Democratic socialism has emerged from its longtime obscurity and marginality in the United States, buoyed by a longtime oracle, Bernie Sanders, and a youthful rising star, Alexandria Ocasio-Cortez. Negatively, this development reflects a widespread recognition that global capitalism works only for a minority and is ecologically harmful. Positively, the revival of the name attests that there is no substitute for the historic goal of democratizing economic power, nor any common ground for progressive movements without it. But no movement for democratic socialism can afford to ignore the ambiguous history of the struggle for it. Social Democracy has created the world’s most humane and generous social systems, and it is battered and reeling almost everywhere that it exists, needing an infusion of fighting democratic spirit.
In Germany the Social Democratic Party (SPD) has capitulated to neo-liberal capitalism and is habituated to its junior-partner alliance with the Conservative Party, albeit with co-determined enterprises. In Sweden the Social Democratic Party has disavowed its historic attempt to democratize major enterprises, the Meidner Plan, which folded in 1992 after a ten-year run. In Britain the Labour Party has slightly revived by turning against its entire past generation of accommodation. Breaking the global economic oligarchy has never been more imperative, but Social Democratic and worker parties are consumed by the battle to save the welfare states they created, and no European socialist party has dismantled the culture of white supremacy in which it developed. The struggle for economic democracy has been left to stubborn types who learn from the history and failures of Social Democracy.
Every Social Democratic party is a reminder of the nineteenth century dream of democratic socialism—a fully democratized society in which the people control the economy and government, no group dominates any other, and every citizen is free, equal, and included. The founders of Continental Social Democracy believed that capitalism is antagonistic toward democracy and socialism is intrinsically democratic. Many contended that a proletarian victory would make democracy possible; others said that democracy is the road to socialism; some said the sequence depended on circumstances. Social Democrats puzzled that no socialist revolution occurred in an advanced capitalist society, but when they founded the Socialist International in 1889, they believed that socialist revolutions were inevitable. “Democratic socialism” and “Social Democracy” became different things because democratic socialists were wrong about socialist revolutions occurring in all advanced economies, or any.
Social Democracy became synonymous with its political record, something less daring and interesting than democratic socialism. Revisionism is always a response to this situation, revising the democratic socialist idea and its politics. “Democratic socialist” and “revisionist” have been linked ever since Eduard Bernstein powerfully criticized orthodox Marxism in 1898-‘99, but “revisionism” is not another name for democratic socialism. “Revisionism” names the periodic necessity of adjusting the socialist idea to real-world circumstances. In Germany the revisionist watersheds were 60 years apart--the Bernstein controversy and the Bad Godesberg Program of 1959. In Sweden a similar watershed occurred in 1928 under Per Albin Hansson, who built a Social Democratic powerhouse. In Britain the parallel benchmarks came in 1955 and 1994, when Hugh Gaitskell and Tony Blair respectively took over the Labour Party.
Each of these revisionist episodes was a creative response to a stagnant orthodoxy and a blow to the conviction that “socialism” names something definite and credible. Bernstein said the Marxist ideology of the SPD was less credible and democratic than the party’s everyday reformist politics. Hansson committed Swedish Social Democracy to the Bernstein approach. Gaitskell and theorist-politician C. A. R. Crosland sought to replace the Fabian Collectivism of the Labour Party with pluralistic economic democracy. The Godesberg Program belatedly endorsed Bernstein’s critique of Marxism and his emphasis on socialist ethical values. Blair replaced leftover Fabianism with neo-liberal opportunism, advertised as “New Labour.” Being open to revision is indispensable, but also perilous, for revisionism is linked historically to the loss of socialist conviction and fighting spirit.
Charles Fourier, in France, and Robert Owen, in England, propounded the original idea of socialism in the 1820s. It was to achieve the unrealized demands of the French Revolution, which never reached the working class. Instead of pitting workers against each other, a cooperative mode of production and exchange would allow workers to work for each other. Socialism was about reorganizing society as a cooperative community. Soon there were many kinds of socialism conceived by Pierre-Joseph Proudhon, Mikhail Bakunin, Karl Marx, Ferdinand Lassalle, Georgi Plekhanov, Karl Kautsky, Sidney Webb, Eduard Bernstein, Rosa Luxemburg, V. I. Lenin, and G. D. H. Cole. Most of them blamed capitalism for all of society’s ills, but religious socialists did not, so there were Christian and Jewish versions of every kind of socialism.
