Social Democracy in Search of Its Identity           

Julian Mueller-Kaler

Stimson Center

Julian Mueller-Kaler is the Director of the Strategic Foresight Hub in the Executive Office at the Stimson Center and also serves as Chief of Staff to the President and CEO. He coordinates and manages special projects, advises on strategy, and supports institutional advancement. As director of the Hub, he researches global trends, evaluates the implications of emerging technologies on society and politics, and writes about the rise of populism, US-China relations, and the future of the liberal international order.

Before joining Stimson, Mueller-Kaler was a resident senior fellow with the Atlantic Council GeoTech Center and the Scowcroft Strategy Initiative where he worked on the geopolitics of technology and lead the GeoTech Center’s AI Connect program – a joint work stream with the U.S. Department of State that encouraged the responsible stewardship of AI technologies in the Global South. He also serves as a non-resident fellow at the American-German Institute, is an associate fellow at German Council on Foreign Relations (DGAP) in Berlin, and previously consulted in the office of the German Executive Director at the World Bank Group. Mueller-Kaler graduated as a Fulbright-Schuman scholar (MA) from Georgetown University’s School of Foreign Service and holds a degree in International Relations (BA) from Zeppelin University in southern Germany.

He was a 2017-2018 participant in AICGS’ project "A German-American Dialogue of the Next Generation: Global Responsibility, Joint Engagement," sponsored by the Transatlantik-Programm der Bundesrepublik Deutschland aus Mitteln des European Recovery Program (ERP) des Bundesministeriums für Wirtschaft und Energie (BMWi).

Despite untamed global capitalism and growing inequality within advanced economies, the traditional left continues to be in sharp decline. Social democratic parties lost significant support in almost all Western democracies, seem unable to satisfy public calls for economic protection, and are undergoing a substantial identity crisis. The situation for Germany’s SPD is no different, as its indecision toward the Grand Coalition and the de novo quest for leadership illustrate. For the proud party, whose roots go back to the early nineteenth century, the current crisis resembles a bitter humiliation. Far away seem moments of glory, when Friedrich Ebert became the first democratically-elected president of Germany in 1919, when members of parliament risked their lives to oppose the Nazi seizure of power in 1933, or when Social Democrats defined and implemented the idea of a social market economy in postwar Germany. Numerous leaders have tried to restore the party’s past grandeur over the last couple of years, but approval ratings only knew one direction: downward.

At the same time as public support diminished, right-wing populists entered the political landscape in Germany, making the weaknesses of traditional political forces even more relevant. If federal elections were to be held next Sunday, current polls indicate that the SPD and the Alternative for Germany (AfD) would gain roughly an equal number of seats in the Bundestag. These staggering numbers are reason enough to look at the bigger picture, namely the rise of populism and the simultaneous decline of the traditional left. Both stand for a profound paradigm shift in modern politics and might as well be two sides of the same coin. The promise to guarantee protection in a world of threats and pervasive disarray once was a cornerstone of left-leaning ideologies. It now has become the malicious reasoning for populists to rail against immigrants, globalization, and the political establishment.

Populism as a Rhetorical Style of Politics

In order to develop this argument further, a brief discussion of populism itself is indispensable. Most political actors as well as commentators understand the phenomenon as a (thin-centered) ideology, pitting “the corrupt elite” versus the “pure people” who insist that politics must serve the volonté général. They argue that populism generates a movement spurred by charismatic leaders who seek government power and have no scruples about using the people’s favor to exercise their will without constraints. Such an understanding often leads to the conclusion that populists disrespect pluralistic societies and are out to undermine existing institutions, ultimately posing a threat to liberal democracies. All of this is, of course, not wrong, but misses the larger point. There is no doubt that populism is a dangerous force, because it can bring in its wake authoritarianism, nationalism, and jingoism. But it is important to recognize that the main sources of its appeal are popular dissatisfaction with the status quo and growing public distrust of establishment institutions. The phenomenon’s rise is ultimately an expression of social protest, based on legitimate and perceived grievances that existing elites have failed to address. Simply put, it is a symptom rather than a cause.

The phenomenon’s rise is ultimately an expression of social protest, based on legitimate and perceived grievances that existing elites have failed to address.

