The flawed triumph of social democracy:

...Because liberal America has been the constant foe of the Soviet Union and its satellite states in the Warsaw Pact, recent events appear to confirm two assumptions: first, that the death of communism means the triumph of liberal capitalism...

...Full-scale welfare will mean a social support system of generous proportion, sufficient to reach into the slums and as far as the vast numbers of minorities and the structurally unemployed underclass and working poor, while providing benefits for middle-class families such as child care, and training for new careers, along with industrial adjustment policies...

...Social Democrats quite naturally affirm their interest in creating societies that are economically viable, efficient, and reasonably democratic and egalitarian...

...The promise of such loosely organized coalitions is that they will develop into strong civic institutions with the capacity to devise common public objectives and foster cooperation and a politics of negotiation...

...The defense budget could be reduced by perhaps as much as 60 percent (the cost of war preparedness for land battles in Europe), freeing up billions of dollars for priorities other than troops, tanks, and missiles...

...It breeds individual narcissism and callousness: we all live our own "life styles," behind the walls of condominium "communities...

...Sometimes, of course, so much power in the hands of so few ends in corruption...

...North Africans and the French...

...A full description of how we might or should proceed from the "great society" of present social democracies to the good society of the future is beyond the scope of this short article...

...Whether the Republicans stay in power or the Democrats succeed them, the presidents after George Bush are unlikely to have the threat of Soviet hegemony in Europe to marshal against institutional reforms and redistributive budget priorities...

...Even if all this money is not used for the welfare and benefit of the poor...

...Though we are gradually coming to inhabit an interdependent global economy in which production, distribution, labor, and investment have been internationalized, the best way to deal with such an economy besides creating a fair and balanced international economic order is to rely on local institutions...

...But West Germany also has the largest and strongest Social Democratic party in Europe...

...She has not destroyed socialized medicine or the dole, but to the extent that she could, she has "privatized" what the socialists nationalized, cut the progressive income tax, provided incentives for businesses, turned public housing back into private housing, and striven to rebuild the English middle class...

...Institutions such as Poland's Solidarity and Czechoslovakia's Civic Forum may remind us of what we have lost and what-in some new avatar-we must regain, a "public sphere" which, even in the midst of the police state, kept political ideas, moral meaning, and the possibility of a genuine politics alive...

...Local institutions are well-equipped to "shape" actual and particular markets and make their products or services globally competitive...

...Surely a significant historical event, but not one which is yet clearly understood...

...Local government in Italy is dominated either by a reformist Communist and/or Social Democratic party, and the national governing coalition in Italy is composed of Christian Democrats and Socialists...

...The Benelux nations-Belgium, Holland, and Luxembourg-alternate between Socialist and Christian Democratic governments...

...Second, and even more important because of the great concentration of power involved, the Right-the top managers of corporate capitalism-must understand and act on the principle that both their long-term interests and their social responsibilities extend beyond the world of shareholders and stakeholders, beyond employees, owners, and the managers themselves...

...For a decade now Mrs...

...But the very same people are silent before the equally corrosive effect of the social-democratic welfare state whose very benefits, when "delivered" to atomized individuals, obviate the need for family, church, trade union, community, and all the other mediating institutions that once, even in the midst of nineteenth-century entrepreneurial capitalism and its "satanic mills," enabled people not only to survive but to find human warmth, solidarity, occasionally fraternity-in short, the wherewithal with which to transcend the harsh and impersonal utilitarian calculus of the Gradgrinds and Podsnaps...

...its name is not important, call it "postindustrial," "postmodern," whatever you will...

...The gradual addition of the now-liberated but generally backward nations of Central and Eastern Europe to this integrated market will heighten the problem...

...The great multinational corporations must understand and act upon their responsibility to their local communities, to the nation, and to society-at-large...

...Make no mistake about it, the once Communist nations of the Warsaw pact will not relinquish the dogmas of Lenin and Stalin for those of Horatio Alger, George Gilder, Ronald Reagan, and the Heritage Foundation...

...and that they will become the building blocks of a new society...

...There will be market allocation of goods subject to the law of supply and demand, but the political economy will be one in which state intervention will loom large in the form of strategic planning, targeted economic development, and industrial policies...

...Thatcher's successors, whether Labor or Tory socialists, will revert to form, and Britain, like the rest of Europe, will return to the social-democratic fold...

...Even social democracies have unfinished business that, if it is to be completed, will require precisely the kind of critical ideological debates, moral analysis, crises, and conflict that Fukuyama's spurious neocon-servative thesis belies...

...At present, Spain, Portugal, and France are ruled by Democratic Socialist governments, as are the Scandinavian countries of Finland, Sweden, WALLACE KATZ, president of Community Business Consultants, a Washington consulting firm specializing in political research and economic development, is author of the forthcoming book: The Politics of the Public Sphere: Growth and Democracy in Postindustrial America...

