Q: What is the difference between a social democrat and a socialist?
A: A social democrat is a socialist who has realised the socialism doesn’t actually work.
A perfect illustration is provided by German Chancellor Gerhard Schroder, the very model of a modern social democrat, who has announced that things must change:
If we want to generate growth and jobs, we must lower those costs that eat into take-home pay.
Financial constraints are not the only driving force behind our reform programme. The reform of the welfare state is also a precondition for the success of future generations. In the past, the main topic of welfare politics was the redistribution of wealth. First, we must remember that wealth can only be redistributed once it has been generated. Second, we should note that redistribution has limits, beyond which mere monetary transfers encourage dependence. Third, elaborate systems of redistribution tend to produce “side-effects” in opposition to the desired results.
Do my eyes deceive me or is this doyen of the ‘Third Way’ demanding tax cuts and warning of the dangers of a dependence culture and unintended consequences? No, I think I am reading it right and if Herr Schroder keeps this up he might find himself being invited to write for the Samizdata one of these days.
And neither is this manful attempt to grapple with common sense a breaking of the ranks or a solo frolic in the fields of sanity because I could not help but notice that it follows hot on the heels of this rather more nebulous and ill-defined attempt from Peter Mandelson to say something along similar lines.
Coincidence? No, I don’t think so. Nor is it due to mere fickle fate that both of these portentious editorials appear in the pages of the Daily Social Worker where messages like this are about as common as gay bars in Riyadh. Now, I’m taking a calculated guess here but I’d say this is all part of a cunning plan to prepare the ground ahead of a big summit on ‘Progressive Governance’ (subtitled: ‘Oh Christ, we’ve been rumbled. What do we do now?) to be held here in London this coming weekend.
Could all these ominous warnings and pleas for an open-mind from the likes of Herr Schroder and Mr.Mandelson be a means of softening the ground for heavy blows ahead? Because to the extent that anything at all emerges from this gathering of professional pick-pockets and incurable busybodies, it is bound to be triumphal, shiny ‘reform’ and ‘new deal’ initiatives of the kind that pretty much herald an end to the welfare-state settlement.
If I am right (and that remains to be seen) then it is obvious that some of the brighter stars in the left-wing firmament have seen the writing on the wall and they know only too well that carrying the 20th Century state-socialist models into the 21st Century is a guaranteed one-way ticket to palookaville.
Wouldn’t it be fun to watch them emerge from their smoke-free rooms next week and jointly announce to their tax-consuming constituents that the booze has all run out, the snacks have all been eaten, the guests are all tapped out and that the party is definitely over.
The german Social Democratic Party originally differentiated itself from its more radical counterparts on the Left in Germany by seeking wokers control of the state through non-revolutionary means. This pragmatic approach continued following the war when the reconstituted party accepted a mixed economy at their 1959 conference.
Social democracy always indicated an acceptance of a mixed economy, sharing private enterprise with a welfare state. It formed the ideology of the moderate Left in the post war period.
Hence, the third way is the warmed up leftovers of ideological vomit that the New Left trod in and smeared in the 1960s preferring the exciting road of ‘identity politics’ to the boring economics of welfarism. When Labour abandoned social democracy under Foot, it became unelectable and moved to a liberal position in the late 90s before swinging back to orthodox social democracy (“tax and spend”) in 2001.
Britain is always a peculiar example since its model of social democracy has been described as warfarism by Ian Edgerton: marrying a welfare state to a dynamic technologically advanced military and vigorous liberal imperialism, ie having guns and butter. One case study is the Royal Air Force, the British were the first armed forces in the world to have a separate command for the air. (RAF Act 1918).
The German economy has been stagnant for 3 years and has been in recession for most of the last year. The problem is that labour market reforms take a long time to work and are socially disruptive – look at the UK in the 80s.
Traditionally the way out of this kind of situation is for the government to print money and engineer depreciation of the currency. The first is prohibited by the EU’s stability pact (and would attract very large fines) and the second is no longer an option without the DMARK.
There is a very real prospect that Germany will go the same way as Japan into a lost economic decade. Right now continental Europe is hoping relatively strong growth in the USA and UK will drag continental Europe along giving time for the reforms to take effect – although don’t bet on the opportunity not being wasted.
If this doesn’t happen (i.e. Anglosphere growth), we may see some difficult years for continental Europe and I personally doubt the Euro will survive.
David Carr:
I’m sorry but I’m not as optimistic as you in this regard. I’ve heard before that the definition of “insanity” is doing the same thing over and over again and getting the same (negative) result. I am sad to say that I would use a similar definition for “socialist”…
It is more likely they are only attemting to repackage the same old (failed) policies with new labels. Terms like “taxation”, “redistribution” and “welfare” will simply be modified to “contributions”, “financial equality” and “employment development” for easier consumption by the (voting) public…
MayDay72 – Yes. Socialism/fascism/communism – the same product with different brand names. We’ll be seeing another new brand name marketed around Europe, but it will be the same old product.
