Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

Social democracy in one corner of the world

Branko Milanovic 21st September 2020

Branko Milanovic argues that ‘stop the world, we want to get off’ is no basis for a revival of progressive politics.

globalisation
Branko Milanovic

Caught between relentless Trumpian protectionism and xenophobia, on the one hand, and the neoliberal coalition of sexual liberators and money bagmen on the other, the left in rich countries seems bereft of new ideas. And worse than lacking new ideas is trying to restore a world gone by, which goes against the grain of modern life and the modern economy.

Yet this is an exercise in which some parts of the left are engaged. I have in mind several essays in The Great Regression, a book I reviewed here, a recent piece by Chantal Mouffe and, perhaps most overtly, Paul Collier’s The Future of Capitalism (reviewed here and here). Dani Rodrik provided early ideological ammunition for this point of view with his celebrated ‘trilemma’. It is also the context within which my Capitalism, Alone was recently reviewed by Robert Kuttner in the New York Review of Books. 

This project aims to recreate the conditions of around 1950 to 1980, which was indeed the period of social-democratic flourishing. Although many people tend to present the period in excessively bright hues, there is no doubt it was in many respects an extraordinarily successful period for the west: economic growth was high, western nations’ incomes were converging, inequality was relatively low, inter-class mobility was higher than today, social mores were becoming more relaxed and egalitarian and the western working class was richer than three-quarters of humankind (and could feel, as Collier writes, proud and superior to the rest of the world). There is much to be nostalgic about.

Special conditions

But that success occurred under very special conditions, none of which can be recreated. What were they? 

First, a very large portion of the global workforce was not competing with workers of the first world. Socialist economies, China and India all followed autarkic policies, by design or historical accident. Secondly, capital did not move much. There were not only capital restrictions but foreign investments were often the target of nationalisation and even the technical means to move large amounts of money seamlessly did not exist. 

Thirdly, migration was limited and when it occurred happened among culturally similar peoples (such as southern-European migration to Germany) and thanks to rising demand for workers pulled by growing domestic economies. Fourthly, the strength of domestic socialist and communist parties, combined with trade unions and the Soviet threat (especially in Europe), kept capitalists on their toes: out of self-preservation they were careful not to push workers and unions too much. 

Fifthly, the social-democratic ethos of equality was in sync with the dominant mores of the times, reflected in sexual liberation, gender equality and reduced discrimination. Within such a benign internal environment, and not facing any pressure from poorly-paid foreign workers, social democrats could continue to be internationalists, as reflected most famously by figures such as Olof Palme in Sweden and Willy Brandt in West Germany.

Drastic changes

Under the entirely different social and economic conditions of today, any attempt to recreate such a benign domestic environment would involve drastic and indeed reactionary changes. Without saying it openly, its proponents call for social democracy in one country—or, more exactly, in one (rich) corner of the world. 

Collier advocates the walling-in of the rich world to stop migration that is seen as culturally disruptive and unfairly undercutting domestic labour. Such policies, most notably followed by social democrats in Denmark, are justified by Collier out of concern for less-developed countries, lest the outflow of their most skilled and ambitious workers push them further into poverty. It is clear however that the real motives for such policies are to be found elsewhere.

Others would protect the west from the competition of China, arguing, again disingenuously, that western workers cannot compete with less well-paid workers subjected to harsh shopfloor discipline and lacking independent trade unions. As with policies that would stop migration, the justification for protectionism is camouflaged in the language of concern for others. 

Within this perspective, domestic capital should be made to stay mostly at home by promoting a much more ‘shallow’ globalisation than exists today. Ethical western companies should not hire people in (say) Myanmar who do not enjoy elementary workers’ rights.

Great Unwashed

In all cases, such policies aim to interrupt the free flow of trade, people and capital, and to fence off the rich world from the Great Unwashed. They have close to zero chance of success, simply because the technological advances of globalisation cannot be undone: China and India cannot be pushed back into economic isolation and people around the world, wherever they are, want to improve their economic position by migrating to richer countries. 

Such policies would moreover represent a structural break with the internationalism that was always one of the signal achievements of the left (even if often honoured in the breach). They would slow down the growth of poor countries and global convergence, would arrest the reduction in global inequality and poverty, and would ultimately prove counter-productive for the rich countries themselves. 

Dreams of a restored world are quite common, and we are often (especially at an older age) wont to indulge in them. But one should learn to distinguish between dreams and reality. To be successful in real time, under current conditions, the left needs to offer a programme that combines its erstwhile internationalism and cosmopolitanism with strong domestic redistribution. It has to support globalisation, try to limit its nefarious effects and harness its undoubted potential eventually to equalise incomes across the globe. 

As Adam Smith wrote more than two centuries ago, the equalisation of economic conditions and military power across the world is also a precondition for the establishment of universal peace.

