Bernstein v Kautsky Redivivus
Is preserving parliamentary democracies sufficient as a ward against the rising tide of fascism in the political west?
Preface: There is little doubt that the post-war liberal order of multi-party plebiscitarian parliamentarism in one form or another, dominant in the west, is under stress. Economic discontent and social malady are growing in the countries of the political west. Cornerstone political institutions are, for many, missing in action; and for others, they are seen as barriers to solutions or part of the problem itself. A proto-fascist politics has emerged as a response, together with a broader right-of-centre or conservative turn broadly captured under the umbrella of post liberalism in its various guises. The erstwhile ‘left’ has been left flat-footed. Attempts now emerge to formulate a response to the rise of fascism; an anti-fascist politics of sorts. This essay engages from a tangent into this emerging fracas, arguing that the issues that defined the debate between the German socialists of the early 1900s — personified by the ‘reformist’ Edouard Bernstein and the revolutionary Karl Kautsky — cast a long shadow; and that, whereas Bernstein’s revisionism prevailed a century and a bit ago, Kautsky’s ghost now returns and begs the question: can a 21st century anti-fascist left politics be sustained while seeking to preserve parliamentary democracy as its principal political form?
Three decades and some of American post Cold War unipolarity coincided with the entrenchment of political and economic discourse in the political west, and in global institutions dominated by the west, framed by the nostrums of mainstream neoclassical economics and the unquestioned superiority of parliamentary democracy as the finality of the political form. Perfecting markets and some idealised notion of a multiparty plebiscitarian institutional construct became the benchmarks against which “reform” economically and politically would be judged. Both promised the nirvana of Reason’s “cunning” — the apotheosis of the unfolding of “freedom” as History found its most advanced embodiment in western economic and political civilisation. Yet, as we enter the second quarter of the 21st century, such promises have faltered and we are witnessing what can perhaps be called liberalism’s denouement.
The political battles that defined the latter half of the 19th century and the first few decades of the 20th — liberalism, socialism and fascism — seemed like a distant, almost imagined, memory. When in late 1918 / early 1919 Rosa Luxemburg spoke of the choice between “barbarism and socialism,” she crystallised and distilled the politics of friend-enemy that would later swirl through Europe with the emergence of the monsters of Gramsci’s interregnum. On the other side of the political fence, Carl Schmitt in his The Crisis of Parliamentary Democracy (1923) and other writings laid bare the fragilities and limitations of bourgeois parliamentarism as he argued the legal and philosophical case for the National Socialists’ usurpation of power in Germany. Meanwhile, the German SDP - at the time, arguably, western Europe’s most cohesive and arguably successful socialist party organisation - itself had become paralysed by unresolved internal debates about whether adherence to parliamentary politics was sufficient to advance the political and economic cause of socialism.
The debate between Eduard Bernstein and Karl Kautsky within the German SPD in the early 1900s epitomised the political, strategic and theoretical conundrums that ultimately conditioned the ways in which post-war socialism became embedded into the fabric of liberal parliamentarism.
Bernstein, the revisionist, argued that Marx’s predicted immiseration had not materialised; instead, rising living standards, trade union gains and universal suffrage meant socialism could be achieved ethically and gradually through parliamentary democracy, rendering the revolutionary final goal secondary to the movement itself. Kautsky, a orthodox Marxist, countered that the bourgeois state remained a class instrument — reforms could improve workers’ lives but could never transcend capitalism without a revolutionary break. Yet Kautsky was no Leninist: he still saw parliament as a tactical arena to strengthen the proletariat until the final crisis, not as a path to socialism itself. The SPD never formally chose between them. Its Erfurt Programme remained rhetorically revolutionary, but its daily practice — massive electoral machinery, trade union networks and a focus on cooperatives — drifted steadily toward Bernstein’s reformism.
By 1914, the party’s vote for war credits sealed Bernstein’s de facto victory. The ambiguity persisted: revolutionary language at conferences, but with parliamentary action on the ground. This unresolved synthesis — revolutionary in form, reformist in substance — would later prove fateful. When the Nazis rose to power, adherence to parliamentarism offered the SPD no protection; its leaders were rounded up, killed, or driven into suicide and exile.
After 1945, the West German SPD drew a different lesson. In the 1959 Godesberg Program, it formally abandoned Marxism, embraced the social market economy, and declared itself a Volkspartei of liberal capitalism. The Bernsteinian path, once a heretical revisionism, became the uncontested foundation of postwar social democracy — embedding socialism into parliamentarism not as its antagonist, but as its loyal left wing.
