1965–1980, by sex (selected years) Year 1965 1970 1975 1976 1977 1978 1979 1980

Both sexes 0.8 1.0 1.0 1.6 1.8 2.3 2.1 2.0

Men 0.9 1.2 1.0 1.3 1.5 2.1 1.9 1.7

Women 0.6 0.9 1.0 2.0 2.2 2.4 2.3 2.3

Source: SCB Historical Statistics

Palme, who had rapidly reached world fame, not least for his unwavering solidarity with the Third World. LO was being radicalized with a militant worker base, and the students were on the move, like in the rest of Europe and in the United States. But it was also in the 1970s that the Swedish labor movement decided to explore the feasibility to introduce “wage earner funds” as a means to promote economic democracy and capital accumulation in the country. The outcome of this attempt will be discussed here.

The Wage Earner Funds: The Quest for Economic Democracy Considering that changing political winds were foreboding an end to social democratic hegemony in the 1970s, it may seem a bit paradoxical that LO launched and promoted a new brave idea at its congress held in 1971. The LO Congress entrusted its research unit, led by Rudolf Meidner, to prepare a report on the feasibility of introducing collective investment funds in the Swedish economy. The background was that the solidarity wage model did not work anymore. Due to the economic boom in the 1950s and 1960s, enormous profits—“excess profits” —had been accumulated in many big concerns but also in middle-sized firms. These “excess profits” were said to jeopardize the whole solidarity wage idea. While workers in high-profit branches abstained from wage increase (in order to equalize the wage levels), the high-profit companies used these “excess profits” for self-investment, which were out of control by the wage earners. Rudolf Meidner, who was an economist with radical ideas, was thus asked to come up with a proposal on how to deal with these “excess profits.” His report was published in August 1975, and it turned out that Meidner came up with a much more radical proposal than expected. One daily paper exclaimed “Revolution i Sverige!” (Revolution in Sweden!) with big letters at its front page.

68

C. Brundenius

The 1971 LO Congress The 1970s was a decade of contradicting tendencies. While the labor organizations took the offensive demanding increased worker participation, the political winds were blowing in the opposite direction, and this is also what worried the SAP leadership. But let us get back to where it all started. LO holds congresses every five years. The mood among the participants (mainly representatives from various branch unions) had changed between the 1966 Congress and the one held in 1971. During the second half of the 1960s, there had been a notable swing to the left in the political climate in Europe (and also in the United States)—not least as a result of the protests against the war in Vietnam—and this was also the case in Sweden. The student revolts abroad also radicalized the labor movement. The labor movement was increasingly imbued with a strong compassion for solidarity and equality. Mounting pressures for radical reforms, for economic democracy, and for labor participation in decision-making and power sharing were the most important reasons behind the Meidner proposal. Academics together with workers and employees were not only sympathizing with the independence struggles in the Third World. They were also demanding economic democracy and equality in Sweden.32 At the 1971 Congress, many delegates criticized the wage solidarity policy to be a failure, and the focus in the debates was on the mentioned “excess profits” that were considered to be “unpaid wage space.” A government report about wealth concentration in Sweden found that, in 1964, 5% owned 30% of all taxable wealth in Sweden (Viktorov 2007). Swedish capitalism was  known for its high wealth ­concentration. While some studies before had shown that the wealth and income disparities had been stable since 1945, the tendency in the 1960s was clearly toward higher concentration. But in Meidner’s proposal in August 1975, it was power sharing in the capital accumulation that turned out to be the most controversial objective. Meidner’s original proposal was that 20% of the profits of the concerned companies would  be directed to wage earner funds (WEF), managed by boards where the wage earners would have a majority representation. In the longer run, these funds would own over half of the shares on the Swedish stock exchange. Or, as Meidner explained in a surprisingly frank interview with the LO trade union journal:33 “We want to deprive the capital owners of their power, which they enjoy just because of their ownership. All experience has shown that it is not sufficient with influence and control. Ownership plays a decisive role. I want to refer to Marx and Wigforss: we will not be able to fundamentally change the society unless we also change the ownership structure” (CB translation).

 Göran Therborn, a young academic, got an important influence with his book A New Left (Therborn 1966). 33  Fackföreningsrörelsen 1975:21 (quoted in Sjöberg 2003). 32

3  Social Democracy and the Fate of the Swedish Model

69

Box 3.1: Overview of justifications and objectives of the four WEF proposals August 1975: Meidner’s Original Proposal (to LO) Title: Wage Earner Funds Justification: “Excess profits” and increase in concentration of wealth and power undermine the wage solidarity policy Objectives: Equalization of difference in wealth structure and democratization of economic life through wage earners’ influence are the two major objectives— and the most important one is “to successively transfer capital accumulation to the ownership of wage earners.” Targeted Companies: Companies with over 100 employed Financing: Targeted obligatory emissions (20% of profits before tax) 1978: The SAP-LO Joint Proposal Title: Wage Earner Funds and Capital Formation Justification: To stop the wealth concentration in the private sector and create conditions for economic democracy Objectives: To support the wage solidarity policy; to counteract wealth concentration (to the leading concerns) that is a result of industry’s self-­financing; to increase the influence of wage earners over the economic process; and to contribute to collective savings and capital formation for productive investments. Targeted Companies: All limited companies Financing: Targeted obligatory emissions (20% of profits before tax) during a 5-year period (additional 5-year period to be decided by the Riksdag)

February 1976: Meidner’s Report to the LO Congress Title: Collective Capital Formation Through Wage Earner Funds Justification: The unacceptable wealth concentration that jeopardized the whole meaning with wage solidarity Objectives: To complement the wage solidarity policy by “solving the ‘excess profits’ problem”; to counteract wealth concentration (to the leading concerns) that is a result of industry’s self-financing; to increase the influence of wage earners over the economic process Targeted Companies: All companies with more than 50 employed Financing: Targeted obligatory emissions (20% of profits before tax) 1981 Joint SAP-LO Report to Be Presented to SAP and LO Congresses Title: The Labor Movement and the Wage Earner Funds Justification: To contribute to a functioning capital formation in the private sector; the wage earner funds shall also contribute to taking Sweden out the crisis Objectives: To successively increase wage earner influence and economic democracy; a collective capital formation will create better conditions for growth and employment policies; to contribute to the ATP system Targeted Companies: All limited companies Financing: (a) 20% of “excess profits” (15% to 20% which exceeds invested capital); (b) through a 1% increase of the wage earner contribution to the ATP system

The Report to the LO Congress in 1976 Meidner and his group followed up their first study with a report to the LO Congress in June 1976, just 3  months before the general elections. The 1976 report toned down some of the most enthusiastic original ideas, but the main ideas were still there (see Box 3.1). Although the Meidner proposal clearly hinted at the likely

70

C. Brundenius

socialization of large parts of Swedish industry within a few decades, the proposal was adopted at the congress. The question was how the ruling Social Democratic Party would react. The party, of course, does not have to accept—or like—whatever LO proposes. But, on the other hand, the party has to be attentive to the claims and demands by the major worker organization, in order not to lose an important part of its elector base. It is clear that the party leadership was less than enthusiastic. Some commentators (most of them autobiographies) claim that Olof Palme himself was surprised over how radical the proposal was (Sjöberg 2003). This is not correct, claims Meidner, who says that he already in March 1976 informed the party leader (and at that time still Prime Minister) about the proposal, including about the LO secretariat’s own detailed comments (Ekdahl 2002). In any case, it is clear that in August 1975, just after the publication of the first Meidner report, Palme had been quite optimistic, and in an interview with a trade union journal,34 he said: “It will go quicker to solve problems with the WEF than with ATP. Meidner’s proposal is a concrete model to give the wage earners shares in the wealth building and the model will not upset the market economy…” (CB translation). It is no secret that the LO Congress decision in 1975 to adopt Meidner’s proposal came as bombshell to the SAP government. Kjell-Olof Feldt, Trade Minister (1970–1975), was one of them. He writes about these days in his memoirs, how startled the government was over this proposal. “But what not only surprised us but also shook us up was, having been so convinced about our road to economic democracy, the we had been so wrong in interpreting the mood in our own movement” (Feldt 1991; CB translation). In other words, the party was not in tune with the labor union.  Government Committee to Study the “The Viability of Wage Earner A Funds in Sweden” Ironically, it was the Liberal Party35 that had taken a broader initiative by asking, already in 1974, the (still social democratic) government to set up a committee to look at the viability of wage earner funds in Sweden. In a way, this was not s­ urprising for two reasons. The social democrats had been collaborating with the Liberal Party during the first part of the 1970s (until losing the elections in 1976). This was especially the case in 1974 and 1975 when this bipartisan collaboration led to a revision of the tax system (the so-called Haga Agreements). The 1974 agreement implied a tax relief for middle-wage earners, lower retirement age, and tougher measures to

 Fackföreningsrörelsen 1975:21).  The LP changed names several times. Between 1934 and 2015, it was called Folkpartiet (The People’s Party. The LP is used all the time in this chapter for sake of simplicity. 34

35

3  Social Democracy and the Fate of the Swedish Model

71

combat inflation. In 1975, a new Haga Agreement led to the removing of the ceiling of payroll taxes (paid by the employer). Another reason was that the Liberal Party had during 1969–1978 a quite radical and influential party secretary, Carl Tham. Actually the party had for many years been in favor of profit sharing schemes to workers, or similar to the system that had been introduced in some companies in Germany. But Tham36 now also urged the party to give up its resistance to collective funds. The party also did so—but just for a while—until the SAP lost the parliamentary elections in September 1976. An opposition coalition consisting of the three bourgeois opposition parties, the Center Party, the Right Party, and the Liberal Party, now formed a non-socialist government for the first time since 1932. The Liberal Party was understandably no longer interested in having their own deals with the archenemy—the social democrats - and they seemed to be ashamed of its past, in particular its participation in the state inquiry on the viability of wage earner funds, which they themselves had asked the government to initiate37. When the committee started its work in 1975, it was with little enthusiastic participation by the Social Democratic Party. SAP was still the ruling party, and they were more interested in following up on what LO was up to. LO had ideas that were much more ambitious. It was more relevant—they thought—to discuss the LO proposal than to discuss with a committee that, in addition to SAP and LO representatives, consisted of members from the opposition, as well as of representatives from the trade unions and the employers’ confederation. The committee was expected to finish its work in 1981, but the main official report from the committee was published already in 1979,38 probably because there were too much disagreements in the committee. In the meanwhile, the opposition had taken over the government (after winning the elections, both in 1976 and 1979). Not surprising, the Liberal Party switched its position in the committee, now insisting on individual profit sharing with wage earners, instead of collective funds, and the social democrats and LO lost interest in the inquiry. And so did the others. At the same time, daily bourgeois papers started vicious attacks on the social democrats, for again39 trying to “socialize the economy like in Eastern Europe,” and not least against Palme personally (Sjöberg 2003). It is clear that the opposition scented that there was a possibility of “systemic change,” although this was denied by the Prime Minister, Torbjörn Fälldin (Center Party).

 Tham later joined the Social Democratic Party and became in 1985 also minister.  Anders Johnson: Liberala misstag och svek vi minns (Liberal Debatt, 28 mars 2016) https:// www.liberaldebatt.se/2016/03/liberala-misstag-och-svek-vi-minns/ 38  SOU 1979:8, Löntagarna och företagens kapitaltillväxt (The Wage Earners and Company Capital Formation). 39  Referring to the “planning debate” just after the war. 36 37

72

C. Brundenius

The SAP-LO Joint Proposals in 1978 and in 1981 The Social Democratic Party, especially Olof Palme, was in a state of disarray. On the one hand, they realized that collective wage earner funds were interesting and should be tested. But on the other hand, SAP had lost the elections, perhaps just because of the radical proposals by Meidner, adopted by the LO Congress in 1976. Private industry was no doubt scared by the perspectives of being “socialized.” Thus, the message had to be toned down, and therefore it was important for the party to take a more active part in the process. In 1978, SAP and LO prepared a joint proposal (see Box 3.1). The justification for wage earner funds was “to stop the wealth concentration in the private sector and create conditions for economic democracy,” and although economic democracy was not singled out as an objective per se, workers’ influence and interests were mentioned as the primary objectives. Most important however was the new objective “to contribute to collective savings and capital formation for productive investments.” In 1981, a final joint SAP-LO proposal was presented to both congresses that year (see Box 3.1). The justification for wage earner funds was now primarily to contribute to capital formation in the private sector, and the wage earner funds would also be a means to take Sweden out of the crisis, not mentioning any more about the need to counter wealth concentration, or to create conditions for economic democracy.

The Fate of the Wage Earner Funds The WEF issue continued to hang like a sink stone around the neck of the Social Democratic Party. It was clear that the WEF was not an issue that would attract votes in the upcoming 1982 elections. But at the same time just burying the question would be a betrayal to LO and the labor movement at large. The party therefore prepared a new WEF version where most of the controversial issues (which had infuriated the bourgeois parties and SAF), were deleted or toned down. After winning the 1982 elections, the social democratic government presented the WEF proposal as a bill to the Riksdag, where it was passed on November 21, 1983.40 Finance Minister Feldt had not been enthusiastic41 about being the one to have to introduce the government WEF bill in the Parliament in November 1983. The bill was a much watered down version of the original Meidner proposal. In fact, it had very little resemblance to it. Or, as Meidner himself commented on the final bill: “In 1983 the government reluctantly accepted the principle of collectively owned wage-earner funds, but it watered down the original intentions so much that  Government Bill 1983/84:50.  He was observed (by a photographer) writing in his notebook: “wage earner funds are shit, but now we have pushed them all the way bit by bit” (in Swedish: “löntagarfonder är skit men nu har vi baxat dem ända hit”). 40 41

3  Social Democracy and the Fate of the Swedish Model

73

they made the fund idea largely a symbolic gesture…” and that “the scheme had been changed beyond recognition from the original” (Meidner 1993). In retrospect, one can wonder why the party even bothered to propose the bill. As justification, the bill pointed at the worsening economic situation of Sweden and that “a re-established financial balance predicates considerable industrial growth and a high profit level in the industrial companies” and that “the most important task of the WEFs is to help creating the conditions of a growth and stabilization policy that is also acceptable from a distributional policy point of view” (CB translation). All companies were to set aside 20% of “excess profits” to the funds, and the wage earners were, in addition, obliged to set aside an increased fee for the ATP system. The idea with WEFs was thus no longer to successively increase wage earner influence and economic democracy. Collective capital formation was limited to the task of creating better conditions for growth and employment policies and of contributing to the ATP system—not necessarily a bad intention, but very far from the original vision of economic democracy. Five regional funds were set up. LO was not involved at all, and the board members were appointed by the government, not the labor movement. An important justification with the funds was to provide private industry with risk capital, but the funds would each be allowed to own only up to 8% of a company. In spite of this watering down of the original idea with collective wage earner funds—in an attempt to appease the opposition?—the result was instead an infuriated opposition and a big demonstration against WEFs that took place in Stockholm on October 4, 1983, just before the bill was presented in the Parliament. Pressed by the opposition, Olof Palme got the question what “the next step” was with the funds, and he explained that “the five regional funds will by 1990 own around 8–10% of total stocks, and there is no further step.” But to no avail, the opposition was not in a mood to be cooperative—scenting the possibility of systemic change—at last. After winning the elections in 1991, one of the first actions of the new bourgeois government was to propose a bill to dismantle the wage earner funds. The end result was that most of the money was used to strengthen the new General Pension Fund (Allmänna Pensions Fonderna). In addition, 10 billion SEK was transferred to various research foundations, among these the newly created Foundation for Strategic Research. So in this sense, one could say that the money had not been totally wasted.

Why Did the Original Wage Earner Fund Idea Fail? This is a question that was debated at the time and is still so today. Several doctoral dissertations have focused on this question (see Åsard 1978; Sjöberg 2003; Viktorov 2006). Two of them (Sjöberg and Viktorov) suggest that Meidner’s (also LO’s) radical proposal came at a time of paradigm shift in the capitalist world economy, moving from Fordist (mass, assembly line) production to flexible specialization with automation and the IT revolution.

74

C. Brundenius

Viktorov focuses on the crisis of Fordism as a decisive explanation behind the renewed interest of the labor movement in capital accumulation and relations of production. Fordist mass production with conveyer belts, assembly lines, and standardization and rationalization of work had changed working conditions for Swedish workers, and this was changing with the postindustrial society. Sjöberg sees this change as a turning point for the labor movement, and the end of social democratic hegemony, or as Pontusson calls it “the limits of social democracy” (1992). The tides were turning against radical social change. Long wave theories are also interesting in this context. Neo-Schumpeterians link the five Kondratiev cycles (each 50–60 years long) to techno-economic paradigms shifts that could help explain the new tides. The upswing of the fourth Kondratiev cycle was caused by the rapid spread of Fordist mass production and assembly lines, but it also foresees its problems with cheap oil as energy source, witnessed by the subsequent oil crises from the mid-1970s on (Viktorov, op. cit., Schön (2012), Pérez (2002)).

What Was Palme’s Position? It is quite clear that Palme wanted to defend the need for wage earner funds in the Swedish economy while at the same time wanting to tone down its most provocative objective, the question of power. Palme surprisingly did not interfere much with the proposal and how it should be handled by the party, as he did not want to make the question of wage earner funds an election issue just before the upcoming election in 1976 (Meidner 2005). However, Palme expressed already in a speech in 1972 that he was in favor of some kind of wage earner funds: “I think it would be good to find a system where the wage earners get their share in wealth accumulation” (Meidner op.  cit., CB translation). When the first Meidner proposal came, Palme was still in favor but was concerned about the reports focusing so much on the ownership question. The question was: Would this also mean a change of ownership in the long run and the gradual socialization of the economy? Palme was pressed by the bourgeois opposition (just before the upcoming 1976 elections) to give a clear answer about the final objective of the WEF proposal: Was it to gain majority in the capital stock of the large companies? If not, what was the objective? Palme refrained from giving a clear message. Palme continued to be ambivalent when it came the question of power and ownership. Palme wanted to tone down the ownership question in the public debate, and in an interview in 1977, he said that “(while) the question of ownership is not unessential, (it) has never been a major issue for (Swedish) social democracy” (Meidner op. cit., CB translation). However, in an interview in 1978, he said that while being “a convinced advocate of wage-earner funds,” he also insisted that “the main thrust of democratizing working life is the Co-Determination Act42 (of 1976)” (quoted in 42

 MBL = Medbestämmandelagen.

3  Social Democracy and the Fate of the Swedish Model

75

Meidner op. cit.). The Co-Determination Act was considered to be a major advance for the labor movement. It involves workers sharing decision-making in the companies, and it regulates responsibility and authority in the workplace. It is clear that this reform was for Palme a cornerstone in social democratic policy. In a speech to the Party Congress in 1975, Palme said that the proposed bill to make industrial democracy work, the Co-Determination Act, “would be the most important democracy reform since the Universal Suffrage (in 1919)” (quoted in Sjöberg 2002). The bill was passed by the Riksdag in May 1976. But Palme was also concerned about the future and possible increasing attacks on the social democratic welfare state. “It is clear that we must not fail (with the WEF). Should we for a moment give in to the massive propaganda campaign, the field will be torn up: today wage earner funds, tomorrow health insurance, pensions and working hours, the day after tomorrow, working environment laws, and after that perhaps the freedom to strike and the freedom to organize, the right to strike and the freedom to organize.” (Speech at the Metal Workers Congress in 1981; CB translation, original quote in Sjöberg (2003).

Historical Precedents of Collective Wage Earner Funds The Liberal Party was, as mentioned, at the beginning of the 1970s prepared to discuss collective wage earner funds. This should not be surprising since one of the gurus of social liberalism, John Maynard Keynes, was not alien to such thoughts. He had suggested (in 1940) that “the accumulation of working class wealth, under working class control, (could induce) an advance towards economic equality, greater than we have made in recent times” (quoted in George 1992). What Keynes had in mind was a kind of wage-earner investment, consistent with his General Theory: “When the capital development of a country becomes a by-product of a casino, the job is likely to be ill-done” (Keynes 1936). In addition to the Meidner funds there are many other  examples of workers’ participation in profit sharing and/or co-­ determination at workplaces, for instance, in Denmark,  Germany, Yugoslavia (1958–1980) and Peru (1968–1975). Some of these experiences are described and analyzed in Stephens (1980).

Debates on the Law on Wage Earner Funds Outside Sweden The debates on Swedish WEFs arose much attention also outside Sweden (Tilton 1979). The original Meidner collective fund idea was, of course, much discussed at the time (not least in leftist circles), but also the final SAP/government proposal that became a law in 1983 and was subsequently implemented has been much discussed. Paul Whyman, for instance, wrote an article that examined the ability of WEFs to meet macro-economic, financial, and democratic objectives. He concludes that the

76

C. Brundenius

WEFs did contribute to capital formation (the ATP) although they had little or no impact on democratization of working life (Whyman 2006). Jonas Pontusson and Sarosh Kuruvilla arrive at a similar conclusion, saying that Although the wage-earner funds generally met the financial objectives set by the 1983 legislation, their significance in promoting ‘wage solidarity’ (wage determination based on the work performed rather than on firm or industry profitability) and in providing workers with substantial influence over corporate decisions was limited by the size of their stockholdings and the 7-year (1984–90) restriction on the inflow of revenues into the funds.

The authors conclude that “the funds achieved little in terms of furthering economic democracy when compared to the effects of the network of industrial and economic democracy legislation enacted in the 1970s in Sweden” (Pontusson and Kuruvilla 1992).

The 1980s: “The Market” Takes Over When SAP again took over the government after the elections in 1982, the neoliberal winds were already sweeping over the country, like in the rest of Europe, the United States, and the world. Margaret Thatcher had taken over in Great Britain and Ronald Reagan in the United States. “Supply economics” and “Reaganomics” were the new guidelines for economic policy, with deregulation and reduction of the public sector as two of the most important targets. “Leave it to the market” was one of the catch phrases at the time. In news programs on radio and TV, economic commentators said, each time the government, (the National Bank), or the Parliament had announced some legislation, or ideas, that, “we’ll have to wait and see how ‘the Market’ reacts.” “The Market” had become God. SAP was soon to abandon its former economic strategy, epitomized by the Rehn-­ Meidner model. Home woven models were no longer useful in a neoliberal and in a rapidly globalizing world. The kernel of the Rehn-Meidner model had been to maintain full employment while keeping inflation low through moderate wage and profit increases. Without a model, or a plan, the government instead used the old devaluation magic to make export industry happy with increased profits. The devaluation in 198243 was the springboard for the retreat of the Rehn-Meidner model, “by creating a high profit level in private industry that would lift the Swedish economy” (Jacobsson 2004). However, the public sector continued to expand for quite some time, in spite of the economic crisis. It was financed primarily from the taxes that increased from about 20% of GDP at the beginning of the 1950s to 50% at the end of the 1980s.

 After winning the elections, the new government made a “super-devaluation” of 16%. However, it proved to have no long-term impact. After just 3 to 4 years, the inflation (and wages and salaries) continued to increase more in Sweden than in the rest of Europe.‘ 43

3  Social Democracy and the Fate of the Swedish Model

77

Pressure groups appeared whose goal was clear: systemic change. Den nya välfärden (The New Welfare) was founded in 1988, supported by Svenskt Näringsliv (former SAF). They set up institutions and fact-finding publications that would “tell the truth” to the Swedes. The message was clear—more market, less government. The goal was to dismantle what they called “the socialist welfare state.” They even proposed a new constitution, where private property and market economy would be inscribed and sacred.44

From Public Expenditure to Household Debt The British economist Avner Offer Offer (2016) says that social outcomes were to a large extent determined by financial innovations in the twentieth century. From the 1920s to the 1980s through the  rise of public expenditure (from 25% to 50% of GDP) and then from the beginning of the 1980s, with the “market turn,” with rising housing debts, “as a quest to privatize the delivery of government functions.” While public expenditure tended to stagnate (as a percentage of GDP), household debt increased by three times (from 50% to 150% of household disposable income) between 1980 and 2010. The increase in household debt arose to a large extent from home ownership. Offer’s example addresses primarily the experience of the United Kingdom, but it could very well be Sweden. Market liberalism, or neoliberalism, took command all over the Western world.

Deregulation of Credit Markets In November 1985, the Swedish Riksbank decided to abolish the limits on credits to banks, housing institutions, financial institutions, and condominiums (or tenant-­ owned apartments). This led, inter alia, to dramatic increases in housing prices. A price/wage spiral followed that would contribute to the deterioration of the Swedish economy for years to come. But unemployment remained low for the rest of decade (see Table 3.3). In Sweden, financial markets were deregulated, and especially the deregulation of credit led to rapid increases in household borrowing. Housing prices increased more than incomes in general, and many households became heavily indebted in the 1980s. So there were two simultaneous tendencies: growing financial difficulties for the government to sustain entitlements to the population and at the same time growing pressures from “the market” (and the bourgeois parties) for “systemic change.”

44

 https://sv.wikipedia.org/wiki/Den_Nya_V%C3%A4lf%C3%A4rden

78

C. Brundenius

The Government “Right Wing” (Kanslihushögern45) was eager to make the public sector “leaner and more efficient” like the private sector. New Public Management (NPM) was an approach to running public service institutions as private—and therefore more efficient—businesses, which was embraced by the “Right Wing” (Elmbrant 2019). The term NPM was first introduced by academics in the United Kingdom and Australia in the early 1980s, and the first practices of NPM emerged in the United Kingdom under Margaret Thatcher. She was very successful, but she never dared to touch the National Health System (NHS). The “November Revolution” in 1985 with the unwarranted deregulation of the credit market and liberalization of the foreign currency policy was just a start. After winning the elections again in 1988, it was the government’s idea (and especially Feldt’s and his neoliberal group of advisors) that the party would lose the next elections, if there was not an overhaul of the tax system, an overhaul that could only happen in agreement with the opposition (Elmbrant op. cit.).

The End of the Rehn-Meidner Model In 1990, just one year before the elections, the government initiated a series of policy measures that would keep the inflation under control at the expense of higher unemployment. The high inflation rates since the 1970s (see Table 3.11 in the Annex) had finally killed the Rehn-Meidner model, one of the backbones of the Swedish model. The relentless and persistent high inflation rate had its origin in the oil crises, with successive increases in the price of energy, and it was of course not cured neither by the devaluation of the Swedish crown in 1982 nor by the neoliberal credit expansions in 1985. The government had tried to carry out an expansive policy through subsidies to industry and with a heavily underfinanced budget. The abandoning of the Rehn-Meidner model was another blow to the Swedish model where full employment had been singled out as the most important goal for the labor movement.46 Some government advisors suggested that there were no convincing reasons for child care centers to be organized by the public and financed by taxes. Another bold idea was to suggest that the social security system be replaced by a system that just guaranteed basic security. This created a storm of protests and indignation from both the labor movement and members of the cabinet.47 “The War of the Roses”48 was now in full swing.

 Kanlihushögern (the Right Wing of the Government) was the nickname (or perhaps rather the invective) referring to the group of young economic advisors at the Ministry of Finance (“KjellOlof Feldt’s boys”). In 2019, a book was published about this time (Lindgren, editor 2019), with contributions by many of those involved. 46  The Postwar Program and the Party Programs of the Social Democratic Party. 47  LO had an article in their journal entitled “The government abandons the equalization policy,” and the Minister of Foreign Affairs warned in an article in the party paper Arbetet that “Rightist ideas begin to gain foothold in the party” (Elmbrant 1993). 48  The press often referred to the War of the Roses, when the left and the right in the party started fighting. 45

3  Social Democracy and the Fate of the Swedish Model

79

Table 3.4  Growth indicators by quinquennial periods (annual average growth) Periods 1980–1985 1985–1990 1990–1995 (opposition) 1995–2000 2000–2005 2005–2010 (opposition) 2010–2015 (opposition) 2015–2018

Gross domestic product 1.7% 2.3% 0.6% 3.0% 2.5% 0.7% 2.3% 2.4%

Industrial production 2.0% 1.8% 4.3% 4.4% 1.9% −1.5% −1.0% 3.4%

Source: Author, based on SCB National Accounts

Overhaul of the Tax System The SAP leadership was worried that they would lose the general elections in 1991 if they did come up with a proposal to overhaul the tax system, especially coming to grips with the marginal tax that in some case was approaching 85% (!). An agreement49 was reached with the Liberal Party in 1990, which had the result that a ­typical income earner would just pay 30% communal tax and the marginal tax would be limited to 50% (Ohlsson 2014). The general elections in 1991 signaled a definite turning point for Swedish Social Democracy. They lost the election to a bourgeois opposition that wanted systemic change—nothing less. The SAP was still by far the largest party (with 37.7% of the votes), but the result was much lower than in the past (see Annex Table 3.9). Although SAP managed to stay in power during the rest of the 1980s, the decade had been sad for the party. Olof Palme had been murdered on February 28, 1985, and the party had lost an undisputed leader. Some say that the party also lost its soul and direction.

Systemic Change When did the Swedish model fall? Well, it did not fall overnight—as little as it rose overnight. It fell gradually—some would even say sneakingly. There is still a welfare model, but it is not the same model; it is a modified model, and it is hardly “social democratic” any more even if many claim that it still is.50 Elmbrant says that the fall of the model started already in the 1980s when SAP got back to the power, and the public sector came under attack. The SAP government prepared the ground

49 50

 It would be called the “Tax Reform of the Century.”  See, e.g., Lindbom (2011).

80

C. Brundenius

for the coming systemic change in the 1990s (Elmbrant 1993). Instead of defending a strong public sector, the government itself started undermining its viability. But it is under the governments led by the Moderates (the former Right Party) that giant steps were taken on the road toward privatization of the welfare sector. However, there is no evidence that the privatization issue was of much interest to the electorate in 1991. Perhaps this was because the SAP was on the defensive (after the Berlin Wall), trying to eschew discussions that could sound like defense of “socialism” or “socialist ideas” (the famous guilt by association complex). The bourgeois opposition had won the general elections in 1991, and Carl Bildt, the leader of the Moderates, became Prime Minister.51 Inflation would now be controlled at all cost through a fixed foreign exchange rate policy (no devaluation). The Swedish economy now got other acute problems. A growing financial crisis coupled with increasing unemployment was undermining the credibility of sticking to the fixed exchange rate. The new government focused on deregulation and privatizations as remedies. The public sector must be reduced (and so must therefore some welfare entitlements). In the meanwhile, the Swedish crown was exposed to speculation by foreign investors,52 and the response by the government was to increase the interest rate with the result of an even deeper crisis, until the Riksbank in September 1992 raised the marginal interest rate to 500% (!). But it did not help, and the interest rate was let to float. The government invited SAP for discussions to agree on ways and means to overcome the crisis. An agreement was reached, implying lowering the compensation levels in some social entitlements, such as sickness leave, and retirement pensions were lowered, and the promised child allowance increase was put on ice. Some state taxes were increased, notably the VAT, but not the income tax. At the same time, the employer’s (payroll) contributions were lowered.

SAP’s Return to Power However, SAP managed to reconquer the government by winning the elections in 1994, and with the support from the Left Party and the Green Party, they could rule with a comfortable majority.53 But the tides were against a new socialist offensive. The collapse of the Soviet Union and their client states in Eastern Europe also had repercussions on Swedish social democracy. In Great Britain, Tony Blair had proclaimed that the new times made it necessary to open up for a Third Road—between socialism and liberalism. Göran Persson,54 new SAP leader and now Prime Minister,  The coalition government: The Moderates, the LP, the Center Party, and the Christian Democrats. An extreme right party also got seats in the Riksdag (New Democracy) for the first time. 52  Among these, George Soros, the multibillionaire. 53  SAP got 45.3% of the votes, the Green Party 5.0%, and the Left Party 6.2%. 54  It was Göran Persson who, as Minister of Education, in 1989 was behind a disastrous “communalization” of the school system in Sweden (discussed below). 51

3  Social Democracy and the Fate of the Swedish Model

81

became quickly a fan of his ideas, especially after Blair’s triumphant election ­victory in 1997. The SAP government (1994–2006) in many ways continued the bourgeois government’s policy of retrenchment of entitlements. Unemployment benefits were easiest to reduce, although, in the past, a decent unemployment insurance had been part of the Rehn-Meidner model. But the new SAP government had no scruples and cut benefit levels further. The benefit levels had been 90% before the crisis in the 1990s. The Bildt government reduced it to 80%, and Göran Persson reduced it even further to 75% in 1996. But after protests from LO, the government restored the level to 80% in 1997 (Lindellee 2018). The SAP government also continued the selling off of state-owned companies that started with  the bourgeois government already in 1991. These sell-offs have been criticized by LO, left wing social democrats, and the Left Party. They have also been criticized by liberal and conservative policymakers and commentators, not because state property has been outsourced but just because they were sold too cheap.

 ecentralizing School Management and the Beginning D of Privatization of Education One of the most radical and controversial educational reforms was the transfer of management of the schools from being a state responsibility to being a local—communal55—responsibility. The reform was carried through in 1991 with the new bourgeois government, but the decision was actually taken by the Riksdag, at the initiative of the social democratic government in 1989. Since the reform, the quality of education has decreased appallingly, which is evidenced by Sweden’s poor scores in the PISA reports. The teacher union has been against this reform from the beginning—since there are no common goals set by the state and it is rather up to each commune to set the targets. Today, there are also several parties that propose the renationalization of the schools (including the Liberal Party). To make it worse, in 1992, the first bourgeois government (1991–1994) introduced the so-called Free School Reform. The idea had actually already started in the 1980s with the SAP government. While the original idea had been to open up for parent cooperatives, religious schools, and schools with alternative pedagogy (for instance, Montessori and Waldorf), the 1992 reform now opened up for any type of private school initiative, even to make profits.56 It was the latter possibility that

 Sweden has 290 communes and 20 regional councils (the latter primarily responsible for hospitals and other health care). 56  The rapid expansion of corporations (“risk capitalists”) establishing schools (especially high schools) seems to have taken at least some of the bourgeois initiative takers by surprise. “There was nobody who could imagine corporations in front of us,” says Beatrice Ask, a member of parliament from the Moderate Party (LO 2018). 55

82

C. Brundenius

c­ reated a storm of protests. How could it be justified to use taxpayer money to finance schools owned by risk capitalists who invest to make profits? At the beginning, it was decided that the state should subsidize 85% of the overall costs for the free schools. When the social democrats got the government power back after the 1994 elections, they increased the subsidy to 100%. Until 2016, there were only two countries in the world that allowed public money to support profit-­ driven schools: Sweden and Chile. When Chile in 2016 abolished that opportunity, Sweden became the only country. In, for instance, Denmark, Norway, Holland, and England, countries that all have free schools, profits are either forbidden or carefully regulated. Today, about 20% of the school children in Sweden are enrolled in free schools (25% of the pupils in secondary schools, 20% of those in preschools, and 15% of those in primary schools). A few big concerns dominate the private sector. The biggest is AcadeMedia that has 369 preschools and primary and secondary schools, and it had in 2016 a profit (after tax) of 416 million SEK (LO 2018). It is the question of profit making that is the most problematic issue. It has been a scandal when it has been discovered that some of these corporations send money to tax havens such Panama, Jersey, or the Virgin Islands. It is of course difficult for taxpayers to swallow that their taxes are used like this. An Unexpected Inspirer When the Free School Reform came in 1992, the idea was that each school student would get a “school voucher” (skolpeng in Swedish), which the student could use in any school, public or private. The idea of a “school voucher” comes from Milton Friedman, Nobel Laureate (1976), advisor to General Pinochet’s Chilean dictatorship. Friedman considered deregulations, privatizations, and competition as a universal medicine against the “syndrome of an overregulated society.” With an eye on the situation in the United States, he wanted to give the power to the “clients,” that is, the parents and the pupils. In the book Free to Choose (1980), he advocates a system where the parents to a great degree finance the education of their children themselves, but as a transitory solution he proposes a “free school choice with a vouchers”: a tax-financed voucher system where the “client” can choose between private and public schools. The composition of the school industry, as he called it, should be decided in free competition. Or as he said, “The only schools that would survive would be those that satisfy the clients – in the same way that only bars, and restaurants that satisfy their clients will survive” (quoted in LO 2018). The  OECD was already in 1992 critical and very much concerned about the Bildt government’s “freedom  of choice” in education, warning about the increased segregation and inequality  that would follow  (OECD 1992). In a review of educational policy in

3  Social Democracy and the Fate of the Swedish Model

83

Sweden,  the  reviewers  started with recalling that “Sweden is notable among the world’s industrialized  countries having achieved a high degree of quality and ­equality in compulsory schooling (and that) the success of the Swedish educational system was achieved largely through strong national planning and control”. The reviewers were therefore surprised and concerned that “the new government has brought with it a set of declared policy objectives and a new political discourse which, at least to the outsider, seem to represent a reversal of some of the fundamental precepts which have guided the development of Swedish education” The OECD reviewers pointed out that “there is considerable  international experience with school choice that Sweden could use to inform its own policies”. The Bildt goverment ignored the recommendations of OECD to use caution, saying that “the Swedish people would not allow such disparities to occur, but did not explicitly say what policies they would pursue to reduce these inequalities”. It could be added that the OECD as late as in December 2019 continued expressing its concern about the alarming segregation and inequalities in the Swedish school system (Dagens Nyheter, 3 December 2019).

Retrenchment of Entitlements The payments to social security have become a cash cow for the treasury since the budget cleanup policies in the 1990s, at the same time as the social entitlements are being hollowed out. Håkan Svärdman,57 a social security specialist, says that it is a myth that there is not a sufficient money flow to the state treasury to maintain previous levels of benefits. As an example, he mentions that the health insurance only covers 80% of the wage and about half of the wage earners receive a pension that just reaches 40–50% of the final wage. It all started with the bourgeois government that, during the economic crisis at the beginning of the 1990s, used excess inflows of social insurance payments to the treasury for other purposes, primarily paying down on the public debt. By lowering the levels of entitlements while leaving the social insurance fees intact, the government could make sure that excess inflows to the treasury continued. The employer’s contribution (31%) is by law destined for unemployment benefit schemes and income pensions. Other benefits, such as child allowance, housing allowance, and handicap assistance, are covered by personal taxes. Svärdman claims that the Social Security Law has been abused purposely by the governments, both the bourgeois governments (1990–1994 and 2006–2014) and the SAP-led governments (1994–2006 and 2014–2018).

 Håkan Svärdman: Urholkningen av. socialförsäkringen försämrar jämlikheten (Dagens Arena 17/1/2017). http://www.dagensarena.se/opinion/urholkade-socialforsakringar-forsamrar-jamlikheten/ 57

84

C. Brundenius

The Stop Law In 2006, the SAP government proposed a stop law that was later on adopted by the Parliament with the help of the Green Party and the Left Party. The law implied an imperative that all regional hospitals be run by the public sector (in this case the Regional Councils, Landstingen). In the case that a region offers private entrepreneurs to take over the administration of other hospitals in the region, then the enterprise in question is not allowed to be profit driven (since its basic financing is public), nor will it be allowed to accept privately insured clients (see further below). In September that same year, the SAP government lost the elections to the opposition, now calling themselves “The Alliance,” formed by the four bourgeois ­parties.58 One of the first decisions by the new ruling opposition was to rescind the “stop law.”59 After winning the elections in 2014, the SAP government, under Prime Minister Stefan Löfvén, tried to reintroduce the stop law (in 2017), but it was rejected by the bourgeois “Alliance”—with the support by the new extreme right wing party— Sverige Demokraterna (The Sweden Democrats), SD.

The Freedom of Choice Law “Freedom of choice” in the welfare sector was one of the Bildt government’s foremost priorities as means to dismantle the social democratic brand of universal and comprehensive welfare. It was only in 2008 that it became a law,60 but the practice of selling off public property by communes and regional councils had started already during the Bildt government. And it continued during the social democratic government (1994–2006) without the government being able to stop what was now happening on a big scale. As an example, when in August 2001 the bourgeois majority at the Regional Council of Stockholm decided to sell the a big and well-known specialized hospital (Sankt Erik), the government could not stop it, in spite of a tacit promise (a stop law or a stop promise) from the bourgeois parties that big emergency hospitals should not be driven with profit motives.61 The regional council responded that there was no such thing like a “stop promise.” Although the most important reason for privatization originally was ideological, it became increasingly also a very practical way  The Conservative now called themselves “The New Moderates,” also referring to the party as “the new labor party” (sic), with Fredrik Reinfeldt as leader and Prime Minister. 59  In 2014, SAP formed a new government with the Green Party (supported by the Left Party). In 2017, the government suggested that the stop law be reinstated. It did not pass because of the votes of the bourgeois opposition and (new in the Riksdag) the right wing SD (Sweden Democrats). 60  https://www.riksdagen.se/sv/dokument-lagar/dokument/svensk-forfattningssamling/ lag-2008962-om-valfrihetssystem_sfs-2008-962 61  Aftonbladet August 14, 2001. 58

3  Social Democracy and the Fate of the Swedish Model

85

for bourgeois-led communes to get cash, and in that way they could promise tax reductions to the voters. Public property had become cash cows! But how could this happen in social democratic Sweden, and why would a stop law be necessary to stop the ongoing onslaught? One explanation is that, when in 1982 a new health law was passed in Sweden, there was not considered to be a need for a specific law that would forbid profit-making business interests in the health sector (although such laws existed in Canada, the Netherlands, and New Zealand). Bourgeois communes and regional councils continued to sell off public property to private investors until the SAP government in 2006 managed to pass a stop law in the Parliament with the support of the Left Party and the Green Party. One wonders why it would be necessary to have a law to stop the privatization frenzy and the ­possibility by bourgeois majorities selling off public property. The reason for not including such a clause in 1982 was as simple as obvious: It was self-evident that health services in Sweden were universal, public, and financed by the tax system. Nobody could in 1982 imagine that bourgeois majority-led communes 10  years later would use public sector property as business projects.62

A New Pension System The pension system is at the core of the welfare system. The old ATP system was a benefit- and distribution-based system, with ongoing, continuous financing, whereby the economically active generation paid the pensions for today’s  pensioners. In exchange, they could expect tomorrow’s economically active to pay for their pensions. In contrast, today’s system is a mixture of a distribution system and a funding system, which means that a certain sum is funded for the future pension of the individual. General public-funded pension systems shall not create, nor lead to, inequality. But the new pension system from 1994 does exactly that, according to an analytical report (Lindberg 2017). The new pension system does not live up to its promises to “deliver good pensions within the framework of financial stability.” On the contrary, the new pension system will lead to: –– Low pensions, insufficient to live on. Many older people will become dependent on social assistance. –– A redistribution of the pension funds from people that have had a working life income, e.g., working part-time,63 those that have been sick for long periods, and also immigrants who have not been working sufficient time in Sweden to get a reasonable pension after retirement.  In 2014, SAP formed a new government with the Green Party (supported by the Left Party). In 2017, the government suggested that the stop law be reinstated. It did not pass because of the votes of the bourgeois opposition and (new in the Riksdag) the right wing SD (Sweden Democrats). 63  In Sweden of today, it is increasingly difficult to get full-time contracts, especially for women. 62

86

C. Brundenius

The lion’s share of the fund money will go to the winners in the system: the highly educated (who as a rule have decent incomes during a working life), of which many will be willing to stay on the labor market after 65. As Daniel Suhonen from Katalys64 (a social democratic think tank) says: “People need stable, predictable socially sustainable pensions.”

From Housing as an Entitlement to Housing as a Market Trying to maintain a social and just housing policy, like the intentions in the 1930s: “good quality, low price accommodation, subsidizing old age pensioners and low and middle income families with many children” must be a challenge for any socially conscious government. In Sweden,  housing construction has traditionally been a social commitment since the 1930s. Decent accommodation has been considered an entitlement, a basic human need. Rent control has been imposed to guarantee reasonable rents for the tenants. “The approach of the Swedish social democrats was almost exclusively to build apartments  – again with a strong bias in favor of cooperatives” (Esping-­ Andersen 1985, p. 188). But trade unions were also supportive to members to build their own (as a rule rather modest) houses. After the war, lots of new dwellings were needed because of immigration (the guest workers) and also because of an increasing migration from the rural to the urban areas.65 The “million program” was considered a great success as discussed earlier.  However, there were also critical voices already then. Esping-Andersen, the renowned specialist on welfare systems, says that “however efficient or egalitarian, (and) however much (Swedish) authorities tried to emphasize local self-­management and community development—the mushrooming satellite developments have been bitterly criticized for their monotonous and bland design, the cultural and social sterility and anonymity that they instill, and the high incidence of alienation and that they promote” (Esping-Andersen op. cit.). On the positive side—for the tenants—one could say that rents remained low (below market value) in many cases, thanks to the rent control that had been in place since the war. One of the repeated targets of the bourgeois parties has been the rent control, and they have always insisted on the need to introduce “market prices”—in new production as well as older houses. A problem with rent control was (and still is) that some apartments were (and still are) more attractive than others, especially in metropolitan areas. In the 1960s, the social democrats tried to compensate this through a generous—but b­ ureaucratic—

 Katalys produced during 2017–2019 a series of reports that were critically constructive of the dismantling of the Swedish welfare system as we have known it. 65  The urban population grew from 38% to 73% of the total, between 1931 and 1969, in less than  40 years. 64

3  Social Democracy and the Fate of the Swedish Model

87

system of rental allowance, probably the largest and most generous residence allowance in the world at that time. Especially families with children were the big winners. By 1970, most seniors (over 65) and 50% of all the renters were receiving residence allowance. But tides change. As a result of the deregulation of loaning criteria for private banks in 1985, it became possible for tenants in housing cooperatives to convert their tenancy to ownership: and—puff—they were apartment owners and winners (often with a nice investment capital set aside). The situation today is that the Swedish housing market offers on the one hand very attractive accommodation, where you can choose after your wishes, and on the other hand another reality for many people that month after month have to look for a place to spend the night (Listerborn 2018). There is no general lack of accommodation in Sweden, just an unequal market, where low-income groups (especially young people) are locked out from the market. Until the beginning of the 1980s, the most common accommodation type was as a tenant in a privately or socially owned real estate. In the 1980s, tenants were increasingly offered to buy their apartments, and this trend has increased continuously since. Those who could afford were the lucky ones. This created the situation we have still today. Increasing Income and Wealth Concentration Income inequality has increased in Sweden since the 1980s. There can be no doubt that this is primarily an effect of market liberalization and not least the deregulation of the housing market. It is estimated that the five richest families in Sweden in 1963 owned a wealth that corresponded to 1.2% of the GDP in that year. In 2016, the five largest billionaires had an accumulated wealth that amounted to 23.2% of GDP (Therborn 2018, p. 98). Sweden was once probably the most equal country in the world, when it comes to income differences (Piketty 2014). That is unfortunately no longer the case. Income differences are often measured with the so-called Gini coefficient.66 The Gini coefficient is estimated to have been 0.37 in 1951, and 30 years later it had dropped to 0.20. The Gini coefficient (disposable income67) was around 0.22 in the 1970s until the 1980s. But after 1990 something happened. As late as in 1995, the Gini was almost as low as in 1978. But by the end of the 1990s, there was a dramatic change. As shown in Table 3.5, Sweden has become a country with growing income differences. This in contrast with the situation some 50 years ago when Sweden was known as a country of growth with equity. There are different ways of measuring a country’s income equality/inequality. Although the most frequent indicator is the  The Gini has a scale from 0 to 1; the lower the coefficient, the more equality.  Disposable income is factor incomes (wage and capital income) minus taxes plus transfer payments (cash social security benefits). 66 67

88

C. Brundenius

Table 3.5  Income distribution in Sweden, 1975–2016 (selected years) Year 1975 1980 1985 1990 1995 2001 2005 2010 2013 2016

Gini 0.22 0.20 0.21 0.24 0.24 0.28 0.30 0.32 0.32 0.32

Disposable income Top 10% Top 5% 18.3 – 17.5 – 18.5 – 20.2 – 20.4 11.8 23.5 14.6 24.5 15.6 25.6 16.3 26.1 16.6 – 18.9

Top 1% 2.8 2.6 3.3 4.7 4.0 6.1 6.9 7.1 7.2 9.0

Gini 0.42 0.42 0.44 0.46 0.51 0.52 0.53 0.51 0.52 0.52

Factor income Top 10% Top 5% 25.9 – 25.4 – 26.7 – 28.8 – 30.7 18.4 32.8 21.0 34.1 22.0 34.5 22.3 35.0 22.4 – 24.6

Top 1% 4.7 4.3 5.1 7.2 6.4 8.8 9.8 10.1 10.2 11.8

Source: Author, based on SCB

Gini index, one could also, for instance, compare the shares of different segments of ­individuals or households. When comparing countries, it is important to use the same definitions, for instance, pre- or post-tax incomes and pre- or post-social transfer payments (such as sick leave compensation and child and housing allowance). The Gini usually refers to disposable income, which means income after taxes (both with respect to wage/salary and capital income) plus net social transfer payments. This could be then compared with factor income that is the income from wage/­ salary plus income from capital, before taxes (Table 3.5 and Annex Table 3.14). A disadvantage with Gini is that it summarizes “inequality” in one variable, but this does not reveal the existence of poverty pockets nor the spread of income between higher and lower income segments. This can be done by data showing the income share of income percentage groups, or decile groups, the 10% richest, the 1% richest, and so on (Table 3.5). The top income groups have been increasing their shares of total income since the beginning of the 1990s. This is not surprising, after the systemic change that has been going since the bourgeois opposition parties took over (1991–1994 and 2006–2014), but it should be noted that the income gaps continued during the social democratic interregnum (1994–2006). If it had not been for sizable transfer payments, the income distribution in Sweden would be very skewed today. True enough, the income distribution in other Nordic countries has also increased after 1990, and the same goes for the rest of the OECD and in particular for the United States. The Nordic countries have today Ginis (disposable income) that vary between 0.28 and 0.32. But it is in Sweden that it has increased most since 1980. In 2017, SCB (The Statistical Central Bureau) announced that capital income68 was increasing drastically in Sweden and that “this is the most important reason for  Capital income consists of interests and dividends and capital gains (buying and selling property and other assets). 68

3  Social Democracy and the Fate of the Swedish Model

89

Table 3.6  Factor income from labor and capital, 1991–2016, billion. SEK (constant 2016 prices)

1991 1995 2000 2001 2005 2010 2016

Total factor income 986 899 1306 1245 1370 1565 2032

Wage and salariesa 885 834 1099 1136 1214 1371 1664

Total capital income 101 65 206 109 156 194 368

Interest and dividends 56 51 57 49 49 79 168

Capital gains 45 14 149 60 107 115 200

Source: Author, based on SCB (Statistikbasen.scb.se) a Including salaries in sole proprietor firms

the increasing income differences since 1995” (SCB 2017). Capital income as ­percent of total disposable income increased from 3% in 1995 to 15% in 2015. It is especially among those with high disposable income that capital incomes have increased. There are two types of reasons for this: One reason is the deregulation of bank loans to private households, making it easier to indebt yourself, but if you belong to the lucky ones, also enrich yourself, for instance, by buying the flat you earlier rented. Another reason is that capital income is taxed lower than wage income. Over 85% of the capital incomes were accrued to the top percent. Table 3.6 shows clearly the increasing importance of capital incomes. Total capital income increased almost by 400% (in constant prices!) between 1991 and 2016. As shares of total factor income, it increased from 10.2% in 1991 to 18.1% in 2016, almost a doubling in 25 years. It is in particular capital gains that are increasing, thanks to the beginning of the financialization of the Swedish economy after the deregulation of the banks in 1985 (Belfrage and Kallifatides 2017). One of the responsible for the financial deregulation expressed his surprise about this development in 2015: “Not in our wildest phantasy could we imagine in 1985 that the financial deregulation would open up such a strong expansion of the financial system that followed… we missed entirely the financialization of the Swedish economy that we since have experienced for the last 30 years, and this seems to continue for a foreseeable future” (quoted in Therborn 2018, p.  52, CB translation). Talk about responsibility! The reason is that in the financialization of the housing sector, housing is treated just like any type of commodity, as a means of accumulating wealth. Financialization has at the same time made Swedes the most indebted people next to the Japanese, according to Therborn. The documentary “Push”, by Swedish film maker Fredrik Gertten (2019) describes how gentrification has become a global phenomenon. How ghetto type urban districts begin to attract a newly rich upper middle class (with lots of money to spend). They buy whole blocks of apartment and they begin by renovating the houses and apartment buildings. This sounds good - the problem is that very few people can afford to live in them - and especially not the former ten-

90

C. Brundenius

ants, who are “pushed away”. Often it is big international so-called private equity capital firms, such as Blackstone (based in New York) that are behind this financialization of the housing sector. In the housing market rents are supposed to go down, if demand is declining. But not when it comes to renovated houses. The owner, for instance Blackstone, can wait to sell, since their apartments are investments, just like paintings and antiquities. The situation in Swedish towns such as Stockholm, Uppsala and Malmö is absurd but the same is the case in Copenhagen, New York, Berlin, Lisbon and Seoul, says Fredrik Gertten. Blackstone’s motto is: “Buy, Fix, Sell.” But the buyers are not the former tenants, but speculators looking for profitable investment opportunities. The empty luxury apartments  are becoming like museums.

