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Cambridge University Press
978-0-521-81799-8 - The primacy of politics - social democracy and the making of Europe's twentieth century - by Sheri Berman
Excerpt

I

Introduction

For the first half of the twentieth century, Europe was the most turbulent region on earth, convulsed by war, economic crisis, and social and political conflict. For the second half of the century, it was among the most placid, a study in harmony and prosperity. What changed?

   Two narratives commonly emerge in answer to this question. The first focuses on the struggle between democracy and its alternatives, pitting liberalism against fascism, national socialism, and Marxist-Leninism. The second focuses on the competition between capitalism and its alternatives, pitting liberals against socialists and communists. In both cases, liberalism triumphed. Democratic capitalism proved the best form – indeed, the “natural” form – of societal organization, and once Western Europe fully embraced it, all was well.

   This account obviously contains some truth: The century did witness a struggle between democracy and its enemies and the market and its alternatives. But it is only a partial truth, because it overlooks a crucial point: Democracy and capitalism had been historically at odds. Indeed, this was one point on which classical liberals and traditional Marxists agreed. From J. S. Mill to Alexis de Tocqueville to Friedrich Hayek, liberals have lived in constantfear of the “egalitarian threats of mass society and democratic . . . politics, which, in their view, would lead, by necessity, to tyranny and ‘class legislation’ by the propertyless as well as uneducated majority.” Karl Marx, meanwhile, expressed skepticism about whether the bourgeoisie would actually allow democracy to function (and workers to take power), but felt that if they did, democracy might contribute to bringing about an end to capitalism – a potential, of course, that he, unlike his liberal counterparts, welcomed.¹ The story of the twentieth century, and the reason that its second half was so different from its first, is thus to a large degree the story of how capitalism and democracy were rendered compatible, so much so that we now see them as inextricably linked and as the necessary and sufficient preconditions for social stability and progress.

   In practice, this rendering entailed a dramatic revision of the relationship that existed among states, markets, and society up through the early twentieth century; it meant creating a capitalism tempered and limited by political power and often made subservient to the needs of society rather than the other way around. This was as far a cry from what liberals had long advocated (namely, as free a rein for markets and individual liberty as possible) as it was from what Marxists and communists wanted (namely, an end to capitalism). The ideology that triumphed in the twentieth century was not liberalism, as the “End of History” story argues; it was social democracy. This book tells its story.

Capitalism

Before delving into this story, it is worth stepping back a bit to remind ourselves of how contested the relationship among states, markets, and society has been since the onset of capitalism. Most people today take capitalism so much for granted that they fail to appreciate what a recent and revolutionary phenomenon it is. Although trade and commerce have always been features of human societies, only in the eighteenth century did economies in which markets were the primary force in the production and distribution of goods begin to emerge. As these markets spread, they transformed not only economic relationships but social and political ones as well.

   In pre-capitalist societies, markets were embedded in broader social relationships and subordinated to politics. Thus, the institutions, norms, and preferences of traditional communities governed markets’ reach and operation. From the most traditional societies up through Europe’s mercantalist age, decisions about the production and distribution of goods were made not by markets but by those with social and political power. Although markets existed, they were strictly constrained and regulated:

[N]ever before [modern capitalist] time were markets more than accessories of economic life. As a rule, the economic system was absorbed in the social system....and [w]here markets were most highly developed, as under the mercantile system, they throve under the control of a centralized administration which fostered autarchy both in the households of the peasantry and in respect to national life. Regulation and markets, in effect, grew up together. The self-regulating market was unknown; indeed the emergence of the idea of self-regulation was a complete reversal of the trend of development. It is in light of these facts that the extraordinary assumptions underlying a market economy can alone be fully comprehended.²

   With the advent of capitalism, in other words, the traditional relationship among states, markets, and society was reversed as the needs of markets came to determine the nature of communal life and the limits of political power; in essence, under capitalism, “society [became merely] an adjunct to the market.”³ This is a dynamic, of course, with which any contemporary observer of globalization is familiar, but it did, in fact mark a dramatic historical departure: It was only with the triumph of capitalism in Europe beginning in the late eighteenth and nineteenth centuries that many critical decisions about how people lived their lives were left to the mercy (or lack of it) of impersonal economic forces.

