Chances and Risks of “Protectionism” for the European Social Democracy

After years on the defensive, Europe’s Social Democracy is surprisingly feisty and rejuvenated in 2006. The public has developed an awareness that growing economic and social insecurities are primarily caused by neoliberal policies; and that the neoliberal agenda – performed by liberal, conservative and social democratic governments alike – has gloriously failed to deliver its promises. Stephen Haseler writes in ‘Social Europe’: “The signs and symbols of a growing resistance to ‘neo-liberalism’, and of a major reappraisal of its relevance, are all around us. (…) (There is) a growing sense that the dominance of neo-liberal ideas is now coming to an end.”

In the current political setting, the dominant theme in political discourse is insecurity. Political ideologies provide different explanations of what the sources of insecurity are, as well as how to provide protection against it. Insecurity may span from economic and job-related to social and even cultural fears. The concept of “protectionism” is primarily used in a limited economic sense, but can have a wider meaning. Social Democracy currently is in a strong position to shape the concept of “protectionism”.

“(Now) the centre-left has natural advantages, as citizens identify the state as the collective means of insurance against the perils of globalization and social turmoil.” writes former Blair-adviser Patrick Diamond. The emerging concept of a “Social Europe”, for example, is building on a reasonable economic regulation and secured social security, thus laying emphasis on stronger protection of the societies and its citizens.

In the following paragraphs I will examine some main elements of this “protectionist” concept , but will also point out its downside, focusing on immigration, trade and enlargement policies.

1. Economic Protectionism
In the past, neoliberals like President Barroso have frequently warned of “protectionism” to ward off policies aimed at softening the effect of the Union’s liberalization and privatization agenda. Although the latter has never been popular, Europe’s governments (and also socialist parties) have so far followed the Commission in this matter. But recently, protectionism has gained much appeal. For once, multiple governments are trying to prevent cross-boarder mergers in crucial industries: Enesa (against E.on) in Spain, Suez (against Enel) in Italy and BPH (against UniCredit) in Poland, to name the most prominent examples.

Meanwhile, this form of protectionism in itself is not a sufficient antithesis to neoliberalism, as the example of Suez shows. The merger with the publicly owned Gaz de France would mean reducing the share of public ownership significantly. Moreover, public ownership is an insufficient safeguard if the company is acting within a liberalized market. The aggressive business-strategy of EdF (Electricité de France) of recent years proves this point.

Protecting national companies from foreign take-overs is hugely popular. Regular news of multinational companies shutting down domestic production and firing thousands of employees make people fear that these companies threaten the stability of our society. Social Democracy is now in a strong position to provide a vision of a “protectionist” economic structure that 1) ensures stability, 2) provides a fair give-and-take between companies and society, 3) provides growth that benefits the people (and not only the corporate shareholders).

A concept like this addresses the whole spectrum of causes of economic insecurity, in contrast to the political postering performed by, most prominently, the conservative French government. “Economic patriotism”, as Nicolas Sarkozy calls it, is restricted to the question of the nationality of the firm’s owners.

In contrast, Social Democracy needs to emphasize that economic development can only be healthy if the needs of the community in which companies act are sufficiently considered, e.g. by public oversight and democratic regulation that is flexibly adjustable to the different needs of different regions or nations. In one of the most exciting developments of the past year, PES MEP’s have embraced this idea when they intervened in the legislative process of the Service Directive (Bolkestein Directive). This considerate form of protectionism takes the different needs of the European countries into account. It has been successful in mobilizing the public, NGOs and unions on a national an European level.

2. Risks of Protectionism: Immigration
As immigration is seen as a growing threat to economic stability and security, parties from both the right and the left have toughened immigration laws radically. This crackdown on immigrants is probably the most appalling and shameful of the European policies of recent years. Since 1993, more than 7000 people have reportedly died while attempting to enter the EU. Considering undocumented deaths, the number of fatalities may well be triple that of official statistics. Europe is haunted by the images of dead men, women and children on Spanish and Italian coasts and the murderous violence against immigrants in Ceuta and Melilla in 2005. NGOs report a frightening rise of violent acts against immigrants inside Europe, making the Union an ever more hostile and dangerous environment for immigrants. The continuing toughening of immigration rules and border policies grow more and more inhumane and lay the seeds for further exploitation of immigrants.

All advocates of sensible immigration policies acknowledge the need of the Union for regulating the immigration movement (e.g. HRW World Report 2006). But the planned common system for immigration and asylum focuses almost exclusively on ever tougher deterrence by violent means and deportation beyond judicial control.

