Out of the Crisis

The crisis of the 1970s is conventionally framed as a contest between new ideas associated with neoliberalism and beleaguered postwar systems based on Keynesianism or embedded liberalism. Recent years have seen a desire to challenge this narrative, with a number of works pointing to widely debated and discussed socialist alternatives to both paradigms.

The drive toward neoliberal policies, directed toward facilitating the profitability of capital at the expense of other parts of society, was boosted by the crisis of profitability and heightened international mobility of capital. These problems were exacerbated by the breakdown in the Bretton Woods system of fixed exchange rates after 1971 and the oil price spike after 1973.

However, for many European left parties and trade unions coping with a wave of protests and labor militancy in the 1960s, the initial response was to turn further in a socialist direction. With faltering economic growth and rising inflation, the compatibility of redistributive policies that favored workers with an economic model based upon the profitability of privately controlled capital was increasingly questioned.

For many socialist parties, this meant that the power of capital, protected in the postwar model, needed to be challenged. A quote provided by Andry, from a 1978 report of an employment policy working group in the Confederation of Socialist Parties of the European Community, sums up this calculation:

Socialists therefore face a choice. On the one hand they can rely on the profit motive, which can only operate effectively by abandoning the traditional social democratic goals . . . or they can supplant the private accumulation of capital by far greater state control (and workers’ control) . . . than they have so far contemplated.

The example of the Meidner Plan in Sweden, which proposed that the ownership of Swedish companies would be gradually transferred to wage-earner funds controlled by the trade unions, has particularly enjoyed a revival of scholarly interest. Alternative responses to postwar inflation, including price controls and targeted public investment, have also been skillfully examined. Another quite different strand of work has focussed on the international level — in particular, on the plan for a New International Economic Order (NIEO), a set of proposals for a more egalitarian global order endorsed by countries in the Global South in the 1970s.

Andry’s book brings in a western European focus that sits in between these domestic or global emphases. Left-wing parties and trade unions in the region were increasingly influenced by the idea that the power of multinational companies had to be challenged on an international, and firstly (western) European, level.

From this perspective, the economic focus of European integration, especially since the creation of the European Economic Community in 1957, had to be counterbalanced by a focus on “upward social harmonization.” But beyond that, the combined economic power of western Europe’s common market gave it the capacity to impose conditions on multinationals, and to regulate economic activity in a manner that was beyond the capability of individual countries.

Between Kautsky and Lenin

European integration has been, as Andry notes, “one of the most contentious questions for the European Left in the twentieth century.” The historical depth of this divide, and the more fundamental ideological differences that it often captures, are summed up by two quotes from Karl Kautsky and Vladimir Lenin.

In 1911, Kautsky argued that the only way to “ban the spectre of war” in Europe was through “a confederation with a universal trade policy, a federal Parliament, a federal Government and a federal army — the establishment of the United States of Europe.” By contrast, in 1915, Lenin argued that “under a capitalist regime,” a United States of Europe could only be a “cartel of European capitalists” that aimed at “jointly smothering socialism in Europe [and] jointly protecting the captured colonies.”

Today’s debates echo these positions, aligning with the more radical and more moderate wings of the Left, with which Lenin and Kautsky are respectively — albeit often anachronistically and misleadingly — associated. On the one hand, there is the view that European integration promotes peace in Europe and offers the prospect of overcoming the limits imposed on nation-states by global capital.

Some have argued that there has in fact been a steady process of construction of “Social Europe” since the 1985–1995 Commission headed by Jacques Delors, which also saw the transformation of the EC into the EU, the establishment of a European single market, and the beginning of the Economic and Monetary Union (EMU). A contrasting view emphasizes that European integration is an inescapably capitalist and indeed imperial project, and that it has played a key role in undermining social protections and national autonomy.

Andry suggests that neither view is entirely accurate, in part because the term “Social Europe” has held multiple meanings. The “Social Europe” that has been proclaimed since the Delors Commission was indeed an alibi for the construction of the single market and EMU, which saw governments surrender key elements of their economic autonomy and put in place what she calls “a combination of ordoliberalism and monetarism” as the framework of the single currency.

However, Andry also argues that this was not always the case. Projects for a Social Europe that challenged capital were boosted by a blurring of traditional left–right divisions within socialism. As social democratic parties moved toward a more radical set of policy stances and outright criticism of capitalism, the embrace of Eurocommunism by their communist rivals included a more favorable attitude toward European integration in countries such as Italy.

