Social democracy came about as a synthesis of socialism and parliamentary democracy beginning in the pre-Marxist era of co-operatives and trade unions of the 1830s-40s. Towards the 20th century, egalitarian democracy was confronted by the historical forces of nationalism and wars and bifurcated into democratic and authoritarian streams. Socialism split into revolutionary and reformist branches. Karl Marx was revolutionary whereas the reformers, Ferdinand Lassalle and Eduard Bernstein, both supported implementing socialism in the form of social democracy within the government.
Ferdinand Lassalle (1825-1864) was the prototype of the state-socialist—one whose goal is to incorporate socialism within the existing state. He told the workers that the state is something “that will achieve for each one of us what none of us could achieve for himself.” Marx taught the exact opposite, that the working class had to emancipate itself and abolish the existing state in the process. Lassalle declared: "The immemorial vestal fire of all civilization, the State, I defend with you against those modern barbarians (the liberal bourgeoisie)."
Although Lassalle was not a Marxist, he was influenced by the theories of Marx and Friedrich Engels and he accepted the existence and importance of class struggle. However, unlike Marx's and Engels's The Communist Manifesto, Lassalle promoted class struggle in a more moderate form. Marx viewed the state negatively as an instrument of class rule that should only exist temporarily upon the rise to power of the proletariat and then dismantled, whereas Lassalle viewed the state as a means through which workers could enhance their interests and even transform the society to create an economy based on worker-run cooperatives. Lassalle's strategy was primarily electoral and reformist, with Lassalleans contending that the working class needed a political party that fought above all for universal adult male suffrage.
Since World War II, Western European politics has been structured by the ideals of social democracy. From Germany to France to Sweden to Italy, every nation adopted some version of the basic social democratic vision — a mixed-market economy defined by both private property and deep government involvement, with high levels of taxation and sometimes stifling government regulation of the private sector, in exchange for a generous social welfare system that offers things like universal health care and free or heavily subsidized education.
Different countries had different ways of going about it, of course: France’s political economy is not the same as Britain’s, which is not the same as Norway’s. But the basic model was the same everywhere. Even conservative leaders, like France’s Charles De Gaulle and West Germany’s Konrad Adenauer, developed socioeconomic programs that serve as the backbone of their welfare states today.
The social democratic project, by the numbers, has worked pretty well. The 10 countries with the lowest poverty rates in the world are all in Europe (the US ranks 34 out of 35 total countries in the OECD, an organization of wealthy countries). Researchers have also found clear correlations between the size of a country’s welfare state and social mobility, indicating that countries that provide citizens with extensive benefits, like Norway and Denmark, can help them better provide for themselves down the road.
Indeed, the countries that score highest on surveys of national happiness aren’t the richest or the ones with the nicest weather — they’re ones located in frigid Scandinavia, a region defined principally by its exceedingly generous welfare states. This isn’t to say that there aren’t drawbacks to European welfare states. There’s real evidence, for example, that excessive regulation can stymie innovation and make it harder to start new firms.
By most measures Europe’s social and economic programs provide their citizens with better standards of living than can be found in the US. That, however, hasn’t kept the parties that advocate and defend those policies most vigorously from steadily losing votes. The reason for this is that social democratic parities do not offer intelligent and comprehensive answers to the problems of the 21st century, be they wars, energy transition, geopolitical rivalries, social fragmentation, globalisation, family breakdown, or an aging society. They refuse to acknowledge that most people, especially working-class ethnic minority voters, are far more socially moderate or even socially conservative than left-wing academic and activist circles. Therefore, they are losing these voters in droves. Evidence of this can be seen in the United Kingdom where for several years now, ethnic minority voters have been moving away from the Labour Party and towards the Conservative Party. So much so that now 1 in 3 ethnic minority voters now vote Conservative. In 2019, working class voters were more likely to vote Conservative than Labour. Following the 2020 US Presidential Election we also saw Trump increase his support among every demographic except for white males. He especially made gains among Hispanics and Asians, with roughly 1/3 voting for him.
Over the last decade, we have seen right-wing populists gaining power in Europe and America, but especially in Europe in response to globalisation and austerity. Continental European parties such as Brothers of Italy, National Rally, the Afd, Fidez, The Law-and-Order Party, and the Sweden Democrats have promised to use state power to strengthen national borders and respond more harshly to crime and terrorism. Sometimes the argument is made that mass immigration undermines the mutuality that underpins the welfare state. Sometimes the argument made is that national culture needs to be protected from constant waves of foreigners who are creating social problems like crime. In the US, this has taken the form of Trumpism, which promises much of the same thing as European right-wing populists, but with a more economically protectionist focus.