It is illusionary to believe that the stream of immigrants trying to enter the EU can be halted by increasingly excessive means of violence. We must counter this dangerous claim vigorously. Policies relying on violent deterrence will only raise the death toll, but won’t stop immigration. We need to acknowledge the fears of people that immigration destabilizes security and the economy, but need to counter simplistic and polemic protectionist trends. We need to set straight cause and effect: It is police violence and disfranchisement of immigrants that create criminality and deteriorating job markets. Destabilization through immigration is not a sign that our rules are not tough enough, but rather that our immigration policies have failed.

In the United States, labor unions have taken up the cause of immigrants and fight for a sensible and omprehensive immigration reform. They understand that a humanely regulated immigration protects both immigrants and the domestic workforce alike from exploitative corporations and anti-labor laws. In Europe, Social Democracy still has to find the courage to stand up for immigrant rights.

3. Risks of Protectionism: Imperialist Trade Policy
Much emphasis has been laid on the argument that within a Europe of free markets, but of different social standards and rates of taxation, nations are down-competing each other in a race to the bottom. Countering this development is an important task of European Social Democracy and the labor movement in future years. The free market and common external trade policies have also made the Union into one of the most predatory economic forces in the world. The EU, not the US, was pursuing the most aggressive liberalization in the WTO’s Doha-round. Since the collapse of Doha earlier this year, the EU has been following the US example by establishing bilateral trade agreements with third countries ever more aggressively. It has been argued even by free trade advocates that those agreements between a huge trade block on the one side and a weak developing economy on the other is putting the latter in a tremendous disadvantage.

“That is why a neoprotectionist strategic approach will only work in a Europe-wide context.” writes Stephen Haseler (Social Europe, vol. 2, I. 1, 2006). But these protectionist economic policies, proposed by some socialist commentators, are putting the EU at risk of becoming an even stronger trade aggressor internationally than it already is. Growing dependence on gas and oil imports are adding to Europe’s explosive economic role. Without developing solutions to the negative impact of a both protectionist and imperialist trade policies we are not only exporting poverty, environmental problems and instability to other countries, but we are also aggravating our own problems, eg. concerning immigration.

4. Risks of Protectionism: Enlargement
A mayor victim of growing protectionism might well be the Union’s enlargement process. Since the enlargement of 2004, voices against further enlargement have dominated in politics and in the public discussion. Many on the Left argue that further enlargement will make reforms of the current status quo – seen as serving mainly business interests – even more difficult. Before further enlargement, they argue, we first need to advocate integration in social and institutional matters.

But both conservatives and Social Democrats follow yet another, mostly unsaid, argument: that neither the remaining Balkan and ex-Soviet countries nor Turkey are seen as desirable future Union members. The most common arguments are that the accession of even poorer countries will put huge pressure on the EU economies and labor markets, bring the Union even closer to the world’s crisis regions of the Middle East and the Caucasus and – in the case of Turkey – bring in a huge Muslim population. It seems that, given the current public mood, politicians have little to gain and much to lose from supporting further enlargement.

But populist rejection of enlargement jeopardizes the most precious achievement of the European Union: stabilizing, reforming and democratizing its current and future member countries, as it has successfully done throughout its history.

The case against further enlargement is fuelled by a variety of misconceptions. First, enlargement and institutional reform function cumulatively, not exclusively. Prior integration processes happened because enlargement made them necessary. Maintaining the status quo is the biggest threat to institutional and social reform. Without the necessity to reform, the Union’s institutions and governments will have no incentive to change the current power structure. The concept of a “Social Europe” will lose most from this stalemate. Second, it isn’t wrong to demand a long and thorough integration process for the accessory countries, as long as it is not impossible for them to finally get in. An accession of Turkey in 15 years will leave plenty of time for reforms, but keeps the incentives to actually do so intact.

Social democracy does not need to outcompete Conservatives in anti-integration polemics if we can explain that the biggest threats for our job markets are not the accessory countries but a Union that remains blocked in its current neoliberal setting.

Allah made me the way I am.

The campaign sujets of SoHo, the Social Democrat LGBT organization. The text says " "Allah made me the way I am." You belong to us! - equal rights for equal love". The campaign raises the issue of tolerance and inclusion of Muslim migrants in the LGBT community. Damn, I like it.

It's my party and I cry if I want to.

The Austrian Labor Union (ÖGB) is crumbling, the chances for a left government in autumn is shrinking. Union president Hundstorfer should step down - and take all his old boy friends with him.

