THE ＧＬＯＢＡＬＩＺＡＴＩＯＮ ＆ ＧＯVＥＲＮＡＮＣＥ ＰＲＯＪＥCＴ， ＨＯＫＫＡＩＤＯ ＵＮＩＶＥＲＳＩＴＹＷＯＲＫＩＮＧ ＰＡＰＥＲ ＳＥＲＩＥＳSocial Democracy in the 20th Century
And its Future
Ⅰ－１２

Thomas Meyer, University of Dortmund＊

Paper for the Symposium, East Asia-Europe-USA Progressive Scholars’ Forum2003 , 11-15 October, 2003.
＊

None of these papers should be cited without the author’s permission.

A sustainable world of democracy, peace, security, and social justice – PES policy report

Prof. Dr. Thomas Meyer,
University of Dortmund
Friedrich-Ebert-StiftungTokyo Conference Oct. 03
Social Democracy in the 20th Century and its Future
1. 20Th’ Century experiences
Social Democracy was in the first three quarters of the 20th century
characterized by high degrees of diversity in diverse countries (Sassoon
1996). Whereas most of the continental social democratic parties till longafter the end of the second world war continued to stick to traditional
concepts of orthodox socialism in its nineteenth’ century shape withframework planning and the socialization of the means of production at its
core, northern social democrats and some like the Netherlands, Austria or
Germany on the continent had adopted a much more pragmatic
approach that aimed at combining market capitalism with a welfare statethat was able to decommodify the basic social goods. This was thefamous Godesberg approach ( SPD’s Godesberg Program of 1959). The
main difference lay in the continental parties’ assumption that theobjectives of social democracy required a break with the logic ofcapitalism whereas the Nordic parties as early as in the nineteen hundred
twenties began to see the logic of capitalism as an appropriate device toproduce the economic foundations for a universalistic welfare state.
Notwithstanding such heavy differences at the level of concepts andprogrammatic rhetoric there was, however, a remarkable degree of
convergence in terms of practical policy preferences across all social
democratic parties. They all supported the building up of comprehensive
welfare states that combined a more or less regulated and tamed
capitalist economy with social rights and systems of social security. And
although the welfare systems that were created in the post war period,
some of them with roots back in the nineteenth century, varied
substantially between what Esping- Andersen has coined the AngloSaxon, the Continental and the Scandinavian model, all these types had,
nonetheless, some basic features in common ( Esping-Andersen 1990):
first, they accepted the capitalist mode of wealth creation at the
production side of the economy but only under the condition ofsubstantial degrees of wealth redistribution at the welfare state side;
second, the welfare state was seen as both a device for ensuring social
justice and an appropriate means for the correction of the economic
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defects of market capitalism, particularly the business cycle and massunemployment;
third Keynesian macro-economic regulation seemed to provide an
instrument for the political taming of the ugly side of the economic logic
of capitalism;
forth, the constitutionalisation of social and economic rights and thedecommodification of all those social goods that catered to them; and,fifth, last not least, such a pragmatic combination of the three pillars ofliberal democracy, the welfare state and an embedded capitalist market
economy that was able to make good on the promises of all theindividual’s universalistic basic rights: liberal, political, social, economic
and cultural.
In the golden age of modern social democracy in all countries that had
been ruled by social democratic parties for a sufficient space of time (andeven in some others where parties with similar persuasions had been in
power) a more or less social democratic model of welfare capitalism had
been installed successfully and till the nineteen hundred seventies was
performing with considerable success (Merkel 1993, Scharpf/Schmidt
2000). Notwithstanding its highly divergent traditions social democracy
as a family of political parties had arrived at a considerable degree of
convergence in practical terms. i.e. in the basic features of the social
model the various parties endorsed, whereas theoretical differences
regarding the ultimate goals of social democracy and political semantics
went on to prevail.
Arguably in the golden age between the end of the Second World War
and the mid- seventies when full employment a reality all the different
models of welfare capitalisms including the British Beveridge model met
most of the criteria of a social democratic welfare state to an acceptable
degree. With full employment being provided, social citizens’ rights being
installed that guaranteed social security, free access to education andtraining and, thereby, a minimum level of basic equality in the access tobasic social goods. Some of the fundamental norms of social democracy
were fulfilled more or less. Though the Scandinavian welfare state may
claim to be the most genuine version of social democracy, the other
European welfare states, like Austria, the Netherlands or Germany,
however, were and are to varying degrees compatible with social
democratic norms, too.
In this context it needs to be mentioned, however, that social democracy
consists of much more than an appropriate welfare state. It relates toconditions of equal liberal, social, political, cultural and political2

