Markus SchindlerID 6043111
Mail: [email protected]
Date: 19-06-05Bachelor Paper IIFinal Version
Table of Contents
Introduction p. 1
The trend towards inequalityp. 4
Class-fragmentation in Societyp. 7
The key factors for wealth-distributionp. 10
Integration p. 11
Education p. 18
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Introduction
The recent Crisis has revealed striking inequalities within the
European Union. While millions of citizens are faced with
unemployment and decreasing standards of living, a small
percentage of the population has seen an excessive increase in
wealth. State guarantees for services of general interest have
declined drastically, while deregulation and unemployment
skyrocketed. Despite world-wide protests, however, the gap
between the rich and the poor continuously widens. It is argued
that this development strongly affects the ‘middle class’ in
Europe, a class that inherently represented the majority of a
country’s electorate as well as wealth and productive work.
While the ‘middle class’ as such can be seen as a rather vague
concept and is correctly identified as “a chameleon among
definitions” by Pamela Pilbeam (1990), the perception that the
wave of neoliberal homogenization that is sweeping across
Europe significantly perpetuates its marginalization is
evident. Furthermore, as is explored by this paper, the
increasing gap of individual wealth in society, as well as
among the European nation states, has not only led to an
increased fragmentation of social classes, but also to the
creation of a new class, which is subjected to a standard of
living that has been popularly believed to be a thing of the
past in Europe – the precaritate (The Great British Class
Survey, 2013). Interestingly, this development does not seem to
be limited to individuals, as the ‘poor’ countries such as
Greece or Portugal increasingly have to pay the price for the
wealth of the ‘rich’ northern states (Streeck I, 2013).
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This development, however, cannot surprise,
as government spending on institutions providing for social
equality and an equality of opportunities has seized
dramatically. With examples such as Greece being used to
discredit social welfare, while models such as the German
'Hartz IV' are excessively hailed and celebrated (die Welt,
2008) funds for the welfare state are withdrawn rapidly
(Streeck I, 2013). This promotes the impression that the
welfare state is fading. Furthermore, the increasing gap
between member states leads to fragmentation among the European
peoples as well as among its classes. Following
this perception, this paper aims at assessing the reasons for
this development, arguing that the decline of the national and
the lack of a European welfare state crucially contribute to
both, the continuous disappearance of the middle class and the
dramatic increase in social hardship in Europe.
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It is shown that the neoliberal worldview and its consequences
played a significant role in inducing Europe’s contemporary,
precarious situation. The question this paper tries to answer
is: What are the explanatory factors for inequality in Europe?
This paper is limited to the extent that it
aims at assessing a general trend in Europe, rather than the
situation in a country specifically. Neither is it directed at
a global scale. It is believed that it is more beneficial for
the ends this paper pursues to view Europe as a whole, rather
than as a fragmented entity. Especially the significant degree
of economic integration that has already taken place serves to
show how events in single countries have an effect on the
entire Euro-zone and justifies a more general approach.
There is a reason why Neoliberalism has
taken its roots in Europe. Today, it unites a considerable
amount of followers, who believe in its potential to alleviate
the problems Europe faces today. The theory is simple: in order
to fight poverty, people need to be put into jobs in order to
enable them to earn money. This, in turn, will provide for the
basic funds needed to build and sustain an existence.
Naturally, in order to create more jobs, the economy needs to
grow. To grow, in turn, the economy needs to increase its
productivity, which can be reached by increasing its output, or
decreasing the necessary input. Increasing the output implies
producing more with the same means of production. Decreasing
the input implies using fewer resources for equal output.
Ironically, this may lead to jobs being cut, as they might no
longer be needed to maintain feasible levels of productivity.
Generally, however, the credo of those pursuing the neoliberal 2
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ideology is striving for a continuous increase of growth and
productivity, due to their wide-ranging effects on wealth and
prosperity. In order to achieve this, every element that is not
crucial to the system needs to be eliminated. The logical
fallacy that ensues, when wealth and prosperity are proclaimed
as the results of cutting jobs and social services for the
masses, however, seems to be rarely recognized. While
eliminating all factors that are obstructive to the system does
increase productivity and growth in terms of GDP, one has to
wonder if more productivity equals more prosperity. Today, with
rising GDP, inequality seems to be rising as well. A trend,
that seemingly spares the upper classes. Hence, it is
understandable, why the situation in Europe is described as
grotesque by some and why many wonder, who actually profits
from an ever more flexible economy.
The analytical content of this paper is based on the
prerequisites for social classes defined by Pierre Bourdieu
(1986), framed and adapted to the contemporary context by the
Great British Class Survey of 2013. Hence, the first chapter of
this paper quantitatively assesses the development of
inequality in Europe over the past decades. This is followed
by an exploration of the contemporary class structure in
Europe. Subsequently, the underlying problems of these
developments are analyzed, specifically focusing on integration
and education as crucial factors for inequality in Europe.
Finally, the findings are used to present a possible solution
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to the current predicament of inequality, culminating into a
conclusion to summarize the findings of this paper.
