A New Social Democratic Century

Social Democracy has been declared dead several times, from different sides and in different times. Critics with a functionalist outlook argue that the movement has lost its societal role since most of the original social democratic objectives supposedly have already been attained. A liberal critique suggests that labor laws and a social market economy have successfully tamed unrestrained capitalism, making further intervention counterproductive. The far left condemns programs of Social Democrats as insufficient. So is today´s social democracy just a pale reflection of its old self? And if not, how can it convince citizens and voters of its necessity? 

Thomas Meyer, political scientist and vice-president of the fundamental value commission of the German Social Democratic Party, shares some of the critique that is leveraged against Social Democracy. In his opinion, the market liberalization supported by social democrats has gone too far and led to an estrangement from society`s interests. However, he does not want to bury Social Democracy – no – he wants to examine the issues more closely, looks for solutions and consequently wants to revive Social Democracy as a central, up-to-date approach for political action of the 21^st century. New social democratic strength is urgent, urges Meyer, to tackle the unwanted comeback of a class based society in which the market logic dominates and precarious work conditions and downward mobility are on the rise.

In 1983 the sociologist Ralf Dahrendorf offered his famed diagnosis: The century of social democracy was over; almost all the goals of the movement had been achieved. They had left their imprint not only on society and public awareness, but even on the programs of all the political parties. So much for the analysis. Then came the liberal wishful thinking: By dint of their successes, the social democratic parties allegedly had outlived their historical usefulness. At the time, there was much to be said for that analysis. But today, after three decades of neoliberal dominance, it is completely obsolete. The social democratic parties now must analyze carefully the extent of and reasons for its obsolescence, if they are to succeed in making a new start.

Too many of the achievements that once seemed to justify Dahrendorf ’s judgment – mainly in the crucial areas of social security, the embedding of markets, parity positions for both business and labor in collective bargaining, and the promise of upward social mobility for all – have been thrown into reverse lately. The neo-liberal era enabled a »silent revolution« below the threshold of perception of the media influenced public sphere, one that erased much of the erstwhile social democratic image of reality or made it unrecognizable (Wolfgang Streeck). The overall picture has been transformed: Class society and the dominance of markets are back, while the social market economy has mutated into a new version of “feudal capitalism” (Sighard Neckel).

Loss of confidence in political parties and rise of right-wing populism come as no surprise in the society of “downward mobility” we’ve become

The principle that achievements should be rewarded, together with the promise of upward mobility, two of the fundamental legitimating norms of our society, have been repudiated all down the line. This is the case because, in the top echelons of society, obscene inequality of income and wealth unconnected to demonstrable achievement has become routine; meanwhile precarious work expands and opportunities to move up the ladder dwindle. Indeed, large groups are now threatened by the prospect of social descent. We have become a society of “downward mobility” (Oliver Nachtwey). No wonder that a massive loss of confidence in the future and in the parties that once embodied people’s hopes has occurred. In this atmosphere rightwing populism flourishes splendidly.

The once striking features of social democracy in the image of present-day society have faded. Moreover, the vision of the future that social democracy stands for today has not been articulated clearly enough to make people believe that social democrats can and want to turn the page.

Polanyi’s pendulum

So has the Social Democratic Party, which did after all achieve so much, finally revealed its true nature as a Sisyphus? Yes it has, but not only that, because the great stone of progress has not rolled all the way back down into the valley. And besides: Even a social Sisyphus would always be a genuine hero in democratic capitalism. This is true at least in times when – according to the plausible theory of the great economic historian Karl Polanyi – social progress is only possible as a swing of the pendulum between periods in which capitalism is restrained by society and those in which it regains some of the turf it had ceded to the latter. Then eventually the threshold of pain is exceeded, which calls forth social energies capable of containing capitalism once more. Now the pendulum has swung too far away from the interests of society, and social democracy itself is partly to blame (liberalization of financial markets), although it has also put some checks on untrammeled capitalism (the minimum wage). The new chancellor of Austria, the Social Democrat Christian Kern,was right:  The time is now ripe for a new social democratic century.

Hence, today even long lists of (good) specific reforms take too narrow a view. What is needed is an across-the-board, historic reversal of the momentum behind Polanyi’s pendulum. The continually increasing inequalities in many individual spheres, blatant though they may be, are clearly not the only problem. The whole structure or dynamic of society has gotten out of balance. The fundamental political and economic arrangements at the core of society have undergone a shift, so that they now systematically generate effects contrary to the interests of society. Underregulated financial markets continue to dominate (Martin Hellwig), while the social market economy is being dismantled (Marcel Fratzscher) and replaced by a form of “patrimonial capitalism” (Thomas Piketty) or “feudal capitalism” (Sighard Neckel) not conducive to achievement and efficiency. Central elements of the erstwhile economic democracy have been weakened such as neo-corporatism, stakeholder control of management, country-wide collective bargaining agreements between strong labor unions and management, and effective market regulation.