Every kind of socialism retains the original idea of organizing society as a cooperative community, yet there is no core that unites the many schools of socialism or democratic socialism, and democracy is as complex and variable as socialism. I believe that the best candidate for an essential “something” in democratic socialism is the ethical passion for social justice and radical democratic community. This ethical impulse retains the original socialist idea in multiple forms, playing out in struggles for freedom, equality, recognition, and democratic commonwealth, conceiving democracy in terms of the character of relationships in a society, not mere voting rights.
No definition of socialism as economic collectivism, or state control of the economy, or any particular ownership scheme is common to the many traditions of socialist thought. Historically, Marxism played the leading role in reducing, for many, the idea of socialism to collective ownership. Marx taught that the structure of economic ownership determines the character of an entire society, and socialism is the collective ownership of the means of production—a sufficient condition for fulfilling the essential aspirations of human beings. He developed the most powerful and illuminating critique of capitalism ever conceived, inspiring numerous traditions of Marxian criticism. His focus on the factors of production and the structural capitalist tendency to generate crises of overproduction and crash made permanent contributions to socialist thought. His achievement was so great that even non-Marxian traditions of socialism have to be understood in relationship to his thought. But Marx’s dogmatic determinism, catastrophe mentality, and doctrine of proletarian dictatorship wrecked immense harm. He developed his theory during an era in which democracy was merely a form of government, and thus of low importance to him. His denigration of moral-everything obscured his own ethical wellspring. And his fixation on collective ownership wrongly identified socialism with a totalizing goal.
Every Social Democratic and workers’ party has a history of contention over these issues. The name “democratic socialism” conveys this history self-consciously. Marxists contended that capitalism had to be abolished before real democracy would be possible. They denigrated democracy as bourgeois, hypocritical, and not the point, compelling democratic socialists to name themselves self-consciously. To democratic socialists, it was unacceptable to say that democracy and liberal rights were secondary values that would emerge from a socialist revolution. Socialists had to be democratic and liberal on their way to achieving socialism. “Dictatorship of the proletariat” was repugnant even as hyperbolic motivational rhetoric, for socialism had nothing to do with disallowing the bourgeoisie from voting. This was already the majority position among SPD members when Bernstein rocked the SPD in 1898-’99. He became the symbol of democratic socialism among Continental Social Democrats because he was a hero of the SPD and a guardian of its Marxist orthodoxy during the party’s glory years of persecution and ascension; then Bernstein espoused the democratic socialist alternative to orthodox Marxism with historic distinction.
England had no Bernstein figure until the 1950s because England had deep traditions of cooperative, Christian, and ethical socialism, it had no significant traditions of Marxism or anarchism, and it lacked even a workers’ party until 1893. Robert Owen founded cooperative communities that wiped out his manufacturing wealth, launched a national union movement that perished, and inspired a rich British tradition of cooperative organizing. Frederick Denison Maurice, an Anglican theologian and founder of Christian socialism, taught that cooperation is the moral law of the divine order and producer cooperatives are the economic basis of a good society. William Morris, an epic poet and romantic utopian novelist, wrote brilliant propaganda for the Socialist League until it turned anarchist in the 1890s and he resigned in disgust. All contended eloquently that socialism is an ethical vision of a cooperative society.
Christian socialism and secular ethical socialism ascended together in England in the 1880s. The supposed ever-upward climb of the world’s first industrial power had stopped. Prices began falling in England in the mid-1870s and kept falling into the early 1890s. Railway construction ran out of territory, and shipbuilding passed through an overproduction phase. Absolute output kept expanding in England, but growth decelerated just as the German and U.S. economies rapidly industrialized. Germany and the United States had newer equipment and technology and did better at developing human capital. Both nations raced past England in making steel, the key to the next great wave of industrialization. Economic historians subsequently debated whether England had a “Great Depression” in the 1880s or merely a bad recession. To the late Victorians who lived through it, the depression seemed fully great, and crushing. They had never experienced structural unemployment. Now “unemployment” became an everyday concept, something integral to the economic order. Liberal politicians had no answer for it and the unemployed protested in the streets, demanding the right to a job.
