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Paolo Borioni
An ethically informed strategy, based on growth through investment and better employment conditions, is also the most effective.
Our debate on the good society should not seek to design a social model based on ethical principles. Rather, ethics should help us in determining the direction and means by which we as democratic socialists seek to ensure piecemeal reform of society in a given historical context.
Before we go further into the ethical question, the historical question must be borne in mind: our task as democratic socialists is mainly to reform capitalism and the labour market. And this is for two very simple reasons: (a) capitalism is the element of modern society most capable of influencing the quality of life; (b) capitalism has potential for harm as well as good and therefore must be constantly reformed.
Progressive reformism has in recent decades neglected the need for the continuous reform of capitalism. As the present global crisis (and the likely stagnation to come) is proving, this was a bad idea. Even financial turbo-capitalism has been seen in over-positive terms, as a world of endless possibilities for anybody willing to make themselves 'employable'. And the welfare state has been perceived not as a means of correcting capitalism, but as the fulfilment of an obligation to the weakest members of the community (this is why Blairites are more communitarians than socialists); in the meantime capitalistic mechanisms were to be left unchanged. This is another unfruitful way of using ethics.
A third improper use of ethics is the conviction that fixing the financial global economy requires little more than some new rules to prevent excessive rewards for CEOs and restrain the cronyism of rating agencies and corporate leaders. This mentality is - paradoxically - as wrong as the argument put forward by some communists that their ideology in itself was perfect but was badly implemented by soviet leaders. In both cases, on the contrary, we need to follow totally different economic and societal models
. From this perspective, a good resource to draw on from ethics is the notion of 'complex equality': the idea that an open society is built on several spheres of justice, based on different ethical rules. For instance success in the market economy should not automatically entail access to better health or education. Moreover, if an open society operates according to only one single set of rules, its self-correcting potential will be undermined. The ethics and the dynamics of an open society, therefore, provide criteria for both investigation and reform. Thus the present crisis can be interpreted as a consequence of capitalistic internal logics meeting no real reforms, which leads to an environment of ethical standardisation: turbo-finance is attractive not only because of its enormous profits, but also because it avoids the obligations connected to the legitimately different interests of labour. We need instead 'patient' markets, where finance, basically, fuels production and jobs.
How? European socialists must rediscover the 1993 Delors White Paper on growth: there is a need for huge investment (from Union Bonds) in productive capacity (infrastructure, greening technology, new technologies). At the same time, wages and similar incomes must grow, both through the simple fact that there will be more demand for labour, and through a reform of the tax system in a more progressive direction. The reason for this is twofold:
(a) It will bring about new EU growth, providing a new market for global growth and proving that wage-based growth is much more reliable than growth based on debt and finance. Historically, indeed, low wages for too many people were a precondition of debt-based demand in the USA.
(b) It will entail a more 'Ricardian' investment mentality, seeking profit through innovation and better working conditions rather than through a worsening in wages and employment security. And this will trigger a positive 'path dependency'.
In this context the 2000 Lisbon strategy must be reshaped to provide new labour market institutions. Flexicurity must not be conceived of as mere 'workfare', i.e. 'the fastest way back to work'. On the contrary, it must be seen as a tool in the hands of public and private decision-makers as they, in partnership, redesign markets and innovation. Consequently, the anticipation of future new/better jobs, together with active labour market policies supporting workers in achieving the necessary skills, will strengthen the position of workers in the labour market. This, too, will reinforce a 'Ricardian' path dependency, thus providing more foreseeable growth expectations and better conditions for those who sell their labour. This strategy can bring about a true hegemonic turning point, which will begin to undermine anxiety, and thereby weaken right-wing populism.
Paolo Borioni is a PhD historian from Rome La Sapienza and KUA Copenhagen University. His main interests are social democracy, the Nordic countries, the welfare state and economic history; he has written or edited nine books and a large number of papers and articles on these subjects. He undertakes research for university and centre-left think tanks. He is member of the scientific advisory board of Fondazione Istituto Gramsci, and currently works for the centre-left in Italy.
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