One Hundred Years of Socialism: The West European Left in the Twentieth Century 9780755619986, 9781850438793, 9781780767611

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In memoriam Emma Abeni born on 24 January 1908, Brescia died on 30 August 1989, Milan on whose behalf much of what is narrated here was, purportedly, done

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Preface to the 2014 Edition

the first edition of One Hundred Years of Socialism mapped out the history of West European socialist parties in the century that followed the creation of the Second International in 1889. New archival work, the endless stream of memoirs, and the constant outpouring of interpretative books have not modified the basic story outlining the vicissitudes of West European socialist and communist parties. What has considerably changed, however, is our perception of the future of socialism. In 1996, few questioned the view that communism was dead, but many could reasonably expect that socialism, in the sense of modern social democracy, had still a lease of life. The tasks of the two movements, however, had long been different. The two forms of socialism that have characterized the twentieth century – social democracy and communism – were never quite comparable in terms of the tasks they had effectively set for themselves. They may have started with the same goal – that of overcoming capitalism – but they soon acquired other objectives, and inevitably so since ideologies are shaped by the societies within which they operate and the relationship they have to political and economic power. Social democrats ruled only where capitalism was well established and democracy had become the common property of the main political parties. Communists had to develop an industrial society; social democrats had to manage it. Communists prevailed in less-developed societies, social democrats in developed market economies. Once it was accepted that the goal of social democracy was the reform of capitalism and not its supersession, it could be assumed that no momentous event could deal social democracy the kind of fatal blow that history had dealt the communist movement. Today, no one can be sure that a distinct brand of European social democracy will survive in the future except perhaps as isolated local forms in a handful of Western European countries. Generic progressive politics will, of course, continue to inspire a significant proportion of Europeans and, indeed, of people throughout the world. They will advocate human and civil rights; promote legislation supporting claims made by those who have been and still are discriminated against; seek to widen access to education, culture and health. But one does not need to be committed to a socialist or a social democratic agenda to hold such views. Progressive liberals, ‘social’ Christians (or Muslims) and even ‘compassionate’ conservatives can do so just as well. And socialists too were inspired by the principles of individual rights that originated with the Enlightenment well before socialism developed a world view. Though socialists, as they emerged as an organized political movement in the late nineteenth century, wanted to challenge the power of capitalism, they advocated an extension of democracy that was based on the (liberal) idea of individual

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rights rather than class principles. Universal suffrage, which they supported with passion, assumes that all individuals have exactly the same worth when voting: each, literally, counts as one. In the domain of politics, socialists, far from being class conscious, were staunch individualists. Those who, at the turn of the century, upheld a class conception of democracy were the liberals and the conservatives who defended an electoral system that allocated votes in terms of the wealth possessed or earned by each individual. Many of them even opposed the enfranchisement of women. Though socialists often did not fight for female suffrage with great vigour, they all stood firmly on the side of real universal suffrage. One could almost say that one of the great achievements of socialists was to have forced liberals and conservatives onto the path of liberalism and civil and human rights while advocating first the destruction of capitalism and then its reform. Liberals and conservatives, of course, can claim with equal vigour that they succeeded in imposing on socialists the realism of accepting market relations and the abandonment of the utopianism of the classless society. So the socialists set about reforming capitalism – an apparently modest task when contrasted to the final goal of abolishing it. Nevertheless, reforming capitalism is exceedingly complicated. The problem lies in conceptualizing what the reform of capitalism entails. The system, it is widely acknowledged – and by Marx and Engels in the first place – is one which, unlike its predecessors, has change and dynamism at its very core. As one of the more famous passages of The Communist Manifesto declares, change is in the nature of the beast; it reforms itself continuously: The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real condition of life and his relations with his kind.

The dilemma of social democracy, as explained throughout this work, is that traditional social democratic reforms, such as the welfare state and redistribution of wealth, tend to strengthen capitalism by providing it with both social peace and a wider market for consumer goods. But, in turn, social welfare and redistribution also require a strong capitalism. Reforms that aim to regulate capitalism itself, such as setting a ceiling on the length of the working day, the regulation of pay by establishing a minimum wage, and basic labour rights such as maternity and paternity leave, create winners and losers among capitalist firms since some, because of their size, or their position in the market or their efficiency, will benefit from the discomfiture of those that are less lucky or less efficient or too small. In some circumstances, large firms are better able to cope with such reforms than small ones,

