Britain’s Labour Party Can’t Become Another PASOK

Social democratic parties across Europe have suffered "Pasokification," the fate of the Greek center-left party that lost three-quarters of its voters in just three years. If Britain's Labour Party wants to avoid similar disasters, it needs an economic radicalism that can show the working class that it's really on their side.

Leader of the Labour Party, Sir Keir Starmer, makes a statement on the UK economy on February 18, 2021 in London, England. (Stefan Rousseau - WPA Pool / Getty Images)

Recent decades have seen the decline of social democratic parties across Europe, with some becoming so atrophied as to lose any hope of winning office. The graph below vividly illustrates the demise of social democracy in France, Greece, and Holland — all sister parties of Britain’s Labour Party.

Their fate has become known as “Pasokification,” following the early 2010s collapse of Greece’s PASOK. This article explores whether this same threat confronts Britain’s Labour Party. We should say at the outset that this issue is complex and the evidence mixed. Moreover, we are not approaching this problem as social scientists with an interest in current trends — but as politically active agents who wish to understand the conjuncture aiming to influence it.

It would be wrong to overgeneralize: “Pasokification” is not an inevitable fate for all social democratic parties in Western Europe, especially given how distinct national political cultures shape the way politics plays out in each country. For instance, Spain’s PSOE did manage to revive its electoral support in the late 2010s and formed a government. But the three cases in the graph do have common features.

Summarily put, in all three, the social-democratic vote declined dramatically after the Great Crisis of 2007–9, even collapsing among working-class communities. These “center”-left parties became detached from the social groups that have traditionally comprised their core support. Several long-term factors can be identified here: the global spread of capitalism, making private capital more mobile; the menacing presence of finance in everyday life; the decline of industrial employment; deepening inequality; the destructive effect of years of austerity on welfare provision; and repeated disastrous economic crises.

All these factors have had a major impact on working-class communities. The “center”-left could have acted as their political vehicle in resisting these pressures, while transforming society’s direction of travel, against capitalism and toward socialism. Instead, these parties’ leading politicians and political structures sought to adapt to the economic and social pressures generated by capitalism’s transformations. They opted for political strategies that were managerialist and technocratic rather than socially transformative.

By the turn of the millennium, the social democratic left in these three countries had integrated itself into the aggressive capitalism of our times, unable even to imagine offering an alternative socialist model. But when a party fails to offer a way out of an economic and social reality acutely damaging for millions of its own supporters, it ought not to be surprised if they refuse to vote for it. As the “center”-left ceased to reflect the aspirations and needs of its traditional political base, a political vacuum opened up attracting right-wing parties, often with nationalist and even racist features.

Is this Labour’s future too? For an answer, we first need to take a closer look at the transformation of capitalism in recent decades, which is particularly pronounced in Britain.

Capitalism Transformed

The social democracy that emerged from the workers’ movement of the late nineteenth and early twentieth centuries was a response to the gross exploitation of workers and the oppression of broad layers of the population in industrial-capitalist societies. Things have changed substantially since then — but the exploitation, the injustices, and the oppression of capitalism have not been resolved. Since the late 1970s, capitalist accumulation has been greatly transformed to working people’s disadvantage.

In several core countries, finance has grown enormously — becoming a major source of profits and giving rise to the financialization of capitalism. Productive investment and growth have been consistently poor, particularly during the last two decades. During the same period, new centers of accumulation have emerged in the world economy, above all, in China. Industrial production, trade, and finance have assumed global dimensions, creating interlinked chains across the world.

The dominant force in these chains are vast multinational corporations controlling production, trade, technology, and finance, often being more powerful than nation-states. Some of the new giants are focused on services within the domestic economy. Walmart’s revenue in 2020 totaled $559 billion; if it were a country, it would be ranked twenty-fifth-largest in the world by GDP.

Underpinning the changes is a technological revolution in telecommunications and artificial intelligence that has transformed the labor force, destroying entire areas of traditional employment and promoting insecure and temporary jobs. This trend has gone together with the weakness of organized labor, with declining levels of trade union density in key European countries and the United States.

Only in Scandinavian countries are most working people still trade union members. Yet despite the devastation of the workforce, the impact of new technology on labor productivity is not remotely comparable to previous great technological leaps. Relative stagnation hangs over the historic centers of capitalist accumulation.

