Trends in social cohesion, No. 10 Security through social cohesion Proposals for a new socioeconomic governance Council of Europe Publishing Editions du Conseil de l’Europe Security through social cohesion: proposals for a new socio-economic governance ropean Trends in social cohesion, No. 10 Published by the Social Cohesion Development Division with the support of the Integrated Project “Responses to violence in everyday life in a democratic society” TITLES IN THE SAME COLLECTION No.1 Promoting the policy debate on social exclusion from a comparative perspective (ISBN 92-871-4920-8, €8) No.2 Trends and developments in old-age pension and health-care financing in Europe during the 1990s (ISBN 92-871-4921-6, €8) No.3 Using social benefits to combat poverty and social exclusion : opportuni- ties and problems from a comparative perspective (ISBN 92-871-4937-2, €13) No.4 New social demands : the challenges of governance (ISBN 92-871-5012-5, €19) No.5 Combating poverty and access to social rights in the countries of the South Caucasus : a territorial approach (ISBN 92-871-5096-6, €15) No.6 The state and new social responsibilities in a globalising world (ISBN 92-871-5168-7, €15) No.7 Civil society and new social responsibilities based on ethical foundations (ISBN 92-871-5309-4, €13) No.8 Youth and exclusion in disadvantaged urban areas : addressing the causes of violence ( ISBN 92-871-5389-2, €25) No.9 Youth and exclusion in disadvantaged urban areas : policy approaches in six European cities (ISBN 92-871-5512-7, €15) The opinions expressed in this work are those of the authors and do not necessarily reflect the official policy of the Council of Europe or of the Secretariat. Cover design: Graphic Design Workshop, Council of Europe Council of Europe Publishing F - 67075 Strasbourg Cedex ISBN 92-871-5309-4 © Council of Europe, November 2004 Printed in Germany 2 CONTENTS Foreword ................................................................................................................9 by Gilda Farrell Introduction.........................................................................................................15 by Federico Oliveri 1. Democratic citizenship as a source of social cohesion.............................15 2. The way in which insecurity is talked about and perceived : from “fear of crime” to “the right to a safe life” ....................................16 a. The privatisation of risks and the “fear of crime”...............................................16 b. The feeling of insecurity and its origins..............................................................17 c. The asymmetry between demands for security and the responses to these.......................18 3. The eclipse of citizenship and the remedies : a decision for society .......18 a. Will the twenty-first century be the “century of insecurity”? Concerns, aims and results of the Forum ..........................................................18 b. Post-Fordian globalisation or democratic citizenship? .......................................19 c. Restoring security and deconstructing fear of others.........................................21 4. Proposals for renewing socio-economic governance in Europe ...........22 a. The welfare society as a paradigm ....................................................................22 b. Freeing up resources for fair access to rights: proposals relating to economic policy...........................................................................................23 c. Creating a new link between work and social integration: proposals relating to employment and welfare..................................................25 d. Collective action to meet the challenges of social cohesion: specific problems and solutions at the local and wider levels ............................27 Bibliography...........................................................................................................30 A. Freeing up resources for fair access to rights : proposals relating to economic policy................................................33 I. Who will pay for our rights ? Macroeconomic limits to the welfare system and alternative economic policy perspectives ............................................33 by Riccardo Bellofiore 1. Globalisation and post-Fordism as processes increasing inequality .......................33 2. The “new economy” and employment ...............................................................34 3 3. The making of the current global capitalist regime ..............................................34 4. Flexible accumulation and financial instability......................................................35 5. From the return of the economic cycle to the return of the state.........................36 6. From the crisis of globalisation to the globalisation of crisis.................................36 7. Some specificities of the European situation........................................................37 8. Neo-liberalism and social-liberalism.....................................................................38 9. Financial globalisation and pension funds reforms...............................................38 10. The need for structural policies ...........................................................................39 11. Different quality of growth needed to implement redistributive measures ...........40 12. The sketch of an alternative economic policy from the macro point of view: expansive monetary policy and taxation ..............................................................41 13. The sketch of an alternative economic policy from the structural point of view: democratic determination of demand and supply side policies ............................42 14. The sketch of an alternative economic policy: a synthesis of what is needed in a long-term view.............................................................................................44 15. The sketch of an alternative economic policy: a synthesis of what is needed in a short and medium-term view ...........................................................................45 II. How to defend social rights access for everyone when markets are liberalised and public services are privatised ? Measures to ensure socio-economic security of populations, moving from the Hungarian experience ............................................................................47 by Karoly Lorant 1. Insecurity as an objective condition: the implementation of the neo-liberal paradigm and his effects.........................................................................................47 a. The rise and fall of Fordism: towards a rights-based approach to security and welfare? ..............47 b. Goods, services, labour and capital: the four liberalisations..........................................48 c. Tight monetary and fiscal policy ..............................................................................49 d. Privatisations and minimal redistribution...................................................................50 e. The neo-liberal paradigm of society: some final remarks..............................................51 2. The Hungarian experience of transition based on neo-liberal principles ...................53 a. General character of the systemic change .................................................................53 b. Public health reform..............................................................................................55 c. Pension system .....................................................................................................55 d.Dwellings.............................................................................................................56 e.Unemployment .....................................................................................................56 f. Social inequalities..................................................................................................57 3. Some suggestions for fighting insecurity through challenging the neo-liberal paradigm.........................................................................................58 a. An alternative to neo-liberalism and globalisation ......................................................58 b. Localisation globally ..............................................................................................59 c. Decreasing the negative effects of capital flow ..........................................................59 d. Curbing transnational corporations..........................................................................59 4 e. Regional co-operation ...........................................................................................60 f. Active role for governments ....................................................................................60 g. Diversity in ownership structure ..............................................................................61 h. Financial and fiscal policy for local interest ................................................................61 i. Protecting the workers ...........................................................................................61 j. Possibilities for changes in the enlarged European Union..............................................62 B. Creating a new link between work and social integration : proposals relating to employment and welfare.............................65 I. Work and citizenship : reviewing the links between employment and social