Considerations on Social Democracy in the United States

Author(s): Ira Katznelson

Source: Comparative Politics , Oct., 1978, Vol. 11, No. 1, Special Issue on "Policy
Problems of Social Democracy" (Oct., 1978), pp. 77-99
Published by: Comparative Politics, Ph.D. Programs in Political Science, City University
of New York

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 Considerations on Social Democracy
in the United States

Ira Katznelson *

European social and political observers have often regarded the economic
achievements of the United States, and the apparent fluidity of its social order,
with envy. In complementary fashion, the American Left (with politics ranging
from the liberal wing of the Democratic party leftward) has rather consistently
aspired to make American politics receptive to the proposals and practices of
European social democrats. Yet, if considerations of social democracy, as
movement and as program, are inherently difficult in the European context,
confusions abound when assessments are made of the relevance and meaning of
social democracy in the United States.
In part this difficulty is conceptual and linguistic. Much as Europeans have
frequently overestimated the open qualities of American society, so Americans
have tended to confuse social democracy with socialism. Socialism refers to an
outcome, which negates the basic features of capitalist productive and social
relations associated with the private control of capital and the extraction of a
surplus from labor by capital. Accordingly, the social command of capital and
the democratization of production relations have been at the core of the various
analytical and political approaches to socialism. Social democracy, by contrast,
refers to a substantive historical process of modifying and reshaping market
patterns, which for many-but by no means all--of its adherents promises an
end to capitalism in the distant and dimly seen future. Social democracy in
Western Europe has thus been a strategy of reform intended to make capitalism
more tolerable and less ruthless.
But even understood this way, social democracy is not a neatly self-
contained term. The roots of social democratic policies, as opposed to social
democratic movements, are diverse. They are to be found, of course, in the
pronouncements and practices of socialist and Marxist parties, unions, and
intellectuals, but hardly there alone. Precursors of social democracy also
include political liberalism, utopian socialism, and nonconformist Christianity.
In nineteenth century England, for example, those pressing for the expansion of
state activities to intervene in the market included a disparate group of labor
leaders, clergymen, Tory members of parliament, small squires, and philan-
0010-4159/78/1015-0005$05.00/1 77
@ 1978 The City University of New York

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Comparative Politics October 1978

thropists. Similarly in Germany, where the first "social democratic" program

was legislated from above, the leading intellectual advocates of Bismarck's
reforms were non-Marxist members of the school of historical economics,
Ricardian economists, and conservative monarchists.1
These diverse sources of modern social democratic programs point in a
cautionary way to a distinction between movements and policies. Leaving the
nationalization of industry aside, the social democratic program has had three
main elements: the extension of state planning mechanisms to interject social,
as opposed to market, priorities in the capitalist accumulation process; the
expansion of government programs of services, social insurance, and other
transfers (usually called the welfare state) to reshape and compensate for
allocations of the market; and the use of macroeconomic policy to minimize
unemployment rather than inflation. Making sense of this policy agenda is
made nettlesome in part because of its ambiguous relationship not only to the
creation of socialism, but to the recreation of the capitalist order.
Social democratic programs have been adopted everywhere in the West,
even in countries where social democratic movements are weak or nonexistent.
It is impossible to imagine that any capitalist democracy may achieve stability
and continuity without systematic-and expanding-uses by the state of the
main elements of the social democratic policy agenda. Thus, to take up the most
easily calculable aspect of social democratic programs, it is worth noting that
there have been no exceptions in the West to the direction and sustained
character of growth in welfare state expenditures since World War II. Overall,
for the Organization for Economic Co-Operation and Development (OECD)
countries, government expenditures have increased from an average of "less
than a third of national income in the early 1950s to more than a half in the
mid- 1970s"; the bulk of this growth is accounted for by domestic, as opposed
to external, expenditures. And of domestic spending increases, transfer pay-
ments have led the way: "The median percentage of national income accounted
for by domestic transfer payments grew from 7.3 percent in 1950 to 19 percent
in 1974, or by 160 percent, while the median percentage accounted for by other
domestic expenditures grew from 17 to 27, or by 59 percent."2
Such data on the rate of expansion of state welfare functions alone, or
comparable data on planning and macroeconomic policy, tell us very little
about the relationship of social democratic programs to the strategies and
aspirations of social democrats, since social democratic policies needed to
create socialism and to recreate capitalism bear so close a resemblance to each
other. New programs in areas of state expansion favored by social democrats
may become tools for managing the contradictions of advanced capitalism
without overcoming them and for gradually transforming the capitalist order.
This inherent ambiguity makes an assessment of social democracy very dif-
ficult.

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 Ira Katznelson

But the U.S. case is especially problematic, in part because of the confusing
similarity between the relationship of the Democratic party and the AFL-CIO
on the one hand and European social democratic movements on the other.
Similarities in working-class voting behavior, the role of labor support in
electoral policies, and the support by Democrats and American labor for the
expansion of some features of the welfare state make it tempting to pronounce
the Democratic party the vehicle of American social democracy, and the
AFL-CIO as its mass working-class base (not to speak of university and literary
intellectuals as America's Fabians). These resemblances, though genuine, are
superficial. "In the early and mid-1960s," David Greenstone notes, "the
American labor movement's role in the national democratic party represented a
partial equivalence to the Social Democratic (formerly socialist) party-trade
union alliances in much of Western Europe." Crucial differences include
divergent levels of class understandings, relatively weak American unions in
terms of membership and political capacity, and an explicitly procapitalist
orientation of the Democratic party.3 Making sense of the precise import of
these similarities and differences is a central challenge to the analyst of Ameri-
can social democracy. For even tentative considerations on American social
democracy-and I shall offer no more-require an awareness of the rather
uncertain status of social democracy in the capitalist versus socialist nexus, and
demand attention to the connections between the sources of the expansion of the
state's macroeconomic, planning, and welfare functions, and the character and
meaning of these interventions in the market.

It has rightly become a commonplace to observe that the American state has
grown spectacularly in this century. Total government expenditures accounted
for 12 percent of national income in 1929, 32 percent in 1954, and 42 percent in
1976.4 As Table 1 indicates, the most significant portion of this increase is
accounted for by domestic, not external (military plus foreign transfers) spend-
ing. Surveying trends in government activity between 1900 and 1950, Solomon
Fabricant noted that the upward trend in expenditures was shared by all
functions of government. "In not a single major function of the federal
government, the state governments, or the several types of local governments
did expenditures fall, or even rise less than prices over the 40 or 50 years for
which we have information."' Yet, the rates of growth were uneven. With the
exception of the two periods of world war, military expenditures and veterans
benefits and services rose at a rate below the average. The largest additions
came from the expansion of programs of social insurance, public aid, health,
and education. This pattern has continued in the third quarter of the century.

