Forum for the Future of Democracy 2011
‘The Interdependence of Democracy and Social Cohesion’

Panel debate

‘Fighting the crisis without undermining social cohesion: can Europe meet the challenge?’

Mary Daly
Professor, School of Sociology, Social Policy and Social Work,
Queen’s University Belfast

When one has to address a complex topic like this in a relatively short speaking time, one is forced not just to be succinct but to make crystal clear where one stands on the issue..

Can Europe meet the challenge – my answer is ‘yes’. It is not an unqualified ‘yes’ however for I believe that we are not there yet and I question whether we are going about it the right way. One of the main messages that I have for you this morning is that certain things have to change if Europe is to get through this crisis in a way that is not socially or politically divisive. In particular, we have to change how we analyse and think of the crisis and especially our understanding of where things went wrong and how they can be put right. The title of this session implies also that we direct our attention to the interlinkages between democracy and society (social cohesion) and that is the focus of my second message this morning: we need to attend continuously to social factors, to recognise that they connect closely to democracy and to keep a close eye on how these inter-connections are affected by the crisis. It is time for a profound and critical analysis of how we have responded thus far and this forum is a valuable opportunity to undertake that review.

To begin with the crisis...
I am glad that we start the conference with this session because it is an overwhelming discourse today. Crisis is a big word – the term implies that we are at a vital cross-roads and must take drastic steps. It is a term that is used quite loosely however. In effect, ‘crisis’ is a shorthand for all that is wrong in the present period. As such crisis is a construction. People use it to refer to the financial crisis, the crisis of governance (whereby there is a loss of authority and trust in the institutions and key actors of society), increased insecurity (whether from terrorism, financial insecurity, unemployment, migration or many other factors), or indeed to a crisis of philosophy or explanation – the causes and remedies are highly disputed.

The view is widespread that the crisis has changed things utterly. I would counsel caution as regards this view. My point is not that we should not take seriously what is happening but that we should resist certain interpretations of ‘the crisis’. These include the view that this was something that started in 2008.What the crisis involves, I suggest, is the exacerbation of trends that set in much earlier. This is a very important point and I say it mindful of keeping a certain openness about how things are developing. The latter is necessary for two reasons. We should note that “the political and social consequences of financial crises usually follow with a time lag” (Tsoukalis 2011: 26). Hence, we cannot be sure at this juncture that we have yet seen the full social and political fall-out from the recent developments in the economy. Secondly, in suggesting that the crisis pre-dated 2008, I would not wish to underestimate the effects that the handling of the crisis is having on the EU. The political reactions and lack of clarity (effectively at the present time a stalemate) appear to represent a rolling back of the convergence that took place in the EU over the last 20 years towards enlargement. But this is a point about the handling of the crisis which, as stated, has to be seen as part of the crisis.

What are the key trends that we see for the last decade or so?

