Interview with Steven Hill by Alissa Bohling from t r u t h o u t
While Europe is far from immuneto the economic decline and resource scarcity it faces along with the rest of the world, columnist and author Steven Hill maintains that the continent still leads the globe in building political infrastructures that foster a shared and sustainable prosperity. In his new book, “Europe’s Promise: Why the European Way Is the Best Hope in an Insecure Age,” Hill heaps plenty of praise on the EU, but when he was invited to address the European Commission during his 12-country, 20-city book tour in Europe this September, he interpreted the honor as an acknowledgment that the world’s largest economy knows it still has work to do.
“They’re realizing that they’re not explaining well what they’re doing and why to their own population, to Americans, to a global audience,” Hill told Truthout. According to his analysis, that needs to change if we are to accomplish what he describes as the “defining task of the 21st century” – creating and equitably distributing wealth among the world’s growing billions without destroying the planet in the process.
Alissa Bohling: Did you have a specific audience in mind when you wrote the book?
Steven Hill: An American audience, for the most part, and to some degree Europeans, but with two different goals in mind. When I began going to Europe in the late 1990s to research political institutions and political reform, things like proportional representation, public financing of campaigns, universal voter registration – these were things Europe was doing that we were not – in the process of going there I discovered that pretty much everything I thought I knew about Europe – high taxes, slow growing economies, businesses strangling in red tape – was wrong, and I started to see the American media reflecting these myths as well. That began ten years of research, almost just for my own edification, interviewing a lot of people, attending conferences, talking to people on the street.
What I discovered in talking to so many Europeans was that they often didn’t seem to know that what they had was unique. For example, they have proportional representation electoral systems, which create multiparty democracies. That’s why you see the Green Party, for example, getting elected in parliaments all across Europe, whereas in the United States, the Green Party hardly gets elected to anything. You only need five percent of the vote to win a seat Germany, as opposed to 50, 60, in some Congressional districts in the United States 70 percent is what you need to win. A lot of Europeans assumed that we have a democracy just like theirs. They didn’t realize that we have these single member districts; we don’t have public financing of campaigns; we don’t have free media time for candidates. And so the book became in many ways a project to help both sides of the Atlantic to really understand what’s unique about the other, what’s working, what isn’t working, and how we can learn from each other.
AB: One of the thing’s that’s refreshing about “Europe’s Promise” is that it’s so positive. Do you worry that the book will be perceived as being too starry eyed about Europe’s successes or too critical of America’s shortcomings?
SH: Oh sure, I knew that was going to come. In fact, I have a part in the book where I go through these headlines that appeared in the American media between 2003 and 2006 and even through the nineties, where the American media is clearly ideological in how it reports Europe. And so I list these headlines showing, you know, “Europe’s economy is going downhill; it’s a basket case,” when in actual fact, Europe was in the process of passing the United Stated in terms of economic output, job creation, productivity, all these sorts of things. In Newsweek International, a cover story appeared in October 2006 – the headline was something like “Europe’s Great Jobs Machine” – about how Europe was surpassing the US. That article never appeared in Newsweek domestic.
So, I knew going into it that I was going to face these sorts of headwinds. American media has this major response to discount Europe because they see Europe as this socialist enterprise. My book goes out of its way to show it’s not socialist at all; it’s capitalist. Europe has more Fortune 500 companies than the US and China combined, has more small businesses than we have in the US creating, two-thirds of the jobs, compared to not even half the jobs in the US. Up until the stock market crashed in 2008, if you invested your money in European stock markets, you made more on average than you did in the American stock market. But theirs is a different type of capitalism, which I call in my book social capitalism. Social capitalism creates a more broadly shared prosperity, whereas Wall Street capitalism is much more of a trickle-down type of capitalism in which more money goes into the pockets of wealthy people.
AB: One of your book’s key points is that other nations should look to this social capitalist model as they aim to increase their own prosperity. Have you been following the growth of Benefit Corporations and the new legislation passed in Maryland and Vermont that will free up certified companies there from corporate laws that put shareholder interests ahead of social interests?
SH: No I haven’t, but I’ve written before about stakeholder capitalism. In Pennsylvania at the end of the 1980s, you saw an odd left-right combination where labor unions were working with the Chamber of Commerce because Pennsylvania was getting hit with corporate raiders like T. Boone Pickens, and so they passed what was called a stakeholder law that gave CEO’s and corporations the legal right to consider the impact of a buyout on its employees and on the community, because legally speaking, CEO’s and boards of directors have to maximize shareholder values.