A sustainable world of democracy, peace, security, and social justice – PES policy reportrights in a broad variety of political and societal sub- systems: thepolitical system, the constitutional systems of basic rights, the publicsphere, civil society, the degree of democratization of the various
societal sub-systems, the educational system, the industrial relations
system, the type of economic governance, participation in trans- national
co-ordination and political culture. Due to the lack of space here but evenmore to the lack of empirical research in the respective fields thefollowing analysis is restricted to the welfare state and in part to a few
related issues (Meyer 2004).
2. The Challenge of Globalisation
With the onslaught of the oil price crises in the mid seventies and the
beginning of the process of global market integration in subsequent
years the social democratic model in all its different forms started to be
increasingly seriously challenged. These new challenges accompanied
by some other novel problems shared by all modern service societies(such as the aging of the society, the new individualism, thetransformation of family values and connected with them thereproductive behavior) step by step brought not only their practice of
pursued policies much closer to each other than ever before but also
their conceptual thinking. Since the nineteen hundred seventies some
European Social Democratic Parties (Dutch, Danish) had started torevise their policy concepts and by the middle of the nineties, when thethrust of economic globalization made itself fully felt, they all hadchanged some of their core policy guidelines and also their overall
political approach considerably (Merkel 1993, Scharpf/Schmidt 2000). A
new approach to social democracy was, thus, emerging.
The Golden Phase of European Social Democracy came to a definite
closure in the course of the nineties of the 20th century (Scharpf 1987/
Merkel 1993, Scharpf/Schmidt 2000)). In the subsequent two decades of
its depressive phase – or the period of its identity crises - it turned out
quite clearly what the new constraints and limitations were, but for long it
seemed to be rather obscure which new resources could be tapped(Cuperus/Kandel 1998, Meyer 1998). Social Democracy at the turning of
the century took a new shape –not with complete simultaneity among all
connected parties, not with the same degree of coherence, and not withconvergence of all the instruments at the policy level- yet with aremarkable degree of overlapping in some of the most basic outlines of
their political approach. This process is pampered by a new emphasis oncontextual benchmarking, i.e. the readiness of all the parties to learn
from best practice models in other countries and reconsider longstanding traditions in the light of the epoch making challenge ofglobalization.
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Amongst the new constraints social democratic reform strategies have tocope with some of the most crucial ones are:
 The partial devaluation of even gradual destructionor theregulatory and social frameworks through the global integration ofmarkets that had embedded national capitalist economies
throughout the most part of the twentieth century.
 The devaluation of the Keynesian macro – economic coordinationwhich erstwhile had been the favourite tool of social democratic
economic policies- due to economic globalisation.
 The increasing stress on the welfare budgets due to high rates oflong term unemployment and new social developments such as theaging of society and related health costs;
 Intensified global competition in a broadening variety of economic
sectors and also of entire welfare state and regulatory regimes
including taxing; The service sector dilemma, i.e. the problem that new jobs under
the stress of globalisation cannot be created in great numbers inthose economic sectors that are exposed to global competition but
mainly in the “sheltered” sectors of personal services, whereas
different types of restrictions in different welfare systems are blocking
job creation just here ( budget problems prevent the creation of jobs
in the public vice sector in the Scandinavian countries, high wage
costs and inflexible labour markets in the continental countries).
 New social and ecological risks emerging from the latest stages ofmodernization (e.g. in the social sector particularly child poverty insingle parent families, single mother unemployment and poverty, thepermanence of unequal life chances due to insufficient cognitive
training und education of poor children in their early childhood).
 The growing diversification of the different parts of the old and newworking classes in terms of the attitudes, political aspirations andelectoral behaviour; In some countries the emergence of new rivals on the left in theelectoral arena, especially Green Parties or the revival of radical leftparties.
Since the middle of the nineties of the twentieth century Europe has
witnessed the come back of Social Democracy in the majority of its
countries (Cuperus/ Kandel 2001). In the year 2002 Social Democratic
Parties were in government in twelve of the sixteen countries of theEuropean Union. Was this increased public support due to an underlying
renaissance of social democratic political concepts, policies and politics,
that were able to meet the new challenges?
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This is yet an open question. Theoretically the new challenges are of aparticularly intriguing nature. They provoke answers pointing incontradictory directions that are not easily to be harmonized. The reason
is obvious, as the dis-embedding of national economic systems caneither be responded by way of strategies of global re-embedding
according to the new global scope of capitalist markets or by way ofadjustment of the national societies to the new conditions ofglobalisations or by a whole variety of combinations between both ways.
The basic strategic dilemma of the New Social Democracy in the shortand medium term perspective is coping with or shaping globalisation or
how to combine the two options realistically with each other (Meyer
2004).
The discussion in the various quarters of social democracy ischaracterized by the relative emphasis that is put on each of these threealternatives. Roughly spoken, whereas traditionalists tend to maintainthat global re-embedding of integrated markets is possible in the near
future and thus the basic approach at the national level can stayunchanged, the hard core third- wayers pre-suppose that global
conditions can hardly be influenced so that the thrust for social
democratic renewal must come from radical changes in domestic politics,
and a third group of moderate modernizers and staunch internationalists
aim at combining medium term strategies of positive globalisation with ashort term radical renewal of the domestic approach of social democracy.
Ho to reconcile these contradictions so that the objectives of social
democracy are still met under radically changed conditions?
3. A New Strategic Dilemma of Social Democracy
From a theoretical point of view there are six key elements that mark the
difference between social democracy and libertarian democracy beyond
the framework of liberal democracy that both approaches share. Social
democracy no less in the era of globalisation is characterised by a set ofnorms, basic requirements institutions, instruments and policies that
follow from the universalistic citizens’ rights that no government or other
legitimate political institution has a right to deny (which cannot bejustified here in detail. Meyer 2003, 2004 forthcoming) :1. The constitutionalisation not only of liberal, political, and cultural
basic rights but of social and economic rights as well for each andevery citizen;
2. The persuasion that the realization/ actual effectiveness of all fivecategories of basic human rights for all citizens in everyday life is apolitical obligation that legitimate democratic governance has tofulfil.
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A sustainable world of democracy, peace, security, and social justice – PES policy report

