Why social democrats fail in the context of the great economic crisis
Social democracy is apparently wavering between a continuous adjustment to the constraints of neo-liberal globalisation and the search for an improbable continent-wide 'green high-tech Keynesianism'. This chapter explains the reasons for this situation, focusing on the relationship of social democracy have forged with the capitalist economy and the European institutions. It looks at the defeat this political family of parties had to contend with as a result of the exhaustion of the social democratic/Keynesian project. The chapter also explains how social democracy made two 'Faustian pacts', thereby strengthening the neo-liberal paradigm established in the late 1970s: the conversion to the European integration process and the enthusiasm for the knowledge-based economy. It argues that the Faustian pacts that have been forged continue to make it difficult for the social democratic family to offer a comprehensive and coherent alternative to the ailing neo-liberal paradigm.
This book makes an important contribution to the existing literature on European social democracy in the wake of the 2008 financial crash and ensuing recession. It considers ways in which European social democratic parties at both the national and European level have responded to the global economic crisis (GEC). The book also considers the extent to which the authors might envisage alternatives to the neo-liberal consensus being successfully promoted by those parties within the European Union (EU). The book first explores some of the broader thematic issues underpinning questions of the political economy of social democracy during the GEC. Then, it addresses some of the social democratic party responses that have been witnessed at the level of the nation state across Europe. The book focuses in particular on some of the countries with the longest tradition of social democratic and centre-left party politics, and therefore focuses on western and southern Europe. In contrast to the proclaimed social democratic (and especially Party of European Socialists) ambitions, the outcomes witnessed at the EU level have been less promising for those seeking a supranational re-social democratization. In order to understand the EU-level response of social democratic party actors to the Great Recession, the book situates social democratic parties historically. In the case of the British Labour Party, it also identifies the absence of ideological alternatives to the 'there is no alternative' (TINA)-logic that prevailed under the leadership of both Tony Blair and Gordon Brown.
The historical relationship between economic crisis and social democracy is both intrinsic and far from straightforward. In terms of electoral performance, an overview suggests that social democratic parties have fared badly as a result of the global economic crisis. The crisis of neo-liberalism creates the potential to consider a shift towards an alternative socio-economic model and set of ideas. This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book discusses the relationship between social democratic parties and what they claim were two 'Faustian pacts' entered into: one with European integration, and the other with the knowledge-based economy. In the case of the British Labour Party, the book further identifies the absence of ideological alternatives to the 'there is no alternative' (TINA)-logic that prevailed under the leadership of both Tony Blair and Gordon Brown.