Christian socialism, in the 1860s, had retreated to worker education and support work for cooperatives; now it revived dramatically. It ministered to the urban poor, quoted Maurice, surged into Oxford, and created a dozen new organizations. It had a sprinkling of Congregational, Baptist, Quaker, and Unitarian leaders, but was overwhelmingly Anglo-Catholic, espousing a sacramental vision of cooperative commonwealth. Some Anglican socialists were stubbornly cooperative in the Owen and Maurice mode, some joined the Fabian movement after it arose in 1884, many joined the Social Union reformers who came out of Oxford, some gave higher priority to socializing land than socializing industry, many joined the Independent Labour Party (ILP) or one of its religious affiliates after the ILP was founded in 1893, and some became leaders of the guild socialist movement that took off in 1912. Long before the fledgling ILP morphed into the Labour Party in 1906, British clerics were accustomed to an active role in socialist politics, taking positions on state funding for cooperatives, the merits of Marxism and Fabianism, whether England needed a workers’ party, and how to oppose British imperialism. After the Labour Party was founded, they still did.
Meanwhile the Fabian Society became a powerhouse of middle-class state socialism. Fabian ringleaders Sidney Webb, Beatrice Webb, and George Bernard Shaw advocated evolutionary socialization based on cultural progress and the growing reach of government. Britain, they said, did not need Marx’s glorification of revolutionary violence or his exotic doctrines. All it needed was to proceed on its present course of gradual collectivism. This process was relentless, beneficial, and civilizing. It tamed the predatory impulses of capitalism by making society rational. Socialism was government collectivism directed by elite managers, that is, Fabians.
The Fabian Society fought internally over the importance and reach of socialist values. There were constant battles for the soul of Fabian socialism because the Webbs and Shaw did not let socialist morality intrude on their racism, colonial conceits, bureaucratic rationality, and political opportunism. Many ethical socialists resigned from the Fabian Society after it refused to condemn the Boer War. Others subsequently resigned when the Webbs campaigned for eugenics legislation. This long-running battle escalated in 1906 when dissident Fabians began to convert to guild socialism; meanwhile the Webbs joined the Labour Party in 1914, and in 1918 Sidney Webb crafted its constitution.
The Labour constitution had four planks—full employment and a living wage, common ownership of industry, progressive taxation, and surplus spending for the common good. Clause Four, demanding common ownership of the means of production, distribution, and exchange, defined the party for 42 years, and formally for 35 years after that. It did not say that socialization means nationalization. Clause Four was consistent with guild socialism, worker ownership, consumer cooperatives, municipal ownership, competitive public enterprises, and mixed forms of these models. But nationalization was popular in 1918, and demanded for the coalmines and railways. To some, nationalization was the preferred mode of socialization. To many, including Sidney Webb, it was the only one that mattered. In common usage, “socialism” came to mean nationalization, notwithstanding that state socialism was the historical latecomer aside from Germany. Fabian socialists sealed this outcome in Britain during the very period that an upsurge of guild socialists ardently fought the equation of socialism with nationalization. After the guild socialists lost, they had to settle for keeping the worst parts of Fabianism out of Labour politics.
Guild socialism was a blend of syndicalism, Fabian theory, Christian socialism, and medieval guild nostalgia, usually without citing Marx, although it had key affinities with Marxism. Syndicalism, the idea that unions should run the economy and whatever government might exist in a revolutionary society, had a rich history in French labor unions and significant movements in Italy, Spain, France, and the USA. But it had a marginal status in Scotland and England under syndical leaders James Connolly and Tom Mann, as British workers spurned the rhetoric of overthrow.
Guild socialism played out differently by playing down the syndical fantasy of One Big Strike. Former Fabians S. G. Hobson and Arthur Penty, dissident Fabians A. R. Orage, G. D. H. Cole, Holbrook Jackson, and William Mellor, and Anglican socialists Maurice B. Reckitt, Conrad Noel, P. E. T. Widdrington, and young R. H. Tawney said that socialism should be about worker self-determination, not building a collectivist government. The productive life of the nation should be organized and operated by self-governing democratic organizations embracing all workers in every industry and service. These National Guilds would emerge from the existing union movement. The guilds would organize industry, but not own it. They would be owned by the state, which provided the capital, while the guilds produced the goods.