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but this is not a universal law: flexibility may enable some small firms to be more effective in times of rapid technological change. So social democrats, inevitably, always face the issue of trying to establish which aspects of their own ‘national’ capitalism will be strengthened or weakened by their reforms. ‘Spontaneous’ reforms can be unleashed by virtually anything, from changes generated by capitalism itself, such as technological developments, migration and the exhaustion of some natural resources, or by semi-exogenous factors such as change in the weather, taste and fashion. But reforming social democrats can also use (and have traditionally used) two powerful instruments. The first was the labour movement, usually organized in trade unions making demands on capitalists. The second, which became important as social democrats grew in numbers and were able to capture government, was the democratic state. This was the basis for the Left’s acceptance of the state – not just the state as a concept, but the state as a machine, as a coercive apparatus, as an instrument for the enactment and enforcement of laws. This recognition came late in the twentieth century because social democrats, before 1945, were seldom in control of the government machine. In the years before the First World War, they had assumed that they would be able to force the bourgeois state to implement many of the reforms of the socialist programme without necessarily being part of the government. They could have the luxury of winning battles without having to enter the minefield of administering directly the public thing, the res publica. They were not wrong. The premises of the European welfare state, particularly in Germany and in Great Britain, were laid down by conservative or liberal forces, partly out of fear of the socialist movement or because of popular pressures. The socialization of some of the cost of reproduction of the working class (the welfare state) and the regulation of the working day did not require socialist parties. Powerful trade unions, without a political party, could have struggled alone and negotiated with employers over the length of the working day, the conditions of work, holiday pay, etc. They could have acted as a pressure group and wrested concessions from governing political parties. This is what happened in Britain, in the nineteenth century when social democrats did not yet exist; but the British working class was large and well organized with, by the standards of the time, a long history of struggles and militancy. No established party could ignore the workers. The religious fragmentation of the country, and especially of the working class, contributed to preventing the formation of a religious party along the lines of continental Christian democracy. The result was that, in the second half of the nineteenth century, liberals and conservatives competed with each other for the support of the labouring classes and incorporated in their own programme aspects of a social democratic platform before that could constitute itself as an organized political party. This helped delay the formation and growth of a large British socialist party on the model of the German Social Democratic Party. On the continent, a similar process of co-option was under way: nation-building required the incorporation of demands emerging from the lower classes and took the form of what was called in Germany a form of ‘state socialism’ – built by Bismarck

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and supported by the socialist leader Ferdinand Lassalle. Liberal, conservative and nationalist parties were at the forefront of this movement. They were eventually joined by Church-based parties, particularly when the Roman Catholic Church abandoned its intransigent defence of the ancient regime and adopted a new position towards what it called the ‘social question’ with the publication, in 1891, of Pope Leo XIII’s encyclical Rerum novarum. It followed that it was no longer possible, if it ever was, to establish a clear and permanent distinction between socialists and non-socialists in terms of practical policies. The extension of democracy, the institution of the welfare state and the control of the working day were socialist aims and policies, but one can always find, at any moment, similar demands advanced and implemented by non-socialist parties, be they right, centre, conservatives, liberal, Christian or nationalist. From the outset, ‘socialism’ was not the prerogative of socialists. Socialists were forced, in their everyday practice, to trim their demands and accept compromises, but so too were the conservatives and liberals. The extension of democracy and the advance of mass society meant that no political party could hope to obtain sufficient support either by defending the status quo in toto (the essential conservative position) or by proposing to return to the status quo ante (the essential reactionary position). Reformism triumphed. It was adopted by the most varied forces: in Germany by Bismarck and the later Wilhelmine politicians as well as the ‘social’ Christians of the Zentrum party; in Italy by the majority wing of the Liberal Party (Giovanni Giolitti) and the emerging forces of political Catholicism; in France by the Radicals of the Third Republic; in Britain by Disraeli’s and Salisbury’s conservatives as well as by Joseph Chamberlain, Gladstone, the New Liberals, Asquith and Lloyd George; in Austria by the anti-Semitic Social Christians of Karl L¨uger; and in Holland by the new confessional parties in alliance with the more enlightened liberals. The success of reformist socialism, like the success of all political ideologies, lay in the fact that it did not have a monopoly on what it stood for. In politics, success consists in ensuring that what one thinks of as normal or desirable or possible becomes the shared attitude, the common property of the entire polity. To achieve this, however, it is necessary to formulate demands that are detachable from the ideological package (the symbols and language) which accompanies it. This can only be realized when the connection between ideological values and practical policies is vague and loose, and thus ready to be endlessly renegotiated. It is precisely because it is perfectly possible to be in favour of adequate pensions without signing up to the end goal of socialism that adequate pensions can be fought for by liberals and conservatives. Consistency and coherence may enable small political sects to survive indefinitely, but they spell certain ruin for parties and movements with real hegemonic ambitions. The commitment of socialists to the state grew as these aims became more significant and as the final aim of a post-capitalist state receded ever more into the future. Universal suffrage made the state more receptive to the demands made by the socialists on behalf of all citizens. It also made it more legitimate and hence

