Research Paper on Revisionism and Social Democracy

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I. Introduction

II. Democratic Revisionism

III. From Revisionism to Social Democracy

IV. Social Democracy Defined

A. Developing the Welfare State

B. Reforming Capitalism

C. Expanding Democracy

V. Future Directions

I. Introduction

Even by contemporary standards, the 19th century witnessed dramatic changes in Europe’s political, social, and cultural life. Revolutionary upheavals, the slow advance of democracy, scientific breakthroughs, and new ideologies challenged the status quo. But the most dramatic change resulted from the steady advance of capitalism in what Polanyi (1944/1962) called The Great Transformation. What was most revolutionary about capitalism was the creation of a market for human labor that subjected workers and their livelihood to the law of supply and demand. Stripped of the protections that traditional communities, with their networks of obligations and duties, had provided, workers were now compelled to become wage laborers in factories, mines, and farms, where harsh working conditions, low pay, and frequent unemployment clashed with capitalism’s promise of progress and prosperity.

Utopian socialism, with its emphasis on public ownership of economic resources and an egalitarian vision of society, was one response to capitalism. Robert Owen in Great Britain and Charles Fourier and Pierre-Josef Proudhon in France, among others, invented various socialist theories in the first part of the 19th century. Some even tested their theories in communal experiments in the United States, Great Britain, and France. In 1848, a new brand of socialism burst on the scene with the publication of The Communist Manifesto in Paris in 1848. Its authors, Karl Marx and Friedrich Engels, claimed to offer workers a scientific theory of socialism that promised to liberate workers and lead them toward the eventual creation of a communist society based on the ideals of justice and equality. These ideas were articulated more fully in their later writings and in their political work with trade unions and working-class political parties all over Europe. Initially, these parties had espoused various socialist viewpoints. Most called themselves socialist or social democratic, labels they used pretty much interchangeably. But by the 1890s, most of them had committed to the Marxist version of socialism, and by 1914, virtually every European country had at least one Socialist or Social Democratic party.

The widespread adoption of Marxist socialism by labor unions and political parties is due in large part to the important role that the German Social Democratic Party (SDP) played in Europe’s working-class movement. With close to 20% of the vote in 1890, it was the largest party in the Second Socialist International, a loose alliance of more than 20 labor and working class parties that was active from 1889 to 1916 throughout Europe. The SDP’s leaders, August Bebel and Karl Kautsky, did much to adapt and popularize Marxist ideas for a larger audience. In fact, by the 1890s, their interpretations of Marxism were read more widely than Marx’s own works, and they were translated into many languages. They also closely collaborated with Friedrich Engels, who had become the guardian of Marxism after Marx’s death in 1883. So it is ironic that the major challenge to the Marxist theory of socialism—Revisionism— came from the inner circle of the very party that had done so much to promulgate Marxism in Germany and in Europe.

II. Democratic Revisionism

Eduard Bernstein, a largely self-educated Marxist intellectual, contributed the most to the development of revisionism. It stands for a vision of socialism that revises and partially rejects Marxism in favor of a more gradual movement toward socialism embedded in democratic values and institutions. In 1872, Bernstein became an eager convert to Marxism. He quickly won the respect of party leaders, and in 1878 he joined many of them in exile, first in Switzerland and then in London. The German government had passed the so-called Anti-Socialist Laws banning socialist meetings, publications, and all organizing activities for the next 12 years. Bernstein was chosen as the editor of Der Sozialdemokrat, a monthly journal serving as the official publication of the SDP in exile.

During his time in Switzerland (1878–1888) and in London (1888–1900), Bernstein attended all the important underground meetings of the party, and he met and worked with the most brilliant and dedicated leaders of German and European social democratic parties. Among these was Karl Kautsky, an Austrian social democrat who established himself as a skillful ideologue who worked closely with Bernstein and August Bebel, the leader of the SDP. Bernstein published many articles that drew on the German government’s repression of political opponents and the continuing economic depression (1873–1896) as evidence of the validity of Marx’s predictions about the deepening crisis of capitalism and its eventual downfall.

