The death of social democracy: greatly exaggerated

On the subject of Brown’s relative pinkness, I read recently that Blair had refused to fund any new investment, or even repairs, for council housing where the relevant association had voted against allowing the sale of houses to tenants. While I’m generally in favour of allowing such sales, Blair’s position seems like the most dogmatic of Thatcherism. It would certainly be a good sign if Brown dumps this kind of thing, and moves towards a more reality-based policy.

Obviously, I’m a long way from the action, so I welcome more information, corrections and so on regarding this issue.

Did Thatcher ban repair of council houses? Evidence?

It’s a pretty good indicator of what’s wrong with “local democracy” in the UK that social housing is called “council” housing but central government controls what the council is allowed to do with it.

I’m confused — does Henry disagree with B. that

social democracy was based on a strong and centralized state
that such state is weakened by federalization, devolution, and supra-national (e.g., EU) forces or ‘globalization’
the processes in #2 need not weaken ‘social democary’ today, and considerable evidence suggests that they do not
regardless of 1-3, the real challenge to social democracy is ideological, not ‘structural’

Also, should we equate ‘social democracy’ with the ‘welfare state’ — it seems that the two are not identical, so that the welfare state as a set of policies and government institutions can grow even if social democracy as more complex complex (sic) of ideas, policies, and political institutions is undermined?

Decentralisation might in one sense or other weaken the taxation capacity (in particular) of European states which provide social democracy but, on the one hand, devolution decentralisation etc that we have seen in the UK and elsewhere in Europe within e.g. Germany avoids all but the most trivial tax and benefit competition between the regions/lander etc, and this is quite deliberate; nor has the supra-national apparatus of the EU weakened either the centralised nature of EU member states or their ability to tax (I use Henry’s words from a recent bloggingheads) the bejesus out of their firms and citizens.

Bogdanor may well have a hidden agenda as you suggest, but I’m not sure his views are completely wrong, much less odd. I don’t get the dichotomy between ideological and structural attacks on social democracy – yes, they are two different things, but haven’t all effective political trends worked on both levels at once? An ideology that does not have powerful forces of the time of one sort or another behind it goes nowhere, and movements that have momentum seem to generate ideologies as needed. Indeed, the sixties rebellion seemed to improvise its ideology as it went, but it was ideological nonetheless.

Are the academic studies you cite, or others like them, available on the Web? It does seem the long-range trend has been against social democracy and similar notions worldwide. That this could be accomplished solely because of the power of ideas seems a bit contrary to how things usually work. The Economist has been crowing for decades about how the international market now has a veto on national welfare state policies, and we know in which direction it is exercised. Are they simply deluded in this?

If Berman’s notion that social democracy and similar movements are directly tied to nationalism, perhaps what liberals (in the American sense) need to face is that they cannot completely oppose nationalism, though they must cure its violent excesses. Vaclav Havel’s dream of a world in which nations are mere administrative districts could work only as a libertarian, not a social democratic, utopia, provided it could work at all. The fact is that social democracy requires people, especially the wealthy, to be willing to make sacrifices for the good of others, often to the point of significant disadvantage to themselves (which is rarely the case for charity). This is not normal human behavior; it is not something people are generally willing to do for “humanity” as such, but are willing to do for smaller groups with which they feel bonded, such as family and friends. To get past family and friends to larger groups requires constructing some basis for larger bonding – race, religion, and nationality seem the biggies, and, of those, nationality is probably the least problematic.

Sorry but “help” was to appear after “supposed.”

John Quiggin and Walt, dearieme is worried about this: “While I’m generally in favour of allowing such sales, Blair’s position seems like the most dogmatic of Thatcherism.”

dearieme takes Quiggin’s comment to imply that Blair and Thatcher not only share similar attitudes but also behaved in a similar manner, namely, by refusing to repair council houses. I don’t read Quiggin’s comment that way, but it’s not an implausible reading.

What martin said. This seems unusually obtuse of dearieme.

As far as I know Blair never “refused to fund any new investment, or even repairs, for council housing where the relevant association had voted against allowing the sale of houses to tenants”. I don’t think it’s possible, under current legislation, for associations to block the sale of houses to tenants. Blair did, however, make money for repairs contingent on council tenants collectively agreeing to transfer management of council housing from their local authority to an ‘arms length management organisation’. See here for more on this.

Shorter Martin Bento: “we need some kind of fertilizer for the fields of social democracy. Patriotic poo is the only sort I’m aware of, but don’t worry: we’ll use a special, non-smelly variety.”

