Wayne O'Leary

Light at the Tunnel’s End

Like the reports of Mark Twain’s death, the demise of European social democracy has been greatly exaggerated. This year’s elections for the European Union parliament were supposed to mark its finish, with the Continent’s neo-fascists politically running the table and setting the stage for the EU’s dismemberment.

The autocratic hard-right nationalists did make progress of a sort, marginally increasing their representation in Brussels from 20% to 25% and winning party pluralities in France, Italy and Britain. But after five years of predicted Armageddon, their victories were incomplete and anticlimactic. Three-quarters of voters still remain wedded to Europe as an entity; the Eurosceptic project is clearly on hold.

That doesn’t mean all is well. The key to a healthy, functioning EU able to play its proper role in a liberal world order is a revival of the social-democratic political model that created the EU in the first place. Here, the jury is still out, but there are hopeful signs that the demagogic authoritarian “populism” currently besieging the Western democracies may not be the inevitable wave of the future.

There are a number of reasons why democratic Europe is in its present fix. Some of them are historical developments beyond the immediate control of the EU and its member states — the debilitating worldwide financial crash and post-2008 recession, plus the migration movements set loose by the pressures of climate change, overpopulation, and the spread of information technology throughout the Third World.

Nevertheless, a large part of the problem can be laid at the door of the EU itself, a result of two decades or more of shortsighted economic policies and bad political decisions arising from the Maastricht Treaty of 1992. Under this agreement, member nations traded away individual economic sovereignty (fiscal, monetary and budgetary control) in exchange for participation in a common currency (the euro) and a common labor market. The upshot: a transfer of power to market forces, global corporations, and the austerity-minded governing institutions of the EU.

The EU’s membership initially accepted the tradeoff; it was in keeping with the prevailing zeitgeist, whose beginnings can be traced to the 1980s and the triumph of modern conservatism — to Ronald Reagan here and Margaret Thatcher in the UK. Together, the successful Reagan-Thatcher ideological partnership spawned a transatlantic generation of timid, halfhearted leadership on the political left in thrall to the forces of corporate globalization and willing to undo decades of hard-won reforms by their predecessors. This in turn produced the Reagan-lite policies of Democrat Bill Clinton in the US (1992-2000) and the Thatcher-lite policies of Labourite Tony Blair in Great Britain (1997-2007) and Social Democrat Gerhard Schröder in Germany (1998-2005). France’s turn came later under the Socialist Party’s ineffectual François Hollande (2012-17).

The unconscionable shuffle to the political center, disingenuously characterized in each case as “third way,” was disastrous over the long term for both liberalism in the US and social democracy in Western Europe, leading effectively to an endorsement of conservative government. America’s Democratic Party is still dealing with the ramifications two decades later, and in Europe, the abandonment of first principles has resulted in social democracy’s contemporary crisis.

How this all transpired can best be viewed through the experience of one major participant, the Federal Republic of Germany. In 1998, Chancellor Gerhard Schröder, new head of the left-leaning Social Democrats (SPD), the heralded party of Willy Brandt and Helmut Schmidt that routinely commanded half of the German electorate, moved to the right at the instigation of British Prime Minister Tony Blair, another erstwhile leftist, signing a joint manifesto called “Europe: The Third Way.” This neoliberal document called upon Europe’s center-left governments to respond to globalization by severing their union ties, cutting taxes, reforming “rigid” labor laws, reducing welfare programs, and encouraging entrepreneurship, in order to meet the demands of capital markets and changing technology.

Between 2000 and 2004, Schröder complied by introducing his “Agenda 2010,” which included elimination of Germany’s capital-gains tax, a reduction in the bargaining power of labor, an emphasis on low-wage jobs, and a rollback of workplace regulations, plus harsh reductions in social welfare, national health insurance, state pensions, and unemployment benefits. The results were not long in coming. German economic growth slowed to 0.2%, unemployment rose to 10%, economic inequality spiked, and the SPD’s popularity plummeted. By 2005, Schröder himself was out of a job. The Social Democrats, forced to join Angela Merkel’s conservative Christian Democrats (CDU) in coalition as a junior partner, lost 10 million votes between 1998 and 2009, and sank to a 20% share of the electorate, nearly losing their identity in the process.

Similar disasters visited social-democratic parties throughout Europe following the great centrist betrayal. They are slowly working their way back — the SPD has disavowed Schröder’s disgraced third-way program — but as they search for viable leadership, many of their former voters are supporting the Greens or the populist right.

The long return march will necessarily be led by a new social-democratic generation. In France, Benoît Hamon (49), former education minister in Hollande’s doomed government, shows promise. Dubbed “the Jeremy Corbin of the French left,” he’s founded his own party (Generation.s.) and is campaigning on environmentalism and renewable energy, a universal income, the 35-hour workweek, revived unionization, and a tax on automation.

But, surprisingly enough, Europe’s center-left revival is taking place most dramatically on the Iberian Peninsula, where Spanish Prime Minister Pedro Sánchez (47), heading a reenergized Socialist Party, took power in 2017, won reelection in 2019, and recently led a left-wing sweep of Spain’s elections to the European parliament. In the process, he staked claim to being the most dominant social-democratic leader on the Continent.

Sánchez has already reversed conservative welfare cuts and decreed a record hike in the minimum wage (a favored plank in European center-left platforms). Future plans include addressing chronic youth unemployment and inadequate pensions, raising taxes on the wealthy and the corporations, and bolstering social security — all aimed at combating economic inequality.

The Spanish have successfully rolled back EU-imposed austerity, and they’ve done it from the left, not the right — and without the viciousness associated with illiberal neo-fascism. There’s a light at the end of the tunnel. If American voters reject Trumpism in 2020, removing authoritarian populism’s politically pestilent role model, it will only shine brighter.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, August 1, 2019

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