Three waves of Social-Democracy

Evolution and revision is part of this movement's dna, but not all revisionists were made alike

In the 18th Brumaire, Karl Marx described the political orientation of the revolutionary classes of 1848 France: Republican for the bourgeoisie, Democratic-Republican for the petty bourgeoisie, and Social-Democratic for the workers. This last term was apparently chosen as a translation of the French ‘Parti Democrat-Socialist’ into the German ‘Sozialdemokrat’. Though he probably wasn’t attached to this label, the name stuck.

By the turn of the century, the working class of Europe and even beyond were at their most united, with most major social-democratic and labour parties joined together under the banner of the Second International. Though not all the member parties were Marxist, the International itself was, and the largest party, the German SPD, subscribed to the Erfurt program authored by Karl Kautsky. Social-Democrats held to Marxist theory, such as the materialist conception of history, dialectical evolution of human societies, and the necessary negation of capitalism and bourgeois society by its opposite, the class conscious proletariat.

But if Social-Democracy was a revolutionary socialist ideology, so committed to Marxism that it drove out anarchists and Possibilists, and even refused to share power with liberal parties, how come it now is associated with parliamentary government, social reforms, and welfare states that seem more likely to humanise then abolish capitalism? Communists would not doubt decry opportunism, political cowardice and of course parliamentary cretinism. But a less charged explanation is the process of revision. I think it’s worth giving a short overview of the major changes that occurred in 20th century Social-Democracy: to see how they responded to changing material and social conditions, to understand both continuity and change since the time of the 2nd international, and to better grasp which revisions were fruitful and which were not.

This diagram is less of a hard and fast typology and more of a heuristic. The Fabian tradition best combines Eduard Bernstein, who lived in Britain and studied the Fabians, and major British figures. The Swedish system is most closely identified with the Nordic model, which combines high rates of unionisation with a universalist welfare policy, and state intervention in the economy; and has become the poster child for Actual Existing Social-Democracy. The German tradition tends to be the most conservative, with Kautsky being the aforementioned defender of Marxist orthodoxy, Willy Brandt tending to work well within the established social market economy of post-war Germany, and Gerhard Schröder successfully pushing for wage restraint and fiscal consolidation without totally dismantling the neo-corporatism of German industrial relations. The Austrian cases tend to exhibit a certain creative syncreticism, with Rudolf Hilferding innovating on Marxian economic theory in the Austro-Marxist tradition, and Bruno Kreisky pursuing a expansionary fiscal policy with a hard currency policy (Austro-Keynesianism) to chart a unique course through the 1970s crises.

Orthodoxy/Revisionism:

"Democracy is in principle the suppression of class government, though it is not yet the actual suppression of classes.” - Eduard Bernstein

"It would have been absolutely unnecessary to resort to any of these instruments of repression had Lenin agreed to form a coalition with the Mensheviks and Socialist-Revolutionists in 1917. […]The confiscation of the big landed estates had also been planned by the Socialist-Revolutionists and Mensheviks – they actually put it into effect in Georgia. Abolition of illiteracy, marriage law reform, social welfare measures, children’s homes, public hospitals, shop councils, unemployment insurance and laws for the protection of labor, about all of which such a big to-do is being made in Soviet Russia, have been attained to a much greater and more perfect degree in capitalist countries where the democracy of labor has won any considerable power.” - Karl Kautsky

It might seem strange placing orthodox Marxists like Kautsky and Hilferding next to revisionists like Bernstein and Ernst Wigforss. Kautsky reiterated time and again the necessity of social revolution as the turning point from a capitalist to a socialist mode of production, while Bernstein highlighted the possibility of winning reforms under a liberal democracy, and Wigforss designed many such policies for Swedish governments. Orthodoxy decried coalitions or joining bourgeois governments as opportunism, but Bernstein noted that the proletariat was not necessarily going to become a political majority and would have to ally with other popular parties, such as the middle class and peasants. While the Swedish soc-dems often led sole governments after 1920, they were not entirely averse to working with other parties, and in neighbouring Norway and Finland, Social-Democrats would often find themselves working with agrarian and liberal groups.