These days, my party gives me lots of reasons to cry. And cry and cry. Some months ago, the union-owned bank BAWAG stumbled over the crash of the US investment speculator Refco. It was an incredible humiliation when the union - one of the few big bastions of the Social Democrats (SPÖ) - had to beg the conservative banks and the conservative government to step in and save not only the bank but also the union from ruin.

Corruption and Incompetence
I don't shed a tear for Verzetnisch, the back-then president of the union who had to step down after the scandal got public. The union leadership held on to an incompetent and corrupt bank management, and even profited themselves (Verzetnitsch had his downtown-penthouse right next to the manager's). The new president, Rudi Hundstorfer promised reform. Instead, he tried to cover up again and thought it would be enough to blame Verzetnitsch. Turns out that there are much more open debts, and that Hundstorfer himself knew of the finance scandal and even signed relevant papers.

The new crisis management? Denial. He wasn't present at that meeting, or thought he would sign something else.

Cover-up
The idiocy and corruption of the old and new leadership is outrageous. To try and cover up his knowledge of the scandal is the most stupid thing Hundstorfer could have possibly done. Who does he think he's dealing with? That this wouldn't come out? That the conservatives would leave him be?

6 years ago, going into opposition should have been the sign for both the party and the union to reorganize and regain their strength. Now this scandal is destroying our chance to win the elections this autumn.

Against the wall
Some months ago, I wouldn't believed that something as big and mighty as a union could ever shatter. Now I now it can. And it doesn't even need a Margaret Thatcher. The old and the current leadership are just doing fine.

Hundstorfer should step down today, and he should take his whole crew of old boys with him. If he has feeling of responsibility for the union, the party and our values, that is.

From zero to hybris in 10 seconds?

Is the liberal blogosphere really “changing the face of the Democratic party”? Or is it more of the same? How the “netroots” could do it better.

Political blogs have been around for quite some time now, and some of them have developed a considerable readership and influence, even if they still fall short of the established media (huffingtonpost.com or dailykos.com, the biggest liberal blogs, are still trailing the websites of traditional media like nytimes.com or cnn.com).

Big Ambitions
Some of the most prominent figures of the liberal Blogosphere have turned into political celebrities, publishing books, delivering soundbites for newspapers and even advising potential presidential hopefuls like Mark Warner. The first-ever gathering of the Dailykos-blogger community, YearlyKos in Las Vegas, welcomed a number of high-profile Democrats (Mark Warner, Harry Reid, Wes Clark, to name a few), a sign perceived both by the bloggers and the media as finally being taken seriously.

On the commercial for Dailykos-founder Markos Zuniga’s book “Crashing the Gates”, a crowd of people are ropepulling with a donkey, not being able to pull him anywhere. Zuniga walks by them and kicks the donkey in the butt. It is pretty descriptive for the self-declared goal of this section of the liberal blogosphere of making the Democratic party change direction ("Changing the face of the Democratic Party"). But it also shows the growing confidence of the liberal Internet community.

Everbody is a political strategist
These days, DailyKos.com looks more like a online forum for wannabe-politicians than a discussion platform. Every day, latest polls of various races throughout the country are published and donations for supported races are collected.

The level of self-reference is astounding. Almost every day another comment of a politician about the liberal blogosphere is published; and those races deemed important by the blog are described as if Dailykos itself would be on the ballot. One of today’s entries predicts DailyKos to be as relevant as the NYTimes in five years’ time.

The Smell of Sweat and Blood
Some of the races are dealt with in an especially agressive way. DailyKos’ current arch-enemy is Joe Lieberman, Gore’s runningmate in 2000, described as “Bush’s favorite republican” for his pro-war voting record in the Senate. His opponent in the Democratic primaries, Ned Lamont, a businessman virtually unknown only a few months ago, may score up to 40%, according to recent polls. He is strongly supported by DailyKos and other blogs.

In this very martial setting, Ned Lamont’s own politics is less relevant than the fact that he might unseat Joe Lieberman, the current anti-christ of the liberal blogosphere. And even though it’s (unquestionably) important to send a strong anti-war message to Democratic politicians, this point tends to be already overshadowed by the fact that DailyKos sees Conneticut’s Democratic primaries in August as a payback-day for everything they hate about the Democrats in Congress right now. But revenge is, I think, seldom a healthy political strategy.

Will the netroots grow up?
The uniting factor for this part of the blogging community is hate for the government and Anti-war sentiments, but other traditionally left points of concern (like minimum wage, health care, labor rights) receive little attention. The reason is that the self-declared “netroots” are not connected to social movements like labor unions, and both their proponents and their audience is – that’s what has been argued – white middle class, which is traditionally more concerned with the war-issue than with social issues.

