 Good morning ladies and gentlemen My name is Alfred Cusenbauer Some of you might know me and I have the honor and the privilege today to volunteer for the Institute of Human Sciences The Institute was founded in 1982 by Our friend late Chishtof Michalski who passed away Sadly some weeks ago and the Institute developed into the most prestigious International Social Science Institute Located here in Vienna hosted many impressive scholars postdocs students and contributed significantly to the development of freedom and democracy in Central and Eastern Europe The Institute some years ago in 2005 Decided to engage in a major conversation with our colleagues across the Atlantic and therefore Since 2005 we are organizing seminars Around the topic of solidarity and This year for the eighth consecutive time we organized this seminar on Solidarity in the premises of the Erste Bank and Normally this work there at the debate is Resided by these seminars. So the last two days we were Discussing and arguing in a closed circle of around 25 academics, I Think that the issue in front of us in a quality And solidarity is one of the most crucial issues of our times We have experienced enormous progress what concerns the establishment of equal rights equal rights between men and women between races Liberal rights have been on a success trip all around the world and at the same time We were facing Enormous success in combating the extreme forms of inequality, which is poverty and If you look to the success of Brazil or China or other places where hundreds of millions of people We're led out of extreme forms of poverty This is on the success side on the other hand We are facing Unprecedented levels of inequality around the world mainly Referring to the takeoff of the top 1% in most of the countries and around the globe Of course, there are different types of inequalities Some come from heritage Others are produced by markets but there are also inequalities that are produced by political action and Inequality is a multi faceted issue Where It's very important that we establish some sort of Common analysis what we are talking about and when we were sitting together with our American colleagues Many of them coming from Columbia University a traditional partner of the Institute of Human Sciences We also detected some differences What is the priority prism of how to look at inequality? Of course on both sides the Atlantic it's established to look to inequalities between man and women But for instance we in Europe talk more about also about inequality between the regions While in the United States there is more talk about inequalities within the cities and So you have similarities, but also differences and the unit of analysis when talking about inequality Seems to be a main reference point also when discussing about some of the solutions We have Some extraordinary colleagues today here on the stage Ira cuts Nelson to the left of me Professor at Columbia University And now president of the Social Science and Research Council of America a highly prestigious academic institution Ira just recently published his new book Called fear itself the new deal and the origins of our time A book that has been widely reviewed by the economist in New York at the New York Times And within the next days will become the editor's choice So for those of you who want to read it in English, it's already available Translation into German will follow soon. I think and Ira was also working on the theoretical concept How can we understand inequality? What are the different layers of inequality? And he will be happy to present The theoretical framework for our debate, please Ira Alfred, thank you so much. It's a great pleasure and honor to be here and To recall the many conversations Led and organized by our dear friend Christoph mohalsky at the Institute for Human Sciences in in thinking about inequality this very Rich and condensed word it's sometimes useful To think about it in more than one dimension or or layer There is first the matter of the structure of inequality. What is the actual situation of In terms of income and wealth, but not only income and wealth also in terms of inequalities of cultural assets inequalities of physical space inequalities of access to the political system and to political Influence and at any given moment in any particular place There will be what might be called a a structure of inequality that has developed over time between and among individuals groups segments of society Indeterminate circumstances That's one layer and that perhaps is the most familiar way in which we talk about Inequality the circumstances of relationship and difference among those of us in civil society a Second layer not quite the same as the first might be called the dimension of experience We experience Inequality each of us differently Depending on where we stand within the given set of complex structures of inequality and the word experience itself is Not simple We experience reality in that we we observe it we take it in but simultaneously We process reality we gain experience about that reality We learn about Inequality as we experience it and that's a second layer and dimension a third also Distinctive is a level that might be called the layer of outlook or dispositions The way in which we come to think about inequality the way in which we might be Disposed to act about Inequality What kind of ideological worldviews do we have that We wear as lenses that help us see the world and interpret our experience because structure and experience on their own do not immediately or directly lead to our own understanding of the world and then last there's a fourth layer the layer of action what we do about what we think and each of these layers of structure experience Outlook and action Has a degree of independent indeterminacy that is to say People don't all experience the same reality the same way and people who share Experiences do not necessarily interpret those experiences about inequality the same way and people who interpret Inequality in a common way Do not necessarily choose the same modes of action whether political or social or movement Activities so I'm hoping that in our discussion. We bear in mind each of these dimensions and Especially think about the circumstances that connect these layers to each other When is it that a given structure of inequality whether in Austria or the United States or elsewhere? Generates particular experiences how those experiences Open up possibilities of different outlooks and how various outlooks Connect to or don't connect to various forms of activity as citizens in our societies Thank you. I refer this theoretical framework for our debate. We Immediately moved to practice Elsa for narrow is Professor of political economy at the University of Turin and she is a Widely respected Academic in Europe and Presently is serving as the Italian Minister for Labor social policies and equal Opportunities in the government of mr. Monty Elsa, how would you View the development of inequality, how do you address inequality? bearing in mind the Problems that Italy and also Europe are facing at present and Maybe you could link the question of inequality also with the debate that is currently going on in Europe Juicy Italian migrants that would like to give our special welcome Minister Small flyer Is the minister and somehow Perfection of the title of this conference because she's in reality And that's why most of us are looking for jobs In the last year there has been an increase of 30% of Italian residents of Rome So we are now Distributing the small flyer where we have a list of the most interesting elements of the inequality policies of the minister I Thank you very much for this additional introduction And I think the minister now has the chance on basis of that additional introduction to explain how she views the development the challenges and The possible answers, please Elsa. Well, first