Across the developed world during the past two decades, stagnant median incomes and growing economic insecurity have led large numbers of people to lose faith in the promise that their children’s lives will be better and more prosperous than theirs. Some countries, however, have resisted these trends better than others.
Denmark and the other Scandinavian countries are cases in point. They are among the wealthiest and fairest societies in the world. Norway, Denmark and Sweden are all in the top 10 richest countries in the OECD, the Paris-based club of rich nations, and are some of the most equal too.
This is the result of political choices that have shaped the Scandinavian social contract. The business community operates within a strong framework of free trade, extensive public investment in research and a highly educated workforce. In return, society demands proper conditions for workers, security for all and high levels of public spending on welfare. This is the recipe for social democratic success shared by the Scandinavian countries: an effective market economy combined with a strong welfare state.
Yet more recently, Denmark and its neighbours have not been immune to the fraying of the social contract and the breakdown of civic trust that contributed to the Brexit vote in the UK and Donald Trump’s election as US president. And, as in other European countries, parties at both extremes of the political spectrum are offering the lure of quick fixes and easy solutions that can seem very tempting at a time of uncertainty and insecurity.
Across Europe, new populist parties are posing, with varying degrees of success, as the authentic voice of ordinary workers — at the expense of social democrats. The poor result achieved by Matteo Renzi’s Democratic party in the recent Italian elections is just the latest reverse to have been suffered by the centre left in Europe.
Social democratic parties have been blamed for the fallout from the financial crisis a decade ago. But the problem is not social democracy as such, but rather the perception that the centre left has forgotten its fundamental values. People feel abandoned by the traditional parties of labour, believing them to have failed in a period of prolonged economic crisis and increased pressures on workers’ rights.
The Social Democratic party in Denmark, like its counterparts elsewhere on the continent, has suffered a loss of popular trust, which we are now working to restore. To do this we must build on the founding ideals of social democracy, strengthen the social contract and save capitalism from its worst and most self-destructive traits.
Despite rising Euroscepticism, and notwithstanding the well-documented shortcomings of its institutions, the EU remains one of the main vehicles for reinforcing the social contract and regulating capitalism. The objective, enshrined in the EU’s Lisbon treaty, of establishing a social market economy must be realised.
To this end, the EU should bring to a halt the debilitating competition of member states with one another on taxation. A common floor for corporation tax would be an important weapon in this battle.
Second, we must more vigorously pursue Europe-wide legislation to rein in companies that sequester their ¬profits, and individuals their fortunes, in tax havens or who exploit legislative loopholes as part of aggressive tax planning. Such activities fuel the engine of inequality and contribute to the erosion of trust in our institutions and economies.
The same goes for unproductive and short-term speculation, which, as well as causing market instability, tends to channel capital and investment in directions that rarely create new jobs or businesses.
Finally, social democratic parties across the EU must work together to protect the rights and wages of ordinary workers. Nobody wins — neither businesses nor employees — from worsening working conditions.
Unfortunately, we are probably yet to see the worst of the political and economic upheavals. But if they are to have an electoral future, centre-left parties must take people’s concerns seriously. The rise of populism is rooted in a genuine sense of insecurity. And voters cannot be blamed for reacting when the fruits of globalisation are distributed unjustly.
The answer is to strengthen the social contract and restore the balance between markets and people. It is the historic mission of social democracy to save capitalism from itself.
Indlægget er bragt i Financial Times den 12. marts 2018