The trend towards
inequality
The middle class is
generally regarded as4
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the ‘backbone’ of a society. Ideally, it yields the majority of
the taxes, and provides the majority of the workforce.
Independent from the specific reason, however, it can be
observed that the middle class continuously dwindles and that
society rather splits into a few elites with tremendous wealth
and a continuously impoverished bottom side that features an
increasing amount of precarious existences. This can be
assessed by
looking at several different indicators. Figure 1 (y-axis =
Gini-Coefficient) shows the Gini-index
for 27 countries combined (Solt, 2008-9). It shows a clear
trend in income inequality, which, after it decreased until the
late 1970s, rose rapidly until the late 2000s. While this
specific trend started in the Anglo-Saxon world and remained
stable in Europe, or even declined in Scandinavia, it “has been
growing in all country groups” (Schäfer, p.181) since the last
ten to fifteen years (OECD 2011: 24). Trends that accompany
this rise in inequality are, to a large extent, efforts for
liberalization and deregulation, as well as integration of the
market. As shown by Figure 2, the unemployment rates have
experienced a solid upturn from 2006 to 2010 (Unemployment
rates of seven countries, Figure 2, OECD 2011). Figure 3
depicts a clear trend towards more integration in market-
related areas.
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Unsurprisingly, this is matched by the findings in figure 4,
showing a declining trend in market regulation since the 1980s.
This does not only include legislative acts, but coincides with
a decline in Union Density, while the ‘tax wedge’ (see graph)
remains fairly steady – implying a tax burden that relatively
increases. The general Product Market Regulation (PMR)
indicator, then, shows how market-regulating elements have
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plummeted since the 1980s. Especially services of general
interest have experienced a drastic amount of deregulation,
starting in the 1980s and rapidly accelerating in the 1990s
(Summary Index: Figure 4, OECD 2011).
D
When comparing these findings to figure 5, which shows Armin
Schäfer’s (2013) results of a pooled time-series cross-
sectional
regression analysis
for Europe, as well
as Canada, Iceland,
Japan, New Zealand,
Switzerland and the
United states, it
becomes apparent
that exactly those
factors that are
strong determinants
of income
inequality have
also experienced
massive changes
during the last
decades. In this
figure, the
elements of social
expenditure and
taxation “reflect
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Figure 5
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the degree of distributive liberalization” (Schäfer 2013,
p.182). Union density, regulation and employment protection
show the amount of regulative
liberalization and are complemented by the remaining variables
as controlling elements (ibid.).
High values for the variables equal less liberalization with
the controls as an exception. The different models distinguish
themselves through the amount of additional variables used.
While model 1 only includes “dummy variables” (ibid. p.183) for
the respective time periods, model 2 introduces an “interaction
term for employment protection and social expenditure, since
these two could be functionally equivalent in reducing
inequality (ibid). The third model, finally, enables an
exclusion of the Scandinavian countries, to assess whether the
results are strongly influenced by their inclusion. Every one
of these models, however, yields the same results: the higher
the values of the first five variables, the less inequality in
a society. As displayed by the respective graphs, the values of
exactly these elements have continuously decreased over the
last decades. While the amount of social expenditure and
taxation has remained relatively stable over the same time
period (Figure 6, OECD 2007, 2010a, 2010b, in Schäfer 2013,
p.174), this was unable to negate the effects of the trends in
the other factors.
This data shows how the development in the recent years has
perpetuated social inequality in all 23 countries assessed.
Furthermore, it can be seen how the increase of market
liberalization coincided with these developments. The following
section picks up at these findings and attempts to put them 8
Figure6
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into the contemporary European context.
Class-fragmentation of Society
Social classes are an issue inherent to any society. As their
nature implicates differences, the classes and the gaps between
them can serve as a useful indicator for inequality: the
greater the difference (through no fault of one’s own), the
greater the injustice. While a distinction of those ‘better
off’ from those ‘worse off’ may appear rather trivial, the
phenomenon of the Middle Class as ‘something in between’ has
provided a challenge for many scholars. In Europe, the term is
complicated by several terms and definitions, which tend to
majorly differ from country to country. The French bourgeoisie,
for instance, holds a different connotation than the Italian
borghesia, the Polish mieszczaństwo and the German Bürgertum. Many
of these terms harbor differentiations of their own, which mark
a differentiation from the middle class proper, but are still
included in the term Middle Class. Differences of the economic
middle class (e.g. Wirtschaftsbürgertum) and its educational
correspondent (e.g. Bildungsbürgertum) should also be heeded when
thinking about the Middle Class – not forgetting the fact that
it has never been a ‘class’ in the traditional sense to begin
with (Kocka, 1995).
Jürgen Kocka (1995) describes the Middle Class as a “post
corporate, supralocal social formation”. He describes how, in a
traditional identity-building process, it defined itself
predominantly against the privileged aristocracy of the fading
18th century, based on what may be paraphrased as the Weberian
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principles of the protestant work ethic (Weber, 1905). As the
centuries progressed and the aristocracy’s privileges began to
fade, the lines of differentiation of the two classes began to
fade as well. This necessitated a new ‘other’, which was found
in the ‘lower’ or ‘working’ class.