• Greater poverty and entrenchment of marginalization. Poverty is growing in Europe and is proving very hard to combat. In an EU context, nearly 1 in every 6 people is below the income poverty line and between 2000 and 2008 there was only an 8% reduction in the volume of poverty achieved (Atkinson and Marlier 2010). These were the ‘good years’ in the EU, not just in terms of economic performance for most of the decade but also in the commitment under the Lisbon Strategy to address poverty and social exclusion.
• Greater inequality. To take the EU again, it is a site of significant inequality. The S80/S20 income ratio for the EU as a whole is 5 (which means that those in the top 20% of income earners or holders have an income that is five times on average the income of those in the poorest fifth of the population). It is notable also that income inequality varies widely in the EU - from 3.4 (in Slovenia, Slovakia, and Czech Republic plus also Austria and Scandinavian countries) to 7.3 (in Latvia, Bulgaria, Romania). Both poverty and inequality are closely related... the inequality ratio explains 85% of the variance in the poverty rate (ibid). What these (and other) statistics make clear is that a bigger gap is opening up between the privileged and the disprivileged sectors of society. One can now see in our societies a definite set of winners and losers – something which is foreign to the European mindset. The growth of inequality and the superrich in Europe and the US has been likened to a social form of global warming
• Thirdly, there is a crisis around employment. Here, I suggest that the use of the word ‘crisis’ is apposite for good and decent jobs are becoming one of our scarcest resources. Recent research (Alpert et al 2011). This crisis is of such a scale and extent that it puts in jeopardy the jobs and distribution model on which our developed western societies rest (and increasingly also this same model is coming to define other societies). It has a number of elements (and consequences). First, at a structural and global level, the steady entry into the world economy of successive waves of new export-oriented economies, beginning with Japan and the Asian tigers in the 1980s and peaking with China in the early 2000s, has seen more than two billion newly employable workers enter the global jobs market (ibid: 3). This led to a structural change, shifting the balance of global supply and demand and leaving the world economy excess supplies of labor, capital, and productive capacity relative to global demand. In addition, we see the growth of a large sector of the population who live insecure and precarious lives (Standing 2011). These are not people who are not connected to the labour market – a popular portrayal of them. Rather, they are people who cannot get a firm foothold either in the labour market or in the democratic institutions of society more broadly. They are not necessarily migrants but are also and in the majority the native-born poor and near poor.

• Fourthly there is a disaffection with politics and a slide in democratic participation and trust. The data on levels of public trust in politicians makes for pessimistic reading. Even in the ‘best’ countries – Denmark, Switzerland and the Netherlands - trust levels of citizens in politicians are running at a mean of about five, where a score of 10 would indicate high trust (Stoker 2011). In other countries such as Poland and Portugal trust levels have hovered around a mean score of below three or at times below two.

These are all quite profound challenges not just for individuals, families and communities but in terms of the structure of society and our models and philosophies of what is right and wrong, good and bad.

However, it is worth reminding ourselves that in European countries most of these risks have been encountered before and actually that we built institutions and ways of organising our societies to combat them. The whole idea of the welfare state, for example, which institutionalised social rights (such as rights to housing, health, education as well as income) was a response to insecurity and risk as was the putting in place of a host of institutions and procedures whereby people could organise themselves to have their voices heard (whether through trade unions, pressure groups or community councils, to name just a few) – all the components that make up the ‘social’ in the European social model.

Looking through a social cohesion and democracy perspective, there are in my view three real threats from the crisis and all relate fundamentally to the way we are responding to it.

The first is that we are giving too little attention to what is happening in people’s lives. One crucial difference between now and the past is in political rhetoric. It used to be the case that leaders spoke in the language of people, families and shared social concern. Now they deploy a cold and technical language of budgetary accounting (endlessly concerned with budgets and deficits, stress tests, sovereign debt, default, and so forth) (Marmor and Mashaw 2011). We know from sociological and other studies that the language used signifies ideology. Noting that the language has changed, therefore, means recognising that there has been a change in ideology. It is not people first now but institutions and vested interests; fiscal responsibility and reform prevail over the circumstances of people’s real lives. This is not the language that built the European social model - this was founded on a concern with the circumstances of average citizens and the need to build common institutions to which all people could subscribe and which treated people fairly. Talking about real people and the real economy in which they live is the language of social cohesion and of democracy. I suggest that it is a powerful language. As Marmor and Mashaw (2011) point out, the change in language threatens to deprive us of the intellectual resources needed to address today’s problems. It leads me to suggest that if we focused more on people this in itself would serve to direct policy makers’ attention to jobs, mortgages, children’s health and education and the quality of the services that are essential to the welfare and well-being of individuals and families.

This brings me to the second threat that I see in crisis and this inheres in the policy approach that is being used to respond to developments.