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Comparative Politics October 1978
Table 1 Government Expenditures, By Type, As a Percentage of National Income:
United States, Selected Years 1929-76

Total External Domestic

Year Expenditures Expenditures Expenditures

% % %

1929 ......... 12.1 0.9 11.2

1934 .......... 26.4 1.3 25.1
1939 ......... 24.6 1.8 22.9
1944 .......... 56.6 48.0 8.6
1949 .......... 27.9 8.6 19.3
1954 .......... 32.4 14.3 18.1
1959 ......... 33.0 12.0 21.0
1964 .......... 34.0 9.9 24.1
1969 .......... 37.2 10.2 27.0
1970 .......... 39.1 9.5 29.6
1971 .......... 39.7 8.5 31.2
1972 .......... 39.0 8.0 31.0
1973 ......... 38.0 7.2 30.9
1974 ......... 40.3 7.1 33.3
1975 .......... 43.7 7.2 36.6
1976 .......... 41.9 6.6 35.3

Source: G. Warren Nutter, Growth of Government in the West (Washington,

D.C., American Enterprise Institute, 1978), p. 15.

Although the dollar level of defense spending is the highest in history, in

terms it is identical to the level of expenditure at the outbreak of the Korean
in 1950, and it is now lower than at any time during the cold war. By cont
social welfare expenditures-defined "as cash benefits, services, and adm
trative costs of all programs operating under public law that are of direct be
to individuals and families"'6--rose from a per capita level of $211 in 1950
1967 dollars) to $934 in 1975.1 Such spending, one analyst has calculated
approximately fifty times greater than it was at the turn of the century, an
least five times what it was during the height of the New Deal. "Social we
spending," he concluded, "has now replaced defense spending as the maj
fiscal phenomenon of our era in terms both of magnitude and rate of increa
And while all social welfare expenditures increased by 314 percent (in cons
prices) between 1950 and 1975, public aid budget items (categorical
assistance programs) went up by 451 percent, and social insurance spendin
744 percent.9 How is this astounding growth of the state in the directi
preferred by social democrats to be explained?
It is possible to distinguish four leading views on the sources and character
state growth. In the first, the dynamics of democratic political regimes prov
the impetus for state programs which have modernized capitalism, and
have made its continuity more secure. Democracy, capitalism, and the we
state march hand in hand. The classic statement of this position is by T
Marshall. He argues that the granting of civil citizenship, the provision of ri
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 Ira Katznelson

necessary for individual freedom associated with the French and American
revolutions, produced successful demands for political citizenship in the
nineteenth century. In turn, the right to participate in the exercise of political
power through the franchise produced a politics of social citizenship, covering
"the whole range from the right to a modicum of economic welfare and security
to the right to share to the full in the social heritage."10 Citizenship has been
democratized and given the content of a social minimum. Open group and party
competition is the motor of this process, since it compels bids for mass support
that promise to domesticate the market.11 The principal causes of state expan-
sion are political, and the social democratic advances fashioned by the political
process do not undermine capitalism but help it function. Public political life,
however inequitable and contentious, produces gains in the direction preferred
by social democrats within a broad consensus about both property and democ-
racy.
A second view also sees the political process as the key source of state
growth, but understands these developments as a threat to the dominance of
market principles. The proper role of government is that of providing a
framework for market reproduction. Such a government should maintain law
and order, define property rights, adjudicate disputes, break monopolies,
enforce contracts, and deal only with the most glaring externalities. Such
programs as the minimum wage, industrial regulation, public housing, and
social security programs are to be resisted.12 Monetarist economist Allan
Meltzer argues that government grows in these undesirable ways because
democratic party competition and the politics of interest group life make
benefits of individual public policies specific and concentrated, while costs are
camouflaged and diffuse. In his view--one echoed daily in the editorial pages
of the Wall Street Journal and familiar to all who have paid attention to popular
discourse on the fiscal crisis of New York City-this combination is a "flaw in
the system of representative government," and as such threatens capitalist
development because it permits an escape from the discipline of the market.13
Only information costs keep a lid on an unchecked process of government
growth.14 It is noteworthy that socialists who are social democrats share this
perspective about the causes and consequences of state growth substantively,
but find it a source of hope.
A third view disagrees on both counts. It emphasizes the links between the
motion of capital and state growth, seen as a necessary feature of capitalist
development. The legitimacy of the capitalist system and its ability to continue
to accumulate capital depend on the existence of an increasingly interventionist
state which not only compensates for the deficiencies of the market, but makes
its reproduction possible. Planning, macroeconomic interventions, and welfare
state programs "are simply manifestations," in Claus Offe's words, "of the
institutional structure-i.e., the economic, social, and political mechanisms of
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Comparative Politics October 1978

advanced capitalism."15 Democracy is not the cause of state intervention in the

market. Since state imperatives are capitalist imperatives (the state acts on
behalf of collective capital to do what individual capitals competing with each
other cannot do), the Labour party can alternate in power with the Conservative
party, Republicans with Democrats, Christian Democrats with Social Demo-
crats (possibly even Communists) without affecting the basic components of
state activity. Modem advanced capitalism needs and fashions the modern
state. The growing concentration of capital and uneven economic development
motor the process. It is quite wrong, Ian Gough concludes, "to regard the
growth of the state as an unproductive 'burden' on the capitalist sector; more
and more it is a necessary precondition for private capital accumulation.''16
The last approach agrees with the third on the sources of state growth, but not
on its consequences. The state grows as contradictions of production and
distribution are displaced to the state. By politicizing these displaced contradic-
tions the state takes a role in overcoming capitalism. State growth is thus a part
of what James O'Connor calls the disaccumulation process of capitalism; the
interventionist state heralds the coming of a "primitive socialism."" In aiding
capitalist reproduction the state must act as a noncapitalist; it follows that as the
state grows, the noncapitalist, nonmarket sphere of society is enlarged, produc-
ing an ever more precarious equilibrium between capital and the state. In some
hands these contradictory tendencies of the modem state, simultaneously pro
and anti capital, are steadily resolved in a socialist direction.'8
For now it is important to note that each view is commonly utilized to explain
the growth of domestic state activities in a given single society, or to account for
the features of growth shared by all the capitalist democracies of Western
Europe and North America. Utilized in either of these two ways, each explana-
tion is entirely plausible and none may be completely refuted. Missing is a
mode of explanation that permits an understanding of specific national situa-
tions in comparative perspective.19 In the American case the dramatic growth
of the state in social democratic directions is striking to be sure, but so is the
relatively emaciated character of such programs, considered within the uni-
verse of the Western democracies as a whole.
Since the Second World War all the advanced capitalist states have sought to
apply tools of macroeconomics to manage the inverse association between
inflation and unemployment. At any given moment political authorities have
been able to select between various policy combinations and distributional
consequences that are class-specific. Inflation itself, Henri Aujac noted almost
three decades ago, is fundamentally a product of conflict between groups and
classes. More recently G.L. Bach and James Stephenson find that in the United
States inflationary periods have produced substantial shifts of current income
from profits to wages and salaries.20 Summarizing a great deal of economic
research of this sort, Douglas Hibbs argues that the conjunction of full employ-

