The development of the European social models
Sun 9th Dec 2012
The 19th century in Europe saw the development of philosophical, political and economical theories that challenged and questioned the political structure of the time.
The ‘state' at this time was in general a private family affair. Certain families had a monopolised private ownership of decision rights, territorial rights, levy rights etc, and related families had private monopolies on land ownership.
The state was nothing more than private land and power monopolies. The functions of the government and the state was to hold the land, levy trade, have some form of defense and policing and judicial functions, and keep the crown and the church going.
Almost all financing of these functions were drawn from levies on trade, customs and excise. Fees and levies were the instruments used in running the state, and every now and then the privileged landlords, the families that owned and taxed rent on all the land, contributed to the crown/state financing by means of ‘bonds’ and ‘obligations’, in which they paid a contribution in situations of extra financial needs for the crown/state, such as times of war, constructions, colonisations etc.
The ideas that sprung to life in Europe at this time challenged not only the financing of the state, as with Ricardo, Adam Smith and the French physiocrats and others, but the nature of the state.
It was suggested that finance should move away from trade barriers like trade tax, levies, customs and fees to taxes such as a tax on land, progressive income taxes and taxes on capital. They challenged the whole system of governance.
Instead of land monopolies they suggested a development of common property, instead of privileges they suggested equality in the law, instead of governance by inherited birth rights they suggested an elected governance. Commoners were to be able to be elected, accountable and even sackable, and checks and balances were suggested to keep time limits on the period of governance, the influence they should be able to wield and the compensation they could receive for governing.
So the ancient ideas of democracy were dusted off, re-engineered, developed, time set and proposed throughout Europe, and from the 1770’s to 1945, the development of the democratic state rolled out through Europe and replaced absolute monarchies with republics and constitutional democracies in Europe. Governance developed to include infrastructure, health care, nursing, education, and even the so called utopian employment regulations that Robert Owen had suggested 1813, including such fantasies such as the right and power of decision, a cap on working hours, were being implemented at the beginning of the 20thcentury, about a hundred years after his proposals.
After 1848, Europe saw an increase in the challenge of the private monopolies, and the birth of nation states like Germany and Italy, that ended hundreds of family land, legal, financing and power monopolies, and replaced them with republics that in time would give commoners the right not only to vote, but to stand for election to govern these states.
States came to include things such as the development of a common infrastructure with roads, railroads, electricity, fresh water, sewage, and also an enlarged and developed common property in the form of housing, buildings, land, ports, airports, alongside common hospitals, schools, care for children, disabled, elderly and many more.
During the mid 1900’s more or less all countries in Europe had implemented these reforms in various forms, with some exceptions.
In the west of Europe the finance systems had changed to be based on taxes. Progressive income taxes, inheritance taxes, property taxes and tax on capital took more and more of the burden away from trade fees such as customs, excise, levies, just as people like Adam Smith, Henry George, Karl Marx, John Stuart Mill and many more had suggested for almost two centuries.
The state was replaced with elected governors, with limited balanced democraticresponsibilities to implement the wish of the majority by general elections in which almost all adults had a say in direct voting.
More or less all the radical ideas proposed by philosophers had been implemented. The common citizens in Europe were being given not only property rights, rights to vote, rights to stand for election, but also rights before the law, and through the developed tax systems, Europe had implemented a various range of free health care, pensions, free education, free dental care, child care, subsidized winter fuel, communication, alongside employment agencies, unemployment grants, disability and sick means. In essence, much more, that the philosophers from the 19thcentury might have dreamed about and proclaimed as feasible and realistic.
Along the way, the holders of the private land, power and law monopolies fought tooth and claw against the implementation of these dreams, and yet we got there, over the bodies of milions of brave men and women who were prepared to die for our rights.
And the conservatives argued against it all the way, explaining how impossible it all was, how the majority of the people would try to cheat the system, how the funds would never be sufficient. Even today we hear exactly the same arguments being tossed into the debate and used in order to dismantle the European social model and tear down the foundations: free education, the pension system and health care in order to reinstate the old private monopolies.
In Portugal, fresh water and sewage is no longer a common affair. In Greece the land itself, the rail roads, the ports and airports are no longer a public matter. In Spain, daycare, child care, education and health is now closed and shut and thrown away and is no more a responsibility for an elected state. In countries like Greece and Italy we no longer even have publicly elected administrations running the country.
