The overlap between social democracy and social liberalism - Anthony Giddens

Anthony Giddens is the most important contemporary academic in the field of sociology and he has very wide international audience. He has been at the forefront of debate in social and political theory for over three decades. He is author or editor of over thirty well-known books. Amongst his academic best-sellers are New Rules of Sociological Method (1976), The Constitution of Society (1984), The Consequences of Modernity (1990), The Transformation of Intimacy (1992), Beyond Left and Right (1994), The Third Way: the renewal of social democracy (1998) and The Third Way and its critics (2000). He was born in North London in 1936, but does not fit into a category of older, conservative men. He is renowned for his clear and fluent speaking style. Giddens has been constantly in touch with contemporary debates in political and public issues. He was one of the first authors who has not tried to marginalize the impact of feminism in his understanding of society. He has written on issues such as class structure, elites and power, nations and nationalism, personal and social identity, family structures, relationships and sexuality. His 1998 BBC Reith lectures, later published in Runaway World, helped to launch the debate about the concept of globalisation to a wider audience.

Anthony Giddens’ impact upon politics has been particularly significant. His contribution to the global debate on the notion of the third way in politics was profound. His work has influenced political parties across the world. Giddens’ ideas have made a strong impact on Tony Blair’s New Labour, the New Democrats of Bill Clinton and the SPD of Gerhard Schroeder. His advice has been sought by political leaders from Asia, Latin America and Australia. Giddens was Professor of Sociology and Fellow of King’s College, Cambridge. From 1997 until 1 October 2003, he was Director of the London School of Economics and Political Science. He has been awarded several honorary degrees, from institutions all over the world. In 2002, he was awarded the Prince of Asturias Prize for social sciences, known as ‘the Spanish Nobel Prize’.

Liberales: Some Social Democrats are beginning to broach what has long been considered a taboo subject among their faithful. In his new book Il Socialismo. De Nuovo Jordi Sevilla talks about social liberalism and emphasizes individual freedom. “El nuovo socialismo estimula la propriedad privada que es fruto del esfuerzo creativo del trabajo personal” (the new socialism stimulates private property that is the fruit of creative and personal efforts). What do you think of the new discourse of the Spanish PSOE?

Anthony Giddens: Well, this is a question about social liberalism, the divisions between social democracy and social liberalism are not as great as they used to be. In my view, that’s right and proper because in the old days, prior to 1989, there was some sort of continuing vision of social democracy linked to socialism, as something beyond capitalism. People still sustained that until the very end of the Cold War. Now nobody or hardly anybody believes that, maybe some partisans of the anti-globalisation movement. We are all in the business of creating a decent market economy in a society which includes poor people, fulfils some of the traditional goals of the left, but does so while recognizing that the utopia which used to exist is no longer feasible so far as we know anymore. So, it is inevitable that you get more of an overlap between social liberalism and social democracy.

Insofar this is a question about freedom, I hope the social democrats have always stood for freedom, insofar this is a matter of private property. To my knowledge no one any longer believes in a program of massive nationalization of state ownership of property. I do not know anybody, really, who believes that the discussion is really on the margins. So I don’t think there is anything particularly surprising nor even - if I can say so - massively interesting about the statement of Sevilla.

Liberales: Not even when he stresses individual freedom as a socialist?

Anthony Giddens: Look, you have to stress individualism because you have to recognize that individualism is not the same as selfishness. We live in a world - and that is part of the work that I do as a sociologist - where the old forms of tradition, culture and habits that used to structure people’s behaviour, by large no longer do so, especially in western countries. So even if you are traditional in your life-style, it is a post-modern form of tradition. Normally it is a form of choice if you might say ‘I am a catholic’, but it would not normally just be because we always have been catholic. So there is a certain element of choice in it, and this is true with almost everything today.

Individualism in that sense is not an unpleasant or obnoxious thing. It is a liberating thing because it means we are free to face a very open future. Let’s consider the position of women a generation ago when both women and men were fixed with a certain faith in life. If you were a woman, you were bound to bring up children domestically. If you were a man, you were the bound to go to work for the rest of your life. Well, these things are no longer true. Women have few children now in Europe and they have other choices to make. And men also have other choices to make. There are a lot of anxieties who run in these changes but basically they are all positive.

