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Europe's Promise

Why the European Way is the Best Hope in an Insecure Age

UNIVERSITY OF CALIFORNIA PRESS

THE RISE OF THE EUROPEAN WAY

"WELCOME TO PARIS, THE LOCAL TIME IS ..."

Arriving at Terminal One of Paris's Charles de Gaulle International Airport, one is struck immediately by a distinctly European mise-en-scène. As in a modern-day Tower of Babel, the languages of the world spike the air with an incessant buzz. The smooth nasality of French intermingles with the guttural "ichs" and "achs" of Dutch and German speakers. On the periphery are Italians speaking in a lilting aria, with some halting English tossed in. Nearby stands a fashionable Polish couple in shiny black leather, sipping espresso, and Spanish speakers (probably from Spain, but maybe Argentina or Chile) are browsing the crowded news racks. Clumps of Asian businessmen, looking well dressed and sleep deprived, are sniffing for bargains in the airport shops. In a nearby bar, with a blaring TV tuned to a football (that is, soccer) match, a knot of Russian businessmen elbows for space near the bartender. Ebony Africans saunter by in colorful traditional dress or business attire or both, reminders of Europe's colonial past (eons ago or not that long ago, depending on who is doing the reckoning). There are clusters of men wearing Muslim head wraps or Hindu turbans, women whose saris and burqas flow to the floor, veils covering attentive female eyes and obscuring the ginger skin and wary faces of the newest Europeans. Several dialects and accents of English punctuate the cacophony, including one from a good ol' American boy with a Texas drawl. And Euro-accented pop disco blares from an unseen speaker, the whole screaming effect sounding like a postmodern version of a Wagnerian hip-hop opera.

Paris and other European cities from A to Z—Amsterdam, Barcelona, Berlin, Brussels, Budapest, Frankfurt, Geneva, London, Kraków, Madrid, Oslo, Prague, Rome, Stockholm, Vienna, Zagreb, Zurich—long have formed some of the most important crossroads of the world, historical capitals of commerce with records of trade dating back to ancient times. It is a tribute to their durability and that of their people that these old, old cities have not only survived but thrived, grown, and modernized. In fact, Business Week's ranking of "the World's Best Places to Live 2008" listed thirteen of its top twenty cities as European (the highest U.S. city was Honolulu, in twenty-eighth place). Today, Europe has about thirty cities with populations greater than a million people, compared with only ten in the United States (and more than a hundred in China).

Despite its ancient roots, much of what we know today as modern Europe arose only sixty years ago from the ashes of the most destructive war humans had ever known. Tens of millions of people died during World War II, most of them civilians, and entire cities were reduced to rubble. Following the annihilation of two world wars within the span of thirty years, Winston Churchill and others began calling in 1946 for a "United States of Europe." In the incubation period of the postwar Pax Americana, an entirely new Europe began to emerge, one less founded on the militarization of economies. It was as if the horror of the bombs and concentration camps had wiped much of the historical slate clean, leaving a tabula rasa onto which Europe could redraw itself, influenced greatly by the American ideal.

Postwar Europe embarked on a series of treaties that, over the next five decades, remade the European continent and, by extension, the world. In 1949 the Council of Europe was established as the first pan-continental organization to try to reassemble the jigsaw puzzle of Europe from the pieces into which it had been smashed. Guided by the vision of French political leaders Jean Monnet and Robert Schuman and German leader Konrad Adenauer (three of the fathers of modernday Europe), it was followed, in 1951, by the formation of the European Coal and Steel Community, whose six member countries agreed to share control of their coal and steel industries; notably, two of its members were the formerly warring nations of France and West Germany. Monnet's strategy was simple yet brilliant: since coal and steel were the principal resources for waging war, pooling these resources into a regional network rendered hostilities between the signatories much more difficult. It also avoided creating any grand blueprint for Europe that might fail, opting instead for a series of smaller-scale, concrete proposals with practical outcomes which would serve as a gradualist vehicle for engaging the former combatants. The European Coal and Steel Community was the auspicious start of a successful strategy that Europe would employ many times over the next six decades, using incremental steps of engagement to foster multilateralism and consensus building between nations. The Community's founders declared it "a first step in the federation of Europe," and the Treaty of Rome in 1957 extended this strategic pathway via the creation of the European Economic Community, with six original member states: West Germany, France, Italy, Belgium, the Netherlands, and Luxembourg.

