The Progressive Post

What digital future for what Social Democracy?


Nothing reveals the existential crisis of the Social Democratic model quite like its inability to get a grip on today’s digital society. To reinvigorate itself and society, Social Democracy must embrace a new ambitious project that would not only reveal the true costs and vulnerabilities of neoliberal empowerment (where global digital capitalism is perceived as working in the interests of everyone – although doesn’t do so) but would also offer a vision for its own type of digital empowerment. The new Social Democratic model must update the values that are more common to the Social Democratic project: solidarity, cooperation, and social justice.

The once stable and predictable institutional environment – the welfare state, the publicly run infrastructures, the functioning public sphere – where worker-friendly market interventions were supposed to occur, can no longer be taken for granted. The highly financialised social state has become the target of capitalist accumulation, sapping the remaining legitimacy from Social Democracy and making it harder to communicate a plausible narrative about its ability to tame the market.   

The digital industry, one of the few to shine in the recent crisis, presents an immense conundrum for the Social Democratic project. On the one hand, it is clear that the current regulatory environment resembles the Wild West (in this sense, data is, in fact, the new oil). On the other hand, because of the central role that the digital industry holds in today’s overall model of capitalist accumulation – whereby huge injections of capital, often by state actors, are meant to crush competition and ensure ever-rising valuations, which then translate into dividends – taking on the tech giants means also taking on global capitalism itself.

It is nevertheless not clear whether Social Democrats can muster up enough legitimacy to even contemplate doing something to this digital goose that lays the golden eggs (at least for some). This is partly due to the emergence of the new social base – led by consumers and ordinary individual investors – who oppose market regulation, however timidly, as it threatens their own well-being, which is today so intricately linked to the constant expansion of the digital industry itself.

Whereas, in the past, this group could be appealed to on the grounds of class solidarity – for example, the plight of workers in the Global South should matter to workers in the Global North, even if it means higher prices for some sweatshop-made products – that is no longer an option, partly due to the earlier breathless defence of globalisation by Social Democrats themselves and partly due to the protracted economic stagnation in the Global North itself. When real wages are no longer increasing, who can blame workers for turning to cheaper options instead, however unsustainable, and unethical? 

While some might still be reluctant to acknowledge its success, the neoliberal transformation of the past few decades has succeeded in splintering the traditional base of Social Democracy. Two developments are particularly important here: the triumph of the paradigm of consumer sovereignty as the overarching value for the middle classes, and the rise of populist financialisation as a means of delivering welfare to ordinary citizens.

This is how the interests of the middle classes have been realigned with those of global capitalism, no matter how rapacious, digital, or financialised. On the consumer side, the exploitation of couriers and drivers in the gig economy might be appalling but it is an acceptable sacrifice to ensure lower prices on delivered goods. On the financial side, many transgressions – including those that smack of monopoly power, market abuse, and exploitative labour practices – are tolerated as long as they help digital platforms to ensure greater market shares, which, in turn, translates into higher stock valuations, which – in the ultimate utopian stage – generate wealth for the ordinary investors who hold the shares of those firms.

Against this background, the entire Social Democratic project appears more as a nuisance, an obstacle in the path of highly financialised digital capitalism delivering wealth and abundance to the lucky few to consume its products and to invest in its shares. This is not to say that there are no victims in this capitalist fairy-tale – they are aplenty – but they are either elsewhere, in the data and content moderation centres of the Global South, or they are part of the immigrant workforce (for example, in the delivery sector) and cannot even vote in national elections. The classical regulatory project of Social Democracy, at least in the Global North, thus appears as a ghost enterprise, of some appeal to those destitute on its outside but perceived mostly as harmful by its former adherents on the inside

Individuals, however, are not the only ones trapped by these lofty promises of global capitalisation. Nation states, which, increasingly, via their sovereign wealth funds, inject huge amounts of cash into the global technology markets, are even more culpable. The Social-Democratic Norway is a case in point: should the global technology markets tumble under the threat of serious regulation, Norway’s sovereign wealth fund, a central piece of its revamped welfare state, would tumble with them, not least due to heavy exposure to the digital economy, the only reliable growth sector of the global economy.

To its credit, Norway has pushed for ambitious corporate governance reforms in the tech industry but this in itself does not mean much for the sustainability of the underlying business models: the exploitation of workers in the gig economy is, primarily, a function of the profitability imperative – and not of a murky and undemocratic governance system behind the platforms. This should serve as a cautious warning against temptations by other European states to follow the Norwegian model in its entirety: it’s one thing to use the welfare state as a vehicle of (national or regional) industrial and digital policies, but it’s quite another to do it in order to speculate on the global market, if only to fill in the gaps in the annual welfare budget, as Norway does currently.

How can Social Democracy move beyond this ghost-like presence in today’s digital economy? This will not – and cannot – be done using the old toolbox of regulation. As long as citizens, the central subjects of democratic politics in the Global North, continue seeing themselves as a creative, countercultural mix between consumers, entrepreneurs, and investors – using their mobile apps to order taxis or food or place bets on the stock market via services like Robin Hood, which claim to democratise investment – regulation will always be seen as antithetical to their interests

A major error made by Social Democrats (of the more critical bent) in their analysis of the neoliberal project was to perceive its promises as empty and unrealistic, and never to engage seriously with their content. But empty they were not, as is evidenced by hordes of people, without any explicit right-leaning tendencies, who attest to feeling empowered after their interactions with the digital-financial behemoth that is today’s capitalism.

