The limits of Social Democracy.
Here follows an outline of the reasons why regulated capitalism with a welfare state and some nationalised utilities still contains some of capitalism’s most pernicious elements.
1.) It fails to strike at the heart of why capitalism is wrong
Social democratic economies maintain the underlying capitalistic tenets of private ownership of the means of production, sale of goods on a market for profit, and competition between firms. When politicians such as Bernie Sanders bemoan the underpayment of workers and assert that merely raising the minimum wage will alleviate the problems of capitalism and allow them more purchasing power, they fundamentally misunderstand the reason why workers are underpaid in the first place: namely, that competition for short term profits ensures that wages must be driven down so that businesses may remain competitive. Herein lies the central contradiction of capitalism that social democrats fail to address. The workers are systematically kept too poor to buy back the goods that they are being sold, as they must be sold at a profit. The ‘anarchy of competition’ ensures that businesses must produce as much as they can, yet not all they produce can be sold. The forces of production (sale of goods for profit) conflict with the relations of production (supply and demand) creating a glut in the market that can only be resolved by opening up profitable investment opportunities overseas. Social democracy, by maintaining these property relations, merely tinkers around the edges of the problem, without solving it. The problem is not ‘underconsumption’. The problem is the process which makes ‘underconsumption’ a necessity, which is overproduction and the existence of the profit motive.
2.) It necessitates the economic plunder of poorer nations.
The endless accumulation of capital in the interests of reducing overheads and driving down costs of production entails a search for new markets to maintain profitability for large corporations. Historically, breaking into overseas markets has entailed using the military and State apparatus to forcibly break down barriers to entry within foreign countries and subject local producers to competition from more advanced manufacturers which they cannot keep up with, meaning that they must either starve to death or move to another country. In 1840, British soldiers massacred Chinese at Ningbo and Canton, paving the way for the incursion of previously banned opium onto Chinese markets and the ratification of the humiliating Treaty of Nanking in 1842, which forced the Chinese to cede control of tariff autonomy and the court system. Even Clement Attlee, revered by much of the modern British Left for the introduction of the NHS and the welfare state in the 1945–1951 Government, relied on imperialistic plunder to fund these endeavours. The bombing of Malaysia for their tin and rubber reserves, which involved maiming civilians with Agent Orange, was the price that was paid for improving the lives of the working class at home.
Although many modern — day social democrats pay lip — service to the acknowledgment of this historic violence, they continue to perpetuate the underlying economic systems responsible for it. To this day, social — democratic nations such as Sweden, Norway and Denmark are reliant upon wealth accrued by imperialistic means. In 2008, Norwegian communications company Telenor partnered with a Bangladeshi supplier that employed child labour in substandard conditions, also devastating the surrounding farms. Norway also dropped 588 bombs on Libya, and hosts oil and gas companies such as Statoil, which have been known to bribe foreign governments. Yet Bernie Sanders continues to heap praise on Scandinavian countries, seemingly oblivious to their rapacity.
3.) It pits workers in the first world against workers in the third world
Pacified by the concessions they gain from Capitalism, workers in the first world are, under social democracy, far less likely to empathise with the plight of workers abroad, or recognise the international manifestations of the same Capitalist system which they fought against at home. During the American Civil War, British industrial workers boycotted imports of cotton from the slaving South, then Britain’s biggest trading partner. Although there were some cotton labourers who called upon the Royal Navy to smash the blockade, it stood firm. President Lincoln himself acknowledged this sacrifice in a letter in 1863, which referred to the blockade as an act of “sublime Christian heroism, which has not been surpassed in any age or in any country.” This deeply moving and selfless act, in which British workers recognised that the forces keeping African Americans enslaved were the same forces keeping them in perpetual drudgery, is emblematic of what can happen when solidarity exists across national boundaries. If the world’s poorest nations are pillaged to provide for the working classes of the world’s richest nations then they will cease to empathise with them because, as Lenin stated: “The industrial workers cannot fulfill their world-historical mission of emancipating mankind from the yoke of capital and from wars if these workers concern themselves exclusively with their narrow craft, narrow trade interests, and smugly confine themselves to care and concern for improving their own, sometimes tolerable, petty bourgeois conditions.”
While Bernie Sanders, Alexandria Ocasio — Cortez, Jagmeet Singh and other social democrats may pursue policies that allow for an improvement in the livelihoods of workers, such as wage increases, more regulation and accountability for large corporations and a sizeable welfare state, this should not be confused with substantive changes in the relations of production. Their policies, while certainly preferable to neoliberal capitalism, will not address the underlying contradictions of capitalism, as exchange of goods for profit and market competition will still predominate. Supporting politicians such as these in an attempt to reorient the Overton window away from the Thatcherite — Reaganite consensus which has dominated since the 1980s is undoubtedly a wise and pragmatic move, yet we cannot afford to put all of our hopes behind them. In the long term, only a democratically run economy dominated by autonomous federations of worker owned organisations, in which production is oriented towards satisfying human need, will resolve the problems of capitalism.