Privatization and the Reduction of the Public Sector One of the most important objectives of the two bourgeois governments that have ruled after 1991 (1991–1994 and 2006–2014) has been to reduce the public sector. The first attack was on state-owned companies (SOEs) already in 1991. In 1986, there were 140 SOEs in Sweden. By the end of the first bourgeois government, 78 had been sold. Of these, 40 % belonged to the financial and real estate sector, 20  % were manufacturing companies, and 21% were the privatization of Swedish Telecom (Allelin et al. 2018b). But the privatization of SOEs is not the big problem. It is the sell-off of hospitals and health centers as will be discussed here.  Much has been written about a huge oversized public sector in Sweden and also about the high tax ceiling. Looking at statistics, this picture seems a bit exaggerated (Table 3.7 and Annex Tables 3.14 and 3.15). The sector expenditure doubled between 1960 and 1980, while total taxes grew from 28% to 44% of GDP. Sector spending peaked in 1990 with 66% of GDP and the same for taxes that peaked with 50%. Since 1990, both public expenditures and taxes have fallen as % of GDP and now stand at 49% and 44%, respectively. Table 3.7  Public sector expenditures and taxes 1960–2017 (percentage shares of GDP) Year 1960 1970 1980 1990 2000 2006 2010 2014 2017

Public sector expenditure 30 43 60 66 55 53 50 50 49

Source: Author, based on SCB

Taxes and fees 28 40 44 50 49 46 43 43 44

91

3  Social Democracy and the Fate of the Swedish Model Table 3.8  Public and private sector employment: 1977–2018 (selected years) Year 1977 1986 1991 2000 2010 2018

Total (000) 3731 3851 3992 3738 3973 4574

Percent of total State Communes 11.2 25.4 10.4 31.9 9.7 31.4 5.9 28.6 6.1 26.6 6.7 26.1

Total public 36.6 42.3 41.1 34.5 32.7 32.8

Private 63.4 57.7 58.9 65.5 67.3 67.2

Source: Author, based on SCB

If we look at public sector employment (Table 3.8), we find that it peaked in 1986 with 42% of total employment. It has then gradually gone down to 33%, or one-­ third of the labor force, in 2018. It is primarily due to the big reduction in the state sector, but also communal employment has decreased from 32% to 26% (see also Annex Table 3.13).

The Transformation of the Health Sector Jens Lapidus has done a thorough study of the systemic change in the Swedish health sector. He says that what is happening to the welfare system in Sweden is that there is a tacit transition from the traditional, general, and universal welfare system (that has been a cornerstone in the  Swedish model) to a two-tier welfare system69 (Lapidus 2018). This means that there is a basic security system for all citizens, plus a new one—add-on—for those who can afford additional security through extra private insurance (which, as it turns out, also offers the possibility to get priority access). This two-tier health care system has a public tier and a hidden, discreet tier. The hidden health system is meant for those citizens that have resources to pay for “extra” add-on services. This new add-on health service system goes hand in glove with the increasing income differences. Or, as a spokesman for this new model explained: “Consumer inequality cannot be prevented” (with an increasingly skewed income distribution), and “this imbalance can only be solved by ‘topping up’ with private insurance fees and publicly financed welfare” (quoted in Ankarloo 2012, CB translation). The problem is not that there are private hospitals and health centers. The problem is that these health sector institutions (often privatized public property) are financed primarily by taxpayer money (and they are also allowed to make profits). The additional private insurance (often added as a benefit to employees in many companies) makes sure that the insurance taker gets priority to care. But you cannot use your private insurance to queue jumping at public hospitals and health centers. Therefore, in order to use your private insurance, you must have a private care provider, and thus the privatization of health care is dependent on the number of private  Two-tier health systems exist in many countries. As a matter of fact, it is rather rule than exception. 69

92

C. Brundenius

insurance takers, and vice versa. And private insurances have increased, from 218,000 in 2006 to 505,000 in 2012 and 658,000 in 2018 (Lapidus 2018).  The private care providers are of course not allowed to discriminate those that just have general insurance, prioritizing those that have private insurance. But that is exactly what is happening, according to Lapidus. He has interviewed both private health care providers and insurance companies. The latter admit that their possibilities to expand are dependent on the expansion of private health care in Sweden (financed by the public tax system). A CEO for a private hospital confirms that “If you squeeze in an extra patient per hour, that is when you start making money. You prepare your budget with the public funded health care, and then the insurance patients come as a bonus” (Lapidus, p. 37, CB translation). Welfare has become a shopping mall where the citizen is a consumer of welfare (as much as her/his wallet allows). This is far from the social democratic idea of an inclusive health care system, where services would be gradually expanded to all, not just those that have the money. As Gustav Möller said once, “Only the best is good enough for the people.” But that was a long time ago…. A New Labor Market The most problematic—and cumbersome—change in the Swedish model is what has happened to the labor market. As recalled, the three pillars in the Postwar Program were full employment, fair income distribution, and greater efficiency with economic democracy. The last attempt with deeper economic democracy ended in failure with the wage earner funds. Income differences have increased since the 1980s, and the celebrated Rehn-Meidner model was buried already in the 1980s, when inflationary pressure made it impossible in the long run to maintain both low inflation and unemployment. Unemployment levels increased dramatically between 1991 and 2014 (see Annex Tables 3.11 and 3.12). After 2015, the problem of unemployment became more acute with the massive immigration of people that were fleeing the civil war in Syria (later on also from Africa). Sweden received over 160,000 refugees in 2015 alone (compared to less than 20,000 in neighboring Denmark). It is clear that it is next to impossible for a small country like Sweden (10.5 million inhabitants) to integrate so many people in a short time (Calmfors and Sánchez Gassen 2019). Protection against unemployment, which has been so important for the Swedish welfare model, is being hollowed out. Jayeon Lindellee from Lund University has studied what has happened and how it happened (Lindellee 2018). Sweden has traditionally adhered to the so-called Ghent system, with a strong link between the trade union (where the worker belongs) and the state-run A-Kassa (Unemployment Insurance Fund). There has been a retrenchment in the usually generous Swedish unemployment insurance system. At the same time the number of members of the A-Kassa has dropped alarmingly (from 82% in 2006 to 70% in 2016). Even more worrying is that many prefer to sign a private unemployment insurance, often through their workplace. This puts in jeopardy the traditional universal character of the Swedish (Ghent) system.

3  Social Democracy and the Fate of the Swedish Model

93

Whither Swedish Social Democracy? What happened to the Swedish model? Was the original model socialist? It should be recalled that there was a vivid debate in the party in the 1930s about the essence of “socialism.” Was the welfare state just a means on the road to something called “socialism”? As recalled, both Ernst Wigforss and Gustav Möller, the two chief ideologues at the time, were both hesitant to call the welfare state as being the definition of socialism. As late as in 1970, Wigforss wrote a short essay, entitled A Socialist Sweden, where he stressed that the social democratic welfare policy has never been, and should never be, “a desire to replace socialism by the welfare state” (Wigforss 1970, reprinted in Wigforss 2018). While most academic observers (both in Sweden and abroad) tend to agree that the Swedish model, as we know it, does not exist anymore, there are those who have a dissenting opinion. Anders Lindbom published a book (aimed as a reader in political science and sociology) discussing exactly systemic change with a question mark (Lindbom 2011). The author is very critical of most of the changes in the welfare system after 1991, but surprisingly he ends up concluding that there has been “no systemic change” and even more surprisingly that “the Swedish Welfare State is still of a ‘social democratic’ character” (op. cit., p.  195). This is apparently also the opinion of the current (as of 2019) social democratic government. In 2017, the social democratic government (in power since 2014, together with the Green Party) published a short description and defense of The Swedish Model (Government 2017). It states in the introduction: “By international comparison, Sweden is a prosperous country whose wealth is evenly distributed. The Swedish model is a strategy for inclusive growth. The objective is to increase prosperity to the benefit of all, while safeguarding the autonomy and independence of citizens. The aim of this report is to describe the Swedish model as a strategy for inclusive growth.” This document is a bit surprising, looks like taken from the shelves of the 1970s. If this document came from the government during the rule of the four-party bourgeois “alliance” (2006–2014), one could interpret this as an adherence to the “Swedish model,” as an assurance by the nonsocialist alliance that a model still exists, but it is “social liberal” rather than “social democratic.” But there are also foreign observers that seem to see no major changes in the “Swedish model.” David Crouch is one of them. He wrote a tribute to what he calls Bumblebee Nation: The Hidden Story of the New Swedish Model (Crouch 2018).

How Could It End Up Like This?  In the program of the Social Democratic Party, adopted by the party congress in 2001, it is manifested that: “Social insurances and social services such as health, schools and care can never be reduced to commodities on a market, where the only function of society is to distribute tax money to the purchases (of such services) by

94

C. Brundenius

individuals”. The program has plenty of such grievances with the existing trends. But this begs the question: This program was adopted in 2001, after the SAP had been back in power for seven years (after winning the elections in 1994). Why did the new Social Democratic Prime Minister, Göran Persson, not do something to prevent it? For instance, using the Stop Law in 2006 (before it was abolished by the bourgeois “alliance” the following year)? As a matter of fact, Persson continued much of the privatizations and commodification of the public sector that had become the most important objective of the bourgeois government in 1991. So what are the reasons for this surrender of social democracy to this systemic change? There are objective and subjective reasons (to use a Marxist vocabulary), which more or less correspond to external and internal reasons. External means that Sweden has increasingly (since the game changer year 1973) become less independent, more dependent on what is happening in the rest of the world, on globalization (especially with the deregulation of financial flows) and Sweden becoming a member of the European Union (since 1995). Most important is, of course, the rise of neo-liberalism, with market fundamentalists ruling in many countries, starting in the 1980s. It may have been difficult for social democracies in Europe (especially as ruling parties) to mark resistance to Thatcherism and Reaganomics, to resist temptations to deregulate the financial sector, and to try to make the public sector more “efficient” (=competitive with the private sector). Many mean that even if external factors are important, it is undeniable that it was the SAP in government (1982–1991) that had been the driver of the deregulations in the economy in the 1980s). This prepared the ground, by sowing the seeds, for the systematic change, which started with the conservative government (1991–94), continued with the SAP government (1994–2006), and was accomplished (?) with the “bourgeois alliance” government (2006–2014). It is only with the new SAP government with Stefan Löfvén as Prime Minister (2014–) that there might be a wake up call, of what is happening to the universal welfare system. But the problem is that the SAP is a minority government (see election results in Annex Table 3.10). SAP is since the 2018 election ruling together with the small Green Party, in an unholy alliance (with conditional support) with the two liberal parties, the Liberals and the Center Party. This was done in a joint effort to prevent the extreme right (Sweden Democrats) to reach the commanding heights of governing with the traditional right, the Moderates and the Christian Democrats. It is true that SAP has collaborated with both the Liberal Party and the Center Party in the past. But then both parties were imbued with a social liberal pathos that is gone today.

The New Reformists So what can be done? Many on the left would say that the big problem today is the absence of an ideology motivated and inspired (and inspiring) leader. Or, as Rudolf Meidner said in 1993 (op.cit.), “Swedish socialists have abandoned the issue of

3  Social Democracy and the Fate of the Swedish Model

95

ownership as the essence of socialism”. In 2013 the SAP Congress adopted a new party program: A Program for Change. The program (SAP 2013) is surprisingly general, with vague goals, and above all with no policy directions. No criticism or even much concern about the dismantling of the universal welfare system by the bourgeois government in power. Göran Greider invokes the spirit of Olof Palme (Greider 2011). He points at the symbiosis between him, as the leader of the party, and the social democratic movement. They gave life to each other - without, a vibrant movement, no imagination, no visions. For Palme, democratic socialism was not just a phrase to use at ceremonies but a benchmark for the great transformation (to paraphrase Polanyi). There is a growing discontent within the SAP about its current orientation (without ideological compass). Olle Svenning, a well-known journalist, claims that Swedish Social Democracy has lost its worker base, and has instead become the party of the radical middle class, and that “it is in the gentrified metropolitan areas that the left (including the Left Party) dominates.” The support from the working class is being eroded, a working class that is increasingly being attracted by the rhetoric of rightist populism. Thomas Piketty makes similar arguments and analysis in his latest book (Piketty 2019). This explains to a large extent the recent success of the Sweden Democrats in the 2018 parliamentary elections (see results in Annex Table 10). Worried about the development, especially the decline of SAP in the elections and the rise of the extreme populist right, the left wing group of SAP, The Reformists, in March 2019 launched an manifesto and at the same time a reform proposal in seven points, which would also help to win back the traditional Social Democrats. The Reform Proposal: (1) New Economic Policy: A reformed economic -political framework for Full Employment, Public Investments, and a Strengthened Welfare State; (2) New Fiscal Policy: A tax reform for increased equality and expanded public sector; (3) New Pension System: higher pensions and strengthened security for senior citizens with low pensions; (4) New Social Housing Policy: State responsibility for decent and affordable dwellings for all; (5) Democratized Working Life: Shorter working week and strengthened economic life for wage earners; (6) New Welfare and Regional Policies: Levelling of living conditions and universal public welfare all over the country; (7) New Green Reforms: State-driven climate change policy and green industrial development. If such a reform program could attract and mobilize people (especially the young generation) around socialist values, such as full employment, social justice, and solidarity, then there is still hope for change!

96

C. Brundenius

Annex Tables Table 3.9  Results in the parliamentary elections, 1928–1979 (% shares of total votesa) Year 1928 1932 1936 1940 1944 1948 1952 1956 1960 1964 1968 1970 1973 1976 1979

Votes as % of electorate 67.4 67.6 74.5 70.3 71.9 82.7 79.1 79.8 85.9 83.9 89.3 88.3 90.8 91.8 90.7

SAP 37.0 41.7 45.9 53.8 46.7 46.1 46.1 44.6 47.8 47.3 50.1 45.3 43.6 42.7 43.2

SAP + SKP/VPK 37.0 50.0 53.6 58.0 57.0 52.4 50.4 49.6 52.3 52.5 53.0 50.1 48.9 47.5 48.8

Center-right opposition 56.5 (won) 49.3 44.8 42.0 42.4 47.5 49.5 50.3 47.6 43.9 42.9 47.6 48.8 50.8 (won) 49.0 (won)

Source: Per T. Ohlsson, Svensk politik (2014) a Valid votes

Table 3.10  Results in the parliamentary elections, 1982–2018 (% shares of total votesa) Year 1982 1985 1988 1991 1994 1998 2002 2006 2010 2014 2018

Votes as % of electorate 91.4 89.9 86.0 86.7 86.8 81.4 80.1 82.0 84.6 85.8 87.2

SAP 45.6 44.7 43.2 37.7 45.3 36.4 39.9 35.0 30.7 31.0 28.3

MP Green Party – – 5.5 3.4 5.0 4.5 4.6 5.2 7.3 6.9 4.4

VPK/V 5.6 5.4 5.8 4.5 6.2 12.0 8.4 5.8 5.6 5.7 8.0

Center-right opposition 45.0 47.9 41.8 46.6 (won) 41.4 44.4 44.0 48.2 (won) 49.4 (won) 39.4 40.2

Extreme right – – – 6.7 1.2 – – – 5.7 12.9 17.5

Source: Per T. Ohlsson, Svensk politik (2014); updated by author with 2018 election results a Valid votes

3  Social Democracy and the Fate of the Swedish Model

97

Table 3.11  Inflation and unemployment rates compared with GDP rates, 1961–2018 (annual averages by quinquennials)

1961–1965 1966–1970 1971–1975 1976–1980 1981–1985 1986–1990 1991–1995 1996–2000 2001–2005 2006–2010 2011–2015 2016–2018

Inflation 3.4 4.1 7.4 10.5 9.0 6.2 4.2 0.5 1.5 1.6 0.7 1.6

Unemployment 1.5 1.9 2.8 2.0 3.0 1.9 6.4 6.6 5.2 7.3 7.9 6.7

GDP 5.2 4.1 2.6 1.3 1.7 2.9 0.8 3.0 2.2 1.6 2.3 2.4

GADI (GADI (Growth Adjusted Discomfort Index) is inflation rate + unemployment rate minus GDP growth rate) 1.7 1.9 7.6 11.2 10.3 5.2 9.8 4.1 4.5 5.1 6.3 5.9

Source: Author, based on SCB; Unemployment data for 1961–1970 from de Vylder (1996)

Table 3.12  Inflation and unemployment rates, 1990–2018 (selected years) Year 1975 1976 1977 1978 1979 1980 1985 1990 1991 1992 1993 1994 1995 2000 2005 2010 2015 2018

Inflation rate 9.8 10.4 11.3 10.1 7.2 13.6 7.4 10.5 9.3 2.3 4.7 2.2 2.5 1.0 0.5 1.3 0.0 2.0

Source: SCB (AKU)

Unemployment rates Both sexes 2.0 1.6 1.8 2.3 2.1 2.0 2.8 1.6 3.0 5.2 8.2 8.0 7.7 4.7 7.8 8.7 7.5 6.4

Men 1.9 1.3 1.5 2.1 1.9 1.7 2.8 1.7 3.3 6.3 9.7 9.1 8.5 5.0 7.9 8.8 7.7 6.5

Women 2.2 2.0 2.2 2.4 2.3 2.3 2.9 1.6 2.6 4.2 6.6 6.7 6.9 4.3 7.6 8.5 7.3 6.4

C. Brundenius

98

Table 3.13  Value-added shares of GDP by sector, 1932, 1976, 1987, 2015 (percent) 1932 1946 1976 1987 2015

Agriculture 20 16 6 4 2

Goods 33 36 40 33 28

Private services 40 36 35 38 50

Public services 7 12 19 25 20

Source: Author, based on SCB (https://www.scb.se/hitta-statistik/artiklar/2017/Unik-tillvaxt-narSverige-gick-fran-jordbruk-till-tjanster/) Table 3.14  Public income tax revenues and transfer expenditures, 1980–2018 (selected years) Year

1980 1986 1991 1995 2006 2010 2014 2018

Income tax revenues Billion SEK % of total public current prices revenues 99 32.1 190 31.1 280 29.6 307 29.9 546 31.3 528 30.3 597 31.2 736 32.2

Transfer expenditures Billion SEK % of total public current prices expenditures 89 26.5 163 26.6 286 29.7 327 28.1 453 29.3 497 28.5 547 27.7 609 25.9

% of GDP 15.2 15.6 17.7 17.3 14.6 14.1 13.8 12.7

Source: Author, based on SCB National Accounts Table 3.15  Tax ratios (percent of GDP)

1980 1986 1991 1995 2006 2010 2014 2018

Total taxes (current billion SEK) 255 502 802 869 1425 1521 1676 2100

Tax ratio (percent of GDP) 43.7 47.8 49.4 46.1 45.9 43.2 42.5 43.8

Of this income taxa (billion SEK) 108 216 298 355 654 640 701 884

Income tax as percent of total taxes 42.4 43.1 37.2 40.9 45.9 42.1 41.8 42.0

Income tax as percent of GDP 18.5 20.7 18.4 18.8 21.1 18.2 17.7 18.5

Includes wealth tax (the wealth tax was abolished in 2007)

a

References Adler-Karlsson G (1969) Functional socialism. A Swedish theory for democratic socialization. Prisma, Stockholm Ahlberg G, Svennilson I (1946) Sveriges arbetskraft och den industriella utvecklingen (Swedish labor force and industrial development). IUI, Stockholm

3  Social Democracy and the Fate of the Swedish Model

99

Allelin M, Kalifatides M, Sjöberg S, Skyrman V (2018a) Ägande- och förmögenhetsstrukturen och dess förändring sedan 1980 (Ownership and wealth structure and its change since 1980). Katalys Institute, Stockholm Allelin M, Kalifatides M, Sjöberg S, Skyrman V (2018b) Välfärdsmodellens omvandling: Det privata kapitalets utvidgning i den offentliga sektorn (Transformation of the welfare model: the expansion of private capital in the public sector). Katalys Institute, Stockholm Ankarloo D (2012) Välfärdsmyter. Visst har vi råd att finansiera tryggheten (Welfare Myths of course we can afford to finance social security). ETC, Stockholm Antman P (1999) Möllers andra agenda—om offentliga tjänster och socialisering. http://www.antman.se/publicerat/mollers-andra-agenda ARB (2001) Socialdemokratins program 1897 till 2001. Arbetarrörelsens arkiv och bibliotek, Stockholm ARB (1944) Arbetarrörelsens efterkrigsprogram—de 27 punkterna med motivering (1944), (The post-war program of the labor movement). Arbetarrörelsens arkiv och bibliotek, Stockholm Åsard E (1978) LO och löntagarfrågan (LO and the Wage-Earner fund question). Rabén & Sjögren, Stockholm Åsard E (1985) Kampen on löntagarfonderna (The struggle over the Wage-Earner funds). Norstedts, Stockholm Belfrage C, Kallifatides M (2017) Financialiseringen av Sverige: På väg mot nästa kris (The financialization of Sweden: heading towards the next crisis?). Katalys Institute, Stockholm Berggren C (n.d.) Socialdemokratin och efterkrigsprogrammet (Social democracy and the post-­war program). http://www.marxistarkiv.se/sverige/fk/kommunist_om_efterkrigsprogrammet.pdf Borg-kommissionen (2010) Välfärdens framtida finansiering (The financing of future welfare). http://arenaide.se/borg-kommissionen-valfardens-framtida-finansiering/ Calmfors L, Sánchez Gassen NE (eds) (2019) Integrating immigrants into the Nordic labour markets. Nordic Council of Ministers, Copenhagen. http://norden.diva-portal.org/smash/get/ diva2:1317928/FULLTEXT01.pdf Childs MW (1936) Sweden: the middle way. Faber & Faber Ltd, London Crouch D (2018) Bumblebee nation: the hidden story of the New Swedish model. Karl-Adam Bonniers Stiftelse, Stockholm Dagens Nyheter (2019) “OECD: I Sverige betraktas lärarna som servicepersonal” (OECD: In Sweden the teachers are regarded as service personnel). Dagens Nyheter, Stockholm (3 December 2019) de Vylder S (1996) The Rise and Fall of the “Swedish Model”, UNDP: Human Development Report Occasional Papers 1996-04 Ekdahl L (2002) Löntagarfonderna—en missad möjlighet? (The Wage earner funds—a lost opportunity?). Samtidshistoriska institutet, Söertörns Högskola, Huddinge Elmbrant B (2019) Marknadens tyranni (The Tyranny of the market). Leopard Förlag, Stockholm Elmbrant B (1993) Så föll den svenska modellen (The fall of the Swedish model). T. Fischer & Co, Stockholm Elmér Å (1975) Från fattigsverige till välfärdsstaten (From poverty Sweden to the welfare state). Aldus, Stockholm Esping-Andersen G (1985) Politics against markets—the social democratic road to power. Princeton University Press, Princeton Esping-Andersen G (1990) The three worlds of welfare capitalism. Princeton University Press, Princeton Esping-Andersen G (1994) After the golden age: the future of the welfare state in the new global order. UNRISD, Geneva Esping-Andersen G (2009) The incomplete revolution. Adapting to women’s new roles. Polity Press, Malden Feldt K-O (1991) Alla dessa dagar i regeringen 1982–1990. Norstedts, Stockholm Feldt K-O (1994) Rädda välfärdsstaten! Norstedts, Stockholm Feldt K-O (2012) En kritisk betraktelse om socialdemokratins seger och kris. Albert Bonniers förlag, Stockholm

100

C. Brundenius

Forslund A (1997) The Swedish model: past, present and future. In: Giersch H (ed) Reforming the welfare state. Springer, New York Galbraith JK (1987) Economics in perspective. Houghton Mifflin Company, Boston George DAR (1992) The political economy of Wage-Earner finds: policy debate and Swedish experience. Queen’s University, Department of Economics, Kingston (Canada): Working paper No. 839 Gertten F (2019) “Push. Landlords without faces, apartments without tenants”. A documentary exploring the new unlivable city. https://www.wgfilm.com Government Bill 1983/84:50. https://data.riksdagen.se/fil/CE1965E4-9D0A-4BB1-B1FB93BD7AA365CD Government of Sweden (2017) The Swedish model. Ministry of Finance, Stockholm. https://www. government.se/information-material/2017/06/the-swedish-model/ Greider G (2018) Liten bergspredikan för socialister (Little Sermon on the Mount for Socialists). Ordfront, Stockholm Greider G, Linderborg Å (2018) Populistiska manifestet (The populist manifesto). Natur och Kultur, Stockholm  Greider G (2011) Ingen kommer undan Olof Palme (Nobody can get round Olof Palme). Ordfront Förlag, Stockholm Hansson G (2018) Reformism och Utopism. Wigforss, efterkrigstid och socialdemokratins framtid (Reformism and Utopism. Wigforss, post-war time and the future of social democracy). Arkiv Förlag, Lund Hägg G (2005) Välfärdsåren (The welfare years). Månpocket, Stockholm Jacobsson U (2004) Rehn-Meidner modellen in memoriam. Ekonomisk Debatt No.5 Johnson A (2016) Liberala misstag och svek som vi minns (Liberal mistakes and deceits that remember). Liberal Debatt, 28 March 2016). http://www.liberaldebatt.se/2016/03/ liberala-misstag-och-svek-vi-minns/ Kallifatides M, Belfrage C (2017) Finansialiseringen av Sverige. Stockholm: Katalys No. 38 Karlsson R, Wentus P-E (2013) Löntagarfonder—rörelse kontra politik. http://arkiv.rodarummet. org/2013/08/24/lontagarfonder-rorelse-kontra-politik/ Keynes JM (1936) General theory of employment, interest and money. Macmillan, London Klockare S (1967) Den svenska revolutionen 1917–18 (The Swedish revolution). Prisma, Stockholm. Korpi, Walter? Krugman P (2006) Introduction to the general theory of employment, interest, and money, edition 2006. http://www.pkarchive.org/economy/GeneralTheoryKeynesIntro.html Lapidus J (2018) Vårdstölden—hur den privata välfärden tar från det gemensamma (The health care theft—how private welfare steals from the common good). Leopard, Stockholm Larsmo O (2002) En näve från svensk revolution (A fist from a Swedish revolution), Dagens Nyheter, 5 May 2002 Lewin L (2017) Ideologi och strategi (Ideology and strategy). Carlssons, Stockholm Lewin L (1967) Planhushållningsdebatten (The planning debate). Almqvist & Wiksells, Stockholm Lindberg E (2017) Pensionssveket- En rapport om ett ohållbart pensionssystem (The retirement betrayal). Stockholm: Katalys, Nr. 36 Lindbom A (2011) Systemskifte? Den nya svenska välfärdspolitiken (Systemic change? The new Swedish welfare policy). Studentlitteratur, Lund Lindellee J (2018) Beyond retrenchment. Multi-pillarization of Swedish unemployment benefit provision. PhD dissertation, Lund University Linderborg Å (2001) Socialdemokraterna skriver historia: Historieskrivning som ideologisk maktresurs (The social democrats make history- historiography as an ideological resource of power, 1892–2000. PhD dissertation, Stockholm: Atlas Lindgren-Åsbrink M (2019) Kanslihushögern- Frälsare eller dödgrävare (The Government Right Wing -Savior or Gravedigger?). Tiden, Stockholm Listerborn C (2018) Bostadsojämlikhet (Housing inequality). Premiss, Malmö LO (1975) Fackföreningsrörelsen (The LO journal), Number 1975:21

3  Social Democracy and the Fate of the Swedish Model

101

LO (2018) Skolindustrin. Hur mångfald blev enfald (The School Industry. How Diversity Became Folly). http://www.lo.se/home/lo/res.nsf/vRes/lo_fakta_1366027478784_skolindustrin_pdf/ $File/Skolindustrin.pdf Lundh C (1987) Den svenska debatten om industriell demokrati 1919–1924 (The Swedish debate on industrial democracy, 1919–1924). PhD dissertation, Lund: Arkiv Lundberg E (1985) The rise and fall of the Swedish model. J Econ Lit 23(1):1–36 Meidner R (2005) Spelet om löntagarfonderna (The game about the Wage Earner funds). Atlas, Stockholm Meidner R (1998) The rise and fall of the Swedish model. Challenge 41(1):69–90 Meidner R (1993) Why did the Swedish model fail? The Socialist Register Meidner R (1981) Collective asset formation through wage earner funds. Int Labour Rev 120(3):303. May-June 1981 Myrdal G (1961) Planhushållning i välfärdsstaten (Planning in the welfare state). Tiden, Stockholm. Also published as Beyond the Welfare State, Yale University Press 1963 Myrdal Alva and Gunnar (1934) Kris i befolkningsfrågan (Crisis in the population question), Stockholm Nordic Council of Ministers (2019) Lars Calmfors. http://norden.diva-portal.org/smash/get/ diva2:1317928/FULLTEXT01.pdf OECD (1992) Review of Education Policy in Sweden: Examiners Report and Questions Offer A (2016) The market turn: from social democracy to market liberalisation: https://www. economics.ox.ac.uk/materials/papers/14929/149decemberoffer.pdf Ohlsson PT (2014) Svensk Politik (Swedish politics). Historiska Media, Lund Olsson U (1991) Planning in the Swedish welfare state, studies in political economy, No 34, Spring 1991 Pelling L (2019 The Swedish face of inequality. https://www.socialeurope.eu/the-swedishface-of-inequality Pérez C (2002) Technological revolutions and financial capital. The dynamics of bubbles and golden ages. Edward Elgar, Cheltenham Piketty T (2014) Capital in the Twenty-First Century. Harvard University Press, Cambridge Piketty T (2019) Capital and Ideology. Harvard University Press, Cambridge Pontusson J, Kuruvilla S (1992) Swedish Wage-Earner funds: an experiment in economic democracy. Ind Labor Relat Rev 45(4):779–791. (July 1992, Cornell University) Pontusson J (1992) The limits of social democracy: investment politics in Sweden. Cornell University Press, New York Ross A (1952) Why democracy? Harvard University Press, Cambridge Schön L (2012) An economic history of modern Sweden. Routledge, London Sjöberg S (2003) Löntagarfondsfrågan—en hegemonisk vändpunkt (The Wage Earner fund question: a hegemonic turning point). PhD dissertation, Uppsala: Uppsala University Sjögren G, Wadensjö E (2012) Income distribution among those of 65 years and older in Sweden. IZA, Bonn. http://ftp.iza.org/dp6745.pdf SCB (1969) Historical statistics for Sweden. Population 1720–1967. Statistiska Centralbyrån, Stockholm SCB (2017) Kapitalinkomster ger ökade inkomstskillnader. https://www.scb.se/hitta-statistik/statistik-efter-amne/hushallens-ekonomi/inkomster-och-inkomstfordelning/inkomster-och-skatter/ pong/statistiknyhet/slutliga-inkomster-och-skatter-2015/ SNS (2011) Välfärdsrapport 2011. Inkomstfördelningen i Sverige. SNS, Stockholm. https:// wwwsnsse.cdn.triggerfish.cloud/uploads/2016/08/vr-2011_inlaga_0.pdf SOU (2016) Ordning och reda i välfärden (Order and remedy in the welfare) Number 2016:78 Spross L (2017) A dilemma for the welfare state: managing the costs for shorter working hours. PhD Dissertation, Labor History, 58(1):26–43 Stephens EH (1980) The politics of workers’ participation. Academic Press, New York Stöber N, Suhonen D, Therborn G (2018) Klass, identitet och politisk mobilisering (Class, identity and political mobilization). Stockholm: Katalys No. 40 Sunkara B (2019) The Socialist Manifesto, Basic Books, New York

102

C. Brundenius

Svärdman H (2017) Urholkningen av socialförsäkringen försämrar jämlikheten (The erosion of social security deteriorates equality). http://www.dagensarena.se/opinion/ urholkade-socialforsakringar-forsamrar-jamlikheten/ Therborn G (2018) Kapitalet, överheten and alla vi andra (The capital, the rulers and all the rest of us). Arkiv, Lund Therborn G (1966) En ny vänster (A new left). Prisma, Stockholm Therborn G (1986) The working class and the welfare state. A historical-analytical overview and a Little Swedish Monograph. https://core.ac.uk/download/pdf/14903688.pdf Timothy A.  Tilton, (1979) A Swedish Road to Socialism: Ernst Wigforss and the Ideological Foundations of Swedish Social Democracy. American Political Science Review 73 (2):505-520 Tingsten H (1941) Den svenska socialdemokratins idéutveckling (The development of Swedish social democratic ideology) (I and II). Tidens Förlag, Stockholm  Viktorov I (2006) Fordismens kris och löntagarfonder i Sverige (The Crisis of Fordism and Wage Earner Funds in Sweden). PhD dissertation, Stockholm: Stockholm University Whyman P (2006) Post-Keynesianism, socialisation of investment and Swedish wage-earner funds. Camb J Econ 30(1):49–68 Wigforss E (1952) Socialism i vår tid (Socialism in our time). Tiden, Stockholm Wigforss E (2013) Kan dödläget brytas? (Can the deadlock be unlocked?) Selected writings of Ernst Wigforss. Karneval förlag, Stockholm

Chapter 4

The Rise of Socialism in the United States: American “Exceptionalism” and the Left After 2016 Jonah Birch

A New Socialist Movement? It is a truism of contemporary politics that the 2016 presidential election upended American democracy. Yet, if Donald Trump’s unexpected victory, and the fallout from it, threw the established political order into crisis, it is not the right that now appears poised to make the greatest gains. Rather, it is the left. Since 2016, a new socialist movement has started to take shape in the USA. After decades at the margins of political life, the radical left is now growing rapidly, making startling inroads among young people and progressive Democratic voters.1 These developments, rooted in from the 2007 to 2008 financial crisis and the frustrated hopes of the  In the USA, use of the term “left” to describe one’s political orientation has always been ambiguous, due in large part to the absence of a stable, electorally viable socialist or labor-based party. Since the Great Depression, the Democratic Party has been the central vehicle for efforts to reform American society. Yet, for decades, much of its history, this party was an amalgam of disparate forces, from southern segregationists to urban patronage machines to organized labor. Following the breakup of that structure in the 1960s and 1970s, Democratic officials grew increasingly beholden to powerful corporate interests, crafting pro-business policies and turning on their trade union allies. In this context, there was little space for a classically left politics. Especially during the years of Cold War anti-communism, Democratic leaders remained resolutely opposed to any talk of “socialism.” Instead, the primary term used for those who favored measures like stronger labor protections, an expanded welfare state, or greater rights for African-Americans was “liberal.” Today, the precise meaning and boundaries of American liberalism are not settled. Yet, it is clear that the label implies both a hostility to the Republican right and an acceptance of market institutions as the building blocks of social and economic life. Thus, when I refer to the “left” in this chapter, I mean those forces which seek to go beyond the limits of mainstream liberalism by imposing significant constraints on the market. When I refer to the “far” or “radical” left, I mean a smaller number of politicians, activists, and organizations that are pursuing the political and economic transformation of American society along socialist lines. 1

J. Birch (*) Department of Sociology, Appalachian State University, Boone, NC, USA © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_4

103

104

J. Birch

Obama years, coalesced in Bernie Sanders’s 2016 presidential campaign. Since then, the rising influence of the far left has been exemplified by three interrelated trends: first, an increase in public support for socialism and for Sanders’s progressive reform agenda; second, the emergence of a growing number of popular left-­ wing candidates for local and national office; and third, the explosive growth of the Democratic Socialists of America as a mass-membership group representing the leading edge of the new socialist left. The rise of socialism in the USA is particularly notable because it has happened at a time when in much of the developed world, the left has found itself mired in stagnation and organizational decline. In this chapter, I trace the growth of the new socialist left in the USA. Its emergence, I argue, reflects a historical irony: today, the historical marginalization of American socialism has been transformed from a weakness into a strength. Unlike in Europe, the US left was never a mass force, and it had no presence in the electoral arena: yet, in the long run, its very isolation meant that it bore no responsibility for the transformation of postwar capitalism over the past four decades. Untainted by any history of left governance, socialists in the USA are able to present themselves as a definite (if not always clearly defined) alternative to the political status quo. At the same time, I argue, the socialist left’s very newness also means that it faces a series of dilemmas that must be resolved if it hopes to continue advancing. Centrally, these revolve around issues of program and strategy, the left’s relationship with the Democratic Party, and a number of controversial political issues. Underlying all of these questions is the deeper problem of how to develop a stable social base at a time when organized labor remains historically weak and workplace militancy is episodic.

Origins of the Socialist Revival The current socialist revival has deep historical roots. Its origins lay in the restructuring of American capitalism beginning in the 1970s. The decades since have witnessed a steady rise in social inequality and economic insecurity and a concomitant decline in wage growth and unionization (a familiar story for advanced capitalist democracies during these years). As in Europe, those trends were overseen by governments of both the right and the center-left. In the case of the USA, the rightward turn of the Democratic Party did not give rise to any new political formation to fill the resulting vacuum. As mainstream liberalism veered toward ever more business-­friendly policies, the absence of any strong traditions of socialist organization meant that there was little basis for a challenge from the left. At best, during the 1980s and 1990s, small and isolated groups of radicals found themselves joining liberals in their (largely unsuccessful) efforts to defend the fruits of a bygone era of welfare expansion and social reform—Civil Rights legislation, protections for women, and the limited federal antipoverty programs established during the 1930s and 1960s. Yet, as inequality rose and business became increasingly organized and effective in the political arena, policy outcomes tended more and more to reflect the priorities of the very rich rather than the

4  The Rise of Socialism in the United States: American “Exceptionalism…

105

public as a whole.2 As a result, the functioning of American democracy took on the appearance of an empty ritual, which could no longer mask the overwhelming dominance of those with concentrated economic power. All of this came to a head following the 2008 financial crisis. The fallout from the crash highlighted the devastating consequences of four decades of welfare retrenchment and an economy built on low-wage employment and skyrocketing personal debt.3 It also raised expectations that something would be done to improve the situation. Those hopes were embodied in the person of Barack Obama, whose election in November 2008 was a seminal event, not just because of the sea change in public attitudes around race and racism it signaled but because of its impact on a generation of younger voters. Coming of age in the context of the Iraq War and the inequities of the pre-2008 boom, they saw in Obama’s election as both a repudiation of the presidency of George W. Bush and a harbinger of much larger changes in American political life. Yet, to a great extent, those hopes would be disappointed. The initial belief that Obama’s election represented a transformative moment in American political life would soon give way to disillusionment on the left; while Obama himself often managed to avoid the brunt of that frustration (and retains today a high level of personal popularity, especially among Democratic voters), his administration failed to stem the tide of rising social polarization and political frustration.4 In office, Obama reneged on several key campaign promises while implementing heavily watered down versions of other proposals. Even his signature legislative achievement, the Affordable Care Act, would come to be seen by many of his supporters on the left as hopelessly compromised by a number of key concessions to the private insurance, health provider, and pharmaceutical industries.5 More generally, Obama oversaw the continuation of policies and approaches on issues that would soon become flash points for popular protest. In 2011, anger over

 For evidence of this phenomenon, see Larry M.  Bartels, Unequal Democracy: The Political Economy of the New Gilded Age (New York: Russell Sage Foundation, 2008); Kay Lehman Schlozman, Sidney Verba, and Henry E. Brady, The Unheavenly Chorus: Unequal Political Voice and the Broken Promise of American Democracy (Princeton: Princeton University Press, 2013). 3  Schmitt, John, Elise Gould, and Josh Bivens. “Report: America’s slow-motion wage crisis: Four decades of slow and unequal growth.” Economic Policy Institute. September 13, 2018. 4  Jeffrey M Jones, “Obama’s First Retrospective Job Approval Rating Is 63%,” Gallup.com, February 15, 2018, https://news.gallup.com/poll/226994/obama-first-retrospective-job-approval-rating.aspx. For an overview of the left’s perspectives on Obama’s presidency, see “Roundtable: Assessing Obama,” Jacobin, January 20, 2017, http://www.jacobinmag.com/series/assessing-obama 5  Critical assessments of Obama’s approach to health care reform can be found in Adam Gaffney et  al., “Moving Forward from the Affordable Care Act to a Single-Payer System,” American Journal of Public Health 106, no. 6 (2016): pp. 987–988, and Colin Gordon, “A Brief History of American Health Reform,” Jacobin, July 25, 2017, https://jacobinmag.com/2017/07/trumpcareobamacare-us-health-care. On the role of the private sector in pushing Obama to water down the ACA, see Gail Russell Chaddock, “Healthcare Reform: Obama Cut Private Deals with Likely Foes,” The Christian Science Monitor, November 6, 2009, https://www.csmonitor.com/USA/ Politics/2009/1106/healthcare-reform-obama-cut-private-deals-with-likely-foes.; Jonathan Cohn, “How They Did It,” The New Republic, May 21, 2010, https://newrepublic.com/article/75077/ how-they-did-it; and Howard Waitzkin, “Selling the Obama Plan: Mistakes, Misunderstandings, and Other Misdemeanors,” American Journal of Public Health 100, no. 3 (2010): pp. 398–400. 2

106

J. Birch

rising inequality, and the government’s unwillingness to crack down on the banking and financial industries provoked a wave of mass occupations of public parks and urban centers under the slogan “Occupy Wall Street.” As a social movement, Occupy shared many of the weaknesses of other recent mobilizations in the USA: for instance, the lack of a sufficient organizational base or political strategy, and a tendency to grow explosively and collapse just as suddenly. Yet the breadth and dynamism of the movement was indicative of the feeling that had built up in much of American society that the economy was rigged against them. Not long after that, another wave of protests swept the country after a series of high-profile shootings of unarmed African-Americans. Those demonstrations, known by the hashtag “#BlackLivesMatter,” were largely framed around claims of widespread police bias and demands for an end to extrajudicial killings by law enforcement: protestors pointed to the hundreds of people who die every year at the hands of the police, disproportionately black, a large number of whom are unarmed and guilty of only minor offenses or nothing at all. Yet the movement also reflected deeper tensions over the extent of racism and inequality in the Obama era. These protests exposed the limits of black political representation at a time of historically unprecedented levels of incarceration—particularly of young black men—while highlighting widespread poverty and deprivation in the segregated neighborhoods that dot American cities.6 In the long run, neither of these movements could be sustained, and they left in their wake little in the way of concrete institutional reforms. Yet, in a broader sense, their impact on American politics was significant: above all, they brought to the fore issues and concerns that would later help galvanize the new socialist movement. They were particularly significant for a layer of younger activists, who came of age after 2008. These leftward-moving millennials are part of a generation whose lives have been shaped by a multitude of pathologies characteristic of contemporary American capitalism: far more likely than their parents to have a college degree, they now face a labor market where that does not guarantee stable employment; in which jobs often come with low pay and no security, opportunities for advancement are limited, and access to decent and affordable health coverage—let alone other benefits, like a pension—is anything but certain.7 The challenges of the millennial job market are compounded by massive levels of student debt, which, along with the rising costs of housing, have made it unlikely that many young people will ever have the option of buying a home.8 It is no wonder then, that by 2016, these millennials were expressing views on a range of social and economic questions that put them far to the left of previous

 Valerie Wilson and William Rodgers, “Black-White Wage Gaps Expand with Rising Wage Inequality,” Economic Policy Institute, September 20, 2016, https://www.epi.org/publication/ black-white-wage-gaps-expand-with-rising-wage-inequality/ 7  Lawrence R.  Mishel et  al., The State of Working America (Ithaca, NY: Cornell University Press, 2012). 8  Teresa Kroeger and Elise Gould, “The Class of 2017,” Economic Policy Institute, May 4, 2017, https://www.epi.org/publication/the-class-of-2017/ 6

4  The Rise of Socialism in the United States: American “Exceptionalism…

107

generations.9 Young people in the USA are not just more supportive of proposals like the “Green New Deal” and a federal jobs guarantee. They are also more negative in their outlook on capitalism. Indeed, survey data suggests that this was central to their political evolution in recent years, with one 2018 poll reporting a “12 point decline in young adults’ positive views of capitalism in just the past two years and a marked shift since 2010, when 68% viewed it positively.” As a result, today, “Americans aged 18 to 29 are as positive about socialism (51%) as they are about capitalism (45%).”10 These attitudes are at odds with the views of older Americans, especially those over the age of 60.11 In fact, younger Americans diverge from their parents and grandparents on a wide variety of issues: for instance, they are more favorable toward immigrants and immigration, more supportive of measures to promote gender equality, and far friendlier toward increased legal protections for LGBT people. They are also much less enthusiastic about American nationalism, the police, or the use of military power by the American government. Sociologically, their lives also diverge from the pattern set by earlier generations: they are, for instance, much less likely to be affiliated with a religious organization or to describe religion as important to them. Having grown up in the post-Civil Rights era, they are also less discriminatory in their outlook and attitudes and less likely to embrace the “dog-whistle” politics of thinly veiled bigotry and coded racism. In fact, while white Americans as a whole are largely hostile toward systematic efforts to redress de facto segregation and racial inequality in American society, younger whites are more evenly split on the question—with opinion polls suggesting that a majority of those under 30 were supportive of the #BLM movement. These generational divisions came to the fore during the 2016 presidential election. In the campaign for the Democratic nomination, younger voters overwhelmingly supported Bernie Sanders over Hillary Clinton; the same group also reported the greatest levels of opposition to Donald Trump during the general election. While in the USA, the common cliché is that young leftists inevitably turn into rock-ribbed conservatives as they hit middle age that has not always been the pattern. In fact, during the 1980s, younger Americans were among the most enthusiastic supporters of Ronald Reagan. In 2016, however, Sanders appealed to these voters by focusing on issues like rising income inequality, mounting student debt, and the gross inequities of the private health insurance system. The concentration of wealth in fewer and fewer hands, he argued, was indicative of the stranglehold of the “1%” over political and economic life in the USA.  The solution was a “political revolution” to wrest  Peter Beinart, “Why America Is Moving Left,” The Atlantic Monthly, December 22, 2015, https:// www.theatlantic.com/magazine/archive/2016/01/why-america-is-moving-left/419112/ 10  Frank Newport, “Democrats More Positive About Socialism Than Capitalism,” Gallup.com, August 13, 2018, https://news.gallup.com/poll/240725/democrats-positive-socialism-capitalism.aspx 11  “The Generation Gap in American Politics,” Pew Research Center for the People and the Press (Pew Research Center for the People and the Press, March 1, 2018), http://www.people-press. org/2018/03/01/the-generation-gap-in-american-politics/ 9

108

J. Birch

control of the democratic state from their hands. Sanders campaign platform included a variety of far-reaching reforms to be paid for through a tax raise for high earners and corporations. Of these proposed measures, he particularly highlighted the need for a universal system of publicly provided medical coverage (“Medicare for All”), a rapid increase in the federal minimum wage, and the introduction of tuition-free college education at public universities. This policy agenda represented a move toward what he termed “democratic socialism.” What exactly Sanders meant by this was never entirely clear, but he often compared American capitalism unfavorably to the traditional social democracies of Scandinavia. This message resonated widely during the campaign, especially in parts of the “Rust Belt,” where Trump would go on to win several important states that previously swung Democratic. In the general election, Clinton, who ended up losing a third of all counties nationally that Barack Obama won in both 2008 and 2012, failed to turn out lower-income voters who had come to the polls for Obama, and she was heavily defeated in poorer rural areas which had tipped toward him.12 In purely electoral terms, Clinton’s loss reflected the failure of a strategy that emphasized winning support among higher-income suburban voters at the expense  of voters in regions suffering acute levels of poverty, insecurity, and unemployment.13 During the primary, Sanders did well in many of those same low-income, rural communities. He was also far more popular than Clinton with non-Democratic voters (who in some states are allowed to vote in party primaries). As Ted Fertik concluded based on his study of the election data, “The Sanders base … is the young and political independents, who share the core characteristic of being very weakly attached to the existing parties.”14 Much has been made of Sanders’s poor showing with black voters in the primary, especially in those southern states where African-­ Americans make up a larger proportion of registered Democrats. Yet here too, polling data points to a generational split. While Clinton won a majority of African-American voters, her advantage was concentrated among middle-aged and elderly voters. According to survey data, Clinton’s strongest support is from ­African-­Americans above the age of 60, while among black voters aged 18–30 (who were less likely to participate in the primaries), Sanders won a narrow majority.15 The 2016 campaign would turn out to be the crucible in which a new socialist movement was forged. The combination of Bernie Sanders’s Democratic primary challenge, which popularized the slogan of “democratic socialism,” and Donald Trump’s subsequent victory in the general election pushed millions of young people 12  Mike Davis, “The Great God Trump and the White Working Class,” Catalyst: A Journal of Theory and Strategy 1, no. 1 (2017); Kevin Uhrmacher, Kevin Schaul, and Dan Keating, “These Former Obama Strongholds Sealed the Election for Trump,” The Washington Post, November 9, 2016, https://www.washingtonpost.com/graphics/politics/2016-election/obama-trump-counties/ 13  Matt Karp, “Fairfax County, USA,” Jacobin, November 28, 2016, https://www.jacobinmag. com/2016/11/clinton-election-polls-white-workers-firewall 14  Ted Fertik, “The New Political Arithmetic,” New Labor Forum 25, no. 3 (2016): pp. 42–47. 15  Perry Bacon, “Huge Split between Older and Younger Blacks in the Democratic Primary,” NBCNews.com, May 28, 2016, https://www.nbcnews.com/news/nbcblk/huge-split-betweenolder-younger-blacks-democratic-primary-n580996

4  The Rise of Socialism in the United States: American “Exceptionalism…

109

to become politically active for the first time in their lives. As a result, the election changed the face of American politics, giving Sanders a national platform with which to push his calls for a “political revolution” against the subversion of democracy by the wealthy and corporate interests. In this way, the Sanders campaign solidified the growing sentiment of Democratic voters in favor of “socialism.” Thus, a recent poll found that today, “57% of Democrats and Democratic-leaning independents view socialism positively” compared to 47% of Democrats who “view capitalism positively.”16 That does not mean Americans have a clear understanding of what the term “socialism” refers to. Polls show that a plurality of the public defines socialism in terms of equality, but many people understand it as government provisioning of welfare benefits and social services, or as something like Soviet-style communism. About a quarter of Americans were not able to give an answer.17 In contrasting the USA to countries like Denmark which devote much more of their GDP to social expenditures, Sanders has sought to make the case that a comprehensive system of social welfare protections and income supports could not only be more equitable, but also compatible with high rates of employment and economic growth. Sanders’s depiction of Northern Europe’s traditional social democratic welfare regimes suggests that an alternative to US-style market liberalism exists and in fact consistently outperforms the USA on a variety of important measures. This characterization of the advantages of European-style welfare systems runs the risk of glossing over the considerable problems those systems face today. In fact, changes in the past four decades have weakened the institutions of Europe’s traditional social democracies and made them far less appealing than during their postwar heyday, when the Swedish model was celebrated by key US labor leaders like autoworkers head Walter Reuther.18 Nonetheless, after decades when the very word “socialist” was taboo in American political life, the popularity of Sanders’s message represents a momentous shift. Notably, Sanders frames his policy agenda as a means of attacking the power of big business and the very rich. His approach embodies a kind of “class struggle reformism” that seeks to mobilize working-class and poor Americans in order to create a mass movement for the redistribution of wealth and power in the USA. Despite his defeat, Sanders emerged from the campaign a far more popular figure than either of the two major party nominees. Indeed, one survey of registered voters conducted soon afterward found that Sanders had the highest approval rating of any national political figure. While 57% of registered voters had a favorable opinion of the Vermont Senator—including 73% of black voters, 68% of Latinos, and 62% of

  Newport, Frank. “Democrats More Positive About Socialism than Capitalism.” Gallup. August 13, 2018. https://news.gallup.com/poll/240725/democrats-positive-socialism-capitalism. aspx?g_source=link_newsv9&g_campaign=item_243362&g_medium=copy 17  Frank Newport, “The Meaning of ‘Socialism’ to Americans Today,” Gallup.com, October 4, 2018, https://news.gallup.com/opinion/polling-matters/243362/meaning-socialism-americanstoday.aspx 18  Nelson Lichtenstein, Walter Reuther: The Most Dangerous Man in Detroit (Urbana: University of Illinois Press, 1997), 337. 16

110

J. Birch

those aged 18–34—no other national politician broke the 50% barrier.19 Moreover, his campaign laid the groundwork for a wave of left-wing candidates to run for national and state office on a similar platform. In 2018, those efforts resulted in striking electoral victories for left-wing congressional candidates running as Democrats, among them Alexandria Ocasio-­ Cortez, Rashida Tlaib, and Ilhan Omar—all young women of color known for being outspoken on issues like immigration, Palestinian rights, and ending the USA’s endless military interventions around the globe. Ocasio-Cortez, a Bronx native, and Tlaib, from Michigan, both campaigned in their respective Democratic primaries as self-described “socialists” and focused on proposals like a federal jobs guarantee, Medicare for All, and a Green New Deal. Their unexpected victories—in Ocasio-­ Cortez’s case over the longtime incumbent and powerful Congressional Democratic leader Joe Crowley—made them national figures. Since entering office, this crop of newly elected left-wing representatives have become symbols of the recent sea change in American politics. Rather than tempering their policy agenda to match the priorities of the Democratic leadership in the House of Representatives, they have become more vocal about their “radical” proposals (as Ocasio-Cortez described her plans for a “Green New Deal”).20 In addition, the election galvanized a layer of Sanders voters to continue their political engagement past the campaign. In the months after Trump’s victory, thousands of them joined the Democratic Socialists of America, which saw its membership increase from roughly 6000 in November 2016 to over 50,000 by the summer of 2018. This unprecedented surge in membership turned the DSA from a largely inactive and politically marginal group into the largest socialist organization in the USA since the heyday of the Communist Party. Before the Sanders campaign, such a development was unimaginable. In fact, the DSA, which had been formed out of two smaller socialist organizations in 1981, was barely functional in the years before 2016, and most of its membership had only a paper affiliation with the group. DSA’s rapid growth has made it the primary organizational expression of young Americans’ leftward shift. The new DSA members are largely composed of young, college-educated millennials struggling under the weight of student debt, the high costs of housing, and the uncertainties of the contemporary labor market. As Harold Meyerson points out, “Sociologically, DSA today resembles in many ways the major student left organization of the 1960s, Students for a Democratic Society.”21 DSA’s tens of thousands of members have given it a reach that no socialist organization in the USA has had in decades. The last time American socialism could draw on that large a membership base was the heyday of the Communist Party during World War II.  Jonathan Easley, “Poll: Bernie Sanders Country’s Most Popular Active Politician,” The  Hill, June 9, 2017, https://thehill.com/homenews/campaign/329404-poll-bernie-sanders-countrys-mostpopular-active-politician 20  In this plan, a major increase in federal spending, paid for through tax increases on the wealthy, would be used for a transition to a zero-carbon emissions economy while also providing work to the jobless. 21  Harold Meyerson, “The Return of American Socialism,” The American Prospect, October 11, 2018, https://prospect.org/article/return-american-socialism 19

4  The Rise of Socialism in the United States: American “Exceptionalism…

111

Why Was There No Socialism in America? DSA’s rise is indicative of the rapidly changing post-2016 political environment. From the Cold War through the Obama era, the Democratic Party always contained a number of prominent liberal voices, pushing various domestic reforms. Yet, these progressive figures were constrained  by their relationship with the Democratic establishment and the political consensus it embodied. That meant, for instance, that Congressional liberals routinely supported domestic repression and the use of American military power. Now, at a time when Donald Trump sits in the White House, a new left has emerged which seeks not just to change the current political alignment in Congress but to radically restructure the core institutions of American capitalism. The significance of these developments cannot be overstated. For much of the twentieth century, it was considered axiomatic that socialism had no place in the political constellation of American democracy. During the postwar era, the absence of a viable social democratic or labor party was the crux of what social scientists described as “American exceptionalism.” The reasons for this dynamic have long been a matter of debate. As far back as 1906, when Werner Sombart posed the question of “why there is no Socialism in the United States” in his book on the topic, that question has vexed scholars.22 Sombart argued that it was the promise of individual mobility and meritocratic advancement that immunized American workers from socialism. Since then, his account has been widely challenged by specialists.23 But its publication inspired a seemingly endless succession of studies on the same theme. This literature identified a variety of “external” and “internal” factors that contributed to the marginalization of the socialist left24 The former includes the heightened opportunities for economic advancement generated by the frontier and the rapid growth of American capitalism in the nineteenth century, the effects of early democratization, the impact of mass immigration and the resilience of traditional ethnic identities, the intensity of state repression, and the effects of the USA’s particular electoral system, which placed significant institutional barriers in the paths of insurgent third parties. Meanwhile, more internally focused arguments emphasized the strategic and organizational deficiencies of American socialists: their sectarianism, nativism, or inability to dislodge themselves from the pernicious power of bourgeois liberalism. For academics and nonspecialists alike, perhaps the most common explanation for the absence of a vibrant socialist movement in the USA points to a kind of hege Werner Sombart and C T Husbands, Why Is There No Socialism in the United States? (1976), trans. Patricia M Hocking (Macmillan Publishers, 1976). 23  Robin Archer, for instance, has attempted to dispute Sombart’s conclusions based on his own research on the US and the origins of the Australian Labour Party. See Robin Archer, “Labour Politics in the New World: Werner Sombart and the United States,” Journal of Industrial Relations 49, no. 4 (2007): pp. 459–482. 24  Eric Foner, “Why Is There No Socialism in the United States?,” History Workshop Journal 17, no. 1 (1984): pp. 57–80. 22

112

J. Birch

monic national culture or shared ethos. As  the influential sociologist Seymour Martin Lipset noted, this interpretation centers on the pervasive influence of a distinctive “American Ideology,” rooted in the revolution of 1776: “The American Ideology,” Lipset and coauthor Gary Marks wrote in their 2001 book on the topic, “can be subsumed in five words: antistatism, laissez-faire, individualism, populism, and egalitarianism.”25 Underlying this shared ideology, were powerful social and economic factors: notably, the diversity and heterogeneity of the American working class and the unique capacity of American capitalism to deliver high levels of social mobility and rising living standards. Even if these went hand in hand with substantial social inequality and widespread poverty, the feeling that individual opportunity was available to all made the US hostile territory for the left, Lipset and Marks concluded. Again, this interpretation has been challenged repeatedly by other scholars.26 One problem with accounts like these, critics say, is that it is very difficult to identify a set of structural features that the USA had, but other wealthy democracies, with strong left or labor-based parties, did not. Moreover, many of the distinctive features that came to define “American exceptionalism” only became readily apparent in the decades after World War II.27 In fact, socialism has not always been so foreign to the USA. It is ironic, for instance, that at the very moment Sombart posed his question, the socialist left was emerging as a mass force in American politics, via the newly established Socialist Party (SP). The SP, formed in 1900, grew rapidly thereafter and at its peak had well over 100,000 members, with hundreds of elected officials at both a local and national level.28 One magazine associated with the left wing of the party had a circulation of over 60,000. The SP’s leading spokesperson and perennial presidential candidate, former labor leader Eugene Debs, repeatedly garnered hundreds of thousands of votes, notably in the presidential election of 1920, when Debs himself was in jail for his public opposition to World War I. Following the end of the war, the SP suffered crippling divisions and fell into decline. Even then, however, the left was hardly a spent force.29 During the 1930s and 1940s, the Communist Party succeeded the SP as the primary representative of American socialism. The CP grew rapidly during the Great Depression and played a key role in a number of important progressive movements. As a result, the party, which had an estimated 7, 545 members in 1930, reached 75,000 by 1938. In this period, Communists spearheaded campaigns around demands for everything from  Seymour Martin Lipset and Gary Wolfe Marks, It Didn’t Happen Here Why Socialism Failed in the United States (New York: W.W. Norton & Company, 2001), 30. 26  Barry Eidlin, Labor and the Class Idea in the United States and Canada (Cambridge: Cambridge University Press, 2018); Mike Davis, Prisoners of the American Dream: Politics and Economy in the History of the US Working Class (New York: Verso, 1986). 27  See, for instance, Robin Archer, Why Is There No Labor Party in the United States? (Princeton: Princeton Univ. Press, 2010). 28  Paul Heideman, “The Rise and Fall of the Socialist Party of America,” Jacobin, February 20, 2017, https://www.jacobinmag.com/2017/02/rise-and-fall-socialist-party-of-america/ 29  James Weinstein, The Decline of Socialism in America, 1912–1925 (New Brunswick, NJ: Rutgers University Press, 1984). 25

4  The Rise of Socialism in the United States: American “Exceptionalism…

113

poor relief to anti-lynching legislation. Communist trade unionists were leaders of the industrial union movement, which gave rise to a new labor federation, the Congress of Industrial Organizations (CIO). They were crucial to the organization of major strikes in key industries like auto, rubber, and steel, which forced employers to agree to unionize.30 In the years after World War II, however, the CP went into an irreversible decline. As the Cold War began in the late 1940s, and with it  the anti-­Communist purges of the McCarthy era, CP members found themselves faced with a combination of escalating state repression and growing political isolation. Unable to withstand the rising tide of anti-Communism, the left collapsed. It was at this moment that socialism effectively disappeared from American political life. Still, the legacy of the SP and CP calls into question the notion that the USA has an entrenched national ethos that makes it resistant to socialism. Given this history, it is not enough to ask why there is no socialism in the USA; as Foner says, “What must be explained is not … why socialism is today absent from American politics, but why it once rose and fell.”31 Rather than being predetermined by the basic structure of American society or some overarching national culture, it seems more likely that the explanation revolves around contingent political factors.32 Either way, however, the consequences of that weakness were far-reaching. Despite a brief revival in the late 1960s and early 1970s as a result of the Vietnam antiwar and Civil Rights Movements, American socialism has had relatively few adherents and little i­ nfluence within the labor movement during the past half century. Thus relegated to the margins of political life, the socialist left was unable to exert anything like the influence that Western Europe’s mass social democratic and Communist parties had.