   For individuals, capitalism meant an end to a world where one’s position and livelihood were defined primarily by membership in a particular group or community, and the transition to a system where identity and sustenance depended on one’s position in the market.⁴ The shift from traditional to modern societies had, of course, immense liberating potential for individuals: It meant the possibility of a world where one’s life chances were not strictly defined by communal identity or family background. It also meant, however, that the web of ties and responsibilities that had tied individuals to their fellows and society more generally was sundered.⁵ One critical consequence of this tearing asunder of traditional relationships was that whereas in pre-capitalist society an individual’s basic sustenance might be guaranteed as “a moral right of membership in a human community,”⁶ under capitalism the threat of starvation – the “economic whip of hunger” – became a necessary and even desirable part of societal arrangements, the ultimate incentive to play by the rules of the game.

   Communal life was also up-ended. Throughout Western history, it had been widely believed that societies could be held together only by some shared vision of the public good. It was for precisely this reason that thinkers throughout Western history had long worried about the harmful effects of the pursuit of material gain. Thus Plato had Socrates say in The Republic that “the more men value money the less they value virtue,” while the Apostle Paul argued, “the love of money is the root of all evils.”⁷ Capitalism aggravated these tendencies, this argument goes, since in addition to encouraging avarice and amoralism, market-based societies distracted people from the common purposes and higher ends to which life should be devoted. With the transition to capitalism, self-interest took precedence over communal interest, and temporary and shifting relationships of contract and exchange became the primary bonds between citizens. It is hard for us today to remember how truly revolutionary a transformation this was:

To insist that society is and always has been nothing more than the sum of individuals, that the common end can only be achieved by maximizing individual interests, that the economy is, by definition, a mechanism governed by economic motives for the satisfaction of economic needs, that religious [and moral] standards are at best irrelevant to the economic enterprise, at worst detrimental – this mode of reasoning ... is a peculiarly modern way of thinking, patently at variance with the beliefs most people lived with for most of history.⁸

   Perhaps the most influential discussion of this shift was by Ferdinand Tönnies in his path-breaking Gemeinschaft und Gesellschaft (Community and Society).⁹ Here Tönnies argued that there were two basic forms of social life: that which existed before capitalism and after. In the precapitalist world, community reigned supreme. Commitment to the public or communal good was the highest value, and common views and an instinctual, unquestioned sense of social solidarity bound citizens together.¹⁰ Or as another observer noted, “In traditional societies, the principle of social cohesion was part of the very structure of society. Hierarchies and distinctions, as well as equivalences, bound men together organically. The social bond was perceived as natural.”¹¹ The spread of markets, in contrast, destroyed the traditional elements holding together communal life and created a type of social organization where self-interest rather than communal interest reigned supreme. As Tönnies famously noted, “In community people remain essentially united in spite of all separating factors, whereas in society they are essentially separated in spite of all uniting factors.”¹² “Re-creating through political means the social unity which modernization has destroyed” has thus been, as we will see, one of the main challenges facing modern societies.¹³

   In short, the transition to capitalism brought a tragic irony: “At the heart of the Industrial Revolution of the eighteenth century there was an almost miraculous improvement in the tools of production, which was accompanied by catastrophic dislocations in the lives of the common people” and the organization of human communities.¹⁴ These dislocations were so radical and destabilizing that they prompted an almost immediate backlash: an effort to limit the reach of markets and protect society from their destabilizing consequences. Thus began what Karl Polanyi called a “double movement,” a battle between opposing principles that would shape modern life from that point forward:

[O]ne was the principle of economic liberalism, aiming at the establishment of a self-regulating market, relying on the support of the trading classes, and using largely laissez-faire and free trade as its methods; the other was the principle of social protection aiming at the conservation of man and nature as well as productive organization, relying on the varying support of those most immediately affected by the deleterious action of the market ... and using protective legislation, restrictive associations, and other instruments of intervention as its methods.¹⁵

   This dialectic came to a head in the 1920s and 1930s. With economic collapse and social chaos threatening much of Europe, publics began to renew their demands for the stability, community, and social protection that modern capitalist societies seemed unable to provide. At this point fascism and national socialism charged onto the stage, offering a way out of the downward spiral, a new vision of society in which states put markets in their place and fought the atomization, dislocation, and discord that liberalism, capitalism and modernity had generated. For many fascism and national socialism thus represented “real but barbaric solution[s]” to the contradictions and problems of market society.¹⁶ The fascist and National Socialist cures, of course, were worse than the original disease, and Europeans emerging from the tragedy of the interwar years and the Second World War confronted the challenge of creating a world in which the market’s reach and excesses could be controlled and people’s longing for social solidarity could be satisfied – without the sacrifice of democracy and the trampling of freedom that fascism and Nazism brought in their wake.

