The politics of progresssoul-searching and a proposal

Frank VandenbrouckePolicy Network, 31 March 2011, London

How to position social-democracy in the EU? Two interrelated sets of questions

• short term & tactical questions

– EU2020– European Semester– Competitiveness Pact– National austerity policies (which we lead)– National austerity policies (which we oppose)

• long term & fundamental questions

– Which concept of “social progress”?– What are the institutions of progress (EU? Nation States? Regions?)

Employment rate (15-64 years)

Poverty rate Setting the scene: the diversity of welfare states in the EU Employment rate and poverty rate

High employment

High poverty

High employment

Low poverty

Low employment

High povertyLow employment

Low poverty

Source: Eurostat

Looking back: “the new welfare state”

• “New risks in post-industrial societies”

– Inability to reconcile work and family life– Single parenthood– Having a frail relative– Possessing low or obsolete skills– Insufficient social security coverage

• “The social investment state”

– Activation– Training & education

• “From cash-heavy to service-orientation”

= a coherent set of interrelated strategic choices?

Looking back: the (our) Lisbon perspective

Looking back: employment success & fragility EU15 catching up with US in employment rate

Looking back: increase in employment rate, 2005-2008, ppt

Looking back: trends in poverty rates and material deprivation, 2005-2008

A crucial failure: jobless households

SPC, Growth, Jobs and Social Progress in the EU, 2009

Looking back: the Lisbon Strategy & Social Investment

• Well-known problems of policy methodology

• Substantive problems we should confront (instead of talking them away)

• Political problems (for social-democrats)

Looking back: problems of policy methodology

• Soft = weak

• Yet, at EU level there is no alternative for “management by objectives”

• “Cheap talk” must not be replaced by “cheap scepticism”

• How can “management by objectives” be made to deliver?

Looking back: substantive problems

• Varieties of social investment

• Can we create virtuous circles of social protection and (egalitarian) social investment? Yes, but…

• Tensions and dilemma’s cannot be deniedSee papers Cantillon, Vandenbroucke & Vleminckx

• Again, “cheap talk” must not be replaced by “cheap scepticism”

• What is the underlying economic strategy? The need for macro-economic governanceEmbedded social investment strategy

Looking back: political problems

• “The knowledge society” as an elitist project

• Social investment, “enabling policies”, flexibility

individual uncertainty & (un)happiness (cf. Layard on flexibility)

Should we fundamentally rethink the EU? Fritz Scharpf on the ECJ, and community and autonomy

• “… the Court’s interventions are based on a self-created framework of substantive and procedural European law that has no place for a proper assessment of national concerns that are at stake, and in which the flimsiest impediment to the exercise of European liberties may override even extremely salient national policy legacies and institutions. Within this highly asymmetrical juristic framework, a normatively persuasive balance between the essential requirements of European communality and the equally essential respect for national autonomy and diversity cannot even be articulated.”

• The proper balance has to be struck by the European Council

• Ferrera’s guarded optimism

• A nuanced assessment

Political assets and liabilities in the current EU framework

• New assets within the Lisbon Treaty

– Art. 9 TFEU (“horizontal social clause”)– Charter of Fundamental Rights in primary EU law– Services of General Interest

• New assets in EU2020

– Well-defined target on social inclusion: not to be underestimated (if definition is not corrupted!)

• Liabilities of Lisbon Treaty & EU2020

– Inability to translate this new ‘balance’ into instruments able to achieve and implement these objectives

– Political momentum dominated by ‘Competitiveness Pact’ (will we revisit the “2005 turn” in the Lisbon Strategy?)

Proposal: “The EU needs a Social Investment Pact”

• Social-democrats need a forward-looking proposition, based on robust arguments

• A robust analytical argument at our disposal

– The “UK model” is a recipe for failure, both at the national and the EU level– the “German model” cannot be generalized, despite some merits for Germany– … and attempts at its generalization risk compromizing the social investment paradigm

• New substantive emphases in a social-democratic narrative on social investment

– investing in a well-skilled ( “high-skilled”) society (*)– Investing in a fair society (*)

(*) cf. new insights in labour market dynamics, Goos & Manning; and excesses in financial sector

• Embedded social investment: economic governance, financial regulation

• Policy methodology

– Short term: How to make a “Social Investment Pact” as “hard” as the European Semester and/or the Competitiveness Pact?

– Longer term: legal frameworks?

A sustainable concept of social progress

• “Sustainable” in a dual sense

– Ecological sustainability of our societies– Long term credibility of our programmes

• The “happiness”-approach: potential & pitfalls

– Strength: the immaterial quality of life (and the value of security/certainty) revisited– Weakness: Bentham revisited– Pitfall: show that you care about happiness, don’t tell (a fortiori don’t shout it)

• Which institutional vehicle(s) for progress?

– Scharpf’s revisionist intergovernementalism (*) versus the revitalized supranationalism of the Spinelli-group?

(*) my interpretation!