The point of departure for a better understanding of populism is, therefore, the aggregation of unfulfilled social demands, such as economic security, democratic participation, or a court system that only looks after majority interests. If public confidence in the problem-solving capacity of government institutions has been shaken, a rhetorical divide develops, pitting the status quo, existing elites, or other populist foes on one side and the people’s interest on the other. The establishment is pilloried for the non-fulfillment of social claims, and the “we against them” dichotomy is established. Populist rhetoric thereby helps to overcome feelings of perceived powerlessness, translating them into a positive sense of collective self-empowerment. The original frustration of non-fulfillment transforms into political energy, which in turn expresses itself as an antagonism to the real and imagined perpetrators of the sources of disappointment. Within such a movement, existing demands can differ fundamentally from sub-group to sub-group. At times, they may even contradict one another. But once aligned in opposition, populists combine and form a unified front, blaming the opposite side for whatever frustration “the people” feel. This amalgamation of different grievances leads to extremely high levels of mobilization, effective above all when there is in place the highly provocative division of “people” versus “elite.”

Deteriorating Trust in Democratic Institutions

A theoretical approach that is supported by empirical evidence, too. Studies have shown that there is a strong correlation between low trust in the problem-solving capacity of national parliaments and the electoral successes of populist parties in Europe and the U.S. The states of affairs that were targets for populist leaders in recent years are multiple features of a neoliberal globalization, enacted since the conservative revolution of the 1980s.

The AfD, for instance, continues to attack the political establishment, immigrants, and global economic forces as well as institutions that allegedly take advantage of Germany. Similar tactics have been adopted by insurgent, populist actors across the Western world, including Donald Trump in the United States, the United Kingdom Independence Party (UKIP) in the wake of Brexit, the National Front (RN) in France, and the Law and Justice Party (PiS) in Poland. Each pledging to return power to their nation by fighting back against global forces that have caused their people ill—real or perceived. What all these movements share is a stark anti-establishment orientation, a claim to speak for the people, and an opposition to liberal economics and globalization. In all cases, populist candidates effectively consolidated themselves as political outsiders, promising to “drain the swamp” and take back control from “corrupted elites.” Of course, when they come to power, quite the opposite is true, as examples in the United States, Poland, or Hungary demonstrate in tragic manner.

Free trade and the spread of capitalism has always been a net good, not an absolute one, and if the main purpose of today’s global order is economic efficiency, it is naturally going to cause economic and industrial change.

Nevertheless, many of the grievances that caused widespread disappointment, deteriorated trust in the problem-solving capacity of government institutions, and electrified populist mobilization are real problems for which effective solutions must be sought. One could even go a step further and argue that the rise of populist nationalism is a crisis that brings to light the weaknesses and flaws of the neoliberal system. Free trade and the spread of capitalism has always been a net good, not an absolute one, and if the main purpose of today’s global order is economic efficiency, it is naturally going to cause economic and industrial change. Pertinent transformations that are concurrent with other major forces, namely automation, the fourth industrial revolution, transitions from production-based to service-based economies, and shifts in cultural and political ideologies. Together they are resulting in dramatic changes in the experience of the labor market: the jobs that are available, the training and qualifications necessary, the geography of employment, and the conditions of modern work.

At the same time as there was an alteration in how work is experienced, particularly for those working in low-paid, low-skilled employment, there has also been a profound change in the concentration of capital. Political, economic, and regulatory policies that favor the few have allowed individuals and corporations to push policies that further establish their economic dominance and contribute to a sense of injustice among those at the opposite end of the power spectrum. The consequences were stagnating wages, precarious employment, and a degradation of what it means to be middle class. In some cases, change was even more severe and led to declining living standards or reduced life expectancy.

The Left’s Ideological Complicity

But instead of finding answers to the demands for economic protection and social security, decision-makers across the ideological spectrum feared that any deviation from neoliberal economics would lead to uncompetitive markets, ultimately causing their countries to fall behind in the global race for higher productivity. Such trepidation created an open space for populist actors to appeal to the emotions of frustrated citizens, pretending to have magical solutions for difficult problems.