Labor and the Welfare State in Postwar America These dynamics had important ramifications for the development of American capitalism. For one, they meant that labor was especially weak in the political arena: thus, in comparison to countries with strong social democratic labor movements like Sweden, in the USA, voter turnout in national elections (especially during non-­presidential years) was markedly lower and characterized by a much stronger class bias.33 Nor was there any organized expression of labor’s class interests  There is an enormous literature on the Communists in the 1930s. For varying perspectives, see Harvey E. Klehr, The Heyday of American Communism: The Depression Decade (New York: Basic Books, 1984); Mark D.  Naison, Communists in Harlem During the Depression (Urbana, IL: University of Illinois Press, 2005); and Robin D.  G. Kelley, Hammer and Hoe: Alabama Communists During the Great Depression (University of North Carolina Press, 1990). 31  Foner (1984), 60. 32  For a recent interpretation that focuses on the Great Depression and Franklin Roosevelt’s New Deal as the key to understanding the evolution of American labor politics, see Eidlin (2018). 33  Walter Dean Burnham, “The Appearance and Disappearance of the American Voter,” essay, in The Political Economy: Readings in the Politics and Economics of American Public Policy., ed. Thomas Ferguson and Joel Rogers (Armonk, NY: M. E. Sharpe, 1984), pp. 112–139. 30

114

J. Birch

to challenge the economic and political power of business. Since labor lacked the kinds of centralized collective bargaining schemes or class-wide organizations that could facilitate coordinated action in the political arena, it struggled to mobilize around a shared agenda and was never really able to inculcate the American working class with a shared class consciousness or identity. Politically, labor’s dependence on the Democrats meant that unions often found themselves looking to the same party for political representation that many employers looked to for theirs. The US electoral system, which made it difficult for a third party to challenge the Democrats and Republicans or even to get on the ballot in some states, exacerbated this situation. With little prospect for an independent left party, trade unions found it easy to pursue their narrow, fragmentary interests rather than any encompassing class-wide agenda. As a result, policy outcomes in the USA have tended to reflect the distribution of market resources: when the preferences of the rich diverge from those of middle- and low-income voters, research suggests, the former usually get what they want, while the latter almost never do.34 Moreover, the lack of an independent socialist or social democratic left also contributed to the growth of a welfare state which reflected and reinforced market inequalities. As the social scientist Theda Skocpol noted, “The United States has never come close to having a ‘modern welfare state’ in the British, the Swedish, or any other positive Western sense of the phrase.”35 Throughout the postwar era, social policy in the USA was always sharply bifurcated, with the poor relying on a set of less generous, tax-funded, means-tested public benefits, while full-time employees were covered by a largely private system of social insurance benefits, supported by tax incentives, and underpinned by collective bargaining.36 Consequently, the American welfare state failed to provide the same levels of income redistribution or social protection that its European counterparts did. Not all observers agree that this situation made the American left “exceptional” in any permanent sense. Foner, for instance, suggests that the particular weakness of the American left and labor movement became less significant over time. He points out that in other countries, the tendency was toward a steady narrowing of socialists’ political ambitions until the “socialism” of many large working-class parties became essentially meaningless. As a result, there was a kind of convergence between the left in the USA and the European left during the postwar decades, he argues.37 However, this assessment is based on a misunderstanding of postwar social democracy, and the significance of its relationship with labor. As Upchurch et al. write:

 Martin Gilens, “Inequality and Democratic Responsiveness,” Public Opinion Quarterly 69, no. 5 (2005): pp. 778–796. 35  Theda Skocpol, Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States (Cambridge, MA: Belknap Press of Harvard Univ. Press, 1992), 5. 36  For a comparative perspective on the American welfare state, see Jacob S. Hacker, “Bringing the Welfare State Back In: The Promise (and Perils) of the New Social Welfare History,” Journal of Policy History 17, no. 01 (2005): pp. 125–154, and Hacker, “Privatizing Risk Without Privatizing the Welfare State: The Hidden Politics of Social Policy Retrenchment in the United States,” American Political Science Review 98, no. 02 (2004): pp. 243–260. 37  Foner (1984) develops this argument in the conclusion to his piece on the subject. 34

4  The Rise of Socialism in the United States: American “Exceptionalism…

115

Social democracy is a historical phenomenon marked by the integration and interpenetration of socialism and trade unionism and the de facto integration of the labor movement into parliamentary democracy … The ability of labor movements to extract concessions was based on the close institutional connections between trade unions and a “dominant party of labor.”38

In Northern and Western Europe, this relationship helped forge a system of social protections and labor-incorporating institutions, which sustained the class identities and organizations that underpinned high rates of unionization. Conversely, postwar American capitalism provided few institutional mechanisms to counteract the disorganizing pressures of the market. The consequence was a constant fragmentation of the working class into a multitude of competing interest and disparate identities (formed along racial, ethnic, regional, religious, and professional lines). As Ira Katznelson wrote in 1976, “Elsewhere in the West the tendency to parcellation has been partially countered by competing ‘global’ institutions and meaning systems of class … It is the virtual absence of even such moderate global approaches to class-­ and the massive resistance to such attempts made in the past-which is so striking about the American experience.”39 Over time, the marginalization of the socialist left and the political subordination and fragmentation of organized labor created a self-reinforcing dynamic. Throughout the postwar era, the weakness of the American left meant that there was no force to contest the relationship between labor and the Democrats. During the peak years of McCarthyism, union officials and their anti-Communist liberal allies remained closely wedded to the political consensus of the Cold War. This consensus allowed for an extensive system of collective bargaining by unions, but prevented labor from mounting any challenge to the power or prerogatives of business. For left-wing critics of labor’s strategy, the failure to break away from Cold War liberalism and the Democratic Party had severe long-term consequences. In his An Injury to All: The Decline of American Unionism, for example, Kim Moody argues that the relationship between the union bureaucracy and the Democrats was crucial to labor’s shift from the combative, politicized “social unionism” that characterized the militant industrial unions of the 1930s CIO, into the apolitical, “pure, and simple trade unionism” of the postwar era.40 Similarly, Mike Davis notes that labor’s alliance with Cold War liberals proved less than fruitful, as exemplified by the Democrats’ failure to block anti-labor legislation, such as the 1947 Taft-Hartey Act, or turn the stunted American welfare state into something more closely resembling a social democratic system.41  Martin Upchurch, Graham Taylor, and Andy Mathers, “The Crisis of ‘Social Democratic’ Unionism,” Labor Studies Journal 34, no. 4 (2009): pp. 519–542, 520. 39  Ira Katznelson, “Considerations on Social Democracy in the United States,” Comparative Politics 11, no. 1 (1978): pp. 77–99, 96. 40  Moody, Kim. An Injury to All: The Decline of American Unionism. New York: Verso, 1988. 41  Davis’s writings provide a useful overview of the history of American labor’s subordination to the Democrats and what its consequences were. Two of his key essays on this are Mike Davis, “Why the US Working Class Is Different,” New Left Review, no. 123 (September 1980): pp. 3–44, and Davis, “The Barren Marriage of American Labour and the Democratic Party,” New Left Review, no. 124 (November 1980): pp. 43–84. 38

116

J. Birch

Meanwhile, union leaders and their liberal allies worked together to force the left out of the labor movement. For Moody and Davis, an important factor in the emergence of American labor oligarchies was the expulsion of a layer of trade union activists affiliated with the Communist Party (along with much of the rest of the left) from the CIO after 1947.42 The anti-Communist purges of the McCarthy years not only drove the best militant organizers from the labor movement but also eliminated the most important secondary organization binding together and providing resources to the union left. With oppositionists excluded from the labor movement, there was no one to challenge union leaders’ acceptance of management prerogatives on the shop floor, or their political subservience to the increasingly conservative Democrats. In sum, this perspective suggests the imposition of anti-labor legislation after World War II and the increasing bureaucratization of organizations like the CIO were both closely linked to Cold War anti-Communism and repression of the trade union left. In the long run, these dynamics would significantly weaken the American labor movement. During the late 1960s and early 1970s, production speedups and the general radicalization of the era (especially the Black Liberation struggle) engendered a powerful, if brief, explosion of shop floor struggles. These mobilizations often took the form of wildcat strikes led by “rank-and-file” union members without the approval of union leaders.43 As the economic situation deteriorated and the rankand-file rebellion receded later in the 1970s, however, labor went into a steep decline. By the 1980s, the business unionist model had collapsed: unions were as conservative as ever, but they were no longer able to “deliver the goods” (in wage and benefit increases) or sustain membership in the face of an aggressive employers’ offensive.

Social Democratic Decline and the Future of the Left In this way, the political subordination of the US labor movement to the Democratic Party had important consequences, both during the Cold War years and subsequently. Given this history, there was little reason to expect the left to be resurgent in the USA today. In this sense, the explosive growth of a new socialist movement since 2016 has been especially remarkable. That is even more surprising if we look at this history in light of the very different trajectory of the socialist and social democratic left elsewhere in the developed world. In Europe, for instance, postwar capitalism was shaped by the existence of powerful, usually electorally viable, left parties. For the most part, these parties were closely linked to the institutions and organizations of social  For evidence on the impact of Communist leadership in the Congress of Industrial Organizations (CIO) and its locals, see Judith Stepan-Norris and Maurice Zeitlin, Left Out: Reds and America’s Industrial Unions (Cambridge: Cambridge University Press, 2003). 43  For a comprehensive account of this period, see Brenner, Aaron, Robert Brenner, and Calvin Winslow, eds. Rebel rank and file: Labor militancy and revolt from below during the long 1970s. Verso, 2010. 42

4  The Rise of Socialism in the United States: American “Exceptionalism…

117

democratic labor movements. During the decades of economic growth after World War II, they managed to construct elaborate systems of social protection and centralized collective bargaining regimes, forming what amounted to a different kind of capitalism than that found in the USA. However, over the past four decades, the decline of established labor organizations and the retreat of traditional left parties, their turn toward the market, and the concomitant loss of older political identities have all served to transform this situation. As a result of these changes, German sociologist Wolfgang Streeck says, “Social democrats have … lost contact with a large segment of their popular constituency.”44 Research suggests that the implementation of austerity measures has tended to reduce support for social democratic parties.45 In the long run, the transformation of these parties into agents of economic restructuring and welfare retrenchment resulted in a shift in their voter profiles and a decline in their electoral performance.46 This loss of support among previously loyal constituents did not happen overnight. Instead, it represents the fruits of a process four decades in the making. Beginning in the 1970s, Europe’s deteriorating economic fortunes produced elevated levels of unemployment and inflation, as well as intractable problems of profitability in core sectors. When European governments attempted to use traditional macroeconomic policy tools to resolve these difficulties, they had little success. In these circumstances, social democrats were faced with a dilemma. As Ira Katznelson describes it, “Left parties could either, as the British Labour Party did in 1976, announce that they were prepared to ‘roll back’ the welfare state and claim that they could do a better job of restricting government than political parties to the right, or they could push ahead with the advocacy of programs for a larger welfare state (and, more generally, social democratic) surplus in the absence of a coherent strategy to manage the existing capitalist economy.”47 In the long run, governments and left parties across Europe would opt for the former solution. Gradually, unevenly, the social democratic left was transformed, together with the postwar capitalist economies it had helped build. In some countries, the shift toward neoliberal restructuring and austerity was actually led by the same forces that had previously resisted the push for market reforms. That was the case in France, for example, where the Mitterrand government adopted a policy of

44  Wolfgang Streeck, “Social Democracy’s Last Rounds,” Jacobin, February 25, 2016, https:// www.jacobinmag.com/2016/02/wolfgang-streeck-europe-eurozone-austerity-neoliberalismsocial-democracy/ 45  Maria Snegovaya, “When Left-Leaning Parties Support Austerity, Their Voters Start to Embrace the Far Right,” Washington Post, November 20, 2018. 46  Kyle Taylor, “Western Europe’s Center-Left Parties Continue to Lose Ground,” Pew Research Center (Pew Research Center, September 12, 2018), http://www.pewresearch.org/facttank/2018/09/12/swedish-election-highlights-decline-of-center-left-parties-across-westerneurope/; Marcel Pauly, “Europe’s Social Democrats Are Having a Hard Time,” EUobserver, January 22, 2018, https://euobserver.com/political/140635 47  Ira Katznelson, “Accounts of the Welfare State and the New Mood,” American Economic Review 70, no. 2 (1980): pp. 117–122, 121.

118

J. Birch

rigueur in 1982–1983, after its initial macroeconomic strategy failed to stem the tide of mounting fiscal and balance-of-payments problems. As a result of this process, European social democrats have abandoned the promise of a reformist road to socialism, or at least to a more egalitarian capitalism, in favor of a technocratic vision of a well-managed free market economy. This has put them into conflict with sections of their own membership. Already, by the 1990s, some observers on the far left were predicting a growing split within the traditional organizations of the electoral left. Writing in 1997, Daniel Singer said of this process: Europe’s Socialist leaders … are being asked now … not to be the reformist managers of capitalist society, not even to manage that society as it is without reforms. They are told to get rid of the conquests achieved by the labor movement in the postwar period, on which their reputation was built and their attraction rested. What is at stake is their own fate, the very survival of a kind of Left that hitherto existed in Europe but not in the United States.”

Singer was quick to note that “leaders of the European Left are ready to accept the political consequences of our Americanization.”48 However, he expected these moves to provoke resistance from within the ranks of the left itself, which might impede the project of modernization. Singer’s assessment proved farsighted. Consider the Hartz IV welfare reforms implemented by German’s Red-Green Coalition Government a decade and a half ago, as part of the Agenda 2010 economic strategy announced by  SPD Prime Minister Gerhard Schroeder in early 2003. Hartz IV introduced major cuts to ­unemployment benefits and other social protections and was pushed through despite the German population’s overwhelming and robust support for the maintenance of the welfare state—indeed, in 2004, more than 41% of respondents to one national poll agreed with the statement “benefits and social services should be expanded” while nearly as many others agreed that they should remain at current levels. The government’s reform agenda contributed to its defeat in subsequent regional elections, and caused a split in the SPD, with a section of the party, led by Former Finance Minister Oskar Lafontaine, joining with the former East German Communists to form the Left Party (Die Linke).49 More broadly, there is considerable evidence that undertaking such retrenchment efforts has been highly damaging for traditional center-left parties.50 Often, social democratic leaders like Schroeder attribute the turn toward market liberalism to considerations of unavoidable economic necessity. Yet in making that turn, they have destroyed the foundations of their own electoral success and lost the

 Daniel Singer, “Requiem for Social Democracy,” Monthly Review; January 1997, pp. 1–15.  Oliver Nachtwey and Tim Spier, “Political Opportunity Structures and the Success of the German Left Party in 2005,” Debatte: Journal of Contemporary Central and Eastern Europe 15, no. 2 (2007): pp. 123–154. 50  See, for Christoph Arndt, The Electoral Consequences of Third Way Welfare State Reforms: Social Democracy’s Transformation and Its Political Costs (Amsterdam: Amsterdam University Press, 2014). 48 49

4  The Rise of Socialism in the United States: American “Exceptionalism…

119

support of core constituencies.51 As one report from Germany’s Friedrich-Ebert Stiftung put it: Many people fear that the future carries more risks than chances for them and their children. They fear for their standard of living and for their place in society … They feel alienated, dispossessed and downgraded. Many of those who have become pessimistic about the future come from those segments of society that traditionally supported Social Democracy. Nowadays they consider Social Democracy to be part of the “modernisation” that is eroding old comforts and old securities.52

Similarly, Hans-Georg Betz writes that in France, “the majority of … voters showed little confidence in the established parties, the political class, and the political process in general. For most voters, politicians care little about what ordinary citizens think or want and are easily corrupted.”53 In Europe, it has usually been the far right that has benefited the most from this. The general disillusionment of European voter with the existing parties and political systems has contributed to the rise of a nativist and xenophobic right, promising to sweep away established parties and political elites. In the USA, however, it is just the opposite. There is a far right in the USA, but for the most part, it remains firmly inside Republican Party. Its main base of support comes from older, traditional Republican voters. Young people, on the other hand, are far more likely to gravitate toward the left, as exemplified by the rapid growth of DSA since 2016. This situation, I want to argue, reflects a historical irony: today, the American left’s major advantage is that it has been far too weak for too long to bear the stigma of a decades-long political crisis. While in Western Europe social democratic and labor parties held the reins of power for long stretches during the decades of economic decline, austerity, and rising insecurity, that  was never the case in the USA.  The absence of an “institutional left” during the postwar era ensured that socialists never took on governmental responsibility, never faced the dilemmas that confronted the traditional parties of social democracy, and never forfeited the support of established constituencies. The American left played no role in overseeing the crisis of American politics. It therefore avoided the political costs that the left has paid in other countries. As a result, the socialist left today is able to present itself as a principled alternative to the political status quo. As Corey Robin has argued, one factor that made Sanders particularly appealing to voters was that he could present himself “untainted  For an example of how social scientists have analyzed the trade-offs entailed by this choice, see Herbert Kitschelt, “European Social Democracy between Political Economy and Electoral Competition,” essay, in Continuity and Change in Contemporary Capitalism, ed. Peter Lange, Gary Marks, and John D.  Stephens (Cambridge, UK: Cambridge University Press, 1999), pp. 317–345. 52  Alfred Pfaller, “European Social Democracy – In Need of Renewal,” issue brief, European Social Democracy – In Need of Renewal, International Policy Analysis (Berlin: Friedrich-Ebert-Stiftung, 2009), 15:15. 53  Hans-Georg Betz, “The Revenge of the Ploucs: The Revival of Radical Populism under Marine Le Pen in France,” essay, in European Populism in the Shadow of the Great Recession., ed. Hanspeter Kriesi and Takis Pappas (Colchester, England: Ecpr Press, 2015), pp. 75–89, 77. 51

120

J. Birch

by all the words and ways of politics as usual.” For younger Americans, in particular, Sanders’ self-professed socialism was not a mark against him, but a reflection of his status as an insurgent outsider seeking to challenge a hopelessly corrupt, elite-­ dominated political order. “Ironically,” Robin continues, “the fact that socialism was so long in exile now shields it from the toxic familiarities of American politics.”54

Challenges for an Emerging Left Thus, the long history of isolation and failure on the part of the socialist left during the postwar era has counterintuitively become a source of strength today: since the left never had any power to begin with, it does not today have to contend with the legacy of past defeats or overcome the demoralization produced by decades of retreat. On the other hand, the emerging socialist left does not have any long-­ standing traditions or institutional resources it can draw on; it desperately needs to construct sustainable mass-membership organizations. It now faces a number of challenging political questions it must answer if it hopes to continue its current momentum. The first of these is the contentious issue of the Democratic Party and whether it can be an effective vehicle for the left. Since as far back as the late nineteenth ­century, the relationship with the Democrats has been a subject of endless controversy on American left. Micah Uetricht has written that this is “the classic dilemma endlessly debated by American radicals for decades: Should they struggle within a hopelessly compromised Democratic Party to make the greatest possible impact on the world, or should they abandon the party in favor of creating an alternative but risk complete political isolation?”55 Before 2016, DSA was strongly committed to the view that the  left had to operate inside the Democratic Party, by endorsing Democratic candidates, supporting Democratic campaigns, and working closely with Democratic officials. As one DSA leader wrote in the mid-1990s, “In the present period, the social forces we seek to work with find their electoral expression primarily within the left-wing of the Democratic Party. It is for this reason that our national electoral strategy consists of working within and strengthening this left-­ wing, creating a socialist presence in this arena, and shifting the terms of public debate to the left.”56 Conversely, much of the far left has long argued that this strategy is responsible for the left’s inability to break out of the constraints imposed by official liberalism. This, they argue, has continuously reinforced the conservatism and lack of class-­  Corey Robin, “The New Socialists: Why the Pitch from Alexandria Ocasio-Cortez and Bernie Sanders Resonates in 2018,” New York Times, August 26, 2018, p. SR1. 55  Micah Uetricht, “The World Turned Upside Down: ‘Our Revolution,’ Trump Triumphant, and the Remaking of the Democratic Party,” New Labor Forum 26, no. 2 (2017): pp. 20–27, https://doi. org/10.1177/1095796017700856 56  Alan Charney, “Present Progressive,” Democratic Left, March 1995, p. 23. 54

4  The Rise of Socialism in the United States: American “Exceptionalism…

121

consciousness characteristic of the American labor movement, as well as the highly constricted nature of policy debates and party competition in the USA. Those who share this perspective see efforts to “realign” the Democratic Party into a European-­ style social democratic party as not only futile but also self-defeating: they point out that progressive reformers have repeatedly failed in their efforts to achieve this kind of realignment, often in circumstances far more favorable than today’s: thus, for instance, in the aftermath of the Civil Rights Movement, progressives in the “New Politics” current of the early 1970s and the Jesse Jackson campaigns of 1984 and 1988 had been unable to stem the tide of a steady shift to the right by Democratic leaders.57 In the past, there was good reason to suspect that any attempt to realign the Democratic Party was doomed and that pursuing such a strategy would only prove self-defeating for the left. Since 2016, however, the situation appears to have changed. Beginning with Sanders’s efforts to use party primaries as an opportunity to challenge “establishment,” Democrats from the left have achieved impressive successes. These left-wing candidates have become important leaders and spokespeople for the emerging socialist movement. And once in office, their position has not made these candidates more conservative but only amplified their voices. In the long run, independence remains an important goal for the emerging socialist ­movement. At this point, however, the socialist left depends on the ability of figures like Sanders and Ocasio-Cortez to conduct high-profile campaigns within the framework of the Democratic Party to galvanize support. In fact, support for another Sanders run in the 2020 presidential election is the one thing most of the left seems to agree on. More pressing, perhaps, are a number of closely related issues that have dominated internal debates within the DSA as the organization has grown rapidly in recent years. These center on the questions of program and strategy, how to approach nonclass forms of oppression, and what conception of organizational democracy the group should follow. The lines of debate over these questions are tangled and unstable. Compounding these internal difficulties is the fact that so much of DSA’s membership is made up of political neophytes and that the group itself lacks a clearly defined internal structure. Questions of demands and program form one central arena of contention. Some currents in the group argue for a focus on class-wide demands like Medicare for All, arguing that these kinds of programs can serve as “non-reformist reforms” that both win political support from wide groups of workers and put workers in a position to be even more combative by reducing their dependence on employers. Other currents argue that the group needs to be centrally oriented on questions of racial oppression, and foreground demands around prison abolition, in order to connect the group with the lingering aftereffects of the Black Lives Matter Movement. Still others argue  Paul Heideman, “It’s Their Party,” Jacobin, no. 20 (2016), pp. 23–39; Mike Davis, “The Lesser Evil? The Left and the Democratic Party,” New Left Review, no. 155 (January 1986); Charles Post,  “What strategy for the US Left?” Jacobin, February 23, 2018, https://jacobinmag. com/2018/02/socialist-organization-strategy-electoral-politics. 57

122

J. Birch

that demands for reforms themselves are less important than the group’s ability to begin to build a presence in working-class communities through social service initiatives, often modeled after the Black Panther Party’s famous free breakfast programs, in order to build a base of support. Disagreements over what reforms to prioritize are accompanied by wide-­ranging debates over how they are to be accomplished. Unsurprisingly, given the role of the Sanders campaign, and subsequent electoral victories, in building the group, much of this debate centers around the proper posture toward elections. While support for Sanders is probably the closest thing to a unanimous position within the organization, fierce debates continue over other electoral initiatives. Some currents argue that the group should only endorse self-identified socialists, casting a wary eye on the long history of the left as an ineffectual supporter of generic “progressives” within the Democratic Party. Others argue that progressive, anti-corporate candidates in the Sanders mold should be supported regardless of whether they wear the socialist label. This debate emerged with particular acuity around actor Cynthia Nixon’s primary campaign against Andrew Cuomo for governor of New  York. Nixon, looking to challenge Cuomo from the left and short on institutional support, openly sought DSA’s endorsement, despite not previously claiming any socialist affiliation. Though the New  York membership ultimately voted for endorsement, there was extensive debate over whether doing so compromised DSA’s ability to regenerate a specifically socialist pole in American politics. A more fundamental issue, and one that will confront the entire left going forward, is the lack of a coherent long-term strategy in DSA. While the American left can clearly generate popular candidates and slogans, it has yet to win meaningful reforms, let alone contend for political power. Its ability to do that going forward is closely intertwined with the difficult problem of finding a social base for itself, with the capacity to impose real costs on business. Since the 1970s, the decline of the American unionism has eroded the traditional constituencies of the labor movement. Although in recent years attempts have been undertaken to organize workers in other sectors, like the fast-food industry and logistics, these efforts are still in their infancy: overall, unionization levels and strike rates remain close to historic lows, and many of the largest and fastest-growing industries in the USA continue to rely on low-wage labor. In effect, then, the USA faces the same problem as the left in the rest of the world: having lost socialist movement’s traditional social base, it must scramble to organize a new one at a time when labor militancy and workplace organization are at an ebb. What it will take to reverse this situation is an open question. In the USA, there have been encouraging signs of a revival of activity in the public sector: notably, a wave of work stoppages by teachers in school districts across the country that began in early 2018.58 Still, it is a long road from there to a revived labor movement, let alone the formation of a socialist movement capable of challenging business.

 Eric Dirnbach, “US Workers Are Striking Again,” Jacobin, September 8, 2018, https://jacobinmag.com/2018/09/strikes-work-stoppages-united-states-bls

58

4  The Rise of Socialism in the United States: American “Exceptionalism…

123

Conclusion Whatever the explanation for the historical weakness of American socialism, the consequences have been significant. For the US left, the impact has been severe. In the second half of the twentieth century, it meant decades of general isolation and sustained organizational weakness. Politically, the absence of a strong electoral socialist or labor party meant that the American left was closely tied to mainstream liberalism. Most importantly, that connection was reflected in the dominance of the Democratic Party as the primary vehicle for progressive electoral politics. Given that history, the rapid rise of a new socialist movement since 2016 is all the more noteworthy. While the factors that have driven this socialist revival—starting with the fallout from the 2008 financial crisis and culminating with Trump’s election—are not hard to identify, it was impossible to predict that an obscure senator from Vermont could inspire such a dramatic change in the fortunes of the left. This situation also reflects a historical irony: it is precisely because the American left did not enjoy extensive support or a high degree of institutional power during the postwar era that it has escaped the general disillusionment with American politics more recently. In that sense, the left’s past weakness has now become a source of strength in contrast to the situation facing Europe’s social democratic and labor parties. That same legacy, however, means that the emerging socialist left now has to confront a number of crucial political and organizational issues. The very newness of groups like DSA means that they are able to sustain a high level of excitement and optimism while major questions about political program and strategy, organizational structure, and political priorities remain unanswered. While the return of socialism to American political life shows no signs of slowing down, in the long run, the answers that are given to these questions will help determine the future direction of left politics in an age of deep-seated social and political crisis.

Annex: What Is Democratic Socialism?59  oesn’t Socialism Mean that the Government Will Own D and Run Everything? Democratic socialists do not want to create an all-powerful government bureaucracy. But we do not want big corporate bureaucracies to control our society either. Rather we believe that social and economic decisions should be made by those whom they most affect.  “What Is Democratic Socialism?,” Democratic Socialists of America (DSA), accessed November 21, 2018, https://www.dsausa.org/about-us/what-is-democratic-socialism/. This short, question-and-answer-style introduction to DSA’s basic politics appears on the organization’s website. It provides an overview of the group’s traditional political outlook, including a description of “democratic socialism” as something akin to what is sometimes known as “market socialism,” its interpretation of  the  failures of  the  Soviet model and  the  limits of  European 59

124

J. Birch

Today, corporate executives who answer only to themselves and a few wealthy stockholders make basic economic decisions affecting millions of people. Resources are used to make money for capitalists rather than to meet human needs. We believe that the workers and consumers who are affected by economic institutions should own and control them. Social ownership could take many forms, such as worker-owned cooperatives or publicly owned enterprises managed by workers and consumer representatives. Democratic socialists favor as much decentralization as possible. While the large concentrations of capital in industries such as energy and steel may necessitate some form of state ownership, many consumer goods industries might be best run as cooperatives. Democratic socialists have long rejected the belief that the whole economy should be centrally planned. While we believe that democratic planning can shape major social investments like mass transit, housing, and energy, market mechanisms are needed to determine the demand for many consumer goods.

 asn’t Socialism Been Discredited by the Collapse H of Communism in the USSR and Eastern Europe? Socialists have been among the harshest critics of authoritarian Communist states. Just because their bureaucratic elites called them “socialist” did not make it so; they also called their regimes “democratic.” Democratic socialists always opposed the ruling party states of those societies, just as we oppose the ruling classes of capitalist societies. We applaud the democratic revolutions that have transformed the former Communist bloc. However, the improvement of people’s lives requires real democracy without ethnic rivalries and/or new forms of authoritarianism. Democratic socialists will continue to play a key role in that struggle throughout the world. Moreover, the fall of Communism should not blind us to injustices at home. We cannot allow all radicalism to be dismissed as “Communist.” That suppression of

social democracy, its relationship with the Democratic Party and electoral politics, and its understanding of the necessity for strategic involvement in a variety of youth and social movements. It is important to note that while this document captures much of the thinking of key segments of the DSA membership, it is also outdated and no longer reflective of the full range of opinion inside the group. In fact, the group’s membership has grown so explosively since 2016; it now contains a wide variety of perspectives on these questions, from mild social democrats to proponents of a revolutionary rupture with capitalism. Many members have not come to a firm position on precisely what “democratic socialism” will look like or how it might be achieved. Moreover, while this document is clearly shaped by Cold War hostility to the idea of socialism, and the imperative of differentiating DSA’s traditional socialist reformism from the Soviet model, today, these are no longer such important concerns. Thus, none of this should be taken as a comprehensive or settled statement on the current politics of DSA, which remains in flux.

4  The Rise of Socialism in the United States: American “Exceptionalism…

125

dissent and diversity undermines America’s ability to live up to its promise of equality of opportunity, not to mention the freedoms of speech and assembly.

 rivate Corporations Seem to Be a Permanent Fixture P in the USA, So Why Work Toward Socialism? In the short term, we can’t eliminate private corporations, but we can bring them under greater democratic control. The government could use regulations and tax incentives to encourage companies to act in the public interest and outlaw destructive activities such as exporting jobs to low-wage countries and polluting our environment. Public pressure can also have a critical role to play in the struggle to hold corporations accountable. Most of all, socialists look to unions to make private business more accountable.

 on’t Socialism Be Impractical Because People Will Lose Their W Incentive to Work? We don’t agree with the capitalist assumption that starvation or greed are the only reasons people work. People enjoy their work if it is meaningful and enhances their lives. They work out of a sense of responsibility to their community and society. Although a long-term goal of socialism is to eliminate all but the most enjoyable kinds of labor, we recognize that unappealing jobs will long remain. These tasks would be spread among as many people as possible rather than distributed on the basis of class, race, ethnicity, or gender, as they are under capitalism. And this undesirable work should be among the best, not the least, rewarded work within the economy. For now, the burden should be placed on the employer to make work desirable by raising wages, offering benefits, and improving the work environment. In short, we believe that a combination of social, economic, and moral incentives will motivate people to work.

Why Are There No Models of Democratic Socialism? Although no country has fully instituted democratic socialism, the socialist parties and labor movements of other countries have won many victories for their people. We can learn from the comprehensive welfare state maintained by the Swedes, Canada’s national health-care system, France’s nationwide childcare program, and Nicaragua’s literacy programs. Lastly, we can learn from efforts initiated right here in the USA,

126

J. Birch

such as the community health centers created by the government in the 1960s. They provided high-quality family care with community involvement in decision-making.

 ut Hasn’t the European Social Democratic Experiment B Failed? Many northern European countries enjoy tremendous prosperity and relative economic equality, thanks to the policies pursued by social democratic parties. These nations used their relative wealth to insure a high standard of living for their citizens—high wages, health care, and subsidized education. Most importantly, social democratic parties supported strong labor movements that became central players in economic decision-making. But with the globalization of capitalism, the old social democratic model becomes ever harder to maintain. Stiff competition from low-­wage labor markets in developing countries and the constant fear that industry will move to avoid taxes and strong labor regulations have diminished (but not eliminated) the ability of nations to launch ambitious economic reform on their own. Social democratic reform must now happen at the international level. Multinational corporations must be brought under democratic controls, and workers’ organizing efforts must reach across borders. Now, more than ever, socialism is an international movement. As socialists have always known, the welfare of working people in Finland or California depends largely on standards in Italy or Indonesia. As a result, we must work toward reforms that can withstand the power of multinationals and global banks, and we must fight for a world order that is not controlled by bankers and bosses.

 ren’t You a Party That’s in Competition with the Democratic A Party for Votes and Support? No, we are not a separate party. Like our friends and allies in the feminist, labor, civil rights, religious, and community organizing movements, many of us have been active in the Democratic Party. We work with those movements to strengthen the party’s left wing, represented by the Congressional Progressive Caucus. The process and structure of American elections seriously hurt third party efforts. Winner-take-all elections instead of proportional representation, rigorous party qualification requirements that vary from state to state, a presidential instead of a parliamentary system, and the two-party monopoly on political power have doomed third-party efforts. We hope that at some point in the future, in coalition with our allies, an alternative national party will be viable. For now, we will continue to support progressives who have a real chance at winning elections, which usually means left-wing Democrats.

4  The Rise of Socialism in the United States: American “Exceptionalism…

127

I f I Am Going to Devote Time to Politics, Why Shouldn’t I Focus on Something More Immediate? Although capitalism will be with us for a long time, reforms we win now—raising the minimum wage, securing a national health plan, and demanding passage of right-to-strike legislation—can bring us closer to socialism. Many democratic socialists actively work in the single-issue organizations that advocate for those reforms. We are visible in the reproductive freedom movement; the fight for student aid; gay, lesbian, bisexual, and transgender organizations; anti-racist groups; and the labor movement. It is precisely our socialist vision that informs and inspires our day-to-day activism for social justice. As socialists, we bring a sense of the interdependence of all struggles for justice. No single-issue organization can truly challenge the capitalist system or adequately secure its particular demands. In fact, unless we are all ­collectively working to win a world without oppression, each fight for reforms will be disconnected, maybe even self-defeating.

 hat Can Young People Do to Move the USA W Toward Socialism? Since the Civil Rights Movement of the 1950s, young people have played a critical role in American politics. They have been a tremendous force for both political and cultural change in this country: in limiting the USA’s options in the war in Vietnam, in forcing corporations to divest from the racist South African regime, in reforming universities, and in bringing issues of sexual orientation and gender discrimination to public attention. Though none of these struggles were fought by young people alone, they all featured youth as leaders in multigenerational progressive coalitions. Young people are needed in today’s struggles as well: for universal health care and stronger unions, against welfare cuts and predatory multinational corporations. Schools, colleges, and universities are important to American political culture. They are the places where ideas are formulated and policy discussed and developed. Being an active part of that discussion is a critical job for young socialists. We have to work hard to change people’s misconceptions about socialism, to broaden political debate, and to overcome many students’ lack of interest in engaging in political action. Off campus, too, in our daily cultural lives, young people can be turning the tide against racism, sexism, and homophobia, as well as the conservative myth of the virtue of “free” markets.

128

J. Birch

I f So Many People Misunderstand Socialism, Why Continue to Use the Word? First, we call ourselves socialists because we are proud of what we are. Second, no matter what we call ourselves, conservatives will use it against us. Anti-socialism has been repeatedly used to attack reforms that shift power to working-class people and away from corporate capital. In 1993, national health insurance was attacked as “socialized medicine” and defeated. Liberals are routinely denounced as socialists in order to discredit reform. Until we face, and beat, the stigma attached to the “S word,” politics in America will continue to be stifled and our options limited. We also call ourselves socialists because we are proud of the traditions upon which we are based, of the heritage of the Socialist Party of Eugene Debs and Norman Thomas, and of other struggles for change that have made America more democratic and just. Finally, we call ourselves socialists to remind everyone that we have a vision of a better world.

Bibliography Archer R (2007) Labour politics in the new world: Werner Sombart and the United States. J Ind Relat 49(4):459–482 Archer R (2010) Why is there no labor party in the United States? Princeton University Press, Princeton, NJ Arndt C (2014) The electoral consequences of third way welfare state reforms: social democracy's transformation and its political costs. Amsterdam University Press, Amsterdam Bacon P (2016) Huge split between older and younger blacks in the democratic primary. NBCNewscom. https://www.nbcnews.com/news/nbcblk/huge-split-between-older-youngerblacks-democratic-primary-n580996. Accessed 28 May 2016 Bartels LM (2008) Unequal democracy: the political economy of the new gilded age. Russell Sage Foundation, New York Beinart P (2015) Why America is moving left. The Atlantic Monthly. https://www.theatlantic.com/ magazine/archive/2016/01/why-america-is-moving-left/419112/. Accessed 22 Dec 2015. Betz H-G (2015) The revenge of the ploucs: the revival of radical populism under marine Le pen in France. In: Kriesi H, Pappas T (eds) European populism in the shadow of the great recession. ECPR Press, Colchester, pp 75–89 Brenner A, Brenner R, Winslow C (2010) Rebel rank and file: labor militancy and revolt from below during the long 1970s. Verso, London Burnham WD, Rogers J (1984) The appearance and disappearance of the American voter. In: Ferguson T (ed) The political economy: readings in the politics and economics of American public policy. M. E. Sharpe, Armonk, pp 112–139 Chaddock GR. (2009) Healthcare reform: Obama cut private deals with likely foes. The Christian Science Monitor https://www.csmonitor.com/USA/Politics/2009/1106/healthcare-reformobama-cut-private-deals-with-likely-foes. Accessed 6 Nov 2009 Charney A (1995) Present progressive. Democratic Left, March 1995 Cohn J How they did it. The New Republic. https://newrepublic.com/article/75077/how-they-didit. Accessed 21 May 2010. Davis M (1980a) The barren marriage of American labour and the democratic party. New Left Rev 124:43–84 Davis M (1980b) Why the US working class is different. New Left Rev 123:3–44 Davis M (1986a) Prisoners of the American dream: politics and economy in the history of the US working class. Verso, New York

4  The Rise of Socialism in the United States: American “Exceptionalism…

129

Davis M (1986b) The lesser evil? The left and the democratic party. New Left Rev 155:5–36 Davis M (2017) The great God Trump and the white working class. Catalyst: J Theory Strateg 1(1) Democratic Socialists of America (DSA) (2018) What is democratic socialism? https://www. dsausa.org/about-us/what-is-democratic-socialism/. Accessed 21 Nov 2018 Dirnbach E (2018) US workers are striking again. Jacobin. https://jacobinmag.com/2018/09/ strikes-work-stoppages-united-states-bls. Accessed 8 Sept 2018. Easley J (2017) Poll: Bernie Sanders Country's most popular active politician. The Hill. https://thehill.com/homenews/campaign/329404-poll-bernie-sanders-countrys-most-popular-active-politician. Accessed 9 June 2017. Eidlin B (2018) Labor and the class idea in the United States and Canada. Cambridge University Press, Cambridge Fertik T (2016) The new political arithmetic. New Labor Forum 25(3):42–47 Foner E (1984) Why is there no socialism in the United States? Hist Work J 17(1):57–80 Gaffney A, Woolhandler S, Angell M, Himmelstein DU (2016) Moving forward from the affordable care act to a single-payer system. Am J Public Health 106(6):987–988 Gilens M (2005) Inequality and democratic responsiveness. Public Opin Q 69(5):778–796 Gordon C (2017) A brief history of American health reform. Jacobin. https://jacobinmag. com/2017/07/trumpcare-obamacare-us-health-care. Accessed 25 July 2017. Hacker JS (2004) Privatizing risk without privatizing the welfare state: the hidden politics of social policy retrenchment in the United States. Am Polit Sci Rev 98(02):243–260 Hacker JS (2005) Bringing the welfare state back. In: the promise (and perils) of the new social welfare history. J Policy History 17(1):125–154 Heideman P (2016) It’s their party. Jacobin, 2016 Heideman P (2017) The rise and fall of the socialist Party of America. Jacobin. https://www.jacobinmag.com/2017/02/rise-and-fall-socialist-party-of-america/. Accessed 20 Feb 2017. Jones JM (2018) Obama’s first retrospective job approval rating is 63%. Gallup.com. https:// news.gallup.com/poll/226994/obama-first-retrospective-job-approval-rating.aspx. Accessed 15 Feb 2018. Karp M (2016) Fairfax County, USA.  Jacobin. https://www.jacobinmag.com/2016/11/clintonelection-polls-white-workers-firewall. Accessed 28 Nov 2016. Katznelson I (1978) Considerations on social democracy in the United States. Comp Polit 11(1):77–99 Katznelson I (1980) Accounts of the welfare state and the new mood. Am Econ Rev 70(2):117–122 Kelley RDG (1990) Hammer and hoe: Alabama communists during the great depression. University of North Carolina Press, Chapel Hill Kitschelt H (1999) European social democracy between political economy and electoral competition. In: Lange P, Marks G, Stephens JD (eds) Continuity and change in contemporary capitalism. Cambridge University Press, Cambridge, pp 317–345 Klehr HE (1984) The heyday of American communism: the depression decade. Basic Books, New York Kroeger T, Gould E (2017) The class of 2017. Economic Policy Institute. https://www.epi.org/ publication/the-class-of-2017/. Accessed 4 May 2017. Lichtenstein N (1997) Walter Reuther: the most dangerous man in Detroit. University of Illinois Press, Urbana Lipset SM, Marks GW (2001) It didn't happen here: why socialism failed in the United States. W.W. Norton & Company, New York Meyerson H (2018) The return of American socialism. The American Prospect. https://prospect. org/article/return-american-socialism. Accessed 11 Oct 2018. Mishel LR, Bivens J, Gould E, Shierholz H (2012) The state of working America. Cornell University Press, Ithaca Moody K (1988) An injury to all: the decline of American unionism. Verso, New York Nachtwey O, Spier T (2007) Political opportunity structures and the success of the German left party in 2005. Debatte: J Contemp Central East Eur 15(2):123–154 Naison MD (2005) Communists in Harlem during the depression. University of Illinois Press, Urbana

130

J. Birch

Newport F (2018a) Democrats more positive about socialism than capitalism. Gallup.com. https://news.gallup.com/poll/240725/democrats-positive-socialism-capitalism.aspx. Accessed 13 Aug 2018. Newport F (2018b) The meaning of ‘socialism’ to Americans today. Gallupcom. https://news.gallup.com/opinion/polling-matters/243362/meaning-socialism-americans-today.aspx. Accessed 4 Oct 2018. Pauly M (2018) Europe’s social democrats are having a hard time. EUobserver. https://euobserver. com/political/140635. Accessed 22 Jan 2018. Pew Research Center for the People and the Press (2018) The generation gap in American politics. Pew Research Center for the People and the Press. http://www.people-press.org/2018/03/01/ the-generation-gap-in-american-politics/. Accessed 1 March 2018. Pfaller A (2009) European social democracy—in need of renewal. International Policy Analysis, Friedrich-Ebert-Stiftung, Berlin Post C (2018) What strategy for the US left? Jacobin. https://jacobinmag.com/2018/02/socialistorganization-strategy-electoral-politics. Accessed 23 Feb 2018. Robin C (2018) The new socialists: why the pitch from Alexandria Ocasio-Cortez and Bernie Sanders Resonates in 2018. New York Times, August 26, 2018 Roundtable (2017) Assessing Obama, Jacobin. http://www.jacobinmag.com/series/assessing-obama. Accessed 20 Jan 2017 Schlozman KL, Verba S, Brady HE (2013) The Unheavenly chorus: unequal political voice and the broken promise of American democracy. Princeton University Press, Princeton, NJ Schmitt J, Gould E, Bivens J (2018) America’s slow-motion wage crisis: four decades of slow and unequal growth. Economic Policy Institute. https://www.epi.org/publication/americas-slowmotion-wage-crisis-four-decades-of-slow-and-unequal-growth-2/. Accessed 13 Sept 2018. Singer D (1997) Requiem for social democracy. Monthly Review, January 1997 Skocpol T (1992) Protecting soldiers and mothers: the political origins of social policy in the United States. Belknap Press of Harvard University Press, Cambridge, MA Snegovaya M (2018) When left-leaning parties support austerity, their voters start to embrace the far right. Washington Post, November 20, 2018 Sombart W, Husbands CT (1976) Why is there no socialism in the United States? Macmillan Publishers, Translated by PM Hocking Stepan-Norris J, Zeitlin M (2003) Left out: reds and America's industrial unions. Cambridge University Press, Cambridge Streeck W (2016) Social democracy’s last rounds. Jacobin. https://www.jacobinmag.com/2016/02/ wolfgang-streeck-europe-eurozone-austerity-neoliberalism-social-democracy/. Accessed 25 Feb 2016. Taylor K (2018) Western Europe’s center-left parties continue to lose ground. Pew Research Center. http://www.pewresearch.org/fact-tank/2018/09/12/swedish-election-highlights-decline-ofcenter-left-parties-across-western-europe/. Accessed 12 Sept 2018. Uetricht M (2017) The world turned upside down: ‘our revolution,’ trump triumphant, and the remaking of the democratic party. New Labor Forum 26(2):20–27 Uhrmacher K, Schaul K, Keating D (2016) These former Obama strongholds sealed the election for trump. The Washington Post. https://www.washingtonpost.com/graphics/politics/2016election/obama-trump-counties/. Accessed 9 Nov 2016. Upchurch M, Taylor G, Mathers A (2009) The crisis of ‘social democratic’ unionism. Labor Stud J 34(4):519–542 Waitzkin H (2010) Selling the Obama plan: mistakes, misunderstandings, and other misdemeanors. Am J Public Health 100(3):398–400 Weinstein J (1984) The decline of socialism in America, 1912–1925. Rutgers University Press, New Brunswick Wilson V, Rodgers W (2016) Black-white wage gaps expand with rising wage inequality. Economic Policy Institute. https://www.epi.org/publication/black-white-wage-gaps-expand-with-risingwage-inequality/. Accessed 20 Sept 2016.