Hemerijck (2011: 27) usefully reminds us that the last three years have seen two phases of crisis management in Europe (and elsewhere). Initially in 2008 it appeared that an investment oriented response was in the making, with governments investing heavily not just in the banking sector but also in social policy measures to help withstand the crisis. In little more than a year though, EU policy makers seemed to have completely changed course, adopting a crisis diagnosis of state failure. The problem did not reside then in behavioral excesses in financial markets but in labour market institutions and excess welfare spending. Another lesson that was swiftly brushed aside was the inadequacy of the macroeconomic regime of EMU and the Stability and Growth Pact with their tunnel vision focus on inflation and public deficit and debt levels (ibid).

We are responding to the crisis with an even greater faith in the growth model. This approach makes any kind of social reform dependent on the achievement of growth. It assumes that there is no limit to growth and that if we do not achieve growth it is because we are doing something wrong. As an analysis of the crisis then, it was not greed or opportunism or even short-term profit taking that led to the crisis but inefficiences in the system – the system was not functioning as optimally as it should. Alpert et al (2011: 2) espy a pronounced tendency on the part of most policymakers worldwide to view the current situation as, substantially, no more than an extreme business cyclical decline. Pursuing an analysis which sees nothing fundamentally wrong with the existing economic system allows policy makers (nationally and internationally) to proffer better regulation as the antidote to the problem. An inherent element of the growth model is a disaffection for the welfare state which is seen to be ‘anti-growth’, creating all kinds of disincentives, traps and costs and ultimately rendering people passive and non-productive (the mortal sins today).

We have to recognise that there are limits to growth and that our relentless search after growth is having consequences that are difficult to correct, within our societies but also in other societies and other parts of the world. There are alternative models - the position of the European Anti-Poverty Network, for example, (among others) is pro development rather than pro- growth – by this they place emphasis on social investment – the idea of investing in and for the future, in education and services for children for example, as well as social services more generally to help recovery and build more sustainable societies (EAPN 2011). This is probably the most popular revisioning today of the social democratic position and it merits hearing as a strong counter argument to the endless growth model favoured by neoliberalism. Of course there is also the original social democratic view which emphasises social citizenship and social rights as good in their own right (rather than as assets or investments that yield an economic or productive return) (Daly 2011). While the social investment approach attempts to counter the view that comprehensive social policy provisions only engender negative economic effects, it may be that it cedes too much on a concern with the quality and circumstances of people’s lives and the comparabilities in the situation of different sectors of the population. We have to ask ourselves again about the conditions for not just macro-economic stability but social stability. The model put in place in Europe historically was a broad-based one, inspired by other principles apart from growth and profit (principles such as social justice and solidarity), aiming to give a strong social rights basis to citizenship and in this and other ways contributing actively to strengthening democracy.

This brings me to the third threat – associated with democracy.

Inequality transgresses democracy, in numerous ways, not just for those affected but for the system in general. The democratic system depends on balance – it promises not individual empowerment but collective decision making – you can have your say but your view will prevail only if you are in the majority (Stoker 2011). The constitution of the majority is today in doubt.

An inability of those who are poor and marginalised (whether for economic reasons or because of lack of political know-how and skill or indeed even will to participate) has numerous negative consequences. It means that the voice of those who do not participate is silenced and it means that politicians can get elected by putting forward policies that appeal to ever smaller sectors of the population. Non-participation by some, therefore, spells a surfeit of participation and influence on the part of others – some sectors of the population and interest groups end up being much better represented and in a disproportionate manner compared to their size. The social class and other changes wrought by this phase of capitalism and how we are responding to it makes the welfare state vulnerable in another way as well. The changes in the jobs market in particular leading as they do to a decline of the working class mean that the class for whom the welfare state was designed – the industrial workers – no longer exist to benefit from it or to defend it. Politics it seems has moved on. This is in turn associated with a ‘shifting’ in governance practices. Guy Standing in his paper for Workshop 1B refers to the thinning of democracy – whereby spheres of democratic governance become fewer. For example, more decisions get transferred from political control to control by experts or sectional interests and the spheres were the average citizen can exert influence shrink. It is questionable now whether we can apply the label democracy any longer to many of the key areas of our lives (such as employment or the local community or municipality).

