The service industry sector in the United States is equally
characterized by aggressive commercialism. Personal services of
infinite variety are part of the American market economy. Their
European counterparts are in general less profuse and varied, more
extensively regulated, and to great extent provided by public
agencies rather than for-profit entrepreneurs. The health care sector
provides just one example. Although more regulated than in the past,
and dependent on tax-financed subsidies for the care of the elderly
and indigent, health care in the United States continues to function
as a commercial industry. The recent American fervor for cost control
has not reduced commercialism, only changed its shape. For-profit health
maintenance organizations now charge fees for their work to reduce
the direct expenses for health care providers and products. The
savings that result from lower costs for medical services themselves
therefore must be balanced against the new expenditures for the
middleman role of the cost containers. More generally, despite recent
privatization efforts in Britain and elsewhere, whole ranges of
public services, transportation, sanitation, communications, public
safety, and so on tend to be public enterprises in Europe but private
enterprises in the United States. Even the U.S. Postal Service has
been organized since 1971 to operate on a for-profit basis, and there
are many and increasing examples of business as well as residential
communities policed and sanitized by commercial contract, or of
prisons operated by private contractors.
While European practice in the service industries obviously generates
employment, that employment is funded by government budgets. These
tax-supported service activities can only sustain or increase
employment at public expense. The result is disproportionate European
vulnerability to conditions of scarce employment and excessive
leisure. To the extent that it results in greater profit and higher
employment in the commercial service industries, excess leisure in
the United States is not an economic disaster but an opportunity. In
Europe, however, the consequence of excess leisure is greater demand
for government-operated public services, increasing the need for tax
revenues, and adding to employment only at greater public cost.
The U.S. economy also contains a large "third sector" (the first
being the for-profit, and the second the publicly-financed), which
consists of the charitably supported component. To a very pronounced
extent the religious, cultural, educational, and intellectual
activities of American society are in the hands of not-for-profit
organizations. These provide a great range of community social
services at no direct cost to the consumer. (True, this
multibillion-dollar component of the American economy is partially
tax-supported: the private gifts that support it are tax-deductible
for the donor, and the organizations that deliver its services are
tax-exempt. Thus public support is derived from taxation--but from
taxation foregone rather than from tax-funded appropriations.)
The economic significance of this third sector is very considerable.
Its current annual operating expenditures, involving over a million
institutions, represent roughly 8 percent of gross domestic product,
and it utilizes over fifteen million people, composed of
approximately ten million full- and part-time employees and more than
five million volunteer equivalents of full-time employees. The
sector's share of national income is nearly 7 percent, just under
half the 15 percent share of government. (The share of national
income for for-profit business is 78 percent.) A European counterpart
of this not-for-profit sector exists, but on a much reduced scale
compared to the United States.
The Political Implications of Europe's Troubles
The purpose of these observations is not to compare the American and European economies overall, but to identify specific economic circumstances that to some degree delay and cushion both the rise and cost of unemployment in the United States, while causing Europe to be more immediately and severely exposed to them. But on both sides of the Atlantic, these are early days.
The impact of the increasing lack of work and the concomitant growthof demand for tax-supported relief on advanced societies will greatly strain the fabric of European society, and do so sooner than in the United States. No one can forecast how Europe will respond to the unprecedented challenge that it is still only beginning to face, but experience suggests that its response may pass through four phases: denial, amelioration, crisis, and resolution.
Denial is the typical initial human reaction to an unexpected confrontation with threatening circumstances that defy easy comprehension. Individuals as well as societies cling to the familiar, and deny that it may no longer apply. Policymakers are of necessity focused on the issues of today and tomorrow--on the "in" tray, as the saying goes--and thus tend naturally to reject the prospect that the day after tomorrow will present radical change. At any given time politicians in Europe's democratic states, no less than those in America, keep at least one eye trained on the next election, and incline to defer identifying new problems so long as current ones provide sufficient challenge. The press and the public refer indications of trouble to traditional experts who prescribe traditional remedies. Any analysis forecasting radical change is likely to meet not only rejection, but irritated denial.