The neoliberal promises were not all talk and the empowerment they brought, at least to some, was not fake. But the promises were quite misleading – in never revealing the true costs of this empowerment, which are usually borne out by immigrants, precarious workers, or those in the digital sweatshops of the Global South. Nor is it clear just how sustainable this model can be, even for those in the Global North: the environmental toll combined with the aforementioned erosion and commodification of the basic prerequisites and infrastructure of capitalist accumulation makes this model more fragile than we commonly acknowledge.

A Social Democratic digital empowerment

To reinvigorate itself, Social Democracy must embark on an ambitious political journey that would not only reveal the true costs and vulnerabilities of neoliberal empowerment (where global digital capitalism supposedly works in the interests of everyone) but would also offer a vision for its own type of digital empowerment, rooted in values that are more common to the Social Democratic project: solidarity, cooperation, and social justice. This would require rethinking the basic building blocks of the digital society from the ground up, without any preconceived ideas about what counts as a ‘platform’, what its legitimate role and mode of operation should be, and what kind of relationship it should have with the citizenry.

Today’s neoliberal digital economy, without stating it so explicitly, is quite specific about defining all these relationships in advance – and doing so in a way that cements the role of the market and the price system as the default mechanisms of social coordination. Citizens are thus conceived as atomised user-consumers, who come online to purchase an individual solution – an app or a digital service – to their particular problem or need. Such needs, while present among other fellow citizens, are tackled on a one-by-one basis, so that the solution – which becomes a commodity – can be sold to many consumers, in the most profitable way possible.

Government policy, (on this dominant logic), becomes all about incentivising more start-ups to build more solutions – that is to commodify more problems faster. The distribution of labour in this model, especially when it comes to innovation, is extremely clear-cut: the bulk of the innovative process is to be borne out by the tech enterprises, with some minor innovation on the margins (with user-consumers inventing new ‘needs’ and ‘problems’ and governments inventing more ways to channel even more money to the start-ups).

The Social Democratic alternative to the innovation economy would make no such limiting assumptions. First of all, it would recognise that innovation is not just the function of industry and production but of life in general – and social and collective existence in particular. As we confront problems in our everyday existence, we constantly innovate – often by reaching out to family and friends. This is not some atavistic feature of a tribal society, as some followers of Friedrich von Hayek might have it, or something to be rooted out once the logic of the market penetrates every walk of life. Rather, such problem-solving, especially in its more collective, social forms, is a sign of social progress, not regression, and is to be celebrated and scaled up, not suppressed and considered something of which to be ashamed.

Our digital infrastructures, from cloud computing to social networking to artificial intelligence, should be geared to amplify such collaborative possibilities, so that, once properly established,  they can give rise to sustainable digital public goods that reside outside the private realm (not unlike the way Wikipedia or free software do today). After all, if our needs are similar, there is no reason for us to purchase individual solutions to them – a digital infrastructure, conceived as a public good, would do much better. This should help undermine the centrality of consumer sovereignty for today’s citizenship: our creative individual aspirations have to be channelled into non-market outlets that transcend the logic of fulfilling our psychological needs in the ever-abundant marketplace.

Social Democrats would be wise to recognise that digital technologies, examined outside the capitalist logic that currently restrains their potential, offer a much greater reservoir of political energy, perfect for empowering today’s automised individuals, than the market. The promises of ever-greater autonomy implicit in the smart, fully-automated home or a local economy run on 3D printers, liberated from the global supply chains, are not disingenuous; it’s just that they are unlikely to be realised within today’s capitalist paradigm.

In that sense, it’s important to draw a distinction between the technological sovereignty – of individuals, not nation states – conceived under neoliberalism, and the technological sovereignty conceived under the new, revamped, and technologically literate Social Democracy sketched out here. In the former case, technological sovereignty always ends up as consumer sovereignty, as technologies are there only to serve our ultimate fulfilment in the marketplace: we can choose with what apps and on what conditions – paying with our data, attention, or cash – but the mechanism, that of the market, is always the same. 

In the latter, Social Democratic case, technological sovereignty refers to the ability of citizens to chart their own autonomous and independent life path, by using the most sophisticated technologies available, on whatever terms they wish and with whatever balance of market and non-market relations they desire. 

Under this model, if young genius developers want to work on applying artificial intelligence to solve humanity’s greatest problems, they can choose whether to do it at the level of their neighbourhood, a local cooperative, a citizen association, a university, a library and any other public and collective institution. After all, all of them would have the same access to the same digital infrastructure, itself a public good. These young developers can, of course, also choose to work in a start-up or a company – the only real option available today, under the neoliberal model – but, in that case, their employer will actually have to pay for using that public infrastructure. This will not solve all of the problems faced by Social Democracy today. But it will, at the very least, help create a new set of digital public goods while also reinvigorating non-market means of empowering individuals, who, in today’s neoliberal environment, can only count on global capitalism in that respect. Whatever its benefits in the short term, today’s global financial capitalism limits – not enables – the truly revolutionary potential of digital technologies. The most urgent task of the Social Democratic project is to recover that potential.

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