Times Change
A Quarterly Political and Cultural Review
Autumn 1998 Contents
Landscaping Europe
Donald Sassoon
European social democratic parties today exhibit a degree of convergence unprecedented in European history. They are the leading parties of the left not only throughout western Europe, but also in most of central and eastern Europe. Adopting similar policies, they are enjoying unprecedented electoral successes. If the German SPD is returned to power, it will be the first time that the left is in power in all four largest countries of western Europe. But, before celebrating, one must examine this convergence. Firstly, the parties have all abandoned, in words as in deeds, the prospect of a post-capitalist end goal, adopting instead the idea of 'reforming capitalism'. This is, of course, what they have been trying to do for more than a century.
Many of these parties talk of regulating capitalism. What they are not discussing is how to control it. It is remarkable how little control has been achieved in all the years in which the left has been in power. Successful in removing the distribution of certain services from market relations in order to distribute them according to political priorities - health and education being the most obvious - they have not been able to manage capitalism in the sense of deciding its direction and how its yearly surplus should be invested.
Nevertheless the reform of capitalism (in the sense of 'civilising' it) is essentially a European achievement. Other successful forms of capitalism (such as the United States and Japan) have not had to put up with a political system heavily influenced by socialism. Today many anti-socialists argue that the main problem with European capitalism is having to compete under the restrictions imposed by the European left. The argument has made inroads within the left itself; thus, although social democrats are clear about rejecting end goals, they are not as clear on what to do with European capitalism.
A second feature of convergence lies in the increasingly-similar organisational forms of the social democratic parties. Some of the most successful were strong, tightly organised parties with a remarkably large membership. I am thinking of the German, Austrian and Swedish parties and the Italian Communists. This kind of party, with its dedicated activists, its alternative institutions, its own publishing houses, newspapers and schools, is in serious difficulty if not crisis. Instead we have parties with light structures, dominated by leaders who interact directly with a vast electorate via the media.
A third source of convergence is the attitude towards European integration. Once almost universally opposed, this position has gradually been reversed. Now the mainstream parties of the left tend to be on the Euro-enthusiastic end of the spectrum. The same can be said, with virtually no exception, of the post-communist parties of eastern and central Europe.There is some convergence also around traditional social democratic values, such as full employment, though the phrase is less frequently used. The fact remains that all the social democratic parties are in the forefront of the struggle for the creation of jobs. Another traditional point of convergence is the protection of key aspects of the welfare state, particularly in its universalism. The party least likely to hold on to this idea of universal benefits is probably the British Labour Party. But we can see from recent events, such as the Budget, how complicated it is, both technically and in terms of popularity, to abandon the universal system and adopt the American position. European social democrats are still welfare universalists.
Finally, in spite of everything, the trade unions have a preferential relationship with the social democratic parties in virtually all of western Europe. That relationship may be less friendly than in the past, but trade unions are not neutral. Their preferred interlocutor remains the leading social demo-cratic party.But what of the problems? First, the Atlantic Alliance. The Alliance expanded southwards to include Spain, but there are still a few western European countries which are out, though inside the European Union: Ireland, Sweden, Austria and Finland. Virtually all eastern European parties want to join. It is almost impossible for any party seeking office in eastern or central Europe to campaign against joining the Alliance, which is seen as providing security and legitimacy.
Personally, I always thought this expansion of Nato disastrous: probably the worst political decision made at the end of this century. Of course I sincerely hope to be quite wrong and that it will not be the cause of a deterioration in the relations between the Russian Federation and the rest of Europe. But I see no great benefits. It could get worse, as excluded countries feel under greater pressure to join in. Lithuania, Estonia, perhaps even the Ukraine might thus eventually want to extend the boundaries of Nato-Europe. This might force Austria, Sweden, Ireland and especially Finland to review their role. Accepting the inevitability of Nato expansion, it is vital to rethink its role. What is it about, what should it do, what relationship should it have with the Russian Federation? What should be the relationship between Europe and the USA?The second problem concerns differences over European integration. All social democratic parties accept the principle, as increasingly they accept the idea of a single currency. Some countries, however, are not convinced and will not enter in the first wave. But it is difficult to imagine Sweden, Denmark or Britain staying out for very long. Greece will be out, but wants to be in, and Pasok claims that they can be in by 2002.
