Mitt Blames Europe for Broken Economy

By John Buell

An essential talking point of the Mitt Romney campaign is that Barack Obama is a socialist. His favorite model is socialist Europe. Romney then goes on to add that Europe does not work even in Europe.

Romney is right about one thing. Economic policy in Europe is failing, but not for the reason he cites. Western Europe has never been socialist. With the partial exception of the British Labour Party’s attempt to own and control “the commanding heights,” of the British economy, iron, coal, and steel, in the immediate post World War II years, European economies have relied on private corporations and markets. From the fifties on Germany and France especially worked to expand trade and markets within Europe.

Social democracy did, however, have a major presence in Europe. Unfortunately for most Americans this term is indistinguishable from socialism. Yet the distinction is important.

Europeans sought to draw on the dynamism of the free market while smoothing its extreme oscillations by providing generous safety nets for the most vulnerable and for those who failed in the economic turbulence. Lost sight of completely today is the quarter century of economic growth in Western Europe that was far more robust and more equitably distributed than the gains of the post Reagan and Thatcher years.

Not only were European states not socialist, even the social democratic experiments differed among themselves in important ways. The notorious limitations on firing workers, often cited as a cause of unemployment woes in France and Italy by the US press, are hardly universal in Europe. Denmark, for instance, accepts considerable labor market displacement but cushions unemployment with extensive aid and retraining programs.

In a longer term perspective, social democratic parties and their adherents had done to little to mobilize more broadly — and across borders — not only for fair distribution of rewards and full employment policies but for broader changes in workplace organization so that ordinary workers could have a voice in product choice, financing, and long term planning.

Such gains could have been achieved without centralized state control of enterprise or over reliance on taxation to achieve economic justice.

They would have constituted a renewal of the social democratic vision. In addition, most European social democratic parties were slow in grasping the importance of environmental issues, and slow to address ethnic tensions, thus opening up fizzures on the Left that would play especially large in political systems that provide various forms of proportional representation. (European social democracies grew out of initiatives of separate national working class elements.)

Today, most social democratic parties compete with conservative over how best to achieve austerity, thereby plunging Europe deeper into recession. With the private sector badly leveraged, Europe needs the fiscal stimulus that an ambitious green infrastructure program financed by its larger economies might provide.

The failure of Europe to live up to the social democratic vision rather than that vision itself underlies Europe’s crisis. In this sense, Mitt Romney and European social democrats have more in common than either would like to acknowledge.

John Buell lives in Southwest Harbor, Maine, and writes regularly on labor and environmental issues. Email jbuell@acadia.net.

From The Progressive Populist, March 1, 2012