Revitalising social democracy Amsterdam Process discussion note

Revitalising social democracy Amsterdam Process discussion note Amsterdam, 30 June 1 July, 2010 In the aftermath of the Dutch, UK and Belgian elections, Policy Network and the Wiardi Beckman Stichting brought together a small group to frankly discuss the parlous state of European social democracy and identify the central dilemmas which confront progressive politics. Bringing together academics, political advisers and leading strategic thinkers from Europe s social democratic parties, including, among others, Matthias Machnig (SPD), Liam Byrne (UK Labour), Wouter Bos (PvdA), Pierre Moscovici (Parti Socialiste), Raymond Johansen (Norwegian Labour Party), Christine Antorini (Danish Social Democrats), Anthony Giddens (LSE) and Wolfgang Merkel (WZB), the meeting set out to sign post key issues for The Amsterdam Process research programme. 1 The following note reflects the discussions which took place. 2 The premise was set with the assertion that there is a significant intellectual and ideological vacuum in social democratic thinking, and by extension deep seated problems of culture, identity, narrative and organisational structure. Social democratic parties used to be hotbeds of ideas and reason, but today they find themselves dangerously disorientated and rudderless, unable to offer credible programmes of governance or respond to the epochal changes which are sweeping the world. At the same time, many governments might fall in the midst of the systematic retrenchment and austerity programmes that they enforce on their electorates, giving rise to a situation whereby social democrats might be returned to power sooner than expected and in very difficult circumstances. It is therefore time to move beyond the politics of nostalgia and despair and bring social democratic governing programmes up to date with the times. 1 The full participant list is available as an appendix 2 The agenda is available as an appendix Policy Network, 11 Tufton Street, London, SW1P 3QB T: +44 (0) 207 340 2200, E: info@policy network.net,

Does social democracy have a strategy for tough times? The financial crisis of 2008 did not serve as the definitive clarion call for centre left governance; rather it had the opposite effect. The third way narrative, it was offered, led to a belief by social democrats that they could transcend problems through discourse, that in essence there was always a third way and thus no need for tough choices or compromise. This might have worked in the good times, but led to real confusion over what parties actually stood for in tough times; hence, as Andrew Gamble documents, the shift to conservative governments. 3 It was countered that fundamental questions shadow the assumption that social democracy actually delivered in the good times, never mind the tough. In both Germany and the UK, centreleft governments failed to reduce inequality or meaningfully increase social mobility over long periods of government. On the one hand a new underclass has been created, and on the other social democrats helped to create a set of socio economic conditions that undermine the interests of those on middle and lower incomes. In responding to the tough times aversion, it was asserted that, as the politics of austerity will shape public debate for some time to come, first and foremost social democrats needed to have a fundamental debate about the size and role of the state. As a hybrid ideology it has to stop thinking only about the role of the state and think more about the civic sphere, moving towards a social democracy of society. Yet, it was argued that rather than preoccupying themselves ideologically with the role of the state, many European social democrats have been complicit in the economisation of society. The markets and the primacy of economics came to dominate what the government did and led to a loss of control, and by extension greater societal insecurity. It is therefore in the economy that new programmatic input is most vital. Credible programmes are needed on the issues of who pays for the crisis, financial regulation, and law and order in the labour market. A credible and sustainable centre left approach to growth and jobs is also vital. Yet it was warned that, by focusing solely on the Keynesian argument and the cuts versus investment debate, there is a risk of obscuring the need for fiscal consolidation and tough decisions. Keynesianism will not be enough in the long run, meaning that social democrats will need new economic programmes which harness the vast power of markets for the common good. For this reason, progressives will have to reassess the tax and spend discourse and give more attention to narratives of pro growth public spending aimed at higher education, industrial activism and reenergising civil society. Furthermore, as the issue of climate changes continues its descent into partisan politics, most notably in Australia, it was argued that social democrats urgently need to sharpen their policy and political arguments in order to create new, legitimate climate politics. The failure of the green message to resonate and the resultant rise in apathy across western democracies suggests that 3 Andrew Gamble, 2009. The Spectre at the Feast: Capitalist Crisis and the Politics of Recession, Palgrave Macmillan

