Social Democracy vs. Democratic Socialism by Larry Liu

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Social Democracy vs. Democratic Socialism

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In this post, I want to explain why I have shifted my allegiance from social democracy to democratic socialism. Before that I will define these two ideas in order to be able to distinguish these two. By making a distinction between these terms, I will emphasize the incompatibility between these two ideas, even though in final goal or in particular policies there might be significant overlap. Even though my emphasis will be to distinguish social democracy and democratic socialism, I will also provide a contrast with a third strain in socialist thinking, namely authoritarian socialism. I will outline some historical context of socialist ideas and policies, and will conclude with some thoughts on the complexity of social change.

Social democracy is the promotion of a mixed economy, in which the private capitalist sector is retained, but social welfare provisions are in place to make capitalist’s activity tolerable to society at large. Democratic socialism is the promotion of an alternative economic system, in which the means of production are controlled democratically by the workers.1 Despite those differences, social democracy and democratic socialism have both common roots in the industrial revolution and the growing class separation between the proletariats, or workers, and the bourgeoisie, or the capitalists. This class separation and the existing economic system that is based on class conflict was best described by Karl Marx2, who synthesized various streams of socialist thought, the ideas of political economy, and German Naturphilosophie to provide a strong analysis of what he called capitalism. Henceforth, it was the call of the socialists in the western countries to bring about change to the existing economic order. The main dispute is how that change should look like. The anticipation of traditional Marxists (and Marx himself) was that the contradictions of capitalism would grow to such a large extent that the working class will have to one day overthrow the capitalist regime3, and create a socialist society, where the means of production are owned by the society at large rather than by a few individual capitalists.

It should be fairly obvious by now that this has not happened, but what I want to focus on here is which strategy the socialist left has deployed to achieve social transformation. One possibility was by a socialist revolution that should be done violently and quickly. This situation has occurred in all state socialist regimes beginning with the Soviet Union in Russia, China, Vietnam, Yugoslavia and Cuba, among others. The most vocal proponent for a worldwide revolution was Leon Trotsky4, who argued that without a global communist revolution any attempt to establish socialism in any country would fail. Trotsky lost out, and was ousted by Stalin, who defined totalitarian socialism within one nation-state, opposing all elements that are deemed bourgeois (which practically meant to get rid of all possible opposition even within Stalin’s close ranks).5

Another brand of socialism was democratic socialism, which deliberately distanced itself from the totalitarian and authoritarian socialism that could be found in the Soviet Union and other countries, where socialist parties were the ruling power. While democratic socialists agree with other socialists that the capitalist regime will need to be overthrown, any outcome of a revolution has to consider the political participation of the working class, the very same class in whose interest a revolution ought to be carried out. In contrast, the existing state socialism, which Stalin and others promoted in order to suppress “bourgeois reactionaries”6, has had no commitment to democratic participation of the workers, who at the time of the October Revolution were relatively weak, considering that Russia was a mostly peasant society.7

A third strain within the socialist movement are the social democrats, whose intellectual father is Eduard Bernstein. Bernstein disagreed with the revolutionary change in society, even though he agreed that socialism was a worthy goal. He argued that socialism has to be achieved piecemeal and via legal and economic reform, not via revolution. The bourgeois society does not have to be overthrown. The capitalist may remain in power, but economic redistribution and social programs should allow the created wealth to be transferred to working class people. Over the long term, the bourgeoisie is somehow expected to wither away, similar to what Marx thought of with the state under socialism.8 With this moderate approach, factions among the capitalists jumped on the band wagon and mildly supported redistribution schemes that materially benefited the workers.9 This process allowed many social democrats to become elected to political power.10 The Great Depression of the 1930s and World War II generated sufficient social pressures and the material conditions to create a generous and comprehensive welfare state.11 Social democratic politicians were in power in many European states. If they were not the political leaders, then at least their policies of Keynesian active government intervention to stimulate demand and investments to sustain full employment were strongly in place. The capitalists did not bother about more welfare and higher worker wages, because the profit rates were high. That was the case in the United States, because no other country was economically comparable to the U.S. It was also the case in Western Europe, where the economic recovery of Germany (Wirtschaftswunder) allowed many countries to improve their standard of living while rebuilding the country from the war and satisfying the profit demands of the capitalists.12

