Free market economics in europe?

regi

with France set to say no to the European constitution due to the amount of free market provisions it contains, and Gerhard Schroeder facing a great deal of pressure over his plans to improve German competitiveness, is Europe set to be a place of moribund economies overtaken in all sectors by much hungrier countries who don't possess that level of suffocating social protection?

Should more economically liberal countries like Ireland or the UK continue to shackle themselves to that philosophy? Or will the comfortable and social welfare systems of Germany and France florish in this new Europe? Can they maintain themselves long term in the globalised economy?

Quantum

Regi wrote:

Should more economically liberal countries like Ireland or the UK continue to shackle themselves to that philosophy? Or will the comfortable and social welfare systems of Germany and France florish in this new Europe? Can they maintain themselves long term in the globalised economy?

They won't and they are changing. They just don't like being pushed. But change will come. And Fance and germany are only two countries in a large Europe.
We have no reason to change or leave. We have nothing to gain by it and a hell of a lot to lose.
There is no shackling; quite the opposite. Our membership of the EU and the EMU is what enables us to stretch out and succeed. The rest of the EU is following.

AngelofFire

Free Market economic systems are just right wing wet dreams in my opinion. Welfare systems are needed to support the fabric of Society. The Free Market doesn`t provide for the quality of life of the people, in Ireland housing prices have gone beyond the prospect of affordability, our public childcare is one of the worst in the EU, yet the share of national wealth for big business and the rich has increased disproportionatley. There is no correlation between a society that is friendly to big business and one that provides for its people , look at what happened in where argentina endorsement of the free market agenda led to bankruptcy. Germany`s problems have little to do with the fact that it has a welfare system, there is also the problem of re-unification. Sweeden a country with one of the best social protections in the world actually has lower unemployment than most EU countries. see www.monbiot.com article on punitive. One of my politics lecturers said that a better welfare system actually had something to do with irelands economic prosperity, if you provide an appartus of support to people in society in the form of free education, 3rd level grants, child benefit and training. They will be able to get ahead in life, thus allowing increased and wider participation in social and economic affairs.

DadaKopf

Thanks, AoF, I was going to link to Monbiot's article, too. Perhaps more interestingly, a recent study by the IMF came to a similar conclusion.

Regi, apart from characterising social democratic states as "suffocating social protection" or as a rock to be "shackled" to - unsubstantiated invective basically - you don't actually make any kind of point.

Anyway, aren't all the EU economies mixed economies?

Edit: Oh yeah, this is a good blog post on the topic.

mike65

There are two Europes - the free market one and the statist one. The former is rapidly gaining new members with the accession of the "easties". Which France and Germany so fretted over while making the right noises geo-politically speaking. Its interesting that in France the EU referendum has become part of the liberal vs statist argument. With the NO grouping fearing it heralds the free market in full tooth and claw mode. This is a country with a 35 hr week, and 10% unemployment. Germany knows it must change but just can't quite face up to whats required. Meanwhile corporate Germany is moving out into the new frontiers eastwards.

Irelands postion is pretty good really. We've been smart enough to know the free-market is the only way to boost our wealth and build the state (yes we can talk about how badly the money has been spent but we would never have had the money if the left was in power).

Small countries make rotton social-democrat nivarnas as they have to run quickly and have the ability to change tack quickly to keep productivity high as exports and a competitive position are the only way a country such as this one can survive.

Remember the "economic war" of the 30s? When statism ruled the free-state.

Mike.

AngelofFire

(yes we can talk about how badly the money has been spent but we would never have had the money if the left was in power

May i remind you that it was a Labour Finance Minister that brought in Irelands first budget surplus.

Small countries make rotton social-democrat nivarnas as they have to run quickly and have the ability to change tack quickly to keep productivity high as exports and a competitive position are the only way a country such as this one can survive.

Can that competitive economy that helps our country to ''survive'' not co-exist with concepts of social justice and quality of life rather than attack them. I believe that it can and should.

liberal vs statist argument.

Without trying to de-contextualise the arguemant i believe that the spectrum of political philosophy is more complex than that. Many ideologies reject both liberalism and statism.

