Still a Future for the European Social Model?

Abstract

The 2008/9 financial and economic crisis has discredited the neoliberal narrative which claims that the market is self-correcting and that private enterprise is superior to the public sector. In Europe, it turned out that the crisis highlighted the social and the democratic (as well as the ecological) deficits which have arisen over the past 30 years and which finally had eroded some of the most distinctive features of the European Social Model (ESM). However, the crisis has at least opened up space in the political discourse for alternative ideas concerning the creation of a more socially sustainable economy. In the essay it is argued that a renewed ESM is indispensable for a type of European integration based on social equality and environmental responsibility. After a short reference to Polanyi´s concepts of decommodification and disembedded capitalism the paper summarises the debate about the ESM and tries to capture its essence as it developed during the postwar decades. In the next section, the erosion of the ESM is described and important drivers of neoliberal restructuring in the EU are identified. The following part outlines major objectives in a possible revitalisation of the ESM based on three major projects: the renewal of the European welfare states, the reconstruction and expansion of the public sector and the democratisation of the EU and of European societies. ABSTRACTThe 2008/9 financial and economic crisis has discredited the neoliberal narrative which claims that the market is self-correcting and that private enterprise is superior to the public sector. In Europe, it turned out that the crisis highlighted the social and the democratic (as well as the ecological) deficits which have arisen over the past 30 years and which finally had eroded some of the most distinctive features of the European Social Model (ESM). However, the crisis has at least opened up space in the political discourse for alternative ideas concerning the creation of a more socially sustainable economy. In the essay it is argued that a renewed ESM is indispensable for a type of European integration based on social equality and environmental responsibility. After a short reference to Polanyi´s concepts of decommodification and disembedded capitalism the paper summarises the debate about the ESM and tries to capture its essence as it developed during the postwar decades. In the next section, the erosion of the ESM is described and important drivers of neoliberal restructuring in the EU are identified. The following part outlines major objectives in a possible revitalisation of the ESM based on three major projects: the renewal of the European welfare states, the reconstruction and expansion of the public sector and the democratisation of the EU and of European societies.

Between Neoliberalism and Nationalist Populism: What Role for the ‘European Social Model’ and Social Quality in Post-Brexit Europe?

“…The 1997–2010 ‘New Labour’ governments attempted to ‘graft’ aspects of a more European-style level of social support and investment onto their individualist, pro-market, low-tax neoliberal approach, by deferring the costs of public expenditure through policies such as Private Finance Initiatives (PFIs) and outsourcing (Whitfield, 2001). This had negative consequences: for solidarity, and to the claims to be social democratic by those governments (Hermann and Mahnkopf, 2010). The post-2010 Conservative-led governments have renewed the extreme neoliberal project to residualise social protection and furthered the use of the welfare state as social control for ‘deviant’ people (Grimshaw and Rubery, 2012; Harrison and Sanders, 2015).…”

“…While the term emerged from European political elites, societal development, as part of a common European identity, has been historically struggled for by working class movements, trade unions, and social democratic and socialist political parties (Hermann and Mahnkopf, 2010). Along with the gradual decline in the influence of these three factors in the ongoing process of European integration, political elites have increasingly favoured a more neoliberal direction, including the liberalisation of trade, weakening of social protection and welfare states, protection of multinational corporations, and the privatisation and marketisation of public services under the aegis of ‘competitiveness’ (Hermann and Mahnkopf, 2010). Rather than the compromise of a ‘socially-embedded market project’, ‘social concerns’ became subordinated to neoliberal economic imperatives and integrationist politics, particularly after 2008 (Jones and O'Donnell, 2017).…”

“…Contrary to the ideals of the European social model, the EU has also been susceptible to the corrosive influence of neoliberal thinking, politics and policy, while UK governments, especially Conservative ones, must take some of the blame as the 'enemy within' in terms of EU social policy. While the term emerged from European political elites, societal development, as part of a common European identity, has been historically struggled for by working class movements, trade unions, and social democratic and socialist political parties (Hermann and Mahnkopf, 2010). Along with the gradual decline in the influence of these three factors in the ongoing process of European integration, political elites have increasingly favoured a more neoliberal direction, including the liberalisation of trade, weakening of social protection and welfare states, protection of multinational corporations, and the privatisation and marketisation of public services under the aegis of 'competitiveness' (Hermann and Mahnkopf, 2010).…”

Is there still such a thing as the ‘European social model'?

“…Hermann and Mahnkopf () compared the European model of public welfare services for the majority of the population and intense labour regulation with the US model of private social welfare and labour market flexibility.…”

“…Based on the concepts listed in the foregoing section, the ESM (to which we tend to refer as the ‘welfare state’ or the ‘social market economy’) can be seen as a Western European historic attempt to set up a system of equal opportunities (equity) with economic growth (efficiency) grounded on the following: A highly developed, publicly funded social protection system that provides citizens with broad coverage against their main risks and needs (a trait mentioned by Aidukaite, ; Busch et al., ; Giddens, ; Hermann & Mahnkopf, ; Scharpf, ; Wood & Gough, ). A relatively high tax burden (consistent with higher levels of public spending) with a broad basis of progressive taxation on income and property (a trait linked to the previous one and not mentioned by any author because it would mean defining the ESM in a ‘negative’ way). Greater social cohesion or equity in the distribution of income as a result of the combined redistribution effects of both points above (a trait mentioned by Alber, ; Jepsen & Serrano Pascual, ; Moreno & Serrano, ; Sapir, ; Viñals, ). High levels of relatively high‐quality employment (in terms of dignified working conditions and the generation of added value), with efforts to reintroduce persons suffering from exclusion into the social and labour market system (i.e., a pattern of growth of an inclusive nature) and with public sector employment carrying significant weight (a trait mentioned by Blanchard, ; Busch et al., ; Jessop, ). Intervention to regulate leading markets, particularly the labour market, in this case aimed at safeguarding workers as the theoretically weakest link in the labour relationship (a trait mentioned by Aidukaite, ; Busch et al., ; Esping‐Andersen, , ; Hermann & Mahnkopf, ; Scharpf, ; Wood & Gough, ). Ongoing consultation or dialogue between social actors, resulting in agreements on terms and conditions of employment and the orientation of public sector intervention, and in a high level of coverage of collective bargaining (a trait mentioned by Alber, ; Busch et al., ; Eichengreen & Iversen, ). …”