This ideological complicity explicitly includes the traditional left, which is why voters no longer trust social democrats to be the change makers they seek. In the late twentieth century, a consensus emerged within the transatlantic community that came to be known as the “Third Way” or “Die Neue Mitte”—proposed by the prime minister of the United Kingdom, Tony Blair, and the chancellor of Germany, Gerhard Schröder. While reaffirming their commitment to the tenets of social democracy—equal opportunity, social justice, and societal responsibility—the Third Way proposed a cap to social spending and a more limited role for government than social democratic parties had traditionally advocated for. This view was shared by left-leaning leaders in other countries, too, including the United States. Together they coordinated the abandonment of government ownership of major industries as well as tax and spending programs that aggressively seek to redistribute income in favor of free market strategies. Their economic platforms were basically a continuation of policies promulgated by popular conservative leaders of the 1980s, like Margaret Thatcher and Ronald Reagan.

The emerging amalgamation of economic liberalism and social democracy called for a “market economy,” rather than a “market society,” and deprived democratic institutions of the ability to control and regulate markets effectively. Subsequent right, as well as left-wing, governments were focusing on deregulation and reducing tax on businesses and corporations, bolstering technological innovation and change, without taking into consideration the social ramifications for the labor market. Their political support for entrepreneurship, temporary employment, and the cutting of social safety nets eroded the power of organized labor in the free functioning of the market. Of course, gradually varying from country to country, visions of economic liberalism and free market capitalism—neoliberalism—were embraced wholeheartedly by a wide swath of the political spectrum as the means to improve life and livelihood for all in the twenty-first century. A consensus that defined economic policies, shaped existing international institutions, and organized globalization ever since.

Now recent election analyses show that the SPD lost significant portions of their voters to the AfD; the National Front’s strongest support in France comes from former strongholds of the Socialist Party; and President Trump carried the 2016 election by winning states that once were defined by blue-collar industries, organized labor, and trade unions—the same demographic group that disproportionally voted in favor of Brexit in the United Kingdom.

For many voters, the left’s adoption of neoliberal policies and its inability to fight the negative ramifications of globalization and economic transformation felt, and continues to feel, like betrayal.

For many voters, the left’s adoption of neoliberal policies and its inability to fight the negative ramifications of globalization and economic transformation felt, and continues to feel, like betrayal. Left-leaning policies once were able to provide safeguards for political anxieties. In fact, social democracy was based on the promise to guarantee economic participation for everyone. With the deterioration of this original linkage, disappointed voters who feel forgotten by the political system sailed to new political shores and came to support populist nationalists. Ever since, political arsonists like Jörg Meuthen and Björn Höcke (both AfD), Donald Trump (Republican), Nigel Farage (UKIP/Brexit Party), or Marine Le Pen (Front National), proffer convenient scapegoats to answer for economic inequality and cultural insecurity. The predominant order, European integration, establishment politicians or bureaucrats, incoming migrants, other countries, or global institutions are blamed for the people’s ills, and populists promise to act in defiance of a system, which they assure voters will be the salve for all their woes. In addition to other, more tribalist reasons, it is, therefore, important to understand that the rise of populism and the decline of the left are inherently connected.

The Chance for a New Start

The form in which globalization and economic policies exist in the late-twentieth and early twenty-first century—open, deregulated, and merciless—has contributed to serious and legitimate public grievances. The failure to address them has led to the decline of left-leaning, social democratic parties, and enabled the rise of populist movements in the Western world.

Subsequently, dealing with their recent past has become a rather difficult endeavor for most social democratic parties. Many argue that the implementation of economic reforms was necessary at the time, while others demand a complete dissociation from the Third Way. Of course, it goes without saying that the trade with outrage must remain part of the political debate and should not be left to political arsonists. Taking public concerns seriously, though, must be accompanied by sophisticated policies that reassert political control over capital and prioritize social well-being.

The new faces of Germany’s SPD, Saskia Esken and Norbert Walter-Borjans, both tightly selected by a recent member survey, might be blank books for most. Their left-leaning ideas as well as the party’s defiance of finance minister Olaf Scholz, however, resemble a return to the original pillars of social democracy. At times like now when capitalism is challenged from within and there is dire need for reform, Esken and Walter-Borjans might be leaders we are in need of. Their election is providing social democrats in Germany with the chance for a new start.