Social Europe Needs A Positive Vision

In his magisterial One Hundred Years of Socialism, Donald Sassoon described how, under the influence of the 19^th century German leader Karl Kautsky, the European social democrat movement embraced a mechanistic scheme by which the immanent crisis of capitalism would somehow issue in a transition to socialism. This conveniently offered a reassuring fatalism about the future and a legitimation of cautious reformism in the meantime.

The crucible of war, factory occupations and the rise of fascism led the imprisoned Italian communist leader Antonio Gramsci to the sober conclusion, however, that following such a crisis ‘morbid symptoms’ would appear. Radical change in Europe – ‘The People’s Home!’, ‘a National Health Service’ – stems from popular hope, not fear. If only more on the contemporary European left had understood its 20^th century history they would not have been so shaken when the biggest crisis of capitalism for three quarters of a century did not automatically lead to a left-wing revival.

Indeed, quite the contrary, with the same deflationary austerity whose imposition in pre-war Germany fuelled the rise of Nazism being dogmatically re-presented, in the manner of medieval medical leeches, as the only remedy for the crisis and with the main challenge to that discourse – outside of Spain and, partly, Greece – coming from the populist radical right. This new authoritarianism is not just manifested in anti-system leaders like Marine Le Pen of the Front National but in the nationalistic ‘illiberal democracy’ trumpeted by office-holders like Viktor Orban in Hungary, Recep Tayyip Erdoğan in Turkey and of course Vladimir Putin in Russia.

‘Social Europe’, in that context, has proved far from an enduring acquis and in hindsight more a brief, western-European historical interlude in which the moderate Christian-socialist Jacques Delors sought, as European Commission President, to balance the drive towards the ‘single market’, in which national democratic regulation was cast as illegitimate ‘state aid’ – without, crucially, reregulation at the European scale of the transnational genie now out of the bottle.

Indeed, so far has the discourse been transformed by the loss of regulatory instruments that the left is now fighting a rearguard action against the proposed Transatlantic Trade and Investment Partnership (TTIP), hoping to remove the investor-state dispute settlement clause. This would give transnationals the power to sue mere democratically elected governments for having the temerity to believe those national levers of regulation remained in their hands.

The commemorations this year of the onset of the first world war remind us of how just debilitating was the split in the European left as ‘national’ socialist parties followed ‘their’ competing imperialist powers. The demise of internationalism as a founding left-wing value, while apparently unproblematic in the trentes glorieuses of Keynesian demand management and expanding welfare states, is now, a century on, really coming home to roost.

True, the European Parliament elections last year for the first time saw a genuine transnational personalisation of the contest, in the shape of Martin Schulz as social democratic candidate for the Commission presidency, but the Party of European Socialists remains a thin carapace over the national parties, some of whom – again particularly in Spain and Greece – have been hopelessly tarnished by their association with austerity in office, while others – especially in south-eastern Europe – have been tainted by corruption.

The European left desperately needs a political project which can take the form of a portmanteau banner behind which all can rally and which can resonate in the European public sphere, yet can be subject to further national, regional and local specification. The ‘Good Society’ discussions, involving intellectuals and activists from across the continent and supported since the onset of the crisis by the Friedrich-Ebert-Stiftung, have provided a helpful umbrella for that project to emerge.

Reregulation at the European scale involves key measures to place a precarious labour market on a more secure foundation, notably a Europe-wide minimum wage, the extension of the already-agreed youth guarantee to adults and the outlawing (as in the Netherlands) of zero-hours contracts. Measures such as these can stem a race to the bottom – including the exploitation of immigration in the enlarged EU by cowboy capitalists and the political exploitation of that in turn by the populist xenophobes.

Reregulation also entails constraining overblown financial capital through the long-awaited financial transactions tax. And it requires an ecological modernisation of industrial capital, driven by replacing the ineffectual, market-based carbon-trading scheme by an effective EU-wide carbon tax.

The revenues arising can be the nucleus of the fiscal capacity essential to give Social Europe real meaning. The new Commission President, the centre-right’s Claude Juncker – tainted by his association in office with the beggar-thy-neighbour tax practices of his native Luxembourg – has advanced a £300 billion investment package but with utterly implausible assumptions as to the multiplier effects of a very modest public pump-prime.

Fiscal and monetary policy must be unleashed if Social Europe is to become more than rhetoric. The economically illiterate fiscal brakes on member states must be removed to allow borrowing for public investment and measured fiscal consolidation. And the mandate of the European Central Bank must be liberated from pursuit of the scourge of non-existent inflation to become a lender of last resort with a commitment to full employment across the eurozone.

Most enticing in this context is Giacomo Corneo’s idea, advanced at the latest Good Society discussion in Berlin, of rethinking a transition to socialism as the accumulation of public capital through sovereign wealth funds. As Henning Meyer has extended it, a European fund could be a powerful symbol of stability and force for recovery.