3. This requires the decommodification of such social goods thatare conditional for the realization of human rights in all their fivedimensions, i.e. their supply as public goods, above all social
security.
4. The conviction that in order to achieve this objective markets needto get regulated, complemented by public services
andembedded in a network of ecological, politicaland social
regulations.
5. The guarantee of equal life chances for all citizens through equal
access to education, training and the labour markets.
6. The guarantee that people have an appropriate say in all political,
economic and societal decisions concerning their living conditions.
Its is evident that both social change and globalisation are conducive tochanges in the instruments that are required for any given society tomeet the criteria of social democracy and also the level at which they
possibly can be fulfilled. Its is, however, likewise evident that the criteria
as such would continue to be valid whichever changes in thecircumstances of their fulfilment may occur.
Yet -as briefly mentioned beforethe historically new strategic
dilemma that emerges under the conditions of economic globalisation
poses a puzzle to social democratic politicians and strategists. It consistsin the contradictions between the domestic and the trans-national options
to act. As of today it appears uncertain to what degree a policy of reembedding the global economy in a way functionally equivalent to what
was implemented in most countries shaped by social democracy will be
feasible in the foreseeable future, though arguably such a strategy is notaltogether unrealistic or an empty utopia. It is, however, completely open
to what degree and in what space of time progress will be made on thisagenda. From this point of view, it might appear that the traditional
approach of social democracy needs no change in substance but rather
a transfer to the trans-national arena. This is the stance of the actual
traditional left.
Seen, however, from a national angle and from what needs to be done
here and now to cope with the new challenge of globalisation a strategy
of immediate adaptation seems without realistic alternative. This is the
stance of most of those traditionally coined modernisers. It was in aunique fashion the initial position of Tony Blair’s understanding of what is
new in the Third Way. It meant the departure from much of social
democracy as we knew it.
The main stream of contributors to the social democratic debate inEurope, the elites of most of the social democratic parties in particularare, however, inclined to combine both strategies in some or the otherway. It is here, where the strategic dilemma makes itself fully felt.
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Theoretically the norms of social democracy could, as it appears, be met
through all the three different strategies, though obviously in different
ways and probably to different degrees, in different time horizons and atdiffering levels of material goods supply. The dilemma, though, consistsin the empirical fact that the concentration on one of the given
alternatives excludes not totally but to a considerable degree investmentof resources in one of the alternative strategies. Some of the policies
necessary for the implementation of one of the three strategies would
exclude certain policies that are part of other strategies or even deprive
them of their legitimacy in relation to the norms of social democracy. The
key examples for this dilemma are taxation and economic regulation.
Under the compulsions of the globalised economy national governmentseven when run by social democratic parties feel the necessity to lower
tax rates even beyond the welfare states’ requirements, andsometimes( Denmark, Sweden) even legislate split tax rates that favour
mobile tax sources like capital, which they never could legitimise if there
was a global tax regulation. The same holds true for many otherregulations of capital and corporate behaviour desirable from as social
democratic point of view but unfeasible as long as there is not global
regulatory frameworks in the respective areas.
For those who rely fully in the feasibility of re-embedding global markets
most of the components of Third Way reforms in the UK, the Netherlands
or since 2003 in Germany would appear to be illegitimate concessions
to libertarianism, whereas those who believe that short term adaptation
to the new conditions enforced by globally integrated markets would tend
to opine that strategies focussed on global strategies are undermining
the very foundations of social democracy at the national level here andnow.
4. Welfare state transformation
Though all welfare states as of today are affected by the twin challengesof aging societies and integrated markets some of them are in terns of
their very structure and their mode of operation far better prepared tocope with the new environment than others. Generally it can be said that
the Scandinavian type welfare states suit the conditions of globalised
markets much better that the continental type, whereas the Anglo-Saxon
type always was sub-optimal in meeting the standards of social
democracy and tends in the changed environment to be more so. A
closer look into the changes in actually implemented policies and thenew policy programs of the European social democratic parties reveals,
despite considerable variance in policy instruments, a historically
unprecedented measure of convergence in the overall approach(Sassoon 1999, Meyer 2001a). This is not only because they share abasic consensus concerning social moral values and political objectives
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A sustainable world of democracy, peace, security, and social justice – PES policy report