There’s been a low-key movement to do this for a while. What I would suggest to that movement is that they should really take a strong look at what Europe has done, led by Germany, because Germany has taken this to a whole other level. They have major corporations like we have in the United States, Fortune 500 companies, but the key difference is that, by law, the workers in those corporations are allowed to elect 50 percent of the board of directors. It would be as if Wal-Mart, by law, were required to allow its workers to elect 50 percent of its board members. You can imagine the difference that would make in how Wal-Mart behaves. It creates a culture of consultation where the employers and the employees are very much involved in an ongoing dialogue. It’s not always an easy dialogue, sometimes it’s rather tense and sometimes can result in strikes if they can’t get along, but the institutional basis is there for creating economic democracy.
AB: Moving back to the media angle, you criticized American media for overlooking or misreporting Europe’s successes and losing the opportunity to show US readers what’s possible for our future. Are there any US outlets you would recommend for their European coverage?
SH: It’s an across the board miss. Even places like Democracy Now!, they routinely have commentators on who simply just bash capitalism and throw everyone into the same damned basket, instead of realizing Europe has a different type of capitalism than we have in the United States. If you look at Europe and compare what they have to the progressive agenda, Europe pretty much has the progressive agenda. They’re defending it; they’re trying to keep it from being cut back in the face of competition from trickle-down economies from places like the US and the uber-trickle-down economies which are China and India, but, nevertheless, the progressive agenda is being realized in Europe – universal health care, more generous retirement pensions, paid sick leave, paid parental leave, low-cost or in some countries free university education, free or low-cost childcare. Occasionally, you’ll see articles here and there, but it just gets lost amongst the morass of headlines about Iraq and Afghanistan and everything else.
AB: You make a point in the book of calling Europe’s social programs “workfare” rather than “welfare” because of their focus on the keeping the workforce strong and self-supporting. Can you talk about what systems some of the European countries have in place for the poorest of the poor, such as the homeless and others who aren’t part of the workforce?
SH: For starters, they have more generous unemployment. Every country has at least a year and in some cases up to two or three years of unemployment. Some argue that it might be too generous and people don’t have to go back to work. But their system isn’t punitive like ours is and their philosophy is that it’s not the individual’s fault; it’s more that the system hasn’t created enough jobs and we have to make sure these people are taken care of. That, in turn, prevents the other social ills that the unemployed often get afflicted with, like domestic violence, alcoholism, drug abuse, mental illness; all these things go up when the unemployment rate goes up.
They also have better job training. Denmark, for example, puts four percent of its GDP into job training. That’s an astounding amount – that’s as much as we put into the military.
AB: Some of the strongest praise you offer in the book goes to Europe’s use of the carbon trading market to lower greenhouse emissions. It seems one of Europe’s biggest advantages on this issue is that special interest groups – like the oil lobby that helped kill the climate bill here in the US – don’t play the same role in European politics as they do here. Can you talk about how some of Europe’s governments have managed to keep special interest groups at bay?
SH: It comes down to political institutions. They have full public financing of campaigns, so that even the smaller, minor parties receive public financing. You have free media time for candidates and for parties around elections, so you don’t have political parties who have this drive to suck up so much private funding for their campaigns like vacuum cleaners.
A few years ago in Germany, there was a scandal – quote “scandal” – because the then-head of the Christian Democratic Party, which is the largest conservative party in Germany, was found to have a slush fund of $1 million dollars. I was like, “A million dollars? You can’t even get a Congressional seat in the United States for that amount of money!” I mean, that’s not a slush fund; that’s like a rounding error for the political parties in the US, but it was a big deal in Germany that led to the Christian Democrats losing the next election. It shows you how the political landscape is tilted so differently.
When it comes to the environmental issue, they have proportional representation, so you can have a Green Party that gets elected and is in the legislature now, pushing their agenda, to the point where environmental policy that the Greens were pushing ten and15 years ago and people said, “Oh, that’s crazy, we can never do that.” It’s now mainstream German or Swedish or French or whatever politics. So, the progressive parties there have managed to push the political center where it doesn’t matter so much what the special interests want because they’re simply outvoted in these democracies. Whereas here in the United States, special interests outvote the people because the democracy doesn’t work; the privately financed campaigns don’t work.
