I would venture there are three reasons why social democracy is pretty much kaput: 1) a flawed ideology 2) the power of capital and 3) a propensity for selling out and drifting to the right.
1) Flawed ideology
Ever since people have exploited other people’s labour for their personal gain, it’s long been the dream of the slave, serf, peasant or worker (those who create wealth, in other words) to change this relationship. Instead of simply handing over the wealth they generate to the slave owner, feudal lord, land owner, landlord, merchant, monarch, corporate CEO, boss and the affluent (those who exploit labour), working people have struggled to keep this wealth for themselves and use it for their own personal and communal benefit.
To this end, working people have fought to garner greater control over the economic levers of power, trying to wrest it away from the wealthy and business classes and right-wing political parties. In short, the idea of socialism is that wealth remain in the hands of working people, that it be equitably distributed, and they control what happens to it, and economies be subject to more planning in order to end the destructive boom/bust cycle of market economies. Moreover, it was essential that the fortunes amassed by the economic elites be expropriated and returned to workers.
A simple notion, right? And when Marx and Engels came along in the 1800s, they posited that capitalism and industrialization would give rise to a disciplined working class that would finally take power for themselves (and 150 years later, that goal looks no closer to being achieved).
That was the dream. But when the social democratic movement split about 100 years ago, and the revolutionary/communists and social democrats went their separate ways, the biggest cause of this division was how to achieve socialism and what exactly it would resemble? The revolutionaries saw power being attained through armed struggle/insurrection, while social democrats saw it happening through elections. The revolutionaries sought to remove the capitalist elites, expropriate their wealth and take away their power. The social democrats? Well, here is where things get a little unclear.
Generally-speaking, social democrats do not want to remove capitalists from the commanding heights of the economy, nor expropriate their wealth. Instead, they want to work with capital in partnerships, curb its power through regulation, and divert more of the profits to working people. When Tommy Douglas gave his folksy parables, he didn’t suggest removing capitalists or ending capitalism but merely diverting more of the wealth away from the bosses into the pockets of workers.
And expropriation of wealth and assets? Some social democratic parties advocated the nationalization of some industry, but generally they weren’t so keen on this idea either. When the Waffle faction emerged within the NDP in the late ‘60s, calling for nationalization of whole sectors of the Canadian economy, the party brass was uncomfortable with this notion. It sounded too radical for their tastes and so the Waffle was drop-kicked out of the NDP. In 1990, when the NDP won in Ontario, the first thing Bob Rae did was dump the party plan to nationalize public auto insurance after the insurance industry kicked up a fuss. Today, there is nothing in the federal NDP’s platform calling for nationalizing industries or expropriating the power and wealth of capital. The NDP says that economic prosperity can be reached “through proper regulation, strategic investments in both physical and social infrastructure and a long-term sustainable economic growth strategy.”
So, the message from Western social democratic parties is that workers cannot expect the exploitation of their labour and creativity to end, or the wealth they create remain in their hands. Or they won’t continue to live in a state of perpetual economic insecurity. Or they will have any true control over their economic destiny. Nothing as inspired as that.
Today, the message of social democrats is that maybe, perhaps, you might get a bigger paycheck and a few social programs and laws that tilt in your favour. But, ultimately, economic power will remain steadfastly under the control of the corporate elite.
This, however, is a problem. After all, today’s capitalists have demonstrated they can’t be trusted with the stewardship of the global economy. In fact, they are criminally reckless in this regard.
The wreckage created by the casino of speculation in the global financial industry has cost, around the world, tens if not hundreds of millions of people their jobs, life savings, homes and futures. In Canada, the business community is busy selling off our resources and most prized corporate assets, while the financial industry plunders whatever it can. They have driven down wages, privatized services, moved good jobs overseas, demanded tax breaks and laxer regulation. Therefore, trying to create partnerships with these people is like going into business with the mafia. It’s a ludicrous idea.
Which brings us to our second reason why social democracy is increasingly irrelevant:
2) The Power of Capital
When I read the NDP’s economic policies I think they really have no connection to the real world.
