Friday, 9 August 2019

The social democratic moment

Some time ago I tried to point out that, despite the endless barbs being hurled in his direction insisting he was barely disguised Marxist, Trotskyist, Stalinist etc., Jeremy Corbyn was and is a mainstream social democrat. In fact, much more so than other people who proudly ordain themselves social democrats.

This wasn’t in order to denigrate him from a far left perspective. Social democracy, like all political traditions, has flaws but also distinct characteristics that mark it out from other allegedly ‘progressive’ currents such as liberalism. At this moment in British politics, the distinctiveness of social democracy needs to be loudly proclaimed. It isn’t liberalism and if it is drowned in a sickly sea of liberalism, this once-in-a-generation chance to alter the British political system will be lost.

A century ago

Historically, social democracy emerged in the early 20th century as way of advancing the interests of the working class through the Parliamentary system. This was to mark it out from syndicalism – before the First World War a massive movement – which dismissed the Parliamentary system altogether and advocated that workers themselves should democratically control industries and workplaces. This is why the ‘Labour’ party was created – to represent the interests of labour (i.e. workers) in Parliament.

Social democracy also, in time, broke from orthodox Marxism in that it sought immediate improvements in workers’ conditions, rather than waiting for some inevitable collapse of the capitalist system. And it also repudiated Leninist revolutionary socialism. Social democrats upheld the Parliamentary, ‘democratic’ system, fought (fitfully) for universal suffrage, were consciously reformist and rejected ‘democratic centralism’ – the idea that an authentically Leninist (or Trotskyist) political party should work out an agreed line and then rigidly enforce it amongst its membership. In theory, social democratic parties should be democratically run and encourage free and open debate.

To reiterate, there are flaws within social democracy. The lack of interest in the fate of the capitalist system, or how it is changing, means that social democrats rather blindly assume the state can always be deployed to improve people’s conditions when those conditions also depend on capitalism functioning well. In the context of spiralling climate change, the connection between healthy capitalism and prospering social democracy is a glaring contradiction. Admittedly, social democrats do sometimes envisage life beyond capitalism, a hazy end point called ‘democratic socialism’ which is always seemingly in the distance and evasive of exact definition.

Moreover, the commitment to democratic, Parliamentary means papers over, not just Leninism, but also other forms of democracy as well, such as syndicalist ‘workers’ control’ and democratic councils, or soviets, the directly democratic, face-to-face forms of government that, as pointed out by Hannah Arendt, appear spontaneously in every revolutionary outbreak and aspire to permanence.

After neoliberalism

However, there are also valuable features in social democracy which now need to be brought to the fore. One of these is – or should be – a commitment to class politics and to represent the interests of its class. Whereas in the 1950s and ’60s this class element meant social democracy was fundamentally a conservative force, protecting post-war gains, now – in the aftermath of decades of neoliberalism, privatisation and the privileging of the power of employers over employees –  to be true to itself, it has to be radical.

One instance is collective bargaining. At their height, collective bargaining agreements covered over 80% of workers, but now they apply to just over a fifth of the workforce and less in the private sector. In that they presuppose negotiations with trade unions, they symbolise a recognition of the rights and dignity of labour, in contrast to the current attitude of treating workers like civilians in an occupied country – constantly under suspicion and surveillance. Plans for a resuscitated Ministry of Labour – which will spearhead attempts to revive collective bargaining across the economy – are redolent of Ernest Bevin’s reign as Minister of Labour in the Second World War coalition when for the first time in British history a rough, day-to-day industrial democracy prevailed.

This highlights an integral difference between social democracy and liberalism. Social democrats – in common with liberals – should be in favour of democratic norms, equality before the law and human rights. They should be implacably opposed to the ethno-nationalism of Donald Trump or the hard-right culture warmongering of Boris Johnson. But social democrats have to be about more than this.

Without practical rights and popular organisations that mediate between government, powerful institutions and ordinary citizens, democratic norms are just formal and empty (which isn’t to say they are without value) and can easily be co-opted by wealthy interests. For example, the introduction – by current Liberal Democrat leader Jo Swinson – of fees of up to £1,200 for attending employment tribunals is something no social democrat can ever countenance because it assumes, in time-honoured liberal fashion, that the formal, theoretical right to justice no different to the practical ability to access it.

This acknowledgement that the formalities of liberal-democracy and abstract human rights are insufficient can lead social democrats into interesting areas. It can lead them to attempt to democratise the economy and contest the divine right of capital to rule in the ‘private’ sphere of the economy. To be sure this is not inevitable. Historically, there are numerous occasions when social democrats have been mind-numbingly unimaginative and cemented the rule of bureaucracies and managers. Famously, Herbert Morrison (Peter Mandelson’s grandfather coincidentally), as deputy Prime Minster in the post-war Labour government, insisted that the newly nationalised industries be run in a top-down bureaucratic fashion – much like the private companies they superseded – with absolutely no concession, beyond the rights of trade unions, to the right of workers to have any say in how they were run.

