If nothing else, New Labour's landslide victory last May has brought into sharp focus the crucial issue of the crisis and retreat of social democracy. The retreat of social democracy has been gathering pace for several years now; and it is a phenomenon which is not merely confined to Britain but one that has world-wide significance. Yet although this retreat of social democracy is profoundly altering the terrain of class struggle, opening up new dangers and possibilities, it is an issue that has not been adequately addressed by revolutionaries. Instead it has remained an issue that has haunted both our practical and theoretical political activity. It used to be a major revolutionary task to oppose the left's role of recuperating working class struggle into social democratic channels. Now that capital has itself undermined the credibility of such 'leftist' manoeuvres - what does this mean for us?

In the next edition of Aufheben we plan to confront this central issue of our time. We shall begin by exploring the historical context of the rise and fall of social democracy both in Britain and elsewhere and consider how this has given rise to Tony Blair's New Labour. We shall then consider the prospects of New Labour and the implications of the decline of social democracy for the future of class struggle both here and abroad. However, lest our readers become a little restive at waiting for our thoughts on this pressing matter we shall make a few preliminary remarks here which will serve to sketch out the outlines of our forthcoming analysis.

Of course, of all the major capitalist powers it is perhaps the USA where 'neo-liberalism' has gone the furthest. The dismantling of the welfare state, the criminalization of the poor and unemployed, declining real wages and the introduction of flexible labour regimes have all accelerated in Clinton's America. Yet social democracy, particularly its political expression, was never as strong in the USA as it was Europe. In Europe it is Britain, after twenty years of Thatcherism, that has gone the furthest in emulating the USA, and it is in Britain where we can see the crisis and retreat of social democracy most clearly with the victory of Tony Blair.

Tony Blair, and his fellow so called modernizers, have made no secret of the fact that they want to consign social democracy, which they designate as ëOld Labourí, to the past. Having already jettisoned Clause Four of Old Labour's constitution, distanced himself from the trade unions and re-positioned the Labour Party to the right of the Liberal Democrats, Tony Blair has gone a long way in transforming the Labour Party into a new Liberal Party, restoring the old bourgeois division of British politics before the rise of Labour Party, and with it the political representation of the working class, at the beginning of this century.

Now, having won such a convincing election victory, the way seems open for Tony Blair to completely marginalize the last remnants of social democracy within the Labour Party. As such Tony Blair is completing one of Thatcher's great aims, the eradication of 'socialism' from the mainstream of British politics. Indeed, in many respects Tony Blair is Thatcher's true heir, as he himself readily admits when he expresses his admiration for her. To understand New Labour and the decline of social democracy in Britain it is necessary to consider the rise of Thatcherism.

Compared with much of mainland Europe, Britain escaped much of the devastation caused by the Second World War. This, combined with Britain's continued legacy from her imperial past, meant there was neither the opportunity nor incentive for British capital to radically refashion the social relations of production. In the post-war era Britain never fully adopted Fordism. Instead British industrial capital remained content to maintain outdated production methods and working practices. Thus, whereas Germany, France and Italy all experienced rapid economic growth and transformation during the 1950s and ë60s, Britain continued its long term relative economic decline.

As a consequence, British capital was ill-placed to weather the upsurge in class struggle and the crisis in capital accumulation which broke out in the late 1960s. By the late 1970s the British ruling class faced a dire situation. Following the miners' strike of 1974, which had brought down the Heath government, there were increasing fears that it would not be long before the government would be unable to govern, and management unable to manage, in the face of the 'sheer bloodymindness' of the working class. It was as a last desperate attempt to resolve this growing political and economic crisis in the favour of British capital that Thatcherism took shape.

