October 24, 2005

THE ONE THAT'S EXPORTABLE:

Is free-market Britain fair enough for all?: In a three-part series, the Monitor looks at how Britain, France, and Finland are adapting their social benefits models to the information age. (Mark Rice-Oxley, 10/25/05, The Christian Science Monitor)

Some, like the Scandinavian countries with their supergenerous state welfare, may be happy to "keep left." But others, particularly Britain with its center-right traditions, are warning that Europe won't be able to afford such largess and still compete in the global marketplace.

What some Britons have in mind is the kind of painful reform already pioneered in Britain in the 1980s under Margaret Thatcher, which cemented the "Anglo-Saxon" model and its emphasis on free markets, private enterprise, and smaller government.

At the time, Thatcherism was heresy to Jeremy Rix, a rebellious teenager with a flair for languages and art. He was so outraged by state cutbacks and miserly welfare that he joined street demonstrations, grew his hair long, and argued about politics with his father.

But now, as a 35-year-old company director with a family, Mr. Rix is far more appreciative of how social reform rejuvenated Britain and bequeathed his generation a country that is more dynamic than most in Europe.

"[Mrs. Thatcher] completely reinvented the UK in my view. We're still living with the legacy of that - free market, flexibility, greater wealth," says Rix, who runs his own market research and intelligence consultancy, Metro Research. [...]

While some conservatives in Europe say a hearty helping of Thatcherism would revive the Continent's flagging economies, most are still suspicious of the Anglo-Saxon model. Its relatively low taxes and stingy welfare payments have proven generally good for jobs and business, but have done little for poverty and equality. One current of European thought, which favors greater regulation and social protection, scoffingly portrays the Anglo-Saxon model as good only for free-market buccaneers. Another, popular in Scandinavia, is generally appalled by the neglect of the underclass.

Aware of Britain's poor record on social justice, Tony Blair has sought since he was elected in 1997 to remold various aspects of the British system to make it more compassionate, though not less dynamic. In this "Anglo-social" model, steadily increasing taxes fund health-service spending; tax revenues are channeled to poor families and to every newborn child; back-to-work programs help the unemployed; and a minimum wage gives greater succor to unskilled workers.

The Anglo-social model is "a hybrid between the dynamism and flexibility of the US and ... the egalitarianism of Norway and Sweden," says Mike Dixon, a researcher at the Institute for Public Policy Research in London, which spearheaded debate on the model. Its implementation, says Mr. Dixon, has reduced poverty, particularly child poverty, and halted the rise of inequality. The London-based New Policy Institute notes on its poverty.org.uk website that the number of British families living in poverty has dropped to 12 million from 24 million during Blair's tenure, though the poverty rate was still lower in the early 1980s.

Blair believes the Anglo-social model is one that the rest of Europe can and must imitate. In a speech to the European parliament in June, he warned that Europe was trailing the US in productivity and falling behind India in producing science graduates. He called for his EU partners to spend less money on regulation and job protection and more on investing in ideas of the future: knowledge, skills, education, and science parks.

"This is modern social policy, not regulation and job protection that may save some jobs for a time at the expense of many jobs in the future," he said. "Of course we need a social Europe. But it must be a social Europe that works."


The problem with the Scandanavian model is that it requires a level of ethnic and religious homogeneity that can't realistically be duplicated elsewhere and that they won't be able to maintain as their fertility rates implode.

Posted by Orrin Judd at October 24, 2005 5:55 PM
Comments

The problem is that the 'social model' with its high taxes and rigid labor laws discourage hiring, while the generous welfare benefits discourage work. What's a good socialist country do to?

Posted by: Gideon at October 24, 2005 6:43 PM

Blame US.

Posted by: Sandy P at October 24, 2005 8:21 PM

Do you not process information? Are you in the business of propagating knowledge or myth? Some time ago I pointed out that Finland's immigration rate doubled in the last ten years, that they're not ethnically homogeneous at all, and they have no problem maintaining a "Scandinavian model."

Posted by: Rick Perlstein at October 24, 2005 9:57 PM

Finland ethnic makeup:

Finn 93.4%, Swede 5.7%, Russian 0.4%, Estonian 0.2%, Roma 0.2%, Sami 0.1%

Net migration rate:

0.89 migrant(s)/1,000 population (2005 est.)

http://snipurl.com/izdu

But please, Rick, carry on with your absolutely charming persona. Surely you must know that everyone loves a white, middle-class Nation writer lecturing other people about ethnic diversity.

Posted by: actually lived in europe at October 24, 2005 10:13 PM

Facts are brutal things.

Posted by: Timothy at October 24, 2005 11:12 PM

While some conservatives in Europe say a hearty helping of Thatcherism would revive the Continent's flagging economies, most are still suspicious of the Anglo-Saxon model. Its relatively low taxes and stingy welfare payments have proven generally good for jobs and business, but have done little for poverty and equality.

Because everyone knows that plentiful jobs are no cure for poverty.

Actually, that's halfway true.
There will ALWAYS be poverty, because in the first place "poverty" is relative - most "poverty-stricken" American households live middle class lifestyles, by global or even just European standards - and because some people just don't want to work.

As long as they can keep body and soul together, a certain percentage of people are content to just do enough to survive, and no more.
Others are addicts or mentally disturbed, and incapable of doing more than surviving.

Also, to beat Orrin's drum for a minute, the Continental objections to Anglo-Saxon "free-market buccaneers" are moot, since they WILL NOT BE ABLE to maintain generous walfare states, for demographic reasons.
That's not a guess, it's a projection as sure as the underlying factors: Death and taxes.

BTW: Another [current of European thought], popular in Scandinavia, is generally appalled by the neglect of the underclass [in the Anglo-Saxon model].

After decades of ministering to all of the needs of the "underclass", shouldn't the Scandinavians have managed to eliminate it by now ?
And, since they haven't, doesn't that suggest that it makes no practical difference whether societies actively work to pamper their "underclass", or simply make sure that they don't starve ?

Posted by: Michael Herdegen [TypeKey Profile Page] at October 25, 2005 12:57 AM

"After decades of ministering to all of the needs of the "underclass", shouldn't the Scandinavians have managed to eliminate it by now ?"

Michael,

I am sure you know the answer to your question but just incase someone thinks it is open to debate I suggest they actually live in a central city and watch the dynamic between the underclass and the welfare state. My revelation was that both groups are made up of people looking out for their own self interest with the later being completely deluded by the need to pay their mortgage, while the former (the underclass) dysfuntionally sits back looking forward to the next opportunity to get high and therefore unable or unwilling to make any changes.

Posted by: Perry at October 25, 2005 9:06 AM
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