SkepticOne

AngelofFire wrote:

Can that competitive economy that helps our country to ''survive'' not co-exist with concepts of social justice and quality of life rather than attack them. I believe that it can and should.

Yes. I think a mix is necessary. The one is needed for the other. If there was no public funding of education, for example, we might not produce sufficient educated people to operate in the private sector. A successful private sector is necessary to generate wealth, some of which is then used to fund the public sector. The precise mix should be down to the country itself.

DadaKopf

Can that competitive economy that helps our country to ''survive'' not co-exist with concepts of social justice and quality of life rather than attack them. I believe that it can and should.

Markets should be made work for people, not the other way around.

Can that competitive economy that helps our country to ''survive'' not co-exist with concepts of social justice and quality of life rather than attack them.

Some would argue it can't. A market-embedded state which relies on tax revenue to survive is structurally disposed towards intervening in the free market to favour minority interests, but this makes necessary the creation of an illusion that the market is the fairest method to distribute wealth.

Andrew 83

There will always been people who will be served by right wing economic policies as they are of direct personal benefit to the people involved. I think some of these people don't care about those who are left behind while others are just ignorant to it. The majority however do not benefit.

Here's not one but 50 problems with the current system from an article in the Tribune a couple of years ago:


Copyright 2002 The Sunday Tribune plc
Sunday Tribune (Ireland)

May 12, 2002

SECTION: Pg. 9

LENGTH: 1323 words

HEADLINE: 50 WHYS TO LOSE THESE LOUSERS;
ELECTION 2002

BODY:
Diarmuid Doyle on how this awful government squandered the boom

1Irish Gross National Product rose from E41.9bn in 1994 to E86bn in 2000. Gross
Domestic Product rose from 60% of the European average in 1989 to 114% in 1999,
making Ireland the third richest member state after Luxembourg and Denmark.
(Source: Department of Finance)

2Irish people have the worst life expectancy in the European Union. (Health
Inequalities and Poverty, a report from the St Vincent de Paul Society)

3Irish men die a year earlier than the EU average; Irish women die more than
twoyears earlier. (Health Inequalities and Poverty)

4Proportionately, more people live in poverty in Ireland than in any other
industrialised country outside the United States. (United Nations 2001 World
Development Report)

5Irish workers are the lowest paid in all - bar two - of the 15 EU nations.
(Rights and Justice Work in Ireland, a 2002 report by the Joseph Rowntree
Charitable Trust)

6Average pay in Ireland is 28% below the European average, while Irish workers
have the second longest working hours in the EU. (Rights and Justice Work in
Ireland)

7The average industrial worker is now spending more than 20% of his or her
wageson childcare costs. (Irish Congress of Trade Unions)

8Over the last five years, budgetary decisions have meant that the gap between
rich and poor has widened by E242 per week. (An Agenda for Fairness, the 2002
socio-economic review by the Conference of Religious in Ireland)

9The death rate in the lowest socio-economic grouping is more than 340% higher
than for those in the higher socio-economic group.

(Inequalities in Mortality, 1989 to 1998, a report presented to the Departments
of Health in Dublin and Belfast by the Institute for Public Health)

10 The number of people living on below half the average income rose from 17.4%
of the population in 1994 to 20% in 1998. (2001 report from the Economic and
Social Research Institute)

11 In 1996, there were 27,427 households on the local authority housing list.
The estimate for last year was 58,789. This figure represents a growth in those
looking for local authority accommodation of 114%. (Threshold)

12 The proportion of elderly people living below the poverty line rose from 10%
in 1994 to 30% in 1998. (ESRI)

13 The Irish state pension has the lowest value in the EU. (ESRI)

14 Social spending in Ireland is the lowest in the EU at 16% of GDP; the EU
average is 27%. (Rights and Justice in Ireland)

15 Ireland has the second most uneven distribution of income in the EU, after
Portugal.

16 Thirty per cent of households headed by unemployed, disabled or ill people
are in consistent poverty. (ESRI)

17 Twenty per cent of Irish students from lower working-class backgrounds
participate in third-level education compared to 80% from upper middle-class
backgrounds. (Combat Poverty Agency)

18 The rate of access to higher education ranges from 4.8% in inner-city Dublin
(specifically Dublin 1) to 56% in some middle class suburbs (specifically
Dublin14). (Rights and Justice Work in Ireland)

