Let me first of all thank the Italian students and LSE for inviting me to talk about this challenging topic. It is by no means an easy task, at a time when the European Left appears shaken by deep crisis, and engaged in the quest for new goals, new cultural paradigms capable of opening up a perspective of innovation and recovery. In the last European elections socialist, social democratic and labour parties suffered a heavy defeat. The political future of the Left in the EU, and particular in the larger countries of the Union, appears quite problematic. Of course, we hope that Gordon Brown will reverse this trend. So far, however, the great times when the European Left had a leading role in the transformation and governance of our societies seem to be over. Yet this development is not the reasonable outcome of a victory of neoliberal culture over socialist tradition: it is, rather, the fruit of an astonishing paradox. The Left is losing ground at the very time when a major financial, economic and social crisis marks the end of a cycle of unregulated globalization dominated by ultra-liberal ideology.
The dogmatic delusion that the market-place is infallible has faded away. Public debate is turning back to ideas which are among the fundamentals of socialist tradition: first of all, the idea that politics and democratic institutions must orient and regulate economic development, because this is the only way in which capitalist development can be reconciled with the principles of democracy, social justice and respect for individual liberties. We are now rediscovering that money does not produce money, as the financial oligarchy wanted us to believe: that wealth and value are produced by labour, as written in our classics. The world will emerge from this crisis deeply transformed. We are undoubtedly on the threshold of a new phase of economic globalization where the need for equality and human advancement will play a bigger role.
Major change is going on in the political arena as well. First of all, the change in the United States of America. The neo-con season of unilateral decisions and aggressive policies is over. The new Administration has announced a turnaround: the search for dialogue with the Islamic world and a renewed engagement for peace in the Middle East. The stress is now put on the need for dialogue, on the preference for Western soft power or, at least, smart power, rather than the brutal use of force. The US have announced their intention to close Guantanamo and put an end to the times when torture and violations of human rights were justified in the name of the war on terror. At long last, they are advocating a multilateral vision of world order and, in this context, the need for a more balanced US-EU partnership. Of course, the new American policy is having a lot of trouble as well: a harsh confrontation in Afghanistan, an escalation of the tension with Iran, and, most important of all, a stalemate in the Middle East peace process, due to the weakness and splits within the Palestinian camp and to the hard-line nationalism of the Israeli leadership. These American difficulties, however, highlight even more clearly the fact that European initiative is weak and the EU is incapable of stepping forward as an active and effective partner. We could almost say we are witnessing a sort of unilateral declaration of multilateralism by the new American administration, while the only major and global partner of the United States seems to be the People’s Republic of China. This state of affairs is also the outcome of the defeat and weakness of the Left in Europe. But here lies the paradox: all this is happening at the very time when our ideas are in demand again – even those we ourselves had forgotten, or didn’t dare pronounce too loud, because we thought they were out of fashion.
Faced with such a major turnaround, it is Socialism in Europe that seems to be in the biggest trouble. Most of our continent is nowadays governed by conservative leaders. The decline of the neoliberal Right does not seem to benefit progressive forces; on the contrary, in many European countries it seems to favour a populist, nationalist Right, sometimes openly reactionary and racist. And yet, while this happens in Europe, in the rest of the world it is the major progressive forces that are guiding the effort to open up a new perspective beyond the crisis, laying the foundations for a new economic and political season. It is the Democrats in the US and in Japan, and it is a wide range of other progressive forces, leaders and political parties, that are leading the big emerging countries, from India to Brazil and South Africa.
Special attention needs to be given to the situation in China. In recent years China has represented one of the most sweeping phenomena in the scenario of globalization and world growth. The impetuous development of the Chinese economy has been built on the same mix between political authoritarianism and economic liberalism already tested in other Asian countries. Gorbachev’s utopia was to combine socialist economic policies with political democracy. The Chinese way represents the opposite extreme: combining the dictatorship of the Communist party with the rationale of capitalist development and of the market-place. The current crisis, however, is challenging the Chinese model as well, in so far as it has highlighted the unbalances and contradictions of export-driven growth, based on the compression of the domestic market. It is now manifest that the growing unbalances between urban and rural areas and the abysmal levels of workers’ wages have become unsustainable. The Chinese response to the current crisis is oriented towards reclaiming policies which had characterised the experience of European social democracy. It may seem strange to see communists shift to the left by becoming social democrats; but developments in China seem to be moving precisely in this direction. The Chinese economy grew by 8.9% this year: a growth rate which offset the sharp drop in Chinese export, driven as it was by domestic consumption and investment, which in turn were driven by higher wages and substantial investment in healthcare and social security. In other words, a heritage which in Old Europe is described as out of fashion is now beginning to contaminate other remote parts of the world.