From Marcuse to Maastricht

Some of the leading figures in the account, such as German chancellor Willy Brandt, are familiar from histories of social democracy in this period. But Andry also brings our attention to some more neglected personalities. Perhaps the most remarkable of these figures is Sicco Mansholt, who served as president of the European Commission from 1972–1973 while openly advocating for a break from capitalism.

A member of the Dutch Labour Party and the long-serving first European commissioner for agriculture — he played a major role in creating the Common Agricultural Policy — Mansholt was increasingly influenced by more radical left-wing ideas from 1968. He was fond of quoting Herbert Marcuse and argued that there needed to be a “second Marx” and a “new,” “modern” form of socialism that did not restrict itself to correcting the ills of capitalism.

Mansholt was also influenced by the warnings of the Club of Rome about the devastating potential consequences of continued economic growth and argued for what we might today call a form of degrowth. He called for coordinated action to manage resource scarcity, challenge the power of multinationals, and tackle environmental pollution; a transition away from economic policies based around the expansion of gross national product in rich countries; and a redistribution of resources in favor of the Global South. He saw a strengthening of the European Community’s competences as playing a central role in this process, even suggesting the need for EC-level “nationalizations.”

The most common Pan-European policy proposals generally did not go as far as this, although they became more concrete and ambitious as the 1970s progressed. They included the coordination and planning of macroeconomic policy and public investment, “upward harmonization” of social and labor standards, and the expansion of EC-level funds. There were also calls for workplace protections and representation of workers in company boards across the EC, greater participation of social partners in EC decision-making, and collective bargaining at a transnational level.

Other proposals included Pan-European environmental regulations, reductions in working time, and interventions to control prices, as well as a common EC energy policy and new restrictions over capital flows. The development of this policy agenda took place in conjunction with efforts to improve the organizational cooperation and policy coordination of left parties and unions on an EC level.

In a context of Cold War détente, with criticism of the US spreading into more mainstream elements of social democracy, the idea that Europe could support a “third force” alternative to the United States and the Soviet Union — possibly in alliance with the nonaligned movement of the Global South — also became more popular. It is not clear from Andry’s book how exactly this was meant to have worked in practice, and how these ideas would have come to terms with western Europe’s own dominant and often neocolonial position within the international economic hierarchy.

However, given the common frustration of both Europeans and proponents of the NIEO with the power and unilateralism of US economic policy and multinationals, there was a partial alignment of interests that made such an agenda at least theoretical feasible. A quote from Samir Amin, with which Social Europe begins, shows the potentially global ramifications with which such action on a European level was conceived:

For a solution to this structural crisis of capitalism to come about, new socialist forces would have to be recomposed in the West, operating on a continental scale in Europe, replacing the failing national state with a supranational state capable of managing on that scale the new social compromise . . . [but] all the hopes that might have been entertained at the time simply went up in smoke, as the Western Left missed the opportunity to renew itself.

Although few would have gone as far as Amin’s idea for supranational state, Andry emphasizes that, at a time when socialist parties were in government in most EC member states, their ideas were not simply an abstract wish list. It was, nonetheless, a chance that they failed to take. While a less radical but substantial range of policies managed to gain the support of the European Commission, they mostly fell at subsequent hurdles, particularly when it came to securing the support of the European Council member-state governments.

Missed Opportunities

In Andry’s view, this failure can be explained by the Left’s divisions — national, ideological, and other — and lack of coordination, its strategic inadequacies, and its failure to mobilize grassroots support for these policies. To these factors we can add timing and personalities, and the questionable sincerity of the leftward turn by socialist leaders in the first half of the 1970s.

Although socialist parties could agree on general principles and certain lowest common denominator policies, they consistently failed to reach agreement on the more specific meaning of central propositions. Beyond this, there was still the problem of divisions on the very question of whether European integration could be pursued in a way that was compatible with socialist goals. In 1980, the president of the Socialist Group in the European Parliament observed that “the most fundamental problem, and where the Group is deeply split, is that of building Europe itself.”

At the same time, a key part of Andry’s argument is that “these divergences did not impede the emergence of a broad ‘Social Europe’ project.” Any effective project would have required both intergovernmental and supranational action. There are intriguing signs that at times tensions between more moderate pro-integration and more radical Eurosceptic elements could be quite productive.