In 1888, the Swiss authorities forced Bernstein and several other Social Democrats to leave, and at Engels’s urging, Bernstein moved to London. Subsequently their relationship grew very close, leading Engels to confide in a friend that in matters of strategy and theory, he trusted Bernstein as much as himself. Eventually he chose Bernstein and Bebel as the executors of his will. In 1890, Bernstein’s position within the SDP underwent considerable change. Due to the expiration of the Anti-Socialist Laws in Germany, there was no longer any rationale for the publication of Der Sozialdemokrat, given its purpose of maintaining the party’s intellectual life in exile. Instead, the party offered Bernstein the position of London correspondent for two other publications, Neue Zeit (New Time), edited by Kautsky, and Vorwaerts (Onwards), based in Berlin. To Bernstein’s delight, these assignments proved much less time-consuming than his previous job. However, he lost an influential platform for influencing intraparty debates. This became important in 1891, when, boosted by its impressive showing in the 1890 elections, the SDP prepared the draft for a new party program to be debated and adopted at the party conference in Erfurt. Known as the Erfurt Program (n.d.), the document included Kautsky’s theoretical part, hewing closely to Marxist principles, and a practical part, written by Engels and Bernstein, summarizing an action program calling for democratic reforms and improved labor laws.

To Bernstein, the two parts of the program were entirely unrelated: Although the theoretical section focused on the inevitable collapse of capitalism, consistent with Marxism’s claim of a scientific analysis of the present and future, the practical part listed reforms such as universal suffrage, the right to free expression, effective worker protection laws, and legal equality for women, to mention only a few. Many non-Marxist reformers supported these proposals. Oddly, the abolition of private ownership of economic resources—the core feature of Marxism—was not included. The program perpetuated the sharp division of earlier programs between revolutionary theory and reformist practice. If the goals of the working class could be advanced by reform, was it necessary or even desirable to call for the abolition of capitalism? Was it necessary to “modernize” Marxist theory? These questions increasingly troubled Bernstein.

In London, Bernstein maintained a busy schedule as a writer, journalist, and publisher. His wide-ranging social and political contacts included labor leaders, intellectuals such as Beatrice and Sidney Webb (leaders of the British Fabian Society, which advocated a gradual move toward socialism), artists such as William Morris, Christian Socialists, and Left Liberals, among others. Bernstein became a regular contributor to current affairs journals such as The Nation and Progressive Review. In many ways, he felt quite at home in London, enjoying the long tradition of free speech that allowed for lively public debates without fears of censorship, as in Germany. But he also longed to return to Germany to influence debates within the SDP. He felt these debates were essentially frozen as the party leadership continued to cling to the three pillars of orthodox Marxism it had embraced earlier. What were these pillars?

First, there was the Marxist belief in the collapse theory. As Marx and Engels (1848) wrote in the Manifesto, deeper economic crises will eventually lead to revolution as the workers rise up against the system that enslaves them. Or, more eloquently, “What the bourgeoisie, therefore, produces, above all, are its own gravediggers” (Marx & Engels, 1848, chap. 1, para. 53). Hence, the collapse of capitalism is inevitable. The second pillar of communist orthodoxy is the immiseration theory. Accordingly, as capitalism develops, workers are increasingly reduced to appendages of the machines they operate, living only so long as they have work, and working only as long as they can increase capital, or profit (Marx & Engels, 1848). As more and more workers become paupers, they are joined by impoverished craftsmen, even the middle class, to the point that there are only two classes: the ever more desperate working class, or proletariat, and the ever more powerful capitalist class, or bourgeoisie. Third, Marxists emphasize historical materialism, the notion that social and political developments are determined by economic forces. Far from being just an idle philosophical quarrel, the insistence on historical materialism suggests that political reform is of limited usefulness. Instead, the working class needs only to wait for capitalism to reach its final crisis, at which point workers will rebel as they “have nothing to lose but their chains” (Marx & Engels, 1848, chap. 4, para. 11).

Bernstein was increasingly troubled by these tenets. His critique focused on practical difficulties as well as philosophical inconsistencies. The practical difficulties loomed larger and larger as the progress of democracy in Germany and other European countries presented the representatives of working-class parties with several dilemmas. Should they take advantage of the possibility of improving working-class lives through legislation, or was parliamentary work just a diversion from the revolutionary struggle? Would reforms blunt the wave of the coming revolution? In Germany, a group of Social Democratic legislators called the practitioners advocated that tangible improvements for workers should be pursued, a view not shared by the leadership. Should Social Democratic legislators seek to build alliances with nonsocialist parties to advance the cause of reform? Here too the party insisted that such alliances were not desirable unless the Social Democrats were in control, a situation that was precluded by their minority status. In several countries (France and Italy, among others), Socialists had been invited to join nonsocialist governments. Should they accept the invitation for the sake of opening up more avenues for meaningful reforms? This question deeply divided Socialist parties, to the point that by World War I, not a single Socialist legislator had, with the approval of his party, participated in a government.