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 Ira Katznelson

ment and inflation leads to a more equal distribution of income, while severe
deflationary policies are regressive. Both the objective interests of the working
classes of the West and their preferences differ markedly from those of the
dominant classes. It is thus notable that of all the major capitalist democracies
the mean inflation rate in the 1960s was lowest in the United States, while-
with the exception of Canada-its mean unemployment rate was the highest.21
Like macroeconomic policymaking, economic planning encompasses a
broad range of options with very different consequences. Central government
planning with respect to land use, regional distributions, labor market trajec-
tories, and industrial policy are common in virtually all the capitalist democ-
racies.22 In the United States, by contrast, although individual state policies and
clusters of policies have important ramifications in each of these areas, national
economic planning on the European states model does not exist. Planning in the
United States, Guy Benveniste observes, takes place "in many different indus-
trial firms, banks, market unions, voluntary groups, and think tanks, and it also
takes place in government agencies at all levels in the executive and to a limited
extent in the legislative branch ... there is no overall policy for the allocation of
resources.'"23
The National Resources Planning Board created by President Roosevelt in
1934, though only an advisory body, was the American institution closest to
that of a national planning agency. Its influence increased through the New
Deal years, but so did its adversaries. When it was abolished in 1943, the
Congress ruled that its functions were not to be transferred to any other agency.
Since that date, the diffuse, decentralized features of American planning have
been reasserted with a vengeance. Such a system underpins a high degree of
political and economic inequality, since planning resources are insulated from
public scrutiny and pressure.24 To be sure, as the Phillips curve tradeoff has
become more and more difficult to manage in recent years, and as neo-
Keynesian tools have proved inadequate to this task,25 increasing numbers of
policy advisors and policymakers have turned to centralized economic planning
as a possible solution.
Such a turn has not been the result of movement or popular demands, but is an
attempt to solve what appear to be technical "problems" of capitalist growth.
Indeed, the leading congressional sponsors of limited formalized national
economic planning, have taken great pains to stress the supportive role of such
efforts for private enterprise. Planning as problem-solving, they stress, repre-
sents an attempt to provide an acceptable framework for the market. As such,
S.M. Miller reminds us, "planning is not necessarily a progressive redistribu-
tive tool."26 Much that passes for the rudiments of planning in the United
States-independent regulatory commissions and regional authorities, for
example-has severed the link between the economic functions of the state and
the dynamics of citizenship.27 As a result, even the limited pro and anticapital

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Comparative Politics October 1978

tensions characteristic of the European planning experience have been absent in

the United States.

Welfare state programs and expenditures in the United States have also been
qualitatively different from those of European social democracy. In 1949, after
more than four full terms of Democratic party rule, the United States ranked last
among industrial capitalist states in social welfare expenditures (4.4 percent of
GNP). The United States remains at the bottom of such comparative rankings.
The size of the American state sector as a proportion of GNP remains relatively
low at 33.2 percent, compared to 38.8 percent for France; 40.5 percent for
Germany; 43.4 percent for Britain; and 47.4 percent for Sweden. Moreover,
with the exception of France, the relative size of the American state grew more
slowly than that of any other OECD country between 1962 and 1975. The same
pattern holds for spending on income transfers and for the character and growth
of taxation. Of the European and North American states, the United States spent
the lowest proportion of GNP on transfers in this period, and again with the
exception of France, had the lowest rate of increase. Similarly, American
citizens are more lightly taxed than other Western citizens, and, with few
exceptions, are more regressively taxed.28

II

How are we to make sense both of the growth of the American state in social
democratic directions (especially in terms of welfare state expenditures), and of
the low rankings of the United States in the "league tables" of social democ-
racy? More generally, how are we to account for a trajectory of state expansion
shared by all the capitalist democracies and the distinctive features of social
democratic policies in different national settings?
An answer to these questions should begin with an acknowledgement that the
sources of state growth need not be exclusively structural or volitional, and that
the character of social democratic policy may support the recreation of a
capitalist order while being at least potentially antagonistic towards it. The
precise balance between the sources and meanings of state activity in a given
society at a given time depends on the competing political capacities of
historically specific social classes.
All too often class has been used either as an analytical construct fabricated
by an observer, apart from people's dispositions, or it is used to refer to groups
of people who share a well-understood consciousness and set of activities. It is
both more precise and analytically more useful to treat class as a multilevelled
concept that corresponds with and describes a multilevelled reality. First, the
process of capitalist accumulation sorts people into places of production. At this
"objective" level, collective capital is divided from collective labor and
laborers are divided into productive and unproductive workers in the technical

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 Ira Katznelson

Marxist sense. Class at this level does not directly produce behavior, or even
dispositions to behave. Rather, it is a tool for the analysis of the trajectory of the
accumulation process and of its contradictory tendencies.29 Class at this level,
however, sets limits on and informs the experiences of class at a second level,
i.e., that of social relations in the labor market and the occupational order at
work, in residence communities, and in the political realm of citizenship. This
level, like the first, is one of "objective" patterns, but unlike class at the level
of accumulation it is more directly linked, at least potentially, to class at the
level of shared dispositions."3 The character of the interplay between the
second level of the social relations of class and a third level of class
formation-in other terms the interplay between a set of givens prod
principally by the historical and spatial logic of capitalist development
one hand and class traditions and cultures on the other-is what is distinctive
about the dynamics of class and class conflict in any single national society.31
To understand this antinomy in specific places and times is to understand how
class exists at each level, and whether and how it exists at the level of class
formation. It is also to understand classes as historical social groups with
unequal and competing capacities. Class, in all its levels, intersects history,
structure, daily life, biography, and dispositions. The relative capacities of
classes to shape the social order generally, and to effect state policy more
particularly, are thus in large but not exclusive measure, the product of class
relations in this total sense. Not exclusively, because political class capacity is
also shaped by the state itself, by its organization, accumulated history and
practices, and by the degree of autonomy it possesses.
The formulation of competing class capacities provides the potential to
connect the structural and volitional in political analysis. At any given moment,
the political capacity of a class to secure its interests depends primarily, but not
only, on its position with respect to production. Class capacities are also the
result of the accumulated heritage of previous political decisions;32 the relative
capacities of competing ideologies, value systems, and cultural practices;
available mechanisms of physical repression; the distributional features of labor
and consumption markets; and the patterns of political institutionalization by
which different classes are connected to the polity.33 The dimensions of
political conflict, seen this way, are neither disconnected from the conflicts
immanent in the social structure, nor are they givens or outcomes, but parts of
an ongoing dialectical process of cohesion and challenge.
This perspective implies a way of thinking about the state that is distinctive
from traditional pluralist analysis as well as from instrumentalist or structuralist
Marxism. The state is neither a neutral switchboard for competing claims nor a
perfect mechanism for reproducing capitalist society. Rather, the state itself is
seen as a distinctive "product" and "determinant" of class reproduction
requirements and class conflict. "The problem facing advanced capitalist
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Comparative Politics October 1978

