8Gallup polling in 2019 showed opposition to minority groups in Europe is relatively low in Western Europe but high among supporters of radical right-wing parties. See: www.pewresearch.org/global/2019/10/14/minority-groups/
Introduction: what are the priorities for social democrats?
Vince Cable
Political parties that could be described as social democratic have been in decline for some years, particularly in the countries where they have historically been strongest: Britain, Germany and in Scandinavia. Others, which were loosely associated, outside the Western world, as in India and Brazil, have largely disappeared. Almost everywhere, competing voices – nationalism, ethnically based populism and authoritarian ‘strong men’ – have drowned out the appeal of social democracy and captured a substantial section of the electoral base of social democratic parties. That base was in any event contracting because of structural change in the economy away from manufacturing and unionised employment, and the greater priority for younger voters of new issues like the environment. The main appeal of social democrats – that they offer the best of capitalism and socialism, both the economic effectiveness of the former and the fairness of the latter – was increasingly seen to be not credible or relevant.
The COVID-19 pandemic may produce big and long-term changes to the scenery against which political drama is being played out. It could hasten the decline of social democracy; however, it could also help it stage a revival. Certainly, the challenges now being thrown up are those to which social democrats have produced answers in the past: mass unemployment; the re-emergence of large-scale mass poverty in the poorest countries; protectionism and lack of international cooperation; and growing dependence on the state to coordinate, plan and be the health provider, employer and safety net of last resort. Social democrats, in government and out, were key to the post-war consensus that was instrumental in tackling these problems, which have now resurfaced in a new way.
However, there are competing political models and ideas. Nationalism and populism are powerful forces in some countries (the US, Russia, China, Brazil, Mexico and India). Overlapping with those is the cult of ‘the authoritarian strongman’. Then there are what can be called the ‘welfare technocracies’ of East Asia. There are pockets, which may grow, of aggressive and radical individualism. And, in contrast, there are strongly communitarian movements at local level: sometimes inclusive; sometimes exclusive. The issue for social democrats is whether they can offer a mixture of competence and compassion that can transcend the competition in a democratic context.
Who are the social democrats?
The social democratic tribe is a lot bigger than represented by the parties that are descended from the socialist tradition like the UK Labour Party and its Antipodean cousins, the Social Democratic Party (SPD) in Germany, and the assorted social democrat parties around Europe. There are some social democratic parties that call themselves ‘socialist’, as in Spain, or ‘labour’, as in Norway, or ‘democrat’, as in Italy, and we should not include some that call themselves ‘social democrat’ but are rebadged ‘communists’. We should include the US Democrats, who never went through a socialist phase. There are also ‘social liberals’ who emerged from classical liberal parties but are now largely indistinguishable from social democrats, like the Canadian Liberals (though they have competition from the New Democrats), and others like the Dutch 66, the Swedish Liberals and Macron’s En Marche where there are big areas of overlap. The Liberal Democrats in the UK are such a hybrid, and the identification often has more to do with a country’s voting system and its history of political schism than meaningful working definitions of social democracy.
What is striking and disappointing is that social democracy has not travelled well outside the heartland of Western Europe, North America and Australasia. In Asia, Lee’s People’s Action Party (PAP) in Singapore was modelled on the British Labour Party but came to despise the welfare state. On the bigger canvass of India, the Congress Party seemed to have similar values to European social democrats but succumbed to rampant corruption. The same can be said for the Brazilian Workers Party. There are recognisably social democratic parties in many places (Ghana, Jamaica, South Africa, Costa Rica, Japan, Taiwan and Korea) but national idiosyncrasies tend to outweigh what they have in common.
Those national variations stem from different histories. Some social democratic parties, as in Sweden, broke with their revolutionary socialist ancestry over a century ago and have maintained a consistently reformist and democratic personality ever since. In some cases, as in Germany, there was a moment when the party redefined itself as unambiguously social democratic – the Bad Godesberg conference in 1959 – and it has remained aloof from parties of the far Left like Die Linke.
Despite the efforts of Anthony Crosland and others to achieve a similar clarification in the UK, ambiguity remained, leading initially to the SDP breakaway. Moreover, despite the efforts of Neil Kinnock, John Smith and Tony Blair to cement the social democratic character of the Labour Party, they succeeded only temporarily, leading to the bizarre spectacle of their party being captured by revolutionary socialists. Brexit has also created new geographical and ideological wounds. In the meantime, the Liberal Democrats became the voice of many social democrats, as well as liberals, but it is marginalised by the electoral system.
This very varied, eclectic, mix of parties and political traditions makes it difficult to locate the common denominator. There is a common thread in the Rawlsian tradition of thought, which emphasises individual freedoms alongside a shared sense of fairness and that has at its heart a ‘social contract’. The current crisis is also forcing social democrats to come up with new or reworked policy ideas to tackle new problems or old problems in a new guise.
What is to be done?
I see the main political challenge as to fashion what have been called ‘visions to touch’ as opposed to small-scale technocracy, on the one hand, and abstract slogans, on the other. I would identify four major areas where these ‘visions’ are required: large-scale unemployment; poverty and the interaction of tax and benefits; the workings of modern capitalism, especially in relation to data and the big data companies; and the threats to multilateralism.
Mass unemployment
The pandemic and lockdown have recreated a problem thought to have been solved except in specific areas like structural unemployment among young people in Southern Europe and underemployment in emerging economies in Africa and South Asia. The full scale of the problem is not yet clear, but when the temporary furlough schemes are phased out in the autumn, millions will be out of work in the UK.
In one respect, there has been an advance in policy thinking since the last depression in the 1930s to the extent that all major governments have accepted that they have a responsibility for maintaining adequate levels of aggregate demand through fiscal policy and/or the monetary policy of central banks. Aggressive monetary policy was used after the financial crisis and is being tried again. In addition, since the pandemic commenced, the main governments – the US, Germany, Japan, China, the UK and France – have all provided a large fiscal stimulus. To do so, they have accepted that they will incur substantially more public debt. There is an implicit acceptance that higher deficits and debt are not now an issue in the short run. That is not a worry for countries like the US and Japan, which can borrow in their own currencies, or like Germany and China, which have low initial debt levels. Many poorer and more indebted countries are more constrained. Others, like the UK, will need to set out a long-term debt financing plan to reassure their creditors. Social democrats will be needed to maintain commitment to a Keynesian
