Europe and Globalization
‘Contemporary globalization’, David Held et al. have written:
is not reducible to a single causal process but involves a complex configuration of causal logics. These … embrace the expansionary tendencies of political, military, economic, migratory, cultural and ecological systems. But each is mediated by the late-twentieth-century communications and transport revolution which has facilitated globalization across every domain of social activity and dramatically expanded … global interaction capacity.1
Combined with ‘a wave of neoliberal deregulation, initially among core Western economies’, these trends ‘encouraged an explosion of global trade, investment and financial flows’.2
Today, however, it seems to be taken for granted that economic, and particularly financial, globalization was – in the last analysis – ‘the result of explicit or implicit political decisions, and not of some implacable economic determinism’.3 Above all, globalization is the product of strategic action, even if this action was not always conceived as such, particularly by minor states. In fact, ‘states, and above all the world’s most powerful states, have actually played a very active and crucial role in making globalization happen, and they are increasingly encumbered with the responsibility for keeping it going’.4
Globalization has increased the cost of traditional left-wing policies, and encouraged their abandonment in favour of the neoliberal option. Globalization puts the left in an extremely difficult position: any action that is necessary and effective within national borders is, by definition, of limited impact. And passive integration into the ‘globalized’ world primarily represents more impotence for states, particularly minor states with a traditionally strong social democracy; and also more impotence for the left in government.
Thus, the left will not be capable of sustaining the development of a relatively egalitarian economy, with low unemployment and high wages, without ‘voluntarist’ action at the inter- and supranational level (first of all, the level of the European Union, a ‘global-regional’ body of power and authority that is at once relatively strong and sufficiently close to be open to direct social-democratic influence). Inaction at the European level, and more generally at the international level, could translate into the definitive disappearance of specifically social-democratic economic policies.
In this context, can we anticipate a European left-wing macroeconomic policy from social democrats? Can we expect the implementation of a ‘voluntarist’ economic strategy, the converse equivalent of the voluntaristelitist strategy for the construction of monetary Europe? Can we, at the very least, expect a policy of neo-Keynesian inspiration on a European scale? Or will it always be postponed, deferred?
The challenge facing social democrats is sizeable. For the first time in postwar Europe, socialists are in power simultaneously in the three major European countries (Germany, France, United Kingdom). For the first time, too, socialists are no longer ‘lagging behind integration’. Having in part (but only in part) surmounted their traditionally strong divisions over the construction of Europe, they now pose as the ‘party of Europe’ within the European Union. Schröder’s statement – ‘I am a European not “by necessity” … but by inclination’5 – perfectly describes the mindset of the overwhelming majority of socialist parties in Europe. Moreover, having largely lost the capacity for socioeconomic ‘steering’ at the national level, the majority of socialists are, for the first time, profoundly convinced that their economic and social effectiveness presupposes national and European co-ordinated action. The political and intellectual upgrading of the European level, considered more ‘pertinent’ (the ‘large area approach’, as Larry Elliott and Dan Atkinson would say), is the instinctive social-democratic response to the very real downgrading of the national level, which is increasingly regarded as ‘non-pertinent’ or ‘insufficiently’ pertinent. Thus a number of social democrats are timidly searching for a new balance between politics and markets, and perhaps – at least in some cases – a new, moderate version of ‘politics against markets’. A number of social democrats would indeed like to re-establish the ‘Keynesian capacity’ of the nation-state, profoundly challenged by globalization (at least ‘European-level globalisation’), and transpose it to the European level.6 If the challenge is great, the opportunity is less ‘historical’ than it appears.
The Weighty Actuality of the Past
A policy is not conceived and realized in a vacuum. Policies previously implemented either at the national level, or at the European level, are not without their consequences for today’s policies.