battles over environmentalism could become more and more electorally toxic. This demands new narratives focused on growth and job creation, as it is in the reorientation of lifestyle habits and low carbon transition that the major new growth models of the future will arise. The development of a credible social democratic economic paradigm therefore presents dilemmas and trade offs that urgently need to be confronted: to what extent should social democrats aim to reverse the primacy of economics? How do we redefine the role of the state and what principals should underpin state action? Given the persistence of boom and bust, is social democracy destined to deliver only in good times? Is a commitment to full employment viable in a stormy economic climate, and in the long run are Keynesian policies sufficient to harness the vast power of markets for the common good? Middle class woes: do social democrats understand the middle class? In relation to raising human capital and real wages at the bottom end of society, Ulrich Beck s elevator effect analogy was invoked to remind social democrats of where they had failed to deliver: in many European countries the elevator has stopped going up for everyone but those in the top third, shattering people s fundamental sense of social security. In Britain, post election analysis points to the loss of support among younger middle class families and blue collar workers as the most fracturing aspect of Labour s coalition of voters: in 2010 support in this segment fell a full 20 per cent, down from 43 per cent to just 23 per cent, its biggest ever decline. In effect, Labour had maintained its traditional constituency and made gains among the better off in society, but it was with the middle classes, those in the 18 30,000 income bracket, that the coalition cracked. 4 The New Labour message put work, opportunity and aspiration centre stage but did not deliver. Echoing this, it was contended, with reference to The Netherlands, that social democrats have come to profoundly misunderstand the middle class. In Amsterdam, five key areas of detrimental confusion were identified: First of all, social democrats tend to forget that most of the modern working class now IS middle class. They simply and literally have a lot to lose. Second, social democrats like to continue to think of the working class as have nots who have great expectations of everything they could gain from government interventions, but in reality they have evolved to become haves (rather than have nots) and they now have great concerns about everything they could lose from government interventions. Third, social democrats like to believe everybody understands the fairness of showing solidarity. But the former working class and new middle class believe they are on the paying rather than the receiving end of solidarity and are therefore very critical. 4 Liam Byrne Why did Labour Lose and How Do We Win Again?, Progress pamphlet, May 2010

Fourth, social democrats like to believe everybody understands the fairness of getting benefits on the basis of income. But the middle class believes it means they will have to pay more, now or in the future, so they don t like it. Fifth, social democrats believe the middle class doesn t care about fiscal prudence; but they do. They know they have had to manage their finances well to become middle class and expect the government, dealing with their tax money, to do the same. 5 At the same time, even if social democrats do not understand the middle classes, it was reiterated that large and vulnerable precarious societal groups are growing and increasingly face insurmountable barriers to social advancement and prosperity. A key question therefore is: as new class structures, interest groups and political milieus emerge, can social democracy simultaneously reach out to different societal groups and bridge the gap between the individual and the collective, or the high skilled and the low skilled? Can social democratic parties still be the champions of a cross coalition of voters? Social democracy s historic mission to bind both the winners and losers of modernisation has become more difficult, due to the traditional working class vote significantly declining and a wealthier and expanding middle class. It was offered that social democrats today have three strategic choices: target the enlightened middle classes; put the hand break on and defend the traditional as well as flexible working classes; or a Houdini style third option geared towards creating a broad coalition of the left, bridging the gap between the conservative and liberal left, and forming new alliances with third sector and civic initiatives. In line with this, fragmentation, not polarisation was the key word which followed from the analysis of the Dutch and German elections in Amsterdam. Broadly the progressive left scored well, suggesting that there is not a crisis of demography. Yet it was underlined that in The Netherlands, the largest party has never been so small, prompting the assertion that the era of majoritarian rule is over. From Norway, where a Red Red coalition holds power, came a strong endorsement for coalition government: the other parties actually have good ideas too, with the benefits extending into a shake up of rigid party structures, more innovation, less arrogance and more pragmatic and balanced governance. This raises the question of how to create a political programme which is in the interests of the entire society. Not only do social democrats need to think about coalition tactics and common agendas with their political partners, but also how to again engage with other societal and community groups. Traditionally social democracy as a movement did not reside solely in state 5 Wouter Bos, Where we stand and what we should do, Policy Network, June 2010

power, but was instrumental in fostering civic spirit and a mass membership society within trade unions, church groups, charitable organizations and labour clubs. How can this aspect of social democracy be rejuvenated and complemented by the institutions and practices of the state? Who are our potential allies, and what would a common agenda for social liberals, social democrats, greens and even new parties on the left look like? Fairness, identity, community and culture Returning to the stagnation of middle and lower class incomes, it was pointed out that people, specifically in the UK and Germany, have not seen their living standards rise and are falling behind in average growth in wages. They were told to work hard and play by the rules, yet they were left in limbo and simply did not get ahead or see their real wages rise. This fracture of peoples fundamental fairness code in turn has repercussions for community cohesion, welfare politics and solidarity, with, it was argued, immigration serving as a proxy for concerns about social inequality and unfairness. Although it was accepted that living standards have suffered and that the backlash against immigration has to be seen in this context, it was also felt that social democrats got a lot wrong: conflict between multiculturalism and national interest; failure to understand identity in a globalised world; failure to grasp new cultural cleavages; and that immigration policies had been run with the interests of business, not communities at heart. One proposition was that governments must strike new deals with the business community, linking state investment in business and innovation to real wage increases for middle and low income workers. The issue of plummeting levels of trust in politicians and voter disillusionment in western democracies was also drawn on to underline the anxieties at play, with transforming the politics of aspiration, devolution of power to local communities and the defence of the public sphere all coming to the fore. The public sphere defined as the fruits of the combination of markets, state and civil society should, it was argued, lead the drive to subordinate markets to the public interest. But there is a careful balance to be struck which will require sophisticated thinking. The principle of reciprocity can be a driving force for greater equality, serving as a pillar of solidarity and promoting interactions which are not dependent on the state, but exist independently of it. Likewise the task for social democrats must be to reinvent public and collective habits, introducing new leaders and civic structures. Ideas centred on mutualism will have to be looked at in more detail and the task for social democrats is to mobilise the academic community to look further at concepts of a politics of social responsibility and trust and even the big society. A big question concerns how much power local government is prepared to hand over to civil society.

