Socialism

V

The Post-War Years

After 1945 West European socialists, while remaining formally committed to socialism as an “end state”, that is a society where wealth would be held in common, turned to a conception of socialism “as a process”—the position which had been advanced by Eduard Bernstein at the end of the 19th century. In practice, this meant that, while their most committed supporters held on to the idea of a final goal, socialist parties, now frequently in government, concentrated on social and economic reforms under capitalism. Though these varied from country to country, socialist reforms included, first of all, the introduction of a comprehensive welfare system which, in the formulation borrowed from the British liberal reformer William Beveridge, would protect all citizens “from the cradle to the grave”, and secondly, the attainment of full employment using techniques of macroeconomic management developed by another radical liberal, John Maynard Keynes.

In Britain these reforms were the main achievements credited to the first post-war Labour governments (1945-1951) led by Clement Attlee. Their most significant and popular policy was the creation of the National Health Service, funded out of taxation. Elsewhere in Europe, socialists, thanks to their enhanced electoral weight, achieved some of their aims either by being in government with other parties or by being able to put effective pressure on centrist governments. It is mainly after 1945 that socialism became associated with the management of the economy by the State and with the expansion of the public sector through nationalization. While socialist activists envisaged state ownership as a first step towards the abolition of capitalism, in general, nationalizations had more practical aims, such as rescuing weak or inefficient capitalist enterprises, protecting employment, improving working conditions, or controlling public utilities. While nationalizations have been commonly associated with socialism, they were often resorted to by governments led by non-socialist parties, such as in France (1945-1947), Austria (1945-1947), and Italy (1945-1947 and in the 1960s). Conversely, a successful socialist government like the Swedish Social Democratic Labour Party (1932-1976, 1982-1991, 1994- ) did not extend state ownership and opted instead for controlling the labour market and maintaining full employment while providing a system of “fair wages” known as the “solidaristic wage policy”. This consisted in having the trade unions and the employers jointly determining what a fair wage might be in a range of occupations. Firms unable to pay such wages would have to improve their efficiency or go out of business. The resulting unemployment would be rapidly absorbed by well-run training schemes. Clearly, abolishing capitalism was no longer regarded by Swedish socialists as a realistic aim. They preferred to concentrate on a regulation of capitalism to meet working-class needs as represented by the trade unions. Such a policy, at least until the 1980s, far from weakening Swedish capitalism, appeared to strengthen it. Sweden for long remained one of the richest and least unequal societies in the Western world.

Outside the Scandinavian countries, the 1950s turned out to be difficult years for European socialists. They were out of power almost everywhere. In Eastern Europe they were banned by communist regimes, and in Portugal and Spain by right-wing dictatorships. In Britain the Conservative Party was in power for 13 consecutive years following Labour’s 1951 electoral defeat. In Italy and Germany, Christian Democracy dominated the political scene, while in France Charles de Gaulle and his conservative supporters were the beneficiaries of the political crisis caused by the Algerian War of Independence; having taken power in 1958 the Gaullists held on to it until 1981.

The remarkable expansion of capitalism during the 1950s and 1960s put an end to the assumption that under capitalism the working class would be constantly impoverished or that the economy would stagnate. West European socialist parties began to discard Marxism openly (something they had already done in practice), accepted the mixed economy, loosened their links with the trade unions, and abandoned the idea of an ever expanding nationalized sector. While a significant percentage of the working class continued to vote for the parties of the centre and of the right, socialist parties increasingly sought to attract middle-class centrist voters. To do so they discarded many of the symbols and rhetoric of their past, such as the red flag or the designation of members as comrades, which they shared, embarrassingly, with communists. This late 1950s revisionism proclaimed the new goals of socialism to be wealth redistribution according to principles of social justice and equality. Ideas such as these were popularized in Britain by Anthony Crosland (The Future of Socialism, 1956) and enshrined by the German SPD in their Bad Godesberg programme of 1959. All social democrats assumed that continuous economic growth would sustain a thriving public sector, assure full employment, and fund a burgeoning welfare state. These assumptions were often shared by Conservative and Christian Democratic parties, and they corresponded so closely to the actual development of European societies that the period between 1945 and 1973 has sometimes been referred to as the era of “social democratic consensus”. Significantly, it coincided with a golden age of capitalism. The wealth generated by economic growth funded the welfare state. Not only was the development of capitalism not incompatible with the reforms advocated by socialists, but it seemed to make such reforms possible. Communist countries, at least in the 1950s, grew rapidly too, but their growth was mainly quantitative: the quality of consumer goods they produced was always inferior to those of advanced capitalist societies.