The Keynesian consensus of the post World War II era had to come to an end. By the late 1970s, the economic performance of most western countries deteriorated sharply.13 Neoliberal policies were hastily implemented by the resurgent conservative and neo-liberal governments, notably Thatcher in Britain and Reagan in the U.S. The capital markets were liberalized, the labor protections were lifted, the taxes on the wealthy were reduced. These policies were perceived to be effective responses to a stagnant and inflationary economy, when, in fact, the end of high inflation occurred as a result of labor losing out on the bargaining table against capital.14 High growth rates appeared in emerging economies, not in the capitalist core countries, where deindustrialization weakened the political base of the organized working class. Social democrats facing the unleashed power of capitalists that control mobile capital (increasingly financial)15, a now global labor force (that used to be restricted to the core Western countries and Japan)16, new technology17, and ever-growing multinational corporations18, can not defend the welfare state any longer, and agreed with the neoliberal policy dogma. The “Third Way” under Tony Blair and Gerhard Schroeder articulated the commitment of social democrats to move to the right, and pursue neoliberal policies that have clearly negative consequences on the working class, such as reduced access to social services via the privatization of public goods.19

While the social democratic solution to economic and social problems have historically been the realistic alternative to totalitarian socialism and other small-scale communitarian enterprises (that are not really relevant to the larger society), social democracy has also been co-opted by capitalists, who have no intention to change the fundamental class structure of the economic system, in which a production system is created that avoids crises and places human and social needs above the profit motive. The inability of social democracy to respond to the calls of the population- for an end to austerity measures following the debt and speculative bubble triggered by the banks, the bailout of the banks that perpetrated the bubble, the economic crisis, the contraction in the overall economy, the higher unemployment, the higher underemployment, the greater job insecurity, the lowered social services- reveals the inherent weakness of social democracy. Social democracy, the conscious accommodation to capitalism, can only work very well if there is a broad overlap between the interests of the capitalists and the workers. This can only be the case if the growth rates are high enough to satisfy each interest group, and when these two forces can be held at an equilibrium level (an unduly fetishized term from mainstream economists). But if there is an opening that the capitalists can use in order to aggregate more wealth by inevitably screwing the working class, then the failure of the social democratic model becomes obvious. Social democrats, corrupted by decades of political rule, have to respond to the pressures of the financial and economic overlords, who bankroll their campaigns and dictate government policies through the threat of mobile capital.20

My switch from being a social democrat to becoming a democratic socialist is not merely semantics. The concepts democracy and socialism both contain a lot of importance, but the relationship to the existing class and economic structure are different within these two concepts. I grew up and was politicized as a social democrat, and never thought that criticisms from the far left can be taken seriously. At first, I was exposed to the fallacy that anything left of social democracy must be authoritarian socialism, which was discredited after the fall of the Soviet Union. I also did not believe that the far left could offer any realistic solutions, and that one needs to struggle for government leadership in order to shape the country’s policies in a way that was desirable, regardless of the external policy constraints, such as highly mobile capital. I thought the extreme position of the far left, including democratic socialists, would exclude this political party from seizing power and practically shaping policies.

Then the economic crisis hit, which coincided with Obama’s election to the presidency. America and the world placed their bets on Obama, and that he would deliver on hope and change.21 It turns out that he was good on hope, and not so much on change. Any hopes of a social democratic enterprise need to be buried under the current configurations of capital power as opposed to labor power. At a time of economic crisis, the calls for policies friendly to working people grow louder (as evidenced in the Occupy movement), but the political forces drift further to the right. That was not easy for me to accept, because I had placed my faith in social democratic politics. The material and ideological foundation for a Keynesian welfare state simply did not exist anymore. A return to social democratic politics is simply not realistic, when the capitalists are controlling most of the wealth, and most of the political system. Yet, it remains crucial going into the future that if change on behalf of the workers is to be effected, that a growing politicization of the working class is taking place, and that this will lead to a reconquest of the political system, which will then reshape the economic class relations in society.

