The objectives of the European Union, spelt out in documents and treaties, have always stressed the importance of giving citizens a unique blend of economic well-being, social cohesion and a high overall quality of life. The social market model that emerged from these objectives fashioned a European culture that tried to translate the abstract concepts of citizenship, equity and affluence into practical realities.
In its pursuance of sensible and responsible monetary and fiscal programmes designed to operate along with public-funded welfare states, the EU tried to create a rare blend of economic and social policies. The dimensions carved out of this policy were based on the enforcement of a work ethic encapsulated within the Community Charter of Fundamental Social Rights of Workers.
What is disconcerting to many is that this process of globalisation is not leading to a better life
The shared values emanating from this charter, form the basis of the European social model for it underpins the conviction that economic growth and social progress must go hand in hand. In other words the progress envisaged by the EU was to chart new waters and harness its resources but at the same provide solid anchorage to enable the EU citizens cope with the ravages which tend to occur every now and then in the open sea. Unlike the American dream the vision of the EU social model was not based on the unfettered forces of the market.
Whether the principles underpinning this social model have been achieved is of course a moot point. The imposition of restraint on public spending and wages, the deregulation of the market imposed by the EU Commission on the member states may have derailed some of the objectives set by this model. These policies might be based on the conventional wisdom that advanced industrial societies have to respond to the challenges posed by global integration and technological change by limiting government spending and at same time liberalising the market.
What is disconcerting to many is that this process of globalisation is not leading to a better life. There seems to be no evidence that this globalised economy is contributing to a fairer share of wealth and resources. Evidence may indeed point a wider gap not only between the rich and poor countries but even between the core and peripheral workers.
What we have lately been witnessing in the European labour market is a spiral increase in unemployment especially among the youth, an expanding low wage sector and insecure forms of employment. The socio-economic roots of the grievances emanating from these inadequacies and articulated in cultural terms may have been, according to a chorus of commentators and social analysts, the cause of the Brexit vote and the rise of populist movements.
This behaviour by the electorate is perceived by these commentators as a silent protest meant to point out the ambiguities and contradictions which are distorting the ideal vision of social cohesion.
Reconciling high social standards with the capacity to compete in the world markets has proved to be highly complex and elusive to the EU. What may inhibit such reconciliation is the tendency by economic commentators and advocates of the free market to look for culprits rather than focus on the solution and on opportunities for economic and social cohesion.
The main culprits that are generally identified by the business community are a bloated public sector which is claimed crowds out public investment and stifles individual initiative, and the rigidities in the labour market, such as the mandatory cost of living allowance, which might jeopardise the competitiveness of the Maltese economy.
A militant trade union movement which can cause turbulences in employment relations can also be seen as a source of distortion of the values of a liberalised market.
One of the demerits of this argument is the tone of scapegoating which it evokes. Markets and business firms and enterprise are essential to the effective functioning of all modern economies, but they have to function within the parameters of sensible regulations laid down by the state and monitored via an effective system of social dialogue.
There is logic in the argument that trade unions should strive to provide the foundation for social cohesion and adapt to change. By the same token employers should redefine corporate social responsibility by directing it towards the human aspect of work rather than conforming to the implicit or explicit rules of the shareholder model. Companies have to acknowledge that besides the economic aspect of profit there is also a social dimension to their activities.
Adopting a stakeholder model operating in parallel with that of the shareholder may be more effective in finding the right balance between the different interests. In the stakeholder model the employees rather than simply being factors of production may become more active participants in the work process and much more highly integrated in the administrative set up of the enterprise.
A European social model designed on such humanitarian principles rather than on the exigencies of expediency and pragmatism should be an important point of reference to the globalisation process. The building of a prosperous and peaceful Europe after the devastations of war can be defined as the fulfillment of a dream.
In the midst of the entanglements instigated by the new international order we should keep on dreaming that Europe will ultimately make the dream of its social model become a reality.