I dedicated previous fourteen posts to the topic of relations between a European federation and its member states. But another section dedicated to basic rights labeled as chapter two should precede this section of the constitution (the section dedicated to the federation's competencies should be denoted as chapter three). I discussed the federation's competencies after the post about the preamble because I considered it as more important as the Europeans are certainly more interested in this if a European federation has been considered but the basic rights laid down in the constitution are as well as important for the future federation's functioning and for lives of its people. I should maybe analyze in this post on the basis of what the basic rights should be assembled but I will start with another thing. I was surprised myself when I finished writing about the federation’s competencies that only few provisions from the social sphere was present. But the reason was that I assumed that the chapter of the constitution about the basic rights would concentrate on the social sphere.
Today, I bring two text which emphasize significance of the social sphere for united Europe; for social issues stand not at center of present unification process. The texts are translated two chapters from the book “Soumrak sociálního státu” [The Decline of the Welfare State] written by the Moravian sociologist Jan Keller (in the year 2005). I stressed the last sentence of the second part by a bold-faced text for the sake of its great importance.
Are we tending towards sympathetic Europe?
The voices about establishing united, socially responsible Europe sound surprisingly in the situation when various forms of loss of solidarity destruct social insurance systems in the level of individual states. This demand unfortunately left not yet the only absolutely superficial level of phrase declarations somehow more significantly. Europe is establishing a united welfare state non yet in minimal measure. It only recommends minimal social standards to individual states from time to time which cost nobody anything and which are restricted only to cover some few social hazards of selected social groups (e. g. the foreign workers).
Nobody of them who use the slogan of socially sympathetic Europe in their political campaigns, occupies unfortunately itself seriously not with a question how to achieve sympathetic Europe if solidarity in scope of individual states of Europe has been endangered and its decay has been intensified.
Who actually should be a bearer of sympathetic Europe? Great businessmen and industrialists should be who will make an effort to establish strong and vigorous Europe-wide regulation after they got rid of much more weaker regulation in nation states' level? Should they be young people who are ever less willing to contribute to the old-growing population in their own countries but instead they will like more to raise money for pensioners Europe-widely? People who still have full-time jobs will contribute to social insurance of great number of people in countries like Great Britain, Spain or the Netherlands who staked on partial and time-limited work contracts?
If the politicians who speak about socially responsible Europe meant it really, they would have to start occupying themselves with two absolutely fundamental questions:
In what level the social securing systems can be harmonized on an all Europe scale? It would not definitely be able founded on the base of Scandinavian pattern because it would require heavy increase of taxes in most European countries. If the relatively rich Scandinavian states themselves have ever greater problems to finance their social securing systems, one can hardly imagine that the considerably poorer states which prevail in Europe could join this system.
The Europe-wide social system however could be established not even according to the “continental” pattern. That has been deeply undermined by crisis of employment society. If rich Germany is not capable of paying its social system after unemployment went to some point, how the countries where unemployment is ever higher and productivity of their economy is considerably lower than in Germany could be capable of paying it? (To extend the German social securing system only to the European 15 (EU before 2004) would cost 500 000 000 000 000 euros yearly in addition (Schmid, J,: Wohlfaartsstaaten im Vergleich, Opladen 2002, p. 65)).
Nor the pattern of southern Europe comes into consideration because it assumes that much services of social securing have been accomplished by the relatively cohesive and stable family. Increasing fragility of the family in the southern Europe countries can be expected rather than growing its cohesion in the countries of the northern Europe. The most likely is therefore takeover the liberal pattern which however would mean decline of social securing in a level of the lowest common factor. Also it could be preserved in the present level only in the case that also the following question will be answered satisfactorily.
How united Europe without taxes unification, without tax system harmonization could be established? Competition for taxes reduction that should serve to individual states to attract foreign investors does non admit the idea of social sympathetic Europe, it brings it into disrepute on the contrary. Such a country which reduces taxes below the level of other ones acts similarly to a family that chooses childlessness and makes use of pension system. This country has two advantages in comparison with other countries. On the one hand it can detract some investors from the countries that joined not the tax reduction competition by promising lower taxes. Such country reduces expenditures on its own unemployed ones but these expenditures will increase in the countries which the investors were detracted from.
A country with lower taxes will have lower amount of financial resources at its disposal for public purposes as a rule. Although it saves maybe expenditures on unemployment, it will ask for subsidies at other public spheres from the European Union. These subsidies will be covered especially from the means of that countries which have not reduced their taxes. Such countries will therefore be afflicted twice: they will have to subsidize their poorer neighbours which detract foreign investors from them by tax dumping, which extend in addition unemployment and so they lessen extent of resources that the richer countries could distribute for purposes of subsidies.
