The recent trends on Social Democracy
An interaction jointly organized by the
BP Thought Academy and FES Office, Nepal in Lalitpur, on 16
By Ritu Raj Subedi
The Rising Nepal
With the collapse of classical communism
and cyclic crises in neo-liberalism, social democracy has emerged
as a golden mean to achieve the ultimate democratic equality,
economic prosperity and lasting peace in the society. There are
reasons why social democracy is faring well and becoming a popular
means of fulfilling the political, social, economic and cultural
aspirations of the people. There is no need to talk about fundamental
weaknesses and failure of hardcore Marxist system. Its serious
fault-lines and structural limitations are the known facts. What
we today routinely confront with is the crises and recessions
that the neo-liberal political and economic system churns out
on the regular basis, throwing the countries and people into a
perpetual funk. Unlike the aforementioned two isms, social democracy
seeks the moderate path to realize the genuine goals of humanity.
It calls for a democratic compromise wherein the key stakeholders-
the government, employers, trade unions, parliament and civil
society- come together for their shared prosperity and durable
Social democracy defies free-wheeling market
and unrestrained capitalism. While accepting the private property,
it demands that the market be tamed by democracy and the life-chances
be ensured for all irrespective of their political orientation,
economic status and ethnic colour. Social rights, embedded markets,
the primacy of democratic politics and a basic line of welfare
state security form the basis of social democracy.
"A moment of social democracy has
finally arrived," says renowned political scientist professor
Dr Thomas Meyer.
Dr Meyer recently visited Nepal and attended
several functions where he vouched for social democracy, arguing
that a strong wave of social democracy is going to sweep the
Speaking at an interaction on 'the recent
trends on Social Democracy' organized by the BP Thought Academy
and FES, Nepal, Dr Meyer said that social democracy has emerged
as the strong alternative to libertine or the US-type democracy,
which he said, preponderantly excluded the citizens from wealth,
security, good education, social participation and power.
Echoing Dr Meyer, FES, Office Nepal head Dev
Raj Dahal said that the irrationality of neo- liberal attack
on the welfare state's regulation and individualization of human
life and the radical left's vision of withering of the state
had been confirmed by the recent developments of historical
"One suffered from excessive greed and
the other from lack of incentive. Loaded with excessive materialistic
passion rather than normative drive, both the ideologies have
now produced systemic crises," said Dahal.
Dr Meyer and Dahal delivered their thought-provoking
views on the theme of social democracy followed by a lively
question-answer session at the function attended by the people
from different walks of life.
The gist of Dr Meyer speech/working paper
Three main ideologies/forces are currently
dominating the world-
1. Libertarian democracy or democracy American
type: Election, political and civil rights and free market
are its main tenets. Everything beyond these is individual fate.
The rule of the market that we have seen made possible by mere
market states as they coined, elite or libertarian democracy
for the well-to-do is not sustainable because it is systematic
exclusion of the many both from government and from wealth of
their societies. The present decade witnessed tremendous economic,
social and political disasters in many parts of the world starting
with the US finance market crises that has been caused by a
lack of political regulation and control of the markets in the
wake of which dozens of million people have lost their jobs
in many places all over the globe. The states were forced to
spend gigantic amounts of money to save the failed banks with
the consequences that social welfare and security had to be
cut where it had been in place after many decades of social
and political struggle for it. The rich became richer, the middle
class has to pay for the crises and the poor became poorer.
It marked a clear violation of social and economic basic rights
in favour of big money and the freedom of markets.
Thus, progress towards Social Democracy is
obviously what the world needs in order to move in a more sustainable
direction after the resounding defeat of neo-liberalist ideas
of how to organize the economy in the global finance market
crises 2008 and thereafter. The neo-liberal moment that dominated
the world since 1980s is spent, a social democratic moment is
coming to the fore.
Are the social democratic countries willing
to seize this opportunity? In Germany, social democrats are
divided into the Left, the Green and the SDP. When Nepal drafts
the new constitution, the parties should incorporate social
and economic rights in it.
2. Revolutionary Marxism: Those, who
are not successful in market, are left out. This creates exclusion
marked by protests, alienation and revolution. The protest movement
explored revolutionary Marxism. The orthodox Marxism stresses
the socialization of the means of production but this does away
with freedom, equality and right to dignified works. With the
collapse of communism, the orthodox Marxists turned into political
fundamentalism. Identity politics entrepreneurs then wanted
to organize the people and society according to ethnicity or
religion. It became new way of inclusion. The society is being
organized along these lines.
