Sheri Berman: Response

Thanks so much for all the interesting and insightful comments, which have given me a lot to think about. Serious exchanges like this are truly an author’s dream. Although I would love to discuss each and every point, in the interests of sparing less-obsessed readers let me focus on some broad themes.

Was the postwar order social democratic or liberal?

Henry Farrell and Matt Yglesias question whether the postwar order should really be considered social democratic. This is an important issue, because what is at stake is who should get credit for the postwar era’s unprecedented combination of growth, democracy, and social stability—and perhaps also, relatedly, who should be listened to today. They both think I downplay the “liberal” contributions to this order, and Henry in particular is annoyed by my charge that any definition of liberalism flexible enough to encompass the postwar order’s features “is so elastic as to be nearly useless.”

It is true that historically there were some liberals who were not entirely comfortable with the full laissez-faire agenda, and some who supported and contributed to the policies we have come to know as the postwar settlement. Nevertheless, I stand by my basic claim. At the heart of classical liberalism, both ideologically and as a matter of historical practice, was an emphasis on the rights and interests of individuals and a deep skepticism of the state and putatively “common” interests. The concept of a politico-economic order built around the legitimacy and frequency of state intervention to protect society’s interests from market operations should send any decent classical liberal into a tizzy.

The fact that there were some liberals back then who did not react with horror to the idea, and that there are many today who consider it unproblematic, does not mean that liberalism occupies a bigger tent than I suggest. It just means that some people who call themselves liberal are really better thought of as social democrats, whether they are prepared to acknowledge that or not.

The parallel I would draw here is to the people I describe as “democratic revisionists” at the turn of the twentieth century. It took many of these socialists a long time to acknowledge that, once they had rejected the doctrines of historical materialism and class struggle, they were no longer truly Marxists. At precisely the same time and for precisely the same reasons that social democrats began separating from Marxists, there were indeed some revisionist and progressive liberals who began distancing themselves from their classical brethren, since the latter had little to say about the immense problems being generated by capitalism and risked political dangers by ignoring them. But what these progressive or revisionist liberals were doing, in truth, was not making incremental improvements within the liberal tradition, but rather abandoning it—or at least watering down its principles into a generic progressive ideological sludge.

Although ideologies are indeed capacious and amorphous things, there must be some lines that cannot be crossed. If there aren’t, and one can believe almost anything and still call oneself a “liberal” or a “Marxist” or a “social democrat,” then those terms are meaningless.

This is the prism through which I view the postwar order. My point is not that it should be called social democratic because it was the sole and direct creation of social democrats—for it was not. Social democrats were not in power in many parts of Europe during the immediate postwar period, and even where they were, the policies they supported were often enacted with the help of others.¹ My point is that it should be called social democratic because only social democracy, of all the major coherent approaches to political economy on offer, called for those particular policies based on those particular principles.

Long before the late 1940s, social democrats—along with fascists and National Socialists—stood for a “third way” between liberalism and communism, calling for an order where markets were neither destroyed (as communists wanted) nor given as free a reign as possible (as classical liberals had long advocated). They wanted to create a world where markets would exist but be tamed, one in which society’s collective needs would take precedence over individuals’ and markets’ needs. Back then, anyone supporting such an order and calling him/herself a liberal would have been suffering from false consciousness; now, they would be suffering from historical amnesia or retrospective spin to associate the losers with the victors’ policies.

Is social democracy equivalent to the programs of today’s European social democratic parties—and if those are unsustainable, does the movement have a future?

Tyler Cowen views “the Western European economies…as the living embodiments of social democracy.” Since he believes these economies are falling inexorably behind their American counterpart, he sees social democracy’s future as grim. Let me unpack these points and deal with them in reverse order.

First, there is in fact little evidence that social democratic economies cannot compete in the 21st century. Some West European economies are struggling, but others are doing quite well—and that divide is simply not correlated with taxation rates or social welfare spending. The paradigmatic social democratic polities today, in fact—Sweden and the other Nordic countries—have done just fine in recent years, consistently outscoring, for example, the United States in global competitiveness rankings.

