Back to the future of social market economy

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You can feel the spring in Europe and North America not only in the weather, but also in policy discussions. The economy is still struggling, many of which are still affected by lock-in restrictions, but the focus of political leaders has shifted from urgent action that can be taken immediately to recovery and other aspects.

Not only; the direction of long-term attention has also changed since before the pandemic. Everywhere, economic policy recommendations are combined with new concerns about the social aspects of future growth or its impact on inequality. It remains to be seen whether the actions will be consistent with words and deeds, but there is no doubt.In the EU and the UK, politicians are communicating their own views U.S. President Joe Biden said Addressing the U.S. Congress last month: “Now is the time to grow the economy from the bottom up and from the middle to the middle.”

This was evident in Porto last week, where the heads of government of the European Union Held a social summit And the informal meeting of the Council of Europe.This Leader announced They support the European Commission’s three new quantitative targets for 2030: 78% employment rate between 20 and 64 years old, 60% of workers receive some form of retraining each year, and will face the risk of poverty or social exclusion The number of people dropped by 15 million, including 5 million children.

The leaders also said that when the committee supervises and coordinates the economic policies of member states, these goals and indicators should be taken into consideration to monitor the progress of achieving the goals. At the summit, civil society representatives and even some member states hope that social goals can provide information for the still delayed reform of EU fiscal rules. The debate on this debate has become a nightmare when it restarts in the second half of this year or early 2022. This will be worthy of attention; it is obvious that the best proof of how serious political leaders take their declared social goals is the status they enjoy in the core of economic decision-making.

Across the English Channel, the transition from a state of emergency to a state of recovery is reflected in efforts to bring regional inequality back to the center.This Queen’s speech this week The British government’s legislative plan-vowed to “expand opportunities” across the country. The specific policy details did not impress people, and the plan left “loopholes and contradictions” in the plan. Editorial Judgment of the British “Financial Times”. But again, it is clear that regional rebalancing is a goal that the government wants to know.In order to better understand its possible goals, please read the details Blog post Rachel Wolf, a frequent visitor of “Ten”, explains how to achieve goals in the upgrade agenda.

She emphasized the quality of life: local amenities, services and transportation; safety; providing training opportunities and incentives to attract skilled workers; and good schools. In other words, striving to make the living environment livable is the first and central step of the economic recovery strategy. This is a wise approach, and it may be particularly timely.When I Recently wrote, The end of the pandemic has created opportunities for the spread of high-value-added work through continuous remote work. “Post-Covid home work will accelerate this impact [on towns’ attractiveness] in case The place to live is really good. “Wolf said. It is easy to see the contradiction with the government’s emphasis on letting people return to its city offices, not to mention the cuts of local governments and the failure to reverse their contradiction. But from Wolf’s thinking, the government Knowing this, and knowing the judgment that will be made.

At the same time, in the United States, Biden recently added a third pillar to his early legislative work: American Family Plan It supplements the economic rescue plan passed by Congress and the infrastructure and employment plan proposed earlier this spring.As Adam Tooze (Adam Tooze) in Interesting tour of American social policy, The two first pillars of Bidenomics also have strong social support components. The “Family Plan” clearly stated that Biden hopes to permanently strengthen the social aspect of economic policy, not just get rid of the crisis.

For example, among the funds provided for universal parenting and tertiary education for three- and four-year-old children, the plan includes a permanent extension of employment for one year and introduces a higher refundable child tax credit. If this measure is passed, the United States will work with other wealthy countries to provide parents with a large amount of regular cash support.

The level of social supply in the United States may lag far behind Europe-but at the current rate, Biden seems determined to close this gap as soon as possible.The only rescue plan that has been passed is Expected to lift 5 million children out of poverty This year is the same as the EU’s goal to be achieved by 2030.

Back in spring, it feels like the concept of “social market economy” in spring. For the first time in decades, the term “society” has the same importance as the other two.

Other reading

  • I have a lot of reactions to me This week’s column On the question of why the toughest capitalists should wish to levy a wealth tax. One area that I have no room to solve is the challenge of insufficient liquidity: how should taxpayers with valuable but illiquid assets pay net asset taxes if their cash flow is insufficient?My former colleague Matthew Klein (now a columnist for Barron Magazine) missed one Make several other arguments The net wealth tax includes a solution to the lack of liquidity, which is to pay “in kind” by transferring ownership shares instead of tax.

  • As my colleague Ben Hall said, the EU is working hard to convey the good news that it is producing, managing and exporting more vaccines. Point out. However, behind the bad news are fascinating possibilities- Caroline de Gruyter proposed Foreign policy issues-the European Union recovered from a slow start because it quickly formulated a successful industrial policy.

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