19 Ireland has the lowest number of acute hospital beds per capita in the EU.

20 Ireland has the highest rate of premature death caused by coronary heart
disease in the EU. (Health Inequalities and Poverty)

21 Ireland has a five-year waiting list for children in need of orthodontic
care.

22 Ireland has the highest rate of child poverty in the EU. (Combat Poverty
Agency)

23 Ireland has four times more golf courses than children's playgrounds. (Frank
Martin, lecturer in children's law)

24 The family of a 12-year-old Tipperary child waiting over five years for a
hospital appointment had to avail of a charity auction to raise money for
private treatment. (Irish Times, 4 July, 2001)

25 Infant mortality is 5.5 per 1,000 births, the fourth highest in the EU.
(Rights and Justice Work in Ireland)

26 Irish health spending is 4.5% of GDP, 30% below the European average.
Greece,Lithuania, Slovenia and Poland all allocate greater proportions of GDP
to health. (2001 United Nations Development Report)

27 More than 60 patients per day are having to wait on trolleys for up to six
hours in the casualty departments of Dublin's acute hospitals. (Eastern
RegionalHealth Authorities)

28 When Bertie Ahern visited Nenagh hospital last September, patients being
accommodated on trolleys in corridors were moved out of sight. When he left,
they were returned to the corridors. (Contemperanous media reports)

29 The number of homeless people in Ireland has officially doubled since 1996
and now stands at 5,234. However, voluntary organisations believe the real
totalis higher. (Rights and Justice Work in Ireland)

30 Homelessness in Cork doubled between 1999 and 2001. (Cork Simon Community)

31 Forty-five per cent of the homeless people in Dublin are mentally ill.

(Homelessness and Mental Health Action) 32 Irish spending on education as a
proportion of GDP is 4.5%, compared to an EU average of 5.1%. This makes us
20thout of 29 named developed countries. (Rights and Justice Work in Ireland)

33 Ireland has one of the worst pupil/ teacher ratios at primary level in the
30nations that make up the Organisation for Economic Co-operation and
Development.(Education at a Glance, OECD report)

34 Twenty-three per cent of Irish people cannot perform basic literacy tasks
like reading a bus timetable. This is the second worst in the industrialised
world. (2001 report from the United Nations development programme)

35 Fourteen per cent of Irish homes for older people lack either a
bathroom/shower, indoor flush toilet or hot water.

(Rights And Justice Work In Ireland)

36 Ofthe E5bn budget surplus generated from 1997 to 1999, 90% went into income
tax cuts, 10%into benefits. (CORI)

37 About 20%of the population lives in relative poverty. (CORI)

38 The number of prisoners has increased by 23% over the last five years, the
second highest increase in the EU. The average European increase was 5%.
(Rightsand Justice Work in Ireland)

39 Between September 2000 and March 2001, prisoners were placed in padded cells
on 270 occasions and deprived of proper sanitary facilities, possessions of any
kind, company and natural light. (The Irish Penal Reform Trust)

40 Seventy-six per cent of people put in padded cells in Irish prisons are
mentally ill. (The Irish Penal Reform Trust)

41 Ireland is one of the most corrupt states in Europe and as corrupt or more
corrupt than Singapore, Chile and Hong Kong. (Transparency International's
corruption perception index)

42 Ireland is more corrupt now than it was in 1998. (Transparency International)

43 Ireland has 219 doctors per 100,000 of the population, compared to 312 in
Portugal, 413 in Norway, 350 in Germany and 395 in Belgium. Ireland has the
second lowest number of doctors per 100,000 in the EU. (United Nations
Development Index 2001)

44 A single person living on the dole is expected to live on E118.82 per week.

(Department of Finance)

45 Dublin motorists move at an average speed of six miles per hour in the
morning rush hour. (Dublin Corporation director of traffic Owen Keegan)

46 Journey time into Dublin city at morning peak hours has increased by 38%
since 1994. (Owen Keegan)

47 Passengers on Irish buses are travelling at about two-thirds the speed of
their counterparts in Europe and America. (Report for Bus Eireann from Simpson
Xavier Consulting)

48 Dublin has a higher murder rate than London. (British Home Office)

49 Breast cancer amongst Irish women is 20% higher than those in other
developedcountries. (Society of Irish Actuaries)

50 Hundreds of Irish women have had their breasts removed unnecessarily due to
lack of facilities in the public health services.