However it should be said that even Kautsky and Hilferding were representatives of what was known as the Marxist centre. They expected that social revolution would be sharpened by years of non-violent class struggle, and that the advance of parliamentary democracy against the autocracies of Europe was a good thing. Both abhorred the Bolsheviks for their suppressing of the Constituent Assembly, followed by repression, terror, summary executions and bans on all opposition, socialist or otherwise. According to AJ Ryder, who wrote on the German revolution of 1918, we should conceive of the Erfurt era of Social-Democracy as a synthesis of liberal values and Marxist theory, possible in a time of growing capital-labour tension alongside political liberalisation. Bernstein often then claimed that his position was not so much trying to change the course of the SDP, but to get them to admit what they were practicing secretly: that since noone could tell when a revolution would come most were already dedicating their efforts on winning reforms for workers, and that revolutionary sloganeering could only turn off potential allies.

While we cannot deny key doctrinal differences, this first generation is often more alike than not. They were committed socialists and wanted to see the intellectual advance and liberation of the working masses. More often than not they were materialists, who saw the study of economic and social conditions as indispensable for a socialist project, but who were also guided by humanist aims, such as liberty and equality. All wanted to make Social-Democracy a viable political force in the age of parliaments.

Neo-Revisionism:

”We need not only higher exports and old-age pensions, but more open-air cafes, brighter and gayer streets at night, later closing hours for public houses, more local repertory theatres, better and more hospitable hoteliers and restaurateurs, brighter and cleaner eating houses, more riverside cafes, more pleasure gardens on the Battersea model, more murals and pictures in public places, better designs for furniture and pottery and women’s clothes, statues in the centre of new housing estates, better-designed new street lamps and telephone kiosks and so on ad infinitum” - C. A. R. Crosland

”You have grown up in this society, you have taken care of the family all these years, you have been a good citizen. And you have the right to be taken care of when you get old and infirm, not because of charity, not because you have a thick wallet, but because you are a Swedish citizen. This is your society, our society. You have the same right to this as anyone else. That is the welfare state and it is our greatest pride!” - Olof Palme

After the Great Depression and World War 2 came the zenith of Social-Democratic influence. Out of the ashes they wanted to rebuild society in a better image, and in many cases that’s exactly what they did. It was an era of managerial capitalism, and the war had already heavily involved states in matters of allocation, so the infrastructure existed for government planning. Sweden pursued the Rehn-Meidner model (a system based on public investment, solidaristic wage policy and profit suppression to create full employment, export growth, low inflation and rapid productivity change) until the 70s, and Britain created a welfare state that survived multiple governments. In this context, and in a Cold War global landscape, some felt they had solved the major crises with capitalism, with Anthony Crosland arguing that a new managerial economic system had transcended it. In this context, he argued the matter at hand for Social-Democrats was not further socialisation of the means of production (although he believed nationalisation was a viable policy tool, and he wrote the 1958 Cooperative Independent Commission Report on behalf of the Co-operative society), but rather the expansion of personal social liberty; and the ensurance of economic equality, social mobility and the ending of class privilege. He did not see this as a negation of socialism but rather adapting it for the new times. It was certainly the case that the 1960s would see greater calls for liberty and social equality in the western world. In Britain, Crosland’s vision was implemented under Roy Jenkin’s home office with the decriminalisation of abortion and homosexuality. As mentioned, politicians such as Kreisky and Brandt represented this new type of socialism as well, responding to the times with greater focus on redistribution and social issues, while maintaing a generally Keynesian economic policy. Olof Palme too can be said to represent this new generation, although he brought energy to Sweden’s attitude to the world. He was a fierce opponent of imperialism and oppression whereever he found it: in America’s bombing of Hanoi, the Soviet invasion of Prague, and the reign of Apartheid in South Africa. But he also did keep to the old aim of expanding socialisation, particularly with the proposed (and defeated) Meidner plan, which would have required major corporations to issue shares to trade unions and employees (although Palme’s version of the plan was more moderate than the aims of the Swedish trade union confederation).

Above: Swedish PM Olof Palme, Austrian Chancellor Bruno Kreisky, German Chancellor Willy Brandt

Third Way:

”They say I hate the party, and its traditions. I don't. I love this party. There's only one tradition I hated: losing” - Tony Blair

Third way, or New Labour, or Neue Mitte, arose in the 1990s as a response to the growing hegemony of conservatives economic policies such as under Thatcher and Reagan. Keynesianism, or at least its mainstream form, was discredited during the oil shocks and runaway inflation, and the broad consensus shifted to labour market flexibility and tight monetary policy. The collaspe of the Bretton-woods exchange rate system, alongside an explosion of capital liquidity and hot money flows meant that higher economic spending could risk destabilising local currencies (uncosted tax cuts could do the same, for those who remember the Truss ministry). Meanwhile global industrial shifts which saw the relocation of many manual labour jobs to emerging economies while western countries became more dependent on the service and financial sector aided the fracturing of organised labour.