On a philosophical level, Bernstein doubted the Marxist claim to have discovered a scientific explanation of past and future history. He took issue with this claim when he pointed to several discrepancies between Marxist predictions and current reality. Marxism, he insisted, was not a rigid doctrine set in stone by its authors. It is the duty of their followers, he argued, to remove contradictions and to develop it further. In this sense, revisionism was a call for fresh thinking as opposed to “everlastingly repeating the words of [the] masters” (Bernstein, 1911, p. 26). So in 1896, Bernstein published the first of several articles in which he challenged what he saw as rigid dogma and offered “revisions” to put social democratic and socialist theory in Germany and Europe on a firmer footing. Three issues were paramount in these articles. First, Bernstein (1896/1988a) urged the parties to begin discussions of what socialist and communist societies were to be like. Instead of assuming “an abrupt leap from capitalist to socialist society” or “a decisive victory of socialism,” there should be serious thinking about the transformation (p. 74). How was it going to come about? Was revolution the only avenue toward socialism? Or were there other avenues leading through democratic governance in which a stronger socialist party would create the conditions for socialism?

Second, Bernstein (1898/1988b) argued that it was increasingly unrealistic to expect the inevitable collapse of capitalism. Instead, he suggested that capitalism was resourceful and capable of adjusting to avoid its self-destructive tendencies. This was true even in Germany, he argued, where the end of the long depression of 1873 showed an invigorated economy that created new wealth among broader groups of society. Of course there would be future crises, but most likely they would be contained. In his third assault on old dogma, Bernstein rejected the immiseration theory. Based on his analysis of Prussian census data, he argued that society was becoming more, not less, differentiated into various middle-class groups. The peasantry too was holding its own. This argument had important practical implications for Bernstein. Since the nonproletarian groups in society were not about to disappear, it might become useful and even necessary to look to them as potential allies for reformist causes. Taken together, these three criticisms form the core of revisionist thinking.

Published just prior to the SDP’s party conference in Stuttgart in 1898, Bernstein’s critique ignited a furious debate. Some charged him with creating a full-blown crisis for the party. Others accused him of having caught the “British disease” of embracing gradualism over revolution. Others still, notably the Left Socialist faction and Rosa Luxemburg, chided him for his wholesale betrayal of socialism and called for his expulsion from the party. But most delegates were content to close ranks and affirm the ideological unity of the party and its Marxist dogma, an outcome that was carefully orchestrated by the party leader, Bebel, and Kautsky, Bebel’s chief ideologue. There can be little doubt that their leadership positions would have been in jeopardy had Bernstein met with greater support at the conference.

Later, Bernstein conceded that his challenge of party dogma was perhaps asking for too much too quickly. But he never wavered. Before returning to Germany in 1900, he wrote his revisionist manifesto, The Preconditions of Socialism, or, in its English translation, Evolutionary Socialism (1911), which presented his ideas in a systematic exposition. As socialist works go, it is relatively brief (about 200 pages), as Bernstein wanted it to be accessible to workers as well as party activists. It is important to note, however, that Bernstein’s thinking continued to evolve through the 1920s. He came to disagree with his old comrades about the role of democracy as a mere facilitator of socialism. Democracy, he argued instead, provided the means for a radical transformation of society through the principled and persistent struggle for a more just, equitable world. But democracy was also an end because of its focus on politics as the arena for change. Here socialists could join with other groups and parties, motivated by their common humanity and a vision of a better world, using the power of the democratic state to reshape the world around them (Berman, 2006). This view was strongly rejected by the party elite, which viewed democracy as only a stepping stone, a mere way station toward socialism.

Although never repudiating Marx, Bernstein worked hard to show how his evolutionary-liberal vision of socialism was compatible with Marx. They shared an optimism about a better world without exploitation. But could the steady reformism advocated by Bernstein achieve a radical transformation of capitalist society? This question retained its urgency as later generations of revisionists tried to implement his program. Bernstein was able to pursue his commitment to joining theory and political practice as a deputy in the German parliament from 1902 to 1928. He worked tirelessly to refine his ideas and probe practical, policy-oriented issues such as a more just tax policy, trade policy, and constitutional law, to mention just a few. He also enjoyed considerable public support, especially among trade unions, even though many party leaders remained openly hostile. And his influence spread well beyond Germany. The Preconditions of Socialism was translated into more than 20 languages, and soon there were revisionist factions in most socialist parties. As Lenin, the leader of the Russian Social Democratic Party and an astute observer of developments in Germany and Europe, noted in 1901, “The French socialists have begun, not to theorize, but to act. The democratically more highly developed political conditions in France have permitted them to put ‘Bernsteinism into practice’ immediately, with all its consequences” (Lenin, 1901, chap. 1, para. 5).

