Social Democracy After the Cold War Social Democracy After the Cold War Interior.indd 1 12-05-25 12:38 PM Social Democracy After the Cold War Interior.indd 2 12-05-25 12:38 PM SOCIAL DEMOCRACY After the Cold War edited by bryan evans and ingo schmidt Social Democracy After the Cold War Interior.indd 3 12-05-25 12:38 PM Copyright © 2012 Bryan Evans and Ingo Schmidt Published by AU Press, Athabasca University 1200, 10011–109 Street, Edmonton, ab t5j 3s6 isbn 978-1-926836-87-4 (print) 978-1-926836-88-1 (pdf) 978-1-926836-89-8 (epub) Cover and interior design by Natalie Olsen, Kisscut Design. Cover Photograph: MMchen / Source: photocase. Printed and bound in Canada by Marquis Book Printers. Library and Archives Canada Cataloguing in Publication Social democracy after the cold war / Ingo Schmidt, Bryan Evans, eds. Includes bibliographical references. Also issued in electronic format. isbn 978-1-926836-87-4 1. Socialism—History—20th century. 2. Socialism—History— 21st century. i. Schmidt, Ingo ii. Evans, Bryan, 1960– hx73.s616 2012 335 c2012-901753-1 We acknowledge the financial support of the Government of Canada through the Canada Book Fund (cbf) for our publishing activities. Assistance provided by the Government of Alberta, Alberta Multi- media Development Fund. Preparation of the index was made possible through the generous sup- port of an Arts Small Projects Grant from the Faculty of Arts at Ryerson University. This publication is licensed under a Creative Commons License, Attri- bution–Noncommercial–No Derivative Works 2.5 Canada: see www. creativecommons.org. The text may be reproduced for non-commercial purposes, provided that credit is given to the original author. To obtain permission for uses beyond those outlined in the Creative Commons license, please contact AU Press, Athabasca University, at [email protected]. Social Democracy After the Cold War Interior.indd 4 12-05-25 12:38 PM This volume is dedicated to the memory of our friend and colleague Dennis Woodward. His unexpected and untimely passing left us deeply saddened and robbed the Australian Left of a thoughtful and articulate voice. Social Democracy After the Cold War Interior.indd 5 12-05-25 12:38 PM Social Democracy After the Cold War Interior.indd 6 12-05-25 12:38 PM Contents INTRODUCTION 1 Bryan Evans The New Social Democracy IT’S THE ECONOMY, STUPID! Theoretical Reflections on Third Way 13 Ingo Schmidt Social Democracy FROM PROTEST MOVEMENT TO NEOLIBERAL MANAGEMENT Canada’s New Democratic Party in the 45 Bryan Evans Era of Permanent Austerity AMERICAN SOCIAL DEMOCRACY 99 Exceptional but Otherwise Familiar Herman Rosenfeld THE BRITISH LABOUR PARTY In Search of Identity Between Labour 149 Byron Sheldrick and Parliament SOCIAL DEMOCRATIC PARTIES AND UNIONS IN A GLOBALIZED WORLD 183 Dennis Woodward The Australian Experience SWEDISH SOCIAL DEMOCRACY AfTER THE COLD WAR 205 Kjell Östberg Whatever Happened to the Movement? THE SOCIAL DEMOCRATIC PARTY IN GERMANY Caught Between the Fall of the Berlin Wall 235 Ingo Schmidt and the Rise of The Left THE QUÉBEC TURN 271 Roger Rashi references 289 • contributors 321 • index 323 Social Democracy After the Cold War Interior.indd 7 12-05-25 12:38 PM Social Democracy After the Cold War Interior.indd 8 12-05-25 12:38 PM INTRODUCTION The New Social Democracy bryan evans The contributions to this volume provide a comprehensive exam- ination of a politics that has come to be identified as the “new” social democracy. What makes this historic political movement, with its origins in the late nineteenth century, “new” is the transformation that has occurred in its politics, policy, and ideol- ogy since the 1980s, but especially through the 1990s. Of course, social democracy has reinvented itself before. Its original ideo- logical roots, at least in Europe, were broadly Marxist, and its political base was the urban working class. In the postwar era, however, shaped by the Cold War and the brutalities of Stalin- ism, this heritage was largely jettisoned and replaced with a form of progressive Keynesianism and an increasingly heterodox political base that included a growing number of professionals. The social democracy we see today has now abandoned even that commitment to a mixed economy characterized by significant but not dominant public ownership and redistributive social and economic policies. What distinguishes the new social democracy is an embrace of its new “modern” role as a manager of neoliberal restructuring. This transformation was noted by Michael Harrington (1986, 2), who warned that the social democratic Left in power had, 1 Social Democracy After the Cold War Interior.indd 1 12-05-25 12:38 PM in failing to understand the economic change underway in the 1980s, come to pursue the policies of the New Right. In this context, social democracy was “confronting a crisis of definition and political effectiveness” (Laxer 1996, 11). How would social democracy distinguish itself from explicitly neoliberal