In such a climate, Social-Democracy suffered and its left varieties became politically untenable. Even more than before, centre-left parties had to appeal to cross-class coalitions, and avoid scaring capital –– striking a fine balance between calls for greater social justice without threatening the framework of neoliberal economic policy. Take for example welfare. The middle class felt burdened by the growing tax cost of welfare spending, while themselves were more financially stable due to expanding property prices (what SOAS economic professor Jan Toporowski calls the ‘welfare for the middle class’) This created a self-reinforcing cycle where middle class voters demand welfare spending be tailored to the ‘deserving poor’ which coincidentally means making welfare unimportant to the middle class, reducing their instinctive support for it further.

The Third Way tried to move beyond ideology. They claimed that slogans and sweeping programmes were increasingly disconnected to voters, who had specific but solvable problems with poverty, services, crime and justice. Tony Blair drew from the Crosland approach, defining socialism as an ethical system that doens’t overprescribe an economic transformation, but he took the conclusion to mean that any sort of nationalisation or major government intervention (beyond education and health) was choosing ideology over pragmatism, a position which Crosland did not share. The electoral strategy started from the premise that most voters were not ideologically committed, with a mean distribution among the middle. Therefore a party that can take and hold the centre ground would win, as more committed voters would stay loyal as they’d have nowhere else to go. Blair’s model was seemingly vindicated in the landslide elections of 1997 and 2001.

As mentioned, figures such as Schoeder, Austria’s Viktor Klima, and even Sweden’s Ingvar Carlsson sought to improve economic credibility through fiscal consolidation, lower corporate taxes, and wage flexibility. Of the latter, the most innovative (if egregious) was in the Netherlands, after the Wassenaar agreement of 1982. To combat the wage-price spiral and to keep exports competitive, Dutch unions agreed to real (not just nominal) wage restraint, and this paradigm continued even when the Dutch Labour party returned to office. The logic was that these policies were good for the market, good for growth and thus the benefits could be shared down to the poor through greater access to opportunity and services. This was the thinking behind the Blair governments, which for example levied a windfall tax on recently privatised assets to support employment training.

In the 2000s, with greater global trade and credit-fuelled consumption, this model worked. The Blair government oversaw growth and reductions in poverty, especially among children which can be explained partly by the Blair-Brown Sure Start programme. They passed the first statutory minimum wage in Britain as a floor for the 2 million workers in poverty. Social progress can also be attributed to this time, with the repeal of section 28, and the passage of the 2010 Equality act.

Conclusion:

Among the first generation of Social-Democrats, I gravitated towards the revisionists but have sympathy for the orthodox Centre. I think the Capital/Labour dichotomy has remained central to understanding the evolution of political economy over the past 100 years. Therefore non-violent class struggle remains an important factor in advancing a Social-Democratic vision. However many of Bernstein’s analyses were prescient, and worked as a blueprint for the great successes of Social-Democratic and Labour governments in the post-war period. I also admire Crosland, for reiterating the humanist ideal of socialism in creating a vibrant world accessible to all without class distinctions. But while I understand the analysis he made about being flexible with policy within an ascendant Keynesian-managerial framework, his pronouncements about the death of capitalism were far too premature. And I think it’s a mistake to forget the key role that property and the ownership of productive forces has in any society, including the most open and inclusive modern democracies. Finally, with the Third Way I try to be charitable and locate the decisions made within the context of the retreat of organised labour and ascendency of a global financialised political economy. However I despair at some of the short-sightedness, as very few of these governments ever attempted to challenge the dominance of financial classes and transnational corporations, and tended to accept (if not encourage) restrictions on the labour movement. With the financial crash of 2008 leaving many centre-left parties in a greatly discredited position, this short-sightedness has left the whole Social-Democratic movement vulnerable to PASOKification (the double envelopment of the electoral share by protest parties and the far-right), which is only seeing a minor reversal in recent years.

I do think that all the figures discussed here can be described as Social-Democratic, even if not all can be described as socialist. The connective tissue among all the waves is a commitment to parliamentary democracy, focusing on practical policy over elaborate and utopian navel-gazing, and generally trying to bring about a more human and fair society. In the end, though, I personally hope we can draw more from the first two generations as we move on from the Third Way era.