A missed opportunity? Social democracy and the neo-statist moment.
| Author | Gerbaudo, Paolo |
At the beginning of the 2020s, wealthy industrial and post-industrial countries are experiencing a re-organisation of the political arena, one which is upending many of the assumptions the social-democratic left has inherited from the last three decades. Much of this transformation revolves around the changing understanding of the role of the state and its relationship to the market. (1) Recent traumatic events have radically redefined policy-making and public views of the state: the financial crisis of 2008, the rise of right-wing populist movements in the 2010s, and finally the pandemic and the threat of climate change, are all doing away with the assumption of stability--not just macro-economic but also political--that laid the foundation of the 'Great Moderation', the period between the late 1980s and late 2000s marked by a low volatility in business cycle fluctuations. During the Great Moderation, a policy consensus converged around the neoliberal demand to rein in the power of the state and unleash the power of the market; these days we find politicians compelled to resort to the most disparate forms of interventionism: from fiscal stimulus to respond to the economic shock of the pandemic, to price controls on energy to deal with the energy crisis, to national plans to transform the energy and transportation sector, as in those seen in the European Union and other countries. It seems that western economies are abandoning the consensus on the minimal state of the neoliberal era. We have now entered what can be described as an era of 'neo-statism', in which, by dint of necessity, all policy-makers have to at least temporarily suspend their laissez-faire attitude, in order to navigate a phase marked by great instability and the apparent Balkanisation of the global market, the existence of which was long taken for granted, but which now is fragmenting into competing blocks.
For the most part, this neo-statism has been at the service of business interests, consistent with the framework of what Daniela Gabor has called a 'de-risking state', where governments shoulder some of the liability of risky financial investments, rather than a 'green developmental state', one in which governments take direct responsibility for transforming the economy on a path towards environmental sustainability. (2) But this is not the only possible direction that the neo-statist moment could take. Insofar as this return of the state has been driven by societal crises and contradictions, rather than explicitly democratic demands arising from society, it confronts democratic socialists with a new range of political dilemmas. The fading away of the consensus on minimal state intervention and faith in the power of the market widens the range of policy options politicians can deploy. Further, this change in the policy-making space is accompanied by a shift in public attitudes and perceptions, which involves greater demand for government intervention to solve social problems, greater concern about inequality and the cost of living, and growing demand for action on climate change amid ever more extreme weather events. These parallel shifts in policy-making and public perceptions have important implications for social democracy. The Labour Party's plans for a 'green prosperity plan' to 'turn the UK into a clean energy superpower' by 2030 are a promising sign of ambition.
How should social democrats contend with the technocratic managerialism characteristic of current western responses to large-scale crises? What attitude should they take towards the return of the state? What strategic opportunities and political pitfalls does the return of the state augur? To what extent can social-democratic forces utilise the neo-statist conjuncture to advance an inclusive and democratic vision? What are the dangers and pitfalls of neo-statism? Such questions stand at the heart of the current prospects for social democracy.
Our argument is that the neo-statist moment offers clear political opportunities for social democrats. It is accompanied by a growing public demand for the kinds of social-democratic policies that were side-lined during the Great Moderation, and an increased public acceptance of the need for state intervention in light of the crises we face, in order to provide a practical means for those policies to be implemented. All these issues are at play in the three great arenas of neo-statism, which are the domains of greatest promise for social-democratic forces: financial governance, the pandemic, and climate change. Social and economic crises reveal the contradictions that capitalist societies are constantly trying to manage without resolving. Neo-statism is a particular configuration of new state-governing powers that has emerged as a response to the existence of large-scale systemic risks for which there is no apparent 'market solution', and in the face of which the state is compelled to suspend normal market conditions to prevent economic implosion. And those new social contradictions, on the one hand, and governing powers, on the other, provide the context for a potential renewal of social democracy. However, to date, the response to this shift in the structure of political opportunities has had only a partial effect on the structure of the social-democratic political offer. This is the result of the chaotic situation of the left and centre left in Europe and the US.
On the centre left, we find two diverging trends. Over the 2010s, centre-left parties underwent a progressive and sometimes catastrophic decline, which many observers have traced to their increasing turn towards the centre and embrace of aspects of the neoliberal policy agenda. (3) In parallel, a new left populist formation emerged, attracting many voters who did not feel represented by moderate centre-left politicians; many of these formations were presented in the mainstream press as irrational and extremist, but a number of them have progressively embarked on a reformist course, demonstrating their ability to broker wider alliances, as with Melenchon in France, and their ability for policy delivery, as with Yolanda Diaz in Spain. In many respects, these reconfigured politicians and parties are not radical leftists but new social democrats.
There have also been limited attempts at the re-alignment of mainstream centre-left parties, as seen in the US with the Build Back Better agenda of Biden; in France with the PS joining Melenchon's Union Populaire Alliance; with Starmer's initial embrace of aspects of Corbyn's agenda during his leadership election; and in the German SPD. These have focused more on redistributive issues (in particular, demands to lift the minimum wage). Yet these realignments have been often half-hearted, and in some cases have been actively sabotaged by centrists, as has happened most spectacularly with the collapse of the Build Back Better agenda, opposed by centrist senators such as Joe Manchin, and also with the restoration of the centrist agenda in the Labour Party. The immediate risk is that an opportunity to revive social-democratic policies in the neo-statist moment may be missed, opening the way for a re-run of the populist right in the US, where the Republicans look set to win the midterm elections, and elsewhere. But social democrats must look beyond the next electoral cycle, to rethink political strategy in the post-neoliberal and neo-statist moment.
The neo-statist moment
The idea of a neo-statist moment is a simplified representation of the current political conjuncture, which contends that societies are leaving the neoliberal era that dominated from the 1980s to the 2010s and entering a new stage, whose political direction is as of yet uncertain, but whose contours can already be grasped. We are witnessing a redirection of policy-making consensus toward the acceptance of greater state interventionism to deal with a situation of multiple crises, or what Adam Tooze has described as poly-crisis. (4) Politicians on both the centre left and centre right these days appear more ready to publicly declare that the state has to intervene, even if they radically disagree on what this intervention should actually be. This is highlighted also by their sharing of common slogans such as the Build Back Better slogan used by both Biden and Johnson, which was used to indicate the need for an activist state after the pandemic. Typical neoliberal mantras about the need for a 'small state'--mouthed by the likes of Reagan and Thatcher on the right and Clinton and Blair on the left--have fallen out of fashion. Further, political discourse is moving towards the triad of sovereignty, protection and control, mobilised in response to the need for security in the face of new global environmental, social and geopolitical risks. (5)
The deployment of these terms highlights that priorities have changed radically vis-a-vis the era of the Great Moderation and neoliberal consensus, which we (like other authors) consider to be on the way out. (6) But behind these...
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