...But they are likely to follow the lead of Western Europe with social-democratic or "mixed" economies...

...The irony here is that the death of communism means neither the triumph of liberalism nor a Hegelian "end to history," but rather an outcome that the young Marx of the 1844 manuscripts might well have welcomed, that is, the triumph of social democracy...

...To say this is not to blame the victim, but to indict the Left and social democracy for its persistent moral and cultural obtuseness: the problems we face are as much moral and cultural as social and economic...

...The welfare state, while making us less dependent upon private charity and philanthropy, has loosened our sense of responsibility for and to each other...

...Caribbean blacks, Pakistanis, Indians, and the British in the United Kingdom...

...The state will continue to provide the citizenry with an array of social welfare benefits-unemployment insurance, child care, pensions, socialized medical and health care, income policies, labor market and full employment policies, disability insurance, and public housing...

...a small crisis could topple Chancellor Kohl's weakly supported rightist coalition and bring the Socialists once again into power...

...and elsewhere decry markets that reduce everything-all use values-to exchange values and commodities...

...With perestroika and glasnost in the Soviet Union, and with the actual or potential creation of non-Communist governments in East Germany, Czechoslovakia, Bulgaria, Hungary, Rumania, and Poland, Marx's specter is finally disappearing...

...In addition, there is the sensitive political task of wedding the social democracies of continental Europe to Margaret Thatcher's liberal capitalist England...

...But the same trenchant criticism leveled at Fukuyama-that liberal capitalism with its many faults and contradictions could hardly be the end of history-could also be made of social democracy...

...The more inclusive they become, the more likely they will provide the groundwork for a democratic culture and a renewed sense of moral and social responsibility...

...In contrast, any attempt at industrial policy by the federal government will be mired in special interests and bureaucratized planning which is always too little and too late to do any good...

...This is more difficult than it might seem...

...The third observation takes a page from Tocqueville with his emphasis on the critical importance of local institutions...

...The welfare state, with its vast and always growing bureaucracy, takes care of everything and everybody with, we hope, efficiency and competence...

...Prussians and Bavarians...

...The Federal Republic of Germany has a Christian Democratic majority in the Reichstag and, accordingly, a nonsocialist chancellor...

...The Left must understand and learn from classical conservatism about the importance of mediating institutions, religion, moral and social responsibility, culture, and the fallacies of the utilitarian calculus, whether Bentham's or Rawls's...

...If we are lucky, these formal-informal institutions will at the local level reconfigure what we have lost-a public sphere in which common work, ethical debate, and democratic social interaction are part of everyday life...

...But even when bureaucracy runs smoothly and for the benefit of all, bureaucratic rationality is no substitute for the vitality of a democratic culture-for public work, critical discourse and debate, and engaged and energetic social interaction...

...Worse yet, it encourages social irresponsibility: because the state takes care of the poor and downtrodden, because they too can consume and watch television, the middle and upper classes need not be concerned with such goods as social integration, interaction, harmony, or national purpose...

...We have entered into a new era of social development...

...equivalent to those in Scandinavia and West Germany-both of which, it should be noted, spend more per capita than the U.S...

...But even if social democracy rather than liber-alism has triumphed, could Fukuyama still be right: Have we come, with the victory of social democracy, to the end of history...

...Academic Marxists in the U.S...

...Thatcher has done her best to wrench Great Britain away from the welfare socialism of Attlee, Bevan, and Wilson or the kinder and gentler Oxbridge-inspired Tory socialism of her immediate Conservative predecessors, and toward something approaching what the French call le capitalisme sauvage of the United States...

...Greece has just ousted a socialist government, but primarily because of its long tenure in office and the quirky and perhaps corrupt behavior of Premier Andreas Papandreou...

...But for now, three observations can at least lay the groundwork...

...and second, that the victory of liberalism and the survival of only one idea of government signify an end to ideological disputes and the beginning of an era in which the problems of international conflict will be reduced to devising technical solutions to technical problems (this is the argument of Francis Fukuyama in "The End of History," The National Interest, Summer 1989...

...But the advantages of the EEC's integrated market are more than even the "Iron Lady" of Downing Street can withstand...

...Social Democratic regimes in Western Europe (and ultimately perhaps in Eastern Europe) have many problems that cannot be resolved by more technological progress or evenhanded economic growth...

...A great corporation is much more than private property or a machine for profit and job creation...

...In most social-democratic systems, equality does not mean equal access to political and economic power, but rather the ability of all to consume...

...In social-democratic societies as in the liberal capitalist U.S., the individual is too frequently atomized in his or her private life, taken up solely with the pleasures of consumption, devoid of interest in political participation, and content to passively register yea or nay to citizenship via electoral contests that more closely resemble public relations campaigns or media "opportunities" than politics...

...In fact, the social-democratic systems of Western Europe, for the most part, have succeeded in creating societies where equality is measured by consumption, where representative democracy means political passivity, and where freedom and individuality are unhappily confounded with individual and social narcissism and irresponsibility...