parties? Or could it? Of this period in the history of social democracy, Moschonas (2002, 229) writes: The “new” social democracy has definitely not sprung up like some jack-in-the-box. In a sense, the “third way” was already present as well, prior to its adoption by New Labour and theor- etical formulation by Giddens. The new social democracy of the 1990s is the worthy, direct heir of 1980s social democracy. The continuity between them is manifest, and manifestly strong. Indeed, as a result of the efforts of the “progressive moderniz- ers,” for whom modernization “has too often meant deregulation and privatization,” social democracy is no longer what it used to be, argues Robert Taylor (2008). “Too many have sought to accommodate or embrace global capitalism,” he observes, “with varying degrees of enthusiasm. They continue to see the mar- ket as an overwhelming force for good.” Social democrats have, moreover, “too often argued that the only way forward is to abandon notions of equality and fraternity . and to weaken the state to the advantage of the forces of capital.” Through the lens of seven cases — Canada, the United States, the United Kingdom, Australia, Sweden, Germany, and Québec — this volume seeks to survey and document this turn from the postwar social democracy marked by redistributive and egalitar- ian policy perspectives to a new social democracy with a role as a “modernizing” force advancing neoliberalism. The contributions here present original insights into how and why this second refoundation of social democracy has occurred and why this is significant in political and policy terms. The selection of these particular cases provides an interest- ing survey of social democracy. Represented in this sample are 2 Introduction Social Democracy After the Cold War Interior.indd 2 12-05-25 12:38 PM social democratic parties operating in rather different political and historical contexts. In Sweden, the Social Democratic Party has been the “natural governing party” for most of the past ninety years. Through the forty-four years from 1932 to 1976, it formed the government without interruption and constructed a comprehensive welfare state that is seen as an icon of the social democratic project. Germany, geographically proximate to Sweden, offers a very different story. Since the end of the Second World War, German social democracy has struggled to win national government. The Cold War and the loss of the social democratic–voting East as a result of partition profoundly shaped the electoral prospects and strategies of the social demo- crats there. And, today, the Social Democratic Party of Germany (spd) competes with the Left Party for working-class votes. Britain’s Labour Party shares with the other two European cases a historical base in the working class. However, whereas the Swedish Social Democrats are the exemplars of redistribu- tive social democracy, in the 1990s Britain’s Labour Party came to be the most notable expression of the “new” social democ- racy. While less well known, Australia’s Labor Party (alp), like its British counterpart, also reinvented itself as a neoliberal modernizing party by implementing marketization and priva- tization policies while in government and distancing itself from its working-class and trade union base. In Canada, the New Democratic Party (ndp) has never formed government at a na- tional level, but it has had policy influence at certain moments and significant electoral success in several provinces. But, like other social democratic parties, the ndp has transformed itself from a “protest movement” into a party as capable of managing neoliberalism as any of the capitalist parties. And in Québec, a new party, Québec Solidaire (qs), has emerged to give voice to community and anti-globalization activists and workers alien- ated by the Parti Québécois’s rightward drift. Perhaps because of its origins at a time of expanding neoliberalism, the qs remains deeply committed to redistributive social and economic policies but, at the same time, cannot be characterized as monolithically Introduction 3 Social Democracy After the Cold War Interior.indd 3 12-05-25 12:38 PM anti-capitalist. The qs is struggling in a space in which the ques- tion is whether it will reinvent Keynesian social democracy or move toward an anti-capitalist politics with a mass base, some- thing that has yet to emerge in North America. And, finally, the United States is often held out as an example of American exceptionalism in that the social democratic movement is widely viewed as non-existent. This is, however, a gross misreading of the American political scene. Expanding our understanding of the new social democracy is critical for progressives at this time in history. The Great Re- cession of the twenty-first century, which began in late 2007, presented social democracy with an opportunity to advance “the case for sustained public investment and wage-led recov- ery” (Hoffer 2009).