A new, strategic reform policy has to overcome both class society and feudal capitalism, chiefly by strengthening economic democracy

In shareholder capitalism, guided as it is by the financial markets, a hermetic leadership caste grants itself fantastic salaries and luxurious pensions, all without any demonstrable relationship to real-world accomplishments. Meanwhile, around a third of blue-collar workers and white-collar employees find that their jobs and living conditions have become much more precarious, while the income they derive from work has stagnated or even fallen. At the core of this structure an unhealthy dynamic has emerged that is producing many problematic outcomes. Business enterprises now take a short-term view of their investment decisions and focus narrowly on shareholder interests. At the same time, inequality has gotten out of hand, yet it constitutes a permanent refutation of the norm that efficiency and achievement should be rewarded. Finally, the restraints that once held some segments of the elite in check have fallen away, a trend that undermines the “social” culture of the entire country.

A new, strategic reform policy has to begin with the core elements of this dynamic and, from that starting point, overcome both class society and feudal capitalism, chiefly by strengthening economic democracy (the stakeholder principle, business-labor partnership in collective bargaining, regulation). The reform efforts must also introduce effective control over financial markets as well as set a symbolically and really effective upper limit on the permissible ratio of average to top incomes (by laws and/or taxes). At the heart of these substantive reforms there must be an effort to address what Karl Lauterbach revealed as the entrenched roots of a »two-class society«: inequalities in the fundamental sphere of human life such as health, life-expectancy, education, medicine, care for the infirm, and pensions.

Open questions

The counter-image to the new capitalism goes by two different names: “social democracy” and the “good society.” The basic outlines of both conceptions need not be invented all over again, but their coordinates have to be updated. As we sketch out the main elements of a reversal of social momentum, we also must find plausible answers to some open questions that are being asked today.

Updated concepts for “social democracy” and “good society” can counter the dynamic of the new capitalism

Equality or freedom? Social democratic communication concerning equality is usually defensive and therefore vulnerable. Nevertheless, its notion of equality is essentially defined by freedom. What is at stake here is the equal liberty of all persons, and in particular the whole range of freedoms, including the material prerequisites for a self-determined life. Only equal freedom is freedom made real for everyone. Unless a high level of equality in real-world life chances is given – what we may call base-level equality – freedom degenerates into a privilege of the affluent and remains a hollow promise for most people.

Real freedom is equal freedom ― Étienne Balibar 

Base-level equality in social matters includes such items as equal access to education, income, social security, “inclusive” pensions that insure coverage for all, as well as public goods that enhance the quality of everyday life. Forms of inequality that persist above and beyond that base level do not necessarily conflict with justice and solidarity, but only if everyone stands to benefit from them. Real freedom is equal freedom (Étienne Balibar). Now that is an idea readymade for going on the offensive.

The digital revolution already has changed society profoundly, with severe consequences for work, freedom, and privacy. Only when its future development has been harnessed by society will it become a force for good, and that will not happen until the blueprints are no longer being designed and executed by the narcissistic, libertarian utopians of Silicon Valley who think they can ignore anything as narrow minded and old-fashioned as social limits and democratic rules.

The Internet is a public space, and must be shaped by the means available to democratic politics

There is a deep ambiguity inherent in everything produced in the informally-managed workshops of the Valley, and it will take resolutely interventionist policies to get it back on a socially responsible track: i.e., one that redounds to the benefit of the entire society and does justice to the aspirations of its citizens to be free. The Internet is a public space, and as such it must be shaped by the means available to democratic politics. The digital restructuring of the world of work calls for a renewed collaboration between firms, labor unions, and the state, as in the time-tested and successful German model.

In the judgment of many intellectuals and civil society critics, the chief shortcoming of the left and especially the SPD, is its lack of attention to global justice. That is probably valid in the case of public communications, but much less so where actual programs are concerned. The SPD’s program contains some quite far-reaching and timely waypoints on this issue.Germany, acting on its own, could achieve much more than it does now – if it at least adhered to its own self-imposed guidelines for development aid policy (the goal is to spend 0.7% of GDP) and emphasized the right things. Still, the most important factor in shaping a more just world is for the rich countries to coordinate their policies with an eye to achieving the United Nations’millennium goals (now known as sustainable development goals). Essentially, these are designed to put into practice the fundamental social and economic rights laid down in the UN Covenant on Social, Economic, and Cultural Rights which most wealthy countries have ratified. One aspect of those policies would be a fair trade regime that provided greater room for maneuver in the poorer countries’ quest for development. The corrupt elites and thieving clans that in many places rip off their own countries often can be combated only indirectly from outside, and then only if one attacks them on vulnerable points – unless of course they have committed flagrant crimes against humanity. Blatant state failure, poverty, hunger, repression, life-threatening situations, and then mass flight – i.e., global inequality in its worst forms – frequently derive from intra-societal conflicts over power, recognition, and opportunities.