The attractive talks about building up sympathetic Europe have a form of utopia the in present arrangement. This utopia serves however also as a specific ideology. Especially the social democratic politicians use the promise of socially responsible Europe so that they sweeten a retreat from social responsibility in their own countries to their voters. A system of social securing has been better streamlined, cut off, reduced, simply “modernized” if the voters can be calmed by an idea of social Europe which will supposedly be much more generous, magnanimous and socially secure (and paradoxically also certainly more modern at the same time) than the present nation states are.
There is a relevant danger that only or predominant form of solidarity that opportunity comes for is solidarity inside all-European power elite. “A danger grows and becomes more intensive in Europe-wide level that economic and political elite will prefer solidarity in the scope of its class to solidarity with them who they should represent” (Döring, D.: Sozialstaat in der Globalisierung, Frankfurt am Main 1999, p. 83).
Horst Afheldt – The strong state Europe
The German analyst Horst Afheldt (Wirtschaft, die arm macht. Vom Sozialstaat zur gespaltenen Gesellschaft, München 2003) presents the hitherto most radical project for saving a welfare state. He is aiming at correction of relation between the state power and the market where former balance has been deflected to state institutions' disadvantage as a consequence of globalization.
Savage violation of this former balance has been manifested itself in weakening of labour because pays are at a standstill whereas employees have been more and more burdened by taxes and charges. On the contrary, businessmen and firms which have growing proportion in incomes of the GDP have descending proportion in taxpaying. So, redistribution proceeds from below to upwards.
Nothing of that what neoliberals have been promising for already thirty years has come true. According to them, the economic growth was to create enough jobs. But growth has been achieved saving jobs and just the firms that export most and that are the most successful in the global economy are the ones that dismiss most. Next promise of neoliberals was that people which will work will have enough money. But in particular non full-time jobs increase and loss of incomes from labour makes to maintain the welfare state not possible. The result is still richer and still less numerous upper class, stagnating middle class at which all expenses has been transferred though they profit still less from the growth and finally rapidly increasing numbers of socially needy ones in lower classes. To continue further according to neoliberal directions then is only to move on a way forward more rapidly towards splitting society.
According to Afheldt, the only solution of deepening crisis is rehabilitation of state's control over economy. But it cannot be realized in the nation states' level because the states became too weak opponents of supranational powers of economic globalization. It is necessary to unite Europe as closely as possible and to create a political unit from it which will able to regulate effectively its economic and social politics.
Whatever effort to remedy things putting correction into effect from initiative of individual states is condemned to failure. If an individual state refused to provide firms with tax allowances, had reluctant to attract them through still more generous investment incentives and permitted not pressures in favour of reduction of employees pays, the firms would leave in another, more “competitive” country. A defence can only be collective and who must proceed to it is Europe as a whole.
Afheldt suggests to levy uniform customs duties on import in Europe, namely to the extent of 20 to 30% for example; then to double taxes for firms and for the highest income groups and to reduce the taxation of employees by half. Particularly in German conditions, the proportion between taxation of firms and employees would thus come back to the level of beginning of the seventies of the 20th century. The for thirty years lasting transfer of tax burden from the strong ones to the weak ones would be so upset. The firms would have also considerable possibility of tax rebates in favour of non-profit organizations.
Afheldt discusses the most likely consequences of these arrangement. The firms that would leave Europe protesting against heavier tax burden would have to overcome the import tax of 30%. They would transfer it in the prices of their products. It would make possible to raise prices of their products to the approximately same level also for the firms which would remain in Europe. The prices increase of products and services would lead in some extent to increase of profit of the firms that would remain in Europe and would make it possible to pay requested higher taxes from their side and to pay higher pays. It would come to higher incomes of the state from taxes and thus a possibility to reduce state debts and tax burden of their citizens. Employees would be able to buy goods raised in prices either by the income tax (in case of the firms that would leave) or by higher income tax (in case of the firms that would remain in Europe) due to reduction of their tax burden.
Afheldt adds that one thing can be expected at the same time: to introduce high import duties would cause similar reaction also outside Europe where duties against our import would be introduced. It would not however be an obstacle because the European export has to be reduced in every case. Purchasing power is a scarce commodity in the world of today and the Europeans should leave a place also to less developed ones in foreign markets. To restrict our export would actually be a kind of development aid because we would not occupy markets to developing countries' disadvantage and would leave something from their demand. Beside that, drop of transportation over whole continents would have significant contribution to the environment's protection.
It is obvious that Afheldt's project has not even a minimal chance to be realized in present neoliberal atmosphere which rules over economics and politics. It is obvious however at the same time that two fundamental priorities of the project remain substantially decisive. These priorities are at one hand to secure incomes from labour in the developed countries against fall of labour price in the world markets, on the other hands to prevent financially starving states and their public sector.