Elsewhere the end of the Second World War saw the consolidation of a moderated capitalism — ordoliberalism, Keynesian-welfarism, social democratic mixed-economies — in the political west, buttressed by an international political economy that preserved the extractive substrate of pre-war imperialism but, this time, dressed up with a de-colonialisation gloss. The Bretton Woods settlement reflected the dominance of war’s victors; the IMF and World Bank did little to alleviate global imbalances. They often made them worse, usually compounding poverty in developing countries rather than alleviating it, and prosecuting policies and prescriptions that amplified western-cum-American power.
Until the Oil Shock 1.0 of the early 1970s national and global capitalism appeared to have been stabilised. The brutality of unbridled markets had been offset by welfarist interventions, and so-called Keynesian macro-economic policy. Labour’s claim on total value add in the advanced economies had risen to historically unprecedented levels; and income inequality within western nations had compressed concomitantly. So much is clear from detailed studies by many scholars, crescendoing with Picketty’s 2014 Capital in the 21st Century. Internationally, Bretton Woods strictures coupled with neocolonial arrangements (eg., French financial control of west Africa via the African Franc; American global capital expansion exploiting low cost labour across Asia while claiming profits; first world dominance of raw materials supply chains etc.) ensured pre-war inequalities and imbalances globally remained largely in place. It’s no wonder that so called third world debt problems have never been solved (see for example James O’Connor’s 1973 The Fiscal Crisis of the State and for a more recent treatment Ann Pettifor’s work for example).
The new political and economic settlement to emerge post Oil Shock 1.0 coincided for the most part with the tail end of the USSR (1975-89), the eventual dismantling of the Soviet Union and the rise of American unipolarity (1990-). We can argue about the nuances to which unipolarity was absolute or not, as Radhika Desai (2013) in Geopolitical economy : after US hegemony, globalisation and empire reminds us, but this should not be read as implying that somehow the U.S. did not straddle the globe like a modern day colossus or leviathan. No system of power is absolute, and all power relations imply opposition or resistance, for sure, but the U.S. was, for a period, floating on the sugar highs of unipolarity. It largely did as it pleased, and launched more military intervention on average per year than it had ever done (see Duffy Toft and Kushi 2023 Dying by the Sword, which I reviewed here).
The political economy of the New Right emerged as a salve to stagflation. Thatcher and Reagan epitomised the shift; Milton Friedman’s monetarism was the new doctrine. As Graeme Thompson’s 1986 The Political Economy of the New Right documents beautifully, however, the practice of new right economics wasn’t always about doctrinal purity; far from it in fact, but politically it successfully unwound the political-social settlement that defined much of the post war period leading up to the Oil Shock. Labour’s gains in share of total value add were eaten away, as organised labour was routed. The hollowing out of industry accelerated, on the back of expansive privatisation programs — particularly in the UK — as Fordism and its social accoutrements were dismantled. Boyer and others from the Regulationist School spoke of a post-Fordist regime of accumulation, while Ernest Mandel argued the case for “late capitalism.” Lash and Urry would point to the emergence of “disorganised capitalism” while Piore and Sabel looked for silver linings by way of a “second industrial divide” and what they dubbed “flexible specialisation.” Whatever one’s school of thought, there was no doubt that change was afoot. (See also the excellent 1989 collection edited by Jonathan Zeitlin and Paul Hirst Reversing Industrial Decline?, for details and experiences across multiple western economies.)
The dismantling of the Soviet Union also dismantled a left — in the political west at least — that could think questions of political democracy beyond the limits of parliamentarism. Narrow parliamentary systems became de rigeur the democratic touchstone, beyond question or critique. When former eastern bloc nations raced to embrace parliamentarism western style, the jury had — at that moment in history, at least — delivered a verdict. Efforts by some in the western left to provoke a more radical rethink - amongst others, British associationalism (Paul Hirst) / European associationalist socialism (Roberto Bobbio) / American communitarianism (Amitai Etzioni) in particular - gained limited to little practical organisational traction in this environment. Things appeared settled, once and for all.
Yet, the post Cold War economic and social settlement was not settled; domestically in the political west or internationally. History didn’t end, so to speak; it barely rested.