For example, the signing of GATT, ‘one of the first post-Maastricht acts of the European Union’,7 and then the policy of the World Trade Organization (WTO), have accelerated and strengthened policies entailing the ‘systematic dispossession of the state’.8 They have also, we should add, strengthened policies that mean ‘dispossession’ (a precautionary dispossession!) of the European Union. A European Union constructed on the basis of the Maastricht Treaty signifies not ‘a super-state … but less state’, Perry Anderson has written.9 Granting autonomy to the central banks and the European Central Bank – conservative, ‘inflation averse’ institutions10 – at the national and European levels respectively constitutes an institutional constraint which significantly limits social-democratic freedom of manoeuvre. Privatizations have significantly reduced the ability of national governments to pursue an active industrial policy. The crisis of the national systems of bi- and tripartite bargaining has diminished the social-democratic movement’s capacity for intervention. The EU in particular, having denied itself most of the traditional instruments of an effective macro-economic policy (with the exception of monetary policy), will not easily be able to circumvent the ‘trap’ that it has inspired and set. Given this set of economic choices at national and community levels, which have subsequently become constraints (in part put in place by social democrats themselves), the radical reorientation of social-democratic economic policies becomes very difficult in the short, and possibly the medium, term. These constraints are all the more constraining in that they weigh on a social democracy with diminished resources at its disposal. To an extent that seems to us today politically incomprehensible and electorally ‘irrational’, social democracy has voluntarily destroyed many of its own instruments of economic intervention. Hence it is not at liberty to choose a ‘new future’. That is why it restricts itself to a ‘minimalist’ administration of the economic and social question which is coherent, and in perfect conformity with its ‘minimalist’ ideological/programmatic profile. As its policies in recent years demonstrate, social democracy tries modestly to ‘mitigate’ the present – and not always even that.
Even ideas – and sometimes initiatives – of ‘modest correction’ clash with the very ‘orthodox’ orientations of the European economic establishment, European bankers, and international economic organizations. At the level of the EU, they also run up against the fact that the differences between member states are considerably greater than the common ground. The left is not a ‘European political subject’; hence – at least in the medium term – it cannot be a ‘global political subject’.11 But even if we accepted the hypothesis that such policy proposals could be implemented, their impact would be somewhat limited. Without supervision of the freedom of international markets and capital mobility (and not only financial capital mobility), a change of paradigm in economic policy is virtually impossible. In the medium term, any politics which wants to defend the social state and public services, and reduce economic and class inequalities, but abstains from posing the issue of neoliberal globalization, will be irrational and ineffective. To put it simply and pragmatically (partially borrowing Torben Iversen’s terms): if social democracy does not attempt to influence the process of globalization, and if
the principle of economic efficiency is going to be a cornerstone in the social democratic strategy, as it has in the past, then monetarism and sector-or industry-based wage bargaining must be accepted as the institutional foundations for the economy, despite their antithetical relationship to traditional socialist commitments to wage solidarity and full employment.12
Accordingly, there will be no social-democratic politics worthy of the name without a re-regulation of ‘globalized’ flows at continental and global levels – without ‘throwing a grain of sand into the well-oiled cogs’13 of capital mobility (and not only financial capital and financial speculation, which are merely its most conspicuous aspects). What is involved is not a return to the state and its regulatory activity (globalization has favoured state activity, and multiplied the legal and institutional ‘nets’ that ‘regulate deregulation’),14 but the content and objectives of that activity. Faced with neoliberal modernizaton and globalization, the political and social forces that aspire to more justice must employ ‘modern’, ‘global’ weapons. Globalization is not an obstacle to growth, yet it sets in train a profoundly inegalitarian dynamic.15 Hence it is not possible to redistribute the inegalitarian results of globalization without acting on it.
Social Democracy, a Force for Macroeconomic Destabilization?