It’s not difficult to post a leeeeeeengthy reply to this pap. I’m slightly appalled that nobody is doing it, to be honest.

One can argue that the centrepieces of libertarian reasoning –on the nature of freedom, on the intrinsic inefficiency of all state interventions in the economy, on the injustice inherent in any redistributive policy, all compounded by their disregard for questions of “security”– just don’t have that much oomph, and that, since they’re the only ones in the right trying to craft their case coherently, social democracy is indeed more resilient than it seems. Our good mates over at The Economist are actually more strident and indignant–and occasionally even conciliatory, in their peculiar way– than smug. There’s a reason for that.

[Incidentally, the old chestnut about Americans being “ideological conservatives and operational liberals (in the North-American sense)” has always struck me as somewhat rubbish. Americans may lean more to the right than others, but the fact that libertarians remain a minority makes the NA-liberalism of Americans more than just “operational”. That this is not widely acknowledged has something to do with conceits of US exceptionality. And who nurtures those conceits? Folks who wrap themselves in the flag, mayhap?]

It’s quite trivial to point out that the provision of social services often occurs at the local and not the national level, and that often the most mixed, cosmopolitan spots like big cities turn out to be more compassionate than the more patriotic hinterlands. Not only is the welfare state based on more than just a sense of solidarity, but solidarity itself need not stem only from nationhood. Living in a specific city tends to be a distinctly more concrete experience than belonging to an ill-defined nation. More generally, “society” and “community” can mean many different things in different places.

Not to get emo or anything, but the line about the need that the “practical ability [of the wealthy] to get their wealth out of the country, or out of the way of the tax man” be limited fills me with a strong sense of ennui. First of all, it is a handy conflation of different phenomena like tax evasion and offshoring, from which very different kinds of states benefit (and tax havens have been around for a long time already, by the by). Secondly, commerce is in principle a good thing (no, really). Its main benefits are manifold, have mostly to do with people from different places meeting and doing shit together, and not necessarily as much with the ghost of Ricardo as most economists would have us believe.

[In fact, the more platitudinous criticisms of globalisation (and not all of them are trite, by a long shot) seem to have as much faith in the “universality” of Econ 101 as your standard Econ 101 pundit. But not all markets are made equal. Certainly not all need unleash “race to the bottom” effects.]

Yes, there is a global wage arbitrage. But even in an environment that would superficially appear more convivial to you “progressive” nationalist types, it would still be easy to exploit it. In a world without a WTO, bilateral mischief between China and the US –or between China and the EU for that matter– would do the trick nicely.

What you’re talking about, obviously, is protectionism. You say you’re willing to “cure” the more violent manifestations of nationalism. But even if you do manage to find some fragrant variety of shit, can you “cure” other people’s nationalism? How do you think that the Chinese would react to an aggressive policy of slapping tariffs on them?

Thing is, Walmart may have Chinese suppliers, but they still sell in the US. If you think, correctly, that the helplessness of labour in China makes a perverse mockery of the notion of “free” trade, have the US government take a hard look at and penalise those companies that buy stuff from sweatshops or indeed set them up. I may be ruining my lefty credentials by using the word, but incentives do matter. Create an incentive among your own guys to create in turn the right kind of incentives in emerging economies. Politically, symbolically indeed, the difference between this and the use of the protectionist blunderbuss is immense.

More generally, trade can be sensibly regulated. But for that, you do need both strong international institutions and states willing to tackle their own internal vested interests instead of mouthing off about the malpractice of foreigners first.

In that vein, one cannot fail to notice that most of those international institutions, most notably the European Community, were founded before contemporary welfare states became fully developed. The intrinsic nature of many of them as factors that undermine social democracy is therefore suspect.

Conversely, Reagan, the Chicago Boyz and their revanchiste policies achieved their successes well before the current wave of globalisation was in full swing. Any talk of “long-term” trends that start with Ronnie and Maggie is in fact suspect. If one starts with the XIXth century one can see that the welfare state is here to stay.

And the implication that the American left is not nationalistic enough is ripe. Martin, you’re definitely a bottle-is-half-empty sort of bloke. Listen carefully to what the main Democratic contenders for the presidency are saying. Pay particular attention to their commitment to the bipartisan consensus on hegemonic foreign policy that has been the norm in Washington since Truman, and their talk of not really leaving Iraq or expanding the military by some 80k/90k grunts and marines. You know that all that money could be spent in more overt forms of welfare, don’t you?

And no, do not pretend for a second that “support the troops” does not follow from the use of the word “nationalism” in the US.