The Asian Financial Crisis of 1997 and the Global Financial Crisis of 2007–08 exposed the fragility of this supposedly settled order, revealing that financialised capitalism had not abolished crises at all. Studies of U.S. industry show that across virtually every sector — manufacturing, retail, telecommunications, media, finance, agribusiness — ownership has consolidated into fewer and fewer hands, while Germany’s storied Mittelstand, once the backbone of that economy, has been steadily eroded by global competition, private equity absorption, and succession failures.
Simultaneously, stock ownership in the United States, as Federal Reserve data confirms, has concentrated sharply: the wealthiest 10% now hold well over 90% of corporate equities and mutual fund shares, leaving the bottom half of households with negligible direct stake in the equity of those listed firms their labour sustains. Financialisation and manufacturing’s hollowing out proceeded as two halves of the same process: finance demanded liquid, short-term returns, while offshoring offered cheap labour and regulatory arbitrage. As I have documented elsewhere, the former actively drove the latter, with shareholder value logic penalising long-term industrial investment.
Global outsourcing became the default corporate strategy, creating what John Urry termed the “global outsourcing regime” — supply chains stretched across continents, invisible to consumers but exquisitely vulnerable to pandemic, war, or political shock. Widening economic inequality followed mechanically. Real wages flatlined across the OECD from the 1980s onward even as productivity doubled and tripled. Households, as Johanna Montgomerie and her collaborators have shown, responded not by reducing consumption but by borrowing, trapped under the “tyranny of earned income” — the cruel arithmetic whereby stagnant wages meet rising costs for housing, healthcare and education, with debt the only available shock absorber. Private debt was sold as liberation from this “tyranny” as wage earners and consumers were reconstituted as “financially literate” agents.
Political alienation and anomie spread alongside private indebtedness. Disenfranchisement took both formal and informal forms: voter turnout declined, party membership collapsed, and a new class of the permanently precarious emerged, unrepresented by legacy institutions of left and right alike. Drug addiction, homelessness and suicide have all increased in the U.S. and elsewhere in the political west.
Geopolitically, the post-Cold War settlement unravelled on multiple fronts. NATO’s eastward expansion — however much it was ostensibly justified on security grounds to its architects — was read in Moscow as strategic encirclement, a breach of assurances allegedly given in 1990. China’s emergence as a global manufacturing and technological power radically disrupted global value flows, undermining the uneven distributional architecture of neocolonialism that had enriched Western capitals while extracting surplus from the Global South. The Belt and Road Initiative, developmental lending, and industrial policy created the conditions for a revitalised Global South, no longer content with primary commodity roles in a Western-dominated division of labour.
Russia’s own renaissance defied the post-1991 script. Despite efforts in the 1990s and early 2000s to reach a post-Cold War détente with the political West — seeking partnership with NATO, joining the G7, accommodating Western investors — Moscow was repeatedly rebuffed, from Kosovo’s independence to missile defence to the broken promises of a pan-European security architecture and the debacle of Ukraine. The reemergence of Eurasianism within Russian political and economic discourse followed as a consequence. As Richard Sakwa has argued, Russia did not choose confrontation from a position of strength but from a perception of existential vulnerability; and as Glenn Diesen has traced, the intellectual shift toward Eurasianism has transformed not only Russian foreign policy but the very contours of global geopolitical economics and thermoeconomics — the politics of energy flows, pipelines, Arctic routes and the material infrastructure of power.
So now, in the present moment, against the backdrop of the thirty-plus-year conjuncture of American unipolar hegemony and its accelerating decline — manifested in growing economic fragility, income precarity, supply-side shocks occasioned by Oil Shock 2.0 initiated by the U.S. attack on Iran on 28 February 2026, undergirding the risk of stagflation, and the prevalence of rising geopolitical tensions and wars — the ghosts of pre-WW2 dynamics return to haunt national politics in the West, and global politics more broadly.
Among the most potent of these returning ghosts is the rise of right-wing nationalism across the Western world — not as a fringe phenomenon but as a mainstream political force reshaping governments from Budapest to Rome, across Germany and France, through to The Hague and onwards to Washington. This is a politics of national revival and nostalgia: the promise to restore a mythologised past of cultural homogeneity, industrial dignity and sovereign control, against the perceived depredations of globalisation, mass migration and cosmopolitan elites. Yet beneath the surface of restorationist rhetoric lies a deeper, more volatile current: millenarian apocalyptic energies, wherein the nation is cast as besieged, in terminal decline, and ultimately redeemable only through purifying crisis.
