No Place for Raging Capitalism : Eastern Europe: Nations emerging from the collapse of communism are likely to tilt leftward--to social democracy on the Swedish model.

It might surprise some Americans to learn that the collapse of communism has not turned East Europeans into partisans of American-style capitalism. As the specter of communism vanishes from Europe, it would be wrong to think that it means the end of the heritage of Marx. The demise of East Bloc communism and the convergence of Eastern and Western Europe will promote the victory of the other strain of socialism in a united, social democratic Europe.

Left-of-center parties in Western Europe have consolidated their control over the European Parliament, which in turn will exercise increased powers in the single-market Europe of 1992. On a recent trip through Eastern Europe, from Warsaw to Budapest, I heard oppositionists talk about modeling themselves on social democratic Sweden.

These changes will challenge America.

Most Americans misunderstand social democracy, which evolved from the democratic socialism advocated by many West European labor parties beginning in the late 1800s. Those parties have dropped their belief in class struggle and in nationalization as the answers to society’s needs.

The West German Social Democrats committed the party in 1959 to a market economy with a high level of social welfare. Not even the conservative opposition would dismantle that system today. The successful Swedish model, with little state ownership but high taxes to finance benefits, is the envy of much of the world.

Prime Minister Margaret Thatcher rejects full British integration with the single-market Europe partly because the left-leaning European Parliament will expand social democratic labor and social welfare protections.

West Europeans look to their Eastern neighbors to join them on this road. At the June congress of the Socialist International, a confederation of 87 of the world’s socialist and social democratic parties, I heard West European political leaders, including French Prime Minister Michel Rocard, former West German Chancellor Willy Brandt and British Labor Party leader Neil Kinnock, call on invited Communist Party officials and oppositionists from the Soviet Union, Poland and Hungary not to replace communism with capitalism but with social democracy.

Kinnock said, “Those who are unlocking the shackles of totalitarianism are recognizing that the shift they want to make is not from communism into unregulated, uncontrolled and unaccountable capitalism, but to the distinctive, the practical, the human and challenging values of democratic socialism.”

The Communist parties of Poland and Hungary have already confirmed their transformation into democratic socialist parties. Imre Pozsgay, a leader of the Hungarian reformist Communists, now called socialists, told foreign journalists, “The draft program formulated under my leadership rests on the values of European socialism.” But Hungary’s opposition Free Democrats are largely social democrats, too, and will run a joint election slate with the recently revived 100-year-old Social Democratic Party.

Janusz Onyszkiewicz, spokesman for Solidarity, said of the Polish Communists, “For many of them, the model of a socialist country is Sweden.” Solidarity itself will split into social democratic, Christian democratic and liberal (free-market) parties. Important Solidarity leaders such as minister of labor Jacek Kuron, parliamentary leader Bronislaw Geremek, and daily newspaper editor Adam Michnik are social democrats.

The East German oppositionists are even more radical. For years, the handful of dissidents who braved government harassment, jail and expulsion have argued for democratic socialism, with substantial public ownership and workers’ control. Many leaders of the new opposition groups agree and oppose reunification with West Germany because it is too “capitalistic.” But a social democratic party has been started in East Germany, and with Western private investment needed to satisfy consumer demand, it’s likely, if East Germany remains an independent country, that social democracy will develop there, too.

The people of Eastern Europe want political freedom, but they don’t think that means giving up social protections such as free health care and free higher education or even government control of some institutions, particularly railroads, utilities and other vital monopolies.

What will the advance of social democracy mean for the United States? We are alone among major industrialized countries in not having national health insurance. Many Europeans enjoy state unemployment and maternity benefits, day care and free higher education superior to that of Americans. The social democratic model could pose as big a challenge to American thinking as it has to East Bloc communism.