but mainly because they all have given priority to short term adaptation
to the new global conditions.
A fair general assessment of the transformation of the national welfare
states that is ongoing everywhere in the OECD realm may be to term it
as a structural transformation on a lowered level that is not yet
completed and also not fully determined in its final shape. It would clearlybe unfounded in light of empirical data to term it, as some observers do,a demise of the welfare state. What are the foundations, the features andthe objectives of present day welfare state’s transformation?
For the Scandinavian welfare states the ongoing structural changes so
far are characterised mainly by slightly lowering the level of benefits andincreasing and differentiating the individual contributions to its funding.
As the problem of underemployment is not yet satisfactorily solved due
the service sector dilemma, its appears that more structural change is
yet outstanding here.
For the Anglo-Saxon welfare states the problem of financial sustainability
seems to be solved whereas the challenges of poverty and unacceptable
degrees of inequality are without convincing cure so fare. It is not yet
obvious how these problems will be tackled in the framework in which
they operate.
The continental welfare states, notwithstanding the divergence in thespecial policy instruments they prefer, converge in a couple oftendencies in their efforts to make their welfare states competitive andsustainable: 1. modestly lowering the levels of benefits, 2. making
benefits conditional on individual efforts to work, 3. putting some parts ofthe social risks back on the shoulders of the individual, 4. whilst giving it
new support to cope.
The Knowledge Economy is transforming capitalism in many respects:
more speedy changes in all dimensions; accelerated obsolescence ofgoods, services, knowledge and professional skills; a more importantrole for small and medium size enterprises; the requirement for higher
levels of job qualification.
New social risks occur and traditional risks worsen: the fast devaluationof job skills; unemployment; poverty; and thus social exclusion. Beyond
all differences in detail and accent the new approach of European Social
Democracy is characterized by a package of interrelated policies all ofwhich represent pragmatic strategy-mixes:
Economic progress, growth and full employment remain mattersof political responsibility;
Socialization of the means of production and state planningremain out ruled as entirely inadequate in an globalised
economy;8

A sustainable world of democracy, peace, security, and social justice – PES policy report

-

-

-

The priority of anti-inflation policies; and subsequently therecognition of the autonomy of the Federal Reserve Banks anda policy of strict budget discipline;
A new approach of cooperation between government andbusiness to achieve the welfare objectives;
A new mix of supply- and demand - side economic policies
implying: favourable (lower) taxes; priority of research anddevelopment to pamper technological innovation; public
investment in human capital (job qualification and requalification) ;Ecologically sustainable growth ( in Germany: ecological tax
reform);Limited increase in the flexibilization of labour markets;
Public job programs for special target groups (young people,
long term unemployed);
In some countries( like France): reduction of working hours and(Netherlands) increased flexibility in negotiations on working
time and wages tripartite systems of cooperation for job creationand growthIn sum, in its economic policies the New Social Democracy is pursuing a
multi- pronged pragmatic approach. Country wise there are differences instressing the single parts of the mix, there is, however, also a broadconsensus concerning the overall composition of the mix.
There are a variety of causes for these welfare state dilemmas that differ
from area to area.
In the pension system the main cause is the reversal of the demographic
pyramid of the society with more and more non-working retired people
and less and less working younger people. The contributions of theworking part of the society, thus, are substantially increasing and/or the
benefits of the pensioners respectively decreasing .
In the health insurance systems the main cause lies in the speedily risingoverall costs due to heightened standards in medicine and medical
technology in connection with the aging of the society that maketreatment both more and more necessary and more and more costly.
In the unemployment insurance and welfare (income support) systems
the key cause lies in the emergence of a double lock of smaller budgets
on one hand and higher costs for benefits on the other, both due to thelasting high rates of unemployment.
The overall balance is marked by unchanged high expectations in thesociety regarding the performance of the welfare state, without andappropriate readiness to pay for it’s increasingly high costs. In some
sectors there is also a lack of self - responsibility and self-directed9A sustainable world of democracy, peace, security, and social justice – PES policy reportproblem – solving activities on the part of the citizens; and there is anurgent need for structural change in order to keep the welfare state
financially sustainable.
There is yet no dividing dispute about the most basic issues: first, that
there is a need for structural change, and secondly, that social security,
the guarantee of a decent life and social inclusion for all individuals must
be protected.
The reforms that are already implemented or envisaged are all aiming at
a new type of welfare state which is more activating; more stern vis- a-vis
fraud; more co - productive in delivering security and more subsidiary.
The new approach implies amongst other measures:• Individuals and families must be aware that they are responsible forthemselves in the first recourse;• The state is clamping down more effective on benefit fraud;• The welfare state in the first instance is a social investment state thatprovides the needy with new opportunities to help themselves ( jobtraining, new qualifications, support for self-help groups)• In return for all subsidies that are given to it the individuals are strictly
obliged to look for and accept available job offers (welfare to work),otherwise they will have to suffer benefit cuts or the loss of subsidies;• An education system that offers life long opportunities for re qualification is considered to be the most appropriate social policy inthe new knowledge economy.
• Strengthening self - help activities, civil and social responsibility by
way of organizing a welfare society;.
• Public social insurance systems are slightly, sometimes evenconsiderably reduced in their benefit levels and individuals forced
share part of the financial burden of services; and at the same time
supplemented by enterprise - and private insurance systems. The
minimum for a decent life will be guaranteed, but the individual living
standard must be protected through additional private initiatives.
• Concerning pensions, unemployment support and sickness benefit
there is a tendency toward flat rates; the protection of the individualliving standard is in decreasing measure the aim of most of thereformed welfare states, it left up to the individual to contribute on its
own –sometimes with additional state support- to such a guarantee forhimself.
• Social self-help organizations are encouraged and supported.
These are some general tendencies that mark the difference of present
day’s welfare states in transition to the welfare state of the golden age.
Degrees and instruments of change differ, however, from country to

