Route to Nowhere

European social democrats have never had it so good. By the end of the 20th century, they were in government, either alone or in coalition, in 14 of the 19 Western European democracies, ruling over some 88 per cent of Western Europe’s citizenry. Only on the periphery – in Iceland, Ireland, Malta, Norway and Spain – did they remain in opposition. In 11 of these 14 countries, including France, Germany, Italy and the UK, the heads of government came from social democratic parties. The sheer scale of this success was unprecedented: never before had Europe’s four leading democracies been governed at one and the same time by social democrats. Many of these parties had begun to organise for the first time almost a century earlier; as the millennium dawned, they found themselves close to enjoying a real monopoly of government.

A bare dozen years ago, it seemed easy to write off the traditional Left, and many commentators did so. Take 1987. This was the year in which Old Labour went down to its third successive defeat in Britain. It was also the year in which Helmut Kohl’s Christian Democratic coalition was celebrating its second consecutive victory. In France, an alliance of Gaullists and the Centre Right had just come to office. In Italy, the Christian Democrats were celebrating more than forty years of unbroken rule. In Europe in the late 1980s, the Right was in control and its triumph was later confirmed by the collapse of the Berlin Wall and then of Communism. If the events in Berlin were seen to spell the end of history, it seemed that they were also likely to spell the end of the Left. Yet a mere ten years later it was the Right that was on the ropes and, against all expectations, the Left that was in office.

In their efforts to understand how parties’ strategies unfold, political scientists usually ascribe three key motives to them: vote-seeking, office-seeking and policy-seeking. It is also usually assumed that a trade-off will be involved. Office-seeking parties will tend to downplay their policy priorities, adjusting whatever principles they have in order to secure a place in government. Policies are also traded off for votes, with electoral success increasingly seeming to require the fudging of core principles. It is only in very rare instances, and then usually only on the fringes of the political spectrum, that either the massing of electoral support or the chance of gaining office becomes subordinated to the need to maintain a distinctive programme.

As vote-seekers, parties of the Left in Europe have not done at all badly. During the 1950s, when support was divided between social democrats and Communists, the left-wing parties polled an average of 42 per cent of the popular vote across Western Europe. In the 1990s, when their ranks had been joined by the newly successful Green parties, and when traditional Communist support had effectively withered away, they polled an average of 41 per cent. Life for the Left as office-seekers has become even better. During the early postwar years, when Communist parties were actively distrusted, it was sometimes too divided to have a chance of winning office. Nowadays, by contrast, the parties find it relatively easy to forge alliances, with the Greens proving to be much more willing and accommodating partners for the social democrats than their Communist predecessors ever were. The Greens are also proving much more acceptable, and it has been largely thanks to their support that the Left has now managed to win control of government, or at least a significant voice there, in countries as diverse as Belgium, Finland, France, Germany and Italy. As policy-seekers, however, the parties of the Left still leave much to be desired – not least by the former German Finance Minister Oskar Lafontaine, who now documents his many criticisms in a revealing account of his experiences in the lead-up to and the aftermath of the Red-Green coalition of 1998.

Throughout the 1970s and 1980s, Germany had a three-party or – as it was sometimes called – a triangular party system. The main rivals were the social democratic SPD and the Christian democratic CDU. Coming between them, at least in a strategic sense, was the small, liberal FDP, whose partnership was required if either of the two bigger parties was to win office. From 1969 to 1982, the liberals looked to the left, and the SPD, first under Willy Brandt, and later under Helmut Schmidt, dominated government. From 1982 onwards, the liberals looked to the right, installing Kohl as Chancellor, a position he was to retain until 1998. By then, however, a new element had been introduced into German politics, with the Greens beginning to make their presence felt in Parliament, and offering the prospect of a new coalition partner to the increasingly desperate SPD. For Lafontaine, at least, such a coalition meant more than simply making a virtue of necessity.