Guild socialism attracted Christian socialists from the Maurice tradition, ethical socialists from the Morris tradition, followers of Roman Catholic author Hilaire Belloc, who wanted to recreate the medieval guild economy, and disciples of Anglo-Catholic political theorist J. N. Figgis, a guild pluralist. For a decade the guild socialist movement fired the radical wing of the Labour Party and made Britain seem less exceptional. It was variously for and against World War I, but agreed that the real war was against capitalism. The guild socialists wrote a profusion of books, campaigned in churches and trade unions, and founded a National Guilds League that was funded by the Labour Party, albeit while antagonizing Labour officials. Now even British socialists fought over worker self-government versus state socialism. Cole, Reckitt, and S. G. Hobson were the guild ringleaders, writing wonky policy books and spirited propaganda. Then the Bolshevik Revolution frightened the political class, the economy crashed in the early 1920s, the guild movement lost its financial basis in the party, and the season for exotic experiments ended. Cole and Reckitt were crestfallen, but adjusted to normal Labour politics. The Social Credit movement of C. H. Douglas morphed out of guild socialism, but was very tame by comparison. Tawney, meanwhile, became Britain’s leading socialist by espousing a Christian ethical version of Fabian ideology.
Tawney and his closest friend and ally, theologian William Temple, caught Christian socialism during its early twentieth century heyday at Oxford. Both were deeply involved in worker education during their early careers, Temple took a clerical track, and Tawney was a budding historical economist when World War I began. He doubted that England was worth defending, but joined the Army and was nearly killed in battle. Returning to England as a war hero, he argued that it needed to become a society worth defending. Tawney helped Webb write the Labour constitution, and had strong feelings about what it did not mean. It did not mean that all enterprises should be socialized or that nationalization was the preferred mode of socialization. Tawney had opposed nationalizing anything until 1918. Then he swung to the Fabian approach because nationalization was the only solution to the coal crisis, he already belonged to the Fabian Society, Sidney Webb was his friend, guild socialism faded, Tawney was pragmatic, the Labour Party was home to him, and he adored Beatrice Webb. He treasured the Webbs even after they became apologists for Stalinism. Tawney’s books had perfect pitch for his audience and time; three of them acquired scriptural status for British socialists.
The Acquisitive Society (1920) argued that capitalism turned decent people into shallow consumers and materialists. Religion and the Rise of Capitalism (1926) charged that capitalism trivialized Christian ethics and ruined the field of economics. Equality (1931) expounded Tawney’s basic principles: All human beings possess divinely imprinted equal worth and dignity. Socialism is moral and democratic. Freedom and equality go together. Inequality curtails liberty. Tawney said that inequality was practically a religion in England; to eradicate it, the nation had to abolish inherited wealth and transform the school system. He did not write about racism, which he considered a negligible issue in Britain, or feminism, as he had no feminist impulse, or imperialism, as he believed that British imperialism was inadvertent, misguided, merely commercial, and not so bad. A good Labour government would surely relieve England of its unfortunate empire. Tawney was an apostle of the claim that England needed to abolish its actual religion, class rule.
Class thwarts the flourishing of human fellowship. Tawney conceived democratic socialism as a cure for privilege and tyranny, the two essential features of capitalism. Privilege is a function of interrelated social and economic power, usually as a byproduct of wealth converting to social power, and tyranny is a function of the distribution of power. Equality is the antidote to privilege, and democratizing power is the antidote to tyranny. Democratic socialism makes it possible for human fellowship to flourish by democratizing economic and social power.
Tawney argued that a good society respects people for what they are, not for what they own. It provides for all children what parents want for their children. It respects all people and feels awe toward none. It abolishes the reverence for wealth by abolishing the existence of an upper class. It spurns all forms of authority that breed arrogance in a privileged class and subservience in a dominated class. Authority must rest on consent, and power is tolerable only to the extent it is accountable to the public.