Especially towards the end of the 19th century, the Middle
Class was coined by great diversity and attacks by other
classes, but also by a questioning of itself (Kocka, 1995).
Hence, the Middle Class itself had, and still has, merely a
vague identity, with its strongest means of identification
coming from a significant other. As the significant other is,
as a rule, constituted by a potentially threatening entity, it
has shifted in the past. The status quo poses merely a mundane
threat for the middle class from below, but a rising antagonism
towards a newly risen ‘elite’, or Oberschicht, from above.
Arguably, this new elite has, since the Second World War,
continuously filled the void left by the vanished aristocracy.
Despite overly optimistic politicians propagating otherwise,
long years of crisis have made the unofficial existence of
social classes evident in every nation state of Europe. Income
distribution reached a new level of inequality, with wealthy
households receiving an exceptional gain in income. The middle
or under classes of society experienced a reduction. Whereas
the top one percent of society inherently experienced a greater
impact of both, periods of recession and growth, than the
bottom 99%, this is the first time the bottom 99% suffer from
decreasing income levels, while the top one percent gains in
wealth (OECD, 2008). This juxtaposition of two parties
suggests a division of society into two camps – the top one 10
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percent and the bottom 99%. While this effectively displays a
general, striking disproportionality in income distribution,
one should be mindful of a crucial flaw of this approach – it
disguises the existence of another party in society. This other
party, referred to as the ‘Precariat’ in sociology, economics
and politics, defines a part of society utterly disconnected
from any form of the wealth many believe to be inherent to the
Western World. The term itself is a portmanteau resulting from
merging ‘precarious’ with ‘proletariat’. The British economist
Guy Standing was among the first to academically recognize the
phenomenon as late as 2011, in his book The Precariat – The new
dangerous class. In a corresponding article from the same year,
Standing describes the Precariat as a “class-in-the-making”.
While still unorganized and mainly angry in a disoriented
fashion, Standing leaves no doubt that the Precariat is a force
to be reckoned with in the future. Colin Crouch, in his
contribution to the book Politics in the Age of Austerity (2013),
generalizes by dividing society in three major parts. The top
one percent, the bottom 10-15 percent and the others, situated
in between the two (Crouch, 2013). According to him, the top
one percent is prominently the cause of political problems, as
the undemocratic concentration of power within the few people
who constitute this elite rises steadily and uncontrollably.
The bottom 10-15 percent, on the other hand, account for a
rising amount of social problems, which can only be presumed to
be caused by the precarious circumstances of their existence
and a dissatisfaction with the situation in general.
The results of the Great British Class
Survey of 2013, which bases its research on premises 11
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established by Pierre Bourdieu’s Distinction of 1984, where an
individual’s position in society is derived from economic,
cultural and social capital, arrives at similar conclusions –
even going further than Standing and Crouch, by advocating a
seven-tiered class system. This system, starting with a leading
class of Elites, distinguishes between several occurrences of
the middle- and working class, until arriving at the Precariat.
This class, finally, is defined as “[…] the most deprived class
of all with low levels of economic, cultural and social
capital. The everyday lives of members of this class are
precarious.” (The Great British Class Survey, 2013) The study
goes on to point out, that “the very rich and very poor are
still with us in the 21st Century” – heeding the declining, but
still popular illusion that great social differences are
overcome. The average age of participants is given as 35 years,
with 90% defining themselves as ‘white’.
Specifically, the report defines the
Elite as a class wealthy in all forms of capital, while
possessing an exceptional amount of economic capital. This sets
them apart from the so-called Established Middle Class, which
lacks the exceeding level of economic capital. The Technical
Middle Class, which follows in the hierarchy, is identified as
a new and rather small class. While being able to rely on high
economic capital, they are lacking in culture and social
contacts. The following working class is divided into three
different groups, starting with the New Affluent Workers, who
are defined as a young and active group with moderate levels of
economic capital and higher levels of social as well as
cultural capital (The Great British Class Survey, 2013). The 12
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Emergent Service Workers, who constitute another new class
according to the researchers, is an urban group commanding only
low levels of economic capital, but ‘emerging’ cultural and
high social capital. Finally,
the Traditional Working Class is an, on average, older group of
people, who score low on all three types of capital. They are
only followed by the Precariat. While this study was conducted
in Britain, developments on the continent seem to greatly
mirror its findings. Problems of social classes move into
public focus again, and especially their complexity, as the
seven-tiered class model serves to show, should not be
underestimated.
The key factors for wealth-distribution
Evidently, the problem of inequality in Europe is a multi-
layered problem. Its effects are simple, but multiple: The
wealth gap among individual members of society in Europe is not
only perpetuated by the circumstances within a state, but also,
and increasingly, by a wealth gap between the ‘rich’ northern
and the ‘poor’ southern states of the EU. This leads to an
increasing feeling of envy and protectionism among the European
peoples. The European states, which have maneuvered themselves
into an ever-increasing state of market dependency since the
1970s now struggle to uphold the illusion that ‘social justice’
still exists next to ‘market justice’(Streeck I 2013, p.92) .
