THE POST-WAR YEARS
After 1945 West European socialists, while remaining formally committed to socialism as an “end state”, that is a society where wealth would be held in common, turned to a conception of socialism “as a process”—the position which had been advanced by Eduard Bernstein at the end of the 19th century. In practice, this meant that, while their most committed supporters held on to the idea of a final goal, socialist parties, now frequently in government, concentrated on social and economic reforms under capitalism. Though these varied from country to country, socialist reforms included, first of all, the introduction of a comprehensive welfare system which, in the formulation borrowed from the British liberal reformer William Beveridge, would protect all citizens “from the cradle to the grave”, and secondly, the attainment of full employment using techniques of macroeconomic management developed by another radical liberal, John Maynard Keynes.
In Britain these reforms were the main achievements credited to the first post-war Labour governments (1945-1951) led by Clement Attlee. Their most significant and popular policy was the creation of the National Health Service, funded out of taxation. Elsewhere in Europe, socialists, thanks to their enhanced electoral weight, achieved some of their aims either by being in government with other parties or by being able to put effective pressure on centrist governments. It is mainly after 1945 that socialism became associated with the management of the economy by the State and with the expansion of the public sector through nationalization. While socialist activists envisaged state ownership as a first step towards the abolition of capitalism, in general, nationalizations had more practical aims, such as rescuing weak or inefficient capitalist enterprises, protecting employment, improving working conditions, or controlling public utilities. While nationalizations have been commonly associated with socialism, they were often resorted to by governments led by non-socialist parties, such as in France (1945-1947), Austria (1945-1947), and Italy (1945-1947 and in the 1960s). Conversely, a successful socialist government like the Swedish Social Democratic Labour Party (1932-1976, 1982-1991, 1994- ) did not extend state ownership and opted instead for controlling the labour market and maintaining full employment while providing a system of “fair wages” known as the “solidaristic wage policy”. This consisted in having the trade unions and the employers jointly determining what a fair wage might be in a range of occupations. Firms unable to pay such wages would have to improve their efficiency or go out of business. The resulting unemployment would be rapidly absorbed by well-run training schemes. Clearly, abolishing capitalism was no longer regarded by Swedish socialists as a realistic aim. They preferred to concentrate on a regulation of capitalism to meet working-class needs as represented by the trade unions. Such a policy, at least until the 1980s, far from weakening Swedish capitalism, appeared to strengthen it. Sweden for long remained one of the richest and least unequal societies in the Western world.
Outside the Scandinavian countries, the 1950s turned out to be difficult years for European socialists. They were out of power almost everywhere. In Eastern Europe they were banned by communist regimes, and in Portugal and Spain by right-wing dictatorships. In Britain the Conservative Party was in power for 13 consecutive years following Labour’s 1951 electoral defeat. In Italy and Germany, Christian Democracy dominated the political scene, while in France Charles de Gaulle and his conservative supporters were the beneficiaries of the political crisis caused by the Algerian War of Independence; having taken power in 1958 the Gaullists held on to it until 1981.
The remarkable expansion of capitalism during the 1950s and 1960s put an end to the assumption that under capitalism the working class would be constantly impoverished or that the economy would stagnate. West European socialist parties began to discard Marxism openly (something they had already done in practice), accepted the mixed economy, loosened their links with the trade unions, and abandoned the idea of an ever expanding nationalized sector. While a significant percentage of the working class continued to vote for the parties of the centre and of the right, socialist parties increasingly sought to attract middle-class centrist voters. To do so they discarded many of the symbols and rhetoric of their past, such as the red flag or the designation of members as comrades, which they shared, embarrassingly, with communists. This late 1950s revisionism proclaimed the new goals of socialism to be wealth redistribution according to principles of social justice and equality. Ideas such as these were popularized in Britain by Anthony Crosland (The Future of Socialism, 1956) and enshrined by the German SPD in their Bad Godesberg programme of 1959. All social democrats assumed that continuous economic growth would sustain a thriving public sector, assure full employment, and fund a burgeoning welfare state. These assumptions were often shared by Conservative and Christian Democratic parties, and they corresponded so closely to the actual development of European societies that the period between 1945 and 1973 has sometimes been referred to as the era of “social democratic consensus”. Significantly, it coincided with a golden age of capitalism. The wealth generated by economic growth funded the welfare state. Not only was the development of capitalism not incompatible with the reforms advocated by socialists, but it seemed to make such reforms possible. Communist countries, at least in the 1950s, grew rapidly too, but their growth was mainly quantitative: the quality of consumer goods they produced was always inferior to those of advanced capitalist societies.
By the 1960s the socialists began to return to power. The victory of the Labour Party in Britain under Harold Wilson in the 1964 elections brought to an end 13 years of conservative rule. In the following six years, Wilson’s government attempted, not always successfully, to establish some kind of management of the economy in cooperation with the trade unions and the employers. Of greater long-term significance was civil liberties legislation: capital punishment was abolished, homosexuality and abortion were legalized, and laws against discrimination on ground of race and gender were promulgated.
In West Germany, the SPD returned to power in 1966, and, first with Willy Brandt, later with Helmut Schmidt, ruled for 15 years, at first in coalition with the Christian Democrats, then, after 1969, with the Liberals. They concentrated on economic development and new forms of industrial democracy, known as Mitbestimmung or co-determination. They also initiated a policy of rapprochement with East Germany and the Soviet Union known as Ostpolitik.