These movements draw on what the historian Eric Hobsbawm called the “invention of tradition” — but the invention now is not of Victorian pageantry but of civilisational last stands. Post-liberalism, as a self-conscious intellectual current, argues that classical liberalism has exhausted itself, producing only rootless individualism, demographic collapse and cultural decay. Its political vehicles — whether France’s National Rally, Germany’s Alternative für Deutschland, Italy’s Fratelli d’Italia, or a transformed Republican Party under Trump — are not simply conservative but proto-fascist in their structures: the cult of the leader, the demonisation of an internal enemy (migrants, leftists and the “deep state”), the celebration of violence as political purification, and the systematic undermining of the erstwhile institutions of the liberal settlement: independent courts, free media and electoral integrity. They are a reaction, and self-consciously so, to the perceived failures of the post-Cold War political economy to deliver on its promises: flatlined wages, deindustrialised landscapes, precarious labour, housing unaffordability and a political class that offered managerial neoliberalism as the only horizon of possibility.
Sound familiar?
The interwar period witnessed a not dissimilar conjunction: economic crisis, humiliated national pride, elite delegitimisation, and the seduction of authoritarian solutions dressed as national rebirth. Then, as now, centrist and liberal parties and movements proved disastrously slow to recognise the danger, mistaking fascist movements for protest votes that would fade once prosperity returned. But there is a crucial twenty-first-century difference. The emergence of the Global South — economically empowered by China’s rise, demographically youthful and politically self-confident — adds a wholly new dimension compared to the interwar period. Then, the European empires could still extract colonial resources to soften domestic class conflict; today, the extractive architecture of neocolonialism is fraying. The Global South no longer automatically defers to Western financial institutions, media narratives or military alliances. BRICS expands; dollar hegemony is contested; the SCO consolidates; African states court multiple partners; many across Latin America and Asia hedge.
This creates a double pressure on the political West: internally, the old post-war social contract — which rested in part on super-exploitation of the periphery — cannot be restored; externally, the West can no longer project power as a unified bloc commanding automatic deference.
The ghosts of the 1930s return, but they return to a world where the stage is crowded with new actors who remember colonialism and intend to write their own futures. Whether the Western left can marshal a meaningful anti-fascist politics based on a defence of liberal parliamentarism without the material legitimacy it has squandered — and without falling into the very authoritarian traps it claims to oppose — remains the open question of this terrifying start to the 21st century.
Threats to parliamentarism have been growing because these institutions are palpably failing; they now symbolise the shortcomings rather than function as beacons of a new social settlement; the mainstream left’s tepid response in the west is to seek to mollify markets à la the 1950s and 1960s with its own version of nostalgia but in truth, none of this is viable in a polity dominated by finance and technology capital and a political elite that remains wedded to or constrained by the discourses of neoclassical economics. Political fragmentation and the progressive decline in major parties’ popular support are symptomatic of a diminished legitimacy of parliamentarism. Yet, as I have argued elsewhere, these new rightist-verging on-fascist reactions to liberalism’s failures do not offer a viable program of genuine social and economic renewal. They are a mirror image of liberalism’s limitation, not a means of its transcendence.
An anti-fascist politics is needed. But, an anti-fascist politics cannot be viably created if the aim is to somehow return to a status quo ante within the parameters of existing economic settlements, parliamentary institutions and prevailing coalitions of political constituencies. The rise of fascism is precisely against the institutions of the status quo ante. Old political coalitions are fragmenting. New constituencies need to be defined and curated.
Berstein may well have won the battle a century and a bit ago, but Kautsky’s counterpoint is back, because the battle did not define the war. Liberal parliamentarism has run up against its limits. Schmitt’s diagnosis of parliamentarism’s inherent fragility was prescient and sharp, regardless of one’s political affiliations; and, as with the passing of time, was Kautsky’s critique from an entirely different counterpoint. Fascism’s answer appealed to Schmitt’s sensibilities and clearly appeals to a growing body of public opinion today.
The question is whether a new left relevant to contemporary conditions, not afflicted by a nostalgia for the days when it became comfortable as part of the status quo, can emerge from the ashes of the Bersteinesque compromise, discover something in Kautsky, so as to give effect to a “rupture” that Walter Benjamin may recognise. Otherwise, that rupture may well belong to fascism. Again.