Nonetheless, revisionism remained controversial, and none of the major socialist parties formally embraced it before World War I. Several parties, such as those in Italy and France, split over the issue, with leaders such as Jean Jaures in France and Francesco Merlino in Italy heading revisionist parties.

With the onset of war in 1914, Europe descended into considerable social and political turmoil, and socialist unity across nations collapsed as nationalism came to the fore. And even though socialists joined patriotic unity governments in a number of countries, it seems that they were completely unprepared for the war and its aftermath. The SDP in Germany, for example, enjoyed considerable power and electoral support, but there was no socialist breakthrough once the party found itself in the government. Blockage and impasses frustrated the party at every turn. Revisionism remained a contested concept, and the socialist movement was now fractured into the new communist parties that advanced the idea of revolution on the Russian model, traditional socialists clinging to orthodox Marxism in their rhetoric but exceedingly cautious in their actions, revisionists adhering to Bernstein, and pragmatists consumed by the day-to-day struggle without any coherent vision about the future. Nationalist parties emerged as new competitors, and most socialists were unable to develop a viable response. Bernstein and several French and Austrian leaders had argued that workers had national and international commitments, challenging the notion that nationalism was merely a tool of the ruling classes, but this idea was rejected by the orthodox groups.

The first major challenge for socialist parties came in Italy, where the democratic order was threatened by fascism in 1923. Italy’s Socialist parties were not able to muster effective countermeasures. The second major challenge came in 1932 and 1933 in Germany, where the Great Depression that began in 1929 had had devastating economic effects. The national socialist movement, led by Adolf Hitler, and the Communist Party benefitted from widespread public despair. There were revisionist responses to the Great Depression, but they were not implemented. In Germany, the so-called WTB Plan, named after its sponsors, called for 2 trillion deutsche marks to be spent as an economic stimulus for work creation. Trade unions were desperate to give workers some hope and stem their defection to nationalist and communist groups. But the SDP could not bring itself to accept and implement this plan because, in the words of its major economic spokesman, Rudolf Hilferding, it was “not Marxist” (cited in Berman, 2006, p. 114). Ironically, Hitler’s government, coming to power only a few months later, did implement such a plan, with quick results. Another plan, called Plan du Travail (Plan of Work), was proposed by the Belgian Socialist Hendrik de Man, who advocated short-term work creation projects to fight the Depression and a long-term plan to reshape capitalism (Berman, 2006). Going one step further than Bernstein in dropping Marxism completely, de Man advocated that class solidarity give way to social solidarity in a reformist socialism that focused on control of the means of production, not public ownership. The struggle was not against capitalism, he argued, but against particular types of hypercapitalism that exploited workers. De Man’s plan did have some impact in Belgium, Switzerland, the Netherlands, and France, where socialists seem to have understood more clearly that inaction was likely to benefit the radical right and the communists on the left. But it was in Sweden and the Nordic countries that revisionism had its greatest success. Here a tradition of political reform, in combination with effective leadership, provided the seed bed for the implementation of revisionist ideas on a national scale.