If pressure on cutting subsidiary wages expenses grows stronger, if stagnation or fall of employees' incomes and competition among states for taxes reduction for firms and investors continues, “united Europe” becomes only an empty idea if not just an instrument for surrender of politics to economy. If uniting Europe leads not to reestablishing balance between the democratic institutions and the powers of the market, it is actually needless to build Europe so laboriously.
Today, I bring two text which emphasize significance of the social sphere for united Europe; for social issues stand not at center of present unification process. The texts are translated two chapters from the book “Soumrak sociálního státu” [The Decline of the Welfare State] written by the Moravian sociologist Jan Keller (in the year 2005). I stressed the last sentence of the second part by a bold-faced text for the sake of its great importance.
Are we tending towards sympathetic Europe?
The voices about establishing united, socially responsible Europe sound surprisingly in the situation when various forms of loss of solidarity destruct social insurance systems in the level of individual states. This demand unfortunately left not yet the only absolutely superficial level of phrase declarations somehow more significantly. Europe is establishing a united welfare state non yet in minimal measure. It only recommends minimal social standards to individual states from time to time which cost nobody anything and which are restricted only to cover some few social hazards of selected social groups (e. g. the foreign workers).
Nobody of them who use the slogan of socially sympathetic Europe in their political campaigns, occupies unfortunately itself seriously not with a question how to achieve sympathetic Europe if solidarity in scope of individual states of Europe has been endangered and its decay has been intensified.
Who actually should be a bearer of sympathetic Europe? Great businessmen and industrialists should be who will make an effort to establish strong and vigorous Europe-wide regulation after they got rid of much more weaker regulation in nation states' level? Should they be young people who are ever less willing to contribute to the old-growing population in their own countries but instead they will like more to raise money for pensioners Europe-widely? People who still have full-time jobs will contribute to social insurance of great number of people in countries like Great Britain, Spain or the Netherlands who staked on partial and time-limited work contracts?
If the politicians who speak about socially responsible Europe meant it really, they would have to start occupying themselves with two absolutely fundamental questions:
In what level the social securing systems can be harmonized on an all Europe scale? It would not definitely be able founded on the base of Scandinavian pattern because it would require heavy increase of taxes in most European countries. If the relatively rich Scandinavian states themselves have ever greater problems to finance their social securing systems, one can hardly imagine that the considerably poorer states which prevail in Europe could join this system.
The Europe-wide social system however could be established not even according to the “continental” pattern. That has been deeply undermined by crisis of employment society. If rich Germany is not capable of paying its social system after unemployment went to some point, how the countries where unemployment is ever higher and productivity of their economy is considerably lower than in Germany could be capable of paying it? (To extend the German social securing system only to the European 15 (EU before 2004) would cost 500 000 000 000 000 euros yearly in addition (Schmid, J,: Wohlfaartsstaaten im Vergleich, Opladen 2002, p. 65)).
Nor the pattern of southern Europe comes into consideration because it assumes that much services of social securing have been accomplished by the relatively cohesive and stable family. Increasing fragility of the family in the southern Europe countries can be expected rather than growing its cohesion in the countries of the northern Europe. The most likely is therefore takeover the liberal pattern which however would mean decline of social securing in a level of the lowest common factor. Also it could be preserved in the present level only in the case that also the following question will be answered satisfactorily.
How united Europe without taxes unification, without tax system harmonization could be established? Competition for taxes reduction that should serve to individual states to attract foreign investors does non admit the idea of social sympathetic Europe, it brings it into disrepute on the contrary. Such a country which reduces taxes below the level of other ones acts similarly to a family that chooses childlessness and makes use of pension system. This country has two advantages in comparison with other countries. On the one hand it can detract some investors from the countries that joined not the tax reduction competition by promising lower taxes. Such country reduces expenditures on its own unemployed ones but these expenditures will increase in the countries which the investors were detracted from.
A country with lower taxes will have lower amount of financial resources at its disposal for public purposes as a rule. Although it saves maybe expenditures on unemployment, it will ask for subsidies at other public spheres from the European Union. These subsidies will be covered especially from the means of that countries which have not reduced their taxes. Such countries will therefore be afflicted twice: they will have to subsidize their poorer neighbours which detract foreign investors from them by tax dumping, which extend in addition unemployment and so they lessen extent of resources that the richer countries could distribute for purposes of subsidies.
The attractive talks about building up sympathetic Europe have a form of utopia the in present arrangement. This utopia serves however also as a specific ideology. Especially the social democratic politicians use the promise of socially responsible Europe so that they sweeten a retreat from social responsibility in their own countries to their voters. A system of social securing has been better streamlined, cut off, reduced, simply “modernized” if the voters can be calmed by an idea of social Europe which will supposedly be much more generous, magnanimous and socially secure (and paradoxically also certainly more modern at the same time) than the present nation states are.
