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The Future Role of the State: Guaranteeing Rights

"The modern state as a constitutional state and participative democracy has a universal social security function and overall responsibility for development of the economy according to basic rights. The welfare state and embedding of the markets are core state tasks.."
THE FUTURE ROLE OF THE STATE: ONLY THE STATE CAN GUARANTEE RIGHTS

By Thomas Meyer

[This article published on: ZEIT Online 12/23/2008 is translated from the German on the World Wide Web,  http://images.zeit.de/text/online/2008/52/meyer.de.]


There has hardly been another political term beside the state that has been so politically instrumentalized, ideologically plundered and used as a tool of political hypocrisy. This is a very simple phenomenon.

The experience of the 20th century and the empirical research findings of modern government theory command a maximum of pragmatism for steering social conditions and developments. Control should be left to the market, civil society and the state with their different resources of money, solidarity and power. However the state alone capable of guaranteeing rights is obligated to social regulatory functions.

Among democrats, whether citizens, politicians, journalists or sociologists, no one doubts that guaranteeing the basic rights for every citizen is a core task that the state in modern society may never abandon or leave to others. No other actor has that responsibility. According to international law and the European Union's Declaration of Basic Rights, five categories of basic rights are in force for all citizens: the civil, political, cultural, social and economic.

What is central is education, health care and social security, the right to work and fair working conditions as well as care and the expression of one's own culture and language, not only guaranteeing freedom of opinion and freedom of worship, freedom of speech and assembly as well as democratic collaboration in education and control of one's government.

The state in modern society must guarantee everything without doing everything itself. In its projects, the state is free in organization and producing results. This is the great space for the contest of ideas, actors and parties. In guaranteeing these rights for every citizen, the state is bound to basic rights and binding conditions for its own legitimacy. The state may neither ignore nor delegate them.

Thus it is no question of different political opinions or ideological preferences but an unabandonable obligation out of basic universalist rights, that the modern state as a constitutional state and participatory democracy has a universal social security function and overall responsibility for a structure and development of the economy according to basic rights. Therefore the welfare state and regulative embedding of the markets, especially the financial markets, that increasingly becomes the key for the overall economy, are core state tasks that are not up for discussion.

Obviously the ways the modern state does this and the combinations of delegations and internal work are questions of experience and intelligence. The ideological maxim according to which the state best fulfills its guaranteeing responsibility when it does everything itself has been historically refuted in spectacular clarity. Actors and science are obligated to the open and creative search for the best means to the earmarked goal. The goal, the state obligation to guarantee basic rights, cannot be questioned. As much market and as much civil society as possible is a vital orientation.

Only the state can make the decision in relation to citizens how much state is necessary to guarantee the basic rights of citizens.

Laissez faire and deregulation were yesterday. The state returns with the financial crisis and reconsiders its role. We have collected expert opinions in the project of the Global Policy Institute of the London Metropolitan University and the London office of the Friedrich Ebert foundation.

THE FUTURE ROLE OF THE STATE: PREVENTING THE GLOBALIZATION CRISIS

By Peter Bofinger

The market and the state are not opponents in the current situation. The state of the future may not passively surrender to the forces of the market

[This article published in: ZEIT Online 12/31/2008 is translated from the German on the World Wide Web,  http://images.zeit.de/text/online/2008/52/bofinger.de.]


With the collapse of socialist command economics at the end of the 1980s, the state in the West became increasingly defensive. The market was more and more a doctrine of salvation whose creed consisted in belittling the state as much as possible as an antagonist of the market.

Therefore the striving to lower taxes and state spending worldwide, reduce social control mechanisms and dismantle state regulations was at the center of the economic agenda. In this way, the greatest possibilities for the positive effects of market forces should be created.

The financial market crisis put this paradigm massively in question. In this decade, banks, hedge funds and insurances have done everything to get rid of the fetters of state regulations. The states supported this process through deregulations and largely trusted that private rating agencies would appropriately assume the state function of bank oversight. As a result, this development welcomed by many renowned economists was a self-destructive process that can only be stopped by the state providing the financial system with liquidity and fresh capital.

The market and the state are not opponents. This is a central theory for the future role of the state. Rather the market forces need a strong counterbalance through an efficient state. The market is a system that is often very short-term oriented and therefore in itself cannot guarantee any lasting developments. This is true for the financial markets and for the commodities and labor markets.

The future role of the state must consist in organizing the market processes so they lead to a lasting economic development. Concretely the financial markets must become more transparent and have better risk buffers. The more important task consists in extending the greater prosperity in the future arising with globalization to employees. This can be achieved through universal minimum wage and generally binding industry-wide wages. In the low wage sector, a negative income tax for employees with children is necessary. Through massive education investments and an effective inheritance tax, the state must ensure that equal opportunities are safeguarded in society.

The society must make available the necessary financial resources for the state to fulfill this role. Different from the fears of some globalization critics, states in the last two decades have mostly succeeded in raising their tax revenues in step with economic development.

Thus a "race-to-the-bottom" must not occur. The Scandinavian countries demonstrate that even economies with very high tax rates of over 50 percent can be internationally competitive. As with a good hotel, the price-benefit relation must be right so massive spending goes along with a good infrastructure, an efficient education system, inner security and cultural possibilities.

Thus the state of the future must be a creative state. It may not passively surrender to the forces of the market. Rather the state must actively channel these forces so they have lasting positive effects and benefit as many people as possible. This is the crucial prerequisite for not experiencing a globalization crisis after the financial market crisis. Free markets only have a political future if the majority of voters have the feeling that prosperity can expand.

Laissez faire and deregulation were yesterday. The state returns with the financial crisis and reconsiders its role. We have collected expert opinions in a project of the Global Policy Institute of the London Metropolitan University and the London office of the Friedrich Ebert foundation.

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