Where Now for European Social Democracy? - Policy Network

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DOMINIQUE STRAUSS-KAHN 13the distance between the successful and everyone else.• Capitalism was standardised; it has become ‘post-Fordist’. Fordistcapitalism was based on the model of the large industrialenterprise and strong class identities. The standardisation of tasksalong a chain, and therefore the common interest of those whoworked along it permitted a sense of rapport between employersand the workers’ representatives. Employees had clear rights, withequal conditions of work for all. The modern economy, founded onthe differentiation between tasks, flexibility, and direct relationswith the client, has called the Fordist model into question. Largeenterprises have disappeared to the benefit of more atomisedunits, class barriers have broken down, and jobs have becomemore individualised. The result of this evolution is that theemployees’ rights have been eroded, they have been put intocompetition with each other, and paid according to theirperformance. As a corollary of this, inequalities in pay are rising.• Capitalism was national; it has become global. Globalization hasenlarged the salary range. Globalization weighs heavily onrevenues, and especially the salaries of the least qualifiedemployees in Western countries, who have to compete with thelow salaries of developing countries. Waves of delocalisation andrapid deindustrialisation in Europe – at least of labour intensiveindustries – bear witness to the gloomy effects of globalization.At the other end of the scale, globalization increases the value ofthe new cadre of international executives, whose function is toorganise the nomadic nature of business. This group is rewardedwith stock options, bonuses and so on.The redistributive capacity of the Welfare State has diminishedWith the growth of inequalities caused by the market, the need forredistribution has grown, if we wish to maintain a just society. TheWelfare State has come under attack on three fronts: ideological,demographic, and economic.The liberal ideology has won hearts and minds. It seems tocriticise redistribution as being harmful to growth. Redistribution
14WHERE NOW FOR EUROPEAN SOCIAL DEMOCRACY?might suppress the spirit of enterprise. It creates a benefits culture,and puts a break on the return to work of the unemployed. It increasesthe costs of production and limits the profitability of businesses, andconsequently the level of investment.Demographic evolution threatens the providential state. This is theresult of a fall in the number of people who contribute to the socialstate and a rise in those who benefit from state assistance. In France,until the end of the twentieth century, there were once three activeworkers for every pensioner. By 2020, there will only be one worker forevery pensioner. The growth in life expectancy has been coupled witha huge rise in health spending, especially on those dependent and atthe very end of their lives.Economic globalization produces a tension between growth andredistribution, which threatens the Welfare State. The success of postwarsocial democracy rests on the equilibrium between productionand redistribution, regulated by the state. With globalization, thisequilibrium is broken. Capital has become mobile: production hasmoved beyond national borders, and thus outside the remit of stateredistribution. Production thus depends on attracting internationalinvestment. For strong liberals welfare spending detracts from astate’s attraction as a destination for mobile capital: to achievegrowth, the Welfare State would have to be sacrificed. Growthwould oppose redistribution; the virtuous circle would become avicious circle.The providential state has therefore been shaken. In theseconditions, the risk is strong that it will no longer be able to controlthe growth of inequalities. Even worse, its disengagement at theprecise moment when the mutations of capitalism are causing thegrowth of inequality, could lead the machinery of inequality to spinout of control. This is the case in the United States: over the past20 years, the richest one per cent have increased their share ofnational wealth from eight per cent to 14 per cent, close to the1900 level of 18 per cent. Even if nothing is done, Europe couldfollow the same path.
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Page 6 and 7: AcknowledgementsThis collection of
Page 8 and 9: Notes on the ContributorsTony Blair
Page 10: PrefaceTONY BLAIRI welcome this pub
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The NewPolitics ofInsecurity
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Freedom in Security:A Social Democr
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