The main criticism against democratic socialists and other leftists is not that the ideals they espouse are undesirable. I think that if the case for socialism is made by describing the details of the system, like the shorter work week, the higher real wages financed by enormous technological process, and a political-economic regime that facilitates full employment, then there will be enough people, who will agree with it. I believe this to be the case even in America, that is much less receptive to socialist ideas than other parts of the world, due to its commitment to individualism and capitalism.22 The main criticism against democratic socialists is that it has never been achieved anywhere on a large scale. Authoritarian socialism worked, because the wealthy elements in society were held down by strict social controls through the communist leadership (the latter of which effectively became the capitalist class23). This is the case, even though there were forces destabilizing it, namely due to the inability to satisfy the masses that were latently opposing the regime. The social democratic form of socialism worked, because no revolutionary change was required. The bourgeoisie played an elementary role within the context of social democratic policy, even though it had to swallow some measured designed for the social protection of the workers that would compete for the surplus share going to the capitalist. Even though, a great amount of personal freedom is granted to most people in a social democratic capitalist regime, the social peace can only be seen temporarily.

The most ideal socialist approach has been democratic socialism, because it neither falls into the trap of authoritarian socialism that in the apparent quest to get rid of reactionaries gets rid of the working class it proclaims to advance. It also avoids the pitfalls of social democracy, that, while profits to the capitalist can be guaranteed, can remain an effective way of organizing the economy, but fails to do so, when the profit requirements are not met. In democratic socialism, the workers are required to take charge over the economy, and allocate society’s resources to the benefit of the greatest number of people.

But how to get from here to there? There is no simple answer to this question, and once the ideological perspective of democratic socialism is adopted, the inevitable question of strategy is posed. It was first posed to me by my sociology professor, who is well-versed in the left literature, but finds himself mostly disappointed by what the left has accomplished.24 Even among those intellectuals, who are most committed to the left tradition, there is a remarkable detachment from anything that has been accomplished thus far. Noam Chomsky, while praising every effort of the oppressed, conceded once that he has always sided with the losers.25 This begs the question whether humans are incapable of realizing democratic socialism. I will admit that it requires a great amount of coordination in policies in such a large scale, while accounting for the self-centered interests of people that tend to undermine this policy coordination. By self-centered I do not mean to suggest that all human beings are intrinsically selfish and individualist, even though our capitalist society does a good job of making us think this way.26 By self-centered I mean that most of our habit of thinking is centered on the smallest scale that we can comprehend, namely oneself, the family, the friends and maybe the neighbors. And this type of thinking precedes capitalism, which means that the Marxist desire to change the economic system without understanding the culture might not be enough.27

The daunting prospects of democratic socialism are not at all despairing. They should serve to increase our motivation to find creative solutions to our economic problems as well as solutions to our cultural inability to completely envision a society that fulfills Marx’ call, “From each according to his ability, to each according to his need.”28



One response to “Social Democracy vs. Democratic Socialism by Larry Liu

  1. Let us not ignore that much of what destroyed the left throughout the world was the Stalinist Soviet control of the Communist Parties. CP USA was a consistent member of the leftist movements in the U.S. since the 1930s. They often blocked the growth of a strong cadre of independent leftist leaders, opting instead to become the leadership of the left. When the Soviet Union collapsed the demoralization in the CP USA was devastating and there was a vacuum on the left of any leadership that that risen through the rank and file of the working class. Rather there was a rise of academic leftists arising out of the peculiarities of the growth of the middle class in the post Second World War era. They were more interested in political theory than actually building an international labor movement.
    Now we have a situation where a tiny percentage of the Bougeois Elite are destroying all life on the planet. In a very real sense, this is no longer working class interests in economic and political power it is the interests of all of humanity. Capitalism has now begun to eat its own future. There is no, nor has there ever been, sharing at the table of the rich and powerful. Sadly, money and power do not control the laws of physics, and the realities of the natural world are about to bite us all in the ass. It may already too late to violently and abruptly over throw the Capitalist economy in order to save civilization, but it would be nifty if Capitalism was abruptly terminated as it might, just might, allow for some small vestiges life to survive the Sixth Extinction.

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