The French-British, old-new europe debate was in the news again this week. On the one side there seems to be France, German, and I guess a lot of the other contintenal countries, with their sturdy social state, albeit also heavily subsidized. On the other is what portrays itself as a lean and realistic modernizing approach, combining both an old power such as Britain, and emerging players such as the new EU members of eastern Europe.
While the passions are probably very strong on both sides, what makes this debate the worst kind of argument is that in essence both sides agree on the ends, they just disagree on the means. And to be honest, given the complexity of the matter, and especially since it involves that dark and unruly, yet undeniably powerful horse economics, then I am obviously not in a position to propose a working solution as such.
But what I think we all can do, is comment on the issues involved, and add some philosophical perspective to the matter. We may not know what will work, but we might be able to help point out what won't, and, especially, what might be self-defeating. I also think it is a good exercise for ourselves, since its only when we make a stand, or attempt to, for things that we think matter, that we are forced to evaluate them properly. A double-edged consequence of this often is that we realise that while a certain position might have had first seemed to come from a valued principle, in fact either it or even we ourselves might not actually agree with that principle as much as we first thought.
First of all I should come clean about where I personally stand. I have to admit a definate affinity for the continental social model. I am in the highest tax bracket of where I live, and of course moan occasionally when a new bite comes out of bonuses etc., but by and large, as long as the money is not being wasted, then I fully subscribe to the system. I have a good car, and yet I think it important there should be a good public transport system, and occasionally get the bus/train somewhere, even if I could also drive (and not pay for the petrol). In other countries I could afford private insurance, but here I don't need to, since the state system is more than adequate.
And of course in all the other areas, unemployment security, education, even from a purely personal perspective, as someone who is definately not poor or at risk, I still like the idea that a social structure is there, since these things are so important and fundamental I think they should be held beyond doubt, even if at slightly more cost to those of us who could afford them anyway.
But, all this comes at a cost, namely high taxes and a rigid job market. A security in my job translates into a risk in creating yours. And of course large, state run or semi-funded enterprises can easily become detached and unfeasable in a rapidly changing world.
And this is where the 'anglo-saxon' model comes in. My understanding is that while the continental model seems to be one protecting the jobs that are there, and making the most possible from them, the British line of thinking is to have more jobs, and make less from each of them.
I wonder could it be described in terms of differing views on 'rights'. As I see it the continental model places emphasis on the right to a job, health service etc., but if this right is universal, then it inevitably puts restrictions on self-improvement of both companies and individuals. In contrast, I think the British idea out the stress on the right to the chance of a good job, health service, etc., and while this allows each person to work hard and benefit appropriately from that, it necessarily adds an element of risk into the community.
Of course neither side is so extreme - the French of course want to allow for a dynamic market, and the British also agree with some form of social net, but I think the above contrast roughly highlights what is fundamentally different in emphasis between the two approaches.
And of course both sides have very good arguments. The British might ridicule the 'French' model as being unfeasable, that the security they desire makes the economy too rigid and monolithic to survice, while the French might respond by saying the British have missed the whole point by thinking that invigorating an economy is an end in itself, whereas in fact it is meaningless if it doesn't actually deliver the social benefits one wanted in the first place.
What I think warps the issue slightly is the 'new' europe element, the countries in the East. These are countries starting basically from scratch. Not that they don't have a rich history and culture, but in an econmic sense the failure and then collapse of soviet communism has pretty much set them off from square one. A massive advantage that this brings is that they had the opportunity to start off in a new direction and bring in changes or implement new methods which could not be imposed so rapidly in more settled societies. The disadvantage I think is that they are joining the capitalist cycle at the start, and hence might easily miss out on the accumulated wisdom of other longer established capitalist societies. The problem I see is that capitalism is great because it brings opportunity, chances to work, to earn, and to improve one's life. This is its greatest feature. But a corrollary is that the pursuit of opportunity, the desire for work, not improvement can easily become an end in itself. And in societies where there are a lot of relatively impoverished people, where many people are prepared to make that bit bigger sacrifice to get that bit bigger gain. I think the nature of economics means that, at least initially, the sacrifices get bigger faster than the gains do.
Eventually I think, (hope!) , the economy reaches a stage where people have wealth enough that they can start to balance their lives, to decide as a community that they are not prepared to work for example 60 hours a week, since they could have a comfortable enough life with just 40. This I think is the stage that the western european countries have reached, when 'work' is refocused as means, and not an end. The problem is of course that for all this to work, the economy still has to live, and this would be problematic enough in isolation, and is nigh impossible if 'settled' economies, with their preaching of free trade, are exposed to 'developing' economies, which are now suddenly able to hold their own.
I am always sceptical of people bandying around phrases like 'harsh reality' and 'face facts', since it is very easy to grant them a sort of hardnosed authority without a case actually being put for it. There is a reality, and for sure it is harsh in some ways, but just appealing to it to support your way does not make it so. However I think one brute fact can be agreed to - instant redistribution to provide equality would make the entire world universally miserable. An example I think is the failed state-run experiments of the communist era. Economics is a force, which can only expressed through the free markets of capitalism, and we go against it at our peril. But that is NOT to say that it doesn't need to be restrained or harnessed in some way. It just have to be done slowly and carefully, and with full acknowledgement of its power. We don't try to stop a river reaching the sea. We may divert and even partially dam it, but
we never ever sotp it completely. And I think a similar approach is needed to free market forces. We have to recognize them, but strive to constraint them for our ends, not their ends in themselves.
