A fortnight ago I made the case that the social democratic project in the West is under stress and may come unraveled. This does not mean I think it was a mistake. On the contrary, it was a brilliant achievement in its day.
During the dark years of the Great Depression neither democracy nor free market capitalism seemed likely to survive. Fascism and Communism presented themselves as the only truly modern approaches to political and economic life, and their followers strutted, arrogantly confident that the future was theirs.
Communism promised a Revolution that, in one great act of political will, would put an end to the agonies of the era. This was very alluring. After all, when men and women with a strong sense of social responsibility faced the vast problems of urban poverty, corrupt politicians, and endless labor strife, it presented what seemed like an endless and exhausting and finally futile struggle. Thus, when Lincoln Steffens, a turn of the century Progressive, wanted to promote the cause of the Soviet Union after visiting in 1919, he said, “I have seen the future, and it works.”
Fascism had its own mythology of inevitable triumph, and it appealed less to idealist and more to those with a pragmatic bent. Few fascist fellow travelers were enthusiastic about Mussolini’s grandiose pageantry or Hitler’s ruthless rhetoric. But like the Progressives of the same era who were tempted by Communism, they had an exhausted sense that nothing else would work. As people used to say, at least Mussolini made the trains run on time.
Thus the achievement of social democracy. A vastly expanded social safety state and the hugely enlarged regulatory state consistent with a modicum of democratic accountability and economic prosperity? It worked, and thus the liberal consensus became the Establishment consensus.
Yes, it worked, but there is a law of social existence akin to the second law of entropy. As St. Augustine observed, the city of man cannot know true peace, for it is always being convulsed by the futility of its worldly desires. Whether the inevitable creative destruction of economic progress or the more obvious traumas of market bubbles and bank panics, whether bitter political conflicts or cold and hot wars, social life is always seething with instability.
Over the last fifty years social democratic regimes have evolved and adjusted to contain and moderate these instabilities, which at every juncture was a good thing. However, as forest managers now know, if we put out all the fires for generations—which is to say if our goal is to maintain forest “stability” year in and year out—the fuel for a catastrophic fire builds and builds. Eventually, through no fault of their own, the forest managers face a fire they can’t manage, one that is far bigger and more destructive for having been put off for so long.
As I suggested in my last column, that may be our situation now. The long-term success of social democracy has insulated us from some of the inherent instabilities of social existence, especially the relentless process of creative destruction that must be part and parcel of a growing economy. This has built up fuel on the forest floor of society, as it were.
Now a fire has broken out. The financial crisis of 2008 was a huge blow. The large-scale consequences were contained and moderated by tools of government intervention developed during recent decades. But now the underlying solvency of these tools is being shaken in the sovereign debt crisis. In midst of all this, most of us are now coming to realize that we are far more economically vulnerable than we had realized.
The political imperative of our time is to face up to this economic vulnerability. We are supremely adaptable animals, but we can’t respond intelligently and creatively to challenges if we insist on denying them and keep them at arms length.
To my mind, the core of the European Union is currently in a state of denial. The Greeks have become keenly aware that their future will involve “austerity,” a clinical word that means reduced standards of living for most people. However I don’t think the average Frenchman or German or Italian has faced up to the fact that they are vulnerable: to devaluation (most likely through inflation), increased taxation, or cuts in benefits—or more likely a combination of all three. The great relief that follows when “technocrats” take power suggests the hope that expert financial managers can put out the fires. The European Union is “all in” when it comes to social democracy.
The situation is different in America on two counts.
First, we’re more like the Greeks than the Germans, or at least a good portion of us are. The feeling of economic vulnerability is palpable in the Occupy Wall Street movement. The recent college graduate tells the reporter that he has $50,000 in student loan debt and no job. Then he asks a question that he clearly thinks condemns the current system: “What am I supposed to do?” The same sense that we are close to being disarmed and unable to face the future provides a great deal of the motivation for the Tea Party, whose push to cut, cut, cut in order to survive reflects a profound sense of vulnerability.
Second, where Europe is moving toward greater and greater political consolidation, as the call for technocrats to govern indicates, since the breakdown of the liberal consensus in the 1970s, American political life has become more and more strident and divided. Today the political differences are very raw.
