April 30, 2012 1:16 am

The travails of Europe’s centre left

A stimulating set of essays shows how the 2008 crisis exposed the flaws in the marriage of economic efficiency with social justice

After the Third Way: The Future of Social Democracy in Europe, edited by Olaf Cramme and Patrick Diamond, IB Tauris, RRP£14.99

A mere 12 years ago, the centre-left governed France, Germany, Italy and the UK – Europe’s four largest economies – and was soon to come to power in Spain. The age of Tony Blair, Lionel Jospin and Gerhard Schroder appeared to be a golden age of social democracy: politically confident, economically successful and intellectually creative.

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Today, the European centre-left, ejected from power and confused about its future, displays little of that self-confidence. The election of Francois Hollande as France’s president next Sunday would lift spirits, but would not necessarily trigger a rebound in the centre-left’s fortunes elsewhere. After the Third Way is a collection of 15 essays by politicians, professors, political strategists and pundits, who describe what went wrong and suggest how to put it right.

The contributions vary in quality, but it is a stimulating book that contains many perceptive observations. I particularly recommend the essays by Andrew Gamble, head of Cambridge university’s politics department, and John Kay, visiting professor at the London School of Economics and an FT columnist, on the centre-left’s struggle to establish a reputation for economic competence.

Starting in 2008, the financial and debt crises cruelly exposed the illusion that social democratic parties had mastered the art of harnessing markets in the service of the welfare state. The “third way” – the marriage of economic efficiency with social justice, presided over by a benign and self-limiting state – had reached a dead end. However well-intentioned, its simultaneous embrace of freewheeling financial markets and extensive social provision did not, in a real crisis, amount to an economic policy.

Kay’s critique is devastating: “The centre-left offered no diagnosis, no new ideas and gained no electoral advantage. The political parties, which had waited a century for capitalism to collapse under its own contradictions, congratulated themselves that the collapse had been staved off by the injection of simply incredible amounts – trillions of dollars – of taxpayer funds into the banking system.”

 

Moreover, as Gamble observes, centre-right parties tend to adapt better than their opponents to economic crises. In our times, the centre-right has skilfully associated the centre-left in the public mind with Big Government– a bloated public sector and incoherent welfare policies quite unsuited to emerging from crisis. Such associations mean that social democratic parties are paying an even heavier price than was to be expected.

The centre-left was already suffering from the long-term erosion of its working-class base under the pressures of globalisation and technological progress. Now it stands accused of failing to address its voters’ concerns: not only economic inequality, job insecurity and stagnant wages, but – just as important – social anxieties over national identity, community cohesion and the integration of non-European immigrants.

In this context the book’s most important chapter is the essay on immigration and welfare by Rene Cuperus, a researcher close to the Dutch Labour party, and Mark Elchardus, a sociology professor at the Free University of Brussels. They argue that education and the labour market drive integration of newcomers into European societies, but that young Muslim immigrants in particular have poor qualifications and job prospects.

Since countries with strong welfare states tend to have well-protected labour markets favouring insiders, immigrants are excluded from jobs and become over-reliant on welfare. “The combination of overburdened and segregated educational systems, closed labour markets and open welfare states has turned out to be a recipe for social disaster,” Cuperus and Elchardus write.

Voters blame social democrats for failing to prevent immigrants making inroads on the welfare state. Meanwhile, fragmented political landscapes allow rightwing populist parties to emerge. When social democrats fight these forces, they end up in “a cocoon of political correctness” that blinds them to the intellectual shortcomings of multiculturalism.

After the Third Way offers no single set of solutions to the centre-left’s problems. Some writers emphasise the dangers of rejecting globalisation and some insist on the need to tame markets.

Some plead for more civic engagement and popular democracy and some see concentrations of wealth and power as the real enemy. Most agree that the economic and social conditions that gave social democracy its historical chance – self-contained nation-states, homogeneous working classes and the mass political parties to which they gave rise – have gone for ever. If the centre-left in its present form is to flourish again, it must start treating the causes rather than the symptoms of its decline.

tony.barber@ft.com

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