social formations is how can the capitalist state be structured so as to perform

functions dictated by economic contradictions given the actual or potential
existence of a politically organized working class.""34 The state, in these terms,
is understood as the product of the distinctive calculus of tension in a given
society between objective developmental tendencies and the dynamics of
volitional class organization and demands.
From this perspective the sources of the expansion of the state's mac-
roeconomic, planning, and social welfare functions informs their character; and
their character in turn is an element determining relative class capacity. The
state's social democratic, potentially antimarket, cluster of policies develops in
two interrelated ways. First, the ordinary operation of the capitalist political
economy requires a variety of state activities for the recreation of capitalist
productive and social relations. We do not possess a precise understanding of
what these requirements are; we lack such a theory. What we do have, in the
work of James O'Connor, Ian Gough and others, is a plausible statement about
how the reproduction of relations in and of production is assisted by a particular
configuration of state policies. But even if its precise content is not known, it
seems beyond doubt that a reproduction minimum of social democratic state
policies is required to insure the accumulation process and to give it broad social
acceptance.
The level of the social democratic minimum varies from time to time and
from state to state. It represents an amalgam of what has come to be both
economically and culturally necessary. The minimum is in part genuinely a
minimum by intention; it connotes a widely shared set of meanings and
understandings about the appropriate dimensions and character of state inter-
ventions in the market. Although largely the result of past class and group
struggles, the minimum at a given moment is no longer the subject of struggle.
While the National Health Service in Britain, for example, could hardly be said
to have been necessary to reproduce capitalism, it is today part of that country's
social democratic minimum both in the sense that if it were revoked mass
disruption threatening productive relations would be likely, and because it is
now an assumed integral part of the social scene, accepted as such by all classes
in the society.
In political terms policy developments within the framework of the reproduc-
tion minimum are principally the result of attempts to solve "problems" which
appear technically and socially neutral. The inflation rate is high, investment in
a given region too low, rivers are polluted, etc. To such problems adminis-
trators and contestants for the vote are compelled to respond in a manner that
resembles political learning.35 They also must not overturn previous social
democratic gains in fundamental ways because once enacted policies become
part of the reproduction minimum. The agenda of social democracy thus may be
enacted into law, made government practice, and be protected from attack by
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 Ira Katznelson

antisocial democratic political forces even where no social democratic party or

movement exists. Under certain conditions, however, such parties and move-
ments may succeed in moving social democratic reforms forward at a pace more
rapid than that dictated by the emergence of the manifest "problems" of past
concessions of the capitalist order. When such attempts succeed, it makes sense
to speak of a social democratic surplus. The level of social democracy in a given
moment is the sum of the reproduction minimum about which there is broad
communal consensus, and the results of current contentious, factional group
and class conflicts. The dimensions of the minimum inherited from the past,
and struggles about whether and to what extent a surplus will be fashioned in the
present, are functions of the strength of a nation's social democratic movement.
All advanced capitalist states must use macroeconomic tools. But how they
select from amongst available policy alternatives depends heavily on the
institutionalized capacities of competing classes to insert their interests and
views into the political process. In this regard, Hibbs finds that the most
important factor explaining national differences is the preference schedule of
parties in power. Social democrats tend to rank full employment significantly
ahead of price stability as a priority goal; conservatives sharply reverse the
order of priorities; centrist parties have less clear-cut views but tend to em-
phasize price stability. Correlated time series data on unemployment and
inflation rates with governing parties demonstrate a consistent pattern:

Class cleavages... are reflected in the macroeconomic outcomes observed

during the tenure of left- vs. right-wing governments. Highly aggregated cross-
national data showed that the countries regularly governed by labor oriented
working-class-based Socialist parties exhibit average unemployment levels
below the West-European-North American median and average rates of inflation
above the West-European-North American median. In contrast, nations domi-
nated by business oriented, middle class Center and Right-wing political parties
have on average experienced above median unemployment rates and below
median inflation rates.36

Moreover, within countries in which major political parties alternated in power,

as in Britain, lower unemployment levels were associated with social demo-
cratic administrations. Such a pattern prevails in the United States as well, but
only within a framework significantly more conservative than any but its
Canadian counterpart.
It is important not to lose sight of the contradictory character of social
democratic movements and programs. In the past decade it has been understood
that social democracy in Europe has become "mature capitalism' s main politi-
cal guarantor, ideological legitimizer, and structural partner.""37 Given all the
tendencies in this direction, it also seems clear that any conceivable path to
democratic socialism in the United States will require a social democratic
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Comparative Politics October 1978

movement. Placed in comparative perspective, the United States is much

further from even the remote possibility of democratic socialism that any
Western society with a history of viable social democratic movements. The
existence of such movements, and the social democratic surplus they are able to
create, shift the ideological and structural planes of social relations to levels that
make both the social command of capital and the democratization of production
relations-the twin centerpieces of democratic socialism-genuine future al-
ternatives. Whereas the generic ambiguity of social democracy "embodies a
dialectical ambivalence," and may simultaneously "play an important
system-saving role for capitalism [and] ... represent head-on challenges to the
capitalist system,""38 American liberal reformism has largely lacked this poten-
tially contradictory dynamic. The present absence of this tension in the political
system is the most important barrier to socialist aspirations. Because of its
absence, socialism, for the vast majority of Americans, is not plausible.
Interpreting Antonio Gramsci's concept of hegemony, Raymond Williams
has stressed the depth to which values, institutions, ordinary language, and
routine patterns of daily behavior create cohesion-not by externalized com-
pulsion, but by internalized compulsive practices "which are lived at such a
depth, which saturate society to such an extent," that capitalist hegemony
"constitutes the limit of common sense for most people under its sway.""'
European social democracy has nowhere created socialism, but it has shifted
the locus of the dual patterning of class, discussed above, sufficiently to make
socialism conceivable, because in limited ways it is part of the experienced
social reality of most people. The capitalist-socialist antinomy in societies such
as Sweden or even West Germany is thus qualitatively different from that in the
United States, because the existence of social democratic movements and their
successes in fashioning surplus social democracies has altered the terms of the
conflict of class capacities.
As a limiting case, consider Sweden. For nearly a half century the Swedish
regime was controlled by SAP (Social Democratic Workers party) which
commands the very powerful resources of the country's labor movement. Fully
60 percent of the Swedish labor force belongs to a trade union, the highest
percentage in the West (the comparable figure for the United States is approxi-
mately 25 percent). Moreover, even in defeat, SAP remained the party of the
Left which commanded the largest proportion of the vote of all social demo-
cratic, socialist, and communist parties in the West in the 1970s.40 For most of
the past fifty years the governments of Sweden pursued Keynesian growth
policies in rather conventional forms. Yet, the power of office and the resources
of the labor movement enlarged the "relative" autonomy of the state. Swedish
political elites, while subject to the constraints of capital and capitalist patterns
of development, have enjoyed "considerable independence from elites in
capitalist political institutions. The result over the long term has not merely

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 Ira Katznelson

been successful management of capitalist production and distribution, but a

growing socialization of investment 'primarily' in forms which replace private,
mainly business, savings by public sector savings via the budget.""41 When
SAP will return to power, the likely next step is the creation of new forms of
investment that sever the connections between equity financing and claims to
unequal distributional shares of the national product. Sweden has been the most
successful social democratic case, since the continuity of the political control of
SAP and its command of labor resources have provided the most fertile context
for such programmatic developments. Yet every other European society with a
significant social democratic movement has played a role in the control of
capital for the public sector which presently seems implausible in the United
States.