of all Thank you for inviting me Second, I don't think I will answer But I would really like since I'll be here also in the afternoon to meet those Italian people that were critical to my Choices to the choices that the government had To to do in a very difficult situation I would very much like to have a conversation with you now I'm asked here to give my ideas and possibly something Which I may drone from my own experience Which has been very difficult But I beg you I would like really to meet you at the end of this meeting which is for a general audience in in a foreign country and I really beg you to come early in the afternoon Somewhere we can arrange a meeting and I will be ready to discuss with you and I have many arguments to say that what you call the unjust in Political choices of the Monty government are not so much unjust particularly since you are young and there is certainly one dimension Which is very important in our choices, which is the inequality among generations and I have worked to reduce the inequality among generations because public debt the social security system that was before our Reform was heavily on the shoulders of the young generations and I am Also ready to discuss the labor market reform that I had to enact and This labor market reform which is done in a severe Recession in a severe recession and so has not produced the results up to now But it's again. It's for the young. It's for Let's say making Italy a more attractive country for investors So that the young are not compelled to go abroad and may be young people from Germany from Austria will Within a few years come to Italy, but I would like so I am inviting you. I'm here I'm ready to discuss. I have a couple of hours and I can devote entirely to you but May I just say something on Of course First of all, I am not the typical politicians Politician I was working at the University of Turin when I received a very strange telephone call saying Are you ready to join my government by Mario Monty? And I said yes within Less yes less than a couple of hours. I said yes because I had and still have much confidence in Mario Monty and Because the situation in Italy in November 2011 when our government started Was almost desperate and it was not only for Italy But Italy is not Cyprus. Italy is not even Spain Italy has much higher weight on European destiny and so the idea that there could be a Financial crisis of our sovereign debt, which is very high and which is the result of previous policies That we are supposedly very generous and Inspired by solidarity Instead they created this huge debt So the idea of a financial collapse would have threatened the euro and Certainly the same idea of a united Europe because Italy is one of the founding countries And in this situation with a perspective of a financial crisis The Italian politics was simply blocked They could devise no solution out of the crisis. That's why and not out of generosity That's why they asked and they declared to be ready to support a Technocratic government, that's why and It was a very strange majority Because the majority was made of two political parties That had spent let's say the previous 15 18 years Fighting each other Not thinking of the country but thinking exactly what to do to To defeat the other one to destroy even the other one so that gives you the idea also of a Political class that had not devised a strategy for the country in a situation of complete change in the world So we were asked on the verge of a financial crisis and The one thing I want to tell you is that there is a huge distance I was already telling you this the other day a huge distance between being a university professor and Being a part of a government that has to make choices for people for real people And so I was asked to enact the social security reform the pension reform It is true that the reform is severe. It is true But again, I had less than 20 days and It is true that we had to act With rapidity also because all the past the pension reforms Had allowed the for very very long transition so that they had designed a nice pension system, but to be applied in 2030 waiting for reform to be enacted or to be implemented is Something that you it's a luxury you can enjoy when the economy is doing well You can't enjoy when you have a financial crisis There and this is the first thing the second one. I was told okay There is a labor market reform mind you that these two reforms were commitment made to the European Authorities by the previous government by the Belosconi government. They were Commitment stated so I tried to do the labor market reform with Social dialogue this one was with social dialogue meaning that I had the meetings Endless meetings with trade unions and the association of entrepreneurs and the labor market reform is something where you immediately realize That the solidarity is very little among parties that have in different view completely different views so what had a Technocratic government to do trying to reach an equilibrium Between opposing views opposing Demands trying to reach an equilibrium the equilibrium again Is for the young because we know in Italy this is because we all talk about Solidarity but when you are when you have solidarity for a small group of people in a population and you Exclude the others that mean the young women and elderly workers From the inner circle of the labor market, which is highly protected then you can say that solidarity and Equality are not in practice. Maybe they are just words so again it's difficult to enact a reform which goes across generation across gender across Regions because certainly we have in Italy a very high divide Which has increased in the past 20 years Between the north and the south of Italy and so having to choose in this mess It's not simple But there only one one thought more It's true that inequality has increased in Europe in the US also And this is not due to the recession in my view it is much before the recession and It is I think there are many causes, but one is the excessive belief that we put in markets in The past let's say two decades. We consider that markets could deliver Magnificent results and that if inequality would increase that was a little price to pay Now we know also because financial markets are Responsible of the crisis that started in the financial sector and then spread over the economy So we now know that the fate that we put in markets was too much And so we are left without any Paradox and that is the real problem that in Europe we face today We need to look for solutions But certainly solutions are not to come in a time when you have to enact severe reforms because you are strangled by let's say Financial disequilibrium and very high deficits and debt. Sorry Thank you, but you say that I want to meet them Yeah, yeah, I think the offer is clear and everybody heard it You're ready to meet them afterwards and to agree on when and where you meet in the afternoon. I think this is a very good initiative and I think Our friends will be democracy and our friends will be ready to do so so not to confuse Protecting vested interests with solidarity. I think it's It's a time to Introduce Michael Sandel who recently wrote a new book what money can't buy the moral limits of markets Michael is professor of government at the Harvard University and has taught political philosophy since 1980 Some of you might have followed his courses also on YouTube and At least from my personal experience, I can say you have quite a substantial fan community here in the country and also younger Kids are following your introduction on justice Today Michael is with us and we are very pleased that he's here And I think he will in a way complement or react to what Elsa said by presenting his idea on What the concept of solidarity? Could help in order to bridge some of the most ardent inequalities that we face You're welcome Michael. Thank you. Thank you in