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more powerful. It enabled socialists to achieve political power by ‘capturing the state machine’. This facilitated the implementation of the rest of their reform programme – the regulation of the working day and the socialization of some of the cost of production and reproduction. This transformed industrial society. It is thus hardly surprising that, as socialists proved successful in reforming their capitalist societies, they were reluctant to let go of the existing regulatory institutions: a large public sector, a powerful central bank, a mechanism of exchange control, a complex system of subsidies and regional policies, and an intricate mechanism for the control of the labour market. This regulatory aspect became the centre of all socialist policies towards capitalism and further reduced the importance of the older goal of abolishing capitalism. The prosperity associated with capitalist growth, the establishment of full employment, the protective apparatus of the welfare state, the patent incapacity of communist states to develop a consumer society comparable to that of the West, had almost eliminated the deep-seated antagonism against capitalism that had previously existed. Other political parties, such as those committed to Christian and conservative values, who, in the past, had not been major proponents of capitalism, discovered its virtues too. Thus, gradually but constantly, at varying speeds depending on differing political conjunctures and, above all, on electoral vicissitudes, the parties of the Left dropped their radical anti-capitalist symbols. This process, generally referred to as revisionism, accelerated in the late 1950s with the German SPD Bad Godesberg Congress, culminating with Tony Blair’s New Labour in 1997. By then, free untrammelled market capitalism had established itself as a major ideological strand in European politics to an extent unparalleled in the past where, especially in Catholic Europe (Spain, Portugal, Italy, Austria and southern Germany), the leading non-socialist ideologies had always had a traditionalist form (Christian democracy) or, as in France, a national–popular one (Gaullism) or an authoritarian–populist one (as in Spain and Portugal). Even in Protestant Nordic countries, where the agrarian parties actively co-operated in the establishment of social democratic hegemony, neo-liberalism acquired a significant position. In Britain – the original home of laissez-faire ideology – free market liberalism gained a dominant position during the 1980s. Having correctly identified the state as the principal regulator of the capitalist economy, socialists sought, successfully, to democratize it and use it. As long as the state held the position of chief regulator, social democratic strategy retained its full coherence. But as various aspects of capitalism (especially its financial organization) developed, with increasing force from the 1980s onward, in a global direction, this state-oriented strategy began to falter. Social democrats in the West remained wedded to a national conception of politics and reinforced it constantly, ringfencing their achievements (welfare, education, civil rights) within the territorial boundaries of the state, while capitalism set out to stride the globe. The crumbling of communism, some had hoped, might have led to a strengthening of social democracy – in spite of the unfounded but widespread view that it would affect negatively social democracy, tarred, it was said, by its ideological association with communism. In fact, as I point out in the final chapters, social

