The Fall of Social Democracy in Europe

Historical context

Social Democracy was born in the second half of the 19th century, inspired by labor, socialist and Marxist movements. Germany can be considered its country of origin, with the SPD (established in 1863) as the first social-democratic party. The labor and social-democratic movements were already important even before WWII, with the British Labour Party governance in the 1920s and the French and Spanish Popular Fronts in the 1930s. In post-war Europe, Social Democracy (along with Christian Democracy) was a large contributor to the modern welfare state, frequently switching power with more conservative governments, and maintaining influence in politics even when not governing.

In the 1980s, there was a conservative neoliberal turn and the center-left lost some appeal. Indeed, at the beginning of the 21st century, the Third Way arose, i.e, a shift in leftist parties around the world towards a more moderate, market-friendly economic policies, moving further away from the strong welfare states established after WWII. Nevertheless, social democratic parties managed to be in power until the 2008 crisis. However, since then, they have lost power in most countries and became the opposition (in some cases even losing the position as the biggest opposition party).

Countries where social democracy has failed

The rise of the Third Way was particularly stronger in Europe’s biggest nations. In Germany, this rightward shift of Social Democracy occurred with Gerhard Schröder, leader of the Social Democratic Party of Germany (SPD) and Germany’s Chancellor between 1998 and 2005. Schröder introduced the Agenda 2010, a series of reforms aimed at cutting German’s welfare system and labor protections, to promote economic growth and reduce unemployment. This clear shift to liberal policies cost the SPD the 2005 election and the party has not led the German Government since. It has been the junior party in a grand coalition led by Angela Merkel’s CDU since 2013.

The French Socialist Party has suffered an even greater decline. After narrowly being elected in 2012, Socialist president François Hollande failed to bring down unemployment and made several unpopular political moves. In 2017, facing dismal approval ratings, he became the first president in the Fifth Republic not to run for re-election. Among many others, the main reason for the decline in social democracy in France presents a familiar story: with globalization, as factories moved from France to third-world countries, the Socialist Party’s traditional voting base became unemployed, facing economic hardships and thus, started to move to political extremes and populist parties. Regarding the newer generation, it is divided between a more moderate wing, trying to appeal to the center, and a more radical one, seeking to recover the party’s former working-class base. Consequently, since 2017, the Socialists have not managed to attain more than 8% of the votes.

A different shift from social democracy occurred in Greece. In January 2015, Syriza, the radical left-wing party led by Alex Tsipras, characterized by a staunch opposition to austerity measures imposed by Troika, won the Greek legislative elections. Tsipras was elected just as the negotiations started for a new bailout. Unable to reach a compromise with Troika, he held a referendum on the opposed austerity measures, which were refused by 60% of Greeks. However, Tsipras was still unable to negotiate better terms and ended up agreeing to the bailout terms and austerity. The economy was going through a U-turn, taking a complete opposition of policy than the defended one in the beginning. Despite the recent economic improvement, Syriza finished second in the 2019 Greek elections and lost power.

A possible solution to the crisis of social democratic parties would be a shift to the left, unlike the moderate turn in Germany and France. This happened in the British Labour Party with the election of Jeremy Corbyn, who had major support of trade unions and the more left faction of the party. His more leftward stance included opposition to austerity and the renationalization of public utilities and railways. However, with Brexit as the main hot issue in the UK and Corbyn’s non-existent position on this matter, the Labour Party faced a historical defeat in elections.

Countries where Social Democracy is still in place

The most well-known case of Social Democracy’s success in Europe is Portugal. The country is led by a center-left minority government with the support of other left-wing parties. On its first mandate (2015-2019), PS (the Socialist Party) governed Portugal through a coalition with the other left-wing parties, commonly known as Geringonça, to form a “majority” in parliament. Geringonça proved to be a success, leading the country to a stable period of economic growth, which increased confidence in voters, who maintained the left voting tendency. This has also happened in the neighboring country, Spain where Partido Socialista Obrero Español (PSOE) has collided to govern with a more radical left party, Podemos. This comes as no surprise in the Iberian Peninsula, as it has a large percentage of working-class voters (traditionally centre-left voters), unlike other European countries.

Another European region where Social Democracy has been able to stay in power is Scandinavia. However, its molds are different from Iberia’s, as it has been struggling not to succumb to Europe’s rightward trend.

Unlike Portugal or Spain, where social democracy has been relatively open to immigration, Denmark’s Social Democratic Party has engaged in an anti-immigration speech, as a way to attract far-right opposition party voters. Some voters supported it and switched their votes, while others did not and left the party. Nevertheless, the trend winded to other left-wing parties, which allowed Mette Frederiksen, the current Danish Prime-Minister, to engage in alliances with the left and form a government.

In Finland, the social democrats won by a small margin with the nationalist right-wing party (the latter having a strong anti-immigration stance) ending up in second place. Still, the Social Democratic Party won the election. Nevertheless, to govern, it had to coalite with four other parties.

In Sweden, after many tries of coalition by the Social Democratic party, it was necessary for the center-left and right to unite with the former to avoid the far-right from taking power. Therefore, while in Denmark and Finland the undecided votes were determined through stances on immigration, in Sweden Social Democracy has been in power mainly due to the fear of far-right movements, encouraging moderate left and right to collide.

Poll results for S&D (Progressive Alliance of Socialists and Democrats) member parties (March 2019)

Overall, why has social democracy fallen?

The social-democratic project mainly focuses on the fair redistribution of income and equality of material ends, which has a strong connection with unions and the working class. More eloquently put, it is a fight within capitalism for less unequal capitalism. However, in the last 30 years, there were major ideological changes, caused by technological and cultural forces that shifted production away from big factories and nation-states to other places across the globe. This deeply eroded the power of the working class (the main electorate of this ideology) and thus, the engine of social democracy stalled.

This fall in popularity is complex to explain. Primarily, since 2008, the promise of materialism has been curtailed by austerity and neoliberal measures, which many social democrats were complicit too. Secondly, the globalization led by a now hegemonic neoliberalism made working-class people feel as though they lost control of their lives, regarding economics (negative income effect of immigration on jobs and wages), identity, purpose, and meaning. There was a shift in the electorate: originally a traditional working-class population, most of these social-democratic parties are now composed of progressive, urban, and well-educated electors. With globalization, these parties participated in the de-industrialization that put them at odds with their original electorate. As the latter felt it was left with no political representation, it shifted towards far-right and populist movements that followed narratives such as blaming immigration for the faced economic problems. The austerity and contraction of the welfare state after the Great Recession affected particularly the working middle-class society. This class saw immigration and the refugees’ crisis as the perfect scapegoats, the used narratives by many radical right-wing parties.

Stating that far-right parties and immigration were the main causes of Social Democracy’s fall can be simplistic. It was the lack of political representation and economic instability that played a major role.