Chapter 5

The Allende Government’s Attempt to Achieve Major Transformations in Chile: Lessons from Hope and Failure Sergio Bitar

This chapter1 tells one of Latin America’s unique stories: the purpose of President Salvador Allende’s government to achieve important economic and social transformations in democracy. During the Cold War, while the USA and the USSR were confronting each other in every corner of the globe, the project that was called “a transition to socialism in democracy” was taken on with great hope in Chile and closely observed by many countries of the world, especially in Europe. Even today, many continue to ask the pressing question, if that experience was feasible or was it condemned to fail. The real questions are as follows: Which and how many changes can a government implement within the frame of democratic procedures and institutions? How much flexibility did our political system have to absorb major shifts in people’s participation and economic reforms? I will attempt to answer these questions by illuminating the events of those years and drawing lessons from them, lessons that I consider to be valuable now and for the future. Almost 50 years has passed since the beginning of Salvador Allende’s government, in 1970. I lived through that period, and later I could study political experiences from Latin America, Europe, Asia, and Africa that allowed me to do a comparative analysis and draw other conclusions. During the 1970s, several Latin American democratic forces were striving to extend political and economic rights, though few countries made some progress. Many lived under dictatorships, and others had suffered recent military coups (Brazil in 1965). What was common to all was extreme poverty and a concentration of income and wealth in the hands of a few big companies, many of which were foreign and exploited natural resources. Domestic economic power was also in the hands of an oligarchy that owned the land and controlled national finances and manufactures.

 Translated from Spanish by Amanda Lubniews.

1

S. Bitar (*) Vice President Board of Advisers, IDEA, Stockholm, Sweden e-mail: [email protected] © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_5

131

132

S. Bitar

The biggest dilemma for progressive forces was to follow a path that would achieve, simultaneously, a stronger democracy and less inequality. Chile was one of the few countries with democratic traditions, stable institutions, and a system of political parties similar to Europe. During the 1930s and 1940s, a Popular Front (“Frente Popular”) was formed, by forces from the left, similar to the French Front Populaire (1936–1938). The Chilean Frente Popular led by the Radical Party (center left) expanded civil and electoral rights, public education, and social services. But the results were meager, and the extension of political rights did not generate a basic level of economic and social well-being that allowed the people in need to really exercise their political rights. For many, their rights merely remained on paper. This gap, between democratic progress and social stagnation, caused growing political pressures. Some in the left, at that time, disparaged democratic institutions that many described as a “bourgeois democracy.” Other political parties and groups believed that it was possible to transform the system without breaking the institutions. After the Second World War, and during the next two decades, several social movements emerged in Latin America in favor of the nationalization of companies exploiting their natural resources, of the agrarian reform, and of redistributive policies. The Cuban Revolution (1959) provoked a large impact, widening political horizons for change. However, its evolution toward an authoritarian system was increasingly objected. Instead, two options for change emerged in the context of the Chilean democratic tradition: one led by the Christian Democracy (“Democracia Cristiana”) and its leader Eduardo Frei, who proposed the so-called revolution in freedom, and the other articulated by the Unidad Popular, a coalition formed by socialist, communist, radical, and other minor parties, led by Allende. Both competed to modify the existing order and displace the conservatives from power. Rigid ideological convictions separated them: one was moderate, the other radical, and one backed by reformist sectors, the other by many people of Marxist thought. The biggest European parties, and even the US democrats, leaned toward the first option. Frei competed with Allende for the presidency and won in 1964. His government made important changes; however, instead of subsiding, the pressure for change intensified. In the following election (1970), Allende triumphed and launched a program that challenged the existing framework. The aim was to transform the economic and social relations of power and to do so under democracy (Allende Program, see Annex 1). The attempt was cut short by a bloody military coup in 1973. Allende was succeeded by a 17-year dictatorship, which massively violated human rights, repressed, and accentuated misery (1973–1989). Little by little, a great coalition of center-left parties arose to face the dictatorship and to re-establish democracy. That coalition (the Agreement of Parties for Democracy, “la Concertación de Partidos por la Democracia”) defeated Pinochet in a plebiscite, won all elections, was able to govern between 1990 and 2010, and then returned to government (now called “New Majority”) from 2014 to 2018.

5  The Allende Government’s Attempt to Achieve Major Transformations in Chile…

133

What Does This Experience Teach Us? Undoubtedly, the pain and experiences served the Chilean democratic forces to renew, unite, and advance. These experiences served other countries too. Spain, France, and Italy, which all tried to make substantive changes during the 1980s, looked closely to the Chilean case to reflect, to learn about the risks, and to review programs. They had to take into account a distrustful US administration, at that time more powerful than now, and avert the potential influence of the USSR, through the communist parties. Social democracies, especially that of Sweden, helped to back anti-dictatorship movements, and European Democrats in general enriched and strengthened the Chilean and Latin American debates and progressive forces. For young people who didn’t live those experiences, answering the question “Why did it fail?” will provide them knowledge to improve future programs that seek freedom and equality, with social participation, and environmental sustainability. Achieving that synthesis is a challenge of progressive thinking, yesterday and today.

Valuing Memory It’s surprising to realize how memory changes as time goes by. Every process is seen and judged differently by the generations that follow. In Chile, for example, the public opinion about Salvador Allende and his government has varied enormously. Those of us that originally supported him suffered repression, exclusion, and loss of prestige. Then, the dictatorship told a distorted and devastating story that hammered away on media for 17 years, in a time before the Internet. Twenty-five years after the start of democracy, around 2015, the change in opinion was already surprising. In a contest organized by national television, participants were asked who the most important politician in history was, and Allende was voted the winner.

From Where Does One Observe History? What is the true history? Certainly, there isn’t just one interpretation, and that’s why it is essential to avoid the imposition of the vision of the winners. We must also record the stories of those who propelled the process of changes with Allende and then suffered political defeat and repression. By explaining this angle of history, one can draw lessons on how to govern better to deepen democracy and reduce inequality. History is an antidote against repeating the same errors and also a warning against “present-ism,” a distortion incurred by those who judge the events of yesteryear without knowing the historical circumstances and the forces that were then at play. Likewise, history and memory are an antidote against the pretension of the

134

S. Bitar

repressors to forget what happened or to justify their crimes. Historical knowledge helps to avoid oversimplification and polarization and thus to understand the roles played by different social actors. When starting that new experience, full of enthusiasm, it would have been convenient to know well the history prior to President Allende’s government and that of other countries that attempted similar processes. It would have warned about the risks and shed light on the best path. Now, for the future, we can leave abundant information and testimonies. New technologies enable us to record facts and put them within reach for those who are interested. If we agree that the military coup (1973), and the subsequent dictatorship (1973–1990), is the most traumatic event in Chile’s history, there is a political and moral need to maintain those memories presently, so as to avoid horrors and errors and to better organize a democratic society where we can all live in. When I wrote the book, El Gobierno de Allende, published initially in Mexico (“Transición, socialismo y democracia: la experiencia chilena,” Siglo XXI, 1978)1, I attempted to answer a burning question: “Was Allende’s transition to socialism in democracy, as it was called then, viable?” During our imprisonment in Dawson Island (a concentration camp south of the Magellan Strait, where the dictatorship retained political leaders as prisoners, in particular, the former ministers of the Popular Unity), we formed a group with Clodomiro Almeyda, Carlos Matus, Orlando Letelier, and three or four more friends to analyze why did we fail. Was the coup inevitable? We took notes, some of which were able to escape the censorship, and later served to write books and articles. After a year in prison, I was expelled from Chile and had to start my life in exile. Thanks to an invitation from Harvard University, where I had studied years before, I was able to reunite with my family, and we began to normalize our lives. In those years, the essential thing was to survive spiritually and physically. In the midst of daily worries, the question about the reasons for the collapse of Allende’s government and the Chilean tragedy continued to hover in my mind. Answering this question would give the strength to address the upcoming challenge: how to recover democracy and freedom and to propel social changes, without regressing.

Three Main Questions I will address three questions: • Was the Allende government viable? • What happened during his government that led to the military coup? • What did we learn from this tragedy for the future? Here are my reflections, with their inevitable limitations.

5  The Allende Government’s Attempt to Achieve Major Transformations in Chile…

135

Yes, Allende’s Program Was Viable A long and active social process preceded Allende’s triumph in the 1970 presidential election. A growing number of men and women struggled to acquire their ­political rights, participate in democracy, and improve their economic situation. New marginal social groups were fighting for inclusion. Most citizens considered unacceptable the enormous poverty and inequality. Social, rural, and urban organizations and trade unions, though weak, were growing. The political parties of the left and the Christian Democracy (“Democracia Cristiana,” DC) were expanding and promising major social and economic changes. A majority of Chileans considered it necessary and possible to build a better society. The political conditions were also evolving rapidly. At that time, the beginning of the 1970s, copper was controlled by North American companies, and most of the agricultural land was in the hands of a few “terratenientes.” Overcoming that concentration of wealth and income was inescapable. Despite the national and international obstacles present at the time, the process propelled by President Allende was viable. Changes launched during the Frei administration (1964–1970), agrarian reform, social organization, and copper “Chilenization,” were underway. So pursuing and accelerating that course was easier for the emerging Popular Unity coalition. The agrarian reform had already begun in 1964, and the so-called Chilenization of copper was accomplished. The state acquired 51% of the ownership of the mining companies held by two large North American firms, Braden Copper Company and Anaconda Copper Company. At the same time, many “latifundios” had been expropriated, and new laws to promote peasant and poor urban dweller organizations (sindicalizacion campesina y “Juntas de vecinos”) had already begun. All of this helped to start and deploy Allende’s program. One important political obstacle, however, was the struggle between the three main political actors. Right, center, and left had similar electoral percentages. Ideological debates were rampant, and such furor hindered dialogue and inhibited pragmatism. In addition, during that Cold War period, the US government interpreted all the facts with the same lens: the confrontation with the USSR. The Chilean and international conservative groups launched a campaign to denounce that Allende would transform Chile into a “second Cuba” and that this would favor the Soviet Union. Any attempt at socioeconomic transformation was framed with this logic, which ended up antagonizing all the political processes of change in Latin America. Little did matter the dramatic situation of Chilean poverty and underdevelopment. In spite of those interferences, the process of transformation in democracy proposed by the Popular Unity (“Unidad Popular,” UP) was viable at the beginning. If one analyzes the so-called forty measures (“cuarenta medidas”) proposed by Allende in his campaign (see Annex 2), one will agree that most of them were achievable. There was an organized political and social force and an institutional framework capable of channeling solutions through democratic means. Furthermore, when comparing this program with that of the Christian Democratic candidate, Radomiro Tomic, in whose campaign I participated, one could assume that a broad

136

S. Bitar

convergence was possible. Tomic himself, as well as the progressive wing of the DC, spoke about the unity of the people. The DC agreement to vote for Allende in Congress was a positive sign. In the September 1970 election, Allende won the first majority, with 36.6% of the vote; Alessandri, the candidate for the right-wing ­parties, obtained 35.3%, and the Christian Democrat, Tomic, 28.1%. The Constitution did not include a second round, and it was the Congress who had to settle between the first two majorities. It was agreed then, between the DC and the UP, to sign a pact of constitutional guarantees, which reaffirmed the fundamental freedoms of expression, assembly, education, and workers’ rights. After that, the National Congress proclaimed Allende as President of the Republic. So, why weren’t wider agreements reached to avoid the military coup?

Why the Program Became Unviable The Chilean right and the Nixon administration attempted to thwart that experience from its outset. The intervention by the US President set immediately in motion the US machinery to impede the assumption of Allende and perpetrate his later ­overthrow. In parallel, the Chilean conservative forces regrouped early to counterattack and remove the government. Nonetheless, those actions weren’t sufficient by themselves to topple the government. The international and national adversaries wouldn’t have caused such destructive effects if the government and the leftist parties hadn’t erred in their strategy and policies, thus facilitating the adversaries’ efforts to bring them down. Eluding self-criticism and just blaming others for the coup would have been harmful. A new thinking was needed to achieve the reunification of democratic forces and defeat the dictatorship.

Five Factors That Deviated the Course from Originally Planned The first factor was the rapid spread of spontaneous initiatives by some organized groups that surpassed the government’s plans, with takeovers of agricultural land and industries not included in the program. Government officials and parties started ­losing control. At first, such actions were supported by some sectors of the Socialist Party and later by radicalized groups that sought to accelerate the process. While events sped up, the opposition parties and the conservative press launched a campaign accusing a hidden intention of the Popular Unity coalition: total economic control to acquire later total political control. A second factor was the erroneous economic management along with huge fiscal imbalance. Despite being warned about repeatedly, those decisions could not be stopped, due to a lack of political unity and disputes. In fact, some members of the coalition held the idea that there were two distinct spheres, financial and real, and

5  The Allende Government’s Attempt to Achieve Major Transformations in Chile…

137

the “real” economy was the most important, while financial aspects were secondary. Therefore, financial, monetary, and fiscal imbalances were underestimated. Discussions were intense. An anecdote could illustrate the mood at the time. Before the Christian Left Party (Izquierda Cristiana, IC) became a member of the UP coalition, at the end of 1971, I was asked to gather a team of economists and prepare a report of the economic situation, to be handed to President Allende, including policy proposals that we considered urgent. Before the meeting with the President, I presented our conclusions to the IC political directorate. At the time, end of 1971, the economy had grown, and few realized that the fiscal imbalances would create negative effects in a few months. If such deficits were not reduced, they would later generate shortages and scarcity. In 1972, President Allende invited me to form part of an economic advisory committee, which was composed of two other people, Sergio Ramos from the Communist Party and Alexis Guardia from the Socialist Party. The three of us confirmed that the picture was becoming more alarming by the day, and we reported these analyses regularly (Table 5.1). During the first year of government, 1971, growth was high thanks to some idle productive capacity, which allowed to satisfy the expanding consumer’s demand. In the following years, however, production did not grow, while demand continued to rise. The figures for this period, illustrate the average of three years, the third being very different from the first, with lower production and higher inflation. In retrospect, it became evident that the government of the UP was creating a true economic pincer; on the one hand, it stimulated an excessive expansion of ­consumption, and, on the other hand, national production suffered a decline, as a consequence of the rapid nationalization of copper and the acceleration of the agrarian reform. On top of it all, the US government sharpened the crisis, blocking international financing. In the Table 5.1  Comparison of key macroeconomic variables, 1959–1973

GDP growtha Growth of exportsb Rate of inflationc Unemployment rate Real wages (1970 = 100) Gross (% of GDP)d Government surplus (% of GDP)

Alessandri 1959–1964 3.7 6.2 26.6 5.2 62.2 20.7 −4.7

Frei Montalva 1965–1970 4.0 2.3 26.3 5.9 84.2 19.3 −2.5

Allende 1971–1973 1.2 −4.2 293.8 4.7 89.7 15.9 −11.5

Sources: Central Bank and the Budget Office (DIPRES): Jadresic 1986, 1990; Marcel and Meller 1986; Larrain 1991 Note: Annual growth rates of GDP and exports; average of annual rates of inflation and unemployment http://www.cieplan.org/media/publicaciones/archivos/27/Capitulo_1.pdf a Until 1985 in 1977 pesos b Exports of goods and services in 1977 pesos c From December to December d Gross fixed investment

138

S. Bitar

following two years, 1972 and 1973, the economic pinch grew ever tighter, and when an attempt was made to correct it, the political capacity to apply new measures had already been lost. A third factor was the division between the social and political forces. I refer, specifically, to the conflict between the left-wing parties and the Christian Democracy and also the animosity between Frei and Allende. As the government advanced and the political struggle intensified, groups within the Socialist Party argued in favor of radicalization. And the Revolutionary Leftist Movement (Movimiento de Izquierda Revolucionaria, MIR), outside the UP, pushed to accelerate the pace and exacerbated disputes. This extreme leftist groups were not ­confronted politically by the UP. The Communist Party sought to prevent further polarization, offering its support to President Allende, but the Socialist Party did not behave in the same way. Despite all of these obstacles, the UP obtained 44% of the votes in the parliamentary election in March of 1973, defeating the strategy of the right, which allied this time with DC, wanted to impeach Allende, ending his government by legal means. After the election, the conservative opposition modified its strategy and decided to proceed with force, resorting to involve the military. The DC began to swing to the right, and a part of the Radical Party left the UP coalition. The polarization was irrepressible. Attempts to amend, in 1973, did not bear fruit. Although in 1973 the President announced a new economic and fiscal policy to contain the deficit, upon installing a new cabinet where I became Minister of Mining, it was not possible to impose that policy, nor was it possible to reach an agreement with the DC to define the private, state-owned, mixed properties and private ownership. The issue of ownership was a central theme confronting the main political actors. A fourth explanatory factor was the Chilean left unawareness about international politics in the USA, how it was defined, and who will operate. The North American political system delivered to the President a power without a counterweight on external matters. The institutional mechanisms or “checks and balances” do regulate and protect internal democracy but did not, and do not, work on the international policy decision-making. In 1971, when the Chilean Parliament unanimously approved the nationalization of copper and the Executive decided on a zero compensation to nationalized foreign companies, discounting from the value of the assets the so-called excessive profits from previous years, the US companies and the US government unleashed a campaign and mobilized their international financial power against the Allende government. Foreign copper companies managed to get some courts to order the seizure of Chilean copper shipments when they arrived at foreign ports, in order to avoid what those companies considered “expropriation without payment.” They managed to cut off the flow of resources provided by international financial organizations, the World Bank, the International Monetary Fund, and the Inter-American Development Bank. The Chilean decision to discount excess profits was justified. But it was obvious that such measures would have high repercussions, because the practice could become a precedent in other countries. As can be imagined, transnational firms would do everything within their reach to prevent it. In those critical moments,

5  The Allende Government’s Attempt to Achieve Major Transformations in Chile…

139

Allende found no support from the USSR or China. Those countries didn’t believe that a process of transformation in democracy, with full freedoms and without counting on the control of the Armed Forces, could survive. The Soviets felt that this experience was unsustainable, and China was shaken by Mao’s Cultural Revolution. The fifth reason was that the Popular Unity coalition and its parties did underestimate the power and influence of the Chilean conservatives. Their power far transcended their votes in the Congress. They exerted a great influence over the military, especially the Navy, and over the media, owned by private groups. They had an ideological ascendancy over the middle strata, especially when they felt threatened, in particular small entrepreneurs. Fear helped the conservative forces to attract them and to broaden opposition. Simultaneously, and paradoxically, both the left and the DC assumed that in the armed forces the respect of the Constitution was unchallenged and that the commanders-­ in-chief, Generals Prats and Schneider, represented all the military. At the beginning of Allende’s government, it was reasonable to assume that the risk of a military intervention was minimal. The common sense of the majority, myself included, was that democratic institutions were resilient; like the Andes Mountain range, nothing and no one could interrupt the Chilean democratic life. We believed that dictatorships were a Central American disease to which Chile was immune. That myth quickly collapsed. General Schneider was assassinated in 1970 by a ­far-­right group which sought to prevent the assumption of Allende, and General Prats was assassinated in 1974, in Buenos Aires, after the coup, by a command issued by the dictatorship. One could ask why Allende did not negotiate at the end, in order to avoid the coup. But it is difficult to place oneself in this situation when everything was changing so rapidly. My interpretation is that Allende was aware of such a scenario but weighed it against the risk of splitting the Popular Unity coalition. In a tense and extremely polarized situation, largely due to sabotage by the right, any negotiation would have been a kind of surrender. Instead, Allende opted to call for a referendum, so that the citizens would decide. But the day for the announcement never arrived. The instigators of the coup found out that the President intended to announce that referendum the next morning, on September 11, 1973, and advanced the date of the coup to prevent a referendum. Allende had an acute sense of history and would not expose himself to betraying his democratic spirit, yielding to the coup, nor to compromising his political integrity and his commitment to the popular sectors that believed in him. In spite of the facts described, my conviction is that both the path initiated and the proposed program of transformation in democracy were viable at the beginning. This became progressively unfeasible, due to multiple conflicts and events, and the government ended losing control and the capacity to govern. I am aware that it is difficult to measure viability; there is no manual. The art of politics and leadership consists precisely in creating feasibility, forging a path, avoiding the pitfalls, and knowing your own strengths as well as your adversaries. The unfortunate outcome was not predetermined.

140

S. Bitar

Main Lessons from a Unique Historical Event What lessons did the Allende government leave us with? What did we learn from 17 years of dictatorship that followed that tragedy? The Chilean democratic forces learned how to fight against the dictatorship and how to forge a coalition that was capable to promote a great, continuous period of democratization and national progress, for more than two decades, 1990–2010 and 2014–2018. If I had to synthesize the chief lessons, I would say, first, that every democrat must be alert daily to protect and perfect democracy and to achieve greater social justice. Political parties and organizations must educate so citizens take care of keeping freedoms, safeguard democratic procedures, reject hatred, cultivate diversity and tolerance, and avoid polarization. During the fight against the dictatorship, we learned how important it is to create institutions inspired by these values and to establish a culture of human rights. Another evident lesson is that without a political majority, it is not possible to push for reforms that last and prevent regressions to authoritarian governments. Conforming a political coalition in harmony with social movements requires ­dialogue and reconciling a range of actors in favor of the desired reforms. We then learned, with enormous human suffering, that reforms cannot be improvised or simply announced. They should be well studied and translated into technically and politically viable programs. Maximalism and radicalization should be ruled out, and reformist parties must accumulate sufficient political and social capacity to democratically displace the forces of the status quo. A gradual process of reforms, which is supported by a majority of citizens, is always most fruitful. Those that want immediate changes, with more voluntarism and ideology than with intelligence and capacity, will not get very far, or may regress, when they do not have the strength to consolidate advancements. The economic crisis left us with another fundamental lesson. Macroeconomic imbalances harm the poorest and create favorable conditions for the adversaries of the changes. It is essential to carry out an economic and fiscal management without imbalances and without unfeasible promises, avoiding inflation and scarcities of basic goods and implementing policies that prioritize social inclusion and the reduction of inequalities, without populism. This rule has been followed by all of the progressive democratic governments in Chile since 1990. We realized how essential it was to understand the international context, being aware of potential geopolitical conflicts. That’s why, after the coup and already in exile, many of us dedicated ourselves to study the US political system and the ­formation of its international policy. We saw, firsthand, that a lack of knowledge had severe consequences. All the more reason that today it is essential to know about global trends and changes, to be able to identify the dominating powers and their behavior and the consequences of the dispersion of global power and of the emerging conflict between China and the USA. The experience of the UP also revealed how little political leaders knew about the military’s mentality and behavior. At that time, many officers had been trained in the Panama school, of the Southern Command of the US Army. They were e­ ducated in

5  The Allende Government’s Attempt to Achieve Major Transformations in Chile…

141

the doctrine of national security that emphasized the fight against an “internal enemy.” The military’s perception of their role was influenced by the local conservative sectors and by the Nixon administration to a degree mostly unknown by the left-wing parties. Based on these realities, once democracy is reinstalled, governments should establish a clear military policy to ensure subordination to the civil power. This took many years in Chile, and a firm hand was indispensable to overcome turbulent events. Today, current political conflicts in many countries will not be solved through military coups, but still, supervision, education, and norms are needed to guarantee that professional military respect the Constitution. There is a risk when civilians isolate or neglect the military institutions. This attitude could enhance their autonomy and weaken their necessary subordination to democratic institutions. Over the years, and after the deep suffering of so many families, in order to combat a dictatorship, we knew that regrets were not enough and the spirit of revenge was harmful. For achieving democracy, it was vital to convey the conviction of a brighter future. In fact, the “NO” campaign against Pinochet picked up on that lesson. The force came from spreading an optimistic message, a future founded on values of freedom, justice, respect for human rights, and economic welfare for all. What came later, once the dictatorship ended, has been the best period of ­progress for Chileans: recuperating democracy and making major reforms, during 24 years of democratic governments (1990–2010, 2014–2018), inspired in progressive principles.

History and the Future The exciting and tragic experience of the Allende period marked our lives. However, the question that many Chileans still have today is whether the lessons have truly been learned and how the traumatic experience of the dictatorship will be engraved in the thoughts and actions of future generations. The challenge is to ensure that our memories do not disappear along with those who lived them. How are memories transmitted and processed by the following generations? If the experiences of a generation simply vanish, society is exposed to repeat errors and horrors. That’s why it’s essential to transmit and teach history to the new generations. Memory should be disseminated through multiple channels: art, music, painting, theater, architecture, museums, films, poems, literature, essays, testimonies, and history. Knowledge of history is essential for the formation of political leaders. An ahistorical view may induce many rushed youth to think that history begins when they arrive. Ignorance feeds arrogance and belittles what others have accomplished. If one does not understand the historical context, one is condemned to repeat the same mistakes or to fall into mere testimony, without achieving any social progress. In politics, it is not sufficient to simply declare what you want. If you only affirm your intentions, without analyzing how to achieve them and understanding the powers at play, you will not get very far. A long-term strategy, consulted and shared with social organizations and strong political parties and coalitions, is a requisite for reaching, at least in part, what has been promised.

142

S. Bitar

The capacity of political parties to awake young people’s public vocation has been weakened. Communication technologies offer new opportunities and also present risks. Parties have lost attraction, and citizens are more empowered and tend to ­establish a direct connection with those governing. The avalanche of information, its immediacy, and uncertainty represent a tremendous challenge. New technologies could be a powerful instrument to train the new democratic leaders of the future. Young people will face unknown but challenging events, and they must be better prepared for it.

Annex 1 Extracts from the Popular Unity Government Program What Has Failed in Chile Is the System It is a system which does not correspond to present-day requirements. Chile is a capitalist country, dependent on the imperialist nations and dominated by bourgeois groups who are structurally related to foreign capital and who cannot resolve the country’s fundamental problems—problems which are clearly the result of class privilege which will never be given up voluntarily. A large number of Chileans are underfed. According to official statistics, 50% of children under 15 years of age are undernourished. This affects their growth and limits their learning capacity. This shows that the economy in general and the agricultural system in particular are incapable of feeding Chile’s population in spite of the fact that Chile could support a population of 30 million people right now—that is, three times the present population. The Strengthening of Democracy and Working Class Progress The Popular government will guarantee the exercise of democratic rights and will respect the social and individual liberties of all sectors of the population. The freedom of worship, speech, press, and assembly, the inviolability of the home, and the right to unionize will be made effective, removing the present obstacles put up by the dominant classes to limit them. In order to put this into practice, the unions and social organizations formed by manual workers, white collar workers, peasants and rural workers, shanty town dwellers and inhabitants of low-income neighborhoods, housewives, students, professional people, intellectuals, craftsmen, small and medium businessmen, and other groups of workers will be called upon to participate in government decisionmaking at the relevant level. For example, in the social security institutions, we will establish a system of management by the contributors themselves, ensuring that the government bodies are elected democratically and by secret ballot. As for firms in

5  The Allende Government’s Attempt to Achieve Major Transformations in Chile…

143

the public sector, their governing committees and production committees must include direct representation of manual and white collar workers. The Construction of the New Economy The central policy objective of the united popular forces will be the search for a replacement for the present economic structure, doing away with the power of foreign and national monopoly capital and of the latifundio in order to initiate the construction of socialism. The process of transformation in our economy will begin with the application of a policy intended to create a dominant state sector, comprising those firms already owned by the state and the business which are to be expropriated. As a first step, we shall nationalize those basic resources like large-scale copper, iron, and nitrate mines and others which are controlled by foreign capital and national monopolies. These nationalized sectors will thus be comprised of the following: 1 . Large-scale copper, nitrate, iodine, iron, and coal mines 2. The country’s financial system, especially private banks and insurance companies 3. Foreign trade 4. Large distribution firms and monopolies 5. Strategic industrial monopolies In carrying out these expropriations, the interests of small shareholders will be fully safeguarded. Intensification and Extension of the Agrarian Reform In our view, the agrarian reform process should be complementary to, and simultaneous with, the overall transformation which we wish to promote in the country’s social, political, and economic structure, such that its implementation is inseparable from the rest of our overall policy. Existing experience in this matter has shown up gaps and inconsistencies which suggest a reformulation of the policy for the distribution and organization of land ownership on the basis of the following guidelines: 1. Acceleration of the agrarian reform process, expropriating the holdings which exceed the established maximum size according to the characteristics of the different regions, including orchards, vineyards, and forests, without giving the landowner the priority right to select the area to be retained by him. 2. The immediate cultivation of abandoned and badly exploited state lands. 3. Expropriated land will be organized preferably on the basis of cooperative forms of ownership. The peasants will be given titles, which confirm individual ownership of the house and garden allocated to them, and the corresponding rights over the indivisible land of the cooperative as long as they continue to be members.

144

S. Bitar

When the circumstances warrant it, land may be allocated to individual peasants, with the organization of work and marketing being promoted on the basis of mutual cooperation. In addition, lands will be allocated to create state agricultural enterprises using modern technology. 4. Minifundia properties will be reorganized by means of progressively cooperative forms of agricultural work. Small and medium peasants will be given access to the advantages and services provided by the cooperatives operating in their geographical area. 5. The defense of the indigenous Indian communities which are threatened with usurpation of their land will be ensured, as will be the democratic conduct of these communities and the provision of sufficient land and appropriate technical assistance and credit to the Mapuche people and other indigenous groups. The Popular Unity Government Foreign Policy The assertion of full political and economic autonomy for Chile. The establishment of diplomatic relations with all countries, irrespective of their ideological and political position, on the basis of respect for self-determination and in the interests of the Chilean people. Ties of friendship and solidarity will unite Chile with dependent or colonized countries, especially those who are fighting for their liberation and independence. The promotion of strong inter-American and anti-imperialist sentiments based on foreign policies which are the expression of entire nations rather than on policies formulated solely by foreign ministries. Efforts by nations to achieve or maintain self-determination will be given decided support by the new government as a basic condition for the existence of international peace and understanding. As a consequence, our policy will be one of alertness and action in defense of the principle of nonintervention, and we shall resist any attempt by the imperialist nations to discriminate, pressure, invade, or blockade. We shall reinforce our relationships, trade, and cultural exchanges and friendship with socialist countries.

Annex 2 First 40 Measures of the Popular Unity Program 1. An End to Enormous Salaries! We shall put a limit on the high salaries earned by those appointed directly by the President. We shall not allow people to hold simultaneously various paid posts such as advisory posts, directorships, and representatives.

5  The Allende Government’s Attempt to Achieve Major Transformations in Chile…

145

We shall do away with administrative promoters and political mongers who use their official positions to promote their own ends and the interests of their friends and business and political acquaintances. 2. More Advisors? No! All civil servants will belong to the normal staff grades, and none will be exempted from the administrative statute’s conditions. We will not have any more advisors in Chile. 3. Honest Administration. We shall put an end to favoritism and grade jumping in the public administration. It will not be possible to remove civil servants from their posts without due cause. Nobody will be persecuted for his or her political or religious beliefs. We shall ensure the efficiency and honesty of government officials and the civil treatment of the public. 4. No More Unnecessary Foreign Trips. Foreign journeys by government officials will not be allowed, except for those that are necessary in Chile’s interests. 5. No More Use of Government Cars for Pleasure. Under no circumstances will the government’s cars be used for private purposes. Those vehicles, which are available, will be used in the service of the public: for transporting school children, for transporting people requiring medical attention from low-income housing districts, or for police duties. 6. The Civil Service Will Not Enrich Its Employees. We shall establish strict control over the incomes and property of high-level public officials. The government will no longer allow public officials to use their position to enrich themselves. 7. Fair Pensions. We must put a stop to millionaire-level pensions whether they be for parliamentarians or any other public or private group, using the resources to improve pensions at the lower end of the scale. 8. Fair and Timely Retirement. We will give retirement rights to all people over 60 years of age who have been unable to retire because their contributions have not been paid. 9. Social Security for Everyone. We shall incorporate into the Social Security System all people in small- and medium-scale commerce, industry, and farming and independent workers, artisans, fishermen, small-scale miners, and housewives. 10. Immediate and Full Payment of Pensions and Benefits. We shall finally pay the increases in pensions due to retired members of the Armed Forces, and we shall arrange for the proper and due payment of retirement pensions and widow’s pensions under the Social Security System. 11. Protection of the Family. We shall set up a ministry for the protection of the family. 12. Equal Family Allowances. All family allowances will in the future be fixed at the same level. 13. Children Are Born to Be Happy! We shall provide free education, books, materials, exercise books, etc., for all children throughout the basic level. 14. Better Meals for Children. We will provide breakfast for all children in the basic level and lunch for those children whose parents cannot provide it.

146

S. Bitar

15. Milk for All Chilean Children. We guarantee a daily ration of half a liter of milk to all Chilean children. 16. Family Welfare Clinics in All Poor Areas. We shall set up family welfare clinics in all working class neighborhoods, slums, and squatter settlements. 17. Real Holidays for All Chilean Students. The best pupils selected from the basic educational level throughout the country will be invited to the Presidential Palace at Vina del Mar. 18. Control of Alcoholism. We shall overcome alcoholism, by providing possibilities for a better life and not by repressive means. We shall stop abuse of the drinking laws and licensing regulations. 19. Housing, Lighting, and Drinking Water for All Chileans. We shall undertake an emergency plan for the rapid building of houses. In addition, we shall ensure the provision of drinking water and electric lighting in every block. 20. No More Readjustable “CORVI” Payments. CORVI, the Housing Corporation’s dividends, and the loan repayments it receives will no longer be readjusted in line with rising prices. 21. Fixed Price Rents. We shall fix rents at an amount corresponding to 10% of family income as a maximum. Key rights will be abolished immediately. 22. Vacant Sites, No! Housing, Yes! We shall build on all disused public, semipublic, and municipal sites. 23. Property Taxes on Mansions Only. We shall free from the payment of property taxes the owners of dwellings with a surface below 80 square meters as long as the owner lives there permanently and the house is neither a luxury house nor a beach villa. 24. A Real Agrarian Reform. We shall intensify agrarian reform, which will also benefit medium- and small-scale farmers, minifundia holders, sharecroppers, employees, and temporary rural laborers. 25. Medical Attention Without Bureaucracy. We shall eliminate all the bureaucratic and administrative obstacles, which hinder or make difficult the provision of medical attention to contributors and unemployed people. 26. Free Medical Attention in Hospitals. We shall abolish payment for medicines and examinations in hospitals. 27. No More Artificially High Prices for Medicines. We shall drastically reduce the price of medicines by lowering the import duties and taxes on the raw materials. 28. Scholarships for Students. We shall establish the right of all good students to obtain a scholarship for the basic and middle school levels and university education, taking into account performance and the family’s economic ­ resources. 29. Physical Education and Popular Tourism and Holidays. We shall promote physical education, and we shall establish sports fields in schools and all neighborhoods. Every school and low-income urban or rural housing district will have a sports field. We shall organize and promote low-income tourism and holidays.

5  The Allende Government’s Attempt to Achieve Major Transformations in Chile…

147

30. A New Economy to Put an End to Inflation. We shall increase the production of items of popular consumption. We shall control prices and prevent inflation by immediately setting up the new economic structure. 31. No More Links with the International Monetary Fund. We shall renege the commitments with the International Monetary Fund. We shall put an end to the continual shameful devaluation of the escudo. 32. No More Taxes on Food. We shall stop increases in taxes, which affect basic food necessities. 33. Abolition of the Sales Tax. We shall abolish the sales tax and replace it by another more just and expedite tax system. 34. No More Speculation. We shall severely penalize economic crimes. 35. No More Unemployment. We shall ensure the right of all Chileans to work, and we shall prevent unjustified dismissals. 36. Work for All Chileans. We shall immediately create new sources of employment by implementing plans for public works and house building, by setting up new industries, and by carrying out development projects. 37. The Riot Police Unit Will Be Disbanded. We shall ensure law and order in lower- and middle-class residential areas and the protection of the individual. The police and detectives will be restricted to crime prevention duties. We shall disband the Riot Police Unit incorporating its members into the normal duties of police vigilance against delinquency. 38. An End to Class Justice. We shall set up a rapid and free legal procedure, in which the neighborhood committees will cooperate, to examine and resolve special cases such as quarrels, ruffianism, abandonment of the home, and acts that disturb the community. 39. Legal Advice Bodies in All Neighborhoods. We shall set up legal advice bodies in all low-income neighborhoods and districts. 40. The Creation of a National Institute of Art and Culture. We shall create a National Institute of Art and Culture and schools for training in the arts in all districts. Robinson Rojas Archive: http://www.rrojasdatabank.info/chile1.htm

Further Reading http://www.dalestory.org/LATINAMERICA/Chile/Allende/WhyAllendeFailed,Rosenstein,1971. pdf Chile 1970–1973: Economic development and its international setting: self-criticism of the u­ nidad popular government’s policies. Sideri, S.; Evers, Ben (eds). The Hague; Boston/London: M. Nijhoff, 1979. (Series on the development of societies/Institute of social studies) Chile and the United States: declassified documents relating to the military coup, September 11, 1973 By Peter Kornbluh, National Security Archive Electronic Briefing Book No. 8 Chile: experiment in democracy/Sergio Bitar; translated by Sam Sherman. Philadelphia: Institute for the Study of Human Issues, c1986. https://trove.nla.gov.au/version/26672668

148

S. Bitar

Covert action in Chile 1963–1973, Senate Select Committee staff report of the Select Committee to Study Governmental Operations with respect to Intelligence Activities. United States Senate. US Government Printing Office 1975. https://www.intelligence.senate.gov/sites/default/ files/94chile.pdf Muir R, Angell A (2005) Salvador Allende: his role in Chilean politics. Int J Epidemiol 34(4):737– 739. Published by: 28 April 2005. https://doi.org/10.1093/ije/dyh175 Rosenstein-Rodan PN (1974) Why Allende failed. Challenge 17(2):7–13. Published by: M.E. Sharpe, Inc. http://www.jstor.org/stable/40719194 The breakdown of democratic regimes, Chile, Valenzuela, Arturo, Johns Hopkins University Press, 1978. https://quod.lib.umich.edu/cgi/t/text/textidx?c=acls;cc=acls;view=toc;idno= heb02805.0001.001 Why Allende had to die. by Gabriel García Márquez. New Statement America. 3 april 2013. ­https://www.newstatesman.com/world-affairs/2013/04/why-allende-had-die

Chapter 6

Reflections on Socialism Paul Singer

The Utopia Socialism is a utopia in the strict sense of the word: a vision of society that currently does not exist anywhere. However, it is not a figment of someone’s imagination (like the classic ‘utopias’); it is the result of the struggles of social movements and political parties over the last two centuries, at least. In this sense, it is a utopia under construction, a unifying target of countless struggles for liberation or emancipation. Socialism can be summed up as a society with full equality and freedom for all its members. It is a democratic society where suffrage is universal, government is representative and citizens have the same rights and duties as well as the same access to the means of production. In political terms, it is something like modern democracies, where indirect and direct participation of the citizens in the decisions of the power structures is under continuing construction. In economic terms, it is a society in which producers have the opportunity to associate as equally as they wish. What socialists obviously want is a society in which there are no employers and no employees, where the means of production are not the private property of a small minority of people, while the vast majority are deprived of them and therefore rely on the owners of the means of production to survive. Nevertheless, the experiments in ‘real socialism’ tried to impose a single ‘one-size-fits-all’ social relation of production—employment in state-owned enterprises—while banning all others. This way, one of the fundamental human freedoms, i.e. freedom of association, had been abolished due to the need to prevent people from hiring others. This is a crucial issue. Socialism will only be genuinely democratic if it is the wish of all members of society. It cannot be imposed by force or by law, even if the The author was deceased at the time of publication. Translation from Portuguese made by Cláudia Álvares Gabão Melo P. Singer (*) Former Secretary of Solidarity Economy at the Ministry of Labor, São Paulo, Brazil © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_6

149

150

P. Singer

majority want socialism to prevail. Just as in capitalism, where nothing stops citizens from coming together to cooperate in the economic field on an equal basis, this freedom must be respected in socialism. This is important for many reasons, the most important of which being the so-called free association of producers (a synonym of socialism) still at the experimental stage and currently taking different forms. Preventing this ongoing experiment from freely taking place in socialism would mean depriving the organization of economic activities of making any progress. It would mean choosing a single mode of solidarity economy (socialism at the micro-level) while productive forces evolve, and due to this evolution, these forces will also certainly require changes in the social relations of production. Thus, socialism means an economy organized in such a way that anyone or any group of people has access to credit in order to purchase the means of production they need to carry out activities of their choice. This has obvious implications for the elimination of poverty, social exclusion and, therefore, the need for people to find a job in order to earn a living. In principle, nobody will be forced to become an employee since everyone can be self-employed or work in association with others. Nevertheless, this right to autonomy will necessarily imply the need for each individual or collective producer to find a buyer for his or her production who is ready to pay above the costs involved, with a remainder that would allow producers a decent standard of living. The socialist economy will then be market-based but not free-market-based. The state will have to intervene in the market functioning to redistribute income, taking from those who earn more and providing everybody with a minimum income that ensures that nobody is deprived of consuming essential goods and services. Considering the current economy, it is indispensable to preserve market mechanisms for distributing goods and services, except for public ones such as sanitation, communications, healthcare, education and so on. This means that producers will be responsible for the good quality and low price of the goods they place on the market. If they are overtaken by competitors, they will have to start over, possibly by joining better qualified groups of people. In such conditions, it is quite possible for some workers to prefer the status of being employed, to risking competition. On the other hand, if there are people who want to take on such responsibility without sharing it with their co-workers, there might well be capitalist modes that survive under socialism. This is very likely, according to the history of transitions between socio-economic systems. The freedom of choice between socialism and capitalism will be essential to ensure that the option for socialism is really free and not imposed due to lack of alternatives.

The Pathways to Socialism The vision of socialism presented here stems from the values that have always been supported by socialists as well as the lessons of two centuries of struggle and attempts at socialism. Its basic premise is that it is historical and subject to change,

6  Reflections on Socialism

151

as the evolution of capitalism itself modifies the specific conditions upon which socialism will have to be built. The classic formulation of this premise is that capitalism will have to be aufgehoben, i.e. overcome but selectively integrated in the new production mode. The technology available in socialism, for example, will depend on the scope of knowledge inherited from capitalism, at least for a while. It turns out that the fight for socialism produces results that modify capitalism itself. In the political field, the main socialist achievement is democracy, which for the first time in history is practised in most countries and in many different ways. The practice of democracy allowed for the institutionalization of labour and peasants’ movements, as well as women’s, oppressed and discriminated groups of people liberation movements. Democracy enabled the establishment of many social rights, such as the right to organize in trade unions and to strike and also the right to social security systems, which are now being the target of neoliberal attacks. Some achievements have been lost. In macroeconomics, safeguarding full employment in industrialized economies has been abandoned, and as a result, mass unemployment has reappeared, threatening the very existence of trade unions and many of their achievements today. In the case of the October Revolution and the following revolutions, socialism has scored major victories on all continents, which proved to be defeats a few decades later. The socio-economic system put in place by these revolutions proved to be economically, socially and politically inferior to capitalism and was therefore discarded by the countries that had embraced it. The inferiority of ‘real’ socialism compared to capitalism has been proven by the fact that it was abandoned voluntarily, without any direct interference from capitalist powers. On the other hand, the tide of neoliberal reform hit socialist, labour and social democratic parties very hard, which ended up embracing it, pressed by public opinion. Unable to oppose globalization, which allows capital to move to cheap labour countries, the governments of these parties eventually give in to its demands to invest in their own country, implementing ‘reforms’ that harm workers. Today, the struggle of the working class movement is only to safeguard its achievements which are in danger of being repealed or weakened, with no prospects of improvement for more equality through the state’s initiative. In such conditions, it is vital to review the currently prevailing notions of how to achieve socialism. After the victory of Marxism in the Second International, it was agreed that it would necessarily mean taking over the power of the state in order to achieve institutional changes leading to the ‘socialization of the production resources’. What divided socialists was only whether the takeover had necessarily to be done by force or whether it could also be achieved through vote. Communists and social democrats disagreed on how to take over power but not on how essential this was to achieve socialism. In this strategic option, there was an element of authoritarianism insofar as the action of the few in power replaces the action of the workers, whose role is only to facilitate the takeover of power. Once it has taken place, workers would only have to help with the transfer of ownership of production resources to themselves, which is something that has never occurred. Both in countries where communists seized power and in countries where social democrats came to power, expropriated

152

P. Singer

p­ roduction resources were handed over to professional managers, dependent and obedient to the authorities that appointed them. Self-management was contemplated on different occasions, but it was ruled out on the ground that workers lacked the knowledge and experience to be able to manage the enterprises. As self-management was an essential feature of socialist utopia, the absence of it must have been justified as temporary. Nevertheless, no effective steps were taken to enable workers to put it into practice, with the notable exception of Yugoslavia. The experiment conducted by Tito was much researched and discussed, and lessons were drawn from it. But the prevailing dictatorship ruined the experiment because self-managed enterprises were not independent of both planned economy and the single party. The main lesson to be drawn from the Yugoslav self-­management experiment is that in order to be authentic, socialism needs to be part of a fully fledged political democracy with increasing direct participation of the citizens in government decisions. Today, the path open to workers to achieve (actually, to build) socialism is through their direct action in the economic and social fields. Capitalism is a mode of production that does not aim to employ the whole of the available workforce. Capitalist enterprises discard people they consider incompetent but also all those seen as undesirable because of gender, age or schooling. This leads to idleness and the impoverishment of a large part of the working population, which is a structural feature of capitalism, as well as chronic unemployment and social exclusion. However, all these people are in principle available to get integrated into the economy as self-employed, members of family enterprises or partners in collective units of production and distribution of many kinds. Therefore, direct action by workers to build a solidarity economy within capitalism has been taking place since the early days of industrial capitalism. Cooperatives have been set up and have been operating for over 200 years, and their governing principles are clearly socialist, at least since the foundation of the Rochdale Society of Equitable Pioneers in 1844: all decision-making power belongs equally to the members—one man one vote; there is free admission for new members, in any cooperative, meaning that it does not only serve its own members but all of those who want and need to be part of the solidarity economy. The cooperative’s assets consist of divisible funds belonging to the members and non-divisible funds belonging to the cooperative as an institution, but not to its membership at any given moment. Each of these principles is directly opposed to those governing the operation of a capitalist enterprise. Direct action by workers is not limited to producer cooperatives; it extends to finance, education, scientific research, communications, etc., and tends to cover all fields of activity. There is nothing that cannot be done collectively and through self-management. Individual and family producers are learning that they too can come together and help each other in cooperatives or associations, enabling them to cope with the tendency of highly centralized capital to dominate markets. In addition, those who possess knowledge and skills but lack purchasers for the goods and services they can provide can join exchange clubs and grant each other credit through the use of a social currency. This has brought a system of monetary

6  Reflections on Socialism

153

transactions, where interest has been banned, and serves as a basis for the development of self-governing communities. Currency as a social institution becomes a social link again and allows members of exchange clubs to free themselves, to some extent, from the grip of the often restrictive monetary policy of the official currency guardians. Finally, it is clear that the solidarity economy has been dormant during the long supremacy of Keynesianism. Cooperatives did not stop growing, but pressured by capitalist competition, they became similar to it by professionalizing their management; members hire workers from the service cooperatives such as consumer goods, housing, purchases and sales and so on. The neoliberal turnaround and the fall of the Stalinist regimes in Eastern Europe prompted the Left to reconsider its strategic options in most countries, to a smaller or larger degree, and one of the outcomes was the increasing importance of direct action by social movements and NGOs, both in the economy and the struggle for the environment. There is a clear revival of the solidarity economy and the green economy with a strong socialist drive, above all in Latin American countries, but also in Western Europe and Asia. These new ways of fighting for socialism, although primarily aimed at developing socialist and ecological structures within the economy, cannot occur without political and ideological struggle. In Brazil, during the Lula Government, left-wing state and local governments implemented policies to support the solidarity economy, while the federal government was taking steps towards the same goal by setting up the National Department for Solidarity Economy, as well as the National Programme for Productive Oriented Microcredit within the Ministry of Labor. This reversal of priorities is new. Today, the struggle for political power is subject to the need to build and consolidate the aforementioned structures, and the workers themselves have to be the key players in freeing labour from the yoke of capital: 1. This is what we are witnessing today with the microelectronics revolution. Centralized companies are being dismantled, administration power is being decentralized, many tasks are performed today without face-to-face contact between participants and so on. It is no coincidence that real socialism has no capacity to absorb this revolution. 2. There is an ongoing debate among socialists who believe that democratic ideals of social and economic equality can be met through markets controlled by public authority and those who think that these ideals can only be met through democratic planning (as opposed to what is practised by ‘real’ socialism). The heart of the matter revolves around the practical feasibility of planning at national level based on time-varying wishes expressed by producers and consumers. I think this feasibility is highly unlikely, at least as long as producers and consumers behave the way they do today. Of course we can always assume that in socialism people will be more detached and less competitive, but then socialism would become a mere figment of imagination, without taking into account humanity as it is here and now. The socialism we are fighting for is meant for this humanity to which we belong. It is the women and the men we live with that we must win to socialism, not their descendants.

Chapter 7

Tribute to Paul Singer (1932–2018): A Socialist Activist Fábio Sanchez and Fernando Kleiman

Paul Singer (1932–2018) was most of his life a direct part of the twentieth-century social movements and those at the beginning of the twenty-first century. He is one of the most renowned and respected democratic left-wing activists of his time in Brazil. Paul Singer was born in Vienna (Austria) in a Jewish family, and he went to Brazil at 8 years old in 1940, escaping from the Nazis. He started his political education when he was a young boy. By the end of Getulio Vargas’ dictatorship in 1945, the Brazilian Communist Party was legally registered and attracting a large part of the country’s left-wing activists. Singer discovers that many of his friends are communists, but he decides to join the socialists, opposing the Stalinists. At the age of 15, he discovers a text from Rosa Luxemburg on the Russian Revolution (Luxemburg 2008). From then on, Rosa Luxemburg becomes a frequent reference for Singer’s activism and intellectual reflections, making him one of the first “Luxemburgists” in the country. Already in his youth, he experiences self-management, cooperatives, and the “solidarity economy.” This interest led to his participation in DROR, a young left-­ wing Zionist movement aimed at building a kibbutzim in Israel. It was, however, not his idea to emigrate from Brazil, justifying to his colleagues that the socialist struggle was international. He built his trajectory in Brazil, joining the Socialist Party (PSB) in the São Paulo city section, which by that time was known as the most left-­ wing-­oriented section of the party in Brazil. These experiences were of great importance for his activism and beliefs in his later life. Singer had an electrotechnical education and became a metallurgical worker at the beginning of the 1950s. He became a union activist supported by the Socialist Party. In 1953, he participated in one of the greatest union strikes ever organized in Brazil, “the 300 thousand strike” (greve dos 300 mil). The strike was organized to F. Sanchez (*) Sociology Department, Federal University of São Paulo, São Paulo, Brazil F. Kleiman EES Department, TU Delft, The Netherlands © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_7

155

156

F. Sanchez and F. Kleiman

fight for union organization freedom and the idea of having workers commissions in factories—besides fighting for higher wages. Singer was recognized as a movement leader with his active participation in the strike organization. His socialist and Marxist background leads him to take a bachelor in economics at the University of São Paulo where he graduated in 1959. During that period, he was invited to engage in a recently created study group of Karl Marx’s the Capital by a group of young lecturers from the university. Besides Paul Singer, the group had other political and intellectual relevant members such as Fernando Henrique Cardoso, Jose Arthur Giannotti, Octavio Ianni, and Ruth Cardoso. During 10 years, the group had regular meetings the field of nondogmatic Marxism. It was a space where Singer could exercise what he admired in Rosa Luxemburg, who in his own words is “a Marxist that dared to criticize Marx.” Paul Singer started his lecturing career at the early 1960s as an economics assistant professor at the University of São Paulo. He acquired his PhD in sociology in 1966, engaging in an academic life without abandoning his activism. His work always focused on to understand the world in order to change it. As a great Marxist, he sought to understand the barriers for working-class emancipation and the characteristics of a peripheral economy and society such as Brazil. In 1964, the military overthrew the democratically elected government (with the blessing of CIA). Singer and many other left-wing-oriented scholars were fired from their university activities by the Brazilian dictatorship in 1969. As they were forbidden to teach, this group created the Brazilian Analysis and Planning Center (CEBRAP) that brought together sociologists, political scientists, philosophers, economists, anthropologists, and psychologists. The center developed its research to better understand the situation in the country and also to resist the military dictatorship. For participating in CEBRAP, Singer was arrested by the repression unit for 7 days to “clarify his activities” in 1974. Still, he kept his activities with CEBRAP for 20 years until 1988 when he withdrew from the center to be appointed planning secretary of Luiza Erundina’s municipal government in the city of São Paulo. He mentioned his time at CEBRAP as one of his most important experiences as activist for the solidarity economy many years later. He used to say that CEBRAP was like a cooperative where they had a defined “mission” where the members discussed their own and others’ work and papers without hierarchies. CEBRAP was important to sustain critical thinking during the worst periods of the military dictatorship. Paul Singer produced important analyses of the Brazilian economy during this period. Together with Vinicius Caldeira Brant, still in CEBRAP by the late 1970s, Singer produced a series of studies on São Paulo city poverty. They noticed a group of new emerging social movements that were not considered in left-wing analysis as something new that was starting to appear in Brazil’s public arena. A book was published in 1979, “Sao Paulo: o povo em movimento” (Sao Paulo: the people in movement), and set of reference for what was formerly known as “New Social Movements.” It highlights the experience of actors that played a fundamental role in the re-­ democratization process during the 1980s and that also resulted in the creation of the Workers’ Party (Partido dos Trabalhadores, PT), the Black Movement, the

7  Tribute to Paul Singer (1932–2018): A Socialist Activist

157

Feminist Movement, and many others. Singer became quickly a reliable activist in the PT that had been started by Luiz Inácio Lula da Silva, the coming president of Brazil. In the party, Singer set up a group of economists that was responsible for producing the party’s economic program. He took part in the national economic public debates and in the preparation of five economic plans of the Lula government. The adoption of the solidarity economy by Paul Singer strengthened many of the existing experiences and supported the political organization. Many PT representatives incorporated these ideas in their political programs, and by the end of the century, many public policies were being developed by local and regional governments. Olivio Dutra’s regional government of Rio Grande do Sul State (1998–2002) and Marta Suplicy’s São Paulo municipal government (2000–2004) were great examples that were supported by Paul Singer himself. In preparation of Lula’s federal elections program in 2002, Paul Singer joined a team to elaborate a specific section for solidarity economy and cooperatives. After Lula was elected, the growing solidarity economy movement organized its first national meeting with dozens of organizations representing hundreds of workers. In a letter to Lula, the elected president, the meeting asked the new government to create a National Secretariat for Solidarity Economy (SENAES) in the Ministry of Labor. It also suggested Paul Singer to be the head of this office. Lula accepted the suggestion and made it public in January 2003, inviting Paul Singer as secretary. Singer was head of SENAES, working both in Lula’s and Dilma Rousseff’s governments until the parliamentary coup in April 2016. He resigned from office and left SENAES. During his 13 years as head of the National Secretariat for Solidarity Economy, he was engaged in supporting the existing initiatives of self-management, fostering new ones, and also taking the ideas of democratic management to the hierarchical structure of the government itself. His team created public policies for democratic education, professional solidarity economy training, access to technology and credit, and accessory market-oriented policies for the firms to successfully commercialize their products. He also fostered different forms of participation in a straight relation to the social movements that supported SENAES. His efforts were not limited to his own secretariat, but the whole government was stimulated to engage in different aspects of policy-making for solidarity economy support.