The distributional implications of these tectonic shifts have been disastrous for workers, dramatically fueling inequality in core countries. Real wages have stagnated, and huge layers of the working poor and the impoverished middle classes have emerged across the West. Simultaneously, a new capitalist has taken shape; extraordinarily rich and often connected to finance, it is oligarchic and naturally hostile to democracy.

This neoliberal transformation of capitalism does not just mean the retreat of the state; rather, it has decisively relied on the nation-state’s support. Above all, the state is preponderant in finance through the central bank that creates vast volumes of fiat money and manages interest rates. It is also the main force confronting the enormous crises regularly created by transformed capitalism. The state is integrally connected to the oligarchic elite and thus profoundly corrupt and hostile to the content of democracy, even when it sticks to its form.

The values of the French Revolution that so marked the modern era are under threat in contemporary capitalism. Liberty is at risk from increasingly authoritarian oligarchies; Equality has become as remote as ever; Fraternity (that is, solidarity) is breaking down as work is transformed, communities are damaged by global flows of commodities and finance, and public services are subject to austerity.

Britain has been at the heart of this increasingly unconstrained capitalism — and the Labour Party has felt its full impact. To see if Pasokification lies ahead, it’s worth considering the original Greek case more closely.

Pasokification in Greece

PASOK was established in 1974 after the fall of the dictatorship, but its glory years came with its first government in 1981–85, led by Andreas Papandreou. This was Greece’s most socially reforming government since 1945, far more radical than Syriza in 2015-19. PASOK redistributed income in favor of the poor and the lower-middle class, launched a National Health System, improved Social Security provision, and deepened democracy, including by facilitating trade union activity.

Andreas Papandreou. (Wikimedia Commons)

The impact of its initial radicalism continued to reverberate in the following decades, consolidating the social base of PASOK among workers, the small peasantry, and the lower-middle class. During its early existence, PASOK also created a vast organization of committed members stretching across the country, while becoming Greece’s main party of government.

Greek social democracy was created at the very moment that global capitalism took its historic neoliberal turn. This reflected Greece’s peculiar development, as a country on the periphery of Western Europe which suffered a devastating Civil War in 1946–49. However, PASOK’s radicalism did not last long in these conditions. Subsequent PASOK governments were conservative to varying degrees, attempting to manage Greek capitalism’s integration into the European and world economies, particularly as growth rates declined.

Even so, PASOK never frontally attacked the interests of its social base — ensuring a solid bedrock of support for itself. Even in 2009, as the Great Crisis was in full swing, Greece elected PASOK on a landslide, with more than three million out of just over seven million votes. And there was an obvious reason: the party promised to resolve the crisis in the interests of its electoral base.

That promise proved false — what PASOK actually did was to usher in the first disastrous bailout imposed by EU lenders in 2010, followed by another in 2012, each conditional on harsh austerity. It lost almost three-quarters of its support in the May 2012 election, slumping to 0.8 million votes. The collapse was especially pronounced among the urban working class in Athens and other cities, as it fell below 10 percent in one working-class area after the next.

PASOK’s erstwhile supporters no longer wanted to listen to the party — and with very good reason. For its adoption of bailout policies had brought an unprecedented decline in their wages:

The dramatic fall in wages was matched by enormous unemployment, drastic pensions cuts, a wave of bankruptcies for small and medium enterprises, deep cuts in health provision, collapse in education spending, homelessness, and mass emigration among the young. The social alliance that supported PASOK disintegrated and so did the multilayered party machine tightly imbricated with the Greek state. PASOK evaporated as a party of government and a serious political force.

The bailouts further transformed the Greek economy by introducing widespread deregulation and privatization. But, whatever the preposterous claims of pro-bailout Greek elites, they did not create conditions for renewed growth. On the contrary, they plunged the Greek economy into a mire without historical precedent:

Source: ELSTAT. The figures for 2018, 2019, and 2020 are provisional.

It is a tribute to the Greek people’s political traditions that, in these terrible conditions, PASOK’s disintegrating base sought answers further to the left. The working class of the urban areas migrated en masse to Syriza, supported by broad layers of the lower-middle class and poor farmers. Syriza won 2.3 million votes in January 2015, an unprecedented result for a party of the hard left. Most were disgruntled ex-PASOK voters.