The problem is that the single currency is only one aspect of the future of European integration. There is a key dispute over the role of the European Central Bank. Should the Bank be interventionist; should it be completely independent; who will make the appointments? Should it simply follow the line of fiscal rectitude and look after inflation, or (as the French suggested but lost, partly due to the British and partly the Germans, represented by the Christian Democrats) should the Bank also look after unemployment?
This will remain an area of difficulty within Europe because one of the almost inevitable effects of the single currency, even for those who are positive about it as I happen to be, is that it will create a situation where less-competitive areas will suffer increasing unemployment. Therefore a single market backed by a single currency will have to develop certain structures for repairing the damage which occurs to these areas. That implies a continuous cession of sovereignty to a centralised body able to allocate resources. There will not be a moment when we will stop and say, 'We have reached the point where we will not cede any more sovereignty.' Within a single country, the definition of the legitimate area in which the state may intervene has always been part of 20th-century political debate. I see no reason why an equally vociferous debate, which will see left and right divided in some way, will not occur within this strange beast the European Union, which cannot be called a state and which cannot be called a federation. This will go on.
One needs, therefore, to develop realistic policies on connections between the political arms of the EU, the Bank and other economic institutions. Always a supporter of increasing the powers of the European Parliament, I am not backtracking on that. But it is now unrealistic to see the 15 countries giving up powers to the European Parliament in any significant way. So we will have to find ways in which the increased power of the Council of Ministers is held in check. The flow of power is now as follows: national parliaments give power to their own ministers, who do almost anything they like in the Council of Ministers, constrained at most by the Commission and European Parliament and perhaps by their own public opinion. The national parliaments are completely devoid of political power. One should examine how transversal connections can be established and strengthened between national parliaments.
Then there is the issue of the welfare state. Although virtually every welfare state in Europe is undergoing some form of crisis and everybody in Europe talks about the 'reform of the welfare state', the so-called 'welfare problem' differs from country to country. It is all about how not to spend money, of course. But where the cuts should be imposed differs because welfare states have developed differently. For example, in Italy the big debate is on pensions. Italian pensions are extremely generous, although very unequal, while there are relatively few lone mothers. In the UK there is an extremely high rate of divorce and a high number of single mothers. In Holland, the rather low level of unemployment is partly due to the high number of disability pensions.
The other difference is to do with regulation of the labour market. Much has been written about substantial differences between the British Labour Party and the other social democratic parties, particularly the French, over the issue of labour market flexibility. These differences have been over-emphasised. If anything the direction of the present British Labour government is towards greater regulation: if they were really committed to flexible markets they would not have signed the Social Protocol of Maastricht and would not be talking about the minimum wage. Social democratic parties used to pretend to be more left than they really were. Now they pretend to be more right than they really are.The issue of working hours is also one which divides various countries. The French, Italians and to some extent the Germans, who are more advanced, support the goal of decreasing the number of working hours to 35 a week. There is no great talk of a reduction in working hours in Britain, but the effect of signing the Social Protocol is that this will occur anyway and already many part-time workers in Britain are working far fewer hours than in other countries.
There is also an important difference in the approaches to coalition-building. Nearly all European countries are dominated by governments which are a coalition of parties. Britain is an exception and will continue to be so unless there is reform of the electoral system. On the whole the tendency is to look towards the centre for electoral purposes, but there are probably more instances of alliance between the social democratic parties and parties to their left than parties of the centre. This is clearly evident in France. In Germany, the real issue is not whether the Social Democratic Party is going to win the election, but whether the Liberals are going to lose by missing the threshold of five per cent and whether the Greens will get more than five per cent. So if Germany is going to go to the left, it will have to be under a Red-Green coalition. This would be unprecedented in German history - all previous coalitions with the Social Democrats were always with parties to their right.
In Italy, without the Rifondazione Comunista, the present coalition could not rule. In France, without the French Communist Party, Jospin could not be Prime Minister. So even though social democrats are looking towards the centre, they often must rely on the radical left parties. This does not work everywhere. For example, in Spain, Gonzales looked to the Catalan nationalists and not to Izquierda Unida. But the general pattern is towards looking to the centre, while allying with the left. Even in Britain the construction of a centre-left via a preferential deal between Labour and the Liberal Democrats is occurring at a time when the Liberal Democrat Party, for lack of political space as much as anything, has repositioned itself to the left of the Labour Party on a number of issues.
So what is to be done? This question is difficult to answer because European politics is in a state of transition. Countries are not clear what they want from Europe, nor what Europe's relationship with the United States should be. So it is not surprising if the left suffers an even greater degree of confusion, to the extent that national capital is now more difficult to control. One does not have to accept the globalisation thesis completely to hold the view that an increasingly-large sphere of politics cannot be controlled by single nations.
