Despite what you may have heard, socialism isn't dead. It's undead, a zombie that still roams the earth uncertain what to do with itself since its demise. It was sighted again this week, somewhere on the Iberian Peninsula, though some observers dismissed the reports. Sure, a group named the Socialist Workers Party won the elections in Spain, and a Socialist named José Luis Rodríguez Zapatero is slated to become the country's next prime minister. But it says something about the state of small-"s" socialism—in addition to the state of the world—that conservatives are attacking Zapatero for his response to terrorism, not his attitude toward capitalism.
Granted, the war in Iraq and the war against al-Qaida are the whole reason the world has been watching Spain so closely for the past week. But there's another reason for the conservative silence about Zapatero's economics: The socialist debate over what to do about capitalism—and the proletariat, and the theory of surplus value, and the ownership of the means of production—is largely over in Europe. If the old libel against American liberals is that they're socialists, the new European libel against socialists is that they're liberals—classical ones. Here are some of the economic promises on which Zapatero's Socialist Workers Party campaigned: lowering the corporate tax rate from 35 percent to 30 percent, cutting income taxes, and reducing the value-added tax. Oh, and they're going to balance the budget and control inflation. The man expected to be the Socialist finance minister, Miguel Sebastian, is a U.S.-educated economist with a Ph.D. from the University of Minnesota. He's promising to put his faith in the Invisible Hand. "There will be a strict separation between politics and business," he told the Financial Times. "We will be a market-friendly government." These are socialists?
They're what's left of them. The 43-year-old Zapatero took the helm of the Socialist Workers Party in 2000, in the wake of a disastrous election for the party. That year, the Socialists allied themselves with the Communists, known as the United Left, but for the first time since Franco's death in 1975, the Socialists and the United Left together did not win a majority of Spanish votes. In the wake of that defeat, Zapatero pledged to follow a "Nueva Via," or New Way, rhetorically aligning himself with the "New Democrats" of Bill Clinton, the "Third Way" of Tony Blair, and the "New Middle" of Gerhard Schröder. He would navigate between market fundamentalism and state socialism. The clear message: The era of big socialism is over.
To American ears, that sounds ridiculous. Of course it's over. But to the European left it's not so simple. For example, it wasn't until 1995 that Tony Blair convinced the British Labor Party to change Clause Four of its constitution, which had bound the party to pursue "the common ownership of the means of production, distribution, and exchange." In other words, to abolish capitalism. To old Labor loyalists, Clause Four was like the Human Life Amendment in the Republican Party platform, which would amend the U.S. Constitution to ban abortion. They knew their party wouldn't do anything about it if it took power, but they liked having it there as a statement of values. In One Hundred Years of Socialism, the historian Donald Sassoon notes that over the course of the 1960s, '70s, and '80s, European socialists went from wanting to get rid of capitalism to declaring "that they were the ideal managers of it."
But Zapatero, Blair, and Schröder are taking this a step further: They're dropping much of the socialist project of economic interventionism. The vestige of socialism they cling to is the commitment to a strong social safety net that can balance the inequities of unbridled capitalism. Schröder may be going the furthest: He's trying to cut Germany's welfare state in order to save it. (Americans might be amused that some Germans are outraged because they now pay $12.40 each time they visit the doctor.) Zapatero's shift toward market economics is understandable: He has to live up to the stellar performance of his predecessor. As the Wall Street Journal Europe noted this week, during José Maria Aznar's eight years as Spain's prime minister, unemployment dropped from 20 percent to 11 percent, and the country created 40 percent of the European Union's new jobs, 4.2 million of them. During the 20-year period from 1976 to 1996, the country's job growth netted out at zero. *
Of course, European socialists have long coexisted with capitalism, as the historian Sassoon has argued. Although they long believed that capitalism would wither away, socialist parties in Western Europe have contented themselves with the short-run goal of making the current economic system a more just one. As Paul Berman once put it the New York Times, socialism "has modestly shriveled into what it always should have been: an ethical orientation, not an economic how-to guide."