Some argue that the wealthy western Democracies, especially
those that are united in the EMU today, have gone through a
process that turned states formally financed by tax-revenue,
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through the obligations created by international markets, into
states that were forced to go further and further into debt.
Wolfgang Streeck describes this as a process from a state based
on tax income, over a state that sustains itself via first
public debt taken by the state, followed by private debt by
individuals due to the facilitation by the state to take up
loans – in order to compensate for the lacking provision of
social justice by the state (Streeck I, 2013). Today, according
to Streeck, the state turns into a mere provider of funds for
the market – a ‘consolidation state’ that is only concerned
with consolidating its finances in order to ensure the
repayment of investors. This seems to adhere to the current
market aim of turning employees “from a fixed to a fully
flexible cost factor. All risks are being transferred to
employees. (Weinberger 2010, p.6)
As two inherent factors that
perpetuate the current social problems, European integration
and education may be identified. Integration, as Europe’s
current, semi-integrated state obstructs both, national and
supranational actions and education, especially on the European
Union, as it prevents the creation of a true European Public
Sphere and with it keeps the European peoples from perceiving
the different possible solutions that do exist for the current
crisis of the welfare state and articulating an opinion on the
matter (Habermas II, 2013). The following sections tend to
these two elements in detail, outlining their significance and
current flaws.
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Integration
While the Union as a whole features a near-seamless economic
integration, it is still severely lacking politically and
socially. Naturally, however, the three different aspects of
integration are strongly interconnected. Politically, the
aversion towards more integration has rarely been greater in
large parts of the population than today (Eurobarometer 78,
2012). While the benefits of the Schengen agreement are
increasingly taken for granted, xenophobia, especially towards
the new member states Bulgaria and Romania, is steeply on the
rise. In Greece, associations such as the ‘Golden Dawn’ draw
followers in great numbers. This is especially worrying, as
xenophobia is not only practiced rhetorically, but also
physically – by means of direct aggression against non-Greek
citizens (Roth 2014, p.151). Especially in those countries most
battered by the recent crisis, freedom of speech and the right
of assembly have suffered severely. Furthermore, in those
countries greatest affected by the crisis especially, democracy
has been critically damaged. Publically elected officials are
openly and officially being incapacitated by foreign
authorities, as impressively demonstrated by the attempted
Greek referendum on the austerity measures imposed by the
Troika and EU-countries in 2012 (Gammelin & Löw 2014, p.91).
After massive protest and the threat of withholding funds from
outside the country, the referendum had to be cancelled, and
the austerity measures were implemented without any democratic
legitimization. The government had been blackmailed into
obedience (Roth 2014, p.253). This example serves to show the
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extent of influence supranational actors can administrate over
European countries today.
Similar processes can be observed not only in
Greece, but also in Portugal and, at least in an attempted
manner, in Italy (Streeck I, 2013). The justifications for
these practices are twofold. The most obvious one is their
proclaimed necessity. Some economies, predominantly those of
the southern European states, are deemed inefficient,
noncompetitive and, maybe most importantly, too inflexible. As
this is defined as the main reason for the debtor-states’
incapability to settle their debts, reforms have to be enforced
in order to alleviate the problem for the future. Also, systems
and institutions of welfare-distribution and control – which
may also be described as agents of social justice – are being
described as an undesirable and inefficient means of influence
on the natural fairness of the market. This is seen as an
inherently distorting mechanism that forces arbitrary,
political decisions upon a neutral and impartial market system
that hence needs to be eliminated. As Wolfgang Streeck points
out, what is often not mentioned is that, as opposed to the
process of the market, ‘political’ decisions tend to be the
results of an intensive, democratic discourse, with clear
responsibilities (Streeck I 2013, p.93).
The other official reason for their enforcement is morally
constructed. A popular argument in the rich democracies, such
as Germany, is to proclaim that those countries that ‘did not
do their homework’ need to be forced to do it now, in order to
ensure they do their part for their own prosperity, rather than
‘mooching off’ the work of others. This has proven to be a 16
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useful tool to ensure the population’s support for austerity
measures. It has also, however, served to shroud the unofficial
reason for the implementation and austerity measures and the
lending of ‘aid’ to countries such as Greece and Portugal,
which is to separate the ‘capital’ from democratic influence
(Streeck I, 2013). As long as the people in a democracy have
the means to decide upon the priorities of the state, they may
opt for securing their own standard of living first, rather
than paying off foreign investors. This situation is not only
undesirable for investors. It also constrains the ability of
the state to take up new loans, as the investors’ ‘trust’ in
the state is impaired (Streeck I, 2013) and can thus be
perceived as undesirable for states as well. Generally,
democratic legitimization seems to be of little importance when
it comes to dictating ‘responsible’ courses of actions to
states. Hence, the extent of political integration is, from the
market’s perspective, in exactly the right state. It is
thorough enough to provide for inter-state ‘solidarity’ in case
of a national insolvency, yet weak enough to enable any
regulatory measures on a European level that could tame the
negative externalities of capitalism. Hence, European
integration, no matter in which respect, primarily serves the
need of the market. The only sphere, where the
European Union has achieved a level of integration that
deserves the name, is the economic sphere (Streeck I, 2013).