Today’s world is dominated by transnationals so enormous that they dwarf nation states. Wal-Mart, the world’s largest public corporation, has global revenues of (US) $408-billion and more than 1.6 million employees in 15 countries. ExxonMobil has global revenues of (US) $310-billion, controls 72 billion barrels of oil in reserves and operates 37 refineries in 21 countries. GE has global revenues of (US) $157-billion and controls assets worth (US) $782-billion. These corporate behemoths employ legions of lobbyists and lawyers, and can finance PR and political campaigns and move factories and jobs wherever they choose.
Then there is the financial industry and the $50-trillion dollars at its disposal. Short-sellers alone can bring down Wall Street investment banks (as they did in 2008 with a wounded Bear Stearns), and drive up the cost of oil and food prices to exorbitant levels, as they have in the past two years.
Many social democrats will remember, misty-eyed, the good times when they could win major concessions from capital. But that occurred mostly in the immediate post-war era, when the Soviet/communist bloc was at the apex of its power, and corporate elites were in a great panic. They were willing to make concessions for fear that militant, socialistically-minded working class movements would gain too much traction. To them, social democrats were seen as the lesser of two evils (the other evil being communist parties).
But with the collapse of the Soviet bloc in the early ‘90s, the corporate sector no longer saw a necessity to make concessions to workers and social democratic parties. “For years, the ruling interest of the Western world saw themselves in mortal combat against communism,” Michael Parenti, the American leftist political scientist once observed. “For years they had to tell their working class that you live better than they do under communism. For years they had to present a capitalism with a human face. Now that the Soviet Union is gone and communism is gone, they have pulled the plug. The time to cast off all restraints is here. The competition for your hearts and minds is over. There is no competing system which you might think of turning. There is no need to tolerate any accommodation with those who have to work for a living.”
As former CAW research director Sam Gindin has said, capitalists decided the Keynsian compromise had to be dispensed of: after all, it gave workers too much security and confidence.
Therefore, today’s social democrats are living in a fantasy world if they really think that today’s corporate behemoths and the global financial system sees the need to make concessions to workers or unions, or can be pressured into doing so.
But let’s just say, for the sake of argument, a particularly left-wing social democratic party gets elected and decides it’s going to nationalize some industries or natural resources. Challenge the power of capital, in other words. What would happen?
Well, the last century is littered with the consequences of such governments being so bold. Some examples: in 1953, the CIA re-installed the Shah after toppling the democratically-elected government of Iran after the Iranians tried to nationalize their country’s oil industry; in 1954, the CIA engineered a coup against the democratically-elected government of Guatemala after it tried to expropriate unused land owned by the United Fruit Company; in 1964, a leftist government in Brazil who supported the peasantry was toppled in a military coup backed by the US; in 1973, the Chilean government of Salvador Allende was brought down in a CIA-backed military coup after Allende moved to nationalize Chile’s copper holdings. And in 1975, the US helped topple the Labor government of Australia in a “Constitutional Coup” after the government moved to nationalize the country’s natural resources. More recently, in 2002, the US supported Venezuela’s business class when it engineered a coup against the government of Hugo Chavez after he moved to garner more control over the state oil company.
But that’s not all. The international corporate community has the ability to economically isolate and strangle countries whose governments challenge their interests. Prior to the coup in Chile, the country’s economy was brought to the brink of ruin by a boycott engineered by banks and the US manipulation of the copper market (CIA director Richard Helms famously said they would make Chile’s “economy scream”). In Australia, the 1972-75 Labor government also saw investment from the US, Japan and Europe dry up due to a “strike by capital”. And then, of course, there’s Cuba, which has endured an US economic embargo going on 40 years.
And let’s not forget the power of the global banking system: it can make it prohibitively expensive to borrow money, or simply turn off the tap of credit.
The notion that a federal NDP government, even if so inclined, could actually bring about meaningful economic change, moving to nationalize our natural resources, banks and corporate sector, or divert more profits to workers, without a backlash from international capital seems naïve.
Which brings us to the third reason why social democracy is dying:
3) Selling Out
There is much that we can be grateful for in respect to the impact and legislative track record of social democratic parties. With the support of workers and unions, they managed to introduce (or fought for) socialized health care, welfare, unemployment insurance, and protections for workers, tenants and the environment. None of this should be diminished.
Unfortunately, most of these gains were made during an earlier economic and political era when it was easier to obtain them. As the capitalist elites have become more intransigent and unwilling to make concessions to workers or leftist parties over the past 30 years, social democratic parties have discovered they now have little wiggle room. As a result, they no longer are parties of sweeping ambitions. They are parties of moderate and minor reforms. They now bill themselves as more humane managers of free enterprise.