recent Think it's true that in recent decades The moral and civic basis of solidarity has been eroding and I think for two reasons Both related to our theme one of them is The rising inequality in our societies in recent decades and the other is something that's related but different and that is the growing tendency of markets and market values and market thinking To reach into spheres of life Previously governed by other non-market norms personal relations health education civic life increasingly every sphere of life is Dominated or governed by market thinking and market values and I think these two tendencies together Make solidarity Hard to come by and let me try to explain why There are at least two different reasons to worry about The rising gap between rich and poor one reason has to do with fairness to those on the bottom Who lack access to? income and wealth and opportunities And that's a familiar reason to worry about inequality, but there's also a second That is subtler But deeply damaging to solidarity and that is Against a background of rising inequality the tendency to market ties everything makes it sharpens the sting of inequality when When money only buys material goods or luxury goods or yachts or fancy vacations Or BMWs then Then inequality matters, but it doesn't matter all that much But when money determines access to a decent education to decent health care To living in a safe neighborhood rather than in a crime-ridden one when when it dominates access to political voice in political campaigns When markets and market thinking govern all of those domains then inequality matters much more and Solidarity becomes more difficult to summon Democracy doesn't require perfect equality, but it does require That men and women from different social and economic backgrounds from different walks of life Share enough of a common life to think of themselves as fellow citizens and What happens when there is rising inequality and when markets govern so much of life is that? the affluent and Those of modest means increasingly Live different ways of life. They don't encounter one another in public places in the ordinary course of life We we live and work and shop and play in different places We send our children to different schools and this is damaging to democracy because There are fewer and fewer occasions when in the ordinary course of life We bump up against one another and this matters to solidarity because it creates a condition where Not only does inequality Hurt those at the bottom But even those of us who may enjoy access to all of these goods Experience a thinner hollowed out kind of democratic citizenship so I think this is This is a reason to worry about inequality and the rampant commodification or marketization of social life. I would just mention one other impediment to Taking solidarity seriously as a moral and civic project It's a way of thinking about solidarity and civic virtue that many economists many Mainstream economists believe Though they never quite prove it the idea is this Solidarity civic virtue Concerned for others fellow feeling There's only so much of it in the world or in us and therefore we should try to conserve it for those moments when we really need it a Great expression of this I Came out some years ago there there was an a sociologist a British sociologist Richard Titmuss Who wrote a book about blood? how to How to get people to donate blood for those who need it and he compared the u.s. In the uk this is the early 70s and In the uk there was no buying and selling of blood. It was only donated in the u.s. You could donate blood or You could buy and sell it for a price on the market he showed that adding a market to blood actually Led to a less efficient system of blood collection and reduced the supply now from the standpoint of standard economics, this is a Paradox because normally if you let people establish a market price you will get more of it rather than less so There was a famous economist Kenneth arrow Distinguished economist who wrote a critical book review of this account of blood And he found it puzzling Because he didn't see how adding the choice of buying and selling alongside the ability to give freely could possibly Reduce the supply how could it? well What he overlooked and what many economists overlook and many of us overlook when we're thinking about social life is Sometimes putting a price on something changes the meaning of that good and in this case it changed the meaning of donating Good at the good of blood Arrow said this like many economists. I don't want to rely too heavily on ethics rather than self-interest I bet I think it's best on the whole that the requirement of ethical behavior and solidarity Be confined to those circumstances where the price system breaks down Because we do not wish to use up recklessly the scarce resources of altruistic motivation So the idea is this The idea is this that solidarity and civic virtue and the generous virtues are like fossil fuels that are depleted with use and That's a mistake. It's a mistake. I think the metaphor is Misleading we should not regard solidarity and civic virtue as Commodities that are depleted with use we should instead regard them as Muscles that are strengthened with exercise and so One of the defects one of the defects in the market-driven societies that we have Come to inhabit is that it lets these Generous virtues languish and so to renew our public life It seems to me we need to exercise them more strenuously Thank you Thank You Michael some Analysts think that the unprecedented levels of inequality that we achieved to a certain extent also the result of the enormous development of financial capitalism since the end of the 70s This of course can also be disputed But there is some evidence for it Not only convincing one And therefore we thought it's useful to invite somebody who is coming from the heart of the financial markets some would say He is the master of inequality Others would say Maybe he is the master of quality But anyhow Andreas Treichli is the CEO of Estepank and not only that he is steadily interfering in public debates and making his voice heard and As you heard already today the Estepank With its foundation is contributing also to the dialogue within the society on some of the most ardent issues so with the view from Inside the beast How would you? How would you how would you address the question of inequality and solidarity Andreas, please? Okay Let me maybe Talk a bit about The the the European context of solidarity and inequality because we on on paper Europe looks to be the place in which Solidarity is the highest and inequality is the lowest Europe looks like being the continent that Has the highest amount of solidarity and the lowest amount of inequality. We have Seven percent of the population of this world We produce 24 percent of the GDP of this world and we have 50% of the social transfer of this world That looks good Well, we don't talk about is the fact that only 1% of the combined European GDP Actually goes into Europe and that 50% nearly 50% of that 1% Goes into agriculture and it goes into agriculture of The wealthy countries in Europe so only a very small portion of that actually is spent on Europe Now a few weeks ago we told the Cypriots That The guarantee that all politicians in Europe Gave on small deposits is not valid for them anymore Maybe because we were a bit nervous about the anger of some Russian oligarchs. I don't know what the reasons were for that But we told them 13 years ago We gave the euro to Europe and Southern Europe and with that euro Southern Europe was able to afford things They could have never afforded without the euro They bought goods they could have never bought they build roads cultural institutions They bought weapons and whatever They could have never afforded Without the euro What we don't talk about is that over those 13 years German French Austrian Dutch Swedish companies