Defining Labour: socialist or social democratic?

A version of this article is also available on Sceptical Scot and Labour Hame.

Abstract arguments about political philosophy don’t usually have much bearing on the pragmatic day-to-day business of British politics.

Britain’s reputation for political stability, current difficulties notwithstanding, is often attributed to the suspicion with which its decision-makers, commentariat and electorate habitually regard dangerous things like ideas.

But sometimes, as with the Labour Party’s present agonies, repressed differences over fundamental matters of political ideology surge to the surface. For all the personal venom that has attended it this is one of those rare British political crises that, in the end, is about ideology. What does Labour want to do and why? What is Labour actually for?

Among the many words the party’s warring factions use to describe each other – some of them printable – the most interesting are ‘socialist’ and ‘social democrat’. Though often used without much precision, and sometimes interchangeably, these terms refer to distinct political traditions with different visions of the good society. Understanding how they have usually been defined by historians and philosophers since they first entered the political lexicon helps illuminate the deep-seated political differences that make Labour’s ongoing crisis so peculiarly bitter.

Socialism ≠ Social democracy

The terms ‘social democracy’ and ‘socialism’ are often used to mark out two points on a political continuum, different staging posts along the same road to some nebulous progressive future characterised by open-ended concepts such as ‘equality’, ‘fairness’ and ‘social justice’.

The assumption here is that social democrats and socialists are both working towards essentially the same outcome, pictured as some kind of mixed economy with a strong public sector, progressive rates of taxation and regulations exercising some restraint on the power of capital. The difference between socialists and social democrats is the intensity with which this shared ideal is pursued, the former ready to tax, spend and regulate a bit more than the latter. Socialism is a kind of turbo-charged version of social democracy, the two outlooks differing in degree rather than kind.

But though there are certainly important respects in which the principles and concrete policies advocated by socialists and social democrats overlap, these terms evolved in the early 20th century to describe two political philosophies with quite different ends.

Social democracy

‘Social democracy’ was arguably the most successful progressive political philosophy of the last century, helping secure stability and prosperity in a Europe torn apart by two world wars. In recent decades the post-war social democratic settlement has been broken open by the pressures of globalisation and a resurgent market fundamentalism, but many of the world’s most prosperous and stable nations retain a social democratic character.

And yet social democracy continues to elude precise definition. It is often understood negatively, as a pragmatic reaction to other, purer, more assertive ideologies, a kind of genteel Marxism, or capitalism with a human face. Certainly, social democracy is something of a hybrid philosophy, emerging around the turn of the 20th century as one of several competing political responses to the social dislocation caused by the first and second industrial revolutions.

One such response, liberalism, viewed 19th century laissez-faire in relatively uncritical terms: the ‘creative destruction’ of the free market and its attendant inequalities were necessary conditions for rising aggregate prosperity. For liberals the state’s role should be confined to maintaining a political and economic framework in which the market can flourish. In stark contrast a second response, Marxism, wanted to move beyond capitalism altogether to some form of political economy based on workers control, in which capitalist competition is replaced by a network of co-operatives. A third response, fascism, shared the revolutionary left’s distaste for the social disharmony wrought by unfettered capitalism, but wanted to control rather than abolish the market, championing the capacity of an autocratic state to marshall economic forces to serve the common interest of a national community bound by ethnic loyalties.

Social democracy evolved in dialogue with all of these traditions. The first social democrats recognised the market’s capacity for both creation and destruction, and, like the national socialists, adopted the concept of a strong state as a necessary agent for constraining capitalism; in this sense fascism might be thought of as social democracy’s dark twin. But – crucially – they were clear that the state should be democratically accountable. A belief in the primacy of the life of the community over the demands of capital, and in the power of a democratic state to make the market work for the common good, might be regarded as the defining characteristics of social democracy.

