Can Europe’s Mainstream Left Reconnect with Socialism and Economic Democracy?

Recent elections in France have given the Socialist Party control of both the executive and legislative branches. Good news? For those of us on the Left, definitely. A major step towards bringing about a socialist economic order in Europe? Hardly. In France we have a Socialist Party that does not advocate socialism. But it’s not just France, of course. Spain’s Socialist Workers’ Party has little to do with socialism or advancing workers’ collective power. In Britain we have a Labour Party that does not advocate any form of labour control over the economy. In Germany and Sweden we have Social Democratic parties that seem to believe that social democracy can coexist with the economic undemocracy of corporate capitalism – as neo-liberalism has advanced, this notion has increasingly proved to be flawed. These parties long ago retreated from socialism and democratic control of capital.

You would think that with capitalism undergoing its biggest crisis since the 1930s we would have seen a socialist upsurge in Europe, a drive to take power away from the corporate and financial oligarchy and place it in democratically controlled economic institutions, to replace the current system with one where citizens collectively decide on the allocation of resources and the distribution of wealth. You would think the major left-wing parties – social democratic, socialist, and labour – would actively seek to expand democracy into the economic realm and substantially reduce inequalities of power and wealth. But unfortunately, they have largely accepted the neo-liberal model instead of leading the resistance to it. During the crisis, bereft of an alternative vision, they badly floundered. While the French Socialist victory is welcome, the party does not propose any fundamental changes in control over capital. Without such changes, the 75% tax it plans on million-euro incomes threatens to trigger capital flight. Capital should flow into the hands of French working people, not across the Channel or the Atlantic.

The New York Times recently published an interesting article by Steven Erlanger titled “What’s a Socialist?” Looking at the French elections, he asks “what does it mean to be a socialist these days, anyway?” His answer: “Not very much”. That’s exactly right, if we’re talking about “Socialists” like Hollande and Zapatero. But Erlanger absurdly claims that socialism “has largely done its job” with even conservatives embracing supposedly socialist ideas like the welfare state and progressive taxation – and restrictions on carbon emissions. Hence, “socialism seems to have less and less to say”. Like so many others, Erlanger mistakenly equates socialism with the welfare state, progressive taxation, and various types of regulation of private industry. This is not that far from the US Tea Party movement calling President Obama a socialist. Of course, for the Tea Party, socialism is something sinister, and therefore advocating a slightly higher tax rate for millionaires is beyond the pale since for them this is a step towards dreaded socialism. For Erlanger, socialism is not sinister – it’s simply irrelevant.

What is Socialism?

Well, let me put forth a daring proposition: the job of a European party that calls itself socialist – or at least belongs to the Socialist International and/or the Party of European Socialists – should be to work towards the transformation of the European capitalist order into something that is clearly socialist. European socialist parties have certainly not done their job, if this is what they are meant to do. Imagine a socialist political grouping advocating socialism! Quelle horreur! This raises a key question: What do I mean by socialism? First of all, let me say what I think it is not: It’s not the welfare state and progressive taxation, nor is it state regulation of private industries, nor even outright state ownership, though certainly socialists have supported such things. And for sure it’s not the authoritarian state collectivist system that existed in the Soviet bloc and still exists in places like Cuba, even if those regimes described themselves as socialist. (If we call them socialist, we might as well say that East Germany was a democracy, given its official name!) As the 1951 Frankfurt Declaration of the Socialist International (SI) stated: “Communism falsely claims a share in the Socialist tradition. In fact it has distorted that tradition beyond recognition.”

I would argue that socialism is a system where citizens, who constitute what we call “society”, control economic institutions and processes for their collective benefit and ensure that the public interest takes precedence over narrow private and oligarchic interests. Much of this control has to be exercised by citizens in their capacity as working people who produce society’s wealth. This means control over production and investment, and over distribution of the fruits of these activities, with an equitable distribution of income and wealth being a fundamental goal. The only way citizens can exercise control over the economy is through democratic mechanisms, both existing political institutions and new democratic economic institutions, including democratised business enterprises.

In other words, at the heart of socialism lies economic democracy, i.e. democracy expanded into the economic sphere, at the micro, meso and macro levels. It involves institutions such as worker-owned and worker-managed companies (including cooperatives), labour-sponsored collective investment funds and multi-company worker ownership, socially owned and controlled financial institutions, democratically controlled national and transnational investment funds that have substantial ownership of major corporations, as well as state and municipal ownership and investment if they include a high level of citizen and worker participation. While “political democracy is an indispensable element of a socialist society”, as the SI’s 1989 Declaration of Principles proclaims, economic democracy is in turn a prerequisite for genuine political democracy undistorted by oligarchic corporate power.