And a basic fact of these forces is that when you have poorer, able people they can take the jobs from the richer able people. I don't think we can argue with that. And while we of course can want to improve their lot, we also have to be honest that we care about our own.
That does not mean as such we must keep them down, for that is as impractical as it is distasteful. But I think we can't deny that we also care for our own self-interests, as they care for theirs, and if we ignore both of these then a crisis will arrive where these interests erupt vicuously. It is all very well to want an equal world, but if we go about it in such a way that things get worse for all, then we will expose ourselves to the omnes-contra-omnes situation where everyone throws these notions away and looks out for himself.
The problem is, I think there is no 'silver' bullet, no win-win situation...rather eventually a t best draw-draw or at least a no-lose - no-lose outcome. Primarily I think we will have to accept a reduction in our level of wealth, but in a way that we still retain what is important to us, and not just 'wealth' for wealths sake. Basically this means paying more (and hence having less for other things) so as to support and keep our society and way of life. At first this might sound crazy, how could people willingly give up opportunities, cut back and restrain themselves? This goes against the whole idea of freemarket (ultimate consumer) capitalism which has proved itself so much. But not only is this possible, I think we do it to some extent already. We do it when we make the effort to carry shopping bags with us rather than pick up the free disposable ones, we do it when we contribute to charity, to help someone we don't know and will never meet, we do it when we choose the environmentally friendly option, or the locally made product, even though it costs us that little more. We do this because our value system is more complex that simple economics makes out. "gain" is not just monetory wealth, but other things as well. And this is I think our real source of hope - because it shows we are not just pure capitalists, and while capitalism is necessary, we can still rise above it to some extent.
Maybe its not possible. Maybe we are just too ignorant to how much we exploited the world, how much we still rely on exploitation, and now the tables are turning. But I really think there must be a chance that we could all pay that little but more, get that little bit less, but save our society. Of course this will have a cost, namely it will slow down the development of other areas in the world. If we don't buy the cheap good from China, but the more expensive one from Germany, then that takes its toll in China. not a great thing, but better for us in the short run, and perhaps better for all in the long. After all, why is it in China's interests to succeed except that they want what we have now? But if things get out of control then 'what we have now' might not be possible for anyone, at least not for generations to come, after a global period of Victorian age capitalism. And who can doubt that such global hardship will not again give rise to the social and political upsets of the last centuries - but with modern weapons to boot?
No, while it might mean the rest of the world grows more slowly, I think it is not just selfish interest for us to try and slow things down and support our own society first. The crucial thing is we need to do it reaslistically and humanely, tkaing into account both economic and human factors. All out protectionism as such is not the answer, since it doesn't work and turns our back on the rest of the world, at our own peril. But we need to be honest with ourselves. If we don't think we should work for more than 40 hours a week, then we should not buy products that are made by people working 80. If we don't want factories polluting our air, then we should not support those that pollute other peoples. Of course this (hopefully) doesn't have to be an all out boycott of foreign goods, but just a rational appraisal of what we're doing.
Food I think is an important example. Agriculture in Europe is one of the most subsidised areas, with significant knock on effects on poorer countries. As I understand it, farmers are supported because they are important, we cannot lose our farming, and yet they are often uneconomic. Obviously one solution would be for farmers to get a better price for their products, but the normal way of doing this, price floors, has effects on the economy as a whole. So what to do? We want farmers to be able to earn a living, but the free market makes this impossible. Is there anyway out of this? It would seem not - we need the free market and this drives the prices down....
But there is one element about the 'free market' is implicitly assumed, namely that it is 'price' and price alone that drives consumers. And of course if price is what is so important, then the market will follow the price. But my whole idea is that in a mature society like ours, price should not be the only factor - we have other values as well, environment, quality, charity etc, that we take into account.
This I think provides some glimmer of hope of a solution. We might not be able to compete with the rest of the world on price, but we can compete against it amongst our own societies in certain areas, by appealing to other things apart from price. Food I think is the best area for this. We care about what we eat, so we should basically start putting our money where our mouths are. If we can afford it, and I mean really afford it, as in CAN buy it even if it means cutting back somewhere else, then we should buy the more expensive better quality local food when possible. This is good for us, good for the farmers, and hence good for us again via a society that might eventually not have to subsidize them...
I really don't know...of course things will change and we'll have to adapt, but I think some change of 'cultural attitude' is needed - we really need to support with our wallets what we care about, and that means actively supporting local industry. Our tastes and consumptions are so diverse anyway that this will only ever be a small portion, so the rest of the world will still have plenty to sell us, and hopefully will develop, but we will be making a marker about what we care about - working hours, wages, environment, quality - which will stand to us and them in the future....
Though of course there is a massive assumption behind all this....I am assuming that we are indeed a wealthy society. I am not rich, but I am middle class, and I can buy organic chicken etc, without having to make much of a sacrifice. Being honest, I am lucky, and not everyone , perhaps not even most, even in my own society can do that. And all this high talk of money where our mouth is requires money in the first place. But I think a good proportion of the west is 'comfortable' at least, and i think it is our moral duty to not adopt an 'i'm all right jack' approach and constantly look out for just our gain, but realise that our gain is dependent on the society we live in...
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