A triumph of failed ideas European models of capitalism in ... - Journal

The triumph of failed ideas – Introduction.................................................................................................................................................................Table 1 (cont.)Type ofmodel*Characteristicchange in the1990s and 2000sTensions/unresolvedissues before crisisNew trends/emergingtensions since 2008IrelandLMEResidualwelfarestateHailed as role modelfor neoliberaldevelopment (lowtax, flexible labourmarket), legitimatedby substantial risesin cash wages andemployment, easedby 'socialpartnership'Model depends oncontinual inflow of FDIbut this in turn involveszero sum competitionwith EU member states;low social investmentmeans immigrationinstead of development oflabour force; commitmentto light-touch regulationensured Eurozone entrybut opened door tomassive speculativelending and henceproperty bubbleWay out of the crisis seen asconsolidation of ‘Boston notBerlin’; even deeper reliance on(US) FDI as saviour; furthermarginalisation of trade unionsGermanyCMEConservativewelfarestateUpheaval andfragmentation;neoliberalreorientation ofmajor actors in thewake of unificationSuccessful reform ofproduction system butmodel challenged by riseof less regulated servicesector, problems ofunification, lack ofuniversal labour standardsand an outdatedfamily/welfare model,deepening labour marketsegmentation and socialinequalitiesStrong pressure for ‘greengrowth’ but ever growingdependency on exports,deficient public investment andservices aggravated byausterity approach, ongoingresistance to statutoryminimum wages andmodernisation offamily/welfare modelFranceCME/stateledContinentalwelfarestateConversion – fromstate-led to stateenhancingPrivatisation anddecentralisation of thestate but the state hasexpanded role inproviding minimumincome guarantees andother forms of support forthe unemployed,particularly the youngPersistent unemployment andincreasing dualisation of labourmarket; upcoming issues:public spending cuts, taxreforms, ever increasing socialand regional inequalitiesAustriaCMEConservativewelfarestateConversion – fromdemand-led tosupply-ledcorporatismContinuity of corporatism,with continuing regulationof labour standardsassociated with majorchanges in politicalcontext. Failure tomodernise family andwelfare policyRevival of social partnership,ever increasing dependency onexports and on Germany,banks highly dependant onCEEA triumph of failed ideas – European models of capitalism in the crisis 13