The entry of the more Eurosceptic British Trades Union Congress (TUC), together with other organizations such as the Danish Confederation of Trade Unions (LO) and Italian General Confederation of Labour (CGIL), into a new European Trade Union Confederation (ETUC) in 1973, created a new dynamic. ETUC, while still favorable to European integration and dominated by more moderate currents such as the German Trade Union Confederation (DGB), adopted what Andry calls a “more combative stance towards European institutions” and placed “far greater emphasis on the control of multinationals, environmental issues, the Third World, and peace and disarmament.”

However, these organizations never gave enough attention or coordination to the European level, particularly in a context in which European capital was far more organized and coordinated. Timing and personalities also played a role in this failure.

For example, Andry emphasizes the detrimental consequences of Brandt’s resignation as West German chancellor in 1974. Brandt, a key early driver of Social Europe initiatives and later an important advocate for the NIEO, gave way to the more right-leaning Helmut Schmidt, who advocated for deflationary policies and opposed ideas for economic planning and the NIEO.

Final Blow

By the time the left came to power in France in 1981, the Socialists had lost their majority on the European Council and neoliberal ideas were already becoming ascendant. The failure of the French government’s calls for EC-level coordination in support of a reflationary program was, in Andry’s words, a “final blow” for these projects for an alternative Social Europe.

Above all, Andry argues, these left projects failed because they showed little interest in engaging with or mobilizing on a wider grassroots level. Discussions on European policy remained confined to a small circle of elites. Andry suggests that the “Old Left,” which controlled most party leaderships, saw their Social Europe project as a “paternalistic” means of reasserting authority over constituencies, “without ever trying to trigger widely mobilized popular support for their European project.”

By 1983, she argues, they had missed their chance. The right was now dominant politically, and new Cold War tensions had undermined the possibilities opened by détente. The moral and economic weakening of the communist bloc undercut the force of an existing global alternative to capitalism, while the Global South was increasingly divided and workers’ movements in Europe had been progressively weakened by structural changes like deindustrialization. This enabled a “real new international economic order” to consolidate itself, based around US hegemony and the Atlantic Alliance.

The experience of the French Socialists appeared to confirm that the left was stuck in “the European dilemma.” Any kind of “socialism in one country” was increasingly constrained in an ever more interdependent world, but the left seemed incapable of bringing the coordination needed to alter a European integration process that was built on expanding markets and facilitating capital.

The choice of the French government — and of its then finance minister Jacques Delors — was to renounce “socialism in one country” and to embrace a European integration process that entrenched, rather than challenged, the market- and capital-oriented basis of the European Community.

Explanations of Defeat

Andry’s emphasis on the conservatism of “Old Left” leaderships aligns with a number of long-standing observations — on the indifference of Swedish Social Democratic leaders towards wage-earner funds, and the inability of the Italian Communists to incorporate new social movements in their project, for example. At the same time, Andry is also right to emphasize that their options had become more constrained by the early 1980s, supporting literature which highlights the path dependency imposed by the successes of the right in the early 1980s, together with the high US interest rates imposed by the Federal Reserve after 1979.

However, these explanations feel incomplete. It’s not clear, for example, how coherent and achievable this Social Europe project actually was. The vagueness that Andry frequently notes betrayed an inescapable uncertainty and disagreement about putting general principles into practice.

The Socialist Group in the European parliament, which should have had more potential for effective coordination and transnational action than the national parties and governments, failed to pass resolutions on any of the main objectives of the Social Europe project. This omission illustrates how far these ideas may still have had to go before they were implemented in any substantial form. This is particularly true of the more ambitious ideas such as EC-level planning of investment or economic democratization. It’s also not clear how the more moderate policies would have altered Europe’s general social and economic trajectory.

At times, Andry seems to overstate the potential for grassroots mobilization, while understating the divisions surrounding the question of “Europe itself.” She places a deserved amount of blame upon the leaderships of the Left for their reluctance to engage with or mobilize wider opinion on European policy questions. The elite focus of these leaders also reflects the little pressure they faced to do otherwise.

At a time of widespread movements calling for “democratization” and increased participation in parties and trade unions, wider participation and action on a European level did not seem to have attracted much activist engagement. It could be added that, even with such engagement, policies such as nationalizations in the UK and wage-earner funds in Sweden still suffered badly, not only from the leadership skepticism that Andry notes, but also from a general indifference on the part of the majority of trade union members and left voters.

Alternative Europe

A common exception to this picture of activist disengagement concerned participation in the European integration process itself. The importance of the basic question of European integration, rather than the kind of European integration that could be constructed, is evident in the experience of two leading members of the “Alternative Europe Network” of economists that pushed for planning and capital controls on a European level: Stuart Holland and Delors.