The left has always said 'we have to strengthen the state, because only through the state can we control capitalism.' When it comes to economic matters the new neo-liberal right is glad to see the end of controls whilst retaining, at the level of the nation-state, a political control seen in terms of law and order, repression of marginalised groups and so on: measures quite compatible with a globalised capitalism. A very authoritarian government can be totally committed to neo-liberal policies. For the left, it is the other way around. They are committed to decentralisation, while at the same time trying to grab something which is escaping. That is a problem. A single market and a single currency will provide for a more relaxed attitude towards European competitiveness.
International competitiveness is not as great a problem for the EU as it is for its separate member states. A large, relatively closed economy will be more like Japan and the USA: their export/import towards the outside is not likely to be greater than ten per cent of GDP. The left can also try to expand rights by entrenching them in the European dimension. This would enable countries which have a high degree of social protection to compete better with others. If Swedish standards were imposed on Italy or Greece it would be favourable to firms in the northern countries, rather than to firms in the southern ones. The southern countries, on the other hand, still have the advantage of lower wages. The wages gap in the European Union is much higher than in the USA. There will be some convergence, but it will be very slow.
The only way to accelerate it would be to increase the degree of centralisation in Europe. There are many obstacles to that. But it means the parties of the left have to speak two languages: the language of decentralisation for things such as democratic accountability and the language of centralisation in others. This is against the current trend in favour of decentralisation, where centralisation is seen as negative.
Then there is the Russian Question. Here we have a very large country, loaded with nuclear weapons, which is in an absolutely terrible state. Obviously the most unstable country in Europe, it is not clear how the problems are going to be resolved. I was not among those who, 15 years ago, feared a sudden Soviet attack on Germany. However unpleasant and undemocratic the regime, it had a government with direction and a foreign policy. Now we are not so sure. To help resolve the problems of the Russian Federation is therefore a European problem. A destabilised Russian Federation will be far more frightening for Europeans than for anyone else, including the United States. The expansion of Nato contributes absolutely nothing to resolving any of these problems. If anything it will strengthen the hand of the communists and nationalists who will say, 'You see, we are now surrounded by a formidable US-led alliance which is expanding all the time. We have to re-arm and rebuild Soviet power.'
The foreign policy issue for the European Union must be therefore how to absorb eastern and central Europe without it being an anti-Russian move, but one that will benefit and profit the Russian Federation. I would compare this to the situation between France and Germany in 1945-47, where the French, once they desisted from dreaming of the destruction of Germany, changed position and said, 'If we can't destroy Germany, we have to create ties of interdependence between Germany and France, so that it comes to be in the German national interest for Europe to be peaceful and thriving.' Now we have to create ties of interdependence between ourselves and the Russian Federation so that the prosperity of Europe is a condition of their own prosperity and vice versa. Few people talk about this; even fewer do anything about it.
Then we have the question of the New World Order and the relationship between Europe and the United States. Here there are significant differences between the British Labour government and the rest of Europe. It was rather disappointing that the UK which, as President of the European Union, should have led the European mediating effort and let the USA play the role of tough cop, chose instead to break ranks and ally itself so closely with the US. There might be a perfectly good explanation for this: perhaps Clinton's help in resolving the Irish question is essential. But it is clear that the US has not yet worked out what its foreign policy interests are, except trying to keep control over all international questions. It follows that the US appears to have set itself against all international institutions which it cannot control completely, from the OECD to the United Nations.
The left must try to strengthen these international institutions without unnecessarily antagonising the US. Anti-Americanism serves no purpose at all. We must attempt to frame a policy of increased international control and coordination which is not anti-American. It is in no-one's interest to force the USA into an isolationist position. It is a large country with enormous cultural weight in the world, a formidable military arsenal and great resources. For a long time to come the USA will have a technological lead which could benefit the whole of humanity.
Smaller parties of the left, Communists, former Communists, left-Socialists and Greens can play a significant role in helping the wider left to re-define a new political agenda. I think their best chance now is to act as parliamentary and electoral pressure groups: abandon the illusion some electoral miracle will ever make them the leading party of the left. They will lose and disappear if they think of themselves as the intransigent defenders of dying traditions. Whether they will be able to find a new and lasting role for themselves is the main problem they face.
Donald Sassoon is author of "One Hundred Years of Socialism"