Moreover, despite their radical origins, social democratic parties have drifted to the right, often to become more electable. In fact, when push comes to shove, social democratic parties invariably disappoint their supporters and turn against workers and unions.
In Europe, for example, when the Socialist Party in France, led by Francois Miterrand, got elected in 1981, they moved to nationalize some banks and industries. But high unemployment drove them off the left agenda and they tacked right. In 1985, Mitterand okayed nuclear testing near New Zealand and ordered the bombing of Greenpeace’s Rainbow Warrior, killing a photographer on board. When two French secret agents were arrested, the French moved to impose economic sanctions on New Zealand unless they were released, and set off a nuclear bomb anyway. Mitterand also set up a special wire-tapping unit that reported to him and ordered the bugging of 150 politicians, reporters and opponents. His ability to enact his socialist program generally floundered.
In Italy, the Socialist Party under Bettino Craxi took power in 1983 and allied itself with the right wing. His economic policies included eliminating a wage price system to ensure workers’ wages kept up with inflation, resulting in more strikes as workers now had to fight for higher wages. In 1992, the party was caught up in a massive corruption scandal, which involved taking bribes from industry. Craxi himself was charged and he fled to Tunisia to escape prosecution in 1994 where he died in exile.
In the UK, the Labor government under Harold Wilson (1964-70) did nationalize the steel industry, but also turned on its union supporters and suggested wildcat strikes be banned. When the Callaghan government was elected in 1976, they enacted wage and price controls in order to curb inflation, leading to bitter strikes, setting the ground for the election of Margaret Thatcher. And during the Thatcher years, the Labor party distanced itself from the militant mineworkers’ strike and tried to isolate its militant trade union wing. When Tony Blair took over in the mid-90s, he took up the mantra of the “third way”, which was designed to move the party to the centre. In reality this meant reducing the influence of the labor movement and reneging on promises to tax the wealthy.
Blair even reached out and got the endorsement of media mogul Rupert Murdoch. The Labor government did some positive things, such as a introducing a child tax benefit, but on the whole their economic policies were designed not to interfere with the market. “They presented themselves as finding the answer to the problems of free-market Thatcherite capitalism, but essentially what they did was embrace it,” said York University political scientist Leo Panitch earlier this year. “They embraced the city of London and the banking system fully, including taking a lot of money from them. In terms of increasing inequality in Britain, in terms of leaving Britain very vulnerable to the power of financial capital, in terms of vast regional inequalities, it has certainly not been a success in social terms.”
Then there was Blair’s support for the invasion of Iraq and his government’s fabricating of evidence that Saddam Hussein had weapons of mass destruction.
In Canada, the federally NDP was slow and lukewarm in its fight against free trade during the 1988 election, allowing the Liberals to grab the high ground on that issue. In Ontario, when the NDP was elected in 1990, the Rae government passed some of the most progressive legislation ever seen, including an anti-scab law, excellent tenant protection laws, spousal benefits for gays and lesbians and a moratorium on building nuclear power plants.
But, as I mentioned, they reneged on public auto insurance and then bought into the deficit hysteria whipped up by the media and introduced the social contract to cut $2-billion in civil service wages. When the public sector unions refused to open collective agreements, the government imposed the cuts anyway, thereby dividing the labour movement. And with it, the government’s mojo vanished and they got creamed in the next election and the party has never recovered. Rae went to work for a corporate law firm and joined the federal Liberals.
The drift to the right by social democratic parties has made them barely indistinguishable from liberal parties. And this is a problem because the economic solutions we need don’t entail more of the same old same old. We need to challenge capital and capitalism and the basic underpinnings of this horrible economic system. And until social democratic parties do so, they will increasingly become irrelevant in the face of our burgeoning economic woes.
- Capital Gains and the Incomes of the Wealthy (December 10th, 2013)
- The Blackberry mess and what Canada needs (September 24th, 2013)
- The rise and fall (and rise?) of Blackberry – the story that just won’t quit (September 24th, 2013)
- Dead Money (August 23rd, 2012)
- Baskin-Robbins and the Walmartization of Ice Cream (July 20th, 2012)