As I finish this book, climate change, the financial crisis, and the election of Barack Obama are changing the face of politics. Obama speaks to the idea that everything is possible, which is really precisely the opposite of what Third Wayers told us. The financial crisis challenges the rationale of the Third Way, the idea that the market economy is supreme and requires all our devotion. Crisis is indeed undoing the prosperous economy that was social democracy’s pride, leaving us with the question of how much of the new economy was ever for real. The 1990s and early 2000s are rapidly becoming history.
Suddenly it is hard to think of a more outdated political slogan than the Third Way. European social democracy has spent the last years in a state of crisis—ranging from the fatigue of New Labour after Blair to the disintegration of French socialists who cannot agree on a road forward between anticapitalism, modernization, and old-style state socialism. Italian social democracy has once again lost the working class vote to Berlusconi. In Sweden, current opposition leader Mona Sahlin seems, more than anything, to have gone back to the 1980s and its themes of freedom, entrepreneurship, and meritocracy, struggling to face a new Right that seems, at times, more social democratic than social democracy itself.
The state of social democracy in the present leaves us with the question, Is the Third Way at an end, or is it merely at a critical juncture? As the historian David Marquand put it when Blair finally stepped down in the summer of 2007, the Third Way was a fudge, and one that seemed to degenerate over time into a Blairite project of what Marquand describes as “evangelical belligerence.”1 In the eyes of history, Blairism will no doubt be seen as a political project inseparable from the Iraq War, and as such it is decisively at an end. However, it would be premature and misconstrued to proclaim it dead. The Third Way was bigger than Blair. If we understand the Third Way to be a project of social democratic revisionism, similar to other projects of social democratic revisionism in history, then it is clear that its historical significance goes beyond the individuals who have carried it. Moreover, while the themes that have dominated social democratic thinking in the long decade from the mid-1990s to the present—choice, opportunity, entrepreneurship—may be less fresh and shiny policy responses to the issues facing social democracy today, it is also hard to discern an alternative vision to them in contemporary European social democracy. The financial crisis will, of course, force social democracy to think very hard about its choices, and it is also rapidly cracking open the fissures of the Third Way project. However, more than anything, crisis has shown us just how disoriented social democracy is in the present. It is hardly the political agent that has responded most vehemently to crisis—rather, with the possible exception for Gordon Brown, it seems to stand silently by as leaders of the Right bring Keynesianism back.
The ideological coherence of the Third Way should not be overstated, and many voices within contemporary social democracy have been left out in the previous pages. It is, and was always, a tension-ridden project, made up of discourses and counterdiscourses from various periods of revisionism and from the different factions of traditionalists and modernizers in the different constellations of social democracy that have defined the period from the 1970s onward. These tensions have become stronger with increasing electoral challenges and changes of leadership. Today, the Third Way is a problematic heritage for social democracy, and Social Democrats all over Europe are struggling to break out of its confined space. For a long time this struggle has looked like a strange waltz of two steps forward, one step back. Gordon Brown’s willingness to break with the Blair years seemed highly debatable until financial crisis suddenly put him in the position to nationalize British banks. While financial crisis has meant a certain return to themes of “old” Labour, including even the dreaded notion of taxation, the newfound need to redistribute public money to banks and house owners has had hardly any visible effects on New Labour’s morally conservative approach to those who were poor before the markets came tumbling down, even if two of Brown’s first initiatives in government were the dismantling of Blair’s flagships of the Social Exclusion Unit and the Respect agenda.
In Sweden, Göran Persson was forgotten the minute after he stepped down, and the Persson years are now openly seen as suffering from nostalgia and lack of debate. The party’s slogans in the election campaign in 2006 seemed to epitomize a political project that had turned its back on the future: “We are proud but not satisfied”; “Sweden is a good country to live in.” Persson’s successor Mona Sahlin has been a bold visionary in integration policy and an articulate feminist. But Sahlin was also one of the young modernizers around Ingvar Carlsson in the 1980s Third Way project. Her first speech as party leader announced a renewal that echoed of the themes of the 1980s and that spoke of reclaiming the notion of freedom as the center of social democratic politics.2 In the following months, the party made hesitant statements on the need to reform schools—without addressing a possible conflict between equality and diversity in the voucher system—and on labor market policy, through promises to strengthen individual responsibility.3 It has opened the door for an all-party alliance around schools, based on principles of order and meritocracy, also including the possibility of grades in early years—a principle that was always a red flag to the SAP.
