Wednesday, August 24, 2011

Taking Social Democracy Seriously

Those who like to make jokes about the French will probably enjoy a report on the BBC News Web site this morning beginning with the following paragraphs:

Some of France's wealthiest people have called on the government to tackle its deficit by raising taxes - on the rich.

Sixteen executives, including Europe's richest woman, the L'Oreal heiress Liliane Bettencourt, offered in an open letter to pay a "special contribution" in a spirit of "solidarity".

Later the government is due to announce tighter fiscal measures as it seeks to reassure markets and curb the deficit.

They are expected to include a special tax on the super-rich.

Before the announcement, expected on Wednesday evening, a letter appeared on the website of the French magazine Le Nouvel Observateur.

It was signed by some of France's most high-profile chief executives, including Christophe de Margerie of oil firm Total, Frederic Oudea of bank Societe Generale, and Air France's Jean-Cyril Spinetta.

They said: "We, the presidents and leaders of industry, businessmen and women, bankers and wealthy citizens would like the richest people to have to pay a 'special contribution'."

They said they had benefited from the French system and that: "When the public finances deficit and the prospects of a worsening state debt threaten the future of France and Europe and when the government is asking everybody for solidarity, it seems necessary for us to contribute."

They warned, however, that the contribution should not be so severe that it would provoke an exodus of the rich or increased tax avoidance.

The move follows a call by US billionaire investor Warren Buffett for higher taxes on the American ultra-rich.

Notwithstanding the reference to Buffett, this may serve as a useful example of how a country like France can appreciate a concept like social democracy, while here in the United States, as Tony Judt put it, we “simply do not know how to talk about” it.  Mind you, there is a “logic of self-interest” behind the Nouvel Observateur letter.  Those who signed it are looking at Europe (and probably the United States) and observing the consequences of draconian measures of austerity.  Furthermore, since Paris has had it own confrontations with street riots, those observations are not entirely detached.  At the risk of oversimplifying matters, while those who signed the latter clearly know a thing or two about being successful in the eyes of both customers and shareholders, they also know that there is more to both personal and corporate well-being than the bottom line of every quarterly report.

It is unlikely that our own country will take this letter seriously, however mightily Buffett might labor to make his point.  Ours is a culture of specious reasoning that first equates social democracy with socialism and then continues a chain of equations that proceeds through communism and ends in totalitarianism.  Put all the equations together;  and you get the knee-jerk reaction that social democracy is totalitarianism.

Well, we may not have totalitarianism;  but we are not that far from it.  As Timothy Snyder recently observed, we now have a representative system that represents only the super-rich;  and the super-rich have only one priority, which is to stay super-rich.  There are a handful of legislators, such as Senator Bernie Sanders, who not only understand social democracy but also strive for it;  but we have a consciousness industry that makes it a point to give them as little attention as possible and to reserve that smidgen of attention for ridicule.  Of course it remains to be seen whether or not this proposal from the super-rich of France will stave off the sorts of street riots we have seen in Greece and Spain;  but it is the closest we have come thus far to the recognition that austerity only makes a bad situation worse.  Give the signatories of that letter at least half a cheer for trying to find a better way to get out of the global economic mess created by those in the financial sector.

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