The SPD, the Welfare State, and Agenda 2010
Braunthal, Gerard, German Politics and Society
The German Social Democratic Party (SPD) celebrated its 140 years of existence on 23 May 2003 with the appropriate fanfare in Berlin. Not too many other political parties in the world can match this survival record, especially given the hostility of Chancellor Bismarck, who in 1878 outlawed the fledgling party as an organization for twelve years, and of Adolf Hitler, who in 1933 drove the party into exile for twelve years. During the post-World War II era, the SPD reestablished itself as a major party and shared in governing the country from 1966 to 1982 and again from 1998 to the present. It has left an imprint on the country's domestic and foreign policies. But in the twenty-first century's initial years, the SPD, despite being in power, is facing serious problems of maintaining membership and electoral support.
This case study might serve as one political economy model for assessing the rapidly changing and declining welfare states in the developed world. I analyze one set of problems: the SPD's current welfare state policies, with a special emphasis on Chancellor Gerhard Schroder's Agenda 2010. Such a domestic policy analysis can be fruitful because it highlights the difficulties the SPD leaders face in maintaining the traditional welfare system, which has been a cornerstone of the party's domestic agenda nearly from its inception. Such a focus also provides the observer with an opportunity to study the party's strengths and weaknesses, and the degree of dissent within and outside its ranks. An appraisal of the party at this time, linked to the welfare state issue, might provide clues as to its future.
Before turning to the present and future, a glance back at the SPD during the Weimar era indicates that, in the realm of domestic policy, it expanded Chancellor Bismarck's pioneering state welfare programs, which he had initiated in 1881. Bismarck designed the programs in order to steal the thunder from a rapidly growing SPD, despite his outlawing the party at the time. In the post-World War I era, most German parties supported the economic and social welfare policies in the realms of family, health, employment, and old age. In the post-World War II era of high economic growth rates and full employment, the SPD and the newly established liberal and conservative parties basically concurred on continuing and expanding the social welfare system, considered one of the most generous in the world.
Social democratic parties in other countries provided similar support for their welfare systems. These parties and the SPD set as their goal rising wages, full employment, and an expansion of the public sector. But, as Geoff Eley notes, "the economic recession beginning in 1973 ended the postwar pattern of continuously expanding growth on which social democratic confidence relied." (1) The comprehensive welfare policies, Keynesian economics, bourgeoning public sectors, bureaucratic nationalization, state planning, corporatism, and strong trade unions declined, except in Scandinavia, where public-sector employment continued to expand in the 1980s.
Now, decades later in the setting of 2004, the German democratic parties, regardless of ideology, are planning to make the most drastic cuts in social welfare programs since World War II, as budgetary shortfalls chip away at the foundation of these expensive programs. (2) Christopher Pierson aptly noted, in the European context, that "welfare states appeared to be subject to a process of what has come to be called 'structural adjustment': a series of gradual but deep-seated reforms which were designed to make social policy more consonant with a quite new (international) political economy." (3) Herbert Kitschelt, in another comparative study, wrote, "At stake between the parties are only slightly different methods to support and to correct private market allocation of scarce goods. In advanced industrial democracies, parties can no longer offer voters stark alternatives on the distributive dimension. …