This article is a joint publication by Social Europe and IPS-Journal

Pics3
Branko Milanovic

Branko Milanovic is a Serbian-American economist. A development and inequality specialist, he is visiting presidential professor at the Graduate Center of City University of New York and an affiliated senior scholar at the Luxembourg Income Study. He was formerly lead economist in the World Bank's research department.

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

u4219834664e04a 8a1e 4ee0 a6f9 bbc30a79d0b1 2 Closing the Chasm: Central and Eastern Europe’s Continued Minimum Wage ClimbCarlos Vacas-Soriano and Christine Aumayr-Pintar
u421983467f bb39 37d5862ca0d5 0 Ending Britain’s “Brief Encounter” with BrexitStefan Stern
u421983485 2 The Future of American Soft PowerJoseph S. Nye
u4219834676d582029 038f 486a 8c2b fe32db91c9b0 2 Trump Can’t Kill the Boom: Why the US Economy Will Roar Despite HimNouriel Roubini
u42198346fb0de2b847 0 How the Billionaire Boom Is Fueling Inequality—and Threatening DemocracyFernanda Balata and Sebastian Mang

Most Popular Articles

startupsgovernment e1744799195663 Governments Are Not StartupsMariana Mazzucato
u421986cbef 2549 4e0c b6c4 b5bb01362b52 0 American SuicideJoschka Fischer
u42198346769d6584 1580 41fe 8c7d 3b9398aa5ec5 1 Why Trump Keeps Winning: The Truth No One AdmitsBo Rothstein
u421983467 a350a084 b098 4970 9834 739dc11b73a5 1 America Is About to Become the Next BrexitJ Bradford DeLong
u4219834676ba1b3a2 b4e1 4c79 960b 6770c60533fa 1 The End of the ‘West’ and Europe’s FutureGuillaume Duval
u421983462e c2ec 4dd2 90a4 b9cfb6856465 1 The Transatlantic Alliance Is Dying—What Comes Next for Europe?Frank Hoffer
u421983467 2a24 4c75 9482 03c99ea44770 3 Trump’s Trade War Tears North America Apart – Could Canada and Mexico Turn to Europe?Malcolm Fairbrother
u4219834676e2a479 85e9 435a bf3f 59c90bfe6225 3 Why Good Business Leaders Tune Out the Trump Noise and Stay FocusedStefan Stern
u42198346 4ba7 b898 27a9d72779f7 1 Confronting the Pandemic’s Toxic Political LegacyJan-Werner Müller
u4219834676574c9 df78 4d38 939b 929d7aea0c20 2 The End of Progess? The Dire Consequences of Trump’s ReturnJoseph Stiglitz

Foundation for European Progressive Studies Advertisement

Spring Issues

The Spring issue of The Progressive Post is out!


Since President Trump’s inauguration, the US – hitherto the cornerstone of Western security – is destabilising the world order it helped to build. The US security umbrella is apparently closing on Europe, Ukraine finds itself less and less protected, and the traditional defender of free trade is now shutting the door to foreign goods, sending stock markets on a rollercoaster. How will the European Union respond to this dramatic landscape change? .


Among this issue’s highlights, we discuss European defence strategies, assess how the US president's recent announcements will impact international trade and explore the risks  and opportunities that algorithms pose for workers.


READ THE MAGAZINE

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

KU Leuven advertisement

The Politics of Unpaid Work

This new book published by Oxford University Press presents the findings of the multiannual ERC research project “Researching Precariousness Across the Paid/Unpaid Work Continuum”,
led by Valeria Pulignano (KU Leuven), which are very important for the prospects of a more equal Europe.

Unpaid labour is no longer limited to the home or volunteer work. It infiltrates paid jobs, eroding rights and deepening inequality. From freelancers’ extra hours to care workers’ unpaid duties, it sustains precarity and fuels inequity. This book exposes the hidden forces behind unpaid labour and calls for systemic change to confront this pressing issue.

DOWNLOAD HERE FOR FREE

ETUI advertisement

HESA Magazine Cover

What kind of impact is artificial intelligence (AI) having, or likely to have, on the way we work and the conditions we work under? Discover the latest issue of HesaMag, the ETUI’s health and safety magazine, which considers this question from many angles.

DOWNLOAD HERE

Eurofound advertisement

Ageing workforce
How are minimum wage levels changing in Europe?

In a new Eurofound Talks podcast episode, host Mary McCaughey speaks with Eurofound expert Carlos Vacas Soriano about recent changes to minimum wages in Europe and their implications.

Listeners can delve into the intricacies of Europe's minimum wage dynamics and the driving factors behind these shifts. The conversation also highlights the broader effects of minimum wage changes on income inequality and gender equality.

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641