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democratic parties were strongest in the decade following the collapse of communism, a movement which they had disparaged anyway well before the official demise of the USSR. The Western communist parties were, of course, deeply affected by the end of the USSR. The Italian Communist Party, the strongest in the West, changed its name and continued its long-standing evolution towards social democracy – evolution punctuated by repeated changes of name, each underlining its growing distance from its roots: first as the Democratic Party of the Left (still bearing some of the symbols of its past such as the hammer and the sickle), then ‘Left Democrats’, before expunging even the generic label of ‘Left’ and its symbols to become, with unchanging prospects, Il Partito Democratico tout court, but barely able to compete even with a discredited figure such as that of Silvio Berlusconi. The Italian communists survived as a shadow of their former selves. The fate of the Italian Socialist Party was far worse: fatally undermined by the corruption scandals of 1991–92, it simply disappeared. In the rest of Europe, the communist parties were annihilated. Even here, however, one should not over-estimate the impact of the fall of the Berlin Wall in 1989. Their crisis had started earlier. A year before the fall, at the 1988 French presidential elections, the French Communist candidate Andr´e Lajoinie could only obtain a paltry 6.7 per cent (in 1969 Jacques Duclos had managed a respectable 21 per cent). Worse was to follow when Robert Hue fell to 3.4 per cent in 2002 and Marie-George Buffet plummeted to a miserable 1.94 per cent in 2007. Even the Trotskyites did better. The French Communist Party had become a groupuscule. In 2012 all it could muster were ten deputies elected on a platform which included more than half a dozen tiny formations – an ignoble end for what had been one of the strongest communist parties in the West. The crucial reason behind its disappearance was the emergence, in the 1970s and 1980s, of a socialist party strong enough to rally all those who wanted to defeat the Right, well before events in Moscow sanctioned the end of communism. And when the fortunes of the Parti Socialiste started deteriorating after the astounding defeat of Lionel Jospin in the presidential elections of 2002, French communism was beyond resuscitation. Elsewhere the communist story was equally dismal. The Portuguese Communist Party, which had obtained 18.9 per cent in 1979, declined throughout the 1980s ending up with less than 8 per cent in 2011 (in alliance with the Greens). In Spain the fall of the communists was even more abrupt. Under the banner of Izquierda Unida it gathered only 11 per cent in 1996. By 2008 it had crumbled to 3.8 per cent, though it did improve in 2011, as the global crisis was hitting Spain, to reach 6.9 per cent. On the whole, far-right parties did far, far better than the far left. Marine Le Pen obtained 17.9 per cent of the vote in the French presidential elections of 2012, the Austrian FPO 17.5 per cent (2008), the Belgian Vlaams Blok 15 per cent in Flanders (2010), the Danks Folkeparti 12.3 per cent (2011), and the PVV in the Netherlands obtained 10 per cent (2012). In the Austrian presidential election the far-right candidate, Barbara Rosenkranz, obtained over 15 per cent of the popular

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vote. Only in Greece was a leftist political party able to capitalize on the grave crisis which had befallen the country: in the second election of 2012 Syriza (the Coalition of the Radical Left–Unitary Social Front) polled almost 27 per cent (in the first it obtained 16 per cent) and became the main opposition. But even there the far right did well: Golden Dawn, a proto-Nazi party, reached a remarkable 6.9 per cent. Thus, after 1989, social democracy remained the only significant organized force of the Left in Europe, including Eastern and Central Europe where the former communist parties were reborn as social democratic parties. These were determined to defend and extend one of the positive features of communist rule, namely the welfare state and the protection of workers, protection all the more necessary since pro-market forces had been unleashed and enjoyed wide local and international support. The prospects of this revitalized Left with a foot in the (communist) past were, at first, fairly good. In the first free elections after 1989, the post-communist parties were the strongest parties of the Left everywhere in the former communist countries except in the Czech Republic – where the communist party had kept its name. The others had re-christened themselves as social democrats or some similar appellation, thus explicitly recognizing the failure of a movement whose original raison d’ˆetre had been its sharp demarcation from the traditional socialist movement in the West. Lenin’s embalmed remains were still exhibited before tourists in Moscow, but Leninism was now truly defunct. Social democracy lived on where once communism prevailed. But it did not live well. In Hungary the socialist party (the post-communist party) was able to obtain over 42 per cent of the vote in the 2008 election (it had only 33 per cent in 1994) and was in coalition with the liberals. But in 2010 it sunk miserably to 19.3 per cent while the conservative Fidesz (a party well to the right of mainstream European conservative parties) obtained an absolute majority of the vote – a rare feat in the panorama of post-war elections in Europe. Nor were the Hungarian socialists able to rally the discontented since this role was taken by a far-right party, Jobbik, which gathered an impressive 16.7 per cent. The Bulgarian (ex-communist) socialist party fared little better. In 2005, as part of a wider electoral bloc, it obtained 34 per cent and was returned to government in coalition with other parties. But in the subsequent elections, in 2009, it plummeted to a dismal 17.7 per cent obtaining only 40 out of 240 seats. In Poland, a coalition of left-wing parties led by the Democratic Left Alliance (SLD: Sojusz Lewicy Demokratycznej) won clearly the 2001 elections but it lost, equally clearly, the subsequent two elections. In other words: in Eastern and Central Europe even social democracy failed to establish a hegemonic presence. Its weakness, or timidity, was one of the causes of the near impossibility of preserving a strong public sector, or containing the growth in inequalities, or enhancing or even maintaining the pre-existing welfare state. The fault was not (entirely) of the new social democratic parties: a weak and barely established market economy is not the best platform for the development or preservation of social democracy. As G. M. Tam´as, once a dissident in Romania and