This version of democratic socialist aspiration was carefully vague and mid-level, fusing Tawney’s Christian ethical principles to Fabian politics. Socialism was universal to Tawney. He believed that everyone should be a socialist and that his role was to enunciate unifying ethical principles and values. Tawney did not contribute to the Labour Party’s intense debates of the 1930s over Fabian versus Keynesian strategy. Labour leaders Clement Attlee, Herbert Morrison, and economist Hugh Dalton described socialism in technocratic terms as the solution to systemic breakdown, waste, and the rule of economic royalists. To them, economic planning was direct and physical, downplaying any reliance on the price mechanism. The state took direct control of the major means of production in order to carry out its social and economic goals, creating an efficient society. Labour economists E. F. M. Durbin, James Meade, Douglas Jay and Hugh Gaitskell countered that Labour needed to take more from John Maynard Keynes than from Webb, showing that only socialists were capable of enacting the best liberal ideas. To them, economic planning meant macroeconomic management, using fiscal and monetary policies to manipulate aggregate demand. Positively, the goal was to achieve full employment on a noninflationary basis; negatively, it was to keep nationalization to a minimum.
Neither side, in public, said the other was flat wrong. Each side appropriated aspects of the other approach, making it possible for Labour documents to offer a synthesis. Still, the differences between direct control and macroeconomic management were steep and fateful; it mattered which side got the upper hand. To advocates of direct control, the point was to supplant market forces by socializing the economy. Socialism itself was at stake, and the wreckage of the Depression provided ample reason to enact Clause Four. To advocates of macroeconomic management, what mattered was to achieve socialist ends, something attainable by supplementing market forces and holding back inflation. Labour had to stop relying on Clause Four to define socialism and itself because nationalization is a very limited tool.
Tawney supported Attlee out of personal loyalty, and subsequently joined Attlee in concluding reluctantly that Britain would have to fight Germany again. Labour played a significant role in Winston Churchill’s coalition government during World War II; meanwhile Morrison, Temple, and Liberal Fabian sociologist William Beveridge developed historic reconstruction proposals, and Britons entrusted Labour with reconstruction after the war ended, electing Attlee as Prime Minister.
The Attlee governments of 1945-1951 transformed Britain into a social democracy. Labour made health care a fundamental right for all citizens, nationalized one-fifth of the economy, significantly increased the incomes of wage-earners, sustained the full employment economy that the war created, instituted a steeply progressive income tax and a pension system, abolished anti-union laws, abolished restrictions on the rights of women to own property, established a minimum wage for agricultural workers, and got colonial Britain out of India, Pakistan, Burma (Myanmar), Ceylon (Sri Lanka) and Palestine. The Labour governments substantially democratized British society and politics, lifting equality to a social value, and broke the stranglehold of British colonialism. They made huge gains for equality of opportunity and condition, carrying out exactly what they promised, even as Britain reeled from the massive losses it suffered in the war. Tawney celebrated the transformation and took warranted pride in contributing to it.
On the other hand, Labour tried and failed to break Britain’s concentration of wealth, and Labour did not even try to democratize the culture and management of nationalized industries, boasting of doing nothing. In 1951 half of Britain’s wealth was still held by 1 percent of the population. The party’s long-simmering divide over direct control versus macroeconomic planning roiled Labour through its glory years of governance and for a decade following. Morrison conducted a fabled “bonfire of controls” in 1948, terminating wartime controls over industry, transport, and prices that many left-wing socialists wanted to keep. The Labour government touted its achievements in technocratic terms that obscured, for many, the party’s ethical moorings as a vehicle of social justice. Many Britons accused Labour of squandering the British Empire, an emotional charge that compelled Labour leaders to rely on efficiency arguments, downplaying moral claims that cut no ice with accusers. The party spent enormous energy and political capital creating a welfare state, over-believing the Fabian doctrine that every act of collectivization is a worthy end in itself.
Attlee’s technocratic style kept moral and ideological arguments to a minimum, and his success exhausted Labour’s agenda in remarkably short order. The nationalization list shrank to nothing, and Labour was left with rearguard battles over its achievements. By 1950 the party’s official shopping list was down to a handful of industries—water supply, cement, meat, sugar refining, and industrial insurance. The following year there was no list. Trade unions opposed nationalization, and the party seethed over its ideological disagreements. Soon the question shifted to whether Labour should press for full-orbed socialism, getting rid of capitalism. Was it a Socialist party if it stuck with a Social Democratic agenda of reforming capitalism?