By the 1960s the socialists began to return to power. The victory of the Labour Party in Britain under Harold Wilson in the 1964 elections brought to an end 13 years of conservative rule. In the following six years, Wilson’s government attempted, not always successfully, to establish some kind of management of the economy in cooperation with the trade unions and the employers. Of greater long-term significance was civil liberties legislation: capital punishment was abolished, homosexuality and abortion were legalized, and laws against discrimination on ground of race and gender were promulgated.

In West Germany, the SPD returned to power in 1966, and, first with Willy Brandt, later with Helmut Schmidt, ruled for 15 years, at first in coalition with the Christian Democrats, then, after 1969, with the Liberals. They concentrated on economic development and new forms of industrial democracy, known as Mitbestimmung or co-determination. They also initiated a policy of rapprochement with East Germany and the Soviet Union known as Ostpolitik.

VI

The 1970s and the “Crisis of Capitalism”

The sharp increase in petroleum prices in 1973 was the trigger that led to widespread inflation in the economically advanced world while growth rates faltered. At first this favoured the socialist parties because it was generally assumed that in order to restore growth, employers and governments would have to reach some understanding with the trade unions and that a socialist government would be in a better position to act as a mediator. Further evidence that the general conjuncture of the mid-1970s favoured the left was provided by the collapse of the three remaining right-wing dictatorships of southern Europe—Portugal, Spain, and Greece (where there had been a military takeover in 1967). As democracy became consolidated the socialists were able to elbow out their communist rivals, become the leading party of the left and achieve political power.

The idea of a crisis of capitalism reappeared in political discourse. A growing ecological consciousness (see Ecology), though not necessarily aligned with socialism, implied that unchecked capitalist growth was inimical to the environment. Feminism challenged conventional conservative morality. US prestige had been weakened by the Vietnam War, concluded in 1975 with the victory of communist North Vietnam, and by the Watergate scandal that led to the resignation of President Richard Nixon.

VII

The Turning Tide of the 1980s

By the late 1970s and early 1980s, however, the tide, at least in northern Europe, particularly in Britain and Germany, was turning against the left. Rising unemployment had weakened the trade unions and, by increasing poverty and the problems associated with it, made social protection via the welfare system far more costly than it had been in the days of full employment. To maintain welfare standards while unemployment increased required a high level of taxation to be extracted from those still in employment. This proved unpopular. Conservative parties detached themselves from the political consensus and argued that it was necessary to “roll back the State”, reduce public spending, and privatize state-owned companies. Socialists were increasingly on the defensive. They were accused of being “statist”, bureaucratic, and spendthrift. By 1980 the size of the factory-based proletariat was in decline throughout Europe. Increases in productivity were no longer paralleled by the creation of new jobs. On the contrary, they enabled increased production to be achieved at the expense of employment while redundant workers were no longer absorbed in expanding sectors. Though the socialists never depended exclusively on the working class for their electoral victories—indeed, a significant proportion of workers always voted for Conservative and Christian Democratic parties—the shrinking of the traditional working class in the 1970s and 1980s further weakened the appeal of the socialists. Working-class identity became far less pronounced in this period while the divisions between workers deepened. The prosperity of skilled workers employed in successful private enterprises contrasted sharply with a growing pool of casual and unskilled labour—many of whom were immigrant workers or women employed part-time. To regard the working class as a “universal class” which prefigured a post-capitalist future seemed increasingly anachronistic. The growing economic interdependence that rapidly developed in the 1970s and 1980s, and was often referred to as globalization, meant that traditional macroeconomic Keynesian policies had become less effective. Domestic reflation (pumping money into the economy to achieve an increase in demand) brought about balance of payments problems (since some of the demand was for goods produced abroad) and inflationary pressures. Socialist governments discovered this to their cost in Britain in the 1970s and in France in the 1980s.

