Europe – Yesterday we stood at the abyss

but now we are moving forward.

Europe is coming to an end …

… at least with the ideas of the new President of the Commisszion.

Now, the summer break is surely ended by now and it is time to look at the awaking world. By now the president of the European Commission is in office. But when looking back, seeing his statement to the European Parliament, then still being candidate for President of the Commission and listening to it is both discouraging. A somewhat boring statement, showing only in few passages some colour, meaning engagement – but this had been not least on occasions where a clear analytical perspective would have been most needed.

Though late, a brief statement on the statement may still be appropriate:

It is amazing in which way, to which extent such candidate, talking to the parliament, i.e. to (the representatives of) the people, can approach burning questions, not least the loss of legitimacy, can argue highly reflexive. Reflexive here is just a nice way, avoiding the use of the term inward looking. Even if he rightly addresses the question of legitimacy (and the lack of it), and in particular the role of the parliament, but also the character of the Commission etc., he overlooked that all this: the institutions and the relationship between them is only about “instruments” to pursue the will of the people or the general will. At least it should be so.

The will of the people or the general will are then in some way addressed later. Leaving the show-off effect out of consideration (Oui, M. Junker, qui est une grande performance: auch ich spreche ein wenig Deutsch, ma la questione è uno dei contenuti; en dit is niet een kwestie van lippendienst, sinó d’abordar realment les qüestions pertinents – sure, limited correctedness and I ask the native speaeker for apologies), it is interesting to see the change to the German language at exactly that point, and even saying it is about changing to the language of the champion. Primus inter pares? Or what is a champion in a Europe of equals.

It is then somewhat worrying – though not surprising – that all this is exactly about those issues as the “Olympic team” (this alludes to the term that had been used a more or less ling time ago when in Germany employability had been closely inked to exactly this point: the orientation on employees as “teams, ready to take part in Olympic games” (“olympiareife Mannschaften”).

Yes, there are without any doubt some valuable points mentioned – the importance of welfare policies that are guaranteeing some minimum standards …

But the overall gist remains sad and saddening. Einstein once stated

We cannot solve our problems with the same thinking we used when we created them.

In clearer language: it is foolish to address the problems we have by making what caused them to instruments to overcome them. However, looking from a point of true political economy at Juncker’s proposals they are just such instruments of foolishness: growth, growth, growth — the outline given for justifying that it will be green viz. sustainable growth, is highly questionable. It had been the orientation on growth as development that sees other than GDP-development only as adjunct, as quasi-automatic, subsequent moves. Growth, even if green, will not stop its destructive force if it is seen as structurally disjoined from sound societal policies.

By the way, Mr Juncker, this had been a major problem standing for a long time always at all those laudable attempts: from Adam Smith’s Moral Sentiments (written before he thought about the Wealth of the Nations) to the surely honest (though in many respect naïve) debates in the circle around Walter Eucken, Franz Böhm, Alexander Rüstow und Wilhelm Röpke etc. (yes, Erhard and Mueller-Armack had been somewhat populist followers of much greater thinkers).

I am not sure if I succeeded, but at least I tried on different occasions to point out that we need an integrated approach, recently for instance in the opening speech, addressing the conference Justice and Solidarity: The European Utopia in a Globalising Era (organised by the European Academy of Sciences and Arts & University of Eastern Finland, in Kuopio – 2./3. September)) and also in a contribution on the “Vatican Spring”, which will soon be published in a book titled “El Papa – ¿Cuántas divisiones tiene?”Sondeo global del catolicismo mundial según el “World Values Survey” y el “European Social Survey” [(Ed. Arno Tausch); The Centro Argentino de Estudios Internacionales, CAEI, Buenos Aires, Study on Global Roman Catholicism].

There is also something that had been discussed recently in Lindau – on the occasion of a meeting of laureates of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (the so-called Nobel Prize for Economics) – there attac (Association pour la taxation des transactions financières et pour l’action citoyenne) organised a symposium, urging for a move to a different approach. But even some of the laureates had not been too happy with how things work in the growth economy, being especially critical about the austerity policy. James Mirrleess contended that the German chancellor has the wrong advisors. So, yes, may the future president of the Commission then join them.

