CONSENSUS FAILURE

New Statesman & Society, 2 February 1996

The political philosopher John Gray has just published a pamphlet arguing that social democracy is obsolete. Paul Anderson finds out why

It isn’t easy in Britain to succeed both as an academic political philosopher and as apublic intellectual. But Oxford don John Gray has managed it with apparent ease for more than a decade.

He made his name in his thirties as the most urbane and sophisticated intellectual adherent in Britain of the early-1980s new right – but it was as a critic of its nostrums that he gained his current prominence. In a series of essays in the late 1980s and early 1990s, he moved further and further away from the neo-liberalism he had once embraced. Since he published his book Beyond the New Right in 1993, he has been a regular on the Guardian‘s op-ed pages and a willing participant in all sorts of left-leaning conferences and seminars.

Now, though, the new right’s most articulate renegade has sprung a new surprise. Just when his lazier admirers thought he was safe for Blairism, he has written a tract that consigns social democracy – a term he uses to cover everyone in British politics from Tory wets like Ian Gilmour to Labour left-wingers like Peter Hain – to the proverbial dustbin of history. “The postwar social-democratic settlement in Britain, and indeed in most other west European countries, has ceased to exist,” he says, “and it is now irrecoverable.”

It’s not that he has returned to his new-right past. The argument of After Social Democracy, published this week by the think-tank Demos, is anything but sympathetic to the neo-liberal project: indeed, Gray’s starting-point is the exhaustion of the free-market ideology that gripped Britain in the 19803. His case, however, is that the mainstream left alternative to that free-market ideology is just as worn out.

“The new realities that spell ruin for the social-democratic project are the billions of industrious and skilled workers released on to the global market by the communist collapse and the disappearance of any effective barriers to the global mobility of capital,” he writes. “In this changed historical circumstance, the central economic programme of social democracy is unworkable and social democracy itself a bankrupt project.”

Part of this position is, of course, accepted wisdom even on the mainstream left. Ever since the failure of Francois Mitterrand’s attempt at a radical Keynesian reflationary programme in France in the early 19805, the majority of thinking social democrats have recognised that the mobility of capital now makes it impossible for medium-sized nation-states to go it alone on macro-economic policy. And in the past five years, there has been a growing consensus, on the left as on the right, that western Europe already faces a serious challenge from the “tiger” economies of east Asia and will soon have more competition from high-skill, low-wage former-communist countries.

What makes Gray’s perspective different, however, is his insistence that there is no social-democratic way out. For a start, he dismisses the idea that a federal Europe could act as a counter to the forces of globalisation – the basis upon which most west European social democrats, including the British Labour Party, have backed “ever-closer union” – as “hopelessly Utopian”. “Social-democratic politics cannot be recovered at the level of European institutions,” he says. “Since the Maastricht treaty, Europe has taken a neo-liberal turn. Maastricht’s deflationary consequences make the whole federalist project difficult if not impossible to legitimate democratically – and I can’t see that changing. The idea that social-democratic institutions that have gone into decline at national level can be revived at the level of Europe seems to me to be a mirage.”

He is equally scathing about the idea, common in Labour circles these days, at least partly because of the influence of Will Hutton’s The State We’re In, that western Europe provides the British left with a model of capitalism that it can import wholesale. The “Rhine model of capitalism” is in trouble, says Gray, and in any case it is not really social-democratic. Most important, “it relies on cultural traditions of consensual managerial politics that are absent in the individualist Anglo-Saxon model,” he says.

So what is the alternative? Gray favours an approach he calls “communitarian liberalism”, an idea rooted in the anti-rationalist thinking spelt out in his philosophical work, most recently in the book Enlightenment’s Wake. Like all communitarians, he rejects the abstract individualism of most liberal political theory (which is also assumed by most social-democratic perspectives on social justice): people cannot be understood as atomised individuals but are essentially social beings, rooted in families and communities. At the same time, however, he also rejects the view of more extreme communitarians that individual autonomy is no more than a myth.

“Communitarian liberalism departs from individualist liberalisms in that it conceives of choosing individuals as themselves creations of forms of common life,” he writes in the pamphlet. “It rejects the libertarian view that individual choice must always be paramount over every other human need and interest. It differs from conservative and neo-traditionalist communitarianisms by acknowledging the strength and urgency of the need for individual autonomy. Few of us are defined by membership of a single, all-embracing community, and there is no going back to any simpler, ‘organic’ way of life. It differs from social democracy by rejecting the egalitarian imposition of a single conception of justice in all contexts of economic and social life.”

Gray says that what is most important about communitarian liberalism in public policy terms is its insistence that market freedoms have a purely instrumental value, as a means to individual and community well-being. Where the impact of markets on individual autonomy or community life is disabling, competition must be limited. And where the popular consensus is that fairness demands the exclusion of the market – for example in health-care and education – the market should be excluded.

All of which is fine where there is a popular consensus on what is fair, but what if there isn’t – as with selection in schooling (which Gray favours) or welfare reform, where there is both a growing consensus that the social exclusion created by mass unemployment must be ended and also radical conflict over the best means of doing it? For Gray, there’s no point in appealing to some overarching notion of what is just: it’s a matter of conflicting ideas of fairness battling it out politically, appealing to common sense, negotiating compromises if necessary and resolving issues where compromise is impossible (and there will inevitably be many) through majoritarian decision-making.

On the future of the welfare state, for example, Gray argues that common-sense notions of “just deserts” rule out the idea of a citizen’s income as a means of ensuring social inclusion – it would be generally seen as giving people “something for nothing” – but make attractive the other much-touted welfare innovation, a compulsory savings scheme to fund pensions and other benefits. But he accepts that advocates of citizen’s income can appeal to different common-sense notions of fairness, and that, in the end, the only way of resolving the conflict is through collective political choice.