The creation of a social democratic surplus has in fact made socialism more
plausible to Swedish workers. In his comparative study of British and Swedish
social democracy, Richard Scase finds the Swedish case belies the common
thesis that deradicalization is a conventional feature of workers' parties in
advanced capitalism. Rather, as a result of SAP's decades long objective of a
more egalitarian, if still capitalist, society, Swedish workers "were more aware
of-inequality" and resented the differentials between capital and labor more
than their English counterparts, who tend to stress intraclass differentials. The
very success of SAP in creating a surplus social democracy has heightened
workers' awareness that there are contradictions between further substantial
gains in the direction of equality and a capitalist political economy dominated
by the profit-seeking imperatives of private capital.42
It may be objected, as Hugh Heclo has, that a close study of the genesis of
landmark social policies in Sweden in terms of close causality-he studied
unemployment insurance, old age pensions, and superannuation-reveals that
such advances could not be said to be either the product of the social democratic
movement, or an automatic product of capitalist development. Rather, he
argues, the place of civil servants, policy-middlemen in his terms, has been
crucial:43

The creation of modern social policies, at least those discussed here, cannot be
said to have resulted from the electoral rise to power of a working-class intent on
legislating in its own interests; alternations of party power in government have far
more frequently maintained the momentum of existing policy than given expres-
sion to parties' deliberately announced and campaigned for alternatives. Interest
group concern in policy has been sporadic and largely limited to specific issues of
immediate self-interest... Policy-making is a form of collective puzzlement on
society's behalf; it entails both deciding and knowing... The importance of
policy-middlemen has sprung not from any unique powers of abstract thought,
but from sensitivity to the changes going on around them and access to powerful
institutions.

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Comparative Politics October 1978

Heclo, I would argue, has correctly understood, first, that the precise provi-
sions of particular acts of public policy are rarely determined by party or union
positions or capacities; and second, that government officials play a key role in
interpreting what is required at a given moment as a result both of "socioeco-
nomic conditions" and the ways in which party and interest groups have
organized "general predispositions to policy choices." But the gross correla-
tions between the size and strength of social democratic movements and the
character of the social democratic policies of the capitalist states over many
decades can neither be ignored nor subsumed under an explanation of political
learning. It is beyond the scope of this paper to explore these cross-national
patterns in any depth. But the correlation between the character of American
social democracy and its causes, in the absence of a movement capable of
securing a social democratic surplus, is not fortuitous.
The Swedish case is as exceptional as that of the United States. Without
continuous control of the state for very long periods, what accounts for the
ability of social democratic movements to push the development of social
democracy forward? It is not disingenuous to respond, their potential creation
or their very existence. At moments of major political and economic crisis,
understood as periods of high degrees of indeterminancy, the organized capac-
ity of a given working-class may alter the basis of the society's class
compromise-its social formula-by tangibly providing a potential alternative
to the existing order. Bismarck and later Lloyd George legislated social insur-
ance in large measure to prevent growing labor movements from forming
separate working-class parties. When such parties provide the "loyal" opposi-
tion, the extent of their loyalty, especially as their members become more
restive, may be in doubt. In answer to Joseph Chamberlain's question, "What
ransom will property pay for the security it enjoys?," the price of the ransom
rises to the extent that security is threatened. Even in more routine periods the
very existence of a credible electoral alternative and a generalized organized
capacity by workers to withdraw their cooperation from the process of produc-
tion, even if only for a short time, severely constrains the capacity of the state
and the dominant classes. Thus, Andrew Martin notes, the conservative British
governments of the 1950s had to maintain the high employment policies of their
predecessors despite good economic reasons not to do so (inflation and the
balance of payments deficits were chronic problems). The Labour party pro-
vided a brake on government activity by its very existence as a potential
government. 44

III

The United States is distinguishedfrom other Western capitalist democracies in

that it lacks a regular political vehicle for securing a social democratic surplus.
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 Ira Katznelson

Whereas even the most moderate social democratic party has an institutional
and ideological need to push for action in the spheres of planning, macro-
economic policy, and welfare state spending beyond the reproduction
minimum, the instruments of political reform in the United States are almost
exclusively agencies for "problem-solving." As a result major expansions of
the American state in social democratic directions have come principally in
those unusual periods when irregular ad hoc mass social movements have
succeeded to compel concessions by their disruptive behavior. Thus, the
achievements to date of American social democracy have had little to do with
the persistent pressures of social democrats. To the extent that it may be said to
exist, American social democracy is unlike any other. It is a cluster of ideas,
motives, programs, and sensibilities without a coherent organized popular
movement or base.

A problem-solving technocratic style of reform has been predominant in

American politics. It is instructive to note, for example, how similar the
definition of a "problem" may be at a given moment even across party lines. In
1912, Democrats, Republicans, Progressives, and Socialists identified indus-
trial regulations as such a problem. Surrounded by very different articulated
goals, all their platforms favored such items as food and drug regulation, albeit
for different instrumental reasons. At other moments, the Democratic party
itself has become the umbrella for the formation of such a problem-solving
consensus. The broad coalition forming in favor of more extensive planning
today is such an example. Its adherents include Felix Rohayton, Henry Ford,
and Michael Harrington. When "problems" of the capitalist order manifest
themselves, the capitalist and the socialist can often work together. Such
coalitions carry the structural reproduction imperatives of the system and a
broadly based cultural consensus, and thus often succeed in moving the state in
new directions. In the American experience, given the structural mobilization
of bias of the political economy and the absence of a social democratic
movement, the socialist members of these coalitions have been the losers in the
long run.
Without a vehicle for securing a social democratic surplus, state social
democratic expansion in the United States principally takes the technocratic
problem-solving mode. The best internal summary of the analytic idiom of the
problem solvers is Jesse Burkhead and Jerry Miner's synthesis of work by
American economists on the theory and policy analysis of public expenditures.
The expansion of the state is made possible by economic growth which
generates increased tax revenues. At the same time economic growth generates
needs for public expenditure in the following ways. Economic development
produces dynamic of changes in the organization of production and the level of
urbanization:45

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Comparative Politics October 1978

A common pattern appears in all economies that have moved to higher stages of
development. The processes of economic growth are initiated in manufacturing.
The growth of manufacturing involves an increase in urbanization and a decline in
the relative importance of agriculture. The growth of an urbanized area provides
the necessary complement of service activity to accompany manufacturing and
the concentration of population. Economic activity becomes more specialized
and interdependent; new increases in the level of output require additional
facilities for communication and transportation. Occupations and firms within the
developed and urbanized economy are thus more highly specialized. A larger
volume of social overhead capital is necessary to sustain the increased complexity
of patterns of transportation and communication, and to further encourage
specialization and interdependence. Additional services for police and fire protec-
tion and sanitation are required to meet the needs of a concentrated population.