III. From Revisionism to Social Democracy

Sweden’s socialist party was relatively young. Soon after its founding in 1889, the Socialdemokratiska Arbetarepartiet (SAP) had embraced revisionism. Marxism was seen as a guide, not a dictate. The party valued democracy as an end in and of itself, and it was not averse to cooperation with nonsocialist parties. Unlike the SDP in Germany, the SAP saw its share of the vote in national elections rise steadily during the 1920s, when centrist and conservative governments were in power. The party honed its message to broaden its appeal, searching for a “third way” between orthodox Marxism and exploitative capitalism. Just before the Great Depression, the party leader, Per Albin Hansson, coined the concept of “the people’s home” to convey the SAP’s desire to transform Sweden into a society where citizens cooperate on the basis of equality and helpfulness, without the economic barriers that separate the privileged from the neglected groups (Tilton, 1990). The aim was not to eliminate capitalism but to transform it through incremental reforms. Nationalization of industries played a rather small role in the SAP’s vision. The most crucial part of its promise was the effort to counteract the massive unemployment created by the Great Depression. A small group of party leaders decided to promote employment creation through government spending, not unlike the plans that were discussed in Germany and in Belgium and, a little later, in Great Britain. But the Swedish plan was homegrown, and it seems to have bolstered the party’s appeal. In 1932, after 3 years of economic turmoil, it garnered almost 42% of the vote. A year later, it forged a successful worker–peasant alliance with the Agrarian Party that gave the government a firm base of support for the implementation of its program: employment creation programs financed through government investments and welfare state policies such as housing assistance, aid to large families, paid holidays, and indexed pensions, to mention the most important ones. By 1936, unemployment had come down considerably. This created the basis for an agreement between labor and business that gave both sides what they wanted: Labor achieved collective bargaining rights, and business got a code of regulations for the management of industrial relations. This agreement, called the Saltsjobadan Agreement, effectively regulated labor–management relations for the next 40 years.

By 1940, Swedish socialists no longer talked about class conflict or nationalizations. They had learned to use the power of government to tame capitalism. This success was re-created in Norway and Denmark. They succeeded in showing that governments can bring order to chaotic economic markets, with benefits that are broadly shared. They took revisionism further than others, and in the process they laid the foundation for what would become the West European idea of social democracy after World War II.

IV. Social Democracy Defined

Like revisionism, theories of social democracy developed out of the practical experience of West European socialists seeking to correct the shortcomings of capitalism and democracy and promote a more just society. Practitioners like Hansson from Sweden and scholars like Britain’s T. H. Marshall (1950) focused on the idea of citizenship to develop a new paradigm for a democratic society. Citizenship, they argued, is three-dimensional: There are (1) civil rights such as legal equality, (2) political rights, and (3) social rights. The latter confer economic security and resources that empower citizens to benefit from the opportunities privileged groups have enjoyed all along. Put differently, without social rights, the promise of democracy remains hollow. Beiner (2001) describes social democracy as a uniquely European response to the question of what full democracy requires. What is needed, according to social democratic theory, are three crucial components: economic policies that regulate capitalism, social welfare programs that moderate inequality, and democratic governance. In addition, there is agreement that social democracy cannot be defined as a fixed set of rules and requirements. As capitalism changes, so must social democracy. Based on the Swedish experience of the 1930s and 1940s, social democracy must adjust to changing circumstances without abandoning its core principles.

At the end of World War II, Europeans had little faith in the regenerative strength of capitalism. In fact, fresh memories of the Great Depression and of wartime deprivation made capitalism outright unpopular. Communism was even more unpopular, and parties that called themselves socialist or social democratic took pains to distinguish themselves from the ruling communist parties in the Soviet Bloc countries behind the Iron Curtain. Communist parties in Western Europe were largely excluded from any participation in governments. Socialist or social democratic parties did enjoy considerable support, with at least a third of the electorate behind them. Only in Sweden, Norway, and Great Britain were they able to govern alone; elsewhere they joined coalition governments with other parties. Business groups were politically weak, especially in countries like Germany, Austria, and France, where they had collaborated with National Socialist governments. This finally opened the door to the kinds of reforms that had a distinctly social democratic flavor.

A. Developing the Welfare State

In the immediate aftermath of World War II, the need for policies to improve living standards was overwhelming. Most countries already had a rudimentary system of social policies in place—namely, old age pensions, health insurance, and occupational injury insurance. But now these policies were expanded. The National Health Service in Great Britain, beginning in 1947 and which created a universal health care system, is a good example of the social democratic approach to the welfare state. It is a noncontributory welfare program: All citizens are entitled to free care financed out of general tax revenue, regardless of their earnings or personal wealth. This entails some redistribution of resources as those with higher earnings and paying higher taxes contribute more than those with lower or no earnings (i.e., children). Not surprisingly, such policies were most widely adopted in countries where Social Democrats enjoyed a long period of political power, notably in Scandinavia, Austria, Belgium, and the Netherlands. A strong, unified trade union movement also helped boost welfare programs. In most countries, new welfare-state policies were less generous and less comprehensive. But even conservative governments could not ignore the widespread demands for more benefits, and most responded, occasionally stealing the socialists’ thunder. But in these countries, benefits were more likely to be means tested rather than universal, or, with pensions, for example, benefits were closely tied to earnings. The most important benefits include public pension systems, national health care programs, unemployment and disability insurance, housing subsidies, maternity and child benefits, and parental leave programs. While there was some retrenchment in welfare spending during the 1980s and 1990s, social democrats and trade unions resisted more drastic cuts. Today social spending amounts to almost 30% of gross domestic product in Sweden and France, with average levels of 24% for the 27 countries belonging to the European Union. In contrast, social spending in the United States amounts to about 15% of gross domestic product (Organisation for Economic Co-operation and Development, 2010).

