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What Kind Of Left In Europe?

By Gaither Stewart

17 December, 2007

(Rome) Time and time again European countries face a fundamental choice of their socio-political systems: either an alternation between periods of Capitalism and periods of “Socialism” as has happened in many countries. OR, a permanent state of a mixture of the two systems in a kind of “social market economy” as in Scandinavia.

Socialism is a confusing term today because of the political variants that call themselves Socialist or Social Democrat—some of which are not even of the Left—and also because of the taint left by East European Communism that called itself Socialist, some leftwing political analysts prefer to speak directly of Capitalism and its relationship with the social state.

The Socialist victory in Spain, the Center-Left government in Italy, German Socialists, though losing ground, still sharing power in a coalition government and the Labour Party, despite its war policies, in power in Great Britain, indicate a continuing left orientation in part of Europe today despite over thirty years of capitalistic market economy.

Since the 1970s Europe has lived in a phase of open market economy that has favored free enterprise, especially financial enterprises, over the social state and trade unions. Globalization has broadened savage economic freedoms. The constant financial-economic scandals a la Enron such as Italy’s Parmalat International, the astronomical flow of money and stock options into the hands of top managers, and the dislocation of profit-earning industries to Asia or East Europe, have combined to alarm already underpaid and underemployed workers.

The result is the evolution of a public opinion opposed to an unfettered market economy and a Europe leaning toward a social state.

Neither alternative—alternation of Socialism and Capitalism or a mixed economy—is an easy political choice. The Left in power walks on tiptoes so as not to upset conservative and sensitive voters and has difficulty passing legislation on reforms of pension or tax systems. On the other hand the Right in power defeats itself through its own arrogance and disregard for the majority of the population.

Adversaries of the system of alternation in power between market economy and social state, as in Spain and Italy today, fear that the system only increases social tensions and conflicts.

Opponents of the mixed system are justifiably afraid that the redistribution of wealth will not favor the poorer classes but will benefit the upper middle classes, precisely what is happening.

Capitalism as a political-economic system is marked by the elimination of social and political controls that place limits on the “unfettered” freedoms of actors in the capitalist economic field. When economic forces are completely free they naturally exercise their power also over the government that in turn must bow to their wishes. Capitalist power is in fact the real power. This is the essence of capitalism. This is the United States today, where real power is in the hands of freewheeling, unfettered capitalists with Enron-style results

Economic development has historically depended on periods of Capitalism, as seen in the United States and in Great Britain. Asia led by China and India is in that phase of savage capitalism today. However, modernization requires that after the Capitalist phase there must be a phase of the redistribution of income, otherwise there is no consumer society. This alternation is the historic formula for enduring economic development. Both Capitalism and anti-Capitalism play a role.

Some economic planners believe that after these two phases have created a strong economy, a permanent mixed system permitting both capital accumulation and redistribution of income is preferable. Such a solution is not impossible as seen in Scandinavia and to a lesser degree in much of Europe. Germans have voted in favor of a kind of market economy which however maintains their great social state. This system has been defined as the “European social model.”

In practice, wide sections of public opinion are demanding that their leaders put a limit on the unfettered freedoms of markets and enterprises. The problem is who is to represent the demands of workers and much of public opinion. Trade unions are still important in some countries, but not all.

Trade unions, political parties and grass-roots movements are apparently not enough to obtain new social rules in a new world of inequalities of income and new unemployment caused by dislocation of industry.

That is however the task of elected governments. That is, the State. Each swing of public opinion to the left offers a new reserve of power to the Left and Center-Left governments in power. Yet, the tendency to limit the freedoms of the unfettered market economy and to charge political power with the defense of less privileged segments of the population comes and goes with the times.

This situation distinguishes Europe from the United States, which has opted for a permanent and enduring system favoring free enterprise to the detriment of salaried workers. Market freedoms in the United States have never been greater. In the USA capital accumulation continues with little or no redistribution of wealth. And therefore discrepancies between rich and poor have never been greater.

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