Why then it is right here, in Old Europe, that progressive forces seem to be facing the most difficult challenge? Why in the very part of the world where democratic values, social justice and individual liberties have seen their highest realization through the centuries? We seem to be witnessing the same polarization as in the 1930s, when faced with the great crisis and Depression, America chose the New Deal whereas the heart of Europe was taken over by nationalism, fascism and anti-Semitism. I obviously do not think that this tragedy could come about again today. However, there is a risk that our continent may head towards a pattern of decline that is not only economic, but also political, civic and cultural. The risk is that in the new world emerging from this crisis Europe may have less influence, and our culture and civilization a waning role.
A bright French sociologist, Dominique Moïsi, has described today’s world as split in three emotional camps: hope, throbbing in the great countries asserting themselves as the new protagonists of the international scenario; grudge, among the excluded and the losers; and fear, among the rich who are afraid to lose their privileges. Europe is by far the continent of fear. Fear of the aggressive competition of Asian economies, fear of immigrants upsetting our social order and perceived by the poorest as an enemy and a threat, now more than ever, in the midst of crisis and unemployment; fear of terrorism and Islam, which have exacerbated the impression of living in a fortress under siege, and the desire to turn to a strong and deeply rooted civic and religious identity.
The Right has built its strength on these fears: in many countries, it has presented itself to the weakest social classes as the only force which can protect people and uphold established interests and values.
In the second half of the Nineties, the great majority of Europeans turned to us, to the socialist and centre-left forces, to find answers and protection vis-à-vis the challenges of globalization; but, on the whole, we were not able to deliver a positive response to such wide-spread public demand. Faced with this challenge, European socialists took different roads. Some countries and parties embraced the illusion that the effects of globalization could be restrained and that it was possible simply to defend the social structures embedded in the welfare state and in the century of social democracy; while other parties and leaders enthusiastically embraced global capitalism, and innovated our vocabulary. They stopped speaking of employment, preferring to speak of employability; they replaced the word protection with opportunity; they set aside the word welfare and chose to speak of education. All of us – though not all to the same extent – have felt the influence of this innovation, mainly originated in the New Labour. Certainly this helped us win another term in government for socialist parties. Nevertheless, we did not succeed in repairing the growing social inequalities generated by the unfettered development of global capitalism; we basically appeared to be treading in the footsteps of neoliberal culture and are therefore included among the forces held accountable for the current crisis.
Faced with globalization, European socialism – both in its traditional components and in its most innovative sectors – has not managed to move beyond the scope of national reformism. More specifically, I believe that the great opportunity represented by the process of European political integration has not been fully grasped. The advent of the single currency called for a quantum leap: we should have development, research and innovation policies, and harmonized fiscal and budget policies. We should have built a true social Europe, governing the challenge of immigration jointly, in a mutually supportive way. We should have enhanced the budget and powers of the European Union, opening the way to a “European reformism” capable of stepping beyond the limits of nation state experiences. It was the vision advocated by Jacques Délors.
We should not forget that in those years 11 out of 15 EU countries were led by socialists. We tried to point out a new way at the Lisbon European Council: a bold reformist program, but it was not sustained by strong institutions, appropriate resources and a clear political will.
The challenge of a global world lies precisely in the ability to govern processes at a supranational level. Europeans have the most advanced democratic form for the governance of globalization. It would be in the best interest primarily of socialists and progressives, to give value and strength to European institutions: the Right, after all, believes in the miraculous virtues of the market-place. But we too have been timid and self-restrained in using the potential strengths of the European Union. It is no mere chance, that the decline in pro-European sentiment among European citizens, highlighted by the outcome of the French, Dutch and Irish referenda, is accompanied by a fall in social democratic influence in many big countries of our continent. For the Right things are easier. The Right we face today has an instrumental and reductive vision of Europe, linked to the self interests of each individual state. In their view, European institutions are nothing more than an arena for debate and compromise among governments. There is a strong return to nationalism. Faced with the dismay of individuals in a “liquid society”, and the difficult challenge of living together with people of different races and backgrounds, the Right provides simple, regressive solutions: the rediscovery of identity-based roots and local allegiance, the political use of religion (the European Judeo-Christian tradition) divested of its quest for universality and reduced to Western religion in clash with other civilizations. The Right reacts to the predicament of workers and productive classes by feeding protectionist illusions and urging hostility against immigrants, or rebellion against any form of social solidarity (as in Italy between the rich North and the less developed South).
These answers are undoubtedly sustained by the strength of a brutal simplification of reality. They are basically delusions, bringing about a risk of mystification and violence; but they find their way especially among the most disadvantaged social groups, who feel more scared and less protected than others in the defence of their traditional achievements. Exposing this deceit, however, is not enough: unless Social Democracy and the Centre-Left are resigned to representing only an enlightened and protected minority (teachers, civil servants, pensioners or the intellectual, educated and well-meaning middle-class, living in neighbourhoods where there are no immigrants or Roma at all).