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A sustainable world of democracy, peace, security, and social justice – PES policy reportcountry and can be analysed and evaluated only on a country basis (seethe country reports in: Scharpf/Schmidt 2000).
5. The next welfare state
Most recent comparative research has demonstrated that the different
types of welfare states have a highly different capability to cope with the
new conditions of globalisation( Scharpf/ Schmidt 2000, EspingAndersen 2002). In the framework of the new political culture ofcontextual benchmarking that is practised in all social democratic parties
and the related academic communities there are clear indications thatthe traditional path dependency of welfare reform is about to be
substantially relieved. In most continental countries there is a strong
tendency to resists pressures toward a demise of the welfare state bytransforming it into some variant of an Anglo-Saxon type of welfare
residualism without guaranteed social and economic citizens’ s rights.
Instead of this they tend to adopt many features of the Scandinavian typeand enrich it with fresh ideas that cater to newly emerging risks andopportunities.
The direction of this new wave of welfare state transformation that isunderway or under discussion to variant degrees in different countries
can be sketched by the following characteristics (Esping-Andersen
2002). It is:I.

Family- centred: measures to increase the employment rate of
women (e.g. tax, social insurance ); full day care for children of
all ages; affordable public or private services to cater to theneeds of families with two working adults. That would mostprobably increase the fertility rates and thus easing the twinburdens of the aging society and the funding of the long term
funding of the welfare state.

II.

Education –and training- centred: Public education beginningwith early childhood; an offer of full day educational care fromthe first year on throughout the entire childhood and compulsory
education from the fourth or fifth year on; flexible and open
systems of education, further education and occupational
training; a policy of guaranteed second chances foroccupational retraining. This would most probably reduce
inherited social inequalities and make many more people willingand capable to participate in programs of live long learning, It
would in addition also cater to the demands of the knowledge
economy for high skilled labour forces and this combining thepolitics of equality with an economic politics of supply side
support.
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III.

IV.

Subsidizing the welfare state in ways that are better
sustainable in globalised markets: substantial reduction oflabour-related contributions and respective increases of tax
funding, especially taxes on immobile tax resources( Income,real estate a.s.o. ). This can help to create new jobs at the low
paid end of the service sector, and makes the financial sourcesof the welfare state more independent of trans-national costcompetition.
De-segmentation of Labour Markets: amelioration of theprotection of the so far under protected precarious jobs
combined with appropriate modest deregulation of so far “over”protected jobs. This can help to open up the labour markets,
distribute the chances to have a job much fairer and fasten theprocess of hiring new labour force.

There are indications that these policies mark the trend of welfare state
reform in the first decades of the 21st century. Such an New WelfareState would not just provide less welfare. It would be in many respects
much fairer, much more productivity- oriented that the golden age
welfare states were. It would, however, reduce all benefits that consist in
simple cash transfers and re-transfer part of the burden to insure
individual living standards beyond the level of a decent life and social
inclusion on the individual’s shoulders. But it would be sustainable in an
era of globalisation. In many respects even such a welfare state reformthe follows largely the strategy of coping with globalisation requires acertain degree of political and social re-embedding of global markets.
6. Re-Embedding the Global Markets
The issue of globalising social democracy has two dimensions: first,
building a social and democratic framework for globalisation and, second,
the realization of a social democracy in different world regions.
When is comes to a remake of the old standing question whether theconcepts of modern social democracy are outright euro centrist or
universalizable in their substance one has first to make four clear
distinctions concerning both the dimensions and the policy areas of
the concept:- The Philosophical dimension: modern social democracy as apolitical philosophy and as a political culture shaped by theabove- mentioned features. As such it is arguably fully applicablein all parts of the world.
- Domestic policy dimension: modern social democracy as a
package of domestic policies in key areas such as the economy,
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A sustainable world of democracy, peace, security, and social justice – PES policy reportbudget policy, education, the organization of the welfare state andthe like. At this level it is, of course, tailored to the specific situationand needs of the various countries from which the particularvariants of the concept originate. At this level modern social
democratic responses to new challenges will most certainly varywith varying countries and societies. Nonetheless most countries
will be in a position to learn at least something from someothers, following the best practice model with its particular virtues
and restrictions- The global polity dimension : modern social democracy as aconcept for re-embedding global markets in social, ecological,
political, and regulatory frameworks. At this level the concept isdesigned for worldwide political cooperation between equal
partners from all parts of the world. The contribution each country
can make to the required cooperation will, however, be different inquantity and quality.
- The regional politics dimension: Modern social democracy as aconcept advocating political regionalization. At this level theconcept itself arguably is of global relevance, the particular waysof regional cooperation, however, being specific for specificregions( different for the EU, SAARC, Nafta, Mercosur, ASEAN
and others).
In both academic and political discussions of recent years it has become
obvious that the present world order, or in many respects rather disorder, inincreasing measures suffers a risky lack of legitimacy. This legitimacy crises
is, however, by no means restricted to the realm of global politics. It affects
likewise the internal condition of the national democracies irresistibly andincreasingly because the global democracy deficit implies also their own
incapability to keep major developments that affect the well-being of theircitizens substantially under the control of their own jurisdiction.
Both the lack of global democracy and the lack of effectiveness and reach ofnational democratic jurisdiction are just reverse sides of the same coin. One
expressions of this being the growing protest movement particularly ofyounger people against the present mode of globalisation and its
consequences for large parts of the world’s population both in the South andin the North of the globe.
In sum: societal, economic or political actions that either cause unavoidablesocial facts or affect the basic rights of people need to be tackled throughlegitimate political procedures. In that sense it ca be argued, as many
authors deed, that in an era of globalisation democracy needs to be
reinvented. The often neglected point here, however, is that missing themark of global democratisation implies a substantial measure of devaluating13