made huge profits on Those exports to Southern Europe Banks finance it and made huge profits on those exports to Southern Europe Northern European governments Got huge tax receipts out of those exports To Southern Europe and now we tell them What you did was wrong Now we want you to cut your social payments We want you to cut your wages We want to cut you to cut your pensions You Southern Europeans now you pay For what we sold you that's solidarity the debt burden of Southern Europe created millions of jobs in Northern Europe and it improved our productivity and Now we tell the Southern Europeans to speed up to improve their productivity Maybe so we can start selling them stuff again instead of helping them that they can sell stuff Now, okay, we spent 500 billion Euros over the last year to help Southern Europe. That's a lot of money But if you look at the part that for example Austria played in it, and we got our fair share in it our share in that was a fraction a fraction of What we spent on saving a shaky Corinthian Bank now and This story is not yet over Now we know we we we truly We dislike Europe politicians and we have a reason for that we dislike European bankers and we have a reason for that the Northern Europeans look down on the Southern Europeans The Southern Europeans are not very happy with the Northern Europeans the Western Europeans are feeling threatened by the Eastern Europeans When I was a kid and I watched TV It was black and white then and I saw Charles de Gaulle. I was proud When I found out as a kid that Italy not only has Spaghetti's and a beautiful language, but that they produced fantastic cars and that Northern Italy was a fantastic region I was proud. I was proud when I Found out that Germany and France were getting closer When the iron curtain broke down, I was proud When I saw the first Slovak and Polish cars who passed by me in in Porsche Cayenne's In 1949 it made me happy. What makes me happy about Europe today? Europe has lost its solidarity No If you look at the US, I think probably 50% of the Americans Admire Obama But 100% of the Americans have emotions for Obama Who has emotions for Barozo or van Rompuy? We have solidarity in Austria We have solidarity in Germany. We have solidarity in Sweden. I Said a few very rich Greeks. There's also some Solidarity in Greece. There is no solidarity in Europe anymore And if we don't get it back Inequality in Europe will grow. Thank you Elsa you may be surprised to come to Austria to the North and And meet I'm going to Norway Okay Well, they even haven't joined the solidarity of the European Union because they want to Consume their revenues of their oil resources on the earth. So this is a different story But you're finding and meeting here a protagonist of the case of the Mediterranean and of the European South as an expression of the Necessary European solidarity there have been public expressions in in Italy in Greece in Spain in Cyprus That were already indicating that the tensions Within Europe not only economically, but also politically are increasing How do you view? European politics With respect to a necessary joint endeavor to get out of the crisis Do you think that the Troika and the Germans and others are Imposing something on you upon you that you really do not like and that you wouldn't do without this enormous pressure or is there an element of Differentiation where you think there are things you should do and others where more solidarity in Europe would be helpful First of all, I have to declare openly that I am very much pro Europe so I was in Harvard fortnight ago and I had debates with Young Italian students the air PhD students or young professionals and I noticed That seen from US Europe is weak the euro is too strong and condemning European manufacturing and workers and so the opinion that euro Maybe has not been such a good choice and some country should rethink participating in the euro Was strongly supported by I wouldn't say minority, but Well, let's say off-and-off the opinions were quite divided and I strongly supported Europe and the euro My view is that the euro is not enough So we have to build more Europe on what we have already done not less I also have the conviction that I know that in Greece in Italy There are sentiments That I would say Cynical politicians are ready to support and I stress cynical politicians That say okay, we cannot continue with this euro the the euro has Reduced the purchasing power of retired people and has made Well our manufacturing sector, which was a pride of our country weaker and weaker But I'm confident that although The structure of the population is pending towards the elderly the young are European they are just European they could not think of living with the old lira Could not think of going to France and having to show documents So they are European and this makes a difference in my view between what some leaders say and What the public opinion is with respect to Europe? a completely different thing is how should Europe move towards having more Europe and this I mean for example a policy to support occupation a Policy a macro policy not just the the money and Markets because we have the market European markets are there not for Let's say for people not yet at least So we have to move in that direction my view is Considering Italy is that okay. We have to show that There is a saying in Germany we cannot pay for all those Italians enjoying their son and retiring at 57 and Enjoying life and the climate and so and lying under the shadow of the olive tree Exactly a while staying up in northern Germany with the rain And so okay That's why again a Technocratic government was asked to make Well, it's not my expression, but the expression that was used in Italy for our Our government was you have to do the dirty job That is and so meaning okay, you have to do reforms and Those reforms are there to show any German that will say, okay Italians are retired it early not any longer. We can say now not any longer Because we have reformed the labor market is too rigid Not any longer. I can say Not any longer. So is okay We want cohesion in Europe, but we also have to have to show That we are doing seriously because it's true again I have to go back to what I was saying before we have a large that Spain has a large that Portugal has a large that Greece we all We have built our work Solidarity systems which allowed for a lot of privileges that is the bad thing because Solidarity is a good thing, but privileges are not good. And so if you have a system that are apparently inspired by solidarity but Allow a lot of privileges Then there is no transparency so reforms are also there to make system transparent And to allow for the true solidarity that welfare system should endorse should enact That is the problem. So I really think I just want to mention one example in my Ministry I worked a lot With the German Labour Minister Ursula von der Leyen We have become friends I can say and She was very supportive of policies towards Encouraging apprenticeship in our country because we know that Apprenticeship is good for the young It's good to give them more stable Labour relationship and is good for their productivity It's good to make a closer Relationship between employee and employers and so since they have a lot of experience Good experience because it's certainly true that apprenticeship has been perhaps the most important factor to reduce Youth unemployment in Germany since the early 2000s and Then we would like to follow this path and they have helped us and it was we Organized the confidence in Naples, which is a very difficult city Naples is exactly the city where you think that apprenticeship is the kind of Thing that you want to do and There were protests a lot of protest and newspaper and she said that not don't worry Elsa We are used and I am a trained politician. So I am used to protest. I'm not by the way anyway so and We did this confidence. It