European Social Democrats in Crisis

The crisis was supposed to herald the demise of global capitalism. Yet across Europe, the left has been losing elections.

The 2008 financial meltdown was supposed the herald the demise of global capitalism. “We are all socialists now,” declared Newsweek famously early in 2009. Yet across Europe, socialists and Social Democrats have been losing elections while the right appears to be doing well championing freer markets and austerity. Whatever happened to the left’s revival?

Writing for The Nation, Eric Alterman ponders “the twilight of social democracy.” He identifies Muslim immigration as one of the forces that undermined solidarity and cohesiveness which are so pivotal to maintaining a strong welfare state. “People,” he writes, “do not generally appreciate the opportunity to be forced to subsidize, through tax and transfer policies, the lifestyles of those they deem to be different from themselves.” That may be true but it doesn’t explain why leftist parties haven’t done better in elections recently. It’s not as though Europe was suddenly overwhelmed with immigrants two years ago.

It’s clear where Alterman misses the point when he mentions “free-market absolutism” and “xenophobia” in the same sentence and suggests that they’re part of a single phenomenon. That’s hardly the case. There are certainly nationalists on the political right which appeal to lower class anxiety about the future and the unknown. In Denmark and the Netherlands, these parties are even in government. But socialists on the far left appeal to the same group of people who fear that their jobs are being “stolen” by foreigners, whether they’re from Morocco or in China.

The crisis has only hardened the anti-globalist sentiment of traditional workers’ parties. It doesn’t matter whether they’re on the far left or on the far right. Protectionism is on the rise in France, whether it’s in the form of socialism or the Front national. Britain’s Labour Party has abandoned the Third Way just as its French counterparts have, evidenced by its election of Ed instead of David Miliband to lead it in opposition.

The economic downturn has shaken Europe’s welfare states to the core, forcing governments all over the continent to cut in social security expenditures. The stereotypical disgruntled populist voter doesn’t particularly like that though. It’s why the Front national in France and Geert Wilders’ Freedom Party in the Netherlands are also staunch defenders of their countries’ public health care systems and opposed to raising the retirement age.

Traditional conservative and liberal parties on the other hand favor a much smaller government and appeal to voters who are fed up with state interventionism. At the same time, they are careful not to push austerity too far. Britain’s David Cameron won’t ever privatize the National Health Service. Sweden’s John Fredrik Reinfeldt is cutting government bureaucracy but positioning his Moderate Party as the guardian of the welfare state. Mark Rutte in the Netherlands is scrapping health subsidies but shrinks from introducing labor market reforms which even some leftists parties support. They represent a new right in Europe, one that is much more centrist than their rhetoric would suggest.

The left and their union allies are marching against austerity nevertheless but even in the heavily indebted economies of Southern Europe, conservatives are on the rise. The Portuguese elected a right-wing government this summer and hardly anyone expects the socialists to do well in next year’s parliamentary elections in Spain. Indeed, there’s hardly a leftist government left in Europe!

The reason isn’t just xenophobia. While social democrats were cheering the alleged demise of capitalism, they never realized that their own welfarism was bankrupt and increasingly unpopular with middle-class voters, including small businessowners and young urban professionals who were hit hardest by the recession. They don’t just resent paying taxes to subsidize the lifestyle of people they deem to be “different” from themselves; they resent paying taxes to subsidize anyone else’s lifestyle.

What many social democrats still fail to appreciate is that the very individualism championed by their predecessors two generations ago — which improved women’s and gay rights and alleviated families of the burden of caring for their elders — was ever at odds with their appeal to “solidarity.” It’s just that globalization in the last two decades — with improved information technology and a heightened cultural awareness and interaction — has accelerated the decline of the welfare state and made it plain to nearly everyone that it’s unsustainable in its current form.

It seems to voters, even those who support a public safety net, that at least liberals and conservatives recognize that mounting health-care costs, unaffordable pension commitments and overregulation are problems that need to be addressed whereas the left insists that they only beg more taxes. (Alterman mentions a global tax on millionaires.) Once the state accounts for almost half of the economy however, a majority of voters probably believes that it’s taxed enough already and time to start cutting back on spending instead.