This causes a great deal of dismay among ruling elites. Many commentators see our increasingly bitter political divisions as a threat to a stable and orderly governing class capable of making policy adjustments to pressing problems. That’s true, but perhaps good rather than bad. Our divisive politics, however dysfunctional when it comes to policy, is now increasingly linked to our keen sense of vulnerability, which means that the political gridlock is gridlock of the real issue.
Tax vs. cut? In a very crude but real way we are moving toward a referendum on the single most important political issue of our time—the future of the social democratic project.
R.R. Reno is Editor of First Things. He is the general editor of the Brazos Theological Commentary on the Bible and author of the volume on Genesis. His previous “On the Square” articles can be found here.
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R.R. Reno, The End of Social Democracy
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Comments:
Nowadays, when governments depend for their legitimacy on media coverage and the cult of personality, it is pretty generally recognised that welfare cheques, drug-dealing and cheap alcohol are indispensible guarantees of the political order.
One of the principle failures of our modern endeavor is the hubris that everything in nature, and all human activity, is reducible to scientific rules and management. Wisdom would have us proceed in these areas with great caution and recognize that often we do not understand the complexities of the real world. We interfere in the natural order of things to our great peril.
But human pride makes this wiser approach to the realities of life quite unlikely.
Thank-you for offering the simplistic, doctrinaire Libertarian explanation. And here I was thinking it might be a tad more complicated than that.
I would be interested, however, in learning what the author means by "creative destruction." From the context, I surmise that it means letting some businesses fail so that others can grow in their place. In other words - the government shouldn't be "propping up" inefficient industries, which makes lots of economic sense, but rather threatening if you are employed in those industries.
Given the flight of industry to countries with dirt-poor people, what exactly are the working classes in our country supposed to do to support themselves if we have no industry? Or is the point that we should allow wages to fall to a point where they can compete with those in the third world?
The really scary thing is that we have almost systematically created a whole class of people dependent on a social safety net that we are now going to have to abandon, at the same time that the jobs that used to fund that safety system are largely gone. How this is going to end well is beyond me. God help us.
I agree that we are getting close to a false sense of security. Relying on lotteries to fund public services like education, are you kidding me? It's amazing to think that a lottery, a thing which you pretty much have to have poor education to play, is the thing that is promoting some of our schools.
If it represents unfunded liabilities due to political promises made today but paid off in the distant future, then I would say the analogy works well. The problem with the social democratic project is that there is overwhelming temptation to give out goodies today, for votes today, but with the burdens on the next generation. There's no downside for the politician, who will be in comfortable retirement by the time the bill comes due.
Social security is a great case in point. Here it produces not only the political benefits of promised future payments and insurance, but also provides a stream of taxes today. There are no constraints on what the taxes can be spent on, no fiduciary responsibility to invest the funds in a sound portfolio (such as there would be, by law ironically, for a private-sector financial company selling insurance or a retirement plan.)
So take the money provided by the earners, who also vote for you because of the promise of "security," spend it lavishly on the non-earners to buy votes from them as well. Call it "social justice"--the church leaders will love it. Doesn't matter that actuarially the scheme must fail at some point in the future. The pols need the votes now.
In his great encyclical letter Centesimus Annus, Pope John Paul II warned about what he called the "Social Welfare State." Would have helped if we had listened 20 years ago. It would help if we were listening now. But we're not. When the article says the Greeks know they must face austerity, it overlooks that the Greek populace does NOT know any such thing--note the riots in Athens.
