I repost this from Social Europe (which is a site I recommend) because I think it links to a book many readers here will find interesting (and it is free):
Then US President Barack Obama said inequality was the defining issue of our time at the end of 2013. Almost half a decade later we unfortunately have to conclude that it still is one of the defining issues of our time and that we have seen the beginning of a political feedback loop. The unresolved inequality challenges amongst other things contributed to the the Brexit vote in the United Kingdom and the election of Donald Trump in the United States. It was not just the persistent patterns of huge inequalities between different parts of society but also the growing frustration that political systems have become unresponsive to the concerns of people suffering from the current state of affairs. When analysing the challenge of right-wing populism it is crucial not to do so at a superficial level only trying to dissect the communication techniques and understanding the current electoral appeal of populists — as important as this is. It is at least equally important to try to understand the socio-economic and political conditions that enabled those communication techniques to develop electoral appeal. Inequality is a huge part of this background story.
Inequality will be an important public policy issue for years to come and we hope this dossier will promote understanding of some of the underlying issues and inform the development of effective policy solutions.For this reason, Social Europe teamed up again with the Europe Office of the Friedrich-Ebert-Stiftung and the Institute of Economic and Social Research of the Hans Böckler Stiftung in a project investigating various aspects of the inequality issue with a specific perspective on the European dimension of inequality. Over the course of several months we collected fifteen contributions by globally leading experts to help getting a grip on what inequality means today. These contributions form the three parts of this dossier starting with a general section on understanding inequality and related issues such as globalisation, migration and populism followed by chapters on inequality in Europe and a final part investigating the inequality dimension in specific policy areas.
Inequality will be an important public policy issue for years to come and we hope this dossier will promote understanding of some of the underlying issues and inform the development of effective policy solutions.
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Obviously there are lots of factors contributing towards inequality in Europe. The EU is obviously highly topical and most of the focus is on the economic advantages through trade. I voted for Brexit, on balance, because the EU and the single currency is inextricably linked and reading the work of Joesph Stiglitz (who I believe to be the most influential modern day economist) it really hammered home the inequality the single currency has created in Southern Europe in particular. The single currency isn’t going away and yet so many support EU as an entity and seem to ignore or are unaware of the inequality it’s framework causes.
So you voted using an utterly irrelevant criteria in the context of the question being asked?
Says it all really
Along with the rest of 52% of the electorate who thought jumping off a cliff into the dark was a good idea 🙂
What does it say exactly? We in Britain vote in favour because its better for us economically but to hell with the consequences for Southern Europe?. I am sure you have read Stiglitz, it is very conclusive isn’t it?…why support an entity which contributes to so much poverty and hardship?
But do we have more chance of protecting Southern Europe by being in or out?
There is only one answer to that
‘But do we have more chance of protecting Southern Europe by being in or out?
There is only one answer to that’
As you would expect, Richard, I have to steam in here and profoundly disagree. The root cause of inequality is monetarism, deregulation and the tolerance of rentier activity. The EU practices all three, and to think that there is a platonic EU existing behind the real one is to indulge in the worst excesses of idealistic and abstract retreat.
The problem with the referendum was the barrage of lies and illiteracy from BOTH sides. There IS another answer:
leave this ghastly neo-liberal shambles and show what a currency issuing government can actually do -that would then show the Eurozone countries that they are trapped and reduced to vassal states of the ECB like local councils, some of whom are being starved of cash.
The fantasy of some on the Left is that there is some sort of ‘social Europe’ that functions in any way at all.
1) Look what Germany did in 2004 onwards: it instituted horrendous welfare reforms (the Hartz reforms) that started the process of internal devaluation to intensify their mercantilist programme.
2) greek Youth unemployment: 39.5 percent
3) Spanish unemployment: 38.7% ( only reduce from 51% because they were ‘allowed’ to increase the deficit above the loony 3% rule).
4) Italian youth unemployment: 35.1%
5) Greek health crisis unabated.
DC has a good point -but it’s not the single currency per se (America has a single currency over a massive, culturally diverse are) it’s the reduction of countries to council status that is the issue and the lack of a social European policy that coordinates and balances out the economic weaknesses and strengths to produce a decent outcome. With the ECB obsessed with austerity and using ineffective monetarist tools none of the deeper issues are addressed while a banking and financialised elite carry on siphoning upwards. Witness the further and ongoing increase of inequality on Germany.
The answer, in my view is this: Get out and use out status as a sovereign currency issuer to put the brakes on austerity and show how a well focused deficit spend, re-nationalisation, job-creation, infrastructure and housing program can transform the landscape – this would then show the Eurozone countries what can be done and what is workable and could get a real social Europe going.