   Just such a system, of course, is precisely what emerged during the postwar period. And although it is most often understood today as a modified or “embedded” form of liberalism, this is a dramatic misreading of both its roots and nature. In fact, rather than some updated form of liberalism, what spread like wildfire after the war was really something quite different: social democracy. By the end of the Second World War, social democracy had already been busy for a decade winning its first major political victories on Europe’s northern periphery. Rejecting the economism and passivity of liberalism and orthodox Marxism, and eschewing the violence and authoritarianism of fascism and national socialism, social democracy was built on a belief in the primacy of politics and communitarianism – that is, on a conviction that political forces rather than economic ones could and should be the driving forces of history and that the “needs” or “good” of society must be protected and nurtured – and represented a non-Marxist vision of socialism. It was the most successful ideology and movement of the twentieth century: Its principles and policies undergirded the most prosperous and harmonious period in European history by reconciling things that had hitherto seemed incompatible – a well-functioning capitalist system, democracy, and social stability.

   If this sounds surprising or overblown, it is perhaps first and foremost because, as noted previously, we have forgotten how unprecedented an achievement the postwar order was. Many, particularly in the United States, assume the natural compatibility of capitalism, democracy, and social stability when in fact they have historically not gone together. This lack of perspective is reflected in social scientific research as well. We have many excellent analyses of the constituent elements of Europe’s postwar political economies. We know a lot, for example, about how and why democracy developed in Europe and elsewhere¹⁷; the nature and development of welfare states¹⁸; and the evolution, logic, and consequences of Keynesianism, planning, and other tools of economic management.¹⁹ What we have thought less about is the postwar order’s overall historical role and philosophical significance.²⁰ This book will therefore build on the existing literature on Europe’s twentieth century political economies but also go beyond it. In addition to chronicaling the “back story” of the postwar order, I will argue that this order must be understood as a solution to the problems unleashed by capitalism and modernity. During the nineteenth and first half of the twentieth centuries, the liberal, Marxist, and fascist/national socialist solutions to these problems were tried and found wanting. Once the catastrophe of the Second World War was over, a new order began to emerge based on an understanding of the relationship among states, markets, and societies that differed radically from that advocated by liberals, Marxists, and fascists/national socialists. Based on a belief that political forces should control economic ones and aiming to “re-create through political means the social unity which modernization has destroyed,”²¹ this order was, as we will see, a fundamentally social democratic one.

   If one reason why social democracy’s key role in twentieth century history has been obscured is that we have for the most part not thought about the postwar order holistically and historically, a second is that few scholars or commentators have given social democracy itself either the respect or in-depth ideological analysis it deserves. As a result, a force that has altered the course of European politics in the past and could do so again in the future remains strangely obscure.

   One reason for this neglect is a simple confusion of terms. During the late nineteenth and early twentieth centuries, many socialists adopted the label “social democrat” to differentiate themselves from other socialists who did not accept democracy. But these figures often agreed on little beyond the rejection of an insurrectionary or violent route to power, making their grouping of limited analytical use. Thus in Germany, for example, both Karl Kautsky and Eduard Bernstein claimed the social democratic label, even though they espoused dramatically different versions of socialism. Today the situation is similar, with a wide range of individuals and very different political parties identifying themselves as social democratic and having little in common save some vaguely leftist sentiments and a fervent desire not to be identified as communist.

   Modern scholars, meanwhile, have often failed to appreciate social democracy’s ideological distinctiveness. Most work on the subject in recent decades adopts one of two perspectives. The first, often espoused by critics, sees social democracy as an unstable halfway house between Marxism and liberalism, cobbled together from elements of incompatible traditions. In this view, social democrats are socialists without the courage of revolutionary conviction or socialists who have chosen ballots over bullets.²² The second perspective, often held by supporters, sees the movement as an effort to implement particular policies or uphold certain values. In this view, social democrats are basically the champions of the welfare state, “equality,” or “solidarity.”

