Opinion: In defense of the Polish plumber
And, of course, it is as difficult to be against cohesion as it is to be against friendship. But the real question is which policies work best.
Existing policies to achieve social cohesion are based on the belief that, if uncorrected, the free play of market forces will lead to wide disparities in income and thus intensify social conflict. But studies tend to show that the majority of income transfers by government occur within the middle class. In fact, some transfers flow the other way. For example, many pension systems transfer money from the poor to the middle class, simply because richer people usually live longer.
What most European countries get for their social expenditure is a lot of state of services, and not much reduction in social inequality. So lower levels of social expenditure could involve a relatively small increase in inequality and social conflict.
Indeed, some policies aimed at achieving cohesion may well reduce it. Restrictions on firing employees, for example, may protect people who have jobs, but often at the expense of the unemployed, thus increasing social exclusion. Even where high levels of social transfers actually do reduce inequality (and therefore presumably increase cohesion), they may undermine inter-communal relations if ethnic minorities are perceived as being strong net beneficiaries.
The European Union resulted from the tragic lessons of the first half of the 20th century when giving free rein to national egoism led to continental catastrophe, and increasing globalization meant that economic, internal, foreign, and defense policies were unlikely to be successful when pursued exclusively at a national level. Yet we continue to believe that social cohesion is limited to the nation. European cohesion funds account for only a fraction of a percent of European GDP, whereas about 10 percent of national income is typically spent on social transfers.
A massive increase in European Commission spending power to achieve greater pan-European social cohesion would be politically unacceptable to the richer members who would have to pay for it.
Fortunately, inequalities can often be reduced considerably without spending much money. Nothing that the EU or its individual members can do would have as great an impact on reducing income inequality in Europe as eliminating national protectionist barriers to migration, movement of capital, and provision of services. Doing so would reduce inequalities not only between EU member states, but also within the poorer ones. The poorest of the poor would gain the most, while the rich member states would lose little, despite their popular fear of open borders.
For example, during the referendum campaign in France for the European constitution, the "Polish plumber" became a symbol of the threat of European integration. But the impact of free migration on French plumbers' incomes is in fact minimal, not least because of the smallness of the new member states compared to the whole of Western Europe. Workers' incomes in Britain and Ireland have not fallen measurably, despite openness to immigration from the enlarged EU.
Free migration in the EU means that Polish plumbers will not only catch up with French plumbers, but also with Polish bankers as middle-class people in Poland are hit by the increased cost of the services of skilled workers.
Why, then, was the European Commission's proposed services directive, which would ensure freedom to supply services across the Union to all EU companies, vilified as the "Frankenstein directive" and fatally diluted by the European Parliament? Why have demands for freer access to Western Europe's labor and services markets been stigmatized as social dumping? Why are policies that would do the most to reduce inequality in Europe being presented as anti-social?
What motivates the opponents of free service provision and labor movement in Europe is the desire to maintain the status quo. To be sure, change creates discomfort, and may even cause tension and conflict. But the conservative attitudes underlying opposition to change are anything but "social," for they would deny the poorest of Europe's poor a chance to improve their lot.
If such attitudes came to be accepted as the guiding principles of European policy, Europe's economy would stagnate, making it impossible to afford even modest levels of social transfers.
Jan Krzysztof Bielecki is a former Prime Minister of Poland. This article was published in the Spring 2007 issue of Europe's World.
Copyright: Project Syndicate/Europe's World
