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Why Social Democracy is Failing Europe

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There is a certain tension in the phrase, “social democracy,” and the description of someone as a social democrat. Social in this context is socialism by the state. A democrat supports the freedom for individual electors to express and defend personal interests in regular plebiscites. The two positions are incompatible.

At this point we should note that in economic terms there is little philosophical difference between European socialism and communism. Both seek to relieve capitalists of the means of production in favor of the state, either by ownership or control. Marx himself saw socialism as a temporary phase on the way to full communism. However, we all know from experience that communism fails by impoverishing everyone except a coterie of leaders. The same problem of the state’s inability to calculate prices, other than with reference to labor costs, and to foresee what consumers require on the morrow bedevils both socialism and communism. The principal difference between the two is the speed at which economic disintegration takes place, tied to the rate at which the socializing state removes personal freedoms and destroys wealth.

Social democrats assume that moderate socialism does not lead to those outcomes, which is a mistake1. They are deceived.

With social democracy we observe committed socialists and communists using democracy as the pathway towards increasing socialism and eventual communism. But there’s a problem, which in time becomes increasingly obvious to the electorate. Electors become poorer over time, and the more progressive among them seek to escape in order to participate in more capitalistic economies. Lenin and Mao Zedong dealt with this tendency by suppressing all freedom of expression and they redefined democracy to permit only the election of communist officials. Intellectuals, always the first to express discontent, were liquidated or sent to the Soviet gulags and China’s penal labor camps. 

In Western Europe a different, more patient approach was needed for the communist revolution. And this is where the concept of the social democrat springs from.

The tactic was (and still is) to stand firm on socialism and force compromises always to be made by the democrats. For decades it was the basis of Soviet foreign policy, which employed “useful idiots” to spread communism in both universities and political circles. Their influence was what defeated Enoch Powell and still drives Ken Clarke and his fellow appeasers towards greater socialism. It is clear that social democratic politicians need not be communists, only appeasers. 

Social democratic political parties express a belief in social justice. But social justice is a meaningless term used by the far left to attract support for more extreme forms of socialism. In Europe, social democrats advocating social justice have held sway since the Second World War. But they are becoming victims of their success at taking down capitalism, because they are losing electoral support. 

The era of social democracy appears to be coming to an end. Germany’s SPD recently suffered its worst electoral result since the Second World War, and France’s Socialist Party came fifth in the presidential election won by Emmanuel Macron, a political outsider. Other social democratic parties to have lost ground include the Netherlands’ Labour Party, Italy’s Democratic Party and Austria’s Social Democrats. In the United States there was a rejection of the Democrats in favor of President Trump, who like Macron in France started as a political outsider. 

Brexit was the rejection by the British voter of the socializing controls imposed by a remote super-state. The British parliament initially paid lip-service to the electorate’s wishes, before rallying round its socialist credentials and is now conspiring to stop Brexit. So strong is Parliament’s collective socialist instinct that May’s appeasing government is prepared to destroy its electoral base rather than stand against the socialist tide. It comes at a time when the Labour Party has been captured by a Marxist clique which appears increasingly likely to form the next government. 

Commentators attribute the decline in social democracy to events such as the great financial crisis. This and other reasons are why traditional working-class and blue-collar workers have drifted away. The philosophical conflict between socialism and democracy is at the heart of the rebellion, if only the voters themselves knew it. Instead of rejecting socialism, they are embracing extremes, and the extremes are always socialist extremes. Notably, almost none of the disillusioned social democrats support free markets.

The point missed by most analysts is that social democracy is failing because of the contradiction between personal freedom and state control.

As a form of mild socialism, it fails for the same reason as did communism. It all plays into the hands of the communists, for whom the failure of social democracy is an opportunity. They encourage the rank and file to blame capitalism. The collapse of capitalism is inevitable, as Marx wrote. And its collapse hastens full-blooded communism. Communism is a broken philosophy, as has been clearly demonstrated. But ruthless leaders still see it as the means of obtaining power over their fellow humans.

  • 1. Link added by editor.

Alasdair Macleod is the Head of Research at GoldMoney.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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