These imperatives of accumulation are only part of the story of state expansion,
because "increases in economic activity, and the accompanying specialization
and interdependence, tend to generate a large volume of externalities," which
contribute to the failure of private markets. Declining housing investment in
neighborhoods with little market attraction is a case in point. The public sector
grows in response to these externalities with programs of regulation of pollu-
tion, income transfers, etc. From this dominant perspective of American
welfare economics and theories of public finance, state growth is the product
both of social overhead requirements and external costs generated by private
sector development, a view different in terminology, but not in substance, from
that of James O'Connor.46

Much of the discourse by scholars working on this subject concerns precisely

the development of analytical tools to identify optimal levels of state programs,
with efficiency, stabilization of economic activity, and growth the core values.
The public sector, from this vantage point, has some special characteristics.
Most important is the absence of price tags to link specific outlays to specific
contributions by taxpayers. The profit yardstick is absent; hence, alternatives to
the guide of profit maximization are necessary. At the heart of virtually all the
theories of public expenditure which seek such alternative guidelines is what
Paul Samuelson labeled "the pure theory of public expenditure." His 1954
article built on Richard Musgrave's basic contribution to the analysis of public
goods, defined as those characterized by jointness of supply and the inability to
exclude. Such public or social goods are inherently unsuited to distribution by
market mechanisms."47 To public goods, Musgrave later added "merit goods"
as a proper object of government activity. These, while not meeting the tests of
exclusion and jointness, nevertheless present problems for decentralized mar-
kets. They are, he writes, "so meritorious that their satisfaction is provided for
through the public budget, over and above what is provided for through the
market and paid for by private buyers .... The satisfaction of merit wants, by
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 Ira Katznelson

its very nature, involves interference with consumer preferences."48 Much

subsequent work, by Francesco Forte and Gerhard Colm among others, has
been aimed at refining the merit goods notion.49
In short, there are an elaborate and sophisticated literature and tools which
provide a framework for an identification of a social democratic minimum. To
the extent that the class capacity of a working class is weak, the definition of
what constitutes "merit goods" can be made in apparently technically neutral
ways by policy planners in accordance with the reproduction requirements of
the capitalist political economy as they see them. American political parties are
part of this world of problem-solving. As Everett Ladd observes, they mediate
demands "on behalf of regime stability and system maintenance."5 0 This is the
predominant mode of social democratic state expansion in the United States. As
a result, more than in any other Western society, the expansion of the state has
been determined in pace and scope by the interests, needs, and capacities of the
dominant class. We may infer that the role of the state may be understood as
being very close to the structural minimum necessary for system reproduction.
A surplus social democracy does not exist because those who would be served
by it lack the capacity-that is, both the disposition and the ability--o bring it
into being.'
Frances Piven and Richard Cloward have stressed that important expansions
in the social democratic role of the state have occurred during periods of
political crisis in response to mass disruption, defiance, and protest by ad hoc
social movements in the 1930s and 1960s. Major initiatives in social policy are
the product of such special times and activities; but the internal logic of such
movements leads to their demise and to a very limited residue of reform.52 They
stress that irregular action, not organization, is the key to understanding the
development of the welfare state, and that the organizational phase of irregular
movements substantially produces the close of periods of reform. Within the
American context, their work is persuasive, but only in that context. That is, in
the absence of a regular vehicle for social democratic reform, the achievement
of a social democratic surplus is rare, and when it occurs it is an outcome of elite
fears and concessions to ad hoc movements. Their limited impact is likewise
largely assured by the absence of more regular and enduring mass organiza-
tions. Thus, a general conclusion about the relative efficacy of disruption
versus organization is not warranted. They are right, however, to stress that in
the United States only relatively expressive and inchoate defiance has been a
recurring, if fleeting vehicle for creating a social democratic surplus.
Indeed, the American pattern described by Piven and Cloward is strikingly
similar to the dynamics of social democratic policy innovation in England in the
1880s, when the resources of the new unionism were only beginning to be
available to British workers, and those of the Labour party were more than a
decade away. The disruptive protests of London's casual workers were marked
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Comparative Politics October 1978

by the absence of a coherent movement ideology, and by the "co-existence of

violence and reformism."53 Writing in February 1886, George Bernard Shaw
noted that, "Angry as they are, they do not want revolution, they want a job. If
they be left too long without it, they may turn out and run amuck through the
streets until they are destroyed like so many mad dogs. But a job or even a meal
will stop them any time."54 This expressive radicalism nevertheless provoked
panic amongst politicians and professional reformers. The predominant feeling
was not one of guilt, but one of fear. The response to this social crisis did in fact
produce advances for the poor, as the collective sphere of the state expanded.
But, as Stedman Jones stresses, these new policies can only be understood as
part of an effort to reassert order and social control. For every proposal to
provide subsidized housing and meals, there were "parallel proposals to
segregate the casual poor, to establish detention centers for 'loafers,' to sepa-
rate pauper children from 'degenerate' parents or to ship the 'residuum' over-
seas.' 55 In the context of the very limited political capacity of the disorganized,
presocial democratic English working class, repression and reform were joined
by policymakers in an effort to find a formula for system reproduction.
Given the resources of American trade unions since the mid- 1930s, programs
of social insurance--closely tied to the interests of workers employed by large
capital56--have grown at rates which have closed the gap between Europe and
America. But in the other areas of social democratic expenditures, the
dynamics of class capacity and policymaking remain much like those of the late
nineteenth century England. Here, the lag between American and European
policies is especially pronounced. "With regard to noneducation public ser-
vices and benefits in kind, such as health services and public housing,"
Heidenheimer writes, "where markets have been dominated by private
suppliers, U.S. programs have lagged behind European ones by as much as two
generations. These programs long remained in the 'non-takeoff' category,
exhibiting low growth rates compared to their European equivalents.""57
The centrality of the competing political capacities of the dominant and
working-classes generally and the importance of the absence of a social demo-
cratic movement, which regularly is a vehicle for attempts to fashion a social
democratic surplus in the United States, draws us inescapably to a very old set
of questions about the "exceptional" character of the experience of class in the
United States. Sometimes, as in Werner Sombart's query, "Why is there no
socialism in America?,""58 the comparative frame of this agenda is clearly
stated. But even where not explicitly elaborated, this question, or a variant of
this, is central. Although this paper is hardly the place for a developed review of
the answers we possess-I try such an effort elsewhere-59 I should like to
conclude by presenting the skeleton of an alternative approach.
The term "American exceptionalism" is often used as if it provided a
self-evident explanation. But its meaning is hardly obvious because the Ameri-
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 Ira Katznelson

can experience is not as exceptional as conventionally thought. If the issue is

Sombart's, there was a significant socialist movement in America, especially in
the period in which he wrote. It is by no means clear that the road ahead for a
mass socialist party looked any more open in England in 1900 than in the United
States. And if the issue is why the United States is not a socialist society, then
the United States hardly stands alone. If the issue of American exceptionalism
hinges on Lenin's distinction between revolutionary and trade union con-
sciousness, then the United States is quite typical. Nowhere in the West has the
proletariat lived up to Lenin's revolutionary standard. At least to date, the most
revolutionary activities of the working-classes in Europe and North America
have been their early resistance to the creation of the capitalist order itself. Nor
is the issue of American exceptionalism one of the absence of class related
conflict. American history is littered with the passion of some successful, but
mostly lost causes. As Progressive historians like Beard and Parrington under-
stood so well, America's past is a record of extraordinary resistance and
struggle. Labor organizing disputes, violent strikes, indirect resistance to the
authority of capital (as in sabotage, absenteeism, and shopfloor crime), com-
munity based land use and school conflicts, and struggles against the state have
been characteristic features of the pattern of class conflict and disequilibrium in
American capitalism. In all of these ways, the United States does not seem
qualitatively different from other Western capitalist societies.
And yet, the issue of American exceptionalism cannot be dismissed by
reference to the absence of socialism or revolutionary currents elsewhere, or to
the occurence of conflict in the United States. As in all other capitalist states,
the "economic motion" of capital underpins struggles at work, in residence
communities, and between citizens and the state. But more than in any other
capitalist society, each of these arenas of class conflict has been unusually
enclosed and encapsulated. The links, especially between work and community
conflicts, have been tenuous. Each dimension of class conflict has had its own
vocabulary and forms of institutional expression: work-class and unions; and
community-class and local parties, churches, and voluntary associations. Class
has been lived and fought as a series of partial relationships, and is therefore
experienced as one of a number of competing bases of social life. Even in this
regard, however, the United States is far from unique. The differentiation of
social life into work, community, and state relations is an objective feature
characteristic of all capitalist (and perhaps all industrial) development. It often
finds subjective expression so that "the domain of life outside work appears to
constitute an autonomous sphere of private life."" What is distinctive about
the American experience, however, is the extent to which the linguistic, cul-
tural, and institutional meanings given to this differentiation have taken so
extreme a serial character, and for so long. What has been "exceptional"
about the American experience of class is that the split between work and
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Comparative Politics October 1978

