Social Democracy in the Age of Austerity | Renewal

by Joe Guinan

Democratic wealth-holding can give social democracy a new set of economic institutions and political power bases.

Social democracy at a crossroads

Historians joke that, no matter what the period, the middle class is always rising. In the same vein, social democracy seems perpetually at a crossroads. This may not be surprising, given the revisionist origins and protean political tendencies of a tradition whose leadership has always been prepared to hedge and trim and accommodate to the prevailing political winds. But today, more than a hundred years after the first of the parties affiliated to the Second International won a plurality in a parliamentary election (in Finland in 1907; Anderson, 1992, 307), social democracy may finally be running out of rope. All the main European social democratic parties are facing a crisis, registering at long last endlessly postponed questions about their fundamental purpose and programme. The strategic choices they make now and in the next few years could determine whether social democracy survives as the principal political force on the left or finally gives up the ghost, expiring not with a bang but a whimper and with scarcely a mourner at the funeral.

As with the last great crisis of social democracy in the 1970s, today’s stark choices are being posed as the result of a major economic shift within capitalism: the deep disruption of capital accumulation as a consequence of the crisis in global financial markets unleashed in 2008. With the end of the recent long boom – or rather, long bubble, given that profits were extracted through serial asset inflations in ‘unlikely domains’ such as subprime mortgages via ‘unlikely instruments’ such as credit-default swaps (Sassen, 2011, 21) – social democrats have been dealt a tremendous double whammy. On the one hand, their decade-long strategy of full accommodation to neo-liberalism in order to skim off the surplus for ameliorative social spending has collapsed with the end of the growth upon which it depended. On the other, they have fallen victim to a breathtaking act of political jujitsu.

Read the full article at Renewal.org.

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