Reform or Revolution?

Pt. 3 of “European Social Democracy and the Roots of the Eurozone Crisis;” see Part 1 here and Part 2 here.

By Alejandro Reuss | May/June 2017

This article is from Dollars & Sense: Real World Economics, available at

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A deep crisis of global capitalism, its seeds sown in part by a dramatic deregulation of finance, Wolfgang Münchau of the Financial Times notes, would seem tailor-made for a revival of the ”centre-left.” Why has this not happened? ”The deep reason,” Münchau argues, ”lies in its absorption of the policies of the centre-right, going back almost three decades: the acceptance of free trade agreements, the deregulation of everything, and (in the eurozone) of binding fiscal rules and the most extreme version of central bank independence on earth. They are all but indistinguishable from their opponents.” As a result, can we expect a general collapse of these parties, a rejection of ”Third Way” politics, and a sharp turn back toward a full-throated social democratic reformism? The evidence, so far, is mixed.

Among relatively large countries, Greece and Spain are the two hit hardest by the crisis, and the two which have seen the most explosive mass protest movements against austerity. On the electoral front, voters punished the mainstream social democratic parties—the Panhellenic Socialist Movement (PASOK) in Greece and the Socialist Workers’ Party (PSOE) in Spain—for their administration of austerity policies. These parties’ former supporters gravitated to new political entities promising to resist austerity measures.

In Greece, the SYRIZA coalition rose from less than 5% of the vote in national parliamentary elections in 2009 to more than 36% in January 2015. PASOK, which had not polled less than 38% of the vote since 1977, saw its vote drop from 44% to less than 5%. The story, alas, does not end with a decisive turn against austerity policies. After striking a tough stance against austerity and engaging in protracted and tense negotiations with the ”Troika” (European Central Bank, European Commission, and International Monetary Fund), SYRIZA capitulated to a new round of painful austerity (imposed by its creditors as a condition of the ”third bailout”). Despite the split of its left wing as the new Laïkí Enótita (Popular Unity) party, SYRIZA basically maintained its electoral strength in the next elections in September 2015.

In Spain, the new left party Podemos (”We Can”) debuted with just over 20% of the vote in its first national election (December 2015). Meanwhile, the PSOE dropped from 29% of the vote in 2011 to 22% in 2015. The largest party of the right, the Partido Popular (PP), which has alternated in power with the PSOE since the early 1980s, dropped even harder—from about 45% to 29%. Podemos’ dramatic rise to national relevance inspired hopes of further gains, and even a Podemos-led government, after the June 2016 elections. That did not come to pass. Podemos’ electoral support hardly budged (to just over 21%), leaving it the third-place vote-getter, just behind the PSOE, while the PP remained the top party, regaining some lost ground to about 33% of the vote.

The emergence of SYRIZA (at least until its capitulation on the ”third bailout”) and Podemos inspired hope not just for a turn away from austerity policies, but also the renewal of a robust social democratic reformism in the style of the post-World War II period. Meanwhile, in the U.K., a turn away from Third Way politics took the form of a successful leadership challenge within the leading social democratic party: The September 2015 victory of MP Jeremy Corbyn as Labour Party leader signaled a clear rejection of the ”New Labour” politics associated with the party’s last two prime ministers, Tony Blair and Gordon Brown, and with Corbyn’s rivals for the leadership, both of whom had served as cabinet ministers under Blair or Brown. Lest the meaning of the victory be unclear, reported The Telegraph, ”Mr Corbyn’s jubilant backers chanted: ‘Old Labour, not New Labour.’” (Corbyn more recently beat back a counter-attack from the Blairites, winning a leadership challenge by an even larger margin.)

There are, in addition, a few other left alternatives to the main social democratic parties—such as the Bloco de Esquerda (Left Bloc, founded 1999) in Portugal, Die Linke (The Left, founded 2007) in Germany, the Movimento Democratico e Progressista (Democrats and Progressives, founded 2017) and Sinistra Italiana (Italian Left, founded 2015) in Italy, and the Parti de Gauche (Left Party, founded 2008) in France. Portugal’s Socialist Party and Germany’s Social Democrats remain far ahead, in electoral results and recent polling, of the newer parties to their left. In Italy, the ”center-left” Democratic Party (itself a new party, founded in 2007 as a successor to the L’Ulivo coalition), likewise, overshadows its left challengers.

