justin_reynoldsWhat actually is ‘socialism’? Or ‘social democracy’? Justin Reynolds of Edinburgh Central CLP argues that the original meanings of these terms are somewhat different from how they are often used today.


The Scottish Labour leadership election, as ever, has generated a confusion of terms to describe the respective political positions of the candidates.

They have been variously labeled as social democrats or socialists, as being on the left, the centre, or the right, as Blairites, Brownites or Bennites: the range of possible tags grows with each new election.

The picture is further obscured by the differing interpretations that can be associated with each term. I thought it might be interesting to consider – briefly – the meanings of two of the labels that come up most often: ’socialist’ and ‘social democrat’. By doing so I suggest we will find that they are often used to refer to political perspectives quite different from those that the terms originally described.

The terms ‘socialist’ and ‘social democracy’ are often used to signify two points on the same political continuum, two different staging posts along the same road to some progressive future. Social democracy is thought of as a kinder, gentler capitalism, and socialism as a more emphatic, turbo-charged version of social democracy. The difference is one of intensity, not kind. So for example socialists might want to tax, spend and regulate somewhat more than social democrats, but at the end of the day both are travelling towards the same nebulous destination evoked by suitably flexible words such as equality, fairness and social justice.

But in fact social democracy and socialism are distinct political philosophies with quite different visions as to how the good society should be organised. There are of course important respects in which they overlap, and their respective proponents will be able to reach agreement on many concrete policies. But they will see those policies as means to different ultimate ends

Understanding precisely what we mean when we use terms like socialism and social democracy is helpful, I think, to allow us to appreciate precisely why members of broad political churches such as the Labour Party can find themselves disagreeing with each other so often, and so strongly. Intense disagreements over seemingly fine points of policy can often be traced to differing understandings of what those policies are working towards, the differing visions of the good life by which they are inspired.

Social democracy

Social democracy was the most successful political philosophy of the last century, delivering stability and prosperity for a Europe torn apart by two world wars. In recent decades that social democratic settlement has been pressurised by the economic forces of globalisation and the political forces of a resurgent market fundamentalism, but many of world’s most prosperous and stable nations are still governed according to its principles.

Despite that success there’s still confusion as to what exactly social democracy is. It is often defined negatively, in terms of what it is not, as a negotiated response to other, more assertive ideologies: a kind of genteel Marxism, or neoliberalism with a cheerful smile.

And that is partially true: social democracy emerged around the turn of the 19th and 20th centuries as one of several competing political responses to the social dislocation caused by the unfettered capitalism that had generated rapid industrialisation.

One response, liberalism, was generally uncritical: the creative destruction of the market was to be celebrated for its wealth-creating capacity, and the unequal distribution of that wealth tolerated for the sake of increased aggregate prosperity. The state’s role was to maintain conditions in which the market could flourish. In stark contrast, the revolutionary left could brook no accommodation with capitalism, which could only generate wealth by alienating workers and breaking communities. A third response, fascism, shared the left’s concerns about the market’s social consequences, but wanted to control rather than overthrow capitalism through the agency of a powerful autocratic state that would marshall economic forces in the national interest.

Social democracy sought to build on elements from each of these traditions. Its founders acknowledged the market’s capacity for both creation and destruction, and like the National Socialists argued for its management through the agency of a strong state: curiously, there is a sense in which fascism might be considered social democracy’s dark twin. But – crucially – the social democrats insisted that the state should be democratically accountable. It is this belief in the primacy of the life of the community over the demands of capital, and faith in the power of a democratic state to make the market work for the common good, that together constitute the defining characteristics of social democracy.

Social democracy went on to dominate post-war European politics, evolving a sophisticated set of tools for negotiating a stable settlement between what had previously seemed incompatible forces: the state, the market, and society. Keynesian economics was one such tool: by providing fiscal and monetary levers for the stabilisation of economic cycles it allowed the state to reconcile private ownership of the means of production with democratic management of the economy. Comprehensive welfare provision was another, the universal provision of education, health and social security offering protection from the ebbs and flows of the market, and cementing the community’s collective sense of itself.

The ongoing globalisation of the world economy continues to threaten these achievements. It has become ever harder to achieve ‘social democracy in one country’, as it were: highly mobile multinational capital can more easily evade regulation and taxation, and open labour markets are undermining the sense of common identity necessary to sustain faith in universal welfare provision. Social democrats today face the challenge of applying the principle of democratic economic management at a global rather than national level, through the democratisation of institutions such as the EU, the IMF, and the World Bank. And culturally diverse communities need to be bound together through appeal to common values rather than ethnic identity.

