The two best-known contemporary examples are the French Socialist government of François Mitterrand in the early 80’s and, most recently, the Syriza-led government in Greece which lasted barely six months. The French socialists swept into office in 1981 and began to implement important reforms based on a program they had earlier adopted in common with the Communist Party and a smaller left-centre party. Within two years, faced by capital flight provoked by intense pressure from investors, politicians, and the international financial institutions which manage global capitalism, they felt compelled to execute an abject u-turn in with the adoption of a “tournant de la rigueur” (austerity turn). The depressing events in Greece this year followed a virtually identical pattern.
So too did the history of the one-term Bob Rae NDP government in Ontario which dashed the hopes of many of its supporters in the early 90’s. The same pressures led it to abandon early attempts at reform and to succumb to demands for austerity - most notoriously the imposition of mandatory unpaid leave on public employees known as “Rae days”. The move sparked angry protests by Ontario trade unions and a rupture with the Canadian Auto Workers and other unions.
This 2010 article by Gerry Caplan, an influential advisor to the Rae government, on the 20th anniversary of its election is a graphic illustration of how the spectre of the bond market and the hysteria whipped up by the corporate-controlled media haunts today’s social democratic parties in Canada and elsewhere. It is what underlies NDP leader Thomas Mulcair’s repeated assurances to the private sector in the current federal election campaign that the party can be trusted to subordinate its reform program to balancing the budget. (h/t Pam Fitzgerald)