Every time we analyse European social democracy the challenge is both more daunting and more exciting. From the publication of Building the Good Society by Andrea Nahles and Jon Cruddas to Europe & the Good Society: After the Crash by Thorben Albrecht and myself everything has changed. But things have now changed again.
Events in Cyprus and the struggles of Hollande in France reveal both the depth of the crisis and the weakness of the social democratic response to date. I am not an economist and cannot comment on the rights or wrongs of the detail of the Cyprus bailout but take two political observations from the crisis there. The first is the extent to which their economy was built on the sands of hot money. This spreads uncertainly throughout the continent. But whenever such a financial crisis occurs it is the state that suffers more than the free market. Just as across the rest of Europe – states, to a greater or lesser extent, opened the door and encouraged the financialisation of their economies. This has now backfired dramatically. Financial markets are doing what they are expected to do – maximize profits. On the other hand states have been found doing the opposite of what they should be doing – not protecting people from the excesses of free markets but making it easier for corporations to accumulate capital. So the state rightly takes more of the blame. The problem is then of course compounded by the national treasury crisis that inevitably ensues – as impossibly tough spending decisions are imposed on the poorest members of society. Out of crisis and chaos it is the right that wins. The second observation is of course the democratic one – who is making the decisions and in whose interests? The Cyprus experience undermines (fatally?) the notion of a Europe run for and by its people.
Meanwhile the experience of the Hollande government has not been encouraging. Any government is going to struggle in the current economic context but the lack of a social democratic strategy, from the outside at least, looks hugely worrying.
Here in the UK the European debate is now driven by UKIP, a populist party built on the policy of taking Britain out of the EU, who are tipped to win the European election next year in terms of share of the vote. In addition we face the prospect of a binding in/out referendum if the Tories win that election. UKIP might split the Tory vote but the nature of the whole debate is tipping Britain into greater hostility about Europe. Labour is ahead in the polls and hasn’t fallen in to its usual post-defeat internal warfare. But few look forward to a return to government – even if it happens in 2015 – with any sense of optimism. It will be a hard and difficult struggle.
So what do we do?
The issue in part is what we will do but an outline of ideas is contained in Europe & the Good Society: After the Crash such as:
- Raising real wages for low and middle income earners through a European minimum wage
- The full breakup of the banks
- A self-funded bank bailout scheme
- The introduction of a Financial Transaction Tax
- A level playing field on Corporation tax
- Dealing with tax havens
We can and must add to that policy mix through a European policy agenda on immigration, welfare, energy, media and the environment. All of this and more is necessary, but it is not sufficient. The problem is not just what we say we want to do but how we will do it and to what ends.
Its not that the electorate of Europe don’t want greater security it’s that they don’t believe we can deliver it and they are unsure what our broader purpose is – what kind of world are we trying to create? The right has a very clear answer to both questions – whatever the question, the answer of how to deliver is ever freer markets – and the purpose is personal liberation – which may be narrow and materialistic but in the absence of any compelling alternative, is clear and inevitably, good enough.
The key feature of the last 30 years, which we have barely come to terms with, is the separation of power and politics. The globalization of capital has removed corporations from democratic accountability. The weakness of European democracy is that it has failed to develop in a way that could anchor companies in the societies they profited from. Corporate blackmail to go where taxes and regulation were lowest has trumped public interest. The collusion, to different degrees, between social democrats and capital, to deliver fairness from free market growth has ended in disaster. We have reached the end of an elite project.
In addition to these operating freedoms neo-liberalism gave people a new offer – the ability to buy their way out of democracy. Consumerism became the personalized way to make choices about the good life instead of collective choices about a good society. It is a toxic mix for social democrats – a form of capitalism that breaks free of public accountability and offers a more seductive life style – thus it crushes the possibility of an alternative.
Social democrats have to present a triple offer to the people:
- First, a credible policy agenda that will make a difference to their lives – offering the security they need in a world that has become very unsettling and anxious.
- Second, we need to show how this is possible through the democratisation of all facets of social and economic life. Such an agenda by definition has to be broad and plural. In an increasingly complex world the notion of a single party ushering in social democracy has gone. Instead parties are going to have to lead broad alliances of political forces, organisations and groups to act as a countervailing force. In terms of direct or assembly democracy, representative democracy and what we might call ‘monitoring democracy’ through scrutiny – Europe must be owned by the people for the people.
- Third, social democrats must offer a richer vision of a good society. A vision that is about autonomy in the deepest sense; being creative, having the time to be not just a worker and a shopper but a citizen, friend, volunteer and family member. Importantly this vision is not just about enjoying a good environment but to know you are passing on a better world to the next generation. We must be able to answer the question; what is it to be fully human in the 21st century?
If the right offer private liberation through free markets – social democrats can only offer public freedom through democracy.
This short paper was used to frame a discussion in Budapest with other social democratic thinkers at a recent conference organised by the Friedrich Ebert Stiftung. The good society debate is taking place across Europe and the event had representatives from such places as Poland, Slovakia and the Czech Rep. This column was first published by Compass.