In his introduction to the 1978 book Beyond Capitalist Planning, Holland expressed a theme whose undercurrents can be found in much of Andry’s account, arguing that the new projects for a break with existing capitalist logic transcended the traditionally understood “moderate” and “radical” divides within the European left. But Holland’s own personal experience points to the limits that efforts to transcend such a divide came up against, and the related contradictions that emerged while attempting to put these alternative policies into practice.

Holland’s ideas for a National Enterprise Board and planning agreements were embraced by the Labour left as the basis for its economic program in the early 1970s. In the process, they were rejected with growing vociferousness by Holland’s former allies on the Labour right. This was at a time when “Europe” was becoming the defining marker of division between left and right in the Labour Party.

Andry suggests that the Labour left was “not as single-minded on nationalist strategy to exit the crisis as the literature usually depicts,” and points to the example of Holland. But Holland became effectively marginalized from the most influential elements of the Labour left, in part because of his European focus.

The Labour left’s economic strategy also changed quietly but significantly in much of its emphasis in the second half of the 1970s. While Holland’s ideas remained part of this left program, which was generally summarized under the rubric of the Alternative Economic Strategy (AES), the AES proper that developed after 1975 was often treated, by opponents and supporters alike, as being synonymous with the unilateralist solution of import controls.

While the extent of anti-EC sentiment was particularly strong in the British Labour Party, this kind of unilateralist national approach was also a recurring feature of left politics elsewhere. The radical and activist response to domination of the European agenda by elite moderates was rarely expressed in pressure for greater participation in and democratization of that process, but rather in a rejection of the European project as a whole. There was normally only a very vague sense, if any, of alternative versions of international cooperation.

The Delors Project

On the other hand, the trajectory of Delors himself points to the perils of the opposite approach, which focused on European-level cooperation. It also suggests that, while the supporters of the anti-EC left may have often run into a dead end when it came to their practical politics, they still had a point in what they were saying.

Delors might have preferred to see a more “social” element in the Social Europe that developed during the 1980s and 1990s. Yet he was also willing to embrace the “alibi” version that accompanied intense market integration and removal of national-level autonomy through the Single Market and EMU.

While Andry’s distinction between the meanings of Social Europe in the long 1970s and after 1983 is instructive, the case of Delors points to its limits. As a leading proponent of a genuine Social Europe in the 1970s, who went on to become the leading architect of the bogus Social Europe that emerged afterward, he exhibited significant consistency in his views, with a belief in forms of planning and social partnership coupled with fears of inflation and state power.

There are also other hints of the use of Social Europe as a domestic alibi in this period. For example, Andry notes that the role of the German Social Democrats in launching new discussions on a Social Europe in the early 1970s was in part an attempt to compensate for their de-radicalization in other areas.

Even if the “window of opportunity” for a more profound Social Europe had been grasped in the 1970s, how different would it have turned out to be, in view of these continuities and the many contextual changes that it was still likely to have faced in its ongoing construction from the 1980s?

A Contemporary Debate

While Andry’s book is a revival of radical, forgotten ideas from the past, the language and policies will sound familiar to anyone following contemporary European debates. There are obviously some exceptions to that rule, such as a 1975 report by Socialist MEPs that cited the Yugoslav system of workers’ self-management as a model for transitioning to a “classless society.” This certainly invokes quite a different political era, as does the idea of a president of the European Commission openly calling for a break with capitalism.

However, even calls for “planning,” which felt quite far away a few years ago, no longer do. Many of the policies listed by Andry from various documents would fit well in a 2023 document from the ETUC or the Party of European Socialists. The same can also be said for the flaws in left politics on a European level: an elite-driven process that deliberately marginalizes grassroots engagement, insulated by disinterest on a national level, and disunity on the question of “Europe itself.”

Andry’s larger point is not so much that the policies have changed but that the context has: the alignment of political forces that provided this “window of opportunity” is no longer there. This is certainly true in many respects. Labor movements and left parties are generally weaker, and new geopolitical tensions do not carry the same ideological dimensions as the Cold War.

On the other hand, the challenge of climate change has presented a new imperative and basis of mobilization for international coordination and planning. Political and civil society organization is now more institutionalized on a European level, and the very process of capitalist integration driven by the European project since the 1980s has made the European dimension harder to avoid.

The notion that political union in Europe would inexorably follow if the path was set by economic integration was either naive or cynical — and in any case reckless. But given that the EMU continues to exist, the dynamic of a political union, though far from inevitable, is an ever clearer necessity and possibility.