That kind of individualism is not incompatible with solidarity but it is incompatible with the old forms of solidarity. People no longer just vote for the same party as they always did, they do not necessary follow the same religion as they always did, they do not always stay with the same bank as they always did. Your bank was the thing you were most loyal to in the old days, that is why banks always wanted to get you young! But nowadays people want more choice because they got more knowledge about how to dispose of their income.

So in that kind of a society, you can not depend on - what I call - passive trust. You have to have active trust but an active trust is kind of a continuous transaction of trust relationship. It changes in the nature of politics, it changes in the nature of everyday life but a lot of aspects of that are positive and not negative. That kind of individualism has very little to do with selfishness. So there is no reason at all for social democrats to be hostile to it, they have to learn to work with that.

Liberales: Is there still a difference between liberalism (as perceived in Europe) and socialism? Some socialists are still very suspicious vis-à-vis individualism (they talk about it as a ‘blown fuse’) and detestable self-interest. According to the sociologist Ulrich Beck, those responsible in politics and society should stop stigmatizing individualism and start seeing it as a positive, desirable and inevitable product of contemporary developments that provides people with opportunities. Do you agree?

Anthony Giddens: All the words you are using, are capable of several interpretations. So far as socialism on the left goes, there are three divisions on the left. There is the more modernising left - that I stand for - which is probably happier to see a sort of alliance with social liberalism - not a whole time merging but certainly an overlap. The more traditional left still tends to look to the big state and still tends to think that not much is changed in the world and that they can use the old doctrines. I believe these things are no longer feasible, certainly if you want to win power, hold on to power and do things worthwhile with that power.

And then you got liberalism. Liberalism means many things to many people. For some people, liberalism is essentially Thatcherism, the kind of reversion of the Manchester economic liberalism of the 19th century. I am totally against that and argue that it is not the way to run either an economy nor a society. If you mean by liberalism respect for human values, respect for human rights, respect for the individual, that is a globalizing phenomenon in my opinion and the left should strongly support that. It should be part of a global agenda for modernizing social democrats.

In my view, democratic socialists have always stood for expanding freedoms but they have argued that freedoms need resources. Therefore they have been unhappy with the kind of Manchester economic liberalism which emphasizes freedom without saying how you want to get the resources to be free if you are down the bottom of society. I think that the classical social democratic position is one which modernizing social democrats should still support. You must link freedom and resources. You need resources to be free. Freedom is a substantive thing and not just a legal principle.

Liberales: Some have argued that the current British government is the best conservative government Britain ever had. Is the distinction between left and right still a viable one? Is the real difference not between conservative and progressive politics?

Anthony Giddens: (clearly agitated) Well I think the first statement is crass in the extreme if I may say so. I think it is the substitute for fraud to say things like that. We do live in a world were things have changed a lot. We do have to compete in the global market place. Globalisation is not an invention of some timid social scientist, it is reality that affects all of us. Changing class composition of western society is a fundamental thing.

In Britain, the Labour party had been out of power for 18 years. The conservatives had been slow to adjust to a society in which their traditional constituency, the working class, was shrinking away. A generation ago, over 40% of the labour force worked in manufacture and were blue-collar workers. Nowadays that proportion has dwindled to 16%, and it is still declining. The old industrial economy has increasingly been replaced by a knowledge-based economy, in a society where the middle class is easily the dominant grouping. We have a much more diverse society divided around the middle class. The biggest sort of growing class is the class of white workers, who are people who work with computers most of the day. Probably about 40 % of the labour force are in that category. They do not hold classical left-right views and they have different views on different things.

You have to get rid of the traditional sort of affiliation between left and centre thinking and the old class groups. You have to make innovations to produce policies that are compatible with the wider economic environment in which we live. You have to be prepared to dispose of some old ideas. It is the sort of old-style socialism of the conservatives because they are just sticking with what they know. The conservatives are not trying to adapt to the contemporary world and they fail to show how you can actually respond. You have to do something worthwhile creating a decent society through these changes and not simply stick your head in the sand and pretend it has never happened. I regard us (New Labour) as the true radicals and not as the conservatives. Radicalism to me is not sticking with old leftist doctrines but it is being prepared to embrace new ones when you need to do so and not being afraid to embrace them. However you must be pragmatic. What I stand for, is a strong aversion to leftist rhetoric where it is not matched by actual possible policy making. So I totally reject that first idea.