The working classes of America need to quit depending upon others to give them jobs. Individuals are their own best resources. For too long, Americans have been led to believe that someone else owes them a living; whether the government with welfare checks, or employers with wages, the dependency is the same. Individuals are their own best resources, and instead of spending time demanding that someone else take responsibility for paying their bills or their student loans or whatever by hiring them (which is always self-serving: hire me because I have need money to support my needs, rather than hire me because I can serve your business well with my abilities), individuals need to assess their abilities and find a way to market what they can offer to other people. Self-employed people have much more control over their employment situation, and they can also end up building business to the point where they actually create jobs for employees who actually have skills and abilities that can be used to help the business succeed. Self-employed people are also too busy to stand in parks and protest all day because they're unhappy about the direction their lives are going and demanding that the government help them by taking, by force of law, resources from those who actually work. One of the many reasons our government is in financial trouble is that it has long encouraged individuals to believe that they have a right to home ownership, college education, jobs - anything they want - regardless of their own sense of responsibility, development of personal skills, etc., and has manipulated every aspect of American life to become everything to everyone, and to guarantee personal happiness to every individual who has a demand but who is unwilling to accept responsibility for seeing to his own happiness.
Just because third-world factory workers will work for 50-cents an hour doesn't mean they're more productive than Americans. The United States, and other advanced economies, have high-speed precision automation that a human being can't compete with even if they work for free. They can't turn out the quality that a computerized machine can. So very often, the key to staying viable (as an employee) is to divorce yourself from old methods and old-style unions that cripple American productivity with misplaced priorities. Concentrate instead on training, training, and more training.
Industries go overseas only after we kill them here (with our stupidity)--not before. To prevent it, concentrate on obtaining a first-rate education that continues as long as you're still working. If unions would concentrate more on continuing education, and less on retirement goodies, they might have a place in the modern world. If your company is the best and most efficient in the world, at what it does, that's what secures your job and your future. Unions and strict work rules, not so much.
I don't see how this balance can be established without a great deal of pain, and I don't see how we can expect the populace to tolerate the country's tremendous wealth gap in times as hard as I expect. I wish I had the wit to offer realistic solutions rather than than just pointing out problems obvious to all, but I don't.
Feeling our pain,
Richard
"Thus the achievement of social democracy. A vastly expanded social safety state and the hugely enlarged regulatory state consistent with a modicum of democratic accountability and economic prosperity? " The result of this achievement was to smother self-governance, entrepreneurship, personal responsibility, economic vitality, and confidence. It resulted in a tinderbox that at the first spark, or toxic loan, set off a firestorm that still threatens our economic destruction. Our form of progressivism may have been less toxic than its cousins fascism, nazism, and communism, but it still is toxic (40+ million aborted babies may think even less of these achievements, though). We may have kept the forest pristine for our use, but we are killing it for posterity.
Bureaucratic social safety nets breed covetousness; technocratic regulatory systems foster dependency and vulnerability, and their intrinsic lawlessness spawn contempt for the laws of nature and nature's God. We can give those who suppressed every fire in our forest the benefit of the doubt of good intentions (especially we all were either complicit or benefited), but until we embrace the fire of liberty and let it burn its natural course, our forest will die in a conflagration of anarchy or under the smothering dead wood of totalitarianism.
See, this is why we need classical education. Only a "conservative" with such a provincially ignorant, American understanding of human nature could have come out with something so right-soundingly wrong.
Society, in fact, does owe every member the opportunity to earn his living. If a man or woman cannot, within the economic system, earn a decent living to support a virtuous human life, that society is unjust. It is wicked. No man is an island, however much libertarians might wish it so. Of course there is a dependency, one man upon another. I would lay pretty significant odds that not a single one of us reading this blog would be able to survive on our own if we were dumped out into the Canadian wilderness by ourselves. And living a virtuous human life involves so much more than mere survival.
Furthermore, in every society the standards of virtuous living are somewhat relative given the wealth and organization of that society. The standard of living that Americans owe each other the opportunity to earn is higher than the standard which Sudanese society owes its citizens.
These Occupy Wall Street-types represent, no doubt, an extremely obnoxious element of post-collegiate youth, but for every moron tom-tomming his days away in Zuccotti Park there are hundreds pounding the streets looking for a job and not finding one.
"Self-employment" is not the answer. I assume by "self-employed" you mean someone who goes out and finds a need that society has and fills it, entrepreneurial style. This assumes a kind of personality and an intelligence that is by no means common in the human race. There are many, many people who do very well in their jobs but who are fundamentally unsuited to conceiving, starting, and running a business. To condemn these people to a life doing something they're not very good at is unjust and unnecessary.