Alexis Tsipras, leader of Syriza, in 2015. (Wikimedia Commons)

Syriza’s election was one of those rare historical occasions when the great masses stand ready for radical change, as was shown by the July 2015 referendum, when the Greek people said no to the lenders’ and Greek elites’ extraordinary blackmail. In the end, Syriza betrayed their expectations by surrendering — and continued to apply the disastrous bailout policies. By the time of the 2019 election, the middle class was so incensed at the burdens imposed upon it that it swung its support toward the mainstream right.

Syriza’s near-five years in government thus succeeded in bringing back the previously discredited right-wing New Democracy, with a neoliberal agenda and authoritarian leanings. This shift to the right came together with apathy and detachment from politics, though Syriza did hold on to a substantial proportion of the vote by workers and the lower-income strata who had come over from the now-hobbled PASOK.

The Curious Case of Labour

Over in Britain, Labour’s performance suggests that the position it finds itself in is very precarious. Pasokification is certainly possible, but not all is yet lost. Consider first the trajectory of electoral results:

The data shows a downward trend in Labour support since the late 1990s, matched by a rise in the Conservative vote but also — at times crucially — increasing support for right-wing populists (UK Independence Party [UKIP] and the Brexit Party). The emergence of this latter force represents a rejection of Britain’s EU membership that was frequently expressed in xenophobic terms. Following the capture of the Conservative Party leadership by authoritarian-populist right-wing elements strongly opposed to the EU, the decline in the Brexit Party was precipitate.

Labour’s loss of support is long-term and largely precedes the Great Crisis of 2007–9, even if that crisis occurred under a Labour government. Votes were lost throughout the New Labour governments under Tony Blair and under the leadership of Ed Miliband in opposition from 2010 to 2015. Some might argue that electoral support for governing parties tends to fall over time; indeed this is probably true, but it cannot explain the scale of losses under New Labour.

The crash of 2007–9 was followed by more than a decade of attacks on working people’s living standards and a huge boost to the owners of capital. Even though these attacks were enacted by the Tories, New Labour continued to be held partly responsible, since it was blamed for the conditions that led to the financial crash. While the financialization of capitalism and the greed of capitalists were responsible for the economic fragility that became apparent in 2008, New Labour still carried some of the blame.

For political events to take a different path, it would have been necessary to have a Labour leadership prepared to point the finger directly at financialized capitalism as the true culprit of these disastrous events. But few Labour leaders had the ideological commitment and the intellectual composure to engage in this task, particularly as they accepted the role of managers of a system that is intrinsically unstable and leans heaviest on working people. New Labour summed up the historic degeneration of social democracy during the last four decades.

To grasp the reasons for the long-term decline in Labour votes, it is useful to look at the annual growth rate of wages and salaries since 1979, when Margaret Thatcher became prime minister. The rate declined dramatically during the Thatcher and John Major years, and the trend was not reversed during the entire New Labour period. The years since the Great Crisis have actually been the worst for wage growth since 1945. Poverty and deprivation are now permanent features of working-class life in Britain.

Source: Constructed from ONS data.

This graph perhaps looks less remarkable, if we recall that Peter Mandelson — one of the main authors of New Labour — proudly acknowledged that they had set out to manage the post-Thatcher settlement. In June 2002 he declared that, in terms of economics, “we are all Thatcherites now.”

Under Tory governments since 2010, working people’s share of total income declined greatly, while the owners of capital saw enormous additional accumulations of wealth. Not only this, but the character of work also generally worsened. Employment precarity escalated, particularly among young people. Entire communities were stranded as activity continued to shift away from industry toward services. As inequality rose, a privileged oligarchy commanded politics and the media. The content of democracy was severely diluted, and economic policies became increasingly the province of technocratic “experts.” Widespread corruption became entrenched across the state as big businesses acquired even further lobbying access.

This provided the context for the Brexit referendum in 2016. Broad layers of working people, including Labour voters, in the most deprived and hardest-hit areas of Britain, voted for Brexit. There was certainly some xenophobia involved — but the Leave vote was also a protest at the dreadful impact of transformed British capitalism on working people’s living conditions, especially since the Great Crisis.

Pro-Brexit demonstrators hold Union Jack flags as they protest outside the Houses of Parliament on November 23, 2016 in London, England. (Jack Taylor / Getty Images)

Continued support for Brexit after 2016 also reflected a popular desire to abide by Britain’s democratic traditions and exercise sovereignty against persistent attempts to overturn the referendum vote. In these conditions, it is hardly surprising that Labour’s standing among the working class has taken a battering. The graph below shows support for Labour among lower-income earners (red line) and among middle-and-upper-income earners (blue line). It is clear that Labour is confronted by a long-standing, almost chronic, loss of support in working communities since the early days of Blair.