Lula’s Government and PT Socialism (“Socialismo Petista”) Lula won the presidential elections in October 2002 and took office in Brasilia in January 2003. Singer’s ideas influenced the Workers’ Party in both theoretical and practical terms. They helped to solve and create new tensions in PT’s administration, particularly during Lula’s federal government experience. Obviously, he wasn’t the only one to fulfil this role as many different historical figures also had their own important visions and influences from diverse socialist backgrounds. However, PT was a pluralistic and democratic party since the 1980s, and Singer,

158

F. Sanchez and F. Kleiman

always committed to debates, never gave up in controversies over the building of a socialist society. The Workers’ Party that took office in 2003 with Lula as Brazil’s president was quite different from the one which was built during the previous years since its foundation. Lula had won with a great majority, also embracing the middle class, and the business sectors. It was now much less socialist government and a more “responsible” road map was put in place. The result was great administration with many successful social and economic outcomes for the working class and the marginalized poor but limited in terms of real shifts in working-class perspectives as the rich could still rule from the commanding heights of the system. Lula’s administration stopped some of the neoliberal policies from the last government even if keeping much of the same monetary and exchange economic policies. It resulted in a contradictory government that was tackling historical issues such as inequality but did not address deeper class conflicts which could have ended benefiting financial capital. On one hand, it unleashed a new wave of welfare that sustained for a decade the so-called model of economic growth with equity. It managed to increase the purchasing power of the working classes yearly by a consistent national agreement that was turned into law. Lula’s government increased the credit facilities to industry and commerce while at the same time approving large budgets for social policies. Many national programs were developed in order to overcome structural barriers for regional growth. The Hunger Zero Program (Fome Zero), which formerly became the Bolsa Familia Program, managed to support dozens of millions of people to overcome poverty and extreme poverty.1 Another program, Water for All, together with northeastern social movements, built thousands of cisterns to give poor people access to drinkable water. A supplementary program came later on to give this people access to water for production, technical assistance, and credit for them to engage in economic activities. Training, technical assistance, and credit were also part of a major effort to support local poor farmers overcome rural poverty (Pronaf) which was connected with guaranteed public acquisition program that secured their local production. Also in urban areas, microcredit and labor policies were offered to include poor workers. Special programs for education, social assistance, and health were developed specifically for improving poor people’s life. Almost every ministry was challenged to engage. By that time, a solidarity economy mapping was developed by Singer’s Secretariat in the Ministry of Labor through a network of universities and social movements countrywide. Self-managed firms such as cooperatives, autonomous workers organizations, and other forms of cooperation reached about 3  million workers organized in more than 150,000 self-organizing work initiatives.2 On one hand, these numbers showed many challenges ahead for the federal government to give support  Campello, T., et al. (2015). “Brazil Without Extreme Poverty”.  Ferrarini, A., L. GAIGER, and M. Veronese, Solidarity Economy Enterprises In Brazil: an overview from the second national mapping. The International Comparative Social Enterprise Models– ICSEM Project, 2013. 1 2

7  Tribute to Paul Singer (1932–2018): A Socialist Activist

159

to such a big number of workers. On the other hand, it was inspiring to see how far the solidarity economy had expanded, and it fuelled the hopes that Paul Singer and his team were having. Paul Singer was supporting and working with the government, but this did not mean that he wouldn’t be critic on decisions made. On many different occasions, he made clear that the State should do as much as it could to help the poor. But he also thought that the less top-down those actions were made, the better would it be for the population to understand the policies as rights, not as favors. Lula’s government tried to foment popular participation. The already mentioned creation of a national participation policy that supported the creation of counsels, commissions, and working groups that empowered citizens to be part of the state’s decision-making processes was largely celebrated by Singer. But still, after a decade, some of these structures became rusty, with a bureaucratic routine, serving sometimes to only accept already-decided policies instead of helping the government to really work together with the people. People like Singer tried to strengthen civil society and get it organized, using the public service support rather than using their participation, only to endorse what the government was doing. That was not an easy position, and he was criticized by many from the government and civil society as well. A common position was that he should focus on budget questions. He was a national commissioner and his task was to execute public policies. He disagreed many times, interpreting his role as a government representative whose duty was to inform the citizens about their rights and responsibilities and their roles in governmental action. He thought they should listen and represent different voices within government and society, instead of him trying to speak in their name. He was not necessarily seeking the best decisions, but rather ways to gather different opinions, ensuring that decisions would be fair and representative. Together with the social and economic deliveries, civil society’s networks were one of the most important legacies from the 13 years of the PT’s federal government experience. After the impeachment of President Dilma Rousseff in 2016 (successor to Lula, 2012–2016), the National Secretariat for Solidarity Economy was downgraded to a department of a new ministry that merged social security with labor policies. Paul Singer died in April 2018 and had seen his efforts in government being destroyed by Temer, the successor of Dilma as interim president. In the new pseudo fascist government of Jair Bolsonaro (2019), the Ministry of Labor was abolished, and the actions to support solidarity economy vanished. The current presidency is dismantling the PT legacy in terms of human rights, social policies, and results. Many poor-related diseases that were overcome during Lula’s and Dilma’s governments are returning. Unemployment is reaching new record levels, economic activity is slagging, and inequality and social injustice are on the rise. An ultra-neoliberal script is being sustained, far from delivering economic and social results. The poorest are the ones suffering most. Paul Singer called himself as an “informed optimist.” He used to highlight that governments are important to support people’s initiatives, but they should never replace them. It is the people that need to opt to live in a different system and build

160

F. Sanchez and F. Kleiman

it. And that is the main reason why his ideas of socialism and democracy were always connected. Much of Singer’s ideas about democratic socialism are still alive and are used in many regions of Brazil and around the globe.

Comments on Paul Singer’s Socialism In addition to the militancy that characterized his life—from adolescence to his death—Paul Singer was constantly concerned with reflecting on socialism and thinking about its possibilities at every juncture. Three important moments of his work are present in three publications: O que é Socialismo Hoje3(1980)4, that propounds socialism and democracy as synonyms; Uma Utopia Militante5 (1997),6 where he distinguishes social revolution and political revolution (institutional changes with a seizure of state power are a consequence, not cause, of the transformations of the relations of production); and Economia Socialista7 (2000)8, that criticizes the “democratic deficit” of the experiences of real socialism and the centrally planned economy, defending market socialism. In common in the three papers is the prospect that democratic gains are socialist gains. In the late 1970s and early 1980s, Singer began to produce more systematically on what socialism would be like in the late twentieth century. Consistent with his trajectory of criticism of authoritarianism and dogmatism, which, as we have seen, marks his political militancy since his adolescence, Singer seeks to reflect on the paths to socialism and to think of it as not being dissociated from democracy but rather as its synonym. One event that deeply touched Singer was the war between China and Vietnam in 1979. Even a staunch critique of real socialism since the beginning of his political formation, Singer was impacted by the war between two so-called socialist countries. It is in this context and on this impact that he writes the book O que é Socialismo Hoje, published in 1980. In the book, he argues that either socialism will be democratic or it will not be socialism. According to Singer, the concept of socialism at that time (early 1980s) should achieve equality on the economic and social level and democracy on the political plane in a larger dimension than that found in both the so-called socialist and capitalist countries.9 For Singer, this means that socialism is not only equality in the socioeconomic view but, above all, the active participation and choice of people for

 What Is Socialism Today—author’s free translation.  Singer, Paul. (1980). O Que. é Socialismo, Hoje. Rio de Janeiro, Vozes. 5  A Militant Utopia—author’s free translation. 6  Singer, Paul. (1997). Uma Utopia Militante. Repensando o socialismo. Petrópolis: Vozes. 7  Socialist Economy—author’s free translation. 8  Singer, Paul. (2000). Economia Socialista. Fundação Perseu Abramo. São Paulo. 9  Singer, Paul. (1980). O Que. é Socialismo, Hoje. Rio de Janeiro, Vozes. p.19. 3 4

7  Tribute to Paul Singer (1932–2018): A Socialist Activist

161

socialism. In this way, socialism should be an option for being economically, socially, and politically superior technically and morally to capitalism. Singer’s criticism addressed both real socialism and European social democracy. In both cases, the division between labor and capital, or rather between those who do and those who think, and therefore between those who command and those who obey, has not been overcome. In real socialism, despite the abolition of private property, and gains in economic and social equality, a ruling bureaucratic caste was constituted, leaving the rest of the population alienated from both the political process and the labor process itself. In social democracy, something similar happened. Despite gains in economic equality through the conquest of social rights and advancement in the democratic process, wage labor, subordination of labor, and the division between manual labor and intellectual labor was maintained. The question of socialism, then, was not to abandon these socialist gains already achieved but to advance in the process of conquering economic and social equality and democratic achievements by overcoming the division of intellectual and manual labor (capital and labor). This could only occur when everyone could participate in decision-making in both production and society in general.10 That is, socialism would have to move in the path of radicalization of democracy. Thus, in the text of the early 1980s, the seeds that would have led Singer a few years later to engage in self-management and solidarity economy were already planted there. Paul Singer’s socialist political formation was always characterized by the reconciliation between Marxism and democracy, particularly by the influence exerted on him by Rosa Luxemburg’s thought. Michael Löwy even claimed that there was a “Luxemburgist” influence on the formation of the PT, thinking about the names of Paul Singer and Mario Pedrosa.11 Although there is no record of Singer claiming to be “Luxemburgist” (probably because of his disgust at being involved in any orthodoxy), there is no doubt that the work of the Polish socialist militant left deep marks both in his political practice and in his intellectual work and form of conceiving socialism. Among the examples of Rosa Luxemburg’s influence, we can highlight (1) the anti-avant-­garde stance and the belief that it is the praxis itself that forms the working class toward its self-emancipation, (2) the commitment of socialism to democracy, and (3) Luxemburg’s conception (expressed in her book The Accumulation of Capital) that the capitalist mode of production coexists with other modes, a coexistence which is even functional and vital for the accumulation of capital (which gives rise to Rosa Luxemburg’s critique of imperialism). In Singer’s doctoral thesis, defended in 1966, the dimension of different modes of production coming together with coexistence within capitalism emphatically appears when analyzing the relationship between industrialization and the forms of work previously understood as precapitalist in the formation of Brazilian cities.

 Ibid. p.29.  Loureiro, I. (org.), Socialismo o barbárie: Rosa Luxemburgo no Brasil. 2008: Instituto Rosa Luxemburg Stiftung. 10 11

162

F. Sanchez and F. Kleiman

Singer argues that instead of representing precapitalist backwardness, these noncapitalist modes of production are functional for the very development of capitalism in Brazil. The same notion will reappear years later, when Singer discusses the paths to socialism and solidarity economy. If it is possible that other modes of production coexist with capitalism, one can suppose that the socialist mode of production itself lives in its interstices. This is the central argument of his book Uma Utopia Militante (1997). Through the historical reconstruction of capitalism itself, which, as Singer shows, emerged in the interstices of feudalism, the working class has been creating forms of socialist production (through cooperativism and self-­management) since the nineteenth century in the interstices of capitalism. In this way, just as there were “islands of capitalism” within feudalism, or just as there are “islands of labor analogous to slavery” within capitalism, so there are “islands of socialism.” Singer’s hypothesis in this book is that “socialism, as a mode of production, would have to be developed even under hegemony of capitalism, that is, as a subordinate mode of production, integrated capitalist social formation.”12 In this way, Singer distinguishes between mode of production and social formation. A social formation is composed of different modes of production. The predominance of the capitalist mode of production defines the capitalist character of present-day society, but it still competes in the market with other modes of commodity production. For Singer, “the development of socialist modes of production in capitalist social formations has been taking place for over 200 years.”13 Taking up the history of the English labor movement, Paul Singer shows that, in the face of the advance of capital during the second industrial revolution, the working class developed three main forms of resistance: (1) Luddism, (2) organization in trade unions and political parties, and (3) the economic organization through cooperatives and mutualisms. The first form of resistance, Luddism and its destruction of the machines that symbolized capital and exploitation, was soon abandoned. But the effect of political organization and economic organization was long-lasting. Through political organization with the formation of unions and political parties, the working class has won the right to political participation, created modern democracy, and has barely won social rights. Thus, for Singer, the democratic state of law is an operative conquest, a socialist conquest. As an important Brazilian philosopher, Paulo Arantes (2002), says in an interview, commenting on Paul Singer’s perspective, “The universal Suffrage is a socialist implant. How so? Well, socialism and democracy, for Singer, are synonymous. Universal suffrage was wrested from the ‘ones in the bottom’. The democratic rule of law is also a socialist implant, it was also wrested by the dispossessed, because the liberal state has always been oligarchic.”14  Singer, Paul. (1997). Uma Utopia Militante. Repensando o socialismo. Petrópolis: Vozes. p. 9. Author’s translation. 13  Ibid. p.10. Author’s translation. 14  Arantes, Paulo (2000). “Paulo Arantes” in: NOBRE, M. & REGO, J.M. (2000) Conversas com filósofos brasileiros. Editora 34. São Paulo. Author’s translation. 12

7  Tribute to Paul Singer (1932–2018): A Socialist Activist

163

Just as the political organization of workers facing the advance of capital-­ generated democratic gains that are socialistic implants by placing limits on the oligarchic power of the liberal state, the economic organization of these same workers produced socialist implants in the sphere of production, creating democratic enterprises, self-managed, where both the means of production are collectivized to all those who work in the enterprise, as the decisions are made democratically by all, without distinction, where “each head has a vote,” thus breaking the oligarchic power of capital in the interior of companies from the practices of cooperation and self-management. From the theoretical point of view, Singer’s central argument in Uma Utopia Militante is that it is necessary to “re-conceptualize the socialist social revolution and reassess its perspectives and possibilities in the face of the vicissitudes of capitalism and the labor movement in the final years of the century and the millennium.”15 For him, the social revolution is “processes of change between social formations, each of which is characterized by the hegemony of a mode of production.”16 Singer then shows that the socialist revolution is a long-term process since it is the change between social formations: “Thus the capitalist social revolution, as we shall see, embraces in England the period from the implantation of capitalism as a mode of subordinate production, until its transformation into a dominant one, from the industrial revolution. Similarly, the socialist social revolution begins with the establishment of anti-capitalist institutions resulting from the struggles of the labor movement against certain immanent tendencies of capitalism, such as concentration of income and property, social exclusion (which takes the predominant form of unemployment), and destruction creative development of companies and jobs.”17 The socialist social revolution, therefore, is not only long, but it is already being realized, not only here and now, but it began even in the nineteenth century, at the very moment when the working class was resisting the advance of capitalism (its oligopolistic and exclusionary practices), and generating, through the democratic achievements, the socialist “implants,” which we refer to above. The question that remains is the role of the political revolution as a moment of superstructure change (Singer here retakes Marx’s Introduction to Critique of Political Economy). For Singer, the political revolution (the conquest of state power by socialist forces) is a moment of change in the legal and political apparatus but cannot be a factor of socialization of the means of production “from top to bottom.” According to Singer. “It remains true that socialism presupposes the transfer of the effective control of the means of production of the capitalists to the workers. But this transfer requires much more than a legal-political act of formal transfer of ownership or possession.

 Singer, Paul. (1997). Uma Utopia Militante. Repensando o socialismo. Petrópolis: Vozes. p.11. Author’s free translation. 16  Ibid. p.19. Author’s translation. 17  Ibid. p.19. Author’s translation. 15

164

F. Sanchez and F. Kleiman

It requires, first of all, that workers are willing to collectively assume such control and that they can qualify to exercise it at an acceptable level of efficiency.”18 According to Singer, the problem is that in the twentieth century, the political revolution overshadowed the already existing initiatives of social revolution. Both the model of real socialism and European social democracy have focused on the strategy of conquering socialism in taking power from the state, particularly from the guidelines of the Second International, leaving aside the experiences of socialist social revolution that have nineteenth century. It is important to point out that, for Singer, it does not mean that the state is not important, but it is not through it that socialism will be constructed, because it is not constructed by decree but by socialist practices taken by free will by the people, who can be potentialized by the power of the state. This debate on the conceptions of socialism and the role of state and democracy in its construction will be the object of another book by Paul Singer, Economia Socialista (2000), written a few years later. This book was published based on Paul Singer’s lectures, delivered in a series of seminars promoted by the Workers’ Party entitled Socialism in Discussion.19 Singer explores the differences between conception of socialism and that expressed by what he calls “the classical conception.” In this last, the focus is on the taking of state power and changes in modes of production from state action. Both conceptions advocate that the goal of socialism as a mode of production is the socialization of the means of production in order to allow the collective appropriation of socially generated wealth. But the way to realize this socialization is different. For Singer, “This vision of socialism, which deserves the adjective ‘classical,’ proposes as an overcoming of capitalism the direct appropriation of the means of production by society. The state dominated by the proletariat is only an instrument of this appropriation, for as soon as it is realized the proletariat is abolished and the state begins to perish.”20 However, this was not what the experience of real socialism did. On the contrary, instead of signifying the gradual perishing of the state, these experiences signified their enormous growth. This is because it was believed that one would combat “market anarchy” by expanding the planning of monopoly capitalist enterprise into the whole economy. In this scenario, “Socialism came to be understood as synonymous with general or centralized planning of production, the replacement of the market by the administrative ­allocation of the means of production, the monopoly organization of all branches of production and the detailed setting of goals for all the companies, all aiming the full satisfaction of individual and collective needs.”21

 Ibid. p.10. Author’s translation.  Author’s free translation. 20  Singer, Paul. (2000). Economia Socialista. Fundação Perseu Abramo. São Paulo. p. 15. Author’s translation. 21  Ibid. p. 22. Author’s translation. 18 19

7  Tribute to Paul Singer (1932–2018): A Socialist Activist

165

The effect of this process was significant for the (de)construction of socialism: instead of socializing the means of production for the workers, it replaced capitalist managers by state managers; by the necessity of the dynamics of planning, produced an economy of scarcity; and above all, the necessity of planning leads to monolithic power, that is, the democratic gains, which are as we have said, synonyms of socialist gains, to be completely suppressed by the economy centrally planned. In view of these findings, Singer states, “It seems clear that the socialist economy needs to find a different way of regulating the economy, that it is democratic and participatory, and that all society can express its preferences. This leads to the belief that this new mode of regulation must be explicitly political, that citizens have different interests, perceptions and preferences, and that the mode of regulation must allow confrontation and negotiation of such differences with the explicit aim of producing a consensus or, if this is impossible, a majority position.”22 At this point, Singer approaches thinkers of the so-called utopian socialism (Owen, Fourier) and anarchism (Proudhon). Thus, socialism will be constructed less by the taking of state power but by a series of practices that mean the real socialization of the means of production, the de-alienation of work, and, above all, the advance of democracy. In Singer’s words: “The conquest of a socialist economy will probably result from the advance of the labour and socialist movement on a number of fronts: the extension of democracy from the political to the economic and social realms; the participation of the organized population in the elaboration of public budgets and in the management of school and health equipment; the conquest of local and regional governments by coalitions of the left that can implement already socialist policies, including support and encouragement to self-managed companies; of new workers’ rights in the workplace, with the right to examine the company’s accounts and to participate in its decision-making centers; and finally, but not lastly, the construction of a sector of solidarity economy in cities and in the countryside, including land won by agrarian reform, in which production, distribution and consumption, credit and insurance form a multiform and harmonious whole in which mutually reinforcing.”23

22 23

 Ibid. p. 38/39. Author’s translation.  Ibid. p.44. Author’s translation.

Chapter 8

Cuban Socialism at 60: Old Aspirations and New Realities Ricardo Torres Pérez and Claes Brundenius

Introduction Few revolutions have had such an impact in modern times as the Cuban Revolution in 1959. Numerous publications (books, articles, and dissertations) have been written about it. Opinions about it have diverged. The revolution has been an inspiration for many, contested and even detested by others. In 1961, the Cuban Revolution took a radical turn when Fidel Castro declared that the revolution was socialist and parliamentary elections were no longer on the agenda. This chapter is a review of major events, and turning points, in the life span of the now 60-year-old revolution. After the death of legendary and uncontested leader Fidel Castro, the island is confronted with a serious of problems and challenges—not least with a huge democratic deficit.

The Transition Phase 1959–1961 When the 26th of July Movement triumphantly overthrew the hated Batista dictatorship on January 1, 1959, there was no socialist program, not even a socialist party that was leading the revolutionary government. The main themes of the Program Manifesto of the 26th of July Movement had been the questions of national ­sovereignty and social

R. T. Pérez Centre for the Study of the Cuban Economy, Economics Department, University of Havana, Havana, Cuba C. Brundenius (*) Lund School of Economics and Management, Lund University, Lund, Sweden UNU-MERIT, Maastricht, The Netherlands © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_8

167

168

R. T. Pérez and C. Brundenius

justice. It was not a socialist action program far from that, but when Fidel Castro became prime minister in the revolutionary government, he revealed his adamant determination by seizing the US-owned Cuban Electric Company, hated by most Cubans for its inefficiency and for its monopoly prices. In the spring of 1959, the government initiated several popular reforms, such as an agrarian reform and a new rent law, cutting most housing rents by 50% (Brundenius 1984). These reforms, although modest at the start, were immediately met by hostility from the Eisenhower Government, and from then on, there was an escalation both in polemics and actions by both Cuba and the United States. In June 1960, there was a dispute about the oil that Cuba imported (from Venezuela) to be refined at the foreign-­owned refineries. Cuba had been offered cheaper Soviet oil, and after the refineries refused to refine the Soviet oil, the government nationalized the refineries. Eisenhower responded by drastically reducing the sugar imports. This led to a wave of nationalizations in the island. In August 1960, the lion’s share of the US investments in Cuba was nationalized, including all sugar mills and oil refineries, and finally in October, a new law (Law 890) was proclaimed whereby 287 larger companies, foreign as well as national, were expropriated or confiscated. By early 1961, 85 percent of the Cuban industry and 37 percent of the land had been collectivized (Table 8.1). After the “October Revolution,” it was becoming clear that the revolution had entered a socialist phase, and on April 15, 1961, just 2  days before the CIA sponsored Bay of Pigs invasion, Fidel Castro referred to the Cuban Revolution as a “socialist revolution carried out under the noses of the Yankees” (quoted in op. cit.). The invasion was aborted, and so Cuban relations with the United States were poisoned for decades to come. As a matter of fact, it was not until President Obama in 2015 restored diplomatic relations. Many asked at that time, and others are still wondering, if the US break with Cuba in 1960 was inevitable. If the Eisenhower administration had acted with more understanding and less aggressively in 1959, could there have been another chain of events? Che Guevara, Minister of Industry at the time, put it like this in an interview with an American journalist (November 1960): What lies ahead depends greatly on the United States. With the exception of the Agrarian Reform, which the Cuban people desired and initiated themselves, all of our radical measures have been a direct response to direct aggressions by powerful monopolists, of which your country is a chief exponent. U.S. pressure on Cuba has made necessary the ‘radicalizaTable 8.1  State ownership by economic sector 1961–2018, selected years Sector Agriculture Industry Construction Transportation Retail trade Wholesale and foreign trade Banking

1961 37 85 80 92 52 100 100

1968 70 100 100 98 100 100 100

1988 92 100 100 100 100 100 100

2010 26 100 100 90 85 100 100

Source: Mesa-Lago (1981) and estimates by Claes Brundenius (1988, 2010, 2018)

2018 19 100 95 65 69 100 100

8  Cuban Socialism at 60: Old Aspirations and New Realities

169

tion’ of the Revolution. To know how much further Cuba will go, it will be easier to ask the U.S. Government how far it plans to go (quoted in Huberman and Sweezy 1961).

Note that this interview was before the invasion attempt in April 1961. After that, the dialogue between the two countries was stone-dead. We think it is important to reflect upon the origin of the Cuban Revolution, its goals and dreams, and why it took the direction it did. There was no original blueprint for how national sovereignty and social justice could be achieved. Marx was aware of the difficulty for humankind to change history: Men make their own history, but they don’t make it just as they please. They do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past” (Karl Marx, “The Eighteenth Brumaire of Louis Bonaparte).

We don’t know if Castro was aware of Marx’ words when he, on July 26, 1967, addressed a rally in Havana: The most difficult task was not the overthrow of Batista and the taking of revolutionary power…. The most difficult task is the one we are engaged in today: the building of a new country on the basis of an underdeveloped country, the creation of a new consciousness, a new man (quoted in Brundenius 1984).

Utopian Phase 1962–1970 The 1960s proved to be a difficult decade for the revolutionary—now also socialist—government. At the beginning of the revolution, there was no limit to expectations of what was now possible. At one point, Michal Kalecki, the Polish economist, was invited to Cuba to outline a Five-Year Plan for Cuba (1961–1965). The plan was based on demand conditions exclusively, disregarding realistic supply conditions. Kalecki projected a 13 percent (!) annual economic growth and an increase of per capita consumption by 7.5 percent per year. The plan even conceived of installing an assembly plant for cars (Kalecki 1976). The economic reality was much darker, and a rationing system of basic consumer goods had been installed already in October 1961. At the same time, the government had to turn to the Soviet Union for help, both economically but not least military, since they expected—and probably rightly so—a new invasion from the United States. The installation of nuclear missiles on the island in 1962 might have been a guarantee against such an invasion, but it, of course, further embittered the US–Cuban relations. During 1962 and 1963, both agricultural and industrial production declined. This led to a debate on what a new socialist economy would look like. The so-called Great Debate was open (in contrast to the debates today in Cuba), and the debates were published in Cuba Socialista, with participants from Cuba as well as abroad. Che Guevara was one of the initiators and also one of the most influential ones (Yaffe 2009). Che was very critical of the Soviet accounting system. Instead he was advocating a system where only material balances would be guidelines for the planning

170

R. T. Pérez and C. Brundenius

system. The national economy should be treated as one big budget unit, owned collectively by the people, or society at large, where Marx’ law of value would not apply. Money transactions would therefore gradually disappear. How can one ­determine value when there is a disturbing discrepancy between needs and available resources? In a market economy, the relative scarcity of commodities determines their prices, but this method would be inexcusable in a socialist society, which is why there was complete consensus on the correctness of rationing basic consumer goods. It was further emphasized by Che that moral work incentives would be the rule rather than dependency on material incentives (Silverman 1971). In 1965, Che was absent for a long time, and in 1966, it was finally disclosed that he was leading a new guerilla movement in Bolivia, where he was murdered on October 8, 1967. In Cuba, there were more and more desperate efforts to do something about the stagnating and inefficient economy. The economic system implemented in Cuba between 1966 and 1970 was an extended version of Che’s central budgeting system, and Cuba moved further away from being a market economy. Free education and health services had been applied already from the outset of the revolution. Now, other free services were added, such as for local telephone calls, and Fidel Castro stated that “starting in 1970, housing rents will be practically non-­ existent” (quoted in Brundenius 1984). The idea was that by gradually offering more free services, the money wages would progressively lose in importance and thus the money economy would be less relevant, and it would be easier to accept moral incentives and voluntary labor. The first decade of the revolution did not end well economically, although many social reforms were welcomed by the people. But the sugar harvest did not increase as planned. This was serious since the government had, in 1963, fixed a target of 10 million tons of raw sugar for the 1969–1970 zafra—a 150 percent increase over 1963. Cuba had signed an agreement with the Soviet Union, implying gradually increasing Soviet purchases of sugar (at a fixed rate) in return for not only oil deliveries but also replacement of obsolete sugar installations, introduction of new sowing technique, and the gradual mechanization of the harvest. Although the economy showed signs of recovery in 1967, and the zafra that year was the biggest since 1961, there were at the same time increasing signs of commodity shortages, especially consumer products. In an attempt to eliminate the black market that was flourishing, the government launched, in March 1968, a “revolutionary offensive,” whereby the state nationalized 55,600 small private businesses. By this drastic measure, the state in less than a decade had collectivized almost the whole economy save for about one-third of the agricultural sector. As the figures in Table  8.1 indicate, this trend continued for some 40  years. The total nationalization of the retail sector was a serious mistake, today generally recognized1, even if Fidel Castro himself never admitted that it was a failure2.  In October 1963, there had been a second land reform that had virtually eliminated the remnants of the rural bourgeoisie. 2  Disclosed to Claes Brundenius in a conversation with Carlos Rafael Rodriguez, the Cuban Vice President, on November 15, 1980. 1

8  Cuban Socialism at 60: Old Aspirations and New Realities

171

But the disastrous impact of the revolutionary offensive was not the end of the problems. The target set for the 1969–1970 zafra, a record of 10 million tons of raw sugar, had to be reached by all means: “los diez millones van”3 as the slogan was. The zafra that year was a record one, although 8.5 million tons, not reaching the target of 10 million. But the record zafra was achieved at a high cost and waste of resources. Cuba was at the time of the zafra in lack of manual labor (since seasonal labor had been abolished), and the zafra depended much on volunteer labor drawn from other important workplaces. Over 350,000 cane cutters participated in this record zafra, of which professional cane cutters were only 80,000 (Brundenius 1984). The goal of rapidly mechanizing cane cutting (with imported Soviet-­ produced harvesters) did not materialize.

1970–1985 Growth with Equity Many lessons were drawn from the disappointing 1960s with the “great leap forward” attempt—the 1969/70 zafra. Nevertheless, the second decade of the revolution started with a vigorous recovery of the economy with a GDP growth of 6.5 percent during the first half of the 1970s and 3.7 percent in the second half (Brundenius 2009). It was especially the investment sectors that expanded rapidly with a gross investment rate of growth of 22 percent per annum. Mesa-Lago mentions some factors behind this success: a more efficient organization, previous investments began to materialize, the educational effort started having an effect with increasing outflow of skilled labor, and a better allocation of capital (Mesa-Lago 1981). The Cuban success story in terms of economic growth during the first half of the decade was primarily the result of accelerated industrialization. An incipient manufacturing industry was born, not only supplying consumer goods but where even a capital goods sector saw the light of the day. Most important was the start of producing Cuba-designed sugar harvester. Another reason for this success was the preferential agreements that Cuba had reached with the Soviet Union. In 1972, the Soviet Government also agreed to the postponement of Cuba’s debt, and in addition new credit lines were provided. The relaxation of the US embargo combined with substantial credits from Western countries were other important factors. Cuba now had a Soviet-inspired system, both politically and economically. Cuba launched its first Five-Year Plans (FYP): the first plan covering 1975–1980 and the second one covering 1981–1985. The growth rates during the first FYP were lower than expected, but growth picked up during the second FYP. During the second FYP, the construction sector grew at an annual rate of 12.1 percent, the manufacturing sector at 12.3 percent, of which the capital goods sector at a rate of 15.6 percent.  Even a famous salsa group was named after this campaign, Los Van Van.

3

172

R. T. Pérez and C. Brundenius

Table 8.2  Income distribution in Cuba, 1953, 1962, 1978, 1986, 1989, 1996, and 1999 Quintiles Lower (0–20) Second (21–40) Third (41–60) Fourth (61–80) Upper (81–100) Upper/lower Gini

Share in total income (%) 1953 1962 1978 2.1 6.2 11.0 4.4 11.0 13.8 11.1 16.3 16.5 24.5 25.1 22.7 57.9 41.4 36.0 27.6 6.7 3.3 0.55 0.35 0.25

1986 11.3 14.7 17.0 23.2 33.8 3.0 0.22

1989 8.8 14.5 18.7 24.1 33.9 3.9 n.a.

1996 4.8 9.1 13.2 18.5 54.4 11.3 0.40

1999 4.3 8.2 12.2 17.1 58.1 13.5 0.41

Source: 1953–1986 (Brundenius 1990); 1989–1999 (Brundenius 2002a)

The national economy as a whole grew at a rate of 3.0 percent during the first FYP and at a rate of 8.6 percent during the second FYP. To this success (at least compared to the miserable 1960s) could be added a redistribution policy that clearly indicated the government’s commitment to equity and social justice. Studies show that the income distribution in Cuba became gradually more equal until the end of the 1980s, but has then gradually worsened (see Table 8.2).

Cuba a New Taiwan? Cuba was becoming a role model in Latin America for growth with equity. Brundenius went as far as comparing the Cuban growth with equity trajectory with that of another success story—Taiwan4 (Brundenius 1990). Many indicators were very similar for Cuba and Taiwan, but with Taiwan having a much higher growth trajectory than Cuba (1986 compared with 1953) but with Cuba showing a slightly higher equity, and also higher education enrollments and medical personnel density. In 2014, Brundenius did a follow-up on the Cuba–Taiwan comparison: What happened after 1986? By 2013, Taiwan had a higher per capita income than Japan, a tremendous surplus in current account (balance of payments), while its Gini was about the same as in 1986 (0.34); Cuba’s had increased from 0.22 to 0.41. (Brundenius 2015). So what happened to the Cuban model?

Stagnation 1986–1989 After the heydays of the growth with equity model, the Cuban economy lost steam. Actually, GDP was slightly lower in 1989 than in 1985, signaling the saturation of the model. But another problem was the launch of perestroika and glasnost in the  It should be stressed that the comparison with Taiwan is not as far-fetched as it may seem. Both Cuba and Taiwan had one party system at the time. Taiwan had a slightly lower per capita income at the start (1953), and interestingly, the most important export item was—in both countries (1953)—sugar! 4

8  Cuban Socialism at 60: Old Aspirations and New Realities

173

Soviet Union after Mikhail Gorbachev’s rise to power in 1985, because it led to pressures in Moscow to reduce subsidies and other preferential treatments to Cuba. Fidel Castro feared that perestroika (restructuring) and glasnost (openness) might have a negative impact on the revolutionary spirit in Cuba (Mesa-Lago and Pérez Lopez 2013, p. 11). This led to the “Rectification of Errors Campaign” where it was sought to find a middle ground between the idealistic and utopian errors (1966–1970) and “the pragmatist errors” during 1975–1985. The campaign did not have much effect on the economic performance or on the revolutionary spirit.

1990–1993: A Disastrous Collapse of the Economy After a successful period with a relatively well-functioning growth with equity model, the Cuban economy entered a period of stagnation after 1986, signaling the saturation of the model of accumulation. The same thing was happening in the Soviet Union and in Eastern Europe. The collaboration model between the communist countries, epitomized by CMEA)5, had become a colossus on clay feet. The demise of the Soviet Union in 1991 had an immediate impact on the Cuban economy. Cuba had up to that point to a large extent depended on preferential terms of trade (especially sugar exchanged for oil at fixed and favorable prices) and long-­ term credits at low interests. Practically overnight all this changed. Between 1989 and 1993, GDP fell by 35 percent, private consumption by 30 percent, and gross investment by 80 percent. Exports of goods and services fell from US$ 6 billion in 1990 to less than US$ 2 billion in 1993. By the end of that year, the fiscal deficit reached almost one-third of GDP, and it was clear to the Cuban leadership that fundamental reforms were necessary (Brundenius 2002b). Three challenges were facing the government: 1. Macro stabilization of the economy, by reducing inflationary pressures (caused by shortages of goods, leading to a soaring black market dollar rate), reducing excess liquidity in the monetary system, addressing the growing external imbalances and shortages of basic goods, and tackling rising disguised ­ unemployment 2. Structural reforms not only to make recovery feasible but also to make high-level growth sustainable in the long run 3. Last but not least, to make sure that the social costs be distributed as fairly as possible among the population, social equity should remain one of the fundamental characteristics of the revolution and its raison d’être. The government launched an emergency plan for this exceptional period that got the name Special Period in Peace Time (Periodo Especial en Tiempos de Paz). It had  Council for Mutual Economic Assistance, usually referred to as COMECON in English, was a kind of EEC of Soviet Union and Eastern Europe that existed between 1949 and 1991. Cuba became a member in 1972. 5

174

R. T. Pérez and C. Brundenius

many features of an orthodox structural adjustment program while at the same time attempting to protect the maintaining of welfare services. Between 1993 and 1994, a series of measures were enacted (Mesa-Lago and Pérez Lopez 2005): 1. The legalization of the holding and circulation of hard currency (in practice, US dollars) and the acceptance of remittances, and opening of “dollar shops” 2. Authorization of certain types of self-employment (including taxi driving, food preparation and sales in home restaurants (paladares) 3. Transformation of state farms into a new type of cooperative (UBPC) 4. Reestablishment of agricultural free markets (they had been abolished in 1986)

1 994–2010: “The Special Period” and Erratic “Wait and See” Reforms After the big contraction of the Cuban economy until 1993, GDP started to pick up again in 1994. Between 1994 and 2010, the economy grew by 4.9 percent per annum, but it was only in 2004 that GDP per capita had regained the 1989 level. A big problem was to quickly find a substitute for sugar exports. During the crisis (1990–1993), Cuban exports had dropped by 75 percent (not so strange since 70 percent of Cuban trade was with the USSR). In 1995, the government enacted a Foreign Investment Law that was hoped to attract capital and technology. At the same time, it was decided to promote tourism as a future source of foreign currency (“sun, sand with a salsa”). This development was slow at the beginning and learning by doing process. The number of foreign tourists increased from 370,000 in 1990 (mainly Russians and East Europeans) to 1.8 million in 2000, and it has been a success story since. By 2012, it had reached 2.8 million and passed 4.7 million in 2018. By the beginning of the new millennium, a series of events led to a new political and economic situation, which in turn led to a renewed centralization of decision-­ making, especially with respect to the managing of foreign exchange. First of all, the presidency of Hugo Chávez in oil-rich Venezuela provided Cuba with a possibility to make use of the island’s impressive human capital, invested in especially education with a health services. Cuba was transformed to being the by far most important supplier of medical services to Venezuela, of which a large part was used to pay for oil imports.

2011–2018: “Updating” the Cuban Economic Model The process of updating the Cuban economic model formally began when the Communist Party of Cuba (PCC), in its Sixth Congress in April 2011, adopted a resolution approving a number of socioeconomic policy guidelines (Los Lineamientos) for the country’s development (PCC 2011). However, by 2007, certain changes were

8  Cuban Socialism at 60: Old Aspirations and New Realities

175

already apparent in the Cuban government’s economic policy, with initial focus on the agricultural sector. The process that started in 2007 greatly differs, both in substance and format, from the limited changes introduced in the early 1990s. Before the Sixth PCC Congress, a number of changes with strong impact on the day-to-day life were introduced. In 2008, Cuban nationals were authorized to purchase mobile phone lines and stay at local hotels. In 2009, public access, albeit limited, to the Internet was approved. In 2010, the sale of building materials was deregulated. In 2011, Cuban nationals were authorized to trade their homes and vehicles. In 2013, overseas travel was liberalized. In 2014, new customs rules were enacted for the importation of goods. These measures, coupled with the initiatives adopted by President Obama in 2015 and 2016—which facilitated family visits and remittances from the United States, as well as Cuba travel by the US nationals for academic, cultural, and/or religious purposes—other packages of relaxation measures adopted by the US administration since 2014. The resumption of US-Cuban diplomatic relations in 2015 gave rise to a feeling of change, which was unprecedented since the triumph of the Revolution. The changes were based on an official and public documents (the “Lineamientos”), and a new body was commissioned with their implementation: The Standing Commission for Implementation and Development (CPID in Spanish). It reports directly to the leadership in the Cuban state and government, and it is hierarchically located above all ministries, imparts instructions on the implementation of its approved policy principles. Generally, the CPID acts as coordinator and supervisor of the overall implementation of policy changes and reforms. At least in print, a number of fundamental changes have found consensus, including but not limited to the following: the need to reconfigure the existing ownership structure including a friendlier regulatory regime for the state-owned companies, a change in the consumption structure in favor of private consumption to align incentives with work more coherently, and fostering Cuba’s integration with the world economy. In this latter area, it became clear that there was a need to improve the country’s relations with its major foreign creditors and the international financial markets. As a side benefit from this measure, it would be easier to attract foreign direct investment. As a result of new land leases, better terms and conditions for the self-employed, and the formation of cooperatives also in non-agricultural activities, by 2018, the non-state sector had grown to its largest dimension since the early 1960s. At present, it accounts for over 30% of the total employment (Table 8.3), distributed between agriculture and urban trades, mostly services  (Mesa-Lago et  al. 2017; Ritter and Henken 2015). Since the stated purpose of the ongoing reform process is to make the Cuban system’s economy viable rather than to establish a functional market economy, a massive privatization of the state-owned asset base is not a component of the Cuban economic policy at this stage. Between 2011 and 2018, Cuba went from adopting major policy initiatives to nearly a full stop in economic reforms by early 2016, as recognized by the ­government in a Council of Ministers meeting in March 2018. Cuban authorities

176

R. T. Pérez and C. Brundenius Table 8.3  Employment by ownership, 2010 and 2017 (percent) State Cooperative Agriculture Urban (e.g., transport) Private Farmers Urban (self-employed)

2010 83.8 4.4 4.4 – 11.8 8.9 2.9

2018 68.4 10.5 10.1 0.4 21.1 8.1 13.0

Source: ONEI http://www.one.cu/

argued that this was to be expected given that fact that initial steps were the easiest and some changes had not proceeded as anticipated. The trajectory of reform was also affected by transformational external events like the thaw with the United States, economic setbacks in Venezuela, and more recently the end of the Cuban doctors program in Brazil. At the same time, the political scene was affected by the Seventh Party Congress in April 2016; the passing of the late Fidel Castro, Cuba’s top political figure for over 50 years; the rise of a new generation of leaders to the country’s top positions in 2018; and the discussion of a new Constitution in the last few months of the same year. In terms of the pace of change and the nature of the policy initiatives, the period since 2014 can be divided into two main phases. During 2014–2015, most changes were in line with the idea of reforming fundamental elements of the economic model. Beginning in early 2016, reforms almost stopped and policies became more restrictive, with the possible exception of foreign investment.

A Thaw in the US–Cuban Relations: A New Opportunity? The year 2014 ended with the unprecedented announcements by the US and Cuba presidents on December 17, 2014. In January and September 2015, the United States introduced modifications to the policy of sanctions aimed at expanding the possibilities of trade, investment, financial links, and travel. In May 2015, Cuba was removed from the US State Department’s list of states that sponsor terrorism, both countries reopened embassies in the summer, and among others, agreements were signed to restore direct mail and commercial flights. While direct economic relations remained limited, this dynamic positively affected the number of Americans visiting Cuba and, predictably, the flow of capital in the form of remittances. In addition, the indirect effect on third countries was remarkable; the US–Cuba rapprochement stimulated tourism, finance, and investments from elsewhere. Over this period, Cuba managed to significantly reduce its foreign indebtedness through bilateral negotiations of its long-term debt with major creditors, such as Japan, Russia, Mexico, and China. In all these cases, at least 70% of the total debt

8  Cuban Socialism at 60: Old Aspirations and New Realities

177

claims was written off, and the repayment of remaining debt was rescheduled on acceptable terms. In December 2015, an agreement was made with the Paris Club to finally settle Cuba’s debt of $11.1 billion. Seventy-six percent of the debt was written off, and an 18-year repayment schedule was established for the remaining claims. It is possible that the process of improving ties with the United States and the great attention it received from the Cuban government concealed, at least partially, the internal contradictions suffered by the Cuban reform process. Complaints at the December 2015 session of the National Assembly about rising food prices led to a partial reversal of agricultural reform, specially the ability of producers and intermediaries to freely set prices according to market conditions. In April, new ­regulations came into effect, introducing price caps and granting a greater role to Acopio, the state agency with a monopoly on marketing agricultural producers. April 2016 can be considered to have been  a turning point in the economic reform process. The apparent logic observed until then, based on the need to improve economic performance, was set aside. The market and the participation of the nonstate sector were considered responsible for the spike in prices and their consequent regressive effect on the distribution of wealth. In spite of the economic benefits, improving relations with the United States also generated reservations in influential circles in the government. The Congress approved two new documents to replace the first generation of guidelines. The Conceptualization is the theoretical and political document that describes the general outline of Cuba’s future model. The 2030 National Development Plan tries to concretize that future in terms of social and economic policies, charting a path toward that desired end. However, by the time the final versions of those documents were released in 2017, it was apparent that priorities had shifted and the reform had been put on hold. A deteriorating environment domestically and internationally introduced doubts and hesitation into the government’s plans. Since the start of 2017, things went from bad to worse. In June that year, Donald Trump, the new U.S. President, announced a policy change aimed at partially dismantling Obama’s legacy in Cuba policy. On August 1, a Cuban Ministry of Labor and Social Security resolution, published in the Official Gazette that same day, established that temporarily no new licenses for private sector businesses would be issued for a variety of activities and that changes would be introduced in the business conditions for cuentapropistas (self-employed). To justify that decision, a wide range of reasons were given, among them tax evasion, the use of illegally obtained raw materials, the imprecision and insufficiency of controls, and deficiencies in the contracting for the supply of services or products among legal and natural persons. More than 11 months later, on July 10, 2018, Cuba’s Official Gazette published numerous new rules that include 5 decrees-laws, 1 decree, and 14 resolutions, covering a total of 129 pages of changes in the relevant regulatory framework for the country’s self-employed. This new episode in the endless zigzag around the private sector was announced under the suggestive label of “Policy for the Perfection of Self-Employment.” The overwhelming majority of the changes introduced, constituted new restrictions on the exercise of these activities. Facing strong criticism from several social groups and deteriorating economic conditions, the Cuban

178

R. T. Pérez and C. Brundenius

authorities reversed some of the regulations related to self-employment work just before they went into effect in December 2018. The economic reforms initiated under the government of Raúl Castro have been the focus of the dominant political process since 2008, but their economic results lag behind the ideological and political implications. Unfortunately, when analyzing the economic performance and structural problems that mark the development of the nation, the transformation has been much more superficial. The most telling example of this is that the beginning of 2019 was marked by an acute balance of payments crisis, which has severely affected links with Cuba’s main external partners, resulting in recurrent shortages of all kinds, including essential goods like eggs and flour. The increase of the informal economy and the current demographic characteristics with an aging population suggest that the rate of economic activity (i.e., the proportion of the working population with a formal job) is  a useful measure for monitoring trends in the labor market. This indicator has been showing a systematic decline since 2011 when it went from 76.1% to 63.4%. Another cause of this decline is the emerging phenomenon of many Cubans that emigrate retain their residency status. Reflecting the challenges facing the nation, the total working-age population is since 2016 beginning to shrink in absolute terms. The economic outlook has darkened, and the prospects of reaching advantageous agreements with allied nations are not encouraging. This is especially true for the Western Hemisphere. The reasons for this slowdown include external and domestic aspects. The external economic context has been changing negatively for Cuba. First of all, there is the economic crisis in Venezuela, whose effects are felt strongly in foreign trade. The drop in oil shipments have been substantial, taking into account that Venezuela’s oil production has gone from averaging 2.2 million barrels per day in 2016 to only 1.15 million in November 2018 (see further the section below). A second problem has been the erratic performance of two of Cuba’s main export industries, nickel and sugar, which have been adversely affected by setbacks in production and a decline in world market prices. A third problem has been the new policies of the Trump administration, which have had a particularly adverse impact in tourism and other related sectors. In addition, this more hostile bilateral climate may well have dissuaded potential investors from U.S. and third countries to be interested in commercial ties with Cuba. On the domestic front, as discussed above, hardly any new measures have been adopted as part of the “upgrading” since mid. 2015. Recent modification that have been implemented more recently, can be considered restrictive or of little practical value. Cuban authorities have responded with a policy mix that includes traditional tools with more unconventional approaches. On the one hand, in the short term, there are not many alternatives to belt tightening. Since July 2016, strong measures have been adopted to save resources in the public sector, particularly in relation to energy by reducing physical allocations to state entities. Likewise, import controls have been used to maintain a positive trade balance. Between 2013 and 2017, imports fell  by 27 percent, a reduction that cannot be attributed solely to price changes in international markets.

8  Cuban Socialism at 60: Old Aspirations and New Realities

179

From mid-2018 to February 2019, Cubans discussed and approved a new Constitution. For the first time since 1959, the Constitution explicitly recognizes private ownership over means of production. In addition, the possibilities of mixed ownership are recognized and extended. Likewise, for the first time, the market is mentioned as part of the economic and social model. The state also promotes and guarantees foreign investment. The text includes the right of workers to participate in the planning, regulation, management, and control of the economy. The language used to refer to the concentration of property in non-state subjects is more neutral. Nonetheless, the bias against the private and cooperative sector, especially the former, is maintained.

From Sugar Dependency to Dependency on Tourism and Medical Services Cuba has always been haunted by its dependency on a crop or a service. Before the Revolution, it was sugar exports to the United States. After the integration with CMEA in 1972, it was sugar again. Then came the collapse of the Cuban economy after the gradual demise of the ‘socialist camp’ after 1989. After the Special Period, when it was clear that the golden days of sugar exports (with robust prices) would not come back in the foreseeable future, the bet was on international tourism, and later on medical services. Figure 8.1 and Table 8.4 show this change of dependencies after 1989. In 1989 over 57% of the current account receipts were accounted for by sugar exports, followed by nickel (8.8%). By 2002 the share of sugar dropped to 5%, and now it was tourism that came to the rescue, with almost half of the current account receipts. By 2007 there was a new export item that accounted for over half of the 25000 20000 15000 10000 5000 0

0 Sugar

1989 Nickel

Tobacco

2002 Other goods

2007

2010

Remittances

Fig. 8.1  Receipts on Current Accounts 1989–2017 (million US$)

Tourism

2014

2017

Medical services

180

R. T. Pérez and C. Brundenius

Table 8.4  Foreign exchange income from current accounts, 1989–2017 (million US$) Current account Items Sugar Nickel Tobacco Other goods Remittances Tourism Other services Total

1989 3,364 522 116 1,044 0 870 0 5,916

2002 200 1,000 150 300 400 2,000 0 4,050

2007 203 2,081 236 1,166 1,447 2,236 7,824 15,193

2010 266 1,151 206 2,881 1,920 2,218 9,054 17,696

2014 416 742 227 3,472 3,129 2,546 9,000 19,532

2017 478 618 241 1065 3,575 3,302 8,077 17,356

Source: Statistical Yearbook of Cuba (various years); Havana Consulting Group

current account receipts: medical services.This was the result of an agreement with Venezuelan President Hugo Chávez, which amounted to a kind of ‘doctors for oil deal’. It is clear that Cuban medical personnel are a big asset to Cuba, and it is highly respected and welcomed in many parts of the world. In the past, Cuba sent such personnel as a solidarity gesture to countries in need (for instance to Central America). But in the case of Venezuela it was the first time that Cuba could get something in return. The deal was so successful that it was repeated in Lula’s Brazil, and was also a success in Bolivia until the coup against of President Evo Morales in November 2019. With the deteriorating situation in Venezuela after Chavez’ death in 2013, and the fall of oil prices after 2014, the deal has become problematic and it has been difficult to fulfill the agreement. To make the situation worse, the election of an extreme right-wing president in Brazil (in 2018) has led to a break in Cuban-­ Brazilian cooperation.