B. Reforming Capitalism

An expanded welfare state requires economic growth. What ideas did socialists and social democrats have for the reform of capitalism to reduce its inherent inefficiencies and inequitable outcomes? Here historians of the postwar era see little systematic thinking. By and large, parties on the left side of the political spectrum advocated piecemeal reforms to improve capitalism. One such reform was the nationalization of key industries. This was quite popular in the immediate postwar years. In France, many leaders on the left and right advocated nationalization and economic planning as tools to resurrect the country after the devastation of World War II. Utilities, transportation, and a few banks and telecommunications were nationalized and continue in public ownership today. In Great Britain, nationalizations were more extensive and included railways, coal mining, utilities, and the iron and steel industry. These industries were reprivatized during the 1980s. Social democrats and some conservative parties in Germany and Austria proposed nationalization of basic industries, but in Germany at least, this was vetoed by the United States, which was one of the four powers that occupied Germany until 1949. Today there is a good deal of skepticism about the effect of nationalizations. Did they contribute to economic growth or full employment? As the nationalized industries were required to be commercially profitable, it is uncertain whether private management would have been much different. This is probably one of the reasons that Scandinavian social democrats did not nationalize any industries.

A German innovation did have a distinctive social democratic theme, however. Between 1951 and 1955, trade unions were able to muster enough strength to persuade the conservative government to pass three laws establishing a form of industrial democracy, or codetermination. The most radical of these laws applies to the coal and steel industries—dominated by companies that had closely collaborated with Hitler’s policies. Here, elected employee representatives sit on the companies’ supervisory boards, and the board of directors includes a labor director whose selection requires union approval. Two other laws extended a watered-down participatory component to other large firms, where employees elect a works council that can negotiate a number of issues (excluding wages) with management. This law was revised in the 1970s to strengthen employee participation rights. Although the laws fall short of establishing genuine industrial democracy, in which employees and managers meet on an equal footing, they are generally given credit for ushering in a long period of social peace or social partnership, a term that remains very popular in Germany (Helm, 1986). Codetermination also supports the ideal of social citizenship, giving employees a say, albeit limited, in the management of businesses. Modified versions of codetermination have been implemented in a number of other European countries.

By the 1960s, European economies had stabilized, and social democratic debates about restructuring capitalism seemed less urgent. There were new labels for Europe’s postwar capitalism, such as the “mixed economy,” or the “social market economy,” but they mostly described old wine in new bottles. A number of economies were close to achieving full employment, meaning the jobless rate did not exceed 3% of the labor force. Wages were rising, and workers enjoyed greater social protection through expanded social benefits. Many social democrats became “realists” and focused on maintaining their electoral appeal. They transformed themselves from working-class parties to “people’s parties” in order to more effectively reach out to white-collar voters. The emphasis in party programs shifted from reforming capitalism to the promise of doing a better job at ensuring growth and full employment than conservative or centrist governments would. In Great Britain, Anthony Crosland’s (1956) book, The Future of Socialism, reflected this new approach. Socialism, he argued, comes gradually. In order to deliver equal opportunities and more social spending, governments require economic growth, which can be sustained with the help of the countercyclical economic policies proposed by John Maynard Keynes (1936/2007) in 1936. This change to realism was most visible when the German SDP debated its new Godesberg Program in 1959. All references to Marx, class conflict, and the collapse theory were dropped. Socialism was now defined in ethical terms, inspired by traditions ranging from Christian ethics and humanism to classical philosophy. Bernstein’s vision finally triumphed in the party he had worked so hard to reform! The new program retained the optimism and belief in progress that Bernstein shared with Marx. The economic climate of the 1960s seemed to validate this optimism. Some referred to this decade as “the golden age of capitalism,” with double-digit rates of economic growth, rising incomes, and higher social spending.

