Forum 2006

Competitive Europe - Social Europe: partners or rivals?
Dublin, 1-3 November 2006

Sustainable competitiveness needs social partnership

Abstract by Constantin T. Gurdgiev (antagonist view)

What is sustainable competitiveness?

  • Entrepreneurship: private initiative, creativity, adaptability
  • Policy flexibility: public non initiative, responsive, demand driven and stable (ideologically sound)
  • Access to capital and labour: policy openness
  • Access to trade: market openness
  • Access to education & training: private/public interface, in the short run, private in the long run, analogy of state versus private schools in the US and competition between the two systems
  • Creating culture of entrepreneurship, wealth and innovation
  • Clarity of market signals: profits, prices, wages.

What is social partnership?

  • Ideal: social partnership is a partnership of society (who represents this?) and private sector (who represents it?). Problem: equal? Is the private sector a part of society?
  • Reality: social partnership is a dictate from the political and narrowly focused social interest groups to the private sector. It is a pyramid scheme of soliciting more business funds for social institutions with a selection bias in favour of the welfare maintenance institutions. Effectively, it is another social welfare tax.

Why is social partnership the wrong way of addressing the need for sustainable competitiveness?

  • Entrepreneurship breaks
  • Policy ossification
  • Reduced openness to trade, capital and labour mobility
  • Reduced access to education and reduced quality of education of wealth, and preservation of the status-quo power structure
  • Lack of transparency of market signals: prices, wages, profits.

Why can't we learn from our own history (fascism, statism)?

  • Interest groups
  • Culture of technocracy
  • Culture of state reliance, constrained by fiscal insolvency
  • Lack of transparency: muddy waters are the preferred habitat for political and social elites of Europe

Alternative: legal and legislative approach

  • Legislate and regulate companies directly to produce the desired social outcomes
  • Create a transparent accountable system of permits and prohibitions, not an amorphous, undefined ‘do good’ approach
  • Allow firms to focus on their areas of expertise: extracting profit by satisfying demand
  • Allow the state to focus on its mandate: to deliver social benefits of economic development
  • Allow NGOs' honesty to operate without hidden power levers.
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