The division to left and right is certainly still alive. To some extent it is being revised by a kind of polarisation of politics around globalisation because you got the rise of a new far right in quite a few countries. It is a mistake to suppose that is limited to Europe. If you consider politicians such as Ross Perot in the United States or Pauline Hanson (of the One Nation Party) in Australia, you see that they have pretty similar views to the far right in Europe, giving them a generic thing here. The far right essentially is opposed to globalisation and it has some of the same enemies as the new far left. Both do not like the corporations. The French farmer José Bové is a kind of hero to the anti-globalisation left and the new far right. But the new far right, unlike the new far left, is xenophobic and wants to hold back globalisation and the entrance of protecting national identity and limiting immigration. While the new far left is the kind of left of the anti-globalisation movement, the kind of somewhat eclectic fringe of leftist thinking without again any utopia what they have in view.

So the division between left and right is still important and it is still important in orthodox politics too but it is not as decisive as it was because of the absence of utopia. When there was a Marxist or a socialist utopia, in other words something different from a market economy, whatever it was, a state-based socialist economy, off course the divisions were greater than they are now but they still account for quite a lot.

Liberales: Is the New Labour government following the Third Way and to what extent Third Way politics have been pursued elsewhere?

Anthony Giddens: Let me first comment upon some misconceptions about the third way debate. The third way, at least in my understanding is not a programme specifically linked to New Labour in Britain. The notion stretches more widely, to the efforts of social democratic parties across the world to rethink their policies in the post-1989 period. Another word for third way thinking is simply progressivism. The third way is not a ‘middle way’ - specifically, it is not an attempt to find a halfway point between the Old Left and free market fundamentalism. It seeks to transcend both of these. Neither of these earlier two ‘ways’ is adequate to cope with the social and economic problems we face today. The third way is a distinctively a left of centre project - it is about the modernisation of social democracy. When I wrote my book The Third Way in 1998, I gave it the subtitle The Renewal of Social Democracy, and that to me is what the third way means. Finally, the third way is not an empty pr-exercise. On the contrary, from its beginnings it has been a policy-driven response to change. We live in a world marked by rapid and dramatic transformations - globalisation being the most important - and it is the role of third way thinking to seek show how to cope with them.

The third way to me is a label for the process of modernisation of social democracy and it has not been exemplified by any particular country. It is a mix, a collection of problems of changes in the world we have to respond to and a search for active policies which will work in relation to those. It is a pretty coherent program out of all. Among many things, it involves restructuring the state, stabilising civil society, restructuring the economy and promoting an economy compatible with a knowledge-based economic system, welfare reforms bringing the welfare state up to date, new anti-poverty policies - because the old ones have got stuck - and basically a positive but nevertheless nuanced attitude towards globalisation.

That is how I define the sort of framework of Third Way thinking but every country has its own trajectory. Although the problems of the German SPD essentially have the same structural background as in the UK, we have had a totally different trajectory. The UK had 18 years of Thatcherism, run down public services, and a lot of child poverty. Neither of those things apply in the same way in Germany. The main problem in Germany is to unfreeze labour markets and more generally unfreeze the economy. The drive is to do something about the fact that what made Germany strong is now threatening to make it weak, namely the kind of structures that were set up in the sixties and seventies. To me the Third Way is a much more generic program of rethinking on the left and I see it as a world-wide thing and that is why I wrote a book called Global Third Way Debate.

Liberales: The anti-globalisation movement opposes liberalism and free trade. Some economists, such as Razeen Sally, Senior Lecturer in International Political Economy at the London School of Economics and Political Science, argue that the anti-liberal critique is wrong and that the marginalisation of developing countries is in large part caused by not enough rather than too much globalisation. He makes the liberal case for economic globalisation where market freedoms enable the progress out of poverty to prosperity. Could one argue that more free trade rather solves than causes the problem of inequality?