Taken together, the sheer magnitude of the issues facing us in the world today should be ample material for a new social democratic vision of society. Obama will surely have at least as big an influence on European social democracy as Clinton once did, as he has already begun to reshape the global political landscape. But while Social Democrats today are calling for a new future vision, for something that might define the soul of social democracy for the future, it doesn’t seem to be much closer to defining the content of that vision.4 In recent years, this future debate has suffered from a tangible instrumentalism. So the quest for a social democratic future has become more about the need for a vision, the need for a “story” to persuade people with, than about a progressive analysis of what is wrong with the world and how to define a better social order. To that extent, the social democratic future vision is in a curious state, squeezed between calls for utopia and legacies of spin. This is the result of the confined space that was and is the Third Way. Very strategically, Third Wayers, in Britain, Sweden, and elsewhere, constructed a political space that would appeal to all and no one, and now they are stuck in it.
Meanwhile, it is possible (but by no means a given) that financial crisis will challenge one of the central aspects of contemporary social democracy, namely, its lack of a critique of capitalism. I have argued in the pages of this book that what the Third Way did was to turn articulations that, in the history of social democracy, were articulations in a critique of capitalism into arguments of efficiency and improvement; arguments, more than anything, for the efficiency of markets. In this process, it took historic discourses of revisionism in the social democratic project one step further as it defined principles of equality and security as mere means to other more important ends and made culture, education, and equality into arguments for prosperity. It abdicated the sphere of utopia—what Roberto Mangabeira Ungar has called the “cause of the constructive imagination”—and it rejected the idea that there are forms of good and worth in society that stand in conflict to the economy.5 This is important. While social democracy has rarely been an anticapitalist movement, nevertheless its utopian aspirations have had a critical function in the social democratic project because they have been the guiding stars of debates on the direction of change. In the history of social democracy, utopian discourses have given voice to the kind of critique that reminds a reformist movement of the fine but crucial line between adaptation and politics. The Third Way left these things behind when it argued that the role of politics was not shifting the goalposts of ideological debate but pragmatic management and the identification of what works, the appeal to mainstream values of the people and the creation of a common good reduced to prosperity. In the same process, ideology became a question of articulation, a question of shifting ideological elements after the presumed appeal of the electorate but not with shaping the values of people. The Third Way stands in an awkward relationship to postmodernism here, borrowing its postulates of articulated identities but stripping these of their emancipatory potential, believing in the power of political language and ideology production but not in the productive role of ideology.
From the confined space that this abdication of utopia created, it became very hard to talk of alternatives, indeed hard to imagine how something else could come about and what this something else could be. Rejecting utopia went beyond revisionism. It was a process much more serious than purging social democracy of outdated teleological blueprints or editing the books of old dogma that had long since lost their relevance. Leaving ideology behind did not free social democracy; rather, social democracy lost a worldview, an entire social democratic ontology without which it is very difficult to make sense of patterns and structures in society. So New Labour today finds itself in a space where it knows not how to speak of things because these things have become so detached from a critique of the structures of economy and society that what are left are vague concepts of fairness, inequalities (somehow less offensive in the plural form), and opportunity. In Sweden, social democracy has held on to its classical articulations of equality, security, and solidarity, but it has treated these notions as if they were stagnant, self-evident, and common sensical; and in doing so it has no less left the sphere of ideological reasoning. Indeed, the very striking feature of Swedish social democracy in the 1990s is the absence of debate and the party’s silences around crucial issues. So when asked of the social democratic future vision, the then future Minister of Finance Pär Nuder replied, seemingly untroubled, that there was really no vision.6 This lack of vision is an inherent feature of pragmatism, but arguably this pragmatic stance was taken one step further in the 1990s. Assertions of Sweden as the best society in the world can’t help but reflect the nagging question, Is Sweden still the best society in the world? The SAP’s use of history in the 1990s has in itself been a process of ideological rearticulation because, through careful constructions of continuity and through the careful reliance on the symbols and images of Nordic notions of modernity, the party has constructed a worldview in which nothing has changed. The road to the future goes through the past. The notion of the People’s Home has become a tired trope, a past utopia of national unity, social harmony, and reformist rationality. This nostalgia is a very particular political strategy, and it is indicative of a political project that has little to say of the contemporary world.