community has been reproduced ideologically and institutionally in ways that

have fragmented patterns of class in a qualitatively distinct way. Elsewhere in
the West the tendency to parcelization has been partially countered by compet-
ing "global" institutions and meaning systems of class, which do not necessar-
ily entail revolutionary interpretations of capital and the class structure. Global
or total interpretations are to be found in the history, rhetoric, and programs of
social democratic and laborist parties, unions, and voluntary organizations. It is
the virtual absence of even such moderate global approaches to class-and the
massive resistance to such attempts made in the past-which is so striking about
the American experience.
This pattern of segmented class relations is the central political feature of the
American calculus of competing class capacities. Its sources may be located in
the intersection of the dynamics of capitalist development and citizenship in the
three decades before the Civil War. In this period, the creation of a modern
working-class principally in the older, predominantly mercantile cities of the
East entailed the physical and social separation of work and community and was
accompanied by a number of reinforcingpolitical trends, collectively defining
the terms by which workers would be linked to the polity: federalism, franchise
extension, a modern national party system, and its neighborhood machine
affiliates. Citizenship intersected community, not work. In this way, citizen-
ship and its bases were given communal meanings, separate from work rela-
tions. For white males access to the regime by the 1830s was established on
communal institutional and ideological bases at the very moment when class
schisms were beginning to sunder notions of peoplehood at the point of
production.
Into this crucible migrants from American farms, from Europe, and from the
South were poured. The demographic and cultural divisions of American
workers were thus given reinforcement as they were given partial meanings.
Ethnicity has always had a material work-connected component. But in its
communal settings, reinforced by the politics of federalism and party, this
dimension was severed artificially from that of culture and identity. The frag-
mented character of the working-class has thus contributed to the serial pattern
of class in the United States, but not in the way the issue is conventionally
understood. For ethnic fragmentation was not the direct cause; rather the
division of immigrant workers into the cultural ethnic in his or her place of
residence, and into the laboring ethnic at the point of production has made
ethnic divisions within the working-class a contributory factor. But as the
recurrent unity of workers across ethnic lines at the workplace indicates, the
most important division is not between different ethnic workers, but between
the work and communal parts of their lives. And it is at the level of community
that ethnicity has defined the basic social and political units of the social
structure, and thus has defined the phenomenal terms of group conflict.

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 Ira Katznelson

This legacy has produced the main barriers to the emergence of a social
democratic movement in the United States on the European model. Even most
of the successful radical movements in the recent past have reproduced the
divisions of work and community, and the consequential limited under-
standings of class, race, and ethnicity. The relevance of European social
democracy to American practice and the possibilities for democratic socialism
in the United States hinge on overcoming these deeply rooted divisions.

NOTES

*An earlier draft of this paper was presented at the Conference on Democratic So
Research Institute on International Change, Columbia University, October 1976. I have be
from the comments of Brian Barry, David Gold, J. David Greenstone, Christopher Jencks
Kaplan, Mark Kesselman, Andrei Markovits, Martin Shefter, Allan Silver, and Aristide Z
have learned much from their criticisms, more than is reflected in the pages below.
1. See Asa Briggs, "The Welfare State in Historical Perspective," European Jou
Sociology, 11 (1961).
2. G. Warren Nutter, Growth of Government in the West (Washington, D.C., 1978)
3. J. David Greenstone, Labor in American Politics (New York, 1969), pp. 360-71.
4. Nutter, p. 13.
5. Solomon Fabricant, The Trend of Government Activity in the United States since 19
York, National Bureau of Economic Research, 1975), p. 58.
6. Alfred Skolnik and Sophie Dales, "Social Welfare Expenditures, 1950-1975,"
Security Bulletin, XXXIX (January 1976), 3.
7. James L. Clayton, "The Fiscal Limits of the Welfare-Warfare State: Defense and
Spending in the United States since 1900," The Western Political Quarterly, XXIX (Sep
377.
8. Ibid., 382.
9. Skolnick and Dales, 10. They also take note of the trend for the share of private welfare
expenditures to fall over time as a proportion of total social welfare expenditures (18-20).
10. T.H. Marshall, Citizenship and Social Class (Cambridge, 1959), p. 10.
11. See Greenstone, "Group Theories," in Fred Greenstein and Nelson Polsby, eds. The
Handbook of Political Science (Reading, [Mass.], 1975), Vol. II, pp. 243-318.
12. Milton Friedman, Capitalism and Freedom (Chicago, 1962).
13. Allan H. Meltzer, Why Government Grows (Los Angeles, International Institute for Eco-
nomic Research, Original Paper 4, 1976).
14. Anthony Downs, "Why the Government Budget is too Small in a Democracy,'" in Edmund
S. Phelps, ed. Private Wants and Public Needs (New York, 1965), pp. 76-95.
15. Claus Offe, "Advanced Capitalism and the Welfare State," Politics and Society, II
(Summer 1972), 480.
16. Ian Gough, "State Expenditure in Advanced Capitalism," New Left Review, No. 95
(July-August 1975). Gough's statement raises difficult questions about "necessity." Are policies
and expenditures "necessary" in logical or volitional terms? I argue below that the necessary social
democratic minimum in a given society at a given moment is an amalgam of economic and cultural
requirements. For the present we possess no theory with the capacity to lay out in advance if a given
state action is "functional" for capitalism.
17. James O'Connor, Class Struggles: Studies in the Marxist Theory of Capitalism and So-
cialism (forthcoming).
18. See Elmar Altvalter, "Notes on Some Problems of State Interventionism;" and Offe, "The
Abolition of Market Control and the Problem of Legitimacy," Kapitalistate, I, no. 1 (1973).

