Tuesday, September 16, 2014
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European Social Democracy’s Powerless Power

At first glance, European social democracy appears to be in crisis. Gordon Brown’s slump in the United Kingdom; the brutal shock of Spain’s economic downturn; the difficulties of renewing Socialist leadership in France; the collapse of the center-left coalition in Italy; and severe infighting within Germany’s SPD: all point to social democracy’s seeming inability to seize the opportunity – which the current financial crisis should present – to exert greater influence.

But the simultaneous occurrence and high visibility of these problems is less significant than they appear. Mistakes or clumsiness in governance are not exclusive to the left: Belgium is paralyzed by the threat of break-up, Austria is still looking to cement an unlikely conservative coalition, Poland is struggling to find a steady balance for its numerous reactionary impulses, and the French president is hitting record lows in terms of popularity.

Two factors help to explain current European uncertainties. First, there is the economic and financial crisis that we are only slowly overcoming. Second, there is the way in which the media are covering it. The combination of the two is, I believe, behind the feeling of powerlessness that is now affecting the whole of Europe, and that may appear to characterize social democracy in particular.

In reporting on the crisis, the media have placed too much emphasis on finance alone, and have paid insufficient attention to the marked slowing of economic growth. But it is the economic slowdown that renders all developed countries less resistant to the financial shocks resulting from the sub-prime problem and from the mixed loan packages that are then used to dilute the risks attached to sub-prime debt. Indeed, the combination of banking uncertainties, slower growth, and the heightened risk of underemployment and casual labor creates the political weakness now visible in the UK, Spain, Italy, and elsewhere.

Herein lies a real ideological problem. The second half of the twentieth century witnessed the victory of the market economy over the administered economy. The left, which had previously looked to Marx, lost its bearings. Even social democracy, which, particularly in Scandinavia, was an excellent regulator of capitalism, found itself muted in the controversy between Keynesians and monetarists, and, throughout the developed world, the monetarists won. Today’s accepted wisdom is that markets are optimally balanced whatever their state, meaning that no government intervention or regulation would be efficient or desirable.

The current crisis is severe punishment for that immense intellectual error. Not only is the decline of previously accepted social and financial regulations reflected in the relative, but important, drop in wage income as a percentage of GDP – and therefore consumer spending – in all developed countries in the last thirty years, but also the deliberate abolition of controls allows the banking sector to do as it pleases. Still, to judge from most media coverage, the parallel sub-prime and packaged loan crises, which are paralyzing global finance, are entirely attributable to banks’ “immorality,” and are in no way due to systemic failure.

Simply put, deregulation, privatization, reduced public services, and refocusing corporate management on earnings – all this suits too many people. As a result, the political battle to reintroduce a sense of general interest – of rules and balance – will be long and hard. What is also clear, even if it is not as well recognized, is that this battle will be primarily intellectual in nature: legitimacy must be given back to the notion of having certain ground rules and public regulatory bodies.

This should be the task for social democrats – but that is where the shoe pinches. We social democrats can no longer fight such battles, because the problem is not only ideological, but also cultural. The media are no longer a commentator, but a participant that has hijacked politics with imagery. Either by accident or design, the media choose only those battles that offer the finest spectacles: clashes of personalities, violence and repression, struggles over national identity, and disputes about moral and sexual attitudes. For the contemporary media, technical controversies about policy hold no interest, because the audience for them is limited.

For example, in preparation for its next congress, the French Socialist Party has succumbed to this reality. We already know that there will be media fireworks, but there will be little talk of economic regulation. The case of Spain – where a competent and respected government is bearing the full brunt of a financial crisis that began elsewhere – is identical. Instead of focusing on the crisis alone, it is fidgeting in the face of the media. Anything that threatens government stability sells newspapers and advertising space, while complicating any resolution of the underlying problems.

Quite simply, a system in which the media behave this way places not only the economy, but also democracy, at risk.

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