If it is governments (including social-democratic governments) that have (actively or passively) decided to deregulate international financial markets, and introduce the institutions characteristic of market capitalism into national economic spaces, reasserting control over these markets and institutions is a plausible political move (just as the move to deregulation was politically plausible), but difficult to achieve. In fact, all those who aspire to change the international economic and financial architecture confront ‘a formidable problem of action and collective co-ordination: if it was easy to abolish national regulations, it is a lot more difficult to agree on an international re-regulation acceptable to all parties concerned’.16
Such a change in economic and financial policy presupposes challenging too many vested interests at international and national levels, too many of the certitudes of contemporary economics, too many ideological verities. It also involves the possibility, which should not be underestimated, of an economic – and consequently a political – confrontation with the United States. The USA occupies a very important place in the world economy and a hegemonic position over ‘the apparatus of production of economic norms’ (i.e. the bloc of international financial institutions plus the ‘set of expert institutions that elaborate the criteria of economic credibility of states’).17
Notwithstanding the theoretical controversies it provokes, globalization is a reality. And this reality, like every reality, has its own logic, produces results, and generates constraints. Once set in motion, globalization, real or perceived, has become part of the established economic order and, in consequence, is viewed as a factor of economic stability.18 Thus – at least to a certain extent – globalization creates globalization, and tends to be self-reinforcing. This disadvantages and discourages, demoralizes – even mortifies – all those who aspire to check it, since simply by virtue of their ambition they are aligned with the ‘camp of destabilization’. They are on the ‘bad’ side of history. They become supporters of a ‘leap in the dark’.
A ‘different’ politics (the famous autre politique, to use the French political term) thus involves ruptures and, as a result, electoral risks that are too significant to be envisaged by leaders and organizations preoccupied with, and haunted by, immediate electoral returns. Social democracy is a moderate political force – moderately neoliberal and moderately non-liberal. It is a prudent and electoralist force of reform, without strong convictions – a force for which governmental vocation has become a kind of ‘second nature’. It is as such, and because it is as such, that it currently dominates Europe.
Were social democracy to take another road, adopt a different economic and social policy, that would doubtless be intellectually highly stimulating and socially subversive, but social democracy – this social democracy – would not then be social democracy. Such a social democracy would unquestionably have to renounce ‘the politics of preference-accommodation (whether directed at capital or the electorate), in favour of preference-shaping’.19 In at least some cases (e.g. Great Britain, Italy), it would equally have to give up its ‘almost pathological preoccupation with respectability’.20 This would involve too many electoral risks for an ‘electoralist’, catch-all political force; too many organizational risks for an organization that is internally far from compact and close to the electoral-professional model; and too many intellectual risks for a force with a trans-border ideological profile.21 Thus social democracy would not be faithful to its ‘responsible’ and ‘pragmatic’ nature, and its ‘minimalist’ identity (‘a-programmatic’, in Mario Telo’s phrase). Which means: it would no longer be itself.
Fundamentally, social democracy’s freedom of manoeuvre today is seriously restricted. Its desire, whether rhetorical or real, to correct neoliberal logic is constrained by its past neoliberal options (of which ‘deflationary psychosis’ is only one aspect); by its strategy of prudence and moderation to appease the fears of capital (which did, after all, prove successful and was the condition of its accession to power); and by an organizational and sociological cartography that is scarcely conducive to policies involving a radical return to the ‘social’.
‘Governments must satisfy two electorates today: their national electorate and the international capital market,’ Colin Crouch and Wolfgang Streeck have written.22 Social democracy is a force for macroeconomic stability, and the logic of ‘destabilizing reforms’ (‘structural reforms’, to use a now-outmoded language) is not its logic. The adoption of such a logic would cause the impressive ‘modernist’ construction of contemporary social democracy to disintegrate. It would affect the sinews of war: the confidence of its ‘two’ electorates, the confidence of capital and the ‘markets’, national and international, and hence the confidence of the moderate electorate. Social democracy would thus align itself with the camp of economic ‘destabilization’, even its own political and organizational destabilization. Avoiding a major policy reorientation is the ransom to be paid for maintaining its ideological, organizational and electoral stability. The logic of ‘no major alternative’ – and even, in cases like New Labour or PASOK, ‘no alternative’ at all – is a central constitutive element in the new social-democratic identity, consciously and positively adopted as such.
