In the fall of 1991, a Democratic presidential candidate I was covering as he campaigned across New Hampshire had a line in his speeches that surprised me. He commended to his listeners something called the “Swedish active labor market” — a program, established by Sweden’s Social Democrats as part of their full-employment policy, that trained unemployed workers at the government’s expense and linked them up with available jobs.
That candidate was Bill Clinton.
On Tuesday night, I was forcefully reminded of the then-Arkansas governor’s unanticipated endorsement of Scandinavian democratic socialist policy by former secretary of state Hillary Clinton’s takedown of Sen. Bernie Sanders’s (I-Vt.) invocation of Denmark as a model for progressive change in the United States. My point isn’t that Bill Clinton was a socialist in liberal garb; his support for increasing the size and clout of the financial sector is proof positive that he wasn’t. It’s that the relationship between the European social democracy that Sanders extols and the American progressivism that Hillary Clinton champions is complicated and at times symbiotic, with clear areas of overlap and difference.
The social democracies of Northern Europe have higher and more progressive tax rates than we do, which fund a far greater range of social benefits than we do as well. U.S. liberals also favor more progressive taxation and greater social benefits (paid sick days, expanded health coverage). To the extent that this is not just a quantitative but a qualitative distinction, it’s because the European social democratic belief in citizens’ rights extends deeper into the economic realm — particularly the workplace — than American liberalism’s does.
The great irony of Northern European social democracy is that it has produced perhaps the world’s most successful capitalist economies. The Swedish full-employment policy that so intrigued Bill Clinton, for instance, made workers confident that they could get jobs with at least comparable pay if their companies failed, thereby eliminating popular resistance to shuttering moribund industries and incubating new ones. The German economy — by any measure the most successful of any advanced capitalist nation over the past decade — confers on employees considerable say in company policy by giving their representatives half the seats on corporate boards. It is also home to the world’s most successful small and medium-size businesses, the Mittelstand, the kind of small manufacturers whose numbers have diminished in the United States as Wall Street has pressured our big retailers and manufacturers to offshore their suppliers.
The crucial distinction between Europe’s social democrats and the Democratic Party in the United States is that the former have institutionalized worker power to a far greater degree than have our Democrats, who are quintessentially a party of both capital and labor. This has mattered most particularly in the post-1970 era of globalization. While the major corporations of all Western nations have gone global, those in Northern Europe have, as a result of the power that workers wield, retained the best jobs in their home nations and still identify themselves with their home countries. The vast majority of U.S. corporations, by contrast, identify themselves as global, seem content to offshore jobs and don’t invest much, if anything, in training workers for highly skilled jobs here. That’s not because U.S. corporate chief executives are less patriotic than their European counterparts, but because social democratic parties have vested workers with the power to constrain corporate conduct, and crafted policies that favor their home nations’ economies through, for instance, increased public investment. They have limited the size and sway of finance, whose demand for profits accords no special status to the notion of a “home country.”
All that said, both Sanders and Hillary Clinton favor extending Americans’ economic rights, as their support for policies such as paid family leave makes clear. Both favor economies with vibrant small businesses, which Sanders helped incubate when he was mayor of Burlington, Vt., and which is entirely consistent with social democratic theory and practice. Both favor constraining the economic and political power of banks, though Sanders clearly more so.
The difference — the socialist difference, if you will — is that Sanders understands the inherent threat that Wall Street poses to the U.S. economy, and that bolstering worker power and rights has to become the Democrats’ defining mission in good times and bad. He also understands that the kind of movement his campaign is building is essential to realizing not just his “revolutionary” agenda, but Clinton’s “progressive” agenda as well. The great bursts of progressive reform in the 1930s and 1960s were the joint product of liberal presidents and turmoil in the streets — general strikes in the ’30s, civil rights protests in the ’60s. In the United States, liberalism advances only when radicalism is bubbling, which is why Clinton and Sanders need each other, and why the Democrats need them both.