Free movement of goods and services, as well as facilitated
transactions and movements of capital appear today more full-
fledged than ever before. These processes transcend national
borders and have little heed for national restrictions or 17
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regulations – any regulation that is perceived as too
restrictive can be easily circumvented by relocating to another
law system (Streeck I, 2013). As a consequence, owners of
capital enjoy substantial liberty, while those restrictions
that were designed to ensure a serving, rather than a ruling
role of the market, are restricted by national borders and,
thus, dominated by the market. This greatly benefits mostly big
corporations, as they are able to move around Europe without
great constraints. Next to the logistical advantages,
corporations are thus enabled to exploit differences in wage-
levels within the EU and can move their production sites to the
cheapest location. The same applies to differences in taxation
within EU borders. Companies can simply relocate as soon as
they feel taxation is increasing in an unreasonable manner,
thus not only avoiding undesired taxation and regulation, but
also putting the regulator (the state) under pressure to
improve the conditions for the companies (Offe 2013, p.43).
This development, paired with the fact
that the European nation states have become ever more dependent
on foreign investors, perpetuates what we can observe today:
the market abandons its shackles and now increasingly finds
itself in the position of the ruler, rather than the ruled
(Streeck I, 2013). This leads to the, for the states,
disadvantageous situation of being put into direct competition
with each other: As all states are dependent on the ‘trust’ of
the market, they are forced to compete for providing the most
favorable conditions possible for investors (Offe 2013). As
states depend on an income from taxes, the jobs provided by big
corporations and investments and capital of investors, measures18
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to consolidate the national household are being relocated to
those who are unable to avoid them – the middle and lower
classes of society. These areas are more easily targeted, as
they are, as a rule ‘immobile’ and cannot take advantage of
European economic integration. Predominantly either the
privatization of social services or simply the reduction of
government spending on these budget points serve as an easy
means to consolidate the state finances and improve the states’
attractiveness for investors. Naturally, the situation for
education is quite similar and is discussed in the following
chapter.
This forced competition of EU states with the other Schengen-
members, for the lowest tax-rates for wealthy individuals as
well as big corporations, has the consequence that the European
states are faced with a tough choice. Either, they work to
equalize the other, still lacking aspects of integration
(political, social, etc.), aiming at dissolving the need for
inter-state competition, or they attempt to solve their
problems by themselves. As today’s political reality, arguably,
does not permit for a sweeping integration of the extent that
would be necessary to tame the compulsions of the market within
the EU (Streeck II 2013, p.98), the states have so-far only
made very limited attempts of reigning in the market on a
European level. While scholars such as Habermas postulate that,
in the long run, European states will be unable to safeguard a
certain amount of discretionary capacity in an insufficiently
integrated EU, especially the dominant states such as Germany,
the contemporary ‘giant’ of Europe (Habermas I 2013, p.229),
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have preferred to fend for themselves and perpetuated
nationalistic sentiments within the EU.
Thus, the European Union of today is coined by
fragmentation. Rather than achieving an ‘ever closer Union’,
especially the Eurozone is, arguably, heading in exactly the
opposite direction. The populations of the ‘rich’ member
states, or lending states, are increasingly antagonized from
the ‘receiver’ states, as the public discourse increasingly
stigmatizes countries such as Greece or Portugal as undeserved
receivers of help, who are ungratefully profiting from the
‘rich’ countries’ hard labor. Superficially, this poses as a
justification and an indirect form of payment for the northern
tax-money that is, allegedly, spent on the south – thus
appeasing the northern population. Ironically, this puts the
heads of state of the rich countries under pressure to enforce
austerity measures in the receiver countries, which will
indirectly find their way back to the rich countries due to the
high degree of economic integration: as a higher degree of
‘flexibility’ raises the poor countries’ attractiveness for the
market, the rich countries must show market-responsibility in
their actions and adapt their social systems to those of the
poor countries (Streeck I, 2013). The populations of the
‘poor’ countries, on the other hand, increasingly despise their
‘richer’ peers. This is perpetuated by externally dictated
austerity measures and a degree of stigmatization that they
feel is undeserved. They see their social systems destroyed
and themselves being held accountable as principals for the
actions of agents they had no influence over and hardly
profited from (Streeck I, 2013). Generally, these procedures 20
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were not legitimated through democratic processes and the will
of the people, but through an international dictate that is
being enforced through undemocratic means by non-democratically
elected actors, predominantly the so-called Troika (Streeck I,
2013). Theoretically, officially sovereign nation
states could refuse the implementation of international
dictates or even refuse the prioritization of the repayment of
their debts over the well-being of its people. The dependency
from investments of today’s “debt-states”, however, negates
this option (Streeck I, 2013). Should a state refuse to repay
its debts, future loans, will exponentially increase in price.
If a state refuses to implement austerity measures dictated by
Troika, this will inevitably lead to the withdrawal of the
other states’ support. Hence, the people, as well as the
parliaments and populations of the debtor countries are
effectively incapacitated.