was not a confidence for politicians It was not a confidence for politicians to come and say good works. It was a confidence to put together firms German and Italian firms schools young people Teachers to show how we can Fill the gap between the school and job and this I think we need Thousand of these initiatives and it showed the good face of German I said it's the first time that Germany is not asking us to cut some kind of public Expenditure is coming to help us in a good direction And so I think this is a kind of solidarity that we need to pursue More and more in Europe. Alfred. Could I could I ask a question? Of course a Question of the European participants a Naive question from an American outsider looking on About the European project Am I impression from the outside and it could be wrong is that the crisis of the euro reflects the fact that Europe as an economic project Has outrun Europe as a civic and political project. I always thought that The founders of the European Union and the dreamers saw economics including the euro as instruments of a larger political vision and civic vision and So if that's right, then my question is what became of that part of the project and why Did a gap open up between the economic project which was always originally seen As a tool as an instrument to this bigger vision what became of the rest of the vision Not only in terms of shared political institutions and policies But also and as I understood the the original vision. This was the ultimate aim Cultivating over time a shared European identity shared civic identity What what became of that? Dream and that Conception big conception of the European project or do I have it completely wrong? No, no That's a good question and the rest will tell us to whom we did sacrifice the European dream I think I Think I Completely completely correct. I think it's even it's even worse I believe that the euro actually brought out all the inefficiencies of Europe the lack of a common Solidarity the euro actually helped to show us that The the emotion and the solidarity in Europe is not there. We have lost The the pursuit of a political project and we concentrated over the last 13 years on the pure economic project, I Think it's it's very simple. It's and we have that expression in Germany You can't be half pregnant and this is exactly what we're doing in Europe and nobody really we said we want more Europe I disagree either we go for Europe in total, but we forget it We have gone that way either we finish it and we don't have a lot of time left if in my view during the next 10 years We don't create We don't go very rapidly Towards a state a union. I don't know anything Better. I don't know whether the United States is the best form of a union in the world I don't know but I I don't know a better one I will have no respect for the political Europe as long as I cannot vote For the person that runs Europe and that means that the Portuguese The Spaniards The Swedes all together we have to go we have to become a form of Political union. I'm not saying that I love politicians that I vote for but if I can't even vote for them It's tilt over over if we don't go that way. It's done with Now that might be a way to but that to me means that at some point in time The Euro will be gone too and we're back to square one If we want that that's okay, then Europe will be a very nice place It's gonna take 15 20 years until the Chinese don't need the German export imports anymore They will produce their Volkswagen themselves the last Seven the next seven Volkswagen factories will be built in China In the last seven years. There has been no car manufacturing plant built in Europe If we continue like that, we can become an amusement park for rich Chinese and Indians Of course, there is this caricature of the future of the world where the Chinese are the manufacturers and the Americans are again the farmers and The Europeans will turn into the Disneyland of the world I have to say Even if this sounds compelling I am not really convinced this this will be square one because what we should not forget is that Europe for centuries was managing social change by war and What we are in right now is one of the most fundamental Yeah, social change that the world experienced on the technological level the economic level cultural social level and my concern is That back to square one would mean or could mean that Europe again is adopting the old forms of managing social change and not the modern way of Moderating social change that we developed since 1945 so the alternative to Europe is not The nice village the peaceful one where we might be unimportant in the world But we have our nice life the alternative to Europe is The practices that have characterized our continent over centuries Also I'm an economist so I hesitate to enter let's say it to rent that I Do not know that is European politics, but I think that the most single factor that prevents Going rapidly towards a united Europe is fear exactly your team fear of losing something fear national fears or even at the smaller level regional fears fears That dominates hope. I remember I was in some Eastern European countries as an expert asked by the World Bank to do consultation on pension reform and I remember talking to for example elderly people and I clearly remember They said but do you think we can ask for something more or do we risk? Destroying our hope of joining Europe so there was hope in their words and even in their disposition towards accepting sacrifices Because that the idea of being within Europe for them was a great hope was not fear now I think fear dominates the European scene. It's fear of what's happening at their the whole world and this is combined with the lack of strategic political views That is we can have Good politicians are those who see ahead of most of other people and so they see the design and they indicate Perhaps we lack high standard politicians in Europe and Maybe we mostly have bureaucrats that are of a different scope It's a problem. Maybe it's part of the deterioration of our society so we cannot have very good politicians and have let's say Other categories being just modest There is a general tendency So it's difficult that there are many reasons but it's difficult to just change and I don't believe that Technocrats can be a substitute for political visions We're not talking now about the quality of politicians this would Would mislead our debate but As you mentioned fear Would be short if we if we Well politicians and bankers always compete about quality When fear was mentioned, I think Ira as the one who studied that issue carefully has to come Well the listening to this fascinating conversation propels the question What kind of moment are we in? and What is the meaning of a fear and fear fullness? You know life is full of ordinary risks. We we take chances all the time. We we buy a home or we We take a chance that will go up in value once we thought it always goes up in value. We learned otherwise When we marry almost half of marriages don't end well, but we take a chance and What is ordinary risk? ordinary risk is a circumstance in which we think We can assess the probabilities of taking a chance, but there are some circumstances Where a layering of uncertainty? Whether economic uncertainty social uncertainty political uncertainty Become so great that we find it very difficult to assess the degree of risk We can't identify the parameters within which we're making choices and that kind of Circumstance induces fear fear is A circumstance a situation in which a combination of context and motivation occurs in which we find ourselves thinking and acting without guides from the past That persuade us that we know what to do In the if we think about thinking of Alfred's remark about the past in Europe If we think about the the interwar period the 20s and 30s We had circumstances that in part the product of the Great slaughter