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in Hungary and a former liberal member of the Hungarian parliament, explained, the brief period of ‘liberal effervescence’ that followed the fall of communism led to widespread privatization and ‘the dismantling of the remains of the “socialist” welfare state, along with the realignment of the former “communist” state parties’ to the neo-liberal agenda.1 How about Western Europe? What have been and what are the prospects for social democratic reformism? The parties, of course, are still there, and will be there for a while, but has the impetus for social democratic policies exhausted itself over these last 10 or 20 years? Is there any comfort for those who still regard themselves as social democrats? I write these words at a time of deep crisis for social democracy. At the end of the 1990s there seemed to be no crisis at all. In 1996, Romano Prodi, at the head of a coalition of parties which included the former communists, formed the first ‘Left’ government in post-war Italian history, defeating Silvio Berlusconi. The following year the British Labour Party, led by Tony Blair, was returned to power after 18 years of conservative rule with a historic majority. In the same year, in France, the Parti Socialiste won the legislative election and Lionel Jospin became prime minister. The following year – we are now in 1998 – Gerhard Schr¨oder, leader of the German Social Democratic Party, became chancellor of Germany. Thus, for the first time ever, the largest four states in Western Europe – Germany, Great Britain, France and Italy – were all led by parties of the Left. Nor was this left-wing wave confined to the big four. The Left also ruled (alone or in coalition) in almost all the other countries of the European Union: Sweden, Holland, Finland, Austria, Belgium, Denmark, Portugal and Greece. Had European social democratic parties succeeded in exploiting that unique conjuncture to develop common policies at the continental level, establishing, for instance, a social security net binding the whole of the European Union, or a redistributive fiscal policy across the EU, or a tight system of labour regulations enforceable throughout Europe, one would be able to write, with some degree of confidence, that social democracy, though unable to expand seriously in the rest of the world, had managed to survive and even thrive in its European redoubt. This, however, was far from being the case. Each socialist party pursued its domestic agenda with scant regard for the wider European dimension while giving the odd rhetorical nod to the idea of supra-national integration. The establishment of a single currency, the euro, did not pave the way for a system of pan-European controls which would have given the currency the proper regulatory structure. In Britain ‘New’ Labour stayed well clear of the single currency in order to allow its financial system as much freedom as possible. How difficult it was for social democracy to abandon the integument of the nation-state was abundantly noted in the first edition of this book. All that has happened since has confirmed this. By and large, the European Union has remained a loose confederation of states with different capitalisms. As the twentieth century faded away, the 15 countries of the Union (as they were then) still had markedly different fiscal policies, different industrial relations systems and different welfare states. In the first few years of the new millennium, 12 more states joined the Union, most of them poorer than

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the poorest of the old 15, with ill-equipped industrial structures and a poorly regulated capitalism. The ease with which the European Union was enlarged was widely celebrated, even though the chief reason why expansion was so simple was because integration had been so perfunctory. Much of what the European Union had achieved was the removal of barriers to competition to facilitate the free movement of goods, capital and people. There was no significant European political or social dimension – just a group of states negotiating. There was never a serious Europe-wide co-operation between socialist parties. The Party of European Socialists (PES) may comprise more than 30 social democratic parties, but it is not a party in any of the accepted senses of the word since it does not even contest the elections for the European Parliament (which are always contested by national parties and never by a European party). The European Confederation of Trade Unions is a pressure group that issues declarations and negotiates agreements, not a force employers or governments have to reckon with. They have no authority over national unions. They are restricted in what they do by the limitations the member states have imposed on supra-nationalism. And everything must be subject to the goal of unrestricted competition under the guise of harmonization. The global downturn that started in 2007 added fuel to anti-European sentiments. A survey conducted in September 2012 showed that the European Union had declining (though still favourable) ratings from a majority of the population in well-established EU members such as Germany, France and Italy, and a respectable 45 per cent in Britain. By May 2013 Germany’s support for the European project had fallen from 68 to 60, Britain’s was down to 43, France’s to 41 (from 60), Spain to 46 (from 80 per cent in 2007!). All this seems to suggest that pro-European sentiments reflect the behaviour of the economy: when things go well, Europe is up. Yet, even here national politics dominates: all surveys show that many more blame their own governments than they blame Europe (or, surprisingly, the banks).2 Socialist parties, when in power, ended up having to do what European governments have always been expected to do: to ensure that their own ‘national’ capitalism (i.e. firms operating within their borders and/or employing a considerable number of their own people) remain strong and competitive. This is why, addressing the financial community at Mansion House on 20 June 2007, just as the cataclysmic forces of the credit crunch were about to be unleashed, Gordon Brown, then chancellor of the Exchequer, congratulated the City of London for its remarkable achievements, ‘an era that history will record as the beginning of a new golden age for the City of London’.3 Happy that London had seen off the competition from Tokyo, and New York, he praised the country’s and, by implication, his government’s openness to the world and global reach, ‘pioneers of free trade and its leading defenders ... with a deep and abiding belief in open markets’. Politics remained overwhelmingly ‘national’ in character, and the parties of the Left, just like those of the Right, continued to respond to their own national electorate. They were inevitably constrained by the weight of their own traditions and those of their own countries. They reacted to the persisting differences in the levels of development and structural characteristics of their respective economies.