Thus it can be seen, how the peoples of Europe are not
only being fragmentized and antagonized, by the current
austerity measures that are dubbed as “without alternative”
(Streeck I, 2013). In the long run, the populations of both the
northern and the southern countries are left with a decreased
standard of living, disemboweled social systems and a democracy
that has lost any means to address the dictate of the market in
any way whatsoever. Naturally, through these processes
initiated on an inter- or even supranational level, the
disembowelment of systems of social security in the south puts
the northern countries under pressure to do the same in order
to ensure both, the amount competitiveness and flexibility that
the market demands and with it the favor of the investors. In 21
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general terms, this can be seen as just another manifestation
of the effect of a lacking amount of integration in all aspects
but the economic one: the perpetuation of competition among the
EU’s member states. Despite
this situation, which seems very disadvantageous for the
concerned political actors, those involved seem to have
accommodated themselves comfortably along the lines of their
confrontation (Crouch 2013, p.219). To this, Colin Crouch adds
the assessment that the market and politics as actors are being
complemented by a third member: big corporations (ibid.).
According to him, these corporations are more than mere
‘lobbyists’, but are active participants in governance. This
actor, he argues, serves as an element linking the market and
politics together, thus providing for a system that betrays the
true neoliberal ideal of a strong separation of the state and
the market (ibid. p.220). It has to be highlighted, however,
that this interconnectedness does not provide an opportunity
for politics (read: elected officials) to influence the market
on another level, but rather vice versa. Furthermore, this
great corporate influence perpetuates the already existing
inequality in society, as it facilitates access to power for
the big companies and the rich, while it complicates access for
the less resourceful (ibid. p.221). According to Crouch, this
situation is fostered by the afore-mentioned corporations that,
as opposed to states, transcend national borders, as well as
the re-modeling of government organizations after the prototype
of private firms and the privatization of public services
(ibid.). Thus, the state generally loses power and influence
and is increasingly placed under the dictate of both the market22
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in general and big corporations specifically. This serves to
continuously foster the primacy of the market over both
politics and democracy and, most importantly for this paper,
further increases the divide of the standard of living that we
can see in Europe today. The “privatization of
supply but not of demand and a separation of the user from the
purchaser” (Crouch 2011) enables private corporations to not
only have a share in determining public policy, but even use
government capacities to actively create new markets for their
companies (Crouch 2013, p.228). Thus, the welfare state as such
can retain its justification to exist only if it turns into an
“arena for corporate profit-making” (ibid. p.229), rather than
a provider of services by the public, for the public. As the
sphere of social welfare is increasingly privatized, the
question of corporate social responsibility arises. While the
general claim on behalf of the market promotes selfish behavior
as beneficial for the public good, arguably, it is merely
beneficial for the shareholders of those private firms that
generate profit through selfish behavior (ibid.). Thus,
shareholders gain benefits, while stakeholders (read: society)
remain empty-handed. The ideological ‘freedom of choice’, the
initial aim of social welfare, is perverted and turned into the
outcome of sessions in commercial courts (ibid. p.230). This,
paired with the fact that social responsibility increasingly
turns into something corporations pursue voluntarily, as
opposed to a legal obligation (ibid. p.231), perpetuates the
situation that welfare is no longer general, ideological and
the result of a public, democratic discourse, but specific,
non-transparent and arbitrarily determined by corporations. 23
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Thus, social welfare is de-
politicized and, with it, detached from democratic processes
and legitimization. Those wealthy enough to be independent from
social welfare leave the social contract, while a growing part
of the population depends on corporations to provide for social
welfare. While, in theory, this may place corporations under
increasing pressure to provide for its employees, it most
definitely creates an unequal and restricted access to welfare,
which betrays its original purpose. Due to these reasons,
Crouch sees society on a path towards ‘post democracy’ (ibid.
p.235). While the decline of democratic influence on the
welfare state does not lead to its destruction, it does
perpetuate the strong influence corporations have on politics.
An influence that is hardly reversible, as this market is more
and more crucial for economic growth (ibid.) and corporate
power is continuously being immunized against democratic
influence (Streeck I 2013, p.241) – a process that can rightly
be described as a mere ‘façade-democracy’ (Bofinger, et al.
2012). These developments, which go hand in hand
with the very developed state of economic and the very
underdeveloped state of other aspects of integration, are now
being perpetuated by the austerity measures imposed on the
‘poorer’ countries, which have led to a severe decrease in
government spending and a wave of privatization that affected
every kind of government organization, profitable or not (Roth
2014, p.256). The ‘reforms’ desired by other states or
supranational organizations officially prioritize the needs of
the market over the needs of the people and without changing
the design of the contemporary European Union towards more 24
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possibilities of democratic articulation that deserve their
name the ‘precarization’ of society will be perpetuated even
further. If the state of political integration
within the EU can be described as lacking, the state of social
integration must count as abysmal. Instead of aiming at
providing for a minimum level of income variation within the EU
or trying to complement or substitute the multitude of national
welfare states with a European one, the sole focus of political
actors seems to be the ‘flexibilization’ and increase in
competitiveness of national economies persists. Generally,
while the creation of a supranational provision concerning
social welfare still appeared to be on the agenda in 2012
(Gammelin & Löw 2014, p.131), it now appears to be vanishing –
with heads of state such as Angela Merkel saying “the EU is not
a Social Union” (Spiegel, 2014). The increase of GDP growth, no
matter the cost, seems to be the prime issue of political
thinking, while indicators as the Gini-Coefficient are
disregarded both nationally and internationally.