My underlying point here is that we have to continuously evaluate the quality of our democracy – to stress test it if you will. The classic ways of doing this focus on the degree of democracy (in terms of indicators such as free and fair elections, the openness and inclusivity of the political institutions, the separation of powers, etc). These are important but they only go so far in countries where democracy is well developed as is the case for much of Europe (Ringen 2007).

I suggest that a stress-testing of the democratic system in Europe identifies three main problems:

1. Power is centralized and too narrowly exercised in the current system
2. Politics frequently fails to deliver – many of the promises turn out to be empty as politicians and power holders change their minds or turn their backs on democratic accountability;
3. The fact that many people lack the proficiency to understand or engage with the democratic system or live without a civic environment to support political engagement.

One of the main responses to the problems with democracy has been to the third problem - to enable people become empowered (by giving them rights, skills, information and so forth). The Council of Europe has shown real leadership here I think. It has also shown leadership on many other fronts, in recognising the need for and promoting the intermediate social and civic institutions, in finding new spaces for democracy such as in interfaith and intercultural dialogue, in its anti-corruption efforts and its attempts to effect a common set of standards and charters that give real meaning to democracy. All are ongoing and they are very important and should be supported.

To conclude then, I suggest we cannot see democracy as some kind of separate structure but must view it as part of a chain of processes and structures. The best metaphor I can leave you with is of a lattice work – whereby every part is connected and serves to keep the structure or trellis upright. Democracy, then, is not something that we can be satisfied continues to exist without support. It does not work by itself and cannot be ‘parked’ in an isolated set of institutions that are activated every two or four or six years. Rather, democracy is underpinned and brought to life by a whole series of supports, many of which are social and economic in nature. It is in its design but also in its realisation embedded in society. We have built our societies recognising that the functioning of democracy depends crucially on the scope of action by the state and civil society. These two sets of institutions are important for many reasons but especially in a democratic context for giving all citizens a stake in political decisions (thus increasing the salience of politics for everyone) (Stoker 2011).

Finally then, while we have to deal with the situation we find ourselves in, this should be done with great care. And it should not lead to the exclusion of significant sectors or the population or put at risk the democratic and social principles that provide the bedrock of our societies. In the context of ‘crisis’, Europe’s social model for democracy and welfare needs to (re)assume centre stage.

References
Alpert, D., Hockett, R. and Roubini, N. (2011) The Way Forward Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness, New York: New America Foundation.

Atkinson, A.B., Marlier, E., Montaigne, F. and Reinstadler, A. (2010) ‘Income poverty and income inequality’, in Atkinson, A.B. and Marlier, E. (eds) Income and Living Conditions in Europe, Luxembourg: Publications Office of the European Union, pp. 101-132.

Daly, M. (2011) Welfare, Cambridge: Polity.

EAPN (2011) Re-engaging Hope and Expectations getting out of the Crisis Together, Brussels: EAPN Working Paper.

Hemerijck, A. (2011) ‘Social investment is in jeopardy’ in Social Progress in the 21^st Century, Policy Network, Wiardi Beckman Stichting & Foundation for Progressive European Studies (FEPS), pp. 24-9.

Marmor, T.R. and Mashaw, J. L. ‘How do you say ‘Economic Security’?’ New York Times, September 24.

Ringen, S. (2007) What Democracy is For – On Freedom and Moral Government, Princeton, NJ: Princeton University Press.

Standing, G. (2011) The Precariat, London: Bloomsbury.

Stoker, G. (2011) ‘Anti politics, social progress and re-energising cirtizenship’ in Social Progress in the 21^st Century, Policy Network, Wiardi Beckman Stichting & Foundation for Progressive European Studies (FEPS), pp. 10-14.

Tsoukalis, L. (2011) ‘The JCMS Annual Lecture – The shattering of illusions - and what next?’, Journal of Common Market Studies, 49 Annual Review: 19-44.