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Today’s Haunting Specter (or What Needs Doing)

An attractive social democrat, Ségolène Royal, just lost the French presidential race to a neoliberal candidate, leaving French leftists debating the causes of their failures and what to do about them.  The center-left in Italy recently defeated the staunch neo-liberal, Sylvio Berlusconi.  Yet its incapacities to define a new and different social program or mobilize mass support for it leave Italian leftists debating the same basic issues as the French.  Talking to Europeans (as I did this last month) exposes the mix of strategic confusion and general demoralization that now haunts the broad left nearly everywhere.

One central issue is a lack of conviction among leftists about resuming the old programs of welfare-focused state interventions that neo-liberalism has everywhere more or less dismantled.  Thus some (like Blair, Clinton, et al.) move to reduce (or, as often marketed, to “modernize”) those programs.  Others doggedly keep advocating the classic mix of welfare state-interventionist programs anyway, but without enthusiasm.  Electorates sense these ambivalences among social democrats and often compare them unfavorably with the self-confidence of global neo-liberalism’s advocates.  Neo-liberalism won sufficient mass support to become hegemonic by attacking welfare state programs and the regimes implementing them for their evident failures to solve serious social problems.  Privatization and free markets were heavily advertised as the better solutions.

When neo-liberal spokespersons attacked social democracy’s failures they found ready audiences.  These included the workers who discovered that the jobs, wages, and social benefits — won by the broad left in the aftermath of the Great Depression — could not subsequently be secured by left parties (in or out of power).  Also receptive were many former students caught up in the tumultuous 1960s.  They learned then that left parties either could not or would not match their actions to their rhetoric about equality and solidarity even when mass support for doing so had been mobilized.  And, of course, neo-liberalism won most of the right and center-right political formations who had been frightened and angered by the left turns produced by the Depression and intensified in the 1960s.  They were eager to reverse those turns.

Neo-liberalism’s mass supporters are increasingly disappointed by its actual results: another case where “truth in advertising” was not enforced.  But they will not switch back toward a social democracy that was so recently and massively disappointing as well — and especially not when it is advocated so ambivalently.  Thus the left in today’s advanced industrial capitalisms seems disorganized, demoralized, rudderless, and unfocused.  With no compelling vision or program, it wallows in weak “oppositional” reactions to neo-liberalism’s continuing initiatives.

This sorry situation will not change unless and until the left answers two key questions.  First, why did past social democratic achievements prove insecure in the face of neo-liberalism’s attacks?  Second, what kind of new social democratic vision and program could mobilize the left and win mass support to resume change in the direction of genuine economic and social equality, democracy, and solidarity?  So here are some thoughts, based on recent interviews in Europe, to add to our efforts to answer these questions.

In the past, social democracy called for using the state to offset, correct, regulate, and otherwise manage the workings of capitalism.  It sought a capitalism with a human face: one with fewer inequalities of wealth, income, power, and access to culture.  The state was to manage capital investment, regulate markets, and shape the distribution of income and wealth: all in the interest of a solidaristic society.  Economic growth and efficiency, attributed to capitalism, were to be supported while state policy would prevent or counteract the socially undesirable consequences of private capitalist production and commodity markets.  State interventionist capitalism was the solution; private capitalism free of state controls and interventions was the problem.

The social democratic solution thus constrained what private capitalists could do in their profit-driven competition with one another and their profit-driven relations with employees and customers.  But it left them in the position of receiving and dispensing enterprise profits.  Social democracy thus left private capitalists with the incentive to weaken, deflect, or remove those constraints.  It also provided capitalists with the means — their retained profits — to do so.  In a sense, this was the historic capitalist-socialist compromise of the 19th and 20th centuries.  Capitalists could keep their positions as receivers and dispensers of enterprise profits, but the conditions of those positions would be constrained by social(ist) welfare state policies.

Whatever its benefits, this historic compromise set the stage for new struggles.  Welfare states became contested terrains: social democrats sought to strengthen and expand them, while capitalists sought to reduce, weaken, or eliminate them.  From the 1930s to the early 1970s, despite some social democratic gains, the trend moved in the direction that favored capitalists.  The trend turned into a rout in the 1970s and has remained so ever since.  The capitalists used their profits to improve their business prospects and performance by, among other strategies, undoing welfare statism.  By lobbying, moving production outside national borders, immigration, common markets, media campaigns, and countless other mechanisms, the capitalists succeeded in bringing social democracy to its current sorry state.

Even where trade unions and socialist and communist parties were strong, they proved no match for the profits capitalists could use against them.  Moreover, the capitalists eventually grasped that capturing the mass imagination was the most effective weapon in their arsenal, less costly and socially disruptive than direct confrontations in parliaments or factories or schools or in the streets.  Nor could social democrats advocate the obvious, namely that the capitalists be deprived of their profits and thus their chief means to fight social democracy.

The Cold War blocked such advocacy.  In the USSR, private capitalists had been eliminated in industrial enterprises and replaced by state officials.  Demonizing the Soviets generally worked nicely in advanced industrial capitalisms to dissuade social democrats there from demanding any similar replacement of private capitalists.  Moreover, although few social democrats grasped this even after 1989, the Soviet revolution of 1917 had in effect replaced private capitalists with state-appointed capitalists.  Workers in Soviet industrial enterprises, like their counterparts in private capitalist enterprises, still produced profits for others.  Instead of private boards of directors, Soviet commissars did the “appropriation and distribution of the surpluses” as Marx put it.  Industrial workers never became the appropriators and distributors of the surpluses (“profits”) they produced.  Thus, when Soviet industry foundered in a major crisis in the 1980s, those commissars could quite easily re-privatized industry and “neo-liberalize” post-Soviet society.  As commissars they utilized the surpluses they received from Soviet workers to accomplish the re-privatization of Soviet state industry.  Then, as private capitalists, they utilized their profits to impose shock-therapy neo-liberalism.  And just as elsewhere, Russians disappointed with neoliberalism’s results there are not about to switch back to the deeply discredited Soviet alternative.

The new direction and strategy for social democracy follows from the flaw in its historic compromise with capitalism.  The egalitarian, solidaristic society envisioned by social democracy cannot be secured so long as it leaves in place a group of people with incentives and means to prevent that.  A transformation of the structure of production inside each enterprise could change the basic situation in so far as it ended the dichotomy between workers and capitalists.  The collective of workers that produces the surplus/profits would become the same collective that appropriates and distributes the surplus/profits.  Full participation in work and its products would then make possible and foster full participation in political democracy and cultural activity.  Achieving this fundamental re-organization of each enterprise must become a core policy of social democracy.

Instead of old social democratic policies inadequate to their goals, this projected transformation of the structure and practice of all work represents a dramatic new vision and program.  It offers the basis on and with which to construct an egalitarian, solidaristic society.  Advocacy of such a program might reanimate, unify, and focus the forces of a new left today.

Rick WolffRick Wolff is Professor of Economics at University of Massachusetts at Amherst. He is the author of many books and articles, including (with Stephen Resnick) Class Theory and History: Capitalism and Communism in the U.S.S.R. (Routledge, 2002) and (with Stephen Resnick) New Departures in Marxian Theory (Routledge, 2006).

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