...And, last but not least, the triumph of social democracy will not spell an end to the single most intractable problem of U.S...

...The triumph of social democracy will not resolve age-old racial, religious, or cultural animosities: for example, between Protestants and Catholics in Northern Ireland...

...or, like the Netherlands, shift among governing coalitions in which Social Democrats figure prominently...

...If Gorbachev makes it and perestroika and glasnost prevail in the Soviet Union, the other Warsaw Pact nations of East Germany, Czechoslovakia, Hungary, Bulgaria, Rumania, and Poland will have representative democracy-free elections, multiple parties-and religious toleration...

...The European Economic Community (EEC) is currently wrestling with how to maintain, harmonize, and extend the varied social benefits in each of its member nations while building a unified European market economy by 1992...

...That is pershaps why we in the West so admire what has happened in Central and Eastern Europe...

...The Italian Communists, long prohibited from membership in the endless coalitions that form governments in Rome, are changing their name...

...on public and social services, yet regularly outperform us on every indicator of economic growth and productivity...

...Even the best of these regimes are rife with contradictions of a racial, cultural, and moral nature...

...And hard as it may be to imagine, across the Atlantic, in the U.S., the heart and home of liberal capitalism, the "withering away" of communism in Central and Eastern Europe may also bring about the triumph of social democracy...

...First, those on the Left must comprehend that the elimination of poverty or the achievement of relative equality is not the end but the means to a satisfactory human existence...

...Walloons and Flemish in Belgium...

...In the U.S., for example, cities like Baltimore, Pittsburgh, and Seattle can call upon a range of public-private partnerships and formal-informal institutions to devise an industrial policy suited to their own "homegrown" enterprises and to the specialized market niches of the global economy...

...As a small but significant segment of the underclass in our great cities demonstrates daily, it is possible to feed, clothe, and house people but leave them without the rudiments of moral understanding or civility...

...they want to be seen as social democrats so that they, too, can serve in a government and control cabinet ministries...

...Basques and Spaniards...

...Social thinkers such as Jiirgen Habermas, Alasdair Macintyre, and Alan Wolfe would argue that while the social-democratic welfare state has provided its citizens with abundant material goods and social benefits, it has not solved the riddle of modernity: how to create a society at once efficient and civilized, egalitarian and fraternal, and abounding in individual freedom, yet characterized by moral and social responsibility...

...Yet, there is, as Hegel observed, "reason in history...

...Northern and Southern Italians...

...Denmark, and Norway...

...The hope of this new era, and perhaps its "reason," is a convergence between the exigencies of a global economy and the moral and cultural desiderata of the human spirit-in other words, a rough correspondence between what is needed for economic development and what is needed for the creation of a good society...

...and impoverished and downtrodden Southern and Central European laborers working in all the advanced nations of Western Europe...

...they will certainly not yield to mere tinkering or technical fine tuning...

...Local public-private partnerships are better suited to targeted economic development than broad-based regulatory institutions or the national bureaucratic state...

...Many social-ists, in contrast to neoconservatives such as Fukuyama, would gladly accept the victory and leave it at that...

...even if some is spent on reducing the deficit, rebuilding the infrastructure, targeting special areas for economic development, as well as on further entitlements for the middle class and the rich, there will be plenty left over in the next decade and thereafter to create a full-scale social welfare system in the U.S...

...Local governing coalitions can provide the impetus, necessary capital, cooperative environment, and public space for tailoring economic development to both local resources and specialized global market needs...

...They must learn to pay their fair share for education, housing, community revitalization, infrastructure, social and public services, and the protection of the environment, for those things which, in the old liberal system, were described as "externalities," "market imperfections," or "the social costs of production...

...Even though all the nations of continental Europe have extensive social benefits, uneven economic development in southern Italy, Spain, Portugal, and Greece has created less benevolent welfare programs than those in more prosperous France, West Germany, Denmark, and the Benelux countries...

...From the Iberian Peninsula to the steppes of Siberia, continental Europe has already become or is becoming the realm of social democracy-nations where a "mixed" political economy with democratic freedoms, markets, and state planning coexist with full-scale welfare programs...

...society-racism...

...The hope is that as such public-private partnerships evolve, they will become something more than governing coalitions interested primarily in bricks and mortar for downtown revitalization or, at best, in the general renovation and expansion of the local economy...

...Look at the facts...

...Nor will its triumph resolve the larger cultural contradictions of social-democratic systems...

...Social democracy has likewise failed to overcome the "alienation" that socialists understandably prefer to identify with liberal capitalism: in Scandinavia as in America one sees the gradual attrition of institutions like the family and the community that mediate between market and state, and the concomitant growth in bureaucracy...

...if recent polls are accurate, the Thatcher era will soon be over...

...There is no "end" to history...

...Austria is perennially Social Democratic, even with the likes of Kurt Waldheim in the largely honorific office of president...