In Britain and Germany the socialist parties lost elections in, respectively, 1979 and 1981. They remained out of power until the second half of the 1990s. Matters changed significantly, however, in France and in Italy. In both countries the left, instead of being dominated by socialists as in the rest of Western Europe, was deeply divided between socialists and communists. This had helped centrist parties (the Gaullists in France and the Christian Democrats in Italy) to remain in power continuously until 1981 (France) and 1994 (Italy). In France, communists and socialists had begun to patch up their differences in the 1960s but the rapprochement was long and tortuous. It paid off in 1981 when the socialist leader François Mitterrand was elected president, and a government dominated by the socialists, and which included the communists, was formed. No such entente was reached in Italy where the socialists remained the junior partner in a succession of Christian Democratic governments. It was only after the collapse of the governing parties in 1991-1992, in the wake of sensational corruption scandals, that a reconstituted communist party, now known as the Left Democrats, could achieve power at the head of a heterogeneous coalition from 1996 to 2001, when it lost power to a new right-wing government led by the media magnate Silvio Berlusconi.

In international affairs most socialist parties sided with the West during the Cold War, even though important minorities within each party sought a middle way between capitalist democracy and Soviet communism, denounced US foreign policy, and voiced their solidarity with the developing world. On the whole socialist parties in power followed a bipartisan foreign policy.

VIII

Socialism Across the World

Strong socialist or Labour parties have remained substantially confined to Europe or to countries whose population is or was mainly of European extraction, such as Australia, New Zealand, and Israel. The United States, which has never had a significant socialist party, is the main exception to this rule—something that has often puzzled socialist theorists who wrongly assumed that industrialization would always be associated with a strong socialist movement. The Social Democratic Party in Japan was out of power from the end of World War II to 1993 when it led, albeit briefly, a governing coalition. In Indonesia, after gaining independence from the Netherlands, there was a relatively strong left that included both socialists and communists. The 1965 anti-communist military takeover led by Suharto equated socialists with communists and persecuted both in equal measure, in effect annihilating them. No socialist tradition remained to take advantage of the return to democracy in the 1990s. In Latin America only Chile produced a significant socialist party, strong enough to survive underground after the military takeover of 1973 and be elected to power after the end of the dictatorship. In the 1990s Brazil, after years of military dominance, saw the new social democratic party of Fernando Henrique Cardos win the presidential election, but as his administration veered between neo-liberalism and social reforms, his social-democratic credentials were in dispute. His more radical successor, Luis Inacio Lula da Silva, generally known as Lula, won the presidential elections in 2002 at the head of a recently created Workers’ Party. Lula himself was a trade union leader and his new party has considerable support from organized labour. This is not a necessary sign of leftism, especially in Latin America where the most important political movement supported by the trade unions was the right-wing populist party founded in Argentina by Juan Perón, whose influence outlasted its creator.

Elsewhere socialism was usually a local variant of communism, hence the frequent references to African socialism or Arab socialism. In Asia and much of Africa, socialism was an ideology advocating modernization by the State, rather than an outright anti-capitalist doctrine. Socialist ideas, though they seldom led to the formation of significant separate parties on the West European pattern, greatly influenced independence and anti-colonial movements, notably the National Congress Party in India, the African National Congress in South Africa, and post-colonial regimes such as those of Tanzania, Zambia, and Zimbabwe. When in power, African socialist parties concentrated on nation-building and social reform often at the expense of democratic rule and civil rights. The ideas of social democracy also influenced many parties outside Europe, particularly, though not exclusively, those in the economically advanced parts of South East Asia since the economic crisis that has affected the area in the late 1990s. An appeal to ill-defined “Asian values” was made to provide a justification for proposing forms of social control over markets that are reminiscent of social democracy. Notable examples of Asian parties and leaders which might be defined as social democrat have been Kim Dae-jung, elected president of South Korea in 1998, and Chen Shui-bian, the leader of the Progressive People’s Party of Taiwan, elected president in 2000.