Well, then to a metaphor that is really pointing on the dramatic dimension of the current situation: the “29th member state”. Yes, there is a major problem: what we discussed (we, i.e. in the political debates in the institutionalised Europe) in the 1970s ff. as poverty and social inclusion reached a level and even more so a quality that deserves some more reflection. And the metaphor of a 29th member state is usefully highlighting the dramatic character. But there remains a … but …

I am not switching to Greek, Irish, Italian, Portuguese or Spanish language, the language of “the losers”. And even if it is indeed laudable that Greece had been rescued, as pointed out in the statement, it had not been really about repairing a plane while in the air. It had been more about crashing the plane, then collecting the valuable parts from the ground while leaving the corpses there, may be giving them a friendly blessing.

The fundamental question is if we should simply look for ways to “enlarge” the Union by including this “29th member state”, or if we have to look more closely into building a new Union – one which does not allow for such exclusion at first instance.

These will also be issues that will be discussed on the 17th ff. of September in Moscow (http://www.vcug.ru/conference/conference_eng/) (see also the debate in the recent publication: Herrmann, Peter/Bobkov, Viacheslav/Csoba, Judit: Labour Market and Precarity of Employment: Theoretical Reflections and Empirical Data from Hungary and Russia; Vienna: WVFS; 2014.

It may be worthwhile to look at the end of these brief reflections at a short contribution of the Social Platform, European NGOs gathered to lobby the European institutions, being quite optimist, contending the tension:

I can already hear some of you saying “that does not answer the immediate challenges” or “this is not what the President Elect of the Commission put on the table in July”. And I would say “actually its does”

In the following we read then

The social shield we are calling for includes The President Elect’s proposal to “put in place a minimum wage, and a guaranteed minimum income.” But it brings much more into debate with the financing of social services and the availability of unemployment benefits. The access to quality services we promote could be challenged by the negotiations on the transatlantic trade agreement (TTIP) that the new commission will finalise. The directive blocked by the EU countries to remove discrimination in access to service is another instrument to reach our broader objective. There are bigger challenges in the EU that need broader instruments.

But at the end, al these points are still very much about rebuilding the existing state, actually enforcing it by providing a shield, however forgetting that it is about the need of a real vision, and such real vision has to be one that is seriously taking up the challenge of a fundamental change. In other words:

Looking at the bigger picture will help us with a new EU route

is one way of seeing it.

The other is about the old questions we know from Alice and the Cat.

‘Would you tell me, please, which way I ought to go from here?

‘That depends a good deal on where you want to get to,’ said the Cat.

‘I don’t much care where–’ said Alice.

‘Then it doesn’t matter which way you go,’ said the Cat.

‘–so long as I get somewhere,’ Alice added as an explanation.

‘Oh, you’re sure to do that,’ said the Cat, ‘if you only walk long enough.’

In other words: there is the danger of looking for better ways of dealing with the existing faulty systems instead of looking for better systems. May be the cat was right:

‘But I don’t want to go among mad people,’ Alice remarked.

‘Oh, you can’t help that,’ said the Cat: ‘we’re all mad here. I’m mad. You’re mad.’

‘How do you know I’m mad?’ said Alice.

‘You must be,’ said the Cat, ‘or you wouldn’t have come here.’

Annunci

I can’t go back to yesterday because I was a different person then

I can’t go back to yesterday because I was a different person then.

And knowing that they come from the beautiful book ‘Alice in Wonderland’ we may feel tempted to recommend Lewis Carroll’s book as reading for Joseph Stiglitz.

Sure, there is always some temptation to go to events like the one today at LUISS Università Guido Carli, listening to Joseph Stiglitz looking at the question

Can the Euro Be Saved? An Analysis of the Future of the Currency Union.

Part of the temptation may actually sometimes be simply seeing economics another time as questionable subject and as such not so much an academic discipline (sure, fouling the own nest – but there had been more outstanding economists that did so, thus I am only doing the usual thing: standing on the shoulders of giants, though I am not sure how much further I can see).

Be it as it is, my first irritation came right at the beginning of Joseph’s presentation, hearing about recession and subsequently recovery. The terms had been used in connection with the locating European economies in respect of their development.

It is an often-discussed point and an extremely tricky question – recession and depression had been mentioned in the presentation. And indeed it is somewhat funny then to hear that during the time Joseph Stiglitz worked for the World Bank the term depression had been admonished – it would sound so negative, and have such bad effects especially at times where people are already depressed. Still, the question remains if talking about a recession is not as misleading as the reference to depression. Isn’t it much more precise and honest to say what all this is about:

A crisis – and indeed a structural crisis.

