Vaclav Klaus admits defeat

Vaclav Klaus is the living embodiment of the idea that the collapse of Communism entails the final victory of capitalism over socialism. A close friend of the more famous Czech democrat Vaclav Havel, he became Finance Minister, and then Prime Minister in the first post-Communist government in the then Czechoslovakia. Unlike many dissidents in the former Soviet Empire, he rejected any idea of a ‘Third Way’ arguing for a free-market society modelled on the United States, but without the historical compromises of the New Deal.
in 1991 he visited Australia and gave a talk to the Centre for Independent Studies entitled ‘Dismantling Socialism: A Preliminary Report”, in which he set out the progress that was being made in the move towards free-market capitalism.
Ten years later, Klaus has accumulated much of the standard baggage of a political career, including accusations of financial improprietyand some distasteful compromises with the anti-immigration right. His friendship with Havel is very much a thing of the past. Having seen an expected election victory slip out of his hands earlier this year, he is currently the leading opponent of the social-democratic government of the Czech republic.
More interesting than his political career are his thoughts a decade on, given to the CIS in 2001 under the title Dismantling Socialism: An Interim Report. To summarise drastically, he concludes that, while Communism is dead, socialism (or more precisely, social democracy) has actually gained ground over the past decade. The Czech Republic and other East European countries are on the verge of joining the European Union. As Klaus observes, the commitments involved in the EU ‘acquis communitaire’ amount, for all practical purposes, to a constitutional guarantee of social democracy. (Both Ken Parish
and Josef Imrich link to another Klaus piecetaking much the same line.)

This is a good time for me to insert my long-promised discussion of the definition of social democracy and of socialism, and to explain why I now call myself a social democrat rather than a socialist. Social democracy is a fairly well-defined social order. Although it has no perfect exemplar, it has been realised, more or less, in most European countries, to a lesser extent, in Britain and its former colonies and, in to a much lesser degree in the United States. It is a social and economic system which includes a mixed economy with both public and private enterprises and an acceptance that society has a whole has a responsibility for protecting its members against the standard risks of the modern lifecourse (illness, unemployment, old age and so on) and for providing everyone with equal opportunities to develop their potential to the maximum extent possible. An immediate implication is that, while absolute equality of incomes is not necessary, inequality should not be permitted to reach the point where some citizens have massively more power than others, and where their children have a big headstart over other children.

While social democracy was advancing steadily (that is, from about 1945 to 1970), socialism could be seen simply as social democracy without the compromises – no big private enterprises, no inequality and so on. And, if you were prepared to put on the appropriate blinkers, the Soviet Union and its satellites could be seen as an embodiment of socialist economics, marred by undemocratic and therefore anti-socialist, politics.

Social democracy has been on the defensive from 1970 until very recently, and the Soviet empire has collapsed entirely. In these circumstances, the definitions of socialism that were prevalent a few decades ago are no longer relevant. What is left is a much older, 19th century aspiration (modified in the light of feminism), the ideal of a society based on the premise “from each according to their ability, to each according to their needs”. This is still an inspiring ideal, but not, at present, the basis for a political program.

The current political struggle, therefore, is between social democracy and neoliberal capitalism. From the crisis of Keynesian social democracy in the early 1970s until the financial crises of the late 1990s, neoliberalism was gaining ground fairly steadily. But the neoliberal program has failed in New Zealand, the United Kingdom, Eastern Europe and, most recently, in its heartland, the United States. Vaclav Klaus is right to despair.