Like many senior German politicians, he had first come to national prominence via a regional power base, having being elected prime minister of Saarland in 1985. It was then, together with Gerhard Schröder and Rudolf Scharping, that he became a major figure among the third generation of SPD leaders, the so-called ‘grandchildren’ of Willy Brandt. Indeed, being one of Brandt’s particular favourites, he was originally the leading light within the group, and was proposed by Brandt to be his successor as Party Chairman in 1987. The two were later to fall out, however, not least over the business of how to proceed with German unification in 1990. Chancellor Kohl had proposed that unification be accompanied by a one-to-one currency conversion, with the much weaker East German currency being accorded parity with the strong West German mark. The immediate appeal of such a policy to East German voters was obvious, and the proposal was also supported by Brandt. In the longer term, however, as Lafontaine then argued, currency parity would lead to industry becoming uncompetitive in East Germany, and hence to high unemployment, and it would also place an additional tax burden on West Germans. In 1990, in the first all-German election to be held since 1933, Lafontaine was the SPD candidate for Chancellor. But eight months previously he had been badly wounded in an assassination attempt, and his physical weakness during the campaign, together with the unpopularity of his unification policies within the ranks of his own Party and in East Germany in particular, helped to contribute to the SPD’s worst electoral performance in thirty years. Following a temporary retreat to Saarland, he was elected to the Party Chairmanship in 1995. By then, the stage was set for a full-scale conflict between Brandt’s grandchildren, as they jockeyed for key positions in the Party and control over its programme.

Lafontaine and Schröder were the major figures involved, their rivalry sometimes echoing that of Blair and Brown in the British Labour Party. Both had set their sights on being the Party’s candidate for Chancellor in 1998, a position that does not fall automatically to the Party leader but is contested in its own right. Lafontaine was, above all, the party man, claiming a commitment to the rank and file and a loyalty to the traditions of the SPD. Schröder, he argues here, had come to prominence ‘by persistently throwing mud at the party and its policies’. Lafontaine also claims to have had a more substantive programme – ‘what we needed was not only a change of government but also a change of policies’ – whereas Schröder preferred ‘carrying out the activities of government in a pragmatic spirit, with little concern for programmes and manifestos. His aim was to win over public opinion to his side, rather than to develop new programmes for improving the living conditions of the country’s men and women.’ Where Schröder had the edge, however, and here the echo of Blair and Brown proves particularly strong, was in his media appeal and his support from much of the German press. ‘On television,’ notes an irritated Lafontaine, ‘Schröder cut the better figure.’ It was this which proved crucial in the end, as the media-friendly Schröder won the nomination and went on to win the election. Lafontaine remained as Party Chairman, believing – Blair-Brown again – they could work together, ‘sharing responsibility’. It was not to be, however, and matters were not helped by Schröder’s evident reliance on Bodo Hombach, described here as having the ambition to become ‘Germany’s Peter Mandelson’, whose intriguing Lafontaine later found to be ‘intolerable’.

Although the parallels with the early experiences of New Labour are fascinating, they are also often misleading. First, although both sets of social democrats eventually came to power in the late 1990s, following almost two decades in the wilderness, the German Social Democrats had always enjoyed a taste of power at one remove. Politics in Germany has never been as adversarial as it is in Britain, and German governments have never been capable of untrammelled rule. The SPD were not only already in office in a number of the semi-autonomous Länder but, through these regional governments, they had also gained a controlling voice in the upper house of the federal Parliament. And since much German legislation requires the active consent of both houses, this effectively meant that it also required the active consent of both major parties. The result, in a very non-British sense, is what the political scientist Manfred Schmidt has described as ‘the Grand Coalition state’. Second, precisely because of politics’ non-adversarial, if not consensual character, it was always less easy to identify real differences between the two leading parties. Thus while Lafontaine epi-tomised many of the more traditional social democratic values, he often found himself facing his strongest opposition within his own party. And though he subscribes to Schröder’s emphasis on ‘The New Centre’ – die neue Mitte – he is also careful to recall that this was a slogan first devised by Brandt in 1972. (He and Schröder had also toyed with the slogan ‘The New Force’, but quickly dropped the idea when they discovered it was being used by Siemens.)

