Social Democrats must set their sights on both the past and the future. We are the heirs of a movement with a noble history: a history of fighting for freedom, justice, peace and solidarity.
In May this year we celebrated the 140th anniversary of the German Social Democratic Party.
The party has survived repression to become the leading political force of our country. It has grown from being an association for the liberation of the working class to become a modern party addressing the ambitions of those who rally behind our goals of equal opportunity, solidarity and participation for all.
But our story must not end here. A social democracy that spent its time reminiscing about the past would, at best, be a glorious memory. At worst, it would become a reactionary force.
If we fail to develop an agenda that meets today’s realities, we will prove right all those who have already proclaimed the end of the social democratic century.
Globalisation is not an option; it is a reality. It holds risks and creates anxieties, but it also opens up opportunities.
If we fail to modernise ourselves, if we fail to build modern ”social market economies”, then uncontrolled market forces will modernise us, and freedom will be reduced to a luxury enjoyed by the few.
In Germany, as in some other European countries, our systems of social security were built on an industrial society and full employment. Pension funds, health care and unemployment insurance are all based on the contributions of a large workforce; income from those transfers was seen as ”getting your money back” through a circle of contracts — between the young and the elderly, the working and the unemployed, the healthy and those in need of medical care.
An ageing society, new forms of employment and a slowdown in economic growth have all pushed the cost of labour to new heights. Budget constraints urgently require a limitation of consumption expenditure in favour of investment in infrastructure, education and innovation.
If we want to generate growth and jobs, we must lower those costs that eat into take-home pay.
Financial constraints are not the only driving force behind our reform programme. The reform of the welfare state is also a precondition for the success of future generations. Tomorrow, everyone will need to contribute to her or his full capacity, for there is no other way to create a good society.
In the past, the main topic of welfare politics was the redistribution of wealth.
First, we must remember that wealth can be redistributed only once it has been generated.
Second, we should note that redistribution has limits, beyond which mere monetary transfers encourage dependence.
Third, elaborate systems of redistribution tend to produce side effects in opposition to the desired results. For instance, long-term unemployment allowances for the elderly invite employers to lay off elderly workers.
Ferdinand Lassale, an important early social democrat, coined the phrase: ”All political action begins with speaking the truth.”
Today, one of our challenges is to accept the reality of globalisation, the ”digitalisation” of our economy and demographic change in an ageing society. Unless we accept these realities and assess their impact on our welfare systems, we are gambling with our future.
Pension funds compelling the young to contribute without any hope of ever being paid back an equivalent do not promote social justice. The same is true of a system of health care financed only through high labour costs.
Reducing state expenditure by encouraging private contributions is not a deviation from the principles of the welfare state. On the contrary: it indicates the path of a modern welfare system that social democrats should endorse.
There is something else our leftist critics should bear in mind: we must not only create and preserve social justice for those living and working today, but also consider future generations.
Faced with changing our means to social justice — not, I repeat, our principles — we know the future has more rights than the past. We must resist those who hold that the welfare state, and workers’ and trade union rights, are the source of all evil, but our resistance to these neo-liberals will be all the more successful if we tackle the task of restructuring the welfare state in order to modernise it and put it on new, more solid foundations.
Globalisation and the changes it engenders do not wash over us in the way natural phenomena do. It is up to us to address the risks of insecurity, inequality and unfair access to opportunities, and to promote social democratic answers.
We must avoid all narrow approaches. We must work not just to promote free trade, but also to enable people to participate fairly.
The same is true for global security risks. Social democrats have never considered war as the continuation of politics by other means.
Far from being pacifists, we follow the idea of conflict prevention. Creating security must begin with fighting insecurity — politically, economically and culturally.
Europe was built on the ashes of war; today, it stands for integration.
Our goal must be to build and further integrate Europe — a European Union that contented itself with being no more than a large free trade area would be a missed opportunity.
Here, as well as in regard to our domestic agendas, the truth is: if we want to send a signal for a brighter future, we need to demonstrate that we are ready to put all our political tools to one decisive test: do our means accomplish our goals and create more, and better, opportunities?
If not, are we ready to give them up in order to uphold our values? If we can do this, the best is still to come for social democracy. — Â