There is a relevant danger that only or predominant form of solidarity that opportunity comes for is solidarity inside all-European power elite. “A danger grows and becomes more intensive in Europe-wide level that economic and political elite will prefer solidarity in the scope of its class to solidarity with them who they should represent” (Döring, D.: Sozialstaat in der Globalisierung, Frankfurt am Main 1999, p. 83).
Horst Afheldt – The strong state Europe
The German analyst Horst Afheldt (Wirtschaft, die arm macht. Vom Sozialstaat zur gespaltenen Gesellschaft, München 2003) presents the hitherto most radical project for saving a welfare state. He is aiming at correction of relation between the state power and the market where former balance has been deflected to state institutions' disadvantage as a consequence of globalization.
Savage violation of this former balance has been manifested itself in weakening of labour because pays are at a standstill whereas employees have been more and more burdened by taxes and charges. On the contrary, businessmen and firms which have growing proportion in incomes of the GDP have descending proportion in taxpaying. So, redistribution proceeds from below to upwards.
Nothing of that what neoliberals have been promising for already thirty years has come true. According to them, the economic growth was to create enough jobs. But growth has been achieved saving jobs and just the firms that export most and that are the most successful in the global economy are the ones that dismiss most. Next promise of neoliberals was that people which will work will have enough money. But in particular non full-time jobs increase and loss of incomes from labour makes to maintain the welfare state not possible. The result is still richer and still less numerous upper class, stagnating middle class at which all expenses has been transferred though they profit still less from the growth and finally rapidly increasing numbers of socially needy ones in lower classes. To continue further according to neoliberal directions then is only to move on a way forward more rapidly towards splitting society.
According to Afheldt, the only solution of deepening crisis is rehabilitation of state's control over economy. But it cannot be realized in the nation states' level because the states became too weak opponents of supranational powers of economic globalization. It is necessary to unite Europe as closely as possible and to create a political unit from it which will able to regulate effectively its economic and social politics.
Whatever effort to remedy things putting correction into effect from initiative of individual states is condemned to failure. If an individual state refused to provide firms with tax allowances, had reluctant to attract them through still more generous investment incentives and permitted not pressures in favour of reduction of employees pays, the firms would leave in another, more “competitive” country. A defence can only be collective and who must proceed to it is Europe as a whole.
Afheldt suggests to levy uniform customs duties on import in Europe, namely to the extent of 20 to 30% for example; then to double taxes for firms and for the highest income groups and to reduce the taxation of employees by half. Particularly in German conditions, the proportion between taxation of firms and employees would thus come back to the level of beginning of the seventies of the 20th century. The for thirty years lasting transfer of tax burden from the strong ones to the weak ones would be so upset. The firms would have also considerable possibility of tax rebates in favour of non-profit organizations.
Afheldt discusses the most likely consequences of these arrangement. The firms that would leave Europe protesting against heavier tax burden would have to overcome the import tax of 30%. They would transfer it in the prices of their products. It would make possible to raise prices of their products to the approximately same level also for the firms which would remain in Europe. The prices increase of products and services would lead in some extent to increase of profit of the firms that would remain in Europe and would make it possible to pay requested higher taxes from their side and to pay higher pays. It would come to higher incomes of the state from taxes and thus a possibility to reduce state debts and tax burden of their citizens. Employees would be able to buy goods raised in prices either by the income tax (in case of the firms that would leave) or by higher income tax (in case of the firms that would remain in Europe) due to reduction of their tax burden.
Afheldt adds that one thing can be expected at the same time: to introduce high import duties would cause similar reaction also outside Europe where duties against our import would be introduced. It would not however be an obstacle because the European export has to be reduced in every case. Purchasing power is a scarce commodity in the world of today and the Europeans should leave a place also to less developed ones in foreign markets. To restrict our export would actually be a kind of development aid because we would not occupy markets to developing countries' disadvantage and would leave something from their demand. Beside that, drop of transportation over whole continents would have significant contribution to the environment's protection.
It is obvious that Afheldt's project has not even a minimal chance to be realized in present neoliberal atmosphere which rules over economics and politics. It is obvious however at the same time that two fundamental priorities of the project remain substantially decisive. These priorities are at one hand to secure incomes from labour in the developed countries against fall of labour price in the world markets, on the other hands to prevent financially starving states and their public sector.
If pressure on cutting subsidiary wages expenses grows stronger, if stagnation or fall of employees' incomes and competition among states for taxes reduction for firms and investors continues, “united Europe” becomes only an empty idea if not just an instrument for surrender of politics to economy. If uniting Europe leads not to reestablishing balance between the democratic institutions and the powers of the market, it is actually needless to build Europe so laboriously.