A sustainable world of democracy, peace, security, and social justice – PES policy reportnation state and even regional state democracy was well, because in thatcase they will loose invariably their power of political jurisdiction.
The recently issued Global Policy Report of the SEP( Rasmussen Report)
describes the political challenges posed by the present state of negative
globalisation in terms of 5 major divides that need to be bridged. It also
describes the role the European Union has to play in this process.
The 5 divides that need to be bridged through global political actorship are:
* A security divide has emerged since the end of the Cold War. The worldis fragmented, with severpolitical tensions, military conflict and terrorism on the rise.
* A sustainability divide puts our very future at risk. Economic growth tomeet the needs of the present generation is at the expense of natural
resources and the capacity of future generations to meet their own needs ina preserved environment.
* A North-South divide continues to separate rich and poor, keeping morethan half the world's population in poverty and exclusion.
* A labour, social and human rights divide splits the population into those
who have such rights, mainly in rich countries, and those who are deprivedof them in the poorer parts of the world.
* A governance divide prevents existing global political action andinstitutions from bridging these global divides in a proportionate and effectiveway.
At the core of social democratic strategies to bridge these divides
by way of building global governance and a policy of reembedding global markets are six strategic pillars, their internal
democratisation and their function-based interaction:
1.
The concept of a rights and duty based cosmopolitan
citizenship that entitles the individual citizen everywhere in theworld to appropriate political action at the relevant political level –
local, national, regional or global- and participation in therespective processes of deliberation and decision making.
2.
The democratisation, complementation, enhancement andincreased effectiveness ofexisting trans-national andsupranational political institutions and organizations, especially the
UN and its sub-organizations. Particularly the establishment of a
People’s Chamber and an Economic World Security Council with14

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powers of surveillance, framework setting and intervention arenecessary.
The Social Democratic European Party has fleshed out these objectives
in its Rasmussen Report in August 2003 as follows:
Regenerating development policy
All rich countries must see development policy as a key policy instrument in the years ahead. We
must ensure that it achieves its potential by designing it effectively and funding it adequately. We
must learn from the many errors of the past. The UN Millennium Goals must guide international efforts.
These goals must not be missed but the challenge is immense. We recommend a better balanced,
innovative development policy, with closer coordination between donors, coherence at EU level, moredebt relief and debt cancellation, a focus on human rights and democracy, new policies to use theknowledge factor in development strategies and – last but not least – more development aid. To
achieve the latter, we must rapidly obtain more reliable estimates of actual needs to achieve theMillennium Goals, for they will be a key argument in raising funds. We must also move towards
innovative sources of finance, including a global tax.
Achieving fair trade
The coming months will be crucial in meeting hopes raised by the 'Doha Development Agenda'. A fairtrade agreement could help enormously to bridge the divide between rich and poor. But this will
require far-sighted and generous trade concessions by developed countries. This is most needed on
the biggest issue of all – agriculture. Radical reform of the EU's common agricultural policy should
accompany fairer rules on trade in farm produce. Similar demands must be made on the US. The
WTO must be made an open and democratically accountable organisation and process. It must be
prevented from ruling on non-trade issues. We need to lay down conditions for turning the Doha
Round into an Anti-Poverty Round – and we must put sustainability at the heart of the WTO
agreements.
Promoting sustainable development
A global strategy for sustainable development must gradually be built into the policies of bothdeveloped and poorer countries. Development and economic growth should be less and less at theexpense of natural resources and the environment. Poverty and environmental degradation are twosides of the same coin in developing countries. The Johannesburg summit made significant progressin defining a new sustainability agenda. But consensus has not been possible on all fronts. Due to
weakness of global governance and lack of political will, implementation may be disappointing.
Developed countries must help the developing world to meet the sustainability challenge byincorporating this dimension into adequately funded development strategies. They must also stimulate
eco-friendly technology transfers. Having said that, we stress that developed countries must meet thehighest demands of sustainability.
Building a global legal orderGlobalisation must gradually be built into a world legal order, founded on a Global Charter ofFundamental Rights. In the long run, a notion of global citizenship must emerge, based on rights
shared by all human beings. These rights exist on paper – the UN Declaration of Human Rights andthe civil-political and economic-social pacts. In the end, these rights should be drawn together andbecome reality for all.
The world needs regulation in many areas as a result of globalisation. They include: human rights;
social and labour rights; taxation; finance; migration; environment; crime; trade; investment; intellectual
property; competition; bio-technologies; and e-commerce. Progress is greater in some areas than inothers and should be speeded up.
Reforming the international financial system
Despite a promising start after the Asian financial crisis, the reform process has been relegated to a
few official circles. Ambitious reform proposals have been brushed aside. Far-reaching reform
remains as crucial as ever.
Our reform proposals seek to:15