” I think it is crucial that we give greater weight to the political sphere than much recent political thought does,” he says. “Squeezing down the democratic domain to a very narrow space by trying to hive off political decisions to market forces or legal arbitration simply does not work. And to give greater weight to the political sphere, we need to make our political institutions, particularly political parties, more representative. I am strongly in favour of electoral reform, not as some subordinate element in a programme of constitutional reform, other parts of which would have the effect of stripping the political realm of its significance, but as the necessary condition of a new political settlement. The Charter 88 view of constitutional reform, valuable as it was under Thatcherism, is animated in part by a legalist conception of government in which the most important thing is to protect rights-holders from collective decision-making. The idea that these important areas of human well-being should be removed from the political process is a fundamental error.”

So does Gray see any sign that British political discourse is taking on board his perspective? He points to the output of Demos and the writing of Anthony Gid-dens, and says that the current debate over the lessons to be learned from the east Asian “tigers”, however crude it has been, “has at least displaced the parochialism of British political culture”. But, he goes on: “There’s a notable cultural lag in British political life, partly accounted for by the stubborn strength of fixed positions in our major parties. Most people are still tracking a world we have lost.”


WHAT’S IN A WORD?

The British left is uneasy with the idea of “social democracy” – but it needs to take it, and reports of its demise, deadly seriously, writes Paul Anderson

“Social democracy” is not an easy term to throw around in British politics. In most of continental Europe, outside Leninist circles, it has long been more-or-less synonymous with “socialism”-and it used to be in Britain too. For most of the past 40 years, however, it has meant something quite different here.

No matter that, in continental European terms, Labour has always been a social democratic party, with its left as deserving of the label as its right-from the late 1950s until what became the Social Democratic Party split from Labour in 1981, the tag “social democracy” functioned in Britain as a means of distinguishing left and right in the Labour Party.

The right, who called themselves social democrats, believed in a mixed economy, Keynesianism and the Atlantic alliance; the left, who called themselves democratic socialists, wanted more nationalisation and tended to be sceptical about Atlanticism. (The other great foreign policy question, Europe, was not a defining feature at first: both camps were split.)

In practice, the differences were of degree rather than of kind: as the experience of the 1964-70 and 1974-79 Labour governments went to show, what “social democrats” and “democratic socialists” did when they got into government and confronted the real constraints on their freedom of action was pretty much the same. But at least the nomenclature served as shorthand for real political divergences. After the SDP left Labour, “social democracy” became little more than a term of Labour Party abuse.

For several years, Labour loyalists, regardless of their views, described themselves as “democratic socialists”: not even the most right-wing Labourites dared describe themselves associal democrats. Meanwhile, the SDP under David Owen abandoned most of the policies that had once beenthedefiningfeaturesofLabour’sself-styledsocialdemocratsinfavourofanout-and-out neo-liberalism.

Recently, however, linguistic sanity has made a comeback. Although Neil Kinnock and John Smith were reticent about calling themselves social democrats, Tony Blair is not. Increasingly, “social democracy” stands in British political discourse not for the views of a faction of the Labour Party (let alone those of a small centrist splinter party) but for the broad approach to economic and social policy .adopted by Labour and its sister parties in western Europe and the rest of the industrial world since 1945.

But that’s just the beginning of the problem. If it’s now more acceptable than at any time in 40 years to describe Labour as a social democratic party, what social democracy means in practice has changed a great deal in the past 20 years.

Until the mid-1970s, if you stripped away the British left’s difficulties with the words, what it meant to be a social democrat was simple. You backed broadly Keynesian economic policies to maintain full employment, egalitarian taxation, expansion of the welfare state, corporatist management of industrial relations and a substantial state sector in the economy.

But then something started to go badly wrong. In the wake of the first oil shock, social democratic governments throughout Europe found themselves facing crises of inflation and unemployment simultaneously-just what was not supposed to happen with Keynesian economics. One by one, they were forced to adopt austerity policies that owed more to the new right than to orthodox social-democratic thinking. The final straw was the collapse of the French socialists’ Keynesian expansionist experiment in 1983 after the revolt of the financial markets. Since then, there have been few social democratic governments in the west European heartland of social democracy-and not one anywhere in the world has dared to mess with the imperatives of global capital. Most have adopted prudent, privatising economic policies barely distinguishable from those of the right.

So is social democracy dead, as John Gray and others claim? Certainly, 1960s-style “Keynesianism in one country” has few advocates anywhere. Nor are there many enthusiasts for corporatism these days outside those countries – notably Germany – where it is culturally entrenched.

But the notion that Europe, with its extra weight in the world economy, could take over from the medium-sized nation-state as Keynesian manager is still just-about alive. Despite the EU’s effective abandonment of the Delors plan to compensate for the deflationary effects of monetary union under the Maastricht treaty, there is still some hope in European social democratic circles that the Eurokeynesian dream can be revived.

There are also signs of life in social-democratic redistributive taxation, despite the now-general fears of “taxpayer revolt” that have been stoked by the scale of welfare payments in the context of mass unemployment and an ageing population. In an insecure era, the argument goes, taxation fo rwelfare spending will regain popularity.

Is all this clutching at straws? Gray is not alone in thinking that it is – but we won’t really know until a social democratic party wins an election in one of Europe’s bigger countries. As things stand, the most likely place for that to happen is Britain. It’s not just here that Tony Blair’s progress will be noted with interest.

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