Anthony Giddens: First of all, let me say that globalisation is not a single thing. It is a mistake to identify it with trade and the expansion of a global market place. Many of those ‘in favour’ of globalisation, and most of those who are ‘against’, define the phenomenon in terms of the world marketplace. We should recognize, however, that globalisation is by no means wholly economic. Its origins, in my view, are not to be found primarily in the economic sphere at all, but in the impact of electronic communications, more accurately in the marriage of satellite and information technology that dates from the early 1970’s. From this point onwards, instantaneous communication became possible from any part of the world to any other. Even the most isolationist regimes have found it hard to keep back the satellite dish, let alone the transistor radio. Different cultures are brought far closer together than ever before producing that clash between cosmopolitanism and fundamentalism that is one of the distinctive features of our age.

One should recognize that globalisation produces insecurities, tensions and conflicts alongside its benefits. Yet many of these benefits, including those generated by free trade are real. So, globalisation is not just an economic phenomenon, it might be not even primarily one. The reason why I think there is essentially no going back on globalisation is that it is driven above all by living in a world where you are in immediate contact with other people across the world. I can not see how that is ever going to change, unless with a serious disaster or something.

On your question about economic development, I would not agree completely with either of the things that were said. I am in favour of globalisation if that means the expansion of a global market place. But I think we know pretty well that just a straight-forward expansion of markets will not solve the problems of developing countries for two reasons. One being that you must have wider structural change in those societies, going along with trade liberalisation if this were going to be successful. And that normally means democratisation, some kind of movement towards an effective civil society, and some kind of transparent banking rules as the minimum. Countries like Botswana managed pretty well to do those things and they have been pretty successful.

The second reason why you can not just depend on open markets as they function at the present, is that they work in favour of the West as we know. In markets such as agriculture and primary products, where poor countries could compete effectively with the West, you still have high tariffs on importation in the EU and the US. So we don’t have an open competitive market place.

Developing countries need a different model of development than free market orthodoxy. If you just open a poor economy out to the global market without protective devices and without some involvement of the state, it could be disastrous Contrary to the free market orthodoxy, the state has always played a significant part in successful development. There is no industrial country in which the proportion of GDP taken by the state has declined significantly over the recent past. In developed economies, government and the state are almost everywhere, and have to be for people to lead decent, normal lives. Moreover, as Joseph Stiglitz, Professor of Economics and Finance at the Columbia University in New York and former World Bank Senior Vice President, points out on an international level, there are no cases of successful economic development where the state has not played a prominent role. Main problem of lots of poor countries is not really the global market place but it is the state and the fact that the state is unreformed or corrupt in many of these countries. It is very hard to reform them because you need the state to reform itself and it is difficult to that. In Latin America, Africa, Asia it has mainly been the state that has been the problem and not the market.

The cultivation of markets in a developing society involves far more than simply opening up its economy to global trade, since to function effectively a market economy presumes a surrounding framework of institutions. Economic growth in which poor people participate is the only known way raising large numbers of people out of property, but it cannot happen through a focus on market forces alone.

Liberales: In his new book, John Gray of the LSE argues that Al Qaeda is a product of modernity and globalisation. To what extent do you agree with this argument?

This kind of new terrorism is geo-political and it is closely linked to globalisation, drawing as it does upon the resources of global civil society and upon the latest communication technologies. Al Qaeda is in some very respects very like a kind of malign NGO. It has branches in every country, with a loose top command structure, held together by a shared sense of mission. Al-Qaeda uses all the modern technologies, and it has the kind of structure like a global NGO, it depends upon modern communication systems but it wants to attack the West with these things.

According to Rohan Gunaratna’s book Inside Al Qaeda, it is the first multinational terrorist group of the twenty first century ‘a world-wide movement capable of mobilising a new and hitherto unimagined global conflict’. It will have no qualms about using chemical, biological, radiological and nuclear weapons against densely populated urban centres in its chosen countries of attack. Gunaratna says that Al Qaeda can draw upon the support of 6-7 million radical Muslims across the world, some 120,000 of whom are willing to engage directly in terrorist activities. Its leadership is capable of meticulous planning, as was shown by the events of September 11.

Al Qaeda is by no means the only group of its type - there are other kinds of groups that could pose major dangers in the future. For instance, there are quasi-religious groups whose members include practising scientists whose skills could be turned to highly destructive ends. It is only relatively recently, especially of course since September 11, that we have become aware of the level of devastation asymmetric conflict could involve. The instruments of violence used, after all were simply aeroplanes, not even weaponry at all. Far more devastating attacks are conceivable.