But the next decade changed all this. With dramatic rises in oil prices, inflation, and unemployment, social democratic goals seemed to become elusive again. Whereas during the 1960s the conflict with conservatives had been about the distribution of the economic surplus, now questions about government’s role in the economy rose to the top of the political agenda. Conservatives such as Britain’s Margaret Thatcher demanded lower taxes, less regulation, and lower social spending while social democrats argued for an expanded regulatory regime to curtail “excessive” wage growth. There was widespread concern that higher unemployment was due to high wages. The Swedish experience seemed telling. Here, centralized wage bargaining since the 1950s had put pressure on companies to achieve high rates of profit, parts of which went to satisfy union demands for higher wages. This system, called the Rehn Meidner model, also had an equalizing component in that it was designed to reduce wage differentials between skilled and unskilled workers (Sasson, 1995). Beginning in the late 1960s, skilled workers were less willing to accept this solidarity-oriented system. Swedish governments now were in the awkward position of having to persuade unions to accept smaller wage increases. In Germany, the United Kingdom, Italy, the Netherlands, and Austria, governments faced the same dilemma. The new watchwords were incomes policy or concerted action, with social democratic governments using their political capital to persuade unions and employers to moderate wage demands and price increases. This new approach worked, at least in the short term, but sooner or later, unions, business groups, or both rebelled against its regulatory constraints. More often, business groups bolted, attracted by conservative and centrist parties that promised to reduce regulation in order to unleash market forces.

In the 1980s, social democrats found themselves and their ideas in a real crisis. The welfare state was under pressure from conservative governments eager to reduce taxes and government spending. Full employment seemed to be a thing of the past, and trade union rights were curtailed in a number of countries. The social democratic share of the vote in national elections remained at about the same level as in the 1950s. There were significant losses only in the United Kingdom and Germany, but there were also gains in France, where the first leftist government took office in 1981. Social Democrats gained power in Spain in 1982, the first government of the left since the 1930s. Even so, social democrats lacked confidence in the future. The Socialist International started the postwar era in 1951 with the promise to abolish capitalism. In 1989, its slogans focused instead on freedom, social justice, and solidarity. There was a general acknowledgment that social democracy would have to be reinvented.

C. Expanding Democracy

Beginning with Bernstein, social democrats had come to embrace democracy as an end in itself. In the post–World War II era, they set out to change formally democratic societies into societies enjoying real democracy, bolstered by economic security and wider opportunities for all. When Willy Brandt, the leader of the German SDP, campaigned in 1969, he called for a government that would “risk more democracy,” a slogan that had broad resonance among younger voters and intellectuals. Few were certain what this might entail. But the next two decades brought social democrats in Germany and elsewhere face to face with a new antiestablishment culture. Anthony Crosland (1956) had warned the left 15 years earlier that sooner or later, it would have to deal with totally new cultural issues such as concerns for civil liberties, personal lives, and leisure activities. In the 1970s and 1980s, this came to pass in several areas, of which this research paper discusses three. First, in a number of European countries, educational opportunities had remained relatively unchanged. Children from working-class families found themselves, not excluded from, but severely underrepresented in, institutions of higher education. Social democrats promoted primary and secondary schools that would be less reliant on early selection into different educational channels. In Great Britain, the notorious “11-plus exams” came to be seen as a barrier to talented working-class children whose development did not quite fit into the prescribed schedule. In Germany, access to the academic high schools was liberalized during the 1970s. Comprehensive schools, more years of required schooling, and greater access to universities and higher education were, as Sasson (1995) put it, “the standard left-wing position on education” (p. 393), and it became a common feature of Europe’s educational systems. Similarly, social democrats were more interested than conservatives in expanding university access for women and, later in the 1990s, for immigrant children.

The second cultural issue took social democrats by surprise: the rise of the women’s movement. Socialism had a long tradition of calling for sexual equality. Marx and Engels had argued against traditional family structures that “enslaved” women. In 1891, the Erfurt Program endorsed women’s right to vote. But initially, social democrats were taken aback by the radicalism of some new feminist demands, especially with regard to sexual mores. The legalization of abortion became a central issue, and starting with Great Britain, legalization eventually reached the southern European democracies, where Catholic institutions were still strong. After legislation supported by Italian socialists and communists, Italian voters ratified legalization in a 1976 referendum. Economic issues were also on the feminist agenda. Unequal pay, occupational segregation, and lack of child care were now debated and eventually addressed, more or less adequately, by parliaments, employers, and courts. Equally interesting is the gradual arrival of more and more women in politics. In 1975, only the Scandinavian countries could boast double-digit representation of women in parliaments. Today, the European average stands at 21%, and in the Scandinavian countries it is 41% (Inter-Parliamentary Union, 2010). Some social democratic parties adopted goals or even quotas to increase the number of female candidates for office. It is interesting to note that many conservative parties, after initially hostile remarks about the recruitment of “unqualified” women, felt obliged to follow suit, usually with less stringent requirements. The really important question is how the arrival of a critical mass of female legislators affected the business of legislating and governing, but this is addressed in another research paper.