There were consequences of the Third Way’s reinterpretation of social democracy as a quintessentially pragmatic and even unpolitical project. It has left electorates deeply uncertain of what social democracy is and who, if anyone, can protect them in a runaway world. It opened up a new political space for a new and modernizing Right that in both countries is now struggling to present itself as a better centrist than is social democracy. In Sweden, the right-wing Alliance for Sweden campaigned in 2006 as the new Labour party (det nya arbetarpartiet). In the United Kingdom, David Cameron has very strategically tried to profile himself as a new Blair, firmly in the center ground on previously polarized issues of education and crime. Possibly this political competition in the middle will force social democracy to think seriously about ideology. But what is perhaps more dangerous than the rise of a new and self-professed moderate Right or a disenchanted electorate is that the Third Way also left Social Democrats themselves deeply uncertain about their role in the world. The search for future vision is also a search for identity and purpose, for those many people who joined politics and social democracy because they believe in it.
So far, the call for vision has seemed detached from analysis of the times we live in, and, indeed, from attempts to provide a progressive analysis of contemporary capitalism. Meanwhile, there are many issues in our surrounding world, less spectacular than financial breakdown and rising temperatures but that nevertheless also go well beyond the scope of the individual and call for new political responsibilities. The process of welfare state retrenchment has created new risks, many of them arising precisely from the praised principles of choice.7 Inequalities are growing, in the domestic arena and on the global level. Galloping private consumption and the transformation of many crucial public goods into private ones in the last decades has opened up new divides in the access to housing, education, pensions, and care, not least in Sweden. There is thus nothing historically predetermined about the demise of social democracy, nothing, to my mind, that would render it obsolete. Rather, social democracy seems to have a relevance that is maybe greater than ever.
From this perspective, the enduring historic paradox of the Third Way is perhaps that it came into existence in a moment, in the 1990s, that seemed to call out for a new social democratic project but that it somehow failed to provide a social democratic analysis of our times. In retrospect, the decade from the mid-1990s was a time in which the great right-wing tide started to roll back. It saw the emergence of new social movements calling for utopian visions of another world. Historically, such utopian critique has invigorated social democracy, and maybe it will in the coming decade, but in the 1990s social democracy’s response to this critique was its message of adaptation to globalization and capital as forces beyond political control. The 1990s also saw—through the hard work of social democratic politicians like Blair and Persson—the end of the neoliberal critique of the welfare state. The welfare state is today more or less universally acknowledged as a necessary part of capitalism. Social democracy seems to have won the historic battle over its claim that what is fair is also efficient. New Labour has succeeded in establishing a progressive social policy agenda in many areas, and the historic feat of Swedish social democracy in the 1990s is arguably that it has successfully established that the Swedish model is not deficient but valid for another era. But the tough verdict on the last decade is that social democracy did not use its momentum in the 1990s to push forward an egalitarian agenda or defend the uniqueness of the social democratic project.
