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The Future of Social Democracy

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Ideas and Society lecture: Does Social Democracy have a future?

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Matt Smith:

I'm Matt Smith and you're listening to a La Trobe University podcast.

For those who follow politics, it's clear that social democratic parties of Australia, specifically the Labor Party, have seen better days. Lead by Julia Gillard, the Labor Party only won the last election due to a preference deal with the Greens. At the state level, Victorian Liberal Party lost government after 11 years in power and tough times are ahead for its Queensland and New South Wales counterparts.

This trend is echoed around the world and it's one that Wolfgang Merkel has been watching closely. A professor in Political Science at Humboldt University and director of the Berlin Science Centre, Merkel has acted as an advisor to social democratic parties and he can see significant change takes place.

Wolfgang Merkel:

Social democracy is a party, no longer a movement, which is situated at the centre left of the political spectrum. It distinguishes itself from conservative or liberal policies very much in strengthening and developing the welfare state and still tries to have a certain grip on the business cycle if it comes to economic policy.

Matt Smith:

How has social democratic parties fared in recent events?

Wolfgang Merkel:

They fared pretty bad especially if it comes to elections. They lost continuously votes in the mid-70s across Europe. There is a stable decline. There's also a decline if it comes to party membership, which is quite an important thing for social democratic parties because they trusted their membership in acquiring new voters. So, the lost of membership is something quite problematic for social democratic parties.

Let me tell you one thing. They do not only lose voters and members but the remaining voters and members are becoming quite old. They are above the age average of the society and this is also something which has to be explained for a political party which is very much looking into the future.

Matt Smith:

In Australia, we had the situation where we had a hung parliament and a social democratic party—the Labor Party, is only just holding on to powers result. In Victoria, closer to home, the Labor Party just got voted out after being in government for 11 years, they lost the election.

We've had a situation in the US where there's been a big backlash against the Obama administration and he lost more than 70 seats in the midterm election. Is this sort of thing being replicated as well in Europe? And it seems like quite a sudden trend to suddenly happen. Why is this sort of backlash happening?

Wolfgang Merkel:

Let me first try supporting with regard to the United States. Obama and the Democrats are not the classic labor parties and social democrats. They are quite relevant differences between the two. And also midterm elections have their own iron laws and there are more or less each of the government's loss in midterm election. I would not simply extrapolate this until the end of the legislature.

If it comes to Europe, we have the picture that in only three countries, social democratic parties are still in government. This is in Portugal, this is in Spain and this is in Greece. And the irony is that in those country, the economy is going so bad and the financial crisis did hit the countries so severely that the governments now have to pursue an austerity policy which is very much new liberal and cannot really be described as social democratic.

Matt Smith:

Is social democracy still relevant?

Wolfgang Merkel:

It is still relevant, especially after the two Neo-liberal dictates, then Washington Consensus of 1990. What we have seen during the last 20 or even 30 years, it's an increasing gap between the rich and the lowest strata of the society, and this tremendously hurts the social cohesion of our society. And social cohesion is quite important for a pleasant situation where people trust each other.

So, with the increased inequality we had observed during the last 20, 30 years within the world of the OECD countries, it is important that there is a political force that breaches these gaps, that brings the lowest strata into the economic and especially into the political game.

Matt Smith:

So what it is about the social democracy then? And in Europe, I think, that this would be the most relevant, that they're not attracting voters. What is it about them thats making them go to more conservative parties?

Wolfgang Merkel:

One has to see politics and electoral politics follows certain cycles. So in the year 2000, social democratic parties perform much better in elections. So in many European governments, you will have social democratic parties as the dominant actor.

Just to remind you when the situation in the UK, where Labor stayed 12 years or 13 years in the power. In Germany, they stayed for seven years in the Red-Green Coalition and then in the Grand Coalition, additional four years.

And in democracies, there are cycles. If you are more than two legislatures in government, then there's a normal turnover. Even as I have argued before, social democratic parties lost voters. One also has to see that this is not an irreversible decline. Very much then, is relevant for the future and the fate of social democracy that they can form a project, that they can form a narrative, that they can develop policies which give speck of voice to the people and especially the lower third of the society.

