Past and Future of the European Social Model
--- FORBA - Working Life Reserach Centre Vienna Vienna, Austria
The paper takes the financial crisis as a starting point to discuss the history of the notion of the European Social Model, how the very foundations of the ESM have been eroded in the past two decades through neoliberal restructuring and what are the main features of a future ESM that centres on the well-being of citizens rather than on profit-maximisation of businesses. The current crisis drastically shows the pitfalls of a privatised and deregulated capitalism. Americans not only loose their jobs, they also loose their health insurances, pension income, homes etc.
Not long after the Great Depression Karl Polanyi noted that market economies need to be protected from the "satanic" forces of self-regulated markets. The New Deal can be seen as an attempt to limit market forces by imposing rules on the deployment of labour power. After the Second World War this was complemented by rules on international trade and on currency exchanges. In Western Europe the market sphere was counter balanced by the creation of welfare states, public enterprises and public services. The result was that Western and especially Northern European societies achieved a degree of decommodifaction unknown in the US and other capitalist systems.
This development has been reversed in the past two decades. The reform of European welfare states and the privatisation of public services fuelled inequality and made the livelihood of Europeans increasingly dependent on the process of accumulation. The erosion of the ESM was greatly accelerated by the transformation in Eastern Europe. Interestingly the term ESM was used in this process to justify the gradual abolishment of European distinctiveness and the move towards American capitalism. The paper will argue that the current conjuncture is an opportunity to demand for a revitalisation of the ESM with the overall objective to re-establish and perhaps push further the comparable high level of decommodification. Three issues are particular important in this regard: The rebuilding of welfare states coupled with strong labour regulations and working time reductions; the creation and expansion of public services that are not subjugated to market forces; a sustained democratisation of European societies.