Globalization makes international collaboration more urgent; but it also makes it less likely to happen. Marketization requires social policy, not only to combat the negative effects of markets, but also to support the market with things it cannot provide for itself; but marketization and social policy are usually seen as opposed projects.
For Europeans, confronting these two dilemmas is currently being made even more difficult by the insistence of the British and a few others that the European Union should become little more than a loose trading bloc. This direction of thinking, reinforced by the success of racist and xenophobic parties in the recent European parliamentary elections, has to be contested and reversed. Concretely, this means that we need a European Social Union, coalescing around the social investment welfare state.
Globalization in a world of competing nation states leads to economic power being wielded at a level that is beyond the reach of democracy, and therefore to dominance of our lives by transnational corporations. We should not seek to deal with this problem by reversing globalization, as that leads to protectionism, economic inefficiency and intensified antagonism among states. Strengthening transnational democracy is needed, but this is very hard, as it requires not just formal institutions but popular sentiment that accepts shared interests across national boundaries.
Sadly, the main impact of globalization on public opinion is exactly the opposite: to strengthen mutual hostility among people in different parts of the world and to encourage politicians to excite nationalist ideologies. This is by no means limited to Europe, as recent developments in India, Japan, the Islamic world and elsewhere show. A powerful, totally cynical manipulation of this tension comes when neoliberals ally themselves with the nationalistic cause, speaking on behalf of national sovereignty when their aim is to prevent political action from reaching the international levels where global economic power can be contested. Europe has at least made a start on building the necessary transnational identities through such institutions as the European parliament. The attack on these institutions has to be repulsed as necessary preparation for a renewed European social policy.
The complex relationship between marketization and social policy also has to be balanced at the European level. There is now a danger of a division of labour, whereby the EU deals with market-making and competition policy, while nation states have sole responsibility for social policy. This must be resisted for two reasons. First, achieving an acceptable balance is difficult enough without it becoming a conflict between different levels of subsidiarity. Second, if European institutions become solely responsible for market-making, they become insensitive to any kind of policy knowledge other than textbook economics. We see this already in the destructive effect of competition policy on countries’ abilities to maintain areas of social policy outside the market, and in the assault of the European Court on Nordic collective bargaining.
Frank Vandenbroucke (2014) has recently argued for a European Social Union, by which he does not mean an attempt to produce a single form of welfare state for all EU members, but a means of guiding national welfare states so that they are not used for ‘beggar my neighbour’ competition, but find their own ways to become examples of the ‘social investment welfare state’ (Hemerijck 2012; Morel, Palier and Palme 2012). This points to an important way forward, as it advances a European social policy competence while not attempting the old kind of harmonization.
Something of this kind was embodied in the Open Method of Coordination, but that tended to degenerate into allowing all countries to describe what they were doing without any serious pressure to conform to agreed priorities. The social investment welfare state now needs to be adopted as a priority, with countries being seriously questioned about whether their current social policies are really consistent with that concept.
Such an approach would achieve two, ostensibly opposite but in fact mutually compatible, goals. First, addition of achievement of a social investment welfare state alongside the market-oriented priorities of the competition directorate, the European Court, and the narrow goals of austerity policies for countries in difficulties would protect Europe from the neoliberal hegemony that is threatening to overwhelm it. But second, countries would not be left free to pursue regressive and economically unhelpful social policies as was happening in much of south-west Europe in the years before the Eurocrisis. Development of knowledge within the Commission and other EU institutions of the constructive role that social policy can, and in many countries does, play would have a healthy impact on how the Union develops in the coming years.
It can be contested that none of this will help combat the xenophobia sweeping through Europe. However, it is wrong to interpret the rise of the far right as something that results from European integration; similar movements have become powerful in Norway and Switzerland, outside the EU, as well as in other parts of the world that I have mentioned. The issue is globalization, not Europe. And part of the new xenophobia can be explained as a reaction to Islamic terrorism, which is itself another reaction to globalization. Social policy at any level cannot claim to hold the answer to all these ugly developments of today’s world – though it remains true that a population that has the security of a strong welfare state should be less prey to the fears and uncertainties that give the far right a major part its appeal.
Hemerijck. A. (2012), Changing Welfare States, Oxford: Oxford University Press.
Morel, N. Palier, B. and Palme, J. (2012), Towards a Social Investment Welfare State? Bristol: Policy Press.
Vandenbroucke, F. 2014, ‘The Case for a European Social Union’, European Policy Brief, 23.