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Home Opinion International social democracy on a one way street

International social democracy on a one way street

Barbara Harriss-White - 19 October 2010

Internationalism once lay at the heart of the progressive movement, yet in recent years the idea appears to have lost its appeal for many social democrats. Responding to this trend Pascal Lamy argued to Policy Network that the globalisation of capitalism requires a response of equivalent ambition and boldness from social democrats. In this essay series key thinkers debate the challenge laid down by Lamy.

In his speech, Pascal Lamy diagnoses what others have called a crisis and what he terms an upheaval. We are living through a crisis that is unresolved, and so far appears irresolvable.

The capitalist system is dynamised by tensions and contradictions, primarily between capital and labour on a global scale. A further tension is between usefulness and need on the one hand, and commercial value and speculative returns on the other. The financial upheaval – which frames Lamy’s speech – was triggered by the latter tension in the housing sector. This type of tension also triggered the global food-grain price spike, which in turn fuelled domestic speculation on food commodities in developing countries, which in its turn has added hundreds of millions to the world’s food insecure and undernourished. The pricking of the housing loan bubble triggered a massive financial crisis, the solution to which created a crisis of sovereign debt, the response to which has and will create a crisis in employment. The “upheavals” and their costs are shifting continually and are finally coming to be paid by workers and those who are vulnerable through various kinds of social dependence.

Lamy rightly said that “the contradictions of market capitalism are still with us”. Indeed, they are at the core of a social democratic politics that has “lost its relevance”. Social democracy has been undermined. At the same meeting at which Lamy delivered his speech, Jens Stoltenberg, Norway’s PM, deplored the fact that social democratic political elites were no longer prioritising employment and security (Beveridge’s five Giant Evils: squalor, ignorance, want, idleness and disease, which still haunt the entire world).  In the 1990s Samir Amin had already called social democracy “low intensity democracy”. It has been weakened to the point of disappearance by the dynamic logic of capitalism. Fear of the credit rating agencies has narrowed electoral debate down to a single one-way street. At the last British election urgent issues such as climate change were taboo. The political class also insults the electorate by freely disregarding manifesto commitments and by a shameless politics of omission and amnesia. 

Capital does not only invent new useful and exchangeable goods; it must commodify, and turn into fields of profit, whatever is not commodified. This it does relentlessly. Ursula Huws has shown, for example, how the 20th century saw most things in the home commodified and how women’s work was radically changed as a result. Capital also commodifies the public sphere. Not only has capital privatised state-owned enterprises – and in a non-transparent and costly manner with no especial social benefit – it must and does commodify the core functions of the bureaucracy, too. Colin Leys has examined this process and shown how outsourcing policy and regulation means the loss of institutional memory, a sharp decline in the quality of information available to the state, embedded conflicts of interest and weakened regulative and strategic capacity. And the state is now being disembowelled, on the pretext of cutting fiscal deficits, at exactly the moment at which developmental states are needed – states with the autonomy and clout to drive a new industrial revolution.

Lamy’s "essential dimensions" of this post-upheaval era

Lamy argues that capitalism is unsustainable and that social welfare must be rethought on a global scale. For him, three essential dimensions need emphasis.

Firstly, globalisation is transforming the domination of labour by capital through technology that dissolves the distinction. But the fact that capital and labour exist in fluid relations in the so-called knowledge economy doesn’t dissolve the distinction as it operates in the global economy as a whole, or reduce the domination of capital over labour. The operation of the value chains in the extraction of metals and minerals, the manufacture and distribution of textiles, cars or food makes that unambiguously clear.  Indeed the ILO, next door to the WTO in Geneva, has been calling for the global reform of social welfare and security, along with “Decent Work for All”, for the last 15 years. The WTO has paid little public attention to the case for, or the politics needed to secure, rights to work, rights at work, rights to organisation and dialogue, and rights to social security.