Liberales: According to Swedish historian Johan Norberg, author of the book In Defence of Global Capitalism, the EU requires 13,5 million immigrants annually to maintain the balance between active and non-active citizens. However currently all EU countries are closing their borders. How should the EU deal with immigration?

Anthony Giddens: Well that is again neither a single question nor a simple one, especially if you link it with an ageing society. Like globalisation itself, processes of migration at first sight look like a repeat of the late nineteenth and early twentieth centuries. There were as many people moving around the world then as now. But in both cases the differences are more important than the similarities. Current migration flows have different patterns from the past. A century ago, there was mass migration from Europe to the Americas. Today there is large-scale migration into Europe, especially into the countries of the EU. In the mid 1990’s there were some 700,000 official immigrants into the US each year, compared to 1.2 million coming into the EU. A much higher proportion of immigration into both these continents is illegal than it was a hundred years ago-estimated at 500,000 a year coming into the EU. Moreover, immigrants come from a very wide range of states, making the flows much more global than in the earlier period.

An ‘ageing society’ is the result of the very things I have discussed earlier. The more women who get choice, the more some women - better off or worse - choose to have fewer children or no children at all. And that is part of the reason for the ageing of European populations. So it is not necessarily a wholly bad thing but it is a very serious thing, as we know. Sustaining our welfare systems and the overall democratic make-up of our society, there is no way in which immigration can cope with that issue.

Immigration is not in any major sense a solution to the problem of an ageing population. Immigration has to be dealt with separately. I am in favour of a vigorously liberal attitude towards immigration. Immigration is fiercely a complicated topic because there are all sorts of immigrants. Some immigrants, western countries and European countries actively need. They never have enough school workers, they never have enough knowledge-based workers, in high-tech industries for example.

So the only way to deal with the ageing population is to have structural changes in pensions and to change the very nature of ageing itself because ageing is changing a lot. I mean I am ageing myself and I do not want to be treated as an old days pensioner. It seems to me as to be a disqualifying stage, it is not a liberating one. So it is bound to happen that older people are going to work more, hopefully you have more flexible working throughout one’s career. In Europe there are far too many men who give up work in their early or late fifties. In a country like Italy, there is hardly anyone in work. Especially men, they work until their early fifties, it is ridiculous. So the only solution is transformation of the actual working practices and pensions of the ageing population.

Liberales: Some argue that ‘Fortress Europe’ needs active integration policies. The real issue for European societies is not how to keep new foreigners out but how to integrate the minorities they already have. Do you see this as a viable solution to counter the rise of far right populist parties all over the European continent?

Anthony Giddens: I think the far right is not only concerned with immigration, it is concerned with the insecurities of globalization or what is submitted to globalisation. It is worried about the delusion of national identity, it is quite often worried about public services and concerned about straight-forward economic policies. I think you don’t want to say we can reduce the influence of the far right by having a different attitude towards immigration. I think you have to look at a cluster of policies. I think to some extent we should try to outflank the far right, not just confronted on its own terrain as it works. It is not just by saying that you have different policy towards immigration, but by saying that you have a cluster of policies which will help you help make the society more secure, more effective and more successful in the face of the changes happening in the world around you.

There are circumstances in which it is in the interest of the host society or the society of origin to try and stop people immigrating. When you deal with poor immigrants, illegal immigrants, asylum, we have to find a balance. There is no magical solution to those issues. On the whole, the evidence seems to show that immigration of all types, is beneficial to a society, economically and socially.

Nevertheless, we should recognize that some of the worries citizens have about immigration are real. An influx of migrants can threaten the job prospects of indigenous unskilled workers, for example in specific urban neighbourhoods. Where migrants are culturally distinctively different from locals, pre-existing habits and ways of life can come under strain. Yet many of the anxieties people have about immigration are not well founded-myths abound. For instance, it is not true that most immigrants abuse the social security system, or place a major new burden upon it. Policy makers need to recognize and respond to these types of worries differently. So I think there is some substance of some of the worries about immigration but a lot of the worries are based on myths. And those myths have to be contested by the government and through education as best we can.

