Jobs, industry and opportunity: Growth strategies after the crisis
” What does it take to initiate and perpetuate a “paradigm shift” in political economy? This is the question which many on the centre-left in Europe and beyond might ask themselves at the present time. They may do so because the financial crisis was supposed to trigger such a shift – after all it demolished the political foundation of “neo-liberalism” and led to a return of long-condemned economic interventionism. But as Andrew Gamble pointedly reminds us, “it is premature to talk of a new relationship between the state and the market”. One reason for this is relatively simple: as long as a new intellectual and political framework for wealth creation remains unarticulated or fails to impress, people tend to cling on to perceived wisdom. And that is why many neo-liberal ideas are already “re-appearing by default.”
The progressive reaction to this must not be one of complacency and dogmatism, but to review and sharpen our policy and political arguments in the quest for a new socio-economic settlement, one that can deliver on all fronts – from dynamic economic growth and financial stability to enhanced social security and environmental sustainability.
Hence, fresh thinking will be paramount. This selection of short articles, written by leading experts in the field, attempts to guide, inspire and, in particular, challenge us on some of the key issues at stake.
To begin with, we need greater clarity about the institutional legacy of the crisis. This concerns both the global dimension, where questions of legitimacy are hampering efforts to permanently enshrine the unprecedented
degree of international coordination which characterised the immediate response to the crisis (Kemal Derviş); and the national level, where governments are now confronted with a series of considerable “aftershocks” (Anton Hemerijck) which will define the political, social and economic parameters for years to come.
Indeed, it is the middle and lower classes who are suffering most from the financial crisis as pension funds and other institutional investors incur significant losses. An unsustainable growth strategy was thus inextricably
interwoven with our social systems, undermining the very bedrocks of our welfare state. For Allan Larsson, these systems must consequently be submitted to a “5P-stress test” which puts productivity, poverty reduction,
pensions, political involvement and public finances under close scrutiny.
Yet if the banking crisis has merely been replaced by a number of other crises, how do we go about creating a political economy which is truly geared towards the common good? Part of the challenge is to make sure that the concept of a low-carbon society, as well as that of a knowledge economy, actually resonates with the vast majority of our citizens. To date, they merely enthuse the privileged few.
For this to happen, it seems that fundamental changes will be required not only in the distribution of power and responsibilities in our collective institutions and economic sectors (Andrew Gamble), but also in facilitating the reassertion of the power of labour after years of wage stagnation for large parts of our population (David Coates).
At last, the centre-left has reached a consensus on the view that the gross distortion of top-level incomes is no longer acceptable and needs to be tackled with determination. While this must now be part of any new “social
justice” agenda, any measures taken are alone unlikely to ease the budget constraints and correct the financial imbalances which many countries currently wrestle with. Jeffry A. Frieden therefore offers us a valuable reminder of why progressives need to take financial consolidation and macroeconomic responsibility seriously. The intellectual challenge, in turn, will be to develop an “effective strategic state” (Patrick Diamond/Roger Liddle) that offers the highest social and economic returns, and to elaborate a “progressive opportunity agenda” (Will Marshall) which acknowledges the co-existence of anti-business and anti-government sentiments in our societies.
After the hard-earned modernisation processes of centre-left movements in the 1990s, calls for not “throwing out the baby with the bath water” arise for a good reason. Yet there are also challenging arguments for why social democrats should reclaim the “public realm” more forcefully, make job creation programmes the priority (James K. Galbraith) and increase the revenue base of the state so that it can assume its role in risk management more vigorously (John Quiggin).
What matters, after all, is that the re-calibration, re-invention or protection of the state is a means to an end, and not the end in itself. More creative thinking will therefore be required to deliver where the policy and political needs are greatest: unemployment, economic innovation and pressing global problems are cases in point. Dean Baker, Reinhilde Veugelers and Jean-François Rischard respectively demonstrate how “out of the box” ideas can make a real difference in these areas.
The way to a “paradigm shift” is a long one. Eternal verities on their own have little purchase in a society characterised by diversity and complexity. If the centre-left aspires to define the new political economy for the 21st century, it needs to pull out all its intellectual and political stops ” scrie, intru-un editorial de exceptie, un bun prieten, Olaf Cramme, director Policy Network. Mai multe idei, in acest articol care, dupa parerea mea merita citit.…recunosc ca mi-as dori si la noi dezbateri de idei si solutii asa cum sunt si cele propuse in acest articol.
In 2006 am reusit sa ii conving pe prietenii de la Policy Network sa organizam prima dezbatere in Romania despre ce model de societate dorim, parte a dezbaterilor despre modelul social european….dar recunosc ca unii si-au batut joc de eforul depus tratandu-l doar ca pe un vehicol de publicitate in mass media fara a pune mare pret si interes pe substanta ideilor si a solutiilor propuse….poate data viitoare!!???