3. Social Democracy: You cannot eat
democracy. Material means are needed to foster subjective freedom.
Equality, life-opportunities, social and economic rights need
to be guaranteed. A society that does accept not only the civil
and political basic rights of the 1966 UN Charter alone, but
also the cultural, social and economic basic rights declared
in this document is well called a social democracy as opposed
to a merely libertine democracy. The political decision to subscribe
to the entire set of Basic Rights implies the embracement of
both a coordinated and socially regulated market economy plus
a comprehensive welfare state. It aims at making good the promise
of full freedom for all human beings comprising both the formal
and the material dimensions of it: Having the formal right to
things and having the means to do things really. The welfare
state does not need to be very generous in the beginning but
it has to be comprehensive, delinking the basic social life
risks from the degree of market success of the individual persons.
As the 1966 UN Covenant puts it: Free education,
sufficient health care, social protection (pensions, unemployment
salary and fairly paid jobs). These are the foundations of freedom
in its full sense. To restrict the rights of people to the formal
entitlements of citizenship alone- like election, press speech
and the like- instead of extending them to their real life conditions
like education, jobs, social security etc means to deprive them
of the very foundations i.e. the reality of freedom.
What is welfare state?
A welfare state is a state in which organized
power is deliberately used (through politics and administration)
in an effort to modify the play of market forces in at least
First, by guaranteeing individuals and families
a minimum income irrespective of the market value of their work
or their property,
Second, by narrowing the extent of insecurity
by enabling individuals and families to meet certain social
contingencies (for instance, sickness, old age and unemployment).
Third, by ensuring that all citizens without distinction of
status or class are offered the best standards available in
relations to a certain agreed range of social services.
Social Democracy not luxury goods for rich
Social democracy is not luxury goods for rich
societies; it is a condition for the inclusion of all, for social
peace, for an equitable development for all societies- not the
least for the poorer ones. It is a form of democracy that is
based on three societal institutions that can be implemented
everywhere in the world if the will of the political elites
to do it is there.
The three basic institutions are:
1. A participatory political democracy
2. A welfare state (not overly generous)
3. An economic democracy in the sense of embedded and regulated
markets plus the social control of private property of the means
of production. In Sweden, market is embedded in the ecology
and labour rights.
This is the content of social democracy. Researches
and experiences have demonstrated that three practical conditions
must be fulfilled in order to create the political opportunity
for its consequent implementation in any society- rich or not
a. The resolution of the political elites
to realize it,
b. The political mobilization of the society to push for it
c. The readiness of both- capital and labour organizations to
come to a compromise about it.
What social and economic basic rights require
in addition to the welfare state is the political embedding
and regulation of markets- not their replacement. In a globalised
world, it would be counterproductive to follow the rule against
markets. What is always needed and possible is framing, correcting
and guiding markets on behalf of public welfare and social inclusion.
The golden rule is: Markets can be good servants but they are
always bad maters. Therefore, as much the market is meaningful
and possible so much the regulation is necessary in the service
of both Basic Rights and sustainable wealth creation, i.e. social
and ecological sustainability.
Within the framework of social democracy,
five macroeconomic strategies for regulation have been tested
in practices in varying countries:
1. Full economic democracy,
2. Democratization of the rights of owners by creating employees'
3. Keynesian macroeconomic coordination,
4. Different variants of neo-corporatist co-regulation between
the state and the social partners, i.e. trade unions and employers
5. Selective political growth strategies (subsidizing lead sectors,
taxing problem sector, promoting employment)
All five strategies accept the basic function
of capitalist markets to the extent that they do not conflict
with public interests. It is a matter of the particular situation
of a country and its cultural traditions which of these strategies
or what mix of some of them may be found appropriate. The underlying
idea of economic democracy is the belief that the market can
be successfully regulated by practicing democratic control,
framework setting and regulation by tripartite economic councils
(employers, employees, representatives from the parliaments
and government) at the regional and national levels of the economy.
A soft form of it is practiced in some European countries is
neo-corporatism, i.e. the informal macro-economic coordination
in a dialogue between government, trade unions and employers.
Trade Offs or Win- Win-Games?
