Speaking of the formerly social democratic compact… January 15, 2014
Posted by WorldbyStorm in Economy, European Politics, The Left.trackback
…here’s another frontal assault on it. George Osborne in a speech to be delivered today, as reported in the Guardian:
Osborne will say the EU suffers from a chronic lack of competitiveness and that the European economy has stalled over the last six years while the Indian economy has grown by a third and the Chinese economy by 50%.
And:
He will say: “Make no mistake, our continent is falling behind. Look at innovation, where Europe’s share of world patent applications nearly halved in the last decade. Look at unemployment, where a quarter of young people looking for work can’t find it.
Which leads to this:
Look at welfare.
“As Angela Merkel has pointed out, Europe accounts for just over 7% of the world’s population, 25% of its economy, and 50% of global social welfare spending. We can’t go on like this.”
It’s in the context of the European Union but that in a sense is almost irrelevant because it is the nature of the target, and the specificity of same, which is so apparent.
The Cedar Lounge Revolution 
This is China and India where a mojor achievement of governments has been to raise people out of poverty by increasing the proportion of their citizenry who earn $2 per day. This is the global comparison point in the race to the bottom. Perhaps it is the parasitical 1% which the developed economies can no longer afford.
LikeLike
Europe has “50% of global social welfare spending” and this is characterised as a bad thing?! In some ways they are lucky in Britain. While it would be nice if Labour were a bit more committed to defending the safety net of the welfare state, the zeal with which the Tories are pursuing their desire to use the economic crisis to destroy the safety net means that the people of Britain are definitely going to have a choice come the next election (Simon Wren-Lewis puts it better in a blog post from a few months back – http://mainlymacro.blogspot.ie/2013/10/politicians-are-not-all-same.html)
LikeLike
Britain has less than 1% of the world’s population, but 100% of its Tories. Clearly, this is an unsustainable burden; we simply can’t go on like this. Let the cutbacks begin.
LikeLike
Osborne, unsurprisingly, ignores the fact that Europe is also far wealthier than other global regions, and therefore more able to fund a large welfare bill. See Pg.10 of the following PDF for global wealth distribution by adult: http://www.oecd.org/site/worldforumindia/Davies.pdf
LikeLike
Good to see George posing the question of whether Indian levels of poverty aren’t a price worth paying for Indian levels of innovation. Personally I think a Dublin where hordes of people lived in shanty towns without sewage beside the railway lines might be worth it if there were some nice gleaming skyscrapers full of high tech entrepreneurs overlooking them. But of course the PC Left will make it impossible to have an honest debate about this.
LikeLike
the Indian government promote poverty, for two reasons 1, it keeps wages low, 2, it enables them to get preferential trade agreements. There was a very interesting Fior Sceal program on this some years ago. Over half the world’s billionaires live in the so-called”Third World”. The gap between the poor and the rich in India is enormous , the SuperRich live in Palaces, real palaces and they flaunt their wealth in a most vulgar fashion wearing diamonds worth millions at banquets. They are supported to get preferential trade agreements by environmental organizations like World Wildlife Fund and Greenpeace who make Strategic Alliances with India.
LikeLike
Everything is going exactly to plan it seems
http://blogs.ft.com/the-world/2014/01/worrying-predictions-for-eurozone-living-standards/
LikeLike
This is really an economic as well as a social issue and should be seen as a legitimate and important factor in trade negotiations. The huge disparity in social spending is a good basis for countries in Europe to put up protectionist barriers to unfair competition unless it is addressed by the undercutting countries. Quite a few American Congressional Democratic politicions to the left of Bill Clinton in the 1990s objected unsuccessfully on this basis to the NAFTA free trade agreement because it exports jobs to Mexico. The undercutting countries would have to take such a demand seriously as they would lose a huge income without unrestricted access to the richest consumers in the world. This is something I believe the left could be agitating for without falling into the trap that radical left does of coming across as airy fairy, not anti free trade but an anti compeditive as well as anti social practice.
LikeLike
Please restore my notifications on email
LikeLike
Paddy, a chara,
I don’t think it’s a setting our side. I think it must be on your computer.
wbs.
LikeLike