Narrative how can we redefine our overarching moral purpose? What does the social democratic idea stand for in the 21 st Century? Social democracy needs to redefine and clarify its moral purpose and it has to do this with a new narrative laced with clarity and conviction. The rise of single issue and identity politics have impacted on the core political message of the centre left, rendering the socio economic narrative alone insufficient in an age of increasing insecurity. It follows that there is a need for careful revisionism around what social democracy is today. Social democrats used to be able to talk about values and morality, but today cold reasoning and slippery synonyms hold sway. In many senses the term progressive has become meaningless, and the parties of the centre left will have to offer some big ideas to reclaim it. Likewise, some social democrats have avoided using terms like security and redistribution in favour of language which stresses opportunity and social mobility, reflective of a peculiar social democratic tendency to not only fail to identify what went wrong, but also to forget very quickly why it was successful. In his book, Tony Judt called for the rehabilitation of idealism, something that needs to be matched by willingness to take on moral questions. Too often issues such as crime, family, identity and values have been ceded to the right. Should social democrats not be able to frame a new moral narrative on security around being a good parent, a good citizen and a good worker? It was also raised that this quandary is made even more difficult because at times social democrats struggle to accept the legitimacy of self interest as a governing principle, too often retreating into a cosy cosmopolitan consensus. Linked to the crisis of narrative, concerns were raised about the organisational structure of social democratic parties. They have been rendered rigid, staid and old fashioned and have lost their broad base. This has consequences for policy innovation and dynamism, as new parties are increasingly able to move with the times in their programmes and policy portfolios. Where will innovation come from and how can it be promoted? Furthermore, it was identified that 44 per cent of the Dutch electorate decided who to vote for only in the final week before the election, highlighting not only the importance of modern campaigns in our media world, but also the volatility of the electorate. By extension, leadership is now more important than ever in our spectator democracies, meaning that social democrats will have to look hard at what the essence of leadership is in the age of modern media. Is internationalism the key? At a recent Policy Network conference, Pascal Lamy, Director General of the WTO argued that action at the state level is no longer sufficient, on its own, to achieve the objectives of social democrats: regulation of the market, social justice, and the creation of public goods, maintaining that now more than ever, the globalisation of capitalism requires a response of equivalent ambition and scale from social democrats.

Likewise, in Amsterdam, it was recognised that international institutions are severely lacking and that this leaves room for a real social democratic agenda. Yet problems of legitimacy and credibly remain considerable. In France, social democrats enjoy widespread legitimacy at the local and regional level, yet cannot transfer this to electoral gain at the national level, never mind the supranational level a point reinforced by the terrible performance of social democrats in the last European elections. It was therefore countered that social democrats risk putting the cart before the horse when focusing on internationalism as a core programmatic pillar. The strongest legitimacy lies at national level, and therefore multi level governance only weakens this. In response it was argued that social democrats have to avoid this short termist stance; as only through an outward looking internationalist approach can effective responses to globalisation be offered and the long term electoral decline of social democratic parties reversed. The EU was put forward as a case in point to bring home how the centre left s traditional commitment to internationalism has wavered. Social democrats have not only been slow to deliver coherent policies at the European level to deal with the eurozone crisis, but also failed to take the opportunity presented by the Financial Stability Fund to argue for further economic governance reforms. Important questions that follow this split include: what is a social democratic definition of multilevel governance? How can the principles of internationalism complement and reinforce the domestic agendas of social democratic parties? How can social democrats present Europe as a political project with a distinctive vision, both ambitious and realistic? Michael McTernan Senior editorial and communications editor mmcternan@policy network.net Policy Network Upcoming activity Over the coming months, Policy Network and the Wiardi Beckman Stichting will publish a series of papers and edited volumes focusing on key ideological and political challenges for European Social Democracy. Workshops and conferences will also take place in a number of European capitals. Visit Policy Network s Social Democracy Observatory for a wide selection of essays and critical thinking on progressive politics. Policy Network: Wiardi Beckman Stichting: http://www.wbs.nl

