Can Social Democracy Explain Its Own Success?

by Matthew Yglesias on October 31, 2006

With The Primacy of Politics Sherri Berman has given us a magnificent intellectual history of the debates within the left in the first half of the twentieth century that led to the rise of ideologies — social democracy and fascism — that rejected the economic determinism of Marx and Engels in favor of political activism aimed at curtailing, rather than eliminating, free markets. What she hasn’t given us, I’m afraid, is an especially convincing causal story that the unfolding of these debates really was the key to the establishment of the distinctive post-war social, political, and economic settlement in Europe.

Most broadly speaking, it seems fairly clear that post-war developments in Europe were, fairly literally, responses to the fact of the war and the war’s apparent origins in the economic crises of the interwar period. This observation, while hardly vindicated the totality of Marx’s historicism, does underscore the reality that the economic interpretation of historical development has some real merits to it. Similarly, socialist gradualism actually seems to have triumphed rather suddenly. The reformers whose story Berman tells had, for reasons she outlines, very little influence on pre-war policies. With the war over, however, the policy environment shifted extremelyrapidly; advancing far enough in a short enough time, in fact, that all of Europe still bears distinctive signs of the social democratic movement even though the tide, as Berman argues, has been in reverse for some time now.

How could things change so quickly? And why would they change so rapidly specifically during the postwar period?

It seems to me that to make sense of this, one has to see the postwar era as less a triumph of social democracy per se than a coming together of diverse brands of political thought. In particular, Berman seems to badly neglect the existence of divisions within the liberal camp that proved crucial as well. Oddly, the existence of such divisions is repeatedly implied by portions of Berman’s narrative, wherein she emphasizes that one perpetual source of controversy within the socialist camp was the legitimacy of various forms of collaboration with “bourgeois” political parties. But which parties would a socialist be tempted to collaborate with? Well, with the more left-wing of the liberals, it would seem, and, indeed, most of the examples Berman discusses bear that prediction out. But then who were these progressive liberals? Why did they disagree with their classical brethren? And what distinguished them from socialist reformers? Why were they interested in collaborating with the right-wing of the socialist movement?

To complain that Berman wrote a book about right-wing socialists when she should have written one about left-wing liberals would be churlish. Rather than do that, let me simply suggest that the timing of the post-war settlement (after the war, obviously) suggests that movement within the liberal camp may have been more causally decisive than arguments inside the socialist movement. In particular, little that happened during the fifteen years before the end of the war should have tended to make the left more confident about the possibilities of free markets or democracy. And, indeed, the postwar era was a growth period for the very far-left movement of Communism in France, Italy, and other European locations.

What the Depression, the war, and the dawning of the Cold War did bolster was the argument the left-hand side of the argument within liberalism. Unmitigated capitalism seemed to risk not only a large dose of human suffering, but the total collapse of the liberal political order and, potentially, the triumph of Soviet Communism. Under the circumstances, a rapprochement with moderate elements within socialism starts to look rather more appealing than it would have previously. In turn, a growing sense among capitalists that capitalism needed to be compromised in order to be saved is precisely the sort of thing that could lay the groundwork for rapid movement toward social reform. And, indeed, it seems notable in this regard that countries that had never had a strong Marxist presence — England, the United States, Canada — also moved in this period toward the construction of much more elaborate welfare and regulatory states than had existed previously. In the American case, at least, this was done almost entirely by liberals shifting to the left without any real input from a vibrant socialist movement. It’s no coincidence, of course, that the United States moved less far in this direction than did the nations of the continent — a strong social democratic movement does make a difference — but also noteworthy that the United States did distinctly move in that direction even without the presence of social democracy on the ground.

This way of looking at things also casts some doubt on the view that a revival of social democracy requires merely a higher level of confidence, creativity, and elan on the part of social democrats. Part of the story, surely, is that in the wake of the Cold War proponents of the more classical strands of liberals have regained much of their confidence. It no longer looks necessary to give the moderate left an inch to prevent the Soviets from taking a mile. More banally, social democracy simply suffers from being redefined as the left pole of the political spectrum rather than as a “third way” in a dynamic where Communism or orthodox Marxism anchors the left. While politics surely matters, in other words, it seems odd to genuinely regard it — rather than, say, objective circumstances — as genuinely primary in determining outcomes. Pre-war social democracy is an interesting intellectual movement with a story worth telling, but it’s moment in the sun came not because it’s arguments became suddenly more persuasive, but because the situation changed to one that was much more favorable to its success. With the passage of time, the situation has changed again and social democracy’s position is substantially weakened in a way that’s unlikely to be reversed absent another dramatic change of circumstances.



DC 10.31.06 at 7:26 pm

Well said Mat. At least I’m glad to see someone sticking up for materialism.


stostosto 10.31.06 at 9:11 pm

it seems notable in this regard that countries that had never had a strong Marxist presence—England, the United States, Canada—also moved in this period toward the construction of much more elaborate welfare and regulatory states than had existed previously. In the American case, at least, this was done almost entirely by liberals shifting to the left without any real input from a vibrant socialist movement.

It’s largely forgotten now, but the Dutch economist and Nobel laureate Jan Tinbergen had a convergence theory which was once regarded as intellectually respectable. Convergence, mind you, not between more and less laissez-faire capitalist states, but between capitalist and communist economies. The western economies, so went the theory, were trending towards more management and even planning (under various names, one of them the so-called neo-classical synthesis, another one social democracy, a third one Keynesianism, a fourth one the New Deal and Great Society). The communist economies, if anyone remembers, were constantly struggling with how to overcome systemic rigidities, poor resource efficiency, poor quality and ever-present microeconomic imbalances. In the process they inevitably, and recurringly, employed various types of market-based mechanisms. Some of the most far-reaching were those of Hungary from 1968 onwards (New Economic Mechanism), but also Poland had them, as well as Yugoslavia (outside of the Soviet sphere of influence). The Soviet Union itself had several spates of reform attempts during the fifties and sixties with at least some market elements in them.

The theory had some plausibility as far as it went, but its empirical underpinnings were abruptly swept away by events from 1989 onwards, as convergence emphatically became a one-way street.


lemuel pitkin 10.31.06 at 11:12 pm

This absolutely right. (And do I detect a hint of longing on the part of left-liberal Matt for some pragmatic socialsits to collaborate with?)

Particularly important is the role of the Soviet Union — whatever you think of it in other respects, it clearly was critical in opening up space for a more humane order in Western Europe, which very few (at least in the US) are willing to acknowledge.

The only thing I would add is the role of the war and fascism in demoralizing and discrediting the old elites. Not only did they not stop it, but too many of them ended up on the wrong side, at least as collaborators.

This doesn’t apply exactly in the US, but obviously the partial leitimation of the Communists and the marginalizing of some major strands of traditional conservatism had everything to do with the war, and contributed to the gains of the welfare state here.

Other than that minor quibble, really excellent analysis.

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