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The fabled European convergence is now as remote as ever, largely because the political pressure for expansion (from 15 to 27, and, by July 2013, 28 with the accession of Croatia) are greater than the requirements of economic synchronization. The creation of the euro failed to produce a greater degree of cohesion, and the subsequent crisis of the eurozone, following the global downturn of 2007–08, added to the woes of the European project. The crisis of the eurozone did not start in Europe and was not due to the common currency. It started in the USA with the sub-prime crisis which led to the bankruptcy of Lehman Brothers (the fourth largest investment bank in America), and the Federal bailout of AIG, the largest underwriter of commercial and industrial insurance. The crisis then ‘transferred’ itself to the European banking system, forcing various states to refinance their banks. The austerity policies which then followed had the effect of exacerbating the divisions among European countries (including those not in the eurozone, such as the United Kingdom and Iceland). Just as economic growth helped social democracy, austerity programmes and the consequent contraction of public spending and the public sector added to the woes of the parties of the Left. Those in power felt themselves forced to follow policies which would disadvantage their followers more than the better off. Those in opposition were not able to rally support by deploying the same populist methods as the parties of the far right. The crisis revealed new differences within Europe, differences which only a central authority might be able to remedy (just as national states tried, often successfully, to contain the growth of regional differences). But there were older ones too: the size of the working class may have been shrinking everywhere, but the rate of de-industrialization was highly uneven: far higher in Sweden and in the UK than in Germany or Austria; unemployment in Spain was always higher than elsewhere; inward and outward investment prevailed in Britain far more than in Italy. Opposition to cuts in welfare spending was more significant in France and Germany (where, however, it took different forms) than in Britain. Social indicators suggest other significant differences: a higher rate of divorce and family break-ups in Britain; a lower demographic growth in Italy, Greece and Spain; lower female participation in the labour force in Italy; more part-time female work (and concentrated among the less skilled) in Britain than in France. The murder rate in Lithuania is three times that of nearby Finland and six times that of Sweden; that of Belgium is three times that of Austria.4 Ecology plays a far more important role in politics in Germany and Sweden than in France or Spain. Feminism has greater strength in Western than in Eastern Europe. The last 30 years have witnessed the extraordinary ideological success of the proponents of the liberalization of market forces and the effective termination of the main European model of capitalist regulation: ‘national-Keynesianism’. ‘NationalKeynesianism’ assumed that national economic policy could be relatively effective in determining major economic variables, such as the balance of payments, interest rates, prices, growth and employment. Irrespective of separate national traditions, economic particularities, contrasting social structures and cultural differences, the