Let me say something – and I hope I don’t sound too archaic. The primary problem for progressives today is to regain strong roots among the people: starting with our ability to interpret social conflict in its modern shapes, to represent the world of labour, and give voice to its best interests. Never as today has it been so clear that labour – and I mean not just manual labour, but also self-employed workers, and small businesses – has paid the highest price for the distorted development of the last 15 years, which has benefited financial income and speculation. True, protectionism would be a selfish and unsustainable answer to the difficulties of European productive systems, and also to the predicament of our workers; but the necessary opening of markets will work only if accompanied by an expansion of social and labour rights. This year, we learnt the great lesson of a disaster caused by financial deregulation. Now let us try to prevent other pending disasters, caused by social or environmental deregulation.
The crisis has not been an accident due to the calculation mistakes or unscrupulous greed of a few bankers. It has highlighted a lack of regulation and controls, which reflects a democratic deficit, due to the asymmetry between the ascent of a global economy and the weakness of international institutions, or the inadequacy of old nation states. In a progressive vision, the theme of democracy has regained a central place, as a crucial issue to re-establish a strong outreach to public opinion, in our countries. This is true at all levels: as industrial democracy in the workplaces; as democratic rights of consumers, savers and users; as democratic rights to participation, control and transparency.
The unfettered growth of global capitalism has had an impact not only at social and economic level: it has changed the political scenario. Financial, industrial and media power are concentrated in the same hands, gaining ground without being subject to any form of control; while the decline of traditional political actors such as nation states and political parties is fostering a major shift in real power. In Italy, for example, a major economic actor became the founder of a political party. In other cases, economic power has exercised a huge influence on politics. This challenge strikes at the very heart of democracy: the possibility of informed, non-manipulated citizens’ participation in decision making has substantially shrunk. It is a crucial challenge for the future of the Left. Indeed, it requires a transformation in the very patterns of political action, opening up new channels of communication within society (as in the case of the Italian primaries or of the Greek experiments in participatory decision making). On the other hand, this challenge might be lost anyway, due to the impotence of political actors and national institutions when confronting major global economic developments. That is why it is essential to enhance the power of supranational institutions.
The second major theme we need to focus upon, in order to advance a progressive response to the current crisis, is equality. Throughout these years we have been somewhat shy to use this word; possibly influenced by our memories of the levelling egalitarianism of bureaucratic socialism. We have preferred to speak of equal opportunities. No doubt this is still correct; but at the same time, we need to revamp our engagement to greater fairness in the distribution of wealth. In an unforgettable essay written nearly twenty years ago, Norberto Bobbio refuted the view that after the fall of the Berlin wall the difference between Left and Right had lost its raison d'être. He wrote that the quest for equality still was the distinctive feature of the Left in our societies. I think he was right. On the other hand, the success of the Right and of right-wing ideology has bred the growth of intolerable inequalities: not only between rich and poor countries but also within our societies. In Italy, for example, in the last 15 years, while labour revenues have basically stagnated, capital gains have grown by 44%. The recent OECD Report (December 2008), Growing unequal. Income distribution and poverty in OECD countries, shows that, despite a significant growth in global wealth, in recent years poverty and social inequality have also increased, in the vast majority of developed countries. All this has not only brought about unfair societies; it has also turned out to be one of the reasons of the economic crisis. Unequal distribution of wealth does not sustain internal market and consumption growth, it does not give value to labour, nor does it pay fair wages, and it reduces worker motivation, eventually leading to lower labour productivity. We need to rediscover and reward the great value of hard work, of the intelligence and efforts of working women and men. We need to value and reward labour and production, against the excesses of speculation and capital gains. Here are the motivations for a modern social conflict, in which the European centre-left must take a leading role, if it is to regain roots within society. A recent, very thought provoking book by two British scholars (“The spirit level”, by Richard Wilkinson and Kate Pickett) claims in its subtitle that “more equal societies almost always do better”. What is interesting about this study is that its authors have used empirical research to prove that above certain levels of income there is no correlation between growth in wealth and average quality of life of the population. On average, in fact, people lead a better life – live longer and are healthier, for example – in those societies where, thanks to more advanced systems of social security and government protection, there are less inequalities in income, culture and opportunities.