IX

Socialism After the Collapse of Communism

The collapse of communism in the Soviet Union and in Eastern and Central Europe, though it led to the transformation of many of the former communist parties into socialist parties, brought no comfort to the left in Western Europe. The crisis of communist command economies was generally seen as further evidence that the spontaneous decisions of millions of individual consumers through the market mechanism was better at allocating resources than any form of state interference. Neo-liberal ideologies thus gained ground everywhere. These too, however, proved unpopular. European electorates became increasingly concerned that austerity programmes would seriously impair public services, healthcare (free in virtually the whole of Europe), and education. Electoral successes of the left in Europe may be seen as a conscious or unconscious recognition by a majority of voters of the necessity of some kind of renegotiation with a new kind of capitalism that was more assertive, more powerful, and more global; and, as a tacit acknowledgement, that it may be better to entrust such renegotiation to political forces that, historically speaking, have always been hostile to the ideology of the untrammelled market.

Having abandoned a considerable part of their previous ideological commitments, socialist parties returned to power in unprecedented number. As the millennium came to a close they were in power in almost all member states of the European Union (EU), including the four largest countries: Britain, France, Germany, and Italy. Commentators who had declared socialism dead in the wake of the collapse of communism had to revise their views and heralded the beginning of a new socialism. Generalizing on the results of elections is often to become a hostage to fortune. By the beginning of the millennium the message was mixed. In 2001 Tony Blair, the leader of the British Labour Party, who had gone further than his continental colleagues in abandoning the more radical aspects of the socialist tradition, was confirmed prime minister with almost the same large parliamentary majority he had achieved in 1997. In 2002 Gerhard Schröder became the SPD Chancellor of Germany for the second consecutive time, though with a narrow margin. A similar success was achieved by social democrats in Sweden. The right, however, won in Italy (2001), France (2002), and the Netherlands (2002 and 2003), and had previously lost power in Spain, Denmark, and Norway. More worrying was the realization that the fastest growing parties in Europe were right-wing populist formations able to attract the vote of a section of the electorate concerned about growing unemployment and crime, and willing to attribute the blame to immigrant communities and ethnic minorities.

Differences between various parties and leaders of the left are often emphasized by the media. In reality, comparisons are difficult. Political parties are constrained by national traditions, economic circumstances, and, above all, by the institutional system. Britain, for instance, is, compared to federal Germany, a highly centralized state. But Britain has no constitution to bind its prime minister, and the electoral system usually produces a clear majority for the winning party, while elsewhere in Europe, coalitions are the norm. As a consequence, a British Labour government is far freer to implement its programme than any of its continental counterparts.

Important policy differences have always divided the left throughout the world, even in Western Europe, in spite of a common past and inherited traditions. Some socialist parties have been strongly pro-US, while others kept themselves and their countries out of the Atlantic alliance; some were enthusiastic pro-European, while others remained sceptical about the benefits of an integrated Europe. Nevertheless, a remarkable convergence of the European left has occurred over the past 15 years under a new moderate leadership advocating broadly centrist policies known in Britain as the “Third Way”, la Gauche plurielle in France, Neue Mitte in Germany, and the Polder Model in the Netherlands. The new line is that inflation is more dangerous than unemployment and that socialists should be pro-business. If one looks beyond the vicissitudes of electoral politics and the constant passages from opposition to government and vice versa, there is much to support the view that socialism, as it had evolved in the course of the 20th century, is, if not dead, at least moribund. Socialism—as represented by the socialist parties—had not only lost its original anti-capitalist outlook but is also coming to terms, albeit painfully, with accepting that, in the age of globalization, capitalism could not be adequately controlled, let alone abolished in individual countries.