What has been happening in Europe – and indeed the US in a more muted and dispersed form – is nothing short of a complete rewriting of the implicit social contracts that have existed since the end of the second world war. In these contracts, renewed legitimacy was bestowed on the capitalist system, once totally discredited following the great depression. In return it provided a welfare state that guarantees minimum provision for all those burdens that most citizens have to contend with throughout their lives – childcare, education, health, unemployment, disability and old age.Of course there is nothing sacrosanct about any of the details of these social contracts. Indeed, the contracts have been modified on the margins all the time. However, the rewriting in many European countries is an unprecedented one. It is not simply that the scope and the speed of the cuts are unusually large. It is more that the rewriting is being done through the back door.Instead of it being explicitly cast as a rewriting of the social contract, changing people's entitlements and changing the way the society establishes its legitimacy, the dismembering of the welfare state is presented as a technocratic exercise of "balancing the books". Democracy is neutered in the process and the protests against the cuts are dismissed. The description of the externally imposed Greek and Italian governments as "technocratic" is the ultimate proof of the attempt to make the radical rewriting of the social contract more acceptable by pretending that it isn't really a political change.The danger is not only that these austerity measures are killing the European economies but also that they threaten the very legitimacy of European democracies – not just directly by threatening the livelihoods of so many people and pushing the economy into a downward spiral, but also indirectly by undermining the legitimacy of the political system through this backdoor rewriting of the social contract. Especially if they are going to have to go through long tunnels of economic difficulties in coming years, and in the context of global shifts in economic power balance and of severe environmental challenges, European countries can ill afford to have the legitimacy of their political systems damaged in this way.
3 comments:
I agree with you. In Spain 20% of the houses are empty, 2012 will end with more than 180,000 new foreclosures in Spain. Of these evictions, only 120 will not have to pay anything more, the rest will have to pay most of his life debt generated.
Greetings from Benicarlo - Spain
Many thanks for your comment : )
The Spanish figures are indeed overwhelming. Not that other figures in the European South are any better though. But Spain is particularly interesting in that it had both low debt and a budget surplus, so it contradicts the ever so convenient myth that the crisis is resulting because of countries 'living beyond their means'.
However, what I am worried about the most is the turn towards nationalism in the context of the harsh economic conditions of the Eurozone crisis. I'll leave it at that because there is a post coming up on this issue.
Greetings from the tormented, and yet surprisingly still holding up, city of Athens...
For those of you who may not be familiar with the case of Spain, there is a short piece by Paul Krugman in The New York Times which is very much to the point:
http://krugman.blogs.nytimes.com/2012/04/15/insane-in-spain/
And a quick word on the wider context as well:
http://www.nytimes.com/2012/04/16/opinion/krugman-europes-economic-suicide.html?src=ISMR_AP_LO_MST_FB
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