(Report by the Department of Community Health and General Practice at Trinity
College, Dublin)

DadaKopf

Nice article. Do you work for the Tribune? Did you write it?

You should take a read of this, too.

Edit: heyy, check out Monbiot's Garticle today.

daveirl

This post has been deleted.

mike65

Andrew 83 wrote:

There will always been people who will be served by right wing economic policies as they are of direct personal benefit to the people involved/The majority however do not benefit.

Ah right so thats why the roads are full of new and nearly new cars which are larger and posher than in previous eras. Thats why so many ppl take 2-3 "breaks" ie hollidays abroad every year. Thats why private health care policy numbers are have shot up, thats why the governments saving accounts scheme was so successful, etc etc etc.

A very small number are not better off in real terms, many are comparitivly worse off as measured against the top earners. But it CANNOT be denied that more of us are wealthier than we were 10 years ago.
Ask your parents if your too young to know.

Its time The Big Lie which says the majority are worse off was nailed.

And just wait till the property boom wealth rolls over as homes bought for 40,000 years ago are inherited at a value of 400,000 by children who already own thier own homes.

Mike.

AngelofFire

mike65 wrote:

Its time The Big Lie which says the majority are worse off was nailed.

And just wait till the property boom wealth rolls over as homes bought for 40,000 years ago are inherited at a value of 400,000 by children who already own thier own homes.

Mike.

Thats all fine and well for people with parents homes to inherit. .The cost of property is pricing people out of the market, 2 couples working on the average industrial wage cant afford the cost of a 3 bedroom house in Dublin anymore, you need a combined income of 90,000 per annum to be able to afford a shack these days. School Children in disadvantaged areas are being subjected to substandard conditions and lack of proper materials for learning. This is due to lack of funding. Its because of this that children in disadvantaged areas are more likely to have literacy problems when leaving school. 90,000 Children in ireland live in consistent prosperity. Less people are able to afford proper medical care because the medical card eligibility threshold has not been indexed properly with inflation. We have an A&E crisis in this country, waiting lists have increased under this government. Things may have gotten better for a considerable section of the population, but the type of inequalites that exist in this country are unnaccptable and much of it could be rectified by providing a better apparatus of social justice.

mike65

Everything you say is true as far as it goes and has always been true. But it has no relivence as regards a left-right argument, (the government that beggered this country most was the FG/Lab admin of 82-87, the FF gov of 77-81 coming a close second). It is indicitive of a lack of will to spend on capital costs which has been the single biggest failure of the state since independence.

Back to the opening topic

from the times-

GLOOM over the eurozone economy deepened yesterday as a leading international think-tank sharply cut its growth forecast for the 12-nation bloc and issued a powerful call for urgent cuts in interest rates.

In the latest blow to hopes for European economic revival, the Organisation for Economic Co-operation and Development cut its forecast for eurozone growth this year to just 1.2 per cent — down from its previous 1.9 per cent projection.

Giving warning of an “abrupt weakening” in activity and “sagging consumer and business confidence”, the OECD ratcheted up pressure on the European Central Bank to make early and steep cuts in eurozone interest rates.

Jean-Phillippe Cotis, the chief economist at the club of the world’s 30 rich economies, said that action by the ECB to cut rates “significantly” could play an “immediate role” in better management of demand in the eurozone economy.

http://www.oecd.org/document/52/0,2340,en_2649_201185_19726196_1_1_1_1,00.html

above is latest OECD stats, all very small pdf files. Worth a glance to compare and contrast economic fortunes.

Mike

btw regi whats your opinion?

Andrew 83

mike65 wrote:

A very small number are not better off in real terms, many are comparitivly worse off as measured against the top earners. But it CANNOT be denied that more of us are wealthier than we were 10 years ago.
Ask your parents if your too young to know.

Its time The Big Lie which says the majority are worse off was nailed.