Global justice must become the rule of thumb for international engagement and policy

But these sorts of deadly crises are exacerbated and perpetuated if and only if the outside world fails to do everything in its power to deny the aggressors access to weapons and financing. In fact, it often does precisely the opposite, particularly when the outside powers in question succumb to apathy and selfishness. Therefore, the SPD’s global equality policy calls for the party to exert influence on its own government so that it will bear these circumstances in mind when it designs its own development and arms sales policies. Likewise, it behooves the SPD to work diligently toward the goal of global justice in the international institutions and organizations of which it is a member. As early as 1979, i.e.,over three decades ago, the Brandt Commission proved that such policies are directly in our own interest. Its conclusions have been underscored in the most dramatic fashion by the present-day waves of refugees.

The new politics of identity. Arguably the hardest problem for social democrats to solve is the looming threat all over Europe that new lines of conflict over the politics of identity will divide society. The defusing of these conflicts in the long run will help decide the role and magnitude of social democratic parties in Europe. At issue here is not so much the determination to fight hard against right-wing radicalism, since social democratic policies have long been committed to doing that. However, the ability of populist entrepreneurs of identity to mobilize their followers politically and emotionally is hardly less important than the twentieth century’s ideological struggles.

Right-wing populists' response to overcome social conflicts on cultural grounds is souped-up fundamentalism

For one thing, they can hope to obtain the support of many democratic protest voters who by no means concur in their programs. They are experimenting with an ideologically souped-up version of fundamentalism meant to attract “the people” (as distinct from the elites). Their brand of fundamentalism is really a placeholder for other, essentially social and political conflicts that they have displaced and saturated with cultural meanings. These identity salesmen can only mold a successful, broad-based protest movement as long as the social conflicts remain unresolved which they pretend to overcome on cultural grounds. Inequality, fear of downward mobility, and insecurity all play key roles here. The party that has traditionally attracted the “little guy” would be ill advised to abandon to the Alternative für Deutschland that one-third of society alienated by entrenched injustice and insecurity. The risk is especially great, given that the errors of Merkel’s refugee and integration policies threaten to throw that segment of society into a panic. It would be a mistake to draw a cordon sanitaire between these people and “respectable” society. The fault line should run instead between those who are merely insecure and the hard core of activists from organized right-wing populism. Wolfgang Thierse has shown accurately where the boundary should be: “We sense that German society is going to change markedly due to migration (...). Individual and collective identities will be called into question because of the foreign element and the foreigners who have moved closer to us – on account of globalization, open borders, immigrants, and refugees. Consequently, fears of losing one’s home arise, which find expression in the mobilization of prejudices, rage, and aggressive protest.”

Growing fears about jobs, social security, social cohesion, and the familiar world of everyday life must be taken seriously and used as a starting point for a social democratic alternative

Anyone who predicts far-reaching transformations for society without stating where exactly it is headed and whether the way forward has been secured, is simply feeding such anxieties. When there is a lack of public debate, reliable waypoints, and sturdy guardrails for the great transformation, the voluntarism of a chancellor who just a few years ago proclaimed the “absolute failure” of multiculturalism cannot instill confidence. The growing fears about jobs, social security, social cohesion, and the familiar world of everyday life, which of course are not entirely unrealistic, have to be taken seriously and used as a starting point for a social democratic alternative which offers convincing deeds that would take the wind out of the populists’ identity political sails. It is a mistake to imagine that the modern world is now dividing into two camps: instinctive communitarians who don’t want to let any foreigners in, and world-traveling cosmopolitans for whom the gates are not open wide enough.

A refugee and integration policy under social democrats could call for a pact of solidarity for a comprehensive integration policy that shifts the line of conflict between the two groups

Both are unrealistic constructs of extreme points on a continuum. Real human beings with their own divergent views are located somewhere between these artificial extremes. Most of them want to feel that their country is home, but are not completely against immigration as long as it is manageable. Then there are the cosmopolitans who are very open to what is “foreign,” but want to have a place in the world where they can feel at home. A convincing refugee and integration policy could affect a rapprochement of the two groups under social democratic auspices. Sigmar Gabriel has proposed one element of such a policy: a pact of solidarity that would shift the line of conflict desired by the practitioners of identity politics so that it would no longer run between the bottom third of the native-born population and the refugees (double integration). This realignment would be accompanied by, and depend on, a comprehensive integration policy (school, vocational training, housing, language courses, geography).

All of these tasks will pose challenges aplenty for a new social democratic century. It has to start now, before it is too late.

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Thomas Meyer is Professor Emeritus of Political Science at the University of Dortmund and Editor-in-Chief of the journal Neue Gesellschaft/Frankfurter Hefte (the parent publication of the International Quarterly).

Translated from German, the article first appeared in Neue Gesellschaft/Frankfurter Hefte 7/8 2016.