A Social Democracy's choice of economic and
social policies and instruments needs to pursue a two-pronged
strategy by balancing objectives of practical efficacy (productivity,
growth) and normative legitimacy (fair distribution of life
chances, social inclusion, works). These overall objectives
give meaning and legitimacy to the social and ecological embedding
of the market economy in such a manner that it serves in a constantly
rebalanced way three purposes simultaneously:
1. Optimal productivity and growth of the
2. Tamed capitalism in the service of society and democracy.
3. Guarantying high levels of social inclusion and thus societal,
economic and political stability.
Recent research has reconfirmed the long standing social democratic
conviction that a well designed regulatory framework for the
markets and a good welfare state produce by far more win-win
effects for growth and productivity then negative tradeoffs.
Social Democratic Compromise
There is a particularly tricky problem about
social democracy. In order to implement it, good arguments as
rule are seldom sufficient- at least as long as those who think
that it runs against their vested interest that they can avoid
it. As history shows, insight, analysis, good will and our ability
to conceive good and working blueprints for progress are not
enough. What is needed is a political-cultural compromise among
the key actors of the political economy of a country despite
difference in their vested interests. Some shared experiences
and convictions must grow if a social democracy is going to
happen and be successful.
What has been called the social democratic
century in Europe was based on a long time compromise between
the social democratic key actors (parties, trade unions, enlightened
part of the middle class, the intelligentsia) with refractory
social forces that hold the commanding heights of the capitalist
economy and their political allies. In fact, it was only the
shock of the Great Depression in the 1920s and 30s that laid
the foundations for social democratic compromise in Europe and
the United States (though only temporarily in the latter).
In the historic moment of shock, there was
a widespread perception in all concerned societies that they
were now confronted with the fateful choice either to run the
risk of lasting protest, social conflict, unrest or revolutionary
change on the one hand or to improve the living conditions of
the working classes by other welfare means. The choice they
made was for the social democratic compromise: The workers'
movement accepted the basic outlines of a capitalistic order,
private property of the major means of production, and the market
economy. In return, the trustees of the economic system would
agree to waive a substantial- though negotiable- part of their
property rights in favour of workers co-determination, a share
in financing the social welfare state, wage increases, better
working conditions and macro-economic coordination.
This made possible the Golden Age of Social
Democracy after the Word War II or as some say the prospering
decades of the Fordist model of capitalism. What we witness
in Europe now is that the social and political pressure must
be permanent in order to prevent the capitalism side from forgetting
about the terms of the historic social democratic compromise.
And what we also learn is social democracy needs to go global
if it is to continue its functions in a globalised economy.
The Social Democratic Compromise goes global
Richard Sandbrook and a research team of the
Toronto University have studied the conditions for a social
democratic success story in the global periphery. They found
surprising social democratic progress in countries like Chile,
Costa Rica, Mauritius and Kerala (Uruguay, West Bengal could
be added). They stress that in Third World Countries three conditions
have to be in place in order to make the social democratic compromise
possible and the political economy of socially embedded markets
a. The marketisation of the basic economic
relations, particularly in the rural areas.
b. A strong and long term mobilization of civil society, trade
unions and networks with social democratic purpose.
c. An atmosphere of and a readiness in the poor sectors of the
society to organize the political activities and protests.
In addition, reforms at the global level are
required too. Fair globalization, the concept that has been
developed by the ILO, is a good translation of social democratic
principles into globalization politics. The key concepts are
there, practice is lagging far behind.
Forgetting the Shock?
Until recently, the social democratic compromise
seemed to have taken roots in European societies. Today, in
the wake of globalization, the disgraceful collapse of the communist
model, and the state debt crises caused by the financial market
collapse, the social democratic compromise is challenged again.
The most influential trustees of the interests of capital begin
to believe that they can dismantle the parts of the social democratic
compromise without having to fear adverse political consequences.
The contradiction of the present day seems
to be that exactly in a time when the social democratic moment
in terms of the real problems we face is stronger than ever
the idea of social democracy is in the defensive in the prevailing
ideological debates. The forces that caused the crises still
control the public opinion in many countries. One of the reasons
might be that welfare standards and regulations are even in
the times of crises comparatively high and a bottom line for
social protection and market correction is guaranteed in the
constitution and the political culture of most European countries.
This is in itself a remaining triumph of the historic fight
for social democracy but no lasting guarantee.