Impact of the Venezuelan Crisis on Cuba Lately there have arisen new problems for the already strained Cuban economy: the crisis and possible collapse of the Venezuelan economy, and on the top of that the tightening of the U.S. embargo against Cuba after the election of Donald Trump as successor to Barack Obama. The importance of Cuban depedency on trade with Venezuela is illustrated in Table 8.5. Cuba seems to have fallen from one dependency to another: first, the one on the Soviet Union that lasted until the collapse of the USSR in 1991, and then a new dependency on Hugo Chavez’ Bolivarian Socialist Venezuela. The heydays of Cuba–Venezuelan relations lasted until 2013, when Chavez died, and ad it got worse when the oil price started falling, making it increasingly difficult for Venezuela to continue the oil for medical services deal, which had worked quite well. Cuban exports of medical services to Venezuela continued also after 2015, but there was for the first time a decline in deliveries of Venezuelan oil. The oil delivery gap was filled by oil deliveries from Russia, but the PDVSA (the Venezuelan state oil company) paid the bill (Mesa-Lago and Vidal-Alejandro 2019).

181

8  Cuban Socialism at 60: Old Aspirations and New Realities Table 8.5  Cuban trade in goods and services with Venezuela, 2012–2017 (million US $) Exports of goods Imports of goods Exports of services Total trade As % of GDP (constant prices) Trade deficit

2012 2,484 6,079 7,454 16,017 20.8 −3595

2013 2,266 4,802 7,624 14,691 18.8 −2536

2014 2,069 5,188 7,383 14,641 20.8 −3119

2015 1,437 2,794 6,189 10,421 17.0 −1357

2016 642 1,582 5,189 8043 11.5 −940

2017 375 1,838 5,822 8035 12.4 −1483

Source: Mesa-Lago and Vidal (Mesa-Lago and Vidal-Alejandro 2019, p. 16)

The situation in Venezuela is critical. The economy has retracted more than 50 percent since 2014. Oil production has shrunk from 2.7 million barrels per day in 2014 to 996 thousand barrels per day during the first quarter of 2019. Under these circumstances, it is estimated that oil deliveries to Cuba will fall by the same dimension. In August 2017, the joint venture (oil refinery in Cienfuegos) between CUPET and PDVSA was closed down. The shrinking oil deliveries from Venezuela have, from 2017 through 2019, been compensated by crude oil supplies from Algeria and Russia. Venezuela has also been an important market for Cuban pharmaceutical products, which now threatens to disappear. A total collapse of the current regime in Venezuela would unquestionably be a serious blow to the Cuban economy, especially finding alternative energy sources. However, if the demise is gradual, that would give the Cuban government more time to adapt to a new situation, to consider new alternatives, for instance, finding new markets for its medical services. Such a possibility could be Mexico.

A New Great Debate? In the 1960s, there was a debate among Cuban economists and ministers about the options for a socialist economy, afterwards called the Great Debate (see p. 2). In this debate, also foreigners (mostly Marxists) participated. One would have expected that there would be such a vivid debate in Cuba when there are so many options at stake. There is a vivid debate going on among Cuban scholars and academics about the kind of model that Cuba should have and not least a discussion about urgent short-­term action and a long-term vision for such a model. These are very open debates with (almost) no political limits, in the sense that there is no (or very little) self-­censorship. These debates take place in Cuban publications, such as Miradas a la Economía Cubana6, and blogs and websites, such as Progreso Semanal and OnCuba y El Estado Como Tal. Frequently, also Cubans residing outside Cuba take part in these debates.  Published by CEEC (Centro de Estudios de la Economía Cubana), one of the most influential think tanks in Cuba. It belongs to the University of Havana. 6

182

R. T. Pérez and C. Brundenius

Unfortunately, there is no debate between the scholars and the government, although some digital platforms such as Cuba y La Economia and CubaDebate also invite Cuban former government officials to the debates. This also goes for the journal Temas. The urgent need of monetary unification is one of the hottest debated themes. Another is the role that private and cooperative sectors in Cuba could play in Cuba. Other topics are how to reform SOEs, how to promote foreign direct investment in Cuba, the need for an agrarian reform, and, not least, how the continuing trend of appalling income differences threatens to destroy one of the pillars of the Cuban Revolution, social justice. There are, in the debates, frequent references to the reforms in China and Vietnam, especially Vietnam (see Brundenius and Le Dang 2014). The government does not seem interested in the debates going on, and even less interested in interchanging opinions with the academic world. There may be dialogues and interesting vivid discussions inside the ruling circles, and within the party hierarchy, but they are not known to people at large, which is very unfortunate.

The New Constitution in 2019—A Step in the Right Direction? The most important political process in Cuba at this moment is the ongoing discussion surrounding the new Constitution. The new Constitution proposes transformations in a group of key areas of the country’s economic, political, and social lives. However, the final form these changes take, and their true scope, will be defined later in the legislative process that will adopt the corresponding legal norms and their practical application. This last element is not a minor thing in the Cuban context—which suffers from legal hypertrophy in some areas, frequent overlapping of the different rules and regulations, together with omissions and a lack of clarity that provides ample space for discretion. Unfortunately, the new proposal leaves open that possibility as will be seen later. Even so, we should assume that active and honest participation in this debate is a right and the duty of every citizen. Our country’s transformation requires, among other elements, this type of process. A frank and profound discussion requires information and elements to be debated and opinions heard from all sides. Explaining what has been done with the initial draft and trying to prove its merit is only part of that process. The public media should play a key role here by offering opportunities to responsible citizens with differing opinions to express themselves and their points of view while making others aware of their thoughts. One of the aspects that stand out with experts and ordinary citizens is related to forms of ownership. Title II includes the so-called Economic Fundamentals, while other rights of this type are included in Title IV’s “Rights, Duties, and Guarantees.” In general, Title II’s “Economic Fundamentals” follows three basic guidelines. First, it adheres to the provisions of the so-called Conceptualization of the Cuban economic and social model. This is one of the central documents adopted at the VII Congress of the Communist Party in April 2016, specifically chapters two and three. Hence, it shows some of the contradictions and omissions of that document.

8  Cuban Socialism at 60: Old Aspirations and New Realities

183

Secondly, the new Constitution establishes a type of state based on the predominance of social ownership over the fundamental means of production and planning as the nucleus of the economic management system. Although the rule makes sure to underline that in Cuba the typical market economy system does not apply, it introduces appreciable transformations that bring the effective model closer to what are known as mixed economies, those where different forms of property coexist and there is space for market relations. This is a remarkable change whose scope goes beyond the text of a Constitution and will depend essentially on how the new economic policy is handled within the framework of the new contradictions that are going to occur in practice. Thirdly, it is important that the text explicitly recognizes private ownership of certain means of production. There is no doubt that this is one of the milestones of the proposal and one of the changes that has the greatest potential to generate future transformations. In addition, the possibilities of mixed ownership are recognized and extended, which can generate interesting possibilities for the repositioning of companies of different types. Likewise, for the first time, the market is mentioned as part of the economic and social model. The treatment given to both constitutes an implicit acknowledgment of the nonviability of the centralized national planning model, tested over several decades in Cuba, and which has not produced the welfare quotas required by the nation. The intersection of Articles 21, 22, and 28 leaves us with the fact that in practice, the only private property that the Cuban State does not promote, and to which it provides less guarantees, is the private property owned by Cuban nationals. In other words, Cuban citizens enjoy fewer property rights in their own country than foreigners. While considering the notion of migrating to another model, the greatest danger lies in producing an incomplete transformation from the very beginning. In this sense, several weak points are detected that can be a source of confusion and discretion later. What sticks out most is the bias against private property, the abstract ranking of the merit of the different forms of property, the feeble treatment of social control over companies that are recognized as “socialist property owned by all the people,” and the constraints placed on the full exercise of property rights. The wording transmits a bias against private property, both in the exercise of the corresponding rights and in its socioeconomic role. In the description of the different types of property, the only one mentioned bounded “in accordance with the provisions” is private property. It is argued that the superior form is the socialist state enterprise and that the state encourages the forms considered more social. The superiority of one form of property over another should not be a legal, ideological, or administrative matter. The regulatory framework should encourage everyone to develop their potential to the fullest, under predictable and fair rules of the game, which avoid the hijacking of decision-making to favor one over the other. The alternative is the slow advance of the productive forces, as it has been up to now, compromising the present and the future of the country, especially of the new generations. There is no empirical evidence in Cuba, or anywhere else, that supports the preeminence of one form over another.

184

R. T. Pérez and C. Brundenius

The bias is especially striking because Article 28 reads that the state promotes and provides guarantees for foreign investment, which is private. The intersection of Articles 21, 22, and 28 leaves us with the fact that in practice, the only private property that the Cuban State does not promote, and to which it provides less guarantees, is the private property owned by Cuban nationals. In other words, Cuban citizens enjoy fewer property rights in their own country than foreigners. It is difficult to understand how the Constitution of a country could legitimately enshrine this type of discrimination against its citizens. The explanation of this contradiction cannot be ideological, given that the merit of foreign private property was accepted. The argument is essentially political. Unfortunately, we will not reach the necessary prosperity quotas until the productive forces within the country are fully liberated. And that implies equal consideration to domestic private investment. Predictably, the limits to the concentration of property will fall essentially on nationals, which is another error. If this results from proper management and compliance with taxes, it should be considered legitimate. The exercise of generally recognized property rights is severely limited. For example, private property of land is regulated by a special regime. In practice, both the limits that are explicitly established in Article 29, and those that presumably will be incorporated into specific legislation, imply that the actual exercise of these rights has been curtailed so that their recognition is practically a formal exercise. This reappears again in Article 57 of Title IV, which very narrowly recognizes these rights to quickly limit that this right must be in accordance with the provisions of the law. In Title II itself, the term “due” is used instead of “just” to refer to compensation in the case of expropriation of property for reasons of public interest. Interestingly, it is used in the case of land. This is very curious because in the absence of a land market, it is not very clear where information for fair compensation on pricing would be obtained. The Magna Carta draft is ambiguous in this case, which results in an effective lack of protection of property rights. Unfortunately, this is also true for everyone’s socialist ownership rights. In this case, the state represents these rights. The problems suffered by public entities in terms of the interests of the owners, and those who represent them, are well known. It is reflected in specialized literature as the contradiction between the agent (in this case, the state and those it designates to represent it) and the principals (the owners; in this case, the Cuban people). What has happened in practice in these contexts is that management and decision-­ making have been bureaucratized, alienating not only the entire people (the owner) but their own workers (part of the people, and the most direct owners, if you will). Given that the new constitutional project manages to be so specific in other aspects mentioned above, the inclusion of some basic principles for a change in the management of the state company that provides guarantees for the exercise of citizen control and its workers should be considered. In general, Titles II and IV contain positive aspects and numerous contradictions. There are advances impossible to ignore which will generate new dynamics in Cuban society. A characteristic that is perceived throughout the text of the proposal is that virtually all provisions and guarantees are limited by “what is established in the law.” That is, legal norms of lower rank have the ability to define and interpret

8  Cuban Socialism at 60: Old Aspirations and New Realities

185

the provisions of the Constitution. At the height of the second decade of the twenty-­ first century, there remain too many lags of the old nationalized model, which did not produce what was promised so many times in the past. Article 13, paragraph (e), states that the state’s objective is to promote development that guarantees individual and collective prosperity. Well, it is regrettable that you miss the opportunity to equip yourself with all the possible means to achieve such a laudable goal, and that in this way, the country’s own citizens do not have the opportunity to exploit their full potential.

Some Reflections on Cuban Socialism and Its Future If you meet a Cuban in Havana, or for that matter anywhere in the island, and ask her/him what Cuban socialism is, you frequently get the answer: free health services and free education. They might add solidarity. If the question was asked in the 1980s, it is very likely that the answer had included social justice and equality (income distribution, for instance). And if we go back to the 1970s, the answer might also have included that the Cubans are guaranteed basic needs (food, clothing, shelter, etc.), a decent life in general with a stable and secure employment (including guaranteed pensions to live on, after 55/60). The situation today is that only free health services and free education are intact. And for that matter, free education and health services also exist in other countries that are not necessarily socialist (such as the Nordic countries and also in many other countries in Europe). So what about equality? From having a very equal income distribution before 1989, Cuba has now a Gini that equals many other countries in Latin America (see Table 8.2). The Gini may today be as high as 0.45, according to the former Minister of Economy and Planning, José-Luis Rodríguez.7 The skewed income distribution is partly the result of a bifurcated economy where there are two types of consumers: those with access to foreign currency (or CUC) and those that have to live with pesos (a CUC is valued at 24 pesos). Accordingly, there is a market in CUCs, and another one in pesos. As discussed, one of the most urgent measures in Cuba is unify the two currencies, although that might lead to unwanted and unfortunate consequences. What about basic needs? Cuba is still not able to satisfy food demand from domestic production. It is estimated that 70% of the food consumed in the island is imported. The housing situation has not eased. Some have benefitted from the reform that makes it possible to sell and buy dwellings (or houses) that one owns. Some people own apartments or houses in very attractive locations, and therefore get high prices, while others have been living in zones that are not so attractive. This is, of course, an effect when a planned economy collides with a market economy that does not care about “social justice.”  Temas, March 2019.

7

186

R. T. Pérez and C. Brundenius

Cuba is confronted with many problems today. It is not clear how the “Updating of the Model” will solve these problems. The Cuban government does not like the word “transition” because that sounds like returning to capitalism (like what happened in Eastern Europe). Instead, they prefer talking about the transformation of the Cuban economy. It is clear to us that a rapid return to capitalism is out of the question because it is not the solution. Socialism, yes, but what kind of socialism? Socialism cannot be defined just as free education and free health services. Solidarity is also an epithet that fits socialism. Cuba has shown international solidarity with other peoples struggling for their freedom. So, for instance, in South Africa people are very fond of Cuba. Cuba was one of the first countries that Nelson Mandela visited  after beeing freed from prison. This was  his tribute to the Cuban people: The Cuban people hold a special place in the hearts of the people of Africa. The Cuban internationalists have made a contribution to African independence, freedom and justice unparalleled for its principled and selfless character. The defeat of the racist army at Cuito Cuanavale has made it possible for me to be here today! Cuito Cuanavale was a milestone in the history of the struggle for southern African liberation!8

This is just an example of Cuba solidarity. Cuba has thousands of teachers and medical personnel in Latin America and Africa. The story of this internationalism is recorded in many articles and books (see, for instance, Huish and Kirk 2016). But there is no time to live on one’s laurels. Cuba must find a way to remain “socialist” in the sense of keeping impressive welfare reforms with free education and health services, while at the same time seriously transforming the economic fundamentals to achieve a viable economy, which requires deeper and accelerated reforms. If the current reform process is conceived as a means to to change, or “upgrade” essential elements of the “Cuban economic model,” in order to improve economic performance, and to increase the standard of living of  the majority of Cubans, then it has not been successful so far. There are, however, also more optimistic voices (see e.g. Morris 2014). The “updating” itself suffers from serious internal contradictions. The economic growth that is warranted in public discourse is incompatible with the restrictions that at the same time are applied to the non-state sector, with the enormous state bureaucracy, with the excess of unnecessary control mechanisms, and with the ignorance of basic elements of the functioning of an economic system. Conceiving a dynamic economy where all sectors and social strata advance at the same speed is an illusion. Some degree of inequality is concomitant to dynamic economies. But Cuba’s biggest challenges are not economic, they are political. The main structural and other factors that explain the formation and evolution of the Cuban model have changed radically, or will be changing in the near future. These factors include political leadership based on charisma and legitimacy granted by history, the existence of external partners able and ready to provide an exceptional framework for economic and political support, the relative homogeneity of the Cuban  https://cuba-solidarity.org.uk/news/article/3620/the-30th-anniversary-battle-of-cuito-cuanavale

8

8  Cuban Socialism at 60: Old Aspirations and New Realities

187

population originating in relatively small income disparities, and  imbued with  a socialist ideology accepted by a majority of Cubans. But that Cuba does not exist any more, and yet Cuba’s economic isolation from the rest of the world, as a result of the intensified U.S. embargo, continues. For over 70 years, an underlying assumption in theoretical discussions in Cuba about socialism has been that formal socialization of the means of production would automatically lead to a more just society and with a stronger economy. The alienation of man would disappear. Reality, however, turned out to be different. In Cuba, rapid socialization of economic assets by means of nationalization created its own problems. The rule of capital was replaced but just by bureaucratic control and the uncontested leadership of the party. Neither the party nor the government institutions make room for real participation of the people. A similar pattern is observed in the SOEs where workers struggle to effectively participate in the main decisions of their enterprises. State ownership and central planning also created their own problems, setting an incentive and reward structure not conducive to innovation, efficiency, or productivity growth. That accelerated the quest for favorable trade and financial agreements that could compensate for poor economic performance. Moreover, initial gains in inequality reduction have been recently eroded by an economic structure that reproduced past patterns of overdependence on very few dynamic and internationally competitive sectors (Torres 2014). Cuba’s economy faces significant challenges exacerbated by crippling U.S. sanctions spanning six decades. In that context, it looks increasingly possible that Cuba turns for guidance to the very successful Asian experiences in China and Vietnam if it wants to continue building socialism. Many observers have scenarios for the Cuban future (see Bye 2019). Cuba is in a very difficult situation, pressed from many sides. What we know from the past is that the more tightening of the embargo, the more the Cuban government (and party) will respond with reversals in the reform process. We agree with the observers that say that there is only one chance left for Cuba in this situation: Learn from Vietnam, above all from the market socialism of Vietnam (Brundenius and Le Dang 2014). As Mesa-Lago puts it, “Unfortunately the pace of reforms (in Cuba) has been slow and subject to restrictions, disincentives and taxes that have impeded the advance of the private economy and desperately needed growth. It is time to ­abandon this failed model and shift to a more successful one as in China and Vietnam” (Mesa-Lago 2019).

References Brundenius C (1984) Revolutionary Cuba: the challenge of economic growth with equity. Westview Press, Boulder Brundenius C (1990) Some reflections on the Cuban economic model. In: Halebsky S, Kirk JM (eds) Transformation and struggle: Cuba faces the 1990s. Praeger, New York Brundenius C (2002a) Cuba: the retreat from entitlement? In: Abel C, Lewis CM (eds) Exclusion and engagement: social policy in Latin America. Institute of Latin American Studies, London Brundenius C (2002b) Whither the Cuban economy after recovery? J Lat Am Stud 34(2):365–395

188

R. T. Pérez and C. Brundenius

Brundenius C (2009) Revolutionary Cuba at 50: growth with equity revisited. Lat Am Perspect 36(2):31–48 Brundenius C, Torres R (eds) (2014) No more free lunch. Reflections on the Cuban economic reform process and challenges for transformation. Springer, New York Brundenius C, Le Dang D (2014) Innovation, entrepreneurship and SMEs. What can Cuba learn from the Vietnamese reform process? In Brundenius and Torres (eds) (2017) Brundenius C (2015) Patrones de crecimiento en Asia del Este y en América Latina: Es Cuba una excepción. Publicaciones Acuario, Havana Bye V (2019) Cuba: from Fidel to Raúl and beyond. Palgrave Macmillan, London Huish R, Kirk JM, (2016) Cuban medical internationalism and the development of the latin american school of medicine. Latin American Perspectives 34 (6):77–92 Huberman L, Sweezy P (1961) Anatomy of a revolution. Monthly Review, New York Kalecki M (1976) Hypothetical outline of the five year plan 1961-65 for the Cuban economy. In Kalecki, essays on developing countries. Hassocks 1976 Mesa-Lago C (1981) The economy of socialist Cuba: a two decade appraisal. University of New Mexico Press, Albuquerque Mesa-Lago C (2000) Market, socialist, and mixed economies. Comparative and performance in Chile, Costa Rica and Cuba. Johns Hopkins University Press, Baltimore Mesa-Lago C (2019) There’s only one way out for Cuba’s dismal economy. New York Times (28 March 2019) Mesa-Lago C, Pérez Lopez JF (2005) Cuba’s aborted reforms. University Press of Florida, Gainesville Mesa-Lago C, Pérez Lopez JF (2013) Cuba under Raúl Castro: assessing the reforms Lynne Rienner. Publishers, Boulder Mesa-Lago C, Vidal-Alejandro P (2019) El impacto en la economía cubana de la crisis venezolana y de las políticas de Donald Trump. Real Instituto Elcano, Madrid. Documento de trabajo 9/2019—30 de mayo Mesa-Lago C, Veiga R, González L, Vera S, Pérez-Liñán A (eds) (2017) Voces de cambio en el sector no estatal cubano. Iberoamericana, Madrid Mills CW (1960) Listen yankee! The revolution in Cuba. McGraw-Hill, New York Monreal P (ed) (2002) Development prospects in Cuba: an agenda in the making. Institute of Latin American Studies, London Morris E (2014) Unexpected Cuba. New Left Rev 88 ONEI (2019) Statistical Yearbook of Cuba 2018. Oficina Nacional de Estadística e Información, Havana. PCC (2011) Los Lineamientos de la Política Económica y Social. Havana 2011 https://www.pc.cu/ lineamientos  Piñeiro Harnecker C (2013) Cooperatives and socialism: a view from Cuba. Palgrave and Macmillan, New York Ritter ARM, Henken TA (2015) Entrepreneurial Cuba: the changing policy landscape. Lynne Rienner Publishers, Boulder Silverman B (ed) (1971) Man and socialism in Cuba: the great debate. Atheneum, New York Smith WS (1987) The closest of enemies: a personal and diplomatic history of the Castro years. W.W. Norton & Company, New York Spaldoni P (2014) Cuba’s socialist economy today: navigating challenges and change. Lynne Rienner Publishers, Boulder Torres R (2014) Transformations in the Cuban economic model: context general proposal and challenges. Lat Am Perspect 41(4):74–90 Torres R (2016) Vicinity matters: Cuba’s reforms in comparative perspective. International Journal of Cuban Studies 8(2):169–184 Torres R (2017) Updating the Cuban economy: the first 10 years. Social Research: An International Quarterly 84(2):255–275 Yaffe H (2009) Che Guevara: the economics of revolution. Palgrave Macmillan, London

Chapter 9

Who Can Save Us from Ourselves? Kenneth Hermele

I suspect that everyone who reads this collection of essays already is cognizant of two major life- and planet-changing trends which have manifested themselves ever more strongly during the last 40 years: 1. Climate change caused by human activities, resulting in the Earth entering a new geological period, the Anthropocene (Crutzen 2002) 2. The reduction of species, which has reached such a speed and incidence that it is appropriate to speak of the present era as the Sixth Mass Extinction of species (WWF 2016, Williams et al. 2015) These trends, taken together, show that we are moving, as a global society, in the wrong direction when it comes to curbing the forces which so insistently are driving climate change and biodiversity loss. The period of grace allowed us as a global system before the opportunity to stabilise the climate (irrespective of if the acceptable increase in temperature is set at a rise of 1.5 or 2° C) is growing ever shorter, if it has not closed already. Even the latest report of the IPCC stipulates that the trend has to be countered by 2030 at the latest; after that, it will be too late (IPCC 2018). Too late for what? one may well ask. The answer, it appears, is that the globe will enter unchartered territory as far as climate change is concerned (again, if we aren’t already there). An unknown future is however not necessarily to be equated with doomsday and imminent Apocalypse, although such scary scenarios are perfectly possible. One may cling to the hope that climate change does not herald the end of KH, economist and human ecologist. KH has taught development economics and ecological economics at the universities of Uppsala, Lund, Växjö and Gothenburg, Sweden. In 2012, he defended his PhD thesis—The Appropriation of Ecological Space. Agrofuels, Unequal Exchange and Environmental Load Displacements. Routledge 2013—at the Department of Human Ecology, Lund University. K. Hermele (*) School of Global Studies, University of Gothenburg, Gothenburg, Sweden e-mail: [email protected] © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_9

189

190

K. Hermele

the earth, only (!) the end of the earth as we know it, but one nevertheless would think that such prospects would be enough for global society to finally take action. Still, what is clear to each one of us as individuals seems to be beyond the grasp of our global governance structures as a whole, and this also holds true for the national governing bodies which we, in democratic societies, vote into power. Nowhere are adequate action to stave off the catastrophes which are gathering pace to hit the global ecosystems contemplated. The question is, Why? The political paralysis does not stem from a lack of understanding or a dearth in available scientific knowledge; information has been present describing what the economy is doing to the atmosphere and to the ecosystems. Over 100 years ago, in 1896, the chemist Svante Arrhenius discussed what we today call the greenhouse effect, paradoxically about the same time that use of fossil fuels began to rise exponentially. Closer to our present frame of observations, in 1979, US natural scientists summed up “the long-term impact of atmospheric carbon dioxide on the climate” and concluded that the Earth’s average temperature was set to increase by 2–3° C, which would cause serious droughts in North America, Asia and Africa, and simultaneously cause the ice at the poles to melt and the sea level to rise (MacDonald et al. 1979). This was 40 years ago. Again, the question is, Why no relevant measures were taken? It is not that we are incapable of large-scale investments and technological innovations when we as a collective feel a need for them; it is only that such momentous periods have mostly been brought about in relation to armaments and space explorations. But when it comes to initiate the development trajectories which we for decades have known are needed in order to curb the drivers of climate change and ecological destruction, the necessary decisions are conspicuous by their absence. Again, we have to ask, Why? One explanation, which frequently is left out of the debate, is that adequate and meaningful policies have come up against powerful opposition from giant corporations operating on a global scale, for instance, the group of corporations—most notoriously, Exxon (Hall 2015)—which form the powerful lobbying organisation the Global Climate Coalition (Revkin 2009). Against such opponents to relevant policy moves, the environmental argument has been found to be next to powerless. But the question is still, Why corporations act this way? Is their only concern short-term profits? I think not. The fact is that even profitable steps which could lead the economy in the right direction—such as policies to promote energy efficiency and sustainable transport solutions—are left unexplored in spite of their proven economic rationality, as witnessed by the reluctance (to use a nice word) of major industrial firms and public utilities to implement readily available technology in their day-to-day activities (McKinsey 2010). Whatever it is that these market actors are maximising, it is not short-term profits. To sum up, everyone who wants to know what is happening to our ecosystems, and why, is already aware of the situation and of the need to take action, yet nowhere is such action forthcoming. As a global society, we do not meet the climate challenge by altering any of the main drivers; the sad truth is that we do not even attempt to modify them substantially. One reason for this miserable state of affairs, I believe,

9  Who Can Save Us from Ourselves?

191

is the reluctance that even climate change scientists show in questioning the major underlying driver, economic growth and the quest for ever more natural resources driven by growth. The global socioecological metabolic regime, which has ruled during the last 200 years or so, has proven to be a relentless driver towards ever more unsustainable patterns of production and consumption (Fischer-Kowalski and Haberl 2007). This negative relationship between economic growth and ecological sustainability has recently been confirmed or perhaps I should say reconfirmed for the umpteenth time (Järvensivu et al. 2018). I fail to see why the reception which has been accorded to earlier critiques of economic growth—i.e. a collective shrug by the wielders of political power—should fail to materialise also this time around. The wielders of economic power are not alone in disregarding economic growth as a driver. The centrality of growth to climate change and ecological destruction is also oftentimes lost in the elaboration of scenarios by concerned scholars. Instead, their prime concerns, as evidenced by the scenarios they present, are widening class differences and the seemingly unstoppable growth of nationalist political movements in Europe, the Americas and Asia. Although such trends certainly are worrisome (an understatement) and merit our full attention—and here I include all who care about human development and free and equitable societies—it nevertheless boggles my mind why these stands should be so hard to combine with a relevant attention to the ecological dimension of what is, at least to me, mutually reinforcing crises (in the plural) encompassing economic, social and ecological dimensions. It is as if “growthmania” (to use Herman Daly’s apt term, see Daly 1977) still rules supreme. Thus, I am intrigued by calls to action which do not foreground ecological issues. Here is a recent example of this take on the core issues of our times, a manifesto “to save Europe from itself” where it is stated that “Europe must build a new model to ensure the fair and lasting social development of its citizens” (Piketty 2018). But how would such a “model”—if one was to be designed—deal with the overall contradiction of growth-ecological sustainability? No answer is provided, and we are left without even an embryo of a response to one of the most daunting questions: How to maintain a welfare society within acceptable ecological limits? In fact, the manifesto’s concern is limited to social and political issues and so worried about the nationalist and xenophobic turn of European politics that it “forgets” to even mention nature, the environment or ecological sustainability. This is just one example, but a significant one, I believe. Other similar arguments in favour of equity and social sustainability equally downplay the ecological dimension of the combined crises or at best introduce “the environment” as an afterthought. For instance, in a penetrating account of the social consequences of the widening social inequality in the USA, natural resources enter primarily as something upon which taxes should be levied, not as a fundamental precondition for human life on Earth (Stiglitz 2013). In an equally well-informed account of why social equality trumps wealth in shaping welfare, it is argued that since the degree of environmental problems varies even among economies with similar levels of output and wealth—depending on their varying degrees of inequality—a way

192

K. Hermele

“to solve the problems which threaten us all” is simply by making societies more equal (Wilkinson and Pickett 2010, p. 233). The hope here expressed is not, to my mind, far away from the illusions which over the years have been voiced by the proponents of the possibility of a decoupling of economic growth from environmental destruction, illusions which, I believe, are based on a posited “dematerialisation” of the economic process (OECD 2002). Sometimes, these assertions only refer to relative decoupling—in effect a measure of increased efficiency but not a proof of an absolute reduction of the environmental pressure—such as when the International Energy Agency claims that although economic growth occurred in the OECD region during the last couple of years, energy-­ related emissions of carbon dioxide remained stable. I balk at the conclusion presented by the press release which announced that for the first time since the 1970s, economic growth occurred without a concomitant rise in the emissions of carbon dioxide: “Decoupling of global emissions and economic growth confirmed” (IEA 2016). Equally worrying is the fact that such conclusions, as irrelevant as they are to the real task put before us by climate change, lack a global perspective. Also, the claim that we are witnessing relative decoupling relies on a national logic which rules out the shifting of environmental loads from rich to poor countries via international trade. Should a really global perspective be applied—a perspective where the consumption of goods decides which economy should carry the weight of the emissions caused irrespective of where they were “produced”—the fact is that economic growth brings forth an increased environmental load (although that will only be discernible if we allow for international trade to enter the picture). On average, a comprehensive study concludes each per cent of economic growth causes a concomitant increase of material goods of 0.6 per cent, which allows it to state that relative (but not absolute) decoupling is the rule. Even more significant, analysing the EU, the USA, Japan and the OECD as a whole, and applying the logic of consumption and not production, the study states that “no improvement in resource productivity at all” could be observed. No improvement in resource productivity at all. “This means”, it explicitly says, “that no decoupling has taken place over the last two decades for this group of developed countries” (Wiedmann et al. 2015, p. 6273). The conclusion should be apparent: Minor or even considerable policy shifts will not resolve the issues confronting the global economy, not to speak of pinning one’s hope to “business as usual” or to corporate lobby organisations’ claims of efficiency gains. In order not to be seen as too harsh in my judgement, I must hasten to stress that there are many steps being taken in order to increase the efficiency with which we produce our lifestyles, but it is also true that these moves—gradual and ineffective as they often are—nowhere match the radical change of course which is required in order to begin to direct us down the road towards sustainability in both its ecological and social dimensions. However, there also exist scenarios which question the dominating growth paradigm, such as “degrowth” or “eco-socialism”, scenarios which are presented by analysts which are equally worried as I am about the consequences of the trajectory of the global economy (Kallis 2011, Löwy, this collection). Such scenarios have,

9  Who Can Save Us from Ourselves?

193

I believe, much in common with the ideas presented by Barry Commoner and Herman Daly over 40 years ago in their critique of technology and growthmania, respectively (Commoner 1971; Daly 1977). With the use of concepts which have become current in the ecological critique of economic growth since then, we may say that the basic idea already back then was to substitute a sustainable metabolic regime for the destructive focus on continued economic expansion and the technological changes which underpinned it. For those familiar with the steady-state perspective, none of this comes as a novelty but rather reinforces the points made when the concept was launched (Daly 1977): A steady-state economy requires that the stock of people and artefacts passing through society be kept at a steady level and below acceptable thresholds of sustainability. To achieve this, three social institutions were to be imposed (yes, I think that “imposed” is the right word in order to underline the coercive nature of the model proposed by Daly): the imposition of “birth rights” to come to grips with population growth, in effect taking away the right to procreate freely; the imposition of resource use quotas to check the flow of resources and cap them below the relevant thresholds, in effect doing away with the right of corporations and utilities to procure and process as they see fit; the imposition of a tax system which would limit the level of inequality by setting maximum and minimum income and wealth levels, ushering societies into a new phase of equality (Daly 1977, pp. 50–76). Thirty five years later, proponents of degrowth echo these concerns by arguing in favour of a “State that institutes salary caps, sets strict emission caps, increases taxes [on] the rich or bans advertising” (Kallis 2011, p. 878). And we will recognise the major policies suggested in order to usher the global economy into “sustainable degrowth”: redistribution (of work and leisure, natural resources, wealth) and improved social security, all in an effort to “reduce throughput and manage a stable adaptation to a smaller economy” (Kallis 2011, p. 876). This policy package is possible to envision being tabled without major impositions in the freedoms of capital and major enterprises, but it nevertheless presupposes a significant change in the balance of the existing economic and political powers, without questioning the nature of the economy as a whole, that is, without challenging the power of capital in our societies. I believe that it is this combination of rather mild policy measures—laudable as they are—which causes critics to brand degrowth “an impossibility theorem” as degrowth is seen to be incompatible with capitalism (Bellamy Foster 2011). Instead, we are advised to view degrowth as a limited undertaking, which certainly is sensible in an ecological sense but nevertheless insufficient as an overall strategy. What is needed, we are led to understand, is a wholesale “transition to a sustainable, egalitarian, communal order […] that will bring together the traditional working-class critique of capital, the critique of imperialism, the critiques of patriarchy and racism, and the critique of ecologically destructive growth” (Bellamy Foster 2011). A tall order, indeed, but not without precedents: this is not the first time the call for dramatic change is heard. Compare the policy moves outlined above with the need to change “the march of history” which Barry Commoner foresaw as ­necessary almost 50 years ago (Commoner 1971, p. 300). The reason underlying this need,

194

K. Hermele

Commoner argued, was that it had to be recognised that the principal foe of ecological sustainability—to use a term which wasn’t current at the time—was the combination of strong, unrelenting drivers such as “population size, degree of affluence, and the tendency of the productive technology to pollute”, all of which were pushed forward by “a phalanx of potent economic, political, and social forces” (Commoner 1971, p. 175, 300). With the formidable opponents to ecological sustainability identified by Commoner 50 years ago, it is not surprising that we remain stuck in the environmental crisis of today in spite of all the attention paid to “sustainability” and environmental “problems.” It is growing increasingly evident, at least to me, that a turnabout in the present destructive growth pattern will not be brought about by voluntary decisions (such as altering the impact of individual lifestyles, although such changes may in fact be the only substantial change that we as individuals can set in motion) or by processes of change initiated by a democratically elected polity. At least as things stand today. We have been here before when a newly awakened environmental movement looked for alternatives and found hope in the establishment of ministries of the environment (a trend which commenced after the Stockholm UN conference on the environment in 1972) and the popularity of command-and-control policies to reduce pollution and emissions, all necessary but, as it has been proven, insufficient steps in order to achieve a break with the continuous descent into ecological destruction. The outcome of all of these policies, institutions and conferences, we now know, has been an utmost failure. What about the future? It is not impossible that a democratic and socially acceptable shift from growthmania will be initiated, but it has to have a global scope as the environmental issues it will be set up to deal with are global and witness climate change and biodiversity loss of the oceans. Although it may be reasonable to contemplate the “possibility of a non-totalitarian, popularly elected government with a mandate to redistribute and plan in the direction of sustainable degrowth” (Kallis 2011:879), the real question still remains: What political forces may usher us as a global society into a novel state of really sustainable and equitable development? For instance, does “democratic ecological planning”—to use the concept suggested by Michael Löwy (this volume)—hold out any promise of an alternative to the road taken so far by almost all economies, planned or not? Economic transformation, Löwy argues, including the quest for full employment and a general “egalitarian vision” will only be embraced by the working class if working-class people are made part of the planning process, democratic ecological planning being the “core of eco-socialism”. Negating the “blind market” as well as an “ecological dictatorship of ‘experts’”, we are left with “popular decision making processes” (Löwy). In other words, we are left with the democratic processes which in fact have been working for at least the last hundred years, i.e. since the victory of democracy. To perhaps state the obvious, democratic systems have until now proven unable to eschew or block the development paths which have brought us to where we are today. Something else is required; I am only at a loss to say what.

9  Who Can Save Us from Ourselves?

195

Some ideas are being floated which, if taken seriously, may change the way we do politics. Direct—as opposed to representative—democracy may be a step in the right direction, although it is recognised that also popular participation may lead to decisions which opt for material improvement and economic growth over ecological sustainability (Löwy 2018). After all, the dominant political trend today is a turn to the right, to nationalism and to isolationalism, including the denial of the reality of climate change and ecological mayhem. Democracy and democratic elections have not helped in supporting or even identifying ecologically and socially sustainable pathways. This is a worrisome conclusion; I fear that the political will which will manifest itself through democratic processes will continue to lead us along the wrong path, thus bringing us ever further from social and ecological sustainability rather than being the way to break the present unsustainable development. I find similar fears expressed by observers of the new angry classes in Europe and elsewhere (branded the “dangerous classes” by Guy Standing (2018)). “Dangerous” should here be seen as a double-edged term, dangerous to the continuation of business as usual as well as dangerous to the liberal order of democratic societies. Sadly, it seems that it is the second danger that is the real one where an ever angrier populace seems ready to embrace neo-fascists and xenophobic political positions. This, to say the least, does not bode well for the transitional push we are looking for. I would be loath to conclude on such a pessimistic note, however, and look for optimism and inspiration in the historic record of the rapid transformation of the economies which occurred in order to fight fascism during World War II, in effect channelling resources away from private consumption and deploying them to produce arms (Kallis 2011). We are not, it seems, totally incapable of carrying out impressive mobilisations of people, money and resources if only we see the need for it. Personally, I prefer to reflect on the last time we as a global society reacted adequately to a perceived threat to civilisation and humanity as a whole, the post-World War II period. In the aftermath of the destructive period which opened with WWI and concluded with WWII 25 years later, a new world order was created. Although it was far from perfect—witness nuclear armament, colonial wars and imperialist expansion, only to mention the most obvious cases—and given that it omitted the ecological dimensions of development from the global consensus which was tabled at such venues as the Bretton Woods conference in 1944, this order nevertheless constituted a radical break with the preceding period. In effect, a new compromise between labour and capital was established, which opened up for the subsequent period of growth and social equity, which later has become known as the era of “golden capitalism”, the 25 years’ period leading up to the mid-1970s. All we have to add to this compromise today is the ecological dimension. I do not think it impossible that a comparable new dawn may be upon us in the not-too-distant future—although I would not go as far as to hold it probable. If nothing else, the ecological crisis, which appears to be running amok, could bring ever more people to realise that something basic, profound and serious is amiss as we continue on the slippery slope of business as usual. And such insights may then be

196

K. Hermele

turned into political action, leading to the conclusion that the only ones who can save us from ourselves are we.

References Bellamy Foster J  (2011) Capitalism and degrowth: an impossibility theorem. Mon Rev 62(8). https://monthlyreview.org/2011/01/01/capitalism-and-degrowth-an-impossibility-theorem/ Commoner B (1971) The closing circle: confronting the environmental crisis. Jonathan Cape, London Crutzen PJ (2002) Geology of mankind: the anthropocene. Nature 415(23). https://www.nature. com/articles/415023a Daly, HE (1977/1992) Steady state economics, Earthscan, London Fischer-Kowalski M, Haberl H (eds) (2007) Socioecological transitions and global change: trajectories of social metabolism and land use. Edward Elgar, Cheltenham Hall S (2015) Exxon knew about climate change almost 40 years ago, Scientific American. https:// www.scientificamerican.com/article/exxon-knew-about-climate-change-almost-40-yearsago/. Accessed 26 Oct 2015. IEA (2016) Decoupling of global emissions and economic growth confirmed, https://www.iea. org/newsroom/news/2016/march/decoupling-of-global-emissions-and-economic-growth-confirmed.html IPCC (2018) Global Warming of 1.5o C, Summary for Policy Makers, https://www.ipcc.ch/site/ assets/uploads/sites/2/2018/07/SR15_SPM_High_Res.pdf Järvensivu P, Toivanen T, Vadén T, Lähde V, Majava A, Eronen JT (2018) Global Sustainable Development Report 2019 drafted by the Group of independent scientists invited background document on economic transformation, https://bios.fi/bios-governance_of_economic_transition.pdf Kallis G (2011) In defence of degrowth. Ecol Econ 70:873–880 Löwy M (2018) Why ecosocialism: for a red-green future, this volume, https://www.greattransition.org/images/Lowy-Why-Ecosocialism.pdf MacDonald G et  al (1979) The long-term impact of atmospheric carbon dioxide on climate, Technical Report JSR-78-07, US Department of Energy, Washington, DC, https://fas.org/irp/ agency/dod/jason/co2.pdf McKinsey (2010) Impact of the financial crisis on carbon economics: version 2.1 of the global greenhouse gas abatement cost curve, https://www.mckinsey. com/business-functions/sustainability-and-resource-productivity/our-insights/ impact-of-the-financial-crisis-on-carbon-economics-version-21 OECD (2002) Indicators to measure decoupling of environmental pressure from economic growth, SG/SD (2002)1/Final, http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?do clanguage=en&cote=sg/sd(2002)1/final Piketty T (2018) Our manifesto to save Europe from itself, The Guardian. https://www.theguardian.com/commentisfree/2018/dec/09/manifesto-divided-europe-inequality-europeans. Accessed 8 Dec 8 201.8 Revkin AC (2009) Industry ignored its scientists on climate, New  York Times. https://www. nytimes.com/2009/04/24/science/earth/24deny.html. Accessed 23 Apr 2009. Standing G (2018) The precariat: today’s transformative class. https://www.greattransition.org/ images/Standing-The-Precariat.pdf Stiglitz JE (2013) The price of inequality: how today’s divided society endangers our future. Norton, New York Wiedmann TO, Schandl H, Lenzen M, Moran D, Suh S, West J, Kanemoto K (2015) The material footprint of nations. PNAS 112(20):6271–6276

9  Who Can Save Us from Ourselves?

197

Wilkinson R, Pickett K (2010) The spirit level: why equality is better for everyone. Penguin, London Williams M, Zalasiewicz J, Haff P, Schwägerl C, Barnosky AD, Ellis EC (2015) The Anthropocene biosphere. Anthropocene Rev 2(3):196–219. https://doi.org/10.1177/2053019615591020 WWF (2016) The Living Planet Report 2016. http://awsassets.panda.org/downloads/lpr_living_ planet_report_2016.pdf

Chapter 10

Ecosocialism: A Radical Alternative Michael Löwy

Introduction Contemporary capitalist civilization is in crisis. The unlimited accumulation of ­capital, commodification of everything, ruthless exploitation of labor and nature, and attendant brutal competition undermine the bases of a sustainable future, thereby putting the very survival of the human species at risk. The deep, systemic threat we face demands a deep, systemic change, beyond capitalism that we could call a Great Transition.1 In synthesizing the basic tenets of ecology and the Marxist critique of political economy, ecosocialism offers a radical alternative to an unsustainable status quo. Rejecting a capitalist definition of “progress” based on market growth and quantitative expansion (which, as Marx shows, is a destructive progress), it advocates policies founded on nonmonetary criteria, such as social needs, individual well-being, and ecological equilibrium. Ecosocialism proffers a critique of both mainstream “market ecology,” which does not challenge the capitalist system, and “productivist socialism,” which ignores natural limits. As people increasingly realize how the economic and ecological crises intertwine, ecosocialism has been gaining adherents. Ecosocialism, as a movement, is relatively new, but some of its basic arguments date back to the writings of Marx and Engels. Now, intellectuals and activists are recovering this legacy and seeking a radical restructuring of the economy according to the principles of democratic ­ecological planning, putting human and planetary needs first and foremost. 1  This paper is an enlarged version of an essay published on the Great Transition site, founded by Paul Raskin.

M. Löwy (*) Emeritus Research Director in Social Sciences, CNRS (Centre National de la Recherche Scientifique), Paris, France © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_10

199

200

M. Löwy

The “actually existing socialisms” of the twentieth century, with their often environmentally oblivious bureaucracies, do not offer an attractive model for today’s ecosocialists. Rather, we must chart a new path forward, one that links with the myriad movements around the globe that share the conviction that a better world is not only possible but also necessary.

Democratic Ecological Planning The core of ecosocialism is the concept of democratic ecological planning, wherein the population itself, not “the market” or a Politburo, make the main decisions about the economy. Early in the transition to this new way of life, with its new mode of production and consumption, some sectors of the economy must be suppressed (e.g., the extraction of fossil fuels implicated in the climate crisis) or restructured while new sectors are developed. Economic transformation must be accompanied by active pursuit of full employment with equal conditions of work and wages. This egalitarian vision is essential both for building a just society and for engaging the support of the working class for the structural transformation of the productive forces. Ultimately, such a vision is irreconcilable with private control of the main means of production and of the planning process. In particular, for investments and technological innovation to serve the common good, decision-making must be taken away from the banks and capitalist enterprises that currently dominate and put in the public domain. Then, society itself, and neither a small oligarchy of property owners nor an elite of techno-bureaucrats, will democratically decide which productive lines are to be privileged and how resources are to be invested in education, health, or culture. Major decisions on investment priorities—such as terminating all coal-­ fired facilities or directing agricultural subsidies to organic production—would be taken by direct popular vote. Such democratic referendums could be proposed by the elected planning bodies, or by the population itself, through local assemblies or citizen’s initiatives supported by a certain amount of signatures. Other, less important decisions would be taken by elected bodies, on the relevant national, regional, or local scale. The above proposals are only suggestions: they do not aim at a detailed ­blueprint, a ready-made system; flexibility and openness are needed, leaving room for democratic imagination. Although conservatives fearmonger about “central planning,” democratic ­ecological planning ultimately supports more freedom, not less, for several reasons. First, it offers liberation from the reified “economic laws” of the capitalist system that shackle individuals in what Max Weber called an “iron cage.” Prices of goods would not be left to the “laws of supply and demand” but would, instead, reflect social and political priorities, with the use of taxes and subsidies to incentivize social goods and disincentivize social ills. Ideally, as the ecosocialist transition moves forward, more products and services critical for meeting fundamental human needs would be freely distributed, according to the will of the citizens.

10  Ecosocialism: A Radical Alternative

201

Second, ecosocialism heralds a substantial increase in free time. Planning and the reduction of labor time are the two decisive steps toward what Marx called “the kingdom of freedom.” A significant increase of free time is, in fact, a condition for the participation of working people in the democratic discussion and management of economy and of society. Last, democratic ecological planning represents a whole society’s exercise of its freedom to control the decisions that affect its destiny. If the democratic ideal would not grant political decision-making power to a small elite, why should the same principle not apply to economic decisions? Under capitalism, use value—the worth of a product or service to well-being—exists only in the service of exchange value, or value on the market. Thus, many products in contemporary society are socially useless or designed for rapid turnover (“planned obsolescence”). By contrast, in a planned ecosocialist economy, use value would be the only criteria for the production of goods and services, with far-reaching economic, social, and ecological consequences.2 This doesn’t mean that the market is “abolished”; it will have a role in the distribution of goods, but it will lose its power to determine the whole process of production and consumption. Planning would focus on large-scale economic decisions, not the small-scale ones that might affect local restaurants, groceries, small shops, or artisan enterprises. Importantly, such planning is consistent with workers’ self-management of their productive units. The decision, for example, to transform a plant from producing automobiles to producing buses and trams would be taken by society as a whole, but the internal organization and functioning of the enterprise would be democratically managed by its workers. There has been much discussion about the “centralized” or “decentralized” character of planning, but most important is democratic control at all levels—local, regional, national, continental, or international. For example, ­planetary ecological issues such as global warming must be dealt with on a global scale and thereby require some form of global democratic planning. This nested, democratic decision-making is quite the opposite of what is usually described, often ­dismissively, as “central planning” since decisions are not taken by any “center” but democratically decided by the affected population at the appropriate scale. Democratic and pluralist debate would occur at all levels. Through parties, platforms, or other political movements, varied propositions would be submitted to the people, and delegates would be elected accordingly. However, representative democracy must be complemented, and corrected, by Internet-enabled direct democracy, through which people choose—at the local, national, and, later, global level—among major social and ecological options. Should public transportation be free? Should the owners of private cars pay special taxes to subsidize public transportation? Should solar energy be subsidized in order to compete with fossil energy? Should the work week be reduced to 30 hours, 25, or less, with the attendant reduction of production?

 Joel Kovel, Enemy of Nature: The End of Capitalism or the End of the World? (New York, Zed Books, 2002), 215. 2

202

M. Löwy

Such democratic planning needs expert input, but its role is educational, to p­resent informed views on alternative outcomes for consideration by popular decision-­making processes. What guarantee is there that the people will make ­ecologically sound decisions? None. Ecosocialism wagers that democratic d­ ecisions will become increasingly reasoned and enlightened as culture changes and the grip of commodity fetishism is broken. One cannot imagine such a new society without the population achieving through struggle, self-education, and social experience, a high level of socialist and ecological consciousness. In any case, are not the alternatives—the blind market or an ecological dictatorship of “experts”—much more dangerous? The Great Transition from capitalist destructive progress to ecosocialism is a historical process, a permanent revolutionary transformation of society, culture, and mind-sets. Enacting this transition leads not only to a new mode of production and an egalitarian and democratic society but also to an alternative mode of life, a new ecosocialist civilization, beyond the reign of money, beyond consumption habits artificially produced by advertising, and beyond the unlimited production of commodities that are useless and/or harmful to the environment. Such a transformative process depends on the active support of the vast majority of the population for an ecosocialist program. The decisive factor in development of socialist consciousness and ecological awareness is the collective experience of struggle, from local and partial confrontations to the radical change of global society as a whole.

The Growth Question The issue of economic growth has divided socialists and environmentalists. Ecosocialism, however, tries to overcome the dualistic frame of growth versus degrowth and development versus antidevelopment because both positions share a purely quantitative conception of productive forces. A third position resonates more with the task ahead: the qualitative transformation of development. Degrowth is a necessary but insufficient term to describe the needed changes. First is because it is too general. A qualitative distinction between different sorts of activities is necessary. As an ecosocialist, I believe that some branches of “production” or services should not “degrow” but be suppressed, as soon as possible: coal-­ fired facilities, coal mines, oil extraction, weapons production, the advertisement industry, glyphosate pesticides, etc. And we need to suppress inbuilt obsolescence, which concerns most of the products in capitalist markets. Other productions (and consumptions) should be significantly reduced (“degrow”): private cars, trucks, air-­ conditioning, meat consumption, etc. And others should grow: renewable energies and organic agriculture—both should grow until they practically replace fossil ­energies and agro-industry—as well as some essential services such as education, health, and culture. The concept of “degrowth” does not take into account these decisive differences.

10  Ecosocialism: A Radical Alternative

203

A new development paradigm means putting an end to the egregious waste of resources under capitalism, driven by large-scale production of useless and ­harmful products. The arms industry is, of course, a dramatic example, but, more generally, the primary purpose of many of the “goods” produced—with their planned ­obsolescence—is to generate profit for large corporations. The issue is not ­excessive consumption in the abstract but the prevalent type of consumption, based as it is on massive waste and the conspicuous and compulsive pursuit of novelties promoted by “fashion.” A new society would orient production toward the satisfaction of authentic needs, including water, food, clothing, housing, and such basic services as health, education, transport, and culture. Obviously, the countries of the Global South, where these needs are very far from being satisfied, must pursue greater classical “development”—railroads, ­hospitals, sewage systems, and other infrastructure. Still, rather than emulate how affluent countries built their productive systems, these countries can pursue development in far more environmentally friendly ways, including the rapid introduction of renewable energy. While many poorer countries will need to expand agricultural production to nourish hungry, growing populations, the ecosocialist solution is to promote agroecology methods rooted in family units, cooperatives, or larger-scale collective farms—not the destructive industrialized agribusiness methods involving intensive inputs of pesticides, chemicals, and GMOs.3 At the same time, the ecosocialist transformation would end the heinous debt system the Global South now confronts and the exploitations of its resources by advanced industrial countries as well as rapidly developing countries like China. Instead, we can envision a strong flow of technical and economic assistance from North to South rooted in a robust sense of solidarity and the recognition that ­planetary problems require planetary solutions. This need not entail that people in affluent countries “reduce their standard of living”—only that they shun the obsessive consumption, induced by the capitalist system, of useless commodities that do not meet real needs or contribute to human well-being and flourishing. But how do we distinguish authentic from artificial and counterproductive needs? To a considerable degree, the latter are stimulated by the mental manipulation of advertising. In contemporary capitalist societies, the advertising industry has invaded all spheres of life, shaping everything from the food we eat and the clothes we wear to sports, culture, religion, and politics. Promotional advertising has become ubiquitous, insidiously infesting our streets, landscapes, and traditional and digital media, molding habits of conspicuous and compulsive consumption. Moreover, the ad industry itself is a source of considerable waste of natural resources and labor time, ultimately paid by the consumer, for a branch of “production” that lies in direct contradiction with real social-ecological needs. While indispensable to the capitalist market economy, the advertising industry would have no place in a society in transition to ecosocialism; it would be replaced by consumer associations that vet and

 Via Campesina, a worldwide network of peasant movements, has long argued for this type of agricultural transformation. See https://viacampesina.org/en/ 3

204

M. Löwy

disseminate information on goods and services. While these changes are already happening to some extent, old habits would likely persist for some years, and nobody has the right to dictate peoples’ desires. Altering patterns of consumption is an ongoing educational challenge within a historical process of cultural change. A fundamental premise of ecosocialism is that in a society without sharp class divisions and capitalist alienation, “being” will take precedence over “having.” Instead of seeking endless goods, people pursue greater free time and the personal achievements and meaning it can bring through cultural, athletic, playful, scientific, erotic, artistic, and political activities. There is no evidence that compulsive acquisitiveness stems from intrinsic “human nature,” as conservative rhetoric suggests. Rather, it is induced by the commodity fetishism inherent in the capitalist system, by the dominant ideology, and by advertising. Ernest Mandel summarizes this ­critical point well: “The continual accumulation of more and more goods […] is by no means a universal and even predominant feature of human behavior. The development of talents and inclinations for their own sake; the protection of health and life; care for children; the development of rich social relations […] become major motivations once basic material needs have been satisfied.”4 Of course, even a classless society faces conflict and contradiction. The transition to ecosocialism would confront tensions between the requirements of protecting the environment and meeting social needs, between ecological imperatives and the development of basic infrastructure, between popular consumer habits and the scarcity of resources, and between communitarian and cosmopolitan impulses. Struggles among competing desiderata are inevitable. Hence, weighing and balancing such interests must become the task of a democratic planning process, liberated from the imperatives of capital and profit-making to come up with solutions through transparent, plural, and open public discourse. Such participatory democracy at all levels does not mean that there will not be mistakes, but it allows for the ­self-­correction by the members of the social collectivity of its own mistakes.