A second essential dimension is the rise of populations whose “culture is not of Western origin” and “which do not rely on the capitalist anthropological codes according to which man is wolf to man”. From the early 20th century Max Weber showed – in a compendious project, only one part of which is now well-known – that all the cultures he examined could and did absorb and accommodate capitalism. The idea that they could not is a common caricature of Weber. Weber’s Protestant ethic was an enquiry into the origins of capitalism, not of its diffusion.

Thirdly, the “capitalist model” is environmentally unsustainable and a different growth model is needed. As early as 1850, when the US agronomist Henry Carey called capitalism a “robbery system”, he was referring not to the exploitation of labour, but rather to the fact that capitalism cannot and does not make restitution to nature. It is nothing short of a tragedy that progressive social forces are classes which break the nutrient and mineral cycles – and that waste is decomposed and recomposed into potentially useful physical forms at paces that are completely out of kilter with the rapid cycles of capitalism. The new model has to be based on restitution, renewable energy, public infrastructure at the cutting edge of physical resource lightness, and Decent Work for All. But every country currently has locked-in massive support measures for fossil fuels; fossil fuels and nuclear energy have the most influential lobbies; new technology is protected by intellectual property rights and by various national political projects for world technological leadership. It is obvious we need a Climate Service with enforcement powers, to energise a new industrial revolution. But it is very hard to see how this is to happen.

The new approach

Lamy makes a powerful case for the regulation of global capitalism: first and foremost for human development and social security, next for financial activities and last for revenue, energy and the movement of people. Across the park from the WTO, in the UN Geneva building, UNRISD – tiny and precariously funded – has been striving for the last five years, along with UNDESA and UNDP in New York, to put flesh on exactly this project. UNRISD has been arguing, with persuasive evidence, that Lamy’s sequence is misguided: unless finance capital is regulated first there will be no resources for the international regulation of other forms of capital or for global social welfare or for other urgent priorities such as the renewable energy revolution.

To do any of this we need to establish a “collective framework of values that are currently lacking in the area of justice, fairness and profit-sharing”. Lamy has no advice on how the physicians will heal themselves or how this can happen in a world in which some states have to manage the fall-out from primary accumulation, including the acquisition and even seizure of land-based resources by capitalists and foreign states, while others manage the fall-out from advanced forms of capitalism which displace employment. Meanwhile, the needed “collective framework of values” is actually emerging through groups with shared interests such as the Shanghai Cooperation Organisation, and new international networks of states with shared interests:  not so much the states of the BRIC (a grouping conceived in the West and reflecting our perspectives and interests) as of Brazil-South Africa-India (a grouping developed by them) – or this group plus Indonesia and China but minus Russia, which as Europe’s major extractive economy has interests in the EU .

At present, of course, this is by no means a project in global social democracy. The values of these state-based groups are overwhelmingly competitive, based on economic interests and military and material security. The emergence of alliances and understandings between labour unions, in civil society networks, between teachers and universities and between people in the creative arts and media in these new alignments lack any of the power of the military-industrial-energy complexes.

“Trade unions should unite” with progressive forces, writes Lamy. But trade unions are progressive forces, demonised by the media and the capitalist elite, and by “centre-right” political classes and parties. They are critical to any well-ordered, advanced economy. They need to be given a major role in the public domain, and to take responsibility commensurate with that role – the reverse of what has happened. Lamy does not mention the systematic disempowerment of labour inside the UN system in which he works.  UNRISD, which might be developed for global social policy, is an ideas house; the ILO operates with a ball and chain because, unlike the WTO, it has no powers of enforcement. The UN needs reform and these existing UN organisations need to be empowered.

In his appeal to internationalism in social democracy Lamy does not address the need to de-commodify the state and restore public service in the public interest. But unless these major processes are accepted as a prior requirement for domestic political projects, how can anything move globally in the direction for which he yearns?

Barbara Harriss-White is professor of development studies and director of the Contemporary South Asian Studies Programme, Oxford University

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The Policy Network Observatory promotes critical debate and reflection on progressive politics. It is centre-left orientated but determinedly challenges social democracy. It is pro-European but restlessly questions EU institutions and practices.

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