In 1973 the European Economic Community was enlarged to include Denmark, Ireland, and the United Kingdom. Greece, Spain, and Portugal joined in the 1980s. The first direct democratic elections of members of a European Parliament were held in 1979, the first pan-European elections ever to be held (as well as the first international elections of this magnitude). In November 1993 the Maastricht Treaty went into effect among the European Community nations, launching the supranational body known today as the European Union. Austria, Sweden, and Finland joined in 1995, and in 2004 the European Union saw its biggest single enlargement when ten new countries, most of them former communist states in central and eastern Europe, joined the union. Three years later, two more eastern European nations joined, bringing the number of member nations to its current level of twenty-seven and reaching a geographic conclusion to the formal effort to reunite western Europe with the east, this time not as conquerors but as hopeful partners in peace and prosperity.

Today, the terms Europe and European Union are nearly but not exactly synonymous, since Switzerland, Norway, and Iceland are part of Europe, both historically and culturally, and participate in numerous treaties and pan-European organizations, but so far have declined to join the European Union. Many of the small Balkan countries—Croatia, Serbia, Bosnia, Kosovo, and others—are part of Europe and hope to join their fellow Balkan country Greece as members of the European Union sometime within the next five to ten years. Beyond those borders, definitions of what is considered "Europe" begin to diverge into various and sometimes heated opinions. Some consider Ukraine, Belarus, Turkey, Moldova, and even eastern Russia to be part of Europe, though few of these nations—possibly none of them—will become member nations in the European Union anytime soon.

So the current twenty-seven-member configuration of the European Union, populated by half a billion people, is only a few years old, and the founding of the union itself is less than twenty years away from its Big Bang. The first modest attempt at forging a European "community" from former combatants is a mere sixty years out of the cradle, having arisen from the volcano of the most devastating conflict, followed by the ice age of Soviet communism, which covered half of Europe and froze its development. Europe had to decide if it was to go capitalist or communist, and it took decades to cut one cord and grasp the other. But finally, with the help of its powerful friend, Uncle Sam, that course has been set.

"The E.U. is riding high," says Professor Andrew Moravcsik, director of the European Union Program at Princeton University. "Over the past decade, Europe has completed its single market, eliminated border formalities, launched the Euro, and strengthened foreign policy coordination." Professor Charles Kupchan of the U.S. Council on Foreign Relations has pointed out that it took roughly a hundred years after its founding for the United States to congeal and nurture a strong identity that transcended state and local loyalties and histories. Given that time frame, Europe—whatever it is becoming, whether an eventual single nation or a more unified superagency—appears to be ahead of schedule. Europe is united—politically, economically, and, increasingly, culturally—in a way it has not been since the Roman Empire, and a distinctive "European way" has become discernible.

Amidst all the drama of today's headlines, it is easy to lose sight of how significant a tiding this is. The European Union is an entirely new species of human organization, the likes of which the world has never seen. It marks a new evolutionary stage in supranational development in the way it links and closely integrates entire regions of nation-states economically and politically, even as it allows the nations within that region to preserve most of their national sovereignty and culture. As the world attempts to forge multinational agreements among dozens of nations over pressing matters like financial re-regulation, economic integration, global warming, nuclear armaments, geopolitical tensions, and more, Europe's long experience in fostering trust and engagement among diverse players via small, concrete steps that nurture a consensus will be invaluable.

THE EUROPEAN MODEL OF SOCIAL CAPITALISM EMERGES

Europe will not be conjured up in a stroke, nor by an overall design. It will be attained by concrete achievements generating an active community of interest.

Jean Monnet, father of modern-day Europe

A compromise is the art of dividing a cake in such a way that everyone believes he has the biggest piece.