   Each of these views contains some truth, but both miss the larger picture. This book will argue that social democracy is far more than a particular political program. Nor is it a compromise between Marxism and liberalism. And neither should it apply to any individual or party with vaguely leftist sympathies and an antipathy to communism. Instead, social democracy, at least as originally conceived, represented a full-fledged alternative to both Marxism and liberalism that had at its core a distinctive belief in the primacy of politics and communitarianism. The key to understanding its true nature lies in the circumstances of its birth. But before we can tell its story, a few words are necessary about the study of political ideologies more generally.

Ideology

Most contemporary political scientists tend to shun the study of ideology because they consider the concept too vague and amorphous to have a place in rigorous analysis. Political scientists prefer to work with things that can be easily observed and quantified, and ideologies do not fit the bill. Yet even the skeptics would find it hard to deny, if pressed, that ideologies exist and exert a profound influence on politics. It would be impossible to discuss twentieth century history without using terms such as “fascist,” “communist,” or “liberal,” and one would be laughed at if one tried. The result is a gap between academic theory and political reality that calls to mind the drunk looking for his lost keys under the lamppost because that was where the light was: The barren but easily searchable areas of political life receive lots of attention, while important subjects lie ignored in the dark a few feet away.²³

   Some social scientists justify the lack of attention paid to ideologies because they view them as mere epiphenomena, rising and falling thanks to changes in underlying economic interests or material conditions without exerting any significant independent impact along the way. For many Marxists, rational-choice scholars, and realists, for example, ideologies are best understood as mere tools or “covers” – adopted and used by political actors for various reasons, but not determining outcomes on their own. While this may often be the case, such a blanket rejection of ideologies’ import is clearly wrong. Even a cursory reading of history shows that ideologies have played an important role in driving events down paths they would otherwise not have taken. They link people who would not otherwise have been linked and motivate them to pursue political goals they would not otherwise have pursued.

   Another part of the problem is that many scholars who actually study ideology have been so narrowly focused on them that they haven’t paid much attention to how ideologies are affected by other factors. Intellectual historians, for example, have produced rich and fascinating accounts of the content and advocates of ideologies, but they are often less good at telling us something about where ideologies come from or how they are shaped by the wider social, political, and economic contexts out of which they spring. Yet another problem is that many students of ideology work with a sort of status quo bias, treating ideologies as preexisting parts of a landscape and focusing on how they influence actors’ behavior over time. Students of culture and certain kinds of institutionalists, for example, have a lot to tell us about how ideas and norms shape decisions and behavior, but especially, until recently, they have been less good at analyzing periods of change – times when belief systems and ideologies come under attack and new ones begin to emerge.²⁴

   The starting point for a more satisfying literature is the recognition that ideologies exist at the juncture of theory and practice, with one foot in the realm of abstract ideas and the other in everyday political reality. They have their greatest impact when they can seamlessly relate the one to the other, offering adherents both a satisfying explanation of the world and a guide to mastering it.

   Even if a perfect fit does emerge between an ideology and its environment, it rarely lasts for long. The political, social, or economic landscape changes, and the ideology becomes less useful. Sometimes it can be tinkered with or updated to suit the new conditions; sometimes it just stagnates, opening the way for an alternative to vault into prominence and power. The story of each period of ideological hegemony, therefore, truly begins with the decline of its predecessor.

   Ideologies, in other words, rise and fall through a two-stage process. In the first stage, existing ideologies are questioned and tarnished, opening up a political space that competitors aspire to fill.²⁵ In this phase, in other words , the perceived failures or inadequacies of the reigning intellectual paradigm(s) create a demand for new ideologies. Once a political space has begun to open, the second stage of the process begins, as some political actors start to develop and embrace alternative approaches. In this phase, that is, a supply of new ideologies begins to appear, with contenders competing for mindshare and political power.

   This book will trace such patterns over time, treating the fate of twentieth century ideologies as an extended case study. During the late nineteenth and early twentieth centuries, Western European nations underwent massive change. New social groups increased in size and power; old political patterns and forms of social organization began to crumble; economies were transformed. These developments led many across the continent to question existing political ideologies and search for new ways of understanding and responding to the rapidly evolving world around them. The crises that buffeted the continent during 1910s through 1940s accelerated the process of reconsideration. Two world wars and a massive depression discredited many of the institutions, organizations, and approaches that had long dominated European politics, giving added impetus to the ideological reexamination and reformulation that was already under way.