An age full of possibilities

President of the Socialist International, Pierre Mauroy, former Prime Minister of France, looks at the important issues of the day

Issue 4, Volume 47, 1998


History is never written in advance. Its path follows progress, but also reverses. Willy Brandt reminded us of this in one of his last messages, in September 1992: `Now as at no other time in the past, a multitude of possibilities - both good and bad - are open to us'.

The first signs of the economic crisis appeared in Thailand last year, and this has now spread to Asia, Russia and Latin America, and we still cannot be entirely sure that it will spare the industrialised countries. It is the result of several factors: a new demand for high yields on the part of shareholders, leading to immense risk-taking; the foreign-exchange crisis of the emerging economies, bound into a forced march with the dollar, the vagaries of an excessive liberalisation and the emergence of unregulated new markets, and the vulnerability of the banking sector, which took rash risks without always concerning itself with the solvency of those to whom it lent.

The whole dynamic underlying the growth of the last fifteen years, based on the creation of a world market for capital, is therefore brought into question. We have often deplored the fact that the financial markets are governed only by the search for short-term profits. We have often expressed our fears about the fragility of strong but badly regulated growth, and we have often denounced the speculative excesses which have led to 1,600 billion dollars being exchanged on the markets each day.

And we were right. One can no longer deny the possible consequences of an uncontrolled capitalism whose tendency to accumulate money for money's sake explains so much of the imprudence that has given rise to fear and even panic.

But such financial militancy is not the only element in the crises of today. The unregulated disorder of the economy and the failure of politics have also played their part. And it is not surprising that it is the countries which have made the best transition to democracy, such as the Philippines and Taiwan, which have suffered the least. Malaysia, on the other hand, where the authoritarianism of the rulers has been subject to no control, where opposition has been repressed and corruption has become widespread, has been unable to muster a response to the crisis. For the same reasons, Indonesia, subjected for 36 years to an autocratic regime, nepotism and corruption, is once again experiencing serious problems, and I would take this opportunity to salute the struggle for freedom of the Indonesian and Malaysian peoples, to whom I express our solidarity.

When the Indian-born economist Amartya Sen, who was recently awarded the Nobel Prize for Economics, writes that `civil and political rights have a positive impact on economic progress', he shares with us the conviction that there can be no healthy economy without a State that guarantees legality and democracy.

The international community thus sees itself today confronted by the need to define new rules, and to reclaim the dominance of politics over the economy. The globalisation of economic activity must be matched by an equivalent globalisation of politics. This is the realism we need for the next century.

Effective global regulation requires the definition at the political level of criteria of transparency that will save us from the blind drift of an opaque and unregulated financial system, and that will give financial institutions greater legitimacy and the capacity to work on the basis of clear political objectives. It also requires the formation of large regional economic groupings, which alone will be capable of guiding the process of globalisation onto the path of solidarity and growth.

This is an urgent matter, and the stakes are high. The current crisis is dangerous because it has a destabilising effect on several continents. Asia is plunging deeper into the mire, Japan is in recession, Latin America is threatened. The United States and Europe have been spared for the moment, but one threatens a new protectionism and the other a new shift to increased unemployment if the situation is not rectified. We must therefore remain prudent.

Russia itself, once a great power, is going through a profound crisis that exemplifies in the extreme the State's abandonment of its responsibilities. Businesses no longer pay taxes, mafia monopolies impose their own law, and the government is unable to do anything about the economic collapse. The abrupt passage from a planned to a liberalised economy, without the State playing its proper role, without the indispensable institutional reforms being carried out, has led the country into a social chaos which has plunged the Russian people into anger, distress and appalling poverty which has led to an unprecedented increase in mortality.

The risk that part of the planet may be excluded from progress and development is greater than ever. It is not acceptable that 86 per cent of world consumption should be monopolised by 20 per cent of the population. This is why it is urgently necessary today to look for redistributive policies that will redirect financial flows towards the poorer countries. How can we not imagine that the frightful damage caused by Hurricane Mitch would have been less cruel if the countries affected had been less poor? Faced with catastrophe on such a scale, verbal solidarity is not enough. Real solidarity must be concrete, and we support the initiatives being taken for the cancellation of the debt of the countries concerned, Honduras, El Salvador and Nicaragua, for an international conference on reconstruction, and for the establishment of a permanent organisation to deal with these kinds of disaster.

What kind of equilibrium could there be in a world in which only the `West' in its narrowest sense, that is to say Europe and North America, had the advantages of wealth and stability? Can we countenance a situation in which an impassable frontier is established between the North and the South, between rich and poor, but also, because these divisions are related, between the free and the oppressed? What an extraordinary backward step!

The SI will be looking at proposals put forward by António Guterres on behalf of the economic committee to remedy the dysfunctions of the international financial system. These proposals forcefully remind us of our duty of solidarity to the poorest nations and to parties fighting for democracy. Dialogue between the peoples of this interdependent world, through the parties who represent them, and through trade unions, such as those of Korea, is one of the essential roles of the International. Today, faced with the gathering clouds that are darkening the prospects for development and growth in so many regions of the world, it is important that we continue along this path with an indomitable resolution.