of the first war and then of the the utter collapse of capitalism the rise of Dictatorships that claimed to be better democracies Because they jumped over all the procedures of messy Democratic life of parliaments and parties and polarization and the lack of a strong cell sense of public interest When we we had the layering of those experiences of violence and economic collapse and of Democratic collapse Not just this continent, but the world was charged With fear and the consequences were deeply ugly Devastatingly ugly that produced a world in which Many experiments were conducted some dreadful and Some as at least parts of for example of the American New Deal Proved to be beneficial But the degree of uncertainty Was great and the amount of suffering that followed enormous We are not quite in a moment like that interwar period We should not exaggerate our circumstances Generating fear, but we should be concerned and not take for granted That we simply live in and will continue to live in a world in Politics and social life and economic life of just ordinary risk And when we get a layering of sources of fear We find ourselves in circumstances where ordinary democratic life Comes to be called into question because the democracies are thought to be and are seen to be Institutions that find it difficult to solve the problems of the day And when that is called into question cynicism replaces solidarity And narrow solidarities replace broad solidarities And in those circumstances We cannot simply take for granted as givens The decent normal operation Of the decent normal oscillation Of partisanship and politics in democratic life One last remark, it's not just in Europe that Skepticism about democratic politics exists In public opinion polls in America people are asked to evaluate our institutions How well is our parliament, our congress doing 11% say Well One house is democratic, one house is republican. It's not a matter of partisanship It's a matter of a sense that the political system can confront the large problems of the day Under democratic procedures and when that gets called into question We really have to be fearful Very important are the danger of Cynicism Replacing democratic procedures And civil Civic equation Of interests Michael, I ask myself How do you think Solidarity Under these circumstances Could be promoted And even if we will not find Let's say an ultimate solution to the problem How could we at least decrease These tensions, these tendencies of Degenerating Confidence in democratic institutions And in the institutions that should provide More equality One of the striking features of democratic societies, almost every democratic society I'm aware of today Is the widespread frustration among citizens with the way political parties are Working and with the terms of public discourse I think I think people sense that economics has crowded out politics Democratic politics and that the terms of public discourse are impoverished hollowed out Empty of larger meaning And I think this is related to The Trends we've been discussing In economics, I think it's related to The tendency of market values and market reasoning To dominate public discourse over the past three decades So at the same time that we've had a rising faith that markets and market mechanisms Can define justice and can identify the public good At the same time We've seen a rising frustration With the emptiness of public discourse And I think there's a connection between these two Tendencies The appeal The allure Of the market faith Of the ideas that markets can allocate all good things in life The appeal of that I think is not just or mainly That markets deliver the goods that they bring economic affluence and prosperity I think it goes deeper. I think it's that markets seem to spare us the need to engage in Public debate About hard Ethical and even spiritual questions Because if we're really to have a debate about where markets serve the public good and where they don't belong where they may crowd out other values We have to have a public debate as democratic citizens About the right way of valuing goods and social practices Whether education or health or national security or the environment or civic life or family life and those are fraught Deeply contested questions We hesitate to bring Questions of the good life into politics because We realize we live in pluralist societies people disagree On the meaning of the good life around how how to value Goods and so we have a tendency to try to keep moral and spiritual questions Outside of public discourse to ask One another to leave our moral and spiritual convictions Outside before we enter the public square and that I think Leads us to embrace market reasoning as as if it were a neutral way of deciding these questions Now markets are not Neutral they supplant actually democratic deliberation about these things But this is why I think The the last three decades of market triumphalism and market faith and putting a price tag on everything Have contributed to but also expressed The reluctance to engage in recent public debate about big sometimes controversial moral and civic Questions and so if something like that Is right if that's what's been going on Then to rebuild our civic life and To address The question of where markets belong We need to find our way to a better more demanding kind of public discourse from the kind to which we become Accustomed not the beyond the narrow managerial technocratic terms of public discourse which inspire no one People want people are hungry for a public life of larger meaning and purpose They don't just want to check their moral and spiritual convictions at the door when they enter democratic life And we shouldn't insist that they do even though not because we're going to agree And the morally more robust kind of civic discourse, I think would be more clamorous Maybe more contentious, but I think it would also be a healthier kind of public discourse It would enable us to contend with some of these questions about markets and inequality And I think it might Provide a basis for A better democratic citizenship Just a second I I think that's a thrilling idea However No, uh that brought me to the following Idea the thing is The 20th century to a certain extent has been Dominated by authoritarian Ideas and regimes be it fascist or communist or whatsoever Uh Both embarking from the Conviction that Most of the decisions are taken away from the individual and going to some sort of oppressive state apparatus, right? and uh on the other hand you had the Market allocation idea That for quite some time was operating within some limits but the Disappearance of authoritarian regimes Seems to have released Also the self set boundaries to our market driven economies and At the moment when it might have been useful We didn't say stop Because we allowed that the principles of market economy were also Translating into the principles of the market society. This is how I understand what you're describing. Yeah, so we are We experienced the cruel authoritarian Oppressive state society And now we experienced the completely deliberated market society and what seems to constitute the necessity for The conversation and the discourse you ask for is That we need Something new where we put in balance again What should be to the market in delivering goods economy? What should be left to the autonomy of the individual? Where are Limits also of society coming in into my sovereign individual decision-making process And what are the tasks of society and what we are doing together? So we are In a way back to the most fundamental questions of political philosophy as a result of the fundamentalist experiences Of the 20th century Elsa, I had a question. I just would like to let's say Put practice into our discourse, which are really fascinating But let's take what in my view is perhaps the most important problem in europe now Which is unemployment