And it is not a structural crisis just of the Euro. In fact we are confronted with a crisis of the fundamentals of the capitalist economy. Actually I talked with Marco today in the morning exactly about this question – and we should accept that it is a question and any claim to give an unequivocal answer is pretentious. Before shortly looking at this, there is at least the following that Joseph valuably emphasised: austerity policy is causing huge problems for a majority of the people, not contributing to solve economic problems but evoking a major social downgrading for many.

There are at least the following perspectives waiting for some thorough reflection. One can be seen as capitalism returning to its pure form. There is surely some truth saying that in one way or another, capitalism as it emerged and became known as Manchester Capitalism had been tamed: social and welfare state being one aspect, general working conditions and some forms of respect of workers (also political) rights have to be mentioned. So one way of looking at the current crisis and the harsh ‘restructuration’ may be interpreted in this way: we are returning to pure capitalism.

Another perspective, however, is to see the structural change in connection with some fundamental shifts caused by the development of the means of production. We may then suggest that we are witnessing the emergence of a new mode of production – it is not (necessarily) about capitalism or not-capitalism. It is just about recognising a more fundamental shift that is not directed towards establishing a status-quo-ante. Instead, it is about the emergence of a new system that goes ‘beyond’ the current system.

The social consequences then – not least visible in the development of precarity – would then be somewhat comparable with the development that went hand in hand with the emergence of capitalism. The machinery – i.e. progress – showed devastating consequences for example for the weavers who lost their work. At the same time, the new inventions allowed also progress by way of developing new ways of work and working conditions – objectively surely progressive at the time.

Coming back to the presentation then, there had been two striking points:

* Stiglitz did not engage in any of those questions that had been raised in the 2009-report The Measurement of Economic Performance and Social Progress’ (see my own comments specifically on this report from a Social Quality Perspective in the article Economic Performance, Social Progress and Social Quality [International Journal of Social Quality 2(1), Summer 2012: 43–57 © Zhejiang University, European Foundation on Social Quality and Berghahn Journals 2012 doi:10.3167/IJSQ.2011.010204]).

* This means at the same time that he oriented very much on a traditional perspective: economic recovery, seen as matter of industrial policy.

Actually I would agree with the need of recovery, but only under strict observation of the following qualification:

  • It has to be a matter of ‘covery’, meaning a policy that is fundamentally oriented on covering the entirety of economic and social challenges in an integrated way and also covering on a global level the entirety of the population – surely something on which we can easily find agreement. – Actually one of Joseph’s remark pointed into this direction, saying that there cannot be a surplus in all countries – yes, and indeed something also Germany has to accept.
  • Talking about recovery means that we have to find an integrated approach in terms of bringing the issue of soci(et)al sustainability thoroughly on the agenda. This is not just about ‘balancing different policy areas’ as it had been issued in the Economic Performance and Social Progress-report. A much more fundamental consideration is required.
  • This means not least to revisit the hugely valuable work issued by Karl Polanyi in his opus magnum on ‘The Great Transformation’, talking about the political and economic origins of our time (if I am not mistaken there is a more or less new edition of the book available – with a foreword/introduction by Stiglitz). Polanyi looked extensively at processes of dis- embedding, i.e. the separation of ‘the economy’ from the soci(et)al context. If we talk about the lost connection between finance and real economy, we surely have to look at the underlying loss of the connection between ‘society’ and ‘economy’.
  • This brings me to the last qualification when looking at the need for recovery. In a contribution I wrote together with Marica Frangarkis, we spoke about The need for a radical ‘growth policy’ agenda for Europe at a time of crisis (in: Dymarski, Wlodzimierz/Marica Frangakis/Leaman, Jeremy, 2104: The Deepening Crisis of the European Union: The Case for Radical Change; Poznań: Poznań University of Economics Press, 2014). And the kind of recovery, and even the way of thinking of recovery has to start at this point: the quid pro quo. It can only make sense if we start by overcoming the dichotomisation between economic and social thinking, demanding for both a sustainable orientation.

Indeed, the cart in front of the horse is always in danger to be pulled back – and at least this is something where I would strongly agree with Stiglitz: Austerity policies never did any good. But for the rest, we should remind ourselves of the little discussion between Alice and the cat.

“Would you tell me, please, which way I ought to go from here?”

“That depends a good deal on where you want to get to.”

“I don’t much care where –”

“Then it doesn’t matter which way you go.”

(from Alice in Wonderland)