From the TUC

The European social model: a social investment state?

25 Nov 2013, by in International, Politics

I’m a bit late blogging about this, but those fabulous folk at Social Europe Journal recently reprinted a short interview with LSE Professor Emeritus Anthony Giddens, which contained two key ideas that should be central to the debate about Europe – certainly more central than issues such as repatriation or referendums.

First, he argues for a “social investment state” as a reboot of the European social model, comparing Europe’s well-developed but now much assaulted welfare safety nets with the situation in China, where the lack of such safety nets is becoming a huge brake on economic growth by requiring consumers to hoard money against the future costs of illness, unemployment or old age, rather than spend their way back to the 10% rates of growth that drove the Chinese economic boom. And second, he argues that, far from draining national states of their sovereignty, the European Union gives each member state far more control over their destiny through the collective power they have on a global level: something he calls “sovereignty+” (a bit like individual workers banding together in a trade union!)

What struck me most about both ideas (there’s more on the first below, but the second is, I think, pretty clear) is that they take us a lot further than the usual debate between leaving the EU versus defending the status quo. Most trade unions are profoundly depressed that these seem to be the only options on offer, so new ideas that allow us to criticise the current EU and demand more are sorely needed.

So, the “social investment state” is not merely a defence of the current social model, but a demand for something more. Giddens uses the example of public health systems, which are all too often just a sticking plaster when things go wrong, but could massively improve economic efficiency by promoting public health, rehabilitation after injury, and tackling inequality.

As he says:

“My view is that it’s a mistake to separate the economic side of the European Union from the social side. A lot of what occurs in a welfare system is relevant to economic productivity.”

Another example of new thinking is the ETUC’s “New Path for Europe” which aims to use new methods of unlocking private savings – such as Euro-Bonds – to invest in sustainable and socially just growth, with good wages and enhanced skills. We need more of these ideas to win popular support for change, and to defend what is good about the European social model.