A sustainable world of democracy, peace, security, and social justice – PES policy report
•
•
•
•
•
•
•
•

address IMF mission-creep;
strengthen surveillance and international standards;
rebalance and improve IMF governance;
open the way for regional arrangements and a variety of sources of advice;
allow temporary restrictions on capital liberalisation in some circumstances;
separate IMF tasks from those of the World Bank;
ensure proper private sector involvement; andimprove the role of the Financial Stability Forum.

In the long run, we support the case for a World Financial Authority.

3. The extension, intensification and internal democratisation ofRegional systems of political co-operation such as the EU, ASEAN,
SAARC, Mercosur, Nafta and the like and their networking as
crucial building blocs (Willy Brandt) of world democracy.
4. Stressing sector-wise functional global governance in relevant
sub-systems such as Trade, Labour, Ecology, Health, Security etc.
through building tans-national regimes of sector-wise politicalregulation such as the Kyoto-Protocol, the World Labour
Organization or the World Trade Organization and making themmuch more accountable, inclusive and democratic.
5. Giving the trans-national civil society support and additional politic
weight with its more than 25 000 initiatives of today that cover all
relevant policy fields from human rights and labour condition
monitoring through environmental protection to gender equality etc.
6. Building a global public sphere both to foster the emergence ofand give expression to cosmopolitan citizenship as the original
source of global democracy: its legitimacy and its forms andfunctions.
5.New Coalitions for a New Multi-lateralism
The prospects for global democratisation thus depend upon theperformance of the European Union and other relevant political actors in
the global arena including new trans- national political movements andtheir impacts on the US publics. From a realistic point of view there is alimited range of actors in the global political arena of today andtomorrow who can form a political coalition to promote the project of
global democracy with sufficient measures of political support and power
mobilization. Basically there are five candidates for such an alliance whohave demonstrated in recent years that the they will an can act - basedon different but well-understood interests-to varying degrees in that
direction:
1.
Large parts of the international civil society including the
responsible currents in the so called “anti-globalisation”- movement.
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A sustainable world of democracy, peace, security, and social justice – PES policy report

2.
The globalist majority among the world wide social democratic
movement and the related family of political parties (as organized in theSocialist International) including relevant currents among the US
democrats.
3.
The emerging players in the systems of regional political cooperation.
4.
Some of the Third World countries and emerging new democracies.
5.
The political mainstream and the large majority of national
governments in the European Union.
It must be added, however, that the parties of international Social
Democracy have not yet reached at a consensus on their response to
the new challenge of US-unilateralism and neo-liberal globalisation.
There is some probability that they never will in the foreseeable future.
The large majority of the related parties, however, are – at least at thelevel of their programmatic liabilities- strongly in favour of global
democratisation, global economic regulation,
containing USunilateralism and enhancing regional political co-operation. Yet, theparties of Social Democracy in Europe are at present time to a certain
degree trapped in a strategic dilemma. Whereas In their programmatic
discussions and commitments most of them endorse the idea that theextension, intensification and democratisation of democratic global
governance is necessary in order to re-embedded global markets undersocial and ecological standards they are much more hesitant when iscomes to drawing practical consequences. At the level of action theyusually meet with two major road blocs on their way. The first is theelectoral situation that pushes social democratic parties to pursue themostimmediate social and economic interests of their national
electorate in the first instance. The other, once they are in office, consist
in the necessity to come the workable arrangements with the dominanceof the US- administration. From within their party organizations there is,nonetheless, constant pressure toward a in favour of global democracy
and a fairer world order.
7. The Role of Europe
Historically a result of the creation of a European internal market,
industrial restructuring, notably through mergers and acquisitions,increasingly becomes the result of changing business strategies to
respond to the corporate challenges generated by expanding economic
globalisation. In Europe, such industrial change often results in large
redundancies, thus adding to a generalising feeling of economic andsocial insecurity and instability among the working class. Thus,
restructuring has become a prominent feature of today's tougher form ofglobalised capitalism discussed in Part I of the report.
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A sustainable world of democracy, peace, security, and social justice – PES policy report