The other social democracy

But there is another social democratic tradition – call it more radical social democracy if you want to – that believes in socialisation, not merely nationalisation and wants to open up both public and private enterprises to the influence of citizens and workers. This can be seen in post-war demands from some trade unions that nationalisation equate to a rough economic democracy, the Institute for Workers’ Control in the 1960s and the 1976 ‘Lucas Plan’, a blueprint to transform a weapons’ company into a worker-controlled firm, producing for social need.

Internationally, this current in social democracy can be discerned in the 1976 ‘Meidner Plan’, the Swedish endeavour to create ‘wage-earner funds’ that would accrue a steadily rising proportion of private company shares, eventually coming to own the firms – and thus most of the economy – outright. The plan was belatedly introduced in 1984 but in extremely truncated form (a ‘pathetic rat’ in the description of its original author, economist Rudolf Meidner).

Now this other social democratic tradition is plainly where Shadow Chancellor John McDonnell resides. His Inclusive Ownership Fund (IOF) echoes the Meidner plan, though with the caveat that a maximum of 10% of company shares can be transferred to the workforce. The ‘right to own’ proposal, which will give the workforce the right of first refusal to buy a company if it is sold, dissolved or floated on the stock exchange, is another example. Services to be nationalised – for example the Royal Mail, and the rail and water industries – would not be handed over to civil servants or imported private sector managers to run but would be governed – in part at least – by workers and service users.

Erstwhile doubts about the record of social democrats in government are appropriate here. As the Swedish case above shows (and it is far from alone), proposals are one thing but the actuality is quite another. Even Theresa May wanted to place workers on company boards before the idea was quietly shelved because of opposition from the CBI. France and Germany both insist on worker representation at board level but the effect is negligible. Moreover, a criticism of Employee Stock Ownership Plans (ESOPs) in the US –  which are akin to McDonnell’s IOF and ‘Right to Own’ schemes – is that they boost productivity and wages but do not entail real participation, a classic social democratic fudge regarding the ‘right to manage’.

If and when a left-wing Labour government is elected, its plans will immediately rub up against the interests of the ‘big end of town’ (as the City of London was called during the New Labour years).  Whether they will then be diluted to ‘pathetic rat’ status is impossible to say. Britain’s business sector is heavily financialised and used to – in terms of internal management – entirely getting its own way. Much will depend on whether the power and reach of trade unions is transformed. In a classic social democratic country such as Norway a limited form of industrial democracy – a joint management model which gives workers’ representatives co-determination over company decisions – can apply because managers and owners accept trade unions as legitimate, in fact essential, parts of the negotiating landscape. Such acceptance is thoroughly alien to the mind-set of British business and there will be immense resistance to any change in the balance of power.

The watershed of Brexit

Clearly one question social democrats now cannot bypass is Brexit. The current Labour party position – implacable opposition to no-deal whilst proposing to negotiate its own deal which it then puts to the country in a referendum including an option to remain – is, in my opinion, the best compromise from a bad situation it didn’t create or desire. Many politicians, including Ed Miliband, Nick Clegg and Vince Cable, voted for the referendum and promised to respect its outcome.

However, social democrats, in particular, cannot be agnostic about the government of the EU. In its core institutions – the Council of the European Union, the European Commission, the European Central Bank and the European Court of Justice (ECJ) – the EU embodies a liberal philosophy anathema to social democracy. Deriving most strongly from German ordo-liberalism, this approach assumes that appointed ‘experts’ and judicial ordinances should have priority over democratic impulses. Laws are mainly made by the Council of the European Union (ministers from member states) and interpreted by the ECJ. It is no accident that classical liberal Friedrich Hayek advocated a pan-state single market – many years before its actual creation in Europe – as a way of protecting the free market from the meddling of democratic governments. The fact that many European social democrats have tamely accepted this liberal settlement shows nothing more than the bankruptcy of European social democracy.

The dilemma for the Labour party is that its ‘soft Brexit’ policy (membership of the customs union, close relationship with the single market etc.) almost certainly presupposes acceptance of many of the laws and directives that accompany EU membership. In at least two areas – state aid and public monopolies which don’t permit outside competition – there will be conflict with the priorities of a social democratic Labour government. In whichever of the two states Britain may be in (continuing as an EU member or the halfway house of Customs Union membership) the only coherent option for a social democratic government is to welcome the conflict, refuse to give in to penalties in the form of fines or law suits and attempt to widen the dispute to other member states. Remain and Rebel as opposed to Remain and Reform.

In Britain at the moment a social democratic Labour party faces two adversaries. One is the hard-right government of Boris Johnson committed to job destroying free trade deals, breaking free of the regulations that irritate entrepreneurs and fermenting a culture war. The other comprises liberals in each of the three main parties who – peculiarly undisturbed by years of austerity that have stripped public services to the bone and the conscious cruelty imposed on benefit claimants and sick and disabled people – wish that the last three years simply hadn’t happened. The answer is not reactionary conservatism or status quo liberalism. Social democracy – for all its flaws – approximates to one. If not now, when?