In France, while the Left Party holds no seats in the French National Assembly, its co-founder and former leader Jean-Luc Mélenchon polled a close fourth (with nearly 20% of the vote) in the recent presidential election, though as the candidate of the non-party electoral vehicle La France insoumise (Unsubmissive France). The Socialist Party remains the leading party in the National Assembly, but the collapse in its support in the polls and poor showing in the recent presidential elections (fifth, with just 6%) suggest the possibility of its eclipse as the major party on the French left. The next National Assembly elections are slated for June.

Green parties, another potential source of left opposition to Third Way social democracy, have only gained electoral traction in a few countries, most notably in Germany (where the Greens were twice in governing coalitions with the Social Democrats). In general, however, we have yet to see powerful coalitions between the class-struggle left and the greens.

Class Struggle and Revolutionary Politics

There are also lessons here for the revolutionary left—that is, those whose aim is not some form of reformed capitalism, but the replacement of capitalism by an egalitarian, democratic, and cooperative alternative. The case for this perspective relies on two ideas. First, that it is necessary to abolish capitalism to solve the searing problems of the present day. Second, that it is possible to build a future society, embodying the virtues described above, and that this would be preferable to capitalism or any other plausible alternative.


We currently face the rise of far-right movements in numerous rich capitalist countries: The election of Trump on a populist, nationalist, white supremacist, nativist platform (though with a popular-vote minority) is a prominent example. Some others: In the Netherlands, Geert Wilders’s Party for Freedom (PVV) is the second-leading party after the March 2017 elections (see Marjolein van der Veen’s feature in this issue). Marine Le Pen of the National Front finished second in the first round of the France’s presidential election in April (though polls show her trailing the ”centrist” candidate she will face in the runoff round in early May.)” In Austria, Norbert Hofer, leader of the far-right Freedom Party, narrowly lost the presidential election last year (he lost the May 2016 runoff election by a razor- thin margin and, after contesting the result, lost by a wider margin in the December re-run). In Greece, the neo-Nazi Golden Dawn party—more known for street violence than for electoral politics—is now the third-largest party in the Greek parliament (though far behind the mainstream right New Democracy and the social democratic SYRIZA).

Election results and election-related polling are used, here, as indicators of these parties’ mass following. It is not yet clear, however, what means far-right movements (existing or yet-to-come) might use in attempting to attain state power. The answers could include electoral means, street-level paramilitary violence (against opposed organizations, scapegoat groups, etc.), the forcible overthrow of constitutional governments (by paramilitary means or with support from existing state armed forces), the destruction of constitutional norms after attainment of government power (or ”self-coups”)—or various combinations of the above, as in the cases of the Fascists in Italy and Nazis in Germany in the 1920s and 1930s.

Between 1930 and 1933, the Russian revolutionary socialist and Marxist theorist Leon Trotsky, by then exiled from the Soviet Union, wrote voluminously on Germany and the rise of the Nazis. (These writings were later collected as The Struggle Against Fascism in Germany (Pathfinder Press, 1971).) Trotsky attempted, without success, to rouse the main working-class political parties in Germany—the Social Democrats and Communists—to effective united action to resist the rise of Hitler. Trotsky denounced the nationalism, racism, and anti-Semitism of the Nazis, but his analytical perspective focused heavily on class (with both the usefulness and limitations this implies). He framed the struggle as one between the working class and its parties, on the one hand, and the capitalist class, on the other. For the latter, fascist movements, based on the ruined old middle class (small farmers, shopkeepers, etc.), served as a cudgel against the working class and the threat of social revolution.

Some of the central themes in Trotsky’s writings were:

A rejection of ultra-left disdain for democracy. Trotsky, as a revolutionary socialist, was a critic of bourgeois democracy, but he insisted that revolutionaries must fight to defend democratic freedoms in capitalist societies. He termed freedom of association (e.g., to form labor unions or political parties), freedom of expression (e.g., to have a party press), and so on ”elements of proletarian democracy within bourgeois society.” These, Trotsky insisted, were important achievements of past popular struggles, and their defense was crucial to maintain the fighting capacity of the working class.