Africa, which despite a marked rise in economic growth, is approaching the end of the century in a worrying condition. Certainly democracy has made progress over the last decade. The time when presidents were elected by 99 per cent of the vote has passed. Democratic alternation of power has been established in many countries, such as Benin, Zambia, Madagascar and Cape Verde. Between 1990 and 1994, throughout Africa, eleven of previously lone parties were beaten at the polls.

All these developments are encouraging. They testify to the role played by the democratic parties of Africa, many of which are members of our organisation, and we assure them of our solidarity and our support for their cause. But too often, electoral manipulations to which the international community closes its eyes still lead to violence and the temptation to no longer consider the electoral road as the only path to power.

In this very dark picture, Europe appears to be privileged. And without a doubt, it is in many ways. Yet one must not fall into excessive optimism, and we need to understand why this is dangerous.

The single currency seems to be living up to its promises. It is no accident that Europe has been spared financial instability. This I see as confirmation of the path that socialists have steadfastly followed and the policy for which we have sometimes had difficulty in gaining support. We have always argued that a single currency would be a force for stability, and today the facts have borne us out.

Europe is also making a success of a policy that we have long supported, that of regional and continental integration, which alone can meet the challenge of globalisation.

By one of those unexpected historical advances, this Europe largely governed by social democrats has taken the turn that we socialists have advocated for years, towards the primacy of political will.

We always said that European construction had to go beyond the merely economic framework, and to be based also on political and social foundations. In this respect, thanks to the welcome initiative of the Austrian Chancellor Viktor Klima, the recent Pörtschach Summit has marked a turning-point which confirms the new direction taken a year ago with the victories of Lionel Jospin and Tony Blair. The success of Gerhard Schröder and the new government led by Massimo D'Alema gave the final touch on the accelerator. These two changes will be influential. For the first time in its history, an election has given Germany a left majority, and the formation of the D'Alema government confirms the essential democratic role of well-constructed parties on solid bases.

Today, the social democrats form or are associated in government in thirteen countries of the European Union. This `pink' Europe is first of all a sign of the peoples' confidence in governments which are concerned with ensuring that Europe's future is one of social progress. It also imposes on us the responsibility of living up to this confidence by showing that it can be a citizens' Europe.

The Fifteen who met at Pörtschach therefore stressed their common intention to coordinate their economic policies in the service of growth and employment. This is a major event for a Europe which hitherto has not made sufficient effort to unite to reduce the massive unemployment which it has suffered, and consequently the euro represents not merely an economic stage but lasting social and political progress.

How can one not be pleased at the emergence of this social democratic Europe? Today it represents a great hope, for itself and for our peoples. But also because it is going to be able to open itself to the rest of the world. For one must not lose sight of the role of a European Union in which social democracy, because it is based on well-constructed parties which have been able to come together within the Party of European Socialists and rally the interests of different peoples, is now able to play a role in the process of globalisation so as to promote solidarity, development and democracy, wherever humanity is suffering.

There is of course no question of imposing a model, for no model can be transported from one continent to another except at the cost of denying the historical and cultural specificity which represents the wealth of each nation. But as the Socialist International we have a particular responsibility for the establishment of dialogue with parties and peoples aspiring to development and freedom. In some cases we are even able to play an important mediating role to help certain countries which still adhere in some sense to communism and which today are seeking to re-integrate themselves in a world of rapid development. This is the meaning of the delegations from the International which I led to Cuba and China, and as a result of which I made proposals for cooperation to all our parties.

At the end of the 20th century, Soviet communism has collapsed and we have witnessed the failure of liberalism. Many sincerely reforming parties from the ex-communist countries have joined the International. Does this mean that social democracy has won? Without triumphalism, one can reasonably answer yes. The balance has come down on the side of our ideas, and if our International is today a point of reference and a pole of attraction, this is because international socialism has always, and in particular since the refoundation of the SI at Frankfurt in 1951, represented a kind of third way between an exploitative capitalism and an oppressive communism. Thus was forged the model of advanced democracy which is now dominant in Europe, which reconciles economic progress and social justice, development and democracy, and which in a way makes social democracy the most important point of reference in the world.

If our ideas have withstood the hazards of history better than others, if international socialism has survived the century, it has been because our parties have always known how to develop without denying what they are. It was by asserting our own identity that we won against communism. It is by sticking to our values that we shall triumph over a liberalism without limits, which is no more than the reflection of capitalism itself. And it is by adapting our ideology and our methods, while remaining faithful to our history, that we will enter into the 21st century in the best conditions possible.

In this way we shall be better armed to pursue our century-long struggle, given that, as Jean Jaurès said, `Socialism is democracy taken to its logical conclusion'. To its logical conclusion, so that the globalisation of the economy is matched by a globalisation of politics. To its logical conclusion, in the fight for greater freedom, more justice, and greater human dignity. For this has always been, and still remains, the goal of the Socialist International.