The Challenges of the Eco-Social Market Economy
Belgrade, 21 April 2016 - The Austrian trade union federation FCG/GPA-djp and the Dutch trade union confederation CNV together with the European Organization of Workers EO/WOW, the Serbian Federation SS Bofos and the European Centre for Workers' Questions EZA organized a European seminar especially for trade unions in Central and Eastern Europe. Approximately 70 delegates coming from 20 different European countries participated in the seminar. It was held in the city of Belgrade, the capital of Serbia, from 19 to 21 April. Experts from different countries presented the different aspects of the Eco-Social Market Economy.
The definition of social market economy is: a form of market capitalism combined with a social policy which favours social insurance and solidarity. The social market economy forms the heart of our free and open national and, increasingly more, European society, which is also characterised by solidarity. It has proven itself as an economic system that allows for prosperity and full employment, whilst also providing welfare and promoting a strong social fabric.
The concept of an Eco-social market economy was first developed in the 1980s by the Austrian politician Josef Riegler, who, out of concern for the environment, demanded that the social market economy should be further complemented by the component "environmental responsibility". It aims at balancing free market economics, the strive for social fairness and the sustainable use and protection of the natural resources. The eco-social market economy requires that the protection of the environment and social fairness are vital criteria for all economic activity.
What can be seen throughout the world is the unfair distribution of wealth and poverty, but also in the way we put pressure on the environment. We see that a large share of the world-population is obese while on the other hand there are still too many people dying of hunger or just managing to stay alive. They just have enough not to die, but not enough to really live. When looking at pollution people often point at China where it is hardly possible to breath in big cities. Indeed this is a big problem, but when one looks at the statistics one sees that the emissions are still greatest in the US. Africa, Latin America and Southeast Asia just have minor emissions in comparison. What should be developed is a worldwide system whereby the focus is on sustainable practices which are ecologically responsible. Continuing as we are now is not an option. But for this to happen people should realize that it is of benefit to protect the environment.
One may understand that this is not easily reached in all countries in the world. The differences are too big. And the priorities lie somewhere else. People are fighting for survival, for a steady income, for a roof over their head. Sustainability is not the first thing on their mind. But actually it should be. Particularly for those in vulnerable jobs, because they are the ones who pay the highest price of all. Their health. And eventually their lives.
In Central and Eastern Europe this is also the case to some extent. Here it should be promoted that social entrepreneurship creates employment too. One should not only look at the costs, but also to the benefits. This should be further stimulated by the respective governments and the European Union. One should also look at Gender in that sense. Gender-conscience employment policy is also a form of sustainable market-economy. This is not so much developed in the Eastern European countries, but should be promoted more.
It was a great honour to have as a speaker the person who first mentioned and developed the concept of Eco-social market economy, Mr. Josef Riegler. To him the eco-social market economy was the only way forward, however, there were a few important reasons threatening humanity. These were:
- The explosion of the population
- War and terror
- The gap between poor and rich
- Climate change
- Fanaticism and hatred
These points are a threat to the European society and way of living. The world is not in balance and thus we see troubles arising throughout the globe. The only way out of this is when we as world-community come to a series of common denominators. We should all have the same goal and vision. For this three points are essential:
- Global consciousness
- Worldwide connected ethical standards for human action
- Shared responsibility
In that sense the Eco-social market economy can be considered a very Social-Christian principle. Having a balance between the various actors of the economy does also imply that this is sustainable. The Biblical term for this is ‘custodianship’. Being responsible, in manner of acting, for current and future generations. Natural resources are not endless and should not easily be discarded. But one can easily translate this to sustainable welfare and solidarity.
Sustainability is very topical when looking at the use of energy. Particularly when talking about the non-renewable energy-sources, such as oil and gas. Once we use them they are gone forever. For that reason it is very important to focus on renewable and clean sources of energy. But for many this is not a first concern. It is not high on their priority list. And actually it should be. People are very unaware of energy in the broadest sense. They have difficulty reading their own energy-bills. And this while the pay a lot of money every year. And this amount could be far less high. So it pays off to show interest in this. And in addition it is better for the environment too.
Many countries still face a long way in achieving better environmental conditions. For many it is not a top-priority. They have other issues to solve first. But actually it should not be one or the other. It should be treated together. Countries and people should become aware that it pays off to look after the environment. And that they can actually make money by doing so. This is exactly what the Eco-social market economy aims at. An enduring society in the respective cultural context, which is sustainable on three levels: environmental, social, and economical.
But how to put the above into practice? The main issue is the compatibility of ecological and social aims with the principles of a market economy. The crucial question is: which framework conditions have to be created so that the dynamics of a market economy move within borders that are imposed by ecological and social aspects. Politics for the economy and for the society needs a clear regulatory framework. This is now more important than ever.
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