Let us summarize. A radical reorientation of social-democratic policy runs up against the following factors, which ‘rule’ the universe of contemporary social democracy as well as the economic space of advanced capitalism, endowing them with their stability:
| (i) | the deficit in trade-union power and ideological and cultural influence; |
| (ii) | the blunted radicalism of the ‘oppositional’ left-wing forces; |
| (iii) | the new sociology of the social-democratic organizations, which confirms the hegemony of the middle classes; |
| (iv) | the interclassist format of the social-democratic electorates, by far the most interclassist in the history of social democracy, which drastically diminishes the social democrats’ capacity to adopt coherent policies benefiting popular strata, since it raises the potential electoral cost of such policies considerably; |
| (v) | the very ‘orthodox’ orientations of the European and global economic establishment, as well as the United States, the world’s greatest power; |
| (vi) | the absence of a European political system with strong public power; |
| (vii) | the differences in economic and social philosophy between the member states (the ‘clash of national interests’), which are often significantly greater than the common ground; |
| (viii) | the extreme heterogeneity of the various national welfare states, which precludes the construction of a European welfare state;23 |
| (ix) | the constraints resulting from past economic options (liberalization of markets, stability pact, autonomy of central banks at the national level and of the European Central Bank at continental level, etc.). |
A radical – which does not mean ‘anti-capitalist’ – reorientation of social-democratic politics comes up against all these factors, which are linked either with the deep identity of social democracy or with its environment, itself partly fashioned by its previous policies.
It is therefore hardly surprising if social democracy, whose economic policy is not identified with neoliberal conservatism, has opted for the politics of ‘small steps’ – something that is confirmed by its current economic policy. And if socialists and social democrats (or at least some of them) want a powerful, ‘neo-Keynesian’ Europe, they do not possess, and have not armed themselves with, the requisite institutional and political means. Consequently, as far as the wider horizon of major political alternatives goes, we are obliged to observe that social democracy is not – and does not propose – a major alternative to globalization of the neoliberal variety.
Victims, accomplices and instruments of the globalization and neoliberalization of economic priorities, the social democrats suffer from a deficit of alternatives. It is a deficit that neither the trade unions, traditional partners of the social democrats, nor the new and old protest poles have the power or ideas to make good. In the wrestling match that has opposed the logic of the market and the logic of solidarity for at least three ‘half-centuries’, the former is prevailing today – comfortably. A specifically social-democratic logic – not rhetoric – is virtually absent from the European political and social scene at present. The institution of a ‘social-democratic model of globalization’ – in Pervenche Berès’s terms, ‘social democratic globalization’ versus ‘liberal globalization’24 – does not seem to be on the agenda in the short or medium term.25 The absence of any major alternative is the major phenomenon of the past three decades.
Notes
1.David Held, Anthony McGrew, David Goldblatt and Jonathan Perraton, Global Transformations, Polity Press, Cambridge 1999, pp. 436–7.
2.Ibid., p. 426.
3.Robert Boyer, ‘La politique à l’ère de la mondialisation et de la finance: le point sur quelques recherches régulationnistes’, Recherches, L’année de la régulation, vol. 3, La Découverte, Paris 1999, p. 14.
4.Leo Panitch, ‘Globalization in Crisis: Bringing the (Imperial) State Back In’, paper presented to the ‘Politics Today’ conference in memory of Nicos Poulantzas, Athens 1999.
5.Gerhard Schröder, Le Monde, 16 September 1998.
6.Frank Vandenbroucke, Globalisation, Inequality and Social Democracy, Institute for Public Policy Research, London 1998, p. 18. The debate within the European Union, and a list of some of the policy proposals advanced, is eloquent: a less strict interpretation of the stability pact; co-ordinated reduction of interest rates; strengthening of European investment policies in trans-European networks (transport, infrastructure, energy, information technology), whose financing could in part come (following Jacques Delors’s proposal) from a major European loan; reorientation of fiscal policy in favour of popular strata, who have borne the burden of increased taxation within the current EU since the 1980s; harmonization of tax policy so as to avoid intra-European competition to attract capital; co-ordinated support for demand, etc. These proposals – which are not radical, and are far from having been agreed or applied – indicate the mindset of a number of European socialists, who are seeking timidly to correct the excesses of current orthodox policies. Needless to say, they do not really fit with the ‘spirit’ of the British approach.
