Growth is based on education, skills and regional politics – Part I

February 25, 2021
Iveta Radičová

In this two part series for JMCoE Prof. PhDr. Iveta Radičová, PhD, former Slovak Prime Minister and professor of sociology at Bratislava International School for Liberal Arts discusses the challenges the European Union and its member states are currently facing. In this first segment of the series Radičová identifies key issues that according to her are the biggest threats to the core tenets of liberal democracy in the EU. In an upcoming sequel Radičová will outline possible solutions to the aformentioned challenges by examing the deliberative potential of e-government, the importance of multilevel governance and the crucial role of education.

What yould be done and how should it be done?

The way of thinking on a future EU is based on two dimensions: what should be done, how it should be done. I would like to focus on this topic concerning the „core“ countries of the EU and the others based on major challenges and drivers of the EU. On a content dimesion this means specifically–what should be changed and why with emphasis on the core values of liberal democracy.

Today, globalization and the rapid movement of people are disrupting communities, technological change is leading to workers’ replacement, inequalities are growing, and family structures are weakening. The foundations of liberal democracy are experiencing an earthquake. Security is becoming a priority over individual freedom as a result of terrorism. The impact of the internet producing parallel virtual reality in addition to social reality can be compared to changes after the invention of script or the letterpress.

Socio-economic inequalities are growing and are becoming unsustainable. The greatest challenge, therefore, is to combat inequalities that citizens experience in law enforcement and in their socio-economic status. Negative phenomena such as tax evasion, tax avoidance and corruption create unfair social disparities and closed castes. In the light of aforementioned, equality of opportunities does not work and both social mobility and advancement on the social ladder are almost impossible. Therefore, powerlessness and hopelessness in relation to social status is increasing. According to the World Economic Forum, only 20% of citizens in developed democracies believe that work can bring wealth or lift people out of poverty.

In addition to socio-economic problems and blocked social mobility, the risks associated with climate change and the environment are increasing. Extreme weather is of greatest concern and environmental policies are failing. On December 12, 2019, the EU summit reached an agreement on a common approach to reducing emissions by 2050, provided that the countries follow the agreement for the next 40 years.

The inability of political leaders to find binding collective solutions to global problems reinforces the shift towards state-centralist policies with a tendency to ‘take over control’. After a period of globalization, we are moving into a period of divergence. Geopolitical and geo-economic tensions pose the strongest global threats. The problem of finding solutions to issues like environmental protection, uncontrolled migration or ethical challenges of the 4th Industrial Revolution, as well as data fraud, cyber-attacks, false reports, identity theft, loss of privacy, government and corporate access to personal data and last but not least economic slowdown and global debt burden growth of 225% of GDP, generate new social upheaval of today.

The conflict between a highly globalized economy and social cohesion is crucial. There are two types of discrepancy: identity discrepancy (mainly concerning nationality, ethnicity or religion) and income discrepancy (mainly concerning the social stratum). Let us note that the contradiction of income results from labour market conflicts: on the one hand, the market directly excludes participation in the role of a worker, thus the market encourages integration, but only in an uncertain way. The harrowing exclusion and insecure integration multiplies the feeling of helplessness. Populists draw on both of these contradictions and point to the culprits, who are then easy targets of people’s anger. In Slovakia, up to 71% of citizens (Reuters Institute) are open to such populism.

In addition to the problems and conflicts mentioned above, we can now observe a conflict and growing discrepancy between power and politics. This conflict or discrepancy makes it impossible to exercise the right of equality before the law, since there is a contradiction between the ability to do something and the capability to decide what to do. The right to set dividing line between legal and illegal, permitted and prohibited, legal and criminal, tolerated and intolerable coercion are core issues in power struggles. Ownership of such right is in fact the essence of power, while the capacity to apply it and make it binding on others is a defining feature of domination. Power detached from politics is a breeding ground for the failure of the state as an institution to guarantee justice, including social justice.

Uncertainty, helplessness, hopelessness, and anger result in the rise of “anger politicians” who are giving way to the wrath of the excluded citizens. Therefore, changes brought by globalization, geopolitics, migration, terrorism, digitalization and inequalities put pressure on the fundamental principles of liberal democracy. Postcommunist countries have transformed their militarized, over industrialized and state-dominated systems into service-oriented market economies based on private ownership and integrated into global commercial networks.

Has the states political and economic performance been poor?

Despite the initial contraction the median postcommunist country in terms of growth expended slightly faster between 1990 – 2011 than median country elsewhere in the world. The rise in consumption was equally dramatic. From 1990 – 2011, household consumption per capita in the postcommunist countries grew, on average, by 88% compared with average increase of 56% elsewhere in the world.

Improvement in living standard. In information technology evolving from a backwater to an overachiever. The postcommunist world now boasts a higher percentage of internet users than any other region except North America and Western Europe. More travel than ever before, the occupation of larger flats. Environment – communism left behind a forest of smokestacks, but since 1990, the 11 countries that joined EU have slashed their emissions by more than half. The average life expectancy rose from 69 years in 1990 to 73 in 2012. Infant mortality fell faster in % terms than in any other region.

The most fundamental transformation was political. Governments that are more free and open today than at any point in their history, the extent of political change is remarkable. Today the average postcommunist country is exactly as free as one would expect it to be, given its income.

Problems still exist. Countries are far from perfect, level of corruption higher measured by international business people and people. There is lower standard of living, unemployment, regional disparities. Weak rule of law, low trust to justice, low civic participation, low trust to democratic institutions and state and low quality of public and social services. Most important is the citizen´s happiness. Residents express dissatisfaction with their jobs, governments, their educational and health-care systems.