But contemporary Western Europe is approaching a degree of discomfort that already renders denial difficult to sustain. The triple burden of rising unemployment, assisting Central and Eastern Europe, and adjusting to the harsh requirements of the euro currency is directing attention to the early warning signals of a new economic and social era. Thus the second phase of response, amelioration--the effort to improve the situation by making the necessary adjustments--already seems to be in the infant stage. The issue of whether or how best to proceed with the single currency is not universally regarded as definitively settled; even the German government now suggests that the 3 percent debt figure is not holy writ, but only a general target. There is a rising European chorus urging belt-tightening and drastic measures to reduce unemployment--witness the French effort over the past two years to rein in labor benefits. But the effort to ameliorate unavoidably produces a clash between the emerging new era of work as privilege and the deeply rooted European commitment to social justice--hence, not incidentally, the long and bitter strikes that the French government's efforts have occasioned. Unless dramatically new methods are established to distribute an abundance produced by a minority of able-bodied adults in society, that clash seems bound to produce a general and mounting crisis.
On the surface, the technologically advanced societies of Western Europe and the United States are much alike. Both exhibit the dominance of an urbanized middle class whose value system sustains an essentially free-market economy, as well as political democracy. Both prefer to operate by compromise rather than command. Below the surface, however, the legacy of centuries of class consciousness and class conflict still remains part of the European social fabric. The open frontier spirit of American society, ever optimistic and individualistic rather than disciplined, ruthlessly self-centered and mobile rather than embedded in a static communitarianism, sharply contrasts with the European mentality. The sense that options are closed and that gain by one group is made possible only by loss on the part of others, that expectations should be restrained in the face of centuries of disappointment, still prevails in European thinking.
One result of these differences is that political divisions in Europe are far more deeply rooted than in the United States. The concept of social justice, while wholly accepted in America as well as in Europe, has connotations that are widely divergent from one side of the Atlantic to the other. In the United States, it brings to mind human rights, the individual freedoms of the Bill of Rights, a pragmatic need to protect the public sensibility from intolerable affront, and a keen awareness that even the indigent have economic potential. In Europe, however, social justice has echoes of revolutionary struggle, of triumph over past oppression, and of the ever-present threat to "us"--who do the work--by "them"--who rapaciously reap the profit. The fundamental difference between the European welfare state and the American version lies in the European conviction that it is the indispensable and desirable role of the democratic state to promote and preserve social justice, while for most Americans the state is at best a necessary but dubious last resort. In theory at least, they continue to subscribe to the Jeffersonian dictum that that government is best which governs least.
Differences as to the meaning of social justice between Europe and the United States are further complicated by divergences in the role of religion. As Peter Berger has shown in these pages, church membership has declined throughout the technologically most advanced nations of Europe. But in the United States religion survives as a serious force, and in recent years a significant conservative religious Christian movement with important political implications has arisen. What is commonly called the "religious right" is explicitly committed to traditional Christian values, but it is also vigorously and explicitly hostile to "big government" and what its leaders decry as godless betrayal of the sacred--such as the right to life when abridged by legalized abortion.
The American religious right has been evoked by an opposition to the dominant secular religion of the day - that stream of American social and political liberalism that gained great strength from the mid-1950s to the mid-1970s. As in Europe, American liberals maintained, and still maintain, that it should be a primary obligation of government to promote social justice. Clearly it would be impossible to explain the origins of the American civil rights movement without reference to such a phenomenon. On both sides of the Atlantic, this obligation has become a canonic element in the Western civil religion - both in its diluted Christian form, and in the do-goodism into which the once proud tradition of classical liberalism has now degenerated.
The key difference between Europe and the United States in this regard is twofold: nothing comparable to the American religious right is in evidence in Europe nowadays; and the liberal orthodoxy is institutionalized far deeper in the structures of the welfare state - and even inside the churches - in Europe than it is in America. This lay orthodoxy is under attack in America; in Europe, with the partial exception of Britain, it really is not.Essay Types: Essay