Participants Anthony Giddens, former director of the LSE and member of the UK House of Lords Anton Hemerijck, Dean of the Faculty of Social Sciences, VU University Amsterdam Bert Koenders, member of the PvdA and former Dutch Minister for Development Cooperation Carlos Mulas Granados, director general of La Fundación IDEAS Catherine de Vries, assistant professor in quantitative methodology, Department of Political Science, University of Amsterdam Christine Antorini, MP for the Danish Social Democrats Claes de Vreese, professor of political communication at the University of Amsterdam Elena Jurado, head of research at Policy Network Frans Becker, deputy director Wiardi Beckman Stichting Hans Boutellier, professor at the Verwey Jonker Institute, the Dutch Institute for Societal Questions Hans Schenk, professor of organisational economics at the Utrecht School of Economics Job Cohen, leader of the Dutch Labour Party José Antonio Espejo, director of the Secretariat for International Policy and Cooperation, PSOE Jürgen Krönig, is a journalist, writer and broadcaster Lapo Pistelli, MP and head of international relations for the Italian Democratic Party Laurent Baumel, assistant national secretary for Europe and international relations for the French Parti Socialiste Liam Byrne, MP for the UK Labour Party and former chief secretary to the treasury Lilianne Ploumen, president of the Dutch Labour Party Lodewijk Asscher, member of the Dutch Labour Party and acting mayor of Amsterdam Marianne Aasen, leader of the Norwegian parliament committee on education, research and church affairs Mark Elchardus, professor of sociology at the Vrije Universiteit Brussel Martin Kettle, associate editor of The Guardian Matthias Machnig, minister for Economy, Labour and Technology in Thuringia and former SPD secretary of state for the environment Monika Sie Dhian Ho, director of Wiardi Beckman Stichting, thinktank of the Dutch Labour Party Nebahat Albayrak, former Dutch secretary of state for justice and MP Olaf Cramme, director of Policy Network Oliver Schmolke, senior political adviser to the SPD s parliamentary group Patrick Diamond, Policy Network senior research fellow and former head of Policy Planning at 10 Downing Street Paul de Beer, Henri Polak chair at the Amsterdam Institute for Advanced Labour Studies Pierre Moscovici, MP for the French Parti Socialiste, former minister for European affairs and member of the National Assembly Finance committee Raymond Johansen, general secretary for the Norwegian Labour Party and former deputy minister in the Ministry of Foreign Affairs René Cuperus, senior fellow, the Wiardi Beckman Foundation Roger Liddle, chair of Policy Network and member of the UK House of Lords Tarjei Skirbekk, political adviser to the Norwegian Foreign Minister, Jonas Gahr Støre Tobias Dürr, editor of the Berliner Republik magazine and chairman of the thinktank Das Progressive Zentrum Wolfgang Merkel, director of the research unit Democracy: Structures, Performance, Challenges at the Social Science Research Centre, Berlin Wouter Bos, former leader of the PvdA

Agenda Wednesday 30 th of June 13.00 13.45 Registration and lunch 13.45 Welcome by Monika Sie Dhian Ho & Olaf Cramme 14.00 16.00 Session one: How much trouble is the left in? Taking stock after the UK, Dutch and Belgian elections Chair: Catherine de Vries Lessons from the end of New Labour Martin Kettle Insights from the political laboratory: Dutch elections explained Claes de Vreese Fighting against the rising tide: electoral and programmatic vulnerabilities Patrick Diamond & Rene Cuperus 16.15 16.30 Coffee break 16.30 18.30 Session two: Can social democracy deliver in tough times? Chair: Frans Becker The politics of growth, well being and jobs: is there a credible alternative centre left approach? Roger Liddle Living in an age of insecurity: do we understand the anxieties of our electorate? Mark Elchardus The broken promises of social mobility: transforming the politics of aspiration Liam Byrne 18.30 Close 20.30 Dinner remarks: Wouter Bos

Thursday 1 st of July 09.00 09.15 Making the left matter (again): reflections by Lodewijk Asscher 09.15 11.00 Session three: The purpose and profile of 21 st century social democracy Chair: Olaf Cramme What s distinctive about the centre left in today s political arena? Has progressive still got a meaning? Anthony Giddens Social democracy beyond the nation state: can multi level governance be a political weapon? Pierre Moscovici Forming a progressive coalition : vacuous rhetoric or serious ambition? Raymond Johansen 11.00 11.30 Coffee break 11.30 13.15 Session four: Changing the way we talk and operate Chair: Laurent Baumel The need for a new social democratic language Bert Koenders Social democracy as a political and popular movement: revitalising campaign led politics in our communities Christine Antorini The centre left and organised labour: can we resurrect a common vision? Carlos Mulas Granados 13.15 Summary: Roger Liddle 13.30 Closing speech: Job Cohen 13.45 Lunch