|
Ashley Lavelle
The compromises of social democracy will always be in difficulties when capitalism is in crisis.
The critical question in the wake of the global economic crisis is whether social democracy will enjoy a rebirth, or whether, instead, it will be in need of a requiem. Economic crises are hardly propitious for social democracy, and this happens to be the deepest slump since the 1930s great depression.
Absent from much media commentary is an understanding of the origins of neoliberalism, which emerged in response to the marked decline in the health of capitalism in the 1970s, and was aimed at restoring the profit and accumulation rates that had deteriorated with the eclipse of the post-war boom. In this new context of falling rates of profitability and capital accumulation, policies such as privatisation, deregulation, freer trade and foreign investment liberalisation were engineered to allow capital access to areas previously quarantined by state regulation and ownership.
What became a triumph for neoliberalism was a tragedy for social democracy. Historically, social democracy's ability to deliver reforms for its working-class constituents has been premised on an expanding capitalist economy. Economic growth was important for generating the tax revenue to fund social programmes, and much lower rates of growth since the 1970s have inevitably exerted pressure on these programmes.
The boom years also suited social democracy's preference for class collaboration. It was more congenial for social democrats to offer reforms to their working-class constituents and satisfy business interests with policies that promoted capital accumulation at a time when growth was running strongly, profits were flowing and investment continued to rise. However in the post-1970s economic context neoliberal policies held significant appeal for a business sector looking for new ways to turn a profit, but social-democratic policies did not fit the needs of the capitalist economy. Social-democratic policies involved restraining and controlling Keynes's 'animal spirits' precisely at a time when capitalism needed them to be unleashed. Hence social democrats' sharp turn towards neoliberalism in most countries.
The indications are of a similarly detrimental impact on social democracy from the current downturn. In pumping trillions into their financial sectors since the crisis began, governments have learnt from the great depression. But these are merely short-term measures to prevent the system from sliding into the abyss; they are not a precursor of a more fundamental shift. Amid lower growth, rising debt and high unemployment, governments now are looking for ways to hack into social spending. A rash of privatisations seems inevitable as cash-strapped states seek to raise money. A rejuvenated neoliberalism may in fact emerge, as new opportunities for business arise, with government spending being cut and capital moving into areas vacated by the state.
The Cruddas-Nahles paper, alas, is also partly guilty of failing to understand the rise of neoliberalism and the rightward shift by social democracy. They note neoliberalism's emergence as the dominant ideological model from around the 1970s, but there is little analysis of why this happened. While few people on the left could quibble with the policy ideas espoused in the paper, the age-old problems plaguing social democracy get little mention: conflicting loyalties towards, on the one hand, social democrats' working-class supporters and, on the other, business and the financial markets; and the capital flight, and private sector opposition more broadly, that so often in the past have put paid to social-democratic reform ambitions.
Then there is the problem of the crisis itself, which Cruddas and Nahles regard as not 'just a crisis of capitalism'. In fact, this is largely what it is. Karl Marx has gained some renewed attention since the crash precisely because of his critique of capitalism and his analysis of its tendencies towards crisis. Unlike Keynes, Marx understood that capitalism's boom-slump cycles could not be eradicated by government intervention, as the advent of international recession and the development of 'stagflation' in the 1970s starkly revealed.
Social democracy is beholden to the capitalist economy. When the latter is strong, social democracy can offer some modest reforms. When the economy is in crisis, however, social democracy, alas, becomes a pale imitation of the right. All too often social democracy has supplied the medicine to a sick capitalism - medicine that is bitter-sweet to its own supporters. Capitalism is now very ill indeed, and the global economic crisis has proven one thing beyond doubt: euthanasia is the best option. But we also need a new doctor to administer the treatment.
Ashley Lavelle works in the Department of Politics and Public Policy at Griffith University in Brisbane, Australia. He researches comparative politics, social democracy and political activism. He is presently writing a book on why radicals become renegades.
To read more articles,
and make a comment, go to
http://www.goodsociety.social-europe.eu
|
|
 |
 |
 |
 |
 |
 |
 |