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nations of the world were being enjoined to deregulate labour markets, to lower or eliminate tariffs, to privatize state property, to eliminate subsidies and, in general, to let market forces operate with as few impediments as possible. An international communication system, largely originating in the West but global in its reach, enveloped the entire planet. Consumption patterns were rapidly internationalized: similar fast food outlets, items of fashion and television programmes became available in New Delhi, Tokyo, Rome, Paris, Moscow and Cairo. The spectacular development of the internet further shortened distances and facilitated communications. A ‘grand narrative’ of global proportion, unequalled in earlier times, established itself. It told a story of progress which was sharply different from that told by the Left. The narrative of the Left was one in which socialism was the natural successor to the Enlightenment. A rational system of distributing resources and organizing the economy would complete the work of democracy. Against this project, so argued those on the Left, were ranked the forces of obscurantism and reaction, those who wished to protect ancient privileges under new (capitalist) guises. But the new, grand neo-liberal narrative told a different story. According to this, the world market was opening up an unprecedented era of individual freedom. The state, by imposing rules and regulation, was holding back such development. By taxing people it taxed enterprise, innovation and individual effort. Socialism, in whatever form, had been defeated and deservedly so since it was, and is, so they allege, illiberal, statist and dogmatic; rewards inefficiency; and penalizes initiative. Socialism, continued the neo-liberal narrative, has remained anchored to a nation-state whose only useful tasks are now not much more than maintaining law and order and defending the national territory. There could be no global challenge to global market forces – only resurgent forms of nationalism or the rise of different varieties of religious fundamentalism – paltry local reactions rather than international countervailing forces able to challenge the Onward March of Capital. It is, of course, far too early to establish whether the so-called global downturn that started in 2007–08 and the ensuing global economic crisis can lead to a revival of the fortunes of social democratic parties and the abandonment of neo-liberalism. The fact is that in the ten years following the peak of social democratic electoral and political gains there have not been major strides either towards a strengthening of welfare states or towards redistribution even in the economically strongest states. Quite the contrary. Today the signs are ominous and disheartening for social democrats. This may be surprising since it was widely assumed that the neo-liberal apologists of deregulation would have been the ideological losers from the collapse of banks and insurance companies and from the unpopularity of incompetent bankers in receipt of absurdly large bonuses. The wave of nationalization and state intervention which followed the credit crunch of 2007–08 did certainly humiliate the neo-liberals as startling and unexpected events unfolded, such as the transformation of the US government under George W. Bush into the largest shareholder in the American banking system.5 The humiliation for those who had once been celebrated as the Masters of the Universe was compounded when their unjustified greed was revealed –

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spectacularly so in the case of Richard (Dick) Fuld, the Lehman Brothers’ chief executive, who admitted receiving from his company ‘only’ $350 million in bonuses (and not 500 million dollars as he had been accused) between 1993 and 2007 – which works out at well over $10,000 per working hour (the US federal minimum wage was, in July 2009, $7.25). Yet his main achievement appears to have been that of driving Lehman Brothers to the largest corporate bankruptcy in recorded history. An institution with assets of $639 billion – more than the gross domestic product of Argentina (one of Latin America’s richest countries) – was not worth anything at all by the second half of 2008.6 In the USA the beneficiary of the crumbling of the neo-liberal state may well have been the election of Barak Obama, the most ‘leftwing’ president since Roosevelt (though hardly the proponent of a ‘new American socialist experiment’ as some of his opponents, such as the Republican leader in the House of Representatives, John Boehner, claimed on 27 February 2009).7 In Europe, however, the anxieties, so far, have been directed elsewhere, namely towards strengthening the already substantial vote for the parties of the xenophobic Right. The Left performed increasingly dismally and, by the end of 2013, there will hardly be any socialist governments left in Europe – a remarkable change since 1999. Those that exist, such as that of Franc¸ois Hollande in France, faced, soon after its victory, growing popular hostility. Six months after his election, in November 2012, he broke the record as the most unpopular French president at that stage of the presidential mandate, with the backing of only 36 per cent of the French people – Nicolas Sarkozy had a 53 per cent approval rating six months after his election in 2007.8 In Italy the apparent demise of Silvio Berlusconi in 2011, his resignation being followed by a technocratic government led by the monetarist economist Mario Monti, turned out to be temporary. The discontent of Italians with the Monti government was not transformed into gains for the Left in the elections of February 2013 but into a surprising advance for an ‘anti-political’ populist party, the Movimento Cinque Stelle led by the comedian Beppe Grillo, whose ideological outlook is ambiguous and unclear. The global downturn, which so many have compared to the Great Crash of 1929, far from representing a springboard for a revival of socialism, has confirmed the triumph of capitalism. A social order can be said to be truly ensconced not when everyone celebrates its beneficial effects, its sturdiness and strength, but when everyone rallies to its defence when it falters. The central preoccupation of political forces everywhere was, in fact, to save the system. From Beijing to Washington through to London, Paris and Berlin, Left and Right were united by the understanding that capitalism had to be rescued, since its demise, so they thought, would be catastrophic for all. Few, even on the Left, envisaged that a credible alternative to capitalism could be erected over its ruins. Social democrats refrained from rocking the boat when it leaked and did their best to find ways of keeping it afloat. They knew that their past and future successes were closely connected not only to their ability to obtain popular support but to a multiplicity of factors including the wealth of the economy and the prevailing political ethos and the relative strength of capital and labour. And labour was weak.

