It is clearly a paradox. Europe's economies and the world's financial markets are deep in the worst crisis since capitalist countries suffered through the Great Depression in 1929, and no one can accuse the governing social democrats of having been the ones who didn't know how to handle their countries' finances.
The real culprits are to be found in banks and stock markets, and all the politicians who spent the last two decades touting neoliberal economies and the liberating forces of deregulation have suddenly fallen silent. And yet, so it seems, it is Europe's center-left parties, whose self-image has always included their historic identity as the parties of market regulation, who are now expected to take the blame.
But why? Why aren't conservative and liberal parties losing their voters? Why are the social democrats, traditionally more apt to be critical of capitalism, being punished?
The search for answers leads in two directions. On the one hand, the social democrats' zealous pursuit of modernization and reform has put off some of their traditional supporters. In the search for new voters, center-left parties have neglected their base. As a result, parties like Britain's Labour and Germany's SPD have fallen into a credibility trap.
Out of national interest, former Prime Minister Tony Blair pushed for deregulation of the financial markets, thereby fueling an anything-goes mentality in London's financial district. And although Schröder's notorious Agenda 2010 labor market and social welfare reforms laid the foundation for better unemployment figures, they were unpopular with many voters, who perceived them as a betrayal of the SPD's core values.
The conservative parties, for their part, abandoned their excursions into market radicalism, reduced their demands for deregulation and embarked -- rhetorically, at least -- on a return to the center.
Where social democrats ruled at the turn of the millennium, German Chancellor Angela Merkel and French President Nicolas Sarkozy are now in office. Instead of demonizing government intervention, the two leaders have approached the crisis by behaving, at least to a certain extent, like enthusiastic Keynesians. Merkel has not even shied away from nationalizing banks. By shifting toward the center, moderate conservatives are now poaching supporters of traditional social democratic principles.
The social democratic movement now faces considerable challenges. "Social justice and questions of wealth distribution must be redefined," says Wolfgang Merkel, director of the Social Science Research Center Berlin, and warns that if this does not happen, voters will continue to punish the left.
Glasgow City Council member Hanzala Malik explains what this means in a Scottish context "We have allowed a situation to develop in which some people are freezing because they can no longer pay for heat, while others hold winter barbecues in their gardens under gas heaters," says.
In the social democrats' triple battle over political freedom, economic security and social justice, the reformers have apparently abandoned the state all too thoroughly and sacrificed it to the deregulated market. They followed in the footsteps of Blair guru and prominent sociologist Anthony Giddens, who sought to create more latitude for the economy and business owners so that the markets could "do their magic."
At first, respectable election results and the formation of an SPD-Green Party coalition government in Berlin seemed to prove Blair and Schröder right. "We no longer have a left or right economic policy, but simply a modern or an un-modern policy," the German chancellor declared. And to this day, British Business Secretary Peter Mandelson, one of the founders of New Labour, believes that the new path Blair and Schröder embarked upon was "fundamentally" the correct approach.
Does this mean that the pace of reform was simply too fast and that the reformers did not convey their message convincingly enough? Even though most of the people on Germany's Hartz IV welfare reform program are "practically better off," says social scientist Wolfgang Merkel, the SPD is currently "unable to argue credibly that the burdens are fairly distributed."
If, as the opinion research institute Emnid has found, 83 percent of Germans are worried about the future, close to 70 percent favor the introduction of a minimum wage and almost half are concerned about sinking into poverty, the Social Democrats have a serious credibility problem.
The center-left must "redefine equality," says Mandelson, if it doesn't want to lose the "new culture war" against populists on the left and right. But cosmetic fixes are no longer sufficient, because today's party system, which is more differentiated than it was 10 years ago, has shaken the previously invulnerable status of the left-leaning major parties.
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