The collapse of the Soviet Union and the crisis of the Western welfare state

Responding to friendly critics on "Crooked Timber," Francis Spufford, author of Red Plenty, a new novel about the ideological climax moment for the Soviet Union in the early 1960s (which I confess I haven't read yet), perfectly captures my own sense of what the Soviet Union's collapse meant politically in the West:

I was 27 when the Soviet Union fell, ceased to be, shuffled off this mortal coil. I was too young to have experienced... it way back in the 1970s as a place which, barbarous and dictatorial though it was, nevertheless was essentially on the reasonable side of the economic argument; somewhere that, by opting for planning, had chosen the better economic model. On the other hand, I was too old to [experience] it as a will-o’-the-wisp, vanishing as I studied it, and leaving nothing behind but tedium and stale air. For me, as a teenager in the early 80s, having the traditional nuclear annihilation dream at regular intervals – my friends would usually drive past me in a bus while the asphalt melted just behind my fleeing heels – the USSR was not a possible object of admiration, but it was an object of solidity. Its defining feature was its permanence. It was an inevitable part of the planet’s architecture: obsolete but immovable. And then it did move, and when it went its going suddenly disclosed a set of hidden linkages that pulled various aspects of my familiar, home experience away after it. It seemed that my Western socialism – the unbarbarous kind – had had an unsuspected dependence on the existence of the Soviet model. And not just because the USSR was definitionally useful to social democrats, letting us point and say “Not that!” It had also served, it turned out when it was gone, as a sort of massive concrete tentpeg, keeping the Overton Window (not that it was called that, yet) tethered at its lefthand edge in a way that maintained the legitimacy, in western discussion, of all kinds of non-market thinking. When the USSR vanished, so with amazing speed in the 1990s did the entire discourse in which there were any alternatives to capitalism that had to be taken seriously. This was the biggest intellectual change of my lifetime – the replacement of one order of things, which I had just had time to learn and to regard as permanent, with a wholly different one, in radical discontinuity with it.

Even though the collapse of the Soviet Union had no ideological impact on Western social democrats, who had no sympathy for the Soviet system's brutality and economic underperformance, it nonetheless provoked a broad-scale political crisis for social democracy. This is because the collapse of a far left alternative moved the entire political conversation to the right. What had been "centrist" politics in the 1970s and 1980s suddenly became as far left as you could go. (Consider how Bill Clinton – an instinctual centrist if ever there was one – is now represented and remembered, both by his supporters and detractors, as a "liberal.") At the same time, the right was able to move much further to the right, turning former solid conservatives into relative liberals within their political community, and permitting the political mainstreaming of rightist beliefs which only a few years ago would be have been derided as fringe or worse. This is what Spufford means when he says that the collapse of Soviet Communism shifted the West's Overton Window dramatically to the right.

This shift has had profound if slowly-evolving implications for social welfare programs. Over the course of the past two decades, the formerly near-universal consensus in favor of unemployment insurance, government-guaranteed retirement benefits, health care, and other social services has became open to questioning within mainstream political space in a way that would have been virtually inconceivable as recently as the 1980s – back when no less than Ronald Reagan conceded that social security represented the "third rail" of American politics. With the disappearance of a hard left alternative, however, the right has been able to push its social darwinist libertarian agenda with much greater confidence, that is, with much less fear of provoking a far-left backlash. Likewise, social democrats had a much harder time positioning themselves as the reasonable middle ground between the social darwinist libertarian right and the communistic left, or of making the case that unless the state made a decent patch of things for ordinary citizens, the specter of Communism lay around the corner. Thus the terminal crisis of the centrally-planned Soviet economy, which on its face had nothing to do with the legitimacy or viability the social democratic welfare state (whose focus was not on planning production but on creating a minimum and egalitarian standard of social consumption), ended up reshaping perceptions of political possibilities in a way that has nolens volens undermined the political inevitability of and thus commitment to the social democratic welfare state.

Arguably the impact of the collapse of Soviet Communism was even greater in the Global South. Margaret Thatcher's provocation in the 1970s that "There Is No Alternative" to economic liberalism, became by the 1990s the absolute political reality almost everywhere on earth outside Cuba and North Korea. In terms of thinking about development, the collapse of a perceived socialist alternative terminated all elite resistance to the so-called structural adjustment programs which emerged as the dominant developmental practice of the 1990s – and which today is being applied to peripheral Europe. The collapse of the socialist alternative made it safe for development leaders to back away from commitments to reducing poverty, supplying basic needs or reducing inequality.