FEPS Fresh Thinking

A lot has been written in recent years since the crisis started about values and the European Social Model. Although funnily enough, most of these are the same values as they were over a century ago in the progressive movement and are still very relevant today. The European Union states six core values in its Charter of fundamental rights: Dignity, Freedom, Equality, Solidarity, Citizens’ rights and Justice. To be noted here, that is the fundamental rights and not the fundamental values of the EU. Nevertheless these are all widely accepted as the being the basis for European society.

However, there is a clear difference between values, rights and principles. When progressives define their values, they speak on the three core values of equality, solidarity and freedom.

Thus, we have to distinguish this from principles and rights. For instance, equality is a value but equality of opportunities is a principle. Values are generally sets of beliefs about good and bad, right and wrong, and about many other aspects of living and interacting in the society with others. Principles can be described as rules or laws that are universal in nature.

Whilst policy talks on values take place in times of crisis, often the meaning of values and principles is misused. When conservatives are talking about Social Europe they talk about a Social Union. This is different from the progressive approach. Social Europe is at the root of the European approach of the labour movements. Social Europe stands for the understanding of European integration as a way to ensure that there is sustainable growth for all citizens in order to ensure better living and working conditions. Social Europe stands for all the three core values of the progressives. Social Union stands only for harmonisation of social standards and welfare programmes. There is a huge difference!

Very easily we can elucidate that Europe needs a paradigm shift in economic policy and governance. When we discuss alternatives to the current austerity policies we have to get a better understanding of the roots of the crisis and the threat of neo-liberalism towards core values of equality and solidarity. The crisis policy of the European Union and the conservative governments is a policy of emergency measures in order to re-establish the system. This has led us to a situation of the so-called “TINA-approach”. But TINA will not give us the expected results. Europe needs to embark on a new trajectory where job creation, equity and growth are at the centre across all areas in Europe to ensure the core value of European integration, which is solidarity.

Also fiscal policy has to ensure sustainable levels of aggregate demand and therefore serve our values. The two famous post-Keynesian economists Philip Arestis and Malcolm Sawyer have long argued that a budget deficit will continue as long as investment is not strongly recovering and as long as households are not able to spend without incurring high levels of debt.

When the disastrous debate on the European budget took place last year it came out very clearly that a cut in the budget cannot assure increase in investment and promote job creation growth policies. This is a threat on the core European values of equality and solidarity and I could continue evoking such examples for a lot longer.

The need however is to be clear about what the values are and their meaning. In this respect it is even more obvious that currently Europe is turning its back on its citizens. It is simply not responding to the core values set out within society and established at the creation of the European Union. As a consequence the citizens distrust its policies.

This is the trap we are in at the moment. Europe needs to re-engage in its core values in order to regain citizen’s trust and move forwards!

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  1. Ernst

    Your blog is very insightful in showing how the Right has displaced human and social values.

    Some of your readers might care to download a paper on The Centrality of Human Value by my colleague Teresa Carla Oliveira and myself from the June issue last year of the Journal of Economic Methodology, which shows that this never was supported even by Adam Smith. http://dx.doi.org/10.1080/1350178X.2012.683593

    The paper counters the claim of Milton Friedman in the NYT of September 1970 that
    “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits” with the less recognised claim by Adam Smith:

    “He is not a citizen who is not disposed to respect the laws and to obey the civil magistrate; and he certainly is not a good citizen who does not wish to promote, by every means in his power, the welfare of the whole society of his fellow-citizens”. (Adam Smith, The Theory of Moral Sentiments, 1759).

    It illustrates that David Hume and Adam Smith directly countered the Hobbesian hypothesis, echoed by Friedman, that human nature is based only on self-interest, and outlines implications for what Smith centrally valued as concern for the welfare of the whole of society.

    Stuart Holland

  2. Could not agree more. And would add that when values are replaced by rules and all interactions between partners are seen as moral hazard problems, then trust fails and the community fails with it.

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