Lafontaine was then, as he is now in his retrospective account, uncompromising in his commitment to what he sees as the core values of the Left. In the preface to this English translation, in a message directed explicitly at British readers, he argues that ‘the only chance that social democrats have of winning political majorities is by representing the interests of workers, the unemployed and the pensioners. In the corporate sector their primary concern must lie with small and medium-sized businesses.’ Later, he adds that ‘a deregulated labour market . . . leaves to the market decisions which are and must remain decisions of democratically elected governments and parliaments.’ As Chairman of the SPD in 1995 he led what he claims was a policy shift away from the undue emphasis on price stability and supply-side economics, arguing that continuing German competitiveness in world markets would owe less to wage restraint, cuts in welfare and reducing workers’ rights than to maintaining high levels of productivity and fostering a skilled and properly rewarded labour force.

For these reasons, he regarded the prospect of an alliance with the Greens as offering not only the opportunity to win power, but also a strategy through which the traditional elements in the SPD might more easily come to the fore. Much as Blair was to foster co-operation with the Liberals in order to strengthen his grip on the centre and marginalise Labour’s radical fringe, so Lafontaine viewed co-operation with the Greens as helping his side of the SPD to gain new credibility. External allies were seen by both leaders as a means of shifting the balance of power within their own parties. But whatever Blair may have achieved, Lafontaine ended up both disappointed and frustrated. The Greens simply failed to live up to his hopes: ‘my expectation that the Greens would join me in my effort to keep the coalition on a socio-ecological reform course turned out to be a miscalculation. Scarcely had they found themselves in government than the Greens began to show themselves willing to abandon vital principles in order to keep their hands on the instruments of power.’ He doesn’t mince words here, least of all when quoting from Die Zeit: ‘The Green Party of today is rootless, reactionary, split and paralysed. Power is perhaps their final aim.’ Even from his own account, however, it is difficult to see how his high expectations could have been met. Like Schröder, the Green leader Joschka Fischer had more or less cut himself free from his party roots, and even before the election had telephoned Lafontaine to suggest that Schröder be dropped as the candidate for Chancellor and be replaced by a more or less ‘non-party’ figure, one possible candidate being Helmut Werner, the former managing director of Mercedes Benz. ‘I began to have doubts about Fischer’s judgment,’ Lafontaine observes.

Outside Germany, and in Britain in particular, Lafontaine has had two claims to fame. The first is that he was billed by the Sun as ‘the most dangerous man in Europe’, a dubious honour in which he, or at least his British publisher – the words are prominently displayed in the publicity material for the book – seems to take some pride, and which was occasioned by his much-heralded support for tax harmonisation across the EU. The alternative to such harmonisation, as Lafontaine argues here, is tax-dumping (companies transferring profits to countries with low taxation), leading to an inevitable reduction in revenues from taxes on wealth, profits and capital gains, and an equally inevitable rise in the costs imposed on workers and welfare recipients. Lafontaine’s second claim to fame was his sudden and widely-publicised resignation from the new Schröder Government less than five months after first taking office as Finance Minister. His departure was seen not only to signal the effective defeat of the Left within the new Government, but also to mark a major setback in the wider effort to promote more Keynesian policies within the EU as a whole. But it is unlikely that many tears were shed in the various social democratic seats of government elsewhere in the EU, where, with the possible exception of Paris, Third-Way thinking is now in the ascendant. Appropriately enough, it was apparently while on his way to launch the German edition of Anthony Giddens’s influential book that Schröder learned of his colleague’s resignation.

Lafontaine sees little of merit in the new path being followed by European social democracy. As he argues in the penultimate chapter, ‘the Third Way is a route to nowhere.’ More to the point, perhaps, while he understands the appeal of this new approach, he also sees it as ‘a sort of politics to which I find no access’.