A clear recognition of the defensive position of the working class. The rise of fascism threatened the working class, in Trotsky’s view, with a historic defeat. He had no use for bluster like that of the German Communist Party—which downplayed the dramatic electoral gains of the Nazis, the rise of Hitler to high office, etc., and insisted against all evidence that their own triumph was soon to come. In Trotsky’s view, this was a disastrous failure to fully understand the situation as defensive rather than offensive. A Communist offensive, under the conditions of the time, would mean ”smashing its own head against the bloc of the state and the fascists.” The task at hand was to organize defensive action to avert an impending disaster.

The urgent necessity for a working-class united front. Trotsky directed his appeals especially to the Communist Party rank-and-file. The party had disastrously rejected practical cooperation with the Social Democrats—most notoriously, attacking social democracy as a ”twin” of fascism or as ”social fascism.” Trotsky emphasized, instead, the need to establish effective joint defensive action, arguing repeatedly that Communists’ appeal to Social Democratic workers should take this form: ”If the fascists come tonight to wreck your organization’s hall, we will come running, arms in hand, to help you. Will you promise us that if our organization Is threatened you will rush to our aid?” This sort of united front, he noted, required no broader political agreement, common program, etc.

A lack of illusions about the bourgeoisie and its traditional political parties as allies against fascism. The big capitalists, in Trotsky’s view, did not consider the Nazi Party ”their” party, and would have preferred less risky means of crushing the working class. Yet, not confident that any other means would be sufficient, they generally supported the Nazis. The capitalists, he argued, ”acknowledge but one law: the struggle for profit. And they conduct this struggle with fierce and implacable determination, stopping at nothing and still less at their own laws.”

The far greater difficulty—but not impossibility—of fighting fascism once the fascists controlled the government. Trotsky recognized that it was one thing to defend a union hall or party headquarters against armed fascist thugs, and quite another to confront the full repressive apparatus of the state. By early 1933, after Hitler had assumed the position of chancellor, Trotsky wrote: ”[T]his is still not a decisive or an irrevocable defeat. The enemy, who might have been crushed while he was only striving upwards, has occupied today an entire series of commanding posts. This allows his side a great advantage, but there has been no battle as yet.”

Revolutionary socialist politics have a long history in Europe, and there is no shortage of self-described revolutionary organizations, of diverse ideological traditions, in Europe today. However, for the most part, revolutionary socialism has been quite marginal to the politics of most European countries for decades. (Even in countries with influential Communist parties during the post-World War II period, like France and Italy, these parties settled into reformist politics.) The relative stability of European capitalism in the latter half of the 20th century and the strength of a reformist social democracy (in some cases paying ceremonial tribute to the dream of a ”socialist” society far off on the horizon) blunted the appeal of social revolution. The present period shows, however, that changed underlying conditions—the erosion of social democratic reforms, the eruption of a serious crisis of capitalism, the vacuum created on the left by the rightward drift of the social democratic parties themselves, and even the emergence of mass opposition movements in some countries—do not automatically lead to growing influence for anti-capitalist forces on the left.

The reconstruction of a meaningful anti-capitalist politics in Europe faces two enormous challenges: First is the reconstruction of the working class’s capacity for struggle.

It is not only in the United States that the power of the workers’ movement has eroded in recent years. The decline in union membership as a percentage of employed workers (or ”union density”) serves as a quick, rough indicator. High-income countries are divided into basically two groups, those where union density has declined significantly and those that are treading water. Between 1999 and 2012-2014 (using the most recent year for which data are available), out of 21 high-income OECD countries, not one had experienced a substantial increase, six were treading water (with a change of less than 10%, e.g., for a country with a union density of 25% in 1999, a changes of less than 2.5 percentage points in either direction), while fifteen had experienced substantial decline.

Strike rates, too, are down across the capitalist world. In principle, a decline in the most visible form of conflict between capital and labor could have any of several explanations: a trend toward more amicable relations between capital and labor, a substitution of alternative means of struggle by workers and unions, or a preponderance of power on one side or the other (so that the weaker side does not dare engage in a frontal confrontation). It’s quite obvious, in the current period, which of these is the case.

