Pamphlet Review: The Strange Death of European Social Democracy

The Political Economy of Social Democracy: The Swedish Collapse, The Danish Mystery, The British Mirage and the German Dilemma by Stuart Wilks-Heeg (South Bank European Papers)

Capitalism is a global system, and has become more so than ever over the last twenty years. This fairly straightforward axiom is just one important factor lying behind the failure of Social Democratic reformism not only to deliver on its pseudo-socialist promises, but also its failure to even manage capitalism successfully on its own terms.

The Social Democratic failure is often couched in terms of a collapse of electoral support, but Stuart Wilks-Heeg argues in this pamphlet that “the primary challenge facing Social Democrats is one of political economy, not one of electoral decline.” In fact, one of the points made most clearly in this pamphlet is that electoral support for the Social Democratic parties has not collapsed but, rather, has begun to fluctuate, often quite wildly, after a thirty-year post-war period of fairly steady ascendancy. Possible reasons for this are put forward in the pamphlet.

The one that Wilks-Heeg spends most space analysing is the collapse of Fordism, both as a method for the mass-production of consumer goods and as an ideological system that included Keynesian economics as one of its components and relied for its smooth operation on what Wilks-Heeg calls a ‘‘class compromise”, this consisting basically of a trade-off between higher wages and higher productivity. This, he says, was the basis for Social Democratic political economy.

Wilks-Heeg seems to be under some misapprehensions surrounding this point. He states, for example, that this class compromise succeeded in “combining productivity growth, full employment, labour peace, welfare state expansion, steady wage growth and greater social equality”. Much of this is no doubt true—except, crucially, “greater social equality”. A rise in wages does not mean an erosion of inequality, particularly when profits rise at a similar or higher rate, a factor represented here by “productivity growth”. While workers certainly did become “better off”, inequalities, including those of power, remained more-or-less the same, the capitalists remaining in charge, workers remaining wage-slaves.

The “success” of Western Social Democracy was largely illusory and certainly very limited as, even in its own terms, it was based on a “class compromise” that was in its turn largely a product of Western capitalism’s ability to keep ahead in global capitalist competition and of the absence of severe economic crisis. When the economies of other nations and blocs, particularly in the Middle and the Far East, began to technologically “catch up”, and when global profit rates fell Western economic stability evaporated along with its hegemony and took the Social Democratic mirage with it.

The shift in international economic/power relations made a qualitative change in Western methods of production necessary, as Wilks-Heeg states:

  “Today, in an era of globalisation, rapid technological change and dramatically enhanced competition, capital has sought greater flexibility and deregulation . . . Inevitably, these changes have disrupted the terms of the class compromise. In order to survive, capital has had to break from traditional relationships with labour and pressured governments to facilitate flexibility and de-regulation.”

In other words, class struggle in the West has gone from a relatively muted affair into a state of open warfare, with the ruling class very much on the attack. In the face of this attack the Social Democrat reformists have simply capitulated, being openly and fully on the side of capital and Union leaders have by-and-large gone with them, apparently regarding themselves (in a time dishonoured neo-Stalinist manner) as simply the industrial wing of the Social Democratic parties, trying to keep the workers in line to facilitate electoral victories for their political masters.

This pamphlet contains much that we would not agree with but, on the whole, Wilks-Heeg presents a very pertinent and interesting analysis of the present state of reformist politics. Sadly, he continues to try and think of ways to rejuvenate reformism, failing to draw the obvious conclusion that social reform is by-and-large a failure and social revolution is both necessary and desirable.

Jonathan Clay