Second, as chapter 8 of the book tries to explain, some of the major European social democratic parties did indeed lose their way in the last third of the 20th century, because they grew too attached to specific policies and ignored the need to innovate in applying the movement’s core principles to changing conditions. The answer to that problem, however—where it exists—is not to jettison the principles, but to come up with fresh policies that address age-old problems such as commodification, anomie, and personal and communal disruption in ways better suited to contemporary economic realities.

Third, the whole point of social democracy (and the Polanyi-esque worldview it reflects) is that economic development should not be viewed in isolation as the sole criterion of sociopolitical value. Social democrats believe that decisions about economic policy must be judged not exclusively on growth rates (although they too prefer high ones, ceteris paribus), but also on the basis of how growth affects other goals—such as social solidarity, social stability, environmental protection, and the maintenance of a well-functioning democracy. Various indices have been developed to measure countries’ “success rates” based on more than economic criteria alone, of which the U.N. human development index (link to PDF) is perhaps the most well known. It incorporates not merely GDP, but also literacy, life expectancy, and so forth. Not surprisingly, using such criteria Europe—and particularly the Nordic countries—do better than the United States.

Individual academic economists prioritize other goods over higher income all the time—or else they would be finance professionals rather than professors. Social democrats think that societies can and should make such choices too.

Does social democracy require communitarianism?

A few of the commenters raised questions about my notion that social democracy has an inherently communitarian nature—and here again I will stand my ground. You may not like it, it may smack of nationalism or exclusivism, but the fact is that if you want an order based on social solidarity and the priority of social goods over individual interests, some basic sense of fellow feeling is required to get that order into place and keep it politically sustainable. So long as nation-states remain the basic form of political organization in the world, moreover, such fellow feeling will have to be fostered within national borders. Social democrats who can’t accept and deal with this will just end up ceding ground politically to the radical right and various populists, who will step in to supply the communitarian cravings that publics continue to display.

This obviously is risky territory to tread on, since the dark side of communitarianism can be very dark indeed. But I am not endorsing “fascism-lite” (as Henry and Mark seem to fear), or giving a green light for nativism or prejudice. What I am saying is that Tonnies was on to something when he counterposed “community” to “society.”

How to generate strong and emotionally satisfying communities in an increasingly postmodern world is going to be one of the major challenges of this century. One practical implication today is that the multiculturalism in vogue throughout much of the contemporary left (“everyone has their own values and norms and all are equally valid”) is therefore at least as much of a threat to social democracy as is globalization. Social democrats need to deal forthrightly with the social and cultural divisions that are currently roiling Europe, for example, and insist that all members of society adhere to certain common principles, rules, and responsibilities, even as they push for better integration of immigrants into the societies around them.

What about the United States?

Finally, perhaps the most difficult question comes from Jim McNeill: What does my analysis have to offer discussions of American politics? I a bit unsure on this, frankly. The United States is so different from Europe—in ways problematic for social democracy as I understand it—that left communitarian coalitions are inevitably more difficult to construct here and critiques of capitalism have much less resonance. Yet I also believe that with the right political leaders and enough will anything is possible. The basic social democratic insight—that markets are good for generating growth but need to be checked and channeled when they threaten broader societal goals—lay behind the New Deal as much as it did the postwar settlement more generally, and is just as relevant to the increasingly globalized world we live in today as it ever has been. What remains missing is a way to frame this in such a way that it resonates with America’s particular values and history and generate policies that are well suited to the particular American political and social context.

¹ Although one should note that it was precisely where social democrats were in power the longest that the political economy moved furthest in a social democratic direction. On this point see Gøsta Esping-Andersen, Three Worlds of Welfare Capitalism, and Evelyne Huber and John Stephens, Development and Crisis of the Welfare State.