The weakness of working-class movements is also evidenced in income trends. Real wages in high-income capitalist countries have stagnated in recent decades. As productivity has increased, and employers have captured most of the income gains, workers have seen their shares of national income erode. A July 2016 McKinsey Global Institute report, describes the trends as follows: ”From 1970 to 2014, with the exception of a spike during the 1973–74 oil crisis, the average wage share fell by 5 percent on an indexed basis in the six countries we studied in depth [United States, United Kingdom, France, Italy, the Netherlands and Sweden], and in the most extreme case, the United Kingdom, by 13 percent.”

This is not to say that inexorable forces doom workers everywhere to their current fate. Differing institutional conditions in different countries can make significant differences. Workers have suffered a catastrophic decline in union membership in some countries but not others, with the political conditions for union recognition, collective bargaining, and the right to strike explaining much of the difference. Differences in these factors, as well as in government employment policies and income redistribution, also explain different outcomes between different countries in terms of the income split between labor and capital.

It is not a truism, however, that changes in government policy (like more favorable legal conditions for union organization or greater protection for the right to strike) must precede a major turn of the tide. A worsening legal and political environment, to be sure, is a major factor in labor-movement decline in many countries. However, we should recall that major upsurges in labor organization, strike waves, and so on have often happened under conditions that, in important ways, were less favorable to the labor movement than those of today. (Think, for example, of the great upsurge of the 1930s in the United States.) Nor is it obviously the case that a reconstruction of social democracy’s postwar heyday—with large and stable unions, a more favorable division of the national income, an expanded welfare state, or a reinvigoration of the reformist social democratic parties themselves—must precede the revival of a more radical anti-capitalist politics.

From the vantage point of a revolutionary anti-capitalist project, what is necessary is to reverse the defensive and demobilized position—and the death by a thousand cuts—that is the current reality for the working class in so many countries. This means a revival of the capacity for mass action, such as large-scale strikes, which leading revolutionary Marxists of a century ago, like Rosa Luxemburg, saw as cauldrons of class consciousness. It requires a broad politics of solidarity, in which struggles are not confined to the narrow interests of this or that particular group (whether defined by occupation or industry, broad social layer such as ”white collar” vs. ”blue collar” vs. ”the poor,” or by fault lines such as native vs. immigrant).

What it does not require—indeed, what must not be tolerated—is for such unity to be forged at the expense of silencing the grievances of historically subordinate groups (such as racial/ethnic minorities, women, or immigrants). It must not assume that the leadership will come from some traditional ”core” of the working class, who will deign to reach out and include other groups. Indeed, the leadership for a new radical movement may come precisely from groups that were excluded or marginalized by the labor and social democratic movements of the past. Moreover, the forms of mass action need not be exclusively workplace-based. Large protest marches against austerity, in Greece, Spain, and other countries, were certainly an encouraging sign (though they have ebbed since).

Second is the reconstruction of a nexus between class struggle and socialist politics.

To accomplish that, it is not sufficient for socialists to proclaim the superiority of an egalitarian, democratic, and cooperative socialism of the future to the unequal, hierarchical, and predatory reality of capitalism today. An appealing vision of a new socialist society is certainly necessary, however partial and speculative it must be (a detailed and specific blueprint would verge on utopian fantasizing). But it is not sufficient, since a vision of that kind—of the world we are fighting for—has to be quite stable. It cannot change, as political slogans and demands must, to match the pulse of present-day struggles. (At worst, a steadfast emphasis on the necessity of revolution or the superiority of life ”after the revolution” can devolve into static sloganeering disconnected from such struggles.)

Nor is it sufficient for revolutionaries to be exemplary builders of labor unions or working-class parties, or exemplary fighters for immediately realizable reforms. Serious engagement in actual movements is necessary, if revolutionaries are to achieve meaningful influence with the much broader groups that are organizing and fighting (however partial the objectives of those movements may be). Again, however, it is not sufficient. Building protest and reform movements can lead to real gains within the confines of capitalist society—rather than advancement toward the abolition of capitalism. (At worst, ”revolutionaries” who confine themselves to the role of building reform movements are really not revolutionaries at all, but exemplary reformists.)

Déjà Vu All Over Again?