This forces us to consider very carefully what social democracy is. On some level, of course, social democracy is what social democracy does, as was suggested in the early literature on the Third Way. From this perspective, the Third Way was just social democracy recast for a new era, and there was nothing in it that set it apart from the social democratic project in principled terms. But social democracy is arguably a historic project construed around certain values that are not instrumental or exchangeable but that define its soul. The objective of equality is such a goal, such a utopian aspiration to a better social order, without which it is very hard to be and think social democrat. As Sheri Berman has recently argued, social democracy is historically defined not by its anticapitalist stances but by the way that it historically set certain values—equality, democracy, solidarity—as values that were superior to the economic. The importance of these values is that they established what Berman calls “the primacy of politics,” the idea that there is a political sphere defined by values that override the market. This is where the Third Way marks a decisive break with the historic project of social democracy. Indeed, Sheri Berman writes that the proponents of the Third Way “appear not to understand that one of the core principles of social democracy has always been a belief in the primacy of politics.”8
Berman reasserts an argument that has been made by many other students of social democracy and by critics of New Labour since its very naissance. But Berman argues that the twentieth century marked the historic victory of social democracy, through the long historic struggle to put values of equality and democracy and principles of social citizenship at the basis of our societies and gradually transform them.9 Similarly, it has been argued that the rise of a new center Right would reflect a hegemonic victory of social democratic values over neoliberalism, that the Third Way has succeeded in establishing the values of social democracy as consensus values in the population, and that the Right is now left with stealing social democracy’s clothes.10 There is clearly some truth in this. There are, as Berman points out, few political projects today that question the social embeddedness and democratic regulation of capitalism. However, historically, social democracy did something more than “just” embed the market—it debated its alternatives, its limits, its notions of value and good, and its effects on people’s lives. It may be true that there are few proponents of the free market in contemporary politics, but there also few critics of capitalism. Arguably, the specificity of the values of equality and democracy in the social democratic project was that they were linked to a critique of capitalism and to the structures of economy and production that infringe on human fulfilment. This critique of capitalism was a central aspect of social democracy’s struggle for the primacy of politics: through welfare state intervention and social policy, through economic planning, through education and cultural debate, and through the conscientious protection of certain spheres in society. In the 1990s, Third Wayers mistakenly assumed that such a critique of capitalism necessarily called for the nationalization of the means of the production and that speaking of capitalism presumes understanding it as a stage-driven development of static and recognizable patterns.
It is true that social democracy has made that mistake in history, but historically it has also criticized exactly these assumptions of Marxism and socialism with its appeal to human will and potential, to democracy, and to the transformative role of social citizenship. In history, social democracy’s understanding of capitalism was tied to a utopian aspiration and critique, the notion that a different and better society was possible and that this society had to be built on a critique of the economic and social structures that caused inequality and waste in the present. So the Swedish “modernizer” Ernst Wigforss spoke of “provisory utopias” (provisoriska utopier): the dreams that were within the realm of political possibility but had to be radical enough as to function as guiding stars for the process of pragmatic reform if social democracy were to keep track of its defining values.11 In the absence of such utopian vision and in the absence of a critique of capitalism that link the lives of people with the way we organize society and economy, the Third Way is, as Roberto Ungar puts it, merely the first way with sugar, “the sweetener of compensatory social policy and social insurance to make up for a failure to achieve any fundamental broadening of opportunity.”12 This is not the historic victory of social democracy, but the historic retreat of social democracy from exactly those things that historically defined its soul.
This would suggest that the move to the center is possible only because social democratic articulations are today so innocuous that they can easily also be embraced by the Right. The vision of equality, in contemporary social democratic discourse, is void of its utopian elements, reduced, in the case of New Labour, to an instrumentalism that has to speak of equality as a means for other things and first and foremost as a route to prosperity, or, in the Swedish case, detached from analysis of current trends in inequality.13 This is not to say that there are no important differences between the contemporary social democratic project and the new Right, whatever the latter will turn out to be.14 But it is not entirely easy today to distinguish what sets social democratic articulations apart from modernized versions of social conservatism or social liberalism, both of which have become integrated elements in social democratic ideology. Arguably the contemporary acclaim of welfare statism in the political middle is that today it is a project of social order and not of social change, a project of prosperity and growth and not of equality, a project that sees social citizenship and the common good as a question of the adherence to market values and not as a radical principle for social transformation. Social democracy’s contemporary articulations of meritocracy, opportunity, and potential do not challenge the social order. Its notions of efficiency and prosperity have become so narrow that these are today but notions of market efficiency, decoupled from arguments of what a good society should be like or the importance of public good for equality and solidarity. The middle class that is the target of the new Labour parties on the political Right is in significant parts social democracy’s own creation. In the 1930s, social democracy appealed to the common good in the form of solidarity and to the “people” as historical actors who could be convinced to carry a political project of social transformation. In the 1990s, it appealed to a people whom it saw as naturally conservative, made up of self-interested consumers and imbued with a national identity inseparable from market values.