The Labour mainstream, led by Morrison, settled for defending the party’s achievements. The Labour leftwing, led by Aneurin Bevan, pressed for more nationalization. Gaitskell, C. A. R. Crosland, and for a while, Richard Crossman, countered that Morrison versus Bevan was the wrong debate, being backward looking. Industrial ownership no longer mattered very much, because the “New Class” of corporate managers and government bureaucrats ran the world anyway. The new task of socialism was to transform an increasingly managerial order into a society defined by democratic socialist values. Labour socialism had to be pluralistic, experiment with decentralized models of socialization, accept the mixed economy, and emphasize its ethical socialist ideals. Crosland wrote the bible of the revisionist movement, The Future of Socialism (1957). Crossman cushioned the blow to Fabian pride by titling his movement reader New Fabian Essays (1952). Gaitskell won the party leadership but lost the 1959 election and died three years later at the age of 56; meanwhile Crossman reverted to Fabian orthodoxy, which at least had ideological starch and a mass base.
Today the revisionist upsurge of the 1950s is remembered chiefly for discrediting Fabian orthodoxy and not for its creative attempt to rethink democratic socialism. The revisionists had many ideas, but no big idea to replace the one they discredited, after which they were remembered for failing to realign Labour politics. They said forcefully and correctly that the Fabian mentality was too bureaucratic and managerial. Tawney cringed when they said it forcefully, since that disparaged historic Labour achievements, but he supported the Gaitskell revisionists. Fabian socialism, though remarkably successful, convinced too many people that socialism is about nationalizing major enterprises. Replacing that belief with a richer, ethical, culturally pluralistic, decentralized, and radically democratic socialism would take a generation—or so they said. Sixty years later, the Labour Party is still working on it, while refighting the battle over Clause Four. Party leader Jeremy Corbyn has rallied the party with a desperately needed fighting spirit. What he would do in power is much less clear.
William Temple, while serving as Archbishop of Canterbury in the early 1940s, keenly understood that defending the indispensable gains of Social Democracy is not enough. During the period that Temple, Morrison, and Beveridge conceived the British Welfare State, Temple wrote books advocating a socialized monetary system, social use of land, and economic democracy. He was incredulous that citizens of modern democracies tolerated big private banks, imploring that the process of investment is too important to be ceded to private bankers. He tried to restore the land issue to its former prominence in Christian socialism, describing rent, like Henry George in the 1880s, as a toll levied by monopoly. Since God created the land for everyone, and society creates the increment in the value of land, the increment should go to society. The key to creating a just society is to tax the increment of land values, appropriating the unearned value. Temple said he saw no reason why anyone should be paid large sums of money “for merely owning the land on which our cities are built.” George was never refuted on this point, only defeated, whereupon socialists wrongly dropped the subject. Lastly, Temple had a guild socialist proposal that abjured wonky blueprints. He called for an excess-profits tax payable in the form of shares to worker funds that gradually gained democratic control over enterprises.
In the 1970s, German and Swedish unions pushed hard for this idea, with no mention of Temple. In Sweden it was called the Meidner Plan and enacted in 1982. Big business and the financial class fought it assiduously for eight years, the charter ran out in 1990, Social Democrats lost the 1991 election, and Conservatives wound up the social funds the following year. That marked another sad ending for guild socialism, terminating the last significant program for economic democracy at the national level.
When British and German socialists revised democratic socialism in the late 1950s, the story to many was that they betrayed socialism. This judgment defined socialism too simply, but it rightly caught that the struggle for economic democracy demands a fighting spirit; otherwise, selling out is very much the issue. The Labour Party and SPD went on to become so deeply integrated into welfare state capitalism that it was hard to see socialist aspiration in either of them. Later it was undeniably left behind in both party mainstreams. The same thing happened in Sweden, where unions pushed for the Meidner Plan and Social Democrats gave it only timorous support, preferring to consolidate the Welfare State. Then economic globalization threw every Social Democratic and workers’ party on the defensive.
The struggle for economic democracy has been left to the stubborn types in the back rows. I am against giving up on national scale strategies, but also against identifying economic democracy solely with them. Democratic socialism expands the cooperative, public bank, and social market sectors, mixes various modes of social ownership, dismantles white privilege, male privilege, and heterosexual privilege, repudiates Eurocentric presumptions, and upholds ethical commitments to freedom, equality, community, and ecological flourishing. It is far more complex and unwieldy than the supposedly inevitable outcomes that Marxists and Fabians predicted. Economic democracy is the heart of democratic socialism and the test of its ambition for social justice. Above all, it is an ethic of radical democratic struggle.