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The global downturn was greeted at first as a fundamental defeat for neoliberalism. After the first shock, it was indeed a little humbled. But it soon recovered and, with an enviable self-assurance and without the slightest sign of self-criticism, it returned to its crusade against state intervention and the public sector. The difficulty facing those who still call themselves socialist is that, while they need capitalism and the economic growth and prosperity which it can generate, capitalism does not need them. Capitalist societies can be organized in an economically sustainable way by offering only minimal protection to some marginal groups (the USA) or by devolving welfare activities to organizations of civil society such as large firms, families and social groups (Japan). Moreover, socialist leaders and followers are increasingly reluctant to identify themselves with the term socialism. No ideology can survive for long if its followers are embarrassed to identify themselves with it. The defence of the ‘European social model’ is all that remains of the social democratic agenda. This is now largely defensive action. Its success will depend on how the global crisis develops and on the longer-term effect of the shift of manufacturing away from Europe. Though the connection between social democratic parties and the working class had become looser over the years, there was still sufficient closeness with the organized labour movement – the trade unions – to maintain a high degree of continuity with the traditional socialist demands of the past. Nowadays European trade unions are weak, particularly in the private sector, and there are fewer industrial workers in Europe than at any time since the nineteenth century. Union density – that is, the proportion of trade union members among workers and employees – has not collapsed, yet, but the trend is unmistakable. Trade Union Density

1980 1999 2003 c.2011

Germany

France

Italy

UK

34.8 25.3 23.0 18.4

18.2 8.1 7.9 7.5

49.5 35.4 33.6 35.1

49.7 30.1 29.5 25.8

Source: OECD

The figures for Sweden and Denmark are higher (though these have declined too) suggesting that the Scandinavian model has better chances of surviving. But this can offer few reasons for comfort, particularly since the majority of union members tend to be in the public sector: no longer workers versus capitalists but workers versus the state as an employer. In the UK, union density in the public sector was, in 2010, 56.3 per cent, but only 14.2 per cent in the private sector.9 Faced with an international environment which has been, and will continue to be, hostile to the survival of national welfare states, the basic co-ordinates of the

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Left’s defensive strategy are an acceptance that market forces should be regulated but not so that they make the national economy uncompetitive; that the growth of public spending must be contained – particularly after the drain on resources caused by the necessity of saving the financial system; that the welfare state can be defended but not extended; that privatization may well be desirable; that equality, though still appealing as a goal, may have to be tempered by electoral considerations; and that the power of international financial institutions cannot be contained – in spite of the rhetoric of co-ordination used in all international forums. The poor performance of the Left and the modesty of its aims is all the more remarkable when one bears in mind that most surveys show that a massive majority (well over 70 per cent) of Europeans believe that the gap between the rich and the poor has increased, that the current economic system favours the rich, and that inequalities are a serious problems.10 Unable or unwilling to capitalize on such sentiments, the prospects for the Left are dismal. Its parties have been forced on the defensive and have little new to propose. A defensive strategy can work only if it is temporary. The point of politics, however, is to win and not to stand still.

Notes 1. G. M. Tam´as, ‘Words from Budapest’, New Left Review, No. 80, March/April 2013, p. 22. 2. See the following surveys: http://www.pewglobal.org/2012/05/29/european-unity-on-the-rocks; http://www.pewglobal.org/2013/05/13/the-new-sick-man-of-europe-the-european-union; http://www.pewglobal.org/2012/05/29/chapter-1-national-conditions-and-economicratings. 3. Speech by the chancellor of the Exchequer, the Rt Hon Gordon Brown MP, to Mansion House; see http://webarchive.nationalarchives.gov.uk/+/http:/www.hm-treasury.gov .uk/2014.htm. 4. Figures from United Nations Office on Drugs and Crime; see http://www.unodc.org/ unodc/en/data-and-analysis/homicide.html. 5. Stephen Foley, ‘Wall Street humiliated by nationalisation of banks’, Independent, 15 October 2008. 6. See ‘A Fight for a Piece of What’s Left’ by Jonathan D. Glater and Gretchen Morgenson, in New York Times, 15 September 2008: http://www.nytimes.com/2008/09/16/ business/16bankruptcy.html. 7. Speech to the Conservative Action Conference, 27 February 2009; see http://www.gwu. edu/∼action/2008/cpac2009/cpac2009boehner.html. 8. TNS-Sofres for Le Figaro magazine; see http://www.lefigaro.fr/assets/pdf/barometrefigmag-021112.pdf. 9. James Achur, Trade Union Membership 2012, Department of Business Initiative and Skills, p. 10; see https://www.gov.uk/government/uploads/system/uploads/attachment data/file/ 16384/tum2010.pdf. 10. http://www.pewresearch.org/2013/05/14/europeans-grow-dissatisfied-with-the-inequitiesof-the-economic-system.

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