Social democracy, as the political and economic representation and integration of labour within capital and the bourgeois state, had played a central role in the construction of the post-war settlement. Social democracy provided the basis of the class compromise, established through the post-war settlement, in which the working class gave up all hope of revolution in return for improved housing, health care, the welfare state, and above all a commitment to full employment. However, while the post-war settlement had provided the relative social peace that served as the basis for the post-war economic boom, with the onset of the crisis of capital accumulation and the upsurge of class struggle in the 1960s, it had become an increasing burden on the capitalist class and served to strengthen the hand of the working class.

Armed with monetarism, Thatcher set out to radically reshape the post-war settlement in favour of capital. To do this she not only sought to attack and marginalize social democracy but also the social democratic consensus through which the post-war settlement had been constructed. Through mass unemployment, a succession of anti-strike laws and carefully staged industrial disputes, Thatcher not only succeeded in inflicting serious defeats on the working class but also broke the power of the trade unions as mediators in the sale of labour-power. Yet in order to carry out this barely disguised class war Thatcher had also to overcome the reluctance of those fainthearts in her own camp who still clung to the certainties of the old class compromise. As a result, Thatcher's rule was marked not only by confrontation but also by the increasing concentration of political power.

Ironically Thatcher's success can be seen to be rooted in the previous success of social democracy. During the post-war era, social democracy had succeeded in demobilizing large sections of the working class but in doing so had come to undermine its very own basis. Thatcher was able to exploit the gap between the aspirations of individual working class people and their collective representation. While she launched uncompromising attacks on the bastions of trade union militancy, wages for the majority of workers were allowed to outstrip inflation. Collective action was everywhere punished while individualism was encouraged.

Yet Thatcher's populism, which was centred around the illusion of the 'property and share-owning democracy' in which everyone could feel that they were a capitalist, could not last long beyond the late 80s economic boom. Thatcher's refusal to take heed of warnings from outside her by now narrow circle of advisers ultimately led to her downfall with the mass revolt against the poll tax. In succeeding Thatcher, John Major sought to press on with Thatcherism but with a different presentation. However, despite weathering the depths of early 90s recession, Major's weak leadership eventually left him unable to cope with the growing splits in the Tory Party as the Thatcherite project became exhausted.

The recession of the early 1990s, and, until recently, the subsequent jobless boom which seemed to benefit no one other than the fat cats of the privatized utilities and the city speculators, brought home the bitter fruits of Thatcherism. With job insecurity reaching the very heart of the middle classes there came a growing disillusionment with the Tory policies of social division and crass individualism. It was through mobilizing this widespread disillusionment with the Tories that Blair was able to win his landslide victory.

As the first months of the new government has confirmed, New Labour is committed to maintaining much of the Conservative economic and authoritarian social policies of the previous government. However, Blair is seeking to build a new social consensus around the de facto class compromise established after Thatcher. Thus instead of pushing through reforms with little regard to any opposition, New Labour seeks consultation. Instead of concentrating power in order to push through unpopular measures, New Labour is concerned with devolving power, as we can see in their plans for radical constitutional reform. Blair then, in consolidating the Thatcher revolution, is the true heir to Thatcher.

So what are the prospects for New Labour: and what are the prospects for social democracy? The continuing success of Blair's government depends crucially on relative social peace and economic prosperity. Of course, it could be argued that the crisis of capitalism which broke in the late 1960s with the upsurge in working class struggle, and which led to the radical restructuring of capital in the subsequent decades, has been more or less resolved. The working class has everywhere been beaten back, while the huge imbalances caused by the restructuring of capital which emerged in the 1980s in the form of both the huge US budget and trade deficits and in an enormous overhang of Third World debt, have been unwound. If this is the case, Blairism would seem to fit the needs of the bourgeoisie in this period of social and economic quietude. However, even if the world-wide crisis of capitalism has been resolved for the time being, this does not mean that the long-term relative decline in British capitalism has been arrested.

And what of social democracy? If social democracy ceases to exist will it be re-invented again? And how are we to relate to the decline and possible resurgence of social democracy? For our answers to these and related questions you will have to wait until the next issue!

Notes