So freedom of choice and diversity became more important than democracy, opportunity more important than equality, responsibility more important than rights. The shift in notions of citizenship from rights to responsibility and obligation is a sea change because it reorients the entire political project around the subject individual. Many changes in the organization of the welfare state seem to have serious adverse effects on the status of citizenship and on the very ties of reciprocity and mutuality in society. To that extent, the Third Way seems to have missed its historic opportunity and failed to provide a progressive account of our times. In the same logic, it also seems to have failed to create a progressive account out of the knowledge economy.
The central argument of the Third Way is the revocation of the old socialist claim that the role of politics is to bring out the potential of all, to allow all individuals to grow and pursue their talents and become what they have it in themselves to become, now in an age that allegedly gives people new opportunities to pursue that potential. But it seems in fact to have no real answer to the question of what opportunity and human potential are, or what defines the common good in an era where individuals may be increasingly concerned with the cultivation of their selves but also seem to ask for new forms of belonging, where on the one hand mills are disappearing but on the other they are also replaced by call centers and outsourcing, and where opportunity does not seem to automatically spread but to concentrate. Education and culture that have a fundamental role for the creation and liberation of human potential have been turned into market goods in a global running for competitiveness. There seem to be virtually no values, to contemporary social democracy, that are not also economic values.
This reflects what I have described as a process of capitalization: The Third Way turns notions of good that historically were noneconomic goods, such as creativity or curiosity, into new commodities and indeed new forms of capital. This could be put more bluntly: In the Third Way, social democracy’s critique of capitalism has been replaced by a theory of capital, by a theory of how to create value in the knowledge economy. In so doing it elevates principles of prosperity and efficiency into hegemonic notions of value and worth and makes alternative definitions of value seem frivolous. In this process—in the process of constantly defining everything in terms of its potential use value in the new economy—social democracy is an active agent in the constitution of an economy that might make us prosperous in some ways and infinitely poorer in others.
In itself, this capitalizing logic is not new to social democracy, and it would be a mistake therefore to think that the Third Way is somehow an unhappy accident or anomaly in the social democratic tradition. The Third Way draws on fundamental elements in the social democratic tradition. However, it does so through a very selective process of rereading social democracy’s past ideologies, a rereading in which it strategically picks certain elements while silencing others. So it speaks of community and social cohesion but leaves out the long-standing critique of the market as a threat to social order that is an important feature of social democracy’s historic notion of community. It speaks of culture as a way of creating fulfilled and whole-knowledge citizens but leaves out William’s critique of industrialism or Morris’s and Sandler’s utopias of education and beauty. It speaks of the human capital waste of inequality and social exclusion—but shies away from critiquing structures in favor of an argument where, essentially, people waste themselves. Human capital discourse, to the Third Way, is about putting people to use, tapping the potential of us all. It blames people, not capitalism; it corrects people, not structures. So New Labour reenacts a kind of productivist social interventionism or social engineering that is deep in the heart of social democracy, a logic that historically is prone to see people as capital; but it forgets that the aspiration to equality, democracy, and solidarity was the bulwark that once steered that productivism into a progressive argument of social transformation instead of a conservative or even fascist narrative of social order. It leans on Scandinavian influences of work ethic but is oblivious of the transformative role of social citizenship. In the process, it leaves out a whole sphere of utopian thought in the history of social democracy, without which social democratic politics are reduced to creating prosperity and people reduced to productive capital. Without a critique of the structures of knowledge capitalism, the Third Way’s slogan of “tapping potential” leads to a dangerous capitalization of the human self.
The notion of capitalism has not been prized in the politics of the Left lately, despite the rise of movements such as Attack or Italian Ya basta!. Maybe the failure of these movements lies exactly in the fact that they also did not manage to produce a theory of our times but remained radical protesters. While this book is about two particular versions of social democracy, it is hard to find other and more viable debates about capitalism in other social democratic parties. In France, PS has occasionally—pushed by a small but vocal French communist Left—debated the theme of knowledge capitalism and post-Fordism. But French politics of the Left are also incapable of mounting an alternative worldview to that of the Right.
It is possible, finally, that the knowledge economy was nothing but fluff, a strategic invention of a coalition of business and political interests to define desired political changes as contingently necessary. If so, it says something about social democracy’s inability to invent its own strategy to change the world. Social democracy needs to go back to an understanding of capitalism as something that not only creates riches but also impoverishes our world.