If Labour keeps losing working-class support, it is difficult to see how it will ever again form a government. Pasokification is a real prospect. The danger can be vividly seen by contrasting two Labour constituencies: Hemsworth, a working-class area in the North of England, held by Jon Trickett at the 2019 election with a majority of 1,180, and Holborn and St Pancras, a more middle-class area in central London, held by Labour leader, Sir Keir Starmer, with a majority of 27,763.

The categories in the table do not map neatly onto “working-class” versus “middle class” — but they certainly convey the difference between an area with declining traditional industries and another with thriving services and significant public sector employment. There is no doubt that the social and economic injustices of British capitalism bear far more heavily on Hemsworth. This is precisely where the pressures on Labour have been most acutely felt.

To have a future as a party of government, Labour must urgently reestablish its credentials at Hemsworth, while continuing to win in Holborn. If it does not, Pasokification beckons — and unlike in Greece, it will not be a party of the Left that benefits.

Learning From 2017

Can the trend be reversed? The 2017 election provided a clue that it can.

Labour did not win that contest. But it boosted its vote share by 9.6 percent (3.4 million votes), compared to 2015. It was the largest increase any Labour leader had achieved since 1945; and Jeremy Corbyn won nearly five million more votes than Gordon Brown had done in 2010. The central thrust of the campaign was to offer a transformational perspective, prioritizing the needs of the overwhelming majority. In 2017, Labour offered the possibility of profound social change for the first time in decades.

Long years of Labour decline were reversed by an insurgent campaign that mobilized tens of thousands of enthusiastic supporters. The strategy was based on building a wide-ranging electoral coalition that brought together people from all areas of society who desired change, overcoming the Brexit divide. The strategy was also based on a rejuvenated Labour Party, with a growing and youthful membership. If before the election Labour had been polling in the mid-twenties, on election day it drew over 40 percent support. The British people showed that they were ready for deep social change.

Even in Scotland, where Labour support has collapsed over many years, similar trends were visible. Telling in this regard are the comments of Neil Findlay, a Scottish Labour member of the devolved Holyrood Parliament. According to Neil, the Scottish party’s leadership wanted to focus the campaign on the constitutional issue of opposition to independence, “on a strap line something like ‘stronger together.’” The Left of the party wanted to adopt the same line as for the rest of Britain — “for the many, not the few.” In the end, this latter view was adopted.

So, Neil continued, “When it came to the actual Election Day, the atmosphere was completely different!” While Labour did not win the election, it managed to reverse the recent decline in its vote in Scotland. It retained Edinburgh South and regained several working-class constituencies that were previously lost.

The extraordinary gains of 2017 across Britain were, of course, eliminated in the election of 2019. As is well known, the Corbyn leadership came under enormous and scurrilous attack throughout this period from the media, establishment figures, and even within the Labour movement. PASOK never had to face anything of this kind. These attacks played an important role in the Labour defeat in 2019.

But the major factor of defeat was the party’s contradictory and confusing stance on Brexit — an issue considered crucial across working-class communities. Two years of prevarication, the party’s readiness to concede a second referendum, and the refusal to have an honest and open debate within the party also damaged members’ enthusiasm. Despite the even greater radicalism of its economic program, the 2019 campaign bore no relationship to that of 2017. The working class might care greatly about social and economic conditions, but it is also deeply concerned about democracy and popular sovereignty.

Still, the desire for deep social change has not gone away, especially as the pandemic has ravaged British society. Inequality and unemployment have soared, and huge swathes of working people’s incomes took a terrible mauling. At the same time, Boris Johnson’s government was forced to engage in unprecedented policies of fiscal and monetary expansion, effectively nationalizing the wage bill and the income statement of thousands of private enterprises. Radicalism in economic policy is perfectly plausible; there is no “orthodox” economic theory to disprove the need for radical measures, as the ideology of the last four decades kept telling us.

The Pasokification of Labour is a real prospect — but it can be avoided. For that, Labour must rediscover the political economy of capitalism and actively return to its working-class roots. Britain needs a radical economic program with a confident socialist message coupled with profound democratic and anti-corruption reforms. If Labour fails to provide that, it will only have itself to blame for its demise.