The point is not, or should not be, for European societies to take over rightist policies on these issues, but to offer persuasive left or centre approaches and solutions to them. Some parties simply failed to respond to voter concerns about crime and immigration. Voters in the past have tended to trust social democrats on issues such as welfare and education, but not with questions related to crime and immigration. These should be no policy areas accepted as the inevitable terrain of the far right. Social democrats tried to tack on new policies in areas to do with crime and immigration only after the rise of the far right had shaken them out of their complacency - and too late to register effectively with the voters.

‘Managed diversity’, a concept suggested by Nicola Rossi, Professor of Economics at the University of Rome, is a helpful theme. Today we must move beyond naïve multiculturalism. The way to do so is to relate the debate about immigration to that about citizenship. Legal migrants should have most of the citizenship rights of indigenous citizens immediately but they should also be asked, or obliged, to accept a specific range of obligations too. No one should suppose, of course, that such requirements are easily to spell out on the level of policy. As with citizenship more generally, there are problematic issues in respect of which specific political and legal decisions have to be made. The boundary lines between identity politics, universal morality and law, and national identity, will always be to some extent, be contested. Should the veil, as a religious symbol, be banned in state schools, as have been proposed in France? Should there be sanctions, such as the potential loss of welfare benefits, to enforce the learning of the national language? How far should a liberal society be tolerant of those who openly question its codes (the dilemma raised by the populist politician and sociologist Pim Fortuyn in the Netherlands)?

But the overall formula is clear. The good society should be understood as a cultural ‘effort-bargain’. The host society accepts greater diversity, and recognises its energising qualities; immigrants have the obligation in return to learn core constitutional values and abide by them. When they clash, qualities such as religious freedom, freedom of speech, or the equality of men and women, in principle override traits of cultural identity. It does not seem to me unreasonable to suppose that the degree of cultural accommodation asked of immigrants should be greater than that of the host population.

Liberales: As people live longer and the proportion of workers in the population stops rising, the cost of caring for the old eats up a growing portion of national income. What will the implications be for the sustainability of social security systems?

Anthony Giddens: Well, the implications are quite significant, I think. A generation ago, life careers were more stable and predictable. Most men expected a long working life, often spent in the same industry or same job. Women generally left the labour force at the birth of a first child, and most did not return. Welfare provisions were slanted towards the old. Today, when much of this has changed, welfare risks are cascading down towards the young. Children, especially in single parent families or workless households, increasingly make up a large percentage of the poor.

In most industrial countries, particularly in Europe, there is an alarming fertility problem. The birth rate in some societies has fallen to less than 1.2 children. The implications for future welfare funding, particularly of pensions, are fearsome. Esping-Anderson, Professor of Political and Social Sciences at the European University Institute in Florence, points out that this situation is not because people don’t want on average more than two children per family. Their economic circumstances deflect them from this goal. Esping-Anderson says that surveys show that people want more children than they actually have. They want an average of about 2.2 children (some want three, some want two), but many only have one.

Part of the reason for that is inadequate support from the welfare state. Higher birth rates were found where unorthodox family systems are protected by the state, like in Scandinavia. They have reasonably high fertility rates there. The contrary happens in Spain where you don’t have protection, and where you have the lowest fertility rates in Europe. So Esping-Andersen seems to suggest that you have to try to re-adjust welfare systems to make it possible for people at least to have the number of children they want. And that would imply quite a lot of reform. As we know, a severe structural restrain is the pensions problem, so the welfare system has to be reformed. Countries vary though. In the UK the problem is not a massive inability to pay pensions, but the difficulty of coping with poorer people over 65. In contrast, France, Italy, Japan and Germany still got unsustainable pension commitments. So different countries have different problems but a lot more reform of the welfare state would be needed.

Liberales: Government efforts to reform unaffordable pension systems are under attack from though-talking trade-union leaders who threaten with strikes and demonstrations. Some argue that trade unions in Europe are no longer needed to advance basic rights and to fight the class war through economic black mail. Do you still see a useful role in the modern economy for organised labour and what services should trade unions provide to its members in the 21st century?