The two roads outlined above are not hypotheticals. They are descriptions of a division that afflicted European social democracy in the late 19th and early 20th centuries—between the so-called ”minimum program” (the fight for reforms realizable under capitalism, which by the 1910s was unmistakably the real daily work of the main social democratic parties) and the ”maximum program” (the objective of socialism, which by then was largely confined in these parties, as the Russian revolutionary socialist and Marxist theorist Leon Trotsky later put it, to ”holiday speechifying”).

Trotsky outlined, in the 1938 Transitional Program for Socialist Revolution, an alternative approach to overcome this split between practice of reform and preaching of revolution—to ”help the masses in the process of the daily struggle to find the bridge between present demand and the socialist program of the revolution.” The idea was to raise, at each turn, demands that both offered plausible answers to current problems under capitalism and thrust at the foundations of the capitalist system.

One example, from the Transitional Program itself, is for the workers’ movement—confronted by capitalists’ claims that cost increases force them to raise prices—to demand that the employer ”open the books” and show whether it is costs, or rather monopoly profits, that explain high prices. Thus, a struggle over prices and, indirectly, the distribution of income within capitalist society, is turned into a struggle over ”business secrets,” that is, one aspect of capitalist property rights. Other planks included the expropriation of the big banks, shortened work hours without reduction in total pay, and the expropriation of shuttered factories and their reopening under workers self-management. Far from being pie-in-the-sky fantasies, these are actually ideas that have been seriously proposed, by various figures on the left, in response to the recent financial crisis and global recession, though seldom in the form of a coherent program.

While some of the above demands may still be apt now, the point is not to take specific demands written over 75 years and apply them by rote today. Rather, the idea is to craft a political program responding seriously to present problems, but pointing to the necessity of fundamental change in the economic system—a social revolution—to resolve these problems. No single demand would, in itself, amount to the abolition of capitalism and yet a full program of ”transitional demands” could not be realized within the confines of capitalist society.

It is conceivable that a social democratic reformism could take root again, and there could be a new period (similar to the Cold War heyday of social democracy) of reformed capitalism. One of the ironies of the present period, however, is that the champions of neoliberal capitalism tell us that the key features that legitimated postwar/Cold War capitalism in the rich countries of the West—rising standards of living, strong and stable trade unions, improved conditions of labor, an expansive welfare state, etc.—are now impossible. Back then, when the rulers of the rich capitalist societies felt the need to defend the superiority of their system over possible alternatives, we were constantly told that contemporary capitalism was not the Dickensian hellscape of the past, and that this reformed capitalism was superior to ”socialism” in every way. Today, we are told that we just can’t ”afford” the social protections (unions, the welfare state, etc.) we once enjoyed, or expect the economic progress (rising incomes, increasing leisure time, etc.) we were once promised.

Are such social improvements, indeed, now impossible? Not physically impossible, to be sure, for contemporary societies now dispose of far greater productive powers than those of even the recent past. Impossible within the framework of the capitalist world economy? The defenders of capitalism insist that they are.

If that is true, then, indeed, there is no alternative—to social revolution.

is an economist and historian and co-editor of Dollars & Sense.

Wolfgang Münchau, ”Perplexing failure of Europe’s centre-left,” Financial Times, Sept. 20, 2015 (; Council of Europe, ”The European Social Charter” (; Tim Ross, Peter Dominiczak and Ben Riley-Smith, ”Death of New Labour as Jeremy Corbyn’s socialist party begins a period of civil war,” The Telegraph, Sept. 12, 2015 (; Wikipedia, various pages (for election results); Organisation for Economic Co-Operation and Development, Trade Union Density (; L.J. Perry and Patrick J. Wilson, ”Convergence of Work Stoppages: A Global Perspective,” Journal of World-Systems Research, Volume XIII, Number 2, 2008; L. J. Perry and Patrick J. Wilson, ”Trends in work stoppages: A global perspective,” Working Paper No. 47, Policy Integration Department, Statistical Development and Analysis Unit, International Labour Office, November 2004 (; Jayati Ghosh, ”The Economics of Political Change in Developed Countries,” Frontline, Aug. 19, 2016; Richard Dobbs, et al., Poorer Than Their Parents? Flat or Falling Incomes in Advanced Economies, McKinsey Global Institute, May 2016; Leon Trotsky, The Transitional Program: The Death Agony of Capitalism and the Tasks of the Fourth International (Bolshevik Publications, 1988).

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