England, Labor Zionism and the Future of Social Democracy

For anyone interested in issues of social and economic justice in the current economy: There’s a brilliant, must-read essay in the current issue of the New York Review of Books on the past and future of social democracy. It’s written by a former general secretary of British Dror Labor Zionist youth whom you might have heard of, by the name of Tony Judt.

His essay is worth reading in full, but in brief he talks about how the social democracy (or its American cognate, the New Deal) gave way in the mid-1970s to the laissez-faire economics of Milton Friedman and the Chicago School. He walks through the corrosive social impact of privatization and grudging, restrictive welfare and unemployment policies.

The lessons he draws are a bit contradictory, and I wish he had reconciled his two conflicting arguments: On one hand, we need to recapture the moral arguments of right and wrong in political discourse and get away from the relentless cost-benefit analyzing that governs so much of current policy-making:

On the other hand, he says it was the insecurity and fear bred by the Depression and the rise of fascism — in essence, the collapse of liberal society — that led Britain and America to adopt Keynes’s “social-security state.” We are now facing a collapse of comparable magnitude, and it’s time to muster the urgency of the 1930s. Therefore, “If social democracy has a future, it will be as a social democracy of fear.”

Which does he recommend — the social democracy of fear or the language of morality in social arrangements? They both seem right, but they also seem to cancel each other out, and Judt doesn’t resolve the contradiction.

One of his most fascinating observations concerns the historical roots of our pre-1975 New Deal state and our post-1980 laissez-faire state. From the mid-1930s to about 1980 the economies of the English-speaking world were guided by the thinking of the British economist John Maynard Keynes. Since 1980 or so the reigning economic philosophy is drawn from the thinking of a group of Austrian-born contemporaries of Keynes—he names Ludwig von Mises, Friedrich Hayek, Joseph Schumpeter, Karl Popper and Peter Drucker (and he explains why he picked those five).

It was the different experiences of living through the nightmare 1930s in England or Austria that gave rise to the two competing philosophies dividing America today. The five Austrians

The consuming question underlying their various works, Judt writes, was:

Keynes, by contrast, “grew up in a stable, confident, prosperous, and powerful Britain.” He too “watched his world collapse, taking with it all the reassuring certainties of his culture and class.” But unlike the Austrians, with their certain predictions of how one event leads to another,

Keynes’s solution was for the government to step in and guarantee individuals a modicum of security — social security — against the frightening whims of history.

Written by

J.J. Goldberg

J.J. Goldberg

Jonathan Jeremy “J.J.” Goldberg is editor-at-large of the Forward, where he served as editor in chief for seven years (2000-2007).

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