It must be stressed here that the populist right do not have the answers to the problems of the 21st century. Especially in the European Union, the Populist Right, much like the Populist Left, are extremely limited within the constraints of the Euro and the European Single Market, and many of these parties have accepted EU status to make themselves more electable, despite being aware of the democratic constraints that exist from being part of the Eurozone and Single Market. The typical Eurozone country like Italy, for example, will not be able to have its own monetary and fiscal policy. Because it does not issue its own currency it is not able to deficit-spend to the same extent as countries like the US and Canada. Inside the Single Market, a country like Poland cannot fully decide its own industrial policy, its own agricultural policy, its own immigration policy, or its own trade policy. This effectively means that populist parties of any stripe are unable to deliver any radical change once in government. The levers of economic decision-making have been taken away.
In the English-speaking world, the Left seems terminally split between the liberal centrists and the radical progressives. Neither of these factions can connect with voters meaningfully or address their concerns. But there are signs of a blue-collar progressivism emerging, notably with Bernie Sanders who has long declared himself a democratic socialist, but also with Joe Biden who has pursued protectionist economic policies that connect with working class Americans adversely affected by globalisation and offshoring.
In his first two years as President, Joe Biden has supported US industry with tariffs and subsidies, protecting American jobs. He is also broadly supportive of labour unions and has increased the minimum wage for Federal workers. On issues such has crime, he has stated that he is opposed to the crazed demand of BLM protestors to “defund the police” and has instead taken a socially moderate view to fund them properly.
On immigration and asylum, however, Biden is far less in touch with a plurality of Americans who would prefer to see immigration levels reduced. If the Left want to stay in power, then they will need to make a more forceful and progressive case for borders and national sovereignty.
Similar to the Democratic Party in the US, the British Labour Party has also been taken over by the centrists in an attempt to make itself more electable. The face of this transformation has been their leader Sir Keir Starmer. Some have compared Sir Keir’s centrism to the philosophy of Blue Labour, a campaign group launched by Maurice Glasman that seeks to promote blue-collar culturally conservative values. Since his leadership began in 2020, he has stressed the importance of patriotism, the armed forces, NATO, and the monarchy. He’s also made a serious effort to stamp out antisemitism in the party and defended Israel’s right to defend itself.
This discursive shift, however, appears merely opportunistic. In reality, Starmer is extremely detached from the views of most people who don’t believe that their country is racist and that some women have penises. He is also still remembered for wanting to overturn the Brexit vote and for his support for free movement. Such views are common on the British Left but are completely outrageous to the average voter who is socially moderate.
One of the things holding back Left-wing parties is their lack of patriotism and belief in national sovereignty. For example, 22% of the British population consider themselves to be very patriotic. If Labour wants to reclaim power, then they will need to convince voters that they are genuinely patriotic, and do this in a way that is complementary to their economic policies.
So, what would a 21st century radical social democratic program look like. In short, it involves making the progressive case for national sovereignty. It also involves making the patriotic and conservative case for socialism, stressing that mutuality is what underpins our shared institutions and welfare state and that this is undermined by globalisation and multiculturalism. National democracy should take precedence over globalisation and financial markets. This should start with bringing central banks back under democratic control and socialising major banks so that they are made to serve the common good. Public transport and utilities should also be brought under democratic control and workers cooperatives should be promoted. National borders should be brought back under control and tight restrictions put on immigration. The case should be made strongly against companies exploiting cheap foreign labour, and the government should pursue an industrial strategy to promote new innovative technologies and industries. Additionally, the state should massively expand social housing capacity and abolish homelessness by giving everyone the right to decent housing.
The Left does not need to look far for examples of where radical social democratic policies have been extremely popular and a massive success. Franklin D Roosevelt, for example, implemented a number of radical reforms aimed at growing the economy and reducing unemployment. The most important of these was monetary reform. Under Roosevelt’s reforms, dollar was allowed to float freely on foreign exchange markets with no guaranteed price in gold. With the passage of the Gold Reserve Act in 1934, the nominal price of gold was changed from $20.67 per troy ounce to $35. These measures enabled the Federal Reserve to increase the amount of money in circulation to the level the economy needed. Markets immediately responded well to the suspension in the hope that the decline in prices would finally end. In her essay "What ended the Great Depression?" (1992), Christina Romer argued that this policy raised industrial production by 25% until 1937 and by 50% until 1942. FDR’s New Deal economic package funded countless public projects and social programs. It included 24,000 miles of sewer lines, 480 airports, 78,000 bridges, 780 hospitals, 572,000 miles of highway and upwards of 15,000 schools, court houses and other buildings. Roosevelt’s policies were so popular that he was able to win 4 terms as President.
Similar social democratic policies have also been implemented in the United Kingdom during the post-war period. Prime Minister Harold Macmillan in government was able to build 300,000 homes a year. This was topped by Harold Wilson in the 1960s who was able to build 400,000 homes a year and significantly reducing house prices. Imagine the difference such a housing scheme would make today. The case for popular social democracy can be made. It’s up to the political Left to make it.