Being comparatively worse off can be as bad as eing actually worse off as with the increase in wealth prices go up, it may be harder to keep a decent standard of living with more apparent wealth than it was when you were comparatively better off.

I find it hard to believe we're in such good times when we have more people living in poverty than in any other industrialised country in the world apart from the US (which some politicians seem to be trying to model us on), the third worst paid workers in the pre-enlargement EU fifteen, the second most unequal distribution of wealth in the EU fifteen after Portugal, the lowest state pension in the EU 15, the highest rate of child poverty in the EU, and health spending 30% below the EU average. They're all economic problems before even getting into the more clearly social problems this economic climate has led to.

Right wing politics have done little I can stand up and applaud for this country other than for the rich. The Big Lie is that the market will automatically help people.

Andrew 83

mike65 wrote:

Everything you say is true as far as it goes and has always been true. But it has no relivence as regards a left-right argument, (the government that beggered this country most was the FG/Lab admin of 82-87, the FF gov of 77-81 coming a close second). It is indicitive of a lack of will to spend on capital costs which has been the single biggest failure of the state since independence.

Back to the opening topic

from the times-




http://www.oecd.org/document/52/0,2340,en_2649_201185_19726196_1_1_1_1,00.html

above is latest OECD stats, all very small pdf files. Worth a glance to compare and contrast economic fortunes.

Mike

btw regi whats your opinion?

Those OECD files seem mainly to talk about inflation in each country. Economics aren't all about inflation, the damage policies do to individuals on the wrong end of the spectrum is, I would say, of much greater significance.

Meh

Andrew 83 wrote:

Being comparatively worse off can be as bad as eing actually worse off as with the increase in wealth prices go up, it may be harder to keep a decent standard of living with more apparent wealth than it was when you were comparatively better off.

Incorrect, the absolute poverty line takes inflation into account http://www.cpa.ie/facts_factsheet_measuring.html.

I find it hard to believe we're in such good times when we have more people living in poverty than in any other industrialised country in the world apart from the US

Those figures are relative poverty, which is not the same as consistent (real) poverty. According to the Combat Poverty Agency, consistent poverty in this country fell from 14.5% in 1994 to 5% in 2001. That's a pretty dramatic improvement by any standards.

Right wing politics have done little I can stand up and applaud for this country other than for the rich.

You don't think the lowest unemployment rate in the developed world is something to applaud?

DadaKopf

Meh wrote:

Incorrect, the absolute poverty line takes inflation into account http://www.cpa.ie/facts_factsheet_measuring.html.Those figures are relative poverty, which is not the same as consistent (real) poverty. According to the Combat Poverty Agency, consistent poverty in this country fell from 14.5% in 1994 to 5% in 2001. That's a pretty dramatic improvement by any standards.You don't think the lowest unemployment rate in the developed world is something to applaud?

Conveniently skimmed over the next few lines, though, didn't you?

Combat Poverty Agency wrote:

• In 2001, more than 862,000 people (almost 22% of the population) lived on less than €164 per single person per week
• Relative income poverty levels increased from 15.6% in 1994 to 22% in 2001

The CPA Strategy also said that there has been an increase in the "working poor" in Ireland. Inequality has increased, so has relative poverty. That means more people in Ireland, despite low unemployment, can't afford the necessities of everyday life (from an identified basket of goods) and are becoming more socially marginalised. That's bad, isn't it?

I tend to think the measure of a country's success is how it treats its must vulnerable. It looks as if the Celtic Tiger model is failing on that front. But don't take my word for it.

Meh

DadaKopf wrote:

The CPA Strategy also said that there has been an increase in the "working poor" in Ireland. Inequality has increased, so has relative poverty. That means more people in Ireland, despite low unemployment, can't afford the necessities of everyday life (from an identified basket of goods) and are becoming more socially marginalised.

I think you misread the link. If you can't afford the necessities of everyday life, that's consistent poverty, not relative poverty. Consistent poverty has fallen dramatically in this country over the past decade.

That's bad, isn't it?

Yes, it's terrible, I wish we had the good old days of the 1980s back, when everyone was equally poor.

AngelofFire

Yes, it's terrible, I wish we had the good old days of the 1980s back, when everyone was equally poor.

