Social Democracy and Globalisation

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Social Democracy and Globalisation
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Bernstein

• The Communist Manifesto was correct butwe see
  the privileges of the capitalist bourgeoisie
  yieldingto democratic organizations In my
  judgmentsuccess lies in a steady peaceful
  advanceratherthan ina catastrophic crash.

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What is Social democracy?

• Part of the socialist tradition, it encapsulates
  the politics and ideas of much of the mainstream
  left (today often termed the centre-left) in
  Europe, and to some extent beyond.
• a hybrid political tradition composed of
  socialism and liberalism....inspired by socialist
  ideals but heavily conditioned by its political
  environment and incorporating liberal values. The
  social democratic project may be defined as the
  attempt to reconcile socialism with liberal
  politics and capitalist society. S. Padgett W.
  Paterson A History of Social Democracy in Postwar
  Europe (1991), p. 1.
• Labour can be seen as part of the tradition
  strong tradition in Scandinavia in particular.

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Ideological Foundations Relation to Marxism

• Relates to Marxism in terms of its origins.
  Specifically, rooted in the revisionist ideas
  of the German Socialist Bernstein.
• Bernstein questioned Marxs predictions and
  assumptions.
• The material circumstances of the mass of people
  in society were not ever more impoverished, as
  Marx suggested. Indeed real wages were rising
  (early welfare reforms in Germany, replicated in
  UK by 1906-14 Liberal Government)
• Social structures were more complex than Marx
  expected. Instead of a simple bipolar class
  structure, the middle class and petty bourgeoisie
  endured and grew.

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Political strategy Reformism

• The institutions of liberal democracy were more
  flexible, adaptable to class conflict than Marx
  had anticipated.
• Marx had seen the liberal democratic state as an
  expression of bourgeois class rule.
• Bernstein noted that as the 20th century
  approached, the w/c was successfully mobilising
  via unions and parties which worked within
  capitalist society and achieved real
  change/reform. E.g. German social democrats
  (SPD), later British Labour and the Scandinavian
  social democratic parties followed a decade or
  two later)
• Key distinction from classical Marxism asserts
  the possibility of egalitarian reform within
  capitalism
• The parliamentary road to socialism.
• Reformism not revolution.

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Core elements of the Political economy of
post-1945 social democracy

• Paterson Thomas 5 tenets. The Social
  Democratic Parties of Western Europe (1977)
• -         Political liberalism
• -         Mixed economy
• -         Keynesianism
• -         Equality
• -         The Welfare State
• These 5 tenets have remained important to social
  democratic parties since 1945, despite the fact
  that Social democratic parties have changed
  significantly.

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KEYNESIAN ECONOMIC MANAGEMENT

• The Keynesian approach revolves around the idea
  of placing a primary emphasis upon the objective
  of full employment secured by maintaining the
  level of aggregate demand in the economy.
• Activist macroeconomic (especially fiscal)
  policy taxing and spending to redistribute
  wealth.
• Crosland - Keynesianism had fundamentally
  transformed and social democratised capitalism.
  
• Redistributing wealth (through tax system,
  welfare state, and incomes policies) towards
  lower wage employees with a high propensity to
  spend their wages on consumer goods. This could
  be justified not only in terms of both economic
  efficiency and social justice.

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Keynesianism, Bretton Woods and IPE

• By Keynes own admission, his national economic
  management techniques could only work in a
  context of capital controls and the regulated
  Bretton Woods international economic system
  designed by Keynes himself in 1945.
• The Bretton Woods institutions helped deliver
  the era of embedded liberalism, the
  international political economy offered social
  democratic governments considerable room to
  manoeuvre. See Sassoon 100 Years of Socialism.
• controls on trade and financial flows allowed
  governments to pursue Keynesian domestic policy
  goals, most notably full employment. could tailor
  their fiscal and monetary policies to domestic
  needs
• autonomy under embedded liberalism should not
  be over-stated
• The system did not remove the necessity to adjust
  macroeconomic policy in response to balance of
  payments deficits or surpluses

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Crisis of Bretton Woods Crisis of Social
Democracy?

• as financial deregulation and international
  capital mobility advanced in the 70s 80s Social
  Democratic Governments ability to control
  national economic space was reduced
• As the Bretton Woods order collapsed in the
  1970s, Left governments faced grave crises, and
  experienced the harshness of international
  economic constraints
• UK Labour and the 1976 IMF crisis
• France 1983 Mitterrands U-turn, retreat from
  Keynesianism

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Competing interpretations of the implications of
globalisation for social democracy (module
guide, pp. 44-5)

• Gray - the end of Social democracy (see False
  Dawn)
• Giddens globalisation has changed the context
  of social democracy. The end of Keynesianism (but
  not social democracy). (see The Third Way)
• C. Pierson, Garrett, Vandenbroucke, changed the
  IPE context of social democratic political
  economy, but social democratic policies, perhaps
  even Keynesian ones, remain viable.

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Social Democracy in Neo-liberal Times (see Glyns
edited book)

• supply side agenda e.g. deregulated labour
  markets
• Increased role for market forces and private
  sector.
• Shifting balance between state and market.
• Cause prevailing (neo-liberal) political
  economic orthodoxy recall the ideas of
  Hayek/Friedman
• Prioritising macro-economic stability (at the
  expense of full employment?)
• Cause need for credibility with financial
  markets

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Is Globalisation undermining social democratic
welfare provision?

• More targeted (often means tested) welfare
  provision less universalism, e.g. full
  employment.
• Cause fiscal (tax and public spending)
  constraints
• Tax constraint due to globalisation mobile
  capital, threat of exit, therefore need to limit
  taxation. Race to bottom
• but these can be over-stated, (see Swank 2002)
• Does globalisation constrain tax raising powers?
  (Swank, Mosley, Garrett to some extent but
  not that much!).
• Often welfare state retrenchment has more to do
  with demographics (ageing societies) than
  globalisation. (see Herman Schwartz Round up the
  usual suspects)

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Conclusions

• No uniform crisis of social democracy caused by
  globalisation
• Different trajectories in different country cases
  
• Some common shifts, notably the need to accept
  more of the neo-liberal economic policy agenda
• Required in the context of global financial
  markets
• Rather than eradicating social democracy (Gray),
  this has changed the strategies and policies of
  social democracy (C. Pierson, Garrett).
• Egalitarianism and full employment can still be
  pursued, albeit under increasingly constrained
  international political economic conditions