A Manifesto for Economic Democracy

It will probably come as a surprise that all the parties belonging to the Socialist International have essentially signed up to the type of vision I have just outlined! According to the SI’s Declaration: “The socialist answer is unequivocal. It is the people of the world who should exercise control by means of a more advanced democracy in all aspects of life: political, social, and economic.” It continues: “the Socialist International… is committed, as ever, to the democratisation on a global scale of economic, social and political power structures.” And: “The democratic socialist movement continues to advocate both socialisation and public property within the framework of a mixed economy…. But social control of the economy is a goal that can be achieved through a wide range of economic means…”

These economic means include: “democratic, participative and decentralised production policies; public supervision of investment; …worker participation and joint decision-making at company and workplace level as well as union involvement in the determination of national economic policy; self-managed cooperatives of workers and farmers; public enterprises, with democratic forms of control and decision-making…; democratisation of the institutions of the world financial and economic system…; international control and monitoring of the activities of transnational corporations…”

There’s more in this vein and it’s worth quoting at length: “There is no single or fixed model for economic democracy and there is room for bold experimentation… But the underlying principle is clear – not simply formal, legal control by the State, but substantial involvement by workers themselves and by their communities in economic decision-making. This principle must apply both nationally and internationally… The concentration of economic power in few private hands must be replaced by a different order in which each person is entitled – as citizen, consumer or wage-earner – to influence the direction and distribution of production, the shaping of the means of production, and the conditions of working life.”

Therefore, the Socialist International’s 1989 Declaration of Principles, currently in force, contains an unequivocal manifesto calling for economic democracy! In fact, the term “economic democracy” appears three times in the document. No less than 28 political parties in the European Union, most of them major governing or opposition parties, have acceded to this Declaration by joining the SI. But they have done little beyond that. It’s high time that Europe’s socialist, social democratic and labour parties promoted – and implemented – the principles they already adhere to! As for the question that serves as the title of this article, my answer would be: They not only can they must, if they are to offer the citizens of Europe a genuine vision of change and a compelling alternative to the present dysfunctional, anti-social economic model.


  1. Bo Jonsson says

    yes a reconnection is possible but the German Social democrats should tell the Germans that they have very much profited from being the workshop of Europe as China is for the world and have taken the credit for that themselves. A bit more of honesty is needed not just between the Social democrats, but to the general publid. That would sit well with the realistic Germans there are

  2. says

    Since the unstoppable tide of an evolutionary tsunami of human development towards a “democratic” and “socialist” order for humankind ground to an ignominious halt at the end of the last century, certain mortal flaws have emerged in this whole line of thinking. The main problem seems to be “democracy”. How do you cope with the reality that democracy can deliver Margaret Thatcher, Adolf Hitler, George W and Hammas to pluck out just a few ? How can democracy have any credibility when the masses (the working class no longer seems to exist) mostly cannot be arsed to engage themselves in the nature of their own governance let alone society-wide economic well being ?? I could go on…… any suggestions ?

    • says

      Democracy does not claim that it is a faultless political system but does claim that it is the fairest: the people are held responsible for their decisions, whether right or wrong. Its short history has proved that although there can be exceptions that you mentioned (I disagree with your Hitler example, Germany was not a mature democracy during that time, but still in a transition phase and under huge international pressure), democratic regimes are doing better than other candidates in both economic and social sectors.

  3. says

    Propositions of the Author are to be considered with one exception: there are no true and false socialists. Discussion and pointing out mistakes are constructive. Fragmentation and lack of comprehension give decline as the only result.

  4. says

    First of all, congratulations for your article. Socialists must enter a discussion about what they really represent, and what makes their ideas different from those of others, such as the Social Capitalists. It is unfortunate that such discussions are the exception in socialist forums such as this blog.

    Ironically, the SI’s declaration of 1989 was followed by an unprecedented embrace of capitalist policies by socialist parties across that prevails even until today, when history proved that free market economies are unable to self-regulate, and are bound to failure.

    I absolutely agree with your comment:
    “It’s not the welfare state and progressive taxation, nor is it state regulation of private industries, nor even outright state ownership, though certainly socialists have supported such things. And for sure it’s not the authoritarian state collectivist system that existed in the Soviet bloc and still exists in places like Cuba, even if those regimes described themselves as socialist.”

    In my view, socialism is what promotes the Good Society through Social Equality, nothing more and nothing less. In that respect, I consider Swedish Social Democrats extremely successful, as they managed to build a democratic society that combines both growth and equality (income inequality in Sweden is among the lowest in the world). Economic Democracy, is just one of the means, albeit important, that can be used to achieve this ultimate goal.

  5. says

    We have an uniqe opportunity in this crisis to shift away from the dominance of fast-flowing capital towards long-term productive investment. Back in 2008 the banks fell into our arms and shouted “rescue us”, we could have brought them into public ownership for a penny! This would have laid the foundation for a stable world economy. Controling investments, by owning the financial institutions and largest compaines, is much more effective then bringing in a centralized plan as the communists did.

    But as socialists we must look beyond state ownership, without a democratization of the state we won’t be able to move ahead. This includes giving more power to workers but also encourge consumers to take a more active part in development of products (they are already doing this today to an extent) and making sure that public officials – both elected and non-elected – are more accountable for their actions.

    A pragmatic and realistic programme for economic democracy could get European social democracy back on track but for that we need to bring the discussion into our parties.