Challenges and drivers

In Europe, the economic and financial crisis and its effects have further eroded citizens’ confidence in governments’ political problem-solving abilities. Liberal democracies are arguably not well-equipped to deal with crises deriving from economic cycles affecting the behavior of the market economy. An underlying tension inherent in democracies is the “expectation gap”  that is, between what citizens expect from their governments and what governments can reasonably accomplish in a present system that is not controlled by democratic institutions. Citizens tend to be dissatisfied with governmental accomplishments in this context. 

The global crisis has strained and inflamed this tension by accentuating domestic trends, long in evidence in Europe and beyond, toward a concentration of wealth and income within a small part of the population. Citizens’ growing discontent, in combination with a number of corruption scandals, has exacerbated the disconnect between the public and elites, diminishing confidence in democratic practices and creating fertile ground for radical antisystem narratives. This growing climate of political and ethical distrust, spreading particularly in the south of Europe, has chipped away at the so-called European identity, an essential element of support for the European Union.

At the national level, this mistrust in politics has been reflected in the emergence of new political forces and an increase in political polarization. In some countries (e.g., Bulgaria, the Czech Republic, Hungary, Lithuania, Slovakia and Slovenia), popular dissatisfaction with mismanagement, corruption and social hardships has given rise to new protest parties whose common denominator is the battle against the governing style of the established political elite.                                                          

The overwhelming majority of citizens are not demonstrating distrust in democracy as a paradigm, or at least not directly. Rather, they are demanding more democracy or “real democracy” which traditional parties have failed to provide. However, the present era of popular discontent and protests has exposed the limits of political representation, a situation that could undermine the legitimacy of democracy in the long run. Governments, either unable or unwilling to respond to mounting demands, may be tempted to believe that they have no recourse other than to use anti-democratic practices to suppress the demonstrations, seek to control the mass media or resort to profiling of protesters. Additionally, as governments continue to leave fundamental demands or expectations unaddressed, the populations decreasing faith in the democratic process may undermine the paradigm as a whole in the long run.

In this context, the intensification of bottom-up citizen activism, particularly advocating for more transparency and accountability in public institutions, could be an important bulwark against democratic abuses, with significant positive effect. For these reasons, it will be essential to complement representative democracy with deliberative and participatory mechanisms in order to facilitate the participation of new and old actors alike in policymaking procedures.

As a parallel challenge, globalization entails shrinking margins of political discretion for political parties in government, regardless of ideological leaning; and its excesses introduce the twin risks of backlash against international cooperation and the rise of identity politics. Globalization has in fact diminished the capacity of the nation-state to make independent sovereign decisions, because wealthy corporate elites, with power that extends beyond national borders, are increasingly influencing national and international affairs

These factors represent a considerable narrowing of the national democratic space, for which no elements of global democracy have provided compensation. The aspiration for greater effective participation thus faces new fundamental limits, and the “expectation gap” regarding governments’ abilities to deliver can only widen. The EU’s integration process has even aggravated this problem for EU member-state citizens, as calls for deepening democratic governance of the economy have been neglected. However, the fact that there is no alternative paradigm in sight only exacerbates the difficulties in tackling the crisis of the present one. 

The underlying friction between nation democracy and the global market economy is becoming a source of social tension that may ultimately threaten democracy itself. Global market  needs a certain level of economic and social inequality to exist, whereas equality, or at least equal opportunity and non-discrimination (not only in a formalistic legal sense) is a fundamental aspiration of democracy. There is thus a contradiction between the logic of the concentration of wealth and the demand for its redistribution. Moreover, according to most analysts, the process of economic globalization is conferring more and more power on wealthy corporate elites to the detriment of state-based power, thus narrowing the democratic space. At the national level, it can safely be said that the logic of global market prevails over that of democracy when social inequalities continue to increase within a country for a sustained period, since this would be evidence that democratic institutions have proved unable to diminish inequalities gradually or even maintain a given level of equality. 

Most European societies have experienced a crisis of the middle classes that has led to a dramatic loss of human capital particularly among youth. The cleavage between losers and winners has revived stereotypes and populist movements, in turn damaging the European integration process. Flaws in the economic integration process and the economic transformation of the world are today having a clearly differing impact among the EU’s member states, and the gap between winners and losers appears likely to continue widening. This process constitutes yet another fundamental threat to the European identity. 

Europe, and particularly the European Union as the economic driver of a wider region, is in urgent need of a sort of “new deal” in order to preserve democracies and the EU integration process. The prospects of continued economic stagnation and limits to economic growth, combined with decreasing job opportunities and an increasing social divide, are all factors that point decisively to the need for a new social contract. 

The core values of liberal democracy  – that is, the freedom of speech, the freedom of association and the right to privacy  –  are being eroded or even eliminated as a result of two different processes. This is taking place first as a response to security threats, particularly those related to terrorism, with restrictions varying from one country to another; and second in the context of a recent authoritarian drift in a limited number of countries including Turkey, Hungary, and more recently Poland.

Disorder of the economic and social systems

Macro vs. Micro /increase of public finances and increase of social inequalities, higher redistribution vs. social exclusion.  Aging of the population in combination with a shrinking work force.

All this has created whole social groups who depend on the state. Whole generations are dependent on public finances and redistribution. This disrupts social cohesion. While the state is stronger and more extensive, its authority is weaker. There is lower trust in politics and politicians. There is a need for fundamental policy shift and a definition of the core content of social rights.

Consolidated democracies in Europe today face a key question: To what degree are they immune to threats to the core tenets of liberal democracy, given both the deepening domestic socioeconomic cleavages and the rise of identity politics. Do current factors and trends point to a risk that democratic systems will become progressively illiberal?

This contribution is part of a two part series by former Slovak Prime Minister Iveta Radičová. Please keep follwing for the upcoming second part.