The Europeans are looking at the American political system and they’re just aghast at this point, because they really hoped that Obama was going to be a big break from the Bush years, and certainly Obama has been different from Bush, but the break has not been significant enough, especially when it comes to these global climate change issues. The Europeans are quite disappointed in Obama.
AB: Do you think that Sarkozy and others are going to take up again this call to tax imports from countries that have lax climate regulations?
SH: I don’t think they’ll take it up as actual policy anytime soon. It’s meant more as a rhetorical shove to the foot draggers like the United States, and to some degree China, though I think that Europeans don’t have as high of expectations of China because everyone recognizes that China is still a developing country in many ways, and, on top of that, it’s the advanced economies that have pumped all the carbon into the environment.
The Copenhagen summit was really the wake up call to Europe about what they could expect from Obama. Obama came to Copenhagen saying we’ll reduce our carbon by 17 percent, but you had to look at the fine print, which said 17 percent of 2005 levels. Everyone who talks about carbon emission reduction, you’re always talking about 1990 levels – I don’t know how the Obama administration thought they were going to pull the wool over people’s eyes like that. And the American media, as a good example, completely missed the subtleties. They reported Obama as showing up and being the person who brokered the deal with the Chinese. But what really happened was he showed up to broker a deal with the Chinese to do next to nothing. It was basically a coalition of the unwilling. And the Europeans, of course, saw this immediately and realized – oh, my god – Obama just can’t deliver. And why can’t he deliver? Because he needs 60 votes in the Senate. And really no one was predicting that this was going to be a problem, because you never needed 60 votes in the Senate for every piece of major legislation in the past, but in this filibuster-gone-wild Senate, Obama just really can’t deliver.
AB: What was it like to come back to the US after going on these research trips to Europe to document the ways in which they are ahead of America and then to return to this country that’s so far behind in many ways?
SH: I did my research over a period of ten years, but there was one moment that really struck me. I was standing on a corner in Paris, this was probably midway through my research, and I realized, everyone who’s walking around me, they all have health care; they all have some sort of retirement waiting for them; they have more vacation; they all have access to all these supports Americans don’t have – what other difference does that make in people’s mentalities to realize you have all that? An American friend of mine who’s been living near Toulouse, France, for about 15 years, she got a hornet sting when I was visiting her. She calls up her doctor and, 20 minutes later, there’s the French doctor with his little, black bag. What does that feel like to a person, to know that you have that kind of access to the support that you need?
I wrote in the book that perhaps this is why Americans have a more violent society, because you don’t have the degree of security and being taken care of here that you have there. Instead, you have a feeling of, it’s this dog-eat-dog world and you’ve got to scamper up the ladder to get your piece of the pie. So, of course, that’s going to make people more tense, more anxious, and those who don’t succeed, it’s going to make them resentful and bitter, and perhaps resorting to things like violence in order to vent the frustration that they feel.
AB: Is there anything else you’d like to mention?
SH: You’ll see American critics say that Europeans have all these things, but they pay a lot more in taxes in order to get it. That’s a myth. If you’re an American paying escalating health care premiums, if you’re paying higher co-payments and deductibles, if you’re an American student graduating from college with a lot of debt, if you’re an American paying more than $12,000 a year for childcare, you’re paying more out of pocket for your own retirement, more out of pocket for senior care; what you see is that Americans actually pay a lot more out of pocket for the things that Europeans get in exchange for their taxes. So, when you look at things like the Forbes Tax Misery Index – Forbes is obviously an ideologically biased magazine, yet this Tax Misery Index is cited as an authoritative source on who pays more taxes – but all they’re looking at is income tax, Social Security tax and a few other minor taxes like sales tax. When you do that kind of analysis, you see Europeans at the highest end of taxes, and here’s America, down there, happy as a clam, around the Philippines and Indonesia and Malaysia. But what they’re not telling you is that Americans are paying a lot more out of pocket. So, in order to square that circle that Americans are still paying more, you have to then advance the argument that, well, at least it’s discretionary. But is it really the case that having things like health care, retirement, university education, are these really discretionary today, or are these things you need to support yourself and your family in this increasingly insecure age?