But as was vividly illustrated by the Scottish independence debate, and – at least in regard to concerns over social cohesion – the rise of UKIP, social democracy’s idea of the good society remains popular: one in which the wealth generated by the market can be enjoyed without its undue encroachment upon the community, and all those dimensions of life that should remain beyond its reach, such as civic engagement, the enjoyment of family, leisure and the arts.


If all of that sounds somewhat like what like ‘socialism’, it’s because the use of the word has changed to signify something other what it originally meant. Socialism, at least according to its classical 19th century formulation, isn’t a revved-up version of social democracy entailing a bit more public ownership, spending and taxation, but an altogether different understanding of how our economic, political and social life should be ordered.

In brief, socialists believe there can be no accommodation with capitalism of the kind accepted by social democracy. Socialists do agree with social democrats as regards capitalism’s inherent dynamism: Marx himself was fulsome in his praise of its capacity to generate economic growth, a capacity which through its development of a technologically sophisticated economy had laid the material foundations for a prosperous post-capitalist commonwealth. But for socialists the capitalist system itself can never be a component of the good society because of its prioritisation of commercial over human values. By organising people into two classes – those who own the means of production and those who must sell their labour to survive – the system necessarily fosters inequality and alienation: the economic lives of the majority are directed by a minority who benefit disproportionately from what is produced. Disenchanted workers seek consolation through consumerism, leaving them, as Marx put it, as ‘apathetic, thoughtless, more or less well-fed instruments of production.’

Socialism’s ultimate objective is the destabilisation and gradual transformation of capitalism to a communitarian economy that operates according to a different logic, one that places human need over profit. This post-capitalist system would have three mutually reinforcing characteristics:

First, the means of production must be socially rather than privately owned. This is a pre-condition for the reorientation of the economy towards communal rather than commercial ends. Second, each enterprise within the new economy must be reconceived as a cooperative rather than commercial venture, managed by its workforce through participative, democratic decision-making processes. The removal of the ‘trained caste’ of managers allows workers to direct their own labour, and resolves the separation of head and hand characteristic of work in the capitalist firm. Third, this network of self-governing but interdependent cooperatives should be tightly woven to ensure their collective production is directed towards the common good rather than the private interest of each economic actor.

It all sounds rather utopian. But for socialists the incremental transition towards a cooperative economy is no more or and no less than a logical extension of the democratic principle from the realm of politics to that of economics: the enfranchisement of those who previously had no say in the organisation of the community’s economic life.

Socialism, then, aspires towards a society quite different from that of any social democracy, and, it should be noted, those of the monolithic communist states of the 20th century. The ideal is a radically participative democracy, encompassing the realms of both economics and politics, with power flowing upwards rather than downwards. It rejects both the Soviet-style command model, and social democracy’s acceptance of capitalism. In the eyes of socialists both deny the great majority of people democratic control over the economic forces that would otherwise govern their lives.

Two horizons

So, two distinct political philosophies then, with differing visions of how society should be organised. If the socialist ideal stirs the soul, holding out the prospect of a ‘world to win’ worth fighting for, you are a socialist. If social democracy seems be a more realisable, and/or indeed inherently more attractive aspiration, with its faith in the capacity of politics to direct the energy of the market for the benefit of all, then you are a social democrat.

According to these definitions today’s Labour Party can only be plausibly described as social democratic. The rewriting of Clause IV was fundamental in this regard, the original being as clear a socialist blueprint as one might hope to find, with its aim to ‘secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.’

How much of this matters? In the short – or indeed medium – term, not much, I think. Today’s globalised world, with its powerful neoliberal elites, makes it tough to push through even mild social democratic reform. In working together to try to assert some form of democratic control over the market social democrats and socialists can agree on many immediate priorities, most pressingly, perhaps, the simple rehabilitation of the core social democratic principles of state-led economic intervention and provision of universal social insurance.

With much work to be done even to win those fundamental battles, one might well consider all this philosophising an abstract, theological matter: if Labour is going to continue – quite rightly – to be a broad church open to both social democrats and socialists, it is essential that all members work together to develop practical policies capable of moving Scotland and the UK in a progressive direction.

But it is helpful, I think, to understand and acknowledge that the deeper motivations fellow members might have for pursuing those policies may differ. We can all work together, yes, but it helps to be aware not everyone has their eyes set on the same horizon.