The environmental movement posed the greatest challenge to social democratic parties. Given the fact that environmentalists usually call for more stringent regulation of industry, one might assume that social democrats had little trouble integrating them into their political fold. But this was definitely not the case. While all social democratic parties eventually wrote environmental party platforms, this may have been too little, too late. Many green movements were ideologically divided between “realists and fundamentalists,” between rural romantics, futuristic visionaries, and other factions. In the 1970s, green parties emerged in most European countries, and now they are represented in most parliaments. They compete for votes with social democrats but also cooperate with them once elected. The best known example is probably the social democratic–green coalition that governed Germany from 1998 to 2005. Like feminism, environmentalism forced social democrats to question their tradition in order to open up to new issues outside of their traditional ideological terrain.

V. Future Directions

Today, social democrats can claim credit for an impressive list of achievements. Writing in 1993, Przeworski (2001) argued that “the only countries in which almost no one is poor after taxes and transfers are those that pursue social democratic policies” (p. 778). A few years later, Sasson (1995) concurred with this assessment, adding that those countries also championed civil rights and democracy, fighting for the expansion of the right to vote where it was restricted, for the rights of women and homosexuals, and for the abolition of racial discrimination and capital punishment. And the social democratic welfare state may have saved European capitalism during its worst crises in the 1980s and over the past few years. Does it offer the same hope for the present economic challenges, or has it exhausted its usefulness? David Marquand’s (1993) cautionary remarks are even more appropriate for our times:

The capitalist free market is a marvelous servant but a disastrous master. In one of the greatest achievements of the second half of this [20th] century, a few favored societies learned to convert it from master to servant. The danger now is that a smug and vain glorious capitalism will not remember the lesson. (p. 51)

What, if anything, can social democracy contribute to the solution of capitalism’s current problems? There are at least two responses to this question. One view, taken mostly by neoliberal authors, is that the social democratic era is over. Many go further and argue that social democracy has saddled European welfare states with high taxes, sluggish growth, and low levels of innovation and productivity (Steyn, 2009). These critics argue for the burial of the social democratic model of society. Others, notably economic historians and policy analysts, argue that this model is as relevant as ever (Jacobs, Kent, & Watkins, 2003; Judt, 2009; Krugman, 2010). In their view, the social democratic challenge today is threefold. First, it is important to conserve the achievements of the 20th century. When neoliberals call for flexible labor markets, lower taxes, and fewer regulations, social democrats must rally to defend the reforms that humanized capitalism through policies that protect workers with a social and economic safety net. In the context of global capitalism, this is no small task. And it is in the global arena that social democrats confront the second challenge.

As Jacobs et al. (2003) argue, if social democrats want to help shape the capitalism of the 21st century, they must move their struggle to the global stage. Here international corporations have already established a foothold, taking advantage of production sites that offer low taxes, little regulation, and desperate workers accepting jobs without the protections social democrats have achieved. For this reason, social democrats have often demonized globalization and institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization as indifferent or outright hostile to the concerns of working people. The task now is to democratize these institutions and to strengthen their weak regulatory powers to respond to the interests of workers as well as business. This is a huge challenge, and so far only tentative steps have been taken. There are some modest success stories at the level of the European Union, where the adoption of the Social Charter in 1992 established a regulatory structure that gives working people a stronger voice.

The third challenge for social democracy is a moral one. When much of our political discourse is dominated by economism, a single-minded concern with profit, productivity, and growth, a moral critique of the status quo often seems “soft,” well-intentioned but unrealistic. But as all too many people around the globe are experiencing growing inequality, insecurity, and fear, social democracy has an opportunity to confront these fears, to explore options and offer solutions that address them. There is now a global constituency looking for a message of hope, a promise that something can be done about the darker side of global capitalism, that growing inequality and insecurity are not inevitable (Judt, 2009). Can social democracy define new approaches to these problems, approaches that create a new balance between capitalism and democracy?

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