It is not exactly a secret that social democracy, at least in North America, has fallen on hard times. Any honest assessment of the NDPs platform reveals a grab-bag of for better or worse ideas.* The problem is that it lacks not only a coherent animating vision but a realistic appraisal of the state of things. It lacks a certain pragmatism but not for the reasons commonly adduced. Indeed, usually realism and pragmatism are invoked to urge social democrat parties to make an accommodation with the existing politics and economics of the time. Yet, Tony Blair’s “there is no alternative,” or Schroeder’s third way social democracy are by now thoroughly discredited political exercises.
But what went wrong? Curiously, there is not any end of analyses which argued that in the case of New Labour it was too accommodative; too willing to make its peace with the political economy of neoliberalism. How then could such a political program of pragmatism now be so out of sorts with the reality of today? Ironically, part of the answer is that it is precisely because New Labour sought accommodation with neoliberalism that it was bound to fail. In very real sense it was indeed too pragmatic. What new labour failed to do was develop a clear headed vision that was not merely based on an acceptance of the status quo. Politically this may have been a symptom of the times. But what North American social democrats and Canadian social democrats in particular need to take stock of is the abysmal failure that was the pragmatism of New Labour without engaging in reckless magical thinking.
This magical thinking has taken two central forms. On the one hand it has manifest in a benign or malignant romanticism of the thirty glorious years or the golden age of the Keynesian welfare state. Let us skip over the debate about how glorious these thirty years actually were. The idea is that what social democrats ought to be advocating is a return to the universal bureaucratic welfare state of a by-gone age. Why on earth would social democrats hold this up as a model? Even beyond the fact that today there is simply not the type of social and political cohesion available to make this work in terms of tax policy why would social democrats hold up the high modernist, top down, bureaucratic welfare state as the solution to the contemporary anarchy of the market? Take welfare policy for example. And here I do not mean to denigrate or trivialize the compassion of welfare workers but the fact is there are humanist limits to what large bureaucracies can process. And yes that is what welfare bureaucrats do: they process. First, they employ a pre-determined formula to assess whether the prospective recipient is worthy. Second they then start a file and begin the process of monitoring their object (you just can’t have 300 subjects per case worker…ratio is of course illustrative not actual). So here subjects become objects: grist for the bureaucratic mill. And there is a limit to what can be done at this scale. It is indeed a poor substitute for a humanistic and democratic form of welfare. The bureaucratic solution to the necessity of welfare is alienating precisely because it both individualises its subjects and then renders them as objects of policy. It neither empowers nor thus liberates them: it does not give them agency it rather reinforces the lack of agency stemming from poverty. Now why would social democrats accept this as a democratic and humanistic model of how to deal with the anarchy of capitalism and the existential uncertainty of modern life? A realistic politics would attempt to address this, and the magical thinking that takes harbour in a unearned romanticism just kicks the problem down the road and plants the seeds of its own destruction.
On the other hand, magical thinking has captured the imagination of those social democrats who would look abroad. Often we hear Sweden, Norway, or Germany is evidence that another world is possible. Let us leave to the side for the moment the question over whether or not these countries have in the last 15-20 years been on a social democratic trajectory or on an accommodationist trajectory. That is, let us not ask the pertinent question as to the direction of political and economic change in the past two decades in these countries. Let us assume that all is well that is stylised well. Rather, the North American social democratic magical thinking consists in presuming that these model social democratic welfare states can be transplanted into the North American context. They can not. Even a cursory glance at the history of their welfare state institutions form training to unemployment insurance through to industrial relations reveals a complex web of socio-political compromises that would shape the development of their institutions and create natural constituencies for their reproduction over time. North America lacks these histories and hard institutionalisation of these institutions and there simply is no way to technocratically impose them. We have neither the legal nor the social precedents to enforce them let alone reproduce them.
The mater can be graphically illustrated. In the neo-Kaleckian framework economies exist in three potential states. A high road equilibrium characterized by practicable full employment, high productivity growth and the requisite institutions to ensure a balance between the rate of productivity growth and the rate of wage growth. We can call this a weak equilibrium as it rests on a series of historical compromises and institutional path dependencies that are difficult to maintain. Their durability rests on the fact of a balance of class forces which in which the significant social actors have the credible capacity to punish defection from the game. Neoliberalism in North America and Anglo Saxon countries in general was about forever depriving both the democratic state and the subordinate social partners such as unions from developing and maintaining this sanctioning capacity. This fact cannot be papered over. There is not in North America a state or a union movement strong enough to force the kind of class and institutional compromises into existence necessary to produce a credible sanctioning force. Thus it would appear that social democrats are left with one of two choices. An embrace of middling equilibrium between economic boom and bust in which more or less welfarist policies can be pursued or an acceptance of a low road, low employment, low productivity growth de facto model in which dogs eat dogs.
Thus far the pragmatist element within North American social democracy has been pre-occupied with redistributing boom time gravy and now bust time austerity. It is essentially parasitic on neoliberalism and thus is a sick pragmatism. Real pragmatism and serious realism demands that they start from where they are and guided by a coherent animating vision, set a bar for where they want to go. North American social democrats are in this regard totally lost.
In the second part of this post I will suggest how social democrats could realistically and pragmatically move forward. Continue reading →