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Comparative Politics October 1978

19. Exceptions include Arnold Heidenheimer, Hugh Heclo, and Carolyn Teich Adams, Com-
parative Public Policy: The Politics of Social Choice in Europe and America (New York, 1975);
and Heidenheimer, "The Politics of Public Education, Health and Welfare in the USA and Western
Europe: How Growth and Reform Potentials Have Differed," British Journal of Political Science,
III (July 1973).
20. Henri Aujac, "Inflation as the Monetary Consequence of the Behaviour of Social Groups: A
Working Hypothesis," in Alan Peacock, et al., eds. International Economic Papers, No. 4.
(London, 1954), pp. 109-23; F.L. Bach and James Stephenson, "Inflation and the Redistribution
of Wealth," The Review of Economics and Statistics, XLI (February 1974), 1-13.
21. Douglas A. Hibbs, Jr., "Political Parties and Macroeconomic Policy," The American
Political Science Review, LXXI (December 1977). Between 1950 and 1969, average rates of price
increases were about twice the average levels of unemployment in Sweden, while in the United
States the corresponding ratio was about 0.5. Andrew Martin, The Politics of Economic Policy in
the United States: A Tentative View from a Comparative Perspective (Beverly Hills, 1973), p. 10.
An especially illuminating discussion of these matters may be found in Brian Barry, "The Inflation
of Political Economy: A Study of the Political Theory of Some Economists," (unpublished
manuscript prepared for the Brookings Project on The Politics and Sociology of Global Inflation). I
should add that inflation, of course, is not the only way equality of shares is promoted. Such
redistribution, for example, occurred during the Great Depression as profits flattened.
22. The best comparative overview is Jack Hayward and Michael Watson, eds. Planning
Politics, and Public Policy (London, 1975).
23. Guy Benveniste, The Politics of Expertise (London, 1973), p. 81.
24. Ibid., p. 103. Also see, Neil Chamberlain,Private and Public Planning (New York, 1965).
25. James Tobin notes frankly that "macro-economic policies, monetary and fiscal, are incapa-
ble of realizing society's unemployment and inflation goals simultaneously." Tobin, "Inflation
and Unemployment," The American Economic Review, LXII (March 1972), 17.
26. S.M. Miller, "Planning: Can it Make a Difference in Capitalist America?," Social Policy,
(September/October 1975), 12.
27. Alan Wolfe has written about this dissociation as one "solution" to the contradictory
aspects of liberalism and demcracy; an illuminating concrete discussion along these lines may be
found in Gordon Adams's work on the E.E.C. Wolfe, The Limits ofLegitimacy (New York, 1977);
Gordon Adams, "European Capitalism, the State and the European Community," (unpublished
manuscript).
28. Harold Wilensky, The Welfare State and Equality, (Berkeley and Los Angeles, 1975);
Organization for Economic Co-operation and Development, "Towards Full Employment and Price
Stability: Annex," (Paris, May 1977), pp. 49-50.
29. At this level, exploitation is masked at the moment of its occurrence by the market-wage
relationship.
30. It is in this sense that Raymond Williams writes of language as constitutive, "at once
individual and social-as historically and socially constituting." These are never matters simply of
"true" and "false" consciousness. Williams,Marxism andLiterature (London, 1977), pp. 43-44.
31. Thus E.P. Thompson, who sees "the class experience as largely determined by the
production relations into which men are born--or enter involuntarily," can also write that "class is
defined by men as they live their own history, and, in the end, this is its only definition."
Thompson, The Making of the English Working Class (London, 1968), pp. 10, 11.
32. The English gentry of 1832, for example, was ill-placed to resist reform precisely because its
victory in the seventeenth century had produced a weak central state.
33. Theda Skocpol, "A Critical Review of Barrington Moore's Social Origins of Dictatorship
and Democracy," Politics and Society, IV (Fall 1973); and Allan Silver, "Social and Ideological
Bases of British Elite Reactions to Domestic Crisis in 1829-1832," Politics and Society, I
(February 1971).
34. G6sta Esping-Andersen, Roger Friedland, and Erik Olin Wright, "Modes of Class Struggle
and the Capitalist State, Kapitalistate, IV-V (Summer 1976), 191, 192. (italics deleted).
35. Heclo, Modern Social Politics in Britain and Sweden (New Haven, 1974).
36. Hibbs, "Economic Interests and the Politics of Macroeconomic Policy," (unpublished
manuscript).

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 Ira Katznelson

37. Andrei Markovits, "Educational Reform and Class Cleavages in Social Democratic Re-
gimes: The Case of Sweden," (paper presented at the American Political Science Association
Annual Meeting, September 1976).
38. Ibid.
39. Williams, "Base and Superstructure in Marxist Cultural Theory," New Left Review, No. 82
(November-December 1973), 8, 9.
40. Martin, The Politics of Economic Policy, p. 36; M. Donald Hancock, "Productivity,
Welfare and Participation in Sweden and West Germany," (paper presented at the American
Political Science Association Annual Meeting, September 1976); also see Hancock, "The Swedish
Welfare State: Prospects and Contradictions," The Wilson Quarterly, I (Autumn 1977).
41. Martin, "The Politics of Economic Development in Advanced Industrial Societies,"
(unpublished manuscript).
42. Richard Scase, Social Democracy in Capitalist Society (London, 1977), chaps. 4-7.
43. Heclo, Modern Social Politics, p. 305.
44. Martin, The Politics of Economic Policy, p. 44.
45. Jesse Burkhead and Jerry Miner, Public Expenditure (Chicago, 1971).
46. Ibid., p. 3; O'Connor, The Fiscal Crisis of the State (New York, 1973).
47. Paul A. Samuelson, "The Pure Theory of Public Expenditures," Review of Economics and
Statistics (November 1954); Richard A. Musgrave, "The Voluntary Exchange Theory of Public
Economy," Quarterly Journal of Economics, (February 1938); and Musgrave, The Theory of
Public Finance (New York, 1959).
48. Ibid., p. 13.
49. Francesco Forte, "Should 'Public Goods' Be Public," Papers on Non-Market Decision-
Making, (Fall 1967); Gerhard Colm, Essays in Public Finance and Fiscal Policy (New York,
1955).
50. Everett Carl Ladd, American Political Parties (New York, 1970), p. 307.
51. Daniel Patrick Moynihan argues that state officials themselves, together with social service
professionals, may have this capacity. I think it more accurate, however, to place their activities in
the problem-solving mode. Moynihan, Maximum Feasible Misunderstanding (New York, 1969).
52. Frances Fox Piven and Richard A. Cloward, Regulating the Poor: The Functions of Public
Welfare (New York, 1971); and Poor People's Movements: Why They Succeed, How They Fail
(New York, 1977).
53. Gareth Stedman Jones, Outcast London (London, 1971), p. 345.
54. Pall Mall Gazette, 11 February 1886, p. 4; cited in Jones.
55. Jones, p. 314.
56. See Ira Katznelson and Mark Kesselman, The Politics of Power (New York, 1975), chap.
13.
57. Heidenheimer, pp. 316-37. Wolfe and Jerry Sanders argue suggestively that big labor, as
part of the coalition of cold war liberalism, is an integral part of the U.S. surrogate for social
democracy; Wolfe and Sanders, "Resurgent Cold War Ideology," (unpublished manuscript).
58. Werner Sombart, Warum gibt es in den Vereunigten Staaten keinen Sozialismus?
(Tubingen, 1906).
59. Katznelson, City Trenches (New York, forthcoming).
60. Manuel Castells and Francis Godard, Monopoville (Paris, 1973).

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