Anthony Giddens: I do see an important role for trade unions but I hope not fighting a class-war which has basically been made obsolescent by structural change. And that would be the worst thing for trade unions to do, in my opinion. I think you need unions to be progressive and my sense of progressive that is to recognize that there are a lot of changes happening of the kind we have been talking about. Trade unions can contribute to help the world forcing to adjust to those changes in a positive way. Although I do think also of the opposite, that they could block those changes, I know very good examples of unions which are not prepared to be progressive. It is not always a tool, that is not necessary the case.

We know the big problems of welfare reform in poor countries are that once you set up welfare rights, people start to define them as natural rights and then they block any attempt to change them. Try to change pension systems in France and everyone is on the streets. Actually it is much the same as in Latin American countries where you got quite a lot of rights for the labour force even though they often can not be paid for because countries are still poor. But people are still out in the streets saying they don’t want change. The problem of vested interest is not always unions off course, but it is a very big and difficult one.

An important thing for me is that every leftist party, you can see it happening in the UK too, should try to persuade unions to adopt a view which will see that a lot of change that one have to deal with is essential to not just block them but try to find a positive adaptation to them on behalf of not just of their members but also of the wider workforce. A view that I reject within certain strong unions is that one sector of the workforce is often protected and if you are outside, you are in a much worse situation than you would be if the others did not have that protection. One of the worst things of the left is when unions claim to stand for the public interest but really they are defending just a sectional interest. I think they should genuinely stand for the public interest and not just for their members.

Liberales: How can the EU pursue the Lisbon Agenda of becoming the most competitive economy by 2010 without endangering its social welfare systems?

Anthony Giddens: These are two questions, not one. The Lisbon programme in the EU was heavily influenced by third way thinking, and is crucial to a resumption of economic growth and to job generation in Europe. Yet, the Lisbon Agenda has by no means always been endorsed in practice. The Lisbon summit set a target of 70% or more of the labour force in work by 2010. Progress thus far has been slow. The employment ratio of the EU countries in 2002 was 64%-compared to over 75% in the US. There are massive differences in European countries, with Italy having a formal employment rate of nearly 50% and the UK and Denmark ranked up high over the 70%.

Some governments were unwilling or unable to push through labour market reforms. As a result, unemployment remained higher than it needed to be. There is a long way to go and my believe, pretty strong-forward, is that quite a few of the core provisions of the Lisbon-agenda have to be instituted by nations and those nations are one of the reasons why they have not managed to do so. The social democrats in Germany are a good example of a struggle with labour market reforms and with making the innovations which will make high-tech industries to take off and have growth. Plenty of barriers still remain on that level, so we solved that issue.

Let’s get on to the second part of the question. A strong believe of the Lisbon Agenda is that if you have a high proportion of people in work, you have far few people being supported by unemployment benefits, you generate more taxation revenue to spend on all the things people want. What people want is government money to be spent on is everywhere the same: health, education and to some extent pensions. You don’t want to waste lots of it keeping people out of work when they could be in good jobs. And you want a labour force which is able to adapt - as I said before - positively to technological change, not just be frightened of it but be able to profit from it.

Public investment has to be geared to what a society can afford. ‘Tax and spend’ in the past for the left often meant ‘tax and overspend’. In place of this attitude modernising social democrats should place an emphasis upon fiscal discipline, and upon improving the conditions of economic competitiveness. Economic development and social justice can go hand in hand if we concentrate upon high levels of job creation. A society with a high proportion of people in work is likely to be increasingly prosperous, but is able to free up resources to pay for public investment.

Today we should recognize that most rights - social, political and economic - are conditional. People who claim unemployment benefits, for example, should have the obligation to work. European social model has to be modified to cope with that. But we know what that involves: it involves less rigid labour markets, more flexibility in society, more human capital protection. What we need is an active labour market policy with strong human capital guarantees. Plus the other welfare reforms we discussed earlier.

Some of the societies coping best with these issues, such as the Netherlands, Denmark or Sweden, I do not know about Belgium, are among the most open of industrial economies. They are the result also of the demographic patterns just mentioned, in combination with technological change. Those countries have come up with the best system where they have conditional unemployment benefits but where they provide very good training and retraining when people loose their jobs. That is the best solution that anyone has been able to come up with so far anyway on how to get a society which is still solitary where you still protect people but where you don’t protect them in such a way as they can not cope with social and economic change.

Liberales: Thank you very much for this interview

Interview by Olivier Van Horenbeeck (member of Liberales)
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