But also, the style of Blogs – it’s speed, the little attention span for articles – doesn’t allow much more than a sometimes too simplistic scheme of good-vs.-bad-guys.

Some of the groups that were the new kids on the playground in the presidential election 2004, eg. MoveOn.org and Howard Dean’s Democrats for America (DFA, formerly Dean for America) have grown up: they learned from their initial shortcomings, established real (offline) chapters and poll their members on candidates and policies to support. Last week’s YearlyKos convention aimed in the same direction, even featuring not-so-sexy issues like energy independence.

The stars of the netroots like Zuniga or Jerome Armstrong from MyDD.com are right in many aspects of their political focus, and I appreciate the efforts to get their feet on the ground and work on establishing lasting structures, which many deem (rightly, I think) as the key to electoral success (and even more important for social change in the long term).

More influence for the influencial?
The netroots like to see themselves as rebels. In many ways, though, the liberal netroots have a lot in common with the big-boy league of politics. The fixation on the big electoral politics in contrast to group- and issue-building is one.

Another is the following: one of the big standard themes of the blogosphere is how the Democrats disregard the ordinary people and how they should listen much closer to what they (meaning: the netroots) want. But this is problematic. In many respects, the outspoken, educated, liberal, middle-class, white group is the one group most listened to by the Democratic party. For working families, unions, african-americans, latinos and latinas that’s different. In fact, the blogosphere’s white and middle class constituency is demanding more influence although they already are the most influencial group around.

The netroots already feel the seduction of power, but they haven't made their homework yet. This smells a bit like hybris to me. It would be good for the netroots to connect their important anti-war-issue and their organizing capabilities with the also very important social issues of the social movements (union, immigrant rights, etc). This could also be a healthy way of bringing the netroots back to a more reasonable and less over-the-top approach.

Parliament's strong voice against own governments in CIA scandal

The draft resolution of the Council of Europe (CoE) on the CIA scandal has been published last week and will be voted upon by the Parliamentary Assembly in two weeks time. The final report of special rapporteur Dick Marty from Switzerland is courageous and strong.

"Spider's Web of Detentions"
The CoE draft resolution opens a view into one of the darkest stories of EU collaboration with the US illegal policies. The US, the resolution states, supported a "spider's web of detentions" that has "entrapped hundreds of persons (...) in some cases when they were merely suspected of sympathising with a presumed terrorist organisation."

European collaboration proved
The resolution proves beyond doubt the collaboration or tolerance of various EU countries in the illegal activities of the CIA. Did Marty's first report only spoke cautiously of the lack of control mechanisms by the states, the new report lays bare the extent of collaboration of various EU countries.

The Start, not the End of real investigations
The CoE investigation suffers from lack of collaboration by national governments and high EU representatives, as the resolution states. The same is true for the parliamentary commission by the European Parliament (EP). It's head, Spanish MEP Carlos Coelho, has criticized today the head of the Spanish intelligence service CNI, Alberto Saiz, who has not yet appeared before the commission despite invitation. (El Pais, 6/12/06) The Commission also tries to block the investigations.

As the conservative Financial Times wrote: "They amount to a moral capitulation by liberal societies and a surrender of the rule of law in the face of jihadi totalitarianism. If we behave like this, what exactly are we defending?"

The Spanish supreme court (Audiencia Nacional) today allowed a case on CIA torture flights via Palma de Mallorca to be opened. (El Pais, 6/12/06) Various cases on CIA kidnapping are under judicial investigation, eg. in Italy and Germany.

Globalizing the fight
An American court heard today by the ACLU (American Civil Liberties Union) against the CIA to disclose "documents authorizing it to detain and interrogate terrorism suspects overseas." (NYTimes, 6/12/06) Through this case, the ACLU wants to prove that the CIA does in fact have a principal policy of extraditing suspects illegally to torturing third countries.

What values are we fighting for?
The collaboration with the CIA torture system risks to destroy our most important values. The fight to restore the faith in the righteousness of our system and our values has just started.

In this sense, the role of the conservative (EPP) members of parliament who tried to block a report by the EP is simply outrageous. (EUObserver, 6/12/06) What's their agenda? That we shouldn't care if a foreign country kidnaps our citizens? Lies to our authorities? Tortures people? Risks our security and endangers our values? It's a good sign that despite the resistance of the EPP, the Commission and various EU countries the EP will continue the investigation for at least 6 months.

Can you talk an economy down? (just look at Germany)

Now, now. Germany as the most exciting place to invest in Europe? Huh, I must have missed something here. "Germany comes out top because of its infrastructure, educated workforce, political stability and dedication to research and development." Those fascinating news are revealed by a recent study by Ernst & Young, a consulting company.

