Why Social Democracy Is Failing Europe

Alasdair Macleod 
The Mises Institute

There is a certain tension in the phrase, “social democracy,” and the description of someone as a social democrat. Social in this context is socialism by the state. A democrat supports the freedom for individual electors to express and defend personal interests in regular plebiscites. The two positions are incompatible.

At this point we should note that in economic terms there is little philosophical difference between European socialism and communism. Both seek to relieve capitalists of the means of production in favor of the state, either by ownership or control. Marx himself saw socialism as a temporary phase on the way to full communism. However, we all know from experience that communism fails by impoverishing everyone except a coterie of leaders. The same problem of the state’s inability to calculate prices, other than with reference to labor costs, and to foresee what consumers require on the morrow bedevils both socialism and communism. The principal difference between the two is the speed at which economic disintegration takes place, tied to the rate at which the socializing state removes personal freedoms and destroys wealth.

Social democrats assume that moderate socialism does not lead to those outcomes, which is a mistake1. They are deceived.

With social democracy we observe committed socialists and communists using democracy as the pathway towards increasing socialism and eventual communism. But there’s a problem, which in time becomes increasingly obvious to the electorate. Electors become poorer over time, and the more progressive among them seek to escape in order to participate in more capitalistic economies. Lenin and Mao Zedong dealt with this tendency by suppressing all freedom of expression and they redefined democracy to permit only the election of communist officials. Intellectuals, always the first to express discontent, were liquidated or sent to the Soviet gulags and China’s penal labor camps. 

In Western Europe a different, more patient approach was needed for the communist revolution. And this is where the concept of the social democrat springs from. 

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What Separatism Means

Lew Rockwell

Ivan Daraktchiev sent me several of his papers in appreciation of my work which he views as expressing many ideas similar to his. There’s good thinking and insights in his work. Naturally, one may not agree with all of his ideas. There are ideas of my own that I’ve expressed over the years that I may now disagree with.

The strength of his analysis is to take a broad view across many countries in order to understand events. Having lived through Communism in Bulgaria before leaving for Belgium, he is familiar with the devastation caused by a bureaucratic class of parasites, the nomenklatura, that destroys a society, both morally and economically. This idea aligns with the Austrian analysis. After years in Belgium, he realized that the EU was similar to the Communist system in being taken over by a nomenklatura. In fact, many western democracies are in the same position. He calls this parasitic and destructive political system “nomenklaturocracy” and says Orwell was right about it. So have been Mises and Rothbard and Rockwell and many others in the intellectual movement toward freedom, better societies and better political arrangements.

With this idea in mind, that all governments are controlled by ruling classes that attempt to insulate themselves from their subjects, the differences between communism, fascism, and representative democracy become only matters of degree. Lengthy disputes between democrats and republicans become trivial. Notions that a republic will outdo a democracy become off target since both involve constitutions and representatives, and these lead to party control and nomenklaturae. The key question is always the extent to which a nomenklatura has turned government into a nomenklaturoracy. The key question is the extent to which a government has been captured by those in the government so that the people have lost control of it.

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