We got so far from the 1770s to the late 20thcentury, when the last countries in Europe implemented democracy, accountability of governance, and a common and public infrastructure, education and health care systems, social insurances and pensions and in a few measly decades the Conservatives have, using the same arguments they used during the 1700’s, during the 1848 revolutions, during the 1870’s against the German and Italian liberal states, during the beginning of the 1900’s in UK during the liberal reforms, managed to roll back these reforms.
In countries that left the mainly agrarian economy back in the 19thcentury the reforms were beginning to be implemented around the turn of the century or the early 1900’s. This was the case in the UK, Germany, France and Italy, and beside the reforms in health and education, also included things such as pensions and labour regulation capping working hours and the establishment of social insurance and unemployment benefits and sick pay.
In countries with a generous unemployment benefit system, unemployment is lower than in the countries that have cut benefits. This is no rocket science, the more resources people have, even in times of unemployment, the better they cope with their situation and the more they are able to continue a healthy consumption. If we want to battle bad health we need to invest in health care, if we want to battle unemployment we need to develop the benefit system and also increase investment in education.
We are quickly heading in a disastrous direction. We need to stop and return to the structural development of a European social model.
If we look at history we can see that the introduction of social reforms came as a development and consequence of the general development of society. In some countries the shift from a mainly agrarian economy to a mainly industrial economy came as early as the 19thcentury, but most European economies became industrialised only in the second half of the last century, well after the end of the WWII, and in some places as late as in the 1980’s such as the southern countries.
To force away all the development and try to re-establish conditions that were predominant prior to industrialisation is ridiculous. In several countries we have even gone past the industrial phase, and even if Marx overlooked the impact of the development of the service economy, he was right in most of his predictions. In the last decades industrial efficiency has increased productivity by up to 4 times and at the same time cut working hours. This in reality means that the industry sector in many countries is no longer seen as the main sector. Service is where we should focus but what service should we look at?
We now find ourselves immersed in a fully developed system, that works more smoothly than anyone can fathom. Research that looks to show abuse in the welfare system indicates that from country to country in Europe, the higher the benefits, the LOWER the unemployment rate.
The conservatives try to convince the general public about the inherent and widespread cheating in the welfare system. Yet each and every study they request ends up with the same conclusions- only an estimated 0.5% of the claims for social insurance allowance might be questionable (NB, not disputed, not indicating fraud, but questionable) and among these the majority are due to mistakes by welfare system. The same results are published every year in European countries. Yet one peculiar thing occur in the mainstream media each time such a study is ordered, the media bombastically announces new measures to combat benefit fraud yet they keep silent when the results are published.
European social models work, it is statistically proven. We need to invest more in the system, not cut back and return to the society we strived so hard to leave behind some 150 years ago.
Today both India and mainland China are implementing social welfare systems. They are creating inclusive systems that are to be financed through taxes and will give free and common access to things like free education, subsidised transport, sanitation, fresh water, free heath care, pensions, unemployment and disability allowances, and a developed energy and infrastructure nationwide. They are trying to finance social models to cover some 2.5 billion people and trhey are doing it from scratch.
Most countries in Africa are also trying to create something similar from scratch. In at least a couple of decades it is hoped that more than half of the world's population will have access to all the things we have been taking for granted- all the labour laws, collective bargaining, the minimum wage and working hour caps, a public transport system and more.
We had it all. We invented it. Our social reformers and dreamers could never have imagined anything lide it some 150 years ago. We now need to start debating how we are to develop these systems further, not destroy and abolish them. We know they work and we know that our societies can only develop if we develop them to be more inclusive.
We need a discussion between progressive political parties in all European countries, we need to work with existing public statistics and include the media, academics, political parties and have a discussion that bridges countries and crosses borders.
So what should we do? Well to start, we must ask ourselves for whom are our societies created, shaped and developed? For the citizens. And for whom should the societies work? For the same citizens, of course.And who should administer the society? The citizens, if we want to have democracy. We the citizens of Europe have politicians that are set to administer and govern our wills, they are not placed to rule over us. Those kinds of feudal societies were overturned well before we started to implement our social models. We should hold the politicians accountable for what they are elected to do, implement the will of the majority whilst caring for minority groups.
That is what the European social model is about – democracy – the governing of societies by the common people.