Phil Bradley – I think Milton Friedman gave the euro 10 years. I think we may see it start to crumble within seven years of its introduction and be given up by one or two countries at a time over the ensuing three years. Ten years sounds about right. Personally, I think Germany will be the first out. The Germans were very unhappy about giving up their DM and I don’t think anything has happened to cheer them up in the meantime. It would be interesting to read a post from a German or an Anglo working in Germany …
David,
When I red the quote in your article I was much encouraged because of what it implied. It appeared that Mr. Schroder had accepted that markets must be given the freedom to create wealth, that the “justice” of redistribution must be balanced against its negative effects on wealth creation and that there is no entitlement without contribution. Then I red the full article in the daily social worker and plus ca change…
Turns out that herr chancellor has finally noticed that the German economy had been squeesed dry. Payday is already here and if he does not lower the overhead costs on the economy they’ll go bust on his watch and there won’t even be enough left over to pay HIS retirement.
No I’m afraid he’s not had anything resembling a change of heart, he’s just running scared. Not a very good basis for running a country.
Hello Phil and LibertyBelle – yes, I also have been predicting, since the early 90s, that the euro will be shortlived, to my friends’ general incredulity.
I was in Germany a couple of times this spring. They are resentful about the euro, but have been so deeply programmed to believe they must do what is good for “Europe” that they are at a loss as to how to criticise the euro. They complain that prices roughly doubled because many DM prices were marked straight up to euro prices with the same number during the initial weeks.
David, good post – as ever. I would say that Schroder’s comments on tax are merely a case of a man who has finally accepted that he cannot, any longer, continue on this course without going down as the Herbert Hoover of German politics.
We should remember, of course, that Blair and Brown’s so-called acceptance of the market economy and the ditching of the socialist Clause 4 in the 1990s was not through genuine reflection and intellectual change, but through dire electoral necessity and the impact of globalization. The Left hates globalisation, particularly international capital markets, because financial players have shown a marked ability to punish regimes which impose high taxes, regulations, etc.
That is why leftist writers like George Monbiot have been calling for world government. They believe it is the only way to kill off the free flows of capital between different economic systems.
Personally, I hope Germany sorts itself out in time. We are going to suffer if they don’t.
You know the old joke, “if I’d known I was going to live this long, I’d have taken better care of myself”?
The original Third Wayers have hung on to power long enough to reap the rewards of their policies. Now they have to clean it up or it’s all going to fall apart on their watch.
Socialism, no matter what name it’s masquerading under, is a Ponzi scheme. The first people in contribute very little and reap a huge profit, and the whole enterprise is declared a great success by all! The last people in contribute a great deal and get almost nothing, and the originators of the plot have to hope they’re long gone when that happens.
The US certainly hasn’t escaped this sort of economic delusion, and the current administration is no exception. ‘Compassionate conservatism’ my ass!
David,
There is nothing cunning.
The Guardian are openly running the articles from the latest issue of Progressive as a curtain-raiser to the conference you refer to.
The paper explained that on Monday and every story has had a link to the Progressives site at the foot of it.
There is much to agree with in all the above. One is struck by the general unity of thought. This indicates tremendous intellectual confidence. And while that is in no ways rooted in the current balance at Westminster or anything more than a still very “shot to nothing” optimism for 2004, it is encouraging. The root, of course, is principle. And, quite clearly, that is something the left is still seeking for desperately. They know what it should be but, damn it, the libertarian right, the freedom junkies, have got it!
Actually, now it’s so electable the left has only one insurmountable problem still in the locker. It is equality, particularly the equalities predicated on the notion that all conscious human behaviour is culturally determined. This idea colours and bedevils everything. If they could do away with it the search for a way to help the greatest number of people, which I take to be the true and historic purpose of the Labour movement, would be no harder, for example, than the travails of the right after 1997.
Talking of worries within the Blair camp, has anyone here come across rumours linking Blair to the 100-year government-secret gag supposedly put on documents about the Dunblane shooting and the Dunblane paedophile and killer’s connections to some Scottish politicians?
The imperatives of the electoral landscape require all politicians to make compromises with the voting blocks of the welfare state. The Medicare/Medicaid group is one of the most powerful, because they vote in every primary and election, and woe to any politician who makes too many noises about trimming, cutting, or in any way upsetting Social Security and its multiplying sub-systems.
If you doubt the ferocity of the senior citizen voter, I’ll be glad to introduce you to my mother. Just wear asbestos shorts if you’re going to talk about fiddling with her social security checks, or Medicare coverage.
veryretired:
Yep…the whole Medicare/prescription-drug-benefit issue was exactly what I was thinking of when I first read David Carr’s post…President Clinton’s proposed medical “reform” was largely rejected by both the politicians and the voting public…and now the Republicans are siding with the Democrats to enact exactly what Clinton wanted…only piecemeal (“reform”) rather than in one fell swoop (“socialism)…