That’s a very scattershot response, so I’ll take things in chunks. I will point out that opening with a fecal analogy is deeply unoriginal and rather dumb. I expect better from you.

The first two paragraphs – the Libertarians lacking oomph, The Economist as more strident than smug, etc. – to the extent that they seem directed to any point, appear to argue that social democracy (and, as I stated, similar notions, as I’m not limiting my argument to Europe) is not really that weak, or has not been much recently weakened. I haven’t argued the former, as it would hinge on “by what standard”; I think the latter undeniable, especially when viewed globally, and applied to all political philosophies significantly informed by socialism (though not necessarily socialistic per se), including social democracy, American liberalism, and public investment and infrastructure centered development in the 3rd world, as it used to be called. As for the Economist, they are sometimes strident, sometimes smug, but when the former it is because they always want to move the Overton window.

I don’t think there is any developed nation where the spending directed towards the social welfare locally is greater than nationally with the partial exception, in the US at least, of public education, which you’ll notice is much under assault, and has many purposes so that it can only in part be considered social welfare. As for cities being more generous than the countryside, there are several other factors here: social programs, especially major ones, are often enacted to forestall or in response to civil unrest. Both the New Deal and the Great Society fall into this category. Cities are much more vulnerable to civil unrest. Also, cities have much more wealth, so the opportunity cost (yes, I think Econ 101 valid within proper parameters) of welfare is less. But the key issue is that rural communities also receive a great deal of welfare that is simply not called “welfare”. Agricultural subsidies are standard in advanced economies. Rural communities usually need and get massive subsidies for their infrastructure; that’s why it took New Deal Liberalism to electrify the countryside, as even as libertarian a writer as David Brin concedes. There was briefly some talk from the “red-staters” that they should stop giving the “blue-staters” so much welfare, until people started to actually analyze the patterns and found out that the rural areas were consistently getting more tax revenue than they were generated, and that much of this was explicitly for the benefit of those communities, rather than the nation as a whole. It may not be called “welfare”, for the most part, but under proper libertarianism it would not exist. I should say I’m not necessarily opposed to all this, but if we’re going to talk about who gets the welfare, well, farmer Joe probably gets more than crackhead Betty.

As for “conflating” tax-evasion and offshoring, I’m not looking at them from the perspective of which states benefit, but from the perspective of the state that loses the revenue, from which vantage point they are pretty similar, though offshoring is worse, as it also removes the taxes on wages, etc. Any comparison between two non-identical things will have points of difference that one can find; this does not make comparisons “conflations”.

To speak clearly of the cost of offshoring is not to deny that commerce is a “good” thing, indeed, in itself, it does not imply a normative position, as praise of commerce does. Evaluating whether, in what ways, and what kinds of commerce are “good” requires a complete account of costs as well as benefits.

What would China do if we imposed tariffs? Develop their internal market. Until very recently, that’s all they could do (now they could also sink the dollar). It’s also what they generally have done throughout their history, so it’s not some weird idea. I’m not opposed to targeting companies rather than nations as you suggest, though it is much harder to enforce; many shell games are possible with corporations. But it doesn’t change the essential point. Why would the person in America or Europe whose livelihood is not threatened by Chinese labor because he is sufficiently well-off make the sacrifices to his lifestyles that foregoing goods made by extremely cheap labor can afford. Whether the blockage is enacted against companies or countries, it will still have a bottom-line effect on what is available at what price. If this person is an employer, said activity works even further against his interest. Moving the protectionism from the national to the corporate sphere does not change the equation.

As for chronology, the current wave of globalization did not crest under Thatcher and Reagan, but it certainly accelerated under them. The 80’s was when the West lost key industries like consumer electronics and key components like semi-conductors. If you want a historically sensible point at which to date the current wave of globalization, I would pick the breakdown of the Bretton Woods system by Nixon, which gave the market power over currencies themselves, one of the key structural attributes of the new globalization. However, the oil shocks and other problems of the 70‘s, as well as institutional and cultural inertia, stopped the opportunities created by this from being fully exploited till the 80s. BTW, speaking of the moral conditions that make social democracy and such possible is not equal to advocating protectionism or other polities. There are tradeoffs to any policy, and this is a framework for looking at the tradeoffs.

Comparing the point at which the European Community was “founded” to that at which the welfare states were “fully developed” is slamming one hell of a thumb on the scales. A three nation free trade zone was founded after WW2, but the European Union was not “fully developed” until Maastricht, to the extent that it is fully developed now, that is. European welfare states, OTOH, can trace a pedigree at least to Bismarck, for whom they were directly tied to nationalism.