(B)y the early 1970s, social democracy reached its political and economic limits. The welfare state strengthened the position of organized labor, reducing corporate profits and increasing workers' political power relative to capital. Social democratic parties and trade unions began to formulate plans to encroach on capital's control over the means of production; in Sweden the unions proposed the establishment of worker funds that would gradually take ownership of firms away from capitalists, elements of the British Labour Party pushed for more comprehensive forms of economic planning, and the Socialists under Francois Mitterrand moved to nationalize vast swaths of the French economy, including 90% of the country's banks. These political developments, coupled with the shocks wrought by inflation in commodity prices (especially oil) and a productivity slowdown, ruptured the underpinnings of the postwar order. The crisis could have been resolved by either moving further toward socialism or by breaking radically toward neoliberalism. As we are all painfully aware, the latter option won out. The political and economic power of capital was restored, and the labor movement and left political formations were decimated. We've lost the ability to talk about social democracy not simply because of a crisis of faith. It's because the institutions with the ability to articulate this discursive framework have been defeated (for now, at least).Now, I don't agree with Maisano's conclusion that social democracy can't make for a desirable destination in itself, as the existence of strong forces on two sides of an issue doesn't necessarily rule out an equilibrium that ultimately results in the best possible global outcome. But his analysis does provide an important response to the view that a concern for public ownership and government as the site of solutions represents the outdated thinking of "left-wing conservatives".
This points to the fundamental limitation of social democracy, or "socialist capitalism" as Michael Harrington more accurately described it. It's a compromise between socialism and capitalism, but one that's made on capitalism's terms. As Harrington pointed out decades ago in his book Socialism, "the fact is that as long as capitalism is capitalism it vitiates or subverts the efforts of socialists. . . . In fact, capital fights back, it does not meekly accept the programming of social democratic ministers . . . economic power is political power, and as long as the basic relationships of the economy are left intact, they provide a base for the subversion of the democratic will."
Instead, I'd argue that it's a sign of realism, not conservatism, to recognize that the long-term sustainability of a political vision depends in substantial part on the type of institutions responsible for delivering it, as well as the relative strength of the forces supporting and opposing it. And the mantra about the "end of big government" over the past couple of decades seems too frequently to have resulted in trading off increased corporate control for limited policy gains in the short term - with the long-term consequence of reinforcing the former at the expense of the latter when tension arises between the two.
Which isn't to say we should refuse to consider other ideas as to how to implement policies beyond insisting on centralized government structures. Indeed, we'd do well to also promote cooperative and community-based efforts among other possible sources of new institutional strength. But while we should certainly be open to different means to our shared ends, we should also be careful about buying into the rhetoric of those who want to diminish the importance of governments, unions, and other actors precisely because they've managed to serve as counterweights to a corporate-centred worldview.
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