1. Session #2(a) A European Social Model? 8 March 2017
Public Economics: Welfare states and inequalities University of Castellanza
Session #2(a)
A European Social Model?
8 March 2017

2. This lecture Reading for this lecture:
Welfare state as defining Europe
Social cohesion and social inclusion
Elements of the European Social Model
Social citizenship
Limited egalitarianism
Backbone state
Economic citizenship
The EU and the ESM
Reading for this lecture:
Wickham, Unequal Europe, chapter 1 (sections 3 and 4)

3. Some quotes again
“There won’t be a bill to pay. We do it a bit differently here. In the National Health Service, we don’t charge for medical treatment’. (British nurse to American visitor in casualty ward)… quoted in Reid, The United States of Europe, p. 145.
‘This widely shared sense of the government’s social responsibility to everybody is another unifying force that makes Europeans feel they all belong to a single place – a place they believe, that is definitely not American.’ Reid, p.146.
But is this about being British (or French or Italian or Swedish etc) or about being European?

4. A European Good Thing?
Europe has built a distinctive economic and social model that has combined productivity, social cohesion and a growing commitment to environmental sustainability. (Kok, 2004: 7)
Preserving our European social model - our specific combination of market economy, welfare state and democracy - requires action not only at the European level but also at the global level. (Lamy, 2004:18)

5. Inclusion & Cohesion Vertical axis is about (in)equality
Measures for vertical axis:
Poverty rates (% below y% of median income);
Income inequality (Gini coefficients, decile ratios)
Vertical axis is about (in)equality
FRAGMENTATION
COHESION
Meausures for horizontal axis:
Level of social capital and trust; crime
Horizontal axis is about trust and ‘social capital’
EXCLUSION

6. Inclusion & Cohesion INCLUSION COHESION FRAGMENTATION EXCLUSION
Millenarian egalitarianism (Bolshevism…Pol Pot…Taliban
Cyber populism
COHESION
FRAGMENTATION
Claudillo dictatorships; China?
EXCLUSION
Fascism

7. Inclusion & Cohesion UK USA INCLUSION ANOMIE COHESION ÈXCLUSION
Millenarian egalitarianism (Bolshevism…Pol Pot…Taliban
Cyber populism
European Social Model
Settler demo-cracies
Scandinavian social democracies
ANOMIE UK
COHESION
Continental corporatism
Representative democracies
USA
Medi-terranean familism
Claudillo dictatorships; China?
ÈXCLUSION
Fascism

8. Social citizenship Education, health, housing, income support…
Rights not charity
Baseline for participation in society
Financial costs (taxation)
Rights means obligations
Restrictions on diversity (‘thick citizenship’)
Involves both inclusion and cohesion

9. Egalitarian Europe (1) Income distribution
No European country has such a large proportion of its population with less than 50% of median income
The US has a larger proportion of its population with more than double the median income, but here Sweden is the outlier

10. Egalitarian Europe (2) Attitudes to inequality
Swe
Ger
Aus NZ
Can
USA
‘It is the responsibility of the government to reduce the differences between people with high incomes and those with low incomes’ (% agreeing)
Legitimate income difference between ‘unskilled factory worker’ (income=100) and ‘Chairman of a large national company’

11. Egalitarian Europe (2) Attitudes to inequality
Swe
Ger
Aus NZ
Can
USA
‘It is the responsibility of the government to reduce the differences between people with high incomes and those with low incomes’ (% agreeing)
53.7
65.5
42.6
53.1
47.9
38.3
Legitimate income difference between ‘unskilled factory worker’ (income=100) and ‘Chairman of a large national company’
239
711
480
419
512
1,114
Primarily about inclusion

12. Backbone state Public realm
NOT market, NOT personal
Importance of state service (Beamte, service public, civil servant)
‘This social capability is supported by a conception of the public realm whose underwriting of public science, public transport, public art, public networks, public health, public broadcasting, public knowledge and the wider public interest gives European civilization its unique character while offering many of its enterprises competitive advantage.’ (Hutton, 2002: ).
Simplest measure: state expenditure as % GDP
Primarily cohesion

13. Economic Citizenship Primarily cohesion Labour market regulation
Employment protection
Working time
Health and safety
Rights to information
Rights to representation
Trade union membership
Trade union coverage
Workplace representation (Betriebsrat, European Works Council)
Anti-discrimination
Equal pay (including pensions, benefits)
Equal opportunities (recruitment, promotion)
Work-life balance
Parental leave
Right to flexible working
Primarily cohesion

14. Emergence of social Europe
1956 Treaty of Rome
Retraining for those effected by industrial change
1974 Social Action Programme
Response to enlargement; 1960s militancy
Employee rights, equal opportunities
Maastricht Treaty 1991
Social Charter of Fundamental Rights of Workers
1990s Delors promoting ‘European Social Model’
‘A market economy, not a market society’ (Jospin)
Social expenditure to contribute to competitiveness
In parallel to single market programme
2000 Lisbon Declaration
The Union has today set itself a new strategic goal for the next decade: to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion
An employment-based social policy
Intergovernmentalism (‘Open Method of Co-ordination’) and ‘Soft law’
So ending European Social Model or reformulating European Social Model?
Europe 2020
Smart growth with “smart sustainable and inclusive growth’
Explicit inclusion targets

15. The EU and the ESM Positive integration: Negative integration
Creating a single European society
EU creates basic social and economic rights for all Europeans
BUT these are limited; most social rights depend on national welfare states
Negative integration
Creating a single European market
Removal national barriers to competition: Now very successful
BUT not a basis for a new European identity
The current crisis
Austerity programmes seen as ‘European’ and destroying welfare states!