September 1998

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Blairism – Europe's shining beacon or a low-watt glow?

by Erkki Tuomioja

Brilliant and successful as Labour’s election strategy and campaign were, I have reservations about the same strategy working elsewhere. Having listened to some of the gurus employed by New Labour in its election campaign, I think that a good part of their advice was more or less irrelevant to the Left in most other countries and in some cases more likely to lead to electoral disasters rather than success if applied in the Nordic countries.

There is nothing revolutionary about Labour’s internal reforms from a European point of view. Essentially they have meant that Labour has now – partly – liberated itself from trade-union guardianship and otherwise adopted statutes and practices which have been more or less normal practice in most European social democratic parties.

As for New Labour’s post-election performance, the verdict on Blairite policies must be left open for the time being. Even if they do turn out to be a success in the British context, there is no a priori reason to think that they could or should serve as a model for other European countries.

The starting point is rather baffling: why should American and British experiences of and policies on welfare reform be of particular value or significance when debating the future of the welfare state, when these two countries are not welfare states in any sense that is familiar to and accepted by most people in the Nordic countries?

The USA has, of course, never been seriously perceived as a welfare state. The UK, on the other hand, with the Beveridge Plan and the reforms carried out by the post-war Labour government, has been seen as a welfare model. Even so, it can be argued that these two countries between them have more similarities in their liberal or residual social policies than with other, corporatist, institutional or social democratic welfare regimes. They certainly have the most unequal distribution of income as well as the highest instances of poverty to be found in the OECD countries.

Anthony Giddens seems to interpret this as showing that the welfare state has not been particularly successful in combating poverty and reducing income inequality. Looked at from the Nordic countries – where the welfare state has been extraordinarily successful in eliminating poverty – an alternative interpretation would be that neither the US or the UK can be called welfare states.

The social policies of the Nordic countries and most European countries are different from those in the US and UK in their universalistic approach to social insurance, benefits and public services. It is indeed true that Nordic-style welfare does benefit not only the least privileged but also those who are well-off. It is also true that the more well-off have more earnings-related benefits and that they are able to use free libraries, education and even health services more than less-well off people do. The better-off do, however, also contribute more to the costs of the welfare state both through taxes and social security contributions.

This is intended. The result is a considerable redistribution of income on the one hand and enhanced social cohesion on the other, with the vast majority of the population sharing common experiences in maternity wards, day-care centres, schools, health centres and other social amenities. Much effort has been directed towards preventing the emergence of a marginalised underclass through both social and physical investment.

Thus, contrary to what Giddens says, social democracy, or at least the Nordic manifestation of it, is not about class politics of the old Left, but about overcoming and eliminating old class distinctions and contradictions. Needless to say, this is not a product of authoritarian policies – they would never have been successful – but of democratic multiparty politics in a pluralist and liberal society.

The Nordic welfare regimes are of course high-tax regimes with a high degree of state intervention. But to call this corporatism of the kind where the state necessarily dominates over civil society, as Giddens portrays it, is misleading. A central feature of the Nordic welfare model is that it involves both civil society and local government with a high degree of real autonomy in the actual running of welfare services.

In fact most social democrats would today rather use the concept ‘welfare society’ in lieu of ‘welfare state’. This particular example of new-speak should not be interpreted as an indication that the state is surrendering its responsibility for the overall provision of welfare services and social security. Couldn't we rather say that these do not necessarily have to be produced by the state itself.

Nor is it easy to comprehend what is meant by "a new mixed economy" as opposed to the old one in the Nordic context, where battles over public ownership as such have never taken centre-stage as they used to do in Britain.

I am not claiming that everything is fine with the Nordic welfare states. On the contrary, there are serious problems of which the most pressing are those connected with the high costs of the welfare regimes. The problems were already evident well before the end of the years of full employment most Nordic countries had been able to enjoy. But they became acute when unemployment shot up. In Finland, for example, it rose from practically zero to 18 % as social costs skyrocketed with the social safety nets functioning precisely as they were intended while taxable incomes fell.

While the welfare state cannot be blamed for the economic crisis, it is evident that the resulting public sector deficit cannot be balanced by tax increases. On the contrary, there is a need to cut income taxes at least for low-income groups and even for a slight reduction of the tax rate as a whole.

Not all of this can be achieved through growth and better employment. Cuts in social expenditure – which have primarily affected income-transfers, not services – are also necessary. The Nordic social democrats have not - and neither have most centrist parties - resorted to trimming social expenditure through any desire to dismantle the welfare state.

Attacks against the welfare state have no significant political or public support despite prominent academic and media support for neo-liberal measures. Not even the prospect of massive tax reductions, which dismantlers of the welfare state dangle before people, has succeed in mobilising opinion behind the neo-liberal agenda, except for some of the very rich.

What is therefore now being done in the Nordic countries aims to make the welfare state economically and socially sustainable. The original idea behind Nordic welfare policies has been specifically to activate those who would otherwise be marginalised and incapable of participating fully as producers and consumers and as citizens in our societies.

The Third Way as expounded by New Labour's spin doctors implies that the Left must reform its policies because they have failed. This is something most European social democrats would not agree with. Reforms and new thinking are certainly needed, not because of the failure of social democracy but because the life-time full employment conditions of Fordist mass production and consumption and of Keynesianism-in-one-country on which the Nordic model was originally built do not exist any more.

Blairism deserves the benefit of the doubt. But until it has more solid achievements to its credit, it would do well to contain the high-power marketing of its ambition to be a beacon for Europe which risks overstepping the fine line between the high-minded and the ridiculous.

Nevertheless there is one example of Blairism which has been and will continue to be a beacon for continental social democrats: namely the Blairism of George Orwell whose appeal for fundamental decency in human relations and rejection of all forms of totalitarianism will always be valid guidelines for us all.

Erkki Tuomioja, MP, is the Chair of the Finnish Social Democratic Party Parliamentary Group. This was one of the keynote speeches at the seminar "Blairism - a Beacon for Europe?" held at the Finnish Institute in London on 29 May 1998.

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