For years, Germany has been described as the "sick man of Europe", the Kassandras of doom being legion. The reforms proposed and adopted, though, did not focus on either infrastructure (budget cuts) nor an educated workforce (tuition fees) nor in political stability (cuts in healthcare and unemployment benefits below the poverty line), and I'm not even talking about dedication to research and development. It was about long years without increasing wages, major cuts in public investment and social security.

So now we know that a good infrastructure and an educated workforce is not so bad after all. And somehow this has even been understood by business leaders (The "study" is in fact a survey of 1,019 CEOs). Good.

I blame the conservative hysteria-machine of being partly responsible for what has been going on in the Westeuropean economies. The politics of reform have heavily depended on an "argument of crisis", creating a completely exaggerated feeling of crisis, that in turn could be mended with neoliberal "reforms".

This is, one might argue, politics. If a group can better convince the public of it's world view, then they deserve to push through their policies. But the sad truth is that the so-called reforms are brutally and outrageously failing. The German Hartz-reforms of the labor market are so costly and so ineffective that the German government will have no choice than to reform the reforms.

And as the huge cuts in social services and the outrageously wrong results of the last tide of reforms have created wide-spread insecurity that led to restraint in domestic demand and let to years of slow growth, the fact that they fucked up the political systems and the labor market so much that the chaos and insecurity will be bound to even grow.

The ongoing creation of fear by the neoliberal hysteria-machine has not only led to "reforms" that are ineffective at the least, it had also a negative impact on the economy that, in my opinion, cannot be overestimated. The fear-politics that dominated German economic policies in recent years has failed gloriously, except in one thing: they managed to talk the economy down. Even Ernst&Young's CEO-poll shows this. Now it's about time to bury the imbecile policies of neoliberalism.

Rising from rags to riches in Europe

First, a confession: every week, it's hard to resist the temptation of commenting "The Economist" on EU issues. But this week I do.

The chance of social upward-mobility is exceptionally bigger in Europe than in the US, the Economist reports.

"Aroud three-quarters of sons born into the poorest fith of the population in Nordic countries in the late 1950s had moved out of that category by the time they were in their early 40s. In contrast, only just over half of american men born at the bottom later moved up." - "The Nordic countries are distinctive in one further way: (...) Nordic countries have almost completely snapped the link between the earnings of parents and children at and near the bottom. That is not at all true of America."

"The obvious explanation for greater mobility in the Nordic countries os theiir tax and welfare systems. (...) The other part of the explanation seems to be their superior education system." (The Economist, 5/27/2006)

The Economist seems almost surprised of the fact that a deregulated economy like the US provides much lesser chances of upward-mobility.

Finally, it seems, the message is starting to get through. A fair welfare system does not hinder economic growth (as the Nordic countries prove in every statistics), but connected with a well-financed and progressive educational system it's simply unbeatable. Rising from rags to riches seems to be not the American but the European way of life.

It's about time to implement this lesson in Continental Europe and in Brussels.

Here are the links to the respective studies the Economist quotes:
"Non-linearities in Inter-generational Earnings Mobility"
"American Exceptionalism in a New Light"

How the Conservatives just dumped the Constitution. And what this means.

The EU foreign ministers have agreed on a roadmap for institutional reform, as Dutch foreign minister Bernard Bot told reporters (EU Observer 5/27/06).

The foreign ministers have obviously found a compromise only on the basic question of institutional adaptions needed for small-scale enlargement, but not more.

The Consequences
This strenghtens the assumption of my recent piece on this issue on the same issue: 1) no big enlargement step after Romania, Bulgaria and Croatia. This will especially mean a "no" for the Turkey accession by the Conservatives. 2) No further institutional or political integration. This means especially a "no" to policies related to a "Social Europe". 3) The minimum version will probably be stripped of most symbolic "constitutional" elements.

Why this shouldn't make the Left happy
As I have indicated earlier, this is not a bad trade-off for the Conservative governments. But the Liberals and the Left should become cautious: a "no" to the Turkey enlargement is a threat to EU foreign policy as we knew it, and this means a threat to the influence of stability, democracy and peace the enlarging Union had. If the Union starts to close itself off from the neighboring regions (following the US example) this could mean that the already 50-year old growth of peace may come to a hold.

Also, to pursuit a "social Europe", further integration in democratic, social, economic and judicial matters and changes in the budgetary and monetary policies is needed.

The end of the Constitution therefor is nothing that the Left needs to be particularly happy with.