7.Larry Elliott and Dan Atkinson, The Age of Insecurity, Verso, London and New York 1999, p. 172.
8.Ricardo Petrella, Le Monde Diplomatique, August 1999.
9.Perry Anderson, ‘The Europe to Come’, in Peter Gowan and Perry Anderson, eds, The Question of Europe, Verso, London and New York 1997, p. 130.
10.Torben Iversen, Contested Economic Institutions: The Politics of Macroeconomics and Wage Bargaining in Advanced Democracies, Cambridge University Press, Cambridge 1999, p. 57.
11.The phrase is Massimo D’Alema’s.
12.Iversen, Contested Economic Institutions, p. 175; emphasis added.
13.Howard Wachtel, Le Monde Diplomatique, October 1998, p. 20.
14.‘What is distinctive about contemporary globalization is the magnitude and institutionalization of its political regulation’, David Held et al. have written (Global Transformations, p. 437).
15.Jean-Paul Fitoussi and Pierre Rosanvallon, Le nouvel age des inégalités, Seuil, Paris 1996, p. 133.
16.Boyer, ‘La politique à l’ère de la mondialisation et de la finance’, p. 43.
17.Bruno Jobert, ‘Des États en interactions’, Recherches, L’année de la régulation, vol. 3, pp. 81, 83, 86.
18.Never mind the potential for destabilization contained in the new order, as attested, for example, by the most recent crises in Asia, Russia and Brazil.
19.Colin Hay, The Political Economy of New Labour: Labouring under False Pretences?, Manchester University Press, Manchester 1999, p. 158.
20.Leo Panitch and Colin Leys, The End of Parliamentary Socialism: From the New Left to New Labour, Verso, London and New York 1997, p. 19.
21.The resignation of Oskar Lafontaine, whose policy proposals, while not radical, ran counter to the suggestions of the economic establishment, was a moment of great symbolic import. This ‘forced’ resignation demonstrates the fear of socialist and social-democratic leaderships faced with a change of course in economic policy. In this sense, the ‘Lafontaine affair’ is a moment of assertion and confirmation of the identity of the new social democracy: Oskar Lafontaine was a potential destabilizing factor in a political family that has made macro-economic stability its standard-bearer.
22.Colin Crouch and Wolfgang Streeck, ‘L’avenir du capitalisme diversifié’, in Crouch and Streeck, eds, Les Capitalismes en Europe, La Découverte, Paris 1996, p. 19.
23.Jobert, ‘Des États en interactions’, p. 89; Giandomenico Majone, La Communauté européenne: un État régulateur, Montchrestien, Paris 1996.
24.Pervenche Berès, ‘The Social Democratic Response to Globalization’, in Rene Cuperus and Johannes Kandel, eds, European Social Democracy: Transformation in Progress, Friedrich Ebert Stiftung, Amsterdam 1998, p. 157.
25.Social democracy is not a force that will accept the risks. It will not really behave as a force of economic ‘destabilization’ – unless the destabilization comes from elsewhere. The crises in Asia, Russia and Brazil have shown the extent to which the credibility – and legitimacy – of the neoliberal paradigm of globalization can be undermined from within, by the financial and economic disorder it generates. Contemporary social democracy is a political force that is ideologically and programmatically highly composite. Now, the peculiarity of ideological/programmatic amalgams and patchworks is invariably to produce ambiguities and contradictions, but also to leave open or half-open different – and often contradictory – possibilities. Or to induce paralysis. In the event of a major financial crisis – and this is merely hypothetical – the regulatory intervention of states, and the EU in particular, would emerge as a solution to resort to, a credible, innovative and, above all, necessary solution to the impossibility of self-regulation of market forces by themselves. The disorder a ‘crisis’ would produce would be such as to reactivate the non-liberal dimension, the ‘heretical core’ of the ‘social-democratic soul’ (Hay, The Political Economy of New Labour, p. 183).