The End and the Beginning: The Revolutions of 1989 and the Resurgence of History

Cornel Ban: Was 1989 the End of Social Democracy?

cornel Ban Was 1989 the End of Social Democracy? 1989 and Social Democracy Did 1989 put the last nail in the coffin of European social democracy? Some scholars have echoed the popular view that whereas the socialdemocratic parties of Europe began to get closer to economic liberalism during the 1980s, it was not until 1989 that their “need to cut loose from the past” saw a marked surge. Anthony Giddens wrote that social democrats’ “need to cut loose from the past received a further dynamic charge from the collapse of east European communism in 1989.”1 Tony Blair echoed him by linking the rise of the Third Way to the “death of socialism.” And even acerbic critics of the Third Way like Tony Judt saw 1989 as one of the most decisive moments in the existential history of social democracy, based on his reading of 1989 as “the death knell of a 200-year promise of social progress.”2 Such arguments imply that there was some kind of affinity between social democracy and Leninism through their common origins in the Marxian legacy, and that the end of one would entail the moderation the other. But why would this be the case? Why would the loss of the social-democratic faith in progress and eventual flirtation with conservative economics be tied to the fate of real-existing socialism, given their very different readings of the objectives of politics before and then during the Cold War? Why would the social democrats’ abandonment of Keynesianism, the economic paradigm meant to save the 1 Anthony Giddens, The Third Way: The Renewal of Social Democracy (Cambridge: Polity Press, 1998), 17. 2 Tony Judt, Ill Fares the Land (New York: Penguin Press, 2010). 128 THE END AND THE BEGINNING market economy, have anything systematic to do with the terminal crisis of East European central planning when Keynesianism had been a faux pas in this region even before the Berlin Wall went up? This paper argues that 1989 came after Western social democracy had abandoned the revisionist terms of the postwar welfare Keynesianism and forged the terms of a “Third Way” compromise between neoclassical economics and a “social-liberal” reading of the welfare state. The historical evidence suggests that the end of state socialism in Eastern Europe happened years after European social democrats had abandoned some of the main pillars of their postwar socio-economic project. Thus, rather than be affected by the meltdown of real-existing socialism, the causes of social democracy’s decline were instead endogenous to debates within real-existing social democracy. This should not come as a surprise. Social democracy and state socialism had been ideological foes for almost seventy years and, Hayek’s doomsday predictions notwithstanding, West European socialdemocratic institutions deepened political liberalism rather than throw it down the slippery slope to totalitarianism. The contribution of this article to the literature is twofold. First, it provides the first systematic attempt at clarifying the connection between 1989 and the decay of “classical” social democracy. Second, while previous scholarship on the crisis of social democracy emphasized the role of material constraints, this chapter contributes to those emerging constructivist readings of this crisis that emphasize the importance of economic ideas rather than of political party ideology. To this end, the bulk of the paper examines very closely the intellectual context within which social democracy lived its transition from Keynesian to orthodox neoclassical (or “neoliberal”) economics during the late 1970s and early 1980s. The contribution first historicizes the definition of social democracy in order to clarify what this concept meant before 1989. Next, it delves in a comparative analysis of the intellectual and institutional pillars of the Keynesian moment, its crisis and the eventual rise of neoliberalism . The last section of the paper uses secondary literature to look at the timing of the opening of social democratic parties’ opening to neoliberalism. 129 Was 1989 the End of Social Democracy? What Was Social Democracy? THe core and THe PeriPHery of THe concePT Born as a revisionist Marxist project at the cusp of the twin ideological crisis of late nineteenth-century orthodox Marxism and classic liberalism,3 social democracy became known as a political ideology, movement and institutional complex geared to tailor capitalism to the interests of workers and the lower middle classes via the political conduits of bourgeois democracy and the building cross-class political alliances . Yet beyond this definitional “core” one also sees a...