and particularly youth unemployment So we can say as a matter of principle that Having well that working is a right to the individual Because working well makes the individual independent Fulfill his her life And so and so so in principles, we all know the basics But how can we reach this in practice? If we look at markets, we have very different Recipes we have for example the spanish did a reform that was Perhaps the most radical liberalization of the labor market And the result is precariousness of particularly some segments Of the labor market the young again women the elderly Which Only means which means that the demographic group that result is adult men They are typically the most protected in the labor market Okay, so I don't think that going towards a Solution which is complete liberalization is good because it can be It can relieve An employment in the very short run, but it doesn't create the premises For a stronger labor market performance On the other hand if you put Some constraints Maybe this is not consistent with the the phase we are living in Which requires as andrea was saying A reduction In european wages, so this is Said every day at the european institutions level But we don't know a reduction in the wages in some countries They are already quite low and i'm taking italy as an example as a prominent example So we have to take other rules Which are perhaps Longer and More uncertain which are Trying everything that can enhance the productivity So how can we go from principles that are very important and that we all share To putting them in practice In a decent way that we as society can accept For all europe and for all the world. How can we go from principle to practice? The practice will be answered by andreas, but ira will come in for a second I I just want to observe that in the united states We've had a A long running history of a part of a young population Almost without hope of work of wage labor work That is in at the very beginning alfred you observe that in the united states we seem deeply concerned with the circumstances of inequality And lack of solidarity in our cities and that is in parts of our cities We have young people With unemployment rates over long periods of time not just since the great recession That are higher than the spanish Levels even 30 and 40 percent today in central city deeply poor Primarily racially minority neighborhoods People between 16 and 24 have 50 percent Unemployment rates And in tandem with that long term Circumstance we have The highest Incarceration rates In the world So there is a kind embedded In the social reality Of the west is an example of a of a kind of nightmare That occurs when opportunities for work are absent for generations young people over a long period of time But this Leads me to a reflection back to the issue of The content of politics and the role of ethical and moral discourse I I'm completely in agreement with michael about The dangers of having market talk and market practices overwhelm All spheres including the political But I think it's we need at least one more step before being confident About the entry of ethical And moral and cultural divisions into the heart of political life And that Intermediary piece has to do with the character And belief in our institutions As decent mediators Within which Deep ethical differences Can be adjudicated Because absent institutional confidence and institutional effectiveness And institutional decency The entry into deep ethical differences Can under the worst circumstances and especially under circumstances of deepening inequality Produce many small Solidarities which come to be at war with each other and some of which can attach themselves to anti-democratic impulses to the denial of rights of others and When there are situational democratic majorities to the imposition of one group's ethical preferences over And others I know you fully would be in accord with the importance of institutions. You've written eloquently about it But I think we shouldn't Think about the health of democratic politics Simply in terms of the character of our discourse But connect the character of our discourse to the depth and ability of our institutions And in turn to think about the pressures put on those institutions By persistent and deepening kinds of inequality economic cultural physical and social Andreas I will address you now if I may As an enlightened economic actor that Who is able to look beyond His self-interest or the interest of his institution When Elsa Mentioned about what is the talk of the european institutions To put down wages in europe In order to reach Again Competitiveness In your view Is reducing wages by whatever means The only possibility To rescue some sort of european recovery The only way to come back to growth Or should we not also think about What possibilities of sharing We have in europe not only In between nations and countries But also within the population we have In order to Come to a more equitable Distribution of income and wealth That might help us To create the sort of demand we desperately Need for the recovery of our economy I think it's it's a very It's clearly it's a very very serious situation and cutting wages Is not a solution Cutting wages takes away gross potential Cutting wages is just one of many austerity Measures and we all know that austerity does not create gross Now I think that it's a very very difficult Micro economic situation that we're in And what is true for for companies is true for for governments You cannot grow a company by cutting costs all the time You have to increase revenues If you all you do is cutting costs and kicking out employees one point in time you're dead And it is the balance of the two that is so hugely important and that is so hugely difficult At the moment in in particularly in southern europe But it's becoming also increasingly difficult in in western europe I know it's not extremely enjoyable to be a banker for the moment but to be a Italian politician for the moment is horrible That must be I really don't envy you for because it's clear it's a huge hugely difficult task to manage rightly between Gross and saving How do you do that now? We all know that europe as a whole is less indebted than the united states We all know that you know the united states To clean up the financial Crisis have led more than 300 banks Taking out of the market In europe with the exception of spain And including italy we have not taken any banks out of the market We're still feeding banks We're not cleaning up the financial sector. We're not helping To to to set the economic balance right in europe So I really think it's a It's we're endangering with misled economic policy in europe. We're endangering The democratic values of europe for the moment. I think it's a hugely dangerous situation Because what we see for the moment is that it was the exception of the united states that has started to Reindustrialize the country not only cleaning up the financial system Then now we have now austrian companies investing in the united states because the conditions are better there If we look aside from the united states, which are the countries that are prosperous for the moment that are growing Are those democratic countries? Is russia a democratic country is china a democratic country? So the united arab emirates Do you know how much These united arab emirates invest in education You know how much they invest in culture, you know, how much they invest in social welfare And what do we do in europe for the moment In addition, I think it's all a matter of timing We have a country in europe that has shown very well how important timing is it's sweden They have had enormous tax burdens Enormous tax burdens companies paid 70 percent tax plus income tax was 80 percent plus In the prosperous period of time when sweden was growing And now when the economy went down they're cutting down taxes In order to help the economy