Capitalism didn’t Win the Cold War: Narrative, Social Progress & the Return of a Multipolar World
By: Ian Maclay
Tags: International Relations, Socialism, Progress, Narrative, Democracy

Mikhail Gorbachev receiving Willy Brandt, 1989

With the global rise of right wing populists, the intensifying climate crisis, calls for racial justice & equity, two new authoritarian super powers and a world order-shattering pandemic, it’s important to revisit the lessons democratic countries learned when establishing the post-war world order.

It’s common among the American left to occasionally use pre-Reagan era economic policy, taxes and public investment to rightfully shed light on how mild & reasonable current progressive demands are. Of all the proofs for our arguments, the historical argument is sadly more often an after thought kickstand than a central point when we try to communicate how abnormal the last 40 years have been. Calling back to the golden era of American economics absolutely needs to happen more, but needs to go much further if it hopes to reshape public dialogue.

The root of our problem is in the narrative that much of our political dialogue hinges on. The general narrative since 1991 is that capitalism and communism fought and capitalism won. It’s an assumed point that every conservative and just about every liberal has bought. This is not entirely honest.

What needs to be more widely understood is: we are not entirely capitalist but a mixed economy. While the US and most of its allies have never been social democracies the more honest picture of the battle going on was between democracy & authoritarian communism — something social democracy played a central role in.

“…with the institutionalization of Keynesianism, government now excercised broad indirect control of a mixed economy. Economic power had passed in some measure, from private to social control…” — Social Democracy in Post-War Europe, p. 22

Communism’s ideological claim that it brings about the greatest amount of shared prosperity meant that capitalist democracies had to prove that their system could do it better.

After two world wars, and attempting to fuse the capitalist market with democratic polity, it was readily apparent that a system which is bent towards a concentration of wealth & power in the hands of a few resulted in being governed by the wealthy few. This obviously anti-democratic setup puts countries at risk of war, polarization, insurrection and halts, distracts or suffocates the economic security needed to sustain democracy. With many across the political spectrum identifying the hostilities between capitalism and democracy as irreconcilable competing powers, the need for a democratic state to regulate the economy to ensure that private interest(s) never overcame the public good became fundamentally necessary to the survival & strength of democracy itself.

“Social democracy in the immediate postwar years had been a hybrid political philosophy embracing both socialism and liberalism…revisionist social democracy had come to terms with reformed liberal capitalism. A compromise was now reached in which market economy was made responsive to certain social ends… the traditional goals of social democracy had, in large part, been met and its ideology was progressively assimilated into the politics of consensus. Old political battlefields were deserted as conservative and Christian democratic parties came to accept the terms of the compromise.” — Social Democracy in Post War Europe p.35

Capitalist democracies had to prove that they could provide greater prosperity & quality of life than their communist counterparts. In order to do so, we had to adopt socialistic reforms: high levels of unionization, highly regulated economies, high corporate tax rates, nationalizing specific industries & public goods, massive public investments ultimately aimed at directing economic life toward the public good. These reforms both preserved democracy and won points in the Cold War for the great amount of shared prosperity social-democratic reforms were yielding. The pressure to maintain a united front in the face of authoritarianism meant that the economic warfare of powerful private interests needed to be brought under control to serve the public good. Social democracy won the Cold War because these solidaristic reforms are necessary preconditions for the resiliency & success of democracy.

While the source of the success was the pursuit and practice of economic & social democracy (and all the pressure from strong trade unions and socialist parties), capitalists eventually went on to take credit for it in their ideological battle, steadily shifting the narrative by dubbing capitalism the winner instead of democracy.

With the fall of the Soviet Union, the rise of a unipolar world occurred where democracies had no outside pressure to maintain the post-war reforms that won them the Cold War. Globally, the wealthiest responded by rapidly disassembled the social democratic reforms that made so many democracies successful. Years of privatization, deregulation and austerity, egged on by a rising ethos of egotistical individualism, left most democracies with an increasingly frail welfare state and rising oligarchy that we are still struggling with today.

Some of the limitations of strategically looking back without challenging the overarching narrative are found in the footwork needed to acknowledge the obvious racism, sexism and other undesirable elements of that time. The way this can come off as timid or as less legitimate due to all the contextual nuance it rightly has to get wrapped in, speaks to the fact that: as long as the “capitalism beat communism” narrative survives, debate in democratic countries will always favor whoever is most rigorously advocating for “more capitalism”.

It’s within the nature of narratives this large to tilt the public in a specific direction.

It’s also within their nature to be actively cultivated & built upon and-or passively reinforced.

Conservatives are deeply aware of how narratives are actively cultivated. Since they own the foundational one, nothing has stood in their way as they’ve pulled the entire political spectrum wildly to the right.

The democratic-left in America has yet to fully grapple with this. Figures in the progressive bloc have begun to get to the root of the problem and changed some of the conversation (which is no small feat) but have yet to actively reframe the whole narrative the way a movement like the Tea Party has. The way the GOP has the Democratic Party constantly on it’s heels in a reactionary position, yields a response that is prone to accepting underlying assumptions conservatives hinge their arguments on. This political culture and moderate leadership that has let conservatives run away with the narrative, sets up progressives within the party to have to swim upstream anytime underlying assumptions need to be challenged.

For the left, these developments have, on top of other anti-democratic aspects of the American government, resulted in an understandably morale defeating uphill battle that we wouldn’t have to face if we shifted more of our focus to changing the foundational narrative altogether.