Matt Smith:

Is that a vote that they're not attracting?

Wolfgang Merkel:

Yes, this is one of the problems. They no longer attract these votes. There are two major reasons for it. One is simply, if people are not employed anymore, are not actively integrated into the labor market, they very often and soon trap out from political participation. They do not vote anymore. This is one reason.

And the second reason is that the new emerging right-wing center for big populist parties in most of the European countries, having a major appeal unto traditional industrial workers which have been in the past; also the traditional electoral clientele of social democratic parties. So they got new competitors on the right wing as well, and one I should add there is also an emergence of left-wing socialist party. So they have new competitors at the left.

The political space of social democratic parties has reduced during the last 20 years and most of the social democratic parties did not find up to now a promising recipe to act against this trend.

Matt Smith:

What about the ideals of social democracy? How is that changed in the current economic and political climates?

Wolfgang Merkel:

It has changed, but I have to say, it has to change. The circumstances are changing, the environment is changing, and globalization changed a lot of the parameter for pursuing economic policies. If social democratic parties would not have changed, they would have become completely anachronistic and they would have committed, so to say, a political collective suicide. And if you look back to the whole 20th century, the history of social democracy is a history of sticking to basic values but revising ideas, revising instruments, and reformulating strategies in order to adapt to the new circumstances.

However, they haven't been successful in all areas and I just mentioned globalization, these reduced quite significantly the room of manoeuvre if it comes, for example, to financial policies, if it comes to the regulation of the financial markets here. So social democrats have to make up some of the mistakes which we have seen in the so called third way politics as Tony Blair and New Labour performed it exemplarily.

Matt Smith:

Do you have any examples of some changes that social democracy have gone through?

Wolfgang Merkel:

Yes, one I already mentioned. This is a deregulation of the financial markets. Another one would be a deregulation of the labour market. So, it's now easier to hire and fire people. The protection of the workforce is certainly is not as the same as we have seen in the 1960's and 70's. And if it comes to the welfare state, there is also a change to observe according to my point of view and a positive one. I don't consider this deregulation of financial and labour market that it's very positive. But if it comes to the welfare state, New Labour, the chairman of SPD, were very much in favour of activating people, bringing people back in into the labour market because we know from many sociological research and analysis that only if people are engaged in the labour market, they really are integrated into society.

So the old-fashioned, conservative passive welfare state to provide generous benefits but not bringing people back into education, not bringing back into work is something which was not socially very just.

Matt Smith:

How has the European Union affected social democracy in Europe?

Wolfgang Merkel:

Mainly it had and still has a negative effect. The European integration as positive it is in political terms, in economic terms it was very much neo-liberal market driven. It was all about to dismantle the economic that rears for creating a single domestic market, for creating a free manoeuvre of trade of services, financial services.

So, the impact was more negative than positive and the social democrats did not succeed in using the European political space in order to set up social minimal standards in having the positive impact on education. So, there are still European space not utilized by social democratic parties. This is something they have to do in the future.

Matt Smith:

What changes do you see in social democracy in the future?

Wolfgang Merkel:

If you talk to the political leaders of the social democratic parties, they are very well aware that many policies cannot be cited on the national level alone. It is as a political scientist would phrase it "a two-level game". They have to use the room of manoeuvre on the national scene, but they also have to engage in supranational regime building in treaties, in courts where sovereign states come together decided on policies which can, in times of globalisation, be only decided on the supra or transnational level.

Matt Smith:

In Australia, our Labor Party survived and managed to win the election after a while with a hung parliament by forming an alliance with the Green Party here. Is that a good strategy or does it show a lacking? Do you see that is a sign of change? I mean, I know that the same thing happened in Germany where there is a Green/Red alliance for many years?

Wolfgang Merkel:

I think this is certainly a strategy for the future. There are many similarities between both movements and the Green movement or the Green parties can complement the traditional, social policies pursued by the social democratic parties. So I'm very much in favour of it but this is not without risk for social democratic parties.