Summarizing, one can
say that the severely unequal state of integration facilitates
a dictate of economic reason over political or social
desirability. One may argue that contemporary realities do not
permit for a change for more integration in the areas of
politics and sociality. Even the argument of scholars such as
Wolfgang Streeck, who propagates a return and a re-instatement
of national institutions as a bulwark against the international
wave of economic, social and political homogenization, seem
hardly realistic, as they are likely to be impossible due to
the contemporary extent of economic integration (Habermas II 25
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2013 p.212). It is my conviction that any change in the EU’s
path towards a ‘Hayekian super state’ (Streeck I, 2013) can
only be achieved by a strong public opinion, which has to be
the result of a powerful and active public sphere. In order to
achieve this, however, the underlying element of education is
indispensable. This is discussed further in the next section of
this paper.
Education
The element of education has a documented effect on a
democratic society. Figure 7 (Schäfer 2013, p.187) shows the
importance of education for a democratic society. Not only does
it have a much greater impact on election turnouts in general.
It even increases
its effect despite
rising inequality.
In the issue of the
standard of living
the assumption that
education is
essential is coined
by the fact that, in
order to discuss,
participate in and shape policy of any kind, the public needs
to be aware of their demands’ intrinsic effects. Also, it
follows Jürgen Habermas’ postulation that we need an active,
transnational public sphere in order to arrive at functioning,
collective European democracy that deserve its name. This is
crucial, as change for the better in the sense of the majority 26
Figure 7
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of the people does not occur by itself. Without being aware of
the underlying processes of European, or even global
occurrences, without learning about the impact policies have
not only on them, but also in others, a European public sphere
that can effectively and feasibly participate in EU policy is
hardly possible (taz, 2014). Unfortunately, however,
education in Europe can be seen to be severely lacking in this
respect. Not only is the existing education system in the
different European states itself flawed in the sense that it,
to a large extent, abstains from teaching students about the
importance of the European Union and rather focusses on
reproducing the artificial notion of a nation state with an
inherent and clearly distinguishable people. Even graver is the
fact that through the austerity measures enforced on many
European states, the domain of education, which can be seen as
inherently belonging to the state, was hit by both, a wave of
dismissal of government-employed educators and of privatization
of education facilities – a process that can also be observed
for most other institutions financed with government funds
(Roth 2014, p.247). Naturally, as education fails to provide
what it should for a functioning society, in terms of
counteracting xenophobia, indifference or ignorance in general,
the project of a united Europe, no matter in which exact shape,
with a decent standard of living for everyone, is robbed of its
basis. On the first glance,
education may appear as merely one of the many other targets of
austerity policy and, as such, not afflicted with any
significant specialty. Hence the evidence presented above,
without high-quality and, as far as possible, impartial 27
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education on a European-wide basis, the European Union will
have no future in the long run, no matter which shape it will
take. If the people are not actively involved in deciding which
future and if they are unable to estimate the repercussions of
their decisions due to ignorance perpetuated by the state,
Europe will remain a project of the technocrats and elites and,
as such, never function for the general good. Thus, if the not
only abstain from participating in the public sphere, but are
not even willing and able to follow the highly complex issues
of today’s European Union, the establishment of a public sphere
that transcends national borders is a futile effort.
When discussing the problem
of education, it becomes apparent that this issue is, in
reality, nothing more than another aspect of European
integration that needs to be, in a sense of the word, equalized
with the level of economic integration. Even more so, it can be
seen to represent the underlying factor that can shape the
other aspects of integration for the better. Also the European
economy can prosper in entirely new ways, if entrepreneurship
and the willingness of people to make use of the possibilities
granted by them through Schengen are effectively perpetuated by
an absence of xenophobia and fear of the other (Said, 2003). As
long as narrow-minded nationalistic sentiments not only
persist, but are even being supported by national and intra-
European politics, however, the EU heads towards fragmentation
rather than integration, regression rather than progress and a
future that will most certainly be more shaped by the
compulsions of a globally integrated market than ever before.
Ironically, a 28
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change towards more investments in education by the state will,
most likely, have to be initiated by the population: As the
effects of education, as a rule, have long-term rather than
short-term effects, politicians will most likely abstain from
initiating such a change at the expense of other measures that
promise electoral success, even if limited, in the short-run.
Hence, it is questionable if sufficient electoral pressure will
be mobilized to initiate in improvement in education,
particularly on a European level.
The Cures
The obstacles for sustainably establishing a standard of living
in Europe that would justify a description as ‘first world’ are
strongly interconnected. The lacking amount of integration in
several respects hinders the creation of a European public
sphere, as cross-border communication on policy issues seems
irrelevant to the respective national citizens, especially due
to the rising power of populist parties, which exploit the
xenophobic sentiments that arose from the predominant way of
governance in Europe that culminated in enforcing undemocratic
austerity measures on the peoples of member states to make up
for state deficits, instead of trying to provide the grounds
for a fair consolidation of state finances by working towards a
degree of integration that allows for just and proportionate
taxation for everyone – without fear of being the ‘loser’ of a
European competition of taxes among the member states.