The famous British historian and social democratic
intellectual Tony Judt has dramatically warned us in his famous
book Ill Fares the Land. If our societies do not support social
democratic policies out of conviction any longer, they should
better support them out of fear. The fear that social peace
and the pillars of social democracy will soon erode once their
social foundations are shattered. We better do not embark on
Queries from the floor
Nepali Congress leader and lawmaker Surendra
Chaudhari said that even after independence, the countries remain
half-free and half-slave. "I want to know how the doctrine
of inclusion is different from the so-called doctrine of equality,"
he said. Professor MP Lohani said that social democracy in the
21st century must go global. But, my question is how the social
democratic compromise is possible given the fact that communism
has collapsed. Professor Kapil Shrestha that the political parties
have over the years expressed their commitment to social democracy
but the question is: Whether they have truly applied it or discredited
it? Nischalnath Pandey put a query as to how to analyze the
rising sentiments of nationalism in Europe, and in Japan, China
and Korea. Dhruba Hari Adhikari said that the globalization
has become the fact of life. He asked Dr Meyer- will there be
second round of globalization? Dr Chuda Shrestha asked how much
the economic model of Gujarat, launched by Narendra Modi, is
applicable in Nepal. "How do you see the national coffers
being spent for the medical treatment of leaders?
Dr Meyer's responses
I do not have all answers of your questions.
Here I would like to put forth my views. The equal rights of
the Black population in the US were established only in 1960.
The libertarian democracy is successful in the US because 90
per cent people are religious and 40 per cent fundamentalists.
This substitutes for ideology. The trade union movements were
crushed. Ecological and financial problems afflicted all the
countries. The global consciousness and response are needed
to solve them at the global level. The fair globalization pursued
by the ILO has the elements of social democracy. The leaders
everywhere forget their promises. The civil societies have to
reinforce their commitment. The Europe is facing re-nationalization
campaign. Commitment to solidarity is weak. The rich do not
bother about this. There are different types of social welfare
states in Europe. Market needs to help develop economy. Progressive
taxation helps stem economic crisis. Higher the education, better
the productivity. There are negative and positive (political)
globalizations. Regional political cooperation can answer the
transnational challenges at the regional level and it fosters
governance. The SAARC can contribute in this regard.
Queries from the floor
Santosh Pariyar said that the political parties
often talk about social democracy but are hardly implementing
it. How do you see the implementation of social democracy at
the global stage? Swaj Raj Kafle expressed his curiosity about
the labour rights in the countries practicing social democracy.
Manohar Parajuli wanted to know inter-connection between inclusiveness
and social democracy. Pradeep Koirala said that late BP Koirala,
while being at the helm of the government, implemented many
tenets of social democracy. There should be labour participation
in the society. The corporate sector should foster social responsibility.
Pushpa Bhusal said that social and economic rights are the basic
values of social democracy. In South Africa, these rights help
reduce poverty. How do we redefine these rights in the Nepalese
context? Dinesh Tripathy said that current of negative globalisation
is stronger than social democracy. The Washington Consensus
is dominating the global economic agenda. New social democracy
is fragmented. India's election is not encouraging and is not
clear as to whom development is for. Nepal is in the process
of transformation. How do we promote positive globalization?
Social democracy is taking back seat while WTO on the front
Replies from Meyer:
The Social Democratic Party has 25 per cent of votes. The challenges
of globalization have put pressure to respond and demand international
cooperation. Experiences offer the best remedy. There is a pressure
within the parties to make leaders responsive. The civil society
needs to be mobilized and social democracy education should
be spread. In Europe, social democracy is an evolution of compromise.
Inclusive democracy means that all members are able to participate
in the governance system. There are normative reasons for the
creation of just society. You need alertness, political direction
Queries from the floor
Saroj Dhakal said that there is the need for market economy
and social democracy. The challenge is how to check and balance
between the libertarian and social democracy. Gejendra Sharma
queries about co-relation between social democracy and electoral
system. Rajju-Malla Dhakal said that social democracy is interesting
with its focus on regulative market and private sector. But,
the private sector has money and power. As the multinational
companies are invited to create jobs here, the process of regulation
is lost. Rajib Upadhyay said that the rightists are breaking.
China and Russia are coming together. The people want delivery.
Nepal has big potential for hydropower. Economic prosperity
needs to be created. Uddhav Bhattarai asked the prospect of
social democracy in Nepal considering the geopolitical situation.
Umesh Upadhyaya asked about the role of trade unions in social
democracy. Tika Pokhrel asked as to how social and economic
factors contribute to social democracy.
