Republican Europe?

The intimate relationship between social welfare and politics has always baffled economists. Germany illustrates how very complex this relationship can be. Germans enjoy a social welfare system that shames much of the rest of us. Sick? No problem. Homeless? No, you are not. Need an education, additional training? It’s free. Can’t afford to enjoy the arts? Not to worry. The arts are subsidized. So it is nothing short of miraculous that German voters are punishing Angela Merkel for what they experience as economic instability.

Yes. Unemployment, particularly among youth, is specially high. And, yes, economic growth is not what German’s have grown accustomed to. Yet, did all US voters enjoy the same social benefits that German voters do, we could all cash in that outstanding debt about which brother Martin used to remind us. So what gives?

I think the real question here is: what is it that mediates social relations? Of course, we could argue that as citizens reclaim ever broader and deeper swaths of social life and time colonized by private capital, their lives begin to be mediated by the newly liberated social forms their freedom allows them to adopt. So, for example, in Germany (or France or Holland or Belgium) we could argue that citizens’ lives have come to be mediated by their families, their parks, museums, music and art. And to some extent this is no doubt true. Seize these public goods from Europeans and you will see riots on a scale not experienced in Europe since the 1960s. And, yet, just as oppression does not come with its own play-book, neither does prosperity. US citizens who joined the workforce in the 1950s and 1960s came to believe (falsely) that their prosperity was evidence of their hard work and ingenuity (instead of the destruction of Europe and the largest demand-side public outlay in human history). What is often — indeed, almost always — missing from growth cycles is a deep and broad appreciation for why they arise and how (or even whether) they can be sustained.

Take Germany’s growth for example. In some measure, Germany’s growth was built on the presence just to its east of a huge untapped market. Equally critical for Germany, however, was also the relatively higher receipts Berlin draws from private wealth, sufficient receipts to underwrite a huge social welfare state. Neither of these, however, comes with its own interpretive appendix. Was it not German ingenuity and hard work that underwrote her prosperity? And, if so, then how are we to account for current downward pressures? Surely the Germans themselves are not to blame. Remember, it is they who account for the upturn. How could they also be held responsible for the descent?

Republics rest almost entirely on grasping two simple words: res publica, the things we hold in common. As any insurance company will verify, holding things in common produces huge efficiencies; the larger the pool, the lower the risks and costs across the board. But that is only half of the story.  The other half is the benefits we enjoy from recognizing our interdependence; our fates are bound together. This other half of the story, it so happens, is absolutely critical for its survival. And no one knows this fact better than private capital. Private capital would prefer the short-term higher private return than long-term public benefit. Private capital knows that if it can divert our attention away from the public good and toward our own private self-interest — the self-interest of Germans, of Pomeranians, of Berliners, of Bohemians — then they have won the battle.

Are our relations mediated by private goods? If yes, then it hardly matters how strong our social welfare state might be. It is only as we turn our attention away from private to public goods that even economic downturns can become occassions for doubling down on our committment to republican values and institutions. Because we have seen what lies at the end of the other path; and Germany ought to know better than most.

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