PostPolitik - The blog of Alessio Postiglione

God is Dead, Marx is Dead, and the Progressives are not feeling that good themselves. We can certainly borrow and reshape this famous Woody Allen quote in describing the health condition of the European Socialists.

The main point is that a large part of European progressive public opinion, especially in Southern Europe, perceives austerity as a conservative or neoliberal policy and when Socialists address fiscal consolidation, they are regarded as betraying their electorate.

For instance, in Italy, Matteo Renzi has been accused by the left wing minority of the Democratic Party of being too conservative, a Thatcherite and even a fascist. In France, Manuel Valls, has formed a new government with the exclusion of the dissidents led by former economy minister, Arnaud Montebourg, who demanded an end to austerity. In Spain, Pedro Sánchez has become leader of PSOE, while supporting a reformist stance. In Britain, Labour has lost the elections because voters feared the government could increase a monstrous deficit and bankrupt the country.

Then, this division between austerity-reformists and neo-Keynesians has become the main rift in the Socialist parties.

As a result, the Progressives are in dire straits and look polarized between following the path of austerity and becoming economically conservative or changing towards a New Social Deal. From the 80s onwards, the Right seems to have defeated Left politics, not merely from a political stance, but culturally. The Right’s thinking has become hegemonic, and many political positions such as the predominance of economic freedom on social justice and the hostility towards redistribution have imbued the culture of the Left.

For this reason, the reformists have come to have more things in common with centrist parties, whereas the Socialist minorities all share the same stance: opposing austerity, stimulating growth, constituting a front against Germany by establishing a sort of Keynesian International.

However, in recent years, the strategy of the Left has proven to fail; in all respective countries, the leaders who favored a left turn are the political losers. There is only one exception: Syriza, which is not part of the PES group.

The Keynesian heyday was reached in March 2012, when all the European Socialist leaders signed the Paris Manifesto. The socialist recipe included new investments, levying a transaction tax and creating a debt pooling mechanism that led to the issue of Eurobonds.

Surprisingly, the leaders who signed that Manifesto were later defeated and their agenda was swept away. Mr. Hollande won the Presidential scrutiny but lost the European elections, and he has now softened any kind of criticism towards the supposed German obsession with austerity. Mr. Bersani, the Italian head of the Democrats, was fired and the leadership passed to his bitter enemy Matteo Renzi, who brilliantly won the European elections, thanks to his pro-liberalization agenda. The electoral wreckage of the Spanish PSOE prompted Alfredo Pérez Rubalcaba to resign and favored the victory of the reformist Pedro Sánchez.

Notwithstanding those leaders who advocated a paradigm change have also been backed by numerous intellectuals like Paul Krugman and John Quiggin, they are the political losers. So, considering the vast support that the “Left Front” gained and that the recession is not over, why did they lose?

My opinion is that the proposals related to the adoption of austerity measures were simpler and selfevident: the debt is high, we only need to cut public expenditure.For this reason, the electorate rewarded politicians who made it simple. Austerity is probably not the right answer but it is certainly the clearest answer a politician can give.

In effect, the Keynesian proposals were abstruse, spanning from obscure acronyms such as OMT to “golden rules” and other complex technicalities. Last but not least, pro-austerity measures were perceived by the electorate as an approach to save not only public money, but private money too. Counter-cyclical policies are not for free and European citizens are learning it the hard way. Many socialist parties in Europe have not attempted to trigger growth via allocating economic resources more efficiently, but instead, by raising new taxes. Cutting benefits to public servants, the traditional electoral constituency of the Left, can be very dangerous. Obviously, Popular parties can implement pro-cyclical policies more easily, without fear of wasting the votes of the public servants who risk their posts due to the severe cuts made in accordance with the austerity approach.

Consequently, the radical socialist option is in a cul de sac. It is too complicated, not easily understandable, and it forecasts no tax relief. A fatal problem, especially in countries like Italy and France where there is high fiscal pressure. As a result, austerity has become culturally hegemonic, even among the Socialists; at least the ones who win elections.

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