The worst outcome is leaving and carrying on the same.
The Left is making a big mistake wasting its breath on the EU issue -the focus needs to be on the change in the economic system-ditch monetarism, stamp on rentier activity, control unproductive capital flows and for heaven’s sake lift the boulders of stress off our people.
To be honest I’m heartily sick of the constant Cassndra-ing about how Brexit will do this or that: the balls-up and tragedy is with us NOW -the wasted lives, the environmental disaster, the 30,000 unnecessary deaths, the ghastly stress and deteriorating mental health, the 4 million children living in relative poverty.
The great danger now is that the Left will split over Brexit and allow the Neo-liberal wagon to creak on further – this is a real danger and a total waste of energy chundering on about it.
If the left is anything is is internationalist
Are we to leave those unemployed to their fate?
Why?
The EU isn’t Internationalist in the Left sense-it might have been prior to the rise of Delours and monetarism but not for the last 40 years. It became supra-national only in the sense of global capital, not social.
We can show more solidarity with the unemployed around Europe by giving the EU the finger and showing Europe what sovereign Governments can do and thereby giving them succour and support and forming meaningful alliances with the left in Europe.
It’s great opportunity but I fear the Left will divide because of an irrational sentimentality to some platonic EU that doesn’t actually exist. If the left divided over the EU you can be sure that neo-liberals will use it in their favour.
Simon Cohen says:
January 11 2018 at 3:52 pm
“[….]The root cause of inequality is monetarism, deregulation and the tolerance of rentier activity. The EU practices all three, and to think that there is a platonic EU existing behind the real one is to indulge in the worst excesses of idealistic and abstract retreat.
The problem with the referendum was the barrage of lies and illiteracy from BOTH sides. There IS another answer:
leave this ghastly neo-liberal shambles and show what a currency issuing government can actually do -that would then show the Eurozone countries that they are trapped and reduced to vassal states of the ECB like local councils, some of whom are being starved of cash.”
I do so love to hear Brexit supporters so strenuously making the case for Scottish Independence.
Get it right Andy it’s ‘LEXIT’ not Brexit.’
Simon Cohen says:
January 11 2018 at 8:44 pm
“Get it right Andy it’s ‘LEXIT’ not Brexit.’”
Is someone making a rational case for ‘LEXIT’?
They’re being very quiet about it.
‘Is someone making a rational case for ‘LEXIT’?
They’re being very quiet about it.’
That really sums up the problem – the real Left argument for leaving was given close to zero air space-as a result I had to abstain because I didn’t want to associate myself with the hideous Brexit campaign. here’s the ‘movie’:
http://www.youtube.com/watch?v=Z0kuJhkMLWs
As the saying goes, better to be inside the tent pissing out than outside the tent pissing in…
It’s quite possible to deplore the way that the Southern European Eurozone countries have suffered whilst realising that leaving won’t help them, but will certainly hurt us.
Mariner -leaving COULD help them- we could lead the way by being the first country in Europe to break the market fundamentalist mould. There are EU laws that make it difficult to re-nationalise and for state aid to be used if it is deemed to affect market forces:
‘Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission — and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.
For many parts of the UK, the challenges of industrial decline remain starkly present — entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy’ (www.newstatesman.com/politics/brexit/2017/07/lexit-eu-neoliberal-project-so-lets-do-something-different-when-we-leave-it)
Kate Hoey has also pointed out how EU membership could inhibit re-nationalisation and rolling back the absurd level of privatisation of public goods ( the UK alone can clain 40% of the privatisations in the EU):
‘Since 1991 the EU has introduced three railway packages, which have imposed numerous legal requirements on the member states. A fourth package is on its way — which will further open up domestic passenger services to competition. All of these laws limit a UK Government’s freedom of action and will bind the hands of a future Labour Government. ‘ (www.newstatesman.com/politics/2015/08/renationalise-railways-what-no-one-will-tell-you-we-cant-while-were-eu).
The only pissing in the tent is the ECB and EU pissing on its own people from on high.
My point is virtually non of the debate surrounding the EU whether instigated by you, by politicians by Gina Miller or whoever ever focuses on the inequality in Europe caused by the single currency. As a result most people are blissfully unaware.
And you are ignoring that our leaving will make it worse
The single currency isn’t the cause in itself but it exacerbates the situation -in a monetarist and austerity obsessed EU that dances to arbitrary and irrelevant deficit rules- it forces countries into a vicious circle of ‘internal devaluation’ trying to earn Euros whilst lowering aggregate demand within the country – it is utter nonsense ( unless you work for financial service).