One final point: we can get over the present crisis and foster more sustainable and balanced development only if we opt for innovation, scientific research and culture. We need to revamp the core of the European agenda drafted by the Lisbon council: the idea of knowledge-based growth. For too many years development has been based on low wages in emerging countries, while the domination of Western finance in the world has bred an inflow of wealth into our countries unsustained by any productive or innovative capacity. What we need is not only process innovation to gain competitive edge, but also product innovation, reorienting development towards green technologies, new energy sources in alternative to oil and coal, and biomedical research; just as the new Democratic Administration in the US has chosen to do. Only in this way, can we respond to the new environmental awareness and to the inevitable constraints necessary for the survival of our planet, not through anti-scientific and regressive policies, but ensuring a new quality of development. Culture is a pre-condition, to ensure not only economic development, but more generally speaking a better quality of life, and to promote changes in our consumption patterns, so that we can set aside any approach based on waste and exasperated individualism.
Democracy, equality, innovation, are not just chapters in a progressive agenda to get over the current crisis. They are also the keynote ideas to design a new society, and a people-centred, rights-based approach to globalization.
We need a European progressive actor, brave enough to take risks, to hoist its sails and catch the wind of international change, leaving behind the timid and low profile approaches of recent years. It is quite understandable that the fall of communism and the gradual wearing out of the social democratic experience had a heavier impact in Europe and on the European Left, still trapped in its own disenchantment, incapable of going further than a merely pragmatic approach, based on common sense, economic rationality and social solidarity. But a Left with such a weak identity is manifestly helpless to confront the hotheaded populism of the Right, which has responded to the dismay and fears of European public opinion by offering safe anchorage in its traditional values: God, fatherland, family. This Right governs most of Europe, but its policies do not appear capable of opening up a new perspective. The EU is trapped in the midst of national self-interests, and is plodding along in search of recovery, while unemployment and social discontent keep growing. Last but not least, the European Union is a weak political actor, in a world windswept by rapid and shattering change.
The only European institution showing vitality and capability of asserting its role beyond the logic of intergovernmental compromise is the European Parliament; although the last elections certainly did not see a success of the Left and bred a lot of political fragmentation. A few days ago, the European Parliament rejected the EU-US agreement on counterterrorism, because it included practices which violate individual rights and liberties. A strong message, in line with the founding values of the European Union. And an important reminder to the new American administration, to keep faith with its pledge of turning a new leaf, after the horrors of Guantanamo and the extraordinary renditions. On the whole, however, the Europe of the Right does not seem capable of taking on the role of key political protagonist that would be so crucial today.
The Italian Minister of the Economy, Mr. Giulio Tremonti, in a recent speech delivered at the School of the Chinese Communist Party, said that the current crisis has marked the end of the age of colonialism. Perhaps he was trying to please his audience: one would say that the age of colonialism began crumbling at least a century ago. Nonetheless, it is undoubtedly true that the present crisis marks the end of a long era during which the North of the world dominated the rest of the planet. It is a huge change, advancing at a very fast speed. The group of the richest Western countries no longer owns the largest proportion of world wealth, as it had for the sixty years following the Second World War. Within the short span of a decade, Germany will probably be the only country in the group still entitled – in terms of GDP size – to participate in the G7. France, Great Britain and Italy will be replaced by India, Brazil and China (which is about to overtake the US). On the other hand, the decline of the G8 (basically a Euro-American world summit), and the parallel ascent of the G20, is the clearest political sign of this changed reality and changed balance of power,.
The greatest challenge that Europe is faced with in the coming decade is precisely this: how to cope with such a major change. The primary requisite to meet this challenge, if our continent intends to retain some relevance in the world, is political unity.
The right-wing camp is dominated by hostility and fear: by the wishful thinking that it is possible to put a brake on change. If Europe follows this path, instead of spreading its civic heritage of freedom, political democracy, social justice and individual rights to the rest of the world, it is in danger of disowning herself. Our global world needs European civilization: as long as we do not conceive the European Union as a fortress of the Christian West. The EU is an open-ended political project, an inclusive model of society, a world vision based on peace and cooperation among all peoples. This European Union must open its doors to a great Islamic country such as Turkey. This Europe must integrate its immigrants – without whom we are doomed to aging and decline – granting them citizenship and rights and equal dignity in exchange for loyalty and respect of our laws.
This is the difficult challenge facing a modern Centre-Left, capable of placing the European political project at the heart of its platform, beyond the experiences of national socialisms in the twentieth century. Some steps have been taken in this direction, but a lot is yet to be done: a task for the new generations, primarily.
In his speech of July 1960, JFK said: “Today our concern must be with the future. For the world is changing. The old era is ending. The old ways will not do.” It is a time for a new generation of leadership, he said: “men who are not bound by the traditions of the past – men who are not blinded by the old fears and hates and rivalries – young men who can cast off the old slogans and delusions and suspicions”. We too, live in times of change. The message of hope launched forty years ago by an unforgettable President of the United States of America is still valid today.