As further
29
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integration seems to be undesired not only by the European
heads of state, presumably due to power-political reasons, but
also by the European citizens, presumably as an effect of a
renewed perpetuation of nationalistic feelings of us and them
in light of the crisis this seems unlikely. An impartial
education of European citizens, which would enable them to
evaluate the up- and downsides of the possible courses of
action, appears unlikely as well, as this may endanger the
status quo of the comfortable accommodation of the market, big
corporations and politics and may thus be harmful for the
‘trust’ of the markets and, with it, the meagre amount of
economic growth that western democracies were still able to
artificially provide for today (Streeck I (2013), p.26).
Similarly, investing in education rather than trying to cut
government spending at all cost seems an unrealistic goal
today. Next to the danger of impairing the ‘trust’ of the
market by redirecting funds away from short-term consolidation
efforts, there seems to be no public desire strong enough to
demand such a change from any government – especially not for a
European-wide education project.
This is not to say that the current system, which tends to be
called neoliberal despite severe interventions of states in
markets, does not suggest solutions itself. These do, however,
predominantly consist of the postulation of ‘more of the same’,
meaning more privatization and more room for the self-
regulating force of the market. This approach has not been
fruitful so far and there are hardly grounds for future
30
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optimism. Thus it can be seen that the status quo continuously
reproduces itself. The public, rather than fighting for active
participation in shaping the future of Europe, for a great part
abstain from participating at all (EP election, 2014) and the
established parties seem reluctant to initiate a public
discourse about the future of Europe. Especially after the
European Elections, however, there may be the potential for
change (FAZ, 2014). As
already postulated by Jürgen Habermas prior to the elections
(Habermas I 2013, p.229), the success of the Eurosceptic
parties, which can be seen to predominantly rest on the absence
of real public education, or Aufklärung, may finally enforce a
public discourse on many levels of society and shake the
established parties out of their lethargy. Through this public
discourse, hopefully, the topic of the European Union and its
future will finally move more into the center of public
political attention and with it the issues that are connected
to it. Furthermore, more integration and education may serve to
bridge the class-gaps within the European societies and provide
for a public sphere that not only transcends national borders
in Europe, but also the highly fragmentized social groups
within society.
Conclusion
In order to answer the question what can explain inequality in
Europe, this paper has taken a closer look on those factors
that quantitative analyses by other scholars have revealed as
31
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its key determinants. The currently practiced system of pseudo-
neoliberal capitalism (Crouch 2013, p.219), the biased focus on
economic integration, dictated austerity measures under the
absence of democratic legitimization, the strive for GDP growth
at all cost and, in general, the primacy of the market have
shown not only to sustain inequality, but to promote the
fragmentation of classes as shown by the Great British Class
Survey (2013). Other elements, however, have proven to provide
for the opposite. Those are technical issues such as fair
taxes, investments in the middle class and the establishment of
a balance between labor unions and employers. ‘Real’ growth, as
opposed to growth artificially induced via debt, can also be an
aiding factor, if not an essential one (Sedlacek, 2014). Also,
a functioning public sphere among everyone involved in the same
system is necessary. While one may go as far as viewing this in
the context of a globalized economy, for the present, the focus
must lie on establishing this for the European Union. As has
been argued by this paper, the premises for this reach beyond
perpetuating integration. While integration is one of the key
elements, the individuals confronted with, and essential for
achieving an adequate level of it need to be focused on as
well. If one merely provides integration, but forgets to
provide those affected by it with the tools to wield it
properly, the project of European integration will stumble
under populist and nationalistic sentiments and, finally,
crumble under the ensuing fragmentation. Thus, education is an
essential, or the essential aspect to focus on for a more equal
and just society – also as it significantly enhances the
potency of the public sphere and the awareness of individuals 32
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about themselves and others. It is also an underlying factor of
those forms of capital that Bourdieu (1986) uses to determine
social classes. While other authors, such as Johan Norberg
(2008) point out rising prosperity on a global scale, the
problems we face in Europe are not to the world’s benefit, and
the suggested solutions would not be at its expense.
If integration is the premises for
reinstating the element of social justice to the European
people, education is the premises for achieving integration,
and thus, for providing the chance for a society and a system
that benefits the many, rather than the few. Further
research will need to be conducted on the question how an
equalization of the different aspects of integration should
look like. Especially the question of how an equalization of
different aspects of life can be reconciled with the different
ways of life and different European cultures that are very much
worth conserving and that most definitely should be regarded as
an asset of Europe as a whole, rather than a nuisance that
should be eliminated. Also, the question of competence is an
essential one – it seems apparent that few among the European
actors could and would initiate a change towards more
integration, education and democracy on a European level. Both,
due to reasons of political power, but also since the
electorates of the European Union seem rather averse to it.
33
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