This, in fact, is the great irony of the current social democratic success story: that the Left should come to power at the very time when the traditional Left politics favoured by Lafontaine seems so difficult to pursue. The policy choices of the governments controlled by social democrats are more constrained than ever. On the one hand, the room for manoeuvre is increasingly limited by the evident and overwhelming consensus in favour of neo-liberalism, a consensus which, as Perry Anderson recently argued in his relaunch of New Left Review, ‘rules undivided across the globe: the most successful ideology in world history’. On the other hand, in a post-Cold War and, more locally, increasingly Europeanised environment, there are now simply too many areas which lie outside the control of national governments. Already in 1990, Lafontaine was arguing that ‘the concept of the nation state could no longer form the foundation for progressive political policies.’ As he now gloomily says, ‘the instruments of national politics are no longer adequate to deal with the demands of a globalised economy.’ Both sets of constraints give rise to pessimism. It is not only the problems posed by his lack of access to a Schröder-friendly and media-driven politics that concern him, however important these may be, but also those raised by the loss of sovereignty.

Here, indeed, is another irony. This very pro-European social democrat seems at least as concerned with the loss of national government control as does the most dyed-in-the-wool British Eurosceptic, or Sun editor. But whereas the more conservative and more British response to the loss of sovereignty has been to attempt to turn back the tide of Europeanisation, that of Lafontaine, and many other Continental social democrats, has been to try to move the struggle further into the European arena. Hence the call for tax harmonisation. For if national governments can no longer find the room or capability to pursue more traditional Keynesian solutions, then perhaps these might be found at the European level. No individual country has the power to regulate global markets, but, according to Lafontaine, ‘the European Union certainly does.’ Hardly surprising then to see social democratic parties across Europe moving from having been among the sharpest critics of integration to being among its most consistent advocates.

Though inevitably self-serving at times, Lafontaine’s account of the building of the Red-Green coalition in Germany, of the problems that arose both inside his party and inside the government, and of his later resignation, offers a fascinating insight into the current difficulties that confront modernising social democrats. For Lafontaine, the very notion of modernisation is specious: ‘When one tries to discover the essence of what is “modern” and what makes a person a “moderniser”, one finds that it means nothing more than ecological and social adaptation to the perceived forces of globalisation.’ He also offers an impassioned and persuasive diagnosis of the problems faced by internationalised post-industrial economies. But while the failings of others, often in his own Party, and even his own occasional shortcomings, are sharply and often perceptively documented, it is less easy to pull out from this story the basis for any alternative strategy to Third Wayism within the social democratic mainstream. Perhaps no such alternative exists, and perhaps this is the real reason, rather than anything to do with his short-term frustrations with Schröder, Fischer or Hombach, that he has so unhappily walked away. It is simply no longer his world.

In the end, two things matter to Lafontaine, as to many on the traditional Left, and neither is easily translatable into public policy: the problem of sovereignty, and its erosion, on the one hand, and the importance of ‘human values and solidarity’ on the other. ‘We must not forget that feelings are not traded on the stock exchange,’ he concludes. ‘They belong to the heart. And the heart beats on the left.’ But even this is not always the case, as Dr No once pointed out. He, it may be recalled, claimed to have survived an assassination attempt by Chinese gangsters who tortured him, cut off his hands and then shot him through the heart. ‘But they did not know something about me,’ he tells James Bond. ‘I am the one man in a million who has his heart on the right side of his body.’ Little in common with Lafontaine, then. But there is one other point that Dr No emphasised, and which might well meet with Lafontaine’s approval. When asked why he decided to set up home in Crab Key, where he went on to become supreme ruler, his answer was simple: ‘Power,’ claimed Dr No, ‘is sovereignty.’

Since resigning from office, Lafontaine has retreated to his home in Saarland, the region where he first came to prominence as leader of the Land government. Saarland is not Crab Key, and it enjoys even less sovereignty than the current Federal Republic of Germany. But Lafontaine seems finally to have had enough of what now passes for power in the contemporary European nation state.