Labour's loss: Why macroeconomics matters

Servaas Storm ()
Additional contact information
Servaas Storm: Delft University of Technology, The Netherlands

PSL Quarterly Review, 2021, vol. 74, issue 299, 249-285

Abstract: Electoral support for social democracy in Western Europe is in free fall. The implosion of social democracy is largely self-inflicted, because 'Third Way' social democracy alienated its traditional supporters by (a) a deliberate move to the non-reformist, status-quo oriented macroeconomics of the New Keynesian consensus, which de-politicizes macro management and legitimises macro control by technocratic central banks; and (b) its promotion of a middle-class oriented ‘cultural liberalism’, as compensation for a lack of achievements on the economic front. As a result, Western European social democratic parties became responsible for austerity, rising inequality, social and economic disempowerment, and heightened insecurity—factors which contributed to a hardening of attitudes on cultural issues and migration. Social democracy has to return to its earlier reformist roots. The paper outlines what is needed in terms of fiscal and monetary policy as well as social concertation to create sufficient space for a reformist, productivist, and egalitarian strategy oriented toward full employment— based on a reimagined Keynesianism in which a prominent role is given to the economy's supply side.

Keywords: social democracy; full employment; fiscal and monetary policy; New Keynesian macroeconomics; NAIRU; Keynesianism (search for similar items in EconPapers)
JEL-codes: E20 E60 F60 O10 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/17673/16773 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:psl:pslqrr:2021:41

Ordering information: This journal article can be ordered from
http://www.pslquarterlyreview.info

Access Statistics for this article

PSL Quarterly Review is currently edited by Alessandro Roncaglia and Carlo D'Ippoliti

More articles in PSL Quarterly Review from Economia civile
Bibliographic data for series maintained by Carlo D'Ippoliti ().