11 - European Social Democracy between Political Economy and Electoral Competition

Summary

In the 1980s and 1990s, social democratic parties have experienced unprecedented difficulties in choosing and implementing economic policies. At the same time, they have found it harder to frame electoral appeals in an increasingly complex environment of party competition. The pressure to make choices in innovative ways, in turn, has generated strains in social democratic party organizations and has affected the loyalty of party members and activists. Explaining the diverse trajectories of European social democratic parties in these decades requires a substantive and a theoretical departure from conventional accounts of social democratic success that worked well for the post–World War II era labeled by some contributions to this volume the “golden age” of social democracy.

In substantive terms, if social democracy has the fundamental objective of moderating wage earners' exposure to market risks (due to sickness, old age, unemployment) and engineering significant income redistribution toward the less fortunate in society, while promoting economic growth, then the strategic opportunities for such policies have dramatically changed since the 1950s and 1960s. In those decades, high postwar economic growth rates, a stable proportion of the population in retirement, national controls over financial markets, and the absence of competition from newly industrializing countries allowed social democrats to expand the welfare state and create full employment while maintaining balanced budgets.