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INEQUALITY IN EUROPE IN THE EARLY 21ST CENTURY
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variety) is not in sight for the time being, neither
in export-strong Germany, which is currently
very satisfied with its economic fortunes, nor in
the rapidly growing Baltic States, which are still
nonetheless pretty underdeveloped. If we were,
however, to achieve this again one day (prefer-
ably of the sort that is ecologically sustainable
and geared to the quality of life rather than the
quantity of goods), this would be a welcome
development. It may lead to many people hav-
ing better material standards of living. However,
economic growth cannot be politically decreed.
And here is not the place to enter into the dis-
cussion of how to go about achieving it.
The more fundamental question is whether
a socially integrated society that offers prosper-
ity to all should continue to be held hostage by
economic growth. Whether or not it should be
something that is actually achieved under ex-
traordinarily favourable circumstances, but usu-
ally not. To make social integration dependent
on growth seems to be the dominant position
in current political discourse. Markets are ac-
corded the reality-defining power of a natural
force which simply has to be accepted. Anyone
who opposes the market is being punished by
it. People who do not earn a halfway decent in-
come in this market that is governed by nature
are, on the one hand, seen as not fully equipped
to deal with the demands of life (since life itself
is a competition). On the other hand, their mis-
fortune is considered as the sacrifice that unfor-
tunately has to be made to the market for the
sake of general well-being. Where not ruled by
interests, this discourse is still rather timid.
Intra-European comparisons suggest that
this does not necessarily have to be the case.
Over long stretches of time, a number of coun-
tries have largely managed to avoid social po-
larisation to this day even though their econom-
ic growth was not on such a scale that demand
alone would have cleared the labour market.
Nevertheless the labour market is the key to a
low (albeit growing) degree of social exclusion.
In the relatively egalitarian countries, organisa-
tional structures have emerged which have
been the source of market power as well as po-
litical power. Thus, it was possible to rule out
undercutting competition on the labour market
and to avoid responding with wage concessions
(down to market-clearing levels) to the threat of
unemployment. Instead, unemployment was
fought with public policies (tax-funded public
jobs, enhanced matching efforts on the labour
market, requalification, emphasis on re-employ-
ment rather than defending jobs) and by restrict-
ing the supply of manpower with rationing of the
labour force (for instance, reducing annual work-
ing time). No effort was spared, as it were, from
preventing a low wage sector from forming.
It must not be overlooked, however, that
such high wage strategies always tried to make
sure that the market supported them as much as
possible. In other words: near-full employment
at “acceptable” wages had to be viable on the
market. Since these were all small, open econo-
mies, success on internationally contested mar-
kets was always an important strategy element.
Low-wage jobs could therefore ultimately not be
avoided, as a large proportion of the labour
force was being placed in competitive highly
paid jobs. Education policy and a modern indus-
trial policy aiming at commercial success and
competitiveness were crucial for this strategy.
The widespread acceptance from the mar-
ket, however, is also the vulnerable flank of the
strategy. If large-scale unemployment sets in for
a long duration, either because of the general
economic climate or because of declining com-
petitiveness, underbidding competition creeps in.
If the unemployed are not either soon taken from
the market (early retirement, further training,