Responses from Meyer
India has promised that liberalization will deliver but the
poor could not participate in it. To create a stable health
care and workforce, the art of politics must combine policy
response for uplifting the poor. Electoral system is important
for ensuring justice. Proportional system is just but if the
country goes to federal system, first-past-the-post is needed.
Fair election is a must for stability. Before bringing FDI,
create the conditions of regulation and control. The norms are
necessary. China has new left party. Many Chinese favour social
democracy. Democracy is based on self-determination. You need
to be clear as what kind of society you want. It requires identifications
of actors and coalitions. The EU is not in final stage. The
UK sees the EU merely as a market but others want economic and
political integration. Negotiated compromise is needed for the
better governance system.
Nepal holds potential for social democracy:
The head of FES, Nepal Office Dev Raj Dahal
said that the irrationality of neo- liberal attack on the welfare
state's regulation and individualization of human life and the
radical left's vision of withering of the state had been confirmed
by the recent developments of historical proportion.
"One suffered from excessive greed and
the other from the lack of incentives. Loaded with excessive
materialistic passion rather than normative drive, both the
ideologies have now produced systemic crises, leaving unintended
consequences for environment, societies and the people in the
various parts of the world. As a result, it confined the vision
of political leadership only to the crisis management"
said Dahal and added that on the contrary, the resilience of
social democratic state can be attributed to its ability to
adapt to technological change, changing value patterns, social
solidarity, new social stratification and international division
"Currently, social democracy holds the
possibility of realizing the progressive politics of attacking
poverty and inequality through the invigoration of a broader
struggle for public good and the reformist imagination of the
Dahal noted that social democracy supports democratic politics
for the broader spirit of human freedom and advocates the reduction
of unequal prospects of life-choices. It has espoused five critical
elements- sovereignty of people, social inclusion, principle
of affected, subsidiarity and the provisions of both constitutional
and human rights.
He said that social democracy is an open-access
political order. It provides the citizens power to participate,
exert claim and enjoy immunity rights and corresponding responsibilities.
"The party programs, development policies, constitutional
mandate and people's impulse find greater resonance of social
democratic values in Nepali society. Its heritage of tolerance
of social diversity and continuous rationalization and reform
of societal norms are essential aspects of social modernization.
According to Dahal, the new vision of social
democracy marks a shift from centralized planning and decision-making
to the bottom-up, decentralized, participatory version. "It
advocates justice at ecological, social, gender and intergenerational
levels to improve the living standards of all. It opposes fostering
a rationality of technical and ideological domination of society
through the networks of power and manipulation of cultural industries."
Further highlighting the legal functions of
social democracy, he said that it supports specific laws pertaining
to labour, women, indigenous people, Dalits, minorities and
disabled, thereby, increasing their access to the institutional
resources. Many of these social democratic policies are used
in Nepal so as to provide opportunity for the social mobility
of poor and bridge the development gaps.
Today social democracy has marked a shift
from technocratic and economic standardization to a critical
reflection on the unrealized aspiration and rights of new groups
Dahal maintained that Nepal holds great potential
for social democracy and in order to balance the extremes into
middle path required completing the unfinished tasks of constitution
making, fostering inclusive and sustainable development and
achieving the durable peace. The increased emphasis on public
sphere, expansion of labour market, projects for social development
and social security, safe migration, support to workers' cooperative,
active citizenship, political accountability etc indicate that
democratic self-governing process will acquire new vitality
and legitimacy in the future.
"Conscious of their needs, rights and
duties, the Nepalese citizens are demanding consistency from
their leaders between the founding ideologies of parties and
their derailed destination and make political power proportional
to both social representativeness and fairer distribution of
public goods," said Dahal.
Social democracy: a road to progress: Bhattarai
BP Though Academy chairman Haribol Bhattarai
said that neither the Marxist fundamentalists not the capitalist
economy could be able to deliver justice and peace.
"Social Democracy or Democratic Socialism
is the only road to progress and prosperity for the humanity
in the years to come," said Bhattarai.
He argued that late BP Koirala had already
envisioned the inevitability of democratic socialism more than
50 years ago but political highhandedness, selfishness and abuse
of power had posed as a big stumbling block to the realization
of social democracy.
Bhattarai underlined the need for devising
the local and national instruments to realize the democratic
socialism. "We need solidarity at the local and global
levels to this end. The objectives and methods should be clarified."
The country should be able to create national
capital and thereby granting social security to the people,