Ludwig Erhard, German economist and chancellor, 1963-66

Parallel to the ebbs and flows of these political peregrinations, the shattered nations of postwar Europe engaged in deep bouts of soul-searching. With its people and major cities devastated, the antagonist Germany was ready to beat its swords into plowshares. In the mid-1940s a group of economists based in Freiburg and Cologne, led by Walter Eucken, Alfred Muller-Armack, and Ludwig Erhard, proposed a new type of capitalist blueprint. They criticized the inefficiencies of both U.S.-style laissez-faire "free competition capitalism" and communist state command economies, and devised a third way they called the "social market economy." The social market economy was founded on the principles of both pursuing a free market and serving humanity. This set the nations of Europe in motion on a decades-long journey of economic restructuring, reducing military budgets, increased social spending, and maturing of their political democracies, led initially by conservative leaders such as Winston Churchill, Monnet, Adenauer, and Schuman, joining with leftist leaders like Italy's Altiero Spinelli and Belgium's Paul-Henri Spaak—the founders of modern-day Europe.

Just as astounding as Europe's postwar economic rise was its accomplishment of all this while deepening its values of fairness, equality, and solidarity. Unlike in China today, where an impressive economic rise has nonetheless left the vast majority of people poor and the gap in inequality growing, and unlike in America, where a more hyperdrive, deregulated capitalism has resulted in rising inequality, a lack of health care for millions, retirement insecurity, and unaffordable higher education, the European economic engine has been harnessed to create wealth that has been broadly shared. These values first were fostered in the late nineteenth century by German leader Otto von Bismarck and others who, trying to ward off the growing influence of trade unions and calls for communist revolution, granted concessions and forged the beginnings of social democracy. But after the horror and trauma of World War II, European recovery and redevelopment could have taken any of several disastrous turns; following World War I, its redevelopment had teetered and finally plunged into fascism, national socialism, darkness, and eventually another catastrophic war. But in the aftermath of World War II, a miracle happened. The various western European nations embarked on a journey together that has led to the most egalitarian and democratic societies the modern world has ever seen, all the while producing robust capitalist economies with competitive businesses and a productive workforce.

Over the decades, Europe's political and economic integration has grown steadily, increasing people's personal wealth and security year after year (though always subject to the recurring ups and downs of the economic cycle). At the same time it has made fair and more equal distribution of that wealth a hallmark of its raison d'être. To an American, looking at the comprehensive and universal nature of the supports enjoyed by Europeans is truly a strange wonder to behold. Europeans, on average, are enjoying the highest of living standards and the most economic security, with health care for all, paid parental leave (following the birth of a child), affordable child care, monthly kiddie stipends, paid sick leave, free or inexpensive university education, ample retirement security, supportive elderly care, generous unemployment compensation, vocational training, efficient mass transportation, affordable housing, and more. They have an average of five weeks of paid vacation (compared with two for Americans) and a shorter work week, plus a plethora of holidays thrown in. In some European countries, workers on average work a full day less per week than Americans do, yet enjoy the same standard of living.

Instead of figuring out an American version of these comprehensive supports for individuals and families, U.S. critics and Euroskeptics have dismissed Europe's way as a "welfare state" and "creeping socialism." But as we will see in chapter 4, Europe can be more accurately described as a "workfare support state" rather than a welfare state. (European-style workfare should not be confused with the stigmatized American workfare; it has a different meaning from that in the United States and is grounded in a different philosophy. American workfare is targeted exclusively at the poor and government welfare recipients, making it politically vulnerable. But Europe's workfare support system is for everybody—middle class, rich, poor; its application is universal.) It is part of the overall capitalist matrix in which Europe's powerful economic engine produces the wealth needed to underwrite its comprehensive workfare supports, which in turn maintain a healthy and productive workforce that keeps the economy humming, like a well-tuned Swiss clock.

In short, Europe's workfare system has been grossly mischaracterized by Americans in thrall to a fundamentalist free market ideology. U.S. politicians are known for invoking the importance of "family values" and a "work hard, get ahead" creed. Indeed, the United States is known as the inventor of the middle class, the attractive ideal that a good life is within reach for the vast majority of people. But if America invented the middle class, Europeans have taken that good idea and run with it one giant step further. They have figured out how to set the middle class on a more solid and secure footing and put some meat on the bones of their family values. They also have fewer poor people; indeed, "old Europe" shows more economic mobility and more poor people joining the middle class than does the American "land of opportunity," completely turning convention on its head. Europeans have constructed their system so as to support families better and to minimize the personal risk for individuals in an age of globalized capitalism that has brought increasing economic insecurity.

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Excerpted from Europe's Promise by Steven Hill. Copyright © 2010 Steven Hill. Excerpted by permission of UNIVERSITY OF CALIFORNIA PRESS.
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