Intellectual Roots Although ecosocialism is a fairly recent phenomenon, its intellectual roots can be traced back to Marx and Engels. Because environmental issues were not as salient in the nineteenth century as in our era of incipient ecological catastrophe, these concerns did not play a central role in Marx and Engels’s works. Nevertheless, their writings use arguments and concepts vital to the connection between capitalist dynamics and the destruction of the natural environment and to the development of a socialist and ecological alternative to the prevailing system. Some passages in Marx and Engels (and certainly in the dominant Marxist ­currents that followed) do embrace an uncritical stance toward the productive

 Ernest Mandel, Power and Money: A Marxist Theory of Bureaucracy (London, Verso, 1992), 206.

4

10  Ecosocialism: A Radical Alternative

205

forces created by capital, treating the “development of productive forces” as the main factor in human progress. However, Marx was radically opposed to what we now call “productivism”—the capitalist logic by which the accumulation of capital, wealth, and commodities becomes an end in itself. The fundamental idea of a socialist economy—in contrast to the bureaucratic caricatures that prevailed in the “socialist” experiments of the twentieth century—is to produce use values, goods that are necessary for the satisfaction of human needs, well-being, and fulfillment. The central feature of technical progress for Marx was not the indefinite growth of products (“having”) but the reduction of socially necessary labor and concomitant increase of free time (“being”). Marx’s emphasis on communist self-development, on free time for artistic, erotic, or intellectual activities—in contrast to the capitalist obsession with the consumption of more and more material goods—implies a decisive reduction of pressure on the natural environment.5 Beyond the presumed benefit for the environment, a key Marxian contribution to socialist ecological thinking is attributing to capitalism a metabolic rift—i.e., a ­disruption of the material exchange between human societies and the natural environment. The issue is discussed, inter alia, in a well-known passage of Capital: Capitalist production [...] disturbs the metabolic interaction between man and the earth, i.e., prevents the return to the soil of its constituent elements consumed by man in the form of food and clothing; hence it hinders the operation of the eternal natural conditions for the lasting fertility of the soil. [...] All progress in capitalist agriculture is a progress in the art, not only of robbing the worker, but of robbing the soil [...]. The more a country [...] develops itself on the basis of great industry, the more this process of destruction takes place quickly. Capitalist production [...] only develops [...] by simultaneously undermining the original sources of all wealth—the soil and the worker.6

This important passage clarifies Marx’s dialectical vision of the contradictions of “progress” and its destructive consequences for nature under capitalist conditions. The example, of course, is limited to the loss of fertility by the soil. But on this basis, Marx draws the broad insight that capitalist production embodies a tendency to undermine the “eternal natural conditions.” From a similar vantage, Marx reiterates his more familiar argument that the same predatory logic of capitalism exploits and debases workers. While most contemporary ecosocialists are inspired by Marx’s insights, ecology has become far more central to their analysis and action. During the 1970s and 1980s in Europe and the US, an ecological socialism began to take shape. Manuel Sacristan, a Spanish dissident-Communist philosopher, founded the ecosocialist and feminist journal Mientras Tanto in 1979, introducing the dialectical concept of “destructive-productive forces.” Raymond Williams, a British socialist and founder of modern cultural studies, became one of the first in Europe to call for an “eco The opposition between “having” and “being” is often discussed in the Manuscripts of 1844. On free time as the foundation of the socialist “Kingdom of Freedom,” see Karl Marx, Das Kapital, Volume III, Marx-Engels-Werke series, vol. 25 (1884; Berlin: Dietz Verlag Berlin, 1981), 828. 6  Karl Marx, Das Kapital, Volume 1, Marx-Engels-Werke series, vol. 23 (1867; Berlin: Dietz Verlag Berlin, 1981), 528–530. 5

206

M. Löwy

logically conscious socialism” and is often credited with coining the term “ecosocialism” itself. André Gorz, a French philosopher and journalist, argued that political ecology must contain a critique of economic thought and called for an ecological and humanist transformation of work. Barry Commoner, an American biologist, argued that the capitalist system and its technology—and not population growth—was responsible for the destruction of the environment, which led him to the conclusion that “some sort of socialism” was the realistic alternative.7 In the 1980s, James O’Connor founded the influential journal Capitalism, Nature, and Socialism. The journal was inspired by O’Connor’s idea of the “second contradiction of capitalism.” In this formulation, the first contradiction is the Marxist one between the forces and relations of production; the second contradiction lies between the mode of production and the “conditions of production,” especially the state of the environment. A new generation of eco-Marxists appeared in the 2000s, including John Bellamy Foster and others around the journal Monthly Review, who further developed the Marxian concept of metabolic rift between human societies and the environment. In 2001, Joel Kovel and the present author issued “An Ecosocialist Manifesto,” which was further developed by the same authors, together with Ian Angus, in the 2008 Belem Ecosocialist Manifesto, which was signed by hundreds of people from 40 countries and distributed at the World Social Forum in 2009. It has since become an important reference for ecosocialists around the world.8

Why Environmentalists Need to Be Socialists As these and other authors have shown, capitalism is incompatible with a sustainable future. The capitalist system, an economic growth machine propelled by fossil fuels since the Industrial Revolution, is a primary culprit in climate change and the wider ecological crisis on Earth. Its irrational logic of endless expansion and accumulation, waste of resources, ostentatious consumption, planned obsolescence, and pursuit of profit at any cost is driving the planet to the brink of the abyss. Does “green capitalism”—the strategy of reducing environmental impact while maintaining dominant economic institutions—offer a solution? The implausibility of such a scenario is seen most vividly in the failure of a quarter-century of ­international conferences to effectively address climate change. The political forces

 See, for example, Manuel Sacristan, Pacifismo, Ecología y Política Alternativa (Barcelona: Icaria, 1987); Raymond Williams, Socialism and Ecology (London: Socialist Environment and Resources Association, 1982); André Gorz, Ecology as Politics (Boston, South End Press, 1979); Barry Commoner, The Closing Circle: Man, Nature, and Technology (New York: Random House, 1971). 8  “An Ecosocialist Manifesto,” 2001, http://environment-ecology.com/political-ecology/436-anecosocialist-manifesto.html; “Belem Ecosocialist Declaration,” December 16, 2008, http://climateandcapitalism.com/2008/12/16/belem-ecosocialist-declaration-a-call-for-signatures/ 7

10  Ecosocialism: A Radical Alternative

207

committed to the capitalist “market economy” that have created the problem cannot be the source of the solution. For example, at the 2015 Paris climate conference, many countries resolved to make serious efforts to keep average global temperature increases below 2°  C ­(ideally, they agreed below 1.5° C). Correspondingly, they volunteered to implement measures to reduce their greenhouse gas emissions. However, they put no ­enforcement mechanisms in place or consequences for noncompliance, hence no guarantee that any country will keep its word. The US, the world’s second-highest emitter of carbon emissions, is now run by a climate denier who pulled the US out of the agreement. Even if all countries did meet their commitments, the global temperature would rise by 3° C or more, with great risk of dire, irreversible climate change.9 Ultimately, the fatal flaw of green capitalism lies in the conflict between the micro-rationality of the capitalist market, with its short-sighted calculation of profit and loss, and the macro-rationality of collective action for the common good. The blind logic of the market resists a rapid energy transformation away from fossil fuel dependence in intrinsic contradiction of ecological rationality. The point is not to indict “bad” ecocidal capitalists, as opposed to “good” green capitalists; the fault lies in a system rooted in ruthless competition and a race for short-term profit that destroys nature’s balance. The environmental challenge—to build an alternative system that reflects the common good in its institutional DNA—becomes inextricably linked to the socialist challenge. That challenge requires building what E. P. Thompson termed a “moral economy” founded on nonmonetary and extra-economic, social-ecological principles and governed through democratic decision-making processes.10 Far more than incremental reform, what is needed is the emergence of a social and ecological civilization that brings forth a new energy structure and post-consumerist set of values and way of life. Realizing this vision will not be possible without public planning and control over the “means of production,” the physical inputs used to produce economic value, such as facilities, machinery, and infrastructure. An ecological politics that works within prevailing institutions and rules of the “market economy” will fall short of meeting the profound environmental challenges before us. Environmentalists who do not recognize how “productivism” flows from the logic of profit are destined to fail—or, worse, to become absorbed by the system. Examples abound. The lack of a coherent anti-capitalist posture led most of the European Green parties—notably, in France, Germany, Italy, and Belgium—to become mere “eco-reformist” partners in the social-liberal management of capitalism by center-left governments. Of course, nature did not fare any better under Soviet-style “socialism” than under capitalism. Indeed, that is one of the reasons ecosocialism carries a very dif9  United Nations Environment Programme, The Emissions Gap Report 2017 (Nairobi: UNEP, 2017). For an overview of the report, see https://news.un.org/en/story/2017/10/569672-un-seesworrying-gap-between-paris-climate-pledges-and-emissions-cuts-needed 10  E. P. Thompson, “The Moral Economy of the English Crowd in the Eighteenth Century,” Past & Present, no. 50 (February 1971): 76–136.

208

M. Löwy

ferent program and vision from the so-called actually existing socialism of the past. Since the roots of the ecological problem are systemic, environmentalism needs to challenge the prevailing capitalist system, and that means taking seriously the twenty-first-century synthesis of ecology and socialism—ecosocialism.

Why Socialists Need to Be Environmentalists The survival of civilized society, and perhaps much of life on Planet Earth, is at stake. A socialist theory, or movement, that does not integrate ecology as a central element in its program and strategy is anachronistic and irrelevant. Climate change represents the most threatening expression of the planetary ­ecological crisis, posing a challenge without historical precedent. If global temperatures are allowed to exceed preindustrial levels by more than 2 °C, scientists project increasingly dire consequences, such as a rise in the sea level so large that it would risk submerging most maritime towns, from Dacca in Bangladesh to Amsterdam, Venice, or New York. Large-scale desertification, disturbance of the hydrological cycle and agricultural output, more frequent and extreme weather events, and species loss all loom. We’re already at 1 °C. At what temperature increase—5, 6, or 7  °C—will we reach a tipping point beyond which the planet cannot support ­civilized life or even becomes uninhabitable? Particularly worrisome is the fact that the impacts of climate change are accumulating at a much faster pace than predicted by climate scientists, who—like almost all scientists—tend to be highly cautious. The ink no sooner dries on an Intergovernmental Panel on Climate Change report when increasing climate impacts make it seem too optimistic. Where once the emphasis was on what will happen in the distant future, attention has turned increasingly to what we face now and in the coming years. Some socialists acknowledge the need to incorporate ecology but object to the term “ecosocialism,” arguing that socialism already includes ecology, feminism, anti-racism, and other progressive fronts. However, the term ecosocialism, by suggesting a decisive change in socialist ideas, carries important political significance. First, it reflects a new understanding of capitalism as a system based not only on exploitation but also on destruction—the massive destruction of the conditions for life on the planet. Second, ecosocialism extends the meaning of socialist transformation beyond a change in ownership to a civilizational transformation of the ­productive apparatus, the patterns of consumption, and the whole way of life. Third, the new term underscores the critical view it embraces of the twentieth-century experiments in the name of socialism. Twentieth-century socialism, in its dominant tendencies (social democracy and Soviet-style communism), was, at best, inattentive to the human impact on the ­environment and, at worst, outright dismissive. Governments adopted and adapted the Western capitalist productive apparatus in a headlong effort to “develop” while largely oblivious of the profound negative costs in the form of environmental degradation.

10  Ecosocialism: A Radical Alternative

209

The Soviet Union is a perfect example. The first years after the October Revolution saw an ecological current develop, and a number of measures to protect the environment were, in fact, enacted. But by the late 1920s, with the process of Stalinist bureaucratization underway, an environmentally heedless productivism was being imposed in industry and agriculture by totalitarian methods while ecologists were marginalized or eliminated. The 1986 Chernobyl accident stands as a dramatic emblem of the disastrous long-term consequences. Changing who owns property without changing how that property is managed is a dead end. Socialism must place democratic management and reorganization of the productive system at the heart of the transformation, along with a firm commitment to ecological stewardship. Not socialism or ecology alone, but ecosocialism.

Ecosocialism and a Great Transition To fight for an ecosocialist program doesn’t mean that we should “wait” for such a postcapitalist alternative. The struggle for a different future begins here and now! Any measure which limits the destruction of nature, even if on a limited, local scale—such as stopping an XXL pipeline—is vital. But one should see these ­measures as a process, leading to growing antisystemic opposition, not as the effort to create a stable “sustainable capitalism.” In other words, to aim for a green socialism in the long term requires fighting for concrete and urgent reforms in the near term. Without illusions about the prospects for a “clean capitalism,” the movement for deep change must try to reduce the risks to people and planet while buying time to build support for a more fundamental shift. In particular, the battle to force the powers that be to drastically reduce greenhouse gas emissions remains a key front, along with local efforts to shift toward agroecological methods, cooperative solar energy, and community management of resources. Such concrete, immediate struggles are important in and of themselves because partial victories are vital for combatting environmental deterioration and despair about the future. For the longer term, these campaigns can help raise ecological and socialist consciousness and promote activism from below. Both awareness and self-­organization are decisive preconditions and foundations for radically transforming the world system. The amplification of thousands of local and partial efforts into an overarching systemic global movement forges the path to a Great Transition: a new society and mode of life. This vision infuses the popular idea of a “movement of movements,” which arose out of the global justice movement and the World Social Forums and which for many years has fostered the convergence of social and environmental movements in a ­common struggle. Ecosocialism is but one current within this larger stream, with no pretense that it is “more important” or “more revolutionary” than others. Such a competitive claim counterproductively breeds polarization when what is needed is unity. Rather, ecosocialism aims to contribute to a shared ethos embraced by the ­various movements for a Great Transition. Ecosocialism sees itself as part of an interna-

210

M. Löwy

tional movement: since global ecological, economic, and social crises know no borders, the struggle against the systemic forces driving these crises must also be globalized. Many significant intersections are surfacing between ecosocialism and other movements, including efforts to link ecofeminism and ecosocialism as ­convergent and complementary.11 The climate justice movement brings anti-racism and ecosocialism together in the struggle against the destruction of the living ­conditions of communities suffering discrimination. In indigenous movements, some leaders are ecosocialists, while, in turn, many ecosocialists sees the indigenous way of life, grounded in communitarian solidarity and respect for Mother Nature, as an inspiration for the ecosocialist perspective. Similarly, ecosocialism finds voice within peasant, trade union, degrowth, and other movements. The gathering movement of movements seeks system change, convinced that another world is possible beyond commodification, environmental destruction, exploitation, and oppression. The power of entrenched ruling elites is undeniable, and the forces of radical opposition remain weak. But they are growing and stand as our hope for halting the catastrophic course of capitalist “growth.” Ecosocialism contributes an important perspective for nurturing understanding and strategy for this movement for a Great Transition. Walter Benjamin defined revolutions not as the locomotive of history, as Marx once wrote, but as humanity’s reaching for the emergency brake before the train falls into the abyss. Never have we needed more to reach as one for that lever and lay new track to a different destination. The idea and practice of ecosocialism can help guide this world-historic project.

References Belem Ecosocialist Declaration (2008) December 16, 2008 http://climateandcapitalism. com/2008/12/16/belem-ecosocialist-declaration-a-call-for-signatures/ Ecosocialist Manifesto (2001). http://environment-ecology.com/political-ecology/436-an-ecosocialist-manifesto.html

 See Ariel Salleh’s Ecofeminism as Politics (New York: Zed Books, 1997) or the recent issue of Capitalism, Nature, and Socialism (29, no. 1: 2018) on “Ecofeminism Against Capitalism,” with essays by Terisa Turner, Ana Isla, and others.

11

Chapter 11

Towards a Socialist Technology Judith Sutz

Introduction Technology as a social process is at the heart of socialist thinking. As Nathan Rosenberg recalls in his “Marx as student of technology” (Rosenberg 1976), Marx insisted on the sociopolitical character of technology, a pioneering view at a time when adopted changes in technology, that is, innovations, were assigned to their individual authors without much further analysis. The idea of innovation not as isolated events but as a system-like engine to foster further innovation was perhaps more a theoretical construct than an empirical conclusion when the Manifesto of the Communist Party was written. The force of the text is, though, unmistakable: “The bourgeoisie cannot exist without constantly revolutionising the instruments of production …” (Marx and Engels 1848: 16). Revolutionizing the instruments of production—in manufacturing, in services, in agriculture, and in culture—and in so doing opening unforeseen new production fields, continues to be a trend in the capitalist, highly industrialized countries. Even more futuristic at that time was the acknowledgment of the subordination of science to the interests of capital: “The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers” (ibid, emphasis added). The wedding of science and technology, that occurred at the most advanced capitalist societies of the time, was the midwife of what today is called the knowledge economy, science-based and innovation driven; such an economy is unmistakably capitalist. The only historical experience where to look if a different economic-­sociopolitical regime from capitalism gave rise to a different design of technology—a hypothesis rooted on the Marxist characterization of the technology of the industrial revolution J. Sutz (*) University of the Republic, Montevideo, Uruguay e-mail: [email protected] © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_11

211

212

J. Sutz

as being at the service of capital accumulation—was that of the Soviet Union. This was not the case, not for the failure of alternatives but for the lack of attempts to build alternatives. The consolidation of a different economic-sociopolitical regime was ideologically linked to catch-up with the West, with the technology of the West. There was no denial of the class nature of such technology under capitalism, but it was believed that under other class structure, it would deliver efficiency without social collateral harms. Technological catch-up with the West was not achieved, particularly once microelectronics became the center of a gigantic technological convergence. As for adopting Western technology in the labor place without social collateral harms, it did not occur either, as Braverman in his “Labor and Monopoly Capital” (1974) eloquently stated, an opinion supported by the following reflection: “Is anomie, for instance, a disease of capitalism or of all industrial societies? Is the organization man a creature of monopoly capital or of all bureaucratic industry wherever found? These questions tempt us to look into the problem of the impact of technology on the existential quality of life … Suffice it to say that superficial evidence seems to imply that the similar technologies of Russia and America are indeed giving rise to similar social phenomena of this sort” (Heilbroner 1994: 61). Nothing like a “socialist technology regime” has ever been attempted. Socialist-­ inspired analyses of capitalist technology exist, of course, starting with Marx, but they are far from the idea of a technology of socialist inspiration, even if such analyses can be quite useful to develop further this idea. The point of departure of this text is that it is not possible to advance socialist values if the intellectual and physical tools with which we understand and attempt to modify the world and our society are oriented exclusively by capitalist goals. In a world of triumphant capitalism and defeated attempts to suppress market forces, the power of a sort of technological TINA—There Is No Alternative—seems overwhelming. However, capitalism is not less resilient than capitalist technology: Why, then, if alternatives to prevailing capitalism continue to be searched should not be the same with technologies of socialist inspiration? What can technology of socialist inspiration possibly mean? The following quotation of the abovementioned text of Rosenberg helps approaching the issue: …one needs to examine the way in which larger social forces continually alter the focus of technological problems which require solutions. Within this framework one may then examine how the productive process has, in the past, shaped the development of scientific and technological knowledge and skills. One is then in a position to explore the social process of problem formulation and eventual solution. In all of this, however, although individual human beings are, inevitably, the actors, the dramatis personae of the historical process, the actual unfolding of the plot turns upon the larger social forces which shape their actions. (Rosenberg 1976: 71)

First, we have the issue of the technical problems that require solutions; second, we  have the problem formulation and the eventual solution. In other words, we have  the innovation agenda and the concrete and specific heuristics that lead to problem-solving.

11  Towards a Socialist Technology

213

Rosenberg’s statement indicates that both innovation agenda and problem-­ solving heuristics are shaped by social forces. There is no technological i­ neluctability; things evolve as they do not because they could not evolve otherwise. So as long as we do not accept TINA for society, we need not accept TINA for technology. A first approximation to answer the question around the meaning of technology of socialist inspiration would be, thus, an innovation agenda and a heuristic of problem-­solving shaped by social forces that want to instill socialist values in social life. Two considerations are worth putting forward before going any further: Such social forces may not be dominant but work on niches or interstices; they may express themselves at macro level but also at meso or micro level. This means that the problem formulation and the solutions found inspired in socialist values may also be “interstitial” or “niche” technologies, they may be born at micro level and stay there, or they may scale up and spread. The point is that as long as a there are social forces inspired on socialist values, even in the midst of our capitalist societies, there is room for thinking and acting differently regarding technology. What is the meaning of socialist values, of socialist inspiration in this context? To start with, active solidarity, enrichment of working life, democratization of knowledge, fostering participation, and plurality in the recognition of what type of knowledge counts. A socialist inspiration means that people are at the core of some of the goals of research and technology in basic issues like quality of life at work, health, housing, and environment. This is, of course, a complicated issue. It would be utterly patronizing to posit that all what people want is the result of the manipulation of market-led advertising and that what they need should be decided by a planning office setting the research agenda and the goals of innovation. This is not socialist inspiration. “Socialist inspiration” cannot be a “one size fits all” category. It should not, moreover, be defined only by a negation, by being the opposite of market-led research and innovation. A socialist inspiration of knowledge production and technology is a human-centered approach, including the environment in which humans live, taking care of the present as well as of the future, anchored in the real conditions in which our societies are immersed, making efforts to open spaces in them for democratizing knowledge and technology production and use. It can be discussed why this approach is called “socialist inspiration.” Perhaps something else should be added to clarify the denomination: the protagonist role of people that such an inspiration promotes actively. This is not a classical type of socialist characterization, particularly because it is not associated with a social class. It is much wider and diffuse, but it is sufficiently precise: Social forces with those aims and principles of action respond to a socialist inspiration in any reasonable meaning of the latter. For sure, they are able to shape alternative innovation agendas and problem-solving heuristics. Conflict and struggle over material and spiritual forces will surely accompany the fostering of socialist inspiration for technology in prevailing conditions, as any other socialist aspiration. It is thus important to understand better the interests that are at stake in such conflicts and struggles, who are the actors involved, and how they can be influenced. There are not “first socialist principles” from which to derive

214

J. Sutz

linearly how to push forward technology with a socialist inspiration. Some ideas around these issues will be explored in the sequel.

 n the Difficulties of Thinking on Technology of Socialist O Inspiration “…machines make history when analysts adopt macro perspectives, whereas machines are made by historical processes whenever analysts adopt micro perspectives and strip machines of their ability to appear causative of social change” (Misa 1994: 125, emphasis in the original). Marx gives a good example of a double analyst in the former sense: When stating that concrete machines are behind feudal or capitalist societies, he espoused the macro view; when declaring that since 1825, after each strike appeared a new machine, he expressed the micro view (Marx 1847). Macro views, akin to technological determinism, have the advantage of suggesting plausible explanations of perceived changes, as well as to forecast future changes derived from the envisioned regularities provided by such view. Micro views, on the contrary, are anchored on detailed and concrete technological experiences. A socialist-­inspired view of technology cannot count on the macro view: Nothing like “give me this or that machine or general purpose technology and you will have a socialist society” has been proposed, with the exception of Lenin’s localized dictum about the Soviets and the electrification of Russia. On the other hand, trying to understand how society shapes concrete technologies in contemporary times refers mainly to how this happens in advanced capitalist societies: Extrapolating from this to how artifacts could be conceived for a different set of social relations is not straightforward. Proposing technologies with a socialist inspiration faces three important difficulties. The first one has to do with the general difficulties related to anticipation. It may be clear what to avoid because that stems from experience. To build a true alternative, though, that is, a procedure to fulfill a need within reasonable border conditions—in terms of the cost of production and the efficiency of the alternative—faces the indeterminacies of the unknown. Such indeterminacies accompany any process of innovation, but the type of innovations we are considering here adds two additional challenges. The first is the weight of the already known and proved, a burden clouding fresh thinking. The second one is the stubbornness needed to push forward the legitimization of new problems and the related problem-solving processes, which requires social actors embodying such stubbornness. Who would these actors be? “Innovation stubbornness” needs either political or material support, probably both: Who would provide them for a socialist inspiration in the midst of a capitalist economy? We will come back to this issue later on. Another difficulty stems from a form of technological determinism akin to TINA: The technology we have provides us the society we have, and the entrenchment of both gives technology the boost for its evolution. The latter can be consid-

11  Towards a Socialist Technology

215

ered a fact, but the point is if it is a fact in the sense a tsunami is a fact or it is a social fact changeable by human agency. Technological determinism has a strong argument in its favor: It is unthinkable to go back to a whole series of old technologies or, moreover, to situations where no technology was available to solve given problems. This is not tantamount to say that there is only one direction in the evolution of technologies, the direction we already know or the direction that seems to be the one that will be followed. Even accepting the latter, it cannot be denied how difficult it has become exploring alternative directions. Some of those that denounce the evils of current technological systems are not inspired by a general rejection of modernity and the idea of progress. “…the cultural dissidents did not abandon the Enlightenment commitment to the practical arts; what they rejected was the skewed technocratic reinterpretation of that commitment. What they, like Mumford, found most objectionable was the tendency to bypass moral and political goals by treating advances in the technical means as ends in themselves. Nowhere was this criticism made with greater precision, economy, or wit than in Henry David Thoreau’s sardonic redescription of the era’s boasted modern improvements: ‘They are but improved means to an unimproved end’” (L. Marx 1994: 254). Echoing Thoreau’s dictum in our computer-based era, Joseph Weizenbaum states, “Yes, the computer arrived just in time. But in time for what? In time to save –and save very nearly intact, indeed to entrench and stabilize- social and political structures that otherwise might have been either radically renovated or allowed to totter under the demands that were sure to be made on them” (Weizenbaum 1976: 31). Be as it may, irreversibility becomes the best argument for the TINA technology determinism. The latter can come not only from its hailers but from its foes: This outlook ratifies the idea of the domination of life by large technological systems, by default if not by design. The accompanying mood varies from a sense of pleasurably self-­ abnegating acquiescence in the inevitable to melancholy resignation or fatalism. (…) The pessimistic tenor of postmodernism follows from this inevitably diminished sense of human agency. If we entertain the vision of a postmodern society dominated by immense, overlapping, quasi-autonomous technological systems, and if the society must somehow integrate the operation of those systems, becoming in the process a meta-system of systems upon whose continuing ability to function our lives depend, then the idea of postmodern technological pessimism makes sense. It is a fatalistic pessimism, an ambivalent tribute to the determinative power of technology. (L. Marx 1994: 257)

Trapped between optimists and pessimists sort of technology determinists and without much successful examples to back the claim that things can be different, this second difficulty seems not easy to overcome. The third difficulty refers to the fact that current technology is dubbed to have developed because it is the best, technologically speaking. It is well known that this is not necessarily the case, for instance, due to lock-in effects from inferior technologies, where alternatives are blocked to preserve existent interests. Generally, though, alternatives are blocked, even in imagination, because the technology we have and the evolutionary path that accompanies it are believed to be the technologically highest point at each moment. Scholars of socialist vintage, economists and

216

J. Sutz

historians, have proved that this is not necessarily the case in the realm of technology of production. Maximizing control over the working force has been a cause of choosing less performant technologies (Noble 1979; Marglin 1974). Even today, when well-documented criticisms of the impact of some current technologies, for instance, related to climate change, have been acknowledged, the faith on ­“technological fixes” to overcome problems avoids or makes difficult a thorough assessment of the technological paths that could lead to a more or less radical revision. The dangers of “technological fixes” have been acknowledged long ago, particularly the self-sustained trend toward more technological complexity, with implications not totally understood. “Almost anything in software can be implemented, sold, and even used given enough determination. There is nothing a mere scientist can say that will stand against the flood of a hundred million dollars. But there is one quality that cannot be purchased in this way – and that is reliability. The price of reliability is the pursuit of the utmost simplicity. It is a price which the very rich find most hard to pay” (Hoare 1981: 82). Economic interests are behind current technological “enough determinations” but also an ideological, or perhaps psychological, conviction on the part of decision makers, including their technical staff, that doubts casted over the path followed by technical change are retrograde and unjustified; moreover, that no better alternatives can be proposed. The battlefield of technologies of socialist inspiration, as well as all those based on alternative technological paths, is fought not only against economic and immediate power relations but against the conviction of the intrinsic superiority of current Western technologies.

 echnology of Socialist Inspiration in the Making: Technology T and Work Technology and work is the realm where socialist critics of the technologies stemming from capitalism concentrate; one of its great exponents is Marx himself. They highlight the alienating, dehumanizing effects of such technologies present in the past as well as in the present. Almost two centuries separate the first automated machines from the networked fragmented work of today, but in both cases, how and when to perform the work, that is, the degrees of personal decision-making related to work, has been radically diminished in comparison with former ways of work organization. Mumford posits that it was the clock, not the steam engine, the key machine of the modern industrial age (2010: 14). Its function was maximizing control, a fact acknowledged by Landes’ dictum referring to the industrial revolution: “The factory was a new kind of prison; the clock a new kind of jailer” (2003: 43). Technological forms of exercising control change with time, and concomitantly workers’ claims change as well; discussions over the right of the workers not to be on the watch over their smartphones all day round would have seemed utterly sci-

11  Towards a Socialist Technology

217

ence fiction a few years ago. Such discussions, though, are today at the forefront of a widening category of workers’ fight for retaining some control over their lives. The imagination of alternatives starts with the discomfort with the current state of affairs, with criticizing what we have at hand. In the case of technology, as we have already stressed, besides sheer power to deal with determined type of problems and to impose determined types of solutions, exists the ideological power to dismiss criticisms. Criticisms are equated to retrograde thinking and anti-progress attitudes; critics are labeled “neo-Luddites,” a harsh derogative expression that evokes the hopeless fight of machine destroyers of two hundred years ago. As Johan Schot reminds us, though, a series of historians of socialist vintage have demonstrated that the Luddites—a “breaking machines” movement of workers in the late eighteenth and early nineteenth centuries, mainly in Great Britain—were not a disorganized movement of despair but an organized form of protest. In particular, breaking machines was not an end in itself. “In none of these cases (…) was there any question of hostility to machines as such. Wrecking was simply a technique of trade unionism in the period before, and during the early phases of, the Industrial Revolution” (Hobsbawm 1952: 59). Hobsbawm named this technique “bargaining by riots.” Shot (2003: 260) highlights the technological as well as the political roots of the movement: …their protest did entail a strong criticism of technology. Their critical stance was not based, however, on disdain for technology in general. On the contrary, it was directed at particular machines. The only machines the Luddites destroyed were the ones against which the workers had particular grievances. Other machines, even in the same factory, were left unscathed. (…) Moreover, I would like to emphasize that the Luddites’ resistance ran much deeper than the rejection of particular machines. It concerned the rise of a new kind of society, embodied in a new set of specific machines, in which employers had the right to introduce machines that made workers redundant, produced unemployment, and lowered the quality of the products and the quality of society. (…) It was a struggle between rival models of how to organize society. The Luddites demanded that those who introduced new machines should anticipate their social effects.

The neo-Luddite label, so, is not so bad after all because if these historians are right, the inspiration of the past relates only accidentally to the form of the protest and is more fundamentally linked to the recognition of the embeddedness between technology and society and the need to take action to face it when it goes against the workers’ interests. It is a movement not concerned with the preservation of the past but with alternative ways to those imposed by the powers that be. This is a rather utopian perspective, given that it implies fighting capitalist technologies within capitalism. Other perspective would be to forget technology and postpone its consideration until overcoming capitalism: It seems more utopian than the former. Is the idea of a working processes technology of socialist inspiration designed and implemented within dominant capitalist social relations a mirage? To approximate an answer to this question, two other issues are worth considering. The first refers to experiences witnessing such attempts and their fate. The second issue is more general. We live in a capitalist as well as in a knowledge society; people able to produce and to use advanced knowledge are currently in the payroll of capital. Any techno-

218

J. Sutz

logical alternative of socialist inspiration for working processes will thus require including advanced knowledgeable people in the class struggle. This implies the construction of a political alliance with technological consequences between knowledgeable people and organized workers. Is there any symptom of that? Is it achievable? There are several examples of organized workers that incorporated technological aspects in their struggle and required for that the right to receive technological assessment to allow for a leveled discussion with employers. There were also trade union platforms that included the claim of training and retraining to keep track of technical changes. These are examples of a reactive strategy, like the one developed by the DEMOS Project in Sweden in the midseventies “… a strategy to make clear the harmful effect on work, that division of labor and use of new technology had in a capitalistic economy, and to reduce it, rather than a strategy for exploring organizational and technical alternatives” (Ehn 1988: 14). The latter is much complicated; it is such a counterintuitive strategy in a capitalist economy that it requires not only trade unions convinced about its feasibility and people with advanced knowledge training willing to work on it but a more socially generalized support. This was the case in the Scandinavian countries in the seventies where the quality of working life was a political issue. In the case of Sweden, “…the Joint Regulation Act (MBL) concerning the workers and their trade unions’ right to codetermination in production issues such as design and use of new technology and work organization was enacted in January 1977. It was this law that Prime Minister Olof Palme described as the greatest reform in Swedish society since the introduction of the universal right to vote” (op. cit. 256). One of the results of this “social spirit” was the creation, in 1977, of the Swedish Center for Working Life, aimed at fostering democracy at the working place; one of its initiatives was the project UTOPIA, involving the newspaper printing technologies. Its motivation was clear and straightforward: “The graphic workers’ existence as skilled workers was threatened by capitalistic technological development” (op. cit. 133). “The UTOPIA project could hopefully contribute to changing the trade union’s range of possible actions at the local level: Instead of defending the status quo, an offensive strategy was to be developed for another type of technology and improved products. The practical overall objective of the UTOPIA project was to contribute to the development of powerful skill-enhancing tools for graphic workers” (op. cit. 16). That was done in alliance with the Royal Institute of Technology in Stockholm and the Department of Computer Science in Aarhus University in Denmark and with the strong commitment of the Nordic Graphic Workers’ Union. This is indeed an example of technology with a socialist inspiration. It ended up with machines of a new design, hailed by American graphic workers. It was not a success, though, in the sense of making a difference in working life even in a single newspaper. A note of caution is necessary here: When we analyze and reflect about socialism, we do it mainly from a normative perspective and not because we are witnesses of concrete experiences superior in every important respect to capitalism. Why should technology of socialist inspiration be any different? In fact, the experience ended up with a no small achievement: proved artifacts of new design, manu-

11  Towards a Socialist Technology

219

factured to satisfy the double demand of skilled workers for enhancing quality of life at work and delivering better quality products. Three different types of factors can be highlighted from the documents of this experience to explain its limitations: They are surprisingly generalizable. First, in any working place, there are several categories of workers: New technologies start by automating those jobs with an explicit task description that seems to cover the whole range of things to do, even though the tacit implementation of such tasks, embedded in workers’ experience, may be key to the quality of the final product. Usually, those who gain from this displacement in the working place are more formally specialized workers, who receive new responsibilities because of the new technologies, and are probably less unionized. This happened with the UTOPIA project once the experiment moved into practice in a real newspaper: The journalists rejected the new technology that implied a more intimate work with the graphic workers; they preferred the “capitalist new technologies” that while deskilling graphic workers gave them more working status. A technology of socialist inspiration does not mean the end of conflicts around power. The second factor is akin to the problem of “socialism in only one country.” Experiences like UTOPIA will not change much, even at interstice level, if there are not many others in different places, and this has not happened. “… with few but important exceptions (the Swedish Center for Working Life perhaps being the most significant one) the established research world does not direct its resources to the interests of workers and their trade unions, and the emancipatory ideal of industrial democracy. Not even in Scandinavia” (op. cit. 249). The third factor is perhaps the most problematic because it concerns the organized workers themselves. Åke Sandberg, a sociologist participating in the UTOPIA project, described traditional trade unions focus as “distributional,” related to wages, working hours, and general terms of employment; those are clearly formulated demands, often quantifiable, based on the workers’ own practical experience and involving short negotiations. When the focus shifts to “production,” things are different: The union objectives are only vaguely formulated; the demands are difficult to quantify; the workers’ own practical experience must be supplemented by more theoretical, technical/scientific knowledge; and the design processes stretch over long periods of time (op. cit. 251). This is indeed a general problem. It has been reported in the experience of the Dutch science shops (Leydersdorff and Van Den Besselaar 1987) in the late 1970s; a Uruguayan experiment in 2014 found the same difficulties. In the latter case, a year work accompanying the weekly meetings of the trade union conduction preceded the implementation of a university program to support research projects devoted to address problems defined by the national workers’ organization. Such problems were supposed to emerge from those meetings, but distributional issues were the bulk while production issues hardly appeared (CSIC 2019, web page). This is not only a question of shortsightedness on the part of the workers; it speaks also of the alienation of workers from technical/scientific knowledge. Without reversing this alienation, technology of socialist inspiration in the working place will not count on two fundamental pillars: the knowledge of the workers to collaborate on the design guidance and the commitment of the workers

220

J. Sutz

to the implementation of the new technologies. This leads us to the issue of possible alliances between workers and knowledgeable people. Such an alliance has education at its core: Needless to say, this approach must be accompanied by changes in the public educational system. One important aspect is to enhance the designers’ interest in and qualifications for dealing with this kind of objectives for democratic technological and organizational development. Another (just as important) aspect is to provide good opportunities for qualification and requalification of workers in different branches of industry. This is not a question of short retraining courses, but of real professional education fostering technological skills as well as genuine understanding and practical mastering of tools and materials in specific labor processes. Again, this may turn out to be just pious hopes. But it is hard to see how any truly democratic design and use of new technology can be achieved without these prerequisites being fulfilled (Ehn 1988: 349).

There is a battle to be won in the head and heart of “engineers,” a category encompassing knowledgeable people on the scientific-technical side. Their loyalties have been usually on the side of their employers; they seldom have the level of organization that would allow them to use their power to put conditions on the direction of their efforts. Those who invest the money needed to sustain such efforts orient them. On some occasions, a form of collective power of “engineers” emerges, usually to be against something. An example of the latter is the decision taken in 2018 by Google and Amazon employees to face some contracts “against ethic” related to the political possible negative consequences of some of the technological developments launched by their companies. It is worth quoting at some length an article with the suggestive title “The year tech workers realized they were workers”: 2018 was the year that Big Tech’s mission statements came back to haunt it. When employees felt that their products were damaging the world and that management wouldn’t listen, they went public with their protests. At Google and Amazon, they challenged contracts to sell artificial intelligence and facial-recognition technology to the Pentagon and police. At Microsoft and Salesforce, workers argued against selling cloud computing services to agencies separating families at the border. Technology’s unintended consequences were also central to the most disruptive labor action in the Bay Area this year, a strike by nearly 8,000 Marriott employees (…). Unite Here, the union representing strikers in eight cities (…), demanded limits on automation like facial recognition at the front desk or the use of Alexa in lieu of a concierge. Marriott agreed to notify workers 150 days before implementing new technology and to give workers committee representation while the technology is still in development, among other protections. Both the highly paid engineers and the low-paid housekeepers want a seat at the table when it comes to deploying technology. In fact, the parallels between the two high-profile movements—despite vast differences in market power, class, and income—suggest that Google employees’ sense of exceptionalism may be starting to crack, along with illusions about how Google operates. If tech’s moment of reckoning has taught us that Silicon Valley is the same old capitalism, then perhaps Googlers are not a new kind of worker, and maybe some traditional labor rules apply: like the need for collective action in order to make structural change (Tiku 2018).

Important as this may be, it is part of a reactive movement. It has always been easier to denounce the evils of capitalism than foster a socialist-inspired alternative to it:

11  Towards a Socialist Technology

221

Technology is not the exception. But collective action promoting “other technology” needs first of all to conceive that “other technology is possible,” and this conception needs to be present among “engineers,” as well as other actors. This is why changes at the level of education are of paramount importance. Problem-solving training, a basic feature of any “engineering” education, should include problems of the type the UTOPIA project wanted to solve and problems defined by workers, that is, including not only efficiency and cost consideration in the equation but enhancing skills, quality of working life, and quality of products for users. This is a different engineering than the one usually taught, and probably quite challenging, but as the UTOPIA project demonstrated—this being one of its fundamental achievements—it is real engineering and not a mirage. Machines and products can be designed differently than mainstream technical logic. A proactive stance on the part of knowledgeable people will not come from education alone, but a different education may have made them aware that technology finds answers to determined questions, and that if questions change, then different technologies may emerge. They would become more open-minded, and eventually willing to provide, in a new type of alliance, new technologies for organized workers. A long road goes from here to effective implementation of technological alternatives in the working place, but knowing that it is possible is a needed starting point. It is worth noting that this is a claim that is not usually present in leftist platforms. A technological TINA seems to have conquered not only capitalist-minded people but socialist-inspired people as well. It is strange that, after so many scholarly and political work of leftist vintage emphasizing the class nature of technology, precisely when recognition of the importance of knowledge and technology is greater than ever before, this does weakly appear, if it appears at all, into the political and ideological battlefield. It has been argued that the problem is not the technology but the social system to which it belongs, implying that both, technology and social system, can be analytically and practically disentangled. Particularly those technologies related to automation and robotics, that are today more harmful for workers for downgrading their knowledge, skills, and ways of living, would be the liberating technologies of a socialist tomorrow. This sort of “technological social relativism” eradicates the critics to technology design for serving capitalists’ interests by positing that once socialism is in place such technologies will meekly enter at its service. It is not possible to discuss claims as these on factual terms because a global socialist society where such a human liberation would have taken place has never happened. As already noticed, the modern noncapitalist societies that existed and still exist did not show observable trends toward a capitalist technology with different effects than in capitalism. Even more fundamentally from the point of view of technological design, how to anticipate which problems will emerge in a socialist society, which criteria will need to be fulfilled to consider a technical solution acceptable, and how the inevitable conflicts over competitive approaches will be settled? Neither the difficulty of such anticipation nor the possibility that several “capitalist technologies” may result also useful once converted in “socialist technologies”

222

J. Sutz

following the concomitant social change should lead to neglecting the proactive side of action in the present.

 echnology of Socialist Inspiration in the Making: Technology T and Everyday Life Science and technology are the foundations of basic issues of everyday life related to health, housing, urban environment, transportation, communication, and entertainment. Extraordinary improvements, particularly on health, derive from scientific and technological efforts. They have been, socially speaking, below their potentialities, particularly because the patent system put such achievements out of reach for a vast part of the world population and constitutes a heavy burden for public health policies everywhere. Current technology incarnates several “capitalist sins,” in the sense that the social problems it presents are not intrinsically technical but made by design to suit capitalist interests. The outrageous waste of resources derived from planned obsolescence is one of them; the indifference for the environmental consequences of certain technologies that led even to the development of techniques to fake environmental tests is another of those sins. The ample movement that shocked such indifference and led to the development of technologies able to slow down environmental deterioration is currently under threat by crude manifestations of short-term capitalists’ interests. The latest worrisome trend relates to technologies for personal control and vigilance, the foundation of what Shoshana Zuboff (2019) calls “the age of surveillance capitalism”; they are altering everyday life in myriads of unforeseen ways. One of the most eloquent denunciations of the social evils of the capitalist directionality of technology comes perhaps from the World Health Organization and its expression “the 90/10 gap.” It states that 90% of all investments in health research corresponds to illnesses affecting 10% of the world population while only 10% of such investments are devoted to the health problems of 90% of people. A technology of socialist inspiration directed to everyday life is only possible if this equation is put upside down, if people are put at the center of technological efforts, meaning the problems people are facing. This implies not only a new agenda for innovation but also a new agenda for science, given the entanglement of current technology with modern science. Here, the concept of undone science, coined by David Hess (2007), is important: Because political and economic elites possess the resources to water and weed the garden of knowledge, the knowledge tends to grow (to be “selected”) in directions that are consistent with the goals of political and economic elites. When social-movement leaders and industry reformers who wish to change our societies look to “Science” for answers to their research questions, they often find an empty space (…) I call this ‘the problem of undone science.’ From the perspective of the activists and reform-oriented innovators, the science that should get done does not get done because there are structures in place that keep it from

11  Towards a Socialist Technology

223

getting done. The prioritization of research tends to create huge pockets of undone science that result in the systematic nonexistence of selected fields of research. (Hess 2007: 22–23)

It is worth recalling that directing technological efforts to determined problems is part of the issue—directionality is a central feature of socialist inspiration—but not the whole issue. The ways problems are solved are equally important. This appears clearly again in the realm of health: A vaccine or medical device which cost of ­production or which conditions of use prevent their utilization leave health problems unsolved for the population concerned. A technology of socialist inspiration for everyday life faces two interrelated challenges: to address problems not yet tackled and address them in ways not yet attempted. Originality as well as interdisciplinarity is at the heart of both challenges. A third related challenge is participation to frame problems and to assess solutions. The habit of not listening and not dialoguing with users added to the hierarchical imposition of technological strategies leads to what Lundvall (1985) forcefully denominates unsatisfactory innovations. Participation is not an easy task, though: It needs a recognition of its usefulness to achieve workable and efficient solutions, including use, maintenance, and repair; it needs organization for gathering opinions as well as accepted systems to reach consensus. This third challenge is akin to what Elinor Ostrom (1996) calls co-­production, that is, the dialogues established among people that belong to different organizations and, we can add, that know different things. Is there any way of characterizing what a technology of socialist inspiration associated with problems of everyday life would look like? Its first characteristic, besides the trivial one of being performant, would be accessibility: By definition, such a technology should embed in itself democratization of access to ways of enhancing human dignity and quality of life. This call for frugal innovation, defined as a way of obtaining results as good at least as “conventional” ones but with dramatic less use of resources of all types (Bound and Thornton 2012). Technological frugality calls for a different heuristics of solving problems than the one developed during more than a century in highly industrialized countries, increasingly based on abundance of resources and of infrastructures at both ends, from those who develop technologies to those who use them. Frugality implies the capacity to innovate in scarcity conditions, based on “mundane” as well as on formal scientific knowledge. This is a capacity well developed in the peripheries, relatively well documented when present in the form of grassroot innovations (Smith et  al. 2017, Ehn et  al. 2014) but less well known when based on science, even if there are striking examples of the latter (Sutz 2018, Arocena and Sutz 2012). From the point of view of everyday life, a technology of socialist inspiration can be seen as having inclusiveness as a purpose. This means designing certain goods and services in such a way that people without monetary and infrastructural conditions to access the main sources of supply may nevertheless enjoy the benefices of healthy houses, good sanitation, drinkable water, complete schemes of vaccination for children, good nutrition, and quality medical devices. This can eventually be achieved through a different approach to methods of production and requisites of use, for instance, relying on frugal innovation.

224

J. Sutz

Inclusiveness, affordability, and usefulness are by no means exclusive features of a technology with socialist inspiration. There are some high-tech products, like cell phones, with almost universal reach; through them, some important small-scale socioeconomic transformation took place (Foster and Heeks 2014, Cozzens and Thakur 2014). As the example tells by itself, though, nothing of the sort have been achieved in terms of global reach for other everyday life fundamental technologies. There is a side-to-side coexistence, for vast proportions of the world population, of epitomes of “capitalist high-tech” like cell phones and increasingly smartphones and the persistent lack of long-known technological tools of well-being. Will this situation persist? May a process of technological diffusion follow the track of cell phones and provide everyone with the minimum means of fulfilling a dignified everyday life? In other words, is the hope of developing technological fixes for current technologies to overcome at least some of the social evils of the capitalist system reasonable? The persistence of the gap between the haves and the have-nots in knowledge and technological terms—some devices notwithstanding—seems to confirm what Charles Tilly wrote in 2005: “A knowledge-based inequality prevails in contemporary world” (Tilly 2005: 115). This is not a conjuncture but a structural trend. On the other hand, can the elusive but important concept of social innovation (Brundenius 2017, Howaldt and Hochgerner 2018) be related to “innovation with socialist inspiration”? Social inspiration is not identical to socialist inspiration: Charity, for instance, has clear social inspiration but not necessarily socialist inspiration. Mario Benedetti, a Uruguayan poet, wrote a piece that was transformed in a song, “Cielito del 69,” where he says, “They come or they do not come; they will still know the news; charity is over; and justice will begin.” Social innovations may be geared toward social justice and the achievement of equal rights: If this is the case, it can be said that they have a socialist inspiration. Technologies of socialist inspiration will not reverse by themselves the trend toward inequality that Charles Tilly highlighted—technological fixes are deeply delusional—but they are needed as part of the effort to achieve this reversal. Actors in an effort like that should be, again, the educational system, to open room for exploring out of the box ways of formulating and solving problems. Public policies—and so political action—are other fundamental actors here. The ways in which public policies can help “technologies for people” to emerge are variegated, including public procurement as a practical tool and innovation policies with the mandate to innovate so people may be included in improved everyday life conditions as a policy guidance. Public policies are an important arena of conflict over ideological matters; knowledge and innovation policies are not exceptions. A socialist inspiration of the latter, based on a people-centered concern on quality of life, is a possibility of action even in the current situation.

11  Towards a Socialist Technology

225

Looking Ahead: Promising Trends and Fields of Action There are global movements fighting or countervailing current techno-political trends. The free software movement is perhaps the most ample and successful, in the very core of a strategic technology. It proved possible that constant improvement and not chaos may be the result of international cooperative work; they provided workable and efficient alternatives to expensive proprietary software tools. The philosophy that accompanies this movement includes the values of cooperation, search for technical excellence, freedom of design and access, and affordability (Himanen et al. 2001). A relatively new trend with resemblance to the latter is open science, which aim is countervailing the trend to privatization of knowledge by fostering immediate release of scientific data and based on that and fostering it further, collaborative scientific work, at local or international level. Accompanying open science comes open innovation: The scientific/technological might derived from collaboration have been amply proved by these movements, particularly in the field of data gathering. From another side comes the legitimization of qualifying innovation: Giving political credence to inclusive innovation (Stirling 2013) implies that innovation may be exclusionary, a not trivial recognition. Public policies for inclusive innovation are too recent to attempt at evaluating them, but it is encouraging that they exist. In the late sixties and early seventies, accompanying a wind of political and cultural contestation, there appeared some public experiments aiming at putting technology under societal control. The Swedish Center for Working Life and the Netherland Office of Technology Assessment are examples of the mood at that time—the former proposing different technologies and the latter assessing the social impact of current technologies; both were dismantled at some point by center-right governments. It is possible that a new wave of public experiments of the sort appears, this time not following political and cultural contestation but knowledge-­ based movements and intellectual shifts like the ones mentioned above. Perhaps the urgency of the climate change threat and the agreements over the Sustainable Development Goals, concerning both South and North, may lead to institutional creations of this type, hopefully more international in scope and wider in their technological ambitions. The balance between reactive and proactive efforts in the near future will probably be biased toward the former. Several traits of current technologies are Orwellian in purpose: To what alternative democratic, freedom-oriented, capabilities enhancing uses may serve technologies of face recognition, cell phone calls following, and personality profiles making based on personal surveillance of communication technologies? Denouncing such technologies and the misuse of related ones will probably become an important field of action in times to come, a place of encounter between technical employees of high-tech companies, academics, organization of the civil society, and students. In the past, the formation of coalitions of this type had concrete technological consequences as well as political ones: The antinuclear movement is an example at stake. The threat to human civilization from out-of-hand

226

J. Sutz

nuclear power may look more immediately disastrous than the one posed by “surveillance capitalism”; it is not evident that this is the case. The question remains of the possible spaces for the proactive building of alternatives to existing technologies or its uses, here and now, in the midst of hostile grounds. These spaces will need to start small and experimental, interstices-like, at community level. Thanks to the new technologies of communication, though, they need not become inward looking and isolated; they may benefit from the co-­ production of new culture and get stronger through cooperation. They are important not because they may produce technologies leading to huge amounts of revenues or acting as platforms for that aim. Their importance lies more in the future than in the present; when combined with progressive social change, they would serve as the technological infrastructure that all social systems require. It can be an endless discussion if the latter deserves the denomination of “technology of socialist inspiration.” It can well be referred to as “human-centered technologies,” in working life as well as in everyday life, including not only technologies of small scope but huge technological systems providing energy or transportation. To the extent that any socialist inspiration needs to be human centered and there is an emphasis in bottom-up participation and cooperation, the denomination holds. What could make prosper a socialist inspiration for knowledge production and knowledge use? At least two issues emerge. First is the issue of who is interested in such an approach. Are workers interested in a socialist-inspired technology? Are researchers, leftist intellectuals, and leftist policy makers interested in that? We are referring here to the proactive stance; the evils of capitalist technology are increasingly recognized, denounced, and even transformed in some circles in part of political platforms. Proactive stances require the rejection of the technological TINA; this is hard to achieve amid the bombardment of technological prowess that, besides their dark side, provides for unimaginable opportunities of expanding experiences anyone may have reasons to value. This is what we have. Refusing it will imply losing it without compensation. We do not know ways to keep some of the good things while avoiding the negative sides. We are skeptical about finding such ways. We continue then to denounce, as with capitalism, but we do not try to build alternatives, as some socialists try to do in the political realm. This leads to the second issue referred to as the loyalties of researchers and engineers. If the young students of the sciences and engineering do not look critically at their future work as solution makers and if they do not have a normative view in relation to such work, the strength of their minds will be oriented by the powers that be. Neither the responsibility for such a critical look nor the willingness to think out of the box in socio-technical terms can be put like a burden over their shoulders as a matter of personal commitment. It is a matter of collective responsibility, starting with teaching, the place where specialized skills and knowledge nurture. Universities have been, all over the world, places of contest; such role diminished lately, accompanying the increasing commercialization of advanced education. They still are, though, not only first-order actors of knowledge production but spaces with remarkable degrees of freedom of thought as well as coordination capacity. This freedom can be used to inspire reflections and spur questions leading to new problem formulations and new heuristics to tackle them; the coordination capacity may foster that

11  Towards a Socialist Technology

227

many universities get involved in such endeavor, harvesting the benefits of any other open science experience. As already indicated, it is necessary to have a technology able to encompass progressive social change, even though for a long time it may rest at interstice level. After all, interstices are spaces where experiments can flourish. Feasible policy actions may nurture and protect them; it is much easier to foster and defend interstices where technologies of socialist inspiration emerge than fighting capitalism. Feasible policy actions can go further and connect people of different knowledge backgrounds, fostering processes of co-production of problems and solutions. If people, as citizens and workers, become the owners of what is done in these interstices, then it may consolidate, grow, and sustain deep social change.