Social democracy went on to dominate post-war European politics, evolving a sophisticated set of tools for negotiating a stable settlement between what had previously seemed incompatible forces: the state, the market and society. Keynesian economics was one such tool: by providing fiscal and monetary levers for the stabilisation of economic cycles it allowed the state to reconcile private ownership of the means of production with some degree of democratic management of the economy. Comprehensive welfare provision was another: the universal provision of education, health and social security offered citizens some shelter from market downtuns, allowing communities to retain a sense of themselves in the midst of potentially destabilising economic conditions.

It is unclear whether this ‘classic’ form of social democracy is viable in today’s very different world. Globalisation is making it ever harder to achieve ‘social democracy in one country’, let alone ‘socialism’: highly mobile multinational capital can more easily evade regulation and taxation, and open labour markets are undermining the sense of common identity necessary to sustain faith in universal welfare provision. Contemporary social democrats face the challenge of applying the principle of democratic economic management at a global rather than national level, through democratisation of institutions such as the EU, the IMF, and the World Bank. And the sense of common purpose necessary for strong welfare systems can no longer be sustained through straightforward appeals to relatively homogenous national identities: today’s multicultural societies will only be prepared to make the mutual financial sacrifice required to fund public services if social democrats can appeal to common values rather than ethnic ties.

But the populist left-wing movements that have emerged in recent years – including Jeremy Corbyn’s Labour, Bernie Sanders Presidential challenge, Greece’s Syriza, Spain’s Podemos, and Scotland’s Radical Independence Campaign – indicate that the fundamental social democratic principle of using the state to make capitalism work for the common good retains appeal.


If all of that sounds somewhat like ‘socialism’, it’s because the use of the word has changed to signify something other what it originally meant. Socialism, at least according to its classic 19th century definition, isn’t simply a revved-up social democracy involving a larger welfare state or somewhat tighter restriction of the market, but a quite different understanding of how economic, political and social life should be ordered.

In brief, socialists believe there can be no accommodation with capitalism as accepted by social democrats. Socialists do agree with social democrats as regards capitalism’s inherent dynamism: The Communist Manifesto, for example, is fulsome in its praise of capitalism’s capacity to generate economic growth. For Marx and Engels the rapid development of a technologically sophisticated economy made possible by capitalism was the necessary material foundation for the prosperous socialist society that would succeed it. But here capitalism’s value is purely instrumental: the good society cannot be built on market relations that prioritise commercial over human values. By organising people into two classes – those who own capital and those who must sell their labour to survive – the capitalist system necessarily fosters inequality and alienation: the economic lives of the majority are directed by a minority who benefit disproportionately from what is produced. Disenchanted workers seek consolation through consumerism, leaving them, in Marx’s assessment, as ‘apathetic, thoughtless, more or less well-fed instruments of production.’

Socialism’s ultimate objective is capitalism’s gradual destabilisation and transformation into a co-operative economy that operates according to a different logic, placing human need over profit. This post-capitalist system would have three mutually reinforcing characteristics:

First, the means of production would be socially rather than privately owned, a pre-condition for any reorientation of the economy towards communal rather than commercial ends. Second, each enterprise within the new economy would be reconceived as a co-operative rather than commercial venture, managed by its workforce through participative, democratic decision-making processes. Removal of the ‘trained caste’ of managers would allow workers to direct their own labour, and resolve the separation of head and hand characteristic of work in the capitalist firm. Third, this network of self-governing but interdependent co-operatives would be tightly woven to ensure its collective production is directed towards the common good rather than the private interests of particular economic actors.

That all sounds rather utopian. But for socialists an incremental transition from the market towards a co-operative economy is no more than the logical extension of the democratic principle from the realm of politics to that of economics, the simple enfranchisement of those forced to sell their labour for survival who previously had no say in the organisation of the community’s economic life.

Socialism, then, aspires towards a society quite different from that of any social democracy, and, it should be noted, those of the monolithic communist states of the 20th century. The ideal is a participative democracy encompassing the economic and political realms, with power flowing upwards rather than downwards. Socialists reject both the Soviet-style command model and social democracy’s pragmatic acceptance of the marketplace. For socialists both systems deny the great majority of people democratic control over the economic forces that would otherwise dictate their lives.