grow again and that's successful with it And what do we do in france? What are the attempting now in most of the european countries? We do exactly the opposite I know I I really think that the lack of coordinated Senseful economic policy in europe on a european level and we don't have it Is endangering the democratic principles of europe and i'm scared about it So if the standards tomorrow is Maybe writing about today's event He gave some Justification for writing andrea strachel dash Take away the money from the banks And put them into jobs and culture and social expenses This this was a voluntary service to the standard of course Michael please To respond to a strands in the discussion I agree with I read that institutions are important. The problem is democratic institutions aren't working very well in most democracies And political parties are not working very well And my hunch is that we won't be able to revitalize democratic institutions without changing the terms of public discourse And to do that we need to rely on I think not only institutions But also on civil society and on social movements where We can begin to reimagine the terms of civic life and then Maybe with any luck and hope political parties or established institutions can be forced to respond or to To be Revitalized and transformed I I accept and I understand the worry That a morally more robust public discourse might open the way To intolerant voices To majoritarianism To some trying to some trying to impose their values on others And this is a familiar argument for trying to keep public discourse um from engaging with Conceptions of the good life But I think It's a mistake for the following reason When we see we think first when we think of bringing ethical argument into politics We think about the image of the teleband comes to mind or of Christian fundamentalists or the darker strands of anti-immigrant populist parties And they know how to mobilize moral passions In spiritual ideals they do and that's why the rest of us shrink from it But I think we shouldn't shrink so quickly I think we should begin by noticing that what empowers those groups And makes our public life vulnerable to them is precisely the emptiness of mainstream public discourse with regard to values because Technocratic managerial kind of public discourse may seem To be a kind of safe neutral space keeping all of these convictions At a distance But No democracy can abide that moral vacuum At the heart of its public life for long And so that opens the way for narrow intolerant voices and gives them greater strength And prominence than they would have if there were a more varied more pluralistic ongoing argument about questions of the good life and how they bear on On politics and democracy I don't have an answer else in those better than I how to design programs to deal with The staggering levels of youth unemployment. I would just make one observation if We're to aim at energizing public discourse To grapple with those hard questions We have to find a way. I think to address them not only in terms of the Technical economic questions that you know about it, but most of us citizens don't Takes the most pressing issues facing the welfare state that that we've been discussing youth unemployment At one end of the generational spectrum pensions retirement healthcare at the other So we've got youth unemployment and education We've got pensions and the healthcare Underlying the choices we make About how to deal with those challenges and what resources Are certain questions about the terms of relation among generations And we've talked about solidarity across classes and across parts of europe But there's also the question of the solidarity across generations And that I think is at the heart of some of the toughest questions that welfare states face to get today And if that's the case then what we really need to discuss Is a new social contract among generations which brings in questions about the life cycle And about the kinds of help and support Needed at different Points along the life cycle it brings questions of family life And how to understand the terms of relations among generations, which is to say it brings economics And policy questions directly into contact with competing ideas. We won't all agree And what a good life Looks like in its generational Trajectory and so having that as a making that Aspect of these choices explicit Would be one example of what I mean by Being less squeamish and less reluctant About engaging directly with questions of the good life Even as we grapple with these very Concrete policy questions of youth unemployment Education pensions healthcare and how to accommodate their competing claims Thank you In in i'm listening to michael's Very appealing and eloquent thoughts I was thinking about what kind of solidarity We need now within which that kind of discourse could take Place and in a democratic world We need solidarity about the following values The importance of the rule of law The importance of government by consent the sense that Uh Both individual and where appropriate group rights are truly respected Where toleration Is a value And where the system of political representation Is looked to As the site to adjudicate our differences About deep values Absent that kind of solidarity that's a solidarity about preferences about political values What What should animate the context within which we can decently debate our differences Differences both about how to cure economic problems Differences about the role of government differences about the good life What concerns me most today is that The combination of longer term trends that were generating inequality before the crash Combined with the deepening Of crisis caused by the great recession Deepened by political policy decisions Some of which were inescapable That at least in the short term Widen divisions In society That under those circumstances These core political values Without which we should be fearful erode and I think we have not Decades but short years To demonstrate the capacity Of our european north american and other democratic systems latin america asia elsewhere To show that they can grapple With the deepening of inequality In ways that promise a pathway toward more decent and common outcomes An absent that These central values of rule of law consent representation Tolerance and a faith in representative government Might well Continue to erode And then none of the conversations we would like to have Could be conducted in a decent way That i think is the is the worry of our time Well i think that was a very important framing of what We are facing at the moment I think it became clear that there has to be a certain understanding of what Keeps our societies together Ira just elaborated What should be the Let's say minimum consensus For the rules of the game In order to address some of the ardent moral and ethical questions And of course among them also the question of inequality It seems that the The major danger for democratic policies Is a vacuum In the public debate It seems that the Hypothesis of There is no alternative Which dominated the public discourse For quite some time Is a major danger for democracy Because If you are not ready anymore to Think in alternatives In different choices Accepting different Experiments all around the world That You would bring to the table and Take the best out of it Then we are at the end of the democratic discourse And therefore i think it was extremely important that With the help of Our friends from the united states Ira and Michael Andreas and also were able to Put our european challenge Within that Framework And to elaborate on some of The perspectives and necessities That we face And It was my pleasure To be with you today in the morning I hope Ladies and gentlemen You enjoyed too And you know what is the most important Thing in Vienna One o'clock lunchtime Don't miss it, for the best