…as long as the ‘capitalism beat communism’ narrative survives, debate in democratic countries will always favor whoever is most rigorously advocating for ‘more capitalism’.

In America today the language of the democratic-left has come to be known either as “progressivism” or “democratic socialism”. Both usable, fair, descriptive terms that struggle to find footing in this overarching narrative that keeps playing us.

Progressivism has a great amount of overlap with modern social democracy (potentially because it shared a cradle with German-American socialists in Wisconsin). The only notable difference being that progressives have rarely advocated for nationalizing major industries or for economic democracy the way others on the left nationally & internationally have. It’s moderate ties to the working class early on left it open to being taken over by more business friendly liberals, a trend that many social democratic parties briefly followed during the ‘third way’ period in the ‘80’s & ‘90’s. Unclearly defined & loosely organized, progressives offer necessary adjustments, specific policy measures that regularly cut to the heart of the problems we face, but have yet to make the best use of history or propose a clear vision of where we aim to be in a crisis ridden, multi-polar world.

Democratic socialism shoots higher. The aim towards a fully participatory & economic democracy are clear among the politically literate, but have yet to be entirely realized in any one country making much of the public skeptical of what comes across as something that is semi-utopian. While the defined vision is there, it lacks a clear reference point without either admitting preference for the social-democratic ‘Nordic Model’ or getting backed into a corner where we have to answer for every single real or perceived failure of socialist countries that are often post-colonial & riddled with sanctions from NATO member states.

Those who use either of these terms are, in the long run, bound to be at a disadvantage due to the overarching narrative that has come to be so deeply embedded into the assumptions framing public dialogue. All of this is why, as we are re-entering a multipolar world and are on the cusp of having to negotiate a new world order, I’m proposing we reframe the entire debate with the more accurate narrative that social democracy won and it can win again.

Working people everywhere are desperate, tired of “business as usual” & need real change. This calls for a left-wing democratic populism.

At the same time Americans are jaded and skeptical of any silver bullet systems that are far off from being realized. This calls for pragmatism and internationalism.

Additionally, moderates are succeeding with Clintonite “back to normal” messaging that speaks to the comfort people are seeking, but unsurprisingly fails to go far enough. This calls for looking back further so that we can confidently fly past the neoliberal normal that exacerbated the crises we face today.

While the difference in terminology and use of the past I’m proposing is largely a given among much of the democratic-left internationally, some of the dialogue I’ve had with Americans has resulted in attempts to brush this off as just semantics. But it doesn’t change the fact that this narrative as a major defining force in US political consciousness presents both a massive obstacle & opportunity the American left has yet to harness.

Because narrative speaks to identity and identity speaks to what is possible, leaving the narrative as it is isn’t optional. Yes, the US has several fundamental flaws, I’m not suggesting we look past any of that, but recovering who we are at our best as a democracy offers an identity we can stand on compared to the passive ingestion of the fact that we’re much more often a capitalist monster producing the inevitable cultural nihilism that follows.

With a renewed narrative, the democratic-left can confidently & multilaterally act owning the fact that: democracy has beaten fascist & authoritarian communist regimes. If we can own that narrative, every other ambition we have to empower & guarantee justice for working people is *well* within reach.

All of this might seem trite. Organizing for a better future will always be hard work, no matter the context. But the context we do that work in will determine whether this battle is uphill, downhill or an even surface for us to be pushing our agenda forward on. The stories we tell ourselves that define who we are and tell us what is good, true and right on an instinctual level is no small part of that.

The necessity of a reclaimed narrative isn’t just an ideal of what we can accomplish in the future, it’s not just a nostalgic picture of who we’ve been at our high points in the past, it’s what is required today that will characterize the next few steps.

Today the three global super powers are not democratic or are quickly eroding democracies. All three have predominantly capitalist markets with varying characteristics. Additionally, since the emergence of global capitalism, three identifiably varying responses have come to dominate the political landscape internationally: 1) authoritarianism, 2) neoliberalism and 3) progressivism. With the election of Biden & Harris, the United States has a potential shot at recovering as a democracy, but how and if the United States will recover will be shaped by how we understand the past (something Biden and other moderate democrats have a pretty firm grip on and are using at the expense of the American multi-racial working class, the planet & people in other countries).

Russia in it’s gangster capitalism & right-wing populism and China with it’s state capitalism have cornered the authoritarian-capitalist market. The false narrative that has negatively conditioned our potential for social progress also fails to provide the ethical, political & economic differentiation we’ll need to compete with this concerning rise in authoritarian powers.

If we don’t come to grips with how the movement towards social democracy made the world unipolar, that made democracy the goal of so many nations, that makes free & fair democracy possible, US rhetoric will have nothing to fall back on but ethically hollow nationalistic arguments that will reify Trumpian attitudes both now and in the future.

The pressure to differentiate between the three super powers is here, it’s up to us to define it or have it defined for us. It could push forward or stifle the next fifty years of progress.

Social democracy has, was and is being accomplished in various places and times. It has proven itself to be the practical system that working people need now. It was strong enough to bolster democracy, to rise above capitalism and communism. It’s both consoling a traumatized public and flexible enough to go beyond the mere “back to before Trump” status quo. As we become an increasingly multi-polar world, it will offer the baseline we need to defeat the neoliberalism and authoritarianism we face today… if we can reclaim the narrative.