“The single currency isn’t the cause in itself”
Simon
Sorry for the late reply but for God’s sake stop being arbitrary and familiarise yourself with concept of Optimal Currency Areas as well as the restrictions the Eurozone imposes on member states.
The have no monetary sovereignty and no central bank of their own – hence the sovereign debt crises. In the absence of their own exchange rates they are forced into an idiotically extreme trade imbalance with Germany while Germany does everything it can to reinforce that imbalance rather than alleviate it.
In being subject to the monetary union they lose monetary sovereignty and lose the balancing effect of having their own exchange rate – but they are expected to issue gilts at the national level! Which is sort of like: Oh sorry, you can’t issue your own currency, you can’t set your own interest rates but as far as the bond markets are concerned you’re an “independent” nation. That inconsistency is just one of the daft features of this completely dysfunctional currency arrangement.
As for German hegemony some have suggested that the euro currency has finished the job that Hitler started. That’s an insensitive exaggeration but I can see where they are coming from.
I’m perfectly familiar with the concept of Optimal Currency areas and have posted before on this as you should know from my other posts, so please don’t be condescending and fatuous.
The single currency COULD have worked more effectively with a properly federal arrangement as Mitchell has put it:
‘The ECB should not become a fiscal agent. Rather, if the Eurozone elites cannot implement (which they cannot) a full federal treasury function then it should disband the monetary union in an orderly way.’
A full federal treasury function could have been possible which is why I say the single currency is not inherently the problem bit IS a huge problem given the policy settings.
Marco, please be cognisant of the posting history-before you accuse someone of being ignorant of things they have clearly posted about before and you have occasionally acknowledged. We have enough people leaping around with pontificatory rectitude in economics!
I never really agreed with the creation of the euro – it was a bridge too far as they say and went too far beyond the original treaty framework. But to say that the euro and the euro zone has caused inequality to rise as the only causal factor is stretching things a bit for me.
We have friends in both France and Italy and they told us that from the onset of the Euro, prices started to rise.
It was not the EU putting up the prices but the markets themselves – the private actors in this whole affair. It underlines the idea that the Euro may not have been such a good idea after all but is the same as the idea of being able to move freely in the Euro zone that also got abused by profit seeking companies eager to reduce wage bills. It was not just about creating a flexible supply of labour but was also used to arbitrage down existing labour’s wages.
It is not just the EU or the Euro therefore; it is human behaviour in the markets that were created that also has to be taken into account and questioned.
The other issue is that the EU as an entity can be changed. It just falls back to the old chestnut that we are not talking about this thing called the EU; the EU is made up of member states who all think the same about these issues.
Change has to start to take place in each sovereign nation and then (and only then) will we see change in the EU.
Everything can be changed
It does not even start with the member states
It starts with ideas
And then everything is possible
But it helps if you’ve got an audience and membership does that
Surely the inequality attributed to the euro single currency zone is not intrinsic to the single currency but only to the way it is operated. Any successful currency must allow redistribution. In the UK the rich South transfers resources to the North and other disadvantaged regions. The managers of the Eurozone don’t do that and require countries to adhere to northern standards of what they imagine constitutes “prudent economics”. As long as countries like Germany are indifferent to the very different conditions in the southern European countries then the problems they have will persist. But it’s not the euro that is the problem, just the way it’s managed. Therefore I fear Dc was mistaken in voting the way he or she did.
The problem is Germany thinks everyone can run surpluses simultaneously
Which is as logical as Gove thinking everyone can be above average
“Surely the inequality attributed to the euro single currency zone is not intrinsic to the single currency but only to the way it is operated.”
I think that has to be right. It has to do with the ECB producing a centralised currency, but without there being a balancing centralised tax authority. (I think.) Mind you the tax authority would have to do its job or you’d end up with the same result anyway cf the economy of the UK.
If anyone has any firm beliefs on Europe then I suggest reading Joesph Stiglitz – the Euro: and its threat to Europe.,, then we might not believe we are “jumping off the edge of a cliff”. Here is a very short interview with him. http://blogs.lse.ac.uk/politicsandpolicy/interview-with-joseph-stiglitz/. He states “the costs of keeping the Eurozone together probably exceeds the cost of breaking it up”…a loose union to promote peace and trade is a great idea. That is not what the EU is and it won’t be turned into something that works by us trying to reform from within. As well as Joseph Stiglitz, Roger Bootle’s “Why the EU isn’t working and what could take its place” is also very good.
I am familiar with the arguments
But you do not seem to have noticed we are not in the Euro and no one is asking that we should be
So all you are saying is utterly irrelevant
Bootle is an IEA sort of economist-I wouldn’t trust him.