If I take the example of Germany, where the social democratic party as a senior partner, formed a coalition with a junior partner, the Greens between 1998 and 2005, at the end, one could say that the Greens benefited much more from this kind of coalition. Because they had the easier portfolios, they did not have to deal with the social affairs, they did not have to deal with the financial matters. So they had these environmental and more post-materialist portfolios and they perform pretty well there. Many voters especially from the better educated middle classes then went from social democracy to the Green Party. This is something the Labor Party in Australia has to be keen of. But I do think there is no alternative at present for this kind of coalition. However, such a coalition is much better than the social democratic party now would presume to become a super Green Party.

It will not gain this kind of appeal among the voters, so therefore is better to form coalitions. However, the social democratic parties will probably lose votes to the Greens but the progressive camp, if I may name in this way, the Red/Green progressive camp can pursue politics and policies which lies at the heart of social democracies. So I don't think at present there's any alternative to this kind of coalition.

Matt Smith:

Do you think it stops becoming social democracy at some point?

Wolfgang Merkel:

I would not say that this cannot be named anymore social democratic. And if you ask me, by the way, I don't care. The content matters. The content will be something which is looking into the future. The 21st Century is not the industrial century of 100 years ago. Therefore, the 'greening' of social democratic politics is important. There may be one weak term. This is not social democratic policies, but this can't be the social democratic party as dominant actor in progressive politics

Matt Smith:

How did you get involved in social democracy and what it is about it that drew you to it?

Wolfgang Merkel:

The involvement is basically an academic one. I started to research central-left government or social democratic governments in Europe can make a difference compared to conservative government if it comes to economic policy and social policy. But later on, I became a bit involved in politics as such. I am now in advisor in an international committee to the Prime Minister of Spain. I'm in a so-called Basic Value Commission of the German Social Democratic government. I was sometimes involved in advising Blair and also Gerhard Schröder in Germany.

Matt Smith:

What sort of advice are you giving during times like this?

Wolfgang Merkel:

We were talking especially about what social justice can mean in the 21st Century. Here, there is still a debate going on and many European social democratic parties, so to say, to adapt concepts of social justice which were very much only ex-post compensation of inequalities in order to have policies which give the people the same life chances. So education, education, education is probably the best policies in social justice you can pursue and not these generous passive welfare entitlements which we have some time seen in the past.

So in order to modernize the core concept of social justice, the social democratic parties were indeed prepared to listen to this kind of advices.

Matt Smith:

Are you a believer in social democracy?

Wolfgang Merkel:

Just to describe myself, I'm not a member of the Social Democratic Party and I am glad that I am not a member. As an academic, it is good to have some distance. I am favourable of some of the policies especially if it comes to social cohesion of the society, especially if it comes to social justice. I don't think neo-liberals or conservatives can really guide our societies into the 21st century because they are neglecting this important social cohesion, and without social cohesion, the societies will fall apart. This is what Margaret Thatcher once called that she doesn't know what society means. She only knows individuals. But this would be disastrous for the future.

If there is now a vote of no confidence against social democratic parties, this is to some extent true. But I mentioned before that one should not think in politics about irreversible declines, one should think much more about cycles. Albert O. Hirschman, a famous political economist of the 1960s and the '70s, was talking about a pendulum ,which swings from the pursuit of private interest back to public passion. So we should think about more this kind of cycle than thinking about now everything goes away from social democrats and the social democratic parties and social democracy is just a matter of the past.

Matt Smith:

So, it still has a role but at the same time change is needed?

Wolfgang Merkel:

It has a role and I mentioned one change which is needed, it should be a greening of social democratic politics and policies. They should more, again, engage in educational policies. They should open the upward mobility in our modern societies and they should come back to the issue also to regulate of the international scene, at least to some extent, the financial markets which caused such a disaster during the last two years.

Matt Smith:

That's all the time we've got for the La Trobe University podcast today. If you got any question, comments or feedback, you can send us an email at podcast@latrobe.edu.au. Professor Wolfgang Merkel, thank you for your time today.

Wolfgang Merkel:

It was a pleasure to be here.