Interesting, the term 'equally poor' didnt apply to the people with offshore accounts. The tax avoidance agency wasnt good enough for them, so they had to committ tax evasion.

it looks to me as if you`re trying to formulate an argument whereby you`re trying to credit a current apparatus of economic injustice as being the cause of the celtic tiger. As far as i am concerned the poor economic conditions of the late 70s and early to mid 80s cannot make squandering the wealth of celtic tiger in the present day acceptable.

daveirl

This post has been deleted.

Quantum

AngelofFire wrote:

Can that competitive economy that helps our country to ''survive'' not co-exist with concepts of social justice and quality of life rather than attack them. I believe that it can and should.

I agree - and it works exceptionally well in the Ireland of today.

Quantum

Andrew 83 wrote:

I find it hard to believe we're in such good times when we have more people living in poverty than in any other industrialised country in the world apart from the US....
Right wing politics have done little I can stand up and applaud for this country other than for the rich. The Big Lie is that the market will automatically help people.

Centre right wing politics, the form that we have here in government in Ireland, has transformed the lives of the vast majority of people here in Ireland. The fraction in 'so called' poverty is irrelevant due to completely subjective terminology and basically the only section of the community not transformed here are the terminally lazy.

daveirl

This post has been deleted.

Andrew 83

Meh wrote:

Yes, it's terrible, I wish we had the good old days of the 1980s back, when everyone was equally poor.

I hate the idiotic view that to not support today's inequalities equals a desire to return to the days of the past. It's possible to want a better future and not just accept the wrongs of the present. I refuse to accept that all's well in Ireland of today. If you think so fair play, and likewise if you've no problems with the facts I've brought up, again fair play, I just disagree and no level of graphs or statistics on employment or inflation is going to be a more persuasive argument to me than the facts in the article I posted.

daveirl

This post has been deleted.

AngelofFire

The fraction in 'so called' poverty is irrelevant due to completely subjective terminology and basically the only section of the community not transformed here are the terminally lazy.

Yeah the 90,000 children living in poverty are all lazy, so are the people who cant afford to buy a house even though they work 40 hour weeks. I have never seen such a myopic argument in my life. Do you really believe that the state of school bulidings and the fact that many primary school class rooms lack proper learning materials is solely down to the fact that the school children in them are lazy?.

Do you think that its acceptable that the average income of people earning in excess of 1000 per week has increased by 66% since 1995 whilst in the same period earnings of the average industrial worker has only increased by 23% (source ERSI). Are PAYE workers Lazy?

daveirl

This post has been deleted.

AngelofFire

To answer your question, yes I do. Firstly people earning more than 1000 a week still pay PAYE, secondly I see no problem with rewarding the sucessful people in society and finally since the 23% increase in the average has lead to an increased standard of living I have absolutely no problem

.

There isn`t always a correlation between being richer and having worked harder or being more productive secondly people on high income can still be rewarded for success without having to eat into the PAYE sectors share of the national wealth. I dont believe that there is any section of society that played a role in this countrys economic development more than the rest therefore i believe that every one should have a share of the benefits proportionatley.

forginve my use of syntax in the last post, it wasnt the best, i wasn`t trying to link not being able to afford a house with poverty, i was merely stating that the percentage of people not being able to afford a house was unnaccptable given this country`s vast wealth, i was responding to quantums post that the people who didnt benefit from the celtic tiger were lazy.

*the figure of 90,000 children living in poverty comes from the barnardos website

I dont think we have a choice between a society thats equally poor, and a society thats rich but has massive inequality. I believe that the Fruits of this economic boom must be shared proportionatley. We can have a rich country were every aspect of society benefits, be it the health service, the businessmen, the education system or the PAYE worker.

Meh

AngelofFire wrote:

forginve my use of syntax in the last post, it wasnt the best, i wasn`t trying to link not being able to afford a house with poverty, i was merely stating that the percentage of people not being able to afford a house was unnaccptable given this country`s vast wealth

Given that 83% of Irish people own their own homes, (the highest home ownership rate in the world, 23% higher than your beloved Sweden, source), what percentage would you see as "acceptable"?

AngelofFire

Yes but i was talking about being able to afford a home, rather than actually owning a home.