References Arocena R, Sutz J (2012) Research and innovation policies for social inclusion: an opportunity for developing countries. Innovation and Development 2(1):147–158 Bound K, Thornton I (2012) Our frugal future: lessons from India’s innovation system. wwww. nesta.org.uk Braverman H (1974) Labor and monopoly capital: the degradation of work in the twentieth century. Monthly Review Press, New York Brundenius C (2017) Challenges of rising inequalities and the quest for inclusive and sustainable development. In: Brundenius C, Goransson B, Carvalho de Mello J (eds) Universities, inclusive development and social innovation. Springer, Cham, pp 9–48 Cozzens S, Thakur D (2014) Innovation and inequality: emerging technologies in an unequal world. Edward Elgar, New York CSIC (Comisión Sectorial de Investigación Científica) (2019). http://www.csic.edu.uy/renderPage/index/pageId/1105. Accessed 27 Feb 2019 Ehn P (1988) Work-oriented design of computer artifacts, PhD Thesis, Umea University. https:// www.diva-portal.org/smash/get/diva2:580037/FULLTEXT02.pdf. Accessed Jan 2019 Ehn P, Nilsson E, Topgaard R (2014) Making futures. In: Marginal notes on innovation, design, and democracy. The MIT Press, Cambridge, MA Foster C, Heeks R (2014) Nurturing user–producer interaction: inclusive innovation flows in a low-income mobile phone market. Ind Innov 4(2):221–237 Heilbroner R (1994) Do machines make history? In: Smith MR, Marx L (eds) Does technology drive history? The dilemma of technological determinism. The MIT Press, New York, pp 53–66 Hess D (2007) Alternative pathways in science and industry: activism, innovation, and the environment in an era of globalization. The MIT Press, Cambridge, MA Himanen P, Castells M, Tordval L (2001) The hacker ethic and the spirit of the information age. Random House, New York Hoare C (1981) The 1980 ACM Turing Award lecture: the emperor old clothes. Commun ACM 24(2):75–83 Hobsbawm E (1952) The machine breakers. Past Present 1:57–70 Howaldt J, Hochgerner J (2018) Desperately seeking: a shared understanding of social innovation, Atlas of Social Innovation. https://www.socialinnovationatlas.net/. Accessed 28 Feb 2019 Landes D (2003) Unbound Prometheus. In: Technical change and industrial development in Western Europe from 1750 to the present. Cambridge University Press, Cambridge Leydesdorff L, Van Den Besselaar P (1987) What we have learned from the Amsterdam science shop. In: Blume S, Bunders J, Leydesdroff L, Whitley R (eds) The social direction of the public sciences. D. Reidel Publishing Co., Dordrecht, pp 135–162

228

J. Sutz

Lundvall BÅ (1985) Product innovation and user-producer interaction, Industrial Development Research Series No. 31. Aalborg University Press, Aalborg Marglin SA (1974) What do bosses do? The origins and functions of hierarchy in capitalist production. Rev Rad Polit Econ 6:60–127 Marx K (1847) Marx to Pavel Vasilyevich Annenkov in Paris. http://www.marxistsfr.org/archive// marx/works/1847/letters/47_12_09.htm. Accessed Jan 2019 Marx L (1994) The idea of “technology” and postmodern pessimism. In: Smith MR, Marx L (eds) Does technology drive history? The dilema of technological determinism. The MIT Press, New York, pp 237–258 Marx K, Engels F (1848) Manifest of the Communist Party, Marxist Internet Archive. https://www. marxists.org/archive/marx/works/download/pdf/Manifesto.pdf. Accessed Jan 2019. Misa T (1994) Retrieving sociotechnical change from technological determinism. In: Smith MR, Marx L (eds) Does technology drive history? The dilemma of technological determinism. The MIT Press, New York, pp 115–142 Mumford L (2010) Technics and civilization. The University of Chicago Press, Chicago Noble D (1979) Social choice in machine design: the case of numerically controlled machine tools. In: Zimbalist A (ed) Case studies on the labour process. Monthly Review Press, New York, pp 18–50 Ostrom E (1996) Crossing the great divide: coproduction, synergy, and development. World Dev 24(6):1073–1087 Rosenberg N (1976) Marx as a student of technology. Mon Rev 28(3):56–77 Schot J (2003) The contested rise of a modernist technology politics. In: Misa T, Brey P, Feenberg A (eds) Modernity and technology. The MIT Press, Cambridge, pp 257–278 Smith A, Fressoli M, Abrol D, Around E, Ely A (2017) Grassroots innovation movements. Routledge, New York Stirling A (2013) Pluralising progress: from inclusive innovation to innovation democracy. Contribution to the Dig-IT Workshop on Inclusive Growth, Innovation and Technology: Interdisciplinary Perspectives. University of Sussex, Brighton Sutz J (2018) Health inequalities in the global south: transforming inspiring stories in effective policies. Technology Stories, Society for the History of Technology. https://www.technologystories.org/2018/05/. Accessed Jan 2019. Tiku N (2018) The year tech workers realized they were workers. WIRED, December 24. https:// www.wired.com/story/why-hotel-workers-strike-reverberated-through-tech/. Accessed Jan 2019. Tilly C (2005) Identities, boundaries, and social ties. Paradigm Publishers, Boulder Weizenbaum J (1976) Computer power and human reason: from judgment to calculation. Freeman and Co., San Francisco Zuboff S (2019) The age of surveillance capitalism: the fight for a human future at the new frontier of power. Public Affairs, New York

Chapter 12

The Socialism of Yesterday, Today, and Tomorrow Rodrigo Arocena

What Was Socialism About? State socialism—once upon a time called (the only) “really existing socialism”—was undoubtedly a process that shaped the history of humankind during the twentieth ­century. Its flaws concerning freedoms and rights were early and widely acknowledged. Nevertheless, its military, economic, and technological achievements in the USSR seemed to ensure its future, which—for many people among which some of its critics—could include some kind of liberalization. It was possible to think that the combination of the expansion of productive forces with improvements of social ­relations would end by shaping state socialism as a stronger and more desirable ­system than capitalism, thus confirming in the long run Marxist p­ rediction and ­moreover the hopes of a better future awakened in so many people by socialist ­proposals. Possible socialism was perhaps not a contradiction in itself, as so many had believed before 1917. When the long period headed in the USSR government by Brezhnev (1964–1982) was coming to an end, not only liberalization seemed blocked but the economic dynamics of the central and authoritarian planning system looked near to exhaustion and incapable of winning the economic race with Western capitalist. Variants of state socialism were losing momentum in many places. In such context, intellectual efforts for the renewal of the Left acquired some modest relevance. They aimed to preserve socialist values by means of projects which combined feasibility and ­desirability better than those that had dominated the ideological landscape of the Left for many decades. But what was the global alternative for humankind that such efforts wanted to revitalize? An answer was provided in the following terms by an important book by Alec Nove entitled “Economics of Feasible Socialism” that was published at that time. R. Arocena (*) University of the Republic, Montevideo, Uruguay e-mail: [email protected] © Springer Nature Switzerland AG 2020 C. Brundenius (ed.), Reflections on Socialism in the Twenty-First Century, https://doi.org/10.1007/978-3-030-33920-3_12

229

230

R. Arocena

“‘Socialism’ is thought of as an alternative to a society still based largely on private ownership and private profit. Generations of reformers and revolutionaries envisaged a world in which there would be no great inequalities of income and wealth, where common ownership would prevail, where economic (and political) power would be more evenly distributed, where ordinary people would have greater control over their lives and over the conditions of their work, in which deliberate planning for the common good of society would replace (at least in part) the ­elemental forces of the market place” (Nove 1983: 7). The enormous diversity of socialist doctrines and movements notwithstanding the above looks as a preliminary and acceptable working characterization of ­socialism. It is worthwhile trying to distinguish in it means from ends and comment its mutual influences. Tentatively, the following can be argued. Fighting against inequality and subjection to market forces, as for better living conditions for “ordinary people,” constitutes defining normative ends of socialism. Historically, it drew its mobilization strength from the appalling conditions of ­workers in the birthplaces of the Industrial Revolution. The imperialism of the industrialized West created comparable conditions in almost every region of the rest of the world. No wonder that worldwide anti-colonialism frequently embraced socialism, thus seeming to ensure its ultimate triumph. But usual socialist means for such ends were less than successful, both in the Second World of state socialism and in the revolutionary regimes of the Third World. Broadly speaking, living conditions of people in general were in several cases significantly improved, but some catastrophic drawbacks also took place and, on the mean, improvement lost momentum, different types of inequality were enshrined, and oppression was widespread. Such disappointing results demand a closer look to the interaction between ends and means. The characterization of socialism we are analyzing includes a more even distribution of power as one of its defining ends. In fact, state socialism is by far more akin to concentration of power than to its distribution. Abolishing private p­ roperty—a theft according to a famous formulation—was a normative imperative related with overcoming individualism and building true communities where exploitation and need would be absent, that is, communism. Now, “common ownership” could be and has been interpreted in different ways. But when connected with reigning over markets and enabling widespread planning, the almost obvious interpretation of the vague notion of “common ownership” was in terms of the quite concrete formula of state property. The Communist Manifesto was already a plea for state socialism. In the realm of ideas, such option was not necessarily incompatible with a more even distribution of power, though only in the long run. Marxism assumed that state property and planning would foster such an expansion of productive forces that every human being would be able to receive goods and services according to his needs; thus, governing people would not be still necessary, and only administration of things would be required. The state would wither away, and with it, differences in economic and political power. A more or less long detour would take humankind to what anarchism believed immediately attainable.

12  The Socialism of Yesterday, Today, and Tomorrow

231

While the last could not show tangible evidence in support of its proposals, Marxist USSR was able to reach an astounding level of productive and destructive forces, as Hitler discovered. But if concentration of state power and coercive central planning obtained further recognition, for example in the space race since 1957, in the following decades, it became increasingly evident that such relations of production were fettering rather than fostering the expansion of productive forces. State socialism appeared to be increasingly unable to fulfill the hopes associated with socialism. These were still defined by diminishing inequalities of economic and political power, controlling market forces, and fostering common ownership as valuable ends in themselves and as fundamental means for improving the living conditions of ordinary people. But historical experience has been showing that, in such sense, socialism has small possibilities.

What Is Left? “Market socialism”—as considered, for example, in Nove’s book—aimed at overcoming some flaws of really existing socialism by opening more space for markets. In some sense, it was a symmetric attempt to the one of overcoming some flaws of capitalism by state action. But if the latter, especially in the European social democratic version, had a high impact in the history of the twentieth century, the former was far from that. The more or less weak attempts to foster market socialism were completely overshadowed by what amounted to the demise of state socialism in its main actual versions, with a not less significant impact in the realm of ideas. From that point of view—as in other related ones—the decade 1981–1991 was a major turning point. At its end, the once promised land of state socialism had disappeared, as a regime and even as a nation, while its successor states were preys to mafia types of capitalism. But, at its start, advancing to socialism by expanding state property was still a major clue for political action worldwide and even in the rich West. In 1981, Mitterrand was elected as president of France, backed by a Union of the Left where even its main component, the Socialist Party, axed its program in the proposal of going beyond capitalism, mainly by a wide nationalization of big enterprises. Its combination with an audacious Keynesian policy was soon checked by the reaction of what came to be known simply as “the markets.” A very different orientation— neoliberalism politically associated with the names of Reagan and Thatcher— became dominant in the West and beyond. In June 1989, the Chinese government bloodily asserted that its gradual departure from state socialism, started more than 10 years before, would have little to do with human rights, democracy, or less even distribution of power but with the shift to authoritarian capitalism. In 1989–1991, the Soviet Empire imploded. The world had changed. “What is Left?” was the wonderfully eloquent and concise title of an article (Lukes 1992) where a general appraisal of the new situation was attempted. It asserted that: “The socialism we have lost is not only a theory of institutional design for an entire socio-economic system but the very idea of such a theory.”

232

R. Arocena

The turn to the left in South America during the 2000s seemed to contradict such assertion. In different ways though in every case with a base on the economic bonanza stemming from the commodity boom, neoliberalism was defeated, poverty was substantially diminished, and even inequality redressed. From 2002 to 2017, according to recent statements by the Economic Commission for Latin America and the Caribbean, in that region, inequality diminished in not small measure. The most theoretically and politically ambitious project of that turn to the left was called “the socialism of the 21st century.” Ideologically, it was not very different from the state socialism of the twentieth century; in its heartland Venezuela, it was economically not more successful. When the second decade of the twenty-first century comes to an end, neoliberalism is again on the rise in South America, a chauvinistic right-wing reaction sweeps the rich West, and authoritarian capitalism is on the rise worldwide. In the age of Trump, Bolsonaro, Putin, and Xi Jinping, scarcely anything relevant and akin to socialism seems possible. If that is so, in intellectual terms, a new start seems badly needed. What is Left? Perhaps more than ever, that is the question.

A Point of Entry: Values Come First Socialism, as recalled above, has to do with characterizing and building a just society. Plain common sense seems to suggest that searching for a just society (or, more modestly, for less injustice in our society) has to do with values, facts, trends, and proposals. Which of them can be neglected? If action is intended, proposals cannot be absent. Their aims are shaped by values. They should be explicitly formulated, ­particularly for gauging results. Possibilities of being effective depend on some awareness of facts. They show that this is a changing world so attention should also be given to main trends that will probably shape the life chances of human beings in the more or less near future. Searching new alternatives for the Left should be attempted by combining normative, factual, prospective, and propositional elaborations or approaches. Which should be the starting point? Even very small and partial attempts to redress injustice requires, at least between those involved in such tasks, a minimal agreement about the evil and the good. Such agreement stresses the wrongs that should be faced and the characteristics of a better situation. The normative approach should come first. To elaborate this commonsensical argument, we can go back to Lukes’ text. Immediately after the above quoted assertion, about the loss of socialism as an institutional design for an entire system, Lukes (1992) wrote that: “What is left is a strongly egalitarian, liberal and anti-individualist political morality that can inspire particular institutional innovations, programmes and policies and by which they can be judged.”

12  The Socialism of Yesterday, Today, and Tomorrow

233

This point of view offers several perhaps elementary but not trivial elements for reconstructing left-wing perspectives. The first one is that the basis of any such elaboration should be a “political morality.” We should agree or disagree first of all about values—and not about institutional designs, interpretations of social history, political strategies, or government policies. In other words, in this perspective also, values come first. That has not been the rule in the history of socialist ideas and movements. What Marxism called “utopic socialism,” in its various forms, was characterized by promoting institutional designs that would guarantee a just society; in turn, “scientific socialism” claimed that it had discovered the laws of social evolution and that those laws ensured the arrival of the just society, called communism. Neither alternative is still tenable. The point deserves careful and wide discussion because many efforts are wasted or even backfired when assuming one of those two types of hypothesis, especially the second one. For the moment being, it is enough to suggest that serious doubts concerning such hypothesis stem from a minimally careful study of the history of the last 250  years and also from what we should have learned since the nineteenth century concerning the scope and limits of scientific knowledge. Lukes’ characterization of the “political morality” of the Left suggests that the first step in a surely difficult process of reconstruction should be to reinvigorate an old commitment with foundational values. Here, the Left is defined in normative terms, by its commitment with liberty, equality, and fraternity or solidarity, the three values taken at the same level and without subordinating one of them to another.

From Values to Struggles: And Back If the above normative characterization is a first step in answering the guiding ­question—“What is Left?”—a second step can be the following: the Left is, also and fundamentally, the set of struggles that its values have inspired or can inspire. In fact, values are an inspiration for struggles but usually not the main motive because, as Max Weber wrote, not ideas but material and ideal interests govern the behavior of people (Gerth and Mills 1958: 63). But values are usually mixed with interests in setting aims and tools for concrete struggles. And, conversely, the experience of past struggles shapes and expands the defining values. The Left is “a project born of the Enlightenment and expressed in the Principles of 1789”—writes Lukes (op. cit.)—[…] “that has been expressed in various ways— in the language of rights, as a story of expanding citizenship or justice or democracy, or as a continuing struggle against exploitation and oppression, as it was by Karl Kautsky when he wrote that the goal of socialism was ‘the abolition of every kind of exploitation and oppression, be it directed against a class, a party, a sex or a race.’ The Left, we may say, is committed to the progressive rectification of inequalities than those on the Right see as sacred, inviolable, natural or inevitable.”

234

R. Arocena

The quotation suggests that the Left which was born with the French Revolution is not one project but a set of different though related projects. History also ­recommends speaking of the Lefts in plural. Analyzing the results of the struggles in which the Lefts have been involved is part of the factual approach to updating its strategies. That is urgent in a world that today seems to go quickly to the Right. It can be shown that the Lefts have made significant contributions to the ­expansion of rights, of citizenship, of justice, and of democracy. Perhaps they can even be credited with the greater contributions to such causes in modern times. But undoubtedly, left-wing organizations have committed major sins concerning all those causes. Among the main lessons stemming from the historical balance, two will be recalled in the sequel. First, there is not one major source of injustice such that coping with it guarantees the progress toward justice. Thus, the normative approach points to struggling against “every kind of exploitation and oppression, be it directed against a class, a party, a sex or a race.” But a second lesson says quite emphatically that a normative identification of socialism with “the abolition of every kind of exploitation and oppression” implies that socialism is not possible. The facts of history, and especially the results of past struggles fostered by the Lefts, lead to a modest redefinition of its normative characterization. The last starts with a commitment with liberty, equality, and solidarity and consequently not with the abolition of, but with the permanent struggle against, every kind of exploitation and oppression. Lukes suggests really a wider characterization when he says that the Left “is committed to the progressive rectification of inequalities”: exploitation and oppression cause inequalities but not all inequalities stem from such causes. Rectifying inequalities includes fighting exploitation and oppression but goes beyond that fact. Since it is simply not possible to rectify permanently every kind of inequality, it follows again that the normative characterization should not commit the Left to build a just society, in this case identified with the reign of equality. Postulating the coming of a society without inequalities has consequences that may be devastating; for example, the gap between promises and realities is somehow covered by a combination of propaganda and repression, or disappointed popular sectors withdraw their support to left-wing projects. In both cases, individualist values are fostered. Perhaps the normative commitment, rather than with rectification of inequalities, should be with the permanent expansion of capabilities to face inequalities and work for equality.

Some Elements for a Factual Approach The Left(s) are characterized by their prescriptions for improving society. Prescriptions include both normative and propositional assertions. But it is not ­sensible to go more or less directly from values (what is the good?) to proposals (what is to be done?). An analysis of what possibilities are opened or closed by the

12  The Socialism of Yesterday, Today, and Tomorrow

235

weight of reality can’t be skipped. Here stood one of the main strengths of Marxism: it offered an interpretation of social structure and dynamics that combined a ­profound insight with clear and relatively simple conclusions that left small place to doubts. Such combination cannot be recovered; it characterized some of the best science of the nineteenth century optimism when it could be believed that the secrets of the cosmos were almost discovered. Nevertheless, historical materialism offers rich elements for describing and ­trying in some measure to interpret wide aspects of social reality. That is so particularly concerning the relevance of changing productive forces and of its interactions with the relations of production. The unilateral emphasis of Marxism on economics determination can be tempered perhaps by means of the theory of the sources of social power elaborated by Michael Mann (1986 1993, 2012, 2013). Power is “the ability to pursue and attain goals through mastery of one’s environment” (Mann 1986: 6), understood as both natural and social environment. “The pursuit of almost all our motivational drives, our needs and goals, involves human beings in external relations with nature and other human beings. Human goals require both intervention in nature -a material life in the widest sense- and social cooperation” (Mann 1986: 5). Material life is directly related with technology, main examples of which are productive forces but also destructive forces and connective technologies, like those related with transport and communication. The coordination of human activities generates ideological, economic, military, and political relations that give rise to organized networks; Mann’s work presents those relations as the fundamental sources of social power. Collective power is the power of a group over nature or other groups; distributive power is the power within a group of those who organize and control its action. A fundamental consequence of such theory is that there is no collective power without distributive power. The mutual influences between, on the one hand, ideological, economic, military, and political relations and, on the other hand, technology deserve an attention that extends a key insight of Marxism; it is not properly theorized by Mann although it can be seen to play a key role in his monumental history of social power. In a nutshell, a Marx-Mann conceptual scheme (Arocena 2018) can be elaborated starting by the assumption that social power stems fundamentally (but surely not only) from: (i) Technologies enabling the use of material resources in ways that have been greatly increased and diversified since the so-called marriage of science and technology (ii) Social relations that generate organizational power by coordinating different activities, mainly ideological, economic, military, and political (iii) Mutual influences between technologies and social relations Such scheme allows a tentative (and here very schematic) interpretation of some processes that shape the world where the Left has to find new ways for promoting its values. Advanced knowledge has grown quickly, becoming the fundamental basis of power, particularly economic and military. Productive, destructive, and connective technologies are being permanently transformed. Working possibilities, ways of

236

R. Arocena

life, and institutions are consequently suffering deep destabilization processes, which cannot but have consequences in ideological and subjective issues. Half a century ago, there existed two industrial societies: the First World and the Soviet bloc had a comparable technological basis, shaped by industrialization, but with quite different economic, political, and ideological dominant relations. The ITC revolution interacted in the West with the restructuring of capitalism oriented by neoliberal ideology, as acutely described by Castells (1996). The collective power of Western capitalism was enhanced as well as the distributive power within it of propertied classes over working classes. Economic, political, and ­ideological relations characteristic of state socialism fettered rather than fostered the emergence of a knowledge-based and innovation-driven economy; thus, its power was diminished in relation to the West and its demise took place quite quickly. An unexpected transition to (different types of) capitalism swept almost all the old Second World. Today, the North can be briefly characterized as a capitalist knowledge society; it is the dominant configuration of power at present. In it, the state has a role that is not the same in different countries but in any case is ample, diverse, and necessary for the more or less efficient functioning of capitalism. “Highly developed productive technology requires an enormous, ­ ­centrally maintained infrastructure. Its cost, in developed societies, has come to be somewhere in the neighbourhood of half the national income. Without such infrastructure, both the production and the consumption of a modern industrial machine would seize up” (Gellner 1988:188). Such infrastructure is enormous and largely indivisible: “Strategic decisions concerning its deployment and form affect enormous populations for long periods and often do so irreversibly. [...] The state is now largely the name for the cluster of agencies that perform this role” (idem: 278). Nevertheless, it is perhaps better to speak of combined economies than of mixed economies, because public property is comparatively small and, more important, because public action is largely subordinated to private property, markets, and particularly financial capital. The dominant position of the last has hardly been eroded in spite of being the acknowledged main culprit of the Great Recession of 2008; that gives a good measure of its power. Globalization, with its remarkable communicative, productive, and financial dimensions, was fostered by the capitalist knowledge society. It has winners and losers among classes and nations. Up to now, as a nation, China is the main winner of globalization. In early 2017, its government was called to speak on behalf of globalization by its Davos lobbyists, terrorized by Trump’s threat. The alliance of an authoritarian state, strongly ­organized by the Communist Party, with international capitalist networks, where Chinese firms play an increasing role, generated a breathtaking process of growth and industrialization. Ideologically fueled by a nationalism of a very old and s­ pecific vintage, with its memories of past greatness and more recent humiliations, China is building its military power. And no country seems to be giving more attention to the expansion of its advanced knowledge base.

12  The Socialism of Yesterday, Today, and Tomorrow

237

Max Weber (2000: 39) wrote that: “‘Classes’ are groups of people who, from the point of view of specific interests, have the same economic position. Ownership or non-ownership of material goods or of definite skills constitute the ‘class situation’.” A quite recent exploration on the perspectives of social democracy sketches a similar conception of classes and points to its consequences in the capitalist knowledge society. “‘Class’ is determined by the position in economic life, especially the control of the production means. Today, different kinds of specialist knowledge are becoming important production means—capital—and persons in possession of such capital command a strong position in working life that is fully comparable to that of big capital ownership. This group differs from the traditional capital-owning class and middle class. If this new class chooses to ally itself with the capital-­owning class it could affect the old alliance between the middle and working class. There are also shifts in the working class. Skilled workers can be said to have strengthened their position while at the same time, there is a clear increase in the proportion of jobs with insecure employment terms and low wages, and short intermediate periods of unemployment are common” (Carlsson and Lindgren 2007: 89). In the West, owners in Weber’s sense have been winners of globalization. The bulk of upper classes have profited from it, particularly by investing in countries where labor is cheap and environmental regulation is weak, using their power for getting tax benefits at home and abroad, and even so hiding their money in fiscal paradises. Winners of globalization include highly educated people who reach advantageous positions in the global knowledge-based economy; ideologically, they are mainly cosmopolitan and liberal, even in cultural terms. Losers of globalization in the West are mainly nonowners in Weber’s sense, especially “the common people,” with limited formal education, who have often seen their working conditions being deteriorated by industrial delocalization, technological change, and increasing power of capital over labor. Concerning the rest of the world, it is worth stating that the peripheral condition today is characterized by economic dynamics not being mainly based on advanced knowledge and high qualifications. A few East Asian countries have escaped from the peripheral condition and are today members of the capitalist knowledge society. It is said that some countries are caught in the “middle-income trap,” meaning that they cannot compete in the global economy by salaries with low-income countries nor by innovation capabilities with knowledge-advanced countries; such countries have built a more or less sophisticated economy, often based in a rich endowment of natural resources, but have not escaped from the peripheral condition as characterized in the first sentence of this paragraph. South America is an example of such situation. Some low-income countries are trying to imitate (the first stages of) a more or less Chinese way by specializing in the low-skilled, low-paid, and weakly regulated parts of global value chains. Even such neoperipheral insertion in globalization is difficult for many regions where marginalization grows and desperate migration is the only alternative for many people. In the centers of the capitalist knowledge society, a reaction against globalization started in 2016 what Hodgson (2018) called a political earthquake. Economic losers of globalization in the rich West fed a great wave, politically rightist, ideologically

238

R. Arocena

chauvinistic, and conservative. It has grown with the challenges of migration. The European Union is at stake. Such reaction took office in the US, where it is benefiting mainly privileged sectors by tax cuts and relaxed regulations. It is in tune with an authoritarian and nationalist trend seen in many parts of the world, frequently in search of a strong man, as an answer to global insecurity and destabilization. The new president of Brazil is a perfect example of all that. His election shows that in South America, the pendulum is going very quickly from state to market and from left to right. It went in the other direction in the first years of this century, fostered by a popular peripheral reaction to neoliberal globalization. Distribution and social policies took speed, supported by a remarkable bonanza stemming from the rising demand of commodities. When the bonanza ended, incumbents started to face difficult situations and mounting challenges, especially where policies have been plagued with inefficiencies and corruption. The experience of the progressive turn in South America shows that the Lefts don’t have a project of their own for overcoming the peripheral condition in the context of the capitalist knowledge society in such a way that diminishing inequalities can be self-sustainable. Today, the main challenge to globalization is a reaction which can be seen in the whole West and now has its center in the government of the country where the capitalist knowledge society was born. As such, this society does not seem to be at stake, but the global order it fostered is being contested by trends stemming from different sources of social power. US military hegemony may be diminishing, particularly by its apparent neo-isolationism. The up-to-now dominant political order of the capitalist knowledge society—liberal democracy, better called polyarchy (Dahl 1973)—is challenged from inside and from outside. In the heydays of neoliberal globalism, a strong trend toward plutocracy was fostered; it is still strong, now compounded by the authoritarian wave. A wholly illiberal authoritarian regime characterizes China, the great power that is ­trying to open its own way to the capitalist knowledge society and is looked with envy by several governments. Ideologically, neoliberalism still holds the upper hand and nationalism is on the rise. They can fight each other, as in France, but variants of both can be combined in the same package, as apparently happens in India and is announced by Brazil’s new government. Neither will help improving the situation of ordinary people nor facing the main world challenges. It is time to go—always in a quite ­schematic and tentative way—from a factual approach to a prospective approach.

About Trends and Challenges Uncertainty is perhaps not less today than in any moment of the past. When the earthquake started in the West, many looked to China as a rampart of stability. While ­economic growth keeps being quick, thus speedy diminishing poverty, the new Communist Dynasty of the old Middle Kingdom will probably keep its dominant position; if that changes, disappointment combined with the burdens of d­ espotism, inequality, and pollution may open a period of troubled times. Its consequences could be truly global.

12  The Socialism of Yesterday, Today, and Tomorrow

239

The history of the last thirty years recommends not trying to anticipate the future. In any case, the latter is not the aim of prospective work. In some of its more elaborated contributions, it presents a set of alternative scenarios or possible futures in order to help thinking what can or cannot happen. Here, something much more modest will be attempted, namely, recalling some relevant trends as well as great challenges that point to major changes and (perhaps) open new possibilities. The increasing role of knowledge should be stressed first. It has been apparent for a long time, so dominant configurations of power are based on knowledge; but not only the continuity of such trend is to be considered, because its destabilizing influence may be reflected in more than one breaking point. One of them could be a new and stronger wave of technological unemployment. Continuities have to do with the knowledge-based expansion and diversification of the production of goods and services as well as with related improvements in the standards of life. Health, education, life expectation, or incomes have on the mean increased remarkably during the last decades. The ensuing rise of consumption expectations seems to make economic growth a lasting determinant of government success in very different regimes. Prevalent ways for generating and using knowledge in connection with the expansion of production have fostered environmental degradation to an extent that it is now usual to speak of a new period in the history of Earth, the Anthropocene, where human action becomes relevant in shaping the evolution of the biosphere. The accelerated rates of increase in human population and energy utilization are considered as main factors of that process (McNeill and Engelke 2014). The actual impacts on the environment are directly related not only to industry, as it has been happening for a long time, but also to agriculture (Moore 2015). The combination of new knowledge and power relations generated the threat of a nuclear holocaust. The aim of avoiding it—successfully up to now—changed ­substantially military and geopolitical relations. But the ways in which dominant ideological, economic, military, and political relations are shaping knowledge ­generation and use for production, destruction, and consumption have kept open such threat and opened a new one, the possibility of a climatic holocaust. The expanded role of knowledge is at the root also of another major trend, the rise of inequality. It has been taking place during the last decades in most countries as part of a process said to continue in the future (Piketty 2014). According to Scheidel (2017: 374), great transitions in history have always promoted inequality. Elites are much better endowed than ordinary people to take profit of advanced knowledge. And the last is in itself a source of inequality between individuals, social groups, and regions: those with more opportunities to learn and use knowledge increase their stock of it, and the contrary happens to those with less opportunities of that type. Inequality and social polarization are being a main source of violence (Davies 2017), which in turn stimulates the authoritarian rightist wave. The last will most probably deepen inequality and is already complicating efforts to face climatic problems.

240

R. Arocena

Yesterday, it was usual to speak about the transition from capitalism to socialism. Then the reverse transition made its appearance. A very different and much deeper one is needed at present and not only because of environmental motives. “The First Deep Transition has fed the double challenge of environmental degradation and social inequality: the Second Deep Transition might emerge as a response to this challenge” (Schot and Langer 2018). The so-called First Deep Transition was fostered by the entwined expansion of capitalism and industrialization; the combination of capitalism and advanced knowledge has deepened that double challenge. The Marx-Mann scheme suggests that it will be quite difficult to overcome the double challenge without a comparable transition in (i) orientations of science and technology; (ii) social relations in general, including ideological aspects concerning values, aspirations, and ways of life; and (iii) the mutual influence between knowledge dynamics and power networks. In such context perhaps, the ideological power of socialism will bring it back in, with or without its old name.

On Democracy It is said that Jean Jaurès thought that democracy is the minimum of socialism while socialism is the maximum of democracy. A convergent statement was recently made in the Marxist Journal Jacobin: “socialism consists of the widest application of democracy” (Muldoon 2019; underlined in the original). Those assertions have a normative character fully compatible with what was said above concerning values which, if they are not just propaganda, should guide actions. Revolutionary socialism usually ignored such point of view, with catastrophic consequences. “Some revolutionary socialists have believed that a turn to authoritarian one-party rule during a transition from capitalism need not destroy the possibility of the subsequent evolution of meaningful egalitarian democracy. Historical experience suggests that this is very unlikely: the concentration of power and unaccountability that accompanies the abrogation of multi-party representative democracy and the ‘rule of law’ generates new rules of the game and institutional forms in which ruthlessness is rewarded, democratic values marginalized, dissent is dealt with repressively and the kinds of autonomous capacities for collective action in civil society needed for democracy destroyed. The legacies of such practices during the difficult times of a transition make a democratic socialist destination implausible” (Wright 2010: 221). More can be said: “Governments that remove, or fail to protect, human rights and democracy are much more likely to lead to repression, famine, war and human misery” (Hodgson 2018: 133). As the often tragic history of the twentieth century shows, that is a fact. Social democracy often asserts that “real democracy assumes and creates freedom, equality and solidarity at the same time” (Carlsson and Lindgren 2007: 21). Again, facts and values should not be confused. The last assertion is akin to Jaures’ formulation in a normative sense. But factually, it is open to challenge if “real democracy” is understood as “really existing democracy.” The latter is necessary but not sufficient for creating “freedom, equality, and solidarity at the same time.”

12  The Socialism of Yesterday, Today, and Tomorrow

241

The momentous changes in power relations that shaped the emergence of the capitalist knowledge society and the demise of state socialism also eroded the strategies of social democracy. Its adaptation to more narrow possibilities can often be considered as variants of a general type, social liberalism, which fully embraces polyarchy, accepts and even promotes markets though attempting to regulate them seriously, and tries to combine economic growth with social redistribution. In the central countries of the capitalist knowledge society, it looks factually quite difficult to go more to the left than social liberalism. In the peripheries, it is even more difficult, except in transient ways associated to periods of bonanza. Its main strengths are its commitment with political democracy and its economic realism. Its ideological weakness, especially concerning the long range, lies in the absence of transformative projects; without them, there is no chance of coping with rising inequality and lack of sustainability. In the short term, social liberalism is also weak concerning its ideological power to motivate people and involve them in collective action. Such weakness, apparent also in most types of social democracy today, is particularly damaging when facing the rightist authoritarian and nationalist wave that is able to speak to the fears and desires of wide sectors of ordinary people. The shortcomings of social liberalism feed different types of anti-capitalism inspired in Marxist critique, which often makes important intellectual contributions but barely elaborates feasible and desirable alternative proposals. This also has been evident in the turn to the left in South America during the first years of this century. Problems as some recalled above suggest that few possibilities are opened for democratic socialism as a system. It often seems to be the project for a democratic state socialism, where the state would not only regulate but prevail over the markets as well as politics over economics, in such a way that production and distribution could be governed by expanding the scope of standard democratic procedures. Actual configurations of power don’t open much space for such strategy. Moreover, it is based on an overoptimistic view of what the state and political democracy can do. “Once the problem of envisioning a democratic socialist future in large-scale societies is addressed, with serious attempts to answer practical questions of how information is gathered and transmitted, how resources are produced and distributed, and how everyone is enabled and incentivized to work well and to innovate, then it is realized that democratic socialism (at least in the classic sense of overwhelming public ownership) is unfeasible in any large-scale complex economy. For dynamism and efficiency there have to be competition, markets and a large private sector, as well as a state. Private ownership is also important for political reasons, to create zones of politico-economic power that can countervail state autocracy” (Hodgson 2018: 197). Modern economies are combined economies where the state already has a huge role that needs to be expanded permanently and overloads it, compromising its efficiency and opening wide spaces for egoistic pursues. Even a small experience in public management should be enough to understand that. Attempting to charge the state with the overall direction of a knowledge-based economy fosters the flaws of inefficiency, innovation fettering, and colonization of public realms by private interests. Generalized reactions against the state often follow such attempts.

242

R. Arocena

Socialist visions of the world were shaped in the nineteenth century of optimism concerning the essential goodness of human nature, the strength of human reason, and the simplicity of directing the state once capitalism was overthrown. Lenin believed in the latter—until he had to command a state. Marx asserted that history would lead to the withering away of the state. Weber (1968) knew better; he anticipated that socialism would accelerate bureaucratization. Democracy is not a sure antidote against that trend: if charged with too many tasks, it fosters the power of bureaucracy, hurting both political equality and state efficiency. Experience seems to show that “proposals for ‘centralized’ and ‘democratic’ planning are both founded on a similar misapprehension of the nature of knowledge, and a corresponding overestimation of the power and scope of human reason” (Hodgson 2001: 48). Such issues become more relevant when the advent of a knowledge-based society makes advanced permanent learning a fundamental social process (Lundvall and Johnson 1994). It points beyond traditional socialism and neoliberalism. “A key element in all human progress is the growth of knowledge. Yet it is precisely on this issue that the polar utopias of socialism and market individualism have foundered. Socialism has neglected the enormous problems of gathering together all relevant knowledge in the service of an overall plan. Market individualism has neglected learning and the growth of knowledge by assuming that the individual somehow always knows now what is in his or her best interest in the future” (Hodgson 2001: 11). Moreover, “real democracy” can never be the government of the people, by the people, and for the people. Mann’s theory of organizational power helps to understand why. Any organization—and a state in particular—keeps existing only if it has substantial collective power, that is, power over nature and over other organizations or groups. But collective power stems from coordinated action which implies ­distributive power within the organization of those who direct and control that action over the rest. In a nutshell, collective power requires distributive power. Consequently, “distributive power derives originally from collective power, i.e. […] stratification derives from social cooperation” (Mann 2006: 366). That is more so in a Marx-­Mann scheme, where collective power stems from the combination of technology and coordinated action, which enhances the distributive power of those who concentrate direction tasks and knowledge. Marxism was right in pointing that liberal democracy included wide inequalities of power and living conditions. Marxism was often wrong in dismissing really existing democracies, modern and also classical. A great Marxist historian of classical Greece offers a better approach: “That extraordinary phenomenon, Greek democracy, was essentially the political means by which the non-propertied protected themselves […] against exploitation and oppression by the rich landowners, who in antiquity always tended to be the dominant class […]. In a Greek democracy […] making its decisions—probably for the first time in human history […] by majority vote, the poor, because they were the majority, could protect themselves to a certain extent” (Ste. Croix 1981: 96). That extension of political power was quite limited; slaves, women, and foreigners were not included. Full democracy was not

12  The Socialism of Yesterday, Today, and Tomorrow

243

reached—as it will never be—but a great institutional innovation led to a reduction of power inequality by fostering the agency of some subordinated groups. That is the essence of democratization. More or less similar phenomena have appeared in history several times in different forms. They are often transient and even self-defeating. But by diminishing differences of power in some realm of society, they can redress some type of ­injustices, improve the general quality of life, and even inspire similar processes in other realms. Concrete examples of democratization illuminate the idea that it is possible—though not certain—to diminish inequalities by expanding the power of people. If the Left takes into account both its specific values and the teaching of reality, it should be characterized by its commitment with democratization.

A Look at Ideological Power Democratization is seen here as a permanent effort to foster freedom, equality, and solidarity by at the same time fighting exploitation and oppression. Such view assumes that the latter cannot be permanently eradicated. Here lies the first and perhaps the main difference between socialism of yesterday and possible socialism. “From the 1830s until the 1950s, socialism was almost universally defined in terms of the abolition or minimization of private property and some form of ­widespread common ownership” (Hodgson 2018: 71). Such relatively simple institutional design for ensuring the reign of justice has failed. Abolition of private property has meant mainly the expansion of state property which implies a concentration of economic and political power that fosters oppression rather than its suppression. A modern-combined economy needs different types of property, including state property, cooperatives, and other forms of the social economy, for several reasons that include checking the power of capital and markets. Nevertheless, in a global knowledge-­based economy, the concentration of property in the state not only ­fetters technological and social innovation but is simply not feasible. Elaborating careful institutional designs of just societies may have—from Thomas More’s Utopia to John Rawls’ A Theory of Justice—great intellectual value and not small inspirational strength. But they stay at the margin of the decisive issues of collective agency and its connections with building, distributing, and fighting power. Sen (2009: xvii, 5–9) puts the above in clear terms by discussing “the two traditions of the Enlightenment—the contractarian and the comparative.” He calls the first “transcendental institutionalism” because, “in searching for perfection,” it “concentrates primarily on getting the institutions right” as the way toward “a ­perfectly just society.” The second tradition starts from the question, “How would justice be advanced?”; that “has the dual effect, first of taking the comparative rather than the transcendental route, and second, of focusing on actual realizations in the societies involved, rather than only on institutions and rules.”

244

R. Arocena

Feasible and desirable socialism should shift from the first to the second t­ radition. It is almost impossible to believe today in the coming of “a perfectly just society” and less so that it is guaranteed by the dynamics of history. The relevance of socialism depends on the contributions its ideology can make to “actual realizations” in diminishing injustice and opening wider spaces for the pursuit of happiness. Ideology has to do with explanations of what happens in the world and why, with the sources of happiness and how we should live. A normative approach stresses that “socialism does have distinct values and principles of its own: a commitment to reciprocal and solidaristic ways of living, and in particular to the principle that the energies, talents and skills of the favoured be turned to the advantage of those whom Rawls calls the ‘least favoured’—the poor, the defenceless, the unskilled and the unorganized, but also the disabled and the excluded” (Lukes 1992). Such formulation stresses that the Lefts is about rights but also about duties. The commitment with the least favored should stem from seeing people not as patients but as agents (Sen 1999). A fundamental tradition of socialist movements points to fostering the agency of subordinated groups as the royal avenue for ­challenging exploitation and oppression. Proposals for fighting inequality should aim to enhance the capabilities of such groups to become actors in the fields of power, where technology and social relations interact, in ways that expand their ­collective power and diminish differences in the distribution of power. We speak of proactive equality when inequality is diminished in ways that make life better and at the same time don’t compromise but foster possibilities for further progress toward equality by enhancing the capabilities of the least favored.

Some Elements for Proposals The announced transition to socialism as a new mode of production has been replaced by a different and apparently inevitable transition shaped by environmental degradation but with highly uncertain outcomes. Socialism today could be a modest reformulation of left-wing interpretations of the world and proposals for action that give new vitality to old values. As such, it need not fail. To gauge its relevance, attention should be focused on how it helps in the present to open ways for what can be called desirable transitions to combinations of technology and social relations that diminish inequality and increase sustainability, where ideologies of solidarity and frugality need to be sources of orientation and of commitment. Capitalism is not leading the world in such direction. It probably will not be displaced by socialist revolution. But desirable transitions, even if mildly successful, will change deeply prevailing configurations of power. And, if highly successful, they will change capitalism, perhaps beyond recognition. Capitalism may not be as efficient as usually assumed for expanding modern productive forces. “If followed fully, the logic of a knowledge-intensive capitalist economy requires knowledge to be privatized” (Hodgson 2015: 307). Such process has been described as “the second enclosure” (Boyle 2003), the first one being the

12  The Socialism of Yesterday, Today, and Tomorrow

245

privatization of common lands by agrarian capitalism. But the privatization of the knowledge commons complicates in several ways the advancement of research and innovation. It is intertwined with privatization and stratification of education, a source of class division and social polarization. This fundamental contradiction of the capitalist knowledge society has a connection with the foundational notion of socialism as a more just and also more efficient system. It opens possibilities for concrete ways of democratizing knowledge that make better use of science while also generating better science and enlarging the scope for innovation as a tool for desirable transitions. A main obstacle for such transitions, and even for protecting really existing democracy, is the estrangement of knowledge and subordinated actors. That is at the root of the right-wing and popular based reaction in the centers of the capitalist knowledge society. In its daily dispatch dated January 8, 2019, The Economist asserted: “Academics are only just beginning to understand the misfortunes of working-age Americans without a college degree. New evidence suggests that in the past 50 years, the earnings have scarcely risen in real terms—and for men they have fallen. […] And technological progress could make things worse.” It is not evident that the Left understands that the misfortunes of many people all over the world, while stemming from several causes, will not be diminished without narrowing the gap between advanced knowledge and popular sectors, a necessary though evidently not sufficient condition for which is the generalization of tertiary education. Knowledge democratization is a set of proposals that include a combination of (i) open access to a diversified but not stratified system of higher education with (ii) widening opportunities to work in knowledge- and innovation-demanding jobs, thus generalizing permanent and advanced learning, both connected with (iii) a reorientation of research that puts at the top of the agenda main social and environmental issues, thus (iv) contributing to more efficient, frugal, and inclusive modes of innovation and production that open roads for desirable transitions. Without strong agency of popular actors in all those tasks, advances in such directions are inevitably limited. In that case, inequality can be redressed broadly speaking only in two ways. In one way, people are treated as patients, a situation that implies limited material advantages and substantive spiritual disadvantages. A second way, that may be termed reactive equality, occurs when subordinated sectors are able to organize and struggle for improving the distribution of wealth and obtain some results, without obtaining influence on how production is planned and directed, so welfare benefits remain quite limited and largely dependent on capitalist surplus. Going beyond, to what was called above proactive equality, requires knowledge democratization. The last is thus necessary for the intertwined tasks of fostering desirable transitions and building alternatives to right-wing reactions. Perhaps the new government of Brazil is the most perfect formulation of the reactionary project: in a nutshell, it aims at reversing all the more or less substantial advances of left-wing and progressive movements, concerning rights of minorities, violence limitation, working conditions, social legislation, gender equality, ­environmental protection, and autonomous development of peripheral countries. It shows the way for a transition to a dystopian world. It also makes evident the need

246

R. Arocena

to build broad democratizing fronts that articulate in new ways different interests as well as social and political action at micro, meso, and macro levels. History shows that constructions of such scope require original combinations of political talent with surprising initiatives in the realm of collective action. No recipes are available. But it may be asserted that three great social movements—labor, environmentalism, and feminism—are needed pillars of such democratization fronts. The workers movement was the backbone of the Left. It has been severely ­weakened by the expansion of knowledge-based power. Can’t its strength and degree of involvement in public issues be renewed by projects for connecting ­permanent learning, meaningful work, and significant influence in every type of enterprises? The last takes place by definition in cooperatives, which seem to offer good possibilities for overcoming the estrangement between popular actors and advanced knowledge. Environmentalism is a very original and influential social movement that signals a main avenue for desirable transitions and calls many people to involve themselves in public issues. Its relative weakness stems from the fact that less privileged sectors really need more and not less production of several goods and services. Better food, housing, services, energy, transportation, and health should and could be provided with less consumption of natural resources. That requires a reorientation of science and technology that can cope with the tension between production and environmental protection. This is a key problem for the construction of democratizing compacts or fronts, as is easy to see all around the South and in many places of the North. The evolution of the tension between production and environmental protection will tell if inevitable transitions are more or less desirable. Feminism has been the most successful movement of the last 50 years in the fight against inequalities of power. It has multiplied public involvement and eroded patriarchy. It is directly connected with the very quick expansion of advanced education between women, which in that realm have surpassed men in the countries where knowledge has higher impact. Women are the majority in activities that will not be suppressed by automation and are essential for renewing social solidarity. Related with such activities, main battles against inequality take place. A rightist wave, authoritarian and even chauvinistic, needs to be confronted now. Human rights and (more or less imperfect) democracies will be difficult to defend without new alternatives for democratization that expand collective agency. A ­contribution to such cause may stem from socialist inspiration.

A New Opportunity? Socialism is back, announced The Economist on February 14 2019. It is supported in the central countries by a new generation: “The millennial socialists think that inequality has spiralled out of control and that the economy is rigged in favour of vested interests. They believe that the public yearns for income and power to be redistributed by the state to balance the scales. They think that myopia and lobbying

12  The Socialism of Yesterday, Today, and Tomorrow

247

have led governments to ignore the increasing likelihood of climate catastrophe. And they believe that the hierarchies which govern society and the economy—regulators, bureaucracies and companies—no longer serve the interests of ordinary folk and must be ‘democratised’” (https://www.economist.com/leaders/2019/02/14/ millennial-socialism). To succeed, democratization must embrace jointly hierarchies and knowledge. Inequality and climate problems hit the North and moreover the South. New possibilities are perhaps being opened for socialism today.

References Arocena R (2018) Power, innovation systems and development. Innov Dev 8(2):271–285 Boyle J (2003) The second enclosure movement and the construction of the public domain. Law Contemp Probl 66:33–74 Carlsson I, Lindgren AM (2007) What is social democracy? A book about ideas and challenges, Stockholm. Arbetarrörelsens Tankesmedja and the publishing house Idé och Tendens Castells M (1996) The information age: economy, society and culture. Volume I - the rise of the network society. Blackwell, Oxford Dahl RA (1973) Polyarchy: participation and opposition. Yale University Press, New Haven Davies DE (2017) Violence, fragmented sovereignty, and declining state capacity: rethinking the legacies of developmental statism in Mexico. In: Centeno MA, Kohli A, Yashar DJ (eds) States in the developing world. Cambridge University Press, New York, pp 63–92 Gellner E (1988) Plough, sword and book: the structure of human history. The University of Chicago Press, Chicago Gerth HH, Mills CW (1958) From max weber. Oxford University Press, New York Hodgson GM (2018) Wrong turnings: how the left got lost. The University of Chicago Press, Chicago, IL Hodgson GM (2015) Conceptualizing capitalism. Institutions, evolution, future. The University of Chicago Press, Chicago, IL Hodgson GM (2001) Economics and utopia: why the learning economy is not the end of history. Taylor & Francis, Hoboken, NJ Lukes S (1992) What is left? The Times Literary Supplement, London, England, March, 1992; 4643, p 10 Lundvall BA, Johnson B (1994) The learning economy. J Ind Stud I/2:23–42 Mann M (1986) A history of power from the beginning to AD 1760. The sources of social power, vol 1. Cambridge University Press, Cambridge Mann M (1993) The rise of classes and nation-states, 1760-1914. The sources of social power, vol 2. Cambridge University Press, Cambridge Mann M (2012) Global empires and revolution, 1890-1945. The sources of social power, vol 3. Cambridge University Press, Cambridge Mann M (2013) Globalizations, 1945–2011. The sources of social power, vol 4. Cambridge University Press, Cambridge Mann M (2006) The sources of social power revisited: a response to criticism. In: Hall J, Schroeder R (eds) An anatomy of power. The social theory of Michael Mann. Cambridge University Press, Cambridge, pp 343–396 McNeill JR, Engelke P (2014) The great acceleration. In: An environmental history of the anthropocene since 1945. The Belknap Press of Harvard University Press, Cambridge Moore JW (2015) Capitalism in the web of life: ecology and the accumulation of capital. Verso, London

248

R. Arocena

Muldoon J (2019) Reclaiming the best of Karl Kautsky. Jacobin. 01.05 2019. https://jacobinmag. com/2019/01/karl-kautsky-german-revolution-democracy-socialism Nove A (1983) The economics of feasible socialism. George Allen & Unwin, London Piketty T (2014) Capital in the Twenty-First Century. Harvard University Press, Cambridge Scheidel W (2017) The great leveler. Violence and the history of inequality from the stone age to the twenty-first century. Princeton University Press, Princeton, NJ Schot J, Kanger L (2018) Deep transitions: emergence, acceleration, stabilization and directionality. Res Policy 47(6):1045–1059. https://doi.org/10.1016/j.respol.2018.03.009 Sen A (1999) Development as freedom. Anchor Books, New York Sen A (2009) The idea of justice. Belknap Harvard, London Croix GEMD (1981) The class struggle in the ancient greek world. Duckworth, London Weber M (1968) In: Roth G, Wittich K (eds) Economy and society. Bedminster Press, New York Weber M (2000) The religion of India: the sociology of hinduism and buddhism. Munshiram Manoharlal Publishers, New Delhi Wright EO (2010) Envisioning real utopias. Verso, London