Two horizons

So, two philosophies, with different ideals of how political and economic life might be ordered. According to these definitions, social democrats want to use the power of the state to channel the dynamism of the capitalist market for the common good, but socialists want to go much further, to move beyond capitalism to a system in which economic power is held by worker-citizens. It might be said that for social democrats the ultimate objective is to redistribute the proceeds of economic power, for socialists to reconstitute economic power itself.

Most of the time these abstract differences about the nature of the ideal society don’t have much bearing on day-to-day Labour politics. To paraphrase Herbert Morrison, for the purposes of the daily grind of government or opposition socialism is whatever Labour happens to be doing at the time. Whatever their theological differences, the socialist and social democratic factions that constitute the Labour movement have usually been prepared to work together to draw up whatever progressive programme has the best chance of securing electoral support, and if that formidable hurdle is surmounted, of meeting the further challenge of actually getting through Parliament.

But there are times of crisis when the ideological faultline becomes apparent. It was apparent in the 1950s when, under the influence of Tony Crosland’s The Future of Socialism, the party shifted from a socialist focus on extending economic planning and public ownership to a technocratic social democratic emphasis on redistributing the proceeds of growth. It was apparent in the 1970s and early 1980s when faith in extensive state intervention reasserted itself in the form of the Alternative Economic Strategy. It was apparent in the early 1990s when New Labour rewrote Clause IV, the quintessential blueprint for a socialist economy enshrined in the Party’s constitution, which had promised to ‘secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange’.

And it is most certainly apparent today, in this most ideologically charged of leadership contests. It should be said that it would be much too easy to pitch it as an uncomplicated battle between socialists and social democrats. There is little that is revolutionary about the programme that has been emerging under Jeremy Corbyn, which appears to aspire to no more (or less) than to return Labour to some form of ‘classic’ social democracy. Shadow Chancellor John McDonnell’s ‘New Economics‘, for example, the central element of the new leadership’s lauded anti-austerity agenda, thus far looks like a rather old economics, redolent of 1960s technocratic futurism: an attempt to rehabilitate the idea that the state is capable of intervening intelligently to seed and support new industries. Most of Corbyn’s radicalism has manifested itself in foreign rather than domestic affairs, as in his opposition to the renewal of Trident or to intervention in Syria. In fact there is very little in terms of concrete policy separating Corbyn from leadership challengers Owen Smith and Angela Eagle.

But there’s no doubt Corbyn’s unexpected rise has electrified those who believe Labour may yet be a suitable vehicle for pursuing a radical long-term programme for laying the foundations for a socialist economy.

Their relative caution since gaining the leadership notwithstanding, Corbyn and McDonnell’s attitude to the capitalist system, even when constrained within some social democratic framework, has always been ambivilant: both have campaigned throughout their careers for the ‘democratic socialism‘ championed by their mentor, the late Tony Benn, which sought the gradual extension of the principles of ‘workers control’ and ‘democratic planning’ across all sectors of the economy.

Corbyn’s Labour has won support from traditional socialist groups such as the Socialist Workers Party and militant trade unions. And it has energised radical commentators and think tanks hopeful that the party will entertain their speculative ideas for progress towards some kind of post-capitalism.

Corbyn’s opponents in the Parliamentary party are not merely concerned with his competence or otherwise, but with the real possibility that under his leadership, and that of an anointed successor, Labour may become a laboratory for the development of an avant-garde socialist programme that in their view – however intellectually exciting it might be – simply will not appeal to cautious middle-of-the-road voters hostile to any kind of political adventurism.

The perennial dispute between Labour’s dreaming socialists and its pragmatic social democrats, that usually simmers away out of view, has rarely been more public. This isn’t just an argument about personalities, but between followers of two political philosophies, whose eyes are set on different horizons.