Until now it has been that the traditional paradigm of social policy sought
to repair the damage created by restructuring. However, the challenge
for a new paradigm must be to manage restructuring and change so as
to anticipate developments and avoid deterioration. It would also seemthat after years of experience there is a need for more binding quality of
information, consultation and negotiation. This needs to beaccompanying with an improvement of the European competition law
and workers’ involvement in competition procedures.
The European Union is the most promising actor capableofcounterbalancing US-unilateralism effectively. Most of the member
states are ready to move the Union’s foreign policy in that direction.
Contrary to a widespread opinion the underdeveloped military strengthof the Union is no serious obstacle of such a strategy because underconsideration is not transatlantic confrontation but a more balanced
transatlantic partnership in leadership that could lead to a moreparticipative world order (Czempiel 2002). The US-administration would
hardly dare major military intervention anywhere on the globe if the EU
does not comply in practical terms by sharing the financial burden,
making its infrastructure available for the US forces and providing aminimum of legitimacy to it. This appears to be an experience, that has
been renewed in the course of the Iraq war.
It is in the vested economic, cultural and political interest of the EU tocounterbalance US-unilateralism and work for the democratisation of the
global order. The political model of the EU’ s own way from the erstwhile
politics of confrontation of its member states toward an ever denser
cooperation between them may as such serve as a paradigm ofsuccessful trans-national governance – a model in which sovereign
nation states retain their sovereignty and cooperate inter-governmentallywhere it makes sense but pool it and act supra-nationally where it
proves necessary. The only condition that needs to be met is moreunanimity in the EU’ s foreign policy combined with an organizational
reform that makes it easier for the EU to speak with one voice when it
comes to its relations with the US. This is no unrealistic hope.
Any answer to this question needs to start with the frank statement that
the EU itself is still lacking the capacity of political actorship due to thefact that in itself it suffers from a unbalance between negative an
positive integration.
The new security challenges need to be answered in a combined way,at national, European and at global levels. Social democracy should
prove to be the political movement which best links domestic democratic
policy and international politics, particularly thanks to common action
and policies at EU level.

18

A sustainable world of democracy, peace, security, and social justice – PES policy report

On the one hand, it would be wrong to overestimate the changing US
global role: European countries, Japan, Canada, Brazil or China areshowing that both at global (UN Security Council, Johannesburg
conference) and regional level (Korean crisis), a room for manoeuvre
exists for peace and co-operation policies, and that it is possible tobalanceuni-lateralism
throughmultilateralapproaches
andorganizations.
The EU needs a coherent foreign and security policy to give expression
to its increasing economic and political weight, to strengthen its capacity
for autonomous decision- making and action and, above all, to improveits contribution to peace and security at all levels. The development of
the CFSP should be considered in the context of the wider security
concept developed below. The EU needs to be able to act when militarycrisis management or humanitarian intervention is called for, including
autonomous actions by the EU to enhance collective security in Europe
as NATO involvement is not always necessary. But we should be careful
to develop accountable and transparent procedures for co-operation.
The EU needs a global strategic concept, making the link between amore democratic and effective global governance architecture and apeaceful world order and connecting the crisis policies (for example withregard to the Middle East, North Korea, terrorism, or the new security
agenda) to a long term vision of the necessary reforms to the global
institutional polity, including medium term structural reforms of global
governance. The EU must re-think its capacity to act strategically in geopolitical terms.
For such a strategic concept and capacity to be meaningful in terms ofpolitical action, the EU first needs to strengthen its institutional
capacities as an international political actor.
8. Coping with the strategic dilemma
Though the objectives of progressive globalisation are arguably all wellfounded and in principal also feasible there is no guarantee to what
degree in what space of time how many of then will be implemented.
Given the US administrations resolved uni-lateralism it might well happen
that notwithstanding strong efforts of the EU and its allies some of thesegoals may turn out to be very long term.
Hence, the strategies of national adaptation and regional political cooperation will have to play a crucial role in the foreseeable future. They
necessitate a variety of measures in economic and welfare policies thatwould not be preferable from a social democratic point of few if fasterprogressive globalisation was feasible. This hold in particular true withrespect to tax policies one of the primary pillars of the welfare state, butalso for many other policies favored by the social democratic approach.
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A sustainable world of democracy, peace, security, and social justice – PES policy report

What is left, though, for social democracy in the beginning of the 21st
century is a three- pronged strategy: first, coping with globalisation in the
short run; second, applying a combines strategy of coping and shaping
globalisation through a politics of regional co-operation in the short andmedium term run; and, third, invest all efforts to shape globalisation in
the short, medium term and long run. This is and remains, inevitably, an
open process with outcomes in every stage that are, seen from today,
contingent. To the degree the strategy of global re-embedding is
successful it might well be that regional and national strategies of welfare
state reform and moreover social democracy in general have to be redesigned.
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